China's badminton team withdraws from Swiss Open due to COVID-19 cases (Xinhua)
2022-03-23

Chinese firms attracted by Swiss listings as country pushes for more overseas IPOs (GT)
2022-03-21

Russia sanctions end Switzerland's long history of political neutrality (SCMP)
2022-03-19

 ^ top ^

China's 'No-Limit' Tie with Russia Has Bottom Line, China Envoy Says (Caixin)
2022-03-25
The cooperation between China and Russia that was declared to have "no limit" still has a bottom line to respect the United Nations Charter, said Qin Gang, Beijing's envoy to the U.S. The ambassador made the comment Wednesday as the war in Ukraine rages on, putting China's close tie with Russia under the spotlight. Chinese officials have reiterated its neutral stance and called for diplomatic solutions to end the conflict. "China and Russia's cooperation has no forbidden areas, but it has a bottom line," the ambassador said Wednesday in an interview with Chinese state-backed broadcaster Phoenix TV. "That line is the tenets and principles of the United Nations Charter, the recognized basic norms of international law and international relations," he said in response to a question about Beijing's commitment to Moscow amid the Ukraine war. China and Russia declared a strategic cooperation with "no limits and no forbidden zone" in a joint statement issued after a February meeting between Chinese President Xi Jinping and Russian President Vladimir Putin in Beijing during the Winter Olympics. The joint statement reflects the two countries' shared views and consensuses on major global and regional issues, Qin said. There should be no upper limits on bilateral cooperation that is in line with the basic norms of international relations and have far-reaching significance, he said. "This is the guideline we follow in bilateral relations between China and any other country," Qin said. China's relations with Russia should not be seen as a liability in the Ukraine crisis. Instead, it is an asset in international efforts to resolve the crisis in a peaceful way, the ambassador said. The war between Russia and Ukraine is in no one's interest, Qin said. China, in particular, needs a peaceful external environment to achieve its development goals. The crisis has caused prices of oil and commodities worldwide to surge, fueling concerns of global energy and food crises while disrupting international industrial and supply chains and threatening the global economic recovery. "China cannot stay out of it and has also been severely affected," Qin said. "Therefore, we hope that a cease-fire and peace can be achieved as soon as possible." Qin also said that amid changes in the international situation, the relationship between China and the United States is in a new "process of mutual discovery, recognition and calibration," and this process may last for a long time. "We hope that China and the U.S. can finally achieve mutual respect, peaceful coexistence, and win-win cooperation," the ambassador said. "We are working hard for this." In a recent phone conversation, Xi and U.S. President Joe Biden had their first direct exchange on the Ukraine crisis since the war started. Xi called for the two nations to share responsibilities for world peace. The two leaders also agreed on the importance of maintaining open lines of communication to manage competition between the two countries.

China welcomes US tariff exemptions, but 'symbolic move' fails to tackle fundamental trade issues (SCMP)
2022-03-24

China-Australia relations: Ukraine war clouds efforts to repair trade ties after PM Morrison warns Beijing of sanctions (SCMP)
2022-03-24

China willing to elevate solidarity, friendship, cooperation with Islamic world to new level: Chinese FM (Xinhua)
2022-03-23

Ukraine war is a test and 'great opportunity' for China to raise diplomatic profile, says analyst (SCMP)
2022-03-23

US expeditionary mobile base enters S.China Sea for 1st time, sending a worrying signal (GT)
2022-03-22

Chinese FM makes four-point proposal on China-Pakistan relations (Xinhua)
2022-03-22

Ukraine: a year after sanctions, EU-China ties face new 'defining moment' on Russia (SCMP)
2022-03-21

China's special Horn of Africa envoy has work cut out ahead of first peace meet in conflict-hit region (SCMP)
2022-03-21

'The motherland is behind you': Chinese Ambassador to Ukraine recounts moving details of evacuation mission in Russia-Ukraine conflict (GT)
2022-03-21

