China is the latest country to be affected by the global energy disruptions that followed Russia’s invasion of Ukraine. But after spending on costly “zero Covid” measures, local governments have few resources to to buy expensive natural gas.

According to news agencies, China’s national government has told local governments to provide heat, but it has not given them money to pay for it. Mass-testing campaigns in the final days of “zero Covid” drained their coffers. As a result, provincial and municipal governments have reduced customary subsidies for natural gas, which used to keep a lid on heating bills.

Now, gas is effectively being rationed, with households receiving the minimum needed for cooking food but very little for heat. Tens of millions of people are angry, and their frustration has spilled over to social media. “Nothing seems to be working, partly because nobody seems to have much cash,” one expert said.

China, like Europe, has long relied on Russia for some of its gas. But Europe has had an unusually warm winter, which has pushed gas prices lower there and helped countries get through the squeeze. In China, by contrast, unusually bitter temperatures have pushed gas prices higher. Climate change may usher in an era of trade wars.

It’s in the best interest of the U.S. to help China develop new treatments to blunt Covid’s spread, Michael V. Callahan, an expart argues.

The Justice Department is investigating the surveillance of American journalists by TikTok’s Chinese owners, a person familiar with the matter said, a revelation that comes as the Biden administration has shifted toward a tougher approach to address the perceived security threat from the video-sharing app.

ByteDance General Counsel Erich Andersen at the time described the improper access of user data as “a misguided plan” that looked at the IP addresses of the journalists “to determine whether they were in the same location as the employees suspected of leaking confidential information.” He said the reporters worked for BuzzFeed and the Financial Times.

The Justice Department, FBI and federal prosecutors in Virginia are investigating, one of the people said.

ByteDance Friday said it “strongly condemned” the actions of the employees involved in the effort, who it said were no longer at the company. “Our internal investigation is still ongoing, and we will cooperate with any official investigations when brought to us,” the company said.

In response to the company’s December findings, TikTok has said it was restructuring its Internal Audit and Risk Control department, and removed all user data access and permissions for the department.

Confirmation of the federal probe comes as the Biden administration has demanded that Tiktok’s Chinese owners sell their stakes in the app or face a possible U.S. ban of the social media service, The Wall Street Journal reported. That represented a major shift in policy on the part of the Biden administration, which has been under fire from some Republicans—who say it hasn’t taken a tough enough stance to address national security concerns related to TikTok. The Justice Department investigation was reported earlier by Forbes, which documented the improper access of user data in October.

TikTok’s chief executive Shou Zi Chew has said that divesting the company from its Chinese owners doesn’t offer any more protection than a multibillion-dollar plan the company has already proposed. That plan involves hiring an American partner, Oracle Corp., to store American users’ data and safeguard against any Chinese influence over what videos Americans view on the app. He is scheduled to testify on Capitol Hill next week.

The federal investigation began after the Beijing-based ByteDance Ltd. in December acknowledged that its employees misused their authority to access the data of journalists in an effort to identify leaks of confidential company information.

The Committee on Foreign Investment in the U.S., or Cfius—a multiagency federal task force that oversees national-security risks in cross-border investments—made the sale demand recently, people familiar with the matter said.

TikTok executives have said that 60% of ByteDance shares are owned by global investors, 20% by employees and 20% by its founders, though the founders’ shares carry outsize voting rights, as is common with tech companies. The company was founded in Beijing in 2012 by Zhang Yiming, ByteDance Chief Executive Liang Rubo and others.

TikTok has been engulfed in controversy for more than two years over concerns from U.S. lawmakers, regulators and officials in the Trump and Biden administrations about national security risks related to data use and storage for TikTok. The company has sought to resolve the issue by taking steps to separate itself structurally from its parent company, as well as through promises to store U.S. data within the country.

The app has emerged as a favorite among American teenagers and young adults but has also drawn scrutiny due to concerns that it could be used to collect data on Americans—or that it could control the messages its users receive to influence domestic and international events.

Source: WSJ

China’s ruling Communist Party will set up a social work department under its powerful Central Committee, a move aimed at tightening control over non-public sectors and grass-roots organs.

The department will “coordinate and guide” the handling of petitions from the public and the soliciting of public opinion, according to a reform plan for party and state institutions released by the Central Committee and the State Council, China’s cabinet, on Thursday.

It will also “lead” the work of industry federations and improve the governance of grass-roots communities in urban and rural areas.

