Another year is coming to an end, the fourth since we founded Dongsheng and started publishing News on China. We want to thank you for your support, your attentive reading, your criticisms, and comments. This year we surpassed 100,000 followers on all platforms where we provide content in Spanish, English, and Portuguese. As usual, we close the year with a retrospective of the most important events for China. Next week, we will also publish a video summary of China’s 2023. Finally, for some extra reading to take you into the new year, we launched our fourth and last issue of the year of Wenhua Zongheng, “Chinese Perspectives on Twenty-First Century Socialism”. We hope you enjoy it.
Thanks for continuing to grow with us. We wish you a very happy and healthy end of 2023!
– Dongsheng Editorial Collective
The opening of the Chinese borders to the world in the second week of January this year – after three years of the pandemic and restrictions on the entry of foreigners into the country – made it possible to resume an intense Beijing diplomatic agenda, increasingly dedicated to strengthening its ties in the Global South. China played an important role in the historic expansion of the BRICS, realized in August in South Africa. In March, Beijing mediated the agreement to resume diplomatic relations – broken seven years ago – between Saudi Arabia and Iran, which opened the doors for Riyadh and Tehran to join the BRICS11.
Musaad al-Aiban, Saudi Minister of State; Wang Yi, China’s top foreign policy official; and Ali Shamkhani, Secretary of the National Security Council of Iran [Ministry of Foreign Affairs of the People’s Republic of China]
In October, Beijing organized the 3rd Forum of the Belt and Road Initiative (BRI) – with the participation of 151 countries – and celebrated 10 years of its principal foreign policy, which has already mobilized around 1 trillion dollars in hundreds of projects, mainly infrastructural, around the world.
The strategic relationship between China and Russia deepened in 2023, with two meetings between their presidents. In March in Moscow, Vladimir Putin said that the relationship between the two countries is at the highest level in their history, while Xi Jinping said that they are leading changes unprecedented in a hundred years. Trade between Russia and China hit a record high this year, reaching US$218 billion in November, up 26.7% year-on-year. 95% of their bilateral trade is now in rubles and yuan, taking another step towards to de-dollarization between their countries.
Xi Jinping and Vladimir Putin at the Kremlin [TASS]
In fact, China has made progress in internationalizing the yuan and creating alternatives to using the dollar. For the first time in history, most of China’s foreign trade (49%) was carried out in yuan. The country signed an agreement with Brazil to conduct trade and investments in local currencies, and now has similar agreements with more than 20 countries. Beijing also carried out currency swaps with Argentina, which paid installments of its debt to the IMF in yuan, something unprecedented in the fund’s history. China reached an agreement to buy oil from Iraq – its third largest supplier – in yuan, and made the first purchase of this strategic commodity in digital yuan. However, the yuan’s share of world trade is still low, having reached less than 4% between January and September.
Xi Jinping and Joe Biden with their government teams [Xinhua/Rao Aimin]
Tensions between China and the US increased over the course of the year, mainly due to Washington’s ambiguous policy towards Taiwan and the progress of sanctions aimed at blocking China’s access to state-of-the-art semiconductors. Even so, China’s Huawei surprised the world (more on this later). The meeting between Xi and Biden in November served to minimize tensions somewhat, resuming dialogue between their defense ministers and cooperation in the fight against global warming, but the year ended with controversial statements by US Commerce Secretary Gina Raimondo. She said that “China is not our friend” and represents “the greatest threat we’ve ever had”. She told the CEOs of US chip companies – whose profits are expected to fall as a result of the White House sanctions – to conform, because national security is more important than their short-term profits.
Finally, in the face of the genocide of the Palestinian people, China has strongly condemned Israel’s actions and insisted on a ceasefire and an international conference to agree on the right of the Palestinian people to have their state.
The year began with the relaxation of COVID-19 restrictions, which had seen a spike of cases and related deaths. From Chinese New Year onwards, cases fell, restrictions eased, and there was a return to normalcy for the rest of the year.
A community health center in Shanghai, 04.01.2023 [Xinhua]
With temperatures dropping this winter, China saw an increase in pre-pandemic levels of respiratory diseases among children. Despite speculations and fake news circulating in Western media about a new virus outbreak, no new pathogens were detected, pointing instead to an “immunization gap” due to lowered exposure during the Covid–19 pandemic years.
A major theme of domestic policy continued to be the country’s anti-corruption campaign, which made efforts to take the campaign to a “deeper level” by zoning in on major arenas such as defense, health, and sport.
In the first ten months of 2023, 115,000 CPC cadres were investigated with 80,000 disciplined for violating anti-extravagance measures. A record 41 senior CPC cadres were arrested in graft probes, including retirees, ministerial, and state-owned enterprise-level positions, such as the former vice president of the China Development Bank. Over four million regional-level CPC cadres and 533 at the vice-ministerial level and above have been investigated since its launch, following Xi’s election as CPC General Secretary in 2012.
