No. 76
In Turbulent Waters: Corporate Strategies in Times of Geo-economic Tensions
Frank PIEKE and Bert HOFMAN, 14 March 2024
In 2023, foreign direct investment (FDI) into China slumped to US$30 billion, a level not seen since the 1990s and almost 90% down from peak inflows in 2021. Even before 2023, China had also been losing market share in global FDI. Forward-looking indicators, such as announced greenfield investments and mergers and acquisitions, also show a distinct move away from investment in China. Beneficiaries of this shift include India, Vietnam and Indonesia.
No. 75
China’s Government Work Report: First Impressions
Bert HOFMAN, 8 March 24
The government work report (GWR) presented by China’s Premier Li Qiang to the National People’s Congress (NPC) contained few surprises. The report, duly approved by the Communist Party’s Politburo meeting of 29 February, projected gross domestic product (GDP) growth target of “around 5%” and offered some modestly supporting macroeconomic policies to get there. This support will be needed, as the consensus forecast of Focus Economics, a research firm, put the average expectation among banks and other analysts at 4.6 %, the same growth the IMF projected in January this year. Provincial governments, which have already published their forecast in the past couple of months, projected on average growth of 5.4%, with few provinces below 5%. This suggests that the “around 5%” had already been agreed upon at the Central Economic Work Conference of the Central Committee of the Communist Party of China (CPC) in December last year.
No. 74
Evergrande’s Last Chapter? Prospects and Implications
LI Yao and Sarah Y TONG, 1 March 2024
THE WIND-UP ORDER, AT LAST
On 29 January 2024, the Hong Kong High Court ordered the liquidation of China Evergrande (hereafter “Evergrande”) and appointed Alvarez & Marsal, the liquidator. Alvarez & Marsal is renowned for its leading role in the 2008 Lehman Brothers liquidation process. The decision followed a series of delays, where the court hearing had been postponed seven times since a petition had been made by a strategic investor 18 months earlier, in June 2022.
No. 73
Cultural Catchphrases, Buzzwords and Lingo That Defined China in 2023 Messaging
LIM Tai Wei, 29 December 2023
Cultural catchphrases, buzzwords and lingo encapsulate the spirit of the times. For some, it is a form of social censors that pick up sharp, significant or noticeable social changes in daily activities. They are snapshots of how ordinary Chinese people perceive the changes around them. Buzzwords also carry the effect of influencing behaviour and consumerism. Some of these catchphrases or buzzwords were given official recognition through a laundry list released by the National Language Resources Monitoring and Research Centre, or disseminated through social media video comments and online news reporting.
No. 72
China’s Central Economic Work Conference Promises Better Policies, More Coordination and Stricter Messaging
Bert HOFMAN, 27 December 2023
To divine directions in China’s economic policy, the Central Economic Work Conference (CEWC), which was held from 11 to 12 December is key. The meeting, a regular occurrence on the Communist Party of China (CPC) calendar, offered some hope of more support for growth and reforms, though markets reacted lukewarm. The meeting closely followed the guidance issued by the Politburo of CPC that met a few days ahead of it. In fact, CPC General Secretary Xi Jinping felt confident of the correct outcome and left for a state visit to Vietnam after the first day and after delivering an important speech.
No. 71
A Summit in Troubled Times
Lance L P GORE, 24 November 2023
The just concluded Xi-Biden summit in San Francisco took many by surprise. In the past six years, the relationship between the two countries has plummeted continuously under two US presidents, reshaping international politics; there have been talks that the two countries are destined for war. Expectations for this summit were low, but the summit at least temporarily stemmed the long decline in bilateral relations, bucked the trend of decoupling and delinking, reached a series of agreements on strengthening exchanges, opened some channels for interaction and arranged follow-up actions.
No. 70
China Relaxes Regulations for a Soft-landing of the Real Estate Sector
ZHOU Na, LI Yao and Sarah Y TONG, 16 November 2023
China’s real estate sector has been on a gradual decline since late 2021, a slow-motion contraction occasionally punctuated by crises involving giant property developers. The declining property market poses several challenges, including potential systemic financial risks, further unemployment pressure and risk of social instability. The Chinese authorities have responded with various policies such as lowering housing loan costs and easing restrictions on market participants primarily to confront short-term problems and stabilise the market. In essence, the goal is to mitigate the emerging risks and guide the sector towards a soft landing. The long-term goals are to meet genuine housing demand, curb speculative practices in the housing market and transition the sector into a secondary role in the economy rather than a primary driving force.
No. 69
How can the United States and China cooperate on resolving the Middle East conflict?
ZHU Zhiqun, 31 October 2023
There may be a silver lining in the current Israel-Hamas conflict. The conflict, though tragic, provides a potential opportunity for US-China cooperation in the Middle East. The United States can use its exceptional influence on Israel to press for restraint and de-escalation, and China can take advantage of its friendly relations with both Palestine and Israel to call for a ceasefire. Ultimately, the United States and China will need to work together to help address the fundamental problems in the Middle East and seriously implement the “two-state solution”.
No. 68
Taiwan As a Reference Point for Mainlanders in Youth Unemployment
CHEN Gang, 18 September 2023
Chinese youths are bearing the brunt of the deceleration in the Chinese economy. China’s unemployment rate among 16 to 24-year-olds has been rising since the start of 2023, hitting a record high of 21.3% in June, a number so staggering that the Chinese government subsequently ceased the release of such data.
No. 67
Whither China’s Private Sector?
LI Yao and Sarah Y TONG, 4 September 2023
BOOSTING PRIVATE SECTOR’S BUSINESS CONFIDENCE A TOP PRIORITY
Business confidence in China’s economy has been flailing for months as evidenced by the continuous decline in composite Purchasing Managers’ Index for output since March 2023. In particular, China’s private sector has shown especially weak and passiveness in economic activities. Not only has the annual growth in fixed asset investment by private firms started to decelerate as early as February 2021, it has turned negative since the beginning of 2023. Private sector fared worse than state-controlled enterprises as well as foreign invested enterprises and firms with funding from Hong Kong, Macao and Taiwan.
