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Chinese Article: Shanghai Increased Social Security Contributions, Making It Hard for People to Live

An article was circulating among Chinese websites regarding the Shanghai government’s increasing its mandatory social security contribution. The author said that the Shanghai government announced the average wage of urban employees in Shanghai in 2022 was 12,183 yuan (US$1,681) per month, and therefore it increased the mandatory minimum social security contribution to 7,310 yuan per month.

The author discussed two points. First, Shanghai’s average salary was 9,339 yuan in 2019. The newly announced 2022 figure was an increase of over 30 percent from 2019. This 30 percent salary increase was unheard of to many people in Shanghai, especially during this period in which China suffered a 3-year lockdown and economy stalk due to COVID. The authorities might just hike up the salary number in order to impose a higher minimum social security contribution, which is based at 60 percent of the salary.

Second, this increased social security contribution put self-employed people in the position of further struggling to make ends meet. The newly increased social security contribution requires self-employed people to pay at least 2,595 yuan from their own pockets (24 percent of the minimum contribution for the retirement fund and 11.5 percent for healthcare insurance). That is nearly 300 yuan more from a year ago. The author then argued that 47.5 percent of these self-employed people have a monthly income less than 8,000 yuan, out of which, they have to pay the 2,595 yuan for their social security contribution and probably 2,000 yuan for rent, leaving only 3,400 yuan (a very low amount) for daily expenses, not to mention that the government might take income taxes from them as well.

Source: Creaders.net, June 30, 2023
https://news.creaders.net/china/2023/06/30/2622002.html

Briefings | | |   Economy/Resources Government/Politics

China Will Build a New Nuclear Power Plant for Pakistan

China and Pakistan signed a $4.8 billion contract on June 20 specifying that China will build its seventh nuclear power plant in Pakistan. This 1,200-megawatt project, named “Chashma 5,” is between the China National Nuclear Corporation and the Pakistan Atomic Energy Commission (PAEC). It will be located in the central Pakistani city of Chashma, where Beijing has already built four nuclear units, generating a total of 1,230 megawatts of power.

Pakistani Prime Minister Shehbaz Sharif attended the signing of a memorandum of understanding. He praised China for offering a $100 million discount on the project.

Source: Voice of America, June 21, 2023
https://www.voachinese.com/a/china-to-build-nuclear-power-plant-in-pakistan-20230620/7145623.html

Briefings | | |   Economy/Resources Geo-Strategic Trend

China’s Efforts to Silence Unfavorable Financial News

Le Monde, a French newspaper reported that China has been trying to hide any bad news about its financial data from the world. China’s central bank, People’s Bank of China, established a Chinese credit rating company, Dagong Global Credit Rating Co, Ltd in 1994, to “serve” both the domestic market and the world. In 2013, Dagong merged with Russia’s credit rating company RusRating and a small U.S. rating company Egan-Jones Ratings, to form Universal Credit Rating Group (UCRG) (世界信用評級集團). To build its reputation, UCRG hired former French Prime Minister de Villepin to chair its advisory board and former Australian Prime Minister Kevin Rudd to serve on its advisory board.

In 2010, UCRG was banned from practicing in the U.S. because it refused to comply with the transparency rules of the U.S. Security Exchange Commission (SEC). The European Securities and Markets Authority (ESMA), however, gave Dagong a green light in 2013. Part of the reason was that in the wake of the Greek debt crisis, the E.U. was happy to see a Chinese competitor enter the credit rating market which the British and American agencies dominated.

People soon saw that Dagong served as a strategic pawn for China to enter the European market. In 2018, Dagong was fined in China for corruption and collusion with the evaluated companies. In April 2019, the state power (the communist regime) directly took over the management of Dagong. The ESMA waited another seven months to exclude Dagong from the European market.

Beijing then adopted a new strategy. That is, to publish laws to control what information it feeds to the world. It introduced a data security and protection law in 2021, restricting the freedom of multinational companies to transfer information with their Chinese subsidiaries. It introduced and implemented cross-border data transfer regulations in 2022 to make it impossible for users to access Chinese corporate information databases, such as Tianyancha (天眼查), from abroad. Its new counter-espionage law, which will take effect on July 1, makes it possible to criminalize any exchange of information with foreigners and foreign organizations and companies.

Source: Radio France International, June 20, 2023
https://rfi.my/9dhS

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

Adapting to the Challenging Job Market: Chinese University Students Opt for Graduation Postponement

Chinese college students have manifested a growing trend of  opting to delay their graduation in response to the country’s economic downturn and rising youth unemployment rates. These students are facing difficulties in finding jobs and are choosing to extend their education in order to enhance their employment prospects. While delaying graduation was previously stigmatized, the current job market conditions have made this decision more acceptable.

