• Argentina eases visa requirements for Chinese nationals in new overture to Beijing
• US Treasury chief says trade talks with China could include Russia, Iran oil purchases
• EU share of China’s rare earth magnet shipments jumps in June
• Why did Singapore name cyberthreat group UNC3886 and is it linked to China?
• Chinese nuclear giant CNNC sets new benchmark in uranium exploration
• China’s beautiful mind: brain disorder no match for young prodigy at maths Olympiad
• China confirms exit ban on US exec; high-speed rail to get upgrade: SCMP daily highlights
• China vows high-speed rail upgrade after years of record-breaking expansion
• China warns of security risks from bad actor ‘back doors’ in imported chips, smart devices
• China urged to curb ‘neijuan’ by boosting domestic consumption, innovation-led growth
• ‘Eliminate toxic influences’: China’s military issues new political guidelines after wave of corruption cases
• Nvidia CEO Jensen Huang wins hearts of millions in China with Tang suit, rusty Mandarin
• Chinese officials call on carmakers to clamp down on price spiral
• China robotics firm Unitree eyes IPO filing this year as industry starts to commercialise
• China says US Wells Fargo executive is banned from leaving country due to ‘criminal case’
• China-Singapore team’s nanovaccine suppresses cancer recurrence and spread in animal tests
• Chinese open-source AI models occupy top spots among global developers: ranking
• Chinese bond ETFs top US$50 billion in assets managed in frenzy spurred by deflation
• China officials order cleaners to sift through tonnes of rubbish for lost watch, spark outrage
• China slams EU banking sanctions as tensions rise ahead of key summit
• New railway lines put Guinea and Algeria on track to send iron ore to China
• New Shangri-La luxury brand lures rich Chinese tourists with unique cultural experiences
• China’s plan to boost drug coverage by commercial insurers no ‘magic wand’, analysts say
• Chinese rust-belt city Hegang gambles on new airport, Russian trade to fuel revival
• Why China is surging ahead of Trump’s America in green energy race
• China teacher gives CPR to collapsed woman on street, is accused of groping her
• China’s SpinQ sees quantum computing crossing ‘usefulness’ threshold within 5 years
• Shareholders of mainland Chinese firms look to Hong Kong for family offices: asset manager
• Sean Stein on why US businesses are walking a tightrope to stay in China

Argentina eases visa requirements for Chinese nationals in new overture to Beijing

https://www.scmp.com/news/china/diplomacy/article/3319067/argentina-eases-visa-requirements-chinese-nationals-new-overture-beijing?utm_source=rss_feed

Argentina on Monday announced a loosening of visa requirements for Chinese citizens in a new overture to Beijing as President Javier Milei seeks to recalibrate his foreign policy amid delayed trade negotiations with the US.

Under the new policy, effective Tuesday, Chinese nationals with US or European Union visas will not need Argentine visas to enter the country for tourism or business.

Until now, all Chinese citizens were subject to Argentina’s full visa requirements.

The policy change follows weeks of uncertainty around the timing of a long-anticipated tariff agreement with Washington and comes amid growing US discomfort over Argentina’s warming ties with Beijing.

In early April, US Special Envoy for Latin America Mauricio Claver-Carone publicly criticised a long-standing currency swap agreement between China and Argentina, calling it a form of “extortion” and urging Buenos Aires to sever the deal.

China’s foreign ministry responded at the time by accusing Washington of attempting to “drive a wedge” between China and its Latin American partners. The dispute highlighted the delicate position Milei faces as he courts both superpowers.

The visa announcement also follows another key development in Argentina’s relationship with China: the resumption of work on two major hydroelectric projects in the southern province of Santa Cruz.

The Jorge Cepernic and Néstor Kirchner dams, the largest infrastructure works funded by China in Argentina, had been paralysed since late 2023 by financial and contractual delays.

For more than a year, tensions mounted between the two countries over the stalled progress. In March 2024, Chinese contractor Gezhouba Group suspended operations and repatriated its personnel, citing the Argentine government’s failure to meet prior obligations and the absence of the so-called Adenda XII, an agreement required to unlock further disbursements from Chinese banks. The delay led to thousands of lay-offs and public protests in the region.

The deadlock began to shift early this year, when Santa Cruz provincial officials resumed talks to Beijing. In February, Cabinet Chief Guillermo Francos and Governor Claudio Vidal held a closed-door meeting with Chinese Ambassador Wang Wei and representatives of Gezhouba at the Casa Rosada, Argentina’s presidential palace.

Buenos Aires presented a confidential proposal intended to restart financing flows and move forward with construction. While details of the agreement remain undisclosed, officials described the talks at the time as “constructive” and said China was reviewing the terms.

It was not immediately clear from last week’s dams announcement when and which sectors of hydroelectric construction would initially resume.

The dam projects have long been a flashpoint in the bilateral relationship. First signed in 2014 under then-president Cristina Fernández de Kirchner, they were halted by a Supreme Court injunction, downsized under former president Mauricio Macri, and only partially revived during the administration of Alberto Fernández.

As of mid-2025, the Cepernic dam is roughly 40 per cent complete, while the Kirchner site stands at 25 per cent, according to official estimates.

Monday’s visa announcement underscores a broader shift in President Milei’s approach to China. On the campaign trail in 2023, Milei had sharply criticised Beijing, grouping it among what he called “communist dictatorships” and promising to sever state-to-state ties.

But within months of taking office, he adopted a more pragmatic tone. In an October interview, Milei said he was “positively surprised” by China and described it as “a very interesting commercial partner”.

The turnaround coincided with Beijing’s decision to renew tranches of currency swaps totalling 35 billion yuan (around US$5 billion), helping Argentina meet payments to the International Monetary Fund and stabilise its foreign reserves.

Milei had initially planned to visit China in January 2025 for the China-CELAC Forum between China and members of the Community of Latin American and Caribbean States but ultimately did not make the trip.

Despite recent gestures, officials in both capitals acknowledge the relationship remains a work in progress. “We’re doing well, but not as well as we’d like,” a senior Chinese official told the local newspaper Clarín earlier this year.

US Treasury chief says trade talks with China could include Russia, Iran oil purchases

https://www.scmp.com/news/china/diplomacy/article/3319062/us-treasury-chief-says-china-talks-could-cover-iran-russia-oil-buys?utm_source=rss_feed

US Treasury Secretary Scott Bessent said on Monday that the Trump administration was in no rush to cut a trade deal with China, but that talks were “in a good place” as both countries engage in discussions ahead of the expiration of a pause in tariffs next month.

In an interview with CNBC, Bessent also said he intended to include in his discussions China’s purchases of Russian and Iranian oil.

“I think trade is in a good place,” Bessent said, adding that the administration was more concerned with the quality of trade agreements rather than their timing.

“And I think now we can start talking about other things,” he added.

As the trade war hit a fever pitch in April and May, the world’s two largest economies hiked tariffs on each other’s goods to triple-digit levels in a quick-fire, tit-for-tat escalation.

But after talks in Geneva and London led by Bessent and Chinese Vice-Premier He Lifeng, Washington and Beijing temporarily lowered tariff levels until mid-August while discussions continued.

A telephone call between US President Donald Trump and his Chinese counterpart Xi Jinping in early June further stabilised ties. And US State Secretary Marco Rubio and Chinese Foreign Minister Wang Yi also had their first face-to-face meeting this month.

Still, Bessent’s latest comments signal that the focus of talks is shifting from tariffs to geopolitics and Beijing’s ties with Moscow and Tehran.

“The Chinese unfortunately, are very large purchasers of sanctioned Iranian oil, sanctioned Russian oil. So we could start discussing that,” he said.

The Chinese embassy in Washington did not immediately respond to requests for comment.

In a news briefing on Thursday, the embassy’s spokesperson Liu Pengyu said that recent interactions between the US and Chinese leadership paved the way for future high-level exchanges and dialogue.

“We should make use of the consultation mechanism to promote the steady, sound and sustainable development of China and US economic and trade relations, with upholding an equal attitude, respecting each other’s concern, striving for win-win outcome,” Liu said.

China’s exports to the US declined 24 per cent year-on-year in the second quarter of 2025.

As the main buyer of Russian and Iranian oil and energy products, China has faced heightened criticism from the West, with Beijing accused of using these deals to help Moscow and Tehran cushion the impact from international sanctions.

China’s import of Russian energy has been a lifeline for Russia as it fights sanctions and embargoes as a result of its invasion of Ukraine.

Xin Qiang, an international studies professor at Fudan University in Shanghai, said that Beijing was unlikely to let the US “insert” issues other than tariffs into the talks.

“Beijing will likely insist that trade talks must focus on trade and must not be ‘hijacked’ by other issues,” Xin said.

“I think Beijing may also suggest Washington to raise its concerns over China’s purchase of oil from Russia and Iran through other channels,” he added.

On Monday Bessent threatened that “any country who buys sanctioned Russian oil is going to be subject to up to 100 per cent secondary tariffs.” He also urged Europe to take similar measures.

Last week, Trump gave Russia a 50-day ultimatum to strike a peace deal with Ukraine or face massive economic sanctions.

EU share of China’s rare earth magnet shipments jumps in June

https://www.scmp.com/economy/china-economy/article/3319027/eu-share-chinas-rare-earth-magnet-shipments-jumps-june?utm_source=rss_feed

Following the acceleration of licence approvals for the export of rare earth elements, China’s shipments of the minerals rebounded in June – and the proportion of its permanent magnets sent to the European Union rose to its highest level this year.

Last month, China exported 3,188 tonnes of rare earth permanent magnets – an essential component for a variety of products, including electric vehicles (EVs), wind turbines, smartphones and aerospace vessels. This represented a 157.5 per cent increase from May and a 38.2 per cent drop year on year, according to customs data.

Of this sum, some 1,364 tonnes of magnets were shipped to the EU, accounting for 43 per cent of June exports, up from 32 per cent in May. By comparison, the proportion for the United States stood at 11 per cent in June and 4 per cent in May.

The US bought 353 tonnes of the magnets in June, a 660 per cent surge over the figure for May, though still down 52 per cent from the year before.

After China imposed export controls on seven rare earth elements and magnets in retaliation for US tariff hikes in April, companies were required to obtain a government permit before shipping these products overseas.

As a result, China’s rare earth magnet export volume plummeted in April and May, each dropping by around 50 per cent month to month.

This made the minerals a point of contention in China-EU relations, as Beijing dominates the global supply chain of the materials critical to key European industries, particularly EVs.

China mines about 70 per cent of the world’s rare earth elements and accounts for more than 90 per cent of the global capacity for separating and processing the more valuable heavy rare earths, according to a report by the New York-based think tank Strategy Risks.

At the Group of Seven summit in June, President of the European Commission Ursula von der Leyen criticised China for “weaponising” its leading position in the rare earth supply chain and using its status to “undermine competitors in key industries”.

Despite China’s announcement later that month it would “speed up the approval of export permits” – a result of trade talks in London with US officials – concerns over a reliance on Beijing’s supply have persisted among EU policymakers.

In response to the unease, Chinese Foreign Minister Wang Yi said in early July that “rare earth exports have never – and should never – be an issue between China and Europe” during a news conference with his German counterpart in Berlin.

Chinese authorities had created a “fast track channel” for approval for European companies, he said, adding the “normal needs of European enterprises will be guaranteed as long as export control regulations are followed and due procedures fulfilled”.

Leaders on both sides will be in Beijing this week, with President of the European Council Antonio Costa and von der Leyen travelling to meet Chinese President Xi Jinping, state news agency Xinhua reported on Monday.

Why did Singapore name cyberthreat group UNC3886 and is it linked to China?

https://www.scmp.com/week-asia/politics/article/3319055/why-did-singapore-name-cyberthreat-group-unc3886-and-it-linked-china?utm_source=rss_feed

Singapore has made a rare move to identify the UNC3886 cyberthreat group that it says is attacking local critical infrastructure.

UNC3886 has been identified by Google-owned cybersecurity firm Mandiant as a China-linked cyber espionage group, although Beijing’s embassy in Singapore has vehemently rejected the claim.

Singapore’s Coordinating Minister for National Security K Shanmugam said during a speech at the 10th anniversary of the Cyber Security Agency last Friday that from 2021 to last year, suspected advanced persistent threats against Singapore had increased more than fourfold. These threats often carried out state objectives, the minister noted.

Shanmugam, who is also home affairs minister, said one advanced persistent threat group Singapore was facing was UNC3886, which the industry had associated with cyberattacks against critical areas such as defence, telecommunications and technology organisations in the United States and Asia.

“The intent of this threat actor in attacking Singapore is quite clear. They are going after high value, strategic targets. Vital infrastructure that delivers our essential services. If it succeeds, it can conduct espionage, and it can cause major disruption to Singapore and Singaporeans,” he said, without naming the suspected country linked to UNC3886.

Less than a day after his speech, the minister posted that lottery numbers for 3886 in Singapore had been sold out. “I said Singaporeans need to know that UNC3886 is attacking us in cyberspace. And that it’s very serious. One reaction: No 3886 has been sold out for 4D today,” he wrote on social media.

Singapore has come under cyberattack in the past, most notably in the 2018 SingHealth data breach involving the personal particulars of 1.5 million patients, including then prime minister Lee Hsien Loong. However, the actors behind the attack were not identified.

