China in Quotes
“The number of Chinese companies developing foundational LLMs will nosedive into the single-digits, with those eliminated in the competition likely to opt for developing LLMs for vertical domain applications using open-sourced technologies,” Song Chunyu, Vice President, Lenovo Group
De/Cypher Data Dive📈
China fishes in any ocean in the world, and on a scale that dwarfs the entire fleets of some nations near their own waters. The fleet has also been linked to illegal activity, including encroaching on other countries’ territorial waters.
Asia View
AI Diplomacy Begins
Written by Amogh Rai, Research Director, ASIA
It is not the deal size that is the reason for headlines about the Microsoft-G42 deal but the geopolitical fallout from it, with this deal Microsoft gets a foot in another rising AI company but more than that the United States works towards reducing the tech influence of Beijing in an area that is important for both Beijing and Washington. Writing in Dealbook Andrew Ross Sorkin, commented on the favourable terms of the deal for the United States mission to reduce Chinese backdoors on various platforms. “G42 will be able to sell Microsoft services that use powerful A.I. chips; in return, it will use Microsoft’s Azure cloud services for its A.I. offerings. More important, G42 agreed to strip out equipment from Chinese companies like Huawei from its systems, eliminating what U.S. officials worry could be a potential backdoor for Chinese intelligence agencies.”
The deal is being seen as another re-alignment away from Beijing. The challenge in executing deals in the Middle East for both the camps Beijing, and Washington stem from the the ability of the parties concerned in playing one side against the other.
An illustration of this is the way G42 came out against being sanctioned by the United States for its very close ties to China. In a March essay by Schneider and Welch in China Talk this point is made emphatically.
“In another high-profile case, the Emirati AI and biotech firm G42 came under scrutiny by US officials: American intelligence agencies warned that G42 has been working for China, funneling thousands of US-citizen biometrics to Chinese companies through collecting COVID test kits. G42 chose the US this time: its CEO, Xiao Peng 肖鹏, signaled that the firm “would phase out hardware purchases from Huawei’’ — but not before candidly asserting, “We cannot work with both sides. We can’t.” (Also of note: before joining G42, Xiao was the COO of Yitu Technology 依图科技, a Chinese AI firm sanctioned by the US government for its deployment of mass surveillance software.)”
The AI diplomacy campaign has just begun and both the sides will be very keen to influence the outcome but the sands of alliance in this geo-strategically important region shift fast.
Quick China: Six Unmissable Stories 📜
China will put in place tighter regulations for Capital Markets
China will take measures to strengthen supervision, forestall risks, and promote high-quality development of the capital market, according to a circular released by the State Council on April 12.
According to the circular, in the next five years, the overall framework for high-quality development of the capital market will be formed, and the institutional mechanism for investor protection will be improved. The quality and structure of listed companies will be significantly optimized, and the strength and service capacity of institutions engaged in securities, funds, and futures will continue to be intensified.
By 2035, the goal is to establish a competitive and inclusive capital market, ensuring better investor protection and modernizing governance systems. To achieve these aims, initiatives include refining the issuance and listing system, raising standards for main board and growth enterprise board listings, and enhancing evaluation criteria for the sci-tech innovation board. Read more: China Information
China Celebrates National Security Education Day
The documentary – Led by Innovation, National Security Sharpens the Sword – which was aired on Sunday by state broadcaster CCTV and has been posted to the ministry’s social media page, is part of a campaign to mark the annual National Security Education Day. Authorities in Beijing have revealed that a Chinese scientist who was convicted in 2015 of selling state secrets to foreign spy agencies was executed in 2016, one of several “shocking” spy cases. The death sentence and execution were disclosed in a new documentary produced by the Ministry of State Security, China’s top counter-espionage agency, which profiled 10 prominent spy cases from the past. Read more: SCMP
China – Russia Weapons and Critical Minerals Trade
Russian copper producer RCC and Chinese firms have avoided taxes and skirted the impact of Western sanctions by trading in new copper wire rod disguised as scrap, three sources familiar with the matter told Reuters. Copper wire rod was shredded in China’s remote Xinjiang Uyghur region by an intermediary to make it difficult to distinguish from scrap, the sources said, allowing both exporters and importers to profit from differences in tariffs applied to scrap and new metal, the sources said. Russia’s export duty on copper rod was 7% in December, lower than the 10% levy on scrap. Imports of copper rod into China are taxed at 4%, but there is no duty on Russian scrap imports. There are no legal obstacles preventing China from buying metal from Russian firms under Western sanctions. But manufacturers are worried about losing export business to customers – including those in the U.S. and UK – if they are known to be doing business with Russian firms. The sources said some Chinese companies have set up new teams to deal with Russia-related business. Read more: Reuters
Shanghai Plans $276 Billion Funding Support for Innovative Tech Firms
