Category: China

Local Chinese Governments Inflated Revenue Data with Fake Land Sales

(p. B6) China’s local government funding problems last year were even worse than most economists thought. At least $12 billion worse.

That is the boost Chinese local governments got to their revenues after a series of fictitious sales of land and other state-owned assets, according to the country’s national audit office. The disclosure means that even the official data, which showed a sharp drop in land sales and local government revenues last year, painted a more positive picture than was accurate.

Around 70 regions inflated their local fiscal revenues by selling state-owned assets and land to themselves, the national auditor said. Since these deals were done between local governments and their own entities, they didn’t actually raise revenue for local governments but simply moved money around.

For the full story, see:

Rebecca Feng and Cao Li. “Local Governments In China Used Fake Deals to Lift Sales.” The Wall Street Journal (Wednesday, June 28, 2023): B6.

(Note: the online version of the story has the date June 27, 2023, and has the title “Chinese Local Governments Used Fake Property Deals to Boost Revenues.”)

60-Year-Old Retired Musician Says She Will “Fetch a Gun” to Defend Taiwan’s Freedom

(p. A1) TAIPEI, Taiwan—People in Taiwan have been following every twist of the war in Ukraine. But, while their sympathy for the Ukrainian cause is near-universal, the conclusions for the island’s own future widely diverge.

To some, the takeaway is that even a seemingly invincible foe can be defeated if a society stands firm, an inspiration for Taiwan’s own effort to resist a feared invasion by China. Others draw the opposite lesson from the images of smoldering Ukrainian cities. Anything is better than war, they say, and Taiwan should do all it can to avoid provoking Beijing’s wrath, even if that means painful compromises.

. . .

(p. A8) “The young people are the ones who don’t want unification with China,” said ret. Lt. Gen. Chang Yan-ting, a former deputy commander of Taiwan’s air force. “But if you want independence, you need to fight, and they also don’t want to fight. Therein is the conflict.”

Yi-hao, a student in Taiwan’s National Defense University, was an exception. “Before the war in Ukraine, we were taught that Russia’s military power is stronger than China’s, and Taiwan’s military was stronger than Ukraine’s,” he said. “If they were able to resist this long, Taiwan will definitely be able to hold out.” He didn’t want his surname used because he wasn’t authorized by the military to speak.

Lai Yi-chi, who became a lieutenant after graduating from the Naval Academy in June [2023], said that she had been inspired by the bravery and resilience of Ukrainian soldiers, something often discussed in her classes. “We should also embody such spirit and determination,” she said.

Bypassing the official armed forces, some volunteer groups have decided to act on their own, preparing fellow citizens for a possible war. One such group is Kuma Academy, which received a $100 million donation from Robert Tsao, the founder of the United Microelectronics, one of the world’s biggest semiconductor companies.

“We don’t intend to build up a private army,” Tsao said. “But I think their effort will probably increase the resilience of Taiwan’s society. If we know how to hide, how to help each other, how to retain communication, we can pretty much reduce the damage in wartime.” Some of the students also like to learn more martial skills, such as shooting, Tsao said, but Taiwan’s strict gun laws make it difficult. Some 25,000 Taiwanese have been trained at Kuma.

Nico Li, a 60-year-old retired musician attending a Kuma class, said she was unnerved by growing risks coming from China, and wanted to arm herself to avoid being a burden to her children. “Taiwan is an island of treasure. I don’t want to hand it over to others without a fight,” Li said, referring to what she sees as the Taiwanese values of freedom and democracy. “If I have the ability, I would even go and fetch a gun if necessary.”

At another training session, run by the Forward Alliance, dozens of Taiwanese practiced how to stop arterial bleeding with tourniquets and stabilize major wounds. “There is a sense of impending doom, of feeling very hopeless,” said one of the students, Eric Lin. “So, instead of sitting at home and browsing the negative news, I wanted to come here—so that I would be able to do something.”

