Japan should take more responsibility to stabilize economic ties with China

The reported visit to China by a delegation of senior Japanese business leaders, led by Shindo Kosei, head of the Japan-China Economic Association, comes in time to strengthen communication and coordination in order to stabilize bilateral economic relations. According to Japanese media outlets, this is Japanese business leaders' first visit to China in approximately four years.

Given the complex geopolitical situation where the "decoupling from China" theory continues to cloud regional supply chains, especially regarding cooperation in high-tech industries like semiconductors and electric vehicle batteries, enhanced communication itself is a positive sign for bilateral cooperation.

As a restructuring of the Asian industry chain seems to have accelerated amid global economic uncertainty, some challenges constrain the development of bilateral trade and investment. China's overall exports to Japan dropped 8.4 percent year-on-year in 2023 while imports from Japan declined 12.9 percent. 

The Japanese Chamber of Commerce and Industry in China recently published figures showing 48 percent of Japanese companies surveyed in China said that they had reduced their investment in China in 2023 compared to the previous year, or had not invested any further.

It is necessary to analyze the potential problems facing bilateral economic cooperation and maintain high-level exchanges, dialogue and communication between China and Japan. Hopefully, the delegation led by Shindo Kosei could help stabilize bilateral economic relations.

China and Japan have recently encountered some setbacks in their economic relationship, and the Japanese side should be held responsible. For instance, it is reasonable for China to suspend imports of aquatic products originating from Japan to prevent risks from Japan's dumping of nuclear-contaminated wastewater. Some Japanese people may want to turn China's ban on aquatic product imports into an issue of geopolitics and pressure China to resume imports, but it's impossible to solve problems by politicizing economic issues.

In another example, Japanese restrictions on exports of advanced chipmaking equipment reportedly took effect in July, 2023, in line with US-led efforts to stymie China's ability to develop high-end semiconductors. Clearly, this has a negative impact on Japan's exports to China. Japan should shoulder more responsibility in stabilizing trade, investment and economic cooperation with China.

Chinese officials have repeatedly stressed that China will always welcome foreign companies, including Japanese firms, to invest and operate in China. However, it seems that some Japanese companies are still skeptical about China's sincerity in attracting foreign investment. China's revised counter-espionage law took effect in July to safeguard national security, but some media reports raised unnecessary concerns about "arbitrary enforcement." 

In the face of domestic and external uncertainties, it is normal that China's plan to make itself a better investment destination is unlikely to be realized as smoothly as we imagined. Japan and China should make a concerted effort to manage bilateral economic relations with great care, strengthen communication and eliminate misunderstandings.

Economic complementarity between China and Japan is likely to be enhanced as China steps up efforts in technological innovation and moves up the value chain. With China's technological advancement, there is great potential for China-Japan economic cooperation in high-end manufacturing industries such as semiconductors and electric vehicle batteries. Hopefully, such cooperation won't be affected by geopolitical issues and unnecessary concerns about China's counter-espionage law.

Undoubtedly, efforts to stabilize China-Japan economic relations are in line with the interests of Japanese enterprises. The report by the Japanese Chamber of Commerce and Industry in China showed that about half of the companies surveyed still thought China was the most important market globally or among the top three most important in 2024. 

China is Japan's largest trading partner, and one of the biggest investment destinations for Japanese companies. China and Japan could complement one another in economic modernization despite their differences. Hopefully, the Japanese business delegation led by Shindo Kosei could give a boost to economic cooperation.

GT Voice: India’s geopolitical game hurts outlook for Nepal’s hydropower

While electricity trade between India and Nepal appears to give the former a commanding advantage against China in Nepal's hydropower sector, there is also growing concern as to whether India's geopolitical game of edging China out could jeopardize Nepal's power projects and energy supply ambitions.

Due to a strategic policy change that India implemented in 2018, India has outpaced China in securing hydropower contracts in Nepal, BNN Breaking reported on Monday.

Media attention to the competition for influence in Nepal's hydropower sector came a few days after Nepal and India reportedly signed a power trade agreement for Kathmandu to export 10,000 megawatts of hydroelectricity to India over the next 10 years, according to Reuters.

