Skip to main content

TRIVIUM CHINA: Tip Sheet China, Know China Better

Source: TriviumChina.com

1. China's blueprint to become tech superpower

On Wednesday, Vice Premier Liu He chaired the first meeting of the State Council’s leading small group on technology.

Top of the agenda: Reviewing the country’s Medium- to Long-term Plan for Science and Technology Development (2006-2020), commonly known as the MLP.

Some context: The MLP has provided the overarching framework for China’s technology policy for over a decade, funneling billions into research funding and subsidies for hi-tech industries.

With the MLP set to expire soon, it’s time for a new an update.

According to Liu, the stakes could not be higher:

“Scientific and technological innovation capacity will be the key factor determining comprehensive national strength and international competitiveness.”

Get smart: Because of the fast-moving nature of technological change, fifteen-year plans for science don’t work well. For instance, the MLP failed to anticipate the importance of big data and artificial intelligence.

What to watch: MoST will likely commission think tanks and research institutes to start preliminary research for the next plan soon. The issues that MoST asks them to research will give a sense of how the next plan might be structured.
 

READ MORE
Gov.cn: 刘鹤主持召开国家科技体制改革和创新体系建设领导小组第一次会议
 

FINANCE & ECONOMICS

2. China going all in on crypto

The central bank (PBoC) is ramping up its research into blockchain technology.

It has a new research lab in Nanjing, and recently established a company in Shenzhen to create a blockchain trade finance platform (Cointelegraph):

“The Digital Currency Research Lab established its fully owned subsidiary in the southern Chinese city of Shenzhen, also in collaboration with the municipal government.”“Shenzhen is reportedly slated to be the first city to test the PBoC’s ‘legal’ digital currency, and to provide the systematic preparation for its launch, including cooperation with the country’s regulators.”

Get smart: The PBoC is putting more resources into researching a national cryptocurrency than any other major central bank.

What’s driving the PBoC:Regulators hate current forms of cryptocurrency because such currencies operate beyond the control of the government. Bitcoin, in particular, is often used as a channel to get money out of China illegally.

Creating a nationally controlled cryptocurrency could solve those problems, while keeping the benefits of cryptocurrencies – lower transaction costs, faster settlement, and less fraud.

What to watch: It’s very likely China will be the first major economy with a widely used cryptocurrency.
 

READ MORE
Cointelegraph: China: Central Bank’s Digital Currency Lab Launches Research Center in Eastern Province
21st Century Biz: 独家丨央行在深圳设立金融科技公司,运营贸易金融区块链
 

POLITICS & POLICY

3. Africa week continues

The Forum on China-Africa Cooperation (FOCAC) concluded on Tuesday, but Wednesday in Beijing was still dominated by meetings with African leaders. 

According to last night’s evening news, Xi met with leaders from 12 countries on Wednesday:

CongoKenyaRwandaNigeriaMadagascarChadGuinea-BissauZimbabweTunisiaSao Tome and PrincipeAlgeriaMoroccoHe also met with the chairperson of the African Union.

Xi was not the only top official to press the flesh on Wednesday. All six of the other Politburo Standing Committee members also met with African leaders on Wednesday.

African leaders appreciate the attention (QZ):“[Rwandan] President Paul Kagame…said China understood Africa’s global position and engaged it as an equal partner.”“Kagame, who is a critic of foreign aid, praised Beijing’s “win-win” partnership.”“President Uhuru Kenyatta said Kenya ‘appreciates’ China’s support of the country’s development agenda.”“We are satisfied with the tremendous progress achieved in our bilateral cooperation, and continues to open up new areas of cooperation.”

Get smart: China is putting more effort than any other country into building ties with African states. That does not go unnoticed on the continent.
 

READ MORE
CCTV: 《新闻联播》 20180905 21:00
Quartz: “Satisfied” and “inspired”: All the ways African leaders praised their alliance with China
 

POLITICS & POLICY

4. Natural gas policy unlikely to avert a winter shortage

Last winter’s natural gas shortageleft many residents and businesses without heat and was a big embarrassment for the government.

That means boosting supplies of natural gas has become a high priority for policymakers.

To that end, on Wednesday, the State Council released opinions to promote natural gas use in China.

The opinions will promote several measures to increase supply, including:

Extending subsidies for unconventional gas explorationBuilding out the country’s natural gas pipeline networkBuilding more liquid natural gas (LNG) import terminalsIncreasing gas storage facilities

The government is right that a lack of infrastructure is a major bottleneck to increasing natural gas usage.

