China Extends Homebuying Easing to Beijing in Policy Boost; Chinese envoy to U.S. revives ping-pong diplomacy after 52 years
China’s economy is forecast to slow sharply in 2024, the World Bank says, calling recovery ‘fragile’
Welcome to this issue of The China Brief. Today is December 14, 2023. 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 Extends Homebuying Easing to Beijing in Policy Boost
Bloomberg
Chinese authorities have relaxed homebuying restrictions in Beijing in an effort to stem the country's housing downturn. The down-payment ratio for second homes has been cut to 40% or 50%, depending on location, compared to the previous threshold of 60% or 80%. The down-payment ratio for first homes has also been lowered to 30% from 35% or 40%. Beijing has also expanded the definition of non-luxury homes to allow more residences to qualify for lower mortgage thresholds. The move is the latest effort to stabilise the country's real estate market, which accounts for about 20% of the economy.
Chinese envoy to U.S. revives ping-pong diplomacy after 52 years
Nikkei Asia
Chinese Ambassador Xie Feng has invited Connie Mae Sweeris, one of the nine players from a US table tennis team that travelled to China in 1971, to an event at the Chinese Embassy in the US. The visit made by the US table tennis team to China in 1971 paved the way for President Richard Nixon to visit China the following year. This event was an attempt to highlight one of the warmer periods of bilateral relations between the two countries.
Janet Yellen says the Trump administration's China policies left the US more vulnerable
Yahoo US
Treasury Secretary Janet Yellen says former President Donald Trump's policies toward China left America “more vulnerable and more isolated” in the global economy, a rare jab by her at the front-runner for the Republican presidential nomination. Yellen, in prepared remarks to be delivered at a U.S.-China Business Council event Thursday night, says the Trump administration “failed to make investments at home in critical areas like infrastructure and advanced technology, while also neglecting relationships with our partners and allies that had been forged and strengthened over decades.”
Chinese AI startup 01.AI looks to raise $200 million -sources
Yahoo US
Chinese AI start-up 01.AI is raising $200m in a bid to capitalise on its rising valuation of $1bn that it reached recently, due to increased international interest in open-source AI models. The firm is one of several in China looking to gain users by opening its large language models (LLM) to public use. 01.AI was launched in July by Lee Kai-fu, a former chief of Google China. The news comes as the market leader OpenAI criticised the trend of open-sourcing LLMs.
With eye on China, Japan and ASEAN to unveil ‘new vision’ for ties
Japan Times
Japan and the Association of Southeast Asian Nations (ASEAN) will announce a "new vision" for cooperation at a summit in Tokyo this weekend. The summit, which marks 50 years of bilateral relations, will result in a joint statement and implementation plan focusing on regional peace and stability, people-to-people exchanges, and the co-creation of a future economy and society. The cooperation initiatives will cover areas such as supply chains, sustainability, digitization, and renewable energies. Japan is seeking to align ASEAN with its strategy for a "Free and Open Indo-Pacific" amid concerns over China's growing assertiveness.
Taiwan Holds Rate Before Vote, Noting Risk From China Slowdown
Bloomberg
Taiwan's central bank has decided to maintain interest rates at their highest level in eight years ahead of the country's critical January election. The benchmark interest rate will remain at 1.875%, where it has been since March. The central bank lowered its economic growth forecast for this year to 1.4% but raised its outlook for next year to 3.12%. The bank also warned of the downside risks to Taiwan's economy from China's slowing economy. Stubbornly high consumer prices and inflation pressures are also concerns for policymakers. The central bank's response to inflation will be closely watched in the lead-up to the presidential vote.
China’s economy is forecast to slow sharply in 2024, the World Bank says, calling recovery ‘fragile’
Associated Press
The World Bank has said that China's economy will slow next year, with annual growth falling to 4.5% from 5.2% this year. The recovery from the pandemic has been "fragile" and the economy is dogged by weakness in the property sector, weak global demand for Chinese exports, high debt levels, and wavering consumer confidence. The World Bank's forecast is in line with other estimates, and growth is expected to slow further in 2025. The report highlights the need for China to pursue broad structural reforms and improve consumer spending to sustain solid growth.
