Dialogue China BriefingAbout China TodayOctober 1st, 2023 – Issue 140Topics in This IssueThe articles translated here do not necessarily reflect the views of Dialogue China Briefing or Dialogue China. Feature StoryAnti-Corruption in the Pharmaceutical Industry Is a New “Three Anti” and “Five Anti” CampaignThe Black Hole of Data That Devours the Legitimacy of the Regime: The Chinese Communist Party Already Has One Foot in the Hole Policy/Politics (Public Opinion within the Great Firewall)From “Local Unity” to “Local Organization”: The Organizational Power of Village Live StreamingCan You Objectively Assess What China Has Brought to Africa? Finance and Business (Public Opinion within the Great Firewall)The 2023 State of Foreign Capital Investment in China: Capital from the Mideast is Most Willing to Spend Money, Singaporean Capital Invests in Hard Science and TechnologyThis is the Worst Advice I Have Ever Heard About Facing the Dangers of UnemploymentA College Professor’s “Career Change” to Takeout Delivery Services Is a Record of a Harsh Social Reality Feature Story Anti-Corruption in the Pharmaceutical Industry Is a New “Three Anti” and “Five Anti” CampaignWang Dan – Radio Free Asia – August 28, 2023 Patients view a list of specialists at a hospital in Shanghai (Associated Press)On July 28, 2023, the Central Commission for Discipline Inspection of the Chinese Communist Party (CCP) and the National Supervisory Commission convened a video conference on “The Problem of Corruption in the Medical Sector and Mobilization of Centralized Remedial Work,” requiring that discipline inspection and supervisory organizations at all levels “keep a close eye on leading cadres and key position holders, insisting that accepting bribes and bribery be investigated together, and focusing on investigating and dealing with a number of corruption cases in the field of medicine to create a deterrent effect.” As a result, a political campaign called “Fighting Corruption in the Medical Field” was officially launched. The political campaign involves investigation into the accounts of more than 30,000 hospitals and more than 10,000 village and township local health organizations. As of August 12, 2023, the central and local commissions for inspecting discipline reported that at least 176 current and former hospital presidents and party secretaries had been investigated, more than twice the number of those investigated in the entire previous year. Zhou Wei, chairperson of the leading pharmaceutical enterprise Weiling Health, and Fan Zhihe, chairperson of Sailun Bio, have been investigated. The most expensive case so far involves Xu Bo, director of the interventional catheterization unit at Fuwai Hospital of the Chinese Academy of Medical Sciences in Beijing, who was involved in receiving kickbacks amounting to RMB 1.2 billion. Officials claim that the current anti-corruption campaign is part of a “comprehensive, full-chain, full coverage” investigation. Investigations into both offering and accepting bribes look at accounting books going back 20 years. Why do we call this a political campaign? 1.) It is a top-down initiative by the judiciary based on unified political mobilization rather than targeting individual cases. 2.) The campaign calls for “concentrated efforts” to investigate and to deal with the cases, meaning that it is an organized and planned action targeting the entire industry rather than specific individuals. 3.) The so-called “building up of momentum” indicates that the purpose of the campaign is to serve as publicity, thus further highlighting the political aspects of the campaign. The above features are reminiscent of the “Three Antis” and “Five Antis” campaigns launched in 1951 and 1952 against private industrial and commercial sectors, including the medical industry. The former campaigns were launched by Mao and the CCP under the banner of combating corruption and waste, but in reality they were political campaigns to deprive the bourgeoisie of their assets and to promote public ownership in order to solve the financial difficulties during the early years after the founding of the nation. A closer look reveals that the motives for the current “anti-corruption campaign in the medical industry” are similar to those of the “Three Anti” and “Five Antis” campaigns. During the last decade, Xi Jinping has been trying in succession to rectify the three major industries related to people’s livelihoods : in 2016, he put forward the idea of “housing without speculation,” which led to the current collapse of the real estate industry. In 2021, he cracked down and wiped out the entire tutoring industry. And now he has started to act against the health-care industry. The reason for targeting these three industries is that they have reaped or are still reaping huge profits. To put it bluntly, the current political movement actually represents an interplay of interests between the power elite and the industrial groups. The former seek to deprive the latter of their interests by “robbing the rich” in order to solve the financial difficulties brought about by the current economic downturn. To give one example: on August 10, 2023, the official website of the Central Commission for Discipline Inspection released a video entitled “Supervision is Visible – Guard Your Health- Insurance Wallet.” The film takes Jinguoping township, in Badong county of Hubei province, as a case study. The protagonist is the director of the local township discipline inspection and supervision office, Shui Xingxing, who led a team to conduct an “unreasonable special medical inspection” of local hospitals.  