China’s recovery campaign continues as top planner joins stimulus surge
‘Impossible’ for Communist China to become our motherland as we’re older, Taiwan’s president argues
Welcome to this issue of The China Brief. Today is October 7, 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 recovery campaign continues as top planner joins stimulus surge
South China Morning Post
China is shifting its economic strategy by uniting its top economic planner, the National Development and Reform Commission (NDRC), with other state agencies to boost consumer and investor confidence. A press conference is anticipated to reveal an action plan focused on increasing consumption and facilitating a green transition. Retail sales growth has slowed, prompting calls for significant announcements to revitalize the economy. Analysts expect measures such as strategic public infrastructure projects and potential fiscal stimulus ranging from 1.5 to 2 trillion yuan. However, a cautious approach may prevail, avoiding the aggressive stimulus seen in 2008.
https://www.scmp.com/economy/policy/article/3281359/chinas-recovery-campaign-continues-top-planner-joins-stimulus-surge?utm_source=rss_feed
‘Impossible’ for Communist China to become our motherland as we’re older, Taiwan’s president argues
CNN
Taiwan's President Lai Ching-te declared it "impossible" for Communist China to be Taiwan's motherland due to the Republic of China's (ROC) longer historical governance. Highlighting Taiwan's sovereignty, Lai emphasized the ROC's founding in 1912 and its separate government from the People's Republic of China (PRC) since 1949. His remarks, made ahead of Taiwan's national day, were intended to assert Taiwan's distinct identity amidst rising tensions with Beijing, which claims Taiwan as its territory. Lai's comments drew criticism from Taiwan's opposition party, the Kuomintang, which accused him of escalating tensions.
https://edition.cnn.com/2024/10/07/asia/taiwan-china-motherland-history-hnk-intl/index.html
China’s EV subsidy boosts ‘golden week’ sales amid rush before incentives’ expiry
South China Morning Post
During China's "golden week" holiday, electric vehicle (EV) sales surged as buyers rushed to take advantage of government subsidies, with some dealers reporting significant daily sales. However, analysts warn of a potential sales decline if these incentives are discontinued next year, similar to the drop experienced in January 2023. With local and central government subsidies reaching up to 40,000 yuan, many consumers found EVs more affordable. The holiday period saw a jump in EV popularity, but industry experts emphasize the need for sustainable sales strategies post-subsidies. The future of these incentives beyond 2025 remains uncertain.
https://www.scmp.com/business/china-business/article/3281363/chinas-ev-subsidy-boosts-golden-week-sales-amid-rush-incentives-expiry?utm_source=rss_feed
China Calls for Tighter Security After Workers Are Killed in Pakistan
NY Times
Two Chinese nationals were killed and one injured in a convoy attack in Karachi, Pakistan, heightening concerns about the safety of Chinese workers involved in significant projects in the country. The attack, which occurred near the international airport, was claimed by the Balochistan Liberation Army, a separatist group opposed to both the Pakistani government and Chinese involvement in the resource-rich Balochistan province.
The explosion, caused by a car bomb, resulted in at least 10 injuries among Pakistanis and several vehicles catching fire. The Chinese Embassy condemned the attack, labeling it a “terrorist act” and urged the Pakistani government to enhance security for Chinese citizens and projects.
China has invested approximately $60 billion in Pakistan as part of its Belt and Road Initiative, which has faced multiple attacks in recent years, particularly in Balochistan. Pakistan's Prime Minister expressed his shock at the incident, reaffirming the country's commitment to the safety of Chinese nationals and projects amidst ongoing political turmoil that has complicated security efforts.
https://www.nytimes.com/2024/10/07/world/asia/pakistan-chinese-workers.html
China, Philippines continue to clash in South China Sea, with new flashpoint emerging
South China Morning Post
Tensions in the South China Sea remain high, particularly as China recently conducted naval drills to assert its commitment to maintaining peace in the area amidst ongoing disputes. The situation escalated with reports of Chinese missile boats pursuing Philippine vessels and directing lasers at patrolling aircraft near contested areas like Half Moon Shoal. Concurrently, Vietnam has reported aggressive actions from Chinese law enforcement against its fishermen in the region, further intensifying the maritime conflicts that involve multiple nations, including the United States, which has pledged support to its regional allies.
