A cache of leaked Chinese hacking documents just confirmed experts' warnings about how compromised the US could be
China Signals Its ‘Panda Diplomacy’ Will Resume With US, Europe; China: Cargo ship hits bridge in Guangzhou, killing 2
Welcome to this issue of The China Brief. Today is February 22, 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.
Yahoo US
Over 570 files and documents were posted on developer platform GitHub last week that track hacking activity across multiple countries. The documents are thought to belong to iSoon, a security contractor with ties to China's Ministry of Public Security, and the files mention at least 20 hacking targets, including countries like the UK, India, South Korea, Thailand, and Malaysia.
China Signals Its ‘Panda Diplomacy’ Will Resume With US, Europe
Bloomberg
China plans to renew its "Panda Diplomacy" efforts with the US and other countries after bringing back pandas that it had loaned to foreign zoos. The country's wildlife agency has reached an agreement with the San Diego Zoo in California and the Madrid zoo in Spain for a new round of international cooperation on panda conservation. The first pair of pandas could arrive in San Diego by late summer. China is also discussing renewing its cooperation with Washington, D.C.'s National Zoo and Austria's Schönbrunn Zoo. The move is part of China's effort to improve relations with the West.
China: Cargo ship hits bridge in Guangzhou, killing 2
Deutsche Welle
Two people have been killed and three others are missing after a ship crashed into a bridge in Guangzhou, China. The collision caused part of the bridge to collapse, sending five vehicles, including a motorbike, into the water or onto the cargo ship. Rescue workers are at the scene and have so far rescued two people, while one crew member has been slightly injured.
Taiwan and China spar over capsizing, inspections near Kinmen islands
Nikkei Asia
Chinese patrols in Taiwanese waters have sparked fears of a maritime incident that could escalate tensions between the two countries. The patrols have broken with the status quo established in the 1990s. The Chinese government called on Taiwan to "severely punish those responsible, meet the reasonable demands of the victims' families, solemnly apologise to the families of the victims, and provide an explanation." Taiwan has denied accusations of "violent law enforcement".
US Congress members praise Taiwan’s democracy in a visit that’s certain to draw China’s scrutiny
Associated Press
A group of US Congress members have met with Taiwan's President Tsai Ing-wen in a show of support for the island nation. This is likely to draw scrutiny from China, which opposes such visits and sees them as a challenge to its claim of sovereignty over Taiwan. The visit comes amid growing tensions between the US and China, with Congress members keen to confront China on a range of issues.
China is one of world’s most expensive places to raise children, report finds
CNN
China is one of the most expensive places in the world to raise a child in relative terms, a new report says, with the disproportionate impact on women driving the country’s precipitously low fertility rate as it grapples with a demographic crisis. The study, released Wednesday by the China-based YuWa Population Research Institute, found the average nationwide cost of raising a child from birth to age 17 was about $74,800 – rising to more than $94,500 to support a child through a bachelor’s degree.
China starts drafting bill to boost private sector and tackle sluggish economy
South China Morning Post
Beijing is drafting a bill to promote the private sector in an attempt to revive China's sluggish post-pandemic economic recovery and boost investor confidence. The private economy promotion law aims to address concerns of enterprises and implement equal treatment of state-owned and private enterprises. However, analysts predict the bill will not significantly improve China's business environment and may not contain innovative measures. The proposed law will focus on protecting the property rights of private enterprises, ensuring fair participation and access to the market, and addressing concerns such as managing overdue payments to small and medium-sized enterprises.
China’s Property Foreclosures Surge as Growth Slows
Bloomberg
The number of foreclosed properties for sale in China increased by 48% in January compared to the previous year, indicating the country's ongoing economic slowdown. This rise in foreclosed property listings is due to the growing number of debt-ridden property owners who are being forced to sell, as real estate loans make up a significant portion of China's non-performing debt. Distressed pricing has allowed buyers to purchase cheap properties, with foreclosed residential properties selling at an average discount of 23% in January. The real estate agency China Index Holdings predicts that the demand for distressed properties will increase further after the Lunar New Year.
'Singapore-washing' and China’s sneaky trade practices
Japan Times
Singapore is getting caught up in the geopolitical and geo-economic conflict between the US and China, as seen in the recent probe into TikTok. The CEO of TikTok, Shou Zi Chew, who is Singaporean, faced questioning about his allegiances and the platform's connections to the Chinese Communist Party. Chew denied any connections and cited his Singaporean citizenship and military service. This incident highlights Singapore's unintentional involvement in the US-China rivalry.
Chinese planemaker COMAC upstages Airbus and Boeing at Singapore Airshow
Yahoo US
China's state-owned planemaker COMAC showcased its domestically developed C919 and ARJ21 aircraft at the Singapore Airshow this week as it seeks international certification and foreign orders. COMAC's C919 is a rival to the Boeing 737 Max and Airbus A320neo family single-aisle jets and flew for the first time outside Chinese territory. It has so far attracted more than 1,000 orders, largely from Chinese airlines and lessors.
China claims it drove off Philippine ship from disputed Scarborough Shoal
South China Morning Post
The Chinese coastguard has claimed to have driven off a Philippine ship that had "illegally intruded" into waters near Scarborough Shoal in the South China Sea. The claim was disputed by the Philippines, with the Philippine coastguard stating that the ship was still patrolling in waters near the shoal. Last week, Manila announced that coastguard and fisheries vessels would be sent to the shoal to protect Filipino fishermen in the area. Scarborough Shoal, a rich fishing ground, is claimed by both China and the Philippines.
