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Indian Scholar on China’s Promised Aid to Afghanistan

Not long ago, Chinese Foreign Minister Wang Yi announced that China has decided to provide Afghanistan 200 million yuan (US$31 million) worth of food, winter supplies, vaccines and medicine. China also promised, when security and other conditions are in place, to help build projects there to improve people’s livelihood and to support Afghanistan’s peaceful reconstruction and economic development.

Nandan Unnikrishnan, an Indian political scientist and honorary member of the Observer Research Foundation in New Delhi, India, said, “People just forget that in 1996 and 2001, respectively, China and the Taliban (a group banned in Russia) reached an agreement on the exploitation of mineral resources. So, this is not the first time for China.”

During the period of the Taliban’s rule from 1996 till 2001, China and the Taliban had some low level economic and technical cooperation. Some accounts suggest that after the US’ cruise missile attack on Afghani militant bases, Beijing reached out to the Taliban to offer Chinese support in the form of access to a missile computer guidance system. As the Taliban strengthened its hold over the country, Beijing signed a military pact in 1998 to train Afghan (and therefore Taliban) pilots. Then in 1999 they signed an economic cooperation agreement.

Source: Sputnik News, September 12, 2021
https://sputniknews.cn/politics/202109121034450249/
Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA), September 03, 2021
https://idsa.in/issuebrief/beijings-strategic-moments-taliban-jpanda-030921

Briefings | | |   Geo-Strategic Trend

Think Tank Report Points to Widened North-South Gap

On September 8, the Academy of National Development and Strategy at Renmin University of China (RUC), RUC’s School of Economics, and China Chengxin Credit Ratings, jointly issued a special report on China’s macro economy. The report states that the gap between economic development in the north and in the south of China continues to widen and has “reached a point that cannot be ignored.”

The report mentions three areas of imbalance: manufacturing, investment, and R&D and innovation.

The secondary (manufacturing) industry in the North has been stagnant over the past decade. The years between 2012 and 2020 saw zero nominal growth of that sector in northern China.

Although southern China’s consumption, investment and import and export growth are all higher than in Northern China, the main issue is investment. By 2017, investments in the North had plateaued. The gap in exports between the two regions is alarming. At present, 80 percent of the country’s exports come from the South, and the North accounts for only 20 percent.

The North also lags behind in R&D and innovation. A decade ago, the R&D funding, manpower and number of projects in the South was about twice as much as in the North. Now the gap has enlarged so it is about 3 or 4 times as much.

Over the past 10 years, southern China has registered a speedier industrial development. Twenty years ago, the number of large size industrial enterprises in the South was 1.56 times as much as the number in the northern region. Now the difference has widened to 2.65 times as much.

Source: Central News Agency, September 10, 2021
https://www.cna.com.tw/news/acn/202109100255.aspx

Briefings | | |   Economy/Resources

Xinhua: Wang Yi Attended the First Meeting of Foreign Ministers of Afghanistan’s Neighbors

Xinhua recently reported that, on September 8, Chinese State Councilor and Minister of Foreign Affairs Wang Yi attended the first meeting of Afghanistan’s neighboring foreign ministers. Wang said Afghanistan today stands at the crossroads of history. China, as a neighbor, should seize the critical time window of the transition and exert a positive influence on the changes in the situation. China agreed to institutionalize the Afghan Neighboring Foreign Ministers’ Meeting. The first meeting was chaired by the foreign minister of Pakistan. The foreign ministers or deputies of Iran, Tajikistan, Uzbekistan, and Turkmenistan also attended the meeting. Right before the meeting, Dai Bing, Chargé d’affaires of the Permanent Mission of China to the United Nations, said at the UN Security Council that the evolution of the Afghanistan issue shows that foreign military intervention will eventually end in failure. The hastily and disorderly withdrawal of a certain country’s troops from Afghanistan has caused Kabul to fall into chaos and turmoil, leading to a major humanitarian disaster.

Source: Xinhua, September 8, 2021
http://www.news.cn/mrdx/2021-09/09/c_1310177719.htm

Briefings | | |   Geo-Strategic Trend

State-owned Enterprises Ordered to Migrate to State-owned Cloud Services

China’s national data security law went into effect on September 1, 2021. Just days before it became effective, the China State Council’s State-owned Assets Supervision and Administration Commission (SASAC) for Tianjin issued a directive mandating state-owned enterprises in Tianjin to accelerate data migration from cloud services of tech companies like Alibaba and Tencent to the state-owned infrastructure. Currently, Alibaba, Huawei, and Tencent dominate the cloud computing market in China.

In a directive dated August 12, 2021, Tianjin’s SASAC directed state-owned enterprises in Tianjin not to build new data centers, or purchase servers and other storage hardware. State-owned enterprises cannot renew or sign new contracts with cloud platforms owned by Huawei, Alibaba, Tencent, China Unicom, China Mobile, and China Telecom. Data stored in these platforms must be migrated to cloud platforms controlled by SASAC within two months of the expiration of existing contracts, with the final deadline being at the end of September 2021.

Section 3(3)(1) on page 7 of the SASAC directive reads, “The data of state-owned enterprises are state assets and must be put under state-owned assets supervision and administration…”

Since early 2021, local SASACs have started local state-owned cloud platform projects. The essence of “state-owned cloud” is to shift from a cloud platform hosted by a third party to a state-owned cloud built and operated by local state-owned enterprises. In March 2021, Tianjin state-owned cloud started operation, with three state-owned enterprises, including Tianjin Communications Group and Tianjin State-owned Capital Investment and Operation Co., Ltd. In March, the SASAC of Zhejiang Province also initiated a project that included a state-owned cloud platform. In April, SASAC of Sichuan Province officially kicked off its state-owned cloud platform.

