Americans can now visit China for up to 10 days without a visa；China’s ban on critical minerals to be felt across ‘all branches’ of US military
China urges 'right choice' after Trump says he and Xi can fix world
Welcome to this issue of The China Brief. Today is December 17, 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.
Americans can now visit China for up to 10 days without a visa
NBC NEWS
China said Tuesday it was expanding its visa-free transit policy, allowing Americans and other eligible foreign travelers to stay in parts of the country as long as 240 hours, or 10 days, as officials try to attract more overseas visitors.
China’s National Immigration Agency announced the measure, which is effective immediately, on its WeChat account, saying passport holders from 54 countries are eligible. They include countries in Europe, Latin America and Asia, as well as the United States and Canada.
Previously, travelers could stay in China visa-free for as long as 72 to 144 hours depending on where they visited, as long as they continued on to a third country or region.
Travelers with confirmed tickets to exit China within 10 days can enter the country in 60 places across 24 provinces, including the capital, Beijing, and China’s largest city, Shanghai. The expanded scheme also allows transit visitors to travel across regions during the 10 days, with some restrictions.
Visa waivers for transit passengers are popular among travelers, including Americans, who might otherwise be required to go through a tedious visa process for travel to China or elsewhere.
https://www.nbcnews.com/news/world/americans-can-now-visit-china-10-days-visa-rcna184476
China’s ban on critical minerals to be felt across ‘all branches’ of US military
South China Morning Post
China's recent export ban on critical minerals, including antimony, gallium, and germanium, is projected to disrupt over 1,000 U.S. weapons systems, according to a Govini report. The ban affects more than 20,000 parts used by the Pentagon and Coast Guard, with the Navy being the most impacted. The analysis highlights that 87% of supply chains for these minerals rely on Chinese suppliers. Amid escalating trade tensions, the U.S. is assessing the situation and aiming to diversify its supply chains away from China, which dominates global production of these critical minerals.
https://www.scmp.com/news/china/military/article/3291154/chinas-ban-critical-minerals-be-felt-across-all-branches-us-military?utm_source=rss_feed
China urges 'right choice' after Trump says he and Xi can fix world
Nikkei Asia
Chinese Foreign Minister Wang Yi expressed Beijing's willingness to engage in dialogue with the incoming U.S. administration to manage differences, following President-elect Donald Trump's optimistic remarks about U.S.-China cooperation. Wang emphasized the importance of stabilizing bilateral ties and resolving global challenges collaboratively. Despite prior tensions, including trade disputes and espionage accusations, communication resumed after high-level meetings between Biden and Xi. Wang also outlined China's diplomatic stance on various global issues and reiterated opposition to U.S. actions perceived as interference in China's internal affairs.
https://asia.nikkei.com/Politics/International-relations/China-urges-right-choice-after-Trump-says-he-and-Xi-can-fix-world
Biden Prepares to Target Chinese Legacy Chips With Trade Investigation
NY Times
The Biden administration is set to launch a trade investigation into China's production of older-model semiconductors due to concerns about national security and dependence on these products. The investigation, which could lead to tariffs or import bans, may begin in the coming weeks but could take at least six months to conclude. Despite previous efforts to limit China's access to advanced semiconductors, older chips remain vital for many products. U.S. officials worry that increased Chinese production of these chips, supported by government subsidies, could hurt domestic manufacturers and raise cybersecurity risks. The administration is considering two legal avenues for the investigation: Section 232 of the Trade Expansion Act and Section 301 of the Trade Act of 1974.
https://www.nytimes.com/2024/12/16/business/economy/biden-china-chips-investigation.html
Trump meeting with TikTok CEO at Mar-a-Lago as company asks Supreme Court to intervene in fight over federal ban
CNN
President-elect Donald Trump met with TikTok CEO Shou Chew at Mar-a-Lago as TikTok appeals to the Supreme Court over a law requiring its sale or facing a ban in the U.S. The law, signed by President Biden, is set to take effect January 19 due to national security concerns regarding its Chinese parent company, ByteDance. TikTok argues the ban violates First Amendment rights and has requested an emergency ruling from the Supreme Court to pause the law, allowing time for the new administration to formulate its stance on the platform.
