Highlighted links for June 15, 2023

Below are links from our NewsBase to other noteworthy reports published in the last 24 hours from and about China.

BUSINESS AND TECHNOLOGY:

AI

U.S. seeks talks with China on military AI amid tensions / Nikkei Asia (paywall)
“The Biden administration plans to encourage China to work with the U.S. on international norms for artificial intelligence in weapons systems, a potential new area of cooperation amid tensions between the two powers.”

Economic gloom

China’s economy slows in May, more stimulus expected / Reuters
“China’s economy stumbled in May with industrial output and retail sales growth missing forecasts, adding to expectations that Beijing will need to do more to shore up a shaky post-pandemic recovery.”
China cuts rates to prop up flagging recovery / WSJ (paywall)
“Central bank’s latest move follows disappointing May data and yet another rise in youth unemployment.”
China eyes support for consumer, private sectors as growth falters / Reuters
“China will roll out more stimulus to support a slowing economy this year, but concerns over debt and capital flight will keep measures targeted at shoring up weak demand in the consumer and private sectors, sources involved in policy discussions said.”
China’s recovery weakens as industrial, retail activity slow / Caixin (paywall)
“China’s economic recovery weakened in May as growth in industrial output and retail sales slowed, putting pressure on policymakers to step up stimulus.”
Chinese economic data fuels gloom over recovery / FT (paywall)
Opinion: Beijing must act to avoid an ‘L-shaped’ future / WSJ (paywall)
“China’s recovery is losing momentum with remarkable speed. But Beijing still looks focused on security at the expense of growth.”

Banking fraud
China to deploy deposit insurance to repay victims of rural banking fraud / FT (paywall)
“China plans to deploy billions of renminbi from a national deposit insurance fund to resolve a group of failed provincial banks, setting an important precedent for its approach to a future financial crisis.”

Data controls
How China Is tightening controls over cross-border data transfers / Caixin (paywall)
“China is putting cross-border data transfer by multinational companies and others under the toughest government oversight ever.”

Local debt
China’s hidden local government debt soars to over $8tn / Nikkei Asia (paywall)
“A measure of the off-the-books debt of Chinese local governments swelled by half between 2019 and 2022, amid shrinking revenue and heavy borrowing to pay for economy-supporting infrastructure projects.”

Cryptocurrencies
HSBC and Standard Chartered pressed by Hong Kong regulator to take on crypto clients / FT (paywall)
“Hong Kong’s banking regulator is pressuring lenders including HSBC and Standard Chartered to take on crypto exchanges as clients, even as US regulators crack down on the industry.”

U.S.-China tech war
Can AI give China the upper hand to surpass the US and become the world’s top economy after ChatGPT changed the game? / SCMP (paywall)
“When the San Francisco-based OpenAI unveiled ChatGPT to the market in November, hailed as the so-called iPhone moment for artificial intelligence (AI), it cast a shadow across the Pacific.”

Real estate
China’s slower home price growth, deepening investment slump signal more easing / Reuters
“​​China’s new home prices rose at a slower pace in May, while the steepest slump in property investment in over two decades underlined the depth of demand problems in the crisis-hit property sector and pointed to more easing steps on the cards.”
China’s property sector recovery loses steam after home prices face strong headwinds, investments decline / SCMP (paywall)
“Recovery in China’s property sector continued to lose steam as almost all metrics showed a decline in May, which some analysts blamed on weak confidence, population movements and potential oversupply problems.”
China ramps up approvals of developers’ share sales / Nikkei Asia (paywall)
“Regulators have been accelerating approvals for real estate developers’ private share sales, signaling a doubling down on support to help the companies alleviate liquidity strains.”
Why China’s housing policies have failed / PIEE
A review of “the current housing crisis in China and …the roles of supply-demand imbalances and local governments in the real estate sector.”

Lithium and electric vehicles
In China’s lithium hub, mining boom comes at a cost / Reuters
“Down a steep dirt road from the Baishi Huashan lithium mine in southern China, trucks laden with silvery gray ore rumble towards a cluster of smelters in the valley below that have sprung up to cash in on the electric vehicle battery boom.”
Audi chief sets sights on China in electric car catch-up / Reuters
“Audi has to speed up development of new models to meet a surge in demand for electric vehicles, especially in China.”
Philippines says China’s Yadea to invest $1 bln in e-motorcycle plant / Reuters
“​​Yadea is one of several electric vehicle (EV) manufacturers looking at the Southeast Asian nation for expansion of their manufacturing sites.”

Alibaba
Alibaba aims to expand local business in Europe, president says / Reuters
“Alibaba Group will make Europe top priority as it focuses on building local businesses and online platforms outside China, the president of the e-commerce giant said on Thursday.”