Grass-roots officials have come under fire in the past three years for not fully implementing central government policies and failing to meet people’s demands during the controversial zero-Covid response.

The new department is part of a broad overhaul aimed at strengthening the party’s grip over finance, science and technology, Hong Kong and Macau affairs as well as social work – areas the top leadership sees as crucial for China’s security and stability amid intensifying rivalry with the United States and an economic slowdown.

The plan was approved at a key party meeting last month, with the reform of state institutions under the cabinet passed by the national legislature during its annual session last week.

According to the plan, the new social work department will “improve party-building” in non-public sectors including private companies and foreign firms, industry federations and volunteer organisations.

While China’s economy is dominated by the state sector, the private sector contributes more than 50 per cent of the country’s annual tax revenue, more than 80 per cent of urban employment and has accounted for more than 90 per cent of market entities in recent years, official data show.

According to Neil Thomas, a fellow at the Asia Society Policy Institute’s Centre for China Analysis, the new social work department “turbocharges Xi [Jinping]’s existing efforts to enhance the party’s influence in private firms, industry associations and civil society, as well as extending these efforts to the gig economy and online influencers”.

Thomas said the department might “push these firms to either establish party committees or to give more influence to existing party committees”.

“Widespread protests against Covid curbs last November could have encouraged Xi’s decision to create a social work department,” he said.

“The new institution is designed to strengthen the party leadership’s oversight of citizen complaints, which last year could have helped Xi to defuse the protest movement either by cracking down earlier on souring public opinion or by accelerated loosening of Covid controls.”

China made an abrupt decision to scrap its tough pandemic restrictions in December after three years of mass testing and lockdowns. A fresh wave of the virus swept the country after the exit from zero-Covid, which came with no timetable or road map and caught many by surprise.

It followed rare protests in major cities calling for an end to the harsh controls, with demonstrators holding up blank sheets of paper to express their anger and some even calling for regime change.

As part of the overhaul, China will elevate the National Public Complaints and Proposals Administration – through which the public can air grievances – to make it directly affiliated to the cabinet instead of being supervised by its general office.

Under the reform plan, institutional restructuring at the central level is to be completed before the end of the year, while changes at the local level are to be made by the end of 2024.

Source: SCMP

At the annual gathering of China’s national legislature, which concluded Monday, Xi introduced a series of sweeping changes to the country’s regulatory framework, allowing the party’s top leaders to assert more direct control over financial policy and bank regulation. Appointments for allies of Xi to key regulatory roles and additional shake-ups are expected in the coming days, further cementing the party’s oversight of the financial system.

“It’s very consistent with what Xi Jinping has been rolling out over the past 10 years,” said Max Zenglein, chief economist at the Mercator Institute for China Studies in Berlin. “Whenever he’s confronted with a problem, the solution is greater centralisation to the party.”

The moves were the latest evidence of how Xi continues to reshape China’s business climate, steering the world’s second-largest economy away from the free-market policies that underpinned its ascent. While past Chinese leaders sought to maintain a buffer between the party and the private sector, Xi has erased those lines and made clear that businesses are there to advance the party’s agenda.

Xi underscored that message on March 6 when he declared that the party had always regarded the private sector as “our own people” and that while it had a responsibility to support businesses in difficult times, it also needed to “offer guidance” in times of confusion.

With the economy growing near its slowest pace in decades, it is essential to Xi that the financial sector comply with his vision. He needs bankers to allocate capital in the ways that China wants its money spent and prevent domestic funds from moving overseas, while exercising caution to avoid overextending loans and jeopardising the financial system.

In what appeared to be a precursor to the structural changes in the financial regulatory bureaucracy, China’s top anti-graft watchdog also published a not-so-veiled warning to bankers last month. It said it would “seriously investigate and deal with the people who neglect the party’s leadership in financial work and state-owned enterprises.”

Echoing the message of “common prosperity,” one of Xi’s hallmark slogans to narrow the wealth gap in Chinese society, the watchdog said bankers should embrace the party’s values and avoid the ideologies of the “financial elite.” The group said bankers should not emulate the West with its singular focus on money.

Heads are already starting to roll. Bao Fan, a prominent investment banker and chief executive of China Renaissance Holdings, vanished last month. After initially saying that it was unable to contact Bao, China Renaissance said it had learned that the banker was cooperating with an investigation being carried out by certain Chinese authorities.

