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China’s June Export Numbers Continue to Decline

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, according to the data just released by the General Administration of Customs, the country’s export value in June 2023 decreased by 12.4 percent year-over-year in US dollar terms. Meanwhile, import value in June decreased by 6.8% year-over-year.

The June export numbers were lower than market expectations, showing the biggest drop in exports in three years. There are three main reasons behind the drop. First, the global economic downturn further weakened external demand for Chinese goods. Second, last year’s June export growth rate baseline had a sharp rise. Finally, China’s exports to the United States have declined rapidly. Analysts expect that exports in the third quarter will continue the negative growth trend.

In June, China’s exports to the United States fell by 23.7 percent year-over-year, a decline 5.5 percent larger than that of the previous month. Chinese exports to U.S. have been declining for 11 straight months. June exports to the EU fell by 12.9 percent year-over-year, a rate of decline 5.9 percentage points greater than the previous month. June exports to Japan fell by 15.6 percent year-over-year, a decline 2.3 percentage points greater than previous month. It is especially worth noting that, in June, China’s exports to the Association of Southeast Asian Nations (ASEAN), the country’s largest trading partner, fell by 16.9 percent year-over-year, an expanded decline of 1 percent from May. Meanwhile, Chinese exports to Russia grew by 90.9 percent year-over-year, with a high growth rate for four consecutive months.

Source: Sina, July 13, 2023
http://stock.finance.sina.com.cn/stock/go.php/vReport_Show/kind/lastest/rptid/742588141245/index.phtml

Briefings | | |   Economy/Resources

US Circuit Court Ruled that Falun Gong Practitioners Can Sue Cisco for Supporting the CCP

On July 7, a three-panel decision from the US Ninth Circuit Court gave Falun Gong practitioners a green light to sue Cisco System, Inc. for its action in designing the Internet censorship network used by the Chinese Communist Party (CCP).

The CCP carried out its Golden Shield project (金盾工程) from 2003 to 2006 to build the Internet censorship and monitor system used against the Chinese people. The system, known colloquially as “The Great Firewall of China,” not only blocks people inside China from visiting websites that the CCP does not want people to go to, but also monitors people’s actions on the Internet. Cisco, in order to get bigger access to the Chinese market, helped the CCP to design this censorship system; China lacked the sophisticated skills needed to develop the system on its own.

At a Congressional hearing in 2008, Cisco admitted to its involvement in developing the system. Its Vice President admitted that Cisco’s internal presentation included an official statement from the Chinese government on combating hostile elements, including religious organizations. Cisco also stated in the same or related PowerPoint presentations that the CCP would carry out a crackdown campaign against Falun Gong, describing the project as a lucrative opportunity for the company.

In 2011, Falun Gong practitioners brought a lawsuit against Cisco and two of its former executives, CEO John Chambers and China Vice President Fredy Cheung, for assisting the CCP in tracking and persecuting Falun Gong practitioners.

In 2014, a local district court rejected the case.

On July 7 of this year, the US Ninth Circuit Court of Appeals reversed the district court’s decision and reinstated all claims under the Alien Tort Statute against Cisco.

Source:
1. NTDTV, July 8, 2023
https://www.ntdtv.com/gb/2023/07/08/a103745483.html
2. Minghui, July 10, 2023
https://www.minghui.org/mmh/articles/2023/7/10/462850.html

Briefings | | |   @CS Economy/Resources Government/Politics

An Arbitrage Opportunity for Trading RMB: Turning 70,000 Yuan to 120,000 Yuan

China’s recent efforts to internationalize its currency Renminbi (RMB) have backfired. Countries such as Russia, Brazil, etc. have received RMB from trading with China and then heavily sold RMB on the offshore RMB market, causing the RMB price to keep falling.

Twitter account “@AsiaFinance” recently tweeted about an arbitrage opportunity in trading RMB: First, sell a little over 70,000 yuan of RMB to buy US$10,000. Second, exchange the US$10,000 for 1.5 million Russian Ruble on the black market. Third, exchange the 1.5 million Ruble, at the official exchange rate, for 127,300 Yuan RMB. Then you have turned 70,000 yuan to over 120,000 yuan.

Source: Twitter “@AsiaFinance” account, July 7, 2023

Briefings | | |   Economy/Resources

Two Chinese Tech Giants Hit with Heavy Fines

Radio France Internationale (RFI) recently reported that Chinese regulators on Friday slapped hefty fines on Alipay and Tenpay, owned by digital giants Ant Financial Services Group and Tencent. The China Securities Regulatory Commission announced that it would fine Ant Group and its subsidiaries RMB 7.123 billion yuan (around US$986.4 million), and fine its competitor Tenpay nearly RMB 3 billion yuan (around US$415 million). The two private groups dominate China’s payment system and have significant weight in the Chinese financial system. They are not subject to banking supervision and have thus long been thorns in the eyes of the authorities. China’s central bank, the People’s Bank of China, declaring in a statement following the action that the financial business rectification of large platform companies has now been completed.

