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Southeast Asian countries convene a special meeting in Malaysia to discuss the border conflict between Thailand and Cambodia.
China is urging opposition to Japanese officials' remarks about owning nuclear weapons.
EU leaders agree to loan 90 billion euros to Ukraine, but fail to agree on using the frozen Russian assets.
And we will take a look at why more and more Chinese food and beverage brands are now tapping into the US market.
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First up, Southeast Asian foreign ministers have gathered in Malaysia for a special meeting to discuss an ongoing border conflict between Thailand and Cambodia.
The gathering marked the second time this year that the Association of Southeast Asian Countries served as a platform to promote de-escalation between its two member states.
The meeting came as new fighting broke out along the Thailand-Cambodia border.
Thailand says that its forces now control nearly all border areas and are pushing Cambodian troops to withdraw.
Last week, China also sent a special envoy to Phnom Penh in efforts to facilitate dialogue between Thailand and Cambodia.
The conflict has killed dozens of people and displaced nearly 1 million people on both sides of the border since it resumed earlier this month.
So for more.
Joining us now on the line is Dr Yang Xiyu, Senior Research Fellow with the China Institute of International Studies.
So thank you very much for joining us today, Dr. Yang Xiyu.
First of all, what steps do you think the ASEAN is capable of taking to help de-escalate the tensions and put an end to this fighting?
I think it's very basic and a great question.
First of all, I think all the religious parties should sit together, primarily between the directly religious parties, say Thailand and Cambodia.
Fortunately ASEAN, as one of the major mediators, has been successfully set a meeting that includes both Cambodia and the Thai foreign minister.
I think that is a very significant first step that will open a dialogue for the peaceful solution.
So in addition to ASEAN, China is also a close neighbor and a friend of both Cambodia and Thailand.
What do you make of the potential roles that China can play in terms of easing border clash between the two sides?
I think China is really occupying a special position.
On one hand, as you mentioned, China has both close friends for both of the conflicting parties, the Thai and Cambodia.
On the other hand, China has been quite excellent at mediation diplomacies in many sophisticated issues.
Therefore, with China's powerful influences, with close relationship with both of the competent parties, with justice and equal position taken by China, I think China will certainly play a very important constructive role in these complex conflicting issues facing Cambodia and Pai, simply because China's purpose for mediating these conflicts is really the same, as both of the conflicting parties say peaceful solution for permanent peace and stability for the shared prosperity.
Now China emphasizes that peaceful coexistence and a cooperation for development serve the common interests of Cambodia, Thailand and their peoples.
So under what kind of circumstances or what kind of conditions do Do you see possibilities for Thailand and Cambodia to negotiate openly, to resolve differences and, more importantly, to achieve a fair, lasting solution?
Yeah, it's a really great but a challenging question.
On one hand, neither Thailand nor Cambodia like to see the escalation of the conflicts to the opposite.
Both sides have shown their respective keen feelings to solve this issue in a peaceful manner.
But, on the other hand, as everyone knows, bordering disputes are always emotional conflicted, complicated issues for each parties.
Therefore, for the near term, for the near interest, neither side has little room for concession because that will take very severe consequences from domestic.
But on the other hand, just because the domestic long terms, if they allow the acceleration continue to rise, that will certainly damage both of the domestic long term interests.
So it's a really complex dynamics facing such a complex situation.
China needs, number one, wisdom.
Number two, justice position.
Number three, friendship with both parties.
I think all of the three China has command already.
Therefore, I think, with sustainable and step-by-step efforts, I think China will play a very clear, a very key role to make a bridge for the both of the parties to set together directly to negotiate mutually accepted solution that benefits not only for both of the countries, but also for the ASEAN country and the region as a whole.
Hmm.
So, considering what you have just elaborated, Dr Yang, we know earlier this year there was a ceasefire deal that was mediated by the US.
Trump administration in Malaysia alongside the trade talks, I guess.
