Done gone ChinaDiction #74
Done gone ChinaDiction #74
Health officials declare Covid 'already peaked in late December 2022:' it's back to business now; the question is how ...
According to officials, Covid is beating a retreat and ‘normality’ is returning to China. Photo: Joshua Fernandez; Unsplash.
Chinese health officials and state media are reporting that Covid has peaked – in fact that it did so in December upon abandoning the Zero-Covid policy – which would make China a global anomaly: nowhere in the world has SARS-CoV-2 run its course and retreated to mind its own business in the space of weeks.
As CGTN puts it:
Fu Wei, an official at the Department of Primary Health of the [National Health Commission] NHC, said that the number of visits seeking treatment at fever clinics, general outpatient and emergency departments in township and community health centers – the grassroots medical and health institutions – were low during the Spring Festival.
The number of people visiting fever clinics was the lowest on January 22, said Fu, adding that though it picked up later, there was still a 40 percent decrease than the number before the Chinese New Year, and a 94 percent decrease compared with the peak daily figure on December 23.
English-language state tabloid The Global Times, went on a preemptive attack against skepticism in the West’s “liberal media,” editorializing:
The whole world has witnessed a surge in population flow during the Spring Festival holidays, as well as a boom in tourism consumption. And another COVID surge after the Lunar New Year travel rush which some US and Western media predicted did not take place. On Sunday, when most Chinese returned to work after the holidays, The Guardian published an article repeating the cliché that "After three years of lockdowns, the country was ill prepared for its abrupt 'freedom.'"
The US and Western media have a consistent bias against China, which determines that their interpretation of all China-related topics, including the epidemic, cannot be objective and impartial.
In the meantime, Covid may have peaked – or it may be rampant – but, according to the South China Morning Post, China’s factory activity continues to shrink.
The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) nudged up to 49.2 in January from 49 in the previous month, but missed expectations in a Reuters poll of 49.5.
The reading marks the sixth monthly contraction in a row as the 50-point index mark separates growth from contraction on a monthly basis.
The SCMP report added:
The Caixin survey showed that the infection wave and subdued market conditions had continued to weigh on customer demand and factory operations in January, with subindices of both new orders and output indicating contraction, though at slower paces than in December.
Companies said employee resignations or absences due to virus infection contributed to a rise in work backlogs.
According to the Financial Times:
Chrysanthemum flowers, a symbol of mourning in China, are selling out in cities across the central province of Hubei, with prices rising sharply as demand surges following a wave of Covid-19 deaths.
As always we’re peering through the cracks in the Great Wall for shadowy insights into the realities of the Middle Kingdom as China’s vast propaganda juggernaut remains hell-bent on ensuring we know as little as possible.
Conditional approval for 2 antivirals
As we reported on Saturday’s ChinaDiction, China’s preparations for what will be a long battle with Covid-19 – if the experiences of other countries apply – have been bewilderingly haphazard and inadequate.
The entire vaccination issue aside – for whatever reason (national pride, costs?) – China has broadly resisted use of any non-Chinese developed and manufactured vaccines – shortages and regulatory hurdles at a local level have restricted the rollout of anti-viral treatments such as Pfizer’s Paxlovid, Merck’s Lagevrio and Henan Genuine Biotech’s Azvudine — an HIV drug being used to treat Covid
But Bloomberg reports:
Simcere Pharmaceutical Group Ltd. and Shanghai Junshi Biosciences Co. got approval for their antivirals from the National Medical Products Administration, according to a statement from the government on Sunday. The statement didn’t elaborate on the conditions for approval.
The avalanche of infections unleashed after China’s abrupt pivot from Covid Zero last month created enormous demand for basic drugs to reduce fever and antiviral pills that protect those at highest-risk of severe disease.
This despite, as noted above, the fact that Covid-19 infections have peaked and everything is returning to normal amid the spring festival, during which hundreds of millions take to the skies, railways and roads in an annual migratory bonanza any respiratory virus would dream of having at its disposal.
