Daily news and analysis.
We keep you informed and inspired.
This is World Today.
Hello and welcome to World Today.
I'm Ding Hen in Beijing.
Coming up, the UN is condemning Israeli strikes on Lebanon calling casualty reports appalling.
Trump renews criticism of NATO after meeting Mark Rudy.
Alibaba is cooperating with China Telecom, a state-run company, in launching a data center in southern China.
Featuring the tech giants on semiconductors
Reports indicate that smaller companies in China are increasingly satisfied with the environment they have.
To listen to this episode again or to catch up on our previous episodes.
You can download our podcast by searching World Today.
First up.
UN Secretary-General Antonio Guterres has condemned Israeli strikes across Lebanon, calling on all parties to cease hostilities.
The UN says reports that hundreds of people had been killed and injured are appalling.
Israel has carried out its heaviest strikes across Lebanon since the current round of conflict with Hezbollah broke out.
It came hours after the announcement of a two-week U.S.-Iran ceasefire.
The U.S. and Israel claim that Lebanon is not included in the current truth.
In the meantime, Iranian media reports say the Strait of Hormuz has been fully closed once again, amid renewed Israeli strikes across Lebanon.
Iran's Foreign Minister, Saeed Abbas Araqchi, says the United States must choose between a ceasefire or continued conflict involving Israel.
So joining us now on the line is Sultan Ali, a retired Air Force officer and author in Pakistan.
So thank you very much for joining us today, Selton.
Actually, under US-Iran ceasefire, Hezbollah had already paused its attacks on northern Israel, as well as the Israeli troops in southern Lebanon.
Why is Israel escalating its strikes across Lebanon?
But frankly speaking, I'm not surprised because Israel has generally played the role of a spoiler.
And now, if you just look a little back, there was a ceasefire at Gaza also, but Israel has not adhered to it and keeps violating it.
Now, coming to your specific question, why is Israel escalating its strikes across Lebanon?
Despite Hezbollah's pause, because Hezbollah is obviously adhering to what you call the norms of the ceasefire which has been agreed upon.
But Israel's escalation.
It reflects a deliberate attempt to widen the theater of conflict because it feels that its vertical objectives have not been achieved.
And even though Hezbollah has paused the attacks under the US-Iran ceasefire, Israel is striking Lebanon to weaken Hezbollah's infrastructure and also to send a message that it will not be bound by the truce.
Now, this is a very rogue behavior, but this is a calculated move to test the limits of diplomacy and to assert military dominance, even at the cost of destabilizing what we may call a fragile ceasefire.
The UN chief has actually warned that the Israeli strikes on Lebanon is posing a grave risk to the fragile US-Iran ceasefire.
Do you agree with this point?
Oh, absolutely.
You see the United Nations Secretary General and, of course, President Xi, and any sane person, any responsible person can see.
They must warn that these strikes, they pose a grave risk because by attacking Lebanon at the very moment where diplomacy has just created nothing much but just breathing space,
And Israel is signaling that it is willing to undercut international mediation.
Now, this is very irresponsible behavior because it undermines trust, it emboldens the hardliners and it also risks unraveling the fragile ceasefire even before the negotiations have begun.
We saw tremendous diplomatic efforts by Pakistan in terms of brokering this fragile and provisional ceasefire between Washington and Tehran.
So how does a Pakistani perspective now feel about those actions that are in violation of the ceasefire?
To tell you the truth, Pakistan is disturbed because Pakistan has historically played a constructive role in mediation, which includes, of course, helping broker the current provisional ceasefire.
So, exactly from a Pakistani perspective, the violations of the truce are not only troubling, but they also erode confidence in diplomacy.
At the same time, they are endangering regional stability, because if the war doesn't stop, If Iran doesn't come to the negotiating table or if other things happen, then Pakistan believes that ceasefires must be respected.
Otherwise, the credibility of the dialogue, it will collapse.
Frankly speaking Sultan, do you think Iran is justified to close the Strait of Hormuz once again in response to escalated Israeli attacks on Lebanon?
Let's face some home truths.
First of all, the Strait of Hormuz was opened before the 28th of February.
And Iran was forced to close it only when Israel and the USA, they attacked Iran.
Now, of course, Iran has agreed to open it for two weeks till, giving a space for the dialogue to take place, for peace.
