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US deploys medium-range missile system in Indo-Pacific for first time, China reacts

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The US military has deployed its new Typhon medium-range surface-to-surface missile launcher to the Indo-Pacific region for the first time for joint military exercises in the northern Philippines, in a move likely to unsettle China.

The US military announced on Monday that it sent the launcher, capable of firing Tomahawk cruise missiles and SM-6 missiles, to the Northern Luzon region of the Philippines for the Salaknib 2024 joint military exercise.

“In a historic first, the 1st Multi-Domain Task Force successfully deployed the Medium Range Capability (MRC) missile system to the Northern Luzon region of the Philippines on 11 April 2024 as part of the Salaknib 24 Exercise,” the statement said. “This important deployment marks an important milestone for the new capability while improving interoperability, readiness and defence capabilities in coordination with the Armed Forces of the Philippines.”

A stone’s throw away from Taiwan

Although the military did not specify the exact location where the launcher was deployed for the exercise, the US military currently has access to five different sites on the island of Luzon, the largest and most populous island in the Philippine archipelago.

The island, the northernmost point of the Philippines, lies about 100 kilometres (62 miles) off Taiwan. Senator Maria Imelda Marcos, formerly chairwoman of the Philippine Senate Foreign Affairs Committee and sister of President Ferdinand Marcos, said in a meeting with defence officials, “Gentlemen, what is our struggle with Taiwan? What is our war with Taiwan? I don’t understand, why are we conducting all military exercises in Luzon… a stone’s throw from Taiwan?”

Given that Tomahawk missiles have a range of more than 1,600 kilometres, any deployment there would not only cover the entire Luzon Strait, but could also target parts of the Chinese coast and various People’s Liberation Army bases in and around the disputed South China Sea.

The commander of the US military in the Pacific, General Charles Flynn, recently reiterated comments he made in December that the US would deploy a medium-range missile launcher in the region.

“I’m not going to discuss which system it is, I’m not going to say where or when, I’m just saying that long-range precision firing capability will come to the region,” Flynn said on 3 April.

China said the official deployment of long-range missiles to the Indo-Pacific region would be a “dangerous trend” and would lead to a strong response from Beijing.

“China is firmly opposed to this and will take decisive countermeasures,” Chinese Defence Ministry spokesman Wu Qian told a news conference on Friday. We urge the United States to truly respect the security concerns of other countries and stop undermining regional peace and stability,” Wu Qian, a spokesman for the Chinese Defence Ministry, told a news conference on Friday.

Japan was also among the possibilities

The US Army announced last year that the system, which has four trailer-based launchers and other supporting equipment, had conducted a series of successful tests with Tomahawk and SM-6 missiles.

Although it has often been suggested that Japan could host the system, this has not been possible due to difficulties in securing public understanding. Deploying the system in the country would make its deployment sites a target for China’s own powerful missile arsenal.

Nevertheless, US officials have hinted that temporary transfers to Japan for training are a possibility.

Permanent but dangerous option Guam

A more permanent deployment of the system in the region could be on the US territory of Guam, home to a large military base. Such a move would be the first since the Cold War and would allow China to increase its stockpile of powerful missiles capable of striking Japan and US military bases in the Pacific.

The Intermediate-Range Nuclear Forces Treaty (INF), signed in 1987 between the United States and the then Soviet Union, banned all conventional and nuclear land-based missiles capable of travelling between 500 km and 5,500 km (310 miles and 3,400 miles). However, the United States withdrew from the INF in 2019, claiming that the Russians were secretly testing and fielding missiles in violation of the treaty.

Beijing, which is not part of the INF Treaty, is estimated to have 1,850 missiles with a range of 1,000 km to 5,500 km, according to the Pentagon’s latest annual report on the Chinese military.

Defenders of the system have said that a rotational, shorter deployment to Guam, or possibly to or near US Asian allies, could help strengthen deterrence against China.

Critics, however, warned that such a move would force China to further strengthen its already powerful missile and nuclear forces and bring Washington and Beijing closer to a conflict that both say they are trying to avoid.

ASIA

BYD shares soar on promise of ‘5-minute EV charge’

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Shares of BYD, China’s electric vehicle (EV) champion, hit a new record high on Tuesday after its founder, Wang Chuanfu, claimed their EVs can now charge as quickly as filling a car with traditional fuel.

BYD, a rival to Tesla, saw its shares rise by over 6% in early trading in Hong Kong, reaching HK$408.80 (approximately $52.62) per share, marking an approximate gain of 85% over the last 12 months.

