Table.Briefing: China (English)

End of birth tourism + Blow to exporters

Dear reader,

For over 20 years, it has been a common practice among China’s wealthy families: Heavily pregnant Chinese women travel to the United States, preferably to California, to give birth to their baby, who then receives American citizenship. An entire industry has developed around this birth tourism. Travel agencies offer all-inclusive trips; postpartum centers care for the women on-site, assisted by specialized nurses. But Donald Trump now wants to abolish birthright citizenship by executive order. “The once commonplace sight of pregnant Chinese women strolling the streets of Rowland Heights in California may soon be gone forever,” writes Blanka Xia in her fascinating text about a very special form of Chinese tourism.

Our second text is also about the relationship between the United States and China. China’s exporters benefit from the little-known “de minimis” rule, which allows duty-free imports of goods up to 800 US dollars. The EU has a similar regulation, which allows packages with a value of less than 150 euros to be imported duty-free. This primarily benefits Chinese online retailers such as Shein, Temu and AliExpress. Trump now wants to close the loophole, which could even impact China’s growth figures, writes Jörn Petring.

And finally, today’s Profile also touches on Sino-American relations. It features the “king of the Chinese stock market” Chen Tianshi, co-founder and CEO of the technology group Cambricon, which many are already referring to as the Chinese Nvidia. Cambricon still lags behind its US competitor in developing advanced AI chips. However, Chen benefits from the US export controls, which aim to prevent the import of advanced semiconductors to China. The gap Nvidia leaves behind in China is huge. The US company’s market share in China could collapse from 80 percent to around 50 percent this year due to the US export controls, writes Jörn Petring. This promises massive growth opportunities for Chen.

Your
Angela Köckritz
Image of Angela  Köckritz

Feature

USA: Why Chinese birth tourism could soon be a thing of the past

Chinese superstar Zhang Ziyi also went to the United States to give birth to her child. Seen here on the red carpet of the Venice International Film Festival in September 2024.

When Donald Trump signed an executive order on January 20 prohibiting the acquisition of US citizenship for children born in the US to illegal immigrants or people with temporary visas, he sent many Chinese families into a state of shock. “I arrived in the US a few weeks ago and the due date is February 20. Can the child still get US citizenship automatically? The sky has fallen now,” wrote one user on Xiaohongshu (小红书).

Whether Trump’s executive order can be implemented easily remains open since the 14th Amendment to the US Constitution (14A) expressly stipulates the birthright to citizenship. But panic has already broken out among many Chinese families. For over 20 years, pregnant Chinese women have been traveling to the United States to give birth. Giving birth in the US has become a common practice for many wealthy Chinese families. In the past, many wanted to escape China’s one-child policy. Today, some see it as a first step towards future immigration to the US. Others are drawn to the quality of the American education system or hope for a better life for their children.

Such posts can be found in abundance on social media. Mr. Chen from Shanghai explains: “The medical standards in American private clinics are excellent. A private clinic of a comparable standard in Shanghai costs around 150,000 RMB (just under 20,000 euros), while the total cost of giving birth in the United States is just over 300,000 RMB (just under 40,000 euros).” Ms. Luo from Shenzhen traveled to Los Angeles in 2017 to give birth to her second daughter. Looking back, she says: “We didn’t have the financial means before, but now we can afford it. I want to offer my children more opportunities. With an American passport for my daughter, it will also be easier for us to immigrate to the US later.”

Lawsuit anchored birthright citizenship in the US

The trend of birth tourism can be traced back to the early 2000s. According to a report in the magazine Huanqiu (环球), around 600 Chinese women traveled to the United States to give birth in 2007. Five years later, the number had risen to 10,000; one year later, it had doubled. In the following years, their numbers grew exponentially. From 2016 until the start of the pandemic, 80,000 Chinese women traveled to the US every year to make use of the 14th Amendment to the US Constitution.

It was originally passed after the end of the American Civil War and made it possible for freed African-American slaves and their children to obtain US citizenship. Later, people from other ethnic groups sought equal rights, the most well-known being the case of Wong Kim Ark (黄金德).

Wong Kim Ark was born in San Francisco, California. His parents were immigrants from Guangdong, China. Thanks to the 14th Amendment to the Constitution, he became a US citizen. After receiving his citizenship, he traveled to China twice. However, when he wanted to return to the United States for the second time, he was denied entry by the US customs authorities due to the “Chinese Exclusion Act.” This 1882 law barred Chinese workers from immigrating to the United States for ten years. Wong subsequently sued the US government to defend his civil rights. The case went all the way to the Supreme Court, where Wong eventually won.

In 1898, the US Supreme Court ruled that Wong Kim Ark was a US citizen by birth, even though his parents were Chinese nationals. His case ultimately established birthright citizenship in the United States.

A hit movie fuels a booming industry

In recent years, numerous Chinese celebrities such as presenter Dong Qing (董卿), journalist Chai Jing (柴静), actress Zhang Ziyi (章子怡) and the wife of Olympic boxing champion Zhou Shiming (邹市明) have given birth to their children in the United States.

The highly popular film Finding Mr. Right (北京遇上西雅图) tells the story of Wen Jiajia (played by Tang Wei 汤唯), who travels alone to the US city of Seattle to give birth to her child. In a so-called postpartum care center (月子中心), Jiajia meets a group of Chinese women who have come to the United States to give birth for various reasons. The film was not only a box-office hit, but also acted as an advertisement for the already booming industry.

