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Foreign Direct Investment in China Declines Amid Economic Challenges and Capital Outflows

China’s State Administration of Foreign Exchange released data on China’s international balance of payments for the period April-June, showing the first negative growth in foreign direct investment (FDI) in three quarters. Due to business contraction, new investment in China by foreign entities (e.g. construction of factories) was lower than capital withdrawals from China.

Foreign companies’ direct investment in China decreased by $14.8 billion, with outflows exceeding inflows for factory construction and M&A funds. This capital outflow surpassed the $12.1 billion in negative growth recorded in July-September 2023, which was the first quarter of negative growth since collection of such statistics began in 1998.

China’s economic stagnation, caused by insufficient domestic demand, has reduced foreign investment interest. The turning point for potential investors was Beijing’s enforcement of strict COVID-19 controls during the years following the start of the pandemic.

The Shanghai lockdown in spring 2022 caused economic turmoil, leading to a significant decline in FDI during the period April-June 2022. Although strict COVID policies ended in January 2023, China’s economy has not fully recovered, now suffering from weak domestic demand linked to the country’s current real estate slump.

China’s economic recovery remains weak, with Q2 2024 GDP growth slowing to 0.7% quarter-on-quarter, down from 1.5% in Q1. Net debt outflows from foreign-invested enterprises in China reached $22 billion, the highest since comparable data became available in 1998, indicating that overseas parent companies are withdrawing funds from their local subsidiaries.

Source: Nikkei, August 12, 2024
https://zh.cn.nikkei.com/china/ceconomy/56392-2024-08-12-10-14-19.html

China Successfully Launches First Batch of Satellites for Massive Internet Constellation to Compete with Starlink

On August 6, China’s Long March 6 rocket was launched from the Taiyuan Satellite Launch Center, successfully placing the Qianfan Polar Orbit 01 satellite group (18 satellites) into the designated level of orbit.

According to Reuters, China intends to build a massive internet constellation to compete with the Starlink satellite network operated by U.S.-based SpaceX. Starlink is an expanding commercial broadband satellite constellation with approximately 5,500 satellites in space, providing service to consumers, businesses, and government agencies.

The recent Chinese rocket launches are part of the “Qianfan Constellation (千帆星座)” plan, also known as the “G60 Starlink” plan, which aims to deploy over 15,000 low-orbit satellites. The “Qianfan Constellation” is one of three “Ten-Thousand-Star Constellation” projects that China hopes will help narrow its gap with SpaceX. The Qianfan Constellation plan aims to launch 108 satellites this year, 648 satellites by the end of 2025, to provide “global network coverage” by 2027, and to complete the deployment of 15,000 satellites by the end of 2030.

Source: Xinhua, August 7, 2024
http://www.news.cn/milpro/20240807/c7833a3629cd4ba18d1c363d7d7c56ea/c.html

Sino-North Korean Relations Show Signs of Cooling

South Korean media and some experts believe that, after Kim Jong-un’s visit to Russia and his summit with Vladimir Putin in September 2023, there are subtle signs of changes in the relationship between China and North Korea.

Earlier, several South Korean media outlets reported that the “bronze footprints” left by Kim Jong-un during his visit to China’s Dalian city in May 2018, where he walked with Xi Jinping on the Bangchuidao beach, had disappeared by May of this year. The original location of the “bronze footprints” has been covered with asphalt and no traces are visible. Additionally, the South Korean newspaper Chungang Ilbo reported that, in early July of this year, China demanded the repatriation of all North Korean laborers within its borders. North Korea is also transferring some of its IT workers from China to Russia; these workers earn foreign currency by conducting cyberattacks. Such overseas laborers are a significant source of foreign currency for North Korea.

