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Reference News: China and Japan Agreed to Establish a Defense Hotline

Reference News, a well-known branch of Xinhua News, recently reported that, on the December 27, Chinese State Councilor and Defense Minister Wei Fenghe held a video conference with the Japanese Defense Minister Nobuo Kishi. The call took about two hours, which exceeded the original scheduled time. The two defense ministers agreed to strengthen bilateral strategic communication and manage risks to prevent conflicts from escalating. Also, they agreed that a defense hotline will be established in 2022. The Japanese Cabinet recently approved a preliminary budget for 2022. The annual increase in the defense budget was 1.1 percent. It not only marks the tenth consecutive year of growth in Japan’s defense budget, but also breaks Japan’s long-standing rule of capping the increase in the defense budget at under one percent of the nation’s GDP. Singapore’s primary Chinese language newspaper Lianhe Zaobao also reported on this news and indicated that, during the call, Nobuo Kishi emphasized the importance of maintaining stability in the Taiwan Strait. This point was left out in the Reference News report.

Sources:
(1) Reference News, December 29, 2021
http://www.cankaoxiaoxi.com/china/20211229/2464431_2.shtml
(2) Lianhe Zaobao, December 28, 2021
https://www.zaobao.com.sg/realtime/world/story20211228-1227197

Global Times: China Mobile Forced to Terminate Canadian Operations

Global Times recently reported that CMLink, a subsidiary of China Mobile Canada, announced on December 28, that, at the request of the Canadian Federal Government, the company will cease its operations on January 5, 2022. Users can apply for refunds from the same day. This is yet another example of the Canadian government’s use of “national security” to suppress Chinese companies. Radio Free Asia (RFA) Chinese Edition also reported that China Mobile landed in Canada in 2015 and got popular among users who travel frequently  between Canada and the China/Hong Kong region. At the beginning of 2021, the Canadian government began to review China Mobile Canada based on national security considerations. It issued an order on August 9 instructing the company to divest itself of its parent company’s shares or terminate its Canadian operations. The company filed in court against the government’s order. It lost the case. Analysts expressed the belief that China Mobile Canada’s refusal to draw a clear line with the parent company confirmed the fact that the so-called Chinese overseas subsidiaries can operate independently is nonsense.

Sources:
(1) Global Times, December 30, 2021
https://world.huanqiu.com/article/46C1aJ3bt55
(2) RFA Chinese, December 29, 2021
https://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/lf2-12292021123434.html

China Reiterated “Real Estate is a Pillar Industry”

Shanghai-based Chinese financial news site East Money recently reported that, at the 2021-2022 China Economics Annual Conference held on December 11, Ning Jizhe, deputy director of the National Development and Reform Commission and director of the National Bureau of Statistics, once again set the tone and emphasized “real estate is a pillar industry.” The Last time the same policy tone was set was in 2017. Based on the Central Economic Work Conference’s requirement on economic stability in 2022, this new signal is clear: economic stability requires real estate market stability. Analysts also pointed out that, as the pillar industry of the domestic economy, real estate needs to continue playing the role of the economic stabilizer. The reason is that real estate industry accounts for a relatively high proportion of the national economy and there are many related industries. Objectively speaking, real estate must develop stably and healthily. Otherwise it will have a greater impact on the industrial economy, the national economy, and macroeconomics. Usually after such tone-setting, it is expected that a series of local policies supporting real estate will be introduced.

Source: East Money, December 20, 2021
https://caifuhao.eastmoney.com/news/20211220183703403330760

Xi’An’s Pandemic Lockdown Impacted Global Chip Supply

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that globalization demonstrated its power when a critical supply chain like the one for chip supply got impacted by lockdown policies in the Chinese city of Xi’An. Samsung issued an announcement on December 29 that its Xi’An manufacturing factories’ schedule had to be adjusted for the protection of the health of the employees due to the breakout of Covid in the city. Samsung has two large scale 3D NAND factories in Xi’An, which hold 42.3 percent of Samsung’s capacity, or 15.3 percent of the global supply. Samsung warned about the significant reduction of its output and stopped offering NAND quotes. Samsung is the world’s largest NAND Flash provider with a global market share of 34 percent. At the same time, Xi’An also has Micron’s DRAM memory packaging and testing plant. Micron is the world’s third largest DRAM chip manufacturer. The company said the factory is seeing manufacturing delays due to a lack of labor; as a result, new supply arrangements may be delayed accordingly. The Micron factory is currently running at 40 to 50 percent of its capacity. All these will cause the global short-term supply of storage semiconductors to face uncertainty.

