Economy/Resources - 89. page

An Internet posting by author Tuozhanlaogou (拓展老狗, WeChat account name) has been widely spread in China. Using data and charts, the author explained that China’s economy is at its most difficult time:

• 28.54 million people used Baidu to search for jobs in 2019, whereas less than 7.5 million people did that in 2018.
• China’s banking section is making so much money that it squeezes profits out of other industries. China has four companies ranked in the top ten companies with the highest profits in the world. All of them are banks. China’s banking section claimed 40 percent net income return, whereas the U.S. banking section only claims 14 percent.
• China’s state-owned enterprises (SOEs) are growing and the private companies and foreign companies are shrinking. In 2018, the rate of net asset increase vs. total profit (an indicator of investing profits into businesses) was 60.7 percent, -99.4 percent, and -1.6 percent, for the three types of business. The negative number itself indicates that the economic sizes of the private and foreign companies are shrinking.
• People are short of money. The fund industry (both mutual funds and hedge funds) raised 500 billion yuan (US $72 billion) in the third quarter of 2017 alone. However, for the whole year of 2019, it has only raised 180 billion yuan.
• 1,884 movie or TV related companies closed in 2019.
• New car sales dropped 2.76 percent in 2018 compared to 2017. From January to October 2019, the number of new cars manufactured and sold dropped 10.4 percent and 9.7 percent respectively, compared to a year ago.
• China’s M2 money is out of control. It has increased from 11 trillion yuan in 1999 to 194 trillion yuan (US $28 trillion) in 2019, twice China’s anticipated GDP in 2019. The U.S. M2 money in 2019 is only US $15 trillion and its GDP is US $21 billion; its M2 is only 71.6 percent of its GDP.
• In the past 12 months (December 2018 to November 2019), the Purchasing Manager’s Index (PMI) was below 50 for nine months and above 50 for only three months. The economy is considered contracting when the PMI is below 50 and expanding when above 50.
• China is departing from real (manufacturing) businesses. Among the total companies’ assets in China, the financial and real estate industries claim 47.9 percent of the assets, whereas the manufacturing sector only accounts for 11.7 percent.
• In the first six months of 2019, all provinces in China, except Shanghai, ran into a fiscal deficit.

Source: Sina, December 8, 2019
https://cj.sina.com.cn/articles/view/1931232181/731c43b501900jjam

The Chinese Communist Party’s (CCP’s) Central Committee and the State Council of the Chinese government issued the “Opinions on Supporting the Reform and Development of Private Enterprises.” In the contents, the CCP vows to “protect the legal property of private enterprises and entrepreneurs” and to “implement larger scale tax and fee cuts” to “substantially reduce the burden on private enterprises.”

This opinion claims to improve the fair and competitive market environment, improve a precise and effective policy environment, enhance the legal environment for equal protection, encourage and guide the reforms and innovations of private enterprises, and promote the normal and healthy development of private enterprises.

On the “protect the legal property of private enterprises and entrepreneurs,” the opinion claims to adopt measures such as seizure and freezing in strict accordance with legal procedures, strictly to distinguish illegal income in other case-related property and legal property, strictly to distinguish corporate legal personal property from shareholders’ personal property, and strictly to distinguish between the personal property of the persons involved and the property of family members.

As China’s economic policy has turned left in recent years, private enterprises are projecting a gloomier future. In the second half of 2019, the founders of a few large private enterprises in China retired one by one. Following the announcements, Alibaba founder Jack Ma, Ma Huateng from Tencent, Li Yanhong from Baidu, and Liu Qiangdong from JD.com, Inc. all resigned as chairman one after the other. In December, Wang Wei, chairman of SF Express Group, and Liu Chuanzhi, founder of the Lenovo Group announced their resignations. In response, Beijing’s recent move is suspected to boost the low economic sentiments, especially among the private sector.

Source: Central News Agency, December 22, 2019
https://www.cna.com.tw/news/acn/201912220192.aspx

China recently hosted a Global Lawyers Forum in Guangzhou, claiming that more than 400 international participants had been invited. Among them, a representative of the International Association of Lawyers (UIA), who was originally invited to give a speech at the conference, had his speech cancelled at the last minute. UIA issued a statement expressing its dissatisfaction.

In the beginning, the Chinese authorities called this event in Chinese the equivalent of the “World Lawyers Congress,” but its official English name was “Global Lawyers Forum.” China’s official mouthpiece, Xinhua News Agency reported that the participants included more than 400 international judicial professionals from 57 countries, including the International Bar Association (IBA), the International Association of Lawyers (UIA), the Council of Bars and Law Societies of Europe (CCBE), the Inter-Pacific Bar Association (IPBA), and the Law Association for Asia and the Pacific (LAWASIA).

