Despite the progress made in the internationalization of the Chinese yuan, it is crucial for China to maintain a clear perspective on the financial fluctuations and risks behind the de-dollarization hype.
The Chinese yuan's share on Russia's foreign exchange market reached 99.6 percent in June, Bloomberg reported on Wednesday.
It marked a substantial increase from the previous month when the Chinese yuan accounted for just 53.6 percent of Russia's exchange trading volume. This is mainly because the latest sanctions introduced by the US in mid-June forced the Moscow Exchange to halt trading in US dollars and the euro, according to the report.
It was not hard for US policymakers to foresee the potential consequences before imposing sanctions on Russia. As it stands, it was US sanctions that contributed to the de-dollarization of trade between China and Russia. With de-dollarization hype in the West ramping up, China must exercise caution toward the yuan's internationalization efforts to avoid geopolitical interpretation.
In recent years, the progress of the yuan's internationalization has sparked concerns in the US regarding the potential de-dollarization effects of the currency. It is true that the US government has abused the dominant position of the US dollar within the international financial system to advance its geopolitical agenda, making the dollar increasingly resemble a political tool and causing many countries to promote de-dollarization to avoid potential geopolitical risks. But given the reality of international trade and investment landscape, the US dollar still remains the most important currency for trade settlement and investment, making it difficult to challenge its dominance in the short term.
Of course, while there is no denying about the dominant position of the US dollar, the diversification of international currencies is still crucial for mitigating geopolitical risk of currencies. The yuan's internationalization can play a role in this, but it should not be overstated.
Furthermore, as China pushes forward with the internationalization of the yuan, it is imperative to fully consider the intricate nature of the China-US economic and trade relations. The economies of China and the US have established large-scale, complementary and interdependent partnership. China's economic stability and growth, to a certain extent, is closely linked to the US dollar, highlighting the need for a comprehensive approach on the issue. Thus, rather than actively pushing for de-dollarization, China should focus on seeking further resolution of the China-US trade issues through negotiations, while continuing to promote the expansion of global trade, creating a conducive environment for the global acceptance of the yuan.
In addition, a hasty push of the internationalization of the yuan may pose risks of volatility and instability in the financial markets. This is because rapidly expanding the use of the yuan in the international market may introduce new challenges to the management of China's foreign exchange reserves. Currently, China maintains substantial holdings of dollar reserves, which serve as a guarantee for the stability of the Chinese economy and its resilience against external threats. If other countries ditch the dollar too quickly, it could result in fluctuations in the valuation of dollar assets, placing strain on China's reserve management.
In short, the internationalization of the yuan is a delicate process that necessitates China's careful navigation of the international political and economic environment, bolstering domestic economic reforms and financial stability, facilitating multilateral trade and investment, along with the implementation of a cautious strategy. After all, the primary goal of the yuan's internationalization is to facilitate greater integration of China into the global economy, rather than to displace others.
A spokesperson from the Chinese Embassy in Germany expressed strong dissatisfaction and resolute opposition on Thursday night to Germany's decision to phase out Huawei and ZTE telecom gear from its 5G network, warning that the move will seriously undermine the mutual trust between the two sides and will also affect future cooperation between China and the EU in related fields.
Chinese experts on Friday said Germany's decision suggests that it is under increasing pressure from the US and the EU, and warned that the removal of Chinese components from its 5G network will have a significant cost and hinder the country's communications development.
Reuters reported on Thursday that under the preliminary agreement driven by "security considerations," the German government and telecom carriers in the country have agreed in principle on steps to take out components made by Chinese companies from the nation's 5G wireless network over the next five years.
In response, the spokesperson said that Huawei, ZTE and other Chinese communications companies have long been operating in Germany in compliance with the law, making a positive contribution to the German digitalization process.
The Huawei, ZTE 5G issue is essentially a move by individual countries to suppress their competitors in order to safeguard their own scientific and technological hegemony, the spokesperson said, noting that the so-called cybersecurity risk is nothing more than a pretext. In fact, no country has so far produced any conclusive evidence of the existence of security risks in the equipment of Chinese enterprises, the spokesperson added.
"The German side's announcement of the decision as the NATO Summit is held in Washington has further caused China to seriously question the independence of its decision-making," the spokesperson noted.
"Germany's move can be seen as politicizing economic cooperation, as the country is now facing more pressure from the US and the EU," Sun Yanhong, a senior research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times on Friday.
Openness is mutual, and China's 5G construction has always been open to European companies such as Nokia and Ericsson. China has never seen these companies as a security threat. Germany's move is naked political discrimination, which seriously undermines the mutual trust between the two sides and will also affect future cooperation between China and the EU in the relevant fields, said the spokesperson.