For the full story, see:

Yaroslav Trofimov and Joyu Wang. “Taiwan’s Impossible Choice: Be Ukraine or Hong Kong.” The Wall Street Journal (Thursday, July 6, 2023): A1 & A8.

(Note: ellipsis, and bracketed year, added.)

(Note: the online version of the story has the date July 5, 2023, and has the same title as the print version.)

Feds Release Covid Origin Report on a Friday Evening–A Time to “Put Out News They Want Buried or Ignored”

(p. A12) The Office of the Director of National Intelligence released a long-awaited declassified report, which included spy agencies’ findings on the so-called lab leak theory, . . .

The 10-page report said scientists at the Wuhan Institute of Virology did conduct research on coronaviruses, in some cases had inadequate safety measures and had genetically engineered coronaviruses.

. . .

After three years of study, some senior U.S. officials have said that the spy agencies are unlikely to come to any satisfactory conclusion, in large measure because China has not cooperated with international inquiries and some officials in Beijing are not interested in digging deeper into the cause of the pandemic.

. . .

The report was released on a Friday evening, traditionally a time when administrations put out news they want buried or ignored. Conservatives had criticized the government for failing to meet a deadline of the beginning of the week, though few congressionally mandated reports are delivered precisely on time.

While Biden administration officials have said they have ordered investigations without favoring one theory over another, Republicans have harshly criticized how the White House and its intelligence agencies have investigated Covid’s origins.

“The lab leak is the only theory supported by science, intelligence and common sense,” John Ratcliffe, who served as the director of national intelligence in the Trump administration, said as the report was released Friday [June 23, 2023], adding: “The Biden administration’s continued obfuscation of Covid origins is a disservice to the intelligence community.”

For the full story, see:

Julian E. Barnes. “Intelligence Agencies Remain Divided Over Theory That Covid Came From Lab.” The New York Times (Saturday, June 24, 2023): A11.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date June 23, 2023, and has the title “U.S. Intelligence Report Finds No Clear Evidence of Covid Origins in Wuhan Lab.”)

Tiananmen Leader Hopes Exiled Hong Kongers Will Keep Memory of Massacre Alive

(p. A8) For decades, Hong Kong was the only place in China where the victims of the 1989 military crackdown on pro-democracy activists at Tiananmen Square in Beijing could be publicly mourned in a candlelight vigil. This year, Hong Kong is notable for all the ways it is being made to forget the 1989 massacre.

In the days before the June 4 anniversary on Sunday, even small shops that displayed items alluding to the crackdown were closely monitored, receiving multiple visits from the police. Over the weekend, thousands of officers patrolled the streets in the Causeway Bay district, where the vigil was normally held, and set up tents where they searched people suspected of trying to mourn. They arrested four people accused of “acts with seditious intention” and one person accused of obstructing police officers. Another 27 people were detained.

Zhou Fengsuo, a student leader in the Tiananmen Square protest movement, said that Hong Kong is now under the same “despotic rule” as the mainland.

. . .

“For us Tiananmen survivors, losing Hong Kong — this very important place that shielded history and truth — is very painful,” said Mr. Zhou, the former Tiananmen leader. After the raid and forced closing of a June 4 museum in Hong Kong in 2021, Mr. Zhou donated several Tiananmen artifacts to a newly established permanent exhibit in New York, including a bloodstained banner, a tent and a mimeograph. A section was devoted to Hong Kong.

He added that he related to the wave of Hong Kong dissidents who had left the city — to the pain of exile and their struggle to keep the movement alive while far from home. But their presence abroad was helping to keep the memory of the crackdown alive elsewhere, he said.

“On the other hand, many Hong Kongers are now passionately participating in June 4 activities around the world, increasing attendance threefold in some places,” he said. “There are now many cities that are starting to commemorate June 4 because of the arrival of Hong Kongers.”

For the full story, see:

Tiffany May. “Marking the Tiananmen Massacre in a Hong Kong Stripped of Dissent.” The New York Times (Monday, June 5, 2023): A8.

(Note: ellipsis added.)

