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Briefings - 165. page

CCP’s No. 1 Document: Food Security and Avoiding a Massive Return to Poverty

The Chinese Communist Party (CCP) issued a No. 1 document on February 22, a policy paper that traditionally focuses on the agriculture sector in rural China. This year’s document aims to “to ensure national food security” and “not to return to poverty on a large scale.”

The document “insists that the rice bowls of Chinese people are ‘filled with Chinese food,’ and ensures that the grain output is maintained at over 650 billion kilograms.”

The document also vows to implement hard measures to protect arable land, strictly adhering to the red line of 1.8 billion mu (1.2 million sq kilometers) of arable land.

The CCP announced that it got rid of poverty at the end of 2020. The new document tells the officials to “resolutely hold the bottom line of not returning to poverty on a large scale,” and put the rural households that are at risk of returning to poverty into the scope of monitoring.

Source: Central News Agency (Taiwan), February 22, 2022
https://www.cna.com.tw/news/acn/202202220389.aspx

Briefings | | |   Economy/Resources

China’s Banking Sector Comes to the Rescue of Real Estate Developers

The People’s Bank of China (PBOC), the country’s central bank, and the China Banking and Insurance Regulatory Commission (CBIRC), the chief regulator of the banking and insurance sector, jointly issued a circular at the end last year. It encouraged large state and private enterprises to merge and purchase (M&A) “high-quality projects” from real estate developers who are plagued by operational difficulties. It also urged financial institutions to provide these enterprises with the services that were needed for the acquisition.

At the beginning of this year, with support from the central government, the banking industry started to ease financing restrictions and release funds to support mergers and acquisitions. The number of real estate related M&A cases is on the rise.

The banking industry has injected at least 58 billion yuan ($US 9.15 billion) into the economy by issuing bonds, loans and other securitized assets.

A researcher at PBOC said, “Because of the lack of capital in the real estate industry, it is difficult to see large-scale M&A activities by the industry leaders. For some time in the future, banks will be an important source of funds.”

Source: Central News Agency (Taiwan), February 21, 2022
https://www.cna.com.tw/news/acn/202202210070.aspx

Briefings | | |   Economy/Resources

Global Times: India Banned 54 More Chinese Apps

Global Times recently reported, based on Indian media coverage, that the Indian government banned 54 more Chinese mobile apps for “threat to Indians’ privacy and security.” Many of these apps are products of large Chinese technology companies like Tencent, Alibaba and NetEase. Since June 2020, India has carried out four rounds of operations against Chinese apps, with a total of more than 270 apps banned. The current one is the fifth round of the Indian government’s crackdown on Chinese apps, and overall, more than 300 apps have been banned. This is the latest step taken by India against the backdrop of tensions between China and India due to border disputes. The latest 54 banned apps are mostly those banned by the Indian government two years ago but have since been repackaged. Many apps owned by Tencent and Alibaba have changed hands to hide ownership and are hosted in regions like Hong Kong or Singapore, but the data ends up being sent to servers in China. A senior Indian official said on condition of anonymity that, the government has taken notice of this. The Ministry of Electronics and Information Technology of India issued a statement saying that it had received a request from the Ministry of the Interior of India to implement an emergency blocking of 54 applications in accordance with relevant laws. The statement said the 54 apps gained a number of key permissions and collected sensitive data from users. The Chinese government has stated on many occasions that it firmly opposes India’s repeated use of “national security” as an excuse to ban apps with Chinese backgrounds. Such practices violate the WTO principle of non-discrimination and the principle of fair competition in the market economy.

