IN FOCUS
By Keerthana Nambiar

China's third-quarter GDP slows down

Recent developments
On 18 October, the National Bureau of Statistics published the gross domestic product figure of China. The Bureau described the domestic economic recovery as "unstable and uneven," with a GDP of 4.9 percent. According to South China Morning Post, "a worse-than-expected third quarter economic performance for China has indicated there could be more pain ahead in the final three months of the year, while stoking fears of stagflation."

Chinese economy showed excellent post-pandemic recovery in 2021, in the first quarter with 18.3 percent and second quarter with 7.9 percent. Fu Linghui, a spokesperson for the Bureau of Statistics, said, "Since entering the third quarter, domestic and overseas risks and challenges have increased." He further added that "Since the beginning of this year, international energy prices have risen significantly, the price of natural gas and crude oil has repeatedly reached record highs, and the domestic supply of electricity and coal is tight."

Xi's new policy of 'common prosperity is a campaign for social progress that has led to a new turn in the Chinese economy. The widening inequalities in the social structure have recently created risks to the political stabilities and the Community Party's legitimacy. Xi Jinping's continuous assertion of authority and recent structural changes in the property and technology giants have put pressure to reshape China's economy.

The severity of China's energy crisis and turmoil of the real estate sector 
China, being the world's second-largest depends on a constant energy supply for uninterrupted industrial progress. In the recent power crunch, many factories and millions of households have lost power. Therefore, the energy companies are rationing electricity to industrial and domestic users which raises concerns about inflation and in turn causes unrest in the economic arena. With the disruptions in the engine of China's economy, Beijing will be facing greater difficulties in managing the global supply chain. The Evergrande crisis has crippled the entire Chinese society creating contagious financial metrics. Moreover, the property sales in China's 30 largest cities fell to one-third in September 2021. These factors added up together which resulted in a weak third-quarter GDP.  

The Chinese adoption of decarbonization seems to have brought in a colossal task of balancing the transition and achieving the goals. As a country heavily dependent on coal, China is moving towards phasing down the coal-fired projects and looking forward to investing in renewables in more than 60 locations across the country. The stall in the GDP could be considered as a result of the recent adjustments.

The third-quarter figures published reflect the downgrade in the Chinese economic planning. Xi Jinping's grip over the policies to decouple from the West creating a negative trend in the overall economic output will cost China. Beijing will have to tread the rope cautiously in the coming months to avoid derailing the private sector and further moderating the crackdowns in the economic system.

References

"China GDP: slowdown in third quarter growth ramps up fears of more economic trouble ahead," South China Morning Post, 19 October 2021

"China's economy stumbles on power crunch, property woes," Reuters, 18 October 2021

"China GDP: economic recovery stalls, growth slows to 4.9 per cent in third quarter," South China Morning Post, 18 October 2021

IN BRIEF
By Avishka Ashok and Dincy Adlakha 

INTERNAL
China refutes claims of a nuclear-capable hypersonic missile test
On 18 October, Zhao Lijian, spokesperson of the Chinese Foreign Ministry stated in a media briefing that the reports of the Chinese military conducting a hypersonic missile test are inaccurate. He insisted that it was a routine spacecraft check and not a missile. On the previous day, Financial Times had published a report citing five unnamed sources that China has conducted super powerful and rare nuclear-capable hypersonic missiles in August. These missiles are difficult to intercept and such militarized use of the technology is not availed by the US or Russia as well. The report left the disarmament representative in the US astounded. However, the Chinese secrecy around the test and the denial of missile capabilities have not helped in calming the situation. ("China denies testing nuclear-capable hypersonic missile," BBC, 18 October 2021)

Trial of Hong Kong activist resumes with great debate on the meaning of the controversial slogan
On 18 October, the trial against a prominent Hong Kong activist Tam Tak-chi resumed after almost two months. He was arrested in September 2020 and has been in prison for over a year now. Tam was one of the first persons to wave the flag with the slogan "Liberate Hong Kong, Revolution of our time" during the protests in 2019. Major debate in the courtroom took place over the meaning of the slogan. The prosecution argued that words like "liberate" and "revolution" carry the same meaning in modern times that they carried in ancient China. They represent sentiments of overturning the government, not recognizing the government, and taking back the land from enemies. However, the defense argued on the popularity of the two terms in relation with an improvement of the situation and the general electoral process rather than the revolting meanings as proposed by the prosecution. The slogan has now been banned by Hong Kong authorities and much of the resistance of 2019 has been subdued through the National Security Law. (Candice Chau, "Experts dispute meaning of protest slogan as trial of Hong Kong activist Tam Tak-chi resumes after 2-month wait," Hong Kong Free Press, 18 October 2021)