Why do you think so, looking back?
Why do you think that particular peace deal proved to be vulnerable and fragile?
I think it's a very key question and a lesson for all the parties, including the metadata parties.
First of all, I need to stress that the July deal made by ASEAN, especially Malaysia and the United States, was really valuable.
That was, I should say, successful.
However, the shortcoming was and is lack of mutual trust.
In other words, the base of the trust is pretty weak.
So, now that we see the lesson, I think both China and ASEAN as an organization should make joint efforts with Cambodia and Thailand to strengthen the mutual trust.
Mutual trust is a really solid, useful base for any sophisticated solution through sophisticated negotiations.
Without trust, any deal could be like a great building based on sand.
Therefore, China has explored the other way, say beginning from building trust and accumulating trust with accumulating diplomatic efforts.
With both passes.
I think all the related parties, by joint hands, can gradually lay a solid road towards their peaceful solution.
So, looking at this border dispute between Thailand and Cambodia, what do you think it is essentially about?
It's a really sophisticated question because I would say it by this way.
Unfortunately, the Cambodia-Thai disputes were not stemmed from the two parties, but from the third party, the previous aggressor left by the French.
And when the French left very complicated rules about the border, then the cease for the conflicts between the bordering countries had been set.
So I think neither Cambodia nor Thailand can unilaterally solve this problem left by the French.
Even both of the sides made a joint effort.
It's hard to say that can be addressed.
Therefore, I think we need a creative way, based on increasing trust base, to set new rules with a new solution.
Of course it's quite difficult because it's quite sensitive emotionally for both domestic, but it's worth doing it, trying it simply because the peaceful solution, the sustainable peace and the prosperity are greater than the individual disputes about areas or lands and so on.
Therefore, I think gradually, both Thailand and Cambodia, with related parties' support and mediation, will gradually find a mutually accepted way to solve this sophisticated issue left by the previous aggressor.
The final question before we let you go.
In a bigger picture sense, if we talk about say, the credibility of the ASEAN, what kind of challenges do you think this particular conflict between Thailand and Cambodia is posing for the ASEAN?
I think this conflict between the two ASEAN members are very unique but very useful and a worthy lesson for the future development.
Everyone knows Cambodia and Thai conflicts is the first ever since the foundation of ASEAN.
I think ASEAN organization has never such experiences to address such inner organization conflicts.
But if they failed to solve this conflicts, that means the beginning of the collapse of the organization or, by the same token, if they success, that will mean they are seen as a community organization.
That will push the organization upgrade to a greater level, to a more matured level.
That means failure or success of solving this issue for ASEAN countries.
Means their continued rising or declining.
So I think it's very significant and important for the future of the ASEAN countries.
But same token, failure and success of major agent of China on this complex affects the stability, or instability, of China's neighboring areas.
Therefore, both ASEAN and China now actually has been on the same boat.
Let's say they shared the fate.
Neither China and ASEAN cannot afford the failure, but have only single choice.
Say try every effort towards success.
Therefore, this conflict is really a challenge, but also a really great opportunity, both for ASEAN's continued development and China's relationship with this region's sustainable development.
Your point is well taken.
Thank you very much for joining us.
Dr Yang Xinyu, Senior Research Fellow with the China Institute of International Studies.
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China has issued a serious warning to Japan over a senior Japanese official's remarks that Japan should have nuclear weapons.
A Chinese foreign ministry spokesperson said on Monday that China is shocked by the remarks.
The spokesperson called the remarks a clear provocation against the global nuclear nonproliferation system and a threat to peace.
The Japanese official told reporters last week that the time had come to begin negotiations and discussions on obtaining nuclear deterrents.
Obtaining nuclear weapons would upend Japan's eight decades-long post-war ban on the capacity.
So joining us now on the line is Dr Liu Kuangyu from the Institute of Taiwan Studies, Chinese Academy of Social Sciences.
Thank you very much for joining us.
