Chinascope – Page 238

UNESCO Science Report 2021: 44 Percent of Increase in R&D Investment is from China

The United Nations Educational, Scientific and Cultural Organization (UNESCO) publishes its science report once every five years. The report for 2021 shows that the global average science expenditure, as a share of GDP, increased from 1.73 percent in 2014 to 1.79 percent in 2018.

The data show that China is the most aggressive of all countries in the world in increasing its science spending, with 44 percent of the incremental global R&D investment coming from China. In 2018, 24.5 percent of global R&D spending was from China, compared to 21.2 percent in 2014.

The report reads that China’s spending on science increased to 2.19 percent of GDP in 2018, compared with 2.03 percent in 2014. Meanwhile, in absolute terms, the U.S. still spends more on science than China, taking into account purchasing power parity, with $460.6 billion in the U.S. and $439 billion in China. Science spending as a share of U.S. GDP rose to 2.84 percent in 2018 from 2.72 percent in 2014. The country with the largest share of science spending in GDP is Germany, where this share increased to 3.09 percent in 2018 from 2.87 percent in 2014.

In addition, the report notes that the country with the most international patents registered is China (31.7 percent of the global total), followed by the U.S. (21.7 percent), Japan (20 percent) and the EU (13.9 percent).

Source: UNESCO
https://www.unesco.org/reports/science/2021/en/race4smarter-development

Briefings | | June 20, 2021 | Geo-Strategic Trend

China’s FDI in Europe Fell to a Ten Year Low

According to a joint report by the US-based Rhodium Group and the Mercator Center for China Studies (MERICS) in Berlin, China’s FDI in Europe continued to fall, to a 10-year low: Shrinking M&A activity meant the EU-27 and the United Kingdom saw a 45 percent decline in completed Chinese foreign direct investment (FDI) last year, down to EUR 6.5 billion from EUR 11.7 billion in 2019, taking investment in Europe to a 10-year low.

The UK saw Chinese investment plummet by 77 percent, although more than half of total Chinese investment in Europe went to the “Big Three” economies – Germany, the UK and France. Infrastructure, ICT and electronics were the top three sectors, attracting 51 percent of the total investment from China. Poland rose to become a popular destination, though inflows of EUR 815 million were largely concentrated on one acquisition.

Chinese FDI faces greater scrutiny by EU member states: The Covid-19 crisis prompted the EU to issue guidelines stepping up scrutiny of FDI in Europe’s critical assets. 14 EU member states, including Italy, France, Poland and Hungary, updated their FDI screening mechanisms last year. Member states have also moved to block several acquisitions by Chinese firms.

Headwinds against Chinese investment in Europe will grow in 2021: Chinese FDI activity into Europe continued to fall in the first quarter of 2021 and has remained weak elsewhere. Europe remains an attractive investment location. However, continued disruption from Covid-19, high barriers to outward capital flows in China and rising regulatory barriers to foreign investment in Europe have all contributed to low levels of Chinese investments. Deteriorating EU-China relations will create additional headwinds for Chinese investors going forward.

Source: Radio France International, June 16, 2021
https://rfi.my/7Uin.T

Briefings | | June 20, 2021 | Geo-Strategic Trend

Chinese CCTV: China Asked the U.S. to Drop “Completely” All Sanctions against Iran

Chinese Central Television (CCTV) recently reported that, not long ago, the Iran Nuclear Deal joint committee resumed the negotiations in Vienna. Wang Qun, the Chinese Representative to the negotiations and the Chinese Permanent Representative to the United Nations in Vienna, attended the meeting and explained the Chinese position. Wang said this new round of negotiations had dragged on for 11 weeks already, yet the topic of dropping the sanctions went nowhere. The United States should drop all of its single-sided sanctions against Iran, as well as all of the long-arm sanctions against other countries involved. The U.S. embargo on conventional weapons against Iran should also be discontinued. Since the U.S. has made the political choice of returning to the Iran Deal, the discontinuation of the sanctions should be comprehensive, clean and thorough on all fronts. China also asked all parties to engage deeply and to prevent future random departures. Wang called for “hard work” to reach the resumption of the Iran Nuclear Deal as early as possible.

Source: CCTV, June 13, 2021
http://m.news.cctv.com/2021/06/13/ARTI4RVhrry0ybVpTdxOy4TP210613.shtml

Briefings | | June 15, 2021 | Geo-Strategic Trend US-China Relations

China Enacted New Data Security Law

The Standing Committee of China’s National People’s Congress passed the Data Security Law (DSL) on June 10, elevating government regulation of private sector data. The new law, which will take effect on September 1, regulates the collection, use, processing and transmission of data and demonstrates Beijing’s growing ambition for data control.

The DSL provides that companies that violate the national core data management system, “endanger national sovereignty, security and development interests,” or illegally transfer “important national data” overseas will face fines of up to 10 million yuan ($1.6 million) and may be forced to close down.

The law applies a broad definition of “core data.” It refers to any data “related to national security, the lifeline of the national economy, important people’s livelihoods, vital public interests, and other concerns.”

DSL details how data collected by enterprises inside China should be exported, including operators of “critical information infrastructures,” energy, transportation, finance, public communication and other fields. The cross-border transfer of such data will be subject to the provisions of the Cybersecurity Law.

