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Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

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Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

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Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized

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Xinhua Commentaries: “Exposing the Three Major Political Deficits of the U.S.”

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HKET: Germany is Checking All Chinese Components in Its 5G Network

Hong Kong Economic Times (HKET), the leading financial daily in Hong Kong, recently reported that, German Interior Minister Nancy Farser said the ministry is checking all Chinese components already installed in Germany’s 5G network. The practice is to protect the country’s communications network. The three priorities of the inspection are to identify risks, avoid crises and avoid dependencies. She emphasized that relevant inspection is particularly important for key 5G network infrastructure. This could be an important move by German authorities to deal with security concerns. Domestic German media earlier quoted sources as saying that Berlin is considering banning certain components from Chinese companies such as Huawei and ZTE in the telecommunications network. The Ministry of the Interior later denied it, emphasizing that it only comprehensively reviewed all suppliers to avoid over-reliance on individual suppliers. The Chinese embassy in Germany responded that China firmly opposes Germany’s generalization of the national security concept, abusing state power to interfere in the free market, and undermining the principle of fair competition.

Source: HKET, April 16, 2023
https://bit.ly/41AvDUC

Briefings | | |   Geo-Strategic Trend Information/Technology

UDN: Even Chinese Manufacturers are Forced to Diversify Supply Chains

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that, not only foreign companies, but also Mainland China manufacturers are affected by geopolitical tensions, and are forced to move part of their production overseas due to customer demands. Wanhe Electric, the leading water heater manufacturers in Mainland China, is a good example. Its board of director Lu Yucong said, his American customers “made a condition that they are willing to cooperate with us only if we build factories in countries other than China, such as Vietnam and Thailand.” Multinational companies are reassessing their global operations amid Russia’s invasion of Ukraine, the pandemic and growing tensions between the U.S. and China. It has become more and more obvious in the past two or three years that, not only the United States, but European countries are also deglobalizing. Due to rising tariffs, Chinese manufacturers’ costs are being pushed down to the extreme. They may lose their competitive pricing advantage, and buyers cannot accept this situation. Wanhe Electric finally decided to move several factories in South China to Egypt and Thailand, where the supply chains are not as good as China, but more suitable to avoid risks associated with US-China trade friction. Many industrial players are planning to set up new production bases in Southeast Asia, such as textile manufacturer Luthai Textile and tire manufacturer Jiangsu General Technology Co. More and more American companies with deep presence in China are also considering similar adjustments.

Source: UDN, April 17, 2023
https://money.udn.com/money/story/5599/7103191

Briefings | | |   Economy/Resources Geo-Strategic Trend

CNA: Employment Rate of Shanghai College Graduates is 32 Percent

Primary Taiwanese news agency Central News Agency (CNA) recently reported that China’s employment situation is grim, and college students are frequently found unable to get a job. Lates statistics showed that in Shanghai, China’s most prosperous city, the current average employment rate of fresh graduates from colleges and universities is only 32.8 percent. According to government official announcement, the number of college graduates in Shanghai this year reached 236,000, a record high. On March 16, the Shanghai authorities launched the spring employment promotion campaign, and intensively held employment and internship job fairs. Many Chinese netizens called the employment status of this year’s fresh graduates “disastrous.” A netizen said that 20 out of 30 people around him were preparing the entrance exams for civil servants. Last year’s data showed that, even the top universities in Shanghai are facing challenging employment situation for their students. Shanghai Jiaotong University, which ranks first in science and engineering, has a rate of only 65 percent among fresh graduates who obtained employment agreements. Fudan University, the strongest in literature category, had more than 65 percent of graduates last year going on to further studies, 21.42 percent were employed, and 13.8 percent were unemployed. Some observers expressed the belief that, this is the reality of college students. There is really no good place to go in the society. China’s industrial upgrade has failed.

Source: CNA, April 15, 2023
https://www.cna.com.tw/news/acn/202304150200.aspx

Briefings | | |   Economy/Resources Social Stability

An Ever-growing Cohort of Public Servants in China

China is expected to see a record number of college graduates in 2023, with an estimated 11.58 million students graduating from national universities. In response, China’s central and local governments are implementing measures to create employment opportunities for graduates. Data shows that the proportion of fresh graduates among the total applicants for the National Civil Service Examination has risen from 39.17% in 2019 to 67.4% in 2023.

A recent paper published by a professor and doctoral student at East China University of Science and Technology analyzed the impact of the post-epidemic era on job security. The study found that high-risk workers were experiencing high rates of job loss and pay cuts, highlighting the vulnerability of modern life and reinforcing traditional concepts of occupation. This societal shift has contributed to a growing faith in the government sector among young people, who see it as a stable and secure workplace amidst an abnormal job market characterized by overtime culture, fierce competition, and unstable income.

In 2023, nearly 2.6 million people applied to take the national civil service examination, representing a 25% increase from the previous year. The ratio of the number of successful exam takers to the number of available positions reached 70:1.

However, some experts are concerned about the long-term impact of an increasing number of graduates entering government employment. Tian Xianpeng, an associate professor at Jiangnan University, warned that the government can only provide a limited number of positions, and the influx of graduates is likely to intensify competition for these positions.

Li Chao, chief economist of Zheshang Securities, pointed out that the fundamental issue contributing to high youth unemployment is the mismatch between the education system and market demands. In reality, the labor market and education system are not sufficiently aligned to ensure a strong match between graduates’ skills and market needs.

