China’s consumer confidence nears all-time low, calls for ‘bolder’ measures;Rock ’n’ roll, internet are potential Western ‘colour revolution’ traps: Chinese textbook
China’s BYD pauses Mexico factory plans until after US election
Welcome to this issue of The China Brief. Today is September 4, 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 consumer confidence nears all-time low, calls for ‘bolder’ measures
South China Morning Post
Consumer confidence in China has dropped to near historic lows, with the confidence index falling to 86 in July, just above the all-time low of 85.5 recorded during the pandemic. Nomura attributes this decline to falling asset prices, moderate wage growth, and significant capital outflows. The investment bank suggests that bolder stimulus measures are needed from Beijing to address issues in the property sector, which is seen as a key factor dampening consumer sentiment. Housing prices have decreased nearly 30% from 2021 highs, impacting household finances and contributing to consumer caution regarding spending and job security. Despite a slight increase in retail sales growth to 2.7% in July, overall consumption remains below pre-COVID trends. Nomura warns that sustained weakness in consumer confidence could hinder economic recovery, emphasizing the need for effective government intervention.
https://www.scmp.com/economy/economic-indicators/article/3277160/chinas-consumer-confidence-nears-all-time-low-calls-bolder-measures?utm_source=rss_feed
Rock ’n’ roll, internet are potential Western ‘colour revolution’ traps: Chinese textbook
South China Morning Post
China's new national security textbook warns college students about the influence of Western culture, including rock and pop music, which it claims can incite "colour revolutions" aimed at undermining the government. Launched to enhance ideological control, the textbook emphasizes vigilance against Western ideals and urges students to remain aware of their role in safeguarding national security. It cites past uprisings as examples of foreign subversion and promotes a heightened sensitivity to national security risks. This initiative is part of a broader effort by Beijing to combat perceived Western infiltration among youth through educational reforms.
https://www.scmp.com/news/china/politics/article/3277076/rock-n-roll-internet-are-potential-western-colour-revolution-traps-chinese-textbook?utm_source=rss_feed
China’s BYD pauses Mexico factory plans until after US election
South China Morning Post
BYD, China's leading electric-vehicle manufacturer, has paused plans for a new car production facility in Mexico until after the US elections due to shifting American policies. The company was exploring three locations, including the Guadalajara area, but is now in a wait-and-see mode regarding the election outcome. BYD clarified that while it hasn't postponed its factory decision, it aims to focus on the Mexican market rather than the US. The company is navigating potential tariffs on Chinese EVs, making Mexico a strategically appealing location for production.
https://www.scmp.com/business/china-business/article/3277112/chinas-byd-pauses-mexico-factory-plans-until-after-us-election?utm_source=rss_feed
China Services Expansion Cools in New Sign of Economic Weakness
Yahoo US
China's services sector showed slower growth in August, with the Caixin services purchasing managers' index dropping to 51.6 from 52.1 in July, falling short of the expected 51.8. This decline raises concerns about the overall health of the economy, which has been struggling due to a prolonged real estate crisis and weak consumer demand. Recent official data indicates that various service industries are nearing contraction. The International Monetary Fund has noted that services are underutilized in driving growth in China compared to advanced economies. Meanwhile, manufacturing activity continues to contract, further complicating the economic outlook and raising doubts about the country's ability to meet its growth target of around 5% for the year.
https://www.yahoo.com/news/china-services-expansion-cools-sign-015119738.html
How Deng Xiaoping’s ‘one country, two systems’ dates back to 1957 in Tibet
South China Morning Post
The article discusses the historical context of China's approach to governance in Tibet and how it parallels Deng Xiaoping's "one country, two systems" strategy for Hong Kong and Macau. In 1957, amidst rising tensions following the 1951 Seventeen-Point Agreement, Mao Zedong tasked Deng with addressing the Tibet issue, which was complicated by its unique social and political systems. Deng and other leaders sought inspiration from the Qing dynasty's Twenty-Nine Article Ordinance, which allowed for Tibetan autonomy while maintaining Chinese oversight. Despite recognizing the distinctiveness of Tibet, the Chinese leadership was prepared to adopt a flexible approach, even discussing the possibility of delaying reforms for up to 50 years.
