• How China can help rewrite the future of Indonesian palm oil
• Trump, Nvidia talks to allow Blackwell chip sales in China will take time, CEO says
• Mexico reportedly considering higher Chinese import tariffs at US urging
• Chinese printing factories flock to US as tariffs shake up e-commerce sector
• Russian and Chinese submarines join forces in Pacific patrol first
• Trump urges banks to flag Chinese money laundering linked to fentanyl trade
• China’s leading private firms strike gold in overseas markets: survey
• Chinese AI model developers push for faster commercial adoption as training costs fall
• US-China space rivalry, Kim Jong-un to attend Beijing’s WWII parade: SCMP daily highlights
• Why world should focus on what China needs, not what it wants
• Australia-China ties: ABC resumes Beijing bureau after 5 years, Xi-Albanese talks
• Beijing says Philippines ‘courts outside powers’ and ‘causes trouble’ in South China Sea
• US report on Chinese ‘spy threat’ to universities ‘may have chilling effect’ on ties
• In Washington, China’s top trade negotiator readies for talks, but no formal negotiations
• What does SpaceX’s Starship test success mean for the US-China moon race?
• What does a mock US rocket launcher in a mainland China car park say about a Taiwan conflict?
• China races to roll out low-orbit satellite internet to rival Musk’s Starlink
• Baidu unveils AI computing platform powered by Chinese chips to push a domestic tech stack
• Why did Malaysia’s top deep-sea robotics scientist Mohd Rizal Arshad move to China?
• XtalPi’s 615% jump in drug revenue highlights China’s biotech boom after DoveTree deal
• Nvidia shares slip in after-hours trading as China market prospects remain uncertain
• Wuliangye Yibin’s profit growth sinks to 10-year low hit by China’s austerity drive
• Singapore can bring China, US together: diplomat Tommy Koh
• Chinese ‘folded boy’ goes home, stands upright after 4 operations to break, reset body
• China warns against external interference in ties with South Korea
• China’s retail stock traders ride US$1 trillion bull run, eye liquidity for more gains
• China-Philippine tensions mount at disputed Second Thomas Shoal as resupply deadline looms
• Direct India-China flights to take off again, opening door for travel boom
• Chinese envoy warns against sowing ‘fear and hostility’ as US plans visa revamp
• Former China central bank governor urges caution amid stablecoin frenzy
• Japan warns AI videos mocking wartime emperor risk further straining China ties
• Chinese man jailed for breaking into woman’s home, drawing her blood for ‘stress relief’
• 80 years on from WWII, has China become a main guarantor of the post-war order?

How China can help rewrite the future of Indonesian palm oil

https://www.scmp.com/opinion/asia-opinion/article/3323383/how-china-can-help-rewrite-future-indonesian-palm-oil?utm_source=rss_feed

Indonesian President Prabowo Subianto has launched a campaign against illegal palm oil plantations, seeking to reclaim millions of hectares of forest lost to unchecked expansion.

The authorities confirm that plantations on 3.7 million hectares are illegal, and more are under review. In Riau, the heart of Indonesia’s palm oil economy, the government has begun dismantling plantations in Tesso Nilo National Park and relocating families who have long lived within its shrinking forest boundaries.

Palm oil is often treated as a commodity, yet it is also a mirror of civilisation. Each hectare of forest cleared for palm oil erases wildlife and ecosystem services, and destroys the memory written into the land. Despite this, economic tables reduce the story to export and growth figures. Numbers present development, but behind them lies an arrangement where prosperity is bought at the expense of destruction.

Indonesia’s plantations cannot be understood in isolation from global demand. Each tree felled is linked to the appetite of markets abroad.

The nation supplies palm oil to India, China, the United States, Pakistan and Bangladesh, among others. Demand from these destinations fuels expansion. But when the European Union’s Deforestation Regulation is adopted, Indonesian suppliers, whether conglomerates or smallholders, will have to prove they are not linked to deforestation.

China sits at the centre of this unfolding story. In 2024, it absorbed around 15 per cent of Indonesia’s palm oil exports, which are mostly used for food processing and producing consumer goods. About three-quarters of China’s palm oil imports come from Indonesia, binding the two economies together. The scale of this relationship means China’s decisions carry influence far beyond commerce, shaping not only trade but also forests and futures.

Europe and the United States lead in certified sustainable palm oil imports, driven by strong regulations. This creates a divided market where sustainable imports flow mostly west. China is closing the gap by rapidly advancing its sustainability efforts and increasing certified sourcing, but true global sustainability requires broader cooperation to prevent uneven environmental impacts and destructive practices.

China’s choice carries consequences both economic and civilisational. Responsible sourcing would pressure Indonesian producers to raise standards, while reliance on cheap, unregulated oil would entrench illegality. The scale of China’s demand effectively determines the future of Indonesia’s forests. Shared responsibility and trust are the answer.

If responsibility is chosen, the first requirement is deforestation-free sourcing. This cannot be reduced to compliance paperwork. Traceability systems can support accountability, but real change comes when buyers reject the illusion of cheapness without cost. When integrity becomes essential, palm oil is transformed from a neutral commodity into a covenant. It becomes an agreement between grower and buyer.

China’s market strength makes this transformation possible. By rewarding responsible producers with long-term contracts and stable prices, it can turn sustainability into opportunity. Even small adjustments, scaled across its vast purchasing power, could shift industry behaviour.

Centuries ago, China built the Silk Road to connect civilisations. Today it has the chance to create a “Green Road”, where trade is woven not from erasure, but from justice and stewardship.

Dialogue will also matter. Indonesia worries that sustainability rules may conceal protectionist intent. Cooperation can ease this suspicion. Joint forums could harmonise standards, improve enforcement and build transparency. Such collaboration would do more than enforce compliance. It would signal a pact between two nations prepared to defend the living planet together through sustainable and responsible palm oil production.

Finance is another powerful tool. Chinese banks already fund firms in the palm oil supply chain. Redirecting these flows into sustainable projects would accelerate reform. Loans could prioritise replanting degraded land or developing traceability systems. Guarantees could reduce risks faced by smallholders. When financial resources are linked to responsibility, capital itself becomes a moral force. Investment decisions then shape not just economies but landscapes, communities and the meaning of progress.

Change must also reach households. Many Chinese consumers remain unaware of the presence of palm oil in their lives, from mooncakes to instant noodles. Surveys suggest younger buyers are open to sustainable choices. If their purchases become acts of conscious participation, daily consumption could evolve into forest stewardship. Every basket of food or soap could be a statement of shared responsibility for life.

Indonesia would gain deeply from such a transformation. Without markets that demand integrity, Prabowo’s crackdown risks losing strength. With China’s partnership, illegal plantations would lose profits while enforcement would gain power. Certified producers would thrive, rural villages would stabilise and forests would endure.

The future of palm oil would move beyond simple economics. It would mark a reconciliation between growth and guardianship, between ambition and care of the environment.

Trump, Nvidia talks to allow Blackwell chip sales in China will take time, CEO says

https://www.scmp.com/news/world/united-states-canada/article/3323558/trump-nvidia-talks-allow-blackwell-chip-sales-china-will-take-time-ceo-says?utm_source=rss_feed

Discussions with the White House to allow American AI chip company Nvidia to sell a less advanced version of its next-generation GPU chip to China will take time, Nvidia CEO Jensen Huang said on Thursday.

When asked about White House talks on Blackwell chip sales to China in a Fox Business News interview, Huang said the discussions had started.

“The conversation will take a while, but … President [Donald] Trump understands that having the world build AI on the American tech stack helps America win the AI race.”

Earlier this month, Trump suggested he might allow Nvidia to sell a scaled-down version of the chip in China, noting that it would be 30 to 50 per cent less capable than the regular version.

That comes despite deep-seated fears in Washington that China could harness US artificial intelligence capabilities to supercharge its military.

China hawks fear allowing even stripped-down Blackwell chip sales to China could open the door to Beijing securing more advanced computing power from the US, even as the two countries battle for technology supremacy.

Reuters in May reported that Nvidia was preparing a new chip for China that was a variant of its most recent state-of-the-art AI Blackwell chips at a significantly lower cost.

Mexico reportedly considering higher Chinese import tariffs at US urging

https://www.scmp.com/news/us/diplomacy/article/3323554/mexico-reportedly-considering-higher-chinese-import-tariffs-us-urging?utm_source=rss_feed

Mexico is preparing to raise tariffs on Chinese imports of automobiles, textiles and plastics, Bloomberg News reported on Thursday, under a proposal expected to be part of the 2026 budget to be submitted to the nation’s Congress next month.

If confirmed, the increase would mark one of Mexico’s sharpest trade shifts in recent years. Officials in Washington have urged the move as part of US President Donald Trump’s push to build a “Fortress North America” and reduce dependence on Chinese supply chains.

Trump has been a long-time critic of what he calls trade “loopholes” in the US-Mexico-Canada Agreement allowing Chinese goods to enter the US. During his election campaign last year, he railed against Chinese carmakers building plants in Mexico to export cars to the US.

“They’re building … numerous of the biggest auto plants in the world right now,” he said, “right near the border in Mexico, owned by China.”

“I told them, ‘If you do that, we’re going to put tariffs on at 200, 250 per cent. You’re never going to sell one car in this country,’” he said.

Mexico’s imports from China exceeded US$51 billion last year, accounting for nearly one-fifth of the country’s total purchases abroad.

The rapid growth has turned Mexico into China’s top overseas market for vehicles, but has also left local manufacturers complaining of unfair competition from subsidised goods.

The planned tariffs could also be extended to other Asian nations, although China remains the main focus.

The proposal as reported by Bloomberg, which cited three people familiar with the matter, would build on a string of measures already aimed at curbing Chinese e-commerce.

Since January, the government has imposed a 19 per cent levy on low-value parcels from platforms such as Shein and Temu. In July, the tax was lifted to 33.5 per cent, closing what authorities described as loopholes in customs reporting and responding to US concerns over cheap imports flooding the North American market.

Officials close to the process told the news agency that the new tariffs are being folded into “Plan Mexico”, a wider strategy to expand industrial estates and channel public investment into manufacturing.

The government has also sought to boost revenue as it grapples with a budget deficit that reached 5.9 per cent of gross domestic product in 2024, the highest in over three decades.

The details of the tariff rates have not been finalised and figures could change before the budget package is delivered. The Mexican government did not immediately respond to a request for comment from The Post.

China’s Foreign Ministry criticised the plan at a briefing in Beijing on Thursday. Spokesman Guo Jiakun said China “firmly opposes moves that are taken under coercion to constrain China or undermine China’s legitimate rights and interests under any pretext”.

Guo added that Beijing believes Mexico will “uphold independence and properly handle relevant matters”.

“China always advocates a universally beneficial and inclusive economic globalisation, and opposes unilateralism, protectionism and discriminatory and exclusive measures in any form,” Guo said.

The budget proposal is due before Mexico’s Congress on September 8. Lawmakers are expected to debate the package through the autumn, as industries and consumers wait to see how far Mexico goes in reshaping its trade relationship with China.

Chinese printing factories flock to US as tariffs shake up e-commerce sector

https://www.scmp.com/economy/china-economy/article/3323513/chinese-printing-factories-flock-us-tariffs-shake-e-commerce-sector?utm_source=rss_feed

In late 2023, Kent Liu finally decided to take a leap of faith: it was time to move his customised printing business from China to the United States.

Liu felt he needed to make a change. For years, his company had made money by printing T-shirts, hats and other apparel in China for a range of clients, which were then shipped to the United States.

But that model was increasingly under threat. In 2018, America raised tariffs on Chinese goods, and tensions between the two powers had continued to rise over the following five years.

“If I don’t go,” Liu recalled thinking at the time, “I might fall behind the times.”

Liu’s instinct proved to be correct. Just a year after he founded his new business, Digiprint America, US President Donald Trump returned to office and launched a fresh tariff blitz targeting China and a host of other major export hubs.

The new production lines in California and New Jersey were insulated from the crippling new import duties, helping Liu’s business ride out the trade war. His orders remain strong and he is even planning to open an extra facility in Atlanta.

Many other Chinese print-on-demand businesses are now racing to localise production in America, as Trump’s tariff war drives a major reconfiguration of the global e-commerce supply chain.

China’s printing companies play a vital role in the apparel industry. They not only produce novelty items – such as Trump’s “Make America Great Again” caps – for American clients; they also help Chinese fast-fashion platforms like Shein and Temu churn out new styles in response to rapidly changing online trends.

Until recently, these items were often printed in China and sent to the United States in small batches. Sourcing from China cheaply was still possible thanks to the de minimis policy, which exempted low-value packages from US tariffs. In 2023, more than 1 billion parcels entered the US under de minimis rules.

But the Trump administration eliminated the tax exemption earlier this year, meaning any parcels entering the US from China now face steep levies and longer customs checks. The change threatens to upend the fashion supply chain, as companies rapidly move to reduce their China exposure.

Chinese manufacturers are responding by setting up print-on-demand production lines in America and shifting to a new model: importing cheap blank apparel from China and Southeast Asia, printing them in the US, and then quickly shipping the finished goods to their local clients.

The change not only helps the firms reduce their tariff burden, but also to speed up delivery times. More than 200 Chinese companies have opened printing facilities in the US in just the past two years, industry insiders estimated.

Indeed, the influx of Chinese printing factories has been so large that it has triggered an industry price war, according to Liu.

“Initially, each garment had a gross profit margin of US$2 or US$3, but now it’s less than 50 cents,” he said.

But Sofia Chen, a business owner from Shenzhen who set up a small print-on-demand factory in the US in early 2025, said the localisation trend was likely to continue, as companies could still make reasonable profits.

“More factory owners from Fujian and Zhejiang provinces are eager to apply for [US] visas, waiting to come over,” she said.

Chinese printing businesses appear to be confident about their prospects in America. Despite the US’ recent economic slowdown, the S&P Global US Manufacturing Purchasing Managers’ Index rose to 53.3 in August – its highest level since May 2022 – signalling renewed growth in the American manufacturing sector.

“More importantly, clients pay within 15 days in the US, while Chinese suppliers can extend terms up to 120 days,” Chen said. “This cashflow gap allows small factories to catch their breath and even gives them a chance to send back support to their production bases in China.”

The print-on-demand market, meanwhile, is rapidly expanding as fashion trends change ever more quickly and consumer demand for customised goods continues to rise.

The global on-demand fashion market is projected to grow from US$9.8 billion in 2024 to more than US$35 billion by 2033, according to a report by India-based market research firm DataIntelo.

Chinese printing factories in the US not only serve Chinese e-commerce platforms like Shein and Temu, but are also capturing more business from smaller American vendors serving communities across America, said Xu Yanlin, a senior consultant advising Chinese firms on their e-commerce strategies in the US.

