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China’s Efforts to Silence Unfavorable Financial News

Le Monde, a French newspaper reported that China has been trying to hide any bad news about its financial data from the world. China’s central bank, People’s Bank of China, established a Chinese credit rating company, Dagong Global Credit Rating Co, Ltd in 1994, to “serve” both the domestic market and the world. In 2013, Dagong merged with Russia’s credit rating company RusRating and a small U.S. rating company Egan-Jones Ratings, to form Universal Credit Rating Group (UCRG) (世界信用評級集團). To build its reputation, UCRG hired former French Prime Minister de Villepin to chair its advisory board and former Australian Prime Minister Kevin Rudd to serve on its advisory board.

In 2010, UCRG was banned from practicing in the U.S. because it refused to comply with the transparency rules of the U.S. Security Exchange Commission (SEC). The European Securities and Markets Authority (ESMA), however, gave Dagong a green light in 2013. Part of the reason was that in the wake of the Greek debt crisis, the E.U. was happy to see a Chinese competitor enter the credit rating market which the British and American agencies dominated.

People soon saw that Dagong served as a strategic pawn for China to enter the European market. In 2018, Dagong was fined in China for corruption and collusion with the evaluated companies. In April 2019, the state power (the communist regime) directly took over the management of Dagong. The ESMA waited another seven months to exclude Dagong from the European market.

Beijing then adopted a new strategy. That is, to publish laws to control what information it feeds to the world. It introduced a data security and protection law in 2021, restricting the freedom of multinational companies to transfer information with their Chinese subsidiaries. It introduced and implemented cross-border data transfer regulations in 2022 to make it impossible for users to access Chinese corporate information databases, such as Tianyancha (天眼查), from abroad. Its new counter-espionage law, which will take effect on July 1, makes it possible to criminalize any exchange of information with foreigners and foreign organizations and companies.

Source: Radio France International, June 20, 2023
https://rfi.my/9dhS

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

Worker Strikes Have Increased in China

China Labor Bulletin, a non-government organization based in Hong Kong, reported that it has counted 140 worker strikes in China from January to May, the highest number in the past seven years. One cause was that companies, struggling with reduced orders for their products, have been unable to pay workers’ salaries or their severance pay when laying people off. Many of the strikes have taken place in China’s manufacturing centers in Guangzhou, Shanghai, Jiangsu, and Zhejiang provinces.

Source: Liberty Times, June 15, 2023
https://ec.ltn.com.tw/article/breakingnews/4334834

Briefings | | |   @CS Economy/Resources Social Stability

China’s Mortgage Crisis Paralyzes Construction as Majority of Unfinished Buildings Remain Unfinished

It has been a year since the wave of unfinished construction projects hit China. Most affected developments have remained unable to resume work or meet delivery dates. Both citizens and banks have lost confidence in developers’ ability to address the issue. The Chinese government has not disclosed the nationwide count of unfinished projects. A survey revealed completion rates of about 56 percent in South China and 40 percent in North China, while Southwest and Central China had rates of only 15 percent and 16 percent, respectively. Henan Province had the lowest rate at 11 percent.

Xu Shirong, a professor at Taiwan’s National Chengchi University sees the unfinished building crisis as a political problem. Local influential figures engage in real estate transactions and development, attracting funds from banks under the influence of local governments. Xu believes relief measures have been aimed at reducing losses for upper-class developers who have influence on public policy.

The crisis emerged in 2019 due to increased government regulations leading to liquidity problems for real estate companies. Homeowners stopped making mortgage payments, triggering a financial crisis. Relief funds were introduced, but developers faced challenges in obtaining them, particularly when some were asked to repay loans. Only a few developers secured financing support from the “16 Financial Measures” policies.

The allocated relief funds of 400 billion RMB ($62 billion) are considered inadequate to address the crisis. Real estate prices have dropped significantly, and banks face risks when holding collateral. The motivation to buy houses has decreased due to factors such as the U.S.-China tech war and the pandemic’s impact on the economy. Commercial properties are difficult to rent out, affecting the sale of residential properties.

Developers’ promotions have not yielded expected results and people lack confidence in unfinished buildings due to their poor quality and a lack of confidence in real estate market policies. Local governments rely on real estate for their economies, and unresolved unfinished projects could burden their finances and create imbalances in urban development.

Source: Voice of America, June 20, 2023
https://www.voachinese.com/a/majority-of-china-s-stalled-residential-projects-yet-to-resume-20230620/7144861.html

Briefings | | |   @CS Economy/Resources

China’s Police Shared Experiences on Conducting Operations Overseas

Recently overseas media reported that Chinese police from Qingtian County, Zhejiang Province published their “successful” experiences in conducting operations in other countries. The article was published in the second issue of the Zhejiang Police College Publication in 2019.

There are 330,000 Chinese from Qingtian County who live in 128 foreign countries and regions. These diasporas have established 314 diasporas associations.

The police experience article talked about their work of combining “one concept, two overall plannings, three collaborations, four major mechanisms, and five areas of governance.”

“Two overall plannings” included the planning for domestic and overseas,words, two battlefields. Domestic planning – visit the relatives (inside China) of the overseas “stability maintenance” targets (usually the political activists/dissidents whom the Chinese Communist Party (CCP) views as a threat to its rule in China). Overseas planning – send working groups abroad to meet with the Chinese diasporas.

“Three collaborations”: One is to collaborate with Chinese embassies and consulates and  them to reach out to local Chinese diaspora groups. Two is to collaborate with the leaders of diaspora associations – Qingtian police has established regular collaborative mechanism with 230 Chinese diaspora associations and maintained regular contacts with 150 influential diaspora leaders. Three is to collaborate with the people who were the former police officers or relatives of former police officers.