But you see what other strategy lever is there?
Israel is not being controlled by usa because usa must put its foot down and tell israel to stop it, otherwise there will be no negotiations.
So to use the Strait of Hormuz as a lever is, of course, the only reason and the only viable option which Iran has.
So, faced with the escalated Israeli attacks on Lebanon, Tehran is arguing that closing the strait is a proportional response.
Why?
To pressure Washington because Washington holds the key.
Now such a move, it carries enormous risk for global energy flows.
But Iran's justification rests on the principle that ceasefire violations cannot go unanswered.
And it is a signal to the United States that either restrain Israel or face wider consequences.
Now, do you think the arguably reckless behavior on the part of the Israeli side is at least partially because of the fact that Israel itself has been not so much affected by the closure of the Strait of Hormuz?
That may be a reason, but you see, the important thing is that how can the us reign in israel's behavior?
That was the central question.
So, in my specific opinion, obviously israel is not directly affected and it will be affected If only its own seas were closed, which it is continuing to get its cargo, it's continuing to get its oil and it's continuing to get its own energy supplies.
So that is why it is not bothered whether hormones is closed or it is open.
But in my particular opinion, there is no cause for this kind of rogue behavior.
How do you think Washington can better rein in Israel?
The fact is that Israel has a lot of leverage on the politics which goes on in Washington.
And the Israeli lobby is extremely strong.
They have invested in the media.
They have invested in the government.
They have invested in the businesses themselves, the banks and you name it.
So therefore, Israel thinks that it cannot be bullied or it cannot be put into a position against the wall where it will listen to Washington.
But the fact is that it was a Israeli-American collusion which started this war.
And, like it or not, Washington will have to.
It may struggle to restrain Israel, But it has the leverage.
And what is the leverage?
It is military aid.
It is diplomatic cover and strategic guarantees.
If it chooses to use that leverage, it's uncertain.
But I'm afraid that Washington will have to rein in Israel because if it does not, it risks the ceasefire that comes will collapse under the weight of the unilateral actions.
And therefore there is the only one option left, now that Washington has to put its foot down if it is interested in stopping this war.
Otherwise, I'm afraid we are facing a doomsday scenario.
Across the wider international society or the international community, actually many countries, including traditional US allies like Britain and France.
They are making this voice that Lebanon must be part of the existing fragile ceasefire.
Do you think these voices matter?
You see, they do matter because at the moment, United States, it stands isolated.
All its traditional allies, entire Europe NATO, on which the United States used to have a lot of dependency.
They have all isolated the USA in this particular instance because they were not consulted before the attack.
They have condemned the attack.
And they are the ones who are being directly affected by the closure of the Strait of Hormuz and because of the war and because of Iran's retaliatory attacks on US bases in wider Gulf area.
So therefore, those countries, they are interested that the war must stop.
The question remains that how effective can they be?
They are raising their voice.
You see, the countries like Spain, for example.
They have taken a very strong stance and they have not allowed their soil or the airfields to be used for any of the attacks, or even the airspace for the United States aircraft to fly to attack Iran.
So therefore, while they are condemning everything, but they do not have that kind of leverage which only the United States president can have.
But the United States president has been forced into this stance of seeking a ceasefire, seeking for a closure to all this because, Contrary to all his expectations, Iran struck back, and Iran struck very, very hard.
And the closure of the Strait of Hormuz has rocked the economic epicenters of the entire world.
Do you expect the United States and Iran to make genuine compromises to each other during their upcoming negotiations held in Islamabad?
Yeah, that's a very good question.
Because without compromises, you cannot go forward.
Now remember that there are always in a negotiation, there are maximalist positions and there are minimalist, what you call factors.
Now the maximalists are that you ask for more and more, but you think that through negotiations, through a bit of compromise, things can be whittled down.
And then there are minimalists, which are that this is my last point or last stance.
Beyond this, I cannot go.
Now, of course, the upcoming talks in Islamabad are critical.
But both sides, they have incentives.
And the U.S. wants to avoid escalation that could draw in regional actors.
Because so far, if you notice, none of the Gulf countries have actually retaliated.
Although Israel tried its best to ensure that Saudi Arabia Qatar, Oman and UAE and all these countries Kuwait.
They should be drawn in and they should attack Iran.
But on the other hand, Oman and Qatar, they have decided to side with Iran.
