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The New Social Currency in China’s Financial Industry: Guandan + Maotai

The Chinese card game “Guandan” has rapidly gained popularity nationwide since last year, posing a threat to golf and Texas Hold’em poker as the new “social currency” of China’s financial industry. Such scenes have emerged as financial securities firms giving “Guandan gift boxes” to clients, fund companies organizing Guandan tournaments, private equity and venture capital firms studying Guandan books and skill guides, and industry leaders playing Guandan games at gatherings.

In the past, China’s financial industry was closely intertwined with the US dollar, and social activities largely revolved around western activities such as golf or playing Texas Hold’em poker and drinking red wine. Nowadays, however, foreign sources of funding have largely dried up, and availability of domestic private capital is decreasing too. Financial professionals in China are therefore forced to turn to the government for funding. Since Chinese government officials enjoy playing the game “Guandan,” mastering this game has become critical for Chinese financial professionals.

With the industry drifting towards a “Guandan + Maotai liquor” model, Shanghai has even established a Guandan Sports Association. Originating from Huai’an, Jiangsu Province, “Guandan” is a four-player card game played with two decks of cards, where players form teams of two and must use higher-ranking card combinations to suppress opponents, with the winner being the first to deplete their hand of cards, followed by scoring and ranking up.

Source: Epoch Times, January 29, 2024
https://www.epochtimes.com/gb/24/1/29/n14168608.htm

Nikkei Shimbun: China’s 2023 GDP Growth Was Actually Negative

Japan’s Nikkei Shimbun ran an article saying that China’s 2023 GDP numbers reported by the communist regime are likely fake. Given suspicions of data tampering by both local and central party apparatuses in China, Nikkei Shimbun put together a rough alternative estimate using three data points that have a significant impact on GDP: real estate investment, net exports, and household consumption.

  • Real estate investment accounts for about 10 percent of GDP. Adding in Chinese consumer spending on electrical products, the sum accounts for about 30 percent of GDP. In 2023, China’s real estate investment decreased by 16.7 percent compared to 2022, which could lead to a decrease of 5 percent in GDP.
  • China’s net exports (i.e. the difference between imports and exports) historically accounts for about 3 percent of China’s GDP. However, from January to November 2023, net exports decreased by 32.3 percent compared to the same period in 2022, resulting in an estimated reduction in 2023 GDP of about 1 percent.
  • Chinese officials have not publicly disclosed household consumption data, which accounts for about 40 percent of China’s GDP. Nikkei estimated this data using total retail sales to consumers, a figure which increased by 7.2 percent in 2023 compared to 2022, impacting GDP positively by about 2.8 percent.

Adding these three numbers together, the resulting estimated true change in GDP is negative 3.2 percent. Even accounting for the impact of inflation, the change in GDP should be at least negative 2 percent, significantly below the positive 5.2 percent change in GDP published by the Chinese government.

The Nikkei report urged Japanese investors in China to withdraw their funds as soon as possible.

Source: New Talk (Taiwan), January 31, 2024
https://newtalk.tw/news/view/2024-01-31/907283

Xinhua: US Defense Companies Profit from Israel-Hamas War

Chinese state news outlet Xinhua published an article about how U.S. defense companies have benefited from the Israel-Hamas War.

“As of January 30th, Israel’s military operations in the Gaza Strip have resulted in over 26,700 deaths and more than 65,000 injuries on the Palestinian side. Additionally, around 1.9 million people have been displaced, accounting for approximately 85 percent of the total population in Gaza.

“On the other side of the world, major U.S. defense contractors released outstanding financial reports for the fourth quarter and the full year of 2023. Raytheon Technologies reported sales of nearly $20 billion in the fourth quarter, with a 10 percent increase from the same period last year. Lockheed Martin also performed exceptionally well, with net sales in the fourth quarter of 2023 far exceeding market expectations, reaching $18.9 billion, an increase of $2 billion from the previous quarter. Moreover, Lockheed Martin, Raytheon, and General Dynamics all indicate record levels of unfilled orders, suggesting strong growth potential in the near future.

“According to data from the US State Department, the amount of military equipment sold by the United States overseas increased by 16 percent in the 2023 fiscal year, reaching a record $238 billion.

“Behind this stark contrast lies the blood-stained profit chain of the U.S. military-industrial complex: defense contractors funding congressional members to achieve personal political goals; lawmakers approving massive military spending to reciprocate and profit; high-ranking officials at the Department of Defense providing a steady stream of arms contracts, profiting through the revolving door between politics and business. Research data shows that over the past decade, 55% of US military spending has ultimately flowed to defense contractors. A US think tank revealed that in 2022, US taxpayers paid an average of $1,087 per person for Pentagon contractors, while the average per capita tax expenditure for U.S. basic education was only $270.”

Source: Xinhua, February 1, 2024
https://app.xinhuanet.com/news/article.html?articleId=cc059649d832d8b766aad7d1bb90d631

Israel Changed from Pro-China to Anti-China During the Israel-Hamas War

Israel had a good relationship with Beijing for the past several decades. It provided many advanced technologies to China, and it seldom criticized the Chinese Communist Party (CCP) for its human rights crimes. For example, Israel provided China with military drone technology and air-to-air missiles. It also shared its fighter jet IAI Lavi with China, leading to the development of China’s own J-10 fighter jet.