However, escalating tensions led to an armed revolt in Lhasa in 1959, prompting a military response from Beijing and the exile of the Dalai Lama. The article suggests that Deng's later negotiations for Hong Kong's return were informed by this historical experience, highlighting a continuity in the Chinese leadership's emphasis on national unity and security. It critiques the Western-centric view of political concepts and argues for an understanding of China's historical governance traditions.
https://www.scmp.com/opinion/china-opinion/article/3276947/how-deng-xiaopings-one-country-two-systems-dates-back-1957-tibet?utm_source=rss_feed
Alibaba to allow Tencent’s WeChat Pay for Taobao and Tmall purchases in landmark deal
South China Morning Post
Alibaba Group Holding has announced that its major online marketplaces, Taobao and Tmall, will soon accept Tencent Holdings' WeChat Pay for purchases, marking a significant collaboration between two of China's largest technology companies. This decision allows consumers to use WeChat Pay alongside Alipay, Alibaba's payment system, on these popular e-commerce platforms. The move comes after the Chinese market regulator concluded its antitrust review of Alibaba, following a substantial fine in 2021. Both Alibaba and Tencent have expressed a willingness to explore partnerships and enhance interoperability between their services, responding to government calls for tech companies to reduce competitive barriers. Together, WeChat Pay and Alipay dominate 90% of China's mobile payments market.
https://www.scmp.com/tech/big-tech/article/3277173/alibaba-allow-tencents-wechat-pay-taobao-and-tmall-purchases-landmark-deal?utm_source=rss_feed
China’s Geely Auto launches first compact EV, called Xingyuan, to compete with BYD’s Seagull
South China Morning Post
Geely Automobile Group has launched its first compact electric vehicle (EV) named Xingyuan, designed to compete with BYD's Seagull, which targets young, first-time car buyers. The Xingyuan emphasizes "beauty, approachability, and intelligence" in its design and aims to create "emotional value" for its drivers. Pricing for the Xingyuan is yet to be announced, while the Seagull is priced under 70,000 yuan (approximately US$9,846).
The EV market in China is experiencing fierce competition, with companies like BYD aggressively cutting prices to maintain market share, leading to squeezed profit margins. BYD's Seagull has sold 360,000 units since its launch and is also competing with Tesla's Model Y. Despite the competitive landscape, EV manufacturers, including Zeekr and Geely, are reporting significant revenue growth.
Zeekr's revenue rose 36% year-over-year, while Geely's revenue increased by 47% in the first half of the year. However, industry analysts caution that further price cuts may jeopardize profitability, particularly for companies like BYD.
https://www.scmp.com/business/china-evs/article/3277152/chinas-geely-auto-launches-first-compact-ev-called-xingyuan-compete-byds-seagull?utm_source=rss_feed
What to Expect From the China-Africa Summit
Foreign Policy
This week's Africa Brief highlights significant developments in Ethiopia, including tensions along its borders, the challenges in vaccine delivery for mpox in the Democratic Republic of the Congo, and a new nuclear power deal between the United States and Ghana. Approximately 50 African nations are attending a China-Africa summit in Beijing, marking the first such meeting since the BRICS bloc's expansion. Ethiopia, represented by its Foreign Minister, Taye Atske-Selassie, is expected to engage in various agreements focusing on smaller green technology financing, shifting from previous large-scale infrastructure projects.
Ethiopia has adapted its economic strategy with China, transitioning from substantial megaprojects to private-sector green initiatives. With a focus on the electric vehicle (EV) industry, Ethiopia banned imports of non-electric cars and opened a new EV factory in Debre Berhan. This move is intended to reduce reliance on imported vehicles and boost domestic manufacturing using Chinese components. As China's economy faces stagnation, its EV exports to Africa surged, with Ethiopia aiming to import thousands of electric buses and cars while encouraging local assembly and production.
