Briefings – Page 367

China’s High Speed Rail System Faces Heavy Debt Risk

China tops the world with its advanced high speed rail system. As of the end of 2018, China’s high-speed railway operating mileage reached 29,000 kilometers (18,019 miles). The statistics, however, suggest that China has also paid a huge price which may take a number of generations to pay back. Radio Free Asia published an article that Caixin initially reported. It describes the financial risk that China’s high speed rail system faces. The data shows that China’s high speed rail is facing a huge debt and financial losses. The risks can be summarized in the following five areas:

First, China’s high speed rail relies mainly on debt financing. The debt that China Railway General (formerly the Ministry of Railways) had has since soared from 476.8 billion yuan (US$70.39 billion) in 2005 to 4.72 trillion yuan (US$700 billion) in 2016. China Railway has always kept the financial data of the high speed rail strictly confidential, but from its published debt and revenue data, it can be concluded that, even if the operating cost of the high speed rail is not considered, the total transportation revenue of the high-speed rail is not enough to pay the interest on the loan for the construction of the high speed rail.

Second, most of the high speed rail is losing money. Other than the rail between Beijing Shanghai and Beijing Guangzhou, most of the other rails are way below capacity. There are only four rails running between Lanzhou to Xinjiang compared to a daily capacity of 160. The ticket revenue can’t even cover the cost of electricity. Even for the busy route from Beijing to Shanghai, the capacity utilization rate of number of passengers per kilometer is only half of that in Japan.

Third, since the high speed rail has a weight limit, the transportation of goods had to be shifted from railway to ground. The market share of China’s railway freight volume (excluding ocean shipping) has dropped rapidly from 50 percent in 2005 at 3 percentage points per year to only 17.1 percent in 2016.

Fourth, the high speed rail drove up the cost of freight. China Railway has relied on a continuous increase in the price of railway freight to make up for the serious losses of the high speed rail, thus driving the cargo owners to use ground transportation. Hence the increase in the ground transportation cost.

Fifth, freight transportation is heavily dependent on roads which aggravate air pollution. The rapid decline in the market share of railway freight transport has led to a large amount of basic raw materials that rely on ground transport, which has increased air pollution. This problem is more prominent in densely populated areas such as the Beijing-Tianjin-Hebei region and the Yangtze River Delta.

Source: Radio Free Asia, January 29, 2019
https://www.rfa.org/mandarin/Xinwen/wul0129-01292019030949.html

Briefings | | February 20, 2019 | Economy/Resources

CNA: Xi Jinping stated that China will not follow the path of Western Constitutionalism

There have been constant discussions on the relationship between the party and the law and which one is more powerful. In a list of internal speeches that Xi Jinping made, Xi has repeatedly stated that China will not follow the path of Western Constitutionalism. The Central News Agency published an article which contains those speeches. Below is the summary of Xi’s statements:

1. In August 2018, during the first meeting of party’s Central Committee, Xi said that the party’s policy is the forerunner and guide on national law. (China) will never take the Western constitutional path. To promote the rule of law comprehensively, China must take the right path. It must proceed from China’s national conditions and actual conditions and follow the path of the rule of law that suits us; it will not copy the models and practices of other countries. It will not follow the Western “constitutionalism,” “separation of powers,” and “judicial independence.”

2. In January 2014 during the Political Work Conference of the Central Committee, Xi said that, “The relationship between the party’s policies and national laws should be handled correctly.” The party’s policies and the national laws are “essentially consistent” and are the reflection of the fundamental will of the people. However, “the party’s policy is the guide concerning national law; it is the basis of legislation and an important guide for law enforcement and justice.” Xi also said that “it is necessary to be capable of seeing that the party’s will shall also be the will of the state; it will form the law through legal procedures,” it will ensure the effective implementation of party policies through the law,” and will ensure that the party plays the overall role of the overall leadership and the parties to the agreement.”

3. In February 2014, Xi told a group of provincial level officials that the “Chinese people’s democracy” is essentially different from Western constitutionalism. “The leadership of the party is the most essential feature of socialism with Chinese characteristics.” Xi stressed that, “We say that governing the country according to law means that, under the leadership of the party, the general public manages state affairs through various channels and forms in accordance with the constitution and the laws.” As for “ruling the country according to the constitution and governing according to the constitution, it is not to negate and abandon the party’s leadership, but to emphasize that the party leads the people to formulate the Constitution and the laws, and the party leads the people to implement the Constitution and the laws.”

