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China’s Reaction to Trump’s Election Win

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Chinese Property Developer Fantasia Owes US$149 million In debt and May Face Liquidation

Fantasia Holdings Group, the Chinese developer founded by the niece of a former Chinese vice-president Zeng Qinghong, might face liquidation after it received a wind-up petition from creditors for failing to repay an outstanding loan of US$149 million.

A winding-up petition is the legal mechanism by which a business creditor can apply to the court to wind-up a company for non payment of debts. It can result in compulsory liquidation.

On May 26, Shenzhen-based Fantasia received a wind-up petition that Flower SPV 4 Limited had filed. The filing had been submitted to the Hong Kong stock exchange on Monday. The petition was filed by the creditor on May 24 in the Grand Court of the Cayman Islands, where Fantasia is registered.

Trading in shares was suspended on April 1 following Fantasia’s previous financial difficulties. The company said that its stock trading will remain suspended until further notice.

Zeng Qinghong was the right-hand man of China’s former president Jiang Zemin. The story of Fantasia’s financial difficulties was widely reported by mainland Chinese media.

Source: Central News Agency (Taiwan), May 30, 2022
https://www.cna.com.tw/news/acn/202205300094.aspx

Briefings | | |   Economy/Resources

China’s Coldest Labor Market: College Graduates Break 10 million for the First Time

2022 will see 10.76 million college graduates in China, an increase of 1.67 million over last year. This will be the first time in history for the number to break the 10 million mark. This record number, however, is facing a difficult economic situation due to the epidemic.

In 2020, China’s economy was hit hard by the first wave of the epidemic. In the first quarter, China’s GDP fell 6.8 percent year-over-year.  This was not only the lowest since China began publishing quarterly GDP data in 1992. It was also the first time that quarterly growth was negative.

Two years ago, the city of Wuhan was locked down for 76 days. This year. however, Shanghai has been put on a pause for more than 60 days. In terms of economic importance, the two cities are not on the same scale. Shanghai is not only China’s center for manufacturing and foreign trade. It is also the country’s financial hub. The economic devastation brought by the two-month lockdown will be far greater than it was in Wuhan.

Data released by China’s National Bureau of Statistics on May 16 showed that the national urban unemployment rate rose 0.3 percentage points to 6.1 percent in April, a new high since March 2020. Most notably, the unemployment rate for the 16-24 year old population was recorded at 18.2 percent, the highest since that data became available.

Source: BBC Chinese, May 31, 2022
https://www.bbc.com/zhongwen/simp/chinese-news-61632336

Briefings | | |   Economy/Resources

LTN: Pompeo Said Blinken’s Speech Underestimated the China Threat: the CCP is Evil

Major Taiwanese news network Liberty Times Network (LTN) recently reported that U.S. Secretary of State Antony Blinken delivered a policy speech on China on May 26 in which he criticized China for its increasing threats to Taiwan, emphasizing that the U.S. policy toward Taiwan will remain unchanged. In addition, he also said that the United States avoids seeking conflict or creating a new Cold War situation. Former U.S. Secretary of State Mike Pompeo said bluntly that Blinken’s speech was like diplomatic rhetoric and underestimated the threat of the Chinese Communist Party (CCP). Pompeo said in an interview that the Chinese Communist Party intends to cause damage to the United States, ranging from the Chinese military, cyber-attacks and economic plunder. He did not feel that Blinken’s speech made the core point, which is that the CCP is evil. If it is only seen as related to the international order, then Chinese leader Xi Jinping will recognize the U.S. signal as a green light. Some observers have expressed the belief that a cold war is real and that China wants it to get worse. America needs to wake up from the fog of peace and confront the looming threat from China.

Source: LTN, May 28, 2022
https://news.ltn.com.tw/news/world/breakingnews/3941821

Briefings | | |   US-China Relations

Airbnb Shutting Down Its China Domestic Business

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that Airbnb will officially close its domestic business in China. Nearly 150,000 listings and experienced businesses in China will be taken offline completely. Only the outbound international business will be retained. This is expected to be completed this summer. Airbnb’s future presence in China will be composed mainly of engineers involved in the research and development of global products and technology projects, as well as the business and customer service teams responsible for Airbnb’s Chinese users’ outbound international travel. The total staffing level will be around several hundred people. In recent years, China’s domestic listings and experience service business has accounted for less than one percent of Airbnb’s global revenue. Airbnb set up a small-scale team in China in 2014. It officially launched its business in the Chinese market in 2015. The Covid pandemic did disruptive damage to the entire travel industry, including online short-term rentals. Airbnb is essentially the last large-scale U.S. Internet business that will have left China.

