CiCM 24th January 2024

NEWS IN CHINA

China's Central Bank cuts reserve ratio and interest rates: Significant steps to support economic recovery have been announced by the People's Bank of China (PBOC). These include a 0.5 percentage point reduction in financial institutions' deposit reserve ratios, which will take effect on February 5, 2024, with the exception of those having a 5% deposit reserve ratio. The weighted average deposit reserve ratio of financial institutions will be roughly 7.0% after this change. Furthermore, re-loan support for small enterprises, re-loan support for agriculture, and rediscount interest rates will all enjoy a 0.25 percentage point decrease beginning January 25, 2024. At a press conference in Beijing, PBoC governor Pan Gongsheng, along with Zhu Hexin, Deputy Governor of the People's Bank of China and Director of the State Administration of Foreign Exchange, and Xuan Changneng, Deputy Governor of the People's Bank of China, promised to use countercyclical adjustments to promote growth this year and to create good monetary and financial environment for the economy. The objectives of the central bank are to strengthen macro-control initiatives, implement prudent monetary policies with flexibility and effectiveness, improve inter- and counter-cyclical adjustments, maintain appropriate liquidity, coordinating the money supply and social financing scale with expectations for price levels and economic growth, and stabilising the RMB exchange rate at a fair and balanced level. The first cut to banks' reserve requirement ratios (RRR) this year comes as the world's second-largest economy tries to recover from COVID amid a housing crisis, local government debt problems, and waning global demand. It also occurs just a few days after the five-year lows reached by China's benchmark indexes, suggesting that even the last hopeful investors holding out hope for clarity and a potential economic recovery were giving up on the $9 trillion market.
Deadly 7.1 magnitude earthquake strikes remote Xinjiang region: Uchturpan county in Aksu Prefecture, a remote area of China's Xinjiang province experienced a strong earthquake of 7.1 magnitude, causing significant damage and at least three fatalities. The epicenter of the earthquake was 3,000-metres above sea level in a mountainous region, necessitating a quick launch of rescue operations aided by paramilitary forces. Owing to the small population of the area, officials declared that the mortality and injury situation was not serious despite the magnitude of the earthquake. Approximately 120 structures, mostly in outlying areas constructed by locals, incurred damage, including 47 collapses. Emergency survival kits were sent out to aid those displaced in the bitter cold as evacuations were put into place. There were tremors felt in neighbouring Kyrgyzstan and Kazakhstan as a result of the earthquake. In order to support Xinjiang's earthquake disaster relief efforts, the Ministries of Finance and Emergency Management immediately set aside 30 million yuan in central natural disaster relief funds. These funds were used to coordinate emergency rescue and disaster relief efforts, with a focus on search and rescue, victim transfer and resettlement, danger elimination and other emergency response, secondary disaster hidden danger investigation and emergency rectification, house repair, and other related activities. Moreover, the Ministry of Emergency Management, the Office of the National Disaster Prevention, Reduction and Relief Committee, and the National Grain and Material Reserves Bureau urgently allocated 22,000 cotton tents, quilts, cotton mattresses, folding beds, and heating stoves. In Kazakhstan and Xinjiang, classes were halted to give people time to recover from the shock. Although the area experiences frequent earthquakes, this most recent one is strikingly similar to the disastrous 2008 Sichuan earthquake and comes just after a deadly 6.2-magnitude tremor in Gansu province in December.
China's education system adapts to declining birthrate: To preserve high educational standards in the face of China's falling birthrate, policymakers and scholars are calling for a systematic reallocation of educational resources. Urban locations may initially be able to support large student populations, but given the recent sharp decline in the number of births, preemptive planning for future demographic changes is imperative. The provincial education department of Hunan issued a directive asking local governments to modify resource distribution according to changes in the birthrate, urbanisation patterns, and population of school age. Plans include for building additional kindergartens and daycare facilities in urban areas and in rural areas. Associate Professor Qiao Jinzhong predicts a significant drop of 30 million elementary and middle school students by 2035, which will result in a teacher shortage. Sichuan province wants to control the amount of education majors at universities in order to address this. Guangzhou keeps making infrastructural investments in schools to improve the caliber of education despite the demographic challenge. Local authorities stress that part of the larger adjustment to shifting demographic realities is the chance to lower class sizes and reuse spaces for better student-teacher engagement.
Chinese Vice Premier bolsters ties with Tanzania: At the invitation of the Tanzanian administration, Chinese Vice Premier Liu Guozhong travelled to Tanzania and held important talks about enhancing ties between China and Tanzania with President Hassan and Prime Minister Majaliwa. Liu expressed the warmest regards from Premier Li Qiang and President Xi Jinping, highlighting China's dedication to strengthening ties across a range of sectors. President Hassan and Prime Minister Majaliwa reaffirmed Tanzania's commitment to the one-China principle and complimented the beneficial effects of high-level contacts. Both sides indicated a need to improve practical cooperation, inter-party dialogues, and strategic alignment in areas such as infrastructure, tourism, medical care, agriculture, and the blue economy. The focus of the talks was strengthening the two countries' all-encompassing strategic cooperative cooperation, particularly in view of the approaching 60th anniversary of diplomatic relations. Liu visited the Cemetery of Chinese Experts Aiding Tanzania, paid his condolences there, and inspected several important sites, such as the Kikwete Heart Institute and the Tanzania-Zambia Railway's Dar es Salaam Station. The diplomatic mission serves as a testament to China's dedication to promoting long-term friendship and collaboration with Tanzania.
Deadly fire in street store in Xinyu City: On January 24, a street shop located in Jiangxi Province's Yushui District, Xinyu City, caught fire. 39 individuals have died and 9 have been injured in the tragedy thus far, while other people are still stuck. Following a preliminary investigation, the building's basement floor was being used for the repair of the cold storage. The construction workers' unlawful building caused the fire to start. Thick smoke flowed into the second story through the passage as the fire was too large to put out in time. Most of the individuals trapped are hotel guests and students taking part in a training programme. Chinese President Xi Jinping and Premier Li Qiang responded by issuing urgent directives that emphasised the need for prompt medical attention for the injured, support for the relatives of the fatalities, and a comprehensive inquiry into the accident's cause. Vice Premier Zhang Guoqing has been sent to supervise the accident reaction, along with pertinent officials. Rescue, medical, and investigation activities are being actively carried out by local authorities in Xinyu City and Jiangxi Province. While authorities attempt to deal with the fallout from the tragedy, the situation is still unfolding. In order to offer the injured victims of the recent tragedy with the finest treatment, the National Health Commission moved quickly to assemble a team of reputable specialists, including members of the Chinese Medical Association's Burn Surgery Committee and the National Trauma Medical Centre. Following the "four concentrations" idea, this team formed a collaborative treatment working group with the assistance of the local medical professionals. They carried out in-depth evaluations of injuries, participated in interdisciplinary consultations, and offered psychological support to the injured.