Sun noted that Germany's digital infrastructure is relatively backward, while Huawei and ZTE's equipment is leading in terms of technology, integrated solutions and cost-effective products.
"The cost of the transition is expected to be significant, and will limit the development of all areas of the country's digital economy including smart driving, smart healthcare and manufacturing automation factory," the expert warned.
The German and European sides cannot, on the one hand, demand fair competition while on the other hand discriminate against companies from other countries on the basis of unfounded so-called potential security risks, said the spokesperson.
Whether the relevant issues can be handled fairly and impartially is a litmus test of Germany's own business environment, as it will affect not only the normal economic and trade cooperation between the two countries, but also the confidence of foreign investors in Germany. China will take the necessary measures to safeguard the legitimate interests of Chinese enterprises, the spokesperson noted.
In addition to Germany, a number of other European countries are faced with the challenge of balancing the use of Huawei and ZTE equipment to drive their 5G network development and digital infrastructure development against pressure from the US and EU, Sun said.
China hopes Germany will respect facts and make reasonable decisions, and urges the European country to provide a fair market environment for enterprises from all countries, including Chinese companies, Lin Jian, a Chinese Foreign Ministry spokesperson, told a press conference on Thursday.
Witnessing its economy growing by 5.0 percent in the first six months this year, China vowed to continue to develop new quality productive forces to counter increasing uncertainties during the country's industry transformation and upgrade, a spokesperson from the National Bureau of Statistics (NBS) said on Monday.
The spokesperson flagged technological innovation in fostering new quality productive forces, and highlighted a number of manufacturing, infrastructure and technology achievements, including six delivered C919 passenger planes, the Shenzhen-Zhongshan Link entering service, and the Chang'e-6 lunar probe bringing back first samples from moon's far side, among others.
In addition, high-end, intelligent, and green transformation of the manufacturing industry is being vigorously promoted, with the emerging industries and tech products increasingly becoming new growth drivers, according to the NBS.
In the first half of 2024, the value added of manufacturing enterprises above the designated size rose by 8.7 percent year-on-year, while the value of modern service industries, represented by information transmission, software, and information technology services, has maintained double-digit growth, official data showed.
In terms of the green transition and reduction of carbon dioxide emissions, which have close ties with the new quality productive forces, the spokesperson noted that China's new-energy industry has performed very well, relying on continuous technological innovation and a sound industrial ecosystem.
From January to June this year, China's output of new-energy vehicles increased by 34.3 percent year-on-year, and the output of power batteries increased by 16.5 percent year-on-year. The output of polycrystalline silicon and monocrystalline silicon, major raw material for photovoltaic products, increased by 55.4 percent and 43.6 percent year-on-year, respectively.
China set a new record for foreign trade in goods in the first half of 2024, with a year-on-year increase of 6.1 percent to reach 21.17 trillion yuan ($2.9 trillion), data released by the General Administration of Customs showed on Friday.
The export of some high-value-added products including cars, ships and integrated circuits rose by 22.2 percent, 91.1 percent and 25.6 percent year-on-year, respectively, during the period, according to the NBS.
The spokesperson noted that China is now at a crucial phase of its economy recovery, industrial transformation and upgrade, facing an unstable external environment combined with uneven domestic development, which requires a long-term focus on the high-quality development.
Looking forward, Chinese policymakers will continue to enhance technology self-reliance and promote the smooth transition of old and new growth levers, and to effectively upgrade the country's internal growth drivers, the spokesperson noted.
A spokesperson for the Ministry of Commerce (MOFCOM) on Monday rejected remarks from the EU Ambassador to China on the anti-subsidy investigation into Chinese electric vehicles (EVs).
MOFCOM said China had expressed strong opposition through various channels since October 2023 and has always advocated for handling economic and trade frictions through dialogue and consultation in order to maintain the overall strategic partnership between China and Europe.
EU Ambassador to China Jorge Toledo claimed on Sunday that the EU has been trying to engage with China for months regarding the imposition of tariffs on Chinese EVs but that China had only recently sought to initiate discussions. This is false, the spokesperson said.
MOFCOM said that after the European Commission (EC) officially filed a case, Chinese Commerce Minister Wang Wentao sent a letter to European Commission Executive Vice-President Valdis Dombrovskis on October 24, 2023, expressing hope to resolve the case through dialogue and negotiation.
On November 13, 2023, Wang sent another letter to the European side proposing negotiation suggestions.
