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China Now is a show that explores the past and future of the Asian Giant.
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NewsTranscript
00:00Hello, TeleCity English presents a new episode of China Now, our media's production that
00:14showcases the culture, technology, and politics of the Asian giant.
00:17In this first segment, we are going to start with the Chinese people that now have their
00:22own version of straddling, also Chinese Navy responding to provocations from Philippines.
00:27By why is China calling on the international community to help Sudan over its humanitarian
00:32crisis and more? Let's see.
00:45China Current is a weekly news talk show from China to the world. We cover viral news about
00:51China every week and also give you the newest updates on China's cutting-edge technologies.
00:57Let's get started.
01:06Welcome to China Current, your weekly news report on what's happening in China. I'm Lisa.
01:12In this episode, the Chinese people now have their own version of straddling. China called
01:18for American athletes to take more anti-doping tests. The Chinese Navy has responded to provocations
01:24from the Philippines. China calls on the international community to help Sudan alleviate
01:30its humanitarian crisis. The British Foreign Secretary plans to visit China. Let's start
01:36with the news that might worry Elon Musk the most. On the 6th of August, a Long March-6A
01:42rocket lifted off from the Taiyuan Launch Centre and carried 18 satellites into orbit.
01:48This kicks off China's ambitious project called Thousand Sails. In 2024, the project plans to
01:55launch 108 more satellites with a goal of deploying 648 satellites in the first phase.
02:02By the end of 2030, the network will offer global coverage with the ultimate aim of connecting
02:08mobile phones worldwide via 15,000 satellites, allowing you to browse TikTok in the middle of
02:14the Sahara Desert. The program is operated by Shanghai Spacecom Satellite Technology Limited
02:21and is not just about reaching remote areas. The Thousand Sails network will also enhance
02:27internet speed in regions that already have coverage. For example, satellite communication
02:33from Shanghai to New York over a distance of about 150,000 kilometers will have a latency
02:40of around 15 milliseconds. That is faster than submarine cables, which relies on multiple routers
02:46and undersea cables. The Thousand Sails project is also a more economically friendly method for
02:53developing countries to enjoy faster internet. Currently, communication base stations cover less
02:59than 6% of the global surface area. Although 5G internet is faster, the surface area provided by
03:06a 5G base station is smaller than a 4G base station. Connecting the entire world with 5G
03:13wireless network might require 10 million base stations, costing around US$220 billion
03:21in construction and US$21 billion annually in electricity fees. However, providing global 5G
03:28network service via satellite is much cheaper. For example, the second-generation Iridium satellite
03:34network costs US$3 billion and has a lifespan of 10 to 15 years and an annual depreciation cost of
03:43approximately US$300 million. China's Thousand Sails project and SpaceX Starlink plans are similar
03:50in function but have many differences. For instance, to ensure stronger 5G network signals received by
03:56mobile phones, the Thousand Sails project will lower the satellite network altitude to 300 to
04:03500 kilometers, while Starlink satellites orbit at an altitude of 550 kilometers. Additionally,
04:10all 18 satellites launched in the first batch were deployed by the Shanghai Engineering Center
04:16for Microsatellite. According to Cao Caixia, the project's chief designer, a typical satellite takes
04:23about three to five years from component procurement to satellite production, and now it
04:28can be accomplished in under two days on Shanghai's fully automated production line, which can produce
04:35over 300 satellites annually. This urge to speed up satellite production is not only driven by the
04:41desire for global connectivity but also by the pressure from the United States. Low Earth Orbit
04:47can accommodate up to 60,000 satellites and SpaceX Starlink plans to launch 42,000 of them.
04:55Under the International Telecommunication Union's first-come-first-served rule, this could limit
05:01options for non-American satellites, so the race is on to ensure that future global users
05:08have choices beyond US-controlled networks. Fortunately, this is not the first time China
05:13has faced competition to ensure fair resource distribution. In 1993, the United States agency
05:19claimed that the China-based container ship Yinghe was carrying chemical weapon materials to Iran.
05:26As a result, the GPS signal in that area was blocked, leaving the ship stranded on high seas
05:32for 33 days without supplies, including food and fresh water. A subsequent inspection by a joint
05:39Saudi-United States team concluded that the cargo did not contain any chemical weapons precursors.
