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Zhou Xin



Articles by Zhou Xin

China Evergrande is not a Lehman Brothers moment, but its fate spells trouble for long-term growth

5 days ago

[unable to retrieve full-text content]Chaotic scenes of hundreds of angry creditors outside the offices of China Evergrande demanding their money back have made for surreal viewing.After all, the property developer looks quite solid on paper, with billions of dollars worth of assets that outweigh liabilities, and years of reported profits.Until recently, chairman Xu Jiayin, or Hui Ka Yan in Cantonese, looked the picture of a well-connected Chinese businessman – rubbing shoulders with tycoons in Hong Kong and being hosted at the…

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China’s ‘common prosperity’ can start by addressing discrimination against migrant workers

11 days ago

[unable to retrieve full-text content]China’s common-prosperity push can start with correcting the unfair treatment of the country’s 285 million migrant workers – a group of people that has contributed to the country’s rapid economic maturation, but which has been mistreated in many ways.Beijing’s emphasis on common prosperity – an effort to make everyone moderately prosperous – came after it declared victory in eradicating “absolute poverty”, a milestone that ensures basic food, shelter, education and health care for all 1.4…

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China’s ‘nanny state’ push shows how far Beijing will go to get children behind national rejuvenation efforts

18 days ago

[unable to retrieve full-text content]The statesman who transformed Singapore into one of the world’s richest and cleanest places famously defended his form of governance by saying, “If Singapore is a nanny state, then I am proud to have fostered one.”Lee Kuan Yew’s sense of pride in the powerful city state, which can tell its people what to do and what not to do in their day-to-day lives, is being echoed in Beijing as the Chinese government takes that approach to new heights with its efforts to restrict how teenagers spend their…

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China’s common prosperity push is long overdue, but the rich don’t need to worry about their wealth

25 days ago

[unable to retrieve full-text content]Beijing’s push for so-called common prosperity has fanned concerns whether China’s own Gilded Age of massive wealth creation is coming to end.While it is probably true that money cannot have its way like it used to, it would be wrong to worry about a state-sanctioned wave of redistribution of wealth.To start with, the goal of common prosperity is long overdue. The search for a fair society is deeply rooted in communism and China’s traditions, the two sources of official Chinese ideology.It is a…

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China tech wades through uncharted waters as old trust comes under new scrutiny

August 23, 2021

[unable to retrieve full-text content]A once-unthinkable risk is looming large for China’s technology firms: the legitimacy of a legal corporate structure that allows them to take money from foreign investors.The so-called variable interest entity (VIE) structure has been in place for two decades, and it is the centrepiece underlying China’s tech sector boom – American venture capitalists are able to skirt Chinese regulatory restrictions to profit from services in China, while Chinese entrepreneurs can use foreign money to engineer…

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Investing in Chinese tech stocks based on state media reports can be like reading tea leaves, and just as risky

August 16, 2021

[unable to retrieve full-text content]China’s state-backed newspapers and publications are garnering interest from an unintended group of followers: investors in China’s tech stocks.A news story running on an inside page of a Chinese newspaper could lead to billions of dollars worth of market value being erased in mere minutes. And an opinion piece penned by a researcher could lead to wild swings in stock prices from Hong Kong to New York, even though no listed company is directly mentioned.The sudden surge in influence among state…

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China’s soft technology power is as important as its physical hardware that launches rockets

August 9, 2021

[unable to retrieve full-text content]Beijing’s ongoing crackdown on China’s technology giants has fanned the flames of a sidebar discussion about the value of “hard” technologies versus “soft” ones.A popular notion is that hard technology, such as a powerful new piece of machinery, helps give countries a competitive advantage over rivals, whereas soft technology, such as an app, mainly entertains consumers and could spoil people. From that perspective, some now argue that China is expending too many resources on soft technologies,…

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China’s push for Communist Party leadership at grass roots level to help common prosperity

August 2, 2021

[unable to retrieve full-text content]With China keen to knit the vast country of 1.4 billion people together around a centralised power structure, an important policy document was released last month concerning grass roots governance and modernisation.The blueprint reveals Beijing’s vision for how the country’s villages and urban communities should be managed in the next decade.A key takeaway is that the leadership of the Communist Party, or the role of Communist Party cells, should be strengthened at a local level.In particular,…

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China’s population crisis needs more help than just scrapping fines for having too many children

July 26, 2021

[unable to retrieve full-text content]Last week’s decision to abolish China’s 40-year-old policy of imposing hefty fines on so-called surplus births puts the final nail in the coffin of the country’s notorious family planning regime.

The fines started in the early 1980s and instilled fear throughout society to discourage births. They could immediately bankrupt a family.