Since the hydropower sector in the Himalayan nation has been considered a crucial arena for geopolitical tussles between India and China, the development was touted by some Indian and Western media outlets as evidence of India's growing influence in the region.

Objectively speaking, it is a welcome development that India and Nepal are moving toward strengthening their power trade, which is in the interests of both sides, but that doesn't necessarily mean that Nepal's development should fall victim to India's geopolitical maneuvers. 

Indeed, India's power trade policy, which prohibits the purchase of electricity produced by projects invested by Chinese companies, has cast a shadow on the investment dynamics of Nepal's energy infrastructure.

In 2018, India changed its electricity buying policy to prevent the purchase of power produced via the investment of nations with which it does not have a "bilateral agreement on power sector cooperation." Although it didn't explicitly mention China, hydropower produced by Chinese-funded or Chinese-built plants is actually excluded in power trade with Nepal. As a result, Nepal has removed Chinese developers from six hydropower projects and given four hydro contracts to Indian companies, Reuters reported in May 2023, citing an industrial official in Nepal. 

Indian companies have contracts to build and operate 10 hydropower plants in Nepal, while Chinese developers have such contracts for five of them, according to media reports.

The reason why India's power purchase policy can have such great influence on Nepal is because its power supply has undergone dramatic changes over the past decade, and its generation capacity is now enough to meet domestic needs. 

This also means that Nepal needs to find overseas markets for its surplus electricity during the rainy season, with India and Bangladesh being the target markets. Because of its geographical location, even the power trade between Nepal and Bangladesh requires India's participation.

But such trade needs should not be tools used to exclude other participants for geopolitical interests. It is nothing but narrow-minded for a regional power to be obsessed about the geopolitical significance of its neighbors while neglecting their development needs. 

This approach won't gain positive regional influence for India. Specifically, given the past and current situation of Indian companies' hydropower projects in Nepal, it is questionable whether India has the ability to support Nepal's hydroelectric development, which reportedly has the potential to produce 72,000 megawatts of hydroelectricity.

By comparison, Chinese companies' contributions to Nepal's hydropower development are evident. With the participation and support of Chinese companies, Nepal has turned into a net exporter of electricity. 

China has not only invested in hydropower projects in Nepal, but it has also discussed a cross-border transmission line with Nepal, which may be a solution to Nepal's export needs.

Still, it is our sincere hope that India can have a more open-minded attitude toward Chinese investment in Nepal. If geopolitics is set aside, it will find that there is cooperation space between China and India on this issue, which is beneficial for all parties in the region. 

China has construction and technological advantages in hydropower projects, and Nepal's hydropower development, if smooth, will benefit India and Bangladesh.

In addition to hydropower projects, China and Nepal also have cooperation involving other infrastructure projects, which are also beneficial for regional development, such as the China-Nepal railway that is intended to greatly improve connectivity in South Asia. It would be a pity if India only saw these developments as part of its geopolitical competition with China.

If India is really concerned about its influence in the region, it is advised to invest more and help Nepal and other regional countries with infrastructure development, promoting regional economic prosperity.

The development of South Asia now hinges to a large extent on whether India can adopt a cooperative attitude in the face of the regional needs. This is also the common wish of many countries in the region.

China approves graphite export applications in accordance with regulations: Commerce Ministry

China's Ministry of Commerce (MOFCOM) has approved graphite export applications from multiple entities, a ministry spokesperson said on Thursday, reiterating that its export control mechanism is not a ban.

Exercising exports control measures on certain graphite products is of common international practice and the China's export control rules are aimed at fulfilling international non-proliferation obligations and safeguarding China's national security and interests, ministry spokesperson He Yadong told a press briefing on Thursday.

He made the remarks in response to reports that some Chinese graphite exporters are cleared to export their products to major South Korean battery companies.

China in October announced plans to optimize export controls on some categories of graphite, a key material in making electric vehicle battery, with new rules taking effect on December 1. The export of artificial graphite materials and related products with high purity, high strength and high density, as well as natural flake graphite and associated products, are subject to the new rules.

