CiCM 2nd February 2024

NEWS IN CHINA

Zhang Ke is the new director of China’s National Medical Security Administration: Zhang Ke has assumed the directorship of China's National Medical Security Administration, succeeding Hu Jinglin after a two-month vacancy. With a background in auditing and extensive experience at the National Audit Office, Zhang Ke is expected to bring valuable expertise to the role. Since its establishment in 2018, the National Medical Security Administration has played a key role in maintaining a stable national insurance participation rate, reaching around 95%, and overseeing an increase in total insurance funds from 2.14 trillion yuan to 3.09 trillion yuan between 2018 and 2022. Despite commendable achievements, challenges such as an ageing population and the need for stronger fund supervision persist. The recent National Medical Security Work Conference for 2024 highlights key goals, including long-term incentive mechanisms, poverty alleviation through medical insurance, and enhanced fund supervision. Zhang Ke's prior leadership in the Social Security Audit Department at the National Audit Office raises expectations of innovative measures focused on the audit and supervision of medical insurance funds. Aligned with broader efforts in China's medical anti-corruption initiatives, Zhang Ke's appointment follows Hu Jinglin's successful handling of 1.543 million violations, recovering 77.13 billion yuan in medical insurance funds. Zhang Ke's leadership is anticipated to provide fresh perspectives and potentially strengthen audit and supervision measures to tackle evolving challenges in the medical insurance sector.
IMF cautions on China's economic challenges: The International Monetary Fund (IMF) has raised concerns about the heightened uncertainty surrounding the Chinese economy, primarily attributed to the prolonged downturn in the property market. In a recent statement, the IMF urged Beijing to address gaps in economic and financial data, emphasising the critical need for transparency. The IMF's projections indicate a 4.6% expansion in China's Gross Domestic Product (GDP) for 2024, followed by a subsequent slow down to 4% in 2025. This deceleration is anticipated due to persistent challenges within the property sector, potentially impacting private demand, confidence levels, and imposing strains on local government budgets. Highlighting the potential for a more profound contraction in the property sector, the IMF presented a hypothetical scenario wherein GDP in 2025 could be 1.8% lower than the baseline projection of 4%. Despite China's economy surpassing expectations with a 5.2% growth rate in 2023, concerns persist due to a prolonged real estate downturn, a local government debt crisis, weak demand, and heightened geopolitical tensions. The IMF also underscored transparency issues, citing significant gaps in quarterly GDP data and concerns about off-budget entities. Moreover, the IMF flagged concerns about China's state intervention through industrial policies, potentially leading to excess capacity and an uneven playing field for private enterprises. The IMF also cautioned against the increasing use of domestic subsidies and trade restrictions, emphasising the risk of triggering retaliatory responses and global supply chain fragmentation.
Chinese officials tackle 42000 cases related to narcotics in 2023: During 2023, Chinese authorities effectively dealt with over 42,000 cases linked to narcotics offences, confiscating 25.9 tons of drugs, showcasing an upturn compared to the prior year. This increase followed a downturn in drug-related crimes in 2022, marking the lowest point in the last decade. The number of arrests also rose, with over 65,000 suspects apprehended in 2023, an escalation from the 53,000 arrests in the preceding year. China maintains stringent drug policies, governing the usage of 449 narcotics and psychotropic drugs, with the addition of 10 new substances in 2023, including etomidate, tramadol, and tegileridine. The majority of drugs in China are sourced from abroad, with approximately 92.3% of heroin, methamphetamine, and ketamine seized in 2022 having foreign origins. Authorities had previously cautioned about a potential surge in drug-related crimes post-pandemic. In 2023, efforts against drug trafficking focused on curtailing imports from Southeast Asia, involving collaboration between Chinese officials and counterparts in Myanmar, Thailand, and Laos. Over 2,900 drug importation cases were addressed in 2023, leading to the confiscation of 12.2 tons of illicit drugs at the border. Chinese public security officials even introduced rewards for the capture of fugitives involved in drug smuggling in northern Myanmar. The National Narcotics Control Commission reported a consistent decline in the number of drug users in China for five consecutive years, reaching 1.12 million at the conclusion of 2022.
Overtaking India, China leads a global surge in gold consumption: China has taken the lead as the world's largest consumer of gold jewellery, surpassing India. In 2023, Chinese individuals purchased 630 tons of gold jewellery, marking a significant 10% increase compared to the previous year, according to the World Gold Council's 2023 Report. This shift is attributed to the growing popularity of gold as a secure investment, especially in the face of challenges in China's real estate and stock markets. The People's Bank of China's surveys revealed that households are increasingly interested in saving money, and gold is considered a reliable store of value. In addition to individual buyers, China's central bank played a significant role, emerging as the largest single purchaser of gold in 2023. The bank added 225 tons to its reserves, the highest annual increase since at least 1977, contributing to the total gold reserves of 2,235 tons, which represents 4% of China's extensive international reserves. Despite concerns of potential headwinds in 2024 due to rising gold prices and a potential economic slowdown, the demand for gold remains resilient. The report highlighted that China's imports of gold for non-monetary purposes, including jewellery, reached 1,447 tons in 2023, setting a new record. The interest in gold is notably driven by young individuals from smaller cities, contributing to the surge in gold purchases even as prices rise, as they see it as a secure means of preserving wealth.
China-France diplomatic ties turn 60: This year marks the 60th anniversary of China-France diplomatic ties. The bilateral relations reflect remarkable growth, with trade surging over 800 times. France is now China's third-largest EU trading partner, and reciprocally, China is France's primary trading partner in Asia and seventh globally. This enduring economic cooperation has not only advanced both nations' economies but has also contributed significantly to global economic recovery. The economic synergy between China and France is evident in their complementary strengths—China excelling in manufacturing and electronics, while France shines in aerospace, nuclear energy, and high-end consumer goods. French products like Bordeaux wine find popularity in China, while Chinese home appliances gain recognition in France. France holds the title of Guest Country of Honor for the 2024 China International Fair for Trade in Services and the 7th CIIE, showcasing the deepening ties. French confidence in the Chinese market is underscored by the presence of over 6,000 French companies in China, with a cumulative investment exceeding $18 billion by the end of 2021. Ongoing projects such as L'Oreal's intelligent fulfilment centre, the Chinese-French Industrial Cooperation Park, Airbus's new assembly line, and Faurecia's electronics mega plant signify continued French investment and expansion in China. Additionally, the collaborative exploration of emerging sectors like green industries and clean energy contributes not only to bilateral economic development but also fosters global economic confidence and recovery.