The team found that two medical institutions overcharged RMB 28 and RMB 63 respectively for potassium and calcium tests, amounting to a violation of RMB 3.03 million for regulatory non-compliance.  The hospital director was verbally admonished and administratively sanctioned on the basis of the film, and the moneys were refunded to the Financial Services Bureau. But shouldn’t have the overcharged amount been returned to the patients who overpaid? Why did this money go to the Treasury instead of to the patients? This model publicity campaign has thus inadvertently revealed the true objective of the political campaign. It is true that there are serious problems of corruption in the medical industry and there is a great deal of public discontent, but the existence of these problems is not a recent phenomenon. Why was there never such a large-scale and concentrated anti-corruption campaign in the past? Furthermore, the existence of corruption is fundamentally the result of the lack of a democratic system, especially the lack of monitoring by the public. The authorities have done nothing to address this problem, so how can corruption really be eradicated in this way? Obviously, this so-called “anti-corruption” campaign is a political campaign to redistribute property by political means in order to alleviate the financial difficulties.Feature Story The Black Hole of Data That Devours the Legitimacy of the Regime:  The Chinese Communist Party Already Has One Foot in the HoleJo – Think Tank Briefing – October 1, 2023 An invisible black hole is appearing throughout Asia, gradually swallowing up increasingly more of the truthIn August of this year, the National Bureau of Statistics of China (NBS) announced that in order to improve the statistical methodology of the labor force survey, it would suspend publication of the youth unemployment rate. The public reacted in an uproar. There is an old Chinese saying that family shame should not be publicized. But no one thought that this old saying could be used to deal with China’s economic problems. According to previous data, China’s youth unemployment rate has been on the rise since the beginning of 2023, surpassing 20 percent in April and surging to 21.3 percent in June. However, it is not difficult to realize that since 2019, when the CCP began to hide evidence of the traceability of the Covid epidemic and to cover up the number of deaths, “hiding data” has become a typical approach. An invisible black hole is appearing throughout Asia, gradually increasingly devouring more of the truth. Black Hole Part 1: Figures from Land-Sale Transactions  Real estate has been one of the pillar industries in China’s economic development during the past decades, with real estate and related industries accounting for more than 17 percent of China’s GDP during the past 20 years. The NBS has been releasing real estate data monthly since 1998. However, starting in 2023 it stopped publishing statistics on the amount of land purchased by developers as well as statistics on purchase prices; it now only publishes statistics on the growth rate of development investments and on the area of sales.  According to data released in January of this year, in 2022 the area of land purchased for real estate development plummeted 53.4 percent year on year, the price of land transactions plummeted 48.4 percent, and the previously booming revenue of local governments from land sales decreased by 23 percent, suddenly extinguishing the fire. Black Hole Part 2: Foreign Exchange Reserves Evaporate into Thin Air Foreign trade is one of the three driving forces behind China’s economic development, and the Chinese government has always been very high-profile with respect to the trade surplus. However, if we break down the recent foreign trade figures, some peculiarities emerge. From 2020 to 2022, China’s net inflows of trade and foreign direct investments amounted to US$2 trillion, but strangely, this huge figure does not appear in any of the annual foreign exchange data, including the foreign exchange reserves, foreign exchange deposits, foreign exchange settlements, or foreign exchange account balances. Additionally, Hong Kong’s foreign exchange funds basically did not grow at all during the same period. Going back in history, it is not difficult to see that in June 2014, the officially reported amount of foreign exchange reserves amounted to nearly US$4 trillion, but in December 2016 the figure was reduced by a full US$1 trillion. However, during this same period, the official statistics show that foreign trade earned nearly US$1.5 trillion. China has never officially announced the specific composition of its foreign exchange reserves, and some analysts have pointed out that a portion of these disappearing funds is due to capital flight. Brad Setser, a former economist in the US Department of the Treasury, has pointed out that half of China’s foreign exchange reserves do not appear on the central bank’s official income and expenditure account.  