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Briefings - 288. page

Chinese Central Bank: In March, Foreign Investors Unloaded Chinese Assets

Well-known Chinese news site Sina recently reported, based on data released by the Chinese central bank, that, in the month of March, international investors unloaded around RMB 208.4 billion (US$29.5 billion) in stocks and around RMB 20 billion (US$2.83 billion) in bonds. Starting this February, international investors began unloading Chinese assets and the March numbers showed an acceleration. Analysts pointed out that, with the expansion of the coronavirus pandemic, the lack of U.S. dollars in the international market caused a panic selling of Chinese assets. This wave of sell-out resulted in a quite obvious decline in the Chinese foreign currency reserve. The spokesperson for the Chinese State Administration of Foreign Exchange (SAFE) commented at a press conference that the global market headed downwards in the first quarter, which triggered a trend of risk aversion; it is understandable. SAFE expressed the belief that the Chinese market remains attractive, regardless of which channel (direct investment, bonds, or stocks) international investors prefer.

Source: Sina, April 30, 2020
https://finance.sina.com.cn/money/forex/forexinfo/2020-04-30/doc-iircuyvi0762804.shtml

Briefings | | |   Economy/Resources

CBN: Moody’s Downgraded Some Chinese Companies

China Business Network (CBN) recently reported that, in the past couple of months, Moody’s downgraded 24 Chinese non-financial companies. These companies are mainly in the fields of transportation, real estate and automobile manufacturing. Seven of the transportation companies now have a negative outlook and the ratings of all five automobile manufacturers were lowered. Among the 24 companies, 17 also have China’s domestic ratings and 16 of them remained unchanged. These companies are typically large enterprises and the new development will hurt their capacity to issue bonds, especially overseas bonds. However, under the global pandemic environment, companies can hardly maintain a good posture, so we are in a time of competition for the title of not-too-bad. Chinese ratings agencies have a long reputation for overrating companies, so established international ratings agencies like Moody’s are more trustworthy.

Source: CBN, April 28, 2020
https://www.yicai.com/news/100611750.html

Briefings | | |   Economy/Resources

CCP to Monitor Postings on Foreign Self-Media

Han Lianchao, a former employee of China’s Ministry of Foreign Affairs posted a screenshot on Twitter of a notice from the Publicity Department of the party committee of the Beijing International Studies University. His comment indicated that the CCP will impose large-scale censorship and monitoring of Twitter, YouTube and Facebook accounts overseas.

Below is the translation of the notice:

Notice to Collect Foreign Self-Media Account Setup by Student and Faculty Members

Based on the requirement from the Publicity Department of the City of Beijing, in order to do well in promoting China’s image overseas and to “Tell China’s Story Well,” we are here to collect foreign self-media account(s) that students and faculty members have set up. Below are the detailed requirements:

1. This requirement applies to all levels within the university and the affiliated schools, as well as the graduate research institute. Each unit should appoint one person to collect foreign self-media account(s) that students and faculty members have set up. It must have used the real name of each individual. There are two forms to fill out: a foreign self-media account collection form and a foreign self-media account collection consolidated form. Foreign self-media include but are not limited to Facebook, Instagram, Twitter, Youtube, and Buzzfeed.

2. Each unit should forward the forms to the person in charge for signature and a stamp seal. The original signed hard copy of the consolidated form should be submitted to the university’s publicity department by April 21 at 5:00pm while the unit can retain the individual account collection form.

3. The foreign self-media account collection work starts effective immediately. If there are any questions, please contact our department for more information.

