Indian influence in China, similarities, and differences between the two countries

In Mumbai, the former Chinese Consul, Yuan Nansheng 袁南生, at a conference in July, presents his reflections on India by addressing various topics, cultural, religious, economic, and political. He recalls several aspects, such as India’s influence on China throughout history, the similarities and differences between countries, and the long cooperation despite difficult times.

Summary/translation of several parts of the conference :

Influence of India on China

India is the world power that had the most significant influence on ancient China, including Buddhism, philosophy, agriculture, music, dance, sculpture, and medicine. The Han and Tang Dynasties are the most powerful dynasties in the history of China. India has been crucial. Three great waves of study abroad have emerged in Chinese history. The first for India began during the Han Dynasty and lasted for six hundred years until the Tang Dynasty. At the end of the Qing Dynasty and the beginning of the Republic of China, the second moved to Japan. With the third wave, the main directions were England and America.
Two figures stand out from this movement towards India: Fa Xian under the Eastern Jin Dynasty and the other the monk Xuanzang 玄奘 of the Tang. Fa Xian is the first international student of Chinese history in 399 AD. After that, the USSR exerted a significant influence on China and now the United States.
Xuanzang 玄奘 :

bouddhisme inde chine

India, foreign influence

India is a country where foreign civilizations have left a deep imprint. Some of the Central Asian Aryans moved westward, occupying Germany; others moved southward to India. These Aryans brought Brahmanism and the caste system to India. The languages of India and Europe have common roots, Indo-European. The Mongols then occupied India and established the Mughal dynasty. At that time, the Mongols believed in Islam, so they brought Islam. Later, the British came to India with Christianity, making India the largest English-speaking country and the largest democracy. India is the country with the broadest and most profound foreign footprint.

The Indian is more successful abroad

India is the country with the most successful nationals abroad. Unlike the Chinese, who always talk about returning, the Indian adapts easily – wherever they go, it is their homeland. When I was ambassador to Suriname, 36% of the population were Indians, they were the largest ethnic group, and the second largest were Indonesians. In fact, in countries like Trinidad and Tobago and Mauritius, Indians are the number one ethnic group. In South Africa, Zimbabwe, and many other countries, Indians have a strong local presence. In these places where I have worked, Indians earn money without effort, the opposite, and a lot of action without making money. Why? Indians are good at language. They are educated, speculate on stocks, open securities companies, become judges, bank owners. Money comes quickly. The Chinese generally do “forced labor.” Today, also in the United States, the CEOs of many large American companies are Indians. When I was Consul General of San Francisco in the United States, the United States’ highest income group was American Indians, $165,000 a year per family; the Chinese come second with $145,000, whites $85,000, Mexicans $23,000 a year. The Indian diaspora is the most successful abroad.

Strategic position

India attracts major powers for strategic reasons. The annual economic growth rate is generally above 7%. It is one of the most dynamic economies in the world. India imports 80% of its oil. The price of oil has dropped a lot. This is a unique opportunity for India. India’s economy is now larger than that of Russia. With the oil price war, Russia loses two billion dollars a year for every one dollar drop. Think of the money Russia has to lose. But India is delighted, and of course, China benefits a lot from the drop in oil prices.

Similarities between China and India

There are four similarities.
1. First of all, China and India belong to the four ancient civilizations.
2. China and India generated the world’s largest economies in antiquity. According to the findings of historian Angus Maddison, during the first 1500 years of the Christian era, India had the world’s largest GDP. But ancient India was more extensive. It included Pakistan, Kashmir, Bangladesh, Sri Lanka, southern Afghanistan, Nepal. Under the Ming, in the 16th century, China took India’s place.
3. Two developing countries.
4. Rapidly growing economies that are part of the BRICs.

