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Xi’s Speech Revealed Beijing Is Preparing for the Possibility of Being Excluded from the International Market

Xinhua reported Xi Jinping’s visit to Inner Mongolia from June 6 to 9. In one speech he gave, Xi stated that China’s talk of domestic economic circulation (focusing on the domestic economy) is the strategy when China is excluded from the international market, indicating that the top Chinese leaders are discussing and preparing for such a possibility.

The Xinhua report said:

In the midst of various foreseeable and unforeseeable “storms” and “turbulent waves,” the most important thing for us is to do well is our own thing. General Secretary Xi Jinping gave important words to use: “To build a new (economic) development pattern, the first thing is to get the major domestic circulation right, which is the fundamental solution. (Talking about a) ‘double circulation’ economy (business with other countries and business within China) is not to close the door (of China), but rather when others do not open the door to us, we can still live and live better. We open our door. Whoever comes to cooperate with us is welcome.”

General Secretary Xi Jinping talked about the road to (China’s) rejuvenation under the new situation: “Some countries want to do hegemony; they want to do monopoly, and want us to follow them as their vassals. Our Chinese nation must revive! We must continue to overcome difficulties and go to the next level!”

Source: China’s Government Site, June 10, 2023
https://www.gov.cn/yaowen/liebiao/202306/content_6885568.htm

Briefings | | |   Economy/Resources Government/Politics

India Takes Legal Action against Xiaomi, Seizes over 55 Billion Rupees

According to a report from China’s Southern Metropolis Daily, Indian authorities investigating financial crimes have accused Xiaomi India, as well as the company’s director and three banks, of violating the Foreign Exchange Management Act (FEMA). As a result, Xiaomi’s funds of RMB 4.81 billion (US$0.67 billion) have been confiscated.

The Indian Enforcement Directorate (ED) alleges that Xiaomi India and its senior executives were involved in the illegal transfer of funds. Additionally, the three banks, Citibank, HSBC, and Deutsche Bank, were charged for not conducting proper due diligence and allowing royalty payments to be remitted out of the country.

Consequently, approximately RMB 4.81 billion (55.5 billion rupees) of Xiaomi’s funds were frozen in the banks, effectively being seized by the authorities.

Xiaomi had experienced significant success in the Indian market since its entry in 2014, reaching the number one spot in 2017. The company had announced plans to invest $1 billion in Indian start-ups over five years. However, as the five-year plan was nearing completion, law enforcement agencies took action against Xiaomi’s Indian branch.

In May of the previous year, the Indian Anti-Money Laundering Office (AMLO) accused Xiaomi and its Indian subsidiary of violating foreign exchange control laws. The AMLO claimed that, since 2015, Xiaomi had sent money to three overseas entities in the form of royalty payments, leading to the freezing of the subsidiary’s account assets.

Xiaomi India was also investigated for tax-related issues in December 2021, with the Indian Tax Intelligence Bureau notifying the company that it owed 6.53 billion rupees in import duties for the period between April 2017 and June 2020. A complaint filed by Xiaomi was rejected by the local Karnataka High Court in April of this year.

Source: Central News Agency (Taiwan), June 13, 2023
https://www.cna.com.tw/news/acn/202306130089.aspx

Briefings | | |   Geo-Strategic Trend

China’s Marriage Rate in 2022 Plummets to a 37-Year Low

China’s Ministry of Civil Affairs has released its quarterly statistics, revealing that the number of marriages in 2022 was 6.833 million, representing a decrease of 10.5 percent or 803,000 marriages compared to 2021. This marks the lowest number of marriages recorded since 1986 when the statistics were first published. It also marks the ninth consecutive year of decline since the peak in 2013 when there were 13.469 million marriages, indicating a significant drop of 49.3 percent over the past nine years.

