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CCP Increases Support for Young Talent in the Sciences

The Chinese Communist Party (CCP) Central Committee and the Chinese State Council have issued a document titled “Measures to Further Strengthen the Training and Utilization of Young Scientific and Technological Talents.” The initiative is a response to Western technological containment of China. The document emphasizes boosting the role of young talent in key scientific and technological initiatives.

The directive focuses on motivating and guiding young scientific and technological talents towards achieving “high-level scientific and technological self-reliance” as part of China’s journey towards “modernization and national rejuvenation.”

The measures encourage the involvement of young talents in major national scientific tasks and core technology research, setting a minimum 50% representation of individuals under 40 years of age as project leaders or core members. Funding through China’s National Natural Science Foundation for these talents is prioritized, ensuring a minimum of 45% of projects are supported.

Additional support comes from the relaxation of age, title, and qualification restrictions for participation in the National Key Research and Development Program for Young Scientists. Young scientists are further urged to lead their own research projects, with a goal of 60% of initiative leaders being under 40.

To alleviate burdens on young scientists, the initiative promotes reducing non-research obligations, aiming for over 80% of their workweek being dedicated to research. A focus on work-life balance is also promoted through improved remuneration, regular medical check-ups, psychological counseling, academic leave exploration, and fostering a supportive research environment.

Local CCP committees and governments are instructed to treat young scientific and technological work as a strategic endeavor, aligning it with regional talent development and overall economic and social growth.

The document seeks to strengthen China’s technological capabilities by harnessing the potential of its young scientific and technological talents, fostering a new generation of leaders to drive the country’s scientific progress and technological innovation in the face of international competition.

Source: Central News Agency (Taiwan), August 27, 2023
https://www.cna.com.tw/news/acn/202308270182.aspx

Briefings | | |   Government/Politics

Lianhe Zaobao: South Korean Government Establishes Working Group on China’s Financial Risks

Singapore’s primary Chinese language-newspaper Lianhe Zaobao recently reported that the South Korean government has responded to elevated risk in China’s real estate industry by setting up a special working group, the “China Economic Situation Team,” focused on the impact of Chinese financial risk on the Korean economy.

According to the article, the group will work under the policy guidance of the Ministry of Finance, maintain close cooperation with multiple government branches such as the Bank of Korea (the Central Bank), the Ministry of Industry, Trade and Energy, and the Financial Commission, and pay careful attention to changes in China’s economic situation. In addition, the government’s high-level dialogue mechanism will also focus on China’s real estate financial risks.

Given that the Korean and Chinese economies are tightly linked, South Korea’s Ministry of Finance thinks that the South Korean government should closely monitor the impact of Chinese risk on the Korean financial market and real economy. South Korea’s Economic Emergency Management Working Group, chaired by the deputy minister of the Ministry of Finance, will discuss countermeasures, and the Committee on Macroeconomic and Financial Issues will also evaluate China’s economic situation frequently.

Source: Lianhe Zaobao, August 20, 2023
https://www.zaobao.com.sg/realtime/china/story20230820-1425349

Briefings | | |   Geo-Strategic Trend

SMIC’s Net Profits Down Significantly During First Half of 2023

Chinese semiconductor manufacturing company SMIC has released an earnings report for the first half of 2023. Well-known Chinese news site Sohu (NASDAQ: SOHU) reported that SMIC’s revenue was approximately US$3.023 billion during this period, a year-over-year decrease of 19.3 percent. Net profits were approximately US$634 million, a year-over-year decrease of 34.10 percent.

The company’s revenue from wafer fabrication decreased to US$2.759 billion during the reporting period, a 21.0 percent year-over-year decrease. Wafer fabrication represents nearly 90 percent of SMIC total business. Management stated that, due to global changes in the structure of the industrial chain and the re-integration and allocation of resources, it is foreseeable that future competition will be more intense.

