Sullivan meets Xi, Philippines and China trade accusations, and economy keeps losing momentum
Sullivan meets Xi, Philippines and China trade accusations, and economy keeps losing momentum
+ China’s fight against pollution extends lifespan by two years
Welcome back to What’s Happening in China, your weekly update on the latest news and developments from the country.
Happy (almost) September! I hope you had a great week.
Before we begin, please remember to like, comment, restack, or share this newsletter with friends, family, and colleagues. Your engagement helps us grow and reach more readers.
Today's issue may be cut off in your inbox. Click here for the full content.
Let’s get into it.
Was this forwarded to you? You can click here to get What’s Happening in China delivered straight to your inbox every Saturday.
Through the Lens
In Focus
I. Must. Boost. Household. Income.
The uncertainty in the property market combined with deflationary pressures in China’s economy have led many to view renting as a longer-term solution rather than a temporary fix. As rental demand increases, rents are poised to rise further and exacerbate financial pressures on renters, particularly in major cities. The resulting reduction in discretionary spending could further dampen household consumption, posing additional challenges to an economy already struggling with weak consumer confidence and insufficient domestic demand.
Moreover, the substitution effect could push low-income households toward smaller, less desirable living spaces as they attempt to manage their housing costs. This downsizing not only affects their quality of life but also reinforces socioeconomic inequalities. Those unable to afford property or rising rents in desirable urban areas may be pushed to the periphery, both geographically and economically, further entrenching the divide between the wealthy and the less affluent.
As in many other areas of economic reforms, housing reforms create conflicting outcomes. While policies proposed by the People’s Bank of China and other policy institutions to raise rents and enhance rental yields may address one set of concerns arising from the deflation of China’s housing sector, they also run the risk of worsening the income imbalances at the heart of the Chinese economy. To mitigate the challenges posed by rising rents, particularly for middle- and low-income residents, Beijing needs to implement or deepen reforms that directly or indirectly reverse these transfers. Above all, household incomes for middle- and especially low-income groups must outpace rent increases.
Read: China’s Recent Rental Strategy Is a Win for Some, a Strain for Others
II. China’s Control of Overseas Ports
Western governments have increasingly become concerned about China’s potential development of overseas naval bases. Although the growing scrutiny from the West could mean that building naval bases is not an effective way for the Communist Party of China (CPC) and the Chinese government to project power globally, the CPC and the government can still influence global trade and logistics. China’s heavy investment in the world’s most-connected ports highlights its strong influence over the supply chains of global trade. The real leverage of the CPC and the Chinese government over the West is not necessarily in building newer and bigger naval bases; rather, China’s leverage is in its varied degrees of investment and ownership in the world’s busiest and most-connected ports, which underpin the global flow of goods.
Read: Tracking China’s Control of Overseas Ports
Xinjiang
China’s ‘problematic laws’ remain in Xinjiang two years after damning report: UN
SCMP
Two years after a landmark UN report said Chinese government policies in Xinjiang “may constitute crimes against humanity”, the body’s top human rights office says “many problematic laws and policies remain in place” in the region.
The Office of the United Nations High Commissioner for Human Rights (OHCHR) said that while it has held “detailed exchanges” with Beijing on a “range of critical” human rights issues, it still faced “difficulties posed by limited access to information and the fear of reprisals against individuals who engage with the United Nations”.
“In particular, on Xinjiang, we understand that many problematic laws and policies remain in place, and we have called again on the authorities to undertake a full review, from the human rights perspective, of the legal framework governing national security and counterterrorism and to strengthen the protection of minorities against discrimination,” said Ravina Shamdasani, a spokeswoman for Volker Turk, the United Nations high commissioner for human rights.
The statement was issued in response to queries about the office’s work with China, on the eve of the second anniversary of an explosive report that urged Beijing to reverse a series of human rights abuses committed in Xinjiang.