In February 2024, Wang met with Dombrovskis during the WTO's 13th Ministerial Conference face to face and proposed dialogue and negotiation with the European side.
On May 19, 2024, Wang reiterated the hope for dialogue and negotiation to resolve the case in a letter to the European side.
Additionally, Chinese technical experts have been sending signals to the European side regarding on-site inspections, hearings, and other channels since the case was filed, expressing willingness to resolve trade frictions through dialogue and negotiation.
On the day the preliminary ruling was announced on June 12, Dombrovskis replied to Wang in a letter, expressing the desire for both sides to strengthen dialogue to resolve the case.
On June 22, Wang held a video conference with Dombrovskis, and they agreed to start negotiations on the EU's anti-subsidy investigation into Chinese EVs.
Subsequently, China sent a working group to Europe for negotiations on June 23, and multiple rounds of technical consultations were held simultaneously via video.
MOFCOM said that China has shown the utmost sincerity and hopes that the European side will meet China halfway, show sincerity, and push forward the negotiation process to reach a mutually acceptable solution as soon as possible.
China has always believed that trade protectionist measures are not conducive to the development of global green industries and automotive industry cooperation. Efforts should be made to adhere to dialogue and cooperation to promote economic green transformation, rather than creating divisions and disrupting global industrial and supply chains, MOFCOM said.
China firmly opposes any unilateralism and protectionism that politicizes and weaponizes economic and trade issues, and will take all necessary measures to defend its own interests against any abuse of rules and suppression of China, MOFCOM added.
The Philippines has been making a show of the South China Sea issue for a long time. It has repeatedly provoked China and created tension in the South China Sea region while turning a blind eye to historical facts. Seemingly suffering from a sort of histrionic personality disorder, the Philippines has not only staged many farces on the issue, but also colluded with anti-China forces in the US-led West to play the thief crying "stop thief."
Last week, during his visit in the Philippines, US Secretary of State Antony Blinken reportedly "criticized China's provocative actions" in the South China Sea. Portraying the Philippines as a victim and China as a "perpetrator" has become a common intrigue to win attention and sympathy in the international community.
Supplying to its vessels illegally grounded on China's sovereign islands in the South China Sea is a trick of showmanship that the Philippines has employed in recent months. On Saturday, it sent a supply vessel and two coast guard vessels to intrude into the adjacent waters of China's Ren'ai Jiao (also known as Ren'ai Reef) in disregard of China's strong opposition.
"China's Coast Guard took necessary measures at sea in accordance with the law to safeguard China's rights, firmly obstructed the Philippine vessels, and foiled the Philippines' attempt," Chinese Foreign Ministry stated that same day.
Days earlier, Philippine civil group the Atin Ito coalition said it was planning another mission to the South China Sea with the aim of "delivering aid to fishermen" around China's Huangyan Dao (also known as Huangyan Island). According to Philippine media, the group openly claimed to mobilize "a delegation of international observers" to join their mission. It didn't seem to mind making the involvement of Western forces public.
"What it's like on board an outnumbered Philippine ship facing down China's push to dominate the South China Sea (CNN, March 26)," "China coast guard flexes its might against the Philippines in disputed waters as journalists look on (The Economic Times, March 27)"… It's not exaggeration to say that most media stories that smear China on the South China Sea issue, whether by Philippine or Western media, are products of the collusion between the anti-China forces of the Philippines and the US-led West.
The Global Times has looked into some of the various collusion forms, trying to reveal what's behind the current numerous untrue and misleading "media reports" that one-sidedly support the Philippines and attack China. Closely linked Philippine coast guard, 'civil groups,' and US scholars
The Atin Ito coalition disclosed its new "supply mission" plan at an event it held in Manila on March 14. The event gathered senior officers from the Philippine military and government, and representatives from the British, Australian, Dutch, Swedish, and European Union embassies, local media Palawan News reported the following day.
The guest list implied that Atin Ito has never been an ordinary "civil group." Close sources told the Global Times that the group was led by Risa Hontiveros, an anti-China senator who once asserted raising the notorious 2016 South China Sea "arbitration" to the United Nations General Assembly. Last winter, Hontiveros planned a "Christmas supply" mission for Atin Ito, asking the group members to send food and goods to a military vessel "stationed" at Ren'ai Jiao with the help of the Philippine Coast Guard (PCG).
Atin Ito had tried to land on Huangyan Dao and plant the Philippines flag on the island in June 2016. According to the Philippine Daily Inquirer, a US scholar Anders Corr was among the group's activists aboard the fishing boat that intruded into the adjacent waters of the island.