That is also what Liu is trying to do. He still works with platforms such as Shein and Temu, but aims to expand his local client base, as they tend to offer better terms. The Atlanta facility will help him better serve those customers by reducing his shipping costs and speeding up deliveries, he said.

To stay ahead of the game, Liu is also investing 20 million yuan (US$2.8 million) to upgrade his production lines. As his business gains traction, his goals have become increasingly ambitious.

“At first, I just wanted US$1 million cashflow annually for the investment in the US,” Liu said. “Now, with Atlanta operational, our sales might reach US$150 million yearly.”

Though profit margins are slender, the business is able to maintain a stable cashflow as demand for print-on-demand items in the US market has risen to more than 500,000 units per day, Liu said. Even better, he no longer faces an existential threat from potential US tariff hikes.

“Now I focus on intellectual property, compliance systems, and local supply chain integration – these are the core competencies for long-term production here,” he said.

Russian and Chinese submarines join forces in Pacific patrol first

https://www.scmp.com/news/china/military/article/3323527/russian-and-chinese-submarines-join-forces-pacific-patrol-first?utm_source=rss_feed

Russian and Chinese submarines have conducted their first joint patrol in the Pacific, the latest in a series of efforts to expand military cooperation between the two countries.

The Russian Navy’s Pacific Fleet said on Wednesday that the patrol began in early August after five days of joint naval exercises in the Sea of Japan – also known as the East Sea – from August 1.

“The diesel-electric submarine Volkhov of the Pacific Fleet and a submarine of the Chinese People’s Liberation Army Navy took to patrolling along an approved route in the Sea of Japan and the East China Sea,” the statement said.

It was not clear if the submarines were part of a 15-day annual joint naval patrol that ended on August 20.

The patrols and the “Maritime Interaction-2025” drill come in the countdown to a massive military parade in Beijing next week to commemorate the 80th anniversary of the end of the second world war.

The Chinese foreign ministry confirmed on Thursday that Russian President Vladimir Putin would be among dozens of foreign leaders to attend the event.

The United States has the world’s biggest fleet of nuclear-powered submarines but Russia and China have been working together to coordinate their strengths in the area.

The Pacific Fleet said that after its mission, which covered 2,000 nautical miles, the Volkhov returned to the naval base in the Russian city of Vladivostok.

The PLA Navy did not mention the submarine patrol, but it did say that the joint naval drill took place earlier this month in the sea and airspace near Vladivostok, and involved submarine rescue tasks.

The theme of the drill was “jointly safeguarding strategic maritime routes” and “jointly countering security threats in the western Pacific”, the PLA Navy said.

During the drills, the Russian and Chinese navies fired artillery and practised anti-submarine and air defence manoeuvres in the Sea of Japan.

“After the exercise, the participating Chinese naval vessels – the missile destroyer Shaoxing and the replenishment ship Qiandaohu – together with the Russian Navy’s three surface vessels including the large anti-submarine ship Admiral Tributs and two shipborne helicopters formed a joint formation to conduct a maritime joint patrol in an area of the western Pacific,” Chinese state news agency Xinhua reported.

Russian and Chinese media reported that diesel-electric submarines from the two countries were also involved in the joint exercise.

Retired Chinese naval officer Wang Yunfei told Chinese state-owned newspaper Global Times that the involvement of submarines in the exercises highlighted the deepening of Sino-Russian military ties since a great deal of submarine data, such as noise characteristics, was supposed to be classified.

The 15-day patrol is the fifth in an annual naval series that began in 2021 with a Russian-Chinese mission in the Asia-Pacific.

Russian state news agency Tass said the main goal of the joint effort was to strengthen naval cooperation between the two countries, ensure peace and stability in the Asia-Pacific region, monitor the maritime area and protect Russian and Chinese maritime economic facilities.

Russia and China have been steadily strengthening their “no limits” strategic partnership since its declaration in early 2022.

In late 2024, on a patrol with its Russian counterpart, a China Coast Guard fleet entered the Arctic Sea for the first time, pointing to China’s evolving strategic ambitions in the polar regions. Joint strategic aerial patrols have also covered large parts of the Pacific Ocean.

Trump urges banks to flag Chinese money laundering linked to fentanyl trade

https://www.scmp.com/news/world/united-states-canada/article/3323545/trump-urges-banks-flag-chinese-money-laundering-linked-fentanyl-trade?utm_source=rss_feed

The Treasury Department wants US financial institutions to monitor for suspected Chinese money laundering networks handling funds that are used to fuel the flood of fentanyl across American communities.

The advisory released on Thursday highlights how these money laundering operations are working with Mexican drug cartels to fuel the flood of fentanyl across American communities.

The Trump administration is calling on banks to flag certain customers who may fit a profile of people who could launder money for cartels. That could include Chinese nationals such as students, retirees and housewives with unexplained wealth, and those who refuse to provide information about the source of their money.

The Treasury contends that many of these people unknowingly work with cartels to bypass Chinese currency controls that restrict the renminbi exchange rate through a system limiting the annual foreign currency conversion for individuals, which is about US$50,000.

It is not uncommon for Chinese individuals to evade such restrictions by turning to underground banks, where their money is converted into foreign currencies, often US dollars.

The Chinese Embassy in Washington had no immediate comment on Thursday.

Also on Thursday, the department’s Financial Crimes Enforcement Network, known as FinCen, released a report about how Chinese money laundering networks are expanding their ties beyond drug cartels. Financial institutions are increasingly filing suspicious activity reports on human trafficking and adult senior day care centres in New York that have become a vehicle for money laundering, according to the report.

FinCen analysed more than 137,000 Bank Secrecy Act reports from January 2020 to December 2024 that accounted for around US$312 billion in total suspicious activity.

Last year, law enforcement officials uncovered a complex partnership between Mexico’s Sinaloa Cartel and Chinese underground banking groups in the United States that laundered US$50 million from the sale of fentanyl, cocaine and other drugs, federal prosecutors said.

The government’s instruction to banks to be more vigilant about Chinese students and other Chinese nationals comes as Republican President Donald Trump says he will allow 600,000 Chinese students into American universities.

“I hear so many stories about ‘We are not going to allow their students’, but we are going to allow their students to come in. We are going to allow it. It’s very important – 600,000 students,” Trump said during a meeting with South Korean President Lee Jae-myung in the Oval Office on Monday.

China’s leading private firms strike gold in overseas markets: survey

https://www.scmp.com/economy/china-economy/article/3323515/chinas-leading-private-firms-strike-gold-overseas-markets-survey?utm_source=rss_feed

While many of China’s companies suffered last year amid soft domestic demand and an uncertain environment for international trade, the country’s leading private enterprises reported a double-digit increase in their overseas revenue according to a recent survey.

As ranked by the All-China Federation of Industry and Commerce – a state-adjacent chamber of commerce that functions as a channel between government and private business – the country’s 500 largest private firms generated a combined overseas revenue of 3.19 trillion yuan (US$445.8 billion) last year, up nearly 15 per cent from 2023.

The federation revealed the figure on Thursday in its 2025 edition of the Top 500 Private Enterprises, an annual list based on total revenue.

The top three firms on the list remained the same, with e-commerce giants JD.com and Alibaba followed by industrial conglomerate Hengli Group. The top 10, including telecommunications giant Huawei Technologies, electric vehicle maker BYD and tech leader Tencent, saw minor shifts. Alibaba owns the South China Morning Post.

“Facing heightened external pressures and increasing internal challenges...the top 500 private firms have maintained an overall trend of steady progress, with improvements in quality, profitability and core competitiveness,” the federation noted in its report.

The assessment came amid an improved policy environment for the private sector, where, according to official data, 55 million firms contribute over half of China’s total tax revenue, 60 per cent of its gross domestic product and 80 per cent of urban jobs.

Supporting private firms has become a priority for Beijing, as the world’s second-largest economy seeks new growth drivers and looks to reverse a drop in business confidence.

The survey showed that overseas revenue was the primary source of income for the top 500 firms. Their assets abroad totalled 2.44 trillion yuan by the end of last year, up more than 8 per cent.

The federation’s survey, its 27th of large-scale private enterprises, features a revenue threshold for entry, with 27.02 billion yuan as the minimum for 2024.

The top 500 firms reported average revenue of 86 billion yuan, up 2.72 per cent from the previous year but a slower pace of growth compared to 2023. Of the surveyed group, 361 firms – 72 per cent – saw revenue increases, also slightly down from 2023.

However, their profitability is growing, with average net profit rising by over 6 per cent to 3.6 billion yuan, compared to a growth rate of about 4 per cent in 2023.

Innovation is also on the rise, with average research and development (R&D) spending intensity at 2.77 per cent, surpassing the 2.7 per cent recorded for members of the Organisation for Economic Co-operation and Development (OECD) and China’s overall rate of 2.68 per cent.

The figure is a measure of domestic expenditure on R&D expressed as a percentage of GDP. In OECD countries, this metric has held at 2.7 per cent since 2020, the bloc’s forum said in a report in March.

Chinese AI model developers push for faster commercial adoption as training costs fall

https://www.scmp.com/tech/tech-trends/article/3323533/chinese-ai-model-developers-push-faster-commercial-adoption-training-costs-fall?utm_source=rss_feed

Open-source artificial intelligence (AI) models from China are seeing increased adoption across various industries, according to research firm Frost & Sullivan, as major developers step up the commercial application of their systems.

Developers such as DeepSeek, Alibaba Group Holding and Baidu have shifted from pushing their models’ “extreme performance” towards prioritising usability, cost efficiency and broad ecosystem support to accelerate industry adoption, according to Neil Wang, global partner and Greater China chairman at Frost & Sullivan, in an interview with the South China Morning Post on Thursday. Alibaba owns the Post.

According to Frost & Sullivan’s latest report on China’s AI market released on Thursday, the nation has made quick progress in getting more industries to adopt the relevant AI applications.

“AI applications are evolving from general capabilities to scenario-specific deployment,” the report said. It pointed out that the country’s finance, government, telecommunications and healthcare sectors have each achieved an average AI penetration rate in excess of 60 per cent.

The government sector saw the highest adoption rate of 95 per cent, followed by finance with a 78 per cent rate.

The trend has emerged amid a substantial decline of model training costs, which has lowered the barrier to entry for pursuing AI projects, according to Wang. Training costs have seen a 90 per cent drop this year when compared with 2024, he added.

His assessment reflected how Chinese AI companies have been narrowing the gap with their US peers through an open-source approach, which makes the source code of AI models available for third-party developers to use, modify and distribute.

Open-source models from start-ups like DeepSeek and MoonshotAI, along with those from Big Tech firms led by Alibaba AI unit Alibaba Cloud and Baidu, have seen increased adoption across various industries on the back of their low-cost appeal and innovative features.

Lower training costs enabled DeepSeek, for example, to sharpen its focus on delivering “manageable costs, adequate quality and a more user-friendly toolchain”, instead of just targeting greater AI benchmark scores than the competition, Wang said.

He pointed out that DeepSeek’s V3.1 model has a “more flexible hybrid reasoning mode”, which enables the system to automatically switch between “deep thinking” and “fast response” modes based on the complexity of the task.

China’s vast market in industrial AI application marks “a clear advantage” over the US, as domestic AI firms are “extremely fast at trial and error and technology iteration”, which opens up opportunities for swift commercial adoption, Wang said.

Still, he said bottlenecks exist in the mainland’s AI model segment, as many developers continue to rely heavily on foreign technology providers for “foundational development software”, such as AI frameworks and compilers.

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US-China space rivalry, Kim Jong-un to attend Beijing’s WWII parade: SCMP daily highlights

https://www.scmp.com/news/china/article/3323525/us-china-space-rivalry-kim-jong-un-attend-beijings-wwii-parade-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 .

The first successful flight for Starship – the biggest and heaviest rocket ever built – has revived US hopes of beating China in the race back to the moon, but experts warned the breakthrough may not be enough to stop Beijing from building the first lunar base.

Former Chinese central bank governor Zhou Xiaochuan has urged a more measured tone amid a global surge of interest in stablecoins, calling for a “multidimensional assessment” of their genuine utility and the systemic risks they may pose.

North Korean leader Kim Jong-un will travel to China to attend next week’s military parade marking the 80th anniversary of the end of World War II, Beijing said on Thursday.

Third parties should not interfere with – and were not a factor in – the relationship between China and South Korea, Beijing said on Wednesday following suggestions that Seoul would not act counter to Washington’s policy.

Experts say the country’s wartime sacrifice makes it a steward, not a disruptor, of the international system.

Tensions are rising again at the disputed Second Thomas Shoal following a surge in activity from Chinese and Philippine vessels at a critical time for resupplying troops stationed on a stranded warship.

Mock-ups of Himars rocket launchers – which Taiwan has ordered from the US – have been spotted in a car park in mainland China, suggesting a PLA simulation of a cross-strait conflict.

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Why world should focus on what China needs, not what it wants

https://www.scmp.com/opinion/china-opinion/article/3323357/why-world-should-focus-what-china-needs-not-what-it-wants?utm_source=rss_feed

China’s most recent national security white paper opens with a striking hierarchy, putting people’s security first, political security second and economic security third. That ordering is deliberate.

For years, Western observers have asked what China wants. Does Beijing aim to dominate Asia, displace the United States or rewrite the international order? Entire books and essays have been devoted to the question. However, the more revealing question is different: what does China need?

Wants are preferences. Needs are constraints. If needs are unmet, they threaten the Communist Party’s legitimacy. Diplomacy is always a two-level game: leaders negotiate abroad but must deliver stability at home. In democracies, that means persuading voters; in China, it means sustaining growth, food and energy security and social order.

Seen through this lens, China’s actions abroad look less like unbounded ambition and more like risk management for regime survival. Recognising this logic does not excuse coercion, but it does highlight where China is most vulnerable and where policy leverage lies.

For four decades, economic growth has been the party’s social contract. President Xi Jinping has rebranded it as the “Chinese dream” and the “dual circulation” strategy, stressing resilience at home while diversifying abroad. Even so, economic growth is slowing. Export controls on semiconductors are seen not as routine competition but as existential threats. That explains Beijing’s push for indigenous innovation and reduced dependence on the West.

Energy reliance deepens the pressure, with China importing about 70 per cent of its oil. A supply shock could choke growth and legitimacy with it. Hence the hedges such as pipelines from Russia and Myanmar, long-term natural gas deals with Qatar and vast investments in renewable energy. To outsiders, these might look mercantilist. To Beijing, they are life insurance.

Food security is etched into the national psyche. Mao-era famines scarred a generation, and China today holds to a “red line” of grain self-sufficiency. Price supports, stockpiles and agricultural technology might distort markets, but they bolster party legitimacy.

Water scarcity could be even more existential. Chronic shortages in the north threaten farming and industry. The South-North Water Diversion Project, which has shifted tens of billions of cubic metres of water, is as much a political safeguard as an engineering feat.

