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Facial Recognition: Anxiety among Chinese People

Starting in December, whenever the Chinese people had to register their new mobile phone numbers, they also had to undergo facial scanning. However, a survey showed that Chinese respondents were very concerned about the security of facial recognition. During October and November of this year, a research center affiliated with the Guangzhou based Southern Metropolis Daily conducted a survey on facial recognition. The center released an online questionnaire to investigate the problems and concerns of the public when using facial recognition. Among the respondents, 57 percent were worried that their personal whereabouts were recorded while nearly 50 percent were worried that criminals may use fake information to perform fraud or theft. Nearly 84 percent of the respondents want operators of the facial recognition system to provide them with a channel to view or delete facial data. 74 percent of respondents want to choose whether to use facial recognition or traditional methods. However, the survey also showed that about 60 percent to 70 percent of respondents believe that facial recognition makes public places safer.

An IT website, Comparitech, once conducted a study on the scope and depth of the use of biometrics and surveillance systems. China, the worst among the 50 surveyed countries, lacks public attention to the privacy of people’s biometric data. The study showed that China has no laws to protect the biometrics of citizens and emphasized “the lack of protection for employees in the workplace.”

According to Chinese media, the metro system in Zhengzhou city of Henan province started “riding with face” (using facial recognition in the metro system) in early December. China Daily reported that riders can use facial recognition to authorize payment automatically instead of scanning the QR code on their mobile phones. Currently, passengers can voluntarily choose whether to use facial recognition.

Source: BBC Chinese, December 6, 2019

Chinese’ Companies Default Problems

On December 6, Epoch Times’ YouTube Channel “Crossroads of the World”  had a discussion on companies in China that are defaulting on their debt.

Host Tang Hao listed the following recent default cases in China:

  • October 24, Xiwang Group Company Limited, China’s largest corn oil producer, was unable to pay back its 1 billion yuan (US $140 million) short-term bond.
  • November 11, Guirenniao, a Chinese sneaker company could not pay its 500 million yuan bond.
  • November 19, Dongxu Optoelectronic Technology Co Ltd, China’s largest LCD glass substrate manufacturer, couldn’t pay its 2 billion yuan debt.
  • November 27, Xiwang Group couldn’t pay another debt of 861 million yuan.
  • December 2, The Beijing University Founder Group, the largest college-owned enterprise in China, defaulted on a 2 billion short-term bond. The company had 370 billion yuan in assets.
  • December 3, Guirenniao defaulted again, on a 647 million yuan debt.

Tang Hao gave three reasons for these defaults: One, many companies followed the government to take on excessive debts to seek high-expansion. Two, the trade war with the U.S. hurt China’s economy. Three, the owners of the companies, who have low moral values, do not feel any social obligation to pay back their company’s loans. They may just spend the money lavishly or put the borrowed money into their own pockets.

As a result, companies’ credit problems have also dragged down the banks:

  • In May, Baoshang Bank Co., Ltd. had a severe credit risk and the People’s Bank of China and the Banking Regulatory Commission took it over.
  • In July, the Bank of Jinzhou had a high cash risk and the Industrial and Commercial Bank of China had to infuse it with money.
  • In August, Hengfeng Bank in Shandong Province had a cash crisis and the Shandong government took it over.
  • In October, Yichuan Rural Commercial Bank in Luoyang City, Henan Province suffered a bank run that lasted three days.
  • In November, Yingkou Coastal Bank in Liaoning Province suffered a bank run.
  • In November, the government took over Harbin Bank in Heilongjiang Province.

Source: YouTube, December 6, 2019

Huawei’s “Wolf Culture” in Canada

Chinese people recently have been using the term “wolf culture” to describe a company or a person who behaves like a wolf, who is willing to take any measure to win, and who ignores human nature and morality.

Epoch Times interviewed some former employees of Huawei’s subsidiary in Toronto who took the opportunity to expose Huawei’s “wolf culture” in Canada.

1. Taking down Nortel: Huawei offered prices 40 percent below market so it could quickly grab the global telecom market. It was able to do so because of the Chinese government’s subsidies and the People’s Liberation Army’s “gift contracts.” In addition, from 2004 to 2009, the Chinese Communist Party’s (CCP’s) hackers had been consistently hacking into Nortel’s system to steal its secrets. Nortel filed for bankruptcy in 2009. Huawei was able to hire all of Nortel’s top five 5G experts and make them work for Huawei.

2. Operations in Canada: Huawei maintains a tight central control over its financial operations. It is the Chinese Headquarters in Shenzhen that makes the calls on major financial decisions for its overseas branches. The Shenzhen Headquarters must review all overseas branches’ pricing of equipment proposals and solutions. The Shenzhen headquarters has over 10,000 staff member managing its financial operations globally.

3. Discrimination on “Chinese Faces”: A former Huawei employee said that Huawei Canada has been discriminating against employees because of their race and age. This was the company’s culture in China.

Huawei’s CFO Meng Wanzhou visited Huawei Canada in Toronto in 2016. She was reported to be unhappy when she saw so many “Chinese faces” in the office there.

A former employee said, “(Huawei) prefers non-Chinese people for non-technical positions, such as the public relations positions,” so that the company can appear more “Westernized.”

A former Huawei employee recalled that a high-ranking executive did not like the high labor cost and said that he expected the salary of employees of Chinese origin to be much lower.

4. Discrimination on age: A high-ranking executive sent from China to Huawei Canada in 2016 launched a policy to “make employees younger.” Meng Wanzhou further strengthened this policy.

Chinese media have widely reported Huawei’s “age of 35” policy: If an employee reaches the age of 35 and has not become a manager, Huawei puts that person in a human resource database at the Headquarters in China; if no department wants the person, Huawei will let that person go.