Financial institutions in Shanghai are to provide 2 trillion yuan ($276 billion) in funding to support innovative technology companies over the next three years under an initiative backed by the central bank. The Shanghai branch of the People’s Bank of China (PBOC), along with city authorities, Monday unveiled a special loan guarantee program aiming to assist private businesses through equity, loans, bonds, insurance and other financing means. Under the plan, qualified small and medium-sized enterprises will be granted up to 20 million yuan in credit guarantees for up to three years provided by member institutions of the Shanghai Science and Technology Finance Alliance and the city government’s financing guarantee center. Up to 100 million yuan guaranteed credit will be offered to large private enterprises. The special loan guarantee program was unveiled as Shanghai kicked off a month-long campaign to improve the business environment and address private sector financing needs. This initiative aligns with President Xi Jinping’s vision to bolster “new productive forces” through innovation-driven economic development. Read more: Caixin
Demand of Donkeys in China is devastating African communities
China’s demand for a traditional medicine known as e-jiao is fueling the slaughter of millions of donkeys every year, say animal welfare groups and veterinary experts. E-jiao, which is made using collagen extracted from donkey hides, is the vital ingredient in food and beauty products believed by many Chinese consumers to enrich the blood, improve the immune system, and prevent diseases. Reuters spoke to more than a dozen experts, including veterinarians and academics, to examine how demand for e-jiao is rippling across communities in Africa, which rely heavily on the donkey, and how the trade in hide continues to boom despite efforts by some African nations to restrict it. The e-jiao industry requires an estimated 5.9 million donkey skins annually, which has put unprecedented pressure on global populations, according to a report released in February by The Donkey Sanctuary, a British charity devoted to the animal’s welfare. China’s donkey population has fallen more than 80% to just under 2 million from 11 million in 1992, prompting its e-jiao industry to source donkey skins from overseas.
Traditionally, e-jiao was a luxury product. It gained favor among elites during the Qing dynasty that ruled China from 1644 until 1912. Its popularity has surged in recent years due partly to its use in the Chinese television series ‘Empress in the Palace’, which started airing in 2011. The rise in demand has also been fuelled by China’s growing middle class and rising elderly population. Its price has leapt 30-fold in the past decade from 100 yuan per 500 grams to 2,986 yuan ($420), according to Chinese state media. Read more: Reuters
State-owned enterprise, further rejig
Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council in the latest issue of Qiushi – “Continuously innovate the Chinese-style state-owned asset supervision system”.
Excerpt: Currently, the international situation is extremely severe and complex, and the foundation for the continuous recovery and improvement of China’s economy is still not stable. There is a need for the state-owned economy and state-owned enterprises to better play a leading role and provide strategic support. However, whether in terms of “quality” or “quantity,” there is still a gap between state-owned enterprises and the mission responsibilities they bear. Under these circumstances, in order to properly manage state-owned assets, it is essential to make strengthening, improving, and enlarging state-owned enterprises the overall goal. We must further implement the new development concept completely, accurately, and comprehensively, and solidly promote the high-quality development of state-owned enterprises. In particular, greater efforts should be made to strengthen and improve, perfecting the mechanisms for assessment, rewards, and penalties, and incentive constraints. (Source: Qiushi)
Beyond The Great Wall 🧱
Exploring News About China in Depth
Internal Politics 🏛️
Geely to Sell $1.32 Billion of Volvo Truck Shares
China’s Zhejiang Geely Holding Group is selling its entire Class B shares in truckmaker Volvo AB for approximately 14.46 billion Swedish krona ($1.32 billion). Geely stated that this divestment is in accordance with its long-term strategy and that it will remain Volvo’s second-largest investor with 88.5 million A shares. The sale is being facilitated by BofA Securities, Goldman Sachs Bank Europe, and Barclays. Geely’s listed arm in Hong Kong fell more than 3% on the day of the announcement. Read more: Bloomberg
Chinese premier holds symposium with overseas buyers at Canton Fair
Chinese Premier Li Qiang held a symposium with overseas buyers at the 135th Canton Fair, where representatives expressed confidence in China’s economic development and pledged to expand business in China. Li appreciated their participation, highlighting the fair’s role in fostering trade exchanges. He emphasized China’s commitment to further opening up, promoting trade liberalization, and providing support for international businesses in China. Li urged overseas enterprises to continue exploring the Chinese market and enhancing mutual cooperation. Read more: Xinhua
Former official of China’s Guangxi under probe
Qin Rupei, former member of the Standing Committee of the Guangxi Zhuang Autonomous Region Party Committee and former Vice Chairman of the Autonomous Region Government, is under investigation. Read more: Xinhua
Star Chinese Fund Manager Prosecuted for Bribery
Cai Songsong, a former star fund manager at Lion Fund Management Co. Ltd., and his ex-colleague Qu Quanru have been prosecuted for bribery linked to their trading of a small- to mid-cap Shenzhen-listed stock for personal gains, sources with knowledge of the matter told Caixin.
