Economy/Resources – Page 65

Wal-Mart Closed More Stores and Bridgestone Closed Factory in China

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, not long ago, Walmart closed a fifteen-year-old store in Beijing. It is closing another store in one of Shanghai’s best locations. From 2016 to 2020, in four years, Wal-Mart closed 80 stores in China. Since the beginning of 2021, the number of closed stores has reached 27. In most instances, Wal-Mart’s explanation was that the lease term had expired. Analysts expressed the belief that the cost to operate in China, including such items as the rent and labor, continue to rise. In addition to that, online e-commerce has also had an impact in the retail industry. In recent years, the government has increased its support for domestic companies. International companies are seeing less-than-expected growth. Sina also reported that the Japanese tire giant, Bridgestone, just announced it is closing the Bridgestone (Huizhou) Tire Company in Guangdong Province. In recent years, the fact that Japanese companies have been withdrawing from China has aroused concern. A typical example is Toshiba’s closure of its Dalian factory. There have been reports that the Japanese government is planning to set aside a high budget to help Japanese companies move production lines away from China. Bridgestone saw a 15 percent decline in global sales in 2020. For a while now, the company has been planning to close the Chinese Huizhou factory at the end of 2021 .

Sources:
(1) Sina, December 11, 2021
https://finance.sina.com.cn/tech/2021-12-11/doc-ikyakumx3408433.shtml
(2) Sina, December 7, 2021
https://finance.sina.com.cn/chanjing/gsnews/2021-12-08/doc-ikyakumx2652374.shtml

Briefings | | December 12, 2021 | Economy/Resources

China’s Ministry of Finance Supported Zhejiang Province’s Common Prosperity Moves

This summer, Xi Jinping introduced the concept of “Common Prosperity.” The Chinese media have since hotly discussed the “Third Distribution.” It would involve distributing wealth from the rich to the poor via donations from the rich. In China, this could be a donation the authorities enforced- instead of a voluntary donation. Zhejiang Provincial Party Secretary Yuan Jiajun led the provincial leaders to donate a day’s worth of wages on September 3, to echo the call for the “Third Distribution.”

Xinhua reported that, recently, the Ministry of Finance published “The Implementation Plan to Support Zhejiang Province as a Provincial Example to Explore, Innovate, and Develop Fiscal Policies to Promote Common Prosperity.” This plan is the first plan to use fiscal policies to promote common prosperity. The plan fully intends to leverage the fiscal policies and the “Second Distribution” (via taxation) function; to adjust and influence the “First Distribution” and the “Third Distribution.”

Source: Xinhua, December 1, 2021
http://www.news.cn/fortune/2021-12/01/c_1128118905.htm

Briefings | | December 8, 2021 | Economy/Resources Government/Politics

Chinese Companies Are Mining Lithium and Rare Earths in Afghanistan

Liberty Times reported that at least 20 Chinese companies, both state-owned and privately-owned, have inquired about lithium projects in Afghanistan. Global Times reported that, currently, five Chinese companies have stationed representatives in Afghanistan. They are conducting site inspections in order to develop lithium projects.

Afghanistan has large untapped reserves of copper, iron, zinc, lithium, and rare earths. These reserves are valued at more than $1 trillion.

Source: Liberty Times, November 24, 2021
https://ec.ltn.com.tw/article/breakingnews/3746854

Briefings | | December 8, 2021 | Economy/Resources Geo-Strategic Trend

Amazon Chinese Sellers Suffered the Worst Black Friday

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, on November 30, Amazon’s “Black Friday” came to an end. This year’s market has disappointed Chinese sellers quite a bit. An international e-commerce company in Shenzhen said, “Last year’s Black Friday, we had US$1.5 million in sales on the Amazon platform, but this year sales fell to US$900,000.” However, compared with the Chinese sellers that Amazon blocked directly, the sellers who can still do business on Amazon are considered lucky. Cindy Tai, Amazon’s Vice President of Asia Global Selling, revealed that, in the previous five months, Amazon closed the sales rights of about 600 Chinese brands, involving about 3,000 accounts of these brands, including some large sellers.

These sellers have repeatedly abused the comment function. After numerous warnings, Amazon decided to terminate its relationship with these sellers. Based on past data, those who could really make money during big promotions like Black Friday are often the strong and powerful sellers. This year, however, quite a few top Chinese sellers were forced out of the game early on. Several large Chinese sellers, all with 2020 annual revenues above US$500 million, were removed from Amazon due to the counterfeiting of product reviews. It has been noticeable that many of the sellers are now increasing their investments in other platforms like Wal-Mart and eBay.

Source: Sina, December 2, 2021
https://t.cj.sina.com.cn/articles/view/1644119190/61ff449602001ulev

Briefings | | December 7, 2021 | Economy/Resources US-China Relations

Caixin: China’s Manufacturing PMI Fell Below 50 in November

Well-known Chinese financial site Caixin recently released its official Chinese Manufacturing PMI index number for November, which was 49.9. Caixin PMI was formerly known as HSBC PMI, which was a well-respected economic indicator widely monitored globally by financial institutions. Although the power shortage has eased, due to the rebound of the Covid-19 pandemic and weak domestic and foreign demand, the Caixin China Manufacturing Purchasing Managers Index (PMI) fell into a contraction zone in November. Manufacturing supply has recovered significantly, but demand is weak. The new export order index and employment index have both fallen into the contraction range for four consecutive months. Though the price index has fallen sharply, yet Inflation pressure still cannot be ignored. Small manufacturing company rescue is still the focus of future policy. The interviewed companies reported that suppliers’ inventory levels remain low. Logistics delays and supply chain delays continue. Adequate attention should also be paid to the deterioration of employment and the weaker consumer purchasing power.

