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China Update 20/2017

METRIX

 

25 percent of all panda bears living in captivity are descendants of Pan Pan. The male bear, who died of cancer at the age of 31 last year, was not only the world’s oldest known panda but also the one with the most genetic contribution to the species’ captive population. According to the non-profit organization Panda International, Pan Pan fathered at least 130 of the 520 pandas currently living in the world’s zoos and research centers. 

TOPIC OF THE WEEK: EVICTIONS OF MIGRANT WORKERS IN BEIJING

Residents of Xinjian Village in Daxing District, Beijing. Source: ImagineChina

Public outrage as Beijing evicts thousands of migrant workers

The eviction of tens of thousands of migrant workers from their houses on the outskirts of Beijing has prompted rare public criticism by intellectuals and middle class citizens in the Chinese capital.

The real-estate tycoon Ren Zhiqiang, who is known for his outspoken views, compared China’s strict household registration system (hukou) to North Korea. Over 100 intellectuals signed an open letter to the municipal government criticizing the eviction campaign, calling for a suspension, and demanding temporary shelter for the affected migrant workers and their families.  

Social media commentators seized on the term “low-end population” (低端人口) for unskilled workers from China’s rural provinces. The derogatory term was used in an internal letter by one of Beijing’s districts. The term was later banned from social media platforms such as WeChat and Weibo.

The evictions and the destruction of low-quality dwellings on the outskirts of the city started at the end of November following a fire in the suburban district of Daxing that killed 19 people. Tens of thousands of migrant workers and their families had to leave their homes at short notice and were left to fend for themselves in sub-zero temperatures.

Whole neighborhoods were razed to the ground within days. The authorities say much of the housing in these areas was illegal and unsafe. But some reports say the plans to evict the migrant workers were drawn up well before the deadly fire in Daxing.

Despite the outcry over the evictions, the authorities continue with their “40-day plan”. Comments on social media criticizing the government were deleted by censors. However, the migrant workers were promised a little more time to leave their homes.

The angry reaction of middle class Beijingers indicates that many may have become aware of their own vulnerability in the absence of rule of law and an independent judiciary. Many people in Beijing also realized that the city depends on migrant workers. Many work on building sites, in restaurants, as domestic cleaners or for delivery services but lack any semblance of workers’ rights. Some experts are already trying to calculate the effect of the mass evictions on e-commerce when fewer delivery drivers might be available.

CHINA AND THE WORLD

Beijing steps up political exchanges with Myanmar amid Rohingya crisis

China continues to offer public support to Myanmar despite mounting international criticism of the country’s leader Aung San Suu Kyi. Chinese president Xi Jinping met Ms. Suu Kyi on December 1st in Beijing on the sidelines of a conference of international political parties. During the meeting he emphasized China’s friendly relations with Myanmar. Last month, Chinese foreign minister Wang Yi held talks in Myanmar’s capital Naypyidaw, and a high-ranking Myanmar military leader visited Beijing.

The meetings took place amid international criticism of Myanmar over its crackdown on the Rohingya. More than 600,000 Muslim Rohingya have fled to Bangladesh since August to escape the military’s security operation in Rakhine state.  

Beijing, however, has stood by Myanmar.  China is a major investor in the country and also sells weapons and military equipment to the Myanmar armed forces. Earlier in the year, China blocked a UN Security Council statement on Myanmar.

Yet China has also offered to mediate and presented a three-step plan to solve the Rohingya crisis. The plan, which is short on detail, includes talks on the return of the refugees and aid for economic development to tackle what Beijing calls “the root causes” of the problems. Analysts say Beijing is stepping up its engagement in Myanmar because it considers the region key to the Belt and Road Initiative. 

Xi: "China can bring benefits to every country in the world“

China used a gathering of international political parties in Beijing on December 1st to boost its international image. President Xi Jinping told the representatives from hundreds of political parties that “China will provide more opportunities for the world through our development.” According to Chinese state television, he added that China would not export its political system but could bring benefits to every country in the world.

