Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
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Buying and paying for meals and supplies online was already second nature for many Chinese before the Covid-19 lockdown
The supply and delivery networks that were already in place were able to work with the authorities in cities like Wuhan
China’s established home delivery system played an important role in getting food and other necessities to residents during the Wuhan lockdown. Photo: EPA-EFE
When Liu Yilin, a retired middle schoolteacher in Wuhan, first heard rumours of a
and shoppers flooded to the markets and malls to snap up supplies.
But as time went on and with residents banned from leaving their homes, he became increasingly concerned about getting hold of fresh supplies of vegetables, fruit and meat until the nation’s vast network of delivery drivers came to the rescue.
“It was such a relief that several necessity purchasing groups organised by community workers and volunteers suddenly emerged on WeChat [a leading social media app] days after the lockdown,” Liu said. “China’s powerful home delivery service makes life much easier at a time of crisis.”
Hu Xingdou, a Beijing-based independent political economist said: “Home delivery played a very important role amid the coronavirus outbreak. To some extent, it prevented people from starving especially in cases when local governments took extreme measures to isolate people.”
According to Liu, people in Wuhan during the lockdown had to stay within their residential communities, with community workers guarding the exits.
Human contact was limited to the internet. Residents placed orders online with farmers, small merchants or supermarkets to buy daily necessities, and community workers helped distribute the goods from deliverymen.
Every morning, Liu passed a piece of paper with his name, phone number and order number to a community worker who would collect the items from a courier at the gate of the residential area.
Thanks to a high population density in urban areas, affluent labour force and people’s openness to digital life, China has built a well-developed home delivery network.
Extensive funding from technology companies has been invested in hardware infrastructure, software to improve logistics and big data and cloud computing to help predict consumers’ behaviour.
Mark Greeven, professor of innovation and strategy at IMD Business School in Lausanne, Switzerland, said: “Whether it is delivery of products, air parcels or fresh food or even medicine or materials for medical use, China has a very well developed system. Much better developed than I think almost any other places in the world.
“Well before the crisis, China had started to embrace digital technology in daily life whether it is in consumption, business, government and smart cities and use of third party payments. All of these things have been in place for a long time and the crisis tested its agility and capability to deal with peak demand.”
China’s e-commerce giants help revive sales of farm goods from Hubei
3 Apr 2020
According to e-commerce giant JD.com, demands for e-commerce and delivery services spiked during the outbreak of Covid-19, the illness caused by the new coronavirus.
It sold around 220 million items between January 20 and February 28, mainly grains and dairy products with the value of beef orders trebling and chicken deliveries quadrupling compared with a year ago.
Tang Yishen, head of JD Fresh, its fresh foods subsidiary, said: “The surge of online demand for fresh merchandise shows the pandemic helped e-commerce providers further penetrate into the life of customers. It also helped upstream farm producers to know and trust us.”
Meituan Dianping, a leading e-commerce platform, said its grocery retail service Meituan Instashopping reported a 400 per cent growth in sales from a year ago in February from local supermarkets.
The most popular items ordered between January 26 and February 8 were face masks, disinfectant, tangerines, packed fresh-cut fruits and potatoes.
The food delivery service Ele.me said that, between January 21 and February 8, deliveries of frozen food surged more than 600 per cent year on year, followed by a nearly 500 per cent growth in delivery of pet-care products. Fresh food deliveries rose by 181 per cent while drink and snack deliveries climbed by 101 per cent and 82 per cent, respectively. Ele.me is owned by Alibaba, the parent company of the South China Morning Post.
Chinese hotpot restaurant chain adapts as coronavirus fears push communal meals off the menu
E-commerce providers used the opportunity to show goodwill and improve their relationship with customers and partners, analysts say.
Sofya Bakhta, marketing strategy analyst at the Shanghai-based Daxue Consulting, said the food delivery sector had made significant headway in reducing physical contact during the outbreak.
Delivery staff left orders in front of buildings, in lifts or temporary shelters as instructed by the clients as most properties no longer allowed them inside.
Some companies also adopted more hi-tech strategies.
In Beijing, Meituan used self-driving vehicles to deliver meals to contactless pickup stations. It also offered cardboard boxes to be used as shields aimed at preventing the spread of droplets among its clients while they ate in their workplaces. In Shanghai, Ele.me employed delivery drones to serve people under quarantine in the most affected regions.
Some companies even “shared” employees to meet the growing labour demand in the food delivery industry that could not be satisfied with their ordinary workforce, Bakhta said.
More employees from restaurants, general retail and other service businesses were “loaned” to food delivery companies, which faced manpower shortages during the outbreak, according to Sandy Shen, senior research director at global consultancy Gartner.
“These arrangements not only ensured the continuity of the delivery service but also helped businesses to retain employees during the shutdown,” she said.
A delivery man takes a break between orders in Wuhan, central China, during the lockdown. Photo: AFP
Mo Xinsheng became one such “on-loan” worker after customers stopped coming to the Beijing restaurant where he worked as a kitchen assistant.
“I wanted to earn some money and meanwhile help people who are trapped at home,” said Mo, who was hired as a delivery man.
But before he could start work he had to go through lengthy health checks before he was allowed into residential compounds.
He also had to work long hours battling the wind and cold of a Beijing winter and carrying heavy loads.
“I work about 10 hours every day just to earn several thousand yuan [several hundred US dollars] a month,” he said.
“Sometimes I almost couldn’t breathe while my hands were fully loaded with packages of rice, oil and other things.
“But I know I’m doing an important job, especially at a time of crisis,” Mo said, “It was not until then that I realised people have become so reliant on the home delivery system.”
Woman uses remote control car to buy steamed buns amid coronavirus outbreak in China
The delivery system has been improved by an effective combination of private sector innovation and public sector coordination, said Li Chen, assistant professor at the Centre for China Studies at Chinese University of Hong Kong.
“[In China,] government units and the Communist Party grass roots organisations have maintained fairly strong mobilisation capabilities to cope with emergencies, which has worked well in the crisis,” he said.
However, Liu, the Wuhan resident, said prices had gone up and vegetables were three times more expensive than they had been over Lunar New Year in 2019.
“There were few varieties that we could choose from, apart from potatoes, cabbage and carrots,” he said.
“But I’m not complaining. It’s good we can still get fresh vegetables at a difficult time. Isn’t it? After all, we are just ordinary people,” he said.
Seoul’s handling of the outbreak emphasises transparency and relies heavily on public cooperation in place of hardline measures such as lockdowns
While uncertainties remain, it is increasingly viewed by public health experts as a model to emulate for authorities desperate to keep Covid-19 in check
A woman wearing a face mask walks along the Han river at a park in Seoul, South Korea. Photo: AP
After announcing 600 new cases for March 3, the authorities reported 131 new infections a week later. On Friday, officials reported just 110, the lowest daily toll since February 21. The same day, the number of recovered patients, 177, exceeded new infections for the first time.President Moon Jae-in, while cautioning against premature optimism, has expressed hope that South Korea could soon enter a “phase of stability” if the trend holds firm.
