Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – February 7, 2022

China’s Slowdown to Limit Global Growth but Not Undermine World Economy
A prolonged slowdown in China’s economic growth could hurt some multinational companies and commodity producers for years to come, casting a shadow over the global recovery from the pandemic—but likely not derailing it entirely.  Sputtering momentum in China’s economy—which accounts for about 15% of global trade and a quarter of projected global economic growth in the five years through 2026—is already weighing on prices for commodities like iron ore, and making it harder for some companies to grow their businesses there

What will be in Asia’s news headlines in 2022?
What will lead the headlines in the year ahead? To find out, we asked some of Asia’s most influential journalists for their views on the stories that will shape our region. From COVID-19 to cryptocurrency and from climate risk to China’s economy, their perspectives shed light on the themes we will be seeing in the news. The perspectives expressed are the individuals’ own and do not necessarily reflect the view of the organizations they represent.

China’s 2021 GDP Performance: A Look at Major Provinces and Cities
China’s GDP in 2021 reached RMB 114.4 trillion (US$17.7 trillion), showing an increase of about RMB 13 trillion (US$3 trillion) compared to 2020, or 8.1 percent growth year-on-year, according to the National Bureau of Statistics (NBS).  Authorities have also unveiled data tracking the economic performance of 31 provinces, autonomous regions, and municipalities directly under the Central Government for 2021.  With global headwinds and COVID-linked uncertainties dampening China’s economic growth outlook in 2022, it is easy to feel pessimistic. That’s why we take a closer look at the growth rates of prominent provinces and major cities in China in this article – to gain sense of what is happening on the ground and whether the country continues to be a favored investment destination.

Zero COVID and Manufacturing in China
The increasing costs of China’s containment measures are raising concerns about the sustainability of Beijing’s approach.  It was in China, specifically the city of Wuhan, where the first cases of COVID-19 were detected in early 2020 before quickly spreading worldwide. China is now pushing a zero COVID policy using contact tracing, mass testing, a special app and lockdowns to try to eliminate the virus completely. Similar strategies have been adopted in other countries but were eventually abandoned in the recognition that COVID-19 is here to stay. But China is holding firm, imposing regulations very similar to the ones adopted at the beginning of the outbreak. In the first year or so of these measures, they seemed to be a reasonable approach and helped Beijing successfully and rapidly contain the virus with fewer deaths than most Western countries. Two years later, however, things don’t look nearly as bright for China. The Delta variant proved extremely hard to control, and the containment measures are having ripple effects. In Xian, which saw the biggest lockdown outside of Wuhan, food shortages and deficiencies in medical treatment are growing.  Now, the rapid spread of the Omicron variant, which reportedly first emerged in Tianjin in December, and the increasing costs of keeping it under control are raising concerns about the sustainability of China’s approach. The economic impact is becoming more apparent, especially in the manufacturing sector in terms of both supply and demand. In January, output slowed to its lowest level in two years, mostly due to factories being forced to temporarily shut down. It’s unlikely that China will ease the measures before the pivotal Party Congress, where President Xi Jinping is expected to secure his third term, set for the second half of 2022.

Covid-19 lockdowns ‘ill-founded’, had little effect on cutting death rates, Johns Hopkins study finds
Reject lockdowns as a ‘pandemic policy instrument’, urges review of worldwide impact led by Johns Hopkins economist Steve Hanke    Describing benefits to society as ‘marginal at best’, paper calls on policymakers to weigh them against costs such as business losses and social unrest

China’s services sector activity growth expands at slowest rate in 5 months due to coronavirus outbreaks
Caixin/Markit services purchasing managers’ index (PMI) fell to 51.4 in January from 53.1 in December    China’s official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, earlier fell to 51.1 from 52.7 in December

Forget Big Tech: China’s new motto for ‘little giants’ is stay small and don’t stray
By shunning the traditional business motto ‘become big and strong’, China’s ‘little giants’ plan aims to reshape its economy around small, niche firms     Like other industrial policies, risks remain that some firms vying for a position in the new scheme will suck up resources with little to show for it   China aims to have 10,000 of these little giants by 2025, according to the plan. In 2022 alone, China will work to spot about 3,000 such companies. In addition to “state-level” little giants, Chinese provincial and municipal authorities are expected to find their own little giants to shower them with subsidies and grants.  In an ideal scenario, successful execution of the plan will reshape China’s economic landscape – a vast number of technologically powerful players will dominate many niche products and solutions. Together, these firms would make China a big and strong economy instead of just a big one.   Early on, there will be many Chinese enterprises seeking state recognition as a little giant because the label will confer various benefits such as direct fiscal subsidies and tax cuts. A particular set of little giants are expected to eventually emerge as the true winners in the marketplace with the state’s help.  Still, risks remain that other firms vying to become little giants fail to take off, and instead become vessels sucking up resources that could have been better used elsewhere.

