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Briefings - 12. page

Financial Shortfall in China’s “Stability Maintenance” Budget: Bottom-Rung Stability Agents Facing Wage Delays

According to a social media report, the government of the Hanjiang District in Putian City, Fujian Province, has not paid grid workers their salaries for six months, and it has recently ceased deposits of workers’ social security contributions as well.

“Grid workers” (网格员) are the lowest level of stability maintenance forces in China. The term “grid worker” or “grid administrator” refers to individuals responsible for managing various subdivisions of neighborhoods within Chinese communities. They are tasked with collecting information on residents, promoting government policies, mediating conflicts, and other miscellaneous tasks. Recently, work conducted by grid workers in China has gone hand-in-hand with collection of big data use of artificial intelligence by the Chinese government. Grid workers played a significant role in enforcing the government’s COVID control measures by conducting inspections, information reporting, health monitoring, and monitoring of “key individuals.” China’s grid workers have been referred to as the ‘capillaries’ and ‘nerve endings’ of the Communist Party’s governance system, and “the most direct embodiment of Xi Jinping’s concept of ‘fine-tuned social management.'”

The social media post regarding the current grid worker budget shortfall in Putian City also revealed that Hanjiang District has around 700 to 800 grid workers, with a monthly salary of 2,200 yuan. A state-controlled media outlet confirmed the report: “on the morning of August 23, the district government coordinated and indeed issued one month’s salary to all grid workers who were owed wages, and efforts are being made to resolve the remaining wage arrears.” Similar issues of delayed wages to grid workers and social workers are reported in Linyi, Shandong. A Radio Free Asia report on this subject commented that “such a confirmation by Chinese state-run media is a rare occurrence.”

The reports indicate that Beijing is running short of stability maintenance funds.

According to 2020 census data, there is approximately one grid worker for every 600 citizens in the Hanjiang District. The ratio of grid workers to citizens is similar in Shenzhen.

Source: Radio Free Asia, August 26, 2024
https://www.rfa.org/mandarin/yataibaodao/meiti/jj-china-internet-control-08262024103632.html

Briefings | | |   @CS Government/Politics Social Stability

China Halts Adoption of Chinese Children by Foreigners

The Chinese government has adjusted its policy on international adoption. In the future, no more children will be sent abroad for adoption except for adoption of relatives and stepchildren.

Since 1979, China has implemented a strict “one-child policy” nationwide. This family planning policy led to a large number of baby girls and children with disabilities being abandoned, who were taken in by orphanages. The CCP first allowed adoption of children by families abroad starting in the 1980s. In 2005 Beijing enacted a “Convention on the Protection of Children and Cooperation in Respect of Intercountry Adoption.” That year, the number of international adoptions of Chinese children by foreign families peaked, with over 13,000 children adopted. In the past few years, China has moved to a “domestic adoption first” policy.

A post from the U.S. State Department’s ShareAmerica social media account on July 18 stated that American families have been the primary adopters of Chinese orphans since China opened up international adoptions in the 1980s. According to statistics from the U.S. State Department’s Bureau of Consular Affairs, 82,658 Chinese children have been adopted by American families since the year 2000, accounting for 29.2 percent of all adoptions of foreign-born children by Americans. Adoptions of Chinese-born children by Americans have dropped to near zero since the COVID pandemic due to the CCP’s suspension of international adoptions.

Source: VOA, September 5, 2024
https://www.voachinese.com/a/china-halts-foreign-adoptions-for-its-children-20240905/7772418.html

Briefings | | |   Economy/Resources

Foreign Car Manufacturers Face Cold Winter in China Due to Cutthroat Price War

China’s economy is currently slowing down. Despite supply for electric vehicles (EVs) outpacing demand, the Chinese Communist Party (CCP) has continued to incentivize increased scale of EV production. Some sources have reported China’s economy is currently producing cars at a rate of 40 million units per year, but its domestic consumption is only 22 million units annually, leading to fierce competition among car makers. According to Stephen Dyer of Alix Partners, there were 123 automotive brands that sold at least one electric vehicle in China in 2023. The oversupply of EVs in China has led to accusations that Chinese manufacturers are dumping EVs overseas.

Over the past few decades, foreign automotive manufacturers have enjoyed rapid growth and high profits in the Chinese market. However, they now face serious challenges due to severe competition fueled by the CCP’s subsidies to domestic Chinese auto brands.

Volkswagen had been the top-selling car brand in China since 2000; it lost its top position to Chinese brand BYD last year. Recently, the Volkswagen Group announced that it may have to close its factory in Germany. This would be the first time that the VW group closes a factory in its home country in the brand’s 87-year history. Volkswagen’s car sales in Europe have decreased by 500,000 units annually, equivalent to the output of two car factories. Volkswagen’s sales in China during the first half of 2024 dropped to 1.34 million units, a year-over-year decrease of 7 percent and a drop of more than a quarter compared to three years ago. VW’s joint ventures in mainland China have reported a quarterly loss for the first time in 15 years. China is Volkswagen’s largest market.