With about 8,000 confirmed cases and more than 65 deaths, it was until recently the country with the most confirmed cases outside China – but South Korea has since emerged as a source of inspiration and hope for authorities around the world as they scramble to fight the pandemic.
South Korea’s infection rate falls without citywide lockdowns like China, Italy
11 Mar 2020
As countries ranging from the United States to Italy and Iran struggle to manage the virus, Seoul’s handling of the outbreak – involving a highly coordinated government response that has emphasised transparency and relied heavily on public cooperation in place of hardline measures such as lockdowns – is increasingly viewed by public health experts as a model to emulate for authorities desperate to keep the virus under control.
Whereas China, where the virus originated, and more recently Italy have placed millions of their citizens on lockdown, South Korea has not restricted people’s movements – not even in Daegu, the southeastern city at the centre of the country’s outbreak.
Instead, authorities have focused mandatory quarantine on infected patients and those with whom they have come into close contact, while advising the public to stay indoors, avoid public events, wear masks and practise good hygiene.
South Korean President Moon Jae-in visits the Korea Centres for Disease Control and Prevention on March 11. Photo: EPA
And while numerous countries have imposed sweeping travel bans – including the US, which has introduced dramatic restrictions on travel from Europe – Seoul has instead introduced “special immigration procedures” for heavily affected countries such as China, requiring travellers to undergo temperature checks, provide verified contact information and fill out health questionnaires.
[South Korea’s] approach seems less dramatic and more usable by other countries, compared with that used in mainland China – Ian MacKay, virologist at the University of Queensland
“More than a week of downward-trending case counts shows that the approach in South Korea has turned around an epidemic,” said Ian Mackay, a virologist at the University of Queensland, Australia. “This approach seems less dramatic and more usable by other countries, compared with that used in mainland China. If these trends continue, they will have managed to stop the growth of their epidemic.”
‘A SPECTACULAR FEAT’
The linchpin of South Korea’s response has been a testing programme that has screened more people per capita for the virus than any other country by far. By carrying out up to 15,000 tests per day, health officials have been able to screen some 250,000 people – about one in every 200 South Koreans – since January.
To encourage participation, testing is free for anyone referred by a doctor or displaying symptoms after recent contact with a confirmed case or travel to China. For anyone simply concerned about the risk of infection, the cost is a relatively affordable 160,000 won (US$135). Testing is available at hundreds of clinics, as well as some 50 drive-through testing stations that took their inspiration from past counterterrorism drills and can screen suspected patients in minutes.
“This country has a universal health-coverage system for the whole population and the economic burden for testing is very low,” said Kim Dong-hyun, president of the Korean Society of Epidemiology. “Tests are conducted for free if you have proper symptoms.”
The massive volume of data collected has enabled the authorities to pinpoint clusters of infection to better target their quarantine and disinfection efforts, and send members of the public text-message alerts to inform them of the past movements of infected patients in their area – even down to the names of shops and restaurants they visited.
This country has a universal health coverage system for the whole population and the economic burden for testing is very low – Kim Dong-hyun, president of the Korean Society of Epidemiology
“South Korea’s capability to test for early detection of viruses has developed greatly as it went through the 2009 new influenza outbreak and 2015 Mers [Middle East respiratory syndrome] outbreak,” said Kim Woo-joo, a professor of medicine at Korea University’s College of Medicine. “It ranks among the world’s top countries in this field.”
South Korea’s ‘drive-through’ coronavirus testing stations
Collecting this amount of data has also allowed the South Korean authorities to glean a clearer indication of the potential lethality of the virus, the fatality rate of which has diverged significantly from about 5 per cent in Italy to about 0.8 per cent in South Korea. Although factors including quality of health care, patient age and public awareness can affect the fatality rate of a virus, the scale of testing is among the most influential.
By comparison, in neighbouring Japan – which has confirmed more than 600 cases, not including the virus-stricken Diamond Princess cruise ship – the authorities had as of Friday tested over 10,000 people.
In the United States, where the authorities are unable to confirm the number of tests since they are being carried out by a patchwork of federal, state and private laboratories, the total was estimated to be fewer than 5,000 in a survey of available data by The Atlantic.
William Schaffner, a professor of preventive medicine and infectious diseases at Vanderbilt University School of Medicine in the US, said South Korea had pulled off a “spectacular” feat that was allowing health officials to track the virus and assess its intensity.
“We are unsure where our infection is and how intensely it is being transmitted in the US and we are only now starting to test,” he said.
Coronavirus is now classified as a pandemic
13 Mar 2020
South Korea is not unique in claiming some success in its fight against the virus. Singapore, Taiwan and Hong Kong, informed by past outbreaks such as severe acute respiratory syndrome (Sars) and Mers, have managed to keep confirmed cases low while eschewing the sort of draconian measures implemented in mainland China.
Early on, Hong Kong took some of the most comprehensive steps to implement “social distancing” – in which events are cancelled and venues closed to minimise contact between people – by shutting schools in late January, while the authorities produced a digital map of confirmed cases to allow people to avoid potentially infected areas.
In Taiwan, officials have pooled information from immigration and health insurance databases to track people’s travel histories and symptoms, and used phone tracking to ensure compliance with quarantine. Singapore has similarly tracked infected patients and traced their contacts, with stiff penalties for those who disobey quarantine or mislead the authorities about where they have travelled.
A worker disinfects a Seoul subway station as a precaution against the new coronavirus. Photo: AP
OPENNESS AND TRANSPARENCY
But where South Korea has stood apart is seemingly turning the tide against a major outbreak while maintaining openness and transparency. The largest cluster of cases in the country is linked to a secretive religious sect, Shincheonji, members of which have been accused of negligently spreading the virus as well as evading medical follow-ups and testing.
In addressing the Covid-19 outbreak, sound decision-making should not be about making a choice between maximised protection or minimal disruption – Yanzhong Huang, Council on Foreign Relations
“South Korea’s experience suggests that a country can contain the spread of the virus in a relatively short period of time without relying on draconian, at-all-costs containment measures,” said Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations in New York.
“For countries like the US, the Korean experience offers an acceptable, likely more viable, alternative to addressing the outbreak. In addressing the Covid-19 outbreak, sound decision-making should not be about making a choice between maximised protection and minimal disruption.”
China effectively barred 60 million people in Wuhan – ground zero of the outbreak – and the rest of the province of Hubei from leaving their homes, while restricting the movements of hundreds of millions of others across the country by shutting down public transport, banning private cars and setting up roadblocks.
‘I was stupidly overconfident’: a Korean coronavirus survivor’s tale
15 Mar 2020
The country claims to have effectively halted the spread of the virus after recording more than 80,000 cases and 3,100 deaths, and its daily updates have in recent weeks fallen from thousands of new cases to dozens. However, scepticism lingers over official figures after local and provincial officials in Hubei initially tried to hide the extent of the outbreak.
In a move widely seen to be aimed at touting the success of Beijing’s hardline measures, Chinese President Xi Jinping on Tuesday made his first visit to Wuhan, during which he called for businesses and factories to return to work as normal and for the country to refocus on economic growth.
