Hello, welcome to “News Discussion”. Today’s focus: Is the Chinese Navy causing trouble in the South China Sea and Taiwan Strait? Is there a major incident involving the 094 nuclear submarine? Chinese tycoons fleeing top the list; a 3% increase in pensions leads to online criticism! Real estate market on a downward trend; Is China trying to cut off routes for Chinese nationals to leave? More challenges ahead for the Chinese economy!
On June 18th, Taiwanese fishermen operating in the Taiwan Strait unexpectedly encountered a surfaced submarine. A warship went to assist, and the submarine continued to sail north in a surfaced position without submerging.
It is currently speculated by outsiders that this may be a Chinese Type 094 ballistic missile nuclear submarine with a displacement exceeding 10,000 tons.
Taiwan’s Minister of National Defense, Gu Li Xiong, told the media, “The relevant monitoring methods have been grasped,” and reminded the public not to panic excessively, as the Chinese Ministry of National Defense has not commented on the matter.
Recently disclosed was a private conversation between Chinese leader Xi Jinping and European Commission President von der Leyen last year, where Xi Jinping said the U.S. is trying to provoke China to attack Taiwan, but he is not falling for it.
What signals is the Chinese nuclear submarine sending with this move? How should the outside world interpret this?
This week, China has raised the flag for “3% increase in basic pensions in 2024,” claiming it is a boon for 140 million retirees. Is this achieving the goal of “a decent life for the elderly”? Why the public outcry?
On the 18th, China’s National Development and Reform Commission announced that all 31 provincial-level administrative regions in mainland China will promote the renewal of equipment in seven major areas, exchanging old consumer goods for new ones, promoting recycling, and upgrading standards. However, there are doubts about whether this will effectively stimulate consumption.
Moreover, the highly touted “multi-pronged approach” by the Chinese real estate market seems to have malfunctioned.
The latest data from China’s National Bureau of Statistics shows that house prices in 70 major cities across the mainland have all declined, with no transaction prices even available in first-tier and second-tier cities such as Beijing and Wuhan. If people want to buy a house, they cannot find relevant data for reference.
Amidst the overall economic downturn in China, the Chinese authorities have once again begun investigating huge sums of tax payments from companies, with some even facing scrutiny dating back 30 years.
While global temperatures are soaring, when it comes to the Chinese economy, people feel a chilling wind blowing.
Today, we invite current affairs commentators, veteran political and economic analysts Mr. Qin Peng, host of the military channel “Mark Space-Time,” Mark, and Dr. Xie Tian, a professor at the Moore School of Business at the University of South Carolina, to discuss together.
Let’s first focus on the Chinese nuclear-powered submarine making an appearance in the Taiwan Strait.
According to speculation, the surfaced submarine is the Chinese Type 094 nuclear submarine, which can operate underwater continuously for several months, with the mission of ballistic missile submarines being even more secretive, rarely surfacing.
Starting on the 16th, the United States, Japan, the Philippines, and Canada held joint military exercises in the South China Sea for the first time. The U.S., Japan, and South Korea will also hold military exercises next month.
Therefore, military experts speculate on two possibilities: 1. The Chinese nuclear submarine faced a malfunction, or 2. It was to evade the joint military exercises of the U.S., Japan, and the Philippines.
In addition, the Philippine military stated on Tuesday (June 18th) that the Chinese coast guard intentionally collided with a Philippine supply ship in the South China Sea, resulting in “serious injuries” to a Filipino naval sailor.
1. Mr. Mark, why is there so much going on with the Chinese Navy? The authenticity of the nuclear submarine incident? Is there a high probability that the Chinese military deliberately exposed the nuclear-powered submarine?
2. Dr. Xie, Mr. Mark, are the Chinese top leadership and the military singing in harmony? Why did Xi Jinping recently declare “not falling for the U.S.” and now show off a nuclear submarine? How should this be interpreted? What issues does it reflect?
