Table.Briefing: China

Chen Qiufan on AI + Statistics disappeared + Janka Oertel

Dear reader,

As the experienced Winston Churchill supposedly once said, do not trust any statistics you did not fake yourself. But how to deal with it when statistics are no longer gathered at all?

At least, that is what economists, academics and journalists who observe China experience. Figures on the steeply rising youth unemployment, on the crashing real estate sales? No more. Data on foreign exchange reserves? Embellished. Access to databases? Blocked. Joern Petring describes how a large economy becomes a black box.

Incidentally, the numbers that have disappeared include the Covid statistics. An independent source has now come up with a data point on the possible number of fatalities. A US study has put the puzzle pieces together and estimates two million Covid deaths.

AI is changing the world – and our lives. Chen Qiufan, one of today’s most successful science fiction authors, believes the dangers for humanity are quite real. However, he does not think an AI halt, as renowned tech giants demand, is the appropriate response. In conversation with Fabian Peltsch, he demands that governments should instead agree on a global AI approach.

Chen sees China’s strength in picking up new technologies and spreading them. What China still lacks in part: creativity. Europe, with its many different voices, could play a decisive role. “You’ve always been ahead of the curve, and we need your perspective.”

Your
Felix Lee
Image of Felix  Lee

Interview

‘AI provides us a mirror to look into our spiritual mind’

Chen Qiufan is one of the most important authors of a new wave of Chinese science fiction.

In spring, an open letter signed by tech luminaries like Elon Musk and Steve Wozniak caused a stir, calling for an immediate halt to the development of new AI tools until more control measures for the technology have been established. Do you also think this is necessary at this point of AI development or rather a panic fueled by dystopian fantasies – something that you wanted to counterbalance with your book “AI 2041”?

We need to give some serious thought to AI’s future. Trust me, the challenges and risks are real. That open letter calling for a stop on AI training doesn’t really hit the mark for me. It feels like a move in a big commercial game. The real focus should be on creating a global approach to AI. We’re using sci-fi in our book as a lens to bring balance and offer different perspectives on AI. Of Course, soothing people’s anxiety is definitely one of our goals.

Was ChatGPT a turning point in the AI revolution, which, according to your book, will lead to shifts in the world order, much like the Industrial Revolution?

Right now, training big AI models requires a ton of data and massive resources like computation power, energy and cloud services. It’s pretty much just the big players, like the US and China, that can handle it. I hope we can make AI more accessible and fair in the future. A lot of our current challenges are less about the tech and more about the systems we operate in, be it political or economic.   

China seems to be lagging behind a bit right now when it comes to tools like ChatGPT. Europe also seems to be struggling to catch up – is this just temporary or a systemic problem?

Speaking of China, they’ve been super good at scaling up new tech. It’s like they take something, make it big, and then improve on it. But there’s this whole debate on whether that stunts creativity. Real innovation happens when you have diverse voices coming together – from tech, to art, to academia. Europe’s role is crucial, especially when it comes to regulations. You’ve always been ahead of the curve, and we need your perspective. 

You suggested in your book that the next 15 to 20 years will be very chaotic when it comes to implementing AI technology and that issues like job losses will become a big challenge. What can countries and large AI companies do to make this transition smooth?

Job displacement due to AI is already happening, way sooner than we thought. We need to look out for each other, make sure everyone’s taken care of. Universal basic income might be a part of that, but there’s more to a job than just a paycheck. Obviously the capitalistic corporate system doesn’t support the cost of smoothing the transition, but the government has the obligation and responsibility to foresee that and do something. 

Among other things, you write that the use of AI could cause us to question our concept of work altogether and devote our lives to other things.

A lot of young folks in China are experiencing economic struggles and relying on family support. But that’s giving them a chance to rethink traditional paths and figure out what they really want. It’s a mixed bag though; society’s challenges are very real. Still, it underlines the widening class and economic divides. In an ideal society, everyone would have the opportunity for self-actualization, as posited by Maslow’s hierarchy of needs. But we are far from that utopia. 

You believe that, for the time being, the safest jobs are those that require imagination, creativity and empathy. Did you ever think of having an AI write your science fiction book “AI 2041”?

You know, we thought about having AI co-write a book with us back in 2019. We tried, but the tech just wasn’t there. But I have been very open to collaborating with AI since 2017 and always think of leveraging machine intelligence to unlock my own potential as a creator. 

Why should humans still create art themselves if a machine will eventually be able to do it just as well and versatile?

Creating, for me, is fundamental. It’s how we connect with others and understand ourselves. Not just for money or a career. I think everyone has the need and nature of creating. That’s the core of our civilization.  

Which of the potentials of AI are you personally most excited about?

I’m super curious about AI being used to interpret non-human languages, like from animals, plants and fungus. How wild would that be? 

What can AI teach us about human intelligence or even the nature of consciousness? 

We created AI based on our understanding of the neural network, and now AI could help us understand the brain even better. But getting to the core of consciousness? That’s the big ontological question of all, and who knows if we’ll ever truly get there. I am working on the new novel, partially touching on that topic, but fearfully not going too deep to show my ignorance. 

Will AI make us humans more spiritual?

AI definitely provides us a mirror to look into our spiritual mind, no matter whether it is religious or not, to ask all of those big questions that might never have answers. Who we are, where we are from and where are we going? Are we living in a world of simulation? If so, did we create it and what’s its purpose?  Most importantly, what makes us human? I think this is one of the most profound but always underestimated questions. 

