CiCM 26th March 2024

NEWS IN CHINA

Asian Economic Growth Forecasted at 4.5% in 2024, Boao Forum Report Highlights Regional Trends and Challenges: The recently released Asian Economic Outlook and Integration Progress report by the Boao Forum for Asia (BFA) has outlined a promising forecast for the Asian economy in 2024, projecting a growth rate of approximately 4.5%, surpassing the figures from the previous year. The report, unveiled as the BFA holds its 2024 conference in Boao, China, provides a detailed regional breakdown, anticipating East Asia to maintain a growth rate of 4.3%, while South Asia is expected to lead with a growth rate of 5.8%, retaining its position as the fastest-growing region. Conversely, Central Asia's growth is projected to marginally decelerate to 4.3%, while West Asia anticipates an uptick to 3.5%. The report forecasts Asia's GDP to represent 49% of the global total in 2024, marking a 0.5 percentage point increase from the previous year. However, concerns linger over sluggish employment growth in populous areas like East and South Asia, which could dampen overall employment figures. Despite an uptick in weekly working hours for full-time jobs across most Asian regions, income growth faces pressure, exacerbated by domestic income inequality. The report ultimately concludes on a cautiously optimistic note, foreseeing a gradual easing of inflationary pressures across most Asian economies throughout 2024.
Hong Kong Court Declares HK01 Founder Yu Pun-hoi Bankrupt Over US$60 Million Debt: In a significant legal development, a Hong Kong court has declared Yu Pun-hoi, the founder of HK01 and a key figure in Nan Hai Corporation, bankrupt after defaulting on a substantial debt of HK$470 million (US$60.1 million) owed to a mainland Chinese investment bank. The High Court's decision, issued on Tuesday, underscores the financial challenges faced by Yu and his affiliated companies. Deputy Judge Sara Tong See-pui highlighted Nan Hai's precarious financial situation, with liabilities totalling HK$3.9 billion and assets falling short of satisfying the claims by CCB International Overseas, the creditor, as of March 2021. Despite a last-minute attempt by Yu's legal team to present a new valuation report claiming solvency, the court dismissed it as irrelevant, citing concerns over its reliability. Furthermore, Yu's involvement in guaranteeing a HK$379 million bond, which has accumulated interest to reach the staggering sum of HK$470 million, compounded his financial woes. The court's decision raises questions about the viability of Nan Hai's business ventures, particularly its mainland projects, with three out of four ventures entangled in legal issues. This ruling comes amidst a backdrop of suspended trading in Nan Hai's shares since April 2022, attributed to losses stemming from a weak property market exacerbated by the prolonged impact of the Covid-19 pandemic.
Five Chinese Football Officials, including former Chairman, Sentenced to Jail over Corruption Scandal: In a landmark ruling, the Intermediate People's Court of Huangshi City, Hubei Province, has handed down a life sentence, deprivation of political rights for life, and confiscation of all personal property, to former Chinese Football Association Chairman Chen Xuyuan for his involvement in a bribery scandal. The court's verdict, announced on March 26, exposed Chen's acceptance of bribes totalling over 81.03 million yuan during his tenure. Chen, who held influential positions within Shanghai International Port (Group) Co., Ltd. and the Chinese Football Association, abused his authority to facilitate illicit financial transactions. The court's ruling also shed light on other football corruption cases, including the sentencing of Yu Hongchen, former chairman of the Chinese Athletics Association, to 13 years in prison for his involvement in 54 instances of bribery, totalling more than 2.25 million yuan. A former key figure within the CFA, Chen Yongliang, faced a 14-year prison sentence for engaging in 51 instances of bribery over 8 years. Dong Zheng was Sentenced to 8 years in prison for accepting bribes exceeding 22 million yuan while serving as match coordinator for the Chinese men's national team. Lastly, in a case tied to sports venue management, Liu Lei received a two-and-a-half-year prison sentence for his abuse of power and corruption.
Saili Medical's Stock Plunges Amid Regulatory Scrutiny and Performance Concerns: Saili Medical (603716.SH) faced a tumultuous market opening on March 26, with its stock price hitting 7.96 yuan per share and witnessing over 34,000 closures. This followed a sudden announcement the previous day revealing the company's receipt of a "Notice of Filing" from the China Securities Regulatory Commission (CSRC), citing suspicions of illegal information disclosure. Despite a slight midday recovery to 8.18 yuan/share, accompanied by a 14.10% turnover rate, investor confidence remained shaken. Saili Medical had been riding the wave of excitement surrounding AI medical advancements, spurred by Nvidia's foray into the sector. However, underlying performance issues and regulatory entanglements cast shadows over its prospects. The company's projected net losses for 2023 range from 115 million to 150 million yuan, exacerbated by consecutive losses in 2021 and 2022 Moreover, recurrent breaches in information disclosure regulations drew fines and administrative measures from both the exchange and the Hubei Securities Regulatory Bureau. With Saili Medical striving for stability amidst market volatility, the spotlight intensifies on its ability to navigate regulatory hurdles and address fundamental performance challenges to regain investor trust and ensure long-term viability.
Gold Prices Surge to Record Highs Post Spring Festival, Driven by Global Factors: The gold market is ablaze with activity following the Spring Festival of the Year of the Dragon, as prices continue to soar, reaching unprecedented levels. International gold prices have surpassed US $2,200 per ounce, with domestic rates hitting new highs of 500 yuan/gram, and jewellery gold peaking close to 670 yuan/gram. A multitude of factors, including shifting expectations surrounding the Federal Reserve's monetary policy, robust central bank purchases globally, increased domestic consumer demand, and a quest for safe-haven assets, are propelling this surge. As the Federal Reserve gears towards an anticipated shift from rate hikes to cuts, industry experts foresee continued upward momentum for precious metals. Moreover, silver is mirroring gold's trajectory, experiencing a substantial 17.62% surge from February lows. Analysts predict a bullish outlook for both metals, emphasizing the potential for further gains amid ongoing economic uncertainties. Despite the optimism, investors remain cautious amidst rapid price escalations and await clearer signals from the Federal Reserve. Nonetheless, the prevailing sentiment suggests that while volatility may persist, the trajectory for gold remains upward-bound, underpinned by global economic dynamics.
China Files WTO Complaint Against US Over “Discriminatory” Electric Vehicle Subsidies: China has filed a formal complaint with the World Trade Organization (WTO) against the United States, alleging discrimination in its subsidies for electric vehicles (EVs). The Chinese Ministry of Commerce criticized the USA's Inflation Reduction Act, signed by President Joe Biden in 2022, which stipulates that EVs must undergo final assembly in North America to qualify for subsidies. According to China, this provision unfairly excludes products from China and other WTO members, distorting fair competition and violating WTO principles. This move exacerbates already heightened trade tensions between the two economic giants. Brussels has initiated an anti-subsidy probe into Chinese EVs, potentially leading to tariffs as high as double digits. Moreover, the US has raised concerns about data security risks associated with Chinese EVs, prompting its own investigation and the possibility of heavier import tariffs. The complaint precedes a scheduled visit by US Treasury Secretary Janet Yellen to China, where financial and economic issues will be discussed. With both nations entrenched in economic disputes, the outcome of this case could significantly impact global trade dynamics in the electric vehicle sector.
First National Security Case Denied Early Release in Hong Kong: Hong Kong's Chief Executive, John Lee, affirmed on Tuesday the denial of early release for Ma Chun-man, also known as "Captain America 2.0," marking the first case under the Safeguarding National Security Ordinance. Ma, convicted of inciting secession and serving a five-year sentence, was ineligible for reduction despite displaying good behavior. Lee clarified that Prison Rules now mandate denial of remission for those endangering national security unless approved by the Commissioner of Correctional Services, emphasizing this as standard practice. Simultaneously, the Hong Kong Correctional Services outlined amendments to post-release supervision for such offenders, emphasizing strict adherence to legal provisions. Legal experts, including Louis Chen and Willy Fu, underscored the seriousness of national security offenses, advocating for stringent sentencing measures in line with the rule of law. This development follows a landmark ruling by Hong Kong's top court in 2023, upholding a five-year minimum sentence for breaches of the national security law. Experts suggest these actions reflect a tightening of criteria post-Article 23 legislation, aiming to uphold national security while maintaining legal integrity.

