This is the state of generative AI in China

• Chinese companies face a unique set of challenges in developing, training, and deploying generative AI applications, as the U.S. attempts to slow China’s domestic AI capability over concerns about the technology’s role in its military modernization.
• Domestically, Chinese companies are confronted with rapidly evolving rules and standards introduced by the government.

But even as the domestic regulatory train rolls forward, China’s AI industry leaders are not waiting for the government to take more measures or implement existing guidelines.

• Chinese technology companies are acutely aware of the importance that Beijing places on AI innovation and the role that domestic AI companies play in the broader tech ecosystem. They also play a role in shaping domestic regulation.
• On a technical level, Chinese companies are closely tracking developments in the United States, particularly in Silicon Valley.

Read all about the state of China’s generative AI industry as seen by tech policy veterans Paul Triolo and Anarkalee Perera who have spent the past few months in deep conversation with Chinese tech industry leaders.

Paul Triolo

Today Chinese state media 🖤 U.S.A.: Beijing is sending a very clear message with top stories on the People’s Daily front page and Xinhua News Agency’s website about Xí Jìnpíng 习近平 replying to a letter from Chairman of the Sino-American Aviation Heritage Foundation, an American NGO that commemorates the Flying Tigers, American military pilots who helped oppose the Japanese invasion of China from 1941 to 1942.

Whenever Chinese officials mention the Flying Tigers, it’s a sure sign they want to talk to their American counterparts. This looks like a signal that Xi will after all attend the Asia-Pacific Economic Cooperation (APEC) meetings in the U.S. from November 15 to 17 this year.

China made it easier for foreigners to apply for visas by reducing the amount of information needed to fill out the application forms, China’s Ministry of Foreign Affairs announced today. The new online application forms, which went live today, shorten the list of where a person has traveled from five years to one year, and require only the highest level of education that an applicant reached instead of a full history.

The changes are part of a broader effort to lure tourists back into the country. “Applicants will spend much less time filling in the forms and expect a more streamlined visa application process,” the foreign ministry said in a statement. The ministry will always “facilitate people-to-people exchanges between China and foreign countries to promote China’s high-quality development and opening up.”

Two tornadoes have left at least 10 people dead in the eastern province of Jiangsu. The first one in the city of Suqian killed five people and left four others severely injured, Chinese state media reported today. A second tornado in the evening left five people dead in Yancheng city, about 190 kilometers (120 miles) southeast of Suqian.

China installed two ground stations on reefs in the disputed South China Sea as part of its BeiDou satellite navigation system, Chinese state television CCTV reported. The stations, which began operating on September 15, have been installed at lighthouses situated on North Reef and Bombay Reef in the Paracel Islands — territories that are also claimed by Vietnam and Taiwan.

They are located strategically near an international sea route through the central area of the South China Sea, in what CCTV described as an effort to “serve as strong support” to help monitor ships and to assist ecological protection and ship navigation in one of the busiest waterways in the world.

The U.S. has found no evidence that Huawei can produce smartphones with advanced semiconductors at scale, U.S. Commerce Secretary Gina Raimondo said yesterday. Speculation has swirled over Huawei’s ability to make its own advanced chips, after the Chinese tech giant rolled out its new Mate 60 Pro smartphone amid the sanctions the U.S. imposed since 2019 to curb its access to high-end chipmaking technologies.

The Mate 60 Pro’s main chip, the Kirin 9000S, uses the 7-nanometer (nm) process designed by Huawei’s chip division HiSilicon and produced by China’s chipmaking giant SMIC. That means that Huawei has joined the ranks of an elite group of Big Tech companies, such as the U.S.’s Apple and Taiwan’s TSMC, that are able to make advanced semiconductors.

Meanwhile, China accused the U.S. of infiltrating Huawei servers back in 2009 and continuously monitoring them, China’s Ministry of State Security said in a WeChat post yesterday.

No germanium and gallium products left China in August, according to customs data, after the country in July imposed export curbs on the key metals used to make semiconductors and other electronics.

In this personal essay, Li Yijuan, a recent graduate from a top university in China, reflects on her job-searching journey and generational differences in work attitudes, arguing that the disconnected environment is caused by “mutual disloyalty.”