How China’s Communist Officials Became Venture Capitalists
Profitable investments in technology firms have made Hefei a model for provincial governments.   China’s local governments control land sales, receive profits from state-owned companies, and have close ties with state-owned banks. For decades they have supported private companies by offering them cheap land and other subsidies, tax breaks, and loans to encourage investment. That’s helped local officials, largely judged on the basis of economic performance, to win promotion from the ruling Communist Party.  City-financed investment funds are buying foreign companies, too. In 2016, Beijing Jianguang Asset Management Co., known as JAC Capital, paid $2.75 billion for Dutch chipmaker Nexperia, which produced semiconductors used in mobile phones. Two years later, the fund, which includes Hefei among its investors, sold its stake to Chinese chipmaker Wingtech for $3.6 billion. Hefei has a 4% stake in Wingtech. Wingtech made headlines in the U.K. last year, when one of its subsidiaries bought the troubled Welsh semiconductor manufacturer Newport Wafer Fab for $87 million. Meanwhile, even after Hefei sold most of its Nio stake, the city’s investment in EV technology continues to pay off. Germany’s Volkswagen AG has acquired 50% of JAC Motors and a 26% stake in battery maker Gotion High-tech Co., as it turns Hefei into one of its main production bases. Erwin Gabardi, chief executive officer of Volkswagen Anhui, praised the region’s “entrepreneurial spirit” and policy support. “This is why Volkswagen chose Hefei,” he says.

Xi Jinping has high hopes for Poland. Could it be a ‘gateway to Europe’?
Chinese president offers to ‘support Poland’s effort to become a key point in China-EU industrial and supply chains’ after meeting counterpart Andrzej Duda   But there has been scepticism in Central and Eastern Europe about partnering with China, and Poland has concerns about the Ukraine crisis

How China plans to lead the world in sustainable food with latest five-year agricultural development plan
Lab-grown meat and plant-based eggs among food production technologies that will be supported to cut reliance on overseas know-how    Inclusion of cultivated meat in the five-year plan will drive more research funding and investment in the nascent industry, says Ziliang Yang of start-up CellX

China signs up for treaty to protect industrial design IP
UN agency chief says designers will be able to safeguard their work inside and outside the country    Agreement will come into force in May and streamline registration of intellectual property

US House passes the China-focused America Competes Act
The final scope of the bill is unknown as it still must be reconciled with similar Senate legislation that was approved last year   ‘This is a competition issue, making our workers and our country compete with slave labour in China,’ says House Speaker Nancy Pelosi

Biden extends Trump-era solar tariffs on China, but loosens some in nod to clean energy efforts
The US president also doubled an import quota on solar cells to 5 gigawatts, allowing a greater number of imported cells used by domestic manufacturers    Labour unions support import restrictions to protect domestic jobs, while the solar industry relies in large part on cheap panels imported from China and other countries

US hurting itself by extending tariffs on solar products, says ministry
The recent extension of tariffs on imported solar products by the United States is unhelpful for the development of the US domestic photovoltaic industry and will cause distortion to normal global trade order of the new energy products, according to an official of the Ministry of Commerce.

