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Public Opinion: The Six Huge Costs of the Three-Year Zero-COVID Policy

Lao Man (老蛮), an individual commentator in China, known for his writing on China’s economy, posted an article to list six prices that China paid for adopting the “zero-COVID” policy for the past three years:

  1. The fiscal deficit increased by 60 percent in those three years.
  2. The collapse of municipal investment companies (these companies are set up by local governments as a vehicle to raise money to finance government spending, usually using land which the government owns as collateral).
  3. The collapse of the government’s credibility.
  4. The collapse of the birth rate.
  5. The withdrawal (departing from China) of foreign companies.
  6. The general public’s decision not to take out loans to finance their purchases after they lost hope in the future.

Source: China News Digest, May 8, 2023
http://hx.cnd.org/2023/05/08/老蛮：清零三年的六个巨大代价/

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Renting a “Girlfriend”

China’s one-child policy has now generated a new industry – “The girlfriend” rental business. Chinese tradition is that a son (but not a daughter) will carry on the family heritage. When the Chinese Communist Party (CCP) forced people to have only one child, some families chose to abort the pregnancy if the baby was a girl. China’s seventh census in 2020 showed that the male to female ratio in China was 105 to 100 and there were 35.9 million more males than females.

As a result, many young men cannot find girlfriends. Of course, there are reasons such as work pressure and so on other than the population parity. A new business started that when a young man goes home for Chinse New Year or other occasion, he hires a woman to go together with him and act as his girlfriend to quiet down his parents’ pressure on him to find a girlfriend.

An article reported that in the year 2022, a woman lending herself out as a “girlfriend” charged 1,000 yuan per day for her services (the price could go to 2,500 yuan per day during holidays) and she made 40,000 yuan (US$ 6,000) from this business.

Source: Guancha, March 17, 2023
https://www.guancha.cn/politics/2023_03_17_684476.shtml

Hot Topics | | |   Economy/Resources

People’s Lives: Self-Employed Chinese Are Quitting the Social Security Program

Facing a big shortage in the government’s medical insurance system (partly due to COVID spending and partly due to corruption), many local governments have adjusted the medical insurance funds: The first adjustment was to cut the monthly payments to individual healthcare accounts for those who are company employees. The second was to cancel the monthly payment to self-employed people.

This triggered the public’s concern about the government’s changing its policy at will.

As a result, many self-employed people recently decided to quit their participation in the government’s social security program. The reasons: One, they cannot afford the monthly contribution of 1,492 yuan, while many of them have a monthly income of only three or four thousand yuan. Two, the government keeps adjusting the benefit payout plan. Some local governments extended the minimum contribution period from 15 years to 25 or 30 years, and there is a rumor that the government may defer the retirement age to 65. This means the participants will have many more years to contribute but fewer years to receive benefits. On a simple calculation without adjusting for inflation, paying 1,492 yuan per month for 20 years will end up contributing 358,000 yuan in total. If the retiree starts to receive a social security payment of 2,000 yuan per month at age 65, he needs to live to age 80 to break even, but the average age for Chinese is only 77. Thus many people may end up receiving less than what they contributed. Therefore, they would rather keep the money in their own account instead of putting it in the government’s account.

According to the National Labor Union’s statistics, in the year 2021, China had over 200 million self-employed people. Only 48.6 million, or 24 percent, participated in the social security program.

Sources:
1. 51.ca website, February 21, 2023
https://info.51.ca/articles/1186931
2. Radio Free Asia, February 21, 2023
https://www.rfa.org/mandarin/yataibaodao/shehui/gt2-02212023020155.html

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Public Opinion: Why Can’t People Who Work Hard Have a Better Life?

Recently, an Internet posting triggered Chinese people to discuss whether work can lead to prosperity. Quite a number of people doubted it. This could be a sign that more people may choose Tang Ping (Lying Flat or Relaxing) in their lives.

An Internet video by two college graduates, one from a worker’s family and one from a farmer’s family, talked about the fact that, after working for five years, they were not able to save any money at all. Both of them had graduated from decent universities in China, Central China Normal University, Wuhan, and the Hubei Province and Communication University of China. One changed 12 jobs in five years and saved less than 5,000 yuan (US$720). One works as a cleaner in a restaurant. Both of them showed a positive attitude while facing a harsh life.

Many comments said that it was true that these days many college graduates can not find decent jobs and thus have struggled to make ends meet.

In another incident, the People’s Daily website published an article, “Do It Diligently and Life Will Become Sweeter and Sweeter.” However, many people questioned whether working hard will really get people a good life. One author used her own family’s example to explain. She said that everyone in her entire family, from her grandparents to her parents-in-law and then to her husband, all were extremely hardworking but they didn’t save much money, not to mention having a better life.

Sources:
1. China Digital Times, February 14, 2023
https://chinadigitaltimes.net/chinese/692967.html
2. Zhihu, February 16, 2023
https://zhuanlan.zhihu.com/p/607066570

Hot Topics | | |   Economy/Resources

Public Opinion: How Can a County Executive’s Family Pay a 10M Yuan Ransom?