Contact: Ma Xianchao
Address: Room 230, Ming De Building
Telephone: 655778482

Communist Party Publicity Department
April 20, 2020
Attachment:
Beijing International Studies University Foreign Self-media Account Collection Form
Beijing International Studies University Foreign Self-media Account Collection Consolidated Form

Source: Twitter, April 25, 2020

Briefings | | |   Government/Politics

Huawei Diversifying Supply Chain

China Times recently reported that, despite the news about the U.S. planning to expand the export ban on Huawei, Huawei commented that it can still purchase critical chips from South Korea’s Samsung, Taiwan’s MediaTek and China’s own Spreadtrum Communications, instead of U.S. suppliers. Huawei currently depends on Taiwan’s TSMC to manufacture chips designed by itself. However, some industrial observers suggested Samsung and MediaTek may not be allowed to supply Huawei with the expanded U.S. ban because they use U.S. technology. Huawei insisted it can still move forward and there are other opportunities in Japan and Europe for supplies.

Well-known Chinese news site Sina recently reported that the Chinese government just granted special permission to allow 200 Samsung technicians to come into China and enter a NAND chip manufacturer in the city of Xi’an to help on factory expansion.

Sources:
(1) China Times, April 22, 2020
https://www.chinatimes.com/realtimenews/20200422001986-260410?chdtv
(2) Sina, April 23, 2020
https://k.sina.com.cn/article_6372825920_17bd99b4000101o5cs.html

Briefings | | |   Information/Technology US-China Relations

Beijing News: Beijing Reached Level Six Pollution in Two Hours

Beijing News reported on April 24 that, within two hours, the city suffered an air pollution level six, which is the highest severity possible. The primary pollutant was PM10. At 7PM, Beijing city air quality index arrived at 350, which qualified as level six. Northwest of Beijing, including the Olympics Village, it reached 400. Some areas, including a few train stations of the city, even reached the maximum index value of 500, which is the highest measurable with the equipment in place. This level of air pollution was unusually high, even for a city like Beijing. {Editor’s note: Particulate Matter 10 (PM10) describes inhalable particles, with diameters that are generally 10 micrometers and smaller. According to the EPA (U.S. Environmental Protection Agency), the U.S. National Annual Second Maximum 24-Hour Average for PM10 has been consistently below 150 for the past 30 years.}

Source: Beijing News, April 24, 2020
http://www.bjnews.com.cn/news/2020/04/24/720854.html

Briefings | | |   Social Stability

Tanzania Reportedly Terminated 10 Billion Belt and Road Loan Agreement

China’s “Belt and Road” economic strategy faced a setback. African media reported that Tanzanian President John Magufuli terminated the US $10 billion loan with China that was to be used to expand the Bagamoyo port.

China originally planned to provide the loan to Tanzania to expand the port of Bagamoyo, on the condition that China was granted the right to lease the port for 99 years. The Tanzanian government would not have the right to comment on China’s activity during this period. The agreement was signed by former Tanzanian President Jakaya Kikwete, but the media report quoted Magufuli as saying, “Only a drunk person would accept some of those terms.”

According to the report, since taking office in 2015, Magufuli decided to resume negotiations with China hoping to reduce the lease term from 99 to 33 years. In addition, China must obtain permission in advance to carry out related business activity in the port. Now because China has not started the talks within the deadline that Magufuli provided, Tanzania announced the termination of the agreement.

The China Merchants Group managed the Bagamoyo Port project.  The Oman Sovereign Fund and the Tanzanian government jointly developed it. A memorandum of cooperation was signed in March 2013, and a groundbreaking ceremony was held on October 16, 2015. It was originally scheduled to be in use between 2020 and 2021.

Source: Hong Kong Oriental Daily, April 24, 2020
https://hk.on.cc/hk/bkn/cnt/cnnews/20200424/bkn-20200424173210681-0424_00952_001_cn.html

Briefings | | |   Geo-Strategic Trend

Multiple Swedish Cities Terminated Sister City Agreement with China

Recently after Sweden closed its last Confucius Institute, Goteborg, Sweden ’s second largest city, also announced that it has decided not to renew its sister city agreement with Shanghai.

