• Chinese investors likely to keep USMCA benefits despite China-US rivalry: Mexican envoy
• Can the China-backed SCO convince India and Pakistan to resolve their differences?
• Why US, China railway industries want collaboration fast-tracked
• Nvidia CEO meets China’s commerce minister to discuss AI cooperation, foreign investment
• China trims US Treasury stockpiles again, Panama Canal warning: SCMP daily highlights
• US consulate in China halts visa interviews over ‘unsafe’ heat, alleges air con delay
• China pledges more consumption incentives to service the service sector
• European Union sanctions 2 Chinese banks over aid to Russia
• Fans burn Labubu toys, fear they resemble demon Pazuzu, sparking lively debate in China
• Investors look to China’s Politburo meeting for signs of fighting industrial overcapacity
• China unveils world’s first humanoid robot that changes its own batteries
• China exposes foreign spy tactics to steal rare earths by post
• China shores up status as top shipbuilder with Shanghai port expansion
• China cuts US Treasury holdings for third month amid trade war, debt ceiling fears
• Amid South China Sea dispute, China warns students to beware safety risks in Philippines
• Hunky Chinese swimming coach has mothers flocking to enrol kids, some want to join classes
• How a heat-seeking beetle inspired infrared tech that could aid Chinese defence
• Chinese farmer turns inventor with homemade 7-metre submarine
• Nvidia CEO on US’ Chinese brain drain, Hong Kong DSE results: SCMP’s 7 highlights
• Economists call for reform as China’s famed marketisation index drops
• China unveils new drone that takes off and lands on its tail like a rocket
• ‘I felt lost’: mainland Chinese talent children on their struggles to settle in Hong Kong
• Japanese traveller anxiety soars amid China’s espionage arrests
• US House committee chair warns Panama about Chinese influence over Panama Canal
• Fentanyl likely on US-China trade agenda after long absence: analysts

Chinese investors likely to keep USMCA benefits despite China-US rivalry: Mexican envoy

https://www.scmp.com/economy/global-economy/article/3318772/chinese-investors-likely-keep-usmca-benefits-despite-china-us-rivalry-mexican-envoy?utm_source=rss_feed

Chinese-funded factories in Mexico are “very unlikely” to be excluded from preferential treatment under the United States-Mexico-Canada Agreement (USMCA) despite the free trade deal being up for review next year, a Mexican envoy said on Thursday.

“There is no indication that there are going to be restrictions targeting Chinese companies,” David Trujillo, deputy commercial counsellor at the Mexican Embassy in China, told the Post on the sidelines of the China International Supply Chain Expo.

Tariffs imposed during US President Donald Trump’s first term prompted many Chinese companies to relocate, with Mexico becoming a popular destination for overseas investment. The USMCA allows imports from the country to enter the US market tax-free as long as a certain share of the goods is produced in North America.

But with US-China trade tensions escalating since Trump’s return to office, questions have arisen over whether Chinese firms in Mexico will retain these benefits – especially as Washington’s recent tariffs on steel and aluminium imports have already been seen as undermining the free trade agreement.

Beijing has also warned other countries against reaching trade deals with the US that come at China’s expense.

However, Trujillo said revisions to the USMCA would likely focus on tightening rules-of-origin requirements – meaning companies would need to make more of their product locally to qualify – rather than introducing restrictions on specific countries.

“For key industries like the automotive industry, the requirement is now 75 per cent,” he added. “It might be higher.”

“What this means is that companies not only from China, but from other countries that want to produce in North America, will need to have more of their production localised.”

Mexico, along with Canada, was spared from Trump’s “reciprocal tariffs” imposed on most other nations – though the two countries still face 25 per cent duties on goods that do not comply with the USMCA, as well as 25 per cent levies on automobile imports.

As a result, most US imports from Mexico that comply with the USMCA continue to enter the American market duty-free.

However, Trump announced 30 per cent tariffs against Mexico last week, starting August 1 – justifying the measures on the grounds that the country had not done enough to stop fentanyl trafficking and illegal immigration.

The tariffs have not yet taken effect and discussions between the US and Mexican governments to tackle the issue are ongoing, Trujillo said.

“We are working together with the government of the United States to find a solution that can be mutually beneficial.”

With Mexico exempt from Washington’s “reciprocal tariffs”, investing in the country has become increasingly appealing for Chinese companies, Trujillo said. In contrast, the US has announced heavy duties on other popular outbound destinations for Chinese firms, such as those in Southeast Asia.

“We’re going to see more regional production in North America. So companies that usually invest in other countries in Asia, to export to the US, are going to face even harder challenges,” he said.

“For us, we’re going to continue integrating [into the North American market]. Every relationship between neighbours is challenging, but we have these mechanisms to work together to find solutions.”

Chinese electric vehicle giant BYD has recently scrapped plans to build a manufacturing plant in Mexico under pressure from both the Chinese and Mexican governments, according to industry sources and other people familiar with the matter. A delegation from the company toured several states in the Latin American country last year in search of suitable land.

Can the China-backed SCO convince India and Pakistan to resolve their differences?

https://www.scmp.com/news/china/diplomacy/article/3318723/can-china-backed-sco-convince-india-and-pakistan-resolve-their-differences?utm_source=rss_feed

The meeting in the eastern Chinese city of Qingdao last month was the first time that cabinet ministers from Pakistan and India had been in the same room since a deadly conflict in early May.

The defence ministers from the two neighbours were in China under the umbrella of the Shanghai Cooperation Organisation (SCO), a regional political, security and economic group. This week it was the turn of SCO foreign ministers, who met in the northern Chinese port city of Tianjin.

It, too, was a rare chance for Indian and Pakistani officials to come together – if only in a group setting.

The two countries have been engaged in an uneasy truce since a terrorist attack in the Indian-administered resort town of Kashmir killed 26 tourists escalated into several days of heavy cross-border military fire. New Delhi blamed Islamabad-backed militants for the attack, accusations Pakistan denied.

While there was no apparent bilateral engagement this week, the foreign ministers of both countries used the SCO platform to state their claims on the conflict.

Indian Foreign Minister Subrahmanyam Jaishankar cited the April attack as “a graphic example of terrorism”, pointing the finger at Islamabad.

Ishaq Dar, Pakistan’s foreign minister, urged restraint and called for differences to be “resolved through dialogue and diplomacy, instead of conflict and coercion”.

China has ambitions to use platforms such as the SCO to play a bigger role in resolving conflicts in the Global South.

But, observers say, there is little prospect that the bloc can resolve their the neighbours’ decades-old differences, not least because of Beijing’s bond with Islamabad.

Nevertheless, the SCO remains one of the few international organisations that can count both India and Pakistan as full members, alongside major powers such as China and Russia.

And that is a plus, according to Lin Minwang, a professor at Fudan University in Shanghai.

“The SCO does indeed help improve India-Pakistan relations, at least by providing opportunities for face-to-face meetings,” Lin said, adding that the bloc offered such a platform during previous conflicts between the two countries.

But Amit Ranjan, a research fellow at the National University of Singapore, said New Delhi had little interest in resolving the Kashmir issue through a multilateral platform, particularly one involving China.

“India believes that this is a bilateral issue that has to be resolved bilaterally,” Ranjan said, adding that the two sides are “not ready to talk at present”.

Indian Prime Minister Narendra Modi made that point clear to US President Donald Trump on the sidelines of the Group of Seven summit in Canada last month.

At the meeting, Modi rejected Trump’s mediation offer on the Kashmir issue, saying Delhi would not allow any third-party involvement.

Under those circumstances, a Chinese or SCO-backed mediation effort would be even more difficult to pull off, Ranjan said. “If India goes for mediation, it will be better for India to go with the US mediation than the Chinese, because they don’t have good ties.”

Abdul Basit, an associate research fellow at the S. Rajaratnam School of International Studies, agrees.

“For mediation … trust of two conflicting parties in the mediator is critical. I don’t think India trusts China in this role. And Pakistan’s close alliance with China makes it partisan,” Basit said.

Beijing and Delhi also have their own disagreements. Despite some signs of improvement, ties between India and China have languished since their deadly border clashes in 2020.

Meanwhile, Beijing has continued to deepen its strategic partnership with Pakistan – a relationship that remains a key priority for China. During the conflict in May, Pakistan deployed several advanced Chinese-made weapons against India, further straining Sino-Indian relations.

Lin, from Fudan University, noted that India was also cautious about allowing China greater influence in leading the Global South.

“India aims to compete with China, so if China takes on a mediator role, it would elevate Beijing’s status above Delhi,” he said.

Since 2023, India has sought to position itself as the voice of the Global South by hosting the Voice of the Global South summits, involving more than 100 non-G20 countries, excluding China from the platform as Beijing is a G20 country.

Basit, at the S. Rajaratnam School of International Studies, added that India and Pakistan’s engagement within the SCO was also waning, further diminishing prospects for their regional cooperation.

One of the clearest signs came last month, when India reportedly declined to sign the joint communique at the SCO defence ministers’ meeting, citing the omission of the Kashmir terror attack from the document.

“You can see how deep-seated the differences are,” Basit said. “I don’t see these ties improving in the foreseeable future, but that doesn’t mean there will be a complete freeze in relations.”

Why US, China railway industries want collaboration fast-tracked

https://www.scmp.com/economy/global-economy/article/3318786/why-us-china-railway-industries-want-collaboration-fast-tracked?utm_source=rss_feed

Rail-transport companies from China and the US remain committed to strengthening cooperation – including on projects in third-country markets – even as a trade rivalry between the two largest economies chugs along.

With the US being a long-time leader in freight rail and urban transit, and China having emerged as a global powerhouse in high-speed rail, the two sides could deepen cooperation in the rail-transport sector, said Everett Wakai, minister counsellor for commercial affairs at the US embassy in Beijing.

He spoke during the US-China Rail Transit Industry Roundtable on Friday at the China International Supply Chain Expo. Representatives from some US companies with ties to the rail sector were there. A key talking point was the potential for supply-chain cooperation.

Guan Jiaxin, vice-president of China Civil Engineering Construction Corporation, said the state-owned giant cooperates extensively with US companies when it comes to equipment.

“Major projects and markets led by our company are widely using construction machinery from Caterpillar and generators from Cummins,” Guan said during the round-table chat. Caterpillar and Cummins were two of the American firms in attendance.

“We look forward to exploring more cooperation opportunities with the US in overseas projects investment, building and operating, such as joint financing, design and consulting … in markets where US firms have a strong presence, such as Latin America, the Middle East, Africa and Europe,” he said.

