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CCP to Strengthen United Front Work in Private Companies

The CCP General Office recently introduced a document entitled, “Opinions on Strengthening the United Front Work in the Private Economy in the New Era.” It is the first document on the united front work of the private economy that the CCP has issued since 1978, the start of China’s reform and opening up. It shows that private enterprises are playing a more decisive role in the overall economy. It also shows that, in dealing with the trade conflicts between China and the U.S., the CCP feels the urge to integrate the power of private enterprises with the imposition of the party’s management and control over them.

According to the document, the private economy is China’s “important economic foundation.” Private entrepreneurs are “our own people” and have always been “an important force that the party must unite and rely on in order to serve the long-term in exercising governance.” In the document, it asked that the private entrepreneurs always be politically sensitive and continuously be guided to increase their “political, ideological, and emotional identity” with the party. Meanwhile, the party must actively recruit party members among private entrepreneurs, build and manage a database of talent pools, and develop those private entrepreneurs who will follow the party without deviation. Private entrepreneurs are encouraged to participate in the national strategic discussions and the belt and road initiatives but they need to protect the country’s national interests consciously. It requires that the Private entrepreneurs shall not engage in activities including forums, seminars, lecture halls, salons, and other activities without advanced registration.

For 40 years since the start of China’s economic reform and opening up, the many startup companies in China, such as those that follow, have brought it to the world’s stage: Huawei, Bytedance, Tencent, Alibaba and others. Private enterprises in China contribute over 50 percent of business taxes, make 60 percent of investments, own 70 percent of the patents, hire 80 percent of the workforce and account for 90 percent of the total companies in China.

Source: BBC Chinese, September 16, 2020

Taiwan Kuomintang Cancels Visit to the “Straits Forum” over CCTV Host’s Statement

The Kuomintang originally planned that Wang Jin-pyng, the former legislator, would lead a delegation to Xiamen of Fujian province to participate in the Straits Forum on September 16. However, Li Hong, a CCTV host of “Across the Strait” commented that Wang’s visit to the mainland was “to seek reconciliation.” The statement triggered criticism of the Kuomintang in Taiwan. Johnny Chiang, the Kuomintang chairman demanded an apology from Li Hong. Although Li later on responded that she meant that the visit was to seek “peace” not “reconciliation,” [Editor’s note: “和” in Chinese carries multiple meanings including reconciliation, harmony or peace] she was unable to quell all parties’ doubts. On September 14, the Kuomintang announced that, for the first time since the Straits Forum started 12 years ago, it would not participate in the “Straits Forum” as a political party; however, each party member could decide for himself whether to participate.

China has hosted the “Straits Forum” since 2009. In the past, the chairman of the National Committee of the Political Consultative Conference would attend the opening ceremony. For the past 11 years, the Kuomintang sent a vice chairman to lead a delegation. Hung Hsiu-chu personally led a delegation when she was the Chairman. This year Johnny Chiang was elected the Chairman of the party without a Vice Chairman so Wang Jin-pyng, former legislative member, was selected to attend the “Straits Forum.”

Source: Radio Free Asia, September 14, 2020

CCP Secret Trial of Real Estate Tycoon Who Openly Criticized Xi Jinping and the Official Media

On September 11, Ren Zhiqiang, the former chairman of China Huayuan Group, a real estate tycoon, was put on trial in Beijing. Ren was charged with corruption and bribery, embezzlement of public funds, and abuse of power. There were many policemen in and around the courthouse, and no one except those “specially invited” could enter the courtroom. In 2016, Ren Zhiqiang publicly criticized “the official media which has the party as its last name” and was suspended from the party for one year. In February 2020, Ren Zhiqiang wrote on social media that the CCP lost control of the epidemic due to the lack of freedom of the press and speech and should take responsibility. He also implied that Xi Jinping is “the clown who even if stripped naked, would still insist on being an emperor himself.” Ren disappeared from the public in March. On April 7, the Beijing Municipal Discipline Inspection Department announced that it was conducting a disciplinary review on Ren Zhiqiang. On July 23, Ren Zhiqiang was “expelled from the party for serious violations of discipline and law” was accused of “not complying with the Party Central Committee on major issues” and of “smearing the image of the party and the country.” Ren holds a Law degree from Renmin University and served as a member of the Beijing Political Consultative Conference. His father was the formal Deputy Minister of Commerce.

