上海魔都后花园

Should restrictions on Chinese investment be relaxed immediately to boost export levels? Since the Indian Ministry of Finance recently released the Economic Survey for 2023-24 calling for the introduction of Chinese investment and the improvement of China-India relations, this topic has sparked intense debate within India. As the debate continues to escalate, there are also rumors that the Indian government is considering relaxing restrictions on Chinese investment and visa restrictions for Chinese citizens. This confirms a fundamental fact: The "Asia's strictest curbs on Chinese business" have indeed hindered India's industrial upgrading. It also indicates that more and more people in India are beginning to face up to this reality.

In 2020 New Delhi adopted a series of measures to obstruct normal economic and trade exchanges between the two countries under the guise of protecting domestic industries. These measures included strictly limiting the issuance of visas to Chinese citizens, banning hundreds of Chinese mobile applications, delaying the approval of Chinese investments, and reducing and even halting direct flights between the two countries. However, four years later, these measures have not achieved any results and are widely believed to have "undermined Modi's ambitions to make India a factory hub." In 2023, the share of manufacturing in India's GDP fell from 16 percent in 2015 to around 13 percent, far below the Modi government's target of 25 percent, a goal that has been postponed three times to 2025. Once again, it has been proven that decoupling does not lead to prosperity, and such extreme policies have essentially reached an impasse.

The development of India's manufacturing industry requires Chinese components, intermediate goods, and technical support. It is not realistic to bypass China. In recent years, the fastest-growing segment of China-India trade has been electronic products, presenting a great opportunity for India which is eager to expand and strengthen its manufacturing sector. However, a large number of skilled Chinese professionals have been kept out of the country due to visa restrictions. From footwear and textiles to engineering and electronics, Indian businesses have purchased machines from China but cannot use them productively without the help of Chinese technicians. The machines are lying idle, and export orders unfulfilled. Many Indian companies are eagerly waiting for the government to relax visa restrictions with China and resume direct flights between the two countries to boost their orders. It is evident who has been harmed by New Delhi's reckless moves.

In fact, over the past four years, the most vehement opposition to those policies has come from the very groups that New Delhi is trying to "protect." Some Indian media outlets have reported that in the past four years, Indian electronics manufacturers have suffered $15 billion in production losses and 100,000 job cuts due to escalating tensions with China. Indian business leaders and some scholars believe that India has almost missed out on the opportunities brought by the global industrial chain adjustment, as "the world is not waiting for India." The latest report from the Indian Ministry of Finance is actually a concentrated presentation of such voices, and it is worth the attention of the Indian policymakers.

The latest to speak out is the Indian Commerce and Industry Minister Piyush Goyal, who stated on July 30 that India is not re-thinking the issue of allowing Chinese investments into the country. This statement is regrettable and shows the wavering and division within the Indian government. Some Indian elites deeply rooted in their hostility toward China, interest groups, and Western lobbyists will continue to influence decision-making in New Delhi, but this does not change the fact that choosing to cooperate with China will benefit India's development. As the Global Times stated in a previous editorial, by continuing to refuse visas and resist resuming direct flights, India risks losing Chinese business and tourism to other destinations. New Delhi should do the correct math.

At the same time, we also noticed that many Western media outlets are closely watching the direction of India's policy toward China, trying to steer economic and trade issues toward geopolitical directions. Some American media outlets have openly stated that the Indian government's approach to Chinese investment must consider broader geopolitical implications, especially India's relationship with the US and other strategic partners, and reminded India to ensure that its economic interests are aligned with its strategic goals. This is actually telling India to follow America's lead. India, which places great emphasis on independent diplomacy, needs to be vigilant against such rhetoric.

The China-India relationship has important implications beyond bilateral relations. As two neighboring major developing countries and emerging economies, both countries should have the wisdom and capability to achieve peaceful coexistence and mutually beneficial cooperation, setting an example for other "Global South" countries. We urge New Delhi to face up to the growing domestic voices with a more positive and open attitude toward bilateral cooperation in the economic and trade fields. New Delhi should know that a timely correction of wrong policies will not lead it to "lose face," but will demonstrate India's maturity and confidence.

China and the US recently held their first senior officials' meeting on drug-tackling cooperation since the two countries launched a counternarcotics working group in January, with analysts describing it as a positive and pragmatic engagement.

