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YouTube Recording on Beijing’s Ruling Crisis

On September 8, an audio recording discussing Beijing’s handling of the U.S.-China trade war was posted on YouTube.

It is not clear who made the speech. The tone indicated it was from an official with some insider information. The time may have been in May of this year, after President Trump announced a 25 percent tariff on US$200 billion worth of goods imported from China and before he announced a tariff on the remaining US$325 billion in goods. Despite the time, the points in the speech are still relevant.

Tariffs

“When the U.S. imposes tariffs, we have many ways to balance it out, such as printing more money or reimbursing the tariff to the exporting companies. However, the biggest problem is that the foreign companies will no longer stay in China. They will move to Vietnam, Thailand, or other countries to maximize their profits.

“The foreign companies’ departure will leave 45 million Chinese who work there jobless. The state-owned enterprises cannot absorb such a big population. Chinese export companies will also be finished. A total of 80 million people will have no jobs. They all have mortgages. What kind of problem will that bring to China?

“The employment problem is tied to the financial crisis and the real estate crisis. These two crises are the ruling party’s ruling crisis. An economic hard landing will bring a dramatic impact to China.”

Economic Structure

“Liu Shiyu, former head of the Securities Regulatory Commission, is the head of the All China Federation of Supply and Marketing Cooperatives. He is setting up Supply and Marketing Cooperatives (SMCs) in each province. SMCs (were popular during the planned economy and) disappeared after the reform and opening up, but they are coming back. The goal of setting up SMCs is to let the government conduct unified purchases and unified sales.

“The higher levels have already arranged to use the planned economy to manage China’s weakening and hard-landing economy. The economic structure will go back to being a planned economy. There will be no way to start a private business.”

New Currency

“Another way is to print new money and recycle the old currency. This will force people who hide money under their mattresses to bring their money out for exchange.

“There are two concepts: One is that the renminbi is just a piece of paper, not real wealth. The other one is that people’s wealth (in banks) is the government’s liability. If the government wants to reduce its debt, it can evaporate the stock market or evaporate the real estate market.”

High-Level Fighting

“Whatever we do will not change the fundamental situation in China because the high-levels are conducting fierce in-fighting. There are three forces fighting each other. Among them, one group opposes the planned economy, but whether it can win out is not clear.”

Trade Negotiations

“Many of the (new) opening measures are just to fool the Americans in China’s trade negotiations. Actually, even if the negotiations reach agreement, (China) may not honor these measures. When have the Chinese honored their words? You think that the government issues an order then it becomes effective? No way…”

Source: YouTube, September 8, 2019

Briefings | | |   Economy/Resources Government/Politics US-China Relations

Canadian Media: Former Canadian Politician Sides with Beijing to Blame Hong Kong Protesters

A Canadian newspaper, The Globe and Mail, reported that Michael Chan (陈国治) has repeatedly aligned himself with the Chinese Communist Party’s (CCP’s) view to blame Hong Kong Protesters. Chan was a former Canadian MPP and Ontario cabinet minister. He served between 2007 and 2018 and was in charge of the province’s immigration and international trade.

Chinanews, a Chinese state-backed news site, recently interviewed Chan. He condemned Hong Kong protesters, claimed there is foreign force behind them, and applauded the Hong Kong police “for showing restraint during the crisis.”

“I have been thinking, why are these young people so radical, so passionate [and] committed to do these things? Also, why are there so many people?”

Chan said another party instigated and brainwashed the protesters. “If there were no deeply hidden organization in this, or deeply hidden push from the outside, there would be no way that such large-scale turmoil could happen in Hong Kong in just a few months.”

Chan also said the violence in the movement in Hong Kong has been severe and if there were similar unrest in Western countries, the police would have “already fired bullets toward the crowds.”

While protesters have accused Hong Kong police of an excessive use of force, Chan stated, “It is just the opposite.” He said the restraint and courage of the Hong Kong police should be praised.

This was not the first time Chan publicly supported China’s stand on the Hong Kong issue. Last month, Chan spoke at a rally in Markham, Ontario, expressing support for the Hong Kong police, the government, and Beijing.