05:46However, the US government stated that there would be no apology. In 2020, China completed the
05:52Beidou Network, a constellation of satellites forming a global navigation system to challenge
05:58the monopoly of the US government-owned GPS. Moving on, Chinese athletes won the same treatment for
06:04their American opponent on the doping issue. During the Paris Olympics, Chinese athletes faced
06:10an unexpected challenge. Each swimmer was subjected to an average of 5 to 7 urine tests per day,
06:18with just a few hours between each test. Over the course of 10 days, this rigorous routine
06:24has resulted in a staggering 200 tests, averaging 20 tests per day. The World Anti-Doping Agency
06:31required frequent testing in high-risk areas, typically three times a day for 75% of athletes.
06:38However, for Chinese athletes, the frequency has far exceeded the standard, with conservative
06:44estimates suggesting more than double the usual requirement. Additionally, as many as 95% of
06:51Chinese athletes have been tested. In this context, the concept of fairness becomes fairly questionable.
06:58On the 8th of August, the China's Anti-Doping Agency pointed out that the United States has
07:02never issued warning to its athletes about potential contamination from meat. Despite
07:08hundreds of positive Tremblone tests worldwide in recent years, only a small number of US athletes
07:14have faced sanctions, often escaping punishment based on claims of meat contamination.
07:20Knighton is not the only athlete who has been cleared by the United States Anti-Doping Agency
07:26under unusual circumstances. Gil Roberts, an American Olympic champion in relay race,
07:32was exonerated in 2017, claiming his positive test was caused by kissing his girlfriend.
07:39However, Roberts tested positive again in 2022, resulting in a 16-month suspension.
07:46The president of WADA has stated that the United States is one of the world's largest markets for
07:51illicit steroid and performance-enhancing drugs. And according to a recent WADA statement, 31% of
07:59US athletes were not sufficiently tested in the 12 months leading up to the Tokyo Games.
08:05Except for the American athlete doping issue, the Philippines is also on the radar. On the 7th of
08:11August, the Philippines conducted a joint military exercise with the US, Canada and Australia in the
08:18South China Sea. During the third such exercise within the past 10 days, a joint statement claimed
08:25that the exercise was intended to address common maritime challenges. Western media outlets have
08:31been quick to highlight the participation of four countries in this drill. However, the reality on
08:37the water was different. The three Chinese destroyers shadowing the exercise noted that
08:42only four ships actually participated. Meanwhile, China also organized its navy and air forces to
08:49conduct a joint patrol near Huangyan Island in the South China Sea. Unlike a similar exercise in April,
08:56Chinese state media did not disclose the specific region of this drill, giving Philippine navy a
09:02chance to practice the recognizer's skills. Considering that China's South Sea Fleet has
09:07more than 120 warships, this test may not be too challenging. The crisis in the South China Sea
09:14may be under control, but Sudan's humanitarian crisis continues. On the 6th of August, China's
09:21representatives spoke at the UN Security Council and emphasized the humanitarian situation in Sudan.
09:28With the conflict in Sudan stepping into its 16th month, China has noted the recent reports by the
09:35IPC Famine Review Committee and is deeply concerned about the humanitarian situation in Sudan,
09:41particularly the severe food crisis highlighted in the report. Since the outbreak of armed conflict
09:48in Sudan, the Chinese government has provided emergency humanitarian assistance worth US$1.37
09:54million, including 939 tons of rice. China called on the international community to take
10:02more concrete action, adding that these actions should avoid using humanitarian assistance and
10:08food security as a tool for pressure or sanctions. Next, let's focus on another international news.
10:15Following the visit of Italian Prime Minister Giorgio Meloni to China at the end of last month,
10:21the UK's new foreign secretary David Lammy also plans to visit China. According to Bloomberg,
10:28on 6th of August, Lammy is considering a visit to China as part of the new Labour government's
10:35effort to recalibrate UK-China relations. He met Chinese Foreign Minister Wang Yi in Laos
10:42at the end of July. Both of them expressed a desire to promote long-term communication.
10:48The UK government has shown its interest in mending relations with China a month ago.
