GOOD MORNING FROM LONDON
04 SEPTEMBER 2024. CHINA POST #527
CHINA AND THE FOREIGN MEDIA
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A MOMENT IN HISTORY.
TODAY IN 1939
PRIME MINISTER CHAMBERLAIN IN A RADIO ADDRESS TO THE BRITISH PEOPLE
“AND I HAVE TO TELL YOU THAT NO SUCH UNDERTAKING HAS BEEN RECEIVED AND, THAT CONSEQUENTLY, THIS COUNTRY IS AT WAR WITH GERMANY”
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THREE TOPICS
FIRST, CORRUPTION IN CHINA’S FOOTBALL GAME.
SOUTH CHINA MORNING POST
SECOND, FORMER US PRESIDENTIAL CANDIDATE REJECTS ISOLATIONISM FOR US
SOUTH CHINA MORNING POST
THIRD, SENIOR CHINA ECONOMIST CALLS FOR INJECTION OF INFLATION
SOUTH CHINA MORNING POST
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#1 CHINA’S SOCCER OFFICALS SENTENCED OVER BRIBERY AND MATCH-FIXING SCANDAL
SOUTH CHINA MORNING POST
“Li Yuyi, a former vice-chairman of the Chinese Football Association (CFA), was sentenced to 11 years in prison, The Beijing News reported.
He was convicted of taking bribes worth over 12 million yuan (US$1.7 million) between 2004 and 2021, according to the Communist Party-backed paper.
In its verdict, an intermediate court in central China’s Hubei province said that that Li did favours for football clubs facing relegation, and also helped companies to secure construction projects during his leadership of Jinshan, the CFA, and the Chinese Super League Company – which handles commercial matters for the eponymous major professional football league.
A separate court in Hubei handed down a 11-year sentence to Fu Xiang, a former director of the sport’s administrative centre in provincial capital Wuhan and vice-chairman of the Wuhan Football Association.
Fu was guilty of embezzlement, taking and giving bribes, according to state news agency Xinhua. The court statement did not specify the time frame when the crimes were committed.
Li’s case dated back among the farthest in the long list of high-profile officials investigated and sentenced over the past year or so.
While the officials on the list belonged to a range of sports administrations – ranging from track and field and rowing to winter sports – the high-profile football sector has taken centre stage in the investigations, with allegations including bribery and match-fixing.
China airs 4-part anti-corruption series on prime-time TV amid renewed crackdown on graft
The most severe penalty thus far has been the life sentence handed down in March to Chen Xuyuan, who was CFA chairman from 2019 to 2021. The court said he had accepted bribes “in particularly large amounts” and “seriously damaging fair competition and order in the football sector”.
He was found guilty of taking bribes worth 81.03 million yuan between 2010 and 2023. This included his term as the president and chairman of Shanghai International Port Group (SIPG) from 2010 to 2019 before he took the helm at the CFA.
SIPG owns the football club that bears the same name and won the Chinese Super League in 2018.
At least three other senior national football officials received heavy court penalties for corruption this year, including former CFA executive deputy secretary general Chen Yongliang; former CFA vice-chairman and ex-president of the Chinese Athletics Association, Yu Hongchen; and former CFA Super League general manager Dong Zheng.
In another high-profile case, Li Tie, the former head coach of the men’s national football team and a former English Premier League player, is awaiting sentencing after pleading guilty in April to accepting more than US$10 million in bribes between 2017 and 2021.”
GRAHAM PERRY COMMENTS;-
The days of Hush-Hush are over. Now bad news makes the media and rightly so. China has to be accountable and people around the world have to have confidence that China is a two way street – good news and bad news.
Bad news is a fact of life. Corruption is a fact of life. Whilst Socialism believes it can attain higher levels of personal integrity, it is the case that the journey from immorality to morality is a long one – far longer than a few generations.
Societies carry the marks of their birth – good and bad – and as the journey of travel is undertaken so the marks reflect the changes in the society. China is trying to build a society with ‘a giving’ rather than ‘a taking’ character but it takes time for people to change societies’ norms especially when it is a society that embraces many of the daily practices of a capitalist society.
Some will say – “then jettison capitalism”. Cast it aside and bring in a socialist system. After all China is run by a Communist Party so why not practice the principles of Communism? China did flirt with an egalitarian society during the chaos of the Cultural Revolution but, unsurprisingly, it did not work. The economy stagnated; peoples hard work went unrewarded and the socialist principles of the revolution were tarnished. There is no mileage in achieving an equality of poverty, hardship and deprivation – the lot of many Chinese during the chaos of the years 1966-76.
Under the influence of Deng Hsiaoping China changed direction and embraced some of the previously discredited principles of capitalism. The priority was to improve the lot of the working people and Capitalism played its part in putting the people of China back on a path to an improved standard of living. But China is generations away from being the ‘finished article’ – at least one hundred years. And in the years in between China will be a mix of capitalism and socialism.
This approach recognises that lies, cheating and anti-social behaviour will continue to be a characteristic of life in China. It is not welcomed but it will be a part of life in China as the struggle between selfish instincts and selfless instincts continues to be played in many areas of life in China. Sport is such an example.
