China risks catastrophic errors if anti-corruption crackdown eases, Xi Jinping warns
ByteDance’s latest export after TikTok: gripping Chinese short dramas；Chinese tech giants Tencent, CATL and others protest US listings as army-linked companies
Welcome to this issue of The China Brief. Today is January 7, 2025. 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.
ByteDance’s latest export after TikTok: gripping Chinese short dramas
South China Morning Post
ByteDance, the parent company of TikTok, has launched a new short-drama app called Melolo in Southeast Asia to replicate the success of online miniseries in China. The app, released in November by ByteDance subsidiary Poligon, offers free short dramas that typically last a few minutes and feature engaging plot twists. Currently available in Indonesia and the Philippines, Melolo aims to explore new business opportunities and may expand to Western markets. ByteDance is actively recruiting for roles to adapt Chinese dramas for European and American audiences, indicating a strategic move towards international growth.
Recent data suggests a significant increase in the consumption of short dramas, with the US identified as the largest market. However, the company faces challenges due to increased regulations in China, which have resulted in the closure of channels for self-produced mini dramas and a requirement for licensing reviews before broadcasting. In response to content oversight concerns, ByteDance's Hongguo brand has paused new series launches to comply with regulations, alongside commitments from other platforms to address inappropriate content.
https://www.scmp.com/tech/big-tech/article/3293769/bytedances-latest-export-after-tiktok-gripping-chinese-short-dramas?utm_source=rss_feed
Chinese tech giants Tencent, CATL and others protest US listings as army-linked companies
Associated Press
The U.S. Defense Department has added dozens of Chinese companies, including Tencent, SenseTime, and CATL, to its list of "Chinese Military Companies," citing ties to China's military. This decision is part of the U.S. effort to restrict advanced technology sharing deemed a national security threat. Companies like Tencent and CATL dispute their inclusion, claiming it is a mistake and plan to seek legal recourse. The designation, effective June 2026, prohibits Department of Defense dealings with these companies. China’s government has criticized the U.S. for its actions, calling them discriminatory and harmful to Chinese firms.
https://apnews.com/article/tencent-catl-sensetime-china-military-2fd0859958f39e0b1684eac6a49dda96
US ‘going after Chinese companies’: Beijing slams new list alleging military-civil fusion
South China Morning Post
The Pentagon has added five more Chinese companies, including tech giant Tencent, to a list of firms it claims support the Chinese military, prompting strong criticism from China. Chinese foreign ministry spokesman Guo Jiakun denounced the move as an overreach of national security concepts and called for the U.S. to rectify its actions and cease unilateral sanctions against Chinese companies. The U.S. Department of Defense's decision is part of broader efforts to counter China's military-civil fusion strategy, totaling 134 companies on the list. Although the designation has no legal consequences, it could harm the listed firms' reputations and lead to sanctions from the U.S. Treasury. The Chinese embassy in Washington criticized the action as an unreasonable suppression of Chinese businesses, arguing it could undermine foreign investment confidence in the U.S. Tencent described its inclusion as a mistake, asserting it is not a military company.
https://www.scmp.com/news/china/diplomacy/article/3293753/us-going-after-chinese-companies-beijing-slams-new-list-alleging-military-civil-fusion?utm_source=rss_feed
Powerful earthquake kills nearly 100 in Tibet
Nikkei Asia
A magnitude 6.8 earthquake struck the northern Himalayas near Tibet, killing at least 95 people and injuring 130. The quake, centered in Tingri, occurred at a depth of 10 km and was felt across Nepal, Bhutan, and India. Chinese authorities mobilized over 1,500 rescue workers and dispatched relief supplies to aid affected residents. Despite the tremors being felt in Kathmandu, no fatalities were reported there. This region is prone to earthquakes due to tectonic plate collisions, and responses included closing the Everest area to tourists.
https://asia.nikkei.com/Economy/Natural-disasters/Powerful-earthquake-kills-nearly-100-in-Tibet
The man making a business out of China’s burnout generation
Guardian
Li Jianxiong narrates his life story as one of transformation, describing his journey from the struggles of growing up as a farmer's son in rural China to becoming a successful marketing executive in Beijing. By 2017, Li had built a life filled with material success, yet he found himself consumed by the intense demands of China's "996" work culture, ultimately leading to a severe personal crisis characterized by insomnia and physical distress. In 2018, he made the pivotal decision to leave his high-pressure job, embarking on a path of self-discovery through various psychological and spiritual practices, including travel and study of different philosophies.