Several factors contributed to this rapid decline in marriages. First, there is a trend of postponing marriage and childbirth, leading to a rise in the average age of first marriages. The average age of first marriages in China was 24.89 years in 2010, but it increased to 28.67 years in 2020. Second, there has been a decline in the number of individuals of marriageable age, affecting the pool of potential spouses. Additionally, changes in societal attitudes and the impact of the epidemic are also influencing factors.

The declining marriage rate will have profound implications for China’s future birth rate, particularly the first-child birth rate, which fell below 5 million for the first time in 2021, reaching 4.683 million births. The National Health Commission attributes this decline to the prolonged education and increased employment pressure faced by the younger generations born in the 1990s and 2000s, many of whom grew up and worked in urban areas.

Overall, the decreasing number of marriages in China indicates a significant shift in societal dynamics and will have long-term consequences for the country’s demographics.

Source: Central News Agency (Taiwan), June 12, 2023
https://www.cna.com.tw/news/acn/202306120030.aspx

Briefings | | |   Economy/Resources

China’s Unannounced Cremated Remains in Q4 2022

The Chinese Ministry of Civil Affairs (MOCA) has released civil affairs statistics for the fourth quarter of 2022 after a significant delay. However, unlike previous years, they did not disclose the cumulative number of “cremated remains” for the entire year of 2022. This has raised suspicions about the number of people who died from the epidemic during that period.

China’s National Bureau of Statistics had previously announced that 10.41 million people would die in 2022, based on data collected from November 2021 to October 2022. This data did not include the COVID-19 outbreak that occurred from November to December of the same year.

The Ministry of Civil Affairs has typically published civil affairs statistics every quarter, and the statistics for the fourth quarter are usually released by April of the following year at the latest. However, the statistics for the fourth quarter of 2022 were not released until June 9, and the cumulative number of “cremated remains” for 2022 was not disclosed as usual.

The ministry has not provided any explanation for the delay or the omission of the cremation data. Some independent media outlets have highlighted this unusual situation but have refrained from criticizing the authorities for potentially hiding the number of COVID-19 deaths.

According to previously released data from the Ministry of Civil Affairs, the number of cremated remains in the first three quarters of 2022 was 4.776 million, a 10 percent increase compared to the same period in 2021.

The cremation rate in China for 2021 was 58.8 percent, showing a 3.1 percentage point increase from 2020. However, the ministry has not announced the cremation rate for 2022, although estimations from the funeral industry suggest it could be over 60 percent.

Since the Ministry of Civil Affairs has not disclosed the number of cremated remains for the fourth quarter of 2022, it is impossible to estimate the number of deaths during that period. Therefore, the exact number of people who died from the epidemic during the outbreak remains unknown.

Source: Central News Agency (Taiwan), June 13, 2023
https://www.cna.com.tw/news/acn/202306130381.aspx

Briefings | | |   Economy/Resources

China’s May Total Exports Declined while Exports to Russia Increased

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that China’s General Administration of Customs just released import and export data for May. In U.S. dollar terms, China’s exports fell 7.5 percent year-over-year in May, turning negative again after two months. The impact of the pandemic is in the past, but the troika that promotes China’s economic development, investments, consumption and exports – have all encountered tremendous pressure this year. Also in May of this year, China’s total imports and exports reached US$501.19 billion, a year-over-year decrease of 6.2 percent. The trade surplus was US$65.81 billion, narrowing from last year’s by 16.1 percent. The fastest growing export destination for China in May was Russia, with an increase of 114.32 percent year-over-year, hitting a new record high. Exports to Africa increased by 12.94 percent, and exports to the UK increased by 3.73 percent. Other than those, exports to other major countries, regions, and economies all fell sharply in May. Exports to the United States, the European Union and ASEAN fell by 18.2 percent, 7.0 percent and 15.9 percent year-over-year respectively. The ten countries/regions/economies with the fastest year-over-year decline in cumulative exports from January to May were Taiwan, Canada, the United States, New Zealand, Italy, France, Hong Kong, Germany, the European Union, and the Netherlands. Also, China’s share of U.S. foreign trade has  declined, continuing its downward trend. China accounted for 15.4 percent of U.S. goods imports in the 12 months through April, the smallest share since October 2006.