Thank you.
This is for you.
So, as we look at this particular remark by this Japanese official that Japan should have nuclear weapons, and this recent remark by Japan's Prime Minister, Sanae Takeuchi, regarding the Taiwan, the Taiwan contingency, what do you make of the correlation between them?
Well, we see these statements made by the Takeuchi cabinet are neither coincidental or isolated nor personal i think they collectively reflect the political agenda being advanced by japan's extreme extreme right-wing forces by denying historical and historical and legal facts they undermine the existing post-war international peace order and simultaneously they're closely integrated with a so-called anti-china pro-us strategy and and the geopolitical trajectory.
So gradually pushing Japan back onto the path of militarism through a so-called salami slicing approach.
So this includes seeking the political, military and economic status of so-called leading global power.
And the hype surrounding the taiwan question, japan's pursuit of nuclear weapons, both align with this fundamental strategy and trajectory, and i think both are based on japan's desire to negate the arrangement made under the post-war international order, and particularly those concerning the territorial sovereignty and political military status of japan as a defeated nation.
They also reviewed japan's tradition and instinct, dating we back actually actually to his modern or even ancient history of seeking to resolve relations with neighbors through force or aggression to achieve its own illegal interests.
So this is precisely why China expressed shock and pointed out that such actions undermined international peace.
So we understand, over there in Japan, there are these three non-nuclear principles which prohibit possessing, producing or permitting the introduction of nuclear arms.
They were first declared in the Japanese parliament, the Diet by then.
Japanese Prime Minister Isaku Soto back in the year 1967, who then won the 1974 Nobel Peace Prize for this very declaration.
So, looking back, how do you think these principles the three principles here have contributed to peace for Japan and this nearby region?
Well, we must review this issue dialectically.
On the one hand, these principles represent Japan's response to the memories of Hiroshima and Nagasaki atomic bombings and domestic anti-nuclear sentiment.
They have long served at the cornerstone of Japan's state policy and a crucial safeguard for Japan's post-war peaceful development.
We know it as a defeated nation that initiated war and the mass killings.
These principles constitute a significant expression of Japan's historical reflection and self-restraint against militarism.
And they also form the vital prerequisite for the international community's reintegration of Japan as a normal member.
But on the other hand, we see that formulation of these principles, principles also emerged from very complex historical context, reflecting considerable, actually political bargaining, compromise and calculation.
The Sato administration.
They long practiced one thing while actually advocating another, while projecting the image of Japan's pacifism to firmly bind the US as Japan's nuclear umbrella.
And they also previously demanded that Japan demanded the US to conduct nuclear retaliation against China during so-called Sino-Japanese War.
And the Japanese never ruled out Japan's independent nuclear armament option and having ordered the initiation of nuclear weapons technology research as early in the 1960s.
So Sato actually simultaneously championed in anti-nuclear rhetoric while tacitly advocating permitting the transit of US nuclear power weapons and vessels.
And he renounced nuclear weapons while preserving the rapid production capacity.
So I think the Nobel Prize actually appear most as a Western reward for his pro-American, anti-communist stance, rather than endorsement of so-called pacifist convictions.
So this contradiction persists to this day, as evidenced by the increasing, increasingly unabashed right-wing governments in Japan.
Well, thank you, by the way, for putting that very important segment of history regarding say, Cold War, into perspective.
That's very important context for our listeners to understand.
So we understand.
Actually, in 1999, a senior Japanese Defense official was sacked after coming out of fire for suggesting that Japan should consider arming itself with nuclear weapons.
And fast forward to today.
I think seeking to alter its basic nuclear policy remains to be very much controversial in Japan.
So with that in mind, why are some officials still making this suggestion?
I think within the LDP, the Liberal Democratic Party, those factions seeking to breach the principles.
I think they aim to enhance Japan's strategic value to the United States and try to divert domestic conflicts and accumulate political capital.
And their objectives are twofold.
