Germany’s Leader Walks a Fine Line in China; China's clampdown on data spreads to real-time stock information; China's economy grew by 5.3% in the first quarter of 2024, beating expectations
Chinese internet amused by building that looks like sanitary pad
Welcome to this issue of The China Brief. Today is April 16, 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.
Germany’s Leader Walks a Fine Line in China
NY Times
German Chancellor Olaf Scholz recently visited China to promote business ties between the two countries while also expressing concerns about China's exports to Europe and its support for Russia. Throughout his trip, Scholz advocated for German companies struggling to compete in China and highlighted growing concerns in the European Union about the influx of Chinese goods being sold at a loss. This visit marked Scholz's first trip to China since the German government designated China as a "partner, competitor, and systemic rival" and called for reduced dependency on Chinese goods. Germany's economy has contracted recently, exposing its reliance on China for growth. German companies have been pushing for greater access to the Chinese market and have raised concerns about unfair competition.
Chinese internet amused by building that looks like sanitary pad
BBC
The proposed design of a train station in Nanjing, China, is drawing attention for its resemblance to a sanitary pad rather than the intended plum blossom. The design, approved by the government of Jiangsu province and China State Railway Group, has sparked discussion on social media platforms. Some users have called for society to address period shaming and hailed the design as ahead of its time. Construction is set to begin in the first half of 2024, and the estimated cost of the train station is 20 billion Chinese yuan ($2.76 billion).
China's clampdown on data spreads to real-time stock information
Nikkei Asia
Three major exchanges in China will stop disclosing real-time trading volume data from next month, claiming that the move is aimed at taming market volatility. However, the move has raised concerns among investors on data transparency. The new rules will apply to a key trading link between Hong Kong and the mainland that has been in place since 2014.
Tech war: how Chinese scientists rigged a low-cost AI computer chip to power a hypersonic weapon
South China Morning Post
Chinese researchers have developed a guide to improve the performance of hypersonic weapons using a low-cost artificial intelligence (AI) chip. By installing an Nvidia Jetson TX2i GPU computer module, the team was able to boost the processing speed of computational fluid dynamics models fourfold. The module is available online for a few hundred dollars. The researchers, from the Beijing Power Machinery Research Institute and Dalian University of Technology, said the module was ideal for real-time optimisation of hypersonic aircraft systems, and it cut down on development costs. The team used US chips for their project, but experts said China has the ability to create its own, more capable chips for military use. The use of AI chips to improve hypersonic missile guidance would be a major concern for the US, given the vulnerability of its aircraft carriers to such missiles, according to experts.
South China Morning Post
Chinese police have made over 1,500 arrests and solved 10,000 cases as part of a campaign targeting online rumours. The Ministry of Public Security has imposed administrative penalties on about 10,700 people and debunked more than 4,200 rumours since the campaign launched in December, according to a report by People's Daily. The crackdown has focused on influencers, bloggers and video producers who spread rumours about hot-button issues, particularly relating to the COVID-19 pandemic, dangers and disasters. The ministry has shut down 63,000 illegal accounts and removed over 735,000 posts containing rumours from social media, live-streaming and short-video platforms.
China economy grows faster than expected
BBC
China's economy grew by 5.3% in the first quarter of 2024, beating expectations of a 4.6% growth rate. The data from the National Bureau of Statistics also showed a 9.5% fall in property investment and a 3.1% drop in retail sales growth. The property market crisis continues to pose challenges for China, with new home prices falling at the fastest pace in over eight years in March. The International Monetary Fund estimates that the sector accounts for around 20% of China's economy. Credit ratings agency Fitch recently cut its outlook for China due to increasing risks to the country's finances.
South China Morning Post
PricewaterhouseCoopers (PwC) has denied allegations of auditing fraud related to bankrupt Chinese developer China Evergrande Group. The allegations were made in an anonymous letter circulating on Chinese social media. PwC stated that the claims were "clearly contradictory to the facts" and that it has taken measures to investigate the matter, including reporting the letter to law enforcement. The company also reserved the right to pursue legal action against those who fabricated and spread the letter. The letter alleged that PwC's "auditing failure" with regards to Evergrande was due to senior partners refusing probes by regulatory authorities. Evergrande collapsed in 2021 after it was found to have inflated its sales and profits in what has been called the largest case of financial fabrication in Chinese history. PwC is one of the world's "big four" auditing firms.
Tesla to cut workforce as China accelerates into EV sector
Nikkei Asia
Tesla is cutting 10% of its global workforce as it battles competition from cheaper Chinese electric vehicle (EV) manufacturers. CEO Elon Musk said the layoffs were aimed at reducing costs and boosting productivity. Musk also said the company needed to reorganise and streamline itself every five years. Musk's announcement followed news that the carmaker had lost its EV sales lead in China to domestic rivals and that Chinese EV manufacturers were starting to export their vehicles to Europe.
South China Morning Post
China's primary housing market has seen prices fall for the 10th consecutive month in March, deepening from the 1.9% annual pace in February, according to the statistics bureau. Existing home prices in 69 out of 70 cities were also lower in March, compared to 68 in February. Despite the Chinese government's efforts to bolster the housing market, including injecting more funds for weak developers and reducing interest rates on home mortgages, the measures have had little success. There are fears the slump in the housing market could continue to worsen, leading to a more aggressive response from Beijing.
China’s Rising Youth Unemployment Needs Attention, Official Says
Bloomberg
China's rising youth unemployment rate needs more attention, according to Sheng Laiyun, deputy director of the National Bureau of Statistics. The country's weak labour market is continuing to impact growth in the second-largest economy. Sheng did not specify which time period he was referring to, but said that the situation requires a high degree of attention. China previously released its youth jobless rate at a monthly press conference, but has now switched to publishing the number directly on its website.
China's Gen Z turns frugal as economy doubts linger
Nikkei Asia
China's Generation Z, aged 15 to 29, are adopting a more rational approach to spending, with a focus on value for money, sustainability, and self-care. Labelled "reverse consumption" and "the stingy economy", these trends reflect concerns about economic uncertainty and an aging society. The generation faces an aging population, a GDP predicted to slow down, and a jobless rate of 15.3% among those aged 16 to 24. Spending habits include searching for discounts on Chinese social media apps like Xiaohongshu and Douyin, and purchasing "leftover mystery boxes" of unsold food. The Chinese government must balance these consumer trends with deflation fears and a need for GDP growth.
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