For years, American makers of rail equipment have supplied China’s rail projects, both within the country and overseas – mainly those involved in the Belt and Road Initiative, including urban rail transit systems such as metros and conventional railway projects, company representatives said at the event.

Cui Yao, president of Wabtec (China), said revenue has grown in the past two decades from almost zero to an average of US$500 million per year, with US$300 million from sales in the Chinese market and US$200 million from products manufactured in China and exported to overseas markets. He described this as a “huge success”.

Wabtec’s local suppliers also benefit from the company’s – the US company, based in Pennsylvania purchases US$400 million worth of goods annually from Chinese suppliers, and it expects this year to be no different.

On the sidelines of the event, another US company representative said: “Our business is not impacted by the tariff, as supplies to China’s projects in third countries are not subject to the US-China tariffs.”

Speaking on condition of anonymity to comply with corporate policy, he added that supplies to China’s local projects had also not yet been interrupted, thanks to the company’s high level of localisation, including the establishment of numerous joint ventures with state-owned enterprises in China.

But he cautioned that even as Chinese rail-equipment manufacturers may find some opportunities in the US metro market, they would face virtually no openings in the railway sector, as it is dominated by local players.

On Wednesday, the US government announced the termination of US$4 billion in federal funding for a high-speed rail project in California, citing an “inability to complete” the goals it set out to achieve. The long-delayed project, which began in 2009, aimed to build a train capable of travelling between Los Angeles and San Francisco in under three hours.

State officials said the “illegal” move would be challenged.

Nvidia CEO meets China’s commerce minister to discuss AI cooperation, foreign investment

https://www.scmp.com/tech/big-tech/article/3318801/nvidia-ceo-meets-chinas-commerce-minister-discuss-ai-cooperation-foreign-investment?utm_source=rss_feed

Chinese Commerce Minister Wang Wentao met Nvidia CEO Jensen Huang on Thursday to discuss artificial intelligence (AI) cooperation, days after the chipmaker said it was resuming sales of its H20 chips to the country.

Wang said China’s policies for attracting foreign investment remained unchanged, and its doors would only open wider, according to a statement issued by the ministry on Friday. Highlighting the country’s vast market, Wang encouraged multinational firms, including Nvidia, to continue providing high-quality and reliable products and services to Chinese customers.

Huang said the Chinese market was attractive and affirmed Nvidia’s commitment to deepening collaboration with Chinese partners in the AI sector, according to the statement.

On Monday, Nvidia said it was filing applications to resume sales of its H20 chips in China after the US government assured the company that licences would be granted. Those chips have been subject to Washington’s export restrictions since April.

The company also planned to introduce a new RTX Pro graphics processing unit that fully complied with regulatory requirements.

Huang has emerged as an unofficial US emissary amid geopolitical tensions with China. “This month, Nvidia founder and CEO Jensen Huang promoted AI in both Washington and Beijing,” the California-based company said in its statement.

Still, Huang noted that the recovery of the supply chain would take time: It currently took Nvidia about nine months from placing wafer orders to delivering finished computing products, he told Chinese media on Wednesday.

On Friday, a representative for China’s Ministry of Commerce urged the US to “abandon its zero-sum mentality and continue removing unreasonable trade restrictions against China”.

The representative added that following bilateral talks last month, the two parties were maintaining close communication to finalise and implement details of a trade framework.

“Cooperation for mutual benefit between China and the US is the right path; suppression and containment lead nowhere,” the person said.

During Huang’s visit to China this week – his third this year – he expressed great enthusiasm for the Chinese AI industry.

Speaking at the China International Supply Chain Expo in Beijing on Wednesday, he opened his speech in Mandarin, calling Chinese open-source AI a “catalyst for global progress” that offered “every country and industry a chance to join the AI revolution”.

Throughout his trip, Huang acknowledged China’s AI advancements, citing models from Alibaba Group Holding, as well as start-ups DeepSeek and Moonshot AI. He praised dozens of Chinese tech companies, including Huawei Technologies, Baidu, Tencent Holdings, NetEase, miHoYo, and Game Science. Alibaba owns the Post.

Huang also met prominent Chinese entrepreneurs and AI experts, including Xiaomi founder Lei Jun, MiniMax CEO Yan Junjie, and Alibaba Cloud’s Wang Jian.

Nvidia’s US stock rose more than 5.6 per cent to US$173 between Monday and Thursday, buoyed by the resumption of H20 chip sales in China. Its market capitalisation surpassed US$4 trillion last week, making it the world’s first company to reach this milestone.

China trims US Treasury stockpiles again, Panama Canal warning: SCMP daily highlights

https://www.scmp.com/news/china/article/3318737/china-trims-us-treasury-stockpiles-again-panama-canal-warning-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 .

China trimmed its US Treasury holdings for a third straight month in May, amid escalating trade tensions with Washington and mounting concerns over a sweeping tax and spending bill.

The trafficking of materials to make the drug fentanyl – the issue cited by the US in its initial tariff escalation against China in March – is set to be back in focus for future talks, analysts said, after two previous rounds did not appear to broach the subject.

Chinese economists have called for more pro-market reforms to tackle economic imbalances and vicious intra-industry competition, as a new report has revealed a decline in a major index tracking the country’s marketisation.

The head of a US congressional committee on Thursday, warned Panama over Chinese influence on the Panama Canal, following reports that leading Chinese state-owned conglomerates are bidding for port concessions there now for sale by Hong Kong-based CK Hutchison Holdings.

After spending years studying advanced infrared sensors, a group of Chinese researchers has produced a device that could be used to build a surveillance network more powerful and effective than the proposed US missile defence system known as the “Golden Dome”.

China has unveiled a tail-sitter drone – which takes off and lands on its tail like a rocket – during a disaster rescue drill, according to state media.

On a quiet river in central China’s Anhui province, villagers in Hanshan county stopped to stare as a sleek black shape sliced through the water with a low mechanical growl. It was not a military test or an industrial prototype. It was a home-made submarine – designed, built, and piloted by Zhang Shengwu, a 60-year-old farmer with no engineering degree and no blueprint to follow.

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US consulate in China halts visa interviews over ‘unsafe’ heat, alleges air con delay

https://www.scmp.com/news/china/diplomacy/article/3318800/us-consulate-china-halts-visa-interviews-over-unsafe-heat-alleges-air-con-delay?utm_source=rss_feed

The US consulate in the central Chinese city of Wuhan has suspended all visa interviews, citing “unsafe” indoor temperatures it blamed on building management.

In a public notice posted on its official social media account on Friday, the consulate said temperatures in its interview waiting area exceeded 33 degrees Celsius (91 degrees Fahrenheit) in the morning, as it accused the building management of “routinely delaying the activation of air conditioning”.

It also criticised “extra security procedures” that required visa applicants to wait in the sun for extended periods.

The suspension comes during peak US student visa season in China, with about 200,000 processed annually by the Wuhan mission alone.

“We are working with the building management to improve conditions,” the consulate said. “We will resume visa services as soon as we can ensure the health and safety of our applicants and staff.”

It apologised for the inconvenience and said cancelled appointments could be rescheduled through the visa application system.

Visa services at other US missions across China remain unaffected, although the earliest available slots typically involve a wait of several weeks.

Consular services for US citizens will continue as scheduled, the Wuhan consulate said.

The mission reopened only last year after pandemic-era closures, having relocated to the sixth floor of the 68-storey Minsheng Bank Building in central Wuhan. Building supervising firm Wuhan Hongbo Property Management Co Ltd occupies offices one floor above the consulate.

The South China Morning Post has contacted both the US embassy in Beijing and Wuhan Hongbo Property Management for comment.

The consulate’s decision comes amid a severe summer heatwave in Wuhan, with multiple high-temperature alerts issued for this month forecasting peaks of above 40 degrees.

Earlier in the week, the consulate had warned about health risks posed by the rising temperatures, saying it had requested building management to activate the air conditioning earlier, offer more shaded waiting areas and streamline entry procedures.

On Thursday, the consulate opened one hour late to mitigate the impact of the alleged delayed air conditioning and warned of possible appointment rescheduling. In a social media post announcing the revised opening time, it also cautioned that services might be suspended.

The post sparked heated debate on Chinese social media, drawing over 20,000 reactions and thousands of angry comments.

Some users viewed the consulate’s public criticism as an attempt to stir local division, with one writing, “This is just trying to provoke conflict among Chinese people – the building management did nothing wrong.”

Others accused the consulate of evading payment obligations. “Does the US consulate even pay property management fees? Or is it using the building’s public areas as its waiting space to avoid air conditioning charges?” read one widely shared comment.

One local internet user noted that Wuhan’s premium office buildings often delayed the activation of centralised air conditioning systems until outside temperatures crossed 30 degrees to save costs.

Building brochures say air conditioning fees are included in tenants’ service charges, but lease clauses reportedly allow landlords to delay activation under “commercially reasonable conditions”, a loophole the US consulate says has resulted in “routine delays”.

Some social media questioned the consulate’s continued reliance on in-person systems. “If you truly care about applicants, why not switch to online visa processing instead of making people queue in the heat?” one user wrote.

Meanwhile, frustration deepened over the lack of notice for cancelled appointments. “They said just a one-hour delay, but then cancelled without warning,” a purported applicant complained.

Others demanded compensation and clearer alternatives. “Some students lost their third-time appointment slot – what about the losses for airfare and hotel bookings?” ran one comment. “Where’s the so-called respect for contract obligations?”

Another user said that all appointments had been cancelled for next week and called for clarification. “Please inform us before Wednesday if appointments after [July 25] will proceed. Students are racing against time before the semester starts – we need alternative plans.”

Under China’s heatstroke prevention regulations issued in 2012, employers must halt outdoor work if temperatures exceed 40 degrees. They must also pay additional allowances when indoor spaces cannot be cooled below 33 degrees.

China pledges more consumption incentives to service the service sector

https://www.scmp.com/economy/policy/article/3318779/china-pledges-more-consumption-incentives-service-service-sector?utm_source=rss_feed

China has vowed to continue cutting red tape and attracting foreign investment to boost service consumption over the next five years, as Beijing turns to domestic demand for a reliable source of economic growth in an uncertain environment for international trade.

There is a “shortage of high-quality service on the supply side” even as service consumption grows at a faster rate than that of goods, Minister of Commerce Wang Wentao said at a press conference in Beijing on Friday.

To address the shortage, China will “reduce some restrictive measures and enrich service supply” from 2026 to 2030, especially in sectors such as healthcare and elderly care, Wang said.

