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Briefings - 16. page

Local Governments in China Accused of Inflating Fiscal Revenues Through Falsification

Yicai, a newspaper based in China, discussed the issue of local governments falsely inflating their fiscal revenue figures, as revealed in recent audit reports across the country. This has become a persistent problem, motivated by the desire to bolster performance metrics for government officials.

The article cites several examples from audit reports in different provinces. In Guangdong, 3 cities and 3 counties were found to have increased fiscal revenue by 17.101 billion RMB through state-owned enterprise asset purchases. Hebei’s audit found 1 city and 7 counties had artificially inflated revenue by 2.495 billion RMB through fake asset disposals and overpayments. Audits in Sichuan, Qinghai, Inner Mongolia, and Liaoning also uncovered hundreds of millions to billions of RMB in falsified revenue.

Experts argue this practice conceals true fiscal deficits, amplifies local financial risks, and distorts central government’s understanding of local fiscal conditions, potentially leading to misguided policymaking and damaging government credibility.

To address the problem, the report suggests that local governments realign performance incentives away from rigid revenue targets. Ongoing tax and fiscal reforms to bolster local fiscal autonomy could also help reduce the pressure to fabricate numbers. Stronger oversight and strict accountability for responsible officials are also recommended.

The article also notes audit reports have proposed improving revenue collection management, data sharing across departments, and plugging institutional loopholes to ensure comprehensive and accurate fiscal revenue reporting.

Source: Central News Agency, August 20, 2024
https://www.cna.com.tw/news/acn/202408200177.aspx

Briefings | | |   Economy/Resources

Leaked Documents Reveal CCP Plan to “Eliminate” Falun Gong, Escalating Persecution

The Falun Dafa Information Center has reportedly obtained information from insiders in China’s Ministry of Public Security’s (MPS) regarding the organization’s new plan to “dismantle Falun Gong worldwide,” including in the United States. Falun Gong (also called Falun Dafa) “is an ancient spiritual practice in the Buddhist tradition.” The Chinese Communist Party (CCP) started persecuting Falun Gong in 1999 and has continued its persecution of the practice until today. The CCP has also targeted the Shen Yun performing arts group, which showcases traditional Chinese culture and religious beliefs and aims to raise awareness about the CCP’s persecution of Falun Gong.

The Falun Dafa Information Center’s report stated that “it is abundantly clear both from sources inside China as well as from observable attacks (on Falun Gong and Shen Yun) over the past few months that these escalations against Falun Gong have already begun and are trending into uncharted territory. The internal documents explicitly state that the regime’s aim is to ‘eliminate Falun Gong worldwide.’”

The MPS’ new plan has five tactics:

  1. “Coordinated propaganda attacks against Shen Yun, Falun Gong”
  2. “Inciting conflict between Falun Gong and the U.S. Government”
    The MPS indicates it will deploy a two-pronged strategy:

    1. Incite Falun Gong practitioners to distrust and even protest the U.S. government.
    2. Provoke the U.S. government to investigate Shen Yun Performing Arts and other organizations founded by Falun Gong practitioners.
  3. “Cutting communication channels that expose persecution inside China,” blocking Falun Gong practitioners in China from contacting their overseas supporters
  4. “Manipulating search engines and disseminating content in multiple formats” as a means to “carry out the offensive” against Falun Gong.
  5. “Provoking distrust and internal divisions within the Falun Gong community”

Source: Falun Dafa Information Center website
https://faluninfo.net/weaponizing-social-media/

Briefings | | |   @CS Government/Politics Social Stability US-China Relations

Retired CCP Cadre and Professor Urges CCP to Step Down, Proposes “Federal Republic of China” Unifying Mainland China with Taiwan

Veteran Chinese Communist Party (CCP) cadre and retired professor from Renmin University, Leng Jiepu, recently published an open letter addressed to the two Vice Chairmen of the CCP Central Military Commission, proposing the establishment of a Federal Republic of China and urged the CCP to step down.

The open letter is available on X platform. Leng talked with a reporter from the Epoch Times on August 11 to confirm that he was the author of the open letter.

Leng’s letter was addressed to Zhang Youxia and He Weidong, the two Vice Chairmen of the Central Military Commission, and was also communicated to the general public. He mentioned that he had learned that Xi Jinping was very ill and unable to work and that all party, government, and military affairs had fallen on Zhang and He. He expressed his hopes the two would support his proposal. Leng mentioned that the hanging of a large banner “The CCP Must Step Down” on Sitong bridge in Beijing in 2022 and the march with banners calling for the “Downfall of the CCP” in several cities have indicated that “the situation (for the CCP) is not optimistic.” He therefore suggested that the CCP take “the route of compromise” by establishing a Federal Republic of China and unifying the country with Taiwan, calling his proposal “the best possible solution.” He also proposed specific operational steps, including the formation of a “Grand Committee for the Unification of the Chinese Nation.”

