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Xinhua: Banks Saw Concentrated Outbreak of Nonperforming Loans

Xinhua recently reported on the first quarter financial reports that multiple major banks released on May 1. The report indicated that the net profit growth rates of the top five Chinese commercial banks all fell into the "realm of one percent.” As the Chinese macro economy slows, the whole banking industry has been dealing with many challenges. In the first quarter, the top five banks saw their nonperforming loans double on a year-over-year basis. According to senior experts at PricewaterhouseCoopers (PwC), more and more overdue loans are in the process of becoming nonperforming loans. PwC recently published a new report which predicted that most banks would post end-of-year-reports for 2015 showing only single-digit growth and that some would even see negative growth. The total of the nonperforming loans is still rising. In the meantime, the risk resulting from the lower quality of credit based assets is continuing to growing.
Source: Xinhua, May 1, 2015
http://news.xinhuanet.com/fortune/2015-05/01/c_127755182.htm
Briefings | | |   Economy/Resources

China News: ASEAN Leadership Summit Took a Stand on the South China Sea Issue

China News recently reported that Hong Lei, the Spokesperson for the Chinese Ministry of Foreign Affairs, held a press conference in which he commented on the position the Association of South East Asian Nations (ASEAN) took at its 26th Leadership Summit. ASEAN expressed its deep concern about China’s land reclamation activities, which may “undermine peace, security, and stability in the South China Sea.” The Summit Statement also “reaffirmed the importance of maintaining peace, stability, security, and freedom of navigation both in the South China Sea” and in flights over it as well. The Statement urged the speedy conclusion of a Code of Conduct in the South China Sea. Hong said China is “gravely concerned” about ASEAN’s position and rejected ASEAN’s authority over this issue. Hong stated that the South China Sea issues are not issues between China and ASEAN. Instead, China has been directly working with the involved countries to resolve conflicts through bilateral negotiations. Hong called the Summit Statement an example of “a few countries’ taking the entire ASEAN hostage.”

Source: China News, April 28, 2015
http://www.chinanews.com/gn/2015/04-28/7240637.shtml

Briefings | | |   Geo-Strategic Trend

China Became Australia’s Largest Foreign Investor

Well-known Chinese news site Sina recently reported that, last year, China surpassed the United States to become Australia’s largest foreign investor. The investments, however, were concentrated mainly in real estate. As the Chinese anti-corruption movement deepened, Chinese investments in Australia also sped up. According to the latest report that the Australian Foreign Investment Review Bureau (FIRB) released, half of the approved Chinese investments last year (around US$22.1 billion) were for real estate. Chinese investments took a 17 percent share of all foreign investments in Australia. Australian real estate market experts expressed the belief that the demand of the investors from China and other Asian countries is still on the rise. If the Australian dollar depreciates more, Australian real estate will become even more attractive to Chinese buyers.

Source: Sina, April 30, 2015
http://finance.sina.com.cn/money/forex/whqqscgd/20150430/184922086629.shtml

Briefings | | |   Geo-Strategic Trend

Mingpao: Police System to Access Extensive Personal Information on National Database

On April 14, 2015, Mingpao in Hong Kong published an article introducing details on China’s new 21 regulations on social stability maintenance, especially commenting on the “One ID Card System.”
“A resident identity card in China will not only record the holder’s name, address, and date of birth; it will also link to his or her credit cards, hotel occupancy records, and records of travel via aircraft, trains, and high-speed rail trips. It will also record social insurance and other private information. It is called the “One Card for All.” All of the information recorded in the ID card will be linked to the national public security system’s internal database and will be available for thousands of police officers nationwide. They will be able to access the database to check on anyone at any time. One part of the content in the 21 regulations was called "Advice on Strengthening the Social Security Protection System." The General Office of the Central Committee of the Chinese Communist Party and the General Office of the State Council of the People’s Republic of China recently issued the policies to establish the system. 
In addition, the 21 regulations emphasized that the overall TV monitoring system coverage will increase in public places. Under the new stability maintenance policies, the authorities will be able to watch Mainland Chinese citizen’s very closely. 
Source: Mingpao, April 14, 2015
http://tinyurl.com/oucuq4g
Briefings | | |   Government/Politics

