China Dashboard

China Dashboard

by Swarajya Staff - Friday, March 31, 2023 05:57 PM IST
China DashboardA Secret Chinese Committee Is Compiling A List Of Replacements For The US Tech

June 6: China Has A Local Debt Problem

China is laden with municipal debt — about 156tn yuan of it according to Goldman Sachs, a lot of it held through balance sheets via financing vehicles (local government financing vehicles/“LGFVs”) favoured by local government.

Economy On Steroids: China’s Double-Digit Decade Of Growth Is Now History

June 5: Between Trump's Tariffs To Biden's Sanctions, China Is Losing America's Imports Share

New data reveals that China's share of the US's low-cost imports from Asia will soon fall below 50 per cent for the first time in over ten years, as western companies relocate their operations outside of China.

June 1: Global investors are scaling back bets on China's state-owned companies. Hang Seng China Central SOEs Index, which consists of the biggest state-owned companies, had fallen 9.9 per cent since May 8, while the Hang Seng China Enterprises Index, which mostly tracks private Chinese tech companies such as Tencent and Meituan, had lost 8.9 per cent.

Foreign investors came into the year hoping that the end of strict COVID-19 restrictions would lead to a Chinese boom.  So far, however, the recovery has not been as strong as it was expected.

May 31: Nvidia founder and CEO Jensen Huang has warned that China will cultivate its own chip companies in response to tensions with the U.S. and that existing chip players will have to work hard to stay competitive.

Also Read: The Year Of Global ‘Chip Atmanirbharta’

May 30: China has called for "stable and constructive" ties with the U.S. in a meeting with Elon Musk that highlighted the complex relationship between Beijing and the billionaire boss of Tesla, Twitter and SpaceX.

Tesla has announced plans to build a factory in Shanghai to produce its Megapack energy storage system, as chief executive Elon Musk resists rising opposition in Washington to US technology companies investing in China.

Also Read: Taiwan Crisis: How US Companies Toe The Chinese Line

May 29: World Bank President David Malpass makes one last request for China as he prepares to step down in June: provide relief to countries that are suffering from mounting debt.

China's Belt And Road Initiative Is Running Into Huge Losses, Over $78 Billion In Loans Re-Negotiated

May 28: The United States "won't tolerate" China's effective ban on purchases of Micron Technology memory chips and is working closely with allies to address such "economic coercion," U.S. Commerce Secretary Gina Raimondo said.

Supply Chain Wars: How US Is Turning The Heat Against China On Semiconductors

May 27: China's big data industry -- including construction and operation of data centers, data transactions and equipment manufacturing -- grew to 1.57 trillion yuan ($222 billion) in 2022. It has grown about fivefold from 2015, when the government began promoting the industry, and is forecast to reach 3 trillion yuan, or about $425 billion, in 2025.

May 9: China's imports contracted sharply in April, while exports grew at a slower pace, reinforcing signs of feeble domestic demand despite the lifting of COVID curbs and heaping pressure on an economy already struggling in the face of cooling global growth.

May 8: Tackling the mountain of hidden debt accumulated by China's local governments is, once again, at the top of the political agenda as the economy gets back on track after a three-year pummeling from the COVID-19 pandemic.

There is no publicly available official data on the current scale of hidden debt, which was first revealed by the National Audit Office in a December 2013 report. The watchdog estimated that the total debt of local governments had surged to 17.9 trillion yuan ($2.9 trillion) by June that year, and much of it was hidden debt.

May 5: More Chinese civil servants have begun to be paid entirely in digital yuan, joining some of the country's bank employees as a new phase begins to promote the currency.

The push comes as the central-bank-backed digital yuan has failed to gain much circulation due to competition from mobile payment services, despite years of trials. The hope is that paying public sector wages in digital yuan will lead to the adoption of the digital yuan in the larger consumer market.

May 4: U.S. Secretary of State Antony Blinken said he hoped to make a trip to China sometime in 2023, stressing the need to "reestablish regular lines of communication at all levels and across our government."