https://edition.cnn.com/2024/12/16/tech/tiktok-ceo-trump-supreme-court/index.html
Policy support sees China’s tax revenue rise for second straight month
South China Morning Post
China's tax revenue showed a 5.3% year-on-year increase in November, reaching 1.11 trillion yuan (approximately US$152.4 billion), marking the second consecutive month of growth. This increase was supported by government policies aimed at boosting the economy amidst a struggling property market and rising local government debt. Notable improvements were seen in corporate income tax, domestic value-added tax, export rebates, and stamp duty. Overall public budget revenue rose by 11%, the first double-digit growth since June of the previous year. However, consumption tax growth slowed significantly to 0.7%, reflecting weak retail sales growth, which was only 3% year-on-year. Local governments continue to face challenges with declining land sales revenue, which fell by 19.7%, further straining their finances. In response, the Chinese government has announced an additional bond quota of 6 trillion yuan to address local governments' hidden debt issues.
https://www.scmp.com/economy/china-economy/article/3291211/policy-support-sees-chinas-tax-revenue-rise-second-straight-month?utm_source=rss_feed
Chinese IPOs surge in Hong Kong as Minieye, Guming line up listings
South China Morning Post
Chinese companies are increasingly listing shares in Hong Kong, with Minieye Technology pricing its IPO to raise up to HK$783 million and Guming reviving its plans for a US$300 million to US$500 million IPO. This trend is expected to strengthen Hong Kong's exchange in 2025, following an 80% increase in fundraising to HK$83.4 billion this year. Despite a slump in the IPO market in 2023, successful listings like Mao Geping Cosmetics have boosted investor sentiment, prompting more Chinese firms to seek capital overseas, supported by recent regulatory approvals.
https://www.scmp.com/business/banking-finance/article/3291195/chinese-ipos-surge-hong-kong-minieye-guming-line-listings?utm_source=rss_feed
Alibaba to lose US$1.3 billion on Intime sale in retreat from offline retail
South China Morning Post
Alibaba Group is incurring a 9.3 billion yuan (US$1.3 billion) loss from selling its entire stake in Intime, a major Chinese department store chain, to a consortium led by Youngor Group. The sale, valued at around 7.4 billion yuan, marks Alibaba's exit from offline retail to focus on core businesses like e-commerce and cloud computing. This divestment aligns with Alibaba's restructuring strategy, as it faces challenges from the pandemic and increased competition. The company plans to adopt an "asset-light" approach, having previously invested heavily in Intime since 2014.
https://www.scmp.com/tech/big-tech/article/3291191/alibaba-lose-us13-billion-intime-sale-retreat-offline-retail?utm_source=rss_feed
Prince Andrew spy scandal may have further exposed threat posed by China
Guardian
Prince Andrew has been credited with highlighting the threats posed by the Chinese state to free nations, according to China expert Charles Parton. The UK-China relationship has shifted dramatically over the past decade, with increasing espionage cases and cyber threats from China. Recent incidents, including the exclusion of Chinese businessman Yang Tengbo from the UK over concerns he may be an agent of the Chinese government, reflect growing mistrust. British spy agencies perceive China's ambitions as hegemonic, raising concerns about potential political leverage against the UK amidst deteriorating relations.
