China

[Crafty_Dog]

I've been hearing such noises, but have wondered it they were psyop to distract from reality of limpness towards China  "See, they are not a threat etc" so glad to see you bring substance.

[ccp]

I forgot to mention the estimated real GDP growth in ~ 3 % not 5% or more

look at all the empty building and roads not being used

look at all the worker strikes across the nation the vast majority who complain they are not being paid.

look at the night lights which are not increasing ( an indirect measure of economic activity )

[Crafty_Dog]

I'm not disagreeing with it, indeed we here (ahem including me haha) have pointed to the dishonesty bookkeeping, the toxic dump nature of much of the country, the countracting demographics etc for some years.

I just found it convenient that we were hearing about coming to head just as we were not really doing anything about China.   Their fukkeries around Taiwan and Philippines are quite serious.  Their penetration of our infrastructure and technology is quite serious. The military passing our in serious respects (very much including where war is going instead of where it was) is quite serious. 

Their intentions are quite serious.

Their econ troubles could just as easily be a trigger-- "We better go now while we still can and by so doing distract our people."

[Crafty_Dog]

March 5, 2025
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China Shifts Its Attitude on the Private Sector
But will its new approach stick?
By: Victoria Herczegh

Last month, Chinese President Xi Jinping assembled China’s top corporate leaders for a business forum in Beijing, the first such event since 2018. He promised them the government’s continued support, more protection of business interests and wider market access. In exchange, he urged attendees to cooperate with and contribute to Beijing’s initiatives to boost technological innovation and economic growth.

It was a stark contrast to the way the Chinese leadership has treated private enterprise over the past few years, during which Beijing provided little financial support and imposed harsh regulatory crackdowns. While the shift hasn’t come out of the blue – proposals and efforts to provide better conditions for private companies have been raised in the past – this is the first time the leadership appears willing to follow through with changes and communicate transparently with the business community about what it can expect.

Xi’s motivation for the shift is clear. The Chinese economy is flagging, and the government’s previous efforts to spur growth yielded few results. To maintain its competitive edge, China now needs to restore investor confidence, which means supporting the country’s crucial private sector. But while this approach would have benefits in both the immediate and long term, it would also mark a radical shift away from the cornerstone of the Chinese political system: the Communist Party’s control over most aspects of political and economic life in the country.

Crackdown on Tech

The list of attendees at last month’s business symposium included prominent figures from the technology space, including the CEOs of tech firms Xiaomi, Tencent and Huawei Technologies, as well as electric carmaker BYD. Alibaba founder Jack Ma also made a surprise appearance, pictured sitting in the front row and even shaking hands with Xi. Such a meeting would have been unthinkable just a few years ago, when Ma disappeared from public life following his harsh criticism of the “lack of innovation” in Chinese industry and financial services. Ma left China for Japan in 2022, around the time that the Chinese government intensified its crackdown on Big Tech, targeting some of China’s most prominent technology companies and their executives.

The crackdown that began in 2020 was a precarious time for China’s top entrepreneurs – even those who had not spoken out against the leadership. Local governments were empowered to use various means to boost their finances by exacting resources from private enterprises. They conducted monthslong investigations that threatened to disrupt or halt business operations and imposed heavy fines, often without any legal basis. Large private enterprises like Alibaba were also targeted under Beijing’s “common prosperity” initiatives, which were intended to rein in the billionaire founders of these companies and redistribute the funds to those in need – including local governments in the country’s poorer provinces. However, the government failed to monitor and disclose where the money actually went. It’s clear a substantial amount was confiscated, but it’s unclear whether the disadvantaged benefited at all from the funds.

Private Sector Focus

Despite the government’s heavy-handed approach to economic management, the significance of China’s private sector is undeniable. According to China’s State Administration for Market Regulation, the number of private businesses in China reached 180.45 million last May, accounting for 96.4 percent of the country’s total enterprises. Of this total, 55.18 million were private companies and 125.27 million were self-employed individuals. Private businesses now account for more than 90 percent of the country’s high-tech, scientific research and manufacturing sectors. They also contribute more than 60 percent of China’s gross domestic product, nearly 50 percent of foreign trade and more than 80 percent of urban employment. The government can’t afford to stifle these enterprises, especially not when it’s in need of a serious economic boost.

