Skip to content

All posts by TGS

Chinese Economist Banned from Weibo Due to Comments on Financing Childbirths

China has banned the Twitter-like Weibo account of Ren Zeping, an Internet celebrity, and a former economist in mainland China. Ren was also the chief economist for Evergrande China Group, one of China’s largest real estate developers, which is now mired in debt.

At the top of Ren’s Weibo account, the notice said he had “violated relevant laws and regulations.”

What had Ren posted on his Weibo account?

On January 10, 2022, Ren posted an article titled, “The Solution to Findings of Low Fertility — The China Fertility Report.” His article stated that the main reasons for low fertility are the high cost of raising children and high housing prices. Therefore to solve the low fertility rate, China must reduce the cost of raising children. Ren believes that establishing a fertility incentive fund may stabilize growth and boost domestic demand in the short term. It can improve the supply side, optimize the population structure, and help national rejuvenation in the long run.

In his post, Ren suggested that the central bank print 2 trillion yuan (US$314 billion) to support the birth of 50 million babies over the next ten years.

Why 2 trillion yuan? Ren explained that family social welfare expenditures related to childbirth incentives account for two to three percent of GDP in OECD countries OECD stands for the Organisation for Economic Co-operation and Development. It is is an international organisation that works to build better policies for better lives. China’s GDP is 110 trillion yuan, so Ren believes the incentive fund should be 2 trillion yuan.

Ren’s figure of 50 million childbirths for ten years is an estimate based on the assumption that 15 million babies are required annually to stabilize the population. There are about 10 million per year using the 2021 low fertility rate of 1.1 percent. So 5 million per year for ten years is 50 million in total.

Ren also urged the authorities to establish the fund as quickly as possible. “We must seize the time when we can still have children from those women born from 1975 to 1985 because they still believe that having more children is a blessing. He reminded that the post-90s and post-2000s generation would not want to discuss having a second or third child. Many people are not even willing to get married.

Why was he banned on Weibo? Some speculated that Ren might have hit a nerve with the authorities. The economic strategy proposed by Ren reflects an unspoken consensus among Chinese economists; that is, the regime’s economic model may have come to an end. The regime has tried to control the high housing prices. In the past, China’s inflation and debt risks were mainly absorbed by real estate. Printing money for more childbirths now would likely increase prices and be suicidal. It could push the Chinese economy further into a recession.

Source: sina.com, January 10, 2022
https://finance.sina.com.cn/zl/china/2022-01-10/zl-ikyakumx9364507.shtml

2021: More Small Businesses Folded Than Opened

China has issued updated guidance for businesses that wish to close their doors. In 2021, for the first time in twenty years, small business closures exceeded new openings .

On December 29, 2021, five state agencies jointly issued the “Guidelines for Enterprise Deregistration (Revised in 2021).” The five state agencies are the State Administration for Market Regulation, the Ministry of Human Resources and Social Security, the Ministry of Commerce, the General Administration of Customs, and the State Administration of Taxation.

Before a business officially terminates, the Guideline requires the company must declare its dissolution, establish a liquidation team, liquidate its property, pay taxes, clear up debts, and pay employee wages and social insurance. After the liquidation, the business can deregister and ceases to exist.

The authorities updated the deregistration guideline after the time when many small businesses folded in 2021.

According to the South China Morning Post, in the first 11 months of 2021, about 4.37 million Chinese small and micro businesses closed their doors. That was more than three times the number of small and micro enterprises that opened in the same period.

On average, more than 390,000 small and micro businesses deregistered each month in 2021, compared to 370,000 in 2020. The deregistration in 2021 also outnumbered new registration for the first time in 20 years.

It is predicted that the 2021 annual deregistration is likely to exceed the all-time high of 4.45 million in 2020. The 2020 number almost doubled that of 2019, and the 2019 number was about ten times that of 2018.

Small and micro businesses are an important foundation of China’s national economy, accounting for half of China’s tax revenue, 60 percent of GDP, and 80 percent of urban employment.

Sources:

China Central TV, December 29, 2021
https://news.cctv.com/2021/12/29/ARTIl4ZXOwvvYGcfrkqwHLUp211229.shtml

Zaobao.com, December 31, 2021
https://www.kzaobao.com/shiju/20211231/107661.htmlthe

China’s Banks Closed 2,500 Outlets in 2021

According to the 21st Century Business Herald, bank outlets in China have been shrinking rapidly. Based on the China Banking and Insurance Regulatory Commission’s statistics, as of December 24, 2021, a total of 2,459 bank outlets of commercial banking institutions ceased operations this year. On December 24, 2021 alone, 29 commercial bank outlets closed their doors. The 21st Century Business Herald attributed the closures to the rapid development of digital technology.

Statistics from the China Banking Association show that, from 2018 to 2020, the number of outlets in the Chinese banking industry declined for three consecutive years, and the number of outlets that closed last year also approached 3,000. These closures include many outlets that had been in business for more than 30 years.