Wang’s comments came as the world’s second-largest economy attempts to drive up domestic consumption to compensate for a trade picture complicated by a tense, multi-front trade war launched by US President Donald Trump earlier this year.

“China-US economic and trade relations have weathered many storms, and both sides remain important economic and trade partners,” Wang said when asked about the topic. “Facts prove that ‘decoupling’ is impossible.”

In 2024, the combined goods imports of mainland China and Hong Kong accounted for about 13.3 per cent of global imports, the minister noted. This made China the world’s second-largest import market, nearly on par with the US and its 13.6 per cent share.

Meanwhile, how to tap China’s latent consumption potential has become a hot topic among academia and policy circles, and is all but certain to be a plank in the country’s next five-year plan.

Despite the success of a large-scale trade-in programme and other incentives, year-on-year growth in retail sales slowed to 4.8 per cent last month, down from the 6.4 per cent observed in May.

However, consumption contributed to 52.3 per cent of the country’s gross domestic product growth in the second quarter of 2025, government data showed. This was an improvement on the 51.7 per cent recorded a quarter earlier.

Relatively unfettered access has already been granted to foreign investors in certain sectors, such as medicine, telecommunications and education.

Service consumption could be an area of focus for government support in the coming years, Wang said.

China’s service retail sales rose 6.2 per cent year-on-year in 2024, growing three percentage points faster than goods sales in the same period and accounting for 63 per cent of overall growth in per-capita consumption expenditures.

But supply bottlenecks, hurdles to market access and excess regulatory oversight – frequent complaints among private firms and overseas investors – have constrained the sector’s full potential.

“The main contradiction in this stage of service consumption is a partial shortage on the supply side; more precisely, a shortage of high-quality service supply,” Wang said at the conference.

Sheng Songcheng, former head of the central bank’s statistics department, said China should encourage more investment from foreign service providers in areas like education and healthcare.

At present, many Chinese nationals travel abroad to access high-end services, representing a significant amount of consumption loss. If consumers were able to employ these services at home, Sheng wrote earlier this month in financial news outlet Yicai, it would provide a boost to the domestic economy.

In an article published on Tuesday in Qiushi – the top theoretical journal of the ruling Communist Party – Wang pledged to accelerate the introduction of new policies to promote service consumption, as well as formulate stronger channels for fiscal, tax and financial support.

The growth of service consumption is “contingent on further opening up”, he wrote, as foreign investments could help “boost the supply of high-quality services”.

The commerce minister underscored this commitment during a meeting with Nvidia co-founder and CEO Jensen Huang on Friday, expressing hopes that multinational companies like the chipmaker would provide their products and services in the Chinese market.

“China’s policy of attracting foreign investment will not change and its doors will only open wider,” he said in the meeting, according to a statement from the ministry.

Huang said that Nvidia is willing to deepen cooperation with Chinese partners in the field of artificial intelligence.

Earlier this month, the National Development and Reform Commission – China’s top economic planner – and other ministries jointly issued a notice to encourage foreign enterprises to reinvest in China, offering flexible industrial land leases to cut set-up costs and tax incentives.

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European Union sanctions 2 Chinese banks over aid to Russia

https://www.scmp.com/news/china/diplomacy/article/3318793/european-union-sanctions-2-chinese-banks-over-aid-russia?utm_source=rss_feed

The European Union has sanctioned two small Chinese banks in its latest package of measures designed to hobble Russia’s war machine, despite a warning from Beijing to expect consequences.

Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank, two regional lenders from cities close to China’s border with Russia, were blacklisted in the 18th package of sanctions agreed on Friday morning, diplomatic sources confirmed.

The development has been weeks in the making, with Slovakia withdrawing a long-standing veto to allow the package to pass. The central European country had been blocking the move over an EU plan to stop gas imports from Russia beginning in 2028.

The move could prompt retaliation from China, which has lobbied intensely behind the scenes to get the banks removed from the package. It also comes less than a week out from a high-stakes summit in Beijing.

During a meeting with the EU’s top diplomat, Kaja Kallas, this month, Chinese Foreign Minister Wang Yi warned her “three or four times” that there would be a response to the banks’ inclusion, according to sources familiar with the exchange.

In Brussels, Chinese diplomats – including ambassador Cai Run – have held “frank exchanges” with EU officials to try to prevent the listing, according to people involved.

While Beijing may have failed in stopping the banks from being blacklisted, they appear to have been successful in watering down the terms. According to two diplomatic sources, the European Commission briefed ambassadors on Friday that there was a commitment to review the lenders’ listings in six months. Should the banks prove that they have stopped enabling support for the Russian military, they could be taken off the list.

The package has yet to be published, but the Financial Times previously reported that the banks had “used crypto transactions to facilitate the import of goods covered by existing EU sanctions”.

The EU has blacklisted dozens of Chinese companies since the start of the war with Ukraine, accusing the firms of funnelling goods on Brussels’ sanctions list to Russian buyers with military links. This is the first time, however, that banks have been sanctioned.

China has pushed back strongly against previous listings and rejected suggestions that it should be subject to Western sanctions. It insists that it has “normal” trading relations with Russia, and denies providing lethal weaponry to any side in the conflict.

The issue will be revived at next week’s EU-China summit, when European leaders intend to push China strongly on the economic lifeline they think it is providing to Russia.

European Commission President Ursula von der Leyen and European Council President Antonio Costa will fly to Japan on Sunday for a summit in Tokyo on Wednesday, followed by the EU-China summit on Thursday.

They will meet Chinese President Xi Jinping in the morning and Premier Li Qiang in the afternoon.

“China, of course, talks to us often about core issues, well this is a core issue for Europe. It’s an issue fundamental to European security,” said a senior EU official involved in the planning.

“It’s something that we will raise with China. We will underline that, of course, it’s important in our relationship, and we know that Chinese companies supply around 80 per cent of the dual-use goods to the war. We’re not naïve.”

Another EU official said the two sides were still discussing a potential joint statement on climate, adding that the timing was tight and it might not be finalised.

Going into the summit, expectations in Brussels are modest.

“The European deliverable is a substantive, open, direct, good, constructive conversation between the two of us on every aspect of this relationship,” a third official said.

“It could also be a joint statement on climate where we really think we can do a lot more with with China, especially in the run up to COP31, but a good conversation, a good exchange on all the subjects that are of interest and of concern at the highest level in China – that is a good deliverable.”

Fans burn Labubu toys, fear they resemble demon Pazuzu, sparking lively debate in China

https://www.scmp.com/news/people-culture/trending-china/article/3318729/fans-burn-labubu-toys-fear-they-resemble-demon-pazuzu-sparking-lively-debate-china?utm_source=rss_feed

A conspiracy theory speculating that the popular Chinese plush toy Labubu is possessed by a demon has gone viral, leading some fans to burn their dolls.

Labubu is a series of cute, fuzzy dolls produced by Chinese company Pop Mart and designed by Hong Kong artist Kasing Lung. The character is distinguished by its nine pointy teeth, which give it a mischievous appearance.

Recently, it has been this unique look that inspired the conspiracy theory. Some users on non-Chinese social media platforms linked Labubu with Pazuzu, a Mesopotamian demon traced back to folklore from the first millennium BCE.

Pazuzu is depicted as having the face of a lion or a dog and exceptionally bulging eyes. A circulating cartoon drawing shows the demon smiling, its pointy teeth on display, resembling Labubu.

Some individuals have warned about the potential risk of possession by the demon if they keep their Labubu dolls. One person from overseas even burned their doll and shared the video online.

Lung, Labubu’s creator, previously explained that the character was inspired by ancient European elf legends.

He first introduced Labubu in his illustrations a decade ago as part of his The Monsters family, which also includes characters like Tycoco and Zimomo.

Lung began collaborating with Pop Mart in 2019. According to the company’s description, Labubu is a kind-hearted character despite its mischievous appearance.

It is reported that Pop Mart has produced over 300 variations of The Monsters toys in different sizes, colours, and outfits.

They are sold in blind boxes, where customers discover which variation they have bought only upon opening the box.

Labubu gained worldwide popularity after Lisa, a member of the K-pop group Blackpink, expressed her love for it.

The character has become so popular that its products are frequently sold out. An average Labubu blind box, priced at 99 yuan (US$14), sells for hundreds of yuan in the second-hand market. The hidden version, which is extremely rare in a series, can fetch over 2,000 yuan.

Pop Mart reported that its global revenue in the first half of this year increased by over 200 per cent year-on-year, totalling 13.7 billion yuan (US$1.9 billion) in six months, according to the Chinese news outlet The Paper.

The demon conspiracy has also attracted attention on Chinese social media.

“I have always found them scary,” one online observer agreed with the theory.

Another commented: “I also don’t like its appearance, but I heard that buying Labubu could bring fortune, and it did bring me luck as its price has soared.”

“I think Labubu is cute. We can’t expect it to look like humans because they are elves,” a third user remarked.

Investors look to China’s Politburo meeting for signs of fighting industrial overcapacity

https://www.scmp.com/business/china-business/article/3318765/investors-look-chinas-politburo-meeting-signs-fighting-industrial-overcapacity?utm_source=rss_feed

Equity investors are shifting their attention to China’s coming Politburo meeting for any clues on whether top leaders will introduce measures to fight back against overcapacity in some of the nation’s emerging industries.

All eyes will be on how the gathered leaders address hyper-competition in industries including solar, lithium batteries, electric vehicles (EVs) and e-commerce. The summit was expected to be convened later this month and the 24 members of the Communist Party’s decision-making Politburo were expected to attend. Excessive output in these sectors has been blamed for exacerbating China’s deflation and the issue has been highlighted at several high-level meetings as “involution”, a term referring to a self-defeating cycle of excessive competition.

While expectations are low that the Politburo conclave will yield sweeping stimulus measures that would be a boon for equities, investors were hoping for a repeat of an anti-overcapacity campaign in 2016 that took on bloat among coal, steel and commodity producers. On Thursday, HSBC said the solar industry would benefit most from an anti-involution drive because the need for a revamp was urgent due to low utilisation and nagging losses at leading firms.

“There’s no obvious inflection point for the macroeconomy and [related] policies,” said Huang Hongwei, an analyst at Chasing Securities. “But if the policy of anti-involution is effectively implemented, it will improve profitability.”

The Politburo meeting comes as the CSI 300 Index of yuan-denominated stocks recently rose to its highest point this year and Hong Kong’s Hang Seng Index touched a three-year zenith. The market’s resilience was supported by faster-than-expected economic growth in the second quarter and state purchases of stocks. Still, investment banks including Nomura Holdings and Morgan Stanley have warned of slowing growth in the second half due to the uncertainty created by tariffs and deflationary pressure.