According to a report from Dagens Nyheter, Sweden ’s largest newspaper, on April 22, following Linköping, the fifth largest city in Sweden, and Örebro, the seventh largest city also announcement the termination of their sister city relationships with their counterparts in China, shortly after the city of Goteborg announced the suspension of its sister city relationship with Shanghai.

According to related reports, Shanghai and Gothenburg established a “friendly exchange relationship” in 1986. The two sides also signed an agreement to become sister cities on October 23, 2003. At the time, Gothenburg became the 51st “international friendly city” for Shanghai. Over the years, the two cities have conducted exchanges and cooperation in the fields of urban public transportation, water treatment, environmental protection, and port management. The agreements between Shanghai and Gothenburg officially expired at the end of 2019. The ruling Swedish Social Democratic Party suggested that the renewal be considered in the future, but other parties thought that the agreement should be terminated. Although the sister city relationship between the two cities no longer exists, the Trade Bureau and Port Authority of Gothenburg will be allowed to continue to maintain its original relationship with Shanghai and China.

While Gothenburg is another Swedish city that has announced the end of its sister city agreement with Chinese cities in the past few months, Linköping City previously terminated its agreement with Guangzhou City. Luleå and Xi’an, Västerås and Jinan have also terminated their sister city programs. Larks Vikinge, the mayor of Linkoping, told Sweden’s Dagens Samhalle in February this year that “as the Chinese embassy threatened the Swedish government, we decided to discontinue all political ties with China.” He also said that a Guangdong delegation was originally scheduled to visit the city in December 2019, but it was told it would not to be welcomed.

In February this year, Mayor Anders Teljeback of Westeros told the Financial Times that he decided to stop cooperating with Chinese cities because “in the past few years, China has escalated domestic Suppression of its people.

It is worth mentioning that the official website of the Chinese Embassy in Sweden posted an article written by Ambassador Gui Congyou, which Sweden Daily originally published. The article criticized “some moderate Swedish politicians use of COVID 19 to make wrong remarks about China and said the remarks were full of false facts, absurd logic and evil intentions.”

Source: Radio France Internationale, April 20, 2020
http://www.rfi.fr/cn/%E6%AC%A7%E6%B4%B2/20200424-%E7%91%9E%E5%85%B8%E5%A4%9A%E5%BA%A7%E5%9F%8E%E5%B8%82%E8%BF%91%E6%9C%9F%E7%9B%B8%E7%BB%A7%E8%A7%A3%E9%99%A4%E4%B8%8E%E4%B8%AD%E5%9B%BD%E5%9F%8E%E5%B8%82%E5%8F%8B%E5%9F%8E%E5%85%B3%E7%B3%BB

Briefings | | |   Geo-Strategic Trend

China’s Central Bank Testing Digital Currency

Guangzhou Daily reported that China’s central bank, The People’s Bank of China, is testing the use of digital currency in the accounts of the Bank of Agriculture through transportation subsidies.

According to the central bank’s Digital Currency Research Institute, the digital renminbi is being used in pilot tests in Shenzhen, Suzhou, Xiong’an, Chengdu, and the future Winter Olympics site.  Because these are internal, closed pilot tests, such testing does not mean that the digital RMB is officially issued or will affect commercial operations. Nor will it affect the RMB issuance and circulation system, the financial market, and the social economy beyond the testing environment.

The central bank has been studying official digital currency since 2014. At the end of 2017, with the approval of China’s State Council, the central bank organized some commercial banks and relevant institutions to research and develop a digital RMB system jointly.

It is expected that the central bank will follow a gradual promotion for its digital currency, starting with the four major banks’ payroll payment clients and public service clients, and then gradually expand to online companies and operators.

Unlike Alipay and WeChat Pay, the functions and attributes of the central bank’s digital currency are similar to paper money, except that it is digital. Third-party Internet payments such as Alipay and WeChat Pay use commercial bank deposit currency settlements.

Source: Xinhua, April 20
http://www.xinhuanet.com/fortune/2020-04/20/c_1125878094.htm

Briefings | | |   Economy/Resources