• How is the EV industry driving China’s ‘going global’ strategy?
• Alibaba, Baidu lead China’s AI cloud boom as market surges 55% to US$2.7 billion
• Taiwanese with mainland China IDs risk losing jobs, citizenship, Taipei warns
• China’s latest weapons on show, Beijing slams US on human rights: SCMP daily highlights
• US negotiators face tough task to secure trade deal with China
• China to face increasing pressure if US gives Ukraine Nato-style protection: analysts
• Hong Kong’s Jimmy Lai was set on using US links for anti-China actions, court hears
• Chinese surgeons save patient who was nearly beheaded by robotic arm
• China’s Unitree, X-Humanoid top medal total in the world’s first humanoid robot games
• Xtep posts record interim profit as China’s marathon boom boosts sales of Saucony shoes
• Chinese centenarian sisters, separated for decades, reunite via video, move many online
• China’s No 2 semiconductor foundry Hua Hong seeks acquisition to bolster legacy chips lead
• EU diplomats mull skipping China military parade over Putin’s attendance: sources
• China’s Nvidia challenger Cambricon to raise US$560 million for AI chip development
• Ex-China monk sues daughter for US$28,000 for parental support after leaving monastic life
• Chinese scientists transplant human brain cells to mice, boosting pleasure levels
• The rise of China’s soft power
• No Ukraine deal for Trump, Putin; Chinese investors in Athens: 5 weekend reads you missed
• China report says US using human rights as ‘bargaining chip’ in deeply unequal society
• Could Hong Kong, mainland China benefit from more cross-border clinical trials?
• Why Lockheed Martin’s Philippine R&D hub will be on China’s radar
• Chinese pharma firms Hengrui, Hansoh expected to post strong first-half profits
• Jing Qian unpacks the US-China trade talks and their ‘manageable’ rivalry

How is the EV industry driving China’s ‘going global’ strategy?

https://www.scmp.com/economy/china-economy/article/3322247/how-ev-industry-driving-chinas-going-global-strategy?utm_source=rss_feed

The electric vehicle (EV) industry, formerly one of China’s most inward-focused industrial sectors, is now leading a push overseas, carrying the government’s hopes of forging an offshore economic empire to sidestep cutthroat competition at home.

Last year, for the first time, Chinese EV companies invested more overseas than they did at home, despite higher costs, delays and risks abroad, according to a report published by Rhodium Group on Monday.

That marked a historic shift after years of directing around 80 per cent of investment to the domestic market, the research group said.

The shift was made despite a hostile external climate, with the European Union and the United States tightening restrictions and stepping up scrutiny of China’s “going global” strategy. However, Chinese companies are contending with sagging demand and excess capacity at home, with an enervating price war eroding profit margins and leaving them little choice but to look abroad in search of growth.

Overseas investment lagged far behind domestic spending before 2022, as policy support propelled China’s annual EV supply chain investment to an average of US$92 billion in 2021 and 2022, the report said. The gap then began to close, and by 2024, foreign investment had edged past domestic outlays, which had fallen to just US$15 billion.

At home, factories assembling EVs were operating at just 49 per cent capacity in 2023 and battery factories at 36.5 per cent, the report said.

EV manufacturers are also navigating a cooling global market, with EV sales down by a third last year. Growing regulatory pushback in foreign markets has also thrown up more barriers that are driving Chinese companies to establish factories overseas.

“At the same time, Chinese firms will also have to manage Beijing’s increasing concern over technology leakage, job losses and industrial hollowing-out, which may result in tighter controls on outbound investment in strategic sectors,” the report said.

Battery production had accounted for 69 per cent of Chinese EV investment at home and 74 per cent overseas, the report said, adding that while overseas EV assembly had been growing rapidly, EV production capacity remained anchored at home.

Chinese companies in a wide range of sectors are navigating escalating challenges in their overseas expansion. But the threat of crippling tariffs amid the ongoing trade war with the US means they have greater incentives to move production offshore.

Economist Yao Yang, the dean of the Dishui Lake Advanced Finance Institute at Shanghai University of Finance and Economics, said earlier this year that it was a good opportunity for Chinese companies to reshape the global manufacturing sector.

“I believe that in the next 10 or 20 years, Chinese companies will build ‘another China’ overseas,” Yao told Beijing Daily in an interview on the sidelines of the Boao Forum for Asia at the end of March, adding that the history of other manufacturing powerhouses showed they had each recreated “another Britain, America or Japan” abroad.

While the value of the United Kingdom’s overseas assets was several times its gross domestic product, and those of Japan and the US were also very high, China’s overseas assets were valued at only about half its GDP, he pointed out.

“So China still has a long way to go – but this road will only grow broader as we move forward,” Yao said.

Alibaba, Baidu lead China’s AI cloud boom as market surges 55% to US$2.7 billion

https://www.scmp.com/tech/article/3322250/alibaba-baidu-lead-chinas-ai-cloud-boom-market-surges-55-us27-billion?utm_source=rss_feed

Baidu and Alibaba Group Holding led the market for public cloud services supporting artificial intelligence in China last year, as the industry embraced “disruptive innovations” towards generative and agentic AI, according to consultancy IDC.

The mainland AI public cloud market reached 19.6 billion yuan (US$2.7 billion) in 2024, increasing 55 per cent on the back of surging demand for AI training and applications, IDC said on Monday.

The top two market players each accounted for roughly 25 per cent of the market, followed by Tencent Holdings and Huawei Technologies, according to a chart that did not provide exact share numbers. Alibaba owns the Post.

“Disruptive innovations” in AI drove the surge in the market, IDC said. Before 2022, demand for AI cloud services came from “traditional” applications, including optical character recognition, quality inspection and surveillance.

Starting in 2023, large language models – the technology underpinning ChatGPT-like chatbots – began to dominate the market. AI services were now evolving into agentic forms in the second half of this year, marking a new era of autonomous, task-oriented AI interactions, the report said.

These shifts have prompted growing demand for AI cloud services, which can provide both generative-AI applications and training resources for clients to build their own AI services.

Among five segments within AI cloud services, the biggest was computer vision, which rose 34 per cent to 8.1 billion yuan last year, led by Tencent and Baidu, IDC data showed.

The second biggest and fastest-growing segment was machine learning – the type of AI system that can learn from data and improve its performance without explicit programming. In 2024, cloud services for machine learning jumped 164 per cent to 5.3 billion yuan, led by Huawei and Alibaba.

IDC suggested that cloud providers should “reconstruct cloud architectures” to support full use of AI in everyday life and prioritise ethical compliance to ensure transparency, accountability and bias mitigation.

China’s overall cloud-computing market continued to build momentum this year, as first-quarter spending rose 16 per cent from a year earlier to US$11.6 billion, according to a report by research firm Canalys last month.

Alibaba dominated China’s cloud industry in the March quarter, with a 33 per cent market share, followed by Huawei with a market share of 18 per cent, Canalys said.

China’s major cloud companies continue to enhance their AI capabilities.

Liu Weiguang, senior vice-president in Alibaba’s cloud unit, said in June that the company would extend its AI services to overseas data centres this year as part of an ambitious 380 billion yuan investment plan over the next three years.

Earlier this month, Baidu launched multiple “digital employees” powered by AI agents, combining AI capabilities with industry expertise. These agents could work as marketing managers, loan assistants and auto sales personnel to streamline corporate operations, the company said.

---

Taiwanese with mainland China IDs risk losing jobs, citizenship, Taipei warns

https://www.scmp.com/news/china/politics/article/3322270/taiwanese-mainland-china-ids-risk-losing-jobs-citizenship-taipei-warns?utm_source=rss_feed

Taiwan on Monday warned government employees and the wider public against obtaining mainland Chinese identification documents, stating that violators could lose Taiwanese citizenship and be disqualified from civil or military service.

The announcement is part of a wider effort by the William Lai Ching-te administration to counter what it describes as “mounting influence operations” from Beijing, which it says pose an increasing threat to Taiwan’s security.

The warning came as Taiwan’s Ministry of the Interior moved to enact new rules aimed at tightening control over those seeking to regain citizenship after acquiring mainland Chinese household registration or identity documents.

Government agencies are also reinforcing vetting procedures for public servants and investigating entertainers with perceived ties to the mainland propaganda machine.

Under the amended “Act Governing Relations between the People of the Taiwan Area and the Mainland Area”, Taiwanese who obtain mainland Chinese citizenship – or documents such as a mainland resident ID – would automatically lose their Taiwanese status and be barred from holding public office or serving in the armed forces.

To enforce this provision, the Mainland Affairs Council – which oversees cross-strait policy – said on Monday that it was implementing a formal and institutionalised verification mechanism targeting core personnel in the public sector.

The policy will take effect on January 1 and will require newly appointed or transferred military personnel, civil servants, and public-school teachers to undergo identity checks.

Those who refuse to comply will be disqualified from appointment or contract renewal in accordance with applicable employment laws and regulations.

“The system aims to prevent illegal employment or situations where personnel do not meet the legal requirements for appointment,” the council said in a statement.

Government agencies and schools have been instructed to begin reviewing and revising their employment procedures, contracts, and information systems ahead of the policy rollout.

Due to the complexity of the public sector and the diversity of legal frameworks governing employment, the policy will be implemented in stages.

The first phase would target key roles within the military, civil service and public education system. For government-owned enterprises and public-interest foundations, only politically appointed representatives or executives nominated by the cabinet or relevant ministries will be subject to verification.

In the education sector, the checks will apply to full-time staff employed by public schools under the Teachers’ Employment Act and related legislation.

The Mainland Affairs Council noted that Beijing had, in recent years, allowed Taiwanese individuals to acquire mainland Chinese identity documents or residence permits while retaining their Taiwanese ID cards. The council views this practice as a direct challenge to Taiwan’s legal system and a deliberate effort to blur Taiwanese identity.

It urged all relevant government, military, and education personnel to fully cooperate with the verification process, warning that non-compliance could lead to dismissal or disqualification from service.

Several lower-level local government officials who are mainland Chinese nationals married to Taiwanese citizens have already been stripped of their posts after failing to prove that they had renounced their mainland Chinese household registrations and passports.

In a related move, the ministry has proposed a new set of restrictions targeting Taiwanese nationals who voluntarily gave up their citizenship by registering in mainland China.

Under the draft amendment – expected to be enacted within the coming week pending cabinet approval – only those who meet specific and exceptional criteria will be permitted to restore their Taiwanese status.

These criteria include making significant contributions to Taiwan’s military defence, international standing, or social stability; advancing the island’s overall interests; or qualifying on humanitarian grounds.

Conversely, applicants found to have engaged in political propaganda on behalf of the Communist Party, violated Taiwan’s mainland-related regulations or posed a security risk may have their applications denied or retroactively revoked.

Critics have raised concerns over potential constitutional and legal violations. A former ministry official, speaking on condition of anonymity, argued that the policy infringed upon freedom of movement and unfairly penalised individuals who still held Republic of China – Taiwan’s official name – nationality but had chosen to live, work or study in mainland China.

“It shifts the standard from presumed approval to presumed denial,” the official said, warning that the policy risked alienating ordinary Taiwanese with legitimate ties to the mainland.

Separately, authorities have stepped up scrutiny of Taiwanese entertainers accused of endorsing Beijing’s political messaging. At least 20 celebrities are under administrative investigation for reposting content from mainland Chinese state media or echoing remarks by mainland officials that Taiwan is part of China.

The investigation follows a controversy in March, when multiple Taiwanese entertainers – including Ouyang Nana, Mark Chao, Patty Hou, Joe Chen, Michelle Chen, and Jiro Wang – shared a propaganda image on social media titled “Taiwan must return to China”.

The image was circulated shortly after Beijing’s Foreign Minister Wang Yi declared during the annual legislative session in March that “Taiwan has never been a country and never will be”.

According to Taiwanese Culture Minister Li Yuan, his ministry and the Mainland Affairs Council had summoned more than 10 entertainers for questioning. “Our focus is to understand why they collaborated with the Chinese Communist Party’s united front strategy,” he said, referring to Beijing’s influence apparatus.

“We will handle these cases in accordance with legal procedures.”

Beijing sees Taiwan as part of China to be reunited by force if necessary, and has increased military activity near the island since Lai – whom it describes as a separatist and a troublemaker – took office in May last year.