(Note: the online version of the story was updated June 5, 2023, and has the title “Hong Kong Remembered the Tiananmen Massacre, Until It Couldn’t.”)

Chinese Communist Party “Rattled” by Citizens Refusing to Pay Mortgages on Unfinished Apartments

(p. B1) The rows of towering buildings crowding the banks of the Gan River are a testament to the real estate boom that transformed Nanchang in eastern China from a gritty manufacturing hub to a modern urban center.

Now those skyscrapers are evidence of something very different: China’s real estate market in crisis, reeling after years of overbuilding.

. . .

Nanchang illustrates the enormous challenges policymakers face in trying to revive China’s economy. During past downturns, Beijing turned to real estate and infrastructure spending to jump-start the economy. But this time, it won’t be an easy fix. Developers are saddled with debt, cities are teeming with empty dwellings, and local government finances are depleted from years of paying for Covid testing.

Many of Nanchang’s newest apartments remain empty because developers ran out of money and did not finish building already-sold units. Some homeowners are refusing to pay mortgages until their apartments are finished, a nationwide act of dissent that has rattled the Chinese Communist Party.

. . .

Shortly after her daughter was born in 2019, Andie Cao, who lives and works in Shanghai, bought an unfinished apartment in Nanchang. It was closer to her hometown in the Chinese countryside, and she planned to move after the developer was set to finish the project in late 2021.

But the developer ran into financial problems and stopped construction in July 2021. After continuing to pay the mortgage for a year, Ms. Cao and other homeowners staged a mortgage boycott last July [2022].

Ms. Cao said that the salespeople had also told her that the apartment was in one of Nanchang’s more established districts with good schools, but that it was actually zoned for a neighboring, less developed area on the city’s outskirts.

“Everyone was deceived,” she said. “Otherwise, why would there be so many people buying a home in the suburbs?”

She said she was continuing to boycott, because the homes were still unfinished. She said the police had visited her parents to tell Ms. Cao to stop speaking out. The banks are now suing some of her boycotting neighbors.

For the full story, see:

Daisuke Wakabayashi and Claire Fu. “Once a Symbol of China’s Growth, Now a Sign of a Housing Crisis.” The New York Times (Wednesday, May 31, 2023): B1 & B4.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date May 25, 2023, and has the same title as the print version.)

“Range Anxiety” Leads Chinese to Prefer Hybrids Over EVs

(p. B12) Don’t write off hybrid electric vehicles.

After Tesla, the most highly valued U.S.-listed EV company isn’t homegrown Rivian or Lucid but Li Auto, a Chinese manufacturer that went public in 2020 by listing American depositary receipts.

. . .

What is surprising is that Li has overtaken NIO to lead the new generation of Chinese startups. Li doesn’t make the purely electric vehicles that were popularized by Tesla and that have become the technological focus of other startups and most old-school car manufacturers. Instead, it specializes in extended-range EVs, which use a generator to power up the battery with gasoline if it runs out of juice.

. . .

The popularity of what is essentially a plug-in hybrid, albeit a cutting-edge one, is notable in the Chinese market, which has in many ways led the transition to EVs.

. . .

But Chinese charging infrastructure is patchy, leading to range anxiety. Brokerage Bernstein expects 65% growth in plug-in hybrid sales in China this year, versus 25% growth for pure EVs.

For the full commentary, see:

Stephen Wilmot. “Move Over EVs, Hybrids Are Hot in China.” The Wall Street Journal (Tuesday, Feb. 28, 2023): B12.

(Note: ellipses added.)

(Note: the online version of the commentary was updated February 27, 2023, and has the same title as the print version.)

Xi Deflects Focus Away from Economic Stagnation by Telling Youth to “Eat Bitterness”

(p. B1) China’s young people are facing record-high unemployment as the country’s recovery from the pandemic is fluttering. They’re struggling professionally and emotionally. Yet the Communist Party and the country’s top leader, Xi Jinping, are telling them to stop thinking they are above doing manual work or moving to the countryside. They should learn to “eat bitterness,” Mr. Xi instructed, using a colloquial expression that means to endure hardships.

