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China and the UK to engage in complementary win-win trade cooperation.
As a stammer kicks off his China visit,
Chinese EV makers set their sights on the UK market amid deeper economic ties.
Chinese envoy to the UN urges Japan to reflect on and correct the fallacies in Takeuchi's remarks on Taiwan.
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British Prime Minister Keir Starmer is in China on an official visit, the first by a UK leader since 2018.
Starmer is leading a delegation of senior executives and representatives from more than 50 major companies spending finance, pharmaceuticals and manufacturing.
The ministry added that China and the UK plan to sign trade and investment cooperation agreements emphasizing complementary and win-win cooperation amid rising global trade protectionism.
Bilateral trade in goods between the two countries reached about 104 billion U.S. dollars last year.
So for more on this, let's have Dr Yao Shujie Chang Kong, Professor of Economics at Chongqing University.
Professor, given your extensive professional and living experience in the UK, what's your initial reaction to Prime Minister Starmer's visit to China after eight years?
How does the current China-UK relationship vibe compare with your previous experience in this realm?
I'm very pleased that Prime Minister Starmer is coming to visit China.
After eight years of the Prime Minister coming to China in 2018, and after that, China and the UK entered a very dark age of the relationship.
But in the previous year, when I was in the UK, before I came back to China in 2014, there was a 10 years long of the so-called golden relationship between China and the UK.
The relationship between China and the UK at that time was so, So good, so well received in the community in the country, also including in the academia circle as well as diplomatic circle.
But I think the situation changed from 2016 up to almost last year.
The global situation has changed rapidly and also international relationship has become highly complicated.
The most recent development is the United States, which has been highly hostile to almost every nation, including the close allies like the UK, the European Union, Canada and others.
So there is a fairly significant tendency that the Western countries, especially the former or even the present allies, close allies of the United States.
They started to assess the international relationship between the major powers, particularly between themselves and China, between themselves and the United States and also between China and the United States.
After all, China has appeared to the rest of the world and also behaves as it appears to be.
China is a peaceful, rising major power, economic power in particular, for the rest of the country, the rest of the world, to see the real situation.
China's emergence as the new power is fairly different from what has been behaving in the United States.
Because China didn't use these kinds of telephone.
China didn't invade another country, China didn't actually go to another country and stop the president.
And China always try to find a solution between Russia and the Ukraine crisis.
They always talking about a peace deal and also diplomatic effort, larger than military effort.
But the United States use missile use, weapon use, agitation of international ideological propaganda and also the kinds of mistrust in the international system.
UK have a very difficult situation.
It used to be a very close follower of the United States.
But nowadays Donald Trump wants to take Greenland, which is part of the European sovereignty territory.
Donald Trump can take Greenland.
He can also take other countries.
Who knows what will be the next target?
And also, in terms of international business relationship, the ability to take advantage of the medium-sized economic power such as the United Kingdom.
And they feel that working with the United States is getting more and more difficult.
So maybe China as a major economic power, this is a good opportunity for them to change their course of business and diplomatic relations.
Then professor, from britain's perspective, based on your understanding of british society and economy, how do ordinary enterprises and citizens there perceive this visit?
What practical benefits are they most eager to see from working with china?
I think ordinary citizens, ordinary enterprises, What they need is a better life and what they need is better employment opportunities and also good salary.
Now, by antagonizing a major power, ignoring the upsurge of China as the major power, it actually gives up lots of opportunities.
For example, it banned Huawei.
It banned the nuclear corporation of Guangdong building up the nuclear station in the UK.
You already have seen the consequences.
Not only huge amount of money have been wasted, but the infrastructure development in the UK has been lagging behind.
And also people are getting ever more stressful than before.
The market prices, you know, street prices are getting higher and higher.
Housewives.
They're getting more and more difficult to make the two ends meet.
Consumers they suffer, you know.
Also, the job opportunity are getting ever more limited, especially the high-end opportunities, and in terms of the ai driven economy, the uk doesn't have a good platform as compared to what we see in china and also the united states.
