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China’s Industrial Profit Dropped Most Since 2011

According to the National Bureau of Statistics of China, the Chinese industrial profit in the first two months of this year shows a year-over-year reduction of 14 percent to 708 billion yuan (US$105 billion), the largest drop since 2011. The main reason is believed to be the weak demand both at home and abroad, resulting in a slowdown of the economy.

The world’s second-largest economy has been growing the slowest in nearly 30 years. The Chinese government has lowered its economic growth target this year from 6.6 percent to a range of 6.0 percent to 6.5 percent.

A National Bureau of Statistics official said in a statement that the profits of major industries such as automobile, petroleum processing, steel, and chemical industries have dropped significantly. These are the main contributors to the lower profit.

Source: Central News Agency, March 27, 2019
https://www.cna.com.tw/news/acn/201903270155.aspx

German Retail Giant Metro Started Exiting China

Well-known Chinese news site Sina recently reported that the German retailer Metro AG kicked off its process of exiting the Chinese market. Metro has issued invitations to buyers. The Chinese market portion of the retail chain has an estimated value of US$1.5 to US$2 billion. Sources said Metro planned to sell most of the shares of its Chinese operation. It currently has 95 retail locations in China and owns real estate in Beijing and Shanghai. The move is considered part of Metro’s global restructuring effort. Online commerce newcomers have been challenging China’s traditional retail and wholesale segments. A large portion of Metro China’s valuation is in real estate holdings. All potential buyers have declined to comment on this matter. Metro AG’s official position is that the company will be collaborating with its partners on future developments.

Source: Sina, March 20, 2019
https://finance.sina.com.cn/world/gjcj/2019-03-20/doc-ihsxncvh3983716.shtml

VOA Chinese: Finland Is Investigating Some Nokia Phones That Send Data to China

Voice of America (VOA) Chinese Edition recently reported that the Finnish authorities are currently investigating the case of certain Nokia cellphone models that are sending sensitive user data to China without the phone owner’s knowledge. The Nokia 7 Plus manufacturer, HMD Global, admitted that there are bugs in the software. The Finnish authorities suspected that the cellphone vendor violated EU data privacy and protection laws. An assessment process is underway. According to NRK, the Norwegian government-owned radio and television public broadcasting company, one of the Nokia users told them that his Nokia 7 Plus cellphone has been connecting to and sending data to servers that China Telecom owned. HMD Global insisted that no data was shared with any other government. Some analysts expressed the belief that these cellphones were designed to sell in the Chinese market; however, some mistakes were made and they were sold in Europe. This event added uncertainty to the global 5G deployment war. Ericsson and Nokia are considered the replacements for Chinese vendor Huawei, since more and more countries are banning Huawei.

Source: VOA Chinese, March 22, 2019
https://www.voachinese.com/a/nokia-phone-data-breach-20190321/4841871.html

China’s Upcoming Personal Credit Investigation Report

Chen Yulu, deputy governor of the People’s Bank of China, recently said, “Many young women are looking for boyfriends. The future mothers-in-law often say, “I will take a look at the guy’s credit investigation report that People’s Bank produces.”

The Personal Credit Investigation Report (PCIR) should be correctly called the “financial credit information infrastructure database.” It includes five types of information: the basics such as “Who you are, where you live, and what you do”; credit information such as “Who you borrowed money from, and whether you have paid it back”; non-financial liabilities, including utility payments such as water and electricity; social security and medical insurance; and lastly, the records of how your credit report has been checked, by whom, and for what reason.

In other words, the PCIR put together by China’s central bank, with the assistance of a computer network and big data technology, faithfully recorded everyone’s everyday life activities and debt repayments, carrying many more details than even a credit agency’s investigations.

One should never underestimate this “economic identity card.” If you don’t pay back the money you owe on time, or if it is overdue, you may not even be able to apply for a credit card. The bank will not process your application for a car loan, a mortgage, a student loan, or consumer credit. Nor can you be a CEO or member of a company’s board of directors. The bank will also directly freeze your deposits and financial products. Even worse, if you are on the list of significantly “dishonest” or “untrustworthy” people, you may not be able to take the plane, ride the high-speed rail, and may even be limited from spending on big ticket items.

China is building a comprehensive network of personal credit information with no blind spot. The PCIR was put into a trial operation starting from November 2018 and the new and formal version will be launched in May of this year. With a fully connected network, a lot of detailed information could be queried. For individuals in China, it is less and less likely to live a private life or one hidden from the government.

Source: The World Journal, March 24, 2019
https://www.worldjournal.com/6193766

RFA: Nine Colleges of “Red DNA” Form a University Alliance

Recently, China reestablished an alliance of nine colleges, called the “Yanhe University Talent Training Alliance,” in order to inherit and perpetuate the Yan’an red DNA {a generic name for Communism}. It refers to the Yan’an period of Chinese communism’s education concept (1936-1949) when the party set up nine universities and training institutions for the next generation of Chinese officials and leaders. Therefore, it is called the “red DNA college.”