Many young Chinese aren’t buying it. They argue that they studied hard to get a college or graduate school degree only to find a shrinking job market, falling pay scale and longer work hours. Now the government is telling them to put up with hardships. But for what?

“Asking us to eat bitterness is like a deception, a way of hoping that we will unconditionally dedicate ourselves and undertake tasks that they themselves are unwilling to do,” Ms. Li said.

. . .

(p. B4) A record 11.6 million college graduates are entering the work force this year, and one in five young people is unemployed. China’s leadership is hoping to persuade a generation that grew up amid mostly rising prosperity to accept a different reality.

The youth unemployment rate is a statistic the Chinese Communist Party takes seriously because it believes that idle young people could threaten its rule. Mao Zedong sent more than 16 million urban youths, including Mr. Xi, to toil in the fields of the countryside during the Cultural Revolution. The return of these jobless young people to cities after the Cultural Revolution, in part, forced the party to embrace self-employment, or jobs outside the state planned economy.

Today the party’s propaganda machine is spinning stories about young people making a decent living by delivering meals, recycling garbage, setting up food stalls, and fishing and farming. It’s a form of official gaslighting, trying to deflect accountability from the government for its economy-crushing policies like cracking down on the private sector, imposing unnecessarily harsh Covid restrictions and isolating China’s trading partners.

Many people are struggling emotionally. A young woman in Shanghai named Ms. Zhang, who graduated last year with a master’s degree in city planning, has sent out 130 résumés and secured no job offers and only a handful of interviews.

. . .

“To ask us to endure hardships is to try to shift focus from the anemic economic growth and the decreasing job opportunities,” said Ms. Zhang, who, like most people I interviewed for this column, wanted to be identified with only her family name because of safety concerns.

. . .

Mr. Xi “talks about the great rejuvenation of the Chinese nation all the time,” said Steven, who graduated from a top U.K. university with a master’s degree in interactive design and has yet to find a job. “But isn’t the rejuvenation about not everyone engaging in physical labor?” Because of the rapid development of robots and other technologies, he said, these jobs are easily replaceable.

. . .

Now after months of fruitless job hunting, he, like almost every young worker I interviewed for this column, sees no future for himself in China.

“My best way out,” he said, “is to persuade my parents to let me run away from China.”

For the full commentary, see:

Li Yuan. “THE NEW NEW WORLD; China’s Grads Struggle to Find Work. Xi Shrugs.” The New York Times (Friday, June 2, 2023): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the commentary was updated June 1, 2023, and has the title “THE NEW NEW WORLD; China’s Young People Can’t Find Jobs. Xi Jinping Says to ‘Eat Bitterness.’”)

Instead of Ending Poverty, Chinese Communists End Free Speech About Poverty

(p. A1) A heartbreaking video of a retiree that showed what groceries she could buy with 100 yuan, or $14.50 — roughly her monthly pension and sole source of income — went viral on the Chinese internet. The video was deleted.

A singer vented the widespread frustration among young, educated Chinese about their dire finances and gloomy job prospects, like gig work. “I wash my face every day, but my pocket is cleaner than my face,” he sings. “I went to college to help rejuvenate China, not to deliver meals.” His song was banned and his social media accounts were suspended.

. . .

Hu Chenfeng recorded the footage that was removed from the Chinese internet. On popular video sites, he had posted a recording showing an elderly woman living on barely $15 a month. In the words of many social media commenters, he was revealing too much. “This subject is untouchable,” one commenter wrote on a now-deleted discussion thread on Zhihu, a site similar to Quora. Another wrote, “His account was censored simply because he showed what life is like for many people.”

In the video, which survives outside the Chinese internet on YouTube, Mr. Hu interviews the woman, a 78-year-old widow, on the street in the southwestern city of Chengdu. She said she planned to buy only rice, about the only thing she could afford. She hadn’t eaten meat for a long time. Tears rolled down her cheeks as she recounted her financial hardship. The two walk through a grocery store. They bought rice, eggs, pork and flour. The bill came to 127 yuan ($18). Mr. Hu insisted on paying.

