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Lianhe Zaobao: China Had to Buy U.S. Pork to Fight Swine Fever

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that China has been importing a massive amount of U.S. pork although China is charging punishing tariffs on pork originated from the United States. Highly infectious swine plague is sweeping across China, putting heavy damage on the pork market and industry in China. According to data from the U.S. Department of Agriculture, very recently, Chinese entities placed the largest order for U.S. pork since the beginning of the trade war. The active purchasing moves gave the observers the impression that the Chinese pork market is seeing a significant shortage. This may actually ease the tension between China and the U.S. that the trade war introduced. China is currently charging a 62 percent tariff against U.S. pork. For the week of November 22, purchases of 9,384 tons of 2019 U.S. pork originated from China. This represents a 72 percent share of all U.S. pork export deals during that week. U.S. pork futures increased by four percent.

Source: Lianhe Zaobao, November 30, 2018
https://www.zaobao.com.sg/realtime/china/story20181130-912069

Xinhua: Real Estate Developers Financed over 100 Billion Yuan in November

As real estate sales have gradually slowed down, China’s real estate developers have been faced with an increased demand for financing due to people’s heavy upfront investments, interest payments, and the slow return of cash flow. Since the government loosened up the financing policy, there has been an increase in real estate financing activities. According to statistics from the Central Plains Real Estate Research Center, in November (as of November 28), a number of real estate companies across the country were approved for large-scale financing with the total financing amount exceeding 100 billion yuan (US$14 billion). Meanwhile the defaults on debt payments this year has hit a record high. In November, 150 billion yuan in debt was due, which was the second largest amount in 2018. It is expected that the debt repayment will be even larger in December.

Source: Xinhua, November 30, 2018
http://www.xinhuanet.com/house/2018-11-30/c_1123787448.htm

A Tough Job Market for Chinese College Graduates

According to Chinese media, the coming winter is also a winter for the job market in mainland China. Second-tier cities and small and medium-sized enterprises are the places seeing the most cuts in new job opportunities.

Phoenix reported at the end of October that China’s Huawei issued internal documents indicating that the company would halt generic job hiring, except for talent in critical areas and special recruitment of professionals with excellent work experience. Subsequently, tech giants such as Alibaba, Baidu, Tencent, and JD.com were also rumored to have suspended or reduced recruitment of fresh graduates.

More than 8.2 million college students are graduating in China, a new historic record.

Both seasonal factors and economic factors are behind the tough job market. Sectors such as trade, furniture and home appliances, and construction engineering have fewer job openings than expected.

Small and medium-sized enterprises and private enterprises with less than 500 employees are the main entities responsible for the reduction in the number of job postings. Weaker demand, lower economic growth, and an increase in financing costs have aggravated the operational difficulties of these companies.

The profitability of large companies is also trending downward. According to the National Bureau of Statistics, the annual growth rate of total profits of large enterprises in October was only 3.6 percent; it is the fourth consecutive month of decline.

Source: Central News Agency, November 27, 2018
https://www.cna.com.tw/news/acn/201811270173.aspx

Study Links Working Conditions and Employee Suicide in Electronics Sector in China

On November 14, Hong Kong based Economic Rights Institute and Dutch NGO Electronics Watch released a report titled “The Link Between Employment Conditions and Suicide: A Study of the Electronics Sector in China.”

Using original Internet suicide reports, on-site surveys and off-site interviews, the study adopted three methodologies to “show how the employment conditions of some electronics firms in China heighten the risk of employee suicide.”

The report lists the main reasons for suicide, including using the suicide as a form of protest, hostile work environment, pressure from their superiors, withheld income, denied permission to resign or time off, and the fear of losing their jobs. It also pointed to the roles of employers and Chinese government in censoring and minimizing public reports of suicides.

The report suggests the need to:

“End ‘soft’ forms of forced labour, including forced overtime and restrictions of workers’ right to resign from their jobs without forfeiting their wages.

Abolish punitive forms of discipline and intervene effectively to prevent hostility and violence in the workplace.

Empower workers to collectively influence enterprise decisions connected to conditions that heighten risk of employee suicide, including productivity requirements, overtime and the structure of incentives.”

(This briefing serves as a correction of an earlier Chinascope briefing “Survey Shows High Suicide Rate in China’s Electronics Industry” at http://chinascope.org/archives/16748. The earlier briefing, sourced from Radio France International, did not support the statement that “the results showed that the suicide rate is extremely high among Chinese workers in the high-tech electronics industry.” The study also did not discuss a lack of unions or of independent unions as a cause of the suicides.)

Source: Electronics Watch, November 14, 2018
http://electronicswatch.org/en/links-between-working-conditions-and-employee-suicide-study-of-the-electronics-sector-in-china_2550232

People’s University Report: Real Estate Has Sucked Chinese Families Dry

Well-known Chinese news site Sina recently reported that the high-ranking Chinese university, People’s University, just released its Report on the Chinese Macro economy for 2018 to 2019. The Report showed that Chinese consumers suffered a major increase in debt over the past year mainly due to their investments in the housing market. For the vast majority of the middle class and mid to lower class, their wealth has been locked into the real estate that they acquired and they have almost emptied their savings. This consequently triggered a significant reduction on regular consumer spending. The Report also concluded that, before the year 2015, most of the spending in the housing market was sourced from the mid-upper class. Now the primary housing buyers are in the lower income category. As of September, Chinese residents’ savings saw a year-over-year decline of 6.7 percent, and a two-year decline of 12.6 percent.

Source: Sina, November 24, 2018
https://finance.sina.com.cn/meeting/2018-11-24/doc-ihpevhck4429400.shtml

EBC: Apple Supply Chain Leaving Mainland China in a Large Wave

Major Taiwanese news media EBC recently reported that primary Apple Taiwanese suppliers, namely the “Seven Indicator Manufacturers” – Pegatron, Compal, Wistron, Flexium, Unimicron, Merry, and Catcher – are all lowering their ratio of dependency on Mainland Chinese factories. The manufacturing power is shifting to Southeast Asia. The key suppliers are currently working on overcoming a lack of skilled labor, establishing new factory locations, and coordinating with upstream material suppliers. For years these companies have been suffering from the Mainland’s labor shortage, from increasing labor costs, and from tougher environmental protection regulations. Now the US-China trade war has added significant weight to their decision making. The “Seven Indicators” cover a wide range of Apple product manufacturing components. Experts see the fact that all seven are moving out of the Mainland at the same time as a “historic move.” There have been many challenges in moving manufacturing out of China to foreign countries. The primary issue is that China has a massive talent pool full of hard-working people.

Source: EBC, November 11, 2018
https://bit.ly/2TrGZaO