Due to China's critical role in the global graphite supply chain, the export control measures received immediate attention abroad.

He emphasized that China's export control measures should not been seen as outright export ban and the ministry has approved a number of graphite export applications that that comply with relevant regulations.

The ministry will continue to review other license applications and make decisions in accordance with legal procedures, He said.

Experts said China's export control rules on certain graphite items are restrained and professional and are in line with international practice.

Earlier, the ministry said that China remains committed to maintaining the security and stability of the global industrial and supply chains.

Judge from Beijing Internet Court encourages people to harness AI to boost creativity

A judge who has just decided that an AI-generated image in an intellectual property dispute was an artwork protected by copyright laws said she is in favor of the innovative development of generative AI and encourages people to use AI tools to be creative.

The remarks were made after the ruling by the Beijing Internet Court in order to encourage the creation of new works, said Zhu Ge, the presiding judge at a public event held in Beijing.

The essentials of people using AI models to generate images are that people use tools to make a creation. In this sense, the creators have the copyright over the generated images and they are protected by copyright law, she said, domestic media outlet thepaper.cn reported on Monday.

The court recognized in December 2021 that pictures generated via AI image generators should be considered artworks and can be copyrighted based on the originality and intellectual input of their human creators, in this case, the plaintiff surnamed Li.

The court therefore required the defendant to issue a public apology and pay the plaintiff 500 yuan ($70.16) in compensation.

The ruling, the country's first case of its kind, is believed to show Beijing's fresh support for AI-driven creativity. It has also responded to questions about whether an AI-generated image is an artwork protected by copyright law, and whether it is regarded as the intellectual output of its human creator.

Against this backdrop, Zhu said the court considered the impact it is likely to have on the development of the AI industry.

Zhu said that the court has fully discussed issues related to the legal attributes and ownership of the AI image generator under the framework of Chinese law, hoping that the case will provide a reference for judgments in similar cases, as well as subsequent AI-related legislation, although it doesn't necessarily mean that all the generative AI-related cases can resort to the same judgment.

Whether AI-generated work can be protected by copyright should be decided on a case-by-case basis, she said.

Majority of Japanese companies maintaining or increasing investment in China in 2023: survey

A white paper released by the Japanese Chamber of Commerce and Industry in China on Monday showed that more than half of Japanese companies increased or maintained investment in China last year, underlying the resilience of the Chinese market.

Experts said Tokyo's move of following the US to seek "decoupling" with China in some fields have affected Japanese companies' investment in China, calling for the Japanese side to rule out external disturbance and pursue new cooperation areas with China for win-win results.

Conducted between November 23 and December 13, 2023, the survey collected responses from over 1,700 Japanese companies doing business across China. It covered a wide range of industries from electronic machinery to chemicals, food and medicine, according to a report sent to the Global Times on Monday.

About 38 percent of Japanese companies said that they maintained the same investment level last year as 2022, while another 15 percent said they "significantly increased" or "increased" their investment in China.

Reasons given for increased investment include business expansion in the wake of the COVID-19, conforming to the electrification and intelligence of the automotive industry, and increasing efficiency and functionality through automation.

Around 54 percent of the companies surveyed said they are satisfied with the business climate in China, up 3 percentage points compared with the chamber's last survey, it said.

Those surveyed said their businesses in China is relatively "grim," but slight improvement is also being made, it said, stressing that 51 percent of Japanese companies considers Chinese market their "most important market" or "one of the three most important markets."

"The result of the survey revealed the contradiction state of mindset of Japanese companies. Japan's China policy has shown tendency of following the US in recent years, and the Japanese side's 'industrial decoupling' from China have affected some Japanese companies' investment and operations in China," Xiang Haoyu, a research fellow at the China Institute of International Studies, told the Global Times on Monday.

Despite geopolitical volatility, about half of Japanese companies are willing to maintain or increase their investment in China, which underscores the resilience and potential of the vast Chinese market, Xiang said.

Looking ahead to 2024, Xiang is cautiously optimistic about China-Japan economic and trade relations. Customs data showed that Japan is still a major trade partner of China and the complementary nature of the two economies persist, but the Japanese side ought to rule out external meddling to explore new cooperation areas with China for greater win-win results, he said.