Amid increased US sanctions, meeting internal demands and establishing self-reliance were key priorities. To stimulate economic growth, greater efforts were made to integrate university graduates into the workforce and to address rising urban youth unemployment; plans are to increase the hiring of civil servants by 16%.
Another major focus has been the development of the western and northeastern regions of China. The northeast, a region that had suffered deindustrialization during the reform period, has received renewed attention. With a 5.3% increase in GDP between Q1–Q3 2023 (year-on-year) – higher than the national GDP of 5.2% – Liaoning Province will be at the center of building a modern industrial system to boost self-sufficiency, as the US continues its attempts to block China from participating in the hi-tech global supply chain.
Cotton harvest in Xinjiang, 12.10.2023 [Xinhua]
Xinjiang Uygur Autonomous Region’s foreign trade rose by 51.25% year-on-year to reach 219 billion yuan (US$30 billion) between Q1-Q3 2023 and trade with five Central Asian nations grew by 59.1% to hit 176.64 billion yuan. A Free Trade Zone planned for the region aims for export-oriented, labor-intensive industry chains from the east of China to migrate west and extend the industrial reach to China’s coastal areas.
To address the real estate market crisis that has been going on for several years, in 2023 the government initiated a pilot program to boost private investment in the sector and help developers reduce debt, leverage ratios, and recover liquidity. The People’s Bank of China announced the extension of a special loan program for real estate companies, which allows them access to 200 billion yuan (US$28 billion) at almost zero cost. Lastly, the government relaxed the mortgage policy and expanded tax incentives for real estate developers to stimulate the housing market.
The number of billionaires in China has fallen for the second consecutive year: there are 224 individuals (15%) less than two years ago when it was at its peak. Total wealth fell 4% to US$3.2 trillion with almost 500 people dropping off the list in the last two years. However, China remains the country with the most dollar billionaires in the world (895).
If you want to know more about the Chinese real estate market, you can read our Dongsheng Explains on the subject.
China’s GDP reached 91.3 trillion yuan (US$12.48 trillion) in the third quarter, growing by 5.2% in 2023, above the target of 5%. But amid the world’s economic slowdown and geopolitical tensions, China’s foreign trade has been affected: in the first 11 months of 2023, the exports contracted by 5.2%, while imports dropped by 6%. Decreasing trade with the U.S., EU, Japan, and major trading partners in Southeast Asia contributed to the drop.
Applicants to work in the civilian sector after completing an examination in Zhenjiang [VCG]
Over the year, the government promoted measures to stimulate the economic activity:
– The provincial governments planned to increase annual hiring of civil servants by 16% (totaling 192,000 positions) focusing on young people, while urban youth unemployment has reached an all-time high in 2023 (19.9% in July).
– The Central Bank transferred 1.13 trillion yuan (US$162 billion) in profits to the Ministry of Finance to increase fiscal spending, reduced the compulsory deposit to 7.6% to inject 500 billion yuan (US$72.6 billion) in liquidity into the market, and cut key loan rates to spur investment and consumption.
– Investments by public companies reached 1.7 trillion yuan (US$234 billion) in the first half of the year, an increase of 12.5% over the previous year. China’s rail investment reached its highest level since 2013 in the first quarter, 113.55 billion yuan (US$16.5 billion).
– In its first budget revision since 2008, the government approved 1 trillion yuan (US$139 billion) in new bonds and increased its deficit from 3% to 3.8% of GDP.
Great Wall full of tourists, 02.10.2023 [VCG]
Agriculture and Environment
Over 60% of all the 146 million tonnes of China’s imported food were soybeans, mainly from the US and, in recent years, Brazil, given the deteriorating China-US relationship. To address this pressing issue and prioritize food security as outlined in this year’s No.1 central document, a momentous step has been taken in the legalization of genetically modified (GM) crops. After conducting meticulous preparations and strict evaluations spanning several years, on February 21, 2023, China’s Ministry of Agriculture and Rural Affairs pledged to expand the pilot projects for the industrialization of GM corn and soybeans. Subsequently, on October 17, an approval was granted, allowing the cultivation of 37 GM corn varieties and 14 GM soybean varieties in designated areas beginning on November 15. By embracing genetically modified crops, the nation aims to enhance domestic production capabilities and mitigate the risks associated with an overreliance on foreign food sources.
Floods caused by typhoon Doksuri in Fuzhou, 29.07.2023 [VCG]
Climate change continues to wreak havoc on China. This summer, Northern China recorded its heaviest rainfall in 70 years. Torrential rain brought on by two successive typhoons intensified concerns over China’s food security amidst export restrictions imposed by other nations, which have led to a surge in global food prices. Farmers in the country’s primary grain producing region struggle to save crops affected by the floods. Typhoon Doksuri hit the provinces of Heilongjiang, Jilin, and Liaoning, known as the breadbasket of China, responsible for more than 1/5 of the country’s grain production.
Despite remaining the largest consumer of coal, China positioned itself as the largest producer of renewable energy for yet another year. In 2023, China built as much new solar capacity as the total installed capacity in the US.
The country controls more than 80% of the global solar panel supply chain and can manufacture more than twice the annual global demand.