The Chungang Ilbo quoted sources indicating that Kim Jong-un had instructed North Korean diplomats working in China to “not be intimidated by China.” This directive was issued following Putin’s visit to Pyongyang in June of this year and his signing of a “comprehensive strategic partnership” agreement. North Korea has also tightened control over the Chinese expatriates within its borders, restricting their movement and limiting their contact with North Korean residents. On July 27, the Chinese ambassador to North Korea was notably absent at an event in Pyongyang commemorating the 71st anniversary of the Korean War armistice. Ambassadors from Russia, Vietnam, and Cuba were present at the event.

Some experts caution that apparent changes in Sino-North Korean relations should not be overinterpreted. The relationship between the countries may not grow as rapidly as the relationship between North Korea and Russia, but this does not necessarily indicate that North Korea is abandoning its ties with China.

Source: Aboluo, August 13, 2024
https://www.aboluowang.com/2024/0813/2090571.html

The First Known Survivor of CCP’s Forced Organ Harvesting Speaks Out in Washington, DC

Cheng Peiming, a 58-year-old Chinese man from Northeast China, is regarded as the first known survivor of the Chinese Communist Party’s (CCP’s) program of forced live organ harvesting from prisoners of conscience. On August 9, at a forum in Washington, D.C., he publicly shared his experience in which the Chinese authorities forcibly removed his organs twenty years ago.

Cheng stated that he was repeatedly detained and tortured by the CCP for practicing Falun Gong. In 2002 he was sentenced to eight years in prison. In July 2004, in a state of good health, he was dragged from prison to a hospital where guards tried to make him sign a form of consent for surgery. When he refused to sign, the guards knocked him down and anesthetized him. When he woke up three days later, Cheng found himself handcuffed to a bed with a 35-centimeter-long incision on his chest. In 2006, prison guards again took Cheng to a hospital. He said, “They had no reason for any surgery, so I knew I would be killed.” He managed to escape while the guards were sleeping. Cheng spent the next nine years hiding in China and managed to flee to Thailand in 2015. Four years ago, with assistance from the U.S. government, he came to America through the United Nations refugee program.

When media reports on China’s forced organ harvesting practices first emerged in 2006, Cheng realized that this was what had happened to him. It was only after arriving in the U.S. that transplant specialists confirmed through scans that part of his liver and left lung had been removed. Cheng said that he still cannot feel certain parts of his chest and struggles daily with severe pain throughout his body.

In 2019 an independent tribunal in London (“The China Tribunal”) ruled that the CCP has committed crimes against humanity through its continuous harvesting of organs from minority groups, including Falun Gong practitioners. Two years later, a United Nations human rights expert reported that, in addition to Falun Gong practitioners, other minorities, including Uyghurs, Tibetans, Muslims, and Christians detained in China, had also become targets of forced organ harvesting. In June of this year the U.S. House of Representatives passed the Falun Gong Protection Act, aimed at compelling the CCP to end its persecution of Falun Gong and the forced harvesting of organs from detained practitioners.

Source: Radio Free Asia, August 9, 2024
https://www.rfa.org/mandarin/yataibaodao/renquanfazhi/kw8-forced-organ-harvesting-08092024135324.html

Major Scandal Unfolds: Illegal Corpse Trade and Bone Harvesting Operation Exposed in China

On August 8, Beijing attorney Yi Shenghua made an online disclosure of case materials related to the theft, insult, and intentional destruction of human corpses, triggering a media frenzy in China. The alleged company involved in such activity is Shanxi Aorui Biological Materials Co., Ltd. (Shanxi Aorui), established in 1999 as a subsidiary of the state-owned China Radiation Protection Research Institute. The company’s business scope consists of research, development, production, and sale of “allogeneic bone implantation materials.” The company is accused of illegally purchasing corpses and limbs and then engaging in brutal dissection, removal of flesh, cleaning, irradiation, etc., of these bodies and bones, to produce “allogeneic bone implantation materials” during the time period from January 2015 through July 2023. The company had a total revenue of 380 million yuan (US$ 53 million) from the period 2015 through 2023.

