James King (4:18)

Well, yes, Alice, I mean, you know, really, we're only just a couple of weeks into 2026 and already this year is turning out to be something of an annus horribilis for Chinese foreign policy. Two of China's biggest partners are plunged into, well, different sorts of chaos. At the moment we've been talking about Venezuela after the removal of Nicolas Maduro by US Troops. And now in Iran, we're seeing demonstrations ra across the country and hundreds of demonstrators killed by the regime. Just let me try and put this into perspective from a Chinese perspective. First of all, this is a big blow from an oil import perspective. If we add up Venezuela's contribution to Chinese oil imports and Iran's contribution to the same oil imports, we get close to about 20%. That's 1/5 of China's imported oil needs, which could be disrupted both in the case of Venezuela, which accounts for about 4% of China's oil imports, and in the case of Iran, which accounts for close to 15%. So if there is a deeper chaos in Iran or perhaps even regime change, that could be a major blow for China in terms of its reliance on imported oil. But let me just go a little bit further and stick with Iran for just one second.

Alice Han (5:50)

If you.

James King (5:51)

China is Iran's biggest trade partner and it's also a significant strategic backer of Iran which has basically been isolated by the west for many years. Now China buys about 90% of Iran's oil at a significant discount because Iran's oil is sanctioned by most Western powers and therefore they can't buy it. So Iran needs to sell that oil to somebody. This means effectively that China gives the Iranian regime an economic lifeline. Aside from that, China has said that it's providing about US$25 billion in loans to Iran to build all kinds of infrastructure projects there. And an even bigger project was inked in 2021. That is when Iran and China signed a 25 year agreement for 400 billion. Let me say that figure again. 400 billion in Chinese investment in energy, transport, banking, telecoms and of course the oil sector as well. So what we have now is a situation in which one of China's biggest non Western partners is being plunged deeply into chaos. That's in the case of Iran and in the case of Venezuela. Well, we already know what's happened there. Maduro has been deposed and the US is saying that it wants to run not only Venezuela, but it wants to expunge the Western Hemisphere, which basically means Latin America wants to expunge the influence of non hemispheric powers. That's a kind of US code for China and Russia. So really 2026 could not have got off to a worse start for Chinese foreign policy. What are you seeing? Alice, I know that you're looking at both of these issues very carefully right now.

Alice Han (7:47)

