• Why land and property remain at the core of China’s economic transition
• US Secretary of State Marco Rubio hints at possible meeting with Chinese Foreign Minister Wang Yi
• China’s cloud services spending hits US$11.6 billion in first quarter on AI-related demand
• Fifth-generation fighters make cameo appearance as China unveils production facilities
• Chinese business owners already in US see American dream become a reality of hardship
• Chinese University of Hong Kong vice-president ‘resigns’ after less than a year
• China likely to up support for Iran, scientists create cyborg bee: SCMP daily highlights
• China phone crooks use AI-cloning for scam, make crank calls to get real voice for copying
• EU boosts China de-risking efforts with plans to regain control of key sectors
• DeepSeek, Unitree Robotics host head of China’s state-owned firm regulator on Zhejiang tour
• China blasts ‘immoral’ US trade practices, courts Asean on free trade unity, stability
• China likely to strengthen backing for Iran as it looks to secure strategic interests
• Chinese fans storm business-class cabin on taxiing plane to meet actor
• Asean calls for ‘wisdom and prudence’ in South China Sea
• Chinese scientists create first cyborg bee with world’s lightest brain controller
• Svelteness in China is a US$150 billion market, with dozens of drug producers vying for it
• Why China’s yuan can be safe-haven currency – former bank official flags its ‘advantages’
• China’s rare earth export curbs spark EU concerns ahead of Beijing summit
• China’s military mouthpiece warns of ‘moral pitfalls’ of humanoid fighters
• Chinese nationals in Africa ‘vulnerable to kidnappings’ as cases rise
• China offers one-off subsidy to those hiring unemployed young people
• ‘Missing’ Chinese man walks for six days in the mountains to forget ex, triggers huge search
• Can catlike US tariffs chase China’s manufacturing mouse out of the Asean maze?
• Chinese and Pakistani air chiefs seek military synergy on training and tech fronts
• Head of US House panel urges schools to reconsider ‘nefarious’ Chinese scholarship programme
• Can China’s fastest-growing firms save themselves from themselves?

Why land and property remain at the core of China’s economic transition

https://www.scmp.com/opinion/china-opinion/article/3317446/why-land-and-property-remain-core-chinas-economic-transition?utm_source=rss_feed

Amid a prolonged economic transition, China’s growth engine is shedding its old gears. The heyday of real estate expansion is over. Urban home prices have lost their relentless upwards march and local governments, once flush with land revenues, are confronting fiscal strain.

It is tempting to declare this the end of the land finance era, a long-anticipated turning point that will force Beijing to adopt a more sustainable fiscal model.

Yet such a conclusion would be premature. For all the structural reform rhetoric and policy experimentation, the uncomfortable truth is this: land finance and property-driven growth remain the quiet scaffolding of China’s economic system. Their dominance is diminished but their function remains indispensable.

This is not due to a lack of reform ambition. Beijing has signalled its desire to shift towards a new growth model centred on industrial upgrading, consumption and social welfare. To steer the property sector away from speculation, the authorities have introduced policies promoting affordable housing, more efficient land allocation and property tax pilot programmes. Meanwhile, scholars and officials alike have repeatedly warned of the risks tied to local government debt and land finance.

Yet none of these efforts has offered a viable replacement for the entrenched reliance on land and property to anchor local economic development.

At the heart of the issue lies a structural legacy. While its share of government revenue has declined significantly in recent years, the economic reach of the land and construction ecosystem remains vast. The construction sector alone employs over 50 million people, many of them rural migrant workers with few alternatives.

Add to that the upstream and downstream jobs tied to cement, steel, real estate marketing, interior decoration and home furnishings, and it becomes clear: land development is not just a budgetary tool but a labour-intensive engine woven into the fabric of China’s economy.

Policymakers are adjusting course. Instead of mega-residential projects, the focus is being cautiously redirected towards “new-type infrastructure” – projects linked to green and low-carbon development, next-generation technologies, environmental conservation and urban renewal initiatives. Some provinces tightened oversight on land auctions and imposed stricter price caps, while others promoted mechanisms that tie land allocation to industrial investment.

To prevent a total collapse of the land market, state-owned enterprises and financing vehicles have stepped in to absorb land parcels that failed to attract bids from private developers. This has helped stabilise the market – but also compounded the interdependence between municipal finances, state-backed credit and the real-estate value chain.

But the financial alternatives meant to replace land-based revenue remain underdeveloped. Property tax – once seen as a key reform to rein in speculation and ensure stable tax income – has been indefinitely shelved. Efforts to let cities levy their own consumption or income taxes face legal and administrative barriers. Innovative instruments like real estate investment trusts (Reits) and asset-backed securities are expanding slowly but lack meaningful scale.

The result is a system caught between reform and inertia. On paper, China is marching towards a healthier fiscal structure. In practice, local governments rely on old playbooks to maintain solvency and deliver growth. Local government financing and refinancing often flow through local SOEs, whose borrowing, while technically off-book, continues to rest on implicit government backing. This creates the appearance of progress while preserving debt-fuelled investment.

It would also be a mistake to treat the housing market as uniformly depressed. While second-hand housing turnover has weakened and speculative demand has cooled, structural divergence is defining the sector. Prices in the core districts of Beijing, Shanghai and Shenzhen remain relatively resilient, buoyed by population inflows and education-related demand.

Even in second-tier cities like Hangzhou or Chengdu, plots with favourable prospects continue to attract interest. This is not the death of the housing market but a move from blanket speculation that reflects the changing demographics.

Yet these transitions are not without cost. The property sector’s contraction has left a void in gross domestic product and local revenue that the authorities are struggling to fill. And while Beijing has tightened scrutiny on hidden local debt, it has yet to clearly articulate how responsibility for liabilities will be allocated.

This ambiguity may delay defaults in the short term but also perpetuates the moral hazard reformers want to eliminate. As long as local officials are judged by their ability to deliver growth and manage stability, they will continue to exploit whatever fiscal levers remain – land, credit or both.

Meanwhile, more families are opting out of home ownership, turning instead to long-term rental, investing in education or prioritising small business ventures. These decisions, while individually modest, signal a recalibration of expectations. If property is no longer seen as a safe bet, and if mobility and flexibility are more valued than fixed assets, then the social consensus underpinning China’s real estate economy is shifting.

Recent policies suggest a growing recognition among China’s leaders that the land-and debt-driven growth model is no longer sustainable. But meaningful reform requires more than new tools; it demands difficult shifts in how resources are allocated, risk is shared between central and local governments, and public expectations are managed.

China is not undergoing a clean break with the past but navigating a transition: the old system persists not because it works, but because no fully functional alternative exists.

Reform is likely to be gradual and piecemeal. Rather than replacing land finance with a single breakthrough, Beijing will rely on a patchwork of evolving instruments – fiscal, financial and institutional. Meantime, land and property will remain in use – not as growth engines but as ballast – helping to steady the economy while new foundations are laid.

US Secretary of State Marco Rubio hints at possible meeting with Chinese Foreign Minister Wang Yi

https://www.scmp.com/news/china/diplomacy/article/3317771/us-secretary-state-rubio-hints-possible-meeting-chinese-fm-wang-yi?utm_source=rss_feed

US Secretary of State Marco Rubio said Thursday that he was working on a possible sit-down in coming days with China’s foreign minister, Wang Yi, on the sidelines of an Asean meeting in Malaysia amid a contentious trade dispute.

If realised, the meeting on the periphery of the Association of Southeast Asian Nations conclave would be the first time the two top diplomats will have met in person since Rubio assumed his position in January.

Rubio, who also holds the post of national security adviser, added Thursday that the US could appeal for Beijing’s help as Washington tries to get Moscow to end hostilities in the Ukraine war.

“I think we’re working on that,” Rubio told reporters. “Maybe we’ll meet, and obviously we’ll talk about it. I think the Chinese clearly have been supportive of the Russian effort, and I think that generally they’ve been willing to help them as much as they can without getting caught.”

Rubio, known for his hawkish stance on China, has been sanctioned twice by Beijing, making him the first sitting secretary of state to face such measures.

While the sanctions have hindered ministerial-level exchanges with China, a meeting in Kuala Lumpur would offer a crucial opportunity at a neutral, third-party venue for the two diplomats to engage and prepare for US President Donald Trump’s potential next visit to Beijing.

However, Trump’s stance on Taiwan would be critical to the success of such a summit between the two superpower leaders, scholars noted.

In January, Rubio held the first official phone call with Wang, which, according to China’s foreign ministry, offered assurances that Washington does not back Taiwan independence.

That detail did not appear in the US read-out, where Rubio “stressed the United States’ commitment to our allies in the region and serious concern over China’s coercive actions against Taiwan and in the South China Sea.”

Beijing sees Taiwan as part of China, to be reunited by force if necessary.

Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons, as authorised by the Taiwan Relations Act.

Rubio is visiting Malaysia for a five-day trip, which aims at “reaffirming the United States’ commitment to advancing a free, open and secure Indo-Pacific region”, according to a Monday press release.

The teased meeting comes as China’s military and economic footprint in the region continues to expand even as the America-first Trump administration alienates allies and partners with its aggressive tariff and trade surplus policies.

Analysts said Rubio’s hardline stance toward China makes a meeting far from assured, including his outspoken views on Taiwan, Hong Kong and other issues.

“If this goes off, it would indicate that China is not letting its individual sanctions against Rubio or very hawkish policies on student visas or human rights stand in the way,” said Jeremy Chan, a senior analyst at Eurasia Group.

“And for Rubio, it will show that he is willing to work through Wang after Trump’s team insisted on only engaging with someone on the Politburo Standing Committee.”

Analysts added that were it to come about, it would also be a bullish sign of a Trump-Xi summit, possibly as early as September but more likely around an Asia Pacific Economic Cooperation summit starting in late October in South Korea.

“Bigger picture, any such Wang-Rubio meeting would reinforce the recent stabilization in US-China relations and increase the odds of a more substantial deal on tariffs, fentanyl, and other issues later this year,” added Chan, a former US diplomat in the US Consulate in Shenyang.

Rubio is scheduled to participate in a gathering of Asean foreign ministers on Friday.

China’s cloud services spending hits US$11.6 billion in first quarter on AI-related demand

https://www.scmp.com/tech/big-tech/article/3317760/chinas-cloud-services-spending-hits-us116-billion-first-quarter-ai-related-demand?utm_source=rss_feed

Cloud infrastructure services spending in China reached US$11.6 billion in the first quarter, up 16 per cent from a year earlier, as adoption accelerated on the back of mainland enterprises’ growing artificial intelligence (AI) activities, according to research firm Canalys.

Alibaba Group Holding’s cloud computing unit continued to lead the industry in the March quarter, with a commanding 33 per cent market share and a 15 per cent year-on-year revenue growth, Canalys data showed. Hangzhou-based Alibaba owns the South China Morning Post.

Second-ranked Huawei Technologies’ cloud business expanded its market share to 18 per cent, while posting an 18 per cent revenue increase in the same period.

Tencent Holdings’ cloud unit, meanwhile, held a 10 per cent share, but recorded limited revenue growth in the quarter owing to graphics processing unit (GPU) supply constraints and prioritised use of these AI chips for the firm’s internal operations.

