Will Chinese President Xi Jinping attend presidential inauguration at Trump’s invitation?
China to expand private pension scheme nationwide；3 challenges for China’s economic growth in 2025
Welcome to this issue of The China Brief. Today is December 12, 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.
Will Chinese President Xi Jinping attend presidential inauguration at Trump’s invitation?
South China Morning Post
China is unlikely to accept Donald Trump's invitation for President Xi Jinping to attend his inauguration due to diplomatic protocols and historical practices, as no Chinese head of state has attended a US presidential transition ceremony. Since becoming China's leader, Xi has sent representatives instead of attending personally. The process for a Chinese president to visit the US typically requires months of preparation. Historically, the US invites only diplomatic envoys to inaugurations, with no records of foreign heads of state attending. China may send high-ranking officials to foreign inaugurations but has not confirmed attendance for Trump's inauguration.
https://www.scmp.com/news/china/diplomacy/article/3290460/will-chinese-president-xi-jinping-attend-presidential-inauguration-trumps-invitation?utm_source=rss_feed
China to expand private pension scheme nationwide
Nikkei Asia
China is set to expand a private pension scheme nationwide starting December 15, following a successful pilot program. The initiative allows individuals covered by public pension insurance to open private pension accounts and invest up to 12,000 yuan ($1,652) annually in various financial products, including government bonds and index funds. This move aims to address the pension gap for the country's aging population. The pilot program, which began in November 2022, resulted in over 60 million private pension accounts. Experts note that while private pensions are part of China's pension system, both corporate and private schemes are still underdeveloped, and the public scheme faces financial challenges. Additionally, a proposal to raise the retirement age was approved to mitigate the economic impact of a declining workforce.
https://asia.nikkei.com/Economy/China-to-expand-private-pension-scheme-nationwide
3 challenges for China’s economic growth in 2025
South China Morning Post
China's GDP growth slowed to 4.6% in the first three quarters of 2024, raising concerns about meeting the 5% annual target. Economic activity has remained weak post-COVID, with households increasing savings instead of spending. In response, the government introduced measures to stimulate the economy, including monetary policy adjustments and fiscal initiatives to address local government debt and support employment. Recent data indicates a turnaround, with improved retail sales and manufacturing indices. However, challenges remain, including stabilizing the property sector and managing local government finances. Structural reforms are also necessary for long-term growth.
https://www.scmp.com/opinion/china-opinion/article/3290440/3-challenges-chinas-economic-growth-2025?utm_source=rss_feed
China’s massive Yiwu wholesale hub at the forefront of trade-reform efforts
South China Morning Post
Yiwu, a city in China's Zhejiang province and the world's largest wholesale hub for small manufactured items, is set to undergo significant reforms following State Council approval. The plans aim to address institutional issues, enhance domestic and foreign trade standards, and promote cooperation under the Belt and Road Initiative. Key initiatives include optimizing tariff-free zones, reforming procurement systems, aligning with international trade standards, and improving the management of export companies. The city saw a trade value of 560.2 billion yuan (US$77 billion) in the first ten months of the year, reflecting an 18.3% increase from the previous year. These reforms are anticipated to bolster Yiwu's role in international trade, improve trade structures, and support high-quality development, particularly in light of rising trade tensions with the EU and the US. Yiwu is also leveraging the digital economy by incorporating artificial intelligence in commerce to enhance its trade mechanisms. Overall, the reforms are expected to contribute to China's broader trade transformation and market expansion efforts.
https://www.scmp.com/economy/china-economy/article/3290494/chinas-massive-yiwu-wholesale-hub-forefront-trade-reform-efforts?utm_source=rss_feed
China cybersecurity regulator to continue crackdown on illegal financial services online
South China Morning Post
China's top cybersecurity regulator, the Cyberspace Administration of China (CAC), is intensifying its crackdown on illegal online financial services, targeting unauthorized stock recommendations and unlicensed financial intermediary services. The CAC has taken action against several social media accounts on platforms like Douyin, Kuaishou, Weibo, and WeChat that have engaged in these illegal activities, including clearing content aimed at promoting financial schemes.
