Vice President Han Zheng, China’s representative at Trump’s inauguration, is a trusted adviser to Xi
China executes man who plowed car into crowds in deadliest attack in a decade；China calls for overseas education ventures in push for tech advancement
Welcome to this issue of The China Brief. Today is January 20, 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.
Vice President Han Zheng, China’s representative at Trump’s inauguration, is a trusted adviser to Xi
Associated Press
Vice President Han Zheng of China, a close adviser to President Xi Jinping, attended Donald Trump's inauguration, signaling China's willingness to improve relations with the U.S. Han, who has a long history in Chinese politics, rose from humble beginnings to become a key figure in the country. His attendance instead of the ambassador suggests a cautious approach to potential diplomatic tensions, especially amidst trade issues and China's territorial claims. Han has a background in Shanghai's governance and has been part of China's top leadership since 2017. Known for his diplomatic skills, he has previously tackled unrest in Hong Kong and engaged in international diplomacy. Before the inauguration, he met with U.S. officials and business leaders, including Elon Musk.
https://apnews.com/article/han-zheng-trump-inauguration-china-vice-president-5bb18d5049683d6624a9e1d4ee028104
China executes man who plowed car into crowds in deadliest attack in a decade
CNN
China has executed Fan Weiqiu, 62, for a car rampage that killed 35 people at a sports center in November, marking the deadliest attack in a decade. The execution followed a swift trial, reflecting rising public concern over recent violent incidents amid economic struggles. Additionally, Xu Jiajin, 21, was executed for a stabbing spree that killed eight at a college. The Chinese government has intensified security measures and public support for these executions is high, as the country maintains one of the lowest violent crime rates globally, despite being known for a high number of executions.
https://edition.cnn.com/2025/01/20/china/china-zhuhai-car-attack-execution-intl-hnk/index.html
China calls for overseas education ventures in push for tech advancement
South China Morning Post
China has launched a 10-year plan aiming to establish itself as a global education superpower by enhancing international collaborations in science and technology. The initiative, led by the Communist Party's Central Committee and the State Council, focuses on improving research capabilities, nurturing young talent, and fostering an innovative environment. This comes amid rising tensions with the US, highlighted by the University of Michigan's decision to end its partnership with Shanghai Jiao Tong University due to concerns over military-civil fusion. The plan emphasizes early scientific education, increased funding, vocational training, and equal educational opportunities for rural migrant children to address urban-rural disparities. Additionally, it maintains the "double reduction" policy, which limits homework and private tutoring while promoting better teaching quality and core competencies in students.
https://www.scmp.com/economy/policy/article/3295487/china-calls-overseas-education-ventures-push-tech-advancement?utm_source=rss_feed
China’s healthcare watchdog to investigate new drugs list after quality issues flagged
South China Morning Post
China's healthcare regulator will investigate drug quality after concerns were raised by Shanghai lawmakers about substandard medications covered by national insurance. The National Healthcare Security Administration plans to gather clinical data and feedback on drug efficacy, emphasizing that only reliable drugs will be listed. They aim to enhance drug standards through stricter inspections. Lawmakers highlighted issues with the effectiveness of bulk-purchased drugs, especially for chronic conditions, and proposed allowing doctors to prescribe original drugs when necessary. Concerns over low-priced medications and their quality have also emerged, prompting calls for different reimbursement rates for original versus generic drugs.
https://www.scmp.com/news/china/politics/article/3295470/chinas-healthcare-watchdog-investigate-new-drugs-list-after-quality-issues-flagged?utm_source=rss_feed
Tech war: Nvidia CEO Huang thanks China staff for loyalty amid heightened US chip curbs
South China Morning Post
Nvidia CEO Jensen Huang visited China to reaffirm the company’s commitment to its significant market amid increasing US export restrictions on advanced chips. During his trip, he met with clients and employees in Shenzhen and Beijing, highlighting Nvidia's contributions to China's tech development and its collaboration with over 3,000 start-ups. Huang noted Nvidia's low employee turnover rate in China and the growth of its local workforce to nearly 4,000. Despite geopolitical tensions, Nvidia reported a 34% revenue increase in China and opposed new US measures limiting AI chip exports.