China: Update on the work of UN Human Rights Office
OHCHR
The High Commissioner and the Office have had detailed exchanges with the Government of China on a range of critical issues, such as counter-terrorism laws and policies, criminal justice, other policies of concern that impact on the human rights of ethnic and religious minorities, including in the Xinjiang Uyghur Autonomous Region and the Tibet Autonomous Region, equality and non-discrimination, as well as national security and human rights concerns in the Hong Kong Special Administrative Region.
Notably, in June this year, a UN Human Rights team visited China and engaged in dialogue with the authorities, specifically on counter-terrorism policies and the criminal justice system. In particular, on Xinjiang, we understand that many problematic laws and policies remain in place, and we have called again on the authorities to undertake a full review, from the human rights perspective, of the legal framework governing national security and counter-terrorism and to strengthen the protection of minorities against discrimination. Allegations of human rights violations, including torture, need to be fully investigated.
China Reacts to UN Human Rights Update on Xinjiang
Newsweek
"China always puts the people front and center in all our work, views respecting and protecting human rights as an important part of governance, and has made historic achievements in this aspect," Chinese Foreign Ministry spokesperson Lin Jian said during a Wednesday press briefing.
"Xinjiang today enjoys social stability and economic growth, and the people there live a happy life," he stated. He called on the OHCHR to remain impartial, respect "countries' sovereignty" and "facts," and "refrain from being used by political forces aiming to contain and vilify China."
[…]
Despite widespread human rights concerns, China was elected to a second term on the U.N.'s Human Rights Council in October.
Politics & Society
China’s Economic Malaise Stirs Rising Protests on Labor, Housing
Bloomberg
Protests in China are on the rise as the effects of a slowing economy rattle citizens and Beijing refrains from taking bolder steps to shore up growth.
Cases of dissent increased 18% in the second quarter compared to the same period last year in figures documented by the China Dissent Monitor at Freedom House, a US advocacy group. The majority of events linked to economic issues, according to a report published Wednesday.
Of those events, 44% related to labor and 21% involved aggrieved homeowners, the report noted. Generally, it defines dissent as acts of voicing grievances, asserting rights or advancing interests in contention with the authorities or the powerful.
The report offers a snapshot of sentiment across China, although it doesn’t fully capture discontent in the world’s No. 2 economy. Physical protests are suppressed and deterred by surveillance and internet controls strengthened under President Xi Jinping. Such unrest is unlikely to threaten the regime — demonstrations are often small and isolated in nature, with protesters rarely directing their anger at the leader.
Still, the report highlights the economic challenges facing the ruling Communist Party that are threatening to morph into broader governance issues. People in China are grappling with an economic slowdown and waning confidence as a four-decade rise in living standards shows signs of stalling. A real estate crisis, trade war with the US, private sector crackdowns and costly pandemic lockdowns have all weighed on growth despite Beijing’s measures to stimulate the economy.
Issue 8: April – June 2024
Freedom House
Documenting nearly 6,400 dissent events over two years. CDM logged 805 dissent events in the second quarter of 2024, a 18 percent increase over the same period in 2023. The majority of events are labor (44 percent) and homeowner (21 percent) protests, with the remainder involving diverse groups like rural residents, students, parents, investors, consumers, members of religious groups, activists, Tibetans, ethnic Mongolians, and members of the LGBT+ community. The top regions for protest events were Guangdong (13 percent), followed by Shandong, Hebei, Henan, and Zhejiang. CDM has logged a total of 6,300 cases of dissent since data collection began in June 2022.
China’s urban-rural gap is a threat to growth. Is the divide too wide to fix?
SCMP
The Communist Party leadership is aware that if the urban-rural divide continues to widen, China’s sustainable growth could be jeopardised.
[…]
Observers said while Beijing was aware of its gravity, resolving the problem was no easy task, especially in education.
In China, all children are required to complete nine years of compulsory education, including primary and junior high school.
But scholars have pointed out that the deficiencies in China’s rural education start when students are very young, and if the rural-urban divide persists, the world’s second-biggest economy, which is already slumping, will face a serious human capital crisis.