Source: Global Times, February 15, 2022
https://world.huanqiu.com/article/46osKXPY6dp

Briefings | | |   Geo-Strategic Trend Information/Technology

U.S. Notorious Market List Targeted Chinese Companies Again

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that the United States Trade Representative (USTR) just released the so-called “2021 Counterfeit and Piracy Notorious Market Report.” AliExpress and Tencent’s WeChat and Ecosystem were newly included in this year’s list. Chinese companies such as Pinduoduo (NASDAQ: PDD), Taobao and Baidu (NASDAQ: BIDU) Netdisk, which had made it to the list before, remain listed. In total, the USTR Report identified 42 online and 35 brick-and-mortar markets around the world, which the report states, “are reported to have engaged in or facilitated substantial trademark counterfeiting or copyright piracy.” The USTR Report reflected what the Biden-Harris administration called “worker-centric trade policies.” U.S. Trade Representative Katherine Tai claimed that “global trade of counterfeit and pirated goods undermines critical U.S. innovation and creativity, harming American workers.” In recent years, the United States has used export control as a tool of political suppression and economic bullying and has continuously taken unilateral measures to suppress and contain other countries’ enterprises, institutions and individuals, creating difficulties and obstacles, jeopardizing the international economic and trade order, as well as free trade rules. As early as January 12, 2018, the Office of the United States Trade Representative issued a so-called report on intellectual property protection in 2017, in which 9 Chinese markets were included in the list of “notorious markets.”

Source: Sina, February 18, 2022
https://cj.sina.com.cn/articles/view/1887344341/707e96d5020017pw9

Briefings | | |   US-China Relations

Lianhe Zaobao: U.S. Has No Intention to Engage with China on Indo-Pacific Economic Framework

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that Daniel Kritenbrink, the U.S. Assistant Secretary of State for East Asian and Pacific Affairs, said that the U.S. has no intention of engaging with China in the upcoming Indo-Pacific Economic Framework. However, it is in discussions with partners who share the same vision for a free and open region without coercion. The U.S. is in preliminary talks on the Economic Framework and currently does not intend to involve the People’s Republic of China in the Framework. Kritenbrink said that the U.S. is in initial dialogues with partners across the region who share the same vision of living again in a free and open region where nations are free to pursue economic and security interests. The United States released an Indo-Pacific strategy report on the 11th of this month, vowing to invest more diplomatic and security resources in the Indo-Pacific region to resist China, which it accused of trying to expand its influence in the Indo-Pacific region. This is the first regional strategy report of the U.S. Biden Administration. The strategy report said it will focus on the areas from South Asia to the Pacific Islands to strengthen the United States’ long-term position and commitment to the Indo-Pacific region. According to a recent study that the ASEAN Studies Centre – ISEAS-Yusof Ishak Institute in Singapore conducted, the U.S. government refocused on Indo-Pacific, boosting Southeast Asian countries’ confidence in U.S. leadership. However, in terms of economic, political and strategic influence, Southeast Asian countries generally believe that China has more influence in the region.

Source: Lianhe Zaobao, February 17, 2022
https://www.zaobao.com.sg/realtime/china/story20220217-1243762

Briefings | | |   Geo-Strategic Trend US-China Relations

Beijing Is Building Mega Steel Companies in China

On February 7, the Ministry of Industry and Information Technology and three other departments in China issued a “Guidance on Promoting the High-Quality Development of the Iron and Steel Industry, hereinafter referred to as the Guidance. It clearly encourages leading enterprises in the industry to implement mergers and reorganizations to build several world-class mega steel enterprise groups.

The Guidance makes concrete arrangements for steel industry mergers and reorganizations. One to two specialized pilot enterprises will be formed relying on the leading enterprises in stainless steel, special steel, seamless steel tubes, castings and other fields, respectively. It encourages cross-regional, cross-ownership mergers and reorganizations of steel enterprises to change the so called “small and scattered” situation in this industry in some regions, to enhance the endogenous power of enterprises’ development. The independent hot rolling and independent coking enterprises in Beijing, Tianjin, Hebei and surrounding areas will be led in an orderly manner to participate in the merger and reorganization of steel enterprises. The Guidance mentioned that those enterprises that have completed the mergers and reorganizations will be given capacity replacement policy support during their smelting project construction. The Guidance also encourages Chinese financial institutions actively to offer integrated financial services to those steel enterprises which implement mergers and reorganizations, layout adjustments, transformation and upgrading based on risk-controlled, commercially sustainable principles.