The differences

But China and India are different in many ways.
1. China has a socialist system while India has a capitalist system with separation of powers.
2. Cultural traditions are different. I think that’s a very fundamental difference. In a sense, Chinese culture is a culture of this world, a secular culture. This culture doesn’t believe in an afterlife, doesn’t value karma, and focuses on this existence and the need to realize oneself in this life. The history in China for thousands of years is essential. The Chinese like to leave a name in history. On the other hand, the Indian culture, on the contrary, is a religious culture. Indian theology is very developed. Religion focuses on the happiness in the afterlife, not in this life. One can understand Marx’s remark, “India has no history” the ancient court of India has no Sima Qian, no Sima Guang, no historians to record history. They don’t value that. They value the afterlife. On the whole, Indian culture is a culture that believes that the more people suffer, the closer they are to God, the happier they will be in their next life. Gandhiism (the idea of Gandhi, the founding father of India) is the embodiment of the culture of suffering in modern times. Chinese culture is the opposite, a culture of joy. Why? The Chinese do not believe in an afterlife. Live every day, every day, to be happy. The West is a culture of guilt, which assumes that we are born in sin and have to go to church on weekends to atone for our sins.
We can recall that in pre-Christian times, more than two thousand years ago, the wise men, the saints, the thinkers of humanity reflected on the fundamental questions of human destiny. In Europe, Aristotle and Archimedes, for example, they were reflecting on what question? The relationship between man and nature. So there is a tradition of natural sciences in Europe, which is very well developed so far. What do the Indians think? Indians think about the relationship between man and God, so Indian theology is mainly formed. All ancient books in India are theological and agricultural. There are no history books. What were China’s sages thinking about more than two thousand years ago, Confucius, Mencius, Guiguzi, Laozi, Zhuangzi, Sun Tzu? They were thinking about human relations. Westerners first talk about what is right or wrong. Indians talk about reincarnation. China and India’s distinct cultures allowed the two countries to communicate, learn, and complement each other for thousands of years.
3. The pressures in life are different. India has free medical care for all, even for foreigners in the hospital. Studies are almost free. India invests a lot in education, about 4% of the total GDP. Except for films, all cultural performances are free. Tickets are paid by the Tata group or the Indian government. Besides, many museums, world heritage sites, and galleries have no paid admission.
4. Accommodation. The system is on the side of the tenant. He can rent to others, even if he cannot pay the rent. Indian law states that the landlord cannot evict the tenant; the tenant must be “certified.”
5. Economic strength is different. China is now the second largest economy in the world. Our GDP is over fourteen trillion dollars, about 60% of the United States’ total GDP. India is the fifth largest economy, with three trillion dollars, China is more than five times larger than India. India must be about 20 years behind China as a whole.

Relations between China and India

For China and India, the Sino-Indian relationship is one of the most important in foreign relations. India is at the center of our diplomacy in South Asia. Who was the first Chinese to discover India? According to our history books, Zhang Qian, born in 164 B.C., made three trips to the West; in the first, he made transactions with Indian merchants. Zheng He, under the Ming, made seven trips to a place called Guri.
After India’s independence, Sino-Indian relations entered a new prosperous period. When India became independent, who was the first ambassador to present India’s credentials and the first to arrive in India? It was the ambassador from China. After the founding of the People’s Republic of China, the first non-socialist country to recognize the People’s Republic of China was India. The first socialist country was the Soviet Union. During his lifetime, Chairman Mao Zedong visited only one foreign embassy in Beijing after founding the People’s Republic of China. Which embassy? The Embassy of India. In April 1954, India’s founding Prime Minister, Jawaharlal Nehru, visited China. It was the first visit of a great foreign leader since the founding of the People’s Republic. During Nehru’s visit to China, a banquet was held at the Beijing Hotel with eight hundred Chinese officials. He made an exception to the rule that forbade drinking alcohol while tasting Maotai.
Thanks to the cooperation, efforts, and collaboration of Indian Prime Minister Nehru, China, together with Zhou Enlai, participated in the Bandung conference – the first and most significant international conference. War broke out between China and India in the 1960s. But that’s in the past. Friendship and cooperation between China and India are essential for seizing joint development opportunities. President Xi said: When China and India speak with one voice, the whole world will listen to them. If China and India work together, the entire world will pay attention. Now, Prime Minister Modi said that China and India are “two bodies, one mind.”
There are now three forces in the world that doubt China. Which is the first force? What does the United States think of China? Are you a friend or an enemy? There are questions about this. The second force is Africa. Dozens of African countries look at China and wonder what it means. Is China a developed country or a developing country? Is it a superpower? In China, we have always said that we are the largest developing country. When President Hu Jintao visited Nigeria and gave a speech in the Nigerian parliament, he meant that Nigeria is the largest developing country in Africa. China is the largest developing country in the world. When he said that, hundreds of Nigerian M.P.s said “No, no, no” in unison. What they mean is that China is not a developing country but a superpower. In the eyes of Africans, China is a superpower with endless wealth and money. The third force is India. What makes India suspicious of China? Is China’s development, China’s rise, a blessing, or a curse for India? China is highly developed, in the end, is it better to work with China, to bet on China’s rapid development in win-win cooperation in the field of wind turbines? Or should we each work on our own? Will it win or lose by following? She has doubts about the Silk Road.  
India is not welcoming for Chinese companies operating in India. I encountered these problems when I was Consul General in Mumbai. At that time, Huawei built the largest foreign research institute in Bangalore, called Huawei India Research Institute. At that time, it hired more than seven hundred top Indian engineers. What problem could not be solved? Dozens of Huawei China’s staff members cannot get work visas, only tourist visas, but the tourist visas will soon expire. This does not give a work visa. Huawei has an extensive research institute there. How can the company manage without its staff?  
Chinese companies have difficulties in opening the local market. Recently, Indians have boycotted Chinese products; dozens of Chinese software have also been banned.
To respond to domestic nationalism and populism, India has been playing the border card for years. Therefore, it is not uncommon for something to happen on the Indian border, and this problem is inseparable from the historical issues inherited from the British colonial legacy. The British government has left this situation behind. But I don’t think that China and India are heading towards a large-scale war. 

