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Briefings - 145. page

China Further Tightens Online Censorship, Mandating Real Name Commenting

The Cyberspace Administration of China (CAC), recently issued a draft version of the “Internet commenting service management regulations.” The country’s top Internet authority mandates that providers of commenting services shall authenticate the real identity of registered users and shall not provide commenting services to users who have not provided real identity information. The “comment service” refers to the Internet platforms that, by means of posting, reply, messaging and other means, provide users the ability to publish text, symbols, expressions, pictures, audio and video information.

CAC also requires service providers to establish mechanisms to review postings, conduct real-time inspections, and launch emergency responses. The online postings have to be reviewed before being published. Any “illegal and undesirable information” are to be detected, in a timely manner, processed, and reported to the Internet authorities.

CAC also proposed that the service provider establish a user grading system, which conducts a credit assessment of the user’s commenting behavior. Users with serious violations will be blacklisted, deprived of services, and prohibited from re-registering to use commenting services.

Source: Central News Agency (Taiwan), June 18, 2022
https://www.cna.com.tw/news/acn/202206180106.aspx

Briefings | | |   Information/Technology

Multinational Corporations Have a Crisis of Confidence in China

The French newspaper Les Échos published an analysis on Multinational companies’ crisis of confidence in China, focusing on the business community’s shock at  the brutal closure of Shanghai. They have been forced to re-evaluate the “China risk” including factors such as the zero-Covid policy, the war in Ukraine and tensions between the US and China.

The analysis says that the closure, as well as the broader disruptions caused by China’s zero-Covid policy, translate into huge economic costs. Foreign companies have massively reduced their forecasts. According to data from the European Union Chamber of Commerce, as of April, 60 percent of European subsidiaries had lowered their business targets for 2022. Production could be suspended at any time, with the epidemic and China’s draconian Covid prevention policies becoming a sword of Damocles hanging over these companies. According to a survey by the French Chamber of Commerce and Industry in China, 80 percent of French subsidiaries said that China’s zero-Covid policy is affecting their investment strategy, with 76 percent believing China’s image has deteriorated.

Geopolitics and the growing competition between the U.S. and China are other major long-term factors. Trade wars have complicated the business of multinational companies in China. The war between Russia and Ukraine has abruptly posed new risks. The potential consequences of Beijing’s possible attack on Taiwan could be even greater than that of Western companies’ retreat from Russia. In addition, companies are weighing the effect of the rise of local competitors, increased regulatory restrictions and the reputational risk of doing business in China due to Western condemnation of issues such as Xinjiang and Hong Kong. Many factors are prompting these companies to reassess their long term “China risk.”

Source: Radio France International, June 21, 2022
https://rfi.my/8WHA

Briefings | | |   Geo-Strategic Trend

China Again Fell to the Third Largest Trading Partner Position of the U.S.

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that, in the first four months of this year, the largest trading partner of the United States was Canada, with a bilateral trade volume of US$258.5 billion. Mexico also surpassed China to become the second largest trading partner of the United States, with a bilateral trade volume of $249.8 billion. China fell to the third position, with the total bilateral trade volume of US$241.1 billion. The primary reason for the US-China trade decline is that, in April, U.S. exports to China fell by $1.6 billion, and imports from China fell by $10.1 billion. An important reason for the continued rise in total U.S. trade is that inflation is going global, driving up the prices of imported goods. As we all know, inflation in the United States is very serious at the moment.The inflation rate has reached its highest level in 40 years. Consumer prices have continued to rise, especially gas prices. Thus the U.S. government has been heavily criticized. The U.S. Federal Reserve has already acted and raised interest rates. At present, the U.S. dollar is relatively strong and the currencies of many countries have depreciated, which will help promote U.S. imports. As the world’s factory, China has been the world’s largest trading country for many years. Last year’s total import and export trade volume exceeded US$6 trillion. The United States is China’s largest trading partner.

Source: NetEase, June 9, 2022
https://www.163.com/dy/article/H9DP12BI0519TG73.html

Briefings | | |   Economy/Resources US-China Relations

Japan Plans to Establish a New “Integrated Commander” Position

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that relevant sources in the Japanese government revealed that the Ministry of Defense of Japan has generally decided to establish an “integrated commander” to unify the land, sea and Air Self-Defense Forces, as well as an “integrated command” to support the new position. Regarding the motives for the Japanese Ministry of Defense to make this move, Kyodo News said that the Ministry was mainly considering China’s increased maritime activities and new security areas like space, computer networks, and electromagnetic waves, and other areas. Therefore, Japan believed that there is a necessity to have a new dedicated position to improve mobility. Before the end of the year, the Japanese government will revise defense documents such as the National Security Strategy,” the Defense Plan Outline, and the Mid-term Defense Capacity Improvement Plan.  Various branches of the government are coordinating the updates to include the creation of the “integrated commander” in these official documents.