Bilateral tensions have hampered exchanges between senior U.S. and Chinese military officials in recent years, raising concerns of an accidental clash between the countries.

May 2: China's New Opium War

China's 'compulsive overproduction' of steel is 'the new Opium War': Zoho's Sridhar Vembu.

Vembu was responding to Carnegie Endowment's Michael Pettis' tweet, "Demand for steel in China is recovering on greater investment in infrastructure and manufacturing as well as stronger exports, but output continues to outstrip demand, putting great pressure on steel mills."

Vembu said: "Chinese policy can be summarized as "compulsive overproduction". This is not good for China, and it is not good for the world. In India, it has caused import dependence, even "addiction". This the new Opium War, this time waged by China. This is not a free market phenomenon."

May 1: China Preparing For The Taiwan Conflict?

China on Monday enacted revisions to its military service law that will allow retired military personnel to be reenlisted to secure experienced soldiers. The law also focuses on recruiting tech-savvy science and engineering students to prepare for warfare in new domains such as space and cyber, as the country tries to build its military strength to prepare for possible all-out war in the Taiwan Strait.

April 27: Beijing's Crackdown Against US Companies Operating In China Continues

Chinese police have visited the Shanghai offices of Bain & Company and questioned employees at the US management consulting firm, in the latest case of heightened scrutiny of foreign businesses in China as tensions between Beijing and Washington rise.

April 26: China Is Going Into The Hyperdrive Mode For Rare-Earth Minerals

State-owned Chinese resources developers are expanding production of rare-earth metals in response to higher government quotas, working to build a supply chain that can handle growing demand for electric vehicles and other high-tech products.

China's imports of rare earths have more than tripled over the past five years amid rising demand, with the U.S. accounting for the largest share. As Washington works to build a rare-earth supply chain focused on its allies and partners, it could cut shipments to China. 

China's Efforts To Woo EU Derailed?

A Chinese ambassador who questioned the sovereignty of former Soviet states has damaged Beijing’s standing and outreach efforts to the European Union.

Although Beijing quickly sought to disown Lu Shaye’s comments, insisting it did recognise the sovereignty of post-Soviet states, the furore has coincided with the start this week of EU efforts to formulate a new policy towards China, which its 27 leaders will debate at a summit in June.

April 25: Crackdown 2.0: Beijing's Broadening Espionage Laws To Threaten Foreign Companies

China's new counter-espionage law may restrict transfer of data related to national security, causing concern of more aggressive measures against foreign individuals and companies operating in the country.

April 24: China's 'Wolf Warrior' Diplomat Questions Sovereign Status Of Baltic States

Chinese diplomat Lu Shaye's comments challenging former Soviet states' legal status and Ukraine's sovereignty over Crimea were met with anger from European governments.

Lu Shaye stated in an interview with French news channel LCI that the ex-Soviet countries lack effective status under international law since there is no concrete international agreement establishing them as a sovereign nation.

April 21: Led By Foxconn's Founder, A Pro-China Political Lobby Is Competing For Power In Taiwan For The Upcoming Elections

But will they succeed?

April 17: BRI Is Not Working Out For China, Not For Now, At Least

Bad loans worth over $78 billion have hit China's $1 trillion Belt and Road Initiative infrastructure finance programme in the past three years.

China's scheme had turned it into the top bilateral creditor, but it seems to have now become a financial burden for Beijing and its largest banks.

Chinese institutions renegotiated or wrote off about $78.5bn in loans for infrastructure projects such as roads, railways, ports, and airports globally between 2020 and March 2021, says research organisation the Rhodium Group.

April 10: President Xi Jinping Is Now Going For A Crackdown Against China's Financial Sector

As Chinese officials are investigated for corruption, the Central Commission for Discipline Inspection (CCDI) has cautioned against luxury living while banks reduce executive pay and bonuses. Over a dozen executives have been investigated or punished since February in the latest crackdown on misconduct in the financial sector by China’s top anti-corruption agency.