In some provinces, the maximum fine was set at 10 years of the local average income for both the father and the mother, or a couple had to pay a one-off cash…

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China’s new data security laws show the days of ‘wild west’ information grabbing are over for Big Tech

July 19, 2021

[unable to retrieve full-text content]A new business reality is looming in China’s technology sector.As the central government builds a data regulation regime that restricts or bars companies from grabbing personal information, the days when a technology start-up – blessed by an innovative business model or a genius algorithm – could quickly build up a business empire are over.Beijing is slowly tightening its hold over Big Tech and imposing its authority over data produced in the country.The recent passing of the Data Security Law…

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Didi won’t be last IPO to pursue New York listing, but China’s cybersecurity review closes loopholes

July 12, 2021

[unable to retrieve full-text content]Will Beijing continue to allow initial public offerings (IPO) by Chinese technology firms in New York?The answer to that question is being considered after China released a new draft cybersecurity proposal over the weekend, which gives an obscure office within the Cyberspace Administration of China the right to virtually veto any technology company planning to list on foreign exchanges.But another question being asked is, will the cybersecurity review office veto all applications, or will it…

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China tech investors may find that Pekingology is a must-learn term

July 5, 2021

[unable to retrieve full-text content]Nothing better reflects the sweet financial marriage between China and the West than this model: venture capitalists from the West Coast of the United States provide funding to the brightest entrepreneurs in China, helping them reach hundreds of millions of Chinese consumers in a short time span via internet technologies. Then Wall Street banks arrive to help them walk through the legal and regulatory labyrinth before an eventual public offering on the New York Stock Exchange or the Nasdaq…

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Confucius called it xiaokang, and it is worth celebrating in a well-off China

June 28, 2021

[unable to retrieve full-text content]President Xi Jinping is expected to declare in the coming days that China has built up a comprehensive well-off society – one of the two “centenary goals” of the ruling Chinese Communist Party.It is an achievement that is hard to overestimate. That a huge society of 1.412 billion people is officially no longer poor, but rather “moderately prosperous” – i.e. xiaokang – is wonderful news for the world. By every economic and social-development indicator, China has progressed substantially. Chinese…

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China is logically cracking down on its private tutoring sector, but why is Beijing taming it now?

June 21, 2021

[unable to retrieve full-text content]An infamous slogan from a private education institution in China targeting toddlers states, “you can train your kid with us here, or we train his competitors”.It is lines like this that convince parents to throw money at extra classes to improve exam performance or to add skills from painting to programming languages like Python onto the résumés of their children.Few parents in China can afford to allow their children to have a slow start in life, with entry into kindergartens and schools…

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China’s anti-sanctions law is a defence mechanism, not an attack weapon

June 14, 2021

[unable to retrieve full-text content]The new anti-sanctions law rushed through by China’s lawmakers last week is Beijing’s latest attempt to defend itself against a perceived new wave of hostility against Chinese individuals and institutions.Beijing foresees Chinese companies and individuals at growing risk of being sanctioned by foreign governments in coming years over their involvement in Xinjiang and Hong Kong.As such, the Chinese government needed to beef up its legal defence against such threats. It is essentially a defensive…

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China must take stock of its birth-planning policies and learn from the past

June 7, 2021

[unable to retrieve full-text content]With “birth planning” fading from Beijing’s vocabulary as couples are now allowed to have three children, it is time for Chinese authorities to conduct a thorough review.One perspective among analysts is that China’s family-planning policy – in reality, its stringent birth restrictions – helped facilitate the country’s economic rise by staving off a “population explosion”.The restrictions are said to have reduced births by 400 million and kept China’s population from surpassing 1.7 billion…

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China’s Gen Z are ‘laying flat’, but does this new work, life attitude pose a social and economic threat?

May 24, 2021

[unable to retrieve full-text content]A growing number of China’s Generation Z, born between 1995 and 2010, are embracing a “laying flat” attitude about work and life as they throw in the towel in the face of tough competition and opt for a simple, frugal and lonely life.It is hard to quantify the scope of the new social psychology, but the attitude is certainly gaining popularity in an increasingly rigid social structure with a yawning gap between the rich and the poor.Let us imagine a dormitory at a top university in Shanghai…

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China’s Gen Z are ‘laying flat’, but does this new work, life attitude pose a social and economic threat?

May 24, 2021

[unable to retrieve full-text content]A growing number of China’s Generation Z, born between 1995 and 2010, are embracing a “laying flat” attitude about work and life as they throw in the towel in the face of tough competition and opt for a simple, frugal and lonely life.It is hard to quantify the scope of the new social psychology, but the attitude is certainly gaining popularity in an increasingly rigid social structure with a yawning gap between the rich and the poor.Let us imagine a dormitory at a top university in Shanghai…

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China’s zero tolerance for coronavirus cases is unfair for some but justified for many

May 17, 2021

[unable to retrieve full-text content]China has developed a standard raft of measures to curb local coronavirus outbreaks. Along with mass testing, community lockdowns and strict contract tracing, holding local officials accountable for new infections has become routine, as evidenced by the latest outbreaks in Liaoning and Anhui provinces.But for local Chinese officials to receive verbal warnings, demotions or other disciplinary measures for failing to ensure zero infections under their watch is harsh and even a bit unfair, since…

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Xi Jinping’s grand economic strategy was born out of China’s new perception of the world