Most countries, including Taiwan’s main international backer, the United States, do not recognise the self-governed island as an independent state. However, Washington opposes any attempt to seize Taiwan by force and is legally bound to supply it with defensive weapons.

China’s latest weapons on show, Beijing slams US on human rights: SCMP daily highlights

https://www.scmp.com/news/china/article/3322263/chinas-latest-weapons-show-beijing-slams-us-human-rights-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 .

European envoys in Beijing are discussing plans to skip China’s massive military parade next month after considering the attendance of Russian President Vladimir Putin and the possible participation of Russian troops, the Post has learned.

New hypersonic anti-ship missiles and a road-mobile intercontinental ballistic missile system were among a line-up of advanced Chinese weaponry seen on the streets of Beijing over the weekend.

Chinese scientists have found a way to turn human stem cells into dopamine-producing brain cells, transplanting them into mice and helping reduce depressive behaviour and boost pleasure.

The scholar goes in-depth on the world’s two largest economies, how their competition is making waves in Europe and how China can handle domestic hurdles.

China has accused the United States of using human rights as a “bargaining chip” in its latest annual report on the issue.

China appears to have stopped publishing details of its rare earth mining and refining quotas, in a break from normal practice that could further raise the temperature in the US-China trade war.

Chinese doctors have saved a patient whose head was nearly severed by a robotic arm, reattaching the man’s vertebrae while overcoming two blocked arteries.

US negotiators face tough task to secure trade deal with China

https://www.scmp.com/opinion/world-opinion/article/3322129/us-negotiators-face-tough-task-secure-trade-deal-china?utm_source=rss_feed

With the tariff truce extended to November 10, US and Chinese negotiators can now focus on shaping a trade deal in the lead-up to a possible summit between US President Donald Trump and Chinese President Xi Jinping this autumn. While engagement has occurred at senior levels since the first meeting in Geneva, Switzerland, several months ago, it appears that much of the discussion since then has centred around ensuring the smooth flow of Chinese critical minerals and magnets to the United States.

Now, negotiators need to pick up the pace and take a detailed look at other issues that could be part of a future agreement while recognising that there are no easy solutions.

The positive news is that both sides, to varying degrees, seem to want a deal that helps to stabilise the bilateral relationship. Quick tariff escalations that occurred earlier made both sides realise that tensions had gone off the rails. Officials point to the phase one agreement concluded during Trump’s first term as evidence that bilateral deals are possible, even in an environment where strategic competition prevails.

But Beijing has learned important lessons from those earlier negotiations, which relatively favoured Washington’s interests. Since then, China has taken steps to avoid a repeat. Beijing is thus likely to insist on a more balanced agreement this time, meaning it will request concessions from Washington in areas such as the relaxation of export controls and the lowering of tariffs.

Second, China has successfully reduced its dependence on the US as an export market since 2017, with exports to the US in 2024 only accounting for 14.7 per cent of its total, down from slightly over 19 per cent in 2018. It has turned to other partners to help fill its import needs, including Brazil, now its largest soybean supplier.

Finally, it has built out a toolbox going way beyond tariffs to respond to what it considers to be unjustified US measures. Under its export control law, which mirrors US policies in important ways, China has restricted its exports to the US of critical minerals and magnets. Beijing has shown it is more than willing to use this leverage to create more favourable negotiating conditions.

In addition to a more assertive Chinese negotiating team, serious time constraints are a challenge to advancing this new round of talks. Keeping in mind that the phase one agreement took well over a year to achieve, negotiators now only have 2½ months to undertake a similar exercise. In the trade world, this is an extremely small window to negotiate a meaningful and enduring deal.

Moreover, potential negotiating agenda items do not lend themselves to simple solutions. For example, China’s manufactured excess capacity is a bilateral and global problem, but addressing this challenge is complex.

It calls for a package of policy responses, including Chinese voluntary export restraints in key sectors, US import restrictions beyond high tariffs and measures to strengthen consumer demand in China. Transforming these and other policy prescriptions into a binding trade agreement takes time and creativity.

Unlike past negotiations, US export controls on important technologies are likely to be on the table this time. In recent months, the Trump administration has opened the door to such Chinese requests, such as allowing the Nvidia H20 advanced chip to be shipped to China.

This effectively reverses decades-long bipartisan policy of avoiding negotiations on matters related to national security. Sorting out which controls might be negotiable and which must remain off limits will be no easy task. Moreover, the talks may also encompass matters such as Russian oil exports to China and fentanyl precursors, which would require precious negotiating time.

Finally, Beijing is not as hungry for a deal as the US seems to be, meaning that it is likely to drive a hard bargain. Unlike other trading partners who were determined to reach a deal with the US before the 90-day pause on “Liberation Day” tariffs ended and the subsequent extension period passed on August 1, China seems far less pressed about inking a deal. The current tariff truce could be extended again regardless of whether a deal is at hand.

Any US-China trade deal concluded this autumn is likely to be heavy on high-level political commitments, but light on the details necessary to ensure smooth implementation. Judging from recent agreements with Japan, the European Union and South Korea, Trump seems to be most interested in commercial announcements with large price tags, including mega purchases of American farm goods, energy resources and aircraft, as well as commitments to increase foreign direct investment.

Relying on one-time commercial actions to rebalance the US’ bilateral relationship with China will only sow disappointment and frustration for both sides. Commercial announcements must be accompanied by structural and rule-based commitments if any deal is to be effective and long-lasting.

Over the past three months, the Trump administration has faced challenges as it negotiated with multiple trading partners. Some were overcome, resulting in trade framework deals with countries such as Vietnam, Japan and South Korea. In other cases, the obstacles precluded the successful conclusion of an agreement, resulting in higher tariffs for those partners, including India and Switzerland.

Those challenges largely pale in comparison to what’s in store for US negotiators tasked with making a deal with China. To achieve success, they must be firm but also creative. And they must be willing to walk away if the deal on the table is not heading in the right direction.

China to face increasing pressure if US gives Ukraine Nato-style protection: analysts

https://www.scmp.com/news/china/diplomacy/article/3322254/china-face-increasing-pressure-if-us-gives-ukraine-nato-style-protection-analysts?utm_source=rss_feed

China is likely to face “increasing” geopolitical pressure if the US extends Nato-style security protection to Ukraine to end its war with Russia following the Trump-Putin summit, Chinese analysts have warned.

Russian President Vladimir Putin agreed at the meeting in Alaska to allow the United States and Europe to “effectively offer Article 5-like” security guarantees to Kyiv as part of a potential peace deal, US President Donald Trump’s special envoy Steve Witkoff, who attended the high-stakes talks, said on Sunday.

Article 5 refers to the North Atlantic Treaty Organisation’s principle that an armed attack against any member of the security alliance is construed as an attack on all its members, and justifying the use of force in response.

During an interview with CNN, Witkoff described that understanding as “game-changing” and an alternative to bypass Moscow’s “red flag” opposing Ukraine’s admission to Nato – if Ukrainians “could live with that”.

Separately, America’s top diplomat, Marco Rubio, another participant in the US-Russia summit, said in an interview with Fox Business on Sunday that when Ukrainian President Volodymyr Zelensky visited the White House on Monday, conversations would be centred around “the kinds of security guarantees that Ukraine is looking for”.

Earlier, Trump had said that issues including “land swaps” and Washington’s security assurances for Ukraine outside Nato had been “negotiated” and “largely agreed”.

Zhu Junwei of Horizon Insights Centre, a Chinese think tank, said Putin would not unconditionally agree to include an Article 5-like security guarantee in a future peace agreement, and that it remained to be seen what concessions for Russia might be involved.

“If the European security predicament is eased through such a security guarantee – though not easily – and US-Russia relations improve, then the geopolitical pressure facing China could increase,” she said.

Zhu also noted that an Article 5-like security guarantee might mean that non-Nato members could receive such protection without formally acceding to the bloc, tantamount to joining the alliance in all but name.

“Whether such an arrangement might be applied to other regions in the future could become a concern for China,” she said.

Song Bo of the Centre for International Security and Strategy at Tsinghua University, said that if the Kremlin secured commitments from Washington and European capitals to respect Russia’s security, halt Nato’s eastward expansion and restrain the alliance’s defence build-up along Russian borders, Moscow and the bloc could move away from military face-offs in Europe.

That could significantly reduce Russia’s pressure along its western borders and free it from dwelling on issues tied to an Article 5-like arrangement, he added.

“For China, a reduction in the intensity of military and security face-offs between Russia and the West would inevitably make it easier for the US to adjust its military presence in Europe, enabling it to concentrate more military resources in the Asia-Pacific region,” Song said.

As for the US providing Ukraine with a Nato-style security guarantee, that would be unlikely since doing so would not align with Trump’s “America first” agenda, said Wang Wen of the Chongyang Institute for Financial Studies at Renmin University.

“Trump’s policy now is de-Ukrainisation, to throw off the burden of Ukraine as much as possible,” he said.

Still, Wang anticipated that China would welcome an agreement between the US and Russia on Ukraine, whether it involved territorial issues or a broader strategic deal.

“An agreement between the US and Russia would be beneficial for China, as it would ease the external strategic challenges China faces with the West,” he said, saying it would also help reduce accusations that Beijing was backing Moscow against Kyiv.

In Beijing on Monday, Chinese foreign ministry spokeswoman Mao Ning expressed similar sentiments, saying China “welcomes the engagement between Russia and the US to improve their relations and advance the political settlement of the Ukraine crisis”.

Mikhail Ulyanov, Russia’s top envoy to international organisations in Vienna, posted on social media on Sunday that Moscow agreed that a future peace agreement should provide reliable security guarantees for Ukraine.

“But [Russia] has equal right to expect that Moscow will also get efficient security guarantees,” he added, asking what the West had to offer.

During a joint press conference with Trump on Friday, Putin said Ukraine’s security should be “ensured” yet asserted that “a fair security balance must be restored in Europe and the rest of the world” to remove “all the root causes of the crisis”.

The Financial Times reported on Saturday that in his talks with Trump, the Russian leader demanded that Ukraine withdraw from the disputed Donetsk and Luhansk regions in exchange for freezing the rest of the front line.

As Zelensky was en route to Washington for talks with him, Trump warned on his Truth Social platform on Sunday that there would be “no getting back” the Crimean Peninsula and “no going into Nato by Ukraine” as part of a peace deal with Russia.

“Some things never change!!!” Trump posted, while arguing that his Ukrainian counterpart could end the war “almost immediately, if he wants to”.

Meanwhile, Zelensky posted soon after his arrival in Washington that he was “confident that we will defend Ukraine, effectively guarantee security, and that our people will always be grateful to President Trump”.

Before his trip, the Ukrainian president described America’s willingness to take part in security guarantees for his country as “a historic decision”.

During a joint press conference with Zelensky, European Commission President Ursula von der Leyen on Sunday said “we welcome President Trump’s willingness to contribute to Article 5-like security guarantees for Ukraine”, adding that Brussels was “ready to do its share”.

Zelensky will be flanked on his US trip by a group of European leaders, including those from Britain, Finland, France, Germany, Italy and Nato itself.

However, Rubio on Sunday rejected the idea that those leaders were coming to “keep Zelensky from being bullied” – a reference to the Ukrainian leader’s dramatic White House visit in February – saying “the [US] president invited them to come”.

Asked about Trump’s meetings with Zelensky and European leaders, Mao of the Chinese foreign ministry said: “We hope that all parties and stakeholders will participate timely in the peace talks and that a fair, lasting and binding peace agreement acceptable to all sides can be reached as soon as possible.”

Hong Kong’s Jimmy Lai was set on using US links for anti-China actions, court hears

https://www.scmp.com/news/hong-kong/law-and-crime/article/3322255/hong-kongs-jimmy-lai-was-set-using-us-links-anti-china-actions-court-hears?utm_source=rss_feed

Hong Kong prosecutors have hit out at former media owner Jimmy Lai Chee-ying for likening his appeals for foreign intervention to a transnational partnership among prosecuting authorities, while arguing his “persistent” collaborations with US political figures showed his determination to instigate anti-China measures.

The prosecution on Monday began wrapping up its evidence against the Apple Daily founder at the closing stage of his marathon national security trial at West Kowloon Court after two enforced adjournments.

