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Briefings - 64. page

In China, Conversations in Taxis Are Monitored

A netizen recently shared an experience on a social media platform in China regarding a Beijing taxi ride — there was a notice posted in the taxi indicating that all conversations would  be recorded. The notice included a line of text saying “The Chinese Communist Party (CCP) is good” (probably as a reminder to the passengers not to criticize the CCP).

This incident sparked discussions among internet users. Some mentioned that taxis in many cities are conducting full-trip video recording. Some cited instances where verbal altercations between passenger and driver led to later driver reprimands.

In September 2018, Didi, China’s largest ride-hailing car servicer, announced that it would implement “safety reforms” under government pressure. China’s Ministry of Transportation led a joint investigation into Didi involving 10 departments of the government, including the CCP Central Political and Legal Affairs Commission and the Ministry of Public Security. Soon after, Didi began rolling out full-trip recording functionality for its ride-hailing service.

Source: Aboluo, November 11, 2023
https://www.aboluowang.com/2023/1111/1976870.html

Briefings | | |   @CS Social Stability

China Recalibrates “Belt and Road” Lending

AidData, a research lab at William & Mary’s Global Research Institute, released a new report titled “Belt and Road Reboot: Beijing’s Bid to De-Risk Its Global Infrastructure Initiative.” The report details how Beijing has recalibrated its financing of overseas development.

China remains the world’s largest source of international financing for infrastructure development, surpassing both the U.S. and the World Bank. The report outlines China’s strategies for mitigating risks in its lending portfolio. To address distressed debts, short-term measures include emergency lending to debtors and sweeping repayments from borrowers’ cash collateral. Meanwhile, China has been de-risking its overseas investment portfolio by outsourcing risk assessment to Western banks that have “stronger due diligence standards and safeguard policies.”

In the face of soft power challenges, Beijing has adapted its allocation of international aid and credit, emphasizing investment in countries where neither China nor the U.S. holds a dominant soft power advantage. Additionally, Beijing has doubled investment in regions where China has gained reputational favor at the expense of the U.S.

Source: AidData, November 6, 2023
https://www.aiddata.org/blog/belt-and-road-bounces-back

Briefings | | |   Economy/Resources Geo-Strategic Trend

Discipline Inspector: Diplomats Face High Risk of Being Turned by Foreign Forces

The latest issue of “China Discipline Inspection and Supervision” magazine recently published a signed article by Zhang Jiwen (张际文), the head of the Discipline Inspection and Supervision Team stationed at the Office of Chinese Communist Party’s (CCP) Central Foreign Affairs Working Committee. The CCP Central Foreign Affairs Working Committee is the highest CCP organ that oversees China’s foreign affair work, including the work at the Ministry of Foreign Affairs.

The article says that Chinese diplomatic and foreign affairs officials are the main workforce of foreign affairs work and are at the forefront of such work. They face a relatively high risk of being turned (i.e. recruited) or bribed by foreign forces.

Some commentators view this as a hint regarding what happened to Qin Gang (秦刚), China’s former Minister of Foreign Affairs.

Source: The Paper, November 4, 2023
https://m.thepaper.cn/newsDetail_forward_25180379

Briefings | | |   Government/Politics US-China Relations

Xi Jinping Received Representatives of “Fengqiao-Style Work”

{Editor’s note: The “Fengqiao experience” was a Mao-era practice from the 1960’s. It refers to a practice from China’s Cultural Revolution where masses of citizens would monitor and “reform” those who are labeled as class enemies. In the town of Fengqiao, Zhejiang Province, CCP cadres relied on grassroots mobilization of masses to “reform reactionary elements,” a practice which Mao promoted for nationwide adoption. Xi Jinping has been making efforts to revive this practice [1]}

The Chinese Communist Party’s (CCP’s) Central Political and Legal Affairs Commission has selected 104 work units nationwide as the role model for applying the “Fengqiao-Style Work Method.” On November 6, Xi Jinping met with representatives of the selected units at the People’s Great Hall in Beijing. He encouraged them to continue their efforts, adhere to and develop the “Fengqiao Experience” in the new era, and make greater contributions to advancing a safer China.