Source: Caixin, December 1, 2021
https://pmi.caixin.com/2021-12-01/101812028.html

Briefings | | December 7, 2021 | Economy/Resources

China Central Bank Adviser: Common Prosperity Requires Lowering Gini Coefficient

A People’s Bank of China adviser believes that, to achieve Xi Jinping’s common prosperity, China must lower the Gini coefficient, which measures income inequality, to below 0.4. Cai Fang, a member of the Monetary Policy Committee of the central bank, made this remark at a forum that Caijing magazine hosted on November 27 and 28, 2021.

Cai stated that China’s Gini coefficient should drop from the current 0.47 to close to 0.4 and, by 2035, it should drop close to 0.35. He added, “If it is higher than 0.4, we cannot say that this is common prosperity.”

Cai, who is also an economist at the Chinese Academy of Social Sciences, said that China needs to reduce inequality through a redistribution of its national income. It should also increase the supply of social welfare and a reduction of the Gini coefficient. There is “a lot of work to do.” China must use different means and ways of the first, second, and third distribution of national income to build an olive-shaped social structure with middle-income groups as the main body. It is more important to create a public service system covering the entire life cycle of the people.

According to China’s National Development and Reform Commission, the first distribution of wealth comes through market competition. The second is achieved through taxes, subsidies, and social welfare programs. The third distribution taps enterprises and individuals to redistribute their wealth through voluntary donations.

The Gini coefficient measures the degree of equality in the income distribution of residents in a country or region. A value of 0 means complete equality. According to data from the National Bureau of Statistics of China, China’s income Gini coefficient reached the highest point of 0.49 in 2008 and then fell to 0.47 in 2020. According to OECD estimates this year, the average Gini coefficient in developed countries is 0.314.

Sources:

Sina.com, November 28, 2021

https://finance.sina.com.cn/hy/hyjz/2021-11-28/doc-ikyakumx0712227.shtml

Zaobao, November 29, 2021

https://www.zaobao.com.sg/realtime/china/story20211129-1218123

China National Development and Reform Commission, September 24, 2021 https://www.ndrc.gov.cn/fggz/jyysr/jysrsbxf/202109/t20210924_1297384.html?code=&state=123

Briefings | | December 4, 2021 | Economy/Resources

Taiwan: Voice of China Commented on Far Eastern Group’s Statement of “Anti-Taiwan Independence”

The Chinese Communist Party (CCP) fined Taiwan’s Far Eastern Group in the amount of US$5.7 million, blaming it for supporting “Taiwan Independence” activists. On November 29, the Far Eastern Group’s Chairman Xu Xudong yielded to the CCP and published a statement on Taiwan media, expressing an “anti-Taiwan Independence” position and supporting the “One China” principle.

China ‘s Media Group, also known as the Voice of China, published a commentary stating that the Far Eastern Group’s statement was not enough. “Regarding Xu Xudong’s expression, we heard his words, but more importantly, we need to see his actions.”

“If the Taiwan Far Eastern Group wants the sincere recognition of compatriots on both sides of the Taiwan Strait, it must completely abandon the illusion of being a ‘two-faced person.’ It must stop supporting the ‘Taiwan Independence’ elements, and avoid making itself an accomplice to ‘Taiwan Independence’ again. Only in this way can people believe that Xu Xudong’s statement is really in support of the ‘One China’ principle, rather than a temporary measure to protect his interests in the mainland.”

“Regarding Xu Xudong’s statement, we focus more on the future and want to see their actions. On the one hand, they should really stop political donations to the ‘Taiwan Independence’ elements, to combat the ‘independence’ from the origin. Any ‘two-faced’ behavior cannot escape the sharp eyes of people on both sides of the Strait. On the other hand, they should also exert their influence to promote cross-strait exchanges actively and lead more Taiwanese enterprises operating in the mainland resolutely to oppose the Democratic Progressive Party authorities’ despicable tactics of ‘decoupling’ the two sides…”

Taiwan: CCP Imposed Hefty Fines Because a Company Supported the DPP in Taiwan

The Far Eastern Group is one of the biggest conglomerates in Taiwan. It has made substantial investments in mainland China. Recently, the Chinese Communist Party (CCP) targeted the company and fined it 36.5 million yuan (US$5.7 million), because of its support for the Democratic Progressive Party (DPP) in Taiwan.

Xinhua News Agency reported on November 22^nd that the authorities in five provinces, including Shanghai, Jiangsu, Jiangxi, Hubei, and Sichuan, inspected Far Eastern Group’s chemical fiber textile and cement companies in their regions and found a series of violations in environmental protection, land use, employees’ occupational health, safety production, firefighting, taxation, and product quality. Authorities imposed fines, recovered taxes, and took back unused land that was given to the company.

Zhu Fenglian, the spokesperson from China’s Taiwan Affairs Office connected the fine to Taiwan independence activists. She said the mainland will absolutely not allow people supporting Taiwan independence to make money in the mainland and “eat the food and destroy the pot” – meaning to get benefits from the mainland while damaging it. She stated, “Taiwanese businessmen and companies (operating in mainland China) should discern right from wrong, stand firm, draw a clear line (separating them from) the ‘Taiwan independence’ separatist forces, and take practical actions to safeguard the cross-strait relations.”

The Far Eastern Group has made legal contributions to politicians from both the DPP and the Kuomintang, with more money to the DPP side. The CCP has been trying to collaborate with the Kuomintang and suppress the DPP.

Source: Radio Free Asia, November 23, 2021
https://www.rfa.org/mandarin/yataibaodao/gangtai/hcm1123a-11232021054632.html

Hot Topics | | November 28, 2021 | Economy/Resources Geo-Strategic Trend

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