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In 2017 China’s Resident Debt Burden Exceeded 53 Percent of GDP

According to Chinese media, in the first half of 2017, mainland China’s resident debt burden exceeded 53 percent of China’s GDP. This figure includes residential mortgages and loans from Peer to peer (P2P) lending.

Without residential mortgages and P2P lending, the resident debt was 3 percent of GDP in 1996, 18 percent in 2008 and it hit 47.5 percent in 2017. From 2008 to 2017, it increased by 30 percentage points. It is noteworthy that it took the United States 60 years to increase from 20 percent to 50 percent while China took fewer than 10 years.

Further, based on data from banks, the debt-to-income ratio is much higher than 78.1 percent. From 2006 to 2017, the debt-to-disposable income ratio for mainland China’s residents surged from 18.3 percent to 78.1 percent. If other types of borrowing were included, the figure would be even more alarming. That is to say, it is much higher than 78.1 percent.

Source: Sohu, May 12, 2019
http://www.sohu.com/a/313385609_100202672?sec=wd

Briefings | | |   Economy/Resources

Beijing City: New Grain and Oil Price Control Has Nothing To Do With U.S.-China Trade Friction  

On May 13, 2019, the official Beijing Municipal Development and Reform Commission (BMDRC) website released the “Beijing Grain and Oil Market Supply and Price Volatility Emergency Control Plan.”

On May 14, 2019, China Business News reported that the BMDRC stated that the grain and oil fluctuation emergency plan announced on May 13, 2019 has nothing to do with U.S.-China trade friction.

The Control Plan “is a work that has been promoted before and it is part of the long-term price control. The time of the release just happens to be at this time. [The Control Plan] has nothing to do with Sino-US trade friction,” said the person in charge at the BMDRC

The BMDRC stated that the price of grain can affect the price of hundreds of items. Food security is an important foundation for national security. Food prices such as grain can play a critical role in balancing the entire price level. China’s edible oil market is highly dependent on foreign countries.  Domestic and international market prices are closely linked. It is equally important to stabilize the supplies in the edible oil market and to [secure] price stability.

The Control Plan sets three warnings: green, yellow (year-on-year price increase of 5 to10 percent for grain and 10 to 20 percent for edible oil) and red (year-on-year price increase of over 10 percent for grain and over 20 percent for edible oil). The three warning area indicators trigger three levels of government intervention respectively. The intervention may be through organized sourcing, increasing supply, speeding up distribution, cracking down on illegal activities such as hoarding and raising prices, price emergency measures, temporary price interventions, subsidies, and other emergency assistance.

Source: China Business News, May 14, 2019
http://www.cb.com.cn/index/show/zj_m/cv/cv13448901260

 

Briefings | | |   Economy/Resources

A Chinese High School Recommend Students Buy Huawei’s Customized Mobile Phone

On May 11, a high school in Liuzhou City in China’s southwest Guangxi Province recommended that students purchase Huawei’s customized mobile phone, claiming that it can manage students’ mobile phone usage, automatically filter bad messages, and record student violations. According to photos that netizens provided, this customized version of the Huawei Nova4 mobile phone has a management platform that Huawei’s Wuhan Research Institute developed.

The phone has several major functions. It can manage students’ time by locking and unlocking the phone at different times, such as class time, lunch break, nightly bedtime, or holidays, so as to avoid students’ excessive usage. The system will also automatically filter 500 million pieces of “bad” website information related to pornography and violence. The school can distribute notices to students via its back-end, and if a student is given a “misconduct” in phone usage, the system will keep a record.

Although the high school’s deputy principal said that this was a recommendation at the request of parents and not a mandatory purchase, the news triggered heated discussion among Mainland netizens. Some people criticized Huawei for launching such a mobile phone at such a sensitive time. Some questioned, “Who gives Huawei the power to monitor the lives of others under the banner of serving the good of students?” Others joked that this is “buying and bringing ‘big brother’ home.”