https://www.scmp.com/tech/tech-war/article/3295475/tech-war-nvidia-ceo-huang-thanks-china-staff-loyalty-amid-heightened-us-chip-curbs?utm_source=rss_feed
Chinese aircraft maker AVIC removes website profiles of top executives
South China Morning Post
The profiles of two senior executives at China’s Aviation Industry Corporation (AVIC), including J-20 stealth fighter chief designer Yang Wei and general manager Hao Zhaoping, have been removed from the company's website without explanation. Both executives have not been seen publicly for months, raising concerns following the investigation of former AVIC chairman Tan Ruisong for corruption. The removals coincide with heightened scrutiny of the aerospace and defense sectors amid President Xi Jinping’s anti-corruption campaign, which has implicated several military leaders. AVIC recently held an anti-corruption conference, but neither Hao nor Yang were mentioned. The state-owned enterprise is crucial for China’s military modernization and produces key military aircraft, including the J-35 stealth fighter.
https://www.scmp.com/news/china/politics/article/3295491/chinese-aircraft-maker-avic-removes-website-profiles-top-executives?utm_source=rss_feed
Chinese property developer Country Garden plans deal with creditors, as industry languishes
Associated Press
Chinese property developer Country Garden is in talks to restructure $16.4 billion in offshore debt, aiming to reduce it by 70%. The company defaulted on $11 billion in bonds in 2023 and has requested more time to negotiate with creditors, leading a Hong Kong court to adjourn its case until May 26. Country Garden reported a net loss of 12.84 billion yuan ($1.76 billion) in the first half of 2024, following a significant loss of 178.4 billion yuan ($24.4 billion) in 2023. The property sector, previously a key growth driver in China's economy, is facing challenges with falling home prices despite government efforts to stimulate the market.
https://apnews.com/article/china-country-property-debt-1f4e213a72a0ff0678f9b830bade695a
BYD to complete $1bn Indonesia plant by year-end, executive says
Nikkei Asia
BYD, China's leading electric vehicle manufacturer, plans to finish its $1 billion plant in Indonesia by the end of 2025, according to Eagle Zhao, president director of BYD Indonesia. The facility, located in Subang, West Java, will have an annual production capacity of 150,000 electric vehicles and is focused on the export market. Zhao confirmed that the construction progress is on track and that the plant is expected to start producing cars shortly after completion. In 2024, BYD sold 15,429 units in Indonesia and holds around 36% of the battery-based EV market share.
https://asia.nikkei.com/Business/Automobiles/Electric-vehicles/BYD-to-complete-1bn-Indonesia-plant-by-year-end-executive-says
Recruiting foreigners to Hong Kong’s top court now more complex: chief justice
South China Morning Post
Hong Kong's Chief Justice Andrew Cheung Kui-nung acknowledged challenges in recruiting overseas judges amid geopolitical tensions but emphasized that their absence does not compromise the legal system's integrity. Speaking at the legal year's opening, he urged against making broad assumptions about judicial independence based on select national security cases. Although the number of foreign judges has decreased from 15 to six since the 2020 national security law, Cheung affirmed that the judiciary's strength lies in its principles and structures, not individual judges. He highlighted the ongoing robust operation of the rule of law across various legal sectors in Hong Kong.
https://www.scmp.com/news/hong-kong/law-and-crime/article/3295498/recruiting-foreigners-hong-kongs-top-court-now-more-complex-chief-justice?utm_source=rss_feed
HSBC, Standard Chartered, Bocom can now open mainland China accounts for Hongkongers
South China Morning Post
HSBC, Standard Chartered Bank, and Bank of Communications have begun offering Hongkongers the ability to open mainland bank accounts remotely, facilitating easier cross-border travel and transactions. Customers can open a Type II account in Hong Kong, enabling transfers of up to 10,000 yuan daily. The service is free with no minimum balance required, allowing funds to be transferred to popular payment apps. This initiative follows a recent expansion of attestation services by Beijing, aiming to meet the increasing demand for cross-boundary payment solutions among Hong Kong residents.