https://www.theguardian.com/world/2024/dec/16/prince-andrew-spy-scandal-may-have-further-exposed-threat-posed-by-china
Where the US-China trade war meets AI hype
Financial Times
Germany is poised for early elections after Chancellor Olaf Scholz lost a vote of confidence, though market reactions remained muted with steady stock and bond yields. Meanwhile, the semiconductor sector, which has thrived amid AI hype, is now impacted by ongoing U.S.-China trade tensions. U.S. efforts to limit chip sales to China intensified, particularly with recent bans on advanced chips and manufacturing tools, leading to a mixed market response. Most semiconductor stocks have declined since July due to wavering demand, with companies like Intel and Samsung facing challenges. While established toolmakers such as KLA, Lam Research, and ASML have historically performed well, recent regulations pose potential revenue risks as Chinese companies might pivot toward developing domestic capabilities. CFOs from major firms maintain that global wafer demand drives their modeling, suggesting a cautious optimism despite geopolitical strains. However, some analysts warn that the bans could significantly impact revenues and market share, with China likely to establish its own equipment industry, potentially diminishing the competitive edge of U.S. and allied firms.
https://www.ft.com/content/2e02741b-cc63-434d-ad8c-3d0e5c4df59f
China building world’s biggest artificial-island airport in Dalian
South China Morning Post
China is constructing the Dalian Jinzhouwan International Airport, which will be the world's largest artificial-island airport, covering an area of 20 square kilometers. This airport aims to enhance Dalian's status as a regional transport hub, facilitating business with neighboring Japan and South Korea. The project, costing $4.3 billion and expected to be completed by 2035, will feature four runways and a terminal capable of handling up to 80 million passengers annually. Currently, Dalian's existing airport has reached its capacity and poses navigational challenges due to its valley location. The new airport is part of a broader initiative, with 22 airports under construction across China, valued at a total of $19.6 billion.
https://www.scmp.com/economy/china-economy/article/3291112/china-building-worlds-biggest-artificial-island-airport-dalian?utm_source=rss_feed
China extends visa-free transit policy to 10 days as part of efforts to lure more foreign tourists
CNN
China has announced an expansion of its visa-free layover period for foreign visitors from 72 hours and 144 hours to 240 hours (10 days), in an effort to attract more tourists. This change, implemented by the Chinese State Administration of Immigration, allows travelers with existing flight bookings to enter the country visa-free for a short period before continuing to a third destination. The program is available to citizens from over 50 countries, including the United States, though travelers are restricted to the area surrounding the city of arrival. Since reopening after the Covid-19 pandemic, China has seen a significant increase in foreign visitors, with over 29 million entering from January to November 2024, and 17 million using the visa-free program. Additionally, China has made other changes to facilitate tourism, such as allowing non-Chinese credit cards in major payment apps and requiring international credit card acceptance at tourist attractions and hotels.
https://edition.cnn.com/2024/12/16/travel/china-240-hour-transit-visa-intl-hnk/index.html
Dollar set to extend Trump rally, says Wall Street
Financial Times
Wall Street anticipates further gains for the US dollar, despite President-elect Donald Trump's preference for a weaker currency. The dollar has surged 6.1% since October, with major banks forecasting continued strength. Trump's policies, including tax cuts and tariffs, are seen as dollar-positive, potentially leading to higher interest rates and attracting foreign investment. Analysts doubt Trump can effectively weaken the dollar and suggest his administration's efforts may risk undermining its global reserve status. While the dollar's rally has paused, few believe Trump's rhetoric can significantly impact its strength.
https://www.ft.com/content/894f0918-564b-464d-833d-5cf74c3ba0d2
China’s Slowdown Has Changed the Trade War
Foreign Affairs
The economic landscape that President-elect Donald Trump will encounter in China by 2025 is markedly different from what he faced at the beginning of his first term. China's share of the global economy has diminished, dropping from over 18 percent of global GDP in 2021 to around 16 percent today. The country's economic growth has significantly slowed due to a collapse in the property sector and COVID-related restrictions, resulting in a reliance on exports to create growth since domestic demand cannot absorb its vast production. This situation presents the U.S. with new opportunities to constrain China's economic influence, allowing Washington to leverage its consumer and capital markets to offer alternatives to its allies.