Allogeneic bones (from humans) are a good source of material for bone transplantation and, per established international medical standards, should come from explicit donors. Shanxi Aorui’s sources generally did not sign up to be donors, and the family members of the deceased were not aware of the Shanxi Aorui activities.

There are currently 75 criminal suspects identified; all have confessed to criminal activities consistent with the allegations against Shanxi Aorui. The business conducted operations in Chongqing City and provinces of Sichuan, Guangxi, Shandong, Guizhou, and Yunnan.

Frighteningly, the case is linked to China’s live organ transplant industry. Qingdao University Affiliated Hospital is one of the hospitals designated by the Ministry of Health for performance of liver transplants. Between 2015 and 2021, the hospital’s Associate Chief Physician Li Zhiqiang at the Liver Disease Center dismembered organ donor corpses and stored them in a freezer before selling them to Shanxi Aorui, with each corpse fetching a price between 10,000 and 22,000 yuan. Shanxi Aorui picked up five deliveries from Li. The hospital’s website listed Li as the Deputy Director of the Organ Transplant Center and Director of the Intensive Care Unit. After the incident gained attention, the hospital removed Li’s resume from its website.

Source: Epoch Times, August 8, 2024
https://www.epochtimes.com/gb/24/8/8/n14307307.htm

China Revises Military Personnel Benefits Regulations for 2024 Implementation

China’s State Council and Central Military Commission have announced revised “Regulations on Preferential Treatment for Military Personnel,” effective October 1, 2024. The new regulations aim “to ensure state support for military personnel, inspire their dedication to defending and building the country, strengthen national defense and military modernization, and make military service a respected profession.”

Key revisions include:

1. Emphasis on “Communist Party leadership” and establishment of principles for military personnel benefits. The benefits are to “balance treatment with contribution, spiritual with material rewards, and care with service.”

2. Adaptation to new national defense and military requirements via “clarification of benefit recipients, of management systems, and of financial responsibilities between central and local governments.”

3. Enhancement of support measures for military personnel: ensuring access to social security, public services, and appropriate benefits. This includes increasing compensation for families of honored deceased personnel and inviting beneficiaries to major ceremonial events.

4. Improvement of service procedures and capabilities: improved processes for one-time compensation payments as well as refinement of disability rating assessments.

The revised regulations stress the importance of “dynamically adjusting benefit standards to align with economic and social development and military needs.” They also “establish care and assistance mechanisms, particularly for beneficiaries facing special difficulties.”

Source: Radio France International, August 13, 2024
https://rfi.my/As8X

China Sends College Graduates Overseas to Alleviate Unemployment Pressure

China faces a severe unemployment challenge among young people, even those who have graduated from college.

Recently, the University of Science and Technology of China (USTC) in Anhui advertised a requirement of “master’s degree or above” for a security guard position. This has sparked mems and comments such as “A master’s degree just to guard the gate.” Also, more and more Chinese universities have started to extend the Master’s program from 2 years to 3 years.

Chongqing city has taken a new approach this year by assisting university graduates in securing international employment. Over 70 recent graduates from eight universities in Chongqing and Sichuan province have been referred by a state-owned enterprise to work in the middle east country Oman. According to Chongqing Daily, this international labor cooperation scheme is promoted by Chongqing Foreign Enterprise Service Co., Ltd., a company affiliated with the state-owned Chongqing Development Investment Company. Positions offered by Omani companies mainly involve technical roles and warehouse management positions, with benefits including food and accommodation. Monthly salaries range from 12,000 to 18,000 yuan (US$ 1,670 to 2,510), with 14 months’ pay and two free round-trip tickets annually. Employees can choose to renew their contracts after two years of employment. The graduates going to Oman are from institutions such as Chongqing Normal University and Chongqing Industrial Vocational and Technical College. Many of these graduates majored in chemical engineering, with some others majoring in electrical automation or English.

