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Blood in the cracks
China should redefine itself if it wants to recapture the 'glories' of its past, but the inertia of its current trajectory suggests it won't.
Contenders for party chairman at the next party congress, due to be held around October this year. Art: Mark Corry
China is running out of miracles.
As Bloomberg reports, China’s youth jobless rate scraped just short of 20% in July.
The growing joblessness rate is just one of many red lights blinking in China at present, but it’s a significant one given that youth dissatisfaction has caused major problems in the past.
Its continued climb also represents a growing concern for policy makers, given that jobs figures are gaining increasing attention as top leaders downplay the country’s gross domestic product growth target. It’s also a threat to the kind of stability the ruling Communist Party wants in the run-up to a major congress later this year that’s expected to give President Xi Jinping a precedent-defying third term in power.
Another Boomberg report – what do these guys have against Chairman Xi? – documents the problems piling up for China’s chairman of everything:
Xi [Jinping] … now has just a few months to rein in spiraling economic crises as well as flaring tensions with the US since his government responded to House Speaker Nancy Pelosi’s visit to Taiwan with its most provocative military drills in decades.
Economic data for July suggest confidence is collapsing among China’s businesses and households — retail sales, industrial output and investment all slowed last month … That means even a surprise interest-rate cut by the central bank is unlikely to help much because there’s little appetite to borrow.
The rate cut happened earlier this week, the first since mid-January, reports the South China Morning Post amid pressure from Covid-19 outbreaks and tensions with the US over Taiwan and general economic malaise.
The People’s Bank of China (PBOC) unexpectedly lowered the rate of one-year medium-term lending facilities to 2.75 per cent from 2.85 per cent when selling 400 billion yuan (US$59.3 billion) of the tool on Monday morning.
The move is set to fully meet the needs of financial institutions, the central bank said in its online statement.
But the New York Times reckons, real estate is the problem, or one of the worst of them.
In more than 100 cities across China, hundreds of thousands of Chinese homeowners are banding together and refusing to repay loans on unfinished properties, one of the most widespread acts of public defiance in a country where even minor protests are quelled.
The boycotts are part of the fallout from a worsening Chinese economy, slowed by Covid lockdowns, travel restrictions and wavering confidence in the government. The country’s economy is on a path for its slowest growth in decades. Its factories are selling less to the world, and its consumers are spending less at home.
The Times adds:
The mortgage rebellions have roiled a property market facing the fallout from a decades-long housing bubble. It has also created unwanted complication for President Xi Jinping, who is expected to coast to a third term as party leader later this year on a message of social stability and continued prosperity in China.
Over to another Bloomberg report:
Chinese households have plenty of reason to feel downbeat. The economy is slowing because of Beijing’s draconian Covid-zero posture and a deep slump in the property sector, among other factors. Household wealth has taken a hit from falling house prices, and youth unemployment hit an all-time high of almost 20% in July, more than twice the US rate. Officials have privately acknowledged that this year’s official target of “about 5.5%” annual gross domestic product growth isn’t achievable.
A proliferation of consumer-loan companies supercharged consumption spending, which logged inflation-adjusted growth of almost 7% annually in the six years before the pandemic, according to official data. “One of the most pernicious myths about the Chinese economy is that it is not consumer-driven,” Andrew Batson, director of China research at Gavekal Dragonomics, wrote in a note to clients. “In fact, the combination of household consumption and investment has consistently accounted for 50% or more of China’s GDP. The malaise in the Chinese economy over the past several months shows exactly what happens when half of GDP decides not to show up.”
And then Taiwan …
A simple message should go out to Xi Jinping – given Taiwan’s importance to the global economy and broad Taiwanese reluctance to become a province of a state it shares no common values, currency and laws with – that the Taiwan issue needs to be readdressed.
That’s just the beginning of it – but please remember, China thinks we’re collapsing too.
We might be.
Ideally, if we’re all going down, it’s a controlled global demolition job. Let’s do this clean without nuking each other.
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Musk, a mission, the Middle Kingdom
The giddy, early days of SpaceX, 2012. Photo: WikiCommons.
Bloomberg reports that Elon Musk, the fabulously rich and mercurial purveyor of big dreams, has penned a column in the official Cyberspace Administration of China publication, which is like getting a piece in the Washington Post or the Wall Street Journal in the real world.