Source: Sohu, December 30, 2021
https://www.sohu.com/a/513328179_351305

China’s Banks Closed 2,500 Outlets in 2021

According to the 21st Century Business Herald, bank outlets in China have been shrinking rapidly. Based on the China Banking and Insurance Regulatory Commission’s statistics, as of December 24, 2021, a total of 2,459 bank outlets of commercial banking institutions ceased operations this year. On December 24, 2021 alone, 29 commercial bank outlets closed their doors. The 21st Century Business Herald attributed the closures to the rapid development of digital technology.

Statistics from the China Banking Association show that, from 2018 to 2020, the number of outlets in the Chinese banking industry declined for three consecutive years, and the number of outlets that closed last year also approached 3,000. These closures include many outlets that had been in business for more than 30 years.

Semi-annual reports of banks also show signs of the decline of outlets. In the first half of 2021 alone, the four major state-owned commercial banks, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, and the Construction Bank, reduced 187 outlets or branches.

Behind the dramatic reduction in outlets comes the downsizing of bank staff. Comparing the data from the 2021 semi-annual and 2020 annual reports, the number of employees in the four major state-owned commercial banks decreased by 22,355 in the first half of 2021.

The  21st Century Business Herald said that, along with the outlet closures, the ability of banks to absorb deposits has declined significantly. At the same time, office rent, labor, and IT hardware maintenance have also risen due to competition, adversely impacting the profitability of bank branches.

Source: 21st Century Business Herald, December 28, 2021
http://www.21jingji.com/article/20211228/herald/e21b20a3c9a0ddd996fe746271c5ab13.html

 

Pandemic: Xi’an Locked Down

Recently Xi’an City in Shaanxi Province suffered a severe COVID-19 outbreak. On December 28, the authorities reported 175 infection cases in the city, though the actual numbers are unknown as the Chinese Communist Party (CCP) is known for hiding COVID information.

As of December 30, the city had been locked down for eight days. The streets are empty and people are not allowed to go out. This is exactly like what had happened in Wuhan in 2020. Many people reported that they are running out of food,  though the government promised there will be ample supplies. In reality, however, they can’t get online to place orders or they have been able to place orders but there have been no deliveries.

People’s Daily reported on December 28, that the authorities sent over 150 military medical staff members to Xi’an and many of them had gone to Wuhan before during its lockdown.

Related postings on Chinascope:

Source: SET News, December 27, 2021
https://tw.news.yahoo.com/西安封城市民爆要斷糧了-解放軍進駐-024527255.html

U.S. Mainstream Media Silent on Their Interview of China’s Ambassador to the U.S.

Radio France Internationale reported on December 28 that Qin Gang, the Chinese Ambassador to the United States, recently accepted a joint interview with some mainstream media in the United States. However, in the past few days, there has not been a single media report in the United States on the interview.

According to the official website of the Chinese Embassy in the United States, on  December 20, Ambassador Qin Gang accepted a joint interview with the editors-in-chief and senior reporters of many mainstream media in Washington. The Bloomberg Innovation Economic Forum organized the interview in English in the form of a “fireside chat.”

The Chinese Embassy posted the interview content on its homepage and translated it into Chinese. The article emphasized that “all the content may be reported, and used as a background.” The Chinese media also highlighted Qin Gang’s remarks on Taiwan and how he discussed the United States provoking China on the Taiwan issue.

While the media inside China widely reported the interview, they questioned why none of the U.S. mainstream media reported the interview, including those who participated in the interview. “Why did they collectively lose their voice?” At least one commentator thought that the U.S. media did not want merely to reiterate Qin Gang’s propaganda.

Sources:

Radio France Internationale, December 28, 2021
https://tinyurl.com/2p8wa9t2

ifeng.com, December 29, 2021
https://i.ifeng.com/c/8CNA4TZ5PKR

Chinese Embassy to the United States, December 24, 2021
http://www.china-embassy.org/dshd/202112/t20211224_10475267.htm

 

Number of Auctioned Houses Reached Four Times the Level in 2015

An article on the Zhihu site reported that, according to the China Securities Journal, the number of court auctioned houses in 2021 has increased substantially. In 2015 it was only 500,000. In 2021 the number reached 2 million or around four  times as much.

In Beijing alone, in the first eleven months of this year, 4,909 houses were auctioned. The number was around 500 in the previous year. The sales price averaged 79 percent of the “normal” price.

The author commented that this is not a good sign since the owners are unable to make their payments on the mortgages and thus the banks have had the courts take over the houses by force in order to sell them.

Source: Zhihu, December 30, 2021
https://zhuanlan.zhihu.com/p/340431287