Xi’s Latest Crackdown Snares Experts Hired by Hedge Funds, CEOs; Exclusive Insight: Zhejiang's Practical Cadres: Sincerity, Pragmatism, and Economic Ingenuity
Sudan conflict delivers fresh blow to China’s African lending strategy; China State-Linked Stock Rally Sputters Further on Profit Taking
Welcome to this issue of The China Brief. Today is May 10, 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.
Exclusive Insight: Zhejiang's Practical Cadres: Sincerity, Pragmatism, and Economic Ingenuity
The cadre members from Zhejiang are known for their sincerity and pragmatic approach to their work. They are professional and task-oriented, rather than politically-driven. While they may not possess an exceptional level of political acumen, they tend to speak less grandiose language and focus more on practical matters.
Some of my classmates, who are now division and department-level cadre members, rarely use bureaucratic or formulaic language often found in official documents, or as spoken by some other officials. Instead, they communicate in a way that the common people can understand, eschewing the clichéd language found in People's Daily and various official documents.
In comparison, the language used by cadre members from Beijing can be rather enigmatic and difficult to grasp, often necessitating further pondering. They employ a highly official tone, which may also convey different meanings but can be challenging to comprehend. Zhejiang cadre members, on the other hand, tend to be more straightforward and less evasive in their approach.
Zhejiang cadre members generally have less interest in politics and are more skilled in economic matters. They struggle with planned economies, mainly because they lack experience and understanding in that area.
When it comes to market economies, the cadre members from Zhejiang are experts who possess a business-like demeanor. They are keenly interested in discussing projects, industry development, and economic matters, but are generally less enthusiastic about political topics. They will engage in political conversations, but their interest is not as strong.
I believe that it is sufficient for a country to have only a handful of individuals looking up at the stars; in fact, even one is enough. There is no need for numerous "little suns." In China's system, there are many such "little suns," with leaders idolized during the Cultural Revolution. In contrast, many Zhejiang cadre members prefer to be stars and moons with less political ambition.
Moreover, a considerable number of Zhejiang cadre members are reluctant to accept promotions and serve in other regions. They are content to stay in their hometowns and contribute locally, without seeking higher aspirations.
(This article is part of the series "Zhejiang, Zhejiang People, Zhejiang Economy." The author is Ye Feng, a Zhejiang research scholar.)
Sudan conflict delivers fresh blow to China’s African lending strategy
Financial Times
The conflict in Sudan, where China has extended at least $5bn in loans, could jeopardize Beijing's strategy of financial engagement with Africa. Chinese entities extended loans to Sudan worth $15.5bn in the decade to 2020, and Sudan's current debt to China stood at $5.12bn in early 2022, not including oil prepayment facilities in effect loans that were supposed to be repaid with oil shipments. As the crisis in Sudan deepens, observers say that almost 80% of total lending to Africa by Chinese state entities is to countries in financial distress.
China State-Linked Stock Rally Sputters Further on Profit Taking
Bloomberg
China's state-owned company stock rally has lost momentum as investors sold shares in entries heavily focused on financial and infrastructure areas. The onshore gauge of China's national firms fell by as much as 1.5% and Hong Kong's benchmark CSI 300 declined by 1%, with yesterday's 0.9% fall added to. While China's latest pledge to expand funding access for state-owned companies was initially behind the gains, investors are now calling for a pro-business financial reform to support future growth.
China’s foreign companies on edge after national security raids
Al Jazeera
Foreign companies in China are becoming increasingly anxious following the expansion of China’s espionage law and the national security raids on consultancy firms. Concerns have been heightened due to their work being “essential to doing business in China.” Eric Zheng, president of the American Chamber of Commerce, has urged Chinese authorities to “more clearly delineate the areas in which companies can or cannot conduct such due diligence,” to enable foreign companies to be more compliant with Chinese regulations. The recent investigations have affected only a few foreign firms operating in China. However, the lack of openness about them has caused anxiety throughout the foreign business community. There is not enough transparency to bring confidence back into the market at a time when the relationship between China and the US is at an all-time low.
Pakistan Keen to Pay for Russian Oil Imports With Chinese Yuan
Bloomberg
Pakistan is aiming for a long-term deal to buy crude oil from Russia with Chinese currency, according to a statement by the country's Power Minister. The first cargo of oil from Russia has already been paid for in US dollars, but for future purchases, Pakistan hopes to use the Chinese yuan as it has a currency swap arrangement with the country. China and Russia are seeking to sidestep the US dollar to achieve their goals, while Pakistan is striving to avoid default from its debt amid its heavy reliance on energy imports.