Year of the Tiger: Tesla’s lead in China’s EV market is whittled away by NIO, Xpeng, Li Auto and other home-grown brands
The three most aggressive Chinese EV start-ups have a lot of catching up to do against Tesla    Their combined 2021 sales of 280,075 unite left China’s top three EV start-ups with a 13 per cent gap with Tesla

China’s digital yuan shows why we still need cryptocurrencies like bitcoin
China’s digital yuan is poised to make its debut on the global stage this week, with foreign athletes and others at the Beijing Olympics able to use it for the first time. People can access digital yuan via an app on their smartphone, for example, but it’s different from other payment apps in that it is a digital version of the renminbi, issued by the People’s Bank of China. The digital yuan has already been piloted in various Chinese cities and was used in more than $8 billion worth of transactions in the second half of 2021. China’s efforts have also spurred other countries to ponder digital currencies of their own. Nearly 90 countries, accounting for more than 90% of global GDP, are actively exploring a central bank digital currency (CBDC), according to the Atlantic Council.

Hong Kong sets stage for e-CNY use, to launch pilot ‘soon after Spring Festival’
The pilot will strengthen Hong Kong’s role as an international offshore yuan trading centre, HKMA’s Eddie Yue says    ‘Restaurants and other shops in Lan Kwai Fong will like to join the test, because the e-CNY is the future of payments’: Allan Zeman

‘No money, no new year’: Chinese developers remain mired in debt even after financial lifeline
More rate cuts expected as Beijing tries to jump-start Chinese economy    Property sector could feel additional pain as buyer sentiment remains challenged

China companies try to list in US in test for regulators after clampdown
A handful of companies are seeking to become the first China-headquartered businesses to go public in the US since July, in a test of regulators’ willingness to accept new listings after clampdowns on both sides of the Pacific.   Six China and Hong Kong-based groups filed new or updated documents with the US Securities and Exchange Commission for an initial public offering on the Nasdaq exchange in January. They were followed last week by Meihua International Medical Technologies, a producer of disposable medical devices, which set a target offering price after submitting its initial filing almost six months ago.   Although each deal is expected to be small in size, lawyers, exchange officials and China experts will be watching them closely for signs that there is still a future for the once-thriving market for Chinese listings.

China becomes top importer of Japanese food for 1st time
Mainland China became the largest importer of Japanese food products for the first time last year, dethroning longtime leader Hong Kong. Exports of food, farm, forestry and marine products to mainland China surged 35.2% to 222.4 billion yen ($1.93 billion) in 2021, official data released Friday shows. Japanese sake, whisky and snack foods were among the most popular items. The increase helped Japan attain its long-sought goal of 1 trillion yen in food exports. The country’s food, agriculture, fishery and timber industries generated 1.23 trillion yen from exports, up 25.6% for the ninth straight annual increase. However, the trillion-yen milestone was reached two years after the original target date of 2019. The goal of attaining 5 trillion yen in food exports by the end of this decade remains a long way off. Hong Kong fell to second, despite its food-related imports climbing 6% to 219 billion yen. The U.S. took third at 168.3 billion yen, a 41.2% leap. Exports of Japanese scallops soared 104% to 63.9 billion yen, the highest-growth product in absolute figures. Japanese beef also jumped 85.9% to 53.6 billion yen.  Whisky advanced by 70.2% to 46.1 billion yen. The wider name recognition of Japanese brands lifted unit prices, especially for China. Demand expanded from Western markets as well.

China is absorbing Hong Kong economy, MAC says
‘MAINLANDIZATION’: Beijing’s ‘Greater Bay Area’ plan led to an outflow of foreign capital and an influx of Chinese funds, the council said in a report

China’s belt and road funding pivot pumps millions into public health: study
Little change to overall size of investments but hospitals and other infrastructure are now the focus for developing world projects    Analysis also shows no overseas coal plants were funded in 2021, in line with the country’s environmental commitments

Sri Lanka needs to save its economy from China’s debt-trap policy: Report
Amid the ongoing economic downturn in Sri Lanka, the Washington-based group Global Strat View said that the island nation has to rethink seriously to save its economy, which analysts say have fallen into China’s debt-trap policy.