No. 66
Why There Is No Fiscal Stimulus in China in 2023
Christine WONG, 30 August 2023
The Chinese economy is in a deep slump. Three years of the pandemic and recent policy missteps had brought gross domestic product (GDP) growth to just 3% in 2022, the slowest since 1976 except for the 2.2% growth in 2020, when COVID first hit. The end of the zero-COVID policy in December 2022 brought a spike in economic activity in early 2023, but the recovery was short-lived. Growth momentum has slowed since April, and the gloom over China’s economic prospects has progressively thickened. The unprecedented 21.3% in youth unemployment in June, slowing manufacturing output, double-digit declines in exports and imports, and steep declines in housing sales led the July Politburo meeting to announce that “insufficient domestic demand” was a serious problem facing the economy and called for “stepping up countercyclical measures”.
No. 65
Cambodian Prime Minister Hun Sen’s Visit to China: Status of the Bilateral Relations
YU Hong, 21 February 2023
Cambodian Prime Minister Hun Sen’s three-day visit to China from 9 to 11 February 2023 saw the signing of the “Joint Statement on Building a China-Cambodia Community with a Shared Future in the New Era”, which reflects the strong and robust bilateral ties in political, economic and defence cooperation. China and Cambodia also signed a series of bilateral cooperation agreements, particularly on infrastructure financing and construction, and agriculture.
No. 64
The First Anniversary of the Implementation of the Regional Comprehensive Economic Partnership
YU Hong, 27 January 2023
After a marathon of 31 rounds of negotiations in eight years, the RCEP (Regional Comprehensive Economic Partnership), which includes the 10 ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and Australia, China, Japan, New Zealand and the Republic of Korea, was signed in November 2020. From January 2022, RCEP has officially become operational.
No. 63
The Impact of Chinese Dam Construction on the Mekong Downstream: Implications for Vietnam
Ryan CLARKE and Edward PARK, 12 January 2023
The growing number of dams in the Mekong River in Yunnan province has drawn increasing attention from China’s ASEAN downstream neighbours. China’s dam construction, combined with a perceived lack of communication with downstream Mekong countries, has raised concerns regarding acute water stress.
No. 62
End of Dynamic Zero COVID for China?
Bert HOFMAN, 1 December 2022
OPTIMISING ZERO COVID
Zero-COVID fatigue has begun to plague China. Frustration over China’s COVID policies boiled over last week following a fire in Urumqi that killed 10 people, who were allegedly in a building that was in lockdown. This follows the recent accident in Guizhou, where 27 bus passengers were killed on their way to a quarantine facility. The protest at the Foxconn factory in Zhengzhou was also partly motivated by the COVID measures taken, in addition to more general concerns on labour conditions.
No. 61
The Manifesto of Leninism for the 21st Century: The First Take on the 20th National Congress of the Communist Party of China
Lance L P GORE, 2 November 2022
Representing the government with the Party, exemplifying the rule of law of the state with Party disciplines; driving social revolution with the Party’s self-revolution; and creating a “new form of human civilisation” by building “socialism with Chinese characteristics” — Lenin’s vanguard party model was lifted by “Xi Jinping Thought” to a whole new level. Call it “Leninism for the 21st century”, with the 20th National Congress of the Communist Party of China (CPC) its manifesto.
No. 60
Power Crunch in Sichuan Province: Resource Curse or Short-sighted Energy Sector Development?
LI Yao and KONG Tuan Yuen, 25 October 2022
In August 2022, Sichuan experienced an unexpected crisis of both power outage and associated industrial production disruption. The province is one of China’s largest electricity producers who supply to meet growing demand in other parts of the country. It is also a key link in China’s supply chains for key sectors such as semiconductor and auto mobile industries. Thus, the recent power crunch has made an impact that is far beyond its local economy.
No. 59
New Regulations Further Politicise China’s Cadre Corps
Frank N PIEKE, ZHOU Na and SHAN Wei, 7 October 2022
On 20 September 2022, the Chinese Communist Party (CPC) published new regulations on the promotion and demotion of leading party cadres. The regulations replace earlier, provisional regulations of 2015, and differ from these especially in one crucial respect: Articles 5 and 6 of the 2015 regulations that stipulated the mandatory retirement ages and term limits for the appointment of leading cadres have been dropped in the new regulations. Xi Jinping had already arranged for lifting the number of terms (originally set at two) for himself as president at the 2018 National People’s Congress. The 2022 regulations have now formalised and generalised this practice with potentially major implications for the careers of all leading cadres across China.
No. 58
Chinese Netizens’ Response to Nancy Pelosi’s Visit to Taiwan
SHAN Wei and Ryan HO, 26 August 2022
Speaker of the US House of Representatives Nancy Pelosi’s trip to Taiwan had stirred up a huge whirlwind of discussions on Chinese social media. As many China observers had expected, Chinese netizens displayed strong nationalist sentiments and hawkish viewpoints. There was, however, considerable diversity in opinions. A small but significant group had clearly expressed its opposition to the escalation of war, while an even smaller group of critics or liberals had expressed its sympathy for Taiwan and criticised the mainland authorities.
No. 57
China’s Mortgage Boycotts Signal Deeper Problems in Its Real Estate Sector
LI Yao and ZHOU Na, 24 August 2022
On 30 June 2022, homebuyers of a real estate project in Jiangxi province issued a “Mortgage Payment Suspension” letter online, triggering a rapid spread of mortgage boycotts across China. According to statistics shared on github.com, as of 7 August 2022, homebuyers of more than 300 projects announced a halt to mortgage repayments in 26 provinces and municipalities, mostly in China’s central and coastal regions. Over 90 developers are affected, including troubled private real estate companies, such as Evergrande, Sunac, Dangdai, Aoyuan, Kaisa, some listed private developers including Longfor and Zhixin, and Greenland, a state-controlled developer.
