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Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

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Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized

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

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

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China’s Local Bond Issuance at Record High

China’s Ministry of Finance released an update on local government bond issuance from January to August 2022. Total issuance reached RMB 6.3 trillion, up 4% annually, hitting a record high.

The issuance by Guangdong Province was the highest, with RMB 655 billion (US$ 89.7 billion) issued, followed by Shandong (RMB 480.3 billion or US$ 65.7 billion) and Sichuan (RMB 401.1 billion or US$ 54.9 billion). Other major issuers were Hebei, Jiangsu, Zhejiang (over RMB 300 billion or US$ 41 billion each), and Henan, Anhui, Hunan, Yunnan, Guangxi, Fujian (over RMB 200 billion or US$ 27.4 billion each).

The Ministry of Finance’s report categorized bonds as either new bonds for infrastructure projects or refinancing bonds to repay maturing debt. During the period January-August, new bonds totaled RMB 3.7 trillion (US$ 510 billion), down 12% annually, and refinancing bonds totaled RMB 2.6 trillion (US$ 360 billion), up 44%.

The rise in issuance of refinancing bonds reflects increased pressure facing local governments attempting to service mature debts. China’s weak economic conditions, real estate downturn, declining government revenue from land sales, and slow tax revenue growth have all made local governments more dependent on taking out new debt to repay old debt.

Source: Central News Agency (Taiwan), September 26, 2023
https://www.cna.com.tw/news/acn/202309260299.aspx

Briefings | | |   Economy/Resources

Mingpao: Hong Kong’s Container Throughput Fell 16 Percent, Far Behind Shenzhen

Mingpao, one of Hong Kong’s primary newspapers, recently reported that business has decreased at Hong Kong’s container terminals. This decrease contrasts with prior expectations that demand would increase following the easing of Covid-related commerce restrictions between Mainland China and Hong Kong. Hong Kong’s ports have taken a greater hit than the nearby Mainland Shenzhen Port in the Pearl River Delta.

Hong Kong’s container throughput during the first seven months of this year fell by 15.8 percent year-over-year, totaling 8.32 million TEU (standard containers). Container throughput for the month of July was 1.2 million TEU, down 17.9 percent compared with July of 2022. Meanwhile, the nearby Shenzhen port saw only a 4 percent decrease in year-over-year throughput during the first seven months (16.35 million TEU) and had a 7.6 percent increase in year-over-year throughput for the month of July (2.82 million TEU).

There has been basically no expansion of Hong Kong’s terminals in the past decade. Meanwhile, the layouts of the ports in Guangzhou and Shenzhen have become increasingly complete. Thus, some goods are no longer shipped through Hong Kong.

According to the Hong Kong Marine Department’s April 2023 ranking of the world’s top ten container ports, Hong Kong ranked ninth from 2020 to 2022, surpassed by Shanghai, Shenzhen, Guangzhou and other Greater Bay Area ports. Hong Kong was still ranked among the top three ports in the world between 2008 and 2012. It ranked fourth from 2013 to 2014 and fifth from 2015 to 2017.

Source: Mingpao, September 18, 2023
https://news.mingpao.com/pns/%E7%B6%93%E6%BF%9F/article/20230918/s00004/1694969700318/

Briefings | | |   Economy/Resources Geo-Strategic Trend

RFI: U.S. Companies’ Confidence in the Chinese Market Declines to Record Low

Optimism among U.S. companies operating in China has hit a “record low” according to a Radio France Internationale (RFI) Chinese Edition report on a survey conducted by the American Chamber of Commerce (AmCham) in Shanghai. More and more companies are seeking to withdraw investment from China even as the Chinese government is taking measures to boost the country’s sluggish economy.

The AmCham report stated that, after years of pandemic disruption and restrictions, 2023 was supposed to be a year of rebound in investor confidence and optimism. However, the Chamber’s 2023 survey of U.S. companies in China found that such a rebound has not materialized and business confidence has continued to deteriorate.

In addition to poor economic conditions, tensions between Beijing and Washington have also put heavy pressure on U.S. companies operating in China. The report indicated that respondents’ optimism about the next five years is the lowest on record: only 52 percent of companies, a decrease of three percentage points from the previous year, expressed optimism about their prospects for that time period. When asked about the top three challenges they face, 60 percent of the 325 surveyed companies mentioned that US-China relations were a significant challenge, and 60 percent of respondents mentioned economic slowdown as one of the top three headwinds. Around 40 percent of companies are planning to move or have already moved capital out of China, an increase of six percentage points over last year. Southeast Asia is the most popular alternative destination to which U.S. companies are moving their production and capital.

Source: RFI Chinese, September 19, 2023
https://tinyurl.com/2kkyuh26

Briefings | | |   Economy/Resources US-China Relations

CNA: Foreign Participation in Hong Kong Stock Market Plummets

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, according to a research report by Morgan Stanley, overseas institutions’ participation in Hong Kong stocks has dropped by one third since 2021. Overseas funds are gradually withdrawing from the Hong Kong stock market.