The article also talked about strengthening the party’s leadership, including expanding the party organization’s reach to the overseas Chinese diaspora associations and establishing a party structure inside the Chinese diaspora associations via the party organs at China’s embassies and consulates.

The Qingtian police created a “Police-Diaspora Station” service center. Its online system started operation in 2018. The Qingtian police led the efforts, with Chinese diaspora associations participating in and providing offices. The service center has organized video conferences, information sharing sessions, regular meetings, and timely service. It created 15 sub-centers in 11 countries including Spain, Italy, and France.

The “four major mechanisms” includes establishing a “grid-management” mechanism, with larger diaspora associations as the base, and diaspora leaders, diasporas who are party members, and overseas police liaisons as the expanding points, to manage the diaspora communities. It has “successfully” handled 15 cases of a few diasporas’ protests against the CCP or its leader’s visit.

The “five areas of governance” listed anti-Falun Gong as its first area. It quoted that Qingtian police guided the “World Chinese Diaspora Anti-Cult Association in Spain” to protest the Shen Yun performance held in Barcelona in 2014.

Source: Epoch Times, May 25, 2023
http://cn.epochtimes.com/gb/23/5/25/n14003947.htm

Briefings | | |   @CS Geo-Strategic Trend Government/Politics US-China Relations

China’s New Cognitive War against Taiwan

Epoch Times reported that Beijing has adopted new cognitive warfare tactics against Taiwan. In the past it used to directly or indirectly buy Taiwan’s major media including newspaper, television, and radios to spread its message. Now, however, it has switched to using Internet media, such as TikTok, YouTube, and influential webcast hosts.

One tactic is to release fake news via its controlled Taiwanese media, causing other Taiwanese media who want to keep up on news reporting but do not verify the validity of news to follow up on the fake topic. China has established a “Public Opinion Control Center” inside its military and has a 2 million strong “Internet army” (people who monitor the Internet posting and post propaganda or fake news on the Internet). This can stir up issues or debates in Taiwan media that can lead to conflicts and divisions among the Taiwanese people.

Beijing also provides scripts to people who have their own (news or other topic) channels on the Internet. Those people will replace those words commonly used in the mainland but which are uncommon in Taiwan with those commonly used in Taiwan, to make it appear to have been “created in Taiwan.”

For webcasts, China’s “Public Opinion Control Center” can arrange a mass Chinese “Internet Army” (say 100,000 people) to listen to a Taiwanese webcaster and each to pay the webcaster a small amount of money to influence the webasterc. Collectively however, the webcaster receives a large amount of money and it is hard to trace the money source.

Source: Epoch Times, June 7, 2023
https://www.epochtimes.com/gb/23/6/7/n14011845.htm

Reports | | |   @CS Defense/Military Geo-Strategic Trend

Chinese Citizen Estimates 54 Million Jobless Chinese Aged 24 to 40

A Chinese article (written by an individual) estimated that there are 54 million unemployed youth (aged 24 to 40) in China. The article’s main points were:

  • From 2020 to 2023, the gaps between the number of new jobs (for graduates) and the number of graduating students were -2.49 million, -2.20 million, -4.49 million, and -5.82 million, respectively. Thus there should be a total over 15 million graduated students without jobs.
  • About 10 percent of Chinese companies were dissolved in 2022. This means roughly 10 percent of previously-employed workers became unemployed. There should be about 25 million jobless youths as a result.
  • Due to the COVID pandemic, about 14 million young migrant workers lost their jobs within cities.

People aged 24 to 40 account for about 22 percent of China’s population. Using the Chinese government’s population estimate of 1.4 billion, the 24-40 age group should have about 308 million people, resulting in an unemployment rate of 17.5 percent.

Source: Cyzone.cn website
https://m.cyzone.cn/article/728631

Briefings | | |   @CS Economy/Resources

South Korean Scholar: Chinese Foreign Ministry Official Tells South Korea “Who Is the Boss”

Liu Jinsong (刘劲松), China’s Director-General of the Department of Asian Affairs within the Ministry of Foreign Affairs, visited Seoul in late May. China’s state media only reported that Liu conveyed China’s “stern” position to Korea and did not go into the details of the visit. Choo Jae-woo, a professor at Kyung Hee University in South Korea, wrote to The Korea Times that Liu enumerated “Four Not-allowed” positions to demonstrate to South Korea “who is the boss.” China’s “Four Not-Allowed” positions are:

  1. China will not cooperate with South Korea if it infringes on China’s core interests (e.g., the Taiwan issue);
  2. China will not cooperate with South Korea if it moves toward a pro-U.S. and pro-Japan foreign policy;
  3. China will not engage in high-level exchanges (e.g., Xi Jinping’s state visit to South Korea) if relations between the two countries remain tense; and
  4. South Korea will not be able to play a leading role on the North Korea issue if the situation deteriorates.

Mao Ning, China’s Foreign Affairs Ministry Spokesperson, responded to a question on Liu’s visit at a press conference: “Regarding the current difficulties and challenges in Sino-South Korean relations, responsibility [for the difficulties] does not lie on China’s side. In the recent dialogue, China has expressed its stern position on its core issues to the Korean side. The Korean side should understand the problems in depth and treat them carefully, walk in the same direction that China takes, and put in positive efforts to enhance Sino-South Korean relations.”

Sources:
1. Sina, May 31, 2023
https://news.sina.cn/2023-05-31/detail-imyvscth0982061.d.html?cre=tianyi&mod=wpage&loc=12&r=0&rfunc=78&tj=cxvideo_wpage&tr=214&wm=6090
2. Epoch Times, June 6, 2023
https://cn.epochtimes.com/gb/23/6/5/n14010574.htm

Briefings | | |   @CS Geo-Strategic Trend