China’s third plenum: implications for solar power, copper, steel, oil refining and grains
While Singapore scrutinises, Hong Kong wins back wealthy Chinese; Xi’s efforts to reach to young Americans stumble with scripted moments
Welcome to this issue of The China Brief. Today is July 9, 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 third plenum: implications for solar power, copper, steel, oil refining and grains
South China Morning Post
Next week, China’s third plenum is expected to address issues of overcapacity and faltering demand. The plenum is a forum for longer-term political and economic reforms, and although major initiatives are not expected this time, tweaks to the policy framework could still be consequential. The outcome of the meeting will have a direct impact on commodities supply and demand, including the energy transition, new hi-tech industries and unified national markets. It could also provide cues for the solar, copper, steel, oil and grains markets. Solar power consolidation is likely to be one focus, with nationwide trading in clean power helping to overcome industry issues such as bottlenecks and wastage. This would increase demand for metals such as copper and aluminium. In the copper market, the plenum is expected to deliver greater support for investment in the grid and clean energy, as well as help for the property market. The steel market is likely to be affected by restructuring the country’s finances away from heavily indebted local authorities. Furthermore, the plenum may also consider measures to raise funds by broadening the tax take, which would affect the oil industry. Finally, rural reform and food security are expected to be key areas of focus, with measures to address short-term stresses and long term threats to China’s agricultural sector.
https://www.scmp.com/business/commodities/article/3269689/chinas-third-plenum-implications-solar-power-copper-steel-oil-refining-and-grains?utm_source=rss_feed
While Singapore scrutinises, Hong Kong wins back wealthy Chinese
South China Morning Post
Hong Kong is regaining its appeal to wealthy Chinese individuals, as Singapore tightens regulations on foreign wealth. After a period of political unrest and strict quarantine measures, Hong Kong is now welcoming around 200 high-net-worth individuals this year, according to data from New World Wealth and Henley & Partners. Initiatives such as family office tax concessions and visa and residency programmes have helped attract wealthy individuals back to Hong Kong. Meanwhile, Singapore's crackdown on money laundering has deterred some customers, with banks increasing checks on clients and wealthy Chinese individuals coming under scrutiny. Hong Kong's assets under management grew by 2.1% to HKD 31tn ($4tn) last year, and net fund inflows increased more than threefold to nearly HKD 390bn. Hong Kong's efficient connections to the Greater Bay Area and its top talent visa programme have helped attract wealthy Chinese individuals. However, some concerns have been raised in Hong Kong that the new arrivals may have links to money laundering.
https://www.scmp.com/news/asia/southeast-asia/article/3269728/while-singapore-scrutinises-hong-kong-wins-back-wealthy-chinese?utm_source=rss_feed
Xi’s efforts to reach to young Americans stumble with scripted moments
Japan Times
China recently hosted a weeklong bonding festival for 220 young Americans in an effort to strengthen ties between the two countries. However, many U.S. attendees criticized the festival for being scripted and lacking open dialogue. The festival did not address the biggest issues between the two countries, such as Beijing's support for Russia's war in Ukraine and the U.S. tariffs on Chinese exports.
https://www.japantimes.co.jp/news/2024/07/09/world/politics/xi-young-americans-scripted/
Swap Connect scheme to allow global investors to use Chinese bond holdings as margin collateral
South China Morning Post
International investors will soon be able to pledge their holdings of Chinese domestic bonds as margin collateral for Northbound Swap Connect trading, according to regulators from Hong Kong and mainland China. The move aims to enhance cross-border connectivity and cooperation and will help to improve capital efficiency in interest-rate swaps. Another risk management tool, China treasury bond futures, will also be launched in the near future. The announcement was made at a summit commemorating the seventh anniversary of the connect scheme.
https://www.scmp.com/business/banking-finance/article/3269734/swap-connect-scheme-allow-global-investors-use-chinese-bond-holdings-margin-collateral?utm_source=rss_feed
Chinese EV giant BYD to build $1 billion plant in Turkey
CNN
Chinese electric vehicle (EV) maker BYD has signed an agreement to build a $1bn car factory in Turkey. The factory will be able to produce 150,000 electric and hybrid vehicles per year and is expected to provide up to 5,000 jobs. The move follows the introduction of provisional additional duties on imports of Chinese-made EVs into the European Union.