Source: Sohu, June 8, 2022
https://www.sohu.com/a/555167675_114911

Briefings | | |   Geo-Strategic Trend

Global Times: India and EU to Resume Free Trade Agreement Talks This Month

Global Times recently reported that India’s Ministry of Commerce and Industry said India and the European Union will resume free trade agreement negotiations, which have been stalled for nine years. The first round of negotiations between the two sides is scheduled to start in New Delhi on June 27. For India, this will be one of its most important free trade agreements as the EU is its second largest trading partner after the United States. Between 2021 and 2022, India’s merchandise trade with the EU reached a record high of US$116.36 billion, up 43.5 percent year-over-year. India’s exports to the EU are expected to grow 57 percent to US$65 billion in Fiscal Year 2021-2022. India is currently the EU’s tenth largest trading partner. Before Brexit, an EU study showed that a free trade deal with India would bring benefits worth US$10 billion. Negotiations on a free trade agreement between India and the EU began in 2007, but they were shelved in 2013 due to differences over issues like tariffs on cars and wine. In April this year, the European Commission President Von der Leyen Von der Leyen visited India, and Indian President Narendra Modi also visited Europe in May. The two leaders settled on the roadmap for the negotiation.

Source: Global Times, June 18, 2022
https://world.huanqiu.com/article/48TbaJjAZtw

Briefings | | |   Geo-Strategic Trend

The CCP Will Strictly Control High Officials’ Spouses and Children Who Run a Business

According to Xinhua News Agency, the General Office of the Central Committee of the Chinese Communist Party (CCP) recently issued “Regulations on the business activities of high officials’ spouses, their children and their spouses.” The regulation offers clear and specific provisions on the applicable objects and circumstances, working measures and disciplinary requirements concerning officials’ spouses, their children and their spouses who run businesses or enterprises. The higher the level of an officials’ position, the stricter the requirements, and the integrated departments are stricter than other departments.

The “regulations” apply mainly to the officials of the CCP’s and the government’s organs, groups and organizations, enterprises and institutions at the level of department and bureau and above including the equivalent level of any position.

As for what is called “running a business or an enterprise,” it mainly refers to investing in the start of a business, holding senior positions in private or foreign-funded enterprises, investing in and engaging in private equity funds, and engaging in paid social intermediary and legal services.

According to the regulation, officials are required to report on the business activities of their relatives every year. False reporting will lead to severe punishment.

For those who are “to be promoted or further employed ” if they do not meet the regulations on the prohibition of employment for the proposed post, they should quit the business and enterprises, or will not be appointed.

Source: Creaders.net, June 19, 2022.
https://news.creaders.net/china/2022/06/19/2495931.html

Briefings | | |   Government/Politics

The CCP’s Solution to College Graduates’ Unemployment: Send Them to a Remote Farmland

Chinese college graduates have faced a severe job shortage for years. The National Bureau of Statistics reported in May that the nationwide unemployment rate in April was 6.1 percent. It was 18.2 percent for people whose ages were between 16 and 24. Things will be even worse when 10.76 million students graduate from college in the upcoming two months.

The Chinese Communist Party’s solution is to send the college graduates to farmlands. Recently, the Ministry of Civil Affairs, the Ministry of Education, the Ministry of Finance, and the Ministry of Human Resources and Social Security jointly issued a notice to guide college graduates to work or establish their own business in remote towns or rural communities and ask villages to “actively absorb college graduates to serve as village workers.”

The government will provide incentives to small businesses that employ college graduates in villages, home services, and elderly care. However, Chinese college graduates prefer to work for high-paying companies in large cities, and there is a wide income gap between rural and urban areas.

People compare this government initiative to the “Up to the Mountains and Down to the Countryside (上山下乡)” movement that Mao Zedong initiated for the city teenagers during the Cultural Revolution. During that campaign, Mao sent several millions of teenagers from the cities to live in remote farmland for ten years, separating them from their families and ruining their lives.

Source: Epoch Times, June 13, 2022
https://www.epochtimes.com/gb/22/6/13/n137588in57.htm

Briefings | | |   Economy/Resources Government/Politics

Beijing Asked Foreign Investment Banks To Cut Pay to Their Executives in China

Bloomberg recently reported that China’s regulatory authorities summoned foreign investment banks, including Credit Suisse, Goldman Sachs, and UBS.  Beijing asked them to lower the total compensation to their executives in China and defer their bonus payments for over three years. The Chinese authorities said their substantial compensation is opposed to the “common prosperity” policy that the Chinese Communist Party (CCP) promoted last year.

These foreign investment banks often hire top CCP officials’ children or grandchildren so that they can use their parents’ or grandparents’ power and influence to bring big business to the firm. In return these financial firms pay them decently and feel that pay is well worth it.

Source: Liberty Times, June 14, 2022
https://ec.ltn.com.tw/article/breakingnews/3959213

Briefings | | |   Economy/Resources Government/Politics