China’s Options for Retaliation Are Few After U.S. Investment Ban; China’s Home Buyers Are Waiting Out the Property Slump
China corruption watchdog nabs 160 hospital bosses in healthcare blitz; ‘3 years too long’: Australian PM urges China to free jailed journalist;
Welcome to this issue of The China Brief. Today is August 12, 2023. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
China’s Home Buyers Are Waiting Out the Property Slump
WSJ
China's property market is experiencing a significant downturn, creating challenges for policymakers aiming to stimulate economic growth. Despite a brief sales rebound earlier in the year, the market has entered another slump, with potential home buyers anticipating further price drops. This wait-and-see approach by buyers has led to declining home sales, exacerbating financial issues for real estate developers and hindering the economy's recovery.
Factors contributing to the decline include the expectation of more subsidies, price cuts, and cheaper mortgages, as well as the reluctance of buyers to commit amid uncertain price trends. China's largest developer, Country Garden, is facing liquidity problems due to falling apartment sales. This market downturn is adding to China's existing economic difficulties, including youth unemployment, declining exports, and deflation.
China's property market has been on a downward trajectory for two years, with sales in July 2023 reaching a three-year low. The reluctance of buyers to enter the market is worrying economists, as it could further delay the housing market recovery and subsequently impact the broader economy. Efforts by developers to attract buyers through incentives like freebies and lower mortgage rates have not been sufficient to counter the declining demand.
Chinese authorities have implemented measures to support the housing market, including rolling back a deleveraging campaign and offering incentives to stimulate demand. However, the wait-and-see attitude of buyers continues to impede recovery. The annual housing demand in China has decreased from a peak of 14 million units in 2021 to an estimated 9-10 million units, further highlighting the challenges faced by the property market.
Until the housing market shows signs of improvement, potential buyers are hesitant to make purchases, contributing to a cycle of declining confidence and sales. The uncertainty surrounding property prices and the overall market direction is causing buyers to hold off on making decisions, even as policymakers attempt to stabilize the situation.
China’s Options for Retaliation Are Few After U.S. Investment Ban
WSJ
China is unlikely to respond in kind to the recent U.S. investment ban targeting certain Chinese tech firms due to factors like asymmetrical money flows and a weak domestic economy, experts suggest. Unlike Chinese counterparts, American tech companies aren't heavily reliant on Chinese investments. China's deteriorating macroeconomic conditions and falling investor confidence also discourage an escalation of economic tensions. Beijing is aiming to maintain a diplomatic thaw with Washington and is thus expected to retaliate in alternative domains, possibly through export restrictions on key materials it controls, such as rare earths. Despite the rhetoric, the new U.S. measures are not anticipated to significantly alter the strained U.S.-China relationship. While China may retaliate in a limited, non-escalatory manner, the ongoing efforts by both sides to de-escalate tensions might prevent a tit-for-tat spiral.
China corruption watchdog nabs 160 hospital bosses in healthcare blitz
South China Morning Post
Chinese authorities have targeted the healthcare industry in a campaign against corruption, with over 160 hospital bosses having been apprehended. The sector, which has been the source of numerous complaints over high costs and corruption, received billions of dollars in public funding amid the Covid-19 pandemic. The campaign began earlier this year and is expected to continue into 2024, with more heads expected to roll. Public grievances regarding high medical costs have long been a serious issue in China, and there is widespread knowledge that some pharmaceutical companies bribe hospital bosses and party secretaries for sales.
