CiCM 11th September 2023

NEWS IN CHINA

China’s economy shows optimistic rebound among speculations of economic downturn: Experts and executives have observed encouraging signs of a rebound in Chinese economy, indicating a gradual improvement in demand, economic activity, and an easing of deflationary pressure. The national Consumer Price Index (CPI) and Industrial Producer Price Index (PPI) released by the National Bureau of Statistics experienced a significant shift from its worrying figures of decline in July. According to reports, China's consumer demand has shown promising growth in August. This indicates a favourable shift towards increased consumption that plays a vital role in driving economic expansion. The efforts are being made to lead recovery plans and the implementation of pro-growth policies expected to take effect in the third and fourth quarters. Zhou Maohua, an analyst at China Everbright Bank, pointed that the country has implemented targeted stimulus policies as part of its countercyclical adjustment strategy. These factors are expected to contribute to a more robust economic performance for the remainder of the year. However, the growth recovery is currently uneven across different sectors which would mean progress may not be uniform across all industries.

Daniel Zhang steps down as Alibaba cloud chief: Former Alibaba CEO Daniel Zhang has stepped down from his role as the head of the cloud division, causing Alibaba Group’s stock price to register a 3% drop in Hong Kong. Alibaba’s US shares also experienced a 5.2% decline over the past week. This has caused substantial setback to Alibaba’s evolving corporate landscape who is headed by Eddie Wu, the co-founder of Alibaba, after Zhang announced his resignation as the CEO in June. Zhang had decided to continue to head the cloud unit division due to its strategic importance, but has not completely stepped down from the company. Additionally, Alibaba is undergoing a significant restructuring with plans to reduce the Cloud’s workforce by approximately 7%. This is in move with Alibaba’s broader strategy to pursue separate initial public offering (IPOs) for its various business groups. For now Eddie Wu will act as the head of the cloud unit.

UK arrests Chinese spies amongst Parliamentary researchers: Following recent developments in China-UK relations, the British Police confirmed that they arrested two individuals in the wake of an investigation of espionage. Two men have been arrested, with one of them being identified as a parliamentary researcher of the British Conservative Party specialising in international affairs. British Prime Minister Rishi Sunak expressed apprehension regarding China’s move of spying, and emphasised maintaining an open dialogue to Chinese Prime Minister Li Qiang during the G20 Summit in India. The Chinese Foreign Ministry spokesperson, Mao Ning, however denied any allegations of espionage and labelled them as slander and baseless accusations.

China rejects US claims of illegal Pangolin Trade: The National Forestry and Grassland Administration of China expressed serious concern and staunch opposition over US allegation of illicit Pangolin trade for their use in traditional Chinese medicine. Pangolins are engendered animals, and the issue of their trade and capture was brought up in the Convention on International Trade in Endangered Species of Wild Fauna and Flora. Deb Haaland, the Interior Department’s head claimed that Chinese nationals were undermining the efforts of the convention, and assessed this based on thorough review and a recent report of seizure of over a ton of pangolin scales in Thailand valued at more US $1.4 million. These scales were believed to be destined for Chinese clients for use in traditional Chinese medicine and consumption. Beijing responded with vigour to these accusations and said that it will play a greater role in the protection of endangered wildlife, including pangolins.
China’s amendment to ‘Public Security Administration Punishment Law’ sparks concerns: In a recent move by the Chinese government to include the vague provision of ‘hurting the feeling of the Chinese nation’ as against national security, and thereby liable to punishment has ignited criticism by citizens and legal experts. The draft currently open for public opinion has raised concerns over the expansion and potential infringement of police powers on people’s basic rights. Minister of Justice He Rong, elaborated on the draft by pointing out that the nation’s social security has evolved significantly over the years and need new security management to deal with such novel challenges. However, these developments could have severe effects on people’s freedom of expression, as even wearing clothes or symbols deemed to be harmful to the spirit of the Chinese nation, can led to severe penalties. This has caused civil society and legal practitioners to voice against the vagueness of penalty standard and have proposed changes before it becomes law.

SOCIAL MEDIA CHATTER IN CHINA

Debate over Lavish Teacher’s Day Gifts in China: Occurrences of induing extravagant gifts to teachers on China’s Teacher’s Day has set a debate among the citizens. Even though the contentious practise of such offerings has long-standing regulations against it, parents and students still purchase expensive gifts for the teacher’s. The popularity of the topic can be seen on the lifestyle app, Xiaohongshu, where the hashtag ‘Teacher’s Day Gifts’ has gathered a staggering 450 million views. In northern China’s Shanxi province, a middle school is currently conducting an inquiry into the situation where a parent committee pooled together 5000 yuan to purchase gifts for teachers. The incident has caused a flurry of conversation on social media platforms. Many parents, find themselves under pressure from parent committees to give money for the gift-giving practice, because of which one concerned netizen questioned whether her inability to afford a gift because of her financial difficulties, would make the teacher treat her child differently? The issue continues to raise question around this practise and the local education bureau has also expressed concern over the matter.

INDIA WATCH

China’s slowdown or rebound in its economy holds significant implications for India. As the largest and leading economies of Asia in the 21^st century, both are expected to achieve continuous growing levels of economic success in the coming years. China and India are also home to the world’s largest population with a billion each, making their major challenge - the progress and prosperity of people through economic transformations. To facilitate this process, it is important for India to take advantage of China’s development, and not see it as a threat but as an avenue for friendly and cooperative commercial and trade relations. China is India’s second largest trading partner, but this relationship has been characterised by an increasing trade deficit on the Indian side. Not to mention that both countries suffer from a ‘trust deficit’ as well, where their private sectors are unable to breakthrough more markets in across each other’s borders for resources and technology. Economic sanctions and border disputes make investors vary of long-term operations. During Covid-19, trade relations were under scrutiny when India announced a temporary ban on 59 Chinese apps, and China reduced its dependence on India IT service providers such as Infosys’s, Wipro and Tatas. However, post-pandemic recovery operations in China and India have led to reopening and restarting economies by deepening globalisation and maintaining balance of trade. With China showing strong signs of an economy that can balance and recover on its own, much more quickly than others, the Indian side can view this as a good sign to strategically increase their economic relationship and propel investment opportunities. At the broadest level, the prospects for collaboration are high, but the process is not moving at the required speed due to political hostilities and border disputes. This makes security and geopolitical issues trump over economic cooperation. In order to achieve a separation of both, India and China will need to use skilful and creative diplomacy. An economic resurgence in China and India relations can also contribute to a positive atmosphere between two countries making geopolitical antagonism less likely.

Prepared By

Taru Ahluwalia

Taru Ahluwalia completed her Post-Graduation in East Asian Studies from the University of Delhi and her Under-Graduation in English from Lady Shri Ram College for Women. She aims to decode the enigma that is East Asia and examine its geopolitical re-positioning in today’s world. She holds a diploma in Korean Language and aspires to learn Chinese one day.