December 7:
A loosely regulated category of assets known as an "investment receivable" is rampant across China allowing banks to make loans and set aside little or nothing for potential losses, the Wall Street Journal reports. The Bank of Nanjing, for instance, had $39 billion in investment receivables in the third quarter, nearly as large as its loan portfolio. As of June, 32 publicly-traded Chinese banks had a combined $2 trillion in investment receivables, up from $334 billion at the end of 2011. The investments are equivalent to 20% of the banks’ total loans in dollar terms, up from 6% at the end of 2011. "The rapid growth in banks’ off-balance-sheet and investment activities, in essence, means hidden credit risks and could threaten financial safety," said Shang Fulin, China’s top banking regulator. The investment receivables’ epidemic has created a parallel buildup of debt in addition to China’s rising official debt levels, now two-and-a-half times gross domestic product. About 16.5 trillion yuan was "missing" from the credit disclosed by China’s central bank in 2015, up from 4.9 trillion yuan in 2014. If these banks had to count their investment receivables as loans, they would need to raise $212 billion in capital.
President-elect Donald Trump has selected Terry Branstad, the long-serving Republican governor of Iowa, to serve as ambassador to China. Branstad’s personal friendship with President Xi Jinping dates back decades. "First of all, I would like to say that Mr. Branstad is an old friend of the Chinese people and we welcome him to play a greater role in promoting Sino-U.S. relations," said a Chinese spokesman. Last month, less than week after Trump’s victory, Branstad paid his seventh visit to China, meeting the country’s agriculture minister as well as officials from Iowa’s sister-state Hebei. Branstad first met Xi in 1985, when the Chinese president made his first trip to the U.S. as a young agriculture officer. In 2012, Branstad hosted an elaborate dinner at the Iowa Capitol for then-Vice President Xi, the Washington Post reports.
December 11:
The Central National Security Commission, a secretive commission chaired by President Xi Jinping, is poised to expand its role in state security, reports the South China Morning Post. The Communist Party’s Politburo endorsed a directive for a "comprehensive approach to national security," a phrase first introduced by Xi at the Commission’s first and only meeting in April 2014. The commission’s main task is to protect the nation’s sovereignty, security and developing interests, the Politburo said. Apart from Xi, the other known commission members are two vice-chairmen: Premier Li Keqiang and National People’s Congress chairman Zhang Dejiang. Cai Qi was head of its general office until he became acting mayor of Beijing. Official reports have yet to detail its structure or composition. The Politburo’s directive clears the way for the commission to begin managing state security.
December 12:
State Councilor Yang Jiechi, who outranks China's foreign minister, met Trump advisers, including National Security Adviser Gen. Michael Flynn, during a transit in New York on his way to Latin America, Channel NewsAsia reports. Although it's not clear when the meeting happened, Yang was scheduled to be in Mexico on December 11 and 12.
December 15:
China has shut down or "dealt with" thousands of websites for sharing "harmful" erotic or obscene content since April, the state's office for combating pornography and illegal publications announced. The office prosecuted or shut down 2,500 websites and more than 3 million "harmful" posts were deleted in 2016 to "purify" the internet in China and protect youth, Reuters reports. The government has been tightening its grip on the fast-growing live-streaming industry and worked alongside the Ministry of Public Security, the Ministry of Industry and Information Technology, and the Cyberspace Administration of China to target cloud storage, chat apps, and "vulgar" videos.