Urban infrastructure
Guangzhou to offer REIT shares in subway’s ‘Hell Line 3’ / Caixin (paywall)
“Selling equity in its busiest, $699 million subway line will help the Greater Bay Area city pay the multibillion-dollar tab for 11 other subway lines.”

Siemens
Siemens unveils big investments in China and Singapore factories / FT (paywall)
“German conglomerate says it needs to diversify to serve more markets in Asia and tackle supply chain issues.”

Huawei and other sanctioned companies and the EU
EU funding Huawei in critical tech projects despite bans on Chinese group / FT (paywall)
Number of sensitive Horizon Europe research programmes include communications company facing range of curbs.
EU set to scrap trade curbs to some Chinese firms on Russia / Blomberg (paywall)
Companies were seen as supplying banned tech to Russian firms.

Temu, TikTok, and Shein in the U.S.
TikTok, Shein and other companies distance themselves from China / NYT (paywall)
“Companies are moving headquarters and factories outside the country and cleaving off their Chinese businesses. It’s not clear the strategy will work.”

Semiconductors and industrial espionage
Top U.S. chip gearmaker accuses China rival of 14-month spy spree / Bloomberg (paywall)
“Applied Materials says Chinese-owned Mattson behind IP theft.”

Detained Japanese businessman
China should treat detained Japanese employee fairly: business group / Nikkei (paywall)
“Comment comes as Japan chamber of commerce calls for clarity on data laws.”

SCIENCE, HEALTH, AND ENVIRONMENT:

Infectious diseases
Chinese scientists find small air pollution particles such as PM2.5 can act as ‘Trojan horse’ for viruses / SCMP (paywall)
“Air pollution can ‘act as a Trojan horse’ and worsen the severity of viral infections by driving viruses deep into the lungs and other organs, according to a study led by researchers from the Chinese Academy of Sciences (CAS).”

Extreme weather
China, Mongolia to fight sandstorms amid calls to curb economic and ecological harm / SCMP (paywall)
“Beijing and Ulaanbaatar have stepped up joint efforts to prevent sandstorms that swept across northern China earlier this year, with a Chinese delegation set to visit Mongolia from later this month to jointly work on solutions, according to information obtained by the Post.”

Fertility treatments
Beijing to cover IVF, other fertility treatments for couples from July / Reuters
“Beijing’s government on Thursday announced that it would cover 16 types of assisted reproduction technology under the city’s health care system from July 1, the latest move by authorities to boost China’s flagging birth rate.”

Nuclear and hydrogen power vs. coal
China gives green light to nuclear reactor that burns thorium – a fuel that could power the country for 20,000 years / SCMP (paywall)
“Technology has several advantages over uranium reactors, including better safety, reduced waste, improved fuel efficiency and suitability for use in arid areas.”
China edges closer to embracing green hydrogen / FT (paywall)
“‘Inflection point’ for the economics of hydrogen versus coal looms in 2030.”
China ramps up coal power while pushing for renewables / FT (paywall)
“Concerns over energy security appear to be cutting against…net zero ambitions — for now.”

POLITICS AND FOREIGN AFFAIRS:

Xi Jinping’s birthday
China’s Xi Jinping turns 70, but Communist Party won’t celebrate / WSJ (paywall)
“Leader marks birthday quietly, with many years in power likely ahead of him.”
Behind a birthday message, the delicate duet of Putin and Xi / NYT (paywall)

“The shows of bonhomie between the two leaders reflect the bond between Russia and China, which could become more fraught as Russian dependence deepens.”

• Note: The Party is not calling it a birthday celebration, but soccer fan Xi no doubt watched Lionel Messi play in Beijing today in a friendly game between Argentina and Australia. Argentina won 2-0.

Premier Li goes on first overseas trip
China’s Premier Li to visit Germany, France in first overseas trip / Reuters
“China’s Premier Lǐ Qiáng 李强 will on Saturday embark on his first overseas trip since taking office, seeking to expand ties with Germany and France in a visit that comes a month after leading western democracies agreed to ‘de-risk’ trade with Beijing.”
Li Qiang to make first overseas trip as Chinese premier to France and Germany / SCMP (paywall)

Censorship in Hong Kong
Hong Kong protest song disappears from music streaming sites, social media platforms / AP
“A popular Hong Kong protest song was no longer available Wednesday on several major music streaming sites and social media platforms, after the government sought an injunction to ban the tune.”

Spotify confirms removal of ‘Glory to Hong Kong’ protest song, points to action by tune’s creator-distributor / SCMP (paywall)

U.S.-China competition and tensions
Blinken heads to China on mission to stabilize ties / Caixin (paywall)
“U.S. Secretary of State Antony Blinken will travel to Beijing later this week as the most senior U.S. official to visit China in five years amid escalating tensions between the world’s two biggest economies.”
Blinken Plans to Meet With Top Chinese Officials in Beijing / NYT (paywall)
“Secretary of State Antony J. Blinken, who leaves Friday, could meet with Xí Jìnpíng 习近平, China’s leader, during a visit he had postponed because of a Chinese spy balloon.”