These results reflect the robust domestic demand for cloud infrastructure amid a surge in AI-related activities this year, even as service providers contend with US export restrictions that limit China’s access to advanced chips used in data centres.

“Leading cloud providers are actively exploring pathways for AI adoption, unlocking capabilities and building ecosystems through model open-sourcing, while accelerating task execution and scenario delivery via AI agent platforms,” Canalys senior analyst Yi Zhang said in a report on Thursday.

Cloud computing services enable companies to develop, buy, sell, lease or distribute a range of software and other digital resources as on-demand solutions over the internet, just like electricity from a power grid. These resources are managed inside data centres.

In the first quarter, partner-driven cloud revenue accounted for 25 per cent of the mainland market, according to Canalys. It added that “this share is expected to grow as ecosystem collaboration becomes a key enabler for turning AI capabilities into business value”.

As enterprises accelerate their AI deployments, the market potential of mainland China’s cloud services sector is being steadily unlocked, according to the Canalys report. It pointed out that “substantial computational demands of foundation models” are driving a marked increase in enterprises’ dependence on cloud-based GPU resources.

“AI is accelerating cloud adoption across the board,” said Rachel Brindley, a senior director at Canalys, adding that “organisations that previously relied on on-premises data centres were now migrating to the cloud to support AI workloads”.

China’s cloud services spending, which totalled US$40 billion in 2024, is expected to reach US$46 billion this year, as the three leading service providers have all announced plans to expand their infrastructure investments.

Alibaba CEO Eddie Wu Yongming, for example, has doubled down on the company’s plan to create a “unified global cloud network”, months after drawing up a three-year 380 billion yuan (US$52 billion) investment programme for computing resources and AI infrastructure in China.

In addition, China’s three state-backed telecommunications network operators – China Mobile, China Unicom and China Telecom – have also pledged increased cloud infrastructure investments to serve their enterprise customers.

Fifth-generation fighters make cameo appearance as China unveils production facilities

https://www.scmp.com/news/china/military/article/3317744/fifth-generation-fighters-make-cameo-appearance-china-unveils-production-facilities?utm_source=rss_feed

For the first time, China has unveiled the production facilities of its fifth-generation fighters and hinted at its readiness for the aircraft to be catapult-launched on carriers.

At least two J-35 fighter jets were spotted in a hangar of its developer, Shenyang Aircraft Corporation, during an exclusive interview with Chinese state broadcaster CCTV on Tuesday.

The stealth aircraft – covered in green paint – were in the background as the TV anchor introduced the J-15T, a 4.5-generation multirole fighter that is suited for catapult launch.

Li Guoen, a test pilot for J-15 fighters of the People’s Liberation Army (PLA), said the J-15T had been upgraded from the J-15 with thicker struts, a catapult tow bar and dual-wheel landing gear.

The efficiency of energy absorption of the front landing gear remained a major technical challenge, he said in the interview.

“You can see that the landing gear is very thick … we hope to make this structure slimmer and lighter in the future as that would give the aircraft better control.”

The news package did not mention the J-35, but its shipborne version, as well as the naval fighter J-15T, are expected to be deployed on China’s third aircraft carrier.

The Type 003 carrier Fujian – equipped with advanced electromagnetic catapults to allow more efficient and frequent take-offs than the conventional ski jump – is undergoing sea trials and is expected to be commissioned by the end of this year.

Song Zhongping, a military commentator and a former PLA instructor, said the J-35 fighters in the hangar were likely to be carrier-based versions painted with a corrosion-resistant coating, a layer required before brushing on the livery or aircraft colours.

He said it was the first time that production facilities for the J-35 had been shown publicly and that it was an indication that the aircraft was undergoing mass production.

The shipborne J-15T and the land-based version of J-35 debuted in the biennial Zhuhai Airshow in November. The J-15T was engaged in its first public display during the visit to Hong Kong last week of the Shandong, China’s first home-made aircraft carrier.

In recent years, China has rapidly modernised its naval fleet and has accelerated the speed of its fighter upgrades over the past decade, overtaking the United States in sixth-generation military aircraft development.

In a separate interview with CCTV on Tuesday, chief J-15 designer Sun Cong said China’s aircraft carriers were now “equipped with basic elements required” to make the PLA a “deep blue-water” navy.

“The fighters are being made like mobile phones as the functions are now software-based, so the systems and software could be designed separately [to boost efficiency],” he said.

The major Shenyang-based fighter manufacturer is expanding its production facilities, as shown in a visit by provincial governor Wang Xinwei, also on Tuesday.

Clips by Liaoning Television during his visit to Shenyang Aircraft Corporation showed vast construction sites without further explanation. The regional company is a subsidiary of the state-owned aerospace and defence giant Aviation Industry Corporation of China.

According to a company notice in August 2023, Shenyang Aircraft Corporation aimed to invest 8.6 billion yuan to build a new production site 4.2 sq km in area over five years but did not specify a deadline.

Chinese business owners already in US see American dream become a reality of hardship

https://www.scmp.com/economy/global-economy/article/3317709/chinese-business-owners-already-us-see-american-dream-become-reality-hardship?utm_source=rss_feed

As the US wields tariffs in a bid to lure manufacturers back home, an erratic trade policy, a controversial immigration crackdown and weakening consumer demand have taken the shine off the American dream for some Chinese investors already stateside.

On Monday, President Donald Trump postponed the roll-out of a new round of his so-called reciprocal tariffs – originally slated for July 9 – pushing the effective date to August 1. His latest measures include tariffs of up to 40 per cent on imports from 14 countries – several of which are China’s close trading partners, including Japan, South Korea, Laos and Kazakhstan.

Since his first term, Trump has positioned tariffs as a key instrument to rebuild American industry, boost blue-collar employment, and close the trade deficit. But that strategy is straining investors such as Peter Wang, who opened a mobile-phone-repair factory in Dallas, Texas, in 2002.

“Trump’s tariffs have definitely brought more American customers our way – but they still expect the speed and low costs of Asian factories, and that’s just not realistic in the US,” said Wang, whose facility employs more than 200 workers and is currently breaking even.

“When American clients want to try new products, Chinese factories can pivot fast – they’re flexible, hands-on, and ready to make it work,” he said. “In the US, a whole production line can stall just because the system isn’t set up right.”

“The US customs and fiscal systems offer no effective solutions. If I have to bear such high costs, why would I want to move manufacturing to the US,” he said, noting that he is still sourcing raw materials from Asia at an increased cost. “Trump wants to bring manufacturing back, but his advisers don’t seem to understand how the supply chain actually works.”

Trump has made reshoring manufacturing the centrepiece of his economic playbook since his first term, and this year’s global tariff push has added fuel to that agenda.

However, not everyone sees it as a total setback, pointing to the greater opportunities they see for local downstream suppliers.

“Raw materials from Asia are getting pricey, so more local businesses are turning to domestic sourcing – and that’s actually providing a boost to a lot of smaller, downstream American suppliers,” Wang said.

According to the US Bureau of Economic Analysis, manufacturing added US$2.9 trillion to the economy in the first quarter of 2025, a 0.6 per cent increase from the same period a year earlier, making it an important contributor to the economy following finance, business services and government.

US manufacturing activity showed signs of recovery last month, with the Institute for Supply Management’s Purchasing Managers’ Index rising to 49.0 in June from 48.5 in May.

Evan Gu, a mattress manufacturer, relocated his small factory from Guangdong province to the San Francisco Bay Area in 2018 to avoid tariffs introduced during Trump’s first term. He invested US$200,000, and the move took just two months.

While current tariffs have not disrupted Gu’s supply chain, nor his workforce of 12, he sees a different kind of pressure building.

“Based on what I’ve heard from my customers and those around me, many [of them say their] purchasing power has dropped by 30 to 40 per cent, and it feels like no one dares to spend money any more, as they’ve been paying much higher prices under the tariff hike,” Gu said.

Mr Zheng, a Chinese investor who built an auto parts plant in Texas in 2023, thought he was playing by the rules – doing exactly what the US wanted by reshoring production. But even that has not spared him from mounting pressure.

“When Trump first announced the 25 per cent tariff in 2019, we considered moving out of the Yangtze River Delta, but the pandemic delayed our plans,” he said, speaking on condition of anonymity. “Then, in 2024, shortly after the factory was completed, Biden announced another round of tariffs.”

And now, the immigration policies during Trump’s second term have further complicated operations, Zheng said.

“Mexicans work very hard and are paid far below the local minimum wage,” he said. “And now, they have to worry about … the massive deportation wave.

“Sure, Trump delivered on corporate tax cuts – but his policies swing so wildly. We spend two weeks training someone, and just when they’re ready to work, immigration swoops in and deports them. How are we supposed to plan for anything long-term like that?”

The US Bureau of Labour Statistics reported in May that there were around 414,000 manufacturing job openings, up slightly from 392,000 in April, due to ongoing labour shortages across the industrial sector.

Evan Hu, a factory builder in Texas, said business was booming – but now it isn’t. Since last year, he has been fielding inquiries from Chinese firms in sectors such as semiconductors, electric vehicles and solar power, eager to break ground in the state.

Four factories are already up and running under his watch, and three more are in the works. But he said mounting policy headwinds are starting to cool the momentum.

“Last year, Chinese investors were lining up to ask about building factories,” Hu said. “But ever since Texas passed that land-restriction law [last month], interest dropped off a cliff in the second quarter.”

The bill was signed into law on June 20, imposing sweeping restrictions on property ownership by citizens and entities from designated countries, including China, Iran, North Korea and Russia. The law takes effect on September 1 and effectively bars Chinese investors from acquiring land or long-term facilities in the state.

“The state is hoping that locals will step up and build factories,” Hu said. “But most Americans just aren’t biting – factories cost a fortune here, and they’re not eager to take on that kind of risk.”

---

Chinese University of Hong Kong vice-president ‘resigns’ after less than a year

https://www.scmp.com/news/hong-kong/education/article/3317757/chinese-university-hong-kong-vice-president-resigns-after-less-year?utm_source=rss_feed

Kenneth Chen Wei-on has resigned as vice-president of the Chinese University of Hong Kong (CUHK), less than a year after his appointment, the Post has learned.

Chen was appointed to a three-year term from September last year, replacing Eric Ng Shu-pui who was abruptly dismissed after signing a petition opposing a Legislative Council bill to reduce the size of the university’s council.

Two insiders at CUHK told the Post about Chen’s resignation and said he would leave his role in September. The Post approached the university and Chen.

Chen’s responsibilities included administration and overseeing infrastructure development.

In a statement last year, the university expressed confidence that Chen would help “elevate the university’s international reputation, promote sustainable development and achieve institutional excellence”.

Upon his appointment, Chen said he was confident that he could work closely with members of the university “in the common goal of furthering the development of this renowned educational institution”.

In the QS World University Rankings published in June, the CUHK climbed four spots to 32nd, its best performance ever among the some 1,500 universities.

Chen served as Secretary General at the Legislative Council (LegCo) for over a decade, from 2012 to 2024. Before that, he was the city’s undersecretary for education between 2008 and 2012.

