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CCP Trying to Pass Article 23 in Hong Kong Again

BBC Chinese Edition reported that the CCP is once again pushing to add the controversial “Article 23” to Hong Kong’s constitution. A prior attempt to implement the legislation in 2003 led to massive street protests of approximately half a million people in Hong Kong. According to Wikipedia, Article 23 states that Hong Kong “shall enact laws on its own to prohibit any act of treason, secession, sedition, subversion against the Central People’s Government, or theft of state secrets, to prohibit foreign political organizations or bodies from conducting political activities in the Region, and to prohibit political organizations or bodies of the Region from establishing ties with foreign political organizations or bodies.”

The CCP now has tighter control over Hong Kong, and the Hong Kong government is now able to push for Article 23 once again. The article defines various “crimes against national security” and allows the government to arrest people under those charges.

The government has opened a one-month period for public feedback on the article, January 30 to February 28. The article defines nine chapters addressing five categories of activities posing threats to national security:

  • Treason: Expanding offenses to cover behaviors such as joining foreign armed forces at war with China and intending to harm China’s sovereignty.
  • Rebellion and Secession: Extending the scope of incitement to secession to all public officials and introducing the offense of rebellion for more serious acts.
  • Theft of State Secrets and Espionage: Detailed definition of state secrets, covering all public officials, with prohibition on illegal acquisition and disclosure, and addition of modern espionage activities.
  • Destructive Activities: Preventing damage to public infrastructure and introducing penalties for acts harming national security via computer systems.
  • Overseas interference: Prohibiting actions undermining Hong Kong affairs abroad and expanding regulations to monitor all organizations in Hong Kong, including foreign organizations; as long as the authorities “reasonally believe” that it is needed for the state security, it can stop the relevant organization’s operations.

Sources:
BBC, January 30, 2024
https://www.bbc.com/zhongwen/simp/chinese-news-68142687

Wikipedia, Retrieved February 14, 2024
https://en.wikipedia.org/wiki/Hong_Kong_Basic_Law_Article_23

China Offers Open-Enrollment Online Courses to International Audiences

To enhance its soft power, Beijing is making efforts to offer Massive Open Online Courses (MOOCs) to international audiences.

People’s Daily reported that China “leads the development of the World MOOCs and Online Education Alliance.” It organizes the World MOOCs and Online Education Conference annually and actively promotes international exchanges and cooperation in online teaching. China has “launched 341 globally-integrated courses and introduced 10 global integrated certificate programs, attracting nearly 25.4 million learners; it has established bilateral communication and exchange channels for course with more than 30 renowned universities and online education institutions worldwide.” Additionally, China has published the “Infinite Possibilities: Report on the Digital Development of World Higher Education” and the “World Higher Education Digital Development Index.”

Another People’s Daily report stated that the World Digital Education Alliance was established at the 2024 World Digital Education Conference, and that China has officially launched the international version of the China National Smart Education Public Service Platform. The platform “offers 780 courses, covering 12 disciplines and 17 major categories including literature, engineering, science, and arts. The instructors for these courses come from over a hundred high-level Chinese institutions such as Tsinghua University.” The platform also provides services for international students to study in China.

The second article says that “in November 2023, UNESCO passed a resolution to establish the UNESCO International STEM Education Research Institute in Shanghai.” Xie Dong, Shanghai Deputy Mayor said that “the Shanghai center will actively focus on strengthening cooperation and exchanges in STEM education with African and island countries.”

Sources:
1. People’s Daily, January 29, 2024
http://edu.people.com.cn/n1/2024/0129/c1006-40168414.html
2. People’s Daily, February 8, 2024
http://edu.people.com.cn/n1/2024/0208/c1006-40175792.html

NetEase: Mexico Surpassed China as Largest Supplier to U.S.

Data released by the U.S. Department of Commerce showed that in 2023 Mexico surpassed China for the first time in over 20 years to become the largest source of goods imported by the U.S.