Chen Qiufan 陈楸帆, born in 1981, is considered one of the most influential representatives of a new wave of Chinese science fiction since the release of his eco-thriller “Waste Tide.” Before his career as a writer, he worked in the tech industry, where he worked among others with AI expert Kai-Fu Lee. In 2022, they published the book “AI 2041,” in which they jointly create future scenarios of a world permeated by AI.

  • Artificial intelligence
  • Culture
  • Technology

Feature

An enormous economy flying blind

Can journalists find the right data here? In January, reporters lined up for a press conference at the National Bureau of Statistics in Beijing.

The recent announcement by China’s National Bureau of Statistics that it will no longer publish figures on youth unemployment triggered irritation and mockery. Officially, a spokesperson for the authority justified the change by saying that the office needed to revise its data-gathering methodology. In reality, it does not take much imagination to guess the real reason: Youth unemployment has been over 20 percent for months and has recently risen even further.

So, at least one in five young Chinese currently is without a job. Considering the current bleak economic outlook, it is a delicate issue that Beijing seems to prefer to sweep under the rug.

Although the statistics office’s announcement raised eyebrows among China experts, it was not a complete surprise. After all, it was by no means the first time that the authorities simply erased negative economic data. Some economists warn that the world’s second-largest economy is becoming a black box.

China publishes fewer and fewer statistics

Beijing even skipped the most prominent indicator of the state of the economy, the gross domestic product (GDP), last October. There could not be any bad news around the time of the Communist Party Congress, at which President Xi Jinping secured his third term as party leader. Consequently, neither growth figures nor foreign trade data were published – without explanation.

Overall, the number of data published by the National Bureau of Statistics has declined drastically since Xi took office in 2012. At that time, more than 80,000 statistics were still published per year. But tens of thousands of them have been gradually canceled, according to an evaluation by the Financial Times.

One of the unwelcome statistics that the office stopped publishing some time ago is the number of plots of land developers buy from municipalities nationwide. The data set, published since 1998, provided information on the state of China’s real estate market. But after the number of plots sold declined by over 50 percent last year, this statistic is no longer available either.

Inconsistencies in China’s Foreign Exchange Reserves

Not only does Beijing provide less and less useful data that allows drawing conclusions about the state of the economy. Chinese economists and analysts are also urged not to cast the economic situation in a bad light. Otherwise, they may face consequences.

Bloomberg also reported unusual events in the listing of foreign exchange reserves. They have remained “remarkably steady” since 2017. And this is even though China has been running an increasingly large trade surplus during this period. This should have actually increased reserves. Brad Setser, a former official at the US Department of Commerce and Treasury, concludes that many of the country’s reserves do not appear on the central bank’s official books because they are hidden in “shadow reserves.” Setser suspects China is probably using this money to intervene in the foreign exchange market.

Chinese authorities also came under pressure during the Covid pandemic when, in the eyes of many observers, they reported unrealistically low numbers of illnesses and deaths.

Less access to databases in China

Meanwhile, international scientists complain about the restricted access to Chinese databases. In March, numerous universities in the United States, Taiwan and Hong Kong were informed that their access to the China National Knowledge Infrastructure (CNKI) portal, China’s largest scientific database, would be restricted. China apparently saw access for foreigners as a threat to national security.

CNKI was founded in 1999 and holds academic journals and articles published since 1915, covering many fields such as politics, economics, humanities, social sciences and technology. The resources provided by CNKI are particularly important to researchers who cannot visit Chinese libraries locally.

  • Economic Situation

News

Central bank props up yuan and wants to stimulate stock trading

China’s state-run central bank is taking additional steps to counter the devaluation of the yuan and revive weakening stock markets. Two people familiar with the matter told Reuters that it ordered domestic banks to reduce their investments in foreign bonds. The aim was to limit the availability of yuan abroad.

Due to the sluggish economy and the weakening stock markets, many investors are currently withdrawing capital from China. This puts pressure on the domestic currency, which is why the authorities have tried to counteract this with numerous measures in recent months. For instance, state banks sold dollars to support the yuan.

Beijing also plans to stimulate stock markets with lower trading fees. The stamp duty on shares traded in China will be reduced by up to 50 percent, three people familiar with the matter told Reuters. Currently, the stamp duty is 0.1 percent of the trading volume. The proposal calls for either a 20 or 50 percent reduction, with a 50 percent reduction considered likely.

The exchange rate of the yuan (onshore yuan) traded in China has dropped by more than five percent against the dollar this year. Last week, it hit a ten-month low of 7.3180 per dollar, a hair’s breadth below the level last recorded during the global financial crisis of 2008. rtr

  • Central Bank
  • Finance
  • Renminbi

Chinese team refurbishes coal-fired power plants in South Africa

China will refurbish and modernize several coal-fired power plants of the South African state-owned utility Eskom. China Energy and China Energy Engineering Corporation signed contracts to this effect during the BRICS Summit. The background is the poor condition of the country’s energy infrastructure, which Eskom is responsible for. “South Africa is in a power crisis because it has too many decrepit coal power plants that Eskom doesn’t have the money to maintain or upgrade,” writes Lauri Myllyvirta, an energy expert specializing in China from the Centre for Research on Energy and Clean Air (CREA), on X (formerly Twitter).

Such refurbishment agreements are often a euphemism for the construction of new coal-fired power plants overseas, says Myllyvirta. But he does not assume that in this case – “especially with these agreements being tied to a Xi state visit.” China’s Pre Xi Jinping attended the BRICS summit in Johannesburg last week; he pledged several years ago that China would no longer finance new coal-fired power plants abroad, not even under the New Silk Road.

As Electricity Minister Kgosientsho Ramokgopa emphasized, the contracts will instead help extend the operating life of existing ailing power plants. “If anyone can help South Africa get this done it would be these Chinese firms with the experience of retrofitting hundreds of existing coal plants to high standards of efficiency, reliability and pollution control, and in some cases more flexible operation,” Myllyvirta writes.

