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Briefings - 4. page

Chinese Central Bank Banned Using RMB to Acquire Foreign Currencies outside China

Well-known new Chinese news site The Paper recently reported that China’s central bank just announced a new regulation restricting RMB-based RQDII (RMB Qualified Domestic Institutional Investor) investment behavior. RQDII are typically foreign banks or other financial institutions permitted to provide RMB-based financial services in Mainland China. With the new regulation in place, a RQDII investor can no longer transfer RMB to accounts outside China for foreign currency exchanges. The Shanghai Headquarter of the Chinese central bank is now tasked with overseeing cross-border RMB activities. All RQDII doing overseas investments are required to report to Shanghai HQ on their basic information, partner Chinese bank, sources of funds, scale of funds, investment plans, remittance of funds, and overseas positions. In recent years, China has been tightening up the control of overseas RMB flows.

Source: The Paper, May 3, 2018

China Finance Online: ZTE Issued Internal Memo Disclosing Progress of Recovery Effort

China Finance Online, China’s only online financial information service listed on NASDAQ, recently reported that ZTE issued an internal memo to its staff on the status of its recovery effort after the U.S. government banned American companies from exporting critical supplies to ZTE. The memo said the company was seeking a stay of the U.S. government ban and was “actively communicating” with the U.S. regulators by submitting additional supporting compliance materials. The memo emphasized that, ever since the U.S. ban, “as a globalized enterprise that grew in China,” ZTE has “strictly aligned with China’s national strategy.” The company has been actively taking steps, “firmly under the guidance of the Chinese government,” in order to “resolve the issues quickly.” The memo was issued immediately after the completion of the US-China trade negotiation between high ranking Chinese officials and the U.S delegation in Beijing. Taiwanese high-tech chip maker MediaTek just received clearance from the Taiwanese authorities to resume shipment to ZTE in a few weeks.

Source: China Finance Online, May 5, 2018

Global Times: China Fiber Broadband and 4G Cellular Networks Now the Largest in the World

Global Times recently reported on a recent study of the status of the deployment of global broadband. The study showed that, by the end of first quarter, China’s fiber-based broadband customers held an 85.3 percent share of all landline broadband markets in China. This percentage surpassed previously leading countries Japan and South Korea to make China the number one in the world. The average download speed of overall Chinese landline broadband reached above 20 mbps (megabits per second). This marks a year-over-year growth of 54.9 percent. In addition, China’s 4G cellular network now has around 3.4 million 4G base stations, which makes the Chinese 4G network the largest in the world. China’s 4G market is still expanding rapidly.

Source: Global Times, May 3, 2018

Duowei News: Beijing’s Suppression of Taiwan Is Inevitable

Duowei News published an article that stated that Beijing’s suppression of Taiwan is inevitable and that the Tsai Ing-wen administration’s incompetence in handling its domestic affairs will cause it to get into more trouble. The article was referring to the Dominican Republic’s May 1 cutting its ties with Taiwan and its establishment of diplomatic relations with Beijing. This is the third country that has discontinued its foreign relations with Taiwan since Tsai took office. The article stated that it is good news that the number of countries that recognize Taiwan is down from 20 to 19. It claimed that, for Beijing, the two sides of the Strait are still in a state of civil war. The competition between the two sides in the international arena has always been a dispute of who represents China and it is a reasonable and inevitable choice for China to suppress Taiwan. The article further attacked the Tsai administration for its inability to deal with domestic disagreements and the lack of unity among the parties. It reminded Tsai that her administration should focus more on domestic affairs and unity rather than on playing politics.

Source: Duowei, May 1, 2018

Epoch Times: Ten Years Later Victims of Sichuan Earthquake Still under Surveillance

Epoch Times reported that, as of the tenth anniversary of the earthquake in Sichuan Province, officials are still covering up their corruption and are still retaliating against those who choose to appeal. The article stated that those who were responsible for the shabby construction, especially of the school buildings, have not been held accountable; the official’s embezzlement of the rescue funding is still kept secret; and parents and the local people who reported on the officials or who wanted to appeal are still under surveillance. One woman told the Epoch Times that people were warned not to accept interviews from foreign media. She told the reporter that her house was damaged during the earthquake but she has no money to repair it. She said that the villagers were forced to sign a cash receipt showing an amount that was higher than what they actually received while the officials pocketed the rest of the money. A writer from Sichuan Province who wrote an appeal letter for these villagers told Epoch Times that he was saddened to see how those legal citizens ended up losing their freedom to speak and to appeal.

The Ministry of Civil Affairs issued a report that confirmed that, as of September 25, 2008, following the Wenchuan earthquake in Sichuan Province, 69,227 had died, 374,643 had been injured, and 17,923 were missing. The unofficial number that the Bashu United League released stated that the death toll was at 300,000. Among them, 30,000 were students; most of them were children in kindergarten. During the earthquake, the schools reported having the most casualties because of the poor quality of the buildings. The government buildings, however, were found to be the most earthquake resistant.

Source: Epoch Times, April 28, 2018

Higher Income Tax, Social Security Fees and an Over-priced Housing Market Drove Up Labor Costs in China

Well-known Chinese news site Sina recently published a news article discussing the 2018 China Green Companies Summit that the China Entrepreneur Club sponsored. Xu Shanda, the former Deputy Director-General of the Tax System Reformation Department of the State Administration of Taxation (SAT) spoke at the summit.  Xu stated that the higher personal income tax rate, social security fees, and the over-priced housing market are the three main causes that have driven the increase in labor costs in China. Currently, the personal income tax rate in China is at 45 percent, which is much higher than in developed countries. Xu also called for speeding up personal income tax reform.

Source: Sina, April 22, 2018

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