Opinion: Can two great powers cooperate to build a safer world? It has happened before. — Graham Allison argues: “Just because fundamental and irresolvable differences in values and interests compel the United States and China to be formidable rivals does not mean a hot war is a viable option.”
Opinion: Zombie engagement with Beijing / WSJ (paywall)

Rep. Mike Gallagher writes: “The Biden administration seems determined to revive an approach to China that has failed for 30 years.”

Pacific islands and Taiwan
Palau leader calls on U.S. for help over Chinese ships in its waters / Nikkei (paywall)

“Pacific island nation’s president says he won’t cut Taiwan ties despite tensions.”

Israel and Palestine
Chinese premier meets with Palestinian president in effort to increase Middle East presence / AP
“Chinese Premier Lǐ Qiáng 李强 met with visiting Palestinian President Mahmoud Abbas on Thursday in a drive by Beijing to elevate relations and increase its overall presence in the Middle East.”
China steps up diplomacy with offer to mediate in Israeli-Palestinian conflict / FT (paywall)
“China has offered to mediate between rival Palestinian factions and facilitate peace talks with Israel, in the latest sign of Beijing’s intent to expand its diplomatic role in the Middle East.”
What would China do to solve Israeli-Palestinian conflict and how do its ties with the two sides compare? / SCMP (paywall)
“Palestinian Authority president Mahmoud Abbas on Tuesday kicked off a four-day visit to Beijing, where he and Chinese President Xí Jìnpíng 习近平 jointly announced they would establish a ‘strategic partnership’ between Palestine and China.”

Canada
Canada suspends work with Chinese-founded development bank while it investigates complaints / AP
“Canada’s finance minister says it is suspending activity with a Chinese-founded development bank while it investigates complaints by a Canadian who resigned from the lender that it is dominated by ‘Communist Party hacks’ and his country shouldn’t be a member.”
‘Outright lies’: China’s Ottawa embassy dismisses explosive AIIB claims / SCMP (paywall)
Canada freezes activity at ‘China’s World Bank’ after infiltration claims / FT (paywall)
China embassy in Canada blasts claims AIIB run by Communist Party / Nikkei Asia (paywall)

Saudi Arabia
Saudi Arabia wants more Chinese investment / Caixin (paywall)
“Saudi Arabia hopes to draw more investment from Chinese companies not only in crude oil and chemicals but across a slew of other industries — from mining, automobiles and property to digital infrastructure, renewables and cloud computing — as the kingdom seeks to diversify its economy.”

Thailand
Thailand weighs accepting Chinese engine in submarine deal / Nikkei Asia (paywall)
“Thailand is considering a Chinese engine for a submarine it plans to purchase from China now that Germany has refused to supply an engine.”

Russia and the yuan
Russia pays Sakhalin dividends in Chinese yuan / Nikkei Asia (paywall)
“Russia has paid dividends from the Sakhalin 1 and 2 oil development projects in Chinese yuan, Nikkei has learned, a move necessitated by Western sanctions on Moscow that have kept financial institutions from accepting dollars related to Russian business.”

Corruption
A new super-regulator takes aim at rampant corruption in Chinese finance / Economist (paywall)
“The crackdown has shown no sign of ebbing as the Communist Party gains a much firmer grip over enforcement.”

SOCIETY AND CULTURE:

Obituaries for artist Huang Yongyu
Chinese artist Huang Yongyu, lauded as ‘national treasure’ and known for his playful ink paintings of people, plants, animals and birds, dies aged 98 / SCMP (paywall)
“Huáng Yǒngyù 黄泳玉, whose playful ink paintings of animals made him one of China’s best-known artists, died on June 13, aged 98, after an illness.”
Yongyu, ave atque vale / China Heritage
Geremie R. Barmé, Huang’s friend, reflects on his life, talents, and how he suffered for his art.

Local governments face controversy following clamp down on traditions
Villagers detained for unauthorized dragon boat racing, sparks debate / Sixth Tone
“Local governments have clamped down on privately organized dragon boat racing over safety concerns, but some experts are calling for more space to be given to the celebration of folk traditions.”

Live music
China’s livehouse music scene struggles to ride post-pandemic wave / Sixth Tone
“Demand for live shows has exploded following the loosening of pandemic restrictions, but fierce competition from music festivals and increased costs mean that smaller acts are finding it difficult to afford livehouse shows.”

Elderly care
China’s solution for a growing senior care crisis: millions of robots / Sixth Tone
“As China’s population rapidly ages, the country faces a critical shortage of health and social care workers. Authorities hope an army of AI-enabled robots can plug the gap.”