May 10, 2021

[unable to retrieve full-text content]A man’s behaviour is often shaped by his perceptions of the world around him. He may feel relaxed in a safe and comfortable environment, but turn alert and defensive in a hostile one. A country’s chosen strategies and decisions, to some extent, are also a reflection of policymakers’ impression of the world.China’s inward-looking economic strategy, known as dual circulation, emerged as China’s reading of the world changed. According to the transcript of a speech by President Xi Jinping in…

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Why the socialist element of China’s market economy is important

April 26, 2021

[unable to retrieve full-text content]China’s “socialist market economy”, which mixes public ownership and state guidance with aspects of the market, has propelled the nation from an economic backwater into the global engine of growth in about four decades.But it is also an idea with inherent contradictions. In orthodox economic terms, being socialist requires that Beijing dominate the means of production, which can include land, machines, raw materials, capital and data. That contradicts the key pillar of a modern market economy:…

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For Huarong, China’s biggest bad bank, it’s bailout or bust

April 19, 2021

[unable to retrieve full-text content]China’s biggest bad bank, which was created in 1999 to take bad assets from the country’s biggest bank, has degenerated into a really bad bank after 22 years, and it may need to rescued by offloading its bad assets to another bad bank.Lai Xiaomin, the former chairman of the bank in question – China Huarong Asset Management – was swiftly executed earlier this year after he was found to have taken 1.8 billion yuan (US$276 million) worth of bribes – a record in China’s finance history. The bank’s…

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China population: census results to confirm a worrying demographic picture

April 12, 2021

[unable to retrieve full-text content]The results from China’s once-a-decade census are set to confirm the worrying picture of a rapidly ageing society, shrinking labour force and an insufficient number of newborns. For analysts who are trying to gauge China’s economic and social development potential over the coming years or even decades, the population data is vital. The figures are expected to be released later this month. In fact, the data will provide key metrics pertaining to some of the biggest questions surrounding China’s…

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Joe Biden’s infrastructure plan will not be a boon to China-US relationship

April 5, 2021

[unable to retrieve full-text content]Chinese government officials and researchers have argued for years that China could work with the United States on infrastructure, helping to improve America’s roads, bridges, railways and subways.The rationale is simple. The US needs to upgrade its infrastructure while Chinese firms are particularly good at such work. If the US were to hire Chinese firms to do some of the job, it will not only help to boost the flows of trade, people and money but also build up goodwill and trust. On the…

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‘Carbon neutrality’, ‘emission peak’ becoming buzzwords shows China is taking its 2060 climate change goal seriously

March 29, 2021

[unable to retrieve full-text content]The whole Chinese state system has been mobilised towards self-imposed milestones in reducing carbon emissions, with “carbon neutrality” and “emission peak” becoming catchphrases, defying doubts that its pledge is a trick to win short-term goodwill from the Biden administration. President Xi Jinping told a meeting earlier this month that China’s efforts to achieve carbon neutrality would bring a “far-reaching and deep systemic social and economic transformation” and it matters for the “external…

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Why the Chinese government’s warning on property speculation has so few listeners

March 22, 2021

[unable to retrieve full-text content]What investments would you have made in 2011? For residents in Chinese cities, the answer was “buy a flat”. Apart from bitcoin and Kweichow Moutai stock, few assets have gained as much in the past decade as property in China.In Shenzhen, for instance, the average residential property price has surged to nearly 90,000 yuan (US$13, 815) per square metre from less than 20,000 yuan a decade ago.It’s ironic given 2011 was also the year Beijing became “serious” about cooling property prices. It…

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China’s economic grand plan falls short on how to enrich people and enlarge middle-income group

March 15, 2021

[unable to retrieve full-text content]Beijing’s grand plan for the next five years and its vision for 2035 have two big assumptions. One is that China is experiencing an unstoppable rise against the West, and the other is that China’s 1.4 billion consumers will create a domestic market big enough to guarantee the country’s continued growth.To turn the second assumption into a reality, China needs to tilt its national income distribution in favour of the people. The 14th five-year plan and the 2035 Vision paint a rosy picture for…

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China learns lesson from Hong Kong’s housing policy, with Beijing keen to avoid same damage to society

March 9, 2021

[unable to retrieve full-text content]The land auction and property development system in China is a direct descendant of Hong Kong’s. The system, in which the government sells land to developers so they can build homes, has supported rapid urbanisation and improved the living conditions for hundreds of millions of urban Chinese.But Beijing is also rapidly realising the social costs of the system, including its chronic damage to entrepreneurship, a yawning wealth gap that depresses the ambitions of younger generations, and the…

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China’s ban on Taiwanese pineapples leads cross-strait trade into troubled waters

March 1, 2021

[unable to retrieve full-text content]Beijing’s decision to ban pineapple imports from Taiwan has started a new war of words across the Taiwan Strait, a development that could have huge implications.Chinese customs cited a technicality for the restriction: bugs were spotted in the tropical fruit. But Taipei immediately framed the ban as a calculated political move by Beijing to wage economic war against Taiwan, particularly the southern part of the island that generally supports the ruling Democratic Progressive Party.Whatever the…

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