In 2019, he faced calls for his resignation from the opposition camp over accusations that he had exceeded his authority by assisting pro-establishment lawmakers in removing an opposition legislator from his position as chairman of a panel vetting a controversial extradition bill.

Chen has remained active in youth development and community service for years, serving as the president of the Hong Kong Federation of Youth Groups since 2022 and as the chairman of several colleges and secondary schools before 2024.

China likely to up support for Iran, scientists create cyborg bee: SCMP daily highlights

https://www.scmp.com/news/china/article/3317713/china-likely-support-iran-scientists-create-cyborg-bee-scmp-daily-highlights?utm_source=rss_feed

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

Beijing is likely to step up support for Tehran as it tries to secure its strategic interests in the Middle East, analysts say, amid concerns over how the recent Iran-Israel war will reverberate across the resource-rich region.

Chinese exporters like Huang Yongxing are desperate for some straight answers so they can start making and shipping goods from their factories in either China or Southeast Asia.

Chinese-made device can command the movements of bees, making them ideal to help search for survivors in earthquake ruins, scientists say.

The European Union is facing growing calls to act against Beijing’s dominance over rare earth supply chains, highlighting persistent tensions just weeks before the coming EU-China summit.

A race for market share in China’s new-found growth sectors has led to vicious price spirals, eliciting warnings from high-level officials.

Major Chinese cities have reported a surge in purchases of tax-refundable goods by foreign tourists in recent months, as new duty-free rules designed to boost tourism spending begin to pay off.

Award-winning data scientist She Yiyuan has left the United States to take up a full-time position at Westlake University in eastern China’s Zhejiang province.

China phone crooks use AI-cloning for scam, make crank calls to get real voice for copying

https://www.scmp.com/news/people-culture/trending-china/article/3316843/china-phone-crooks-use-ai-cloning-scam-make-crank-calls-get-real-voice-copying?utm_source=rss_feed

Fraudsters in China are using artificial intelligence (AI) to clone people’s voices and scam their relatives and friends.

Police in central China’s Hubei province recently revealed a case in which an elderly woman was tricked by an AI-generated version of her grandson.

The woman, surnamed Liu, told China Central Television that she received the phone call from her grandson’s home landline on April 28.

Liu said he was sobbing and told her he had injured someone’s head in a supermarket. The injured person had been hospitalised and was demanding 20,000 yuan (US$2,800) in compensation.

He said he was in a police station and needed the money to be released.

He also begged her not to tell his mother; otherwise he would “jump from a building”.

Liu said she immediately comforted her grandson, but when she asked him which police station he was at, he suddenly hung up.

She quickly borrowed cash from relatives and friends and waited for him to call her again, as she dared not notify his parents or his school.

Her grandson called her again and told her his classmate’s father would collect money at a place 20 minutes away from her home. The boy said he would call the father’s mobile phone to let her know he was the correct person.

Liu said she picked up the call on the collector’s phone and heard her “grandson” telling her, “Give him the money.”

She thought the case was well settled and did not talk to any other family members about it.

A few days later, when her grandson visited her, she asked him about the case, and it was then that she realised she had been scammed.

She called the police, who discovered that another elderly woman had fallen into the same trap just a few days ago.

After viewing surveillance footage from the street, officers realised that it was the same man who collected money from the two other victims involved in the case.

The man, surnamed Zhang, said he thought he was only working on a profitable part-time job, which paid him 1,000 yuan (US$140) a day.

He received instructions from the scam gang to pick up the money from the victims and deliver it to a location where a gang member would come to collect the money.

Liu told the police that the voice from the phone call sounded exactly like her grandson.

Her grandson said he received many crank calls at her home before the scam. He asked who was calling, but no one ever answered.

The police revealed that it was a new trick played by scammers.

They used AI to clone the voice of the victims from the crank calls and then called their family and friends using the cloned voice.

They also deliberately call landlines that are still in use in some elderly people’s homes to make it difficult for victims to verify the calls.

Many AI apps have a voice cloning feature, which only costs a few dozen yuan to copy each person.

“Shame on these scammers, profiting from elderly people’s love for their grandchildren,” said one online observer.

Another person said he had been using an AI assistant to answer phone calls from strangers to avoid scams: “I am beating magic with magic.”

“The technology is evolving so fast that laws are urgently needed to regulate it,” another said.

EU boosts China de-risking efforts with plans to regain control of key sectors

https://www.scmp.com/news/china/diplomacy/article/3317721/eu-boosts-china-de-risking-efforts-plans-regain-control-key-sectors?utm_source=rss_feed

The European Union has unveiled sweeping plans to slash its reliance on China and reclaim control over critical sectors – from chemicals to pharmaceuticals and biotech – as it steps up its de-risking plans.

On Wednesday the bloc unveiled three separate proposals – an action plan for the chemicals industry, a medical countermeasures strategy and a stockpiling strategy – designed to make it more self-reliant in the face of growing concerns about the weaponisation of crucial supply chains.

Unlike the other two, the stockpiling plan does not name China directly, but all three are aimed at reducing reliance on Chinese supply chains through tighter trade defences, reshoring, and diversification.

They reflect a broader EU agenda to de-risk from China economically, treating resilience and industrial policy as tools of geopolitical alignment.

The proposals came a day after European Commission President Ursula von der Leyen vowed to “speed-up de-risking”.

“These realities do present a real challenge for Europe to confront. And we have started to address these challenges. Whether de-risking our economy and industry, using our new toolbox of trade defence measures, or diversifying our supply chains in sectors where China holds dependencies, if not outright monopolies,” she told the European Parliament.

These concerns have been stewing since the pandemic exposed Europe’s deep dependence on China for medical equipment. Russia’s invasion of Ukraine also provided a stark reminder of the bloc’s lack of energy autonomy.

Events this year have only served to sharpen anxiety about Europe’s supply chokepoints.

Beijing’s export licensing requirements for rare earth elements and magnets in April caused some European industrial sectors to grind to a halt, a sharp reminder that the bloc imports almost all of those minerals from China.

The chemicals plan included a pledge to launch defensive measures against Chinese dumping, subsidies and overcapacity, pointing to 46 trade measures targeting the sector as of last month.

“The majority of these cases concern imports from China, likely due to a build-up of massive overcapacities. While the EU industry was facing rising costs, Chinese producers steeply lowered their prices. This price decrease is totally disconnected from global raw materials market trends, which points to dumping practices,” the proposal said.

The plan also encourages reshoring and supply chain diversification and seeks to increase scrutiny of low-cost imports that are disconnected from raw material prices, both of which could also affect Chinese industry.

The medical strategy, prompted by concerns about bottlenecks during emergencies, seeks to reduce EU dependence on Chinese-made medicines, diagnostics and PPE.

It will ramp up domestic manufacturing and prioritise local supplies over cheaper imports, while also tightening import controls and quality checks.

The stockpiling strategy doubles down on a shift away from just-in-time production and sourcing, with the bloc looking to prioritise “trusted suppliers” for key goods – language that could realistically refer to China.

The proposals add to several existing laws designed to cut dependence on China.

These include the Critical Raw Materials Act, passed last year, which aims to find alternative suppliers for rare earths and minerals such as lithium and cobalt, where China has cornered the market for processing. The Net-Zero Industry Act prioritises local producers of clean technology goods over cheaper Chinese imports.

The chemicals industry plan follows similar initiatives in the automotive, hydrogen and metals sectors. In each case, the commission is trying to mitigate the impact of China’s industrial overcapacity, but has stopped short of creating a new trade weapon.

On Thursday, the European Parliament will vote on a resolution condemning China’s export controls and urging the EU to ramp up domestic mining of critical minerals, bolster the Critical Raw Minerals Act, and to sign trade deals with countries who could replace supplies from China.

The resolution said “China uses these export restrictions to maximise its negotiating position” and stressed that “the EU must firmly reject any attempts by China to use these restrictions to force concessions on other ongoing trade irritants”.

It added that the parliament “believes that any concessions to China in this respect would harm the EU’s ability to protect itself from current and future coercion”.

DeepSeek, Unitree Robotics host head of China’s state-owned firm regulator on Zhejiang tour

https://www.scmp.com/tech/policy/article/3317707/deepseek-unitree-robotics-host-head-chinas-state-owned-firm-regulator-zhejiang-tour?utm_source=rss_feed

Unitree Robotics and artificial intelligence (AI) firm DeepSeek hosted Zhang Yuzhuo, director of China’s State-owned Assets Supervision and Administration Commission (SASAC), during his tour of the two privately-owned start-ups on Thursday.

As part of his two-day visit to east Zhejiang province, where the two companies are based, Zhang aimed to learn from the two companies about “how enterprises effectively gather innovative resources and stimulate vitality in the field of AI”, according to an original statement released on SASAC’s website on Thursday.

However, an updated version of the statement omitted any mention of DeepSeek. Neither SASAC nor DeepSeek immediately responded to a request for comment.

Zhang also toured research centres and manufacturing facilities belonging to the state-owned China Electronics Technology Group and China Electronics, with a focus on how Internet-of-Things, AI and Big Data technologies enhance these companies’ operations.

He said state-owned enterprises (SOEs) should learn from the agile innovation practices of private firms and improve their employee evaluation systems to prioritise innovation, capability and contribution, according to the SASAC statement.

Zhang also stressed the importance of cultivating scientists in strategic areas and tech leaders to invigorate enterprise innovation and creativity.

He urged SOEs to concentrate on building a “national strategic scientific and technological force”, with an aim to achieve breakthroughs in integrated circuits, AI and other critical areas.

DeepSeek has emerged as a national leader in AI, offering powerful open-source systems at a fraction of the cost of top competitors in the West. Its approach has reassured local peers that high performance can be achieved with fewer Nvidia processors, which are in short supply in China amid US export restrictions on advanced chips.

Unitree has gained national recognition for its humanoid robots, which showcased their dancing skills during the annual Lunar New Year’s Eve gala on China Central Television. Wang Xingxing, the company’s founder, was recently appointed as one of three new advisers to Hong Kong’s Chief Executive.

DeepSeek and Unitree are known as two of the six “Little Dragons” of Hangzhou, the capital of Zhejiang.

Together with Deep Robotics, video game studio Game Science, brain-machine interface innovator BrainCo, and 3D interior design software developer Manycore, these firms are seen as budding leaders in their respective fields.

China blasts ‘immoral’ US trade practices, courts Asean on free trade unity, stability

https://www.scmp.com/news/china/diplomacy/article/3317742/china-blasts-immoral-us-trade-practices-courts-asean-free-trade-unity-stability?utm_source=rss_feed

China’s top diplomat drew sharp contrasts in trade practices between Beijing and Washington as he pressed Southeast Asian countries to protect free trade and not undermine the interests of “the third party” while the region confronts sweeping US tariffs.

Chinese Foreign Minister Wang Yi called US trade practices “unreasonable and immoral” during a meeting on Thursday in Malaysia with Md. Touhid Hossain, adviser for foreign affairs of the interim government of Bangladesh.

“China-Bangladesh cooperation delivers mutual benefits. China grants zero-tariff treatment, creating developing opportunities,” Wang said. “The US, however, has imposed a 35 per cent tariff on Bangladesh – one of the least developed countries – which is neither reasonable nor moral.”