Source:
1. Epoch Times, August 12, 2024
https://www.epochtimes.com/gb/24/8/12/n14309516.htm
2. X Platform, @china_epoch
https://x.com/china_epoch/status/1822441580361372096?s=42

Briefings | | |   @CS Government/Politics

Xiamen University: “Urgently Prepare for Taiwan Takeover”

On August 5th, the Xiamen University Cross-Strait Urban Planning Research Institute published an article titled “Urgently Prepare for Taiwan Takeover.” The paper stated that, with the increasing likelihood of Donald Trump’s victory in the U.S. presidential election, Beijing’s “unification” with Taiwan could come sooner than expected. According to the article, the “turmoil” observed in Hong Kong over the past few years shows that “lack of full preparation could have serious consequences for a smooth power transition.” Since Hong Kong’s policy of “50 years of no change” does not apply to Taiwan, the depth and breadth of the mainland’s takeover of Taiwan will far exceed that of Hong Kong in 1997, according to the article. “It is urgent to prepare comprehensive plans for taking over Taiwan after unification.”

The article was taken down shortly after publication. However, the Center for Strategic and International Studies (CSIS), a Washington-based think tank, has preserved the article and translated it into English on its website.

The CSIS published the following “key takeaways” regarding the Xiamen paper:

  • Researchers at the Xiamen University Cross-Strait Institute of Urban Planning argue Beijing should set up a shadow government in preparation for intended “reunification” with Taiwan.
  • The unnamed authors suggest that “reunification” will be a complex process, and the “One Country, Two Systems” model Beijing has adopted toward Hong Kong would be inappropriate for governing Taiwan. Instead, they argue that “full integration into the mainland” should be Beijing’s goal.
  • They suggest Beijing set up a “Central Taiwan Work Committee” to research and prepare “post-takeover” policies on a variety of issues – including currency conversion, education systems, military integration, and customs, among others – based on a solid understanding of existing policies and institutions in Taiwan.
  • They also recommend Beijing set up a “Taiwan Governance Experimental Zone,” which would be a “highly realistic physical environment” for simulating and testing out governance practices prior to “reunification.” This would involve recruiting retired military officers, civil servants, and teachers from Taiwan to train cadres from the mainland in how to govern Taiwan (thereby conferring what they call “regime building experience”).
  • Importantly, the authors suggest that these activities will speed up the process of “reunification” by shaping political dynamics in Taiwan and encouraging what they call “anti-Taiwan independence” forces on the island to better organize and vocalize their positions.

Sources:
1. Radio France International, August 17, 2024
https://www.rfi.fr/cn/台湾/20240817-厦门大学呼吁尽快准备-接管台湾-并称没有类似香港50年不变问题-此文遭下架
2. CSIS website, August 5, 2024

Start Taiwan Takeover Preparations as Soon as Possible

Briefings | | |   @CS Geo-Strategic Trend

Another Chinese Young Man Confronts CCP, Calls for Xi Jinping’s Resignation

Recently a Chinese young man has attracted attention by calling for the ouster of Xi Jinping using a wifi router to spread his message.

On August 14, Su Yutong, a Chinese freelance writer living in Germany, released a video on the web and stated: “A young person from China who has been promoting the movement to dismantle the Great Firewall (CCP’s internet censorship/blockade system) was imprisoned in a psychiatric hospital on political charges. This morning, I received this video showing that he has once again confronted the CCP.” In the video, the young man shouted: “Oppose the CCP’s internet censorship and control of speech,” “No privileges, we want equality,” and “We need freedom of speech and internet freedom.” The video was recorded outdoors. The young man hoped that Chinese people would be able to “see the true face of the CCP.” The young man also mentioned that, in the past, he had used routers and other equipment to broadcast messages such as “Xi Jinping, step down.” The authorities issued a warrant for him as a “political criminal,” ransacked his home, and confiscated his equipment including routers, laser sound systems, transmitter modules, and mobile phones.

On August 16, Su Yutong posted again on the X platform again, identifying the young man as Yan Zhongjian, born in February 1999. Su received a message from a friend entrusted by Yan: the friend and Yan had agreed that, if Yan could not be contacted for a certain period of time, the friend would release Yan’s personal information and call on netizens to show concern and support for him.