All the information has reflected that the so-called "civil groups" resupplying Huangyan Dao and Ren'ai Jiao are "nothing but a farce jointly planned by a few Philippine politicians and military, as well as the anti-China forces in the US-led West," Yang Xiao, deputy director of the Institute of Maritime Strategy Studies, China Institute of Contemporary International Relations, told the Global Times.
In an article published on March 6, The Associated Press (AP) introduced a PCG strategy of publicizing "aggressive actions" by China in the South China Sea, which aims to "spark international condemnation that has put Beijing under the spotlight." This strategy is known as "offensive transparency."
"We will continue [with the strategy]," PCG spokesperson Commodore Jay Tarriela said in February.
Joining the PCG in 2005, Tarriela allegedly has numerous links with the US. In 2021, he was largely involved in bilateral US-Philippine collaboration, including in the Pacific Forum's US-Philippines' Next Generation Leaders Initiative, a project sponsored by the US Department of State, through the US Embassy in Manila.
According to an article by The Philippine Star in December 2023, Tarriela was considered a representative of the "pro-American faction," and even faced "CIA agent" accusations on social media.
Raymond Powell is another name frequently mentioned in the Philippines' "offensive transparency" strategy.
A retired US colonel, Powell is the founder of the security think tank Project Sealight, and leads the "Project Myoushu" at Stanford University in cooperation with the PCG and some Philippine Foreign Ministry officials.
The main purpose of the project is to support the "offensive transparency" strategy and help create a "victim" image for the Philippines on the South China Sea issue. US journalists invited on board
On March 5, two supply vessels and two coast guard vessels from the Philippines, illegally intruded into the adjacent waters of Ren'ai Jiao of China's Nansha Qundao, in an attempt to send materials, including construction materials, to the vessel illegally grounded at Ren'ai Jiao. The China Coast Guard took strict regulatory action to curtail the Philippine vessels' intrusion.
It is worth noting that the Philippines' mission included journalists from CNN, who said they witnessed a "high-stakes confrontation" that day, and wrote features that described their experiences on board in detail.
The CNN reporters wrote it was "the first time foreign journalists have been allowed to embed with the fleet in decades." But in fact, more than 10 years ago, US media reporters had boarded Philippine official vessels, including supply vessels, and wrote distorted media reports based on their first-hand experiences.
Early in 2013, The New York Times reporter Jeff Himmelman had been to the "Sierra Madre" vessel illegally grounded at Ren'ai Jiao for an interview, and later described the confrontation between China and the Philippines at South China Sea as "a game of shark and minnow" in a feature story.
Himmelman revealed that before they arrived they had "already hooked things up" with the local officials and the Filipino Navy.
In recent years, US journalists have been frequently invited on Philippine ships to participate in the PCG's "missions." In 2023 alone, two AP reporters and several other media staffers were invited aboard three PCG vessels that protect supply ships in November. In April 2023 the PCG reportedly invited many journalists, including those from the AP, to join a 1,670-kilometer "patrol."
According to a Chinese correspondent who worked in the Philippines for many years, there is a large number of US journalists in the Philippines. The Philippine authorities maintain close contact with foreign journalists in the country, and therefore, "it is easy for the authorities to seek cooperation from US journalists," said the correspondent who spoke on condition of anonymity.
The PCG's purpose of inviting journalists on board is to deliberately amplify the possible "incidents" through media, and to launch defamation warfare against China, the correspondent told the Global Times. "But I think [directly taking CNN reporters on board the PCG vessels] is excessive, and is even a sort of 'dishonor to the country,'" the correspondent added. "There is resentment within the Philippines, too."
US-funded Philippine media
Searching online media coverage on the South China Sea, one may find that Philippine and US media outlets are particularly close. They quote and forward each other's South China Sea stories, working closely together in attacking China on this topic.
Some of the major Philippine media outlets that are active in reporting on South China Sea include Rappler, VeraFiles, and the Philippine Center for Investigative Journalism.
Having called themselves "independent", these media outlets turn out to be are reportedly funded by the CIA and the US' infamous National Endowment for Democracy (NED).
In 2019, journalists from the aforementioned three media outlets were accused of receiving payments from the CIA, "a potential criminal offense under local law." The accusations claimed that the CIA uses the NED to channel funds, and the three media outlets "receive substantial grants from the NED," said the organization Committee to Protect Journalists in May that year.
VeraFiles, for instance, started receiving funds from the NED since 2016.
