• Chinese rival app Xiaohongshu is overwhelmed by ‘TikTok refugees’ in US
• China’s call for deeper Japan trade ties may clear way for seafood imports to resume
• China seeks more jobs, more FDI as external pressures threaten economy in 2025
• Indonesia seeks a Chinese solar boom in the shadow of US tariffs
• China fans thrilled that knife attack hero’s wife is expecting again after losing newborn
• Could visit to Taiwan by mainland Chinese academics be first hint of a thaw?
• Was 2024 the year Hong Kong won back mainland Chinese tourists?
• China crisis looms as Europe’s gravy train stalls: ‘nobody is making money’
• How Thailand can tackle influx of cheap Chinese goods beyond tariffs and import bans
• Chinese study finds hotpot ingredient can boost battery performance in the cold
• Discovery of massive rare earth deposit in Yunnan a boost for China
• Drivers of China’s science and tech goals revealed as US rivalry intensifies
• China’s Himalayan mega dam deepens India’s water worries
• How Japan plans to stop China ‘stealing the limelight’ at Trump’s inauguration

Chinese rival app Xiaohongshu is overwhelmed by ‘TikTok refugees’ in US

https://www.theguardian.com/technology/2025/jan/18/chinese-rival-app-xiaohongshu-is-overwhelmed-by-tiktok-refugees-in-us

When Angelica Oung received the notification that her Xiaohongshu account had been blocked for violating the social media app’s code of conduct, her mind started racing.

The only picture she had posted on her account, apart from her profile headshot, was of herself wearing an inflatable polar bear suit, holding a sign saying: “I love nuclear”. What could be the problem with that, wondered Oung, a clean energy activist in Taiwan.

Was it because, at a glance, her picture looked like someone holding a placard at a protest? Was it because her costume looked a bit like the white hazmat suits worn by China’s Covid prevention workers during the pandemic, who became a widely reviled symbol of the lockdown? Or was it because in the background was Taipei 101, Taiwan’s iconic skyscraper?

Oung never found out. “It is really opaque,” she said. “My theory is that Xiaohongshu just got slammed with so many new accounts.”

More than 3million US users signed up to Xiaohongshu last week, according to Reuters. “TikTok refugees” have fled to the app, also known as RedNote, as TikTok faces being banned in the US on 19 January if it does not divest from its Chinese parent company, ByteDance.

On Friday, the US supreme court upheld the ruling, rejecting an appeal against the ban from TikTok, which has more than 170million American users. Founded in 2013 as an online community focused on shopping and travel tips, the Shanghai-based Xiaohongshu has more than 300million, predominantly female, users. It is reportedly valued at $17bn.

The surge of new users it is experiencing has forced Xiaohongshu’s moderators to scramble to keep the content on the platform in line with Beijing’s censorship requirements. Unlike TikTok, which is an international subsidiary and has a sister app for Chinese users, Xiaohongshu is a purely Chinese operation.

TikTok’s detractors argue that it is a danger to national security because the users’ data is at risk of being compromised by China. Some lawmakers have also raised concerns that the content on the platform is manipulated to suit Beijing’s interests.

TikTok denies both those accusations.

But fearful of losing access to their favourite app – and perhaps just jumping on a new trend – users have defied the lawmakers’ concerns about the Chinese Communist party and flocked to another Chinese platform.

Like all Chinese social media, Xiaohongshu’s content is strictly censored in line with Beijing’s laws, which prohibits content deemed counter to the government’s interests.

In 2022 a leaked internal document revealed how Xiaohongshu censored “sudden incidents” on its platform, such as discussion of natural disasters and political disturbances.

But its existing guidelines are for Chinese-language content. This week, the hashtag “Red Note is urgently recruiting English content moderators” trended on Weibo, and job listings for English-language Xiaohongshu moderators have been appearing on recruitment websites. Chinese officials have reportedly told the company to ensure that China-based users can’t see posts from US users.

While Chinese internet users are adept at finding their ways round censorship, they are also used to self-censorship, avoiding certain topics that could get them blocked. On Xiaohongshu, they have tips for the American newcomers.

“DON’T mention sensitive topics,” counselled a lifestyle influencer. “Don’t talk about religion or politics,” said one British user in China, who said he has been posting on the platform for five years.

Christine Lu, an entrepreneur based in Los Angeles, was also blocked from Xiaohongshu last week. As a test of the app’s censors, she had posted pictures that featured the Tibetan flag and the Taiwan flag – both topics that are considered “sensitive” in China. “As suspected, it’s going to be impossible to have fully self-expressed conversations with Chinese people in China via this app,” Lu said on X.

Eric Liu, a former content moderator for Weibo, said: “It is still very difficult for Chinese internet companies to conduct English censorship … censors mainly rely on the understanding of China’s political correctness that is cultivated in school and in ideological and political courses … you can’t just rely on translation software”.

Liu said that Xiaohongshu’s lack of English-language capacity meant that censorship was likely to be “rough and indiscriminate … giving priority to satisfying the requirements of the authorities”.

The censorship, and banning of users, may pour cold water on the idea that the app could be a place for Chinese and US internet users to communicate and share jokes and memes.

“I do think it is an unalloyed good that people who are in countries that are geopolitically at odds, and perhaps for good reason, just get to connect with each other,” said Oung.

But there will be a “rude awakening eventually”.

She says: “It’s a really interesting test of whether the Chinese government feels confident enough to actually let it continue”.

Chenchen Zhang, an assistant professor at Durham University, said that the current enthusiasm for the uniting power of social media is a “surreal” throwback to the utopian ideals of the internet in the 1990s.

China’s call for deeper Japan trade ties may clear way for seafood imports to resume

https://www.scmp.com/news/china/diplomacy/article/3295327/chinas-call-deeper-japan-trade-ties-may-clear-way-seafood-imports-resume?utm_source=rss_feed

China may be a step closer to reopening its doors to Japanese seafood imports after Beijing signalled it was keen to strengthen trade in food and agricultural products.

Meeting his Japanese counterpart Taku Eto in Beijing on Friday, China’s agriculture minister Han Jun said that both sides should deepen cooperation, and noted that relations were “at a key stage of improvement and development”, according to his ministry.

Eto said after the meeting that he had made a fresh request for the ban on Japanese seafood to be lifted, the Kyodo news agency reported.

Beijing imposed the ban in August 2023, in the wake of a row over the release of waste water from Japan’s Fukushima nuclear plant.

The Chinese ministry statement on the meeting did not specifically refer to the issue, but quoted Han as saying that China was “willing to … strengthen pragmatic cooperation in areas such as animal health, fishery resource protection, smart agriculture, rural revitalisation and agricultural trade”.

The statement also said that Eto had expressed his willingness to work with China to promote the healthy development of agricultural ties.

Beijing had cited public health concerns in imposing the seafood ban after Japan started releasing treated radioactive waste water from the Fukushima plant, which was hit by the devastating 2011 tsunami.

In September last year, Japan agreed to an international monitoring framework allowing other parties, including China, to engage in independent sampling and monitoring of the waste water discharge.

At the same time, Beijing said it would “gradually restore” the imports of some Japanese aquatic products.

Before the ban, China was the biggest market for Japanese seafood exports, buying more than US$500 million worth in 2022, according to Chinese customs data.

Eto and Han also agreed to continue talks on China resuming Japanese beef imports, according to Kyodo News.

During his three-day visit to China from Wednesday, Eto also met Wang Lingjun, vice-minister of the Chinese General Administration of Customs, and raised the issue of beef and seafood imports, the report said.

The two countries have stepped up engagement in recent months, with relations appearing to thaw since Japanese Prime Minister Shigeru Ishiba took office in October, and with the imminent return of Donald Trump to the White House creating an increasingly uncertain geopolitical environment.