Yeah. I would generally agree with you that it hasn't been a good start for China. But I might take a slightly different tack. If you look at beyond the short term, I think a lot of these regimes sticking power is pretty pronounced. I mean my own take is that even although the Iranian regime is at its weakest in decades, it's hard to see given the strength of the irgc, how there would be a massive regime collapse or regime change overnight. But to your point about going back to Venezuela and Latin America, I think what people don't quite understand or realize about China, Latin America strategy is that it is pretty comprehensive. I mean beyond just the economic element of oil and lending. For instance, Latin American countries buy a lot of Chinese military equipment and dual use technologies. Venezuela is the top obviously purchaser of Chinese military equipment, but also Argentina, Bolivia, Ecuador, they buy a lot of Chinese military aircraft, vehicles, equipment and the PLA does extensive military training with the Cuban military and reportedly a degree of intelligence sharing which obviously rubs Washington up. The wrong way. And this is, I think one of the causes for concern shared by Washington and the Secretary of State, Marco Rubio, who is very much fixated not only on Venezuela, but the Cuba issue. And then beyond that, huge adopters Latin American Countries of Chinese 5G Telecoms and China has been trying to push a lot of these countries to adopt their Beidou navigation satellite system, which is also a pretty significant form of dual use technology. But I came this paper on China's Latin America policy which I think has really floated under the radar. And this happened just on the heels of the US's National Security Strategy report. And I think it was timed later in the year specifically because they wanted to see what was going to come out of Washington in terms of their national security strategy. And just to quote this report, which is the third policy paper on Latin America and the Caribbean and it was released on December 10th, it's part of it talks about the quote, unquote, five programs for building a China, Latin America and Caribbean community with a shared future. Now the shared future terminology, it seems, has come from Xi Jinping, who not only wants to have a level of collaboration economically and diplomatically, but also, it seems increasingly culturally with these Latin American countries. And one key thing that stood out to me was the inclusion for the first time of development assistance. Now this is a degree of foreign aid and foreign assistance at a time where you're seeing more and more US retrenchment. So I think this is going to be quite significant when we think about China's longer term Latin America strategy. I don't think China is going to retreat from Latin America even although it has, I think, suffered a significant setback with the Venezuela crisis. I think that there's a lot of beyond economic strategic interest in Latin America. One other statistic that stood out to me was that China has more space infrastructure in Latin America than anywhere else outside of mainland China. And that's because the satellites need to communicate with the ground stations across Latin America. And again, this has been a cause of concern for Americans because that level of proximity poses a national security risk in terms of information interference and espionage. So I would take a more, I think, sobering view, which is that when dust settles, China is still going to be involved in Latin America. It's going to be hard to get it completely out of the US's backyard, as Washington would like to see. But certainly this crisis will force, I think, Xi Jinping and the leaders to craft an alternative strategy because they can no longer, especially in Latin America, make the anti US Argument, given that the US has shown that it has a lot of military and diplomatic heft in the region. So I think that increasingly they will try to move towards dual use technologies, economic strategies, to try to continue to exert influence in the region. But certainly I agree with you, this is a setback. And on the Iran issue, I think people need to follow this closely because Iran is strategically way more important to China than Venezuela was and is Venezuela in many respects. If you recall the belt and road initiative and debt trap diplomacy, we talked a lot about this. I think back in the day, Venezuela was always cited as an example of where Chinese money had gone to waste. So I think when we think about the axis of ill will, when we think about the importance of Russia, Iran, North Korea and China as strategic partners, the Iran movement that we're seeing right now is going to be really significant for China's geopolitical strategy, not just in the Middle east, but more broadly. And it's interesting that it follows right after the naval exercises that we saw off the coast of South Africa amongst Russia, China and Iran. So we'll see how China fits The puzzle of BRICS, this sort of anti US coalition in 2026 at a time where Trump is being way more assertive.

James King (13:05)

Yes, absolutely, Alice. And just to go back to Latin America, I very much concur with what you're saying. I've just been doing a bit of research on how Chinese involvement with Latin America is, and I really concur with you that it's going to be very hard for the US to counter China in any kind of comprehensive way. I came across some interesting research from an academic called Francisco Udines, who's an assistant professor at the Pontifical Catholic University in Chile. And he has calculated that China has already economically displaced the US in 10 out of 1212 countries in South America. So South America is obviously the southern part of Latin America. It includes countries like Argentina, Brazil, Chile, Colombia, et cetera. What he means is that China is the primary trading partner of these countries, that it's invested heavily in infrastructure such as ports, roads, railways and power plants, and it's securing access to crucial resources in South America as well, such as lithium and copper. So I think you're absolutely right, Alice. I think although it's easy to be captured and caught up with this idea of this unbelievable, overwhelming lightning strike that the American military launched on Maduro to take him out of Venezuela and be swept away by a sense of US dominance. But underneath the hood, as it were, China's tentacles are so deeply embedded into the economies of Latin Americ, South America. And it's just not gonna be that easy for America to take its hemisphere back. You know, it's just not gonna be that easy. It will be, in my view, a long run battle, some forward steps by China, some backward steps by the US and vice versa for several years to come.

Alice Han (15:08)

But I certainly think, James, and I wonder what you think about this. This is the weakest I've seen the axis of ill will countries. When I think about where Russia is depleting its resources and manpower in the conflict with Ukraine, Iran facing these massive protests on the brink, it seems of a collapse potentially. And obviously we haven't even mentioned North Korea. But that's always been a basket case and I wouldn't be surprised if that rears its head again in 2026 if Trump decides to make this an issue again. If you recall, in the first Trump administration, he was very keen to try to negotiate anti nuclear proliferation and getting North Korea to walk back on its weapons system. But at the end of the day, I don't think anything really came out of that. And I think North Korea has again advanced further in its nuclear development.