In a sign of how overcapacity has been a burden on China’s economy, producer prices – a gauge of factory-gate prices for industrial products – dropped 3.6 per cent in June, the most substantial decline in more than two years. This gauge has dropped for 33 straight months.

Prices of silicon wafers and panels, critical components in the photovoltaic industry, have slumped nearly 90 per cent since 2023, while profits in the automotive industry declined 12 per cent in the first five months of 2025, with companies like BYD rolling out rounds of price cuts to retain market share, Soochow Securities said.

On the earnings front, Longi Green Energy Technology, the nation’s largest producer of solar wafers, said it expected to post a loss of as much as 2.8 billion yuan (US$389.9 million) in the first half, citing falling product prices and intense industry competition.

These emerging industries are bogged down by irrational price cuts and local-government protectionism after years of overinvestments meant to meet rising demand from overseas, according to Soochow and Ping An Securities.

For insight into what was going on today, investors should look back to a government-led drive to weed out unnecessary output in the coal, steel and cement industries in 2016, Ping An Securities said. Some stocks in those industries rose for two years after the government’s efforts reversed declines in commodity prices and improved profits at the listed companies, it said.

The 2016 effort was more focused on the supply side, driven mainly by government orders, said Steven Sun, the head of research at HSBC Qianhai Securities, in a report on Thursday. Today, the anti-involution push could tilt more towards market-based measures, like letting industry associations self-regulate.

The brokerage recommended photovoltaic stocks including Longi Green, Tongwei, Hangzhou First Applied Material, lithium-battery equipment maker Wuxi Lead Intelligence and Bank of Jiangsu, saying they would benefit from capacity reduction.

Even though the Politburo meeting would set the tone for the anti-involution drive, the nation’s economic planning body could still take the lead in the campaign, and industry associations would serve in complementary roles, according to Minsheng Securities.

“Anti-involution has entered a new stage,” said Tao Chuan, an analyst at the brokerage.

China unveils world’s first humanoid robot that changes its own batteries

https://www.scmp.com/economy/china-economy/article/3318756/china-unveils-worlds-first-humanoid-robot-changes-its-own-batteries?utm_source=rss_feed

China’s robotics industry chalked up another world first on Thursday, as a company based in Shenzhen announced it had developed a new humanoid robot that can change its own batteries.

A demonstration video released on Thursday shows the Walker S2 robot, developed by UBTech Robotics, walking over to a charging station, removing a depleted battery from its chest, inserting it into a charging dock, and then installing a fresh battery before wandering off.

The feature means the robot can – in theory, at least – work non-stop 24 hours a day without human assistance, according to the company.

China’s humanoid robot industry has made rapid strides in recent years, with the Chinese government identifying robotics and artificial intelligence as crucial strategic industries and providing generous policy support.

A Moody’s report on Thursday noted that China was “emerging as a robotics powerhouse” due to its unique ability to combine advanced AI with low-cost manufacturing.

More than half of the listed companies worldwide working on humanoid robots are Chinese, according to a Morgan Stanley report released in February, and the country’s robotics start-ups also attract a large share of global venture capital funding.

UBTech – a Shenzhen-based company that became the first humanoid robot maker to list on the Hong Kong stock exchange in 2023 – is among a clutch of Chinese companies racing to bring their humanoid models to the mass market.

Six Chinese humanoid robot firms have set targets of manufacturing more than 1,000 units this year – keeping them roughly on track with US market leader Tesla, which is also aiming to mass produce several thousand Optimus robots per year.

UBTech has not set such a production goal, but its Walker robots have already been tested on production lines at factories operated by Chinese electric car makers BYD, Nio and Zeekr, according to a report by CNEVPost.

The Walker S2 is designed to be extra productive, with its dual-battery system and battery-swapping ability allowing it to work autonomously with minimal human supervision, state-run media outlet Nanfang Daily reported.

The robot is able to monitor its power levels and switch between batteries as needed. If one battery runs low, the system can switch to the other and continue working without interruptions, the report said.

It can reportedly complete the battery-swapping process in just three minutes, with the batteries designed to plug in like USB sticks, making them easy to insert and remove.

UBTech’s home city of Shenzhen has set ambitious targets to become a leader in robotics, with local authorities focused on accelerating the adoption of robotics in a wide range of industries. The southern tech hub is already home to more than 1,600 robotics companies.

On Monday, the city claimed another global first as a local start-up deployed a team of delivery robots to restock 7-Eleven stores located inside the city’s subway stations. The project is reportedly the first of its kind to feature robots riding subway trains to deliver goods.

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China exposes foreign spy tactics to steal rare earths by post

https://www.scmp.com/news/china/politics/article/3318733/china-exposes-foreign-spy-tactics-steal-rare-earths-post?utm_source=rss_feed

Foreign spies have been using China’s postal system to “steal” rare earths, the country’s top security agency has warned, adding that it is cracking down on the smuggling channels.

In a statement posted on its social media account on Friday, the Ministry of State Security cited various tactics used by an unnamed country that it said could not produce its own rare metals and was stealing the minerals to shore up its own supplies.

The ministry said it had discovered that a foreign contractor had been shipping the restricted materials by packaging them with fake labels, falsifying the product names or sending the material through express delivery packages. It had also routed the packages through intermediary countries before sending them on to their final destinations, a method known as transhipping.

The ministry and other departments had since cut off the smuggling, “effectively safeguarding China’s resources and national security”, the statement said.

Other spies have bypassed China’s export controls by declaring high-purity rare earths, such as dysprosium and terbium, as low-value products like nickel powder.

The ministry said rare earth materials were also being stashed in mannequins or mixed with ceramic tile material so they could be smuggled out of the country.

“Rare earth-related items are a strategic national resource and can be applied to military and civilian use,” the ministry said, adding that it urged the public to come forward with tips.

Previously, the ministry has warned of foreign spies using various strategies to steal China’s state secrets, including breaching security measures with artificial intelligence, using emails to hack private postboxes, or posing as online dates or academic consultants to recruit college students for “high-paying part-time jobs”.

China dominates the global supply chain for critical minerals, giving it a strategic edge over countries such as the United States – and their defence sectors – which also depend on critical minerals for advanced weapon systems.

According to industry reports, China mines about 70 per cent of global rare earth elements and accounts for more than 90 per cent of global capacity for separating and processing heavy rare earths.

In June, China’s rare earth exports surged to their highest level since 2009, reaching 7,742 tonnes, a 60 per cent increase over the same period last year.

China has strict export controls and has used its dominance in critical mineral production and refining for leverage in trade negotiations, as well as to target the defence industries of the US and its allies.

In 2023, Beijing imposed new controls that require exporters to seek permission to ship eight gallium-related and six germanium-related products abroad. In December, the Ministry of Commerce imposed export bans on gallium, germanium and antimony to any US military end-users.

In April, Beijing imposed special export licence restrictions on seven categories of medium and heavy rare earth elements – samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium – and their magnets as well as other finished products.

China shores up status as top shipbuilder with Shanghai port expansion

https://www.scmp.com/economy/china-economy/article/3318744/china-shores-status-top-shipbuilder-shanghai-port-expansion?utm_source=rss_feed

Already the world’s busiest shipping port, China’s financial centre Shanghai is now positioning itself as a world-class shipbuilding hub, with an eye on high-value models such as those designed to transport liquefied natural gas (LNG) and containers.

The Shanghai municipal government has unveiled plans to augment its shipyards on Changxing Island, situated across the southern mouth of the Yangtze River and near the Yangshan Deep-Water Port. The Yangshan facility, a component of the Port of Shanghai, holds sea trials for large vessels.

Hi-tech ships such as LNG carriers and dual-fuel container ships are set to make up 80 per cent of the industrial base’s output, according to a document released on Wednesday.

The cluster will reach an industrial scale of over 120 billion yuan (US$16.71 billion) within three years, the government estimated.

“[The goal is to] build a world-class hub for high-end marine equipment manufacturing, with globally leading capabilities in the development of hi-tech vessels.”

The Changxing Island cluster has been given a mandate to serve as “a global powerhouse for technological breakthroughs”, develop more than 10 types of hi-tech vessels and marine engineering equipment by 2027, and attract at least three leading international institutions to join its operations.

The ambitious plan comes as China reasserts its dominant position in the global shipbuilding supply chain amid curbs on its industry from the US and fierce competition with South Korea and Japan – the world’s second- and third-largest shipbuilders, respectively.

Chinese shipyards received 70 per cent of new orders in 2024, with a total order volume of 46.45 million compensated gross tonnage – a measure of the work performed to construct a vessel or vessels – according to maritime consultancy Clarksons Research.

However, in the first half of the year, Chinese shipyards saw a drop in their share of new orders while their South Korean counterparts gained ground, following new US restrictions intended to weaken China’s dominance in the industry.

China secured 56 per cent of new orders in the first half of the year, down from 75 per cent a year earlier, while South Korea’s share rose from 14 per cent to 30 per cent, the Post calculated using Clarksons data.

Changxing Island is already one of China’s largest and most advanced shipbuilding bases. In 2024, the island’s industrial output exceeded 80 billion yuan, according to data from the government of Shanghai.

The island hosts major shipyards such as Jiangnan Shipyard and Hudong-Zhonghua Shipbuilding Group, both subsidiaries of China State Shipbuilding Corporation.

It has produced some of the country’s most cutting-edge vessels, including the polar research icebreaker Xuelong 2 and a car carrier capable of transporting up to 7,800 vehicles.

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China cuts US Treasury holdings for third month amid trade war, debt ceiling fears

https://www.scmp.com/economy/china-economy/article/3318694/china-cuts-us-treasury-holdings-third-month-amid-trade-war-debt-ceiling-fears?utm_source=rss_feed

China trimmed its US Treasury holdings for a third straight month in May, amid escalating trade tensions with Washington and mounting concerns over a sweeping tax and spending bill.

Beijing’s holdings fell to US$756.3 billion from US$757.2 billion in April, according to US Treasury Department data. That was the lowest level since March 2009, based on figures compiled by Wind.

The decline has continued since March, when China dropped to third place among foreign holders, behind Japan and the United Kingdom.

In May, China and the US agreed to a 90-day truce in their unprecedented trade war after talks in Geneva. But tensions soon reignited after Washington announced new export restrictions and Beijing imposed curbs on rare earth exports.