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27 October 2020

China : the three challenges of the exportation business

The repatriation of Indian orders to China mentioned in the last article should not hide the reality. The research bureau Trigger Trend recalls the three significant challenges facing exports, the rise of the yuan against the dollar, offshoring, and the structure of the Chinese economy too dependent on investment.

The rise of the yuan

With China’s economic recovery and the widening interest rate differential between the United States and China, the yuan against the U.S. dollar achieved its best quarterly performance in the past 12 years in the third quarter, with a high of 6.69 to the dollar, its highest level since April 2019.

renminbi and usd

After the national vacations, the foreign exchange markets began to bet on the possibility of a Biden victory, the yuan soared 1.4% in a single day, its largest one-day gain in 15 years. The central bank reacted by limiting risk measures-taking on futures contracts, to no avail.
Uncertainty over the short-term U.S. elections will also continue to fuel yuan’s volatility. The government wants to avoid the Japanese trap with the Plaza Agreement in 1985: a rapid appreciation of the yen against the dollar, which fueled the stock market bubble and the real estate bubble before it collapsed.
For Chinese exporters, the exchange rate hurt their profits. The more orders come in, the more fear there is of selling at a loss. The prices given when orders were placed did not include the exchange rate risk. Companies work on cycles of one to three months between order and payment on delivery.


Indian textile orders in part have been repatriated to China, but this is not the underlying trend, as the cell phone manufacturing industry is looking outward, especially to India. To attract foreign investment, the Indian government this year launched a $6.6 billion incentive program and a major $1.4 trillion infrastructure plan to turn India into a new production center for smartphones.
In early August, Apple moved six production lines from China to India and has now “relocated” eight factories from China to India. In July, India’s Ministry of Communication Technology announced that the iPhone 11 went into production at the Foxconn factory in Chennai. Foxconn planned to invest $1 billion to expand the plant to provide one-fifth of the Chinese factory’s iPhone production capacity.
Reports from the Guangxi region indicate that nine hundred Chinese technicians were crossing the Vietnamese border to take up their posts. The employers are companies with Chinese and Taiwanese capital, such as the famous Foxconn. Besides, several hundred workers who entered the country illegally were sent back to China. These kinds of events do not appear in the official Chinese media for the moment!
The deterioration of relations between the United States and China has reinforced American and European companies’ concerns about their excessive dependence on Chinese supply chains. The epidemic has only temporarily disrupted the global industrial chain’s adjustment, which had already begun before the health crisis.

The difficult structural transformation of the Chinese economy

China announced its GDP results for the third quarter. The good news is that the Chinese economy has gone green, with a 4.9% growth in the third quarter and 0.7% in the first three quarters.
But a closer look at the three main components of GDP shows that the economy is still dependent on the past model. In the first three quarters, consumption lagged behind investment and exports. Investment in assets increased by 0.8 percent year-on-year: manufacturing industry declined by 6.5 percent, infrastructure grew by 0.2 percent, and real estate development by 5.6 percent.
Total imports and exports grew by 0.7 percent, exports by 1.8 percent, but imports slipped by 0.6 percent.
Retail sales of consumer goods declined by 7.2% year-over-year.
China’s economic dependence on the real estate did not decline. These are the realities that the “dual-cycle” strategy must face.

Economist Liu Yuhui compares China’s economy to an overloaded truck on a downhill slope that is trying to be braked – 中国经济是踩着刹车下坡的超载重卡. The risks and challenges are even more significant, and it is essential to shift to a reallocation of resources and get out of the real estate “kidnapping.” The structure of the economy has to change; otherwise, everyone will suffer, even exports.