According to data released by the General Administration of China, the volume of bilateral trade between China and Japan dropped 10.7 percent year-on-year to reach $318 billion in 2023.

Japan announced in March 2023 a draft revision to a ministry ordinance on its Foreign Exchange and Foreign Trade Act, adding 23 chip-manufacturing items that require government approval for export, which includes equipment for cleaning, checkups and lithography, a technology essential in producing cutting-edge chips. It took effect in July.

Landmark legal battle concludes, but debate over AI-generated content copyright persists

Generative artificial intelligence (AI) can complete image creation and document writing in seconds, bringing novelty but also causing more anxiety for creators.

The first case of copyright infringement involving AI-generated images in China has recently been finalized, with the plaintiff Li Yunkai winning the lawsuit but waiving the 500 yuan ($70) compensation from the defendant.

Li Yunkai recently told the media that the compensation is not important to him; he rather hopes that the court can provide a clear criterion on whether using AI to generate images constitutes original work and possesses original work of authorship.

In this particular case, the Beijing Internet Court recognized the picture generated via text-to-image AI image generator should be considered original “artwork” under the protection of copyright laws based on the “originality” and intellectual input of its human creator.

However, industry observers noted that the case also emphasized whether the artificial intelligence-generated content (AIGC) constitutes a work with copyright cannot be generalized but should be decided on a case-to-case basis.

Why is that? Observers argued that, to protect AIGC, it is necessary to establish whether the subject of the right is a human being rather than the machine or the AI.

Li Zonghui, the vice president of the Institute of Cyber and Artificial Intelligence Rule of Law affiliated with Nanjing University of Aeronautics and Astronautics, told the Global Times that the current copyright law defines the subject of the work as the author, citizens, legal persons, and social organizations. It is evident that AI does not meet this requirement.

Back in 2018, the US Copyright Office received its first known copyright registration application for an AI-generated work. But later in 2023, the court rejected the application because AI, as a non-human, is not subject to copyright protections.

In this case, Stephen L. Thaler intended to claim authorship of a visual image titled “A Recent Entrance to Paradise,” which was generated by his developed AI system known as the "Creativity Machine."

“Protecting content generated by non-human beings as works with copyright is fundamentally contrary to the legislative purpose of copyright law,” Li Zonghui noted. In the Beijing case, the court rule was based on the fundamental principle of protecting the rights of “human being.”

According to the court, if an AI-generated image reflects the original intellectual investment of a human being, it should be considered artwork and protected under copyright law. However, determining the extent of the original intellectual investment made by a human being in the creation process poses a challenge.

The Beijing Internet Court believes that the plaintiff Li Yunkai designed the visual elements of the character and its presentation through prompts and set parameters for the layout and composition of the image. He continued to add prompts and modify parameters after obtaining the first image, constantly adjusting and revising, and finally obtained the image. The process reflects the plaintiff's aesthetic choices and personal judgment, the court believed.

Li Zonghui pointed out that if a work is purely generated by AI without any contribution from the user, it may not be subject to copyright infringement. The key factor lies in the prompts and what kind of modify parameters given to the machine and whether they constitute originality.

Some industry observers argue that writing prompts to generate a work is a simple task, resulting in a minimal intellectual contribution to AI-generated image creation.

AI systems have the capability to replicate on a large scale, enabling the generation of a vast number of images or content within a short period. If copyright protection is granted to all of this, it will not foster innovation for society as a whole, stated You Yunting, a Shanghai-based lawyer, in an interview with The Paper.

Machines’ deep learning is essentially a statistical process that involves collecting large-scale data and performing rapid calculations and deductions. Therefore, it is not the same concept as human original expression, Andy Sun Yuanzhao, executive director at The Asia Pacific Legal Institute, wrote on Copyright Theory and Practice recently.

Apart from lawsuits relating to AI-generated images, China has also seen a first legal dispute over a virtual human.

In July 2022, a technology company in Hangzhou uploaded a video to their Douyin account featuring Ada, a virtual human created by Shanghai-based Xmov Technology but failed to acknowledge Xmov as the original creators. The Hangzhou Internet Court later sided with Xmov, ordering the infringing company to pay 120,000 yuan in compensation.