The steadily growing demand has created a thriving industry. Agencies in China offer packages ranging from visa application, travel planning and accommodation to medical care, legal advice and educational planning. Typically, accommodation, food and transportation costs between 200,000 and 500,000 RMB, roughly equivalent to 26,300 and 65,730 euros, with agency fees accounting for around 20 to 40 percent of the total cost.

Most women generally travel to the United States around the seventh month of pregnancy and stay there for three months. California is the most popular destination, especially Los Angeles. The climate, the comparatively low medical costs and the large Chinese community have led to numerous postpartum care centers popping up here. According to Phoenix Television(凤凰卫视), there were over 3,000 such Chinese-run centers by 2017, most of which are located in mansions. In Rowland Heights, a popular Los Angeles neighborhood, 80 percent of the residents at the time were said to be pregnant women. Typically, five to seven expectant mothers live in such a villa. The centers provide daily meals, organize check-ups, shopping trips and postnatal care. One caregiver, referred to as “nanny(月嫂),” often looks after seven to eight mothers simultaneously. Most of these centers operate illegally – they do not have an official operating license and do not pay taxes.

Residents organize protests against postpartum care centers

This vast illegal business activity not only affects the lives of local residents, but has also led to declining property prices. Many residents organized protests against this practice. In March 2015, the FBI, immigration authorities and the tax authorities conducted a massive raid in Southern California. Numerous facilities were closed.

Since the outbreak of the pandemic and the deterioration of relations between China and the US, travel has become increasingly difficult for Chinese nationals. During Trump’s first term in office, the US State Department already ruled that birth tourism was not an acceptable reason for a so-called B2 visa, which led to a drastic decrease in visa approvals. Due to the increasing risks, many Chinese women have put their plans on hold. Many centers in Los Angeles have had to close as a result. Perhaps the once commonplace sight of pregnant Chinese women strolling the streets of Rowland Heights could soon be gone forever. Blanka Xia

  • Gesellschaft

Tariffs: How Trump plans to deal a blow to Chinese exporters

Revoking or restricting the de minimis rule is primarily aimed at Chinese exporters such as Shein.

Contrary to what he originally announced, Donald Trump did not directly introduce new tariffs against China on his first day in office. Instead, he signed a memorandum called “America First Trade Policy.” In it, he instructed the authorities to investigate the causes of the United States’ persistent trade deficits.

Nevertheless, Beijing is not in the clear yet. During his first term eight years ago, Trump also had a similar investigation launched. He only then launched a tariff war against China based on the results. The document he has now signed sheds light on what could be in store for China in just a few weeks. Trump’s memorandum explicitly questions the so-called “de minimis” rule.

Goods up to 800 US dollars may enter the USA duty-free

This allows goods for private use to be imported into the United States without the usual duties and customs procedures. The EU also has a rule that allows packages with a value of less than 150 euros to be imported duty-free. Chinese online retailers such as Shein are taking advantage of this and splitting orders into several parcels to avoid customs duties, which has triggered massive discussions in Europe.

However, in America of all places, Chinese retailers have had it a lot easier so far as the country has the highest “de minimis” limit in the world. Goods up to 800 dollars can enter America duty-free. The main beneficiaries are online retailers based in China, such as Shein, Temu, and AliExpress, which have massively expanded their exports to the USA.

As Reuters reports, citing US customs data, shipments that fall under the duty-free rule have increased by more than 600 percent to over one billion items in the last ten years. Around four million parcels arrive in the United States every day – many of them from China.

Effects on exports and GDP growth

China reportedly recently shipped the equivalent of 240 billion dollars worth of goods worldwide. If “de minimis” were to be massively restricted or even completely revoked in both the EU and the USA, this would strike a significant blow to China’s foreign trade. Nomura Bank estimates that ending the trade rule would slow China’s export growth by 1.3 percentage points and GDP growth by 0.2 points. Sectors such as clothing and electronics, which account for many de minimis exports, would be particularly affected.

Companies like Shein, the world’s largest fast fashion giant, would face massive challenges. They would probably have to raise their prices by 15 to 20 percent to compensate for tariffs – a risk as their business model is based on low prices and narrow margins. With the possible abolition of the de minimis rule, Trump is addressing an issue that has already received attention under the Biden administration. In September 2024, the Biden administration announced measures to restrict the use of the de minimis exemption.

Calls for 100 percent tariffs

Trump’s plans could go much further, especially as he would address two issues from his election campaign. On the one hand, the high trade deficit with China is a thorn in his side, and on the other, he has announced a crackdown on the fentanyl trade. Precursors of the synthetic opioid, which is the cause of a significant number of overdose deaths in the US, can enter the US in small packages virtually unchecked thanks to the “de minimis” rule.

Accompanied by Trump’s memorandum, the US Congress has already positioned itself. On January 23, congress members introduced a bipartisan bill that aims to abolish the de minimis exemption. However, the paper submitted to Congress goes even further. It calls for a complete restructuring of trade relations with China.

The bill envisages the gradual introduction of substantial tariffs, starting at 10 percent in the first year and increasing to 100 percent within five years. Trump may have been less focused on China in his first few days in office than observers predicted. However, it is clear that drastic changes are in the pipeline.

