Chinascope – Page 550

Caixin News: China Railway Relies on Government Subsidies to Keep its Books in the Black

On April 29, Caixin News disclosed that China Railway Corporation receives subsidized funding in Q4 of each year, which helps to turn its net profit from red to black. According to the article, by the end of the third quarter in 2016, China Railway had lost 5.577 billion yuan (US$810 million), but for the full year of 2016, it reported total revenue of 907.4 billion yuan (US$131 billion), down 0.96 percent from 2015 while the company’s net profit was 1.076 billion yuan (USD$160 million) an increase of 58 percent from 681 million yuan (USD$99 million) in 2015. Meanwhile, the report said that China Railway Corporation carries total debt of 4.72 trillion yuan (US$680 million) up 15.12 percent from 4.10 trillion yuan (US$590 million) with a debt ratio that increased to 65.1 percent.

The following were among the posted comments on the article:
“Can the bottom line count as being profitable?”
“They are the only railway company in the country and still lose money. Who is paying for the loss?”
“A State Owned Enterprise relies on government subsidies. How can it be competitive in the global market?”
“China Shipping Company is the same. They receive subsidized funding from the government. They never show a financial loss”.

Source: Caixin, April 29, 2017
http://companies.caixin.com/2017-04-29/101084870.html

Briefings | | May 8, 2017 | Economy/Resources

1,846 Top Executives of Publicly Traded Companies Resigned within One Month

Sina published an article which reported that from April 3 to May 3, 1,846 top executives in publicly traded companies in Shanghai and Shen Zheng resigned. Among those 649 left due to restructuring, term limits, health, or retirement reasons and 36 left due to illegal activities. Meanwhile 169 of those who resigned had an annual salary over 1 million yuan (US$140,000). The article quoted comments from a security law expert from the Central University of Finance and Economics who expressed concern over this phenomenon. “When a significant number of top executives resign from publicly traded companies, the stock market fluctuates because of it. Some of those executives sell the stock they own when they leave. This has had a direct effect on the secondary market.”

Source: Sina, May 4, 2017
http://finance.sina.com.cn/roll/2017-05-04/doc-ifyeycte8528547.shtml

Briefings | | May 8, 2017 | Economy/Resources

Epoch Times: How China Spent its Security Maintenance Fund

Epoch Times, the overseas Chinese news media, carried an article which included examples of how China spent its “security maintenance fund.”

1) Based on a source from the public security bureau in Shen Zhen, on April 23, the security bureau allocated 10 million Hong Kong yuan (US$1.28 million) in order to stop a parade that Falun Gong followers in Hong Kong had organized. The money was spent to pay 500 to 600 yuan (US$64 to $77) to each participant and to buy uniforms, banners, and chairs, while more money was paid to those who organized the stopping of the event. One group organizer from Fujian was reported to have received 2 million Hong Kong dollars (USD$260,000) for participating in the April 23 event. The directive issued to the organizers stated that the money came from the “security maintenance fund.” The organizer was told that there is no limit set on measures to persecute Falun Gong followers and all expenses would be reimbursed.

2) Chen Guangcheng, the civil rights activist worked on human rights issues, while the county government in Shandong Province subjected his family to surveillance from August 2005 to August 2012. Three surveillance sites were set up to put Chen under house arrest and 50 to 60 people were at this site 24 hours a day. Meanwhile an additional several hundred people who are cadres of the villages, towns, and the counties, as well as police officers, were involved in Chen’s case. Reports indicated that the authorities spent 30 million yuan (US$4.34 million) a year to monitor Chen. That was the amount in 2008, but it went up to 60 million (US$8.69 million) by 2011. The total does not include the bribery money that officials paid in Shandong Province to the officials in Beijing.

3) Lawyer Zhen Enchong from Shanghai disclosed that, since he was released from prison on June 5, 2006, the authorities in Shanghai spent at least 4.2 million yuan (US$610,000) a year to keep him under house arrest and on harassing his family members.

4) The article quoted a comment from a scholar who stated that behind the large sums “invested” in the “security maintenance fund” were large sums of money spent on corruption. “They mark up the surveillance camera from 1,000 yuan (US$115) to 100,000 yuan (US$14,500) … Large groups of people rely on making money through the “maintaining security” effort.

5) On March 2, Philip Wen, a reporter from Reuters reported that for the past five years, in order to stop a villager from Inner Mongolia from going to Beijing to appeal her case, the authorities spent 330,000 yuan (US$48,000) on the surveillance effort.

6) According to an investigation report that the World Organization to Investigate the Persecution of Falun Gong published, in the first several years of the persecution campaign, which started in 1999, China spent one fourth of its national finances on the persecution effort each year. For example on February 27, 2001, 4 billion yuan (US$580 million) in funding was allocated to install surveillance monitors on buildings. In December 2012, 4.2 billion yuan (US$610 million) was spent to build brainwashing centers. 170,000 to 250,000 yuan (US$25,000 to $36,000) was spent daily just to staff the resources in Tian An Men square to stop Falun Gong followers from petitioning. The report also said that the authorities spent unknown sums of money to award whistle blowers, send spies overseas, and to buy out overseas media and organizations.

