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China’s Central Bank Governor: Large Fintech Firms May Lead to Market Monopoly

Yi Gang, the Governor of China’s central bank, recently pointed out that the “winner-take-all” attribute of large fintech firms could lead to market monopoly. Yi noted that there are more than 4,000 small and medium-sized banks in China. He expressed concern about the banks increased reliance on large technology companies.

As China recently took a heavy-handed approach toward fintech giants such as Alibaba and Tencent, the website of the People’s Bank of China released Yi’s speech on September 14th at a Sino-German video conference on financial technology .

Yi noted that China’s rapid development in fintech has also highlighted a number of problems. These include the payment institutions entering into the financial sector and offering a variety of financial products such as insurance and microfinance. They thereby add to the chances of cross-product and cross-market contagion of financial risks.

Yi said Chinese regulatory authorities will bring all financial activities under financial supervision and make sure that financial businesses must be licensed. China also requires that payment methods be divorced from other financial products. In addition, Yi vowed to strengthen anti-monopoly efforts and promote large Internet companies to protect consumers’ choice of payment methods.

Yi also noted that the development of fintech will have an impact on the traditional banking industry. “Small and medium-sized banks are facing greater challenges. With limited resources of their own, small and medium-sized banks can only rely on the technology and platforms provided by large IT companies for customer maintenance, credit analysis and risk control.”

Source: People’s Bank of China, September 18, 2021

China Stepped up Control of Web Contents

China has been strengthening its overall supervision of cyberspace. On September 15, the Cyber Administration of China (CAC), the country’s top cyber regulator, released the “Opinions on Further Clarifying the Responsibilities of the Online Platform Operators in terms of Information Content.”

The CAC pointed out that the main purpose of releasing the “Opinions” was to focus on different indications of web chaos, and “to ensure that the online platform always adheres to the correct political direction, public opinion guidance and value orientation.”

The “Opinions” gives ten key tasks, including setting up online community rules, the preparation of lists and directories of illegal and unhealthy conduct, the establishment of user credit records and evaluation systems, and the maintenance of records on users’ violations.

The “Opinions” requires the online platforms to improve the content approval mechanism, implement the chief-editor’s responsible system, further expand the scope of manual audits, and establish a dynamic updating mechanism for the database of illegal activities.

Source: Cyber Administration of China, September 15, 2021

Chinese Version of TikTok Limits Kids under 14 Years Old to 40 Minutes per Day

On September 18, China’s short video application Douyin announced that all real-name users, including new users, under the age of 14 have been put into teenage mode, which only allows usage of 40 minutes a day. The app will also block these users between 10 pm and 6 am every day. The announcement stated that no user can exit the teenage mode by himself.

The announcement called on users under the age of 14 who have not yet registered with their real names to launch the teenage mode by themselves and suggested parents should help their children complete the real name registration for the teenage mode.

China’s State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) issued a notice on August 30 that all online game companies can only provide up to one-hour service to minors from 8 pm to 9 pm every Friday to Sunday and on legal holidays.

Douyin is a short video social media smartphone application developed by ByteDance, a Chinese partially state-owned multinational internet technology company. TikTok is an overseas version that is not available in mainland China.

Source: Beijing News, September 18, 2021

Indian Scholar on China’s Promised Aid to Afghanistan

Not long ago, Chinese Foreign Minister Wang Yi announced that China has decided to provide Afghanistan 200 million yuan (US$31 million) worth of food, winter supplies, vaccines and medicine. China also promised, when security and other conditions are in place, to help build projects there to improve people’s livelihood and to support Afghanistan’s peaceful reconstruction and economic development.

Nandan Unnikrishnan, an Indian political scientist and honorary member of the Observer Research Foundation in New Delhi, India, said, “People just forget that in 1996 and 2001, respectively, China and the Taliban (a group banned in Russia) reached an agreement on the exploitation of mineral resources. So, this is not the first time for China.”

During the period of the Taliban’s rule from 1996 till 2001, China and the Taliban had some low level economic and technical cooperation. Some accounts suggest that after the US’ cruise missile attack on Afghani militant bases, Beijing reached out to the Taliban to offer Chinese support in the form of access to a missile computer guidance system. As the Taliban strengthened its hold over the country, Beijing signed a military pact in 1998 to train Afghan (and therefore Taliban) pilots. Then in 1999 they signed an economic cooperation agreement.

Source: Sputnik News, September 12, 2021
Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA), September 03, 2021

Think Tank Report Points to Widened North-South Gap

On September 8, the Academy of National Development and Strategy at Renmin University of China (RUC), RUC’s School of Economics, and China Chengxin Credit Ratings, jointly issued a special report on China’s macro economy. The report states that the gap between economic development in the north and in the south of China continues to widen and has “reached a point that cannot be ignored.”

