Economy/Resources - 64. page

According to the 21st Century Business Herald, bank outlets in China have been shrinking rapidly. Based on the China Banking and Insurance Regulatory Commission’s statistics, as of December 24, 2021, a total of 2,459 bank outlets of commercial banking institutions ceased operations this year. On December 24, 2021 alone, 29 commercial bank outlets closed their doors. The 21st Century Business Herald attributed the closures to the rapid development of digital technology.

Statistics from the China Banking Association show that, from 2018 to 2020, the number of outlets in the Chinese banking industry declined for three consecutive years, and the number of outlets that closed last year also approached 3,000. These closures include many outlets that had been in business for more than 30 years.

Semi-annual reports of banks also show signs of the decline of outlets. In the first half of 2021 alone, the four major state-owned commercial banks, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, and the Construction Bank, reduced 187 outlets or branches.

Behind the dramatic reduction in outlets comes the downsizing of bank staff. Comparing the data from the 2021 semi-annual and 2020 annual reports, the number of employees in the four major state-owned commercial banks decreased by 22,355 in the first half of 2021.

The  21st Century Business Herald said that, along with the outlet closures, the ability of banks to absorb deposits has declined significantly. At the same time, office rent, labor, and IT hardware maintenance have also risen due to competition, adversely impacting the profitability of bank branches.

Source: 21st Century Business Herald, December 28, 2021
http://www.21jingji.com/article/20211228/herald/e21b20a3c9a0ddd996fe746271c5ab13.html

An article on the Zhihu site reported that, according to the China Securities Journal, the number of court auctioned houses in 2021 has increased substantially. In 2015 it was only 500,000. In 2021 the number reached 2 million or around four  times as much.

In Beijing alone, in the first eleven months of this year, 4,909 houses were auctioned. The number was around 500 in the previous year. The sales price averaged 79 percent of the “normal” price.

The author commented that this is not a good sign since the owners are unable to make their payments on the mortgages and thus the banks have had the courts take over the houses by force in order to sell them.

Source: Zhihu, December 30, 2021
https://zhuanlan.zhihu.com/p/340431287

The government of Hegang, a city in China’s northwestern province of Heilongjiang, announced on December 23 that, “Due to the fiscal restructuring plan, the financial situation has changed significantly.” As a result, the city government of Hegang decided to suspend the recruitment of grassroots-level staff.”

The web announcement, according to the mainland newspaper National Business Daily, shows income has shrunk. The result is an ever-widening gap between revenues and expenditures. Debt financing has become the survival mode for some local governments.

As of October 2021, the balance of total local government debt in China reached 29.65 trillion yuan (US$ 4.65 trillion). Only five provinces – Shanghai, Guangdong, Beijing, Zhejiang and Jiangsu – have a debt-over-GDP ratio below the red line of 100 percent. Four provinces, including Qinghai, Heilongjiang, Ningxia and Inner Mongolia, have local debt ratios over 300 percent, with Qinghai being above 500 percent.

Days ago, the Hong Kong media also reported that a number of provinces and cities in China have cut the pay of civil servants at a rate between 20 and 30 percent.

Source: Central News Agency, December 28, 2021
https://www.cna.com.tw/news/acn/202112280146.aspxD

China’s official Xinhua News Agency reported that the Chinese Communist Party’s (CCP’s) Central Rural Work Conference took place in Beijing on January 25 and 26. The agenda focused on agriculture and rural areas in the year of 2022. CCP Chairman Xi Jinping said at the meeting, “The rice bowl of the Chinese people must be firmly in their own hands at all times.”

The meeting highlighted two issues:  food security and no falling back into poverty on a large scale. Emphasis was put on grain production and on the supply of important agricultural products to ensure at least 650 billion kilograms of total output in 2022.

China is the largest buyer of U.S. soybeans. On December 22, the Chinese website of Japan’s Nikkei cited a projection from the U.S. Department of Agriculture that China’s reserve of corn and other major grain stocks will account for more than half of the world’s total. With a population that is less than 20 percent of the world, China’s massive hoarding of grain is quite eye-catching.

Source: People’s Daily, December 27, 2021
http://papTer.people.com.cn/rmrb/html/2021-12/27/nw.D110000renmrb_20211227_1-01.htm

Chinese media have reported new waves of layoffs at major IT companies. Many employees who are over 35 years old will have difficulty finding new jobs in the industry.

Outlets, including Yicai.com and the Economic Observer, said that amid this wave of layoffs, many employees in their 30s have a greater “sense of crisis” than their younger peers. In China’s IT industry, the age of 35 is a threshold. When employees above that age are laid off, it is very difficult for them for find a new job in big companies.

Reports have told stories of a number of 35-year-old senior employees. Having not yet been told to leave, they are ready to jump ship or start their own businesses. However, not everyone has had enough time to plan for their future. One Baidu employee, who just bought a property in Beijing in August this year, received a notice on December 1, without prior warning, that he had to wrap up and leave by noon on December 3. Another Tencent employee mentioned that he has been intensively interviewed by the human resources department since October and asked to choose between leaving voluntarily and being transferred out.

The year 2021 saw the entire Chinese IT sector caught in waves of layoffs, including giants such as Tencent, ByteDance, Didi Chuxing, and JD.com.

Source: Central News Agency, December 12, 2021
https://www.cna.com.tw/news/acn/202112120132.aspx