The company’s billionaire founder, Wang, stated on Monday that the new charging system developed by the Shenzhen group for BYD’s own EV batteries can add approximately 470 km of range in five minutes.

This claim suggests that BYD has surpassed competitors like Tesla and Mercedes-Benz in fast-charging technology, although the new system depends on several preconditions, including sufficient voltage at charging stations.

There is increasing competition among EV and battery manufacturers to establish faster charging infrastructure to help alleviate consumer concerns about the driving range and charging speed of EVs compared to traditional internal combustion engine vehicles.

According to Chris Liu, a Shanghai-based senior analyst at Omdia consulting, China is estimated to install approximately 460,000 new public EV chargers this year, accounting for about two-thirds of the global total, bringing cumulative units to approximately 2.1 million.

BYD’s recent share price increase comes a month after the company shook the global automotive industry by launching a free advanced autonomous driving system, dubbed “God’s Eye,” which it plans to install in its entire new car series.

These moves put further pressure on Elon Musk’s Tesla and Germany’s Volkswagen, as well as a host of domestic competitors, who have been losing market share as EV sales have exploded in China in recent years.

According to data from Automobility, a consulting firm in Shanghai, BYD already holds approximately 35% of the Chinese EV market. It has an 18% share in the pure battery EV segment and a 56% share in the plug-in hybrid segment.

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China’s AsiaInfo expands with DeepSeek-powered AI

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China’s largest telecom software infrastructure provider says that working with artificial intelligence (AI) startup DeepSeek is helping the company develop its own AI capabilities, which it will use to expand in Southeast Asia, Africa, and the Middle East.

AsiaInfo Technologies CTO Ouyang Ye said in an exclusive interview with Nikkei Asia that the company’s collaboration with DeepSeek began well before it rose to global prominence earlier this year with a low-cost approach to developing AI models.

Ouyang said that AsiaInfo also works closely with other top-tier Chinese large language models (LLMs) such as Alibaba Cloud’s Tongyi Qianwen and ByteDance’s Doubao, but that the rise of the open-source DeepSeek model is what facilitates and accelerates the deployment of the company’s various AI solutions.

“Our telecom infrastructure software solutions for China Mobile, China Telecom, and China Unicom fully support DeepSeek’s model,” said Ouyang, referring to the country’s three major telecom providers. He said that his company was the first in the industry to embed and fully support DeepSeek.

According to research by AsiaInfo and Tsinghua University, DeepSeek’s model performs well in specialized technical areas such as monitoring network failures and optimizing wireless communication performance.

The CTO said that, for example, China Unicom’s Guangdong subsidiary used AsiaInfo’s DeepSeek-enhanced solutions in February to optimize service efficiency. This initiative reduced training costs by 75%, enhanced AI assistant capabilities, accelerated response times by 200%, and increased the efficiency of human-machine collaboration by 40%.

Hong Kong-based AsiaInfo, a leading telecom software infrastructure solutions provider, competes with US-based Amdocs, India’s Infosys, and Poland’s Comarch. Some network equipment makers like Huawei, HPE, Cisco, and Nokia also provide some software services.

In addition to infrastructure software, AsiaInfo also provides business and operations support systems, such as network monitoring software and customer and billing management, including processing telecom billing information for China’s 1.4 billion population.

AsiaInfo is also the largest software provider for China’s 5G private networks, serving the country’s leading energy providers and steelmakers, such as China Nuclear Group and Shougang Group, as well as miners and wind farm operators. Private networks are set up by businesses or organizations to provide on-site connectivity to facilitate services like factory automation.

Ouyang is optimistic that AsiaInfo can leverage AI to boost its overseas expansion, and that 5G private networks are expected to be a significant growth driver in the Middle East, Africa, and Southeast Asia. The majority of AsiaInfo’s business is in China, and going overseas is one of the company’s core strategies for growth.

“This year, the growth potential in the overseas market is quite large, especially in the fields of mines, ports, and energy, where we have more specific domain expertise,” the senior executive said.

AsiaInfo Chairman and CEO Edward Tian previously stated that the traditional telecom market and spending have slowed in 2024, but the adoption of AI and LLMs has become a key growth driver for the company as customers begin to adopt these technologies in their services.

AsiaInfo says its software can run on servers and other hardware from different companies, including Nvidia, Huawei, and Hygon.

While leading Chinese tech companies and government agencies are adopting DeepSeek, some governments, such as Italy, Australia, Canada, and South Korea, are banning its use on official devices.

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China unveils ‘most comprehensive’ plan in 40 years to boost consumption

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China has unveiled a new plan to stimulate domestic consumption, called the “Special Action Plan to Boost Consumption,” as it grapples with weak confidence and deflationary pressures.