No. 56
China’s Countermeasures to Pelosi’s Taiwan Visit Unveil a New Normal: Claiming Sovereignty over Taiwan by Military Means
QI Dongtao, 12 August 2022
Nancy Pelosi’s visit to Taiwan is arguably an inevitable result of an intensifying strategic rivalry between the United States and China. Even without Pelosi’s visit to Taiwan, the strategic rivalry is expected to lead to incidents on the Taiwan issue someday. In light of China’s countermeasures and their effects, the three parties, namely China, Taiwan and the United States, have been relatively cautious when handling the aftermath of Pelosi’s visit. For example, the Chinese government announced its military exercise plan right after Pelosi’s arrival in Taipei on the night of 2 August; the exercises started two days thereafter on 4 August after she had left Taiwan. This two-day restraint disappointed many Chinese. The main flight path of Chinese missiles over Taiwan is in space and not in Taiwan’s airspace, and Taiwan did not issue air raid warnings, another sign of restraint by both China and Taiwan. For the United States, its navy has been careful not to provoke China and escalate the situation before and after the Pelosi visit, especially during Chinese military drills.
No. 55
China’s Monetary Policy Update: Stronger and More Targeted to Reinforce Recovery
LI Yao,13 July 2022
China’s economy started with a better-than-expected performance in early 2022. However, the negative impacts of intermittent COVID-19 lockdowns became apparent in March, and together with the unanticipated geopolitical events, formed mounting headwinds for the economy. After Premier Li Keqiang warned of a “grave and uncertain” outlook for the Chinese economy in his annual work report on 5 March 2022, the Chinese government has announced and launched several waves of stimulus measures, including dozens of monetary policies.
No. 54
The Asian Financial Crisis 25 Years On
Bert HOFMAN, 12 July 2022
Twenty-five years ago on 2 July 1997, the Thai authorities decided to float their currency, the Thai Bhat, after having practically run out of international reserves in its defence since late 1996. That move triggered the Asian Financial Crisis (AFC), a veritable storm over East Asian economies—from Indonesia to Malaysia, Korea, Philippines and Hong Kong.
No. 53
Why China’s 2022 Fiscal Stimulus Will Fall Short
Christine WONG, 4 July 2022
Data released by China’s Ministry of Finance on 16 June 2022 offer a glimpse of the economic damage caused by the spread of the omicron variant and the containment policies adopted since late March. They also point to trouble ahead in the government’s plans for reviving the economy.
No. 52
Infrastructure Investment Priorities for Rebalancing China’s Economy
Richard YARROW, 29 June 2022
May 2022 brought sobering news for China’s economy, with particularly dramatic numbers on capital investments. Investment spending represents an unusually large share of China’s economy—over 40% of China’s gross domestic product (GDP) versus 20% in the United States—in part thanks to a real estate sector which, some scholars suggest, underlies nearly a third of economic activity. May’s reports of a 47% fall in property sales and a 44% fall in new construction projects are ominous for the 2022 growth prospects of an economy heavily reliant on such investments.
No. 51
Crisis Mentality and the Preference for Mass Testing over Vaccination in China
CHEN Gang, 24 June 2022
Shanghai’s gruelling two-month COVID lockdown ended on 1 June 2022 to the relief of its residents. However, worries of further “closed management” movement restrictions remain as all districts are required to conduct mass COVID-19 tests every weekend until the end of July.
The spread of the highly transmissible Omicron variant has inflicted enormous socioeconomic losses to China since the beginning of this year, with lockdowns in large cities like Shanghai, Changchun and Jilin shutting factories and production lines.
No. 50
Building a Unified National Market in China: What is New in the Government’s Latest Guidelines?
LI Yao, Sarah Y TONG and ZHOU Na, 4 June 2022
On 10 April 2022, the Central Committee of the Communist Party and China’s State Council jointly released the “Guidelines for Accelerating the Building of a Unified National Market” (the Guidelines hereafter). The concept of a unified market is not new. In the last two decades, China has introduced a series of efforts devoted to break down market barriers across regions and related policy documents have also been issued. China’s highly centralised political structure is also conducive for the execution of a unified market regulation, making such a guideline redundant.
No. 49
The Impact of the Ukraine Crisis on the Taiwan Issue
QI Dongtao, 25 May 2022
The impact of the Ukraine crisis on the Taiwan issue is multifaceted, and could be in some respects significant and far-reaching. To the West, and especially the United States, Russia’s invasion of Ukraine has elevated the Taiwan issue to another level of urgent concern. The slogan “Today, Ukraine, tomorrow, Taiwan!” has gripped both Taiwanese and Chinese media. Possibly to calm jitters in Taiwan, the emphasis of subsequent discussions in Western academic and policy circles was on the difference between Taiwan and Ukraine. This line of reasoning argues that Taiwan’s strategic value to the United States is more important than that of Ukraine, and that US commitment to Taiwan is legally guaranteed. The Taiwan Relations Act requires the United States to support Taiwan, possibly even send troops, while the United States offers only indirect support in the case of Ukraine.
No. 48
China Stands by Its Zero-COVID Policy As Omicron Rages on in Shanghai
CHEN Gang, 8 April 2022
Shanghai, once a model city for its flexible yet efficient management of COVID-19, is now in full-scale lockdown due to the highly transmissible Omicron variant spreading among its 26 million residents. It has also become the largest single city to be locked down to date. Reported infections rose to about 20,000 on 6 April, after the financial hub had battled the new wave of pandemic for more than a month.
No. 47
Can China’s CIPS help Russia after its ban from SWIFT?