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24 October 2020

Lean on a mountain 靠山, essential in China!

The country’s second-largest real estate developer, China Evergrande of Shenzhen, is facing a debt, which could lead him to default. He had warned the government of Guangdong province as early as the end of August of the need to restructure his debt. Beyond an unsurprising event in China, what lessons can be drawn from this episode?

123 billion dollars of debt

At the end of June, the group had outstanding debt of 835.5 billion yuan ($123 billion). 130 is due for repayment at the end of January, equivalent to nearly all of its cash. The information came out at the end of September, causing the group’s shares to plunge, before rebounding by more than 45% since September 25, thanks to the support of its investors and the State.

china Evergrande crash share

靠山, Rely on a mountain

When a company is heavily indebted, investors are less concerned about the debt than about the company’s support at the political level. In Chinese, the expression leaning on the mountain is used, 靠山. If the company has the right support, debt is not a big problem. In other words, one wonders who the real investors are, whether they are influential “red” investors or red princes. If they are among the largest interest groups close to the central government, the party can go on. A group without support is nothing. On the other hand, you have to get the right “mountain.” Some companies could develop further if they had the proper support.

chinois 靠山 appui soutien s'appuyer sur la montagne chine

When we look at Evergrande’s prominent investors, we see the right color, like almost public companies, such as 山东高速集团, Shandong High Speed Group or a private company, 苏宁Suning, a Chinese Darty, with a lot of funds close to the State.

The debt machine

Each time a hanging occurs, a few measures are enacted to contain the debt frenzy better and, at the same time, occupy the gallery. Last month, the authorities delineated three red lines in terms of indebtedness.
China has been able to develop with the help of the debt machine. A Chinese economics professor explained the growth model to me in simple words: “To invest, if you use your own money, you walk. You borrow, you drive. You make mortgages, you fly. “It must be recognized that in recent years the authorities have avoided the slippage that was apparent at the beginning of the last decade and the situation has improved.
The real estate sector benefits from better credit from financial institutions than, for example, the manufacturing industry. Developers can pledge property as collateral, use a variety of leverage, and borrow more. Of the 50 largest players in the market, half of them have a more than 80% debt load than the leaders in most economic sectors.

Evergrande is also protected for its importance

Sales of the 100 largest developers fell slightly in the first half of the year, down 1.45%. Creativity, with online sales, helped limit the damage. Above all, it was the promotions with attractive prices that brought in money. Evergrande shows rising figures, but profitability declined and affected cash flow. The Vice-Minister, economist Liu He, about Evergrande, mentioned the famous stability factor. Indeed, the group employs 140,000 people, cooperates with 8400 companies in 229 cities on 7792 projects. Its bankruptcy could affect nearly three million employees. Beijing has, of course, every interest to support the Shenzhen company.

Laundry in progress

No one is fooled! Evergrand is only the tip of the iceberg. The economy has not been doing so well in recent years; the epidemic has only accentuated the difficulties. Part of the debts will not be honored. The sector is in front of a big clean-up. Huang Qifan, who serves as government spokesman on economic matters, had already warned at a conference in the summer of 2019 that two-thirds of the 97,000 companies in the real estate sector should disappear in the next ten years. There are far too many small companies, the market is too complicated. 15% control 85%, which means that more than 80,000 companies (85%) share 15% of the market. In times of declining government revenues, small and medium-sized companies cannot expect too much local governments’ help. Huang’s prediction shows that the government is well aware of the market’s stakes and prefers to leave the small ones for a bottled sector’s clean-up.

Do politics make the economy?

Colossal debts plague China. This is nothing new! At the governmental level, a company’s debt is not a problematic factor if the right support is present. Economics does not make politics; politics makes economics?
The most interesting for the government – at various levels – will survive while the economic logic should let the others perish?

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8 October 2020

Do you have a box for China?

Does China’s renaissance require greater state control of the economy? A look at the last decade shows progressive advances by the State in the private sector, as we have discussed here.


The most critical spoke of a new wave of nationalizations in the 1950s and the return of the “公私合营 Public-private partnership.”
In the face of the turmoil caused by the Sino-American trade war and the epidemic, the government asked the private sector for more patriotism, Xi Jinping himself on September 16, and a communiqué from the central government website. In exchange, these companies will have the full support of the State. The phenomenon is not new. The biggest private companies had to find help to develop. Until then, they played with the influence of the various clans. This time, the State is showing its ambition. It wants more unity.