Scott Rozelle, faculty co-director of the Stanford Centre on China’s Economy and Institutions, said that low- and middle-income labour in rural areas “could be a major long-term obstacle to China’s sustainable economic growth”.
This is because a lack of skills has made it difficult for rural workers to compete in the urban labour market.
“Children attending rural schools have difficulty acquiring the academic skills needed for highly skilled jobs,” Rozelle said.
According to research by Rozelle, 40 to 50 per cent of rural children have delays in cognitive development, which can lead to difficulties in learning maths, science and languages.
“The average level of education of the entire workforce in China (aged 18 to 65) is slightly lower by international standards, almost entirely due to the lower level of education of the rural population. A significant proportion of rural workers do not have a high school diploma,” Rozelle said.
He added that if Chinese workers find it difficult to move from low-skilled to high-skilled jobs, “it could hinder China’s transition to a high-income, high-skilled economy”.
China’s Communist Party brings in new rules to regulate faith, loyalty and performance
SCMP
China’s ruling Communist Party has rolled out a set of new rules to remove incompetent members deemed lagging in their faith, loyalty and performance, in a bid to further strengthen the party’s control over the conduct of its nearly 100 million members.
The new rules released by the party’s general office on Thursday, decree that underperforming party members, whose problematic conduct might not warrant a formal corruption investigation, be disqualified from the party, state-run Xinhua news agency said.
Comprising 27 articles, the rules are “crucial for exercising full and rigorous” party self-cleansing, according to Xinhua, quoting an official from the Central Organisation Department, the party’s top personnel office.
Unlike disciplinary measures imposed on party members who violate the party’s discipline, such as for corruption, this new set of regulations specifically targets party members who “lack revolutionary spirit, fail to fulfil their party obligations, or no longer meet party membership criteria”, the official told Xinhua.
New Chinese textbooks play up national security, Xi Jinping Thought and Vietnam, India wars
SCMP
Chinese students will learn more about national security and traditional culture as Beijing rolls out new textbooks in its latest move to step up ideological propaganda and control.
Primary and junior high school students starting the autumn semester next week will be handed the new textbooks on Chinese language, history, as well as morality and law, state broadcaster CCTV said on Tuesday.
Morality and law was known until 2016 as ideology and politics, It is a mandatory subject that promotes the ideology of the ruling Communist Party.
Topics highlighted in the new textbooks include President Xi Jinping’s political thoughts, and there will also be an emphasis on traditional Chinese culture and national security, CCTV reported, citing an education ministry official.
EU officials assail denial of access to trial of two Chinese human rights advocates
SCMP
European Union diplomats were denied entry to a Suzhou courtroom on Wednesday, as they tried to monitor the start of the trial of two Chinese human rights advocates who were detained last year on their way to meet EU officials in Beijing.
“It is highly regrettable that EU representatives of diplomatic missions accredited to China were denied access to the courtroom. This denial undermines trust in due process requirements in China,” said Nabila Massrali, the bloc’s foreign affairs spokeswoman.
Yu Wensheng, a prominent human rights lawyer, and his wife Xu Yan were detained on April 13, 2023. The trial is being held in Suzhou, Jiangsu province, a city 110km (68 miles) west of Shanghai.
“The EU reiterates its earlier concerns about the well-being of Yu Wensheng and Xu Yan and we call for their immediate release,” Massrali said.
The EU, she added, sought “immediate clarifications from the authorities on the sudden and unexplained detention by the police of two lawyers, Wang Yu and Yang Hui, who also tried to attend the trial”.
Hikvision Wins $120 Million Project for 84,000+ Cameras in PRC Provincial Capital
IPVM
Within the PRC, Hikvision is a major direct supplier of municipal surveillance and security systems, most notably Hikvision's PRC Government forced facial recognition project across 967 Mosques in 2018; also, see 2020's $46 million direct provincial win and 2021's $33 million win beating three integrators, among many other examples.
Now, Hikvision has won an even bigger project that aims to deliver "advanced modern governance capabilities, fully unlocking the value of video surveillance resources."