In December, Japanese Foreign Minister Takeshi Iwaya made his first visit to China, where the issue of beef and milled rice imports were among the items on the agenda.

Seafood imports also featured in talks between the governing parties of both countries on Tuesday, their first such dialogue in more than six years.

The two sides also agreed to step up communications to “appropriately address their respective concerns”, according to the Communist Party of China’s international department.

China seeks more jobs, more FDI as external pressures threaten economy in 2025

https://www.scmp.com/economy/china-economy/article/3295322/china-seeks-more-jobs-more-fdi-external-pressures-threaten-economy-2025?utm_source=rss_feed

China has pledged to create more jobs and boost foreign investment as the world’s second-largest economy braces for external uncertainties in the year ahead.

Speaking at a meeting of the State Council, China’s cabinet, Premier Li Qiang called for stronger employment policies, ranging from skills training and job creation to jobs-related financial support.

Li, who will release China’s 2025 job creation and unemployment control targets in early March, ordered government agencies and local authorities to create more jobs in sectors such as advanced manufacturing, services and consumption.

Efforts would also be made to increase the credit limit for special loans aimed at boosting employment, and launch large-scale vocational training programmes, he added during the meeting on Friday.

China’s surveyed urban unemployment rate averaged 5.1 per cent last year, down 0.1 percentage points from 2023, according to official data.

However, the jobless rate for the 16-24 age group has been a key concern in recent years.

The rate hit a record high of 21.3 per cent in June 2023 before the monthly data release was halted for re-evaluation. It resumed in January 2024 with adjustments excluding students.

Fu Linghui, spokesman for the National Bureau of Statistics, said on Friday that the youth jobless rate fell by 0.4 percentage points last month, from 16.1 per cent in November.

With a record 12.22 million university graduates expected in 2025, China’s job market will be under renewed pressure, with the sliding foreign investor confidence likely to worsen the impact.

Many of China’s regional governments are trying to stabilise the job market by focusing on economic growth and opening their markets wider to foreign direct investment (FDI).

At its national work conference on FDIs this week, Beijing’s Ministry of Commerce pledged to further open up sectors such as telecommunications, medical care and education to keep foreign investors onshore and attract new capital.

“[China] will strengthen service support for foreign-funded enterprises and projects … continue to build the ‘Invest in China’ brand, and improve the level of openness and innovation in national-level economic development zones,” the ministry said in a statement on its website on Friday.

FDI in China has fallen sharply since 2023, as investors remain wary of the country’s slowing growth and strained relations with the United States, including uncertainties over what the incoming presidency of Donald Trump and his cabinet of China hawks might bring.

A new Asia Society report said in December that heightened geopolitical tensions and economic decoupling, underpinned by technological and inflationary concerns, would increase “downward pressure” on China’s exports in 2025 while further burdening its economy.

Yuan-denominated FDI in China fell more than 27 per cent from 2023 to 826.2 billion yuan (112.8 billion) last year, government data shows, even though the number of new foreign-invested firms grew by nearly 10 per cent to 59,000.

Despite China’s trade and other tensions with the European Union, some European countries retained their investment interest, the data showed, with FDI from Spain increasing by 130.8 per cent in 2024. No US figures have been provided yet.

Over the past year, Beijing has repeatedly pledged to provide more market entry points for overseas and private investors.

In September, Beijing announced that wholly foreign-owned hospitals would be allowed in several major cities, with foreign investors allowed to provide human stem cell and gene therapy services in pilot free trade zones.

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Indonesia seeks a Chinese solar boom in the shadow of US tariffs

https://www.scmp.com/week-asia/economics/article/3295253/indonesia-seeks-chinese-solar-boom-shadow-us-tariffs?utm_source=rss_feed

As US tariffs squeeze Chinese solar firms across Southeast Asia, Indonesia is emerging as a surprising outlier – sensing opportunity where others feel the heat.

While its neighbours grapple with the fallout of Washington’s trade crackdown, Jakarta is doubling down on its renewable energy ambitions, wooing Chinese investment and positioning itself as the region’s next solar powerhouse.

To attract Chinese solar giants looking to diversify their operations, the Indonesian government is loosening its regulatory grip, slashing local content requirements and leveraging billions in potential investments.

But analysts warn that the country could become the next target in the US-China solar stand-off, even if it is not currently on Washington’s tariff radar.

Jakarta’s courtship of Chinese solar firms is already bearing fruit. Over the past 18 months, at least four solar projects linked to Chinese companies have begun operations in Indonesia and Laos, with another two in the pipeline, according to Reuters. Together, these projects aim to produce 22.9 gigawatts of solar cell and panel capacity – much of it destined for the United States.

Among the major players are Thornova Solar, the US-based subsidiary of China’s Yuncheng Solar Technology; New East Solar, another China-linked firm; and Lesso Group, a Chinese conglomerate best known for manufacturing industrial materials.

US government data shows imports of solar products from Indonesia reached US$246 million in August, nearly doubling from the year before.

The momentum accelerated in December, when Indonesia’s Minister of Investment and Downstreaming Rosan Roeslani returned from Beijing with US$7.5 billion in investment pledges from Chinese companies. The lion’s share – US$5 billion – came from Hongshi Group, which plans to build a sprawling industrial estate in East Kalimantan to produce solar panels and components.

China’s dominance in the solar sector is well-documented – accounting for 80 per cent of global solar cell shipments in 2023, according to solar industry research firm SPV Market Research. But this dominance has come at a cost. Since 2012, the US has imposed successive rounds of tariffs on Chinese solar products, pushing many firms to relocate their manufacturing to Southeast Asia.

That strategy hit a wall in December when the US Department of Commerce slapped anti-dumping duties of up to 271.2 per cent on solar products from Malaysia, Vietnam, Thailand, and Cambodia. The move effectively shut down a US$12 billion pipeline of Chinese-controlled exports to the US, forcing many firms to rethink their regional operations.

“It disrupted Chinese solar firms’ reliance on Southeast Asia as a key assembly and re-export hub to the US significantly,” said research analyst Jiayu Li, a senior associate at economic consultancy Global Counsel specialising in the China market.

Indonesia, so far untouched by the tariffs, has emerged as a potential safe haven. But analysts caution that Washington’s scrutiny could soon shift.

“There may be a time lag for the US government to respond, but sooner or later, the cat will chase the mouse,” said Putra Adhiguna, managing director at the Energy Shift Institute in Indonesia.

To attract Chinese investment, Indonesia has loosened up its regulatory requirements, reducing the proportion of locally sourced materials required in solar projects to 20 per cent from the previous 40 per cent, which had been seen as a major obstacle.

But its solar ambitions face a glaring obstacle: weak domestic demand. Despite the country’s vast renewable energy potential, solar and geothermal sources accounted for just 13.1 per cent of Indonesia’s energy mix in 2023 – falling short of the government’s 17.87 per cent target.

“Domestic demand for solar panels [in Indonesia] is not as high as what we see in other countries as current policies are not supportive of developing this industry,” said Siwage Dharma Negara, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore.

For Indonesia to build a sustainable solar industry, analysts argue it must look beyond exports and turbocharge local adoption of renewables. This would not only insulate the sector from potential US tariffs but also help Indonesia transition away from its heavy reliance on coal and oil.

“In case the US imposes tariffs on solar components from Indonesia, the manufacturers will still be able to supply to the local market, unlike the situation in Cambodia, Malaysia, Thailand, and Vietnam,” said Yana Hryshko, head of global solar supply chain research at consultancy WoodMackenzie.