The others have kept quiet.
I mean, besides, of course, making diplomatic noises, they have not joined the war.
So it is important that, while Iran is seeking recognition of its security concerns, genuine compromises are required from both sides.
They will require, first of all, to restrain Israel And, of course, get credible guarantees from Washington that the war will not be started again because Iran doesn't want a temporary ceasefire.
It wants an end to the war.
It wants its sanctions to be lifted and it wants its own position to be recognized and a new law of operating the Strait of Hormuz should be enforced.
Now, these are the things which have to come about, but in all this, Pakistan's role as a host, it underscores its tradition of mediation.
But success depends on whether both sides can prioritize peace over their maximalist positions.
But I must say, Lebanon today is the litmus test of whether diplomacy can prevail over escalation.
If Israel continues its strikes unchecked, the ceasefire risk becomes a hollow promise.
But if restraint is enforced, Islamabad could mark the beginning of a new chapter in dialogue.
And sitting here in Islamabad, I can see that the stage is set for the dialogue.
But the important thing is that the main protagonists, the main actors, that is, United States of America and Iran they have to come to the table, and they will come to the table only and only if the war in Lebanon is stopped.
Thank you very much for joining us.
Sultan Ali, a retired Air Force officer and author based in Pakistan.
You're listening to World Today.
Stay tuned.
You're listening to World Today.
I'm Ding Han in Beijing.
U.S.
President Donald Trump has lashed out at NATO over the military alliance's reluctance to join Washington's war against Iran.
His remarks came after a two-hour meeting with NATO Secretary General Mark Rudy in Washington.
Trump has threatened US withdrawal, accusing the alliance of not showing up when the United States needs help.
NATO members, including Spain, Italy and France, have stopped some American jets headed to Iran from using their airspace and military bases.
Mark Rudy has admitted that Trump is quite disappointed with many NATO allies.
So joining us now on the line is Dr Warwick Powell, adjunct professor at Queensland University of Technology.
Thank you very much for joining us.
Great to be with you again.
So, first of all, why do you think NATO is, generally speaking, unwilling to at least directly get involved in this US-Israeli war against Iran?
Well, the reality is that NATO doesn't have the resources.
It's stretched already.
And the ask has actually been fulfilled by many NATO countries in providing access to facilities and airspace.
Actually,
The sorties that have been run over the course of the last four weeks attacking Iran have actually, in the end, emanated from the United Kingdom.
So the idea that NATO countries have not been involved, I think, is splitting hairs.
NATO countries have been involved.
Some haven't.
But even those who have been reluctant to endorse America's attack on Iran have nonetheless made available access to airspace for the sorties to deliver missiles at Iran.
The Wall Street Journal has reported that President Trump is looking at punishing some NATO members that he believes are unhelpful during this Iran conflict, for example, by moving American troops out of those countries.
Do you believe that is likely to happen in reality?
And also, do you think pulling the United States out of NATO entirely is a workable option for the US president?
Well, the first thing to note about all of this is that the United States, after one day of bombing of Iran, actually claimed that it had decimated the Iranian army.
It actually claimed victory right at the outset, implying in fact that there was no need for anyone else to come to America's aid.
In fact, during the course of the conflict, President Trump gave mixed messages consistently where, on the one hand, he would say that the United States needed nobody, being the biggest greatest, most amazing military on earth, the most devastating, etc etc.
More hyperbolic as the conflict went on and as American strategic defeat became clearer and, at the same time, started to seek to shift blame onto others.
And this is a typical Trump move to shift blame and fail to take responsibility for the consequences of his own actions.
As far as America and NATO is concerned, NATO is America in Europe.
It is funded principally by the United States, and the United States actually has a strong interest in maintaining a presence in Europe.
What it wants to do is get NATO countries to pay more of the costs and to carry more of the frontline responsibilities.
Withdrawing troops is a small action in the scheme of things, because unless the United States is willing to permanently withdraw its funding of NATO and shut down its bases in Europe, frankly talk of pulling troops out at this time in place is not meaningful.
I don't believe that.
There is actually a serious proposition of the United States.
Punishment, again, is a typical juvenile reaction from President Trump.
And he may seek things like tariffs and all those usual tools that he talks about.
But time will tell.