James King (15:58)

Yeah, absolutely. I think there must be policy thinkers, policymakers in Beijing, particularly in the foreign policy area, that are wondering whether their strategy for the last decade or more, in fact more than two decades of undermining US Power in the world by allying themselves with effectively rivals of the US Such as Iran and Venezuela and some of the other ones that you've mentioned. I think that there must be policymakers that are wondering about the wisdom of that policy now that we see what's happening in Venezuela, Iran and potentially in some of the other countries too. This really is a big setback for Chinese foreign policy goals.

Alice Han (16:44)

And I think the key question that everyone should look into is whether or not we see the top leadership double down on its partnerships and commitments to these access available countries or if it decides that it needs to take a different tack. Because certainly in previous trips to China, I met more liberal voices who were more sympathetic to the view that China actually should be investing in improving its relationships with the G7 countries, notably Europe, where there's still a lot of trade and strategic tensions. So it'll be interesting, I think, to see after the NPC in the beginning of March if there is going to be a bit of a soul searching and a change in the national security and foreign policy bet. Okay. We'll be back with more after a quick break. Stay with us.

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For most of the history of television, if you missed a show, you just missed it. It was over, it was gone. But then this little company called TiVo came along and gave people superpowers. You could pause live television, you could rewind it, you could save it and watch it later. It was incredible. And the people who had it could not stop talking about it. This week on Version History, a new chat show about old technology. We talk about the history of TiVo and how it is that a company whose products actually no one ever really had or used became one of the most iconic stories in tech. All that on version history wherever you get podcasts.

Alice Han (20:27)

Welcome back. There's no question that the U.S. abduction of Venezuela's President Nicolas Maduro was a major setback for China. For all of Venezuela's dysfunction, it was a crucial geopolitical asset for China in Latin America. At the center of all of this is oil in the narrow sense. That's because China's massive lending program to Venezuela was being repaid largely in crude. But more broadly, oil will determine whether the US And China can coexist or collide over Venezuela in the years ahead. Joining us is Michal Maiden, director of the China Energy Program at the Oxford Institute for Energy Studies and one of the world's leading experts on China's energy strategy.

James King (21:12)

Mikal, thanks so much for joining us. We're really lucky to have you on I know this is a fast moving picture and I know you've been following it very closely. Could you set us up by just telling us what the situation is? The US has said that it will control sales of Venezuelan oil indefinitely. How big a blow is this to China given that all of China's strategic interests in Venezuela and how much of a problem is it in terms of China's need for Venezuelan oil?

Michal Maiden (21:48)

Thanks, James, and thanks Alice. I love listening to your podcast, so I'm really pleased to be joining you today. You're right, it is a fast moving picture and hopefully by the time this is published we haven't been sort of overcome by events, but I think the fundamentals are still the same. Right? In terms of oil flows, it's insignificant. I mean, this is a geopolitically massive event. If you look at the oil market and price movements, it has had very, very little impact. Anecdotally, if you look at official customs data, China doesn't import any Venezuelan oil. But if you look at tanker tracking and other data, it's around 4% of China's total imports and quite easily substitutable. Financially, it's a slightly different story because as you alluded to, the oil is a repayment for some of the debt or a lot of the debt that China has given Venezuela over the years. The other element here is that roughly two thirds of that oil is bought by independent refiners. These are sometimes called the Shandong teapots. They thrive on sanctioned and discounted oil, so it helps their margins. It supports the local economy in Shandong, where they are overwhelmingly located. They also like the fact that a lot of the debt is now repaid and a lot of the trade happens in renminbi. So that's an advantage for them. But none of the. This is sort of dramatic or devastating if the flows stop in terms of kind of that operational running of the Chinese economy, the repayment of the loans that were given by the China Development bank to the government in Pisa, the Venezuelan national oil company, that's a problem if those flows stop because debt repayment has stopped. And finally, where it gets really problematic is the sort of myriad of Chinese contracts in Venezuela that's in the oil sector, in the upstream, but it's also in telecoms, in mining, in sort of ports and infrastructure. If those get canceled, that's a financial loss. Not the first time the Chinese companies or banks will have to restructure debt or lose some of their assets. But geopolitically, as you mentioned, it's quite a big deal.