One to solidify the center right voters based and to open the door for the revival of Japanese militarism.
So we see that within one month of taking office, the Takahashi cabinet has relentlessly provoked across the critical red lines the Taiwan Strait, the taiwan question, and historical perceptions and security policy.
So its objective is very clear to leverage external crisis to reshape japan's identity as a so-called normal nation, a normal state, and break free from the dual constraints of the his constitution and the three non-nuclear principles.
So on the nuclear questions uh, sakaichi's logic is stark and dangerous.
Given america's strategy to of retrenchment and China's so-called military rise, Japan must enhance its effectiveness of extended deterrence.
And the most direct means is to permit the deployment of like, for example, B61 tactical nuclear bombs at US bases in Okinawa, in Iwakuni or Yokosuka.
For Takahashi.
This could both demonstrate loyalty to the US strategy and establish a credible deterrence against China and also North Korea.
So, as you suggested earlier, this remarks regarding the nuclear weapon, nuclear deterrent on the part of this Japanese official, as well as this Takeichi's remarks on Taiwan recently.
They are not isolated.
They are interconnected with one another.
So, looking at the bigger picture, we know.
According to a recent Kyoto News survey in Japan, The approval rating for the cabinet of Japanese Prime Minister Takeuchi has dipped to 675, with a majority of respondents saying that her remarks on Taiwan contingency have affected the Japanese economy.
How would you look at the results of this particular survey here?
Yeah.
First the Kyoto News is considered.
Although it's an agency, it's a news agency it is considered somewhat pro-left.
So that's a background or pre-context context we look at their survey.
So if we check this survey, check the numbers, we see that more than 75 of respondents who disapproved of the cabinet cited their that Takai's remarks on Taiwan are a negative or verbal gaffe.
So meanwhile, also in the current poll by the Nikkei, another news agency, the four major issues of great public concerns were uh prices, foreign affairs and security, and pensions and economic growth.
So this indicates that while japanese society still enjoys so-called a honeymoon area with takaichi, the mainstream public opinion, they clearly expressed their desire for stable, rational domestic and foreign policies that uphold the core interest of economic and social development of the of this country.
So this is prevailing public sentiment that takaichi must confront.
So should she choose to go against it, she would definitely lose the public support very shortly.
Particularly concerning Japan's current economic outlook.
We see the news that in the third quarter of this year, Japan's real GDP is about 18, making negative growth for the first time since the first quarter of last year.
Just like many politicians and experts, they urge the importance of the smooth Japan-China diplomacy.
Japan's economic currently relies heavily on the importance from China, including good and red earth minerals and pharmaceuticals.
And also the Chinese tourists have contributed a very vital part of Japan.
So the cost could be very high.
Thank you very much, Andy.
Your point is well taken.
Dr. Liu Kuangyu from the Institute of Taiwan Studies, Chinese Academy of Social Sciences.
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We'll be back after a very short break.
Welcome.
I'm Elav Ellard, economics professor and member of the Data Science and AI Center at New York University, Shanghai.
On the World Today program, you can find in-depth and impartial insight, as well as critical commentary, on key trends in the Chinese economy, financial technology, business and blockchain.
To prepare for the world tomorrow, join me on World Today.
You're back with World Today, I'm Ding Hen in Beijing.
The U.S. held separate talks with Russia and Ukraine in Miami over the past weekend.
Washington describes both meetings as constructive.
Russia and Ukraine also say that the talks were productive.
The talks came after European Union leaders struck a late-night deal to lend Ukrainians 90 billion euros over the next two years.
However, a bid to use 210 billion euros in Russian cash frozen in the European Union ultimately failed.
Russian President Vladimir Putin has accused the European Union leaders of attempted robbery.
So for more joining us now on the line is Dr Zhang Xin, Deputy Director of the Center for Russian Studies, East China Normal University.
Welcome back.
Thank you for having me.
