The Party takes control of the financial sector

Editor-in-Chief

The Central Financial Work Conference, a key financial policy meeting chaired by Xí Jìnpíng 习近平, concluded yesterday in Beijing.

• A key aim of the meeting was to resolve financial risks, notably the ongoing property crisis and local government debt.
• The conference was the first big economy-focused gathering since Beijing unveiled a series of ministerial reforms in March 2023.

The conference signaled the Party’s central leadership over the financial sector. The official report on the conference emphasized that the party-state should “eliminate supervision gaps and blind spots, strictly enforce the law, dare to brandish the sword (敢于亮剑 gǎnyú liàngjiàn), and severely crack down on illegal financial activities.”

• Acknowledging the problems facing the financial sector, the report mentions “many hidden dangers in economic and financial risks,” and outlines a number of specific “risk prevention and control” measures.
• The measures include establishing a government debt management mechanism and improving the supervision system of real estate enterprises.

Click here for details.

Barry van Wyk

The U.S. confirmed the Biden-Xi meeting in November during a press briefing yesterday, although White House press secretary Karine Jean-Pierre seemed to have revealed the announcement by accident.

China’s Foreign Ministry today said the two sides had agreed “in principle” to work toward a meeting between Chinese President Xí Jìnpíng 习近平 and his U.S. counterpart Joe Biden on the sidelines of the Asia Pacific Economic Cooperation forum in San Francisco. Previously, both American and Chinese officials have stated that the two countries were working toward such a meeting.

China deployed its biggest flotilla of research vessels to the Antarctic, its 40th scientific expedition team to the world’s largest continent. Two Chinese icebreaker research vessels and a cargo ship set sail this morning with more than 460 personnel on board to conduct climate change studies and help complete construction of China’s fifth Antarctic outpost, which is expected to include the latest addition of China’s satellite ground stations in the region.

Japanese and Chinese coast guard ships faced off again in the East China Sea near contested islands on October 30, the latest flare-up in their decades-long territorial dispute. Both countries said they deployed patrol ships to urge the other side to leave the territory around a chain of uninhabited islands which China calls the Diaoyu Islands (钓鱼岛 Diàoyú dǎo), but which are known as the Senkaku Islands in Japan.

Taiwan detected 43 Chinese aircraft and seven of its vessels around the island in the last 24 hours, with 37 of the aircraft crossing the median line of the Taiwan Strait and entered Taiwan’s southwest and southeast ADIZ, Taiwan’s Defense Ministry said today.

Weibo, WeChat, and other major Chinese social media apps are telling their most popular content creators to display their real names on their posts and their profiles, in the latest move to regulate online information.

Meanwhile, the Treasury Board of Canada announced a WeChat ban on government devices as of October 30, saying the Chinese super-app posed “an unacceptable level of risk to privacy and security.” It also banned Russia-based cybersecurity company Kaspersky from government-issued mobile devices.

Chinese state media: Traditional Chinese Communist Party newspapers are laid out with two places for important stories: the “newspaper eye” (报眼 bào yǎn), which is a little box at the top right of the front page, and the main story which is usually top left with a headline in large type.

Today’s People’s Daily tells a story: The newspaper eye is a brief note about the cremation of former premier Lǐ Kèqiáng 李克强 that will take place on November 2. But the the top story with a prominent headline, three introductory paragraphs in red text, and a photograph of Xí Jìnpíng 习近平, is about the Central Financial Work Conference that took place in Beijing October 30 and 31. The subtitle notes that Xi and premier Lǐ Qiáng 李强 delivered “important speeches” and names the other five members of the Politburo Standing Committee as attendees.

• Yung’s story begins with the Western education he received while in China. He eventually studied at a Massachusetts boarding school, and then Yale.
• He was still a student at Yale when he took the oath that made him a naturalized U.S. citizen: part of a career that saw him become an instrumental figure in the history of U.S.-China relations.

It was never easy for him in his natural or adopted home. His Chinese colleagues were unimpressed by his credentials (and he had been educated entirely in English), but racism undermined his status with Westerners.

• Yung Wing worked as a diplomat for the Qing empire, helping to negotiate the end of the 1895 Sino-Japanese War, but his politics soon made him persona non grata in China. The Qing government eventually placed a price on his head.
• Even though Yung had American citizenship, he was initially denied entry to the U.S. (to attend his son’s graduation from Yale), with authorities citing the Chinese Exclusion Act.