Cheats have prospered – whether it be drug-taking or match fixing or bribing the officials. The good news is that the authorities are acting and penalising – heavily – those in high places who have allowed corruption such as match fixing to flourish. Weaknesses in Sport have been rumoured during the last decade and supporters of an ethical society will be pleased that officials in high places are being exposed, arrested and punished. The campaign needs stamina. China cannot boast of a better society if corruption is permitted to flourish.
UK soccer supporters will note that the last mentioned Li Tie, who is awaiting sentence for accepting bribes in excess of $10m, used to play in the English Premier League for Everton FC. A long prison sentence is anticipated – and rightly so.
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#2 FORMER UN AMBASSADOR HAYLEY ISSUES ANTI-CHINA WARNIING
SOUTH CHINA MORNING POST
Nikki Haley, a former rival to Donald Trump for the US Republican presidential nomination, said on Saturday that isolationism was not healthy and that the Republican Party should stand with the country’s allies, especially in the face of China.
Speaking to reporters during a visit to Taiwan, Haley – Trump’s ambassador to the United Nations who then ran against him – said it was important to support Taiwan, Ukraine and Israel.
“I don’t think the isolationist approach is healthy. I think America can never sit in a bubble and think we won’t be affected,” she said.
Trump’s bid to return to the White House has sparked isolationist worries among US allies.
During her campaign, Haley called Trump unelectable and unfit for office, but last month she urged her supporters to vote for the former president. He faces the Democratic Party’s candidate, US Vice-President Kamala Harris, in the November 5 election.
Trump unnerved Taiwan in July, saying “Taiwan should pay us for defence” and that it had taken American semiconductor business. His remarks pummelled shares of top Taiwanese chip maker TSMC.
Beijing sees Taiwan as part of China to be reunited by force if necessary. The US, like most countries, does not recognise Taiwan as an independent state but is opposed to any attempt to take the self-governed island by force.
The United States is also Taiwan’s most important international backer and arms supplier. Despite lacking formal diplomatic ties, Washington is bound by law to provide the means for the island’s defence.
Republican presidential nominee Donald Trump has unnerved Taipei by saying that “Taiwan should pay us for defence”.
“What I want to see the Republican Party talk about is freedom, standing with our allies and making sure that we show strength around the world,” Haley said in Taipei.
“We don’t want to see Communist China win, we don’t want to see Russia win, we don’t want to see Iran or North Korea win.”
After meeting Taiwanese leader William Lai Ching and other senior officials, Haley said supporting Taiwan was an issue both Republicans and Democrats agreed on. She said Taiwan’s government did not ask her to pass on anything to Trump or his team.
Asked whether she would brief the Trump campaign about her Taiwan visit, Haley said she would “not necessarily meet with his team directly”, but would do television interviews, probably write an opinion piece and send messages to the US Congress and the Biden-Harris administration.
Taiwan received strong US support during the Trump administration, including visits by cabinet members and arms sales.”
GRAHAM PERRY COMMENTS;-
Can the US turn Isolationist? What is its world role if it turns its back on allies who fail to meet its budgetary demand?
The issue here is that the US cannot “Go Isolationist”. It cannot withdraw from NATO. It cannot review its commitments to Taiwan. The US cannot retreat to the US and leave the world to look after its own affairs. The US remains the world’s largest economic power. It still has a vast military machine. It has 800# bases distributed around the globe.
Trump may talk isolationism. He may unnerve the established allies with demands of an “Unless” approach – unless the individual countries contribute 3% of their military budget to NATO, the US will turn its back on the world and content itself with a policy of Looking After Number One.
It cannot be done. The US is inextricably linked to great power activity in the South China Sea; in supporting Ukraine; in working against the clock to prevent the Gaza crisis becoming a major conflagration.
Hayley is playing politics. She is looking four years ahead to the 2028 Presidential Election and her candidacy for President. She is experienced, ambitious and alert. She knows the US is and will remain a world power. She knows Isolationism is not an option. Does that maker her a force for peace? No. More a force for War. Why? Because she subscribes to the world view – shortly to be enunciated by the new UK Labour Government – that China, Russia, N Korea and Iran form a new Quartet of Evil that seeks to de-stabilise the Western Alliance, Japan, S Korea, Australia and New Zealand.
It is the coming analysis of world affairs. It is not convincing but there again NATO was built at the end of WW2 on the incorrect premise that “the Russians are coming”. The US, with help from Winston Churchill, deliberately mis-formulated the structure of world affairs after 1945 in order to place itself atop the Pyramid of Power. The USSR – all experts West and East now agree – was defensive in essence. There never was a threat that Stalin wanted to overrun Western Europe. In the same way the West will mis-formulate the present.
