05/07/2025

BIZ & FINANCE SATURDAY | JULY 5, 2025

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China urges caution, speed on driver-assist tech

Yeo, who became South Korea’s new trade envoy last month, is due to fly to the US yesterday and plans to hold talks with US Trade Representative Jamieson Greer and other senior officials today, just ahead of the July 9 deadline when US tariffs could rise sharply. US President Donald Trump said his administration would start sending letters yesterday to countries specifying what tariff rates they will face on imports into the US. Yeo said the substance of negotiations mattered more than the deadline, noting he would ask the US to take time and accelerate talks to reach a “win-win” deal. South Korea has sought exemptions from Trump’s punishing tariffs on imports of automobiles and steel products, as well as a 25% “reciprocal”levy on the Asian ally currently paused for negotiations. The government of Asia’s fourth-largest economy, which is currently subject to a blanket 10% tariff, agreed with the US in their opening round of trade talks in late April to craft a trade deal reducing tariffs by the July deadline. However, negotiations appear to have made little progress and were hampered by political uncertainty over the last few months following BEIJING: China’s automakers are outpacing foreign rivals in their push for assisted-driving technology, eager to woo motorists hungry for rapid innovation. Yet, Beijing has a nuanced message for its rising stars: move fast – but be careful. Regulators this week have been finalising new safety rules for driver-assistance systems as Beijing sharpens scrutiny of the technology following an accident involving a Xiaomi SU7 sedan in March. That incident killed three occupants when their car crashed seconds after the driver took control from the assisted-driving system. While Chinese officials want to prevent carmakers from overselling the capabilities of such systems, they are also threading the needle between innovation and safety to ensure their automakers don’t lose out to US and European rivals. Setting clear regulations for assisted-driving tech without slowing its advancement could give China’s industry an edge over global competitors, analysts say. This approach is in stark contrast to the US market, where companies pursuing autonomous cars have expressed frustration that the government has not implemented a regulatory system to validate and test the technology. Markus Muessig, auto industry lead at Accenture Greater China, said China’s regulators and industries have long followed former Chinese leader Deng Xiaoping’s “feel the stones to cross the river” philosophy. The expression means to steadily explore new, uncertain technologies, which “has proven very successful for this market,“ he said. Current Chinese regulations allow systems that automatically steer, brake and accelerate under certain conditions while requiring the driver to stay engaged. For that reason, marketing terms such as “smart” and “autonomous” are banned. The new rules will focus on hardware and software designs that monitor a driver’s state of awareness and their capacity to take control in time. To do this, regulators enlisted Chinese automaker Dongfeng and tech giant Huawei to help draft new rules and have sought public input over a month-long period, ending yesterday. At the same time, government officials are pressing Chinese automakers to rapidly deploy even more-advanced systems, known as Level 3

assisted-driving, which allow drivers to take their eyes off the road in certain situations. Level 3 is the midway point on the industry’s autonomous-driving scale, from basic features like cruise control at Level 1, to self-driving capability under all conditions at Level 5. The Chinese government had tapped state owned Changan to be the first automaker to begin Level 3 validation tests in April, but the plan was paused after the Xiaomi crash, said a source familiar with the regulatory planning process. Beijing still hopes to resume such tests this year and approve the country’s first Level 3 car in 2026, the source said. China’s Ministry of Industry of Information Technology and Changan did not respond to requests for comment. Xiaomi has said it is cooperating with a police investigation into the accident. Driver-assistance systems are seen by industry analysts as the next big battleground in China’s hyper-competitive car market. Over the past decade, Level 2 systems have proliferated in China, including Tesla’s Full Self Driving system, as well as the Xiaomi feature involved in the March crash. The capability ranges from basic vehicle following on highways to handling most tasks on busy urban roads, under driver supervision. Automakers have pushed down hardware costs to levels that allow them to offer Level 2 features at little or no extra cost. China’s No. 1 automaker BYD has rolled out its “God’s Eye” o Beijing targets responsible rollout of Level 3 autonomy in tightening tech race South Korea’s martial law crisis with President Lee Jae Myung elected as the new leader on June 3. President Lee said on Thursday that the ongoing talks between Seoul and its ally Washington had “not been easy”, adding the two sides were not clear on what they want. Washington is demanding better access to the agriculture and car sectors, and improved market access and non-discriminatory treatment in the digital sector, Minister Yeo told a parliamentary hearing yesterday. “The government will respond flexibly by taking into account the level of the US demands and domestic political security sensitivities,“ Yeo said. Yeo also said that the US was asking for larger investments by South Korean companies in the country and increased South Korean purchases of US energy supplies. Although South Korea has shown interest in a US$44 billion (RM185 billion) LNG project in Alaska, Yeo said the feasibility of the project was still not clear and the US would only provide more information later in the year. South Korea’s efforts to reach a trade deal come as Trump said Vietnam and the US had agreed on a 20% tariff rate on imports from Vietnam, down from an initial 46% rate he threatened. Yeo said South Korean companies that use the Southeast Asian country as a manufacturing base would be affected by those tariffs. – Reuters