According to Reuters, Eskom’s power supply deficit is around 4,000 megawatts (MW) of installed capacity, representing one-tenth of its capacity. This regularly leads to massive power outages. Eskom itself is not in a position to repair it, Myllyvirta said. The South African power plants cannot be quickly replaced by renewables either. They belong to the dirtiest in the world. Western countries have, therefore, concluded a so-called Just Energy Transition Partnership (JETP) with South Africa to support the country in the necessary transition away from coal. In Johannesburg, China Energy agreed on solar and wind projects in addition to the refurbishing. ck/rtr

  • Kohlekraft

Huawei and Ericsson share patents

Chinese telecommunications equipment supplier Huawei wants to cooperate with its Swedish rival Ericsson. Huawei announced that the two tech companies have signed a long-term agreement for the reciprocal use of mobile technology patents. These patents apply to various standards – including 4G and 5G. The agreement is long-term and global, said the head of Huawei’s intellectual property department.

Access to patents plays a crucial role in the mobile phone industry. They can inhibit competitors’ progress in cumbersome court cases by insisting on the protection of patented technologies. There is also a constant flow of licensing revenue between vendors. Huawei and Ericsson now give each other the right to use valuable technologies, saving effort and costs. This process is not unusual; Huawei alone has nearly 200 licensing agreements with other companies. fin

Study suspects two million Corona deaths

A team of US researchers has analyzed freely available data to determine the number of deaths from COVID-19 in China. They estimate the number of additional deaths at two million. The Fred Hutchinson Cancer Center in Seattle analyzed search engine hits and other information on obituaries and funerals.

The authorities only announced the absurdly low figure of 60,000 deaths. Hong Kong scientists estimates varied between just under one and several million dead. After December 2022, the virus had rushed through the population virtually unchecked. fin

  • Coronavirus

Olympic official suspected of corruption

The head of the Chinese Winter Sports Bureau, Ni Huizhong, is being investigated for corruption. The 54-year-old previously headed China’s Olympic delegation to the Winter Games in his own country. An anti-corruption campaign against sports officials is currently ongoing. National football coach Li Tie has also been charged with bribery. fin

  • Corruption
  • Sports

Chinese drone scouts Taiwan’s east coast

According to Taiwanese reports, over the weekend, 20 Chinese military aircraft crossed the median line of the Taiwan Strait, considered the unofficial border between the two countries. Among them was at least one combat drone traveling along Taiwan’s east coast, according to Taiwan’s Ministry of Defense. The constant incursions into Taiwan’s airspace are considered part of a hybrid war strategy. rtr

  • Military
  • Taiwan

Opinion

‘End of the China illusion’

By Janka Oertel
Janka Oertel is the Director of the Asia Programme at the European Council on Foreign Relations (ECFR).

The history of Sino-European relations is a tale of ups and downs. Cooperation with China over the last thirty years has been a real success story for Germany in particular. Germany’s economy has tremendously benefited from China’s rise and even furthered it. It has made us richer and more resilient to the small and large crises we have encountered. Also, because of China’s flourishing business, Germany has been able to play the role of a financially potent anchor of stability in Europe – from the euro crisis to the Covid pandemic.

Unlike the United States, Germany lost only a few jobs to China and not even its own industrial base. A company like Volkswagen did not produce cheaply in China only to cut jobs in Wolfsburg. The cake just kept getting bigger. More and more cars were sold for Europe in Europe, for China in China. More than many engineers at the traditional company had perhaps ever dared dream of. … Everyone could feel like a winner.

“End of the China Illusion. How we must deal with Beijing’s claim to power”, 2023, hardback, 304 pages, Piper Verlag, €24, will be published on 31 August in German.

Recently, however, the mood has been increasingly changing. Cracks have been appearing. And, remarkably, the first really loud wake-up call came precisely from the German business community. It is even more surprising that the Federation of German Industries (BDI) put the message out for broad discussion.

The BDI is rarely suspected of instigating revolutionary upheavals, as it actually belongs to the conservative spectrum of German associations. But in January 2019, this very organization’s position paper did something that others had avoided: To think ahead about the developments that entrepreneurs could observe on the ground and to clearly identify the problem that was brewing. It was the moment when a new form of competition came into play, more precisely: “systemic competition.” […]

This moment resembled a veritable bang in the otherwise somewhat dull debates of the German and European political establishment. The phrase “systemic competition” sought to describe the challenge that German corporations were facing in the still flourishing China business. The change from complementarity to competition. And in the same breath, it dispelled a myth: The illusion of the peaceful rise of the People’s Republic, which only knew winners and no losers.

Appearance and reality

Many myths and commonplaces are surrounding China. That is not surprising. For most Germans, China is far away, the political system uninviting, and the language complicated. But there is also a touch of the mystical, something centuries-old and culturally impressive about it. […]

Moreover, many of the beliefs created to grasp the phenomenon of China are versions of reality and historiography that the Chinese Communist Party deliberately disseminates and repeats over and over again. Reality is also created by the absence of contradiction, and repetition creates habituation effects. If a large communication and propaganda apparatus utters specific sentences in a continuous loop, they are eventually hardly questioned. “The Chinese Communist Party has lifted 400 million people out of poverty” is one such sentence, or: “China has never attacked and colonized another country,” “Decoupling from China is not possible,” “China is not Russia,” “Global climate action is impossible without cooperation with China,” “China does not seek to export its own system.”