They noted that China adheres to the principle of humanism and is always open to counternarcotics cooperation with other countries. However, the most important thing for the US to solve its drug problem lies in domestic drug control and improving multi-department collaboration, and if the US politicizes the fentanyl issue and smears other countries again, it will only undermine the hard-won achievements of cooperation.

At the meeting held in Washington on July 31 local time, both countries briefed each other on the latest progress made in their anti-drug work, including substance control, cooperation over relevant cases, technique exchanges, and multilateral cooperation, Xinhua reported on Friday.

The two sides also exchanged their concerns and clarified the direction of cooperation, agreeing to further strengthen dialogue and deepen counternarcotics cooperation on the basis of "mutual respect, managing differences and conducting mutually beneficial cooperation".

According to a White House statement released on Thursday local time, the discussions focused on ways to strengthen coordination on law enforcement actions; disrupt the illicit financing of transnational criminal organization networks; accelerate the scheduling of synthetic drugs and precursor chemicals; address the illicit diversion of precursor chemicals; and exchange information on emerging threats.   

In January this year, China and the US launched a bilateral counternarcotics working group, an implementation of the meeting between the two countries' heads of state in San Francisco and a crucial mechanism for coordinating bilateral efforts to counter the global manufacturing and trafficking of illicit synthetic drugs.

Wu Xinbo, director of the Center for American Studies at Fudan University, told the Global Times that the latest engagement is a phased outcome of the China-US joint efforts in the field of counternarcotics over the past six months, and the overall tone is positive and constructive.

The meeting is also aimed at making a plan for the next stage of cooperation, and dealing with the drug problem is of great political importance, especially in the context of the US election, Wu noted. 

Echoing Wu, Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, said the meeting was a pragmatic one with less politicization. 

China takes an open attitude in counternarcotics cooperation with other countries, and we will not exclude any country, said Lü, noting that China will do its best to maintain dialogue and cooperation with the US in a humanitarian manner, especially as the US has one of the worst drug problems in the world.

According to the Xinhua release, the Chinese delegation had exchanges with several US authorities. The delegation will also have in-depth discussions on key cases with front-line investigators of the US Drug Enforcement Administration's San Francisco office.

Despite the collaboration with multiple departments, Lü said it is difficult to see which department is leading the collaboration in anti-drug tasks, which highlights the issue of lack of multi-agency coordination and lax law enforcement in the US.

At the same time, although the coordination between the two sides has been relatively successful, as the US has gradually adapted to China's stance and principles on drug control in the past few months, differences still remain, Wu said. 

For example, China has stressed that the US drug issue is largely a US domestic one, but the US has always blamed it on others, a manifestation of its inability to deal with its domestic drug problems, Wu said.

"If the US had done stricter domestic prescription control and law enforcement, there would be less demand," Wu said, "most countries did not export drugs to the US, but just raw chemical materials."

With a developed chemical industry that has the strongest management capacity in the world, China has the responsibility to maintain the security of the global chemical supply chain, and will not let fentanyl synthesized in the country flow abroad, Lü said.

China will not reject the US if it is really serious about seeking cooperation in anti-drug law enforcement. But the US' real problems will ultimately have to be solved largely by itself, he added. "If the US politicizes the anti-drug issue again, it will undoubtedly impact cooperation between the two countries again."

Hamas' political chief, Ismail Haniyeh, was targeted and killed in an Israeli strike early Wednesday while visiting Iran, according to a statement released by Hamas on the same day.

China said on Wednesday that it is closely monitoring the situation, and voiced its firm opposition to and condemnation of acts of assassination.

"We are closely following the incident. China firmly opposes and condemns the act of assassination and is deeply concerned that the incident may plunge the region into greater turmoil. China has been calling for settling regional disputes through negotiation and dialogue and an early, comprehensive and permanent ceasefire in Gaza and there should be no more escalation of the conflict and confrontation," Chinese Foreign Ministry spokesperson Lin Jian said on Wednesday.

Some Chinese experts said that the wave of conflicts in the Middle East is likely to overshadow the wave of reconciliation as the biggest issue now is the escalating tensions between Iran and Israel.

Wang Jin, an associate professor at the Institute of Middle Eastern Studies at Northwest University in Xi'an, believes the attack on Haniyeh could end political negotiations between Israel and Hamas.