Semi-annual reports of banks also show signs of the decline of outlets. In the first half of 2021 alone, the four major state-owned commercial banks, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, and the Construction Bank, reduced 187 outlets or branches.

Behind the dramatic reduction in outlets comes the downsizing of bank staff. Comparing the data from the 2021 semi-annual and 2020 annual reports, the number of employees in the four major state-owned commercial banks decreased by 22,355 in the first half of 2021.

The  21st Century Business Herald said that, along with the outlet closures, the ability of banks to absorb deposits has declined significantly. At the same time, office rent, labor, and IT hardware maintenance have also risen due to competition, adversely impacting the profitability of bank branches.

Source: 21st Century Business Herald, December 28, 2021
http://www.21jingji.com/article/20211228/herald/e21b20a3c9a0ddd996fe746271c5ab13.html

 

U.S. Mainstream Media Silent on Their Interview of China’s Ambassador to the U.S.

Radio France Internationale reported on December 28 that Qin Gang, the Chinese Ambassador to the United States, recently accepted a joint interview with some mainstream media in the United States. However, in the past few days, there has not been a single media report in the United States on the interview.

According to the official website of the Chinese Embassy in the United States, on  December 20, Ambassador Qin Gang accepted a joint interview with the editors-in-chief and senior reporters of many mainstream media in Washington. The Bloomberg Innovation Economic Forum organized the interview in English in the form of a “fireside chat.”

The Chinese Embassy posted the interview content on its homepage and translated it into Chinese. The article emphasized that “all the content may be reported, and used as a background.” The Chinese media also highlighted Qin Gang’s remarks on Taiwan and how he discussed the United States provoking China on the Taiwan issue.

While the media inside China widely reported the interview, they questioned why none of the U.S. mainstream media reported the interview, including those who participated in the interview. “Why did they collectively lose their voice?” At least one commentator thought that the U.S. media did not want merely to reiterate Qin Gang’s propaganda.

Sources:

Radio France Internationale, December 28, 2021
https://tinyurl.com/2p8wa9t2

ifeng.com, December 29, 2021
https://i.ifeng.com/c/8CNA4TZ5PKR

Chinese Embassy to the United States, December 24, 2021
http://www.china-embassy.org/dshd/202112/t20211224_10475267.htm

 

China Restricts Christmas Gatherings and Bans Online Religious Messages and Fundraising

On Christmas Eve, Chinese government officials banned Christmas gatherings on the grounds of the epidemic. Meanwhile, five state agencies issued new regulations to prohibit online religious information and fundraising in the latest effort to prevent the spread of Western values.

Church gatherings to celebrate Christmas are restricted. The implementation differs in different places. Authorities at some locations may adjust the number of restrictions at any time. If a church has large events on Christmas Eve or Christmas Day, it must report them and obtain prior approval from the authorities.

On December 20, 2021, Rong’an County Education Bureau in Guangxi Province issued a notice prohibiting any “Western Festivals” in primary and secondary schools. Some young people follow Western values and lifestyles, which Western developed countries promote in China using technology. “In accordance with the directives from higher authorities, the Rong’an Education Bureau decided to prohibit teachers and students from organizing any sort of “Western festivals” or celebrations on and off-campus.

Also, on December 20, five state agencies, the State Administration of Religious Affairs, the State Internet Information Office, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the Ministry of National Security jointly issued the “Administrative Measures for Internet Religious Information Services.”

The new regulation, dated December 3, 2021, bans any organization or individual from uploading, publishing, forwarding, or spreading religious content on the Internet. No spiritual information may be provided in the form of text, pictures, audio, or video on websites, applications, forums, blogs, microblogs, public accounts, instant messaging tools, webcasts, or anything related.

“Overseas organizations or individuals and their organizations established in China shall not engage in Internet religious information services in China.”

The new regulation, effective on March 1, 2022, states that the religious groups with an “Internet Religious Information Service Permit” may only use their own websites, applications, forums, and other means, for spiritual information. The religious content must guide people to love the country and abide by the law when doing so. Further, the new regulation prohibits online fundraising for religious groups.

Sources:

1.)  Christian Network, December 22, 2021
http://www.jidunet.cn/article/44/59012.html

2.) Radio Free Asia, December 21, 2021
https://www.rfa.org/mandarin/yataibaodao/shehui/ql1-12222021035030.html

3.) China National Religious Affairs Administration, December 20, 2021
http://www.sara.gov.cn/bmgz/364755.jhtml

State Media Urges Communist Party Members to Have Three Children

The state media, China Report, published an editorial on November 23, 2021, urging Chinese Communist Party (CCP) members to have three children. The original article was removed the next day, and major Chinese media followed suit. Screenshots, however, have gone viral on social media. 

According to the China Report editorial, CCP members have a personal obligation to help tackle the country’s plunging fertility rate by having three children.

Each CCP member is required to “align his thoughts and actions and those of his family with the major decisions and deployments of the Party Central Committee, and proactively and consciously take action to implement the three-child policy.”

