Skip to content

Briefings - 59. page

China’s Local Government Debt Soars to $40 Trillion In November; Half of New Issuance is for Refinancing

In the first 11 months of 2023, China’s local governments issued RMB 9.14 trillion (US$1.28 trillion) in bonds, exceeding the RMB 7.4 trillion (US$1.04 trillion) issued throughout all of 2022. Half of the bonds issued this year were used for debt refinancing. The scale of refinancing bonds saw an 82% annual increase to RMB 4.59 trillion (US$643 billion). In contrast, RMB 4.55 trillion (US$637 billion) in new bonds (not for refinancing) were issued, down 4% annually.

Two main factors drove the large increase in refinancing bonds. First, RMB 3.6 trillion (US$504 billion) worth of local government bonds are maturing this year, putting pressure on government finances. Refinancing bonds are helping to repay these old debts. Second, to reduce risk, China’s Ministry of Finance allowed for special refinancing bonds with extended redemption periods. Since October of this year, over 20 provinces/municipalities in China have issued a collective RMB 1.3 trillion (US$182 billion) in these special bonds, far higher than the RMB 200 billion (US$28 billion) issued last year.

By the end of October, 2023, China’s local government debt balance passed RMB 40 trillion (US$5.6 trillion) for the first time ever. This is double the figure from before 2019, when local government debt stood at less than RMB 20 trillion (US$2.8 trillion).

Taiwan’s Central News Agency cited a statement by China’s Ministry of Finance that rapid local debt growth since the pandemic outbreak is related to increased fiscal expansion and local debt scales.

Source: Central News Agency (Taiwan), December 5, 2023
https://www.cna.com.tw/news/acn/202312050237.aspx

Briefings | | |   Economy/Resources

Chinese Media Outlet Bans Use of Translations Not Provided by Xinhua News

South Korean daily newspaper Chosun Ilbo reported that a prominent Shanghai-based Chinese media outlet has banned editors and journalists from quoting foreign media reports translated by outlets other than China’s state-run Xinhua News Agency. The ban was allegedly issued in July after the outlet appointed a new president affiliated with the Chinese Communist Party. Analysts say the move reflects Beijing’s growing efforts to control the flow of information from abroad and convey the leadership’s narrative to the public.

The Chosun Ilbo article argues that this sort of information control is not without precedent in China, citing the security law that led Hong Kong outlets like Sing Tao Daily and Apple Daily to come under Beijing’s influence or cease operations. It represents China cutting off channels for “anti-China public opinion.” According to a Chinese journalist, domestic media can now only do independent reporting on “little things” concerning the country.

The article states that China started blocking the websites of major Western news outlets like Time and The Economist in 2016. Now, domestic media are restricted from citing foreign reports, cutting the flow of outside information into China. Recent years have also seen tight control over state media coverage of Xi Jinping at official events, with only pre-approved CCTV, Xinhua, and compliant outlets granted access. As a result, Chinese media present a uniform, government-sanctioned image of Xi, with only a few vetted experts allowed to comment.

Source: Central News Agency (Taiwan), December 5, 2023
https://www.cna.com.tw/news/acn/202312050034.aspx

Briefings | | |   Government/Politics

China’s College Graduates to Hit Record High in 2024

Statistics from China’s Ministry of Education show that 11.79 million students are expected to graduate from Chinese colleges and universities in 2024, an increase of 210,000 compared to 2023. This comes at a time when China is facing widespread bankruptcies and layoffs. The Ministry of Education held a meeting with the Ministries of Human Resources and Social Security on December 5th to discuss employment preparations for the record number of graduates.

The Ministry of Education called for an “Action Plan” to promote graduate employment through various measures. It stated that colleges need to equip specialized employment staff, develop market-based employment channels, and continue efforts for college leaders to visit companies to create job opportunities. Other initiatives include expanding the “Ten Thousand Enterprises on Campus Plan” to provide graduates access to more high-quality job information.