The Beijing Institute of Technology first initiated the concept of the “Yanhe Alliance.” In addition to the Beijing Institute of Technology, the other eight Chinese universities joining the alliance are Renmin University of China, China Agricultural University, Beijing Foreign Studies University, the Central Conservatory of Music, Central Academy of Fine Arts, Central Academy of Drama, the Central University for Nationalities, and Yan’an University.

A report stated that the nine colleges and universities had spread the fire of the Chinese revolution to the whole country. Today, they gathered together again to reestablish the alliance, to continue the “Yanhe Soul,” to promote the “red heart knot,” {and to carry on the work of “nurturing the next generation.}”

Beijing’s independent scholar Cha Jianguo said on Tuesday (the 19th) in an interview with Radio Free Asia, that the nine universities in the alliance were established in Yan’an, Shaanxi Province: “They want to inherit the red DNA. Now the Chinese Communist Party has fully indoctrinated the mainland. The education system has been indoctrinated, strengthening the party’s leadership, with everything revolving around the party’s tasks. This is part of the party’s national indoctrination. These nine schools may have to take the lead.”

Source: Radio Free Asia, March 19, 2019
https://www.rfa.org/mandarin/yataibaodao/kejiaowen/ql1-03192019101444.html

CCP Calls for Reorganizing “Weak and Lax” Rural CCP Branches

Xinhua reported that Xi Jinping, the general secretary of the Communist Party of China, presided over the 7th meeting of the Central Committee for Comprehensive Deepening Reform, reaffirming the push for the implementation of major reform measures.

The meeting also called for “solidifying grassroots Party organizations and reorganizing the weak and lax rural Party organizations.”  The 7th meeting passed several Party directives including the “Guidance on Strengthening and Improving Rural Governance.”

That is, the meeting emphasized strengthening and improving rural governance.  It is necessary to establish a modern rural social governance system that the Communist Party heads, to solidify a strong grassroots Party organization, to reorganize weak and lax rural Party organizations, and to appoint strong leaders to the rural Party organizations.

The Central Comprehensively Deepening Reforms Commission, formerly known as the Central Leading Group for Comprehensively Deepening Reforms is a policy formulation and implementation body set up under the Politburo of the Communist Party of China in charge of “Comprehensively Deepening Reforms.”

Source: Xinhua, March 19, 2019
http://www.xinhuanet.com/politics/leaders/2019-03/19/c_1124255626.htm

Huawei Hired Two U.S. Firms to Deal with its PR Crisis

Huawei has contracted with two U.S. firms to conduct public relations lobbying and provide legal services in order to save its image. The two companies are Racepoint Global and Burson Cohn & Wolfe (BCW). On March 22, the Center for Responsive Politics, a non-profit, nonpartisan research group that tracks foreign government lobbying activities, publicized the Foreign Agents Registration Act registration (FARA) forms that the two companies completed on March 20 with the Department of Justice.

“BCW will develop a campaign to improve Huawei’s reputation in the U.S. by working with business partners, advisory council members, media outlets, people of influence, and ‘key opinion leaders’ with a budget of $160,000.”

“Racepoint similarly states it will visit with analysts, people of influence and media members and ‘draft content generation for the purpose of educating policymakers and legislators on client positions’ but will ‘have no direct contact with government officials.’”

“Huawei agreed to pay Racepoint $55,000 per month through September 2019. On top of that monthly retainer, Huawei agreed to pay ‘reasonable’ expenses and billing rates for individual team members of up to $320 per hour for the three managing directors. Racepoint’s contract also anticipates the potential of “talent,” “key opinion leaders,” and “celebrity” related costs.”

In the past years, Huawei has spent upwards of seven figures on lobbying efforts as reported under the domestic Lobbying Disclosure Act (LDA), according to the Center, but this is the first time that U.S. firms registered with the Department of Justice as the foreign agents for Huawei.

Source: Radio France International, March 24, 2019
http://rfi.my/3qYk.T
Center for Responsive Politics, March 22, 2019

US firms register as foreign agents of embattled Chinese telecom giant Huawei

Apple Daily: EU’s Naive Days about China Are Ending

Major Hong Kong newspaper Apple Daily recently reported that European leaders met on March 21 to synchronize their position towards China. This is the first time the EU countries have gathered to deal jointly with China at the top level. The European Union intended to list China as one of its competitors. Some French officials even commented that the traditional EU members’ “naive” attitude towards China is ending. According to a document that Reuters obtained called, “EU-China: A Strategic Outlook,” the EU identifies China as an economic competitor in search of a technological leadership position. China is also a “systemic rival” in terms of its governing model. The EU has been complaining about the EU’s economic openness versus China’s different operating model, which has been in existence for some time now. As the second largest economy in the world, China should no longer enjoy the status of a developing country. The EU got a wake-up call just recently on China’s One Belt One Road program. The EU realized that China is throwing investments and loans at some EU members in exchange for influence. The Eastern Europe democratization could face a failure in light of this divide-and-conquer strategy from China.

Source: Apple Daily, March 21, 2019
https://tw.appledaily.com/new/realtime/20190321/1537141/