Chinese vessels collide in disputed South China Sea
A Chinese warship collided with a China Coast Guard vessel during a confrontation with Philippine patrol boats in the South China Sea. Manila says it will keep defending its claim to the disputed waters.
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Al Jazeera
23 minutes ago
- Al Jazeera
What's next for oil as OPEC+ and Trump shake the market?
OPEC+ is opening the oil taps again, while Donald Trump's tariffs target Russian crude buyers. OPEC+, which includes Saudi Arabia and Russia, has agreed to another large production hike in September. That's despite a warning by the International Energy Agency, the extra barrels could tip the market into oversupply later this year. US President Donald Trump's tariffs have targeted Russian crude buyers. But whether those tariffs are imposed depends on the outcome of trade negotiations with India and China. And even more so on talks over a peace deal in Ukraine between Washington and Moscow. Can the US and Europe break China's grip on rare earths? Plus, why is China's Labubu toy so popular?
Qatar Tribune
19 hours ago
- Qatar Tribune
China's workers face unpaid leave and lower wages amid economic squeeze
Agencies Mike Chai intends to reduce wage costs at his kitchen cabinet factory by about 30% to remain competitive against other Chinese companies, many of which have ceased selling to the U.S. due to steep tariffs and are now targeting his long-time customers in Australia. Chai had already halved his workforce to 100 people since the COVID-19 pandemic and says he has no more room to trim. Instead, he is shortening shifts and asking workers to take unpaid leave – an increasingly common practice that has become a hidden deflationary force in the world's second-largest economy. 'We're in survival mode,' said the 53-year-old, adding that his company, Cartia Global Manufacturing, in the southern city of Foshan, 'barely breaks even.' 'I told them, you don't want our factory to go broke. You've worked here for 10-15 years, let's do it together.' China's headline unemployment rate has held around 5% as U.S. President Donald Trump raised tariffs on imports from China by 30 percentage points this year. Washington and Beijing extended on Monday a tariff truce for another 90 days, during which tariffs will remain at the levels reached in economists argue that underemployment – which, like other economies, is not tracked in data – is worsening due to higher levies and industrial overcapacity, thereby squeezing workers' incomes, undermining their confidence in the future, and prompting them to spend less. Consumer confidence lingers near record lows, retail sales have weakened and inflation in July was zero. Alicia Garcia-Herrero, chief Asia-Pacific economist at Natixis, says it is China's manufacturing workers who suffer while exports – and the economy – keep growing despite the U.S. tariffs. 'It's the people who are hammered by this model of huge competition, lower prices, thus you need to lower costs, thus you need to lower wages. It's a spiral,' she said. 'The model is crazy. I'm sorry, but if you need to export at a loss, do not export.' Statistics will not reveal Chinese workers as 'the main losers' in the trade war because 'they will not become unemployed, but they will get unpaid leave of absence or work fewer hours,' she added. Chai has already lost two key customers in his main market of Australia after other Chinese firms cut their prices and his factory is operating at half-capacity. 'All those who have left America have come to Australia,' he said. 'A lot of new supply is knocking on my customers' doors.' While Chinese exports to the U.S. dropped 21.7% year-on-year in July, they rose by 9.2% to the European Union, 16.6% to the Association of Southeast Asian Nations (ASEAN) and 14.8% to Australia. Chai plans to cut prices by about 10%. To afford that, he is also cutting overtime, which previously made up more than a third of workers' income, from 28 days per month in total to about 10. On average, his workers earn 5,000 yuan ($697) a month before bosses are also turning to temporary workers, hiring them for new orders and dismissing them when demand dries up. Dave Fong, who co-owns three factories in southern China making everything from school bags to climbing gear and industrial machinery, says he laid off 30 full-time workers at one of the plants, then rehired some of them temporarily to fulfil unexpected orders. 'We prefer temporary contracts so we don't need to pay pension or insurance,' said Fong. 'It's by day or by hour.' 'If we don't do that, the company hits a dead end. The market is weak because consumption power has decreased. Another factor is trade, especially with the U.S.' Temporary work is common in China, especially among its nearly 300 million rural migrants. Chen Chuyan, a recruiting agent in the central city of Wuhan, says the going rate has dropped to 14 yuan per hour from 16 yuan last year. 'There's a long line of people waiting for job interviews every day, but the factories don't have that much demand,' Chen said. Alan Zhang has taken such jobs in Datang village, a cluster of small garment factories in the southern city of Guangzhou, since 2021. Back then, he earned 400 yuan a day, but now he struggles to find work paying even half that amount. 'If it's just a couple hundred yuan, I won't take it,' said the 30-year-old, after scanning handwritten ads for temporary work held by recruiters lounging on scooters. 'I don't know what happened. Suddenly, it got tough to find anything. Prices dropped fast,' said Zhang, who pays 700 yuan per month to rent a studio flat in Datang with his wife, who also works in clothing factories. He worked just 14 days in July, which worries him because he must raise 10,000 yuan every year for his son's kindergarten fees. The boy lives with his grandparents in Zhang's hometown, located in neighboring Fujian Province. 'If manufacturing wages are being squeezed, then the wider economy would feel deflationary pressure,' said Richard Yarrow, a fellow at Harvard Kennedy School's Mossavar-Rahmani Center for Business and Government. 'This is definitely a growing issue for some of the lower-skill types of manufacturing in China, such as textiles, furniture and simple electronics.' At the Longhua employment market in Shenzhen's tech hub, dozens of people browsed bulletin boards for electronics factory jobs that pay 17-28 yuan per hour. Mo, 26, who holds a degree in digital marketing but has been unable to find a job in the field, had already had two interviews by early afternoon. He declined the offers because the terms were not as advertised. 'They'll say 23 yuan, but actually give you 20,' said Mo, only giving his surname for privacy reasons. 'Then they'll take management fees, housing, cleaning and whatever else they can deduct.' Huang, 46, was checking the market for a fifth straight day, having arrived by bus from the southwestern province of Yunnan. He managed real estate projects before the property market crash. Now he is divorced and lives on a diet of 10 yuan meals, paying 25 yuan per night for a bed in a dormitory. He cannot afford anything else until he finds work. 'I had one interview this morning, but they asked for an upfront placement fee of 80 yuan,' said Huang, dragging a small suitcase. 'So I didn't go. I bought some food instead.'