Source: Central News Agency, May 13, 2019
https://www.cna.com.tw/news/acn/201905130106.aspx

Briefings | | |   Information/Technology

HK Mingpao: It Appears China Is Constructing Its Third Aircraft Carrier

Mingpao, one of the primary Hong Kong newspapers, recently reported that, according to satellite pictures, China is currently constructing a third aircraft carrier in Shanghai. China may equip this carrier with an ejection system. The Chinese official news media mentioned the possibility of constructing a third aircraft carrier last year. However, no further details were released after that. The latest satellite pictures now show that a large ship is being built at the Shanghai Jiangnan Shipyard, where multiple new workshops have also recently been constructed. Massive lifters were identified, as well as a large number of prebuilt components. Based on the sizes of the shown components, the new ship will be larger than the second aircraft carrier that is currently in sea trials. It’s unclear if the new ship has nuclear power. Anonymous sources suggested that the new carrier will not be nuclear-powered, but it will deploy electromagnetic ejection technology. The Chinese Ministry of Defense refused to comment.

Source: Mingpao, May 8, 2019
https://bit.ly/2E1I42K

Briefings | | |   Defense/Military

CCP Hires a Canadian Lobbyist Firm to Promote Its Viewpoints

The South China Morning Post reported that Beijing has hired a Canadian lobbyist firm and that the staff members of that firm have been promoting the Chinese Communist Party’s (CCP’s) viewpoint without identifying their association with Beijing.

The Chinese Consulate-General in Toronto hired Solstice Public Affairs as its lobbyist last August. This hiring is special because it is the first federal lobbyist that China has engaged. “No other country appears to have engaged a private firm to provide such services in Canada. Diplomats typically undertake such services.”

Karen Woods (whose Chinese name is Wen Lin), a Senior Associate at Solstice, is also a co-founder of the Canadian Chinese Political Affairs Committee (CCPAC). Since the arrest of Huawei chief financial officer Meng Wanzhou, she has been appearing on TV and publishing lengthy pieces in Canadian newspapers.

Her 750-word opinion piece on The Toronto Star on December 18, 2018, stated, “[The] Huawei case has generated a dark cloud which is shrouding the psyche of many Chinese-Canadians.” She warned of a “new wave of ‘Sino-phobia,’” and grimly concluded that “in a West rebuilt on Cold War ideologies and McCarthyism, there is likely to be little space for Chinese-Canadians.”

In February 2019, Karen Woods and three other representatives of her CCPAC published another Huawei-themed op-ed in the National Post and associated publications, as an open letter to “Uncle Xi” Jinping. It contended that Chinese President Xi’s anger at Meng’s arrest was understandable but misplaced, and that if China wanted to “win over the hearts and minds of the West,” it should release Canadian detainees Michael Spavor and Michael Kovrig, who are widely believed to have been arrested in retaliation.

Some people have pointed out that Wood’s views represented those of the CCP. However, she did not disclose her lobbying firm’s connection to Beijing when she published those articles.

The South China Morning Post believed that the “behavior of Solstice and its staff blurred the lines between outright lobbying, journalism, and private activism. In ways both crude and subtle, they have attacked critics and propelled viewpoints that often uphold Beijing’s talking points and interests on a range of subjects.”

Solstice hired Woods partly on the strength of her Chinese community activism, said Brockwell, a veteran political lobbyist who is Woods’ senior at Solstice. Woods and Brockwell have appeared together at Chinese consular functions in Toronto, including the welcoming ceremony for the new Consul-General, Han Tao, last August.

During his interview with the South China Morning Post, Brockwell said repeatedly, and in multiple contexts, that Karen Woods did indeed work for the Chinese consulate, although her op-ed articles were not part of that work. He acknowledged that articles that the Solstice staff wrote in their private capacities served simultaneously as “client development.”

Source: South China Morning Post, April 18, 2019
https://www.scmp.com/news/china/society/article/3006638/how-chinas-canadian-lobbyists-blurred-lines-pr-journalism-and

Briefings | | |   Geo-Strategic Trend Government/Politics

CNA: Ministry Of Education Says to Rectify False Inflated Employment Rate of College Graduates

The Central News Agency reported that Chinese colleges and universities like to advertise that their graduates have a high employment rate, but many of the employment rates they report are false. The Chinese Ministry of Education recently issued a notice which disallowed universities from forcing graduates to sign employment agreements. In addition, they cannot withhold students’ diplomas because of their refusal.