Alice Han (23:56)

Well, I wanted to broaden it out a little bit and speak a little bit about the Russia relationship. We've got the US seizing one of the Russian tankers. Now there is talk about a bill being voted on that could put sanctions on Russian crude and that could affect not just China, but India. Is there a risk that beyond Venezuela, this affects China's imports of oil elsewhere, where the ratio is potentially much higher than it is in Venezuela, it is a massive risk.

Michal Maiden (24:24)

And the Chinese are also looking at Iran as a potential next destination for US Actions that already stabilize. Starts to add up to sort of already close to one third of China's imports. I think one thing is that oil markets have found a way around sanctions. There's a very sophisticated sanctions evasion mechanism that works. It's what's called the dark fleet of all those tankers that sail around and move crude from one place to the other. Very sophisticated financing system and middlemen. So oil tends to find a way around sanctions. It makes it harder, it makes it more costly, but it's possible. I think the other thing to note is that China has been hedging quite actively against sort of oil insecurity for many, many decades. As part of that, it's got a very big stockpiling program. It now has maybe 120 days of forward cover, sort of meaning that if supplies were disrupted, it could draw down on stocks. Not something that it necessarily wants to do, but it helps to manage some of the price volatility. And longer term, China's electrifying very rapidly transport and that reduces its need for oil over the long term, doesn't help the short term sanctions. But all of these things are sort of surmountable from a logistical perspective. Again, geopolitically and rhetorically, they're much more complicated and they set up for a much bigger sort of US China tussle.

James King (25:48)

And just thinking a little bit more about the geopolitical background to this, both President Trump and Marco Rubio, the Secretary of State, have been clear that Latin America should be regarded as the United States hemisphere. Could you just talk a little bit about this and the implications of it? Do you think it's possible that the US could make a grab for other Chinese interests or assets in the region? One of the things I'm thinking of in particular is President Trump's previous remarks that the US should take back the Panama Canal. I mean, China doesn't own the Panama Canal, but there are two ports at both ends of the canal, Cristobal and Balboa, which are operated by a Hong Kong based conglomerate, CK Hutchinson. So China does have some interest in the canal. But I mean, more broadly, do you think that we're going to see further US Grabs for Chinese interests and assets in the region?

Michal Maiden (26:55)

I think, right. 2026 has only just begun. But if there's anything that we've seen is that nothing is impossible right now or this year, I think we have to be a bit careful. We don't know what the US has grabbed just yet. Right. We don't know what it means that the US Controls the oil. We don't know who's going to market it, who's going to sell it, if they're selling it, at what price, critically, for China and sort of for your question, we don't know what's happening with Chinese contracts in Venezuela now. If they get canceled and they get revoked, that's a pretty big deal. And by extension, if those assets in the rest of Latin America would come under attack, that would be a huge problem. And you know, right. If we believe the US national security strategy, then yes, the US does want to reduce China's influence in the region. That's a problem, I think, as much for China as it is for other Latin American countries. So the Panama Canal is a question of operatorship. If we think about Brazil, you know, China is the biggest trading partner for many countries, including Brazil, where it's not just a trading partner that buys oil, soybeans, iron ore, but it's also a massive investor in EVs and other industries. It's sort of underpinning some of the energy and electricity infrastructure in these countries, I think that becomes much more problematic, certainly for China, but also for a lot of Latin American countries and more broadly for China. U.S. relations. Right. So if the U.S. does cancel oil or a pro U.S. administration in Venezuela cancels these massive contracts, that's a huge loss of face for Beijing. I mean, does Xi Jinping still roll out the red carpet for Trump in April? How does that work with the very hard won stabilization so far of US China relations?

