In this week’s Chinascope, we look at Xi Jinping’s call for regulation and sinicisation of religious activity, China’s closing loophole for companies listing in the United States, Evergrande’s resurfacing debt troubles, China’s cancelling of Sri Lanka solar project and other stories from China – and the world.
China over the week
In one of the most significant societal developments, China is looking to have a say on how religion is practised in the country.
Sinicising Tibetan Buddhism and Islam in Xinjiang and other religions in China remains a significant priority for Beijing. Xi wants religious believers to follow the Chinese Communist Party over all else. To that end, General Secretary Xi Jinping, and members of the Politburo Standing Committee, gathered in Beijing on 3 and 4 December for the National Conference on Religious Affairs.
“Member of the Political Bureau of the CPC Central Committee, secretary of the Central Secretariat, relevant leading comrades of the Standing Committee of the National People’s Congress, state councillors, president of the Supreme People’s Court, chief procurator of the Supreme People’s Procuratorate, and relevant leading comrades of the CPPCC attended the meeting,” said the press release about the conference.
The conference on religion is held regularly and seeks to influence religion in Tibet and Xinjiang regions.
“It is necessary to adhere to the party’s basic policy of religious work, adhere to the direction of sinicisation of my country’s religions, be good at handling contradictions and problems in the religious field using the rule of law thinking and methods, promote the healthy inheritance of religions in our country, and actively guide religions to adapt to a socialist society and a society with Chinese characteristics,” Xi Jinping said in his speech.
Meanwhile, just as the world began thinking property developer Evergrande could stave off a collapse, the company has once again sounded an alarm about its financial position.
Chinascope had earlier referred to the company’s $300-billion debt.
Evergrande said in its filing in Hong Kong that the company is unlikely to pay the upcoming payment of $260 million. Hui Ka Yan, Chairman of Evergrande Group, was summoned by the Guangdong government after filing in Hong Kong. “Its failure to fulfil the guaranteed obligation would possibly accelerate the maturity of its debts at the request of creditors,” said the statement after its meeting with Hui Ka Yan. The government has warned investors about trading Evergrande’s stock.
Even China’s central bank made a statement on the Evergrande situation. “Evergrande’s problem was mainly caused by its mismanagement and break-neck expansion,” said a People’s Bank of China official.
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More on corporations and control, China’s move to tighten its grip over the country’s technology sector saw a new casualty — ride-hailing company Didi Chuxing.
The company, co-founded by former Alibaba employee Will Wei Cheng in 2012, had raised $4.4 billion in its initial public offering at New York Stock Exchange (NYSE) in June this year. It was the biggest listing by a Chinese company in the US since Alibaba in 2014. But then Beijing intervened.
The embattled ride-hailing company Didi Chuxing announced that it is planning to delist from the NYSE on Friday. The company would instead immediately initiate the process of listing on the Hong Kong Stock Exchange.
There were concerns about a potential data breach by Didi resulting from the US-listing. Beijing may be trying to bring strict controls on data security by closing a loophole that allowed Chinese companies to list in the US without approval.
Bloomberg reported, citing sources, that China may be looking to stop its companies from listing on foreign exchanges by using the variable interest entities (VIE) pathway. But the China Securities Regulatory Commission called the story “not true.”
In the backdrop of Didi Chuxing’s delisting is the talk about decoupling between the US and China. However, Beijing doesn’t want to confirm such suspicions between the world’s two largest economies.
Didi’s delisting from the NYSE tells us that Beijing is willing to use its long arm to align the companies to its will.
Meanwhile, on a more global scale, since the beginning of the US-China trade spat, China’s oversized control of ‘rare earths’ has raised global concerns. ‘Rare earths’ are key elements in high-technology devices such as smartphones, computer hard drives and fighter jets.
Wall Street Journal reported, citing sources, that China approved the creation of a large conglomerate of rare-earth companies. The new firm will be called the ‘China Rare Earth Group’ and will be based in the resource-rich region of Jiangxi province. The China Rare Earth Group will be created by merging China Minmetals Corporation, Aluminum Corp. of China Ltd. and Ganzhou Rare Earth Group Co.