Chinese miner MMG to halt production at Peru’s Las Bambas copper mine amid blockades, stand-off with villagers
Hong Kong-listed MMG says ‘production is expected to cease on around 20 February’ if the roadblock is not removed    MMG’s shares fell by as much as 4.6 per cent to HK$2.48 on the news

British regulator approves China-designed nuclear reactor
The first Chinese-designed atomic reactor has completed the near five-year progress to gain regulatory approval for use in Britain, Britain’s nuclear regulator said on Monday. China’s China General Nuclear Group (CGN) and French utility EDF, had planned to use the reactor design at a plant to be built in Essex, eastern England which could generate enough electricity to power around four million homes. However, since the regulatory process was started in 2017 relations between China and Britain have soured and some politicians have expressed concerns about China’s involvement in Britain’s nuclear industry.  Britain’s government also last year launched a funding model for new nuclear plants which it hopes will attract British funds and other private investors to new nuclear projects in the country.–2w67gqjw6g288tv.html

Do right by foreign workers to preserve Hong Kong’s competitive advantage
Foreign domestic workers are an often-overlooked part of Hong Kong’s success story, and they are struggling amid the city’s push for ‘zero Covid’    Flight bans, a shortage of quarantine hotels and other difficulties are hurting thousands of families in both Hong Kong and the Philippines

China’s weak consumption over Lunar New Year may signal ‘worsening economy’, analysts say
Deterred by the discouraging travel policies and sporadic outbreaks of the Omicron variant, more than 70 per cent of domestic tourists chose short-distance trips    A nearly 48 per cent increase in trips among migrant workers from January 17-31 did little to help boost box office receipts and tourism revenue, Nomura says

COVID, Olympic restrictions hit China’s Lunar New Year spending
Tourist receipts drop 3.9%, domestic trips fall 2% as people advised to stay put   Total tourist receipts for the seven-day holiday that began on Jan. 31 dropped 3.9% from last year to 289.2 billion yuan ($45.5 billion), while domestic trips fell 2% to 251 million, according to the Ministry of Culture and Tourism on Sunday.  The ministry data revealed that 2022’s tourist receipts and domestic trips were nowhere near levels seen over the same period in 2019 before the COVID pandemic, reaching just 56.3% and 73.9% of those totals, respectively.  Similar to last year’s festival, local governments urged migrant workers — estimated at over 500 million with many concentrated in major cities such as Beijing, Shanghai, Guangzhou and Shenzhen — to refrain from returning to their hometowns. “Our baseline forecast for the first quarter GDP growth at 3.8% [annually] had already factored in a relatively sluggish recovery of consumption, so we still see near-term growth risks largely balanced around it,” Citi Research economists Yu Xiangrong and Jin Xiaowen wrote in a note on Sunday.  “Looking further, we believe China will maintain its “dynamic zero-COVID” strategy at least until the 20th Party Congress in October or November, although fine-tuning in implementation is possible.”

Who Makes Foreign Policy in China?
There are at least 8 distinct forms of foreign policy in China. Approaching the 2022 leadership transition, it is important to understand the various institutions in play.   Ignoring the party institutions or the various near-abroad-, geoeconomics-, or strategic-focused foreign policy institutions is to give in to the political theater of the wolf warrior, and to be willingly fooled by China’s hierarchy of foreign policy prestige, which differs markedly from the hierarchy of actual power. The wolf warrior reality show in the Ministry of Foreign Affairs through the second Xi Jinping administration was a sideshow in China’s foreign policy formation. Similarly, looking now for the future replacements of Yang Jiechi and Wang Yi in China’s public-facing diplomacy roles does not yield the key to understanding the party, state, or strategic direction of China’s future foreign policies.  Observers of China’s foreign policy formation need a more acute understanding of which institutions make foreign policy in China, and the varying degrees to which policy formation and deployment can be politicized in both the current international environment as well as within any future attempt to establish a multipolar global order. The mechanisms and personnel of China’s internal foreign policy-making system, though, are already institutionally multipolar.

China’s tech decoupling with the US is trouble. It’s one of their ‘top 10 risks in 2022’
As the US-China tech war rages on, China is dealing with uncovering of its ‘centres for political thought’.

US-China trade war: American importers fret as progress stalls on lifting Trump-era tariffs
Some American companies that rely on China for manufacturing have given up hope of Trump-era tariffs being lifted this year      Trade talks between the world’s two biggest economies have stalled, despite the recent expiry of the phase-one deal signed in 2020

Senators debate Australia’s relationship with China
HOW Australia has handled its relationship with China and the collateral damage to trade that has ensued is again in the spotlight after the cancellation of a 10th Australian abattoir’s export license by Chinese authorities last week.  “Now, war is quite an emotive term, but in terms of it being an economic war, I stand by that,” he said.  “In terms of the fronts being opened up on the wine industry, the barley, the meat industry, the barley, well, what would you call it otherwise?   “They have hurt our primary producers and it is part of the punishment for perceived misgivings about us calling out that country in relation to what happened in the origins of Coronavirus, and that is part of us being a liberal democracy believing in freedom of speech, so I stand by it.”