Alice Han (28:43)

Well, I want to actually piggyback on this discussion. I completely agree with you, Michal. I think that beyond the oil issue, which I think is what the US Is fixated on for China, it would be deeply concern about the financial implications both in terms of lending and investment. And when I think about China's strategic investments in the region, a lot of it is around commodities. I think about a country like chile where there's JVs and deals over minerals like lithium and copper. And maybe China is sitting in Beijing worried about the prospects of its contracts and its deals in those countries. Is there a risk now after this National Security Strategy document as well as this pivot that we're seeing at the very start of this year from the Trump administration, a more muscular, aggressive pivot, Is there a risk that a lot of those business deals, contracts, investments are at jeopardy beyond Venezuela?

Michal Maiden (29:37)

I think there is. I mean, if you, you probably do speak to Chinese counterparts and look, they're hugely anxious about the future of their investments. I think it was also reported that the policy banks were asked to assess their exposure. And we've seen this before, right after IR and after Libya that everybody was busying trying to figure out, you know, where their exposure is and review their risk assessment practices. I think it is a big risk. And I think for the Chinese stakeholders, there's a question of how do you double down on some of these assets? Because these are big, critical, important markets that have a geopolitical significance. But how do you hedge against the bigger vulnerabilities? I don't think they're going to divest or, you know, withdraw their assets. Assets, these are big and important contracts, but equally they'll want to try and secure them. Now, does that mean diversifying the equity, having local partners, maybe having some Russian partners, making them look slightly less Chinese, maybe less debt, more cash, more rmb? I know that there's a lot of concern about, I guess it's sort of the trading architecture, sort of what happens to currencies of trade, what happens to the technologies of trade. I think That's a really big focus. Focus. But if we think back to Iraq, and I know it's different, this is the US's backyard and hemispheres and we're in Trump world and it's different. But in 2003, after the US led invasion of Iraq, the Chinese again were extremely worried about their assets and about the upstream contracts. Today they're the biggest investors in the Iraqi upstream because they have, you know, risk tolerance and greater appetite for risk maybe than many Western countries. They've got patience, they're willing to work with different regimes. And I think ultimately that is likely to still play out, notwithstanding the fact that everybody's very anxious right now.

Alice Han (31:30)

You know, when I think about China's strategic reserves and stockpiling, we've seen record oil barrels stockpiling. Is it fair to say that in this environment where there's so much uncertainty in Venezuela, in Russia, in Iran, and China is a huge consumer of a lot of these fossil fuels, that we would see more stockpiling in 2026? What is the right reaction function that we'll see out of Beijing in response to a lot of this geopolitical uncertainty centered around commodities and energy?

Michal Maiden (32:03)

I think that's a very reasonable expectation that they'll continue stockpiling oil. And also the prices are relatively low. Historically they have no shortage, sort of physical tank space is abundant. So I think they will keep stockpiling. We've sort of seen already initial indications for the 15, 5 year plan about these sort of energy security and commodity security. So focus on the domestic upstream where they can, where they can do oil, gas, coal mining. Overseas assets have become a bit more complicated. But there was a move to do more mining deals and upstream ventures globally. I think that part of it will be revised with caution. Not to say that they will rethink it, but just how they do it in a more secure area and maybe there will be a change of focus in terms of geography. So more stockpiling, more upstream investments and I think fundamentally continue the electrification push and continue that move away from fossil fuels, unfortunately also towards coal. Right, Because China has a lot of coal, so it's going to be between renewables and coal as a way of ensuring that the electricity needs of China's massive industry are met.

