Chinascope – Page 554

Adidas Moved More Manufacturing Work from China to Germany

Well-known Chinese news site Sina recently reported that the sports product vendor Adidas decided to move a portion of its Chinese manufacturing work back to its robotic German facility, expecting reduced costs. Adidas entered China in 1997 for its manufacturing needs. However, starting in 2012, Adidas closed its Suzhou factory in Eastern China and began its strategy of leaving China due to increasingly higher labor costs. According to the International Labor Organization, the cost of labor in China has doubled since the year 2006. Compared to previous Adidas move-away directions, typically Southeast Asia countries, this time the manufacturing work moved to its home base in Germany, where automated robotic manufacturing lines only needed 160 people. Adidas is also developing equipment that can manufacture custom shoes right at their retail locations. In recent years, big-ticket brands such as Nike and New Balance have all focused on customization, which is not suitable for traditional labor-intensive factories. Another reason for Adidas to leave China was that German workers have much higher productivity. More and more companies are moving their manufacturing capabilities out of China. Adidas’ archrival Nike started its exit move in 2009. The same thing is occurring not just in the sports product category, but in the apparel industry as well, with brands like Zara and H&M. It seems China’s labor costs no longer matter.

Source: Sina, April 12, 2017
http://finance.sina.com/gb/economy/sinacn/20170412/23051585709.html

Briefings | | April 18, 2017 | Economy/Resources

Apple Daily: PLA Lifted Readiness Level – Potentially Sending Troops to North Korean Border

One of the primary Hong Kong newspapers, Apple Daily, recently reported that the Chinese People’s Liberation Army’s (PLA) Northern Military Theater lifted its combat readiness level to Level Four. At the same time, part of the troops in the Middle, Eastern, Southern, and Western Theaters also lifted their combat readiness to the same level. The 40th Infantry Brigade from the Southern Theater, the 9th Armored Brigade from the Western Theater, the 3^rd, the 196^th, and the 77^th Motorized Infantry Brigade from the Eastern, Middle, and Northern Theaters, respectively, were required to be prepared to deploy to the North Korean border. If the order is given, they may take four to twelve days to reach their designated positions. The number of troops totaled 25,000. Apple Daily reported based on information that the the China Information Center for Human Rights and Democracy released. A third party has not confirmed the information.

Source: Apple Daily, April 11, 2017
http://hk.apple.nextmedia.com/realtime/china/20170411/56550531

Briefings | | April 18, 2017 | Defense/Military Geo-Strategic Trend

Publicly Traded Real Estate Companies to Face a Debt Payback Peak in 2018 and 2019

Guangming Daily carried an article on the increased debt among publicly traded real estate developers. The article disclosed that as of April 13, 86 publicly traded real estate companies had filed their 2016 annual report and that their total debt exceeded 2.750 trillion yuan (US$0.4 trillion), up 25.5 percent compared to last year, while their total capital was 3.75 trillion (US$0.54 trillion), up 24.1 percent from last year. Out of 86 real estate companies, 15 to 17 percent of the companies exceeded an 80 percent debt to asset ratio. Thirty-nine to 45 percent of the companies had a total debt exceeding 10 billion yuan (US$1.45 billion), while 17.4 percent of the companies had a debt to asset ratio greater than 80 percent. Based on the available financial data for 63 companies, even though their short term debt dropped by 6.5 billion (US$0.94 billion) their debt was still 108.7 billion yuan (US$15.8 billion). According to the article, most of the companies will face a debt payback peak in 2018 and 2019.

Source: Guangming Daily, April 14, 2017
http://economy.gmw.cn/2017-04/14/content_24202805.htm

Briefings | | April 18, 2017 | Economy/Resources

Global Times: China Increased its Investments in Pakistan

Global Times recently reported that China has approved a proposal to increase its investments in the China-Pakistan Economic Corridor to around US$62 billion. When the project was first kicked off, the original investment level was US$46 billion. There was one increase to US$55 billion. Pakistani officials also revealed the information at an infrastructure investment conference. According to the Economic Corridor Plan, most of these investments will be spent in the areas of electricity generation and distribution. The newly approved additional investments will be directed to various different industries, including constructing industrial parks. At the same time, talks are still underway to include the City Ring Railway of Karachi within the scope (of its investments).

