happy Tuesday everybody welcome to another episode of China update where I provide you with the most up-to-date political economic and geostrategic analysis on the world's number two economy my name is Tony let's jump in over the weekend we did two videos discussing very concerning online reports of huge outbreaks of hmpv a respiratory virus causing flu like symptoms across China with stories of hospitals and crematoria overwhelmed hmpv part of the same family as respiratory virus RSV has been known since 2001 it primarily circulates in colder seasons and can cause complications such as bronchitis and pneumonia especially
in the elderly young children and immuno compromised individuals in my weekend videos I warned that we are quite blind on the ground in China and it is hard to verify the reports especially considering the sensitivity of such things within China itself as such we needed to cautiously follow developments closely after several days of speaking to dozens of contacts across China many of whom I connected with during my coverage of China during the zero covid years I can cautiously make a few points here one China is indeed seeing higher than normal rates of people experiencing flu
like symptoms but that to the initial online reports of seriously overwhelmed hospitals across the country with sites similar to what we saw during the co days appear to be largely EXA exaggerated and in some cases sensationalized though some hospitals including in Beijing do appear to be strained by the Numbers however the hmpv spread is a real thing and neighboring countries from Japan to Vietnam to India are watching the situation closely as it spreads to their own populations indeed cases have been found in neighboring countries already including now Malaysia and of course with memories of the
pandemic still fresh in many Minds many experts in these countries do not trust Beijing statements on the nature of the spread with that said what are Health experts in these neighboring countries saying unlike covid-19 hmpv is not a novel virus Global immunity exists due to Prior exposures making pandemic levels spread unlikely however its impact particularly on vulnerable groups remains notable currently there is no vaccine or antiviral treatments for hmpv though research is ongoing experts emphasize the importance of preventive measures to manage transmission practicing good hygiene or staying home when sick are good strategies these simple
actions can protect high-risk groups and reduce the virus's spread epidemiologists caution that currently the world is not facing a major health emergency Jaclyn Stevens an Australian epidemiologist for example expressed yesterday quote The increased prevailance is likely the normal seasonal increase seen in Winter the reported High prevailance amongst children also Al reflects what we know about the virus it is a common cause of childhood respiratory illness end quote so it appears that China is just experiencing a particularly nasty winter flu season and there currently is not any reason to worry too much if the facts on
the ground change however if things become more serious I continue to speak to my contacts in China and do visits myself here then we will discuss the situation again immediately here on China update so make sure you're subscribed if you want to keep on top of these updates specifically for now however let's continue with regular developments Chinese technology giant 10 cents us listed shares plummeted nearly 10% in trading on Monday following the pentagon's announcement designating the Chinese technology company as a quote Chinese military company end quote this move is part of Washington's ongoing efforts to
counter China's military expansion by targeting entities allegedly linked to its military civil Fusion strategy 10cent owner of the widely used messaging app WeChat was among several firms added to a defense department Blacklist citing indirect or direct ties to the Chinese military the pla or people's Liberation Army the list unveiled in a federal document aims to curb the flow of advanced technology to China's military which the Pentagon alleges benefits from civilian Industries like technology firms universities and research programs despite the designation being on the list does not carry immediate iate legal consequences but poses significant reputational
risks 10 cense spokesperson called the inclusion quote a mistake end quote asserting the company has no military affiliations while the designation has no direct impact on its operations tensent pledge to work with the Department of Defense to resolve the what it called misunderstanding other notable additions to the list include catl the world's largest ev battery maker and key supplier to Tesla as well as chipmaker Chang Technologies and drone maker alel robotics catl like 10cent disputed the classification emphasizing its nonmilitary focus of course as regular viewers know it has been long known that many of these
large national champions that operate in the civilian or civil realm in China do have varying degrees of formal and informal connections to the state and in some cases the military starting next year companies on the list will face restrictions on business with the Pentagon escalating to a complete procurement ban by 2027 these measures underscore heightened us China tensions as both Nations impose export controls on critical Technologies we will return to this later in today's episode for now let's move to the next development which is related to the economy in recent days China's top stock exchanges
have met with foreign money managers I should point out the top exchanges are Shanghai and Shenzhen and investment Banks to explore ways to boost sentiment among International investors following the worst start to the year for the markets since 2016 Beijing leadership always talks about getting a good start to the new year but in the first three trading days of 2025 the PLC stock markets have gone down every day the discussions come after a shift in monetary and fiscal policy aimed at easing economic conditions which has raised expectations for the country's economic Outlook in separate statements
the Shanghai and Shan stock markets highlighted that the meeting involved 16 overseas institutions which expressed optimism about the government's resolve to stabilize growth participants suggested that more presentations on Chinese policies and Road shows by Blue Chip companies would help foreign investors better understand the country's economic Dynamics the exchangers reported a consensus that a combination of existing and new policies would strengthen longterm investor confidence that's what they said at least now despite this wouldbe positive outlook the Chinese stock Market has faced a lot of volatility the CSI 300 index which tracks onshore stocks fell nearly 3%