The case was heard on March 27 by a court in Jinhua in East China’s Zhejiang province, according to a screenshot of a court statement which went viral on Chinese social media on Monday. Dong Boxiong, previously a research assistant at Guosen Securities Co. Ltd., was a third defendant, according to the screenshot, which did not specify the stock involved or the charges against the three. Read more: Caixin Global
China’s top economic planner vows to ramp up measures to secure growth as Q1 result shines, despite West’s ‘Peak China’ hype
China’s National Development and Reform Commission (NDRC) announces stimulus measures following Q1 GDP growth of 5.3%, pledging further support for economic stability. Efforts include facilitating investments, promoting foreign investment, and deepening comprehensive reform. Despite external challenges, experts defy “Peak China” rhetoric, highlighting ongoing economic potentials and structural adjustments. Positive projections by financial institutions and the Asian Development Bank reinforce confidence in China’s economic resilience, despite lingering challenges such as weak domestic demand and complex international environment. Read more: Global Times
Vice-Premier He Lifeng calls on ‘critical’ property sector must deliver on time
Vice-Premier He Lifeng urged on-time delivery of properties and financing support for developers at a meeting in central China over the weekend, rallying efforts to revive a sector critical for this year’s economic growth target and financial stability. China’s property sector once contributed about a quarter of the national economic output, but it has yet to bottom-out in terms of investment and sales, while market confidence remains weak.
“We must understand the property sector is critical,” the vice-premier told local officials, developers and bankers in Zhengzhou, Henan province, during the two-day inspection tour. Read more: SCMP
China lays out 3-year plan to build digital workforce and overcome shortfall of workers needed to win tech race
China’s youth are shifting away from consumerism towards seeking fulfilling experiences, prompting Chinese universities to introduce new majors related to the digital economy. Local governments are encouraged to provide incentives for digital workers, aiming to address China’s employment challenges and attract overseas talent. Meanwhile, China’s top spy agency warns of foreign espionage targeting critical sectors like rare earths and food technology, emphasizing their importance to national security. This comes amid concerns over China’s anti-espionage laws and increased vigilance against foreign influence. Read more: SCMP
China And The World🌐
US lawmakers target Chinese military firms helping Russia with bill imposing ‘full blocking sanctions’
US lawmakers introduce bipartisan bill imposing sanctions on Chinese military firms aiding Russia, amid concerns over material support allegedly fueling the Ukrainian conflict. The No Limits Act targets firms providing assistance to Russia, giving them 180 days to withdraw from the Russian market or face “full blocking sanctions.” The bill reflects bipartisan distrust of China, with outgoing chairman Mike Gallagher stressing the need to impose a financial cost on China’s partnership with Russia. The legislation also aims to strengthen controls on export-controlled technologies and grant authority to sanction Chinese firms involved in military modernization efforts. Read more: SCMP
Biden to triple tariffs on Chinese steel ahead of reelection bid
President Joe Biden plans to triple tariffs on Chinese steel and aluminum imports in response to concerns about the impact of cheap Chinese exports on the U.S. steel industry. The move aims to address pressure from labor unions and bolster Biden’s re-election bid, particularly in battleground states like Pennsylvania. The proposed tariff hike reflects Biden’s commitment to supporting domestic manufacturing and echoes former President Trump’s “America First” trade approach against China. The tariffs would target Chinese steel companies allegedly benefiting from heavy subsidies and dumping products at unfairly low prices, according to Biden. The proposal has drawn criticism from the Trump campaign, signaling bipartisan tensions over trade policy. Read more: VOA
China Slams US Move to Investigate Its Shipbuilding Industry
China strongly criticized the Biden administration’s decision to investigate its maritime, logistics, and shipbuilding sector, labeling it as a move driven by domestic politics rather than genuine concerns. The Chinese Commerce Ministry denounced the probe as based on false accusations and emphasized China’s intention to protect its rights and interests. Beijing urged the U.S. to respect facts and multilateral rules, emphasizing the need to return to a rules-based trade regime. Read more: Bloomberg
House panel says China subsidizes fentanyl production to fuel crisis in the United States
A House committee has accused China of exacerbating the fentanyl crisis in the U.S. by subsidizing the production of materials used to make the drug outside its borders, according to a report. The committee found evidence of tax rebates for specific fentanyl precursors if sold abroad, suggesting China’s complicity in facilitating the epidemic. Despite bilateral cooperation efforts, questions arise about China’s commitment to curbing synthetic drug trafficking. Read more: AP News