These pressures shape diplomacy: soybeans from Brazil, oil from the Gulf, gas from Australia and Qatar, grain from Russia. To cast them as expansionism misses the point – they are about keeping promises to the people.

Perhaps the most sensitive need is stability. Xi’s doctrine of comprehensive national security now spans everything from cyberspace to outer space. Surveillance, censorship and ideological policing tarnish China’s global image but are justified internally as defences against chaos and “colour revolutions”.

Hong Kong illustrates this calculus. For Beijing, the city remains a vital financial hub and gateway for capital, but it is also a political risk. Instability here is seen as a threat to party legitimacy. That helps explain why Beijing prioritised control over reputation, even at the cost of international backlash. In this framework, stability is not optional – it is survival.

Taiwan is often described as something China wants, but for Beijing it is also a need. Taiwanese independence would be an unthinkable humiliation that could undermine the party’s authority. However, a reckless military invasion that triggered devastating sanctions or war could threaten growth, food and energy supplies and social stability – the very foundations of legitimacy.

This helps explain why Beijing invests so heavily in grey-zone tactics, economic coercion and military deterrence rather than rushing into conflict. Taiwan is a sovereignty issue, but also a matter of survival. That duality makes it highly sensitive yet also constrained.

Critics are correct that Xi’s China has grown more coercive and risk-tolerant. “Wolf warrior” diplomacy, swelling defence budgets and an expanded nuclear arsenal are real, but even assertiveness is structured by constraint. China cannot simply walk away from growth, food and energy flows or domestic order. These pressures both fuel ambition and set limits.

If needs instead of wants drive China’s choices, the strategy of rivals, adversaries and even partners towards Beijing should adjust. They should avoid over-militarisation as an approach focused solely on war-fighting risks the very insecurity spiral Washington fears.

They should also carefully target their pressure as blanket decoupling or sweeping export bans threaten Beijing’s ability to meet basic needs, narrowing its room for compromise and raising risks. Calibrated measures preserve leverage while leaving space for cooperation.

At the same time, they should engage on shared needs. Agricultural trade, climate, health and energy transition are arenas where China’s needs align with global ones, offering practical avenues for collaboration.

Finally, they should leverage constraints. By understanding where China is most vulnerable – energy chokepoints, food supply, technology bottlenecks – policymakers can better shape Beijing’s risk calculus.

Asking what China wants risks producing misperceptions and overreactions. Asking what China needs points to the underlying constraints that make its behaviour at once coercive and cautious. That shift does not make Beijing benevolent, but it does make it more comprehensible and its policies more realistic.

Recognising needs means designing responses that defend one’s own interests while avoiding unnecessary escalation. If leaders keep asking the wrong question, they risk fighting the wrong battles. A needs-first lens will not end the US-China rivalry, but it could prevent it from becoming more dangerous.

Australia-China ties: ABC resumes Beijing bureau after 5 years, Xi-Albanese talks

https://www.scmp.com/news/asia/australasia/article/3323539/australia-china-ties-abc-resumes-beijing-bureau-after-5-years-xi-albanese-talks?utm_source=rss_feed

Australia’s public broadcaster said on Thursday it will again base a correspondent in China, five years after two journalists fled the country under diplomatic protection as bilateral ties soured.

The Australian Broadcasting Corporation’s (ABC) Bill Birtles and Australian Financial Review correspondent Michael Smith were rushed out of the country in September 2020 after Chinese police conducted midnight raids on their homes and sought to question them.

The broadcaster said it had been “eager to return a correspondent to China” and hailed the resumption of its Beijing bureau as a “significant milestone”.

Birtles and Smith left China weeks after Australian citizen Cheng Lei, who worked for Chinese state TV, was detained on “national security” grounds amid rapidly deteriorating relations between Canberra and Beijing.

Cheng’s release in October 2023 marked the beginning of a gradual improvement in ties.

Relations between Beijing and Canberra had soured due to disputes over trade, the origins of the Covid-19 pandemic and alleged Chinese political interference in Australia.

ABC journalist Allyson Horn will now be posted to the Chinese capital “in coming weeks”, the broadcaster said in an online statement.

The return of the ABC’s Beijing bureau follows Australian Prime Minister Anthony Albanese’s visit to China in July, when he sought to bolster trade ties even though geopolitical tensions remained high.

“Australia values our relationship with China and will continue to approach it in a calm and consistent manner, guided by our national interest,” Albanese said during talks with Chinese President Xi Jinping.

Xi, in turn, hailed the “benefits” of improved ties between China and Australia, saying the relationship had “risen from the setbacks and turned around”.

Beijing says Philippines ‘courts outside powers’ and ‘causes trouble’ in South China Sea

https://www.scmp.com/news/china/diplomacy/article/3323535/beijing-says-philippines-courts-outside-powers-and-causes-trouble-south-china-sea?utm_source=rss_feed

Beijing has accused the Philippines of “causing trouble” in the South China Sea while also suggesting the United States was to blame for fuelling tensions.

On Thursday, Zhang Xiaogang, a spokesman for the Chinese defence ministry, criticised joint drills by the Philippines and Australia.

“[Manila] has repeatedly courted influence from outside powers to make waves in this area, playing the role of an ass in a lion’s skin,: Zhang said, using a Chinese idiom to accuse it of “jeopardising regional security and stability”.

“Reality has proven time and again that the Philippine side is the one who undermines stability and causes troubles in the South China Sea.”

In a veiled reference to the US, he added: “At the same time, certain external countries have instigated and supported the Philippines to take irresponsible actions that harm the shared interests of regional countries.

“China’s actions to safeguard our territorial sovereignty and maritime rights and interests are justified and legitimate. We will take firm countermeasures against any provocative behaviour.”

Beijing has long accused Washington of destabilising the region as the US and Philippines have worked to strengthen their long-standing military alliance.

More than 3,600 service personnel from Australia and the Philippines are currently taking part in Exercise Alon, their largest-ever joint drill, which began on August 15 and ends on Friday.

A Canadian frigate also took part in the exercise, while the US, Indonesia, Japan, New Zealand and South Korea all sent observers.

The drill is taking place on Luzon and Palawan islands. The latter is less than 300 nautical miles (555km) from the Philippine-held Thitu Island in the Spratly Islands and near Second Thomas Shoal – one of the main flashpoints in Manila’s long-running territorial dispute with China.

Last week, Philippine Defence Secretary Gilberto Teodoro Jnr and his visiting Australian counterpart Richard Marles said they hoped to finalise an “enhanced defence cooperation” agreement by next year.

In a joint statement, they “expressed serious concern over the situation in the South China Sea, particularly dangerous and coercive actions by China against Philippine vessels”.

China’s expansive claims in the South China Sea are challenged by a number of neighbouring countries.

In recent years, the Philippines has been the most active in challenging Beijing’s claims, leading to a number of confrontations around disputed features such as Scarborough Shoal and Second Thomas Shoal.

Earlier this month the defence ministry in Beijing accused the Philippine coastguard of carrying out “dangerous manoeuvres” after a Chinese warship and coastguard vessel collided during a reported chase near Scarborough Shoal.

Two days later Beijing also criticised the US for sending a destroyer to the disputed waters near the scene of the collision.

Earlier this week, China published its first report on US freedom of navigation operations, accusing Washington of “double standards” and saying the transits had no basis in international law.

US report on Chinese ‘spy threat’ to universities ‘may have chilling effect’ on ties

https://www.scmp.com/news/china/diplomacy/article/3323452/us-report-chinese-spy-threat-universities-may-have-chilling-effect-ties?utm_source=rss_feed

The United States has identified China as the “top threat” in a report on espionage targeting universities and technology.

Some Chinese analysts warned that the report – which said “no nation has targeted Western research, science, and technology as aggressively as China” – could have a “chilling effect” on people-to-people and academic exchanges.

The report, compiled by the National Counterintelligence and Security Centre, alongside the Department of Education and other federal bodies, was published online on Monday, and said: “The Chinese Communist Party and Chinese intelligence services represent the broadest, most active, and persistent espionage threat to the US. It also remains the top threat to US technology competitiveness.”

It cited Beijing’s Thousand Talents Plan to recruit scientific and technological expertise from abroad in warning that China was targeting US specialists in fields such as artificial intelligence and machine learning, quantum technology, semiconductors, optics, hypersonics and energy systems to access sensitive technology and intellectual property.

It also argued that “foreign adversaries”, including China, “infiltrate intelligence operatives into universities who then pose as students to collect information on classmates and research”.

The Office of the Director of National Intelligence, which oversees the counter-intelligence centre, said the report was designed to “alert US colleges and universities about increasing foreign threats to their research and to arm them with mitigation strategies for addressing these threats”.

The report suggested that US “perceptions” of Chinese espionage were hardening and might result in further restrictions on academic exchanges and cooperation between scholars of both countries, according to Xin Qiang, deputy director of the Centre for American Studies at Fudan University in Shanghai.

“[That] could also have a chilling effect on … interactions between students from China and the US, especially Chinese students in STEM [science, technology, engineering and mathematics],” he said.

He warned it could deter students from going to America to study, adding: “This is not good for either China or the US.

“This will certainly undermine the foundation of cooperation and interaction between the two countries and bring more adverse and negative impacts to overall China-US relations.”

Zhu Feng, dean of the school of international studies at Nanjing University, said the report might make Chinese students and their parents more hesitant about studying in the US.

“The new report reflects the policy stance or inclination [of the White House] towards further restricting China-US exchanges in technology, education and people-to-people interactions,” he said.

Zhu also pointed to a recent article in the Wall Street Journal by Mike Gallagher, the former chairman of the House select committee on competition with China, which called for Harvard’s Chinese students to be sent home.

“Blindly embracing academic cooperation with a geopolitical rival is absurd,” the former Republican congressman wrote.

In 2018, during Donald Trump’s first term as president, his administration unveiled the China Initiative to combat alleged economic espionage and intellectual property theft – a programme critics branded as racist.

Although it was scrapped during Joe Biden’s spell in office after a strategic review determined that it fuelled “harmful perceptions” about China, academic ties between the two countries have continued their downward spiral.

Several US universities have ended partnerships with Chinese counterparts and Fulbright exchanges with mainland China and Hong Kong were terminated five years ago.

Concerns are now rising that the China Initiative could be revived, and earlier this week the foreign ministry in Beijing hit out at the alleged mistreatment of Chinese students by US immigration officials.

The Chinese embassy in Washington also cited particular concerns about Houston, warning students to “be cautious when choosing” the Texan city as their point of entry into the US.

The US intelligence report warned that foreign recruitment programmes and spying could “manifest themselves in a changing dynamic in the strategic power competition” that would threaten both America’s national and economic security.

It warned that individuals and institutions should disclose affiliations to foreign programmes to avoid legal and career consequences.

It also cited China’s reported development of a continuously fuelled nuclear reactor, saying it was “largely driven by [China’s] ability to exploit publicly available US research”.

However, it said the concerns about spying were down to “China’s government … and its intelligence services, not the Chinese people or Chinese Americans who are often victimised by China”.

Trump said on Monday he would allow 600,000 Chinese students to enter the US – double the current figure – apparently backtracking on a pledge by Secretary of State Marco Rubio three months ago to start “aggressively” revoking Chinese students’ visas.

Trump’s comments triggered a backlash among his Make America Great Again supporters, with Congresswoman Marjorie Taylor Greene writing on social media: “We should not let in 600,000 CHINESE students to attend American colleges and universities that may be loyal to the CCP.”

Asked about Trump’s remarks, foreign ministry spokesman Guo Jiakun said “we hope the US will act on President Trump’s commitment”.

Zhao Zhijiang, a research fellow at the Beijing-based think tank Anbound, said US “hostility” towards Chinese academics was unlikely to change in the short term.

“In terms of impact, the report will not directly lead to a complete academic decoupling, but in practice, the space for academic collaboration in emerging industries and sensitive technologies will inevitably shrink, with distrust becoming the dominant atmosphere,” he said.

“Overall, China-US academic exchanges are entering a new normal of limited openness and cautious cooperation.”

Zhu from Nanjing University said it “remains to be seen” whether the US would start significantly reducing student visas or widening the net to target those coming to study liberal arts.

But he added: “The overall dynamic of the US restricting educational, people-to-people and scientific-technological exchanges with China will not fundamentally change.”

In Washington, China’s top trade negotiator readies for talks, but no formal negotiations

https://www.scmp.com/economy/global-economy/article/3323530/washington-chinas-top-trade-negotiator-readies-talks-no-formal-negotiations?utm_source=rss_feed

One of China’s top trade negotiators, Li Chenggang, will be meeting with relevant US officials this week while in Washington, the Ministry of Commerce has confirmed.

“China is willing to work with the United States to continue leveraging the China-US economic and trade consultation mechanisms effectively, resolve issues through equal dialogue and consultation, and jointly maintain the healthy, stable and sustainable development of China-US economic and trade relations,” ministry spokeswoman He Yongqian said on Thursday, after Li arrived in the US capital late on Wednesday.

A source familiar with his itinerary said Li’s meetings would take place on Thursday and Friday.

Since being appointed as China’s international trade representative and vice-minister of commerce in April, when US President Donald Trump’s renewed trade war began heating up, Li has participated in all three rounds of trade negotiations with the US – in Geneva, London and Stockholm – over the past four months, alongside Vice-Premier He Lifeng.

The commerce ministry spokeswoman did not specify with whom Li would be meeting in Washington. A spokesperson for the US government had said on Monday that Li might meet deputy-level US government officials, and that the visit was not part of a formal negotiating session.

Li’s trip to the US capital followed a four-day visit to Canada, ending on Wednesday, during which he held “candid, pragmatic and constructive” discussions with his Canadian counterpart on improving bilateral economic and trade relations, addressing each other’s economic and trade concerns, according to an earlier statement from the commerce ministry.

After seeing tariffs on each other’s goods surpass 100 per cent, the two countries agreed in May to remove most of the heavy levies for 90 days and establish a trade-consultation mechanism to facilitate future dialogue.

And late last month, the tariff truce was extended for another 90 days, after the last round of talks in Stockholm.

Also on Wednesday, US Treasury Secretary Scott Bessent, who leads the US delegation in negotiations with China, said that “everything is on the table” in trade talks with China, and that he would be meeting again with his Chinese counterpart at the end of October or the beginning of November.

“It’s a very complicated relationship,” he said in an interview on Fox Business’ Mornings with Maria programme. “We are moving very deliberately on this. Both sides have approached it with great respect.”

What does SpaceX’s Starship test success mean for the US-China moon race?

https://www.scmp.com/news/china/science/article/3323437/what-does-spacexs-starship-test-success-mean-us-china-moon-race?utm_source=rss_feed

The first successful flight for Starship – the biggest and heaviest rocket ever built – has revived US hopes of beating China in the race back to the moon, but experts warned the breakthrough may not be enough to stop Beijing from building the first lunar base.