https://www.scmp.com/business/banking-finance/article/3295483/hsbc-standard-chartered-bocom-can-now-open-mainland-accounts-hongkongers?utm_source=rss_feed
Trump promising 'perfect relationship' with Australia, PM says
Australian Broadcasting Corporation
Prime Minister Anthony Albanese expressed confidence that Australia will not face adverse trade tariffs from the U.S. under Trump's upcoming presidency. Despite Trump's proposed tariffs on other countries, Albanese emphasized the long-standing trade surplus and strong relationship between Australia and the U.S. He highlighted mutual interests and partnerships, including the Five Eyes alliance and free trade agreements. Additionally, Albanese addressed rising anti-Semitism in Australia, assuring that authorities are taking action to combat hate crimes, while the Coalition proposed stricter sentencing for offenders if elected. Albanese prefers legislative measures over mandatory sentencing.
https://www.abc.net.au/news/2025-01-20/anthony-albanese-confident-perfect-relationship-donald-trump/104838726
Hong Kong hosts 41% more Chinese and foreign companies with record investments: InvestHK
South China Morning Post
In 2024, Hong Kong saw a 41% increase in new companies from mainland China and abroad, attracting a record HK$67.7 billion in investments, according to InvestHK. A total of 539 firms established operations in the city, with over half from mainland China. The initiatives included tax concessions and an investment-for-residency scheme aimed at reviving the economy post-pandemic. Despite a cooling economic growth rate of 1.8%, confidence in Hong Kong as a financial hub remains strong, especially among U.S. firms. The government is also focusing on emerging markets and the Belt and Road Initiative for future investments.
https://www.scmp.com/business/china-business/article/3295479/hong-kong-hosts-41-more-chinese-and-foreign-companies-record-investments-investhk?utm_source=rss_feed
What to watch at Donald Trump’s second presidential inauguration
CNN
Donald Trump will be inaugurated as the 47th president of the United States on Monday, marking a significant comeback after a tumultuous first term. JD Vance, elected to the Senate in 2022, will serve as vice president. Due to projected frigid temperatures in Washington, the swearing-in ceremony will take place indoors at the US Capitol, a first since Ronald Reagan's second inauguration in 1985. Trump plans to swiftly implement a wide-ranging agenda, focusing on immigration enforcement and rolling back Biden-era policies. His initial actions are expected to include executive orders on immigration, energy, and government operations. Trump also intends to delay a law banning TikTok and swiftly pardon individuals convicted for their involvement in the January 6 Capitol insurrection. His inaugural rhetoric will be closely monitored, as he has previously expressed intentions to seek retribution against political opponents. Meanwhile, outgoing President Biden will attend the inauguration, emphasizing his administration's achievements while acknowledging the challenges posed by Trump’s return to power. CNN will provide extensive live coverage of the event.
https://edition.cnn.com/2025/01/20/politics/how-to-watch-inauguration/index.html
How Trump could upend South China Sea calculations all round
South China Morning Post
The South China Sea remains a geopolitical flashpoint amid escalating US-China tensions, with both nations asserting their territorial claims. Under President Trump, a transactional approach may use the South China Sea as a bargaining tool, complicating relations for regional allies like the Philippines and Vietnam. Beijing's assertive actions contrast with its diplomatic efforts. Asean plays a critical role in regional stability but faces internal divisions. The situation is precarious, with potential strategic missteps reshaping the regional order, requiring diplomatic agility and enhanced defense capabilities from stakeholders to maintain stability in this contested area.
https://www.scmp.com/opinion/world-opinion/article/3295077/how-trump-could-upend-south-china-sea-calculations-all-round?utm_source=rss_feed
Trump ‘unlikely to take the initiative to use Taiwan as a bargaining chip’ with Beijing, Bonnie Glaser says
South China Morning Post
Bonnie Glaser, an expert in Asia-Pacific geopolitics and US policy, currently leads the Indo-Pacific programme at the German Marshall Fund and has held various positions with institutions like the Lowy Institute and Pacific Forum. In her insights regarding Taiwan's future under a potential second term for Donald Trump, she suggests that Trump may refrain from using Taiwan as a bargaining chip, having learned from his earlier experiences. Although Trump may consider making concessions related to Taiwan under specific requests from Xi Jinping, it is unlikely he will initiate pressure on Taiwan as a strategy for negotiations with China. The dynamics surrounding Taiwan's status and US support could be influenced by a Republican-controlled Congress.