So EU leaders actually held almost 17 hours of negotiations before they managed to reach this particular deal in terms of the loaning to the Ukrainian side.
Would you agree that this is a victory for Ukraine, a victory for financial stability and a victory for the European Union, as some EU leaders have held it?
I would say it's a plausible step, a plausible action taken by you, in the sense that it gives another year of financial aid to Ukraine to keep it still in the political struggle for at least another year, and also it managed to found a practical solution to reach at least a temporal consensus within the EU country in terms of the form and amount of financial aid to Ukraine.
That's applaudable, but if the ultimate goal is to help Ukraine found the ultimate solution to the ongoing military conflict with Russia, I think it's still a long way from a true victory.
We understand the interest from those frozen Russian assets, held mostly in the hands of the Belgian government, is already being paid to Ukraine.
But why do you think a bid to use those assets ultimately failed this time around?
A senior Russian official said during this weekend's talks with the United States in Miami that this failure to agree on using those assets was a quote-unquote, a fatal blow.
What is your take?
Using the interest based on frozen Russian assets is one way to use these assets.
Its legal and political implications are different from using the SS themselves directly to give it to Ukraine or use it directly to aid Ukraine.
So this time I think the proposal to use the SS directly causes way more internal political disagreement within EU countries, many countries, many members.
I think it's legally and politically way too complicated, difficult or challenging to use the assets directly.
So the earlier approach of using interest is slightly easier.
So I think the similar way goes to the...
So similar calculation goes to the current approach of using EU's own budget as collateral to provide a loan to Ukraine.
That makes it even politically easier to provide aid to Ukraine.
So I think that's the big difference.
I wouldn't call this a fatal blow.
It just shows there are different legal and political implications of handling Russian frozen assets in Europe.
Some are politically more challenging, some are politically or legally easier to handle.
Yeah, different parties have their own different perspectives, that's for sure.
Now interestingly, some European leaders say the deal looks like a loan, but Ukraine will never be able to pay it back.
Do you think they have a point here?
That's one possibility, although from the published plan we don't know whether that's for sure or whether that's institutionally guaranteed.
We only know these loans are going to be provided, but there's no information from a formal channel to substantiate this claim that it will never pay.
I think these European leaders made a statement as a way to show their strong support for Ukraine.
That may be the underlying message these leaders try to convey.
So, looking at the bigger picture, do you think a solution to this Russian-Ukraine conflict is closer than ever, as we heard from the Trump administration?
This is a tough question.
I still hold my view as I did over the past few weeks.
Relative to the first three and a half years, probably only except for the Istanbul meeting in the early part of 2022.
Except for that moment, we are closer than ever during this military conflict to a possible ceasefire or possible some kind of political solution to end, at least to end, the most brutal, bloody stage of the military conflict.
Because the past four weeks we do see all parties directly involved in making much more concrete proposals to each other.
And these concrete proposals really get to the implementation stage of a possible ceasefire or political deal.
For example, the US side has already started a discussion within its domestic political scene whether any security guarantee provided by the United States to Ukraine should be in the form of a presidential decree or a need to go through a procedure sanctioned by the parliament, by the Congress.
So that's just one example.
The real conversation has moved to that kind of a stage.
So that gave me a hint.
Uh, all parties involved are looking at these detailed, implementable stage of a possible uh, ceasefire or political deal.
So um, they're still going to be a long way very likely uh, and also, the road will be uh uh, very bumpy, i'm sure but uh, relative to the previous two and three uh, three and a half years, i think we are closer than ever to a possible political deal.
Hmm, your point's well taken.
But thank you very much for joining us.
Dr. Zhang Xin, Deputy Director of the Center for Russian Studies, East China Normal University.
Coming up.
China releases 30 new demonstration scenarios for government data as part of the ongoing efforts to improve the country's digital governance.
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China has released a new batch of public data application models to accelerate the use of official data in key sectors.
