Dialogue China BriefingAbout China TodayJuly 1st, 2023 – Issue 134In This IssueThe articles translated here do not necessarily reflect the views of Dialogue China Briefing or Dialogue China. Feature Story:Notes on the Establishment of the June 4, 1989, Tiananmen Square Massacre Memorial Hall in New York City Think Tank Opinion:The Gray Rhino, a Threat That Some People Choose to Ignore,  Is Running Wildly Over a Cliff, Blazing a Path for China’s Steep Economic Decline Policy (Public Opinion within the Great Firewall):Why is Suzhou Focusing on this Financial Innovation? Politics (Public Opinion within the Great Firewall):Local Chinese Communist Party Committees and Local Economic Development Finance and Business (Public Opinion within the Great Firewall):Prices Fall Steeply as Hundreds of Thousands Flee the Housing Market. Why is the Chinese Property Market So Cold? Three Misconceptions about the Unemployment Rate among Chinese Youth Viewing the True Chinese Real Estate Market From Three Different “Perspectives”  Feature Story Notes on the Establishment of the June 4, 1989, Tiananmen Square Massacre Memorial Hall in New York CityWang Dan – Radio Free Asia – June 5, 2023 The June 4, 1989, Tiananmen Square Massacre Memorial Hall in Manhattan (Yu Dahai)On June 2, 2023, the June 4, 1989, Tiananmen Square Massacre Memorial Hall officially opened in New York. I know many of our listeners are interested in the development of the Memorial Hall, so I would like to talk about several related things. The first is the significance of the Memorial Hall. As everyone knows, in the spring of 1989 countless young Chinese patriots took to the streets and raised their voices in a call for democracy.  At that time, the Chinese had an opportunity to embark on a path of civilized development and become a responsible power in the international community. But the gunfire and bloodshed of June 4, 1989, shattered the dreams of the Chinese people. Since then, China has been characterized by growing state power but a loss of freedoms for the people. What happened in 1989 affected not only China but the entire world. Today, as the world begins to wake up to the threat to human civilization posed by the Xi Jinping regime, we should recognize that it all began in 1989. The stirring democratic movement and the brutal and ruthless military crackdown were not only a turning point in the development of democracy in China but also the true origin of the current global crisis. This event is not only a link to the past but also to the present and the future. Therefore, it should be remembered by all of us. Remember those who gave their lives. Remember the Chinese people’s dream of democracy as well as their sacrifices. Remember the true face of the Chinese Communist Party. That is why we are building this Memorial Hall. Second, on behalf of the June 4, 1989, Tiananmen Square Massacre Memorial Hall Organizing Committee, I would like to express my thanks to all those who supported the establishment of this Memorial Hall for your donations and gifts of artifacts and to all the young volunteers who contributed to the Washington DC June 4, 1989, Special Exhibition and the design and installation of this Memorial Hall in New York. They risked repression by the Chinese Communist authorities and worked tirelessly to build the museum, devoting a great deal of time and energy without receiving any compensation. Such dedication and enthusiasm – in my opinion – represents a continuation of the spirit of 1989! Third, on behalf of the June 4, 1989, Tiananmen Square Massacre Memorial Hall Organizing Committee, I would like to announce that the Organizing Committee has decided to appoint Mr. Yu Dahai as director of the Memorial Hall. During the past year or so of preparatory work, Mr. Yu Dahai has demonstrated outstanding leadership and he has devoted a tremendous amount of time and energy to this endeavor. Without him, this smooth opening of the June 4, 1989, Tiananmen Square Massacre Memorial Hall could not have occurred. Today, we declare the conclusion of our preparatory work. Going forward, the planning and development of the Memorial Hall will be the sole responsibility of Director Yu and his team. As the initiator and convener of the Memorial Hall Organizing Committee, I now consider that our duties on the Committee have been completed. In the future, as chairman of the Memorial Hall Board of Directors, I will of course do my best to assist Mr. Yu Dahai in his work, but for any specific questions about the Memorial Hall, please contact Director Yu on our official website. I am sure he will lead the Memorial Hall to bigger and better accomplishments. Fourth, although the June 4, 1989, Tiananmen Square Massacre Memorial Hall has been successfully established and has received considerable attention from the outside world, I remain cautiously optimistic about its future development. I say cautiously because our current funding will only cover rent for a maximum of two years, and we will need continued external support to keep the Tiananmen Square Massacre Memorial Hall sustainable. Our second fundraising goal for the Memorial Hall is US$1.5 to $2 million, and if we can meet this goal, we will be able to purchase a permanent location. Only then will the Memorial Hall be able to exist for the long term and will we be able to make long-term plans. So, to paraphrase an old saying, “The revolution has not yet succeeded, comrades still need to work hard.” We are willing to work with our supporters to preserve the historical memory and continue to move forward.Think Tank Opinion A Gray Rhino, a Threat That Some People Choose to Ignore, Is Running Wildly Over a Cliff, Blazing a Path for China’s Steep Economic DeclineEditorial Board – Dialogue China Briefing – July 1, 2023 How did the real estate market, which has always been regarded as an important pillar of the Chinese economy, end up in its current situation? (Getty Images)Following the phenomenon of zero downpayments for turnkey apartments, since May 2023 China has witnessed an unprecedented number of “negative downpayment” home purchases. Advertisements for “zero downpayments, subsidies of ¥60,000 yuan” and “downpayments of negative ¥10,000 yuan” can be seen everywhere, and