Source: Epoch Times, May 6, 2017
http://www.epochtimes.com/gb/17/5/6/n9112133.htm

Briefings | | May 8, 2017 | Social Stability

China News: Hainan Airlines Group Became the Largest Shareholder of Deutsche Bank

China News recently reported that China’s Hainan Airlines Group increased its investment in Deutsche Bank to ten percent, which made the Airlines the largest shareholder of the largest bank in Germany. The earlier largest shareholder was Blackrock (United States), which held 5.88 percent. The additional investment totaled 3.4 billion euro (US$3.71 billion). The Airlines Group has disclosed the information to the U.S. Securities and Exchange Commission (SEC). Deutsche Bank is listed on the German Stock Exchange and the New York Stock Exchange. It has around 100,000 employees. The Bank had suffered financial losses in 2015 and 2016. The Bank’s spokesperson Christian Streckert refused to respond to the question of whether the bank welcomed the fact that a Chinese company had become the largest shareholder. According to Hainan Airlines Group, the Group has become an investor in a large variety of industries and market sectors, with total assets valued over RMB 1 trillion (around US$144 billion). The Group’s 2016 total income was over RMB 600 billion (around US$86 billion).

Source: China News, May 3, 2017
http://www.chinanews.com/cj/2017/05-03/8214937.shtml

Briefings | | May 8, 2017 | Economy/Resources Geo-Strategic Trend

New Regulations Ban Non-State-Owned Organizations from Internet News Editorial Business

Well-known Chinese news site Sina recently reported that the State Internet Information Office just announced new Regulations for the Internet News Information Services. The new Regulations separated the Internet news editorial business from the Internet news operational business. Only state-owned organizations can conduct the editorial business. Non-stated-owned organizations can republish and redistribute authorized news on the Internet, with the condition that the sources, original captions, original authors and editors are carried over to the republished version. The republished sources of the Internet news must be traceable. The new regulations cover all websites, applications, forums, blogs, microblogs, public social media accounts, instant messaging and direct Internet broadcasting channels. All organizations providing internet news editorial services must first register with the government. These state-owned organizations are required to establish the position of Chief Editor, who will be held responsible for following the regulations.

Source: Sina, May 2, 2017
http://news.sina.com.cn/c/nd/2017-05-02/doc-ifyetstt4169079.shtml

Briefings | | May 8, 2017 | Government/Politics Information/Technology

People’s Daily: U.S. Tax Cuts Provoke “Tax War”

People’s Daily published an article commenting on the U.S. tax cuts reform program. The article stated that (the purpose of) the tax cuts is to start a tax war (in the world). It said, “With U.S. tax reform, taxpayers will benefit. Who will lose? Apparently it is the U.S. federal government and other countries that will possibly be affected.”

From the perspective of other countries, the U.S. tax cuts are actually provoking a tax war. In response, some powerful countries will join the competition. They will either be competing with their tax cuts, offering benefits at the expense of their neighbors, or setting up tax havens. At present, such signs are showing in Britain, France, and other developed countries. This will not only throw the international tax order into chaos; it will also diminish the results of the anti-international tax vicious competition that the ‘tax base erosion and profit transfer (BEPS) action plan’ under the G20 and other international economic policy coordination framework previously achieved. In addition, the U.S. tax reform will directly damage the export-oriented countries that are unable to engage in tax competition.”

“Overall, even if the U.S. tax reform program passes in Congress and moves forward smoothly, it will need to work well with other countries in international tax coordination so as to prevent mutual harm and endangering the global economy.”

Source: People’s Daily, April 28, 2017
http://paper.people.com.cn/rmrb/html/2017-04/28/nw.D110000renmrb_20170428_2-21.htm

Briefings | | May 4, 2017 | US-China Relations

China’s Spokesperson on North Korean Ships Unloading Coal in China’s Ports

While the United Nations has passed a resolution to restrict North Korea’s coal exports, there have been reports that China allowed some North Korean ships to dock or to unload their coal in China’s ports. China’s spokesperson gave an explanation for two incidents.

Geng Shuang, spokesperson of the Ministry of Foreign Affairs, on April 26, 2017:

Question: “According to what we know, six ships carrying coal from North Korea unloaded the coal in Tangshan port last week. This seems to contradict the Chinese government’s claim that China has not imported any North Korean coal since February 18. Could you please provide more information and explanation?”

Answer: “Due to the fact that some ships that carried North Korean coal were severely short of supplies, out of humanitarian consideration, China allowed them to unload the cargo. However that was not to allow its importation. Unloading and importing are two different things.”

Huang Songping, spokesperson for China’s General Administration of Customs, on April 13, 2017:

Lianhe Zaobao news reported that it asked about 10 North Korean ships that were allowed to dock at China’s port, which made observers wonder if (it meant that) China has not enforced the UN’s embargo.

Huang said that China’s Customs did not let that North Korean coal go through the import process. “Since China’s Customs did not allow the import, how to deal with the coal involved in shipping is something that is up to companies themselves to handle.”

Sources:
1. Sina, April 26, 2017
http://news.sina.com.cn/o/2017-04-26/doc-ifyepsra5643741.shtml
2. Lianhe Zaobao, April 14, 2017
http://www.zaobao.com.sg/znews/greater-china/story20170414-748310

Briefings | | May 3, 2017 | Geo-Strategic Trend

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.