The Chinese state media this past week also gave extensive coverage to the newly completed China-Laos railway. On Friday, Xi Jinping and Laos President Thongloun Sisoulith inaugurated the newly-built railway line.
The $6 billion railway project will connect the Chinese city of Kunming with a Laotian city named Vientiane. The journey, which stretches over 1,000 km, will be completed in 5 hours and 20 minutes.
The Laotian stretch of the train from Boten to Vientiane was completed as part of the Belt and Road Initiative. “The downside is that this is a very expensive railway, so the question is whether these upsides are enough to make full economic sense in terms of the cost-benefit,” said Jeremy Zook, director of Asia-Pacific ratings with Fitch Ratings.
Laos is considered one of China’s strongest partners, but the country is already heavily indebted to Beijing. Reuters reported in 2020 that Laos had ceded control of its electric grid to a Chinese company as it failed to pay the debt owed.
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China in world news
This week it was Sri Lanka that was caught between India and China’s rivalry for regional influence.
China has now suspended a solar plant project in Sri Lanka after India’s protest over the project’s location in the northern islands. India had lodged its protest with Sri Lanka about the project earlier in January.
In a tweet, the Chinese embassy in Sri Lanka said the project was suspended “due to security concern from a third party”. The news about the project’s cancellation was widely discussed in Chinese media.
Chinese state media published an article, which said that Sino Soar Hybrid Technology may have lost the contract in Sri Lanka but the same company has signed contracts for other projects in the Maldives. The article suggested that Sri Lanka will “regret its decision.”
Meanwhile, in a daily dose of US-China rifts, China’s recently tested hypersonic missile has officials in Washington worried.
US defence secretary Lloyd Austin said China’s hypersonic test had increased tensions over the Indo-Pacific region. Austin also called China the top challenge for the US Army. Austin made the remarks during his visit to South Korea and General Mark Milley, US joint chiefs of staff.
On Saturday, Austin raised concerns about the People’s Liberation Army’s combat rehearsals close to Taiwan. “It looks a lot like them exploring their true capabilities, and sure it looks a lot like rehearsals,” Austin said in Washington at the Reagan National Defense Forum. Austin didn’t seem to suggest that China was planning to invade Taiwan anytime soon.
On Friday, US Secretary of State Antony Blinken said there would be “terrible consequences” if China precipitates a crisis across the Taiwan Strait.
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What you must read this week
The real reason China is pushing “digital sovereignty” in Africa – Yinka Adegoke
The real battle at Lake Changjin – James Carter
Experts this week
“Of course, this is also related to the stability of China’s borders. If the two neighbouring countries, Afghanistan and Tajikistan, clash, it will threaten China’s western region, especially Xinjiang. Xinjiang’s Taxkorgan Tajik Autonomous County has a population of more than 100,000 who are mostly Tajiks. They think they are brothers with the Tajiks in Afghanistan and Tajikistan, and they speak the same language, although the pronunciation is different. Therefore, if the conflict gradually intensifies, it may have a direct impact on Xinjiang, and it will further undermine the security of the Belt and Road Initiative and the China-Pakistan Economic Corridor,” wrote Pan Guang, Director of Shanghai Cooperation Organization Research Center of Shanghai Academy of Social Sciences.
India in China
On Sunday, news about the attack on security forces in Nagaland was a major trend on Weibo. The hashtag “Indian troops manslaughter 13 civilians” was viewed 107,000 times on Weibo, and the trend continued to grow.
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Upcoming Watch
On 9 December, US President Joe Biden will host the Summit for Democracy with 111 representatives from democratic countries. The White House has invited Taiwan to the summit. China denounced the summit, and a senior Chinese official has said the summit would be a “joke”.
The author is a columnist and a freelance journalist, currently pursuing an MSc in international politics with focus on China from School of Oriental and African Studies (SOAS), University of London. He was previously a China media journalist at the BBC World Service. He tweets @aadilbrar. Views are personal.
This is a weekly round-up that Aadil Brar writes about what’s buzzing in China. This will soon be available as a subscribers’-only product.
(Edited by Srinjoy Dey)