Analysts said there is a connection between virtual humans and works in copyright law and the right of portrait and personality in civil law.

If the character’s appearance is completely newly designed, then the virtual digital human may constitute an artistic work and be protected by copyright law. If the character is based on the modeling of a specific natural person, then the virtual digital human involves the use of the likeness of a real person and requires the permission of the right of personality holder, Li Zonghui told the Global Times.

One judgment of copyright infringement will certainly lead to more subsequent lawsuits. The aftereffects will be the increase cost and market entry barriers for the subsequent development of the AI industry, Sun said.

Given that these lawsuits usually last for a long time, unless the parties can reach a pre-litigation settlement, the entire AI industry is likely to be in a state of uncertainty for a considerable period of time in the future, Sun said.

China issues guidelines for flexible job market in bid to boost employment

In a bid to enhance services for flexible workers, China's Ministry of Human Resources and Social Security (MHRSS) issued a comprehensive set of guidelines aimed at standardizing flexible job markets on Monday, aiming to provide workers with transparent and regulated services. The notice is in line with its commitment to integrate this sector into the broader employment public service system. 

In the notice, the MHRSS outlined several key areas related to flexible job markets that require attention and improvement.

China has a vast population of flexibly employed individuals, and the rapid development of the internet industry has sparked changes in the job market, making it easier for young people to find such jobs, but the market remains largely unregulated, Tian Yun, a veteran economist based in Beijing, told the Global Times on Monday.

The notice emphasized the need to clearly define the service orientation of flexible job markets. The markets, which often operate outside the public service sector, will now be brought under the umbrella of the public employment service system, providing accessible, flexible and inclusive labor services.  

The ministry also said it aims to improve services in the markets, stressing the importance of providing comprehensive services such as job matching, career guidance, and skills training, which is particularly significant in light of China's rapidly evolving job market, where new sectors and opportunities are constantly emerging.

The notice also highlighted the opening and operation of flexible job markets, and called for building service stations and recruiting sites that meet local workers' conditions and demands. It also clarified the roles and responsibilities of various stakeholders in managing and overseeing the markets.

Data analysis is an important part of the notice, as job markets will be asked to publish key indicators, such as the ratio of job seekers to available positions. The information is critical for job seekers and employers in making decisions.

Standardizing service requirements is another part of the notice. The MHRSS has asked local departments to standardize naming rules for local job markets, to unify business processes and service standards, and implement clear regulations to ensure transparency in services. The ministry will soon publish a unified national logo for the markets across the country.  

The notice also underscored the importance of capacity building within the sector, which includes measures such as enhancing staff training and expanding the workforce through multiple channels to cater to the growing demands of this dynamic market.

Many flexible workers lack adequate protection for their labor rights. The notice from the MHRSS provides directional guidance for developing the flexible job markets, but concrete implementation by local authorities is needed to ensure compliance. Regulating flexible employment requires a concerted effort from the relevant authorities, as well as support and cooperation from society, Tian said.

World cannot return to a state of isolation; China opposes all form of unilateralism: FM

Chinese Foreign Ministry Spokesperson Wang Wenbin on Wednesday said the world cannot return to a state of isolation and that China opposes all forms of unilateralism and protectionism in response to International Monetary Fund (IMF) warning that fragmentation of the global economy and increasing national security restrictions could lead to a 7 percent loss in global GDP.

Whether it is trade wars or technological battles, the underlying objective is to politicize, instrumentalize, and weaponize economic and trade issues. The aim is to secure a monopoly on their own developmental advantages, impede the growth of emerging markets and developing nations, and deny the 7 billion people worldwide their right to pursue a happy life, Wang said.

Wang said that China is willing to work with all parties to promote universally beneficial and inclusive economic globalization. China firmly opposes deglobalization and overstretching the national security concept, and opposes all forms of unilateralism and protectionism.

The remarks come as the IMF warned that global economic fragmentation could lead to a 7 percent loss in global GDP.

