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Briefings - 57. page

China: Negative Commentary on Economy is a National Security Risk

China’s Ministry of State Security recently published an article saying that economic security is the foundation of national security. It said that economic threats must be dealt with to promote China’s economic recovery and “high-quality development [of the economy]. The article accused foreign critics of fabricating false narratives about China’s economy to undermine market confidence and impede growth. It vowed to crack down on illegal activities that jeopardize economic security.

Meanwhile, social media platforms like Weibo are instructing bloggers to avoid pessimistic comments about China’s economy or face severe punishment. Some users were notified that downplaying the economy has become a “red line” that risks heavy penalties if crossed. This reflects the CCP’s heightened sensitivity to dissent and its effort to control public discourse about economic issues.

The article tied economic security to the national security concepts emphasized by Xi Jinping. It blamed foreign actors for creating “discourse traps,” manufacturing false narratives about China’s economic decline. The article did not address concerns about how China’s own policies have contributed to the trend of economic decoupling between China and global economy.

By framing economic commentary as a national security issue rather than just economic analysis, the CCP is severely restricting speech within China. Self-censorship by firms like the China International Capital Corporation (CICC) and social media platforms show the chilling effect of this new policy. Some Chinese netizens have noted that, ironically, the act of banning negative comments about the economy may itself be damaging to perceptions about the Chinese economy and business environment.

Source: Voice of America, December 15, 2023
https://www.voachinese.com/a/china-s-ministry-of-state-security-says-badmouthing-china-s-economy-endangers-national-security-20231215/7399543.html

Official Media on Chinese Economy: Maintain High Vigilance against Black Swan Events

The Chinese Communist Party’s Central Economic Work Conference listed real estate as a key area for risk prevention. State media stated that high vigilance is needed to guard against black swan events and gray rhino events that could destabilize the economy.

A commentary in the China Economic Daily said that the conference made clear arrangements to resolve risks around real estate, local debt, small banks, and illegal finance. According to the article, the goal is to hold the line against systemic risks while supporting development. This requires caution, preparation, and deeper consideration of potential troubles to guard against economic “rhino” events.

The article said that China faces many challenges – deep economic contradictions, accumulating risks, and an unfavorable global context. “In order to ensure smooth modernization, we must adhere to [the principle of] high-quality development and security.”

The Central Economic Work Conference emphasized stability through steady progress. More policies aim to stabilize expectations, growth, and employment. China will continue proactive fiscal policy and prudent monetary policy.

The commentary stressed that strong bottom-line thinking is indispensable. China must be cautious as when “walking on thin ice” and must “think of danger during times of peace.” It must estimate difficulties fully and be stable in coordinating resolution of local debts.

Source: Central News Agency (Taiwan), December 17, 2023
https://www.cna.com.tw/news/acn/202312170102.aspx

CNA: China’s iPhone Ban Expands

Primary Taiwanese news agency Central News Agency (CNA) recently reported that a growing number of Chinese government agencies and state-owned companies are ordering employees not to bring iPhones and other foreign-brand phones to work. The spread of such unprecedented bans is likely to lock out companies like Apple and Samsung from parts of the world’s largest mobile phone market.

In the past couple of months, several state-owned enterprises and several government agencies in at least eight Chinese provinces (including in wealthy coastal provinces) have instructed employees to start bringing only Chinese-brand mobile phones to work. The situation has intensified significantly from September, when only a handful of agencies in Beijing and Tianjin began requiring employees to leave foreign devices at home.

It is unclear exactly how many Chinese government agencies have issued such directives banning foreign phones. The eight province-level governments involved so far are Zhejiang, Guangdong, Jiangsu, Anhui, Shanxi, Shandong, Liaoning and Hebei.

This new round of bans has seen much more extensive and synchronized action, marking a significant acceleration of the Chinese authorities’ shift away from dependence on U.S. technology. The ban could cause a quick and direct hit to Apple’s market share in China. For Apple, which uses China to produce most of its devices, the Chinese market accounts for about 1/5 of its revenue.

An Apple spokesperson declined to comment on the new bans. China’s State Council Information Office and the Cyberspace Administration of China, which oversee cybersecurity, also did not respond to the requests for comment.

Source: CNA, December 16, 2023
https://www.cna.com.tw/news/acn/202312163001.aspx

India’s Largest Stock Exchange Surpasses Hong Kong

The combined market capitalization of stocks listed on India’s largest stock exchange, the National Stock Exchange of India (NSE), has surpassed that of listings on the Hong Kong Stock Exchange (HKSE). Shanghai-based Chinese financial news site East Money recently reported that, as optimism about India’s economic prospects grows, the NSE is now the seventh largest stock exchange in the world.

According to the World Federation of Exchanges (WFE), the total market capitalization of stocks listed on NSE was US$3.989 trillion as of the end of November, while the total market capitalization of stocks listed on the HKSE was US$3.984 trillion. In terms of total market value of listed stocks, the NSE currently ranks behind the New York Stock Exchange, Nasdaq Stock Exchange, Shanghai Stock Exchange, Euronext, Tokyo Stock Exchange, and Shenzhen Stock Exchange.

