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THIS WEEK:

Electric vehicle sales pass milestone, Huawei challenges Apple’s iPhone 16, new college textbook features Xi Jinping Thought on national security, Congress launches “China week” with key bills, and the wrath of Super Typhoon Yagi.

1. Electric Vehicle Sales Pass Milestone

What Happened: More than one million electric vehicles were sold in China during August, as battery-powered and plug-in hybrid models accounted for nearly 54% of all vehicle sales and demand for internal combustion engine cars continued to fall.

Going Electric: In July, sales of electric vehicles broke through the 50% mark for the first time. These milestones come earlier than expected. As recently as 2020, Beijing announced plans to reach the 50% goal by 2035, and earlier this year, it revised the target for 2030 to 45%.

Leaders Emerge: Domestic companies continue to dominate China’s electric vehicle market. BYD, which stopped producing gasoline-engine cars in 2022, was the top-selling producer, with more than 380,000 vehicles sold. Newcomers and foreign automakers struggled to gain market share amid fierce competition.

Why It Matters: August’s sales numbers are further evidence of how rapidly the market for electric vehicles has matured. Industrial policy and subsidies played a part, but the breakneck growth owes as much, if not more, to huge outlays on research and marketing as well as access to the vast pools of capital that make them possible.

By G.A. Donovan, Fellow for Chinese Society and Political Economy, Center for China Analysis

Learn More: In the newest CCA paper, On the Road of Excess: How Startups Are Driving China’s Electric Vehicle Boom, G.A. analyzes the market forces behind the industry’s rise.

2. Huawei Challenges Apple’s iPhone 16

What Happened: Huawei unveiled its Mate XT trifold smartphone hours after the iPhone 16 reveal, a bold move to capture market attention as Apple loses ground in China. 

Déjà Vu: Huawei has rebounded despite U.S. sanctions that restricted its access to advanced semiconductors. With the Mate XT, Huawei once again flaunts its technological innovation despite ongoing trade restrictions.

A Fragile Resurgence: Huawei’s 41% growth in China’s smartphone market underscores its domestic recovery, but U.S. export controls still throttle its global ambitions. While its pivot to homegrown semiconductors is significant, Huawei lags in producing cutting-edge 3nm and 5nm chips, leaving it behind industry leaders like Taiwan Semiconductor Manufacturing Company. Expansion into electric vehicles imparts broader aspirations, but progress remains confined to China, hampered by technical bottlenecks and artificial intelligence hardware limitations.

Why It Matters: Beijing has invested heavily to reduce dependence on U.S. technology, yet export curbs from the United States and its allies have closed off vital workarounds, limiting Huawei’s chip production capabilities. As these export controls tighten, Huawei faces mounting pressures, indicating that while China has the capability to innovate under pressure, translating that innovation into global competitiveness remains difficult, exposing deeper vulnerabilities in its tech ecosystem. 

By Lizzi C. Lee, Fellow on Chinese Economy, Center for China Analysis

Learn More: Lizzi authored a Diplomat article on China’s ambitions in the global semiconductor race. Read an excerpt here.

3. New College Textbook Features Xi Jinping Thought on National Security

What Happened: According to the Ministry of Education, a new book based on Xi Jinping Thought titled “National Security Education Reader for College Students” will be incorporated into the national security courses of universities. 

Holistic National Security: Since becoming chairman of the Central National Security Commission in 2014, Xi has emphasized that his concept of “holistic national security” should find its way into course curricula. As a result, since 2015, elementary, middle, and high schools nationwide have integrated a “national security education reader” into their courses.

Core Message: The primary message behind “holistic national security” encompasses various dimensions of the country’s development. Its core message underlines the notion that amidst intense global competition, China is closer than ever to achieving the “great rejuvenation of the Chinese nation.” This necessitates heightened vigilance and readiness for potential threats by instilling Xi Jinping Thought on national security in every Chinese citizen, particularly students. 

Why It Matters: While national security education holds significance for all nations, there are concerns that the younger generation in China could be developing a securitized and possibly overly suspicious form of patriotism. They may hold exaggerated beliefs and perceive virtually everything as a potential threat to China.

By Lobsang Tsering, Senior Research Associate, Center for China Analysis

Learn More: Check out the “security wheel” on CCA’s Decoding Chinese Politics interactive website for more on the elites that manage Beijing’s national security.

4. Congress Launches “China Week” with Key Bills

What Happened: This week, the U.S. House of Representatives passed several China-related bills as part of “China Week,” a legislative push to address growing concerns over China’s influence in critical sectors like biotechnology, semiconductors, and drones.

Biotech Response: Chinese biotechnology companies targeted by the Biosecurity Act, one of the key pieces of legislation, have pushed back against the legislation, denying security risk allegations. However, the impact was immediate, with steep drops in their stocks on Chinese exchanges. The Chinese government has also reacted sharply, accusing the United States of politicizing economic competition under the guise of national security.

Deepening Mistrust: While biotechnology companies like WuXi AppTec and BGI Group assert that they do not collect sensitive data, the legislation claims otherwise. This move underscores the deepening mistrust between the two nations as the U.S. seeks to protect its biotechnology sector from what it perceives as undue Chinese influence.

Why It Matters: These legislative efforts reflect Washington’s increasing focus on limiting Chinese access to critical technologies, particularly biotechnology, where Beijing is seen as an emerging competitor. The ripple effects could be vast, potentially disrupting global supply chains and cooperation in biotech research while placing pressure on U.S. companies that rely on Chinese partners for pharmaceutical development and manufacturing.

By Jie Gao, Research Associate, Center for China Analysis

Learn More: CCA Research Associate Patrick Beyrer wrote on China’s biotech sector in Taking Stock of U.S.-China Biotechnology Competition.

5. The Wrath of Super Typhoon Yagi

What Happened: Last Friday, Super Typhoon Yagi struck Hainan and Guangdong provinces with ferocious winds and heavy rainfall.

The Destruction: The township of Wenchang in northeast Hainan experienced the most severe weather, with sustained wind speeds of 145 mph near Yagi’s center. More than 830,000 households and eight water plants were affected by power outages, and 11,000 hectares of crops were completely destroyed, with another 7,000 damaged. Per the South China Morning Post, around 400,000 people in Hainan were evacuated, 95 were injured, and 4 lost their lives.

Regional Rampage: In addition to destruction along China’s southeastern coast, Yagi also devastated the Philippines and Vietnam — both countries experienced widespread infrastructure damage, injury, and loss of life. The typhoon is the strongest storm Asia has experienced this year and the second most powerful tropical storm of 2024 anywhere in the world.

Why It Matters: Super Typhoon Yagi’s transboundary impacts render weather events like tropical cyclones a regional issue, thus potentially opening the door to cooperation on environmental crises between countries in the region. It also reinforces the shared need for countries to enhance adaptive and resilience capacities.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis

Learn More: Taylah explains how “China Will Accelerate Climate Resilience as a Security Priority“ in China 2024: What to Watch.