The government’s crackdown on tech has cost the dynamic industry billions of dollars in market value over more than two years. Alibaba, the e-commerce giant that owns Ant Financial, became the first company targeted by authorities in late 2020 following public comments by Alibaba co-founder Jack Ma that angered the Chinese leadership. Ant Financial Services’ IPO, which was originally regarded as the largest fundraising in history (US$34 billion), was called off at the last minute. Later, the Chinese government started a tough crackdown on digital platforms across the industry including Tencent, Didi (aka Chinese Uber) and all private online education companies, particularly on issues such as personal data collection and protection, anti-competitive behavior, and raising funds abroad.

Source: RFI, July 8, 2023
https://rfi.my/9iAQ

Briefings | | |   Economy/Resources Information/Technology

China State Media Uniformly Talked About People in Western Countries Not Having Enough Food to Eat

A Chinese netizen found that China’s state media collectively reported that people in Western countries do not have enough food. He concluded that “the official media’s intensive spreading of news that foreigners don’t have enough to eat is to tell you that hard times are coming (to you).” (Editor’s note: The Chinese Communist Party’s (CCP’s) logic is to tell Chinese people that people in other countries are in a horrible state and therefore, when hardship comes to the Chinese, they can justify or accept it since they are no worse off than those foreigners.)

The netizen gathered screenshots of several CCP controlled media around June 30:

  • Xinhua News Agency said, “One in every seven Brits didn’t have enough to eat last year;”
  • People’s Daily claimed, “Australia’s low-income families face severe cost-of-living pressure;”
  • China Daily claimed, “Homeless people in New York shelters hits record high of over 100,000;”
  • Xinmin Evening News, a media owned by Shanghai government, claimed, “One fifth of the German population is at risk of poverty;”
  • The Global Times reported, “Japanese media: Inflation soars, Japanese elderly can’t afford to eat fish.”

Source: Aboluo website, July 3, 2023
https://www.aboluowang.com/2023/0703/1922399.html

Briefings | | |   Economy/Resources Government/Politics

Global Times: China Announced Gallium and Germanium Export Controls

Global Times recently reported that China’s Ministry of Commerce and the General Administration of Customs announced the implementation of export controls on items related to gallium and germanium. This has aroused great concern, and some worry that rare earths could be the next target. The Goldman Sachs Group predicted that the West may need to invest more than US$25 billion to rival the supply of rare earths from China. China’s rare earth production accounts for 90 percent of the world’s total refined production. As extremely important scarce strategic resources, gallium and germanium are widely used in cutting-edge technology fields such as satellite communications, solar cells, semiconductors and artificial intelligence. At present, these two rare metals are listed as 35 key minerals by the United States and 61 key raw materials by the European Union. Chinese Foreign Ministry spokesperson said that items related to gallium and germanium have obvious military and civilian dual-purpose uses. And it is a common international practice to implement export controls on items related to gallium and germanium. China announced the measure just before U.S. Treasury Secretary Yellen’s visit to China. Some media outlets said that China’s move was intended to send a signal to the U.S. – China is demonstrating it won’t let repression go, China can fight back.

Source: Global Times, July 7, 2023
https://world.huanqiu.com/article/4Dbx4VTZ5Va

Briefings | | |   Economy/Resources Geo-Strategic Trend

Sixteen Chinese Auto Makers Signed a Letter of Commitment

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, after experiencing a fierce price war started by Tesla, the Chinese auto industry ushered in an important moment. Witnessed by relevant government agencies, the China Association of Automobile Manufacturers (CAAM) and 16 auto companies signed the “Letter of Commitment to Maintain a Fair Market Order in the Auto Industry.” These 16 auto companies, including Tesla China, account for more than 90 percent of the Chinese auto market share. The Letter of Commitment requires auto companies not to disturb the order of fair competition in the market with abnormal prices, and at the same time not to exaggerate and falsely advertise. Tesla was the first to start a price cut frenzy. CAAM said the Commitment ensures that all parties will abide by industry rules and regulations, standardize marketing activities, maintain a fair competition order, and not disrupt the market’s fair competition order with abnormal prices. It also requires all parties to “carry forward the core values of socialism,” actively fulfill social responsibilities, and take active roles in stabilizing the economic growth, strengthening market confidence and preventing risks. Industry insiders expressed the belief that the Letter of Commitment is also a normative measure by the Chinese government against this year’s large-scale price war and unfair competition among car companies.

Source: Sina, July 7, 2023
https://finance.sina.com.cn/nextauto/2023-07-07/doc-imyzurcf9154228.shtml

Briefings | | |   Economy/Resources