Musk’s musings are reminiscent of outreach by Meta Platforms Inc.’s Mark Zuckerberg and Alphabet Inc.’s Sundar Pichai in years past, when US internet companies harbored aspirations of working with the world’s No. 2 economy. The Tesla chief executive officer is also in a legal battle with Twitter Inc. over an acquisition he cast as critical to free speech before attempting to back out of the deal. The social media service is officially banned in China.
Musk said in the column that the magazine -- the inaugural edition of which was published this year -- reached out to him for the article. The entrepreneur touched on his businesses including Neuralink Corp., which is working on brain-machine interfaces, and the humanoid Tesla Bot, the first prototype of which is set to debut soon. He addresses the column to his “Chinese friends” and described Space Exploration Technologies Corp.’s mission to create a self-sustaining city on Mars.
‘I hope more people will join us in our fight to accelerate the world’s transition to sustainable energy,’ Musk wrote. ‘I also welcome more like-minded Chinese partners to join us in exploring clean energy, artificial intelligence, human-machine collaboration and space exploration to create a future worth waiting for.’
In related news, the China Project, currently still SupChina, reports China has some 10 million electric cars but nowhere near enough sockets to charge them.
It’ll get fixed but why not just buy Twitter?
Shanghai covid anxiety lingers
Social media was flooded on Monday by scenes of shoppers fleeing a branch of Ikea in Xujiahui District after a positive case of Covid-19 was detected.
China’s war with SARS-CoV-2 is far from over and will stretch in 2023 and beyond – short of an undefined miracle.
Just a gentle reminder: we’re very far from China “living with covid”.
The Greater Sinosphere
Up to 5,000 Taiwanese trafficking victims in Cambodia
Sihanoukville, the Wild West of the East, where Taiwanese are being scammed into forced work. Photo: Dmitry Makeev; WikiCommons.
New Bloom reports that at least 2,000 Taiwanese are victims of human trafficking in Cambodia, even though there are only 141 documented cases.
Police and politicians say at least 2,000 Taiwanese are still stranded in Cambodia against their will, but this number could be as high as 5,000 because of blind spots in the data. That is significantly more than the previous estimates that hundreds of Asians had been reportedly tricked and then sold here.
Most of the problems are centered in the “lawless” port town of Sihanoukville, and are modern, Chinese-patois equivalents of boiler rooms, which were common in Bangkok and Cambodia as early as the 1990s, when they largely preyed upon English-speaking backpackers.
Foreign currencies, stock markets, and retirement villages were touted as investment strategies from offices with dozens of fixed telephone lines by people who made a conscious decision to work this nefarious trade and take a punt on fleecing the elderly of their savings.
The difference between then and now is today’s operations are being run mainly by Chinese syndicates who trick unwitting Mandarin speakers, among others, into this type of scam with false promises of high pay. They are kidnapped on arrival and held in fortified compounds.
Back to New Bloom:
Some of the details of these human trafficking cases have been reported by freed victims. Victims are made to help carry out financial fraud by telephone or through online messaging apps such as LINE, posing as financial investment counselors. Indeed, many phone scam rings targeting Taiwan are based out of southeast Asia, whether participants in the ring are doing so of their own free will or not.
According to the Ministry of Foreign Affairs, more than 222 cases of Taiwanese having their freedom restricted have been reported to Taiwan’s representative office in Ho Chi Minh City between June 21st and August 10th. Of these, 51 have since returned to Taiwan.
On a not so incidental note, at least trafficked Taiwanese who are freed are being extradited to Taiwan now, as far as we know. For some years, according to numerous reports such as this one from the BBC, they were being sent to China.
Safeguard Defenders, a Spain-based human rights group, reported that “more than 600 Taiwanese arrested overseas have been deported to China in recent years.”
Very little is known about what happens to Taiwanese who are emancipated from forced labor in Cambodia and extradited to China.
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Joshua Wong pleads guilty
Heady days. Photo: Studio Incendo; Creative Commons 2.0.
Joshua Wong and a group of 28 Hong Kong pro-democracy activists have entered guilty pleas in Hong Kong.
Wong is among 29 out of 47 defendants who are expected to accept the charge of “conspiracy to commit subversion” under the highly controversial law, while the 18 other defendants are set to plead not guilty. Many of them have been detained for more than 17 months following their arrests, and may face sentences as long as life imprisonment. Defendants include former legal scholar Benny Tai Yiu-ting (戴耀廷 Dài Yàotíng), protest organizer Jimmy Sham Tsz-kit (岑子杰 Cén Zijié), and ex-lawmaker Claudia Mo (毛孟靜 Máo Mèngjìng).
