China’s former Hainan party chief Luo Baoming faces corruption investigation;China’s economic powerhouse seeks AI, humanoid robotics, low-altitude economy upgrade
Apple falls out of top 5 in China smartphone market in Q2
Welcome to this issue of The China Brief. Today is July 26, 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’s former Hainan party chief Luo Baoming faces corruption investigation
South China Morning Post
Luo Baoming, the former Communist Party boss of China's Hainan province, is under investigation for corruption. Luo, who helped transform Hainan into a strategic hub in the South China Sea, is being investigated by China's top corruption watchdog, the Central Commission for Discipline Inspection (CCDI), for suspected severe violations of party discipline and the law. Luo voluntarily turned himself in, according to the CCDI. No further details were given. During his time in office, Hainan was transformed into a popular tourist destination and a strategic Chinese outpost in the South China Sea.
https://www.scmp.com/news/china/politics/article/3272010/chinas-former-hainan-party-chief-luo-baoming-faces-corruption-investigation?utm_source=rss_feed
China’s economic powerhouse seeks AI, humanoid robotics, low-altitude economy upgrade
South China Morning Post
Shanghai plans to focus on artificial intelligence (AI), humanoid robotics and the low-altitude economy, according to a three-year plan unveiled by the city's government. The plan seeks to attract more than 100 AI firms, establish a national centre for humanoid robot manufacturing innovation and test low-altitude industrial logistics. Shanghai also wants to cultivate 50 platform companies with revenue of more than CNY1bn ($138m) and "outstanding" service capabilities, including five "unicorn" firms "with international influence".
https://www.scmp.com/economy/china-economy/article/3272011/chinas-economic-powerhouse-seeks-ai-humanoid-robotics-low-altitude-economy-upgrade?utm_source=rss_feed
Apple falls out of top 5 in China smartphone market in Q2
Nikkei Asia
Chinese smartphone makers Vivo and Huawei have ousted Apple from the top five brands in Asia's biggest economy, according to research companies IDC and Canalys. Huawei, which has been hit by a US crackdown, was the second-largest brand in China in Q2 2024, with market share of more than 18%. Apple's iPhone shipments fell 3.3% in the period, despite discounts and promotions.
https://asia.nikkei.com/Business/Electronics/Apple-falls-out-of-top-5-in-China-smartphone-market-in-Q2
Apple falls: iPhone maker out of China’s top 5 as Huawei ascends
South China Morning Post
Apple has dropped out of the top five ranking of smartphone vendors in China for the first time in years. According to data from Canalys, iPhone shipments in China declined 2% YoY in the three months to end-June, pushing Apple down to sixth place. The report highlights the growing competition from Chinese vendors such as Huawei, Vivo and Xiaomi, which all saw double-digit YoY growth in Q2. However, a separate report from Counterpoint, which tracks sales rather than shipments, placed Apple at second place with a market share of 15.5%.
https://www.scmp.com/tech/big-tech/article/3271994/apple-falls-iphone-maker-out-chinas-top-5-huawei-ascends?utm_source=rss_feed
China and India pledge to boost border peace efforts as Wang Yi urges ‘rational approach’
South China Morning Post
Chinese Foreign Minister Wang Yi and his Indian counterpart Subrahmanyam Jaishankar have agreed to make “concerted efforts” to maintain peace along their disputed border and improve communication. The ministers spoke on the sidelines of the Association of Southeast Asian Nations (ASEAN) foreign ministers’ meeting in Laos, just three weeks after talks at the Shanghai Cooperation Organisation (SCO) summit in Kazakhstan, where a reconciliatory tone was established. Both sides have steadily built up military capabilities in the region and have agreed to strengthen communication through platforms such as the East Asia Summit, the Group of 20, Brics, and the SCO.
https://www.scmp.com/news/china/diplomacy/article/3271998/china-and-india-pledge-boost-border-peace-efforts-wang-yi-urges-rational-approach?utm_source=rss_feed
He Jiankui, China biologist behind gene-edited babies, reveals million-dollar US work offer
South China Morning Post
Chinese scientist He Jiankui, who created the world's first gene-edited babies in 2018, has said that he is considering an offer to work in the US. He has been offered $1m by an investor from Silicon Valley to help start a company focused on gene-editing technologies to prevent Alzheimer's disease. He is currently serving a three-year sentence for illegal medical practices and has struggled to regain a foothold in the research community since his release. He has also faced difficulties in Hong Kong, where his visa was revoked. He has opened a laboratory in Wuhan and an independent facility in Sanya with funding from American and Chinese donors. He has rejected offers to continue his research in a "small Eastern European country" and an unnamed island nation. He said that embryo editing, which is currently banned in China and the US, will be as common as IVF babies in 50 years.