Now the small and medium-sized countries.
In order to not to be left behind in the ai driven technology in the new century, i think the most advisable way is to work with the major power, because they cannot invest so much for the platform, they cannot invest so much for the it system.
They need to cooperate with the major power such as china in the united states.
Unfortunately, The United States, whatever they do, is always calculating for its benefit.
Of course China calculated Chinese benefit.
But China is far more open and far more inclusive of being willing to share the technological progress, to share the market, particularly with the European nations such as the UK and the European Union, which has become one of the biggest trading partners, overtaking the United States, over the last eight years.
We know since taking office, the Stormer administration has prioritized economic revitalization.
Now it's leading a delegation of over 50 executives from finance, pharmaceuticals manufacturing, etc.
Looking at the state of these industries in the UK, what core concerns does this delegation reflect?
I think it is reflecting what the UK have the technological endowment and also the manufacturing capacity, especially the pharmaceutical and aerospace industry.
The aerospace industry is still not yet open to China, unlike the Airbus, which set up two production lines in Tianjin.
But the UK Rolls-Royce.
They are still a little bit making some progress, but it's not highly significant as Airbus.
But pharmaceutical, as the population is ageing, people require more high-quality medicines.
And the UK has lots of advantages.
I mean one of the biggest multinational companies produces high-quality, highly profitable medical products which are needed in China.
And China has a huge market.
The population is aging so fast, and the size of the elderly is so large.
They can provide lots of opportunities.
Of course, apart from selling the product, I think the more advisable way is to have cooperation with the Chinese technology company, pharmaceutical company and also materials company, and have joint research.
Also, UK is still among the most populous countries destination for chinese overseas students and this concept you know, exchange people to people exchange and receiving large quantity of chinese students and also have this bilateral investment in also trade would give lots of stimulation to the revitalization in the UK domestic economy.
And this is why Dahmer, I think he's right.
I think he's very pragmatic.
He's unlike Theresa May, unlike Sue Marker.
I think he is very clever.
Professor.
Before the visit Stalmer says Britain doesn't have to peak between the United States and China.
So how do you rate his remarks here, especially given rising US unilateralism and strained transatlantic ties?
How realistic for the UK seeking a balance at this point, especially given what you mentioned how crucial China is for Britain to diversify trade and reduce outside pressures on its economy.
Yes, it's very obvious.
Even Donald Trump, they say.
Current global economy, geography has become the so-called G2, ie the United States and China.
Britain, although it's still one of the richest nations and also number six in the world.
But Britain's population is only 70 billion people.
It's still relatively, compared to China and the UK, it is a small country.
To the best, it's a medium-sized country.
And because it's small and medium, it means there's a lot of complementarity between the UK and also the major business powers such as China and the United States.
Now, if you choose the United States and by antagonizing China, you basically lose half of the world market, or vice versa.
So, Dahmer is right.
By not choosing the United States or China.
It means that Britain needs to work with both superpowers so that you can have enough market space for maneuver, market space for economic development in the UK.
Professor, then from China's perspective, what are the key expectations for this visit?
Which sectors offer the biggest opportunities for new growth?
China is welcoming every nation, including the bigger one and the smaller one.
In the UK, the UK is not big, it's also not small either.
The China-UK bilateral trade is about 100 billion US dollars.
Considering that the uk have a population only one province of china and this 100 billion us dollar is is not negligible.
It's actually highly significant.
But there is still room for expansion, I think, despite the tense relationship between China and the UK.
Another issue is that there could be some sort of trade balance.
China has more surplus and the UK has more deficit.
But the UK deficit is partly due to the UK restriction on the more advanced high-tech industries export to the chinese market.
If uk have more trust and china trying to provide more trust for the uk company, they can actually build up more.
Uh you know partnership.
Uh, especially the pharmaceutical, the aerospace industry, the high-end manufacturing and also uh biotechnology.
Uh, you know research, ai research.
