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Chip Shortage Will Impact China’s Production of 2 Million Cars

According to media based in China, the resurgence of the COVID-19 epidemic in Malaysia has led to the closure of several semiconductor factories and chip production has come to a halt. The industry estimates that up to 2 million units of vehicle production in China will be affected in August and September.

For example, Bosch, one of the world’s largest auto parts suppliers, has affected the production of nearly 900,000 vehicles in China in August because the company’s chip supply was cut off.

It is estimated that the impact on China’s GDP could be on a scale of trillions of Yuan, or hundreds of billions of U.S. dollars. Such a chip shortage may continue until next spring.

According to the China Association of Automobile Manufacturers (CAAM), China’s vehicle production in July was down by 1.863 million units, which is 15.5 percent below the same month last year. Chen Shihua, deputy secretary-general of CAAM said, “The shortage of chips has been affecting the domestic car market since June. As a result, domestic passenger car production and sales have fallen for three months in a row.”

Source: Central News Agency, August 20, 2021
https://www.cna.com.tw/news/firstnews/202108200292.aspx

Briefings | | |   Economy/Resources

BBC Chinese: Chinese Government Has Stake in ByteDance which Owns TikTok; Rubio Asked Biden to Ban TikTok

BBC Chinese Edition recently reported that, according to China’s official National Enterprise Credit Information Publicity System, a Chinese company with a government background has invested in ByteDance, owning one percent of the shares. The name of the investor is Wangtou China (Beijing) Technology Co., Ltd. The company was owned by three Chinese state agencies. The company’s registration documents show that it is jointly owned by the China Internet Investment Fund, a subsidiary of China National Radio, and Beijing Cultural Investment Development Group. The China Internet Investment Fund was established by the National Internet Information Office and the Ministry of Finance. That level of stake allows it one seat on the board of ByteDance. ByteDance owns TikTok, which has 700 million international users, including 100 million U.S. users. The U.S. Trump administration issued two bans on TikTok, citing national security concerns. In June of this year, the U.S. Biden administration revoked a series of Trump era executive orders against TikTok. With the new Chinese government investment in ByteDance, U.S. Senator Marco Rubio issued a statement calling on Biden to ban TikTok again.

Source: BBC Chinese, August 20, 2021
https://www.bbc.com/zhongwen/simp/chinese-news-58268021

Briefings | | |   Information/Technology US-China Relations

Young “Post-90” Chinese Aren’t Getting Married

According to official Chinese statistics, most young people born in the 1990s do not want to get married and the divorce rate among married people is nearly 35 percent. More and more families are single-person households.

The data that the China Ministry of Civil Affairs recently released shows that there are currently about 170 million people, born in the 1990s (the post-90s generation) in China, who have a male to female ratio of 54 to 46. This group has reached the age of marriage. The oldest post-90s are in their 30s, and the youngest post-90s are 22 years old. While between 70 and 80 million “post-90s” people were expected to register for marriage, fewer than 10 million “post-90s” couples have actually registered for marriage, which translates into a marriage rate of a little over 10 percent. Further, among the post-90s who are already married, the divorce rate is as high as 35 percent.

Chinese social media comments attribute the low marriage rate among post-90s people to high housing costs and low income. Most of the post-90s are the only child in the family. Once married, a young couple would need to support four elder parents and one young child. The cost can be prohibitive for many of those in the post-90s.

According to data from the Ministry of Civil Affairs, of all age groups, in 2019, marriage registrations in China fell by 8.5 percent year on year, while divorces rose by 5.4 percent in the same period. The data shows that the same trend has continued since 2015.

According to survey data released by the China National Bureau of Statistics in the China Statistical Yearbook, the result has been more families which are single-person households. One-person households have increased consecutively every year, from 13.15 percent in 2015 to 18.45 percent in 2019, .

Sources：

NetEase, August 18, 2021
https://www.163.com/dy/article/GHNH1D4D0534B9EY.html

Xinhua, July 14, 2021
http://www.xinhuanet.com/video/sjxw/2021-07/14/c_1211240405.htm

Briefings | | |   Social Stability

Taliban Hopes China Will Contribute to the Reconstruction of Afghanistan

Popular Hong Kong new online media HK01 Network recently reported that, on August 19th, China Global Television Network (CGTN) of China Central Radio and Television, interviewed Suhail Shaheen, spokesperson for the Taliban in Afghanistan. When talking about rebuilding and maintaining peace in Afghanistan, Shaheen expressed the hope that, in the future, China can contribute to the reconstruction of Afghanistan. Shaheen mentioned that members of the Taliban have visited China many times and China has played a constructive role during the process of promoting peace and reconciliation in Afghanistan. Shaheen said that China appointed a special envoy to Afghanistan earlier, and the two parties kept in touch. Now, China has appointed a new special envoy to Afghanistan, and the connection remains. Recently, the Taliban delegation met with the new special envoy. The Taliban hopes that China will continue its contribution to the future of Afghanistan. “The Afghan people look forward to it,” he said. Shaheen also explained that, according to the current structure of the Taliban, Afghanistan will set up a governing committee in the future, and the new head of the government may be the leader of the Taliban.

Source: HK01, August 20, 2021
https://bit.ly/3y36BOm

Briefings | | |   Geo-Strategic Trend

UDN: China Plans to Require Companies Seeking U.S. IPO to Hand Over Data Control

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that the Mainland China regulatory authorities are considering mounting pressure on companies with a large volume of data. If companies want to go public in the United States, they must hand over data governance and supervision rights to a third-party. The Chinese regulatory authorities prefer the third-party information security companies to have a government background and to be responsible for managing and supervising the data owned by those companies that intend to conduct IPOs in the U.S. The method can effectively limit the IPO companies’ ability to transfer data to foreign countries. China worries that those companies may be forced to hand over some of their data to foreign institutions when listing overseas, which will undermine China’s national security. This plan is one of the several proposals being considered. In recent months, China has strengthened its control over domestic Internet platforms which caused a significant drop in the stock market and severely affected investor confidence.

