China Had a ‘Special Place’ in Modi’s Heart. Now It’s a Thorn in His Side
‘Subdue the enemy without fighting’: how China’s powerful water cannon will change the game in South China Sea; Scholz heads to China as Ukraine war, Taiwan tensions loom large
Welcome to this issue of The China Brief. Today is April 13, 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.
Scholz heads to China as Ukraine war, Taiwan tensions loom large
Yahoo US
German Chancellor Olaf Scholz will visit China for a three-day trip, during which he will meet with President Xi Jinping. The visit is expected to cover political talks on Russia's war on Ukraine, tensions with Taiwan, and trade. China is Russia's most important ally and has not condemned the Russian war. Relations between China and Taiwan are strained, with China viewing Taiwan as part of its territory. China is Germany's most important trading partner, and several German business leaders will join Scholz on the trip. This is Scholz's second visit to China since taking office, and it is the longest trip he has made to a single country as Chancellor.
China's foreign auto joint ventures lose luster under EV onslaught
Nikkei Asia
China's state-owned automakers have seen their profits eroded as new domestic players, such as BYD, have ridden a wave of electrification. Dongfeng Motor Group, the Hong Kong-listed arm of the state-owned Dongfeng Motor Corp., reported a net loss for 2021, its first since it went public in 2005. The slip into negative territory came as the performance of two separate 50-50 joint ventures (JVs), one with Honda and the other with Nissan, declined significantly. Dongfeng Nissan's sales volume dropped 21.5% year-on-year, while Dongfeng Honda's fell 8.5%. This led to a significant decline in investment income and a loss of CNY3.99bn ($564m). China's traditional JVs with foreign automakers are in retreat under the onslaught of electrification. However, some industry veterans anticipate that some of the global players will strike back.
South China Morning Post
A married couple in China is reportedly on the brink of divorce after a disagreement over their child's surname. The wife, Xiangjia, wanted their son to take her surname, but the husband disagreed, citing the tradition of children using their fathers' surnames. The couple's argument escalated to the point where Xiangjia suggested divorce and child custody. When Xiangjia went into the hospital for surgery, she returned home to find that her mother-in-law had renamed her son. The story has gone viral on Chinese social media, with many online observers supporting the idea of children taking their mother's surname. In recent years, the practice of children taking their mother's surname has increased in China as more women gain independence and higher status.
China Had a ‘Special Place’ in Modi’s Heart. Now It’s a Thorn in His Side.
NY Times
Tensions between India and China have escalated over the past decade, causing a strain in the relationship between the two countries. Despite initially looking up to China as a model for economic transformation, Indian Prime Minister Narendra Modi has found it difficult to maintain a positive relationship with China. Border incursions and clashes have led to a rupture between the two nations, and China has become a fierce competitor to India in various areas of expansion. China has challenged Indian pre-eminence in South Asia by using its economic resources to court partners and gain access to strategic ports. These tensions weigh heavily on Modi's campaign for a third term as he seeks to restore national pride and make India a major global power.
U.S. says China is boosting Russia's war machine in Ukraine
Japan Times
China is reportedly providing support to Russia's military buildup in Ukraine, including drone and missile technology, satellite imagery, and machine tools. Senior US officials claim that China is backing Russia's war effort in Ukraine, but the Chinese Embassy in the US denies providing weaponry to any party involved in the conflict. US President Joe Biden reportedly raised the issue with Chinese President Xi Jinping during their recent phone call, and it is also being discussed with US allies in Europe and globally.
China natural disasters cost $3.3 billion in first quarter, government says
Yahoo US
Floods, droughts, earthquakes, and freezing conditions in China have caused $3.28bn in direct economic losses during the first quarter of 2019, according to the country’s emergency management ministry. The adverse weather has resulted in the death of 79 people, made 110,000 people relocate and affected 10.4 million people across 26 regions. Last year, China experienced natural disasters that resulted in $47.7bn of direct economic losses and caused 691 deaths or disappearances.
Marcos Jr treads fine line with China as Philippines deepens US, Japan ties
Al Jazeera
The Philippines is highlighting the economic benefits of its partnership with the US and Japan in order to mask the possibility of being dragged into military conflict with China. The leaders of Japan, the Philippines, and the US recently announced a partnership that will include economic investments of around $100bn, with a focus on developing key areas such as the semiconductor supply chain, telecommunications, and critical infrastructure. While the security aspects of the partnership have been stressed by the US and Japan, Philippine President Ferdinand Marcos Jr has highlighted the potential economic rewards. Financial analysts suggest that this is a way for Marcos Jr to sell the partnership to the Filipino people and avoid angering China. The Philippines is geographically well-positioned to become a manufacturing and logistics hub in ASEAN, and the country's young workforce makes it an attractive location for US semiconductor manufacturers looking to diversify their supply chains. The US is also interested in the Philippines as a source of nickel, which is a critical element for renewable energy technologies.
South China Morning Post
Researchers in China have developed the world's first "smart" water cannon, which is controlled by artificial intelligence (AI). The cannon can automatically identify targets and adjust its power and trajectory based on feedback from a camera and motion sensors. It is hoped that the smart water cannon will improve the accuracy of the weapon in rough seas and increase its effectiveness in disputes in the South China Sea. The cannon is driven by a high-pressure water pump and is capable of attacking targets over 100 metres away. The smart water cannon has been developed by the Wuhan Marine Electric Propulsion Device Research Institute and has been shown to have an error rate of only two metres when hitting targets in rough sea conditions with four-metre waves and high winds. According to researchers, this represents a significant improvement over traditional automatic water cannons.
US lawmakers blast Biden after Huawei unveils laptop with new Intel AI chip
South China Morning Post
Republican lawmakers in the US have criticised the Biden administration after sanctioned Chinese telecoms giant Huawei unveiled a laptop powered by an Intel AI chip. The US placed Huawei on a trade restriction list in 2019 due to sanctions violations related to Iran. Although the Trump administration issued a license allowing Intel to ship central processors to Huawei for use in laptops, hardliners had called on the Biden administration to revoke the license. The recent unveiling of the MateBook X Pro laptop has led to anger among Republicans who believe that the Commerce Department has approved shipments of the new chip to Huawei.
South China Morning Post
Deutsche Bank is focusing on its China business in order to take advantage of gaps created by the withdrawal of its investment banking rivals. The bank has been strengthening its corporate finance division and expanding its presence in the debt and equity capital markets over the past two years. Deutsche Bank is betting on China's post-Covid recovery and believes that businesses in mainland China will rebound. The bank aims to position itself to seize the moment and facilitate more cross-border activity from Hong Kong.
China developer Wanda loses crown jewel mall unit in survival fight
Nikkei Asia
Chinese developer Dalian Wanda Group has given up control of its core mall unit to outside investors as part of a deal worth $8.3bn. The move is expected to help the company shore up its strained finances but also weakens the influence of founding chairman Wang Jianlin. The signing ceremony for the investment took place last month but was low-key and lasted just 30 minutes. The most prominent investors are from Hong Kong-based private equity firm PAG and Abu Dhabi Investment Authority.
How could an Aukus role for Tokyo affect China’s ties with Japan?
South China Morning Post
China has voiced its concerns over the possibility of Japan joining the Aukus alliance. Beijing said that Japan's potential involvement would "increase the risk of nuclear proliferation" and "escalate the arms race" in the region. Although Japanese Prime Minister Fumio Kishida said "nothing has been decided at this moment", China feels that Japan is tilting more towards US-led security structures. China and Japan have a range of disagreements over issues such as territorial disputes and the discharge of nuclear power plant water. Despite this, China remains Japan's biggest trading partner.
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