Asked by the media on Saturday if he was concerned about retaliation from China by calling out UNC3886, Shanmugam said: “As far as the Singapore government is concerned, we can say we are confident that it is this particular organisation. Who they are linked to, and how they operate, is not something I want to go into.”

In response to a question about the strategic advantage of Singapore naming the group, the minister said that the government thought Singaporeans ought to know where the attack was coming from.

Anthony Lim, director and senior research fellow the think-tank Center for Strategic Cyberspace & International Studies, explained that UNC3886 was one of several cyberattack groups that targeted countries’ infrastructure.

While they had the ability to disrupt infrastructure, Lim said the group was likely after data and information. Their advanced techniques meant they were likely to be backed by a state, he added.

Media reports that UNC3886 was linked to China drew ire from the Chinese embassy in Singapore, as it called out local media outlets for citing “so-called information from a certain country’s cybersecurity company and claimed that this group is linked to China”.

“The Chinese government expresses its strong dissatisfaction with this and opposes any groundless smears and accusations against China. In fact, China is a major victim of cyberattacks,” said the embassy, noting that Beijing was against all forms of cyberattacks in accordance with the law.

Muhammad Faizal Abdul Rahman, a research fellow the S. Rajaratnam School of International Studies in Singapore, pointed out while Mandiant said it had technical data that connected UNC3886 to China, it was important to note the tense geopolitical environment.

“It is possible that the Western cyber companies have some technical data to connect it to Chinese actors, but at the same time they are driven by some political necessity to make this connection,” Faizal said.

Nigel Inkster, senior adviser for cybersecurity and China at the International Institute for Strategic Studies, noted that despite Mandiant’s commercial interests in attracting more clients, it had been tracking the cyberattack group since 2022 and was therefore familiar with its tactics.

“This does not diminish a threat that is very real,” warned Inkster, expressing doubt that any other state actors would target Singapore in this manner.

“From a strategic perspective it isn’t hard to imagine that given Singapore’s relations with the US, other Western powers and Taiwan, China would have an interest in both exercising deterrence and also having the ability to sabotage critical infrastructure in the event of a conflict situation over Taiwan or the South China Sea,” Inkster said.

On why Singapore would call out the group, Faizal noted that the country had been drawing attention to cybersecurity as a key pillar of its total defence education, and naming the group would make clear to the public that the threat was real and not theoretical or simulated.

“If not, I think it’s quite difficult to convince people that there is an actual threat actor out there that is trying to endanger Singapore’s interests. So I think they made a call to substantiate to the people that it is a real issue, so that everybody will be more willing to do their part as citizens,” he said.

On an international level, Faizal pointed out that naming the actor showed that Singapore had the capability to detect the group.

“In the physical world, in order to show deterrence to prevent external powers from invading us, we can showcase our fighter jets, our tanks, our submarines. In cyberspace, the only way to do that is to demonstrate that we can identify the actors and tell them that we have the ability to disrupt their attempt to disrupt our lives,” Faizal said.

---

Chinese nuclear giant CNNC sets new benchmark in uranium exploration

https://www.scmp.com/news/china/science/article/3319037/chinese-nuclear-giant-cnnc-sets-new-benchmark-uranium-exploration?utm_source=rss_feed

A Chinese energy giant has claimed a new benchmark in exploration of uranium, a resource growing in demand and importance in the country’s quest for energy security.

State-owned China National Nuclear Corporation (CNNC) said on Friday that it had detected a deposit of sandstone-type industrial uranium mineralisation at a record depth of 1,820 metres (5,971 feet) underground in the Tarim Basin in Xinjiang Uygur autonomous region.

This type of uranium deposit is generally bigger and easier and cheaper to mine than other kinds of reserves, such as volcanic rock and granite uranium.

The discovery at the record depth reflects advances in Chinese resource exploration, according to state broadcaster CCTV.

Uranium is a critical fuel for both nuclear power and nuclear weapons, but China is heavily reliant on imports.

China produced 1,700 tonnes of uranium last year and imported 13,000 tonnes, according to official data.

And demand is only rising. The International Atomic Energy Agency predicts that by 2040, China is expected to require over 40,000 tonnes a year to meet its needs.

In the past, China has focused on mining uranium from volcanic rock and granite in the south of the country.

But in recent years miners have turned to sandstone in the north, where deposits were once believed to be too low grade to extract.

Mineralisation is a reliable indicator of uranium deposits and CNNC said it used an innovative prediction model to find the reserve.

“Based on the prediction results, we carried out remote sensing, geophysical, geochemical and other measurements or explorations in key prospective areas,” state broadcaster CCTV quoted Qin Mingkuan, CNNC’s principal investigator, as saying.

“By implementing relatively deep drilling verification, we finally discovered thick industrial uranium mineralisation in the desert heart.”

Similar sandstone deposits are being unlocked to the east in the Ordos Basin in Inner Mongolia at CNNC’s “National No 1 Uranium” demonstration project.

Launched a year ago, the project is the biggest of its kind in the country and delivered its first barrel of uranium earlier this month.

The technology used at the site – called “in-situ leaching” – is significant for the amount of carbon dioxide it absorbs.

In the process, carbon dioxide and oxygen are dissolved in water, inject it into the mineral layer, which then reacts with the uranium in the mineral layer.

The uranium solution is then brought to the surface and transported to a plant to recover the uranium metal.

The technology is expected to be used in other projects to secure uranium supplies.

Progress also has been made in seawater uranium extraction, with Lanzhou University researchers announcing in April that they had developed technology that doubled adsorption of uranium from marine sources.

China’s beautiful mind: brain disorder no match for young prodigy at maths Olympiad

https://www.scmp.com/news/china/science/article/3319043/chinas-beautiful-mind-brain-disorder-no-match-young-prodigy-maths-olympiad?utm_source=rss_feed

As the world’s brightest young mathematical minds gathered last week at Australia’s Sunshine Coast for the biggest global maths competition of the year, one moment stood out before the contest had even begun.

During the opening ceremony for the International Mathematical Olympiad (IMO), the audience erupted into lengthy cheers and applause as China’s six-person team was introduced among the more than 100 taking part.

The team was led by second-year Wuhan high school student Xu Qiming, who helped to carry China’s national flag as he shuffled unsteadily alongside his teammates while trying to manage his involuntary facial expressions.

Five days later, he would receive an even bigger ovation.

Qiming has cerebral palsy, a permanent brain disorder that was caused by a lack of oxygen, known as hypoxia, at birth. The condition disrupts his motor controls, such as body movements, coordination and balance.

Despite his lifelong physical challenges, Xu showed early promise in mathematics and has since distinguished himself on the highly competitive Chinese team.

“I’ve never seen an IMO contestant like him,” a maths coach who live-streamed this year’s Olympiad on a Chinese social media platform told the South China Morning Post.

“[Qiming] did not receive any special care regarding his health,” said the woman who asked not to be named. “According to the IMO rules, all participants must complete three problems in 4½ hours of exam time each day over the two-day competition.”

China selects 30 top high school students from across the country each year for its IMO national training team. After two further rounds of tests, six students are chosen for the annual national team.

Though not the highest scorer over the past two years, Qiming has performed consistently for China’s elite team.

Xiao Liang, the head coach of the national team at the Chinese Mathematical Olympiad had high praise for Qiming after he qualified for the international team in March.

“Xu has shown exceptional performance in handling difficult problems, showcasing a composure and wisdom that surpasses his peers,” he said.

“In the second stage of selection, there were many challenging problems that required students to possess strong problem-solving abilities and good psychological resilience.”

Each year, a different host country presents up to 30 maths problems for the competition. Team leaders from more than 100 countries then select six questions – each worth seven points.

Last year, Qiming placed fifth with 35 points among 609 competitors. That earned him his first gold medal, but the team ultimately lost the championship to the United States on points, ending China’s five-year winning streak.

This year, Qiming and his five teammates were on a mission to recapture national glory.

On the first five problems, all six Chinese contestants achieved perfect scores of 35 points each. However, two of the US contestants lost three points for their team. For the formidable sixth problem, China scored 21 points – including two perfect solutions – handily beating the mere nine points for the US.

On Friday, Qiming was awarded his second consecutive IMO gold medal while leading China to victory over their arch-rivals, the Americans, amid another round of thunderous applause.

Qiming finished with 36 points, ranking him 12th among the 630 contestants. China reclaimed the title with six golds and 231 points, while the US squad ended the competition with 216 points, five gold medals and one silver.

The IMO is much more than an IQ contest. Since 2000, eight IMO medallists have gone on to win a Fields Medal, the highest honour in mathematics worldwide.

One of the most famous winners was Terence Tao. In 1988, he received an IMO gold medal at the age of 13, the youngest person ever to do so.

Thirty-seven years later, Tao – now a UCLA professor – returned to Australia to honour this year’s top scorers at the closing ceremony.

“IMO is always like that. Problem six was really quite difficult and almost nobody could solve. I couldn’t do it,” he told the audience.

“The world is really unpredictable now. Lots of you know I can’t tell you what’s going to happen. But in there, this is the pinnacle of maths competition and you know you really rose to the challenge.”

After the closing ceremony, the host Australian team passed the IMO flag to the Chinese team. Next year, IMO 2026 will be held in Shanghai.

The first IMO was held in 1959, but China did not attend until 1985, when it won a bronze medal. Four years later, China won its first IMO championship.

In the 36 years since then, China has dominated, winning 25 IMO championships and a total of 191 gold medals.

China confirms exit ban on US exec; high-speed rail to get upgrade: SCMP daily highlights

https://www.scmp.com/news/china/article/3319020/china-confirms-exit-ban-us-exec-high-speed-rail-get-upgrade-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 has confirmed that it barred a senior Wells Fargo executive from leaving the country, saying it banned her exit because of a “criminal case” investigation.

The US-China Business Council president says even in a fraught trade environment, companies cannot ignore the value of the Chinese market.

After record levels of expansion over the past few years, China’s high-speed rail network – already the world’s largest – is set for further upgrades as Beijing pledges to improve services and lower logistics costs.

Beijing has called on the European Union to “immediately cease its wrong practice” of sanctioning two Chinese banks, vowing to take action to defend the interests of Chinese companies just days ahead of a key leaders’ summit.

A joint China-Singapore research team is using nanoparticle technology to create a cancer vaccine that has produced promising results in animal tests – reducing the regrowth and spread of tumours up to seven times more effectively than existing treatments.

A new airport project in Hegang, a rust-belt city near China’s northeastern border with Russia, marks a high-stakes effort at economic revival in a place better known for its cheap housing – where homes once sold for as little as 20,000 yuan (US$2,790), analysts said.

China’s top military body has issued a new set of guidelines for political officers following a series of corruption cases.

---

China vows high-speed rail upgrade after years of record-breaking expansion

https://www.scmp.com/economy/china-economy/article/3319006/china-vows-high-speed-rail-upgrade-after-years-record-breaking-expansion?utm_source=rss_feed

After record levels of expansion over the past few years, China’s high-speed rail network – already the world’s largest – is set for further upgrades, as Beijing pledges to improve services and lower logistics costs over the coming half a decade.

China added 10,000km of operational high-speed rail tracks between 2021 and 2024, putting the nation on track to reach its goal of 50,000km by the end of the year, Minister of Transport Liu Wei said at a press conference in Beijing on Monday.

“The operating mileage of China’s high-speed rail has reached 48,000km, accounting for over 70 per cent of the world’s total high-speed rail mileage and covering 97 per cent of cities nationwide with populations over 500,000,” Liu said.

The network has grown rapidly in recent years, broadening domestic travel options, reducing logistics costs and creating opportunities to export cutting-edge Chinese technology.

The latest addition – a section connecting Chongqing to Hubei province’s Qianjiang – opened late last month. The segment is part of a strategic line that will eventually link the southwestern city to Xiamen in the southeast, enhancing connectivity between inland areas and the coast.

China’s national railway hit a record 2.24 billion passenger trips in the first half of 2025, a 6.7 per cent increase from the year before, according to official data released last week.

An Lusheng, deputy director of the National Railway Administration, who also attended Monday’s conference, attributed the growth to rising demand for travel as the economy improves – as well as better service quality and stronger network capacity.

“We are currently putting together the 15th Five-Year Plan for railway development,” An said. “It will focus on improving the railway network, enhancing transport efficiency and lowering logistics costs, to better meet the growing demand for passenger travel and freight transport.”

Beijing has prioritised building a robust logistics network – which it calls the “artery” of China’s economic and social development – to connect its vast markets and support its growing economy.

Fixed asset investment in transport in 2021-2024 reached 15.2 trillion yuan (US$2.2 trillion), marking a 23.3 per cent increase compared to the same period previously, Liu said.

China added 30,000km to its expressways during the same period, bringing the total to 191,000km, and expanded its high-grade waterways by 1,600km to 17,600km.

Meanwhile, the number of certified civil transport airports grew by 22 to 263.

“Driven by industries such as cross-border e-commerce, the international market has become a key driver for the growth of aviation logistics,” said Song Zhiyong, director of the Civil Aviation Administration of China.

To secure supply chains and facilitate international trade, the administration will “accelerate the construction of international air cargo hubs” and “expand its network of international routes, especially in emerging markets”, Song added.

Last November, Beijing unveiled an ambitious seven-part plan to cut logistics costs and tackle international chokepoints, as part of broader efforts to strengthen its domestic market and boost offshore competitiveness amid escalating global trade tensions.