SOCIAL MEDIA CHATTER IN CHINA

Son of Wealthy Snack Brand Owner Unaware of Family's Riches Until Graduation, Stuns Social Media: Zhang Zilong, 24, the son of Zhang Yudong, the founder of China's famous Mala Prince snack brand, revealed a surprising family secret to Jiupai News, stunning social media in mainland China. Despite his family's multimillionaire status, Zhang Zilong grew up believing they were financially struggling. His father kept their wealth concealed for 20 years, aiming to instill a strong work ethic in his son. Living in an "ordinary flat" in Hunan province, Zhang Zilong attended prestigious schools without leveraging family connections. Graduating from university with modest aspirations, he aimed for a 6,000 yuan monthly job to help repay imagined debts. Upon graduation, Zhang senior disclosed the family's affluence, relocating them to a lavish villa worth 10 million yuan. Despite their wealth, Zhang Zilong pursued a humble path, joining his father's company's e-commerce department. Expressing gratitude for his upbringing, Zhang Zilong aspires to expand the company internationally. While some online doubt the tale's authenticity, others cite Zhang's modest lifestyle as evidence. This narrative of hidden wealth echoes a similar story of responsible parenting, resonating with Chinese audiences fascinated by such tales.

INDIA WATCH

China's 5.2% GDP growth in 2023 showcased a robust recovery from the pandemic-induced slump, outperforming its 3% growth in 2022. However, despite this recovery, China's two-year average GDP stood at 4.1%, still below pre-pandemic levels, indicating the challenges of sustaining high growth rates amid evolving global dynamics. In contrast, India's economic narrative is marked by a strategic focus on technology-driven innovation, manufacturing diversification, and export competitiveness. While India's GDP growth may not rival China's figures, its emphasis on transformative reforms has laid a sturdy foundation for sustainable growth. Over the years, India has narrowed its CAD to 1.9% of GDP in fiscal year 2023, boasting foreign exchange reserves of US$568 billion. Inflation has been reined in at 5%, and the fiscal deficit is targeted at 5.9% of GDP for fiscal year 2024. India's digital economy also witnessed exponential growth, expanding 2.4 times between 2014 and 2019, generating approximately 62.4 million jobs. This turnaround amidst global challenges, including the pandemic, and geopolitical tensions, underscores the Indian economy’s resilience and strategic economic policies. Looking ahead, India's near-term growth outlook remains optimistic, with GDP expected to grow between 6.8% and 7.2% in fiscal 2024. However, challenges such as persisting inflation and global uncertainties necessitate continuous adaptation and innovation. Leveraging technological advancements, fostering investment climate, and prioritizing sustainability will be imperative in sustaining India's growth momentum and ensuring inclusive development in the years to come.

Prepared By

Aliza Mehdi

Aliza Mehdi is a final year student of Political Science at Indraprastha College for Women. Her academic areas of interest include Comparative Politics, Conflict Studies, Developmental Economics and Film and Television Studies, and is currently working as an Associate (Training and Development) at Pratarka - an education startup specialising in soft-skill development and pedagogical research for students. She is interested in politics, policy, design and writing, and is an active member of the DU varsity debating circuit.