Well-known Chinese news site NetEase (NASDAQ: NTES) ran a report about the Department of Commerce Data. Below are some excerpts from their article:

As part of the U.S.’ so-called “weaning off dependence on China” strategy, the U.S. Biden administration is urging companies to find suppliers in allied countries or move manufacturing operations back to the United States.

The value of U.S. imports from Mexico increased by nearly five percent from 2022 to 2023, reaching more than US$475 billion. At the same time, the value of U.S. imports from China fell by about 20 percent, to US$427 billion.

This is the first time in more than 20 years that Mexico has surpassed China and become the largest source of imported goods to the United States. The last time the value of U.S. imports from Mexico exceeded that from China was in 2002.

The biggest decline in U.S. imports from China was in commodities such as computers, electronic products, chemicals, and pharmaceuticals, which are all ‘politically sensitive’ for the United States.

The impact of COVID-19 on global supply chains has also forced American companies to look for nearshore suppliers. … However, the actual situation is more complicated than that. Some Chinese manufacturers have already established factories in Mexico too.

Source: NetEase, February 8, 2024
https://www.163.com/dy/article/IQDSPONL051481US.html

CNA: BloombergNEF Puts Canada Ahead of China in Lithium Battery Production Capabilities

Primary Taiwanese news agency Central News Agency (CNA) recently reported that Bloomberg New Energy Finance (BloombergNEF) has released a ranking report on global supply chains for lithium-ion batteries. Canada surpassed China for the first time as number one in the rankings, topping the list of 30 countries. According to BloombergNEF, the “Global Lithium-Ion Battery Supply Chain Ranking [is] an annual assessment that rates 30 countries on their potential to build a secure, reliable, and sustainable lithium-ion battery supply chain.”

The below excerpts are translated from the CNA article:

“China ranked first for the three years prior before falling to second place in the 2024 edition of the BNEF ranking. Canada moved to the top of the list from second place, and the United States now ranks third among battery producers.”

“Canada currently accounts for only a fraction of China’s lithium-ion battery production. BloombergNEF’s analysis focuses on future battery supply chain developments.”

“The Canadian government continues to invest new funds to expand support programs for electric vehicle battery manufacturing.”

“Multinational companies investing in the electric vehicle industry such as Ford, Stellantis, Volkswagen, South Korea’s LG Energy Solution, and Umicore have already started developments in Canada.”

“BloombergNEF examined 46 indicators across five categories to measure each country’s potential to build a safe, reliable and sustainable lithium-ion battery supply chain. These categories include raw materials, battery manufacturing, downstream demand, environmental and social governance, as well as industry, infrastructure and innovation.”

Sources:
CNA, February 8, 2024
https://www.cna.com.tw/news/afe/202402080055.aspx

BloombergNEF, February 5, 2024
https://about.bnef.com/blog/china-drops-to-second-in-bloombergnefs-global-lithium-ion-battery-supply-chain-ranking-as-canada-comes-out-on-top/

January Sales of TOP100 Chinese Real Estate Companies Decreased 33% Year-Over-Year

The China Index Academy recently published its January report “Sales Performance Ranking of Chinese Real Estate Enterprises.” Shanghai-based Chinese financial news site East Money wrote about the data from the report, commenting that in January this year the total sales of the TOP100 Chinese real estate companies suffered a year-over-year decrease of 33.3 percent. The decline was 1.6 percent worse than the same period last year.

The China Index Academy report mentioned that January of 2023 saw the relaxation of China’s strict Zero-COVID policy, leading to a surge in demand and relatively high sales during that period. Thus, the baseline for January 2024’s year-over-year change in sales was relatively high. Meanwhile, the real-estate market is currently quite sluggish, the sector as a whole in recession, and Chinese real-estate giant Evergrande is facing liquidation.

According to statistics from the Academy’s report, the transaction area of new homes in 100 key cities fell by about 33 percent month-over-month. Overall market sentiment remains weak. In terms of second-hand housing, transaction volume in key cities increased slightly month-over-month, and the market remains active. The area of new homes approved for sale in 50 key cities fell by about 50 percent month-over-month and more than 15 percent year-over-year. The overall scale of supply is at a low level.