Public data, including those on public welfare and healthcare, is now available in ready-to-use digital formats, saving corporations and developers the need to start from scratch.
The initiative now covers 100 scenarios across various fields, including public services, industrial development and social governance.
Following three previous batches, the fourth round is now expanding regional coverage.
30% of new scenarios announced are located in western as well as northeastern part of China.
For more.
My colleague Song Ruixin spoke with Professor Liu Baocheng, Director of the Center for International Business Ethics at the University of International Business and Economics.
First of all, Professor, what is the significance of this initiative and what does it symbolize?
The way I see the Digital China is really a nationwide effort to use the advanced digital technology not only as a tool that can service specific sectors, but rather as a new foundation for everything how government can operate, how economy grows, how business community can really build a better access and also how citizens as how to understand a better service both from the public and private sector.
It is about building a country's future operating system on a digital core.
Now the significance is the undebitable, because it is no longer just a matter of industrial policy, but rather in national development strategy, together in synchronization, whereas the Chinese unified market construction, which is really crucial to support the Chinese transition to a high-quality, innovation-driven economy, will be able to secure the competitiveness in the coming decades for China, both on domestic front and also on international fronts.
Then, moving on, one area it has had a significant impact is the financing environment for SMEs, as if the pilot projects have helped SMEs to reduce financing costs.
So Professor, could this model be scaled to fundamentally alter the credit assessment landscape in China?
Absolutely.
This model is transformative in nature because it is there to use the publicly endorsed data to deal with tax issues, customs issues, particularly the credibility of individual companies and also individual households, to be able to create a more well-trusted portfolio for those particularly small companies and individual households.
It's going to help the credit landscape by the money stakeholders, from traditional banks to some of the trust funds and also to social pension insurance, etc.
So it's going to be quite a catalyst for many institutions.
It is not there to replace those you know a smart financing but rather it is there to help them to integrate into a larger platform so that they are going to be there to enjoy better level of transparency among all.
Collaborators is going to facilitate better access and ease of exclusive resources that can really generate a shared benefit for everyone, while the social trust can be further enhanced so that the game can be really changed into efficiency, accountability and also sustainability.
So, as an expert in finance and economics, what progress has China made in the digital economy in recent years?
One is that the Chinese government, both at the central and local level, they have offered a huge monetary and physical subsidies to those companies who have the potential to be a black horse in generating the digital technology and also to proliferate over a larger part of the entire platform to benefit more participants.
Second government is there to issue new opinions guidelines for those generators to first of all to identify Some of the key areas for further growth, for example for the Internet of Things.
Also, all of the ethical and legal principles are also being clarified so that they will not be able to step beyond the border uh, for example, over some of the questionable issues like genetic editing, and also the disclosure of the private information given is now also presenting a quite a concern to many people.
Also that uh the utility landscape and also the ecosystem is being further enhanced so that uh the government call on the trading program, for example, to replace some of the old-fashioned equipment to a more digital operation for companies with government coupons and support and also low interest finance does really help a great deal.
And last but not not the least, is the low altitude economy, where all the drones are also being encouraged on the production side, but also more of the scenarios that can help those people to experiment with the drone economy, for example in the weather forecast, in the civilians over pesticides and crop growth, in the rural revitalization campaign, are also being very much useful and also welcomed by all the participants.
So all these efforts are there also to be able to have a strong enticer for the financial sector to really to pour in the money in order to build their sustained competitiveness.
But the next step is to leverage public data development and utilization to drive the integration and application of data from various sources, thereby better unleashing the value of data as a factor of production.
So in your opinion, which area of integration and development still need improvement?
Because to really to construct a very integrated and also resilient the digital platform on a national basis really requires tremendous amount of efforts.
Now is the four phases the government have really released in the taking off of such pilot program are really there to gather more experience for further cross-domain fusion.
So some of the questions may lie first, how we can really have a more of equal spread of the benefit for such digitization, so that not those underdeveloped areas, given China's large part of the land, can really step up in order to really to reduce the digital divide instead of enlarging it.