“While China has been able to control Covid-19, I don’t think its draconian methods are worth copying in liberal democracies,” said Lawrence Gostin, director of the O’Neill Institute for National and Global Health Law at Georgetown University Law Centre in Washington. “Most democracies value human rights and freedoms … [not] the degree of social control we’ve seen in China. South Korea offers a better model.”
A nearly empty customer call centre in the Gocheok-dong neighbourhood of Seoul as workers isolate or work from home. Photo: EPA
But in a striking indication that Beijing’s harsh tactics could inform even liberal democratic societies, Italy on Monday announced a nationwide quarantine after a massive spike in cases caught the authorities off guard. Shops, restaurants and bars have been closed, while public gatherings and most travel have been banned in the European country, which has confirmed more than 15,000 cases and 1,000 deaths as of Friday – making it the site of the biggest outbreak outside China.
In the Philippines, President Rodrigo Duterte on Thursday announced a lockdown of the entire Metro Manila region and its 12.8 million people.
David Hui Shu-cheong, an expert in respiratory medicine at the Chinese University of Hong Kong, said Italy had responded “very slowly” to the outbreak, in contrast to South Korea.
Southeast Asia at risk of missing coronavirus cases amid dengue outbreak: experts
11 Mar 2020
Even as Beijing touted its success at fighting the virus, with state media recently insisting the “world owes China a ‘thank you’”, South Korea – which democratised in the late 1980s following decades of military dictatorship – has made no secret of its desire to promote a more liberal alternative.
At a press conference with foreign media this week, vice-health minister Kim Gang-lip said that while drastic measures such as locking down affected areas had demonstrated “modest effectiveness”, they suffered from being “coercive and inflexible”.
“Korea, as a democratic country, values globalisation and a pluralistic society,” he said.
“Therefore we believe we must transcend the limitations of the conventional approach to fighting infectious disease.”
Kim stressed that public trust was crucial to the government’s strategy. “The more transparently and quickly accurate information is provided, the more the people will trust the government,” he said. “They will act rationally for the good of the community at large.”
South Korean ministers listen to Prime Minister Chung Sye-kyun (on screen) during a meeting to discuss measures to deal with the spread of the new coronavirus. Photo: EPA
UNKNOWN FACTORS
Although the authorities have shut down schools nationwide, South Koreans have largely embraced self-isolation and social distancing of their own accord.
In the past fortnight, more than 12,000 businesses have applied for subsidies to pay the wages of employees while they temporarily close their doors due to the outbreak, according to the country’s labour ministry. Many shops in Daegu, the site of more than three-quarters of the country’s cases, have shut their doors, while shopping malls and cinemas across the country have become largely deserted as people stay at home. Catholic churches and Buddhist temples nationwide have suspended mass and prayer services.
“To an outsider, South Korea has handled an enormous surge in cases very well and seemed to mitigate further spread through forms of … passive social isolation,” said Howard P. Forman, a professor of public health policy at Yale School of Management.
Indonesian firms doing business with China face tough times with coronavirus outbreak
12 Mar 2020
Some experts suggest South Korean society’s emphasis on discipline and community may have given it room to avoid implementing more draconian measures.
“This measure appears to have been very successful but is reliant on the local population working with the response,” said Jeremy Rossman, an honorary senior lecturer in virology at the University of Kent. “It is not clear how effective this approach would be in other cultures and it does require effective communication with the local population.”
How a secretive church in South Korea became a coronavirus ‘super spreader’
However, South Korea’s response has not been without missteps or critics.
In mid-February, before it emerged that the virus had spread rapidly among Shincheonji followers, Moon made the ill-fated prediction that the outbreak would “disappear before long”.
The Korean Medical Association – the country’s largest association of doctors – and conservative media have criticised the president for not outright banning travel from China.
Nearly 1.5 million South Koreans have signed an online petition calling for Moon’s impeachment over his handling of the outbreak, and his approval rating this week dropped to just under 45 per cent – although, in a sign of reviving fortunes, an opinion poll released on Friday saw the president’s response rated favourably.
Medical workers attend to a woman who was feeling unwell upon her arrival at the Keimyung University hospital in Daegu. Photo: AFP
It is still too early to say whether the response is working – Kim Dong-hyun, president of the Korean Society of Epidemiology
Some experts caution that it is too early to tell if South Korea truly has the virus under control. The discovery of a new cluster of about 100 infections at a call centre in densely populated Seoul prompted a sudden uptick in cases on Wednesday, raising fears the virus could be on the verge of spreading uncontrollably nationwide.
“It is still too early to say whether the response is working,” said Kim, the president of the Korean Society of Epidemiology. “There is an optical illusion involved in the figures. The daily numbers of new cases appear to be decreasing as the screening of Shincheonji followers is coming to an end, but it must be noted that there are new clusters emerging in Seoul and other areas. We can’t lower vigilance.”
Like elsewhere, the country is facing unknown factors such as warming temperatures in the coming weeks and the arrival of travellers from new and emerging infection hotspots overseas. “We are seeing that in South Korea, large epidemics can be slowed,” said Mackay from the University of Queensland. “Can they be prevented? That will be the challenge for countries who have yet to see widespread community transmission.”
In the face of uncertainty, South Korea appears determined to hold firm to its strategy. During a visit to the Korea Centres for Disease Control and Prevention on Wednesday, Moon said the country’s response had received international recognition and allowed it to avoid the “extreme choice” of sweeping travel bans.
The next day, responding to the World Health Organisation’s decision to declare the virus a global pandemic, the president called on South Koreans to maintain hope that the virus would be overcome.
“It might take more time than we thought,” Moon said. “Everyone, please don’t become fatigued.”
HONG KONG (Reuters) – China’s People’s Liberation Army (PLA) soldiers in shorts and t-shirts made a surprising appearance in some Hong Kong streets on Saturday, briefly helping residents clean up debris after anti-government protests blocked roads, witnesses said.
The presence of PLA troops on the streets, even to help clean up roads near their base, could stoke further controversy over the Chinese-ruled territory’s autonomous status.
Hong Kong has been rocked by more than five months of demonstrations by protesters angry at perceived Communist Party meddling in the former British colony, which was guaranteed its freedoms when it returned to Chinese rule in 1997.
Beijing denies interfering and has blamed the unrest on foreign influences.
Clashes between protesters and police have become increasingly violent. China has warned that any attempt at independence for Hong Kong will be crushed, but troops have remained inside their base.
RELATED COVERAGE
China’s PLA soldiers seen helping clean up streets after Hong Kong protests – RTHK
Saturday’s clean up followed some of the worst violence seen this year, after a police operation against protesters at the Chinese University of Hong Kong on Tuesday.
The authorities have since largely stayed away from at least five university campuses that had been barricaded by thousands of students and activists who stockpiled petrol bombs, catapults, bows and arrows and other weapons.
Many protesters appeared to have left the campuses by late Saturday, though some remained behind to man makeshift barricades. Hong Kong’s Cross-Harbour Tunnel was still blocked by protesters occupying Polytechnic University.