There were fears the trade war could spill over into financial markets amid speculation that Beijing might offload its large US Treasury holdings or that Washington could delist Chinese firms from American stock exchanges.

Lian Ping, chairman of the China Chief Economists Forum, warned in May that while full-scale US financial sanctions against Beijing were unlikely, the sector could still “become a new battleground”.

Concerns about the sustainability of US debt also intensified in May after the House of Representatives passed President Donald Trump’s “One Big Beautiful Bill Act”, which included a proposal to raise the federal debt ceiling.

Trump signed the bill – set to increase the ceiling by US$5 trillion – into law on July 4.

Despite China’s continued selling and an overall monthly dip, total foreign holdings of US Treasuries – including short-term bills and longer-term bonds – rose to US$9.05 trillion in May, marking the third straight month above the US$9 trillion mark.

Net foreign purchases of US securities and banking inflows amounted to US$311.1 billion, Treasury data showed. That included US$333.2 billion in net inflows from private foreign investors, partially offset by US$22.1 billion in net outflows from official foreign institutions.

Japan and the UK, the two largest foreign holders of US Treasuries, both increased their holdings in May. Japan’s rose slightly from US$1,134.5 billion to US$1,135 billion, while the UK’s increased from US$807.7 billion to US$809.4 billion.

Amid South China Sea dispute, China warns students to beware safety risks in Philippines

https://www.scmp.com/news/china/diplomacy/article/3318691/amid-south-china-sea-dispute-china-warns-students-beware-safety-risks-philippines?utm_source=rss_feed

Beijing has issued a warning to Chinese students planning to study in the Philippines, its competitor in a highly contentious territorial dispute over the South China Sea, citing recent safety concerns and a string of criminal cases targeting Chinese nationals.

In a statement released on Friday, China’s education ministry urged students to “carefully assess security risks” and “strengthen safety awareness” before heading to the Southeast Asian country.

“Recently, public security in the Philippines has been unstable, with frequent crimes targeting Chinese citizens. The Ministry of Education reminds all students studying abroad to carefully assess security risks when choosing to study in the Philippines and to strengthen safety awareness,” the statement said.

Figures released by the Philippine Bureau of Immigration last year revealed that only 300 to 400 Chinese students remained in the Philippines.

The advisory was issued amid tensions between China and the Philippines over their South China Sea territorial disputes. Manila, which is increasingly aligning with its treaty ally Washington, is viewed as Beijing’s most hardline opponent to its maritime claims.

This week, Manila accused a Chinese ship of damaging protected coral after running aground near Thitu Island, the largest base held by the Philippines and known as Zhongye Island in Chinese. It is weighing legal action against China and has demanded compensation of 11.1 million pesos (US$194,000), according to local media reports.

In April, the education ministry issued a similar warning for students planning to study in Ohio, the United States, that cited the state’s restrictions on education cooperation related to China.

The latest study advisory comes amid growing public safety fears for Chinese citizens in the Philippines, especially after several high-profile kidnappings and killings, as well as sluggish diplomatic relations between Beijing and Manila under the cloud of the South China Sea territorial dispute.

In February, a 14-year-old Chinese student was kidnapped by a criminal gang, which killed his driver and cut off the student’s finger to force his parents to pay a ransom, according to Philippine officials. The boy was later abandoned by the side of the road as police closed in.

In April, Anson Que – a Filipino-Chinese businessman known as the “Steel King” – was kidnapped and murdered along with his driver.

There have been constant reports of such kidnapping cases targeting Chinese in recent years, with most cases believed to be linked to the country’s criminal groups related to the illegal offshore gambling industry.

Online gambling operations in Southeast Asian nations have created a large number of workers and clients in China.

In February, Jonvic Remulla, the Philippine Interior Secretary, said that after the Philippines made offshore gambling illegal, some participants had turned to other crimes, including kidnapping.

Beijing and Manila have conducted several rounds of joint police operations since criminalising offshore gambling late last year. Hundreds of Chinese workers in the industry and several Chinese suspects related to kidnappings have been deported back to China.

On security, both countries have separate concerns about possible espionage cases. Earlier this year, six Chinese nationals and one Filipino were accused of flying drones near military facilities in the northern Philippines and arrested, marking a total of 12 Chinese nationals in custody in the Philippines on spying allegations.

Chinese authorities later detained three Filipino scholars in Hainan, citing espionage concerns, without clarifying if it was a retaliatory move. Manila said it had gained “access” to the three detainees this week.

The South China Morning Post has reached out to the Philippine embassy in China for comment.

Hunky Chinese swimming coach has mothers flocking to enrol kids, some want to join classes

https://www.scmp.com/news/people-culture/trending-china/article/3318092/hunky-chinese-swimming-coach-has-mothers-flocking-enrol-kids-some-want-join-classes?utm_source=rss_feed

A young swimming coach in eastern China has captured the attention of mainland social media with his striking looks and athletic physique, prompting many mothers to rush to enrol their children in his classes.

Since early July, videos of a handsome swimming coach at Hangzhou Chen Jinglun Sport School in Zhejiang province teaching young children have circulated widely online, according to the Jiefang Daily.

These clips are reportedly taken by the mothers of the coach’s pupils, allured by his charming and youthful appearance, as internet users have humorously noted.

In these videos, the coach dons colourful swimming trunks paired with a long-sleeved top, and at times, he goes shirtless, showcasing his impressive physique.

Parents have revealed that the coach, whose surname is Chen, recently graduated from high school this summer and has been accepted into Nanjing Sport Institute in Jiangsu province, also located in eastern China.

Currently, he serves as a part-time junior coach at the Hangzhou sport school, overseeing more than 20 children aged between four and five.

The Hangzhou sports school is a premier swimming training centre in China, often referred to as the cradle of world swimming champions. It has nurtured numerous internationally recognised athletes, including Sun Yang, Chen Yufei, and Luo Xuejuan.

This summer, around 800 children have participated in swimming lessons, with 40 per cent of them set to advance to the next stage of training, according to the school.

The teenage coach quickly became a social media sensation in mainland China, eliciting a wave of humorous comments from netizens.

“I’m highly motivated to send my kid for swimming lessons just to see this handsome guy, ha!” remarked one user.

“Now I realise I wasn’t interested in swimming before because I lacked a handsome coach,” commented another.

A third user quipped: “Can a baby of 264 months old enrol in his class?”

His social media account has also been uncovered, with many internet users leaving comments to express their admiration for him.

“Coach, you are so cute! Please do not close your account; instead, share more videos to capitalise on this online fame. We adore you,” one user said.

On July 10, the young coach addressed his new-found popularity on social media.

“Thank you for your support. However, I ask that you respect my privacy,” Chen said.

“Please refrain from sending me personal messages. Otherwise, I may have to deactivate this account, as it has started to affect my daily life,” he added.

How a heat-seeking beetle inspired infrared tech that could aid Chinese defence

https://www.scmp.com/news/china/science/article/3318630/how-heat-seeking-beetle-inspired-infrared-tech-could-aid-chinese-defence?utm_source=rss_feed

After spending years studying advanced infrared sensors, a group of Chinese researchers has produced a device that could be used to build a surveillance network more powerful and effective than the proposed US missile defence system known as the “Golden Dome”.

The Chinese technology, which is capable of unprecedented detection speeds 20,000 times faster than conventional technology, was inspired by nature’s most sensitive heat seeker – the fire beetle.

Infrared sensing technology is vital for detecting objects in challenging settings where smoke, fog or dust may obscure conditions. It provides clear imaging and accurate detection by penetrating these obstacles, making it essential for use in military and industrial applications.

Biological systems are also capable of perceiving motion in complex settings with minimal processing, inspiring new designs for optoelectronic devices.

The fire beetle, for instance, is equipped with a specialised pit organ on its thorax, allowing the insect to detect faint infrared radiation from forest fires hundreds of kilometres away even while flying at high speeds, an accuracy that surpasses the sensitivity of most commercial infrared detectors.

This unique organ evolved for reproduction: the residual heat from wildfires provides the necessary conditions for larvae to hatch from their thick-walled eggs, after which they feed on charred tree bark.

Inspired by this biological mechanism, Professors Hu Weida and Miao Jinshui and their team from the Shanghai Institute of Technical Physics at the Chinese Academy of Sciences, in collaboration with researchers from Tongji University, have developed a new high-efficiency infrared sensing device capable of real-time detection, memory and recognition of fast-moving infrared targets.

Their findings were published in the peer-reviewed journals Nature Communications in June and Light: Science & Applications in February.

The team first constructed a transistor based on a combination of palladium diselenide (PdSe₂) and pentacene to form a heterostructure. PdSe₂, a two-dimensional material, provided high absorption in the mid-infrared range, while pentacene, an organic semiconductor, mimicked the biological systems.

The device operated within the 3-4.25µm mid-infrared spectrum and could function at an incident intensity as low as 0.5 mw/cm², which approached the physiological sensitivity threshold of fire beetles.

Using this transistor, the team designed a reservoir computing (RC) framework, and by integrating a 4×4 device array, they were able to identify the direction of flame movement with an accuracy rate of almost 95 per cent.

In simulated fire scenarios with temperatures ranging up to 927 degrees Celsius (1,700 Fahrenheit), the device showed stable responses and memory retention of thermal radiation trajectories, confirming its potential for wildfire warning systems, night-vision navigation, and industrial monitoring.

In the second study, the team developed a black phosphorus/indium selenide (BP/InSe) heterostructure capable of achieving photonic memory in just 0.5 microseconds – 20,000 times faster than conventional optical storage.

When tested with simulated infrared targets, the system recorded 17 distinct feature points, compared with traditional devices that could only capture a single blurred point.

The technologies would be suitable for environmental monitoring, military surveillance, autonomous driving and night vision, according to the authors.

Although no specific examples were given, if devices incorporating such technologies were deployed in drone swarms or satellite constellations, they could form a distributed infrared surveillance network.

The fire beetle-inspired chips could be integrated into the HQ-17AE short-range surface-to-air defence system to intercept missiles in sandstorms or nighttime conditions, while chips developed with BP/InSe could boost naval laser defences, such as firing control for the electromagnetic railguns on a Chinese aircraft carrier.

In May, US President Donald Trump unveiled the Golden Dome, a multibillion-dollar space-based missile defence system. The next-generation shield would include a global network of infrared early-warning satellites equipped with sensors and interceptors designed to detect and destroy various missile threats and radar-evading stealth technology before or during their flight.

However, the system would be based on traditional silicon-based complementary metal-oxide-semiconductor sensors that could not provide the response speed, positioning accuracy and sensitivity of devices that can be made with the Chinese technology, according to the studies.