And the next is really the rule of the road.
We need more of the matured framework for digital rights and pricing, even to shape a nationwide transparent marketplace, so that all the benefits can be shared.
And, more importantly, it is really the protection of intellectual property rights, because the traditional intellectual property rights with regard to patents, trademark are no longer sufficient to support the new changes in the digital economy.
So therefore, it's not only on the legislation side, but also on the judicial side.
Whole judges and lawyers are being trained and prepared to address some of the digital disputes, And that's also very important.
The other is how we can really divide and collaborate between government and the private sector in terms of the government support and in the utility, and also in streamlining such a level of integration with the right type of incentives.
And these are really very important issues.
We are going to see that definitely there's going to be a solution.
Professor Liu Baocheng, Director of the Center for International Business Ethics at the University of International Business and Economics, talking with my colleague Song Reixin.
Coming up.
We're going to take a look at why more and more Chinese beverage brands are tapping into the US market.
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A new generation of Chinese tea beverages is now expanding overseas at a faster pace.
Mi Xue, a Chinese-style tea and dessert chain, has opened its first US store in Hollywood, Los Angeles, marking a key step in the company's effort to enter the American market.
The store is offering a menu similar to its China outlet with some adjustments for local tastes.
It also adopts a low-price strategy compared with many local competitors.
And this opening is part of a larger trend in terms of Chinese beverage brands, including Hei Tea and Chagi, rapidly expanding their global footprint.
For more.
My colleague Xu Yaowen earlier spoke with Dr Li Lun, Assistant Professor of Economics with Peking University.
Professor Li.
Chinese tea beverage chain Mingxue has just opened its first store in Los Angeles as part of its global expansion strategy.
We have learned that, so far, the brand operates stores outside China in 13 countries, including Australia Singapore, South Korea Japan, so on.
So what were the key factors that prompt Mingxue to launch store in America?
And how does the brand plan to expand further in the American market?
Yeah, so i think the us market has uh, you know, some things that chinese milk tea brands welcome or are looking for.
So, first of all, it has a very large and mature market for beverage.
So you already see, you know coffee shops everywhere and consumers are already very familiar with the concept of bubble tea and also, you know, flavored drinks.
So i think this is basically you know, unlike some of the the countries where you know, people have never heard of the bubble tea uh, you know, as a product.
And also, I think second, American consumers, especially the younger ones, they're very open to new taste of the visual presentation of the branding of milk tea as a lifestyle, which I think aligns very well with what Mi Xue and other Chinese milk tea brands are trying to emphasize.
Third, I think expansion into the US really helped these companies in terms of upgrading from a regional brand or a national brand at China into a global consumer brand, which is basically very important because the competition is beginning to intensify at China and also at Southeast Asia and other countries.
So I think the move to enter US at this stage is very important for me, you know.
As for next step of global expansion, michelle's us debut features a premium location with affordable pricing model opening its first us store in hollywood while keeping prices as low as a dollar and 19 cents and offering up to 200 sugar content to cater to local tests.
So how does the brand balance high operating costs with high quality and low price positioning?
So I think this strategy basically, as you mentioned, premium location with affordable pricing
So the store itself.
It may or may not be profitable, because offering dollar drinks at very premium locations at first may not be the most profitable thing.
Because even if, for example, you have a lot of people going around and buying drinks,
I think part of the operation is also a marketing campaign.
So I think it needs to have the US consumer become more familiar with Michio's presence.
So one way to do that is basically to have these stores at these premium locations and make sure that when they enter the store they are getting something that they like.
So eventually, of course, when they open up more brand at you know less premium or less visible locations, people will be, you know, familiar and see.
You know, that's the store that I went to when I went to LA.
That's the store that I go to and they have very good milk tea.