As of Q2 2024, Toyota, the world’s largest automaker, saw its revenue from joint ventures in China decrease by 73 percent year-over-year.

The sales of General Motors’ joint ventures in China (which include 10 partnerships) dropped from a peak of 4 million units in 2017 to 2.1 million units last year.

In October 2023, Japan’s Mitsubishi Motors announced it would end production in mainland China due to years of declining sales. Honda (HMC), Hyundai, and Ford have also implemented various cost-cutting measures, including layoffs and factory closures.

In July, the market share of foreign car manufacturers in the Chinese automotive market fell from 53 percent two years ago to 33 percent.

General Motors CEO Mary Barra said of the price competition in China that “frankly, it’s unsustainable, because the amount of companies losing money there cannot continue indefinitely. And really, when you get into the type of pricing war that’s going on now, it’s really a race to the bottom and [it destroys] residuals.”

Source: Epoch Times, September 7, 2024
https://www.epochtimes.com/gb/24/9/7/n14326042.htm

Briefings | | |   @CS Economy/Resources

Chinese Real Estate Developers Face Widespread Losses in First Half of 2024

According to Nikkei Chinese, mid-year financial reports for Chinese real estate developers in the first half of 2024 revealed that 56% of large real estate companies in China and Hong Kong reported losses, comprising 88 of the 158 companies covered by the analysis. The real estate downturn has led to a persistent slump in new home sales, with sales declining by 15%. Fifteen of companies, including the Evergrande Group and Country Garden Holdings, did not disclose their mid-year reports by the August 31 deadline and were excluded from Nikkei’s statistics.

The total losses for the 158 companies covered amounted to 64.3 billion yuan ($8.9 billion), significantly higher than the 13.1 billion yuan ($1.8 billion) loss during the same period last year. Private enterprises with poor financing capabilities accounted for the majority of top losses.

Shimao Group Holdings reported the largest loss at 22.7 billion yuan ($3.1 billion), an increase from the previous year’s 12.1 billion yuan ($1.7 billion) loss. The company defaulted on its debt in July 2022, releasing a statement to the effect that the real estate market continues to adjust with no turning point in sight for the current sales slump.

Sunac China Holdings reported the second-largest loss at 15 billion yuan ($2.1 billion).

China Aoyuan Group reported the highest profit at 22.3 billion yuan ($3.1 billion), a turnaround from the company’s 2.9 billion yuan ($400 million) loss last year. This company’s profits, which came despite a 57% decrease in sales, were largely due to gains from foreign currency debt restructuring.

Source: Nikkei Chinese, September 3, 2024
https://zh.cn.nikkei.com/china/ccompany/56585-2024-09-03-09-14-39.html

Briefings | | |   Economy/Resources

China Expands Global Law Enforcement Training and Cooperation Initiatives

Chinese Public Security Minister Wang Xiaohong announced plans to train 3,000 foreign law enforcement officers and “deploy police advisors and workstations to countries in need” over the next year. Wang’s announcement was made at the 2024 Global Public Security Cooperation Forum in Lianyungang, Jiangsu Province.

This initiative by Beijing aims to “improve law enforcement capabilities abroad, guide joint patrols and investigations, and address border crimes.” China also pledged “continued financial and operational support” to Interpol and UN peacekeeping missions. The initiative follows China’s “police cooperation agreement” with the Solomon Islands in 2023, which upgraded the relationship between China and the Solomon Islands to one of “comprehensive strategic partnership.”

Wang emphasized China’s willingness to “deepen cooperation with other countries to promote a fairer, more rational, and more efficient global public security governance system.” The move is seen as part of China’s strategy to strengthen its overseas influence and build relationships with foreign countries.

The Global Public Security Cooperation Forum, in its third year, saw increased participation with over 2,000 attendees from 122 countries, regions, and international organizations. It featured 12 sub-forums covering topics such as tourism safety, traffic management, international police education, and urban public security.

A “Global Public Security Cooperation Concept Document” was released outlining ten “cooperation measures” including “the deepening of a multilateral security cooperation mechanisms, combating transnational crime, strengthening global anti-terrorism efforts, and addressing potential risks posed by artificial intelligence.”