Despite the frictions with the US president, Mark Rudy, the NATO chief has actually openly rejected this idea in front of media that NATO members consider the war on Iran as illegal.
Instead, he argued that there is widespread support in Europe for degrading Iran's nuclear or ballistic missile capabilities.
So, with that in mind, do you think NATO is getting itself to a scenario or to a position where it is offending both parties of the Iran war?
What you've got to remember about NATO is that NATO does not have any military resources of its own.
The resources are those of the member states of NATO.
So that's the important thing to remember.
Now, Mark Rutte, of course, is famous for calling President Trump daddy.
His entire funding base and his entire relevance in the world is contingent on continued American funding and support of the institution of NATO.
So of course, you would expect him to literally continue this egregious pandering to the president's ego on the one hand, but also act as America's mouthpiece in Europe.
He was, after this discussion with President Trump, very clear that, as far as he was concerned, NATO supported America's illegal action and support of the genocides that are taking place in the Middle East at the moment.
This is an outrageous position by a European institution that historically, has made claims to being a defensive organization.
He has in effect endorsed proactive unprovoked attacks on another sovereign nation.
And if he thinks other people are not going to forget this, he's going to be sorely mistaken.
As time goes by,
Unfortunately, NATO is largely irrelevant in all of this.
It makes a lot of noise, but it can't really do much walking.
In the meantime, President Trump, on his own social media accounts, appears to be reviving his threats to seize Greenland from NATO member Denmark.
We know this is an issue that had riled NATO before the war with Iran began.
How would you explain this?
Well, again, you've got to understand the way that President Trump operates.
His approach is quite simplistic.
It's about if you're with me, be with me.
If you're not with me, then I'm going to try to find ways to panic you.
This is what bullies do.
He's always behaved this way and he always behaves in a relatively juvenile manner.
So if he's unhappy with somebody, you will try to find a way to take something from them, to hurt them, to punish them, to prove to them that America, and Donald Trump in particular, has the ability to do whatever he wants to whoever he wants, without anyone else being able to say or do anything about it.
This is a test of Europe and a test of NATO itself, because if they sit back and allow the United States of America to literally come in and overtake the territories of a sovereign European nation, and if Europe does not actually put up a fight, then frankly they are not worth a dime.
And this is exactly what President Trump's trying to do.
He's seeking to put them in a position where he will demonstrate to the world that they are vassals to the United States, which has, of course, been the historical positioning of Europe in the eyes of Washington.
Well, we still have about one minute before we need to let you go.
So the final question according to a recent poll conducted by Politico in six major EU countries, including France and Germany, for example, More Europeans see the US today as a threat than those that view China as a threat.
How would you look at this result?
Well, first thing to do is contrast it with Mark Rutten's comments that the Europeans are all in favor of all of this American policy violence and aggression.
Europeans do not back this kind of behaviour as a rule.
In terms of China, China has been consistent.
It has been a stable economic partner and it's been willing to work with European countries to ensure that there are mutual benefits through trade and investments.
Thank you very much for joining us.
Dr. Warwick Powell, adjunct professor joining us from Queensland University of Technology.
Thank you very much for joining us.
More to come.
Alibaba is cooperating with China Telecom, a state-run company, in launching a data center in China's Guangdong province.
Featuring the tech giants on semiconductors
You are listening to World Today.
To listen to this episode again or to catch up on our previous episodes.
You can download our podcast by searching World Today.
I'm Dinghan in Beijing.
We'll be back after a short break.
You're back with World Today, I'm Ding Hen in Beijing.
Alibaba and China Telecom have jointly launched a new data center in southern China.
The facility is going to deploy 10000 of Alibaba's self-developed chips designed for large-scale AI training and inference.
It will be capable of supporting models with hundreds of billions of parameters and it is expected to expand to a capacity or a scale of 100000 chips.
The company says the computing cluster will serve a wide range of sectors or industries, from healthcare to advanced materials.
Chinese companies are accelerating their efforts to build domestic alternatives amid continued US restrictions on access to advanced AI semiconductors, including those from NVIDIA.
So for more on this, my colleague Lian Qingxuan spoke with Dr Liu Shaoshan, Director of Embodied Intelligence with the Shenzhen Institute for Artificial Intelligence and Robotics for Society.
So Dr. Liu, this cluster has super-fast response and processing power.
