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Near One Billion Chinese Have Per-Capita Disposable Income Less Than 2,000 Yuan Per Month

The Chinese government recently released data on income distribution within the Chinese populace. One data point said that 964 million people in China have monthly income less than 2,000 Yuan (US $282). This statistic sparked hot discussion on the internet. The news followed a statement in 2020 by Li Keqiang, China’s former premier, that about 600 million Chinese people have monthly income less than 1,000 Yuan (US $141). The data were gathered by the Chinese National Development and Reform Commission’s Department of Employment, Income Distribution and Consumption as well as the China Institute of Income Distribution at Beijing Normal University.

All the major mouthpieces of the Chinese Communist Party’s (CCP) remained silent on this topic, as the data makes the CCP look bad. NetEase, a major internet portal in China, published an article to “clarify the issue,” i.e. to make the picture look less dismal. It stated that the statistic regarding 964 million people’s income did not pertain to their monthly income but rather to their per-capita monthly disposable income. Per-capita figures are averaged across a larger number of people, including those who are not active in the workforce (the actual number of working people in China is reportedly less than 900 million).

Editor’s Note: Even if the clarification published by NetEase is correct, a per-capita disposable income of less than $282 per month still means that these 964 million people, the majority of the Chinese populace, are near the poverty level struggling to make ends meet.

Source: NetEase, December 30, 2023
https://www.163.com/dy/article/IN6MM7PO0553XH85.html

Briefings | | |   @CS Economy/Resources

Supreme People’s Court Calls Out Use of Fake Lawsuits to Evade Debts

As China’s economy keeps sliding downwards, some Chinese individuals and companies have colluded with others to create fake lawsuits so that they would not have to pay back their debtors during the multi-year litigation period resulting from the lawsuits.

Recently, the Supreme People’s Court of China released information on typical criminal cases exemplifying this debt evasion practice. The highlighted instances illustrate several tactics used to cause delay in settlement of debts. Tactics include fake transfers of assets, fabricated facts hindering court-ordered execution of property, and interference in compulsory property execution.

Source: Xinhua, December 27, 2023
http://www.news.cn/legal/20231227/0ce1147ea9aa4d4c9df9d47a60b8dced/c.html

Briefings | | |   Economy/Resources

China’s Population to Shrink Dramatically: Hunan Provincial Education Bureau

An on-line document, apparently issued by Hunan Provincial Education Bureau (document number [2023] 358), indicates that China is facing a dramatic decline in population. According to the document:

  • “Preschool population is rapidly declining compared with 2021, projected to decrease 33 percent by 2025 and 54 percent by 2030.”
  • “Elementary school population will decline in 2024, is expected to decrease 46 percent by 2030 and 62 percent by 2035.”
  • “Middle school population will peak in 2024, will decline by 2030, projected to decrease 53 percent by 2035.”
  • “High school population will peak in 2027, to start declining by 2033, and will drop 24 percent by 2035.”
  • “Research on measures such as ‘transferring surplus teachers’ is required.”

There are also comments saying that the situation in Hunan (a province in central China) is still relatively good; the population crisis is more severe in Northern, Eastern, and Northeastern China.

An independent incident would seem to lend credibility to the picture painted by this document: In July 2022, data on the national population were leaked from a database at the Shanghai Police Bureau, with only 970 million people reported living in China. This suggests that China’s claimed population of 1.4 billion may be far overstated.

Source: Aboluo, December 27, 2023
https://www.aboluowang.com/2023/1227/1996120.html

Briefings | | |   Economy/Resources

Xinhua: China Exported More Cars in 2023 Than Any Other Country

Xinhua recently reported that, according to data from the China Association of Automobile Manufacturers, China’s automobile exports from January to November were 4.412 million units, a year-over-year increase of 58.4 percent. Among them, a total of 1.091 million new energy vehicles were exported, a year-over-year increase of 83.5 percent. Judging from this trend, it is basically a foregone conclusion that the scale of China’s automobile exports in 2023 will exceed the five million vehicle mark.

Japan’s Kyodo News also reported, citing the latest data, that Japan’s automobile exports from January to November this year were 3.99 million units. Although the export data for December have not yet been released, China’s automobile exports are expected to surpass Japan’s in 2023. This will be the first time that China tops the charts as the world’s number one automobile exporter.

In the past year, Chinese car makers have deeply penetrated automobile markets in Southeast Asia, the Middle East, Russia, South America, Asia and Africa, while accelerating the development of the new energy markets such as Europe and North America. For Chinese automakers, Russia offered a large market, and the exit of Japanese and Western automakers from Russia was a boon to Chinese rivals. From January to October 2023, China exported 730,000 cars to Russia, seven times more than the same period in 2022. China’s electric vehicles exports were strong and affordably-priced, one of the primary factors determining China’s top ranking in auto exports worldwide.

