Lianhe Zaobao (United Morning Post), a Singapore based newspaper, reported that the financial institution, HSBC Qianhai Securities Co. Ltd., established a branch of the Communist Party of China, becoming the only bank among the seven foreign banks with an investment banking business in mainland China that has established a grassroots organization of the Communist Party in its subsidiaries.
China’s company law requires companies to set up grassroots Communist Party committees, but it does not mandate foreign financial institutions to do so. Foreign media previously reported that HSBC Qianhai Securities set up a party committee of the Communist Party of China, believing that the move might force other foreign banks to follow suit.
According to The Epoch Times, the establishment of the Communist Party branch of HSBC Qianhai Securities comes after its move in April to raise its stake in the joint venture from 51 percent to 90 percent .
At first, in order to facilitate the introduction of foreign capital, they only established party branches in foreign companies secretly. Later it became a completely open requirement. Based on data released by the Organization Department of the Chinese Communist Party Central Committee, by the end of 2016, 70 percent of foreign-funded enterprises in China had established party branches or committees.
Source: Lianhe Zaobao; Epochtimes, July 22, 2022.
https://www.kzaobao.com/shiju/20220722/121498.html
https://www.epochtimes.com/gb/22/7/22/n13787052.htm
China’s Media Continues to Spread that Covid Virus May Have Come from U.S. Biological Laboratory
China News, a major news media in China, recently published an article titled, “Lancet Scholar Says New Coronavirus May Have Originated in U.S. Biological Laboratory.” The article cited a report from Russia Today. The article stated, “Jeffrey Sachs, chairman of the new crown committee of the international medical journal The Lancet, said that the new coronavirus may not have come from nature. It may have originated from an accident in a U.S. biotech laboratory.”
The article was republished on many media channels in China including Xinhua.
Radio Free Asia pointed out that Chinese media blatantly tampered with the original words of U.S. experts.
According to Radio Free Asia, Sachs made it clear that, “I’m pretty sure it came from biotechnology in American labs — not from nature.” Sachs said so in a speech at a conference hosted by the Spanish think tank GATE Center in mid-June.
Sources:
1. Sina.com, July 2, 2022
https://mil.news.sina.com.cn/2022-07-02/doc-imizirav1639787.shtml
http://www.news.cn/world/2022-07/03/c_1211663581.htm
2. Radio Free Asia, July 13, 2022
https://www.wenxuecity.com/news/2022/07/13/11686777.html
Banks in Multiple Chinese Provinces Restrict Depositors’ Withdrawals
Following the protests of thousands of depositors in Henan Province as they could not withdraw their money from a local bank, people in China have discovered that the difficulty in withdrawing money has also occurred in other provinces and cities.
According to China Times, a newspaper based in Beijing, one depositor from Shaanxi province, who opened an account at a Hainan branch of the Industrial and Commercial Bank of China (ICBC), recently found he was unable to withdraw, transfer or spend money from his account. Another depositor from Hunan province also said that he had his bank card frozen after taking out a loan from a bank.
Another mainland Chinese newspaper, Securities Daily, reported that similar cases also took place in Beijing and in Shandong province. In response to media inquiries, the bank involved said the operation was a risk control measure taken by officials to prevent accounts from being used for money laundering.
Source: Radio France International, July 20, 2022
https://rfi.my/8b0E
Starting in September, China Will Require a Security Assessment before Data Is Sent Overseas,
According to the Cyberspace Administration of China (CAC), starting in September, an official “security assessment” will be required for data to be sent outside of China. This includes operators who have access to information on over 1 million people or have cumulatively provided information on more than 100,000 people.
The CAC, China’s top cyber regulating agency, announced the Measures on the Security Assessment for Data Export on July 7, 2022. “Data export” refers to the overseas transfer from China of data collected and generated within China, as well as the scenario in which a foreign entity or foreign individual is granted the authority to access any data stored within China.
The Measures prescribe several scenarios in which data processors are required to file an application with the authorities for a security assessment before exporting data. 1) The provision of important data outside the country; 2) Operators of Critical Information Infrastructure (CII); 3) Data processors processing the personal information of more than 1 million individuals; 4) operators that have transferred personal information of a total of 100,000 individuals on a cumulative basis since January 1 of the previous year; 5) operators that have transferred sensitive personal information of a total of 10,000 individuals on a cumulative basis since January 1 of the previous year.
The Measures will come into effect on September 1, 2022. The security assessment result is valid for two years. A data processor is also required to re-submit an application for a government security assessment in certain circumstances, such as where the cross-border data transfer purpose has changed.
Source: Central News Agency (Taiwan), July 8, 2022
https://www.cna.com.tw/news/acn/202207in which080164.aspx
China’s CPI is Calculated Differently from the U.S.
At a press conference on July 15, China’s National Bureau of Statistics announced that the Consumer Price Index (CPI), the key measure of inflation, was 2.3 percent in the second quarter. It was 2.1 percent for both April and May, and 2.5 percent for June. In the U.S., the CPI in June was 9.1 percent, reaching a 40-year high.
The South China Morning Post (SCMP) has reported on why China’s inflation rate has been relatively lower than that of the West. A major reason for China’s lower inflation rate is that the weight of products included in the CPI calculation is very different.
CPI tracks the prices people pay for a “basket” of goods and services. The list of goods is weighted, with those more often bought for daily consumption getting a higher weight.
While China puts more weight on food and clothing, the U.S. values housing and transportation more, the latter being more susceptible to global energy prices.