Yung’s story is one about the difficulties of U.S.-China relations, writes James Carter — but also the importance of fighting through.

James Carter

Below are links from our NewsBase to other noteworthy reports published in the last 24 hours from and about China.

BUSINESS AND TECHNOLOGY:

U.S.-China tech war
Opinion: U.S. hurts own industry as chip war against China seen to fail / SCMP (paywall)
Alex Lo writes: “Markets no longer have priority over national security, and economic interdependence with Beijing is considered a threat at the very least.”
Nvidia’s $5 billion of China orders in limbo after latest U.S. curbs / WSJ (paywall)
“Tech company had been pushing to make chip shipments for next year before new restrictions came into effect.”
China’s semiconductor state fund invests $2 billion in memory chip firm / Reuters
“China’s state-backed chip investment fund has invested 14.56 billion yuan ($1.99 billion) in a memory chip company called Changxin Xinqiao, records showed.”

U.S. wants to ban purchases of Chinese drones
House panel seeks ban on U.S. government purchases of Chinese drones / FT (paywall)
“The House of Representatives China committee will introduce a bill on Wednesday that would ban the U.S. government from buying Chinese drones, in a bid to bolster a Senate push after past efforts were derailed by lobbying.”

Cryptocurrencies
Hong Kong’s HashKey launches first crypto trading app for retail investors, gives away new token / SCMP (paywall)
“Hong Kong cryptocurrency firm HashKey Group, one of two virtual asset exchanges in the city approved to serve retail investors, has launched the first trading app to get approval from the Securities and Futures Commission (SFC) since the JPEX scandal rocked the local industry.”

China’s financial work conference concludes
China concludes sixth top financial meeting to tackle new challenges / Caixin (paywall)
“China held its twice-a-decade central financial work conference Monday and Tuesday, assessing the current crisis in the financial sector and setting priorities for financial work in the next five years.”

Supply chains
Clothing makers find it hard to break with China’s supply chain / Bloomberg (paywall)
“From Adidas AG to Nike Inc., apparel and footwear makers have been shifting their supply chains out of China, pushed by geopolitical tensions and pulled by lower manufacturing costs.”

Gold
China firm launches stock indices to tap into rush for safe-haven gold / Reuters
“China’s biggest index provider launched on Wednesday two gold-linked stock indices to cash in on surging demand for exposure to the safe-haven metal amid a slump in the local real estate market and volatile global markets.”

China’s migrant workers
They propelled China’s rise. Now they have nothing to fall back on. / NYT (paywall)
“Migrant workers, who moved from China’s villages to its big cities, were a secret weapon building the economy. Now many see few options.”

AI
Chinese AI scientists call for stronger regulation ahead of landmark summit / FT (paywall)
“Chinese artificial intelligence scientists have joined western academics to call for tighter controls on the technology than those being proposed by the U.K., U.S. and EU, as nations set out rival positions ahead of this week’s global AI safety summit.”
U.S., China and 26 other nations agree to co-operate over AI development / FT (paywall)
“Signatories at inaugural U.K. summit pledge in ‘Bletchley Declaration’ to ensure the technology is developed in ‘human-centric’ way.”
Chinese tech companies delve into robotics, eyeing link to AI / Nikkei Asia (paywall)
“Chinese companies in a range of high-tech fields are branching out into robotics, looking to tie it into artificial intelligence research as higher-performance components and sensors enable more sophisticated control.”
The opportunities and roadblocks facing China’s AI models / Caixin (paywall)
“Since Beijing lifted the floodgates for Chinese firms to launch their artificial intelligence (AI) services, the momentum for homegrown large language models (LLMs) offerings has accelerated, with the number of releases this year surpassing that of U.S. counterparts.”

Moutai
Moutai shares jump after Chinese liquor maker raises prices / FT (paywall)
“Shares in Kweichow Moutai, one of China’s most valuable businesses and whose premium spirit is sold for about $200 a half-liter bottle, jumped 6% on Wednesday after it raised distributor prices for the first time in six years.”