Sources:
(1) Xinhua, December 29, 2023
http://www.xinhuanet.com/auto/20231229/5f55c75e3f564789a6fb741e6d85c88c/c.html

(2) Tencent News, December 29, 2023
https://new.qq.com/rain/a/20231229A08X2300

Briefings | | |   Economy/Resources

CCP Central and Local Governments Both Talk About Living Under Tight Budgets

As the Chinese economy continues to show signs of fatigue, the Chinese Communist Party (CCP) Central and local organs are both talking about the need to tighten budgets.

The public communique of China’s National Financial Work Conference in Beijing on December 22 mentioned the term of “living under a tight budget” six times:

  • “adhere to the party and government offices’ living under a tight budget,”
  • “enhancing the quality and efficiency of work is to implement the living under a tight budget,”
  • “form the concept of living under a tight budget, establish a system to live under a tight budget,”
  • “rigorously implement the living under a tight budget,” and
  • “strengthen the supervision of living under a tight budget.”

At the local level, Zhejiang Province, Jiangsu Province, and Xiamen City of Fujian Province have all introduced regulations or issued directives requiring party and government offices to “live under a tight budget.”

Source: Epoch Times, December 23, 2023
https://www.epochtimes.com/gb/23/12/23/n14142236.htm

Briefings | | |   Economy/Resources Government/Politics

China-Russia Eastern Gas Pipeline Transmitted 20 Billion Cubic Meters of Gas in 2023

China Oil and Gas Pipeline Network Corporation announced that, as of early December, the China-Russia Eastern Gas Pipeline has transmitted over 20 billion cubic meters this year, reaching a historical high. It has transmitted over 50 billion cubic meters of gas since its inception on December 2, 2019.

The China-Russia Eastern Gas Pipeline is the third long-distance cross-border pipeline supplying natural gas into China, following the Central Asian pipeline and the China-Myanmar pipeline. China’s portion of the pipeline starts from Heihe City in Heilongjiang Province and extends south to Shanghai, with a total length of 5,111 kilometers.

Source: Xinhua, December 15, 2023
http://www.news.cn/energy/20231215/2b453f6a1bcc4699abb398bd35a45acc/c.html

Briefings | | |   Economy/Resources Geo-Strategic Trend

China’s State Council: Directive on Merging Domestic Trade and International Trade Together

China’s economy faces a shrinking market, both in terms of exports and on the domestic front. China’s State Council General Office issued a notice on “Several Measures to Accelerate the Merging of Domestic Trade and International Trade Together” on December 11, 2023, with the intention of allowing companies that are facing hard times in their primary market to seek opportunity in the other market.

The notice mentioned policies such as consolidating the domestic and international trade standards; advancing the uniformity of domestic and international trade products in production line, standards, and quality; supporting foreign trade enterprises in expanding the domestic market; supporting domestic trade enterprises in expanding the international market, etc.

Source: China government website, December 11, 2023
https://www.gov.cn/zhengce/content/202312/content_6919596.htm

Briefings | | |   Economy/Resources Government/Politics

Chinese Money Flows into Gold

Gold demand in China continues to rise, supporting high international gold prices. Chinese spot prices have exceeded international benchmarks since August 2023. Reasons for the high demand from China include economic concerns like the Chinese real estate slump and devaluation of the yuan, as well as global instability resulting from deteriorating Chinese foreign relations and wars abroad.

Chinese demand for gold reach 789 tons in 2022, making up 20% of global demand. Increasing purchases by Chinese individuals are lifting prices. Gold ETF holdings are up 27% since the end of 2022 as investors seek stability.

China’s economy is showing signs of slowdown. Both the manufacturing and property sectors are struggling, and heavy corporate debts are threatening operations. The yuan hit 15-year lows against the US dollar in September 2023, sparking speculation that China has limited gold imports to defend its currency.

Chinese investors distrust the yuan amid uncertainty, buying gold as a “stateless currency” and inquiring about offshore real estate, e.g. Japanese properties. Inquiries from China, Hong Kong and Taiwan to one Japanese real estate agency rose 40% between January and November of 2023.

Ongoing gold inflows and foreign property investment reflect persistent economic unease. But with policy stimulus now improbable, the poor outlook on growth may remain until issues around housing, the yuan, and debt show improvement. For the foreseeable future, Chinese demand for gold looks set to keep international prices elevated.

Source: Nikkei, December 15, 2023
https://zh.cn.nikkei.com/china/ceconomy/54310-2023-12-15-08-38-33.html

Briefings | | |   Economy/Resources