Earlier, hundreds of pro-China demonstrators gathered by the city’s legislature and police headquarters, waving Chinese and Hong Kong flags. Some held up posters reading “Police we stand with you”, while others chanted “Support the police”.
Pro-China protests have so far attracted much smaller numbers than those angry at Beijing.
RARE TROOP PRESENCE
By late afternoon, the PLA soldiers had left the streets outside Baptist University, beside their barracks in leafy Kowloon Tong.
Chinese troops have appeared on local streets only once since the 1997 handover, to help with cleanup operations after a typhoon in late 2018. It was not immediately clear how many were involved on Saturday.
Calls to the PLA Hong Kong garrison office and a media liaison officer went unanswered.
Demosistō, a pro-democracy organisation, said Saturday’s cleanup operation could set a “grave precedent” if the city’s government invites the military to deal with internal problems.
In August, Beijing moved thousands of troops across the border into Hong Kong in what state news agency Xinhua described as a routine “rotation”.
Foreign envoys and security analysts estimate up to 12,000 troops are now based across Hong Kong — more than double the usual garrison number.
Standing beside a black flag with the slogan “Liberate Hong Kong, Revolution of our Times,” James Wong, 23, was among a handful of protesters still manning a bridge at Baptist University.
“We didn’t want to confront the people and the PLA troops directly,” he told Reuters. “We are not directly against the PLA, but rather the government. But the PLA should not leave their base because this is Hong Kong territory.”
Wong said even after the campus fortifications have been dismantled “Hong Kong will keep resisting until the government responds to our demands”.
Hundreds of residents moved in to help clear barricaded roads near several universities.
Clashes on Saturday saw at least one petrol bomb thrown before anti-government protesters at the campuses retreated. No soldiers appeared to have been involved in the confrontations.
“We just want our lives to continue,” said one resident who was helping clear streets near HKU. “There are many elderly who need to go the hospital and children who need to go to school. I am very sad to see what is happening in my community.”
PRO-POLICE DEMONSTRATION
Saturday’s rally to denounce the anti-government violence drew a mix of young and elderly.
“From the bottom of our hearts, we believe it is the correct thing to support the police in fighting the rioters for Hong Kong citizens,” said a 49-year-old housewife surnamed Kong.
“A lot of people keep silent, afraid of the rioters. It’s time for all the people who are silent to step up and say that’s enough.”
A 70-year-old street cleaner died on Thursday after being hit on the head by one of several bricks police said had been thrown by “masked rioters”. On Monday, police blamed a “rioter” for dousing a man in petrol and setting him on fire. The victim is in critical condition.
On the same day, police shot a protester in the abdomen. He was in a stable condition.
Many pro-police protesters laid white flowers outside the government office to pay their respects to the cleaner. Others applauded and cheered the police, some bowing and giving thumbs up as they walked past riot police on duty.
Authorities said on Saturday that a highway blocked by anti-government protesters on Friday had reopened after being cleared of debris and petrol bombs.
Train services suspended earlier in the week were gradually resuming, metro operator MTR Corp (0066.HK) said.
Hong Kong’s rule of law has been pushed to the “brink of total collapse” after more than five months of protests, police have warned.
The warning came as protesters clashed with police across the city on Tuesday.
At the Chinese University of Hong Kong, police fired tear gas and rubber bullets at protesters who built barricades on the campus.
Earlier in the day, around 1,000 protesters rallied in central Hong Kong during the lunch hour blocking roads
Protesters, wearing office clothes, were seen chanting: “Fight for freedom, stand with Hong Kong!”
The demonstrations come just a day after the territory saw a marked escalation in violence, with police shooting one activist in the torso. A pro-Beijing supporter was set on fire by anti-government protesters.
The protests started in June against a now-withdrawn plan to allow extradition to mainland China, but have since morphed into wider demonstrations, with activists demanding greater democracy and police accountability in Hong Kong.
On Tuesday afternoon, police spokesman Kong Wing-cheung hit out at the protesters, saying they had “countless examples of rioters using random and indiscriminate violence against innocent” people.
“Hong Kong’s rule of law has been pushed to the brink of total collapse as masked rioters recklessly escalate their violence under the hope that they can get away with it,” he told reporters, adding that Monday’s attack on the pro-Beijing supporter was being investigated as attempted murder.
Image copyright AFPImage caption Protesters and office workers were seen blocking roads in Hong Kong’s financial district
Speaking at the same conference, Supt Li Kwai-wah defended the officer’s decision to shoot the protester on Monday.
“We found out that our colleague did not only face threat from one person, instead it was a group of people with an organised plan attempting to steal the gun,” he said.
“In a situation like this, we believe our police are reacting according to the guideline, to protect themselves as well as the people around them.”
Both the protester and the pro-Beijing supporter remain in hospital, with the latter in a critical condition.
What happened on Tuesday?
Clashes erupted at the Chinese University of Hong Kong, with police firing tear gas to disperse students, while at City University there was a standoff between students and riot police which continued into the evening.
Police continued to use tear gas to try to disperse the protesters who responded with bricks and petrol bombs. Hundreds of protesters remain at the Chinese University of Hong Kong.
Image copyright REUTERSImage caption Students at Hong Kong’s Chinese University fought with police throughout the day
Students built roadblocks on streets in and around City University campus to stop police from entering. At one stage, a van used as part of a street barricade was set on fire.
Students at Hong Kong Polytechnic also tried to disrupt traffic near their campus.
In the morning, suspended railway services and road closures had already led to long traffic jams in the early rush hour. At noon, protesters moved into the city’s central business district for a flash mob protest.
Image copyright REUTERSImage caption At Festival Walk shopping mall, a Christmas tree was set on fire
Protests continued to intensify throughout the day. A Christmas tree inside Festival Walk shopping mall was set on fire by protesters while others were seen smashing a glass railing with hammers.
Train stations were closed across the city.
Media caption This Hong Kong protester’s shooting was livestreamed on Facebook
Eight universities have announced they will suspend classes on Wednesday.
Monday’s protests saw 260 people arrested bringing the number to more than 3,000 since the protests began in June.
Students swear they will not surrender
Grace Tsoi, BBC World Service, at the Chinese University of Hong Kong
Image copyright AFPImage caption Hundreds of protesters remain at the university
The ground was strewn with bricks. The air was filled with the smell of tear gas. Fire was raging on campus. Hundreds of protesters, most of them clad in black, formed human chains to pass bricks and petrol bombs to the front line.
One of the best universities in Hong Kong has turned into a battlefield after another day of intense clashes between students, who have been at the forefront of anti-government protests, and police.
The Chinese University students have been putting up resistance since the morning. On Monday, police seemed to change strategy by deploying forces to campuses. Students told me they should not be allowed there.
The university’s management has tried to deescalate the situation. Vice-chancellor Rocky Tuan was also tear gassed as he was negotiating with police.
Dozens of students have been injured, including at least one hit in the eye by a projectile. The night is young and students swear they will not surrender.
As China aims to develop its Greater Bay Area into an international innovation and technology hub, innovation and entrepreneurship resources are shared in the area to provide more opportunities for young Hong Kong and Macao entrepreneurs.