Deputy Director of Public Prosecutions Anthony Chau Tin-hang dismissed the defence’s contention that Lai was merely exercising his fundamental rights protected by the city’s constitutional documents, including the Basic Law.

He referred to a passage of the prosecution’s court filing that said it was “surprising to see that [Lai] raised freedoms of thought and association as his shield”.

Chau also highlighted a point made in the defence’s written submission that sought to compare what Lai did at the material time with the cooperation between the Department of Justice and the International Association of Prosecutors.

“We submit it is inconceivable they sought to draw this analogy. It is totally incomprehensible and we find it absurd to make this example,” Chau said.

The defence has yet to elaborate in court as to its underlying basis for making the comparison.

The closing speeches from the bar table will be the outspoken Beijing critic’s final court appearances before the three presiding High Court judges return a verdict on his case of conspiracies to publish seditious articles and collude with foreign forces.

The trial was previously adjourned due to a major rainstorm, before judges ordered a further delay over concerns about Lai’s health.

Chau said on Monday Lai could carry on with proceedings after wearing a portable heartbeat monitoring device and receiving necessary medication from the correctional service.

Lai, 77, has been remanded in custody for more than 1,700 days since he was first denied bail in December 2020.

He allegedly used his now-defunct tabloid newspaper and social media platforms to trigger international sanctions and incite public disaffection towards Beijing and the local government between April 2019 and June 2021.

He is also said to have provided financial backing to the “Fight for Freedom, Stand with Hong Kong” (SWHK) lobbying group to seek China’s political and economic collapse.

Prosecutors have largely relied on Lai’s conduct before the implementation of the national security law on June 30, 2020, in contending that he had continued to seek Western intervention through various channels after such an act became a crime.

Chau argued that collusion included indirect advocacy such as by “commenting or endorsing” sanctions with a view to seeking further punitive measures from foreign states.

The prosecutor referred to an array of commentary articles Lai wrote for Apple Daily, in which he allegedly promoted hostile responses from Western countries by purporting to analyse the impact of sanctions, trade restrictions and technological embargoes on China.

Chau highlighted the newspaper founder’s connections with “prominent” American political figures and his assistant Mark Simon, a former US naval intelligence employee, as being “an important conduit to act on his behalf”.

He contended that these “long-term and persistent” collaborations “tended to show” the defendant’s “unwavering intent” to solicit foreign sanctions.

The prosecutor also noted that Lai had admitted in court to calling for sanctions against mainland China and Hong Kong before the national security law took effect.

He stressed the national security law was “specifically tailored to address the prevailing risks in Hong Kong” after months of anti-government protests.

Central authorities must have intended to criminalise appeals made to penalise individual Chinese officials in light of the United States passing the 2019 Hong Kong Human Rights and Democracy Act to pave the way for sanctions, the prosecutor said.

The defence’s interpretation that the law only outlawed acts targeting the state would defeat its purpose, he added.

Throughout the trial, Lai has consistently denied any knowledge of SWHK, which has called for Western sanctions and blockades against Hong Kong and mainland China. He also denied knowing some of the foreign nationals named as co-conspirators in the indictment.

Chau said the court could convict Lai even if the former newspaper owner was unaware of the full extent of the conspiracies, adding that “passive” participation through failing to stop unlawful activity would also attract liability.

The prosecution’s speech continues on Tuesday.

Chinese surgeons save patient who was nearly beheaded by robotic arm

https://www.scmp.com/news/china/science/article/3322257/chinese-surgeons-save-patient-who-was-nearly-beheaded-robotic-arm?utm_source=rss_feed

Chinese doctors have saved a patient whose head was nearly severed by a robotic arm.

Doctors said the patient’s cervical vertebrae had been severed and crucial neurovascular structures had been damaged, but the spinal cord remained intact despite sustaining serious contusions.

“We have looked through much literature at home and abroad, but have never come across a case of such severe cervical vertebra separation, let alone one that survived after treatment,” Chen Huajiang, director of the cervical spine surgery department at Shanghai Changzheng Hospital, an affiliate of the Naval Medical University, said.

The patient was hit by a robotic arm on May 31, in an accident that caused instant paralysis and a heart attack, according to the Chinese medical information site Yixue Jie.

The patient also suffered heavy bleeding, which caused both vertebral arteries to become blocked.

The patient’s blood pressure also fell to dangerously low levels and he needed high doses of medication to keep his circulation going.

“It was clear what would happen to the patient if surgery had not been performed,” Chen said. The spinal cord injury would eventually have shut down the centres that controlled breathing and cardiovascular function.

Chen said that experts in orthopaedics, critical care medicine and anaesthesiology had all discussed the case and concluded that the patient was likely to experience significant bleeding during surgery due to damaged vertebral arteries.

A CAT scan showed that the right vertebral artery had ruptured but was blocked by displaced bone tissue and a blood clot, while the left one was pulled like a stretched tube, barely maintaining the blood flow.

“The pressure in the vertebral artery is very high. If a blood clot were to loosen or fall during surgery, the bleeding could reach 1,000 to 2,000 millilitres within seconds and the patient would not be able to survive,” Chen said.

Chen said the patient’s bones and soft tissues in the front and back of the neck were completely severed and needed to be fixed together with plates.

“However, the injury site was at the back of the neck, where the skin was extensively damaged, increasing the risk of infection from back surgery. With a large amount of blood clots and cerebrospinal fluid between the severed vertebrae, if bacteria were to infect this area, it could lead to a life-threatening brain infection,” Chen said.

The patient was also unable to undergo further imaging tests due to his injuries.

“His injuries were too severe; even completing basic checks posed a significant risk to his life. The slightest movement could cause his blood pressure to drop, making it difficult to maintain stable vital signs,” Chen said.

This meant that Chen and his team would not have a complete understanding of the injury site before the surgery and could only assess the situation as it progressed.

They prepared comprehensive emergency plans and a surgical road map to address potential extreme risks that could arise during the procedure, such as uncontrollable massive bleeding, circulatory collapse and insufficient brain perfusion.

The operation was carried out on June 18 and took three hours. The surgeons removed the blood clot and realigned the severed and displaced cervical structure.

Chen applied two auxiliary plates to provide added stability to the spine, marking the first use of this technique in such an extreme case.

He said while the team was clear about the overall approach, they did not have any precedents for parts of the operation – such as where to fix screws and whether the vertebrae could be securely stabilised – so had to make such decisions as they went along.

“Although it seems that we were merely moving bones, surrounding blood vessels and nerves were also being tugged as we operated. We had to avoid secondary injuries while striving for a high success rate. If the realignment failed.... any damage to the vessels could quickly lead to bleeding that obscured our view,” Chen said.

The patient regained consciousness soon after the surgery and his vital signs gradually stabilised. He is reportedly able to sit up with help and move his arms and shoulders.

---

China’s Unitree, X-Humanoid top medal total in the world’s first humanoid robot games

https://www.scmp.com/tech/tech-trends/article/3322251/chinas-unitree-x-humanoid-top-medal-total-worlds-first-humanoid-robot-games?utm_source=rss_feed

Unitree Robotics and X-Humanoid emerged as the biggest winners by medal count at Sunday’s conclusion of the inaugural World Humanoid Robot Games in Beijing, signalling the rapid advances being made by China in this nascent sector.

Hangzhou-based Unitree won a total of 11 medals including four golds in the three-day event, which saw 280 teams from 16 countries compete in 26 sports, including kickboxing. The firm’s H1 robots scored golds in four track-and-field events: the 400-metre dash, the 1,500-metre race, the 100-metre hurdles and the 4x100-metre sprint relay.

X-Humanoid, formally known as the Beijing Humanoid Robot Innovation Centre, took home 10 medals with two golds. Its robots ruled the 100-metre race and the novel materials handling event – a competition designed to simulate real-life factory floor scenarios.

On the sidelines of the event, Unitree founder and CEO Wang Xingxing told local media that he expected the company’s humanoid robots to be able to run autonomously in future races. At present, most robot competitors are remotely controlled.

The performance of the two Chinese robot makers at the event reflects the progress being made in this sector, as the government has helped supercharge demand for humanoid robots in state-owned enterprises, while a number of manufacturers entered mass production this year.

“China has grown from a follower to a leader in this area,” IDC analyst Li Junlan said.

China’s progress was made on the back of innovations in artificial intelligence software and sensors that helped robots “see” and “hear” better, according to IDC. The research firm projected the global robotics market would be worth US$400 billion by 2029, with China accounting for nearly half of that.

According to the organisers of the event, the humanoid robot games provided “test fields” to measure the balance, decision-making and interactive capabilities of these machines. These skills are expected to be applied later in real-world applications in factories and at home.

Unitree H1’s strong performance in the track-and-field events was partly attributed to its robust mechanical joints, according to Tang Jian, chief technology officer at X-Humanoid.

The H1, which costs 650,000 yuan (US$90,494), is built with Unitree’s self-developed M107 joint motor. It delivers a maximum torque of 360 newton metres, which enables the H1 to take longer strides and make use of a strong kick to go faster in a race.

X-Humanoid’s Tang said the company’s Tien Kung humanoid robot, which won a half-marathon race in April between humans and robots, was being developed into an “all-around” competitor in the mold of Brazilian football legend Ronaldo Luís Nazário de Lima.

Tien Kung robots were built not only to run fast, but to operate steadily and reliably, which made them suitable for real-world applications, according to Tang. He said Tien Kung was also the only robot that runs on its own in races, without any human intervention.

China dominated most of the matches at the inaugural event.

Other Chinese robotics firms that won gold at the games included Neotix Robotics and Booster Robotics, which are both based in Beijing and founded by Tsinghua University alumni. Their robots triumphed in gymnastics, the long jump and in football.

Mishaps during the games included robots tripping into each other and robot kickboxers that flailed their fists blindly in the air before toppling, without even touching their opponents. These highlight the room for improvement in the sector.

“Everything from the events’ rules to on-site judging were established from scratch,” according to international referee Zhang Jidong, who is an associate professor at Tsinghua University. “It’s an explorative process for humans and robots.”

The next games were expected to be held in August next year, also in Beijing, according to organisers. A World Humanoid Robotics Games Federation will also be formed to foster global collaboration in these sporting events.

Xtep posts record interim profit as China’s marathon boom boosts sales of Saucony shoes

https://www.scmp.com/business/companies/article/3322241/xtep-posts-record-interim-profit-chinas-marathon-boom-boosts-sales-saucony-shoes?utm_source=rss_feed

Xtep International Holdings’ interim earnings surged to a record, as the sportswear maker and distributor of the Saucony brand of running shoes benefited from the new-found popularity of marathons and trail running in China.

Net profit rose to a record 913.6 million yuan (US$127.3 million) in the first half, 6.4 per cent more than the revised interim earnings last year, Xtep said in a statement on Monday. Sales increased 7.1 per cent to 6.84 billion yuan, from the restated revenue of 6.38 billion yuan last year.

While Xtep’s mass-market namesake brand contributed 88.5 per cent of the company’s revenue, its professional segment – Saucony and Merrell – reported the sharpest sales growth, jumping 32.5 per cent to 785.1 million yuan. Interim operating profit from the two brands more than tripled to 78.6 million yuan, vindicating the 2023 move by the Xiamen-based company to take full control of the brands’ distribution in China.

Xtep’s “professional-to-mass” influence has been successful in several of China’s major marathon races, giving the company the drive to “maximise the synergies” between the mass-market and high-end brands, chairman and CEO Ding Shuipo said during a post-earnings press conference.

“I believe Xtep has a lot of resources and fundamental advantages in this area, whether it’s in terms of speed, positioning or functionality,” Ding said.

The strong growth shows how some companies that combine mass-market products and niche brands are beginning to crawl their way out of China’s years-long consumption slump, even as overall economic growth remained tepid. Last week, China’s largest games publisher and social media network Tencent Holdings reported a 16 per cent jump in second-quarter profit.

Xtep sold the unprofitable K-Swiss and Palladium brands to Ding’s family for US$151 million last year, in a move to refocus the company’s resources on its mass market and professional brands. The two brands were first acquired for US$260 million in mid-2019.

Inventory turnover days, a benchmark of how fast a company sells through its inventory, rose by 23 days to 91 days, mainly due to an increase in under-three-month inventory for its core brand as it prepares for rising demand during marathon events in the second half, as well as growing Saucony stock for store expansion.

