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China’s Most Restrictive Game Ban

Last year, the Chinese government issued an anti-addiction game ban, stipulating that minors can play online games for no more than three hours a week.

According to the Chinese media Yicai, this is the first summer since the implementation of the game ban, also known as the “most restrictive anti-addiction game ban in history.” Normally the summer vacation in China extends from July 11 to August 31. According to the rules, minors can only play games for one hour between 8pm and 9pm every Friday, Saturday and Sunday. This translates into a total of 21 hours of online games during the whole summer.

According to available data from large gaming companies, the share of corporate revenue made from minors has decreased now that the ban has been in effect for nearly one year.

For example, in Q4 2021, after the implementation of real-name registration and facial recognition, the total game time for minors at Tencent decreased by 88 percent from the same period last year. The total traffic of minors decreased by 73 percent annually.

Knowing that some underage players would play the games using the identity of their parents, Tencent claimed that its facial recognition system will come into play in the summer. All adult accounts suspected of being operated by minors will trigger facial recognition during the login and other sessions and the system will start a “round-the-clock patrol.”

Source: Central News Agency (Taiwan), July 11, 2022

China’s “Foreclosed Houses” Surge; Local Government’s Finances Are in Danger

Because of the impact of the Chinese Communist Party’s (CCP’s’) zero-COVID policy, many cities in China have been locked down. This has resulted in an economic recession, corporate layoffs, falling housing prices and an Increase in foreclosed houses and properties for residents and for business owners.

Recently, Chinese netizens revealed that, according to the bank’s financial system risk control meeting, there are nearly 40 million houses nationwide for which the mortgages have not been paid. More than 10 million foreclosed homes have been or are being auctioned off.

According to a report that the China’s National Finance and Development Laboratory released on June 29, the number of foreclosures increased from 500,000 units in 2019 to more than 1.6 million units in 2021.

In China, it takes about two years from the time a house’s mortgage is not paid until the house is sold at an auction. There will be more and more houses auctioned off in the future.

Real estate itself accounts for about 8 percent of China’s annual GDP growth. Incorporating the related industries, this results in an addition of up to 20 to 30 percent of China’s GDP. About 1/3 of the local government’s fiscal revenue comes from the sale of its land. Due to the downturn in the real estate market, land sales will certainly not do well. The local government’s finances are facing a dangerous situation.

Source: Newtalk, June 28, 2022.                                                                                                                                                           斷供潮來了-中國-法拍房-暴增-房市面臨崩盤危機-053638657.html

Document: Government Sanctioned Forced Adoption of Illegally Born Children

In the past, when China enforced its family planning policy, parents who had children who were born illegally were often fined. A document that recently circulated on the Internet revealed a policy in which a local government office has taken those “illegal” children away  for “rearrangement.” The document, dated July 1 and bearing the seal of the Health Bureau of Quanzhou County in Guangxi province, is an official response to a petition letter filed by a resident who reported a child abduction case.

The Health Bureau of Quanzhou replied that, according to the family planning policy enforced in the 1990s, the Quanzhou county government made the decision to “select” a child for “rearrangement” if the child was born in violation of the laws or regulations and policies on family planning. It ”was made at the request of the higher authorities, including the Guilin city government and the Guangxi provincial government.”

The document stated that the petitioner’s seventh illegally born child was “carried away by the county for social “rearrangement,” and there was no “child trafficking.” No record was kept of the whereabouts of the child.

A lawyer in Beijing said that if the incident involved a joint effort between law enforcement officers and human traffickers, it could be a crime of trafficking of women and children, which carries a maximum sentence of death.

In the past, similar cases have been reported in China. In 2014, China Youth Daily  and in 2011Caixin Magazine  exposed the forced removal of illegally born babies in Dazhou of Sichuan and Shaoyang of Hunan respectively.

To control population growth, China has had a family planning policy since the 1970s, which for a long time allowed only one child to be born to an average family. However, in recent years, as the birth rate has declined, the country has relaxed the policy several times.  In 2021, It shifted toward encouraging people to have three children.

Source: Central News Agency (Taiwan), July 5, 2022

Chinese Premier: Prevent Incidents that Break the Moral Bottom Line

On June 27, Chinese Premier Li Keqiang said at an event that, “The population trapped in dire conditions has increased due to the impact of the epidemic and natural disasters.” Li told China’s officials to “detect in a timely manner those people who lost their jobs, those who need to be included in the low-income programs, and those in temporary distress, and prevent the occurrence of incidents that break the moral bottom line.”

Although Li did not specify what the events might be that could “break the moral bottom line,” this is not an often used wording for the premier to use to describe China’s economic difficulties.