 ^ top ^

Chinese premier stresses spring farming to ensure grain security (Xinhua)
2022-03-24

China Eastern plane crash: human remains and a black box found at site where flight MU5735 went down (SCMP)
2022-03-23

The Growing Difficulty of Balancing China's Local Government Budgets (Caixin)
2022-03-23
In 2021, the coal-rich northern province of Shaanxi raked in more revenue and spent less than its government had projected. In its general public budget, the province's revenue of 277.5 billion yuan ($43.9 billion) in 2021 was 17.1% higher than planned, while its 606.9 billion yuan in spending was lower than the projected by 4.6%. Like Shaanxi, many other provincial-level regions saw their general public budget revenue beat expectations last year. Total revenue in local general public budgets on the Chinese mainland, excluding funds transferred from the central government, reached 11.1 trillion yuan in 2021, higher than the projected 10.8 trillion yuan and representing 10.9% year-on-year growth. But such high growth is not likely to be sustained in 2022, especially taking into account how the Covid-19 lockdowns of 2020 had impacted the economy and created a low comparison base. This year, most regions expect their revenues to grow at a slower pace and have warned that they will be on a tight budget, as the country struggles with managing continuous Covid flare-ups and an ongoing property slump that dampens the prospect for land sales, a main contributor to local government funding in China. Looking back at 2021, even as many provincial-level regions generated more revenues than projected, some lower-level governments struggled with budgetary constraints. A gloomier budget outlook this year could add to local woes, and hurt their capacity to finance investments and repay debts. Many local governments recorded high revenue growth rates last year thanks to the low comparison base and a nationwide economic recovery from the pandemic. Out of the 31 provincial-level regions on the mainland, 18 reported double-digit revenue growth rates, and only one — the central province of Henan was hit by a double whammy of devastating flood  and Covid flare-ups — didn't exceed its revenue target, data compiled by Caixin show. The rise in bulk commodity prices helped fill the coffers of some local governments. The four provincial-level regions whose 2021 general public budget revenues exceeded expectations by more than 10% — Shaanxi, Shanxi, Inner Mongolia, and Gansu — are all resource-rich. Shaanxi's latest annual budget report said the province's revenue exceeded its target last year mainly because the quality and efficiency of economic development improved and the sales volumes and prices of bulk commodities including coal rose, driving up tax revenues. Similarly, the Inner Mongolia autonomous region, whose general public budget revenue exceeded its target by 17.5%, said the rise in the sales volumes and prices of coal contributed to an increase in tax revenues. Many other provincial-level regions also exceeded their revenue targets last year, partly because they had been conservative when setting targets at the beginning of the year due to concerns over the uncertainty of the Covid pandemic. Despite the better-than-expected fiscal revenues, there were some glaring financial troubles facing lower-level governments. One example is the government of the county-level city of Bazhou in Hebei province, which last year arbitrarily collected fines and fees from thousands of businesses in an attempt to make ends meet. In December, the city of Hegang in the rust-belt province of Heilongjiang had to cancel a government recruitment plan, citing a fiscal restructuring plan that had brought "significant changes to the city's financial conditions." That announcement on its website was later removed after it went viral. In addition, some local governments' pockets are less deep than they appear because they have to hand out money to companies in the form of tax refunds or fiscal subsidies or incentives as a way to attract and retain them, a taxation researcher told Caixin. In China, local governments have to provide what's known as the "three guarantees." These ensure that government services continue to operate, that salaries supposed to be