Saucony sales may increase by another 30 to 40 per cent this year, which would drive Xtep’s full-year profit by more than 10 per cent, the company’s executives said on Monday on their earnings call.

Xtep’s net profit margin improved by 1.6 percentage points to 13.4 per cent during the first half, despite a slight decline in mass-market operating profit margin due to growing costs.

The company declared an interim dividend of 18 HK cents per share, more than the 15.6 cents paid last year. This represents a dividend payout ratio of 50 per cent, unchanged from the same period last year. Xtep’s shares jumped 7.3 per cent to close at a two-month high of HK$6.15 in Hong Kong after the results were announced.

Looking ahead, Ding said he is still “very confident” in the growth potential of the competitive sports segment, even as China’s economy is still grappling to grow out of its post-pandemic consumption slump.

“While there is a lot of competition in the running shoes segment, I want to ask – is there any industry in China where there is no competition?” he said.

Chinese centenarian sisters, separated for decades, reunite via video, move many online

https://www.scmp.com/news/people-culture/trending-china/article/3321742/chinese-centenarian-sisters-separated-decades-reunite-video-move-many-online?utm_source=rss_feed

Two centenarian sisters, one in Taiwan and the other in eastern China’s Jiangsu province, have been reconnected via video after losing contact for decades.

The reunion came about thanks to netizens on a leading mainland social media platform and the police.

The reconnection was enabled by an influencer from Henan province in central China who lives with her Taiwanese husband in Taipei.

She released a video at the end of July, which has captivated mainland social media.

In the video, the elder sister, Wen Sue, 101, who is the influencer’s neighbour, said she hoped to find her younger sister, Wen Quanmei, aged 100.

She said they had not been in contact with each other for several decades, the Modern Express reported.

The elder sister, who speaks in the strong Jiangsu dialect, said she lived in Changzhou, Jiangsu, before moving to Taiwan in 1949.

After the video went viral, a netizen based in Jiangsu left a comment that her mother-in-law matched the personal information given by the elder sister.

Police in Changzhou set about looking for Wen Quanmei and soon confirmed that the netizen’s mother-in-law is the younger sister of Wen Sue.

Since the two centenarians both have poor eyesight and cannot hear clearly, direct video calls were not appropriate.

However, the Changzhou police asked the younger sister to make a short video clip that was sent to the influencer in Taipei.

The influencer, who uses the alias @zhongyuannvzizaitaiwan, then showed the video to the elder sister.

“Sister, we have not contacted each other for many years. I did not know if you were still alive,” the younger sister said in the video.

“How is your health? I have always missed you,” she said.

According to the younger sister’s son, his aunt came back to the mainland in 1989 and lived in their home for a while.

But they lost touch after his home was demolished.

“I remember when she visited us in 1989, she gave us a watch, a necklace and a ring,” the son was quoted as saying.

“My mother remembers what food my aunt likes to eat and is always concerned with her health,” he added.

At the beginning of August, the Taipei influencer shared a video showing the elder sister saying: “I have finally seen my younger sister. It is fine. Thank you.”

The influencer said whenever she meets the older sister on the street, she always asks her if her younger sister has called.

The elder sister’s children visit her once a week because her carer is a foreign worker who does not speak Chinese, said the influencer.

The police in Changzhou told the media that they are liaising with the local Taiwan Affairs Office in a bid to let the two sisters meet offline.

Their story has resonated on mainland social media.

“I am moved to tears when one calls the other ‘Sister’,” said one online observer.

“Their family has a longevity gene,” said another.

China’s No 2 semiconductor foundry Hua Hong seeks acquisition to bolster legacy chips lead

https://www.scmp.com/tech/tech-trends/article/3322215/chinas-no-2-semiconductor-foundry-hua-hong-seeks-acquisition-bolster-legacy-chips-lead?utm_source=rss_feed

Hua Hong Semiconductor, China’s second-largest contract chip manufacturer, plans to acquire equity interests in sister foundry Shanghai Huali Microelectronics for an undisclosed sum to consolidate resources and meet growing for demand for so-called legacy chips.

On Monday, Hua Hong suspended trading of its shares on the Nasdaq-style Star Market of the Shanghai Stock Exchange for up to 10 days, as the proposed transaction announced on Sunday was subject to a review by the company’s board and the general meeting of the firm, as well as approval from regulatory authorities.

During that suspension, Hua Hong’s Hong Kong-listed shares will continue trading, according to its Monday filing. The stock closed down 6.20 per cent to HK$48.12 on the same day.

The Chinese pure-play chip foundry, which is ranked behind domestic market leader Semiconductor Manufacturing International Corp (SMIC), said its proposed deal would be financed with a combination of cash payment, share issuance and raising of matching funds.

While technological hurdles and US sanctions have kept China behind in advanced chipmaking, domestic production and international demand for legacy chips have maintained momentum.

Legacy chips – made using 28-nanometre or larger wafer etching processes – are regarded as holding strategic value because of their versatility. These chips are widely used in cars, home appliances, consumer electronics, broadband network equipment, factory automation systems, medical devices and military systems.

European semiconductor giant STMicroelectronics last November said it was outsourcing the fabrication of legacy chips to Hua Hong, a deal that strengthened China’s role in this semiconductor market segment.

Acquisition target Huali’s No 5 wafer fabrication facility, for example, supports mature process nodes to manufacture 65-nm and 40-nm chips. The facility has a monthly capacity of 38,000 chips, according to Huali’s website.

Hua Hong’s proposed transaction comes after analysts projected the potential impact of US President Donald Trump’s proposed 100 per cent tariffs on imported chips would be small for the company and SMIC.

“Both foundries are more bullish than three months ago, as [US] tariffs did not hurt the full-year outlook as much as feared, while benefiting from pre-tariff stocking in the June quarter,” Morningstar equity analyst Phelix Lee said in a research note last week.

“The foundries said their supply is tight, particularly in power management and image sensors,” Lee said. “Subsidies in China have made upgraded consumer goods more enticing, boosting demand for a wide range of chips.”

“The duo expects sequential volume and average selling price increases in the September quarter,” the analyst added.

On August 8, Hua Hong reported second-quarter revenue of US$566.1 million, up 18.3 per cent from US$478.5 million a year earlier. Net profit was US$8 million, a 19.2 per cent increase from US$6.7 million a year ago.

---

EU diplomats mull skipping China military parade over Putin’s attendance: sources

https://www.scmp.com/news/china/diplomacy/article/3322196/eu-diplomats-mull-skipping-china-military-parade-over-putins-attendance-sources?utm_source=rss_feed

European envoys in Beijing are discussing plans to skip China’s massive military parade next month after considering the attendance of Russian President Vladimir Putin and the possible participation of Russian troops, the Post has learned.

According to five sources familiar with the matter, European missions in Beijing have been invited to the parade and events on the same day but are particularly troubled by the Russian leader’s attendance as Moscow has intensified its attacks on Ukrainian territory.

As the war in Ukraine drags on, some European diplomats were conflicted over being in the presence of “the same troops that invaded Ukraine”, one of them said, although there is no confirmation that Russian troops would take part.

The Kremlin in June said Putin would travel to China from August 31 to September 3 to take part in the rare military parade Beijing is staging to commemorate the end of World War II, as well as attend the Shanghai Cooperation Organisation summit.

The parade – poised to be only the second time China has held such a parade commemorating the war’s end – would offer Beijing a chance to showcase its military’s combat capabilities and expanded global clout.

The Kremlin did not say whether Russian troops would march alongside Chinese military personnel in this year’s parade.

The Post learned there might not be foreign troops this year.

At the inaugural edition in 2015, a 76-man strong elite Russian Honour Guard was part of the formation.

The sources, all of whom declined to be named because they were not authorised to speak to the media, said no strict restrictions or guidelines were in place as to whom European embassies should send for the event, with some envoys having decided against attending.

Others, they said, had chosen to go on leave or abroad for their holidays during the same period. The European Union’s ambassador to China, Jorge Toledo, would not be attending the parade, according to one source.

Another said Europe could send a “strong message” about its unity and position on the Ukraine war if its ambassadors coordinated to skip the parade, as Chinese officials have sought to pressure European missions to confirm their attendance.

The Post has reached out to China’s Ministry of Foreign Affairs for comment.

In 2015, the foreign ministers of France, Hungary and Italy attended the event while the Czech Republic and Serbia sent their presidents. Former British prime minister Tony Blair and former German chancellor Gerhard Schröder also attended the event.

For next month’s parade, Serbian President Aleksandar Vučić and Slovak Prime Minister Robert Fico have confirmed their attendance.

European countries have aired deep concerns over the situation in Ukraine as Russian forces have ramped up attacks in recent weeks.

On Saturday, after talks in Alaska between US President Donald Trump and Putin failed to deliver a ceasefire in Ukraine, European leaders said they stood ready to “uphold the pressure” on Russia “as long as the killing in Ukraine continues”.

“We will continue to strengthen sanctions and wider economic measures to put pressure on Russia’s war economy until there is a just and lasting peace,” according to a statement signed by the leaders of Britain, Finland, France, Germany, Italy and Poland, as well as the European Commission and European Council.

Tensions between Brussels and Beijing remain high despite a recent summit, marked by mounting concerns among EU leaders over China’s industrial overcapacity and its stance on Russia’s aggression against Ukraine in the 3½-year armed conflict.

At last month’s summit in Beijing with European Council President Antonio Costa and European Commission President Ursula von der Leyen, Chinese President Xi Jinping said the two sides should “make the right strategic choice” and “properly handle differences and frictions”.

Xi further urged Europe and China to find common ground and “refrain from using restrictive economic and trade tools”.

On Wednesday, in another sign of rising trade tensions, China announced sanctions on two European banks.

Beijing’s move followed earlier sanctions imposed by the European bloc on two small Chinese banks accused of facilitating the exchange of digital assets that are “significantly frustrating” EU sanctions.

Additional reporting by Sylvie Zhuang and Laura Zhou

China’s Nvidia challenger Cambricon to raise US$560 million for AI chip development

https://www.scmp.com/tech/big-tech/article/3322203/chinas-nvidia-challenger-cambricon-raise-us560-million-ai-chip-development?utm_source=rss_feed

Chinese semiconductor firm Cambricon Technologies, seen as a potential future challenger to Nvidia, plans to raise nearly 4 billion yuan (US$560 million) for AI chip development, boosting its standing in the country’s tech self-sufficiency drive.

In a statement on the weekend, Cambricon said the Shanghai Stock Exchange had given the go-ahead for its 3.98 billion yuan fundraising plan, which is pending approval from the China Securities Regulatory Commission. The move comes after its stock price nearly tripled over the last 12 months as China’s onshore investors rushed to bet on its AI prospects.

The shares gained another 6 per cent in Shanghai on Monday to reach 976.8 yuan, on track to become only the second stock to hit 1,000 yuan in China’s onshore market after Kweichow Moutai. Its shares have gained more than 280 per cent over the past year.

Cambricon’s prospects have been boosted by the Chinese government’s determination to use local artificial intelligence chips. As the Post previously reported, China is requiring its data centres to use more home-grown computing chips in a move that underscores Beijing’s accelerated efforts to cut reliance on foreign technology as the US tightens export controls.

Publicly owned computing hubs across the country have been asked to source more than 50 per cent of their chips from domestic producers to support the indigenous semiconductor sector, generating demand for players like Cambricon.

The Beijing-based company proposed the fundraising in July, when it said the capital raised would be used on chip hardware and software projects for large language model development. These included four chips for large AI model training and inference, and a software platform that is akin to Nvidia’s CUDA.

China is in urgent need of competitive home-grown AI chips, the company said in July. Cambricon had “strong chip design capabilities” but the ecosystem maturity of its independently developed software platform still lagged behind Nvidia’s CUDA.

The fundraising was crucial for Cambricon to consolidate its existing technological advantages and expand its product ecosystem in an industry led by Nvidia, AMD and Huawei Technologies, according to the company.

Founded in 2016, Cambricon went public on the Shanghai Stock Exchange’s Nasdaq-style Star Market in July 2020. It is considered to be one of China’s best hopes in developing home-grown graphics processing units competitive with those of Nvidia, whose supply of AI chips to China faces constant risks of disruption amid the US-China tech war.

