China This Week: Bangladesh Airbase Proposal, US Bans Staff-Local Ties, Apple Hit by $300B Sell-Off
This week's Beyond the Great Wall provides an overview of key developments within China, along with insights into its foreign affairs.
China Quote 🗩
“We’re going to continue to honour the one-China policy, as stated in
the Taiwan Relations Act, also backed up by the three communiques and
the six assurances,”
David Perdue, President Trump's Envoy Pick for Beijing
Economic Activity🏦
Top Chinese banks' profits stagnate, margins shrink as economy weighs
Ziyi Tang, Selena Li and Engen Tham write in Reuters that China’s top state-owned banks posted flat profits and declining margins in 2024, with ICBC and CCB reporting minimal growth amid economic slowdown, property sector woes and deflationary pressure. Net interest margins fell across all five major lenders. While Beijing’s ¥500 billion recapitalisation may ease bad debts, smaller banks remain under strain.
3 Ways Multinationals Can Invest in China—Without Damaging Their Valuation
Michael Mankins and Jason Ding write in Harvard Business Review that multinational firms heavily exposed to China suffer a “China discount”, trading at 45% lower valuation multiples than peers. To mitigate this, MNCs should: expand via local M&A, own only essential assets to unlock capital, and consider carving out China operations to enable localisation, flexibility, and local investment.
China’s export boom sparks record number of trade challenges
Financial Times reports that China faced 198 trade investigations in 2024—double the previous year—as its surging exports, driven by weak domestic demand, flooded global markets. Nearly half of all trade measures reported to the WTO targeted Beijing, raising tensions with trading partners. Economist Lu Feng suggests rebalancing China’s economy could ease international friction.
Inside China🐉
China puts scientist in charge of Communist Party’s human resources department
William Zheng writes in SCMP that nuclear safety expert Li Ganjie has been appointed head of the Communist Party’s Central Organisation Department. His elevation underscores Xi Jinping’s push to place technocrats in key posts, aligning cadre promotion with China’s goal of technological self-reliance and environmental advancement.
Xi Jinping is investing in China's science and technology research as Trump is gutting America's research foundations
Bill Bishop writes in Sinocism that Xi Jinping’s speech at China’s top science conference underscores a push to make China a global tech powerhouse by 2035. Xi prioritises innovation, talent, and global leadership, contrasting starkly with Trump-era cuts to US research. China sees high-tech as the battlefield of global power competition.
China and the World🌏
China and India Haven’t Patched Things Up on the Border
Sushant Singh writes in Foreign Policy that despite diplomatic niceties marking 75 years of ties, India-China border tensions remain unresolved. Modi’s conciliatory remarks contrast with persistent military deployments and Chinese inflexibility. Beijing's overtures come with tough conditions, exposing India's constrained leverage and the risks of acquiescing to China's regional dominance amid a changing global order.
Yunus Invites China To Build Airbase In Bangladesh’s Lalmonirhat District
Salah Uddin Shoaib Choudhury writes in EurAsian Times that Bangladesh’s interim leader Muhammad Yunus proposed allowing China to build an airbase in Lalmonirhat during his recent Beijing visit. Sources say a Pakistani firm may act as subcontractor. Yunus also secured Chinese investment in ports and water management projects, marking a significant geopolitical shift away from India and towards China and Pakistan.
China, Japan, South Korea will jointly respond to US tariffs, Chinese state media says
Reuters reports that Chinese state media claimed China, Japan, and South Korea agreed to a joint response to U.S. tariffs following a trilateral economic dialogue. However, Seoul called this "somewhat exaggerated," and Tokyo denied any such discussion. The three countries did agree to deepen supply chain cooperation and accelerate free trade agreement talks.
EU, China and Canada warn U.S. of countermeasures, as trade war heats up
Rebecca Falconer writes in Axios that the EU, China, and Canada are preparing countermeasures following President Trump's sweeping new tariffs, including a baseline 10% tariff on all U.S. imports and higher levies on key partners. EU chief Ursula von der Leyen vowed retaliation, while China and Canada pledged to protect their economic interests, warning of a deepening global trade war.
China detains 3 Philippine nationals on suspicion of spying
Vanessa Cai writes in SCMP that China has detained three Philippine nationals suspected of espionage, days after Manila arrested several Chinese citizens for spying. State media alleged the trio had collected military intelligence under instructions from a Philippine handler. The move escalates tensions amid ongoing disputes in the South China Sea and tit-for-tat spy allegations.
US bans government personnel in China from romantic or sexual relations with Chinese citizens
Dake Kang, Matthew Lee and Didi Tang write in AP News that the U.S. has implemented a Cold War-style “non-fraternization” policy barring diplomats and staff in China from intimate ties with Chinese citizens. Enacted in January, the rule aims to counter Chinese intelligence tactics and applies to all U.S. personnel in China, excluding those in pre-existing relationships.
China Initiative 2.0? Raids on scientist Wang Xiaofeng revive spectre from first Trump era
Holly Chik and Dannie Peng write in SCMP that FBI and Homeland Security raids on Chinese-American scientist Wang Xiaofeng’s homes have reignited fears of racial profiling under a revived “China Initiative.” Though no charges have been filed, the academic community fears a renewed crackdown on Chinese-origin researchers, particularly in AI, semiconductors, and data privacy.
Apple sheds over $300 billion in tariff-fueled sell-off, notches worst drop since March 2020
Alexandra Canal writes in Yahoo Finance that Apple shares plunged over 9% following President Trump's sweeping reciprocal tariffs targeting 185 countries. The iPhone maker lost over $310 billion in market value amid concerns over its dependence on China, where 85% of iPhones are made. Other “Magnificent Seven” tech giants also saw major losses, wiping out more than $1 trillion in market cap.
Tech in China🖥️
China's SiCarrier emerges as challenger to ASML, other chip tool titans
Cheng Ting-Fang and Lauly Li write in Nikkei Asia that Huawei-linked Shenzhen SiCarrier Technologies is developing domestic alternatives to advanced chipmaking equipment from ASML, Applied Materials, and others. Backed by the Shenzhen government, SiCarrier aims to ease China’s supply chain bottlenecks under U.S. export curbs by producing tools across critical fabrication processes, including lithography and etching.
Huawei's automotive revenue up nearly sixfold despite U.S. clampdown
Cheng Ting-Fang writes in Nikkei Asia that Huawei’s automotive business soared nearly sixfold in 2024, with total revenue rising over 22% to ¥862.1 billion. Despite a 28% drop in net profit, the company ramped up R&D spending to a record 20.8% of revenue, highlighting its pivot towards future-oriented sectors amid persistent U.S. sanctions.
De/Cypher Data Dive📊
China will now face an effective tariff of 54%, with the new 34% tariff being added to the existing 20% tariff. Chinese exporters, along with those from other countries, will be subject to a 10% baseline tariff under the new 34% levy on nearly all goods exported.
Image of the Week📸
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