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China Adopts Anti-espionage Regulation Targeting “Hostile Forces”

On April 26, 2021, China’s Ministry of State Security released a new anti-espionage regulation, which was to be effective immediately. The regulation allows the national security authority to draw up lists of companies and organizations susceptible to foreign infiltration, treating a broad range of entities, including potentially universities and private businesses, as if they are sensitive government agencies.

The regulation specifies that agencies, social groups, enterprises, public institutions, and other social organizations are primarily responsible for the unit’s anti-espionage security work.

On April 26, 2021, officials from the Ministry of State Security explained to the press, “Overseas espionage and intelligence agencies and hostile forces have intensified their infiltration into China, with more diverse methods and in broader fields, which pose a serious threat to China’s national security and interests.”

At the same time, “the core and vital areas still have issues such as which organizations bear the primary responsibilities for anti-espionage security and prevention measures that are not institutionalized.”  Officials from the Ministry of State security said that the regulation clarifies “what, who and how” to guard against foreign espionage.

According to the regulation, the Ministry of State Security will provide companies and organizations susceptible to foreign infiltration with work manuals, guides, and other publicity and education materials. The authorities will also issue written guidance, organize trainings, hold work meetings, and supervise anti-espionage work using different methods such as reminders and advice.

Under the regulation, the companies, organizations, or social groups have the responsibility of rolling out detailed measures against foreign espionage. The measures identified in the regulation include arranging their working staff to sign letters of commitment before taking up posts, reporting their activities related to national security, briefing personnel ahead of their trips overseas, and interviewing them after their return to China.

Sources:
1. People’s Daily, April 26, 2021
http://legal.people.com.cn/n1/2021/0426/c205462-32088423.html

2. Xinhua, April 26, 2021
http://www.xinhuanet.com/2021-04/26/c_1127376250.htm

Bank of China: Economic Slowdown in the Next 30 Years Due to Demographic Transition

The Bank of China, the central bank of the Chinese Communist Party (CCP), recently published a paper dated March 26, 2021. The paper warned that the aging population and declining birthrate are more severe in China than in developed countries and that China will face far more severe challenges for a long time into the future.

China’s economic growth will slow down.

First, there will be a reduction in the working population. China’s economic growth has been under the reform and opening up of production.  A demographic dividend transformed China’s economic growth. Since 2010, the Chinese economy has entered a new norm with declining potential output, directly caused by the decline in the labor force. It is estimated that from 2020 to 2050, the working population will decrease year by year at a rate of more than 0.5 percent and by 2050 it will have dropped by 15.2 percent compared to 2019. In 2010 the working population was 74.5 percent of the total population By 2019, it fell to 70.6 percent. It will be 64.6 percent by 2035 and 59.8 percent by 2050.

Second, the burden of elderly care is growing. The elderly dependency ratio, the ratio of the elderly population (ages 65+) per 100 people of working age (ages 15-64), will reach 36 percent. It was 17.8 percent in 2019 and is expected to be 32.0 percent and 43.6 percent by 2035 and 2050, respectively. If calculated based on retirement at the age of 60 (that is, no delay in retirement), the elderly dependency ratio will rise to 49.8 percent and 67.6 percent, respectively. It means one worker will need to support 0.5 and 0.7 elderly, respectively. Further, government pension expenditures as a proportion of GDP have risen rapidly. They were at 5.3 percent in 2019, an increase of 4.5 percentage points from 1990. As the old-age dependency ratio increases in the future, this expenditure will continue to rise.

Third, China will face low growth, low-interest rates, low inflation, and high debt. China’s demographic transition means that more people are consuming and fewer people are producing, which leads to economic stagnation, weak consumer prices, and declining asset prices. It will be very similar to the current situation of low growth, low-interest rates, low inflation, and high debt in Japan, Italy, and other countries. Moreover, the situation in China may be more difficult because of the faster population transition, with a growing aging population and declining birthrate.

The central bank paper said, “The economic gap with the United States will continue.”

The paper continued, pointing out that while China is facing the acceleration of its aging population and a declining birth rate, the U.S. population is undergoing favorable changes due to immigration and other reasons.

