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Survey Found Close to 50 Percent of European Companies with Operations in China Feel Business Environment Is Getting Worse

Voice of America (VOA) reported on the results of a survey conducted on 532 European companies that are members of the European Union Chamber of Commerce in China. The survey found that European companies with operations in China are dealing with a difficult business environment. Close to 50 percent of the companies that took the survey said that the environment has gotten worse in the past year; 20 percent of the companies said that they were the victim of forced technology transfer; close to 50 percent of the companies believed that the trade barriers in China will get worse over the next five years; and 25 percent of the companies believed that they would never see China’s market “open in any significant way.” The areas that these companies complained about the most include the uncertain legal environment, higher labor costs, and regulatory problems, as well as the “Great Firewall.” According to the article, some companies felt that China didn’t make progress in certain areas but rather it had taken a step backward. The examples were the introduction of the new Internet Security Law which forced these companies to spend more money on company registration fees, as well as using a low efficiency VPN system. The VOA article quoted a statement that the President of the European Union Chamber of Commerce in China made. He said that the trade tension between China and the U.S. resulted from China because it is not fully open and hasn’t carry out the speedy reform that it had promised. … China claims that it is the leader in globalization but its Internet Security Law is creating problems for these foreign companies.

Source: Voice of America, June 20, 2018

LTN: Chinese Diplomat Threatened Australian Media to Get It to Cancel a Program

Taiwan Liberty Times reported that Kirsty Thomson, the producer of 60 Minutes on Australian Channel 9 received a phone call from Cao Saixian, the head of the Media Affairs Department at the Chinese Embassy in Canberra. Cao claimed that 60 minutes illegally filmed footage and threatened that it could not air one segment that covered China’s expansion in the South Pacific Ocean. “Take this down and take it to your leaders! … You will listen! There must be no more misconduct in the future!” Cao yelled over the phone. Thomson countered that the footage was taken in the public region using a drone and stated that the program would still be aired on June 18 and 19 as planned. According to the article, 60 Minutes has produced a number of programs that covered China’s “debt trap diplomacy” in the Pacific region and how it was expanding its influence through offering assistance in the areas of infrastructure and agriculture in countries such as Fiji, Tonga, and Vanuatu. The program focused mainly on China’s plans in Vanuatu, including attempts to build a military base in Vanuatu. The program previously revealed that China’s satellite monitoring ship, disguised as a fishing boat, tried to approach the Australian Adelaide warship in the port of Suva in Fiji. The article reported that the way that Cai approached the mainstream English media was done in a very unusual way. China’s Ministry of Foreign Affairs must have given the direction in order to warn other media not to offend China.

Source: Taiwan Liberty Times, June 22, 2018

Alibaba Chairman Jack Ma Expressed Concern about the Economic Outlook

Well-known Chinese news site Tencent News recently reported that, not long ago, Alibaba Group (NYSE: BABA) Chairman Jack Ma delivered a speech at the Conference of the Zhejiang Chamber of Commerce. Ma advised people that they should have a good understanding of the economy; he felt that the “good days are numbered” for China’s manufacturing industry. Ma warned that, over the next 20 years, people should not expect any fundamental improvement in the China-U.S. relationship and that there may be some ups and downs. The United States has taken China on as a strategic competitor rather than a partner. The Western culture emphasizes competition. During the Shanghai Import Expo, the Chinese government mentioned a plan that would involve imports valued at US$24 trillion over the next 15 years. Ma pointed out that this will have a major disruptive impact across the entire Chinese manufacturing landscape, especially in consumer products. The Alibaba Group is a Chinese multinational e-commerce, retail, Internet, AI and technology conglomerate. When it went public, it was the world’s largest IPO. As of March 2018, Jack Ma is one of China’s richest men with a net worth of US$42.7 billion.

Source: Tencent News, June 14, 2018

LTN: Chinese Official Media Downplayed the Singapore Summit

Major Taiwanese news network Liberty Times Network (LTN) recently reported that the Chinese media heavily downplayed the global focal point – the Singapore Summit between U.S. President Donald Trump and North Korean leader Kim Jong-un. The official Chinese newspaper People’s Daily did not even publish a photo on its official website. There was no report of the news on the front page other than a link on the right side that led to a short report. The historic event of the Singapore Summit attracted over 2,000 journalists from around the world to spread the news. The paper version of the People’s Daily also had only a short article with no photo. The short report provided a brief idea of the agreement between the U.S. and North Korea, but there was no mention of the responses from different countries in the world. People’s Daily is the biggest newspaper group in China. It is the primary official newspaper of the Chinese Communist Party and provides direct information on the policies and viewpoints of the Party. It is very obvious the Chinese leadership had no interest in giving Trump or Kim much credit for improving the situation on the Korean Peninsula.

Source: Liberty Times Network, June 13, 2018

RFI: North Korean Media Described Kim Jong-un as a Supreme World Leader

Radio France International (RFI) Chinese recently reported that North Korean media swiftly and massively covered the story of the historic Singapore Summit immediately after its completion. The media described North Korean leader Kim Jong-un as a supreme world leader who even U.S. President Donald Trump admires greatly. When Kim was walking along the Gardens by the Bay in Singapore, the streets were filled with people praising him. The 40-minute North Korean Central Television program suggested that President Trump showed Kim the presidential ride (nick-named the Beast) to express his “infinite admiration” towards Kim. The general tone that the North Korean media pushed hard was that Kim has successfully led the advancement of the global political forces with his extraordinary political wisdom. Some international political critics expressed their belief that President Trump was a bit too generous to the North Korean dictatorship, which has a long-standing record of human rights abuse.

Source: RFI Chinese, June 15, 2018

China Securities Regulatory Commission to Include “Party Development Work” into Corporate Articles of Publicly Traded Companies

On June 15, the China Securities Regulatory Commission published a revision to the existing “Corporate Governance of Public Traded Companies” and solicited public opinion to be submitted for a period of one month. Described as “important content on the Corporate Governance for companies with Chinese Characteristics,” the revised governance required that publicly traded companies “strengthen the efforts to develop the party” and include the requirement that relevant party development work be included in the company’s articles of incorporation. According to a Financial Times report, over 30 State Owned Companies worth a total of US$1.15 trillion revised their corporate article last year to “place the Party at the central position of the company.” A Voice of America (VOA) article reported that, shortly after China’s accession to the WTO in 2001, the Communist Party’s control was formally introduced into the private sector. The official China Daily reported last year that nearly 70% of China’s approximately 1.86 million private companies have party organizations. In the past decade, party branches have been established in more and more foreign companies in China. The VOA article further quoted the comments from two Chinese scholars who stated that Chinese leaders don’t have a clear idea of where China’s economy is headed. On the one hand, Xi Jinping wants to promote the ideology from Mao’s era and let the party lead everything; on the other hand he wants to maintain China’s current economic status with the hope that state-owned enterprises will become bigger and stronger. The private sector, the most vigorous component of China’s economy, is gradually dying. Many private companies have been transferring their assets overseas but some of the top names like Wang Jianling, Guo Guangchang, Xiao Jianhua and Wang Xiaohui ended up being arrested and their money was confiscated. Therefore, according to one economist that the VOA quoted, “party development” work will not improve the financial challenges that SOEs face; nor will it become a “protection umbrella” for private business owners.

1. Voice of America, June 15, 2018
2. China Securities Regulatory Commission, June 15, 2018

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