Source: news.china.com, February 27, 2023
https://news.china.com/socialgd/10000169/20230227/44549288_all.html

Briefings | | |   Economy/Resources

China to Provide 10 Billion Yuan in Subsidies to Grain Farmers

China’s central government has issued a one-time subsidy of 10 billion yuan (US$1.45 billion) to actual grain farmers in order to support spring farming and stimulate the enthusiasm of farmers to plant crops. According to official data, China has approximately 500 million farmers, including 300 million rural migrant workers and fewer than 200 million permanent residents. This is the first time the government has offered a one-time financial subsidy to farmers. The subsidy targets those who actually grow crops, including those who use their own contracted land, large-scale households, family farms, farmers’ cooperatives, agricultural enterprises, and individuals and organizations that provide full-cycle socialized services for grain cultivation and harvesting.

However, some agricultural experts claim that China’s food security situation is severe and this subsidy is not enough to solve the problem. Yang Hua, a retired lecturer at Yunnan University, claimed that the subsidy would only provide 66 yuan (US $9.60) per person to approximately 150 million grain farmers, which would only be enough to purchase 20 kilograms of rice. Meanwhile, Cai Shenkun, a senior financial commentator, stated that, in recent years, there has been a significant shortage of rural labor in China. The phenomenon of farmland abandonment is very serious, particularly in coastal areas. In this situation, farmers have no incentive to grow crops since the more they grow, the more money they lose. As a result, the government must increase grain prices to support farmers and ensure food security.

Additionally, Chinese customs data for the first two months of 2023 revealed that the price of grain and of edible vegetable oil imports has risen significantly, indicating a further strain on China’s food security.

Source: Radio Free Asia, April 17, 2023
https://www.rfa.org/mandarin/yataibaodao/jingmao/gt2-04172023050715.html

Briefings | | |   Economy/Resources

China Has a Surplus of Delivery Workers as Unemployment Rises and Earnings Decline

In China, a growing number of workers are resorting to the food delivery industry for employment as they struggle to secure jobs elsewhere. However, the industry is facing increasing competition as the surplus of delivery workers makes it difficult for individuals to secure enough orders to earn a decent income. Despite recruitment efforts by platforms such as Meituan, there are now more delivery workers than there is demand for their services. As a result, workers are facing intense competition and low earnings, with many struggling to make ends meet. The challenging working conditions were highlighted in a recent Chinese media report that described the cramped living quarters and difficult financial situation faced by many delivery workers. While food delivery work has been a lifeline for struggling workers, the long-term sustainability of the industry as a source of employment is now being questioned.

Source: World Journal (Taiwan), April 14, 2023
https://www.worldjournal.com/wj/story/121474/7099432

Briefings | | |   Economy/Resources

Chinese Local Governments Cut Non-Official Personnel to Reduce Expenditures amid Fiscal Pressures

Amid financial pressures, many local governments in China are reducing the number of non-official personnel to cut down on expenses. This move follows the release of the “Plan for the Reform of Party and State Institutions” by the Chinese Communist Party and the State Council in March 2021, which aimed to streamline personnel structures. Cities such as Harbin, Shiyan, Chuxiong, and Huizhou have started reducing non-official staff. Shiyan city in Hubei province reportedly saved around RMB 15 million (US$2.2 million) after removing 326 non-official personnel, which accounted for around 9 percent of total non-official staff. Chuxiong plans to reduce non-official personnel by 265, or around 6.5 percent, which would lead to a decrease of approximately RMB 3.6 million (US$0.5 million) in government expenditure.

The reduction in non-official personnel is expected to reduce the financial burden on local governments, including salaries, social security contributions, and medical insurance costs. Furthermore, since non-official personnel are not included in the official headcount, their qualifications and abilities can be uneven and they may not be able to handle all tasks. Therefore, cutting non-official staff could allow for more experienced personnel to handle affairs, leading to better government efficiency.

Source: Central News Agency (Taiwan), April 11, 2023
https://www.cna.com.tw/news/acn/202304110140.aspx

Briefings | | |   Economy/Resources

UDN: Apple’s India Focus Enhanced Taiwanese Supply Chain

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that, Apple’s rush to “Made in India” has been fruitful, with over US$7 billion worth of iPhones assembled in India in its last fiscal year. This means tripling iPhone production in the world’s fastest growing smartphone market. Foxconn, Wistron and Pegatron played an important role. The three major Taiwanese foundries’ Indian manufacturing business grew simultaneously and became big winners. With the help from its Taiwanese partners, Apple produced about 7 percent of iPhones in India in the last fiscal year, a huge jump from the previous 1 percent. In the current fiscal year, Apple assembled more than US$7 billion in iPhones in India by the end of March, of which US$5 billion was exported, nearly four times the amount in the previous year. Apple may attempt to produce the next generation of mobile phones simultaneously in India and Mainland China, possibly in the fall of this year, which will be the first time that Apple mobile phones get assembled simultaneously in China and India. A quarter of Apple’s phones could be assembled in India by 2025, if suppliers continue to expand aggressively.

Source: UDN, April 14, 2023
https://udn.com/news/story/7240/7096899

Briefings | | |   Geo-Strategic Trend Information/Technology