P S SRINIVAS, 4 March 2022
In response to Russia’s invasion of Ukraine, several governments are taking coordinated action to cut off the access of several Russian financial institutions and wealthy individuals to international financial systems. The objective is to disrupt Russian financial institutions’ ability to conduct cross-border business, weaken Russia’s economy and reduce Russia’s ability to continue to finance the war in Ukraine. Among the sanctions announced thus far are the bans being placed on selected Russian banks and financial institutions on accessing SWIFT. On 3 March 2022 seven Russian banks were given 10 days to stop using SWIFT, after which they would be disconnected from the system. Sanctions have also been announced on Russia’s central bank, sovereign wealth fund and ministry of finance, severely constraining their ability to conduct financial transactions in global markets.
No. 46
China’s Initiatives to Promote Innovations and Strengthen Regulations in its Digital Economy
QIAN Jiwei, 24 January 2022
On 12 January 2022, China’s State Council released the 14th Five-Year Digital Economy Development Plan (henceforth the Plan). The importance of the digital economy was also highlighted in a recent speech by China’s President Xi Jinping, published in the second issue of Qiushi (the leading biweekly official theoretical journal of the Communist Party) in 2022. In the speech, Xi considered the digital economy as a major driving force of the Chinese economy in the years to come: “In today’s era, digital technologies and the digital economy are opportunities for the world’s technological revolution as well as industrial transformation. They are key areas in the new round of international competition”.
No. 45
Biden-Xi Meeting and the Internationalisation of the Taiwan Strait Security
QI Dongtao, 17 December 2021
Taiwan was once again in the limelight in the growing competition between the United States and China. Remarks by President Biden and Secretary Blinken had hinted at a possible shift in the longstanding US position on the island. At the same time, China’s growing military capabilities, and recently more frequent incursions in Taiwan’s air defence zone and maritime operations in the proximity of the island, had raised concerns on Beijing’s intentions with Taiwan. In the November Biden-Xi video conference, President Biden assured President Xi Jinping that the United States maintains its long-standing “one China” policy based on the Taiwan Relations Act, the three Joint Communiques and the Six Assurances. President Xi Jinping in turn assured that China is in no hurry to unify with Taiwan and is willing to strive for peaceful reunification with the utmost sincerity.
No. 44
The China-Laos Railway: A “Game Changer” for Laos?
YU Hong, 16 December 2021
After five years of construction, the high-profile China-Laos railway project connecting Kunming, the provincial capital of China’s Yunnan province, to Vientiane, the capital of Laos, has been completed. It has formally been in operation since December 2021. On 3 December 2021, Xi Jinping, China’s president, held a virtual meeting at the official opening ceremony with his Laotian counterpart, President Thongloun Sisoulith of Laos. This reflects the significance of the China-Laos Railway to both nations.
No. 43
US-China Competition: Nature, Sources and Prospects
Bilahari KAUSIKAN, 30 November 2021
US-China competition is now in a new phase. After China and the United States reestablished contact after the communist victory in 1949, periodic disagreements and tense episodes occurred, particularly over Taiwan and human rights issues, but the overall emphasis was on engagement until around 2010. Even the Tiananmen crackdown in 1989 did not permanently derail engagement. Today, the emphasis has reversed: engagement will not entirely cease, but competition now dominates.
No. 42
China’s Hengqin and Qianhai Plans to Deepen Cross-Border Integration within the Greater Bay Area
YU Hong, 25 November 2021
FAR MORE THAN REGIONAL ECONOMIC INITIATIVES
The Chinese Communist Party Central Committee and State Council of China jointly released the “Master Plan of the Development of the Guangdong-Macau Intensive Cooperation Zone in Hengqin” (henceforth, the Hengqin Plan) and the “Plan for Comprehensive Deepening Reform and Opening Up of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone” (the Qianhai Plan) separately in early September 2021. These two plans are targeted at deepening economic cooperation and promoting cross-border integration within the Guangdong-Hong Kong-Macau Greater Bay Area (GBA). The GBA, with around 70 million in population, is a major economic powerhouse for China. In 2019, the combined GDP (gross domestic product) of the GBA was US$1.95 trillion, representing 13.8% of the nation’s total GDP. The GBA includes the two Special Administrative Regions of Hong Kong and Macau, as well as nine Guangdong cities of Guangzhou, Shenzhen, Foshan, Huizhou, Zhuhai, Dongguan, Jiangmen, Zhongshan and Zhaoqing.
No. 41
China’s Third Historical Resolution: A Preview
Bert HOFMAN, 16 November 2021
China’s Communist Party has just completed the Sixth Plenum of the Central Committee of the 19th Party Congress. The meeting, from 8 to 11 November, will be remembered for passing a Historical Resolution, only the third in the party’s history.
“Plenums” are meetings of the Communist Party of China’s Central Committee and their alternates, currently about 350 people. A Central Committee is elected every five years at every National Party Congress, with the last held in 2017 and to last till next year when the 20th National Party Congress takes place and a new Central Committee is chosen. In between National Party Congresses are usually seven Plenums.
No. 40
Is China’s Power Crunch Just an Unexpected Outcome of Its Carbon Neutral Policies?
KONG Tuan Yuen and LI Yao, 18 October 2021
Since late August 2021, various localities in more than 10 provinces in China including Heilongjiang, Jilin, Liaoning, Guangdong and Jiangsu have suffered from power cuts. These power cuts have affected industrial enterprises and households alike. Discussion on the causes have been numerous, ranging from domestic economics to international political contention.
No. 39
The Rise of Kishida Fumio and Its Implications
LIM Tai Wei, 15 October 2021
Compared to former Prime Minister Suga Yoshihide who rose through the ranks and not from a political family, Kishida Fumio is a more likely scion candidate for prime ministership in Japan’s political world. His father and grandfather were House of Representatives parliamentarians. Although Kishida has been criticised for being timid and indecisive in politics, there are few criticisms levelled against Kishida’s ability to navigate Japan in complex geopolitics. Indeed, Kishida has performed well as foreign minister for more than four years, the most experienced Liberal Democratic Party (LDP) candidate to lead Japan in foreign policy.
