China celebrates Deng Xiaoping, but how has ‘true heir’ Xi Jinping taken up the reins?;China-focused ‘Red Ventures’ pilot brings tech gaps message for next US president: analyst
China moves to ‘eliminate’ money worship, undesirable trends in financial sector
Welcome to this issue of The China Brief. Today is September 2, 2024. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
China celebrates Deng Xiaoping, but how has ‘true heir’ Xi Jinping taken up the reins?
South China Morning Post
The article discusses the commemoration of Deng Xiaoping's 120th birthday in China, highlighting the significance of such events in Chinese tradition. Since Deng's death in 1997, major celebrations have occurred every decade, with high-profile gatherings and speeches from leading figures, including former presidents Hu Jintao and Xi Jinping. This year's commemoration attracted heightened attention due to Xi's precedent-breaking third term and ongoing debates regarding whether his policies align with or diverge from Deng's legacy.
While Xi emphasizes continuity with Deng's vision and promotes ideas like "national rejuvenation," critics argue that his focus on state enterprises and assertive foreign policy reflects a departure from Deng’s market-oriented approach. Observers note a shift in public sentiment, with lower confidence in the economy compared to Deng's era of optimism. The article points out Xi's efforts to redefine Deng's legacy to justify his governance style, which contrasts with Deng's delegation of power. As China navigates current challenges, the interpretation of Deng's legacy remains pivotal for Xi's leadership narrative.
https://www.scmp.com/economy/china-economy/article/3276794/china-celebrates-deng-xiaoping-how-has-true-heir-xi-jinping-taken-reins?utm_source=rss_feed
China-focused ‘Red Ventures’ pilot brings tech gaps message for next US president: analyst
South China Morning Post
Washington's "Red Ventures" program aims to address economic security concerns and enhance technological innovation amid U.S.-China competition. Launched by the NSA, it seeks to identify gaps in U.S. technology compared to China. This initiative follows U.S. National Security Adviser Jake Sullivan's visit to China, where economic and technological issues were discussed. Experts suggest the program signals ongoing U.S. efforts to combat China's industrial advancements, despite reassurances to Beijing. As the U.S. prepares for presidential elections, there are hopes that current initiatives will persist under future administrations. However, some analysts argue that the perceived tech gaps are overstated.
https://www.scmp.com/news/china/diplomacy/article/3276773/china-focused-red-ventures-pilot-brings-tech-gaps-message-next-us-president-analyst?utm_source=rss_feed
China moves to ‘eliminate’ money worship, undesirable trends in financial sector
South China Morning Post
China's financial regulators, led by the China Securities Regulatory Commission (CSRC), are pushing to eliminate undesirable trends in the securities, funds, and futures industries, such as money worship, extravagance, and excessive speculation. During the launch of the 2024 financial education promotion month, CSRC Vice-Chairman Chen Huaping emphasized the need for industry professionals to uphold ethical standards and foster integrity, professionalism, and responsibility to regain investors' trust. This initiative comes amid a significant reshuffling in China's financial sector due to slowing economic growth, a persistent property downturn, and debt risks, leading to layoffs and pay cuts. Major securities firms have notably reduced their workforce, with the largest firms cutting thousands of positions in the first half of 2024. The CSRC aims to promote a culture of honesty, integrity, and compliance as part of broader efforts to mitigate financial risks and stabilize the economy.
https://www.scmp.com/economy/china-economy/article/3276843/china-moves-eliminate-undesirable-trends-financial-sector?utm_source=rss_feed
China’s troubled solar sector may be nearing a turning point
South China Morning Post
China's solar industry is experiencing significant financial losses, with major companies, including Longi Green Energy, reporting a combined US$2 billion in losses due to overcapacity and plummeting prices. As trade tensions with the US and Europe rise, smaller firms face restructuring, while some larger companies plan to increase wafer prices to combat low-price competition. Analysts predict factory closures may help rebalance the market, but a meaningful recovery is not expected until 2025. The industry, crucial for global solar production, is struggling to align supply with demand amid growing trade challenges.