But it is not only the Party that has created the myth of modern China; many other actors have contributed to it: Entrepreneurs who rave about how efficiently things are run in China and the speed with which projects can be initiated; politicians who are impressed by the way they are welcomed and predict the decline of the West given the sheer possibilities and technical finesse served to them by robots in China; experts who invoke China’s cultural peculiarities and therefore declare any broader criticism of the Communist Party to be presumptuous. […]

Nobody has the intention of building a wall

The illusions that we in Germany like to indulge ourselves in when it comes to China suggest that either there is no pressure to act or that we are dealing with circumstances that have no alternative and that are hardly any less than the laws of physics: “Decoupling from China is not possible” – really? Even a complete disengagement from Russian gas within a year would certainly have fallen into a comparable impossible category before Russia invaded Ukraine. So, is decoupling undesirable, then? But that would be something entirely different and raises completely different political questions and considerations: Not desirable for whom? Why? Who benefits from close ties to China? Truly everyone? Or a few in particular? How do the risks and costs shift as time passes and China becomes more powerful?

Asking these questions is not polemical, but reasonable. They may lead to unpleasant answers or the realization that better explanations are needed to explain why the current cost-benefit trade-off still stands. After all, we are not dealing with the laws of physics here, but those of politics and the market. And they are many things, but definitely not exclusively rational and calculable. [….]

The X(i) factor

The tone toward the United States and its partners has become harsh; Not only the specter of a renewed Cold War hangs over the world, but the genuine fear of a military confrontation. What happened? How could the situation escalate so massively over the past ten years? Why did things not turn out as the West had wished, or rather as it had firmly planned? Why has the relationship between China and the European Union cooled to almost zero in the meantime? And who is responsible for all the shattered dreams? The USA? Europe? Or China itself?

As is often the case, there is, unfortunately, no simple explanation. Political developments always arise in a larger context. Domestic politics is important everywhere in the world, yet nowhere is isolated from international developments. Much has been interrelated, and some turns have been taken more or less purposelessly. What can be noted, however, is that something is different in Xi Jinping’s China, and that is unsettling and, at times, deeply disturbing. But is it really new? Or is it a return to the natural state of authoritarian leadership in Communist Party China?

This book excerpt is an unofficial translation from German.

Janka Oertel holds a Ph.D. in political science and sinology and has worked at various research institutes for many years. She currently heads the Asia Programme at the European Council on Foreign Relations (ECFR).

  • EU
  • Geopolitics
  • Human Rights
  • Technology
  • Trade
  • USA

Executive Moves

John Hsu has been appointed Chief Technology Officer of Hong Kong exchange operator Hong Kong Exchanges and Clearing (HKEX), effective September 29. He succeeds Richard Leung, who takes over the position of Chief Information Officer. Hsu reports to Leung.

Roger Cheng joins law firm Linklaters from the stock market regulator Hong Kong Securities and Futures Commission (SFC). He is given the title of partner immediately. He has headed the mergers and acquisitions practice at the SFC.

Is something changing in your organization? Let us know at heads@table.media!

So To Speak

Rainbow fart

彩虹屁 – cǎihóngpì – rainbow fart

The salesman who sweet-talks you into buying something, the colleague who highly praises the boss’s design in front of the whole team, the Tinder date who whispers sweet compliments over the bar counter to perhaps get you into bed after all… Such behavior irritates you. From the Chinese point of view, no wonder! After all, all these scenarios involved a rainbow fart.

A what now? You heard right. In Chinese slang and Internet jargon, praising someone to the skies is known as “making a rainbow fart,” or in Chinese: 放彩虹屁 fàng cǎihóngpì (from 彩虹 cǎihóng “rainbow” and 屁 pì “fart”). This also explains why WeChat’s endless pool of stickers and emoji is full of colorful images on which cartoon characters (from pandas to corgis) are “emitting” winds of all colors.

Originally, this flatulent term comes from the fan scene, where diehard followers (called铁粉 tiěfěn) often praise their idol’s (爱豆 àidòu) every fart with effusive praise and expressions of love. Outsiders can only shake their heads and scoff, while crazy and totally bonkers followers (脑残粉 nǎocánfěn) wrap every creation of their stars in rainbow-colored clouds of praise (pronounced 彩虹屁 cǎihóngpì).

But where does the linguistic bridge from crazy adulation to intestinal wind come from? Well, for one thing, in Mandarin, farting is quite generally a synonym for verbal diarrhea. In Chinese, “nonsense” or “bullshit” is called foul-mouthed 屁话 pìhuà (“fart talk”).

And then there are horse butts, which we touched on in an earlier column. In the old Chinese phrase “to pat a horse’s behind” or “to pat” (拍马屁 pāi mǎpì), which figuratively means “to suck up,” the character 屁 pì also appears, but here it means “behind, buttocks” (as a short form of 屁股 pìgu).

The horsebutt-patting metaphor supposedly dates back to the Yuan dynasty, i.e., to the time of the Mongol rulers Genghis Khan and Kublai Khan. According to legend, the Mongols considered it polite to pat the other person’s horses on the buttocks and belly during encounters and praise the hoofed animals’ excellent constitution. This is believed to have given rise to the expression “patting the horse’s bum” as a synonym for “bestowing flattering praise.” And these linguistic connotations also radiate today into the rainbow fart world of Internet slang, where people sometimes say 拍彩虹屁 pāi cǎihóngpì (“pat rainbow butt”) as a variant for “sucking up.”

So if you’ve ever wondered in what conversational context the heck you could actually post a panda meme farting a rainbow cloud – now you (finally) know!

Verena Menzel runs the online language school New Chinese in Beijing.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    As the experienced Winston Churchill supposedly once said, do not trust any statistics you did not fake yourself. But how to deal with it when statistics are no longer gathered at all?