At a regional summit on Thursday, Wang told foreign ministers from Southeast Asian countries that China viewed the Association of Southeast Asian Nations (Asean) as a key focus for its neighbourhood diplomacy and that the countries should support each other.

“China has always been the most reliable stabilising force in a turbulent world and the most reliable partner for Asean countries in addressing challenges,” he said, according to the foreign ministry.

In an outline of cooperation between China and Asean, Wang said the two sides should set an example for mutually beneficial cooperation and that Beijing appreciated the bloc’s commitment to protecting free trade and the multilateral trading system.

“[China] believes that economic and trade disputes must be resolved through equal dialogue and mutual benefit, while maintaining [Asean’s] own dignity and fundamental principles, and not at the expense of the interests of third parties,” he said.

The two sides should also set an example in defending international fairness and justice while firmly safeguarding the international system, Wang added.

“China is willing to work with Asean countries to practise open regionalism and true multilateralism and make greater contributions to regional and global governance,” he said.

“The world is in chaos today, and the peace and stability of our region are precious and should be firmly protected. We must never allow geopolitical conflicts and group confrontations to be introduced into Asia.”

Wang called for advancing consultations on the Code of Conduct in the South China Sea, insisting that strategic control of the disputed waters be kept “firmly in our own hands”.

The Asean bloc foreign ministers are holding a series of summits in the Malaysian capital of Kuala Lumpur this week.

Some Southeast Asian economies have entered into individual negotiations with the US after President Donald Trump imposed what he called reciprocal tariffs in April. So far, only Vietnam has successfully brokered an agreement, bringing its tariff rate down from 46 per cent to 20 per cent.

In a meeting with Vietnamese Vice-Premier and Foreign Minister Bui Thanh Son on the same day, Wang said China supported solving economic, trade and tariff issues through equal dialogue and offered to work with Hanoi on the issue.

“We stand ready to work with Vietnam to support the multilateral trading system and its rules, strengthening solidarity and mutual support to protect the legitimate interests of all nations,” Wang said.

This week, Trump sent letters to several countries outlining higher tariffs if they failed to make a trade deal with the US by August 1. The list included regional countries such as Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, and Thailand.

China has repeatedly cautioned Southeast Asia to brace for the impact of hefty tariffs, with top Chinese officials urging countries to collaborate to protect global free trade and oppose “unilateral bullying”.

On Wednesday, Malaysian Prime Minister Anwar Ibrahim told Asean leaders that the regional bloc must forge a unified diplomatic and economic front to respond to mounting pressures from Trump’s tariffs and other actions by global powers. Malaysia is the rotating chair of Asean this year.

“Power has always shaped trade but today it increasingly defines it. Across the world, tools once used to generate growth are now wielded to pressure, isolate and contain,” he said.

“Tariffs, export restrictions and investment barriers have now become the sharpened instruments of geopolitical rivalry.”

Earlier this week, China’s foreign ministry spokeswoman, Mao Ning, said rising unilateralism and protectionism globally posed unprecedented challenges to cooperation in East Asia.

“China looks forward to working with regional countries to support true multilateralism and open regionalism and defend free trade and the multilateral trading system,” she said, adding that Beijing would work with countries to “build a peaceful, safe and secure, prosperous, beautiful and amicable home in Asia”.

At the summit, Asean officials were expected to meet with US Secretary of State Marco Rubio. It is Rubio’s first visit to Southeast Asia as Washington’s top diplomat and the highest-profile US delegation to the region since Trump’s return to the White House in January.

Also on Thursday, Wang told his Russian counterpart Sergey Lavrov on the sidelines of the meeting in Kuala Lumpur that China would work with Russia to deepen strategic cooperation and safeguard the security and development interests of the two countries.

He said the Asia-Pacific region was a shared neighbourhood for China and Russia, and the two countries should promote the East Asian cooperation mechanism to become an important engine and positive force for global development.

China likely to strengthen backing for Iran as it looks to secure strategic interests

https://www.scmp.com/news/china/diplomacy/article/3317667/china-likely-strengthen-backing-iran-it-looks-secure-strategic-interests?utm_source=rss_feed

Beijing is likely to step up support for Tehran as it tries to secure its strategic interests in the Middle East, analysts say, amid concerns over how the recent Iran-Israel war will reverberate across the resource-rich region.

But one analyst noted it was a balancing act for Beijing to avoid compromising ties with Arab countries and the Gulf Cooperation Council nations.

The assessment was made as policymakers around the world are closely watching how the 12-day conflict in June – briefly joined by the US – will affect regional geopolitics.

The Israeli government believes the United States would back another Israeli strike on Iran if Tehran restarts its nuclear programme and this was likely discussed when US President Donald Trump met Israeli Prime Minister Benjamin Netanyahu in Washington on Monday, Axios reported, citing two sources with knowledge of the matter.

That has reignited worries over political stability in the Islamic Republic. Days after Israel began its missile attack on Iran last month, Netanyahu told ABC News that he would not rule out a plan to assassinate Iran’s supreme leader Ayatollah Ali Khamenei.

After the US military carried out strikes on Iranian nuclear sites on June 21, Trump also floated the idea of regime change in Iran, saying on social media: “If the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn’t there be a Regime change???”

But Chinese analysts say regime change is unlikely because the Israeli assault appeared to have reinforced unity in Iran.

“Following the recent strikes by Israel and the US, domestic sentiment in Iran has shifted towards stronger support for the supreme leader, with calls to safeguard national sovereignty and security gaining prominence,” said Sun Degang, director of the Centre for Middle Eastern Studies at Fudan University in Shanghai.

“This has reinforced the regime’s position, dispelling any lingering illusions about the US,” Sun said, adding that the war could “even draw reformists and liberals closer to the government’s current hardline policies”.

Sun said China could be expected to strengthen its “comprehensive strategic partnership” with Iran, which was established during President Xi Jinping’s state visit in 2016.

That could include more Chinese investment and imports of oil and gas from Iran under a 25-year comprehensive cooperation agreement signed in 2021.

“Both China and Iran are non-Western countries, and as major non-Western nations, they are pursuing their own paths to modernisation,” he said. “In this regard, China and Iran share many similarities.”

He said China may also look to extend its infrastructure links to Iran through Central Asia, a region Beijing sees as a priority as it tries to offset pressure from Washington.

“If the China-Kyrgyzstan-Uzbekistan railway system could be extended to Iran, that would lower risks while strengthening the connectivity between China, Central Asia and Iran as well,” Sun said, referring to the 304km (189-mile) railway line on which building work started in January.

But Jesse Marks, executive director of Rihla Research & Advisory, a Washington-based consultancy focused on the Middle East and Asia, said China would have to carefully evaluate its support for Tehran to keep a balance between Iran and its Arab neighbours.

“China doesn’t want a diminished Iran – such a scenario could heighten the risk of regime collapse or internal instability,” he said. “At the same time, Beijing cannot afford to be seen as underwriting a nuclear-armed Iran, especially given its growing ties with the Gulf and its broader non-proliferation interests.”

Last month’s war followed a series of conflicts that have roiled the Middle East since Palestinian group Hamas attacked Israel on October 7, 2023, sparking a war in the Gaza Strip, Israel’s attacks against Lebanese group Hezbollah, and followed by the sudden collapse of Bashar al-Assad’s regime in Syria in December.

The regime change in Damascus created a dilemma for Beijing given its concerns over the link between the new Syrian government – led by Ahmed al-Sharaa, who was head of militant group Hayat Tahrir al-Sham (HTS) – and Uygur militants from Xinjiang who reportedly fought alongside opposition forces during the civil war against the Assad government.

Engagement between Beijing and Damascus was largely frozen until February, when Sharaa met Chinese ambassador Shi Hongwei. In contrast, delegations from the US and Europe have visited Damascus with offers to support political transition and reconstruction in Syria.

Analysts said Beijing was unlikely to give up on Tehran, since – compared with Syria – Iran was of “greater strategic interest” to China, according to She Gangzheng, director of Tsinghua University’s Centre for Overseas Security in Beijing.

“China did maintain a relatively cordial political relationship with the Assad regime, but Syria has not been a top priority for China in the Middle East, and China has no grand projects in Syria,” She said.

Marks, in Washington, said China may have to recalibrate its strategy in the region.

“China’s experience in Syria showed that it can absorb the loss of a partner like Assad when the stakes are relatively low,” he said.

“But Iran is deeply tied to Chinese interests across multiple domains: energy, connectivity, and balancing Western influence. If Tehran destabilises further or collapses outright, the blowback for Beijing will be much sharper.”

He said China, which sees regional stability as a priority, could double down on efforts to prevent potential escalation between Iran and its Gulf neighbours while continuing to push for a resolution to the Iran nuclear crisis.

“Stability remains a prerequisite for China’s ambitions in the region. But rather than becoming a full guarantor of Iran’s security, Beijing will have to maintain ties with Tehran alive without compromising its far more valuable relationships with Saudi Arabia, the UAE, and the broader GCC.”

Chinese fans storm business-class cabin on taxiing plane to meet actor

https://www.scmp.com/news/china/article/3317703/chinese-fans-storm-business-class-cabin-taxiing-plane-meet-actor?utm_source=rss_feed

Some passengers on a taxiing plane in China tried rushing into the business-class section of XiamenAir flight MF8330 from Changsha to Fuzhou in a bid to meet actor Tian Xuning, causing chaos.

Asean calls for ‘wisdom and prudence’ in South China Sea

https://www.scmp.com/week-asia/politics/article/3317639/asean-calls-wisdom-and-prudence-south-china-sea?utm_source=rss_feed

The Association of Southeast Asian Nations on Thursday urged all parties to act with “wisdom and prudence” to uphold peace and security in the South China Sea, warning that any disruption to the vital waterway could have a disastrous effect on global trade.

Escalating trade and technology tensions between the United States and China have put Asean member nations under increased pressure to pick a side.

Asean has long been reliant on Washington as a security counterbalance to Beijing’s expansive claim over the South China Sea, even as the region leans closer to the Asian superpower to bolster trade and cushion the blow from punishing American tariffs of up to 40 per cent that US President Donald Trump has said will kick in on August 1.

But Southeast Asia faced real risks from increasing global uncertainty and geopolitical tensions, which could shake the region’s peace and stability, Asean warned on Thursday.

“We must therefore ensure that geopolitical tensions do not escalate or threaten to undermine security and global trade in the South China Sea,” Malaysia’s Foreign Minister Mohamad Hasan said in his opening remarks at the Asean-China meeting in Kuala Lumpur.

“Towards this end, Asean calls on all parties to manage the situation in the South China Sea with wisdom and prudence.”

The waterway is at the centre of long-standing territorial disputes between several Asean members and China, which has been pursuing an expansive historical claim carved out under a contentious 10-dash line map.

About a fifth of total global trade, estimated at more than US$3.5 trillion annually, passes through the South China Sea – centrally located in Southeast Asia.

Mohamad said the bloc welcomed progress in negotiations with China on the Code of Conduct (COC) in the South China Sea, which Asean has been pursuing for more than two decades to set common terms of engagement over conflicting territorial claims.

“We are confident that with the full commitment of all parties in the negotiations, we should be able to conclude an effective and substantive COC, in the not-too-distant future,” he said.

