Updates on the truth of the economy inside China

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Xi declares that the CCP has succeeded in eliminating poverty in China. This is a joke.

The CCP mouthpiece Xinhua reported on 19TH December that the party head “Xi Jinping has sent a letter of congratulations to the International Forum on Sharing Poverty Reduction Experience, which opened Monday in Beijing”.

In this letter, Xi claims that after 8 years of persistent effort, the CCP has lifted all the rural people living under China’s existent poverty line (which was RMB3747 a year or roughly USD1.57 a day at the current exchange rate, in 2019) out of poverty and rid all the impoverished counties of their poverty labels, thus reducing the rural impoverished population by nearly 100 million and making tremendous contributions to the global poverty reduction cause.

According to Caixin, Fu Linghui, the spokesman of the NBS, corroborated his statement with the data published in the China Statistical Yearbook, which show that the lowest and lower income segments of the population, totally 40% of the population or 610 million people, have a meagre income of less than RMB1000, equivalent to USD152.

According to the 2019 National Economic and Social Development Statistical Bulletin (the “2019SB”) issued by China’s National Bureau of Statistics (“NBS”), the RURAL impoverished population with an annual income of less than RMB3747 at the end of 2019 was 5.51 million. The rural population accounted for only 39.4% of the total population.

Let’s take a look at the numbers of the country’s economy as updated by G-news:

The price of food

Mutton

Mutton prices kept rising for eight consecutive weeks

In the second week of December 2020, the national mutton price rose to 82.66 yuan per kg. The retail price of mutton kept rising for eight consecutive weeks due to insufficient supply. A person in charge of a mutton slaughter company in Dezhou, Shandong told reporters that their company’s slaughter volume has increased by 50%, but they still cannot meet the demand for orders.

Milk

Prices of dairy products increase for the sixth consecutive month

According to data released by the Communist China Ministry of Agriculture and Rural Affairs, in the first week of December, the average price of fresh milk in 10 major dairy production provinces was 4.09 yuan/kg, up 0.7% from the previous week with 6.0% year-over-year increase. Fresh milk price has been rising since June and it is now 14.89% higher than the price in May. It is forecasted that milk prices will continue to increase in the next 2 to 3 years.

http://stock.stcn.com/gsdt/202012/t20201214_2627455.html

Edible Oil

China’s three major edible oil prices are rising

Since the beginning of 2020, China’s edible oil prices continue to rise, from the beginning of the rapeseed oil prices rose sharply, and then soybean oil to catch up, and now palm oil is hot, the three major edible oil varieties are facing a price rise across the board. Some Chinese “experts” said in an interview with reporters: China’s edible oil dependence on a high degree of import, but China’s oil and oil production capacity continues to improve, and there is a perfect grain and oil reserve system. Also, there are diversified oil and oil import channels. So, the Chinese government can protect the “oil bottle” security. Canola oil is China’s second-largest edible oil variety, is also the first edible oil variety since 2020 continued to rise in price. In terms of futures, the main contract price of rapeseed oil futures at the Zhengzhou Future Exchange exceeded 10,000 yuan per ton, up nearly 30% from the beginning of 2020, and up about 50% from the low point in May, hitting a new high record since 2013. As for the spot market, on December 11, wholesale quotations of Grade IV rapeseed oil in coastal areas ranged from RMB 9,850 to RMB 10,000 per ton, increasing by RMB 1,850 to RMB 2,000 from the beginning of 2020, and RMB 2,850 to RMB 3,000 from the low price point on May 2020.

https://cj.sina.com.cn/article/norm_detail?url=https://news.sina.com.cn/s/2020-12-18/doc-iiznctke7121905.shtml

Restrictions on imports

Communist China’s boycott of Australian products results in losing more

Communist China has imposed tariff sanctions and import bans on Australian commodities such as wine, barley, lamb, beef, coal, lobster, and timber.  However, the damage to Chinese farmers is more serious than it is to Australia. It’s estimated by the Australian Bureau of Agricultural and Resource Economics and Sciences, Chinese farmers are expected to lose AUD$3.6 billion, which is 11 times more than the loss suffered by Australian farmers (AUD$330 million).

http://www.iask.ca/news/world/2020/12/586120.html

Communist China Ministry of Commerce in responding to Australia takes China to WTO over barley tariffs

On Dec 16, Australia filed a request for negotiation with China on China’s anti-dumping and countervailing measures against barley imports from Australia under the WTO dispute settlement process. Communist China has received the request and responded that according to the application of China’s domestic industry, the Ministry of Commerce of China initiated anti-dumping and anti-subsidy investigations against imported barley originating in Australia and adopted corresponding trade remedies in accordance with the law. Beijing claims China has always carried out trade remedies in a manner of consistency with WTO rules and feel regret with Australia’s appeal to WTO.