Standing Committee of NPC commences the 31st session 
On 19 October, the Standing Committee of the 13th National People's Congress held its 31st session. The session will continue until 23 October. The top legislating body is set to discuss and review numerous draft laws and law amendments during the session. Some of the draft laws that will be discussed include family education promotion, land borders, wetlands protection and anti-telecom fraud. The session will also review the audit law, anti-monopoly law, and civil procedure law. ("China's top legislature starts standing committee session," Xinhua Net, 19 October 2021)

Confirmation of five positive cases sends border region in frenzy to control the resurgence of COVID-19
On 19 October, the Chinese authorities blocked the China-Mongolia border after five individuals from the cross-provincial tour group tested positive for COVID-19. The local authorities also rolled out mass nucleic acid tests for all residents hours after the confirmation, in an effort to contain the spread of the virus. Public spaces, venues, schools and transportation were also halted and drivers from Mongolia were restricted from traveling and crossing the border. The Ejina Banner region, which is close to the Omnogovi province in Mongolia is currently undertaking anti-epidemic measures and screening close tests, restricting travel and issuing tests and disinfection measures to tackle the resurgence of the epidemic. ("China-Mongolia border port in lockdown as Shanghai tour group transmission expands," Global Times, 19 October 2021)

Hong Kong lawmakers explore ways to involve Hong Kongers in legislative elections
On 18 October, the Secretary for Constitutional and Mainland Affairs Erick Tsang explained that his team had been investigating the possibility of having polling facilities at border control stations. The initiative will enable citizens from Hong Kong to cast their vote for the upcoming legislative elections. The government spokesperson said that the move is being explored to establish a way to enable Hong Kongers to "exercise their right to vote and perform their civic duty." However, the state will have to deal with the challenge of selecting an appropriate and feasible polling station near the borders and also check the in-flow and out-flow of the people during the pandemic. ("Hong Kong lawmakers urge gov't to work out plans for mainland-based voters in Dec election," Hong Kong Free Press, 19 October 2021)

REGIONAL
Taiwan within top 5 in 'Internet Freedom' list; China comes in last
On 18 October, Taiwan News reported on a new infographic list released by Freedom House ranking countries by the degree of freedom that citizens enjoy on the internet. Taiwan was included in the list for the first time ever. It was one of the six "new countries" added in the list. Taiwan received the 5th rank in the index, scoring 80 points out of 100 and topping the Asian territory. Freedom House lauded Taiwan's innovative technologies to circumvent the interference on the internet by China. However, China received 10 points making it the last country to feature on the list. The report used parameters like obstacles to access, limits on content, and violations of user rights. (Keoni Everington, "Internet freedom in Taiwan like 'different planet' from China," Taiwan News, 18 October 2021)

INTERNATIONAL
Chinese and Russian navy vessels pass through the Japanese straits
On 19 October, The Mainichi reported, citing the Japanese Defence Ministry, that Chinese and Russian warships jointly passed through the Tsagaru Strait near Japan's main island. This is reportedly the first time that Chinese and RUssian vessels have passed through the narrow strait. Although the passing of foreign vessels through the strait is not unlawful, the Defence Ministry of Japan is investigating the intent of the two countries. It is reported that a total of 10 vessels crossed the narrow strip and some might have been a part of the joint naval exercise between China and Russia held in the Sea of Japan last month. ("Chinese, Russian warships pass through Tsugaru Strait for 1st time," The Mainichi, 19 October 2021)

Foreign Minister expresses hopes for great success in relations with Zambia
On 18 October, the Chinese Foreign Minister Wang Yi held a telephonic discussion with the new Foreign Minister of Zambia. During the conversation, Wang Yi said that the cooperation between the two countries had great potential and a bright future. He said: "China and Zambia are both developing countries that share broad common interests and goals." China also expressed willingness to provide Zambia with another package of one million doses to fight the coronavirus pandemic. Through the partnership with Zambia, China hopes to encourage other African countries to be a part of China's Global Development Initiative and the Initiative on Partnership for Africa's Development. ("China-Zambia cooperation has great potential: Chinese FM," Xinhua Net, 19 October 2021)