The US-China solar stand-off has already upended supply chains across Southeast Asia, with factories closing and hundreds of workers laid off in affected countries like Vietnam. Indonesia’s decision to embrace Chinese solar firms carries both opportunity and risk, as policymakers walk a fine line between attracting foreign investment and avoiding Washington’s ire.

Analysts say the success of Indonesia’s solar gamble will hinge on its ability to foster domestic demand. “Asean’s solar production capacity has largely aimed for export markets, including the US,” Putra said. “These countries will need to spur domestic demand for their renewable energy supply chain to grow.”

For now, Indonesia appears ready to play the long game, betting that its vast untapped market and government reforms will give it an edge in Southeast Asia’s solar race. Whether that bet pays off – or backfires under the weight of global trade tensions – remains to be seen.

China fans thrilled that knife attack hero’s wife is expecting again after losing newborn

https://www.scmp.com/news/people-culture/china-personalities/article/3294295/china-fans-thrilled-knife-attack-heros-wife-expecting-again-after-losing-newborn?utm_source=rss_feed

Nanjing Fat Brother, a man given the affectionate name because of his ample size and his heroism in stopping a knife attack years ago, shared the good news that his wife is pregnant again on social media.

Qiu Shaochun’s wife Liu Jia gave birth to a daughter in September 2023, but the infant passed away 21 days later of a heart condition.

Qiu, 36, a former shot-put athlete, received the Good Samaritan Award from the Nanjing municipal government, in eastern Jiangsu province in 2021 after he bravely stepped in to stop a knife rampage by a man who had already stabbed and run over several passers-by while trying to attack his ex-wife.

The assailant then lunged at Qiu three times with the weapon, injuring his chest, stomach and legs.

For a year after the incident, he had to wear a colostomy bag because of the serious injury to his stomach.

On January 8, Qiu said on social media that his wife has been pregnant for three months.

“It is the best beginning for Year 2025, and also the best gift for our wedding anniversary day on January 9,” said Qiu.

“The prenatal check-up shows everything is fine. I hope the pregnancy goes smoothly and my baby is healthy!” he told the news outlet The Paper.

After the couple’s first baby was born it was put in intensive care to treat a serious heart condition, Qiu sought financial help on social media.

His account was soon inundated with public donations. He closed the donation channel after receiving enough money.

Qiu returned the remaining money not spent to save his daughter to donors, or to charitable organisations.

Tragedy struck again when his father died of cancer three months after the death of his daughter.

Qiu said he was diagnosed with post-traumatic stress disorder and moderate depression in April 2024 as a result.

He now runs a snack shop at a tourist spot in Nanjing.

Qiu’s wife’s new pregnancy has prompted widespread good wishes on mainland social media.

“What a good news! Wish his wife and his baby good luck,” said one online observer.

While another person said: “Good things happen to good people.”

“Congratulations Fat Brother! Milk Candy (Qiu’s late child’s nickname) has come back to find her dad and mum,” wrote another.

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Could visit to Taiwan by mainland Chinese academics be first hint of a thaw?

https://www.scmp.com/news/china/politics/article/3295265/could-mainland-chinese-academics-visit-taiwan-be-first-hint-thaw?utm_source=rss_feed

A recent visit to Taiwan by two prominent mainland Chinese academics to meet their counterparts on the island has prompted speculation that it may open the way for unofficial exchanges between affiliates of the Beijing and Taipei governments.

However, some analysts have expressed scepticism and suggested that the ruling Democratic Progressive Party (DPP) may be trying to create a misleading impression about the prospect of holding formal talks with Beijing.

Yan Anlin, the academic committee director of the Shanghai Institutes for International Studies, and Sheng Jiuyuan, director of the Centre for Taiwan Studies at Shanghai Jiao Tong University, were granted approval by Taiwanese authorities to visit the island between January 5 and 10.

Taiwan’s Mainland Affairs Council, which oversees cross-strait policies, confirmed they were visiting on January 9 after local media reported that the pair had met representatives of two Taiwanese think tanks, one of which is reportedly linked to the DPP.

“They are indeed in Taiwan. It is our position that exchanges between think tanks on both sides are beneficial for mutual understanding,” Liang Wen-chieh, a spokesman for the council, said.

He added that the council would “make proper arrangements for interactions [to address] concrete issues”, but declined to disclose specific details of their discussions.

The mainland visitors reportedly met representatives of the Institute for National Policy Research – a think tank reported to have ties to the DPP – and the Foundation on Asia-Pacific Peace Studies, which is connected to Taiwan’s National Security Bureau.

The visit, just ahead of Donald Trump’s return to the US presidency on Monday, has prompted speculation about unofficial “Red-Green” exchanges between affiliates of the Communist Party of China and the DPP to address cross-strait tensions.

However, the Institute for National Policy Research responded to media descriptions of it as a “green think tank” – the colour of the coalition between the independence-leaning DPP and other like-minded parties – by saying it is not a government or party political organisation.

It dismissed as baseless claims it had taken part in “secret meetings”, adding that the discussions were purely academic and covered topics such as cross-strait relations, US-China relations and global economic trends. It also released photos of the meeting in the interests of transparency.

Analysts noted that cross-strait tensions have made Taiwanese organisations cautious about inviting mainland scholars or officials, often adopting a low profile to avoid controversy.

“Unfortunately, the visit by the two Shanghai scholars and their meetings with Taiwanese think tanks, along with photos of their interactions, were publicly revealed while they were still in Taiwan,” said Wang Kun-yi, head of the Taiwan International Strategic Study Society, a Taipei think tank.

“This revelation is not only embarrassing but could also hinder future visits by mainland scholars, who receive approval from Beijing on the condition that they avoid meeting DPP officials or affiliated organisations.”

Wang suggested the visit might have been an effort to gauge the feasibility of future “Track II” dialogues – a term used for unofficial exchanges between non-state groups and individuals.

Taiwan’s leader William Lai Ching-te used his New Year’s address to express his openness to resuming cross-strait talks, proposing tourism-related groups as a possible channel.

“Lai seems to recognise that Taiwan cannot continue direct confrontation with Beijing and has signalled interest in renewed exchanges, anticipating potential shifts in US-China relations as Trump returns to office,” Wang said.

He also argued that Beijing’s approval for the visit suggests a cautious openness to cross-strait engagement.

Beijing has repeatedly attacked Lai as a “separatist” and warned he is likely to increase the risk of war. He also angered the mainland government by saying that the two sides “are not subordinate” to each other.

Beijing views Taiwan as part of its territory and has never ruled out the use of force to bring it under its control.

Most countries, including the island’s main international partner, the United States, do not recognise Taiwan as independent, although Washington opposes forcible reunification and is legally bound to supply it with weapons.

Liu Chin-tsai, a professor specialising in cross-strait relations at Fo Guang University in Yilan in Taiwan, cautioned against expecting a significant thaw in academic exchanges.

“It’s premature to conclude that the scholars’ visit will lead to more frequent or impactful exchanges,” Liu said, emphasising that the meetings they took part in were exploratory and designed to improve mutual understanding rather than a “Red-Green Track II dialogue.”

But he added that the visit could open the door to broader communication if handled carefully.

Analysts said the DPP might be trying to suggest that some form of “Red-Green” talks were under way in an effort to show that cross-strait development could align with the party’s policies.

“The DPP wants to create the impression that without the 1992 consensus, it can still hold talks with mainland China,” Ho Chih-yung, a professor of general education at Taiwan’s National Tsing Hua University, said.

The 1992 consensus is a tacit agreement that there is only one China but the two sides may differ on what that means.

Beijing has insisted the consensus must be the political foundation for cross-strait relations and it cut off official exchanges in 2016 following the election of Lai’s DPP predecessor Tsai Ing-wen, who refused to accept that.