By 2023, it was clear that the country’s real estate and banking sectors were in serious trouble and that local government debt and youth unemployment were becoming unsustainable. These issues were too deep to be addressed with mere stimulus programs, so the central government started to look to the private sector, especially in high tech, as an avenue through which to spur economic growth. A year ago, the government also tried to promote changes to state-owned enterprises, launching new support measures especially in strategic sectors such as renewable energy and artificial intelligence. It seems, however, that these initiatives showed more marginal results than expected (though the government continues to introduce new programs and policies for SOEs).

As a result, state regulators began easing their grip on large private enterprises, ending their sprawling investigations and lifting restrictions on top companies like ride-hailing platform Didi and e-finance giant Ant Group, even declaring in 2024 that Alibaba had stopped its “monopoly behavior.” Importantly, as the central government introduced a package of major stimulus measures last fall, including financial support for local governments, it also began monitoring local authorities to ensure they did not confiscate funds intended for private enterprises.

Despite these changes, however, more hurdles remain. For the private sector, one lingering challenge has been the long-standing obligation to comply with government demands for oversight, monitoring and backing of the political leadership. In the 1990s, the Chinese Communist Party started systematically integrating the growing and increasingly vital private sector into the nation’s political establishment, making entrepreneurs take on political roles and join an advisory body called the Chinese People’s Political Consultative Conference.

Under Xi, these efforts intensified. In 2017, the government adopted the National Intelligence Law, which requires all firms in China to provide information and data to authorities when asked in the interest of national security. The CCP also formed official party units within companies that conducted regular internal monitoring, ranking firms according to the loyalty of their leaders and employees. (Disloyalty could mean anything from having an insufficient number of employees taking active political roles to using wording critical of the leadership on social media.) In 2014, the government launched the Corporate Social Credit System, which allowed the central leadership to place companies on blacklists if they were deemed not loyal enough to the party and restrict their freedom of operation and market access. Chinese private companies are thus not really “private” in the strictest sense, as the CCP and the central government are deeply infused in all areas of operation. By most Western standards, they would be categorized at best as mixed-ownership enterprises.

Making Changes

Following the crackdowns and years of constraint, not to mention the country’s flagging economy and heightened international tensions, confidence within the business and investor communities has been extremely low. This could now change, as Xi turns to the people his government once targeted to lead a much-needed economic rebound. In addition to meeting with business leaders last month, his government has unveiled new, targeted measures that would ban authorities from imposing fines on private businesses without a legal basis, ensure private companies receive clear legal protections, facilitate their participation in trade-in programs and large-scale projects, and support financing for the private sector.

These measures, in addition to the government’s rare admission of the existence of economic problems, are indicators of its new strategy. The symposium already resulted in a short-term bump for private company stocks. However, a long-term boost would require assurances that private enterprises won’t be subject to more monitoring requirements or loyalty-based evaluations and fines in the future. Major reforms to the Corporate Social Credit System would likely be needed to ensure private enterprises have genuine autonomy in their operations and business decisions. Judging by the rare endorsement of private sector CEOs and the proposed support measures, Xi seems ready to make changes. His willingness to rebuild trust contrasts the Chinese government’s aggressive control of corporations in the past. The key will be to see if this shift continues in the future – not just in words and public appearances but also in action.

[DougMacG]

(Doug) An aside within their story is what they did to Jack Ma.

From the article:
"Alibaba founder Jack Ma also made a surprise appearance, pictured sitting in the front row and even shaking hands with Xi. Such a meeting would have been unthinkable just a few years ago, when Ma disappeared from public life following his harsh criticism of the “lack of innovation” in Chinese industry and financial services. Ma left China for Japan in 2022, around the time that the Chinese government intensified its crackdown on Big Tech, targeting some of China’s most prominent technology companies and their executives."

  - I wonder what 'disappeared for years and came back with a better attitude' means?

Coincidentally the Jack Ma owned scmp.com, South China Morning Post, changed it's editorial viewpoint from favoring freedom to Prada-style state-owned media.

I don't know if they really will loosen the chokehold  on the internet and the private sector but we know they do have society in a chokehold.

[ccp]

https://www3.nhk.or.jp/nhkworld/en/shows/4001438/

who could have guessed?