Why China won’t put its economy on the line to rescue Putin
Russia has one obvious ally to turn to as geopolitical sparks fly with the West over Ukraine.
But don’t expect China to offer much more than supportive words to its northern neighbor should the United States and Europe follow through with threats to slam Russia’s economy if Moscow launches an invasion of Ukraine. Beijing’s diplomatic and military ties with Moscow may be strong, but its economic allegiances are a lot more complex.  Russian President Vladimir Putin met his Chinese counterpart Xi Jinping on Friday as the Beijing Winter Olympics kicked off. The Kremlin described the meeting as warm and constructive, and the leaders agreed to deepen their cooperation, according to an account published by Chinese state news agency Xinhua. Russian oil giant Rosneft said it had agreed to boost supplies to China over the next decade. “Working together, we can achieve stable economic growth … and stand together against today’s risks and challenges,” Putin wrote in an op-ed published Thursday by Xinhua. Those risks may be formidable should Russia invade Ukraine. Moscow has denied that it has any intention of doing so. But US lawmakers are threatening to impose what they call the “mother of all sanctions” on Russia should it cross a red line. European leaders are also preparing punishments that would go way beyond the curbs imposed on Russia when it annexed Crimea in 2014. China — which has its own tensions with the West — has already expressed diplomatic support for its ally. In a joint statement issued Friday after their meeting, Xi and Putin said both sides opposed “further enlargement of NATO.” Russia fears Ukraine may join the alliance.

Ukraine crisis: the trouble for China in staying friends with two foes
Moscow and Beijing are drawing ever closer while Kyiv remains an important arms and food supplier    China has walked a line between the two but attitudes are changing in Ukraine, analyst says

What Putin and Xi Said (and Didn’t Say) About Ukraine
The two leaders reaffirmed the “no limits” friendship between China and Russia in their first in-person meeting since 2019 – but they notably danced around the topic of Ukraine.   The statement does, however, explicitly “oppose further enlargement of NATO” and any NATO-like “closed bloc structures and opposing camps in the Asia-Pacific region.” But the joint statement goes into far more detail on the Indo-Pacific situation than the crisis in Ukraine. It directly addressing the “negative impact of the United States’ Indo-Pacific strategy,” “strongly condemn[s]” the AUKUS alliance, and even criticizes Japan’s plan to release wastewater from the Fukushima nuclear plant into the ocean. The implication is that China and Russia have more common ground in the Indo-Pacific region than they do in Eastern Europe. In fact, the joint statement ironically makes clear the uncomfortable position China is in at the moment. The text complains that “some actors” unilaterally “resort to force” in “addressing international issues.” The statement, of course, is referring to the United States, but in another context the same complaint could easily be aimed at Russia’s military buildup along the border with Ukraine. But while China is not willing to directly say it supports Russia’s military maneuvers in Eastern Europe, it’s crystal clear that Beijing is not going to break with Moscow over a potential conflict in Ukraine. “The new inter-State relations between Russia and China are superior to political and military alliances of the Cold War era,” the joint statement proclaims. “Friendship between the two States has no limits, there are no ‘forbidden’ areas of cooperation…” Russian officials, unsurprisingly, have been more forward leaning in claiming China’s whole hearted support. According to the Associated Press, ahead of the Putin-Xi meeting, Yuri Ushakov, Putin’s foreign affairs adviser, told reporters that China backs Russia in the current standoff over Ukraine.“Beijing supports Russia’s demands for security guarantees and shares a view that security of one state can’t be ensured by breaching other county’s security,” AP quoted Ushakov as saying.

Ukraine and Taiwan: two conflict zones with destabilizing potential
As presidents Putin and Xi meet against the background of the Olympic games, the crises centered on Ukraine and Taiwan continue to smolder. These two crises share striking similarities, but they are also connected in more subtle ways, argues Hanns W. Maull. While circumstances surrounding the conflict zones differ fundamentally, each could destabilize not only the security order of a whole region but, ultimately, also international peace and security.