  • Handelskrieg

News

Stock market turmoil and cyberattack: DeepSeek sparks unrest

Fears of a crash in the technology sector following the success of a new AI model are weighing on stock markets in Europe. The Chinese AI assistant R1 from DeepSeek, launched on January 10, overtook rival ChatGPT as the top-rated free software application in Apple’s App Store in the US on Monday. Due to its popularity, the website was briefly unavailable. On Monday evening, the company also announced that it had to temporarily restrict the registration of new users due to cyberattacks.

Hangzhou-based DeepSeek was founded in 2023 with a start-up capital of just 10 million yuan (1.4 million US dollars). According to Chinese media reports, it has fewer than 200 employees, some of whom are very young, including recent graduates. The staff comes from top Chinese universities such as Tsinghua and Beijing University.

DeepSeek raised attention by developing models requiring less energy that can compete in benchmarks with leading Western AI products. Its success also raises questions about the impact of US export restrictions, as China appears to have made considerable progress despite trade barriers for semiconductors and other advanced technologies.

Powered by Nvidia?

According to a report in the Financial Times, company founder Liang Wenfeng may also have purchased thousands of GPUs from Nvidia for another company before the US export ban came into force in October 2023. Liang founded the hedge fund High-Flyer in 2016, which uses machine learning to analyze financial data and design AI-based trading strategies. In any case, DeepSeek is more efficient than its competition, as it requires fewer resources for comparable applications. This is all the more remarkable as the chips, if they are actually from Nvidia, are outdated by now. “We should take the developments out of China very, very seriously,” explained Microsoft CEO Satya Nadella at the World Economic Forum in Davos. The unpleasant truth is that the US restrictions have virtually forced Chinese companies like DeepSeek to become more independent and efficient, said Angela Zhang, a professor specializing in tech, in the Financial Times. However, DeepSeek, like all Chinese AI models, is subject to state censorship and filters out sensitive topics, such as the Tiananmen protests or criticism of Xi Jinping.

The success of the new open-source AI model has also fuelled fears of a sell-off in the technology sector: DeepSeek’s development stage and speed of development are causing investors to reconsider their investments. Shares in the German electrical engineering group Siemens Energy, which offers AI infrastructure hardware, fell by more than 20 percent on Monday. Suss MicroTec, Aixtron and Infineon also dropped by between four and almost twelve percent. The Dutch industry giants ASML, ASM International and BE Semiconductor lost between almost 10 to over 13 percent. rtr/fpe/jul

  • Stock Exchange

Economic figures: Industrial production unexpectedly contracts

Chinese industrial production unexpectedly contracted in January. According to the statistics office in Beijing on Monday, the official Purchasing Managers’ Index (PMI) for the manufacturing sector fell from 50.1 in December to 49.1 in January. A value below 50 points signals a decline in economic activity.

Analysts had expected an average of 50.1 points. The figure is the lowest since August and puts more pressure on the Chinese government to stimulate the economy with new economic measures. The service sector also showed signs of a slowdown. The official Purchasing Managers’ Index for the non-manufacturing sector, which includes services and construction, fell from 52.2 in December to 50.2 in January.

Experts are particularly concerned about weak domestic demand. The government in Beijing has promised to support the economy with further stimuli until 2025. However, analysts fear that these measures will once again be primarily aimed at industry and infrastructure. Yet stimuli for private consumption are necessary to boost domestic demand and counteract deflationary tendencies, experts say.

The world’s second-largest economy achieved the government’s growth target of “around five percent” in 2024. However, it remained lopsided: exports and industrial production grew significantly faster than retail, while unemployment remained high. Exports were aided by falling producer prices and a weak yuan, which made Chinese products more competitive. US President Donald Trump has announced punitive tariffs of ten percent on Chinese imports effective February 1. This could highlight how much the Chinese economy depends on exports for its growth. On the other hand, rebounding consumption in China could make manufacturers less vulnerable to Trump’s tariff threats. rtr

  • Industrie

Healthcare system: Complaints about poor-quality pharmaceuticals on the rise

There is growing anger among doctors and the Chinese population about low-quality pharmaceuticals. According to Nikkei Asia, Shanghai surgeon Zheng Minhua was the first to point out problems with Chinese-made pharmaceuticals in an interview with Chinese media. Zheng and other doctors complain that cheap Chinese medicines are sometimes of such poor quality that they do not work.

Since the introduction of the centralized procurement system for medicines (Volume-Based Procurement, VBP), the quality of Chinese pharmaceuticals has declined. In an attempt to reduce the cost of medical care, the party introduced a bidding process in 2018, where the suppliers of the cheapest product are awarded the contract. Many foreign pharmaceutical companies have since withdrawn from China. Their products are barely available in Chinese hospitals. According to the New York Times, this has halved the prices of many drugs and saved Beijing 50 billion US dollars in the first five years.

Anger points to deeper problems

Today, almost all freely available medications on the Chinese market are so-called generics, i.e., low-priced imitations. The problem with this is that manufacturers often skimp on quality. Chinese doctors report allergic reactions to antibiotics, ineffective blood pressure drugs and anesthetics that do not fulfill their purpose. Yet many Chinese consumers are dependent on these inexpensive medicines. More expensive foreign pharmaceuticals are only available online and rarely covered by China’s national health insurance.