According to Huang Wentao, an analyst at the China Securities Finance Corporation (CSF), in China’s CPI calculation, the weight of food is about 18.4 percent, while that weight in the U.S. CPI is 7.8 percent; China’s weight for clothing and apparel is about 6.2 percent, while in the U.S. it is 2.8 percent. The rent for housing accounts for 16.2 percent in China’s CPI, and 32 percent in the U.S. calculation. Transportation accounts for 10.1 percent in China, which is much lower than the 15.1 percent in the U.S. counterpart.
Source: Central News Agency (Taiwan), July 15, 2022
https://www.cna.com.tw/news/acn/202207150277.aspx
VOA Chinese: Biden’s $1 Billion Airport Renovation Plan Avoids Chinese Products
Voice of America Chinese Edition recently reported that the White House held a briefing not long ago, announcing the Biden administration will propose nearly $1 billion to renovate 85 airports across the United States over the next five years. The plan includes updating equipment such as security checks, baggage handling, and more. A lot of environmental protection and security equipment on the market is made by Chinese companies or in Xinjiang. White House officials told VOA that the supply chain situation has been considered, and equipment made in the United States will be used to ensure U.S. national security. Mitch Landrieu, senior White House adviser and infrastructure project implementation coordinator, said that 5,000 projects are already under construction in this plan, and national security considerations are indeed one of the challenges. President Biden hopes to ensure that all products are Made in the USA. Meanwhile, Brian Deese, Director of the National Economic Council, has been planning for a year, and the White House is satisfied with the results so far. Landrieu said that the Biden administration also adopts the “All Hazards Approach” to ensure that all construction projects are in the national security interests of the United States, including this airport construction plan.
Source: VOA Chinese, July 7, 2022
https://www.voachinese.com/a/us-airport-infrastructure-national-security-china-20220707/6648594.html
Many Chinese Home Buyers Collectively Decide to Stop Paying Their Mortgage on an Unfinished Home
The Chinese real estate industry has faced several ripple effects after many developers struggled or defaulted on their debt payments. Not only do investors and banks face losses, but constructions of many buildings have also been halted for months if not years and home buyers were not sure when they will eventually receive their homes. For some buildings, the builders have no intention to complete the construction and will just leave them in the unfinished status forever; the Chinese call them the “rotten-tail buildings.”
Unlike the U.S. the home-selling practice where the home buyers sign a contract with the builder when the building is constructed and take out a mortgage when the home is delivered, Chinese buyers take out the mortgage at the time of signing the contract and start the payment right away, even though they don’t have the house.
This presents a big, unfair problems for the home buyers. They are paying mortgages to banks while seeing no progress in the construction of their homes.
Getting no help on these unfinished buildings from the builders, the banks, and the government, many home buyers resolved to a new approach: collectively announcing they would stop their mortgage payment.
On June 30, all home buyers of an unfinished construction project in Jingdezhen City, Jiangxi Province announced jointly on social media that they would stop mortgage payments until the builder resumes construction. This started a wave of home buyers’ stopping their mortgage payments. By June 16, according to NTDTV’s report, home buyers of at least 270 project (a project may consist of multiple buildings) throughout China, including Jiangxi, Anhui, Henan, Hubei, and other provinces, have made similar announcements,
Technically, the unfinished building is a dispute between the home buyers and the real estate developers, not involving the bank. Banks can still hold the buyers accountable for their payments and have the option to freeze and auction buyers’ own personal properties and put them on a bad credit list, if they stop their payment. However, since home purchasing accounts for a significant portion of spending for many Chinese families, these home buyers feel that they have nothing more to lose.
Some home buyers have also found ways to accuse the banks. Some banks didn’t put their payment in proper escrow accounts, some banks released the funds to real estate developers though the construction didn’t reach the required funding stage, and some banks purposely created bad mortgage contracts to steal the home buyers’ money.
This stopping payment wave also spread to real estate developers’ suppliers and contractors. On July 15, an announcement circulated on the Internet that suppliers and contractors in Hubei Province supporting the Evergrande Group decided to stop providing funding and materials and stop doing work if they do not receive Evergrande’s payment up front.
Sources:
1. SINA, July 13, 2022
https://finance.sina.com.cn/chanjing/cyxw/2022-07-13/doc-imizmscv1383585.shtml
2. Epoch Times, July 14, 2022
https://www.epochtimes.com/gb/22/7/14/n13781035.htm
3. NTDTV, July 16, 2022
https://www.ntdtv.com/gb/2in022/07/16/a103480739.html
China’s Second Quarter Economic Growth Slowed Sharply
Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that, the newly released official numbers showed Chinese GDP growth slowed to 0.4 percent in Q2. The economy grew at its slowest pace since it was first hit by the coronavirus outbreak two years ago, underscoring the impact on growth of the country’s strict measures to contain the pandemic. The GDP number is far below the 1.2 percent that economists had forecast. That means Beijing is likely to fall well short of its full-year growth target of around 5.5 percent. This will deliver another blow to a global economy battered by recession fears. However, China remains committed to its “dynamic zeroing” approach to eradicating COVID infections. With recent cases of the highly contagious BA.5 COVID variant in some cities, it appears more lock-downs are likely. To make matters worse, data has also shown no signs of improvement in the slump in investment in China’s real estate market, which has driven demand for goods and services that account for about 20 percent of China’s total GDP. It was reported very recently that households in dozens of cities have stopped paying their mortgages as property developers have failed to complete planned construction. The Chinese National Bureau of Statistics said, “The foundation for a sustained economic recovery is not solid.” Also, the Bureau warned of a “rising risk of stagflation” in the world economy. The Chinese stock market reacted flat to the GDP data. In the meantime, the heavy blow of Shanghai’s lockdown is also clearly seen in the data. The city’s economy contracted 13.7 percent year-over-year in the second quarter.
Source: NetEase, July 16, 2022
https://www.163.com/dy/article/HCAR8MPG0553GU6W.html