https://finance.sina.com.cn/china/gncj/2020-12-17/doc-iiznezxs7422310.shtml?cref=cj

Electricity Supply Crisis

Russia cuts the power supply, Zhejiang immediately halts production

On Dec 14, many factories in Zhejiang Province received an emergency notice from the local government that electricity usage would be rationed, and all processing plants had to stop production immediately until December 31. The power rationing was caused by the recent announcement of Inter RAO, a Russian exporter of electricity to China, that it would stop supplying 3 billion kWh of electricity to China. From now on until December 31, provincial government offices can only turn on the heat when the temperature is 37°F or below, and the heat temperature should not exceed 61°F.

https://www.soundofhope.org/post/453556

The truth behind electricity restriction and production halt

On Dec 17, a tweet account named Financial Truth with 187.8K followers revealed that the reason behind the recent electricity restriction and production halt comes from Communist China’s government intervention to bring coal price up by reducing domestic coal production and overseas import, aiming to avoid debt default blowout of state-run coal companies.

Supply Chain Shortage

Some suppliers “cut supply” to community group buying

On Dec 16, some suppliers were dissatisfied with the new business model of community group buying run by internet giants such as Alibaba, Tencent and required distributors to cut off the supply of ultra-low-price products. Some analysts believe this move is due to anticipation of the future, fearing that Internet giants will form a monopoly.

https://m.thepaper.cn/newsDetail_forward_10417336

Financial crisis

Shanghai and Shenzhen Exchange promote delisting reform

On Dec. 14, both Shanghai and Shenzhen Stock Exchange released proposals for simplifying the delisting process for public companies.  The proposal listed a serial of delisting standards, aiming to strengthen the nature of the survival of the fittest in the market and to prompt unqualified companies to withdraw from the market as quick as possible. It’s observed that there still exist loopholes such as financial fraud standard to trigger delisting, which is too low, and many companies can still get rid of it by tampering with their balance sheet.

http://stock.jrj.com.cn/2020/12/15001631489820.shtml

Adjustment of terms leads to the reduced interest rates from some deposit products with Communist China’s state-owned banks.

Communist China’s six state-owned banks yesterday announced that effective January 1, 2021, they will modify the interest terms of some personal deposit products. According to the original term, when a customer opens fixed-term deposit savings account with the bank, if it is withdrawn in advance the bank will pay the fixed-term interest based on the deposit time and the actual deposit duration. However, with this recently announced change, if the customer withdraws in advance on or after January 1, 2021, the interest will be calculated according to the listed interest rate of the RMB demand deposit on the withdrawal date, which is much lower than the advertised interest rate at the time of deposit. Many users commented on this change online and expressed their frustration with the unilateral change of contract terms by the banks to lower the interest rate of these deposit products.

http://finance.sina.com.cn/jinrong/yh/2020-12-15/doc-iiznctke6681727.shtml?cref=cj

High-grade rated bonds frequently default, urgently need to tear off the “emperor’s new outfit

According to Wind, as of Dec 16, 139 bonds have defaulted in the bond market this year, involving a total of 160.614 billion yuan (USD$24.47b), which has exceeded 149.5 billion yuan compared to last year, the largest default in recent years with new highs. Many industry insiders commented on the significant difference compare to the past is the high percentage bond defaults of high-grade rated entities, e.g., state-owned companies, bond defaults increased to 40%, featuring with group default. This led to the problems of false high ratings of the rating agencies, insufficient differentiation, and weak pre-warning functions.

https://kuaixun.stcn.com/egs/202012/t20201217_2637070.html

China Galaxy Asset Management Co. Ltd approved for opening

On Dec 17, China Banking and Insurance Regulatory Commission Thursday approved the opening of the state-owned China Galaxy Asset Management Co. Ltd., This new asset management company (AMC) is dealing with bad loans and toxic assets nation-wide.  It’s worth noting that this is the fifth company since the establishment of Communist China’s four major asset management companies (AMC) in 1999.

https://finance.sina.cn/bank/yhgd/2020-12-17/detail-iiznezxs7465925.d.html?cref=cj

Stealing Laobaixing’s money to help others

Poverty reduction is one of CCP’s measures to suppress political opponents, deceive Laobaixing, and steal their wealth. Xi Jinping sends a congratulatory letter to the International Forum on Human Poverty Reduction Experience.