    At least, that is what economists, academics and journalists who observe China experience. Figures on the steeply rising youth unemployment, on the crashing real estate sales? No more. Data on foreign exchange reserves? Embellished. Access to databases? Blocked. Joern Petring describes how a large economy becomes a black box.

    Incidentally, the numbers that have disappeared include the Covid statistics. An independent source has now come up with a data point on the possible number of fatalities. A US study has put the puzzle pieces together and estimates two million Covid deaths.

    AI is changing the world – and our lives. Chen Qiufan, one of today’s most successful science fiction authors, believes the dangers for humanity are quite real. However, he does not think an AI halt, as renowned tech giants demand, is the appropriate response. In conversation with Fabian Peltsch, he demands that governments should instead agree on a global AI approach.

    Chen sees China’s strength in picking up new technologies and spreading them. What China still lacks in part: creativity. Europe, with its many different voices, could play a decisive role. “You’ve always been ahead of the curve, and we need your perspective.”

    Your
    Felix Lee
    Image of Felix  Lee

    Interview

    ‘AI provides us a mirror to look into our spiritual mind’

    Chen Qiufan is one of the most important authors of a new wave of Chinese science fiction.

    In spring, an open letter signed by tech luminaries like Elon Musk and Steve Wozniak caused a stir, calling for an immediate halt to the development of new AI tools until more control measures for the technology have been established. Do you also think this is necessary at this point of AI development or rather a panic fueled by dystopian fantasies – something that you wanted to counterbalance with your book “AI 2041”?

    We need to give some serious thought to AI’s future. Trust me, the challenges and risks are real. That open letter calling for a stop on AI training doesn’t really hit the mark for me. It feels like a move in a big commercial game. The real focus should be on creating a global approach to AI. We’re using sci-fi in our book as a lens to bring balance and offer different perspectives on AI. Of Course, soothing people’s anxiety is definitely one of our goals.

    Was ChatGPT a turning point in the AI revolution, which, according to your book, will lead to shifts in the world order, much like the Industrial Revolution?

    Right now, training big AI models requires a ton of data and massive resources like computation power, energy and cloud services. It’s pretty much just the big players, like the US and China, that can handle it. I hope we can make AI more accessible and fair in the future. A lot of our current challenges are less about the tech and more about the systems we operate in, be it political or economic.   

    China seems to be lagging behind a bit right now when it comes to tools like ChatGPT. Europe also seems to be struggling to catch up – is this just temporary or a systemic problem?

    Speaking of China, they’ve been super good at scaling up new tech. It’s like they take something, make it big, and then improve on it. But there’s this whole debate on whether that stunts creativity. Real innovation happens when you have diverse voices coming together – from tech, to art, to academia. Europe’s role is crucial, especially when it comes to regulations. You’ve always been ahead of the curve, and we need your perspective. 

    You suggested in your book that the next 15 to 20 years will be very chaotic when it comes to implementing AI technology and that issues like job losses will become a big challenge. What can countries and large AI companies do to make this transition smooth?

    Job displacement due to AI is already happening, way sooner than we thought. We need to look out for each other, make sure everyone’s taken care of. Universal basic income might be a part of that, but there’s more to a job than just a paycheck. Obviously the capitalistic corporate system doesn’t support the cost of smoothing the transition, but the government has the obligation and responsibility to foresee that and do something. 

    Among other things, you write that the use of AI could cause us to question our concept of work altogether and devote our lives to other things.

    A lot of young folks in China are experiencing economic struggles and relying on family support. But that’s giving them a chance to rethink traditional paths and figure out what they really want. It’s a mixed bag though; society’s challenges are very real. Still, it underlines the widening class and economic divides. In an ideal society, everyone would have the opportunity for self-actualization, as posited by Maslow’s hierarchy of needs. But we are far from that utopia. 

    You believe that, for the time being, the safest jobs are those that require imagination, creativity and empathy. Did you ever think of having an AI write your science fiction book “AI 2041”?

    You know, we thought about having AI co-write a book with us back in 2019. We tried, but the tech just wasn’t there. But I have been very open to collaborating with AI since 2017 and always think of leveraging machine intelligence to unlock my own potential as a creator. 

    Why should humans still create art themselves if a machine will eventually be able to do it just as well and versatile?

    Creating, for me, is fundamental. It’s how we connect with others and understand ourselves. Not just for money or a career. I think everyone has the need and nature of creating. That’s the core of our civilization.  

    Which of the potentials of AI are you personally most excited about?

    I’m super curious about AI being used to interpret non-human languages, like from animals, plants and fungus. How wild would that be? 

    What can AI teach us about human intelligence or even the nature of consciousness? 

    We created AI based on our understanding of the neural network, and now AI could help us understand the brain even better. But getting to the core of consciousness? That’s the big ontological question of all, and who knows if we’ll ever truly get there. I am working on the new novel, partially touching on that topic, but fearfully not going too deep to show my ignorance. 

    Will AI make us humans more spiritual?

    AI definitely provides us a mirror to look into our spiritual mind, no matter whether it is religious or not, to ask all of those big questions that might never have answers. Who we are, where we are from and where are we going? Are we living in a world of simulation? If so, did we create it and what’s its purpose?  Most importantly, what makes us human? I think this is one of the most profound but always underestimated questions. 

    Chen Qiufan 陈楸帆, born in 1981, is considered one of the most influential representatives of a new wave of Chinese science fiction since the release of his eco-thriller “Waste Tide.” Before his career as a writer, he worked in the tech industry, where he worked among others with AI expert Kai-Fu Lee. In 2022, they published the book “AI 2041,” in which they jointly create future scenarios of a world permeated by AI.