Alice Han (33:16)

And one very, very quick follow up question about the cny. There's been a lot of discussion about petro Yuan, that more trade will be denominated in cny. What's your feeling and assessment of the future of CNY being used in a lot of this trade, invoicing and settlement for petrol and energy commodities.

Michal Maiden (33:38)

I mean, you'll have a much better view of this than I do. But there's definitely a push to move away from the dollar, especially by sanctioned countries, right. That have to resort to trade in rmb. So it's just as much about the move away from the dollar about de dollarization as it is the kind of petro yuan. There's still lots of issues with the yuan not being convertible and many countries are not sort of very gladly moving to trading in yuan if they don't have to Think of Saudi Arabia, think of some of the big oil producers, Iraq. Their economies are still pegged at the dollar and so they don' necessarily move to the yuan. But it's a hedge and it's a hedge that is increasingly useful, especially for countries that are coming under pressure from the US and need to sort of de risk against sanctions. So it's an alternative, but I don't think it's going to dethrone the dollar anytime soon.

Alice Han (34:32)

Great.

James King (34:33)

Thanks so much Mikal. That's terrific. Fascinating and very fast moving situation. We'll be following it for sure.

Alice Han (34:39)

Thanks so much.

Michal Maiden (34:40)

Thank you, you both very much.

Alice Han (34:42)

Okay, let's take one last quick break. Stay with us.

Claire Miller (34:50)

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Alice Han (35:34)

Welcome back. What if the fastest way to lose weight meant giving up your phone, your freedom, and even the choice of when to eat? As obesity surges across China, thousands of adults are voluntarily checking into so called fat prisons. Military style boot camps that promise rapid weight loss through rigid diets, non stop exercise and constant surveillance. With more than half of Chinese adults now overweight and healthcare costs soaring, Beijing is treating obesity like a systemic crisis that requires discipline, targets and institutional control, not just personal willpower. At the same Time. China is racing ahead on another front, flooding the market with GLP1 weight loss drugs not just for humans, but now also for pets. Turning obesity into both a governance challenge and a massive commercial opportunity. From fenced in boot camps to injectable drugs for cats, China's approach raises a bigger question. When weight becomes a national problem, how far should the state, state and the market go to fix it? James, I sent you a video on this. Did you watch it? The fat prison?

James King (36:46)

I did, I did. I mean, it's. I'd never heard of this before. I was really quite amazed. It's the story of this Australian woman, 28 years old, Chinese, Australian. Apparently her mother recommended that she went to one of these fat prisons in China, in Guangzhou, a city in southern China. I think her real name is TL Huang and she was in one of these fat prisons in December last year. And I have to say I didn't quite know how to react to it. I mean, I can see that people really wanna take drastic steps to lose weight, but it did look sort of brutal. And there were moments when she's talking to the video camera, when she looks like she's about to cry and she's really having a hard time. As you mentioned, Alice, you book yourself into these facilities, they're called fat prisons in the vernacular. The real name for them is weight loss training camps. And apparently there are more than a thousand of these all over China at the moment. And although you book yourself involuntarily, they do lock the gates. They've got strict rules, there's constant supervision, and you're not allowed to leave freely unless you have a good excuse. So Thiel Huang was there, I think for 28 days, I believe. And she had a pretty intensive schedule. 7:30am Wake up calls, weigh ins, and then she had hours of spinning, boxing and hit sessions. And after she'd been in the weight loss camp for about 14 days, she'd lost about four kilos in total. That's about nine pounds. And she paid $1,500 for the privilege of undergoing all of this. What did you think of it, Alice? I mean, were you moved by her plight?