If they can come to a consensus and they have built up the mutual trust, the real trust, rather than antagonizing either due to the political or ideological concern, if people ignore or try to walk away To solve this kind of problem, I think there will be a very good relationship.
China is highly proactive and positive and welcoming for the UK relationship.
Professor, one last question.
With your years of experience in both China and the UK, what's your take on where China-UK relations are headed?
I think the UK and China relationship is up and down.
It's very normal, but I think it's more driven by some sort of political sentimentality.
I just hope that China and UK can find a way to resolve the difference or accept the differences, but resolve the kinds of workable differences, and I think I have a positive.
In the longer term the two countries should have lots of room for working together, beneficial both peoples and both nations.
Thanks, Professor, for this insightful analysis.
That was Dr. Yao Shujie, Chang Kong Professor of Economics at Chongqing University.
Coming up.
We continue our discussion on China-UK relations as Chinese EV makers set their sights on the UK market.
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I am Chuchu Zhang, Deputy Director at the Center for Middle Eastern Studies at Fudan University.
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Chinese electric vehicle brands are accelerating their expansion into the UK market as Beijing and London move to strengthen economic ties.
The push is being driven by strong demand for EVs, especially from leasing companies, which account for around 60 of new car sales in Britain.
Following BYD and Cherry, three more Chinese automakers NIO, ION and Zikr are set to launch in the UK.
Chinese brands doubled their market share last year to 10%, rising to nearly 20% in December.
So for more on this, my colleague Song Ruixin spoke with Mike Basting, senior lecturer at the University of Southampton.
Mike, before we get into the big picture, let me start with something easy.
What kind of car do you personally have?
Which brand?
I mean, I'm certainly I don't actually have an electric car at the moment, but a hybrid is something we're looking at very soon.
So I do like the idea of electric cars.
The range is an issue.
Obviously, that's expanding a lot.
And a lot of our friends and people I know increasingly drive electric and the sales have really taken off.
So I think it's only a matter of time.
At the moment, I'm driving a Kia Sportage.
Yeah.
So we've recently seen Chinese EV brands like BYD, NIO and other brands stepping up their presence in the UK.
Then, from your own observation in the UK, what do you think is the main factor driving this push right now?
I think there's several factors.
Price comes into it.
So it's a little bit cheaper, but I don't think that's really driving what we see as a very significant increase in Chinese EV cars on the roads now in the UK.
I think they've doubled their market share from 2024-2025 to about 10%.
There's a lot of technological advantages.
BYD and other Chinese firms have really integrated their supply chains.
So they have vertical integration, so they have control over the supply chains, battery production.
So there's far more flexibility and far more efficiency there.
They've also designed their electric cars specifically for power points electric power points, battery rechargers rather than many European brands, which have adapted combustion models to an EV or a hybrid that many people opt for.
So I think those three reasons, high tech as well generally.
So I think this is a very, very interesting development where the Chinese brand is technologically superior and the management, the vertical integration of their supply chain is far superior as well.
And that's why they're enjoying a competitive advantage slight price differential, which helps as well.
Yeah, exactly.
I see some commentators or analysts suggest that the real test in Europe isn't the vehicles themselves, but after sales services and local adaption.
So, from a UK perspective, what do you think or feel the biggest gap currently lies between what Chinese brands offer and what British consumers expect.
Well, this is where Chinese brands Probably the perception might be that there's a little bit of a disadvantage because they're imported from so far away.
And obviously, service and support infrastructure is critical here.
However, as you just said, the cars have been designed to plug directly into battery recharge points, so they have an advantage there.
I think it's it's something that would have been an issue going back five, ten maybe or more years.
But i think that the perception and the trust now is with chinese brands technologically superior and if that support infrastructure isn't there now, i don't think it'll be too long before it is there and that the um, the support services in this, this country, will welcome and warm to a very competitive brand wherever it comes from, in this case increasingly from china.
I think the key issue for the british consumer when it comes to an ev electric vehicle is is range and, and obviously the journeys can be sort of hundreds of miles or hundreds of kilometers, and then the recharging along the way it will be an issue.