Some Chinese Canadians said Chan’s remarks sound like the Chinese regime’s propaganda. “It’s very clear that he is not using Canadian values nor is he using the universal values of Western democracies in making all these comments. Rather, he abides by the values of the Chinese Communist Party. That is troublesome.”

The Canadian Security Intelligence Service (CSIS) worried that Chan might have been under Beijing’s influence in the past.

In 2010, a senior CSIS official met Ontario’s premier Dalton McGuinty to formally caution him about Chan’s conduct and the risk of foreign influence. McGuinty dismissed the concerns as baseless and kept Chan in the cabinet. The next Ontario premier Kathleen Wynne also dismissed the concerns.

Sources:
1. Chinanews, September 1, 2019
http://www.chinanews.com/ga/2019/09-01/8943837.shtml
2. The Globe and Mail, September 15, 2019
https://www.theglobeandmail.com/canada/british-columbia/article-former-ontario-minister-sides-with-beijing-pins-hong-kong-protests-on/

Briefings | | |   Geo-Strategic Trend Government/Politics

China’s State Media Took on Li Ka-shing

After the Hong Kong Real Estate Tycoon Li Ka-shing asked that the administration be lenient toward “the future owners of Hong Kong,” China’s state media blamed him for creating the housing crisis in Hong Kong. One observer thought this might indicate that Beijing is aiming at the wallets of the Hong Kong business elites to help it get through the current economic crisis.

In the past, Li Ka-shing remained low-key on the Hong Kong issue. His son Richard Li Tzar Kai presented a position statement. After pro-CCP gangsters severely cut a news reporter from the Hong Kong Economic Journal, Richard Li, who owns the newspaper, stated that he would cover all of the medical expenses and rehabilitation treatment for the staff and called for the police to bring the gangsters to justice.

Recently Beijing demanded that the Hong Kong business community express their support for Beijing and the Hong Kong government. Li Ka-shing put ads in newspaper, but people felt the ads could be interpreted as either pro Beijing or pro Hong Kong protesters.

On September 8, Li Ka-shing said at a prayer meeting that he wishes the young people be considerate about the big picture and the administration be lenient toward the future owners of Hong Kong. “Though there can be conflicts between the Law and the human feelings, on political issues, if (people) can think about the other party, many big issues can turn into smaller ones.”

On September 12, China’s state media fired at Li.  The Chang’an Sword, the pen name of the Chinese Communist Party’s (CCP’s) Political and Legal Affairs Committee (PLAC), published an article titled “Li Ka-shing Spoke – Who Should Be Lenient toward the Hong Kong People?” The article stated that “a few future owners of Hong Kong illegally gathered on the street, beat the passengers, attacked the police, lit fires, … (They) created much violence.” “(Being lenient to these people) is nothing more than conniving in their crime. This is not thinking for Hong Kong, but it is watching Hong Kong slip into an abyss.”

It then said that people questioned Li Ka-shing on Internet postings. During the Asian financial crisis in 1997, Li Ka-shing continued to request the small businesses to pay back their debts. “Why didn’t we see you be lenient toward Hong Kong citizen then?”

It further blamed Li Ka-shing and other real estate businesses for hoarding land in Hong Kong and thus created the extremely-high housing prices in Hong Kong. It suggested that the government should develop more affordable housing to improve people’s living standards. “Don’t know if those real estate businessmen, like the richest man Li, will be ‘lenient’ toward the Hong Kong people this time? Will be ‘lenient’ toward the future owners of Hong Kong?”

The People’s Daily also published an article on the Tencent QQ site, titled “Hong Kong Can No Longer Wait to Solve Its Housing Problem!” It said that a large reason that many young people who were not interested in politics got involved in the past three months was because they felt that they cannot control their future. Unaffordable housing prices in Hong Kong are a key reason.

It suggested that the government can follow the Land Resumption Regulation, to use its administrative power to take the land back from private owners. “According to the Basic Law, the compensation for the acquisition of land ‘is equivalent to the actual value of the property at the time.’ The private owner will be paid.”