Alice Han (38:43)

I mean, in a way it doesn't surprise me. It seems like a very Chinese response to an issue which is to go all out and to the extreme and to enforce it through this rigid structure. And it honestly wasn't a surprise because over the last two years I've been seeing a lot of on social media, these reels of people working out in China. But the reason I Wanted to share this with you was because I have been hearing and actually I've been seeing and I don't know if you've seen this, James, in the last, I would say two years I've noticed a lot more overweight people in China. And growing up, when I would go every year, year, you know, growing up in Australia, you saw more overweight people. It's, it's also a very overweight country. But every time I went back to China, everyone would be very skinny. And in the last two years I've noticed a marked change and you know, we can get into the medicine of it, but obviously part of this is economic, part of this is also societal and cultural. They're living more sedentary lives, but they're having better access to food. But in China there is a strong prevalence of diabetes as well as increasingly obesity. The figures from the Health Commission, the National Health Commission are startling. So it's predicted that by 2030, 65% of Chinese adults could be overweight or obese. As previously mentioned, more than half of all Chinese adults are now overweight. The number of obese children in China quadrupled since 2000. And China has the world's, I mean, makes sense given the size of population, but the world's largest overweight population in the world world. But in April, Beijing launched actually a nationwide weight management campaign to address what it called a major public health threat. So this has taken, I think a political element now and I wouldn't be surprised if it comes up as part of the five year plan because this has massive implications as well for the economy. I mean, you think about the increasing healthcare costs that it will create for the nation. But it also, I think is so different from how people think of China. China, the other element of this is the commercial element. So there's a lot of talk about GLP1 being in pill form this year, how that will drastically reduce prices for the access to these weight loss drugs. China currently has GLP1 drugs that sell for about $385 to $685. I think that's about half of what it costs in the US but obviously if China has this flood of new drugs, new drugs entering the market which are currently under trial, this could massively push down prices in China and potentially even globally. And there are a couple that I thought looked interesting. There's Mazdatide and that's created by Innovent Biologics in Suzhou. There's another injectable BI weekly injectable GLP1 by UBT251. There's a Hong Kong pharmaceutical company that's doing once daily oral drug called ASC 13. And apparently there are over 60 GLP1 drug candidates that are going late stage clinical trials in China and they could, I think, directly compete with Eli Lilly, for instance, and Novo Nordisk. But one last point that I thought was really interesting. Novo Nordisk actually won a legal case with the Supreme Court in China to uphold its patent of semiglutide, which is used in its GLP1 drug and that's used for diabetes and weight loss. So potentially that gives it a bit of a moat in China and elsewhere. But it seems like these new variations coming out of China that use different protein structures. So that could be really interesting. And I don't think people are tracking this closely, but as we know, James, and having studied China for a bit, is that as soon as China gets into the market, just think about the number of different entrants there'll be and the prices that they'll push to.

James King (42:40)

Yeah, absolutely. I've got a prediction on that coming up for a bit later, Alice, but you're so right to focus on these Chinese variants of Ozempic, the slimming drugs. I found a projection that by 2030, the Chinese market for these GLP1s or these anti obesity drugs could reach about US$14 billion in sales annually. So. So we're talking, as you just said, a massive commercial market there that's just getting underway. There is also one angle to this which might surprise listeners and that is that not only humans in China, but also pets are perhaps going to be receiving these slimming drugs. Indeed, a unit of Huadong Medicine received acceptance notices from Chinese regulators for veterinary drug registration applications that target weight management. And these are apparently gonna be given to cats. And there's a rather touching story in the South China Morning Post about Irina Jo and her five year old cat. And apparently this cat gains about one kilogram every year or has done for the last three years, and she wants to get her cat onto a veterinary version of a Chinese Ozempic drug. So it's not just people, it's also cats that are getting out of shape in China and maybe are gonna be given these drugs as well.

Alice Han (44:18)

I mean, if you had told me, James, 10 years ago that this is where China was heading, I would not have believed you that. No, we've come to a point where people are giving not only having cats, but they're giving their cats weight loss drugs. This is absolutely insane. But I wonder what your experience was like, like in China, James. Because what I've noticed in the last, call it five years is that instead of eating at home and cooking at home, people are eating out a lot. Waimai is so cheap, they call it waime, which is, you know, takeout is so cheap and so readily available and good that people do it all the time. And this is so different from a culture that used to, I think, focus heavily on home cooked meals.