---

China warns of security risks from bad actor ‘back doors’ in imported chips, smart devices

https://www.scmp.com/news/china/politics/article/3319013/china-warns-security-risks-bad-actor-back-doors-imported-chips-smart-devices?utm_source=rss_feed

China’s top anti-spying agency has urged citizens to beware of data leakage through deliberately designed or maliciously embedded “technical back doors” in chips and smart gadgets produced overseas, warning of risks to national security.

The Ministry of State Security said on its official social media page on Monday that imported chips, software and smart devices for critical sectors might feature embedded “exploits” or access points at the initial design stage. These would allow malicious actors to bypass security controls and gain unauthorised access to systems, potentially causing severe data breaches, it cautioned.

“The security of hi-tech devices and information systems directly concerns national security. Citizens must remain vigilant,” the ministry said.

A technical back door is a software tool that allows developers to debug and patch vulnerabilities efficiently. However, it may also pose significant risks, including data theft and information leakage.

Malicious actors could exploit these covert access points to remotely activate cameras or microphones, or command background processes to collect and “exfiltrate” or steal specific data, the ministry said.

Manufacturers could also illegally invade devices through after-sales services, software update channels, by compromising open-source code repositories or tampering with code during supply chain operations, it added.

Beijing places a strong emphasis on national security in the intelligence and cyber domains, and the ministry’s warning underscores heightened vigilance over risks from foreign technology supply chains amid geopolitical tensions with the United States and state surveillance fears.

A Chinese state-linked cybersecurity group last year called for a review of Intel products sold in the country, alleging that the US semiconductor giant’s chips posed a threat because of its “frequent vulnerabilities and high failure rates”. Intel asserted that it had always prioritised product safety and quality, and pledged to address concerns.

Using chips with deliberate back doors not only risks theft of sensitive state data, but also potential long-term strategic exploitation of national weaknesses. The ministry’s post urged those engaged in “critical classified roles” to mitigate such risks by adopting domestically developed chips and home-grown operating systems.

Users should also update operating systems regularly, check device logs and keep an eye on abnormal online traffic, it said.

While China has rapidly sped up the development of its semiconductor industry, it is still mainly reliant on imports for high-end chips.

The semiconductor sector remains a critical front in the US-China technology rivalry. The US has imposed strict export controls and tech embargoes targeting China’s advanced chip industry as part of efforts to reshore production and curb growing Chinese capabilities in the strategically vital field.

China imported more than 549 billion integrated circuits (IC) or microchips last year, an increase of nearly 15 per cent from 2023, according to customs data. The total value of the imports went up by more than 10 per cent in what was election year in the US, as firms rushed to stockpile chips fearing more stringent curbs under the next administration.

China imported close to 282 billion IC units in the first half of this year, up by nearly 9 per cent from a year earlier. Their value was over US$191 billion, an increase of around 8 per cent.

Last Wednesday, Jensen Huang, the CEO of American chip giant Nvidia, announced during a visit to Beijing that Washington had approved the company’s request to resume exports of H20 AI chips to China.

The made-for-China chip is less powerful than Nvidia’s gold-standard acceleration model and designed to comply with earlier export restrictions. But export to China was banned in April under tightened curbs.

The policy shift is widely regarded as a concession by Washington amid a comparative thaw in its trade conflict with Beijing, which has eased rare earth mineral access.

China urged to curb ‘neijuan’ by boosting domestic consumption, innovation-led growth

https://www.scmp.com/economy/china-economy/article/3319009/china-urged-curb-neijuan-boosting-domestic-consumption-innovation-led-growth?utm_source=rss_feed

Stimulating consumer demand and encouraging sustainable innovation are vital to China’s efforts to combat excessive competition – termed - and could even help turn the trend into a virtuous cycle, analysts said.

Top-down macroeconomic policies are also crucial, as actions taken by enterprises alone are insufficient, they added.

“The essence of ‘involutional’ competition is inefficient competition in a limited market space,” analysts from China International Capital Corporation (CICC) said in a research note.

“Therefore, boosting demand to create an ‘incremental cake’ by expanding the scale of market demand can provide a favourable macro environment to combat involution.”

The term neijuan, or “involution”, refers to a self-defeating cycle of excessive competition in which companies are forced to invest increasing resources without benefiting from proportional returns.

To tackle the roots of the problem, companies must increase research and development and offer differentiated products – fostering a positive, demand-driven cycle, the CICC analysts said in the July 17 note.

China’s top leaders have raised the alarm in recent weeks. In a meeting chaired by President Xi Jinping on July 1, the Central Finance and Economic Affairs Commission said Beijing needed to “guide enterprises to improve product quality and promote the orderly exit of outdated production capacity”.

This signalled a willingness by the central government to steer industries towards innovation-led growth and incremental profits, analysts said.

“Anti-involution seeks to induce healthy competition among firms to promote sustainable innovation,” the CICC note’s authors said. Both insufficient and excessive competition can stifle innovation, while only appropriate levels of competition can maximise performance, they added.

Terence Chong, Associate Professor of Economics at the Chinese University of Hong Kong, said a healthier competitive landscape emerges when firms compete based on unique products.

“Companies can use new technologies to lower costs and even price their products higher than competitors to achieve differentiated competition,” he said.

Analysts also urged policymakers to introduce stronger demand-side stimulus.

Zhao Yanjing, an economics professor at Xiamen University, said excessive competition stemmed from rapid labour market growth outpacing expansion in capital markets – and that macroeconomic intervention was necessary.

“Can ‘involution’ be solved simply by enterprises? No!” Zhao wrote in his article Involution Governance is a Macro Issue, published in July.

“It’s like a person being trapped in a descending lift. No matter how high he jumps, he can’t change the downward trend of the lift. The problem can only truly be solved when the lift itself stops falling.”

“Only when the climate warms up can plants sprout and flourish. Similarly, only when the capital market is revitalised can the entire economic environment be fundamentally freed from involution.”

Australian investment bank Macquarie Group said in a note earlier this month that Beijing must launch major demand-side stimulus to offset the shock of capacity cuts and reduce price competition.

Earlier last week, Premier Li Qiang chaired an executive meeting of the State Council to review the implementation of key policies aimed at strengthening domestic circulation. The meeting called for special initiatives to boost consumption and a “systematic clean-up” of unreasonable restrictions that limit household spending.

Competition has intensified in the e-commerce delivery sector since the beginning of July, when Meituan, Alibaba and JD.com rolled out new subsidies to attract consumers. Alibaba owns the South China Morning Post.

On Friday, the State Administration for Market Regulation held a meeting with the three companies, urging them to approach competition rationally and create an ecosystem that benefits consumers, merchants, riders and platforms.

There is also ongoing debate over whether the behaviour of the firms amounts to neijuan.

On July 16, the state-owned Economic Daily wrote that “platform-based food delivery, alongside hard-tech achievements like high-speed rail breakthroughs… represents two facets of Chinese innovation – overcoming ‘chokehold’ technologies and making people’s lives and employment more convenient – and we need both”.

Xu Ke, Director of the Digital Economy and Legal Innovation Research Center at the University of International Business and Economics, called the expansion of e-commerce platforms into instant retail an “evolution” marked by three trends – expanding scale, improved services and technological innovation.

“It could become the best testing ground for the low-altitude economy, as instant retail can drive the self-sustaining iteration of this industry, powered by drone deliveries, and promote a series of technological innovations in aircraft, AI algorithms and more.”

‘Eliminate toxic influences’: China’s military issues new political guidelines after wave of corruption cases

https://www.scmp.com/news/china/military/article/3319030/eliminate-toxic-influences-chinas-military-issues-new-political-guidelines-after-wave-corruption?utm_source=rss_feed

China’s top military body has issued a new set of guidelines for political officers following a series of corruption cases.

The regulations, released by the Central Military Commission (CMC), were designed to “strengthen political loyalty”, according to the official newspaper PLA Daily. It stressed the importance of Communist Party officials embedded within the military “acting with fairness and integrity in personnel matters, and leading by example”.

A commentary published by the newspaper on Monday said the new rules drew “clear political red lines, boundaries on the exercise of power and limits on social interactions”, and “represented a solemn commitment to the entire military”.

The report did not say when the new rules had been issued and the full text has not been made public.

The guidelines come in the wake of an anti-corruption purge that has seen more than a dozen People’s Liberation Army generals and some defence industry executives being placed under investigation.

President Xi Jinping has repeatedly emphasised the importance of party loyalty to strengthen ideological control and support China’s goal of becoming a military superpower.

PLA Daily said cadres were required to “set an example through their own actions, and inspire the troops and earn the trust of officers and soldiers through a strong work ethic and exemplary image”.

The “regulations on vigorously promoting fine traditions, fully eliminating toxic influences, and rebuilding the image and authority of political cadres”, laid out strict standards for political cadres, saying they should “take the lead in building credibility, and strictly eliminate malpractice”.

A commentary published in PLA Daily said “building a politically loyal, combat-focused, and well-disciplined political workforce requires a spirit of thorough self-reform to confront deep-rooted problems and eliminate factors that harm the [PLA’s] image and authority”.

Last month, Miao Hua, a top general who once oversaw the PLA’s ideology work, was removed from the CMC.

His dismissal followed the removal of former defence minister Li Shangfu from the CMC in October 2023. Li’s predecessor Wei Fenghe is also under investigation on suspicion of corruption and expelled from the party.

He Weidong, the second-ranked vice-chairman of the CMC and one of the 24 members of the Communist Party’s Politburo, has not been seen in public since the end of the annual legislative session in March and has missed a number of public engagements since then.

He is the third most powerful commander of the PLA and is considered a close associate of Xi.

Last month, it was also announced that Vice Admiral Li Hanjun, the navy’s chief of staff, had been expelled from the national legislature – a clear hint that he is also facing disciplinary action.

At least 16 military lawmakers have been removed from the National People’s Congress since its current term began in March 2023.

---

Nvidia CEO Jensen Huang wins hearts of millions in China with Tang suit, rusty Mandarin

https://www.scmp.com/news/people-culture/china-personalities/article/3318983/nvidia-ceo-jensen-huang-wins-hearts-millions-china-tang-suit-rusty-mandarin?utm_source=rss_feed

Nvidia CEO Jensen Huang captivated millions of Chinese fans by donning a Tang suit and speaking in rusty Mandarin at the third China International Supply Chain Expo (CISCE), marking his third visit to China this year.

The five-day event, which opened in Beijing on July 16, focused on global supply chain innovation and collaboration in sectors such as smart vehicles and clean energy.

Renowned for his signature black leather jacket and jeans, Huang has earned the moniker “Leather Jacket Guy” in mainland media.

Even in Beijing’s sweltering summer heat, he was spotted posing in his heavy leather jacket alongside Xiaomi founder Lei Jun.

When local reporters inquired about his outfit, Huang humorously pointed out that his only suit was still at the dry cleaner.

“I only have that one suit, and it is a bit worn out,” he replied, eliciting laughter from the crowd.

However, for the Expo’s opening ceremony, Huang made a noteworthy wardrobe change, stepping onto the stage in a traditional Chinese Tang suit.

However, this time he did not provide any details about his decision to wear a Tang suit.

His fashion choice garnered praise on mainland social media, with comments describing him as “dignified” and “ideal for traditional Chinese attire.”

Others remarked that his Tang suit conveyed a “friendly signal” to China, adding, “China always welcomes approachable, charismatic entrepreneurs.”

Huang also surprised many by beginning his speech in Mandarin, a clip that rapidly went viral and garnered over 9 million views on Weibo.

He said it was at the request of Ren Hongbin, the chairman of the China Council for the Promotion of International Trade, which hosted the expo.

Huang does not maintain a personal account on any social media platforms.

In Mandarin, he stated, stumbling slightly: “I am very happy to be here in China. This is my first time at the China International Supply Chain Expo.

“It is such a grand event with a vibrant atmosphere that showcases China’s strong belief in innovation and encourages the spirit of craftsmanship.”

Switching to English with a smile, he noted that he would continue the rest of his speech in English, “so I don’t torture you for the rest of the day,” prompting hearty laughter from the audience.

Huang’s easy-going charm and approachable demeanour have resonated deeply with many Chinese fans.

One online observer commented: “His Mandarin pronunciation is surprisingly good, especially the tones.”

“Looks like Huang is ready to forge deeper ties with China. Maybe next time he will serenade us with a Chinese song,” another netizen quipped.

In an interview with state broadcaster CCTV, Huang shared that he was born in Taiwan but raised in the US, where he stopped speaking Chinese at the age of five.

“So I have to learn it along the way and keep practising. Even during the three days I have spent in Beijing, I feel like my Chinese is improving,” he said, admitting that he nervously practised his Mandarin speech in his hotel room the night before.

The 62-year-old self-effacing billionaire has emerged as a global superstar, recognised as much for his technological leadership as for his friendly, approachable nature.

Forbes estimated his net worth at US$149 billion in July 2025, ranking him as the world’s sixth richest person.

Offstage, Huang is often seen mingling at street food stalls or barber shops, happily signing autographs, posing for photos, and even once singing with street performers in Taiwan.

---

Chinese officials call on carmakers to clamp down on price spiral

https://www.scmp.com/economy/china-economy/article/3319011/chinese-officials-call-carmakers-clamp-down-price-spiral?utm_source=rss_feed

In discussions with major carmakers, China has repeatedly brought up the “irrational competition” driving down prices – an economy-wide issue threatening the buoyancy of emerging growth drivers, particularly new energy vehicles (NEVs) – calling for firms to establish lasting standards to ensure fair and orderly market activity.