https://www.scmp.com/news/china/science/article/3271952/china-biologist-behind-gene-edited-baby-scandal-reveals-million-dollar-us-work-offer?utm_source=rss_feed
Chinese state enterprises to pour $414bn into equipment upgrades
Nikkei Asia
Chinese state-owned enterprises (SOEs) plan to invest CNY3tn ($413.8bn) over the next five years to upgrade their equipment. The move comes as China seeks to strengthen its industrial supply chain, as outlined in a key economic blueprint from the ruling Communist Party. The focus will be on replacing ageing equipment with high-tech, efficient, safe and environmentally friendly items.
https://asia.nikkei.com/Economy/Chinese-state-enterprises-to-pour-414bn-into-equipment-upgrades
Russia and China should join forces in Southeast Asia, Lavrov tells Wang at Asean meeting
South China Morning Post
Russia and China should work together to counter interference by external forces in Southeast Asia, according to Russian Foreign Minister Sergey Lavrov. He made the comments during a meeting with his Chinese counterpart, Wang Yi, in Laos. The two countries are seeking to strengthen their coordination in the region as a counterbalance to the US.
https://www.scmp.com/news/china/diplomacy/article/3271977/russia-and-china-should-join-forces-southeast-asia-lavrov-tells-wang-amid-asean-summit?utm_source=rss_feed
How one Chinese machine tool maker is helping Russia’s war against Ukraine
Washington Post
Chinese companies are providing vital support to Russia's military sector, enabling Moscow to expand its military capabilities and evade global efforts to end the war in Ukraine, according to analysts. China's exports to Russia include not only machine tools but also specialised electronic equipment and other high-end technology components. The US Treasury Department recently sanctioned dozens of Chinese companies, including Oree Laser Technology, which has shipped metalworking and related equipment to Russia. Beijing has not officially provided military support to Russia but analysts say China has allowed companies to continue doing business with Russia, a relationship that is working for both countries.
https://www.washingtonpost.com/world/2024/07/26/russia-china-military-drones-ukraine-war/
China on Alert for Heavy Rain and Floods From Typhoon Gaemi
NY Times
Typhoon Gaemi has hit southeastern China after causing destruction in Taiwan and the Philippines. The storm made landfall in Fujian Province on Thursday night, with wind speeds of 73mph. Over 290,000 people have been evacuated from the area so far. The storm is forecast to head north and pass through more than a dozen provinces. Meanwhile, in Taiwan, Gaemi has left five people dead and almost 700 injured, with some areas still flooded.
https://www.nytimes.com/2024/07/26/world/asia/typhoon-gaemi-china-taiwan.html
China’s slump hints at a unique liquidity trap
Reuters BreakingViews
China's record money supply has failed to revive growth, as changes in the consumer price index have remained close to zero. The People's Bank of China is loosening monetary policy, but prices refuse to respond. As a result, there is a record supply of money in China. The broad money supply in China now exceeds that of the United States and Europe combined, and when measured against the size of GDP, money supply in China is also the highest among major economies. Companies are sitting on cash instead of investing, and growth in total social financing, a measure of loan demand, has stalled. To tackle this, China's central bank has aggressively clamped down on debt trading and warned it could short sell government bonds to tackle a flattening yield curve. An expansion of fiscal policy could also help, as could an improvement in social welfare, including on medical and education costs, to encourage savers to consume. The government could also prime the pump to crowd in private investment, such as in tech, hospitals, and real estate. However, there is no clarity on how much leverage the central government is ready to take on.