Nothing new

To overcome ideological clichés, going back in history allows us to realize that the hand of the State over the private sector, described as the soft ” 公私合营 Public-private partnership,” is not new. The nationalist government of the Republic of China (1927-1949), inspired by Sun Yatsen’s ideas, had already shown such practices as early as 1935, and this is not a first in the country’s long history.

It is necessary to go back to the 7th century B. C. and find Guan Zhong 管仲. Prime Minister of the State of Qi during the Spring and Autumn period, a supporter of a powerful state and a strong army, he needed money to finance defense and military attacks. He recognized the importance of economic vitality, but he was suspicious of nobles and merchants. He excluded them from essential areas to create state monopolies, especially on natural resources such as salt and iron. The central government collected taxes itself and put the power of the time on a folding chair.
This move towards the private sector comes at a difficult time when the announced decoupling risks penalizing China on many fronts. Tightening the troops is essential.

A reaction to particular articles that forget to consider Chinese history. The current authoritarian State has not come out of the hat of the modern government. A robust Chinese state has always tried to “frame” the economy and its actors. Some Western reactions can sometimes be explained by the lack of knowledge about the country and the difficulty of putting China in a box. Some see it as socialist, others as capitalist. Some texts brandish the specter of dictatorship. Why put China in a box? Let’s describe and look instead of hiding our view with our ideas or an ideology that replaces yesteryear’s catechism!

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4 October 2020

What were President Xi Jinping’s intentions during his trip to Hunan?

Xi Jinping visited the Hunan Province on September 16. What are his true intentions? Beyond the apparent meaning and the official speech, what messages does the Chinese president send?

Half of the blanket

He visited the Yao minority village in Shazhou, its infrastructure, and the exhibition hall, “the warmth of half the blanket.” What is this legendary episode? On November 6, 1934, the weather was already cold. The Red Army was passing through the village. Xu Jiexiu’s family offered three women from the Army to sleep in the warmth of their house. The wife, Xu Jiexiu slept with the three communists and the husband outside on a table. The Xu were very poor and did not even have a blanket. The three soldiers decided to leave their only blanket to the family, but the Xu refused. They insisted and finally cut the blanket in half and offered one half. The story was repeated to show the goodness of the Party towards the people. The trip highlights this benevolent relationship between the government and the Xi, who met the Xu children.

Trip to Hunan Xi Jinping

Hunan, DNA – Xi, legitimacy

Of course, any move has other meanings. Analyst Wang Jian deciphers it. First of all, it is carried out in Hunan. Symbolically, it takes place in a province that evokes the Communist Party. Hunan is Mao Zedong’s native province. The other symbolic place, visited by the top leaders when they want to convey a message, is Jiangxi, home to the first revolutionary bases and the Chinese Soviet republic in the 1930s. Jiangxi evokes the development of the CCP and Hunan, the DNA.
Internal struggles often animate the CCP. Xi wants to remind that it has the legitimacy, even the DNA of the CCP. Former senior leaders like Chen Yun – one of the Party’s eight immortals – did not want to leave the Party’s leadership to just anyone. It must remain in the circle of the first generations. Xi is the son of a senior leader. He is one of the leaders of the second generation -红二代 (second generation red).

The People and the Party

Xi is close to the people and their origins. The village visited has just been lifted out of poverty; at the time of his last visit in 2016, there was 57% poverty. The official storytelling does not fail to underline this. Moreover, at the international level, under the pressure of the architects of the White House’s Chinese policy, American officials are increasingly making the distinction between the Chinese Communist Party and China for political purposes. This trip is a reminder that the government and the people are one. The reported words show a rather humble attitude (姿态), “I came here to learn,” recalling the speeches of a time when people were encouraged to learn from each other’s experiences.

Party support

In these challenging times, with international tensions and the economic consequences of the trade war and the epidemic, the president needs the support of the Party; he wants to unite the troops behind him. Travel in recent decades has sometimes been used to convey messages. Mao Zedong and Deng Xiaoping have used them. Xi Jinping is no exception. Alongside the usual propaganda discourse, it is worth remembering that while little is known about decision-making at the highest levels, the information that does come out indicates that unanimity is far from reigning and that every leader always needs to defend and strengthen his position.

Wang Jian deciphers this shift as follows: Xi Jinping wants to recall its legitimacy, the government’s proximity to the people, and rally the Party around it. In other words, how a legendary cover story is exploited!

