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SCHWEIZER BOTSCHAFT IN BEIJING
EMBASSY OF SWITZERLAND IN BEIJING
AMBASSADE DE SUISSE EN CHINE

Der wöchentliche Presserückblick der Schweizer Botschaft in der VR China
The Weekly Press Review of the Swiss Embassy in the People's Republic of China
La revue de presse hebdomadaire de l'Ambassade de Suisse en RP de Chine
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  10-14.1.2022, No. 900  
    Archiv / Archives
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Foreign Policy

Syria joins BRI amid extensive China-Mideast exchanges (GT)
2022-01-13

Coronavirus: Zimbabwe says China to donate 10 million doses of vaccine in 2022 (SCMP)
2022-01-13

Latest China-India military talks show positive sign as both sides agree on efforts to maintain stability (GT)
2022-01-13

Nicaragua rides wave of China, reaffirming BRI (GT)
2022-01-12

China's diplomacy in Middle East, Indian Ocean, East Africa achieves fruitful results (China Daily)
2022-01-12

Visit of Saudi Arabian FM reflects high-level China-Saudi Arabia comprehensive strategic partnership: Wang Yi (GT)
2022-01-11

Beijing pledges support for Kazakhstan in ending unrest (China Daily)
2022-01-11

Xi says China ready to work with Malta to promote bilateral ties (Xinhua)
2022-01-11

Xi calls for sustained development of China-Belarus ties (Xinhua)
2022-01-10

China, Sri Lanka promise to boost ties, carrying forward spirit of Rubber-Rice Pact (Xinhua)
2022-01-10

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Domestic Policy

Policies lay foundation for realizing carbon goals (China Daily)
2022-01-14

Former Chinese security minister Sun Lijun charged with taking 'huge' bribes (SCMP)
2022-01-13

Xi's profound gift to human rights discourse (China Daily)
2022-01-13

Xi Jinping to his top leadership: 'no mercy' in fight against corruption (SCMP)
2022-01-12

14th Five-Year Plan outlines stronger online copyright protection (China Daily)
2022-01-12

Xi's Party school lecture highlights CPC's historical confidence (Xinhua)
2022-01-12

Omicron infections spread from Tianjin to Henan (GT)
2022-01-10

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Beijing

Beijing anti-COVID in action to ensure safety of city, Winter Games (GT)
2022-01-14

19,000 Winter Olympics volunteers begin to enter closed-loop system, ready to help athletes, guests (GT)
2022-01-12

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Shanghai

Shanghai's FDI hits record high in 2021 (Xinhua)
2022-01-12

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Guangdong

Guangdong predicts life expectancy to cross 79 by 2025 (China Daily)
2022-01-12

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Tibet

Tibet administers over 8 million COVID-19 vaccine doses (Xinhua)
2022-01-14

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Xinjiang

Chinese, overseas scholars condemn U.S. signing of "Uyghur Forced Labor Prevention Act" (Xinhua)
2022-01-13

Xinjiang ramping up construction, with most airports in China (GT)
2022-01-12

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Hongkong

Hong Kong national security law: first person jailed under legislation drops appeal against 9-year sentence (SCMP)
2022-01-13

HKSAR's 7th-term LegCo holds 1st meeting (Xinhua)
2022-01-13

HK Chief Executive attends first meeting of new LegCo, proposes to accelerate legislation of Article 23 (GT)
2022-01-12

Beijing sends former Xinjiang paramilitary chief to take command of Hong Kong garrison (SCMP)
2022-01-10

HK separatist Edward Leung reportedly to be released early next week; 'to receive more severe punishment if violates law again' (GT)
2022-01-10

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Taiwan

Inside Taiwan's brutal navy frogman boot camp as island trains marines for war (SCMP)
2022-01-14

Chinese mainland remains Taiwan Island's largest export destination in 2021 (GT)
2022-01-12

Taiwan seizes diplomatic moment to expand trade and investment talks (SCMP)
2022-01-11

China urges U.S. to stop playing "Taiwan card" (Xinhua)
2022-01-11

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Economy

China trade: strong performance in 2021, but signs of economic slowdown visible in December (SCMP)
2022-01-14