Despite some analysts predicting imminent military action by China against Taiwan, Glaser posits that Xi Jinping is unlikely to risk a full-scale invasion soon due to significant domestic economic challenges and ongoing military purges that raise questions about the People's Liberation Army's (PLA) readiness. Xi's previous speeches have indicated a desire for peaceful unification; however, his administration has increasingly relied on coercive tactics to deter Taiwanese independence and compel unification. While Beijing maintains that force would be a last resort, the situation remains tense, with the potential for military action if Taiwan were to declare independence or if the US were to enhance its defense commitments to Taiwan.
The geopolitical implications of Taiwan's status extend beyond US-China relations, involving other regional players like Japan and Southeast Asian countries. Many nations have expressed concerns about escalating tensions and the need for peaceful resolutions in the Taiwan Strait. The US recognizes its economic stake in Taiwan, underscoring the importance of maintaining stability in the region. While the risk of military conflict is currently perceived to be higher in the South China Sea, a deliberate Chinese campaign against Taiwan could still trigger significant military confrontations, emphasizing the need for careful diplomatic management to avoid miscalculations on both sides.
https://www.scmp.com/news/china/diplomacy/article/3295361/trump-unlikely-take-initiative-use-taiwan-bargaining-chip-beijing-bonnie-glaser-says?utm_source=rss_feed
China's vice president meets with Elon Musk ahead of Trump inauguration
CNBC
China's Vice President Han Zheng met on Sunday with Tesla CEO Elon Musk and other members of the U.S. business community in Washington D.C., the official Xinhua news agency reported on Monday.
Han told Musk he "welcomed Tesla and other U.S. companies to seize the opportunities and share in the benefits of China's development, and contribute to the growth of China-U.S. economic and trade relations," the report said.
U.S. President-elect Donald Trump invited Chinese President Xi Jinping to attend the inauguration after winning last year's presidential election. Xi has sent Han in his place.
https://www.cnbc.com/2025/01/20/china-vice-president-meets-with-elon-musk-ahead-of-trump-inauguration.html
US small businesses continue pleas for China tariff relief despite Trump threats
South China Morning Post
As Donald Trump enters his second term, American small businesses are urging the removal of tariffs imposed since 2018. Douglas Barry, a trade analyst, highlights the negative impact on smaller firms, which have suffered more than larger corporations. His book, "Smart Rabbits," details the struggles of U.S. businesses amid the trade war and calls for no tariffs on trade and improved access to China's e-commerce market. Despite a phase one trade agreement that increased exports, China fell short of its purchase commitments. Businesses seek government support to alleviate tariffs and enhance trade relations with China.
https://www.scmp.com/economy/global-economy/article/3295432/us-small-businesses-continue-pleas-china-tariff-relief-despite-trump-threats?utm_source=rss_feed
TSMC is confident its CHIPS Act funding will continue under Trump, says CFO Wendell Huang
CNBC
U.S. President-elect Donald Trump has accused Taiwan of "stealing" his country's chip industry. But Taiwan's biggest chip company is confident the Trump administration will continue funding its projects in the U.S.
Taiwan Semiconductor Manufacturing Co has been promised $6.6 billion under the Joe Biden administration's CHIPS and Science ACT to help build three cutting-edge chip fabrication plants in Arizona as part of U.S. efforts to onshore chip manufacturing.
Speaking to CNBC's Emily Tan in an exclusive interview, TSMC Chief Financial Officer Wendell Huang said the funding was expected to continue to roll in gradually under Trump as the fabrication plants pass construction and production milestones.
"As a matter of fact, in the fourth quarter, we already received the first batch of government support," Haung said, revealing the contract chip manufacturer had got $1.5 billion in funds.
Following some production delays, the first fabrication plant in Arizona started producing advanced chips in the fourth quarter of last year, Huang said. He added that the construction of two plants in Arizona was on track, with the second expected to be operational in 2028.
TSMC's first investment in Arizona was announced in May 2020, with the company's total investment in the its three projects there eventually standing at over $65 billion.
