Radio Free Asia, Chinese Edition, recently reported that sources said that Chinese tech giant Tencent Holdings has begun a new round of layoffs in its video streaming, gaming and cloud computing divisions. This round of layoffs affects three of Tencent’s six business units. It is difficult to determine the size of the layoffs. China’s tech sector continues to feel the effects of regulatory crackdowns and the Zero Covid government policies that have slowed China’s economic growth. Earlier this year, Tencent had already cut staff along with other well-known tech companies such as the Alibaba Group. Tencent management said they were focused on cutting costs and have closed non-core businesses in some areas. The Shenzhen-based company is eyeing global expansion to offset slowing growth in China. Tencent is recalibrating its mergers and acquisitions strategy, focusing more on buying majority stakes in mostly overseas game companies. Market analysts expressed the belief that Tencent will report flat or slightly smaller revenue for its third quarter. Tencent declined to comment on the matter.
Source: RFA Chinese, November 15, 2022
Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that Shanghai Pegatron, known as Apple’s second largest foundry (after Foxconn), issued an announcement on October 15th that it would suspend recruitment. Pegatron has always been the main force in manufacturing iPhone Plus models. The reporter visited Pegatron’s Shanghai Apple factory in person, and the recruitment interview office was empty. The security guard at the factory gate explained, “The factory is not that busy right now, and recruitment has stopped.” According to sources, Apple cut 70 percent and 90 percent respectively of the orders from two of its suppliers in China. At the same time Apple asked at least one component supplier to stop production immediately. The recent sharp reduction in working hours has caused dissatisfaction among many employees, since their income has been reduced substantially and they can only get a base salary. As the largest iPhone OEM, Zhengzhou Foxconn accounts for half of the world’s iPhone assembly work. Foxconn also lowered the company’s performance forecast for the fourth quarter, due to the Zero Covid government policy. Apple has been spreading its supply chain around the world to manage risk. This year, the number of factories from the United States and South Korea increased significantly. In particular, the number of American suppliers has increased from 54 to 85.
Source: Sina, November 15, 2022
Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that Moody’s has closed the risk management unit of its China operations, thus cutting about 100 jobs. People familiar with the matter said Moody’s Analytics closed its offices in Beijing, Shanghai and Shenzhen after discussing operational efficiency and profitability. However, Moody’s credit rating business will continue. Wall Street is now grappling with China’s strict Zero Covid government policy, volatile markets and state intervention. Morningstar had cut its staff in China earlier this year too. In response to inquiries, a Moody’s spokesperson said that, as announced on the most recent earnings call, Moody’s is taking steps to align its global workforce with current and anticipated economic conditions. Moody’s continues to maintain a strong presence in China and make constructive contributions to China’s sustainable growth and the further development of the Chinese domestic market. As a rating agency, Moody’s said Beijing’s support for its domestic real estate sector is not enough to eliminate the pessimistic outlook.
Source: Lianhe Zaobao, November 18, 2022
On November 6, 2022, China held a World Laureates Forum in Shanghai. Chen Jining, Secretary of the Shanghai Municipal Party Committee, Wan Gang, Chairman of the China Association for Science and Technology, Shen Haixiong, Vice Minister of the Propaganda Department of the CPC Central Committee and Director of the China Central Radio and Television Station, and Roger Kornberg, Chairman of the World Top Scientists Association and winner of the 2006 Nobel Prize in Chemistry, attended the opening ceremony and delivered speeches.
China’s state media Global Times published a commentary discussing the objectives of the forum. Below are the main points from the commentary:
“At the opening ceremony of the Fifth World’s Top Scientists Forum (World Laureates Forum) held in Shanghai, the first World Top Scientists Association Award (hereinafter referred to as the ‘Top Scientists Award’) was awarded. The World’s Top Scientists Association initiated the award and hosted the event along with the Shanghai World’s Top Scientists Development Foundation. The ‘Top Scientists Award is a science award for global scientists. It was officially announced at the 4th World’s Top Scientists Forum on November 1, 2021. The Top Scientist Award is awarded once a year. At present, two individual awards have been established, the ‘Intelligent Science or Mathematics Award’ and the ‘Life Science or Medicine Award.’ Ten million Chinese Yuan (~US$1.5 million) is given to each award winner. The same award can be given to and shared by up to 4 people. This award is also the highest bonus science and technology award established by China to date.”
“The establishment of the Top Scientist Award has a certain significance for the development of science and technology in China.”
“First of all, among the fiercely competitive world science and technology awards, large-scale investment in the establishment of international science and technology awards shows the determination and confidence of Chinese entrepreneurs and the scientific and technological circles to dare to participate in the competition for the world’s top science and technology awards.”
“Second, the international science and technology awards issued locally will help to increase the public attention given to science and technology, broaden the horizons of the scientific and technological circles and the public, and deepen the understanding of international scientific and technological progress and of global scientists.”