The concerns of Chinese doctors have now attracted the attention of the authorities. The National Administration of Healthcare announced it would investigate the allegations. It also stressed that the purchase of foreign medicines had never been prohibited. However, the current outrage over poor-quality pharmaceuticals may be an expression of a deeper problem: Since the Covid pandemic, healthcare in many provinces has been underfunded, reports a Shanghai doctor. Moreover, there have been repeated cases of fraud in the approval process for Chinese generics, bringing pharmaceuticals onto the market that do not match the quality of branded products. ek

  • Gesundheitssystem

New Silk Road: China’s solar installations reach record level

Last year, Chinese companies installed 24 gigawatts of power generation capacity in the partner countries of the “New Silk Road.” At eight gigawatts, solar power accounts for the largest share of this. Both figures are record values since the New Silk Road was established, according to a report by management consultants Wood Mackenzie. Just over half of the installed capacity in 2024 is renewable energy.

“Chinese companies are prioritizing greener technologies overseas, and these account for more than two-thirds of the project pipeline,” says Alex Whitworth, head of energy and renewables research for Asia Pacific at Wood Mackenzie. However, six gigawatts of coal-fired power have also been installed, despite the Chinese government’s stated goal of not building any new coal-fired power plants abroad.

Asia accounts for the majority of the capacity installed since the New Silk Road was established (70 percent). African countries are in second place with 15 percent. Africa’s solar imports from China have tripled in the last two years, as Alex Jones from Ember writes on Bluesky – albeit still from a very low level. nib

  • China

Heads

Chen Tianshi: He supplies China’s AI industry with chips

Chen Tianshi was the king of the Chinese stock market last year. No other company saw such strong growth on the Chinese stock market in 2024 as Cambricon, the semiconductor company Chen co-founded. Shares of the AI chip specialist, which some are already referring to as the Nvidia of China, rose by 383 percent in 2024. Investors and 40-year-old Chen must have been thrilled. His fortune is said to have increased to roughly 10 billion US dollars thanks to the stock market boom.

Two ingenious Chens

Tianshi Chen is considered a child prodigy in China. To be more precise, his family has two highly gifted children. According to reports in the Chinese media, Tianshi and his two years older brother Yunji Chen were accepted into a special talent program as young teenagers at the university in Hefei, Anhui province.

After graduating with a PhD in computer science, they took up positions at the Chinese Academy of Sciences. There, the brothers worked side by side in research for almost a decade until they founded Cambricon in 2016. Their goal: developing computer chips for AI applications that enable more energy-efficient devices at a lower price. While Yunji continued to focus on research and stayed at the academy, Tianshi took over as CEO and helped the company’s rapid growth.

Cambricon still behind Nvidia

Analysts say that Cambricon’s chips are still significantly inferior to Nvidia’s. However, Cambricon is one of China’s leading companies when it comes to advances in AI chips. Cambricon was originally an important supplier for Huawei’s first AI-supported smartphones. Now, however, the Shenzhen-based technology giant is developing its own AI chips with its subsidiary HiSilicon and has scaled back its partnership with Cambricon. Huawei and Cambricon are now competitors.

As Beijing specifically promotes advanced chip R&D amid tensions with the US, Chen and his company have good prospects for continued strong growth. “The localization of AI chips has become a big trend,” wrote the investment bank Minsheng Securities in a recent report, adding that domestic chip companies are continuing to catch up. And they have to because the US is exporting less and less AI technology to China. In mid-January, the Biden administration further restricted the export of AI chips to China and Russia. The US wants to secure its lead in AI and prevent China from using this technology to strengthen its military. Therefore, China must develop its own semiconductor industry.

His company will benefit from the US sanctions

The market should remain big enough for competitors Huawei and Cambricon. After all, the gap left by Nvidia is enormous. Reuters reports that the US company’s market share in China could slump from 80 percent to around 50 percent this year due to US export restrictions. Although Huawei will likely capture a large share of this, there is still enough room for Cambricon to grow.

Cambricon is not yet profitable. However, the fact that its market capitalization is already at 32 billion euros shows that investors have a lot of trust in Chen Tianshi. Analysts predict the company will double its revenue this year to 4.3 billion yuan (around 550 million euros). The company must still prove whether Cambricon can live up to this enthusiasm. But the current hype surrounding the Chinese AI industry and the start-up DeepSeek also shows that China’s development of an independent semiconductor industry is in full swing. Jörn Petring

  • Technology

Executive Moves

Torsten Wendler has been Head of Operations at VW China Technologies since January. In his new position, he oversees project and resource management for development projects as well as release and homologation management. Wendler has been working for VW in China since 2019, most recently as Head of Driving and ADAS / AD. He will remain based in Hefei.

Brad McCarthy has been appointed Managing Director and Asia-Pacific Head of Global Wealth by investment firm Carlyle. He was previously Head of Alternative Investment Sales for Asia Pacific at Citi Private Bank and Global Wealth.

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

Dessert

Isn’t he adorable? This six-legged robotic dog recently completed a series of scientific research tasks at the Chinese research station Zhongshan in Antarctica. It navigated through ice and snow without any problems while carrying a box on its back – it is said to be able to carry up to 100 kilograms. Special shoes, which his creators developed especially for him, prevent the robot dog from slipping in temperatures of up to minus forty degrees. In the future, the six-legged friend could even be used underwater. Or keep older people company with the help of AI technology.