His second life culminated in April 2021 when he founded Heartify, a mutual-support community for individuals suffering from burnout, inspired by the structure of Alcoholics Anonymous. Initially starting with a small group, Heartify has grown exponentially, providing wellness classes and workshops that explore therapeutic methods and promote personal healing. Li’s own struggles and the broader societal disillusionment experienced by many in China’s middle class have motivated this initiative, as individuals increasingly question the value of relentless striving in a stagnant economy where opportunities seem to diminish.
Li's story reflects a wider cultural shift within China, where post-pandemic realizations have prompted a focus on mental health and personal well-being over traditional success metrics. Heartify exemplifies a growing movement towards communal spaces for self-exploration amid a society grappling with issues of materialism and disillusionment with the "Chinese Dream." As more individuals seek to redefine their lives, Li acts as a guide, helping others navigate their personal challenges in a rapidly changing social landscape, ultimately fostering a sense of community and connection amidst the chaos.
https://www.theguardian.com/news/ng-interactive/2025/jan/07/the-man-making-a-business-out-of-chinas-burnout-generation
CES 2025: Nvidia CEO takes centre stage with new consumer graphics card for gaming, AI
South China Morning Post
Nvidia's founder and CEO, Jensen Huang, showcased the company's latest advancements at the CES trade show in Las Vegas, highlighting the launch of the GeForce RTX 50 Series graphics cards, including the RTX 5090, which boasts 92 billion transistors and delivers over 3,352 trillion AI operations per second. Priced at $1,999, the RTX 5090 is the fastest consumer-grade GPU to date, outperforming its predecessor, the 4090. The new series also includes the RTX 5080, 5070 Ti, and 5070, with prices ranging from $549 to $999. Huang also introduced various AI-focused products, including the COSMOS platform for developing AI systems and Project DIGITS, a personal AI supercomputer starting at $3,000. Despite the geopolitical tensions surrounding the tech industry, Huang did not address these issues during his keynote.
https://www.scmp.com/tech/big-tech/article/3293740/ces-2025-nvidia-ceo-takes-centre-stage-new-consumer-graphics-card-gaming-ai?utm_source=rss_feed
China's 3rd semiconductor 'Big Fund' starts spending $47bn war chest
Nikkei Asia
China has initiated a 344 billion yuan ($47 billion) state-backed investment fund aimed at bolstering its domestic chip industry in response to potential U.S. export restrictions under President Donald Trump. The third round of the China Integrated Circuit Industry Investment Fund, known as the Big Fund, has already invested around 93 billion yuan in collaboration with Huaxin Investment Management, which is backed by the China Development Bank. Huaxin has previously managed investments from the first two phases of the Big Fund and has invested in companies like Hua Hong Semiconductor and Hangzhou Fuxin Semiconductor. The third phase aims to attract additional external funding to support chip companies, with a focus on manufacturing materials. Additionally, a new government-affiliated semiconductor fund was established in late 2024, contributing to the overall investment of 164 billion yuan in this phase. The Big Fund's previous phases invested approximately 140 billion yuan and 200 billion yuan, respectively, since its inception in 2014 as part of China's Made in China 2025 initiative to enhance its high-tech industries.
https://asia.nikkei.com/Business/Tech/Semiconductors/China-s-3rd-semiconductor-Big-Fund-starts-spending-47bn-war-chest
A battle is brewing over tariffs among Trump’s team
CNN
President-elect Donald Trump is advocating for universal tariffs on imports, maintaining his campaign proposals of a 10% tariff on all imports and a 60% tax on goods from China. His advisers are discussing plans to implement these tariffs, possibly starting with specific critical industries to address trade imbalances and boost U.S. manufacturing. Although discussions are ongoing, no final decisions have been made. Trump criticized a Washington Post article suggesting his tariff policy would be scaled back, asserting that it was incorrect. His economic team is debating the best approach to implement these tariffs while minimizing negative impacts on the stock market and consumer prices. Key figures in his administration, including Treasury Secretary nominee Scott Bessent and Commerce Secretary pick Howard Lutnick, have varied opinions on the universality of the tariffs. Jared Kushner emphasized the need for a level playing field in international trade.
