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A Chinese Province Declares a .01 Percent Poverty Rate

The Chinese government proposed a national poverty alleviation plan five years ago and vowed to make China a xiaokang society. A Confucius term from 3000 years ago, xiaokang means a condition of moderate prosperity. Recently, the Jiangsu Provincial Poverty Alleviation Office announced amazing results. The province’s poverty alleviation rate had reached 99.99 percent. That means that only .01 percent of the population is living under the poverty line. A progress report released on Tuesday January 7 announced that there were currently six households and 17 people in the province who had not “extricated themselves from poverty.” However, the news resulted in widespread suspicion. People expressed doubt and thought that it was another official propaganda fraud like the “Great Leap Forward” in the 1950’s.

Hu Jia, a longtime human rights activist in Beijing, pointed out directly that the government is lying, that the public knows that the government is lying, and that the government, knowing that the public knows that it is lying, still chooses to lie.

Hu Ping, Editor-in-Chief of the overseas political magazine Beijing Spring said, “Chinese-style poverty alleviation is a poverty alleviation as established in the books. The actual situation is a different matter. When the leader has a goal, the subordinates will come up with a figure.”

In 2015, as one of his political legacies, Chinese President Xi Jinping promised that the entire rural population would be lifted out of poverty by 2020. Soon afterwards, local government offices across the country announced that they would strictly implement the standard of an annual per capita net income of 4,000 yuan (US$576) and do a good job of poverty alleviation in 2020.

Source: Radio Free Asia, January 8, 2020
https://www.rfa.org/mandarin/yataibaodao/shehui/hj-01082020113236.html

The Nikkei: China’s Government Subsidies to Companies Doubled in Five Years

The Nikkei, Japan’s largest financial newspaper, reported that, in 2018, China’s government subsidies to companies had reached 156 billion yuan (US $22.4 billion), about five percent of the net profit of all publicly traded companies in China. That subsidy amount doubled from the amount five years earlier in 2013.

Government subsidies in the first nine months of 2019 increased 15 percent from the same period a year ago. Out of the 3,748 companies that were included in the statistical calculations, 3,544 companies (over 90 percent of the total base) have received government subsidies.

Sinopec received the largest amount of subsidies, followed by Guangzhou Automobile Group, and then Shanghai Automobile Group. Among the top ten most subsidized companies, four are auto makers. Several electronic companies are also in the top ten list, including BOE Technology Group (#4), TCL Group (#6), and Gree Electric (#7).

Source: The Nikkei, December 27, 2019
https://cn.nikkei.com/china/ccompany/38619-2019-12-17-10-37-58.html

2019 Bond Defaults Topped 143.258 billion Yuan

China Finance Online Co., Ltd, which provides web-based financial services in Mainland China and Hong Kong, reported that, In 2019, bond defaults among Chinese companies continued to surge.

JT², an asset management technology platform under JD Digital Technology, conducted intelligent analysis and research of public data and found that, as of December 23, 2019, a total of 177 bonds had defaulted in the bond market in 2019, involving 143.258 billion yuan.

Forty issuers defaulted for the first time on the bond market in 2019. Most of these issuers were private enterprises in a number of different industries and regions.

During the six years from 2014 to the present, be it the first-time defaulting companies, the number of newly added defaulting bonds, or the size of funds as a whole, all have shown an upward trend. Specifically, the number of bond defaults in 2019 increased by more than 6 times compared to 2014; the actual sum of what was in default amounted to more than 10 times the amount from five years ago.

Source: China Finance Online, December 31, 2019
https://finance.jrj.com.cn/2019/12/31160028610736.shtml

Lianhe Zaobao: Chinese International Acquisitions Fell to Ten Year Low

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that China saw its lowest level of overseas acquisitions in 2019, with a total value of US$41 billion. This is half the size of the 2018 volume and less than 20 percent of the volume for the peak year of 2016. The acquisitions in the U.S. declined by 80 percent in 2019, year-over-year. Analysts in the global banking industry expressed the belief that the sharp overseas acquisition decline was the direct result of the U.S.-China trade war and the significantly tightened government regulatory measures imposed in many countries against Chinese buyers. In the meantime, with the economic slow-down in China, the Chinese government is also strictly controlling the volume of capital flowing out of China, making Chinese investors work much harder than before to shrink the debt level. It is especially difficult for Chinese investors to pay back the debts acquired overseas. It is expected that more domestic investments will be seen in China than overseas.

Source: Lianhe Zaobao, December 31, 2019
https://www.zaobao.com.sg/realtime/china/story20191231-1017412

Yazhou Zhoukan Magazine Selected the Hong Kong Police as the “People of the Year”

Yazhou Zhoukan (亚洲周刊) is a widely circulated Chinese-language weekly magazine in Asia, headquartered in Hong Kong. Michael O’Neill and Thomas Hon Wing Polin, who also established the magazine Asiaweek, created it in December 1987. The Ming Pao group owns this magazine after purchasing it from Times Warner in 1994. Yau Lop Poon is the editor-in-chief.

Recently, Yazhou Zhoukan selected the Hong Kong Police as its “People of the Year” for 2019. The top story of its most recent issue published 7,000 Chinese letters that praised the Hong Kong police as their “guardian angel” and the “anchor that stabilizes the sea,” which, at the critical moment, “impacted the path of history and safeguarded Hong Kong’s rule of law.” It called the Hong Kong police “the most twisted and most insulted” group but also the “most dependent and most respected group.” It claimed that it was all because of the police that the “Hong Kong people maintained their freedom without fear.”