So i think that the expectation and again maybe the perception that chinese model Doesn't really compete favorably with a more trusted sort of European brand that many, many British car owners would typically assuade by perhaps years of driving, say Ford or Volkswagen or the famous German or American brands.
So again, I think it's trust and I think it's range that perhaps is an issue.
But again you can see by the dramatic increase in market share of Chinese EV sales in the UK that that really is being broken down very quickly.
And I don't see why that won't continue.
You pointed out the local adaption could be a problem.
Then building on that idea of adaption.
It actually reminds me of my time as a student in London, where academic exchanges and cultural festivals really shaped how people understood each other.
Beyond selling cars, do you see the growing visibility of Chinese EV brands as part of a broader people-to-people dynamics?
I think so, yes.
I think it's not, and it shouldn't come as a big surprise.
It might come as a bit of a surprise to British car consumers and British consumers and European consumers generally.
But it shouldn't.
I think this is really a wave of the strategy, really the sort of internationalisation strategy across many countries, sectors for Chinese brands, which is very much geared to premium, high quality, high tech.
And we will see more and more Chinese EV car brands like BYD on the streets of the uk and it now is as an issue what the technological superiority is there.
It's now an issue of building that brand, that brand association, and build that emotional attachment.
Uh, that that's the next wave.
That uh, british consumers will be looking for.
Where they're very much attached to brands they've known and used for a long time, like i said, ford and volkswagen.
Where byd don't have an advantage is that they're new And now that's good in terms of technological and functional superiority, but emotional attachment is something that needs to follow.
But I don't see why that can't be the case either.
Yeah, successful commercial integration could deepen mutual understanding in areas like education and arts and public perception.
Yeah, brand associations and sponsorship and getting involved with sports and entertainment.
Like many Chinese brands, particularly in the area of entertainment and fashion, Huawei have done successfully as well, but really put it on the map as an emotional statement as well, which I think again, I don't see any reason why that won't be the case.
Mm-hmm.
Then currently, at a time when global trade protectionism is clearly on the rise, both London and Beijing continue to emphasize support for free trade.
Does the very practical sector-by-sector cooperation we've seen in the car industry offer a more resilient model for keeping trade open even amid those wider geopolitical tensions?
I think so.
I think nobody wants trade protection.
Obviously we've seen that coming from America and clearly an extremely maverick president, to say the least that that that is something that I think will change, has to change.
I mean, domestic consumer suffers from trade protection.
It doesn't benefit anybody.
So multilateral trade, bringing down trade barriers across the UK and China and other parts of the world, has to be the way forward.
And EV cars, I think, will receive very, very favourable treatment because again, it's very, very much in the UK domestic economy's interest for this influx, this import of very, very sophisticated high-tech brands, that will stimulate the UK economy and also create jobs and opportunities in the very much needed support and supply sector.
So I think it's a very, very good, positive message for multilateral trade and bringing down those barriers where everybody gains.
That was Mike Basting, senior lecturer at the University of Southampton, speaking with Song Ruixin.
More to come.
Chinese envoy to the UN urges Japan to reflect on and correct fallacies in Takeuchi's remarks on Taiwan.
Meanwhile, China's retail sales hit 50 trillion yuan, or about 72 trillion US dollars mark, and India has finalized a long-awaited trade agreement with the European Union after nearly two decades of negotiations.
This is Road Today.
We'll be back.
You've been listening to Road Today with me, Ge'anna, in Beijing.
China's permanent representative to the United Nations has urged Japan to reflect on and correct remarks by Prime Minister Sanai Takeuchi concerning the Taiwan region.
Fu Cong made the statement in New York during an open debate at the Security Council on the rule of law in international relations.
The return of Taiwan to China is a victorious outcome of the world anti-fascist war and a crucial component of international order in the post-World War II era.
This ironclad fact has been firmly secured from historical, political and legal perspectives.
Takaichi's fallacies grossly interfere in China's internal affairs, renounce Japan's international obligations as a defeated nation, openly challenge the international order based on international law and severely violate the fundamental norms of international relations grounded in the purposes and principles of the UN Charter.