“We often heard that so and so was fired for age,” a former employee said, “Though there is no written evidence, people have been discussing it.”

Another employee who was diagnosed with cancer and took sick leave was let go due to her age. Another employee, in her 50s, was let go too, despite the fact that she maintained a high performance rating. She complained to Huawei management that their action was age discrimination. Huawei denied discrimination but increased her severance pay. She protested again. Huawei increased severance pay again, but still didn’t offer to bring her back. She is considering taking legal action.

5. Communist Study: About 10 percent of the people at Huawei Canada’s Headquarters are from the Shenzhen Headquarters. They must participate in the CCP study every Saturday morning.

6. “Wolf Culture”: All employees, including those hired in Canada or sent from China, must follow the “wolf culture” that Huawei’s Founder Ren Zhenfei has promoted: employees must have the hungry wolf’s nature of being fearless and blood-loving, and must keep fighting in a tough team environment. “There are instructions (about ‘wolf culture’) on Huawei’s internal site for everyone to read and follow. Their idea is that, no matter what, you must fight for success, even if it means to step on your fellow coworkers. They asked us to read the ‘wolf culture’ articles and write learning reports to send to China’s Headquarters.”

“Employees work an average of 10 hours a day. It is normal for people to resume work after dinner. There is no overtime pay. Occasionally you hear a story that someone complained about it and was then fired. The company didn’t give a reason for the firing, but everyone knew why.”

If Huawei wants to fire someone, it creates a tough situation at work for that person, for example, increasing his workload and giving him a low rating, to force that person to leave.

Source: Epoch Times, December 7, 2019

China Decided to “Teach the United States a Hard Lesson.”

People’s Daily reported on December 2 that the Chinese Ministry of Foreign Affairs announced a ban on U.S. military vessels and aircraft. They are now prohibited from using Hong Kong for logistics. At the same time, China also announced sanctions on a number of U.S. NGOs (Non-Governmental Organizations) that China identified as “playing an evil role in the Hong Kong riots.” The People’s Daily commentary suggested that it’s about time to “teach the United States a hard lesson.”

Primary Taiwanese news agency Central News Agency (CNA) reported on December 3, along with several Taiwanese media companies, that the Mainland ban should be considered an opportunity for Taiwan to extend an invitation to the U.S. Navy to dock at a Taiwanese port for logistical supplies. The U.S. never truly had a dependency on Hong Kong, and Taiwan can offer much better reliability for supplies.

Global Times published a commentary on December 6 that maintained the region is facing a historic change of military balance. China now has a far superior military power over the Taiwan Strait. The commentary explained that, if the U.S. and Taiwan get closer, Mainland aircraft can attempt flying over the Taiwanese presidential palace and the Mainland navy also has the option of entering the Taiwanese coastal line. The cost for the U.S. to intervene in a Taiwan Strait conflict is rapidly growing. So if Taiwan wants more collusion with the U.S., just go ahead.

(1) People’s Daily, December 2, 2019
(2) CNA, December 3, 2019
(3) Global Times, December 6, 2019

China’s Security Czar: Defend National Political Security; Crack Down on Infiltration of Hostile Forces

On November 28, Guo Shengkun, who is the head of the Chinese Communist Party’s (CCP’s) Political and Legal Affairs Commission (PLAC), published an article in People’s Daily. The article called for the firm defense of “national political security,” which is “the lifeline of the Party’s and the nation’s security, and an unshakable bottom line.” Guo vowed “resolutely and severely to prevent and crack down on” the infiltration of hostile forces. The PLAC is a CCP agency that oversees all legal enforcement authorities, including the police force.

In the article Guo also said that the construction of the “people’s defense line for national security” should be strengthened. The whole country and the entire population should enhance their awareness of the sense of national security and enhance the nation’s ability to prevent and defend against national security risks. He said that everyone ought to be “on high vigilance, take resolute precautions, and severely punish” the hostile forces’ infiltration and their destructive and subversive, activities to promote secession, thus “building a solid copper and iron wall for national security.” Guo also advocated for concerted efforts to advance national security work and walk the “path of national security with Chinese characteristics.”

Regarding issues causing potential social unrest, Guo demanded that the problem be prevented at an early stage and at the grassroots level. “Small matters stay in the village, big issues go no further than the township, and conflicts are not passed on to higher level authorities.”

Source: Central News Agency, November 28, 2019

Chinese Household Debt Exceeds 60 Percent of GDP

Last week, the People’s Bank of China released data showing that, by the end of last year, China’s household debt accounted for more than 60 percent of GDP. Real estate mortgages accounted for 47 percent of household income, a year-on-year increase of 3.7 percent. Fitch Ratings estimates that the outstanding balance of credit card receivables reached 7.23 trillion yuan (US $1.03 trillion) in the first half of this year.

A Hong Kong based commentator Johnny Y.S. Lau told Radio Free Asia that, in recent years, the government has been encouraging people to invest in real estate. With the soaring housing prices, there has been an oversupply of real estate in many cities. As the US-China trade war continues to slow the economy, the property market and economy may face a crash at any time. Lau said, “In the past, 40 percent (of people’s income) was in bank savings. Now, a lot of money is invested in real estate. With the US-China trade war causing exports to stagnate, cash flow may become a problem, which makes the risk of a crash increasingly apparent. As the second and third tier cities have absorbed a large number of those in the rural populations, the housing prices have been pushed even higher. Now it depends on whether the people’s savings can keep up and on how the authorities regulate property prices.”

At the same time, China’s domestic consumption has weakened compared to previous years. In October of this year, retail sales increased by 7.2 percent year-on-year, the lowest growth in nearly 16 years. Weak consumer confidence has also led to a 10-month consecutive decline in car sales, down to a negative 4 percent growth in October.

Source: Radio Free Asia, December 5, 2019