After months of failed attempts, Tuesday’s test saw both stages of the SpaceX rocket splash down nearly intact – a milestone for the vehicle that Nasa is counting on for the first crewed American moon return mission since Apollo.

Nasa acting administrator Sean Duffy wrote on social media that Flight 10’s success “paves the way for the Starship Human Landing System that will bring American astronauts back to the moon on Artemis III”.

“This is a great day for Nasa and our commercial space partners,” he wrote.

Starship’s lunar lander variant is designed to ferry astronauts from the moon’s orbit to the surface and back for the Artemis III mission, which is targeting 2027 for its departure – a timeline that Duffy insisted was realistic and vital to beating China.

“We won the first space race, and we’re going to win today’s space race, and tomorrow’s space race,” he told CBS Evening News after the Starship test flight.

Outside Nasa, many analysts expressed their doubts about the plan. Rand Simberg, an aerospace engineer turned space policy analyst, said the 2027 target was “ambitious, up to over-optimistic”.

Artemis III might put Americans on the moon before China, but the risk of delay remained high – and even a victory would be little more than “redoing Apollo with a man and a woman … at very high cost, with little legacy”, he said.

According to Simberg, the real race is not about planting a flag but about building a lasting presence, noting China’s plans to establish an international research station at the lunar south pole with Russia and other partners.

Simberg outlined Beijing’s broader ambition to establish a permanent human foothold on the moon in a recent report for the California-based Reason Foundation think tank.

He was also scathing about Nasa’s reliance on its own super heavy-lift expendable Space Launch System and Orion capsule, writing in the report that these programmes consumed tens of billions of dollars while flying only rarely.

“Congress expects Nasa to be doing its utmost to keep up with Chinese advances in space. This will require Nasa and the US space programme to leap forward, not remain where it is.”

Simberg argued that redirecting those funds to commercial vehicles like Starship would give the US a better chance of establishing an affordable and scalable lunar base in a much shorter time.

“Americans like to think they are number one in space. It’s important to our national pride and we’ve been resting on those laurels forever,” he told the South China Morning Post.

There was “virtually no hope of getting back to the moon before China in any useful way” with Nasa’s rocket, Simberg added.

Meanwhile, Beijing is pressing ahead with its plans. Recent tests of the Lanyue lunar lander and Long March-10 moon rocket have fuelled speculation that a Chinese crewed landing could come sooner than expected.

Gregory Kulacki, a space policy expert and East Asia director for the Union of Concerned Scientists, said it was hard to believe that SpaceX founder Elon Musk or Nasa would meet the ambitious targets to return to the moon, especially when the development of Starship had suffered from Musk’s heavy involvement in politics.

“He’s built businesses that are highly dependent on his personal intervention, and no matter how quick-witted he may be, there is only so much time in a day,” Kulacki said.

“[US President Donald] Trump is not [John F.] Kennedy, and Musk is not Wernher von Braun,” he said, referring to the late German-American aerospace engineer.

“The positive and forward-looking thinking that propelled the United States of the 1960s has given way to a dark and destructive political and social nostalgia that is ignoring the challenges of the present and has lost confidence in the future.”

Dean Cheng, a former space policy analyst at The Heritage Foundation, told Ars Technica that “it looks quite likely that the Chinese will land on the moon before Nasa”. The geopolitical impact would be enormous, he warned.

“It means the end of American exceptionalism,” Cheng said.

Speaking to The New York Times, Todd Harrison, a senior fellow at the American Enterprise Institute, said that Flight 10 restored momentum for SpaceX.

Even so, there remained “a greater than 50/50 chance” that China would get to the moon first, Harrison said, pointing out that Starship was yet to master lunar landing, in-orbit refuelling and astronaut return, among other technical challenges.

Simberg also noted that Blue Origin’s Blue moon lander – also funded by Nasa – with a 2030 target for its debut flight, would almost certainly come after China’s first crewed landing.

“One could hope that China will be delayed but, as the old saying goes, hope is not a strategy,” he said.

What does a mock US rocket launcher in a mainland China car park say about a Taiwan conflict?

https://www.scmp.com/news/china/military/article/3323477/what-does-mock-us-rocket-launcher-mainland-china-car-park-say-about-taiwan-conflict?utm_source=rss_feed

Mock-ups of Himars rocket launchers – which Taiwan has ordered from the US – have been spotted in a car park in mainland China, suggesting a PLA simulation of a cross-strait conflict.

A video circulating on mainland Chinese social media this week showed three trucks resembling the US-made High Mobility Artillery Rocket Systems (Himars).

The replica trucks appeared to be lighter than genuine Himars units and, according to the video, lacked rocket launchers.

The footage showed the vehicles stationed in Xuzhou in the eastern province of Jiangsu. The South China Morning Post has yet to independently verify when the video was taken.

The trucks are expected to be used during People’s Liberation Army (PLA) exercises simulating a conflict involving Taiwan, which in May tested its high-precision Himars rocket systems for the first time.

Each Himars unit, manufactured by Lockheed Martin, is equipped with six multiple launch rockets with a maximum range of 70km (43½ miles), and can carry a single Army Tactical Missile System with a range of up to 300km.

Ukraine has used the Himars to attack valuable Russian targets.

The system is also believed to be crucial in the event of a possible conflict between mainland China and Taiwan, which are separated by an average distance of 180km across the Taiwan Strait.

The PLA is equipped with a similar multiple rocket launcher, the PHL16. The model, believed to be capable of covering the entire Taiwan mainland from across the Taiwan Strait, is sometimes referred to as Beijing’s version of Himars.

Beijing regards Taiwan as part of its territory and, if necessary, will use force to achieve reunification. While the US, like most countries, does not recognise Taiwan as an independent state, it remains the island’s largest arms supplier and opposes any change to the status quo.

Since William Lai Ching-te, from the pro-independence Democratic Progressive Party, took office last year, the PLA has conducted several large-scale military exercises around Taiwan, aimed at deterring what Beijing views as provocative actions to push the island towards greater independence.

In response to military pressure from the PLA, Taipei has been accelerating arms imports from the US.

It made made an initial order for Himars systems in 2020, which were delivered last year and tested them in May. Taipei has ordered an additional 18 sets, with delivery expected early next year.

The second batch of Himars systems, which included 84 tactical missiles and 864 precision-guided rockets, is valued at around US$1.07 billion and is intended to improve the island’s ability to make long-range precision strikes.

On August 21, Taipei announced that its defence budget for next year would reach a record 3.32 per cent of its GDP, with plans to increase the proportion to 5 per cent by 2030 – a move that Beijing has repeatedly opposed.

China races to roll out low-orbit satellite internet to rival Musk’s Starlink

https://www.scmp.com/economy/china-economy/article/3323502/china-races-roll-out-low-orbit-satellite-internet-rival-musks-starlink?utm_source=rss_feed

China is pushing to accelerate the rollout of commercial low-orbit satellite internet services as it strives to develop home-grown rivals to SpaceX’s Starlink network.

In a guideline released on Wednesday, the Ministry of Industry and Information Technology said it would encourage operators of low-orbit satellite constellations to launch trials of commercial services “at an appropriate time”.

The document also encourages telecom operators to leverage low-orbit satellite internet to expand high-speed data services beyond voice and text messaging, promoting the integrated development of land and space-based communications infrastructure.

China has been stepping up efforts to create its own versions of Elon Musk’s Starlink, with two state-led projects currently developing their own constellations of low-orbit satellites.

The document also calls on satellite communications companies to explore new application scenarios and fresh ways to harness their existing infrastructure.

“Satellite internet is rapidly expanding from specialised use to everyday devices like phones, cars and drones, potentially creating new growth opportunities,” the Ministry of Industry and Information Technology said in a statement.

The guideline called for “tailored measures for different types of enterprises” to ensure “a phased and orderly opening of the market in satellite communications”, it added.

Beijing designated satellite communications as a key emerging sector in 2020 and has offered generous funding and policy support in an effort to accelerate the industry’s development.

With satellites offering connectivity for enterprises deploying internet-of-things devices in remote locations or across oceans, satellite IoT connections are projected to grow at an average annual rate of 23.8 per cent up to 2030, according to a report by research firm Omdia published in July.

China already has a mature high-orbit satellite network – which is mainly used for navigation, telecommunications and weather monitoring – but its low-orbit constellations remain in the early stages of development.

The guideline said telecom operators should partner with satellite companies to make better use of high-orbit satellite systems like BeiDou – China’s version of the Global Positioning System (GPS) – and speed up the adoption of satellite-to-phone services.

Two state-led Chinese satellite internet projects – Spacesail, also known as Qianfan, and GuoWang – have launched their first batches of low-orbit satellites over the past year, but they have a long way to go to catch up with SpaceX’s Starlink.

Musk’s company already has several thousand satellites in low Earth orbit, which provide near-global satellite internet coverage.

With China’s satellite launches picking up pace, the new guideline is a sign that the government is stepping up preparations for a rollout of commercial satellite internet services, analysts said.

“We anticipate that the licensing process for the satellite communication industry will accelerate in the near future, providing institutional support for the commercialisation of satellite internet applications,” CITIC Securities said in a research note published on Thursday.

An industry insider told domestic media outlet IT Times that China was expected to issue its first satellite internet licenses to its three state-owned telecom giants – China Mobile, China Telecom and China Unicom – in the near future, paving the way for companies to begin commercial operations.

However, it will likely take another two to three years before services comparable to Starlink become available, said the source, as reported on Monday. Even SpaceX did not begin public trials of its satellite internet service until October 2020, when it already had more than 800 Starlink satellites in orbit, the source added.

China’s deployment of low-orbit satellites has “entered a critical phase”, with operators “accelerating” their launches, Guotai Haitong Securities said in a research note earlier this month.

The urgency sprang from intensifying global competition, as limited space in near-Earth orbit made constellation deployment a “‘first-come, first-served’ race”, the company added.

In August 2024, the Spacesail broadband network – a project led by the Shanghai municipal government – became the first Chinese project to launch a batch of low-orbit satellites. It had about 90 satellites in orbit as of July.

The Beijing-backed GuoWang constellation also launched its first satellites in late 2024 and has since accelerated its satellite deployment.

Five groups of GuoWang satellites have been launched in just the past two months, compared with three groups in the first half of the year.

Guangdong province, another major Chinese economic hub, also announced plans to foster a local commercial space industry earlier this month.

The province will provide government support and fast-track approvals for projects related to satellite constellations, according to the announcement.

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Baidu unveils AI computing platform powered by Chinese chips to push a domestic tech stack

https://www.scmp.com/tech/big-tech/article/3323480/baidu-unveils-ai-computing-platform-powered-chinese-chips-push-domestic-tech-stack?utm_source=rss_feed

Baidu, one of China’s artificial intelligence champions, on Thursday unveiled its Baige 5.0 AI infrastructure platform – powered by a mix of semiconductors, including those designed by its Kunlunxin unit – to raise the efficiency of DeepSeek’s open-source models.

The Beijing-based AI and internet search giant’s upgraded platform delivers a speedier network connection, increased computing power, and enhanced model training and inferencing capabilities, according to executive vice-president Shen Dou, who also serves as president of Baidu AI Cloud Group, speaking at a corporate event held in China’s capital on Thursday.

Baige’s inferencing system – backed by adaptive and smart resource allocation technologies, which speed up data throughput and lessen communications latency – improved the inferencing efficiency of DeepSeek’s R1 reasoning model by around 50 per cent, according to Shen. Inferencing is the process that a trained AI model uses to draw conclusions in response to human queries.

“That means, with the same time and cost … we could have the model ‘think’ 50 per cent more [or] work 50 per cent more,” Shen said.

The launch of Baige 5.0 reflects the growing efforts across the mainland’s AI and semiconductor sectors to push forward the development of a domestic AI technology stack, reducing the impact of US trade restrictions on China.

Shen said the Kunlunxin Super Node, which supports hundreds of interconnected AI chips, had gone live on the Baige 5.0 platform, making it capable of deploying and running a trillion-parameter AI system within minutes. The number of parameters in an AI model dictates the size and complexity of its use.

Baidu unit Kunlunxin designs integrated circuits to compete with those from US semiconductor powerhouse Nvidia and mainland rivals that include Huawei Technologies’ HiSilicon and Cambricon Technologies.

Kunluxin last week said it won chip orders worth over 1 billion yuan (US$139 million) for the AI projects of state-owned telecommunications network operator China Mobile, according to a Reuters report.

Cambricon, meanwhile, on Tuesday reported a revenue surge in the first half of 2025 on the back of “continued market expansion and active support for the implementation of AI applications”, according to the firm’s earnings report.

The launch of the Kunlunxin Super Node on the Baige platform comes as more Chinese enterprises adopt domestic chips to power AI development projects. This trend received a big boost last week, when Hangzhou-based DeepSeek suggested in a cryptic one-line post on WeChat that China’s next-generation AI chips would soon be released.

Baidu’s Hong Kong-listed shares closed 1.25 per cent lower to HK$86.60 on Thursday.

Why did Malaysia’s top deep-sea robotics scientist Mohd Rizal Arshad move to China?

https://www.scmp.com/news/china/science/article/3322785/why-did-malaysias-top-deep-sea-robotics-scientist-mohd-rizal-arshad-move-china?utm_source=rss_feed

China leads the world in adding wind turbine capacity, is home to the busiest container ports and excels at deep-sea science.

For Malaysian robotics scientist, Professor Mohd Rizal Arshad, who relocated to China this year, the growing number of underwater structures and deep-sea explorations hold great potential for marine robot applications.

“The future is in the ocean,” the ocean robotics expert said. He envisions the sea as a future source of drinking water, food, minerals and power such as wave energy.

Rizal said China had a robust ecosystem that enabled the swift translation of research into industry applications, fostered direct engagement with businesses to tackle real-world challenges and gave easy access to components for building prototypes.

The marine engineer joined Xian Jiaotong-Liverpool University’s Entrepreneur College in Taicang in the eastern province of Jiangsu, as the dean of the school of robotics in February.

After completing his education in Britain, he researched control and robotic systems for 26 years in Malaysia, developing underwater submersibles, cable and non-cable underwater vehicles, floating robots and crawler robots for the seabed, among other intelligent marine robots.

“China is a big country with a large maritime area as well as big rivers and lakes,” Rizal said, pointing to the great potential need for mapping the waters and inspecting underwater structures.

China accounts for nearly half of the global offshore wind capacity, which reached 78.5 gigawatts by the end of last year, according to the Global Offshore Wind Report 2024 released by the World Forum Offshore Wind in April.

Late last year, the world’s most powerful floating offshore wind turbine went into operation in Jiangsu province. The turbine boasts a wind wheel with a diameter of 260 metres (853 feet) and can produce 62 million kilowatt-hours of electricity annually, according to state news agency Xinhua.