Instead, they are concealed and these “shadow reserves” are typically used within the assets of national commercial lending institutions and policy banks.. Black Hole Part 3: Data on Foreign Institutional Bond Trading  Capital flight not only directly affects foreign exchange reserve data but also bond trading data. In March 2023, China’s financial regulator suddenly asked currency brokers to suspend transfers, leading to chaos in China’s bond market. In May of the previous year, China also suddenly announced that it would stop updating the daily bond trading data of foreign institutions.  Since 2022, foreign investors have begun to significantly reduce their holdings of Chinese bonds. Insiders believe the main reason for ending the data updates is the sharp depreciation in the value of the renminbi and the  massive capital outflows. Black Hole Part 4: Knowledge Network Databases In addition to hiding economic figures, vast amounts of information are also being hidden. On April 1 of this year, the China National Knowledge Infrastructure (CNKI) announced that it would be suspending access to foreign visitors. CNKI is the largest academic database in China, storing Chinese government reports, academic journals, and dissertations since 1915 and covering a wide range of fields, such as politics, economics, social sciences, and science and technology. It is the source of much of the data used in overseas research reports and references. According to reports, the Chinese Communist Party’s Office of Internet Information Technology initiated a review of CNKI last year and concluded that the database held a large amount of important data and sensitive information related to national defense, industry, telecommunications, traffic and transportation, natural resources, health, finance, and other areas. Immediately following the September 1 release of the Measures of Security Assessment for Data Export, which require enterprises that provide important data outside of China undergo a data security assessment. This is the main reason for the so-called “temporary” closure of CNKI.   Black Hole Part 5: “Eye in the Sky” for Information On July 15, 2022, the “Eye in the Sky Surveillance” service platform with 150 million users announced its closure; users can no longer place orders or post any demands; platform merchants must also withdraw from the “Eye in the Sky Surveillance” website. The department being shut down is a third-party service platform that provides bookkeeping, operations management, intellectual property rights, and legal services for individual industrial and commercial clients. Before the closure, the service platform covered more than 2,000 nationwide cities and counties. Founded in 2014, “Eye in the Sky Surveillance” is best known for providing users with access to corporate information. Internet users, without having to register, can obtain basic information about registered enterprises in China, including information on the investor, legal person, registered capital, place of registration, and the relationship between the company and the investor. It is a common tool used by many news media. At the end of January 2018, the company launched its ‘Business Headline’ tool to provide business information to the media, and, according to statistics, during the first six months of 2019, more than 640,000 Chinese media reports used data from the platform. The search services currently cannot be used overseas. The content ranges from macro statistics to private-sector data, and from so-called sensitive information to general corporate information. In the face of the economic downturn, the CCP has practiced to the fullest the old adage that “family scandals should not be publicized.” Wang Tiancheng, Director of the Institute for China’s Democracy Transition and editor-in-chief of China Journal of Democracy, has pointed out that during the past few decades, the CCP has relied on the rapid development of the Chinese economy to maintain regime legitimacy. Once the data fall short of expectations, the CCP authorities will become worried. As we know, economic operations are cyclical. In multi-party democracies, a downturn in the economy will only be unfavorable to the incumbent government’s electoral fortunes, potentially leading to a change in power, but it will not lead to a regime crisis. However, in China’s authoritarian dictatorship, where the ruling party and leaders cannot be replaced through elections, policy mistakes cannot be corrected through government turnover. Therefore, any downturn in the Chinese economy will directly threaten the authoritarian system and the regime itself, leading to public questioning of the legitimacy of CCP rule. China’s economy has been falling off a cliff since the pandemic, especially after the end of the