The surge in capital-market activity has led to an increase in investor losses due to misleading stock trading insights. With over 220 million individual investors in China, and significant growth in new accounts on the Shanghai Stock Exchange, authorities are concerned about the proliferation of accounts offering unlicensed stock advice. Notably, a prominent influencer, Dalan, was banned for illegally providing stock advice and charging high fees for his courses.
Experts believe that while the crackdown may reduce such activities, it will not eliminate them due to the speculative nature of many individual investors in China's stock market. The CAC aims to regulate the orderly dissemination of financial services amid a booming bull market, which tends to attract more unregulated advice.
https://www.scmp.com/business/article/3290484/china-cybersecurity-regulator-continue-crackdown-illegal-financial-services-online?utm_source=rss_feed
More than half of mainland Chinese luxury consumers plan to increase spending: report
South China Morning Post
A recent report reveals that over half of luxury consumers in mainland China intend to increase their spending on luxury goods and experiences in the next year, with a notable shift towards domestic brands seen as more relevant to their tastes. The average spending on luxury items rose by 7% in 2023, with significant increases among consumers in second-tier cities. While traditional luxury brands like Cartier and Chanel remain popular, local brands like Common Moi are gaining traction. Additionally, younger consumers prioritize individuality and luxury as part of a lifestyle focused on well-being and self-care.
https://www.scmp.com/business/china-business/article/3290429/more-half-mainland-chinese-luxury-consumers-plan-increase-spending-report?utm_source=rss_feed
A pro-democracy ex-lawmaker in Hong Kong has been convicted of rioting during 2019 protests
Associated Press
A Hong Kong judge convicted former pro-democracy lawmaker Lam Cheuk-ting of rioting during a violent clash at a subway station amid the city's 2019 anti-government protests. Prosecutors argued Lam incited a mob of about 100 men, dressed in white, who attacked protesters. The judge stated Lam exploited the situation for political gain instead of acting as a mediator. Lam, already imprisoned on a national security charge, awaits sentencing. The protests arose from a proposed extradition law, leading to increased demands for democratic reforms and police accountability. Over 10,000 people were arrested during the protests.
https://apnews.com/article/hong-kong-riot-verdicts-lam-cheukting-0fc782d0aa375faf8f8c3f91995a9f8f
Japan urges Beijing to protect its citizens in China on Nanking massacre anniversary
South China Morning Post
The Japanese government has urged China to enhance security around Japanese-linked locations due to fears of attacks on its citizens during the anniversary of the Nanking massacre. This comes after two violent incidents targeting Japanese nationals in recent months. Experts highlight the heightened anti-Japanese sentiment in China, driven by historical grievances and propaganda. In response, Japanese schools in China have canceled classes or moved online, and the embassy has advised nationals to avoid speaking Japanese publicly. Public sentiment remains negative in both countries, with significant distrust reported.
https://www.scmp.com/week-asia/politics/article/3290493/japan-urges-beijing-protect-its-citizens-china-nanking-massacre-anniversary?utm_source=rss_feed
Tencent boss Pony Ma praises China’s economic policy, stimulus for private sector
South China Morning Post
Pony Ma Huateng, the CEO of Tencent Holdings, publicly praised recent economic policies by Beijing that support the private sector in a commentary for the People's Daily. He noted that the stimulus measures introduced in September reflect the government's commitment to economic recovery by addressing business challenges and market demands. Ma emphasized that these policies allow enterprises to focus on their core operations and foster development. Alongside other business leaders, he discussed the role of the private sector in driving economic growth, particularly through digital consumption in the internet industry. Ma committed to increasing investment in government-supported areas and aligning technological innovation with industrial progress. This commentary comes after a period of intensified government scrutiny of China's tech giants, which began in late 2020. However, following a significant market decline, the government has since recognized the tech sector's importance in economic revitalization.
