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China News: Hainan Airlines Group Became the Largest Shareholder of Deutsche Bank

China News recently reported that China’s Hainan Airlines Group increased its investment in Deutsche Bank to ten percent, which made the Airlines the largest shareholder of the largest bank in Germany. The earlier largest shareholder was Blackrock (United States), which held 5.88 percent. The additional investment totaled 3.4 billion euro (US$3.71 billion). The Airlines Group has disclosed the information to the U.S. Securities and Exchange Commission (SEC). Deutsche Bank is listed on the German Stock Exchange and the New York Stock Exchange. It has around 100,000 employees. The Bank had suffered financial losses in 2015 and 2016. The Bank’s spokesperson Christian Streckert refused to respond to the question of whether the bank welcomed the fact that a Chinese company had become the largest shareholder. According to Hainan Airlines Group, the Group has become an investor in a large variety of industries and market sectors, with total assets valued over RMB 1 trillion (around US$144 billion). The Group’s 2016 total income was over RMB 600 billion (around US$86 billion).

Source: China News, May 3, 2017

New Regulations Ban Non-State-Owned Organizations from Internet News Editorial Business

Well-known Chinese news site Sina recently reported that the State Internet Information Office just announced new Regulations for the Internet News Information Services. The new Regulations separated the Internet news editorial business from the Internet news operational business. Only state-owned organizations can conduct the editorial business. Non-stated-owned organizations can republish and redistribute authorized news on the Internet, with the condition that the sources, original captions, original authors and editors are carried over to the republished version. The republished sources of the Internet news must be traceable. The new regulations cover all websites, applications, forums, blogs, microblogs, public social media accounts, instant messaging and direct Internet broadcasting channels. All organizations providing internet news editorial services must first register with the government. These state-owned organizations are required to establish the position of Chief Editor, who will be held responsible for following the regulations.

Source: Sina, May 2, 2017

Oriental Daily: Police Search ICBC’s London Branch

Popular Hong Kong newspaper Oriental Daily recently reported that British law enforcement acknowledged a search of the London branch of the Industrial and Commercial Bank of China (ICBC). The search was part of an investigation of money laundering and tax evasion activities that Chinese criminal organizations had been operating. The British Financial Conduct Authority (FCA) refused to comment. ICBC refused to respond either. EU officials suspected that, since 2013, some Chinese criminal groups had illegally imported goods into EU countries via Britain. The total damage to the EU was estimated at around 42.5 billion euro (US$46.38 billion). Spanish police searched ICBC’s Madrid Branch last year. The Luxembourg authorities also searched ICBC’s EU Headquarters. ICBC ranked number one in China’s banking industry in terms of corporate loans and corporate deposits. Oriental Daily has been Hong Kong’s number one newspaper in circulation since 1976, with a record readership of over 3,100,000.

Source: Oriental Daily, April 27, 2017

LTN: 2017 Press Freedom Index Put Mainland China Near the Bottom

On April 16, major Taiwanese news media, Liberty Times Network (LTN), reported on the 2017 Press Freedom Index that Reporters Without Borders recently released. Taiwan was ranked number 45, a 6-step improvement from last year’s rank. Taiwan’s rank is now at the top of Asia. The five countries at the bottom of the global list are China, Syria, Turkmenistan, Eritrea, and North Korea. According to Reporters Without Borders, the ranking was based on assessments in multiple categories like media diversity, the degree of media independence, and reporter security. Reporters Without Borders pointed out that freedom of the press has never faced such a threatening level as it does today. Even in democratic countries, press freedom is becoming more and more fragile. Reporters Without Borders also announce that the organization is giving up on Hong Kong and decided to move its Asian branch office to Taiwan. In the 2017 report, the top five countries are Norway, Sweden, Finland, Denmark, and the Netherlands. The United States is ranked at 43 and Hong Kong is 73.

Source: Liberty Times Network, April 26, 2017 China’s Pension Fund Individual Accounts Face the Risk of Collapsing recently reported that Tsinghua University just released a study report on China’s Pension Fund Individual Accounts, which are facing more and more serious financial risks. The Tsinghua Report assessment showed the risk level is at Level Three (the top risk level is Four). The Report found that the Pension Fund Individual Accounts currently has “empty accounts” valued at RMB 4.7 trillion (around US$684 billion). The current pension payments are paid out of “accumulated balances” which are only at the level of RMB 3.5 trillion. At the current pace, the Report expects the accumulated balance to be fully consumed in the near future at which point the entire pension system may collapse. The cause of the imbalance was the difficulties that occurred in the national level process of balancing among wealthy and poor regions. The general expectation now is to put hope in the central government to supply money to fill up the black hole. The pension investment funds have not been performing well in the market and spending consistently exceeds income. The Tsinghua Report found that the current model is not sustainable.

Source:, April 25, 2017

Caixin: Social Structure Study Found China’s Middle Class Collapsing

Well-known Chinese financial news media group Caixin recently reported that a recent professional social structure study called, “The Middle Class Transition Tier and The Edge Tier” found that 19.12 percent of China’s population is Middle Class. Of those, 73 percent are very close to the borderline that divides the Middle and the Lower classes. The study was based on a model established under the International Socio-Economic Index of Occupational Status (ISEI). The sample size was 683,291 employed people who are between the ages of 16 and 64. In addition to the Middle Class, China has an Upper Class of 5.62 percent of the population and a Lower Class of 75.25 percent. In the Lower Class, 4.4 percent (of the entire Chinese population) was in the “Transition Tier” that is very close to the Middle Class line, and in the Middle Class, 13.9 percent was in the “Edge Tier” that’s slightly above the same dividing line. The entire population’s 13.9 percent is 73 percent of the Middle Class population. The study also found that the bigger a city is, the more people are in the Middle Class Edge Tier. In cities with more than 10 million residents, 25.35 percent of the city’s population is in the Middle Class Edge Tier.

Source: Caixin, April 17, 2017

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