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Shanghai Police Target China’s Largest Provider of Emigration Services

The Shanghai Police have arrested Chairperson He Mei of Wailian Group (外联出国), Shanghai’s largest China-US immigration intermediary company. The arrest is part of an investigation into illegal foreign exchange transactions totaling over a billion RMB. In addition to He, four others have also been arrested.

Wailian Group has been a prominent firm in enabling emigration from China, facilitating quick approvals for various countries’ visas and residency permits.

Several people posted on the internet citing insiders, saying that the police demanded that He Mei hand over all information on clients for whom the firm has provided immigration services over the company’s several decades of operation. One tweet said that the authorities are targeting rich Chinese who have exited China but who still have a lot of property in the country. This would enable the local and national Chinese government to confiscate those valuable properties. Another social media post, seen on Chinese social media Weibo, speculated that the authorities may be aiming to collect information on emigration of lower-ranking government bureaucrats and their family members.

Source: Epoch Times, August 10, 2023.
https://www.epochtimes.com/gb/23/8/10/n14051577.htm

Briefings | | |   @CS Economy/Resources Government/Politics

LinkedIn, the Last Western Social Media Company in China, Pulls Out

LinkedIn, Microsoft’s social media platform for the workplace, withdrew from Chinese markets on August 9, officially closing the Chinese version of the LinkedIn application.

LinkedIn’s 2014 debut in China came on the heels of Google’s withdrawal from the country in 2010. Google withdrew following the company’s refusal to comply with the Chinese communist regime’s demands that Google censor the content available in China.

LinkedIn took the opposite approach of Google, opting for cooperation with the Chinese regime, implementing censorship mechanisms for the platform. LinkedIn users saw some postings on the platform (e.g. mentioning 1989 the Tiananmen Massacre) deleted by LinkedIn.

The communist regime’s control of the platform gradually became tighter and tighter. In March 2021, the New York Times reported that Chinese regulators had criticized LinkedIn’s executives for failing to control content when they discovered “sensitive” posts during China’s National People’s Congress. As punishment, China required LinkedIn to conduct a “self-assessment” and submit a report to China’s Central Internet Information Office.

LinkedIn’s latest Transparency Report, released in 2023, showed that the Chinese government made 43 requests to LinkedIn to remove content in 2021. LinkedIn complied with all of these requests except one. The number of removal requests was similar in 2020, following relatively lower numbers of requests in 2018 and 2019.

LinkedIn announced in October 2021 that it would remove several features from the Chinese version of its website, including the ability to make posts and interact with user-generated content. Without these social functions, LinkedIn became merely a resume-hosting website and saw its user base decline.

Source: Voice of America, August 8, 2023
https://www.voachinese.com/a/linkedin-becomes-the-last-western-social-platform-to-officially-leave-china-20230808/7216109.html

Briefings | | |   @CS Government/Politics Information/Technology

People’s Daily: Chinese Cars Taking Over “Southern Markets”

People’s Daily stated that cars made in China are taking over the global markets, especially the “Southern World” (non-Western countries).

According to the latest data from the China Association of Automobile Manufacturers, China’s automobile exports reached 2.14 million units in the first half of 2023. This marks a year-on-year increase of 75.7 percent in reported auto exports.

Total reported export value reached $99.97 billion, up by 41.7 percent from the previous year. Total automobile export for this year is anticipated to reach 4 million units, a significant increase from the prior two years. Reported exports were just over 2 million units in 2021 and about 3.3 million units in 2022.

Chinese automakers dominate the fast-growing electric vehicle market in Southeast Asia, contributing three-quarters of the region’s electric vehicle sales in the first quarter of this year. Chinese cars are also gaining traction in markets like the UAE, Africa, the Middle East, and Latin America due to their affordability, features, and comprehensive warranty services.

The main factor driving Chinese car exports is competitive pricing, including the market’s ability to offer more features at the same price as competitors. Chinese car companies have been setting up joint ventures for localized auto production in countries such as Thailand and Brazil.