paid by the government get paid, and that a basic standard of living for residents is maintained. The obligation to adhere to the "three guarantees" has meant that some local governments have put stricter curbs on hiring and a greater emphasis on reducing other expenditures. The outlook for local revenue growth in 2022 is far from promising given slowing economic growth, worsening Covid-19 outbreaks, fluctuating commodity prices and sluggish land sales. China's top leaders have been saying that the nation's economy faces "triple pressures" of shrinking demand, disrupted supply and weakening expectations. The headwinds are felt at the local level, too. Almost all of the 31 provincial-level regions set a lower growth target for revenue in their general public budget than the actual growth rate in 2021. At least 17 have said they face pressure to balance their 2022 budget. Fluctuations in the prices of bulk commodities such as coal and oil add uncertainties to the revenues of some regions with abundant energy resources. Shaanxi, for example, expected its revenue in the general public budget to grow 3% in 2022, citing a potential drop in prices of energy resources such as coal. In China, the general public budget and government-managed fund budget are two main parts of the government's fiscal budget. Revenue from land sales to developers has made up around a quarter of these two parts combined in recent years, according to Wu Qiying, a macro analyst of GF Securities Co. Ltd. Curbs on property developers' financing and mortgages left China's property market in a slump in the second half of 2021. Nationwide, land sales revenue grew 3.5% in 2021 compared with the previous year, lower than 2020's 15.9% growth and marking the third-lowest rate recorded. Changes in land sales revenue in 2021 varied from region to region. Several provincial-level regions suffered dramatic declines of more than 10%, with the southwestern province of Yunnan reporting a 35% slump. On the other hand, at least seven provincial-level regions, including the municipalities of Beijing and Tianjin, recorded land sales revenue growth of more than 10%. Growth in revenue from land sales may further slow for some regions in 2022, as local property markets remain gloomy. This could strain the revenue sources of local governments. Lu Ting, chief China economist at Nomura Holdings Inc., estimates that China's land sales revenue could decline by more than 2 trillion yuan in 2022 from 8.7 trillion yuan in 2021. In their budget plans, many local governments predicted a bleak picture of their land sales in 2022. At least 10 provincial-level regions projected a decline, with one province — Sichuan in southwestern China — predicting a more than 50% drop. Last year, many local governments didn't spend as much as planned. Expenditure in local general public budgets totaled 21.1 trillion yuan in 2021, a 0.3% increase from 2020, which was lower than the expected 1.8% growth. Meanwhile, spending by local government-managed funds dropped 3.7% and also failed to meet the target set out in the budget plan for 2021. The declines in spending were because an export boom and better-than-expected economic recovery in the first half of 2021 prompted governments to slow down issuance of special-purpose bonds (SPBs), mainly used for infrastructure investment, and spending on other projects, sources with knowledge of the matter told Caixin. Local governments are now gearing up to boost infrastructure investment in 2022 in order to stabilize economic growth. Expenditure is projected to grow 8.9% in local general public budgets, and 19.3% in local government-managed funds, according to the annual budget report delivered earlier this month to the national legislative meeting. With an expanding expenditure, local governments will have to issue more SPBs, but strained revenue may drive up their debt-to-fiscal revenue ratio and thus limit their ability to borrow more. Meanwhile, the central government's campaign to eliminate hidden local government debt — off-the-books borrowing chiefly used for infrastructure and other public projects — could also add to local governments' debt burdens, as they'll likely have to issue more bonds to move their hidden debt onto the balance sheet.