The H20, Nvidia’s most advanced AI processor that Chinese firms have access to, is now facing scrutiny after Chinese authorities flagged alleged security risks. The Cyberspace Administration of China and state-run news outlets raised the concerns after US lawmakers requested that tracking features be incorporated into advanced chips. Nvidia has repeatedly denied the allegations and said there were no back doors in its chips.

A group of Chinese semiconductor and AI companies recently formed an alliance to push for the use of locally developed processors in AI projects. Initial members included Cambricon, chipmakers Biren Technology and Moore Threads, as well as Huawei’s Ascend computing business unit.

Cambricon’s revenue in 2024 reached 1.17 billion yuan, up 65.55 per cent from the previous year, the company said in April. It recorded 355 million yuan in net profits in the quarter ended March 31, surging 256 per cent year on year.

Ex-China monk sues daughter for US$28,000 for parental support after leaving monastic life

https://www.scmp.com/news/people-culture/trending-china/article/3321601/ex-china-monk-sues-daughter-us28000-parental-support-after-leaving-monastic-life?utm_source=rss_feed

A man in China, who spent all his savings over 10 years as a monk, has sued his daughter for 200,000 yuan (US$28,000) for parental support after leaving his monastic life.

However, a court has dismissed the case, ruling that he had not lost his ability to work.

On August 9, the mainland media outlet The Paper reported the case, citing China Judgements Online.

The story has sparked a widespread debate online.

Xie, 54, from Shandong province in eastern China, claimed that in 2010, while overwhelmed by work stress, he took a leave from his job and went to an undisclosed mountain to practise Buddhism.

In 2014, he terminated his labour contract to fully dedicate himself to his spiritual practice.

The same year, Xie divorced his wife, who did not support his decision.

During the dividing of assets between them, he gave his daughter a house worth around 2.2 million yuan (US$306,000) and 500,000 yuan (US$70,000) in cash as child support.

He also provided his ex-wife with an additional 150,000 yuan (US$21,000) as compensation.

Xie saved around 500,000 yuan to become a monk and travelled across the country studying Buddhism.

While some temples provided food and lodging, he had no income and paid all his travel expenses.

During six months in eastern China’s Zhejiang province, he received a small monthly allowance of 2,000 yuan (US$280), but in Shanxi, northern China, he earned nothing for three months.

After 10 years of spiritual practice, Xie exhausted his savings and was forced to live in a cave.

He eventually suffered a mental breakdown and chose to return to lay life.

Xie is currently renting a flat in Guangzhou, Guangdong province, southern China, for 1,500 yuan (US$210) a month, relying entirely on funds from relatives.

He claims he is too old to work, lacks job skills, is unable to earn money, and believes his daughter should support him.

Xie is demanding a one-time payment of 200,000 yuan for parental support, along with a guarantee that she will not be asked for money again.

The daughter argues that the property division during the divorce was linked to her father’s parental responsibilities and is unrelated to this case.

She believes her father had voluntarily chosen not to work and had not lost his ability to labour.

She also said that with a monthly salary of 10,000 yuan (US$1,400), she could not afford such a large sum but was willing to provide a smaller monthly allowance.

However, Xie reportedly spoke harshly to his daughter in court, leading her to withdraw her offer of support.

The court eventually ruled that Xie had not lost his ability to work and that his savings were enough to cover his daily expenses, dismissing his request.

The story has attracted more than 10 million views on mainland social media.

One online observer said: “He gave so much to his wife and daughter during the divorce, yet now he cannot get a penny. His daughter seems heartless.”

However, another said: “This father was absent from the life of his daughter for 10 years, but now demands repayment. It is unfair to the daughter.”

Chinese scientists transplant human brain cells to mice, boosting pleasure levels

https://www.scmp.com/news/china/science/article/3322054/chinese-scientists-transplant-human-brain-cells-mice-boosting-pleasure-levels?utm_source=rss_feed

Chinese scientists have found a way to turn human stem cells into dopamine-producing brain cells, transplanting them into mice and helping reduce depressive behaviour and boost pleasure.

When the engineered neuron-like cells were grafted into depression-model mice, they helped lessen symptoms like anxiety and resignation while increasing feelings of enjoyment.

The development has the potential to be employed as a therapy to treat neuropsychiatric disorders by directly targeting and repairing parts of the brain involved in mood regulation.

“This study provides proof-of-concept evidence supporting the use of cell therapy to treat psychiatric disorders by specifically reconstructing dysfunctional neural circuits,” the researchers said in a paper published in the peer-reviewed journal Cell Stem Cell on August 11.

Major depressive disorder ranks among the top contributors to global disease, affecting hundreds of millions of people around the world.

Some experience treatment-resistant depression, which is associated with symptoms like anhedonia, or an inability to experience enjoyment from once pleasurable activities. Anhedonia can persist even after mood symptoms are alleviated.

Dopaminergic neurons are a special type of cell that produce and release dopamine, a neurotransmitter involved in motivation, reward and movement. Depressive patients with anhedonia can exhibit a state of reduced dopamine activity.

Within the midbrain, there are three main subtypes of dopaminergic neurons: A8, A9, and A10. Among these, A10 plays a key role in reward and incentive-based behaviours.

Dysfunction of the A10 neuron system has been linked to psychiatric disorders, including depression, schizophrenia and drug addiction. This has made A10 neurons a target cell for the treatment of these disorders.

Human pluripotent stem cells, which can differentiate into all cell types, have been used to generate dopaminergic neurons, including A9, though the team said that efficient generation of A10 neurons had previously been “elusive”.

The team from the Chinese Academy of Sciences at Fudan University and stem cell therapy company UniXell Biotechnology developed a method to generate A10-like cells by giving human stem cells a special mix of chemicals at a specific stage of differentiation.

The resulting engineered neurons exhibited the same molecular and electrical properties as A10 neurons.

When the engineered neurons were transplanted into depression-model mice generated through exposure to chronic stress – exhibiting symptoms like resignation and loss of pleasure – they led to “significant antidepressant-like behaviours”.

This included relieving anhedonia and behavioural despair, a state in which animals stop attempting to escape from stressful situations, such as the threat of drowning, and become immobile.

The team found that the transplanted neurons were able to effectively integrate into neural circuits, including receiving signals from surrounding neurons, “demonstrating their potential for repairing dopamine-related pathways”.

The specificity of the neural cell therapy could offer a “significant advantage” over broad pharmaceutical drugs by providing fewer off-target side effects, according to the researchers.

“This study provides strong proof of concept for [A10-neuron-based] therapy in the clinical treatment of major depression and extends the potential applications of cell-based therapy for psychiatric disorders,” they said.

---

The rise of China’s soft power

https://www.scmp.com/news/china/series/3322179/rise-chinas-soft-power?utm_source=rss_feed

No Ukraine deal for Trump, Putin; Chinese investors in Athens: 5 weekend reads you missed

https://www.scmp.com/news/world/article/3322173/no-ukraine-deal-trump-putin-chinese-investors-athens-5-weekend-reads-you-missed?utm_source=rss_feed

We have put together stories from our coverage last weekend to help you stay informed about news across Asia and beyond. If you would like to see more of our reporting, please consider .

China report says US using human rights as ‘bargaining chip’ in deeply unequal society

https://www.scmp.com/news/china/diplomacy/article/3322151/china-report-says-us-using-human-rights-bargaining-chip-deeply-unequal-society?utm_source=rss_feed

China has accused the United States of using human rights as a “bargaining chip” in its latest annual report on the issue.

The report released on Sunday criticised what it called the hypocrisy of the US political system, its unequal social welfare, widespread racism, and the politicisation of immigration, where immigrants become “scapegoats for political parties”.

The US had turned human rights into “props for political theatre” and “bargaining chips in power games”, it alleged.

The year 2024 was meant to be a defining moment for American citizens to exercise their political rights, the report stated, in an apparent reference to the US presidential elections.

“In reality, the year was fraught with political violence as politics was controlled by money, justice was hijacked by politics, and voters were disenfranchised by electoral rules.”

China’s reports on US human rights violations have in recent years highlighted issues such as racial discrimination, wealth inequality, gun violence and police brutality.

The latest report accused US financiers of prioritising their own interests and deliberately manipulating politics through the power of money. It also criticised both the Republican and Democratic parties for representing special interest groups and often neglecting, or even ignoring, the needs of voters.

The report further stated that “skyrocketing inflation” had widened the wealth gap, “delivering catastrophic blows to low- and middle-income families” and sending homelessness soaring. America’s annual inflation rate as of July was 2.7 per cent.

“The costly and inefficient health care and insurance systems sparked widespread outrage. Substance abuse continued to harm public health. Gun violence threatened lives. Police brutality persisted in total disregard for human lives,” the report said.

It also took aim at the fentanyl issue, a key point of contention in US-China relations, with Washington alleging that Beijing is not doing enough to crack down on the production and export of precursor chemicals fuelling the opioid epidemic in the US.

The report, issued by the State Council Information Office, said America’s drug abuse and opioid crisis could be traced to interest hijacking, government-business collusion and regulatory failures.

It blamed educational inequality for perpetuating inter-generational poverty, with the US “effectively split into ‘Two Americas’ – a small wealthy elite and a vast low- and middle-class majority”.

The annual reports are viewed as part of Beijing’s strategic response to Western allegations of human rights abuses, aiming to highlight serious issues within the United States itself.

The latest one comes days after Washington released its own annual human rights report covering nearly 200 countries. With regard to China, the US report strongly condemned what described as genocide and crimes against humanity in the Xinjiang Uygur autonomous region, allegations Beijing has repeatedly denied.

“Genocide and crimes against humanity occurred during the year in China against predominantly Muslim Uygurs and members of other ethnic and religious minority groups in Xinjiang,” Wednesday’s US report said.

It also expressed concerns over workers’ rights, noting that Chinese law did not protect the right to strike. “Labour inspectors lacked authority to compel employers to bargain with the union. Penalties were limited and never applied against employers who violated the law. Workers who tried to exercise their rights outside of the official unions were subject to penalties,” it said.

In addition to sharp critiques of American democracy and inequality, Beijing’s report – drawing extensively from foreign media coverage - also underscored cases of racism, gender inequality and immigration issues.

Racial minorities faced consistent and extensive discrimination and exclusion in the US, it stated, while accusing politicians of exploiting these racial divides to distract from deeper structural problems, thereby intensifying conflict and hostility among communities.

“Immigration policies are deeply intertwined with political elections, with politicians openly inciting hatred against immigrants, who have become scapegoats for political parties to shift social tensions.”

Could Hong Kong, mainland China benefit from more cross-border clinical trials?

https://www.scmp.com/news/hong-kong/health-environment/article/3322131/could-hong-kong-mainland-china-benefit-more-cross-border-clinical-trials?utm_source=rss_feed

Hong Kong patients could benefit from taking part in more clinical trials in mainland China, and vice versa for those on the other side of the border, according to the CEO of a government-owned institute that is exploring the projects and looking to boost biomedical innovation in the Greater Bay Area.

Professor Bernard Cheung Man-yung, CEO of the Greater Bay Area International Clinical Trial Institute, said his organisation would explore initiatives that benefited patients.

“Can a patient from Hong Kong go to the Greater Bay Area, or just Shenzhen, to join a clinical trial, or a mainland patient come to Hong Kong to join a research project? This is something we will explore,” Cheung said in an interview last week.

The bay area scheme is the central authorities’ blueprint for connecting Hong Kong, Macau and nine other cities in Guangdong province into an economic powerhouse.

The plan to establish the institute was first raised in Chief Executive John Lee Ka-chiu’s policy address in 2023. It aimed to provide a one-stop clinical trial support platform for medical research institutions, under the city’s mission to become a health and medical innovation hub.

Since its opening last November in the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone, the institute has been tasked with coordinating resources in the local public and private sectors and helping mainland and overseas drug companies with clinical trials.

But it does not take part in the day-to-day operations of individual trials.

Patients can get access to more advanced treatments from clinical trials, which gives hope to those who do not respond well to existing therapies.

Cheung said patients might benefit from trials across the border, as there were certain procedures and treatments that were only offered at specific hospitals.

But some issues would need to be addressed before the practice could be more widely adopted, he said.

“If a patient comes from the mainland to Hong Kong for a trial, can he go back to his hometown immediately after, if an observation period is needed?” Cheung said. “If he feels unwell on the mainland, what can be done?”

