Chinascope – Page 479

Sputnik News: China’s Loans Saved Two South African Companies

On its Chinese Edition site, well-known Russian news agency Sputnik recently reported that the large amount of aid loans China provided South Africa during President Xi Jinping’s visit to that country will probably save two large South African state-owned companies, Eskom and Transnet. The South African newspaper City Press also reported that these two large companies will have significant relief from financial pain and will get their health back. In July, Eskom, as the national energy resource provider, just declared a financial loss of US$174 million and it will receive a US$2.5 billion loan from China Development Bank. Transnet, a major transportation company, will receive a large loan from the Industrial and Commercial Bank of China as well. According to South Africa President Cyril Ramaphosa, President Xi thinks China has significant special interests in Africa, especially in South Africa. President Xi will continue to provide aid to the region. Ramaphosa has been trying to save Eskom for many years. The company was deeply involved in political scandals during the time of the previous administration. Banks later stopped providing loans to Eskom.

Source: Sputnik Chinese Edition, July 26, 2018
http://sputniknews.cn/economics/201807261025969234/

Briefings | | August 7, 2018 | Geo-Strategic Trend

Internet Posting: As Foreign Companies Leave China Who Will Fill in Holes Left by 45 Million Lost Jobs?

A popular Internet posting titled “As Foreign Companies Leave China Who Will Fill in the Holes left by 45 Million Lost Jobs?” was circulating on overseas Chinese media sites. The original source has not been found. Below is a list of statistics and facts used in the article:
1. The following is a partial list of well-known foreign companies that have closed or are relocating manufacturing sites they have in China: Nikon, Nitto, Samsung, AU Optronics Corporation, Olympus, Omron, Adidas, Uniqlo, Foxconn, Intel, LG, and Nokia.
2. In November 2013, there were 57,200 foreign companies in China. By November 2016, there were 51,800 foreign companies in China, a reduction of 9.4 percent.
3. Fixed capital investment by foreign companies was at 214.6 billion in 2017 compared to 508.7 billion in 2011, a reduction of 57.8 percent in six years.
4. China made US$60.07 billion in investments overseas in 2011 vs. US$170 billion oversea investment in 2016. It shows that China’s investments overseas continue to grow.
5. Foreign companies account for less than 3 percent of the total companies in China, but they contributed over 50 percent of China’s foreign trade volume, 25 percent of profit and 20 percent of China’s tax income.
6. Regarding China’s foreign trade surplus in 2017, private enterprises and foreign companies accounted for 46.5 percent and 43.2 percent, respectively, and state-owned enterprises accounted for only 10.3 percent.
7. Foreign investment’s contribution to GDP: Guangzhou 62 percent of its GDP; Shanghai 67 percent, Shengzhen 70 percent.
8. One statistic suggested that in 2013, the number of people employed by foreign companies (including Hong Kong, Macao and Taiwan) reached a peak of 29.63 million. By 2014 and 2015, the number of employed persons was 29.55 million and 27.9 million respectively. By 2016, the number dropped to 26.66 million, a drop of 2.97 million in three years. China’s official number for direct employment by foreign companies in China, however, was at 45 million.
9. Three major reasons why foreign companies have left China: the real estate bubble, increases in operating costs, a decline in profit, and a devaluation of Chinese currency.

Source: Wenxuecity, August 2, 2018
http://www.wenxuecity.com/news/2018/08/02/7494179.html