Seven out of the world’s top 10 container ports by volume are in China, according to the trade association World Shipping Council, including Shanghai, Ningbo-Zhoushan, Shenzhen and Guangzhou. Port Klang on the Strait of Malacca, Malaysia, ranks 12.

With experience in designing solutions for port inspection in Malaysia, Rizal said he hoped to use his expertise to provide affordable and regular underwater inspection services for Chinese ports, using robotics and AI technologies.

“In general, the supporting structures of the port platform could pose major issues with ports that are often overlooked,” Rizal said.

“They may be corroding and the concrete may be falling, but because these areas are under the platform, they are rarely inspected. But when they have a problem, it is going to be very costly and probably fatal for some people.”

He said he planned to approach Chinese ports to develop solutions based on their needs, noting their structural integrity risks.

“Ports are not a very static infrastructure. It is static, but big cargo ships are banging the platform and heavy loads are moving on the platform,” he said.

“That is what we are proposing [to Chinese ports]. In some of the ports that we have worked with, they now put more emphasis on inspection.”

He said China’s robust ecosystem accelerated the rapid transformation of innovative research into practical industrial products, an advantage for researchers who aimed to solve real-world problems with science, making China a natural choice for robotics researchers.

“China provides a fertile ground for new research to be developed,” Rizal said, pointing to the competitive nature of the robotics industry with companies racing to bring research output outside the laboratory.

“China’s robotics technology development and its incorporation or adoption into the industry is a very short cycle. That means a lot of new robotic technologies are being utilised in the industry and society and adapted to real consumer products,” he said.

“This is very unique because in my own experience in Malaysia, and in a number of countries, normally it takes quite a long time before some new research findings can be converted into real industry use and adopted by the industry.”

Rizal also said being able to connect with the industry first-hand was “a very strong point that will basically be difficult to be matched by others outside China”.

“This is a very fertile, strong environment that will provide opportunities for us to learn and get to the actual problem in the industry because there is a lot of intensive discussion and engagement in the industry,” he said.

“For researchers, the most important thing is to know the problem statement – what the exact problem you are solving is,” Rizal said, adding that without engaging with the industry, academics often created “imaginary problems” based on secondary information.

“When we do research independently, we try to push out the technology to industry. This is very challenging because the industry may not want our solution,” he said.

In terms of hardware, Rizal said easy access to components in China made robotics research more efficient.

“Compared to when I was in Malaysia, when I want to integrate [a robotic system], sometimes I have to buy parts from China and the US; we spend a lot of time waiting for things to arrive and there is no guarantee of a fit,” he added.

Rizal said the mature research ecosystem in China also fostered the growth of emerging research areas such as autonomous systems and artificial intelligence.

Describing AI as the brain of robots, he said robotic systems should be equipped with decision-making abilities.

“It is like us humans: we can have big muscles and a very strong body. But if the brain does not work, we would not work well,” Rizal said.

“A flying robot should decide how fast to fly and stabilise itself while an autonomous vehicle or a walking humanoid should decide if it should stop, jump or turn back when it sees a big hole in front of it.”

In the waters, AI engines could classify, filter and analyse a large amount of data to make decisions based on information such as water volume, temperature, acidity and dynamic movement of the water column, he said. “This intelligent component backbone is critical to robotic systems,” Rizal added.

As for deep-sea exploration, he said while he understood the sensitivity of the research area, as a foreign scientist in China, he hoped to contribute to the general design of control algorithms, navigation systems and underwater acoustic sensors.

“Mining activities on land are very risky, digging into the mountains and creating big, open mines, whereas the ocean holds a lot more resources,” Rizal said.

“Deep-water mining is a very strategic industry for many countries like China, India and Japan,” he said, pointing to manganese nodules – deposits of economically valuable metals such as manganese oxides, iron, cobalt, nickel and copper – “lying on the seabed” at depths of around 5,000 metres.

XtalPi’s 615% jump in drug revenue highlights China’s biotech boom after DoveTree deal

https://www.scmp.com/business/banking-finance/article/3323467/xtalpis-615-jump-drug-revenue-highlights-chinas-biotech-boom-after-dovetree-deal?utm_source=rss_feed

Shenzhen-based XtalPi posted a 615 per cent surge in first-half revenue from its drug-discovery business following a blockbuster deal that highlighted China’s growing importance as a source of biotechnology innovation for the global pharmaceutical industry.

Revenue from drug discovery soared to 435 million yuan (US$61 million) in the first half after the company collected the first US$51 million from an August agreement with US-based DoveTree, according to its earnings announcement on Wednesday. DoveTree, founded by Harvard University chemist Gregory Verdine, would pay an additional US$49 million in the coming six months, according to XtalPi.

First-half net profit for the company, which listed in Hong Kong in June 2024, reached 141.6 million yuan, swinging from a loss of 251.4 million yuan a year earlier. Overall revenue jumped 404 per cent to 517.1 million yuan, while revenue from intelligent robotics grew 96 per cent to 81.9 million yuan, driven by demand for automated chemical synthesis services and research and development solutions.

XtalPi’s US$6 billion deal with DoveTree gives the latter exclusive global rights to develop and commercialise drug candidates that XtalPi discovers using its drug-discovery platform, which is powered by AI and robotics. The deal covers small-molecule and antibody drugs targeting areas including oncology, immunologic diseases and neurological disorders.

In the first half of 2025, US companies signed 14 licensing agreements worth about US$18.3 billion with Chinese biotech firms, compared with just two such deals a year earlier, according to a Reuters report in June.

XtalPi was founded in 2015 by three quantum physicists from the Massachusetts Institute of Technology: Wen Shuhao, Ma Jian and Lai Lipeng. It claims its proprietary integration of robotics and AI is able to shorten drug-discovery timelines from four years to as little as one or two years.

XtalPi’s listing under the Hong Kong stock market’s Chapter 18C listing rules, which target high-growth technology start-ups, raised HK$989.3 million.

Its stock fell 2.7 per cent to HK$10 as of 2.50pm on Thursday.

China’s booming biotechnology sector, supported by government policies and technology development, has helped turn the Hong Kong exchange into a global biotech fundraising powerhouse this year.

Jiangsu Hengrui Pharmaceuticals completed Hong Kong’s largest pharmaceutical IPO in five years when it raised US$1.26 billion in May. The company reported a record-high net profit of 4.45 billion yuan in the first half, up 29.67 per cent year on year.

Two other Hong Kong-listed biotech firms announced positive results this month.

Suzhou-based Innovent Biologics, the first Chinese company to be approved to sell a drug for weight loss and diabetes, posted 50.6 per cent growth in first-half revenue to 5.95 billion yuan on Wednesday. Its net profit held steady at 1.21 billion yuan.

BeOne, a developer of oncology drugs, reported a 45 per cent jump in first-half revenue to US$2.43 billion on August 6. Its adjusted net income surged 417 per cent to US$388.96 million.

Biotech firms recorded an average cumulative return of 137 per cent this year, according to an August report by CCB International.

Nvidia shares slip in after-hours trading as China market prospects remain uncertain

https://www.scmp.com/tech/article/3323461/nvidia-shares-slip-after-hours-trading-china-market-prospects-remain-uncertain?utm_source=rss_feed

Nvidia’s stock declined more than 5 per cent in after-hours trading on Thursday after it detailed challenges and uncertainties in the China market, despite robust quarterly financial results.

Shares of the US semiconductor giant closed flat at US$181.6, but dropped as low as US$172.45 after posting revenue growth of 56 per cent to US$46.7 billion for the three months that ended July 27. However, revenues from China, including Hong Kong, declined 24 per cent to US$2.8 billion, according to its latest financial report.

The company did not sell any H20 chips, designed specifically for the Chinese market to comply with US export controls, in the quarter. In comparison, H20 sales generated US$4.6 billion in the previous quarter.

Nvidia is facing regulatory pressure from the US and China. It has not resumed shipments of H20, even though certain China-based customers were granted a licence, because Washington asked for a 15 per cent cut of H20 revenue without “publishing a regulation codifying such requirement”, it said.

Meanwhile, the Chinese government has become another obstacle, “questioning whether our H20 products have built-in vulnerabilities”. The company said none of its graphics processing units contain back doors.

Nvidia values the China market, as CEO Jensen Huang estimated that the market could be a US$50 billion opportunity this year.

“It is the second-largest computing market in the world … About 50 per cent of the world’s AI researchers are in China,” Huang said during an earnings call on Wednesday, adding that the country’s open-source AI models were “excellent”, including DeepSeek, Alibaba Group Holding’s Qwen and Moonshot AI’s Kimi. Alibaba owns the Post.

“With US-China tech tensions simmering, export restrictions remain a key risk to future growth,” said a Wednesday research note by online trading platform Saxo. The situation may benefit Chinese chipmakers, as “policy tailwinds could turn this dip into opportunity”, it added.

On Thursday, the Semiconductor Index compiled by Chinese financial data provider Wind and comprising more than 200 component stocks, hit a record high, gaining 32 per cent since the beginning of the year.

The component stocks included rising stars Cambricon Technologies and foundry Semiconductor Manufacturing International Corporation. Cambricon, dubbed China’s “little Nvidia”, on Tuesday reported a revenue surge of 4,348 per cent for the first half of the year.

“The Chinese government has and may continue to encourage customers to purchase from our China-based competitors … which could negatively impact our business and financial results,” Nvidia said in its financial report.

Newly published guidelines for artificial intelligence development from China’s State Council aim to boost local computing capacity and AI chip production. Separately, the country aimed to triple its AI processor output next year, The Financial Times reported on Wednesday.

Some analysts remain bullish on Nvidia as it remains the global leader in the AI race. “We view any decline in Nvidia stock to be a clear buying opportunity as Nvidia remains the only game in town fuelling this Fourth Industrial Revolution,” Wedbush Securities said in a report on Thursday.

As of Thursday, Nvidia was still the world’s most valuable company with a market cap of US$4.4 trillion. Wedbush expected its valuation to hit US$5 trillion by early 2026.

Wuliangye Yibin’s profit growth sinks to 10-year low hit by China’s austerity drive

https://www.scmp.com/business/companies/article/3323454/wuliangye-yibins-profit-growth-sinks-10-year-low-hit-chinas-austerity-drive?utm_source=rss_feed

Wuliangye Yibin, China’s second-largest liquor distiller, reported its slowest earnings growth in a decade, reflecting the impact of an intensified anti-corruption campaign on ostentation and a slowing economy that has also affected its peers.

First-half revenue of the Yibin, Sichuan-based company rose 4.2 per cent to 52.8 billion yuan (US$7.4 billion) from a year earlier, while net profit attributable to equity holders increased 2.3 per cent to 19.5 billion yuan, according to its earnings statement published on Wednesday. Both revenue and profit grew at the slowest pace since 2015.

Earlier this month, China’s largest baijiu maker, Kweichow Moutai, reported an 8.9 per cent growth in revenue and a 5.3 per cent increase in net profit for the first half, both the slowest in a decade.

Earlier this week, peer Jiugui Liquor reported a 43.5 per cent drop in revenue and a 92.6 per cent plunge in net profit, also its worst in 10 years.

Baijiu, Chairman Mao Zedong’s favourite drink, is regularly served at government banquets and family gatherings. With prices ranging from a few yuan to thousands, it is a staple of Chinese culture. China is also the world’s largest consumer of alcoholic beverages.

A report from Guosen Securities this month said that policy factors led to a sharp reduction in baijiu consumption in the second quarter, which resulted in a significant drop in sales of mainstream products.

The report also said that since July local governments had taken a more nuanced approach to policy implementation, and “after August, normal occasions for personal drinking, family gatherings and popular banquets such as graduation parties will see some recovery”.

After coming to power in 2012, President Xi Jinping launched a sweeping and unrelenting anti-corruption campaign. The crackdown ensnared a record number of high-ranking officials last year, with at least 56 senior cadres at the vice-ministerial level or above investigated, a nearly 25 per cent increase from 2023, according to a Post report from December last year.

An anti-corruption intensity proxy compiled by Goldman Sachs, based on the number of government officials under investigation, remained at a high level in July.

In May, Beijing issued regulations on practising thrift and combating waste in party and government organisations, banning banquets and excessive drinking. Analysts note that the regulation would further hit China’s sluggish consumption.

The austerity measures were likely to further suppress consumption of certain goods and services, Nomura said in a note in June. Institutional investors were concerned that a ban on alcohol at official gatherings could hamper Beijing’s efforts to boost spending and juice up the economy, Goldman Sachs said in the same month.

UBS Group last year downgraded its ratings on Kweichow Moutai and other major liquor distillers, noting that capacity expansions and destocking strategies had created a supply overhang amid waning consumer demand.

Annual retail sales growth, a key indicator of Chinese household spending, has been slowing since May, according to official data.

Kweichow Moutai, which until Wednesday was the most expensive stock in China, has seen its share price drop 2.7 per cent this year, while Wuliangye Yibin has lost about 8.5 per cent.

Wuliangye Yibin’s revenue was expected to grow by about 0.3 per cent this year, while net profit was likely to decline by 3.3 per cent, according to a recent report from Sinolink Securities.

Singapore can bring China, US together: diplomat Tommy Koh

https://www.scmp.com/week-asia/politics/article/3323455/singapore-can-bring-china-us-together-diplomat-tommy-koh?utm_source=rss_feed

The relationship between China and the United States has soured to such an extent that even think tanks from each side are unable to engage bilaterally, but Singapore can play a role in bringing the rival superpowers together, veteran diplomat Tommy Koh has said.

At a Singapore International Mediation Centre fireside chat on Wednesday, Koh, who was the city state’s former ambassador to the UN and Washington, noted Singapore had previously – as host – brought to the table territories with differences.

He listed examples including mainland China and Taiwan, notably when President Xi Jinping and former Taiwanese leader Ma Ying-jeou met in 2015, and the summit between US President Donald Trump and North Korea’s Kim Jong-un in 2018.

“This is a role that Singapore can play. We are friendly to everyone. We have good relations with all of them, and Singapore provides a very conducive environment to countries that have difficulties with each other to meet,” said Koh, who is ambassador-at-large for Singapore.

On the US-China relationship, Koh said the bottom line was that Americans were used to being No 1, so it was determined to prevent China’s rise.

However, he argued that China could not be contained and that, despite US opposition and sanctions, Beijing would eventually become an equal.

“It’s very important to us to encourage these two countries to talk to each other. The tragedy at the moment – there is no institutional mechanism for the United States and China to talk to each other,” Koh said.

On August 11, the world’s two largest economies decided to set aside tariff threats for another 90 days, hours before an existing 90-day trade truce was set to expire.

Trump said he would meet Xi before the end of the year if a trade agreement was struck, adding that “we’re getting very close to a deal”.

