A Peek Into Everyday China – Part 5 : Something Unusual by Lt Gen P R Shankar (R)

 

Nothing like beginning a new year in China. The headlines in the last week of 2021 and on New Year’s Day give you a sense that all is not well in China…something is amiss…the pace at which ‘amiss’ is happening is increasing…These days when I read anything about China I get reminded about the famous Ernst Hemmingway line in his novel The Sun Also Rises.. “How did you go bankrupt?" ..”Two ways. Gradually, then suddenly.” I could have put a few more headlines into this mix…however for one reading.. this is enough…more later…on to the first headline… 

  

Headline : China’s smallest firms failing at historic pace as 4.37 million close up shop and registrations plummet @ https://www.scmp.com/economy/china-economy/article/3161554/chinas-smallest-firms-failing-historic-pace-437-million-close?module=lead_hero_story&pgtype=homepage

Excerpts : Just this month, former finance minister Lou Jiwei said official economic indicators failed to paint an accurate picture of the economy, and publicly available data did not show how many firms had vanished…Only 1.32 million new micro and small firms opened in China during the first 11 months of this year, compared with 6.13 million last year…About 4.37 million of China’s smallest businesses permanently shut their doors in the first 11 months of the year – more than three times the number of new ones that opened during the same time, according to data obtained by the Post…for the first time in two decades, the rate of deregistration among micro and small businesses surpassed the number of those newly registered in China…The data is particularly relevant given that Beijing considers the nation’s more than 40 million micro and small firms the “backbone” of China’s private sector, underpinning the national economy. Their struggles are a reflection of broader economic headwinds that analysts say could see gross domestic product (GDP) drop below 4 per cent in the fourth quarter of this year.

Comment : The fat seems to be in the fire. When small businesses start shutting shop then the problem is deep rooted. The question is not about recovery but where will this slide stop?

                       

Headline : China’s jobseekers search for ‘stability’ as coronavirus and regulatory crackdowns take toll @  https://www.scmp.com/economy/china-economy/article/3161501/chinas-jobseekers-search-stability-coronavirus-and-regulatory?module=lead_hero_story&pgtype=homepage

Excerpts : More Chinese are abandoning their search for once-coveted private sector jobs and pursuing a stable career in the public sector…The job market has undergone big changes in the past two years amid a virus-induced economic slump and regulatory tightening.

Comment: Looks like the Chinese are getting into Indian habits where a government job is highly coveted…next an article could pop up where marriage prospects of government employees goes up! 

Headline : China’s ageing population, coronavirus and youth unemployment threaten 2022 job market @ https://www.scmp.com/economy/china-economy/article/3161186/chinas-ageing-population-coronavirus-and-youth-unemployment

Excerpts : Official data showed 12.07 million jobs were created in the first 11 months this year, fewer than the 12.79 million over the same period in 2019…Job market under pressure from Covid-19 outbreaks, an ageing population, and recovery in the service sector has been delayed by the pandemic…China is facing a daunting task to stabilise employment next year, as the world’s second largest economy continues to be tested by the coronavirus pandemic and a fast-ageing society…The country must also ensure enough jobs are created for young people and new graduates, while solving structural unemployment, said the Society of China Analysis and Forecast (2022), an annual report published last Friday by the Chinese Academy of Social Sciences (CASS).

Comment : At this rate of job erosion the Chinese version of naukri.com will go out of business! 

Headline: China’s Xi Jinping puts focus back on food security @ https://www.scmp.com/news/china/politics/article/3161100/chinas-xi-jinping-puts-focus-back-food-security

Excerpts: Ensuring supplies of primary products a major strategic issue, Xi tells Communist Party inner circle…Country must also ensure there’s no large-scale return to poverty, he says…Xi has renewed his call for the country to safeguard its grain supply and rural development, signalling continued concerns at the top about food security….During a Politburo Standing Committee meeting before the annual Central Rural Work Conference in Beijing on the weekend, Xi said that ensuring the supply of primary agricultural products was an important strategic issue…“The food of the Chinese people must be made by and remain in the hands of the Chinese,” he was quoted as saying. “Everyone needs to take responsibility for food security.”

Comment : China is striving for ‘atmanirbharta’ in food…Xi jinping is really worried about it and has been mouthing these statements for the past three years regularly…these days the frequency has increased. Hmm…it will be ironic if we can offer him some free food grains from our FCI go-downs before they rot…   

  

Headline : Chinese rust belt city falls victim to squeeze on local government spending@https://www.scmp.com/economy/china-economy/article/3161094/chinese-rust-belt-city-falls-victim-squeeze-local-government

Excerpts : The authorities in Hegang, a former mining city in Heilongjiang, have been forced to stop recruiting after being hit by plunging revenues and growing debts…The city’s problems highlight the growing pressure on local governments to balance their books as Beijing becomes increasingly concerned about risky debts…The economic slowdown in what was once China’s industrial heartland and a squeeze on local government debt has claimed its latest victim after a former coal-mining city in the northeast was forced to freeze its hiring process…Hegang, once a coal-rich city in northern Heilongjiang, has been battling an economic slowdown and dwindling population in recent years, problems that have, in turn, hit government revenues.

Comments The Chinese are producing a movie called ‘Karz’…now that local governments have also joined the debt merry-go-round.... 

