Weekly Wrap Up Jan 8-21

1) CHINA TO BUILT DOMESTIC MICRO-CHIP PLANT

China’s flagship state-owned chip maker Tsinghua Unigroup said it plans to build a $30 billion memory-chip factory in Nanjing, its latest investment as China moves to diminish its dependence on US chip manufacturershttp://bit.ly/2kdB8Y8

2) MORE TOURISTS FROM LOWER TIER CITIES

“The growth of independent travel from China’s lower-tier cities is outpacing that in Shanghai, Beijing, and other first-tier cities, ” http://bit.ly/2iXfEKa

3) RMB CURRENCY REGULATION

China cut its holdings of US Treasuries by $66bn in November, reducing its position in the safe-haven debt to the lowest level since 2010 as the country battles to stabilize its currency. http://bit.ly/2j7RzDB

4) CHINESE MEDIA LAYING LOW ON TRUMP

“…any news relating to China-U.S. relations must use Xinhua copy. Any news about Trump must be handled carefully; unauthorized criticism of Trump’s words or actions is not allowed. (January 13, 2017)” http://bit.ly/2jC5RgN

5) TRUMP UNPREPARED TO FACE CHINESE FOREIGN POLICY

“Toss ideology out of the window. This is about democracy and fascism, war and peace, life and death. I wish that I could write those words with the callous commercialism with which some will no doubt read them, as overheated rhetoric simply designed to stir agitation, provoke controversy and garner clicks. But alas, they are not. These words are the sincere dispatches of an observer, writer and citizen who continues to see worrisome signs of a slide toward the exceedingly unimaginable by a man who is utterly unprepared.” http://nyti.ms/2jBA53H

6) CHINESE MANUFACTURING MOVING TO INDIA, BEATS OUT NATIONALISM

There were nationwide calls to reject Chinese brands in April 2016…you would imagine it would take far less for its citizens to patriotically shun Chinese goods, never mind incinerate them in a large bonfire…And yet, Chinese phones sold like gangbusters in 2016…It may seem ironic that every major Chinese brand now has production facilities in India that go beyond mere assembly (Vivo and Oppo in Greater Noida next door to Delhi, Gionee in Visakhapatnam, Huawei in Tamil Nadu, and Xiaomi in Andhra Pradesh). Apparently, 37 mobile manufacturers made investments in manufacturing in India last year, more than six of whom were Chinese. Labour costs in China have shot up and moving to India, despite its tatty infrastructure… http://zd.net/2jKbjhg

7) AMCHAM SAYS U.S. COMPANIES ARE INVESTING LESS IN CHINA

China is becoming less of an investment priority for companies, with 56 percent of those in an American Chamber of Commerce survey placing [China] on the top three spots on their priority list, down from the peak of 78 percent in 2012…This comes as the companies highlighted five areas of concern covering opaque rules and laws, higher labor costs, Chinese protectionism, finding suitable management talent and difficulty getting licenses to operate, the annual survey of 462 companies released…

//The sample size is large enough for the roughly 400,000 foreign companies in China, but it is definitely not representative of all countries, maybe just the US. http://bit.ly/2iXiI8Q

8) RULE OF LAW TAKES TWO STEPS BACK IN CHINA

“We should resolutely resist erroneous influence from the West: ‘constitutional democracy,’ ‘separation of powers’ and ‘independence of the judiciary,’” Chief Justice Zhou, the head of the Supreme People’s Court of China, said in a speech to legal officials in Beijing. “We must make clear our stand and dare to show the sword.”…The speech was widely seen as a bow to the strict political climate that President Xi Jinping has established in China.      //19th party congress is approaching and it sounds like someone wants to still have a job. An interesting note was made that a lot of Chinese judges are trained in the West so there is a fear these young judges are partial to Western ideology. http://bit.ly/2kcuBZR 

(Related) Here is a blog that hits the nail on the head: http://bit.ly/2jB8wEV

9) THE RAILWAY THAT CONNECTS JIUQUAN LAUNCH CENTER TO CHINA

A railway stretching across the desert is the only military railway in China…connecting the Jiuquan Satellite Launch Center...the railway’s main mission is to transport rockets and satellites to the Jiuquan Satellite Launch Center. The railway is approximately 300 kilometers long, with a total of 36 stops. Troops stationed along the rail mainly undertake the mission of maintaining the rail tracks and guarding the special trains transporting experimental equipment.

http://bit.ly/2kdC7aS

10) LIAONING AND OTHER PROVINCES INFLATING GDP BY 20%

China’s northeastern Liaoning province, which relies on steel production as its growth engine, had inflated its GDP figures from 2011 to 2014 [by 20%], said province governor Chen Qiufa.    //Everyone says they know China’s provincial GDP is inflated, the question is by how much? This is really a problem of the China’s northern rustbelt. Also, doesn’t this remind you of what led up to Mao’s famine? Not saying it will happen again, but the basic structures/disincentives for how information is and is not relayed to the top still persists.   http://bit.ly/2kdNcZg

(Related, Caixin article on the same issue): Xinhua News Agency that uncovered rampant mass fabrication of figures two years ago in the northern provinces of Heilongjiang, Jilin, and Liaoning — where at least 20% of the region’s fiscal revenues were exaggerated. Those implicated included government officials of all levels whose promotions were closely linked to higher economic growth under a policy of “taking economic development as the central task” http://bit.ly/2jjhCpf

11) APP STORES TO BE CENSORED

Finally, last week, a Chinese regulator asked app stores operating in the country to register with the government, an apparent precursor to wider restrictions on app marketplaces….the banning of apps highlights a deeper flaw in our modern communications architecture: It’s the centralization of information, stupid. http://nyti.ms/2j8unCE

12) CHINA’S SOCIAL CREDIT RATING SYSTEM IS REALLY HAPPENING

China will accelerate the establishment of a credit rating system for up to 16 occupations this year, a senior official said on Wednesday….Public servants, real estate agents, tour guides, lawyers, teachers and pharmacists will be among those covered by the mechanism. http://bit.ly/2j7Ogwp

(Related: Explaining China’s 2020 Social Credit System a Great WSJ article, must read): http://on.wsj.com/2gz8PkN

Here is the actual text from the CCP’s 13th Five-Year Plan: “Strengthen the basic system of social governance, the establishment of the national population-base information database, unified social credit code system and related real name registration system, improve the social credit system, improve the social psychological service system and ease the mechanism of crisis intervention mechanism.” 

加强社会治理基础制度建设,建立国家人口基础信息库、统一社会信用代码制度和相关实名登记制度,完善社会信用体系,健全社会心理服务体系和疏导机制、危机干预机制” http://bit.ly/2kdLEic

(Creative Commons Photo Credit)

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