“Third, the Top Science and Technology Association Award is an international award led by non-governmental organizations and recommended by top scientists. It highlights its non-governmental, academic, and international nature, and is conducive to showing China’s more open international image in the field of science and technology and to promoting global academic exchanges and cooperation with scientific research to build a more open scientific community.”
1. Website for China Association for Science and Technology https://www.cast.org.cn/art/
When it was widely expected in China that Xi Jinping would no longer insist on the Zero-Covid policy, a commentary published in the state newspaper on November 14 mentioned the need to insist on the Zero-Covid policy nine times and even suggested that “epidemic prevention and control should be a routine procedure.”
On November 15, the mouthpiece of the Chinese Communist Party (CCP) People’s Daily newspaper ran a commentary which mentioned that “unswervingly implementing the overall policy of ‘Zero Covid’” was a decision made at the November 10 Politburo meeting chaired by Xi Jinping, and that the “optimization program” recently proposed by the State Council is not a relaxation of prevention and control, let alone is it giving up the policy.
The article said, “The implementation of the Zero Covid policy is determined by of the CCP’s Central Committee under comrade Xi Jinping. … Adhering to the zero Covid policy is the bottom line of epidemic prevention and control for a large country of 1.4 billion people.”
The article does not mention when the zero Covid policy will end, but only emphasized the need not to give up.
Source: Radio Free Asia, November 15, 2022
On November 9, China’s National Health Commission (NHC), the country’s top agency in charge of health policies, announced on its official website that the NHC, the National Administration of Traditional Chinese Medicine (NATCM), and the NHC’s subordinate National Administration of Disease Control and Prevention jointly issued a proposal, which envisioned that, by 2025, a dynamically managed electronic health record and a fully functional electronic health code will be set up for every Chinese national.
According to the document, as the health codes currently in use in most regions are for “intra-provincial use,” at the national level, there is a lack of sharing and recognition of health codes across regions. The official goal is that by 2025, China will build an “ioperable” monitoring platform for the whole population, with each resident equipped with a dynamically managed electronic health file and a fully functional electronic health code. By that time, the Chinese government will be able to use big data to track so-called “risk groups” and monitor the Chinese population in real time over the long run.
Source: Radio Free Asia, November 10, 2022
According to some individual social media accounts that focus on economic and financial news, the Chinese government has set up a “High Net Worth Individuals Administration” for people with bank deposits of 10 million yuan (US$1.4 million) or more, The state has launched a special tax audit operation targeting this group.
In the future, the authorities will adopt the means of “smart taxation” to collect information from and digitally profile each taxpayer. People who are emigrating from the country will have to “settle taxes before the cancellation of their Chinese household registration.” In other words, everyone who wants to leave the “motherland” must go to the tax authority to have it issue a tax clearance certificate.
This news has led to heated debates among netizens. Some ridiculed this as one of Xi Jinping’s “common prosperity” tactics.
As a fact, the Chinese government’s audits targeting high-income and high-net-worth individuals have already quietly begun. In September this year, Hainan province’s Taxation Bureau issued a document stating that it had launched a new type of audit supervision and carried out random checks on the “double-high (high-income and high-net-worth) population.” In June this year, Hou Kai, auditor general of the National Audit Office, reported to at a National People’s Congress session that 544 high-income earners in 22 Chinese provinces and cities had evaded 4.722 billion yuan (US$ 0.66 billion) in personal taxes from 2018 to 2021.
Source: Radio Free Asia, November 9, 2022
Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that the Ministry of Justice of Ukraine has approved a list of property, funds and other assets of the Communist Party to be transferred to the state. In August, a court decision went into effect, banning eight political parties that include the Communist Party of Ukraine (KPU). Ukraine President Vladimir Zelensky signed a law in May to ban pro-Russian political parties in Ukraine, which led to the court ruling. Justice Minister Denys Malyuska said on the Justice Department’s website that, the assets of the Communist Party of Ukraine (KPU) and its state, municipal, district organizations, grassroots organizations and other structural entities are to be handed over to state ownership. It is reported that the KPU owns a total of 54 properties, 18 cars, 8 company rights, 2 trademarks and 2 parcels of land in Ukraine. [Chinascope notes: The Ukrainian Communist Party (KPU) and the Chinese Communist Party (CCP) have always had close contacts.] On April 17, 2013, Zhang Xiyun, the Chinese ambassador to Ukraine, met with Petro Symonenko, the First Secretary of the Central Committee of the KPU. The two sides talked about cooperation. Symonenko said that the KPU was willing to further strengthen its relationship with the CCP. The CCP remained silent since the Ukrainian court ordered the permanent ban on the KPU.]
Source: NetEase, November 9, 2022