https://edition.cnn.com/2025/01/06/economy/trump-team-battle-brewing-over-tariffs/index.html
US cloud services firm Akamai to cease CDN operations in China by June 2026
South China Morning Post
Akamai Technologies will terminate its content delivery network (CDN) services in mainland China by June 30, 2026, citing geopolitical challenges and a shift towards local partnerships with Tencent and Wangsu. This move follows a trend of foreign tech firms scaling back operations in China. Akamai will assist current customers in transitioning to these local providers to ensure uninterrupted service. Despite the CDN exit, Akamai remains committed to the Chinese market, emphasizing ongoing support for businesses operating within the country. The company’s CDN business, which contributes significantly to its revenue, faces macroeconomic pressures.
https://www.scmp.com/tech/tech-trends/article/3293735/us-cloud-services-firm-akamai-cease-cdn-operations-china-june-2026?utm_source=rss_feed
Biden killed US Steel deal even though some US officials rejected national security concerns
CNN
President Biden blocked the $14 billion acquisition of US Steel by Japan's Nippon Steel, citing national security concerns, despite mixed opinions from top officials. The decision has garnered praise from union leaders but faced criticism for being politically motivated rather than based on legitimate security risks, as indicated by a lawsuit from US Steel and Nippon Steel. While some CFIUS members believed risks could be mitigated, others raised concerns. The move marks an unusual instance of blocking a deal from a close ally, with Biden's administration emphasizing the importance of domestic steel production.
https://edition.cnn.com/2025/01/06/business/us-steel-biden-japan-nippon/index.html
How to Win the New Cold War
Foreign Affairs
Donald Trump’s 2024 presidential campaign draws notable parallels to Ronald Reagan’s 1980 campaign, utilizing similar slogans like “Make America great again” and “Peace through strength.” While many commentators often overlook these similarities due to the contrasting personalities of the two leaders, the historical context reveals instructive lessons. Reagan's administration played a critical role in forcing reforms in the Soviet Union that contributed to the end of the Cold War, a strategy that could serve as a model for Trump as he faces a renewed cold war, this time with China.
Reagan's approach combined initial displays of military strength with strategic negotiations, culminating in significant arms reduction agreements with Soviet leader Mikhail Gorbachev. This dual strategy of aggression followed by diplomacy proved effective in reducing tensions and achieving major foreign policy successes. Trump, who has always emphasized negotiation, might benefit from adopting a similar strategy in his dealings with China. By initially asserting American strength through trade and military readiness, he could later pivot toward negotiations aimed at decreasing the risk of conflict, much like Reagan did.
Despite the differences in economic conditions and political ideologies, both Trump and Reagan share a commitment to reducing government size and managing foreign policy crises. The modern geopolitical landscape, marked by tensions with China and other nations, resembles the precarious situation Reagan faced in the early 1980s. Trump’s potential success in navigating these challenges could redefine his presidential legacy, echoing Reagan’s transformation from a perceived risk-taker to a peace-bringing leader. In an era where past predictions of Reagan’s impact seemed improbable, history suggests that similar unexpected outcomes may lie ahead for Trump.
https://www.foreignaffairs.com/united-states/win-new-cold-war-china-trump-niall-ferguson
China's Honor to enter Indonesian market amid iPhone ban
Nikkei Asia
Chinese smartphone maker Honor Device is entering the Indonesian market, targeting the mid-to-high-end segment dominated by Samsung and Apple. President Justin Li emphasized Indonesia's growth potential, estimating a market of 5 million units annually in this segment. Honor plans to produce smartphones and tablets locally to meet government content quotas. The company aims to launch over 10 products, including premium devices, in early 2025 and open 10 experience centers. With fierce competition from brands like Oppo and Xiaomi, Honor's entry comes amidst Indonesia’s growing smartphone market and an Apple sales ban.
