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COVID Is Back in China

A new wave of COVID, led by the XBB variant, is spreading in China. Zhong Nanshan (钟南山), a Chinese government endorsed COVID expert, stated this week that this wave – the second COVID pandemic in China – started in late April. He said the simulation model showed it will reach its peak by the end of June and by then each week there will be 65 million people who got infected. There were 5 million people infected each week in the U.S. during its worse time in 2022. Zhong mentioned this wave was expected.

Beijing has been low-key in reporting the second COVID wave, since it has been focusing on stabilizing its economy.

Source: Voice of America, May 26, 2023

Chinese Lung Transplant Doctor Revealed Organ Harvesting Secret

Chen Jingyu (陈静瑜) and her team published a paper on China’s lung transplantation in JAMA Network Open, a publication under the Journal of the American Medical Association  (JAMA). Chen’s Lung Transplant Center in Wuxi City, Jiangsu Province, claimed this as the first time that Chinese lung transplant clinical data has been accepted by a top international journal. Chen is known as “the number one doctor in China’s lung transplants.”

Chen excitedly posted the news on WeChat and Weibo on May 8. She stated, “For a long time because we used organs from death row prisoners, the foreign (medical community) boycotted the organ transplantation in China because of ethical issues… In 2015, China fully implemented organ donation from people under heart and brain death. The organs of citizens with brain death have become our only source for organs. There is much gratitude for the 6,000 or so cases of organ donations each year in our country, which have allowed us to go global with lung transplants.”

Chen’s statement admitted two things: One: the Chinese Communist Party (CCP) has long taken organs from death row inmates. Two: China is using organs from “brain-dead” people, not the “heart-brain-dead” people as the CCP ostensibly claimed.

Whether “brain-death” is considered real death is debatable in the medical community, since a “brain-dead” person can still keep breathing and has a heartbeat under medical equipment for a while. “Heart-brain-death” is fully dead.

China does not have a law on “brain-death.” Its definition of death in the Criminal Law is in line with the definition of “heart-brain-death.” Therefore, using organs from “brain-dead” people is illegal according to China’s own law.

China has been using the “Primary Brainstem Injury Impactor” device, invented by Wang Lijun, the former Vice Mayor and Public Security Chief of Chongqing. It is capable of precisely creating brainstem death without damaging other brain tissues or other organs. This invention was patented by China’s State Intellectual Property Office in 2012 under the patent number CN 202376254 U.

Source: Epoch Times, May 22, 2023

Leaked Meeting Minutes Showed Kunming City Investment Companies Are Running Out of Money

An article, said to be the minutes of an internal meeting of Kunming City Investment Companies, was widely spread on the Internet. The triggering event for the meeting was that Kunming Land Investment Company struggled to pay back a 200 million Yuan (US$28) debt which was due on May 19. Kunming is the capital city of Yunnan Province and is supposed to be the richest city in Yunnan.

A few highlights of the minutes are:

To help Kunming Land Investment Company make its payment, Kunming city gave 130 million Yuan from its fiscal budget. The investment company itself raised 35 million Yuan, and Kunming Land Reserve Investment Company provided 40 million.

Collectively, city investment companies in Kunming have 20 billion Yuan in debt due in the second half of this year. Kunming city does not have the money. The Yunnan Province government might have some money, but a Deputy Governor already stated that the province will not rescue every company.

The Deputy Major of Kunming led three chairmen of three investment companies, including Kunming Industry Investment Company, Kunming Urban Investment Company, and Dian Investment Company, to Shanghai on May 20 and 21. They were to ask Shanghai Urban Investment Company to transfer some money – Shanghai was tasked to provide Yunnan Province with financial support (several hundred billion Yuan each year), but it didn’t transfer money last year.

The Kunming city government has gathered all the money it can gather from its investment companies. If there is another debt crisis, the city has no money and no means but to issue new debt.

All loans (to Kunming city investment companies) that can be extended have already been extended. Principle and interest payments on fixed asset loans have all been deferred. Kunming Transportation Investment Company, Kunming Production Investment Company, Kunming Land Investment Company, Kunming Rail Transit, and Kunming Urban Investment Company have already accomplished this extension.

1. Pingcong website
2. Net Ease, May 23, 2023

China’s EV Battery Material Industry Unleashes Global Expansion

The Chinese company Yunnan Energy New Material (Semcorp), the world’s largest manufacturer of battery separators, is planning to launch its first overseas factory in Hungary and aims to increase its global market share to 50 percent by 2025. The company has dispatched approximately 100 employees to the Hungarian factory and is currently recruiting locally. The factory, with an investment of approximately €340 million, is expected to start production in 2023.

Battery separators are essential components in lithium-ion batteries that prevent short circuits and regulate the movement of lithium ions between the positive and negative electrodes during charging and discharging. Yunnan Energy New Material surpassed Japan’s Asahi Kasei in 2018 to become the global market leader in the separator market. By 2022, the company had achieved a market share of 37 percent.