Bao Chengke, deputy director of the Institute for East Asian Studies in Shanghai, echoed Ho’s comments, saying: “If a Track II mechanism is to be established, it first requires a shared understanding of the 1992 consensus between the two sides.”

He also said Lai must abandon any “pro-independence stance”.

Was 2024 the year Hong Kong won back mainland Chinese tourists?

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3295311/was-2024-year-hong-kong-won-back-mainland-chinese-tourists?utm_source=rss_feed

The number of trips to Hong Kong by mainland Chinese visitors rose 27 per cent year on year as the 2024 tally reached 34 million, according to official figures, with observers saying the uptick is likely to continue but expressing doubt over its economic impact.

Hong Kong also recorded a 48 per cent year-on-year surge in residents making trips across the border, reaching more than 93 million, over the same period.

But while experts said that such growth was expected to continue, they believed it was likely to slow down this year.

The data from the Immigration Department is based on the number of inbound trips by mainland residents using all crossings and departures by Hongkongers using all checkpoints except the airport.

Appearing on a radio programme on Saturday, Secretary for Commerce and Economic Development Algernon Yau Ying-wah said that while mainlanders had changed their spending patterns, Hongkongers splashing out in the north had become a habit.

“As a result of the global economic uncertainty and the changing spending patterns of consumers, we have to seek changes, know how to cope with these changes and cope with them,” he said.

“Hong Kong is in the process of economic transformation – industry players must come up with innovative and creative ways to attract consumers.”

Gary Ng Cheuk-yan, a senior economist with Natixis Corporate and Investment Bank, said most of what mainland shoppers wanted could be bought online, meaning there was no reason for them to shop in Hong Kong, where there was no price advantage.

“Would more visitors mean economic benefits, like it was in old times, given the change in consumption patterns? Could it really cancel out Hongkongers’ expenditure abroad?” he asked.

The senior economist said mainland tourists would still help boost business for the food and drink industry.

He added that products reliant on confidence in Hong Kong regulations, such as gold and healthcare products, would still perform well, but the overall economic benefit for the city was a “question mark”.

Ng said the trend of Hongkongers heading north to spend would continue to strengthen given the significant price difference between the city’s and the mainland’s goods, in addition to a strong Hong Kong dollar meaning travel was relatively inexpensive.

But he said the rise in such cases would not be as obvious as the past trend of “revenge trips” following Covid-19 pandemic, but would still present challenges for the retail industry.

“Mainland e-commerce platforms could be more aggressive in expanding their business in Hong Kong by offering shorter delivery times and discounts on delivery fees,” Ng said.

“This could bring structural influences and competition [to local businesses].”

The senior economist said there could be further waves of business closures in Hong Kong, adding that while the city’s nominal retail sales might rise due to factors such as inflation, the real figure was likely to be negative.

Last month, mainland authorities relaunched a multiple-entry visa scheme for Shenzhen residents as part of efforts to bolster tourism in Hong Kong.

But Ng stressed that attractive mega-events in Hong Kong were key to ensuring the visa scheme was effective, attracting visitors to travel there with ease to contribute to the local economy.

Economist Simon Lee Siu-po said the multiple-entry visas could bring more mainland visitors to Hong Kong, but noted the retail sector should not expect a significant boost from the measure since the spending patterns for such travellers were weak.

Travel Industry Council chairman Tommy Tam Kwong-shun also said the trend of Hongkongers travelling to the mainland would likely slow down this year as the novelty was starting to wear off and that portion of the market was becoming saturated.

“What I have heard a lot at the large-scale supermarkets is that when Hong Kong shoppers bulk purchase, there is not enough space to store things in their small flats,” he said.

“Some also said while it was convenient to head to the mainland, it could still be tiring and that there are usually huge crowds before and after main holidays.”

But Tam said he was hopeful that sporting events such as the National Games or large-scale concerts could bring more visitors to Hong Kong this year, and that tourists using multiple-visa entry could produce economic benefits.

“When there are more people, there will be more spending,” he said, encouraging businesses to do more to attract tourists that could be promoted on their social media, helping to draw more visitors and creating a circular effect.

China crisis looms as Europe’s gravy train stalls: ‘nobody is making money’

https://www.scmp.com/news/china/diplomacy/article/3295313/china-crisis-looms-europes-gravy-train-stalls-nobody-making-money?utm_source=rss_feed

It was just past 11 on a freezing December morning on the outskirts of Brussels, but already workers at the city’s Audi factory were cracking open frosty cans of beer.

They had just finished a long night shift – not on one of the production lines at a plant that has produced 8 million cars since 1949, according to a huge sign on its exterior wall – but on a picket line outside.

Pallets and old furniture were added to roaring fires in the middle of a road. Hand-painted signs raged, in French, against “Audi, premium thief” and parent company Volkswagen’s plans to move some production to Mexico once it closed this plant and two in Germany later this year – a historical first.

A greying worker who gave only his first name, Pierre, spent 23 years at this plant. It will close for good next month, and he said he did not know what he would do after that. “This is my second city, my second home,” he said in halting English.

For a growing number of analysts and industry insiders, this is ground zero for Europe’s “China shock” – even if the Asian giant does not appear on the bedsheets emblazoned with workers’ demands.

Sluggish consumption in China has slashed Europe’s exports to the country and stifled demand there for products made by European companies. Chinese customs data this week showed a 4.4 per cent drop in its imports from the EU in 2024 compared with a year earlier.

Nowhere in Europe has the pain been felt more acutely than Germany. The EU’s biggest economy faces a third successive year of recession, prolonging its longest spell of economic stagnation since World War II.

Germany’s exports to China fell by 10.7 per cent last year and firms feared being further squeezed in 2025.

The plunge has sent a chill across Europe, reflected by the shivering workers outside the Belgian Audi factory.

“This month, China’s trade surplus has just passed the milestone of – get this – a trillion dollars … This is a strategy that has been planned for 10 years, whose aim, consequence and purpose is purely and simply to replace our industry,” the new French Prime Minister François Bayrou told lawmakers last week.

According to Corinne Abele, chief representative for Germany Trade & Invest in Shanghai: “One of the main arguments why companies are pessimistic about the prospects in 2025 is lagging demand, and this is totally different from the years before.”

She told an event hosted by the Mercator Institute for China Studies (MERICS) on Wednesday that the problem had been “unfair competition, which is still there, or not opening up, but now it’s actually a lack of demand”.

In the automotive sector, “cheques from China are not coming any more”, said an industry source, noting that booming sales of German cars in the world’s fastest-growing market helped deliver high wages and lucrative dividends in Europe.

But the gravy train is slowing down: sales for BMW in China fell 13.4 per cent last year, 9 per cent for Mercedes-Benz, and 11 per cent for Audi, compounding declining demand in Europe.

A report from the Central European Institute of Asian Studies on Thursday found that Volkswagen, “the largest German investor in China, is experiencing declining profits even as it increases its investments in China”.

The situation for European carmakers has deteriorated so rapidly that there is talk of Chinese rivals buying up plants VW plans to close.

This comes as cutthroat competition from Chinese firms pummels European rivals in China, Europe and in third markets.

Faced with the same bleak domestic demand as their European counterparts, these firms are pushing their products overseas, exporting growing levels of industrial overcapacity. This resulted in a near-trillion dollar trade surplus with the world in 2024, Chinese customs data showed, and a 12.6 per cent increase in its surplus with Europe.

As recently as 2020, China was a net importer of cars – a situation that morphed dramatically over the course of the pandemic. It now boasts a 5 million-vehicle trade surplus, while Germany’s own surplus in cars is down 50 per cent over the same period.

