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 MadiRo to uh to take him out

of Venezuela um 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 America, South

America, and it's just not going to be

that easy for America to take its

hemisphere back.

>> Welcome to China Decode. I'm Alice Han

>> and I'm James King. In today's episode

of China Decode, we're discussing how

China is confronting the protests in

Iran on the heels of Trump's

intervention in Venezuela. Plus, we'll

chat with Dr. Mikail Maiden about what

Venezuela's oil loss means for China.

And then, we'll take a look inside

China's so-called fat prisons. Now,

that's all coming up, but first, let's

do a very quick check-in with how the

Chinese markets are starting the week.

On Monday, the Shanghai Asshare index

closed up over 1% as trading volume on

the exchange hit an all-time daily high.

The Hangshare index ended the day up

1.4% led by strong gains in the tech

sector. Alibaba Health, the healthcare

arm of Alibaba, closed up 10% after

announcing a new pharmaceutical

partnership. and tech giants with food

delivery applications such as Alibaba,

JD.com, and Btoan all surged on news

that the Chinese State Council's anti-

monopoly committee would be

investigating the delivery sector to

curb the ongoing price war. All right,

let's get right into it. For years,

Beijing quietly built economic dominance

across Latin America with Venezuela as a

lynch pin for oil loans and influence.

Now Trump has upended that balance,

capturing Nicholas Maduro, asserting

control over Venezuelan oil and reviving

a hardline Monroe Doctrine he calls now

the Donro doctrine. Meanwhile, Trump's

threats against Iran have drawn

Beijing's eye. China says it opposes

foreign interference and calls for peace

and stability in the Middle East,

underscoring that coercion abroad risks

friction with China on multiple fronts.

In short, Trump is betting on force in

Latin America and the Middle East, but

China's economic and diplomatic

footprint, and its willingness to

cooperate where it suits makes this a

much more complicated game. James, I'm

going to throw this straight to you.

We've got an a crisis now in Iran, too,

with massive protests and hundreds seems

dead. Uh, this is coming on the heels of

a Venezuela crisis. Um, what's your take

on this?

>> Well, yes, Alice. I mean, you know,

really, we're only just a couple of

weeks or a little bit more into 2026,

and already this year is turning out to

be something of an annos herbalis for

Chinese foreign policy. Two of China's

biggest partners are plunged into uh

well, different sorts of chaos. At the

moment, we've been talking about

Venezuela after the removal of uh

Nicholas Maduro by US troops. And now in

Iran, we're seeing demonstrations raging

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. Uh 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 15th of China's imported oil

needs which could be disrupted. um 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 uh a deeper chaos in Iran

or perhaps even regime change that could

be a major blow uh 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. 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. Uh

aside from that, China has uh said that

it's um providing about 25 billion US

dollars 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 nonwestern partners is being

plunged deeply into chaos. And 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 uh Latin America. Uh

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.

>> Yeah, I would generally agree with you

that it hasn't been a good start for

China, but I I might take a slightly

different tack. Uh if you look at beyond

the short term, I think a lot of these

regime sticking power is pretty

pronounced. I mean, my own take is that

uh even although the Iranian regime is

at its weakest in decades, it's hard to

see um 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 you know,

I think what people don't quite

understand or realize about China's

Latin America strategy is that it is

pretty comprehensive. I mean it beyond

just the economic element of oil and and

and lending for instance Latin American

countries buy a lot of Chinese military

equipment and Julio use technologies.

Venezuela is the top obviously purchaser

of Chinese military equipment. uh but

also Argentina, Bolivia, Ecuador. They

buy a lot of Chinese military aircraft,

vehicles, equipment. And the PLA does

extensive uh 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 uh for

concern you know shared by uh Washington

and the secretary of state um Marco

Rubio who is very much fixated uh not

only on Venezuela but the Cuba issue. Uh

and then beyond that uh huge adopters

Latin American countries of of Chinese

5G telecoms uh and China has been trying

to push a lot of these countries to

adopt that uh be um navigation satellite

system which is also pretty significant

form of dual use technology. But uh I

came across this paper on China's Latin

America policy which I think is really

floated under the radar and this

happened just on the heels of uh the

US's national security strategy uh

report and I think it was timed uh later

in the year specifically because they

wanted to see what was going to come out

of Washington in terms of their national

security uh strategy. And in just to

quote this report which is the third

policy paper on Latin America and the

Caribbean and it was released on

December 10, 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 uh 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 of foreign aid and foreign