India’s main benchmark stock index NSE Nifty 50 hit another high recently. The index has gained nearly 16 percent so far this year and is on track for its eighth straight year of gains.

India currently has the world’s fastest-growing large economy. Despite global economic headwinds, India’s economic growth this year is expected to reach 6.3 percent this year, according to the International Monetary Fund (IMF). International ratings agency S&P Global recently said in a report that India will remain the world’s fastest-growing economy for at least the next three years. By comparison, Hong Kong’s benchmark Hang Seng Index has fallen 18 percent so far this year. The index is on track for this year to be its fourth straight year of losses, the worst among major Asia-Pacific stock markets.

Source: East Money, December 12, 2023
https://finance.eastmoney.com/a/202312122930706147.html

Lianhe Zaobao: British Companies in China Expect A Tougher Year Ahead

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported on the latest survey results from the British Chamber of Commerce in China. The business confidence survey of around 300 British companies in China indicated that 60 percent of surveyed companies believe that doing business in China is more difficult this year than last year. The top three reasons that made it more difficult for them are economic factors, geopolitical factors and regulatory factors.

The report pointed out that due to the slow recovery of China’s economy after Covid-19 and the influence of geopolitical issues, British companies in China are in a state of hesitation, and many companies have postponed their investment decisions. About 55 percent of the surveyed companies said they will reduce or maintain investment levels in China operations next year. Around 42 percent of the respondents believe that the uncertainty of other countries’ trade policies towards China in the past year had a negative impact on their business operations.

The report pointed out that 2024 will be a critical year for the development of relations between China and the West, and that China’s relationship with the West is likely to become an important factor driving changes and decisions for companies that are “stagnant.”

Source: Lianhe Zaobao, December 12, 2023
https://www.zaobao.com.sg/news/china/story20231212-1455731

State Security Ministry: “Resolutely Build a Strong Economic Security Fence”

The State Security Ministry has published an article online declaring that it will “resolutely build a strong economic security fence,” echoing a statement from the Chinese Communist Party’s (CCP’s) Central Economic Work Conference held on December 11 and 12.

The article stated that “Currently, the economic sphere is increasingly becoming a crucial battlefield in major power competition. The complexity, severity, and uncertainty of the external environment are rising. To further promote economic recovery, it is necessary to overcome internal difficulties and respond to external challenges. For example, various clichés intending to undermine China’s economy continuously emerge. In essence, they attempt to construct a ‘discourse trap’ or ‘cognitive trap’ regarding ‘China’s decline’ through various false narratives.”

“National security agencies will steadfastly fulfill their duties and mission to safeguard national sovereignty, security, and development interests. They will enhance forward-looking thinking, comprehensive planning, and strategic layout for national security issues in the economic field, implementing a set of measures to maintain economic security. They will resolutely and legally crack down on those illegal and criminal activities in the economic security field that harm national security, creating a safe and stable environment for high-quality development. In coordination with relevant departments, they will continue to effectively prevent and resolve security risks in the economic field, resolutely holding on to the mission of avoiding systemic risks. This will contribute to the comprehensive advancement towards construction of a strong nation and achievement of national rejuvenation through Chinese-style modernization.”

Source: QQ, December 15, 2023
https://new.qq.com/rain/a/20231215A00RVQ00

China Will Close Public Access to Court Decision Documents

On November 21, 2023, China’s Office of the Supreme People’s Court issued a “Notice on the Construction of the National Court Judgment Document Database.” It announced that the new “National Court Judgment Document Database” will go live in January 2024. However, it will only offer internal access to court personnel to retrieve judgment documents. Lawyers, legal researchers, and the general public will not have access.

The Supreme People’s Court’s current online system, known as “China Judgments Online,” will stop operation. Many legal practitioners in China view this new development as a big setback for transparency in China’s judicial system. The old system offered legal professionals and the general public to access records during the past 10 years. Since its launch on July 1, 2013, China Judgments Online has accumulated a total of more than 143 million court decisions and has received hundred billion visits.

Source: Radio Free Asia, December 13, 2023
https://www.rfa.org/mandarin/yataibaodao/renquanfazhi/gt-12132023031651.html

Chinese Netizens Tacitly Mock CCP Line on Philippines Conflict

A recent online video showed that tens of thousands of Chinese netizens collectively mocking China National Radio – a Chinese Communist Party (CCP) mouthpiece.

On December 10th, China National Radio reported on a conflict between China’s Coast Guard vessels and Philippine ships in the South China Sea, putting full blame for the conflict on the Filipinos. Among the 50,000 comments in the comment section, the majority were not the patriotic responses that the CCP would have expected. Instead, they were comments on an irrelevant topic – the weather. People from all over China, from south to north, participated in these discussions, and the comments seemed quite amusing.

The responses were just weather at difference regions, such as “Guangzhou is hot again, when will it snow?” “When can I wear the new down jacket I bought this year, it’s so hot in Guangxi.” “Shenzhen is wearing short sleeves today, it’s so hot,” etc.

A netizen summed it up, saying, “The comments section is full of amazing people!”

Source: Aboluo, December 11, 2023
https://www.aboluowang.com/2023/1211/1989157.html