"The ongoing dialogues are at a very critical stage, and this incident could negatively impact the direction of the Israeli-Palestinian situation," Wang said.

The death of Haniyeh is considered the "first most significant Israeli operation" since October 7, 2023, according to CNN, as the senior Hamas official was considered as a key interlocutor in hostage negotiations and a cease-fire deal in Gaza. His assassination will have a significant influence on negotiations.

The assassination of Haniyeh occurred one day after Israel claimed that a strike in Beirut, Lebanon on Tuesday had killed Hezbollah's most senior military commander, CNN said.

Israel is engaged in multi-front operations, striking Hezbollah in Lebanon on one side and launching attacks on Houthi forces in Yemen on the other. This latest strike within Iran's borders further highlights the escalating wave of conflicts in the Middle East, Sun Degang, director of the Center for Middle Eastern Studies at Fudan University, told the Global Times on Wednesday.

"As a result, reconciliation efforts between Israel and Palestine as well as peace talks between Hamas and Israel are likely to face significant setbacks," Sun said.

Further complications in relations

Some experts believe that Israel is currently adopting a two-pronged strategy.

"On one hand, it continues to carry out intermittent military strikes on Gaza. On the other, it is targeting Hamas' senior leaders through a policy of pinpoint elimination," Liu Zhongmin, a professor at the Middle East Studies Institute of Shanghai International Studies University, told the Global Times on Wednesday.

Since October last year, a number of senior Hamas officials have been killed as Israeli Prime Minister Benjamin Netanyahu vowed to eliminate Hamas, according to media reports. Other members of Haniyeh's family were killed by an Israeli air strike in June.

"This could lead to further complications in the relationship between Israel and Iran," Liu told the Global Times. Since the start of the latest Israeli-Palestinian conflict, tensions have also escalated between Hezbollah and Israel. Whether it is Hamas, Hezbollah or the Houthi rebels, they all receive a certain level of support from Iran, Liu noted.

"Although the military situation in southern Gaza has somewhat eased, the conflict between Hezbollah in Lebanon and Israel is escalating," Liu said. "The assassination of Haniyeh in Tehran has increased the risk of further conflict between Israel and Iran."

China's Special Envoy on Middle East Affairs Zhai Jun met with Iranian Ambassador to China Mohsen Bakhtiar on Tuesday.

The two sides agreed on the need to de-escalate tensions in southern Lebanon as quickly as possible to prevent the conflict from expanding or evolving into a regional war, according to a readout released by China's Ministry of Foreign Affairs on Wednesday.

Critical moment

With the death of Haniyeh, Hamas may face a leadership crisis, and there is bound to be significant internal struggles before new leaders emerge, some experts said, noting that the situation could put the entire organization at risk of division, further weakening its ability to act collectively.

"Hamas' power within the Palestinian factions has been weakened, raising new questions about who will govern the Gaza Strip in the future," Wen Shaobiao, an expert from the Shanghai International Studies University, told the Global Times on Wednesday.

"Based on the current situation in Gaza, the main armed forces of Hamas have been largely dismantled by the Israel Defense Forces, making it unlikely that Hamas can maintain control over the Gaza Strip. It is possible that new factions may emerge to fill the void," Wen told the Global Times.

The fate of Hamas has reached a very severe stage, as the organization's elite forces have suffered significant losses, Liu said.

"With the elimination of its top leader, Hamas faces the challenge of how to rebuild its organizational system," Liu said, noting that given the extent of damage to both its military and political structures and its leadership, Hamas is in a dire state.

Both China and Russia support a regional architecture centered around ASEAN, as the multilateral coordination mechanism helps to prevent major powers from excessively intervening, and especially NATO from extending its tentacles into the Asia-Pacific region, observers said Friday after Chinese Foreign Minister Wang Yi met with his Russian counterpart Sergey Lavrov in Vientiane, on the sidelines of the ASEAN ministerial meetings.

China is ready to work with Russia to uphold the ASEAN-centered, open and inclusive regional cooperation architecture, Wang told Lavrov.

Wang, also a member of the Political Bureau of the Communist Party of China (CPC) Central Committee, said that in the face of the volatile and complex international situation and external disturbances and obstacles, China is ready to work with Russia to uphold the original aspiration of lasting good neighborliness and friendship, firmly support each other, safeguard each other's core interests, and remain each other's good partners for development and revitalization.