In the long run, the institute was also considering promoting clinical trials in outpatient clinics, which have a large number of chronic patients, Cheung said.

Currently, the city’s clinical trials are mostly conducted in major hospitals, including those affiliated with the two medical schools.

Professor Stephen Chan Lam, from the Chinese University of Hong Kong’s department of clinical oncology, said that recruiting patients across the border for clinical trials would help increase the sample size of studies.

“Studies could be done more quickly, and there would be incentives for pharmaceutical firms to come to Hong Kong,” Chan said. “We could attract people to come to Hong Kong for investment, research and even set up headquarters.”

He said the biggest current obstacle for patients in joining cross-border clinical trials was the difficulty in retrieving complete medical records and documents across the jurisdictions of Hong Kong and the mainland.

To meet clinical trial requirements stipulated by major regulatory agencies, such as the United States Food and Drug Administration and China’s National Medical Products Administration, researchers must keep all the original medical records of patients during the clinical trial period – referred to as “source documents” – for review.

They include those of any unplanned hospital admission if a patient suddenly feels unwell in their hometown.

“If a patient is admitted to a hospital in Zhuhai or Shenzhen, it would be very difficult [for Hong Kong] to retrieve all the source documents,” Chan said, referring to patients who had joined trials in Hong Kong. “Currently there isn’t a mechanism for us to obtain the information.”

Similarly, there is no mechanism for mainland hospitals to obtain a patient’s complete medical records in Hong Kong.

He said that setting up a mechanism for the exchange of medical records across the border would require government-level efforts.

Asked about the progress of improving the flow of data transfers between Hong Kong and the mainland, Cheung said governments from both sides were “actively” discussing details of the issue.

“The government hopes to reduce unnecessary barriers. But there are also two major principles: protection of personal privacy ... and national security,” he said, without elaborating further.

The institute last month announced its first cross-border project, involving a therapeutic HIV vaccine being jointly developed by the University of Hong Kong (HKU) and Immuno Cure Biotech, a company with a presence in both the city and on the mainland.

The HIV vaccine is among the five clinical trials that the institute has facilitated, including those related to liver and lung cancers. Seven other projects are being planned.

So far, the institute has met 72 drug companies, tertiary institutions and research facilities for discussions.

Yuen Man-fung, chair professor and chief of the division of gastroenterology and hepatology at HKU, said that the city had advantages in conducting clinical trials on liver diseases due to a relatively large number of patients and the city’s years-long experience and positive track record in research.

He said the institute would be helpful in lining up budding researchers with pharmaceutical firms interested in conducting trials in the city.

“This platform would in effect help local researchers, especially in nurturing talent,” he said.

Why Lockheed Martin’s Philippine R&D hub will be on China’s radar

https://www.scmp.com/week-asia/politics/article/3321952/why-lockheed-martins-philippine-rd-hub-will-be-chinas-radar?utm_source=rss_feed

Lockheed Martin is set to establish an R&D facility in Manila in partnership with a major Philippine university, in a move analysts say will both strengthen the nation’s technological foundations and enmesh it further into Washington’s regional security framework.

The American defence giant announced on Tuesday a collaboration with Southern Methodist University (SMU) aimed at boosting innovation, developing advanced technologies and nurturing local talent in partnership with Philippine academic and industrial institutions. The initiative forms part of Lockheed Martin’s F-16 Block 70 proposal for the Philippine military’s multi-role fighter programme.

Jess Koloini, business development lead for Lockheed Martin’s F-16 programme, described the partnership as an investment in “new capabilities and intellectual properties” through close cooperation with the Philippines’ leading universities and companies.

“This partnership will not only support the country’s ‘self-reliant defence posture’, but also create a lasting impact on the Filipino workforce, driving economic growth and prosperity,” he said.

Under the agreement, SMU’s Centre for Digital and Human-Augmented Manufacturing and its Deason Innovation Gym will help strengthen Philippine research and development capacity in digital modelling, simulations, robotics, automation, artificial intelligence and virtual and augmented reality.

The project grants Philippine partners access to advanced innovation tools at SMU, provides funding for business incubation and academic initiatives and encourages collaboration with top local universities and firms to generate new technologies and intellectual property.

“This partnership is an investment in the strength of the Filipino workforce,” said Ben Zoghi, SMU’s associate dean for Advanced Studies and Industry Partnerships.

“These projects will significantly boost the Philippines’ academia and industry, enabling them to leverage digital innovation technologies to drive economic growth and global industrial competitiveness.”

Observers say the initiative will enable the United States to embed itself further into the Philippines’ military, academic and industrial sectors.

“For China, this development will be perceived as yet another sign that the Philippines is moving closer to the United States, not only tactically but in a more structural sense,” said Arnaud Leveau, an assistant professor of geopolitics at Paris Dauphine University.

“It reinforces the impression that the Philippines is increasingly positioning itself within the US security architecture in the region. More broadly, for Southeast Asia, this illustrates how the US-China rivalry is extending into technological and educational domains, and not merely traditional defence cooperation.”

Political analyst Sylwia Monika Gorska agreed, noting that the new facility would develop expertise in digital modelling, simulations, robotics, automation, and AI – precisely the skills required to support and modernise complex defence platforms.

“This directly supports [Manila’s] Self-Reliant Defence Posture Revitalisation Act, which is about reducing dependence on foreign suppliers by building domestic industrial and technical capacity,” Gorska said.

She described the collaboration as both a defence capability boost and an example of “classic soft-power engagement: deepening relationships through knowledge transfer, workforce training and integration into allied innovation networks”

“But those same capabilities have clear defence applications,” Gorska said. “Giving the Philippines more control over the readiness and modernisation of its fleet.”

While it had been framed to avoid overt military signalling, Gorska emphasised that the strategic outcome of the project was a more robust and autonomous defence capability. “It’s a softer route to hard-power gains,” she added.

In March, Washington approved the sale of 16 F-16C Block 70/72 jets and four F-16B Block 70/72 fighters to Manila. But Philippine Ambassador to the US Jose Manuel Romualdez later admitted the government was still seeking the funds to buy the US jets, worth US$5.58 billion.

Even if the F-16 deal does not materialise, Gorska said the infrastructure and expertise developed through the Lockheed Martin partnership would position Manila to more effectively integrate future advanced or dual-use systems, embedding the Philippines deeper within allied defence innovation networks.

“If the US$5.58 billion sale is approved, the Manila centre’s engineering and prototyping capabilities would allow more maintenance, upgrades and systems integration to be done locally rather than in foreign depots. That would shorten turnaround times, reduce reliance on overseas support and give the Philippines greater control over the readiness of its fleet,” she said.

“There’s an economic and resilience dimension, too. Linking defence modernisation with civilian innovation capacity reduces the vulnerabilities that come from over-reliance on a single external supplier.”

Lockheed Martin’s presence in the Philippines highlighted the market’s potential, said Sherwin Ona, an associate professor of political science at De La Salle University, noting that Manila had been eyeing the company’s F-16 Viper, as well as US missile and electronic systems such as the High Mobility Artillery Rocket System.

He called the offer to establish innovation hubs with local universities “a plus for the country”.

“Upgrading the skills and capacities of Filipinos is crucial in building its defence industries. This proposal directly supports the self-reliance defence programme of the Marcos administration,” said Ona, also a visiting fellow at Taiwan’s Institute for National Defence and Security Research.

Chris Gardiner, CEO of the Institute for Regional Security in Canberra, suggested that the partnership could serve as a model of the Swedish ‘Triple Helix’ – a close collaboration between industry, academia and the defence sector.

“This advanced tech partnership is exactly what the Philippines needs for strengthened defence self-reliance,” he said.

Gardiner said that Lockheed Martin typically invested in local tech capabilities where the workforce was skilled, government policy was supportive and there was a clear return on investment – criteria that Manila met.

“The US wants self-reliant defence partners in the Indo-Pacific and this is a step that will strengthen US perceptions of the Philippines’ burden sharing and determination, and also better position the Philippines to play a balancing role in a region facing advanced tech arms competition,” he said.

“And of course, in investing in US tech, the Philippines strengthens its standing with the US President Donald Trump administration even further”.

However, Gorska cautioned that deepening defence-industrial integration between the US and the Philippines was likely to provoke a response from Beijing.

“The facility deepens US-Philippine defence-industrial integration, which Beijing will likely read as part of a broader US strategy to lock in partnerships in the Indo-Pacific,” she said, potentially drawing “sharper reactions from China – through diplomatic pressure, economic measures or heightened military activity near Philippine-claimed waters”.

“Over time, this combination of capability growth, alliance depth and industrial autonomy will make the Philippines a more credible security partner. The trade-off is that it may also intensify strategic frictions with China.”

Chinese pharma firms Hengrui, Hansoh expected to post strong first-half profits

https://www.scmp.com/business/article/3322005/chinese-pharma-firms-hengrui-hansoh-expected-post-strong-first-half-profits?utm_source=rss_feed

Jiangsu Hengrui Pharmaceuticals and Hansoh Pharmaceutical Group, two of China’s largest drug makers, are expected to report significantly improved profits, buoyed by novel drug roll-outs and revenue from technology licensing.

On August 21, Hengrui, China’s largest drug maker by market value, is expected to say its net profit for the first half rose 40 per cent from a year earlier to 4.1 billion yuan (US$570.8 million), with revenue up 9 per cent to 15.7 billion yuan, according to analysts’ consensus estimates from Bloomberg. For all of 2025, the company’s profit is expected to improve 28 per cent to 8.1 billion yuan.

The Shanghai-listed company went public in Hong Kong in May, raising HK$9.9 billion (US$1.26 billion). The ramp-up of novel drug sales is a key driver of the company’s profit growth, as past research and development efforts paid off and reduced its reliance on less lucrative generics, analysts said.

“The launches of these innovative drugs will further improve Hengrui’s revenue structure and shrink the role of generic drugs in its business,” Huayuan Securities analyst Liu Chuang said in a July 29 report.

According to a recent report from Guotai Haitong Securities, generics accounted for 43 per cent of Hengrui’s revenue last year, down from 62 per cent in 2022. That figure was expected to fall to 23 per cent in 2027.

After a decade of policy reforms that raised the quality of generics and cut red tape for innovative drug approvals, Beijing has urged the nation’s pharmaceutical firms to invest in novel drug development to raise the industry’s global competitiveness.

Hengrui expected to receive 11 approvals from China’s drug regulators this year, with 13 next year and 23 in 2027, according to its 2024 annual report. They include highly popular drugs for diabetes, obesity, renal disease, cancer and autoimmune diseases.

By the end of May, Hengrui had launched 19 innovative drugs, 15 of which were covered by the government’s national health insurance reimbursement scheme, according to Guotai Haitong Securities.

Meanwhile, revenue from licensing the development of drug candidates and commercialisation rights would play a greater role in driving revenues, analysts said.

Since 2018, Hengrui had signed 14 “out-licensing” deals that included total upfront payments of US$600 million, while additional potential payments of up to US$13.4 billion would be payable when the candidates reached certain regulatory and sales targets, according to Huayuan Securities.

That was before Hengrui’s July 28 deal with the UK’s GlaxoSmithKline, which agreed to pay Hengrui US$500 million for the exclusive global rights to develop a dozen drugs. Further sums of up to US$12.5 billion are payable if certain milestones are reached.

Hansoh, which is based in eastern China’s Jiangsu province, is expected on August 18 to report that its first-half net profit rose more than 51 per cent to 2.5 billion yuan, according to a Bloomberg consensus forecast. Full-year profit for the company, which focuses on cancer, infectious, central nervous system and metabolic drugs, is expected to improve 6.2 per cent from a year earlier to 4.64 billion yuan.

Innovative drug sales were projected to surpass 10 billion yuan and contribute around 80 per cent of the company’s total revenue this year, up from 77 per cent last year and 45 per cent in 2021, Haitong Securities analysts wrote in a June 15 report.

Jing Qian unpacks the US-China trade talks and their ‘manageable’ rivalry

https://www.scmp.com/economy/global-economy/article/3321959/jing-qian-unpacks-us-china-trade-talks-and-their-manageable-rivalry?utm_source=rss_feed

Jing Qian is vice-president of the Asia Society and managing director of its Centre for China Analysis (CCA), which he co-founded with Kevin Rudd, former prime minister of Australia. His research examines the interplay between domestic politics and foreign policy in the United States and China.