assistance uh 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

you know longerterm Latin America

strategy. I don't think China is going

to uh retreat from Latin America even

although it it has I think suffered a

significant setback with the Venezuela

crisis. I think that there's a lot of uh

strategic 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 uh than anywhere else

outside of mainland China. And that's

because uh the satellites need to

communicate with the ground stations

across Latin America. Uh and again this

has been a cause of concern for for

Americans because that level of

proximity um poses a national security

risk in terms of uh information

interference and espionage. So I I would

take a you know a more I think sobering

view which is that I think when the dust

settles China is still going to be

involved in Latin America. it's going to

be hard to get it completely out of uh

the US's backyard as uh Washington would

like to see. Uh but certainly um 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 um 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 um uh strategies to try to

continue to exert influence in in the

region. But certainly I agree with you

this is a setback. And on the Iran

issue, uh I think people need to follow

this closely because Iran is

strategically way more important to uh

China than Venezuela was and is. Um,

Venezuela in many respects, if you

recall the Belt and Road initiative and

debt trap diplomacy, Venezuela was

always cited as an example of where

Chinese money had was gone to waste. Uh,

so I think um when we think about the

access of ill, when we think about the

importance of Russia, Iran, North Korea,

and China as strategic partners, the the

Iran movement that we're seeing right

now is going to be really significant

for China's uh geopolitical strategy.

not just in the Middle East but more

broadly and and it's interesting that it

follows right after the naval exercises

that we saw off the coast of South

Africa uh amongst Russia, China and

Iran. So we'll see how China fits the

puzzle of bricks this sort of anti-US

coalition in 2026 at a time where where

Trump is being way more assertive.

>> Yes, absolutely Alice. And uh just to go

back to Latin America, I I very much

concur with what you're saying. I've

just been doing a bit of research on how

deep uh 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 Udinez who's an

assistant professor at the Pontipical

Catholic University in Chile. He has

calculated that China has already

economically displaced the US in 10 out

of 12 countries in South America. So

South America is obviously you know the

the southern part of of Latin America.

It includes countries like Argentina,

Brazil, Chile, Colombia etc. 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 MadiRo to uh to take him out

of Venezuela um 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 America, South

America, and it's just not going to be

that easy for America to take its

hemisphere back. Um, you know, it's just

not going to be that easy. It will be,

in my view, a longun uh battle. um some

forward steps by China, some backward

steps by the US and vice versa for

several years to come.

>> But I certainly think James and I wonder

what you think about this. This is the

weakest I've seen the access of ill

countries. When I think about where

Russia is, you know, depleting its

resources and manpower in the conflict

with Ukraine, Iran facing these massive

protests

uh and on the brink it seems of a

collapse potentially. And obviously we

haven't even mentioned uh North Korea,

but that's always been a basket case.

And I wouldn't be surprised if that um

rears its head again in 2026 if Trump uh

decides to make this an issue again. If

you recall in the first Trump

administration, uh he was very keen to

try to uh negotiate anti-uclear

proliferation and and getting North

Korea to walk back on its uh weapons uh

system. At the end of the day, I don't

think anything really came out of that.

and and I think North Korea has again

advanced further in its nuclear uh

development.

>> Yeah, absolutely. I I think there must

be policy thinkers, policy makers in

Beijing, particularly in the foreign

policy area that are wondering whether

their strategy for the last decade or or

or or more, in fact more than two

decades of undermining US power in the

world by allying themselves with um

effectively rivals of the US such as

Iran um and Venezuela and some of the

other ones that that you've mentioned. I

I think that there must be policy makers

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. And I think the the key question

uh 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. Um 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 and notably Europe where

there's a still a lot of trade and

strategic uh 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 soularching

and a change in the national security

and and foreign policy bent. Okay, we'll

be back with more after a quick break.

Stay with us.

Welcome back. There's no question that

the US abduction of Venezuela's

President Nicholas 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 Mikail

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.

>> Mikall, 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 uh

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 uh you know all of China's

strategic interests in Venezuela? Um and

how much of a problem is it in terms of

China's need for Venezuelan oil?