China issues more targeted testing guideline under dynamic zero policy, no longer requires mass testing (GT)
2022-03-22

Dozens of Chinese officals punished over latest wave of Covid-19 cases (SCMP)
2022-03-22

China to expand deployment of nuclear power in clean, secure energy push (GT)
2022-03-22

Does China's goal of common prosperity leave room for the super-rich? (SCMP)
2022-03-21

Court orders help protect victims of domestic violence (China Daily)
2022-03-21

China population: 'entirely possible' will peak this year as provinces report more declines (SCMP/Bloomberg)
2022-03-21

 ^ top ^

Water environment improved in dual-Olympic city of Beijing (Xinhua)
2022-03-22

 ^ top ^

Shanghai insists on dynamic zero-COVID, denies 'citywide lockdown' rumors (GT)
2022-03-23

China's No 2 chip maker seeks Shanghai listing to expand capacity, as Beijing continues to back self-sufficiency drive (SCMP)
2022-03-21

 ^ top ^

Guangzhou to host fintech projects in government sandbox in race with Beijing, Shanghai (SCMP)
2022-03-23

Shenzhen restarts production, public transportation (China Daily)
2022-03-22

^ top ^

China's Chongqing rescues over 700 ancient trees (Xinhua)
2022-03-19

^ top ^

Academician wants national park built in Tibet (China Daily)
2022-03-21

China 'systematically' denies access to Tibet, US State Department says (SCMP)
2022-03-18

^ top ^

Senior Chinese official says all ethnic groups in Xinjiang live happily ahead of visit by UN human rights chief (SCMP)
2022-03-23

Palestinian officials condemn U.S. for lying on Xinjiang (Xinhua)
2022-03-23

China's Xinjiang posts robust foreign trade growth in first two months (Xinhua)
2022-03-23

Feeling secure, China goes into development mode in Xinjiang (SCMP)
2022-03-21

^ top ^

Guessing game on potential Hong Kong chief executive candidates goes into overdrive with ministers' names touted (SCMP)
2022-03-25

Hong Kong aims to show top investors it means business with high-level summit, Rugby Sevens matches and mainland China visits (SCMP)
2022-03-24

American lawyer released from prison, says 'banned' from Hong Kong after multi-year legal saga (HKFP)
2022-03-23

A game changer? Hong Kong leader performs 'difficult balancing act' on easing strict Covid-19 measures (SCMP)
2022-03-22

Hong Kong environmental groups urge gov't to retract plans to change land development procedures (HKFP)
2022-03-22

Hong Kong to lift flight bans, reduce quarantine for arrivals; mass testing plans put on hold (SCMP)
2022-03-21

^ top ^

Macao SAR chief executive vows full support for newly-appointed national security advisers (Xinhua)
2022-03-21

^ top ^

Taiwan says 'reunification law' would bring too much pressure for Beijing (SCMP)
2022-03-24

6.6-magnitude quake hits waters off Taiwan: CENC (Xinhua)
2022-03-23

Taiwan looks at extending compulsory military service beyond 4 months (SCMP)
2022-03-23

China urges Japan to cease provocations on Taiwan question (Xinhua)
2022-03-23

Ukraine showing Taiwan the way on fighting much bigger army if PLA attacks (SCMP)
2022-03-20

^ top ^

Ukraine war: China exporters wary of 'secondary sanction' threat for helping Russia skirt alumina ban (SCMP/Reuters)
2022-03-24