Briefings | | August 6, 2018 | Economy/Resources

Authorities Block P2P Victims from Going to Beijing to Petition

In the past two months, a large number of P2P (Peer to Peer Lending) companies have closed in China. One report showed that 60 to 70 P2P companies closed just in one day. Tens and millions of investors are affected, including some seniors who have lost their entire retirement savings. On August 6, the P2P victims around the country planned a group petition in front of the China Banking and Insurance Regulatory Commission (CBIRC) in Beijing but the officials planned ahead of time to block these petitioners. The Epoch Times article showed photos of the shuttle buses lined up outside of the CBIRC building that were ready to take the petitioners away. The screen shot of a notice from the Public Security Bureau of Wenzhou City showed that the top leader of the local authorities in each region was told to take responsibility for stopping the P2P petitioners from going to Beijing. Otherwise they would face serious consequences. The notice also ordered all levels of the security forces to be ready to carry out the task of monitoring the petitioners. One document from an unidentified province advised that the authorities were aware that there were 8,370 people from 32 cities and provinces who all had plans to go to Beijing; it put them all under close surveillance. One notice from a Public Security Bureau of a railway station ordered that the local security bureau must take action to prevent the petitioners from boarding the train to Beijing. The embedded videos showed police stopping the petitioners from leaving their homes or taking them off of trains or out of hotel rooms. One petitioner told a police officer that they should be clear what kind of government they are serving: “Wake up! One day what we face today will be the same thing you face tomorrow.” Another victim said, “They locked us up without even giving us a reason. The government is so dark.” Members of the police force have become the dogs of the corrupt officials. Where did tens and billions of P2P funding go? Has it become a tool for officials to launder money?

Source: Epoch Times, August 6, 2018
http://www.epochtimes.com/gb/18/8/6/n10617970.htm

Briefings | | August 6, 2018 | Social Stability

ASEAN-China Single Draft South China Sea Code of Conduct to Weaken U.S. Influence

On August 3, the foreign ministers of the 10 member states of the Association of Southeast Asian Nations (ASEAN) and their Chinese counterpart announced agreement on a Single Draft South China Sea Code of Conduct Negotiating Text (SDNT) that will serve as the basis for the adoption of a Code of Conduct in the South China Sea.

Among the proposals that China made, two of them are notable. The first is on cooperation on the marine economy and states that cooperation is to be carried out by the littoral states “and shall not be conducted in cooperation with companies from countries outside the region.” In contrast, Malaysia proposed that nothing in the Code of Conduct (COC) “shall affect… rights or ability of the Parties to conduct activities with foreign countries or private entities of their own choosing.” The marine economy includes aquaculture and oil and gas cooperation, and marine culture.

Another proposal is about joint military exercises. “The Parties shall establish a notification mechanism on military activities and will notify each other of major military activities if deemed necessary. The Parties shall not hold joint military exercises with countries from outside the region unless the parties concerned are notified beforehand and express no objection.”

China’s move is perceived at an attempt to weaken further any U.S. intervention in the South China Sea as the U.S. is considered as being among “countries outside the region.”

Shen Shishun, a scholar from the China Institute of International Studies, made it very clear in his interview with Russian based Sputnik News. “The so-called interference or factors of uncertainty mainly mean that some countries outside the region, out of a cold war mentality, are worried about the rise in influence of other countries in the region, and the decline of their own. They have adopted cold war tactics to provoke dissension among the countries in the region and to disrupt the situation in the South China Sea. It should be said that the interference of external forces is mainly from the United States. The U.S. global strategy is simple. It is to prevent any country from challenging its hegemonic status. The rise of China naturally has become its greatest threat. In fact, what the U.S. is doing does no good for Sino-U.S. relations, nor for regional peace and stability.”

Source: Sputnik News, August 4, 2018
http://sputniknews.cn/opinion/201808041026048188/

Briefings | | August 5, 2018 | Geo-Strategic Trend

China’s Largest Corn Trader Quietly Filed for Bankruptcy

According to Beijing News, the Intermediate People’s Court of Changchun City of Jilin Province recently issued a civil ruling that Xinghua Grain Depot, a subsidiary of Jilin Grain Group Co., Ltd., is insolvent and unable to pay off its debts. The court ruling showed that Xinghua’s current debt ratio exceeded 100 percent. It has 27 employees under labor contracts. The company has so far defaulted on wages, social security, and medical insurance payments.

As a matter of fact, before the Xinghua Grain Depot’s bankruptcy filing, its parent company Jilin Grain Group Co., Ltd. already quietly went bankrupt. The civil ruling that the Beijing News reporter obtained showed that the applicant, Wang Jing, applied to the Changchun Intermediate People’s Court for bankruptcy liquidation of the Jilin Grain Group on the grounds that it was insolvent and was not able to pay off its debts. On May 15, 2018, Jilin Grain Group submitted a written opinion to the court, expressing its consent to bankruptcy liquidation. The court ruled to accept Wang’s bankruptcy application for Jilin Grain Group.

