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EU May Ban Huawei Equipment to Please the U.S.

Well-known Chinese news site Sohu recently reported that, according to four European Union officials, the European Commission is considering amending the 2016 network security law in order to stop EU companies from using Huawei’s next generation mobile network equipment. Anonymous sources said this plan is still in an early stage but good enough to demonstrate a “change in the EU position.” Apparently, this will please the United States. However, the new policy will face difficulties in real life even if it gets established, as some of the countries, such as Germany, have already issued their 5G permits. At the moment, most of the EU countries, except Britain, Germany, France, and Poland, do not have a ban on Huawei products. Interestingly, Huawei, Ericsson and Nokia hold the vast majority of the global 5G market. The United States doesn’t even have a presence there.

Source: Sohu, January 31, 2019

Caixin: Chinese January Manufacturing PMI Reached Three-Year Low

Well-known Chinese financial site Caixin recently released its official Chinese Manufacturing PMI index number for January, which was 48.3. The January PMI number was the lowest for the manufacturing sector since March 2016. The new orders sub-index showed another month of decline, especially on the domestic demand side. Exports saw an increase and experts expressed their belief that the rebound was the direct result of the temporary pause of the China-US trade war. The January number also indicated that the manufacturers have been reducing head counts and unemployment has gotten worse. In the meantime, raw material prices and consumer product prices have both dropped. The Caixin report expected a continued slowdown of the Chinese economy. Caixin PMI is a well-respected economic indicator monitored globally by financial institutions. PMI (Purchasing Managers Index) is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.

Source: Caixin, February 1, 2019

Senior Health Blue Book Warns: In 10 Years, It will Take Two Working Adults to Support One Senior

Recently, the Peking Union Medical College, the China Senior Care Association, and the Social Science Literature Publishing House jointly published the Senior Health Blue Book.  According to the statistics disclosed in the Blue Book, at the end of 2018, the total population in mainland China was 1,139.38 million, an increase of 5.3 million from the end of the previous year. The 2018 birth population was 15.23 million, down 2 million from the previous year. The birth rate was 10.94 per thousand, the lowest since 1949.

Meanwhile the aging population rate is rapidly accelerating. At the end of 2018, the population of those who were 60 years old and above was 294.49 million, accounting for 17.9 percent of the total population, an increase of 8.59 million over the same period in the previous year and an increase of 89.6 million over the end of 2008.

The Blue Book also predicted that, if the annual increase of 8 to10 million people per year for the population aged 60 and above is used, after 10 years, the population aged 60 and above will reach 340 million which means that two working adults will be needed to support each elderly person.

Source: Sohu, January 28, 2019

China Faces Pension Deficit

National Business Daily reported that, according to China’s Social Security Annual Report for 2016, several provinces in China had a negative cash flow in their pension fund accounts (they received lower pension contributions than the amount of pension distributions). Heilongjiang Province not only had a negative cash flow for 2016; it also depleted all of its previous pension fund savings. Its pension fund has a debt of 23.2 billion yuan (US$3.5 billion).

The number of provinces with net negative cash flow increased from six in 2015 to seven in 2016, including Heilongjiang, Liaoning, Hebei, Jilin, Inner Mongolia, Hubei, and Qinghai.

According to the China Pension Actuarial Report 2018-2022, without counting the government’s subsidy, the total of pension contributions for all employees working in companies would be short of 256.2 billion yuan (US$38.4 billion) in 2018 and will be short of 533.6 billion yuan (US$80 billion) in 2022.

Some southern provinces, such as Guangdong Province, still have a huge surplus. Thus, some scholars have suggested using the southern provinces’ surplus to cover the northern provinces’ deficit.

China’s pension system is a pay-as-you-go system, requiring employers to contribute a maximum of 20 percent of employees’ earnings to cover the basic pension while the employees contribute eight percent of their earnings for a second-tier pension.

Source: National Business Daily, January 21, 2019

BBC Chinese: The CCP Faces Nine Challenges to Its Political Security

BBC Chinese recently reported that, entering the year 2019, the Chinese Communist Party (CCP) is steering into high political risk zones. The article summarized these critical risks using nine points. The top challenge is the reduced economic growth, which is on the borderline of the “tipping point.” The second risk lies in the rapidly expanding gap between the rich and the poor population. The growing and stubborn powerful and special interest groups  present the third challenge. That risk is followed with failing rural villages as well as more and more homeless people in the city. The fifth challenge is a society that is, considering several different standards, highly divided. The sixth challenge is that the Internet brings everyday citizens a new political landscape. Tension among ethnic groups in China is now at a dangerous level, so the seventh risk is now quickly becoming a risk that will split the nation’s unity. On the eighth note, widespread corruption is everywhere and more and more people are losing faith in the ruling party. Finally, China’s geopolitical situation has worsened a lot in the past few years. The international pressure has transformed and affected the domestic political environment. All these risks interact with one another and are forming serious challenges for the administration.

Source: BBC Chinese, January 31, 2019

By 2022, Every Chinese Will “Own” Two Surveillance Cameras

According to a report that the market research institute IDC released on January 30, the deployment of video surveillance cameras in China will reach 2.76 billion units by 2022. With nearly 1.4 billion Chinese, on average, each person will “own” two surveillance cameras. The report also said that, in the next few years, China will spend another $30 billion on improving the technical capabilities of tracking activities .

China has become the world’s largest market for security and surveillance technology. Research firm IHS Markit predicts that China will purchase three-quarters of the servers used for facial recognition in video footage.

In recent years, with the advancement of smart city projects, the public video surveillance network has achieved rapid development. At present, facial recognition systems have been deployed in streets and alleys across China, recording every move that the people make. The government calls it a “smart city.” China has also built the world’s largest video surveillance system, which can accurately identify a pedestrian’s age, gender, and dress.

After the completion of China’s huge video surveillance system “Skynet Project,” another “Bright-as-Snow Project” targeting rural areas started last year and, for the first time, was included in the “No. 1 Document” of the Chinese Communist Party’s Central Committee. A Guangdong company launched a monitoring system for the “Bright-as-Snow Project,” which uses home TVs and smart phones to deliver surveillance videos to the house.

Source: Radio Free Asia, February 4, 2019