SOCIAL MEDIA CHATTER IN CHINA

Elderly Shanghai woman bequeaths $2.8 Million fortune to pets: A Shanghai woman called Liu has decided to leave her large $2.8 million inheritance to her beloved cats and dogs, bypassing her adult children. Feeling abandoned by her children while ill, Liu changed her will to assign a nearby vet clinic the responsibility of managing the upkeep of her animals and any future additions. Since direct succession to animals is illegal in China, the clinic must be designated as the administrator. The unusual choice has sparked an intense discussion on inheritance and family dynamics on the internet. Some show compassion and acknowledge Liu's decision because of what she saw as a neglectful family, but others wonder about the emotional cost of making such a choice. Alternatives are suggested by legal experts, who advise Liu to designate a reliable person to oversee the veterinary clinic's handling of the inheritance. The incident fits into a growing trend of unusual wills in China; last December, a Shanghai court upheld a will that left assets to a generous fruit stall owner instead of to family members. Discussions on social media platforms show differing perspectives on inheritance decisions and family dynamics; some people celebrate Liu's unorthodox choice, while others lament the strained parent-child bond.

INDIA WATCH

Low fertility rates have presented issues for China and India in recent years. With a record low birth rate in 2023, China's population has been falling, rapidly ageing, and becoming smaller. India's population growth has slowed down, too; from 5.6 in the 1970s to 2.5 in 2011, indicating a decrease in the country's overall fertility rate. Up until 2015, China had a one-child policy, which has since been increased to a maximum of three children, indicating a shift in the country's approach to population control. The nation has started experimental programmes in over 20 locations to encourage parents to share child-rearing responsibilities, get married, and have children at the right age. In addition, Chinese provinces have made housing subsidies, tax breaks, and free or heavily subsidised education available to those who have a third child. India, in contrast, has reached 2.1 replacement-level fertility, with a peak population estimate of 1.7 billion in 2064. Currently numbering over 900 million, the working-age population of the nation is projected to reach 1 billion within the next ten years. In the ensuing decades, India's share of the global working-age population is predicted to decline, giving way to a younger generation of workers rising from Africa. In light of China's declining birthrate, academics and officials are advocating for a methodical reallocation of educational resources in order to maintain high standards of education. States in India have very different fertility rates, with rural areas having higher fertility than urban areas. The median age in the nation is 28, which is over ten years lower than in China. In conclusion, low birth rates have presented problems for both China and India, but they have approached population management very differently. China has taken a number of steps to promote childbearing, while India has reached replacement-level fertility and is predicted to see the fastest rate of population growth in the next several decades.

Prepared By

Saranya Menon

Saranya Menon is a UG2 student at FLAME University, majoring in International Relations with a minor in Public Policy. Excited to apply academic knowledge, she is interning at ORCA to gain practical insights into foreign policy and looks forward to enhancing her understanding of International Relations through this internship.