Asean’s top diplomats are set to hold a marathon series of talks with their counterparts from partner nations on Thursday, on the sidelines of the Asean Foreign Ministers’ Meeting.

China, represented by Foreign Affairs Minister Wang Yi, was the first to meet the bloc.

Asean foreign ministers will also hold meetings with Russian Foreign Minister Sergey Lavrov and US Secretary of State Marco Rubio, as well as top diplomats from Australia, Canada, New Zealand, Japan and South Korea.

Rubio, the most high-profile US official to visit Asia since Trump’s return to the White House for a second term in January, is also set to meet Malaysian Prime Minister Anwar Ibrahim on Thursday afternoon.

Chinese scientists create first cyborg bee with world’s lightest brain controller

https://www.scmp.com/news/china/science/article/3317614/chinese-scientists-create-first-cyborg-bee-worlds-lightest-brain-controller?utm_source=rss_feed

Worker bees carry nectar sacks weighing 80 per cent of their body mass. When airborne, they tuck their hind legs like landing gear to cut wind drag.

And they can fly 5km (3 miles) with no need for rest, an example of how nature’s genius shames human machinery.

Until now.

At Beijing Institute of Technology, Professor Zhao Jieliang’s team has built the world’s lightest insect brain controller. At 74 milligrams, it is lighter than a sack of nectar.

Strapped to the bee’s back, the device pierces its brain with three needles. It creates illusions with electronic pulses to command flight: turn left, turn right, advance, retreat.

Nine out of 10 times, the bee obeyed.

The cyborg bee could serve as military scouts or search for survivors in the ruins of an earthquake, according to a peer-reviewed paper published on June 11, in the Chinese Journal of Mechanical Engineering.

“Insect-based robots inherit the superior mobility, camouflage capabilities and environmental adaptability of their biological hosts,” wrote Zhao and his colleagues.

“Compared to synthetic alternatives, they demonstrate enhanced stealth and extended operational endurance, making them invaluable for covert reconnaissance in scenarios such as urban combat, counterterrorism and narcotics interdiction, as well as critical disaster relief operations,” they added.

Before this, the lightest cyborg controller came from Singapore and was triple the weight. It could command beetles and roaches but they crawled at relatively slow speeds in short ranges and fatigued quickly.

Zhao’s team printed circuits on polymer film. While flexible and as thin as insect wings, it hosts numerous chips including an infrared remote.

Tests were done in nine pulse settings. The researchers studied bee wings and cockroach turns. They mapped signals to motion, made bees bank and made roaches trace long straight paths with little deviation.

But some flaws remain.

Bees need wired power and roaches tire after 10 zaps. One signal stirs different moves in different bugs, according to the researchers.

A long-lasting battery weighs 600mg – far too heavy for a bee. Their legs and bellies also refuse commands.

“In future research, precision and repeatability of insect behaviour control will be enhanced by optimising stimulation signals and control techniques,” wrote Zhao’s team.

“Concurrently expanding functional modules of the control backpack will improve environmental perception capabilities of insect-based robots, advancing their deployment in complex operational settings such as reconnaissance and detection missions,” they added.

Nations have engaged in an intense race on cyborg tech. The US Defence Advanced Research Projects Agency (DARPA) used to take the lead, with Japan trailing closely. But now China is smashing records in this field, thanks to ample government funding and a booming electronics industry.

---

Svelteness in China is a US$150 billion market, with dozens of drug producers vying for it

https://www.scmp.com/business/article/3317624/svelteness-china-us150-billion-market-dozens-drug-producers-vying-it?utm_source=rss_feed

Sales of weight-loss drugs in the West have soared in recent years, driven by the approval of a new class of more effective medication, the rapid growth in obese populations owing to poor diet and lack of exercise, and endorsements by celebrities and social media influencers.

In China, over 60 late-stage drugs are undergoing clinical trials. In the coming years, these may compete with the products of incumbents such as Denmark’s Novo Nordisk and US-based Eli Lilly, Boston-based global consultancy L.E.K. Consulting said in a report in May.

Innovent Biologics, based in eastern China’s Jiangsu province, was the first domestic firm to win approval to market a weight loss drug in the country.

Here are some questions answered about this nascent, but fast-growing drug market.

Glucagon-like peptide-1 (GLP-1) was first developed to treat type 2 diabetes caused by insufficient production of insulin or the body’s failure to react to insulin, a hormone produced by the pancreas that regulates and maintains healthy levels of blood sugar. Type 2 diabetes is often associated with obesity.

Many weight loss treatments have tried and failed over the past century, due to limited or unsustainable efficacy, safety issues and side effects, according to a 2022 paper by US obesity and diabetes researchers George Bray and Jonathan Purnell.

The first GLP-1 peptide hormone was discovered in 1984. US-based Amylin Pharmaceuticals’ exenatide, the first drug that mimicked GLP-1’s actions in stimulating insulin secretion after meals and suppressing appetite by slowing the movement of food in the digestive system, was approved for type 2 diabetes treatment two decades ago. Liraglutide, a once-daily injection developed by Novo Nordisk, was the first GLP-1 drug approved for weight loss in 2014.

Liraglutide subsequently lost market share to the more recent once-weekly injection blockbuster products developed by Novo Nordisk and Eli Lilly, which offered greater efficacy and usage convenience for both weight loss and blood sugar control.

Although it was known for decades that certain digestive system hormones could be used to regulate body metabolism and manage weight, technologies like artificial intelligence greatly accelerated the efficiency in identifying peptide structures with a higher chance of achieving better efficacy and safety, according to Francis Chow Chun-chung, founding president of the Hong Kong Association for the Study of Obesity.

Around six natural hormones that are key to regulating body metabolism and weight control have been identified by researchers, including GLP-1, glucagon and glucose-dependent insulinotropic polypeptide (GIP), he noted.

These have become targets for biotech firms to mimic their actions. Some candidates were designed to tackle multiple targets to achieve better efficacy in weight loss and other metabolism-related diseases, such as fat accumulation in the liver.

With dozens of drug candidates undergoing clinical trials, analysts expect multiple drugs for diabetes and weight loss to be approved in the next few years, which would drive down prices and boost sales.

Two months ago, BMO Capital Markets analyst Evan Seigerman raised his global annual sales projection for obesity medicines to US$150 billion by the early 2030s, from US$100 billion previously. Morgan Stanley analysts also lifted their forecast in May to US$150 billion in 2035, from US$105 billion last year.

Besides demonstrating efficacy and safety in weight management and blood sugar regulation, developers are investing in further studies to present direct clinical evidence that their drugs would not raise – or even reduce – the risk of cardiovascular, oncology and kidney diseases, Hong Kong’s Chow said.

“Efficacy and safety will be the basic requirements, with demonstrated risk reduction of these other diseases being the secondary consideration for doctors to decide which drug to prescribe,” he said.

A large-scale study on semaglutide, conducted by Novo Nordisk between 2018 and 2023, showed a 20 per cent reduction in major adverse cardiovascular events and a 22 per cent reduction in kidney disease in 17,604 overweight or obese adults, who had pre-existing cardiovascular disease but without diabetes.

Some drug developers may not invest in such studies and would not be able to make the additional benefit claims, but could instead offer lower prices to vie for a bigger share of price-sensitive segments such as public sector healthcare, Chow said.

---

Why China’s yuan can be safe-haven currency – former bank official flags its ‘advantages’

https://www.scmp.com/economy/china-economy/article/3317643/why-chinas-yuan-can-be-safe-haven-currency-former-bank-official-flags-its-advantages?utm_source=rss_feed

The yuan has the potential to become a safe-haven currency, a former central bank official said while calling for capital-control flexibility and greater efforts to boost foreign participation.

The argument – presented before the US Treasury chief rejected the possibility last week of the yuan gaining reserve-currency status – has underscored the ongoing debate over Beijing’s push to internationalise the yuan. And it comes at a time when confidence in the US dollar is being tested by mounting debt risks and an amplified protectionist push by US President Donald Trump.

“In terms of institutional credibility – the government and central bank’s commitment to stability – as well as macro fundamentals such as low inflation, current account surplus and large foreign reserves, the yuan already enjoys considerable advantages,” Sheng Songcheng, former head of the central bank’s statistics department, and Sun Dan, an economist and researcher with the CEIBS Lujiazui International Institute of Finance, wrote in a recent article.

In the latest issue of Hong Kong International Finance Review, the two authors contended that the yuan had shown reduced sensitivity to risk indicators during recent periods of global stress, including from the ongoing Russia-Ukraine war and amid shocks from US tariffs.

The yuan has already displayed a more “stable and neutral” performance and partial safe-haven traits, they said in the June 30 edition.

Traditionally, the US dollar, Japanese yen and Swiss franc are regarded as safe-haven currencies.

Since Trump’s announcement of sweeping “reciprocal” tariffs on April 2, the Chinese currency has shown resilience, with the offshore yuan briefly weakening to around 7.4 per US dollar before rebounding to about the 7.2 level.

But the authors also cautioned that “the low share of foreign participation remains a key obstacle to the yuan becoming a quasi safe-haven currency”, in part due to its incomplete convertibility and lingering capital-account controls.

“While foreign investors enjoy relatively easy access to yuan assets through mechanisms like Stock Connect and the interbank bond market during normal times, episodes of extreme volatility or policy shifts can lead to risks of temporary capital controls – dampening the appeal of yuan-denominated assets,” Sheng and Sun said.

US Treasury Secretary Scott Bessent raised similar concerns last week during an interview with Bloomberg in which he dismissed the idea of a global role for the yuan as “a complete fallacy”.

“They have a non-convertible currency. So, how are they going to be a reserve currency,” he asked.

To improve the appeal of yuan assets to long-term investors and support the currency’s evolution into a safe-haven asset, the authors called for streamlining cross-border investment procedures and, under controllable risk conditions, enhancing the flexibility of capital-flow management, rather than resorting to blanket capital controls.

Meanwhile, the country should expand the supply of high-credit, yuan-denominated safe assets – for example, by encouraging more diversified investment by foreign capital into high-quality local government bonds, under controllable risk conditions, Sheng and Sun wrote.

In the offshore market, they suggested supporting existing offshore centres such as Hong Kong in enhancing yuan liquidity, expanding the range of offshore yuan products, and developing more hedging and investment tools.

“[We should] promote discussions within multilateral institutions such as the IMF and BIS on expanding the global supply of safe assets, and advocate a new vision where multiple currencies jointly support global financial stability,” they wrote, adding that this would be aimed at building international consensus for a greater role for the yuan.

China’s rare earth export curbs spark EU concerns ahead of Beijing summit

https://www.scmp.com/economy/global-economy/article/3317683/chinas-rare-earth-export-curbs-spark-eu-concerns-ahead-beijing-summit?utm_source=rss_feed

The European Union is facing growing calls to act against Beijing’s dominance over rare earth supply chains, highlighting persistent tensions just weeks before the coming EU-China summit.

“Europe faces dual coercion: Trump’s tariffs and more threateningly, China’s strategic chokehold on rare earth exports,” said Bart Groothuis, MEP for Renew Europe, a centrist group in the European Parliament led by French President Emmanuel Macron’s Renaissance party.