Headline : Revamped Turkic states group ‘adds to extreme uncertainty’ at China’s door @ https://www.scmp.com/news/china/diplomacy/article/3161085/revamped-turkic-states-group-adds-extreme-uncertainty-chinas

Excerpts : The newly renamed Organisation of Turkic States has three member nations that border Xinjiang in far western China…Beijing-based analyst Yuan Peng says ‘a new force is rising in the heartland of world geopolitics’…An upgrade to a grouping of Turkic-speaking states is adding to “extreme uncertainty” in Central Asia, a heavyweight policy adviser to the Chinese government has warned….“[It] has swiftly transformed into its current form and it’s obvious that it’s aiming at something beyond an ‘organisation’,” Yuan Peng, president of the Beijing-based China Institutes of Contemporary International Relations (CICIR), wrote on the think tank’s social media account…Yuan was referring to the Cooperation Council of Turkic-speaking States, which was renamed the Organisation of Turkic States in November during its eighth summit in Istanbul.

Comments: The Turkic states are Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey and Uzbekistan….in future Xinjiang? Is this the Turkish cat amongst the Chinese pigeons in Xinjiang? Ha ha…

              

Headline : Chinese aircraft carrier the Liaoning back home after being shadowed by Japanese warship during drills @ https://www.scmp.com/news/china/military/article/3161753/chinese-aircraft-carrier-liaoning-back-home-after-being

Excerpts : Chinese strike group has spent 20 days conducting combat training in the Yellow and East China seas and the western Pacific, PLA Daily says…Navy and state broadcaster release images and footage of Japan’s Izumo aircraft carrier and a Japanese fighter jet close by..

Comments : The Chinese must be heaving a sigh of relief that their aircraft carrier is back home …safely…the Japanese samurai may have turned peaceful…he remains lethal…  

Headline : Covid-19 vaccines: Sinovac recipients may need two booster shots, says scientist @ https://www.scmp.com/news/china/science/article/3161714/covid-19-vaccines-sinovac-recipients-may-need-two-booster-shots

Excerpts : A preprint study suggests adding a dose of Pfizer after two shots of the Chinese vaccine boosts protection but was not enough to stop Omicron infection…Sinovac is widely used in China and developing countries…

Comment : Very clearly Chinese vaccines are poor…maybe after the peer review of the study, it might come out that the two booster shots are actually to replace the original vaccines! 

Headline : China property crisis: if last year was bad for the likes of Evergrande, Kaisa and Fantasia, just wait for 2022 as more pain predicted for investors @ 

https://www.scmp.com/business/china-business/article/3160806/china-property-crisis-if-last-year-was-bad-likes-evergrande?module=lead_hero_story&pgtype=homepage

Excerpts : The outlook for China’s developers appears bleak amid looming debt maturities, falling home sales and uncertainty over the proposed property tax…Home sales are likely to drop between 5 and 10 per cent this year, according to forecasts by analysts, rating companies…Last year has no doubt been difficult for Chinese developers and the pain could get worse in the new year for companies, homebuyers and investors alike. A liquidity crunch amid slowing home sales are likely to dominate sentiment…China Evergrande, Kaisa Group, Fantasia Holdings and Modern Land (China) all made headlines over their failure to repay onshore and foreign creditor….

Comments : I just hope none of my readers have booked a flat in …Kaisa…Evergrande…Modern Land…Fantasia…that is kissing your money good bye… 

                     

Headline : Covid-19 in China: Xian cases pass 150 mark for 7th day in a row  @ https://www.scmp.com/news/china/politics/article/3161789/covid-19-china-xian-cases-pass-150-mark-7th-day-row?module=lead_hero_story&pgtype=homepage

Excerpts : Provincial party chief urges officials to make every effort to contain the outbreak, the most serious to hit the country in the past 12 months…The capital of Shaanxi province has been in lockdown for 10 days and subject to rounds of mass testing…

Comment : China had declared victory over the virus…Now the Virus is returning the compliment…this movie is called … Revenge of the Virus…only thing is that… it is not a movie but reality… 

Overall Comment : When you read all parts of my “ A Peek into Everyday China Series”, you might get the idea that I am repeating the stories. They say that when you repeat a lie a 1000 times it becomes the truth. What happens when you repeat a truth five to six times? No one believes it! By the way, this is the truth as much as SCMP has published it.  The only thing original and from my imagination are the comments…now I am going to plagiarise even that… Something unusual is occurring in China as per an article @ https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-When-China-s-leading-paper-ignores-Xi-all-bets-are-off . The article says that the People's Daily, the mouthpiece of the Chinese Communist Party, published a commentary without a single mention of Xi Jinping. Sacrilege.  The commentary heaped praise on Deng Xiaoping, referring to him by name nine times. It also highlights  the achievements of  Jiang Zemin and Hu Jintao, both of whom were Deng's chela’s.  Jiang and Hu made China the second-biggest economy, top exporter and the world's factory. Since the Xi Jinping era began in 2012, China has lived on the leftovers from the wonderful feast prepared by Deng, Jiang and Hu…wow! Are we seeing something here? A  prominent economist Li Daokui, an adviser to Premier Li, warned against economic optimism, citing receding domestic demand. Harsh conditions will greet the Chinese economy in the coming years, the economist said. Over the next five years, China will face its most difficult period since the policy of reform and opening-up was put into effect four decades ago, he added. The economic picture Li Daokui painted was grim. Property prices will be in structural decline, and local governments will have to deal with tight finances, he said. The education and entertainment industries will have to contend with new regulations. Former Finance Minister Lou Jiwei, revealed that Chinese statistics do not reflect negative changes in the economy to cause a stir. He is a "reformist" close to former Premier Zhu Rongji.  Lou has kept a delicate distance from Xi's economic line. The remarks by Li Daokui and Lou Jiwei indicate the severity of China's current economic situation.  The struggle over political lines is playing out between the Mao-Xi disciples, who prefer the concentration of political power, and the Deng-Jiang-Hu believers, who raise the banner of reform and opening-up. I would suggest to all those who are really interested in China to read this article in full…it covers all bases which I am trying to touch in this series…it is revealing. Aage Aage dekho hota hai kya… till the next ‘Peek’.