https://asia.nikkei.com/Business/Technology/China-s-Honor-to-enter-Indonesian-market-amid-iPhone-ban
Young Hongkongers say adapting to mainland Chinese work culture key to smooth transition
South China Morning Post
Tin Lau Tin-yat, a business administration graduate, embraced the opportunity to work in mainland China through Hong Kong's Greater Bay Area Youth Employment Scheme, which offers young Hongkongers a chance to work across the border for 18 months with a minimum salary of HK$18,000. Lau expressed enthusiasm for the different career perspectives available in mainland industries, although he faced initial challenges adjusting to the work culture, such as making a mistake in addressing a senior client. Despite these hurdles, he appreciates the lower cost of living and career prospects that the scheme presents.
The Hong Kong government initiated the youth employment scheme in 2021 to encourage young people to explore job opportunities in the Greater Bay Area, which includes Hong Kong, Macau, and nine cities in Guangdong province. Despite initial interest, participation has declined from 1,091 in the pilot phase to 337 in 2024. Many young Hongkongers have shared their experiences of adjusting to the demanding work environment on the mainland, with some finding their niche and others preferring to return to Hong Kong. Individuals like Pan Zhou and Chi Chung-chun have expressed mixed feelings about the work culture, with Zhou eventually deciding to remain in the mainland while Chi aims to return to Hong Kong after gaining sufficient experience.
Experts have noted that the decline in participation may stem from changing attitudes towards work, alongside a lack of understanding about the opportunities in the bay area. While the financial incentives offered by the scheme are appealing, many young people are deterred by the comparatively lower salaries on the mainland. Nonetheless, participants like Will Shen Weilin have found value in the exposure and experiences gained, signaling that the scheme may still positively influence their career trajectories, regardless of their ultimate decision to return to Hong Kong or stay in the mainland.
https://www.scmp.com/news/hong-kong/society/article/3293649/young-hongkongers-say-adapting-mainland-work-culture-key-smooth-transition?utm_source=rss_feed
China releases draft rules on cross-border personal data transfer
Nikkei Asia
The Chinese government has proposed draft guidelines for certifying cross-border transfers of personal information, aiming to alleviate concerns of foreign businesses. The draft outlines certification requirements for companies handling 100,000 to 1 million personal data annually, with stricter rules for sensitive information. Certification will be conducted by authorized bodies, and transfers that may affect national security must be reported. This initiative follows a series of laws aimed at preventing data leaks and ensuring compliance among foreign businesses, as China seeks to retain foreign investment and bolster its economy amidst tightening regulations.
https://asia.nikkei.com/Business/Technology/China-releases-draft-rules-on-cross-border-personal-data-transfer
Indonesia joining BRICS bloc as full member, Brazil says
Nikkei Asia
Indonesia has officially joined BRICS as a full member, as announced by Brazil's government. This expansion of the group, which already includes Russia, India, China, and South Africa, aligns with Indonesia's aim to strengthen emerging countries and promote the interests of the Global South. The decision was made by consensus among current BRICS members, following an initial approval at the 2023 summit in Johannesburg. Indonesia's membership request came after the election of President Prabowo Subianto in October. The Brazilian government emphasized Indonesia's commitment to reforming global governance and enhancing cooperation within the Global South. BRICS also includes Egypt, Ethiopia, Iran, and the United Arab Emirates.
https://asia.nikkei.com/Politics/International-relations/Indonesia-joining-BRICS-bloc-as-full-member-Brazil-says
PDD’s Chinese-American billionaire investor Duan Yongping heaps praise on Temu
South China Morning Post
Chinese-American billionaire Duan Yongping praised e-commerce platform Temu for its successful marketing, particularly its Super Bowl advertisements in 2023 and 2024, which significantly increased its visibility in the U.S. He emphasized the effectiveness of its business model and improving product quality. Duan, an early investor in PDD Holdings, acknowledged Temu's founder, Colin Huang, for his vision and commitment to long-term success over quick profits. Duan highlighted the importance of understanding a business's essence for investment success, citing his admiration for Huang's strategic thinking and the influence of Warren Buffett on his investment philosophy.