It is the US with its 800+ military bases that seeks to impose its will. China with just one overseas base in Djibouti and no Chinese military outside China has no international military presence or ambition. China will defend China and will assert itself in relation only to the fourteen countries with whom it shares borders. China will never yield on Taiwan or Hong Kong or India or the Philippines. That is the essential world difference. 800+ US bases v 1 Chinese base,
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#3 SENIOR CHINA ECONOMIST CALLS FOR INJECTION OF INFLATION
SOUTH CHINA MORNING POST
“China should increase the intensity of its macroeconomic policies and stick to an inflation goal of 2% to 3%, an adviser to the central bank has argued, echoing calls by experts for more stimulus to prop up demand. Huang Yiping, a member of the People’s Bank of China’s monetary policy committee, made a carefully worded assessment of the country’s economic policy with an appeal for a greater emphasis on spurring consumption. Public rebuttals against the government are usually avoided in the communist state.
“The economy is now easy to cool off but hard to heat up,” Huang said in a speech, delivered in May but only reported in the Chinese media this week. “If it really falls into the ‘low inflation trap,’ the consequences will be serious,” warned Huang, who is also dean of the National School of Development at Peking University. “Therefore, it is recommended that the consumer price index growth of 2% to 3% be clearly defined as a rigid policy target.”
Huang’s remarks emerged after the Chinese top leadership pledged earlier this week to boost consumption. Interest rates were recently lowered to ease the cost of borrowing by businesses and households, and the PBOC also reduced the rate at which it lends to financial institutions.
China sets goals for gross domestic product growth and inflation at its legislative conference known as the “two sessions” in March every year but officials do not take the inflation target seriously, according to Huang, who is a former member of the International Monetary Fund External Advisory Group on Surveillance.
This year, Beijing set an inflation target of “about 3%,” but annual CPI growth has remained below 1% since February 2023, fuelling concerns over deflationary pressure.
“Now I am a little worried about whether our prices can rise again after going down because we have a huge problem of overcapacity,” Huang said. “So we have insufficient demand, and exporting is not that easy either. [This] will bring our prices down to a very low level in the future.”
Some developed countries have accused China of flooding global markets with cheap products to cope with that industrial overcapacity. Several of China’s trading partners have fought back with countermeasures such as tariff increases, including the European Union and even in Southeast Asia.
Joining calls by other economists, Huang said China should adopt more fiscal measures to support consumption growth, such as allowing migrant workers to settle in cities and directly distributing money to households. This would signal a shift from the country’s traditional policy concept of focusing on investment and the industrial supply chain.
The economist also stressed the importance of raising market expectations. “Macroeconomic policies must be strong enough to make market participants believe that the economy will change direction,” Huang said.
He suggested that Beijing give full play to the role of sovereign credit. According to Huang, China’s central government debt accounts for 21% of GDP, which is among the lowest in the world, so he said that there is room for central government to help relieve some of the debt burden faced by local governments and companies in order to “stabilize market confidence and the economy.”
GRAHAM PERRY COMMENTS;-
These are testing times for China. The Property sector has done great damage to its economy and the cure is as painful as the illness. As this Column has stressed – things have gone wrong. Mistakes have been made and the consequences are considerable. But keep things in perspective – the Chinese state is not under challenge; the government continues to govern; the leading role of the Party is not under attack. But there will be consequences. Setbacks trigger questions; leaders are called to account; explanations are an absolute demand.
China will come through the crisis and, as is so often the case, the confidence that comes from beating back the demons reinforces the collective mood of resilience and bounce back. But the pain comes first and after the pain has passed and better times have been restored the focus will be on Why? What Went Wrong? Were the Billionaires to blame? Has the Party allowed too much opportunity to businessmen and women of zest, initiative and imagination. Should a Centralist model of economic development make a comeback? At the end of the day was Deng Hsiaoping correct when he said that it did not matter whether it was a white cat or a black cat that caught the mouse?
The analysis will be prolonged and intensive. It will also be conducted behind closed doors. China does not hold Public Enquiries. There will be no Covid-like wide ranging review including questioning of leading players such as we have witnessed recently in the UK. That is not the Chinese way. Maybe there should be more of a public element with leaders brought to public account. Maybe China would benefit if the investigations were public, in front of the television cameras with the public in attendance. And yet that is not the norm for China. Instead, away from the glare of cameras and pundits, China submits itself to intensive assessment and investigation. Heads will roll but more importantly the policy errors will be writ large in the discussions that take place within the Party and – eventually – among the people. China has uppermost in its mind the wide ranging failings of the ten years of the Cultural Revolution. How did things go so desperately wrong? China will be asking the same questions in relation to the property debacle.
The West is puzzled by China. Inspired by Deng Hsiaoping, China has been on the front foot. Living standards have risen; in the last full year before Covid 137m Chinese citizens filled the departure lounges of airlines all over the world. But no One Man One Vote (OMOV) ; No nationwide General Elections. No prime time tv interviews of leading members of the government; No Town Hall type political debate.
And in the absence of such events and procedures the conclusion – to the Western mind – is that the Chinese system will turn in on itself and in due course collapse and be replaced by OMOV. Washington/London et al hope for such an outcome. They cannot relax if the soon-to-be largest economy in the world is administered by a Party that draws inspiration from the writings of Marx and Engels more than from Adam Smith and Edmund Burke.