While the population in China is declining, the United States’ population is increasing. The United Nations predicts that, by the year 2050, the United States’ population will increase by 50 million, compared to 2019, an increase of 15 percent, while China will decrease by approximately 32 million in the same period, a decrease of 2.2 percent.

Fourth, China’s working population has been decreasing while the U.S. working population has been increasing. It is estimated that in 2035 and 2050, the size of China’s working population will drop by 4.6 percent and 15.2 percent from 2019, while the United States will grow by 2.4 percent and 7.7 percent, respectively, for the same periods. In terms of the ratio between the working population and the total population, China and the United States were 70.6 percent and 65.2 percent, respectively, in 2019. China will be 5.4 percentage points higher than that of the United States; in 2035, the gap will be reduced to 3.2 percentage points; in 2050, China will be lower than the United States by 1.3 percentage points.

Fifth, China’s elderly care burden is increasing faster than that of the United States. In 2019, China’s elderly dependency ratio was 17.8 percent and the United States was 24.8 percent, and China was seven percentage points lower than the United States. In 2035, the two countries will be basically the same. In 2050, China will be seven percentage points higher than the United States.

Sixth, China’s population structure will be very different from that of the United States. By 2050, China’s population distribution will be narrower at the bottom with fewer children and a shrinking working population in the middle, but wider at the top with a larger elderly population. For the United States, the bottom and middle of its population structure will be much wider, showing more young people and more working-age people. The top will be narrower, showing a smaller elderly population.

The central bank paper asked, “If, in the past 40 years, China had been able to narrow the economic gap with the United States by relying on cheap labor and substantial demographic dividends, then what would China rely on in the next 30 years?”

Sources:

1. Bank of China, March 26, 2021
http://www.pbc.gov.cn/redianzhuanti/118742/4122386/4122692/4214189/4215394/2021032618473569432.pdf

2. China.com, April 14, 2021
https://finance.china.com/domestic/11173294/20210415/37251654.html

Chinese Scholar: Buddhism Used as a Tool of Diplomacy

The primary Taiwanese news agency Central News Agency (CNA) recently reported that Liu Yuguang, a mainland China scholar on Buddhism, warned that the Chinese Communist Party (CCP) uses Buddhism as a diplomacy tool in order to expand its influence over Southeast Asian governments.

Liu Yuguang, an associate professor at the School of Philosophy, Fudan University, Shanghai, made these remarks at a lecture on Buddhism that the Institute of East Asian Studies of National Chengchi University held in Taiwan.

According to Liu, the CCP is attempting to legitimize its claim that China is a “Buddhist power” by touting the fact that the total number of Buddhist believers in mainland China exceeds those in other Southeast Asian countries. Also, since Buddhism in India has declined, the CCP has been promoting China as the “new motherland of Buddhism.” It is part of the CCP’s internal propaganda that “Buddhism is the Chinese people’s religion,” which is used to stoke nationalism. However, although the CCP provides some breathing space for Buddhism, it is a quid pro quo. “I let you live, so you have to serve me.”

While domestically, the CCP views religions as a national security matter, such as subversion, secession, and religious terrorism, it has not neglected turning Buddhism into a diplomacy tool for foreign relations.

According to Liu, the CCP has realized that Confucius Institutes outside China have failed as a large-scale foreign propaganda tool because people think that “after all, they [Confucius Institutes] are merely about Chinese.” To expand the CCP’s influence effectively, it has turned to Buddhism as a propaganda tool in its attempts to influence Southeast Asian countries’ believers in Buddhism and their governments. Because Buddhism is practiced throughout Asia, the CCP believes that using Buddhism in its diplomacy will eventually help influence the Asian governments.

For example, the CCP has established religious educational institutions in mainland China such as the Nanhai Buddhist Academy on Hainan Island. The purpose is not to offer training to domestic religious communities but to attract monks from Southeast Asian countries such as Cambodia and Laos. The religious educational institutions help the CCP cultivate relationships with Southeast Asian countries and ultimately use religion to influence political circles in Southeast Asian countries and to lobby and promote bilateral relations on terms favorable to China.