The Philippines is actively seeking a non-permanent seat on the UN Security Council to bolster its diplomatic standing in addressing the maritime tensions. The country's Foreign Affairs Secretary emphasized that the rule of law is crucial in navigating these conflicts. However, the Philippines has also faced increased incursions from Chinese maritime militia, with a record number of Chinese vessels logged operating within its claimed waters. This has prompted calls for the Philippines to reassess its strategies, especially in light of recent collisions between Chinese and Filipino vessels and China's demands for withdrawal of Philippine coastguard ships from disputed areas.
Despite the heightened tensions, there have been moments of restraint, such as China's decision not to block a Philippine resupply mission. Additionally, a recent meeting between military leaders from China and the U.S. indicates a willingness for dialogue. Regional cooperation has emerged as a potential strategy, with Japan expressing support for the Philippines against Chinese aggression, and Malaysia's king reaffirming a commitment to regional peace with China. As the geopolitical landscape continues to evolve, the stakes in the South China Sea remain high, with implications for international relations and maritime security.
https://www.scmp.com/economy/article/3281309/china-philippines-continue-clash-south-china-sea-new-flashpoint-emerging?utm_source=rss_feed
China’s economy is in bad shape. Can its ‘whatever-it-takes’ stimulus effort turn things around?
CNN
After four challenging years, Hong Kong's stock market, particularly the Hang Seng Index, has rebounded significantly due to newly announced economic support measures from China's leadership. The Index saw an 18% rally, its largest in nearly two decades, following these announcements, offering relief to local brokers like Francis Lun. However, experts caution that while the stock market is recovering, the real economy continues to face challenges, including low consumer confidence and potentially missing growth targets. Economists suggest that additional fiscal measures, such as increased public spending and direct financial support to consumers, are necessary to sustain the economic recovery. Notably, China plans to issue around 2 trillion yuan in special sovereign bonds for fiscal stimulus, aimed at boosting consumer spending and supporting businesses. Analysts propose that a more substantial bond issuance of up to 10 trillion yuan could significantly impact growth, but such plans remain speculative. Overall, while the stock market's surge is encouraging, sustaining this recovery will require decisive action to address underlying economic issues, particularly in the property sector.
https://edition.cnn.com/2024/10/06/business/china-economy-stimulus-fiscal-spending-hnk-intl/index.html
China throws the book: more corruption suspects hit with claims of illicit reading
South China Morning Post
In China, anti-corruption agencies increasingly accuse disgraced officials of reading "forbidden" political publications as evidence of disloyalty. Recent cases include Li Bin and Cheng Zhiyi, both expelled from the Communist Party for corruption, with allegations centered on their possession of politically sensitive materials. These materials often cover controversial historical events and are considered illegal under Chinese law. The trend has risen following amendments to party disciplinary regulations, which broadened penalties for reading unapproved materials. This shift highlights the intertwining of political loyalty and reading habits within China's political landscape.
https://www.scmp.com/news/china/politics/article/3280483/china-throws-book-more-corruption-suspects-hit-claims-illicit-reading?utm_source=rss_feed
Beijing hints at fresh measures to boost Hong Kong economy a week before policy address
South China Morning Post
Beijing plans to introduce more measures to support the economic development of Hong Kong and Macau, as announced by the Hong Kong and Macau Affairs Office. This comes ahead of Chief Executive John Lee Ka-chiu's upcoming policy address. The office highlighted recent initiatives, including travel permits for residents with foreign passports and increased duty-free shopping allowances for mainland tourists. It emphasized the importance of both cities in connecting mainland China with the world and their contributions to national economic growth. Expectations are high for Lee's address to outline new economic measures.
https://www.scmp.com/news/hong-kong/politics/article/3281323/beijing-hints-fresh-measures-boost-hong-kong-economy-week-policy-address?utm_source=rss_feed
Why civil engineering students are disappearing from China’s top universities
South China Morning Post
Tongji University in Shanghai, once the top destination for aspiring civil engineers in China, has seen a significant decline in interest for its civil engineering program, which was ranked number one globally from 2017 to 2021. The program's reputation soared during China's rapid infrastructure development, which created a high demand for civil engineering graduates. However, as China’s housing and infrastructure sectors experience a slowdown, the hiring demand and student interest in civil engineering degrees have diminished. Faculty members report a decline in undergraduate enrollments, with more students transferring out of civil engineering than into it.