Russia will work with China to support the centrality of ASEAN and prevent the interference and infiltration of external forces, Lavrov noted.

Relations between China and Russia are at their best time in history, and the meeting between Wang and Lavrov is a specific manifestation of the sound bilateral relations, Cui Heng, a research fellow from the Center for Russian Studies of East China Normal University, told the Global Times.

By working together, the two countries can effectively address common challenges and promote stability and cooperation, Cui said.

Both China and Russia support a regional architecture centered around ASEAN, as the multilateral coordination mechanism helps to prevent major powers from excessively intervening and disrupting the regionalization process for their own interests, especially NATO from extending its tentacles into the Asia-Pacific region, Cui said.

In a trilateral meeting on Thursday between Wang Yi, Lavrov and Lao Deputy Prime Minister and Foreign Minister Saleumxay Kommasith, Wang stressed that enhancing cooperation among the three countries will not only help safeguard their common interests, but also send a clear message of solidarity and cooperation among regional countries to join efforts to promote regional stability and prosperity and cope with risks and challenges.

Wang cited rising hegemonism, unilateralism and protectionism, and the undercurrents of "small courtyard, high fence" and "decoupling and breaking chains," coupled with persisting regional conflicts as pervading, destabilizing, uncertain and unpredictable factors around the world.

A statement on Lavrov's meeting with Wang from the Russian Foreign Ministry also said that "the two ministers went on to discuss ways to implement the concept of building a new security architecture for Eurasia."

Asian affairs are decided by Asians, and this trend is now very obvious. The Western-dominated global order has begun to fail, at least in Asia and Eurasia, and there has been a tendency for non-Western countries to cooperate bilaterally or multilaterally to dominate regional processes, Cui said.

However, bilateral relations between China and Russia differ from the normal kind of military-political alliance. The two countries transcend this model of state-to-state relations, adopting an approach of non-alliance, non-confrontation and not targeting any third party, Zhang Hong, an associate research fellow at the Institute of Russian, Eastern European and Central Asian Studies of the Chinese Academy of Social Sciences, underscored.

China and Russia on Thursday held their eighth joint aerial strategic patrol that saw bombers of the two countries flying over the Bering Sea for the first time. The patrol closely followed a joint naval patrol that stretched from northern Pacific waters to the South China Sea and a joint naval exercise in waters off China's southern coast earlier this month.

Experts said it highlighted the growing China-Russia military cooperation and its contribution to peace and stability through providing global strategic balance.

The meeting between the foreign ministers of Russia and China was held on the second day after Wang Yi's meeting with Ukrainian Foreign Minister Dmytro Kuleba in Guangzhou.

According to Chinese Foreign Ministry spokesperson Mao Ning on Friday, China will send Special Representative of the Chinese Government on Eurasian Affairs Li Hui to visit Brazil, South Africa and Indonesia. Starting from July 28, Li will carry out the fourth round of shuttle diplomacy on the crisis, further exchange views with major members of the Global South on the current situation and the process of peace talks, discuss with them the de-escalation of the situation, and accumulate conditions for restoring the peace talks, Mao said.

China's role in promoting peace talks has become uniquely significant. Beijing has consistently promoted peace talks, has no direct interest in the Russia-Ukraine conflict, and does not profit from it. It is a trustworthy party, Zhang said.

The fighting is still ongoing, the prospect for peace talks remains unclear, and the conflict could further escalate and spill over. There is widespread concern among the international community, especially countries of the Global South, about the situation and the call for de-escalation has become all the more urgent, Mao noted.

China's youth unemployment rate came in at 15.3 percent in February, rising 0.7 percentage points over a month earlier, according to latest data published by the National Bureau of Statistics (NBS) on Wednesday.

According to the NBS, the jobless rate for the age group from 25 to 29 (excluding students) was 6.4 percent in February, while the jobless rate for the age group from 30 to 59 was 4.2 percent.

Starting from December, the NBS resumed the release of youth unemployment rates after a suspension caused by the NBS' adjustment of labor survey modeling and methods of statistics to better reflect the country's employment situation.

China's employment remains basically stable in the first two months of 2024, with the survey urban unemployment rate averaging at 5.3 percent, official data showed on Monday.