Source: CNA, April 1, 2021.
https://www.cna.com.tw/news/acn/202104010249.aspx

Can’t Afford to Die – China’s Funeral Expenses Average 45.4 Percent of Annual Salaries

April 4 is the day for the Qingming Festival, also known as Tomb-Sweeping Day when Chinese families visit their ancestors’ graves.

The data released by the China Funeral Association in 2014 show that funeral services reached 200 billion yuan in 2014. The funeral industry has developed into a booming sector.

According to analysts, China’s funeral industry’s market size was about 263.8 billion yuan in 2020 and may reach 411.4 billion yuan by 2026. Based on the data available, the gross profit margin of leading funeral service companies has been over 80 percent, far exceeding that of leading real estate companies in China, which hovers between 22 and 25 percent.

Behind the funeral industry’s profits are the public’s concerns that the rising cost of funerals means that people will soon be unable to afford funeral services.

A survey report on global funeral expenses by the British life insurance agency SunLife shows that the average funeral expenses worldwide are about 10 percent of the annual income of the local people. For China, however, funeral expenses (37,375 yuan or around US $5,690.90) account for about 45.4 percent of the average annual salaries, ranking second globally.

Source: Tencent, April 3, 2021.
https://new.qq.com/omn/20210402/20210402A0DMAL00.html

CCP Spokesperson: Population Counts; Chinese Netizens Think Otherwise

Chinese Foreign Ministry spokesperson Hua Chunying dismissed the United States, Great Britain, Canada, and the European Union because their combined population accounts for merely 11 percent of the world’s total population. This contrasts with the CCP’s usual practice of using GDP as the yardstick to brag about its economy. As soon as this remark came out, it caused a wave of online ridicule.

On March 23, 2021, at a press conference on this subject, Hua was asked whether she was concerned that more countries would impose sanctions in a concerted manner. She issued a rebuttal, saying that the United States, the United Kingdom, Canada, and the European Union combined account for about merely 11 percent of the world’s population, while China has about one-fifth. Therefore, she stated that these countries’ voices are not the voices of the international opinion and that their position does not represent that of the international community.  She asked these countries to “take a good look at themselves.”

Her remarks did not appear to sit well with Chinese netizens.

“According to this statement, your Party’s population [Chinese Communist Party (CCP) members] accounts for less than one-tenth of the country, and it [the CCP] is not elected or authorized in any form. Yet, you still bark everywhere without shame on behalf of a billion people.”

“Does 11 percent of your one-fifth of the world’s population support you?”

“Then how dare the 90 million [CCP members] represent one billion people? Shame on you for representing the people of the earth and managing the earth.”

“The 90 million CCP members account for only 6 percent of the Chinese population. How can they say that they represent the Chinese people? Only a government elected by the people, with each person having one vote, is in a position to say that it represents the people and the opinion of the public.”

“1.4 billion Chinese are kidnapped as hostages. In this case, the number of hostages is needed to refute the rules of the civilized world. However, when it comes to education, medical care, and pensions, 1.4 billion people are worth nothing when pandemic relief funds are needed. Not even one penny has been given out. To put it bluntly, what is happening in China is that twenty or thirty evil cult leaders determine the fate of 1.4 billion people. The rogue regime never treats people as human beings, and they are all just hostages held under the gun.”

Analysts believe that the CCP statement “Europe and the United States do not represent international public opinion” has become the latest CCP propaganda to fool Chinese people. It may also reflect the retreat of the CCP’s propaganda. After it has failed to divide Europe and the United States, the CCP now declares that the public opinion of Europe and the United States do not count whatsoever.

Source: Radio France International, March 24, 2021

https://www.rfi.fr/cn/%E4%B8%AD%E5%9B%BD/20210324-%E5%8D%8E%E6%98%A5%E8%8E%B9%E4%B8%8D%E5%86%8D%E6%AF%94gdp%E5%8F%AA%E7%9C%8B%E8%B0%81%E4%BA%BA%E5%A4%9A-%E4%B8%AD%E5%9B%BD%E7%BD%91%E6%B0%91%E5%90%90%E6%A7%BD

Disciplinary Actions against CCP Members Who Disagree with the CCP

On March 28, 2021, Xinhua reported that the Chinese Communist Party (CCP) issued (trial) disciplinary regulations for 17 types of behavior that would be subject to disciplinary action.