The 30-point plan, issued by the General Office of the Central Committee of the Chinese Communist Party and the General Office of the State Council, aims to “strongly promote consumption, revitalize domestic demand as a whole, and enhance spending power by increasing earnings and reducing financial burdens.”

This plan supports President Xi Jinping’s directive from late last year, instructing policymakers to focus on boosting domestic demand.

Analysts have described China’s newly announced consumption action plan as the most comprehensive policy package the country has released in over four decades to boost consumer spending.

The plan from the State Council, China’s cabinet, will focus on increasing incomes, stabilizing real estate and stock markets, improving the consumption environment, and enhancing healthcare and pension services. Through this plan, the Chinese economy seeks to transition to a consumption-driven growth model.

News of the “Special Action Plan to Boost Consumption” invigorated stock markets on Monday.

The plan announcement, made late Sunday, followed the “Two Sessions” in Beijing last week, where legislators re-emphasized consumption as a top priority.

In China, domestic spending has remained weak since the end of Covid-19 lockdowns over two years ago, as households have been cautious about spending. Consumer prices fell into deflation in February, although figures were positively impacted by the New Year holiday.

The slowdown in China’s vast real estate sector has also renewed calls from economists to bolster domestic demand.

Data released by the National Bureau of Statistics on Monday showed that retail sales rose 4% year-on-year in January and February, surpassing December’s 3.7% increase and aligning with forecasts from a Reuters poll of analysts.

In September, policymakers announced a long-awaited package to support the economy, but the measures largely focused on stock markets, disappointing investors.

The new plan, comprising eight main sections, addresses factors such as income growth, enhancing the quality-of-service consumption, improving large-scale consumption, and improving the consumption environment simultaneously.

It includes a commitment to raising the minimum wage, strengthening support for education, and establishing a subsidy system for childcare—a particularly pressing issue as China’s population has declined for three consecutive years.

Shi Lei, an economics professor at Fudan University in Shanghai, said, “This is the most comprehensive directive to promote consumption since China’s reform and opening up [in the late 1970s],” adding, “According to the policy, authorities will promote the reasonable growth of employees’ incomes by increasing employment, raising the minimum wage, and accelerating the implementation of the paid annual leave system.”

Speaking to the South China Morning Post, Shi noted, “In the past, policymakers often ignored income growth [when discussing ways to boost spending].” He added, “In fact, if consumers have money, they don’t need your encouragement to spend, and if they don’t have money, such encouragement won’t work.”

Lynn Song, ING’s Greater China chief economist, stated that the plan “focuses significantly on boosting household consumption capacity and willingness” and, if implemented correctly, “could help China’s economic transition towards a consumption-driven growth model.”

“The direction looks positive, but implementation is everything. It is not certain that these measures will be enough to restore consumer confidence to healthy levels,” Song wrote, also noting that the administration’s focus on boosting consumption, combined with a relatively low base last year, means that China’s consumption growth could reach a mid-single-digit growth rate in 2025.

Data released on Monday also showed that industrial production increased by 5.9% year-on-year in the first two months of 2025, slowing from 6.2% in December but exceeding analysts’ expectations of a 5.3% increase.

The new package will also promote “inbound” consumption. Beijing has granted visa-free travel to dozens of countries in the past year to revitalize inbound tourism post-pandemic.

It also highlights specific tourism sectors such as “snow and ice.” China has built several indoor ski resorts in recent years, including the world’s largest, which opened in Shanghai in September.

According to the plan, China will also broaden real estate income channels with measures to stabilize the stock market and develop more bond products suitable for individual investors.

The plan calls for exploring ways to unlock the value of homes legally owned by farmers through rental arrangements, equity participation, and cooperative models.

Notably, in addition to traditional consumption sectors such as housing and automobiles, it emphasizes emerging categories such as AI-powered products and the low-altitude economy.

It also states that new consumption sectors with high growth rates will be created by accelerating the development and application of new technologies and products such as autonomous driving, smart wearable products, ultra-high-definition video, brain-computer interfaces, robotics, and additive manufacturing, more commonly known as 3D printing.

Xu Chenggang, a senior research fellow at the Stanford University Center on China’s Economy and Institutions, said that Beijing’s shift towards consumption indicates official recognition that the economic situation is “serious.”

Zou Yunhan, a researcher at the State Information Center, also said that consumption is playing an increasingly key role in boosting economic growth, but some challenges still persist in the quest to further unleash consumer potential.

Looking ahead, Zou called for joint efforts from all sectors to ensure the full implementation and effectiveness of the action plan.

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