https://www.scmp.com/tech/big-tech/article/3290509/tencent-boss-pony-ma-praises-chinas-economic-policy-stimulus-private-sector?utm_source=rss_feed
Panchen Lama to make rare visit to Nepal after Tibet trip, reports say
South China Morning Post
The Panchen Lama, Tibet’s second highest religious figure, is set to visit Nepal for a rare four-day trip to attend the South China Sea Buddhism Round Table. This comes as the Dalai Lama, the exiled spiritual leader of Tibetan Buddhism, is expected to announce a succession plan soon, which is likely to be contested by Beijing. The visit has not been confirmed by either the Chinese or Nepalese governments and follows recent discussions between Nepal's Prime Minister K.P. Sharma Oli and Chinese officials regarding Tibet and Taiwan. The Panchen Lama's visit is being framed as a move toward "religious harmony." He has spent recent months promoting traditional Chinese culture in Tibet and this trip marks his second foreign visit since 2019. The Dalai Lama's potential death raises concerns about social tensions, as his reincarnation process involves finding a child recognized by the current Panchen Lama. The Chinese government insists that such processes must adhere to its laws, while the Dalai Lama has suggested the possibility of ending his reincarnation to avoid Chinese involvement.
https://www.scmp.com/news/china/politics/article/3290495/panchen-lama-make-rare-visit-nepal-after-tibet-trip-reports-say?utm_source=rss_feed
Trump taps failed candidate Kari Lake to lead Voice of America
Al Jazeera
President-elect Donald Trump has appointed Kari Lake, a former Arizona television news anchor and politician, to lead the Voice of America (VOA), a state-funded global media organization. Trump stated that Lake will work alongside the future head of the US Agency for Global Media (USAGM) to ensure American values are broadcast accurately, contrasting VOA with what he calls "Fake News Media." Lake has previously faced criticism for her hardline immigration views and for denying the legitimacy of the 2020 presidential election results. Despite losing the Arizona gubernatorial race, she has continued to express support for Trump's claims of election fraud.
Lake described VOA as a crucial outlet for promoting American interests and democracy globally, pledging to enhance its mission under her leadership. However, her appointment has raised concerns among media freedom advocates, with some arguing that her views could compromise the integrity of VOA's journalism, which is funded by the US Congress and reaches over 354 million people worldwide. There are also historical instances of political interference at the USAGM, leading to calls for safeguarding the organization's independence from political influence.
https://www.aljazeera.com/news/2024/12/12/trump-taps-failed-candidate-kari-lake-to-lead-voice-of-america
Use frozen Russian assets to aid Ukraine, says EU’s top diplomat
Guardian
Kaja Kallas, the EU's top diplomat, has proposed using billions of frozen Russian state funds in the EU to support Ukraine, claiming a legitimate right to compensation for the damage caused by Russia. While the EU has started skimming profits from these assets, concerns about legality have prevented full seizure of the €210 billion. Kallas emphasized the need for Europe to bolster aid to Ukraine, particularly if US support declines, framing assistance as essential for European security. She also discussed broader geopolitical implications, warning against underestimating Russia's ambitions and advocating for a unified EU approach to various crises.
https://www.theguardian.com/world/2024/dec/12/use-frozen-russian-assets-to-aid-ukraine-says-eus-top-diplomat
US hikes tariffs on imports of Chinese solar wafers, polysilicon and tungsten products
Associated Press
The Biden administration is set to increase tariffs on solar wafers and polysilicon from China to 50%, and on certain tungsten products to 25%, effective January 1. This move aims to protect U.S. clean energy businesses and counteract harmful trade practices by China, according to U.S. Trade Representative Katharine Tai. The tariff increases follow a broader review of Chinese trade practices and align with domestic investments to promote a clean energy economy. Additionally, recent tensions have arisen as the U.S. tightened restrictions on Chinese access to semiconductor technology, leading China to ban exports of critical minerals to the U.S. Trade frictions are escalating, and while the Biden administration has maintained some of the tariffs imposed by the previous administration, it is pursuing a more targeted approach. The USTR's investigation that prompted these tariff increases also reviewed a variety of other products, including medical supplies and steel.
https://apnews.com/article/china-us-tariffs-tungsten-solar-a9653d4b14051d78314c2bd8111510e7
China urged to anchor yuan to non-US dollar currencies to empower domestic tools
South China Morning Post
China's Finance 40 Forum has proposed anchoring the yuan to a basket of non-US dollar currencies to enhance flexibility in domestic monetary policy and boost demand. This recommendation arises as China faces challenges balancing looser monetary policies with maintaining an interest rate spread against the US amid rising external risks. The forum emphasizes that this approach would allow the yuan to better reflect economic shifts and create more room for policy adjustments. Additionally, the People's Bank of China is expected to maintain the yuan's basic stability while adopting a "moderately loose" monetary policy to stimulate domestic demand.