James King (44:59)

Yeah, I mean the cultural shift is just huge. When I was in China, I was in a company, there were a bit more than a couple hundred people there sitting in those, you know, big cubicle offices. And I would say 90%, maybe 95% of the people there never went out for lunch. They just got the, you know, the order of whatever it may be, or they brought it with them in a tupperware box and they would eat sitting at their desks. And so it meant that with long hours in the office, maybe you're having two meals sitting at your desk, you don't get any exercise. As we all know, that's not a healthy way to live. And it's very easy to pack on the weight if you've got cortisol as well from the stress. And many Chinese companies work in a very stressful environment. So I mean, you've just sketched out some of the really stark statistics when it comes to people being overweight in China. And I think it is linked to this kind of corporate culture, this sort of hard driving. Start very early in the morning, finish very late at night, night, have your meal sitting in front of your cubicle. You know, I think it is linked to that. So maybe the solution to all of this, aside from Chinese ozempic style drugs, is for people to, to go back to what they used to do when I first went to China in the 80s and 90s, you know, go outside, do communal exercises, you know, star jumps or jumping up, down on the spot or even marching in unison or something like that. Something to get the blood moving in the body. I don't know what you think think.

Alice Han (46:33)

And I think a good model for this is Hong Kong. Because Hong Kong has a strong culture that is pro aging. You regularly see some of the oldest people in the world living in Hong Kong and generally very fit because people are walking a lot, they're eating home cooked food a lot and they're eating vegetables, seafood, a huge mix. So I hope that there's going to be a change in the culture, but I'm not so sure, given how the economics don't quite add up. You know, people find it way more convenient and cheaper to buy takeout rather than cooking at home. But we'll see. I think the key will be how much Beijing intervenes in this because it clearly, I think, has raised alarm bells for the Chinese government and they see it as a political, economic and social issue. All right, James, it is a crystal ball. Prediction time. What's your prediction for the week?

James King (47:29)

Okay, well, Alice, just as you were mentioning, the Chinese approvals of GLP1, or we could call them Chinese zempic variant drugs, have already started. And I think there were five of these drugs that were approved last year. As you mentioned, there are a huge number undergoing development and trial in China at the moment. So my prediction is that by the end of this year, there will be at least 10 of these GLP1 drugs available in the Chinese market. Some of them will be made by Chinese companies. In fact, I would say the majority will be made by Chinese companies and some of them will be made by joint ventures between Chinese companies and foreign companies and some by foreign companies as well. And my guess is that this will cause a big price war. And as you have already mentioned, this will mean that Chinese GLP1 drugs are undercut their foreign counterparts and competitors by big margins. And then we're going to see an outflow of these drugs all over the world.

Alice Han (48:38)

I mean, imagine being able to buy it for as little as 10, $20 over the counter. And that could very much happen if China really gets involved commercially. Very, very interesting. So my prediction is somewhat in the same field, but it's in the field of fitness. Fitness. I sense the early days of a fitness boom in China. I'm already starting to see more people going to the gym. This was kind of a non event in China in previous years, but I think there's a fitness boom with economic opportunities for gyms, for fitness classes, for sportswear and sports equipment. I could see China getting to the sports equipment market and making good equipment that could be cheaper than some of the other farmers, foreign companies out there. And similarly, I think when I think about sportswear, tennis shoes, running shoes, I think these are sectors that could do very, very well in China in 2026, especially if we see a big focus from the government on cracking down on this national health issue. All right, that's all for this episode. Thank you for listening to China Decode. This is a production of Prof. Gmail. Our producers are David Toledo, Eric Janikis and Ness Smith Savadoff. Our research associate is Dan Shalan. Our engineer is William Flynn, our social producer is Jesse Millwood, our technical director is Drew Burrows, and our executive producer is Katherine Dillon. Make sure to follow us wherever you get your podcasts so you don't miss an episode. Talk to you again next week. Sat.