SinoInsight 1
According to People’s Bank of China data released on Aug. 20, credit card overdue loans for H1 2018 total 75.667 billion yuan (about $11 billion), or about 1.21 percent of credit card receivables. In other words, overdue loans have doubled over the same period in 2014 and gone up nearly ten times since 2010.
A 2018 report on China’s pension outlook by Ant Financial and Fidelity International notes that the average monthly savings of young people between ages 18 and 34 that were surveyed was only 1,339 yuan. Also, 56 percent of the young people surveyed admitted that they have not begun to save for their old age.
Recently, English and Chinese language media have written about how China’s millennials are increasingly turning to credit cards and P2P platforms to finance their spending habits.
OUR TAKE
The above phenomenon hints at China’s bleak economic prospects. The willingness of younger Chinese to take loans and live on credit is only part of the problem. Sky-high rental prices and the Chinese Communist Party’s (CCP) one-child policy are compounding problems for millennials. In the coming decades, more than half of millennials may find themselves without the financial means to support the elderly and provide for themselves in their old age.
The CCP might be thinking of scrapping child limits entirely, but as the economy worsens, young couples would become less inclined to have children. And when the country’s population declines, the economy would inevitably contract in the future.
SinoInsight 2
Senior CCP propaganda leaders gathered in Beijing for a National Conference on Propaganda and Ideological Work from Aug. 21 to Aug. 22. Xi Jinping gave a keynote speech where he emphasized the importance of propaganda work under the “new era.” Wang Huning, the Politburo Standing Committee member overseeing propaganda work, chaired the conference.
On Aug. 21, the State Council announced the appointment of Zhuang Rongwen to head of the Cyberspace Administration of China and deputy director of the State Council Information Office. Xu Lin, the former head of the cyberspace agency, was appointed director of the State Council Information Office.
OUR TAKE
1. We believe that the propaganda conference and personnel movement indicate that Xi Jinping is beginning to gain control over the CCP propaganda apparatus. Wang Huning might have been targeted by Xi’s political rivals in recent weeks, but his recent appearances suggest that his political position is secure. Moreover, Wang has always been low-key before joining the Politburo Standing Committee, and is likely continuing his quiet approach to work.
2. Per our earlier analyses, the CCP propaganda apparatus was in the hands of the Jiang Zemin faction during Xi Jinping’s first term. Xi has sought to bring the propaganda apparatus under his sway, and took steps during his second term (appointing allies to key posts and purging Jiang associates) to seize the Party’s “pen.” The Sino-U.S. trade war may have caused the CCP to lose control over the propaganda narrative, but the negative outcome does not seem to have impacted Xi’s purge of the propaganda apparatus.
3. Zhuang Rongwen and Xu Lin appear to be officials whom Xi trusts. Zhuang is a technocrat and Xi’s former colleague in Fujian. Xu hails from Shanghai, and was installed in important propaganda posts after Xi took office.
4. Xi Jinping has reshuffled key leadership positions in the Propaganda Department, the State Council Information Office, and the Cyberspace Administration of China at least once since coming to office in 2012. Of the newly reshuffled officials, only Jiang Jianguo, who was replaced by Xu Lin at the State Council Information Office, is a Jiang faction associate.