The leaders were expected to meet in Kuala Lumpur at Asean’s East Asia Summit from October 26 to 28, after Malaysian Prime Minister Anwar Ibrahim earlier this month revealed their attendance, but Reuters reported last week that Xi would be a no-show.

Aides for both presidents had also reportedly discussed a possible meeting in Asia around the time of the Asia-Pacific Economic Cooperation summit in South Korea from October 30 to November 1.

Koh also noted on Wednesday that the Chinese had become a major peacemaker, saluting their efforts to encourage Iran and Saudi Arabia to resume diplomatic relations and bringing together Palestinian factions to meet in Beijing to agree to work together.

He noted that both China and the US recently played a very positive role behind the scenes in supporting Malaysia to persuade Cambodia and Thailand to stop fighting and return to the negotiating table.

Looking ahead, Koh expressed concern over the open economy, noting that for the last 80 years, many countries in Asia prospered from trade and cross-border investments, and that the “principal architect of that world”, the US, had turned its back on the system.

Yet he urged optimism, since despite America comprising 25 per cent of the world’s economy, there was still the remaining 75 per cent, and while Washington accounted for 13 per cent of world trade, there was the other 87 per cent that had not gone protectionist and still supported free trade.

He noted that Singapore in the past year diversified trading partners, including securing free trade agreements in Latin America and the Pacific Alliance, as well as with the Mercosur group comprising Argentina, Brazil, Bolivia, Paraguay and Uruguay.

“Free trade is not dead; open economy is not dead. So you mustn’t come to the conclusion that, because of the United States’ opposition, the world order that we support is finished. It is not finished, so what we have to get used to is a new paradigm of a world without America,” Koh said.

Chinese ‘folded boy’ goes home, stands upright after 4 operations to break, reset body

https://www.scmp.com/news/people-culture/china-personalities/article/3323160/chinese-folded-boy-goes-home-stands-upright-after-4-operations-break-reset-body?utm_source=rss_feed

China’s so-called folded boy Jiang Yanchen, whose spine had been contorted backwards at an 180-degree angle for most of his life, has finally stood up straight.

Jiang took his first upright steps during a live-stream on August 25.

The 21-year-old underwent four extremely difficult operations over the past two years in which doctors broke and realigned the bones in his lumbar, cervical, hip and chest regions.

Jiang, from a small town in eastern China’s Shandong province, grew up with his neck increasingly bending backwards and his body folding in the shape of the letter “Z”.

When Jiang tried to stand up straight, he was only y 120cm tall, and about t 80cm tall when he was in a natural position.

However, he did not receive proper treatment due to a lack of medical resources.

Jiang had to kneel or lie in a prone position while taking classes and exams at school, but he remained optimistic and kept working hard.

In 2022, Jiang took the “gaokao”, China’s national college entrance exam, lying on a yoga mat, and was admitted to a university in his hometown, studying Energy and Power Engineering.

His mathematics score was the best in his class.

His mother, Yu Meiying, quit her teaching job to look after him full time. She posted footage of her son online and attracted the attention of Wang Yu, one of China’s best orthopaedic surgeons.

Wang diagnosed that Jiang had a condition which left his backbone with no muscular support.

In 2024, Jiang began his treatment with Liang Yijian, an orthopaedic surgeon famous for treating severely curved spines.

He underwent his last operation in June.

The surgeries were extremely risky and could have resulted in paralysis or even death.

But they were a success and Jiang could lie flat on a bed immediately after the last operation.

The medical team announced them as “the world’s first successful 180-degree spinal orthopaedic surgery”.

Many online observers had been following Jiang’s progress.

For the past year between operations, Jiang did rehabilitation for an average of six hours a day.

Two months after the last round of surgery, Jiang finally took his first upright steps during a live-stream to show people who care about him that he has made it.

Liang said Jiang the treatment had also brought Jiang’s heart and lung functions back to normal, adding that the efforts he had made throughout his treatment “showed persistence much greater than that of an ordinary human being”.

“All the pain is worth it when I see myself more like an ordinary person,” said Jiang, adding that he “felt reborn”.

He said he took his “gaokao” while kneeling down, and his dream was to take the postgraduate exams standing up.

Liang said Jiang is recovering well and is expected to return to university in September.

“I am sincerely happy for Jiang. I cannot imagine how much pain he used to be in, but a bright future awaits him now,” said one online observer.

“The treatment was magical, straightening up a boy who used to fold like that,” said another.

China warns against external interference in ties with South Korea

https://www.scmp.com/news/china/diplomacy/article/3323395/china-warns-against-external-interference-ties-south-korea?utm_source=rss_feed

Third parties should not interfere with – and were not a factor in – the relationship between China and South Korea, Beijing said on Wednesday following suggestions that Seoul would not act counter to Washington’s policy.

“The China-South Korea relationship is based on mutual interests, is not targeted at a third party, and should not be interfered with,” Chinese foreign ministry spokesman Guo Jiakun said.

“China’s policy is consistent and stable, and we hope that South Korea will work with China to promote the continuous development of the strategic partnership.”

The statement followed South Korean President Lee Jae-myung’s assessment that Seoul had to rebalance its relationship with Beijing as US-China competition intensified.

At a forum hosted by the Washington-based Centre for Strategic and International Studies on Monday, Lee said that as supply chains changed, South Korea could no longer maintain the logic of relying on the US for security and cooperating with China on the economy.

“At this point, we cannot act or make decisions that go against America’s basic policy stance,” he said.

“[South] Korea has therefore distanced itself from establishing any special relationship with China in matters related to US export controls or dealings in global supply chain.”

But Lee said Seoul was still maintaining a relationship with its neighbour “at a level focused on managing the inevitable ties that arise from this proximity”.

Nevertheless, Lee has sought to shore up relations with China by sending a special envoy, former South Korean National Assembly speaker Park Byeong-seug, to Beijing on the weekend.

On Sunday, Chinese Foreign Minister Wang Yi told Park that relations between the two countries were at a critical point and they should advance relations along “the right track”.

Analysts noted that Lee had initially appeared “China-friendly” but his remarks on Monday showed that South Korea was constrained by the US-China strategic competition.

Bi Yingda, an international relations professor at Sun Yat-sen University, said that regardless of who was in power, it was very difficult for South Korea to change the structure of a security system that had been in place for so long.

“In reality, the country has always relied on its alliance [with the US] for security and foreign policy, with the alliance serving as a central pillar for all other relationships,” Bi said.

“This structure dictates that it is very difficult for South Korea, whether under a conservative or a liberal government, to break away from the framework of US-China strategic competition and America’s strategy of containing China,” he said.

Bi noted that Seoul also hoped to leverage its alliance with Washington to expand its market share in key sectors such as shipbuilding.

“From South Korea’s own perspective, in many key sectors, the relationship with China has shifted from complementarity to competition,” Bi said.

“By binding itself to the US in shipbuilding, South Korea is not only helping the US but also using its global influence to divert orders from other developed Western countries and regions with significant US influence towards itself.”

However, Niu Xiaoping, an expert on the Korean peninsula at the Shanghai Institutes for International Studies, said Lee seemed to be appeasing US President Donald Trump to build trust.

Niu said both the parties within the US, as well as Trump, had a high level of distrust towards Lee’s government.

“Given this was their first meeting, from Lee’s perspective, he needed to make such a statement to alleviate American concerns,” Niu said.

She said Lee had been in office for fewer than 100 days so it was too soon to define his position.

“When considering if [South Korea] has lost its strategic autonomy and become fully tied to the US, I don’t think it’s completely bound to the US. Rather, it has taken a flexible approach to the current external structural constraints and pressures,” Niu said.

She added that South Korea’s leverage with the US was rooted in its semiconductor, new energy, hi-tech and shipbuilding industries, its strategic position as a US ally in Asia, and its continued economic cooperation with China.

China’s retail stock traders ride US$1 trillion bull run, eye liquidity for more gains

https://www.scmp.com/business/china-business/article/3323445/chinas-retail-stock-traders-ride-us1-trillion-bull-run-eye-liquidity-more-gains?utm_source=rss_feed

China’s individual investors are jumping on the bandwagon of a surprising stock-market rally, eyeing more gains that they believe will be buttressed by state support and potential foreign inflows.

The nation’s 240 million retail stock traders – twice the population of Japan – are cheering the breakout of the benchmark Shanghai Composite Index, which hit its highest level in a decade this month, leaving behind the trauma of two short-lived run-ups in recent years. China’s markets are now capitalised at US$12.3 trillion, having added about US$1 trillion in value over the past month, according to Bloomberg data.

Jacky Jia, a 47-year-old software engineer in Shanghai, said he reaped a return of more than 30 per cent from the stock market this year and expected a further 20 per cent through early next year. He based the argument on a pledge made by the government this year to put a floor under stocks in a shaky economy.

“The stock market is doing pretty well and it will go up further,” he said. “The economy is not in good shape. So that’s why the stock market needs to rise to create the wealth effect, which will spur consumption.”

Jia’s equity exposure is concentrated in new-consumer, consumer-electronics, software and hardware companies – the so-called high-beta stocks that tend to rise more when the broader market stabilises or stages a comeback.

The stellar rally underscores a victory for Wu Qing, who was appointed as chairman of the China Securities Regulatory Commission last year. Wu carried out a slew of market-boosting measures after taking the helm, including direct state buying of stocks, tightening supply of new stock sales and promulgating high-profile documents that envision a reshaping of the market landscape over 10 years.

These measures have effectively halted years of stock declines, driving a rapid rally as money shifted out of bonds and bank deposits to more attractive investments. With the yield on the 10-year government bond falling to a record low of 1.597 per cent and key commercial banks cutting one-year deposit rates below 1 per cent this year, stocks stand out.

“The attractiveness of term deposits and fixed income-based wealth-management products is falling with falling yields,” said Chen Gang, an analyst at Soochow Securities. “Household savings are expected to move to the stock market, bringing additional inflows.”

Howard Ji, a Shanghai-based individual investor, touted his tactic of increasing stock holdings when the Shanghai Composite Index reached 3,300. This had helped him realise a 10 per cent paper gain from his 1 million yuan (US$140,000) in investments over the past two months, he said, adding that his belief in a continuing rally was unfazed by a 1.5 per cent pullback in the index on Wednesday, the steepest over the past month.

“Some investors might choose to lock in their gains, but more view the decline as an opportunity to increase their holdings as they chase the rally,” he said. “A big turnover shows that fresh funds are flowing through the stocks.”

The Shanghai Composite Index rebounded 0.1 per cent to 3,803.15 on Thursday.

Wang Zehan is not so confident. The 23-year-old retail trader said he had become twitchy about emerging signs of bigger volatility in the market and was considering unwinding his stock positions, given that the rally was purely driven by liquidity.

“Every player knows that the economic and company fundamentals do not support the upsurge,” he said. “As some investors begin to take profits, others will feel queasy about the valuations too. I will exit in the coming two days to dodge a potential market collapse.”

Two preceding liquidity-fuelled stock rallies, spurred by the end of Covid-19 measures in 2022 and a policy blitz last year, both sputtered quickly after economic growth lost steam.

Given the unpredictable nature of the liquidity-spurred run, investors should take a selective approach, focusing on growth and high-beta firms – such as brokerages, insurance firms and hardware technology – that tend to outperform in times of abundant liquidity, according to UBS Global Wealth Management’s chief investment office.

The Swiss bank recommended monitoring three indicators to gauge changes in market sentiment: the outstanding values of margin trading as a percentage of free-float market capitalisation, policy signals from the Communist Party’s Fourth Plenary in October, and movement in bond yields.

Anthony Xu, a Shanghai-based accountant, said it was not easy to make money from stocks now, as his holdings were concentrated in banking stocks, the high-dividend companies that investors abandoned in a turnaround in sentiment. But that did not stop him from remaining bullish on the outlook, he said.

“The stock valuations are still relatively low, and depressed valuations are not what everyone wants to see,” he said. “On the state level, it also needs the stock market to boost confidence and maintain stability. Foreign investors see the opportunity as well.”

His view was echoed by Jia, the Shanghai-based software engineer.

“I have boosted my stock positions to about 70 and 80 per cent of my allocations,” Jia said. “I’m holding stocks now to wait for them to go up further.”

China-Philippine tensions mount at disputed Second Thomas Shoal as resupply deadline looms

https://www.scmp.com/news/china/diplomacy/article/3323361/china-philippine-tensions-mount-disputed-second-thomas-shoal-resupply-deadline-looms?utm_source=rss_feed

Tensions are rising again at the disputed Second Thomas Shoal following a surge in activity from Chinese and Philippine vessels at a critical time for resupplying troops stationed on a stranded warship.

The Philippines said a Chinese navy tugboat had been spotted approaching the BRP Sierra Madre, but downplayed suggestions it would try to tow the ageing ship away.

Rear Admiral Roy Vincent Trinidad, a spokesman for the Philippine Navy, said the 1,500-tonne tugboat 185 had been sighted just 5 nautical miles (9km) south of the ship on Monday, but it would “take more than a tugboat to pull out BRP Sierra Madre”.

On Tuesday morning, two Philippine coastguard ships – the BRP Melchora Aquino and the BRP Bagacay – and civilian fishery patrol vessel the BRP Francisco Dagohoy were intercepted by the Chinese coastguard ship 5304 while heading towards the shoal, according to satellite tracking data.

They turned around when intercepted near Half Moon Shoal, about 110km southeast of Second Thomas Shoal, and continued to circle the area for some time.

Chester Cabalza, founder and president of Manila-based International Development and Security Cooperation, said the two sides had been “peacefully coexisting” near Second Thomas Shoal in recent months but now heightened tensions had returned to the area.

He suggested China’s recent actions had probably been triggered by the recent collision between a destroyer and a coastguard ship chasing a Philippine vessel near Scarborough Shoal that had “forced Beijing to rethink its defence posture in the Second Thomas Shoal”.

Li Lingqun, an associate professor at Nanjing University’s school of international studies, said Manila was “increasingly anxious” and “searching for a breakthrough” as the personnel aboard the Sierra Madre had not received fresh supplies since May.

“With the resupply deadline for the grounded BRP Sierra Madre nearing its critical point, Manila may be driven to take bold, high-risk measures. At the same time, China is intensifying its law enforcement preparations in the waterway, heightening the possibility of unforeseen maritime incidents,” she said.

Second Thomas Shoal – which lies within the 200-nautical mile exclusive economic zone claimed by the Philippines – has been a major flashpoint between the two sides in recent years.

Many of these incidents stemmed from China’s efforts to block resupply missions to the small contingent of marines stationed aboard the Sierra Madre, which was deliberately grounded in 1999 to assert Manila’s claims.

One clash in June last year led to a Philippine sailor losing a thumb, after which the two sides agreed a “temporary arrangement” for resupply missions.