    • Artificial intelligence
    • Culture
    • Technology

    Feature

    An enormous economy flying blind

    Can journalists find the right data here? In January, reporters lined up for a press conference at the National Bureau of Statistics in Beijing.

    The recent announcement by China’s National Bureau of Statistics that it will no longer publish figures on youth unemployment triggered irritation and mockery. Officially, a spokesperson for the authority justified the change by saying that the office needed to revise its data-gathering methodology. In reality, it does not take much imagination to guess the real reason: Youth unemployment has been over 20 percent for months and has recently risen even further.

    So, at least one in five young Chinese currently is without a job. Considering the current bleak economic outlook, it is a delicate issue that Beijing seems to prefer to sweep under the rug.

    Although the statistics office’s announcement raised eyebrows among China experts, it was not a complete surprise. After all, it was by no means the first time that the authorities simply erased negative economic data. Some economists warn that the world’s second-largest economy is becoming a black box.

    China publishes fewer and fewer statistics

    Beijing even skipped the most prominent indicator of the state of the economy, the gross domestic product (GDP), last October. There could not be any bad news around the time of the Communist Party Congress, at which President Xi Jinping secured his third term as party leader. Consequently, neither growth figures nor foreign trade data were published – without explanation.

    Overall, the number of data published by the National Bureau of Statistics has declined drastically since Xi took office in 2012. At that time, more than 80,000 statistics were still published per year. But tens of thousands of them have been gradually canceled, according to an evaluation by the Financial Times.

    One of the unwelcome statistics that the office stopped publishing some time ago is the number of plots of land developers buy from municipalities nationwide. The data set, published since 1998, provided information on the state of China’s real estate market. But after the number of plots sold declined by over 50 percent last year, this statistic is no longer available either.

    Inconsistencies in China’s Foreign Exchange Reserves

    Not only does Beijing provide less and less useful data that allows drawing conclusions about the state of the economy. Chinese economists and analysts are also urged not to cast the economic situation in a bad light. Otherwise, they may face consequences.

    Bloomberg also reported unusual events in the listing of foreign exchange reserves. They have remained “remarkably steady” since 2017. And this is even though China has been running an increasingly large trade surplus during this period. This should have actually increased reserves. Brad Setser, a former official at the US Department of Commerce and Treasury, concludes that many of the country’s reserves do not appear on the central bank’s official books because they are hidden in “shadow reserves.” Setser suspects China is probably using this money to intervene in the foreign exchange market.

    Chinese authorities also came under pressure during the Covid pandemic when, in the eyes of many observers, they reported unrealistically low numbers of illnesses and deaths.

    Less access to databases in China

    Meanwhile, international scientists complain about the restricted access to Chinese databases. In March, numerous universities in the United States, Taiwan and Hong Kong were informed that their access to the China National Knowledge Infrastructure (CNKI) portal, China’s largest scientific database, would be restricted. China apparently saw access for foreigners as a threat to national security.

    CNKI was founded in 1999 and holds academic journals and articles published since 1915, covering many fields such as politics, economics, humanities, social sciences and technology. The resources provided by CNKI are particularly important to researchers who cannot visit Chinese libraries locally.

    • Economic Situation

    News

    Central bank props up yuan and wants to stimulate stock trading

    China’s state-run central bank is taking additional steps to counter the devaluation of the yuan and revive weakening stock markets. Two people familiar with the matter told Reuters that it ordered domestic banks to reduce their investments in foreign bonds. The aim was to limit the availability of yuan abroad.

    Due to the sluggish economy and the weakening stock markets, many investors are currently withdrawing capital from China. This puts pressure on the domestic currency, which is why the authorities have tried to counteract this with numerous measures in recent months. For instance, state banks sold dollars to support the yuan.

    Beijing also plans to stimulate stock markets with lower trading fees. The stamp duty on shares traded in China will be reduced by up to 50 percent, three people familiar with the matter told Reuters. Currently, the stamp duty is 0.1 percent of the trading volume. The proposal calls for either a 20 or 50 percent reduction, with a 50 percent reduction considered likely.

    The exchange rate of the yuan (onshore yuan) traded in China has dropped by more than five percent against the dollar this year. Last week, it hit a ten-month low of 7.3180 per dollar, a hair’s breadth below the level last recorded during the global financial crisis of 2008. rtr

    • Central Bank
    • Finance
    • Renminbi

    Chinese team refurbishes coal-fired power plants in South Africa

    China will refurbish and modernize several coal-fired power plants of the South African state-owned utility Eskom. China Energy and China Energy Engineering Corporation signed contracts to this effect during the BRICS Summit. The background is the poor condition of the country’s energy infrastructure, which Eskom is responsible for. “South Africa is in a power crisis because it has too many decrepit coal power plants that Eskom doesn’t have the money to maintain or upgrade,” writes Lauri Myllyvirta, an energy expert specializing in China from the Centre for Research on Energy and Clean Air (CREA), on X (formerly Twitter).

    Such refurbishment agreements are often a euphemism for the construction of new coal-fired power plants overseas, says Myllyvirta. But he does not assume that in this case – “especially with these agreements being tied to a Xi state visit.” China’s Pre Xi Jinping attended the BRICS summit in Johannesburg last week; he pledged several years ago that China would no longer finance new coal-fired power plants abroad, not even under the New Silk Road.

    As Electricity Minister Kgosientsho Ramokgopa emphasized, the contracts will instead help extend the operating life of existing ailing power plants. “If anyone can help South Africa get this done it would be these Chinese firms with the experience of retrofitting hundreds of existing coal plants to high standards of efficiency, reliability and pollution control, and in some cases more flexible operation,” Myllyvirta writes.