The provincial government of Guangdong has stepped up efforts to improve basic research capability, considered the backbone of an international innovation and technology hub, by building large scientific installations and launching provincial labs.
by Xinhua writers Liu Yiwei, Quan Xiaoshu, Wang Pan, Jing Huaiqiao
GUANGZHOU, Oct. 5 (Xinhua) — Hong Kong man Andy Ng was surprised his shared workspace Timetable was rented out completely only six months after it had started operation in Guangzhou, capital of south China’s Guangdong Province.
While studying economics at City University of Hong Kong, Ng set up his first business, developing an online education platform, but soon realized the Hong Kong market was too small. After earning a master’s degree in the UK in 2017, Ng returned to China and chose Guangzhou as his new base.
Timetable is now accumulating popularity and even fans in Dianping.com, China’s major online consumer guide. Ng feels lucky that his business caught the implementation of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) development plan.
The bay area, covering 56,000 square km, comprises Hong Kong and Macao, as well as nine cities in Guangdong. It had a combined population of about 70 million at the end of 2017, and is one of the most open and dynamic regions in China.
Aerial photo taken on July 11, 2018 shows the Hong Kong-Zhuhai-Macao Bridge in south China. (Xinhua/Liang Xu)
In July 2017, a framework agreement on the development of the bay area was signed. On February 18 this year, China issued the more specific Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area. One of its major aims is to develop the area into an international innovation and technology hub.
OPPORTUNITIES FOR YOUTH
The plan proposes that innovation and entrepreneurship resources be shared in the bay area to provide more opportunities for young Hong Kong and Macao entrepreneurs.
An incubator for entrepreneurship, Timetable is home to 52 companies, including 15 from Hong Kong and Macao, such as Redspots, a virtual reality company that won the Hong Kong Information and Communications Technology (ICT) Awards 2019.
“I persuaded them one by one to come here,” Ng said. “I told them of my own experience that the GBA is a great stage for starting a business with ever-upgrading technologies, ever-changing consumer tastes and a population 10 times that of Hong Kong.”
Timetable is a startup base of the Guangzhou Tianhe Hong Kong and Macao Youth Association, which has assisted 65 enterprises founded by Hong Kong and Macao young people since its establishment in October 2017.
The association and its four bases provide a package of services from training and registering to policy and legal consultation, said Chen Jingzhan, one of the association founders.
Tong Yat, a young Macao man who teaches children programming, is grateful the association encouraged him to come to Guangdong, where young people enjoy more preferential policies to start their own businesses.
“The GBA development not only benefits us, but paves the way for the next generation,” Tong said. “If one of my students were to become a tech tycoon in the future and tell others that his first science and technology teacher was me, I would think it all worthwhile.”
In the first quarter of this year, there were more than 980 science and technology business incubators in Guangdong, including more than 50 for young people from Hong Kong and Macao, said Wu Hanrong, an official with the Department of Science and Technology of Guangdong Province.
INNOVATION HIGHLAND
As the young entrepreneurs create a bustling innovative atmosphere, the Guangdong government has stepped up efforts to improve basic research capability, considered the backbone of an international innovation and technology hub, by building large scientific installations and launching provincial labs.
Several large scientific facilities have settled in Guangdong. China Spallation Neutron Source (CSNS) operates in Dongguan City; a neutrino observatory is under construction in Jiangmen City; a high intensity heavy-ion accelerator is being built in Huizhou City.
Aerial photo taken on June 23, 2019 shows the construction site of the Jiangmen Underground Neutrino Observatory (JUNO) in Jiangmen, south China’s Guangdong Province. (Xinhua/Liu Dawei)
Guangdong also plans to build about 10 provincial labs, covering regenerative medicine, materials, advanced manufacturing, next-generation network communications, chemical and fine chemicals, marine research and other areas, said Zhang Yan, of the provincial department of science and technology.
Unlike traditional universities or research institutions, the provincial labs enjoy a high degree of autonomy in policy and spending. A market-oriented salary system allows them to recruit talent from all over the world, and researchers from other domestic organizations can work for the laboratories without giving up their original jobs, Zhang said.
The labs are also open to professionals from Hong Kong and Macao. Research teams from the universities of the two special administrative regions have been involved in many of the key programs, Zhang said.
For example, the provincial lab of regenerative medicine and health has jointly established a regenerative medicine research institute with the Chinese University of Hong Kong, a heart research center with the University of Hong Kong, and a neuroscience research center with the Hong Kong University of Science and Technology (HKUST).
Photo taken on July 24, 2019 shows a rapid cycling synchrotron at the China Spallation Neutron Source (CSNS) in Dongguan, south China’s Guangdong Province. (Xinhua/Liu Dawei)
Guangdong has been trying to break down institutional barriers to help cooperation, encouraging Hong Kong and Macao research institutions to participate in provincial research programs, exploring the cross-border use of provincial government-sponsored research funds, and shielding Hong Kong researchers in Guangdong from higher mainland taxes.
NANSHA FOCUS
Located at the center of the bay area, Guangzhou’s Nansha District is designed as the national economic and technological development zone and national free trade zone, and is an important pivot in building the area into an international innovation and technology hub.
The construction of a science park covering about 200 hectares started on Sept. 26. Gong Shangyun, an official with the Nansha government, said the park will be completed in 2022.
Jointly built by the Guangzhou government and the Chinese Academy of Sciences (CAS), the science park will accommodate CAS research institutes from around Guangzhou, including the South China Sea Institute of Oceanology, the South China Botanical Garden (SCBG) and the Guangzhou Institute of Energy Conversion.
Ren Hai, director of the SCBG, is looking forward to expanding the research platforms in Nansha. “We will build a new economic plant platform serving the green development of the Pearl River Delta, a new botanical garden open to the public, and promote the establishment of the GBA botanical garden union.”
Wang Ying, a researcher with the SCBG, said the union will help deepen the long cooperation among its members and improve scientific research, science popularization and ecological protection. “Predecessors of our botanical garden have helped the Hong Kong and Macao counterparts gradually establish their regional flora since the 1950s and 1960s.”
HKUST also started to build a new campus in Nansha the same day as the science park broke ground. “Located next to the high-speed rail station, the Guangzhou campus is only a 30-minute journey from the Hong Kong campus. A delegation from the HKUST once paid a visit to the site and found it very convenient to work here,” Gong said.
Chief Executive of the Hong Kong Special Administrative Region (HKSAR) Carrie Lam hoped the new campus would help create a new chapter for the exchanges and cooperation on higher education between Guangzhou and Hong Kong, and cultivate more talents with innovative capabilities.
Nansha’s layout is a miniature of the provincial blueprint for an emerging international innovation and technology hub.
“We are seeking partnership with other leading domestic research institutions and encouraging universities from Hong Kong and Macao to set up R&D institutions in Guangdong,” said Zhang Kaisheng, an official with the provincial department of science and technology.
“We are much busier now, because research institutes at home and abroad come to talk about collaboration every week. The GBA is a rising attraction to global scientific researchers,” Zhang said.