For Chinese manufacturers, “Europe is super profitable, especially with an extreme price war in China,” the industry source said. “Nobody is making money in China any more,” the source added, pointing to the “extreme deflation” implicit in 27 consecutive months of falling producer price inflation.

The picture threatens to get even worse for Europe when US president-elect Donald Trump takes office next week. Trump has threatened to impose high tariffs on Chinese goods, with many predicting that a large portion will be diverted to Europe, which remains relatively open to many Chinese goods.

All of this comes ahead of a German federal election in February, which is “haunted by the spectre of deindustrialisation”, wrote analysts in a joint paper from the Centre for European Reform, and the Council on Foreign Relations this week.

“Germany is starting to realise that China’s new automotive, clean technology and civil aviation industrial base directly competes with Germany’s manufacturing foundation. China’s macroeconomic imbalances now directly infringe on German industrial interests,” the analysts said.

The paper is part of a growing body of literature dedicated to the “second China shock”. The first such shock was when China joined the World Trade Organization in 2001 and subsequently gobbled up a large share of global manufacturing, helping hollow out swathes of industrial economies in parts of the United States, Britain, France and Italy.

Germany was spared the brunt of this and, in fact, benefited from China’s accession to the WTO given the complementarity between the two economies. German companies provided much of the machinery to power China’s extraordinary manufacturing boom, while its auto giants got rich off the country’s burgeoning middle class.

“That is no longer the case: China’s economy is much larger; its industry now produces the same goods as Germany and its export-biased growth is cutting into Germany’s European and global export markets,” the analysts wrote.

The problem is only going to spiral, many believe. Already fraught trade tensions are set to further fray in 2025, with the European Commission vowing to continue countering the impact of Chinese overcapacity.

“When the EV train really begins to roll, when the really major shock, the Volkswagen crisis, which is just beginning now, unfolds over the next coming years, that is – whether the Europeans recognise it or not – a China crisis,” the economic historian Adam Tooze told the Post in a recent interview.

“Because whether it’s visible in Europe or not, VW’s, Mercedes’ and BMW’s business models depend on large China markets, and those are under huge threat.”

Politically, however, policymakers are sober about the prospects of this improving any time soon.

Speaking at the MERICS event on Wednesday, the EU’s top official for Asia, Niclas Kvarnstroem, said “the origins of these policies are systemic, meaning that they are part and parcel of the strategic direction that China is taking”.

“Of course, there can be some kind of win-win, but that would require serious, concrete steps by China … I wish I could say we see immediate, concrete signs of that. We don’t at the moment,” Kvarnstroem added.

Back at the Audi plant in south Brussels, workers were nonplussed about rumours that Chinese buyers would reopen the plant to produce electric vehicles, and gloomy about Europe’s industrial prospects.

“EVs, maybe in 30 or 40 years, but not now,” Pierre said. “We in Europe … we are too small, China is cheap, America is big. We are trapped between two giants.”

How Thailand can tackle influx of cheap Chinese goods beyond tariffs and import bans

https://www.scmp.com/week-asia/opinion/article/3295244/how-thailand-can-tackle-influx-cheap-chinese-goods-beyond-tariffs-and-import-bans?utm_source=rss_feed

The influx of cheap goods from China into Thailand has raised concerns that such imports are undercutting local businesses, prompting calls for the government to impose tariffs and import bans to tackle the onslaught.

Since February last year, the share of Chinese imports to total imports has soared in Thailand, reaching a peak of 37.4 per cent in June and only decreasing slightly to 33.6 per cent in September.

Several sectors experienced substantial increases in Chinese import shares in the first eight months of 2024, including plastic and rubber products (43.5 per cent), pulp and paper items (33.2 per cent), metallic products (42 per cent), and automotives (35.2 per cent).

These imports, most of which are severely underpriced, are seen as economic threats to the survival of local firms. One example is Chinese EV maker BYD’s aggressive price cuts in July last year – by as much as 340,000 baht (US$9,800) or 25 per cent of the original vehicle price – which sparked backlash and triggered an investigation by Thailand’s consumer watchdog.

Official data revealed the list of products affected by the Chinese import surge matched those of industries experiencing an increase in business closures in the first nine months of 2024.

Many local firms from industries such as steel and auto parts have demanded that the government take concrete action to stop Chinese imports. The Thai government’s response so far has been mild. It extended its 7 per cent value-added tax to incoming purchases valued at less than 1,500 baht and stepped up law enforcement on value-added taxes and customs duties, as well as on product quality standards.

Local firms have also urged the government to impose higher tariffs or import bans to stop the surge. However, inventory costs for metallic and plastic products are not prohibitive, and higher tariffs could instead end up pushing businesses to stock up their imported inventories.

For products such as electric vehicles and petrochemicals, where China is experiencing excess production capacity and where economies of scale play a significant role, higher tariffs might be offset by further price cuts.

Should China retaliate against the higher tariffs, this would adversely affect other sectors in Thailand, particularly in areas such as fresh fruit exports and tourism.

To tackle the problem, the Thai government should examine the factors contributing to the Chinese import surge and find ways to address them. These include illegal importation, loopholes in existing rules and regulations, low product quality, export subsidy, possible dumping, and genuine price competitiveness. Chinese firms using Thailand as a re-exporting base to the US could also have played a role in the import surge.

The government should continue to clamp down on illegal imports, following raids in the second half of 2024 where more than 94,000 illegal Chinese consumer products in 341 product categories were seized from 47 Chinese supermarkets in Bangkok.

More product quality inspections should be conducted to minimise the possible risks to public health and safety. An independent third-party watchdog mechanism is needed to monitor the efficacy of these actions.

Thailand should investigate whether Chinese products were imported in violation of World Trade Organization (WTO) rules on anti-dumping and export subsidies. Industries likely to be affected by the import surge include petrochemicals, chemicals and rubber products. Given the high capital intensity in some of these industries, this must be done carefully, as exit decisions are irreversible.

One possible avenue for government action is the imposition of temporary import restrictions based on the safeguard clauses available under the WTO or free-trade agreement frameworks. For example, Article 3 of the Asean-China FTA allows any member to use safeguards based on principles under the General Agreement on Tariffs and Trade. Investigations are also required to quantify the extent of injury to local firms from the imports. One advantage of this rules-based approach is that it is less likely to ignite trade tensions between Thailand and China.

To tackle import surges driven by genuine price competitiveness, the Thai government can encourage local firms to adjust their business models – such as switching from manufacturing to trading – and offer new products to take advantage of the lower prices of Chinese imports. It can also help support these firms by facilitating access to financial resources and providing training, skills and knowledge.

For Thai firms which are no longer competitive amid the import surge, regulatory changes are needed to facilitate structural reforms. An effective bankruptcy law with second-chance features is crucial, and Thailand can look to Chapter 11 of the US bankruptcy code that allows for corporate reorganisation of a company even as it continues operations. This can help struggling companies restructure appropriately so that they can begin afresh.

Archanun Kohpaiboon is a Visiting Senior Fellow at the ISEAS – Yusof Ishak Institute, and an Associate Professor in the Faculty of Economics, Thammasat University, Bangkok, Thailand. Prasert Vijithnopparat is Associate Dean for Academic Affairs and Planning, Faculty of Economics, Khon Kaen University. This article was first published by ISEAS – Yusof Ishak Institute’s commentary website

Chinese study finds hotpot ingredient can boost battery performance in the cold

https://www.scmp.com/news/china/science/article/3295269/chinese-study-finds-hotpot-ingredient-can-boost-battery-performance-cold?utm_source=rss_feed

Chinese scientists have found fibre from the konjac plant – an ingredient in noodles and jelly added to hotpot – can improve the performance of water-based zinc batteries in low temperatures by keeping their components from freezing.