https://edition.cnn.com/2024/07/09/business/china-ev-byd-turkey-plant-intl-hnk/index.html
Ant Group-backed Paytm has a breakthrough in India with nod to put US$6 million into unit
South China Morning Post
Paytm, an Indian fintech firm, has received approval from a government panel to invest INR500m ($6m) in its subsidiary, Paytm Payment Services. The approval, subject to vetting by the finance ministry, will allow the unit to resume normal business operations. Paytm Payment Services accounted for a quarter of Paytm's consolidated revenue in the financial year ending March 2023. The panel had previously withheld approval due to concerns about the 9.88% stake held by China's Ant Group, but the reason for the change in decision is not known.
https://www.scmp.com/business/companies/article/3269776/ant-group-backed-paytm-has-breakthrough-india-nod-put-us6-million-unit?utm_source=rss_feed
Floods move to China’s drought-hit farmland as Dongting Lake wall repair holds
South China Morning Post
Emergency forces are working to seal the main dyke breach at Dongting Lake, China’s second-largest freshwater lake. The lake burst its embankment on Friday, flooding 47 square kilometres including the town of Tuanzhou, where over 7,000 residents were evacuated. The breach had widened to 226 metres by Saturday. Work to seal the dyke was progressing at an average rate of 4 metres per hour by Sunday midnight. The lake acts as a drainage basin for the Yangtze River and the devastation could affect 65,000 people and lead to direct economic losses of $324.5m, according to the local government.
https://www.scmp.com/news/china/article/3269743/floods-move-chinas-drought-hit-farmland-dongting-lake-wall-repair-holds?utm_source=rss_feed
China plans trading platform for green hydrogen-derived fuels to decarbonise shipping
South China Morning Post
China is establishing a platform to support the trading of net-zero hydrogen and its derivatives, including green methanol and green ammonia, in an effort to lead the global hydrogen sector and decarbonise the shipping industry. The platform will focus on the certification and trading of these hydrogen-based fuels in China and eventually aims to expand its service globally. China has set ambitious targets for the production of green hydrogen in its national hydrogen strategy and has been actively deploying infrastructure to support the transport and storage of hydrogen fuels.
https://www.scmp.com/business/article/3269746/china-plans-trading-platform-green-hydrogen-derived-fuels-decarbonise-shipping?utm_source=rss_feed
A driverless car hits a person crossing against the light in China, highlighting a challenge for AI
Associated Press
A driverless car operated by Chinese tech giant Baidu hit a pedestrian in the city of Wuhan. Baidu stated that the car began moving when the light turned green and had minor contact with the pedestrian, who was crossing against the light. The incident highlights the challenges that autonomous driving faces in complex situations, particularly when dealing with unconventional behavior such as pedestrians violating traffic laws. Social media largely supported Baidu, arguing that the pedestrian was at fault for breaking the law. Baidu is a leader in the development of autonomous driving in China and operates its largest "robotaxi" fleet in Wuhan.
https://apnews.com/article/china-autonomous-driving-accident-baidu-b0b4527ff355836f2df03868ff0bd0fc
Temasek to prioritise US deals and stay cautious on China
Financial Times
Singapore's state-owned investment firm, Temasek, has said that it will prioritise US investments and be cautious about China following a warning that its large exposure to China had affected its performance. The value of its portfolio rose just 2% to SGD389bn ($288bn) in the year to March, but this was an improvement on last year when its value tumbled 5%. China is Temasek's third-largest market, and it has been a big beneficiary of China's growth over the past two decades with bets on technology giants Tencent and Alibaba.
