The consumption made during China's traditional Lantern Festival, which is seen as a conclusion to the two-week celebration of the Chinese Lunar New Year, extended the buying fever seen in the Spring Festival holidays, data from various Chinese platforms showed.

The holiday spending fever together with a stock market rally mark a strong start of the country's economic growth for the year. The robust data is expected to strengthen expectations, boost market confidence, and further support China's economic growth for the year, experts said.

Consumption fever

The Lantern Festival which falls on Saturday this year saw people from all over the country enthusiastically engaged in attending lantern fairs, enjoying night tours, having short-distance travel, continuing the strong consumption momentum that has been seen during the Chinese New Year holidays.

As of Friday, the booking volume of hotels nationwide during the Lantern Festival period has increased by 2.6 times compared to 2023, and the sales volume of tickets for national scenic spots also increased by 90 percent, according to domestic travel platform Qunar.com.

Data on Trip.com showed that over the weekend the booking for domestic travel increased by over 140 percent compared to last year, with bookings for nearby trips seeing growth of over 200 percent.

The search for yuanxiao, a festive sweet-favored glutinous rice ball to celebrate the Lantern Festival, has soared more than 425.6 percent from a year ago, according to online retail platform Meituan. Innovative items such as chocolate-filled yuanxiao and coffee-flavored yuanxiao are particularly trendy this year.

Apart from yuanxiao, the search for lantern fairs has grown by 720 percent compared to a year ago, according to Meituan.

The rising cultural and tourism consumption and demand for innovative products showed an increasing trend in China's consumption market, Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times on Sunday.

It is expected that this trend will lead to an increase in China's consumption volume and quality in 2024, Cong said.

The spending fever during the Lantern Festival extended the momentum of the Chinese New Year holidays which saw record travel data and holiday spending.

During the eight-day Chinese Lunar New Year holidays, 474 million domestic trips were made, up 34.3 percent year-on-year, and total domestic tourism spending jumped by 47.3 percent year-on-year to about 632.69 billion yuan ($87.95 billion), according to data released by the Ministry of Culture and Tourism.

The spokesperson for China's Ministry of Commerce (MOFCOM) He Yadong said at a regular press conference held on Thursday that China has seen a boom in consumption during the Spring Festival holidays, making a good start to 2024.

During this year's Spring Festival holidays, the sales of key retail and catering enterprises nationwide increased by 8.5 percent year-on-year on a comparable basis. It is expected that the consumption market will maintain a stable growth trend in the first quarter, He said.

The consumption boom during the Spring Festival period showcases the vitality unleashed by the Chinese economy and also serves as a rebuttal to some foreign media's negative portrayal of the Chinese economy, experts said.

The surge in consumer spending during Chinese New Year holidays and the Lantern Festival signifies a growing optimism among consumers about the future economy, leading to an increase in their willingness to spend, Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Sunday.

China's stock market also witnessed a strong rally during the period, boosted by warming consumption and regulatory measures aimed at reviving the market.

The Shanghai Composite Index rose for eight consecutive days as of Friday closing, recovering all losses in the year 2024 and surpassing the 3000-point mark. Around 300 stocks saw gains of over 30 percent last week, the Securities Times reported.

"The sustained upward trend in the stock market will attract more capital inflows, which will support corporate financing and facilitate expansion of production capacities, further stimulating economic growth in the coming months,'' Wang said.

Bright outlook

The surge in consumption during the Spring Festival is expected to have a significant impact on China's GDP growth in the first quarter of 2024, setting the stage for a strong economic recovery throughout the year and beyond.

The consumption is expected to grow by 6 percent in the first quarter, leading the nation's GDP to grow at above 5 percent in the first quarter, Tian Yun, a veteran economist based in Beijing, told the Global Times.

In order to further spur economic growth, Chinese officials have convened meetings and rolled out various pro-growth measures days after the Spring Festival, with the focus on issues such as boosting market confidence and improving efficiency.

Right after the Chinese New Year holidays, China's central bank on Tuesday cut its five-year-plus loan prime rate by 25 basis points, the largest one-time rate reduction in years, adding fuel to the hot consumer spending during the holiday and injecting sustainable momentum into the consumer market.

Chinese Premier Li Qiang on Friday chaired a State Council executive meeting and called for greater efforts to attract and utilize foreign investment.