As Beijing seeks to rein in a cutthroat price war driving down growth potential in the sector – a trend that is also fuelling deflationary pressure – industry leaders gathered in the capital for two symposia held over two consecutive days, according to two statements released by the Ministry of Industry and Information Technology (MIIT) late Friday. Officials present instructed companies to take action and reverse the slide.

“It is vital to recognise the extreme urgency of curbing irrational competition in the NEV industry,” said Che Jun, deputy head of a central guiding group, at a meeting with the China Association of Automobile Manufacturers, the foremost trade association for carmakers. Representatives from Beijing Automotive Industry Holding and BYD also attended.

Guiding groups are dispatched by the Central Committee of the ruling Communist Party to provide supervision and guidance to localities and industries relevant to the group’s designated area of focus.

Che stressed that the problem is prone to recurrence and therefore requires sustained, long-term efforts. Leading companies should set an example for the rest of the industry, he added, by engaging in lawful and rational market competition.

The other symposium was held by MIIT, the National Development and Reform Commission and the State Administration for Market Regulation, with representatives from 17 leading carmakers present. The assembled government bodies said healthy industrial development should be promoted through cost oversight and price monitoring.

Officials called on carmakers to make timely payments to suppliers, practice greater self-discipline to ensure fair competition and establish a mechanism for intra-industry communication and to support the construction of a “unified national market”.

They also recommended the introduction of industry standards for battery recycling and safety.

With government subsidies gradually being phased out and electric vehicle (EV) technology maturing, the focus of firms should shift from lowering prices to meeting consumers’ real demands, said Zhang Yejia, managing director of the Automotive Industry Centre at CCID Consulting.

“Carmakers should leverage technological advantages to enhance product features, including battery development and autonomous driving, thereby reducing over-reliance on price-based competition,” he said.

Intense and often destructive competition within a given sector, also known as “involution”, has been particularly acute in products like EVs which are burdened by excess capacity.

As a result, profits have also been eroding. While car sales increased in China for the first five months of this year, with growth of 11.7 per cent, sales revenue rose by only 7 per cent and profits declined by 11.9 per cent, according to data released earlier this month by the China Passenger Car Association.

China robotics firm Unitree eyes IPO filing this year as industry starts to commercialise

https://www.scmp.com/tech/article/3319018/china-robotics-firm-unitree-eyes-ipo-filing-year-industry-starts-commercialise?utm_source=rss_feed

Unitree Robotics has filed pre-initial public offering (IPO) documents with China’s securities regulator, a move that analysts said signalled that the industry is moving from “laboratory to commercialisation”.

The Hangzhou-based start-up hired Citic Securities to “assist the company in preparing documents to apply for an IPO and listing” by December, according to a document filed with the China Securities Regulatory Commission’s (CSRC) Zhejiang branch, which was published on Friday.

Unitree said that over the next three months, its employees would learn what they would need to do as part of a listed company and it would make sure its property, trademarks and patents were properly handled. It also said it would set out clear business objectives.

The company was on track to become the first humanoid robot maker to list on a mainland bourse. Earlier this month, Shanghai’s AgiBot said it would buy a controlling stake in publicly traded Swancor Advanced Materials, paving the way for a back-door listing. But AgiBot said that was not its intention.

Hong Kong has some listed robotics stocks, including UBTech Robotics and Dobot Robotics. Both are based in Shenzhen.

The interest in stock markets reflected the growing need of China’s robot makers to raise more funds as they move towards commercialisation, analysts said.

“When a leader in the technology sector starts with an IPO, it often means that the industry has moved from ‘laboratory technology breakthroughs’ to ‘product scale-up and commercialisation’”, said Qian Wenying, the secretary general of the Research Centre for AI and Management Innovation at the China Europe International Business School.

She added that IPO proceeds for robot makers would be used to improve technologies, including syncing hardware with artificial intelligence models and motion control systems. She added that they would also be used to cut production costs and for product launches.

Financing for the sector has been growing. As of Sunday, total funding for the sector in China this year reached 31.8 billion yuan (US$4.4 billion), double the amount from the year-earlier period, according to data from ITJuzi, which tracks China’s venture-capital market.

On Monday, Chinese e-commerce giant JD.com unveiled investments in three robotics start-ups: Engine AI, LimX Dynamics and Spirit AI.

In June, Unitree reached unicorn status with a new funding round that valued it at more than 10 billion yuan (US$1.3 billion). Investors included Post owner Alibaba Group Holding and affiliate Ant Group, Tencent Holdings, China Mobile, carmaker Geely and Jinqiu Capital, an investment firm founded by former ByteDance employees.

ITJuzi content analyst Wu Meimei said that going public would also help a company raise its brand awareness.

Hong Kong-listed UBTech secured a 90-million-yuan purchase from state-owned car exporter MiEE (Shanghai) Automotive Technology, by far the largest deal in the humanoid industry, according to a Friday filing on the China Tendering and Bidding Public Service Platform.

Meanwhile, Unitree and AgiBot also struck deals with telecoms operator China Mobile, worth 46 million yuan and 78 million yuan, respectively, according to a notice in late June.

Unitree founder and CEO Wang Xingxing, who has a controlling 34.8 per cent stake in the company, said last month that the company’s annual revenue had surpassed 1 billion yuan.

---

China says US Wells Fargo executive is banned from leaving country due to ‘criminal case’

https://www.scmp.com/news/china/diplomacy/article/3319003/china-says-us-wells-fargo-executive-banned-leaving-country-due-criminal-case?utm_source=rss_feed

China has confirmed that it barred a senior Wells Fargo executive from leaving the country, saying it banned her exit because of a “criminal case” investigation.

Last week, reports surfaced that Chenyue Mao, an Atlanta-based managing director at the American banking giant and a United States citizen, had been stopped from leaving China. In response, Wells Fargo has suspended all business travel to China.

“Ms Mao Chenyue is involved in a criminal case currently being handled by Chinese law enforcement authorities and is subject to the exit restrictions in accordance with the law,” Chinese foreign ministry spokesman Guo Jiakun told a press conference on Monday.

He said the case was still under investigation and that Mao “cannot leave the country for the time being”.

Mao also “has the obligation to cooperate with the investigation pursuant to Chinese laws,” Guo added, but he did not elaborate on the details of the case in which she was alleged to be involved.

“No matter whether they are Chinese or foreigners, they should abide by Chinese laws in China,” Guo said. “We will protect her lawful rights and interests during the investigation … it is an individual judicial case.

“China will, as always, welcome people from all countries to travel and do business in China and protect their rights and interests in accordance with the law.”

Beijing has in recent years imposed travel restrictions on both Chinese and foreigners.

The country’s use of the so-called exit bans has been a flashpoint in the US-China relationship. The US State Department has repeatedly advised American citizens to reconsider travel to China based on what it called the “arbitrary enforcement of local laws, including in relation to exit bans”.

The South China Morning Post reported on Sunday that an American citizen working for the US Commerce Department’s Patent and Trademark Office had for months been blocked from leaving China, possibly on national security grounds.

When asked about the exit ban on the US government worker, Guo said, “I have no information to share”.

“China is a country upholding the rule of law and we handle relevant cases in strict accordance with the law,” he said.

China-Singapore team’s nanovaccine suppresses cancer recurrence and spread in animal tests

https://www.scmp.com/news/china/science/article/3318972/china-singapore-teams-nanovaccine-suppresses-cancer-recurrence-and-spread-animal-tests?utm_source=rss_feed

A joint China-Singapore research team is using nanoparticle technology to create a cancer vaccine that has produced promising results in animal tests – reducing the regrowth and spread of tumours up to seven times more effectively than existing treatments.

The nanovaccine attacks not only regular cancerous cells but also cancer stem cells (CSCs), which can lie dormant within tumours during treatment, only awakening when conditions are more favourable to the disease.

The bioinspired approach developed by the researchers, led by Yang Yanlian from the National Centre for Nanoscience and Technology and Chen Xiaoyuan from the National University of Singapore, has potential for personalised cancer vaccines.

The researchers detailed their findings in a paper published last month by the peer-reviewed Nature Nanotechnology.

Post-surgical recurrence and metastasis of cancers are mainly driven by CSCs, which are highly resistant to conventional therapies. Some studies have even suggested that traditional treatments like radiotherapy may inadvertently promote their spread.

The body’s normal stem cells work continuously, whether generating blood or helping to renew the gut’s lining every three to five days. But their unique self-renewal and unlimited proliferation qualities are also harboured by CSCs within tumours.

In an interview with China Science Daily published on July 2, Yang likened CSCs to a tumour’s “special forces” because of their ability to survive treatment by going into a dormant period, before reawakening and resuming activity.

“CSCs possess self-renewal and differentiation capabilities – they not only proliferate into tumour cells but also generate heterogeneous cancer cell populations, accelerating recurrence and metastasis,” she said.

“Current targeted chemotherapy and antibody therapies effectively kill ordinary tumour cells with minimal harm to the body. However, they struggle against CSCs. Even if just 1-5 per cent of CSCs remain, they can cause relapse. Only by completely eradicating CSCs can we suppress recurrence and metastasis.”

According to the paper, the researchers discovered in 2021 that the immune system could simultaneously attack tumour cells and CSCs, but the exact activation mechanism remained unclear.

A major hurdle was that vaccine effectiveness was often weakened because dendritic cells – the immune system’s “scouts” that present tumour antigens to T-cells – contained proteases, the researchers said.

These protein-degrading enzymes, found in the cellular waste processors called lysosomes, break down vaccine proteins, impairing immune activation. The team combined expertise in nanotechnology and chemistry to overcome this challenge.

The researchers said the nanovaccine had three key features that made it effective, starting with an outer shell of tiny, bubblelike particles taken from tumorous cell membranes.

The particles contain two important markers – cancer-specific antigens that act like ID cards to identify CSCs and tumour-associated antigens that mark regular tumour cells.

The vaccine’s second special feature is a targeting molecule on its surface that works like a specific key that identifies and unlocks only the receptors on dendritic cells.

Finally, the vaccine used small interfering RNA (siRNA) molecules to temporarily shut down the lysosome’s production of proteases, allowing longer antigen exposure which triggered a stronger T-cell response, the researchers said.

“In breast cancer and melanoma mouse models, [the nanovaccine] significantly suppressed tumour growth, extended survival, reduced CSC populations, inhibited post-surgical recurrence and distant metastasis,” Yang wrote.

“In a tumour surgical resection model, [the vaccine] substantially inhibited post-surgical recurrence and distant metastasis mediated by residual CSCs,” she added.

“Critically, treated mice showed no toxicity – normal blood tests, healthy organ tissue, stable weight, and unaffected long-term blood stem cells – confirming the vaccine’s safety.”

The team is now aiming to develop an injectable formulation, according to China Science Daily. Because the nanovaccine could be customised using a patient’s own tumour cells, the vaccine held promise as a personalised cancer treatment, it said.

However, Yang cautioned that long-term biosafety assessments in larger animal models would need to be made before the vaccine could progress to clinical trials.

Chinese open-source AI models occupy top spots among global developers: ranking

https://www.scmp.com/tech/big-tech/article/3318985/chinese-open-source-ai-models-occupy-top-spots-among-global-developers-ranking?utm_source=rss_feed

China is home to the world’s top artificial intelligence (AI) models that are open-sourced, according to an American benchmarking platform created by researchers from the University of California, Berkeley.

Kimi K2, MiniMax M1, Qwen 3 and a variant of DeepSeek R1 were ranked as the world’s top open-sourced AI models, beating out offerings like Google’s Gemma 3-72B and Meta’s Llama 4-Maverick, LMArena said in a report on Friday.

The winners were determined by “comparing them side by side and casting votes for the better response”, LMArena said on its website. The platform, previously known as Chatbot Arena, has been used by major AI companies like OpenAI and Google to assess their AI models.

LMArena highlighted the progress of Kimi K2, the top model on the list, which was launched by Chinese AI start-up Moonshot AI on July 11. Moonshot said it open-sourced two versions of Kimi K2.

On its X account on Friday, LMArena said Kimi K2 was “one of the most impressive” open-source large-language models (LLMs) to date, adding that it was gaining popularity because its user responses were “humorous without sounding too robotic”.

DeepSeek R1-0528, a fine-tuned version of the model launched by Hangzhou-based start-up DeepSeek at the beginning of the year, came in second as it was “strong in multi-turn dialogue and reasoning tasks”, the platform said.

The ranking was the latest sign that Chinese AI companies have been narrowing the gap with their US peers by using an open-source approach, making the source code and model weights of the AI models available for anyone to use, modify and distribute.

With the December 2024 launch of DeepSeek’s free-for-all V3 LLM and the January release of DeepSeek R1, which rivals the capabilities of OpenAI’s o1, the open-source movement has sent shock waves through Silicon Valley and Wall Street.

Alibaba Group Holding, the Hangzhou-based e-commerce and cloud computing giant, has also emerged as a key player in the wave of open-sourced AI. The company’s Qwen 3-235b-a22b-no-thinking, a version of its Qwen 3 LLM series launched in April – with 235 billion total parameters – was ranked third by LMArena for “its raw reasoning power”. Alibaba owns the Post.

According to a separate ranking by the platform Hugging Face last month, three of the four top-10-ranked Chinese LLMs were from the Qwen series.