So in simple terms, what does that mean for AI training?
And what can we expect from this AI data center?
Well, I think in the whole world, AI training is constrained by compute power.
The cluster provides sufficient compute power for a lot of different trainings for different models.
And what can we expect from this data center?
I think for the Great Bay Area, there's a tremendous need for AI training.
But previously, we were constrained by compute power.
With this, that would solve the constraint problem.
And this cluster supports open source models like DeepSeq and QN.
So what does this compatibility mean for the AI ecosystem?
And could it accelerate the spread and adoption of homegrown models in China?
Oh, definitely.
I think it's not just DeepSeq and QN.
There will be a lot more open source models.
Remember we are not talking about LLM models like DeepSeq and QN, but there will be more embodied models.
That needs training as well.
So I think by supporting this basic infrastructure DeepSeq, QN and more to come I think that we will greatly accelerated adoption of AI training in this area.
And what advantages does the Zhenwu chip offer compared with foreign alternatives?
First, it's compatible with NVIDIA chips, so that we don't have to worry about the API or changing the software layer.
Then it's really adapted to the workload, first within Alibaba, then now across different companies.
So I think it will become more and more competitive in the global market.
But the key to it is actually energy efficiency, because at the very bottom layer what's constrained is electricity or energy.
So if the chip is more efficient in converting energy into computing power, then it will have a huge advantage in the global market.
But we are not there yet.
I think we are catching up compared to US chips.
But give it a few years.
As the chips experience more applications, I think they will, generation after generation, they will become more efficient.
So far, the cluster is already being used in healthcare and manufacturing.
So why do you think these sectors were chosen first?
And what can other industries learn from this?
Well, these two sectors are chosen because they are important.
For healthcare, it's very important for the well-being of the population.
And manufacturing is very important for economy.
I think that's why they are chosen.
Then by doing a proof of concept in these areas, then I think other industry will follow suit very quickly.
Yeah.
And China Telecom has launched a computing supermarket.
And that sounds like a very new concept.
So could you briefly explain what it is and what will it bring to small and medium-sized companies?
Well, I think the name of it is very interesting.
It's called a computing supermarket.
But back in the cloud computing days we already had a computing supermarket.
When different companies try to sell clouds,
I think a better name for it would be deep learning or large language model supermarket, because people are not just buying the computing power.
They're buying the model as well.
They're buying the training power infrastructure as well.
That will...
Make things easier for small medium business because they may not have the expertise to manage a computing infrastructure like that.
They may not have the expertise to manage.
Large language model training like that.
By providing a supermarket, they can just focus on application.
So I think that would bring much better division work and much higher productivity.
And with US restrictions on key AI chips.
Alibaba Cloud and Huawei are both rolling out large domestic chip clusters.
So how do you assess the role of these clusters in China's AI, strategic autonomy and technology security?
Well, I think it's a good move.
And the way I know about it.
I think Alibaba has invested in the champions for a long time.
A tremendous investment.
And the adoption rate is very well, although they did not promote it very much.
But I heard from the industry that the adoption rate is very well, so that in a way, we no longer rely on NVIDIA chips and other imported chips in these areas.
So gradually they will pick up because you have to know there's a huge demand of AI training in China and the imported chips cannot satisfy that demand.
But now we have more domestic chips that would greatly accelerate pervasiveness of AI training.
So the cluster supports models with hundreds of billions of parameters and is planned to expand 100000 cars.
So how does such scaling affect training efficiency, cost and feasibility for domestic enterprises developing large-scale AI models?
The intelligence for models.
They still follow a scaling law, meaning that you need a lot of parameters.
To train a lot of parameters.
You need a lot of compute power.
That will come across say, thousands or tens of thousands of chips, and so the infrastructure is very important.
So we've been talking about chips, so we have chips from Alibaba or Huawei, but the key next step is how do you organize the chips so that they can provide that kind of efficiency, large-scale training for scaling up the models.
And I think that's exactly what this so-called computing supermarket does.
It's efficiently organizing the chip so that they can provide the tremendous computing power needed.
So how does this project fit into China's push for AI chip self-reliance?
Well, when we talk about software license, usually we will focus on the chip itself.
Say, do you have the chip that can match certain model from NVIDIA?
But no, I think it's a more complex challenge because you no longer need the chips.