10:53Before becoming the Prime Minister, Keir Starmer said his government would carry out what he
10:59described as an audit of UK-China ties as one of the first things that we will do.
11:05However, just last month, the new head of the UK army claimed they're getting prepared to fight
11:10a war with China, Russia or Iran in three years. So, the US government has to decide which agenda
11:16to prioritise if it wants to achieve a three-year trade and investment plan just like Italy.
11:22And that is all for today. Thank you for watching this episode of China Currents. If you have any
11:27thoughts or comments about our show, please reach us at the email address below. We look
11:32forward to hearing from you and see you next time.
11:34We'll go for a short break but we'll be right back. Stay with us.
12:05Welcome back to China Now. In this second segment, we have Thinkers Forum with Di Dongsheng,
12:10Professor and Vice Dean of the School of International Relations of the Ramin University
12:15of China and Heiko Berts, Economics Professor of the Neenor Business University in the Netherlands,
12:21talking about if China's economy has reached its peak. Let's have a look.
12:34Hi, Professor Di. Thank you for having this meeting and I'm looking forward to our discussion to come.
12:54My pleasure.
12:55The short-term economic development is driven by, we call that total demand in the economy,
13:06and therefore you have a sort of cyclical pattern of economic growth. Sometimes it is 4%,
13:13sometimes it is 7%, but maybe in the longer term, it is on average 5%. And so, if you are talking
13:21about whether the economy peaked or not, then I think the focus should be a little bit more
13:29on the longer term. So, what are the longer-term drivers behind economic development?
13:36Then you talk about opening up, then you talk about education, technological advancement,
13:42innovative behavior, and all these factors. And then I think you may come to another conclusion
13:50that still there is a lot of potential for the Chinese economy to continue economic development,
13:59maybe not based on labor force, maybe not based on all kinds of easy drivers,
14:07but on elements like, again, innovative behavior, productivity, efficiency,
14:13and I think there is still some room for that.
14:17Obviously, I agree with what the professor said. As you mentioned, in the short term,
14:24economic performance is driven by demand, but long-term speaking, it is driven by investment.
14:33So, it is related to competitiveness, and global competitiveness is related to your investment
14:40on which sector, and whether it is efficient, whether it is related to the technology improvement.
14:48But between them is the debt. The short-term economic growth is driven, basically,
14:56if we would, it is driven by the debt. In the past several decades, the whole world economy
15:05is driven by the debt, especially by the U.S. debt. The whole U.S. nation is either the public sector
15:12or the private sector or the company sector, or the financial sector. They expand their debt,
15:18and the whole world economy is falling, falling to ramp up. And China benefits from
15:26the growth of the U.S. debt, because as we see that some of the Japanese-owned or Korean-owned
15:36or American-owned business is moving, is diversifying their investment, diversifying
15:43the purchasing of the supply chain from mainland China to some other areas like Southeast Asia,
15:52or South Asia, or Mexico, and so on. That's something making some difference
15:59on China's economy in the recent years. But more importantly, if we look at the fact that,
16:11if we compare the economic size to the economy, to the United States and China,
16:18we have more than three times, three to four times of the size of the population.
16:26Yeah. And we have Chinese citizens who are working very hard, very diligent,
16:33at least as diligent, as hard as Americans. And we have a huge population, well-educated.
16:41So why the Chinese economy deal only 65% of the U.S.'s GDP? Yeah. That doesn't make sense.
16:51You have a bigger size of population, and the quality of the population is not poorer
16:57than the United States. So why your economy is much smaller? Yeah. So my explanation is also
17:04about the debt issue, de-globalization era, since 2008. And especially recently, the decoupling or
17:13de-globalization process is speeding up. So that hurt Chinese economy to some extent.
17:21But the problem is, I do not agree with the so-called China peak perspective. Because at
17:27the end of the day, it's not only United States, but also Chinese government could also borrow
17:33money, borrow more and more money, to put the money to improve the social welfare.
17:39From long-term speaking, I agree with Professor that still we are going to have another wave
17:49of long-term growth ahead. But the difference is, before it's driven by the U.S. expansion of debt.
17:58And in future, it should be driven by the Chinese growth of the debt.
