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All posts by LKY

New Security Regulation Might Limit Investors’ Ability to Participate in Security Trading

Guangming Daily published an article which stated that a new regulation that the China Security Regulatory Commission introduced is set to become effective on July 1. The regulation requires that investors fill out a survey on “Risk Tolerance Ability.” The sample questions include questions such as current source of income; educational background or work experience; and plans to utilize returns from the investments. Then the investors will be divided into the following five types based on their ability to take risks, and how conservative, cautious, stable, active, and aggressive they are. Securities will be divided into different levels based on the level of risk. Investors in each category will only be able to purchase securities that fit their category or any categories that are rated lower than theirs. The new regulations are said to “sell the right products to the right group of investors.” The article pointed out that the new regulation will affect 125 million investors and will likely mean that not every citizen will have an opportunity to participate in trading securities.

Source: Guangming Daily, June 20, 2017
http://politics.gmw.cn/2017-06/20/content_24832845.htm

RFA: China Tightens Rules for Municipal Employees Traveling Overseas

On June 17, Radio Free Asia published an article reporting that Beijing has tightened its control over municipal employees traveling overseas. The rule no longer applies only to Party officials and military personnel but has also been expanded to include public servants as well as all management levels in State Owned Enterprises, especially in the banking industry. The purpose of the new rule is to prevent officials from taking their money overseas and fleeing China. The article quoted a comment from a businessman who stated that all of his friends had to turn in their passports. The regulation will not work on certain members of the elite class because they can use their connections to obtain fake IDs. The article stated that the restrictions on Party officials traveling overseas started over 10 years ago. Based on the evidence from criminal cases, it is quite common for the Party officials to own multiple Chinese passports or even foreign passports.

Source: Radio Free Asia, June 17, 2017
http://www.rfa.org/cantonese/news/officer-06172017105356.html

Radio France Internationale: Tightened Security and News Coverage after Explosion outside Kindergarten in Xu Zhou City

Radio France Internationale published an article explaining that, following the recent explosion outside a kindergarten in a suburb of Xu Zhou City in Jiangsu Province which killed 8 people and injured 65 people, the General Office and the Publicity Office issued an urgent notice to news media outlets. The notice requested that the media outlets must use only three official media as their news sources when reporting on the explosion. They must exercise strict efforts to monitor online and social media in order to stop and prevent potential “rumors” or negative comments. The article also stated that the seriousness of the explosion caught the attention of the leadership in Beijing. The Ministry of Education has ordered tightened security around school buildings. Some Kindergartens have even hired security guards who are armed with guns or preventive equipment such as batons, long forks, or spears. In addition, the article also quoted Bowen Press, which wrote that, “While China is facing a number of different hidden crises, its official news media will report extensively on incidents such as gun violence in the U.S. and the deadly London fire in the U.K. However, when it comes to kindergarten explosions or other domestic accidents, little news coverage can be found. That is incredible.”

The explosion took place at 4:50 pm on Thursday June 15. According to CCTV, the police have identified the suspect as a 22 year old male who made the explosive device at home and was killed at the scene. The suspect was reported to have dropped out of school due to psychological problems and then found a job close to the kindergarten. The police found the explosive material at the suspect’s residence and found the words “death,” “kill,” and “eliminate” written on his walls.

Sources:
1. Radio France Internationale, June 16, 2017
http://cn.rfi.fr/%E4%B8%AD%E5%9B%BD/20170616-徐州幼儿园爆炸惊动中南海-全国学校或紧急配枪棍长叉
2. Voice of America, June 16, 2017
https://www.voachinese.com/a/explosion-at-a-kindergarten-in-jiangsu-province-china/3901488.html

Apple Daily: Mainland Has Actively Been Gaining Control over Hong Kong Media

Apple Daily published an article expressing concern about freedom of the press in Hong Kong. According to the article, companies from the mainland, such as TVB and the South China Morning Post have been buying out Hong Kong media, suggesting that Beijing has slowly been gaining control over Hong Kong media. At the same time, cases have been reported in which reporters (independent of the mainland) have been attacked; key proprietors of a bookstore in Hong Kong have been arrested; and unusual organizational changes within the media have taken place. The article quoted an interview of the president of the Hong Kong Reporter’s Association who pointed out that some publishers have withdrawn certain outspoken columns or shifted the editorial direction through organizational restructuring.

