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China to Increase Investment in Research and Development Significantly by 2025

At the Chinese Communist Party (CCP) Central Talent Work Conference held in Beijing on September 27 and 28, 2021, Xi Jinping said that China’s competition for national power is a competition for talent. The top echelons of the CCP leadership attended the conference.

 

Xi said that China is currently embarking on a new journey to a modern socialist country in which high-level technological self-reliance is the key. “Competition for comprehensive national power is, in the final analysis, a competition for talent.”  Xi laid out a timetable for China to become a leading world power in science and technology within two decades, with world-class talent.

 

By 2025, China’s investment in research and development should have increased substantially, with major progress made in building up top-notch scientists for scientific and technological innovation. 

 

By 2030, China should have established a talent system that can adapt to the needs of high-quality development. The system should have significantly improved the ability to train and attract innovative world-class talent.

 

By 2035, China should have attained a competitive advantage in the competition for talent in various fields and should rank among the leading countries in the world for its strategic and technological strength, with an army of top-notch talent.

 

On October 2, 2021, People’s Daily issued an editorial promoting Xi’s remarks on the importance of recruiting, training, and using talent to build up national power. 

 

Sources:

1. The People’s Government of China, September 28, 2021 

http://www.gov.cn/xinwen/2021-09/28/content_5639868.htm

2. People’s Daily, October 2, 2021

http://www.gov.cn/xinwen/2021-10/02/content_5640810.htm

Briefings | | |   Government/Politics

Huawei to Recruit More Foreign Talent for Research

Ren Zhengfei, the founder of the Chinese telecommunications equipment giant Huawei, proposed that the company would hire more foreign talent and turn its U.S. R&D centers into “recruitment agencies.” He also stated that Huawei’s R&D centers in other countries should also step up talent recruitment.

Huawei made an  announcement on September 28, 2021. It stated that Ren made the above remarks on August 12, 2021, at a Huawei meeting on how to recruit foreign talent.

At that meeting, Ren pointed out that Huawei is at a critical stage of strategic survival and development. It must be more active in acquiring the best talent in the world. In addition to recruiting the top talent in China, it must increase the recruitment of overseas Chinese students.  More importantly, Huawei should step up its efforts to hire foreign talent and increase the budget for Huawei’s overseas R&D centers.

He expressed that the United States imposes restrictions on some Master’s and Ph.D. student visa applications. Chinese students returning from studying in the United States will gradually decrease in the future. Therefore, Huawei must find ways to attract talent from other countries who are studying and working in Europe and the United States.

Ren asked that Huawei’s overseas R&D centers take responsibility and carry out the mission of recruiting talent. “It is necessary to turn the North American R&D centers into talent recruitment agencies.” Ren emphasized that all overseas R&D centers must do the same in order to build a global talent network for Huawei.

Ren said, “We need to recruit some ‘high noses’ [foreigners] that know how to use ‘foreign guns and cannons.’ It may take three to five years to move gradually from the approach of the Chinese Communist Party (CCP) army [against Japan in World War II] to an internationalized approach. In particular, we must attract outstanding talent from other countries who have studied or worked in the United States and Europe to work in China.”

Ren further stated that overseas R&D centers are primarily for research, not product development and that Huawei should encourage those currently engaged in product development to work in China for some time.

Ren believed that it is necessary to support some outstanding Ph.D. candidates to join Huawei in China and do post-Doctoral studies in coordination with Chinese universities.

Source: Huawei, September 28, 2021
http://xinsheng.huawei.com/cn/index.php?app=forum&mod=Detail&act=index&id=6466593

Briefings | | |   Economy/Resources

Beijing Orders Inspections of 25 Financial Institutions

On September 26, 2021, the CCP Central Commission for Discipline Inspection (CCDI) announced that the Chinese Communist Party (CCP) will conduct political inspections of 25 financial institutions.

Zhao Leji, a CCP politburo standing committee member and head of the CCDI, stressed, during a conference ahead of the inspections, that it will be a thorough disciplinary inspection of the 25 financial institutions. He said that the inspections are to ensure political supervision and serve as a means of “tightening the rule of the Party.” The inspections will be conducted from a political perspective. He called for in-depth reviews to uncover any political deviations by CCP organizations at these financial institutions.

The 25 financial institutions include state-owned banks, stock exchanges, regulatory commissions, insurance companies, asset management companies, and other financial institutions that invest in private companies. The complete list follows: People’s Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, the Administration of Foreign Exchange, China Investment Corporation, China Development Bank, the Export-Import Bank of China, the Agricultural Development Bank of China, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, China Construction Bank, the Bank of Communications, CITIC Group, the Everbright Group, the People’s Insurance Group of China, China Life Insurance, China Taiping Insurance Group, China Export and Credit Insurance Corporation, the Shanghai Stock Exchange, the Shenzhen Stock Exchange, China Huarong, China Great Wall Asset Management, China Orient Asset Management, and China Cinda Asset Management.

