Chinese Communist Party newspaper warns foreign firms after Capvision raids; Exclusive Insight: Zhejiang's Economic Landscape: Challenges and Potential for Long-term Growth
Hong Kong author Louis Cha gets posthumous win in copyright lawsuit; Why financial crashes happen – and China could be next; Can China and Canada keep row under control after diplomats expulsion
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Exclusive Insight: Zhejiang's Economic Landscape: Challenges and Potential for Long-term Growth
The main issue facing Zhejiang's economy is the lack of large enterprises. During the planned economy era, the region received limited national investment, resulting in a relatively weak economic foundation. In the market economy era, private enterprises have emerged and grown from nothing, but the past thirty or forty years have not been sufficient for the development of a large number of significant enterprises, such as the phenomenal Alibaba Group.
Of course, many private enterprises have managed to overcome developmental bottlenecks by going public and raising funds through capital markets. However, for most private enterprises, merely surviving is a challenge, and scaling up is constrained by numerous objective factors, concerns over policy prospects, and fear of far-left policies. The absence of large enterprises serves as a limiting factor for Zhejiang's economic growth.
Another issue in Zhejiang is the focus on short-term gains and immediate success, which can easily disrupt the self-regulation of the market economy. Since the economic reforms and opening up, officials have been assessed primarily based on economic indicators, major projects, and symbolic accomplishments. The high mobility and frequent transfers of officials lead to an emphasis on achieving quick results, disjointed projects, and a scattered approach that can disrupt and damage industry growth patterns. Additionally, the use of non-local officials to break ties between government and business, and to disrupt factionalism and nepotism within the bureaucracy, can also result in officials struggling to adapt and understand local realities.
In comparison, when Xi Jinping governed Zhejiang, he emphasized environmental protection, poverty alleviation, and government services, focusing on long-term development. The current officials need to develop greater resolve in the face of these challenges.
(Excerpt from "Zhejiang, Zhejiang People, Zhejiang Economy" Series, No. 24. The author, Ye Feng, is a Zhejiang Research Scholar.)
Hong Kong author Louis Cha ‘Jin Yong’ gets posthumous win in copyright lawsuit
South China Morning Post
The estate of late Chinese novelist Louis Cha Leung-yung, known by his pen name Jin Yong, has won a copyright infringement lawsuit against mainland Chinese author Yang Zhi. Yang used the names of popular characters from Cha's works in his novel There They Were without permission. In its ruling, the Guangzhou Intellectual Property Court ordered Yang and his publishers to pay CNY1.88m ($270,000) to Cha's estate. The copyright holders of four of Cha’s novels are entitled to 30% of the royalties if Yang's work is republished. This ruling sets a precedent for future copyright disputes surrounding Chinese fan fiction.
Why financial crashes happen – and China could be next
Telegraph
Oxford economist Dr Linda Yueh has written a new book, The Great Crashes, which emphasizes that the inevitability of financial calamities can’t be allowed to breed fatalism. Yueh, who was a former BBC and Bloomberg journalist, notes that after wars and global pandemics, financial crises are the most damaging events that can beset the global economy, but stresses that crises differ and comparing every crash since 1929 shows the importance of policy response in ensuring a bad situation does not get worse. She has come up with a three-step framework that is designed to determine when financial trouble is brewing; she believes China warrants particular attention as it has allowed mounting debt to fuel a property bubble with the potential to drag down the banking system. Yueh also presents something approaching a hierarchy of crises; while a banking crisis is almost always a calamity, currency crises are less daunting, and while a stock market crash tends to sting, it is usually far less damaging than a banking crisis.
Can China and Canada keep row under control after diplomats expelled?
South China Morning Post
China has expelled a Canadian diplomat in retaliation for a Canadian diplomat charged with helping intelligence agencies to intimidate a Canadian lawmaker and his family. Analysts believe that China wishes to avoid the situation spilling over from the diplomatic sphere and affecting trade, a sector it views as crucial between the two countries. As the investigation continues, if more evidence of Chinese interference in Canada emerges, it will heighten mistrust according to a political science associate professor from the National University of Singapore.
Hong Kong may issue retail bonds to fund part of Lantau artificial islands project
South China Morning Post
Hong Kong's Finance Secretary, Paul Chan Mo-po, has suggested issuing retail bonds as a method of funding the Lantau artificial islands project, as concerns were raised that development could place a heavy burden on the government's ability to raise sufficient funding. Once finished, the artificial islands project and the planned Northern Metropolis would supply more than half of the 7,300 hectares of land Hong Kong requires beyond 2048 to cope with demand.
British sales surge at blacklisted Chinese CCTV company Hikvision
Telegraph
A division of Hikvision, which has been blacklisted by the US government due to national security concerns, has reported a 52% increase in UK sales despite a ban on its cameras at British “sensitive” sites. The Chinese company, in which the state has an ownership interest, is the UK’s most popular CCTV provider with more than one million cameras installed across the country. The company is accused of working with the Chinese state to surveil camps detaining the Uighur minority in Xinjiang. It projects a lack of concern about the issues, stating that its business is expanding rapidly.