Based on the statistics that Reporters without Borders has published, the freedom of the press index for Hong Kong media dropped from 18th in 2002 to 73rd in 2017. Out of 26 mainstream media in Hong Kong, companies from the mainland own at least eight to 31 percent of them.

Source: Apple Daily, June 6, 2017
http://hk.apple.nextmedia.com/news/art/20170606/20045536

iFeng.com: China Faces a Pension Shortage of 8-10 Trillion Yuan over the Next 5-10 Years

According to iFeng.com, the Tsinghua PBCSF Global Finance Forum was held on June 3-4 in Beijing. The theme of the forum was Economic Globalization and Financial Stability. At the forum, Zhou Yanli, the former Vice Chairman of the China Insurance Regulatory Commission (CIRC) gave a lunch presentation. During his delivery, Zhou disclosed that China faces a large shortage in its pension reserves amounting to eight to 10 trillion yuan (US$1.18 trillion to 1.47 trillion) over the next five to 10 years. At the same time, social security funding has a balance of over 2 trillion yuan (US$0.29 trillion) and also faces a large shortfall. Zhou proposed that, in addition to the funding that the Ministry of Finance provides and what business enterprises contribute, more effort is needed to expand investment in pension insurance as well as pushing growth in the social security fund in order to supplement the shortage in the pension fund. By the end of 2016, China had a population of 22.4 billion people who were over 60-years-old.

Source: ifeng.com, June 3, 2017
http://finance.ifeng.com/a/20170603/15426251_0.shtml

EU Insists on Imposing Anti-Dumping Tariff on China’s Steel Products

Epoch Times published an article stating that the EU will impose an anti-dumping tariff on China’s steel products. The article said that, on June 9, the EU announced that it will impose a high tariff on Hot Rolled Steel Flat Bars. On June 2, one week earlier, EU leaders had a summit meeting with Chinese Premier Li Keqiang in Brussels. The summit happened to take place when the U.S. decided to withdraw from the Paris Agreement. It was expected, under the circumstances, that cooperation between China and the EU would improve and both sides would be willing to work with each other. However the outcome of the meeting did not turn out that way. The EU maintains it has strong grounds for its anti-dumping policy and demands changes from China, which has made China quite unhappy. According to an article in Politico, European Commission President Jean-Claude Juncker stated that “Chinese steel overcapacity is now more than double the EU’s total capacity. If we fail to make progress … the only winners will be political forces that oppose the progress we seek.” Section 15 of the Protocol on the Accession of the PRC expired last December. According to the policy, China would have been granted Market Economy Status by then. It would have meant that Western countries should not impose anti-dumping tariffs on China. However, China has faced resistance from the U.S. and from European countries. So far, it has not been granted this status.

According to Asahi Shimbun, a Japanese media, China was denied qualification for Market Economy Status during the EU and China Summit on June 2. China has expressed strong discontent about it. Li Keqiang even refused to publicize the joint announcement both parties made on the Paris Agreement.

Meanwhile Deutsche Welle published an article that stated that the EU will impose a 35.9 percent tariff on Hot Rolled Steel Flat Bars made in China. Currently the EU has trade protection measures on over 100 products. Of those, 40 of them are on steel products and among those 15 of them come from China. Hot Rolled Steel Flat Bars can be used to build ships, gas containers, and energy pipes. According to the EU, the 35.9 percent temporary tariff will be in effect for five years starting on June 10.

Source:
Epoch Times, June 11, 2017
http://www.epochtimes.com/gb/17/6/11/n9250440.htm
Deutsche Welle, June 9, 2017
http://www.dw.com/zh/盟亮红牌-中国钢产品再遇反倾销/a-39189121?&zhongwen=simp
Politico, “EU-China trade tensions undermine climate unity, June 2, 2017
http://www.politico.eu/article/eu-china-trade-tensions-undermine-climate-unity-summit-steel-dumping/

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