The reasons behind the decision to delay graduation include the challenging job search process, prompting students to engage in additional internships and bolster their resumes to become more competitive. Some students opt for a delay because they did not gain admission to graduate school and decided to pursue stable jobs before attempting to enter the system as fresh graduates. Others seek an extra year to accommodate time constraints or personal circumstances, utilizing this period to apply for doctoral programs.

The Taiwan based Central News Agency report highlights the case of a journalism graduate student named Xiao Le, who believes that delaying graduation was the right choice due to the demanding curriculum and the university’s internship requirements. Xiao Le encountered health issues and anxiety related to a previous internship, leading her to seek advice from mentors, senior students, and friends. They advised her to take an additional year to prioritize her well-being.

According to Xiao Le, many students in her class have also decided to delay graduation. Some aim to reapply as fresh graduates after being rejected by their desired companies, while others pursue internships in Internet companies to increase their chances of securing employment in the challenging job market.

Given the intense competition in the current Chinese job market, many students are engaging in extensive internships alongside their heavy academic workload. Students are realizing that pursuing higher education does not guarantee a smooth transition into the job market, resulting in increased exhaustion and stress.

Source: Central News Agency (Taiwan), June 21, 2023
https://www.cna.com.tw/news/acn/202306210359.aspx

Briefings | | |   Economy/Resources

EUCCC: European Companies’ Confidence in Doing Business in China Has Deteriorated

Major Taiwanese news network Liberty Times Network (LTN) recently reported that the European Union Chamber of Commerce in China (EUCCC) just released its latest survey. The survey showed that, in the face of growing risks and a more unstable business environment, European companies’ confidence in doing business in China has deteriorated. Companies have begun to review their investment and business strategies in China. According to the survey, 64 percent (a record high) of the respondents said that doing business in China has become more difficult in the past year, and 30 percent of the companies said that their revenue shrank compared with the same period last year. This ratio increased by 20 percentage points and reached the highest level in history. Around 75 percent of the companies have reviewed their supply chain strategy in the past two years, with 24 percent saying they plan to relocate some of their supply chains to China and 12 percent who have already moved some of their supply chains out of China. In addition, 10 percent of the respondents said that they have moved or plan to move their Asian headquarters or business unit headquarters out of China. The number of respondents who regard China as the top three investment destinations in the future has dropped by 13 percentage points compared with the same period last year. Surveys point to increased decoupling between headquarters and China operations, mainly to manage risk. Jens Eskelund, president of the EUCCC, said the negative trends seen from this year’s survey were worrying and reflected challenges posed by an uncertain policy environment in China and heightened geopolitical tensions.

Source: LTN, June 21, 2023
https://ec.ltn.com.tw/article/breakingnews/4340888

Briefings | | |   Economy/Resources Geo-Strategic Trend

Worker Strikes Have Increased in China

China Labor Bulletin, a non-government organization based in Hong Kong, reported that it has counted 140 worker strikes in China from January to May, the highest number in the past seven years. One cause was that companies, struggling with reduced orders for their products, have been unable to pay workers’ salaries or their severance pay when laying people off. Many of the strikes have taken place in China’s manufacturing centers in Guangzhou, Shanghai, Jiangsu, and Zhejiang provinces.

Source: Liberty Times, June 15, 2023
https://ec.ltn.com.tw/article/breakingnews/4334834

Briefings | | |   @CS Economy/Resources Social Stability

China’s Hope to Rescue the Housing Market Burst

An Epoch Times article listed five points that suggest that China’s dream to rescue its real estate industry is only an illusion:

  1. The funding for real estate development keeps sliding. According to China’s National Bureau of Statistics, investment in the real estate industry was 13.289 trillion Yuan (US$1.85 trillion) in 2022, 10 percent down from a year ago. Investment in the period of January to May this year was 45.7 trillion yuan, down 7.2 percent from the same period last year. More and more people are selling their homes. Shanghai has an inventory of 200,000 pre-owned homes for sale. It sold 16,000 homes in May, which was  one-third lower than the sales volume in March.  In May, over 100 cities saw the largest price drop  since 2022.
  2. There has been a big jump in the number of foreclosed homes. There were 606,000 foreclosed homes in 2022, but only 118,000 were sold.
  3. The “Guaranteed Delivery” effort did not work. Due to a lack of funding, China put in 500 billion Yuan in July 2022 to help real estate builders to complete their pending housing construction projects . A year has passed. South China and the south China regions completed 56 percent and 46 percent of their housing projects, respectively. Southwest China and the central China regions completed only 15 percent and 16 percent.
  4. Real estate companies are struggling. The total profits of 69 publicly-traded real estate companies dropped in 2021. In 2022, the proceeds even became negative. More than 20 companies have been suspended from trading (they even face the risk of being delisted).
  5. Seven companies had been traded below 1 yuan for over 20 days and thus are likely to be delisted.

Source: Epoch Times, June 19, 2023
http://cn.epochtimes.com/gb/23/6/19/n14019226.htm.

Briefings | | |   Economy/Resources