As the U.S. considers its approach to tariffs, there is a need for careful evaluation to avoid detrimental effects on global economies. Trump has suggested steep tariffs on Chinese imports, but such broad measures could trigger adverse chain reactions in Western economies. A more effective strategy would involve selective tariffs on critical sectors where Chinese exports threaten Western competitiveness, combined with proactive investments to build supply chains that exclude China. The U.S. and its allies have an opportunity to restructure the global trading system in alignment with national security goals, but any tariffs imposed will likely lead to economic disruption and retaliation from China.
Despite its current challenges, China still retains the ability to counter U.S. efforts through currency manipulation and strategic investments to maintain its export market share. However, the growing international dissatisfaction with China's trade practices, coupled with the economic slowdown, provides the U.S. with leverage to form coalitions with other nations to de-risk supply chains. The U.S. should focus on moderate tariffs and bolster investments in alternative manufacturing sectors to offset the impact of any trade restrictions while fostering a sustainable global trading environment. The success of these strategies will depend on the Trump administration's commitment to building a more secure and resilient manufacturing base.
https://www.foreignaffairs.com/united-states/chinas-slowdown-has-changed-trade-war
World-leading Chinese cancer scientist Sun Shao-Cong has left US for Beijing
South China Morning Post
World-renowned cancer researcher Sun Shao-Cong has returned to China after three decades in the U.S. to establish a new lab in Beijing, following investigations by the U.S. government regarding his ties to China. Sun, previously the director at the University of Texas MD Anderson Cancer Centre, focuses on T cell research and has received over $24 million in funding from NIH. His move comes amid ongoing scrutiny of China-born researchers in the U.S., despite the termination of the Department of Justice's China Initiative in 2022. Sun aims to study anticancer immunity and inflammatory diseases at the Chinese Institutes for Medical Research.
https://www.scmp.com/news/china/science/article/3291009/world-leading-chinese-cancer-scientist-sun-shao-cong-has-left-us-beijing?utm_source=rss_feed
In death, romance novelist Chiung Yao strikes a chord for women’s freedom
South China Morning Post
Taiwanese romance novelist Chiung Yao passed away, leaving a farewell letter celebrating female independence and autonomy. Her novels and adaptations were immensely popular in the 1980s and 1990s, resonating with women yearning for intense romance. However, as societal values evolved, the allure of melodramatic love stories waned, replaced by narratives focusing on strong, independent female leads. This shift reflects a broader global trend away from traditional romance towards themes of empowerment and self-determination. Chiung Yao's legacy now serves as a poignant reminder of women's freedom to make their own choices in a changing cultural landscape.
https://www.scmp.com/opinion/china-opinion/article/3290558/death-romance-novelist-chiung-yao-strikes-chord-womens-freedom?utm_source=rss_feed
Chinese firms forge ties with UAE as Gulf nation acts as ‘superconnector’ in global trade
South China Morning Post
Chinese companies are increasingly partnering with the UAE, which serves as a “superconnector” between East and West, expanding into innovative sectors such as renewable energy and consumer tech. HSBC UAE's CEO, Mohamed Al Marzooqi, noted that significant infrastructure projects are being undertaken by Chinese firms, with nearly 50% of current UAE renewable projects involving them. Bilateral trade reached $95 billion in 2023, with ongoing investments and collaboration expected to grow. The Abu Dhabi Global Market aims to enhance cooperation with China, focusing on mutual investments and the development of a diversified economy.
https://www.scmp.com/business/article/3290988/chinese-firms-forge-ties-uae-gulf-nation-acts-superconnector-global-trade?utm_source=rss_feed
China’s integrated circuit output slows in November while imports climb amid stockpiling
South China Morning Post
China's integrated circuit (IC) output rose 8.7% year on year to 37.6 billion units in November, marking a slowdown in growth amid the ongoing US-China tech war and stricter chip restrictions. This is the first time this year that IC output growth has fallen to single digits. For the first 11 months of the year, total IC output increased by 23.1% to 395.3 billion units. The overall industrial output in China also grew by 5.4%.
