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Huawei Warns to “Prepare for Bitter Days”

Recently, Ren Zhifei, the founder of Huawei, issued two letters to Huawei employees. He warned not to be too optimistic about the prospects for Huawei and that people should prepare for bitter days.

Ren stated that, if they make an assessment that certain business units are not providing much value, they should be cut or the work reduced so as to focus on (more valuable portions). He also said that Huawei should give up some mediocre employees so as to reduce the cost of human resources.

“In the next few years, the whole environment (for Huawei) will not be as promising as we imagined. We should prepare for bitter days.”

He said that, unlike the 4G business that flourished for Huawei, the 5G business may just bloom in some spots, but not on a widespread scale. However, Huawei has 180,000 employees and it pays over US$30 billion in salaries and stock distributions each year. “If we can’t produce as much, how can we get the money to share?”

Source: Sina, January 21, 2019
https://news.sina.com.cn/o/2019-01-21/doc-ihqfskcn9133229.shtml

Briefings | | |   Economy/Resources US-China Relations

Chinese Ambassador Admitted Personal Involvement in Cancelling Shen Yun Performance

Epoch Times reported that, according to a recent investigation, Lu Fan, China’s Ambassador to Spain, admitted that he pressured a Spanish theater into cancelling a performance that Shen Yun Performing Arts had booked with the theater.

“Lu admitted in a phone call, that he personally put pressure on the Royal Theater in Madrid to cancel its contract with Shen Yun Performing Arts. By using the Chinese Communist Party’s (CCP’s) control of the large Chinese market as an enticement, Lu and the theater’s director jointly planned to cancel the Shen Yun performances under the pretext of “technical difficulties.” After the case was reported, Lu and the theater continued planning on how to respond.”

Shen Yun Performing Arts is a New York-based independent performance troupe specializing in classical Chinese dance. Its many companies have tours around the world every year in as many as 130 major cities. It has, for years, been the target of the CCP, which uses Chinese embassies and consulates to try to disrupt the performances. The World Organization to Investigate the Persecution of Falun Gong (WOIPFG), a non-profit organization that investigates human-rights abuses perpetrated against Falun Gong adherents, has been following such incidents.

A WOIPFG investigator, who, posed as a high-level Chinese government official, called Lu Fan directly and got him to reveal the details of how he intervened in Spain. Lu Fan directly called the Royal Theater and requested that it cancel the Shen Yun performance that had been scheduled for January 31 to February 2 this year.

In the investigator’s phone call, Lu admitted that the theater’s general manager was initially reluctant to carry out the embassy’s request because the theater had already sold nearly 900 tickets. “I directly talked to him,” said Lu, “On this issue, you cannot think only about the economic gains, but you also need to consider the politics. You are working with China and have signed the ‘International League of Theaters of the Silk Road.’ There is a great market potential for you to collaborate with China. You should not lose the Chinese market because of (the Shen Yun performance).” China has been promoting the “International League of Theaters of the Silk Road” agreement for exchanges in the field of performing arts as part of its “One Belt and One Road” initiative.

Lu also stated in the call that he worked closely with the theater’s general manager to come up with a good reason (claiming technical difficulty and a time shortage) for cancelling the show. The theater then used that excuse to cancel the performance.

Lu also stated that, after Shen Yun reported the cancellation in a local newspaper, he worked with the theater to come up with responses. “Our initial thought was to avoid making it a hot issue. Stay with the technical reason.”

The recorded phone conversation with Lu Fan is available on the Epoch Times’ website.

Source: Epoch Times, January 28, 2019
http://www.epochtimes.com/b5/19/1/28/n11008988.htm

Briefings | | |   Geo-Strategic Trend Government/Politics

CCP Published Political and Legal Affairs Work Regulations

Recently the Chinese Communist Party (CCP) Central Committee published “Political and Legal Affairs Work Regulations” (Regulations).

Article Ten of the Regulations listed the responsibilities of the local CCP party committee. The first one was to “coordinate the political and legal affairs work that is related to national security, especially the events related to political security whose core is the ruling party’s security and the ruling system’s security.” The second one is to “coordinate social stability work and timely and properly handle important issues or emergencies that will affect social stability.”

Article Eleven stated that a Political and Legal Affairs Committee will be established at the Central Committee, at the local party committee, and at the county level or above. A township or street (in the city) party committee will establish a committee member position for the Political and Legal Affairs work.

Shi Cangshan, an independent China issue expert, commented, “In the past the CCP’s lowest policing structure was the local police station at the township or street level (in the city). Now the Political and Legal Affairs Committee for the first time, is extending itself to that level. This is related to its recent strengthening of communist ideology.” He also felt that it shows the old stability maintenance mechanism is no longer sufficient for putting down public dissatisfaction and protects.

Sources:
1. Xinhua, January 18, 2019
http://www.xinhuanet.com/2019-01/18/c_1124011592.htm
2. Epoch Times, January 22, 2019
http://www.epochtimes.com/gb/19/1/22/n10994697.htm

Briefings | | |   Government/Politics Social Stability

Xiang Songzuo: Four Reasons China’s Economy Slid in 2018

Xiang Songzuo is a Chinese academic and an economist. He serves as the Chief Economist of the China Agriculture Bank and is a professor at the Renmin University School of Finance. He has become known for asserting that China’s GDP growth was only 1.67 percent in 2018.