China rules Ladakh court judgment ‘irrelevant’ to its border dispute with India
South China Morning Post
China has dismissed the Indian Supreme Court's ruling on the legal status of Ladakh as "irrelevant" to its territorial claims in the region. The ruling supported the Indian government's decision to revoke the special status of Jammu and Kashmir state and bring it under federal administration. China has never recognized Ladakh as a union territory set up by India. The ruling came after China and India's diplomatic talks aimed at resolving their border dispute. Tensions persist along the Line of Actual Control, which separates Indian and Chinese-controlled territories. Both countries maintain a substantial military presence along the border.
A leader of Taiwan’s Nationalist Party visits China as the island’s presidential election looms
Associated Press
A leader of Taiwan’s main opposition Nationalist Party has visited China in the run-up to the country’s presidential and legislative elections, both of which are set to take place on 11 January. The Nationalists are seeking to regain power from the ruling Democratic Progressive Party (DPP), which has been shunned by China for its insistence that Taiwan is an independent country. China claims Taiwan is part of its territory. The Nationalists’ visit to China has raised concerns that Beijing will seek to influence the election by offering favours and spreading disinformation.
S Korea scrambles jets after Chinese, Russian aircraft enter defence zone
Al Jazeera
South Korea has deployed fighter jets in response to Chinese and Russian military planes flying into its air defence zone without prior notice. The planes crossed into the Korea Air Defense Identification Zone (KADIZ) over the Sea of Japan, but did not violate South Korea's territorial airspace. South Korea detected the foreign aircraft before they entered the KADIZ and scrambled its own fighter jets. South Korea raised objections with China, but did not address the issue with Russia. China and Russia are traditional allies of North Korea, and the US has warned of growing military ties between Pyongyang and Moscow. This is not the first time that Chinese and Russian warplanes have approached South Korea's airspace.
GoTo Struck Tiktok Deal to Halt Market Share Slide, CEO Says
Bloomberg
GoTo Group CEO, Patrick Walujo, has stated that the company agreed to partner with TikTok in order to avoid further market share losses in online shopping in Indonesia. Walujo noted that TikTok Shop's market share more than doubled this year to 11%, while GoTo's share decreased to 23% from 28%. TikTok recently agreed to invest $1.5 billion in a joint venture with GoTo, which will be controlled by TikTok and allow the Chinese company to address regulatory obstacles in the Indonesian market. GoTo will become a passive backer of the venture and relinquish control of its Tokopedia e-commerce arm. Walujo believes that the partnership will give GoTo a high chance of becoming the number one player in a much larger market. GoTo shares rose by as much as 9% in Jakarta following the announcement.
Xi-Biden meeting a ‘milestone’ in US-China ties: top envoy
South China Morning Post
The recent meeting between Chinese President Xi Jinping and US President Joe Biden in San Francisco was a "milestone" in the China-US relationship, according to Beijing's envoy to Washington. The meeting, which marked the first face-to-face encounter between the two leaders in a year, resulted in agreements on fentanyl trafficking, military communications and artificial intelligence. The envoy also called for good sportsmanship in bilateral relations, emphasising the importance of respecting and learning from each other and abiding by the rules of the game.
Nickel price nosedive, lack of Chinese demand send key Kimberley miner into administration
ABC
Panoramic Resources, the operator of one of Western Australia's nickel mines, has entered voluntary administration due to falling nickel prices. The company launched a strategic review last month in an attempt to combat the declining price, but it was unsuccessful. Nickel prices have dropped by 44% in the past year due to concerns about a global recession and a lack of Chinese interest in the mineral. China has been sourcing more of its nickel from Indonesia, which has negatively impacted the Australian nickel market. Despite the administration, mining operations at the Savannah nickel mine will continue for the time being.
Coal mine accident kills 3 in northern China’s Shanxi province, a major coal-producing region
Associated Press
Three people have died in an accident at a coal mine in northern China's Shanxi province. The cause of the accident is unclear. This incident comes after a coal mine explosion killed 11 in Shanxi in August, and a coal mine fire in Guizhou province killed 16 in September. China has been working to improve mine safety to combat accidents, which occur frequently in the country.
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