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China’s Reaction to Trump’s Election Win

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

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

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

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RFA Chinese: Around 1,700 Japanese Applied for Government Aid to Leave China

Radio Free Asia (RFA) Chinese Edition recently reported that the Japanese government’s aid program to assist Japanese companies to leave China is gaining in popularity. The first batch of approved applicants consisted of nearly 90 companies. However, by the end of July, the program received almost 1,700 applications in the second batch. It appears Japan is moving its industrial supply chain out of China. The Japanese government added a supplemental budget of US$2.07 billion to its 2020 budget in order to sponsor Japanese manufacturers moving their supply chain out of China and back to Japan or somewhere else. The second batch of applications totaled US$16.57 billion. Experts expressed the belief that, right now, the CCP virus is serving as a wake-up call for many governments around the globe that restructuring their industrial supply chain is an urgent task. On the other hand, the steady increase in the cost of investing in China is also emerging as an important factor motivating companies to consider leaving China. According to a study that the Japan External Trade Organization conducted, China’s cost index was 80 in 2019, Vietnam was 74, and baseline Japan was 100.

Source: RFA Chinese, September 14, 2020
https://www.rfa.org/mandarin/yataibaodao/jingmao/ql2-09142020062444.html

Briefings | | |   Economy/Resources Geo-Strategic Trend

Canada Gave up on Free Trade Agreement Negotiation with China

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that the Canadian Minister of Foreign Affairs, François-Philippe Champagne, commented in an interview with the Globe and Mail on Canada’s Free Trade Agreement with China. He concluded that there is no value in continuing the negotiation and so Canada has given up on the process. The negotiation started four years ago when Prime Minister Justin Trudeau visited China. Champagne expressed the belief that the current political conditions are not suitable for further discussions. Prime Minister Trudeau has been under heavy domestic criticism for giving up too many of Canada’s principles in exchange for China’s business opportunities. Earlier, Champagne described China’s style of pushing foreign relationships as “arbitrary” and “coercive.” (Editor’s note: Sina’s report did not mention that, in the same interview with the Globe and Mail, Champagne stated Canada’s first priority is to bring home Michael Kovrig and Michael Spavor. In in June, in retaliation for Canada’s detention of Huawei’s CFO Meng Wanzhou, the Chinese Communists charged the two Michaels with espionage.)

Source: Sina, September 19, 2020
https://news.sina.cn/2020-09-19/detail-iivhvpwy7616303.d.html

Briefings | | |   Geo-Strategic Trend

CCP to Strengthen United Front Work in Private Companies

The CCP General Office recently introduced a document entitled, “Opinions on Strengthening the United Front Work in the Private Economy in the New Era.” It is the first document on the united front work of the private economy that the CCP has issued since 1978, the start of China’s reform and opening up. It shows that private enterprises are playing a more decisive role in the overall economy. It also shows that, in dealing with the trade conflicts between China and the U.S., the CCP feels the urge to integrate the power of private enterprises with the imposition of the party’s management and control over them.

According to the document, the private economy is China’s “important economic foundation.” Private entrepreneurs are “our own people” and have always been “an important force that the party must unite and rely on in order to serve the long-term in exercising governance.” In the document, it asked that the private entrepreneurs always be politically sensitive and continuously be guided to increase their “political, ideological, and emotional identity” with the party. Meanwhile, the party must actively recruit party members among private entrepreneurs, build and manage a database of talent pools, and develop those private entrepreneurs who will follow the party without deviation. Private entrepreneurs are encouraged to participate in the national strategic discussions and the belt and road initiatives but they need to protect the country’s national interests consciously. It requires that the Private entrepreneurs shall not engage in activities including forums, seminars, lecture halls, salons, and other activities without advanced registration.

For 40 years since the start of China’s economic reform and opening up, the many startup companies in China, such as those that follow, have brought it to the world’s stage: Huawei, Bytedance, Tencent, Alibaba and others. Private enterprises in China contribute over 50 percent of business taxes, make 60 percent of investments, own 70 percent of the patents, hire 80 percent of the workforce and account for 90 percent of the total companies in China.