Li Xinchuang, chief engineer of the Metallurgical Industry Planning and Research Institute, said that the concentration in the domestic steel industry is still less than 40 percent. China’s steel industry has now ushered in an important window of mergers and reorganizations and a period of historic opportunity. Given the background that the output of the iron and steel industry has entered the peak platform area, it is the key to the healthy and high-quality development of the industry to intensify the merger and reorganization of iron and steel and improve the concentration of the industry.

Cross-regional and cross-ownership mergers and acquisitions 

Mergers and reorganizations are one of the key tasks of the steel industry this year. Peng Huagang, the Secretary-General of the State-owned Assets Supervision and Administration Commission, clearly stated at a press conference of the State Council Information Office in January this year that the restructuring and integration of steel and other fields will be steadily promoted and new central enterprise groups will be established in a timely manner in related fields.

Chen Derong, chairman of the China Iron and Steel Association and chairman of China Baowu, said that China’s steel industry has broken the “small and scattered” situation, where state-owned steel enterprises or private steel enterprises are promoting mergers and reorganizations. As a group of more than 50 million tons of ultra-large steel enterprises are rising, the concentration in the steel industry will be further enhanced.

Wang Guoqing, director of the Lange Steel Research Center, located in Beijing and established in 2005 as the No.1 steel information research center in China, told China Business News that, in the future, the merger and reorganizations mode in the steel industry will continue to change the effect of restructuring and will also be more prominent; the industrial concentration is to be effectively enhanced. Therefore, the iron and steel industry is bound to speed up its transformation and upgrading, speed up the pace of mergers and reorganizations, eliminate outdated iron and steel enterprises that do not meet environmental protection standards, vigorously develop a circular economy, and promote the overall development of the iron and steel industry.

The concentration in the steel industry continues to increase 

As early as in September 2016, the State Council issued the “Guiding Opinions on Promoting the Merger, Restructuring and Disposing of Zombie Enterprises in the Steel Industry,” which clearly stated that, by 2025, 60 percent to 70 percent of the output of China’s steel industry will be concentrated in about 10 large groups, of which there are three to four 80-million-ton steel groups, six to eight 40-million-ton steel groups plus some specialized steel groups.

Aiming toward this general goal, the steel industry mergers and reorganizations will be divided into three steps: the first step will focus on reducing production capacity by 2018 and clearing what should be cleared. At the same time, it will demonstrate the next merger and reorganization, such as the merger and reorganization of Baosteel and Wuhan Iron and Steel. The second step is to improve the merger and reorganization policy from 2018 to 2020. The third step is to promote the merger and reorganization of the steel industry on a large scale from 2020 to 2025.

Since 2021, the merger and reorganization of the steel industry has accelerated significantly. Anshan Iron and Steel merged with and reorganized Benxi Iron and Steel to form the second largest steel group in China and the third largest steel group in the world. This further promoted the formation of a new industrial development pattern; Baowu reorganized Kun Steel and signed an agreement with the Shandong Provincial State-owned Assets Supervision and Administration Commission to reorganize the Shan Steel Group. The reorganization of Baowu’s capacity scale is expected to reach 150 million tons.  Shasteel mixed reform Anyang Huacheng and five other enterprises. Puyang Steel reorganized Xing Steel, and so on.

At the same time, the level of the steel industry chain and the supply chain have been further improved. CITIC Special Steel has strengthened cooperation with upstream and downstream enterprises to enhance the overall competitive advantage of the industrial chain. Jiu Steel has accelerated the construction of a modern industrial system through a series of measures such as coordination to stabilize the chain, project extension, technology strengthening, and investment promotion.

According to the data released by the China Iron and Steel Association, the pace of mergers and reorganizations of Chinese iron and steel enterprises has accelerated, which has promoted the further improvement of industrial concentration. At the end of 2021, the steel output of the top 10 and top 20 enterprises in steel production accounted for 40.39 percent and 54.85 percent respectively. of the national steel output, , an increase of 2.99 and 3.26 percentage points over the same period of the previous year.

Source: China News Service, February 8, 2022
https://www.chinanews.com.cn/cj/2022/02-08/9670947.shtml

Briefings | | |   Economy/Resources

Did The CCP Violate Its Own Nationality Law to Cheat in the Winter Olympic Games?

