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Briefings - 2. page

The Paper: Beijing to Increase Deficit Rate and Issue Special Government Bond

According to The Paper, China’s Politburo held a meeting on March 27. For the first time, it proposed to “appropriately raise the fiscal deficit rate and issue special government bonds” to deal with the impact of the epidemic on the economy. A number of economists recommended a deficit rate of 3.5 percent versus 2.8 percent in 2019. It would bring in 700 billion yuan (US$99 billion). Meanwhile they also recommended issuing a special government bond of no less than 1 trillion yuan (US$140 Billion). Moreover, they reiterated that the local government could increase the scale of their special debt limit from 2.15 trillion yuan (US$300 billion) for 2019. If the deficit rate for 2020 were to increase to 3-4 percent, it would mean that the local government debit limit could go up to 4 trillion yuan (US$560 billion).

Source: The Paper, March 27, 2020

Trump Signed Taipei Act and Beijing Promised Retaliation

Major Taiwanese news group Eastern Media International recently reported that, on March 26, U.S. President Donald Trump signed the Taipei Act into law. Mainland Ministry of Foreign Affairs spokesperson Geng Shuang said at a press conference that China urged the United States to correct its mistake and stop the implementation of this wrongful bill. The United States should not set roadblocks for other countries that want to develop a relationship with China. Otherwise, Geng emphasized, the United States will have to face China’s decisive retaliation. Geng said the so-called Taipei Act is yet another example of a serious violation of the One-China principle and the provisions of the three China-US joint communiques, a serious violation of international law and basic norms of international relations, and a gross interference in China’s internal affairs. According to the Taipei Act, the United States will reduce the economic, security and foreign relation ties with the countries that bring severe damage to Taiwan. The Act also supports Taiwan’s observer status in international organizations.

Source: Eastern Media International, March 27, 2020

IMF Managing Director Said 20 More Countries Seek Help

Well-known Chinese news Tencent News recently reported based on information provided by Reuters that Kristalina Ivanova Georgieva-Kinova, Managing Director of the International Monetary Fund (IMF) just revealed that an additional 20 countries have ask for help. She said the IMF is prepared to utilize its full lending power (around US$1 trillion) to support its member countries to combat the coronavirus crisis. She did not list the names of the countries seeking support. However, Iran indicated last week that it did ask the IMF for an emergency loan. Georgieva-Kinova also made it clear that a globally coordinated financial stimulus action is becoming more and more reasonable. She made the comments before attending the G7 teleconference and pointed out that the global action should be on a scale similar to the 2008 global financial crisis. She praised the easing policies that the U.S. Federal Reserve has led.

Source: Tencent News, March 18, 2020

China Economy: Offshore RMB Fell Nearly 900 Points

China Economy recently reported that, on March 19, Chinese currency RMB fell 865 base points, against the US Dollar, in offshore trading. At the same time, the RMB fell 938 base points onshore. This is the first time since October 2019 that the Chinese RMB fell below 7.16 Yuan for one US Dollar. The U.S. Dollar has seen strong growth recently, with high demand across the globe. It is becoming the core asset for managing risks because of its nature of being fully exchangeable with full global circulation. Experts expressed their belief that the significant decline of the Chinese RMB is typical for a market full of volatility.  At the same time, China is facing high pressure on interest rate reduction. Some investment organizations pointed out that the Chinese currency is looking at further devaluation in the near term and in the foreseeable future. Offshore RMB (CNH) is RMB that circulates outside Mainland China. CNH settlements are typically done in Hong Kong, Singapore, London and Luxembourg.

Source: China Economy, March 19, 2020

DW Chinese: No, Autocracy Is not Better for Handling Crises

Deutsche Welle Chinese Edition recently published a commentary on China’s propaganda about how well autocracy performed in a crisis compared to democracy. The commentary started with China’s media describing Xi Jinping showing up in Wuhan as a heroic scene. Unfortunately, this was immediately followed by mountains of work to shut off massive online criticism. The Chinese communists have been trying to sell the world fairy tales. One of them was that the government never made any mistakes in the battle against the coronavirus. Yet the Chinese leadership was initially caught by surprise and their first response was clearly a cover up all the way through December. Later in January the biggest news was that the whistle-blower Chinese doctor was detained and died thereafter. Now the Chinese leadership is working tirelessly on another fairy tale, which is to broadcast to the world that the coronavirus was not sourced in China. The Chinese Ministry of Foreign Affairs spokesperson went even further, by accusing the U.S. Military of bringing the virus to China. People mostly laughed at this idea, but the effort of China offloading responsibilities sounded a serious alarm. The biggest fairy tale so far is claiming the autocratic system is more “successful” than democratic systems. This is a big lie. All one has to do is to look at Taiwan, where highly efficient and swift responses effectively controlled the spread of the virus in the island. This is especially remarkable when Taiwan achieved this with zero help from the World Health Organization (WHO).