However, Beijing decided to take a pro-Hamas position in the Israel-Hamas War, keeping to its anti-U.S. ideology. In doing so, Beijing alienated Israel.

On January 23, when the United Nations reviewed China’s human rights record, Israel’s representative stated that the Israeli government is watching developments in Xinjiang and is monitoring the Uyghur human rights situation there. The representative called for China to take measures to improve its human rights record.

Xinhua followed up by publishing an article to counter Israel, saying that “calling attention to China’s human rights record is ridiculous and a ‘double-standard'” since Israel has been killing civilians and creating a humanitarian disaster in the Gaza Strip.

Source: Epoch Times, February 2, 2024
https://www.epochtimes.com/gb/24/2/1/n14171594.htm

Chinese Stock Investors Vent Frustration in Comments on US Embassy Weibo Posts

The Chinese stock market has been continuously declining since mid-2023, reaching new lows as the Shanghai Composite Index fell below 2,700 points on February 2nd. Many investors who suffered heavy losses flooded the comments section on the official Weibo account of the U.S. Embassy in China, venting their frustration or imploring the United States to take over the Chinese stock market. (Weibo is a Chinese social media platform)

A large number of pleas from Chinese stock investors flooded a U.S. Embassy post titled “Science and Technology Help Researchers Protect Giraffes by Increasing Awareness”:

  • “Do you want to protect me? Giraffes are life forms, but so am I.”
  • “Anyway, (the Chinese officials) eventually will take our money (from the stock market) away and immigrate to your country. How about we give you the money directly? Otherwise they will charge us processing fee (in addition).”
  • “We know they are lying, and they know they are lying. They know we know they are lying, and we know they know we know they are lying. But they still keep lying. Can you tell me which ‘glorious era’ this description refers to?”

On the same day, a post by the U.S. embassy titled “Joint Statement on the Third Anniversary of the Military Coup in Myanmar” was flooded with messages from Chinese stock investors asking for help from the U.S.:

  • “America, please come and rescue the hundreds of millions of A-share investors in deep trouble.”
  • “Save the poor Chinese stock investors. I love America.”
  • “I beg the United States to save A-shares.”
  • “America, the Earth needs you! It desperately needs you! God bless America.”
  • “Whoever treats us well, we will love them.”
  • “I love the United States of America.”
  • “The official media doesn’t let us speak. I come here to request rescue.”
  • “Before trading stocks, I was very patriotic.”
  • “Trading stocks has brought hatred to our country. It’s also tragic.”
  • “Get rid of the China Securities Regulatory Commission!”

Source: Epoch Times, February 3, 2024
https://www.epochtimes.com/gb/24/2/3/n14172430.htm

Xinhua: China Unveils “Thousand Groups Going Abroad” Initiative, Aiming to Boost Overseas Trade

As China’s exports continue to decline, the China Council for the Promotion of International Trade (CCPIT) announced a new initiative this year called “Thousand Groups Going Abroad.” The plan is to organize over 1,000 batches of business delegations to participate in overseas exhibitions, inspections, and negotiations, aiming to secure export orders and expand China’s overseas markets. The initiative will target China’s key export markets such as the Europe Union, the U.S., Japan, South Korea, ASEAN, and Latin America.

China organized approximately 900 overseas exhibitions in 2023.

Source: Xinhua, January 15, 2024
https://app.xinhuanet.com/news/article.html?articleId=a2b554b08f23afaff0f499798e1b9f74

RMB Takes Top Spot on Moscow Currency Exchange for 2023

According to reports from Russian media, in 2023, the trading volume of the Chinese yuan (RMB) on the Moscow Exchange exceeded that of the US dollar, accounting for 42 percent of the total foreign exchange trading volume.

The yuan’s trading volume reached 34.15 trillion rubles, three times the previous year’s volume of 10.25 trillion rubles. The trading volume of the US dollar was about 32.49 trillion rubles, constituting less than 40 percent of the exchange’s total trading volume. The trading volume of the euro was 14.6 trillion rubles, accounting for less than 18 percent and ranking third on the exchange. In 2022, the combined trading share of the US dollar and the euro on the Moscow Exchange was 87%.

Starting on December 4, 2023, the Moscow Exchange introduced three new tools for trading the Chinese yuan against the ruble, aiming to enhance the convenience of market participants in currency exchange transactions and reduce trading risks.

Source: People’s Daily, January 20, 2024
http://world.people.com.cn/n1/2024/0120/c1002-40163076.html

Economist: Pensions of China’s Rural Elderly Only a Few Dozen Dollar Per Month

On January 8, 2024, Lu Ting, Chief Economist of Nomura Securities in China, spoke at the 46th Tsinghua University Forum on China and the World Economy. According to Lu, China’s 170 million rural-area retired pensioners over age 60 receive an average monthly pension of only a little over 100 Yuan (US$14), with the majority not receiving more than 300 Yuan (US $41) per month. Lu mentioned that there is a vast disparity between the pensions of this group and those of retired department-level cadres, some of whom receive 70 to 100 times as much in their pensions.

Source: Epoch Times, January 11, 2023
https://www.epochtimes.com/gb/24/1/11/n14155803.htm