On the 17th, Chinese state media reported that starting from January 1, 2024, the basic pension for retirees who retired before the end of 2023 will be increased by 3% per capita. The head of the Ministry of Human Resources and Social Security explained that the Social Insurance Agency will adopt a method of “fixed adjustment” and “hook adjustment” for this adjustment.
The official media also claimed that this is to achieve “a decent life for the elderly” and is a boon for 140 million retirees. However, although it seems to provide more benefits to the public, there is widespread criticism online.
Some say, “Instead of finding ways to reduce the burden on young people, lowering the social security base, and vigorously fleecing young people, many young people around me have stopped paying social security! Because the retirement age is being extended again, they feel they won’t live to see that day, and it’s better to buy reliable insurance.” Some people complain that this is “feeding a group of old Red Guards who haven’t paid in.”
Some netizens also calculated that after this 3% increase, a pension of 20,000 yuan will increase by 600 yuan, a pension of 2,000 yuan will increase by 60 yuan, and a farmer’s pension of 200 yuan will increase by 6 yuan.
3. Mr. Qin, with this pension increase, what’s the difference between 6 yuan and 600 yuan? Who will benefit from this adjustment, and who will suffer?
I saw a sharp question from a netizen: Do pensioners receive a lot of money because they paid a lot before, or is it a one-time payment, so this is essentially a “refund” of the past? Farmers have land, they don’t pay a penny, and the government still provides them with pension, how should this standard be set? What’s your perspective on this?
4. Dr. Xie, previously, the Chinese Academy of Social Sciences, a top government think tank in China, estimated that the accumulated balance of the national urban employee basic old-age insurance fund will be exhausted by 2035. However, due to various factors, this point in time may be advanced. What is your observation?
Social conflicts in China are becoming more acute, bringing enormous pressure to the shrinking working-age population, leading young people to overwork, shattering their ideals and exhausting themselves.
The Wall Street Journal published an article stating that the Chinese real estate market completely crashed in 2021, resulting in an unsolvable situation of oversupply and waning buyer interest. Despite China’s latest major initiatives in May, they still have had no effect.
The latest data from China’s National Bureau of Statistics shows that in May, prices of new homes in large cities fell by 4.3% year-on-year, exceeding April’s 3.5% decline. The prices of second-hand homes dropped by 7.5%, compared to a decline of 6.8% in April.
The situation of “long short” in the Chinese real estate market has raised concerns that China’s real estate market may follow in Japan’s footsteps, or even worse.
However, global millionaires voted with their feet, seeming to indicate profound changes in the global landscape and wealth power.
The “Henry Private Wealth Immigration Report 2024” released by the international investment immigration consulting firm Henley & Partners shows that in 2024, the country with the highest outflow of millionaires (in U.S. dollars) is still China. The high-net-worth individuals have a wide range of choices and multiple methods, but the path left to the lower-income people in China is narrowing.
On June 18th, the Ministry of Foreign Affairs of Ecuador issued a statement announcing the suspension of “visa-free treatment” for Chinese citizens. Chinese Foreign Ministry spokesperson Lin Jian affirmed this, claiming to “oppose illegal immigration.”
Ecuador is a key transit point for Chinese fleeing to the United States. There are even “one-stop” smuggling services run by Chinese in the area.
5. Dr. Xie, Mr. Qin, why is it that China’s efforts to save the housing market, adjust pensions, have not had the desired effect, and are instead believed to widen the wealth gap? What impact will the widening wealth gap have?
6. Mr. Qin, Chinese young people are facing greater pressures, with shrinking opportunities for survival domestically, and high-net-worth individuals taking money out. Why does the Chinese government focus on blocking the path for lower-income young people to escape? Is there a logic behind this?
7. Dr. Xie, Mr. Qin, where is the root cause of the uneven distribution of benefits in China? From Deng Xiaoping’s “let some get rich first” to the current leader’s “common prosperity,” how has it affected China’s economic structure, and when will the “part who got rich first” truly bring about the prosperity of the “later rich”?
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