https://www.scmp.com/business/china-business/article/3276853/chinas-troubled-solar-sector-may-be-nearing-turning-point?utm_source=rss_feed
South Korea wants U.S. ‘carrots’ for embracing China chip curbs
Japan Times
South Korea is seeking greater flexibility and incentives from the United States to support its compliance with potential additional restrictions on advanced semiconductor exports to China. Trade Minister Cheong Inkyo emphasized the need for "carrots" for countries and companies that are trying to comply with U.S. policies in good faith, suggesting that such incentives would facilitate the acceptance of U.S. policies. South Korea is one of the key semiconductor nations facing the possibility of a U.S. ban on the export of advanced chips, including those used for artificial intelligence training, to China.
https://www.japantimes.co.jp/business/2024/09/02/tech/south-korea-us-china-chip/
Taiwan court orders release of ex-Taipei mayor arrested in corruption probe
Al Jazeera
A Taiwanese court has ordered the release of former Taipei mayor and presidential candidate Ko Wen-je, citing insufficient evidence for his detention related to a corruption scandal. The Taipei District Court determined that prosecutors did not meet the threshold to suggest that Ko likely committed a crime. Ko was arrested as part of an investigation involving the redevelopment of the Core Pacific City shopping center. He has denied any wrongdoing and claimed there is no evidence linking him to the scandal. Ko, a trained surgeon who entered politics in 2014, founded the Taiwan People’s Party (TPP) to challenge the dominance of the Democratic Progressive Party (DPP) and the Kuomintang (KMT). Despite the TPP having limited legislative representation, it holds significant influence. Ko, who has a strong youth following, is seen as a potential candidate for the 2028 elections but faces challenges due to a separate campaign funding scandal. He has announced a temporary leave of absence from TPP leadership to address this issue.
https://www.aljazeera.com/news/2024/9/2/taiwan-court-orders-release-of-ex-taipei-mayor-arrested-in-corruption-probe
China warns Japan of retaliation over potential new chip curbs
Japan Times
China has warned Japan of significant economic retaliation if it imposes further restrictions on the sale and servicing of chipmaking equipment to Chinese companies. Chinese officials have expressed these concerns in meetings with Japanese counterparts. Japan is particularly worried that China could restrict its access to critical minerals necessary for automotive production, a concern raised by Toyota Motor, a key player in Japan's chip policy. Toyota's involvement in a new chip campus with Taiwan Semiconductor Manufacturing Company highlights its stake in these issues, making its apprehensions a priority for Japanese officials, along with those of the semiconductor equipment maker Tokyo Electron.
https://www.japantimes.co.jp/business/2024/09/02/economy/china-japan-chip-retaliation/
UBS bullish on China, as profit growth, buy-backs give MSCI Index a 10% upside
South China Morning Post
UBS Group predicts the MSCI China Index could rise by 10% in the next three to six months, driven by a 7% profit growth in the second half and increased shareholder returns through buy-backs and improved governance. Despite a bleak economic outlook for China, UBS emphasizes that stock market performance is more influenced by return-on-equity (ROE) and profit growth than GDP growth. While many investment firms remain bearish on Chinese stocks, UBS highlights a potential turning point in ROE for emerging industries, supported by rising stock repurchases and dividend payouts.
https://www.scmp.com/business/china-business/article/3276852/ubs-turns-bullish-china-profit-growth-buy-backs-give-msci-index-10-upside?utm_source=rss_feed
China GDP hiccup would have long-term aftershocks
Reuters BreakingViews
China's growth target for this year is set at "around 5%", but it faces challenges due to a significant property market slump. While an initial growth rate of 5.3% in the first quarter led to optimistic forecasts from banks like UBS, recent revisions have dropped expectations back to 4.6%. The term "around" in the growth target allows for flexibility, meaning a performance above 4.5% could still be deemed successful. However, to meet the long-term goal of doubling the economy by 2035, China needs to consistently grow at about 4.8% annually. A slowdown could trigger new policies to address economic concerns and prevent shortfalls from becoming a trend.