In his , he delves into the two countries’ all-important relationship, how its twists and turns play out in Europe and the numerous domestic economic challenges Beijing is attempting to tackle.

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

This outcome was largely anticipated. The Stockholm joint communique explicitly referenced the Geneva joint statement – the leader-level blueprint endorsed by both presidents that set out core principles – and portrayed the London talks as a continuation. This framing makes it useful to review the progression from Geneva.

When US and Chinese negotiators gathered in mid-May in Geneva, de-escalation was their shared interest. Markets were rattled, global forecasts had been dimmed and both Beijing and Washington needed breathing space.

Around the table sat US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer. They faced China’s Vice-Premier He Lifeng, backed by veteran negotiators – Vice-Minister of Finance Liao Min and Vice-Minister of Commerce Li Chenggang – described by their US counterparts as “tough”.

What emerged was not a sweeping accord but a 90-day tariff truce – and, more critically, a re-established leader-level channel for structured dialogue.

By June, in London, the tone had shifted to cautious poise. Bessent returned, joined by Commerce Secretary Howard Lutnick, with Greer again coordinating. On the Chinese side, He Lifeng remained at the helm, alongside Commerce Minister Wang Wentao and Li. Bessent departed early to give testimony to the US Congress, but the process held.

Talks were described as “professional, rational, in-depth and candid”, and produced a framework to implement the Geneva accord: adjustments to rare earth export rules, signals on easing certain US export controls. However, implementation proved uneven, hampered by misinterpretations and complex internal discoordination on both sides.

In late July, the venue shifted to Stockholm. Bessent and Greer again faced He Lifeng – still the political anchor of Beijing’s team – with Li as the key negotiator.

Over two days in Sweden’s Rosenbad, discussions included market access concerns and Chinese investment in the US, fentanyl precursors, Chinese purchases of Russian and Iranian oil, US export controls on technology, as well as rare earth minerals and magnets.

US officials pressed Beijing to pivot more decisively toward a consumer-driven growth model, while stressing that Washington sought to “de-risk” rather than fully decouple in strategic industries such as rare earths, advanced chips and medicines. An extension of the 90-day tariff truce was agreed to in principle, with final approval left to US President Donald Trump.

“These were far-reaching, robust and highly satisfactory talks,” Bessent said afterward – though he included a warning that China would not receive a “special deal” and purchases of Russian oil could trigger steep new tariffs.

Washington’s recent tariffs on Indian goods over Russian oil purchases underscore that Trump’s enforcement-heavy approach can extend to anyone, as long as it benefits America.

The tone was constructive, but the same core disputes from Geneva and London – access to technology, continued access to critical minerals and magnets, industrial policy and non-market practices, as well as geopolitical alignments – remained, with elements of any potential “deal” intentionally reserved for a future leaders’ summit.

Stockholm confirmed both the durability and the limits of the Geneva mechanism, but as Winston Churchill reminded us, “jaw-jaw is better than war-war.”

The status of US-China relations is best understood not as a “new cold war”, but as a prolonged but manageable process of competition, de-risking and stabilisation. Under Trump and Chinese President Xi Jinping, the two powers are not frozen in ideological hostility, but locked in a technological race alongside an economic rebalancing: China to consume more, the United States to manufacture more.

Both have concluded that full decoupling is neither feasible nor desirable, but selective separation to reduce vulnerabilities is inevitable and has been under way for a number of years.

Within that frame, the trade imbalance is the most visible and politically charged front. Washington continues to press Beijing to increase purchases of American goods – from energy to aircraft to agricultural products – as part of an effort to narrow the deficit.

While China has met some targets, US exports to China are down 28 per cent year-on-year even as China’s global exports are up 6 per cent, leaving Washington impatient for a more durable adjustment. However, from Beijing’s viewpoint, tariffs on Chinese goods remain a political and economic obstacle.

Running parallel is the fusion of export controls and the broader technology race. US restrictions on advanced semiconductors, artificial intelligence (AI) chips and related equipment are designed to keep China from reaching the frontier, while Beijing’s countermeasures over rare earths and other critical minerals test the resilience of the supply chains of the US and its allies.

From quantum computing to commercial AI models, both sides see technological leadership as a decisive measure of national strength. The fate of TikTok – under intensified US scrutiny and the threat of forced divestment – has become a potent symbol, linking questions of data governance and national security to political calendars in both capitals. In Washington, the issue plays into election-year rhetoric; in Beijing, it feeds narratives of US containment.

Market access is seen as asymmetrical. China’s openings to foreign firms are real but calibrated, stopping short of systemic reforms that would loosen Communist Party control – a limitation that deepens mistrust in Washington.

Industrial policy adds further strain: the US sees comprehensive and overdosed Chinese government subsidies and interventions in electric vehicles (EVs), solar and other strategic sectors as distorting global markets, leading to unfair trade, while Beijing views them as essential for jobs, growth and upgrading.

Crucially, Beijing’s recent efforts to curb excessive competition through production caps and consolidation need to be seen as self-initiated, not concessions to external pressure.

On the US side, industrial policies and government interventions are increasingly frequently used. Reshoring manufacturing has also become a political imperative, with hundreds of billions in new industrial investment announced in recent months by firms like AstraZeneca and Apple. And more will come.

Yet competition, de-risking and rebalancing should be seen not as problems to solve, but as conditions to manage. Neither side can secure everything it seeks, and conflict is not inevitable. Policymakers must remain grounded in the conviction that war would be far costlier than peace and cooperation built on enlightened self-interest.

There are seldom-mentioned moments that underscore this point. In 2021, the US helped address a safety issue at a nuclear reactor in China, providing technical support that avoided escalation and protected public safety.

In 2014, US and Chinese military medical teams deployed together to West Africa to fight Ebola, showing that health security can override strategic rivalry. Even in quieter domains, cooperation prevails: Chinese-led research on folic acid informed US prenatal health policy, helping to cut neural tube defects by about 35 per cent in the US.

These examples do not erase mistrust, but they remind both sides that dialogue channels – however fragile – are essential if tactical pauses are to evolve into strategic stability. As Denis Simon told the Post in his Open Questions interview, trade de-escalation could create space for mutually beneficial cooperation.

The biggest impediment remains the lack of trust – yet trust can be overrated. As the saying goes, you don’t have to like someone to do business with them. The key here is to move beyond suspicion towards enlightened mutual self-interest.

Moving beyond suspicion is not the same as building trust, but small, mutually beneficial steps – anchored in personal relationships and extending into much-needed domains like cancer research or fentanyl control – can help turn pauses into something more enduring.

Trump’s remarks to CNBC on August 5 suggest a summit with Xi before year’s end is possible – but only if it can be framed as a “deal” he can claim as a win.

The possibilities for a potential summit could lie between Asean (the Association of Southeast Asian Nations) and Apec (the Asia-Pacific Economic Cooperation forum). It could be hosted in Kuala Lumpur, Singapore, Beijing, Seoul or anywhere else.

As I said in February, Trump’s statecraft often resembles a reality show with one overarching storyline: Trump wins. Such a meeting would be political theatre, delivering short-lived momentum rather than durable trust. As mentioned, in this relationship, trust is overrated; the real value lies in the temporary political space it creates.

That space matters. Both economies are in the midst of de-risking, rebalancing and competing. The task is to manage this process; maximising benefits where possible, minimising downsides where necessary, and avoiding shocks to the global order or undue harm to their own citizens and others.

A summit would not resolve structural disputes, but it could stabilise the process by creating breathing room for selective cooperation in shared areas of interest, from life sciences and public health to AI safety.

It would not alter the reality that competition over chips, EVs and critical minerals will remain fierce, market access will stay asymmetric and mistrust will persist. But it could keep communication open and prevent tactical pauses from collapsing into renewed escalation.

A more stable US-China relationship would also serve Trump’s domestic economic agenda. Recent data from the US shows moderating but resilient growth, persistent inflationary pressures in some sectors and a manufacturing rebound still reliant on imported inputs.

Calming tensions with Beijing could ease supply chain frictions, lower input costs and give the Federal Reserve more room to calibrate policy without choking growth. It could also lift business confidence, encouraging the capital investment Trump champions in his reshoring push.

Even modest trade facilitation or targeted tariff relief would give US exporters – from agriculture to advanced manufacturing – a competitive boost in China at a time when export volumes are under pressure.

Tangible gains in farm income, manufacturing output and job creation ahead of the 2026 midterms would translate into a political dividend, making stabilisation with China not only geopolitically useful but electorally pragmatic for Trump at this stage, which of course could change, given the volatile nature of politics.

Washington’s latest recalibration of AI export controls shifts the posture from outright denial to selective engagement.

By allowing Nvidia’s “China-compliant” H20 chips back into the Chinese market, the aim was less to offer a technological concession than to preserve a measure of influence. As CCA senior fellow Paul Triolo frames it, this is “licensed slippage”: holding China just short of the frontier while keeping its developers anchored to US-led software ecosystems, where American firms still retain a decisive advantage.

Beijing’s latest guidance discouraging the use of H20 chips in sensitive sectors underscores how this dynamic has shifted. The guidance serves multiple purposes – signalling to domestic audiences that China will not build critical systems on technology subject to foreign control, creating space for local semiconductor champions to scale and pre-emptively insulating state-linked entities from future US restrictions.

The partial reopening offers both respite and incentive – leading platforms to maximise what remains of US access while steadily cultivating a more self-reliant ecosystem. Huawei Technologies remains an important player, but not the only one. Cambricon, Biren, Enflame and Hygon are all winning orders, with some engineers openly preferring their products.

Over time, if giants such as [South China Morning Post owner] Alibaba, Tencent and ByteDance commit at scale to these domestic vendors, the resulting feedback loop could entrench a self-sufficient Chinese AI ecosystem – an outcome that now appears increasingly likely regardless of US policy. For Beijing, technology is increasingly seen not just as an economic asset, but as a core arena of strategic contestation.

The broader supply chain architecture now resembles three interwoven lanes: high-end products that remain firmly restricted; licensed, mid-tier technology that can be dialled up or down; and a permanent grey zone of offshore procurement that resists neat control. Around these lanes, both sides are building parallel networks for manufacturing, talent and critical resources.

In such a climate, even the personnel arrangements of multinational companies have become a battleground, as seen in Trump’s attack on Intel’s CEO over ties to China, turning business decisions into geopolitical events. Under Trump 2.0, however, almost everything appears open to deal-making.

Ultimately, the H20 episode highlights the limits of Washington’s calibrated approach. It buys time to keep Chinese developers orbiting [Nvidia’s CUDA toolkit] rather than consolidating around a Huawei-led ecosystem, but it probably cannot halt China’s AI momentum.

It’s hard to miss the competitive undertone. Washington’s recent tariff hikes – paired with market-opening deals in Vietnam, Indonesia and the Philippines – are aimed at diversifying away from Chinese manufacturing dominance.

For the US, this is about tightening supply chain security, stemming transshipments and drawing partners closer into its commercial orbit. For Asean, the calculus is more complex: these agreements can mean both market access and new compliance burdens, and few want to be cast as pawns in a binary rivalry.

Beijing’s answer has been to make its neighbours a top-tier foreign policy priority. At April’s Central Conference on Work Related to Neighbouring Countries – attended by the entire Politburo Standing Committee – Xi put “neighbour-first” diplomacy front and centre.

Since then, Beijing has accelerated a package of tools: upgrading the China-Asean Free Trade Area, expanding rail and port connectivity, easing visa rules and anchoring deals in long-term frameworks that promise stability.

Vietnam, under heavy US tariffs on electronics, textiles and Chinese-linked solar products, is doubling down on a dual strategy – hedging between US price advantages and Chinese supply chain integration. Beijing is betting that deepened upstream manufacturing links and rail connections will bind Vietnam more tightly into its logistics network, without overstepping on politically sensitive fronts like the South China Sea.

Indonesia, which recently celebrated 75 years of diplomatic ties with China, is emerging as a prime “in-region substitution” hub. US trade concessions on critical minerals may boost American firms, but Chinese investment in EV batteries, photovoltaic production and downstream manufacturing gives Jakarta an alternative path that aligns with its industrial ambitions and resource strengths.