At the summit, leaders are also discussing equitable resource extraction deals amid rising great-power competition. Tensions in the region are noteworthy, with Somalia receiving military support from Egypt, raising concerns for Ethiopia, while Sudan closes border crossings amid ongoing conflicts. Additionally, the U.S.-Ghana nuclear deal represents a strategic effort to counteract Chinese influence in Africa. Meanwhile, in the DRC, delays in mpox vaccines raise concerns about a repeat of past vaccination failures. Overall, the Africa Brief underscores the shifting dynamics of international relations and economic strategies within the continent.
https://foreignpolicy.com/2024/09/04/china-africa-brics-focac-green-technology-infrastructure-financing/
Ex-aide to New York governor charged with acting as Chinese agent
Japan Times
A former aide to New York Governor Kathy Hochul, Linda Sun, 41, has been charged with secretly acting as an agent for the Chinese government in exchange for substantial compensation and gifts, including gourmet meals. Along with her husband, Chris Hu, 40, she pleaded not guilty to the charges in a Brooklyn court. Federal prosecutors allege that while working in state government, Sun obstructed meetings between Taiwanese representatives and state officials, and attempted to facilitate a visit to China for a high-ranking New York official.
https://www.japantimes.co.jp/news/2024/09/04/world/politics/aide-new-york-governor-chinese-agent/
Road rage China woman faces online backlash for vicious attack on ex-soldier who does not retaliate
South China Morning Post
In Qingdao, China, a wealthy woman named Wang attacked a former soldier, Lin, after he refused to let her dangerously reverse into oncoming traffic. The incident occurred on August 28 when Wang, driving a luxury Land Rover, attempted to back into the opposite lane, resulting in her rear-ending a bus. Enraged, she exited her vehicle and assaulted Lin, who did not retaliate despite being injured. A video of the altercation circulated online, prompting public outrage.
The police detained Wang for 10 days and fined her 1,000 yuan (approximately $140) for assault. Lin, who had served in the military and now runs a hotel with his wife, expressed that he refrained from fighting back for the sake of his children. He has since incurred 4,000 yuan (about $560) in medical expenses and is seeking legal action. Wang later apologized and offered to cover his medical costs.
The incident sparked significant backlash on social media, highlighting issues of wealth and privilege in China, with many netizens supporting Lin and criticizing Wang’s behavior.
https://www.scmp.com/news/people-culture/trending-china/article/3277098/road-rage-china-woman-faces-online-backlash-vicious-attack-ex-soldier-who-does-not-retaliate?utm_source=rss_feed
Chinese companies seek gold in ‘silver economy’ as population greys
South China Morning Post
In Shanghai, supermarkets are increasingly stocking more products for seniors, such as adult diapers and milk powder, than for infants, reflecting China’s aging population, which reached 21.1% of the total last year. Companies like Trip.com are targeting this demographic through tailored services, leading to significant revenue growth. The health and wellness sector is also adapting to the needs of older consumers, with products aimed at enhancing their quality of life. The "silver economy" is projected to expand significantly, with its value expected to rise from 7 trillion yuan to 30 trillion yuan by 2035.
https://www.scmp.com/business/china-business/article/3276974/chinese-companies-seek-gold-silver-economy-population-greys?utm_source=rss_feed
Alibaba sets up new ‘digital technology’ firm under e-commerce unit Taobao and Tmall Group
South China Morning Post
Alibaba Group has established a new digital technology company under its e-commerce unit, Taobao and Tmall Group (TTG), with a registered capital of 10 million yuan (US$1.4 million). Named "Hangzhou Taobao and Tmall Digital Technology Co," the firm was registered on August 23 and will engage in diverse activities, including the import and export of goods, sales of various products, and technology-related services like software development. This move seems to indicate TTG's plans for further business expansion or a focus shift amidst a competitive landscape with rivals like JD.com and Pinduoduo. The establishment of this company follows the conclusion of a three-year regulatory scrutiny by the State Administration for Market Regulation and comes as Beijing aims to boost confidence in the private sector amid economic challenges. Additionally, TTG has been testing new AI tools to enhance merchant services and customer interactions, reflecting its strategy to adapt to market demands.
https://www.scmp.com/tech/big-tech/article/3277069/alibaba-sets-new-digital-technology-firm-under-e-commerce-unit-taobao-and-tmall-group?utm_source=rss_feed
U.S. voters targeted by Chinese influence online, researchers say
NBC NEWS
A Chinese social media influence operation is impersonating U.S. voters, denigrating U.S. politicians and pushing divisive messages ahead of the Nov. 5 presidential election in the United States, new research by intelligence company Graphika showed.