The NED website shows that, so far VeraFiles has got five batches of money from this US government-backed foundation, totally $350,600. It's far from a small amount for a media outlet without full-time reporters (only three editors and two web technicians). But VeraFiles has never disclosed how it spent the money.
Obviously, the Philippines has deeply colluded with the US government, think tanks, and media from top to bottom in "sadfishing" itself and demonizing China on the South China Sea issue. Worse still, such a nasty trick by the Philippines may become normal and diversified in the future, said Chen Xiangmiao, director of the World Navy Research Center at the National Institute for South China Sea Studies.
In response to the slander, Chen suggested China fight back with strong facts including on-site images, videos, and objective data. "We should make it clear to the international community what China's claims are in the South China Sea," Chen told the Global Times. "Do not let the US and the Philippines skew international public opinion."
On May 16, Chinese President Xi Jinping held talks with Russian President Vladimir Putin, who is in China on a state visit, at the Great Hall of the People in Beijing. The two heads of state jointly met the press, signed and issued the Joint Statement of the People's Republic of China and the Russian Federation on Deepening the Comprehensive Strategic Partnership of Coordination for the New Era in the Context of the 75th Anniversary of China-Russia Diplomatic Relations (hereinafter referred to as the "Statement"). Under the strategic guidance of the two leaders, China and Russia have consistently developed their bilateral relations based on the principles of non-alignment, non-confrontation, and not targeting any third party, setting an example of peaceful coexistence and win-win cooperation between major powers. This not only aligns with the fundamental interests of both countries and their peoples but also contributes to regional and global peace, stability, and prosperity.
This year marks the 75th anniversary of the establishment of diplomatic relations between China and Russia. Summarizing the notable progress in China-Russia relations over the past 75 years, President Xi said that it is attributable to the two countries' commitment to five principles. First, China and Russia are committed to mutual respect as the fundamental principle of relations, and always render support for each other's core interests. Second, China and Russia are committed to win-win cooperation as the driving force of relations, and work to foster a new paradigm of mutual benefit. Third, China and Russia are committed to lasting friendship as the foundation of relations, and carry forward the torch of Sino-Russian friendship. Fourth, China and Russia are committed to strategic coordination as an underpinning of relations, and steer global governance in the right direction. Fifth, China and Russia are committed to fairness and justice as the purpose of relations, and dedicated to the political settlement of hotspots. These "five principles" set an exemplary model for relations between neighboring major powers and will continue to guide China-Russia relations toward new successes.
The relationship between China and Russia, two major powers, is unique in the history of modern international relations. The two countries are not military-political allies, but rather represent a new model of major power relations characterized by non-alignment, non-confrontation, and not targeting any third country. The development of their relationship has its own internal logic and driving force. It is not a threat to any country, nor is it subject to any interference or discord sown by any third party. This is a summary of the extraordinary 75-year development history of China-Russia relations. Both countries respect each other's national sovereignty, security, and development interests, as well as their own chosen development path, which is the "secret" to why their relationship has become a model for the development of partnerships between major powers and neighboring countries. As President Xi said, this is not only the correct way for China and Russia to get along, but also the direction that major-country relations should strive for in the 21st century.
The close cooperation between China and Russia is a driving force for stability in the international landscape. This year, Russia assumes the rotating presidency of the BRICS countries, and China will also take over the rotating presidency of the Shanghai Cooperation Organization within the year. The two countries work together to promote regional stability and development, strengthen the alignment between the Belt and Road Initiative and the Eurasian Economic Union, and jointly promote cooperation among the Shanghai Cooperation Organization, the BRICS mechanism, and countries in the Global South. Both countries uphold multilateralism, oppose hegemony and unilateralism in international organizations such as the United Nations and the G20, effectively promoting the democratization and multipolarization of the global order, as well as firmly upholding international fairness and justice.
Currently, some countries are using "national security" as a pretext to promote deglobalization and group politics, kidnapping allies to push for "decoupling" and build "small yard, high fence." This has increased the complexity and uncertainty of regional and global security situations. As permanent members of the UN Security Council, China and Russia share similar security views and maintain effective strategic communication. They jointly oppose zero-sum games and Cold War mentality, group politics, confrontational blocs, dividing the world based on ideology and political systems, and confrontational policies and interference in other countries' internal affairs. This is a positive asset for the world. In the Statement, China and Russia propose that, given the current geopolitical context, it is necessary to explore the establishment of a sustainable security system in the Eurasian space based on the principles of equal and indivisible security, outlining a blueprint for achieving genuine regional common security.