China said the agreement required the Philippines to provide advance notice, accept Chinese supervision on site and excluded the transfer of construction materials to the ship – all of which Manila denied.

The eighth – and most recent – resupply mission to the BRP Sierra Madre occurred in May. This week, Manila announced plans to proceed with another resupply mission.

Cabalza said Second Thomas Shoal’s strategic location within the disputed Spratly Islands meant it brought “prestige for Beijing to project power into nearby sea lanes and fisheries”.

He added that “if Manila and its allies over-militarise their response” that could provide a justification to “accelerate China’s militarisation … but if China overuses coercion, it pushes Manila to invoke its Mutual Defence Treaty with Washington”.

Lucio Pitlo, president of the Philippine Association for Chinese Studies, described recent developments as “troubling”.

“But while posturing may heighten, China may not want to upend a provisional arrangement over [Second Thomas Shoal] reached last year that facilitated unimpeded resupply to BRP Sierra Madre,” Pitlo said.

He argued that doing so “may further complicate diplomatic efforts” in any future talks between the two sides and with the Association of Southeast Asian Nations, which Manila will chair next year.

The Chinese coastguard vessel continued to shadow the Philippine ships on Tuesday, with satellite data showing that they remained near Half Moon Shoal throughout the evening.

By Wednesday afternoon the ships were detected sailing towards the Philippine island of Palawan, according to tracking website VesselFinder.

At the same time, another Chinese coastguard ship, 4302, was sailing southeast of Second Thomas Shoal, with several Chinese fishing boats nearby.

The data does not always capture every vessel since some may have turned off their transponders.

Last week, the Armed Forces of the Philippines said China had been building up its presence around Second Thomas Shoal, including at least five coastguard vessels, 11 fast boats and nine maritime militia ships.

It added that Chinese forces had conducted water cannon drills in the area, while some fast boats “have been upgraded with mounted weapons”.

“Ultimately what China wants is for the Philippines to hand them an opportunity – a pretext to move on the ship without triggering direct intervention by the US, which it likely calculates is preoccupied with other theatres from Europe to the Middle East to South America,” Ray Powell, director of the Sealight Initiative at Stanford University, wrote in an article published online this week.

Zheng Zhihua, an associate professor specialising in maritime affairs at Shanghai Jiao Tong University, said the Philippine deployment of the Melchora Aquino, one of its largest and most modern coastguard vessels, was “a worrying sign” but he did not expect tensions to boil over to the degree they did last year.

“Due to the proximity of China’s large-scale military base on Mischief Reef to Second Thomas Shoal, Manila has little chance of gaining the upper hand at Second Thomas Shoal,” Zheng said.

Additional reporting by Meredith Chen

Direct India-China flights to take off again, opening door for travel boom

https://www.scmp.com/week-asia/lifestyle-culture/article/3323400/direct-india-china-flights-take-again-opening-door-travel-boom?utm_source=rss_feed

India and China’s planned resumption of direct flights after five years is expected to revive tourism and business travel between the two regional powers and potentially boost neighbouring economies, raising hopes of a thaw in relations after years of economic and security friction.

Flights between the two countries were halted during the pandemic in 2020 and, except for a few repatriation flights, never resumed even after New Delhi and Beijing lifted Covid-19 travel restrictions.

Relations between the two countries hit a nadir following a border clash between troops in June 2020 in the Galwan Valley, but in recent months there have been signs of a rapprochement.

India resumed issuing visas to Chinese citizens last month, while China recently reopened access for Indian pilgrims to perform the Kailash Mansarovar Yatra trek.

The journey is regarded as offering salvation by Hindus, and is also considered important in Buddhism and Jainism.

“The resumption of direct flights between India and China is expected to significantly boost tourism potential between the two countries,” Jyoti Mayal, chairwoman of the Tourism & Hospitality Skill Council and former president of Travel Agents Association of India, told This Week in Asia.

“This move is likely to lift business travel and business events, benefiting both countries’ economies.”

Mayal said direct flights between the two countries would slash travel time and costs, making it easier for tourists to travel between India and China.

“With Chinese tourists historically being the biggest spenders and Indian tourists emerging as a significant source market, the potential for growth and cooperation between the two countries is substantial,” she said.

Analysts note that shifting global trade winds due to steep US tariffs have given ongoing efforts to mend ties between the Asian neighbours a fresh impetus.

According to local media reports, flight services could resume within a month and an announcement specifying the details is expected during Indian Prime Minister Narendra Modi’s visit to Tianjin at the end of the month to attend the Shanghai Cooperation Organisation summit.

Both countries are also expected to update an air services agreement. It is unclear whether resumption of flights will be covered by an existing pact or a revised one.

“Updating the air services agreement between India and China can help finalise the framework for resuming flights and enhance cooperation between the two countries,” Mayal said.

The details of the agreement will matter for passenger volumes, analysts note.

“We’ll need to see which city pairs are initially included, and the frequency of flights. It’s likely that business and inter-governmental travel will account for much of the initial passenger traffic,” said Gary Bowerman, co-founder of consultancy High-Yield Tourism and founder of weekly industry newsletter Asia Travel Re:Set.

Travellers from both countries would also be keen to “visit and discover more about the ‘other’ Asian superpower”, Bowerman said, noting that there was interest among Chinese tourists to learn about the Chinese cultural heritage in Kolkata.

The eastern Indian city boasts of India’s only Chinatown, which was established by Chinese immigrants in the 18th century and is now a unique blend of Indo-Chinese culture.

Chinese carriers including China Southern Airlines, China Eastern Airlines and Air China used to operate regular flights to India, while Indian carriers Air India and SpiceJet had services to China before the suspension.

Industry executives say all the flights are likely to resume, with a strong possibility of new flights being added gradually.

Tourism flows, however, would develop in phases and depend on factors such as flight availability, cost and related travel products customised for each visitor market, Bowerman said.

“The group travel scene will take time to develop,” he added.

The planned resumption of flights is also expected to open up more opportunities for collaboration in both countries.

While China has been the world’s largest outbound tourism market, Indian travellers have emerged as a significant and growing global market, driven by rising incomes, a youthful population and increased connectivity.

To attract both markets, Mayal called for “collaborative marketing initiatives” between India and China that would highlight the “unique attractions and experiences each country has to offer”.

Bowerman predicted greater coordination between India and China in efforts to open up their respective economies, noting that travel and tourism were considered “an important part of national branding” in both countries.

Increased cooperation between India and China could also, over time, facilitate closer economic integration across the Asia-Pacific region, industry players say.

“In the Asia-Pacific region, India and China can work together to promote regional tourism, sharing best practices and expertise to overcome common challenges, such as the impact of US tariffs,” Mayal said.

Subhash Goyal, chairman of the aviation and tourism committee at the Indian Chamber of Commerce and Industry, said he expected a surge in tourism and trade.

“We are two very large economies. If we open up trade between the two countries, all Asian nations will benefit,” he said.

Chinese envoy warns against sowing ‘fear and hostility’ as US plans visa revamp

https://www.scmp.com/news/china/diplomacy/article/3323416/chinese-envoy-warns-against-sowing-fear-and-hostility-us-plans-visa-revamp?utm_source=rss_feed

Beijing’s top diplomat in Washington on Wednesday warned against undermining of people-to-people relations just hours after the US government proposed a sweeping revamp of visa rules for foreign students, scholars and media citing national security risks.

“Going forward, we need to bring our people closer, rather than sow fear and hostility,” China’s ambassador to the US Xie Feng said during an event commemorating Chinese and American soldiers who fought together for Allied forces during World War II.

“We need to encourage and facilitate travels and people-to-people exchanges, rather than erect barriers,” Feng added.

“We need to promote win-win cooperation, make the list of cooperation longer … rather than seek decoupling and turn back the will of history.”

A new US Department of Homeland Security proposed rule on Wednesday sought to cap mainland Chinese journalists’ stays in the US at 90 days, with a 240-day limit for media from the special administrative regions of Hong Kong and Macau, and other countries. Visa holders may apply for extensions.

For all international students and scholars on F and J visas, the visa periods would be no longer than four years, the proposed rule said, adding that the significant increase in entries on F, J and I visas posed “a challenge to the department’s ability to monitor and oversee these non-immigrants while they are in the US”.

The document cited examples of “abuse” and “fraud” by Chinese nationals, including the recent arrest of a Chinese scholar at the University of Michigan on charges of trying to smuggle a noxious fungus into the US.

The scholar “allegedly received Chinese government funding for her work on this pathogen and is a loyal member of the Chinese Communist Party”, the DHS said in the proposed rule.

The rule was earlier introduced by the previous Donald Trump administration in 2020, but it was withdrawn by the administration of then-president Joe Biden in 2021. The public will have 30 days to comment on the measure.

Two people familiar with the matter said China was seeking clarity on how the proposed rule would affect its students, scholars and journalists, amid ongoing concerns over the “harassment” of Chinese nationals by US immigration officers.

According to the Chinese side, many Chinese students coming to study in the US have faced questions about their political allegiance at US Customs.

Since Trump’s first term from 2017 to 2021, the US has moved to limit academic ties with China over concerns that these educational links could give Beijing a technological advantage.

Feng in his speech on Wednesday urged that the two sides support “people in continuing to cultivate goodwill and interact and collaborate with each other”.

The development comes a day after Trump told reporters that it was an “honour” to host Chinese students and that he planned to admit 600,000 new Chinese students.

A survey by the Institute of International Education, sponsored by the US State Department, found that fewer than 300,000 Chinese students were studying in the US during the 2023-24 school year. This marked a sharp decline from a peak of 370,000 in 2019, during Trump’s first term.

India has now overtaken China as the top source of international students in the United States. The number of Indian students reached 331,602 in the same period.

After returning to office in January, Trump has taken a tough stance on both legal and illegal immigration. Last week, the State Department said over 6,000 foreign students have had their visas revoked since he took office. It also said it was reviewing more than 55 million visa holders for possible deportation based on overstaying, criminal activity or links to terrorism.

In May, Secretary of State Marco Rubio said the US would begin “aggressively” revoking visas for Chinese students in sensitive fields.

By June, the US and China reached a mini-deal. China agreed to resume rare earth exports, and in return, the US cut some tariffs – which had reached 145 per cent in April – and allowed Chinese students access to American universities.

A Chinese trade delegation, led by the country’s top trade negotiator Li Chenggang, is arriving in Washington late on Wednesday to meet their US counterparts, according to a person familiar with the issue. The delegation, which will hold talks on Thursday and Friday, is not expected to take up the issue of visas. Both sides are aiming to reach a trade agreement by November.

Former China central bank governor urges caution amid stablecoin frenzy

https://www.scmp.com/economy/china-economy/article/3323414/former-china-central-bank-governor-urges-caution-amid-stablecoin-frenzy?utm_source=rss_feed

Former Chinese central bank governor Zhou Xiaochuan has urged a more measured tone amid a global surge of interest in stablecoins, calling for a “multidimensional assessment” of their genuine utility and the systemic risks they may pose.

The United States and Hong Kong are rolling out regulatory frameworks for the asset, and speculation has been growing about the likelihood of Beijing following suit by introducing yuan-backed stablecoins in a bid to further internationalise its currency.

“We need to be vigilant against the risk of stablecoins being excessively used for asset speculation, as misdirection could trigger fraud and instability in the financial system,” Zhou said at a closed-door China Finance 40 Forum (CF40) seminar last month, according to an article published on Wednesday by the think tank, whose membership includes senior Chinese regulatory officials and financial experts.

He warned that some industry players could leverage the hype around stablecoins to boost their valuations, focusing on cashing out rather than the profitability or sustainability of the stablecoin business, which would be “detrimental to the healthy development of the financial system” and could lead to the accumulation of “systemic risks”.

The article, which compiled Zhou’s comments at the seminar, said that some current discussions on stablecoins were based on a single perspective, and there needed to be a “multidimensional, multi-perspective assessment” instead.

Stablecoins, digital currencies pegged to fiat currencies or reserve assets such as gold, have become a hot topic in global economic debate. They aim to combine the efficiency of digital assets with the reliability of traditional money and are part of the broader trend of tokenisation in the financial sector.

In the article, Zhou urged a “careful assessment of the true demand of tokenisation as a technological foundation”, noting that centrally managed account-based systems have demonstrated strong applicability, with insufficient evidence for making the case that they should be entirely replaced with fully tokenised solutions.

“Although many believe stablecoins will reshape the payments system, in reality, there is little room to cut costs in the current system, particularly in retail payments,” he added.

But he also noted regional differences, comparing China’s already highly efficient and low-cost retail payment system, in which digital forms of payment play a key role, with the American system, which has long relied on credit cards and may still have room to reduce costs.

In July, the US set a regulatory framework for dollar stablecoins that US President Donald Trump signed into law. Hong Kong’s Stablecoin Ordinance took effect on August 1.

Eric Trump, the second son of Donald Trump, is attending the two-day Bitcoin Asia 2025 conference, beginning in Hong Kong on Thursday, as a headline speaker. The event is the regional edition of the Bitcoin Conference, one of the world’s largest cryptocurrency events.

“Stablecoin issuers … can in effect ‘print money’ through their coins, but without a deep understanding of monetary policy, macroeconomic regulation, or public infrastructure responsibilities, they may lack sufficient discipline, potentially leading to uncontrolled issuance, high leverage and instability,” Zhou cautioned.

He flagged major concerns from central banks: that issuers may mint more coins than they hold in reserve, or that circulation could swell to exceed the actual backing, warning that while US and Hong Kong legislation had started to address such risks, controls remained “noticeably insufficient”.

On the potential risk of price manipulation, Zhou added that existing regulatory frameworks “have yet to prove reassuring”.

He urged researchers and practitioners to take a careful, multi-angle look at stablecoins and their practical uses, while “avoiding the use of loose concepts, data, or one-sided thinking”.

“Only by weighing all key dimensions comprehensively can the market’s direction be better guided,” Zhou said.

At the Lujiazui Forum in Shanghai in June, Zhou, the architect of many of China’s early financial reforms, noted that US dollar-backed stablecoins could accelerate the “dollarisation” of the international monetary system.

Currently, more than 99 per cent are backed by the US dollar or dollar-denominated assets – far outstripping US currency’s roughly 50 per cent share in global payments and 58 per cent share in global foreign exchange reserves.

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Japan warns AI videos mocking wartime emperor risk further straining China ties

https://www.scmp.com/week-asia/politics/article/3323347/japan-warns-ai-videos-mocking-wartime-emperor-risk-further-straining-china-ties?utm_source=rss_feed

Japan has called on the Chinese government to take steps against a surge of artificial-intelligence videos on Chinese social media mocking Emperor Hirohito, the wartime monarch, warning that the clips risk further straining already fraught bilateral ties.

There has been a sharp increase in video clips released on Chinese social media in the run-up to a military parade scheduled for September 3 to mark 80 years since Japan’s surrender ended World War II.