U.S. needs careful Mekong strategy to counter China: expert
As tensions between the U.S. and China rise, the two superpowers are ramping up their involvement in the Mekong region, consisting of Thailand, Vietnam, Laos and Myanmar.     Suriyan Vitchtlekarn, executive director of the Mekong Institute, an intergovernmental think-tank based in Thailand, said in a recent interview with Nikkei Asia, “the U.S. government needs to be very careful not to misplace its strategy in the region.”  First, I think China domination in the Mekong sub-region has been a great concern [for the U.S.], because this is not about geopolitics alone, but … [also] trade. If I can create two scenarios, one scenario is everything is Chinese-centric development. So this will even worsen the current balance of the global trading system. At the other end, if there is some counterbalance … then at least the problem … will not be so severe.   I think basically, if you look into U.S. government policy like the Mekong-U.S. partnership strategy and things like that, you see that they address it from a few entry points. One is about water resource management. Because without effective water resource management, this could worsen the economy of the Mekong countries. The other entry point is nontraditional security issues. Cyberattacks, health issues, human rights issues. All of these point to the fact that quick economic development that does not show social environmental responsibility, perhaps should not be welcomed. That’s in the forefront. But at the back of the stage, this could be counterproductive against a number of plans.

China and Russia’s hypersonic weaponry threatens US early warning system
For those paying attention to the worrying advances in hypersonic weaponry by China and Russia, the news that the Pentagon is pushing US defence companies to hasten their own progress on hypersonic weapons is a welcome development. The race must now be on to catch up, or risk ceding the advantage to America’s adversaries.    Both China and Russia conducted hypersonic missile tests in the summer of 2021. Russia’s test of its hypersonic Skyfall nuclear-powered and nuclear-armed cruise missile took place at its Novaya Zemlya Island test range in the Arctic Ocean. Being nuclear powered, the missile has unlimited range.  China also conducted two flight tests of hypersonic ballistic missiles. One flew in a fractional earth orbit on a manoeuvring trajectory to the target region in China. The other also flew on a manoeuvring trajectory, and additionally released a second hypersonic object — a “first” for any nation.  The significance of these tests was quickly brushed off by both the arms control community and the media. Russia’s was reduced to environmental disregard (“a flying Chernobyl”) while China’s was dismissed as “nothing new” since Russian fractional orbital flights had taken placed during the cold war.

Olympic teams complain about conditions at quarantine hotels
Athletes who have tested positive for COVID-19 at the Games and are isolating in quarantine hotels complain of not enough food, poor quality of food and “unreasonable” living conditions, among other things.

Two years after his death, the Chinese doctor who warned of the virus is remembered.
Two years after the death of Li Wenliang, the doctor who tried to warn China about the coronavirus only to succumb to it himself, his memory remains a source of equal parts grief, anger and hope for many Chinese.   Dr. Li, an ophthalmologist from Wuhan, where the pandemic began, rose to national attention after he warned friends on social media in late December 2019 of a mysterious new virus in his hospital, only to be reprimanded by the local police for spreading rumors. When the government belatedly confirmed that there was an outbreak at hand, Dr. Li became a national hero, seen as an embodiment of the importance of free expression.   But Dr. Li soon fell ill with the virus himself. On Feb. 6, 2020, he died.

Will China’s Tall Space Goals Spur Further Competition? 
While China’s white paper on space is a good transparency move, the goals enshrined in the document may also make space more competitive.  On domestic space governance, the new white paper said that China will accelerate the process of developing a domestic space law including making regulations on satellite navigation, strengthening the management of satellite navigation activities, revising measures for the registration of space objects, and regulating the sharing and use of space data and the licensing of civil space launches, management of satellite frequency and orbit resources, as well as coordination and registration of resources to protect China’s rights and interests.    China is also using space as a major tool in furthering its diplomacy and national interests. Outreach in the Middle East, Africa and Pakistan in South Asia found a number of mentions in the white paper. For instance, it said that Beijing will “give priority to developing communications satellites for Pakistan and to cooperating on the construction of the Pakistan Space Centre and Egypt’s Space City.”  While China’s white paper on space is a good transparency move, the goals enshrined in the document may also make space more competitive. It is clear that the space race is well and truly under way.