Source: People’s Daily, August 7, 2023
http://world.people.com.cn/n1/2023/0807/c1002-40051652.html

Briefings | | |   Economy/Resources Geo-Strategic Trend

Henan Audit: 10 Billion Yuan of Questionable Spending from Disaster Relief Funds

Chinese officials have a reputation for stealing or improperly handling money. Recently, the Henan Province government published an audit report on 2022 provincial-level spending. According to the report, there were about 10 billion Yuan (US$1.4 billion) in improper spending using the relief and reconstruction funds designated following last summer’s floods in the region.

  1. Nine counties, including Qi County, spent 405 million Yuan improperly. Two counties, including Weihui County, saw at total of 31 million Yuan withdrawn from government accounts for personal use.
  2. Some 162 projects, worth about 3.13 billion Yuan, were carried out at a very slow pace. Twenty four cities and counties, including Boai County, were involved in such practices.
  3. Four cities and counties, including Hengchuan County, provided fake status updates on 22 projects totaling about 1.28 billion Yuan. Four cities and counties, including Xinmi County, reported 15 non-existent projects totaling 432 million Yuan in claimed value.
  4. Nine cities and counties, including Xinyang County, put 24 projects, worth 523 million Yuan, in use without any acceptance inspection. Seventy three counties, including Zhengyang County, were involved in projects that failed quality requirements. There were 242 such projects worth a total of 3.35 billion Yuan.
  5. Three counties, including Jun County, obtained 375 million Yuan for 3 projects that did not qualify for disaster relief funding.

Source: Hanan Provincial Audit Department website, July 28, 2023
https://sjt.henan.gov.cn/2023/07-28/2787185.html

Briefings | | |   Government/Politics

Senior Wanda Executive Arrested for Corruption

Chinese media Jiemian reported that Liu Haibo, the senior vice president of real estate giant Wanda Group, has been arrested for reasons yet to be announced. According to a Wanda insider, the main reason behind the arrest is related to internal corruption within the company, and the amount of money involved is huge. In addition to Liu Haibo, a number of others from Wanda Group have also been taken away.

Liu Haibo graduated from Beijing University of Aeronautics and Astronautics in July 1991, and he joined Wanda Group in 2010. He served in a number of senior positions, including assistant president, executive deputy general manager of the development department, general manager of the development department, regional general manager, group chief vice president, and senior vice president. He has been in charge of Wanda Group’s investment business for a long time.

The news of Liu Haibo’s arrest has sent shockwaves through the real estate industry. Wanda Group is one of the largest real estate companies in China, and its involvement in corruption is a major blow to the industry. It remains to be seen what charges will be brought and what the full extent of the corruption is, but the news is sure to have a negative impact on Wanda Group’s reputation and business prospects.

Source: Central News Agency (Taiwan), August 8, 2023
https://www.cna.com.tw/news/acn/202308080256.aspx

Briefings | | |   Economy/Resources

China Continues Campaign Against Healthcare Sector Corruption, 10 Arrested in a Week

A report from Taiwan’s Central News Agency reported that a crackdown on corruption in China’s medical industry is continuing, with at least 10 more people in the field investigated in the past week. The most recently investigated include hospital directors and CCP secretaries. This brings the total number of people investigated to at least 159 since the beginning of the crackdown.

The report cited a case in which a hospital director pocketed a 16 million yuan in kickbacks after importing a linear accelerator at an inflated price. It also described how pharmaceutical companies are trying to gain a higher market share by infiltrating hospitals through various channels, and how the expectation of large kickbacks is squeezing medical suppliers and sales agents. According to one industry insider, average kickbacks to hospital insiders is 20% to 30%, while sales staff have been squeezed, receiving only very small commissions. This situation comes about because there is typically more than one supplier to a given hospital department for the same product, and the department will choose to purchase the product from the company that offers the highest kickback.

Some pharmaceutical companies have used the pretext of sponsoring scientific research funds and academic conferences to transfer illegal benefits. The industry insider said that some high-level hospital officials drive luxury cars or fly business class when traveling. They are often invited to meetings and travel often “while ordinary people have to face the high cost of medical care.”

