Here are five things that happened in China this week

Manyika Kangai

China Reopens and Shows Early Signs of Recovery

China’s economy is off to a good start in 2023, seeing a faster-than-expected recovery, which is boosting confidence both domestically and abroad. During the seven-day Chinese New Year holiday, China saw nearly 2,9 million cross-border trips, up 120,5 percent year-on-year, and 308 million domestic trips, up 23,1 percent compared with 2022.

In January, the Purchasing Managers’ Index (PMI) for China’s manufacturing sector came in at 50.1, returning to expansion territory after three consecutive months of contraction. The International Monetary Fund (IMF) has lifted its forecast for China’s economic growth this year to 5,2 percent from a previous prediction of 4,4 percent.

Bullish on China’s head start in economic recovery in 2023, global investors are lining up for yuan-denominated assets. Market data shows that net overseas capital inflow into shares traded at the Shenzhen and Shanghai bourses hit a single-month record of 131,146 billion yuan (about US$19,4 billion) in January, more than the whole of 2022.

China Protests US Shooting Down Unmanned Airship

China’s Foreign Ministry lodged a formal complaint with the US embassy in China following the US shooting down an unmanned Chinese airship that had entered US airspace. China stressed that the entry of the Chinese airship into US airspace due to force majeure was totally unexpected and accidental, and that the ins and outs of what happened are crystal clear and clearly do not allow room for distortion or smearing.

In an official statement, China’s foreign ministry stated that the US overreacted by insisting on the abusive use of force towards the civilian airship that was on route to leave US airspace, and that the act had seriously violated the spirit of international law and international practice and severely impacted and undermined the efforts and progress made by the two sides to stabilise China-US relations since the two countries’ leaders met in Bali, Indonesia.

This also comes at a time when newly released US official data showed that goods trade between the United States and China hit a record US$690,6 billion in 2022, indicating robust trade growth amid bilateral tensions and decoupling rhetoric.

China Issues Outline to Improve the Quality of Development

China has issued a document by the Communist Party of China Central Committee and the State Council that outlines its focus to improve the overall quality of its economy amid efforts to promote high-quality development. The country aims to boost its strength in quality and steadily increase the influence of Chinese brands by 2025.

Measures will be taken to make improvements to the quality and efficiency of economic development, increase the quality and competitiveness of industries continuously, and raise the quality levels of products, projects, and services significantly. It also sets goals for greater progress in brand-building, constructing more modern and effective quality infrastructure and fine-tuning the country’s quality management system by 2025.

China Ready to Restart Trade with Australia

China’s Commerce Minister Wang Wentao and Australia’s Trade Minister Don Farrell held talks this week via video link resulting in the first shipment in two years of Australian coal arriving in China.

Following the meeting, Wang stated that China was ready to restart economic and trade exchanges with Australia and to expand cooperation in emerging areas, such as climate change and new energy, and promote high-quality development of bilateral economic and trade relations, while Farrell pointed out that China is Australia’s largest trading partner and a significant source of investment, and Australia looks forward to further expanding cooperation with China in such fields as climate change and renewable energy.

China’s Baidu Enters AI Chat Bot Race

China’s Baidu announced it would complete internal testing of a ChatGPT-style project called “Ernie Bot” in March, joining a global race as interest in generative Artificial Intelligence (AI) gathers steam. Ernie, meaning Enhanced Representation through Knowledge Integration, is a large AI-powered language model introduced in 2019.

It has gradually grown to be able to perform tasks including language understanding, language generation, and text-to-image generation. Defining the category is ChatGPT, a chatbot from Microsoft-backed OpenAI that has been the centre of much buzz since it was released in November. ChatGPT is not available in China. Google also announced a conversational AI service called Bard.

*Manyika Kangai has over 15 years of experience facilitating and advising on China-Africa trade and investment deals. He also helps African businesses and governments realise the full potential of the vast opportunities China presents.