An increasing proportion of young people no longer willing to wait tables in China as restaurant owners look to new technology for answers
Catering robots developed by Pudu Tech, the three-year-old Shenzhen start-up, have been adopted by thousands of restaurants in China, as well as some foreign countries including Singapore, Korea, and Germany. Photo: Handout
Two years ago, Bao Xiangyi quit school and worked as a waiter in a restaurant for half a year to support himself, and the 19 year-old remembers the time vividly.
“It was crazy working in some Chinese restaurants. My WeChat steps number sometimes hit 20,000 in a day [just by delivering meals in the restaurant],” said Bao.
The WeChat steps fitness tracking function gauges how many steps you literally take and 20,000 steps per day can be compared with a whole day of outdoor activity, ranking you very high in a typical friends circle.
Bao, now a university student in Hangzhou, Zhejiang province, quit the waiter job and went back to school.
“I couldn’t accept that for 365 days a year every day would be the same,” said Bao.
“Those days were filled with complete darkness and I felt like my whole life would be spent as an inferior and insignificant waiter.”
Olivia Niu, a 23-year-old Hong Kong resident, quit her waiter job on the first day. “It was too busy during peak meal times. I was so hungry myself but I needed to pack meals for customers,” said Niu.
Being a waiter has never been a top career choice but it remains a big source of employment in China. Yang Chunyan, a waitress at the Lanlifang Hotel in Wenzhou in southeastern China, has two children and says she chose the job because she needs to make a living.
Catering robots developed by Pudu Tech, the three-year-old Shenzhen start-up. Photo: Handout
Today’s young generation have their sights on other areas though. Of those born after 2000, 24.5 per cent want careers related to literature and art. This is followed by education and the IT industry in second and third place, according to a recent report by Tencent QQ and China Youth Daily.
Help may now be at hand though for restaurants struggling to find qualified table staff who are able to withstand the daily stress of juggling hundreds of orders of food. The answer comes in the form of robots.
Japan’s industrial robots industry becomes latest victim of the trade war
Shenzhen Pudu Technology, a three-year-old Shenzhen start-up, is among the tech companies offering catering robots to thousands of restaurant owners who are scrambling to try to plug a labour shortfall with new tech such as machines, artificial intelligence and online ordering systems. It has deployed robots in China, Singapore, Korea and Germany.
With Pudu’s robot, kitchen staff can put meals on the robot, enter the table number, and the robot will deliver it to the consumer. While an average human waiter can deliver 200 meals per day – the robots can manage 300 to 400 orders.
“Nearly every restaurant owner [in China] says it’s hard to recruit people to [work as a waiter],” Zhang Tao, the founder and CEO of Pudu tech said in an interview this week. “China’s food market is huge and delivering meals is a process with high demand and frequency.”
Pudu’s robots can be used for ten years and cost between 40,000 yuan (US$5,650) and 50,000 yuan. That’s less than the average yearly salary of restaurant and hotel workers in China’s southern Guangdong province, which is roughly 60,000 yuan, according to a report co-authored by the South China Market of Human Resources and other organisations.
As such, it is no surprise that more restaurants want to use catering robots.
According to research firm Verified Market Research, the global robotics services market was valued at US$11.62 billion in 2018 and is projected to reach US$35.67 billion by 2026.
Can robots and virtual fruit help the elderly get well in China?
China’s labour force advantage has also shrank in recent years. The working-age population, people between 16 and 59 years’ old, has reduced by 40 million since 2012 to 897 million, accounting for 64 per cent of China’s roughly 1.4 billion people in 2018, according to the national bureau of statistics.
By comparison, those of working age accounted for 69 per cent of the total population in 2012.
Other Chinese robotic companies are also entering the market. SIASUN Robot & Automation Co, a hi-tech listed enterprise belonging to the Chinese Academy of Sciences, introduced their catering robots to China’s restaurants in 2017. Delivery robots developed by Shanghai-based Keenon Robotics Co., founded in 2010, are serving people in China and overseas markets such as the US, Italy and Spain.
Pudu projects it will turn a profit this year and it is in talks with venture capital firms to raise a new round of funding, which will be announced as early as October, according to Zhang. Last year it raised 50 million yuan in a round led by Shenzhen-based QC capital.
To be sure, the service industry is still the biggest employer in China, with 359 million workers and accounting for 46.3 per cent of a working population of 776 million people in 2018, according to the national bureau of statistics.
And new technology sometimes offers up new problems – in this case, service with a smile.
“When we go out for dinner, what we want is service. It is not as simple as just delivering meals,” said Wong Kam-Fai, a professor in engineering at the Chinese University of Hong Kong and a national expert appointed by the Chinese Association for Artificial Intelligence. “If they [robot makers] can add an emotional side in future, it might work better.”
Technology companies also face some practical issues like unusual restaurant layouts.
“Having a [catering robot] traffic jam on the way to the kitchen is normal. Some passageways are very narrow with many zigzags,” Zhang said. “But this can be improved in future with more standardised layouts.”
Multi-floor restaurants can also be a problem.
Dai Qi, a sales manager at the Lanlifang Hotel, said it is impossible for her restaurant to adopt the robot. “Our kitchen is on the third floor, and we have boxes on the second, third, and fourth floor. So the robots can’t work [to deliver meals tdownstairs/upstairs],” Dai said.
But Bao says he has no plans to return to being a waiter, so the robots may have the edge.
“Why are human beings doing something robots can do? Let’s do something they [robots] can’t,” Bao said.
An increasing proportion of young people no longer willing to wait tables in China as restaurant owners look to new technology for answers
Catering robots developed by Pudu Tech, the three-year-old Shenzhen start-up, have been adopted by thousands of restaurants in China, as well as some foreign countries including Singapore, Korea, and Germany. Photo: Handout
Two years ago, Bao Xiangyi quit school and worked as a waiter in a restaurant for half a year to support himself, and the 19 year-old remembers the time vividly.
“It was crazy working in some Chinese restaurants. My WeChat steps number sometimes hit 20,000 in a day [just by delivering meals in the restaurant],” said Bao.
The WeChat steps fitness tracking function gauges how many steps you literally take and 20,000 steps per day can be compared with a whole day of outdoor activity, ranking you very high in a typical friends circle.
Bao, now a university student in Hangzhou, Zhejiang province, quit the waiter job and went back to school.
“I couldn’t accept that for 365 days a year every day would be the same,” said Bao. “Those days were filled with complete darkness and I felt like my whole life would be spent as an inferior and insignificant waiter.”
Olivia Niu, a 23-year-old Hong Kong resident, quit her waiter job on the first day. “It was too busy during peak meal times. I was so hungry myself but I needed to pack meals for customers,” said Niu.
Being a waiter has never been a top career choice but it remains a big source of employment in China. Yang Chunyan, a waitress at the Lanlifang Hotel in Wenzhou in southeastern China, has two children and says she chose the job because she needs to make a living.
Catering robots developed by Pudu Tech, the three-year-old Shenzhen start-up. Photo: Handout
Today’s young generation have their sights on other areas though. Of those born after 2000, 24.5 per cent want careers related to literature and art. This is followed by education and the IT industry in second and third place, according to a recent report by Tencent QQ and China Youth Daily.