SMIC expects that the unfavorable situation of “volume growth with price decline” in the second quarter will continue into the third quarter. This is due to the United States’ intensified pressure on China’s chip industry as well as the laggardly recovery of the global smartphone and consumer electronics industries.

According to the latest 2022 sales rankings released by pure-play foundry companies around the world, SMIC ranks fourth in the world and first among Mainland Chinese companies. As of now, China is still the world’s largest consumer market for integrated circuits and discrete devices.

Source: Sohu, August 25, 2023
https://www.sohu.com/a/714900415_258768

Briefings | | |   Information/Technology

Large Number of Steel Traders Bankrupt and Liquidated

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, in August 2023, several cities and regions in China have successively experienced steel trader debt default incidents. Provinces and cities affected include Sichuan, Nanjing, Hangzhou, Guizhou and others. Jiangsu, Henan, Wuhan and some others have issued risk notices to warn all companies to pay attention to risk prevention, not be greedy for low prices, avoid “blind transactions,” and work together to overcome the unfolding financial crisis.

In the meantime, according to information from China’s National Enterprise Bankruptcy and Reorganization Network, a large number of steel traders have entered the stage of bankruptcy and liquidation. In just the first two weeks of August, 21 sizable steel traders received court rulings for bankruptcy and liquidation. Officials from the China Iron and Steel Association said that, in the face of development difficulties, steel companies “should jointly strengthen self-discipline, pay close attention to the total demand and structural changes of the downstream steel consumption industry, and reasonably control the steel inventory level.” The steel companies should jointly “determine production by sales,” i.e. do not turn cash into inventory; “determine production by efficiency,” i.e. do not cause operational cost increase; and “determine sales by cash,” i.e. do not turn sales into collection obligations.

Source: Sina, August 14, 2023
https://finance.sina.com.cn/money/future/wemedia/2023-08-14/doc-imzhemwz4905118.shtml

Briefings | | |   Economy/Resources

China Restricts What Apps Can be Installed on Mobile Devices

On July 21, 2023, a Chinese government website published a “Notice of the Ministry of Industry and Information Technology on the Filing of Mobile Internet Applications,” stating that Chinese companies are now required to register their mobile Internet Applications (hereinafter referred to as “apps”) with the Chinese government. Unregistered apps will not be supported by Chinese network access providers and content platforms.

Here are some key excerpts from the notice:

II. Task Specification

(1) Any app owners engaged in Internet information services in China should follow the “People’s Republic of China Anti-Telecommunications Network Fraud Law” and “Internet Information Service Management Measures” (State Council Decree No. 292) and other provisions to file their apps for the record. Those who have not filed shall not participate in app services.

(2) The Ministry of Industry and Information Technology will supervise and guide the national task of registering apps. The Communications Bureaus of provinces, autonomous regions, and municipalities are responsible for management of the implementation and supervision of app registration.

…

(9) Network access service providers, content platforms, and smart terminal manufacturers shall not provide network access, distribution, and pre-configuration services for apps that have not been registered.

Source: Chinese Government website, July 21, 2023
https://www.gov.cn/zhengce/zhengceku/202308/content_6897341.htm

Briefings | | |   Government/Politics Information/Technology

China Starts Assessing Debt Owed by Local Governments

The Economic Observer, a Chinese newspaper focused on economics, reported that Zhengzhou City (Henan Province), Tianjin, and some other places have required district and county governments to make an assessment of money they owe to the private real estate enterprises.

A number of private real estate enterprises told The Economic Observer that local city governments owe them in the range of 1 – 2 billion yuan (US$140 – 280 million). These arrears include commitments to return land premiums, land tax rebates, government-subsidized housing construction deposits, land cleaning advances, et cetera.

On August 3, Pan Gongsheng, the Party Secretary and Governor of the People’s Bank of China, presided over a symposium on financial support for the development of private enterprises. According to a person familiar with the matter, some companies attending the symposium complained about problems with local government debt.