‘3 years too long’: Australian PM urges China to free jailed journalist
South China Morning Post
Australian Prime Minister Anthony Albanese has called for the release of Australian journalist Cheng Lei, who has been imprisoned in China for three years. Cheng's partner shared a note from Cheng describing her bleak prison conditions, in which she expressed her longing for freedom and her children. Albanese expressed concern for Cheng's welfare and called for her release, stating that she is an Australian citizen who does not deserve such treatment. He said that Australia has pressed for her release at the highest levels and will continue to do so. Cheng, a former anchor for Chinese state broadcaster CGTN, was detained in August 2020 and formally arrested in February 2021 on charges of supplying state secrets overseas. Her detention has raised speculation that it is politically motivated. China's foreign ministry stated that Cheng's case is being handled in accordance with the law and called on Australia to respect China's judicial sovereignty. Cheng's trial took place behind closed doors, and the verdict and sentence have been deferred.
China state media says developed nations not shunning Belt and Road Forum
Reuters
Chinese state media has rejected Western claims that developed nations are avoiding participation in China's Belt and Road Forum. The forum, an initiative to boost global trade infrastructure, has been criticised by some as a way for China to spread its geopolitical and economic influence. In July, the Wall Street Journal reported that the leaders of France, Germany, Italy and some other European countries did not plan to attend this year's forum. However, Chinese state-run Global Times disputed this claim, stating that China had not invited the leaders of some developed nations mentioned in Western media reports.
Hong Kong tech chief: US investment ban will bring ‘short-term’ woes to talent bid
South China Morning Post
The US restrictions on investments in Chinese technologies will bring "short-term" difficulties to Hong Kong's drive to attract businesses, talent and financing, according to Secretary for Innovation, Technology and Industry Sun Dong. He pledged to counter the measures by broadening financing sources for local start-ups and considering more direct financial support for strategically important technology firms. The restrictions, expected to come into force in about a year, will cover companies in Hong Kong and Macau.
China and US give the green light to double flights
South China Morning Post
The US and China have agreed to double the number of passenger flights allowed between the two countries, with the US Transportation Department (USDOT) announcing that it will increase the number of Chinese passenger flights to the US to 18 weekly round trips from 1 September, and then to 24 per week from 29 October. The Chinese government has agreed to reciprocate the increase for American carriers. The move comes after China lifted restrictions on group tours for several countries, including the US, Japan, South Korea, and Australia.
Biden’s ‘ticking time bomb’ remark referred to China’s economy: White House
Al Jazeera
A White House official has clarified that US President Joe Biden's comment about China being a "ticking time bomb" referred to internal economic and social tensions that could affect how Beijing interacts with the world. Biden had said that China was "in trouble" and beset with economic and social problems. China's embassy spokesperson warned against "scapegoating" Beijing and fanning "division and confrontation", while state-run media outlet Global Times suggested that Biden made the comments to distract from domestic issues and boost his presidential campaign.
At Asian Weddings, Cash Is King
NY Times
In many Asian cultures, it is customary to give cash as a wedding gift instead of buying something from a registry. In South Korea, for example, guests present envelopes of cash to an appointed friend or family member of the newlywed couple upon arriving at the reception. The amount given is discreetly written in a register and guests who cannot attend the wedding have the option to wire money to the couple's bank account. While it is becoming more popular for American couples to ask for cash as a gift, it is still rare for them to have a cash-only registry.
There are certain unwritten rules when it comes to giving money as a wedding gift in Asia. For example, in Japan, it is generally understood that a younger adult or college student should contribute around $70, while workplace superiors and older relatives should aim for the higher end of the range. In South Korea, the appropriate amount to give is typically between $39 and $77, depending on the relationship with the couple. The cost of the banquet meal is also taken into consideration when determining how much to give.
The exchange of money at weddings is also seen as a way to establish and strengthen relationships, and it is not just a monetary exchange, but an exchange of credit and debt. The wedding gift giving system has even been abused by people in power, leading to attempts by governments in Asia to regulate gifts to prevent bribery and corruption. However, enforcing these regulations can be difficult. Overall, giving money as a wedding gift in Asia is deeply rooted in tradition and culture, and there are many factors to consider when determining how much to give.
What’s behind Philippine senate’s bipartisan support for firmer China policy?
