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China Identifies Strategic Emerging Industries for Investment

“Strategic emerging industries and future industries are the new battlefield for competition,” according to Zhuang Shuxin, Secretary-General and spokesperson for the State-owned Assets Supervision and Administration Commission of China’s State Council.

A recent People’s Daily article stated that the Chinese government plans to “promote a number of major projects,” select “hundreds of projects” in strategic emerging industries, construct “clusters of strategic emerging industries,” implement special actions such as “AI+,” and accelerate the formation of landmark achievements in key areas such as biotechnology, new materials, and new energy vehicles. The government will also expedite industrial development supported by technological breakthroughs; foster pioneering enterprises, leading enterprises, and unicorn enterprises; and create landmark products in areas such as neuromorphic intelligence, quantum information, deep earth and sea exploration, and laser manufacturing.

Source: People’s Daily, January 30, 2024
http://finance.people.com.cn/n1/2024/0130/c1004-40169330.html

Briefings | | |   Economy/Resources Government/Politics

The New Social Currency in China’s Financial Industry: Guandan + Maotai

The Chinese card game “Guandan” has rapidly gained popularity nationwide since last year, posing a threat to golf and Texas Hold’em poker as the new “social currency” of China’s financial industry. Such scenes have emerged as financial securities firms giving “Guandan gift boxes” to clients, fund companies organizing Guandan tournaments, private equity and venture capital firms studying Guandan books and skill guides, and industry leaders playing Guandan games at gatherings.

In the past, China’s financial industry was closely intertwined with the US dollar, and social activities largely revolved around western activities such as golf or playing Texas Hold’em poker and drinking red wine. Nowadays, however, foreign sources of funding have largely dried up, and availability of domestic private capital is decreasing too. Financial professionals in China are therefore forced to turn to the government for funding. Since Chinese government officials enjoy playing the game “Guandan,” mastering this game has become critical for Chinese financial professionals.

With the industry drifting towards a “Guandan + Maotai liquor” model, Shanghai has even established a Guandan Sports Association. Originating from Huai’an, Jiangsu Province, “Guandan” is a four-player card game played with two decks of cards, where players form teams of two and must use higher-ranking card combinations to suppress opponents, with the winner being the first to deplete their hand of cards, followed by scoring and ranking up.

Source: Epoch Times, January 29, 2024
https://www.epochtimes.com/gb/24/1/29/n14168608.htm

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

Nikkei Shimbun: China’s 2023 GDP Growth Was Actually Negative

Japan’s Nikkei Shimbun ran an article saying that China’s 2023 GDP numbers reported by the communist regime are likely fake. Given suspicions of data tampering by both local and central party apparatuses in China, Nikkei Shimbun put together a rough alternative estimate using three data points that have a significant impact on GDP: real estate investment, net exports, and household consumption.

  • Real estate investment accounts for about 10 percent of GDP. Adding in Chinese consumer spending on electrical products, the sum accounts for about 30 percent of GDP. In 2023, China’s real estate investment decreased by 16.7 percent compared to 2022, which could lead to a decrease of 5 percent in GDP.
  • China’s net exports (i.e. the difference between imports and exports) historically accounts for about 3 percent of China’s GDP. However, from January to November 2023, net exports decreased by 32.3 percent compared to the same period in 2022, resulting in an estimated reduction in 2023 GDP of about 1 percent.
  • Chinese officials have not publicly disclosed household consumption data, which accounts for about 40 percent of China’s GDP. Nikkei estimated this data using total retail sales to consumers, a figure which increased by 7.2 percent in 2023 compared to 2022, impacting GDP positively by about 2.8 percent.

Adding these three numbers together, the resulting estimated true change in GDP is negative 3.2 percent. Even accounting for the impact of inflation, the change in GDP should be at least negative 2 percent, significantly below the positive 5.2 percent change in GDP published by the Chinese government.

The Nikkei report urged Japanese investors in China to withdraw their funds as soon as possible.

Source: New Talk (Taiwan), January 31, 2024
https://newtalk.tw/news/view/2024-01-31/907283

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

Chinese Scholar: Four Aspects of The US Global Strategy

On January 9, 2024, Xinhua News Agency hosted its 14th “Discussing World Affairs” international seminar with the theme “The Accelerating Evolution of Global Changes: Navigating China’s Diplomacy.” Wang Honggang, the Deputy Dean of the Institute of Modern International Relations of China, delivered a speech titled “Watch Out Four Aspects of the United States’ Global Strategy.” Xinhua released a 4-minutes-and-23-seconds-long video clip of his speech. Below are some translated excerpts from the speech.

“The first aspect is related to industrial policies. The Biden administration focused on the economy last year and will continue to do so this year. The U.S. economy is a hegemonic economy. Domestically, it needs to transform its industries, which means, externally, it will engage in more intense industrial competition with other countries. In the first three years, its actions were defensive, but in the fourth year, it may take more aggressive actions, such as challenging other countries’ external circulation (export) systems.

“The second change involves Russia and Ukraine, and Israel and Palestine. The U.S. politics is most afraid of being looked down by other countries. These two wars are likely to stimulate the U.S. to significantly expand its defense industry’s capacity and maybe even substantially update its military doctrine.