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    For over 20 years, it has been a common practice among China’s wealthy families: Heavily pregnant Chinese women travel to the United States, preferably to California, to give birth to their baby, who then receives American citizenship. An entire industry has developed around this birth tourism. Travel agencies offer all-inclusive trips; postpartum centers care for the women on-site, assisted by specialized nurses. But Donald Trump now wants to abolish birthright citizenship by executive order. “The once commonplace sight of pregnant Chinese women strolling the streets of Rowland Heights in California may soon be gone forever,” writes Blanka Xia in her fascinating text about a very special form of Chinese tourism.

    Our second text is also about the relationship between the United States and China. China’s exporters benefit from the little-known “de minimis” rule, which allows duty-free imports of goods up to 800 US dollars. The EU has a similar regulation, which allows packages with a value of less than 150 euros to be imported duty-free. This primarily benefits Chinese online retailers such as Shein, Temu and AliExpress. Trump now wants to close the loophole, which could even impact China’s growth figures, writes Jörn Petring.

    And finally, today’s Profile also touches on Sino-American relations. It features the “king of the Chinese stock market” Chen Tianshi, co-founder and CEO of the technology group Cambricon, which many are already referring to as the Chinese Nvidia. Cambricon still lags behind its US competitor in developing advanced AI chips. However, Chen benefits from the US export controls, which aim to prevent the import of advanced semiconductors to China. The gap Nvidia leaves behind in China is huge. The US company’s market share in China could collapse from 80 percent to around 50 percent this year due to the US export controls, writes Jörn Petring. This promises massive growth opportunities for Chen.

    Your
    Angela Köckritz
    Image of Angela  Köckritz

    Feature

    USA: Why Chinese birth tourism could soon be a thing of the past

    Chinese superstar Zhang Ziyi also went to the United States to give birth to her child. Seen here on the red carpet of the Venice International Film Festival in September 2024.

    When Donald Trump signed an executive order on January 20 prohibiting the acquisition of US citizenship for children born in the US to illegal immigrants or people with temporary visas, he sent many Chinese families into a state of shock. “I arrived in the US a few weeks ago and the due date is February 20. Can the child still get US citizenship automatically? The sky has fallen now,” wrote one user on Xiaohongshu (小红书).

    Whether Trump’s executive order can be implemented easily remains open since the 14th Amendment to the US Constitution (14A) expressly stipulates the birthright to citizenship. But panic has already broken out among many Chinese families. For over 20 years, pregnant Chinese women have been traveling to the United States to give birth. Giving birth in the US has become a common practice for many wealthy Chinese families. In the past, many wanted to escape China’s one-child policy. Today, some see it as a first step towards future immigration to the US. Others are drawn to the quality of the American education system or hope for a better life for their children.

    Such posts can be found in abundance on social media. Mr. Chen from Shanghai explains: “The medical standards in American private clinics are excellent. A private clinic of a comparable standard in Shanghai costs around 150,000 RMB (just under 20,000 euros), while the total cost of giving birth in the United States is just over 300,000 RMB (just under 40,000 euros).” Ms. Luo from Shenzhen traveled to Los Angeles in 2017 to give birth to her second daughter. Looking back, she says: “We didn’t have the financial means before, but now we can afford it. I want to offer my children more opportunities. With an American passport for my daughter, it will also be easier for us to immigrate to the US later.”

    Lawsuit anchored birthright citizenship in the US

    The trend of birth tourism can be traced back to the early 2000s. According to a report in the magazine Huanqiu (环球), around 600 Chinese women traveled to the United States to give birth in 2007. Five years later, the number had risen to 10,000; one year later, it had doubled. In the following years, their numbers grew exponentially. From 2016 until the start of the pandemic, 80,000 Chinese women traveled to the US every year to make use of the 14th Amendment to the US Constitution.

    It was originally passed after the end of the American Civil War and made it possible for freed African-American slaves and their children to obtain US citizenship. Later, people from other ethnic groups sought equal rights, the most well-known being the case of Wong Kim Ark (黄金德).

    Wong Kim Ark was born in San Francisco, California. His parents were immigrants from Guangdong, China. Thanks to the 14th Amendment to the Constitution, he became a US citizen. After receiving his citizenship, he traveled to China twice. However, when he wanted to return to the United States for the second time, he was denied entry by the US customs authorities due to the “Chinese Exclusion Act.” This 1882 law barred Chinese workers from immigrating to the United States for ten years. Wong subsequently sued the US government to defend his civil rights. The case went all the way to the Supreme Court, where Wong eventually won.

    In 1898, the US Supreme Court ruled that Wong Kim Ark was a US citizen by birth, even though his parents were Chinese nationals. His case ultimately established birthright citizenship in the United States.

    A hit movie fuels a booming industry

    In recent years, numerous Chinese celebrities such as presenter Dong Qing (董卿), journalist Chai Jing (柴静), actress Zhang Ziyi (章子怡) and the wife of Olympic boxing champion Zhou Shiming (邹市明) have given birth to their children in the United States.

    The highly popular film Finding Mr. Right (北京遇上西雅图) tells the story of Wen Jiajia (played by Tang Wei 汤唯), who travels alone to the US city of Seattle to give birth to her child. In a so-called postpartum care center (月子中心), Jiajia meets a group of Chinese women who have come to the United States to give birth for various reasons. The film was not only a box-office hit, but also acted as an advertisement for the already booming industry.