Source: BBC Chinese, September 16, 2020
https://www.bbc.com/zhongwen/simp/chinese-news-54175379

Briefings | | |   Government/Politics

Taiwan Kuomintang Cancels Visit to the “Straits Forum” over CCTV Host’s Statement

The Kuomintang originally planned that Wang Jin-pyng, the former legislator, would lead a delegation to Xiamen of Fujian province to participate in the Straits Forum on September 16. However, Li Hong, a CCTV host of “Across the Strait” commented that Wang’s visit to the mainland was “to seek reconciliation.” The statement triggered criticism of the Kuomintang in Taiwan. Johnny Chiang, the Kuomintang chairman demanded an apology from Li Hong. Although Li later on responded that she meant that the visit was to seek “peace” not “reconciliation,” [Editor’s note: “和” in Chinese carries multiple meanings including reconciliation, harmony or peace] she was unable to quell all parties’ doubts. On September 14, the Kuomintang announced that, for the first time since the Straits Forum started 12 years ago, it would not participate in the “Straits Forum” as a political party; however, each party member could decide for himself whether to participate.

China has hosted the “Straits Forum” since 2009. In the past, the chairman of the National Committee of the Political Consultative Conference would attend the opening ceremony. For the past 11 years, the Kuomintang sent a vice chairman to lead a delegation. Hung Hsiu-chu personally led a delegation when she was the Chairman. This year Johnny Chiang was elected the Chairman of the party without a Vice Chairman so Wang Jin-pyng, former legislative member, was selected to attend the “Straits Forum.”

Source: Radio Free Asia, September 14, 2020
https://www.rfa.org/mandarin/yataibaodao/gangtai/hx-09142020085643.html

Briefings | | |   Geo-Strategic Trend

Chinese Investments in Australia Plummeted in 2019

The Australian National University’s (ANU) Chinese Investment in Australia (CHIIA) database reported the total investments from China in 2019 were 2.5 billion Australian dollars (US$ 1.8 billion). This was about half of the 4.8 billion Australian dollars (US$ 3.5 billion) invested in 2018.

The inflow of Chinese money reached its peak of nearly 16 billion Australian dollars (US$ 11.7 billion) in 2016, and has since fallen sharply. Most industries saw dramatic declines in 2019, including real estate, mining and manufacturing. Investment in agriculture declined, but the construction and financial industries rebounded slightly.

ANU professor Peter Drysdale, head of the CHIIA database project, reckoned that there were a multitude of factors behind the plunge.

As Chinese companies are increasingly focusing on developing markets and Beijing is trying to prevent capital outflows, in 2019, foreign direct investment from China fell by nearly 10 percent globally. The decline in Australia was even more severe, partly because of the end of the mining boom (which brought a lot of money from China).

Professor Drysdale added that the government’s new regulatory barriers have also pushed away Chinese investors. In recent years, China’s investments in Australia have attracted heated political debates. The Australian Federal Government has generally strengthened its review of foreign investment. Earlier this year, the Treasurer of Australia, Josh Frydenberg, introduced new restrictions to prevent overseas companies from targeting troubled Australian assets due to the economic impact of the coronavirus pandemic.

The largest transaction that CHIIA recorded in 2019 was Mengniu Dairy’s acquisition of Bellamy, an Australian infant formula manufacturer, at 1.5 billion Australian dollars (US$1.1 billion). Last month, Frydenberg blocked Mengniu’s acquisition of the Australian company Lion Dairy and Drinks, claiming the deal was “contrary to their national interest.”

The political relationship between Australia and China has also turned increasingly hostile. The two countries have seen a series of issues, including foreign infiltration, Australian journalists harassed in China, cyber espionage, trade, Hong Kong issues and the COVID-19 outbreak. Professor Drysdale expected a further decline in Chinese investments in Australia in 2020.

Source: Australian Broadcasting Company Chinese, September 14, 2020
https://www.abc.net.au/chinese/2020-09-14/chinese-investment-in-au-takes-nosedive/12661168

Briefings | | |   Geo-Strategic Trend

Infection Count: How Severe Is the Infection in Ruili City?

After September 8, when the Chinese Communist Party (CCP) held a commendation conference to declare victory over the novel coronavirus, Ruili, a southern city in Yunan Province, bordering Myanmar, reported cases of the coronavirus infection.

The authorities only announced two infection cases, but it declared that it would conduct nucleic acid testing on all residents in Ruili which is about 210,000 people. Several of its actions, including locking down the city, building thousands of hospital beds, and moving in over 1,000 medical staff from other cities, made people wonder whether the real situation was much worse than what the government reported.