Source: The Epoch Times, September 11, 2020

CCP Provincial Party Committee Issues Directive to Prevent Japanese and Korean Companies from Leaving

In October 2019, Samsung closed its mobile phones plant in Huizhou city of Guangdong province. In June this year, Samsung announced that it will move its display production line from China to Vietnam. An internal document that the Huizhou government issued on August 10 showed that the Huizhou Import and Export business was hit hard when Samsung left and the CCP Guangdong provincial party committee asked that Huizhou take measures to stop Japanese and Korean companies from moving out.

In a confidential document that the Huizhou Municipal Bureau of Commerce issued on August 10, 2020, it stated that, in 2020, due to China US trade war, the pandemic, and the exit of Samsung, Huizhou’s import and export trade with Korea fell by 77.4 percent, of which exports plummeted by 89.5 percent. Out of 280 Korean companies, including Samsung and LG, which have invested in Huizhou over the years, as of July 2020 there were only 96 left, an indication that two-thirds of South Korean companies have left.

In the document, the Guangdong provincial party committee directed that Huizhou “take advantage of the relatively stable epidemic condition in Southeast Asia and use ‘fighting the epidemic together’ as the opportunity to prevent companies from Japan, South Korea and other neighboring countries from leaving. The document suggests that Huizhou use the upcoming economic conferences with Korea and Japan and focus on the promotion of the China-South Korea Industrial Park in Huizhou and organize Japanese and Korean companies with an investment interest to visit Huizhou. The document also summarized the recent cooperation projects Huizhou has with neighboring countries. It includes the opening of the Huizhou Economic and Trade Representative Office in South Korea at the end of August. These projects also include: hosting visits of Japanese, South Korean and Singaporean companies and institutions to visit Huizhou; returning visits to key enterprises in those countries; and engaging third party agencies to attract investment opportunities in Huizhou.

Source: Epoch Times, September 8, 2020

People’s Daily Refused to Publish U.S. Ambassador’s Op-Ed, Accusing U.S. of Being Overbearing

Terry Branstad, the U.S. Ambassador to China, recently approached the People’s Daily, hoping to publish his op-ed on improving U.S.-China relations. People’s Daily, however, rejected the U.S. Ambassador’s request. China’s Ministry of Foreign Affairs and People’s Daily responded on Thursday September 10, calling the U.S. Ambassador’s article “full of loopholes” and accused the U.S. of being ” illogical, overbearing and unreasonable” in this matter.

In the Op-Ed titled, “Resetting the Relationship Based on Reciprocity,” Branstad stated that the relationship between the U.S. and China has become increasingly imbalanced. U.S. companies, journalists, diplomats, and even civil society have been given unequal access. While U.S. journalists face restrictions on reporting and even entering China, Chinese state media workers have long enjoyed open access in the United States.

At a regular press conference on Thursday, Zhao Lijian, spokesperson for the Ministry of Foreign Affairs, said that Branstad’s article “attacks” and “smears” China, saying that the U.S. request of “publishing the op-ed with its full content with no alteration” clearly has nothing to do with freedom of the press. Zhao Lijian said that the US is “deliberately touching porcelain to find fault” [Editor’s note: deliberately manufacturing the outrage to find fault with China.]

U.S. Secretary of State Pompeo issued a statement late on Wednesday night to the People’s Daily for refusing to publish Branstad’s op-ed criticizing China’s propaganda agencies of hypocrisy and lack of reciprocal treatment and that China’s Ambassador to the U.S. Cui Tiankai alone has published five Op-eds this year in prominent U.S. news outlets.

Since the beginning of this year, the U.S. has begun to put pressure on the Chinese authorities to achieve reciprocity in terms of the number of media, the working environment of journalists, and the free flow of information. Related measures have caused a strong backlash from China. The People’s Daily, Xinhua News Agency and other Chinese propaganda agencies have recently published long articles in succession criticizing U.S. practices.

On August 25, the People’s Daily published a 30,000-word article in three pages criticizing the China policy speech delivered by US Secretary of State Pompeo at the Nixon Presidential Library.

Source: Voice of America, September 10, 2020

The Short-lived Fate of China’s Chip Manufacturers

Recently, a number of scandalous projects in China’s semi-conductor chip industry came to a halt mostly due to a lack of funding. Local governments often desperately scramble for chip projects to show their political achievements. They have usually come up with the initial funding to secure the land and building but then suffered most of the loses if the project failed. Meanwhile, there are also groups that take advantage of policy loopholes and, because they lack accountability, they deceive those who do investment and funding.