Source: The Economic Observer, August 22, 2023
http://www.eeo.com.cn/2023/0822/602216.shtml

Briefings | | |   Economy/Resources Government/Politics

For “Humanitarian Reasons,” China Doesn’t Block Philippine Resupply of Grounded Warship in Disputed Waters

On August 7, China blocked two Philippine supply vessels from unloading supplies at the Second Thomas Shoal in the South China Sea. China blocked the supply vessels by firing water cannons at them. The vessels were supposed to deliver supplies to soldiers stationed on a Philippine warship BRP Sierra Madra that has been grounded at the atoll since 1999. Both China and the Philippines claim sovereignty over the Spratly Island area where the Second Thomas Shoal is located.

On August 22, the Philippines sent resupply ships to the shoal again. This time, China didn’t stop them.

Following the event, Xinhua published a statement by the Spokesman of Chinese Coast Guard Bureau: “On August 22, two Philippine supply vessels and two [Philippine] marine police vessels entered the waters adjacent to the Second Thomas Island in the Spratly Islands area without the permission from the Chinese Government. In accordance with the law, the Chinese Marine Police gave the Philippine vessels a stern warning, followed them throughout their entire journey, and effectively restrained them. At the same time, in view of the fact that the Philippine vessels were not carrying large-scale building materials, the Chinese Marine Police made a temporary special arrangement for humanitarian reasons, allowing the Philippine vessels to transport food and other living necessities to the military vessels stranded on the beach. China has indisputable sovereignty over the Spratly Islands and their adjacent waters, including the Second Thomas Island. China firmly opposes the Philippines using the excuse of “resupply” to deliver illegal building materials to the illegally-grounded warship. The Chinese Maritime Police will continue to protect China’s rights and carry out law-enforcement activities in the waters under China’s jurisdiction in accordance with the law.”

Source: Xinhua, August 22, 2023
http://www.news.cn/world/2023-08/22/c_1129816942.htm

Briefings | | |   @CS Geo-Strategic Trend

China’s Weaponization of Mekong River Dams to Pressure Downstream Countries

For the past decade, the Mekong River has had abnormal water pattern: high flows during the dry season and low flows during the rainy season. This is caused by the upstream Chinese dams, which release water for power generation during the dry season and retain water during the rainy season.

The Mekong River has a total length of more than 4,800 kilometers (~3000 miles) in its main branch. Its 2,139-kilometer (1330 mile) upper section in China is known as the Lancang River. After flowing out of China, the Mekong River flows through five countries in Southeast Asia – Myanmar, Laos, Thailand, Cambodia, and Vietnam. It is a lifeline supporting 65 million people.

By the end of December 2020, the Chinese Communist Party (CCP) had built 12 giant dams on the main branch of the Lancang River, with eight more under construction. In addition, there are 85 dams on hundreds of tributaries to the Lancang River.

On January 1, 2019, China put four newly-constructed dams into operation. As a result, the Lower Mekong has experienced a severe drought starting that year and lasting for more than four years (through the present).

The year 2020 was the driest year for the Mekong on record. Although upstream Chinese reservoirs had sufficient water during the rainy season, some of the Mekong River beds downstream were dry and cracked.

China’s use of dams to exert pressure on downstream countries has been going on since at least 2016. In March of that year, the Mekong River’s water volume was reduced, and Vietnam’s rice region suffered a severe drought, with seawater back filling the river bed. The CCP then took the “generous” step of releasing water for “disaster relief.” A week later, China’s then-Premier Li Keqiang hosted the Lancang-Mekong Cooperation Meeting in Sanya, Hainan. The five thirsty downstream countries signed the Lancang-Mekong Agreement, signing on to Chinese investment, loans, and a special fund to promote China’s Belt Road Initiative in Southeast Asia.

Source: Epoch Times, August 10, 2023
https://www.epochtimes.com/gb/23/8/10/n14051766.htm

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