    According to Reuters, Eskom’s power supply deficit is around 4,000 megawatts (MW) of installed capacity, representing one-tenth of its capacity. This regularly leads to massive power outages. Eskom itself is not in a position to repair it, Myllyvirta said. The South African power plants cannot be quickly replaced by renewables either. They belong to the dirtiest in the world. Western countries have, therefore, concluded a so-called Just Energy Transition Partnership (JETP) with South Africa to support the country in the necessary transition away from coal. In Johannesburg, China Energy agreed on solar and wind projects in addition to the refurbishing. ck/rtr

    • Kohlekraft

    Huawei and Ericsson share patents

    Chinese telecommunications equipment supplier Huawei wants to cooperate with its Swedish rival Ericsson. Huawei announced that the two tech companies have signed a long-term agreement for the reciprocal use of mobile technology patents. These patents apply to various standards – including 4G and 5G. The agreement is long-term and global, said the head of Huawei’s intellectual property department.

    Access to patents plays a crucial role in the mobile phone industry. They can inhibit competitors’ progress in cumbersome court cases by insisting on the protection of patented technologies. There is also a constant flow of licensing revenue between vendors. Huawei and Ericsson now give each other the right to use valuable technologies, saving effort and costs. This process is not unusual; Huawei alone has nearly 200 licensing agreements with other companies. fin

    Study suspects two million Corona deaths

    A team of US researchers has analyzed freely available data to determine the number of deaths from COVID-19 in China. They estimate the number of additional deaths at two million. The Fred Hutchinson Cancer Center in Seattle analyzed search engine hits and other information on obituaries and funerals.

    The authorities only announced the absurdly low figure of 60,000 deaths. Hong Kong scientists estimates varied between just under one and several million dead. After December 2022, the virus had rushed through the population virtually unchecked. fin

    • Coronavirus

    Olympic official suspected of corruption

    The head of the Chinese Winter Sports Bureau, Ni Huizhong, is being investigated for corruption. The 54-year-old previously headed China’s Olympic delegation to the Winter Games in his own country. An anti-corruption campaign against sports officials is currently ongoing. National football coach Li Tie has also been charged with bribery. fin

    • Corruption
    • Sports

    Chinese drone scouts Taiwan’s east coast

    According to Taiwanese reports, over the weekend, 20 Chinese military aircraft crossed the median line of the Taiwan Strait, considered the unofficial border between the two countries. Among them was at least one combat drone traveling along Taiwan’s east coast, according to Taiwan’s Ministry of Defense. The constant incursions into Taiwan’s airspace are considered part of a hybrid war strategy. rtr

    • Military
    • Taiwan

    Opinion

    ‘End of the China illusion’

    By Janka Oertel
    Janka Oertel is the Director of the Asia Programme at the European Council on Foreign Relations (ECFR).

    The history of Sino-European relations is a tale of ups and downs. Cooperation with China over the last thirty years has been a real success story for Germany in particular. Germany’s economy has tremendously benefited from China’s rise and even furthered it. It has made us richer and more resilient to the small and large crises we have encountered. Also, because of China’s flourishing business, Germany has been able to play the role of a financially potent anchor of stability in Europe – from the euro crisis to the Covid pandemic.

    Unlike the United States, Germany lost only a few jobs to China and not even its own industrial base. A company like Volkswagen did not produce cheaply in China only to cut jobs in Wolfsburg. The cake just kept getting bigger. More and more cars were sold for Europe in Europe, for China in China. More than many engineers at the traditional company had perhaps ever dared dream of. … Everyone could feel like a winner.

    “End of the China Illusion. How we must deal with Beijing’s claim to power”, 2023, hardback, 304 pages, Piper Verlag, €24, will be published on 31 August in German.

    Recently, however, the mood has been increasingly changing. Cracks have been appearing. And, remarkably, the first really loud wake-up call came precisely from the German business community. It is even more surprising that the Federation of German Industries (BDI) put the message out for broad discussion.

    The BDI is rarely suspected of instigating revolutionary upheavals, as it actually belongs to the conservative spectrum of German associations. But in January 2019, this very organization’s position paper did something that others had avoided: To think ahead about the developments that entrepreneurs could observe on the ground and to clearly identify the problem that was brewing. It was the moment when a new form of competition came into play, more precisely: “systemic competition.” […]

    This moment resembled a veritable bang in the otherwise somewhat dull debates of the German and European political establishment. The phrase “systemic competition” sought to describe the challenge that German corporations were facing in the still flourishing China business. The change from complementarity to competition. And in the same breath, it dispelled a myth: The illusion of the peaceful rise of the People’s Republic, which only knew winners and no losers.

    Appearance and reality

    Many myths and commonplaces are surrounding China. That is not surprising. For most Germans, China is far away, the political system uninviting, and the language complicated. But there is also a touch of the mystical, something centuries-old and culturally impressive about it. […]

    Moreover, many of the beliefs created to grasp the phenomenon of China are versions of reality and historiography that the Chinese Communist Party deliberately disseminates and repeats over and over again. Reality is also created by the absence of contradiction, and repetition creates habituation effects. If a large communication and propaganda apparatus utters specific sentences in a continuous loop, they are eventually hardly questioned. “The Chinese Communist Party has lifted 400 million people out of poverty” is one such sentence, or: “China has never attacked and colonized another country,” “Decoupling from China is not possible,” “China is not Russia,” “Global climate action is impossible without cooperation with China,” “China does not seek to export its own system.”