https://www.breakingviews.com/considered-view/china-gdp-hiccup-would-have-long-term-aftershocks/
China faces calls for stimulus as growth engines stall amid property woes
Japan Times
China's economic growth is facing significant challenges, with key indicators showing a continued decline. Factory activity has contracted for four consecutive months, and the property market remains weak, exemplified by China Vanke's first half-year loss in over 20 years. The government has struggled to address the property downturn and is now contending with increased protectionism and a fragile global economy affecting exports. Efforts to stimulate domestic demand have been largely ineffective, prompting economists to urge for further government intervention to help meet growth targets.
https://www.japantimes.co.jp/business/2024/09/02/economy/china-growth-urgency-stimulus/
Chinese tycoons are using stock to borrow from private lenders as bank liquidity dries up
South China Morning Post
Affluent individuals in Hong Kong and mainland China are increasingly borrowing from private lenders using stocks as collateral due to liquidity challenges and cautious traditional banks. The private credit market in the Asia-Pacific region grew to at least US$124 billion in 2023, driven by distressed developers and wealthy families. Interest rates are expected to fall, encouraging further borrowing against stocks. Wealthy clients are also shifting investments towards equities, with family offices in the region reporting a 40% allocation to stocks. Private banks emphasize careful financing assessment and the importance of financial resilience for clients.
https://www.scmp.com/business/banking-finance/article/3276793/chinese-tycoons-are-using-stock-borrow-private-lenders-bank-liquidity-dries?utm_source=rss_feed
How China’s internet police went from targeting bloggers to their followers
Guardian
Duan, a university student in China, used a VPN to access the blocked social media platform Discord, where he joined a politically engaged community discussing various ideologies. This group, inspired by vlogger Yang Minghao, participated in debates and mock elections. However, in July, Duan and other members were interrogated by police about their online activities and connections to Yang, who has since disappeared from social media. This incident highlights the increasing severity of China's censorship regime, where even private discussions can lead to police scrutiny. Human Rights Watch noted that such extensive questioning of followers is unprecedented. The Chinese government continues to crack down on online dissent, with recent measures targeting users who engage with politically sensitive content. Activists and influencers, both within China and abroad, have faced harassment, urging followers to protect their identities. The state’s focus on online surveillance and censorship has intensified, as officials designate 2024 for a campaign against "online rumors." Despite the risks, a shared set of values among dissenters persists, indicating a growing resistance to the regime's oppressive tactics.
https://www.theguardian.com/world/article/2024/sep/02/how-chinas-internet-police-went-from-targeting-bloggers-to-their-followers
French economist Marc Uzan on how China can help reshape the global financial system
South China Morning Post
Marc Uzan, a French economist and founder of the Reinventing Bretton Woods Committee, discusses the need to restructure the global financial system established by the Bretton Woods conference in 1944. Uzan highlights the significant transformations in the world economy since then, including the shift from fixed exchange rates to a mixed system of floating currencies and the rise of emerging economies like China. He emphasizes that the spirit of international cooperation must be preserved, particularly in an increasingly fragmented global landscape marked by unilateralism and confrontation.
The interview addresses the evolving role of China in the global economy, noting its status as the world's second-largest economy and its significant influence on global financial cycles. Uzan argues that China's representation in international institutions such as the International Monetary Fund is inadequate compared to its economic weight, which contributes to a legitimacy crisis. He suggests that reforms in governance structures are necessary to reflect the changing dynamics of global power and to foster greater cooperation among stakeholders, including the Global South.
Uzan posits that the current geopolitical climate, exacerbated by recent events like the Russian invasion of Ukraine, has led to a reconfiguration of international trade and financial balances. He envisions a multipolar world where regional blocs coexist and trade more among themselves, while still maintaining dialogue across the blocs. He advocates for a new Bretton Woods framework that addresses contemporary challenges such as climate change and economic inequality, emphasizing the importance of creating an inclusive and sustainable global economic system that fosters cooperation rather than confrontation.
https://www.scmp.com/economy/china-economy/article/3276609/french-economist-marc-uzan-how-china-can-help-reshape-global-financial-system?utm_source=rss_feed
Beijing sends a signal on Macau governance, anti-corruption focus
South China Morning Post
Political attention in Macau has intensified ahead of the chief executive election, following current Chief Executive Ho Iat-seng's announcement that he will not seek re-election, citing health reasons. His term ends in December, and potential successor Sam Hou-fai, president of the Court of Final Appeal, has announced his candidacy with significant political support. Questions arise about his qualifications and platform. His candidacy marks a departure from the influence of Macau's traditional families, signaling a shift in Beijing’s governance approach, as Sam would be the first chief executive not native to the city.
https://www.scmp.com/opinion/china-opinion/article/3276589/beijing-sends-signal-macau-governance-anti-corruption-focus?utm_source=rss_feed
Why Is the West’s EV Industry So Far Behind China’s?