Beijing News reported that the Chinese Ministry of Education stated that some colleges and universities require all graduates to sign an employment agreement or provide employment certificates, telling them that the employment certification will serve as a condition for a thesis defense or a diploma. This has seriously violated the rights of graduates. The Ministry also directed that, in the future, all schools must set up tip lines to prevent such fraud, and that the officials will also improve the verification mechanism.

This provision reflects the old problem of the false employment rates that Chinese universities report. A review of past reports from the mainland media reveals that the schools have managed to make the employment data of the graduates look nice when they face the pressure of employment, when new students are enrolling, or when cuts of certain programs are proposed. Some graduating students reported that the school stipulates that an employment agreement and a labor contract must be returned to the school by the end of May to prove that they have been employed. Some schools require that students must sign an agreement with the school and with the employer before they leave school. Although it is not a real labor contract, students are inexplicably considered “employed.”

This year, the number of graduates from colleges and universities in China reached 8.34 million. They are currently at the peak time for graduates to be signing employment contracts.

Source: Central News Agency, May 11, 2019
https://www.cna.com.tw/news/acn/201905110112.aspx

Briefings | | |   Government/Politics

People’s Daily: China Launched Satellite to Influence Bolivia’s Telecommunications

People’s Daily reported that the first communication satellite Túpac Katari that China launched has affected the role that Bolivia plays in its ability to broadcast such issues as education and tele-medicine. The article quoted Ivan Sambra, the director of the Bolivian Space Agency, who said that from January to April 2019, the commercial services provided by Bolivia brought about US$ 8 million in economic income to the Bolivian government. Over the past five years, the satellite has helped Bolivia accumulate more than $100 million in revenue.

On December 21, 2013, Túpac Katari was successfully launched at the Xichang Satellite Launch Center in China, making Bolivia the sixth country in Latin America to have satellites after Brazil, Argentina, Chile, Colombia and Venezuela. The satellite was named after the national hero of Bolivia’s 18th century anti-colonial ruler. The China Academy of Space Technology which is affiliated with China Aerospace Science and Technology Corporation developed it. It used the Dongfanghong-4 satellite platform with a design life of 15 years. Túpac Katari provides coverage for at least 26 radio stations and 30 local TV channels for the Bolivian people free of charge. At present, the utilization rate of the satellite has reached 70 percent. According to the plan of the Bolivian Space Agency, by the end of this year, Túpac Katari will be running at full capacity. It is reported that the service scope of Túpac Katari has also extended to Colombia.

Ivan Sambra also stated that in the future, Bolivia will also launch a second satellite for Earth observation, and China will be the preferred partner.

Source: People’s Daily, May 11, 2019
http://paper.people.com.cn/rmrb/html/2019-05/11/nw.D110000renmrb_20190511_4-03.htm

Briefings | | |   Geo-Strategic Trend

China Times: Top Ten Mainland Export Categories Impacted by the New Tariffs

Major Taiwanese newspaper China Times recently published an article with an analysis of the Mainland China export categories that would be most impacted by the newly raised tariff rate (from 10 percent to 25 percent). The estimates were based on the ITC (United States International Trade Commission) 2018 statistics. The top ten categories (in terms of export value) are: electronic communications equipment (US$19.1 billion), computer circuit boards (US$12.5 billion), processing components (US$5.6 billion), metal furniture (except chairs, US$4.1 billion), computer parts (US$3.1 billion), wooden furniture (US$2.9 billion), static converters (US$2.7 billion), plastic flooring (US$2.5 billion), wooden framed seats (US$2.5 billion), and auto parts (US$2.3 billion). In the meantime, undisclosed sources expressed the belief that the Chinese counter-tariffs will most likely include US exports in the following categories: chemical products, agricultural products, whisky, and soybeans. The Trump administration has already started the preparations for the additional tariffs against the rest of all Chinese goods.

Source: China Times, May 10, 2019
https://www.chinatimes.com/realtimenews/20190510002119-260410?chdtv

Briefings | | |   Economy/Resources US-China Relations