Xi addressed the annual gathering in the Great Hall of the People for the first time. The official Chinese news agency Xinhua said, representatives of 300 political parties from 120 countries attended the forum though no full list was provided.

A document released at the end of the conference praised Xi’s contribution to world peace.

Among the participants was Myanmar's leader Aung San Suu Kyi, Cambodian Prime Minister Hun Sen and Tony Parker, treasurer of the US Republican National Committee. Jo Leinen, a German Social Democrat member of the European Parliament, and Frank Engel from the conservative EVP also took part. Under Xi, China has expanded the reach of its foreign policy and tries to bolster its international image. 

EU and US fire warning shots at China in anti-dumping disputes

The EU and the US have stepped up their anti-dumping measures against China. The European Council approved new rules on December 4 aimed at protecting the EU against unfair trade practices. The new legal framework removes the former distinction between market and non-market economies for calculating dumping. The new rules, which were approved by the EU member countries back in May, will come into force before the end of December. Last year, China filed a complaint at the WTO against the EU anti-dumping calculations.

Meanwhile, the US has supported the EU’s approach in a letter sent to the WTO in late November. Also last month, the US commerce department launched an anti-dumping investigation into aluminum imports from China. 

It was the first time in 25 years that such a probe was initiated by the government and not by industry. The investigation could lead to steep tariffs on Chinese aluminum imports if the commerce department finds evidence of price dumping and state subsidies. A final decision is expected by August 2018.

China is likely to protest against any punitive tariffs at the WTO. Beijing could also press on with ongoing disputes. But so far China has refrained from announcing any counter measures such as Chinese tariffs on imports from the US.

News in brief

POLITICS, SOCIETY AND MEDIA

World Internet Conference: Wang Huning defends censorship and online controls

China defended its vision of “internet sovereignty” at the annual World Internet Conference in the eastern city of Wuzhen. “China stands ready to develop new rules and systems of internet governance to serve all parties and counteract current imbalances,” Wang Huning, a new member of China’s top decision-making body, the Politburo Standing Committee, told the conference. It was Wang’s first major speech since he joined the PBSC at the 19th Communist Party Congress in October. Wang is an influential party theorist and one of its chief ideologues.

Under president Xi Jinping, China has developed the concept of “internet sovereignty”, the idea that each country should be able to govern its own internet space like a physical territory. 

The concept is also used to justify censorship and strict online controls. The Chinese approach is attractive to many authoritarian governments, but runs counter to the Silicon Valley concept of the internet as an open forum.

In the past, the Wuzhen conference was a showcase event mainly for Chinese tech firms. This year, however, Apple-CEO Tim Cook and Google-chief Sunar Pichai attended for the first time. Cook, who has repeatedly come under criticism for giving in to Chinese censorship demands, gave a keynote speech.

Jail sentence for Taiwanese democracy activist sparks debate

The five-year prison sentence for Taiwanese democracy activist Lee Ming-che in mainland China was met with criticism by legal scholars and social media commentators and has further strained relations with Taiwan. The Yueyang City Intermediate People’s Court in Hunan province convicted Lee on November 28 on charges of subverting state power. Mainland activist Peng Yuhua was tried alongside Lee and sentenced to seven years in jail. The court used comments and information the defendants shared on social media as evidence against them.

42-year old Lee is the first Taiwanese to be charged and sentenced for subversion in mainland China. He was detained in March while traveling in the mainland. 

In a statement, the office of Taiwan's president Tsai Ing-wen called the sentence unacceptable and reiterated her call for Lee’s release. “Spreading pro-democracy ideas is not a crime,” the statement said.

Thousands of Chinese internet users left comments on the court’s website. Some questioned the vagueness of the term “subversion” and the lack of transparency of the judicial process. Others called Lee and Peng “separatists” and said their sentences were too light. 

News in brief

ECONOMY, FINANCE AND TECHNOLOGY

China cleans up online microloans

Strict new measures for online micro-lending are expected to prompt thousands of unlicensed lending platforms to suspend operations. The new measures were introduced by China’s financial regulators on December 1st and are part of wider attempts to improve oversight of the financial system.