Source: Central News Agency (Taiwan), September 10, 2024
https://www.cna.com.tw/news/acn/202409100063.aspx

Briefings | | |   Geo-Strategic Trend

China’s J-10C Fighter Jet Struggles in International Market Despite Low Price

China’s domestically developed J-10C fighter jet is underperforming in international sales, with even close allies like Serbia opting to purchase other jets such as the French Rafale fighters instead. South Korean media analysis suggests that, compared to the American-made F-16 and the French Rafale, the J-10C has a lower weapons payload capacity and less reliable jet engines, making it less attractive despite costing only a quarter of the price.

Serbia, considered China’s “iron friend” and a buyer of Chinese weapons, recently signed a €2.7 billion contract for 12 Rafale fighters. This decision by Serbian military leadership came after China’s attempt at selling J-10C jets to Serbia. The Korean media report suggested that, while the J-10C features modern equipment like AESA radar, it lacks combat experience and has a lower weapons payload compared to its competitors.

The J-10C’s Chinese-made WS-10 engine still faces issues with sustained power output and fuel efficiency. Political factors may have also influenced Serbia’s decision, as the country is now seeking to align more closely with the EU.

Thailand, which routinely conducts joint air force exercises with China, chose the Swedish JAS-39 Gripen fighters over the J-10C.

Currently, Pakistan is the only confirmed international customer for the J-10C, having ordered 36 aircraft. Recent reports suggest that Egypt may become the second international buyer of the J-10C.

Source: Central News Agency (Taiwan), September 9, 2024
https://www.cna.com.tw/news/acn/202409090194.aspx

Briefings | | |   Defense/Military

Xinhua: Starlink Helps US Navy Increase Internet Speed Twentyfold

Xinhua recently reported that the U.S. Navy will soon begin the full-scale deployment of SpaceX’s Starlink satellites. This will provide high-speed internet connections to all its bases and ships. Satellite internet connectivity is expected to facilitate naval operational improvements. Currently the U.S. Navy uses Department of Defense satellites for connectivity. However, the six geostationary satellites for Internet access provide slow connection speeds. To achieve faster speeds, the U.S. Navy recently began using Starlink and Britain’s Eutelsat OneWeb. Low-Earth orbit satellites can improve the Navy’s connectivity capabilities, with on-ship speeds expected to reach about 1Gbps. This new capability is called Sailor Edge Afloat and Ashore (SEA2) by the U.S. Department of Defense. SEA2 operates 20 times faster than any other satellite before. It’s worth noting that SEA2 received the cybersecurity certification that has never been issued to such services before. Rob Wolborsky, Chief Engineer at U.S. Information Warfare Systems Command, stated that “this is a once-in-a-lifetime transition, and we’re working to deliver it to the fleets as quickly and aggressively as possible.”

During the COVID-19 period, the U.S. Navy recognized the need for increased connectivity. Due to pandemic-era restrictions, ships were not allowed to dock in many ports across the globe, cutting them off from the rest of the world. The U.S. Navy is likely to receive Starlink access through the StarShield program, which was established under a contract signed last year between the Department of Defense and SpaceX to provide satellite Internet connections to the U.S. Armed Forces.

Source: Xinhua, September 5, 2024
http://www.xinhuanet.com/milpro/20240905/dc67d657e8ba43bd80fb5955475ffd5e/c.html

Briefings | | |   Defense/Military Information/Technology US-China Relations

DW Chinese: German Warships Might Traverse Taiwan Strait

Deutsche Welle Chinese Edition recently reported that the German military has so far maintained a low-key attitude regarding news that the German frigate Baden-Württemberg may transit the Taiwan Strait. The frigate Baden-Württemberg and the supply ship Frankfurt are performing patrol missions in the Pacific Ocean and are currently visiting South Korea. The two German warships have previously participated in United Nations supervision missions on the implementation of sanctions against North Korea. German Rear Admiral Axel Schulz said during a visit to South Korea’s Port of Incheon that safe and reliable maritime routes, especially from Southeast Asia to Europe and North America, are a prerequisite for economic prosperity for all countries. He said, “we are here to maintain freedom of navigation in international waters.” Schulz also emphasized that broadcasting the ship’s sailing plan would violated mission safety regulations. He said that he has “no reason to disclose the route of the voyage.”

The German fleet’s next stop is Manila. If the German frigate passes through the Taiwan Strait, it will be the first time since 2002 that a German warship has sailed through this narrow strait between mainland China and Taiwan. Earlier in May this year, Berlin stated that it would not rule out the possibility of a German naval frigate passing through the Taiwan Strait. Chinese Foreign Ministry said that China firmly opposes any country provoking or threatening China’s sovereignty and security in the name of freedom of navigation. Schulz also said in Incheon that, “the overall goal of this deployment is to reaffirm Germany’s commitment to upholding the rules-based international order.”

Source: DW Chinese, September 7, 2024
https://p.dw.com/p/4kO7B

Briefings | | |   Geo-Strategic Trend