In the Cybersecurity Law enacted effective in 2017, Chinese regulators formally made data localization a prerequisite for foreign financial institutions attempting to gain a foothold in China. In the same year the U.S. tech giant Apple promised to store its customers’ cloud-based data in a company owned by the Chinese government, and to set up data centers in China.

On May 12, China also released “Certain Regulations on the Security Management of Automobile Data Security (Draft for Public Opinion),” which prohibits the transmission of driving data involving road traffic, vehicle location, images and other data outside China. Soon afterwards, Tesla announced that it would set up several data centers in China. On June 11, the second of the enactment of DSL, Tesla posted on its Weibo account, “(We) will strictly comply with the data security law.”

Chinese President Xi Jinping is increasingly inclined to tighten data control. Radio Free Asia cites sources familiar with internal discussions that Xi once said in a closed-door meeting, “Whoever controls the data has the initiative.”

Source: Radio Free Asia, June 14, 2021
https://www.rfa.org/mandarin/yataibaodao/jingmao/cm-06142021103254.html

Briefings | | June 15, 2021 | Information/Technology

U.S. Dollar Purchasing Power May Face a Permanent Fall

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, according to the data released by the United States Department of Labor, the U.S. May CPI (Consumer Price Index) arrived at a surprising five percent. Some analysts expressed the belief that, even if next May the U.S. CPI drops to four percent, the lost purchasing power might never recover. Analysts showed that the U.S. dollar purchasing power is declining at a pace never seen in the past 40 years. In the past three months, the U.S. dollar purchasing power declined by 2.4 percent, which was the largest three-month decline since 1982. Calculated at an annual rate, the three-month decline represents a 9.5 percent annually. In May, the U.S. market saw durable goods prices skyrocket year-over-year by 10.3 percent, especially for a 30 percent price increase for used cars. Housing costs, which represent one third of the CPI, increased by 2.2 percent in the past 12 months. The S&P CoreLogic Case-Shiller Home Price Index increased by 13.2 percent year-over-year, which is the highest increase since December 2005.

Source: Sina, June 12, 2021
https://finance.sina.com.cn/stock/hkstock/hkstocknews/2021-06-12/doc-ikqciyzi9271144.shtml

Briefings | | June 15, 2021 | Geo-Strategic Trend

China Times: Chile’s Capital City Closed Again Despite High Vaccination Rate

Major Taiwanese news network China Times recently reported that the authorities from the capital city of Chile, Santiago, announced the closing down of the whole capital region again. In the past two weeks, Chile saw a 17 percent daily increase in confirmed cases of Covid-19. The Santiago capital region, which holds half of the nation’s population, saw a daily increase of 25 percent. The capital region ICU capacity has reached 98 percent. In the meantime, Chile is currently ranked as having the fifth highest vaccination rate in the world. Around 75 percent of the nation’s 15 million population have received at least one shot of the vaccination and 58 percent of the total population have already completed all of the required doses. Chile’s vaccination rate is leading in the Americas. Among the total 23 million doses of vaccine used, 17.2 million were Chinese CoronaVac and 4.6 million were Pfizer-BioNTech. AstraZeneca and the Chinese CanSino were both less than 1 million doses. Medical experts explained that vaccines are not expected to be 100 percent effective and the multiple variants of the Covid-19 virus might also have played a role.

Source: China Times, June 11, 2021
https://www.chinatimes.com/realtimenews/20210611004269-260410?chdtv

Briefings | | June 15, 2021 | Geo-Strategic Trend

The Grim Truth about Chinese People’s Income

An online article that Sina published suggests that people’s lives in China may not look as glorious as what some of them are posting on wechat, including that they have luxury cars, lavish homes and a beach life.

According to data collected from Tianyancha, a data tech company in China, in the first quarter of 2020, 460,000 companies in China went bankrupt or had their business licenses suspended. Among them, 26,000 are companies in the export industry. According to statistics from a separate survey, there are 780 million people who are living in debt. Of those who have debt, 42 percent have payments that are overdue. That is, 300 million people are late in making the payments on their debts.

In 2020, 67.5 percent of China’s total population or 945 million people were active in the labor force. The reported average income in major cities was over 10,000 yuan (US$1,563) a month. In smaller cities, it was 6,000 yuan (US$938) a month. However, the numbers are deceiving because the number is an average with a small percentage of people being in a high-income bracket. The reality is that in 2020, the median salary in Shenzhen was 5199 yuan (US$813) per month. Shanghai was 6378 yuan (US$997), and Beijing was 6906 yuan (US$1,079). In other major cities, none of them had a median income over 5,000 (US$782) a month.

Here is another set of numbers.
1. For 11 million of those working in the body and foot massage business, their monthly income is 1500 yuan (US$234).
2. The most popular lipstick sold at pinduoduo.com costs 5 yuan (US$0.78). There are over 100,000 tubes of lipstick sold each month.
3. The official unemployment number is 6.2 percent. In other words, there are still 43.4 million people who are of working age who do not have a job. Hence, the officials have had to turn China into a street vendor economy and encourage people to become street vendors.

Source: Sina, May 31, 2021
https://k.sina.com.cn/article_1871596603_6f8e4c3b01901dkpm.html

Briefings | | June 15, 2021 | Economy/Resources

China’s Reaction to Trump’s Election Win

Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized