NIAS Area Studies
PAKISTAN READER
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In Brief
ECONOMY
China’s targets for the financial sector
On 16 January, President Xi, during the Central Financial Work conference, set forth targets for China’s financial sector. Xi envisions the sector to follow the modernization path with Chinese characteristics and focus on bolstering institutional liberalization through the prevention and diffusion of risks. He further said the nation's financial regulation must have "teeth and thorns" and remain sharp-edged. According to China Daily, China’s financial sector has opened up to foreign investors by removing foreign ownership caps and thresholds in the banking and insurance sectors. According to the governor of the People’s Bank of China, Pan Gongsheng said that the outstanding loans of China’s banking system exceeded 200 trillion yuan and the balance of social financing exceeded 300 trillion yuan. (Xu Wei, “President sets key targets for financial sector,” China Daily, 17 January 2024)
Beijing aims to boost its GDP and economy in 2024
On 17 January, the National Bureau of Statistics (NBS) said that China’s GDP rose by 5.2 per cent in 2023 beyond the government’s target of 5 per cent. Economics Professor Zhu Tian said, “The yearly 5.2 per cent growth is achieved on the previous year’s low base and falls short of the widespread expectation of a story recovery at the beginning of 2023,”. According to the South China Morning Post, despite the focus for 2024, China is witnessing loosening investors’ confidence, stagnated property market, weak private sector and growing deflationary trends. Chief economist at Citigroup China said “On top of economic growth, other requisites for a confidence boost include a stable property market, receding deflationary pressure, as well as less policy unpredictability,” (Frank Chen & Orange Wang, “China GDP: Beijing’s long to-do list to boost economy in 2024,” South China Morning Post, 17 January 2024)
INTERNAL
National Bureau of Statistics releases its youth unemployment data
On 17 January, China’s National Bureau of Statistics (NBS) released its youth unemployment data after a six-month suspension. The report states the jobless rate for the 16 to 24 age group stood at 14.9 per cent in December 2023. According to NBS, exclusion of youth in school are excluded to reflect the status of unemployed college graduates in China. Until June 2023, the jobless rate for the 16-24 age group has gradually climbed since 2020, hitting a record high of 21.3 per cent. China feels the heat to create new jobs amid the process of economic recovery. The Chinese government has main concern on the growing unemployed graduates with an ageing population thus impacting the country’s future growth and huge pressure on social stability. (Amanda Lee & Orange Wang, “China jobs: youth-unemployment rate returns, adjusted, stands at 14.9%,” South China Morning Post, 17 January 2024)
China’s term growth concerns amid population decline
On 17 January, China’s National Bureau of Statistics (NBS) reported that the country’s population decreased for the second straight year in 2023 due to the low birth rate, wave of COVID-19 deaths and strict lockdowns. The population dipped by 2.08 million or 0.15 per cent to 1.409 billion in 2023. New births fell 5.7 per cent to 9.02 million and the birth rate was a record-low 6.39 births per 1,000 people, down to 6.77 in 2022. The country’s demography declined due to the One China Policy implemented from 1980 to 2015 and China’s rapid urbanization. According to The Strait Times, high childcare and educational costs, and job uncertainty among women discourage couples from having children. Despite the push by various local governments, many of them have not been implemented due to funding issues. (“China’s population drops for 2nd year in 2023, raises long-term growth concerns,” The Straits Times, 17 January 2024)
China appoints son of former President Hu Jintao to ministerial post
On 16 January, China announced Mr Hu Haifeng, son of former president Hu Jintao, to be appointed as the vice-head of China’s Human Resources and Social Security Ministry. Mr Hu Jintao was at the centre of the political firestorm after he was forcibly removed from the assembly against his will by President Xi’s orders. According to his official biography, Mr Hu Haifeng held mid-level official posts in the party as party committee secretary in the eastern city of Lishui. (“China appoints son of ex-president Hu Jintao to ministerial role,” The Straits Times, 16 January 2024)
CHINA & TAIWAN
Dip in Taiwan- China investments
On 15 January, an editorial in South China Morning Post “Taiwan-mainland China investment plunges to 22-year low as politics plague ties,” by Ralph Jennings highlighted that there has been an all-time dip in Taiwanese investment in China where it fell to a 22-year low in 2023. Ministry of Economic Affairs, Department of Investment Review of Taiwan reported that the investment of Taiwanese companies approved in mainland China is estimated to be USD 3.04 billion worth. Taiwanese companies have been investing in US-allied countries as tension progressed between the US and China. Executive chairman of the Guangdong Society of Reform Peng Peng said: “Taiwanese investors prefer to avoid mainland China because of US pressure to “decouple.” (“Taiwan-mainland China investment plunges to a 22-year low as politics plague ties,” South China Morning Post, 15 January 2024)
CHINA & THE AMERICAS
US expresses disappointment over Nauru’s switch to China
On 16 January, the US State Department expressed disappointment in the decision made by the tiny Pacific Island nation of Nauru to switch its diplomatic ties from Taiwan to China. This takes place amid the recent conclusion of the Taiwanese elections and the victory of the DPP at the elections. On 15 January, Nauru said that it would no longer recognize Taiwan as a separate country and would recognize it as an inalienable part of China. With Nauru’s departure, only 12 countries remain to support Taiwan. The US State Department stated that “Taiwan is a reliable, like-minded, and democratic partner. The PRC often makes promises in exchange for diplomatic relations that ultimately remain unfulfilled,”. (“US says Nauru switching ties from Taiwan to China ‘disappointing’,” The Straits Times, 16 January 2024)
CHINA & EUROPE
Li Qiang makes his official visit to Dublin, Ireland
On 16 January, Chinese Premier Li Qiang arrived at Dublin International Airport to begin his Ireland visit on the official invitation of Irish Prime Minister Leo Varadkar. The visit marked the 45th anniversary of diplomatic relations between China and Ireland. Li Qiang noted that the relations between the two countries have served as a model of friendly coexistence and win-win cooperation. Li said that both countries share similar development and other converging interests. He further said that China is willing to work with Ireland to boost the China-Ireland strategic partnership for mutually beneficial cooperation for greater benefits for both countries. (“Li Qiang arrives in Dublin for official visit to Ireland,” CGTN, 17 January 2024)
Chinese envoy says not to worry about China-Nauru ties
On 17 January, China’s ambassador to Australia Xian Qian said that China’s presence in the Pacific Islands is to assist them with policing and not defense and will not harm Australia’s security. He further stated that Nauru’s decision to choose China over Taiwan was its natural choice. Xian further stated that China intends to assist the Pacific Island countries with investment in their infrastructure, telecommunications, etc. He added that Security is the main focus of the relations between the two sides to ensure social stability and order within these island nations. Australian PM Albanese said that he respected Taiwan’s election results and also respected Nauru’s diplomatic decision. (“No need to be ‘anxious’ over China’s growing Pacific presence, envoy tells Australia,” South China Morning Post, 17 January 2024)
Editorial Team : Femy Francis, Akhil Ajith are Research Assitant at NIAS, Gopi Keshav and Arun S are Research Interns.