Source: UDN, August 20, 2021
https://udn.com/news/story/7333/5688489

Briefings | | |   US-China Relations

Vote Delayed on Extending Anti-Foreign Sanctions Law to Hong Kong

On August 20, 2021, the Standing Committee of China’s National People’s Congress adjourned its meeting. Standing Committee Member Tan Yaozong from Hong Kong stated to Hong Kong 01 that the Standing Committee did not vote on the draft for incorporating the China Anti-Foreign Sanctions Law (June 210, 2021) into Annex III of the Basic Law of the Hong Kong Special Administrative Region (HKSAR) of China.  

The Basic Law is a national law of China that serves as the de facto Hong Kong constitution. With 160 articles and three annexes, the Basic Law was enacted under the Constitution of China to implement the Sino-British Joint Declaration and went into effect July 1, 1997, in Hong Kong. An affirmative vote by the Standing Committee on August 20, 2021, would have extended China’s Anti-Foreign Sanction Law to Hong Kong by adding it as Annex III of the Basic Law.

According to Tan, the Standing Committee deliberated on the proposal to add Annex III to the Basic Law, but the chairman’s meeting decided not to vote for the time being but rather, to continue to study related issues.

A few days earlier, Tan said that on August 20, 2021, the Standing Committee would discuss and consider including the Anti-Foreign Sanctions Law in Annex III of the Basic Law. Tan Yaozong expressed that the draft to be discussed was relatively simple. It only required that the Anti-Foreign Sanctions Law be included in Annex III of the Basic Law and that the SAR government establishes relevant systems. It would not discuss specific implementation details in Hong Kong and has not set a legislative timetable for Hong Kong.

On June 10, 2021, the 29th meeting of the Standing Committee of the 13th National People’s Congress passed the Anti-Foreign Sanctions Law. The Chinese Communist Party intends the law to oppose foreign sanctions against China, counter foreign discriminatory measures, and respond to the “long-arm jurisdiction” of the United States.

According to the Anti-Foreign Sanctions Law, China’s State Council may deal with measures such as denial of visa, denial of entry, deportation, seizure and freezing of property in China, and prohibiting or restricting doing business in China.

Hong Kong economist Luo Jiacong said that more than 200 banks are currently in Hong Kong, and more than 80 percent of them are foreign banks. If China extends the Anti-Foreign Sanctions Law to Hong Kong, it is estimated that foreign banks will choose to leave Hong Kong because they will not give up their U.S. dollar business. 

Analysts warned that the surprising decision on August 20 to defer extending the Anti-Foreign Sanctions Law to Hong Kong does not signal any retreat or U-turn on retaliatory steps against the West. Instead, the CCP may opt for a more tailored retaliatory approach in order not to jeopardize Hong Kong’s financial hub.

Sources:

1.) Hong Kong 01, August 20, 2021.
https://tinyurl.com/4s3n9yvm

2.) Radio Free Asia, August 13, 2021
https://www.rfa.org/mandarin/yataibaodao/gangtai/ec-08132021082231.html

3.) Anti-Foreign Sanctions Law of the People’s Republic of China, June 10, 2021
http://www.npc.gov.cn/npc/c30834/202106/d4a714d5813c4ad2ac54a5f0f78a5270.shtml

Briefings | | |   Government/Politics

Ministry of Industry and Information Technology of China Continues to Tighten-Up Control of Internet-Related Companies

According to China Economic Net, the Ministry of Industry and Information Technology (MIIT) of China is continuing its efforts to clean up and rectify private tech companies. MIIT announced that 43 APPs still have problems of rectification not being thorough, using technical means to counter rectification, and the same problem not being rectified consistently in different regions.

China Economic Network reporters found that many mainstream apps such as WeChat, Aichiyi, Ctrip, have an issue of where to go are on the list. Among them, tech company Tencent alone has four apps involved – Tencent video, enterprise WeChat, Tencent map and WeChat. The problems of 43 APPS are still in “violation of illegal use of call contacts and geographical location permissions,” “harassing users with open screen pop-ups,” and other persistent APP violations. MIIT demanded that rectification of the APPs listed be completed by August 25.

Source: China Economic Net, August 18, 2021
http://www.ce.cn/cysc/tech/gd2012/202108/18/t20210818_36821191.shtml

Briefings | | |   Government/Politics

Chinese Tech Giant Tencent to Pour an Additional 50 Billion Yuan into the “Get-Rich-Together Plan”

Following the launch of the “Sustainable Social Value Innovation” strategy with an investment of 50 billion yuan (US$7.5 billion) (in April), Chinese tech giant Tencent announced on August 18 that it would increase its capital by another 50 billion yuan to launch the “Common Prosperity Special Plan” (or “Get-Rich-Together Plan”). The funds will be used to provide continuous assistance in areas such as rural revitalization, increases in income  for low-income groups, improvements in the primary health care system, and balanced development of education.

The 10th Conference of the Central Finance Committee, held on August 17, made it clear that common prosperity should be promoted in stages, allowing some people to get rich first. Then the riches should help the poor to get rich.

Source: Techweb, August 19, 2021
http://www.techweb.com.cn/finance/2021-08-19/2854250.shtml

Briefings | | |   Economy/Resources