Li Keqiang considered that the current economy has recovered to a certain extent, but “the foundation is not yet solid.” He emphasized that, “The unemployment rate should be brought down and controlled as soon as possible.”

The above remarks were made on June 27 when Li Keqiang visited the Ministry of Civil Affairs and the Ministry of Human Resources and Social Security.

Source: Central News Agency (Taiwan), June 28, 2022

Profit of China’s Local State Enterprises Plunged 22.7 Percent in the First Five Months

China’s Ministry of Finance released the economic statistics of state-owned and state-controlled enterprises for the first five months of 2022. Due to the impact of the epidemic, the profit of local state-owned enterprises dropped by 22.7 percent.

Although the revenue of state-owned enterprises from January to May increased by 9.2 percent over the same period last year, the profit of all state-owned enterprises dropped 6.5 percent. Among them, local state-owned enterprises saw a deep profit dive of 22.7 percent.

As of the end of May, the asset and liability ratio of Chinese state-owned enterprises was 64.3 percent, of which the ratio for central enterprises was 67 percent, and 63.0 percent for local state-owned enterprises.

Source: Central News Agency (Taiwan), June 28, 2022

DW Chinese: Russia Became China’s largest Crude Oil Supplier

Deutsche Welle Chinese Edition recently reported that, in May of this year, China’s crude oil imports from Russia hit a new high, an increase of 55 percent over the same period last year. So far, Russia has replaced Saudi Arabia as China’s largest crude oil supplier. Chinese customs data showed that, despite sanctions from the West, Russia has been able to find Chinese buyers for its crude, but has had to cut prices. Though China’s demand for crude oil has fallen due to Covid, yet companies such as PetroChina and Zhenhua Oil have increased imports of cheap Russian crude. Saudi Arabia is China’s second-largest oil supplier. Its daily supply to China fell to 1.84 million barrels in May from 2.17 million barrels in April. Chinese customs data also showed that China imported 260,000 tons of crude oil from Iran in May of this year, which is the third batch of Iranian crude oil China has imported since December of last year. Despite U.S. sanctions on Iran, China typically imports Iranian oil through third countries, with Iranian crude accounting for 7 percent of China’s total imports. Chinese customs data also showed that China imported 400,000 tons of Russian LNG (Liquid Natural Gas) in May of this year, a 56 percent increase from May of last year. In the first five months of this year, China’s LNG imports from Russia increased by 22 percent year-over-year to 1.84 million tons.

Source: DW Chinese, June 20, 2022

Lianhe Zaobao: Tencent Plans More Layoffs

Singapore’s primary Chinese language newspaper, Lianhe Zaobao, recently reported that, in the second half of this year, Chinese Internet giant Tencent will continue to lay off staff. All business groups will reduce their staff by at least 10 percent and will start laying off more staff from the management levels. In the first half of this year, Tencent “optimized” the personnel of each business group. In the second half of the year, the whole company will continue to lay off employees on the same basis as in the first half of the year. The proportion of layoffs in the different sub-divisions of the Platform and Content Business Group will even reach 40 to 50 percent. A few business groups will face discontinuation. Tencent’s core business groups, including the WeChat Group and the Gaming Group were not touched much in the first half. However, in this upcoming new round, 10 percent or more will also see layoffs. Tencent is currently at a low point in its performance. According to Tencent’s financial report for the first quarter of this year, Tencent’s adjusted net profit fell by 23 percent year-over-year and its net profit has declined for three consecutive quarters.

Source: Lianhe Zaobao, June 23, 2022   already

China Again Fell to the Third Largest Trading Partner Position of the U.S.

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that, in the first four months of this year, the largest trading partner of the United States was Canada, with a bilateral trade volume of US$258.5 billion. Mexico also surpassed China to become the second largest trading partner of the United States, with a bilateral trade volume of $249.8 billion. China fell to the third position, with the total bilateral trade volume of US$241.1 billion. The primary reason for the US-China trade decline is that, in April, U.S. exports to China fell by $1.6 billion, and imports from China fell by $10.1 billion. An important reason for the continued rise in total U.S. trade is that inflation is going global, driving up the prices of imported goods. As we all know, inflation in the United States is very serious at the moment.The inflation rate has reached its highest level in 40 years. Consumer prices have continued to rise, especially gas prices. Thus the U.S. government has been heavily criticized. The U.S. Federal Reserve has already acted and raised interest rates. At present, the U.S. dollar is relatively strong and the currencies of many countries have depreciated, which will help promote U.S. imports. As the world’s factory, China has been the world’s largest trading country for many years. Last year’s total import and export trade volume exceeded US$6 trillion. The United States is China’s largest trading partner.

Source: NetEase, June 9, 2022