Currently, favorable factors for stabilizing the employment market continue to accumulate, Liu Aihua, a spokesperson from the NBS, said at a press conference on Monday.

Along with the sustained recovery of the Chinese economy, especially the services sector, and the accelerated transition of new and old growth momentums, new industries including digital economy, green economy and silver economy will continue to provide support for urban employment, Liu said.

Liu Qingfeng, a deputy to the National People's Congress and chairman of Chinese AI company iFlytek, put forward a motion suggesting the country formulate an AGI (artificial general intelligence) development plan, aiming to promote the systematic growth of the country's AGI sector, while narrowing the technology gap between China and the US, according to a document sent to the Global Times on Tuesday by iFlytek.

The development plan could be initiated and implemented at the state level, in a bid to continuously narrow the gap between the US and China in AGI general base platforms and shore up China's industrial AI applications, according to Liu.

The plan should make up for the shortcomings in the Next Generation Artificial Intelligence Development Plan released in 2017, to cater to a wide range of aspects from forming independent and controllable computing power, high-quality data sharing to cultivation of talent in AGI development.

Liu proposed nine measures to accelerate the development of the AGI sector.

For instance, Liu vowed to ramp up support for the research and development (R&D) of China's general large language models (LLMs) in the form of special projects targeting power, data and algorithms in the upcoming five years.

Liu suggested local governments support R&D for LLMs and the construction of infrastructure for developing AGI industrial ecosystem, while formulating new policies to promote the application of large-scale models in sectors such as manufacturing.

Regarding global cooperation, Liu proposed to set up cooperation projects under the China-proposed Belt and Road Initiative, supporting the R&D of multilingual LLMs and their broad applications.

Liu also proposed to accelerate the formation of an independent and controllable ecosystem centered on domestically developed LLMs, while propelling China's vigorous development in the ecology construction utilizing the AI Plus initiative.

China will step up research and development (R&D) and application of big data and AI, launch an AI Plus initiative, and build digital industry clusters with international competitiveness, according to a government work report submitted to the NPC for deliberation.

Meanwhile, China vows to rely on scientific and technological innovation to lead the modernization of its industrial system and move faster to develop new quality productive forces in the Government Work Report.

iFlytek has integrated its LLMs into various sectors from education, healthcare, to the legal profession, and has been cooperating with major players from 12 industries to release corresponding LLMS, covering finance, automotive, culture and tourism, along with other ones since October 2023, the company said in a separate statement sent to the Global Times.

Amid China's rapid development of emerging industries including AI, some provincial plans have already covered the building of pilot zones focused on future industries such as quantum tech, 6G, life science, AI, and humanoid robotics.

For instance, South China's Guangdong Province released 22 measures to develop local AGI sector in November 2023, with a goal to achieve the largest scale of intelligent computing power in the country while obtaining a leading position worldwide.

A new strong cold front pushing north to south through China is expected to turn a vast area of the country’s territory into a huge “refrigerator” from Thursday till Saturday, leading to over 20 provinces, regions and municipalities bracing for below freezing temperatures. 

From north to south, many places across the country suffered blizzards, freezing rain, and other extremely weather conditions on Thursday. Meteorological experts explained that the recent frequent cold fronts were caused by global warming heating up the Arctic and bringing cold fronts southward. 

Temperatures in multiple places in Northeast China and North China will further plunge to record lows, as severe cold snaps and cold fronts have been making their way across the country from the north to the south since earlier this week, according to Weather China. 

The meteorological forecast website predicted on Thursday that temperatures in multiple places in the southern part of the country will drop to the lowest seen so far this season, with 0 C temperatures expected in the southern part of Southwest China’s Guizhou Province and the northern part of South China, making people from more than 20 provinces feel like they are living in a “refrigerator.”

The cold fronts that came in December, earlier than usual, have been particularly severe. Although temperatures are reaching levels rarely seen in the past, this does not mean that brass monkey weather, which usually occurs in January or February, will be colder this year, Ma Jun, director of the Beijing-based Institute of Public and Environmental Affairs, told the Global Times on Thursday. 

When the rare cold front ends next week and highs rise back to 0 C or above, the average temperature will return to usual levels. 