Li Yijuan

Nathan Wei, author of the Queer China column, recently spoke to Dr. Helen Hok-Sze Leung, a professor at the Department of Gender, Sexuality, and Women’s Studies at Simon Fraser University in Canada, who has extensively researched queer cinema and Hong Kong culture.

Click here to read the interview, which covers the history of queer cinema in Hong Kong before and after the 1997 handover, the close entanglement between queer expressions and popular culture, the impact of the National Security Law on the local film industry, and what it means to be “queer” during a time of uncertainty.

Nathan Wei

• At 10:22 pm, on September 18, 1931, World War II began. That’s an oversimplification, needless to say. Any event as immense and complex as the Second World War does not start at a single moment. But September 18, 1931 was the date that explosives detonated along the route of the South Manchurian Railway, and as James Carter writes in This Week in China’s History, the events of that Friday night are underwhelming, almost ridiculous, in the context of what they sparked.

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

BUSINESS AND TECHNOLOGY:

Economic gloom or boom
Chinese officials voice faith in economy and keep interest rates steady as forecasts darken / AP
“Leading Chinese planners voiced confidence on Wednesday in the outlook for the world’s second-largest economy, holding key interest rates steady amid signs of improvement in some areas such as services.”
China should step up policy support for economy- ex-PBOC head / Reuters
“China should step up policy support for the economy while promoting reforms to help achieve the annual growth target of around 5%, Yì Gāng 易纲, former governor of the People’s Bank of China (PBOC), said in remarks published on Wednesday.”
China keeps benchmark rates unchanged as economy finds footing / Reuters
“China kept benchmark lending rates unchanged at a monthly fixing on Wednesday, in line with expectations, as fresh signs of economic stabilization and a weakening yuan reduced the need for immediate monetary easing.”
Opinion: Is China heading for a Japan-like period of economic stagnation? / Caixin (paywall)
Vincent Chan writes: “Since last year, Chinese people have been socking more of their savings away in banks, but their spending has remained weak. That, along with a sharp decline in property sales, has investors questioning whether China has entered a prolonged period of economic stagnation similar to what Japan suffered in the 1990s.”
China may dodge deflation, after all / WSJ (paywall)
“But it will probably be a near miss, and economic data still hints at a bottom rather than a strong rebound.”

Local debt
China’s trillion-dollar local government ‘hidden debt’ dilemma / Caixin (paywall)
“China’s financial system remains plagued by trillions of dollars in local governments’ hidden debt, as they have long turned to off-the-books borrowing to plug funding shortfalls, which have grown significantly due to the pandemic and property crisis.”

Foreign companies in China
Foreign firms in China say vague rules and tensions with Washington hurting business, surveys show / AP
“Foreign companies operating in China say tensions with Washington over technology, trade and other issues and uncertainty over Chinese policies are damaging the business environment and causing some to reassess their plans for investing in the giant market.”

Semiconductor production
China exported no germanium, gallium in Aug after export curbs / Reuters
“China’s exports of germanium and gallium products in August plunged, customs data showed on Wednesday, after Beijing implemented new export controls on the two chipmaking metals.”
Huawei unit ships Chinese-made surveillance chips in fresh comeback sign / Reuters
“A Huawei Technologies unit is shipping new Chinese-made chips for surveillance cameras in a fresh sign the Chinese tech giant is finding ways around four years of U.S. export controls, two sources briefed on the unit’s efforts said.”

Foreign ports used as intelligence-gathering outposts
How China uses shipping for surveillance and control / Foreign Policy (paywall)
“While maritime embargoes during wartime have been a staple of conflicts since the days of the Spanish Armada, today’s warfare won’t require a flotilla to keep essential goods from reaching their destination. Instead, adversaries can paralyze shipping by weaponizing information.”

Electric vehicles
Opinion: BYD: China’s cheap EVs charge up Japanese market / FT (paywall)
“In Japan, loyalty to local automakers keeps sales ticking up. Over 80 per cent of the market is dominated by domestic companies. But that stronghold is about to be undone by the electric revolution.”
China’s BYD takes on Toyota, Nissan in Japan’s small-car market / Nikkei Asia (paywall)
BYD launches hatchback in Japan to crack tricky EV market / Caixin (paywall)

Regulations for power post markets
China’s new electricity spot market rules lay groundwork for unified standard / Caixin (paywall)
“China has published its first national rules for electricity spot markets as the country continues its drive toward the use of renewable energy and building a national power market.”