The researchers said the findings from both studies could overcome the limits caused by the traditional hardware separation of sensors and processors, significantly reducing data latency and power consumption.

“By integrating sensing, memory and processing functions, the proposed system significantly reduced data transmission delays and enhanced motion processing efficiency,” they said.

Additionally, the devices feature low-voltage operation, room-temperature functionality, and scalable array manufacturing – making them ideal for edge-computing applications in drones, autonomous vehicles and satellite remote sensing.

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Chinese farmer turns inventor with homemade 7-metre submarine

https://www.scmp.com/news/china/science/article/3318525/chinese-farmer-turns-inventor-homemade-7-metre-submarine?utm_source=rss_feed

On a quiet river in central China’s Anhui province, villagers in Hanshan county stopped to stare as a sleek black shape sliced through the water with a low mechanical growl.

It was not a military test or an industrial prototype. It was a home-made submarine – designed, built, and piloted by Zhang Shengwu, a 60-year-old farmer with no engineering degree and no blueprint to follow.

“I’d watched boats all my life,” Zhang told Dawan News, a government-affiliated outlet, referring to the years he spent managing a tiny riverside dock in his village. “But I always felt something was missing.”

Fascinated by invention since childhood, he had often dreamed of building machines that were beyond the means of his rural life. But it was not until 2014, when a programme on state broadcaster CCTV featured a submarine slipping beneath the waves, that one idea took hold with irresistible force.

“I’d seen wooden boats and iron boats,” he said. “But never one that could go underwater.” Within days, he had scraped together 5,000 yuan (US$700), bought steel plates, a battery and an engine – and began building in secret while his wife was away caring for his mother-in-law.

The first prototype emerged two months later. It was 6 metres long (19.6 feet), weighed 2 tonnes and was capable of diving 1 metre deep.

Nervous but determined, Zhang climbed in and piloted it beneath the surface. “I was sweating the whole time,” he said, adding that he was “afraid of leaks, but excited to go deeper”.

That model earned him a utility patent in China and by 2021 he was ready to go bigger. His second submarine, named Big Black Fish, is 7 metres long, weighs 5 tonnes and can submerge to a depth of 8 metres.

It seats two people and features improved controls, including an external joystick wrapped in anti-slip rubber and a glowing blue instrument panel that gives the cockpit a cinematic feel, according to Dawan News.

Zhang has even built a 5-metre long pole with a waterproof camera mounted at the tip, allowing him to inspect the riverbed from the shore. It allowed him to help a fisherman locate a lost net and earn 3,000 yuan in the process.

When the vessel made its maiden dive on Wednesday, Zhang filmed the test run and posted it on Douyin, China’s version of TikTok. The video went viral overnight.

While experts have yet to assess the craft’s safety or functionality, Zhang’s story has captured the imagination of millions online. “I don’t know the big words,” he said, “but I believe people should have something to dream about.”

Nvidia CEO on US’ Chinese brain drain, Hong Kong DSE results: SCMP’s 7 highlights

https://www.scmp.com/news/world/article/3318665/nvidia-ceo-us-chinese-brain-drain-hong-kong-dse-results-scmps-7-highlights?utm_source=rss_feed

We have selected seven stories from this week’s news across Hong Kong, mainland China, the wider Asia region and beyond that resonated with our readers and shed light on topical issues. If you would like to see more of our reporting, please consider .

It is a “great loss” for the United States that many Chinese academics and researchers have left the country and chosen to return to China amid worsening bilateral relations, said Jensen Huang, co-founder and CEO of chipmaker Nvidia.

Donald Trump’s recent spats with Elon Musk – which included threats to deport the South African-born billionaire – have prompted speculation that he might move his business empire to China.

The Trump administration’s selection of Nick Adams, a self-styled “Alpha Male” author and social media provocateur, as the next US ambassador to Malaysia has triggered outrage in the Muslim-majority nation, with critics questioning the motives behind the decision.

Students across Hong Kong learned their results on Wednesday for the city’s university entrance exams.

The so-called ultimate top scorer this year is Wang Haibo, a student from Hong Kong Chinese Women’s Club College in Sai Wan Ho.

Subway trains across the southern Chinese megacity of Shenzhen welcomed an unusual new set of passengers on Monday, as the city deployed a fleet of delivery robots to restock convenience stores scattered around its subway system.

Top German medical scientists Roland Eils and Irina Lehmann have taken up part-time positions at Fudan University in Shanghai, according to the Chinese institution’s website.

A 66-year-old woman in Shanghai who spent two million yuan (US$280,000) shopping online and even rented a flat to store her unopened packages has trended on social media.

Economists call for reform as China’s famed marketisation index drops

https://www.scmp.com/economy/china-economy/article/3318679/economists-call-reform-chinas-famed-marketisation-index-drops?utm_source=rss_feed

Chinese economists have called for more pro-market reforms to tackle economic imbalances and vicious intra-industry competition, as a new report has revealed a decline in a major index tracking the country’s marketisation.

In a new assessment from the National Economic Research Institute, a Beijing-based think tank, China’s overall level of marketisation – measured by five criteria, including government-market relations – stood at 5.62 out of 10 in 2023, slipping by 0.1 from 2019 and by 0.4 from 2021, the index’s four-year peak.

The index, typically published every two years, is one of the country’s most influential non-governmental benchmarks. The institute has tracked China’s level of marketisation and business environment through government data and surveys for decades, with a change to its baseline year for measurement in 2019.

Speaking at an online forum late last month, Wang Xiaolu – the institute’s deputy director and a lead researcher – called it a “pretty significant change”, and said action should be taken to reverse the trend.

While the Covid-19 pandemic caused some distortions, Wang said, it also saw the state play a smaller role in economic policy in some cases and cannot be said to be the main reason for the decline.

Out of the five subindexes the institute measures, government-market relations - the proportion of resources allocated by the market and reduction of government intervention in enterprises – saw the biggest deterioration since 2019, with a drop of 0.38.

“If you’re both the referee and the player … such competition is not fair competition, and such a market will not be a fair market,” Wang said, comparing local governments that compete in the market to players given an unfair advantage in a football match.

However, bright spots were observed in certain regions.

Zhejiang province, which attracted global attention this year for the success of its tech startups - including artificial intelligence firm DeepSeek and Unitree Robotics – topped the index when divided regionally. It climbed three spots from 2019, with a reading of 8.22 out of 10 in 2023.

This was followed by the traditional financial and economic powerhouses of Guangdong, Shanghai and Jiangsu; regions with some of the highest gross domestic products reported in 2023, the year on which the latest marketisation index was based.

Since 2013, official rhetoric has granted the market a “decisive role” in resource allocation, a shift from earlier, more tentative statements. Recent policy moves, such as a new law clarifying and protecting the status of the private economy, have been made in that mould.

However, “in many cases, government intervention has caused market imbalances,” Wang said, citing the solar panel industry as an example.

Years of heavy subsidies to speed up a transition to clean energy lured scores of companies into solar photovoltaic manufacturing, resulting in excessive competition and oversupply.

Beijing has made direct entreaties to industries to scale down production and avoid destructive price spirals. The Ministry of Industry and Information Technology vowed to tackle oversupply earlier this month, days after President Xi Jinping took aim at “disorderly low-price competition” during a high-profile economic meeting.

Within the broader marketisation index, two subindexes fell from the level recorded in 2019: development of the non-state-owned economy dropped by 0.21, and that of the factor market fell by 0.1.

Investor confidence has been weighed down by several persistent issues, including a slump in the property sector, low consumer spending and lingering regulatory uncertainties.

Tang Dajie, a researcher with the China Enterprise Institute who also spoke at the online forum, urged the government to take a step back in its regulations on personnel management.

He noted the strict and cumbersome occupational certification requirements for a large number of ordinary jobs in China, which have raised barriers to employment.

While the State Council, China’s cabinet, abolished over 400 qualification licences and certifications between 2013 and 2017, “deeper reforms are needed to foster free-market competition for human resources and enhance marketisation,” Tang said.

China unveils new drone that takes off and lands on its tail like a rocket

https://www.scmp.com/news/china/military/article/3318589/china-unveils-new-drone-takes-and-lands-its-tail-rocket?utm_source=rss_feed

China has unveiled a tail-sitter drone – which takes off and lands on its tail like a rocket – during a disaster rescue drill, according to state media.

In its debut, the new unmanned aerial vehicle’s sensors and cameras were put to the test for reconnaissance and real-time situational awareness operations in a mountainous region of Sichuan province, the official Science and Technology Daily reported on Tuesday.

The drone’s Wenyao intelligent control system was also on show, with the drill demonstrating capabilities such as autonomous target allocation, automatic route planning, and automated threat avoidance – all of which could be vital when controlling a drone swarm.

The drone – whose name was not disclosed – is what is known as a vertical take-off and landing aircraft. It launches vertically with its nose pointing up, transitions to a horizontal flight position, then switches back to vertical to land on its tail.

With a wingspan of 2.6 metres (8.5 feet) and a length of 1.8 metres (5.9 feet), the UAV looks similar to the United States military’s MQ-35 V-BAT drone, which has a single-engine ducted fan design.

The design enables it to fly much faster than a quadcopter – a drone with four rotors – and nearly as fast as a fixed-wing drone. Its ability to take off and land vertically gives it flexibility in deployment and makes it easier to retrieve from remote or rugged areas since it does not need a runway, launcher or an arresting system for take-off and landing.

Its developer, state-owned Chengdu Aircraft Industry Group (CAIG), a subsidiary of the Aviation Industry Corporation of China (AVIC), also makes stealth fighters and military drones such as the Wing Loong II.

AVIC said the new tail-sitter drone was easy to maintain and cheap to operate, and emphasised its potential role in disaster relief.

“It can quickly reach the disaster area and carry out all-round reconnaissance using the sensors and camera equipment on board, so as to quickly grasp the situation of the disaster,” the aircraft maker said in a post on its social media account.

It said the drone was a reliable “all-rounder” with a modular design that meant it could carry out a rapid payload change to respond quickly to different tasks, without elaborating.

The drone is slightly smaller than the American V-BAT, which has a 3-metre wingspan and a length of 2.7 metres.

The V-BAT – developed by Shield AI – is widely used by the US Navy, Army, Marine Corps and Coast Guard for a range of intelligence, surveillance and reconnaissance missions. It has also been provided to Ukraine for the war against Russia, as well as to other countries including Brazil, India and Japan.