Spend it
So, the official narrative is that ending Zero Covid overnight was a massive success and it’s full-steam ahead on reviving the economy.
The question is how to do it?
Get people spending is the obvious answer; as opposed to piling up government debt with awe-inspiring transport networks and less inspiring boondoggles in the middle of nowhere.
Reports the Financial Times:
’The greatest potential of the Chinese economy lies in the consumption by the 1.4 billion people,’ Li Keqiang, China’s premier, said during a meeting of the State Council, China’s cabinet, according to a statement released on Saturday [Jan 28].
‘Boosting consumption is a key step to expand domestic demand. We need to restore the structural role of consumption in the economy.’
But, as many Chinese and China-watching economists know, it’s a long shot. The FT adds:
Experts have long warned that China’s desire to move away from property-driven growth towards greater consumer spending will be challenging. Household spending accounted for 38 per cent of Chinese GDP in 2021. By comparison, it accounted for nearly 70 per cent of US GDP in 2022. The last few years of Covid have also bred economic caution after incomes and house prices came under pressure in the real estate crash.
It’s all very well touting the potential of 1.4 billion consumers – a tired trope that was already a cliche when Carl Crow wrote his now fabled 400 Million Consumers in 1937 – but for the Chinese domestic economy (not the foreign investors Crow was enticing), the move to consumer-driven growth would require structural changes that will be as challenging for China as they were for Japan in the late 1980s – and ever since.
Substack Pekingnology recently touched on the issue in a translation of a speech by Liu Shouying of Renmin University in which he spoke of “deep imbalances in China's development model and the importance of structural change if Beijing is serious about getting debt under control.”
Economist Michael Pettis remarks in the Twitter thread referenced above:
The arithmetic of boosting "the structural role of consumption in the economy" is pretty straightforward. The only sustainable way to do it requires an increase in the share households directly and indirectly retain of China's GDP …
… But no one seems willing yet to accept that this requires that the government share fall, nor that this implies a reversal of a 3-decade process in which household transfers effectively subsidized manufacturing and investment.
In the meantime, as the Financial Times notes:
Chinese households are sitting atop the biggest pool of new savings in history — accumulating $2.6tn of bank deposits last year alone as strict anti-coronavirus policies crushed consumer spending.
The anticipation of a wave of pent-up demand, with consumers opening their wallets after China shifted decisively on tackling the pandemic, is underpinning hopes for a global economic recovery.
Bring on the “revenge spending” as it’s come to be known, but unleashing pent-up consumer demand will be no panacea for an economy that has already been bruised on multiple fronts.
Urban welfare for rural poor
China’s government is once again pushing urbanization – the urban population has grown from just over 100 million in 1960 to nearly 900 million in 2023, according to macrotrends – by increasing assistance for rural Chinese to tap into urban welfare services, reports the South China Morning Post:
In a notice on Saturday, 19 government departments, including the National Development and Reform Commission (NDRC), the Ministry of Finance and the People’s Bank of China, pledged to improve conditions in resettlement areas, create job opportunities and give more people access to urban welfare benefits.
‘We’ll make it easier for [rural] people to receive an urban hukou,’ the notice said, referring to a household registration document that determines where a person can access public welfare services such as healthcare and education.
In short, likely another jigsaw piece in a puzzle that’s still under development.
Meanwhile, those demographics …
The One-Child policy seemed like a good idea at the time. Photo: Pixabay.
As you’ve probably already heard/read, according to the latest statistics, in 2022 China saw more deaths than births. As The Diplomat reports, Beijing has even gone as far as to officially announce that the country is experiencing population decline for the first time in 60 years – and it’s the kind of thing Beijing hates to officially announce, unless of course the seriousness of the problem might prompt citizens to patriotically start breeding again.
You could blame it on Mao Zedong, although there are undoubtedly other factors at play now that China has become more affluent, consumer-driven and property obsessed, but Mao did have some odd ideas about demographics, as per The Diplomat again:
When meeting female representatives from Yugoslavia in 1956, Mao said that the birthrate remained in an anarchistic and disorganized state: ‘Why can’t we have plans for producing humans? I think it is possible.’