Apple
Apple’s holiday-quarter forecast faces threat from Huawei, weak China market / Reuters
“Apple investors will have one big question when the world’s most valuable company reports earnings on Thursday — will Huawei’s resurgence in China dampen its holiday-quarter expectations?”

Real estate and property development
China’s property developers cut prices — and homeowners are resisting / WSJ (paywall)
“After being stuck in a housing downturn for two years, cities across China are giving real-estate developers the go-ahead to cut prices on new homes to revive sales. They are quickly running into resistance from homeowners who don’t want to see the values of their properties go down.”

SCIENCE, HEALTH, AND ENVIRONMENT:

HIV/AIDS
Number of people living with HIV/AIDS in China keeps rising / Caixin (paywall)
“The share of people living with HIV/AIDS in China soared nearly eightyfold from 2002 to 2021, far outpacing the rise in the rates for reported cases and deaths from the disease, government media reported.”

Pollution
Haze lingers in Beijing as fog blankets parts of north China / Reuters
“Hazy weather hung over Beijing on Wednesday with conditions in other parts of north China possibly worsening, forecasters said, although cold air sweeping in from the northwest is expected to help dissipate the smog.”
Smog chokes Beijing, Tianjin / Caixin (paywall)
China loosens carbon rules to ensure winter power demand is met / Caixin (paywall)
“China has loosened the rules governing its carbon market after prices rose to a record, to make it easier for power generators to meet rising winter demand.”

Fossils
Gigantic ‘water vampire’ fossils found in northern China / SCMP (paywall)
“Scientists have found two unusually large prehistoric lampreys in northern China that have helped provide clues about the history of a species that has been around for more than 360 million years.”

POLITICS AND FOREIGN AFFAIRS:

The Communist Party, elite politics, and government
China’s wave of ministry-level leadership shakeups rolls on in October / Caixin (paywall)
“Seven out of the 26 ministry-level departments of China’s State Council have experienced a reshuffle of top officials since March, when the country elected a new slate of cabinet members, with four of the adjustments taking place in October alone.”

China’s climate envoy is stepping down
China’s veteran climate envoy Xie to step down in December / Reuters
“China’s veteran climate change envoy, Xiè Zhènhuá 解振华, is set to retire in December at the end of this year’s COP28 climate talks in Dubai, a government official familiar with the situation confirmed on Wednesday.”

Xinjiang
China turning U.S.-sanctioned Xinjiang into a free-trade hub, strengthening geopolitical edge in region / SCMP (paywall)
“A newly unveiled free-trade hub in the Xinjiang Uygur autonomous region will put the focus on ‘innovative’ and ‘labor-intensive’ manufacturing industries, as Chinese leaders look to turn the U.S.-sanctioned region into an export gateway to Central Asia, South Asia and Europe.”

Hong Kong
Chinese arrivals replace Hong Kong exodus. For them, the city is still freer than the mainland / AP
“The exodus of tens of thousands of professionals from Hong Kong triggered by a crackdown on its civil liberties is being offset by new arrivals: mainland Chinese keen to move to the former British colony.”

Taiwan
China keeps up military pressure on Taiwan, sending 43 planes and 7 ships near self-governing island / AP
“Taiwan said Wednesday that China sent 43 military aircraft and seven ships near the self-ruled island, the latest sign that Beijing plans no let-up in its campaign of harassment, threats and intimidation.”

U.S.-China competition and tensions
White House aims for Biden-Xi meeting in San Francisco in November / Reuters
“Teams for U.S. President Joe Biden and Chinese President Xi Jinping 习近平 have an agreement in principle for them to meet in San Francisco in November but important details need to be hammered out, a senior Biden administration official said on Tuesday.”
Xiangshan security conference delegates suggest ways to build trust / SCMP (paywall)
Cooperation is ‘best choice’, right path for China and the U.S., People’s Daily says / SCMP (paywall)
“China sent a clear indication that President Xi Jinping and his American counterpart Joe Biden will meet during a closely watched summit later this month, even though it stopped short of confirming the meeting.”
U.S. Space Force chief urges universal rules to keep China in check / Nikkei Asia (paywall)
“When a Chinese fighter plane came within 10 feet of a U.S. B-52 bomber over the South China Sea last week, the U.S. military swiftly condemned the ‘unsafe and unprofessional’ intercept. But when it comes to China’s space operation, Washington first wants to see universal safety rules put in place.”
As Biden and China’s Xi prepare to meet, their militaries are butting heads / WSJ (paywall)
“Tensions between the U.S. and Chinese militaries continue to simmer even as their leaders prepare for a likely summit in the coming weeks, a sign of the difficulties the two global powers face in managing one of the most sensitive aspects of their relationship.”