Yunnan Energy New Material’s overall production capacity reached 7 billion square meters by the end of 2022. The company recently held a groundbreaking ceremony for its second-phase factory in Suzhou, Jiangsu Province, and plans gradually to establish and expand factories in China. By 2025, the production capacity is expected to reach 16 billion square meters, a 2.3-fold increase from the current level.

The company’s revenue for the 2022 fiscal year increased by 58 percent compared to the previous year, reaching ¥12.5 billion, and its net profit increased by 47 percent to ¥4 billion. Yunnan Energy New Material has experienced continuous revenue and profit growth since its listing on the Shenzhen Stock Exchange in 2016, driven by the rapid development of Chinese battery manufacturers such as CATL and BYD.

While the company faces competition from technologically advanced Japanese and South Korean enterprises, it maintains a cost advantage due to its overwhelming production scale. Its customers include major battery manufacturers such as Panasonic and Samsung. However, the company faces three major challenges in achieving further growth: technological gaps with Japanese and South Korean competitors, economic security concerns between China and the United States, and the risk of oversupply in the separator market.

Yunnan Energy New Material has approximately 500 researchers, including Chinese experts who previously worked for Asahi Kasei and Toray. While the company is catching up with leading Japanese and South Korean companies in terms of quality, battery industry experts believe that expanding market share in Europe will require higher technical capabilities. Entry into the vast US market also poses difficulties due to the potential exclusion of foreign companies from tax incentives under the Biden administration’s inflation reduction law.

In the global market for the four main lithium-ion battery materials (positive electrodes, negative electrodes, separators, and electrolytes), Chinese companies hold a market share of 74 to 88 percent, while Japanese companies’ presence is declining. The focus of the market share battle will shift to the next generation of batteries, including semi-solid-state and all-solid-state batteries, which are expected to improve battery performance and safety.

Overall, Yunnan Energy New Material is aggressively expanding its presence in the global market, but it faces challenges in terms of technology, economic security, and potential oversupply. The company aims to leverage its production scale and continue its research and development efforts to remain competitive in the evolving battery industry.

Source: Nikkei, May 24, 2023

Chinese Police Demand to Inspect Students’ Phones to Remove Chat Apps like Telegram

Chinese authorities have issued notifications in several regions, urging parents, under the pretext of “preventing online crimes,” to check their children’s mobile phones in order to remove “secret chat apps.”

According to reports from state media outlets like Guangming Daily Online, the official WeChat public account of the Nanjing Public Security Bureau stated on the 16th that secret chat apps, known for their strong encryption and features like “disappearing messages,” provide criminals with a convenient means to destroy evidence, making these apps a “gray area.”

Law enforcement agencies have expressed concern that criminals exploit secret chat apps to manipulate minors through deception, coaxing them into providing personal information and engaging in illegal activities. In some cases, individuals who assist in such online crimes can be charged with “assisting information network criminal activities,” which carries a penalty of up to three years’ imprisonment, detention, or a fine for serious offenses.

Apart from the Nanjing police, similar warnings have been issued by authorities in various locations, including Fuzhou City in Fujian Province, Dazhou City in Sichuan Province, Hainanzhou in Qinghai Province, Hezhou City in Guangxi Province, Tongliao City in Inner Mongolia, and Lanzhou City in Gansu Province.

Some notifications also urge teachers and parents to check if their children have installed such apps on their phones, warning that their children may be assisting overseas fraudsters in illegal activities. If any installed apps are discovered, it is advised to take the matter seriously, inform the child about the potential harm, and accompany them to the nearest public security agency to investigate whether they are involved in any illegal activities.

The mentioned problematic apps include WhatsApp, Telegram, and Twitter, which are commonly used overseas.

Source: Central News Agency (Taiwan), May 22, 2023

US Lawmakers: In the Face of the CCP’s Persecution, America and Its’Allies Should Support Falun Gong

The Chinese authorities’ recent persecution of Falun Gong practitioners has once again sparked public attention. On Tuesday, the U.S. Congress held a special briefing where lawmakers and scholars called for international support for religious freedom and solidarity with the Falun Gong group which the Chinese regime suppresses.

Since Jiang Zemin declared a crackdown on Falun Gong in 1999, the Chinese authorities’ persecution of this spiritual movement has continued to the present day. The “Monthly Report on Political Prisoners and Conscience Prisoners in Mainland China” published by the Chinese Human Rights Defenders in April this year pointed out that the brutal repression of Falun Gong by the Chinese Communist Party (CCP) is ongoing. Nevertheless, Falun Gong practitioners continue to resist without fear. Among the cases of sentencing collected in the report each month, Falun Gong practitioners constitute the largest group.