Jensen Huang, CEO of Nvidia, also praised China’s progress in open-sourced AI during his visit to China last week, as his company prepared to resume shipments of its advanced H20 chips to one of its largest markets following a breakthrough in Sino-US trade talks in June.

DeepSeek’s models, Alibaba’s Qwen and Moonshot’s Kimi were “the best open reasoning models in the world today”, and were “very advanced”, Huang said on Thursday.

---

Chinese bond ETFs top US$50 billion in assets managed in frenzy spurred by deflation

https://www.scmp.com/business/banking-finance/article/3318976/chinese-bond-etfs-top-us50-billion-assets-managed-frenzy-spurred-deflation?utm_source=rss_feed

Chinese investors are snapping up exchange-traded funds (ETFs) that track bonds, betting on their lower costs and diversified exposure to profit from an environment of stubborn deflation and policy support for the corporate sector.

Assets managed under such ETFs surged to more than US$50 billion at the end of June, up from $10 billion at the beginning of last year, according to Bloomberg data. The number of those targeting corporate notes increased sixfold since the end of last year to become the fastest-growing segment, accounting for more than half of all bond ETFs.

The bond ETFs appealed to investors with cheaper costs, potentially higher returns, as well as coveted exposure to some of the country’s burgeoning technology firms. They also offered better liquidity and lower default risks than investing directly in corporate debt, with some even eligible to be used as collateral for short-term borrowings.

They have surged in popularity as investors hedged against an uncertain outlook for the Chinese economy, given unresolved trade frictions with the US and persistent deflationary pressures caused by weak consumption. The rapid expansion, which could stoke volatility, was driven by private funds, banks and proprietary desks at brokerages.

“Chinese investors’ demand for low-risk, fixed-income assets keeps growing, so bond ETFs became an ideal candidate, given their liquidity advantage and diversified holdings,” said Rachel Sun, director of China manager research at Morningstar (Shenzhen). “Market expansion and product innovation have provided a rich pool of underlying assets.”

While China’s central bank has vowed to keep monetary conditions loose, it has also repeatedly warned about risks from excessive bond rallies. With yields already near record lows, government debt was considered a crowded and less rewarding trade.

In comparison, fixed-income ETFs offer investors not only capital gains but also access to higher-yielding corporate notes, which have expanded their presence in the product’s underlying asset mix.

China has added 18 credit-focused ETFs this year – including 10 this month – tracking tech bonds whose issuance spiked following a central bank initiative to support the sector’s financing. Of the eight such ETFs launched at the beginning of this year, five ranked among Asia’s top 10 funds that had the biggest inflows in June, with ChinaAMC SSE Market-Making Corporate Bond ETF topping the list by attracting $2 billion, according to Bloomberg Intelligence.

“Investors rarely talked about bond ETFs before last year, but then we started to see the demand growing,” said Qiu Wenzhu, a fixed-income analyst at Huatai Securities. “This year, bond ETFs have become all the rage.”

Private funds used the products to expand investment into the interbank market and banks were diversifying into corporate and convertible bonds and proprietary desks at brokerages loved their flexibility and low costs, Qiu said, adding that the ETFs’ more liquid nature also drew interest from retail investors.

Besides advantages like allowing investors to buy and sell on the same day, some of the bond ETFs can also act as collateral for borrowing short-term funds following the launch of a trial programme that began in June. The ChinaAMC SSE Market-Making Corporate Bond ETF saw its trading volume surge to a record 17.7 billion yuan (US$2.5 billion) on July 8, the highest among all types of listed securities in China.

“Plus, investors only take average market credit risks via ETFs,” said Li Jun, deputy general manager at Fortune & Royal Asset Management. “Even if one of the bonds in the portfolio defaults, it won’t be disastrous for holders.”

To be sure, if the bond ETFs become an overheated trade, it may exacerbate price swings for underlying assets, leading to outsize selling or buying.

“The expansion of the ETF market is likely to result in higher volatility in the overall credit market,” Caitong Securities analysts including Sun Binbin wrote in a July 8 report.

Still, the investor frenzy over the passive investment products appeared unstoppable for now.

Wang Haochuan, bond investment director at Shenzhen Kaifeng Investment Management, said the private investment house was increasing its asset allocation into bond ETFs.

“Bond ETFs will continue to be our main vehicle for fixed-income investments and cash management,” he said, adding that active investing was no longer cost-effective given low bond yields and tight credit spreads.

---

China officials order cleaners to sift through tonnes of rubbish for lost watch, spark outrage

https://www.scmp.com/news/people-culture/article/3318400/china-officials-order-cleaners-sift-through-tonnes-rubbish-lost-watch-spark-outrage?utm_source=rss_feed

A local government in China has been panned by internet users for making two cleaners spend four hours in the scorching heat searching for a small watch lost by a tourist.

In early July, a woman from Shenzhen, southern China, took her child to Datong in the northern province of Shanxi by train.

She accidentally put her child’s smartwatch in a rubbish bag near their seat, then left the train, Red Star News reported.

The gadget has a positioning function which showed it was still in the railway station.

The next day, the mother, surnamed Lu, followed the advice of a friend to call the hotline of the Datong municipal government, asking if they could retrieve the watch from the station.

Then, an employee from Xincheng Environment Company, a public-funded rubbish dealing enterprise affiliated with the municipal Urban Administration Bureau, contacted Lu.

They had discovered that the watch had been put in a huge container with eight tonnes of waste material before being moved to a rubbish transfer station.

The company transported the rubbish in the container to a large outdoor area.

Two cleaners were then told to sift through the piles of waste with their bare hands to retrieve the watch.

It took the workers more than four hours to find the in temperatures over 30 degrees.

Lu offered to give a cash award to the workers, but her offer was declined, the report said.

The incident has since been promoted by the local authorities as an example of the region’s hospitality and considerate public service for tourists.

However, the authorities have come under fire online by people questioning whether it was worthwhile to spend so much effort to retrieve a watch.

Some people also criticised the government for not sympathising with the two cleaners.

Amid public pressure, Xiao Zhigang, vice director of Datong Urban Administration Bureau, defended the government by saying: “So what is worthwhile and what is not? I think this is just what we ought to do.

“As long as there is a demand from the public, we must do it,” he was quoted as saying.

Mainland internet users generally did not agree with Xiao’s justification for the actions.

“I am stunned by their great efforts for such a small thing which is probably worth just a few hundred yuan. I just do not understand it,” one online observer said.

The Guangdong-based Southern Metropolis News published an editorial on July 14 in which it lambasted the Datong government.

“If the lost item is expensive or vital, such as a laptop or an artificial cochlea, it is logical to trigger the response of trying to retrieve it. But in this case, their great efforts do not match the value of a lost watch that could be bought everywhere and is sold for less than 1,000 yuan (US$140),” the editorial read.

It went on to say: “Another issue has been avoided. Did the two hard-working cleaners get any award? The authorities refrained from mentioning whether they received any extra pay for this onerous task.

“What is the point of promoting this incident which involves the waste of public services and exploitation of grass-roots workers?” the editorial concluded.

China slams EU banking sanctions as tensions rise ahead of key summit

https://www.scmp.com/economy/china-economy/article/3318966/china-slams-eu-banking-sanctions-tensions-rise-ahead-key-summit?utm_source=rss_feed

Beijing has called on the European Union to “immediately cease its wrong practice” of sanctioning two Chinese banks, vowing to take action to defend the interests of Chinese companies just days ahead of a key leaders’ summit between the two sides.

“China expresses strong dissatisfaction and resolute opposition to this move,” China’s Ministry of Commerce (Mofcom) said in a statement on Monday.

“China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies and financial institutions.”

On Friday, in its latest package of measures designed to hobble Russia’s war machine, the EU announced sanctions on two small Chinese banks from cities close to China’s border with Russia: Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank.

This came as both sides prepared for a high-stakes summit in Beijing on Thursday, where European Commission President Ursula von der Leyen and European Council President Antonio Costa are scheduled to meet Chinese President Xi Jinping and Premier Li Qiang, according to China’s Ministry of Foreign Affairs.

Beijing had lobbied intensively behind the scenes to get the banks removed from the package, according to sources familiar with the exchanges. During a meeting with the EU’s top diplomat, Kaja Kallas, earlier this month, Chinese Foreign Minister Wang Yi warned “three or four times” that there would be a response to the banks’ inclusion, the sources said.

The details of the package have yet to be released, 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’s sanctions were “based on unfounded accusations”, Mofcom said.

“China has consistently opposed unilateral sanctions that lack a basis in international law and are not authorised by the United Nations Security Council. The EU’s actions run counter to the spirit of the consensus reached by Chinese and European leaders and severely undermine China-EU economic, trade and financial cooperation,” it added.

The sanctions are just the latest in a series of disputes to flare up between China and the EU ahead of the summit, with the two sides also at loggerheads over China’s export controls on rare earths, European tariffs on Chinese-made electric vehicles, and market access rules, among many other issues.

In recent weeks, von der Leyen has made several sharply worded speeches attacking China’s trade practices and close ties with Russia, which have dampened expectations on the European side that the upcoming summit might produce a meaningful breakthrough in relations.

New railway lines put Guinea and Algeria on track to send iron ore to China

https://www.scmp.com/news/china/diplomacy/article/3318968/new-railway-lines-put-guinea-and-algeria-track-send-iron-ore-china?utm_source=rss_feed

China is poised to begin receiving iron ore shipments from Guinea and Algeria this year, as Chinese firms complete the railway lines and ports needed to overcome logistical bottlenecks.

For years, the lack of railway infrastructure connecting mine sites to port facilities had stymied iron ore exports from both nations.

These massive projects are strategically important to China as it tries to diversify its supply of iron ore away from Australia and Brazil, which together account for about 80 per cent of seaborne exports.

Simandou, in the remote southeast of Guinea, is one example. It is said to have the world’s largest undeveloped iron ore deposit, and to get that moving a new railway line stretching up to 650km (400 miles) to the Atlantic coast was needed.

Likewise, in Algeria, there is another significant iron ore deposit at the Gara Djebilet mine deep in the southwestern Sahara Desert, near the Mauritanian border. That is about 1,650km away from Mediterranean ports – a distance that will be bridged by a combination of new and upgraded railway lines.

In Guinea, Simandou is now on track to start shipping iron ore from November, according to Rio Tinto, the Anglo-Australian mining giant jointly developing the project with Chinese companies.

It is expected to ship between 500,000 to 1 million tonnes of iron ore this year, then ramp up over 30 months to full capacity of 60 million tonnes annually, Rio Tinto chief executive Jakob Stausholm said last week.

The fast-tracked plan has been bolstered by the completion of the ballasted track of the Transguinean Railway – also known as the CTG Railway, designed by China Railway Construction Corporation (CRCC) – which paves the way for testing and commissioning.

“Once operational, the railway will serve as a vital channel for Guinea’s mineral transport, boosting efficiency and driving resource circulation in the region,” CRCC said on July 11, adding that “this vital link will enhance Guinea’s mining competitiveness and economic growth”.

SimFer, a joint venture involving Rio Tinto and China’s Chalco Iron Ore Holdings (CIOH), is developing and will operate Blocks 3 and 4 of the mine, targeting annual production of 60 million tonnes. Rio Tinto said the mine development, railway spur and port construction were all ahead of schedule.

The group holding the concession to Blocks 1 and 2 of the mine – Winning Consortium Simandou, in which China Hongqiao Group’s Weiqiao Aluminium has an interest – also confirmed plans to ship its first iron ore by the end of 2025.

Most of the iron ore from Simandou is expected to go to China given that Chinese firms – including China Shandong Weiqiao Group and state-owned China Baowu Steel Group – have invested heavily in the project.

In Algeria, meanwhile, the first 135km priority section of a railway line connecting Tindouf with the Gara Djebilet mine has been completed, according to the Algeria Press Service.

Chinese construction giant CRCC said it had to overcome strong heat, sandstorms and water shortages to build the railway line. It is part of a larger 950km railway project that will link the southwest and the north of the country via Tindouf and Bechar – enabling iron ore to be shipped from the mine to processing facilities, and for international export.

Abdelkader Mazzar, communications director of the National Agency for the Study and Monitoring of Railway Investments, said completion of the first section of railway marked a “major step” for the project.

Mazzar also told the Algeria Press Service that most of the remaining 575km of railway line – linking Tindouf and Hammaguir via Oum-Laâssel – had been built and was expected to be commissioned later this year.

Gara Djebilet is one of the world’s largest iron ore mines with an estimated 3.5 billion tonnes – about 1.7 billion tonnes of which is considered exploitable.

Ovigwe Eguegu, a policy analyst at Beijing-based consultancy Development Reimagined, said that with the railway projects in Algeria and Guinea completed, allowing iron ore to be exported, prices could come down.

Eguegu noted Moody’s projection that iron ore prices would hold at between US$80 and US$100 per tonne in the next 18 months but also pointed to market factors such as China’s changing demand for iron ore.

He said that while Chinese steel output had dropped by 9 per cent in June from a year ago, iron ore imports hit their highest monthly figure for 2025.

“So China shows decent demand, which is good news for African exporters,” Eguegu said.