Israel-Hamas war
Israel-Gaza mediation role will require China to work with other powers, Xiangshan forum hears / SCMP (paywall)
“China must strike a balance and work with other powers if it is to play an active mediation role in the Israel-Gaza war, according to Middle East experts attending a high-profile security forum in Beijing.”

Japan
China, Japan coast guards face off again near disputed islands / Reuters
“Chinese and Japanese coast guard ships faced off in waters around disputed islands in the East China Sea again on Wednesday, with both countries saying they deployed patrol ships to urge the other side to leave the territory.”
China, Japan coast guard ships in another face-off near disputed Diaoyu Islands / SCMP (paywall)

Australia
Australian prime minister to raise imprisoned democracy blogger during China visit / AP
“Prime Minister Anthony Albanese said Wednesday he will raise the plight of a detained Australian democracy blogger with Chinese leaders during a state visit to China.”

Philippines
China’s forces shadow a Philippine navy ship near disputed shoal, sparking new exchange of warnings / AP
“A Philippine navy patrol ship was shadowed by Chinese forces near a disputed shoal in the South China Sea, sparking a fresh exchange of accusations and warnings between the Asian neighbors Tuesday.”

Myanmar
Senior Chinese official meets Myanmar leader for security talks as fighting rages in frontier area / AP
“A high-ranking official from China has made a visit to military-ruled Myanmar to discuss security along the countries’ shared border, Myanmar state media reported Tuesday.”
Risks ahead for China as northern Myanmar clashes near border, analyst says / SCMP (paywall)
“Renewed clashes in northern Myanmar will hamper trade and personal contacts with China, an observer said as the fighting closed in on the border between the two countries.”

Antarctica
Biggest Chinese Antarctic fleet sets off to build research station / Reuters
“Two Chinese icebreaker research vessels and a cargo ship set sail on Wednesday for the Antarctic with more than 460 personnel on board to help complete construction of China’s fifth station on the world’s southernmost continent.”

SOCIETY AND CULTURE:

Halloween
Halloween revelers throng Shanghai, some wearing costumes seen as a protest to China policies / Reuters
“Halloween revelers thronged central Shanghai late on Tuesday night, with some dressed in costumes that poked fun at China’s strict COVID-19 curbs in a rare showcase of free expression as police looked on.”

Panda diplomacy
China’s panda business / Nikkei Asia (paywall)
“How countries from Finland to Malaysia have paid nearly $300 million to fund Beijing’s softest power tool.”

Social media regulation
Weibo, WeChat, and others tell influencers to display real names / Nikkei Asia (paywall)
“China’s major social media platforms, including Weibo, WeChat, Douyin, and Kuaishou, have told some of their most popular content creators to display their real identities in the latest move to regulate online information distribution.”

Housing for China’s job hunters
For China’s jobless young people, hostels are the place to be / NYT (paywall)
“Chinese backpacker hostels offering bunk beds for a few dollars a night have become hubs for the anxiety and ambitions of job-seeking youth.”

Cuisine
The ‘real’ kung pao chicken — and why I hope I never find it / Sixth Tone
“From the top of Mount Tai to the Hulunbuir grasslands, there are many versions of the iconic dish. Searching for the definitive ‘authentic’ version may not only be a fool’s errand — it also fails to appreciate this diversity.”

Film
In ‘Only the River Flows,’ China gets an unlikely arthouse hit / Sixth Tone
“With its open-ended narrative, this detective film set in the 1990s in rural China invites audiences to draw their own conclusions, sparking debate and interpretations on social media.”

• On The China Project: ‘Only the River Flows’: China’s brightest up-and-coming director gets a mainstream release

Books
How Eileen Chang almost wrote a book on explorer Zheng He / Sixth Tone
“The feminist essayist and author, whose writings show a deep interest in Southeast Asia, told friends about her plan to write about the legendary Chinese admiral’s voyages to the Western Seas.”