COVID-zero policy, and it has not yet rebounded, so the CCP is being forced to hide increasingly more data. A bigger dilemma is that the CCP will never engage in self-criticism in order to stay in power and therefore it will find it difficult to reverse its current misguided policies – such as its crackdown on the private sector – thus making it extremely difficult to repair the economy. According to Wang Tiancheng, a turning point in the crisis will come if the economy cannot be repaired and social needs cannot met for a long time. The public will gradually lose confidence in the leaders, and once this happens, it will be easy for the public to engage in collective civil disobedience. Doubts about the competence of those in power will gradually grow, leading to divisions and even to small groups seeking to re-establish regime legitimacy. However, this does not mean that China is about to undergo a democratic transformation. According to Wang Tiancheng, democratic transformation does not occur naturally; rather, it requires that the people take action and have the power to tear down and shake up the regime, and ultimately to realize self-liberation. Under these circumstances, Wang Tiancheng admits that the CCP will most likely continue to tighten its domestic surveillance and control. He has called on Western media to continue to pay attention to the situation in China. International attention can convey real information, which can break the CCP’s information blockade and enable the Chinese people to be more aware. At the same time, Wang hopes that Western governments and human rights organizations will continue to support Chinese democracy and human rights activists and urge the Chinese government to respect the values of democracy and human rights. Policy/Politics (Public Opinion within the Great Firewall) From “Local Unity” to “Local Organization”: The Organizational Power of Village Live StreamingXu Tingting – Journalism Bimonthly – August 24, 2023 An agricultural cooperative in Chongqing sells oranges through a webcasting platform (cbg.cn)Summary: Rural live broadcasting is becoming an emerging force to activate rural communities and drive local economic development. The issue of balancing the relationship among the government, small capital, and civil society has become a major demand. In this paper, after examining the online and offline development of village live broadcasting e-commerce, we find that although “local government + small capital + civil society” can form a short-term collaborative partnership under external pressures, in long-term operations the profit-driven and unstable nature of small capital will become apparent. External organizational forces will be needed to regulate all parties and establish a model of unity involving “local government + local organizations + civil society. In the process of developing from “local solidarity” to “local organization,” although there will be a certain degree of interaction between the government and civil society, organizational support must be transformed from being “spontaneous” to being “self-acting,” ultimately shaping the live streaming cultural order in local communities.（Read The Original Text）Policy/Politics (Public Opinion within the Great Firewall) Can We Objectively Assess What China Has Brought to Africa?Tang Xiaoyang – Quarterly Journal of Chinese Thought– August 24, 2023 Chinese President Xi Jinping visits Africa; Senegalese people enthusiastically hold up the Chinese flag (Associated Press)Summary: Recently, the expansion of the BRICS nations and their summits have become a global focus. The collective rise of emerging market and developing countries is reshaping the world landscape. It is crucial that China work with these countries to promote their development. This article, looking at Sino-African industrial cooperation, points out that African industrialization faces difficulties in forming an organic system. In Sino-African “One Belt, One Road” cooperation, China has focused on investing in Africa’s local markets through the construction of industrial parks and infrastructure, providing Africa with conditions for industrialization, helping to integrate economic factors, and promoting the development of industrial chains and clusters. In contrast, Europe and the U.S. often judge Africa by their own standards and ask it to imitate them. China’s greater focus on Africa’s local market has enabled Sino-African joint ventures to operate for a long time and it has also facilitated the growth of local enterprises. However, Africa’s industrialization is still subject to political, social, and ecological constraints, and different sectors of the population are affected in different ways, bringing both challenges and opportunities for future Sino-African cooperation.