many cities, such as Foshan and Huizhou in Guangdong province, Changchun the capital of Jilin province, and Chongqing in Sichuan province, among others, are competing to offer subsidies to purchase a home. For a ¥5.2 million yuan property in Luohu, Shenzhen, of Guangdong province, a real estate agent advertised that although a new house was appraised for ¥5.7 million yuan, after signing the contract the new owner not only did not have to pay out of his own pocket, he could also take away a  ¥500,000 yuan subsidy from the bank. There is only one reason for such sales promotions – falling housing prices. According to the China Real Estate Index System, in May 2023 the average price of new and pre-owned homes in 100 Chinese cities fell, both month on month and year on year. The price of new homes in 54 cities fell from the previous year as did the price of pre-owned homes in 83 cities. Prices of new homes in 100 Chinese cities, May 2023 Gray Bar: Average price (yuan/m2) Red Line: Month-on-month growth Source: China Real Estate Index System Prices of pre-owned houses in 100 Chinese cities, May 2023 Gray Bar: Average price (yuan/m2) Red Line: Month-on-month growth Source: China Real Estate Index SystemHow did the Chinese real estate market, which has always been considered an important pillar of the Chinese economy, end up in such a situation? According to Li Hengqing – an economist at the Potomac, Maryland–based Informatics and Strategies Institute – housing prices, like those of any commodity, are determined by supply and demand. Although Chinese information is neither public or transparent,  after bringing together some scattered data, we can find some clues to answer this question.  In January 2023, the National Bureau of Statistics announced that China now has negative population growth. In February 2023, the Ministry of Housing and Construction revealed that there are 600 million residences in the country. April 2023 data from the Department of Human Resources and Social Security show rising unemployment rates among college graduates and youth. In June 2023, the Ministry of Civil Affairs announced that only 6.83 million couples were married in China last year, the lowest rate since 1986. Taken together, it is easy to see from these statistics that the demand for housing in China has shrunk dramatically. Because young people could no longer support an appreciation in real estate prices, housing values were bound to fall. In addition, policy support from the Xi Jinping regime for the real estate market has weakened, thus making it ever more difficult to maintain the previous inflated real estate bubble. Falling home prices mean shrinking equity for homeowners and real estate developers. To accelerate the returns on investment, developers must reduce sales prices, further affecting the ability to repay loans. And when the value of a home goes “under water” – falls below the outstanding balance of the housing loan – buyers are forced to default on their mortgages. In the second half of 2022, China saw massive mortgage defaults. At the same time, due to the mentality of buying in up-markets and not buying in down-markets, falling home prices brought transactions to a halt. As a result, banks are difficulties in recovering their mortgage loans, thus furthering the credit squeeze. All of this will backfire on the real estate market, creating a vicious cycle of negative feedback. The real estate industry has been one of the engines of China’s economic growth during the past 20 years. Upstream and downstream links drive a total of 47 industries, from cement to rolled steel and other building materials, home renovations, household appliances, home furnishings, and so forth. In 2022, real estate and related industries accounted for 13–14 percent of China’s total economic output. Burdened by the declining real estate market, this year these upstream and downstream industries have atrophied. According to scholar Li Hengqing, the downturn in the real estate sector has led to a contraction in related industries, which will eventually lead to an economic decline that will inevitably further affect the political situation in China. Recently, Xi Jinping has relentlessly been requiring that the Chinese Communist Party embrace his ideas “into the brain, into the heart, and into the soul.” This is unmistakable evidence that Xi’s ability to govern is facing internal challenges. Xi Jinping hopes to brainwash the people and to promote a personality cult through such superstitions in an attempt to prove the validity of his policies. In terms of the livelihood of the average Chinese, an increasing number of people, especially young people, are losing their jobs, and many working people have suffered significant wage cuts. Civil servants and employees of Internet companies in the developed regions have seen their incomes drop precipitously in recent times. Just as the falling of one leaf heralds the coming of autumn, people are anticipating that tough times will be forthcoming. At the same time, on June 8, 2023, during an inspection visit to Inner Mongolia, Xi Jinping suggested that “internal circulation” (promotion of domestic consumption) will ensure that the national economy can run smoothly during periods of crisis. Li Hengqing believes that if the economy continues to decline, Xi Jinping will probably divert public attention by stirring up nationalist sentiments, thus  increasing the possibility that the Communist Party will launch a war against Taiwan. If there is a war, as a matter of course it follows that everyone will have to tighten their belts and live more frugally under military control, economic planning, and collective distribution. In conclusion, in terms of policy recommendations, Li Hengqing emphasizes that China’s current investment environment is relatively perilous, and foreign investors should fully evaluate the risks and rewards and invest with caution. Western governments should continue to tighten their risk ratings of the Chinese market, strengthen control and management of investments in China, and increase supervision of bonds, for example, by banning investments in China by public retirement pensions, in order to avoid bringing about large-scale economic