South China Morning Post
The Philippine Senate has approved a resolution condemning China's actions against Filipino fishermen and vessels in the disputed South China Sea. The move came after the Chinese coastguard blocked Filipino vessels from reaching the BRP Sierra Madre, a World War II-era vessel grounded by the Philippines in 1999 to halt China's advances in the contested waters. The resolution reflects a hardening of the official Philippine policy towards China and its claim over the South China Sea. It also comes amid growing public pressure in the Philippines to assert the country's maritime rights in the region. The Senate's bipartisan approval of the resolution is seen as a significant development as the upper house of the Philippine legislature has traditionally taken a quiet bipartisan approach to foreign policy, deferring to the sitting president. The resolution was co-sponsored by Senate President Juan Miguel Zubiri and opposition Senator Risa Hontiveros.
China warehouse chemical leak emits yellow smoke - state media
Reuters
A leak of acidic substances from a warehouse in Xingtai, China, owned by a children's product manufacturer, has caused yellow smoke to blanket parts of the city. The incident has been brought under control, and there were no casualties. However, accidents due to gas and chemical explosions are not uncommon in China, despite increased inspections and checks.
Taiwan vice president takes off for US amid China tensions
Deutsche Welle
Taiwanese Vice President William Lai is embarking on a trip to the US, with stopovers in New York and San Francisco, before continuing to Paraguay. China has condemned the visit and warned that it could prompt increased military drills near Taiwan. China views Taiwan as part of its territory and sees a trip to the US as granting Taiwan an aura of legitimacy. The US recognises the People's Republic of China as the sole legitimate government of China, but still has informal relations with Taiwan. Taiwan has defended the visit, saying it is nothing special and that Taiwanese vice presidents have made similar trips before.
China's economic and tourism recovery hold key to ASEAN
Nikkei Asia
The ASEAN+3 Macroeconomic Research Office (AMRO) has downgraded its growth projections for ASEAN by 0.4 percentage points to 4.5% due to a "very strong headwind" in exports. Chief Economist Khor Hoe Ee stated that recovery in the Chinese economy is crucial for further growth in Southeast Asia. AMRO has revised down Vietnam's growth projection for 2023 to 4.4% from the previously projected 6.8%. Khor highlighted that when China's exports to the US and Europe pick up, Southeast Asian countries will experience stronger imports, supporting growth and the external balance.
China asks Philippines to jointly work on defusing South China Sea tensions
Reuters
Chinese Foreign Minister Wang Yi has called on the Philippines to work with China to defuse tensions in the South China Sea. Wang's comments come amid rising tensions between the two countries over the location of a grounded warship that serves as a military outpost in the disputed waters. China has repeatedly expressed its willingness to resolve differences with the Philippines through bilateral dialogue, however, the Philippines won an international arbitration award in 2016 against China's claim over almost all of the South China Sea. China does not recognise the ruling and has built militarised, man-made islands in the region.
Floods, mudslides kill two people in northwestern China city
Reuters
Two people have died and 16 are missing following mudslides and flooding in the city of Xian in northwestern China. The extreme weather comes after heavy rainfall and floods caused by Typhoon Doksuri, which hit southern Fujian province nearly three weeks ago. Two houses have been washed away and infrastructure, including roads, bridges, and power supply facilities, has been damaged. Search and rescue teams and river bank reinforcement personnel have been sent to the area. Extreme weather conditions are expected to continue in the Qinling Mountains, potentially leading to further mudslides.
Stay informed about the latest news, analysis, and policy briefs from across the globe related to China with the China brief. Our team aggregates, synthesizes, and summarizes the most important information from various sources, including media outlets, think tanks, government agencies, and industry experts.
Our mission is to provide you with easily accessible and critically valuable information tailored to your specific field of interest. We understand the significance of staying up-to-date on developments related to China and aim to make this information comprehensible for our readers.
Join the conversation and stay informed about the latest news and developments related to China by visiting our website at www.6dobrief.com