By 2023, installed battery storage capacity exceeded the total added in the last decade. With the announcement or start-up of solar and wind power construction, China will exceed clean energy targets five years ahead of schedule. China’s carbon dioxide emissions are expected to decline next year as a result of record growth in new energy sources.
Solar power plant built on a fish farm in Anhui, 29.03.2023 [VCG]
Science and Technology
Undoubtedly, China’s great technological accomplishment in 2023 was achieving the domestic manufacture of the 7 nanometer microchip. Huawei surprised the world with its new Mate 60 Pro cell phone. Without announcing it, the Chinese company used a 7nm chip manufactured by its subsidiary HiSilicon with technology from SMIC, also Chinese. While still lagging behind the most advanced 3nm microprocessors, China achieved this goal in just 5 years. State support was key to offset the high production costs resulting from US sanctions. In the last year, Huawei received more than 6.5 billion yuan (US$948 million), while SMIC received about 6.8 billion yuan in the last three years.
Mate 60 Pro has 47% of the value of its components made in China [Huawei]
The phone marked Huawei’s return to the 5G smartphone market, which this year also launched 5.5G or 5G Advanced. It is 10 times faster than traditional 5G, which is already widely distributed across China. On the other hand, Chinese scientists achieved the first wireless transmission using 6G technology, although it is still far from being applied in cell phones.
China officially announced its plan to reach the Moon in 2030 and would be the second country to do so, after the last U.S. lunar landing in 1972. The Chinese space agency is collaborating with Russia to build a joint lunar base in the mid-2030s. For that, some Chinese researchers propose to make bricks with lunar soil using a robot, 3D printers, and lasers, although it could take 20 to 30 years and there are multiple challenges such as low gravity, lunar earthquakes, strong cosmic radiation, and lack of water. But just this year, Chinese scientists discovered a reservoir of water on the Moon inside glass spheres generated by the solar wind. In 2025, the Chang’e 6 mission will be the first in history to collect samples from the dark side of the Moon.
With the new CR450 train, the trip between Beijing and Shanghai will take two hours less [VCG]
China Railway completed testing of the new CR450 high-speed train, reaching 453 km/h, making it the fastest in the world. Bullet trains already installed in China currently reach 350 km/h.
Finally, this year China went from being a buyer to a producer of high-end steel sheets. In less than a decade, it was able to develop the product that has come to cost as much per gram as gold.
People’s Life and Culture
According to the Ipsos global happiness survey of 2023, China claimed the top spot with 91 percent of the Chinese respondents expressing overall happiness, with 83 percent expressing satisfaction with the social and political landscape, while dipping to 78 percent regarding the economic situation. Notably, the survey unveiled that Chinese individuals attribute their happiness primarily to the presence of friends and children in their lives.
Closing Ceremony of the Asian Games in Hangzhou [19th Asian Games]
2023 was a year of sports, from the international stage to the grassroots level. After a one-year delay due to COVID-19, the Asian Games were inaugurated in Hangzhou with 80,000 spectators. The 19th edition of the games featured 12,500 athletes from 45 countries and territories competing in 42 sports, including original Asian sports such as Kabaddi, Sepak Takraw, and Wǔshù, and new areas, such as breakdancing. More than 3 million tickets were sold, generating more than 600 million yuan (US$ 85 million) in sales. 15 world records, 37 Asian records, and 170 Asian Games records were established , with China topping the gold medal tally with 200 medals.
Grassroots sports competitions also garnered popularity nationwide. In small villages in Guizhou Province, southwest China, the Village Basketball Association and Village Super League, also known as Cun Chao, attracted hundreds of thousands of tourists and millions of online viewers. The tourism industry of the hosting village Rongjiang generated revenue exceeding 2.8 billion yuan while its hotel and lodging industry saw a year-on-year increase of 172.6 percent. The counties in Guizhou are leading innovative approaches to rural revitalization by combining China’s comprehensive physical and digital infrastructure with unique rural traditions, culture, and ethnic diversity.
This year, surveys revealed that more than 200 million Chinese are self-employed. According to data, in 2021, 16% of recent graduates – which in 2022 will reach a record 10.76 million – began to work independently.
A rural basketball game in the village of Taipan [Jimu News]
Despite substantial government initiatives, China continues to grapple with demographic challenges. For the first time in 60 years, China’s population decreased to 1.411 billion in 2022, and was surpassed by India. Over the past three decades, the national average age for a first marriage increased approximately 6 years reaching 28.67 in 2020, with the pursuit of education being the main reason for delaying marriage. With a drop of 9.98% in births and a growth rate of -0.6 per thousand people, the country has 850,000 fewer inhabitants due to cultural changes, the higher costs of raising children, and an economic slowdown. However, some analysts show that the falling birthrate together with rising youth unemployment could also be explained by increasing university enrollment and years of study amongst young people. With consumption picking up, demand for labor is increasing while recruitment difficulties persist, especially in the manufacturing sector, as migrant workers prefer to work in their hometowns and young people avoid low-wage, labor-intensive jobs.
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