Source: Sina, May 24, 2022
http://finance.sina.com.cn/tech/csj/2022-05-24/doc-imizirau4437577.shtml

Briefings | | |   Information/Technology US-China Relations

India Wants to Be the Pharmacy of the World

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that, according to Indian government data, India is now the world’s third-largest pharmaceutical manufacturer based on production rankings. At the same time, India is also one of the countries with the lowest pharmaceutical manufacturing costs in the world. As the world’s number one generic drug manufacturer, India’s share of generic drug exports accounts for 20 to 22 percent of the world’s total. In the U.S., one third of the tablets are made in India, while in the U.K., a quarter of the tablets are produced in India. However, before becoming the pharmacy of the world, India still needs to remove its dependence on China. India has embarked on an ambitious plan to reduce its dependence on China for key ingredients in its pharmaceutical industry. India wants to be self-sufficient in its journey to become the pharmacy of the world. Since the outbreak of COVID, India has become a key player in the world’s anti-epidemic action with its pharmaceutical production capacity. According to the Indian government, as of May 9, India has provided more than 201 million doses of COVID-19 vaccine to about 100 countries in Southeast Asia, South America, Europe, Africa and the Middle East through government projects and the COVID-19 Vaccine Access Facilities (COVAX). India leads the world in drug production, yet relies heavily on China for key active pharmaceutical ingredients (APIs). For cost reasons, about 68 percent of India’s APIs are imported from China. In terms of life-saving antibiotics such as penicillin, cephalosporins and azithromycin, India’s dependency on China is even as high as 90 percent. According to a policy called the “production linked incentive scheme” launched by the Indian government two years ago, starting in March this year, 32 factories across India have been producing 35 APIs. The plan aims to incentivize companies in various industries in India to boost their domestic manufacturing output by $520 billion by 2025. India’s pharmaceutical industry sees weaning its dependence on China as a priority. Blind “offshoring” has now become “friendshoring.” One country today will outsource operations to other countries with a similar political system and with whom it has historically had good relations.

Source: NetEase, May 27, 2022
https://www.163.com/dy/article/H8DIAAMQ051481US.html

Briefings | | |   Geo-Strategic Trend

The United States Clarified that China Has Long Misrepresented the U.S.’ “One China” Policy

Ned Price, a Spokesperson for the U.S. State Department, stated, on his official Twitter account on May 20, that the United States stated openly that China has long been misrepresenting the U.S. “One China Policy.”

“The PRC continues publicly to misrepresent U.S. policy. The United States does not subscribe to the PRC’s “one China principle,” We remain committed to our longstanding, bipartisan one China policy, guided by the Taiwan Relations Act, the Three Joint Communiques, and the Six Assurances.”

On its official Twitter account on May 22, the U.S. Embassy to China published  the Chinese translation of Ned Price’s statement.

Polygraph.Info, Voice of America’s lie reporting website, explained how China misrepresented the U.S. “One China” Policy:

The 1972 Shanghai Communiqué issued at the end of then U.S. President Richard Nixon’s historic visit to China stated:

“[T]he United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States does not challenge that position.”

The U.S. said it “acknowledges” the Chinese position but did not endorse it. Using similar language, a 1979 normalization communiqué establishing U.S. – China diplomatic ties also did not state affirmatively that the U.S. recognized Taiwan as part of China.

However, the Chinese side used the verb “recognize” (承认) instead of “acknowledge” (认识) in the Chinese text of the 1979 joint communiqué. The Beijing has since kept saying the United States recognizes “one China.” The Chinese text did stay faithful to the verb “acknowledge” in the 1972 Shanghai communiqué.

Sources:
1. Twitter, May 22, 2022


2. VOA, October 11, 2021
https://www.polygraph.info/a/factcheck-one-china-policy-principle/31499875.html

Briefings | | |   US-China Relations

Beijing Tries to Strengthen Its Ties with the Pacific Islands

China’s Foreign Ministry spokesman Wang Wenbin announced on May 24 that State Councilor and Foreign Minister Wang Yi will pay official visits to the Solomon Islands, Kiribati, Samoa, Fiji, Tonga, Vanuatu, Papua New Guinea, and Timor-Leste.  The visits will take place from May 26 to June 4. He will pay a “cloud visit” to the Federated States of Micronesia, hold a video meeting with the Prime Minister and Foreign Minister of the Cook Islands and the Prime Minister and Foreign Minister of Niue, and host the second China-Pacific Island Countries Foreign Ministers’ Meeting in Fiji.

China has recently disclosed that it signed a security treaty with the Solomon Islands, which includes police training,  a possible military exchange and setting up a naval base in the Solomon Islands for the People’s Liberation Army.

An intelligence officer for a U.S. ally said that Beijing is negotiating with Kiribati and at least one other Pacific island on a treaty similar to the Solomon Islands’ treaty.

Sources:
1. People’s Daily, May 26, 2022
http://cpc.people.com.cn/n1/2022/0526/c64094-32430646.html
2. Radio France International, May 21, 2022
https://www.rfi.fr/cn/国际/20220521-中国寻求与基里巴斯签协议-美澳担忧

Briefings | | |   Geo-Strategic Trend