https://www.breakingviews.com/features/chinas-slump-hints-at-a-unique-liquidity-trap/
China doping row set to raise tension at Paris pool
Japan Times
A doping controversy involving Chinese athletes has raised concerns about the integrity of the Olympic swimming competition. In April, it was revealed that 23 Chinese swimmers had tested positive for the banned heart medication trimetazidine (TMZ), but were still allowed to compete at the Tokyo Games. The World Anti-Doping Agency accepted the explanation that the positive tests were due to contamination from a hotel kitchen. However, some athletes have criticized the decision and questioned the credibility of the competition. This controversy may pose a challenge to the United States' dominance in swimming at the Olympics.
https://www.japantimes.co.jp/olympics/2024/07/26/china-doping-paris-pool-tension/
Don’t help Russia evade sanctions, Ukraine tells Hong Kong
CNN
Ukraine’s foreign minister, Dmytro Kuleba, has urged Hong Kong to prevent Russia from using the city as a way to avoid Western sanctions. The US and EU have sanctioned a number of firms in Hong Kong and mainland China for evading the extensive measures imposed on Russia in response to its invasion of Ukraine, including supplying semiconductors. Dual-use items are goods that can be used for both civilian and military purposes. In a statement, a spokesperson for the Hong Kong government said it “implements and strictly enforces” United Nations Security Council sanctions.
https://edition.cnn.com/2024/07/26/business/russia-china-hong-kong-ukraine-sanctions-kuleba-hnk-intl/index.html
Nippon Steel-Baosteel split closes book on Deng Xiaoping's Japan legacy
Nikkei Asia
The recent breakup between Nippon Steel and Baosteel marks the end of an era in the bilateral relationship between Japan and China that started with Deng Xiaoping's visit to Japan in 1978. During his visit, Deng toured Nippon Steel's Kimitsu Works, which inspired the rise of Baosteel as a modern steelmaker in Shanghai. At the time, Nippon Steel was the world's largest steelmaker, but today China Baowu Group, of which Baosteel is the core, holds the title of the top global steelmaker. This represents the shift in industrial power between the two countries. Similarly, Deng's visit to Nissan Motor's factory in Zama highlighted Japan's advanced industrial base compared to China's. However, China has now become the largest producer and consumer of automobiles, surpassing Japan. The rise of Chinese electric vehicle makers and stagnation of Japanese brands in the Chinese auto market have contributed to the split between Nippon Steel and Baosteel. This breakup, along with the latest plenum in China, which emphasized national security, signifies the end of Deng's legacy and the changing dynamics between Japan and China.
https://asia.nikkei.com/Politics/International-relations/Nippon-Steel-Baosteel-split-closes-book-on-Deng-Xiaoping-s-Japan-legacy
China says Taiwanese working in the mainland 'need not worry' after it suggested a death penalty for 'independence die-hards'
Yahoo US
China has said Taiwanese workers in the mainland have nothing to fear if they "don't break the law." The comment comes as Beijing sparked alarm in June by floating the death penalty for 'diehard' separatists. About 163,000 Taiwanese worked in the mainland in 2021, per a local report, and the number is declining.
https://www.yahoo.com/news/china-says-taiwanese-working-mainland-041923366.html
China’s Guangdong, once a major economic driver, lags national growth average
South China Morning Post
Guangdong, China's largest provincial economy, has reported GDP growth of 3.9% for the first half of 2024, 1.1 percentage points lower than the national average. Analysts blame tepid investment, consumption and business sentiment, as well as a slump in the property sector, for the subdued growth. The underperformance of Guangdong threatens to turn the province from an economic driver to a drag, despite Beijing's calls for powerhouse regions to support economic growth.
https://www.scmp.com/economy/china-economy/article/3271935/chinas-guangdong-once-major-economic-driver-lags-national-growth-average?utm_source=rss_feed
Chinese EV IPO drives a precarious line in Asia
Reuters BreakingViews
Chinese electric vehicle (EV) maker Hozon Auto plans to raise up to $1bn in a Hong Kong listing to fund its expansion into Southeast Asia. The company aims to tap into the growing EV market in countries like Thailand and Indonesia, where there is low EV penetration and a lack of local EV brands. Hozon's Neta EV brand has become the second-largest EV brand in Thailand, behind BYD. However, the company's push into the region may face challenges, including potential backlash from local incumbents and limited market size. Additionally, expanding overseas is costly, and Hozon reported a net loss of nearly $1bn in 2023.
https://www.breakingviews.com/considered-view/chinese-ev-ipo-drives-a-precarious-line-in-asia/
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