President Xi: China-Germany cooperation not ‘risk’ but opportunity
Chinese President Xi Jinping emphasized the mutual benefits of cooperation between China and Germany during a meeting with German Chancellor Olaf Scholz. Stressing the stability of bilateral relations, Xi called for long-term strategic cooperation, highlighting potential in traditional and emerging fields like green transformation and digitalization. Both leaders affirmed the importance of free trade and multilateralism, discussing global challenges such as climate change and regional conflicts. Read more: CGTN
Chinese state firm agrees US$400 million loan for Niger junta in return for oil
Niger’s military junta has secured a $400 million loan from a Chinese state-owned oil company, CNPC, following the severance of ties with France and the US. The deal aims to assist Niger’s economy amid sanctions, with repayment planned through crude oil shipments at a 7% interest rate within a year. While hailed by Niger’s Prime Minister as safeguarding national interests, critics warn of the risks associated with resource-backed loans, emphasizing their potential to burden countries with debt and compromise their future. Read more: SCMP
China engages with Iran, Israel and Saudi Arabia on Iran-Israel tensions
Chinese Foreign Minister Wang Yi has engaged in extensive communication with Iran, Israel, and Saudi Arabia following Iran’s retaliatory attacks against Israel. Wang emphasized the need to prevent further escalation in the Middle East and promote regional peace. China condemned the attack on the Iranian embassy in Syria and supported Iran’s stance of restraint. Additionally, Wang discussed the situation with Saudi Arabia, advocating for diplomatic solutions and the implementation of a ceasefire in Gaza. China also expressed concerns to Israel about the escalation of tensions and emphasized the importance of a political settlement based on the two-state solution for lasting peace in the region. Read more: Global Times
Tim Cook Says Apple Considers Making Gadgets in Indonesia in Pivot From China
Apple CEO Tim Cook has expressed interest in potentially manufacturing some of the company’s gadgets in Indonesia, following a request from President Joko Widodo. This move signifies Apple’s exploration of production bases beyond China amid rising geopolitical tensions. Cook’s remarks came during a visit to Jakarta, where Apple also inaugurated its fourth Apple Developer Academy in Indonesia. The company’s consideration of Indonesia aims to tap into the growing Southeast Asian market and diversify its manufacturing operations. Read more: Bloomberg
US and Chinese defense chiefs hold their first talks in nearly 18 months.
On April 16, 2024, Secretary of Defense Lloyd J. Austin III engaged in a video teleconference with People’s Republic of China (PRC) Minister of National Defense Admiral Dong Jun. They discussed U.S.-PRC defense relations, emphasizing the importance of open communication and adherence to international law regarding freedom of navigation, particularly in the South China Sea. Read more: DOD
Tik-Tok US Employees Allege That The Platform Worked Closely With Parent Company in China
But with the House voting in March to force ByteDance to sell its stake in TikTok, 11 former employees interviewed by Fortune tell a vastly different story. Many of those ex-workers, four of whom were employed as recently as last year, say at least some of TikTok’s operations were intertwined with its parent during their tenures, and that the company’s independence from China was largely cosmetic. A few of the former workers would only speak to Fortune on the condition of anonymity for fear of retaliation by TikTok, including the company seizing restricted stock they were given while still employees. Read more: Fortune
Far fewer young Americans now want to study in China. Both countries are trying to fix that
The number of young Americans studying in China has dropped significantly due to COVID-19 policies, academic freedom concerns, and strained US-China relations. Currently, only 700 American students are enrolled in Chinese universities, down from a peak of 25,000. Rebuilding student exchanges faces challenges, but some remain committed to studying in China for firsthand experience. China is also promoting exchanges, aiming to strengthen ties. Read more: AP News
Young people are flocking to Taiwan to work in Chip industries
Young tech enthusiasts from Southeast Asia are flocking to Taiwan to pursue training and careers in the semiconductor industry, addressing the talent gap faced by the world’s leading producer, TSMC. This influx is attributed to Taiwan’s prestigious universities offering scholarships to international students, highlighting the nation’s appeal amidst a growing interest in artificial intelligence. Read more: Rest of World
News From Asia 🌏
Friday
- There are conflicting reports about an Israeli attack on Iran. There were explosions heard near an Iranian army base, but Iran says they were the result of their air defense systems and there were no ground explosions. Read more: Reuters