The French-based International Association of Lawyers (UIA) issued a press release on December 17 to shed some light on an incident that Chinese media had not covered. The release stated that UIA President Jerome Roth was originally invited to give a keynote speech at the meeting, but the scheduled speech was cancelled after the content of the speech was submitted to the organizer in advance as had been requested.

UIA’s release shared part of Roth’s speech, which emphasized, “The unique role that both individual lawyers and bar associations play as privileged guardians and defenders of citizens’ rights and of the Rule of Law.” “We advocate for the independence of the bar and of the judiciary, without which there would be no Rule of Law.”

Roth’s speech also talked about the significance of the rule of law, including, “the accountability of political authorities of a nation to its citizens, the separation of powers, and laws that are publicly promulgated, equitably enforced, independently adjudicated, and which are consistent with international human rights norms and standards.”

UIA did not say in the press release whether the cancellation of Roth’s speech was because it sounded too harsh on Beijing.

At the end of the statement, UIA reiterated its concern over Chinese lawyers who had disappeared, were threatened, detained, and even physically and mentally abused during their practice of the law, and who were unable to defend their own rights through proper judicial channels.

Source: Radio Free Asia, December 19, 2019
https://www.rfa.org/mandarin/yataibaodao/renquanfazhi/rc-12192019103919.html

Well-known Chinese news site Sina recently reported that official trade numbers showed no recovery for China’s imports and exports. In December, China’s export growth rate declined 1.1 percent, year-over-year. Exports to the U.S. in December dropped by 23 percent, year-over-year. The U.S tariff is having an effect. China’s export growth rate to the EU declined by 3.8 percent in December, the rate to Japan declined by 7.8 percent, and to Hong Kong it declined by 7.2 percent, year-over-year. The exports to ASEAN (Association of Southeast Asian Nations) increased by 18 percent in November.

Among all exported goods, cellphones, apparel, suitcases, and furniture saw the most significant decline. In terms of imports, the total from the U.S. had a major increase of 2.7 percent. The Chinese imports of U.S. soybeans especially, increased by 40.9 percent, year-over-year. Among all imported goods, integrated circuits (IC) and automobiles saw the most significant growth. The Chinese international trade surplus reached US$38.7 billion, which is a decline from October’s US$42.8 billion level.

Source: Sina, December 8, 2019
https://bit.ly/2PpwCnX

Famous Chinese economist Guan Tao authored a commentary which Beijing News recently published. The commentary started by advising that stabilizing economic growth should depend on reforms and adjustments, instead of stimulation. Guan’s recommendation was made in the context of the annual Central Government Economic Work Conference, which normally takes place near the end of the year, deciding the critical plans for next year. Guan proposed that the government has no need to forcibly keep the six percent GDP growth rate in order to maintain economic stability. With its great potential, the Chinese economy may continue to slow down next year. Using this year’s growth rate as next year’s “red line” is not reasonable. It is perfectly acceptable, given the size of the Chinese economy, to have a slower growth rate, as long as the investments into improving people’s living quality and job security are sufficient.

Source: Beijing News, December 11, 2019
http://www.bjnews.com.cn/finance/2019/12/11/660348.html

Lian Yu, deputy chief of a bureau at the Chinese Ministry of Ecology and the Environment, which oversees the Yellow River’s ecology, stated, in an recent interview with a Beijing based local newspaper, that the Yellow River has ecological problems such as excessive exploitation of water resources and the pollution of rivers and lakes. Among the problems are that the utilization ratio of water resources of the Yellow River reaches more than 80 percent and that the low-water period can last more than 85 percent of the days, far exceeding the alert levels for most rivers.

Lian Yu believes that, in addition to excessive water use, other factors that contribute to the Yellow River pollution include coal and petroleum extraction and coal chemical and metal smelting plants scattered alongside the watershed. High water consumption, heavy pollution, and a high dependence on energy resources are factors that characterize these industries. The rudimentary industrial technology, the small scale of business operations, and the poor pollution control capabilities have contributed to the deterioration.

In the past 30 years, the fish population in the Yellow River watershed has decreased by about half. Among them, indigenous and endangered fish species have decreased by about 60 percent. Lian Yu believes that reservoirs and hydropower stations in the upstream and its tributaries pose a great threat to the habitats of these species. In addition, compared with the 1980s, the wetland area in the Yellow River watershed decreased by 16 percent and other lake wetlands, swamp wetlands, and estuary wetlands decreased by 25 percent, 21 percent, and 40 percent, respectively.

Source: Central News Agency, December 11, 2019
https://www.cna.com.tw/news/acn/201912110145.aspx