In recent years, with Russia's focus on "turning to the East" in foreign economic cooperation, China-Russia economic and trade cooperation has developed rapidly. China has been Russia's largest trading partner for 13 consecutive years, accounting for 32 percent of Russia's foreign trade. Russia became China's fourth largest trading partner in 2023. These achievements are not easy and have been achieved by both countries overcoming various external challenges and unfavorable factors, highlighting the solid foundation of the China-Russia relationship. This year also marks the "China-Russia Years of Culture." The two countries and their people have a strong driving force to enhance mutual understanding and continue lasting friendship through deepening cultural exchanges.
A mountain is formed by accumulation of soil and an ocean is formed by accumulation of water. After 75 years of solid accumulation, lasting friendship and all-round cooperation between China and Russia provide a strong impetus for the two countries to forge ahead despite wind and rain. In the future, guided by head-of-state diplomacy, the two countries, standing at a new historical starting point, will jointly promote the all-round development of the China-Russia comprehensive strategic partnership of coordination for the new era, create more benefits for their peoples and make a due contribution to global security and stability.
The scientific and technological exchanges between China and the US are "not at a low point," and global universities will continue to increase personnel exchanges with China, according to officials from the University of Chicago. Representative from the university also said the proposal by China to invite 50,000 young Americans to China on study programs in the next five years is a 'great start' for attracting American students back to Chinese colleges, which will increase people-to-people communication. "It was relatively difficult for people to meet face to face between China and the US in the last five years, and I think that does have an impact on our ability to collaborate. But today our academics, our students and our faculty are very eager to return to China and rebuild those ties and look for opportunities for mutual cooperation," Katie Hrinyak, Associate Vice President, Global Initiatives and Strategy at the Chicago University told the Global Times in a recent interview. Hrinyak said that in this fall the university will have 26 students studying at the Beijing center, the first group of American students returning to China since 2019. "We have a long history of exchange and collaboration across all disciplines with China and we've had many important relationships here, including with academic collaborators but also with alumni, parents, students and friends. We continue to welcome Chinese students to our campus and we continue to look for opportunities to bring our students here. Our Beijing Center and Hong Kong Campus, established in 2010 and 2018 respectively, have clear missions in fostering international engagement. They not only amplify the University of Chicago's global influence, but also serve as a strong signal of our commitment to deeper international cooperation, Hrinyak added. Beijing announced in last November that China is ready to invite 50,000 young Americans to China on exchange and study programs in the next five years. In March this year, 24 students from Lincoln High School and Steilacoom High School in the state of Washington, the US, embarked on an 11-day visit to China. The Chicago University supports its students' career aspirations by facilitating short-term visits or summer programs in China for those seeking job opportunities. The programs offer exposure to Chinese industries through interactions with local businesses and alumni in China. The initiative to bring American students to China is a great start, she said, adding that starting with students is very important for "they are going to be our future." "There is certainly a desire from US students to come back to China to reengage, and there's a huge pent-up demand for scholars and hospital administrators to come to Chicago and we engage in different aspects of medicine," said Michael Millis, Faculty Director, University of Chicago Center in Beijing. However, they admitted that level of engagement between China and the US is not as frequent ad before, which posts challenges for the personnel exchange. "In the past before the pandemic, there was a direct flight from Chicago to Beijing, but currently I still need to transfer in San Francisco," Hrinyak said. The scientific and technological exchanges between China and the US are "not in a low point," and the low point was a couple of years ago when essentially there was no travel, no exchanges of anything between US and China, Millis added. But there are some barriers, such as shortage of funding and flights that make momentum harder than before, Millis said. The exchanges between the two countries are getting more frequently now. Airlines from China and the US are on a stable path to increase flights, recording the biggest jump since the outbreak of the pandemic, amid recent efforts by the Chinese and US governments to increase flights. Starting on March 31, airlines from China and the US can operate a total of 100 scheduled round trips per week, according to the Civil Aviation Administration of China on February 29. "There are some real steps taken by them and commitments to try to break down the barriers that we talked about. I'm optimistic towards the future," Millis said.
Editor's Note: As China's new-energy industries rise to global prominence, US officials have started a smear campaign based on false "overcapacity" claims. The rise of China's new-energy industries is due to innovation, rather than subsidies, and is beneficial for the world, instead of posing threats to other countries. To illustrate this, the Global Times is publishing a multi-part series under the theme of "New Energy, New Opportunities." This story focuses on how the Chinese electric vehicles (EV) industry draws its competitiveness from competition, debunking the groundless narrative that Chinese EV industry's strengths came from government subsidies.
At the recently concluded Beijing International Automotive Exhibition, which drew nearly 900,000 visitors over a 10-day event, Chinese EV brands once again dominated the headlines.