https://www.scmp.com/tech/big-tech/article/3293630/pdds-chinese-american-billionaire-investor-duan-yongping-heaps-praise-temu?utm_source=rss_feed
China’s huge copper find on Tibetan Plateau to help underpin its world-leading consumption
South China Morning Post
China has achieved a major breakthrough in mineral exploration on the Tibetan Plateau, revealing over 20 million metric tonnes of new copper resources. This discovery adds to the existing 53 million tonnes of proven copper reserves, which represent over half of China's total reserves. Researchers estimate that the plateau could potentially hold up to 150 million tonnes of copper across four main resource bases: Yulong, Duolong, Jiulong-Jiama, and Xiongcun-Zhuno. The Tibetan Plateau is a crucial strategic resource area, containing significant amounts of vital minerals, including copper, chromium, and cobalt.
China is the world's largest copper consumer, accounting for more than half of global consumption, with demand expected to rise further due to the growth in low-carbon energy and new infrastructure projects. Tang Juxing, chief scientist at the China Geological Survey, highlighted the need to expand copper reserves for national resource security and supply chain stability. The survey aims to enhance geological assessments and technological innovations to discover additional reserves and establish new large-scale copper resource bases. Future exploration efforts will focus on various regions, including coastal provinces and volcanic zones.
https://www.scmp.com/economy/china-economy/article/3293612/chinas-huge-copper-find-tibetan-plateau-help-underpin-its-world-leading-consumption?utm_source=rss_feed
Self-exiled Chinese businessman’s chief of staff gets 10 years in prison in $1B fraud
Associated Press
Yvette Wang, the chief of staff for Chinese businessman Guo Wengui, was sentenced to 10 years in prison for her involvement in a $1 billion fraud case. Wang was arrested in March 2023, when FBI agents discovered $130,000 in cash in her apartment. Judge Analisa Torres noted that Wang played a significant role in the conspiracy linked to Guo, who was convicted of defrauding numerous followers globally. Wang pleaded guilty to conspiracy charges and agreed to forfeit $1.4 billion. The fraud scheme involved misleading victims into investing money through Guo's media company and other entities in exchange for stock or cryptocurrency. Guo, a fugitive in the U.S. since 2014, is accused by China of various crimes, which he claims are false allegations aimed at silencing his criticism of the Chinese government.
https://apnews.com/article/guo-wengui-chinese-businessman-fraud-nyc-42ed060a12919343e42d22bd3403a7a2
China risks catastrophic errors if anti-corruption crackdown eases, Xi Jinping warns
South China Morning Post
Chinese President Xi Jinping has emphasized the need for unwavering commitment to the country's ongoing anti-corruption campaign, warning that any relaxation of efforts could lead to "catastrophic" risks. Speaking to members of China's top anti-corruption agency, Xi noted that while progress has been made, the situation remains "grave and complex," with persistent corruption issues. He urged officials to maintain diligence in combating corruption, which he identified as the biggest threat to the Communist Party. Xi highlighted the importance of strict discipline within the party and the need for officials to monitor their own conduct and that of their associates. The anti-corruption drive, initiated over a decade ago, has seen investigations across various sectors, including the military and finance, with a significant number of officials facing scrutiny in recent months.
https://www.scmp.com/news/china/politics/article/3293640/china-risks-catastrophic-errors-if-anti-corruption-crackdown-eases-xi-jinping-warns?utm_source=rss_feed
Taiwan investigating Chinese vessel over damage to undersea cable
Guardian
Taiwanese authorities are investigating a Chinese-owned vessel, the Shunxing 39, suspected of damaging an undersea internet cable, raising concerns of possible sabotage. The incident disrupted a fiber-optic cable connecting Taiwan to the US, but services were mostly unaffected due to quick rerouting. The Taiwan coast guard has identified the vessel and plans to conduct further investigations, seeking assistance from South Korea. This event follows previous incidents of undersea cable damage attributed to Chinese vessels, highlighting vulnerabilities in Taiwan's critical infrastructure amid ongoing tensions with China.