New Shangri-La luxury brand lures rich Chinese tourists with unique cultural experiences

https://www.scmp.com/business/china-business/article/3318908/new-shangri-la-luxury-brand-lures-rich-chinese-tourists-unique-cultural-experiences?utm_source=rss_feed

Shangri-La Group has launched its super-luxury hotel brand in mainland China, Shangri-La Signatures, featuring a convergence of cultural heritage and nature aimed at attracting wealthy tourists amid a rebound in demand for leisure experiences.

The company was spearheading a move among global hoteliers to focus on unique offerings, operational agility and the evolving preferences of Chinese travellers to stay abreast of the competition.

“Affluent Chinese travellers, particularly millennials and Gen Z in mainland China, are reshaping the meaning of luxury,” said Ulrich Jablonka, general manager of the Silk Lakehouse at the Shangri-La Hangzhou, in an interview. “No longer defined solely by opulence, today’s luxury is rooted in authenticity, emotional connection, cultural depth and personal well-being.”

The Silk Lakehouse, located on the shores of Hangzhou’s West Lake – a Unesco World Heritage site – is the first outlet to open under the new brand, inaugurated in May.

Shangri-La, founded by Malaysian tycoon Robert Kuok Hock-nien in 1971, said each Shangri-La Signatures room would be a refined private residence, rooted in local heritage. The brand would also be expanded to other parts of Asia.

“In cities like Hangzhou where prime sites near the West Lake are becoming increasingly scarce, a well-positioned luxury hotel can surely stand out,” said Zhou Tao, head of hotels and hospitality at JLL in China. “High-net-worth travellers continue to place a premium on experiences that combine exceptional location with thoughtful design and cultural relevance and a product that delivers on these fronts is well placed to capture their attention.”

According to the property services firm, revenue per available room on the mainland dropped 5 per cent from a year earlier during the first five months of 2025. But luxury and upscale hotels showed resilience and experienced strong demand, Zhou said.

The Silk Lakehouse, with 68 rooms, was designed by Gert Voorjans from Belgium and Spanish designer Lázaro Rosa-Violán. It occupies the site of the former Xiling Hotel, where Chinese Premier Zhou Enlai met US President Richard Nixon in the 1970s.

The new hotel preserved the restored “Autumn in Yandang Mountain” clay sculpture by Chinese artist Zhou Jinyun, which was commissioned in 1971 to welcome the US president.

It also provides curated experiences to guests, including silk fan making, traditional scent clay making and Xiling seal carving.

Each room is equipped with artificial intelligence-equipped mattresses that adapt to guests’ sleep patterns while adjusting firmness and temperature.

Room rates in the Silk Lakehouse range from 4,000 yuan (US$557) to 8,000 yuan a night.

“Rather than positioning itself in direct competition with existing luxury hotels in Hangzhou, the Silk Lakehouse reimagines what luxury can be for today’s discerning traveller,” Jablonka said. “This direction is informed by a clear shift in consumer behaviour.”

Citing a survey by global consultancy McKinsey, Jablonka said more than 70 per cent of affluent Chinese travellers prioritised cultural and personal enrichment over displays of luxury, which created demand for immersive, story-led hospitality.

According to a survey by MDRi, part of the UK legal advisory firm Mishcon de Reya Group, 72 per cent of Chinese millennials and 65 per cent of Gen Z consumers valued activities that left lasting emotional impressions as the major reasons for them to spend on luxury lifestyles and experiences.

China’s hotel market was expected to grow at an annualised pace of 8.9 per cent, topping US$166 billion by 2028, thanks to increasing tourism, a growing middle class and government initiatives to promote the industry, business advisory firm Renub Research said in a report in 2023.

China’s plan to boost drug coverage by commercial insurers no ‘magic wand’, analysts say

https://www.scmp.com/business/article/3318950/chinas-plan-boost-drug-coverage-commercial-insurers-no-magic-wand-analysts-say?utm_source=rss_feed

Beijing’s plan to publish China’s first list of innovative drugs eligible for coverage by commercial health insurance will draw keen interest from pharmaceutical companies, but is not a “magic wand”, as insurers lack sufficient incentives to provide the coverage, analysts said.

The National Healthcare Security Administration, in charge of the state-run basic healthcare insurance scheme, said in a policy document on July 1 that it would publish the list this year, primarily including drugs that were not covered by state insurance but were highly innovative and provided clear improvements in medical outcomes.

The list would be a “major attempt to better meet the public’s multi-level and diverse drugs demand”, said Huang Xinyu, head of the administration’s medical services management department, on July 11, as reported by Xinhua.

Both domestic and multinational drug developers will likely be drawn to the initiative, but the same cannot be said of insurers, said Webster Guo, principal at L.E.K. Consulting’s China healthcare practice.

“There’s likely no harm for drug companies to apply [to have their products included],” he said. “If you are lagging behind your competitors, the downside could be significant.”

But the situation presented an “impossible triangle” for insurers, who would struggle to devise products that would achieve national coverage while providing sufficient reimbursement levels at a price that people were willing to pay, he said, because the source of funding was “not solved”.

Commercial health-insurance payouts of 383.8 billion yuan (US$53.5 billion) in 2023 covered only 6.8 per cent of total direct healthcare costs, while state basic health insurance covered 49.7 per cent and patients paid for 43.5 per cent themselves, according to the Shanghai Insurance Association.

Patients currently pay for thousands of drugs out of pocket.

Besides life insurers’ health products, more than 100 city-level public-private commercial health insurance schemes, called huiminbao, provide limited coverage for some of the more expensive drugs not covered by state health insurance. In a study of 56 of those plans, 70 per cent had a reimbursement ratio of less than 70 per cent in 2022, China Business News reported, citing a survey by membership-based health insurance platform Zhongtopia.

Some expensive medications for rare diseases and cell therapies, as well as multinational pharmaceutical firms’ immunotherapy cancer drugs, were likely to make it to the commercial insurance drug list, said Helen Chen, head of L.E.K. Consulting’s China bio-pharmaceuticals and life sciences practice.

Commercial insurance payouts for innovative drugs rose to 12.4 billion yuan last year from 7.4 billion yuan in 2023, according to Boston Consulting Group, suggesting that growth challenges remain, said Cui Cui, Jefferies’ head of healthcare research for Asia.

Health insurance remains a small profit contributor for insurance companies, because coverage has been limited by insufficient patient data and actuarial experience, she said, adding that more than 20 health insurers are struggling financially.

“Commercial health insurance is not the magic wand,” said Tony Ren, head of Asia healthcare research at Macquarie Capital, in a July 16 report. “The healthcare budget allocated to innovative drugs will not expand dramatically without direct government funding.”

This was because most commercial health insurers in China – mainly subsidiaries of state-backed life insurers – were loss-making and used health protection as a “loss leader” to drive sales of more lucrative life policies, he said.

“Without any mechanism to make commercial healthcare insurance profitable or [state] administrative targets for healthcare insurers, we do not believe there is any incentive for commercial insurers to participate,” Ren said.

To help insurers with risk assessment and product pricing, the administration said it would facilitate the sharing of clinical and insurance settlement data among the nation’s medical, health insurance and pharmaceutical institutions.

Chinese rust-belt city Hegang gambles on new airport, Russian trade to fuel revival

https://www.scmp.com/economy/china-economy/article/3318781/chinese-rust-belt-city-hegang-gambles-new-airport-russian-trade-fuel-revival?utm_source=rss_feed

A new airport project in Hegang, a rust-belt city near China’s northeastern border with Russia, marks a high-stakes effort at economic revival in a place better known for its cheap housing – where homes once sold for as little as 20,000 yuan (US$2,790), analysts said.

The initiative is part of a broader effort to revive the city’s economy after years of stagnant growth, industrial decline and a shrinking population. Hegang’s local population has dropped from about 1.1 million in the 2010s to 850,000 today, while its GDP decreased from 40.92 billion yuan (US$5.7 billion) in 2022 to 38.02 billion in 2024, according to official data.

Earlier this month, Hegang announced via its official WeChat account that construction on Luobei Airport would begin soon. The airport – backed by an estimated investment of 1.2 billion yuan – is scheduled to open in 2027.

Once completed, it is expected to accommodate 450,000 passengers and 1,600 tonnes of cargo annually, with a 2,500-metre runway and a 5,008-square-metre terminal, the local government said on July 1.

“Hegang’s airport is emblematic of how many small and mid-sized cities are trying to seek breakthroughs through the country’s new round of infrastructure,” said David Wong, a lecturer at Hang Seng University in Hong Kong, who has researched the link between air transport and regional inequality.

He added that the new airport could bring practical benefits, as areas with inadequate air links face enormous challenges in catching up with better-connected urban regions.

From a cost-efficiency standpoint, small regional airports – typically requiring about 1 billion yuan of investment each – are far cheaper than high-speed rail projects, which can cost tens or even hundreds of billions, Wong said.

Hegang currently lacks a high-speed rail connection and only launched a regional train service with a top speed of 160km/h in 2022.

Still, questions remain over the airport’s long-term viability.

Many small and mid-sized airports across China operate at a significant loss. In 2024 alone, the national airport sector posted losses of over 13 billion yuan, according to data from the Civil Aviation Administration of China.

While the central government offers subsidies of 10,000 yuan per flight hour, capped at 4 million yuan annually for each route, the support does little to offset the high operational costs.

“The airport’s construction is only the beginning. Whether it can attract enough passengers and cargo to operate sustainably is another matter – especially given Hegang’s worsening economic fundamentals,” Wong said.

Despite the risks, officials are pursuing a multi-pronged strategy to jump-start growth – and geopolitical shifts may present opportunities. Bordering Russia and hosting two national-level land ports, Hegang could benefit from growing bilateral trade, which reached US$244.8 billion in 2024, according to China Customs.

“Hegang’s proximity to Russia gives it a chance to become a regional logistics hub if border trade continues to expand,” Wong said.

Beyond trade, the city is also banking on tourism and graphite production to drive its revival. Hegang is home to Asia’s largest graphite mine, with dozens of related enterprises established to supply the booming new energy battery sector.

Thanks to its ice-and-snow tourism industry and cross-border travel, the city also welcomed over 6 million visitors in 2024, generating 4.8 billion yuan in revenue, according to its most recent government work report. Its low housing prices have also drawn digital nomads and young people in search of a slower-paced lifestyle.

Why China is surging ahead of Trump’s America in green energy race

https://www.scmp.com/news/china/science/article/3318864/why-china-surging-ahead-trumps-america-green-energy-race?utm_source=rss_feed

As US-China tensions continue, one contrast stands out sharply between the big power rivals – their approach to energy and climate issues.

Even as the Trump administration cripples green energy endeavours with executive orders and the “Big Beautiful Bill”, China is building on its title as the world’s largest renewable energy investor. According to the State Grid Energy Research Institute, China is expected to bolster its national power grid by a record 500 gigawatts (GW) of renewable energy capacity this year.

The energy debate unfolds with the rapidly warming world needing more clean energy than ever, especially as advancing technology drives up demand.

Artificial intelligence (AI) and other innovative technologies need substantial amounts of electricity to operate, as they rely heavily on data centres and powerful computing infrastructure. Countries worldwide are trying to increase energy production as they invest in new data centres that must be kept running round the clock, with the US and China leading the field.

With technology rivalry a central driver of the broader US-China tensions, Beijing has forged ahead with renewable energy goals and boosted related investment in its pursuit of a global tech lead.

In contrast, the Trump administration is cancelling tax credits for what it calls “unreliable ‘green’ energy sources like wind and solar” that “compromise America’s electric grid”.

US President Donald Trump has referred to wind farms as a “blight on our country” and large solar projects as “very, very inefficient and very ugly too”.

It is a sharp policy U-turn by the White House, considering solar power used to enjoy bipartisan support and was the fastest growing energy source in the United States last year, US Energy Information Administration data shows.

According to Zhang Shuwei and Huang Nanya, researchers at Draworld Environment Research Centre in Beijing, rejecting renewable power solely on the “unreliable power supply” premise is shortsighted. It is often electric grids that are not adequately equipped for intermittent power supply.

“Statistical fluctuations in renewable energy are not a problem; they require management, not a solution,” they wrote in an article last week on the social media account of the Chinese science website Zhishi Fenzi, or The Intellectual. The article analysed the widespread power outages in Spain and Portugal in April.

The discussion should not be about whether renewable energy could take over 100 per cent of the power system in a country, but about how to deal with expected and unexpected risks when building a balanced system, the researchers said.

They explained that China had taken a macro-level approach, which depended on a balanced power system able to handle momentary shortages of micro-level components such as renewable energy as just one part of the energy mix. “China places greater emphasis on durability in extreme situations,” they said, adding that this could bring more costs in non-extreme times but was an economic and political decision made at the government level.

In contrast, America’s more component-focused strategy towards clean energy growth faced challenges in grid integration and balancing variability.

To feed AI demand, Washington plans to invest in coal – known to be the dirtiest fossil fuel and a major contributor to air pollution – alongside natural gas, nuclear and hydropower plants. Just last Tuesday, private firms pledged tens of billions of dollars for energy and technology investments in Pennsylvania, but that did not include renewable energy. How the new policies will impact the sector in the long run remains to be seen.

China, meanwhile, is investing heavily in its energy infrastructure and new transmission lines to integrate clean energy projects into the existing grid, as laid out in its new renewable energy plan.

Although China still relies heavily on coal and crude oil, which provide roughly 80 per cent of its electricity as per data from the International Energy Agency (IEA), renewables contributed 35 per cent of the country’s total power generation in 2024, according to official data.