“For the sake of the people, for the sake of their living, it is time for the real estate developers to show their maximum good will. They should not just think for themselves and grab the last penny they can get. What is it to be responsible to the future of Hong Kong? What is it to be ‘lenient’ to the young people of Hong Kong? This is.”

Reuters quoted a source on September 13 that said Beijing has recently gathering the top executives of nearly 100 State-Owned Enterprises (SOEs) and asked them to increase their investment in the real estate, retail, and tourism industries in Hong Kong and gain control over Hong Kong companies.

One SOE representative told Reuters, “Hong Kong business elites have done way too little (this time). Most of them don’t belong to (our side).”

A China issues expert commented that the CCP’s taking on Li Ka-shing has a deeper meaning. Beijing’s foreign reserves will be depleted soon. How to quickly gather foreign money has become an urgent issue for the CCP to extend its life. Hong Kong companies might become the CCP’s target for their money pool.

Sources:
1. Epoch Times, September 13, 2019
http://www.epochtimes.com/gb/19/9/13/n11519711.htm
2. SINA, September 12, 2019
https://news.sina.com.cn/c/2019-09-12/doc-iicezzrq5484878.shtml
3. QQ, September 12, 2019
https://new.qq.com/omn/20190912/20190912A0NVAA00.html

Briefings | | |   Economy/Resources Government/Politics

CNBC Invited Host of the CCP’s Overseas Propaganda Network to Appear on U.S. Television

Liu Xin, the host of a talk show on the China Global Television Network (CGTN) was interviewed on CNBC’s “Squawk on the Street.” The interview was then broadcasted on the U.S. cable network on September 3, to “provide the perspective of the Chinese” on the ongoing Hong Kong protests and the U.S.-China trade war.

The Chinese Communist Party’s (CCP’s) mouthpiece China Central Television (CCTV) launched CGTN on December 31, 2016, to promote the CCP’s view overseas.

Liu made her name in the U.S. by attacking Trish Regan, the Fox Business Network host, who criticized China on the U.S.-China trade war. Trish invited her for a live debate on television, which turned out to be a “dialog” between the two hosts.

In CNBC’s interview, Liu called a portion of the Hong Kong protesters “rioters” and “offenders.” “We see the violence they are committing.” “We see the destruction they are inflicting on public property, and the interruption of the daily lives of the Hong Kong people, shutting down the metro and disrupting the airport.”

Liu didn’t mention how the police used brutal treatment against the protesters; nor did she mention allegations that they directly beat the protesters and supported gangsters in beating the protesters. She fell short of mentioning that Beijing has been ignoring the Hong Kong people’s appeals and taking a hard line position against them, which has caused the escalation of the situation.

On the trade war, Liu criticized the U.S. for raising tariffs on Chinese imports, saying that it’s “not the right direction for talks to resume.” “It really depends on whether the United States is able to show sincerity and to show good faith that it really wants to have a trade deal.”

Robert Spalding, a former National Security Council official and senior fellow at the Washington-based think tank Hudson Institute, told The Epoch Times that the CNBC interview was “bizarre.” He added that he has never seen a representative from Chinese state media be interviewed as a commentator on U.S. television.

Spalding said that Liu’s interview indicated that the Chinese regime was hoping [with the help of CNBC] to spread the CCP’s view to the world.

Source: The Epoch Times, September 4, 2019
https://www.theepochtimes.com/host-of-chinas-overseas-propaganda-network-gets-airtime-on-cnbc_3069060.html

Briefings | | |   US-China Relations

CNA: State Council Urges Local Governments to Complete Issuance of Special Bonds by September

The Central News Agency in Taiwan reported that, to avoid a big economic downfall, the State Council of mainland China has urged local governments to expedite the issuance of special bonds, which the governments use to raise money for special projects.

Prime Minister Li Keqiang held an executive meeting on September 4. He announced that, in order to further increase investments, local governments must complete the issuance of special bonds by the end of September and allocate funds to those projects by the end of October.

These bonds are for projects on transportation, infrastructure development, and medical care areas, and are not allowed to be used for real estate projects or repayment of matured bonds.

Depending on the needs of major projects, local government can use the special bond quota planned for the year 2020 in this year.