On the same day, the MOFCOM said that in January, foreign investors set up 4,588 new foreign-funded enterprises, a year-on-year increase of 74.4 percent against the backdrop of last year's sustained growth.

More measures to stabilize economic growth, including increasing infrastructure investment, creating jobs, improving the business environment, and promoting industrial innovation could be expected, Wang said.

While a national GDP growth target will not be released until the national two sessions scheduled to be held in early March, major provincial-level economic powerhouses, including Shanghai and South China's Guangdong, eye a growth rate of about 5 percent or higher.

Anchoring the goal of building a financial powerhouse, China on Tuesday reiterated its determination to strengthen financial regulation with “teeth and thorns” and enhance the “regulation of the regulators.”

In an article published on the People’s Daily on Tuesday, the Office of the Central Financial Commission and the Central Financial Work Commission, two crucial bodies in China’s financial policymaking, jointly emphasized the need to ensure financial stability through stringent and solid regulation and to enhance regulatory capabilities.

It is crucial to strengthen regulation with “teeth and thorns”, push for strict enforcement of laws, and to establish a sound regulatory accountability mechanism, enhancing the “regulation of the regulators.”

The article emphasizes the need to safeguard financial security through prudent and effective risk prevention and control. It advocates adhering to the principle of “maintaining overall stability, coordinating policies, implementing targeted measures, and precisely defusing risks.”

This approach involves handling existing risks prudently, strictly preventing new risks, and effectively preventing and defusing financial risks in key areas in a powerful, orderly, and effective manner.

Enhancing regulation with “teeth and thorns” is of great significance. Through continuous supervision of financial institutions and markets, potential risks can be detected and resolved in a timely manner, thus preventing the occurrence of financial crises, Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Tuesday.

It is also beneficial for maintaining market order and protecting consumer rights, Wang said.

Currently, it is imperative to enhance financial regulation. On the one hand, with the continuous emergence of financial technology and innovative products, traditional regulatory measures may be difficult to cope with new risks; while on the other hand, some financial institutions may exploit regulatory loopholes or differences between different regulatory systems to engage in arbitrage, thus circumventing regulatory requirements, Wang noted.

Additionally, as global financial markets become more interconnected, China needs to strengthen regulatory measures to enhance the stability and international competitiveness of its financial system, Wang said.

Over recent months, China’s financial regulatory authorities have repeatedly mentioned the need to focus on strong and strict supervision, and resolutely aiming for regulation with “teeth and thorns.”

The National Financial Regulatory Administration held a work conference on January 30, vowing to enhance regulation, firmly safeguard the bottom line of preventing systemic financial risks, solidly promote high-quality financial development, and steadfastly follow the path of financial development with Chinese characteristics.

The article on Tuesday also noted that it is essential to deeply understand that the fundamental purpose of building a financial powerhouse is to serve the goal of achieving Chinese modernization. 

China called on cities to implement and adjust policy tools in real estate sector based on local conditions, China's Ministry of Housing and Urban-Rural Development (MOHURD) announced on Friday, in order to achieve positive results effectively and a steady development of the sector.

Officials from the ministry made the remarks during a meeting held on Friday, which aimed to deploy a coordination mechanism targeting urban real estate financing, a move to promote the collaboration between developers and financial firms, according to a report by China Construction News.

The meeting was held following the National Financial Regulatory Administration (NFRA) announcing on Thursday plans to step up efforts to support the real estate sector and meet the reasonable financing demand of developer companies.

During the meeting, officials from MOHURD flagged granting cities autonomy to adjust local real estate sector, and implement different policies that are suitable to local market condition, according to the report.

In addition, the meeting also vowed to support real estate developing programs by the coordination mechanism, treat developers in various ownerships equally by approving their reasonable financing demand.

China's policymakers have been making efforts in addressing financing issues among real estate developers, which was mentioned during a central economic work conference held last December.

Xiao Yuanqi, a deputy director of the NFRA, said during the press conference on Thursday that the financial sector has an undeniable responsibility to provide support to the real estate industry, which has a long supply chain and wide-ranging implications for the national economy, as well as being intertwined with people's lives.

MOHURD vowed to accelerate the issuance of loan to developers and enhance supervision to ensure the utility of the loan, adding that a first issuance of real estate programs will be finalized by the end of January.

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.

Spring Festival consumption to boom amid historical high travel rush GraphicAnalysis: GT

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'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.

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.