Foreign Policy
Sales of large SUVs and pickup trucks in Western markets have reached record levels, contributing significantly to CO2 emissions. In contrast, electric vehicles (EVs) account for only about 10% of total passenger car sales in the U.S. Meanwhile, China has emerged as a leader in the global EV market, exporting vehicles at unprecedented rates. The article explores how China achieved this dominance, the underperformance of Tesla in the market, and the implications of U.S. and European tariffs on Chinese EVs for the green transition. It highlights the geopolitical aspects of the EV market, the environmental impact of SUVs, and the differing perspectives of car companies and environmentalists regarding the pricing of Chinese EVs.
https://foreignpolicy.com/2024/09/01/china-us-europe-evs-electric-vehicles-market-energy-transition/
China will fund 240 students to go to US universities despite geopolitical tensions
South China Morning Post
Despite rising geopolitical tensions, the Chinese government continues to support young talent pursuing graduate education in the US. Next year, up to 240 students will be selected for master's or doctoral programs at seven partner universities, funded by the China Scholarship Council (CSC). Popular fields include computer science and biomedical engineering. Although China remains the largest group of international students in the US, the number has declined to about 290,000, partly due to visa denials and scrutiny faced by Chinese students. Recipients of CSC scholarships must return to China for at least two years after graduation.
https://www.scmp.com/news/china/science/article/3276581/china-will-fund-240-students-go-us-universities-despite-geopolitical-tensions?utm_source=rss_feed
China EVs: Leapmotor, Xpeng set the pace in August while Li Auto and Nio stumble
South China Morning Post
In August, major Chinese electric vehicle (EV) makers experienced mixed sales results despite incentives aimed at boosting the market. Leapmotor achieved record deliveries of 30,305 units, while sales for Li Auto and Nio declined. The EV market is facing intense competition, leading to price cuts and promotional offers. Despite a drop in deliveries, Nio maintained consistent sales above 20,000 units for four consecutive months. Meanwhile, other manufacturers like Zeekr and Xpeng reported increases in deliveries. Overall, EVs outsold petrol cars for the first time in China, highlighting a significant shift in the automotive market.
https://www.scmp.com/business/china-business/article/3276765/china-evs-leapmotor-xpeng-set-pace-august-while-li-auto-and-nio-stumble?utm_source=rss_feed
As Boeing flails, does China’s C919 jet have ‘window of opportunity’ in global market?
South China Morning Post
China's C919 passenger jet, developed by Comac, has the potential to enter the global market as Boeing faces safety issues. The jet officially joined the fleets of major Chinese airlines, marking a significant achievement for China's aviation industry. However, challenges remain, including gaining consumer trust and competing with established rivals like Airbus and Boeing. Comac must enhance production capabilities, obtain international certifications, and improve aircraft reliability. With over 300 C919 orders from Chinese airlines and anticipated market growth, the C919 is positioned as a key player in the civil aviation sector, but success will require ongoing development and international collaboration.
https://www.scmp.com/economy/china-economy/article/3276766/boeing-flails-does-chinas-c919-jet-have-window-opportunity-global-market?utm_source=rss_feed
Stay informed about the latest news, analysis, and policy briefs from across the globe related to China with the China brief. Our team aggregates, synthesizes, and summarizes the most important information from various sources, including media outlets, think tanks, government agencies, and industry experts.
Our mission is to provide you with easily accessible and critically valuable information tailored to your specific field of interest. We understand the significance of staying up-to-date on developments related to China and aim to make this information comprehensible for our readers.
Join the conversation and stay informed about the latest news and developments related to China by visiting our website at www.6dobrief.com