The new Chinese drone is supported by CAIG’s Wenyao control system for UAVs – a collaborative management platform. The system uses a centralised automatic scheduling algorithm and offers full automation, from flight authorisation to collision prevention.

“This makes drone swarming possible,” the Science and Technology Daily report said.

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‘I felt lost’: mainland Chinese talent children on their struggles to settle in Hong Kong

https://www.scmp.com/news/hong-kong/education/article/3318656/i-felt-lost-mainland-talent-children-their-struggles-settle-hong-kong?utm_source=rss_feed

Twelve-year-old Sofia Teng Yiru was always among the top three in class at her hometown in Wuhan in mainland China before she moved to Hong Kong in March last year.

She came with her father, Aaron Teng, 42, who had succeeded in applying for the city’s top talent admission scheme and started his own company in online advertising.

Previously at an international school where lessons were taught in English and Mandarin, Sofia was admitted to Primary Five at Kowloon Women’s Welfare Club Li Ping Memorial School in Yau Ma Tei.

She returned home dejected and in tears every day for a month. She could not understand anything in class, as all lessons except English were taught in Cantonese.

“I felt pretty lost,” she recalled.

Sofia is among thousands of mainland Chinese children who have arrived in Hong Kong since the government introduced a major scheme to attract top talent in December 2022.

Almost three years on, parents, school principals and a support group for arriving talent told the Post these families needed more help, and the language barrier was only one challenge mainland children faced as they settled into life in Hong Kong.

Some parents found it hard to get their children into schools of their choice, with teenagers facing difficulty enrolling in senior secondary levels, and some children suffered emotional problems too.

Hong Kong embarked on a major drive to attract talent following a wave of emigration after Beijing imposed the national security law in 2020 and the United Kingdom, Canada and Australia announced new migration pathways for Hongkongers who wished to leave.

The Quality Migrant Admission Scheme (QMAS) and Top Talent Pass Scheme (TTPS) are the main ones attracting talent to the city, with more than nine in 10 successful applicants of both coming from the mainland.

The top talent scheme introduced in 2022 is for applicants who earned more than HK$2.5 million (US$320,000) over the previous 12 months or graduates of 100 top universities globally.

For those from the mainland with children, a big attraction in Hong Kong is its education system, which they consider less stressful and more balanced than on the mainland.

About 142,000 children under 18 were approved for entry as dependants under the various talent admission schemes up to May this year, according to official data.

But lawmaker Jesse Shang Hailong, a mainlander who moved to Hong Kong in 2011, estimated that only 25,000 to 30,000 of them have joined schools since the end of 2022, based on information he gathered from different school councils.

Concerned about the interests of immigrants, he set up the Hong Kong Top Talent Services Association in 2023 to help mainlanders settle in the city and serves as its chairman.

Many parents wanted their children to complete their school term on the mainland, while some successful talent scheme applicants preferred to wait two to three years before moving to Hong Kong.

“Some even have to secure a job in Hong Kong first, before packing their bags,” he said.

The main applicants and their children may move to Hong Kong at any time during the visa period, and children with dependant visas do not have to come at the same time as their parents.

Most of the students moving to Hong Kong schools entered Primary Two to Secondary Three, Shang said.

Shang said a survey he conducted showed that about half of the mainlanders moving to Hong Kong liked to send their children to public schools, over a third preferred semi-private schools under the direct subsidy scheme, and the rest chose international and private schools.

From his regular meetings with the new arrivals, he found they shared some common concerns about their children’s education.

“The shortage of quality educational resources has led to anxiety among parents,” Shang said, referring to the limited places available in the city’s top-tier schools.

That was a reason the mainlanders did not bring their children with them immediately when they moved to Hong Kong.

Shang said the talented arrivals were typically top earners with elite educational backgrounds and had higher expectations for their children’s education, wanting them to attend top-ranked schools.

“As parents who were top students themselves and enjoying higher incomes, of course they demand better education quality in Hong Kong for their children,” he said.

“So they find it difficult to accept their kids being placed in band two and band three schools. They already have a list of elite schools in their mind,” he said.

The competition for places in the city’s elite schools remained extremely fierce, he added.

An issue for some parents was securing places for children aged 15 to 18. Schools preferred not to admit students in Secondary Five and Six, as the curriculum for the university entrance exam began at Secondary Four.

Shang said parents with older children were frustrated by having to call individual schools one by one to ask if they had vacancies, adding that he received requests for such help almost every day.

“Most of the schools do not want to admit new students as they have to prepare their own students to sit the public exam,” he said.

Some principals told the Post that not all the children of the arrivals were top students, and much depended on the type of schools they attended on the mainland. Those coming from international schools were more proficient in English.

Wong Ching-yung, principal of Scientia Secondary School in Ho Man Tin, which is popular with mainland parents, said he had admitted about 200 children of talent scheme arrivals in recent years.

More than half were placed a grade lower than on the mainland.

“The biggest challenge is their standard of English,” he said. “A few are very good, but generally their standard is comparatively low.”

Some children also had emotional problems from adjusting to life in Hong Kong and missing their parents.

Not all the successful talent scheme applicants moved to the city as entire families. Sometimes only one parent came with the children, leaving the other on the mainland for various reasons.

When some of these working parents had to travel for work, the children ended up alone in Hong Kong.

“Some of the parents do not even turn up on parents’ day,” Wong said.

“Their children are still adapting to their new lives and the learning environment in Hong Kong, having lost all their friends on the mainland, but the parents are not here with them,” he said.

“Many of them overuse their smartphones without parental guidance and soon have emotional problems and become depressed,” he said.

Chu Wai-lam, chairman of the New Territories School Heads Association and a primary school principal, said the talented immigrants, being better off, were able to help their children settle in.

“As this group of parents generally has a higher social and economic status and is more knowledgeable, they will try to satisfy the schools’ academic requirements,” he said.

The children were generally willing to learn and once they got over their adjustment issues, many performed well.

That was the case for Sofia Teng.

It took a few months but, once she adapted to her Hong Kong school, she felt at home and appreciated the new learning environment, her teachers and new friends. Her grasp of Cantonese improved quickly too.

“I’ve made a lot of good friends. I also feel I have a great relationship with the teachers – even our principal is really nice. He filmed some hilarious videos with us,” she said.

School life was less stressful than on the mainland, where it was hyper-competitive and teachers pushed students to study nonstop and belittled them using harsh language as “motivation”.

“One teacher told us to achieve high scores or he would not consider us his students,” she recalled of her schooldays in her hometown.

Her mother, Asha Teng, 43, appreciated that teachers in Hong Kong encouraged students to step outside the classroom during breaks to relax, rather than confining them to their desks to study some more, like they did on the mainland.

She felt Hong Kong’s education system showed more respect for individuality too.

Her advice to other parents moving to the city with children was that they should not bother too much about rankings when choosing a school.

“The children already face stress from language barriers and social adaptation. If you then place them in an elite school, they’ll have academic pressure on top of that,” she said.

Sofia was already looking forward to starting secondary school in the city in September.

Dentist He Xu, 42, moved from Shanghai to Hong Kong in February last year with her son Ryan Yuan Heyu, 10, and daughter Yem Yuan Heyan, six, who had different experiences settling in.

“I think it depends a lot on the kids’ age and personality,” said He, who applied successfully for the Quality Migrant Admission Scheme mainly for the children’s future.

Her husband stayed back in Shanghai, while the family assessed their ability to settle in Hong Kong.

Ryan’s transition at his new school was relatively smooth, and he could understand most of the lessons in Cantonese within a month.

He said: “At first I focused on listening. The more I listened, the better I understood. If some words and phrases got in my way, I’d raise my hand and ask the teacher.”

He already felt comfortable expressing himself in Cantonese, using common phrases, although he sometimes struggled to find the right word.

Yem, however, found it harder to adapt and at first, only made friends with other children who spoke Mandarin.

“Sometimes, she’d tell me she missed Shanghai and her dad,” the children’s mother said.

Despite the challenges, the dentist said she encouraged the children to do their best to learn Cantonese, believing it was crucial to help them integrate into Hong Kong life.

Families arriving under the city’s talent schemes can receive support, including information on school admissions, with courses organised by the government to help mainland children adapt.

A six-month full-time initiation programme run by local schools and a 60-hour induction programme by non-governmental organisations cover content such as language, learning skills, personal growth and development, and social adaptation.

Enrolment in the induction programme rose from 1,060 in the last academic year to 1,500 in the current school year, while the number in the initiation programme went up from 462 to 500.

Schools that accept newly arrived children also receive a government grant of HK$4,139 per primary child and HK$6,136 per secondary student to run orientation activities, after-school supplementary lessons, guidance programmes and extracurricular activities for them.

These activities help the children improve their English and Cantonese and become familiar with their new surroundings.

Lawmaker Shang hoped authorities would increase the intakes, as demand outstripped supply.

“Last year, as far as I know, all of these courses were full, as parents would like their children to learn Cantonese and adapt to what the Hong Kong classroom is like,” he said.

He urged the government to do more to help older children obtain places at senior secondary levels, as it only provided public school placement support services for children aged six to 15.

He suggested setting up senior secondary schools specially for the children of arriving talent to study in the upper forms.

Overall, though, Shang said the children of the new talent scheme arrivals settled in much better than he had expected.

It helped that, unlike in the past, there were many of them coming to Hong Kong at the same time.

“They can easily seek help from others also from the mainland, and soon set up their own circle,” he said. “They share tips to help each other, even when handing in homework.”

Japanese traveller anxiety soars amid China’s espionage arrests

https://www.scmp.com/week-asia/politics/article/3318572/japanese-traveller-anxiety-soars-amid-chinas-espionage-arrests?utm_source=rss_feed

The arrest and prosecution of Japanese citizens in China is fuelling public anxiety and deterring travel, Japan’s government has warned, as academics and businesspeople said they were either taking precautions or avoiding visits altogether.

Tokyo expressed its concern about deteriorating relations on Wednesday after a court in Beijing sentenced a Japanese employee of pharmaceuticals manufacturer Astellas Pharma to three years and six months in prison for espionage.

The man, who has not been named but is reported to be in his sixties, was initially detained in March 2023 as he prepared to leave China after working in the country. He was indicted last August, and the first hearing in his case took place three months later.

The sentencing hearing on Wednesday was not open to the press, but officials from the Japanese embassy in Beijing were permitted to attend, Jiji Press reported.

“It is extremely regrettable that a guilty ruling was issued,” Japanese ambassador to China Kenji Kanasugi told reporters after the hearing. “We will continue to call strongly for his early release while supporting him as much as we can.”