SOCIAL MEDIA CHATTER IN CHINA

Online gaming platform Genshin Impact witnesses exodus of players: Popular Chinese online game Genshin Impact is facing mass departure of over one million users. Dissatisfied by the meagre New Year's gifts offered by the Genshin Impact, players have been exiting the game’s social media spaces. On the eve of Chinese New Year, Genshin Impact launched its Version 4.4 Special Program and revealed its plans to gift users a mere 3 “Intertwined Fates” as a token of appreciation. However, players weren't pleased with the idea. The gift was seen as stingy. Also, the fact that 3 “Intertwined Fates” are granted on every new year, made this ‘gift’ unexciting for the players. Another Chinese game from developer miHoYo called Honkai Impact 3rd has recently gifted a rare character to players for free. This disenchanted the Genshin Impact players even further. Underlining the mass exit of fans on social media, Weibo user Shuma Xiaoqiao posted screenshots comparing Genshin Impact’s social media account followers before and after the official gift announcement video was released. Genshin Impact has responded to the backlash by making a commitment to strengthen communication with its player community, recalculate rewards, and provide increased compensation.

INDIA WATCH

India's ongoing battle against narcotics - trends, challenges and policy measures: It's not just China that is grappling with narcotics and drugs. Illegal trading in narcotics and drugs is an equally big concern for India as well. In 2023, the number of cases registered under the Narcotic Drugs and Psychotropic Substances (NDPS) Act increased by 6% as compared to 2022. A major highlight of 2023 was the seizure of 77 kg of methamphetamine and the arrest of 12 foreign nationals. This has prompted a robust government response. The Narcotics Control Bureau (NCB), a critical agency under the Ministry of Home Affairs, spearheads efforts in operations, intelligence, and international collaboration against drug trafficking. Supported by the National Policy on Narcotic Drugs and Psychotropic Substances, the legal framework comprehensively regulates narcotic substances. Community policing initiatives actively involve local collaboration, creating awareness and encouraging reporting. The nationwide establishment of rehabilitation and de-addiction centres and campaigns like Nasha Mukt Bharat Abhiyaan (NMBA) underscores the government's commitment to providing support for individuals grappling with substance abuse, offering counselling, medical assistance, and vocational training. Educational campaigns targeting students emphasise the dangers of drug abuse and promote preventive measures. The government actively engages in international collaboration, partnering with agencies such as the United Nations Office on Drugs and Crime (UNODC) and neighbouring countries to strengthen intelligence sharing and address the transnational aspects of drug trafficking. Periodic legal reforms adapt to evolving challenges, enhancing punitive measures against drug traffickers. To further improve the situation, sustained efforts in community engagement, education, and international cooperation are crucial. Additionally, promoting research and development for innovative preventive strategies and fostering public-private partnerships for rehabilitation initiatives can contribute to a comprehensive and sustainable approach in combating narcotics offences in India.

Prepared By

Aachal Ashok Mishra

Aachal completed her graduation in Political Science from Banaras Hindu University. Currently she is pursuing her master's in Political Science from IGNOU. Her areas of interest revolve around international relations, foreign policy dynamics, defence and security. She has previously interned with the Council for Social Development and the Centre for the Study of Developing Societies.