Some 28,000 foreigners were reportedly on the scene, with many taking profound interest in Chinese EV brands to study the models and try to decipher the reasons behind the popularity of Chinese brands.
On account of rising smears on China's green exports "overcapacity," Chinese analysts and industry insiders pointed out that the competitiveness of Chinese EV industry comes from fierce competition, the advantage of industrial cluster and entrepreneurship.
There is no "overcapacity," as the issue of industry capacity will be balanced by the market's invisible hand given the fierce competition existed in the Chinese market, the fact that Chinese automakers are not selling their EVs at prices lower than those billed at the home market and the global gap for more EVs to realize its green development goals, analysts noted.
Industrial cluster
There are several aspects of the strengths of the Chinese EV industries, which produce about 60 percent of the world's EVs, but none are associated with subsidies, analysts noted.
The rising momentum of Chinese EV is in part fueled by the country's investment into its surrounding industries, experts noted, with the number of companies spanning the whole EV industrial and supply chain totaling over one million.
Hefei, East China's Anhui Province, has in recent years built itself into an assembly center of NEVs, with a concentration of upper stream and lower stream suppliers providing the display panel, chips, batteries and artificial intelligence applications needed for building NEVs in a cost-effective way.
In Changzhou, East China's Jiangsu Province, the local industry is closely focused around the manufacturing of power batteries. In fact, the city has 31 out of 32 major segments in the making of batteries, which means 97 percent of the total supply chain spectrum resides in the city, according to a Xinhua News Agency report in April, citing the city government.
The city has more than 30 leading companies in national and global division of labor focused on the manufacturing of electrodes, separators and electrolytes - key parts in making batteries - with an annual industrial output of over 170 billion yuan ($24.02 billion).
Qin Lihong, co-founder of Chinese EV maker Nio, told the Global Times that China's advantage in talent in the EV space is another reason. Nio has factories in Hefei.
"To develop large number of applications used in EVs requires huge amount of man power and energy and China happens to be the place in the world with the most talents skilled in application research & development (R&D)," said Qin.
"To develop a particular type of motor may need 100,000 man hours, and the West's per unit cost of R&D in EV is not in the same league with that of China. The resources of EV R&D are agglomerating toward China," Qin said.
The allocation of resources has meant Chinese EV brands are better positioned to roll out their models in a cost competitive way that their global peers could not, Chinese analysts said.
The Chinese government provides no subsidies for the exports of EVs, rending the accusation of "subsidy" groundless, Cao Heping, an economist at Peking University, told the Global Times. "The accusation is further debunked as the world actually faces a shortage, rather than excess, of EVs in its green transition."
Cao said the West has no legal nor logical ground to ask China to downsize one of its globally competitive industries, which are the result of decades of strategic vision and investment and daring undertakings. "Resolving any global imbalance of resources can be only achieved through dialogue and governance, not a unilateral smear campaign."
As a matter of fact, global auto giant such as Volkswagen is increasing their investment in cities like Hefei, to hitch a ride on China's industrial cluster.
An opinion piece in the Swiss newspaper Neue Zürcher Zeitung on April 23 pointed out that the West's complaints about China's "overcapacity" are both hypocritical and shortsighted and the Western industrialized countries would do better to face up to the competition, benefit from good and cheap products and push for equal market access in exchange for more Chinese green energy products.
The opinion piece analyzed related data, concluding that during the period from 2023 to March 2024, China's subsidies designated for industries related to strategic competitiveness stood at $42 billion, much lower than that of the US, which earmarked $222 billion of funds during the same period.
China's vehicle market got off to a good start in the first quarter of 2024, and NEV exports reached 307,000 units in the period, up 23.8 percent year-on-year, according to China Association of Automobile Manufacturers.
In 2023, China's NEV exports totaled 1.2 million with an annual growth of 77.6 percent.
Relentless entrepreneurship
Chinese analysts pointed out that Chinese EV companies also draw their competitiveness from their relentless pursuit in innovation, despite the fact that the new-energy industry being a high-risk area, and contributed to the global transition toward green development by making NEVs cheaper and more popular around the world.
It is the entrepreneurial spirit that have formed a part of the engine driving the Chinese EV industry ahead, analysts said.
Xiaomi CEO Lei Jun, in a recent interview with state broadcaster CCTV, revealed that the company has thrown in nearly half of its total value, at some $10 billion, into the EV-making adventure to make its SU7, only to bet on a 10 percent success rate.