>> Thanks James and thanks Alice. I I love

listening to your podcast so I'm really

pleased to be joining you today. Um

you're right. It is a fast-moving

picture and hopefully by the time you

know this is published we haven't been

um 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, um 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 2/3

of that oil is bought by independent

refiners. These are sometimes called the

Shandong teapotss. 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

in ReMB. So that's an advantage for

them. But none of this is sort of

dramatic or 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 and Pedvesa um the 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 cancelled,

that's a financial loss. not the first

time the Chinese companies or banks will

have to restructure debt or lose uh some

of their assets but geopolitically as

you mentioned it's quite a big uh it's

quite a big deal I wanted to broaden out

a little bit and and speak a little bit

about the Russia relationship we've got

the US seizing one of the Russian

tankers now there is uh talk about a

bill uh 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

affect ffects China's imports of oil

elsewhere where the where the ratio is

potentially much higher than uh it is in

Venezuela.

>> It is a massive risk and and the Chinese

are also looking at Iran as a potential

next destination for US actions. That

already starts to add up to sort of

already close to onethird of China's

imports. Um I think one thing is that

oil markets have found a way around

sanctions. There's a very sophisticated

sanctions evasion mechanism that that

works. It's what's called the dark

fleet, right, of all those tankers that

sail around and uh and move crude from

one place to the other. A very

sophisticated financing system and

middlemen. So oil tends to find a way

around sanctions. It 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

um program. It now has maybe 120 120

days of forward cover sort of meaning

that if supplies were disrupted, it

could it could draw down on stocks. Not

something that it necessarily wants to

do, but it hap it sort of this helps to

manage some of the price volatility. And

longer term, China's electrifying very

rapidly transport and that, you know,

reduces its need for oil over the long

term. Doesn't help the short-term

sanctions. Um, but all of these things

are sort of surmountable from a

logistical perspective. Again,

geopolitically and rhetorically, they're

much more complicated and and they set

up for a much bigger sort of US China

tussle. And just thinking a little bit

more about the uh geopolitical

background to this. Um both President

Trump and Marco Rubio, the Secretary of

State has 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? Uh, 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. Um, I

mean, China doesn't own the Panama

Canal, but there are two ports at at

both ends of the of the canal, Crisal

and Baloa, which are operated by a Hong

Kongbased 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 uh

US grabs for Chinese interests and

assets in in the region?

>> 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. Um, 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 cancelled

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 the US national security

strategy then yes the 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 US relations, right?

So if we if the US does cancel or a pro-

US administration in Venezuela cancels

these massive contracts, that's a huge

loss of face for Beijing. I mean, does

does Xiinping still roll out the red

carpet for Trump in April? Um, how does

that work with, you know, the the very

hard one st well stabilization so far of

US China relations?

>> Well, I want to actually piggyback on

this discussion. I I completely agree

with you, Mihal. I think that beyond the

oil issue which I think is what the US

is fixated on for China it would be

deeply concerned 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 uh

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, uh

investments are at jeopardy beyond

Venezuela?

>> I think there is. I mean, if you as 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 Iraq and

after Libya that everybody was busying

trying to figure out you know where

their exposure is and review their risk

assessment practices. Um 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. These are big and

important contracts but equally they'll

want to try and secure them. Now, does

that mean diversifying the equity? You

know, just making um having local

partners, maybe having some Russian

partners, making them look slightly less

Chinese, um maybe less debt, more cash,

more R&B. 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. 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 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 um that

is likely to still play out

notwithstanding the fact that

everybody's very anxious right now. When

I think about uh 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, uh, and

China is a huge consumer of a lot of

these fossil fuels, uh, that that we

would see more stockpiling in 2026, that

what is the right reaction function that

we'll see out of Beijing in response to

a lot of this geopolitical uncertainty

centered around uh, commodities and

energy? I think that's a very reasonable

expectation, right, that they'll

continue stockpiling oil. Um, 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-year plan about

these sort of energy security and

commodity security. Um 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

will be revised uh 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 um and continue

that move away from fossil fuels um

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 um that the

electricity needs of of China's massive

industry are met. And one very very

quick follow-up question um about the

CNY. You know there's been a lot of

discussion about petro that more uh

trade will be denominated in CNY. Uh

what's your feeling and and assessment

of of the future of CNY being used in

and a lot of this trade invoicing and

settlement for petrol and uh energy

commodities. I think there's definitely

a push to move away from the dollar,

especially by sanctioned countries,

right, that have to resort to trade and

R&B. So, it's is just as much about the

move away from the dollar about

darization as it is the kind of petroan.

There's still lots of issues with the

yuan not being convertible. Um, and many

countries

are not sort of very gladly moving to

trading in Iran if they don't have to.

Think of Saudi Arabia. Think of some of

the big oil um producers. Iraq, a their

economies are still pegged at the

dollar. And so they don't want to

necessarily move to the yuan, but it's a

hedge. Um 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 derisk

against sanctions. So it's an

alternative, but I don't think it's

going to dethrone the dollar anytime

soon.