“The third feature is the coordination between geopolitical focal points and geopolitical hotspots. For the United States, both Eurasia and the Middle East are geopolitical hotspots, but not its geopolitical focal points. The Asia-Pacific, or the “Indo-Pacific,” is its true focus. Regarding the Northeast Asia (the Korean Peninsula) issue, the Taiwan issue, the South China Sea issue, and even the Sino-Indian relations, what strategy will the United States adopt? Will it pursue a strategy of letting it get into chaos first and then getting it under control?

“The fourth change is the cognitive warfare. With fewer resources, how can the U.S. achieve its goals? It certainly involves more covert and cost-effective operations: cognitive warfare. Through information manipulation, shaping external perceptions, disrupting opponents, and shaping favorable situations for oneself.”

Source: Xinhua, February 2, 2024
http://www.news.cn/world/20240202/6750fd70be4e462fa8821a32b318703c/c.html

Briefings | | |   Government/Politics US-China Relations

Retired Military Leaders Saluted Zhang Youxia But Not Xi Jinping

The Chinese Communist Party’s Central Military Commission (CMC, 中共军委) held a cultural performance on January 29 for the retired military leaders who are in Beijing. Xi Jinping led CMC members including Zhang Youxia, He Weidong, Liu Zhenli, Miao Hua, and Zhang Shengmin to attend the event.

The China Central Television’s (CCTV’s) video revealed that, when Xi waved to the retired military leaders, only one saluted him. But those retired military leaders saluted the CMC’s Vice Chairman Zhang Youxia. Zhang also responded back with salutes frequently. CCTV quickly removed this scene.

In CCTV footage from previous years, Xi would enter the venue, shake hands one by one with the retired military leaders in the front row, and many retired military leaders in casual attire would salute him before shaking hands. This year, however, Xi did not shake hands with the retired military leaders; instead, he waved from a distance. Speculation from the public suggests that this change might have been due to the ongoing COVID pandemic.

Source: NTDTV, February 1, 2024
https://www.ntdtv.com/gb/2024/02/01/a103848268.html

Briefings | | |   Defense/Military Government/Politics

Artistically Shaping China’s Image Based on Three Principles

The China Social Science website posted a theoretical article, suggesting that “a beautiful and artistic image of China, organically integrated with profound Chinese wisdom, can better fulfill Beijing’s mission to be a great nation.” The article listed three “cultural principles” by which to craft an artistic image of China:

  • Values: “The image of Chinese people should be trustworthy and sincere.” This image not only comes from the traditional Chinese culture, but also from “the communist revolutionary cultural values and advanced socialist cultural values.”
  • Ethics: “China has developed an ethical concept that ‘family and home country are integrated as one.'” “Patriotism becomes the fundamental political and ethical spirit, giving rise to the individual ideal that one should ‘cultivate oneself, harmonize the family, govern the country, and settle the world.'”
  • History: “Chinese culture is diversified because the vast Chinese territory comprises multiple geographical units, leading to diverse economic forms and nurturing different cultures.”

Source: China Social Science, January 19, 2024
https://www.cssn.cn/skgz/bwyc/202401/t20240119_5729627.shtml

Briefings | | |   Economy/Resources Government/Politics

Xinhua: China Unveils “Thousand Groups Going Abroad” Initiative, Aiming to Boost Overseas Trade

As China’s exports continue to decline, the China Council for the Promotion of International Trade (CCPIT) announced a new initiative this year called “Thousand Groups Going Abroad.” The plan is to organize over 1,000 batches of business delegations to participate in overseas exhibitions, inspections, and negotiations, aiming to secure export orders and expand China’s overseas markets. The initiative will target China’s key export markets such as the Europe Union, the U.S., Japan, South Korea, ASEAN, and Latin America.

China organized approximately 900 overseas exhibitions in 2023.

Source: Xinhua, January 15, 2024
https://app.xinhuanet.com/news/article.html?articleId=a2b554b08f23afaff0f499798e1b9f74

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

People’s Daily: Foster a Comprehensive Ongoing Approach to National Defense Education

People’s Daily published an article on conducting national defense education for the general public in China. The below paragraphs are translated excerpts from the article:

“Our army is the people’s army. Our national defense is the defense of the entire nation.

National defense education is comprehensive, long-term systemic work that emphasizes practical effectiveness and the public participation. Facing the current complex and challenging national security situation, it is essential to consistently regard national defense education as a strategic necessity.

Youth are the future of our country and thus the main focus of national defense education. It is crucial to incorporate national defense education into textbooks, classrooms, and student’s minds, sowing in young hearts the seeds of love for the Party, for the country, and for the military. We should leverage opportunities like military open days and military summer/winter camps to conduct effective national defense knowledge training.

Catering to the characteristics of the audience, national defense education should occur both online and offline, with both hardware and software being developed simultaneously. We should fully utilize local regions’ revolutionary culture (historical sites) and new technologies such as big data and artificial intelligence.

National defense education is not achieved through a single event; instead, it needs to be integrated into daily life and pursued regularly.”

Source: People’s Daily, January 21, 2024
http://paper.people.com.cn/rmrb/html/2024-01/21/nw.D110000renmrb_20240121_2-06.htm

Briefings | | |   Defense/Military Government/Politics