You need to make sure the chips can integrate into a very good infrastructure.
So this layer is actually the infrastructure layer that can bringing up tens of thousands sometimes in the future maybe millions of chips together to provide a lot of compute power.
So I think this layer is critical.
It actually connects computing power from individual chips to the actual intelligence delivered for large models.
So one takeaway message is that we not only have to develop the ship business.
We also have to develop the infrastructure business.
So it's very important.
I'm very happy to see this step forward to have a computing power or computing supermarket.
And Dr Liu.
Given how fast domestic companies are deploying chips, clusters and large model training, where do you see China's AI competitiveness going over the next five years?
Well, next five years will be a very critical period.
If you look at the AI stack, at the very bottom, it's energy.
In the energy stack we are leading, or the energy layer, we are leading by a lot, because today US is constrained by energy.
The second layer is chips.
As we just discussed, chips, we are catching up.
We're no longer, I mean, not yet at the level of the US chips, but we are catching up.
One level up is the model.
Now we have QN, we have DeepSeq.
So we are doing fine.
It still takes two or three years to catch up, but we are doing fine.
Then on top of it, we have the cloud infrastructure.
That's what we are talking about here exactly.
Then more above it is application.
Again, in application, I think China is leading by a lot.
So if you compare the China stack and the US stack, we are not lagging behind by much.
In some areas we are leading.
So within five years, we will be, if not the global leader, but one of the global leaders for sure.
That was Dr. Liu Shaoshan, Director of Embodied Intelligence with the Shenzhen Institute for Artificial Intelligence and Robotics for Society, speaking with my colleague Lian Qingxuan.
This is World Today.
We'll be back.
You are listening to World Today, I'm Ding Hen in Beijing.
BYD is opening about 20 sales locations in Canada this year as Ottawa explores Chinese auto investments to reduce its reliance on the United States.
The world's largest EV maker, is also considering building a factory in Canada, while continuing to expand in Europe with affordable electric and plug-in hybrid models.
The auto industry is shifting to a sort of software-driven competition.
So, against that very background, Chinese EV makers are nowadays leveraging their over-the-air updates to extend their vehicle life in efforts to unlock new revenue streams and strengthen their global edge.
For more.
My colleague Song Ruixin earlier spoke with Andy Mauck, professor at Beijing Foreign Studies University.
BYD is opening 20 sales locations in Canada this year and actively considering building a local factory.
So Andy, how significant is this move and what does this tell us about the evolving geopolitics of the auto industry?
You know, I think, first of all, this is enormously significant for BYD because you know it went from a company that really was an afterthought in the automotive industry now to becoming a global leader, not just in volume terms but I think also in technological terms as well.
And the North American market is an enormous one and an enormously profitable market.
So I think BYD's move here into Canada is an important foothold.
And obviously there's enormous challenges to selling the United States currently, but it's an important foothold.
And I think it has very, very significant geopolitical ramifications.
So we know that Canada, because it shares such a long border with the United States, really has for most of its history felt very constrained in what it could do on the global stage.
You know that it had to more or less too closely to American expectations.
But what we're seeing here, with Ottawa slashing Chinese EV tariffs from 100 to 61 despite still, I think, the enormous political opposition to Chinese vehicles in the United States really, I think, signals again a very important new phase in geopolitics.
So I think it's exciting for BYD.
Given how well they've done in other markets around the world, I wouldn't be surprised to see them do also well in the Canadian market.
But this has to be said that while Ottawa has cut tariffs significantly, they at present still have a cap on the number of imports.
So there's still some limit to the upside.
But what I expect would happen is, as Canadians get to see drive not just BYD vehicles but other ones from China as well Xiaomi, etc.
That they really will come to love them as much as other people around the world do, and there will be enormous consumer pressure for raising this limit.
Okay, so that raises an important issue, not just where companies expand, but how they compete, especially on technology.
Tesla is frequently compared to Chinese EV makers like BYD in Western media.
This said, Tesla pioneered over-the-air OTA updates, but Chinese automakers are now iterating much faster.
Briefly, what is OTA and why has it become a kind of key battleground in EV competition?
Well, so, you know, there's always this balance between hardware and software.
And, you know, some people will say that hardware is just prematurely crystallized software.
So all I mean by this is, with over the air updates, that basically you don't have to go to a dealership to get the latest version of the operating system for your car and you can do this over the air, right.