The problem is that it takes time to build infrastructure, so we could well see another gas squeeze this winter – especially if it is a cold one.

Businesses beware: The opinions explicitly state that in the case of gas shortages, priority should be given to residential users. That means that many businesses could be out in the cold this winter.
 

READ MORE
Gov.cn: 国务院关于促进天然气协调稳定发展的若干意见
Gov.cn: 国家能源局解读《关于促进天然气协调稳定发展的若干意见》
 

POLITICS & POLICY

5. Social security – just another tax

Business sentiment in China is dour. The economy is slowing, the trade war is biting, and private companies are struggling to get financing.

Businesses are also bracing for stricter enforcement of tax laws(see last three days’ Tip Sheet), which many companies have been skirting for years.

As part of that push, the State Administration of Taxation (SAT) is taking over responsibility for collecting social security contributions from businesses.The Ministry of Human Resources and Social Security had previously collected such payments.

What it means: Tax authorities have more visibility into a company’s books. So they will have a more accurate read on the amount of social security contributions that a given business should be making.

Some context: Social security payments add roughly 30% to an employee’s salary. The contributions are so onerous that less than 40% of businesses are fully compliant.

Get smart: This move will push costs up for a lot businesses. Most domestic commentators are calling for a cut to the size of fees to offset the pain.
 

READ MORE
Caijing: 社保征管大变革:税务部门全面接手 企业社保成本或增加?
Economics Daily: 多地追补少缴、欠缴社保费 税务统征变在哪
Yicai: 事关所有人的钱袋子!社保征缴改革的企业忧虑与专家建议
 

HIT US WITH YOUR BEST SHOT.

If the Tip Sheet isn't the best thing in your inbox every day,
we'd like to know why.

hq@triviumchina.com

Comments

Popular posts from this blog

Balochistan to establish first medical university

https://www.dawn.com/news/1366135

The Newspaper's Staff CorrespondentOctober 25, 2017QUETTA: The provincial cabinet on Tuesday approved the draft for establishing a medical university in Balochistan.Health minister Mir Rehmat Saleh Baloch made the announcement while speaking at a press conference after a cabinet meeting.“The cabinet has approved the draft of the medical university which would be presented in the current session of the Balochistan Assembly,” he said, adding with the assembly’s approval the Bolan Medical College would be converted into a medical university.Published in Dawn, October 25th, 2017

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میںPlease help the deserving persons...Salary:Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows;Welder: Rs. 1,700 dailyHeavy Duty Driver: Rs. 1,700 dailyMason: Rs. 1,500 dailyHelper: Rs. 850 dailyElectrician: Rs. 1,700 dailySurveyor: Rs. 2,500 dailySecurity Guard: Rs. 1,600 dailyBulldozer operator: Rs. 2,200 dailyConcrete mixer machine operator: Rs. 2,000 dailyRoller operator: Rs. 2,000 dailySteel fixer: Rs. 2,200 dailyIron Shuttering fixer: Rs. 1,800 dailyAccount clerk: Rs. 2,200 dailyCarpenter: Rs. 1,700 dailyLight duty driver: Rs. 1,700 dailyLabour: Rs. 900 dailyPara Engine mechanic: Rs. 1,700 dailyPipe fitter: Rs. 1,700 dailyStorekeeper: Rs. 1,700 dailyOffice boy: Rs. 1,200 dailyExcavator operator: Rs. 2,200 dailyShovel operator: Rs. 2,200 dailyComputer operator: Rs. 2,200 dailySecurity Supervisor: Rs. 2,200 dailyCook for Chinese food: Rs. 2,000 dailyCook…

Germany’s Siemens sets up Belt and Road office in Beijing

https://gbtimes.com/germanys-siemens-sets-up-belt-and-road-office-in-beijing
Germany’s Siemens sets up Belt and Road office in Beijingby Janne Suokas Mar 23, 2018 15:20 TRADEINVESTMENTBELT AND ROAD INITIATIVEGerman industrial and engineering group Siemens will set up a Belt and Road office in Beijing. surberFlickrCC BY 2.0
German industrial and engineering group Siemens will set up an office in Beijing to boost international cooperation under China’s Belt and Road initiative, the company said on Friday.The move will help strengthen Siemens’ cooperation with Chinese and international companies and expand business opportunities brought about by the Belt and Road initiative, according to the company’s statement.The Belt and Road initiative is China’s ambitious project to boost trade and infrastructure investment in more than 65 countries along the ancient Silk Road trade routes from Asia to Europe and Africa.Siemens said it had already partnered with hundreds of Chinese companies in overse…