- The US vetoed a Security Council resolution that would have granted the Palestinians full-member status at the UN. Twelve nations, including France, Japan, and South Korea, backed the statehood bid, even though they haven’t individually recognized a Palestinian state. Read more: The Times of Israel
- South Korea’s government is expected to announce adjustments to its plans to raise medical school admissions in order to end a walkout by junior doctors and in response to the ruling party’s election defeat. Read more: CNA
- Doctors in Japan are having difficulty refuting negative reviews on Google Maps because of their obligation to maintain patient confidentiality. They have decided to take legal action against Google to improve the system. The government is also developing measures to combat online slander and defamation. Read more: The Japan News
Thursday
- Vote counting began in the Solomon Islands on April 18, 2024, following the general elections, with ballot boxes transported to secure counting centers in the capital, Honiara. The election is significant as it determines the nation’s leadership and its stance on China’s growing influence, with incumbent Prime Minister Manasseh Sogavare seen as a pro-China figure. Read more: CNA
- Nepal’s Ministry of Education plans to crack down on teachers engaged in partisan politics, despite it being illegal for government employees to be members of political parties. The ministry is working to identify individuals involved, seeking support from the Election Commission. Read more: ANN
- Around 70 people have died due to heavy rains in Afghanistan over the past five days, with widespread damage reported. Afghanistan’s vulnerability to extreme weather events is compounded by its lack of preparedness after decades of war, as highlighted by the United Nations. Read more: Dawn
- Oracle plans to invest over $8 billion in Japan over the next decade to build more data centers, aligning with global trends in data sovereignty. This follows similar moves by tech giants like Microsoft and Amazon Web Services. Read more: Nikkei
Wednesday
- During Iran’s recent assault on Israel, Jordanians, in a mix of seriousness and satire, attempted to sell remnants of downed Iranian rockets online, including on the platform “al-Sooq al-Maftouh.” Ads ranged from offering a piece of a rocket for 50 Jordanian dinars to a full missile for 120,000 dinars. Read more: Haaretz
- The interior ministry of Pakistan confirmed the blocking of social media platform X, during February’s election due to national security concerns. This move, suspected by users since mid-February, was prompted by X’s failure to comply with government directives regarding platform misuse. Read more: CNA
- Recent fatal clashes in Papua have led experts to call for more restraint in the Indonesian Military’s (TNI) handling of tensions in the country’s easternmost region. Papua has been a conflict zone between separatists and security forces since the 1970s, but tensions have escalated significantly since 2018, with pro-independence armed groups carrying out deadlier and more frequent attacks. Read more: The Jakarta Post
- In Singapore, a rare protest against Israel’s arms deal prompts police investigation, shedding light on the nation’s evolving views on the Israel-Gaza conflict. Despite strict laws on demonstrations, activists unfurled a banner at Gardens by the Bay, reflecting growing empathy for Palestinians among Singapore’s political elite. The incident underscores domestic challenges for the government, signaling a shift in societal sentiment towards Israel and raising questions about Singapore’s strategic relationship with the country. Read more: SCMP
Tuesday
- A US State Department report revealed that North Korea possesses the capability to genetically engineer biological military products. The report, developed in collaboration with various departments including Defense and Energy, emphasized Pyongyang’s dedicated offensive biological weapons program, mentioning technologies like CRISPR for genetic manipulation. Read more: The Korea Herald
- Following a crushing election defeat, President Yoon Suk Yeol faces intensified criticism from the main opposition Democratic Party of Korea, demanding a special counsel probe into alleged state interference in the investigation of Marine Cpl. Chae Su-geun’s death. With the Democratic Party holding a simple majority in the National Assembly, they aim to pass the bill despite potential opposition from Yoon’s ruling People Power Party. Read more: ANN
- The International Atomic Energy Agency (IAEA) warns that recent attacks on Europe’s largest nuclear power plant, Zaporizhzhia in Russian-controlled Ukraine, have brought the world dangerously close to a nuclear accident. The IAEA confirmed three attacks on the plant since April 7, emphasizing the need for these reckless attacks to cease immediately to prevent a radiological incident. Read more: Arab News
- Apple CEO Tim Cook expressed his desire to increase investment in Vietnam during a meeting with Prime Minister Pham Minh Chinh, following Apple’s announcement of increased spending on suppliers in the country. Vietnam has gained importance for Apple as it diversifies its supply chains away from China due to disruptions caused by COVID-19. Read more: AP News
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