[Body-by-Guinness]

I’m not versed well enough in international banking/trade to assess this piece, but given all the hullabaloo over Trump’s China tariffs, this sees like a gaping back door, a door this piece claims covers 38% of world trade:

https://chiefio.wordpress.com/2025/04/08/china-launched-digital-yuan-payment-system-swift-bypass-1-2-trillion/

[Body-by-Guinness]

Note, this is happening despite the progress made with China over tariffs, which suggests to me Trump is taking a tough stance China is studiously ignoring:

US warns against using Huawei chips ‘anywhere in the world’

Commerce department guidance aims to toughen export controls on tech used by China to make AI processors
Huawei logo and the Oriental Pearl Tower near Nanjing Road Pedestrian Street in Huangpu district of Shanghai, China

Huawei’s Ascend range of chips is becoming more competitive in China with Nvidia’s artificial intelligence products © Cfoto/Sipa USA/Reuters
US warns against using Huawei chips ‘anywhere in the world’ on x (opens in a new window)

Demetri Sevastopulo in Washington, Zijing Wu in Hong Kong and Ryan McMorrow in Beijing

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

President Donald Trump’s administration has taken a tougher stance on Chinese technology advances, warning companies around the world that using artificial intelligence chips made by Huawei could trigger criminal penalties for violating US export controls.

The commerce department issued guidance to clarify that Huawei’s Ascend processors were subject to export controls because they almost certainly contained, or were made with, US technology.

Its Bureau of Industry and Security, which oversees export controls, said on Tuesday it was taking a more stringent approach to foreign AI chips, including “issuing guidance that using Huawei Ascend chips anywhere in the world violates US export controls”. 

But people familiar with the matter stressed that the bureau had not issued a new rule, but was making it clear to companies that Huawei chips are likely to have violated a measure that requires hard-to-get licences to export US technology to the Chinese company.

“The guidance is not a new control, but rather a public confirmation of an interpretation that even the mere use anywhere by anyone of a Huawei-designed advanced computing [integrated circuit] would violate export control rules,” said Kevin Wolf, a veteran export control lawyer at Akin Gump.

The bureau said three Huawei Ascend chips — the 910B, 910C and 910D — were subject to the regulations, noting that such chips are likely to have been “designed with certain US software or technology or produced with semiconductor manufacturing equipment that is the direct produce of certain US-origin software or technology, or both”.

The guidance comes as the US has becoming increasingly concerned at the speed at which Huawei has developed advanced chips and other AI hardware.

Huawei has begun delivering AI chip “clusters” to clients in China that it claims outperform the leading US AI chipmaker Nvidia’s comparable product, on key metrics such as total compute and memory. The system relies on a large number of 910C chips, which individually fall short of Nvidia’s most advanced offering, but collectively deliver superior performance to a rival Nvidia cluster product.

News in-depthHuawei Technologies

Satellite images reveal Huawei’s advanced chip production line in China

Montage of the Shenzhen skyline with the Huawei logo and chips

The Shenzhen-based conglomerate currently offers its Ascend series processors, mainly the 910B and 910C, to Chinese companies. Huawei is boosting production capacity by building its own advanced semiconductor production lines, as Chinese companies cut off from Nvidia’s products are increasing orders.

There is growing US concern that China’s national champion will soon be selling AI processors in both China and foreign markets that can compete with Nvidia and other US companies’ products.

Nvidia chief Jensen Huang said last month Huawei was “one of the most formidable technology companies in the world” and US policies should help his company compete on the global stage.

Nvidia declined to comment on the bureau’s new rules. Huawei did not immediately respond to a request for comment.
The commerce department also rescinded the AI Diffusion Rule on Tuesday, a measure the previous Biden administration had planned would take effect on May 15.

It was designed to limit exports of AI chips to other countries and make it harder for China to circumvent existing US export controls. But the department said the rule was too bureaucratic — a view former Biden officials reject — and it would issue a replacement in the future.
The announcement came on the day Trump visited Saudi Arabia, where he unveiled a raft of deals, including a commitment by the kingdom’s new state-owned AI company, Humain, to build AI infrastructure using hundreds of thousands of Nvidia chips.

A source familiar with the situation said the scale of the proposed Gulf deals shocked many senior Trump administration officials. They were concerned about offshoring large-scale AI infrastructure, and also turning a blind eye towards Saudi and the United Arab Emirates’ collaborations with Beijing.

https://archive.ph/2025.05.14-090230/https://www.ft.com/content/2033b5b3-974d-4d40-8498-1c46d3a8db79#selection-1707.1-1722.0

[Crafty_Dog]

 
https://www.nytimes.com/1971/05/19/archives/china-transformed-by-elimination-of-four-olds.html