He was emotional, too, signing off with “a heavy heart.”

The video was removed from the two biggest user-generated video platforms in China. Mr. Hu’s accounts were suspended.

For the full commentary, see:

Li Yuan. “THE NEW NEW WORLD; China Is Deleting Poverty, One Video at a Time.” The New York Times (Monday, May 8, 2023): A1 & A6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date May 4, 2023, and has the title “THE NEW NEW WORLD; Why China’s Censors Are Deleting Videos About Poverty.”)

Communists Want Us to Forget the 1.6 Million Chinese They Murdered in Cultural Revolution

(p. A23) It would seem impossible to forget or minimize the Cultural Revolution in China, which lasted from 1966 to 1976, resulted in an estimated 1.6 million to two million deaths and scarred a generation and its descendants. The movement, which under Mao Zedong’s leadership sought to purge Chinese society of all remaining non-Communist elements, upended nearly every hallowed institution and custom. Teachers and schools long held in esteem were denounced. Books were burned and banned, museums ransacked, private art collections destroyed. Intellectuals were tortured.

But in China, a country where information is often suppressed and history is constantly rewritten — witness recent government censorship of Covid research and the obscuring of Hong Kong’s British colonial past in new school textbooks — the memory of the Cultural Revolution risks being forgotten, sanitized and abused, to the detriment of the nation’s future.

The Chinese government has never been particularly eager to preserve the memory of that sordid decade. When I spent six weeks traveling in China in 1994 — a slightly more open time in the country — I encountered few public acknowledgments of the Cultural Revolution. Museum placards and catalogs often simply skipped a decade in their timelines or provided brief references in the passive voice along the lines of “historical events that took place.”

But in her new book, “Red Memory: The Afterlives of China’s Cultural Revolution,” the journalist Tania Branigan notes that under Xi Jinping, China’s top leader, efforts to suppress this history have intensified — with troubling implications for the political health of the country at a time when it looms larger than ever on the world stage. “When you’ve had a collective trauma, you really need a collective response,” she told me recently. “I can see why the Communist Party wants to avoid the rancor and bitterness, but when you don’t have that kind of acknowledgment, you can move on — but you can’t really recover.”

For the full commentary, see:

Pamela Paul. “The Decade That China Cannot Delete.” The New York Times (Friday, May 19, 2023): A23.

(Note: the online version of the commentary has the date May 18, 2023, and has the title “The Decade That Cannot Be Deleted.”)

The book on the cultural revolution mentioned above is:

Branigan, Tania. Red Memory: The Afterlives of China’s Cultural Revolution. New York: W. W. Norton & Company, 2023.

Feds Impose Tariffs on Imports of Paper-Thin Steel Needed to Make EV Engines

(p. A3) Large U.S. steelmakers are ramping up production of a hard-to-make, paper-thin steel to capture a fast-growing market for a material critical to powering electric vehicles.

. . .

Such electrical steel, which accounts for about 1% of all the steel produced annually in the world, already is in short supply for electric vehicles, executives said. Companies expect demand to accelerate faster than production as EV volumes expand in the coming years.

“It’s in limited supply and with very long lead times. Sometimes 50 or 52 weeks,” said Hale Foote, owner of Scandic Springs Inc., a San Leandro, Calif., company that uses high-grade electrical steel to make parts for scientific measurement devices.

. . .

More than 80% of the electrical steel produced comes from China, Japan and South Korea, all countries that are subject to U.S. tariffs or quotas on steel imports, industry analysts said.

. . .

(p. B2) “It takes intense focus. You have to have absolute consistency or you scrap the material,” said David Stickler, who led the investment group that built Big River Steel in Osceola, Ark., and then sold the mill to U.S. Steel in 2021. Mr. Stickler said he envisioned electrical steel being a core product at Big River when he started planning the mill nearly a decade ago.

. . .