The shift away from civil engineering is evidenced by the sharp drop in the required scores for admission to these programs, as well as a notable number of students seeking to transition to other fields. For instance, at Hunan University, nearly one-fourth of students who applied to change majors in 2022 came from civil engineering, and no students applied to enter the department. This trend reflects a broader downturn in the property market, which has seen a significant decrease in construction projects and investment due to economic challenges, leading to reduced job opportunities and earnings for civil engineers.
Despite the current downturn, some educators and experts remain optimistic about the future of civil engineering in China. They argue that the oversupply of graduates may lead to a healthier market as the excess workforce is absorbed. There are calls for innovation within the field, with suggestions to integrate new technologies and concepts such as artificial intelligence and sustainable infrastructure into civil engineering curricula. As the industry evolves, efforts are being made to prepare students for emerging needs, focusing on interdisciplinary skills and practical training, which may ultimately redefine the role of civil engineers in China’s evolving economy.
https://www.scmp.com/news/china/science/article/3280932/why-civil-engineering-students-are-disappearing-chinas-top-universities?utm_source=rss_feed
Two Chinese nationals killed in ‘terrorist attack’ near Karachi airport
NBC NEWS
ISLAMABAD — Two Chinese nationals were killed in an explosion near the international airport of the southern Pakistani city of Karachi on Sunday night, the Chinese embassy in Pakistan said, in what it described as a "terrorist attack."
In a statement emailed to journalists, separatist militant group Baloch Liberation Army (BLA) claimed the explosion was an attack carried out by them using a vehicle-borne improvised explosive device targeting Chinese nationals, including engineers.
The Chinese embassy said a convoy from the Port Qasim Electric Power Company was attacked near the airport.
"The Chinese Embassy and Consulates General in Pakistan strongly condemn this terrorist attack, express deep condolences to the innocent victims of both countries and sincere sympathies to the injured and (their) families," the statement said, adding the Chinese side has been working with Pakistani authorities in the aftermath.
Pakistan's Prime Minister Shehbaz Sharif said a Chinese national was also injured and that an investigation was underway.
"Pakistan stands committed to safeguarding our Chinese friends," he said in a statement on social media platform X. "We will leave no stone unturned to ensure their security and well-being."
Pakistan is preparing to host the Shanghai Cooperation Organization summit in the capital Islamabad, which was roiled by protests and clashes this weekend between police and supporters of jailed former Prime Minister Imran Khan.
High-level Chinese representation and the first visit by an Indian foreign minister in a decade are expected at the summit next week, which authorities have vowed to secure.
Pakistan broadcaster Geo News reported at least 10 people were injured in Sunday’s blast in addition to the fatalities. Karachi police did not immediately respond to request for comment.
The BLA seeks independence for the province of Balochistan, located in Pakistan’s southwest and bordering on Afghanistan and Iran. In August, it launched coordinated attacks in the province, in which more than 70 people were killed.
BLA specifically targets Chinese interests — in particular the strategic port of Gwadar on the Arabian Sea, accusing Beijing of helping Islamabad exploit the province. It has previously killed Chinese citizens working in the region and attacked Beijing’s consulate in Karachi.
Security issues have affected China’s billions of planned investments, including under China-Pakistan Economic Corridor which is part of President Xi Jinping’s Belt and Road.
In March, a suicide bomber killed five Chinese engineers working on a hydropower project in northern Pakistan. Authorities arrested militants they said were associated with the Pakistani Taliban, though that group denied being behind the attack.
https://www.nbcnews.com/news/world/two-chinese-nationals-killed-terrorist-attack-karachi-airport-rcna174222
How Australia’s housing crisis opens door for eager Asian investors
South China Morning Post
Australia is experiencing the most severe housing crisis among Asia's advanced economies, exacerbated by government failures to increase supply and a surge in overseas migration. The residential market downturn is mirrored in other Asian countries, with Hong Kong's house prices down nearly 30%. Investors, particularly from Japan and Hong Kong, are capitalizing on opportunities in Australia's build-to-rent and senior living sectors. Despite the potential for growth, regulatory barriers and slow development processes hinder solutions. Urgent political action is needed to address the root causes of the housing crisis, despite the strong investment appeal of Australia.
https://www.scmp.com/opinion/asia-opinion/article/3281333/how-australias-housing-crisis-opens-door-eager-asian-investors?utm_source=rss_feed
Could new EU tariffs on Chinese cars backfire?