#1: China reported 2 cases on September 12 and 13, claiming the patients were from Myanmar and had illegally entered China. On September 14, the authorities then locked down the city of Ruili. The official WeChat account of the Yunan Provincial government reported that the government learned the mobile hospital concept from Wuhan and had set up several thousand patient beds in a large indoor facility, ready for patients to move in. On Twitter, Chinese netizens also posted pictures of Zhong Nanshan, a high-profile doctor on the coronavirus efforts, who showed up in Yunan. (New Talk)

#2: China sent eight medical teams, with a total of 632 medical staff members, from other cities and provinces, to Ruili. In addition, the Dehong Autonomous Prefecture, Yunan Province, sent another 564 medical staff members to Ruili to support nucleic acid testing. (Xinhua)

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Hot Topics | | |   Social Stability

Hiding Information: The CCP Held Commendation Conference about Fighting the Novel Coronavirus

The Chinese Communist Party (CCP) has declared victory over the novel coronavirus. On September 8, 2020, Xi Jinping hosted a Commendation Conference on Fighting against the Novel Coronavirus. At the ceremony, Xi gave a near-10,000 word speech, but he did not mention the truth about the pandemic’s origin, its development, or the infection count in China.

Radio France International reported that people were questioning why the CCP held such a celebration at this time since the pandemic is still spreading in the world. They wondered whether it is trying to cover up something or to make people forget something. Agence France-Presse pointed out that the CCP is trying to rewrite the Wuhan Pandemic story.

Xi gave medals to the “heroes” including Zhong Nanshan, who, on January 20, told the public that the virus can be transmitted from person to person (Editor’s Note: there is much evidence that the CCP knew about the person-to-person transmission much earlier but did not release the information to the public until Zhong’s staged statement), and Chen Wei, a People’s Liberation Army general in charge of developing a vaccine.

However, on the Chinese social media, the public frequently discussed Dr. Li Wenliang who Xi didn’t mention at the award ceremony. Dr. Li is the whistle blower who mentioned the coronavirus on social media in early January. The CCP then reprimanded him and he later died after developing the infection when treating patients who had the virus.

Another highly discussed person, who is a hero in the eyes of the public  but who Xi also skipped is Dr. Zhang Wenhong. Dr. Zhang is the lead doctor on coronavirus prevention efforts in Shanghai. He rejected Zhong Nanshan’s claim that the virus might have originated outside of China. He said the facts showed that Wuhan is the first city to have reported the cases and if the virus was coming from overseas, it would spread in several cities in China simultaneously, not just in Wuhan. He also answered the question whether the China-made anti-virus vaccine is better or the imported vaccine will be when the vaccines are available. He said, “You can easily tell if a domestic car is better or an imported car is (Chinese all know imported cars are much better). Why can’t you tell when it comes to a vaccine?”

On social media, people were also asking where the citizens were who went to hospitals to report the true situation (that the official media were not reporting) and then got disappeared.

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Hot Topics | | |   Social Stability

87 Chinese Cities Showed “Urban Expansion and Population Shrinkage” Between 2014 and 2018

According to the statistics from the Urban and Rural Statistics Yearbook that the Ministry of Housing and Urban-Rural Development issued, between 2014 and 2018, 451 cities had “urban expansion and population growth,” 87 cities had “urban expansion and population shrinkage,” 18 cities had “urban contraction and population growth,” and 13 cities had “urban contraction and population shrinkage.”

In 2018, the total newly constructed urban area was 58,456 square kilometers, an increase of 53.4 percent over 2009, while the permanent urban population was 510 million, only 35.8 percent higher than ten years ago. This indicated a phenomenon in which “land urbanization was faster than population urbanization.”

In comparing the data between 2018 and 2014, one can find that the number of cities with urban population reduction is twice the number of cities with urban area reduction. 122 cities experienced a decrease in urban permanent population during those five years; five cities showed little change; and 507 cities maintained a positive population growth. Among them, Longjing City in Jilin province, Jieyang City in Guangdong province and Honghu City in Hubei province are the only three cities whose population has decreased by more than 50 percent.

Most of those with a declining population are the third and fourth tier cities. Two main types of cities exhibited more urban population losses: cities in northeast China where young people are leaving en masse; and the smaller cities in the Pearl River Delta, whose population is beimg absorbed by the two top-tier cities of Guangzhou and Shenzhen.

Source: 21st Century Business Herald, September 12, 2020
http://www.21jingji.com/2020/9-12/1NMDEzNzlfMTU5MDI1NA.html

Briefings | | |   Economy/Resources