On August 20, 2021, the Standing Committee of China’s National People’s Congress adjourned its meeting. Standing Committee Member Tan Yaozong from Hong Kong stated to Hong Kong 01 that the Standing Committee did not vote on the draft for incorporating the China Anti-Foreign Sanctions Law (June 210, 2021) into Annex III of the Basic Law of the Hong Kong Special Administrative Region (HKSAR) of China.  

The Basic Law is a national law of China that serves as the de facto Hong Kong constitution. With 160 articles and three annexes, the Basic Law was enacted under the Constitution of China to implement the Sino-British Joint Declaration and went into effect July 1, 1997, in Hong Kong. An affirmative vote by the Standing Committee on August 20, 2021, would have extended China’s Anti-Foreign Sanction Law to Hong Kong by adding it as Annex III of the Basic Law.

According to Tan, the Standing Committee deliberated on the proposal to add Annex III to the Basic Law, but the chairman’s meeting decided not to vote for the time being but rather, to continue to study related issues.

A few days earlier, Tan said that on August 20, 2021, the Standing Committee would discuss and consider including the Anti-Foreign Sanctions Law in Annex III of the Basic Law. Tan Yaozong expressed that the draft to be discussed was relatively simple. It only required that the Anti-Foreign Sanctions Law be included in Annex III of the Basic Law and that the SAR government establishes relevant systems. It would not discuss specific implementation details in Hong Kong and has not set a legislative timetable for Hong Kong.

On June 10, 2021, the 29th meeting of the Standing Committee of the 13th National People’s Congress passed the Anti-Foreign Sanctions Law. The Chinese Communist Party intends the law to oppose foreign sanctions against China, counter foreign discriminatory measures, and respond to the “long-arm jurisdiction” of the United States.

According to the Anti-Foreign Sanctions Law, China’s State Council may deal with measures such as denial of visa, denial of entry, deportation, seizure and freezing of property in China, and prohibiting or restricting doing business in China.

Hong Kong economist Luo Jiacong said that more than 200 banks are currently in Hong Kong, and more than 80 percent of them are foreign banks. If China extends the Anti-Foreign Sanctions Law to Hong Kong, it is estimated that foreign banks will choose to leave Hong Kong because they will not give up their U.S. dollar business. 

Analysts warned that the surprising decision on August 20 to defer extending the Anti-Foreign Sanctions Law to Hong Kong does not signal any retreat or U-turn on retaliatory steps against the West. Instead, the CCP may opt for a more tailored retaliatory approach in order not to jeopardize Hong Kong’s financial hub.

Sources:

1.) Hong Kong 01, August 20, 2021.
https://tinyurl.com/4s3n9yvm

2.) Radio Free Asia, August 13, 2021
https://www.rfa.org/mandarin/yataibaodao/gangtai/ec-08132021082231.html

3.) Anti-Foreign Sanctions Law of the People’s Republic of China, June 10, 2021
http://www.npc.gov.cn/npc/c30834/202106/d4a714d5813c4ad2ac54a5f0f78a5270.shtml

According to China Economic Net, the Ministry of Industry and Information Technology (MIIT) of China is continuing its efforts to clean up and rectify private tech companies. MIIT announced that 43 APPs still have problems of rectification not being thorough, using technical means to counter rectification, and the same problem not being rectified consistently in different regions.

China Economic Network reporters found that many mainstream apps such as WeChat, Aichiyi, Ctrip, have an issue of where to go are on the list. Among them, tech company Tencent alone has four apps involved – Tencent video, enterprise WeChat, Tencent map and WeChat. The problems of 43 APPS are still in “violation of illegal use of call contacts and geographical location permissions,” “harassing users with open screen pop-ups,” and other persistent APP violations. MIIT demanded that rectification of the APPs listed be completed by August 25.

Source: China Economic Net, August 18, 2021
http://www.ce.cn/cysc/tech/gd2012/202108/18/t20210818_36821191.shtml

On August 17, Xi Jinping, in his keynote speech at the tenth meeting of the Central Finance and Economics Committee, highlighted the need to redistribute wealth and strengthen the “regulation and management” of high-income earners.

After cracking down on Chinese technology giants, financial companies, and the after-school training industry, the CCP is now targeting “high-income earners.”

According to the People’s Daily, Xi told the CCP leadership that there must be a mechanism to redistribute wealth, to promote “social equality,” to establish basic system arrangements for the coordination of primary distribution, redistribution, and third-time distribution; to intensify efforts and to improve the accuracy in taxation, social security, transfer payments,  and related areas.;  …  to rationally regulate high income; ban illegal income; … and to promote social equality.”

It is necessary to “strengthen the regulation and adjustment of high incomes, …, rationally regulate excessively high incomes, and encourage high-income groups and enterprises to return more to the society. We must clean up and standardize unreasonable income, rectify the order of income distribution, and resolutely ban illegal income.”

Xi Jinping’s “common prosperity” is regarded as the key for the CCP to maintain its power. “The meeting emphasized that common prosperity is the prosperity of all people, ‘not the prosperity of a few people.’ We must take the promotion of common prosperity for all the people as the focal point for seeking happiness for the people, and constantly consolidate the foundation of the Party’s long-term governance.”

At this meeting, the CCP did not provide specifics on the criteria for “high-income earners.” Xi Jinping’s focus on wealth redistribution is closely related to the broader economic goals of the CCP. In recent months, in the name of curbing financial risks, protecting the economy, and fighting corruption, the CCP has issued a number of regulations and directives against industries such as technology, finance, and education. Xi Jinping’s redistributing wealth and realizing “common prosperity” is believed to be behind the CCP’s latest regulatory crackdown on these industries.

Source: People’s Daily, August 18, 2021.
http://jhsjk.people.cn/article/32197470?isindex=1

On August 14, China’s Ministry of Education approved the termination of 286 China-foreign cooperative education institutions and programs at the undergraduate level and above.

The list includes the London Metropolitan University, New York University, and other well-known universities that have been cooperating with China in running schools. The majority of the closed projects involve disciplines of engineering, economics, language, art, and the social sciences. These include undergraduate education programs in information engineering, automation, and other areas that were jointly organized by the Harbin University of Science and Technology;  the London Metropolitan University; and master’s degree programs in China Social Service Management jointly organized by the East China University of Science and Technology, the Hong Kong Polytechnic University, and others.

Late last month, China published a plethora of regulations in a sweeping overhaul that bans companies that teach the school curriculum from making a profit, raising capital, or going public.

Companies that teach school subjects can no longer accept foreign investments.  In addition, publicly listed firms will no longer be allowed to raise capital in any stock markets to invest in businesses that teach classroom subjects. Outright acquisitions are now off-limits.  Vacation and weekend tutoring related to the school syllabus are also forbidden.

Sources:

Sina.com, August 11, 2021
https://news.sina.com.cn/o/2021-08-11/doc-ikqcfncc2289112.shtml

Sina.com, July 25, 2021
https://finance.sina.com.cn/china/2021-07-25/doc-ikqciyzk7469579.shtml