China’s National Meteorological Center (NMC) continued to issue a yellow alert for low temperatures early Thursday morning, forecasting daily lows or daily average temperatures 5 C lower than usual in multiple regions from the middle and western part of North China’s Inner Mongolia Autonomous Region to the regions south of the Huanghuai region. The 0 C isotherm will stretch from the southern part of Guizhou to the northern part of the South China.

According to the weather forecast on Thursday by Weather China, from north to south, the highs in the majority of Northeast China’s Heilongjiang Province and the middle and eastern parts of Inner Mongolia will be lower than -18 C. Temperatures in most parts of Northwest China, North China, and the Huanghuai and Jianghuai regions will remain below freezing, making them the “freezer compartment” of this “refrigerator” wave. 

Whereas in the southern parts of China, such as the Jiangnan area, Sichuan Basin, Chongqing and Guizhou areas, highs will remain at 10 C or below, while highs in South China and Southwest China’s Yunnan Province will remain above 10 C. 

Since the beginning of December, the temperatures across the country have experienced roller-coaster-like temperature fluctuations. The national average temperature from December 1 to 13 was higher than usual, the highest of the same period in history. However, since December 14, affected by the large-scale cold wave, the temperatures have plummeted in most parts of the country, and the maximum daily temperature drop of some national weather stations has broken historical extremes.

Between December 14 and 17, a large-scale cold wave affected a vast area of the country with wide influence, long duration and large accumulative precipitation. The maximum temperature drop reached or exceeded 20 C in 95 national weather stations, among which the maximum temperature drop in Datong, North China’s Shanxi Province, reached 26.3 C.

While a warm winter was previously forecast this year, Ma explained that such extreme cold weather conditions will not necessarily overturn previous predictions. Before the impact of the recent cold waves, the southern part of the country, especially the Yangtze River basin, did experience warmer weather than usual. The overall average temperature in the next phase will decide whether this winter will be considered a warm winter, Ma said, noting that more attention should be paid to increasing extreme weather.

Since the strong cold wave gripped Northeast China’s Jilin Province on December 15, temperatures in the province have plunged to freezing. According to the Jilin Meteorological Service, the highest temperatures during daytime in Jilin on Thursday was between -20 C and -16 C and the lowest temperature was forecast to be between -30 C and -27 C, with temperatures in some mountainous areas in the southeastern part of the province dropping as low as -32 C. 

On Wednesday, the Jilin Meteorological Service forecast that temperatures in the middle and western parts of the province will rise starting Saturday while the eastern part of the province must wait to Sunday to see a rise. 

In East China’s Shandong Province, the coastal cities of Yantai and Weihai have suffered snowstorms since December 15, with a blizzard pouring 35.6 millimeters of snow on the Wendeng district in Weihai. 

The Shandong Meteorological Bureau has forecast snowstorms or blizzards in Yantai and Weihai from Wednesday to Friday with accumulated snowfall reaching 35 millimeters or above. 

Meanwhile, East China’s Shanghai recorded the chilliest day of December in four decades with temperatures expected to remain below zero all day throughout the city, the Shanghai Meteorological Bureau said, noting the city’s lowest temperatures will reach -4 to -6 C in the city’s suburbs. 

Local meteorological experts have forecast that the lowest temperatures will remain below 0 C in Shanghai between Thursday and Monday, possibly the coldest mid-December in the past four decades. 

The water in the West Lake in Hangzhou, East China’s Zhejiang Province, even froze over early Thursday morning as the temperature dropped to only -4 C, the NMC said in a post on Sina Weibo. 

Affected by the continuous low temperature, patients suffering from frostbite are also increasing, and some hospitals have set up frostbite clinics. 

A doctor from the dermatology department of Zhongda Hospital Southeast University told the Health Times – affiliated to People’s Daily – that the recent frostbite patients mainly suffer from frostbite on the hands, feet, ears, face and other parts. Most of them had stayed outdoors for a long time, such as riding electric bikes and doing outdoor work. Some children suffer from ear frostbite due to playing outdoors.

The Philippines and Japan hope to hold a joint exercise under a new bilateral security pact next year, which Chinese experts said on Wednesday is a dangerous plan that could pose several threats to regional peace and stability.

Gilberto Teodoro, Defense Secretary of the Philippines, said on Tuesday that a joint exercise by Philippine and Japanese troops under a proposed reciprocal access agreement (RAA) between the two countries could be held as early as next year, Kyodo News reported on Tuesday.