https://www.scmp.com/economy/policy/article/3290321/china-urged-anchor-yuan-non-us-dollar-currencies-empower-domestic-tools?utm_source=rss_feed
China’s Wolf Warrior Lu Shaye heads home from France in shadow of controversy
South China Morning Post
Lu Shaye, China's ambassador to France, is concluding his tenure in Paris amidst controversy stemming from his comments regarding Ukraine and former Soviet states. Known for his aggressive "Wolf Warrior" diplomacy, Lu's remarks last year sparked outrage across Europe, prompting diplomatic backlash and calls for his expulsion. Despite the uproar, he completed his term, which began in July 2019, marked by numerous diplomatic incidents, including criticisms of France during the COVID-19 pandemic and contentious statements about Taiwan. At his farewell reception, Lu emphasized the importance of economic and cultural ties between China and France, advocating for pragmatism in solving bilateral issues. He acknowledged the evolution of China-France relations, noting increasing complexities in political and economic matters. Lu's tenure reflects a broader trend in China's assertive foreign policy under President Xi Jinping, even as there are growing calls for Beijing to rein in its aggressive diplomats. As he prepares to return to Beijing, Lu maintains that his controversial comments were personal opinions and not contradictory to China's official stance. His departure marks the end of a tumultuous chapter in Sino-French diplomatic relations.
https://www.scmp.com/news/china/diplomacy/article/3290368/chinas-wolf-warrior-lu-shaye-heads-home-france-shadow-controversy?utm_source=rss_feed
China must innovate in semiconductor design or fall behind the global market, expert says
South China Morning Post
China's semiconductor industry faces challenges due to increased US technology restrictions, prompting experts to advocate for the development of independent chip-design technologies. Wei Shaojun from Tsinghua University emphasized the need to create a self-sufficient technological ecosystem and innovate in design architecture and microsystem integration. With limited access to advanced manufacturing technologies, the Chinese IC market, projected to reach 646 billion yuan in sales, remains dependent on lower-end chips and lacks transformative applications. Despite these obstacles, China’s semiconductor imports and exports showed growth, indicating ongoing efforts to adapt to the restrictions.
https://www.scmp.com/tech/tech-war/article/3290367/china-must-innovate-semiconductor-design-or-fall-behind-global-market-expert-says?utm_source=rss_feed
US House advances defence bill that bans Chinese goods from tech to garlic
South China Morning Post
The US House of Representatives has passed the National Defence Authorisation Act (NDAA), which includes a ban on various Chinese technologies, such as lidar, and the sale of Chinese garlic in military commissaries. The $884 billion bill, crucial for military funding, is expected to be signed into law by President Biden. The NDAA emphasizes countering China and expanding the US defense industrial base in the Indo-Pacific. While several aggressive measures against China were not included, observers suggest Republicans may pursue stricter legislation in the next Congress, given their future control of both chambers.
https://www.scmp.com/news/china/article/3290404/us-house-advances-defence-bill-bans-chinese-goods-tech-garlic?utm_source=rss_feed
Trump Will Be His Own Trade Czar
Foreign Policy
In 2000, Donald Trump expressed his desire to take control of U.S. trade policy by appointing himself as U.S. trade representative. His recent decision to not reappoint his first-term chief trade negotiator, Robert Lighthizer, signals a shift in his approach to trade. With a relatively inexperienced nominee for U.S. trade representative and a blend of trade hawks and traditional Republicans in his economic team, Trump appears to be asserting direct control over trade negotiations. His aggressive rhetoric includes threats of tariffs on countries like Mexico and Canada, indicating a more chaotic and unpredictable stance than during his first term.
The focus of Trump's second term is not the debate over free trade versus protectionism, as free trade advocates have lost influence. Instead, the question is how protectionism will manifest and how trading partners will respond. Trump's first term saw significant tariff increases against allies and adversaries alike, but the process was somewhat predictable, allowing companies to plan accordingly. In contrast, Trump's current threats, such as imposing tariffs on all products from Canada and Mexico or against BRICS countries, represent a radical departure from established norms in trade relations, creating uncertainty for businesses and governments alike.