The report said that the current medical corruption crackdown is targeting the key links of production, supply, sales, use and reimbursement in the medical field, and pharmaceutical companies have also become a central focus of the campaign.

The National Health Commission of China and the country’s disciplinary inspection and supervision organs have held video conferences to mobilize and deploy efforts in addressing medical corruption nationwide. The meetings stressed the need to “increase the intensity of discipline and law enforcement, focus on leading cadres and key post personnel, persist in investigating bribery, concentrate forces to investigate and deal with corruption cases in the medical field, and form a ‘deterrent'”.

The crackdown on medical corruption is a major initiative by the Chinese government to improve the quality of healthcare and reduce the financial burden on patients. It is a sign that the government is serious about addressing the problem of corruption in the healthcare sector.

Source: Central News Agency (Taiwan), August 8, 2023
https://www.cna.com.tw/news/acn/202308080307.aspx

Briefings | | |   Social Stability

China’s Granary Region Suffers Severe Flooding, Food Security at Risk

The remnants of Typhoon Doksuri caused severe flooding in China’s northeastern provinces of Heilongjiang and Jilin, known as the country’s “breadbasket.” The flooding has killed at least 14 people and displaced tens of thousands more. It has also damaged or destroyed millions of hectares of crops, raising concerns about food security for China’s 1.4 billion people.

The flooding is the latest in a series of natural disasters to hit China’s agricultural sector in recent months. In May, heavy rains in Henan province caused widespread damage to wheat crops. In June, a drought in northern China took a toll on corn and soybean plantings.

The Ministry of Agriculture and Rural Development has warned that the flooding in Heilongjiang and Jilin could have a “serious impact” on China’s agricultural production. The ministry said that the flooding has damaged or destroyed about 10 million hectares of crops, and that it could take several years for the region to recover.

The flooding is also a major blow to China’s efforts to achieve self-sufficiency in food production. China is the world’s largest producer of wheat, and it is among the largest producers of corn and soybeans, but the country still needs to imports significant amounts of these crops to meet domestic demand. This year’s flooding could lead to increased food imports, which would put a strain on China’s economy.

The Chinese government said that it is taking steps to mitigate the impact of the flooding, including providing relief to those affected and investing in infrastructure to help prevent future disasters. It remains to be seen how the flooding will impact China’s food security in the long term.

Source: Voice of America, August 7, 2023
https://www.voachinese.com/a/deadly-floods-hit-china-s-major-grain-producing-region-fueling-food-security-concerns-20230807/7214602.html

Briefings | | |   Economy/Resources

EUCCC: EU Companies in China Experiencing Commitment Fatigue

Primary Taiwanese news agency Central News Agency (CNA) recently reported that Jens Eskelund, chairman of the European Union Chamber of Commerce in China (EUCCC), said that China’s efforts to revitalize the private economy are insufficient and that Chinese officials have been unwilling to seriously discuss how to solve the country’s core economic problems. He also said that EU companies in China are experiencing “commitment fatigue” and are are beginning to doubt whether the Chinese government will enact meaningful economic support policies.

Eskelund said that the EUCCC has yet to see signs that the Chinese government is willing to implement structural reforms to address the fundamental challenges facing the Chinese economy, thus preventing foreign private companies from realizing their potential to support the Chinese economy. He mentioned that the Chamber of Commerce has met with Chinese government officials many times since the Chinese government relaxed its strict Zero-Covid measures, but these officials have not been willing to seriously discuss how to solve the country’s core problems.

China’s overall economy is weak, and the manufacturing and service industries are shrinking. The Chinese government has issued multiple documents in the past month promising to revitalize the country’s private sector. Chinese officials have thus far refrained from enacting large-scale monetary and fiscal stimulus measures, however, instead using relatively modest measures to boost consumption.

Source: CNA, August 5, 2023
https://www.cna.com.tw/news/acn/202308053001.aspx

Briefings | | |   Geo-Strategic Trend