losses.Policy (Public Opinion within the Great Firewall) Why is Suzhou Focusing on this Financial Innovation?Feng Congying – Southern Weekend – May 25, 2023 Changshu, Jiangsu province, announces that the wages of all civil servants will be paid with digital renminbi currency. (huxiu.com)Summary: By the end of 2019, digital RMB pilot sites had been launched in Shenzhen, Suzhou, Xiong’an New Area, Chengdu, and the Winter Olympics. By April 2023, such digital RMB pilot sites had been expanded to 17 provinces (cities), including Beijing and Shanghai, and as of 2023, Suzhou, in Jiangsu province, led the country in all core indicators of the pilot program. At present, Suzhou’s manufacturing industry is large in scale and has a diverse range of industries. These industries will require an infusion of financial “vitality” or “capital injections” to further support their development. By exploring the addition of smart contract technology, banks can specify the scenario for the use of digital RMB loans, making loan risks more controllable. In addition, automating payrolls in the form of digital RMB will address the problem of enterprises delaying or failing to pay the salaries of their employees. （Read The Original Text）Policy (Public Opinion within the Great Firewall) Local Chinese Communist Party Committees and Local Economic DevelopmentGuo Wan and Zhang Bo – The Political Scientist – June 2, 2023 Li Qiang, Communist Party Secretary of Shanghai, 20th Communist Party National Congress, October 2022. (Associated Press)Summary: Chinese Communist organizations at all levels are important forces promoting the realization of economic development. The mechanism of local communist party committees leading economic work is an important link and a key factor, playing a pivotal role in upward and downward transmissions and horizontal coordination. Local communist party committees make comprehensive use of multiple mechanisms, such as strategic planning mechanisms, mechanisms for setting up and allocating functions, mechanisms for promoting economic operations, mechanisms for selecting economic talents, and mechanisms for optimizing and safeguarding the economic environment, to promote the common efforts of the government, market entities, society, and other subjects, thus forming a synergy to achieve long-term stable and healthy economic development.（Read The Original Text）Finance and Business (Public Opinion within the Great Firewall) Prices Fall Steeply as Hundreds of Thousands Flee the Housing Market. Why is the Chinese Property Market So Cold?Xie Jiu – Sanlian Life Weekly – June 3, 2023 In recent months, enthusiasm among Chinese for buying homes has dropped sharply. (Getty Images)Summary: Since April 2023, the volume of housing transactions in major cities across the country has plummeted and prices have begun to fall significantly. What is more noteworthy is that this cooling of the housing market is no longer taking place only in third- and fourth-tier cities; rather, it is also occurring in first-tier cities where prices have always been firm. The myth that there are continuous price increases Beijing, Shanghai, Guangzhou, and Shenzhen is being shattered. Due to multiple factors, real estate is increasingly flooding into the market. Even in first-tier cities, the number of pre-owned listings, which have been considered to be in short supply, has now hit a record high and it is still growing rapidly. With supply growing bigger and purchasing power becoming weaker, China’s property market is taking an unprecedented turn for the worse.（Read The Original Text）Finance and Business (Public Opinion within the Great Firewall) Three Misconceptions about the Unemployment Rate among Chinese YouthMan and God Working Together  – Man and God Working Together – May 30, 2023 On April 21, 2023, a corporation tours large and medium-sized cities throughout the country to recruit employees. (Xinhua News Agency)Summary: When it comes to the high unemployment rate among young people, the media cite many examples of university graduates who cannot find jobs. When it comes to the rise in youth unemployment, many people think of the poor business performance, massive layoffs, business closures, and bosses running away with the money. When it comes to youth unemployment, parents worry that their children who are still in school will find it difficult to find jobs and will carry a heavy burden. Since the rising youth unemployment rate is a new problem, some places are not as serious as people think they should be, and not enough attention is being paid to the serious unemployment problem. In this article, based on publicly available research data, we analyze these three problems and offer some suggestions to those young people who are about to face the problem of unemployment.（Read The Original Text）Finance and Business (Public Opinion within the Great Firewall) Viewing the True Chinese Real Estate Market From Three “Perspectives”Liang Yunfeng – Qin Shuo Friends Network – June 6, 2023 When observing the true Chinese real estate market, is it like viewing flowers in the mist or looking at a leopard through a bamboo pole? (Getty Images)Summary: China’s real estate market has undergone significant changes. Against the background of the numerous news reports, it is difficult to discern the true state of this market. This article provides a few case studies. The first comes from Hangzhou, where the keywords are rumors of layoffs and pressures on pre-owned housing. The second is from Shanghai, where the keywords are policy “bonuses” and the re-emergence of new property sales. The third concerns the situation for property developers, where the keywords are the onslaught of a tide of delistings and first-tier developers hanging on by a thread. All in all, the current core national policy on real estate can now be described as “supporting without lifting.” The policy is intended to slowly resolve the risks by exchanging time for space. But the decline in the prices of pre-owned homes and the wave of delistings by developers often lead to bankruptcies as well as the failure of numerous projects. It is time to prepare early for these risks.（Read The Original Text）

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