Help may now be at hand though for restaurants struggling to find qualified table staff who are able to withstand the daily stress of juggling hundreds of orders of food. The answer comes in the form of robots.
Japan’s industrial robots industry becomes latest victim of the trade war
Shenzhen Pudu Technology, a three-year-old Shenzhen start-up, is among the tech companies offering catering robots to thousands of restaurant owners who are scrambling to try to plug a labour shortfall with new tech such as machines, artificial intelligence and online ordering systems. It has deployed robots in China, Singapore, Korea and Germany.
With Pudu’s robot, kitchen staff can put meals on the robot, enter the table number, and the robot will deliver it to the consumer. While an average human waiter can deliver 200 meals per day – the robots can manage 300 to 400 orders.
“Nearly every restaurant owner [in China] says it’s hard to recruit people to [work as a waiter],” Zhang Tao, the founder and CEO of Pudu tech said in an interview this week. “China’s food market is huge and delivering meals is a process with high demand and frequency.”
Pudu’s robots can be used for ten years and cost between 40,000 yuan (US$5,650) and 50,000 yuan. That’s less than the average yearly salary of restaurant and hotel workers in China’s southern Guangdong province, which is roughly 60,000 yuan, according to a report co-authored by the South China Market of Human Resources and other organisations.
As such, it is no surprise that more restaurants want to use catering robots.
According to research firm Verified Market Research, the global robotics services market was valued at US$11.62 billion in 2018 and is projected to reach US$35.67 billion by 2026. Haidilao, China’s top hotpot restaurant, has not only adopted service robots but also introduced a smart restaurant with a mechanised kitchen in Beijing last year. And in China’s tech hub of Shenzhen, it is hard to pay without an app as most of the restaurants have deployed an online order service.
Can robots and virtual fruit help the elderly get well in China?
China’s labour force advantage has also shrank in recent years. The working-age population, people between 16 and 59 years’ old, has reduced by 40 million since 2012 to 897 million, accounting for 64 per cent of China’s roughly 1.4 billion people in 2018, according to the national bureau of statistics.
By comparison, those of working age accounted for 69 per cent of the total population in 2012.
Other Chinese robotic companies are also entering the market. SIASUN Robot & Automation Co, a hi-tech listed enterprise belonging to the Chinese Academy of Sciences, introduced their catering robots to China’s restaurants in 2017. Delivery robots developed by Shanghai-based Keenon Robotics Co., founded in 2010, are serving people in China and overseas markets such as the US, Italy and Spain.
Pudu projects it will turn a profit this year and it is in talks with venture capital firms to raise a new round of funding, which will be announced as early as October, according to Zhang. Last year it raised 50 million yuan in a round led by Shenzhen-based QC capital.
To be sure, the service industry is still the biggest employer in China, with 359 million workers and accounting for 46.3 per cent of a working population of 776 million people in 2018, according to the national bureau of statistics.
And new technology sometimes offers up new problems – in this case, service with a smile.
“When we go out for dinner, what we want is service. It is not as simple as just delivering meals,” said Wong Kam-Fai, a professor in engineering at the Chinese University of Hong Kong and a national expert appointed by the Chinese Association for Artificial Intelligence. “If they [robot makers] can add an emotional side in future, it might work better.”
Technology companies also face some practical issues like unusual restaurant layouts.
“Having a [catering robot] traffic jam on the way to the kitchen is normal. Some passageways are very narrow with many zigzags,” Zhang said. “But this can be improved in future with more standardised layouts.”
Multi-floor restaurants can also be a problem.
Dai Qi, a sales manager at the Lanlifang Hotel, said it is impossible for her restaurant to adopt the robot. “Our kitchen is on the third floor, and we have boxes on the second, third, and fourth floor. So the robots can’t work [to deliver meals to downstairs/upstairs],” Dai said.
But Bao says he has no plans to return to being a waiter, so the robots may have the edge.
“Why are human beings doing something robots can do? Let’s do something they [robots] can’t,” Bao said.
Analysts say mood is shifting in mainland China as demonstrators ‘cross a line’ with national symbols
Staff and students from Pui Kiu Middle School in North Point hold flag-raising ceremony on campus on Monday. Photo: Nora Tam
A Hong Kong protester’s decision to tear down a Chinese flag and throw it in Victoria Harbour on Saturday set off an outpouring of criticism, from Chinese internet users and celebrities to pro-Beijing businesses and schools in the city.
Then on Monday at about 7pm, a group of protesters went to the same flagstaff in Tsim Sha Tsui, tore down the flag again and threw it into the harbour, the second such incident in three days. In both cases, the protesters escaped.
In North Point, the Pui Kiu Middle School organised a flag-raising ceremony at the campus on Monday even though the school was officially on summer holidays.
Principal Ng Wun-kit said teachers and students were called back on short notice to take part.
“We saw [on the news] that some rioters in helmets threw the Chinese national flag in the harbour and we strongly condemn such behaviour. It was disrespectful,” Ng said.
“We wanted to show that we are one of the 1.4 billion Chinese people who want to protect the national flag. We hope that the students, teachers, and [Hong Kong] citizens who love the country and the Chinese Communist Party can respect the Chinese flag.”
Other Hong Kong businesses and organisations flying the Chinese flag on Monday included international hotel chain Courtyard by Marriott Hong Kong, Chinese engineering firm Shanghai Zhenhua Heavy Industries and Chinese pharmaceutical giant Beijing Tong Ren Tang.
Beijing’s Hong Kong affairs office condemns protesters who threw Chinese flag in the sea
A spokeswoman from the hotel chain said it had flown the flag for many years and Monday was no exception.
“We display the flag because we are a Chinese-funded company. We do not have plans to take it down any time soon,” she said.
On Sunday, a group of Beijing supporters sang the national anthem and raised the Chinese flag in Tsim Sha Tsui to replace the one taken down.
On microblogging site Weibo, mainland Chinese and Hong Kong celebrities were among those forwarding pictures of the flag or salutes to it, adding the hashtag “the Chinese national flag has 1.4 billion flag bearers”, a topic started by China Central Television (CCTV) on Sunday. As of Monday night, the trending topic had been read more than 2 billion times, with more than 8 million posts and support from Hong Kong actors Jackie Chan, Jordan Chan Siu-chun and Hawick Lau Hoi-Wai.
In a commentary published online on Sunday, CCTV said the topic had attracted a strong response because patriotism ran deep among the Chinese people.
“We protect the flag, the national emblem, our country, and we protect our country like we protect our own homes,” it said.
Hong Kong Chief Executive Carrie Lam blasts violence at Yuen Long and liaison office, amid further extradition bill unrest
Analysts said the mood on Chinese social media had changed as protesters in Hong Kong vandalised symbols of the central government, crossing a line for most mainland Chinese.
Wang Jiangyu, an associate law professor at the National University of Singapore, said that although many mainlanders had admired Hong Kong and sympathised with its civil movements in the past, the situation had changed.