Mao compared people to fabrics, chairs, tables, and steel, claiming that humans are not good at managing their own production.
Enter the one-child policy in the 1970s and the rest is history. Well, Beijing today wishes it was: as the novelist William Faulkner once wrote:
‘The past is never dead. It's not even past.’
Hence plans by “experts” to motivate couples to start making babies earlier and more abundantly, even if it means shortening young people’s educations so they can get at it earlier, so to speak.
And on that note, Reuters reports on how Sichuan Province – in a nationwide first – is now allowing unwed couples to raise a family and enjoy benefits previously reserved for married couples.
The government dictates that only married women are legally allowed to give birth, but with marriage and birth rates having fallen to record lows in recent years, provincial authorities revamped a 2019 rule to cover singles who want to have children.
The measure aims to "promote long-term and balanced population development," Sichuan's health commission said in a statement on its website.
And no, China does not do immigration.
Entrepreneur exodus
The Wire (paywall) asks this week, “Can Beijing win back its capitalist class?”
The report notes how “China’s economic tsar, Liu He, took the stage at the World Economic Forum in Davos” and announced:
‘Entrepreneurship is a key factor for wealth creation of a society,’ Liu said. ‘Therefore, entrepreneurs, both Chinese and foreign, will play an important role as the engine driving China’s historical pursuit of common prosperity. If wealth doesn’t grow, common prosperity will become a river without source or a tree without roots.’
For anyone who has been following the fate of China’s entrepreneurial class over the past several years, you might imagine they would all breathe a sigh of collective relief, but many reports suggest that now China is opening up “post-Covid” they’re simply taking the next boat abroad.
Reports Bloomberg (paywall):
Since the end of Covid Zero in December, many rich Chinese have begun traveling overseas to check out real estate or firm up plans to emigrate, immigration consultants said in interviews. That’s threatening a brain drain in the world’s second-largest economy as well as outflows that could pressure its financial markets.
The overall question is, has permanent damage been done by Xi Jinping’s attacks on the private sector and by his mishandling – there’s no pretending China’s Covid-19 play has been a success – of the pandemic?
Bloomberg again:
Over the past two years, Xi’s crackdown on a industries like technology, real estate and education, and his push for “common prosperity,” have spooked the rich, long accustomed to growing wealthier as long as they didn’t question the supremacy of the Communist Party. Advisers to the wealthy say those concerns have worsened since October when Xi cemented his political control at a twice-a-decade party congress.
Of course, China has bounced back from worse, but it really does appear to be emerging from its latest round in the ring with reality scarred – and this time with, for some, the choice to just opt out.
In the aftermath of prior disastrous central policies, like those of the Mao era, China was an impoverished hermit kingdom and entrepreneurial flight was the stuff of fantasy because there was no entrepreneurial class.
This time genuinely could be different, and at a time when the West is also putting the squeeze on China over crucial technologies with strategic ramifications.
Chipping in together ahead of Blinken China jaunt
Photo: Sergei Starostin; Pexels.
On Saturday (Jan 28) the Wall Street Journal (paywall) reported that Japan and the Netherlands would be standing with the US to restrict exports of “advanced chip-manufacturing equipment to China, joining efforts by the Biden administration to slow China’s military development by cutting access to advanced technologies.”
On the same day the South China Morning Post reported that “a senior European Union trade official” said that “the US had the bloc’s “full” commitment to the goal of choking China’s semiconductor industry.
‘We fully agree with the objective of depriving China of the most advanced chips”, Thierry Breton, the EU’s internal-market commissioner, said at the Centre for Strategic and International Studies.
‘We cannot allow China to access the most advanced technologies.’
Two days later, according to the Financial Times and other media outlets …
… The Biden administration … stopped providing US companies with licences to export to Huawei as it moves towards imposing a total ban on the sale of American technology to the Chinese telecom equipment giant.