Source: East Money, February 1, 2024
https://finance.eastmoney.com/a/202402012979670451.html

China Identifies Strategic Emerging Industries for Investment

“Strategic emerging industries and future industries are the new battlefield for competition,” according to Zhuang Shuxin, Secretary-General and spokesperson for the State-owned Assets Supervision and Administration Commission of China’s State Council.

A recent People’s Daily article stated that the Chinese government plans to “promote a number of major projects,” select “hundreds of projects” in strategic emerging industries, construct “clusters of strategic emerging industries,” implement special actions such as “AI+,” and accelerate the formation of landmark achievements in key areas such as biotechnology, new materials, and new energy vehicles. The government will also expedite industrial development supported by technological breakthroughs; foster pioneering enterprises, leading enterprises, and unicorn enterprises; and create landmark products in areas such as neuromorphic intelligence, quantum information, deep earth and sea exploration, and laser manufacturing.

Source: People’s Daily, January 30, 2024
http://finance.people.com.cn/n1/2024/0130/c1004-40169330.html

The New Social Currency in China’s Financial Industry: Guandan + Maotai

The Chinese card game “Guandan” has rapidly gained popularity nationwide since last year, posing a threat to golf and Texas Hold’em poker as the new “social currency” of China’s financial industry. Such scenes have emerged as financial securities firms giving “Guandan gift boxes” to clients, fund companies organizing Guandan tournaments, private equity and venture capital firms studying Guandan books and skill guides, and industry leaders playing Guandan games at gatherings.

In the past, China’s financial industry was closely intertwined with the US dollar, and social activities largely revolved around western activities such as golf or playing Texas Hold’em poker and drinking red wine. Nowadays, however, foreign sources of funding have largely dried up, and availability of domestic private capital is decreasing too. Financial professionals in China are therefore forced to turn to the government for funding. Since Chinese government officials enjoy playing the game “Guandan,” mastering this game has become critical for Chinese financial professionals.

With the industry drifting towards a “Guandan + Maotai liquor” model, Shanghai has even established a Guandan Sports Association. Originating from Huai’an, Jiangsu Province, “Guandan” is a four-player card game played with two decks of cards, where players form teams of two and must use higher-ranking card combinations to suppress opponents, with the winner being the first to deplete their hand of cards, followed by scoring and ranking up.

Source: Epoch Times, January 29, 2024
https://www.epochtimes.com/gb/24/1/29/n14168608.htm

Nikkei Shimbun: China’s 2023 GDP Growth Was Actually Negative

Japan’s Nikkei Shimbun ran an article saying that China’s 2023 GDP numbers reported by the communist regime are likely fake. Given suspicions of data tampering by both local and central party apparatuses in China, Nikkei Shimbun put together a rough alternative estimate using three data points that have a significant impact on GDP: real estate investment, net exports, and household consumption.

  • Real estate investment accounts for about 10 percent of GDP. Adding in Chinese consumer spending on electrical products, the sum accounts for about 30 percent of GDP. In 2023, China’s real estate investment decreased by 16.7 percent compared to 2022, which could lead to a decrease of 5 percent in GDP.
  • China’s net exports (i.e. the difference between imports and exports) historically accounts for about 3 percent of China’s GDP. However, from January to November 2023, net exports decreased by 32.3 percent compared to the same period in 2022, resulting in an estimated reduction in 2023 GDP of about 1 percent.
  • Chinese officials have not publicly disclosed household consumption data, which accounts for about 40 percent of China’s GDP. Nikkei estimated this data using total retail sales to consumers, a figure which increased by 7.2 percent in 2023 compared to 2022, impacting GDP positively by about 2.8 percent.

Adding these three numbers together, the resulting estimated true change in GDP is negative 3.2 percent. Even accounting for the impact of inflation, the change in GDP should be at least negative 2 percent, significantly below the positive 5.2 percent change in GDP published by the Chinese government.

The Nikkei report urged Japanese investors in China to withdraw their funds as soon as possible.

Source: New Talk (Taiwan), January 31, 2024
https://newtalk.tw/news/view/2024-01-31/907283