China's Banks Are Writing Off Bad Property Loans To Give Thrust To The Economy.

Lenders last year sold off 2.7 trillion yuan ($392 billion) in non-performing loans with many of the bad debts winding up on the books of state-owned distressed asset management companies that often absorb troubled credits in China. The state gives and the state takes, as they say in China.

April 9: China held a second day of military manoeuvres around Taiwan on Sunday in retaliation against President Tsai Ing-wen’s meeting with senior US lawmakers including House Speaker Kevin McCarthy in California.

The People’s Liberation Army said units simulated precision strikes on key targets in Taiwan and the waters around it.

From August 2022; why America can’t save Taiwan.

Tesla Has Big Plans For China:

April 4: The coalition against China's chip ambitions is gradually coming together.

Summing up the busy week here that had Japan, Netherlands, Taiwan, and America aligning on one side, and in perhaps what can be termed one of the greatest ironies, China and India on the other.

Read about it here.

April 3: China’s non-manufacturing sector activity expanded at the fastest rate since 2011 in March, but manufacturing growth dipped from the previous month in further signs of an uneven recovery as the economy struggles to emerge from the shadow of the pandemic and the overall global slowdown.

The non-manufacturing purchasing managers’ index, which includes the services sector, reached 58.2 in March, up from 56.3 in February and its highest level since May 2011, comfortably exceeding economists’ forecasts of 54.3, as reported by the Financial Times.

April 1: China launched a review into US chip manufacturer Micron Technology on “national security” grounds, as Beijing retaliates against Washington’s increasing curbs on Chinese access to semiconductor technology.

Shares of Micron, which counts on mainland China for about 11% of its sales, fell 4.4 per cent in New York to $60.34. It was their worst one-day decline in more than three months.


A New Cold War

Beijing and Washington are now engaged in a trade cold war. What began as many described an unnecessary diplomatic hammering under President Donald Trump is now an accepted bipartisan policy. Starting with semiconductors, the US is turning on the heat against China.

Where is this cold war heading?

India Versus China

The world's third-largest economy and biggest free-market in the making, India is emerging as a key challenger to conventional China, that prided itself on ease of doing business, ushering investments, and being the hub for easy labour. Post-Covid, is it India's time to shine?

The Music Is Slowing Down

For almost a decade after the financial crisis of 2008, it was China that was the global economic hotspot with investments coming in from world over. That party, unfortunately for Xi, is over, as Covid-zero policy coupled with a general slowdown in consumption threatens China's economy.

Troubles In The Taiwan Strait

For China, the question of Taiwan is not political, but civilisational, and one of Xi's primary priorities. Given the West's failure to curb the Russian misadventures in Ukraine, along with that infamous exit from Afghanistan and Iraq, will China go for Taiwan after Hong Kong?

The Ghosts Of China

In the second-half of 2021, authorities in China demolished 15 skyscrapers with 4.6 tonnes of explosives across 85,000 blasting points, all in 45 seconds. The buildings, unoccupied for almost a decade, were described as an eye-sore in the local newspapers. What is the Chinese 'Ghost Story' all about?

Wall Street's Eternal Love For Beijing

It won't be an exaggeration to state that the biggest pro-China lobby in the West Wing is the Wall Street itself, followed by the Silicon Valley. From Apple to Goldman, everyone wants to have a piece of the Chinese pie. In China, however, with great market size, comes great crackdowns.

Xi Versus Rest Of The World

In the 1990s, the Chinese drew critical lessons. One, from the fall of USSR. Two, from the US' quick victory in the Middle East. And three, from the protests at Tiananmen Square. Biding their time, the Chinese are now upping the ante, swiftly infiltrating global institutions.

The Infamous Belt And Road Initiative

Debt-traps, strategic takeovers, and wolf-warrior diplomacy have ushered a troubled phase for Jinping's Belt and Road Initiative. The $2 trillion plan, with key investments in Europe, Africa, and Latin America, is now under scanner from policymakers world over.

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