Economists Explain Why Foreign Investment in China's Manufacturing Hasn't Returned to Pre-Pandemic Levels (Caixin)
2022-03-24
Foreign investment in China's manufacturing sector failed to return to pre-pandemic levels last year, possibly due to the impact of Beijing's "zero-Covid" policy and the Sino-U.S. tariff war, economists told Caixin. Realized foreign direct investment (FDI) in manufacturing fell 4.6% in 2021 from 2019, Minister of Commerce Wang Wentao said at a press conference early this month. Manufacturing FDI accounted for 19.4% of China's total inward FDI last year, he said, down from 20.8% in 2020 and 25% in 2019. "This issue must be taken seriously," Wang said, adding that China is in the process of transitioning from a big manufacturing country to a strong one. The industry accounted for 27% of China's 114 trillion yuan ($17.7 trillion) GDP last year. The trend of multinationals relocating their supply chains from China to cheaper countries may have been compounded by China's zero-tolerance Covid-19 policy that makes it hard for their employees to travel to China, Zhang Zhiwei, chief economist at Pinpoint Asset Management Ltd., told Caixin. Since early 2020, Chinese authorities have reacted to sporadic regional outbreaks with travel restrictions, lockdowns, mass testing and mandatory centralized quarantine. According to a survey published by the British Chamber of Commerce in China in December last year, hiring and retaining foreign employees has become the most pressing concern for surveyed U.K. companies in the country, reflecting the perceived costs of Beijing's zero-Covid strategy for foreign businesses. In addition, the pandemic has highlighted the problem of the "hollowing out of manufacturing" in some developed countries, which has made them warier of overreliance on China, said Shen Jianguang, chief economist at e-commerce giant JD.com Inc. As a result, the U.S., Japan, and some European countries now want to restructure their international supply chains and withdraw some production from China, Shen told Caixin. A February report released by Japan's cabinet office, for instance, unveiled that China had a greater than 50% share in more than 1,000 types of Japan's imported goods in 2019. The island country in 2020 announced a 243.5 billion yen ($2.3 billion) plan to reform supply chains, including subsidies for Japanese companies that bring manufacturing home. The move is seen by some as part of the nation's strategy to reduce its dependence on China.
In recent years, governments in several countries, including the U.S., Japan, South Korea and some in Europe, have tried to "decouple" from China by trying to encourage their companies to shift manufacturing production away from China, either to their "home base" or to other economies such as Vietnam, Mexico and Eastern Europe, according to Louis Kuijs, Asia Pacific chief economist at S&P Global Ratings Inc. Also, the China-U.S. trade war has led some firms to shift manufacturing capacity from China to avoid additional U.S. tariffs imposed since 2018, Kuijs told Caixin. "These recent developments are on top of a longer-running shift of manufacturing capacity from China to other countries by some firms because of rising costs in China," Kuijs added. Chinese authorities should rethink its zero-Covid strategy and create a more attractive business environment, for example, by strengthening intellectual property protection and leveling the playing field for foreign firms, observers recommend. "If China wants to revitalize inward manufacturing FDI, it will need to substantially improve the domestic investment environment and take steps to reduce economic and political tensions with the United States and other advanced economies," said Scott Kennedy, a senior adviser and expert on China at the Center for Strategic and International Studies. "Otherwise, China risks moving from being on the global supply-chain superhighway to taking an off-ramp to a slower and lonely side-road." China should strengthen protection of intellectual property rights, to enhance the confidence of foreign investors, recommended Xu Hongcai, deputy director of the Economic Policy Commission under the China Association of Policy Science. The country should insist on a high level of opening-up, deepen and expand international cooperation, and speed up the construction of high-standard free trade zones, in a bid to stabilize its supply chains, said JD.com's Shen. "Our next step will be to strengthen support for the manufacturing sector to attract foreign investment," Commerce Minister Wang said at the press conference. "We'll guide more foreign investment into fields including advanced manufacturing, strategic emerging industries, the digital economy, and green development."

US-traded Chinese firms on optimistic sentiment (GT)
2022-03-23

Central bank bill issuance in HK 4.4 times oversubscribed amid growing interest in yuan assets (GT)
2022-03-22

China to implement large-scale VAT credit refund to keep macroeconomic stability (Xinhua)
2022-03-21

Land of opportunities: why China keeps drawing more foreign investment (Xinhua)
2022-03-21

HSBC, CICC among major financial firms calling bottom on China stocks after Beijing moves to soothe investors (SCMP)
2022-03-21

^ top ^

North Korea fires suspected intercontinental ballistic missile for first time since 2017; US 'strongly condemns' launch (SCMP/Reuters)
2022-03-24

Seoul back on alert after North Korea fires missiles from multiple-rocket launchers (SCMP)
2022-03-20

^ top ^

Government to support central bank's policy on maintaining foreign exchange reserves (Montsame)
2022-03-24

Vehicles entering through Gashuunshukhait border checkpoint to be increased (Montsame)
2022-03-24

ADB expresses interest to cooperate in realizing 'New Revival Policy' (Montsame)
2022-03-23

Bayan-Ulgii aimag to have construction works for tourism and industrial development (Montsame)
2022-03-22

Mortgage repayment deferral support extended (Montsame)
2022-03-22

^ top ^

Embassy of Switzerland