China Turns to LNG Spot Market With Prices at Three-Year Low
Bloomberg
Chinese liquefied natural gas (LNG) importers are seeking cheap shipments from the spot market as prices have fallen to their lowest level since 2021. LNG buyers, including Shenzhen Energy Group and China Gas Holdings Ltd., are in talks with potential suppliers for additional cargoes in the coming months. The drop in spot prices has made LNG more cost competitive with local gas options and oil products. However, Chinese LNG spot demand remains subdued compared to the surge in buying last month ahead of the Lunar New Year holiday. Asian LNG prices are expected to continue to decline as ample supply outstrips spot purchases, particularly as the peak winter demand season ends. Chinese LNG imports are recovering from a slump in 2022, with January imports up nearly 30% year-over-year, although still about 8% lower than the same month in 2021. Domestic trucked LNG prices in China have also fallen about 16% so far this year, indicating weak domestic gas consumption.
US targets China’s top chipmaking plant after Huawei Mate 60 Pro, sources say
South China Morning Post
The Biden administration has suspended permission for US suppliers to sell to Semiconductor Manufacturing International Corp's (SMIC) most advanced factory, which reportedly produced a chip for Huawei's Mate 60 Pro phone. SMIC is a top Chinese chip maker that has been sanctioned by the US, and the move is part of the Biden administration's efforts to stem the flow of US technology to the company and degrade its ability to make sophisticated chips. SMIC has yet to respond to the move, but the Chinese embassy in Washington called it "economic bullying".
China Stock Rally Takes Breather as Traders Weigh Support Steps
Bloomberg
Chinese shares were volatile on Thursday as traders assessed the latest measures implemented by Beijing to stabilise the stock market. The benchmark CSI 300 Index of onshore shares fluctuated between a 0.6% rise and 0.2% gain, after a seven-session advance. The measures include restrictions on equity net sales and a ban on major institutional investors reducing equity holdings at the open and close of each trading day.
Greed Returns to China’s Stock Market as Policy Buoys Confidence
Bloomberg
Investors in Chinese equities are becoming more optimistic as efforts by policymakers to stabilize the stock market boost confidence. The Fear and Greed indicator for the CSI 300 Index has reached its highest level since January, indicating potential strength for the gauge. Sentiment has been boosted by measures such as a ban on reducing equity holdings and tighter supervision of quantitative trading.
‘Quant quake’: Man Group says China stock market rout mirrors 2007 US meltdown
South China Morning Post
China's recent market turmoil was exacerbated by quantitative funds, as they stampeded to exit positions. This mirrored the 2007 US episode when similar investors suffered an abrupt meltdown that roiled markets. The unwinding of these funds' positions was so massive that it spurred small-cap stocks to underperform by a historic margin, according to Man Group's Ziang Fang. Subsequent research found that the declines may have been the result of a chain of events, where quantitative portfolios being unwound fuelled the unravelling of other similar portfolios.
Rise of fast-fashion Shein, Temu roils global air cargo industry
Japan Times
Fast-fashion e-commerce retailers like Shein and Temu are disrupting the global air cargo industry as they compete for limited air-cargo space to meet consumer demand for fast shipping times. These companies primarily ship their products directly from Chinese factories to customers by air in individually addressed packages. The popularity of these retailers is driving up air-freight costs from Asian hubs and causing capacity shortages. Shein and Temu alone send nearly 600,000 packages to the US every day, according to a report by the US Congress.
Nvidia expects threefold jump in sales despite US chip curbs on China
South China Morning Post
Nvidia has forecast a threefold increase in quarterly revenue, beating estimates, due to high demand for its AI chips. The company's data centre chips and graphics processing units are experiencing growing demand as firms look to expand their AI offerings. Nvidia dominates the global market for AI chips, with customers including Microsoft. Analysts have questioned how long Nvidia can sustain its current pace of growth, but the company expects its supply chains to improve in the first half of the year.
Even China’s giants are picking Singapore over Hong Kong
Japan Times
Singapore has overtaken Hong Kong as the preferred choice for companies looking to establish their regional headquarters in Asia, according to a Bloomberg Intelligence report. Singapore is currently home to 4,200 multinational firms, compared to just 1,336 in Hong Kong. The report attributes Singapore's popularity to its better relations with the West, its broader talent pool, diversified economy, and tax incentives. It also notes that many Chinese companies are choosing Singapore over Hong Kong in order to hedge geopolitical risks and expand their reach.
China's Z-10 attack helicopter makes foreign debut, but export outlook uncertain
Yahoo US
China's AVIC showcased its Z-10 attack helicopter at the Singapore Airshow this week, marking the first time it has been displayed outside China. With only one known export customer, Pakistan, and no sales announced at the show, experts say the Z-10 may appeal to countries without access to US defence technology. However, the lack of experience in after-sales logistics and maintenance support from Beijing may be a challenge in selling the aircraft to other countries.
‘Culture of exaggeration’ threatens rigour, authority of China’s crop research
South China Morning Post
China's efforts to improve agricultural technology and ensure food security may be undermined by exaggerated figures in crop yield tests, according to state media. Many of the record-breaking yields reported in recent years have been massaged for publicity purposes, with local authorities and agricultural companies falsifying results to enhance their image or secure financial support. Beijing has placed increasing importance on food security, with President Xi Jinping labelling it a "top national priority". However, exaggerated figures in crop yield tests could undermine the authority of scientific research and hinder policymaking and situation analysis.
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