Hikvision solicited the project via competitive bidding despite glaring conflicts with internationally-recognized human rights.
‘Northern frontier culture’: How China is erasing ‘Mongolia’ from Mongolian culture
The Strategist
Chinese authorities have launched a campaign to change the term that people use to refer to Mongolian culture and to the cultural and historical heritage of the Inner Mongolia Autonomous Region (IMAR) in a move aimed at eroding Mongolian identity and sense of homeland.
The Chinese Communist Party’s new official term, bei jiang wenhua, meaning ‘northern frontier culture’, eliminates reference to Mongolians, one of China’s 56 officially recognised ethnic groups. Since July 2023, Inner Mongolia state media articles, official websites, party statements, party-organised children’s activities, and official social media posts have widely promoted the phrase. The party’s regional propaganda office has also founded an academic journal dedicated to ‘northern frontier culture’, and Inner Mongolia’s premier state-run academic institute has opened a ‘northern frontier’ research centre.
The adoption of the term appears to be part of the CCP’s growing campaign to weaken Mongolian ethnic identity and instead push a Han-centric national identity through the elimination of Mongolian language education and other measures.
China Fines Seven Companies Over Tainted Cooking Oil Scandal
Bloomberg
China has fined seven companies for their involvement in a tainted cooking oil scandal that caused a nationwide uproar over food safety last month.
The firms were penalized a combined 11 million yuan ($1.5 million) for their role in an incident that saw edible oil being transported in trucks that had been used to carry coal oil without being properly cleaned. A unit of state grain stockpiler China Grain Reserves Corp., known as Sinograin, got the biggest fine — 2.86 million yuan — following an investigation set up by the State Council.
Chinese cooking oil scandal prompts new safety rules for transporting products
SCMP
China is drafting national standards for transporting cooking oil in the aftermath of a scandal that shook the nation.
[…]
The draft states that specific containers must be used for transporting cooking oil, and non-edible oil cans should not be used. The quality of the cans should meet the standards set by China’s food safety laws. Furthermore, transport records must be checked, and the cans need to be cleaned periodically with specific types of detergent and water.
The draft did not contain clauses stipulating the consequences if parties fail to meet the requirements.
China Seeks to Allay Public Concerns Over ‘Housing Pension’ Plans
Sixth Tone
Earlier this year, the government reiterated that it was prioritizing the renovation of old residential communities, with a particular focus on ensuring their heating, fire safety, and other essential facilities are up to standard.
The government plans to fund these extra inspections and repairs using a housing pension system, which will be financed through a combination of government payments and contributions from homeowners. More than 20 Chinese cities are already piloting local housing pension schemes.
Last Friday, the Ministry of Housing and Urban-Rural Development announced it was exploring plans to extend these pilot schemes to “create a long-term mechanism for managing the safety of buildings.” Shanghai has confirmed it will roll out a citywide housing pension scheme next year.
But the plans have sparked some concern among the public, with many asking whether homeowners will face a spike in costs due to the new system.
‘Twilight Love’: Shanghai’s Lonely and Retired Are Looking for Love
The New York Times
As people in China live longer and as ideas about love and marriage change, more people are looking for a second, or third, chance at love. To help fill the void, dating shows have popped up with titles like “Not Too Late for Fate.” Online, there are chat rooms, livestreaming matchmakers and dating apps for the old and single.
But there is no substitute for getting together.
Every week in Shanghai, hundreds of older adults return to the same designated corners of public parks and, for some reason that no one was able to explain, one dining area at an Ikea in the upscale district of Xuhui, hopeful of meeting a future spouse.
The gatherings are social events — people bring karaoke machines and speakers to the park to dance and sing. They bring thermoses to Ikea to fill with free coffee, and sit around birch and plastic white tables swapping stories about their childhoods.
There are regulars, like Ma Guoying, 64, who has a warm smile and likes to wear bright colors and large, round glasses. She has spent a lot of time at Ikea and People’s Park over the past several months. Her friend Zhang Xiaolan, 66, has been coming for a decade.