Global virus database pledges clarity after Science article flags access issues
South China Morning Post
The Global Initiative for Sharing All Influenza Data (GISAID) is working to improve its governance and operations after an investigation led by the journal Science raised transparency and access concerns. GISAID supports scientists in sharing information on the genome of the flu and is a major tool for tracking Covid-19 variants, housing the largest repository of SARS-CoV-2 sequences. Science published detailed accounts of scientists temporarily losing access to GISAID’s data stream and receiving intimidating calls or messages after questioning its accuracy. Researchers have shared their correspondence with a suspected “apparent alter ego” of Peter Bogner, GISAID’s founder, and creator. Lawrence Gostin, of Georgetown University, described the revelations as raising important questions regarding GISAID and called for GISAID to involve civil society as part of a broad, inclusive governance structure. Malik Peiris, chair of virology at the University of Hong Kong, praised GISAID for protection for scientific contributors and credited it with enabling the rapid exchange of genetic information, adding that data can be moved to other accessible platforms after the initial sharing stage.
Xi’s Latest Crackdown Snares Experts Hired by Hedge Funds, CEOs
Bloomberg
The attempt by Chinese President Xi Jinping to quell perceived threats to national security is challenging the consultancies and researchers who assist global investors in understanding the country. Last week, the Chinese authorities targeted Capvision Pro Corporation, which they accused of leaking state secrets and having links to foreign intelligence agencies. Capvision claims to have over 2,000 clients, including multinational firms and hedge funds. Staff at Bain & Company and Mintz Group have also faced questioning or investigation. The crackdown forms part of a wider anti-espionage drive, although critics say it is also having the effect of discouraging foreign investment. China continues to try to draw international companies to the country, with Premier Li Qiang promising a “broad space” for such firms as the nation emerged from its Covid-19 lockdown.
US Trade Chief to Meet China Minister in Sign of Warmer Ties
Bloomberg
The US Trade Representative Katherine Tai is set to meet with China’s Commerce Minister, Wang Wentao, later this month; a meeting that would represent the most senior in-person encounter between the US and China amid escalating tensions between the two nations. The meeting, scheduled to take place on the sidelines of an Asia-Pacific Economic Cooperation gathering in Detroit on 25-26 May, is not yet officially confirmed by either the Chinese Ministry of Commerce or US trade representatives. However, the meeting signals a possible resumption of US-Chinese communication and the possibility of key bilateral engagements, including a call between President Biden and President Xi. Tensions have risen between the two countries over issues including US support for Taiwan and export controls restricting China’s access to high-end technology.
Mitsubishi Motors to stick with China despite poor sales
Japan Times
Mitsubishi Motors has denied reports that it is planning to exit the Chinese car market, despite mounting competition from domestic rivals. While the carmaker has faced production hold-ups and sluggish sales in the country, CEO Takao Kato told reporters no decision had been made on leaving China, instead stating that the Japanese manufacturer needed a plan to "overcome difficulties". Kato said the Mitsubishi plant in Hunan would reopen in June, but admitted sales for the quarter ending in March would probably fall again.
Japan and France vow to ensure peace and stability in Indo-Pacific region
Japan Times
Japan and France have vowed to stand together in ensuring peace and security in the Indo-Pacific region, even as China continues to extend its influence. The announcement was made during bilateral discussions between the two nations’ foreign and defense ministers during which they confirmed their collective view on Taiwan remained unchanged. The meeting comes amid Japan’s efforts to bolster its security relationships in Europe and the Indo-Pacific region in the face of increasing pressure from China.
Hong Kong stocks fall for a second straight day ahead of US inflation data
South China Morning Post
Hong Kong stocks saw a decline as investors sat on the sidelines before US inflation figures were released, with the results expected to influence a Federal Reserve rate decision. This led to a 0.7% fall for the Hang Seng Index, while the Tech Index retreated 0.6% and the Shanghai Composite lost 0.7%. Meituan slipped 1.7% to HK$127.90, JD.com fell 1.2% to HK$134.90 and BYD lost 0.5% to HK$238.80. Meanwhile, two stocks made their debut on Wednesday, with Semiconductor Manufacturing El increasing by 8.3% while Zhejiang Wanfeng Chemical surged 37% in Shanghai. Major Asian markets also saw losses, with the Nikkei 225 in Japan falling by 0.4%, the S&P/ASX 200 in Australia declining by 0.2% and the Kospi in South Korea dropping by 0.1%.
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