Speaking later in the day in Tokyo, a foreign ministry spokesman said the arrest of Japanese nationals “has become one of the major obstructive factors for people-to-people exchanges … and improvements in public sentiment”, as quoted on Jiji Press.

The official called on China to “enhance the transparency” of its judicial procedures, given that the hearings in the case have been held behind closed doors and little evidence has been made available.

According to the foreign ministry, 17 Japanese nationals have been arrested in China on suspicion of spying or other crimes since 2015. Five remain in prison.

Beijing introduced strict anti-espionage legislation in 2014 and called on the public to report threats to national security. The law has been criticised for being vaguely worded and open to broad interpretation, including on what poses a threat to national security.

“There is no way at all that I would go to China, on business or for a vacation,” said Ken Kato, a Tokyo-based businessman who is also a director of Human Rights in Asia and an outspoken critic of arbitrary detention by governments in the region.

“I have been quoted many times about my human rights work and I think it would be very likely that I would be arrested if I tried to enter China,” he told This Week in Asia.

“I think that a lot of Japanese see this sort of news and they are also reluctant to go to a country where they are going to be asked a lot of questions and potentially locked up for years.”

Statistics on Japanese living in China bear that out. There were more than 140,000 Japanese living in China in 2018. Last year, according to the Nikkei newspaper, that had fallen to 97,538.

Japanese businessmen dispatched to China to work in local branch offices are reportedly requesting alternative postings, in large part due to attacks on family members in recent years.

Last June, a Chinese man assaulted a Japanese mother and her child as they were waiting at a school bus stop in Suzhou, with a Chinese woman later dying of injuries she sustained trying to protect the child. In September, a 10-year-old boy died after being stabbed close to his school in Shenzhen.

“Japanese families do not want to take that risk any more, with the possibility of being arrested on vague espionage charges just making it even less appealing,” Kato said.

Maya Hamada, a professor of Chinese literature at Kobe University, visited China to attend an academic conference in Fuzhou in late April, and admitted that she took precautions before leaving Japan.

“I have visited China dozens of times and I would not say that I am nervous about visiting, but I do take care with what I say and what I do while I am there. I also used a short-stay tourist visa this time, which I think is safer than entering the country on a working visa,” she said.

“I also feel safe because I study Chinese literature and that is not controversial, but colleagues who are professors of politics, economics or international relations, for example, have to be more careful.”

There have been a number of cases of Chinese academics at Japanese universities detained after returning for a brief visit to their homeland.

One of the most prominent to disappear was Yuan Keqin, a professor at Hokkaido University of Education, who was detained in 2019 and subsequently charged with espionage. In May last year, he was sentenced to six years in prison by a court in Jilin province.

“This is a bad policy because it does nothing but damage relations between China and Japan and probably hurts China more,” said Kato. “Businesspeople do not want to go there; professors no longer feel safe and do not feel they can work with Chinese academics; and no Japanese person wants to book a holiday there because they fear they might be arrested.

“Perhaps it is about time Japan passed some similar espionage legislation and started arresting Chinese so we can arrange hostage exchanges.”

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US House committee chair warns Panama about Chinese influence over Panama Canal

https://www.scmp.com/news/china/money-wealth/article/3318655/us-house-committee-chair-warns-panama-about-chinese-influence-over-panama-canal?utm_source=rss_feed

The head of a US congressional committee on Thursday, warned Panama over Chinese influence on the Panama Canal, following reports that leading Chinese state-owned conglomerates are bidding for port concessions there now for sale by Hong Kong-based CK Hutchison Holdings.

In his letter to Minister of Maritime Affairs and Administrator of the Panama Maritime Authority Luis Roquebert, Representative John Moolenaar, chairman of the House Select Committee on the Chinese Communist Party, expressed alarm over China’s “malign influence” on the canal, a conduit vital for global shipping and supply chain security.

“I am writing to applaud the work you, your Ministry, and your country have undertaken to reject undue influence from the People’s Republic of China,” the Michigan Republican wrote.

Panamanian President José Raúl Mulino “has demonstrated his commitment to strengthening the US-Panama relationship and has taken concrete steps to reverse efforts by the PRC to expand malign influence in Panama,” the letter said.

Moolenaar urged Roquebert’s ministry to ensure that whoever ends up controlling Cristobal and Balboa, two Panama Canal ports operated by CK Hutchison, is not “beholden” to the Communist Party of China.

He described the state-owned China Cosco Shipping as of “particular concern”.

“The inclusion of Cosco – or any other Chinese company – in port operations or control along the canal would represent an unacceptable risk to the national security of both our nations,” Moolenaar wrote.

“A Panama Canal free of malign CCP influence would benefit the security of Panama, the United States, and Latin America as a whole,” he wrote.

Panamanian authorities have been auditing the decades-old port concessions managed by CK Hutchison, and Moolenaar urged in the letter that whichever firm or consortium that controls Cristobal and Balboa at either end of the canal moving forward “is not likewise beholden to the CCP”.

The heightened scrutiny comes as a US$23 billion deal to transfer CK Hutchison’s global ports to a BlackRock-led consortium remains in limbo. No agreement has been signed so far, with negotiations complicated by legal, constitutional and geopolitical headwinds.

Panama’s Supreme Court is currently reviewing a constitutional challenge that seeks to annul the original 1997 concession that allowed the company to run the two ports.

Lawyers in the case say the deal improperly handed sovereign powers to a private company, lacked public bidding, and violated at least 15 constitutional articles. A separate financial audit released by Panama’s comptroller alleged that Hutchison deprived the state of over US$1.3 billion in lost revenue.

The comptroller also accused former officials of negotiating “against the Republic”, and said criminal complaints will be filed.

The concessions granted Hutchison exclusive development rights around key canal zones and veto power over infrastructure projects.

Panama’s attorney general has echoed the legal concerns, stating the contract undermines sovereignty and created an unjustifiable monopoly.

The controversy also comes after Mulino has signalled alignment with Washington, ending the country’s participation in China’s Belt and Road Initiative in February. The move came shortly after US Secretary of State Marco Rubio’s visit urging stronger resistance to Chinese influence.

China, meanwhile, has opposed the BlackRock deal, launching an antitrust investigation and condemning it through state media as a betrayal of national interests.

Observers say the battle over the ports has now become a flashpoint in the broader contest between Washington and Beijing over control of strategic infrastructure in the Americas.

Fentanyl likely on US-China trade agenda after long absence: analysts

https://www.scmp.com/economy/global-economy/article/3318620/fentanyl-likely-us-china-trade-agenda-after-long-absence-analysts?utm_source=rss_feed

The trafficking of materials to make the drug fentanyl – the issue cited by the US in its initial tariff escalation against China in March – is set to be back in focus for future talks, analysts said, after two previous rounds did not appear to broach the subject.

Speculation over the drug’s presence in future negotiations was fuelled by US President Donald Trump’s remarks on the topic Wednesday, making reference to China’s “big steps” – including the threat of the death penalty for smugglers – to curb the movement of chemical precursors across American borders.

If the issue is addressed, some experts said the tension between the world’s two largest economies could be further relaxed in August, after a 90-day truce agreed to during May talks in Geneva. Others expressed greater optimism, estimating a return to the 2020 trade deal that ended the escalatory spiral – albeit temporarily.

“It’s reasonable to view the fentanyl issue as a potential ‘third stage’ in US-China negotiations, particularly given how politically salient it has become in Washington,” said Matteo Giovannini, senior finance manager at the Industrial and Commercial Bank of China and a non-resident associate fellow at the Centre for China and Globalisation, a Beijing-based think tank.

“While not traditionally a trade matter, the fentanyl crisis has been elevated to a core national security and public health concern in the US, which means it can be leveraged in broader bilateral talks.”

Fentanyl is a powerful synthetic opioid. It has become the leading cause of death in the United States for people aged 18 to 45, according to the country’s Drug Enforcement Administration.

Washington, which blames China for the crisis, slapped a 20 per cent tariff on Chinese goods on March 4.

Beijing strongly denied the US’ claims and struck back by imposing retaliatory tariffs on selected American imports, including natural gas, soybeans and pork.

Before the May talks in Switzerland, reports emerged that Chinese President Xi Jinping would include Minister of Public Security Wang Xiaohong in the delegation, fuelling speculation that fentanyl would be addressed, though no discussion of the issue was mentioned publicly.

Subsequent talks also seemed to sidestep the question – the first round led to the 90-day truce and a rollback of most tariffs, while the second round in London concentrated on the mutual removal of export controls.

On Thursday, a spokesman for China’s foreign ministry urged Washington to “seek dialogue based on equality and mutual respect” if it wanted the problem to be solved.

Nick Marro, principal economist for Asia at the Economist Intelligence Unit, said fentanyl is a way for the two countries to buy time as they seek to resolve more deep-seated disputes.

“If we see some types of agreements on fentanyl, it doesn’t mean that the economic tensions are over,” he said.

“It just means that these trade tensions have been further kicked down the road and will reignite at some point in the future.”

Marro warned that the US still has more structural quibbles with China that have been frequently brought up in negotiations, including market barriers, tight data rules and concerns over excess capacity and deflation.

Stephen Olson, a former US trade negotiator, said China may offer purchase commitments in coming negotiations in exchange for concessions, with some tariff relief likely sufficient.

“Particularly if these commitments are in sectors that China would be inclined to import anyway, such as soybeans, it might not be that difficult of a concession for China to give, provided that the purchase levels are within reason,” Olson said.

Statements from prominent US figures seem to support this thesis. Stephen Biegun, the US deputy secretary of state from December 2019 to January 2021, said at the Aspen Security Forum on Wednesday that the coming US-China trade deal “is very likely to resemble” the phase-one agreement signed in January 2020, where China committed to buying US$200 billion in additional American goods over two years.

But in that deal, Olson said, almost all the concessions were on China’s side – and “there is no way” Beijing would be willing to make a similar agreement.

“This time around, China will need to demonstrate that it has also secured concessions from the US, and a substantial reduction in tariffs will probably be near the top of their list.”

Giovannini said the current bilateral relationship is more complicated than before, and involves issues beyond trade like national security, technology competition and global alliances.

“Any new agreement would likely be broader in scope but more flexible in form, less about dollar figures and more about stable mechanisms for managing friction,” he said.

On Tuesday, US Treasury Secretary Scott Bessent told Bloomberg TV the two countries were “in a very good place” ahead of an expected meeting, adding it would be important to “move on and talk about China opening its markets and the increase of domestic and consumer production there”.