The semiconductor industry has become a focal point in the US-China rivalry, with the US recently tightening restrictions on China's chip sector by imposing export controls and adding more Chinese organizations to its trade blacklist. In retaliation, China has initiated an antitrust probe into Nvidia. Despite these challenges, strong demand from sectors like robotics and electric vehicles has supported China's IC production, with significant year-on-year increases in both industries.
China exported 271.6 billion ICs, with a value of nearly $145 billion, indicating a continued production momentum. Key export destinations include Hong Kong, South Korea, and Taiwan, while major domestic hubs include Guangdong and Shanghai. Meanwhile, imports of ICs also increased, with companies stockpiling chips in anticipation of further sanctions. Experts are advocating for the development of a domestic technological ecosystem to mitigate the impact of foreign restrictions on advanced chip technologies.
https://www.scmp.com/tech/big-tech/article/3291044/chinas-integrated-circuit-output-slows-november-while-imports-climb-amid-stockpiling?utm_source=rss_feed
TikTok asks U.S. Supreme Court for emergency order to block upcoming ban
CBC
TikTok has requested the U.S. Supreme Court to block a law set to ban the platform unless its parent company, ByteDance, sells it, with a deadline of January 19. This appeal comes after a federal court denied an emergency plea to halt the law. TikTok argues that a short delay would allow for an orderly review and avoid significant user and revenue loss. The case raises issues of free speech versus national security and could prompt the Court to consider First Amendment implications. The Supreme Court's decision is expected before the law takes effect.
https://www.cbc.ca/news/business/tiktok-ban-supreme-court-1.7411997
China companies count data holdings as assets under new accounting rules
Nikkei Asia
Chinese companies are increasingly recording data as assets on their balance sheets due to new government rules aimed at influencing international accounting standards. China Unicom, the third-largest wireless carrier, is leading this trend, valuing its data assets at approximately $28 million. Under the new accounting regulations, companies can classify legally owned data that is expected to generate economic benefits as inventory, intangible assets, or development expenditures. By the end of September, 52 public companies had reported data assets totaling about $150 million. This trend spans various industries, including telecommunications, genomics, and healthcare. However, there are concerns about the potential for overvaluation of data assets, which could lead to inflated company valuations and create a data bubble. The Chinese government is pursuing this initiative to promote a "digital China" and to position itself in global discussions on accounting standards.
https://asia.nikkei.com/Business/Technology/China-companies-count-data-holdings-as-assets-under-new-accounting-rules
US-China working groups on economy, finance meet as future in doubt under Donald Trump
South China Morning Post
The US and China recently held potentially final working-group meetings on economics and finance ahead of Donald Trump's anticipated return to the presidency, which may reignite trade tensions. The discussions, involving Treasury officials and Chinese finance leaders, addressed concerns over China's nonmarket practices and its support for Russia amid the Ukraine war. While Biden has maintained tariffs from Trump's era, Trump has pledged to impose even higher tariffs. Both countries are focusing on economic strategies to address sluggish performance and trade restrictions, with recent stimulus measures in China aiming to boost consumption and attract foreign investment.
https://www.scmp.com/news/china/diplomacy/article/3291083/us-china-working-groups-economy-finance-meet-future-doubt-under-donald-trump?utm_source=rss_feed
Trump says China, US can work together to ‘solve all of the world’s problems’
South China Morning Post
President-elect Donald Trump expressed optimism about U.S.-China cooperation to address global issues, commenting on his relationship with Chinese President Xi Jinping during a press conference at Mar-a-Lago. Trump highlighted his past discussions with Xi and softened his stance on TikTok, stating he has a "warm spot" for the app. While Xi's attendance at Trump's inauguration remains uncertain, analysts suggest the invitation signals a desire for improved relations. Some experts believe Trump aims for a "grand statesman" image and a Nobel Peace Prize by fostering collaboration with Xi on global peace efforts, including the Russia-Ukraine conflict.
https://www.scmp.com/news/china/diplomacy/article/3291081/trump-says-china-us-can-work-together-solve-all-worlds-problems?utm_source=rss_feed
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