Lighthizer’s absence raises questions about Trump’s trade strategy and the lack of experienced voices in his new economic team. While Trump's past threats were often tempered by negotiation, the current mix of advisors lacks the expertise to provide stability. As Trump prepares to take charge, the potential for widespread and unprecedented tariff increases looms, challenging the existing trade agreements and undermining the predictable frameworks that have guided U.S. trade policy for decades. The world must brace for the implications of Trump's unpredictable trade strategies as he returns to center stage.
https://foreignpolicy.com/2024/12/11/trump-trade-tariffs-china-europe-canada-mexico-imports-exports/
Analysis: Bashar Assad's fall reminds Xi Jinping of a Donald Trump bombshell
Nikkei Asia
Katsuji Nakazawa, a senior writer at Nikkei, discusses the implications of Bashar Assad's recent ousting in Syria and its impact on China's foreign policy. In September 2023, Assad and Chinese President Xi Jinping agreed to enhance their countries' bilateral relations to a "strategic partnership," a move that was ultimately seen as a miscalculation. China's backing of Assad highlighted its close ties with Russia amid the Ukraine conflict, but the regime's collapse raises doubts about Russia's influence and disrupts China's strategy in the Middle East.
Additionally, Nakazawa recalls the tense Xi-Trump meeting in 2017 at Mar-a-Lago, where Trump unexpectedly announced U.S. airstrikes on Syria, aiming to pressure China on North Korea. This incident illustrated Trump's unpredictable nature and strategic maneuvering against both Xi and Putin. With Trump set to return to the presidency, questions arise regarding his future dealings with Xi, Russia, and North Korea, especially in the context of ongoing geopolitical tensions and the evolving landscape in the Middle East and beyond.
https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-Bashar-Assad-s-fall-reminds-Xi-Jinping-of-a-Donald-Trump-bombshell
Was a Philippine Mayor a Secret Chinese Spy?
Foreign Policy
Alice Guo, an independent candidate, won the 2022 mayoral elections in Bamban, Philippines, but is now in police custody facing accusations of cybercrimes and espionage, alleged to be a Chinese spy with ties to Chinese state officials. Guo has denied these allegations. Her arrest follows a crackdown on illegal online gaming centers, which have been linked to human trafficking and financial scams. The political climate in the Philippines has turned hostile toward China, especially after aggressive actions in the South China Sea, prompting heightened scrutiny of politicians with potential connections to Beijing. Guo's case has ignited significant controversy, with claims that her campaign was funded by Chinese state security and questions about her citizenship legitimacy. The Philippine Congress is investigating her background and the online gaming operations, with political implications for the Marcos administration, which has distanced itself from China since taking office. The hearings have sparked accusations of anti-Chinese sentiment and have become a platform for broader discussions on foreign influence in the country, particularly in light of the fractured alliance between the Marcos and Duterte families.
https://foreignpolicy.com/2024/12/11/alice-guo-espionage-philippines-spies-china/
EU to sanction China entities for role in supporting Russia’s war in Ukraine
South China Morning Post
The European Union has reached a provisional agreement to impose sanctions on Chinese entities for the first time due to their support of Russia's invasion of Ukraine. This includes freezing assets of six companies based in China and Hong Kong and imposing a visa ban on one Chinese citizen. This marks the fifteenth package of sanctions since the invasion began in February 2022, with increasing efforts to prevent circumvention of existing sanctions and to limit military supplies to Russia. While previous sanctions targeted Chinese firms for allegedly supplying dual-use products to Russia, this is the first instance of direct sanctions related to the invasion. The specific companies and individual targeted have not been disclosed, but reports suggest one firm is linked to supplying microelectronic components for Russian military drones. The EU is also considering actions against a factory in Xinjiang suspected of manufacturing drones for Russia. Despite these allegations, China maintains it has not provided military support to Russia and calls for peaceful negotiations regarding the conflict.
https://www.scmp.com/news/china/diplomacy/article/3290390/eu-sanction-china-entities-role-supporting-russias-war-ukraine?utm_source=rss_feed
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