    The steadily growing demand has created a thriving industry. Agencies in China offer packages ranging from visa application, travel planning and accommodation to medical care, legal advice and educational planning. Typically, accommodation, food and transportation costs between 200,000 and 500,000 RMB, roughly equivalent to 26,300 and 65,730 euros, with agency fees accounting for around 20 to 40 percent of the total cost.

    Most women generally travel to the United States around the seventh month of pregnancy and stay there for three months. California is the most popular destination, especially Los Angeles. The climate, the comparatively low medical costs and the large Chinese community have led to numerous postpartum care centers popping up here. According to Phoenix Television(凤凰卫视), there were over 3,000 such Chinese-run centers by 2017, most of which are located in mansions. In Rowland Heights, a popular Los Angeles neighborhood, 80 percent of the residents at the time were said to be pregnant women. Typically, five to seven expectant mothers live in such a villa. The centers provide daily meals, organize check-ups, shopping trips and postnatal care. One caregiver, referred to as “nanny(月嫂),” often looks after seven to eight mothers simultaneously. Most of these centers operate illegally – they do not have an official operating license and do not pay taxes.

    Residents organize protests against postpartum care centers

    This vast illegal business activity not only affects the lives of local residents, but has also led to declining property prices. Many residents organized protests against this practice. In March 2015, the FBI, immigration authorities and the tax authorities conducted a massive raid in Southern California. Numerous facilities were closed.

    Since the outbreak of the pandemic and the deterioration of relations between China and the US, travel has become increasingly difficult for Chinese nationals. During Trump’s first term in office, the US State Department already ruled that birth tourism was not an acceptable reason for a so-called B2 visa, which led to a drastic decrease in visa approvals. Due to the increasing risks, many Chinese women have put their plans on hold. Many centers in Los Angeles have had to close as a result. Perhaps the once commonplace sight of pregnant Chinese women strolling the streets of Rowland Heights could soon be gone forever. Blanka Xia

    • Gesellschaft

    Tariffs: How Trump plans to deal a blow to Chinese exporters

    Revoking or restricting the de minimis rule is primarily aimed at Chinese exporters such as Shein.

    Contrary to what he originally announced, Donald Trump did not directly introduce new tariffs against China on his first day in office. Instead, he signed a memorandum called “America First Trade Policy.” In it, he instructed the authorities to investigate the causes of the United States’ persistent trade deficits.

    Nevertheless, Beijing is not in the clear yet. During his first term eight years ago, Trump also had a similar investigation launched. He only then launched a tariff war against China based on the results. The document he has now signed sheds light on what could be in store for China in just a few weeks. Trump’s memorandum explicitly questions the so-called “de minimis” rule.

    Goods up to 800 US dollars may enter the USA duty-free

    This allows goods for private use to be imported into the United States without the usual duties and customs procedures. The EU also has a rule that allows packages with a value of less than 150 euros to be imported duty-free. Chinese online retailers such as Shein are taking advantage of this and splitting orders into several parcels to avoid customs duties, which has triggered massive discussions in Europe.

    However, in America of all places, Chinese retailers have had it a lot easier so far as the country has the highest “de minimis” limit in the world. Goods up to 800 dollars can enter America duty-free. The main beneficiaries are online retailers based in China, such as Shein, Temu, and AliExpress, which have massively expanded their exports to the USA.

    As Reuters reports, citing US customs data, shipments that fall under the duty-free rule have increased by more than 600 percent to over one billion items in the last ten years. Around four million parcels arrive in the United States every day – many of them from China.

    Effects on exports and GDP growth

    China reportedly recently shipped the equivalent of 240 billion dollars worth of goods worldwide. If “de minimis” were to be massively restricted or even completely revoked in both the EU and the USA, this would strike a significant blow to China’s foreign trade. Nomura Bank estimates that ending the trade rule would slow China’s export growth by 1.3 percentage points and GDP growth by 0.2 points. Sectors such as clothing and electronics, which account for many de minimis exports, would be particularly affected.

    Companies like Shein, the world’s largest fast fashion giant, would face massive challenges. They would probably have to raise their prices by 15 to 20 percent to compensate for tariffs – a risk as their business model is based on low prices and narrow margins. With the possible abolition of the de minimis rule, Trump is addressing an issue that has already received attention under the Biden administration. In September 2024, the Biden administration announced measures to restrict the use of the de minimis exemption.

    Calls for 100 percent tariffs

    Trump’s plans could go much further, especially as he would address two issues from his election campaign. On the one hand, the high trade deficit with China is a thorn in his side, and on the other, he has announced a crackdown on the fentanyl trade. Precursors of the synthetic opioid, which is the cause of a significant number of overdose deaths in the US, can enter the US in small packages virtually unchecked thanks to the “de minimis” rule.

    Accompanied by Trump’s memorandum, the US Congress has already positioned itself. On January 23, congress members introduced a bipartisan bill that aims to abolish the de minimis exemption. However, the paper submitted to Congress goes even further. It calls for a complete restructuring of trade relations with China.

    The bill envisages the gradual introduction of substantial tariffs, starting at 10 percent in the first year and increasing to 100 percent within five years. Trump may have been less focused on China in his first few days in office than observers predicted. However, it is clear that drastic changes are in the pipeline.