The Rise and Fall of Democracy With Chinese Characteristics
Despite Beijing’s recent attempts to sell its own version of democracy, China’s “consultative democracy” has been on a downslide since Xi came to power.   How the CCP views democracy reflects how the party views itself. Does the party believe it enjoys overwhelming support from the Chinese people, as it claims? Or does the CCP understand that its legitimacy is walking on the thin ice? The Democracy Wall movement in the late 1970s might provide a useful anecdote. Deng Xiaoping said that “People should express their discontent. […] This is not scary.” However, months later, Deng ordered the suppression of the movement and the arrest of key figures because he found the movement threatening CCP rule.    The rise and fall of consultative democracy in China demonstrate that the CCP has a hard time balancing between political unipolarity and a diversifying society. The question of domestic legitimacy will certainly keep Chinese leaders awake at night.

China’s shrinking, ageing population should drive its transition into a digital economy
Shifting demographics are not necessarily bad news for China, provided it continues to move away from manufacturing towards a more productive digital economy    Investment in services and technology, particularly those needed to support an ageing population, can ease workforce pressures and improve standards of living   The priority for the country is to focus on productivity growth rather than top-line aggregate growth in the labour force. Technology and other high-growth companies are already charting a path towards a more productive digitised economy. China is at the forefront of cutting-edge capabilities in robotics; 168,377 Chinese industrial robots were installed in 2020 and projections for 2021 are around 290,000. China also leads the way in artificial intelligence (AI), representing 28 per cent of the world’s AI research production    Meanwhile, despite the population plateau, China’s consumer market continues to grow and mature. The vast “silver” generation creates new opportunities for goods and services catering to an ageing population. It’s likely that spending and investments on assisted living and health care will rise, benefiting pharmaceuticals, providers of medical devices, and internet health care companies. As we look to a post-pandemic future, all signs point to a new paradigm where all of the world’s major economies experience lower population growth. This reality will require a different growth model that prioritises productivity gains and improvements to the standard of living across society. Policymakers in China and beyond will need to think creatively about how they can prepare their economies for such a future.

WHO head meets Li Keqiang for Covid talks
WHO director-general Tedros Adhanom Ghebreyesus, visiting Beijing for the 2022 Winter Olympics, posted a picture on Twitter of the pair sitting with officials in a meeting room.      “Pleased to meet with Premier Li Keqiang. We discussed Covid-19 and the need for an aggressive effort on vaccine equity this year to vaccinate 70 percent of all populations,” Tedros said.

Tencent restores Fight Club ending after censorship backlash in China on social media
The restored ending adds back about 11 out of 12 minutes cut from the film, but some scenes featuring nudity are kept out  Tencent Video previously replaced the original ending with text saying authorities thwarted a plot to bomb buildings and wipe out consumer debt

Chinese free speech advocate takes aim at Tencent over WeChat account shutdown
Law professor He Weifang accuses the company of trampling on civil rights by suspending yet another of his accounts    In handwritten letter, He urges others to join him in protest against the tech giant

China’s tennis star Peng Shuai breaks her silence: no sexual assault
The three-time Olympian says she made no such claims in a social media post which sparked international concerns for her well-being     In first interview with independent international media, Peng said she dined with Olympics chief Thomas Bach and discussed her future plans

China’s pet economy booms as more millennials delay marriage and kids for fur babies
China’s urban pet market was estimated to be worth 298.8 billion yuan (US$46 billion) in 2020, up from 72.5 billion yuan in 2015    The country’s new crop of pet owners have several things in common: they are young, well-educated and earning a high income

China population: is a demographic turning point just around the corner as births drop again?
Mainland China’s overall population increased to 1.4126 billion in 2021, but the national growth rate hit a record low of just 0.34 per thousand  Chinese mothers gave birth to 10.62 million babies last year, an 11.5 per cent drop from 12 million in 2020

China-Britain relations: Xi lauds Queen Elizabeth on Platinum Jubilee while seeking closer ties with UK
China’s president sent a message to mark the 70th year of the British monarch’s reign, noting she had long cared about the friendship between their nations      It comes as Xi Jinping met the Argentinian president at the weekend and announced support for that country’s full sovereignty over the Falkland Islands

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