（Read The Original Text）Finance and Business (Public Opinion within the Great Firewall) The 2023 State of Foreign Capital Investment in China:  The Mideast is Most Willing to Spend, Capital from Singapore Is Invested in Hard Science and TechnologyLi Xinxin – itjuzi.com – August 24, 2023 Volkswagen’s share of the Chinese market is declining, and Volkswagen is launching all-electric models (Getty Images)Summary: From January to July 2023, China absorbed RMB766.71 billion of foreign capital, down 4 percent year on year. Nevertheless, there were over 160 cases of foreign capital investments in Chinese enterprises, with an investment scale of over RMB 90 billion; the major investors included Singapore, Japan, and Germany. There were more than 20 cases of Singaporean capital investments in China, involving more than RMB 26 billion, with Temasek and Vertex focusing on robotics, integrated circuits, and automotive transportation. There were more than 20 cases of Japanese investments in China, involving more than RMB 2 billion. focused on Chinese companies with a “Japan factor,” such as Jianxing Bionics and Brisker Biologics. Capital from the Mideast was actively invested in China, involving more than RMB 20 billion invested mainly in growing and mature companies. Capital investments from the Mideast focused mainly on the new energy and healthcare sectors. German capital made more than 10 investments in China, involving more than RMB 1.5 billion and mainly focusing on healthcare and cutting-edge technology. Porsche is one of its active investors. U.S. capital invested in new energy, blockchain, and e-commerce retail companies, with blockchain companies particularly active. Overall, despite the tense Sino-U.S. relations, multinationals are still optimistic about the Chinese market and are increasing their investments in China.（Read The Original Text）Finance and Business (Public Opinion within the Great Firewall) This is the Worst Advice I Have Ever Heard About Facing the Dangers of UnemploymentAnonymous – People and Gods Working Together – August 30, 2023 Job fair at a shopping center in Beijing, June 2023 (Associated Press)Summary: This article discusses how to face the threat of unemployment and how to make constructive career plans in the current climate of high unemployment. When unemployment strikes, many people choose to keep a low profile, hoping to avoid being noticed by their bosses. But this strategy can lead to a loss of visibility in front of superiors. The article suggests that people should be proactive vis-à-vis the threat of unemployment, and they should look for a job ahead of time and make job hunting part of their daily routine. Race to the Top: For careers that allow people to work in multiple industries, such as sales or HR, people often choose to look for jobs in their original industry. However, in the current economic climate, it may be a good idea to consider switching to an industry that has the potential for upward mobility. The article lists some of the industries that the government is encouraging, such as semiconductor design, big data, and the new energy industries. Difficulties and the Value of Changing Careers: Although switching careers can be difficult, it may be the best option in the current economic climate. The key to a career change is motivation, not professional experience. Be Proactive: People should be proactive in the face of the threat of unemployment and not avoid it. If you think of yourself as a company, then job-hopping and changing careers is akin to changing customers and transforming products. To avoid decline, companies must upgrade their products or transform their business when they anticipate a crisis. Overall, this article encourages readers to take a proactive approach to the threat of unemployment, to plan their careers well in advance, and to consider switching to an industry with growth potential.（Read The Original Text）Finance and Business (Public Opinion within the Great Firewall) A College Professor’s “Career Change” to Takeout Delivery Services Is a Record of a Harsh Social RealityXing Bin – Dongyi Academy – September 3, 2023 A delivery boy wearing a mask rides an electric bike on a Beijing street (Getty Images)Summary: Hummingbird, Flash Delivery, and SF City are the main players in China’s takeaway industry. Meituan has the largest market share, but it manages its workers the most strictly, based on three levels. The top Meituan deliverers work up to RMB 12–14/hour per day and earns around RMB 6,000–8,000 per month, while amateur crowdsourced deliverers work harder and earn less. The author attempted one month of delivery work, riding a motorcycle 210 kilometers a day, walking 32,000 steps, climbing 110 floors, and earning about  RMB 10–20/hour per month. During the experience, the author felt the social prejudice and indifference toward delivery workers, but there were also some warm moments. Takeaway companies operate through outsourcing, leaving riders without adequate protection in the event of an accident. Compared to the foreign takeaway industry, Chinese takeaway riders are significantly less well-paid. This reflects the phenomenon of “内卷” (internal competition leading to negative consequences such as burnout, stress, and a lack of work-life balance) in Chinese society, prompting people to contemplate how to achieve genuine human-oriented management and equitable treatment. （Read The Original Text）

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