    • Handelskrieg

    News

    Stock market turmoil and cyberattack: DeepSeek sparks unrest

    Fears of a crash in the technology sector following the success of a new AI model are weighing on stock markets in Europe. The Chinese AI assistant R1 from DeepSeek, launched on January 10, overtook rival ChatGPT as the top-rated free software application in Apple’s App Store in the US on Monday. Due to its popularity, the website was briefly unavailable. On Monday evening, the company also announced that it had to temporarily restrict the registration of new users due to cyberattacks.

    Hangzhou-based DeepSeek was founded in 2023 with a start-up capital of just 10 million yuan (1.4 million US dollars). According to Chinese media reports, it has fewer than 200 employees, some of whom are very young, including recent graduates. The staff comes from top Chinese universities such as Tsinghua and Beijing University.

    DeepSeek raised attention by developing models requiring less energy that can compete in benchmarks with leading Western AI products. Its success also raises questions about the impact of US export restrictions, as China appears to have made considerable progress despite trade barriers for semiconductors and other advanced technologies.

    Powered by Nvidia?

    According to a report in the Financial Times, company founder Liang Wenfeng may also have purchased thousands of GPUs from Nvidia for another company before the US export ban came into force in October 2023. Liang founded the hedge fund High-Flyer in 2016, which uses machine learning to analyze financial data and design AI-based trading strategies. In any case, DeepSeek is more efficient than its competition, as it requires fewer resources for comparable applications. This is all the more remarkable as the chips, if they are actually from Nvidia, are outdated by now. “We should take the developments out of China very, very seriously,” explained Microsoft CEO Satya Nadella at the World Economic Forum in Davos. The unpleasant truth is that the US restrictions have virtually forced Chinese companies like DeepSeek to become more independent and efficient, said Angela Zhang, a professor specializing in tech, in the Financial Times. However, DeepSeek, like all Chinese AI models, is subject to state censorship and filters out sensitive topics, such as the Tiananmen protests or criticism of Xi Jinping.

    The success of the new open-source AI model has also fuelled fears of a sell-off in the technology sector: DeepSeek’s development stage and speed of development are causing investors to reconsider their investments. Shares in the German electrical engineering group Siemens Energy, which offers AI infrastructure hardware, fell by more than 20 percent on Monday. Suss MicroTec, Aixtron and Infineon also dropped by between four and almost twelve percent. The Dutch industry giants ASML, ASM International and BE Semiconductor lost between almost 10 to over 13 percent. rtr/fpe/jul

    • Stock Exchange

    Economic figures: Industrial production unexpectedly contracts

    Chinese industrial production unexpectedly contracted in January. According to the statistics office in Beijing on Monday, the official Purchasing Managers’ Index (PMI) for the manufacturing sector fell from 50.1 in December to 49.1 in January. A value below 50 points signals a decline in economic activity.

    Analysts had expected an average of 50.1 points. The figure is the lowest since August and puts more pressure on the Chinese government to stimulate the economy with new economic measures. The service sector also showed signs of a slowdown. The official Purchasing Managers’ Index for the non-manufacturing sector, which includes services and construction, fell from 52.2 in December to 50.2 in January.

    Experts are particularly concerned about weak domestic demand. The government in Beijing has promised to support the economy with further stimuli until 2025. However, analysts fear that these measures will once again be primarily aimed at industry and infrastructure. Yet stimuli for private consumption are necessary to boost domestic demand and counteract deflationary tendencies, experts say.

    The world’s second-largest economy achieved the government’s growth target of “around five percent” in 2024. However, it remained lopsided: exports and industrial production grew significantly faster than retail, while unemployment remained high. Exports were aided by falling producer prices and a weak yuan, which made Chinese products more competitive. US President Donald Trump has announced punitive tariffs of ten percent on Chinese imports effective February 1. This could highlight how much the Chinese economy depends on exports for its growth. On the other hand, rebounding consumption in China could make manufacturers less vulnerable to Trump’s tariff threats. rtr

    • Industrie

    Healthcare system: Complaints about poor-quality pharmaceuticals on the rise

    There is growing anger among doctors and the Chinese population about low-quality pharmaceuticals. According to Nikkei Asia, Shanghai surgeon Zheng Minhua was the first to point out problems with Chinese-made pharmaceuticals in an interview with Chinese media. Zheng and other doctors complain that cheap Chinese medicines are sometimes of such poor quality that they do not work.

    Since the introduction of the centralized procurement system for medicines (Volume-Based Procurement, VBP), the quality of Chinese pharmaceuticals has declined. In an attempt to reduce the cost of medical care, the party introduced a bidding process in 2018, where the suppliers of the cheapest product are awarded the contract. Many foreign pharmaceutical companies have since withdrawn from China. Their products are barely available in Chinese hospitals. According to the New York Times, this has halved the prices of many drugs and saved Beijing 50 billion US dollars in the first five years.

    Anger points to deeper problems

    Today, almost all freely available medications on the Chinese market are so-called generics, i.e., low-priced imitations. The problem with this is that manufacturers often skimp on quality. Chinese doctors report allergic reactions to antibiotics, ineffective blood pressure drugs and anesthetics that do not fulfill their purpose. Yet many Chinese consumers are dependent on these inexpensive medicines. More expensive foreign pharmaceuticals are only available online and rarely covered by China’s national health insurance.