No. 38
China’s New Stock Exchange for Small and Medium-Sized Enterprises
P S SRINIVAS, 13 October 2021
China has a new stock exchange. On 2 September 2021, President Xi Jinping announced that China would support innovation-driven small and medium-sized enterprises (SMEs) by reforming the New Third Board (The National Equities Exchange and Quotations [NEEQ] in Beijing, operated by NEEQ Corporation Limited, also known as the Third Board). The new Beijing Stock Exchange (BSE) would act as the “primary platform” for serving such SMEs. As might be expected of an initiative announced by President Xi, the China Securities Regulatory Commission (CSRC) immediately stated that it was “excited” by the prospect of a new stock exchange and would “resolutely implement” the president’s proposal.
No. 37
China’s Comprehensive and Progressive Agreement for Trans-Pacific Partnership Application
KONG Tuan Yuen and Sarah Y TONG, 4 October 2021
On 16 September 2021, China officially applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). While the timing is somewhat unexpected, less than a year after China and 14 other countries signed the Regional Comprehensive Economic Partnership (RCEP), it did not come as a surprise. Indeed, China has reversed its stance on the CPTPP and indicated its interest for some time before making the concrete step of sending in its application.
No. 36
Does China Have Unique Advantages in Afghanistan? Risks and Opportunities for Beijing’s Long Game
Ryan CLARKE, 30 September 2021
CHINA IS NOT A NEW ENTRANT TO AFGHANISTAN
China’s experience in Afghanistan can be directly traced all the way back to the Tang Dynasty in the eighth century. During this period, China exerted direct control over Afghanistan before being defeated in the Battle of Talas against the Abbasid Caliphate in 751. In the contemporary period, China also has decades of experience working with various factions that constitute Afghanistan today.
No. 35
Co-existing with COVID-19
LIM Tai Wei, 16 September 2021
In the 20th century, there were four influenza pandemics which developed into a new version of the flu that continued to circulate in the world for decades; at least two of them have evolved into seasonal-flu strains found today. Scientists postulated that common cold viruses are likely to have originated from previous pandemics. History also shows that, in the transition from pandemic to endemic, the total elimination of viruses in the past appears to be the exception rather than the norm. Smallpox is the only human virus ever removed from the face of the Earth in 1980 after a long and sustained vaccination campaign.
No. 34
What Is up with China’s Fiscal Policy? The Puzzle of Recent Budget Data
Christine WONG, 7 September 2021
China’s budget data for the first seven months of 2021 sprang some surprises. First, the budget nearly perfectly balances, with ordinary budget revenues amounting to RMB13.77 trillion and expenditures to RMB13.79 trillion. If this trend were to hold for the year, it would mark the first time since 1985 that the government’s general budget has been in or near balance. MOF (Ministry of Finance)-reported expenditures were 3.3% higher than that for the same period in 2020. Due to the disruptions of the COVID-19 pandemic last year, a better comparison is with the pre-COVID budget of 2019, against which the 2021 expenditures were 1% lower for the same period, with a deep 12.5% cut in central government spending and a small 1% increase in local government spending.
No. 33
China’s Common Prosperity Drive
Bert HOFMAN, 3 September 2021
Earlier this year, China celebrated the eradication of extreme poverty. Since the start of reforms hundreds of million people managed to escape poverty on the back of reforms that generated high growth, employment and income opportunities. In the past decade, this was further enhanced by a massive government programme to target all the then-remaining 90 million poor. By any standards, this was a remarkable achievement and of global significance as China’s poverty reduction was a big part of meeting the Millennial Development Goals of the UN.
No. 32
China’s Carbon Emission Market: A Step towards Carbon Neutrality
LI Yao and Sarah Y TONG, 2 September 2021
AN UP AND RUNNING CARBON TRADING MARKET
On 16 July 2021, China launched its National Carbon Emission Trading System (NCETS) on the Shanghai Environment and Energy Exchange, an important milestone in its efforts to combat climate change and accelerate China’s development of green finance.
To achieve carbon neutrality by 2060, a goal set by China’s President Xi Jinping, China must implement large-scale decarbonisation by cutting carbon-intensive economic activities and expanding low-carbon sectors in the coming decades. According to estimations by Boston Consulting Group, China’s carbon neutral efforts could cost a total of RMB90 trillion to RMB100 trillion (or about $13.5 trillion to $15 trillion), which present both challenges and opportunities for the financial sector.
No. 31
The Chinese Communist Party at 100: What’s next?
Bert HOFMAN and Frank PIEKE, 24 June 2021
As the Chinese Communist Party (CCP) prepares for its 100th anniversary of its founding, it has much to celebrate. The Party has come very far since its humble beginnings in Shanghai. When it convened there for its first party congress in July 1921, aided by Dutch COMINTERN delegate Henk Sneevliet, it had only 57 members. Today, the CCP has more than 92 million members and is the second largest political party in the world after India’s Bharatiya Janata Party. In between, it formed not one, but two alliances, one with the Guomindang and fought a civil war with it, founded the People’s Republic, and another with the Soviet Union, and survived a revolution that Mao Zedong unleashed on the party.
No. 30
China, EU And The United States Find Common Ground On Climate Actions
Erik BAARK and CHEN Gang, 21 May 2021
US President Joe Biden invited 40 world leaders to the Leaders’ Summit on Climate he hosted from 22 to 23 April 2021. As China, the EU and the United States are responsible for about half of global CO2 emissions, whether Beijing, Brussels and Washington can forge joint emission cutting actions will have significant implications for the world’s climate change mitigation. Both President of European Commission Ursula von der Leyen and Chinese President Xi Jinping addressed the virtual Earth Day climate change summit, demonstrating that the three superpowers have found common ground and reached consensus on climate change commitments despite their divergences or even confrontations in other areas.