Since August, a number of Jilin Grain Group’s subsidiaries including the above-mentioned Xinghua Grain Depot have filed for bankruptcy reorganization. For example, the Changchun Intermediate People’s Court issued another civil ruling on August 2, indicating that Jiashi Rice Industry Co., Ltd. has been unable to pay off its debts. It ruled to accept Jiashi Rice’s bankruptcy application.

Founded in 1996, Jilin Grain Group Co., Ltd. grows, processes, and distributes grains. With registered capital of 664 million yuan (US$97 million), it has 20 subsidiaries, a total of 3,000 employees and an annual sales income of more than 10 billion yuan (US$1.5 billion). A nationally recognized state-owned enterprise, Jilin Grain Group was China’s largest corn trader.

In recent years, Jilin Grain Group has been involved in corruption investigations. In February 2018, former party secretary and chairman of Jilin Grain Group, Meng Xiangjiuwas, was under investigation for “serious violations of discipline” and dismissed from the party. Xinhua News Agency reported a long list of charges against Meng, including illegal possession of property, misappropriation of public funds for illegal activities, accepting bribery when appointing officials, contracting projects and conducting business operations.

Source: Beijing News, August 3, 2018
http://www.bjnews.com.cn/finance/2018/08/03/498070.html

Briefings | | August 5, 2018 | Economy/Resources

Overseas Study Tours for Preschoolers

In order to prepare for the tough competition in the future, Chinese families continue to invest in their children’s education. Online travel agency Ctrip recently released the “2018 Summer Study Camp Report,” pointing out that more and more Chinese families prefer that their children go abroad for study and camp tourism. In 2018, the scale is expected to reach 1 million people, with expenditures of more than 30 billion yuan (US$4.4 billion).

The report sampled families with children between the ages of 8 and 12 and found that the proportion of families who are willing to participate in study tourism this summer is as high as 80 percent. The per capita expenditure for an overseas trip is more than 23,000 yuan (US$3,400). The average expense of a trip to the United Kingdom, the United States, or Australia is between 32,000 yuan (US$4,700) and 38,000 yuan (US$5,600); the shorter trips to Asian countries cost between 8,000 yuan (US$1,200) and 15,000 yuan (US$2,200). The most popular destinations for overseas study tours are the United Kingdom, the United States, Australia, New Zealand, Singapore, and Thailand.

The age of those going on overseas study tours is concentrated between 10 and 15 years old, accounting for 66 percent of the total. However, children under 6 years old also account for 5 percent.

The demand for quality in the study tours has gradually increased. Compared with the previous trips which were usually to open the eyes of the children, in recent years, parents have been giving thought to more professional considerations. Their inquiries include the information on the target school, the quality of teachers, the proportion of international students, the teaching philosophy of the school, and even the teaching materials.

Source: The Paper, August 3, 2018
https://www.thepaper.cn/newsDetail_forward_2317979

Briefings | | August 5, 2018 | Economy/Resources

Ministry of Finance to Expand Pilot Reform of SOEs to Implement Their Dominant Market Position

People Daily reported that the State Council recently issued, “Opinions to Implement the Pilot Reform of State-Owned Enterprises (SOEs).” It plans to expand the SOE reform pilot program and form a replicated model for more SOEs to follow.

The Opinions focus on the following four principles:

First, to ensure that the party maintains the overall leadership of state-owned enterprises, to implement the legal status of the party organization within the corporate governance structure and to ensure that the party’s and the state’s policies on major decisions are implemented.

Second, to insist that the market plays a decisive role in resource allocation while better enabling the government to play its role in further implementing the dominant market position of the State Owned Enterprises.

Third, to focus on supply-side reforms to establish a complete operational guideline that enables SOEs to become stronger and better.

Fourth, to be firm in preventing the loss of state-owned assets and to build a monitoring and evaluation system.

The article also quoted directions that Xi Jinping gave during the 19th Congress on SOEs. Xi called for SOEs to improve an asset management system, optimize the economic model, make structural adjustments and strategic changes, enable SOEs to become stronger and better and grow to be competitive first class world companies.

Source: People’s Daily, August 1, 2018
http://finance.people.com.cn/n1/2018/0801/c1004-30184188.html

Briefings | | August 2, 2018 | Government/Politics

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

Xinhua Commentaries: “Exposing the Three Major Political Deficits of the U.S.”

The CCP’s Performing Arts Troupes in the U.S.