China’s auto and tech giants vie for edge in driver-assist boom as regulators tighten rules post-Xiaomi crash. – UNSPLASH PIX

passed in Britain last year adopted a similar approach to liability. At the Shanghai auto show in April, several companies touted progress toward rolling out vehicles with Level 3 capability. Tech giant Huawei said it is ready to introduce a Level 3 system for highways after simulated testing of more than 600 million km. It showed a video of drivers and passengers singing karaoke as the car drove itself. Geely’s Zeekr brand debuted the luxury SUV 9X, featuring Level 3 software the automaker said is ready for mass production in the third quarter if regulations allow. Zeekr is also applying to be part of a second batch of automakers to undergo government Level 3 validation tests. – Reuters

assisted-driving software for free across its entire product line-up. More than 60% of new cars sold in China this year will have Level 2 features, according to an estimate from research firm Canalys. In its push for assisted-driving technology, and ultimately fully self-driving cars, Beijing is seeking to help homegrown carmakers just as it supported China’s rapid rise to become the world’s electric-car juggernaut. Last year, China’s government lined up nine automakers for public tests to advance the adoption of self-driving cars. In their Level 3 push, Chinese regulators also are upping the regulatory ante by holding automakers and parts suppliers liable if their systems fail and cause an accident. Legislation

South Korea may ask US to extend tariff freeze SEOUL: South Korea’s Trade Minister Yeo Han-koo said yesterday that he might request an extension of the freeze on US tariffs that is set to expire within days when he heads to Washington for talks with US officials.

Air France-KLM to buy major stake in SAS PARIS: Air France-KLM plans to increase its stake in Scandinavian airline SAS to 60.5%, the latest step towards consolidating Europe’s fragmented airline sector as carriers seek to strengthen their position against rivals. shareholder after a minimum of two years, subject to conditions. SAS exited from Chapter 11 bankruptcy protection in August last year.

Air France-KLM CEO Ben Smith told Reuters in March that the company was looking to raise its stake in SAS, as the carrier was meeting the necessary milestones, including integration into the SkyTeam airline alliance, of which Air France-KLM is also a member. The two carriers have already had a commercial cooperation since summer 2024. Control of SAS would allow Air France-KLM to expand in the Scandinavian market and create additional value for shareholders, Air France-KLM said in a statement. “Following their successful restructuring, SAS has delivered impressive performance, and we are confident that the airline’s potential will continue to grow through deeper integration within the Air France-KLM Group,“ said Smith. The deal comes as executives seek more consolidation in Europe’s fragmented airline industry, which they say is needed to compete with US and Middle Eastern rivals. Earlier this year, Germany’s Lufthansa bought a 41% stake in Italy’s ITA Airways and a stake in Air Baltic. The Portuguese government is looking to privatise its national carrier TAP Lufthansa and Air France are also in talks about buying a stake in Spanish airline Air Europa. – Reuters

The French airline group said yesterday it intended to increase its stake from 19.9% currently by acquiring the stakes held by top shareholder Castlelake and Lind Invest. The purchase, subject to regulatory clearances, is expected to close in the second half of 2026, Air France-KLM said. The value of the investment would be determined at closing, based on SAS’s latest financial performance, including core earnings and net debt, added the company. The Scandinavian airline welcomed the announcement, calling it a “defining moment” that marked Air France-KLM’s commitment to strengthen SAS. “It brings not just stability but will also allow for deeper industrial integration and the full backing of one of the world’s leading airline groups,“ SAS CEO Anko van der Werff said. “Together, we will be better positioned to deliver greater value to our customers, our colleagues, and the wider region.” SAS said it would continue to invest in its fleet and network. In 2023, Air France-KLM said it would invest about US$144.5 million (RM610 million) for its initial SAS stake, boosting its presence in Sweden, Denmark and Norway with the option to become a controlling