More flights between mainland and Hong Kong
Hong Kong’s Cathay Pacific to add flights to mainland China as airline carries more than 11 million passengers to hit 46% of pre-pandemic levels / SCMP (paywall)
“Hong Kong’s Cathay Pacific Airways said it would add extra flights to mainland China as it announced on Wednesday that it had carried more than 11 million passengers in the first eight months of the year and reached 46 per cent of pre-pandemic levels.”

Huawei
Huawei heir-apparent Meng Wanzhou sets AI as the Chinese giant’s business focus in the next decade despite US sanctions / SCMP (paywall)
“Mèng Wǎnzhōu 孟晚舟, rotating chairwoman of U.S.-sanctioned Huawei Technologies, said the telecoms giant would embrace a new ‘all intelligence’ strategy to transform itself into a key provider of computing power to support China’s artificial intelligence (AI) development.”

Huawei makes processor breakthrough in flagship smartphone / FT (paywall)
“Huawei is emulating Apple in developing the processors that power its latest smartphone, a breakthrough that will help the Chinese company to reduce its reliance on foreign technology as it confronts US sanctions.”

SCIENCE, HEALTH, AND ENVIRONMENT:

COVID-19 and lab leak theory
Opinion: The CIA politicizes intelligence on China and COVID / WSJ (paywall)
“A whistleblower says that analysts who favored the lab-leak theory were paid to change positions.”

Extreme weather
China braces for more harsh weather after tornado kills 10 / Reuters
“Chinese weather officials stepped up warnings about heavy rain and strong winds in several regions, state media said on Wednesday, a day after a violent tornado wreaked havoc in the eastern province of Jiangsu, killing 10 people.”
Tornadoes kill 10 in coastal Chinese province / Caixin (paywall)
“Ten people have died after two tornadoes ripped through East China’s Jiangsu province, state media reported Wednesday.”

Star systems
Inspired by writer Liu Cixin, Chinese scientists spot signals from real-world ‘three-body’ star system / SCMP (paywall)
“Scientists in China have revealed unprecedented details of a young triple-star system, shedding light on how such complex and chaotic – yet common – systems behave in the universe.”

Shenzhen wants Hong Kong tourists
Shenzhen looks to attract more Hong Kong, Macao visitors — and their cash / Caixin (paywall)
“Shenzhen has launched a bid to attract more residents from neighboring Hong Kong and Macao by making it easier for them to venture north and spend their hard-earned cash on not just tourism and leisure, but a broader range of sectors including health care and even car maintenance.”

POLITICS AND FOREIGN AFFAIRS:

China’s plan to assimilate Tibetans

Opinion: The one million Tibetan children in China’s boarding schools / NYT (paywall)
“My young relatives, who were 4 and 5 years old at the time, had just enrolled in a boarding preschool that the Chinese government had established in my hometown, Kanlho, a semi nomadic region in the northeast corner of the Tibetan plateau. Their new school was one of many — I have personally tracked about 160 in three Tibetan prefectures alone — and part of Beijing’s growing network of preschools in which Tibetan children are separated from their families and communities and assimilated into Chinese culture.”

Xi’s common prosperity
In Xi’s China, ‘common prosperity’ now means lowering expectations / World Politics Review
“China’s economic troubles have been all over the news these past few months, as its long-awaited post-pandemic recovery hasn’t materialized.”

Public security
China’s police chief calls for global cooperation on public security at forum / SCMP (paywall)
“China’s top police chief has called on world powers to strengthen cooperation on public security, as Beijing seeks to expand its influence in global governance.”

BRI
Does the BRI increase China’s influence? / Foreign Policy (paywall)
“Beijing’s extensive infrastructure projects don’t seem to be translating into political clout.”