IMF Managing Director Kristalina Georgieva told CNN in an interview aired on Tuesday local time that restrictions related to "national security" are increasing, and geopolitical factors are causing economic divisions worldwide. 

Allowed to continue, this could ultimately reduce Global GDP by 7 percent - roughly equal to the annual output of France and Germany, she said.

"So we are all better off to find ways to reduce frictions, to concentrate on security concerns that are real and meaningful, and not go willy-nilly in fragmenting the world economy. We would end up with a smaller pie," she said.

Wang said that the world cannot return to a state of isolation and cannot be arbitrarily divided. Any practice of seeking selfish gains at the expense of neighbors, any mindset of confrontation between camps, and any arrogance of self-centeredness will not lead to good results.

China will promote equal rights, equal opportunities, and equal rules for all countries, safeguarding the development rights of all countries, and working toward common development and prosperity.

The IMF's report in October 2023 predicted a slowdown in global economic growth from 3.0 percent in 2023 to 2.9 percent in 2024.

Chinese smart manufacturing will keep going global this year

Last year, Chinese enterprises including major technology brands expanded their footprint on the global market. It was also the first year for upgraded versions of "Made in China" to compete in the markets of the developed economies in all aspects. 

In 2023, China's foreign trade and investment rose steadily, with a trade surplus of more than $730 billion in the first 11 months. China was the only major economy with an inflation rate lower than the central bank's 2-percent target.

In retrospect, in the fields of semiconductors, artificial intelligence, new-energy vehicles or batteries, the technological value of Chinese manufacturing was increasingly recognized globally. In the second half of the year, many Silicon Valley entrepreneurs chose to return to China, seeking cooperation with the world's largest factory, known for its high manufacturing efficiency and growing competitiveness.

In 2024, the globalization of the high-tech sector will be irreversible, and Chinese high-tech companies will continue to "go global." There will be more and more Chinese companies setting up factories in both the developed and developing economies, and concurrently, there will also be an increasing number of young Chinese entrepreneurs appearing on the international business stage.

The rapid development of the Chinese economy over the past 45 years can be attributed to the reform and opening-up policy. Maintaining a competitive advantage in the global manufacturing industry is crucial for China's industrial transformation and upgrading of the economy, as well as ensuring the stability of the yuan's exchange rate and the well-being of the public in the face of global challenges.

The development of Chinese economy demonstrates that China's goal is not to "dominate the world", but to share the dividends of its development. This explains why China's foreign policies won't follow the heels of the traditional colonial powers by bullying the weak and poor, and China's contributions have been widely recognized by countries and regions participating in the Belt and Road Initiative (BRI).

Under the long-term goal of maintaining steady and sustainable development, the Chinese economy saw a robust recovery in 2023. In addition to effectively controlling inflation, various indicators such as electricity generation, transportation of goods and passengers and retail sales all exhibited a gradual recovery, surpassing market expectations. 

The improved economic data can be attributed to the continuous implementation of policies such as poverty alleviation, the BRI and the development of high-end manufacturing. They also stem from the continuous improvement in the capital intensity of modern agriculture and manufacturing, offsetting insufficient growth momentum caused by a slowdown in the real estate sector.

Investors' expectations for the economy's future are diverging. There is a common saying in the international investment community: "optimists tend to be successful and pessimists tend to be right." China's market size and development potential are enormous, and only optimistic entrepreneurs who keep up with the times can get their due rewards.

The main battlefield of competition for Chinese companies has long expanded from first- and second-tier Chinese cities to county towns, which benefits more Chinese consumers, as brands and consumption patterns that used to only exist in Beijing, Shanghai, Guangzhou and Shenzhen are increasingly entering local towns and rural areas. 

The upgrading of the financial industry will also be an important aspect of the Chinese economy in 2024. Commercial banks such as China Agricultural Bank, Industrial and Commercial Bank of China and China Construction Bank have all lowered their deposit interest rates, which for the first time are below the benchmark interest rate set by the People's Bank of China. 

This is a new milestone in Chinese financial history. It signifies that China has transitioned from a period of relying on foreign investment during the early stages of reform and opening-up to a new stage where domestic capital is abundant.