So ota is over the air and you know that is, of course, is convenience, but you know it also, i think, allows scale as well.
So if you think about, you know every car you sell has to come to a dealership for an upgrade from the manufacturers or the dealership perspective.
That's not really as scalable.
So I think that's very important.
But then when we look at the clock speed in China and I think you're right that that's a very, very important distinctive feature of the Chinese technology marketplace generally is how fast they iterate and release updates, whether this is AI models, whether this is smartphones, whether it's electric vehicles, as we're talking about here that absolutely, I think, the ability to iterate quickly and deploy at scale, which is not only a commercial decision, but I think also requires, ideally requires coordination with government as well.
I remember we had a discussion last year Andy, about China's approval for level three autonomous driving systems on public roads in Shanghai and Shenzhen.
So, in your view, has China's policy created a measurable lead in software defined vehicles, or is the advantage still marginal at this stage?
We can look at it in different ways.
And you know for me what matters the most.
You know because I just wrote a book called The Innovation Machine, how China creates and adopts innovation through governance.
And you know if we, if we don't look at just individual breakthroughs or advances, or even you know products.
But we think about this from a systemic level.
And I think this is the right way to think about electric vehicles and or autonomous vehicles, because this really will be deployed universally.
And it has enormous risks because again, you know, these vehicles are moving fast, they're heavy, they carry humans everywhere interacting with humans on the road, other humans driving.
That it's really important to get it right.
So I think that you know China's approach, I think has, on the one hand, been visionary but on the other hand, prudent and balancing.
That is, i think, what we see here with l3 vehicles.
And then, just as a reminder for our audience, you know, l3 just means you have the ability, the car has the ability to operate completely independently by itself under certain conditions, But a human, the driver, has to be ready to take over if needed.
And this is on the road to L5, where when we think in science fiction or we see in movies about the future, that it's a car that drives everywhere, does everything entirely on its own,
And that would be called L5.
So we're not there yet at scale.
But I think again, I think where we are with China is that it's certainly making very measured progress in this way.
So we can understand this as policy support is translating into at least some early mover advantage.
If we zoom out from technology and policy to the broader market environment And with oil price surging in 2026.
Several major Chinese automakers have released their March sales results, delivering record high exports.
And some people criticize.
This appears to be more of an external factor than a structural advantage.
So what happens when oil prices normalize?
Do you think China has built a sustainable overseas demand engine?
Well, you know, the way I would look at this is it's a lot like the stock market, right?
So the stock market has cycles.
They have bull markets, they have bear markets, prices go up, prices go down, they go up again.
But the long term direction is up.
So I think with Chinese EVs, again, because of the governance factor here.
Right.
So, you know, when China built this, it was not just about a particular breakthrough with batteries.
It wasn't a particular breakthrough with cars or the distribution channel or something like that.
But it really was a comprehensive, systematic approach.
And because of that, you know, I think, enormous adoption, enormous advances in technology, say with how quickly it takes to charge a battery.
This really is, you know, the next step.
I think then is diffusion globally.
Because in some sense, I think we can think about EVs slash, autonomous vehicles as really a civilizational level technology that really has to be rolled out at scale on a global basis.
And if we look at it that way again, I think there'll be ups and downs in individual countries' markets.
Even the United States.
I would say that certainly now It's in a down phase, meaning that it's not really open for Chinese EVs.
But I think it's inevitable that American consumers, more and more, are seeing from YouTube streamers friends going to China and perhaps soon hearing about their Canadian friends having these great Chinese EVs that they're going to want them as well, especially with such an affordability crisis in the United States right now.
That was Andy Maok, a professor at Beijing Foreign Studies University, talking with my colleague Song Ruixin.
Coming up.
Reports indicate smaller businesses in China are increasingly satisfied with the environment they have.
This is World Today, stay tuned.
You are listening to World Today.
I'm Ding Hen in Beijing.
A new report says the development environment for China's small and medium-sized enterprises continues to improve in 2025.
The report is based on surveys of smaller businesses in 50 cities across the country.
It indicates that there have been narrowed gaps between cities, fewer barriers in market access and a more balanced regional development.
SMEs' overall satisfaction rate with the development environment increased from less than 75 points back in 2020 to more than 84 points in 2025.