Some hot news spread on the Internet on February 10. It was about the ransom of a former county Communist Party Secretary (the highest-ranked official in the county). Huang Dongming,the  former Teng County Party Secretary of the Guangxi Zhuang Autonomous Region, was kidnapped. The kidnappers asked for 30 million yuan (US$4.31 million) in ransom. Huang’s family paid 10 million yuan, but the kidnappers refused to release Huang. Then the family reported the kidnapping to the police who were able to rescue the hostage.

The public focus was on how Huang’s family could afford to pay 10 million yuan. Teng county is a very poor county in China and, on the surface, the officials’ salary is not high at all. Many commentators took it as indication that, in the past, Huang had collected a large amount of illegal money.

Also, several Chinese media reported on February 7 that Zhang Enliang, the former Hegang City Party Secretary in Heilongjiang Province, was accused of taking a bribe of 73 million yuan.

Official corruption is a severe problem in China that the authorities are unable to fix.

Source: Radio Free Asia, February 10, 2023
https://www.rfa.org/mandarin/Xinwen/5-02102023122403.html

Hot Topics | | |   @CS Government/Politics Social Stability

Chinese Scholar: China’s Academia Is Full of Fake and Low Quality Publications

Recently, a report by Li Bozhong (李伯重), published on China’s Tribune of Social Science in 2005, was spread on the Internet. Li discussed his view that despite the fact that Chinese scholars have been publishing many academic papers, most are fake or of low quality.

Li is a famous Chinese economist, a researcher at the Chinese Academy of Social Sciences, and also a professor at Tsinghua University, Peking University, and Hong Kong University of Science and Technology.

In Li’s view, Chinese researchers have ignored both theoretical and foundational research in the academic fields and have focused only on the practical areas of the hot applications of technologies. This is due to the Chinese people’s focus on immediate short-term gain. Hot applications can result in fame and bring money in quickly while the basic research may not yield any fruit for years or decades. As a result, some foreign scholars have said that, except for the papers published by a few trusted serious Chinese scholars, they would not read any papers written by other Chinese authors.

Source: Sina, November 5, 2021
https://k.sina.com.cn/article_1250060497_4a8268d1019011jor.html#/

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Economy: China’s Internet Celebrity Making Machine Aims at Western Unemployed Young People

China has developed a mature marketing strategy to use Internet celebrities to promote products on the Internet. It is done by the Multi-Channel Networks (MCN’s), or service providers that help (and even finance) video channel owners (Tiktok, YouTube, etc.) to produce and market products for manufacturers. Now these Chinese MCN’s have put their eyes on the Western channel owners to promote Chinese products directly to the people in the U.S. and Europe.

Chinese MCN’s usually identify the channel owners who they believe have the potential to grow big but currently have only a small or mid-sized follower base. They then work with these channel owners to package them, guide them in producing videos, or even produce the videos for them. This allows the MCN’s to control the channel owners at a lower cost before they become Internet celebrities. These MCN’s sign up Chinese manufacturers to let their channel owners sell the products on their channels. Then both the channel owners and the MCNs share the proceeds with the manufacturers.

Now the Chinese MCN’s are applying their business model to the U.S. and Europe. Some Western channel owners have started to see that they make more money from their MCN work than from their regular jobs.

However, there are also cultural challenges. Chinese MCN’s found that, unlike the Chinese channel owners, the Western channel owners do not like to be told what to do. Also the Western channel owners are more willing to settle for a big enough increase in their follower count instead of going ahead full-steam for a bigger target.

Source: Sina, February 9, 2023
https://t.cj.sina.com.cn/articles/view/2357213493/8c80393502001d6la

Hot Topics | | |   Economy/Resources

Economy: City Investment Corporations Cannot Pay Their Obligations

In China, many local governments have set up their own investment companies. These companies usually use the land as collateral to get loans from banks to invest or finance the construction of infrastructure projects or government-subsidized housing.

However, due to the collapse of the real estate industry in China, many of these city investment corporations are short of money and some cannot even pay their obligations.

Phoenix Finance reported that in the past year, people buying government-subsidized housing reported the delay (or even failure) of delivery of those houses. This has happened in Shenzhen City, Guangdong Province; Qingdao City, Shandong Province; Zhengzhou City, Henan Province; and Baoding City, Hebei Province.

Chengyang District, Qingdao City, Shandong Province provided an apartment subsidy to attract skilled/talented people to come to the city. On a jointly-owned housing program (government pays a portion to reduce the purchase cost for the talent they are bringing in), the talent paid 1.5 million yuan (US$220,000) but the Chengyang Municipal Investment Group did not pay the government portion of 760,000 yuan, and thus the talent could not get an apartment. (After the Phoenix Report, Chengyang Municipal Investment Group said they had gathered enough money to pay for their dues.)

People pointed out that this showed the government has run out of money. These investment companies cannot raise more money because land is no longer hot property – builders are not willing to buy land from the government (thus paying the land transfer concessions) anymore.

Since November 2021, the number of bonds issued by the city investment corporations that missed the payback on the due date has increased from five per month to around 20 per month.

An unconfirmed report said that to sell their apartments, some city investment corporations assigned quotas to their employees and tied it to their annual reviews.

Source:
1. Phoenix, February 2, 2023
https://fengcx.com/news/detail/56084949.shtml
2. Sohu, February 3, 2023
https://www.sohu.com/a/636924623_100162316
3. Sina, February 4, 2023
https://finance.sina.com.cn/stock/zqgd/2023-02-04/doc-imyemynm3699818.shtml

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