Hong Kong
China says Britain’s plans to disrupt Hong Kong ‘doomed to fail’ / Reuters
“China’s foreign ministry in Hong Kong slammed a six month report on the financial hub by Britain, saying it ignored ‘good’ societal conditions, a more stable business environment and instead supported ‘anti China’ chaos.”

U.S.-China competition and tensions
Blinken meets Chinese VP as US-China contacts increase ahead of possible summit / AP
“Secretary of State Antony Blinken met Monday with China’s vice president on the sidelines of the UN General Assembly as the Biden administration and Beijing step up high-level contacts ahead of what could be a leader-level summit this fall.”
China says opposes discriminatory U.S. practices against firms / Reuters
“China opposes discriminatory practices by the United States against Chinese companies, the foreign ministry said on Wednesday, after the U.S. commerce department said an advanced phone chip made by Huawei may violate trade restrictions.”

Huawei hacked

U.S. spy bureau NSA ‘hacked Huawei HQ’: China confirms Snowden leak / SCMP (paywall)
“Nearly a decade after documents leaked by Edward Snowden revealed that the US National Security Agency (NSA) hacked the servers of Chinese telecoms giant Huawei, Beijing has officially acknowledged the attack.”
China accuses U.S. of hacking Huawei servers since 2009 / Nikkei Asia (paywall)
“China has accused the U.S. of continuously hacking Huawei’s servers and conducting cyberattacks to steal other critical data since 2009, the latest salvo between Beijing and Washington as tensions further escalate.”

Japan
Japan’s China-bound exports dropped 11% in August / Nikkei Asia (paywall)
“Japan’s exports to China dropped 11% in August from a year earlier, marking the ninth straight month of decline, according to preliminary data released on Wednesday by Japan’s Ministry of Finance, highlighting weak demand from one of its key trade partners.”

Germany
German investment in China eases in H1 after record high / Reuters
“German direct investment in China eased in the first half of the year albeit remaining close to its record high in 2022 and increasing as a share of the country’s overall investment abroad, according to official data analyzed by the IW institute.”

Russia
China ready to continue business cooperation with Russia, top diplomat tells Putin / Reuters
“China is ready to continue business cooperation with Russia, Chinese Foreign Minister Wáng Yì 王毅 told Russian President Vladimir Putin during their meeting in Russia.”
EU to ask China at UN to push Russia towards ‘just peace’ in Ukraine / Reuters
“European Council President Charles Michel will ask China directly at the United Nations Security Council to do more to push Russia towards a ‘just peace’ in Ukraine, according to his draft speech seen by Reuters at the UNGA.”
China and Russia strengthen cooperation as G7 pushes Beijing to rein in Moscow on Ukraine / SCMP (paywall)
“Senior Chinese and Russian officials called for close policy coordination on bilateral and international affairs during security talks as foreign ministers of the Group of Seven (G7) nations pressed Beijing to help rein in Moscow in Ukraine.”
Isolated by West over Ukraine war, China has no choice but to be closer to Russia, says Chinese expert / SCMP (paywall)
“Western isolation over the Ukraine war has left China with no option but to strengthen its strategic ties with Russia, a leading Chinese expert on Sino-Russian relations said in an article that has been taken down online.”

Syria
Syrian leader expected to seek China’s support in rebuilding economy in meeting with Xi Jinping, analysts say / SCMP (paywall)
“Syrian President Bashar al-Assad will begin a visit to China on Thursday, and experts said his meeting with Chinese counterpart Xi Jinping would focus on the Middle Eastern country’s economic reconstruction.”

SOCIETY AND CULTURE:

Asian Games
Asian Games 2023: from rookies to veterans, 10 Hong Kong athletes worth watching as they chase success in Hangzhou / SCMP (paywall)
“Hong Kong is sending its largest contingent ever to the Asian Games, with Olympic champions, world-record holders and promising youngsters among their number.”
Huge demand for Esports tickets at Hangzhou Asian Games / Sixth Tone
“A lottery system was used to allocate tickets for esports, which is making its debut as a medaled event at the Asian Games in Hangzhou.”

Moutai’s boozy new venture
Moutai’s liquor-filled chocolates spark buying frenzy in China / Sixth Tone
“With prices surging on second-hand trading platforms, the company has said it is boosting production and advised consumers to only buy chocolates from official stores.”