Tencent, one of China’s biggest internet and tech companies, launched a microgrid project last year at their Tencent Tianjin High-Tech Cloud Data Centre. According to the company website, it is a “distributed new energy microgrid project that connects to the main public grid and generates green electricity”.

As part of the project, Tencent has installed solar panels on top of their data centre, which now doubles as a power plant. This does not account for all of the needed energy, but “the project is a critical step in Tencent’s commitment to achieving carbon neutrality by 2030,” the website says.

Challenges like different electrical currents and the inconsistency of renewable power were solved by introducing conversion and storage equipment, as well as an AI- and machine-learning-enabled control system to coordinate the now much more complex, but cleaner, energy management.

Other Chinese tech giants are also seeking ways to align their companies with President Xi Jinping’s goal of carbon neutrality by 2060 for China, the world’s largest emitter of greenhouse gases.

Alibaba Group’s 2025 environmental, social and governance report says that the company’s self-built data centres are 64 per cent powered by clean electricity. That includes all renewable energy sources as well as non-renewables that do not release harmful pollutants, like nuclear energy.

Alibaba is the owner of the South China Morning Post.

But the shift to green energy is not all smooth sailing, according to an article by Caixin Global in May. Lagging infrastructure in western regions rich in solar and wind resources and some unfavourable government policies tended to curtail corporate efforts, experts told the noted business and finance news outlet.

Even so, clean energy made up around 10 per cent of China’s gross domestic product in 2024, with solar as one of the top contributors, according to data from the Centre for Research on Energy and Clean Air.

China teacher gives CPR to collapsed woman on street, is accused of groping her

https://www.scmp.com/news/people-culture/gender-diversity/article/3318311/china-teacher-gives-cpr-collapsed-woman-street-accused-groping-her?utm_source=rss_feed

A man in China who performed cardiopulmonary resuscitation (CPR) on a woman who collapsed in the street has been accused of groping her chest by online observers.

The controversy drew added attention online after the man told the media he was disappointed and frightened by the derogatory comments, Jiupai News reported.

The woman collapsed on a street in Hengyang, central Hunan province, on July 12.

Initially, a female doctor from a local hospital carried out CPR on her.

When the doctor became tired from massaging, she asked if anyone else was able to carry out the emergency procedure.

The man, surnamed Pan, a teacher at the medical school of a university in the city, was riding a bicycle nearby.

He offered to help without hesitation, explaining that he had a degree in clinical medicine and had received CPR training.

Pan and the doctor took turns performing CPR on the woman.

The doctor was also observing her vital signs and urging her relative to call an ambulance.

Ten minutes later, the woman regained weak breath and pulse and opened her eyes. An ambulance arrived, and she was taken away, accompanied by her relative.

After the video of Pan and the doctor went viral on social media, some people said that Pan appeared to place his hands in the wrong place.

“He is obviously groping her chest,” one online observer said.

“It is better to let a female apply CPR,” said another.

While a third person added: “Why is it necessary to press on her chest? How about just massaging her belly?”

Pan, 42, said he was shocked by the negative public reaction.

“I feel frightened. If I had known that I would be rebuked, I would not have taken the initiative to help. I am so bitterly disappointed,” Pan told the media.

He added that he made every attempt to keep his hands on the woman’s sternum.

“If my CPR skills were wrong, the medical staff would have pointed it out. But so far no one has,” said Pan.

Many more people went online to support Pan’s Good Samaritan behaviour.

A man, surnamed Deng, who was among the witnesses, said: “The situation was critical. No one thought about whether he had groped her chest or not.

“The woman fainted and lost consciousness. They saved her through their efforts,” said Deng.

An online observer defended Pan and said: “In such an emergency situation, saving life is the first priority. There is no time to consider whether it should be a male or a female to save her.”

China’s SpinQ sees quantum computing crossing ‘usefulness’ threshold within 5 years

https://www.scmp.com/business/investor-relations/article/3318895/chinas-spinq-sees-quantum-computing-crossing-usefulness-threshold-within-5-years?utm_source=rss_feed

Quantum computing is poised to reach a tipping point in three to five years by becoming useful for solving real-world problems, as computers harnessing about 500 qubits become a reality, according to Chinese start-up SpinQ.

Founded in 2018 and based in Shenzhen, SpinQ has two main product lines: small-scale nuclear magnetic resonance (NMR) quantum computers with about three qubits for educational use and industrial-grade superconducting quantum computers with up to 20 qubits.

In 2020, SpinQ launched the world’s first programmable desktop NMR quantum computer. In 2023, it shipped a superconducting quantum chip to the Middle East, marking China’s first export of such technology.

SpinQ said it sold a range of products – including educational quantum computers, superconducting quantum computers, chips, quantum measurement and control systems and application software – to over 50 countries.

But SpinQ founder and CEO Xiang Jingen said quantum computing still had a lot of work to do before it was broadly applicable.

He compared today’s quantum technology to semiconductors in the 1950s, a time when computers were expensive and large and transitioning from vacuum tubes to transistors – and then to integrated circuits.

Unlike classical computing, which processes information in units called bits, which are encoded as either zero or one, quantum computing employs quantum bits – or qubits – which can exist in both states simultaneously due to quantum superposition.

This allows quantum computers to perform complex calculations at significantly higher speeds. Their overall power depends not only on the number of qubits but also on factors like coherence time – the longer, the better – and fidelity, a measure of how accurately a quantum operation reflects its ideal state.

Xiang said quantum and classical computing would complement each other.

“It’s similar to the relationship between aeroplanes and cars: aeroplanes are essential for transoceanic travel, which cars are incapable of, but the latter are far more efficient for shorter distances,” he said.

SpinQ expected to deliver a 100-qubit quantum computer by the end of the year, but Xiang stressed that reaching around 500 qubits would still be crucial for practical applications in certain domains.

Born in 1977, Xiang earned his bachelor’s, master’s, and doctorate degrees from Tsinghua University and conducted postdoctoral research at Harvard University.

While quantum computing is still relatively nascent compared to artificial intelligence, it appeared to be gaining momentum this year, with major tech companies like Google, IBM, and Microsoft making breakthroughs.

In December, Google unveiled Willow, a 105-qubit chip capable of completing in under five minutes calculations that would take current supercomputers an estimated 10 septillion years. It also significantly reduced error rates as qubit counts increased, a critical advancement given that error rates remain a major barrier to the progress of quantum computing.

In February, Microsoft introduced its eight-qubit Majorana 1 chip, followed by Amazon.com’s nine-qubit Ocelot chip.

In March, Nvidia founder and CEO Jensen Huang said his company would open a quantum research lab in Boston. In June, IBM outlined a road map to deliver a large-scale, fault-tolerant quantum computer called Quantum Starling by 2029.

The US still leads China by about three years in quantum computing, according to Xiang. While this may seem a small gap, it is substantial in a rapidly developing industry, particularly because China started later and its quantum talent density lags that of the US.

China has actively ramped up its quantum computing efforts. In 2016, the technology was included in the State Council’s 13th five-year plan as a strategic emerging industry and has been frequently mentioned in annual government work reports and local guidelines.

In 2021, the University of Science and Technology of China (USTC) launched the country’s first undergraduate programme in quantum information science, with over a dozen other universities following suit.

SpinQ is headquartered in the Shenzhen-Hong Kong Hetao Cooperation Zone, an area that hosts several research hubs, including the Shenzhen Branch of Hong Kong Science Park, the Shenzhen International Quantum Academy and the Quantum Science Centre of Guangdong-Hong Kong-Macao Greater Bay Area.

Xiang emphasised the importance of an ecosystem to transition quantum technology from laboratories to industry.

Hefei, the capital of central Anhui province and home to USTC, established China’s first quantum industrial park. A street named “Quantum Avenue” hosts dozens of quantum tech companies, including QuantumCTek, Origin Quantum, and CIQTEK.

“Profitability is our long-term goal, not a short-term priority,” Xiang said, adding that the field required heavy investment in research and development. Despite this, SpinQ said it had seen rapid sales growth of its quantum chips and educational products and has begun delivering superconducting quantum computers priced at tens of millions of yuan.

SpinQ recently closed a Series B funding round worth several hundred million yuan from government-backed funds including CCB Private Equity Investment Management and Wuxi’s Liangxi Sci-Tech City Development Fund, along with several institutional investors like StarsUp Investment, Huaqiang Capital, and Jiusong Fund.

---

Shareholders of mainland Chinese firms look to Hong Kong for family offices: asset manager

https://www.scmp.com/business/banking-finance/article/3318844/shareholders-mainland-chinese-firms-look-hong-kong-family-offices-asset-manager?utm_source=rss_feed

Shareholders of mainland Chinese companies are showing increasing interest in setting up family offices in Hong Kong after their initial public offerings amid a swelling pipeline of new listings in the city, according to an asset manager overseeing up to US$2 billion in wealth.

“This week alone, I have met two clients inquiring about family office services and tonight I am meeting another – lots of overtime,” said Wang Fengyu, founder and chairman of Hong Kong-based Oakwise Capital, in an interview on Wednesday.

With a US$100 million minimum threshold of entry for its multifamily office services, the firm – established in 2021 – served 10 clients, managing a total of US$1.5 billion to US$2 billion. Around 70 per cent of these clients were shareholders of Hong Kong-listed companies with market capitalisations of HK$5 billion (US$637 million) to HK$50 billion.

Wang noted a rise in demand from such clients over the past year, a trend he expected to continue with a growing number of mainland companies lining up for share sales.

The city’s bourse has hosted 50 listings, raising a total of US$15.8 billion as of July 16. Of those, 44 firms hailed from the mainland, accounting for most of the funds raised, according to data provided by the London Stock Exchange Group.

Among this year’s major deals were electric vehicle battery maker Contemporary Amperex Technology (CATL) with a US$5.2 billion share sale and pharmaceutical firm Jiangsu Hengrui Pharmaceuticals’ US$1.26 billion offering. CATL’s market capitalisation surged to US$165.6 billion, while the drug maker’s stood at US$53.6 billion, according to data from Bloomberg.

“Business owners, particularly those making their first overseas listing, often gain considerable overseas assets,” Wang said. “And some of them seek to diversify their wealth allocation in international markets. This gives rise to the need for family asset management.”

While a surge in the number of mainland companies listing in Hong Kong was helping to drive growth in the city’s wealth management and family office sectors, Wang believed the Hong Kong government’s favourable policies were also helpful.

Hong Kong’s revamped Capital Investment Entrant Scheme allows high-net-worth individuals who invest HK$30 million in stocks, bonds, insurance and property to apply for residency. It attracted 1,400 applications and was expected to draw investments of more than US$5.2 billion, Hong Kong Financial Secretary Paul Chan Mo-po said in June.

The government also unveiled a consultation paper last year on expanding tax concessions to include digital assets as qualifying assets for family-owned vehicles.

One of the most important factors for affluent people when setting up a family office was the assurance of preserving and growing their wealth, Wang said.

“For shareholders of mainland Chinese companies, Hong Kong’s geographic proximity, transparent regulations, competitive tax system, sophisticated professional services and its developed and open market will continue to attract them to stash and grow their wealth here,” he said.

Around 2,700 wealthy family offices had been set up in Hong Kong as of June, and Chan expected the number to pass 3,000 in the near future.

Helen Chen, chief strategy officer of Hong Kong-based asset custodial and fintech wealth solutions provider FGA Trust, said a growing number of mainland entrepreneurs – many in the apparel and consumer goods sectors – were setting up family offices in Hong Kong.

“They are tapping into Hong Kong’s capital markets to grow their global businesses while accessing investment opportunities,” she said.

“Setting up family offices has provided benefits and opportunities to bankers, lawyers, and professional parties,” said Anthony Lau, Hong Kong tax and business advisory leader at Deloitte China.

Apart from direct investment, he said family offices brought additional benefits to the Hong Kong economy, including job creation, an enlarged talent pool and positive impacts on housing and education.

Sean Stein on why US businesses are walking a tightrope to stay in China

https://www.scmp.com/economy/global-economy/article/3318709/sean-stein-why-us-businesses-are-walking-tightrope-stay-china?utm_source=rss_feed

Sean Stein is president of the US-China Business Council (USCBC), a Washington-based non-profit organisation that promotes trade between the world’s two largest economies. The council represents more than 270 American companies doing business in China.

He most recently served as board chair of the American Chamber of Commerce in China and is chair emeritus of the American Chamber of Commerce in Shanghai. Before that, he served for nearly three decades as a diplomat, including as US Consul General in Shenyang and Shanghai.

This interview first appeared in . For other interviews in the Open Questions series, click .

That is correct – it is almost inevitable that the 90-day pause gets extended, particularly since the two sides have announced that there is a framework deal. The alternative is unthinkable. It would mean going back to pre-Geneva, triple-digit tariffs, something neither side wants.

Looking at the potential for a broader deal, now that China has added two fentanyl precursors to its list of restricted chemicals, there is some expectation that the US may lower the 20 per cent tariff it put in place due to fentanyl. When that happens, China is expected to lower some of its retaliatory tariffs. This could be a path back toward a more normal trade relationship, but so far, we have not seen the US take steps to reciprocate China’s gesture.

What the business community is worried about is that virtually all the discussion between the countries has been about tariffs.

Using the “trade war” analogy, tariffs were the first major front in the trade war and the two sides fought each other to a standstill. There is now a tenuous ceasefire on tariffs, but there is also a second front in the war: export controls and supply chain chokepoints.

