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China Pilot Project: Paying Salaries with Digital Currency

China has been piloting the use of a digital currency issued by the state. Recently Changshu City, Jiangsu Province announced that, starting in May, it will make the salary payments for people working in the public sector in digital currency. The first pilot city to do so was Taichang City, also in Jiangsu Province, in July of last year. China has also started piloting digital currency and a digital wallet in 26 regions among 17 provinces.

Some people feel that digital currency can help prevent bribery or improper income. However, there are concerns about privacy and whether the government can use it as a weapon to suppress the people it wants to target.

Sources:
1. China.com, April 25, 2023
http://news.china.com.cn/2023-04/25/content_85251374.shtml
2. Central Network Agency, April 22, 2023
https://www.cna.com.tw/news/acn/202304220117.aspxApril 22, 2023

Chengdu Demolished Its 40-Billion-Yuan Green Way to Change the Land Back to Grow Crops

China used to call for a “green environment (绿化)” and promoted “turning farmlands back into forests (退耕还林).” However, it has now made    a 180 degree turn to stress growing more crops, or to “turn forests back to farmlands (退林还耕),” as it faces a shortage in its food supply both domestically and internationally.

Chengdu residents complained that some portions of the green beltway surrounding the city, which the city spent 40 billion yuan (US$ 6 billion) on  building has since been demolished and replanted with wheat. Even some parks have  been changed in order to grow crops, whereas the parks were once a big selling point for the nearby apartments.

A researcher also reported that village officials have been forced to take land back in order to grow crops. In some mountain areas, the local government encouraged peasants to build orchards. However, after people put all their savings into planting fruit trees, the government is now asking them to cut all the trees to grow crops.

Source: Epoch Times, April 25, 2023
https://www.epochtimes.com/gb/23/4/25/n13980976.htmi

Hainan Releases Rules for Overseas Higher Education Institutions, Limiting them to STEM and Agriculture Programs

China has issued regulations allowing foreign universities and vocational schools to establish independent schools in the Hainan Free Trade Port, but only in the fields of science, engineering, agriculture, and medicine, and they must offer courses on the Chinese constitution and the country’s situation. The rules, jointly issued by the Ministry of Education and the Hainan provincial government, allow foreign institutions that have an independent legal personality to set up schools in the region. Unlike existing Sino-foreign cooperative schools, foreign universities and vocational schools are not required to collaborate with Chinese educational institutions to establish schools in the Hainan Free Trade Port. Other organizations or individuals inside and outside China can participate in education by providing resources such as land, buildings, and funds. In terms of governance, the decision-making body of the school, which includes the president of the school, the head of the party organization, and representatives of faculty and the public, is represented by the foreign higher education institution.

According to the regulations, the school should provide courses on the Chinese constitution, law, civic morality, and the country’s situation, as well as comply with China’s public welfare principles and not harm China’s national sovereignty, security, and social public interests. The regulations also require the introduction of foreign high-level education institutions with good academic reputations and high international visibility, as well as with advantages in the fields of science, engineering, agriculture, and medicine, and whose graduates have good employment quality and positive industry evaluations. The school should have Chinese Communist Party activities in accordance with relevant national regulations. The regulations went into effect on March 24, 2022.

Source: Central News Agency (Taiwan), April 23, 2023
https://www.cna.com.tw/news/acn/202304230097.aspx

China Fully Implements Unified Property Registration; Property Tax Likely on the Horizon

China has announced that it has completed the unified registration of real estate. This means that from urban housing to rural homesteads and from real estate to natural resources, all real estate property rights within China’s national territory have been registered in a unified manner. However, concerns have been raised that the unified registration system may facilitate the government’s accurate knowledge of property ownership information, becoming a basis for determining the tax rate and collection of “property taxes.” It is an indication that the introduction of property taxes may be getting closer.

The goal of the unified registration system is based on the Civil Code of China, with the “Interim Measures for Real Estate Registration” as the core, as well as the supporting implementation rules, operating norms, local regulations, and other aspects of the real estate unified registration system. The reform task of “four unifications” for registration agencies, registration books, registration bases, and information platforms have been accomplished.

According to statistics, over the past decade, China has issued more than 790 million real estate ownership certificates. The unified registration system is expected to provide basic data support for the collection of property taxes and facilitate the government’s accurate grasp of property rights information. However, some Chinese financial, real estate, and public figures believe that the move will improve the operability of property tax collection, indicating that the introduction of property taxes may be getting closer. Property taxes have been viewed as a variable affecting China’s housing market and a burden on homeowners.

Source: Central News Agency (Taiwan), April 25, 2023
https://www.cna.com.tw/news/acn/202304250327.aspx

One in Four People in China’s Work in Public Sector

According to the latest data from China’s National Bureau of Statistics, the total number of employed urban residents in China’s cities fell from about 180 million people in 2013 to 170 million people annually between 2019 and 2021. At the same time, the number of public sector employees, including education, public administration, social security, and social organizations, increased from about 33 million to about 40 million, and the proportion of public sector employees in the total employment population increased from about 18% to 23%.

The number of people applying for civil service positions in China has also increased significantly, from nearly 1.37 million in 2013, with an average competition ratio of 66:1, to 2.5 million this year, with an average competition ratio of 60.5:1, a new high in nearly 10 years. The number of people applying for civil service positions is expected to increase by 500,000 between 2021 and 2023.

The Chinese government claims that it hires approximately 200,000 civil servants annually, but in February 2023, news emerged that several provinces planned to expand civil service recruitment by more than 50%, including Gansu, Yunnan, Guangxi, and Inner Mongolia, with Gansu’s recruitment scale reaching 79.7% and Yunnan’s almost 60%.

China’s National Bureau of Statistics has not released any statistics on the total number of financially supported personnel since 2008, but it is estimated that the number of civil servants and public sector employees has increased year by year, with estimates ranging from over 60 million to 80 million people, meaning that on average, 10 to 30 Chinese people support one civil servant. In 2016, China’s Communist Party media, People’s Daily, reported that China had about 50 million financially supported personnel, with an average of 11 Chinese people supporting one civil servant, citing Professor Zhu Lijia of the National School of Administration.

Source: Radio Free Asia, April 24, 2023
https://www.rfa.org/cantonese/news/cn-public-04242023115737.html

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

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

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