Source: Radio Free Asia, July 30, 2024
https://www.rfa.org/cantonese/news/jobs-07302024080415.html

CCP’s Dark Operations: County Party Secretary’s Sexual Assault of Subordinate Township Party Secretary

Recently, a Chinese case of sexual assault within the CCP has generated significant discussion online. The case involves Mao Qi, the CCP Party Secretary of Wannian County, Shangrao City, Jiangxi Province, who is accused of sexually assaulting Li Peixia, the party secretary of a subordinate local township.

On July 25, Li Peixia’s father reported online that Mao Qi had continuously molested and sexually assaulted his daughter. Li’s father stated that, on May 23, Li Peixia had a dispute with Mao Qi and declared that she would report him to the disciplinary inspection commission. However, three days later, the Wannian County disciplinary inspection and supervision commission took Li Peixia away. She has been out of contact and has not been seen in public ever since.

Li’s father traveled to a different province (to avoid being blocked by the local authorities) and then posted three audio recordings online; the recordings were evidence of Mao’s sexual assault against Li. Li Peixia had left her family a USB drive with eight recordings and said that, if something were to happen to her, this USB drive could save her life. The following day, a joint investigation team from Shangrao City met with Li’s father. He handed over the evidence and requested to see his daughter. So far his request has not been honored.

On the evening of July 26, the Jiangxi authorities announced that Mao Qi had voluntarily confessed and was under disciplinary review and supervisory investigation. Netizens, reviewing Mao Qi’s resume online, noted that he has gone through rapid promotions over the years, suggesting that he is likely to have backing by CCP members at higher ranks.

On July 29, Internet commentator Cai Shenkun revealed on the X platform that Lan Yun, the Secretary of the Wannian County Discipline Inspection Commission, confessed to the higher-level disciplinary inspection commission that Mao Qi called her into his office at 7 PM on May 25 and said that Li Peixia had been disobedient and was incapable. Lan said that Mao told her that Li had threatened to report Mao to higher authorities. Mao ordered Lan to take several actions immediately: 1. Issue a document ordering removal of Li Peixia from all of her positions on the grounds of serious violations; 2. Arrest Li on that evening and interrogate her regarding her corruption; 3. Seize all of Li’s phones and computers to prevent her from disseminating information; 4. Detain her for a few months, even if no problems are found, in order that there would be sufficient time to find some issues with her; 5. Monitor Li’s family movements and control them if they attempt to petition on Li’s behalf.

The Chinese Communist Party (CCP) has silenced discussion of these topics on the Internet. Li’s whereabouts, and whether she is still alive, are currently unknown.

This case exposes the internal corruption and dark operations within the CCP:

  1. Mao’s orders to the disciplinary inspection commission to take a comprehensive actions against Li Peixia shows that, within the CCP system, higher-ups can act with impunity and order opaque operations, leaving individuals with no security.
  2. Shangrao City joint investigation team promised Li’s father a “fair and thorough investigation,” took his evidence from him, and requested that he delete the audio recordings that he posted online. They said they would report his request to see his daughter to higher authorities, but they have since been unresponsive. Their actions may simply be a result of following the CCP’s “stability maintenance” strategy, which means protecting the image of the government and officials by quickly blocking dissemination of information and “calming” public opinion online.
  3. The fact that Mao was able to order the disciplinary inspection commission to arrest Li Peixia reveals that the disciplinary inspection commission is not an independent oversight body but rather a tool of the CCP used for internal purges.
  4. Li Peixia was clearly aware of the risks posed by going against Mao. She knew that, once she had a falling out with higher-level officials, Mao and the CCP system could go to any lengths to silence her, including potentially killing her. Thus, her only hope was to go to the internet and to hope that public opinion might be able to save her life. It seems that publicly airing evidence of her plight was not sufficient to save her, however.

Source: Epoch Times, August 3, 2024
https://www.epochtimes.com/gb/24/8/3/n14304155.htm