News of the expected guilty pleas came a day after it was revealed Justice Secretary Paul Lam had ordered the case to be tried by a panel of three handpicked security law judges, rather than a jury. Most of the plea intentions, however, were entered between June 1 and July 6, according to local newspaper Ming Pao.
The 18 other defendants, including former lawmaker “Long hair” Leung Kwok-hung, will plead not guilty, local media reported.
Exiled Tiananmen student leader and current General Secretary of the Taiwan Parliamentary Human Rights Commission Wu’er Kaixi said to ChinaDiction, “The pleas, in a way, are irrelevant; Joshua Wong is basically pleading guilty of having broken a law he helped fight the imposition of in Hong Kong.
“To say, yes, I did that, as accused, is simply to say, Yes, I opposed your laws. For Long Hair to plead not guilty, is in a way, like saying, I don’t accept your laws.
“It’s a farce, absurdity – non-jury trials – however you plead.”
Hong Kong documentary ‘stuns’ at least 2 people
An alleged fan of ‘Spring, Seeing Hong Kong Again.’ Photo: Social Media
China Media Project reports Cannes screened “Spring, Seeing Hong Kong Again,” which portrays China as benevolently bringing order and health to a city roiled by unruly protest and disease.
According to a press release published on June 1, “The audience applauded for 3 minutes after the screening.” Some, it said, were “stunned and their impressions of Hong Kong were refreshed.” It added that the film had also recently won the Best Documentary Award at the Prague Film Festival, where, according to another article, it had to be shown again to accommodate the throngs of people who wanted to see it.
There are some issues here, not least of which is the fact that there is no Prague Film Festival.
Of course, there’s more:
‘Just two people showed up for a screening of the film, and promotional images were based on stock photos. While the film had been in Cannes, it had not been shown at the prestigious festival, like “Revolution of Our Times,” [a lauded pro-Hong Kong documentary on the most significant protests Beijing has faced since 1989, Tiananmen] but at the concurrent Marché du Films, a marketplace where screenings can be bought.
Gwadar Port, 2018. ‘The Dubai of the East’ is now described as ‘derelict’. Photo: WikiCommons.
The Asia Nikkei Review goes to Pakistan, where at least some of China’s belt-and-road projects are becoming more belt than road.
Case in point: Gwadar.
Don’t worry. We’d never heard of it before either.
Nine years ago it was plucked out of obscurity – a backwater in Pakistan’s restive Balochistan region – and presented as China’s commercial window onto the Indian Ocean, a hub for regional integration under the Belt and Road Initiative, which was to harness the juggernaut of the Chinese economy to the goal of Asian economic development.
It’s a great story, and if you’re vaguely interested in how China’s Belt and Road global project its one of many worth following, with the obvious caveat that massive bureaucracies anywhere – say the World Bank, the Asian Development Bank etc – are generally really bad at fixing problems caused by the corruption the defines our exploitation of the planet.
When the CPEC agreements were signed, Pakistan’s government called Gwadar ‘the economic future of Pakistan,’ an alternative to Dubai that would turn around the country’s economic fortunes.
The government also claimed that Gwadar’s gross domestic product would increase from an estimated $430 million in 2017 to $30 billion by 2050, and produce 1.2 million jobs for a population that currently stands at 90,000.
None of this, of course, has happened.
The port is derelict owing to power cuts and other shortages. Protests broke out in December over fishing rights, and at least one major Chinese investor has reportedly exited.
Michael Kugelman, deputy director of the Asia program at the Wilson Center in Washington, says Gwadar is a victim of outsized expectations. “There was an assumption that new infusions of Chinese capital and technology would magically develop Gwadar into a world-class port, even though previous efforts to achieve similar goals had fallen far short,” he said.
More dangerous than it looks. Photo: Alex DeCiccio, WikiCommons.
National Interest has a long think piece on the Solomon Island saga that is best read in full than in summary here.
But, here goes, briefly.
On April 19, Prime Minister Manasseh Sogavare signed a security treaty with Beijing. It may allow Beijing to send military personnel to the islands and the Chinese Navy may be also able to dock at the islands.