on the first trading day of the year continuing a trend of uncertainty however foreign investors remain important players in China's Market holding significant stakes in Yen denominated stocks meanwhile in a move that likely will not help with Market confidence whether with International investors or domestically UK based Reuters reports today citing three unnamed sources that China's main stock exchanges again Shenzhen and Shanghai asked some large mutual funds in the country to restrict stock selling at the start of the Year quote at least four large mutual funds received calls from the Shanghai and Shenzhen stock exchanges on
December 31st and January 2nd and 3rd asking them to buy more stocks than they sold each day end quote not a positive sign the markets opened down again today with the CSI 300 now down almost 6% over the last five trading days next up we have one more development to cover but just quickly if you're getting some value from today's episode of China update don't forget to hit the like button liking sharing and especially subscribing is a tremendous help for the channel it is just me making these every day and keeping the algorithm happy is
the only way in which the channel can grow and be shown to new people so this is a tremendous help this channel is also primar supported by you subscribers I'm often asked in the comment where do you get your funding from there are one to two sponsored features per month then the rest of the income for the channel the majority of the income for the channel comes from direct subscriber support so if you'd like to support the channel patreon and buy me a coffee links are in the description below thank you so much everybody for
the ongoing support next up and finally for today we continue with our coverage of the ongoing us China technology and trade competition China has escalated its economic countermeasures against the US starting 2025 by blacklisting 10 American defense contractors as so-called unreliable entities and barring 28 others from purchasing dual use components that could serve civilian and Military purposes very similar to what we just saw with the Pentagon in the US the move follows increased us arm sales to Taiwan under the Biden Administration and serves as a warning to president-elect Donald Trump about beijing's willingness to protect
its national interests the targeted companies include defense Giants General Dynamics lockhead Martin and Ron's RTX along with Boeing's defense space and security unit While most of these firms conduct limited business with China The Blacklist signals the tools Beijing could deploy more broadly against American corporations in future conflicts indeed Elon Musk who is very close to the upcoming Trump Administration sold 40% of Teslas in China in 2024 beijing's actions reflect its long standing opposition to us armed sales to Taiwan General Secretary Xi Jinping reiterated the stance in his new year's address emphasizing the inevitability of China's
reunification with Taiwan to use his words despite beijing's warnings us administrations have consistently provided Taiwan with defensive Weapons Under the 1979 Taiwan relations act the latest sanctions could Prelude further economic confrontations particularly As president-elect Trump has vowed to increase pressure on China through tariffs and a transactional approach to Taiwan experts warned that that beijing's ability to restrict $477 billion in Goods exported to G7 Nations and jeopardize $460 billion in foreign investments could have significant Global repercussions though China must also weigh the impact on its own domestic economy indeed I would personally argue that as exports
remain one of the only bright spots on China's growth performance over the last 24 months Beijing would be wise to risk undermining its trade especially considering it is facing trade conflict with major Partners including the US the EU and others Bill Rice a former Commerce Department official and now a so tier in international business at the center for strategic and International Studies a Washington based Think Tank says that these sanctions are mostly symbolic expressing over the weekend quote I think that's why they're doing it it is a shot across the bow these are things that
are designed to remind the current Administration in the next one that they have a lot of influence on the supply chains and they have a lot of influence on the global economy in part by virtue of their interaction with us end quote meanwhile China has also employed broader economic strategies in recent years and this escalated in recent days too with China stepping up scrutiny on the export of Advanced Technologies used in producing battery materials aiming to safeguard its dominance in the global battery and electric vehicle supply chain over the weekend the Chinese Ministry of Commerce
proposed adding specific lithium refining and Battery chemical Production Technologies to its list of controlled exports inviting public feedback on the draft regulations until the 1st of February the move reflects beijing's intent to protect critical Innovations developed during its Ascent as a leader in battery production the proposed restrictions focus on emerging methods like direct lithium extraction and advanced chemical compounds used in carod production which are vital for battery performance analysts see this as a strategic effort to Shield China's proprietary Technologies from International competitors particularly amid escalating trade tensions with the United States and others while the
controls are limited to high-end products they could affect future overseas Investments particularly joint ventures with foreign firms analysts at City Group noted the measures aimed to preserve China's leadership in premium lithium ion phosphate lfp batteries rather than broadly restricting exports the announcement follows China's recent bans on exporting materials with Hightech applications including gallium and geranium AS Global competition intensifies these moves underline China's strategic approach to retaining its Edge in critical Industries while responding to mounting pressures from Western Nations okay that is today's episode of China update thank you so much everybody for watching have a
good Tuesday and I will see you all tomorrow