On December 5th the Ministry released guidelines with 26 initiatives asking all Chinese universities to make graduate employment a top priority. The notice stressed the challenging economic climate and need for creative solutions to prevent employment difficulties among the high number of graduates. It outlined specific strategies for colleges to realize this goal. These included job fairs, entrepreneurship support, vocational guidance, and tracking graduate employment outcomes.

Source: Radio Free Asia, December 5, 2023
https://www.rfa.org/mandarin/Xinwen/2-12052023103133.html

Briefings | | |   Economy/Resources

China Concedes in Dispute with Lithuania over Taiwanese Representative Office, Lifts Sanctions

China recently lifted the severe trade restrictions imposed on Lithuania after the Baltic state established a “Taiwanese Representative Office” in late 2021.

The sanctions were part of Beijing’s vigorous efforts to prevent  other countries around the world from establishing diplomatic relations with Taiwan. Representatives of the Chinese government said that it would only be permissible for the Taiwanese office in Lithuania to be referred to as a “Taipei Economic and Cultural Representative Office,” and that the terminology “Taiwanese Representative Office” was unacceptable. Under normal diplomatic relations between sovereign states, a similar outpost of one country within another would be called an “Embassy.”

German newspaper Frankfurter Allgemeine Zeitung quoted Lithuanian Foreign Minister Gabrielius Landsbergis on the new development in China-Lithuania relations: the Chinese government has ended its attempt at “economic coercion,” and the name “Taiwanese Representative Office” will remain despite Beijing’s criticism. Frankfurter Allgemeine Zeitung praised Lithuania, saying that the small country had won the principles-based fights.

Lithuania conducts trade with China worth tens of millions of euros. China’s restrictive measures led to an 80% drop in Lithuania’s 2022 exports to China. The EU raised the issue of Chinese-Lithuanian trade with the World Trade Organization at the end of 2022.

Many EU countries, including Eastern European countries, no longer see China as a favorable partner. Last year, Baltic countries Latvia and Estonia followed Lithuania’s lead in withdrawing from the China and Central and Eastern European Countries (China-CEEC) initiative, also known as the 14+1 initiative (formerly 17+1). These Baltic states have established trade offices with Taiwan. The Czech Republic also got closer to Taiwan, deviating from its historically-close ties with China. China’s support of Russia during the Russia-Ukraine war further alienated many countries in the EU.

Facing serious economic challenges domestically, China now seeks to ease relations with Western countries. This recent move on trade with Lithuania is one such effort, potentially lightening tensions with the European Union (EU) ahead of the upcoming China-EU Summit. In another such effort, Beijing has cancelled travel visa requirements for citizens of five different EU countries, enabling easier travel to China.

Source: Back China, December 3, 2023
https://www.backchina.com/news//2023/12/03/889175.html

Briefings | | |   @CS Economy/Resources Geo-Strategic Trend

RFA: Beijing Removing English from Road Signs

According to Radio Free Asia (RFA), dual-language road signs in Beijing are being replaced with Chinese-only road signs. Previously, many road signs had both Chinese and English. Authorities in Beijing said the updating will enhance the “overall city image,” give citizens a sense of belonging, and improve road safety and traffic efficiency. The change comes not long after directional signs on highways across China were changed from Chinese-language-only to dual Chinese-and-English signs.

The move  triggered a nationwide online discussion. Some speculated that Beijing may feel that its relationship with the West is completely hopeless, citing the recent meeting between Biden and Xi Jinping at the APEC summit in the US. Some netizens expressed worry that the all-Chinese road signs may cause inconvenience to foreign tourists. Others stated that many government officials send their kids to foreign countries [in the West] even as Western languages are at home in China. Meanwhile, some supporters of the new policy expressed the view that the transportation department’s signage update is a manifestation of cultural confidence and of China’s international status.