Last month, on August 17, 2021, Xi Jinping presided over the tenth meeting of the CCP Central Finance and Economics Committee and emphasized that it is necessary to coordinate the prevention and resolution of significant financial risks, punish financial corruption, and prevent and control financial risks.

Recently, the CCP investigated and disciplined several CCP officials from financial institutions at the central level, including the China Development Bank, the Agricultural Development Bank of China, and the Bank of Communications.

It is noted that China’s financial system has traditionally been controlled by the CCP “princelings,” the second generation of the CCP’s top families. This includes former president Jiang Zemin and his faction.

This inspection is the eighth round of inspections and the largest financial inspection since Xi Jinping took office as the CCP General Secretary of the 18th National Congress. The previous seven rounds of inspections occurred in February 2018, October 2018, April 2019, September 2019, May 2020, October 2020, and May 2021.

Sources:

CCP Central Commission for Discipline Inspection, September 26, 2021

https://www.ccdi.gov.cn/toutiao/202109/t20210926_251273.html,
https://www.ccdi.gov.cn/toutiao/202109/t20210926_251271.html

Briefings | | |   Government/Politics

China Buys Nearly a Quarter of the World’s Exported Whole Milk Powder

According to a Russian report, in 2020, China bought nearly a quarter of the total of all global exports of whole milk powder and in 2021, China has continued to expand its imports of whole milk powder. 

On September 14, 2021, the Agricultural Products Export Development Center of the Russian Ministry of Agriculture released a report. According to the report, the total exports of whole milk powder in 2020 was 2.745,900 metric tons. China bought 23 percent of those exports. 

From January to July 2021, China’s total whole milk powder imports increased by 34 percent from 455,000 metric tons compared to the same period last year. The total reached was 609,000 metric tons. New Zealand exported 561,000 metric tons to China during this period. 

In addition, the Russian report also mentioned that, in 2020, China bought 13 percent, 9 percent, and 4 percent of global exports of skimmed milk powder, butter, and cheese. The Russian government is currently negotiating with the Chinese government on the milk powder supply. Recently, on August 7, 2021, the two sides held talks on this issue.

Source:

Liberty Times, September 16, 2021
https://ec.ltn.com.tw/article/breakingnews/3673306

Briefings | | |   Economy/Resources

Xi Jinping: The Communist Party Must Firmly Lead All

On September 15, 2021, after several major government actions to control China, the General Secretary of the Chinese Communist Party (CCP) Xi Jinping published a collection of the remarks he has made since 2012. The title in Qiushi magazine was, “Unswervingly Persist and Strengthen the Party’s Overall Leadership.”

Xi stated that the CCP must lead in the areas of the economy; politics; cultural, social, and ecological conditions; national defense and the military forces; the reunification [Taiwan], diplomatic work, the CCP’s party-building; and other areas of importance. Xi also said that the CCP’s leadership is the fundamental point of China’s political stability, economic development, national unity, and social stability, and there should not be even the slightest doubt about it.

Xi added further that China’s most significant national condition is the CCP’s leadership. History and the people have chosen the CCP. The CCP’s leadership is the essential feature and the advantage of socialism with Chinese characteristics. The fundamentals of governing China are the CCP’s  leadership and the Chinese socialist system.

Xi pointed out that the Communist Party of China is the ruling party. The CCP rules every aspect of China and is the supreme political leadership.

Xi said that upholding and strengthening the CCP’s leadership has a bearing on the future and destiny of the CCP and China. All undertakings are built on this foundation and rooted in this essential feature and this most significant advantage.

Source: Qiushi, September 15, 2021
http://www.qstheory.cn/dukan/qs/2021-09/15/c_1127862367.htm

Briefings | | |   Government/Politics

State-owned Enterprises Ordered to Migrate to State-owned Cloud Services

China’s national data security law went into effect on September 1, 2021. Just days before it became effective, the China State Council’s State-owned Assets Supervision and Administration Commission (SASAC) for Tianjin issued a directive mandating state-owned enterprises in Tianjin to accelerate data migration from cloud services of tech companies like Alibaba and Tencent to the state-owned infrastructure. Currently, Alibaba, Huawei, and Tencent dominate the cloud computing market in China.

In a directive dated August 12, 2021, Tianjin’s SASAC directed state-owned enterprises in Tianjin not to build new data centers, or purchase servers and other storage hardware. State-owned enterprises cannot renew or sign new contracts with cloud platforms owned by Huawei, Alibaba, Tencent, China Unicom, China Mobile, and China Telecom. Data stored in these platforms must be migrated to cloud platforms controlled by SASAC within two months of the expiration of existing contracts, with the final deadline being at the end of September 2021.