>> Thanks so much, Mikall. That's terrific.

FA fascinating and very fastmoving

situation. We'll be uh following it for

sure.

>> Thank you both very much.

>> Okay, let's take one last quick break.

Stay with us.

>> Support for the show comes from Avanta.

Startups move fast and with AI, they're

shipping even faster and attracting

enterprise buyers sooner. But big deals

bring even bigger security and

compliance requirements. A sock 2 isn't

always enough. the right kind of

security can make a deal or break it.

But most founders and engineers can't

afford to take time away from building

their company to focus on that. That's

where Vanta comes in. Vanta's AI and

automation make it easy for your company

to get big deal ready in days. And Vant

says they continuously monitor your

compliance so future deals are never

blocked. Plus, Vant scales with you.

Backed by support that's there when you

need it every step of the way. With AI

changing regulations and buyers

expectations, Vant knows what's needed

and when. and they built the fastest,

easiest path to get you there. That's

why serious startups get secure early

with Vanta. Get started at

vant.com/proofg.

That's van nta.com/propg.

vanta.com/proofg.

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 health

care 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 fencing

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 and

the market go to fix it? James, I sent

you a video on this. Did you watch it?

The Fat Prison.

>> I did. I did. I mean, it's uh I I'd

never heard of this before. I was really

quite amazed. It's the story of uh this

Australian woman, 28 years old, uh

Chinese Australian. Apparently, her

mother recommended that she went to one

of these fat prisons in China in

Guangjo, uh city in southern China. I

think her real name is TL Huang. and uh

she was in one of these fat prisons in

December last year and I have to say uh

it I I didn't quite know how to react to

it. I mean I can see that people really

want to take drastic steps to lose

weight but it did look sort of brutal

and there were moments when she's

talking to uh the video camera uh when

she looks like she's about to cry and uh

she's really having a hard time. Um, as

you mentioned, Alice, you book yourself

into these uh facilities. Um, they're

called fat prisons in the vernacular.

The uh the real name uh for them is

weight loss training camps. And

apparently there are uh more than a

thousand of these all over China at the

moment. Um, and although you book

yourself involuntarily,

uh 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, um, TL Huang was there, I

think, for 28 days. I I believe she had

a pretty intensive schedule, 7:30 a.m.

wakeup calls, uh, 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 n pounds. And she paid

$1,500

for the privilege of undergoing all of

this. What did you think of it, Alice? I

mean, uh, you were were you moved by her

plight?

>> I mean, in in a way, it doesn't surprise

me. It seems like a very Chinese

response to an issue, uh, which is to go

all out and to the extreme. uh and to

enforce it um through this rigid

structure. And it honestly wasn't a

surprise because over the last 2 years

I've been seeing a lot of on social

media these reels of people working out

in China and I've been seeing the last

two years that that the fitness industry

is really soared in China. 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

you know I you know growing up in

Australia you saw more overweight people

it's it's also a very overweight uh

country every time I went back to China

everyone would be very skinny and in the

last 2 years I've noticed a market

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 uh but they're

having better access to food but in

China there is a strong um prevalence of

diabetes as well as increasingly obesity

and this the figures from the uh 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

um 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 it makes

sense given the size of population, but

the world's largest overweight po

population in the world. But in April,

uh 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 5-year plan uh because this is this

has massive implications as well for the

economy. I mean you think about the the

increasing health care costs that it

will create uh for the nation. Uh but it

also I think is so different from how

people think of China. The other other

element of this is the uh the commercial

element. So there's a lot of talk about

GLP1 being in pill form this year. how

that will drastically reduce prices uh

for the access to these weight loss

drugs. Uh China currently has uh GLP-1

drugs that uh sell for about $385 to

$685.

I think that's about half of what it

costs in the US. Um but obviously if

China has this flood of new drugs

entering the market, which are currently

under trial, this could massively push

down prices in China and potentially

even globally. Uh, and there are a

couple that I thought looked

interesting. There's Mazda Tide and

that's uh created by Invent Biologics in

SUJL. There's another injectable

bi-weekly injectable GLP1 by UBT251.

There's a Hong Kong pharmaceutical

company that's doing a once daily oral

drug called ASC30.

Uh and apparently there are over 60

GLP-1 drug candidates that are going

late stage clinical trials in China and

they could I think directly compete with

Eli Liy for instance and Nova Nordisk.