The General Office of the CCP Central Committee’s notice distributing the regulations emphasized that disciplinary actions are an indispensable method for educating and managing cadres and an essential measure for the Party to maintain complete and tight control.

The regulation lists 17 types of behavior that are subject to disciplinary action.

The first is the failure to be in agreement with or taking positions on significant issues which are not consistent with the CCP. The second is “having doubts about ideals and beliefs, lacking in Marxist beliefs, engaging in feudal and superstitious activities that cause adverse effects, participating in religious activities in violation of the CCP’s regulations, or believing in cults.”

The third is “ineffective implementation, making choices, discounting, and making changes” when implementing the theories, strategies, and decisions of the CCP Central Committee, which result in adverse effects or severe consequences.

The fourth is a lack of courage to fight and an unwillingness to take responsibility when facing significant issues of right and wrong, major conflicts, and crises and difficulties, which result in adverse effects or serious consequences.

Others include failure to report personal matters such as leaving for overseas.

Source: The Central People’s Government of China, March 28, 2021
http://www.gov.cn/zhengce/2021-03/28/content_5596366.htm

Xinhua: China Has a Red Line that Cannot Be Touched

On March 20, 2021, Xinhua reported an article from Anchorage, Alaska with the title, “China Has a Red Line that Cannot Be Touched.” The red line is the ruling position of the Communist Party of China.

 

Xinhua reported that from March 18 to 19, China and the United States held a high-level strategic dialogue in Anchorage, Alaska. “The two sides conducted candid, in-depth, long-term and constructive communications on their respective domestic and foreign policies, Sino-US relations and major international and regional issues of common concern.”

 

“The Chinese side emphasized that the ruling position of the Communist Party of China is the choice of history and the choice of the people. China’s development is inseparable from the leadership of the Communist Party of China. This represents the high degree of consensus of the Chinese people and reflects the common understanding of the international community. The socialist system with Chinese characteristics is the system most in line with China’s national conditions and the “code” for China’s development. It has been proven that socialism with Chinese characteristics is a correct path, and we will continue to walk along this broad road.”


“The ruling position of the Communist Party of China and the security of the system must not be compromised. It is an untouchable red line. The leadership role of the Communist Party of China and the core position of the Party’s leader are based on past arduous practice, and have received the heartfelt support of 1.4 billion Chinese people. This collective will is as firm as a rock and will not waver.”


Source: Xinhua, March 20, 2021

http://www.xinhuanet.com/world/2021-03/20/c_1127235796.htm

Facial Recognition Installed in Many Stores in China; Personal Data Accessed

On March 15, 2021, China Central Television (CCTV) reported that many stores have had monitors installed. Because of facial recognition, this has allowed access to the customers’ personal information. According to one of the companies that installed the monitors for those stores, the amount of facial recognition data collected is in the range of hundreds of millions.

It has been reported that such monitors are almost ubiquitous in China. Monitors installed in some stores seem to be harmless but they contain facial recognition systems and the stores secretly access data without informing the customers.

CCTV has visited more than 20 stores across the country that are equipped with facial recognition systems. These stores have all secretly accessed the facial recognition data collected from their customers. They include stores of well-known foreign companies such as Kohler, BMW, and 4S Stores in Shenzhen, Wuxi and Max Mara.

As soon as customers enter a store that has a facial recognition monitor, their faces will be captured and identification numbers automatically generated, without their knowledge. For a chain store, the store will know which location the customer goes to and how many times they have been there.

Companies that help these stores install monitors with facial recognition include Suzhou Wandianzhang Internet Technology Co., Ltd., Yoluoke Electronic Technology Co., Ltd., Guangzhou Yaliang Smart Technology Co., Ltd., and Shenzhen Ruiwei Information Technology Co., Ltd.

According to Suzhou Wandianzhang Internet Technology Co., Ltd., it has installed millions of monitors with facial recognition and its database contains hundreds of millions of records that the stores have collected.

Source: China Central Television, March 15, 2021
https://news.cctv.com/2021/03/15/ARTIieo9QjynMSXTVDb224QE210315.shtml