It is widely believed that the statistics from the Chinese civil society platforms are just the tip of the iceberg and the actual number of Falun Gong practitioners persecuted by the Chinese authorities may be much higher.

In response, the International Religious Freedom Caucus, a subsidiary group of the U.S. House of Representatives, held a briefing on Tuesday. Representative Gus Bilirakis of Florida condemned the long-term mistreatment of Falun Gong practitioners by the Chinese authorities, stating that the CCP has a long history of oppressing and eradicating specific religions and ethnicities. He said, “The Chinese regime seeks to eradicate their culture. Falun Gong is one of their main targets. Under the Chinese Communist Party, Falun Gong practitioners are charged, threatened, investigated, imprisoned, subjected to forced labor, abused, subjected to having their organs harvested, and they are even killed, solely because of their beliefs.”

Nina Shea, Director of the Center for Religious Freedom at the Hudson Institute, also spoke at the briefing, emphasizing the severity of the CCP’s atrocities against Falun Gong: “Of all the religious persecution in the world, the CCP’s crimes against Falun Gong are not often discussed, but they are extremely serious and even reach the level of religious genocide… The Chinese authorities are persecuting 70 to 100 million Falun Gong believers within China, arresting them, subjecting them to forced labor, torture, and abuse. Many believers disappear or die during their detention.”

Shea also pointed out that personnel from the illegal overseas police stations set up by the Chinese authorities in Manhattan, New York, have unlawfully oppressed and harassed Falun Gong practitioners within the United States.

During the briefing, Falun Gong practitioners who have been persecuted by the Chinese authorities as well as their family members shared their experiences. One participant, Simon Zhang, talked about his mother’s imprisonment and torture, highlighting the mistreatment and malnutrition she suffered. He described how his father, who is not a Falun Gong practitioner, was sentenced to eight years in prison on false charges of participating in Falun Gong after he returned to China from the United States.

In light of the persecution faced by Falun Gong practitioners, Representative Bilirakis called on the U.S. government and Congress to take action, stating that the United States and its allies should send a strong message in defense of basic human rights. He emphasized that no one should be intimidated, displaced from their homeland, imprisoned, or even murdered because of their beliefs. Simon Zhang urged the U.S. government to sanction the Chinese officials responsible for the persecution, noting that many Chinese police officers and officials fear being sanctioned as it would affect their children’s education and their ability to immigrate or buy or retain property in the United States.

It’s Getting Difficult to Enter the Ridesharing Business

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that large cities like Changsha, Sanya, Jinan, Suining, and Dongguan have successively released risk warning notices for the Uber-like ridesharing industry in China. The government has been reminding workers to enter cautiously. The ridesharing platforms and the number of ridesharing vehicles are growing rapidly and the market capacity is becoming saturated. In order to “maintain the market order” of the ridesharing industry, many local governments have decided to suspend the acceptance of related businesses registrations. Only a year ago, the ridesharing market was relatively free to enter. It was regarded by many people as one of the options for flexible employment opportunities. Now many cities have suspended the acceptance of related businesses. With the rapid growth of the unemployment rate, the industry as a whole is in a situation of more drivers and fewer orders, which will lead to a reduction in unit price and per capita order volume. This will result in a decline in driver income and an increase in working hours. Over time, service quality may fade away and friction between drivers and passengers will increase, among other issues. In the past two and half years, the number of ridesharing platforms that have obtained business licenses increased by 102, an increase of 49 percent. Also, the number of ridesharing driver licenses issued increased by 2.861 million, an increase of 112.4 percent. In the past 12 months, China added 1.014 million registered ridesharing drivers and 538,000 new ridesharing vehicles. However, the total number of orders nationwide has not increased significantly.

Source: Sina, May 18, 2023

Lianhe Zaobao: Unemployment Rate among Chinese Youth Rose Significantly

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to data from the National Bureau of Statistics of China, the unemployment rate among Chinese youth aged 16-24 rose to more than 20.4 percent in April, reaching a record high. The same number was 19.6 percent only one month ago. Chinese officials admitted frankly that structural problems in employment are still relatively prominent. The number of college graduates hit a new high this year, and the unemployment rate among young people remains high too. Stabilizing and expanding youth employment still “requires continued efforts.” Since 2020, the bottom of the youth unemployment rate curve has been rising. This also means that, excluding cyclical and structural factors, the overall youth unemployment rate has been consistently on the rise. A high unemployment rate just shows that there is a problem with the supply of jobs. The decline in job supply is essentially caused by economic growth that has not met expectations. In recent years, the number of college graduates has continued to rise. Coupled with the unemployed groups left over from the past few years, the number of college students seeking jobs will continue to increase in 2023. This “snowball” effect of employment pressure is obvious. At the same time, the mismatch of skills and preferences increases the difficulty of employment as well.

(1) Lianhe Zaobao, May 16, 2023

(2) Tencent News, May 16, 2023