In the years 2016 to 2020, participation of overseas institutions in Hong Kong stocks accounted for 39.5 percent, 37 percent, 36.6 percent, 32.1 percent and 39.5 percent, respectively. In 2021, participation dropped sharply to 26.7 percent, and dropped to 23.1 percent last year and 24.6 percent today. Morgan Stanley’s research showed that overseas institutional funds continue to withdraw and continue to reduce allocations to Mainland China and Hong Kong stocks. Foreign investors are less interested in participating in Mainland Chinese and Hong Kong stock markets due to uncertainty in China-US relations, political instability across the Taiwan Strait, risks in the Mainland’s real estate market, and uncertainty about the pace of China’s economic recovery.

Source: CNA, September 12, 2023
https://www.cna.com.tw/news/acn/202309120033.aspx

Briefings | | |   Economy/Resources Geo-Strategic Trend

China Informally Asks EV Manufacturers to Use Domestic Parts

Taiwanese newspaper United Daily News quoted a report by Japanese outlet Yomiuri Shimbun saying that China has unofficially urged its electric vehicle (EV) manufacturers to utilize domestically-produced electronic components, including semiconductors. The Chinese government has additionally encouraged these EV manufacturers to set up specific targets for the incorporation of domestic parts, with potential penalties for non-compliance.

According to diplomatic sources in China, “The purpose of (Beijing’s) sending instructions verbally through former officials is to leave no evidence of exclusion of foreign investment.” Insiders said that, as Chinese automobile manufacturers swiftly shift from gasoline-powered vehicles to electric ones, they have established their own systems for production of electronic components and they have vertically integrated production of nearly all related technologies except the drivetrain.

Source: United Daily News (Taiwan), September 17, 2023
https://money.udn.com/money/story/5599/7445931

Briefings | | |   Economy/Resources

Mongolian Activist Accuses CCP of Cultural Eradication and Genocide

Enghebatu Togochog, the Director of the Southern Mongolia Human Rights Information Center (SMHRIC), has accused China and the Chinese Communist Party (CCP) of cultural eradication and genocide in Inner Mongolia. According to Togochog, the “bilingual education” imposed in the region is effectively monolingual, with instruction predominantly in Mandarin and with only minimal education in the Mongolian language.

The CCP prohibits the use of Mongolian language in schools, leading to what Togochog describes as systematic erasure of Mongolian culture. For example, the Inner Mongolia Autonomous Region Books and Periodicals Distribution Industry Association issued a notice in August instructing its members to cease sales of the Mongolian-language book “General History of the Mongols” and to remove it from shelves. Togochog says that this is just one example of Mongolian literature being banned, with schools, libraries, bookstores, and other outlets prohibited from distributing  Mongolian-language publications, books, journals, etc.

Togochog also accused the CCP of conducting genocide in Inner Mongolia.

Source: Epoch Times, September 19, 2023
https://www.epochtimes.com/gb/23/9/19/n14076767.htm

Briefings | | |   Government/Politics

CCP Begins Brainwashing Hong Kong Students

The Chinese Communist Party (CCP) has a history of effectively indoctrinating people, starting from kindergarten. This practice is now extending to Hong Kong’s students.

In June of this year, all freshman-year students of Hong Kong’s Pui Kiu Middle School wrote a letter to Xi Jinping. In his response, Xi encouraged these students “to gain a deeper understanding of global developments and to explore the history, culture, and realities of our country.” The Hong Kong education sector took this letter as a “sacred message” and reacted by implementing various “learning sessions.”

Reports have emerged suggesting that the Hong Kong government is considering a mandate that would require all Hong Kong primary and secondary school students to visit “holy” sites of the communist revolution in China so as to instill “the communist spirit” in the youth.

Hong Kong’s students were at the forefront of resistance against the CCP during the 2019-2020 anti-extradition protests. The CCP is now actively working to mold Hongkongese youth into conforming supporters of the regime.

Source: Newtalk, September 18, 2023
https://newtalk.tw/news/view/2023-09-18/888818

Briefings | | |   @CS Government/Politics

Xi Jinping Urges Secretaries to Increase Their Political Alignment

High-level CCP official Cai Qi delivered a message from Xi Jinping in a speech to China’s National Conference of Secretaries for Party Committees and Government Offices, urging the secretaries present to increase their political alignment with the CCP’s Central Committee. Cai Qi is a member of the Chinese Communist Party (CCP) Politburo Standing Committee and the Director of the General Office of the CCP Central Committee. The National Conference convened in Beijing on September 13th and 14th.

The speech emphasized the need for a “new atmosphere” and working approach within the general offices of Party committees and government bodies. Such committees and bodies are typically run by secretaries supporting top officials. Xi’s message urged these secretaries to “enhance their political alignment, uphold the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, broaden their perspective to encompass the nation’s broader objectives, deepen the development of political institutions, steadfastly uphold the centralized and unified leadership of the Party Central Committee, and consistently align their ideology, politics, and actions with the Party Central Committee.”

{Editor’s Note: There have been rumors that the arrest of Li Yuchao, the former Commander of the Chinese Military’s Rocketry Division, was triggered by a report from his secretary, and that Li Yuchao privately disagreed with Xi Jinping’s plan to take Taiwan by military force. If the rumors are true, the incident with Li Yuchao’s secretary may have motivated Xi’s message to the secretary conference, encouraging secretaries to be loyal to Xi and the CCP’s Central Committee rather than to the officials they serve.}

Source: People’s Daily, September 15, 2023
http://ztjy.people.cn/BIG5/n1/2023/0915/c457340-40078335.html

Briefings | | |   @CS Government/Politics