Aboluo commented that the meeting conveyed significant importance with attendees of all the key figures in China’s political and security apparatus: Cai Qi (member of CCP Politburo Standing Committee and real power holder second only to Xi Jinping), Li Xi (Party Secretary of the Central Commission for Discipline Inspection), Chen Wenqing (Secretary of the Political and Legal Affairs Commission), Wang Xiaohong (State Council member and Minister of Public Security), Wu Zhenglong (Secretary-General of the State Council), Zhang Jun (President of the Supreme People’s Court), and Ying Yong (Chief Prosecutor of the Supreme People’s Procuratorate).

Sources:
1. Chinascope, September 28, 2023
http://chinascope.org/archives/33305
2. People’s Daily, November 7, 2023
http://paper.people.com.cn/rmrb/html/2023-11/07/nw.D110000renmrb_20231107_1-01.htm
3. Aboluo, November 7, 2023
https://www.aboluowang.com/2023/1107/1974826.html

Briefings | | |   @CS Government/Politics

Ministry of State Security: Be a Firm Guardian of Financial Security!

China’s Ministry of State Security published an article to state that it will safeguard China’s financial security, and that others should do the same. Commentators suggested that the article indicates China is running out of options for sustaining its financial market and is looking to expand the police forces for support. The following is a translation of the article:

Financial security is an important part of national security. The maintenance of financial security is a major responsibility with strategic and fundamental importance concerning China’s overall economic and social development. To promote high-quality development of China’s financial industry, we must build a solid defensive perimiter for financial security and limit what financial risks we are willing to accept.

Some countries treat finance as a tool for geopolitical games, repeatedly acting as currency hegemon and [threatening others by] waving the “financial sanctions” stick. Some ill-intentioned people [within China] have tried to stir up turmoil and make money during the [resulting] chaos. There are not only people who short-sell Chinese assets when they anticipate China’s financial market will fall, but also people who advocate for the fall of the financial markets or who steal money from the financial markets. They have attempted to shake the confidence of the international community in investing in China and to trigger financial turmoil in China. These factors have brought new challenges to the maintenance of financial security under present circumstances.

State security organs should place greater importance on preventing and resolving financial risks; actively participate in the development of national security systems in the economic and financial fields; closely monitor, accurately predict and effectively prevent national security risks in the financial field; crack down on and punish illegal and criminal activity in the financial field that jeopardizes national security; act as a steadfast protector of financial security; and make contributions for the sake of national security to the advancement of high-quality financial development [of China] and high-level opening up. (Ministry of State Security)

Source: Sina, November 3, 2023
https://finance.sina.cn/2023-11-03/detail-imzthyww3984891.d.html?oid=%E8%B4%A2%E7%BB%8F%20%E6%97%A0%E9%94%99%E7%89%88%E7%BB%B4%E6%8A%A4%EF%BC%88kxys.vip%E7%94%B5%E6%8A%A5%EF%BC%9A@kxkjww%EF%BC%89.smb&vt=4&cid=76654&node_id=76654

Briefings | | |   Economy/Resources Government/Politics

CCP Reform Committee Calls for Optimization of State-Owned Enterprises

The 3rd meeting of China’s Central Committee for Comprehensively Deepening Reform of the Chinese Communist Party was held on November 7th. Directives from the meeting stressed the importance of “optimizing the layout of state-owned enterprises, strengthening supervision of monopolistic industries, improving the state capital operating budget system, and emphasizing fiscal discipline.” The Committee is chaired by Xi Jinping, who presided over the meeting.