The International Forum on Human Poverty Reduction Experiences opened in Beijing on December 14. General Secretary Xi Jinping sent a congratulatory letter to the forum. Xi Jinping pointed out that the CCP and the Chinese government have always made it their goal to make the people live a good life and have made long-term arduous efforts to this end. Since 2012, after 8 years of continuous efforts, nearly 100 million rural poor have all been lifted out of poverty this year under Communist China’s current standards.  Communist China made a major contribution to global poverty reduction.

http://paper.people.com.cn/rmrb/html/2020-12/15/nw.D110000renmrb_20201215_1-01.htm

Communist China helps Pakistan pay its $2.5 billion debts

According to news from the Economic and Commercial Section of the Chinese Consulate General in Karachi, Communist China plans to provide another $1.5 billion loan to Pakistan via the bilateral currency swap agreement (CSA) between China and Pakistan. Plus $1 billion lent early this year, It is $2.5 billion in total to help Pakistan avoid financial collapse caused by repaying Saudi Arabia’s due loans.

https://finance.sina.com.cn/roll/2020-12-15/doc-iiznctke6660689.shtml?cref=cj

Real Estate

Top 10 cities with property falling prices: Langfang first, Qingdao second, Beijing also on the list.

In 2020, which is about to pass, the second-hand property market has experienced a bottom heating, setting a new transaction high in recent years. The four cities with the fastest growth in second-hand property transaction volume were Hangzhou, Xi’an, Nanjing and Chengdu, all of which exceeded 40%, with Hangzhou growing at 62.2%. On the other hand, since the pandemic, a major feature of the property market is that the differentiation between different cities and regions is particularly obvious. While many cities in the Yangtze River Delta and the Pearl River Delta are experiencing strong transactions, many central cities in the Beijing-ring region and the Yellow River Basin are cooler overall, and the second-hand property prices in some cities have also declined. In the list of property price declines, Langfang topped the list with a drop of 8.4%. Qingdao and Jinan in Shandong province were the second and third on the list. Overall, the decline in property prices was negatively correlated with the fundamentals of urban development and population attractiveness.

In addition, in terms of the average transaction price of the second-hand property, Shenzhen’s property prices have overtaken Beijing as the number one in the mainland since September 2019 and continued to remain number one in 2020. In the short to medium-term future, the Shenzhen market is expected to remain number one due to the rigid constraints of supply and demand. Xiamen and Hangzhou both surpassed Guangzhou in fourth and fifth place, with Hangzhou in sixth place. In terms of regional distribution, the Top 10 cities are mainly distributed in the three core city clusters of Yangtze River Delta, Pearl River Delta, and Beijing-Tianjin-Hebei.

https://finance.sina.com.cn/china/gncj/2020-12-18/doc-iiznezxs7660734.shtml

Corporations’ situations

Many foreign trade factories in Zhejiang reduce production to cut electricity consumption

Most of Zhejiang international trade factories have been told to cut electricity consumption and restrict production. Factories with high energy consumption and low output value will be allowed to operate only on limited days from December 15 to December 31. Many small and medium-sized factories were concerned about electricity rationing. They could not start operations in the first half of the year due to COVID-19. Although the business has improved later this year, they are faced with rising material cost, falling exchange rates, shortage of containers, and cargo delays, leading to excess inventory. Now, they will have to stop some production lines and postpone some orders to 2021.

https://m.cifnews.com/article/85394

China’s Luckin Coffee has agreed to pay a US$180 million penalty to settle accounting fraud

The U.S. SEC charged China-based company Luckin Coffee Inc. with defrauding investors by materially misstating the company’s revenue, expenses, and net operating loss in an effort to falsely appear to achieve rapid growth and increased profitability and to meet the company’s earnings estimates. Luckin, whose American Depositary Shares traded on Nasdaq (LKNCY now trade on Pink Open Market) until July 13, 2020, has agreed to pay a $180 million penalty to resolve the charges.

https://finance.sina.com.cn/stock/usstock/c/2020-12-17/doc-iiznezxs7324269.shtml?cref=cj

Four ministries of the Chinese government: integrated circuit production enterprises are exempt from income tax for up to ten years

On December 17, 2020, the Ministry of Finance, the State Administration of Taxation, the National Development and Reform Commission, and the Ministry of Industry and Information Technology jointly issued the Announcement on Enterprise Income Tax Policies for Promoting High-Quality Development of Integrated Circuit Industry and Software Industry (hereinafter referred to as “Announcement”), which clarifies the enterprise income tax policies for integrated circuit industry and software industry.

It will be implemented from January 1, 2020. The “Announcement” clarifies that the state-encouraged integrated circuit line width less than 28 nanometers (inclusive), and the operating period of more than 15 years of integrated circuit production enterprises or projects, the first year to the tenth year of exemption from corporate income tax; state-encouraged integrated circuit line width less than 65 nanometers (inclusive), and the operating period of more than 15 years of integrated circuit production enterprises or projects, the first year to the fifth year of exemption from corporate income tax, the sixth year to the tenth year in accordance with the statutory rate of 25% reduced by half of the corporate income tax; state-encouraged integrated circuit line width of less than 130 nanometers (inclusive), and the operating period of more than 10 years of integrated circuit production enterprises or projects, the first to the second year of exemption from corporate income tax, the third to the fifth year in accordance with the statutory rate of 25% reduced by half of the corporate income tax.