No. 29
China’s Population Census
Bert HOFMAN, 14 May 2021
China’s population is still growing, but at a slower pace; the country is rapidly ageing and urbanising and is increasingly concentrated in coastal provinces. Families are getting smaller and the sex ratio is improving.
CHINA’S POPULATION WILL DECLINE, BUT NOT QUITE YET
Data from China’s new population census, a once-a-decade event, was released on 11 May 2021, one month later than expected. The delay had fed speculations that this was caused by the findings of the first decline in China’s population since the early 1960s. A decline would have been unexpected in light of the data the NBS (National Bureau of Statistics) releases every year based on a sample survey, and it turned out not to be the case. China’s population growth slowed to 0.53% a year over the past decade, slightly lower than the growth rate in the decade before, but still higher than some 70 plus countries in the world. In some, such as Japan, Italy and Russia, population is already declining. In the European Union, population growth is barely positive at 0.17% and projected to decline in the coming years. The United States has currently about the same population growth as China, but in contrast to China, population growth in the United States is set to stay positive for the coming decades.
No. 28
China’s 14th Five-Year Plan: Regional Development
Sarah Y TONG, 29 March 2021
Regional development stands out as one major component of China’s recently released 14th Five-Year Plan (FYP) titled, “Outline of the Fourteen Five-Year Programme for the National Economic and Social Development and the Long-term Goals for 2035 of the People’s Republic of China” (hereafter the Outline). Indeed, policies concerning regional development form an integral part of China’s overall development agenda. They are important instruments in the government’s efforts to shift strategies and redirect priorities as the economy expands and modernises. In the latest Outline, the strong emphasis on and reorientation in the development of the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) and the Yangtze River Delta (YRD) region highlight a strategy centred on advances in scientific and technology and innovation for China’s long-term sustainable development.
No. 27
China’s Post-COVID Goldilocks Budget – How Big Should It Be?
Christine WONG, 18 March 2021
China was the only major economy to grow in 2020. After a steep drop in GDP (gross domestic product) during the first quarter when the country went into a strict lockdown, the economy bounced back in the second quarter, and posted growth rates of 3.2%, 4.9% and 6.5% in the second, third and fourth quarters, respectively. By year-end, the economy appeared to be back on its pre-COVID growth trend.
No. 26
China’s 14th Five-Year Plan: First Impressions
Bert HOFMAN, 11 March 2021
The “Two Sessions” are the highlights of China’s politics. Postponed last year to May due to the coronavirus epidemic, this year it took place as usual in early March. There are not one but two congress meetings in the Great Hall of the People on Tiananmen Square in Beijing, namely, the Chinese People’s Political Consultative Conference and the National People’s Congress (NPC). The highlight was Premier Li Keqiang’s Government Work Report, followed by The Planning Report and Budget Report delivered to the NPC.
No. 25
The Biden Administration and Taiwan’s Economic Prospects
CHIANG Min-Hua, 19 February 2021
With three per cent gross domestic product (GDP) growth in 2020, Taiwan’s economy had outperformed that of most countries in the world. The moderate economic expansion was attributed to a surge in external demand for information and communications technology (ICT) goods and a return of investments from abroad. Domestic consumption remained resilient thanks to domestic tourism and the government’s economic stimulus measures. A huge part of Taiwan’s economic success could be attributed to its efficient handling of the COVID-19 and to the economic circumstances that the ongoing global pandemic crisis has generated.
No. 24
China’s New National Security Screening Rules on Foreign Investment
KONG Tuan Yuen and LI Yao, 4 February 2021
China surpassed the United States as the world’s largest recipient of foreign direct investment (FDI) in 2020 amid the COVID-19 pandemic. A huge contributor to this development is China’s success in slowing down the spread of the virus and making a quick economic turnaround. Apart from the speedy economic recovery is China’s strong foreign investment regime. China had been active in promulgating investment-inducing policies, such as the Foreign Investment Law promulgated in January 2020 and a shorten negative list of investment in July, to attract foreign investment in 2020.
No. 23
Regional Comprehensive Economic Partnership and its Implications for the Regional Supply Chain Network
CHIANG Min-Hua and KONG Tuan Yuen, 9 December 2020
After eight years of negotiation, 15 countries across the Asia-Pacific region signed the regional comprehensive economic partnership (RCEP) on 15 November 2020. This is the largest free trade agreement (FTA) in the world, accounting for one-third of global gross domestic product (GDP) and population. The implementation of this mega regional trade deal is expected to smooth the development of existing regional supply chain via its extra trade and investment facilitation measures. However, RCEP fails to engage the participation of India, an important market for consumption goods manufactured in RCEP countries.
No. 22
Ant Group Will Be Back, but Not the Same as Before
QIAN Jiwei, 13 November 2020
China’s Ant Group is in a strange fix. The financial technology (fintech) firm went within days from being on the cusp of the world’s largest initial public offering (IPO) to those thwarted through new regulations by its own government. This sudden development has not only disappointed investors, but also raised the question of whether Ant’s listing will return with the same fervour and magnitude.
No. 21
Automation, Rise of the Digital Economy and Implications for China’s Labour Market
QIAN Jiwei and Erik BAARK, 9 November 2020
In October 2020, the Fifth Plenum of the 19th Communist Party Congress discussed China’s 14th Five-Year Plan at a time the COVID-19 pandemic is still impacting workplaces in China and overseas. In the 13th Five-Year Plan released in 2015, the Chinese government set a policy target (anticipatory) of creating 50 million new employment opportunities between 2016 and 2020. The policy target has been well achieved as over 60 million new employment opportunities have been generated between 2016 and 2020. The plan has listed a host of active labour policies including implementing labour training programmes, promoting employment for university graduates and migrant workers, as well as supporting public employment services.