Neither of them has had much luck finding a man. The older ones always seem to want younger women.
But it’s an activity that fills up a few hours of the day.
China recognises Catholic bishop of Tianjin, Vatican says
Reuters
China's government has recognized the authority of the Catholic bishop of Tianjin, Melchior Shi Hongzhen, the Vatican said on Tuesday, who had previously been placed under house arrest for refusing to join China's state-backed church structure.
"This development is a positive fruit of the dialogue established in recent years between the Holy See and the Chinese Government," the Vatican said in a statement.
[…]
Shi took part in an inauguration ceremony on Tuesday as part of his official recognition by the government, the outlet AsiaNews reported. The ceremony took place in a hotel rather than a church, to stress that Shi had already been ordained a bishop decades ago, the report said.
The Vatican and Beijing are due to decide this autumn whether to renew their agreement over bishop appointments. The Vatican's chief diplomat, Cardinal Pietro Parolin, had said in May that the church hoped to renew it.
Crying toddler locked in airplane bathroom sparks debate about parenting in China
CNN
Two airline passengers who locked a stranger’s crying grandchild in a plane restroom have caused outrage in China and sparked a heated online debate on how to handle upset children in public spaces.
The incident went viral this week after one of the two women involved posted a video on Chinese social media, which showed them inside a locked lavatory with the wailing girl, who appeared to be about a year old.
“We won’t let you out unless you stop crying,” a woman sitting on the toilet told the toddler as she struggled out of the adult’s lap and reached for the door, according to the video posted on Douyin, China’s version of TikTok.
China to see biggest millionaire exodus in 2024 as many head to U.S.
Nikkei Asia
China saw the world's biggest outflow of high-net-worth individuals last year and is expected to see a record exodus of 15,200 in 2024, dealing a further blow to its economy, a new report says.
Uncertainty over China's economic trajectory and geopolitical tensions are top of mind for many Chinese millionaires, in dollar terms, who choose to leave their country, according to the report by investment migration firm Henley & Partners. The U.S., China's international archrival, stands out as the top destination, according to the researchers.
China last year saw 13,800 high-net-worth individuals depart, mostly to the U.S., Canada and Singapore, the firm found. Such individuals, abbreviated as HNWIs, are defined as those with at least $1 million in assets.
Henley & Partners said it was difficult to know how much wealth was taken with the emigrants, but "in our experience the HNWIs that normally move most are the ones with between $30 million and $1 billion in wealth," said Andrew Amoils, head of research at New World Wealth, a wealth intelligence firm that collaborated with Henley & Partners on the report.
China’s new age of swagger and paranoia
The Economist
Because the world is divided in its perceptions of China, that has fuelled another dynamic. Over the past six years, Chinese leaders have become increasingly unwilling to accept foreign scrutiny of their country. Not long ago, Chinese reformers quoted foreign critics to help them push for change. Now the reformers do not dare. In Mr Xi’s China, even constructive foreign criticism is called a ploy to hold China down.
The siege mentality of China’s rulers goes beyond a dislike of foreigners with complaints. Mr Xi has told diplomats, scholars and state media to be more confident, and to defend China with home-grown measures of success. In today’s China it is unpatriotic even to engage with foreign arguments about what makes for good governance, wise economic management or the rule of law.
Reporting from China has become a shockingly lonely business. Too many foreign correspondents, notably from America, have been expelled or pushed out by harassment. When others left voluntarily, their news organisations struggled to obtain new visas. The Trump administration bears blame for expelling scores of Chinese reporters, giving officials in Beijing a perfect excuse to retaliate. But the numbers are stark. During Chaguan’s current posting, the New York Times went from ten foreign correspondents in mainland China to two at present, the Wall Street Journal from 15 to three, and the Washington Post from two to zero.
Keep reading with a 7-day free trial
Subscribe to What's Happening in China to keep reading this post and get 7 days of free access to the full post archives.