Bao Fan, a prominent investment banker and chief executive of China Renaissance Holdings, vanished last month. The company has said it had learned that the banker was cooperating with an investigation being carried out by certain Chinese authorities.

Last month, China’s top prosecutor charged Tian Huiyu, the former president of China Merchants Bank, one of the country’s biggest commercial lenders, with abuse of power and insider trading. When he was expelled from the Communist Party in October, the party said in a statement that Tian had led “a corrupted life with loose morals” for accepting lavish gifts as well as invitations for banquets, travel and golf.

The pointed rhetoric, targeted oversight and crackdowns on high-profile figures are reminiscent of China’s so-called rectification campaign of the past few years in the technology sector. This resulted in huge fines, the upending of business strategies and tycoons driven underground.

But unlike the technology industry, which had been flying high and amassing greater influence in society, the financial sector is under tremendous pressure partially because of the shaky balance sheets of local governments and the banks that lend to them. ANZ Research estimates that Chinese local government debts have grown 16 per cent annually over the past five years.

After three years of footing the bill for China’s strict “zero COVID” policy of constant testing, local government finances are depleted, a situation worsened by a property market collapse that has diminished a once-reliable revenue stream from leasing state-owned land to real estate developers.

On Friday, China’s legislature, known as the National People’s Congress, approved a proposal to create a new regulatory body called the State Bureau of Financial Supervision and Administration to oversee China’s 400 trillion yuan, or $US57 billion ($85.3 billion), financial system. The new entity was formed out of China’s existing banking and insurance regulatory commission, and it will absorb some roles played by other agencies including the central bank and the securities regulator.

Darrell Duffie, a professor of management and finance at Stanford University and a close watcher of China, said the changes are consistent with how China turns to additional regulation to redress past mistakes. In this case, he said, it wanted to correct the “excess financial exuberance” that has caused dozens of real estate developers to default on loans and left the sector awash in debt.

It is a delicate dance, Zhaopeng Xing, senior China strategist at ANZ Research, wrote in a report, because the authorities need to make sure that banks and companies don’t binge on risky loans, while not suffocating the economy, because credit “remains the most important driver of growth.”

Analysts say this latest campaign to clean up the financial sector is also rooted in growing concern about the adequacy of the country’s financial regulation, which had been called into question in recent years by a series of missteps and scandals that tested the party’s ability to maintain order.

“Whenever he’s confronted with a problem, the solution is greater centralisation to the party.”

Peer-to-peer lending initially took off in China around 2014 without much oversight until a series of defaults and scandals unleashed a wave of protests that forced the government to shut down the sector several years later. Last year, demonstrations erupted when depositors in rural banks in Henan province in central China said the institutions froze their savings accounts and refused to let them withdraw their money.

Lu Ting, chief China economist at Nomura, a Japanese brokerage, said some of these changes were long overdue because “many problems” emerged in recent years reflecting the challenge of local governments supervising the financial institutions that they rely on.

In addition to the new government financial regulator, the Communist Party is expected to resurrect a policy-setting committee that will report directly to top leadership. The Central Financial Works Commission was formed in 1998 after the Asian financial crisis so that party leaders could play a role in regulation. It was disbanded five years later when China established a banking regulator.

In the reincarnation, the commission is expected to work closely with the new regulator, and it will be headed by a member of the Politburo Standing Committee, the inner circle of power in Chinese politics comprising mostly Xi loyalists and the party’s top leaders who oversee the day-to-day running of the country. Bloomberg earlier reported the revival of the committee.

The revamp confirms what many in China already know. Whether it is politics, the military or the economy, all roads lead to Xi. On Friday, the 2,952 delegates of the national legislature endorsed Xi for a rare third term as president. There was not a single dissenting vote.

Source: The Age

Global recognition for the struggle of the Uyghur peoples in China has come by way of nomination of the Germany-based World Uyghur Congress (WUC), for the 2023 Nobel Peace Prize. Lawmakers in Canada and a leader of the Young Liberals in Norway, the youth wing of Norway’s Venstre political party, have nominated the WUC. The rights group has been nominated for its work towards peace, democracy and plight of the Uyghur and other Turkic people who live under, what the nomination letter describes as a “repressive regime in China.” The Voice of America (VoA) reports that “The World Uyghur Congress has the main purpose of promoting democracy, human rights, and freedom for the Uyghur People and supporting the use of peaceful, non- violent, and democratic means to help the Uyghurs achieve self- determination.”