    But it is not only the Party that has created the myth of modern China; many other actors have contributed to it: Entrepreneurs who rave about how efficiently things are run in China and the speed with which projects can be initiated; politicians who are impressed by the way they are welcomed and predict the decline of the West given the sheer possibilities and technical finesse served to them by robots in China; experts who invoke China’s cultural peculiarities and therefore declare any broader criticism of the Communist Party to be presumptuous. […]

    Nobody has the intention of building a wall

    The illusions that we in Germany like to indulge ourselves in when it comes to China suggest that either there is no pressure to act or that we are dealing with circumstances that have no alternative and that are hardly any less than the laws of physics: “Decoupling from China is not possible” – really? Even a complete disengagement from Russian gas within a year would certainly have fallen into a comparable impossible category before Russia invaded Ukraine. So, is decoupling undesirable, then? But that would be something entirely different and raises completely different political questions and considerations: Not desirable for whom? Why? Who benefits from close ties to China? Truly everyone? Or a few in particular? How do the risks and costs shift as time passes and China becomes more powerful?

    Asking these questions is not polemical, but reasonable. They may lead to unpleasant answers or the realization that better explanations are needed to explain why the current cost-benefit trade-off still stands. After all, we are not dealing with the laws of physics here, but those of politics and the market. And they are many things, but definitely not exclusively rational and calculable. [….]

    The X(i) factor

    The tone toward the United States and its partners has become harsh; Not only the specter of a renewed Cold War hangs over the world, but the genuine fear of a military confrontation. What happened? How could the situation escalate so massively over the past ten years? Why did things not turn out as the West had wished, or rather as it had firmly planned? Why has the relationship between China and the European Union cooled to almost zero in the meantime? And who is responsible for all the shattered dreams? The USA? Europe? Or China itself?

    As is often the case, there is, unfortunately, no simple explanation. Political developments always arise in a larger context. Domestic politics is important everywhere in the world, yet nowhere is isolated from international developments. Much has been interrelated, and some turns have been taken more or less purposelessly. What can be noted, however, is that something is different in Xi Jinping’s China, and that is unsettling and, at times, deeply disturbing. But is it really new? Or is it a return to the natural state of authoritarian leadership in Communist Party China?

    This book excerpt is an unofficial translation from German.

    Janka Oertel holds a Ph.D. in political science and sinology and has worked at various research institutes for many years. She currently heads the Asia Programme at the European Council on Foreign Relations (ECFR).

    • EU
    • Geopolitics
    • Human Rights
    • Technology
    • Trade
    • USA

    Executive Moves

    John Hsu has been appointed Chief Technology Officer of Hong Kong exchange operator Hong Kong Exchanges and Clearing (HKEX), effective September 29. He succeeds Richard Leung, who takes over the position of Chief Information Officer. Hsu reports to Leung.

    Roger Cheng joins law firm Linklaters from the stock market regulator Hong Kong Securities and Futures Commission (SFC). He is given the title of partner immediately. He has headed the mergers and acquisitions practice at the SFC.

    Is something changing in your organization? Let us know at heads@table.media!

    So To Speak

    Rainbow fart

    彩虹屁 – cǎihóngpì – rainbow fart

    The salesman who sweet-talks you into buying something, the colleague who highly praises the boss’s design in front of the whole team, the Tinder date who whispers sweet compliments over the bar counter to perhaps get you into bed after all… Such behavior irritates you. From the Chinese point of view, no wonder! After all, all these scenarios involved a rainbow fart.

    A what now? You heard right. In Chinese slang and Internet jargon, praising someone to the skies is known as “making a rainbow fart,” or in Chinese: 放彩虹屁 fàng cǎihóngpì (from 彩虹 cǎihóng “rainbow” and 屁 pì “fart”). This also explains why WeChat’s endless pool of stickers and emoji is full of colorful images on which cartoon characters (from pandas to corgis) are “emitting” winds of all colors.

    Originally, this flatulent term comes from the fan scene, where diehard followers (called铁粉 tiěfěn) often praise their idol’s (爱豆 àidòu) every fart with effusive praise and expressions of love. Outsiders can only shake their heads and scoff, while crazy and totally bonkers followers (脑残粉 nǎocánfěn) wrap every creation of their stars in rainbow-colored clouds of praise (pronounced 彩虹屁 cǎihóngpì).

    But where does the linguistic bridge from crazy adulation to intestinal wind come from? Well, for one thing, in Mandarin, farting is quite generally a synonym for verbal diarrhea. In Chinese, “nonsense” or “bullshit” is called foul-mouthed 屁话 pìhuà (“fart talk”).

    And then there are horse butts, which we touched on in an earlier column. In the old Chinese phrase “to pat a horse’s behind” or “to pat” (拍马屁 pāi mǎpì), which figuratively means “to suck up,” the character 屁 pì also appears, but here it means “behind, buttocks” (as a short form of 屁股 pìgu).

    The horsebutt-patting metaphor supposedly dates back to the Yuan dynasty, i.e., to the time of the Mongol rulers Genghis Khan and Kublai Khan. According to legend, the Mongols considered it polite to pat the other person’s horses on the buttocks and belly during encounters and praise the hoofed animals’ excellent constitution. This is believed to have given rise to the expression “patting the horse’s bum” as a synonym for “bestowing flattering praise.” And these linguistic connotations also radiate today into the rainbow fart world of Internet slang, where people sometimes say 拍彩虹屁 pāi cǎihóngpì (“pat rainbow butt”) as a variant for “sucking up.”

    So if you’ve ever wondered in what conversational context the heck you could actually post a panda meme farting a rainbow cloud – now you (finally) know!

    Verena Menzel runs the online language school New Chinese in Beijing.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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