We may now have something of a truce on that front as well, but we don’t know how long it will last. Both sides, however, have shown they can weaponise export controls to inflict serious damage on the other’s economy.

The situation now feels something like the “mutually assured destruction” strategy of the Cold War, where the threat of retaliation was enough to deter action by the other side. Call it “mutually assured economic destruction”.

When the US side entered the trade war, there were some unfortunate miscalculations. One was that China’s economy was so weak and dependent on direct trade with the US that it would crumble under the pressure of US tariffs.

In other words, there was an underappreciation of China’s success diversifying away from the US since the height of the trade war in 2018 and 2019. In reality, as a percentage of GDP, the amount of direct trade with the US had fallen significantly, leaving the US with less leverage than it thought.

After “Liberation Day”, some of the president’s advisers gave him some very bad advice: just keep raising the tariffs until the Chinese capitulate. And China responded in kind. That is how you get to triple-digit tariffs. Was this a fundamental misunderstanding of how China was going to react?

Tariffs affected the two countries in different ways. In the US, high tariffs were fuelling inflation, which neither businesses nor consumers could afford. They were also generating unemployment, making American exports less competitive globally and creating the risk of shortages. Triple-digit tariffs were causing inflation, unemployment, shortages and decreased competitiveness, the making of an economic nightmare.

The impacts on China were different. Tariffs were leading to unemployment due to factory lay-offs. But unlike in the US, tariffs were not poised to create inflation, shortages or decreased global competitiveness.

Setting aside the question of which country’s political system can endure more pain, the tariffs were set to inflict more pain on the US than China. Chinese negotiators realised this pretty quickly.

Both sides now know they can hurt the other, and perhaps their leverage is not what either side imagined.

We are working very hard to ensure that US and Chinese policymakers have an accurate understanding of the facts on the ground and how various policies affect the economy, competitiveness and employment. We do this in both countries, but it is especially important in the US, where the understanding of China is often outdated and based on observations made on a visit 10 or more years ago.

In the US, perception of China is the ultimate lagging indicator. There are a lot of out-of-date views, so we are trying to help the administration and Congress understand the reality, challenges and opportunities.

Broadly speaking, advocacy in China has always been a big part of what we do. We had several years where there were no discussions between the US and China on market access, compliance, standards or other key issues.

During the four years of the Biden administration, the office of the US Trade Representative – the agency traditionally responsible for negotiating with China on trade – was essentially missing in action. USCBC responded in part by increasing our engagement with the Chinese government and raising key issues directly with Chinese policymakers and regulators.

This outreach was often successful, because China was trying to make its environment more business-friendly and encourage greater investment from the international business community.

Often our advocacy centres on encouraging China to follow through on policies and actions it has already committed to undertake, or on helping the country understand how and why specific policies deter investment.

In general, the Chinese side has been quite open to business and receptive to these kinds of discussions. That does not mean that they agree with everything we say, but they have been eager to listen and have tried to understand how policies are affecting the business community and investment climate.

China’s economy has matured significantly over the last two decades. Chinese companies have become more capable, and the market is increasingly competitive.

As a result, what we have seen since 2010 is a steady decline in companies’ return on investment (ROI). In the past, it was not unusual for a company to enjoy high returns on its Chinese investment, but that is becoming more unusual. Now, most companies in China are making about as much in China as they make in other global markets.

In fact, according to recent surveys, companies earning a higher ROI in China than other global markets are a clear minority. Simply put, for many companies, it is not as profitable to invest in China as it was in the past. Of course, it varies by company, industry and sector, but overall, returns have declined in recent years.

At the same time, due to developments in both countries, companies are facing growing risks – geopolitical risk, trade risk, commercial risk, IP risk, and in some cases higher regulatory and compliance risks.

Any middle school student can tell you what happens when you have higher risk and lower rewards – you get less investment.

This informs our message to the Chinese government: if you want more investment, you need to take steps to reduce risk and increase reward. In other words, lower risks by promoting regulatory predictability, enhancing IP protection, making standards more transparent, and so on.

And then how do you make it potentially more profitable? You remove market access restrictions so companies can compete fairly or on a level playing field, you open up government procurement and tenders to foreign business, and you reduce compliance costs through improved transparency.

Countries have a long history of regulating exports with potential military applications. What China has started to do is screen rare earths and magnet exports for these “dual-use” concerns.

No one questions China’s right to screen for dual-use. The problem is the filter is so tight, the procedures for obtaining export licences are so opaque and the Ministry of Commerce is so understaffed that obtaining rare earth products has become challenging, if not impossible – even for purely civilian sectors, like the automotive and appliance industries.

The Chinese government has committed to ensuring that business and civilian users can reliably get the rare earth products they need, but we still have factory stoppages and companies are not yet confident about supply.

More needs to be done. This is a significant problem. Rare earth shortages affect thousands of companies globally, and it is having a strong negative effect on the US, EU and other economies.

This is a case where I think China overreacted, generating very negative impacts on markets around the world. A softer touch or a gentler ramp-up, so that it was less disruptive, would have been a better approach.

Instead, China overperformed in deploying this “weapon”. The blast radius is so large in terms of jobs and production that other countries have no choice but to react. This is the reason the United States felt compelled to impose export controls on a host of products that are critical to China’s economy.

We had the Xi-Trump phone call in June. That was a good positive step forward. We had Geneva. We had London. Those were imperfect in their own ways, but it was progress, and now the two sides have announced that they have a framework agreement.

In addition, we expect US and Chinese negotiators to meet again in the coming weeks. This is positive, but we remain concerned that negotiations on tariffs and export controls, as important as they are, will continue to crowd out negotiations about other important issues, including market access and rules which prevent US companies from competing fairly in China.

Regarding a possible meeting, the business community hopes that Trump and Xi will meet in person this year. There is clearly space for the two presidents to strike a deal that would benefit both economies and move beyond zero-sum strategies.

Trump clearly has a vision for how the US and China can work together, and envisions a deal that will balance national security concerns while allowing the two economies to continue to cooperate. He wants to make progress on the issues that drive the two economies: investment and manufacturing.

If the president does go to China this year, it seems likely it will be in the fall, probably in the run-up to the Apec (Asia-Pacific Economic Cooperation) meeting.

Why did companies go to China in the first place? There have been many reasons. The most famous was the dream of selling to a billion Chinese consumers.

For other companies, it was taking advantage of cheap labour and using China as an export platform. Many people think that is the reason foreign companies are in China, but that is outdated thinking. That was the world of 25 years ago.

Today, China does have an enormous middle class that continues to grow. There’s strong demand for some advanced products. For many companies, however, there are issues that are more important than China’s market. One is R&D and innovation. China has a large, highly qualified base of researchers.

As a result, R&D chains between the US and China have, in many cases, become highly integrated. In many sectors, a company cannot be globally competitive today if it is not taking advantage of Chinese innovation. If it does not, it will be left behind.

Moreover, if you are a multinational in China, it is highly likely you are also in Japan, Europe, America and other global markets. Being competitive globally requires optimised supply chains and highly efficient manufacturing ecosystems.

In many industries and sectors, that means companies have no choice but to have some operations in China. If they do not, they will not be competitive for long.

There is so much innovation happening in China. If you are not in China, you will wake up one day and see Chinese competitors and technologies entering other markets. And you are going to be wrong-footed.

We have seen that with auto executives who were not paying attention to China’s electric vehicle industry during the years China was locked down during Covid-19. When they did finally see it, they were blown away by the progress. Businesses are determined not to let that happen again, so they are watching developments in the China market closely.

One thing we are not seeing is significant numbers of companies pulling out of China. In many cases, new investment may be diverted to other countries or markets, or there are efforts to make supply chains more resilient by developing capabilities in multiple regions. But generally speaking, companies are not pulling out of China.

Historically, we have seen a lot of SMEs working closely with Chinese factories and suppliers. One unanticipated effect of the trade war has been a change in payment terms for many SMEs. In the past, it was normal for a Chinese factory to extend generous payment terms to companies where there was an established relationship.

Net 90 or even net 120 terms were not unusual, meaning companies had 90 or 120 days to pay the Chinese factory. These terms gave companies time to receive and sell goods before the payment was due.

Due to the unpredictable tariff and trade situation, however, many Chinese suppliers now require prepayment for goods. This is a double hit for SMEs importing from China – they are not only forced to pay the new tariffs, but they now need to pay for goods in advance. In too many cases, they have simply been unable to raise that kind of capital.

I was talking to a company recently, an SME that exports globally. The company said that when the trade war started, it knew it would lose the China market. That was unfortunate, but not fatal because the China market was less than 30 per cent of its global sales.

But what the company did not predict was how US tariffs would affect it in other markets, as this company must import certain components from China.

Because of the tariffs on goods originating in China, those imported components are more expensive, seriously affecting their competitiveness in Europe, Canada and Southeast Asia.

That is a long way of saying that in various sectors and industries, tariffs have made the US economy a high-cost economy. In those sectors and industries, companies simply cannot afford to produce here.

To remain competitive globally, some companies have been forced to move production out of the US, which is exactly the opposite of what the administration is trying to do.

That is why broad-based, indiscriminate tariffs hurt more than they help. Tariffs – if they are to be effective – have to be highly targeted and strategic.

Everyone is trying to diversify production to minimise exposure to tariffs. In some of those sectors, no other market can replace China. What we have seen, particularly since “Liberation Day”, is US exports plummeting for every single [US] state.

So even though China’s base tariff on American goods may only be 10 per cent, people are not buying American products, and American exports to China have fallen off a cliff. Companies have no choice but to diversify where they sell.

The problem is no market for agriculture, semiconductor equipment, aeroplanes or aviation products can fully replace the China market.

[The short-term] solution is you front-run tariffs, but that is ultimately self-limiting. The second thing is that everybody squeezes a little bit, eking out a few per cent on the supplying and buying sides. But ultimately, you do the only thing you can: raise prices for consumers.

But how much will prices rise? There are credible reports predicting that if tariffs are 10 per cent globally and 30 per cent on China, the US will have 4 per cent to 5 per cent inflation by Q4. That is a big number, and we know from the last election that Americans are already stretched and cannot afford to pay higher prices.

Maybe China’s exchange rate depreciates a few per cent, and that gets you a few per cent. But it gets you nowhere near the 30 per cent tariff charged by the US. Eventually, consumers will have to pay more or just stop buying, importers will stop importing – everybody loses.

Companies do not know if US tariffs will go up, down or stay the same. They do not know how long they will be in place. This makes it extremely challenging, if not impossible, for companies to invest in expensive new plants or equipment without knowing where the tariffs will be a year or two, or a month or two from now.

When you are investing in new plants and equipment, sometimes you get a five-year payback. More often you get a 10-year payback and in some cases it might be a 15-year or 20-year payback. And in an environment of uncertainty, you will not invest and build that factory. You will sit and wait until there is clarity or some certainty.

What is going to happen is “friendshoring” for critical industries and goods. It will happen more slowly than it should, in part because companies must wait for enough predictability to know where they can safely invest their money.

That path is becoming narrower and more difficult to walk with the trade war, tariffs, export controls and little to no trust.

Most companies are managing, and there are sectors which are easier than others, such as life sciences and pharmacology. Semiconductors may be more difficult.

Some companies are bifurcating their China operations from other global operations. It is less efficient, but otherwise it is very difficult to comply with both US law and Chinese law.

We have cautioned the Chinese government about creating legal conflicts, or areas where US and Chinese law contradict, but those legal conflicts now exist and companies need to grapple with them.

In fact, more corporate boards from every industry are looking at those examples and, even if they are in completely different industries, concluding that those conflicts of law create unacceptable or unpredictable legal risks, leading to more caution on the part of investors.

Recently, we have seen some evidence that China may be looking for a way to walk those conflicts back a bit.

American companies should be very active in China. The same thing is true for Chinese companies. We need more Chinese companies investing in the US and creating jobs and helping reindustrialise. Not in every sector, because there are sectors with national security implications.

The problem comes when people draw the circle of national security too large. How do we properly enumerate and measure those risks? It is possible in the US right now to pick any kind of regulation and say that while the goals may have been good, the regulations became too extreme, yielding undesirable outcomes. This is true of zoning laws, environmental regulations and almost every other kind of regulation.

China is the one exception to this. Unlike every other kind of regulation, you cannot have a debate in the US today questioning if regulations on trade and investment with China may have, in some cases, become so extreme that they are counterproductive. But this debate is desperately needed.

So far, the way tariffs have been implemented is too broad. They have been too unpredictable. As a result, the tariffs have not produced the results their proponents hoped for. There are even examples where they have pushed manufacturing out of the US to third countries due to rising costs in the US.

If tariffs are going to bring back manufacturing jobs, they need to be strategically targeted and coupled with efforts to make the US a low-cost manufacturing site.

We saw some incredible pragmatism on the part of the Chinese in terms of how they handled their retaliatory tariffs. Shortly after the triple-digit tariffs went into effect, the Chinese very quickly embarked on a programme to identify which goods subject to tariffs were hurting China. And they asked for specific examples.

As a result, companies could go to the Chinese government to request an exemption, and if the company could prove the tariff on a specific good was bad for China, the government would quickly issue an exemption. This helped protect China’s economy from the worst of its retaliatory tariffs.

We are asking the US to be similarly pragmatic.