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People’s Daily: China’s Largest Corporation of Foreign Culture Performing Arts is Making Connections Abroad

People’s Daily Online interviewed Li Jinsheng, the Communist Party Secretary and Chairman of China Arts and Entertainment Group. Below are some excerpts from the interview:

“Established in 2004, China Arts and Entertainment Group originated from the China Foreign Performance Company and the China Foreign Art Exhibition Center, founded in 1957 and 1950, respectively. Over the past 70 years, especially in the nearly 20 years since its formation, China Arts and Entertainment Group has been dedicated to engaging in cultural exchanges, telling China’s stories, and spreading the country’s voice abroad.”

“As the largest and only state-owned enterprise specializing in foreign cultural exchanges, the group aligns its work with the country’s diplomatic priorities. One significant aspect is coordinating cultural activities in conjunction with major national events. Incomplete statistics show that, since 2013, the group has organized over 70 cultural performances and exhibitions in support for China’s major diplomatic activities.”

“In October 2016, under the guidance of the former Ministry of Culture, the Silk Road International Theatre Alliance was formed. As of today, the alliance has 155 member units from 45 countries and regions, including 83 overseas members and 72 domestic members. Since its establishment, the alliance has played an active role in information exchange, personnel exchanges, and collaboration in performance production among theatre members. It has fostered long-term and deepened cooperation in the field of performing arts with countries participating in the Belt and Road Initiative.”

Source: People’s Daily, November 7, 2023
http://www.people.com.cn/n1/2023/1107/c32306-40112644.html

Briefings | | |   Economy/Resources Geo-Strategic Trend

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

Briefings | | |   @CS Economy/Resources

Lianhe Zaobao: Hyundai Motor Sells Chongqing Factory at Half Price

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that South Korea’s Hyundai Motor Co.’s joint venture in China sold its factory in Chongqing for RMB 1.62 billion (around US$227.6 million), less than half the original asking price from when the factory was originally put up for sale in August of last year. Hyundai faces fierce price competition and slowing demand in China.

The factory started operations in August 2017 and is the second factory sold by Hyundai Motor in China. In addition to the recent sale, Hyundai Motor sold a Beijing-based factory in 2021. There are now three remaining Hyundai factories in China, down from five at the peak.

Hyundai said the sale was a move to optimize its business structure in China, aiming to shift focus from the volatile Chinese market to other Asian countries such as India and Indonesia. As China rapidly transitions to electric vehicles, South Korean carmakers Hyundai and Kia are facing difficulties in their China strategies. China is the world’s largest auto market. It’s worth noting that sales in the Chinese market accounted for only five percent of the two companies’ total global sales in the third quarter of 2023.

Source: Lianhe Zaobao, January 17, 2024
https://www.zaobao.com.sg/realtime/china/story20240117-1462659

Briefings | | |   Economy/Resources Geo-Strategic Trend

Mingpao: Moody’s Downgrades China’s Four Major Distressed Asset Management Firms

Mingpao, one of the primary Hong Kong newspapers, recently reported that rating agency Moody’s has just downgraded the credit ratings of the four major Chinese non-performing asset management companies.

  • Huarong’s (HKSE 2799) long-term issuer rating was downgraded by one notch to Ba1, a non-investment grade commonly known as junk level. The rating outlook for Huarong remained negative.
  • Moody’s also downgraded Oriental Asset Management by one level to Baa2.
  • Cinda (HKSE 1359) fell below A3 and was downgraded by one level to Baa1, the same rating as Huarong. The downgrade reflects continued tension in the Chinese real estate market and slowing economic growth. There is pressure on Cinda’s asset profitability, asset quality and capital position.
  • Moody’s also downgraded Great Wall Asset Management’s long-term credit rating by one notch to Baa3, just one notch above junk status. This was mainly due to Great Wall’s continued major deficiencies in corporate governance and pressure on its capital position – they delayed the release of the 2022 annual performance report.

The other two major rating agencies, S&P and Fitch, also downgraded the credit ratings of China’s four major asset management companies in September of last year and January of this year, respectively. According to the Mingpao article, there is a lack of sustainability and transparency in supporting asset management companies that have suffered large losses and capital erosion. Moody’s expects that Chinese officials will prioritize resources to support state-owned enterprises.