Many people criticized Yazhou Zhoukan for lining up with the Chinese Communist Party and ignoring the simple facts in Hong Kong.

Hong Kong’s renowned Chinese-language fiction writer Dung Kai Cheung posted on his Facebook site that he refused to have his novel “Mingzi” named in Yazhou Zhoukan’s 2019 Top Ten Novel List.

Wang Dan, a student leader at the June 4th Student Movement and dissident from China, called for people to boycott the magazine. “There are plenty of media even without this one,” Wang wrote on his Facebook page. “We must take the bad media off the shelf!”

Source: Radio France International, January 4, 2020
http://www.rfi.fr/cn/港澳台/20200104-香港亚洲周刊评选香港警察为年度风云人物备受争议

Beijing Anticipates Upcoming Mass Layoffs and Social Unrest

As the end of the year approaches, Chinese Premier Li Keqiang once again demanded to regulate how Chinese companies fire their employees. He proposed measures to prevent the outbreak of mass layoffs. The official party mouthpiece Xinhua News Agency reported on December 24 that Li issued the “Opinions on Further Improving Job Market Stability.” It proposed that the government should put more emphasis on employment stability and offer guidance to companies that conduct economic layoffs. The Opinions aims to prevent the risk of mass layoffs and ensure that the employment situation is stable. The above measures highlight China’s grim employment situation as a large-scale wave of layoffs may come soon.

The Opinions also mentioned the need to improve emergency response mechanisms. All regions should deal in a timely manner with mass social unrest that results from large-scale layoffs. The local governments have been advised to coordinate the employment needs of different groups and formulate temporary response measures.

On December 23, the government think tank, the Chinese Academy of Social Sciences, released the “Social Blue Book: Analysis and Forecast of China’s Social Situation 2020.” It stated that, due to the downward pressure on the economy and the impact of Sino-U.S. trade frictions, compounded by cyclical, structural and frictional factors, China’s employment situation continues to fluctuate because of increasing pressure and amid growing risks.

Source: Radio Free Asia, December 25, 2019
https://www.rfa.org/mandarin/yataibaodao/jingmao/ql2-12252019061501.html

Xinhua: Chinese Government Plans for “Tight Days” Ahead

Xinhua recently published a commentary after the National Financial Work Conference, observing that the Chinese government is preparing to tighten its control over spending. The Conference outcome was a guideline for all levels of the government to do careful planning next year, ensuring that money is spent only on things that are required. In the year 2019, China delivered a major tax cut package that boosted the market while eating into government income. It is expected that the next year will continue to have the same challenges China has today, if not more. All government branches are asked to get ready for tough days ahead and all the work should focus on expanding income sources and reducing the budget. The government should set an example for the whole country on looking at all phases of operations to cut costs. The Conference sent the message that the Chinese leadership is asking the entire government system to “get serious” about the coming tight days, by cancelling unnecessary projects and strictly controlling new initiatives. “Scientific money management” should become the new norm and should form the foundation of a sustainable society.

Source: Xinhua, December 27, 2019
http://www.xinhuanet.com/politics/2019-12/27/c_1125397290.htm

The Mysterious Person Helping the CCP’s Elite Families Transport Money Overseas

Epoch Times reported that a person has been instrumental in helping some top Chinese Communist Party (CCP) officials and their families move their money out of China. He remains low-key, rarely interacting with Chinese and hiding behind those transactions, so very few people know about him.

His real name is not clear. The name he uses in his circle is Michael P. Xu (his Chinese name might be 许鹏). He is a third generation of a Red Officials: His grandfather was a People’s Liberation Army (PLA) general who had fought wars for the CCP to take over the mainland. His father is a current PLA general. The government sent him to study at a U.S. high school and he might have changed his name at that time. He later worked at a senior position at Akerman LLP’s investment banking sector on mergers and acquisitions.

He is well connected to the family of current the CCP’s Politburo Standing Committee member Z. His relation with Z’s family dates back to when Z was holding a local government position. He has also helped other elite officials’ families to purchase U.S. companies via the Chinese companies that they control. Those families include the one of Dai Xianglong (戴相龙), former Governor of the People’s Bank of China; Shang Fulin (尚福林), former President of the China Securities Regulatory Commission and former President of the China Banking Regulatory Commission; Zeng Qinghong (曾庆红), former Politburo Standing Committee member and Jiang Zemin’s right hand man.

He has a good reputation in his circle and has a strong influence both in the U.S. and in tax haven islands. He is close to a Jewish group, especially the American Israel Public Affairs Committee (AIPAC). He frequently comes to the elite California Club, a by-invitation members-only private social club.

He provided strategic consultation for the China Metallurgical Group Corporation (中冶集团), China Merchants Bank (中国招商银行), and a global level company based in Guangdong, on their Northern American business strategies. He also did lobbying work on U.S. politics and regulations.

When Che Feng, son-in-law of Dai Xianglong, tried to buy Digital Domain (the producer of Titanic and Transformers), he had a problem with the U.S. Bankruptcy Court’s rule which required him, in a short time window, to put in money that was already in the U.S.0. Michael Xu moved several tens of millions of dollar in the U.S. and British Virgin Island to make the deal go through.

CCP’s Politburo Standing Committee member Z’s family started transferring their assets from China to Hong Kong and overseas while Z held local government position. One of Z’s assistants is Michael Xu’s relative. Many of Z’s family’s affairs were handled by Z’s son-in-law and Michael Xu through single contact.

Source: Epoch Times, December 14, 2019
http://www.epochtimes.com/gb/19/12/14/n11722684.htm