No. 20
China Has a Plan for That
Bert HOFMAN, 20 October 2020
While in the United States the ruling Republican Party decided not to bother with writing a party platform for the coming four years, China’s communist party (CCP) is gearing up to discuss the 14th Five-Year Plan (FYP). The “Outline” of the plan will be discussed from 26 to 29 October at the fifth plenum of the 19th Central Committee of the CCP that gathers in Beijing. Technically, it is the government that prepares the plan for approval by the National People’s Congress (NPC) next March, but party guidance is rarely ignored. China has had a longstanding tradition of planning going back to the 1950s—the first plan was issued in 1953, but was quickly overtaken by Mao’s “Great Leap Forward”. The nature of the plan has radically changed since those days of central planning.
No. 19
Who Is Yoshihide Suga? An ‘Unlikely’ Leader, ‘Uncle Reiwa’ and the ‘Self-Made Man’ Resonating with the Person on the Street
LIM Tai Wei, 15 October 2020
Yoshihide Suga is Japan’s new prime minister. Unlike many of his colleagues who are potential prime ministerial candidates and scions of former cabinet ministers, prime ministers and parliamentarians, the 71-year-old son of a strawberry farmer is branded as an “unlikely leader” by the international media.
No. 18
China’s New Data Security Initiative
Bert HOFMAN, 16 September 2020
Data security and trade in data have become a major bone of contention between the United States and China in a conflict that started as a trade tussle but is rapidly sliding towards a new cold war.
Concerns over access to data by the Chinese government has led the United States to impose measures on companies that supply US technologies to Huawei, a leading Chinese telecoms company. It has also lobbied countries around the world to exclude Huawei from their 5G network for reasons of data security risks.
No. 17
The Silver Lining in China’s Worst Flood in Decades
LI Yao and Sarah Y TONG, 18 August 2020
Few would have contested the statement that 2020 is a year of anomalies for China. In much of the first six months, the country was fighting a tough battle against a pandemic which brought huge losses in human lives and devastating economic outcome worldwide. Hardly has the Chinese leadership heaved a sigh of relief with the tapering of coronavirus cases in the Mainland that much of China’s Yangtze River Basin, a major centre for Chinas’ economic activities including agricultural production, has since June 2020 been hit with the deadliest of floods in decades. The months of torrential downpour had brought cumulative rainfall to a level that has far surpassed those recorded in the 1998 floods, making this year’s flood China’s worse deluge in the past 50 years. The concern is whether the disastrous floods would considerably hinder China’s road to post-COVID economic recovery.
No. 16
Uncovering China’s Fiscal Stimulus Policies in the Budget Report
Christine WONG, 6 July 2020
As COVID-19 swept across the globe wreaking economic devastation, many governments have responded quickly with stimulus programmes to prop up demand and buffer the catastrophic effects of job losses and shuttered businesses. Given the severity of the pandemic and the grim prognosis for its lasting economic damage, the prevailing sentiment in many countries – many still scarred from the Global Financial Crisis – is to do ‘whatever it takes’. Several have rolled out programmes that cost upwards of 20% of gross domestic product (GDP), including France, Germany, Italy and Japan. The IMF (International Monetary Fund) reports that, as of June, fiscal measures deployed by governments around the world added up to some $11 trillion and central banks had injected over $6 trillion in liquidity to counter the economic devastation. Against this backdrop, China’s fiscal stimulus package – often said to be around 4% of GDP – has been seen as modest and disappointing, dashing hopes that it would once again be massive enough to provide a boost to the world economy.
No. 15
Social Resilience and the Pandemic
ZHAO Litao and KONG Tuan Yuen, 7 April 2020
The novel coronavirus known as COVID-19 has become a global pandemic. The first wave of outbreak—with Chinese city Wuhan as the epicentre—was largely over by the end of March 2020. Now the second wave has shifted its epicentre to Europe and the United States. The second wave is likely to be followed by a third one, particularly in densely populated regions/countries with a much less well developed public health system.
No. 14
The COVID-19 Pandemic
Bert HOFMAN, 1 April 2020
In his March 2015 Ted Talk on a future global flu epidemic, Bill Gates, the philanthropist, probably wanted to mention a really big number for the costs that such a pandemic could impose onto the world. So he quoted an astronomical US$3 trillion. The extraordinary G-20 leaders meeting on the COVID-19 virus pledged US$5 trillion in policy measures to fight the virus and the economic impact of the measures to control it (see the concluding statement). Even this may not be enough.
No. 13
Mitigating the Impact of COVID-19 on the Agriculture Sector in China
Vincent MARTIN, 25 March 2020
In late December 2019, a novel coronavirus (COVID-19) was identified as the cause of a significant number of human cases of a respiratory disease in China. The outbreak of COVID-19 was first detected in Wuhan city in Hubei province, a major domestic and international economic and transport hub in China. From the epicentre, the virus rapidly spread throughout the province which accounted for 83.5% of the cumulative confirmed cases of COVID-19 and 96.1% of deaths due to COVID-19 in China as of 1 March 2020. Massive quarantine and other preventive measures mounted by the authorities in the wake of the outbreak have confined the virus within Hubei province, mostly sparing other provinces of the worst of the epidemic. As of 1 March 2020, 98.5% of 579 new cases were located in Hubei, while 29 out of China’s 34 provinces, regions and cities recorded zero new cases as the situation continues to improve and the number of new confirmed cases keeps falling.