Uh but one last point that I thought was

really interesting. Nova Nordisk

actually won a legal case uh with the

Supreme Court in China to uphold its

patent of semiglutide

which is used it's in its GLP-1 drug and

that's used for diabetes and weight

loss. So potentially that gives it a bit

of a moat in China and and elsewhere.

But it seems like the 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 uh James and having

studied China for a bit is that as soon

as China gets into the market just think

about the number of uh different

entrance there'll be and the prices that

they'll push down.

>> Yeah, absolutely. I've got a prediction

on that coming up for a bit later.

Alice, but uh I think you know you're

you're so right to focus on these

Chinese variants of Zmp, the slimming

drugs. Um I found a uh a projection that

by 2030 the Chinese market for these

GLP1s or these uh anti-obesity drugs

could uh reach about 14 billion US in

sales annually. So, we're talking, as

you just said, you know, a massive uh

commercial market there that's just

getting underway. Um, there is also one

uh angle to this um which might surprise

listeners and that is that um not only

humans in China but also pets are are

perhaps going to be receiving these uh

slimming drugs. Um indeed a unit of

Huadong Medicine received acceptant not

acceptance notices from Chinese

regulators for veterary drug

registration applications that target

weight management. And uh these are

apparently going to be given to to cats.

Um and uh there's a rather touching

story in the South China Morning Post

about uh Arena Joe and her five-year-old

cat. And apparently this cat gains about

1 kilogram every year or has done for

the last three years. And she wants to

get her cat onto a veterary version of a

Chinese ompic drug. So it's not just

people, it's also cats that are getting

out of shape in China and maybe are

going to be uh given these drugs as

well. 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, you know, 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 in uh China,

James, because what I've noticed in the

last um call it five years is that

instead of eating at home and cooking at

home and um people are eating out a lot,

why my is so cheap, they call it why,

which is, you know, take out 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.

>> Yeah. I mean the the the cultural shift

is just huge. Um when I was in China uh

I was in a company there were a couple

of hundred a bit more than a couple

hundred people there sitting in those

you know big cubicled offices and I

would say 90% maybe 95% of the people

there never went out for lunch. they

just got the, you know, uh, the order of

of whatever it may be or they brought it

with them in in in a Tupperware box and

they would eat sitting at their desks.

Um, and so it meant that with long hours

in the office, maybe you're having two

meals uh, sitting at your desk, you

don't get any exercise. as we all know

that that's 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 you know

Chinese companies work in a very

stressful environment. I mean you've

just sketched out some of the really

stark statistics when it comes to um

people being overweight in China and I

think it is linked to this kind of

corporate culture this sort of hard

driving um you know start very early in

the morning finish very late at 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 ampic style

drugs is for people to uh 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 I don't

know what you think.

>> And I think a good model for this is

Hong Kong because Hong Kong um has a

strong culture that is pro-agging. Um,

it's reg you regularly see some of the

oldest people in the world living in

Hong Kong. Uh, 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. Um, Japan is another good

model. Um, so I I I hope that there's

going to be a change in the culture, but

uh I'm not so sure given how the

economics uh don't quite add up. you

know, pe 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 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? Well,

Alice, just as you were saying, uh the

Chinese approvals of GLP1 or we could

call them Chinese zmpic variant drugs um

have already started and I think there

were five of these drugs that were

approved last year. Um 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 uh available in

the Chinese market. Some of them will be

uh 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.

Um, 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 undercutting their

foreign counterparts and competitors by

big margins and then we're going to see

an outflow of these drugs all over the

world. I mean, imagine being able to buy

it for as little as $10, $20 over the

counter. And that could very much happen

if if China really gets involved

commercially. This is very very

interesting. So, my prediction is

somewhat in the same field. Uh, but it's

in the field of of fitness where I I

sense the early days of a fitness boom

in China. Um, we're already I'm already

starting to see more people going to the

gym. This was kind of an uh a non-event

in China in previous years, but I think

there's a fitness boom with economic

opportunities for gyms,

uh for fitness classes, for sportsware,

and sports equipment. I could see uh

China getting into the sports equipment

market, making good equipment that could

be cheaper than some of the other

foreign uh companies out there. Uh and

similarly I think um when I think about

sports wear um uh tennis shoes, running

shoes, I think these are uh sectors that

could do very very well in China in

2026, especially if we see a big focus

from the government in on cracking down

on this uh national uh health issue. All

right, that's all for this episode.

Thank you for listening to China Decode.

Make sure to follow us wherever you get

your podcast so you don't miss an

episode. Talk to you again next week.