Several people familiar with discussions inside the administration said the commerce department had notified some companies that it would no longer grant licences to any group exporting American technology to Huawei.
Meanwhile, ahead of an imminent trip to China by US Secretary of State Anthony Blinken, a commentary in the People’s Daily urged the US to “end its obsession with containing China,” as per the South China Morning Post.
The Greater Sinosphere
Australia
Chinese Oz students scramble to be down under
Photo: Brian Chen; Pexels.
In the wake of a surprise Chinese government ruling that banned all university students from studying online with overseas universities, just weeks before classes start in Australia, Chinese students are scrambling to make flight bookings and arrange accommodation.
The ABC reports that more than 40,000 Chinese students need to get to their campuses if their qualifications are to be recognized in China.
Deputy chief executive of the Group of Eight Universities Matthew Brown said:
‘We have been planning on having students come back on campus this year … but it's the suddenness of the announcement happening overnight without any warning … that's really caused concern,’ Dr Brown said.
He said the ‘blunt’ decision would impact students who had not gotten an Australian visa yet, organised flights or found accommodation in the country's already-tight rental market.
The Property Council of Australia said the snap return to face-to-face learning would compound pressure on Australia's already-tight student-accommodation sector, with some capital cities already expecting zero vacancy rates this year.
One Australia-based Chinese political analyst told the ABC that high youth unemployment in China had prompted Beijing to order students back to foreign universities they were enrolled in.
Hong Kong
Golf vs ‘common prosperity’
Hong Kong Golf Club land in 2016. Photo: Wpcpey; WikiCommons.
A plot of greenery – golf course or housing? – in densely populated Hong Kong is proving divisive, according to a report in the the New York Times.
The Hong Kong Golf Club has been fighting a government proposal to carve out less than one-fifth of its 172 acres of land and redevelop it for public housing.
Hong Kong’s government has come under pressure from Beijing to reduce the wealth gap in line with the Chinese leader Xi Jinping’s promises of “common prosperity.” But the land dispute puts on picturesque display the tensions between Hong Kong’s attempts to redistribute wealth and the interests of the elite who the government has long relied upon for support.
The city’s business leaders may be aligned with China’s Communist Party rulers, but many are also stubbornly protective of Hong Kong’s capitalist wealth and are members of the exclusive club.
Macau
Bust and boom
Photo: L_e C_y; Pexels.
First there was the pandemic and then came the scandal for the erstwhile “casino jewel in the crown” of Asia with the jailing of Alvin Chau, who ran a business that rivaled the largest US casino companies and an online betting operation twice the size of China’s national lottery, reports the Financial Times (paywall)
Pre-pandemic, the more than 40 casinos in the city generated turnover nearly six times that of Las Vegas. So important is revenue from Macau to the large US casinos that Las Vegas Sands sold out of Nevada to concentrate entirely on its Asian operations.
But, according to Bloomberg, the former Portuguese enclave is bouncing back – and with a vengeance – despite the travails of recent years.
The Gaming Inspection and Coordination Bureau said Wednesday that gross gaming revenue climbed 82.5% last month from a year earlier to 11.6 billion patacas ($1.4 billion), beating the median estimate of a 36.5% increase, according to analysts surveyed by Bloomberg. That’s the first rise since February last year and the highest monthly revenue since January 2020.
It’s in many ways a surprising recovery – but, on the other hand, further proof, if we needed it, that you can’t beat the house.
Taiwan
Storms and teapots, as cabinet resigns
Archival photo of outgoing Premier Su Tseng-chang; VOA via WikiCommons.
Politicians be politicians, always putting the blame on someone or something else, no matter whether it’s Taipei or Washington.
Take Taiwan’s outgoing Premier Su Tseng-chang (Sū Zhēnchāng, 蘇貞昌), whose former cabinet resigned “en masse,” in an anticipated move, the Taiwan News reports.
Su said in a Facebook post it had been a rough ride for he and his cabinet, “from the threat of African swine fever (ASF) to a once-in-a-lifetime drought, the virus of the century, the Russian invasion of Ukraine and global inflation.”