So I do think in the in the future, in terms of the supply chain, in terms of adjustments, so right now for premium locations or, you know, premium cities, it's probably easier for them to, you know, ship some of the you know ingredients from China or from abroad.
But I think eventually they have to kind of adjust their supply chain and make sure that they have, from the local markets, be able to kind of have all of the ingredients they need to make the milk tea.
We have noticed that, you know, in recent years, not only Mishu, but other Chinese tea beverage brands, such as Hey Tea or Chaji and Auntie Jenny, they're all making inroads into the US market.
What motivates them to venture into the US market.
Yeah, so i i do think it's a.
It's a ship in terms of both the business model and consumer preferences.
So i think people right now, especially people uh in the us, especially for the younger generation, they're no longer only seeing t as healthy product or a cultural product.
They're seeing tea as something casual, something with a social aspect.
It's also highly customizable, because you can change the level of sugar, the level of milk to it and their mixture of flavors, not just bitter in the case of coffee.
So I think it's a very customizable, it's a drink that can signify your personality.
So I think these are the opportunity for these Chinese private friends to enter U.S.
They do have several challenges.
First of all, I think the operation cost is going to be much higher in the U.S.
That includes rent, labor and also compliance costs, because they have to make sure that they follow all the laws and requirements of the local market.
And also, I think in terms of taste preference is very different.
So Chinese consumers, or Asian consumers, generally want their sugar content to be as low as possible, but it may not be the case for US consumers.
And also in terms of localizing recipes, so I think they need to put more R&D money into that.
And third, as I mentioned, if you want to really scale up your operation, you need to have a reliable supply chain, and that supply chain has to be local, which is honestly much harder than just opening a few shops here and there.
So overall, I think there's still some long way to go, but I do I'm very optimistic about the success of these Chinese beverage brands.
Some suggest that Chinese tea brands entering the US market is similar to Starbucks' success in introducing coffee culture into the Chinese market nearly 30 years ago.
What do you make of that?
And how likely is that we will see a similar replication?
Yeah, that's a very good question.
It's pretty hard to say, because right now milk tea, especially milk tea in Chinese style, is a novelty.
But for the future, I do think some of these Chinese brands are not just offering products.
They're offering basically, a platform for a continuous innovation for products.
The same way as when we go to a Chinese tea brand.
We're always seeing seasonal menu.
We're always seeing new drinks being promoted.
So I do think in that sense milk tea is similar to the tea version of the coffee culture or the coffee revolution.
But I do think in terms of the flavor and the taste, it can be more.
Uh there's, there could be more variation.
It could give it, give it more, you know, power to stay longer than coffee.
Uh because, you know, not everyone like coffee and not everyone like the bitter taste of of coffee, but i do think tea, in this case, can be more, much more acceptable.
And lastly professor, so beyond beverage brands like michelle, some successful chinese global brands spend sectors such as new energy vehicles, smart devices and digital entertainment.
What core strategies do these cross-industry brands share, and what lessons can Chinese consumer brands learn from them to achieve long-term success in markets like in the US?
So I think one of the common mistakes that you know Chinese brands used to do is that they want to design something that's customized to a certain market.
Basically, you know, mimicking a US company, what a US company would do for US consumers.
So, but for the examples that you mentioned, whether we're talking about Mishu or BYD or you know the entertainment they're made for, basically the preference for Chinese people mainly.
But it turns out that as a way of cultural export, you know US consumers, what they want is not, you know, some American version of Chinese bubble tea.
They want the authentic stuff.
They want the authentic tea that the Chinese population has been drinking, you know, day in and day out.
So I do think that, you know, having something that's successful for Chinese consumers and then try to, you know, exported to foreign market is going to be more successful than trying to mimic a local company.
And you will end up with something that neither Chinese or the U.S. customer would like.
Dr. Li Lun from Peking University talking with my colleague Xu Yaowen.
That's all the time for this edition of World Today.
I'm Dinghan in Beijing.
Thank you so much for listening.
Bye for now.