The campaign is part of a known Chinese state-linked effort analysts have dubbed “Spamouflage” or “Dragonbridge,” which pushes a mixture of spam and targeted propaganda onto the internet.
Spamouflage has been active since at least 2017 but has stepped up its activities as the election approaches, according to experts. It has leveraged thousands of accounts across more than 50 websites, forums and social media platforms.
“The key takeaway from this report,” said Jack Stubbs, who manages Graphika’s research team, is that Spamouflage has “become more aggressive in its efforts to infiltrate and sway U.S. political conversations.”
“This matters because it shows Chinese influence operations targeting the U.S. are evolving, engaging in more advanced deceptive behaviors, and directly targeting these organic but hyper-sensitive rifts in society,” Stubbs added.
In one example highlighted by Graphika, the Chinese operation impersonated American anti-war activists. Using multiple accounts on X, the operatives created memes that labeled Trump a “fraud,” showing him in an orange prison uniform, and called Biden a “coward.”
In halting English, a different account asked: “the present American still our America?”
Liu Pengyu, a spokesperson for China’s embassy in Washington, said, “China has no intention and will not interfere in the U.S. election, and we hope that the U.S. side will not make an issue of China in the election.”
Facebook previously attributed the campaign to Chinese law enforcement, calling it “the largest known cross-platform covert influence operation in the world.”
Spamouflage’s messaging does not appear to favor one side of the political spectrum — either Democrats or Republicans — but rather aims to amplify existing criticisms toward American society and government.
Historically, the group had limited success engaging with actual Americans, but that began to change in mid-2023 when the operatives increasingly targeted genuine supporters of former President Donald Trump, according to the Institute for Strategic Dialogue, which has done its own research into Spamouflage.
Graphika identified 15 Spamouflage accounts on social media platform X and one account on TikTok, all claiming to be U.S. citizens or media outlets. It also highlighted other profiles associated with those accounts on YouTube and Instagram that were suspended by the time it finished its report.
X did not respond to a request for comment.
A YouTube spokesperson said, “The channel flagged by Graphika was previously identified and terminated as part of our investigations into coordinated influence operations, and had a very small number of views at the time it was removed.”
The Tiktok account, named Harlan Report, was among the group’s most successful assets. It posted a single video in July which garnered 1.5 million views.
That video, which was removed from TikTok last week, mocked a Biden press conference at NATO’s 75th anniversary summit where he stumbled over a speech. Like similar social media posts shared widely at the time, it transcribed Biden’s words erroneously to suggest that he had made a sexual reference, according to a Reuters Fact Check.
A Reuters review of the Harlan Report account on TikTok showed that it posted its first video in May. Other recent videos posted by the account racked up hundreds of thousands of views, including one shared last week showing CNN panelists discussing the network’s interview with Democratic presidential candidate Kamala Harris.
A TikTok spokesperson said the company permanently banned the Harlan Report account for violating its community guidelines.
Meta, the parent company of Facebook and Instagram, confirmed that it had removed Spamouflage activity from its platforms in two places as part of its ongoing enforcement against the operation. Neither was able to gain much traction with authentic audiences, a Meta spokesperson said.
The U.S. government is investigating foreign efforts to interfere in the election.
In July, the U.S. Office of the Director of National Intelligence, released a report, on election interference, noting that China was “approaching this U.S. presidential election more cautiously ... and probably does not plan to influence the outcome.” However, “we are tracking efforts to influence the U.S. public more broadly.”
https://www.nbcnews.com/tech/internet/us-voters-targeted-chinese-influence-online-researchers-say-rcna169317
Chinese e-commerce giant Pinduoduo updates rules to kick out sellers of shoddy products
South China Morning Post
Chinese e-commerce platform Pinduoduo is set to remove sellers of counterfeit products from its subsidy program in response to Beijing's call for reduced competition and improved quality. New rules announced by Pinduoduo will impose penalties, including permanent bans, on merchants selling fake or substandard products, effective next Tuesday. This change aims to target low-quality white-label products that have been central to Pinduoduo's strategy for gaining market share in price-sensitive areas. Other major players, including Meituan, JD.com, and Alibaba, are also taking steps to improve quality and reduce unhealthy competition. These moves come amid complaints from merchants about stringent policies and fines, leading to protests. In light of the focus on sustainable growth over low prices, PDD's shares saw a significant decline following the announcement.