Source: CNA, September 8, 2019
https://www.cna.com.tw/news/acn/201909080099.aspx

Briefings | | |   Economy/Resources

China’s Former Central Banker Suggested Renminbi Globalization to Solve World Market Problem

On August 10, 2019, at a 40 person forum on China’s financial system, Zhou Xiaochuan, the former Chairman of China’s People’s Bank, stated that trade protectionism, the development of modern technology, and currency-based economic sanctions have caused significant twists in the global market system.

Zhou pointed out that the first global market twist came from trade conflicts between countries. A trade war can last a long time and cause obvious twists in the distribution of global resources.

The second one is due to the development of technology. Some IT companies pursue a “winner takes all” or “winner takes the biggest share” result. They therefore burn a tremendous amount of money to claim that market share and increase traffic. Zhou suggested fair competition as the solution.

The third one is that the U.S., due to its control of the U.S. dollar, uses currency as its means to impose economic sanctions. Zhou argued that the globalization of the Renminbi will solve this problem.

Source: Sina, August 11, 2019
https://finance.sina.com.cn/money/bank/yhpl/2019-08-11/doc-ihytcern0062585.shtml

 

Briefings | | |   Economy/Resources

Foreign Ministry Spokesperson: U.S. Is Liable for Its Fentanyl Problem

At its regular press conference on August 26, 2019, China’s Foreign Ministry Spokesperson Geng Shuang blamed the U.S. for its fentanyl problem. From the supply and demand theory, Geng indicated that the fault is the result of the U.S. demand. He argued that implicitly it is not the result of China’s supplying such a drug.

The question asked was: “US President Trump tweeted on August 23 that he has ordered American delivery companies to search for fentanyl in all packages from China and block any deliveries that contain such substances. FedEx, UPS, and the U.S. Postal Service said they began taking measures to prevent drug traffickers from using their services following President Trump’s instruction. I wonder, what is China’s comment?”

Geng gave a lengthy answer, including the statement, “As laws of basic economics tell us, demand and supply come hand in hand. Supply dries up when there is no demand. In the U.S., people tend to abuse prescription painkillers. The American people, accounting for only five percent of the world population, consume as much as 80 percent of the world’s total opioids. The U.S. government can by all means intensify its efforts to reduce the demand for fentanyl.”

Source: China’s Foreign Ministry website, August 26, 2019
https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1692042.shtml

Briefings | | |   US-China Relations

People’s Daily Weibo Account Quoted CY Leung’s Article on Hong Kong

Xiakedao, the Weibo account of People’s Daily, republished an article by Leung Chun-ying (CY Leung), who the Chinese Communist Party hand-picked as the Chief Executive of Hong Kong from 2012 to 2017. Leung argued that Beijing can use many forces, either regular or unconventional, to put down the Hong Kong movement.

CY Leung made the following points:

1. We need to have the right strategic judgment. The movement is no longer a peaceful demonstration. It is using violence and other illegal means to paralyze the society and create a regime change in Hong Kong. It will then make Hong Kong independent of China and the “subversion base” to replicate violence in mainland China.

2. We need to have the right strategic positioning. However the situation in Hong Kong is, nothing can change the fact that Hong Kong is part of China; nor can it change that China possesses tremendous political, foreign diplomatic, military, and economic power in the world.

3. We need to have strategic confidence. The Hong Kong government, pro-China politicians, and the business community must have confidence in the Central government and the Hong Kong government. They should not worry and surrender.

4. We need to have a comprehensive strategic plan. The Hong Kong government and the Central government have a whole set of political, administrative, fiscal, legal, and military tools, including many forces that they can use but have not yet used.

When it is necessary, besides the forces in Hong Kong, the Central government also has many more powerful forces outside. We should mobilize every regular and unconventional force inside and outside of Hong Kong and plan well the short, mid-term, and long term actions.

5. The Chinese idiom goes, “During a confrontation in a narrow passage, whoever is the bravest will win out.”

Source: Sina, September 01, 2019
https://news.sina.com.cn/c/2019-09-01/doc-iicezzrq2653635.shtml

Briefings | | |   Government/Politics