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19 September 2020

Yuan exchange rate, what can China afford?

China does not have a floating exchange rate for its currency. Is this an isolated case? No, the majority of countries in the world have not adopted this system.

How is the rate of the yuan fixed?

The central bank determines it every morning at 9:15 am based mainly on two factors, the previous day’s closing rate and the fluctuations of a basket of currencies, including the dollar, which weighs 21.59%, the euro 17.40%, and the yen 11.16%. All currencies in the basket :

Exchange rate of the renminbi chinese currency

At 9:00 am, thirteen financial institutions quote prices, and the average rate is the rate set at 9:15 am. Transactions can start at 9:30 am with a maximum fluctuation of 2% up or down around this central rate. In August 2015, the authorities allowed the yuan to fluctuate, a fall of the currency, and a 15% drop of the Shanghai stock exchange in two days followed. Faced with the massive outflow of capital in 2016, the central bank in 2017 put in place mechanisms to avoid too strong movements, called “counter-cyclical regulatory factors 逆周期调节因子.”

More elasticity?

Part of the Chinese financial world wants more elasticity in the Chinese currency. For Sheng Songcheng, former director of the People’s Bank Statistics Bureau, it is not a good idea to move from a fluctuation margin of 2% to 3% or even 4%. 2% is already a significant movement. The economy and businesses need hope and stability. Such magnitudes are not going in the right direction.

China, an isolated case?

He reminds us that currency controls have always existed in various ways. The Japanese government intervenes when conditions require it. In 2003, to avoid the yen’s rise, the Bank of Japan bought $150 billion on the markets. During the European debt crisis, the Swiss currency soared. The Swiss National Bank acquired massive amounts of euros to curb the rise of its money. In September 2011, it even set a floor rate: “The current overvaluation of the Swiss franc is extreme. It poses a serious threat to the Swiss economy and carries the risk of deflationary developments. The Swiss National Bank (SNB) is therefore aiming for a substantial and lasting weakening of the franc. Today, it will no longer tolerate exchange rates below 1.20 francs to the euro on the foreign exchange market. »
Exchange controls similar to the Chinese system are exercised in many countries, and according to IMF data, 46.4% of countries in the world practice it, compared to 34.6% in 2009. Moreover, the National Bureau of Economic Research in Cambridge in the United States goes even further. Out of a sample of 196 countries, it estimates that 80 percent have a limited flexibility regime with inflexible exchange rates despite the excellent policy rhetoric.

Floating exchange rates, luxury

Of course, I’m not deaf. The Fox channel has been saying for at least 15 years that China is manipulating its currency, which many people repeat without really knowing the situation. A floating exchange rate and convertibility of its currency are considered a luxury in emerging countries. Indeed, China has moved beyond this stage, but it cannot yet afford such freedom. It may be the world’s second-largest economy, but 70% of its population has an income of less than 2,000 yuan per month, and structural problems are legion.
The few openings have shown capital outflows and fluctuations that disrupt the economy. The government’s objective is not to meet Washington’s requirements, but it must first protect the country from risks. Permitted fluctuations, indexed on a basket of currencies, with a central rate and a 2% fluctuation margin, is for the moment the only luxury Beijing can afford. However, the future is being prepared for with the progressive internationalization of the yuan and digital currency introduction. Convertibility and the floating rate are not yet on the list, even if they are debated. In five years, ten years? Greek Calends?

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17 november 2020


I have a friend who is in quarantine in a hotel 60 kilometers from Shanghai. On his plane from Paris, a person close to him has tested positive for COVID.For quarantine, we use the word isolation 隔离 ge lí.

covid isolation china geli

I had never thought about the origin of the first character 隔.
On the left, 阝fǔ, which is the key to the hill, the mountain, indicates the meaning and 鬲 ge the sound. When you live far from the mountains, you are far away from everything, isolated.

Other explanations think that the element on the right 鬲 ge also contributes to the meaning. Originally, 鬲 refers to a pot or earthenware cauldron or kettle for cooking food. The three legs are empty to make it easier to reheat liquids. They are relatively far apart. By extension, the sense of insulation has come. This last explanation does not entirely convince me, but I retain it.

chinese CHARACTER cauldron ge 鬲

The second character of 离 is the distant meaning of, leave, separate; it is also one of the eight trigrams of the Yijing. We will see it tomorrow.

Articles by character family :

Character 青

Radical arrow 矢

Radical child 子

Radical eye 目

Radical heart 心

Radical illness 疒

Radical knife 刀,刂

Radical 巳

17 september 2020

Hangzhou Paradox?