https://www.scmp.com/tech/big-tech/article/3277044/chinese-e-commerce-giant-pinduoduo-updates-rules-kick-out-sellers-shoddy-products?utm_source=rss_feed
China’s 2 largest shipyards plan to merge to create the world’s biggest builder
South China Morning Post
China's two largest shipyards, China CSSC Holdings and China Shipbuilding Industry Company (CSIC), are set to merge in response to government directives aimed at streamlining operations and enhancing industry development. China CSSC Holdings plans to issue yuan-denominated shares to take over CSIC, although specific merger terms were not disclosed. The merger is expected to create a shipyard with annual sales of 122 billion yuan (approximately US$17.1 billion), nearly double the size of South Korea's Hyundai Heavy Industries.
The combined entity will be capable of constructing a wide range of vessels, including warships and commercial ships. Analysts believe the consolidation will optimize business structures and improve capabilities for advanced vessel orders, benefiting from China's increasing share of the global shipbuilding market.
The merger follows a previous consolidation in 2019 and comes as China continues to modernize its navy with various military vessels. Following the announcement, both companies' stock prices fell before trading was halted, with CSSC's market capitalization at 156 billion yuan and CSIC at 113.5 billion yuan. CSSC may need to issue 330 million new shares to fully acquire CSIC, increasing its capital base by 42%.
https://www.scmp.com/business/china-business/article/3277066/chinas-two-largest-shipyards-plan-merge-create-worlds-biggest-builder?utm_source=rss_feed
Police officer killed, 2 others wounded in rare shoot-out in northeast China
South China Morning Post
A police officer was killed and two others injured in a rare gun crime in Changchun, Jilin province, northeastern China. The incident occurred when a 45-year-old man, surnamed Li, armed with a knife, threatened individuals in a property management office. As police responded, Li stabbed one officer, took his gun, and shot another officer before being fatally shot by police. The first officer succumbed to injuries later in the hospital, while the other two sustained non-life-threatening injuries. No civilian casualties were reported, and the motive behind Li's actions remains unclear. This event follows a recent attack on a judge and highlights the rarity of gun incidents in China. An investigation is ongoing.
https://www.scmp.com/news/china/article/3277068/police-officer-killed-2-others-wounded-rare-shoot-out-northeast-china?utm_source=rss_feed
Biden’s Top Climate Negotiator to Visit China This Week
NY Times
John Podesta, President Biden's climate diplomat, is heading to Beijing for a three-day trip to urge Chinese leaders to enhance their greenhouse gas emission reduction plans. This visit is seen as a crucial opportunity for the Biden administration to encourage China to take more aggressive action on climate change before the upcoming November elections. Podesta will meet with key Chinese officials, including Liu Zhenmin and Xie Zhenhua, to discuss coal development and renewable energy. Experts hope this trip will facilitate climate discussions at the upcoming Group of 20 summit where Biden and China's President Xi Jinping are expected to meet. This marks Podesta's first visit to China since taking over as the chief U.S. climate negotiator.
https://www.nytimes.com/2024/09/03/climate/podesta-china-climate-change.html
TikTok owner ByteDance’s overseas operations to get boost from US$9.5 billion bank loan
South China Morning Post
ByteDance, the owner of TikTok and Douyin, plans to borrow $9.5 billion, marking the largest dollar-denominated corporate loan in Asia, excluding Japan. This financing aims to support its overseas operations, particularly in e-commerce, which requires substantial investment. The funds will also refinance a previous $5 billion loan and enhance the company's engagement with banks. While TikTok Shop's performance in the U.S. has been below expectations, ByteDance is expanding its e-commerce efforts internationally. The company has also seen success in AI app downloads, indicating a focus on diversifying its business.
https://www.scmp.com/tech/big-tech/article/3277045/tiktok-owner-bytedances-overseas-operations-get-boost-us95-billion-bank-loan?utm_source=rss_feed
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