Chinese Communist Party newspaper warns foreign firms after Capvision raids
South China Morning Post
The Chinese state-owned newspaper People’s Daily has warned foreign consulting companies to be aware of the country’s national security laws following a raid on the international consulting firm Capvision. The editorial, published after the raids (see previous briefings), declared that the United States and Shanghai-based company had undertaken work with “a large number of companies that are related to China’s sensitive industries” and had links with “foreign governments, militaries, and intelligence units”. Gabor Holch, an intercultural leadership consultant in Shanghai, said the warning was not new, but that executives would need to be more “vigilant than before”.
Why China is still haunted by its last emperor
Telegraph
An exhibition at the British Museum has showcased what the museum's director calls the “forgotten century” of China's last imperial dynasty from 1796 to 1912. China's Hidden Century includes artwork and artefacts that challenge the traditional view of China in the era as inward-looking and close to failure. “Looty”, a pet Pekingese presented to Queen Victoria after British and French forces looted and burnt the Beijing Summer Palace in 1860, is among the exhibition pieces on show. The Qing dynasty is also experiencing renewed interest in China and is becoming a draw for Chinese history buffs.
Philippines places buoys in parts of S.China Sea to assert sovereignty
Reuters
The Philippines has installed navigational buoys in its exclusive economic zone around the disputed Spratly Islands in the South China Sea. The move aims to assert Philippine sovereignty over the islands, follow China's increasingly audacious moves in the area, and provide greater safety for maritime trade. China's claim over almost the entire South China Sea was struck down by an international arbitration ruling in 2016, and neighboring countries also have claims over Spratlys. Beijing has militarized the area by dredging up sand and building runways and other facilities on these artificial islands.
Chinese Vice-President Han Zheng calls for joint climate action with the Dutch
South China Morning Post
Chinese Vice-President Han Zheng visited the Netherlands, calling for joint climate action and declaring that “there are no fundamental conflicts of interest between China and Europe”. According to a readout from the Chinese foreign ministry, Han stated, “The key to tackling climate change lies in taking action, which requires the joint attention and efforts of the international community”. He also noted the importance of better development of China-Europe relations through pragmatic cooperation. Rutte, the Dutch Prime Minister, said China was an important trading partner and there was significant space for cooperation in the areas of economy and trade, green development, low-carbon development and climate change. The Netherlands and China also “should…strengthen cooperation to promote global carbon neutrality and emissions reduction” according to Dutch King Willem-Alexander. This close cooperation comes as EU foreign ministers recalibrate their China strategy amid tensions caused by China’s stance on Russia’s invasion of Ukraine. The leaders of the Group of Seven nations are also expected to discuss China trade ties as a key point of concern.
US$677 million of bad debt comes with 75 luxury Beijing homes – is it worth it?
South China Morning Post
75 luxury apartments in the exclusive Wanliu House condominium in Beijing are up for sale as part of a bad debt auction. The development, located in the Haidian district within a short distance of prestigious schools, is priced at ¥273,000 per square meter, making it one of the most expensive in Beijing, and only rarely are homes in the development available on the second-hand market; up until now only a foreclosed unit on the top floor has been sold, fetching a record ¥109m ($15.7m) at auction last year. China Cinda Asset Management, one the mainland's largest bad loan managers, hopes to sell the $677m debt of Sinobo Land, the Wanliu House developer, with the 75 apartments as collateral.
Chinese police detain suspect after 7 dead in home and car attacks
South China Morning Post
A 27-year-old man has been detained by police in the western Chinese province of Shanxi, accused of killing at least seven people, four of them by mowing into a group of pedestrians and vehicles with a car. The episode followed the man's going to the home of a 21-year-old married woman, with whom he'd been having an affair and killing her husband, son and mother-in-law. The woman was also wounded.
Shipping groups press Chinese counterparts for sanctions-proof contracts
Financial Times
Maritime law firms have confirmed that shipping companies are asking for break clauses in contracts that would allow them to exit deals with Chinese businesses in the case of Western sanctions against Beijing. Sanctions clauses - which have been used rarely in the past - provide provisions for commercial parties to manage opposing pressures between the contract's compliance and the law’s compliance. Without these clauses, shipowners could find themselves reneging on agreements temporarily and possibly permanently. China Shipbuilding Industry Corporation and China State Shipbuilding Corporation, the world's largest shipping conglomerates, are both state-owned.
China’s new blockchain research center will train half a million industry workers
South China Morning Post
China's government is intending to train up to 500,000 blockchain professionals after opening its national blockchain research center. The center, located in Beijing, has been approved by the Ministry of Science and Technology and aims to promote the use of blockchain in the mainland economy. Researchers will work alongside companies and universities to train up blockchain professionals to support other industries. China has become focused on blockchain since President Xi Jinping endorsed high-end blockchain technology in 2019, and blockchain development has since become a focal point of digital development in the country.
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