Section 3(3)(1) on page 7 of the SASAC directive reads, “The data of state-owned enterprises are state assets and must be put under state-owned assets supervision and administration…”

Since early 2021, local SASACs have started local state-owned cloud platform projects. The essence of “state-owned cloud” is to shift from a cloud platform hosted by a third party to a state-owned cloud built and operated by local state-owned enterprises. In March 2021, Tianjin state-owned cloud started operation, with three state-owned enterprises, including Tianjin Communications Group and Tianjin State-owned Capital Investment and Operation Co., Ltd. In March, the SASAC of Zhejiang Province also initiated a project that included a state-owned cloud platform. In April, SASAC of Sichuan Province officially kicked off its state-owned cloud platform.

Sources:

Lianhe Zaobao, September 4, 2021
http://www.haozaobao.com/shiju/20210904/99713.html

State-owned Assets Supervision and Administration Commission of Tianjin, August 12, 2021
http://www.d1net.com/uploadfile/2021/0827/20210827062000825.pdf

Yicai, September 7, 2021
https://www.yicai.com/news/101166263.html

Briefings | | |   Information/Technology

Shortage of Senior Technicians Creates a Bottleneck in Manufacturing

Based on Chinese media, according to its Ministry of Human Resources and Social Security, China has a shortage of 20 million senior technicians.  Estimates are that the number will hit 30 million in five years.  “Senior technician” is now among the top 100 job categories that are in the shortest supply.

However, according to a  survey, only one percent of workers in China want to be a technician. As many as 90 percent believe that technicians have low social status and low wages because generally, they do not have the education credentials of college graduates.

In China, skilled workers primarily come from migrant workers. As of 2020, nearly 70 percent of the total migrant workers have an education level of junior high school or below. As a result, most technicians in China are low- and middle-level skilled workers.

Senior technicians account for only six percent in China, compared with Japan’s 40 percent and Germany’s 50 percent.

According to the International Labor Organization, of all skilled workers in developed countries, 35 percent are senior technicians, 50 percent are medium level, and 15 percent have a low level of skills.

Such a large gap creates a bottleneck in transforming and upgrading China’s manufacturing industry. Workers’ overall quality and skill level are limiting how scientific and technological developments translate into economic growth.

Sources:

1. Tencent, September 5, 2021
https://new.qq.com/omn/20210905/20210905A00F9000.html

2. China’s Ministry of Human Resources and Social Security, July 22, 2021
http://www.gov.cn/xinwen/2021-07/22/content_5626620.htm

3. Sina, June 30, 2021
https://finance.sina.com.cn/money/roll/2021-06-30/doc-ikqciyzk2770023.shtml

Briefings | | |   Economy/Resources

CCP Watchdog: Cut off the Money Line behind the Entertainment Industry

In the headline news on its official website for August 31, 2021, the Central Commission for Discipline Inspection (CCDI) of the Chinese Communist Party (CCP) stated that the entertainment industry must not harm the state’s interest.  The CCDI article reported on its interview with the State Council Development Research Center. The CCDI is the CCP’s disciplinary watchdog.

The CCP crackdown on the entertainment industry echoes its recent broader clampdown on the private sector. Increasingly Xi Jinping has emphasized the CCP’s dominant role in every aspect of China’s economy and society. The CCP has targeted high-tech, education, and other businesses using fines and restrictions. Private capital has been blamed for contributing to the risks of data breaches, education inequality, the disintegration of the Chinese culture, threatening social stability, harming state security, among other deep seated concerns.

According to the State Council Information Office in 2019, the value-added of China’s entertainment industry reached 4,436.3 billion yuan, accounting for 4.5 percent of China’s GDP.

The CCDI article states that money has been driving the growth and the chaos in the entertainment industry. Investment, entertainment stars, and fans’ consumption culture are part of one chain all led by money. In this chain, investment is the dominant force. It promotes entertainment stars to induce and influence fans’ consumption habits (particularly young people), ultimately eroding the socialist ideology.

“Entertainment is by no means mere singing, dancing, and playing music, but an important battlefield for ideological and cultural work. It is an important part of the superstructure [a Marxist term referring to culture, political power, and the state], and it is critical to Party [CCP] work. If capital is allowed to expand unfettered, entertainment will fail its role of serving the people and socialism, and it will disintegrate the spiritual homeland of the Chinese nation.”

“There are limits to capital expansion. The CCP dominant system has unique advantages so it can fully utilize capital in entertainment while effectively restricting disorderly expansion in the industry. The bottom line is that it cannot interfere with the development direction of socialism with Chinese characteristics;  it cannot manipulate the national economy and the people’s livelihood; it cannot harm state interests; and it cannot corrupt Party members and leading cadres, let alone seek improper political gains.”

Source: The Central Commission for Discipline Inspection of the Chinese Communist Party, August 31, 2021
https://www.ccdi.gov.cn/toutiao/202108/t20210831_249112.html

Briefings | | |   Government/Politics