Source: Mingpao, January 20, 2024
http://tinyurl.com/mr23wrr5

Briefings | | |   Economy/Resources US-China Relations

Commentator: Local Government Debts Driving Chinese Market Decline

Lao Man (老蛮), a well-known Chinese Internet commentator, posted on the X platform about why China’s stock market keeps losing money:

“Local governments [in China] have been approved to issue 2.7 trillion yuan (US$ 380 billion) in bonds, and issuance of these debts is now underway. This is the fundamental reason for the continued decline in the stock market, draining over 20 billion yuan from the stock market every day.

In 2024, the most important economic factor [in China] is the local government debt. Keep an eye on it; it is the underlying factor behind all economic phenomena.”

Source: Twitter, @laomanpindao

Briefings | | |   Economy/Resources

People’s Daily on Recent Financial Cooperation Between China and Arabic Countries

CCP newspaper People’s Daily has published a list of ways that China has been cooperating with Arabic countries recently.

  • Starting on January 1, 2024, Saudi Arabia, Egypt, the United Arab Emirates (UAE), Iran, and Ethiopia officially became members of the BRICS countries, increasing the total number of BRICS member countries from 5 to 10. Abdullah, the Minister of Economy of the UAE, stated that there would be additional capital injection into the BRICS Development Bank.
  • On November 28, 2023, China People’s Bank and the UAE Central Bank renewed their Renminbi/Dirham Bilateral Currency Swap Agreement, valid for 5 years, with a swap scale of 35 billion RMB/18 billion UAE Dirhams.
  • In November 2023, the People’s Bank of China signed a bilateral currency swap agreement with the Saudi Central Bank, with a swap scale of 50 billion RMB/26 billion Saudi Riyals. The agreement is valid for 3 years and can be extended with mutual consent.
  • In October 2023, the China Export-Import Bank signed a cooperation agreement with the African Bank of Morocco. Both parties will “actively promote economic and trade exchanges and financial cooperation through project financing, parallel financing, and trade financing.”
  • The Chinese Ambassador to Saudi Arabia, Chen Weiqing, said that as of 2023 the China’s Export-Import Bank and the National Bank of Saudi Arabia have successfully implemented the first RMB loan project [to Saudi Arabia]. The Bank of China and the Industrial and Commercial Bank of China have also opened branches in Saudi Arabia.
  • The 2023 International Maritime Awards ceremony was held in Shanghai, where the COSCO Shipping Ports’ Abu Dhabi Terminal won the “Port Terminal Innovation Award.” The terminal was jointly constructed by COSCO Shipping Ports and the Abu Dhabi Ports Authority, with support from China’s Silk Road Fund. Since opening in 2018, the terminal has established direct connections with 65 ports worldwide. Its container throughput exceeded 1 million standard containers in 2022.
  • On October 30, 2023, the China Development Bank completed the full disbursement of a 7 billion RMB loan agreement with the Central Bank of Egypt.
  • On October 9, 2023, the China Export Credit Insurance Corporation issued the first medium-to-long-term insurance policy for a “new energy power” financing project, providing medium-to-long-term export buyer credit insurance support for the “Manna 2” 500 MW photovoltaic power (solar power) station project in Oman. In the same month, the performance test for Unit 4 of the Hassyan Power Station project in Dubai was successfully completed, marking the commercial operation of all 4 units at that power station. The power station was jointly financed and constructed by China’s Silk Road Fund, the Harbin Electric Group, and UAE investment institutions, representing the first investment of the Silk Road Fund in the Middle East.
  • The Industrial and Commercial Bank of China recently held a bond listing ceremony at the Nasdaq Dubai Exchange. The “green bonds” issued by the bank were simultaneously listed on stock exchanges in Hong Kong, Dubai (UAE), Singapore, and Luxembourg, with a total issuance size of approximately USD 2 billion.
  • In November 2023, Shanghai Stock Exchange signed a “memorandum of understanding for cooperation” with Dubai Financial Market. Both parties “plan to jointly explore and develop financial products related to ESG (environmental, social, and corporate governance) and sustainable development, as well as cross-border indices, exchange-traded funds (ETFs), and other financial products.”