We urge Japan to face history squarely, reflect on and correct its mistakes and provide a responsible account to the international community through concrete actions.
Takeuchi said on Monday that, in the event of a contingency in the Taiwan Strait, the United States and Japan could coordinate to evacuate their citizens, adding that Japan would not abandon its allies.
She has previously claimed that a conflict over Taiwan could threaten Japan's survival and attempt to justify the exercise of collective self-defense.
China's foreign ministry also responded, saying Japan has no right whatsoever to comment on China's Taiwan from either a historical or a legal perspective, and urged Japan to cease causing trouble on the Taiwan question.
So for more on this, joining us on the line is Yang Xiyu, research fellow at China Institute of International Studies.
Thanks for joining us.
My pleasure.
Sanae Takaichi has brought up the Taiwan contingency again just before the election.
Do you think this was just a slip or a calculated political move?
Who is she really trying to signal to?
I think the Kaichi is playing a dangerous gamble.
What she said means she had put Taiwan issue into her election campaign as a leverage to fan up the fundamentalist nationalism in Japan, to fan up the right-wing populists, so that she can make use of this issue for her political purpose.
Therefore, Taiwan issue is her tool serving for her political purposes.
Takayuchi said that if something happens in the Taiwan Strait, the US and Japan might coordinate to evacuate citizens.
What do you think is the purpose of her mention of the United States?
Is she trying to force America into the situation and bring Taiwan region into the US-Japan security framework?
It's a very important question.
In general people always say in international relations it's often to see the big country, big power, abducted the small power or weaker power.
However, in Japanese playbook, Takahashi has laid a trap for the U.S. on Taiwan issue.
Everyone knows this current administration in the United States, say Trump II administration, has sophisticated adjusted the US policy towards Taiwan.
For example, in the latest National Defense Strategy report.
None of Taiwan's words appeared in the report and with many other signals.
That means the U.S. has readjusted their policy toward Taiwan towards strategic ambiguity.
And Takahashi eager to pull U.S. back to the so-called transparent strategy towards Taiwan.
Therefore, she made a trap, say, allied relation.
Therefore, she wants to make U.S. as abducted body, so for Japanese purpose on Taiwan.
Professor reports believe that these statements again reveal how Japan's right-wing forces are stirring tensions and pushing for remilitarization, suggesting that her repeated hardline remarks are driven by personal and party political calculations.
So how do you view this strategy of using radical rhetoric to win votes?
And more importantly, what does it imply for Japan's democratic process?
Well, I think Japanese right-wing politicians have been trying to pull Japan toward a remilitarization.
As they said, they want to become a normal state.
But everyone knows, politically and economically, Japan has been normal already.
And what they want is to normalize their past military capabilities.
So we see, all their efforts towards the security issue are designed to remilitarize their capabilities.
And the Taiwan issue is this latest leverage for that purpose.
During the past, they repeatedly exaggerated the so-called China threats.
And the Taiwan issue is a newly added leverage for their remilitarization.
Through this election campaign, Takeuchi repeated this issue with more provocative remarks.
On one hand, she wants to, as I mentioned earlier, want to fan up the fundamentalist nationalism sentiments.
On the other hand, She wants to make Taiwan issue as a new pillar to exaggerate China's threats, to build up a new excuse for the re-militarization.
Therefore, Taiwan issue is not only the core of interest of China, but also a very important issue for Japan's future.
If Japan makes Taiwan as leverage for the re-militarization, that will put Japan in a very dangerous future.
We know, since her radical statements, China and Japan relations have visibly deteriorated, affecting tourism, trade and supply chains.
Do you think the Takeuchi's administration has underestimated the economic fallout of Japan?
Let me put it this way.
No matter Takeuchi understand or misunderstand the negative consequences by damage China-Japan relation economically, she put top priority on her right-wing purpose, say revision of Japanese pacifist path.
Between the economic benefits and her political interests,
Unfortunately, she put her political interests and the purpose above over Japanese economic interests.