“This is not collateral damage from the China-USA dispute, this is intentional to hit Europe.”

According to official EU data, the bloc imports 100 per cent of its rare earths and 97 per cent of its magnesium from China. To break this dependency, Renew Europe has called on the EU to diversify its sources, warning that the continent’s reliance on Chinese rare earths leaves it vulnerable to “blackmail”.

Despite acknowledging the legitimacy of these concerns, analysts noted that China would remain a significant supplier for the foreseeable future, with Europe likely to remain dependent on Chinese rare earths for at least the next 10 to 15 years.

Holger Goerg, director of the international trade and investment research group at the Kiel Institute for the World Economy, said Europe’s strategy rests on two pillars: increasing recycling capacity and negotiating deals with other countries to diversify imports, both of which would take time.

“We are really talking about a strategy that might kick in in the next 10 to 15 years, when you start to see some results, [but] absolutely not before,” Goerg said.

While rare earth recycling may become viable in the long term, more time is required to build the necessary facilities and infrastructure, as well as to develop competitive technology, he said – a sentiment echoed by industry insiders across the continent.

Frédéric Carencotte, the founder of Carester, is establishing the first rare earth recycling factory in Europe near the French city of Lacq, which is expected to begin production by the end of 2026.

The initial goal is to produce about 700 tonnes of rare earth elements every year – “very little”, he said – compared to the 12,900 tonnes imported by the EU in 2024, according to official data.

“We are working with partners who are looking for a long-term solution, who have a long-term vision,” Carencotte said.

The plant would serve more as a showcase for recycling technologies, he added.

Market reactions to the factory have been positive, with over 70 per cent of its future production already reserved by various groups, including major car manufacturer Stellantis, which controls French brand Citroën and Italian brand Fiat.

“They are supporting a long-term sector based on quantities that, as we’ve seen, aren’t exactly impressive,” Carencotte said.

Another European leader in rare earth processing, Belgium-based Solvay, positions itself as a “global player” in the industry. It runs the only factory outside China capable of separating all types of rare earth materials, in the French city of La Rochelle.

But it does so by “working closely with the Solvay rare earth processing site in Liyang in China”, a spokesperson from the company said on Wednesday.

Signing deals with alternative rare earth producers could be time-consuming for the EU, which is known for its lengthy trade negotiations.

The EU’s deal with the South American trading bloc Mercosur, for example, took almost 25 years to negotiate and is still awaiting ratification seven months after talks concluded because Europe cannot get its members to agree on the terms.

South America produces 25 out of the 34 raw materials identified as critical by the European Union and could help the bloc reduce its dependency on Chinese rare earth exports, according to a report published by the European Parliament last December.

“France and Poland have concerns about Mercosur’s agriculture imports ... [The] EU tries to put a lot into these trade agreements that further complicate things,” Goerg said.

China has repeatedly asserted that it is not targeting Europe with its rare earth export controls. Chinese Foreign Minister Wang Yi said that critical mineral exports have never been an issue between China and Europe and should not become one, during his visit to Germany last week.

The Chinese government has established a dedicated fast track channel to evaluate export requests submitted by European companies, he added.

Ultimately, Europe does not intend to cut ties with China completely, nor will it be able to do so, according to Goerg.

“Once the pillars kick in we can reduce dependence on China, but we cannot get around it [entirely].”

---

China’s military mouthpiece warns of ‘moral pitfalls’ of humanoid fighters

https://www.scmp.com/news/china/military/article/3317700/chinas-military-mouthpiece-warns-moral-pitfalls-humanoid-fighters?utm_source=rss_feed

The official newspaper of the Chinese military has warned of potential ethical concerns associated with the use of humanoid fighters.

On Thursday, an analysis in the People’s Liberation Army (PLA) Daily said that the military should conduct “ethical and legal research” on humanoid robots to “avoid moral pitfalls”.

“Military humanoid robots are the most humanlike weapons to date, and their large-scale, normalised use could lead to indiscriminate killings and accidental deaths, which would inevitably result in legal charges and moral condemnation,” the article said.

The article was signed by Yuan Yi, Ma Ye and Yue Shiguang, but the newspaper did not specify their affiliations.

The authors cited American science fiction writer Isaac Asimov’s Three Laws of Robotics, saying that militarised humanoid robots “clearly violate” the first law, which states that a robot “may not injure a human being or, through inaction, allow a human being to come to harm”. They added that Asimov’s laws must be amended.

They said that humanoid robots in military scenarios should comply with the main principles of the laws of war by “obeying humans”, “respecting humans” and “protecting humans”.

According to the authors, these robots should be able to “suspend and limit excessive use of force in a timely manner and not indiscriminately kill people”.

They added that the biggest advantages of humanoid robots were their mechanical arms and “ability to use machinery flexibly”.

According to the authors, “a large number of military tasks that cannot be replaced by active unmanned systems can be included in the list of tasks required of humanoid robots”.

The article stated that the military should “carefully study and propose” military requirements to plan the development of humanoid robots.

It also acknowledged that humanoid robots had limitations in terms of speed and environmental adaptability and that, compared with other unmanned equipment, they were “more expensive and more complex to implement technologically”.

“Even if humanoid robots become mature and widely used in the future, they will not completely replace other unmanned systems,” the article said.

It was the latest of several PLA Daily articles to discuss the use of humanoid robots on the battlefield. In May, an article said that humanoid robots could “continue to transform humanity’s perception of the future of warfare”.

The May article noted that humanoid robots had “intelligent decision-making and autonomous combat capabilities based on artificial intelligence (AI) algorithms”. It praised their ability to intelligently assess the battlefield environment and “autonomously complete combat missions”.

Humanoid robots sit at the intersection of artificial intelligence, advanced manufacturing and embodied intelligence – areas critical to China’s efforts to gain an edge in its fierce competition with the United States.

Several Chinese companies have introduced highly versatile robots this year, boosting confidence in the technology, and Beijing is keen to consolidate China’s early lead in the field.

Humanoid robots are mostly used in industrial applications such as logistics and manufacturing, while others are used in research, educational institutions and the service industry.

Countries are racing to develop humanoid robots for military use, although large-scale deployment remains a distant prospect.

Chinese nationals in Africa ‘vulnerable to kidnappings’ as cases rise

https://www.scmp.com/news/china/diplomacy/article/3317516/chinese-nationals-africa-vulnerable-kidnappings-cases-rise?utm_source=rss_feed

Chinese nationals are being targeted by kidnappers in African countries as more investors are drawn to the continent in areas ranging from infrastructure development to minerals extraction.

Cases of kidnapping for ransom are being seen across Africa. China’s embassy in South Africa issued a warning on Sunday about a rise in kidnappings of Chinese women. In Somalia and Ghana, piracy cases targeting Chinese fishing vessels have involved ransom demands. And the Democratic Republic of Congo and Nigeria have also seen armed robbery and abduction cases involving Chinese in recent months.

Analysts say Chinese traders are being targeted because of a perception that they operate their businesses outside the formal banking system and that they might be carrying around large sums of cash.

In its warning, the Chinese embassy in South Africa said there had been multiple incidents involving Chinese women reported across the country recently, particularly in Gauteng and the Eastern Cape provinces.

“These cases seriously threaten the personal and property safety of Chinese nationals,” the embassy said, urging women to avoid going out alone. “If you are unable to travel with others, please inform your relatives and friends of your whereabouts.”

It comes amid a rise in kidnappings in South Africa this year, as well as a fatal home invasion and robbery targeting Chinese nationals on May 31.

Earlier this month, the Chinese embassy cautioned tourists heading to South Africa for the summer holiday to prioritise their personal safety due to the recent spate of kidnappings.

According to Emmanuel Matambo, research director at the Centre for Africa-China Studies at the University of Johannesburg, “there is a long-standing perception in South Africa that Chinese nationals, entrepreneurs and businessmen and businesswomen keep large amounts of cash in their homes and are loath to use banks”.

“As such, they render themselves vulnerable not only to kidnappings, but home invasions as well,” Matambo said.

That view was echoed by Michael McLaggan, an analyst at the Global Initiative Against Transnational Organised Crime in Cape Town.

He said while Mozambican nationals were initially targeted for high-profile kidnappings in South Africa, the increased number of cases now included Pakistanis, Somalis, and in recent years Chinese.

According to McLaggan, the crime was being fuelled by “copycat gangs” who saw kidnapping as a “low-risk, high-reward endeavour” compared to more dangerous activities like cash-in-transit robberies.

He linked this to the growing presence of Chinese nationals in Africa for trade and projects under Beijing’s Belt and Road Initiative. He said many of these individuals ran cash-based businesses or had access to liquid assets.

“Many Chinese business owners may be less likely to use the formal banking system in their country of residence, a common practice in places like South Africa,” McLaggan said.

He said this preference for underground banking channels – known as “feiqian” in China or “hawala” in Africa and the Middle East – made Chinese nationals more attractive to kidnappers.

It meant kidnappers could receive ransom payments quickly and discreetly, he said, and the victim’s family did not have to make large bank withdrawals or send wire transfers that could draw the attention of authorities.

In addition to South Africa, kidnapping cases involving Chinese nationals have been reported in other African nations including the DR Congo, Nigeria, Ghana and Niger, as well as the Central African Republic and Somalia.

In Nigeria, a Chinese expatriate and their Nigerian colleague were abducted from a Kwara State mining site in June, with a demand for 1 billion naira (US$652,400). That followed the kidnapping of a Chinese national in Abuja in April with a 300 million naira ransom demand.

In Ghana, three Chinese crew members were rescued in late April after being abducted from a vessel off Tema in March. In Somalia, a Chinese-owned fishing vessel and its 18 crew were hijacked in late 2024, leading to a reported US$2 million ransom payment in January for their release.

McLaggan noted it was important to view the kidnappings “within the broader context of proliferating organised crime and the security environments in these affected countries”.

China offers one-off subsidy to those hiring unemployed young people

https://www.scmp.com/economy/china-economy/article/3317637/china-offers-one-subsidy-those-hiring-unemployed-young-people?utm_source=rss_feed

China is stepping up its efforts to stabilise employment and bolster household incomes, as labour market pressures persist amid sluggish economic growth, fierce domestic competition and the trade war with the United States.

The authorities will provide a one-off employment subsidy for companies and social organisations that hire unemployed people aged between 16 and 24, the General Office of the State Council said in a circular released on Wednesday.

Employers who sign formal contracts and pay full unemployment, work injury and pension insurance contributions for at least three months will receive up to 1,500 yuan (US$209) for each new hire they make.

The measure will remain in effect until the end of this year and be funded through China’s unemployment insurance reserves, the office added.

As part of the country’s job creation efforts, China’s top economic planner, the National Development and Reform Commission (NDRC), has allocated an additional 10 billion yuan in central government funding to expand its “work-for-relief” programme, aimed at generating jobs through labour-intensive public works.

The new round of funding will support 1,975 projects and deliver an estimated 4.59 billion yuan in direct wage payments to vulnerable groups.

By the end of last month, the NDRC and the Ministry of Finance had jointly earmarked a total of 29.5 billion yuan in central government funding for this year, supporting nearly 6,000 “work-for-relief” projects nationwide.