“No Party member should use any excuse, objective or personal, not to marry or have children, nor can they use any excuse to have only one or two children,” said China Report. “Every Party member must bear the responsibility to implement the three-child policy for China’s population growth. Every Party member must also fulfill his obligation to grow China’s population.”

To the extent that some Party members can no longer have children due to age, health, and other reasons, the editorial urges them to “actively educate, guide, and encourage their family members or those around them to implement, actively and consciously, the three-child policy.” “You must never ignore or allow your family or people around you not to marry or have children, and you must never ignore or allow your family or people around you to give birth to only one or two children using this or that excuse.”

China Report is a state-owned media under the China Foreign Languages Publishing Administration, also known as the China International Publishing Group (CIPG).   

Source: China Report, November 23, 2021
Screenshot at https://news.creaders.net/china/2021/12/10/2428749.html
Full text at http://huaitu.cn/news/68886.html

China Central Bank Adviser: Common Prosperity Requires Lowering Gini Coefficient

A People’s Bank of China adviser believes that, to achieve Xi Jinping’s common prosperity, China must lower the Gini coefficient, which measures income inequality, to below 0.4. Cai Fang, a member of the Monetary Policy Committee of the central bank, made this remark at a forum that Caijing magazine  hosted on November 27 and 28, 2021.

Cai stated that China’s Gini coefficient should drop from the current 0.47 to close to 0.4 and, by 2035, it should drop close to 0.35. He added, “If it is higher than 0.4, we cannot say that this is common prosperity.”

Cai, who is also an economist at the Chinese Academy of Social Sciences, said that China needs to reduce inequality through a redistribution of its national income. It should also increase the supply of social welfare and a reduction of the Gini coefficient.  There is “a lot of work to do.” China must use different means and ways of the first, second, and third distribution of national income to build an olive-shaped social structure with middle-income groups as the main body. It is more important to create a public service system covering the entire life cycle of the people.

According to China’s National Development and Reform Commission,  the first distribution of wealth comes through market competition. The second is achieved through taxes, subsidies, and social welfare programs. The third distribution taps enterprises and individuals to redistribute their wealth through voluntary donations.

The Gini coefficient measures the degree of equality in the income distribution of residents in a country or region. A value of 0 means complete equality. According to data from the National Bureau of Statistics of China, China’s income Gini coefficient reached the highest point of 0.49 in 2008 and then fell to 0.47 in 2020. According to OECD estimates this year, the average Gini coefficient in developed countries is 0.314.

Sources:

Sina.com, November 28, 2021

https://finance.sina.com.cn/hy/hyjz/2021-11-28/doc-ikyakumx0712227.shtml

Zaobao, November 29, 2021

https://www.zaobao.com.sg/realtime/china/story20211129-1218123

China National Development and Reform Commission, September 24, 2021 https://www.ndrc.gov.cn/fggz/jyysr/jysrsbxf/202109/t20210924_1297384.html?code=&state=123

China’s Birth Rate Hits a Record: the Lowest in 43 Years

According to the recently released “China Statistical Yearbook 2021,” China’s birth rate in 2020 was 8.52 per 1,000 people. It thus fell below 10 per 1,000 for the first time. This is the lowest rate in the past 43 years. There were 12 million births in 2020, about one-third fewer than the 17.86 million in 2016.

According to the Yearbook, China’s natural population growth rate (birth rate minus death rate) for 2020 was 1.45 per 1,000. This is a record low since 1978. Experts predict that, at the earliest, a negative growth rate is likely to occur during the 14th Five-Year Plan period  i.e., the 2021-2025 period.

In 1987, the birth rate was as high as 23.3 per 1,000, and the natural growth rate that year was as high as 16.61 per 1,000, both of which were historical highs for the period of more than 40 years.

The Chinese Communist Party adopted a law in August 2021 to lessen its control of planned parenthood by allowing three children per couple.

As young people are not responsive to the policy change, at least 12 provinces and cities in China, including Shanghai, Hebei, Henan, Tianjin, Guizhou, Anhui, Shanxi, and Shaanxi, have issued the “Human Assisted Reproductive Technology Application Plan (2021-2025)” The purpose of the plan was to increase assisted reproductive service agencies in order to help infertile couples with artificial insemination.

Among them, Sichuan Province plans to increase the number of institutions in the next five years by 20, Shaanxi Province 10, Anhui Province by 10, Shanxi five, Tianjin two more, and Hebei Province up to five.

At the end of June last year, China had 523 assisted reproductive medical institutions. Among them, there were 56 in Guangdong and 33 in Jiangsu Province. There are 27 medical institutions approved to set up human sperm banks, including two in Beijing, Shanghai, and Henan Province, respectively.

Sources:

1.) China Business Network, November 15, 2021
https://www.yicai.com/news/101229959.html

2.) The Paper, November 21, 2021
https://www.thepaper.cn/newsDetail_forward_15479163