Hangzhou, the capital of Zhejiang province, seems to be the city with the wind in its sails. Launched in digital, it benefits from the Alibaba Group and Ant Financial. The municipality has put many measures to attract talent and aims to transform the Venice of the China into a city of the information economy and artificial intelligence. Among Chinese cities, Hangzhou attracts the most population. At first glance, the GAWC ranking, which examines cities according to their integration in the world, mainly economic criteria – finance, advertising, law, accounting, and management – is astonishing. It moves Hangzhou down from 75th place in 2019 to 90th in 2020, behind Chengdu (59th), Tianjin (77th), and Nanjing (87th). Zhengzhou moved up from 157th to 116th place. The research bureau Trigger Trend describes the reasons for this decline.

Low internationalization

Let’s take a look at the head offices of major companies: Beijing has 58 Fortune 500 companies. Shanghai is home to 653 regional headquarters of multinationals; it is the city with the largest number of foreign organizations in China. Shenzhen and Guangzhou have had policies to attract head offices for a long time. Starting in 2018, Chengdu, Xi’an, Chongqing, Qingdao, Wuhan, and Nanjing have also introduced such measures. Hangzhou only in June became active in this area. The decline in the rankings is mainly due to this delay.

Next to Shanghai, Hangzhou cannot be a transportation center.

Last year, Hangzhou Xiaoshan Airport was ranked 10th in China in terms of passenger flow, far behind not only Beijing-Shanghai-Canton-Shenzhen airport but also Chengdu, Chongqing, Kunming, and Xi’an airports. Since 2017, Hangzhou remains in 10th place without making any progress.
As for the high-speed rail network, Hangzhou is weak. In recent years, Xi’an, Zhengzhou, and Hefei have been at the heart of real railway nodes. From these cities, one can go in many directions, unlike Hangzhou. The Hongqiao station in Shanghai is a truly national center while Hangzhou has remained provincial. The road presents the same picture.  The influence of Shanghai erases that of Hangzhou.

Hangzhou digital city

Digital and…?

Last year, Hangzhou’s population growth was the highest in China (see the article here). In the first half of this year, Hangzhou’s total GDP surpassed Nanjing, Tianjin, and other cities, ranking in the national top 10 in the first six months of 2020.
Hangzhou’s asset, the digital economy, is booming. The added value of the digital economy accounts for 24.8% of GDP. Hangzhou is also preparing to become the “first city in the country for the digital economy.”The digital economy is a beautiful facade, but the real economy is still experiencing turbulence. Students in humanities or literary subjects are faced with a real desert. Those in the sciences, outside the Alibaba group, have little choice.
Apart from public companies and some real estate groups, few jobs offer to pay a real estate loan. Large companies do not abound, which limits the possibilities of evolution.

Real estate prices and inadequate infrastructure

Housing prices in Hangzhou are close to those of first-tier cities without having the same level of infrastructure. Public transportation is lagging far behind. This year, the operating mileage of Hangzhou’s subway reached 206 kilometers. In terms of operating mileage and subway density, Hangzhou cannot compete with Shenzhen, which has 383 km with an area eight times smaller. The city is slightly larger than Beijing, which has 699 km with few lines and low coverage.

Company size

The Alibaba Group is ranked first on Zhejiang’s top 100 companies in 2019, with a turnover of 376.844 billion yuan in 2019. Geely, a car manufacturer, in second place, has 328.521 billion yuan, and the famous Hikvision, 49.837 billion yuan.
As for Shenzhen: Huawei is ranked second on the list of Guangdong’s top 100 companies in 2019, with revenues of 721.2 billion yuan in 2018, almost double that of Alibaba. Tencent ranks 11th and also has 316.94 billion yuan.

Investment in research

Hangzhou’s R&D investment in 2018 was 46.4 billion yuan, placing it in 7th place, far behind its competitors, see table. They represented 3.43% of GDP. In comparison, Shenzhen was at 4.8% and Guangzhou at 2.63%.

After the industrial upgrade in the early years, Shenzhen has a very comprehensive smartphone manufacturing industry and a global production base for smartphones. Hangzhou, except for Ali, has not developed such an integrated base. Besides, Hangzhou’s investment in research in 2018 was 3.43% of GDP. In comparison, Shenzhen was at 4.8% and Guangzhou at 2.63%. Concerning these data, Hangzhou is, therefore, up to the task. Compared to the Beijing-Shanghai-Canton-Shenzhen group, the relatively low internationalization is not surprising. How can we play on an equal footing with the capital, the financial center, and two bridgeheads in the first decades of the country’s opening up and development? Shanghai’s proximity has its advantages, but it cannot compete with its neighbor as a transit point. The authorities are very aware of this and are working hard to capitalize on the Alibaba/Ant advantage.