The talks on the RAA will go "very smoothly" and be signed at "the soonest possible time," Kyodo News quoted Teodoro as saying.

The RAA will not only facilitate joint defense drills but also contain a data sharing mechanism, Teodoro said, with Kyodo News noting that Japan is supplying coastal surveillance radars to the Philippines, and that the Philippines has a similar security agreement with the US and Australia.

Teodoro then pointed to China, saying that the pact is significant in order to make the Philippines and Japan more secure, and thanked Japan for "condemning China" for an event on October 22 in which Philippine vessels trespassed into waters off China's Ren'ai Reef in the South China Sea and intentionally caused bumps amid countermeasures by the Chinese side.

China should stay on high alert over the recent military cooperation attempts between Japan and the Philippines, because they are not simple bilateral cooperation, but can cause serious consequences to regional peace and stability, analysts said.

The Philippines knows that its own military capabilities cannot support its scheme of snatching Chinese islands and reefs in the South China Sea, so it is colluding with countries from outside the region including the US and Japan, a Chinese military expert who requested anonymity told the Global Times on Wednesday.

"It's like inviting wolves into the house," the expert said.

Song Zhongping, another Chinese military expert, told the Global Times that Japan is breaking its military restrictions by changing its principles on arms transfers and exporting weapons to foreign countries like the Philippines.

Japan also aims to contain China's development in concert with the US' Indo-Pacific strategy, Song said.

Using the Philippines and Japan as pawns, the US is strengthening its strategic encirclement on China through allies and partners along the first and second island chains, experts said.

Countries in the South China Sea region should be cautious over this situation of external interference, which could harm the main theme of cooperation and development that benefit all, analysts said.

Editor’s Note:
Whether the global economy can achieve recovery has become a hot topic of discussion in recent times. Along with this discussion, the growth prospects of the Chinese economy have become a global focus of attention. What potential does the Chinese economy hold for growth? Can it overcome short-term challenges and achieve long-term sustainable development? With these questions in mind, Global Times reporters Xie Wenting and Bai Yunyi (GT) recently interviewed Yukon Huang (Huang), a senior fellow with the Asia Program, formerly the World Bank’s China country director. 

GT: Recently there have been many discussions regarding China’s economy and its prospects. How do you view the prospects of China’s economic growth?
Huang: I think it’s not a short term issue. It’s not about this year. It’s about the next four to five years, because you’re talking about sustainable growth. You’re not talking about a short term economic cycle.
So the question is, can China grow at a reasonable rate for, let’s say, the next five years and beyond? I think the answer to this is it is possible. China still has significant growth potential. And if it actually addresses the right issues, it could grow a 5 or 6 percent on a sustainable basis. 

GT: You mentioned that the Chinese economy still has significant growth potential. What is the potential that you refer to?  How can this potential be realized? What are your suggestions for China’s economic transformation and development?
Huang: Sustainable development not only means environmental sustainability, but also financial sustainability. In recent years, housing construction has been one of the main drivers of China’s economic growth, but given China’s population growth, it is difficult for real estate to play this role in the future. Exports will also play a smaller role now that economic growth is slowing in both the United States and Europe, and so is their demand for Chinese manufactured goods. 

China does have several ways of increasing growth significantly on a sustainable basis without requiring more funding from the government. The critical question is not monetary expansion, or more expansionary policies, or lower interest rates, or more credit flows. It’s what can be done to increase growth without requiring more money. That’s the key question.

There are two issues that we need to be focused on. One has to do with consumption. The key question is, how do you increase consumption on a prudent basis, not just for 3 months, 6 months, or a year, and how do you increase consumption without requiring more money from the government? Now, in other countries, the answer is there isn’t any possibility to do this. But in China, you could actually increase consumption on a consistent, sustainable basis without requiring government support. It has to do with the household registration system, hukou.

So how can hukou reform provide a huge boost to consumption? The answer is, if you look at the major cities like Shanghai and Shenzhen, about 30 to 40 percent of the population and workforce do not have a local hukou. These households consume about 30 percent or less of their income compared to residents with local hukou registration as they spent less in housing, cars, and education. If more big Chinese cities are able to relax their hukou policies to a certain extent, the consumption of these households will increase significantly. They would consume 30 percent more. This would increase GDP growth by 1.5 to 2 percent annually. Think about that:1  to 2 percent every year for the foreseeable future, without any cost to the government. You don’t have to provide tax breaks. You don’t have to provide any subsidies. It would basically be driven by household consumption.