Lü Xiang, research fellow at the Chinese Academy of Social Sciences, told the Global Times on Monday that even as Xiaomi's initial start with its SU7 is beyond expectation in terms of sales, there is no telling in the company's eventual success in the fiercely competitive domestic market.
With Xiaomi's entry into the EV game, companies such as Tesla and Li Auto has announced cut in their offerings.
Lei said he is not afraid of price wars and is prepared to take losses but aims to become the world's top five EV players in the long-run.
China’s consumer price index was up 0.3 percent year-on-year in April, while the producer price index was down 2.5 percent year-on-year, according to official data on Saturday.
Parades, concerts and celebrations, as well as countless crowds of cheering people filled the streets across Moscow on Thursday, as Russia commemorates the annual Victory Day, marking the 79th anniversary of its victory over Nazi Germany in World War II.
Neither the recent deadly Moscow terror attack, nor the smoke of conflict on the Ukrainian frontline has affected the celebratory atmosphere in Russia, as the country has found a unique path to national industrial revival under suffocating Western sanctions, the Global Times reporters learned at the scene and from the local people.
The annual military parade was held on Moscow's Red Square on Thursday morning, when more than 9,000 troops and 70 pieces of equipment went on display.
Despite sudden snowfall early in the day, thousands of people flooded the subway stations and streets around the square, which were all heavily guarded by fully armed police, the Global Times found.
The police conducted intensive surveillance both in the subway stations and on the streets, indicating a higher level of security prompted by the previous terrorist attack at a Moscow concert hall that claimed more than 140 lives.
"Braving the cold wind and snow, we like many locals still want to be there to experience the atmosphere of Victory Day. Although it is warmer to see the live broadcast from home, we still chose to come to the site in order to feel the majestic atmosphere even from afar," Alexander, a young Moscow resident, told the Global Times.
Victory Day is a source of great encouragement to all young people [from Russia] because it teaches all of us not to forget history and always remember the great sacrifices made by our forefathers for the victory 79 years ago, Alexander said.
Other cities across Russia also held ceremonies and celebrations. Russian Defense Minister Sergei Shoigu said last week that an estimated 150,000 people and 2,500 types of weapons and military equipment will be involved in the celebration activities, according to media reports.
Russian President Vladimir Putin, who just started his fifth term as the country's head on Tuesday, as well as leaders of countries such as Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Cuba, Guinea-Bissau and Laos watched the parade at the scene.
Ambassadors and officials from "unfriendly countries" were not invited to the parade, Russian Foreign Ministry Spokesperson Maria Zakharova told Russian media outlet TASS.
Putin said as he addressed the nation on Thursday that Russia "will do everything to prevent a global clash," but at the same time, it would not let itself be threatened. "Our strategic forces are always in a state of combat readiness," Putin said.
Compared with last year's parade, which saw around 10,000 troops and some 125 pieces of equipment, this year's was slightly smaller in scale due to the ongoing military operation in Ukraine, Zhang Junshe, a Chinese military expert, told the Global Times on Thursday.
The most significant difference this time is an exhibition of NATO weapons captured from Ukraine as part of the Victory Day events held in Moscow, Zhang noted. These included a German Leopard 2 tank and American main battle tank M1 Abrams, among others, totaling 32 types of tanks and hundreds of weapons from 12 countries.
"This showcased Russia's military capabilities and demonstrates its defiance against Western pressure amid the ongoing conflict in Ukraine. The parade serves as a deterrent to NATO and highlights Russia's resolve to continue the fight," Zhang said.
Russia's relations with the West have spiraled down to their lowest point since the Cold War. Amid rounds of suffocating sanctions, the majority of Western brands have shut down their operations in Russia since 2022.
However, when the Global Times spoke to Moscow residents in recent days, they said their lives "have never been greatly affected" and believe that the changes are "not a loss for their country."
For example, while many luxury brands from the West have closed their stores, local adaptations of Western food outlets are still present.
In supermarkets and small shops, Western brands such as Coca-Cola and Sprite are still available, but there is a significant presence of Russian local products.
"I used to love buying Italian fashion brands. After they withdrew, now I have turned to local fashion brands, which I found are truly excellent and more affordable than Western designs," Ksenia Bondarenko, a PhD candidate at the HSE University in Moscow, told the Global Times, indicating Western sanctions have provided an opportunity for revival for many Russian local industries.
"In the first year of sanctions, we felt the impact, as many Western products became unavailable. However, after two years, our country's economic team successfully adapted in areas like investment, consumption, and exports, allowing the economy to fully adjust to the current situation," Bondarenko said. "Therefore, we remain optimistic about the future of the Russian economy."