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Briefings | | |   Economy/Resources Geo-Strategic Trend

Huang Qifan Pitches Government Buyup of Residential Housing Following Further Fall in Real Estate Prices

A video of Huang Qifan has been circulating in China, generating some heated discussion. Huang expressed his view that the Chinese government should buy up residential housing following a potential drop in real estate prices. Huang is the former mayor of Chongqing and former Vice Chairman of the Financial and Economic Committee of China’s National People’s Congress.

Recently, the Chinese government suggested splitting residential housing into two categories: Commercial Housing, which people would be allowed to buy and sell, and Government Subsidized Housing, which would be owned by the government. This latter category, ineligible for purchase or sale by the public, would be leased out by the government to people in financial need.

In the video of Huang, he stated that housing prices in China have already fallen 10 to 20 percent over the past couple of years. If prices were to fall another 30 percent this year then the total drop in price would be 40 to 50 percent down from the peak. When this happens, he said, the government could “take the opportunity” to buy up these apartments. Cities could use 5 trillion yuan (US$ 700 billion) to buy up such apartments and then lease them out as the Government Subsidized Housing. He said that housing prices would then rise back up over the subsequent five to ten years, and this would be an excellent way for the government to “save the housing market.” He argued that the government would not lose any money (it would actually make money), and it would avoid needing to spend money on building out Government Subsidized Housing.

Huang went on to argue that there is no moral problem with his proposed plan of action. In his analysis, the proposed approach has many benefits: it “solves the supply of the Government Subsidized Housing,” saves the real estate market, resolves extra housing capacity (i.e. reduces oversupply of housing), saves real estate companies and banks, and “balances social debts.”

Huang also proposed an approach for bringing down housing prices in China: by tightening the money supply and loan activity, the government could cause many house foreclosures. When the share of foreclosed housing reaches a certain proportion, housing prices in the market more broadly would fall.

An article on the Aboluo  website criticized Huang’s argument. The article reasoned that the “base housing price” from five years ago was 50 percent of recent peak in housing prices, and that the general public had benefited greatly from this rise in real estate asset prices. If the government were to let housing prices fall by 50 percent, the public (which is heavily invested in real estate) would take a big monetary loss. Following Huang’s plan, the government would then buy the housing at the base price (a 50 percent discount from peak prices) and would reap financial gains after waiting for another five years to pass, seeing their investment double in value. The Aboluo article argued that those investment gains should belong to the general public, not to the government — by following Huang’s plan, the government would not be “expanding the pie” of the housing market, but would rather be cutting the pie in half and taking half for itself.

Source: Aboluo, January 8, 2024
https://www.aboluowang.com/2024/0108/2001131.html#google_vignette

Briefings | | |   Economy/Resources Government/Politics

CNA: China Faces Overlapping Influenza A and B Epidemics

Taiwan’s Central News Agency recently reported that China is experiencing overlapping epidemics of influenza A and influenza B.

The current influenza season in China began with the H3N2 influenza A strain in October 2023. Over the past 1-3 weeks, influenza B detection rates in some regions of China have exceeded influenza A rates. According to China’s National Health Commission, influenza A cases have been slowing and influenza B cases are on the rise. Multiple provinces are now seeing more influenza B than influenza A infections, with some hospitals now finding influenza B as the cause of more than 50% of positive flu tests.

China’s current influenza B epidemic largely affects young adults in their 20s-50s rather than the elderly. The symptoms also tend to be milder compared to influenza A.

With the ongoing dual influenza outbreaks, there has been a sharp rise in demand and sales of influenza medications in China. Experts have emphasized that previous infection with influenza A does not provide full immune protection against influenza B — people remain susceptible to influenza B even if they have already had influenza A this season. High-risk groups in China have been advised to take vaccines against both the influenza A and B viruses. Authorities continue monitoring the situation as the country remains in the midst of back-to-back flu epidemics.

Source: Central News Agency (Taiwan), January 15, 2024
https://www.cna.com.tw/news/acn/202401150085.aspx

Briefings | | |   Economy/Resources