Online microlending usually involves small, unsecured cash loans. The lending platforms usually require no collateral but charge high interest rates. They target people with limited access to credit services such as rural migrants or students and have come under criticism for exaggerated advertising and aggressive debt collection.

Estimates about the number of cash loan internet platforms vary widely. Some reports suggest there may be up to 5000 such platforms operating in China with only several dozen holding proper licenses. The total amount of loans offered by these platforms is thought to be over one trillion yuan (USD 151 billion).

Under the new rules, the issuance of licenses for new microloan companies will be suspended; unlicensed operators will be banned. Existing licensed players must comply with a number of new rules. Interest rates must be within the legally allowed limits, and terms and conditions of loans must be clearly communicated to borrowers.  

New “action plan” gives boost to Made in China 2025

Following Xi Jinping’s announcement at the 19th Party Congress of a “new era” for China, the government has released a three-year action plan to upgrade several industries, including robots, new materials, high speed trains and new energy vehicles. The idea is to enable Chinese industries to catch up with rivals in other parts of the world.

The new plan was released by the National Development and Reform Commission (NDRC) in late November and gives a boost to Made in China 2025, a comprehensive plan to upgrade industrial production, improve innovation and turn China into a leading high-tech country by 2049.

The NDRC plan is aimed at facilitating development in key areas such as AI and big data. While many of the announcements lack in detail, the plan includes several specific targets such as the development of new energy vehicles, a new generation maglev train and the integration of civil and defense applications.

Also in late November, the State Council, China’s cabinet, announced plans to establish special demonstration zones across the country to develop industries connected to Made in China 2025. The notice by the State Council said cities with leading industries and innovative businesses could apply to establish these zones.

The approach by the NDRC and the State Council underlines the top-down approach to Made in China 2025. Local governments are expected to implement the plans to meet the central government’s targets.  

THE EUROPEAN VIEW

Premier Li pledges massive investments in central and eastern Europe

Chinas will provide funding worth over USD 3 billion for development and investment projects in central and eastern Europe. Chinese premier Li Keqiang made the pledge during the 16+1 summit in Budapest on November 27. The meeting, which brought together China and the leaders of 16 central and eastern European states, was dominated by discussions about Beijing’s Belt and Road Initiative (BRI).

Li said China would initially provide USD 2 billion through its China Development Bank and the newly established China-CEEC interbank association. Another one billion would be made available at a later stage.

During the Budapest meeting China signed memorandums of understanding with Estonia, Lithuania and Slovenia to promote BRI. They were the last CEEC countries to align with the Chinese initiative.

As the 17 countries met, Hungary launched a procurement tender for its section of a modernized railway link between Budapest and the Serbian capital Belgrade. China is most likely to win the bid. The deadline is in January and it’s unlikely that other countries will manage to put together an offer within just a few weeks.

China, Hungary and Serbia agreed to build the 350-kilometer high speed rail link between Budapest and Belgrade in 2013. The new line will cut travel time from eight hours to just under three. Yet construction was delayed after the European Commission launched a probe into whether Hungary, an EU member state, had followed EU rules. EU procurement rules stipulate that public tenders must be offered for large infrastructure projects. Construction of the Serbian section of the rail link started in late November.

MERICS analysis: China’s “16+1” Equals Much Ado About Nothing?, Jan Gaspers, Reconnecting Asia, December 5, 2017.

MAD MERIX

How not to make the daily commute a little faster

A man in eastern China was so fed up with traffic jams during his daily commute that he decided to take matters into his own hands. He was convinced that a special lane to turn left at a junction in Lianyungang city (Jiangsu province) slowed traffic down, so he repainted the road markings on that lane to allow vehicles to carry on straight ahead

 

 

But then he got really stuck. Not only was he caught on surveillance camera with a can of white paint and a brush changing arrows in the lane, he was also picked up by traffic police. He was fined CNY 1000 and will have to be a little more patient during his commute once again.

The  Mercator Institute for China Studies (MERICS)is a Stiftung Mercatorinitiative. Established in 2013, MERICS is a Berlin-based institute for contemporary and practical research into China.

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