The young man followed in the footsteps of several other dissidents in recent history. For example, in October 2022 Peng Lifa posted banners and played recordings denouncing the Chinese Communist Party and asking for the ouster of Xi Jinping. On July 30 of this year, Fang Yirong posted similar messages on an overpass in Hunan Province (see this ChinaScope briefing).

Source: Epoch Times, August 17, 2024
https://www.epochtimes.com/gb/24/8/17/n14313098.htm

Briefings | | |   @CS Government/Politics Social Stability

China News: Thailand to Strictly Control the Quality of Imported Products

China News recently reported that the government of Thailand has ordered relevant governmental departments to strictly control the quality standards of products imported from abroad so as to reduce the impact of illegal and substandard products on Thai consumers and businesses. The orders apply to goods traded both offline and online. The Thai Ministry of Commerce and relevant agencies have discussed the implementation of standards and regulations for imported products. In addition, the Thai government has also decided to levy value-added tax on imported products purchased online with a value of less than 1,500 baht (around US$44).

For offline imported goods, the government will inspect low-cost products from abroad and check whether commercial institutions comply with Thai laws, such as whether business registration is legal, whether foreigners in Thailand apply for work permits, whether intellectual property rights are infringed, etc. For online product sales platforms, Thailand Customs will conduct quality standard inspections on products imported from overseas after being purchased online. This new government order to strictly control the quality of foreign products is intended to allow Thai people to use high-quality, standardized products while protecting the interests of domestic Thai companies.

Source: China News, August 13, 2024
https://m.chinanews.com/wap/detail/cht/zw/10267903.shtml

Briefings | | |   Geo-Strategic Trend

Lianhe Zaobao: MSCI Index Removes 60 Chinese Stocks

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that MSCI, a stock market index compilation company, removed 60 Chinese stocks from its indices. The stocks will be dropped both from the MSCI China Index as well as from the MSCI All Country World Index. This is likely a reflection of global investors’ cautious attitude towards Chinese A-shares. The latest adjustment by MSCI may further intensify the downward pressure on China’s stock market.

The MSCI August Index Review results showed that the MSCI China Index added two component stocks, both A-shares, while excluding 60 constituent stocks, including five Hong Kong HKSE stocks and 55 Mainland A-shares.

China’s economic outlook is increasingly bleak, with the country’s stocks at risk of losing their  dominance in emerging market portfolios to rivals such as India and Taiwan. After MSCI’s adjustments, the number of MSCI China Index constituent stocks has been reduced from 655 to 597, comprising 432 A-shares, with a weight of 15.2 percent; 148 Hong Kong stocks, with a weight of 75.3 percent; 14 U.S. Chinese-concept stocks, with a weight of 9.2 percent; and three B-shares with the weight of 0.2 percent.

Sources:

Lianhe Zaobao, August 13, 2024
https://www.zaobao.com.sg/news/china/story20240813-4481962

Bloomberg, August 13, 2024
https://www.bloomberg.com/news/articles/2024-08-13/msci-trims-china-s-index-presence-by-removing-dozens-of-stocks

Briefings | | |   Economy/Resources US-China Relations

HP Comments on Reports Saying That it Will Reduce Production Footprint in China

According to well-known Chinese news site Sina (NASDAQ: SINA), some recent media reports have said that HP was seeking to move more than half of its PC production out of China. HP responded by calling these reports incorrect. Instead, HP confirmed that “In China, HP’s PC manufacturing business still maintains a pivotal position.” However, HP also indicated in the same response that “to further enhance the resilience of the supply chain, we are actively optimizing our strategy and enhancing flexibility to better serve our global customer base.”

Earlier, Nikkei Asia reported that HP is considering moving more than half of its PC production out of China and setting up a “backup” design center in Singapore, citing “geopolitical risks.” The Nikkei Asia article did point out that the move is HP’s most aggressive move to “diversify its supply chain.” At present, most of HP’s PCs are produced in China. Nikkei Asia reported that HP is currently negotiating with suppliers on the migration and plans to achieve this target within two to three years. The company has even set an internal goal to eventually have 70 percent of its laptops produced outside of China. Nikkei Asia also reported that HP’s main destination for this relocation is Thailand. At least five HP suppliers are building new manufacturing plants or warehousing centers in Thailand.

Source: Sina, August 8, 2024
https://finance.sina.com.cn/roll/2024-08-08/doc-inchxefi8595209.shtml

Briefings | | |   Information/Technology US-China Relations