    The concerns of Chinese doctors have now attracted the attention of the authorities. The National Administration of Healthcare announced it would investigate the allegations. It also stressed that the purchase of foreign medicines had never been prohibited. However, the current outrage over poor-quality pharmaceuticals may be an expression of a deeper problem: Since the Covid pandemic, healthcare in many provinces has been underfunded, reports a Shanghai doctor. Moreover, there have been repeated cases of fraud in the approval process for Chinese generics, bringing pharmaceuticals onto the market that do not match the quality of branded products. ek

    • Gesundheitssystem

    New Silk Road: China’s solar installations reach record level

    Last year, Chinese companies installed 24 gigawatts of power generation capacity in the partner countries of the “New Silk Road.” At eight gigawatts, solar power accounts for the largest share of this. Both figures are record values since the New Silk Road was established, according to a report by management consultants Wood Mackenzie. Just over half of the installed capacity in 2024 is renewable energy.

    “Chinese companies are prioritizing greener technologies overseas, and these account for more than two-thirds of the project pipeline,” says Alex Whitworth, head of energy and renewables research for Asia Pacific at Wood Mackenzie. However, six gigawatts of coal-fired power have also been installed, despite the Chinese government’s stated goal of not building any new coal-fired power plants abroad.

    Asia accounts for the majority of the capacity installed since the New Silk Road was established (70 percent). African countries are in second place with 15 percent. Africa’s solar imports from China have tripled in the last two years, as Alex Jones from Ember writes on Bluesky – albeit still from a very low level. nib

    • China

    Heads

    Chen Tianshi: He supplies China’s AI industry with chips

    Chen Tianshi was the king of the Chinese stock market last year. No other company saw such strong growth on the Chinese stock market in 2024 as Cambricon, the semiconductor company Chen co-founded. Shares of the AI chip specialist, which some are already referring to as the Nvidia of China, rose by 383 percent in 2024. Investors and 40-year-old Chen must have been thrilled. His fortune is said to have increased to roughly 10 billion US dollars thanks to the stock market boom.

    Two ingenious Chens

    Tianshi Chen is considered a child prodigy in China. To be more precise, his family has two highly gifted children. According to reports in the Chinese media, Tianshi and his two years older brother Yunji Chen were accepted into a special talent program as young teenagers at the university in Hefei, Anhui province.

    After graduating with a PhD in computer science, they took up positions at the Chinese Academy of Sciences. There, the brothers worked side by side in research for almost a decade until they founded Cambricon in 2016. Their goal: developing computer chips for AI applications that enable more energy-efficient devices at a lower price. While Yunji continued to focus on research and stayed at the academy, Tianshi took over as CEO and helped the company’s rapid growth.

    Cambricon still behind Nvidia

    Analysts say that Cambricon’s chips are still significantly inferior to Nvidia’s. However, Cambricon is one of China’s leading companies when it comes to advances in AI chips. Cambricon was originally an important supplier for Huawei’s first AI-supported smartphones. Now, however, the Shenzhen-based technology giant is developing its own AI chips with its subsidiary HiSilicon and has scaled back its partnership with Cambricon. Huawei and Cambricon are now competitors.

    As Beijing specifically promotes advanced chip R&D amid tensions with the US, Chen and his company have good prospects for continued strong growth. “The localization of AI chips has become a big trend,” wrote the investment bank Minsheng Securities in a recent report, adding that domestic chip companies are continuing to catch up. And they have to because the US is exporting less and less AI technology to China. In mid-January, the Biden administration further restricted the export of AI chips to China and Russia. The US wants to secure its lead in AI and prevent China from using this technology to strengthen its military. Therefore, China must develop its own semiconductor industry.

    His company will benefit from the US sanctions

    The market should remain big enough for competitors Huawei and Cambricon. After all, the gap left by Nvidia is enormous. Reuters reports that the US company’s market share in China could slump from 80 percent to around 50 percent this year due to US export restrictions. Although Huawei will likely capture a large share of this, there is still enough room for Cambricon to grow.

    Cambricon is not yet profitable. However, the fact that its market capitalization is already at 32 billion euros shows that investors have a lot of trust in Chen Tianshi. Analysts predict the company will double its revenue this year to 4.3 billion yuan (around 550 million euros). The company must still prove whether Cambricon can live up to this enthusiasm. But the current hype surrounding the Chinese AI industry and the start-up DeepSeek also shows that China’s development of an independent semiconductor industry is in full swing. Jörn Petring

    • Technology

    Executive Moves

    Torsten Wendler has been Head of Operations at VW China Technologies since January. In his new position, he oversees project and resource management for development projects as well as release and homologation management. Wendler has been working for VW in China since 2019, most recently as Head of Driving and ADAS / AD. He will remain based in Hefei.

    Brad McCarthy has been appointed Managing Director and Asia-Pacific Head of Global Wealth by investment firm Carlyle. He was previously Head of Alternative Investment Sales for Asia Pacific at Citi Private Bank and Global Wealth.

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

    Dessert

    Isn’t he adorable? This six-legged robotic dog recently completed a series of scientific research tasks at the Chinese research station Zhongshan in Antarctica. It navigated through ice and snow without any problems while carrying a box on its back – it is said to be able to carry up to 100 kilograms. Special shoes, which his creators developed especially for him, prevent the robot dog from slipping in temperatures of up to minus forty degrees. In the future, the six-legged friend could even be used underwater. Or keep older people company with the help of AI technology.

    China.Table editorial team

    CHINA.TABLE EDITORIAL OFFICE

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