Alexis Brunelle-Duceppe, one of two Canadian Members of Parliament who nominated the WUC, shared the nomination letter with VoA, which says the WUC had drawn global attention to China’s treatment of Uyghurs with “the overwhelming campaign of physical, religious, linguistic, and cultural repression” by the Chinese government. China has repeatedly denied mistreating the Uyghur peoples, with Xinhua describing the allegations as “lies” concocted by “anti-China forces in the West.” In a June 2021 article, the state owned media paper claimed that “Xinjiang-related issues are not about human rights, ethnicity or religion at all, but about combating violent terrorism and separatism,” and that the region has experienced economic and social development. Last August, the UN Human Rights office released a report on Xinjiang, which stated that the Chinese government’s treatment of Uyghur and other Muslim minorities in so-called vocational education and training centres could constitute crimes against humanity. The United States and several other countries have classified human rights abuses in the region as genocide.

Meanwhile, Volker Türk the new chief of the Office of the High Commissioner of Human Rights (OHCHR) said his agency had documented China’s arbitrary detention of Uyghurs and the separation of children from their families. Making these comments during a global update on human rights (8 March 2023) in Geneva, Turk said his office had opened channels of communication with various actors to follow up on human rights issues in China, including the protection of minorities such as Uyghur, Tibetans and other groups. He said, “In the Xinjiang region, my office has documented grave concerns, notably large-scale arbitrary detentions and ongoing family separations and has made important recommendations that require concrete follow-up.” The UN and several Western governments have remained steadfast in condemning China over its harsh policies affecting Uyghur, and Tibetans. Türk’s comments come nearly three weeks after the UN Commission on Economic, Social and Cultural Rights, or UNCESCR, grilled 40 Chinese delegates about the human rights situations in Hong Kong, Tibet and Xinjiang, the far-western autonomous region in China where more than 11 million of the predominantly Muslim Uyghur people live.

Notably, several Western parliaments have declared the Chinese government’s actions against Uyghur and other Turkic minorities in Xinjiang as constituting genocide and crimes against humanity. During an address to the 47-member UN Human Rights Council (2 March 2023), US Secretary of State Antony Blinken, cited the report by the OHCHR and said “We remain gravely concerned about the ongoing genocide and crimes against humanity that China is committing against Muslim Uyghurs and other members of minority groups in Xinjiang,” he said. He added that the OHCHR report on Xinjiang “affirmed serious abuses perpetrated by the People’s Republic of China in Xinjiang, including the large-scale arbitrary deprivation of liberty of members of Uyghur and other predominantly Muslim communities, and credible allegations of torture and sexual and gender-based violence.”

Zumretay Arkin, WUC advocacy manager told VoA, “The fact that the WUC was nominated for the Nobel Peace Prize is proof that the free and democratic world has recognized the WUC’s work as valuable and important. Instead of defaming such organizations, the Chinese government should listen to the democratic world,” Arkin said. The WUC, founded in Munich in 2004, has a wide range of activities, including campaigning for the rights of people being forcefully disappeared, advocating for the release of political prisoners, protecting the rights of asylum seekers to prevent forcible repatriation to China, and advocating at the UN, EU, and national level. The nomination letter states that efforts of the WUC has led to the international community developing policies and actions to help secure the rights of the Uyghur.

The WUC was founded after the East Turkistan National Congress and the World Uyghur Youth Congress merged into one organization and its main objective is to promote democracy, human rights, and freedom for the Uyghur people and to use peaceful, non-violent, and democratic means to determine their political future. The group’s mission statement states that “By representing the sole legitimate organization of the Uyghur people both in East Turkistan and abroad, WUC endeavours to set out a course for the peaceful settlement of the East Turkistan Question through dialogue and negotiation.

East Turkistan is the name some Uyghur prefer to use instead of Xinjiang, which means “new territory” in Chinese and is what China calls the Uyghur homeland. “It makes me very proud to see that the World Uyghur Congress’ hard work to end the Uyghur genocide has not gone unnoticed,” Dolkun Isa, the President of the WUC, said in a press statement. The nomination was also significant because it was “a show of support for the Uyghur people,” Isa said. The nomination of the WUC is thus a clear sign that the voice of Uyghur is being heard across the world. There is no doubt that WUC deserves the prize much more than the sham nomination of Prime Minister Erdogan of Turkey!

Source: Geneva Daily