Source: Global Times, April 14, 2017
http://oversea.huanqiu.com/article/2017-04/10474542.html

Briefings | | April 18, 2017 | Geo-Strategic Trend

Xinhua: Eight “Red Line” Boundaries that Party Officials Are Forbidden to Cross on WeChat

Xinhua published an article which listed eight boundaries that Party officials shouldn’t cross on WeChat, a popular social media in China. The requirements include:
1) Providing irresponsible commentaries on the Party’s policies and causing damage to the Party’s unity
2) Spreading pornographic pictures and videos
3) Spreading Internet rumors
4) Accepting bribes through a WeChat “red envelope” account (a means of transferring money through WeChat)
5) Using a WeChat “red envelope” account to buy election votes
6) Leaking confidential national and company information
7) Conducting online WeChat business
8) Posting improper online commentaries

Source: Xinhua, April 16, 2017
http://news.xinhuanet.com/politics/2017-04/16/c_1120819130.htm

Briefings | | April 16, 2017 | Government/Politics

China Faces Shortage of Tens of Millions of High Tech Workers

According to an article in Xinhua, China faces a labor shortage of tens of millions of high tech workers while its college graduates are struggling to find a job. The article stated that in Sichuan Province there are only 6.8 million technical workers and only 1 million of them are high tech workers. In the Hangzhou labor market, 71.4 percent of the companies lack high tech workers. In Tianjin, the ratio of the demand for high tech workers to the supply is 10:1. The statistics also indicate that, due to workers’ low skill level, Chinese labor productivity is only at 40 percent of the world’s average or 7.4 percent of the rate in the U.S. The article pointed out that this is one of the main reasons that China is a giant but not strong.

Source: Xinhua, April 17, 2017
http://education.news.cn/2017-04/17/c_129542053_2.htm

Briefings | | April 16, 2017 | Information/Technology

Local Chinese Mined the World’s Oldest Fossils and Sold Them as Phosphate Fertilizers

Guizhou Weng’an County’s phosphate mining area of the Ediacaran stratigraphy, which was discovered 19 years ago, has been found to have the world’s oldest paleontological fossils (about 106 million years old). In recent years, however, large-scale mining activities have been developing the area. As a result, the fossils have been sold as phosphate fertilizer. The scientists from many countries in the world were stunned; they stood up and issued the most serious warnings (about such mining).

“Weng’an Biota not only belongs to Weng’an; it also belongs to China and to all of mankind. The whole world’s attention is on it. The action is irreversible and the fossils are an irreplaceable and precious natural heritage. The outcome should not just be a few bags of phosphate fertilizer.” Top archaeological and paleontology scholars from China, the United States, Britain, and other countries recently gathered at the Beidou Mountain phosphate mining site in Weng’an County and appealed to the Chinese authorities.

Zhu Maoyan, a researcher at the Chinese Academy of Sciences Nanjing Institute of Geology and Paleontology, said, “Last November we already found the problem very serious. We located three sites still having research value as retention sites, but when we had an onsite inspection on April 1, one of the sites had already disappeared. It’s completely gone.”

Source: Kwong Wah Daily, April 11, 2017
http://www.kwongwah.com.my/?p=301673

Briefings | | April 12, 2017 | Economy/Resources

Duowei: Chinese Arms Sales in Thailand Harbor Beijing’s Geo-Strategy

As an important neighbor of China, Thailand has purchased a variety of weapons and equipment from China, including the S-26 conventional submarine, VN-1 eight armored combat vehicles, Kashi-1C air defense missiles, guards-1B long-range rockets and more. On April 4, Thailand decided to purchase 10 more China VT-4 main battle tanks. It is less than a year since the last time Thailand bought China’s main battle tanks. In fact, not long ago, Bangkok, to a large extent, still chose to buy defense equipment from the United States and its Western allies.

China’s arms sales to this U.S. ally, Thailand, is intended to convey its strategic intentions to the United States: It is important for China to maintain the stability of the surrounding areas, including the stability of the South China Sea. China’s arms sales to Thailand cannot fundamentally change America’s Asia-Pacific policy, but such sales can be used as a means to show China’s attitude towards U.S. Asia-Pacific policy. Its political significance is far greater than its economic and military significance.

China’s military exchanges with Thailand, as well as with other countries and regions at different levels also show the outside world that China has the intention to bear more responsibility to maintain regional security.

The China-Philippines Scarborough Shoal incident, the Sino-Japanese Diaoyu Islands conflict, the China and South Korea “THAAD” dispute, and the Sino-U.S. “freedom of navigation” incident in the South China Sea all have made China’s peripheral security situation deteriorate. The United States’ shadow in these events was everywhere. In the military field, although China has made progress, the gap between the two countries is still very big. In order to encourage the United States to accept China’s rise, it is not enough to stay at the level of being firm strategically. Perhaps more and more intensive arms trades will show that China’s desire to play a more leading role in regional security is not only at the stage of having the idea, but has been put into action.

Source: Duowei, April 5, 2017
http://global.dwnews.com/news/2017-04-05/59808944.html

Briefings | | April 11, 2017 | Geo-Strategic Trend US-China Relations

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.