Communist Youth League to Recruit 10 million Volunteers for Cyber Civilization

The Central Committee of the Communist Youth League (CYL), the Chinese Communist Party’s youth organization, issued a directive in February of this year, requiring its nationwide subordinate organizations to recruit 10.5 million "young volunteers for cyber civilization" by the end of June. The date of the issuance was February 13, 2015. The title was, "The notice of the Communist Youth League about establishing teams of young volunteers for cyber civilization on a large scale, and advancing the operations of young volunteers for cyber civilization."
The document was issued to all CYL committees in provinces, autonomous regions, and municipalities, CYL committees at national railway and civil aviation authorities, organs under the Chinese Communist Party’s Central Committee, CYL’s working committees at central government agencies, and large state-owned enterprises.
According to the Notice, these "young volunteers" are in charge of promoting positive energy online, and actively participating in the CYL Central Committee’s "Sunshine posting" operations, as well as pro-actively resisting negative energy in cyberspace. They are required to participate in at least three major activities in 2015.
The 10.5 million volunteers include four million from Chinese colleges and universities. Every higher education institute is required to submit the number of its volunteers. For example, Guangzhou based Sun Yat-sen University is supposed to supply 800; a demand was made that mainland campuses of The Chinese University of Hong Kong and the Hong Kong Baptist University must provide 800 and 100 each.
Source: BBC Chinese, April 7, 2015
http://www.bbc.co.uk/zhongwen/simp/china/2015/04/150407_china_youth_internet
Briefings | | |   Information/Technology

China Launches an Upgraded Satellite for BeiDou System

A Long March-3C rocket carrying a new-generation satellite for the BeiDou Navigation Satellite System (BDS) left the Xichang Satellite Launch Center in southwest China’s Sichuan Province on Monday, March 30, 2015. China launched an upgraded satellite into space for its own global navigation and positioning network at 9:52 p.m. Beijing Time. It is the 17th satellite for the BDS. The official Xinhua news reported that the launch marked the beginning of the expansion of the regional BDS to global coverage.
According to the center, the latest satellite is tasked with testing a new type of navigation signaling and inter-satellite links, providing the basis to start building the global network.
China launched the first BDS satellite in 2000. The BDS began providing positioning, navigation, timing and short message services to civilian users in China and surrounding areas in the Asia-Pacific in December 2012.
Source: China News Service, March 31, 2015
http://www.chinanews.com/gn/2015/03-31/7170962.shtml
Briefings | | |   Defense/Military

Supreme Court’s New Charge against Zhou and Bo

For the first time, the Supreme People’s Court has  accused disgraced top cadres Zhou Yongkang, Bo Xilai, and others of engaging in political activities "not approved" by the Communist Party. The claim was made in the court’s annual work report, published on Wednesday. The report said that court staff should "clearly recognize the serious damage" that Zhou, Bo, and others caused. They "trampled on the rule of law, undermined the Party’s solidarity, and engaged in political activities [not approved by the Party]."
According to Zhuang Deshui, a scholar at Beijing University, the new term of "political activities not approved by the party (非组织政治活动)" tells two things: first, these political activities are illegal; second, these activities do not conform to the formal procedural requirements of the Party. It’s like the Gang of Four, who established a small interest group to gain political power and influence over the public.
Zhang Xixian, a Central Party School professor, believes that political activities usually involve political principles and political directions. Political activities not approved by the Party should refer to political activities that are the opposite of the direction of the Party’s organizational principles, and even in violation of the Party’s policies. They exhibit anti-Party characteristics in that they betray the Party’s ideals.
Source: Beijing Youth Daily, March 19, 2015
http://epaper.ynet.com/html/2015-03/19/content_122619.htm?div=-1
Briefings | | |   Government/Politics

Chinese Official Acknowledges the Economic Data Fraud

At a session of the recent Chinese People Consultative Conference in Beijing, Dong Dasheng, former Deputy Auditor General of the National Audit Office, talked about serious economic data fraud. Dong quoted a local official who said, "In the past few years the numbers were made too high. If the number is lowered (to match the reality) at once, it will (look like) a fall off the cliff. We have to digest the numbers over the years."
The issue of Chinese economic data fraud has been a widespread concern. This is the first time a former Chinese official has publicly acknowledged the problem.
As economic growth has been the main measure of performance evaluation of local governments, the GDP growth rate fraud is a very common problem. According to the Anbang Insurance Group, local data fraud includes not only foreign investment, but many areas such as GDP data, tax revenue, and investment. For example, tax revenues in many local governments saw a serious decline in 2014 and some places even had negative growth. In order for the numbers to look good, (local officials) would make adjustments in statistical definitions and the basis of comparison. Some simply cooked the numbers.
Source: BBC Chinese, March 4, 2015
http://www.bbc.co.uk/zhongwen/simp/china/2015/03/150304_cn_economic_data 
Briefings | | |   Economy/Resources