Below is a list of reported cases.
1. HSMC, Wuhan Hongxin Semiconductor, is facing a large funding gap. As the single largest investment project in Wuhan in 2018, HSMC Wuhan Hongxin is reported to be a 128 billion-yuan (US$18.7 billion) project. It set the ambitious goal of manufacturing 30,000 units of 14 nm chips each month then followed by making 30,000 units of 7 nm chips. In 2019, it hired Jiang Shangyi, former Chief Technology officer from TSMC, as its CEO. Public information shows that in 2019, Wuhan Huanyu, a project subcontractor, sued Wuhan Hongxin and Wuhan Torch, the general contractor of the first phase of the project, for 41 million yuan (US$6 million) in delinquent payments. Since then, Wuhan Hongxin’s account has been frozen, and more than 300 acres of land worth 75.3 million yuan (US$11 million) in the second phase were also seized. It was reported that this seized land was previously used by Hongxin as security for mortgage loans. “Wuhan 2020 City-level Major Projects under Construction Plan” disclosed that, at end of 2019, Hongxin had received a total of 15.3 billion yuan in investment. In January this year, it had to use the ASML lithography machine it owns as collateral and borrowed 580 million yuan from Wuhan Rural Commercial Bank to cover the immediate cash shortage. However, that number is still far below the funding shortage of over 100 billion yuan.
2. In May, after pouring in US$1.2 billion in investment funds with thousands of acres of buildings being vacant, Globalfoundries ended a US$10 billion in chip manufacturing project in Chengdu of Sichuan province. This semiconductor project only lasted about 19 months.
3. On July 10, Dekema (Nanjing) Semiconductor Technology Co., Ltd. formally filed for bankruptcy. The project is claimed to be a US$3 billion investment. As early as 2019, the company was accused of a lack of credibility and was behind in payments for wages, vendors and taxes payments.
4. Beginning in 2019, Dehuai Semiconductor in Huaian of Jiangsu province defaulted on a large amount in employee wages, supplier loans and general loans. It now faces 10 lawsuits. As of the end of 2019, the Dehuai project received 4.6 billion yuan in investment funds, but has over 100 million yuan in outstanding debts.

Source: Sina, August 2020

Mass Protests in Inner Mongolia as Officials Replace Mongolian Language with Chinese

The Education Department of the Inner Mongolia Autonomous Region announced that, starting with the new semester on September 1, all elementary and middle schools in the region will adopt what is called the bilingual teaching model. That is, the three subjects related to China, which are history, ethics, and the rule of law,  will be taught in Chinese instead of the traditional Mongolian language. The move triggered a strong backlash from the locals in Inner Mongolia. Mongolian rights organizations in the U.S. also condemned China for suppressing Mongolian freedom of speech and destroying their national identity. They called it “cultural extermination” in Inner Mongolia.

The Mongolian teachers in Erenhot City launched a strike. Many Mongolian parents plan to teach their children at home instead of sending them to school. Herders also held simultaneous demonstrations in major cities across Inner Mongolia to protest the “cultural extinction.” Thousands of local students dressed in traditional Mongolian costumes participated in the demonstrations. Video footage of the protests also circulated on Twitter.

The Inner Mongolia Human Rights Information Center reported that, as the scale of the protests continues to escalate, the authorities also started to suppress the demonstrators. Hundreds of parents from the Mongolian language school in Zalut Banner gathered in front of the school and demanded the immediate release of the children detained in the school’s dormitory. The local police, however, blocked them from entering into the school. In Horqin Zuoyizhong Banner, the police beat the parents. In Hohhot, students and their parents from the Inner Mongolia Normal University Affiliated School protested in front of the school and launched a petition. Many parents said that if the appeal fails, they will not send their children to school. There are also reports that several hundred Mongolian activists were either detained or under house arrest because they participated in organizing the protests.

1. Secret China, August 30, 2020
2. Twitter Post

College Graduates Took Stability Maintenance Positions as Unemployment Worsened

China’s unemployment rate has been hit hard as the economy has continued to slow down. In the past, students who graduated from Peking and Tsinghua University used to be favorite candidates for the large companies. Now they can hardly find excellent jobs. Some of those who hold doctoral and master degrees from Peking and Tsinghua University reportedly have been applying for positions in the office of sub-districts in Hangzhou city of Zhejiang Province. Some of them have even taken positions as a stability maintenance agent.

According to the official data, there will be 8.74 million college graduates in China in 2020, an increase of more than 400,000 from last year. With COVID 19, the deterioration of US-China relations and the withdrawal of foreign capital from China, the pressure for employment in China has greatly increased. The statistics from a private institution suggest that the unemployment rate in China could reach double digit growth this year.

Source: Radio Free Asia, August 24, 2020