Steel-industry executives said that creating more domestic capacity to make electrical steel for vehicles will likely take years, as steel companies acquire equipment and become proficient at the exacting production process.

“You can’t just buy the equipment and start making electrical steel. Those who’ve made the investment will have an advantage for the next five to 10 years,” Mr. Stickler said.

For the full story, see:

Tita, Bob. “Paper-Thin Steel Used to Power EVs Is in Short Supply.” The Wall Street Journal (Tuesday, March 28, 2023): B1-B2.

(Note: ellipses added. The online version is longer, but the passages quoted above appear in both versions.)

(Note: the online version of the story has the date March 27, 2023, and has the title “The Paper-Thin Steel Needed to Power Electric Cars Is in Short Supply.”)

Lockdowns in China Move Atlas to Shrug

(p. A1) By the usual measures, Loretta Liu had it made. She graduated in 2018 from one of China’s top universities, rented an apartment in the glamorous city of Shenzhen, and had been hired as a visual designer at a series of high-flying companies, even as youth unemployment in China was reaching record highs.

Then, last year, she quit. She now works as a groomer at a chain pet store, for one-fifth of her previous salary. She spends hours on her feet, wearing a uniform in place of her once carefully selected outfits.

And she is delighted.

“I was tired of living like that. I didn’t feel like I was getting anything from the work,” Ms. Liu said of her previous job, where she said she had little creative freedom, often worked overtime, and felt her mental and physical health deteriorating. “So I thought, there’s no need anymore.”

Ms. Liu is part of a phenomenon attracting growing attention in China: young people trading high-pressure, prestigious white-collar jobs for manual labor. The scale of the trend is hard to measure, but widely shared social media posts have documented a tech worker becoming a grocery store cashier; an accountant peddling street sausages; a content manager delivering takeout. On Xiaohongshu, an Instagram-like app, the hashtag “My first experience with physical labor” has more than 28 million views.

. . .

Around the world, the coronavirus pandemic spurred people to reassess the value of their work — see the “Great Resignation” in the United States. But in China, the forces fueling the disillusionment of young people are particularly intense. Long working hours and domineering managers are common. The economy is slowing, dimming the prospect of upward mobility for a generation that has known only explosive growth.

And then there were China’s three years of “zero Covid” restrictions, which forced many to endure prolonged lockdowns, layoffs and the realization of how little control their hard work gave them over their futures.

“Emotionally, everyone probably can’t bear it anymore, because during the pandemic we saw many unfair and strange things, like being locked up,” Ms. Liu said.

. . .

When Yolanda Jiang, 24, resigned last summer from her architectural design job in Shenzhen, after being asked to work 30 days straight, she hoped to find another office job. It was only after three months of unsuccessful searching, her savings dwindling, that she took a job as a security guard in a university residential complex.

At first, she was embarrassed to tell her family or friends, but she grew to appreciate the role. Her 12-hour shifts, though long, were leisurely. She got off work on time. The job came with free dormitory housing. Her salary of about $870 a month was even about 20 percent higher than her take-home pay before — a symptom of how the glut of college graduates has started to flatten wages for that group.

But Ms. Jiang said her ultimate goal is still to return to an office, where she hoped to find more intellectual challenges. She had been taking advantage of the slow pace at her security job to study English, which she hoped would help her land her next role, perhaps at a foreign trade company.

“I’m not actually lying flat,” Ms. Jiang said. “I’m treating this as a time to rest, transition, learn, charge my batteries and think about the direction of my life.”

For the full story, see:

Vivian Wang and Zixu Wang. “In China, Young Workers Ditch Prestige Jobs for Manual Gigs.” The New York Times (Tuesday, April 11, 2023): A1 & A11.

(Note: bracketed year added.]

(Note: the online version of the story has the same date as the print version, and has the title “In China, Young People Ditch Prestige Jobs for Manual Labor.”)

The title of this blog entry alludes to Ayn Rand’s novel:

Rand, Ayn. Atlas Shrugged. New York: Random House, 1957.