The report mentions three areas of imbalance: manufacturing, investment, and R&D and innovation.

The secondary (manufacturing) industry in the North has been stagnant over the past decade. The years between 2012 and 2020 saw zero nominal growth of that sector in northern China.

Although southern China’s consumption, investment and import and export growth are all higher than in Northern China, the main issue is investment. By 2017, investments in the North had plateaued. The gap in exports between the two regions is alarming. At present, 80 percent of the country’s exports come from the South, and the North accounts for only 20 percent.

The North also lags behind in R&D and innovation. A decade ago, the R&D funding, manpower and number of projects in the South was about twice as much as in the North. Now the gap has enlarged so it is about 3 or 4 times as much.

Over the past 10 years, southern China has registered a speedier industrial development. Twenty years ago, the number of large size industrial enterprises in the South was 1.56 times as much as the number in the northern region. Now the difference has widened to 2.65 times as much.

Source: Central News Agency, September 10, 2021

China Has 149 “Aged” Cities

According to the internationally accepted standard, a region in which the percentage of the population aged 65 and over has reached 7 percent is called an aging society. When the population that is age 65 and over reaches 14 percent, It is called an “aged” society.  When those over 65 exceeds 20 percent, it is called a “hyper-aged” society.

According to China’s 7th National Census data, in 2020, 149 cities had a population in which those over 65 years of age exceeded 14 percent, thus becoming “aged” cities. In terms of regional distribution, 41 of them are from the eastern coastal region, 36 are from the northeast region, and 72 are from the central and western regions. Overall, the “aged” cities are concentrated in the northeast and the central region, the Yangtze River Delta, the middle and lower reaches of the Yellow River, and the Chengdu-Chongqing city clusters.

A major reason is the exodus of young adults and the low percentage of working age population. The eastern cities of Shandong, Jiangsu and Zhejiang have many “aged” cities. In these more economically developed regions, the fertility rates tend to stay low.

Source:, September 5, 2021

China’s “Aluminum and Iron Ally” Guinea

Since the military coup in Guinea, its relationship with China has received increased attention. Guinea has long maintained good relations with China. During the Presidency of Alpha Condé, Guinea became an important ally of China’s “Belt and Road” project.

China is the main importer of bauxite ore from Guinea, accounting for nearly half of the country’s total imports. Chalco’s (Aluminum Corporation of China Limited) bauxite project in Boffa, Guinea started operation in April 2020. As a result of exploration, the project sees resources of about 1.75 billion tons which will allow mining for up to 60 years. The total investment in the first phase of the project is about US$585 million and the designed capacity is 12 million tons of high-quality bauxite per year.

Simandou in southern Guinea is one of the world’s largest undeveloped high-quality open-pit hematite mines, with proven reserves of 2.4 billion tons and an estimated annual production of 150 million tons at full capacity, although its exploitation has been delayed by legal disputes and corruption allegations.

In November 2019, the Winning Consortium, a consortium led by a Chinese company, obtained 85 percent of the ownership of blocks 1 and 2 in the north of Simandou. In the south, Chinese companies control 40 percent of Blocks 3 and 4.

China imports more than 1 billion tons of iron ore each year. About 60 percent of it comes from Australia and 20 percent from Brazil. Although Simandou’s production seems small, analysts believe China can use it to reduce its dependence on Australia at a time when Sino-Australian relations have hit a freezing point.

The close ties between the two countries made Guinea one of the first countries to receive Chinese vaccine aid this year. Earlier, China was quick to congratulate President Condé after he amended the constitution and was re-elected president in October 2020, despite the opposition’s accusations of electoral fraud.

Source: BBC Chinese, September 7, 2021

China to Regulate Fees for Off-campus Training

After recent moves to crack down on private education companies that engage in off-campus training, Beijing further issued regulations on fees to be collected for these services.

The central government recently issued a directive on “reducing the burden of homework and off-campus training” for elementary and junior middle school students, which had a significant impact on out-of-school training courses in China’s compulsory education system. In addition to limiting the amount of time students have to spend after class, the authorities have also regulated the off-campus training fees.

According to the National Development and Reform Commission, a government commission on macroeconomic management, China will implement government-guided price management of the training fees. The government will set the benchmark fees and fluctuation ranges and incorporate them into the price management of local authorities.

The benchmark fees and fluctuation range for off-line out-of-school training will be set by the provincial government. The fees and range for on-line training are set by the local authorities where the training institutions are licensed to operate. Local governments are allowed to set the range of fluctuations to be no more than 10 percent above the benchmark, and without a lower limit.

The regulation emphasizes the need to “implement government-guided price management,” and “adhere to the public welfare attribute of out-of-school training,” with the goal of “reducing the burden of education expenses on students’ families.”

Source: National Development and Reform Commission, September 6, 2021