Al Jazeera
19 hours ago
- Al Jazeera
China raises concerns over Nvidia's H20 chips with local firms: Report
Chinese authorities have summoned domestic companies, including major internet firms Tencent and ByteDance, over their purchases of Nvidia's H20 chips. Authorities asked the companies on Tuesday to explain their reasons and expressed concerns over information risks, three people familiar with the matter told the Reuters news agency. The Cyberspace Administration of China (CAC) and other agencies also held meetings with Baidu and smaller Chinese tech firms in recent weeks, said one of the two people and a third source. The Chinese officials asked companies why they needed to buy chips made by Nvidia, a US company, when they could purchase from domestic suppliers, the sources said. Authorities in China expressed concern that the materials Nvidia has asked companies to submit for review with the US government could contain sensitive information, including client data, one of the sources said. However, the people, who declined to be identified because the meetings were not public, said the companies have not been ordered to stop buying H20 chips. Nvidia said on Tuesday that the H20 chip was 'not a military product or for government infrastructure'. 'China has ample supply of domestic chips to meet its needs. It won't and never has relied on American chips for government operations, just like the US government would not rely on chips from China,' the statement said. Baidu, ByteDance, Tencent and the CAC did not immediately respond to requests for comment. Discouraged use Earlier on Tuesday, Bloomberg News reported that Chinese authorities have urged domestic companies to avoid using Nvidia's H20 chips, particularly for government-related purposes. Several companies were issued official notices discouraging the use of the H20, a lower-end chip, mainly for any government or national security-related work by state enterprises or private companies, the report said, citing people familiar with the matter. In a separate report, The Information reported that ByteDance, Alibaba and Tencent had been ordered by the CAC in the past two weeks to suspend Nvidia chip purchases altogether, citing data security concerns. The CAC directive was communicated at a meeting the regulator held with more than a dozen Chinese tech firms, shortly after the administration of United States President Donald Trump reversed the export curbs on H20 chips, according to the Information report. Reuters could not immediately confirm the reports, and Alibaba did not respond to a request for comment. Top contract chipmaker SMIC rose 5 percent on Tuesday on expectations of rising demand for locally-produced chips. But even without an outright ban, the concerns expressed by Chinese authorities could threaten Nvidia's recently restored access to the Chinese market as Chinese companies look to keep in step with regulators. Nvidia designed the H20 specifically for China after export restrictions on its more advanced AI chips took effect in late 2023. The H20 has since been the most sophisticated AI chip Nvidia was allowed to sell in China. Earlier this year, US authorities effectively banned its sale to China, but reversed the decision in July following an agreement between Nvidia and the Trump administration. Threat to revenue stream Last month, China's cyberspace regulator summoned Nvidia representatives, asking the company to explain whether the H20 posed backdoor security risks that could affect Chinese user data and privacy. State-controlled media have intensified criticism of Nvidia in recent days. Yuyuan Tantian, affiliated with state broadcaster CCTV, published an article on WeChat over the weekend claiming that H20 chips pose security risks and lack technological advancement and environmental friendliness. The scrutiny threatens a significant revenue stream for Nvidia, which generated $17bn from sales to China in its fiscal year ended January 26, or 13 percent of total revenue. China has accelerated work on domestic AI chip alternatives, with companies such as Huawei developing processors that rival the H20's performance, and Beijing urging the technology sector to become more self-sufficient. However, US sanctions on advanced chipmaking equipment, including lithography machines essential for chip production, have constrained domestic manufacturers' ability to boost production. On Monday, US President Donald Trump suggested that he might allow Nvidia to sell a scaled-down version of its advanced Blackwell chip in China, despite deep-seated fears in Washington that Beijing could harness US AI capabilities to supercharge its military. China's Ministry of Foreign Affairs said on Tuesday that it hoped the US would act to maintain the stability and smooth operation of the global chip supply chain. The Trump administration last week confirmed an unprecedented deal with Nvidia and AMD, which agreed to give the US government 15 percent of revenue from sales of some advanced chips in China. China's renewed guidance on avoiding chips also affects AI accelerators from AMD, Bloomberg also reported. It was not clear, however, whether any notices from Chinese authorities specifically mentioned AMD's MI308 chip. AMD did not respond to a request for comment outside regular business hours.