The “Announcement” specifies that the state encourages the line width of fewer than 130 nanometers (inclusive) of integrated circuit production enterprises, which is the state encourages the list of integrated circuit production enterprises in the five tax years prior to the year has not yet made up for the losses incurred, allowed to carry forward to future years, the maximum number of years to be carried forward shall not exceed 10 years.

http://www.xinhuanet.com/fortune/2020-12/18/c_1126876432.htm

Handling Of CCP Virus 

Philippines targets deal for 25 million doses of Sinovac COVID-19 vaccine from Communist China

On December 14, a coronavirus taskforce official announced the Philippines aims to finalize negotiations with Sinovac Biotech this week to acquire 25 million doses of the Chinese company’s COVID-19 vaccine for delivery by March. Sinovac’s plan to conduct a Phase 3 clinical trial in the Philippines is being evaluated by its drug agency.

https://www.reuters.com/article/health-coronavirus-philippines/philippines-targets-deal-for-25-million-doses-of-sinovac-covid-19-vaccine-idUSKBN28O10G

China’s mass vaccination for Covid-19 is approaching: 100 million doses of “Fosun Vaccine” may arrive in China next year.

On December 16, Fosun Pharma and BioNTech of Germany jointly announced that they have reached an agreement on the supply and production of the mRNA vaccine, aka BNT162b2 in China, which is expected to supply at least 100 million doses of BNT162 vaccine to mainland China by 2021 once the vaccine is approved for marketing in China. On December 11, the government of Hong Kong Special Administrative Region of China announced that it has reached an agreement with Fosun Pharma to obtain up to 7.5 million doses of mRNA vaccines developed jointly by Fosun Pharma and BioNTech.

The first batch of vaccine (one million doses) is expected to be delivered as soon as the first quarter of next year. The Fosun’s Covid-19 vaccine to be supplied to Hong Kong would be manufactured in Europe by BioN Tech and shipped directly to Hong Kong. Fosun Pharma has already built -70 degrees Celsius cold storage near some airports in China. After the vaccines are imported from abroad and arrive in China, they will be stored in the cold storage as soon as possible, and Sinopharm will be responsible for cold chain transportation to ensure that they would be delivered to vaccination sites across the country at -70 degrees Celsius. Vaccination spots across the country will be equipped with medical-grade cryogenic refrigerators. Recently, Fosun Pharma Global R&D Center CEO, namely Chief Medical Officer, Aimin Hui disclosed to the public that China has initiated the phase II clinical trial of mRNA vaccine BNT162b2 in Taizhou and Lianshui of Jiangsu Province on November 24, 2020. Vaccination trials started on December 5, and more than 400 subjects have been vaccinated as of December 16.

On July 22, 2020, China officially launched the emergency use of the Covid-19 vaccine to a high-exposure risk crowd. On December 16, the national CDC system held a video conference to train and deploy preparations for the Covid-19 vaccination. Relevant health experts recently revealed through the media that the mainland plans to distribute 100 million doses of vaccines produced by Sinopharm Holdings and Kexing Biologicals to local CDCs before the Lunar New Year to avoid outbreaks during the holiday travel rush, but vaccinations for the public are not expected to be administered until after the Lunar New Year.

https://finance.sina.com.cn/chanjing/cyxw/2020-12-18/doc-iiznezxs7665817.shtml?cref=cj

Brainwashing Chinese People and Spreading Hatred Against The USA

Hua Chunying responded to the United States: “Do you deserve to be called democracy and liberty?”

Hua Chunying, Spokesperson of the Chinese Ministry of Foreign Affairs, referred to some authoritative polls showing that 87% of Americans are dissatisfied with the current state of the country, and more than 70% of Americans believe that the country is heading in the wrong direction. “If the majority of the people cannot be convinced that you are working for the welfare of the country and can improve their lives, do you deserve to be called democracy and freedom?  Are you worthy of being called democracy and human rights?  ” She added.

https://www.sohu.com/a/437021955_115479

Weibo VIP account spreads hateful messages about the United States

On Dec 16, a VIP user’s Weibo said:” When the number of Covid-19 cases in the US has exceeded 10 million, what does the US intend to do by requesting to increase the number of China-US flights to 100? Is it to let the world bury with itself? It’s learned that some US soldiers in Okinawa, Japan were also found to be carrying the coronavirus. Why have the US soldiers not undergone a Covid-19 test before entering Japan? What is even worse is that when the local health department in Japan requested those soldiers to be quarantined, their requests were rejected by the US.”

https://weibo.com/3862109532/JyGRL1MOv?type=comment

By 【G-Translators Financial Team】

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