https://www.ft.com/content/4349267b-45ea-46f3-859e-a44afc8100ea
Russia and China peace missions prompt EU members to seek ways to punish Hungary
South China Morning Post
Hungary's Prime Minister Viktor Orban is facing criticism from other EU member states after he represented the bloc on a trip to Beijing, despite the role being largely administrative and without foreign policy authority. Orban, who has pro-Russian views, has been accused of abusing Hungary's six-month presidency of the EU, during which he also visited Moscow and called for an immediate ceasefire in the war in Ukraine. European Commission spokesman Eric Mamer said Orban had "no mandate" to represent the EU on these visits. The presidency is a rotating role which allows each EU member state to set legislative agendas and chair meetings in Brussels. Ambassadors are set to grill Hungary's representatives in Brussels on Wednesday, with some member states looking to find a way to punish Budapest for abusing the role. Orban's trip to Beijing came on the day Chinese military personnel were in Belarus, an ally of Russia, for "anti-terrorist training" close to Poland's border.
https://www.scmp.com/news/china/diplomacy/article/3269669/russia-and-china-peace-missions-prompt-eu-members-seek-ways-punish-hungary?utm_source=rss_feed
Hungary’s Orban meets China’s Xi in mission to end Russia-Ukraine war
Al Jazeera
Chinese President Xi Jinping has urged world powers to help Russia and Ukraine resume direct dialogue as he held talks with Hungary’s Prime Minister Viktor Orban, who was in Beijing on a visit the European leader has branded as a “peace mission”. Xi and Orban’s meeting in the Chinese capital on Tuesday came after the Hungarian leader made similar trips to Russia and Ukraine last week to discuss prospects for a peaceful settlement in the conflict, now in its third year. Hungary assumed the rotating presidency of the European Union this month and Orban has since embarked on a peace mission, which, however, lacks the endorsement of other European nations.
https://www.aljazeera.com/news/2024/7/9/hungarys-orban-meets-chinas-xi-in-mission-to-end-russia-ukraine-war
China's AI startups race for customers as titans like Alibaba cut prices
Nikkei Asia
Chinese AI startups face pressure to find customers quickly or risk being taken over by tech giants, following substantial funding rounds. Startups such as Baichuan AI are racing to offer generative AI, but attracting paying customers will be crucial to their future. Baichuan offers its newest and most advanced language model, Baichuan4, for CNY100 ($13.75) per million tokens, similar to OpenAI's GPT-4o but more costly than those offered by domestic rivals. ByteDance's Doubao Pro models cost as little as CNY0.8 per million tokens, Alibaba's Qwen as low as CNY0.5, while some Baidu models are free.
https://asia.nikkei.com/Business/Technology/Artificial-intelligence/China-s-AI-startups-race-for-customers-as-titans-like-Alibaba-cut-prices
Moutai rout is China’s latest confidence crisis
Reuters BreakingViews
Shares of Kweichow Moutai, the world's most valuable distiller, have fallen over 20% since early May, resulting in a $60 billion drop in market value. The decline is attributed to a glut in China's baijiu market, growing competition from foreign liquor brands, and changing consumption habits among Chinese youth. However, analysts still expect the company's earnings to rise 18% this year. The sudden sell-off highlights the fragile sentiment in China's economy and the fear of another market downturn.
https://www.breakingviews.com/considered-view/moutai-rout-is-chinas-latest-confidence-crisis/
Australia accuses Hainan-based hackers of prowling sensitive computer networks
South China Morning Post
Australia's cyber intelligence agency, the Australian Signals Directorate, has warned of the increasing threat of state-backed Chinese hackers. In a detailed advisory note, the agency singled out the APT40 hacking group, which it said was actively looking for targets to compromise. APT40, which is believed to conduct malicious cyber operations for China's Ministry of State Security, has repeatedly targeted Australian networks as well as government and private sector networks in the region. The Australian Signals Directorate said the group looked to infiltrate old and forgotten devices that were still connected to sensitive computer networks in order to gain a foothold and exploit vulnerabilities. Cybersecurity experts have said that inadequate safeguards and the stockpiling of sensitive customer information have made Australia a target for hackers.
https://www.scmp.com/news/asia/australasia/article/3269698/australia-accuses-hainan-based-hackers-prowling-sensitive-networks?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