What can be done when a sovereign state chooses to ally with a hostile foreign power and provides it the opportunity for a base of operations? This is precisely what happened in the Solomon Islands on April 19, Sogavare indicated without detail that his country’s prior bilateral security treaty with Australia was inadequate …
The problem is that the Solomon Islands, along with Vanuatu, Kiribati, Fiji, and Tonga, form a geopolitically strategic Melanesian barrier between Australia and Polynesia to the north. In the waters north of Guadalcanal, known as Iron Bottom Sound, the Imperial Japanese and U.S. navies lost over fifty warships, including seven cruisers, over the course of five hotly-contested naval campaigns over the islands between August 1942 and April 1943. The Japanese and Americans also lost two and three aircraft carriers, respectively, during campaigns to secure the strategic Solomon Islands. These islands would not easily be bypassed in a general conflict with China. No land-based anti-ship missile battery has ever been confirmed to have been destroyed from the air or sea. Marines would need to be painstakingly landed to clear the islands of these missile bases. Supporting land-based airpower is also a fraction of the cost of the equivalent of carrier-based aircraft, and it is considerably less vulnerable. There were concerns about a Chinese presence in Vanuatu in 2018, and there is currently an issue about Chinese interest in an airstrip in Kiribati. The hosting of Chinese land-based missiles, aircraft, or ships by the Solomon Islands is therefore gravely dangerous.
If we were to bet on how this will end up, we’d go with the money diplomacy player.
The Sydney Morning Herald reports at the time of writing, for example, that the Solomon Islands have done a A$100 million deal with Huawei to build some 100 mobile phone towers.
The deal will see Honiara take out a loan from a Chinese state-owned bank for the first time and tie a significant part of its communications infrastructure to Huawei, the Shenzhen-based company banned from building 5G networks in Australia, Canada and the United States due to national security concerns.
China-Thailand carry out joint air-force drills
According to the Wall Street Journal (paywall), China engaged in military drills with Thailand on Sunday, as drills continue around and over Taiwan.
The … Falcon Strike exercises will mark the fifth time the Thai and Chinese air forces have practiced and are focused on building trust between the nations, China’s Ministry of National Defense said.
China’s Defense Ministry said this year’s exercises will feature ‘key training courses such as air support, strikes on ground targets, and small- and large-scale troop deployment.’ It said China would deploy jet fighters, fighter-bombers and airborne early-warning equipment, without specifying details.
ChinaDiction thought Thailand was a US ally (of sorts), but then again Thailand has long been an arch player of both sides at the same time.
Time to ramp-up missile production
TC-2N Taiwanese missile, 2021. Photo: WikiCommons.
The Taipei Times reports that the Ministry of National Defense plans to build more than 1,000 anti-ship missiles over the next five years.
Although China has in the past few years rapidly produced many warships and added them to its navy, these large vessels are more suited for warfare on the open sea than in the narrow confines of the Taiwan Strait, the official said on condition of anonymity.
India facilitates Dalai Lama remote Ladakh visit
Photo: PRO Defence Srinagar
The Deccan Herald – Oh, boy, we’ve been wanting to link to these guys for so long – reports that India deployed a helicopter to transport the 14th Dalai Lama to the remote village of Lingshed, which sits close to India’s Himalayan face off with the PRC.
The Dalai Lama …
… reached Leh on July 15 last for a month-long visit to Ladakh – his first outside the seat of the Tibetan Government-in-Exile (TGiE) at Dharamshala in northern India after the onset of the Covid-19 pandemic. The global icon of the decades-long struggle of the Tibetans against the Chinese rule over their homeland was received by the Air Commodore P K Srivastava, Air Officer Commanding of the IAF station in Leh, on his arrival at the station for flying to Lingshed.
Say what you will of India, but what other country would have the cajones to host Tibet’s government in exile and have its military transport the “wolf in monk’s clothing,” as Chinese propaganda sometimes calls Tibet’s spiritual leader, to remote temples on the frontline with atheist China.
Ban on pet macaques
Photo: WEI, WAN-CHEN, 魏琬臻, WikiCommons.
Sadly – because seriously, who would not want one? – as of September 1 it will no longer be legal to “own” a pet Formosan macaque, reports Focus Taiwan.
ChinaDiction was unable to confirm whether the new ruling was monkeypox related or simply no-monkey-business in Taiwan, as usual.
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