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China Reform Monitor - No. 1232

China witnesses major capital outflows;
Head of Cyberspace Administration unexpectedly replaced

Edited by Joshua Eisenman
July 21, 2016

June 25:

A new study using SAR radar technology, which monitors changes in land elevation, has found that 46 cities across China are sinking into the ground. Over the last decade Beijing has sunk 14 inches and it continues to sink at a rate of nearly 11 cm per year. The construction of buildings, roads, and other infrastructure, which have increased the weight on the ground, coupled with excessive pumping of groundwater in thirsty urban areas with rising populations are the primary sources of the problem. In 2015, Beijing began building a network of tunnels and canals to ease up the strain on underground aquifers. Shanghai has switched from ground water to river water thus slowing its subsidence from about four inches per year in the 1950s and 1960s to 2/5 of an inch per year today, 
the Christian Science Monitor reports.

July 1:

The head of China’s Cyberspace Administration, Lu Wei, has unexpectedly stepped down and been replaced by his deputy, Xu Lin. It remains unclear what prompted the change; whether Lu fell out of favor or will be promoted. Lu led the charge to boost China's internet censorship program dubbed the Great Firewall. Yet, he has also been criticized for meeting with U.S. companies including Facebook and Apple. The reshuffle is unlikely to alter the ambiguously-worded cybersecurity law expected to be adopted later this year, which will increase regulatory uncertainty for foreign companies. China's government censors unsavory information and blocks access to foreign media and social networking sites, including Facebook, Snapchat, Twitter and Instagram. In recent months, a Disney video streaming service and Apple's digital movie and book offerings have also been taken offline, CNN reports

July 2:

Two Chinese citizens and a policeman were injured in violent clashes between police in Prato, Italy and the local Chinese community. The conflict started when Italian health officials, who stepped up checks after seven people died in a fire at a garment workshop in 2013, were inspecting a factory. The owner reacted angrily when the inspector raised safety violations, shoved him and the police who were accompanying him. Chinese workers then barricaded themselves inside the factory while hundreds gathered outside, throwing stones and bottles at the police, who dispersed the crowd using truncheons and shields, and arrested the factory owner, The Guardian reports
. Tensions had been rising among the town’s 50,000 Chinese immigrants, who make clothes and handbags with the “Made in Italy” label. Some of the firms use illegal migrant labor, ignore safety rules, evade taxes and illicitly smuggle money out of Italy. “The situation is unacceptable. We need the Chinese community to respect the law and integrate, we cannot have 'free zones’. We will keep up inspections to clean up this immense production system,” said regional president Enrico Rossi. 

July 4:


Capital outflows from China are causing a rapid decline in the country's foreign exchange reserves, CNBC reports. China's foreign exchange reserves fell to $3.19 trillion in May, the lowest since December 2011, down $27.9 billion from the previous month and the largest monthly drop since February. China reserves fell by $513 billion in 2015, with $420 billion of that in the last six months of the year. Goldman Sachs estimated that net capital outflows from China in the first quarter of 2016 were $123 billion, with about 70 percent of the outflows due to Chinese residents buying foreign assets and the remainder due to repayment of foreign-exchange liabilities.

July 7:

To scan the heavens for signs of intelligent alien life (among other things), China has built the world's biggest radio telescope, the 1,650-foot-wide Aperture Spherical Telescope's (FAST) dish. Project team members will spend the next two to three years testing FAST and will make it available to researchers when that phase is over. With a dish the size of 30 football fields, FAST is the largest single-aperture telescope in the world. The 1.2-billion-yuan ($180 million) facility should help scientists learn more about the universe's early days, detect low-frequency gravitational waves and hunt for signals that may have been produced by distant alien civilizations. "FAST's potential to discover an alien civilization will be 5 to 10 times that of current equipment, as it can see farther and darker planets," added Peng Bo, of the Chinese Academy of Sciences, which built FAST. By the end of September, the Chinese government will resettle over 9,100 people living within 3 miles of the telescope, Scientifc American reports.

Related Categories: China; China and East Asia Program

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