Source: DW Chinese, March 15, 2020

Xinhua: China Developed Facial Recognition Even with Masks

Xinhua recently reported that China Railway Science Research Institute just developed a new technology that can perform facial recognition even when the individual wears a regular mask and a helmet. The system will also measure the body temperature at the same time. Many industrial workplaces plan to deploy this new technology to monitor their locations where work resumed. The new technology focuses on characterizing eyes and eyebrows for pattern matching and does not require a hardware change to existing systems. With a large amount of data, current system accuracy reached 99.9 percent. It can also remind workers to wear a helmet if one is not recognized. The new technology development started before the coronavirus was a threat. The Chinese government has deployed a facial recognition monitoring system nationwide. Named Sky Eye, it has run into many issues related to suspects wearing masks to avoid identification. The new system is now improving image resolution for data collection; the goal is to reduce the number of cameras everywhere.

Source: Xinhua, March 11, 2020

U.S. Dollar Shines in Market Free Fall

Well-known Chinese news site Sina recently reported that the U.S. Dollar Index has frequently reached highs when the financial market saw free falls across the globe. Key non-U.S. currencies suffered most, including the Euro, the British Pound, the Canadian Dollar, and the Australian Dollar. The Japanese Yen followed the U.S. Dollar’s growth, but with heavy fluctuations. With this background, central banks like the Federal Reserve and the Bank of England have been lowering interest rates and pushing new easing plans. However, these activities have not made much of a difference. The U.S. Dollar remained outstanding among all of this bad news and appears to be able to hold its position to serve as a safe harbor for money looking for a place to park. The coronavirus situation continues to spread fear in financial markets globally. That, coupled with the Saudi-Russia oil price war, means that the future remains uncertain for the time being. Major economies are expected to have a new round of announcements regarding their poor economic data.

Source: Sina, March 14, 2020

Apple Smartphone Chinese Sales Saw a Sharp Decline in February

Shanghai-based Chinese financial news site East Money recently reported that, according to statistics that the China Academy of Information and Communication Technologies just released, the Chinese smartphone market declined by 54.7 percent, year-over-year. Apple iPhone sales in China saw a 61 percent decline during the same period of time. Apple announced its first quarter sales will miss its earlier projection, mainly due to the public health situation in China, which has impacted both manufacturing and market demand. Although Apple’s Chinese factories resumed their work, yet the pace of restoring capacity has been slower than expected. This will impact Apple’s global sales. Some Apple suppliers like Qorvo also reduced their forecasts. Also worth noting is that, the International Data Group (IDC) projects that the first quarter global smartphone sales will decline by 40 percent, year-over-year.

Source: East Money, March 9, 2020

World Journal: The U.S. Met Hong Kong Political Representatives from Both Sides

Well-known U.S. Chinese language newspaper World Journal recently reported that a Hong Kong political group attended The US-HK Dialogue that the World Affairs Council, the largest nonprofit organization for international affairs in the United States, had hosted. The group consisted of four representatives from Hong Kong’s pro-mainland parties and three from pro-democracy parties. In California, the group met Johnathan Fritz, Deputy Assistant Secretary of State for East Asian & Pacific Affairs, and Hanscom Smith, Consul General representing the United States to Hong Kong and Macau, as well as people from the House Foreign Relations Committee. The event occurred right before the State Department’s annual Hong Kong Report was about to be released. The pro-mainland representatives described the conversations as frank and constructive, while the pro-democracy representatives brought detailed requests on what more the U.S. government should do on sanctioning the current Hong Kong government, especially on the human rights protection side. With the recent passage of the Taipei Act in Washington, it appears the U.S. government has a comprehensive political view on the issue of Hong Kong and Taiwan. It’s not unusual for the pro-democracy activists to visit the United States. However, pro-mainland leaders are not frequent visitors, especially not in groups. This at least made the typical label of “colluding with foreign powers” that Mainland media often gave the HK pro-democracy parties look very weak.

Source: World Journal, March 9, 2020

HKET: iPhone XR Ranked Best Seller; Huawei Not in Top Ten

Hong Kong Economic Times (HKET), the leading financial daily in Hong Kong, recently reported that, according to market researcher Counterpoint, the Apple iPhone XR was ranked number one in the 2019 global top ten best seller of the smartphone market. In fact, six Apple iPhone models are in the top ten list. Samsung took three spots. Oppo is the only Chinese brand that won a spot. Well-known Chinese vendors like Huawei and Xiaomi had no product on the top ten list. iPhone XR is the only smartphone model, among all smartphones, that scored a double-digit market share in all important regional markets across the globe. The top five in North America are all Apple iPhones. The top five in Europe are either Samsung or Apple iPhones. The top five in China are all Chinese brands.

Source: HKET, March 2, 2020