The projects are expected to create more than 700,000 local jobs and generate over 11 billion yuan in wages, offering a crucial lifeline for low-income groups while also improving rural infrastructure.

China’s workforce is facing a harsh reality marked by job insecurity, shrinking opportunities, pay cuts and lay-offs – with fresh graduates and low-income groups bearing the brunt.

While the national urban unemployment rate stood at 5 per cent in May, comfortably below the government’s annual target of 5.5 per cent, youth joblessness remains a major concern. Among 16- to 24-year-olds who are not students, the unemployment rate was 14.9 per cent – an improvement from April but still well above the 14.2 per cent recorded in May last year.

The “work-for-relief” projects target regions with high concentrations of returning migrant workers and rising demand for jobs, focusing on small-scale infrastructure development in rural areas and those on the fringes of urban ones, the NDRC said in an announcement issued on Tuesday.

Prioritising projects using manual labour over machinery, they include hardening village roads, upgrading rural production routes, dredging irrigation channels and reinforcing environmental protection barriers.

“This round alone is expected to create local employment for over 310,000 people, including low-income households, returnees and rural surplus labour,” the NDRC said.

‘Missing’ Chinese man walks for six days in the mountains to forget ex, triggers huge search

https://www.scmp.com/news/people-culture/trending-china/article/3316698/missing-chinese-man-walks-six-days-mountains-forget-ex-triggers-huge-search?utm_source=rss_feed

A lovelorn young Chinese man has shocked social media after he spent six days wandering in the wilderness, often without food or water or a mobile phone, all in an attempt to forget his ex-girlfriend.

Police in Yuhang District, Hangzhou, Zhejiang province in southeastern China received a call from a man in Changsha, Hunan province, reporting that his younger brother, identified as Xiaolin, had been out of contact for three days while working alone in Hangzhou.

He said he last heard from Xiaolin on June 19, prompting officers to visit his flat to investigate.

They found the flat empty, with his mobile phone left behind.

Surveillance footage showed that Xiaolin had left his rented flat on foot on the afternoon of June 20 and his last known location was in the Dalang Mountain area around 1am the next morning.

Yuhang police mobilised more than 100 officers and local residents to search the area.

Despite deploying police dogs, drones and sonar devices, the search yielded no results.

Finally, on the morning of June 26, Xiaolin was spotted on surveillance cameras in a park in Lin’an District.

The local authorities were alerted, and Xiaolin was found.

Zhu Liliang, the deputy director of the Yuhang Police Station, told HTV – 1 that Lin was found in ragged clothing.

According to Zhu Xiaolin had been struggling with a recent break-up and ventured into the mountains to clear his mind.

He walked mountain trails from Xianlin to Fuyang, then to Zhongtai, and eventually reached Lin’an, covering a distance of about 40 kilometres.

During the journey, he survived by picking wild fruit and drinking water from mountain streams. For the first three days, he reportedly neither ate nor drank.

“When we found him, his clothes were in tatters,” Zhu said.

“He did not eat or drink for the first three days. Later, when his body could not take it any more, he drank from mountain springs and ate food found near village homes.”

At present, Xiaolin is in stable condition.

After speaking to the police, Xiaolin realised the distress he had caused to himself and his family and promised not to act so impulsively again.

The incident went viral on mainland social media.

One online observer said: “I am honestly so impressed that he managed to leave his phone behind.”

“To be honest, that girl is lucky she broke up with him. Someone this extreme is not relationship material,” said another.

While a third quipped: “He might be Hangzhou’s most devoted lover, but now, instead of forgetting the previous relationship, millions of netizens will remember it for him.”

---

Can catlike US tariffs chase China’s manufacturing mouse out of the Asean maze?

https://www.scmp.com/economy/global-economy/article/3317553/can-catlike-us-tariffs-chase-chinas-manufacturing-mouse-out-asean-maze?utm_source=rss_feed

Chinese exporters like Huang Yongxing are desperate for some straight answers so they can start making and shipping goods from their factories in either China or Southeast Asia.

And the answers – or at least updates – that Huang does get, he shares on his social media account via weekly updates that have gained traction among owners of small and medium-sized businesses as disruptive and volatile tariff policies out of Washington continue to redraw the profitability lines for manufacturers.

They now face a prolonged dilemma over investments, as some of their overseas factories are staring down the barrel of US President Donald Trump’s “reciprocal” tariffs of up to 40 per cent on 14 countries, most of which are major destinations for Chinese exports.

Trump’s move, announced on Monday, puts Southeast Asia – China’s largest export market – in Washington’s trade crosshairs while dealing a direct blow to Chinese exporters’ transshipment strategies throughout the region.

American policy ambiguity on transshipment, with high tariffs threatened but lacking implementation details, creates huge uncertainties for outbound Chinese investors.

In response, many Chinese companies – both those that have already expanded overseas and those with plans to do so – have had little option but to play it safe.

Huang, a lighting product exporter based in Zhejiang province, has had to repeatedly revise plans to open a factory in Cambodia due to Trump’s shifting trade stance in recent months.

“Clients were pushing me to set up production somewhere in Southeast Asia, but that means double spending – keeping my Chinese factory running while investing in a new one,” he said in a recent video posted to WeChat, China’s ubiquitous messaging app.

“With immature local supply chains, it will take at least two years to gain new clients. The reality would be double the expenses, but with only one income.”

Six of the 10 members of the Association of Southeast Asian Nations are affected, with Cambodia, Thailand, Indonesia, Laos and Myanmar facing tariffs ranging from 25 to 40 per cent. Among them, Laos and Myanmar would be subject to the highest tariffs of 40 per cent, and the added cost would render Chinese companies’ mode of re-exporting to the US through these countries virtually ineffective.

Shaped by years of escalating trade actions and policy shifts, the current weighted average tariff on Chinese imports is estimated to be 42 per cent, according to Morgan Stanley. UBS put the rate at 43.5 per cent.

“No matter what you choose, it feels wrong,” said another lighting exporter, Levi Tan, in Guangdong province. “Those fellows who have already built factories can’t sleep at night.”

Industry insiders have warned that, while the trend of “going global” continues, rising uncertainty surrounding tariffs is rapidly shrinking Chinese exporters’ strategic flexibility.

“Without stable expectations, every investment is a gamble,” said supply-chain expert Liu Kaiming, who is familiar with re-routing models.

“Cambodia currently only has a relatively complete industrial chain in the garment industry, and Laos and Myanmar only have scattered factories,” Liu explained. “Once included on the high-tariff list, Laos and Myanmar re-exports would be hardly feasible, and Chinese factories investing there will surely suffer huge losses.”

Liu said he believed that Southeast Asia would continue to play a key role in shifting China’s supply chain, but also that the process is proving much harder than many enterprises had initially envisioned.

“From production capacity building to capital mobilisation, all costs are rising,” Liu said. “Trump’s policy reversals are so frequent that many business owners feel like whatever they do is the wrong choice.”

Hardware exporter Kevin Huang in Guangdong echoed those concerns, noting how constant changes in US tariff policy were intensifying short-term risks. “Some peers just finished setting up their factories but are already facing cash-flow collapse,” he said.

And with his US customers “suffering losses and delaying payments”, Huang said: “I don’t dare to continue shipping now, and all I can do is prepare to account for bad debt.”

Some domestic manufacturers, however, see an unexpected upside.

“If Southeast Asia is hit with tariffs, we might actually gain a relative edge,” said Wang Shui, a manufacturing exporter of pet products in Guangdong.

“We’re not afraid of tariffs. As long as we can deliver quality products, clients will still place orders. Many products Southeast Asia simply can’t produce.”

Still, Wang acknowledged that the broader trade environment was growing increasingly precarious.

“Whether staying in China or expanding abroad, manufacturers are facing unprecedented uncertainty,” he lamented. “With US policy shifting daily, no one knows what’s coming next.”

Chinese and Pakistani air chiefs seek military synergy on training and tech fronts

https://www.scmp.com/news/china/military/article/3317583/chinese-and-pakistani-air-chiefs-seek-military-synergy-training-and-tech-fronts?utm_source=rss_feed

A Pakistan Air Force (PAF) general called for greater cooperation in training and technology with China in talks with his Chinese counterpart in Islamabad on Tuesday.

Air Chief Marshal Zaheer Ahmed Baber Sidhu, chief of the Pakistan Air Force (PAF) met Lieutenant General Wang Gang, chief of staff of the People’s Liberation Army Air Force, to discuss operational synergy between the two branches, according to a statement from the Pakistan Armed Forces.

Wang received a detailed briefing on the PAF’s modernised force structure and strategic initiatives, and expressed “deep appreciation for the high state of operational readiness and the cutting-edge capabilities” of the PAF, the statement said.

He also praised the PAF’s performance during a recent conflict with India, calling it a “textbook example of precision, discipline and courage in the face of unprovoked aggression” and commended the “decisive and measured response delivered by PAF pilots”.

Wang also said the Chinese air force was keen to learn from Pakistan’s “battle-proven experience in multi-domain operations”, which he described as a hallmark of modern air warfare, according to the statement.

Sidhu reaffirmed the “strong bond of friendship between the two air forces”, and said the ties between Pakistan and China were rooted in “mutual trust, strategic convergence and shared aspirations for regional peace and stability”.

The meeting at Air Headquarters in Islamabad came two months after India launched a series of air strikes on Pakistan in retaliation for a terrorist attack that killed 26 civilians in Indian-administered Pahalgam.

In its response, Pakistan deployed a combination of Chinese-made weapons against Indian forces equipped with arms from Russia and several Western countries.

During the four-day conflict, Pakistani Deputy Prime Minister Ishaq Dar said the PAF used Chinese-made J-10C jets to down six Indian fighters.

China and Pakistan have a long history of defence collaboration, most notably the joint production of the JF-17 Thunder fighter jet.

In footage of the Wang-Sidhu meeting, a large model of the aircraft was displayed at the centre of the room.

Last week, Sidhu also met senior military and political leaders in the United States, marking the first official visit by a serving PAF chief to Washington in more than a decade.

Islamabad wants to re-engage with Washington on security cooperation, even as it strengthens defence ties with Beijing.

Head of US House panel urges schools to reconsider ‘nefarious’ Chinese scholarship programme

https://www.scmp.com/news/world/united-states-canada/article/3317605/republicans-urge-us-schools-drop-nefarious-chinese-scholarship-programme?utm_source=rss_feed

Representative John Moolenaar, the head of the House Select Committee on the Chinese Communist Party, is calling on seven American universities, including Dartmouth College, to reconsider partnerships with a Chinese scholarship organisation.

The move is the latest congressional attempt to curb the flow of Chinese students to the US over national security concerns. Since taking over as chair of the committee, Moolenaar, a Michigan Republican, has made ending US-China partnerships a priority.

In letters dated Tuesday and released Wednesday, he asked the schools’ presidents to reassess ties with the Chinese Scholarship Council, the primary body in China providing state-funded scholarships to facilitate academic exchange.

He also asked them to provide details about their contractual agreements with the CSC, the Chinese entities that CSC-sponsored students came from and joined after graduation, the students’ involvement in US government-funded research and an explanation of how supporting China-linked talent aligns with US interests.