4. In February 2015, Xi told another group of provincial level officials that the relationship between the party and the law is a political trap, a false proposition. To the party and the government organizations and leading cadres at all levels, which side has the power is the true issue.

Source: Central News Agency, February 16, 2019
https://www.cna.com.tw/news/acn/201902160100.aspx

Briefings | | February 17, 2019 | Government/Politics

A Chinese Local Government Shames a Fugitive by Spray-painting His House

A local government in Guangdong Province of China was reported to have spray-painted the characters, “telemarketing fraud fugitive” on the front door of a telemarketing fraud fugitive’s house. It also publicized a letter to family members of the fugitive, including a threat to freeze the identity cards and financial cards of the fugitive’s direct family members.

According to Beijing Youth Daily, a Chinese newspaper based in Beijing, a recent message that the government of Shuzai Township of Dianbai District in Maoming City of Guangdong Province released has drawn widespread attention on the Internet. The Chinese Communist Party’s Shuzai Township Committee and the Shuzai Township People’s Government signed a “letter to the families of fugitives,” dated February 3. The letter stated that, if the telemarketing fraud fugitives do not submit themselves before February 10, the township government will cut the water and electricity supply of their homes, spray-paint the words “telemarketing fraud fugitive” on the suspects’ houses, and freeze the identity cards and financial cards of the fugitives’ direct family members.

On February 13, some netizens released videos and photos showing that the local officials have spray-painted the house of a fugitive. Netizens have expressed that the government’s action was too arbitrary and questioned the act of implicating innocent family members.

Source: Central News Agency, February 15, 2019
https://www.cna.com.tw/news/acn/201902150181.aspx

Briefings | | February 17, 2019 | Government/Politics

The Number of New-Born Babies Declined Rapidly in Shandong Province

The fertility situation in Shandong is a barometer for China’s national child birth rate. However, the province is going through a significant change in its population structure.

Since the implementation of the two-child policy, Shandong Province, which was once called, “China’s most productive province for child birth,” has been losing its position in fertility willingness. Recently, several prefecture-level city health planning committees or municipal governments in Shandong province published the number of births for some months in 2018. The reporter noted that the number of births has declined in different degrees.

Take Qingdao as an example. According to data that the Qingdao Municipal Government released, the indications are that, in 2018, around 90,000 babies were born among the registered population of Qingdao, which is a significant decline. Figures show that the population born from January through November fell by 21.1 percent and the number of second child births fell by 29 percent. In Yantai, Liaocheng, Dezhou, and other large cities with a permanent population of more than 5 million, the number of newborns also declined in 2018.

Source: National Business Daily, January 9, 2019
http://www.nbd.com.cn/articles/2019-01-09/1289523.html

Briefings | | February 17, 2019 | Economy/Resources

Pro-Beijing Chinese Group Sues Kazakhstan Human Rights Organization

Chinese authorities have drawn global attentions for building re-education camps in Xinjiang. Atajurt Kazakh Human Rights, a Kazakh civil organization, has volunteered to disclose the inside stories about the Xinjiang Re-education camps and to assist the Kazakh, Uighur, and Kirgiz people in Xinjiang in finding missing or imprisoned relatives and friends. Recently, a pro-Beijing local Chinese group in Kazakhstan filed a lawsuit against Atajurt, charging the organization and its founder Serikzhan Bilash with “destroying the friendship between China and Kazakhstan.” It asked the court to declare Atajurt an illegal organization.

According to Radio Free Asia, Atajurt obtained a plethora of information regarding the Chinese government’s ethnic policies and practices in Xinjiang, including burning The Koran, demolishing mosques, prohibiting ethnic minorities from holding traditional weddings or funerals, and even sentencing Imams or causing Imams to die in prison. This information has drawn attention from the United States, the United Nations, and the European Union.

It has been said that the 37-member “patriotic overseas Chinese” group has close ties with the Chinese Embassy. According to Serikzhan, these people have participated in a number of social events that the Chinese Embassy organized in Kazakhstan, such as the annual “National Day” dinner, and they also attended the Chinese People’s Political Consultative Conference (held in Beijing). He said that, “Their purpose is to stop us from organizing activities and stop us from continuing to collect information and evidence about the Xinjiang ‘re-education’ concentration camps.”