The report is compiled by the China Center for Promotion of Small and Medium Enterprises Development, an organization affiliated with China's Ministry of Industry and Information Technology.
So for more, joining us.
Now on the line is Dr Yao Shujie Chang Kong, Professor of Economics with Chongqing University.
Thank you very much for joining us.
You are welcome.
So first of all, is the finding of this particular report in line with your own observations?
To a great extent, yes.
SME is becoming more and more prominent in the Chinese economy in almost different aspects in terms of product production, employment and also the number of entities accounted for the entire nation's total enterprises.
And I'm quite encouraged that the survey indicates that the SME sector over the year, and especially the recent months, have become stronger and stronger.
So that means that the business environment is becoming more conducive for the small and medium-sized enterprises.
And I hope this momentum will continue in the rest of the year and also the future years.
According to this report, over 70 of the SMEs that used some special or sophisticated technologies to produce novel products.
They maintained a stable and growing operating revenue.
In the meantime, over 60 of them plan to carry out innovation and research and development in the coming year.
And over 40% have investment plans.
I mean, new investment plans.
What do you think this tells us?
Well, it is also a very positive and encouraging phenomenon.
Uh enterprises they have to uh highly become very competitive in the domestic markets, so um like requiring more research and technological application into the factory floor to increase the productivity of labor.
It's very important to maintain their survival rate and also to improve the productivity and profitability, given the very competitive environment.
I think this would suggest the nature of the Chinese small and medium-sized enterprises, which tends to produce the very basic industrial product.
And nowadays lots of small enterprises.
They started to produce larger, sophisticated product which is not only aiming for the huge domestic market but also for export.
As we see export, you have to compare with the cutting edge technology at the international market.
So these small and medium-sized enterprises, once their product going global, their quality and their technology have to be compared with the global level.
And of course, lots of technology are available in the markets.
They are innovated by the research into choosing large enterprises.
But when it comes to the factory floor, in terms of the design of the product and also the packaging and other things, it does require a lot of research and innovation activities.
Also, the report shows that some 77 of the surveyed SMEs rely on independent RD as their primary mode of innovation.
Now, Professor.
Our common perception traditionally is that SMEs are the main force for China's job creation.
They are also a main force in terms of contributing to China's government, tax revenue, etc.
Now are they also becoming a sizable force in terms of driving China's ambition to realize scientific or technological self-reliance?
Certainly, the SME sector is becoming a very important driving force in terms of technological progress in the Chinese industry and the service sector.
Especially nowadays we have these kinds of digital technology, automation, and also the creative design.
This requires a lot of original and very small scale R&D activities.
And this activity tends not to be highly profitable or conducive for the large enterprises or the luxurious institutions.
But they are very critical and very important in terms of improving the traditional uh products quality, the small and medium size you know light industry product qualities.
So i i'm very pleased that a significant proportion of the sme depends on on themselves for the, for the innovation.
Of course they can take advantage of the popular general life purpose technology created by the large enterprises and also the research institutions.
But when it comes to small scale production indeed, you do need lots of creativity and activity to become highly productive before some specific industry or specific product.
For example, most recently, we see the model, you know, the so-called Zhang Xie model, which is a very typical example.
It started from a very small scale and nowadays becomes a very cutting edge, you know, at a global level.
Innovation can occur and definitely will occur at the grassroots business level.
I think that's the most inspiring thing that we can gain from this motorcycle entrepreneur, Zhang Xue.
So, lastly and briefly, Professor Yao, what do you think remains to be done to further improve the business environment for China's SMEs?
There are probably a couple of points that we have to pay attention to.
The first is government regulation.
I think government should introduce a negative list of regulation.
Try to give maximum autonomy for the small enterprises.
And secondly is the finance and also tax policy.
Governments should continue to support the financial condition of the small enterprises, not only in terms of credit borrowing, but also in terms of reducing their tax burden and levy burden, and administrative restrictions.
And certainly I think the government should have policy to improve the talents, the human resources to the small enterprises.
I think they have still a shortage of high-skilled and high-talented, you know, personnel.
Thank you very much for joining us.
Dr. Yao Shujie, Chang Kong Professor of Economics, joining us from Chongqing University.
That's all the time for this edition of World Today.
I'm Ding He in Beijing.
Thank you so much for listening.
Bye for now.