Therefore, no matter how serious the consequences by the cool China-Japan relation, it seemed to me she had determined to go ahead for her right-wing political purpose.
Thanks for your in-depth analysis.
That was Yang Shiyu, Research Fellow at China Institute of International Studies.
Coming up, China's retail sales hit 50 trillion yuan or about 7.2 trillion US dollars mark.
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China's consumer spending topped 50 trillion yuan for the first time in 2025, or more than 7 trillion US dollars, cementing consumption as the country's largest driver of GDP growth.
Authorities have revealed some fascinating trends.
Demand for household appliances, mobile phones and new energy vehicles surged.
At the same time, new consumption models and scenarios continue to evolve, reshaping how and where people spend.
Structural shifts were equally evident.
The silver-haired population emerged as a growing source of demand, while inbound consumption from overseas tourists gathered fresh momentum.
With more.
My colleague Zhao Yang spoke with Li Lun, assistant professor of economics at Peking University.
So, Professor Li Lun, thank you very much for joining us.
China's consumer spending topped 50 trillion yuan, or 7 trillion US dollars, for the first time in 2025.
This is according to China's Ministry of Commerce.
So how meaningful is this milestone?
Does it mean a real shift in China's growth model?
Yeah, I think this is a very meaningful milestone in the sense that a lot of people previously would doubt that whether China's domestic demand is large enough, whether the scale is significant, you know, meaningful enough to carry the domestic growth, especially in the time when external demand from foreign countries are volatile.
But what we're seeing is that, you know, Chinese consumption is crossing this 50 trillion yuan.
You know benchmark.
And you know, if we look at, for example, you know the composition, basically there's a strong momentum for, you know, consumption upgrading, for example, we're seeing that home appliances, you know telecom devices and the experience consumption all rising.
You know, with 17 or 18.
So we're seeing a real shift in terms of, you know, the consumption composition and also in terms of you know, the contribution of consumption as a percentage of economic growth.
So overall, I think it is a meaningful number, not just, you know, as you know a statistics but but a rather evidence that china's you know growth engine is steadily you know shifting towards a domestically driven quality focused uh overall demand and with china's cpi rising 0.8 percent year-round year in december and coal inflation running higher at 1.2 percent what signal do all these figures tell us about domestic demand and Why are policymakers keen to see inflation move moderately higher?
Yeah, so I think headline CPI at 8.8% and core CPI at 1.2% is a very healthy number.
So basically, it means that demand is still consistent.
It's still rather robust.
And also when we look at core, inflation basically strips away food and energy prices, especially those with seasonal fluctuations.
So it's pretty close.
It's closer to what we feel in actual daily consumption services and everyday spending.
So I think we're pretty confident to say that the economy is moving away from the worry about deflation spiral, and why policymakers are so focused on the CPI number is because when we have a deflationary scenario, people will expect prices to keep falling.
Then there's a wait and see behavior, because they will delay their purchases and wanting to buy it later.
But right now, when we have a core inflation above zero, very confidently and robustly above zero, this wait and see behavior will not exist anymore.
And I think what the inflation numbers are basically telling us China is moving in the right direction.
So away from the deflationary risk.
But also, we still want stronger or more self-sustaining domestic demand.
And also I think the policymakers are doing everything they can to, you know, to reach that goal.
And speaking of consumer behavior, Li Lun, so what were the major consumption trends you've seen?
And what do you think might be some of the new consumption scenario for this year, especially for young people and Generation Z?
Yeah, so I will mention three trends for 2025 and also include some for 2026.
So one of the most pronounced trend is the upgrade consumption.
So through the trading program, the data, as I mentioned, show very strong gains in home appliances, kitchen products, telecom devices.
So it's a classic sign of you know.
People are replacing what they previously have with you know, better and more smarter devices.
And the second trend in 2025 is that, you know, the experience consumption have surged.
So what I mean by that is culture, sports.
You know travel, you know performances, artistic creation, you know visiting scenic sites or historic sites.