No. 12
Implications of the COVID-19 Outbreak for China’s Economy
Bert HOFMAN, Sarah Y TONG and LI Yao, 28 February 2020
The COVID-19 outbreak has spread widely and rapidly across the country as well as abroad. Apart from causing a public health crisis and a humanitarian tragedy, the epidemic and the actions to contain it brought normal economic activity to a halt. At the time of writing the economy is only gradually restarting, supported by a relaxation of the containment measures in a growing number of provinces and government measures to reduce the impact of the containment measures. While most expect a sharp rebound in the economy later in the year, the impact on the economy in the first quarter is still unclear. Our scenarios, based on working days lost, suggest a more negative outcome for economic growth than most projections.
No. 11
Wuhan’s Combat Against Coronavirus: Making Mobilisation Work
ZHAO Litao, 27 February 2020
Right before the recent outbreak of the coronavirus, Wuhan, the capital city of Hubei province in central China, had been held up as a model of good governance for other Chinese cities to emulate. On 3 December 2019, it was the only provincial capital city to present at the national conference on urban social governance innovation.
No. 10
Macau Celebrates the 20th Anniversary of its Return to China: A Shining Star under the “One Country, Two Systems” Model?
YU Hong, 26 February 2020
In December 2019, Chinese President Xi Jinping was in Macau to celebrate the 20th anniversary of its return to China. President Xi lauded the former Portuguese colony’s achievements and progress, declaring that the island’s transformation since its return to the motherland highlighted the “viability and strength” of the “One Country, Two Systems” model.
No. 9
Under-coverage of Social Insurance in China’s Informal Economy
QIAN Jiwei, 3 February 2020
According to a 2018 report by the International Labour Organisation, about 54% of China’s urban workforce in 2013 participated in the informal sector, ranging from freelancers and private contractors to migrants working without formal employment contracts and proprietors of small-scale private enterprises.
No. 8
The Fallout of Phase One: What the Trade Agreement between the United States and China means
Bert HOFMAN, 31 January 2020
“America is winning like never before”, US President Donald J Trump said in Davos at the 2020 Annual Meeting of the World Economic Forum and as exhibit one he offered the trade agreement with China. If one counts the commitments made from both sides, he was right to claim that the United States has clearly won this round.
No. 7
Wuhan Virus: Facts, Government Reaction and Outlook
CHEN Gang and QIAN Jiwei, 31 January 2020
Two months after the Chinese Communist Party (CCP) convened its Fourth Plenum that emphasised modernisation of China’s governance capacity, a novel coronavirus (2019-nCoV) in the likes of SARS (Severe Acute Respiratory Syndrome) broke out in the central Chinese city of Wuhan in December 2019, which quickly spread to other provinces and overseas in the beginning of 2020, causing deaths and panic across the country and the world. On 30 January 2020, the World Health Organisation (WHO) declared the coronavirus a global health emergency, a declaration for extremely dangerous pandemics such as Ebola and Swine flu (H1N1 virus).
No. 6
Hong Kong Protests: A Rising China Clashes with a Frustrated Hong Kong
QI Dongtao, 9 December 2019
A deeper look at the District Council elections results, and responses from Hong Kongers and mainland Chinese suggest differences run deeper than the five demands.
No. 5
The People’s Republic of China at 70: Reforms, Achievements and Challenges
Bert HOFMAN, 30 September 2019
On 1 October this year, China celebrates the 70th anniversary of the founding of the People’s Republic of China. A central part of this celebration focuses on the country’s success in economic development and poverty reduction. Indeed, by next year, China hopes to eliminate absolute poverty.
No. 4
Hong Kong Protests in 2019: Digital Natives’ Offline Games?
QI Dongtao, 19 August 2019
Observers of recent Hong Kong protests, including some local social activists, have been greatly impressed by the young protesters. There is reportedly no strong leadership or organisational support behind the protests, but since early June 2019 the young protesters have successfully mobilised numerous participants and coordinated various street activities during the protests.
No. 3
Innovation and China’s Global Emergence
Bert HOFMAN, QIAN Jiwei and Erik BAARK, 14 August 2019
The East Asian Institute organised a conference on “Innovation and China’s Global Emergence” from 25 to 26 July 2019. The conference topic was rather timely, the papers highly informative and substantive, and the discussion rigorous and focused on some of the key policy issues currently being debated in trade disputes involving China. This is a summary of what was presented and discussed.
No. 2
Trade, Technology and Trust
Bert HOFMAN, 15 July 2019
The Osaka meeting between US President Donald Trump and Chinese President Xi Jinping was seen by many as one of the last opportunities to prevent the trade war from escalating to possibly a new cold war. The good news is that the two parties are talking again; the 25% tariffs on an additional US$300 billion are on hold for now and Huawei is still allowed to buy technology from the United States. President Trump even went so far as to declare China a potential strategic partner, which contrasts with the designation of a “strategic competitor” by US National Security Review and US National Defence Strategy, or the more aggressive power that Vice President Pence had called China in his speech at the Hudson Institute last October. A few days after Osaka, China’s National Development and Commission announced a further shortening of the “Negative List” of sectors reserved for Chinese enterprises (from 48 to 40) and Premier Li Keqiang pledged a faster timetable for the opening of the financial sector for majority foreign ownership at the Summer Davos in Dalian …
No. 1
Hong Kong’s Extradition Bill: Protests and Implications
ZHAO Litao, QI Dongtao and SHAN Wei, 27 June 2019
After a massive protest against the highly controversial extradition bill on 9 June 2019, Hong Kong’s Chief Executive Carrie Lam announced the indefinite suspension of the bill on 15 June. Nevertheless, a larger protest demanding the complete withdrawal of the bill and Carrie Lam’s resignation took place on 16 June. Although Lam did not accept the protesters’ demand for her resignation, she apologised to the public through a government statement amid the larger protest. The tension between the Hong Kong government and society will likely continue in the near future, probably in more moderate forms. This can have profound implications for Hong Kong, Taiwan, the “one country, two systems” principle and China’s relationship with some Western countries …