18:03My impression is that as long as activities in the supply chain that does not create so much
18:12value added in the Chinese economy, it does not hurt the economy so much. Because you want,
18:20we want to get away from low value added assembly activities, clearly in the supply chain.
18:27So if we move on the smiling curve, away from assembly, and that these activities are moving
18:35away to Vietnam or to other places, I think that is even a positive element of the longer-term
18:43Chinese economic development. Since 1992, China introduced a lot of FDI from Southeast Asia,
18:54from Japan, Korea, and also from United States and Europe. It's a process of FDI coming to
19:05expansion the global supply chain, especially East Asian supply chain. And China was
19:13weaved into the smiling curve, as you mentioned. We were at the bottom, we were doing the
19:20processing and export, re-export industry. So the added value is really low. And hence,
19:27the Chinese people's salary and consumption is really low. That's something interrelated.
19:38But nowadays, as I mentioned, the quality of the population has improved dramatically,
19:45especially given the fact that every year we have nearly 10,000
19:54students and 60, maybe 60 percent from STEM disciplines. We have such a big,
20:04high level, or at least the middle level labor supply. But the reality is the demand for such a
20:13labor market is still structurally mismatched because we still have so many factories,
20:24but we cannot create enough jobs in the office buildings for these young kids.
20:30So hence, it's a natural process that China is graduating, I call it, graduating from this
20:38processing industry of the supply chain owned by the foreigners for global capital.
20:47So today, I'm happy to see that although the growth rate is relatively low, but the growth
20:55quality is quite high because China is doing a lot of progress in industries like car making.
21:08Not only EV cars, electronic vehicles, but also even traditional automobiles,
21:18mobile cars, traditional cars. Chinese technology and quality is substantially improving.
21:27So I can see that. And Chinese products are competitive globally.
21:33So that makes a huge difference. And we have other new products like chips, chips industry,
21:43although we were sanctioned. Nowadays, Huawei is making substantial improvement in this sector.
21:51And so I'm quite happy with the quality improvement of the Chinese economy,
21:59Chinese economy, and especially its manufacturing industry.
22:03Yeah, yeah, I fully agree with your point. And I would say in the West, we mostly we have the
22:11feeling that market forces will create these structural adjustments from low tech to high
22:20tech and that we have to give the freedom to the market and the market will result in
22:26in this type of developments. At the same time, I think what we see in emerging markets,
22:36mostly in Asia, is that of course, this may take too long. And you could even indicate that as a
22:43market failure and therefore you need government interference to make this transition happening
22:48from low skilled value added or low value added to much higher value added sectors like
22:55the electric vehicles. So I think it is quite logical from an economic point of view,
23:03that we see government interference to make this transition happening. On the one hand,
23:09we have the Western way of more or less creating economic development, which we may use the phrase
23:16of the Washington consensus, where we implement market forces and where we implement all kinds of
23:22liberalization and where you need to have a certain type of people in your system.
23:30Well, now we see clearly that we have differences worldwide and that we need to implement
23:37regional features in economic development systems. And you may refer to that as the
23:43Beijing consensus or the Mumbai consensus and also we have the South Korean growth model.
23:51And I think we need to emphasize that this Washington consensus is out of context today,
24:03also in Europe, because we more and more think that a big market also needs a big government
24:12and that we cannot have only the emphasis on market forces, but that we need to have
24:19government intervention. Do you think that this also relates to, in many cases, the middle income
24:26trap discussion? Because the idea is that to escape the middle income trap, you have to have
24:35a sort of, I would say, growth factors, which may generate increase of efficiency and productivity
24:47and to make the jump from middle income to rich income. China is on the edge now of the
24:55high middle income country towards the rich. And then it is linked to the way of innovative
25:04behavior, how you can make that jump. There, I think also you see this combination of indeed
25:13belief in market forces, but at the same time, the belief that this government
25:19interference is needed and that efficient government is needed. And if you look at
25:27countries like Brazil, you see that maybe the government is too big and therefore not efficient,
25:33while in other countries, maybe the government is too small, maybe in the US. And so finding
25:40optimum government, which fits into the stage of your economic development process.