You know Sightseeing leisure places.
So this is the experience economy that I'm talking about.
And third trend in 2025 is the health and fitness consumption is becoming more and more structural.
So whether we're talking about healthy sports events or health consultations.
So these are the categories that's also seeing double digit growth.
For 2026 and especially what you mentioned for young people or Gen Z.
I think of course we're going to see some of that trends continue.
And also, young people are caring more and more about their health right now.
But I think I will mention a few, for example, outdoor and the so-called micro adventure lifestyles.
So basically, whether you're going skiing, for example, or you're going, you know, hiking somewhere, or whether you're traveling, you know whether it's a short haul travel or you know it's a local experience at some you know more adventurous places.
So I think that's going to be a more popular lifestyle.
And also I think young people care a lot about their culture and experiences.
So concerts are very important.
IP themed experiences, especially things like Pop Mart or other Chinese IP that can be combined with their traveling.
And also the third I want to mention is young people are a little less patient than the elderlies.
So they want their services to be instant.
So we're seeing an increase like fast delivery, on-demand services.
So these are going to be, I think, some of the trends in 2026.
Of course, there's definitely more to come.
And you mentioned skiing, Li Lun.
So this makes me thinking about winter sports, tourism, ice and snow economy.
And China's ice and snow economy has surpassed one trillion yuan.
What do you think are the real drivers behind this surge?
So I think this is a phenomenon like since the Winter Olympics.
And once I think, For the previous several years.
We're still talking about building the infrastructure and forming the consumption habits for these consumers.
I think right now, by the end of 2024 actually, China already have over 2,500 ice and snow venues.
That includes skiing and skating.
In terms of infrastructure, I think we have plenty.
In terms of habit formation, A lot of people have developed very advanced skills in terms of their skating or skiing skills.
So winter ice and snow economy isn't just about skiing and skating as well.
You know, it's also local tourism.
It's also, you know, traveling to Harbin or other, you know, northeastern cities for their culture.
So I think it's all you know related and also a very healthy and fast growing industry because, you know, These consumptions are what we call counter cyclical.
So in the winter, normally everything else is being slowed down.
But the ice and snow economy, the winter tourism, is actually a very good counter trend consumption that's good for local economy as well.
And, as you mentioned, nowadays people care more about quality and having a good time when they spend money.
So the services retail sales jumped to 5.5% last year.
So what do you think are the main drivers growth in services consumption?
And for the services industry, such as education healthcare, they are seen as a key focus for boosting China's domestic demands right
Yeah, so I think services are definitely becoming more and more important in China.
So for a share of consumption from 2014, it's around 40%.
In 2025, 10 years later, the share of per capita consumption is 46%.
Of course, I think it's definitely going to grow even further because, you know, in terms of products or goods, there are only several things, certain things that you can buy.
But in terms of experiences, I think there's no upper limit in terms of what kind of health services or sports events or exhibitions or tourist sites that you visit.
I think there's no upper limit of how many times you travel.
And I think these are very important over the longer term as well, because I think In terms of service sector, it not only create demand, it also creates jobs and also improves the income of local population.
So I do think, compared with products which are more and more being manufactured in large factories with a few employees.
The service sector has a very positive effect on the job market, which also supports local consumption.
So I think it's definitely going to be the policy focus for 2026.
That was Li Lun, assistant professor of economics at Peking University, speaking with Zhao Yang.
India has finalized a long-awaited trade agreement with the European Union after nearly two decades of negotiations.
It comes as Europe seeks to reduce its dependence on the United States and deepen ties with other regions.
The two sides also signed deals to strengthen cooperation in defense and security.
So for more on this, let's have Gao Xirui political science PhD, Department of Politics and Public Administration at the University of Hong Kong.
Thanks for joining us, Gao.
Thank you.
After nearly 20 years, India and the EU finally signed their free trade deal.
Caught the mother of all agreements.
How do you assess the key highlights of this deal?
Thank you.
So at its core, the deal is about competition as well as complementary.
So not just political alignment.