Related articles :

Which cities attract the most people in China?

What type of Chinese cities has the best investment potential?

Cities are rich in China?

China, railway, the winners, the losers

Where are China’s universities concentrated?

Source : 悬了?世界排名剧烈下滑,暴露了杭州最大的短板

15 September 2020

What is corruption?

贪/貪 (traditional) tān, corrupt, greedy
It took me a long time to remember how to write 贪 . It took the so-called anti-corruption( campaign 反贪)of the new president Xi in 2013 to get the strokes into my brain. At the time, there was a lot of talk about it. I could have registered 贪 much earlier if I had known its origin.

贪 chinese character corruption

It is composed of 今 and 贝/貝. The first meaning of 今 was contained, keep in the mouth. It lost this meaning, 含 hán took it.
贝/貝 is the cowrie, which was used as a currency during antiquity. It represents money.
今 + 贝/貝 /contain, keep in the mouth + money = 贪/貪/corruption

This comment on 贪/貪 shows again the importance of knowing the origin of characters to better learn and understand modern characters.

Articles classified by type of characters:

Radical arrow 矢

Radical child 子

Radical eye 目

Radical heart 心

Radical illness 疒

Radical knife 刀,刂

Radical 巳

Character 青

13 September 2020

Decoupling Scenario

Bloomberg economists Tom Orlik and Bjorn van Roye have measured the impact of US-China decoupling. Journalist Wang Jian reacts to these estimates and recalls the Chinese response’s difficulties, the domestic cycle.

The decoupling scenario 脱钩 from economists

A complete decoupling could lead to a decline in growth to 3.5% in 2030, compared to a forecast of 4.5%, which considered the relationships unchanged.
Decoupling, synonymous with the end of trade and technology flows, which stimulate growth, will have a more substantial impact on China than on the United States because China benefits more from international trade and innovation. American growth should be slightly impacted. Economists expect 1.4% in 2030, compared to 1.6% previously.
In this scenario, China’s productivity growth will slow down, and capital spending will weaken as technology transfers come to a halt. The results will not be catastrophic because the country has sharply narrowed the technology gap with advanced economies over the last 20 years. Increased funding for research and development and stronger linkages with advanced economies could offset the effects of decoupling. On the other hand, the results could be more severe if the United States successfully brought its allies into decoupling, such as Korea, Japan, France, and Germany.

The importance of the 6% threshold

Wang Jian reminds that the passage of the growth under 6% will not make it possible to mitigate the country’s structural problems. The strong growth compensated for the shortcomings. With “low” relative growth, for example, the hole in social protection will not be sustainable; the government invested little in this area for various reasons: it preferred to put capital elsewhere and respond to other interests. Real estate bubbles and local debt will pose serious difficulties.

Domestic consumption

To rely on the domestic market to face the next few years is the age-old Chinese consumption problem.
When Prime Minister Li Keqiang recalled that 600 million people had an income of 1,000 yuan (140 USD) per month, he was basing his remarks on figures that showed that 70% of the population did not exceed 2,000 yuan per month. Under these conditions, consumption will not be the economic engine. Figures for the second quarter indicate that consumption is lagging behind and that investment, especially in infrastructure, has driven up growth.
Wang Jian estimates the parallel/grey economy (灰色经济) at 30%. Its importance differs by region. In general, the higher you go in the North, the more critical it is. It cannot have a significant weight in consumption.


The contribution to the growth of investment is + 156%, that of import-export is +16.6%, while consumption has a negative contribution of … 73%. This fall in consumption is, of course, linked to the epidemic. Will it be able to recover?
These investments have been fueled by the issuance of special bonds following the epidemic. Astronomical new debts have been created.

In recent years, the government had placed its hopes on the national market. It is normal; the consumption figures presented a better picture. In 2019, it positively contributed to the growth of 57.8%, much higher than investments at 31.2%. It will be necessary to reverse the trend so that the national market presents a robust counterpart to the decoupling. Is it possible? Not immediately!

Related articles:

Who are those 600 million low-income Chinese?

Incomes in China

Chinese economy: just the beginning!

Beijing, the high point of the two Assemblies

9 September 2020