China's Week. Dec. 23

Last regular issue until January 12

Science & Technology

Alibaba’s Qwen LLM was the most downloaded open source AI model this year. With 75,000 derivative models, it’s the world’s most adapted.

The US led in 60 of 64 critical technologies in 2007, now China leads in 57 and the US leads in 7. 24 of the 64 technologies are at high risk of Chinese monopoly.

China contributes 23% of the global innovative drug pipeline and leads several advancements in biologics, precision medicine, and synthetic biology.

Economy & Trade

Huawei leads watch sales, selling 24 million units, many with medically certified blood pressure measurement. Apple Watch sales fell 13% to 22.5 million.

China’s TCL surpassed Samsung in the 80+ inch TV market for the first time in Q2. Hisense, also Chinese, is closely trailing Samsung.

Value-added industrial output, a vital economic indicator, expanded 5.4% YTD and fixed-asset investment rose 3.3%.

Growth Rate: 5.4% YoY in November, vs October’s 5.3%. High-tech manufacturing grew at double-digits. Online retail sales up 7.5%. Infrastructure investment up 6.8%, RE investment fell 8.1%, private investment grew 2.2%.

Lithium-ion battery exports to the U.S. hit a record $1.9 billion last month, up 27%.

Trump tariff policy will reduce US GDP by 1.1% and China’s by 0.3% – Nikkei

China’s $21.6bn is Saudi’s largest greenfield foreign direct investment, $7 billion of which were in clean technologies. The US invested $12.5bn.

Semiconductor design industry revenue grew 12% YoY, to $91 bn.

BYD’s trailing 12 month revenue was $94 bn. Tesla’s was $97 bn. BYD’s market cap is $108 bn, Tesla’s is $1,540 bn. How does this make sense?

Society

Urban youth, 16-24, unemployment fell to 16% in November. For the 25-29 group, the rate was stable at 6.7% and remained at 3.8% for the 30-59 group.

The average age of China’s workforce is 39.72 Years. It was 32.25 in 1985.

Surveys: Chinese-Australians and Chinese-Americans report..

• Low confidence and trust in their domestic English-language news media’s coverage of the PRC.

• The tenor of their domestic English-language media’s reporting impacted on their personal, interpersonal relationships.

• A significant negative impact on their mental and emotional well-being.

• Anxious and fearful in response to media speculation about war with China.

Since my 2018 trip to Shanghai, Alipay/WeChat availability to tourists has changed everything. No more lines, menus, verbal orders, credit cards, kiosks, account numbers, wires, or receipts. Menus come up in your phone, select taxis destinations in your phone, all data and proof of purchases are in your phone.

China leads global public art auction sales.

Environment

China kept wind and solar power utilization rates > 95% in 2024, reflecting progress in its green energy transition, according to the NEA.

Power demand growth was 2.8% YoY, up 21 TWh YoY and new clean energy installations should have covered that 100%. But wind was down 3.3% YoY, solar was up only 10.3% YoY, it was cloudy and hydropower was also down YoY.

Xi: It is imperative to strengthen agriculture, benefit farmers, enrich rural areas, and advance rural revitalization. Turn the countryside into a beautiful and harmonious place for people to live and work.

Fertiliser use has fallen for eight consecutive years, yet agricultural production has grown, with grain at a record high of 706.5 billion tonnes in 2024.

Governance

Above: Beijing’s taxonomy of corruption

China’s general government spending is 36% of GDP. France’s is 55%, the highest in the G7.

Beijing wants to create a modern retail system by 2029 featuring enriched supplies and high-quality services, that is smart, convenient and green.

Michael Hudson: “The only way to realize the democratic aim of raising living standards is to have a state strong enough to resist special interests. China doesn’t have the special interests that prevent real democracy in the US”.

Glenn Luk: Since 2009, 22 billion passengers have traveled 7.6 trillion km on China’s 45,000 km HSR, or 348 km/trip. The network cost $1T to build, or $24M/km. For 124 billion passenger rides, that’s $8/ride, or 1 hour's wages. (HSR uses 45 TWh p.a, or 0.5% of China’s total annual power consumption of 10,000 TWh).

The CPC’s strategies in place to manage the post-Dalai Lama era, preparations to mitigate uncertainties associated with the succession process.

Beijing harnesses AI and big data to get citizens to pay taxes on overseas investment gains.

Xi this week: “How can the Party break free from the historical cycle of rise and fall, and ensure that it never degenerates, changes color or flavor?” The first answer is Mao’s, “Let the people supervise the government,” i.e., democracy.

Diplomacy & Geopolitics

Media worldwide often quote Wang Jingyu, a self-styled brave dissident resisting Communist Party repression. But Wang is involved with impersonating government officials and credit card frauds from Bangkok to the Netherlands.

Authorities said they can't recall so many news organizations retracting stories because of the reliability of a single source.

While maintaining cordial relations with China, Vietnam simultaneously strengthened its collaboration with the Philippines, exchanging tactics for challenging China's maritime presence, intensified its maritime activities and helped shape negative narratives about China's presence in the South China Sea.

Nepal has finally joined the Belt and Road Initiative (BRI). The agreement was signed during Nepalese Prime Minister KP Sharma Oli’s recent visit to Beijing.

China, India’s Six-Point Border Consensus: to refine border management rules, build trust and enhance cross-border exchanges, including the resumption of Indian pilgrims' visits to Xizang.

The US was the factory of the world in 1930 while today, China is. The US is a blend of the UK, France, and Weimar Germany: a financial centre with the world’s reserve currency and the world’s largest debtor with a hollowed out industrial base.

“In addition to the unfettered supply of arms to Taiwan, there is a deliberate tendency to turn a blind eye to the efforts of the Taiwanese administration to de-Sinicise and Taiwanise the island”. Russian PM Dmitri Medvedev in Beijing.

Sergei Ryabkov: “The BRICS currency scheme is not a dollar substitution scheme. It’s for conditions where the dollar channel fails for reasons beyond the control of the BRICS. Clearing mechanisms and transaction insurance systems–including insurance for the movement of goods and cargo – not dependent on harmful outside influences – all of those are now ready”.

Defense

Chinese fighter pilots get more training hours than USAF pilots, with the discrepancy growing due primarily to low availability rates of the F-35.

First hypersonic aircraft achieves a horizontal landing. The The MD-19 flies a 600kg payload 8,000 Km at Mach 7 (5,000 mph).

The PLA’s Electronic Warfare unit targets US carrier strike groups, includes AEGIS ships’ AN/SPY-1 phased array radar, E-2C Hawkeye early warning aircraft.

Chinese missiles could close the runways and taxiways at U.S. forward air bases in Japan, Guam, Pacific. U.S. countermeasures unlikely to solve the problem.

China’s ban on critical minerals to be felt across ‘all branches of US military’. 20,000 weapons parts affected, including nuclear missiles, with naval systems most at risk.

Detonation Ramjet Engine Completes Test Flight, at 20 km altitude, achieves 400 kg of thrust @Mach 4. Detonation combustion, modular design make the engine compact, functionally independent and easy to maintain, offering immense commercial potential for high-speed flight.