Deutsche Welle
Europe has decided to increase tariffs on electric cars imported from China by as much as 35%. In response, China has indicated that it may retaliate against this move. The article discusses the implications of these tariffs and the potential for a trade conflict between Europe and China, raising questions about whether China will follow through on its threat of retaliation.
https://www.dw.com/en/could-new-eu-tariffs-on-chinese-cars-backfire/video-70404497
Chinese hack of telecommunications companies under investigation, NSA chief says
NBC NEWS
SEA ISLAND, Ga. — The director of the National Security Agency said Sunday that a Chinese hack of three major telecommunications firms is under investigation but that it remains “premature” to discuss the case.
Air Force Gen. Timothy Haugh said his command would work closely with other government agencies and private companies “to really understand what has happened.”
“I think it’s premature for us to talk about this specific case. We’re really at an initial stage,” Haugh told a small group of reporters here at a conference organized by the Cipher Brief security website.
About news reports that Chinese hackers may have gained access to systems used by federal authorities for court-approved eavesdropping, he said: “I think we are in the early days of investigation.”
The Wall Street Journal first reported the hack Saturday.
Hackers backed by China accessed at least three telecommunication companies — AT&T, Verizon and Lumen Technologies — in what may have been an attempt to gain access to information from systems the federal government uses for court-approved electronic surveillance, a source with knowledge of the matter said.
Telecommunications firms have a legal obligation to allow federal authorities to have access to electronic information if there is a court order for the eavesdropping. If China penetrated the wiretapping system, it would be a serious security breach.
AT&T and Lumen declined to comment. Verizon did not immediately respond to a request for comment Sunday night.
The Chinese Embassy in the U.S. did not immediately respond to a request for comment Sunday night.
The FBI and the White House National Security Council declined to comment.
Haugh said the NSA and other federal agencies issued an advisory in 2022 warning that cyber operators sponsored by the Chinese government were trying to hack major telecommunications companies and network service providers.
“I think what we see broadly from a PRC \[People’s Republic of China\] threat perspective is they’re going to be very aggressive at critical infrastructure collection operations and targeting our critical infrastructure,” Haugh said.
In a speech earlier at the conference, Haugh said China’s cyber operatives are “engaged every day in a deliberate campaign to steal our technology and target our national security systems and the defense industrial base.” He added that hackers backed by Beijing “aim to compromise our vital infrastructure.”
https://www.nbcnews.com/news/us-news/chinese-hack-telecommunications-companies-investigation-nsa-chief-says-rcna174208
China stock skepticism gets louder as world-beating run extends
Japan Times
Many global fund managers and strategists, including those from Invesco, JPMorgan Asset Management, HSBC Global Private Banking and Wealth, and Nomura Holdings, remain skeptical about the recent rally in Chinese stocks. They are waiting for the Chinese government to provide tangible support for its stimulus pledges and express concerns that many stocks may already be overvalued.
https://www.japantimes.co.jp/business/2024/10/07/markets/china-stock-skepticism/
Shanghai sees instant rebound in housing market on back of stimulus, loosened curbs
South China Morning Post
During China's National Day “golden week,” Shanghai's real estate showrooms saw a surge in interest, spurred by government stimulus and relaxed buying regulations. With significant buyer registration for new developments, Shanghai's rebound may signal trends for other top-tier cities, while lower-tier areas might lag behind. The easing of restrictions has drawn non-local buyers, contributing to increased transactions and rising second-hand home prices. However, with a significant inventory surplus, lower-tier cities may continue to struggle as investment shifts to Shanghai, highlighting a growing disparity in market performance between urban centers and less desirable locations.