https://www.theguardian.com/world/2025/jan/07/taiwan-investigating-chinese-vessel-over-damage-to-undersea-cable
What We Know About HMPV, the Virus Spreading in China
NY Times
Recent reports of a rise in respiratory virus cases in China have drawn comparisons to the early days of the Covid-19 pandemic. However, experts emphasize that the current situation is much less concerning. The infections are attributed to human metapneumovirus (HMPV), a common pathogen that typically causes mild respiratory illnesses, similar to the flu and respiratory syncytial virus (R.S.V.). Most individuals will encounter HMPV during childhood, and while severe cases can occur, particularly in vulnerable populations, fatalities are rare in high-income countries. In lower-income regions, where healthcare systems may be weaker, deaths from HMPV are more likely.
https://www.nytimes.com/2025/01/07/health/hmpv-virus-china.html
Cracks appear in China stocks’ fragile bull case
Reuters BreakingViews
Tencent and CATL ended 2024 with significant gains, but their recent addition to a U.S. Defense Department blacklist has raised concerns for investors regarding Chinese stocks. The two companies, which have a combined market value of $640 billion, were accused of working with the Chinese military, a claim they both denied. While the blacklist does not impose immediate restrictions, the negative perception caused Tencent's shares to drop by as much as 7%. This has implications for index funds that include these stocks, as Tencent constitutes over 16% of the MSCI China index. The situation is compounded by a recent decline in the CSI 300 index, which fell over 5% in early 2025 amid fears of economic growth. Fund managers who invested in the Chinese market following a rally in 2024 may soon realize the risks outweigh the benefits.
https://www.breakingviews.com/considered-view/cracks-appear-in-china-stocks-fragile-bull-case/
Chinese EV makers cannot stop ‘aggressive’ price-cutting – even as it imperils them
South China Morning Post
Chinese carmakers have reduced prices on pure electric vehicles (EVs) by an average of 10% to boost sales, resulting in a price drop of 24,000 yuan (US$3,275) to 225,000 yuan. This aggressive pricing strategy, combined with a government subsidy, has led to record deliveries for companies like BYD and Nio. However, concerns about overcapacity persist, as production capabilities far exceed expected sales. Analysts predict a continued price war in 2025, with consumer expectations for further discounts due to economic uncertainties. Currently, only three major EV makers are profitable.
https://www.scmp.com/business/china-business/article/3293635/chinese-ev-makers-cannot-stop-aggressive-price-cutting-even-it-imperils-them?utm_source=rss_feed
Chip war: Chinese scientists vow to launch breakthrough RISC-V open-source CPU in 2025
South China Morning Post
A team from the Chinese Academy of Sciences (CAS) announced plans to produce a processor based on the open-source RISC-V chip-design architecture by 2025, as part of China's efforts to enhance semiconductor self-reliance in light of increasing US restrictions. The XiangShan project, initiated in 2019, aims to develop high-performance open-source processors, with goals of proving that such projects can achieve scalability and quality. The CAS research team presented their ambitions at the Hot Chips 2024 conference, likening XiangShan to becoming "the Linux of processors." The project has garnered attention, especially after a comment from US hacker George Hotz highlighted its performance, raising questions about American projects in the same domain. Although XiangShan has made progress with two completed chip designs and a third in development, the team recognizes the need to close the performance gap with mainstream industry standards.
https://www.scmp.com/tech/tech-war/article/3293610/chip-war-chinese-scientists-vow-launch-breakthrough-risc-v-open-source-cpu-2025?utm_source=rss_feed
US House select committee on China is reauthorised for another 2 years
South China Morning Post
The US House select committee addressing economic and security threats from China has been renewed for two years, maintaining its leadership and focus on tough policies against Beijing. The reauthorization expands its scope to include threats to US allies and partners. The committee, originally formed in January 2023, is an advisory panel investigating issues related to the Chinese Communist Party, including ideological threats. It has faced both support for its initiatives to counter China and criticism for potentially fueling anti-Asian sentiments. Critics argue that existing congressional committees can handle these concerns without the need for this select committee.
https://www.scmp.com/news/china/diplomacy/article/3293662/us-house-select-committee-china-reauthorised-another-two-years?utm_source=rss_feed
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