“The Chinese flag being insulted is on the top of a list of things mainlanders dislike, and for state media, which represent the central government’s position, focusing on such issues can frame the protesters as enemies of the Chinese nation or the people,” Wang said.
“It can increase the hatred of mainlanders towards the Hong Kong protesters and gain support for the central government to take action in the future.”
Ma Ngok, a political scientist at Chinese University of Hong Kong, said mainland media were using the incident to achieve their own propaganda purposes.
“Mainland media made it seem like [the flag protest was] the theme for the whole movement … but it does not represent the main demands of the anti-extradition movement. They are turning single actions into broad propaganda, and biasing mainland sentiment about Hong Kong,” Ma said.
Mainland has overestimated its nominal and real growth rates by about 2 full percentage points on average between 2008 to 2016
Calculations suggest that the current nominal size of the economy is about 18 per cent lower than the official level of US$13.4 trillion at the end of 2018
13 Feb 2019
The paper, “A Forensic Examination of China’s National Account”, was submitted to the “Brookings Papers on Economic Activity”, a journal published by the US-based Brookings Institute. Photo: EPA
China has overestimated its nominal and real growth rates by about 2 full percentage points on average between 2008 to 2016, with the miscalculation increasing each year, according to a new study published on Thursday.
The results indicate that the actual size of China’s economy at the end of 2018 was well below the government’s official estimate.
It also raises questions not only about the quality of economic data from the world’s second largest economy, but also the willingness of the government to take the steps necessary to accurately report information.
Using the study’s findings and applying them to government figures starting with the level of nominal gross domestic product (GDP) at the end of 2007 and the growth rate for 2008, calculations by the South China Morning Post show that the current nominal size of the Chinese economy is about 18 per cent lower than the official level of 90 trillion yuan (US$13.4 trillion) at the end of 2018.
The calculation assumes that the government’s official 2017 and 2018 nominal growth rates are overestimated by 2 percentage points, as suggested by the study.
Overestimates of growth in 2007 and previous years would further reduce the current size of the Chinese economy.
SCMP calculations show the adjusted nominal GDP level in China is about US$11.5 trillion using current exchange rates, still more than twice the size of Japan’s economy at US$5.16 trillion, but well below the economy of the United States at US$20 trillion.
The paper, “A Forensic Examination of China’s National Account”,was submitted to the “Brookings Papers on Economic Activity”, a journal published by the US-based think tank Brookings Institute twice a year on macroeconomic issues that are influencing the public policy debate. It will be formally presented in Washington on Thursday.
“Our estimates suggest that the extent by which local governments exaggerate local GDP accelerated after 2008, but the magnitude of the adjustment by the NBS did not change in tandem,” the authors said.
The study focuses primarily on nominal, non-inflation adjusted growth.
The paper comes at a sensitive time for Chinese policymakers, who are battling a slowing economy due to their campaign to reduce debt and risky lending as well as the effect of the trade war with the United States. The inflation-adjusted growth rate of 6.6 per cent last year was the slowest since 1990.
On Tuesday, the government announced that it had lowered its growth target for 2019 to a range of 6 to 6.5 per cent, down from “about 6.5 per cent” last year due to the multiple headwinds the economy is facing. The government also announced new tax cuts and additional government spending to help stabilise growth.
The paper’s four authors – Chen Wei, Chen Xilu and Michael Song from the Chinese University of Hong Kong and Chang-Tai Hsieh from the University of Chicago – used a mix of economic indicators that are less likely to have been manipulated by authorities to prove that the National Bureau of Statistics (NBS) have not done enough to correct the errors in the data collected from provincial governments over the past decade.
Our estimates suggest that the extent by which local governments exaggerate local GDP accelerated after 2008, but the magnitude of the adjustment by the NBS did not change in tandem.Report authors
It has long been believed that local Chinese officials inflate figures reflecting their economic performance, which is closely tied to their opportunity for promotion. Since 2003, the NBS has produced a national gross domestic product (GDP) figure that is lower than aggregate provincial data after examining other data such as the census and land sales.
Local statistics bureaus generally overstate industrial output as a portion of overall production as well as the size of investment within overall expenditures, the two different approaches to calculating GDP, according to the paper. The methods of data collection are often the cause, for example, calculations of investment spending have been based purely on government reports on specific projects rather than on the financial statements of the investing firms involved.
One method that the authors used to probe the accuracy of the NBS’s adjustments was comparing the growth of official GDP with the growth of revenue from value-added tax (VAT), which taxes the value added to a product at each stage of production.
Local governments have fewer incentives to manipulate VAT revenue, since a large portion of it is eventually transferred to the central government, therefore overstating VAT would only increase fiscal revenue losses.
Premier Li Keqiang confirmed China had lowered its growth target for 2019 to a range of 6 to 6.5 per cent at the National People’s Congress on Tuesday. Photo:
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The authors found that since 2008, the official growth rate for industry and other sectors exceeded their corresponding VAT growth rate, with the gap widening over the past decade, indicating that the government was overstating official GDP.
In other words, the overstatement of official growth has worsened since 2008 and NBS’s corrections have been increasingly inadequate to offset bottom-up data exaggerations.
A similar conclusion was drawn when the authors examined and adjusted the official GDP growth data with a set of alternative indicators, including satellite images showing lights at night, national tax revenue, electricity consumption, railway cargo traffic, as well as imports and exports that are less likely to be over-reported, although these proxies did not fully capture the growing importance of the service sector in the economy in recent years.
Among all 31 Chinese provinces, Guangdong, Zhejiang, Beijing, and Shanghai appeared to have the highest data quality, based on the economists’ own calculations that were privately confirmed by NBS officials. The worst performing provinces included Tianjin, Liaoning and Inner Mongolia, all of which have been exposed as having exaggerated economic data in recent years.
The economists suggested that the problem is that much of the underlying data needed to project GDP is outside the NBS’s control, even though the agency has been trying hard to collect local data itself. At the same time, the NBS is also in a weak political position to confront local political leaders to demand better data collection.
Although the NBS adjusts downwards local statistics, it does not report the adjusted local statistics, perhaps out of a desire to not confront powerful local leaders.Report authors
“Although the NBS adjusts downwards local statistics, it does not report the adjusted local statistics, perhaps out of a desire to not confront powerful local leaders,” the authors said.
Since September, the NBS has named and shamed local governments on its website for manipulating data, but it remains to be seen if local governments fall in line.
In a post in January, the NBS said it had passed 14 cases of data falsification on to local governments before February 2018 but that it had not been updated even though local officials are required by law to punish those responsible for manipulating data within six months after receiving a notice of a violation.
The NBS’s ability to fix China’s GDP data problem is bound by its limited political power, the authors indicated.
“There are three problems with China’s GDP. One is that it doesn’t necessarily measure the right thing. Two is statistical bias in the way data is collected. Three is really a macro policy problem by the government which should write down all the bad debt,” said Michael Pettis, professor of finance at Peking University.
“The NBS is only trying to fix the second problem.”
CHINDIA ALERT: You'll be living in their world, very soon 