Other dictates resulting from the Committee’s meeting include:

  • The state capital operating budget is important and should be improved to expand its scope, strengthen its functions, better manage revenue and spending, and increase fund effectiveness.
  • Adhere to Party leadership and fully utilize the [Chinese] system’s advantage of concentrating resources on major initiatives. The goal is to optimize the distribution and structure of state-owned enterprises, concentrating state capital in key national security industries, public services, emerging strategic industries, and improving people’s livelihoods. This will allow state enterprises to better align with national strategies.
  • For natural monopoly industries like electric power, oil, gas and rail, regulation should focus on ensuring that those industries fulfill national security duties, social responsibilities, and business scope limits.

The Committee meeting reiterated the principle of “overcapacity reduction” and the idea of “living a tight life” fiscally. It called for strengthening budgetary constraints, promoting performance management, rationalizing revenues and expenditures, improving people’s livelihoods, and ending extravagance and waste.

Source: Central News Agency (Taiwan), November 7, 2023
https://www.cna.com.tw/news/acn/202311070369.aspx

Briefings | | |   Government/Politics

Local Governments’ Illegal Debts Highlight Fiscal Strain on China

China’s Ministry of Finance disclosed eight cases of illegal debt held by local governments, highlighting the seriousness of local debt issues facing the country. Since 2018, local governments have violated national-level policy by forcing state-owned enterprises and banks to advance billions of yuan in funds for urban development, infrastructure projects, and other expenditures that should have been funded by municipal or provincial budgets instead. This has created tens of billions of yuan in “hidden debt” in certain cities.

Examples include Hubei Province’s creation of 21.48 billion yuan (US$2.95 billion) in hidden debt through land development projects, Guangxi Province’s 17.7 billion yuan (US$2.43 billion) of debt for land projects, and Shaanxi Province’s 2.6 billion yuan (US$360 million) for a conference center. Other cases involved hundreds of millions of yuan in illegal advances for flood relief and other spending.

Banks were found complicit in the practice, with the Agricultural Development Bank of China’s Shaanxi branch illegally providing 1.3 billion yuan (US$180 million) that went toward river management projects in Xi’an. The Agricultural Bank’s Wuhu branch was found to have illegally loaned 471 million yuan (US$64.7 million) to the local government.

China’s Finance Ministry released information about these cases to hold local officials and banks accountable and warn others against engaging in the practice. The release highlights the financial difficulties faced by local governments, where even basic infrastructure and public works spending has required procurement of illegal hidden debt, typically via shell companies owned by the local government.

Beijing’s attempt at introducing accountability through publicity will likely be insufficient to resolve the issue absent more comprehensive reforms.

Source: Central News Agency (Taiwan), November 6, 2023
https://www.cna.com.tw/news/acn/202311060331.aspx

Briefings | | |   Economy/Resources

Plummeting Fertility in China Likely to Sustain Population Decline into Next Century

China’s birth rate has fallen sharply, leading to negative population growth that is likely to continue into the next century, according to Chinese economists. This will not only affect the labor supply but also slow economic growth. Zuo Xuejin, former Shanghai Academy of Social Sciences executive, said at a recent economic forum that coping with demographic changes and creating high-quality growth [in the Chinese economy] would require speeding up the country’s transition to a demand-centric economy and increasing investment in human capital.

Since the country’s total fertility hit a record low in 2022, China’s various policies aimed at increasing the birth rate have met with limited success. Experts believe negative population growth will persist as fertility remains far below the replacement level of 2.1 children per woman. Modeling shows that, even with optimistic assumptions regarding a rebound in fertility, China’s population decline could continue through 2097. If current lower fertility rates continue, negative growth may persist into the 2100’s.

The urban concentration of population and economic activity in major coastal and inland city clusters will continue even as cities face depopulation. Local governments would do well to avoid wasted infrastructure investment in the face of population decline.

Source: Central News Agency (Taiwan), November 5, 2023
https://www.cna.com.tw/news/acn/202311050119.aspx

Briefings | | |   Economy/Resources