There have been questions about whether the Chinese Communist Party (CCP) cheated the world in sending athletes, who technically are not Chinese nationals, to represent China when competing in the Beijing Winter Olympic Games.

China’s own law does not recognize dual citizenship. Article 3 of China’s Nationality Law states that, “Chinese citizens are not recognized as having dual nationality.” Article 8 states that foreign nationals who are approved for Chinese nationality “may no longer retain foreign nationality.” China’s National Immigration Administration explicitly states in the Instructions for Applying for Chinese Nationality,  “After being approved for Chinese nationality, you may not retain your foreign nationality.”

Rule 41 of Olympic Charter states that any competitor in the Olympic Games must be a national of the country of the NOC which is entering such competitor. A competitor who is a national of two or more countries at the same time may represent either one of them, as he may elect.

Therefore, since China does not allow dual citizenship, whichever athlete represents China in the Beijing Olympic Games must be of Chinese nationality and only of Chinese nationality. H or she cannot have another nationality from another country.

Eileen Gu, an American  whose mother was a Chinese American, represented China and won a gold medal and a silver one in freestyle skiing. However, in the United States Federal Register which publishes the list of people giving up their U.S. nationality, there is no such record for Gu,  indicating theat Gu may not have given up her U.S. citizenship and therefore she is not a Chinese national based on China’s own law. Gu didn’t answer her citizenship questions directly, but she said that she is American when she is in the United States and Chinese when she is  in China.

Jeremy Smith, the goalie of the hockey team Bridgeport Sound Tigers affiliated with the New York Islanders, was recruited to China’s national hockey team. Smith stated that he would not give up his U.S. citizenship and was told it would not be an issue.

The athletes may not be legal experts and may have been promised not to worry about the nationality issue. What should be scrutinized here is whether the CCP, in order to look good in the Olympics, is violating its own law.

Source: Epoch Times, February 15, 2022
https://www.epochtimes.com/gb/22/2/15/n13578136.htm

Briefings | | |   Government/Politics

China’s Biotech Companies Operating in the U.S.

Epoch Times published an article  pointing out that a growing number of biotech, genomics, and med-tech firms that have ties to the Chinese Communist Party (CCP) are operating in the United States, raising security concerns about American citizens’ medical and genetic data.

The article listed several Chinese companies as examples:

  • China’s Lepu Biopharma Co. 0pened its U.S. branch Innocube Bioscience, Inc. in Texas. Beijing’s sovereign wealth fund, the State Development and Investment Corporation (SDIC), heavily invests in Lepu.
  • BeiGene, a Chinese pharmaceutical and research firm located in San Mateo, California, conducts research on targeted molecular agents related to gene sequencing. The company’s research center in China has received significant local government funding.
  • The PLA-linked BGI Group purchased Complete Genomics, a California-based company that holds the genetic information of U.S. citizens. Several of China’s sovereign wealth funds have invested in the company.
  • The Chinese firm WuXi Pharma Tech acquired U.S. genomic information company NextCODE Health in 2015.
  • Also In 2015, IuXi Biologics, bought a stake in an American DNA testing company, 23andMe. WuXi Biologics now has locations in Massachusetts and New Jersey. Its drug plant in Delaware was built with a Chinese government grant.
  • WuXi Advanced Therapies (WuXi ATU) announced the opening of a cell and gene therapy testing facility in the Philadelphia Navy Yard in November 2021.

The article also said that U.S. money has aided the CCP’s infiltration of the U.S. bio and medical industries. Last month, Chinese firm Andon Health Co. received a $1.28 billion contract from the U.S. Army Contracting Command to supply COVID-19 self-test kits. A subsidiary of Andon, iHealth Labs, signed a contract with the New York State Department of Health in December for $120 million worth of self-test kits.

Source: Epoch Times, February 7, 2022
https://www.theepochtimes.com/ccp-investment-in-us-biopharm-and-genomics-companies-raises-security-concerns_4259581.html

Briefings | | |   Economy/Resources