Aqueous zinc-ion batteries, still largely in development, are a promising alternative to lithium batteries because of their high theoretical capacity, superior safety, and the wider availability of zinc compared with lithium.

Despite these benefits, the use of these batteries has been limited as the water-based electrolytes used in them are prone to freezing in low temperatures. An electrolyte is a component within a battery that allows the flow of power between the two electrodes.

“A critical challenge in electrolyte development involves improving the antifreeze characteristics without compromising high-rate performance,” the scientists wrote in a paper published in the peer-reviewed journal Advanced Energy Materials on January 7.

The team, led by researchers from Changsha University of Science and Technology in central China’s Hunan province, added konjac glucomannan, a cost-effective and environmentally friendly organic polymer, to their battery’s electrolyte to help disrupt the network of hydrogen bonds in water to inhibit freezing.

Konjac glucomannan is a type of dietary fibre made from the underground stem of the konjac plant, which is known for its culinary applications, particularly in low-calorie noodles and jelly eaten in dishes such as hotpot.

The researchers found that this addition allowed for the formation of a stable colloidal system in an aqueous solution, where particles are evenly dispersed throughout, allowing for better stability and improved ion transport for electrochemical reactions.

“This system can effectively balance the antifreeze performance of the electrolyte with the performance requirements of the cell under high-rate charge – discharge conditions, thereby enhancing the overall performance of the cell,” the team wrote.

They noted that even at a low temperature of minus 10 degrees Celsius (14 degrees Fahrenheit), the cell continued to show “strong electrochemical performance”.

With the addition of the konjac glucomannan, the team’s battery was able to run stably for 1,250 hours at 25 degrees Celsius – and for over 800 hours at minus 10 degrees Celsius – while maintaining capacity.

Other challenges to water-based zinc batteries include the formation of dendrites – metallic crystals that can cross from one electrode to another and cause battery shorts – as well as side reactions.

By reconstructing the hydrogen bond network of water, the konjac glucomannan altered the arrangement of zinc ions, restricted the movement of water molecules and formed a protective layer on the electrodes.

The team said this was able to stop undesirable side reactions from occurring and inhibited zinc dendrite formation – even under low temperatures.

“We have developed konjac glucomannan as an economical, multifunctional, colloidal-like antifreeze electrolyte additive to enhance the rate performance and lifespan of aqueous zinc-ion batteries at low temperatures,” they wrote.

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Discovery of massive rare earth deposit in Yunnan a boost for China

https://www.scmp.com/economy/china-economy/article/3295217/discovery-massive-rare-earth-deposit-yunnan-boost-china?utm_source=rss_feed

China has reported the discovery of an extremely large rare earth deposit in the southwestern province of Yunnan as it seeks to strengthen its control over global supply chains for critical minerals.

The recently discovered rare earth deposit primarily contains medium and heavy rare earths, which are crucial inputs in the manufacturing of hi-tech products including electric vehicles, wind turbines and cutting-edge defence systems.

It has potential resources of 1.15 million tonnes, including more than 470,000 tonnes of key rare earth elements such as praseodymium and neodymium, according to the Ministry of Natural Resources’ China Geological Survey.

“The discovery is highly significant for strengthening China’s advantage in rare earth resources, improving the rare earth industry chain, and further consolidating China’s strategic dominance in medium and heavy rare earth resources,” it said on its public WeChat account.

The latest discovery is one of the outcomes of an initiative launched in January 2023 to locate resources of strategic importance, including lithium, helium and rare earths.

China is the world’s top producer of rare earth elements – which include 17 metal oxides – with 44 million tonnes of deposits, according to the US Geological Survey.

As international competition in rare earth production increases, especially with the United States, China has applied more restrictions to the supply and export of rare earths, which the Ministry of State Security has identified as being “directly related to national security”.

In August, the Ministry of Industry and Information Technology and the Ministry of Natural Resources jointly set the upper limit for last year’s second batch of rare earth mining output at 135,000 tonnes, and that of smelting at 127,000 tonnes.

Combined with the first batch, it set the annual limit at 270,000 tonnes of output, up 5.9 per cent, year on year, and 254,000 tonnes of smelting, up 4.2 per cent.

Following the implementation of the Regulation on Rare Earth Administration in October, exporters now must submit transaction details to the authorities.

China’s rare earth exports rose by 6 per cent last year to 55,431.1 tonnes, according to Customs data. However, the export value decreased by 36 per cent to US$488.8 million.

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Drivers of China’s science and tech goals revealed as US rivalry intensifies

https://www.scmp.com/news/china/politics/article/3295270/drivers-chinas-science-and-tech-goals-revealed-us-rivalry-intensifies?utm_source=rss_feed

A high-profile policy meeting has revealed the key official players behind China’s science and technology drive, as the country pushes for more unified leadership in the sensitive sectors.

The line-up includes finance and education ministry officials, academic chiefs, regional government heads and military officers, footage of the national science and technology work conference aired by state broadcaster CCTV showed.

Vice-Premier Ding Xuexiang, who also heads the Central Science and Technology Commission, addressed the work conference on Monday, according to CCTV. It was the first such conference since the ruling Communist Party set up the commission less than two years ago.

Ding’s presence also made it a more high-profile event, as earlier editions had usually been chaired by the science minister, with the last one held in December 2022.

The vice-premier is a member of the Politburo Standing Committee, the party’s centre of power. Monday’s meeting was also Ding’s first time chairing such a policy meeting on science in his new capacity as commission chief.

Ding was revealed to be the head only in June, when he addressed leading scientists at a conference in Beijing.

The commission was set up in March 2023 as part of a sweeping overhaul of government and party organs, with a focus on expanding the party’s direct control over policy priorities. However, there had been little information on its members.

Monday’s meeting, which was co-chaired by science minister Yin Hejun, offered some insight into the key officials and government departments involved in taking forward hi-tech development as China battles a containment drive by the United States and its allies.

Unlike other newly established party organs, neither the creation of the commission nor its first meeting were made public at the time. Its existence came to light only after the science ministry briefly mentioned it on its website in July 2023, several months after the publicised overhaul.

However, no details were offered on who headed the commission or attended its first meeting. Some observers suggested that the secrecy surrounding the body might be a sign of Beijing’s concerns about policy pressure from Washington as tensions grow.

Top officials seated in the front row at Monday’s meeting included the minister of finance, Lan Foan, education vice-minister Wu Yan and National Health Commission deputy director Zeng Yixin, according to CCTV footage.

Alongside them was Xiang Libin, vice-chairman of the National Development and Reform Commission, China’s top economic planning body, as well as the presidents of the Chinese Academy of Sciences, and the Chinese Academy of Engineering – the country’s premier science institutes.

The vice-mayors of Beijing and Tianjin municipalities, and the vice-governors of Hebei, Hubei and Hunan provinces were also among the attendees, as was Wang Song, deputy director of the Cyberspace Administration of China, the top internet watchdog.

Gao Bo, an official with the Central Commission for Discipline Inspection, China’s top anti-corruption agency, was also in the front row.

Other attendees included the deputy director of China’s state assets supervisor, and the deputy governor of the People’s Bank of China, as well as the vice-chairman of the All-China Federation of Industry and Commerce, the semi-official chamber leading private business.

Also in attendance were Yang Weizhong, a rear admiral of the PLA Navy, and an official from the Central Commission for Military-Civil Fusion Development. The party-led commission aims to merge the technological strengths of the People’s Liberation Army with those of the private sector.

Xie Maosong, a senior fellow at the Taihe Institute in Beijing, said the meeting showed the new commission had become “more mature” in its operations, “breaking the barriers” as it boosts collaboration across various levels of government departments and sectors.