Excuses, excuses. Su’s cabinet resigned after the ruling Democratic Progressive Party’s (DPP) were trounced at the year-end local elections, but it’s true they’d endured a grueling tenure and deserved the gifts Su showered on them in reward.
The members received a tea set as a farewell present from outgoing Premier Su Tseng-chang (蘇貞昌), who exhorted them to “withstand the heat and brew good tea.” Earlier this month, Su gifted each member a teapot at a banquet.
Czech president spurns ‘unfriendly’ China for Taiwan
Czech President Petr Pavel speaking in 2022. Photo: Martin Strachoň; WikiCommons.
The Financial Times (paywall) reports that the Czech president-elect says his country is done with behaving “like an ostrich” with an “unfriendly” Beijing.
Petr Pavel, a retired Nato commander who swept to victory in Czech elections, has moved to confront what he labels dangerous misconceptions about China that should have been dispelled by Beijing’s apparent support of Russia’s invasion of Ukraine.
‘This is what we have to be very clear about. China and its regime is not a friendly country at this moment, it is not compatible with western democracies in their strategic goals and principles,’ Pavel said in an interview with the Financial Times.
‘This is simply a fact that we have to recognise.’ Defying warnings over potential retaliation, Pavel on Monday became the first elected European head of state to speak to Taiwanese president Tsai Ing-wen.
Pavel said the Czech Republic stands to benefit more from Taiwan than China economically and ‘we will not behave as an ostrich to hide this reality’.
The move comes amid a general Eastern European shift to support for Taiwan and frustration with China’s apparent support for Vladimir Putin.
Widespread data leaks assumed to be China-bound
Taiwan’s independent New Bloom reports that the household registration information for almost all Taiwanese citizens has been hacked.
News of the purported leak broke last month.
The dataset was for household registration for 23.57 million pieces of information on household registration, apparently stolen from the Ministry of the Interior’s Department of Household Registration, and was for sale on the BreachedForum website. The same account offering this dataset for sale was also selling 28.11 million pieces of information from the Bureau of Labor Insurance and 1.68 million pieces of stock exchange information.
The Ministry of the Interior (MOI) denies that the data is particularly sensitive, claiming it’s outdated, but some – notably in the KMT and NPP ranks – have accused the MOI of deflecting blame for a leak that could …
… prove valuable for the Chinese government in knowing the location of significant individuals–possibly for surveillance or other actions–or for big data analysis of Taiwanese society as a whole.
Tibet
Re-education campaign aims to curb self-immolation
Kirti Monastery, Ngaba Prefecture (historically part of greater Tibet), Sichuan Province. Photo: Jialiang Gao, WikiCommons.
Ngaba (Ngawa) Prefecture – also known as Aba – in northwestern Sichuan Province, traditionally part of greater Tibet, has the sad distinction of the being the “world’s capital for self-immolation.”
A re-education campaign to prevent Tibetan nationalists from protesting by suicide has been underway since 2015.
Bitter Winter, a dissident website with a focus on Chinese human rights abuses on religious and ethnic minorities, reports that the local program of “Harmonious and Stable Patriotic Education” was updated and reprinted several weeks ago.
The number of those who self-immolated, now approaching 170, is comparatively small but the negative international publicity for the CCP is of monumental scope …
… The CCP believes that the way of preventing self-immolations is more repression, limitations to the use of Tibetan language in Ngaba Prefecture, and silencing the Internet and social media (after each immolation, the Internet is completely switched off for a few weeks in the area).
Coda
If the firecrackers don’t break you, the in-laws will
Yes, Spring Festival, Lunar New Year – even Chinese New Year, whatever you call it – is supposed to be a time of warm family get-togethers and chicken bones on the living room floor and the TV blaring in a corner for lulls in the high-decibel badinage with dear kin, but some participants do emerge from the holiday period shell-shocked and unable to further converse with their partners.
See the full story at the highly recommended What’s on Weibo, where the Lunar New Year is described by one commentator as “a big marriage minefield.”