25:48As what we see is many developing countries or many countries who get partially developed
25:57in the process of industrialization, they produce and export something, but they failed to
26:05upgrade its industry to a more sophisticated and more added value bonds. As you mentioned
26:13just now, Brazil and some of the Southeast Asia countries in 1980s and the early 1990s,
26:22they did quite well, but at the end of the last century, they failed and there was stagnation.
26:30They believed too much in the market. They ignored the importance of government.
26:35When you first get industrialized, for the first part of industrialization,
26:44the government policy should invest, should be preferential or take care of the kept owners,
26:55especially the real business owners, to help them to be competitive
27:02and inevitably at the cost of its own people's welfare. So we look back on the history of the
27:10past 200 years, including Great Britain, including mainland Europe, including the Soviet Union or
27:18many other nations. The successful industrialization process, the first part
27:25is about depriving the ordinary people's social welfare and subsidizing the manufacturing,
27:33subsidizing the export, almost inevitably. But if you do not reverse the first trend,
27:45you will be in the so-called middle income trap because, as I mentioned, if you always
27:52take care of the business owners, then the result is the overwhelming majority of preparation
28:03is too little to be able to purchase your own products. So if you want to really get a great
28:17transformation from the middle income to a high income, then you will have to put a lot of
28:24resources, compensate the ordinary people to enrich them, or not necessarily get them rich,
28:34but make them able to pay for the products, for the high quality products that they themselves
28:43made. So it's like a zigzag. First, you have to go right. The policy is to go right,
28:51a so-called political right. If it's right, you take care of the rich people, you take care of
28:57the business owners. You are depriving, inevitably depriving to some extent, your own ordinary
29:02people's social welfare. Then the second part, you should be turned left to compensate the losses
29:12of the ordinary people. At the same time, of course, you have to invest heavily
29:23on the research and development to help the ordinary business. In this process,
29:31it would be cruel to ordinary business because that means a lot of business owners will fail.
29:36The right side angle and the left side angle, they both need the government interference.
29:42So that is precisely why, what you said before, that just having the paradigm of
29:49more market and less government, and that more market means less, automatically less government,
29:56that is a paradigm which we should not follow. We should follow the paradigm of
30:03market needs government and government needs markets, obviously. This type of pragmatism,
30:13how to implement government policy in a very pragmatic way, sometimes to the left,
30:20sometimes to the right, I think is also a key element in making this jump to
30:28and away from the middle-income trap. Everybody is competing, climbing the ladder,
30:34and only very few people, very few nations are able to climb to the highest place.
30:42That's my framework of understanding. It's not necessarily a natural right. It's not the right
30:52rights for every nation to get developed. That may be an annoying expression. Maybe
31:06you're not that much correct, but only very few nations at the top are able to produce high
31:15quality, high end value products, and have the so-called technological monopoly position,
31:24very beneficial, and enjoy a high life quality. But there's always many nations so-called trapped
31:35in the middle, because of various reasons. For example, some of the nations, because
31:43the industry will be destroyed by the resource, like Russia, like Middle East countries,
31:51like even South Africa, or Brazil. Maybe some other countries for different reasons, because
32:00they failed to turn left from the tipping point, turn the policy to the left, to help the poor
32:07people, to enrich them, to make a society flat and equal, and more fair. And maybe some other
32:15countries, because their political system is unable to absorb the global shock, for various
32:26reasons. But at the end of the day, there will always be many nations trapped in the middle,
32:31for various reasons. I don't think that there's a final answer to what is the right thing to do.
32:37But we definitely could point out a lot of bad things, a lot of wrong things, that many countries
32:44could make to make themselves stagnate during the development competition. And maybe we also
32:53put sometimes too much emphasis on indicators like GDP for economic development, and then
32:59that emerging market with a low GDP per capita may be very happy, or maybe having a relatively
33:07high bank in the human development index. So in that sense, maybe the whole GDP discussion
33:17also relates to the middle income discussion, or the middle income trap discussion.