The Philippines is trickier. Tariff relief from the US matters to its electronics and textiles sectors, but South China Sea tensions limit Beijing’s scope for sweeping economic gestures. Instead, China’s approach there is to prevent strategic friction from cascading into broader Asean dynamics, relying more on multilateral channels than bilateral breakthroughs.

In the midterm, Washington’s tariff and trade manoeuvres may divert some production, but the effect is more dispersal than wholesale decoupling. Beijing’s strategy remains focused on cushioning tariff shocks, securing trade preferences and diversifying export pathways to avoid over-reliance on any single market.

Meanwhile, Asean’s challenge is to navigate openings from both powers while safeguarding its strategic autonomy, an active stance most vividly illustrated by Malaysia’s recent diplomatic activism.

I led a delegation to Brussels, Paris and other capitals in Europe in early July for about a week, after time in Beijing. About the summit, it would be fair to say that strategic logic pointed to a handshake, but the summit delivered a shrug.

The meeting met the low expectations set in advance: a regular exchange between Xi and EU leaders that produced limited forward movement. China did not shift its positions on the issues Europe sought to advance, from Ukraine to trade, while Europe continued to press on market access and industrial overcapacity.

European Commission President Ursula von der Leyen described the relationship as being at an “inflection point”, while Xi responded that “most of Europe’s problems are not China’s problems”. Neither side appeared ready for deeper dialogue, constrained by multiple geopolitical crises and the uncertainties of US-China and EU-US dynamics. Honestly, the absence of movement is striking, given each side’s strategic interests.

In the short term, China is unlikely to undertake meaningful recalibration. The meeting between Trump and von der Leyen in Scotland drew criticism within Europe as conceding to US terms, although its implementation faces resistance from several member states and possibly the European Parliament.

From Beijing’s perspective, the takeaway was clear: the EU remains broadly aligned with Washington – unsurprising considering the Ukraine war and ongoing Russian threats. China’s strategic priority continues to be the US, with Europe a secondary focus. Unless Brussels produces deeper and more coordinated cooperation with Washington than expected, Beijing is likely to maintain a preference for bilateral engagement with Paris, Berlin, and select eastern and southern European states over EU-level diplomacy.

And the EU has already developed a trade defence toolkit – investment screening, anti-subsidy investigations and anti-coercion instruments – though many have not yet been utilised. The question is when and how assertively they will be applied. Frustration within EU institutions is growing over what is perceived as China’s lack of concrete follow-through in the relationship.

At the same time, there is scope for a more balanced approach: to remain open to Chinese investment but with firm principles and the right conditions. China has a strong interest in expanding its presence in the EU market, while member states such as France see potential benefits in Chinese technological know-how and job creation.

The EU could leverage this interest by placing stricter criteria on joint ventures – for example, stipulating minority ownership for Chinese firms, requiring higher local job creation targets, particularly in strategic sectors like EVs, and ensuring certain technology and skills transfers.

Targeted engagement with individual Chinese companies could have further entrepreneurial drivers for investment, especially in sectors where Chinese innovations could be mutually beneficial. Under such a framework, long-term commercial ties would be more selective and risk-managed, with investment flowing into areas that align with both sides' strategic and economic priorities.

When strategic necessity meets misunderstanding and mistrust, the result is often stasis. Yet fragmentation within both Europe and China leaves space for selective cooperation – particularly in climate technology, energy transition, health sciences and advanced manufacturing, where supply chains and standards still partially align.

Europe’s approach to China is increasingly two-tiered. Some states continue to deepen economic ties, especially in EVs, batteries and infrastructure.

Chinese EV investment models that combine capital with local production and job creation have gained traction in Hungary and Spain, where governments prioritise economic growth over geopolitical risk. In 2023, roughly 8 to 10 per cent of China’s EV exports to the continent were destined for Central and Eastern Europe (adjusted for re-exports via Germany), with Hungary emerging as the primary production and logistics base.

Norway, outside the EU and exempt from tariffs, has become a key entry point for Chinese EVs, which now account for roughly 10 per cent of new car sales – double their 2023 share, according to Norway’s Road Federation. Belgium plays a similar role as the EU’s main transit hub, with the Port of Antwerp handling about 40 per cent of EU-bound Chinese EV shipments.

By contrast, core EU economies – Germany, France and the Netherlands – are aligning more closely with the US in strategic sectors such as semiconductors and defence, even as they maintain industrial dependencies on China in areas like cars and chemicals. This divergence points toward a selective, risk-managed partnership rather than a comprehensive one, with structural decoupling still unlikely.

Over the next three years, this duality is likely to deepen. Cooperation will persist in non-sensitive sectors, while protectionism tightens around critical technologies and supply chains.

China’s economy is grappling with three headline challenges – weak demand, fragile confidence and excessive low-quality competition. Beneath them lie two deeper structural constraints.

The first is a misaligned – and often contradictory – incentive structure among the three key players: local officials, private entrepreneurs and international investors. Local officials are promoted for balancing economic growth, social stability and political compliance, yet on the growth front their performance metrics do not clearly reward boosting household consumption or revitalising the private sector.

Entrepreneurs weigh Beijing’s pro-business overtures against the lingering shadow of past regulatory crackdowns and the fiscal pressures driving local governments to extract resources from private firms – at times stretching legal boundaries and resorting to coercive or even extortionary tactics, which suppress the entrepreneurial spirit needed for economic growth and technological breakthroughs in China. Foreign investors read reformist signals from the centre, but remain wary of a regulatory environment that can shift without too much warning.

Across all three, incentives frequently pull in opposing directions – market-opening pledges collide with local fiscal imperatives; pro-growth rhetoric competes with risk-averse political oversight – creating contradictions that erode policy coherence and market confidence, resulting in weak demand and often unnecessary low-quality competition.

The second is the now chronic fiscal stress of local governments, tied to the difficult transition from an investment-led to a consumption-led growth model. By mid-late 2023, outstanding local debt stood at roughly 40 trillion yuan (US$5.63 trillion), but total liabilities could swell to 90 trillion to 110 trillion yuan or more when “hidden” debt is included – approaching, or even exceeding, 90 per cent of GDP by the estimates of cautious economists, and in certain provinces, debt servicing now consumes more than 100 per cent of monthly fiscal revenues.

China’s fiscal architecture – designed for an investment-heavy economy – relies on land sales and construction-related taxes. Household consumption, smaller in GDP share and lightly taxed, contributes little. Moving toward a consumption-led model risks shrinking these revenues before new tax bases emerge, creating a short-term crunch that discourages deep rebalancing.

Since late 2024, Beijing has stepped up its efforts in this regard: the October Politburo meeting signalled a shift toward growth stabilisation; the year-end Central Economic Work Conference put domestic demand at the top of the 2025 agenda; February’s round table with private entrepreneurs and March’s forum with international investors reinforced pro-business messaging.

Concrete measures include trade-in subsidies for cars and appliances, childcare support packages, a new set of legal protections for private entrepreneurs and pledges to give foreign firms equal treatment and broader market access.

Yet the macro impact remains modest. Many programmes are fiscally light and constrained by local capacity; monetary policy has underreacted to deflation risks. Without aligning incentives, overhauling the fiscal structure and giving all three key players clear reasons to invest and spend, these measures risk being more palliative than transformative.

There have been efforts to help firms expand overseas rather than absorbing excess capacity at home. In industries like EVs, batteries and solar, domestic margins are razor-thin due to fierce competition, and job creation is limited by automation. At the same time, ministries and industry associations are mounting a coordinated push for domestic consolidation – urging curbs on price wars, promoting mergers and channelling investment toward higher-value segments – though these efforts have yet to decisively outweigh the drive for outward expansion.

Encouraging firms to build factories abroad, transfer technology and hire locally allows them to tap more profitable markets while positioning China as a builder of global industrial ecosystems. Moves to internationalise the yuan, strengthen Hong Kong’s role as an offshore clearing hub and support overseas listings all reinforce this outward push.

But the model faces rising headwinds. The US and EU are tightening defences, from EU subsidy probes into Chinese EVs to US restrictions on supply chains. Emerging markets are also pushing back: countries such as India and Mexico have introduced tariffs and local content rules aimed at curbing Chinese dominance in strategic sectors. And the “overcapacity” debate is intensifying, with critics charging that China is exporting surplus production while Beijing insists its output is aligned with global demand.

Relying heavily on foreign markets risks leaving domestic imbalances unresolved. A more durable approach would combine capacity discipline with measures to expand domestic demand.

That means boosting household spending power through direct transfers, targeted tax relief and expanded social benefits; reducing precautionary saving by widening migrant workers’ access to public services through hukou [household registration] and social safety net reforms; and reorienting industrial policy to better match production with domestic preferences rather than export-driven excess.

It also requires aligning central and local government incentives so that officials are rewarded for sustainable consumption growth, not just investment and export performance.

China’s policy machinery excels at launching big initiatives and executing bold course changes but is less adept at fine-tuning and coordinating midcourse corrections, particularly under the current incentive structure. Without deeper fiscal reform, better-aligned incentives, and faster policy feedback loops, the balance between “going out” and “staying home” will remain incomplete – and a truly sustainable growth path will remain elusive.

When the party’s Central Committee convenes its fourth plenum in October, it will set the political direction for the 15th five-year plan – the first full blueprint of the post-pandemic decade and the midpoint test for China’s 2035 goal of becoming “basically modernised”.

The research agenda for the 15th plan provides a detailed window into Beijing’s priorities. One major stream focuses on institutional reform and improving the efficiency of domestic circulation. This includes building a unified national market, breaking down provincial and sectoral barriers, better aligning central-local fiscal relations and strengthening macroeconomic governance.

Studies are examining ways to streamline land use, deepen market-oriented reforms and create a more coordinated relationship between state-owned and private enterprises. The underlying aim is to reduce wasteful, duplicative investment, tighten discipline over local projects and direct resources toward nationally aligned priorities.

A second stream revolves around what policymakers call the “Two New” and “Two Heavy” framework.

The “Two New” refers to large-scale equipment upgrades and consumer trade-in programmes – covering industrial machinery, vehicles and home appliances – backed by ultra-long special bonds, recycling standards and financing channels.

The “Two Heavy” encompasses large-scale national strategies and security capabilities, such as high-speed rail expansion, high-standard farmland development, universities, major urban infrastructure projects, energy-efficiency retrofits and ecological restoration.

Both are underpinned by a strong focus on science, technology and security. Research topics here address global technology revolutions, industrial-chain resilience, strategic mineral supply, productivity gains, the digital economy and talent systems needed to build the country into a “science and technology power”. These are seen as the most politically reliable and administratively executable levers for growth in the near term.

A third cluster brings together green transformation, demographic transition and the rise of the big health economy. Environmental goals include meeting the 2030 carbon peak target – with non-fossil energy reaching roughly 25 per cent of total consumption – and accelerating pollution control, ecological restoration and the protection of strategic ecosystems.

On the demographic front, the agenda emphasises managing an ageing population and declining workforce through better healthcare access, stronger safety nets and reforms to the public health system.

A notable priority is developing the biotechnology and broader “big health” industries – pharmaceuticals, advanced medical equipment, precision medicine, elderly care services and wellness, among other sectors – as engines for both economic growth and social stability.

Research topics examine healthcare reform, innovation in pharmaceuticals, AI-enabled medical services, vocational training for healthcare workers and governance mechanisms to ensure equitable access.

Together, these initiatives aim to align China’s environmental and health policies with its economic strategy, positioning green growth and health security as mutually reinforcing pillars.

Several research areas directly address China’s external environment, including the trajectory of the world economy, shifts in global trade rules, changes in the international geopolitical landscape and the evolution of global governance systems. These studies underscore that the 15th plan will be shaped not only by domestic imperatives, but also by the demands of an increasingly contested international order.

Taken together, the plan’s emerging contours suggest a strategy that seeks to marry structural reform with politically safe investment channels, while keeping a tight rein on fiscal risks. The emphasis will be on growth drivers that are politically manageable, security-aligned, and backed by targeted – rather than transformative – consumption measures.

With the plan being finalised against the backdrop of intensifying US-China competition, Beijing is likely to preserve tactical policy space for the second half of 2025, adjusting stimulus and sequencing market opening in line with the evolving trajectory of US tariff policy and the shifting tides of the global economy.