GT: In China, household registration (hukou) is not only an economic issue but also involves social concerns. Do you think further relaxing the restrictions on obtaining household registration in major cities is feasible?
Huang: The government has signaled this even in the reform programs that were just launched, which talked about rapidly reforming the hukou policy. Hukou reform did not matter 10 years ago because people moved to the cities. When they moved to the cities, they made a lot more, they consume more, even though they didn’t have local hukou registration. When they had a higher income, people would spend more. So consumption increased rapidly in the past, even when you didn’t have hukou reform.

But now that urbanization has largely occurred, and it’s not increasing, rural migrants to big cities cannot be counted upon as much. You have to count on increasing the consumption of people who are already living in the cities. So that’s a completely different issue. Therefore, what needs to be done is the expansion of consumption among the population already living in cities.

GT: What other measures do you think can be taken to further unleash China’s growth potential?
Huang: First is the adjustment of government investment allocation. When I moved to China in 1997, approximately two-thirds of government investment was directed toward the coastal provinces, while one-third was allocated to the interior. However, around the year 2000, China initiated the development of the western regions, leading to increased investment in the interior, particularly in the far west. Presently, the situation has reversed, with two-thirds of state investment flowing into the interior, while only one-third is directed toward the coastal provinces.

This was rightly done because the government was trying to deal with the inequality of poverty, because most of the poor people were in the interior. So you want to provide them with more services. But today the situation is quite different. If we look at it from an economic perspective, investment in the interior is 40 percent less in returns than investment along the coastal and central provinces. If China were to achieve a balanced allocation, with 50 percent of resources directed toward the interior and 50 percent toward the coastal central areas, it could potentially result in a 1 percent annual increase in growth. Moreover, this approach would not impose any additional burden on the government as the expenditure would remain the same.

Besides, there needs to be an adjustment in funding support for state-owned enterprises (SOEs) and private enterprises. Currently, the return on assets for China’s SOEs is only about half that of private enterprises. Of course, a considerable portion of China’s SOEs fall within strategic sectors, and for these fields, continued financial support is necessary to foster their development. However, for a portion of areas that do not possess strategic value, a portion of the funds originally allocated to SOEs can be redirected to support more efficient private enterprises.

GT: Do you think that emerging economies, including China, can still become the engines of global economic development in the future?
Huang: If we examine the period from 2007 to 2020, developing economies and emerging market economies performed exceptionally well. A significant contributing factor to the higher growth rate of emerging market economies was the rapid expansion of China. China’s growth is closely intertwined with the growth and demand of emerging market economies, and one of the key drivers is the commodity market. When China experiences rapid growth, it stimulates the prices of commodities, minerals, and oil, which primarily benefits developing countries. China’s imports and exports have consistently increased over the last 15 years, even during the pandemic, unlike what occurred in the West. Consequently, China’s share of global exports reached record highs in 2022, despite the challenges faced by Western countries due to the pandemic, recession, and slowed growth. So when China’s trade is very strong, it drives up the trade prospects of emerging market economies. 

One thing that needs mentioning is, whether Europe can sell more consumption goods to China. That’s not the same issue for the EU depends much more on agricultural exports, service, and financial services. And that’s a different kind of issue. So, the emerging markets’ future is very much linked to China. Then the question is, well, Europe and United States recover fairly rapidly. Europe has a big problem because of its problems with Russia. So, one big issue in the future for Europe will be its economic future, which is actually dependent and is very much linked to China. Europe’s investment and Europe’s trade with China are much larger and much more closely linked than US trade investment with China.

It’s worth mentioning the role played by China-EU economic relations in this context. Europe is a producer of high-end consumer goods, whereas the US produces relatively fewer consumer goods. Such investment and trade relations between Europe and China are becoming even closer. If China’s economy thrives, Europe tends to exhibit a favorable economic performance as well. Thus, the outlook of the global economy and the strengthening of economic ties between China and Europe are closely interrelated. While some concerns arise due to political factors, my perspective is that ultimately, Europe will not take such a stance. Furthermore, given its diminishing economic connections with Russia, Europe needs to increase links with China.