33:21I agree with you that GDP is very misleading, because it mixes the tradable goods with the
33:29non-tradable goods. Now, the tradable outputs and the non-tradable outputs, they perceive them
33:35as something the same. But in my framework of understanding the whole world, especially the
33:41economy, how the society runs, how they compete with each other, the non-tradable sector should
33:49not be perceived as real economic activities. I perceive non-tradable sector like, for example,
33:57services in the restaurants, services in the health cutting services, that kind of things,
34:04they should not be perceived or counted as wealth creation. They should be perceived as
34:14wealth redistribution, because having a haircut by someone in the neighborhood
34:23is non-tradable. The price depends not on the service quality, but only depends on the average
34:35income of this neighborhood. So get your haircut in your hometown, for example, in Amsterdam or in
34:45Hague, it should be 20 or 30 euros, am I right? Today even 40 euros, yes. 40 euros. But
34:59having my haircut in a city like Beijing is, let me count, maybe 5 euros.
35:10Maybe 5 euros. Okay. But if the same barber is the guy who has,
35:21yeah, the serviceman, and the same customer, the same process of labor, the same service,
35:28if the place moves to Africa, to South Asia, you see, the price could be 40 times the difference.
35:38Why? It's mainly because it's only a process of redistribution amongst neighborhood
35:48members, instead of real creation wealth. So any nation, my observation is, my conclusion is,
35:55any nation, if you want to get your economy developed, you will have to get something
36:01tradable, yeah? Get something tradable, be competitive in at least one tradable sector.
36:07Now, for example, manufacturing, of course, we all know. But some other sectors,
36:15like financial sectors, finance. Finance is also tradable, of course. Now,
36:22finance service is also tradable, of course. It also could enrich your region or your country.
36:28Now, of course, it has shortcomings. And even like gambling in the casino industry.
36:39Gambling in the casino industry, although moral is bad, at least in East Asia,
36:45as a standard, it's a really bad thing. But it's also a tradable sector,
36:49because it will help that region to get money, to make money from other regions.
36:56Then you could get rich by these sectors. But in today's GDP calculation, it's really misleading,
37:06because you put this tradable sector and a non-tradable sector together. That's my framework.
37:13I fully understand your way of thinking. And we, as economists, we always make that distinction
37:22between, let's say, the GDP per capita in nominal terms and the GDP per capita in purchasing power
37:28parity, to make sure that the lower price of the haircut in China should increase the purchasing
37:36power of the person, of the people, compared to what you normally would have in nominal terms.
37:43So we are making a differentiation between tradables and non-tradables. And we put that
37:49in the GDP per capita in nominal terms and purchasing power. But maybe in line with your
37:56view, it is not so much income earned or value added, but it is more the reallocation of income.
38:06Exactly. Exactly. That's my point. So actually, I disagree with the GDP calculation,
38:17and I do not agree with the PPP calculation, because according to some research, the PPP
38:26also misleading. Purchasing power parity is also misleading, because
38:32if you define something, if you use a PPP term, that implies that countries like India,
38:40their currency is undervalued. Am I right? Yeah. If you say PPP is, for example, India is,
38:48I don't remember right now, for example, 3 trillion US dollar economic size GDP. And if
38:54PPP is like 4.5 trillion, that implies that its currency is undervalued, like 33%, for example,
39:06or 50%, let's say. So that makes people think that potentially that Indian currency are going
39:18to be appreciating against the US dollar in the coming years. But in fact, no. I'm very sure that
39:29overwhelming majority of the currencies, including Indian rupee, is going to depreciate against the
39:37US dollar in the coming decade. Because I made some statistics about these currencies. So that's
39:45why I prefer to use the trade sector, purely trade sector, to talk about a different size of
39:53the economy and its quality, instead of the GDP or PPP. You're right, you can use the overall
40:02undervalued currency to forecast the development of the exchange rate. That is indeed also possible.
40:12But you may question mark that, because all kinds of other factors may influence that,
40:17which are not related to undervalued currency. Okay, so it's a very happy conversation. And
40:25I hope next time offline, we can meet and have a cup of coffee or have dinner together
40:30and have more discussions. Would be very nice. Thank you very much for your insights and hope
40:37indeed that we can continue in the future on this topic. Very nice. Thank you very much.
40:43Thank you very much.
40:58And this was another episode of China Now, a show that opens a window to the present and
41:03the future of the ICHI. And hope you enjoy it. See you next time.