“The commission is responsible for overall strategic planning, including [setting up] national laboratories, long-term scientific and technological plans, and major projects,” said Xie, who is also a senior researcher at Tsinghua University’s National Institute of Strategic Studies.

The presence of vice-mayors and the vice-governor of Beijing, Tianjin and Hebei represented aims of coordinated development for the cluster, he noted.

China plans to develop the Beijing-Tianjin-Hebei region into an integrated megalopolis, and a new innovation centre for northern China.

Xie said the involvement of different ministries and agencies suggested their respective roles behind the country’s hi-tech drive – such as the education ministry’s need to nurture scientific talent.

The finance ministry, on the other hand, handles national fund allocations to support long-term science and technology plans and national laboratories.

The presence of a PLA officer also highlighted the importance of military technology and Beijing’s push for “military-civilian fusion”, Xie said. He cited “the high level integration in the US, where many large tech companies are also involved in military projects”.

China has pushed for more military-civilian integration, including the development of dual-use technologies, to modernise its armed forces in the face of growing geopolitical challenges and its intensifying trade and tech rivalry with the US.

China’s Himalayan mega dam deepens India’s water worries

https://www.scmp.com/week-asia/economics/article/3295257/chinas-himalayan-mega-dam-deepens-indias-water-worries?utm_source=rss_feed

High on the Tibetan Plateau, the Yarlung Tsangpo River roars through the world’s deepest canyon, plunging nearly 8,000 metres (26,250ft) before crossing into India as the Brahmaputra.

For centuries, this river has been a lifeline for the millions living downstream. But now, a US$137 billion hydropower project – the largest of its kind ever attempted – threatens to turn its waters into a new front in the rivalry between China and India.

Approved last month by Beijing, the project is poised to dwarf the massive Three Gorges Dam in scale, generating three times as much power. But this engineering marvel also represents a new, more insidious battleground: water.

Analysts warn that while the project may not provoke immediate conflict, it lays the groundwork for a contentious new chapter in a relationship already defined by mistrust, border clashes and competing regional ambitions.

“The real challenge for New Delhi and Beijing lies in preventing this issue from becoming another flashpoint in the relationship,” said Shibani Mehta, a senior research analyst with the Carnegie India think tank’s security studies programme.

But border tensions are the bigger issue colouring every other aspect of ties, according to Srikanth Kondapalli, a professor of China studies at India’s Jawaharlal Nehru University and dean of its School of International Studies. “No progress on de-escalation in the border areas means no improvement in bilateral relations,” he told This Week in Asia.

Beijing’s planned dam on the Yarlung Tsangpo, first announced in 2020, is a marvel of ambition. The 1 trillion-yuan (US$137-billion) project aims to harness the river’s immense hydropower potential as it descends from the Tibetan Plateau, generating more than 300 billion kilowatt-hours of electricity annually, according to Chinese estimates – enough to power 300 million homes. But its sheer scale is matched only by the anxieties it has unleashed downstream.

For India, which depends on the Brahmaputra for agriculture, hydropower and drinking water, the dam represents a stark reminder of its downstream vulnerability. Without a water-sharing treaty between the two nations, India fears that Beijing could one day weaponise its control of the river in times of conflict.

“China is the upper riparian nation, and it is definitely exploiting that position in this case,” said Gunjan Singh, an associate professor at O.P. Jindal Global University specialising in China-South Asia relations. She pointed to Beijing’s reluctance to share hydrological data, a long-standing frustration for Delhi that has already caused disruptions in flood management and agriculture.

The dam project also raises older concerns that China will, “at worst, use water as a tool in its relations with Delhi, and, at best, disregard Indian interests in the management of Himalayan rivers”, according to Ivan Lidarev, a security analyst specialising in the international relations of India and China.

“India’s position of weakness on this issue is yet another reason [for concern],” he added. “While India resents Chinese dam building, it can do very little to stop it because China, as the upstream country, holds all the cards.”

The announcement of the dam came at a delicate moment. Just months earlier, India and China had reached a rare agreement to disengage troops along their disputed Himalayan border, a move aimed at easing ratcheted-up tensions stemming from deadly clashes that erupted in 2020. But Beijing’s approval of the dam, along with the creation of two new counties in the disputed Aksai Chin region, has reignited concerns that China is doubling down on its aggressive posture.

“Both of these events do not go hand in hand,” Kondapalli said. “The ball is in Beijing’s hands to improve bilateral relations.”

The dam is the latest reminder of the deep mistrust that defines Sino-Indian relations. The two nations share a 3,488km (2,167-mile) border, much of it disputed, and the scars of their 1962 Sino-Indian war still run deep. In 2020, tensions boiled over once again in the Galwan Valley of Ladakh, where brutal hand-to-hand combat left at least 20 Indian and four Chinese soldiers dead – the first such fatalities at the border in nearly 60 years.

Since then, both sides have deployed tens of thousands of troops and heavy weaponry to the high-altitude region, even as they have sought to avoid further clashes and stabilise ties through rounds of painstaking negotiations and a moratorium on patrols. Yet progress has been slow, and new irritants – like the megadam – threaten to unravel fragile gains.

“The water issue is important but not ‘sharp’ enough to produce conflict between the two sides in the foreseeable future,” Lidarev said. Compared to the border dispute, he explained, the dam is a “less imminent, less contentious, and, surprisingly, less domestically sensitive” issue for both Beijing and Delhi.

But it could “breed resentment, which might push Delhi to link the water issue with issues of Chinese concern in order to gain some leverage on Beijing”, he said.

“The most important negative effect on India of Chinese upstream activities has been flooding, a very serious issue but hardly a potential cause for armed conflict.”

A dam on the Yarlung Tsangpo, which winds through the tectonically volatile Himalayas, raises other environmental and humanitarian risks. A recent 6.8-magnitude earthquake in Tibet has heightened fears in India that a large-scale natural disaster could trigger devastating floods or landslides downstream if a Chinese dam was badly damaged or destroyed.

“The risk of earthquakes is always there, which may bring a huge humanitarian crisis,” warned Rajeev Ranjan Chaturvedy, an associate professor of international studies at Nalanda University in India, adding that the Himalayan region’s fragile ecosystem makes such projects particularly dangerous.

China’s dam-building spree on transboundary rivers – four have already been completed upstream of the proposed Yarlung Tsangpo project – has long been a source of tension with its neighbours, including Bhutan and Bangladesh.

But India itself has also built two dams on the Brahmaputra, with more in the planning stages.

“This tells us that neither country is worried about the environmental consequences or the dislocation of populations, which are actually serious problems,” said Rafiq Dossani, an economist and Asia-Pacific analyst with the US-based Rand Corporation think tank, adding that “there is scope for coordination to make sure that water releases are managed to ensure that there is no flooding due to the dam’s activities.”

India and China share several transboundary rivers, not just the Yarlung Tsangpo/Brahmaputra. But the lack of a comprehensive water-sharing agreement has deepened insecurities on the Indian side of the border due to Chinese control of dams upstream.

“India will continue to distrust China given the history of repeated border conflicts and incursions”, Singh said, making the conclusion of a water-sharing treaty “difficult”.

Carnegie India’s Mehta suggested that a “dedicated water management dialogue” – separate from border and other bilateral talks – would be useful to avoid exacerbating tensions and mitigate the dam project’s potential impact on the millions living downstream.

“Additionally, India’s growing ties with the US and Quad partners raise concerns for Beijing, outweighing water management issues as they affect the Indo-Pacific power balance,” she said.

The Quadrilateral Security Dialogue, a four-way security alliance that comprises India, the United States, Australia and Japan, has been revived in recent years to expand strategic ties and counter China’s growing influence.