Sources:
(1) Sohu, June 7, 2023
https://www.sohu.com/a/682988626_114984
(2) Lianhe Zaobao, June 8, 2023
https://www.kzaobao.com/cngov/2023-06/08140491.html

Briefings | | |   Economy/Resources Geo-Strategic Trend

Heads of Four Major Korean Enterprises Will Soon Visit France and Vietnam

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, according to Korean media, the heads of the four major Korean manufacturing enterprises will jointly visit France and Vietnam at the end of June. These major Korean business leaders including Lee Jae-yong, chairman of Samsung Electronics, Chey Tae-won, chairman of the SK Group, Chung Eui-sun, chairman of the Hyundai Motor Group, and Koo Kwang-mo, chairman of the LG Group, will attend the publicity campaign event in Paris for the 2030 Busan World Expo bid. Afterwards, the business leaders will fly to Hanoi, Vietnam to attend the Korea-Vietnam Business Forum and other activities to explore ways to strengthen bilateral economic cooperation. It is reported that Shin Dong-bin, chairman of Lotte Group, may also attend the event together with the other four leaders. At present, Vietnam has attracted investments from 142 countries and regions, among which South Korea’s total investment in Vietnam has reached US$81.3 billion, becoming Vietnam’s largest foreign investor.

Source: Sina, Jun 2, 2023
https://cj.sina.com.cn/articles/view/5182171545/134e1a99902001k8ww

Briefings | | |   Geo-Strategic Trend

Lianhe Zaobao: UK Government Plans to Remove Surveillance Cameras Made in China

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the British Cabinet Office will ask all government departments to remove surveillance cameras produced by Chinese companies to stop potential intelligence gathering by the Chinese government. When announcing this decision, the Cabinet Office also mentioned that a timetable will be announced for various departments to follow in order to remove surveillance cameras installed in sensitive places. The British government did not name specific Chinese companies, only saying that surveillance cameras produced by companies subject to China’s National Intelligence Law must be removed. Two people familiar with the matter said that the order is aimed at Hikvision and Dahua, two of China’s largest surveillance camera makers. Cabinet Office Minister Jeremy Quin said the new measures would protect sensitive sectors of the UK from companies that could threaten UK national security and would act as a firm deterrent against hostile acts wishing to harm the UK. He announced the measures as he proposed a series of new amendments to the government’s procurement act, including the creation of a new unit to investigate suppliers who may pose a risk to UK national security and assess whether to ban these companies from public procurement. At least a third of the police forces in England and Wales use surveillance cameras made by Hikvision. Hikvision responded by saying its products have no security issues.

Source: Lianhe Zaobao, June 7, 2023
https://www.kzaobao.com/shiju/20230607/140427.html

Briefings | | |   Geo-Strategic Trend Information/Technology

Chinese Citizen Estimates 54 Million Jobless Chinese Aged 24 to 40

A Chinese article (written by an individual) estimated that there are 54 million unemployed youth (aged 24 to 40) in China. The article’s main points were:

  • From 2020 to 2023, the gaps between the number of new jobs (for graduates) and the number of graduating students were -2.49 million, -2.20 million, -4.49 million, and -5.82 million, respectively. Thus there should be a total over 15 million graduated students without jobs.
  • About 10 percent of Chinese companies were dissolved in 2022. This means roughly 10 percent of previously-employed workers became unemployed. There should be about 25 million jobless youths as a result.
  • Due to the COVID pandemic, about 14 million young migrant workers lost their jobs within cities.

People aged 24 to 40 account for about 22 percent of China’s population. Using the Chinese government’s population estimate of 1.4 billion, the 24-40 age group should have about 308 million people, resulting in an unemployment rate of 17.5 percent.

Source: Cyzone.cn website
https://m.cyzone.cn/article/728631

Briefings | | |   @CS Economy/Resources