Recently, Xiang made another speech on the reasons why China’s economy slid so badly in 2018:

First, tightened government financial control caused many companies to face a shortage of capital supply. However, this was not the main reason.

Second, China’s stock market dropped 30 percent and lost 7 trillion yuan (US $1 trillion) in value in 2018. Xiang felt that the scale of the stock market crash in China over the past ten years is comparable to the drop in the U.S. in 1929. Xiang pointed out that, in the past ten years, Chinese companies’ growth has not been based on improvements in technology or growth in profits or assets, but rather on borrowing from banks. He quoted Zhu Yunlai, son of former Primer Zhu Rongji, who stated that China’s total debt exceeds 600 trillion yuan (US $90 trillion). Chinese companies just do not make money. However, this was still not the main reason.

Third, the government’s inclination to eliminate private ownership and expand state owned companies has greatly hurt private companies’ confidence and their incentive to grow. In Xiang’s view, this was the most important reason.

Fourth, the trade war with the U.S. was an external reason.

Xiang also warned that nowadays Chinese have become addicted to playing with debt and high leverage financing. This is actually a mirage and will collapse soon. When all people all of sudden realize that the assets (e.g. real estate property or financial products) that they bought are not worth that much, everyone will try to escape (and avoid big financial losses), but by then nobody will be able to escape.

Briefings | | |   Economy/Resources

YouTube Video Revealed That China’s Economy Went Downhill Dramatically

A YouTube video showed a Chinese person commenting that, in 2018 the economy in Liaoning Province went downhill dramatically. The setting was in a meeting, but the person’s identity is unknown. From the way he talks, he may be a member of the People’s Political Consultative Conference (PPCC) or a government official.

He stated that Shenyang, the capital city of Liaoning, didn’t make its GDP target in 2017 and then its economy slid downhill in 2018 (this means that it didn’t make the 2018 goal either, since Chinese officials always want GDP to surpass the previous year).

“When the PPCC members came (to the meeting), they all lowered their heads and avoided the question of making money this year. There were no such scenes (as in early years) where one said ‘I made 50 million yuan (US $7.5 million)’ and another one said ‘I made 800 million.’”

“I take full responsibility to tell you all, that all I gained in 2018 was only age but no wealth. However much you invested, that is how much you would lose. We now claim (Shenyang) made 1 trillion yuan (US $150 billion) in GDP (in 2018). Dalian city’s economic situation was much better than (Shenyang), but it only reported 700 billion yuan. We shouldn’t give too excessively big a number in our government report.”

Briefings | | |   Economy/Resources

In China, the “Ten Commandments” Are Now “Nine Commandments”

Two months ago, the Chinese Communist Party (CCP) officials demanded that a church in Luoning County, Henan Province remove one Commandment from the list of Ten Commandments.

About 30 officials from the CCP Central Committee’s Religious Inspector Group, the Luoyang City United Front Department, and the Luoning County United Front Department visited the church. They ordered the church to wipe out the first Commandment, “Thou shalt have no other gods before me.”

The priest and believers objected to the demand, but the officials told them that Xi Jinping was against this Commandment and therefore whoever did not follow their orders was committing actions against the state.

It has also been reported that, as the CCP is attempting to create “Chinese-styled Christianity,” the traditional bible is banned from being sold. It has been replaced with a “new version of the bible” that the CCP itself revised. The authorities now require all churches to promote “the Socialist Core Values.”

Source: Radio Free Asia, January 4, 2019
https://www.rfa.org/mandarin/yataibaodao/shehui/gf2-01042019083829.html

Briefings | | |   Government/Politics

China Regulates Blockchain

China published new rules to request blockchain service providers to get the real name of each user and not to publish contents that do not conform to the authorities’ requirements.

The Cyberspace Admission Office issued the “Regulations on the Management of Blockchain Information Services” on January 10, 2019. The regulations will take effect on February 15, 2019.

The Regulations state that the blockchain service provider holds the main responsibility for the safety management of the contents, that it should implement a real ID identification system for its users, that it cannot use blockchain to conduct activities that are prohibited by law or by administrative regulations, and that it cannot produce, replicate, publish, or spread information prohibited by the law or by administrative regulations.

Source: Cyberspace Admission website, January 10, 2019
http://www.cac.gov.cn/2019-01/10/c_1123971138.htm

Briefings | | |   Government/Politics Information/Technology

China Tightened Religious Control

China published a new rule to request blockchain service providers to get the real name of each user and not to publish contents that do not conform to the authorities’ requirements.

On January 10, 2019, the Cyberspace Admission Office issued the “Regulations on the Management of Blockchain Information Services,” which will take effect on February 15, 2019.

The Regulations state that the blockchain service provider holds the main responsibility for the safety management of the contents, that it should implement the real ID identification system for its users, and that it cannot use blockchain to conduct activities prohibited by the law or administrative regulations or produce, replicate, publish, or spread information prohibited by the law or by administrative regulations.

Source: Cyberspace Admission website, January 10, 2019
http://www.cac.gov.cn/2019-01/10/c_1123971138.htm

Briefings | | |   Government/Politics