Connect with us

ASIA

China-Pakistan defense ties under threat from new U.S. sanctions

Published

on

Recent U.S. sanctions targeting Chinese missile technology suppliers are seen as a potential risk to the longstanding defense ties between China and Pakistan.

The U.S. State Department has imposed sanctions on the Beijing Machinery Manufacturing Industry Automation Research Institute, accusing the company of supplying equipment used to test missile engines in Pakistan. The sanctions were extended to three additional Chinese companies—Hubei Huachangda Intelligent Equipment, Xi’an Longde Technology Development, and Universal Enterprise—along with Pakistan-based Innovative Equipment, owned by Chinese national Luo Dongmei. These entities are alleged to have transferred equipment regulated under the Missile Technology Control Regime (MTCR).

Washington claims the sanctioned companies provided materials for Pakistan’s Hawk 3 and Ababil ballistic missile programs. The Hawk 3 is a medium-range missile capable of reaching targets up to 2,750 kilometers, posing a strategic threat to neighboring India and parts of the Middle East. The Ababil missile, with a range of 1,800 kilometers, serves a similar tactical purpose.

Part of broader U.S. strategy

Security analysts argue the sanctions are part of a broader U.S. effort to curb China’s rising influence rather than a direct action against Pakistan. “This is more about containing China’s growth than targeting Pakistan specifically,” said Syed Muhammad Ali, a security expert based in Islamabad, in an interview with Nikkei Asia.

Ali emphasized that there is limited evidence linking China directly to Pakistan’s nuclear-capable missile programs. He noted that the majority of China-Pakistan defense cooperation centers on conventional weapons, aimed at strengthening Pakistan’s air force, army, and navy, rather than its missile development capabilities.

The Pakistani government quickly condemned the sanctions as politically motivated. “It is no secret that certain countries, while professing strict adherence to non-proliferation standards, selectively overlook licensing requirements for advanced military technologies when it suits their strategic interests,” said Pakistani Foreign Office spokesperson Mumtaz Zahra Baloch.

Enduring China-Pakistan defense ties

China remains Pakistan’s largest arms supplier, accounting for 44% of Pakistan’s major arms imports between 2000 and 2023, according to the Stockholm International Peace Research Institute (SIPRI). The two nations have a deep history of defense collaboration, including the joint development of the JF-17 fighter jet and the Al-Khalid main battle tank. Recent procurements include J-10C aircraft, Wing Loong II drones, and Hangor-class submarines.

While the sanctions may not immediately impact Pakistan’s missile programs, experts warn of long-term consequences for defense cooperation. “Pakistan has no other significant partner for missile development if China continues to face U.S. sanctions,” said Michael Kugelman, director of the Wilson Center’s South Asia Institute.

Future challenges

The sanctions could complicate future defense transactions between China and Pakistan, as the dominance of the U.S. dollar may compel Chinese companies to comply with U.S. restrictions. Ayesha Siddiqa, a senior research fellow at King’s College London, pointed out that such financial dominance could make Chinese firms more cautious in future dealings with Pakistan.

Experts also warn that continued U.S. sanctions could strain Pakistan’s role in the broader U.S.-China geopolitical rivalry. “If China becomes less accessible due to these sanctions, Pakistan may be forced to look elsewhere for defense partners, a process that could take years,” Kugelman added. Pakistan’s past involvement in nuclear proliferation may further complicate its search for alternative suppliers.

Siddiqa noted that the sanctions are likely aimed at reassuring U.S. allies in the Indo-Pacific region, emphasizing Washington’s commitment to countering the perceived threat of missile proliferation in the area.

ASIA

China’s BYD prepares to launch latest SUV, the Sealion 07, in Europe despite EU tariffs

Published

on

BYD, the world’s largest electric vehicle (EV) maker, is set to launch its latest SUV, the Sealion 07, in Europe, undeterred by recent tariff increases on Chinese-made electric vehicles. This strategic move highlights BYD’s commitment to expanding overseas sales despite economic barriers.

Deliveries of the Sealion 07 are scheduled to begin in 2025, marking BYD’s seventh all-electric model in the European market, the company announced on Wednesday. Additionally, BYD plans to enter the South Korean market next year, adding to its existing presence in 95 countries worldwide.

This European expansion comes on the heels of the European Union’s decision last month to impose new tariffs—ranging from 17% to 35.3%—on Chinese electric vehicles following an anti-subsidy investigation. BYD’s EVs are subject to a 17% tariff, in addition to the standard 10% tariff applied to all pure electric cars imported from China. These tariffs, which took effect last month, will remain in place for five years. Meanwhile, U.S. tariffs on Chinese-made EVs increased from 25% to 100% as of September, citing similar concerns.

Despite the added costs, BYD’s vehicles continue to hold strong appeal in export markets. “BYD’s vehicles remain attractive even after the additional tariffs, so it’s not really a big problem for the company,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, a leading industry consultancy. “The Sealion 07 exemplifies how BYD’s cost advantage enables it to counteract such trade barriers in key export markets.”

Shenzhen-based BYD has yet to disclose the European pricing for the Sealion 07. On the mainland, the SUV—featuring a range of 450 kilometers—starts at 189,800 yuan (approximately US$26,272), with deliveries beginning in May.

According to a report last year from UBS analysts, BYD has a sustainable cost advantage of 25% over traditional European brands.