https://www.scmp.com/economy/china-economy/article/3281284/shanghai-sees-instant-rebound-housing-market-back-stimulus-loosened-curbs?utm_source=rss_feed
China and North Korea mark 75th diplomatic anniversary with promise of deepening ties
Yahoo US
China and North Korea celebrated 75 years of diplomatic relations, with both countries' leaders expressing a commitment to enhance cooperation and marking a "new chapter" in their partnership. This comes amid concerns from the US and Western nations about increasing military and economic ties among China, North Korea, Russia, and Iran, which some refer to as an "axis of evil." However, a former US State Department official cautioned against overestimating the unity among these countries, suggesting their collaboration is based on convenience rather than ideological alignment. Analysts noted that China is hesitant to form a clear anti-West alliance due to its reliance on European and US markets, although the perceived threat from this coalition persists.
https://www.yahoo.com/news/china-north-korea-mark-75th-185542717.html
Tech war: China advocates use of local AI chips over those from US powerhouse Nvidia
South China Morning Post
Chinese authorities have advised local companies to prioritize domestic AI chips over Nvidia's products, although there is no official ban on Nvidia's H20 GPU. Reports suggest regulators have encouraged reducing Nvidia purchases and favoring local suppliers like Huawei. Despite ongoing US restrictions, Nvidia's H20 remains popular in China, with anticipated sales reaching $12 billion this year. Chinese firms like China Telecom are developing AI technologies using local chips, and Huawei is advancing its own chip offerings. Nvidia remains a significant player in China's market, despite challenges from US trade policies.
https://www.scmp.com/tech/article/3281254/tech-war-china-advocates-use-local-ai-chips-over-those-us-powerhouse-nvidia?utm_source=rss_feed
Wall Street Journal: Chinese hackers breach US court wiretap system
South China Morning Post
Chinese hackers reportedly breached the networks of several major US broadband providers, including Verizon, AT&T, and Lumen Technologies, gaining access to systems used for court-authorized wiretapping, according to the Wall Street Journal. The intrusion, attributed to a Chinese hacking group named "Salt Typhoon," may have lasted for months, allowing the hackers to access sensitive communication data. China's foreign ministry denied knowledge of the attacks and accused the US of creating a "false narrative" to discredit China, while emphasizing the need for global cooperation in cybersecurity. This incident follows previous US investigations into Chinese hacking activities, including operations dubbed "Flax Typhoon" and "Volt Typhoon."
https://www.scmp.com/news/world/united-states-canada/article/3281275/wall-street-journal-chinese-hackers-breach-us-court-wiretap-system?utm_source=rss_feed
China actress goes viral with ‘my uterus is not your business’ reply when urged to have kids
South China Morning Post
Chinese actress Qin Lan has emerged as a prominent advocate for women's rights in China, especially after her viral statement, “My uterus is none of your business,” made during a 2020 interview. At 45, she has challenged societal expectations regarding marriage and motherhood, having rejected pressure to settle down. Qin initially studied accounting but quickly transitioned to acting after winning a beauty contest. She gained fame for her role in the popular series My Fair Princess 3. Contrary to the character she portrayed, Qin is independent and outspoken, having previously dated actors Huang Xiaoming and Lu Chuan, both relationships that faced scrutiny due to industry pressures. Currently, she is in a relationship with actor Wei Daxun but remains unmarried, emphasizing the importance of personal choice over societal expectations. Qin continues to succeed in her acting career, taking on leading roles in several notable projects. Her stance on independence and self-empowerment has resonated with many, with social media users recognizing her as a role model for women.
https://www.scmp.com/news/people-culture/gender-diversity/article/3281164/china-actress-goes-viral-my-uterus-not-your-business-reply-when-urged-have-kids?utm_source=rss_feed
China’s stimulus will fall short without private-sector confidence
South China Morning Post
Since China lifted its zero-Covid restrictions at the end of 2022, economic struggles have persisted, with over a million restaurants closing and retail sales stagnating. August saw only a 2.1% retail sales increase, while industrial profits plummeted 17.8%. Although household deposits reached record highs, consumer confidence remains low. After resisting significant stimulus, the government recently announced bold measures to revitalize the economy, yet concerns linger over previous stimulus consequences. The private sector's confidence is crucial for recovery, necessitating substantial regulatory reforms and social security enhancements to encourage spending and investment.
https://www.scmp.com/opinion/china-opinion/article/3281034/chinas-stimulus-will-fall-short-without-private-sector-confidence?utm_source=rss_feed
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