In one video, the wartime emperor transforms into a uniformed schoolgirl, while in another he is depicted as a dog under the title, “Valuable footage of General MacArthur training his dog. I am a big Japanese dog”. Douglas MacArthur was the commander of the Allied occupation forces after Tokyo’s surrender.

On Tuesday, Chief Cabinet Secretary Yoshimasa Hayashi described the short clips as “inappropriate” and confirmed that representations had been made to Beijing through diplomatic channels for measures to delete the footage.

“The videos are inappropriate,” Hayashi told a press conference in Tokyo. “Considering their negative impact on Japan-China relations, we have requested quick and appropriate measures.”

Guo Jiakun, a spokesman for the Chinese foreign ministry, was quoted by Kyodo News as saying that Beijing was “still checking information” on the matter.

Japan had no choice but to protest, said Ryo Hinata-Yamaguchi, an associate professor in Tokyo International University’s Institute for International Strategy, although China might choose not to act on that request, or might not be able to.

“The big question is if it can, for several reasons. Nationalism goes into overdrive in China at this time of the year, because it is the anniversary of Japan’s defeat, but also because it is the anniversary of the founding of the republic on October 1,” he told This Week in Asia.

“So the nationalistic voltage is up high and the government in Beijing is not going to want to intervene to tell people to tone things down because it would look like they were being soft on Japan.”

The other challenge for Chinese authorities will be to track down the people who created the video clips, who may not even be in China, but who can easily put new footage up if previous ones are deleted.

“It is a question of both political will and technical abilities,” he said.

By the same token, Tokyo was obliged to make an official protest – even if such a move risked attracting more attention to the clips – as failing to do so might lead to accusations that the government was not standing up for the late Emperor Showa, the imperial family and the nation in general, Hinata-Yamaguchi said.

The people of Japan generally hold their monarchy in high esteem.

Online criticism has been fierce.

“Despite the spread of videos insulting Emperor Showa on Chinese social media, the Chinese government has left the matter unattended, stating that it is ‘investigating’ the matter,” said a message linked to a Kyodo News story.

“This extreme double standard – thoroughly censoring and punishing criticism of its own leaders while tolerating insults against other countries – clearly illustrates the distortions of Chinese society.”

Another added, “Can’t the government take a tougher stance against the Chinese Communist Party? I hope they stop ‘turning a blind eye’ and saying ‘it’s regrettable’.”

Hinata-Yamaguchi anticipates that more similar videos will emerge in the coming days, with this year’s 80th anniversary of Japan’s defeat also marked by the release of a number of feature films depicting China’s resistance to imperial Japan’s invasion and, ultimately, its defeat. One of the newest – and most popular – releases focuses on the 1937 Nanking massacre, which took place in a city now called Nanjing.

Bilateral relations, which have long been worn, have been further strained in recent days by new protests from Japan over a structure sited in the East China Sea despite a 2008 agreement between the two governments on joint development of natural resources.

China has also lodged a complaint after it transpired that Japan has been urging allies not to send delegations to the military parade in Beijing on September 3.

Guo said nations that faced history sincerely “will not have misgivings” about the anniversary events or raise objections.

He called on Japan to “make a clean break with militarism, stick to the path of peaceful development and respect the sentiments of people from China and other victimised countries” to “earn the trust of Asian neighbours and the international community”.

Chinese man jailed for breaking into woman’s home, drawing her blood for ‘stress relief’

https://www.scmp.com/news/people-culture/trending-china/article/3322638/chinese-man-jailed-breaking-womans-home-drawing-her-blood-stress-relief?utm_source=rss_feed

A Chinese man who broke into a woman’s home, sedated her and drew her blood has claimed he did it to relieve stress.

The home invader has been jailed for two years, and his bizarre actions have sparked outrage online.

The disturbing incident took place in the early hours of January 1, 2024, when the man, surnamed Li, broke into the home of a woman called Yu in Yangzhou, Jiangsu province, southeastern China.

At the time, Yu was asleep in her bedroom while her husband was out.

Li gained entry by simply pushing the door open.

He found Yu and knocked her out using a black cloth soaked in anaesthetics, then drew blood from her arm.

The horrifying act was interrupted when Yu’s husband returned home unexpectedly.

Her husband reportedly struck Li with a kettle, prompting the intruder to flee.

After regaining consciousness, Yu said: “I found a tourniquet on the bed, the kind used in hospitals for drawing blood. I also felt pain in my left arm. There was a needle mark and bloodstains.”

According to a forensic report from the Yangzhou Public Security Bureau’s Forensic Evidence Identification Centre, traces of the anaesthetics sevoflurane and isoflurane were found on the black cloth left behind by Li.

A neighbour surnamed Xu said that following the incident, many scared residents in the area installed surveillance cameras.

In court, Li claimed his actions were intended to relieve his stress.

“I just enjoy sneaking into other people’s homes. It gives me a thrill that helps relieve my pressure,” he said.

According to court documents, Li has previous convictions for theft, rape and unlawful entry. He has also received administrative detention for invasion of privacy.

Li was found guilty of unlawful intrusion into a residence.

The case, reported by Red Star News, sparked outrage online.

One person said: “This is really terrifying. Where did he get the anaesthetic? How did he even get into the place? The more you think about his crime, the more horrifying it becomes.”

While another wrote: “His actions were clearly premeditated. How is that not considered intentional harm? Did the victim suffer no physical or psychological trauma? Was his behaviour not malicious enough?

“This man also has a criminal history of theft and rape; were these all taken into account before sentencing him to just two years? No wonder he had so many opportunities to reoffend. I am speechless.”

80 years on from WWII, has China become a main guarantor of the post-war order?

https://www.scmp.com/news/china/diplomacy/article/3323368/80-years-wwii-has-china-become-main-guarantor-post-war-order?utm_source=rss_feed

Ahead of the 80th anniversary of Victory Day, marking the end of the Sino-Japanese war and the global fight against fascism, we look at the profound changes of the post-war period and how they continue to affect China’s place in the world. Part one of this series examines how the Chinese sacrifices of the conflict underpin Beijing’s determination to uphold global norms.

An estimated 35 million Chinese soldiers and civilians died as part of their country’s sacrifice as a key Allied power, yet 80 years later China finds itself not only a forgotten ally but also recast as an adversary.

When President Xi Jinping takes to the rostrum overlooking Tiananmen Square for next week’s military parade marking the 80th anniversary of victory in the Sino-Japanese war and World War II’s global defeat of fascism, China’s sacrifices will be remembered.

The spectacle is also likely to serve as a platform for Xi to assert China’s role as a defender of the post-war order, at a time when the country is increasingly painted – alongside Russia – as a revisionist power intent on upending the global system.

A communique from last year’s Nato summit declared that “China’s stated ambitions and coercive policies continue to challenge our interests, security, and values” and accused Beijing of seeking to reshape the rules-based international order.

The US-led Western bloc’s narrative of China as a threat has been gaining traction over several years. For example, on several occasions former national security adviser Jake Sullivan described the Group of Seven as the “steering committee of the free world”.

Sullivan’s implication – that nations like China, outside the Western-led framework of the G7, were inherently destabilising – and similar statements frame China’s growing global influence as a direct challenge to the Western-dominated security architecture.

It is a charge vehemently disputed by Beijing, which points out China’s consistent upholding of post-war institutions and norms in the face of rising geopolitical tensions and its growing competition with the United States.

“We must resolutely defend the post-war world order,” Xi wrote in a signed article published by Russian state media ahead of his visit to Moscow in May for the 80th anniversary of the Soviet Union’s victory over Nazi Germany.

“As the international situation is becoming more turbulent, we should safeguard the authority of the United Nations, defend the UN-centred international system … and continuously push ahead with multi-polarity and inclusive economic globalisation.”

Xi recalled that “80 years ago, the forces of justice worldwide – including China and the Soviet Union – fought heroically side by side, united in their resolve, and defeated the seemingly invincible fascist powers”.

“Today, 80 years later, unilateralism, hegemony, and domineering bullying are causing profound harm. Humanity once again stands at a crossroads: unity or division, dialogue or confrontation, win-win cooperation or zero-sum rivalry,” he wrote.

Contrary to popular narratives – often amplified by Hollywood – the post-war order was not shaped by the US and its Western allies alone.

The Soviet Union played a decisive role, liberating much of Eastern Europe and bearing the brunt of the Nazi war machine, with more than 20 million deaths. China, too, was instrumental, pinning down over 500,000 Japanese troops in a gruelling resistance.

Yet, this history is fading, with some European leaders overlooking the Soviet sacrifices and crediting the US alone for their liberation.

For example, when US President Donald Trump told German Chancellor Friedrich Merz – at their first in-person meeting in June – that the D-Day landings were “not a great day” for Germany, neither leader noted Moscow’s contribution.

“In the long run, Mr President, this was the liberation of my country from Nazi dictatorship,” Merz said. “We know what we owe you,” he continued, adding that the US was in a “strong position” to play a similar role in bringing an end to the Ukraine war.

Trump mused about Moscow’s role in World War II during a news conference – also in June – when he observed that Russian President Vladimir Putin had reminded him that the Russians had been US allies in the conflict.

So why did everyone now hate Russia but love Germany and Japan, who were on the enemy side in the second world war, Trump wondered.

China’s contributions are even less acknowledged, reduced to footnotes in global historical memory despite its role as an ally of the US and the British Empire from just after Pearl Harbour in 1941 to the Japanese surrender in 1945.

It has also been largely forgotten that China was the first country to be invaded in what would go on to become the second world war, with British historian Rana Mitter one of the first Western scholars to consider the full implications of the Chinese contribution.

According to Mitter – in his 2013 book Forgotten Ally: China’s World War – if the Chinese surrendered in 1938, it could have put Japan in control of the country for a generation or more.

Japanese forces might also have been able to turn towards the USSR, Southeast Asia, or even British India, argued Mitter, now a US-Asia relations professor at the Harvard Kennedy School.

Beijing continues to preserve the memory of the joint Allied efforts, including US contributions, that helped China against the Japanese invaders. Xi has written to descendants of American pilots and other veterans, emphasising gratitude for their role.

Despite current tensions in bilateral ties, sources have told the South China Morning Post that China has invited descendants of the US pilots known as the Flying Tigers to Beijing for next week’s 80th anniversary commemoration.

Beijing has increasingly looked to the legacy of the Flying Tigers and other examples of historical cooperation as a way of improving relations – particularly people-to-people exchanges, which have largely stalled since the Covid-19 pandemic.

In contrast, the US has not highlighted its wartime partnership with China, instead aligning more closely with Japan – a former Axis power – in its modern security strategy.

The world order established after World War II, as outlined in the United Nations Charter, was built on collective safeguards, with the UN Security Council – where China holds a permanent seat – designed to ensure global stability through multilateral cooperation.

However, the US and its allies often refer to a different “rules-based order”, rooted in the post-Cold War era and characterised by Western-dominated institutions like Nato and the G7. It prioritises Western security interests, often labelling non-aligned nations as threats.

Nato was formed to counter the Soviet Union, but has continued to expand eastward, even after the collapse of the USSR – including with last year’s summit reaffirming its mission to counter “systemic challenges” posed by China.

For China and much of the Global South, Nato’s expansion represents a departure from the UN-centric system, replacing it with a framework that demands alignment with Western values.

In Asia, the post-war order is defined not only by collective security but also by the seismic shift of decolonisation. The war’s end catalysed independence from Western colonial rule for most Asian nations, among them India, Indonesia, Malaysia and Vietnam.

However, the ambiguous borders left behind by the colonial powers sowed the seeds for modern disputes, such as those in the South China Sea – disagreements that Beijing argues should be resolved peacefully by Asian nations, without external interference.

China’s Global Security Initiative, launched in 2022, emphasises this cornerstone of the post-war order, advocating for regional solutions free from “outside powers using divide-and-rule tactics” – a veiled critique of US involvement in Asian disputes.

While the US has undermined globalisation by launching tariff wars and downplaying the roles of international organisations, China’s actions have reflected its ambition to reshape global governance.

Beijing’s brokering of the Iran-Saudi Arabia detente in 2023 showcased its diplomatic clout, restoring relations between the Middle Eastern rivals after seven years of severed ties.

China’s Belt and Road Initiative has invested in infrastructure across around 150 countries since its launch in 2013, while institutions like the Asian Infrastructure Investment Bank and New Development Bank offer alternatives to Western-dominated financial systems.

These moves, coupled with increased contributions to the United Nations and active participation in the World Trade Organization, have underscored China’s commitment to multilateralism.

But the tension with the West, fuelled by competing visions of global governance, highlights a deeper debate: is China revising the international system to reflect its rise, or is the West redefining history to maintain its dominance?

According to Sourabh Gupta, from the Institute for China-America Studies in Washington, Xi’s Victory Day speech is likely to frame China as a steward of the original post-war order, not its disruptor.

He expects Xi to elaborate on China’s wartime role, which included tying down the adversary at immense cost, never flinching from its responsibilities as part of the collective resistance to the Axis powers.

“Via this elaboration of China’s wartime role, [Xi] will draw a link to China’s continuing responsible stakeholdership and burden-sharing role in international politics today,” Gupta said.

“China has neither the will nor the inclination to recreate the international system anew. And why should it? It owes its meteoric rise to the open, capitalist-led rules-based order, even if there are geostrategic elements it disagrees with.

“Rather, China seeks to revise and renew the system from within using incremental status quo-ist means that are framed within the rules and norms of the existing international system, broadly conceived.”

Political economist Zheng Yongnian from the Chinese University of Hong Kong, Shenzhen, said that while China was playing an increasingly important role in international affairs, as an atheist country it was an “outsider” to many.

According to Zheng, who is also a policy adviser to Beijing, “we must admit we don’t understand international relations and many diplomatic behaviours of the West and other countries of religious civilisations”.

“China is unable to reach an accurate judgment of the international political landscape until it admits [the lack of comprehension],” he wrote in the university’s Greater Bay Review published on August 15.

As an example, Zheng pointed out that many Chinese officials and experts were puzzled about why Europe favoured the US over China, even when it is threatened by Washington with higher tariffs and left out of Trump’s meeting with Putin on the Ukraine crisis.

Mitter said: “People, for good reasons, look a lot at the geopolitical, but they don’t look at the geoeconomic. Probably China is going to double down and really stress the elements of global geoeconomics.”

While the convertibility of the US dollar was “going to be ... difficult to compete with”, China would probably focus on strengthening its prowess in energy supply, given Beijing’s priority of political control over its currency and financial matters, he said.

“China is going to portray itself as the major global power for energy supply, particularly green tech and post fossil fuel,” he said.

“And it’s going to try and portray itself as being a country that, in terms of international trade and finance, provides a more sustainable model than the United States.”

Additional reporting by Sylvie Zhuang