On the competitive side, India is clearly targeting labor-intensive sectors such as textiles, where European tariffs used to favor Bangladesh.
So now, favorable access to EU would allow India to narrow the gap and represent itself in the global supply chain on textiles and some other manufacturings.
So, on the side of complementary, the agreement gives India a credible alternative to the United States at a time when its access to the US market is becoming increasingly unpredictable under the Trump administration.
So for the EU.
India also offered diversification, expanding trade without deepening dependence on the US.
So the scope of the deal is quite broad.
Tariffs on around 99 of India's exports to the EU will be eliminated, while over 97 of the EU exports to India will see.
So, if fully implemented, this will make it one of the EU's most comprehensive trade agreements with a major emerging economy.
As you pointed out, the agreement eliminates over 90 of tariffs on goods, reduces EU tariffs on Indian cars and wine, and allows Indian jewelry and textiles to enter the EU duty-free.
What direct impacts will these measures have on industrial development for both India and the EU?
The effects would be somehow symmetric but still meaningful for India and EU.
So India's largest exports to EU are still machinery, chemicals and fuels.
But most immediate gains will be jewelry and textile industries, as well as some several other emerging manufacturing categories.
So jewelry was among the sector's hardest hit by the recent India-US trade measures, including US 50 tariff on India goods.
So this duty-free access to the EU offers a realistic path towards recovery and expansion of India's economy, especially jewelry and some industries which was hit by the US tariff.
So textiles here is more strategic.
India has long sought to replicate Bangladesh's success as a global powerhouse for textiles and garments.
So, as Bangladesh face governance and capacity constraints, now the EU-India deal opens a window for India to scale up its manufacturing and captured market share.
So for the EU, the cheaper access to Indian intermediate goods lowers production costs, while tariff reproduction on automobiles and luxury goods strengthen Europe's food stock in India's fast growing on consumer market as well.
Some media reports have once again highlighted India's long-challenging business environment, which has often been unfriendly to foreign investment and cooperation.
From this perspective, how stable is this agreement and to what extent can the core interests of both sides be effectively implemented?
It is widely acknowledged that the India's business environment has a lot of room to improve.
And the variation of the environment.
Actually, it varies by sectors, state and, of course, the industry.
For example, India maintains some quite restrictive and unfair policies towards some Chinese foreign firms.
But in terms of EU, maybe they might be better off.
For example, they may have easier access to some southern states, such as Tamil Nadu or Kerala, compared to some northern states.
Also, India has stricter restrictions on some specific industries, for example trains and diary, etc.
But they have like less restrictive tariffs on other industries.
So to assess how stable is this agreement, I think they do not threat the very core interests of both sides, unlike the US-India negotiation.
On the other hand, on whether it will be stable.
It still depends on whether all the countries have to approve the agreement within their parliament so that this deal could be implemented.
So we still have to wait and see by then to see whether it will be implemented as it is now.
Let's move to the sharp reaction from Washington.
U.S.
Treasury Secretary Scott Basin publicly complained that a EU-India deal constitutes funding a war against the European Union itself.
What does this dissatisfaction reveal about US concerns over India and Europe cooperating independently of American influence?
OK, so what U.S. suggests is that India has been buying Russian oil and export to Europe.
So from U.S. perspective, it is referring to the fact that it's funding a war against itself.
But however, it actually reveals Washington's discomfort with major economies coordinating outside American leverage.
To be more specific, in recent years, US trade strategy has relied heavily on tariff pressure and trade sanctions as their coercive tools.
So they rely on these tariffs to coerce other partners into more favorable tariff and trade agreements to favor themselves.
So what Washington likely expected was that both India and and the EU would eventually back down in their trade negotiation with Washington under their pressure.
However, this agreement deal changes that equation.
So by giving each other viable alternatives, India and the EU raised the opportunity cost of concessions to the US, meaning that now they have alternatives.
Indeed.
That was Gao Xirui, University of Hong Kong.
That's all the time for this edition of World Today.
I'm Gui Anna.
Bye for now.
