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Changjiang Times: Real Estate Development Companies Had Hiring Freezes or Laid Off Employees to Deal with Mounting Debit

Since 2018, many real estate development companies have been under tremendous pressure when trying to deal with the tightening of the financing channel, as well as serious cash flow and debt issues. According to an article that Changjiang Times published, a number of large publicly traded real estate companies have either initiated hiring freezes, closed down unprofitable projects and departments, or laid off employees. The list of companies includes Greenland Holdings, CK Asset Holdings Limited, Vanke, R&F Properties, and Agile Properties. The article also quoted statistics which revealed that, in the first six months of 2018, the total debt among 136 publicly traded real estate companies reached 10 trillion yuan (US$1.46 trillion) and their average debit ratio was at 79.1 percent, which was the highest since 2005 and up 33.33 percent from 2016. In the first seven months of 2018, forty real estate companies borrowed 410.5 billion yuan (US$60.08 billion), which is equivalent to the total amount borrowed in the second half of 2017. At the same time, many real estate companies were stopped from issuing bonds in order to raise cash and fewer and fewer financing options were available for them. The article stated that, since the average financing term of a real estate debit is three years, these real estate companies will have to deal with paying off heavy debts that are due in 2018 to 2019.

Source: Changjiang Times, September 3, 2018
http://www.changjiangtimes.com/2018/09/588297.html

Guangming Daily: Strengthen the Party’s overall Leadership over Propaganda and Ideological Work

A Guangming Daily editorial on September 3 re-emphasized the role of the Chinese Communist Party in leading China’s propaganda and ideology work.

The article said, “The more complicated the situation that the propaganda and ideology work face and the more arduous the task, the more important it is to strengthen the Party’s leadership. . . . General Secretary Xi Jinping delivered an important speech at the National Conference on Propaganda and Ideology Work. He stressed that it is necessary to strengthen the party’s overall leadership over propaganda and ideology work and clearly to adhere to the principle that the Party takes charge of propaganda and the Party takes charge of ideology.”

“Propaganda and ideology work . . . matter for the future and the destiny of the Party and the country. To strengthen the party’s overall leadership over propaganda and ideology work, one must resolutely safeguard the core position of General Secretary Xi Jinping, resolutely safeguard the Party’s authority and centralized leadership, and firmly adhere to the correct political direction.”

“Ideology work is an extremely important task of the Party. While we are doing our best in economic development, we cannot for a second relax and weaken the work of ideology. We ought to have an adequate estimate and preparation for the complexity and lasting nature of the struggle in the field of ideology.”

Source: Guangming Daily, September 3, 2018
http://news.gmw.cn/2018-09/03/content_30942552.htm

China Promised US$60 billion at the China-African Summit

On September 3, Chinese President Xi Jinping delivered a keynote speech at the opening ceremony of the 2018 Beijing Summit of the Forum on China-Africa Cooperation.

Xi promised that, over the next three years, China will implement eight initiatives in terms of China-Africa cooperation in the fields of industrial promotion, infrastructure, trade, green development, capacity building, health, cultural exchanges, peace, and security.

China said it would establish a China-Africa Economic and Trade Expo and provide 1 billion yuan (US$146.3 million) in emergency aid to disaster-affected African countries. China will also implement 50 projects on trade facilitation and establish 50 aid projects on green development and environmental protection. In addition, China proposed that it would provide vocational training for African youth and upgrade 50 medical and healthcare assistance projects in Africa. Also, China plans to establish a China-Africa fund on peace and security cooperation for joint peacekeeping.

In total, China is to provide US$60 billion in financial support to Africa to accomplish the above initiatives.

In his speech, Xi said that China and Africa should expand their political dialogue and policy communication at all levels, strengthen mutual understanding and mutual support on issues involving core interests and major concerns, and maintain close cooperation on major international and regional issues.

Source: Xinhua, September 4, 2018
http://www.xinhuanet.com/politics/2018-09/04/c_1123374166.htm

Malaysia Air Asia Cancelled Its China Investment Plan

Well-known Chinese news site Tencent News recently reported that Malaysia’s airline company Air Asia just announced it is cancelling its plan to establish a joint venture airline in Zhengzhou, Henan Province, China. In May 2017, Air Asia signed a deal with the China Everbright Group and the Henan government in Beijing to form the new airline focusing on the low-cost passenger air travel market. Air Asia was committed to investing in infrastructure construction, pilot training, airline crews, and logistics. However, Air Asia’s latest announcement said the signed memo had “expired” and it would not be renewed. The Malaysian airline did not explain the reason. The Malaysia government recently just called off two major infrastructure plans which were to be funded with loans from China. That move was widely considered as a major setback for the Chinese One Belt One Road initiative.

Source: Tencent News, September 1, 2018
https://xw.qq.com/cmsid/20180901A1M6DL00

Russian Media Critical of China’s GDP Bragging

In 2010, China overtook Japan and became the world’s second largest economy. However, Russian media commented that this happened because China artificially inflated its GDP figures.

Kommersant (The Businessman), Russia’s nationally distributed daily newspaper, published a long commentary on August 25, entitled “The Deception of the GDP.” The article claimed that some of the powerful ruling class have used GDP as a tool to achieve its goals. Although GDP shows the total economic activity of a country or a region for a period of time, can it really represent national strength?

For example, the article says that modern China is a vivid example of GDP worship. The amount of non-productive economic activity in China is huge, which artificially increases the GDP figure. To a certain extent, this is very similar to the practices of the former Soviet Union and Japan in 1980. Everyone knows what happened to those two countries.

According to the article, Beijing is using this at least discounted GDP figure to compare with and confront Western GDP figures and the results can be imagined. This is not to say that there is no unproductive economic activity in the western market economies, but it is far less than such economic activities in China.

The article explained that the growth of GDP does not mean the growth of economic strength. For example, a company built a large stadium. This investment activity did contribute a huge amount to GDP, but it did not create wealth for the company. On the contrary, it reduced the company’s wealth and even contributed to its financial difficulties. In this case, the growth of GDP negatively impacted economic power.

An economic analyst and TV show host commented on the Chinese economy, saying that it is a huge bubble and it may crash at any time. He once said at a seminar, “There is a very simple statistic to know: 75 percent of the Chinese people’s wealth is in the property market. You don’t need to explain anything else. The Chinese leaders think they are the smartest and can shrink the bubble slowly and painlessly.”

Russian experts said that many Chinese economics experts have graduated from American universities and they should understand the economy. The calculation of real economic strength should exclude non-productive financial investment from GDP, make adjustments for income distribution, and replace the GDP value with calculations of the basic assets of the society.

The problem in China is that the ruling class has its own purposes. Using data to show economic growth seems more important. Gradually, they have come to believe in the data that they themselves artificially inflated.

Source: Radio Free Asia, August 28, 2018
https://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/lxy-08282018095756.html

The Battle for Man’s Soul

— Preface —

There Was Once a Great Land on Earth

There was once this great land on earth, where, according to legends, Goddess Nü Wa melted the five-colored stones to mend the damaged heaven and molded yellow earth to create human figures, which then started human beings, generation after generation Continue reading

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