Sources:

Lianhe Zaobao, September 4, 2021
http://www.haozaobao.com/shiju/20210904/99713.html

State-owned Assets Supervision and Administration Commission of Tianjin, August 12, 2021
http://www.d1net.com/uploadfile/2021/0827/20210827062000825.pdf

Yicai, September 7, 2021
https://www.yicai.com/news/101166263.html

Briefings | | |   Information/Technology

China Has 149 “Aged” Cities

According to the internationally accepted standard, a region in which the percentage of the population aged 65 and over has reached 7 percent is called an aging society. When the population that is age 65 and over reaches 14 percent, It is called an “aged” society.  When those over 65 exceeds 20 percent, it is called a “hyper-aged” society.

According to China’s 7th National Census data, in 2020, 149 cities had a population in which those over 65 years of age exceeded 14 percent, thus becoming “aged” cities. In terms of regional distribution, 41 of them are from the eastern coastal region, 36 are from the northeast region, and 72 are from the central and western regions. Overall, the “aged” cities are concentrated in the northeast and the central region, the Yangtze River Delta, the middle and lower reaches of the Yellow River, and the Chengdu-Chongqing city clusters.

A major reason is the exodus of young adults and the low percentage of working age population. The eastern cities of Shandong, Jiangsu and Zhejiang have many “aged” cities. In these more economically developed regions, the fertility rates tend to stay low.

Source: www.yicai.com, September 5, 2021
https://www.yicai.com/news/101164016.html

Briefings | | |   Economy/Resources

The Taliban Asked the U.S. to Release Afghanistan’s Frozen $10 Billion

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that the Afghan media quoted the Acting Minister of the Interior of the Taliban Provisional Government, Haqqani, as saying that the Taliban asked the United States to release Afghanistan’s frozen US$10 billion. Earlier, some news sources reported that the United States had frozen nearly $10 billion in reserve assets in the U.S. bank account of the Central Bank of Afghanistan. In addition, the Taliban also called on the United States to continue to supply Afghanistan with billions of dollars previously promised in aid. In the meantime, the Taliban asked the United States and the United Nations to remove the names of Taliban leaders from the sanctions list. The currently known assets of the Central Bank of Afghanistan include foreign exchange cash reserves, which are largely in U.S. dollars. The amount is around US$362 million. Afghanistan’s gold reserves are valued at about US$1.3 billion. Most of the reserves are stored in the Federal Reserve Bank of New York. The Afghanistan government has other investments worth US$6.1 billion, which are mostly in U.S. long-term Treasury bonds and short-term Treasury bonds.

Source: Sohu, September 9, 2021
https://www.sohu.com/a/488684475_162758

Briefings | | |   Geo-Strategic Trend

Global Times: Chinese Warships Must Speed Up their Appearance at Guam and Hawaii

Global Times recently posted an article with the author’s name Hu Xijin, the newspaper’s Editor in Chief. Hu offered a response to the recent U.S. Navy’s freedom of navigation mission in the South China Sea. The Southern China Military Theater announced its navy and its air force responded with a warning and a “drive-away.” Hu said there are disputes between China and the United States. However, international law does not give any country the power to use warships to forcibly break into and challenge the sovereignty claimed by other countries. The reason the U.S. dares to do this is that only it has the power to do so. However, “China is getting stronger.” Just telling this truth to the U.S. is not enough. China needs to take active actions. In the not-too-distant future, the U.S. will definitely see the People’s Liberation Army appear at its doorstep, like Guam and Hawaii. Hu expressed the belief that, sooner or later, there will be an accident in the South China Sea and it will happen between China and the United States. The United States is the greatest threat to peace in the South China Sea, and it may eventually ruin the peace there.

Source: Global Times, September 8, 2021
https://mp.weixin.qq.com/s/-g6chvkpY_kg2IKhV2BwUw

Briefings | | |   Defense/Military US-China Relations

Housing Market in 66 Cities Plunged in August

In August, 21 cities including Beijing, Chengdu, Shanghai, and Shenyang issued over 30 real estate policies to curb the overheated market. A report from the Shell Research Institute suggested that the new housing sales in August in 66 cities across the country continued to decline. According to the Shenzhen Municipal Bureau of Housing and Urban-rural Development, existing housing sales in July fell by more than 80 percent compared to July 2020. In August, it reached a 10-year low with only 2,043 existing home sales, a plunge of 77.28 percent year over year.

The National Daily Business News reported that land sales in 300 cities was 226.4 billion yuan (US$35 billion) in August, a decrease of 17 percent from July and a year over year decrease of 49 percent.

Real estate financing does not look rosy either. There were 62 foreign bonds issued in August, a decrease of 27 from the previous month. The total financing was 57.1 billion yuan (US$8.86 billion), a decrease of 39.8 percent from the previous month and a decrease of 54.2 percent from the same period last year.

Real estate developers are also facing mounting pressure on debt payment. According to the Shell Research Institute, debt maturity of domestic and foreign bonds in August was approximately 119.6 billion yuan (US$18.56 billion), an increase of 3.3 percent from the previous month and 21.2 percent year-on-year. There were 16 bond defaults in August. Seven of those were in real estate when companies failed to pay principal and interest on time.

Source: Epoch Times, September 11, 2021
https://www.epochtimes.com/gb/21/9/11/n13226905.htm

Briefings | | |   Economy/Resources