“Rather than seeing the dam construction issue as more or less important than others, one should recognise that India’s level of suspicion about China’s construction plans will be affected by how Beijing manages the totality of the relationship,” said Daniel S. Markey, South Asia senior adviser at the US Institute of Peace.

But while the dam has drawn attention, it has yet to provoke a strong official response from Delhi. Analysts suggest this reflects a calculated effort to avoid derailing the fragile detente between the two nations.

“It is unlikely that the two sides will allow the dam, an important issue but not a crucial one, to upset the thaw, destabilise the border situation, and halt progress towards a much-needed improvement of relations,” said Lidarev, comparing the Indian government’s “relatively restrained response” to the dam with what he described as “the great agitation” surrounding the issue in the country’s media.

Yet the long-term implications are harder to ignore. As climate change exacerbates water scarcity across Asia, the strategic importance of rivers like the Yarlung Tsangpo is only set to grow. For India, the challenge lies in countering China’s growing leverage as the upstream power.

“India will need to find smart, cost-effective ways to resist or mitigate Chinese plans, including dam construction, that could threaten Indian interests,” Markey said. He suggested greater cooperation with partners like the US and Japan to pressure Beijing into greater transparency and coordination on water management.

Despite the risks, analysts caution against overhyping the dam’s immediate impact on ties. “Water might not make it to the top spot of contentious China-India issues, but it will certainly rank high on their list,” Lidarev said.

For now, the border dispute remains the sharpest point of friction. A growing trade imbalance – India’s trade deficit with China hit US$85.1 billion last financial year – is another point of concern for Delhi, just as India deepening its strategic ties with the US and other partners is a worry for Beijing.

“The spiral of insecurity could be very dangerous for all,” Markey warned. “The more threatening China is on other issues, like trade or border patrolling, the more India will fear that China plans to use its dams for aggressive geopolitical purposes.”

Ultimately, the dam serves as a microcosm of the broader challenges facing Asia’s two largest nations. Whether it serves as a tool for cooperation or yet another weapon in their rivalry will depend on how both sides choose to navigate the treacherous waters of their shared future.

How Japan plans to stop China ‘stealing the limelight’ at Trump’s inauguration

https://www.scmp.com/week-asia/politics/article/3295255/how-japan-plans-stop-china-stealing-limelight-trumps-inauguration?utm_source=rss_feed

In a gesture heavy with symbolism, strategy and no small measure of urgency, Japan is dispatching its foreign minister to attend US president-elect Donald Trump’s inauguration on Monday.

It is a shrewd move, analysts say, aimed at safeguarding the bedrock of Tokyo’s foreign policy: its alliance with Washington. But there is another unspoken motive driving Tokyo’s bold diplomacy – ensuring China does not steal the show.

“We aim to build a relationship of trust with the Trump administration,” Takeshi Iwaya said last Sunday, confirming his plans to attend the ceremony. His visit, the first to the United States since taking office in October, could set the stage for Prime Minister Shigeru Ishiba’s own summit with Trump as early as February, Japanese newspaper Yomiuri Shimbun reported.

The decision makers in Tokyo’s corridors of power feel China has “received all the attention from the US” in recent years, according to Stephen Nagy, a professor of politics and international studies at the International Christian University in Tokyo. “And they do not want this to happen again … They feel it’s better to be at the Trump table.”

By sending its top diplomat, the Japanese government is trying to ensure that China’s representative at the event, Vice-President Han Zheng, “does not steal all the limelight”, according to Nagy.

The decision to send Iwaya to Washington – breaking tradition that typically relegates such events to ambassadors – reflects Tokyo’s deep anxieties about the unpredictability of the incoming Trump administration.

Nagy said Japan was wary of Trump adopting “unorthodox positions” on key issues affecting Tokyo without consulting its leadership. By making an early, high-profile appearance on the US stage, Japan hopes to amplify its voice in the administration’s nascent foreign-policy calculations.

Kazuto Suzuki, a professor of international political economy at the University of Tokyo, called Iwaya’s attendance “unprecedented”, explaining that it was strategically timed to counter Beijing’s presence.

“The decision to attend the inauguration ceremony by the foreign minister was made knowing that Xi Jinping will not attend,” Suzuki said. Trump had invited the Chinese president to his inauguration, but China’s Ministry of Foreign Affairs announced on Friday that Vice-President Han would be present instead.

Australia and India have also said they will send their foreign ministers to the event.

Iwaya’s US trip goes beyond mere symbolism. It is part of a broader diplomatic push by Japan to shore up its influence in the region amid shifting geopolitical sands.

Last weekend, Prime Minister Ishiba visited Malaysia and Indonesia to deepen bilateral ties. In Malaysia, Ishiba and Prime Minister Anwar Ibrahim agreed to co-develop green energy projects such as carbon capture, while in Jakarta, Ishiba pledged to provide high-speed patrol boats to bolster Indonesia’s maritime security.

Ishiba is also pushing for a visit to Beijing, saying at least twice since taking power that such Japan-China diplomacy is “extremely important”.

Meanwhile, Iwaya made a surprise visit to Seoul on Monday, meeting his South Korean counterpart Cho Tae-yul. The visit raised eyebrows, occurring against the backdrop of South Korea’s political turmoil, with impeached President Yoon Suk-yeol being detained by anti-corruption investigators later in the week over insurrection charges related to his short-lived declaration of martial law last month.

Despite the chaos, Iwaya and Cho discussed ways to strengthen relations and stressed the importance of trilateral cooperation with the US, particularly in the face of North Korean provocations and influence operations.

“There is some expectation that Iwaya’s visit may contribute to supporting President Yoon,” Suzuki said.

Political scientist Yoichiro Sato said that South Korea’s domestic troubles had “cast a shadow” over its ability to fully engage in trilateral security efforts. But Iwaya’s visit could help Tokyo and Seoul align their foreign policies.

The Japanese foreign minister’s visits earlier this week to the Philippines and Palau – key US allies in the Western Pacific – highlighted Japan’s holistic approach to countering China’s regional ambitions, said Sato, a professor of Asia-Pacific studies at Ritsumeikan Asia-Pacific University in Japan.

“[They] are most relevant to a possible contingency over Taiwan,” he said.

Palau has emerged as a focal point of Washington’s efforts to counter Beijing’s influence in the Pacific, with the US pledging funds to provide more funds for the tiny island nation’s infrastructure, education and healthcare systems in March last year.

“Japan will likely play a significant supplementary role in developing Palau’s dual-use infrastructure, which contributes to both economic development and security,” said Sato, citing the ongoing “trilateralisation” of defence cooperation among Tokyo, Washington and Manila.

The Quadrilateral Security Dialogue – or Quad – comprising Japan, the US, Australia and India, is expected to convene a foreign ministers’ meeting in Washington after Trump’s inauguration.

This gathering is likely to reaffirm the bloc’s commitment to regional stability, while offering a glimpse into Trump’s foreign policy priorities, analysts say.

The scheduling of the Quad meeting soon after the inauguration “bodes well for continuity”, Nagy said, adding that it also signalled Washington’s commitment to the Asia-Pacific and “makes Trump look good to close allies”.

“I expect the meeting to reaffirm its raison d’être of bringing peace and stability to the Indo-Pacific through the provision of public goods including stabilising the maritime security environment that global trade depends on,” he added.

The Quad, which announced plans last September to deepen maritime cooperation and launch joint coastguard operations, offers a platform for Japan to drive its agenda.

“It is likely that the new Trump team will come in with a new policy framework,” Sato said. This is expected to differ “significantly” from outgoing President Joe Biden’s foreign policy platform, but also lack “substantial details”.

Until then, Japan is working to ensure its interests are front and centre as the new Trump administration takes the reins.