In addition to Dartmouth, targeted schools include Temple University; the University of California, Davis; the University of California, Irvine; the University of California, Riverside; the University of Notre Dame; and the University of Tennessee.

The CSC announced in August that up to 240 outstanding Chinese students would be selected to work towards a master’s or doctorate degree at the seven schools this year. Study tracks across a wide range of disciplines, including agriculture, engineering, public health, liberal arts and sociology, would be open for application, and in some cases the costs would be borne by both the CSC and the US institution.

The Chinese Communist Party “has a long track record of acquiring US technology through both legal and illegal tactics – including talent recruitment programs, academic partnerships that serve its military, forced tech transfer, espionage, and outright theft”, Moolenaar said in a statement on Wednesday.

He characterised the CSC as a “nefarious” Communist Party-managed “technology transfer effort that exploits US institutions”. In his letters, he argued that CSC programmes were distinct from other international student programmes as they require students to return to China upon graduation and work there for at least two years, as well as provide regular updates to the Chinese government about their progress throughout their study period.

Many governments, including India, Malaysia and Singapore, provide scholarships to their citizens with mandatory return requirements, aimed at building capacity in critical sectors and preventing brain drain.

In 2023, the CSC sent over 10,000 students abroad for advanced education. Besides the US, other popular destinations included Australia, Canada, Europe, Japan and New Zealand.

US government interest in Chinese students has picked up in recent months, heaping fresh pressure on academic partnerships set up to share information and break down barriers between the US and China.

In May, US Secretary of State Marco Rubio said Washington would “aggressively” revoke visas of Chinese students, including those with “connections” to China’s Communist Party and in “critical fields”. During his first term, US President Donald Trump restricted visas for students affiliated with China’s “military-civil fusion strategy”.

Over the past year, as a result of pressure from Moolenaar’s committee, schools across the country, from research giants such as the University of California, Berkeley, the University of Michigan and Georgia Tech, to less research-focused institutions like Michigan’s Oakland University and Eastern Michigan University, have ended partnerships with Chinese entities.

China is the second-largest country of origin for international students in the US, behind only India. Most students do not attend with funding from the Chinese government.

The total number of Chinese students in the US dropped to about 277,000 during the 2023-24 academic year from a peak of about 372,000 a few years earlier, according to the latest data compiled by the New York-based Institute of International Education.

Many US universities and academics acknowledge a need to strengthen research security but caution against casting broad suspicion on Chinese citizens, noting that only small numbers have been accused of espionage.

Can China’s fastest-growing firms save themselves from themselves?

https://www.scmp.com/economy/china-economy/article/3317596/can-chinas-fastest-growing-firms-save-themselves-themselves?utm_source=rss_feed

This is the second story in a exploring the domestic economic challenges China faces as it navigates an unprecedented trade war with the United States. In this piece, we examine the no-holds-barred battles within the country’s emerging industries that have sent prices off a cliff and prompted official comment.

Overnight, it seemed China’s power bank industry had run out of juice.

It started with a series of high-profile incidents this year, where certain versions of the portable charging stations burst into flames on flights. In late June, the country’s aviation regulator issued an emergency ban, preventing passengers from taking the devices onto flights if they did not meet certain safety standards.

As piles of discarded battery packs grew at airports around the country, several manufacturers announced they would be recalling their products, declaring more than one million units prone to overheating with repeated use.

One leading firm – the Shenzhen-based Romoss – said over the weekend that it would suspend production for six months, and closed its stores on the country’s leading e-commerce platforms. The company’s future is uncertain.

Eventually, the problem was traced to its source: a battery cell supplier had relocated production to another factory, which had illegally substituted separator materials to cut costs.

The consequences of such a race to the bottom seem inevitable. While the average price of a Romoss power bank has dropped from 140 yuan to around 70 yuan (US$20 to US$10) in the past four years, the cost of a quality battery cell usually ranges from 40 yuan to 50 yuan. These shrinking profits, combined with fierce intra-industry competition, have forced many manufacturers into a position where they have no choice but to compromise quality.

This phenomenon is not unique to power banks. Price wars are being waged across all corners of the Chinese economy, threatening the country’s efforts to redefine its manufacturing sector as a provider of reliable goods. Intensifying trade tensions with the United States and other countries – who have alleged China is deliberately overproducing to flood their domestic markets with cheap items – are not helping matters.

The problem has become serious enough, economists and industrial insiders said, to serve as a test for Beijing’s regulatory capacity. Officials have vowed to contain the phenomenon, which they refer to as “involutionary competition”, and called for industries to practice self-discipline at several high-profile meetings.

“The intensifying competition stems primarily from weak domestic demand and relatively subdued external demand in the current global trade environment,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

“This has made survival increasingly difficult for suppliers, forcing them to aggressively outcompete industry peers.”

The trend correlates with a broader downturn in prices. After seeing negative growth for four months, the consumer price index – a major indicator of inflation or deflation – showed only a 0.1 per cent year-on-year increase in June, while the producer price index has registered year-on-year decline since October 2022, falling 3.6 per cent last month.

In May, major industrial firms in China reported 26.4 trillion yuan (US$3.68 trillion) in receivables – an increase of 9 per cent year on year – and an average collection cycle of 70.5 days, up 4.1 days from the same month last year. They also recorded 6.65 trillion yuan in inventory, a year-on-year rise of 3.5 per cent. However, their profits fell 9.1 per cent in May compared to the year before.

These troubling figures are pushing policymakers to prioritise supply-side solutions, Zhang said.

“Historically, addressing supply-side overcapacity has been challenging. Mergers and acquisitions may be part of the solution, but how they may happen – whether the process will be market-driven or government-guided – we still have to wait and see.”

At a July 1 gathering of the Central Financial and Economic Affairs Commission – the Communist Party body supervising economic matters – the commission recommended stronger government action to rein in excessive competition, with President Xi Jinping naming “disorderly low-price competition” as a regulatory priority.

Two days later, a closed-door meeting hosted by the Ministry of Industry and Information Technology (MIIT) offered more clues to the government’s approach. With the heads of China’s top solar panel manufacturers in attendance, the ministry indicated there would be severe penalties on below-cost sales, according to an anonymous participant cited by the 21st Century Business Herald.

“We have been required to report cost data to the authorities for several months,” a board secretary at a solar manufacturer based in Jiangsu province told the Post on condition of anonymity. “There will probably be stricter regulation in the future.”

Before the power bank incidents, the solar industry was the sector most prominently mired in ruthless competition, especially after emerging as a potential engine of economic growth. Prices across the entire supply chain have plummeted, with losses reported by smaller firms and industry leaders alike. The beleaguered sector has yet to reach a turning point.

Industry insiders said the MIIT meeting indicates the authorities believe a purely market-driven process to be too slow to solve the problem. The government may begin to take a heavier hand in the solar sector, they added, by enforcing market exits for inefficient players, imposing restrictions on expansion and pushing for mergers and acquisitions.

Beijing is no stranger to the forcible reduction of industrial bloat. In 2015, it launched a campaign under the guise of “supply-side structural reforms” to reduce capacity in the coal and steel industries, as well as independent oil refiners.

But current economic conditions may not allow a repeat performance, economists said. While effective in restructuring and streamlining those sectors, that tactic also significantly disrupted economic growth and employment in the areas where those industries proliferated.

A manager at one of China’s biggest solar panel manufacturers said a more appropriate approach would be to enforce strict quality control, rather than administrative intervention on sales prices.

“Different companies have different cost controls, adding in factors such as product quality and technological advancement,” said the manager, whose company is based in Zhejiang province. “So it is difficult to determine a uniform cost level.”

With easier access to financing and stronger pricing power, big companies are the major drivers of the country’s price wars, said Dan Wang, China director at Eurasia Group.

And as artificial intelligence (AI) improves and the penetration of e-commerce platforms deepens, some manufacturers have begun directly engaging in business-to-consumer sales, Wang said, instead of the traditional business model of selling to middlemen – a practice which also drives prices lower.

“The real source of deflation actually comes from large corporations,” she said. “Their access to cheap financing – banks see them as ‘safe borrowers’, so capital naturally flows to them in a weak economy – and even state subsidies allow them to maintain cutthroat pricing strategies indefinitely.”

That comports with the experience of Yu Xiquan, a purchasing manager at one of China’s biggest door manufacturers. Last year, the Chengdu-based firm cut the price of one of its entry-level products from 170 yuan to 130 yuan, and drove many smaller competitors out of business.

“Due to increased competition in the fireproof door market, larger enterprises have to resort to price cuts to squeeze out smaller competitors,” said Yu, whose company sold eight million doors last year. “Only by making these small businesses unsustainable – forcing them to sell equipment or shut down factories – can we secure market space.”

The firm’s primary strategy has been to enhance machine efficiency to expand production scale, then leveraging its market share to negotiate better prices with suppliers.

“For instance, where I used to place orders for 100 tons of steel at a time, I now order 150 tons,” Yu said. “Of course they’re willing to accommodate us.”

Though the price cut did boost sales in the short term, with the reduction in profit margin, no one in the market is making money, Yu said.

On July July 1, the same day as the Central Financial and Economic Affairs Commission meeting, the Communist Party’s theoretical journal Qiushi published a commentary piece criticising big companies for using their dominant positions to reduce costs through methods like delaying payments.

Authors cited media reports on new energy vehicle manufacturers whose average accounts receivable periods exceeded 170 days, with certain brands taking as long as 240 days or more to be repaid – far more than the 40.5-day average reported by German carmakers.

The journal also named “refund-only” policies by e-commerce platforms as a source of pressure for smaller merchants. These policies, which require sellers to refund customers without receiving a return, have been singled out for criticism by official organs since last year.

“These practices squeeze profit margins across the industrial chain’s upstream and downstream sectors, severely impacting enterprises’ capacity for reproduction and R&D investment while undermining the entire industry’s long-term development potential,” the Qiushi piece said.

Economists said the “involutionary competition” phenomenon stems from soft constraints on investment for big companies, with the detachment between spending and accountability breeding expansionary excesses and destructive price spirals in pursuit of market dominance.

The central government’s policy to build a “unified national market” is, in effect, an antitrust campaign, said Wang from Eurasia Group. It is intended to limit the authority of large corporations to set prices, which has squeezed downstream suppliers.

“The economic landscape increasingly favours big businesses, leaving small companies with almost no room to survive. So now the focus must be on regulating their pricing practices and ensuring they take on greater social responsibilities,” she said.

Su Yue, principal economist at the Economist Intelligence Unit, said that from a political perspective, Beijing sees “disorderly low-price competition” as a distortion of resource allocation that results in tremendous waste.

For example, Su added, some localities that wanted to pursue short-term economic growth ended up creating serious debt burdens, flooding costly subsidies into industries that later proved unprofitable.

“When the overall economy slows down, the goal is to achieve more efficient resource allocation and improve productivity so that China’s economic model can become more sustainable.”

Alfredo Montufar-Helu, a senior China-based adviser to C-suite executives, attributed the brutal industrial melee to a vicious cycle rooted in weak consumer confidence.

“If you are now in a situation where all of the competitors are trying to compete on the basis of price and consumers are not spending as much as before, you have heavy pressures on your cash flow and balance sheet,” he said.

“At the moment, I don’t see anything that will stop it.”