Both the Traffic Management Bureau of the Beijing Municipal Public Security Bureau and Beijing’s Municipal Traffic Service Hotline were unavailable for comment.

Source: RFA, December 1, 2023
https://www.rfa.org/mandarin/yataibaodao/meiti/gt-12012023070307.html

Briefings | | |   Government/Politics Social Stability

Lianhe Zaobao: China’s Manufacturing PMI Fell in November

China’s November Manufacturing Purchasing Managers Index (PMI) was 49.4 percent, down 0.1 percentage points from the previous month, indicating that the market demand has declined. Among the five sub-indexes that make up the manufacturing PMI, the new orders index, the raw materials inventory index and the employment index are all lower than the critical level of 50 percent.

The raw materials inventory index for November stood at 48.0 percent, down 0.2 percentage points from the previous month, indicating a decrease in stock levels for major raw materials. The employment index was 48.1 percent, an increase of 0.1 percentage points from the previous month, indicating that the employment situation of the manufacturing companies has recovered slightly. Lianhe Zaobao, Singapore’s primary Chinese language newspaper, reported on the new PMI numbers, saying that the prosperity level in Chinese manufacturing is declining.

PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline. China’s PMI numbers are jointly published by the China Federation of Logistics & Purchasing and the China Bureau of Statistics.

Source: Lianhe Zaobao, November 30, 2023
https://www.zaobao.com.sg/realtime/china/story20231130-1453217

Briefings | | |   Economy/Resources

Walmart to Move Procurement Center to Vietnam

Well-known Chinese news site Tencent News recently reported that Walmart has announced it is moving procurement center from China to Vietnam.

As a global manufacturing center, China’s labor costs are rising, which undoubtedly brings additional burdens to large-scale retailers. Meanwhile, Vietnam is an emerging manufacturing country with relatively low labor costs and a loose regulatory environment. Thus, Vietnam has become Walmart’s first choice as an alternative to Chinese labor.

China’s status in the global manufacturing supply chain is gradually declining. At the same time, other countries are becoming more important links in a transformed global supply chain. These other countries include Mexico, India, Thailand, Vietnam, etc.

According to the Tencent article, these countries are likely to succeed China and become the next world factory. The impact of Walmart’s departure from China is not only the loss of an important foreign-owned retail system, but more importantly, there is a series of chain reactions that may result from Walmart’s departure. As one of the world’s largest retailers, Walmart has a huge procurement operation. Once Walmart leaves, it will no longer have demand for Chinese suppliers, which may lead to increased pressure on the survival of some small and medium-sized Chinese manufacturers. Also, Walmart has a large number of employees in China, and the departure may result in significant job losses. This will bring pressure to China’s job market and social stability. However, Walmart’s departure will provide more opportunities for Walmart’s rivals to compete for the Chinese consumer market share.

Walmart began to close its stores in China in 2016. Over 130 Walmart locations in China have closed since then.

Source: Tencent News, November 23, 2023
https://new.qq.com/rain/a/20231123A00DCU00

Briefings | | |   Economy/Resources Geo-Strategic Trend

Canadian Intelligence: China Attempting to Recruit Canadian Government Employees

The Canadian Security Intelligence Service (CSIS) warned that China is plotting to recruit Canadian scholars and government officials. It has issued an alert to federal employees, warning of a large-scale email campaign from Beijing attempting to lure Canadian employees into participating in an overseas “talent program.” The alert included a photo of a recruitment email with the subject “2024 Invitation for Overseas Talents to Apply for the China Global Excellent Scientists Fund.” The CSIS stated that the email requested that recipients supply “significant” personal information and promised salaries ranging from 95,000 Canadian dollars to 374,000 Canadian dollars.

Source: Radio France International, November 25, 2023
https://www.rfi.fr/cn/国际/20231125-加情报部门警告中国针对加拿大政府雇员的招聘活动

Briefings | | |   Geo-Strategic Trend