Much of the investments were committed after the Biden administration signed the bipartisan CHIPS Act in August 2022, committing almost $53 billion to invest in the domestic semiconductor supply chain and counter China.
While the incoming President is also expected to make competition with China and onshoring manufacturing a priority in his second term, there has been debate as to whether Trump and the Republican-led House would re-examine the CHIPS Act.
During his campaign for the White House, Trump publicly criticized the bill and its price tag, arguing instead that tariffs were a more effective strategy to onshore chip manufacturing. The President-elect also accused Taiwan of "stealing" U.S. chip business.
However, industry experts have told CNBC that they expect Trump to leave the policy mostly intact due to its bipartisan support in Washington.
TSMC on Thursday reported record profit for the fourth quarter on strong demand for its AI chips, sending its shares up nearly 4%. Shares closed 1.36% higher on Friday.
In an earnings call following the esults, CEO and Chairman C.C. Wei highlighted TSMC's "long-standing and good relationship" with the U.S. government and the commitment and support it has received on the federal, state and city levels.
"Let me assure you that we have a very frank and open communication with the current government and with the future one also," he said in response to an investor question.
On Thursday, Wei also said that the company would not attend Trump's inauguration as prefers to keep a low profile, according to a report from Reuters.
https://www.cnbc.com/2025/01/19/tsmc-confident-in-continued-chips-act-funding-under-trump-says-cfo.html
TikTok Butters Up Trump, Again and Again
NY Times
In recent weeks, various tech leaders and companies have sought to gain favor with President-elect Donald Trump, including visits and donations. TikTok, facing a U.S. ban unless sold, has taken this effort further by publicly thanking Trump for his support through statements and in-app messages, highlighting his role in its continued presence in the U.S. TikTok's CEO, Shou Chew, has expressed gratitude in videos and has been invited to a prominent position at Trump's inauguration. Legal expert Anupam Chander noted that TikTok's actions reflect its dependence on Trump's favor for its survival in the U.S. While Trump has promised to issue an executive order to buy time for TikTok's parent company, ByteDance, it remains uncertain if he can effectively extend the deadline or if he has a potential buyer in mind.
https://www.nytimes.com/2025/01/19/technology/tiktok-trump-messages-ban.html
Hong Kong stocks rise on positive talks between Trump and Xi
South China Morning Post
Hong Kong stocks experienced a significant increase following a positive phone conversation between Chinese President Xi Jinping and US president-elect Donald Trump. The Hang Seng Index rose by 1.7% to 19,917.38, with the Hang Seng Tech Index up by 2.4%. In mainland China, the CSI 300 Index increased by 1% and the Shanghai Composite Index by 0.6%. E-commerce company JD.com saw a notable rise of 4.1%, while Alibaba and Baidu also posted gains. During their call, Xi and Trump discussed various international issues, and both leaders expressed a desire for improved US-China relations. Analysts noted that the potential thawing of relations provided some relief to Asian markets, although concerns about upcoming trade tariffs from Trump kept investors cautious. Additionally, China maintained its benchmark lending rates. Major Asian markets generally traded higher, with Japan's Nikkei 225 gaining 1.3% and Australia’s S&P/ASX 200 up by 0.3%.
https://www.scmp.com/business/banking-finance/article/3295417/hong-kong-stocks-rise-positive-talks-between-trump-and-xi?utm_source=rss_feed
TikTok Ban Behind Fire Set at a Mall With Congressman’s Office, Police Say
NY Times
A 19-year-old man was arrested for arson after setting a fire at a strip mall in Fond du Lac, Wisconsin, which houses the office of U.S. Representative Glenn Grothman, a critic of the TikTok app. The man claimed he started the fire in response to discussions about banning TikTok, which had recently become unavailable in the U.S. due to a new law aimed at forcing its Chinese owner, ByteDance, to sell the app. No injuries occurred during the incident, and the fire caused moderate damage to the exterior and minor damage to the interior of the building. The authorities are continuing their investigation, and the man is being held at the Fond du Lac County Jail.
https://www.nytimes.com/2025/01/19/us/wisconsin-arson-tiktok-ban.html
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