Source: Radio Free Asia, February 13, 2019
https://www.rfa.org/mandarin/yataibaodao/shaoshuminzu/ql1-02132019094914.html

Briefings | | February 14, 2019 | Geo-Strategic Trend

Party’s Mouthpiece Newspapers Are Growing in Spite of the Trend

Because online media have had an effect, many media in China have been unable to make ends meet due to the drop in advertising revenue. Around New Year’s Day 2019, more than ten paper-based media such as Beijing Morning Post, Beijing Suburban Daily and Heilongjiang Morning News had ceased publication. Another reason for the suspension is related to the authorities’ tightened control over what the reporters can cover.

A political observer published an article on Monday February 11, pointing out that the Internet is “killing” traditional media. In particular, the popularity of smartphones and social media has led to a “free fall” in the circulation and advertising volume of newspapers and magazines. The advertising revenue of Chinese newspapers has shrunk from 41 billion yuan (US$60.6 billion) in 2012 to 10.2 billion yuan (US$1.5 billion) in 2016, a drop of three-quarters in just four years. This is also comparable to the decline in the American newspaper industry.

A unique phenomenon in the decline of traditional media in China is that most of the publications that went down or died are local morning and evening newspapers concentrating on stories about local people and events, while the party’s mouthpiece newspapers have not stopped their publications but have generally exhibited a trend of growth. Researchers found that the party’s mouthpiece newspapers have a variety of new sources of income, including local governments’ direct subsidies. For example, Guangzhou Daily, the mouthpiece for the Guangzhou Chinese Communist Party Committee, received a subsidy of 350 million yuan (US$52 million) in 2016. Local governments also put a number of advertisements in the party newspapers to promote their political achievements. Amid the current wave of anti-corruption campaigns, officials dare not put money into their own pockets, but choose to spend money on party newspaper advertisements in order to benefit their careers. In addition, officials need to read the party newspapers to understand the policy trends. They can also showcase their political awareness by subscribing to many party newspapers. All these have led to an increase in the circulation of party newspapers.

An observer told Radio Free Asia, “Because the media is controlled, the media that the party runs still relies on fiscal expenditures. On newspaper subscriptions, every year the provincial government and the provincial propaganda department issue directives to tell us which newspapers we need to subscribe to. People’s Daily and Beijing Daily, (we have to subscribe to them).”

Yang Shaozheng, a former professor at Guizhou University, told RFA that, in mainland China, there is no real market-oriented media. All media have the surname of “party,” but some media are more market-oriented. The cessation of the metropolitan and local newspapers is a good thing for the Chinese Communist Party. “In that case, the Communist Party can shrink the battle’s front line and make sure all the mouthpieces have one voice, which is the voice of the party. The whole country’s ideologies are unified.”

Source: Radio Free Asia, February 13, 2019
https://www.rfa.org/mandarin/yataibaodao/meiti/ql2-02132019095151.html

Briefings | | February 14, 2019 | Information/Technology

Lawsuit against State Enterprise in China’s “Belt and Road Initiative” Project

China’s “Belt and Road” port project is involved in a legal dispute in Djibouti in the Gulf of Aden in Africa. China’s listed state-owned company China Merchants Port (SEHK: 144) was charged with ignoring the port operator’s franchise agreement and investing in the construction of a new terminal in Djibouti. This is the first time that a multinational company has filed a lawsuit against a Chinese state-owned enterprise in Hong Kong for its “Belt and Road” project.

In August last year, Dubai-based global port operator DP World filed a lawsuit in the Hong Kong High Court against China Merchants Port, that China Merchants Port, knowing that the Djibouti government and DP World had already signed a 30-year port franchise, still unlawfully procured and/or induced Djibouti’s breach of its agreement with DP World.

According to the indictment, the Djibouti government signed an agreement with DP World in 2004 that DP World would enjoy a 30-year franchise for the Doraleh Container Terminal (DTC), which was put into operation in 2009. However, three years later, China Merchants Port proposed cooperation with the Djibouti government and finally built a new “Doraleh Multi-purpose Terminal” next to the local Chinese People’s Liberation Army base. In 2017, the Djibouti government and China Merchants Port signed another agreement to build the “Doraleh International Container Terminal.”

This is the first time that a multinational company has sued a Chinese state-owned enterprise in relation to the “Belt and Road” project in Hong Kong. The case is viewed as a test of Hong Kong’s judicial independence.

Source: Radio Free Asia, February 11, 2019
https://www.rfa.org/mandarin/yataibaodao/jingmao/gf1-02112019095745.html

Briefings | | February 13, 2019 | Geo-Strategic Trend

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