Continue Reading

ASIA

Singles’ day promotions target overseas Chinese as China’s domestic demand slows

Published

on

After last year’s Singles’ Day shopping festival in China was dubbed the “quietest in history,” China’s e-commerce platforms focused on a new strategy this year.

For this year’s Singles’ Day event, major e-commerce companies such as Alibaba, JD.com, and Pinduoduo invested heavily in expanding overseas markets, targeting the estimated 100 million Chinese living abroad with offers like discounts and free or low-cost shipping.

The central question, however, is not whether these efforts will succeed in the short term, but rather if this shift can help platforms grow their user bases as online sales growth in China reaches a bottleneck.

“Domestic consumption is quite weak right now, and every company is certainly considering new ways to drive growth for Singles’ Day,” said an executive at a leading online retailer, who requested anonymity. “The overseas market is widely seen as a promising source for additional growth,” he added in an interview with Nikkei Asia.

Singles’ Day, a one-day sales event launched by Alibaba in 2009 as a celebration for singles, has since evolved into a month-long campaign with special offers and deep discounts, culminating on or around November 11.

This year, China aimed to revitalize its retail sector with the event. Total consumer goods sales rose by 3.3% year-on-year in the first three quarters of 2024, though high-end consumer spending remained stagnant. Cosmetics sales fell by 1%, while gold and silver jewelry sales declined by 3.1% year-on-year.

Last month, Alibaba’s Taobao launched a significant marketing campaign in Hong Kong and Taiwan, flooding subway stations with advertisements for “free shipping on orders over 99 yuan,” among other offers. According to the company, the campaign cost 2 billion New Taiwan dollars ($61.7 million) in Taiwan and 1 billion yuan ($138 million) in Hong Kong.

Following Alibaba’s move, JD.com announced it had invested 1.5 billion yuan to offer discounted product prices and cheaper shipping to Hong Kong shoppers. Bargain platform Pinduoduo took it a step further, offering free shipping via courier SF Express for Hong Kong shoppers, regardless of the item’s price. All products on these platforms are shipped from mainland China.

A spokesperson from Alibaba’s International Digital Commerce Group noted that since the overseas initiative launched in October, Taobao Hong Kong has achieved double-digit growth in both orders and gross merchandise value (GMV)—a metric that excludes canceled orders—on both a monthly and year-on-year basis.

The platforms are also targeting Chinese shoppers in Malaysia, Thailand, and Singapore.

This year, unlike in previous years, shoppers could combine online discounts with a subsidy program introduced by the Chinese government to boost domestic consumption, primarily for home appliances and household products. Analysts suggest these incentives will likely boost sales for JD.com, which is known for selling high-quality large appliances and offering after-sales services.

While JD.com has yet to release sales or GMV figures for home appliances during the shopping festival, it is expected to share its June-September results, along with Alibaba, later this week.

Last year, data provider Syntun estimated that total GMV on major e-commerce platforms grew by only 2.1% to 1.14 trillion yuan, falling short of the 2.9% growth forecast for 2022. Similarly, consultancy Bain predicted that Singles’ Day sales would reach 1.15 trillion yuan in 2023.

On Tuesday morning, Alibaba announced “strong GMV growth” and a “record number” of active shoppers for this year’s Singles’ Day event.

Continue Reading

ASIA

Japanese PM Ishiba to lead fragile minority government

Published

on

Japanese lawmakers voted on Monday to retain Prime Minister Shigeru Ishiba as leader after his scandal-plagued coalition lost its parliamentary majority in the House of Representatives elections last month.

Ishiba, who has called for early elections since taking office on October 1, now faces the challenge of leading a fragile minority government amid Donald Trump’s return to office, rising tensions with China and North Korea, and increasing domestic pressure to address the cost-of-living crisis.

As expected, Ishiba won 221 votes, surpassing his closest rival, former Prime Minister Yoshihiko Noda of the Constitutional Democratic Party, but he still fell short of a majority in the 465-seat House of Representatives.

Japan’s Upper House elections are scheduled for next year, where the ruling coalition’s slim majority could be at risk if Ishiba cannot restore public confidence shaken by recent scandals over off-the-books donations to lawmakers.

Amid pressure from voters and opposition parties to increase welfare spending and stabilize rising prices, Ishiba’s primary challenge is to prepare a supplementary budget for the fiscal year ending in March. This budget will require support from at least one opposition party to pass, likely the Democratic Party for the People (DPP), led by Yuichiro Tamaki.

While Tamaki has held cooperation talks with Ishiba, DPP lawmakers on Friday did not vote to retain Ishiba as prime minister. Tamaki himself faces scrutiny after acknowledging an extramarital affair, which was reported by a tabloid on Monday.

Following his reappointment, Ishiba appointed new ministers for transport, justice, and agriculture to replace LDP lawmakers who lost their seats in the House of Representatives.

Looking ahead, Ishiba must prepare for key international engagements, including the G20 summit in Brazil on November 18-19. He is also working to coordinate a visit with Trump in the US, aiming to reestablish a close relationship with the U.S. president-elect.

During Trump’s first term (2017-2021), Japan largely avoided protectionist trade measures and cost-sharing demands for the US military presence thanks to Trump’s strong relationship with then-Prime Minister Shinzo Abe—a rapport Ishiba seems eager to rebuild.

Continue Reading

MOST READ

Turkey