CiCM 1st September 2023

NEWS IN CHINA

AI-powered LLM opened to the public: On September 1, a few major players in the Chinese technology space opened their artificial intelligence powered large language models (LLM) for people after receiving approval from the Chinese authorities. This move will promote technology advances and commercialisation of generative AI. The early movers to make their LLMs available to the public are Baidu Inc, ByteDance, Baichuan Intelligent Technology, SenseTime, Zhipu AI, MiniMax and two research institutes the Chinese Academy of Sciences and the Shanghai Artificial Intelligence Laboratory. Baidu’s ChatGpt like LLM Ernie Bot was available to download from various app stores through its official website. Robin Li, co-founder and CEO of Baidu conveyed that through the Ernie Bot, Baidu will collect massive valuable real-world feedback, helping the Bot to enhance the user experience. In July, the Chinese authorities also issued 24-point guidelines to manage generative AI services. Companies which are providing the AI services are also supposed to submit security assessments and obtain necessary approvals from the authorities.

Air China and Rolls-Royce Joint venture ceremony in Beijing : Air China and the British engineering giant Rolls-Royce came together for a joint venture to create an aero engine maintenance, repair and overhaul (MRO) facility in Beijing on September 1. The new joint venture, Beijing Aero Engine Services Company Limited (BAESL), is to provide MRO services on Rolls-Royce Trent 700, Trent XWB-84 and Trent 1000 aero engines to both the Chinese and international airline customers. Rolls-Royce and Air China hold 50 percent of the shares each. The MRO faculty will significantly reduce the long-distance transportation of aero engines for maintenance, helping the parent companies to achieve their sustainability goals. BAESL is scheduled to commence its operations from 2026 and by the mid-2030s, it will serve up to 250 shop visits. China is the third largest market for Rolls-Royce and BAESL will be the first Rolls-Royce MRO facility on the Chinese mainland, fourth in the global network. According to the Company sources, Rolls-Royce powers fifty percent of the Chinese aircraft fleet, therefore making the venture essential for the development of Air China and the flight safety.

Shanghai easing up mortgage lending rules for buying houses: Authorities in Shanghai have issued a new regulation that first-home buyers would get preferential mortgage rates regardless of their previous credit scores. This move is targeted to spur a slowing housing market. From September 2, if a person or his dependent do not own property in the city of Shanghai, they will be considered as the first buyers. Shanghai would be the third first tier city after Guangzhou and Shenzhen to implement this policy of “recognizing houses but not loans”. According to Yan Yuejian, research director of E-House research institute, this policy is directed to include more home buyers into the identification standards for first time homes. In another development, People’s Bank of China and the National Administration of Financial Regulations have ruled that minimum down payments for mortgages will be cut to 20 percent for first time buyers and 30 percent for second time buyers nationwide.

China implements a new foreign state security law : In an unprecedented development, China decided to allow cases against foreign states in Chinese courts, aligning its stance on “foreign state immunity” with the west. For the longest time foreign states and their properties have been immune from the jurisdiction of courts in China. But according to the new law adopted by the Standing Committee of the National People’s Congress from next year private businesses involved in international trade would be able to register cases against the foreign entities. The law states that from January 1, 2024, sovereign states or entities authorised to act on their behalf that are involved in certain territorial infringements or commercial activities will no longer be immune from prosecution in China. As per another alteration in the Civil Procedure Law, embassies will be allowed to collect the evidence in foreign countries if required. It is almost certain that the law will also apply to Hong Kong as there was no explicit mention in the document but the 2011 Congo Judgement rules that city would follow the China approach on state immunity issues.

China and Nicaragua sign free trade agreement: China and Nicaragua signed a free trade agreement on September 1 after a year of negotiations. China’s Commerce Minister Wang Wentao and Laureano Ortega, adviser on investment, trade and international cooperation to the Nicaraguan President signed the agreement via video link. In 2022, China-Nicaragua bilateral trade valued $760 million which included products such as Nicaraguan beef, shrimp, coffee and mostly automobiles from China. The FTA will facilitate cooperation in the trade and access to the investment sector. Through this network, China and Nicaragua are planning to build stronger networks of economic and trade cooperation eventually benefitting other South American nations as well. Nicaragua is China’s fifth FTA partner in South America after Chile, Peru, Costa Rica and Ecuador. According to Dong Jingsheng, deputy director of Peking University, China and Nicaragua are at different stages of development with immense potential of complementarity in the industrial sector and diverse resources while Nicaragua exports its high quality agricultural and aquatic products, China will offer its computers, motorcycles and communication equipment. The FTA will also make 60 percent goods in bilateral trade tariff free.

SOCIAL MEDIA CHATTER IN CHINA

Woman dumps newborn in the dustbin : Video footage of a woman giving birth to a child inside a lift and dumping the newborn into a dustbin has gone viral on social media in China. Surveillance camera shows the woman carrying luggage into a lift of the residential community in the city of Chongqing on August 2. Later, she bends down and pulls an infant from the bottom of her trouser leg, then calmly cleans herself and the baby from the tissues. The infant was found later by the residents and sent to the hospital. According to the hospital staff, the infant was picked by her mother and grandmother. The video of this incident has gained 7.6 million views on Douyin sparking a wave of condemnation. A user commented, this behaviour is worse than a beast. Another user wrote that she abandoned the baby once and she would do it again. However, it was not the first time an infant dumping video is going viral on social media rather it has become regular. In July, an older man from Sichuan province was also detained for throwing his twin granddaughters onto the street. In another incident, a man in Liaoning province was detained for leaving his three-month-old daughter in an alleyway and leaving a note saying that he could not afford to raise the baby.

INDIA WATCH

With another FTA agreement in South America, China has taken one more step in deepening the relations in the region. By 2022, the trade volume between China and South America was stable at $450 billion. In contrast, India merely clocks a trade volume of $50 billion with automobiles and pharmaceuticals constituting a major chunk of it. In a recently concluded, India-LAC conclave, the external affair minister, S. Jaishankar advocated for the goal of $100 billion trade volume by 2027. The EAM suggested four pillars to intensify trade and economic engagement including supply chain diversification with resilient networks, diversified production, food and energy security. There is a huge market for Indian pharmaceuticals, Information Technology and automobile industry in South America. India needs to devise a strategy to deal with South America as a whole by deepening its relationship with groups such as the Central American Integration System (SICA), the Community of South American and Caribbean States (CELAC), the Southern Common Market (Mercosur), the Pacific Alliance and Andean Community. Another goal would be to put its political will in signing free trade agreements. There is a lot to learn from each other’s experiments with democracy and socialism as well. The recent entry of Argentina in the BRICS also signifies the increasing role South American countries would play in India’s geopolitical calculus.

Prepared By

Rahul Kheswa

Rahul Kheswa has recently completed his MA in East Asian Studies with a specialisation in China from the University of Delhi. For his BA, he majored in History and Political Science. During his MA, he learnt elementary Mandarin Chinese through elective course. Rahul’s research interest lies in Chinese society and continental philosophy.