China FDI inflows hit record high in 2021 (Xinhua)
2022-01-13

China's Property Slump Pushes Real Estate Agencies to Remake Their Business (Caixin)
2022-01-13
No one in real estate saw 2021's problems coming. So says Wang Songyang, a veteran property agent in Shenzhen. 2021 started off well enough. Early in the year, he and some colleagues left the southern Chinese boomtown for the southwestern city of Chengdu, where they set up their own agency. By October, they had closed up shop. Their agency simply couldn't sustain itself in a market that had been hammered by the downturn being suffered nationwide. "In the second half of the year, nearly half of the agency branches in Chengdu either merged or closed down," he said. China's seemingly invincible real estate market went into a slump in the second half of 2021. In October, which used to be a high season, sales revenue for the country's top 100 property developers fell 24.9% year-on-year, according to figures from China Index Academy Ltd., a research outfit specializing in real estate. The next month, the decline widened to 28.3%. The sales slump has taken a toll on real estate agencies, long seen as a barometer for the overall health of China's real estate industry. Three listed companies behind some of the country's major real estate agencies — KE Holdings Inc., Fangdd Network Group Ltd. and 5I5J Holding Group Co. Ltd. — all reported weak third quarters. In cities once considered property "hotspots" such as Chengdu and the northwestern city of Xi'an, real estate transactions nosedived. "Properties in the suburban area or purely for investment are almost deserted right now," said a manager at a real estate agency in Xi'an. In 70 major cities tracked by the National Bureau of Statistics (NBS), second-hand home prices fell month-on-month in 64 of them in October, the most since October 2014, according to NBS figures. In a year marked by harsh regulations for the industry, the central government has lately signaled that more moderate policies could be on the way to help restore confidence in the market. However, industry experts also warned that the time when real estate served as a tool to stimulate China's economy is now effectively over. The official mantra "houses are for living in, not for speculation" looks like it is here to stay, and businesses in the sector need to adapt to the change if they want to survive. 2021 has been characterized as a year of heavy-handed regulation over China's real estate industry. In February, Shenzhen's local government released a set of guide prices for second-hand properties in a bid to cool the market. The move aimed to facilitate rational transactions by making information more transparent and agencies' listing prices more reasonable, the government said. Several other cities have since followed suit. Lenders were also under regulatory pressure to tighten mortgage approvals. In March, a vice minister of the Ministry of Housing and Urban‑Rural Development paid visits to Xi'an and Chengdu and specifically asked the two cities to properly manage their real estate markets. Both cities then published rules designed to curb property speculation, with Chengdu soon releasing its own guide prices for second-hand homes. It didn't take long for the change to have an impact. In October, the number of completed second-hand home transactions in Chengdu fell to slightly over 2,000, less than half of the number in March, according to government data. The situation was even worse in Hangzhou, the capital of East China's wealthy Zhejiang province and a popular city for property investment. The number of second-hand home transactions there tumbled from nearly 12,000 in March to fewer than 2,600 in October. Plunging transaction volume meant dwindling businesses for real estate agents. Wang said his branch in Chengdu completed only one deal in July, compared with about 10 in May. The manager at a Xi'an real estate agency said that the city used to have about 3,000 property agency branches, with approximately 43,000 agents working in the industry. Now roughly 15% of the branches have closed, with only about 30,000 agents left on staff. Such staff shrinking can be seen in the financial results of companies like KE Holdings and 5I5J. At the end of the third quarter, the number of registered real estate agents on KE Holdings' platform fell more than 6% from a quarter earlier to less than 516,000, according to the company's financial statement for the period. Fewer agents made fewer deals, which in turn led to falling revenue. KE Holdings reported the value of its second-hand home transactions plunged 34% year-on-year in the third quarter, dragging its quarterly net revenue down by 11.9%, according to the financial statement. The New York-listed company operates the ubiquitous residential real estate agency chain Lianjia. Nasdaq-listed Fangdd, which runs a major online real estate marketplace, didn't fare much better in the third quarter. It reported its net loss more than doubled from the previous quarter to 355 million yuan ($55.1 million) as its revenue nosedived 57.8%, according to the company's quarterly financial statement. Fangdd pinned its plummeting revenue on the poor market and the subsequent shrinking of its business. Earlier this month, the company received a delisting warning from Nasdaq due to its sinking share price that came as a result of the sharp losses. For Shenzhen-listed 5I5J, one of China's oldest real estate agencies, it reported its third-quarter net profit plunged more than 50% year-on-year. The company noted in its financial statement that demand had been feeble since the second quarter. Both Fangdd and KE Holdings had low forecasts for the fourth quarter, citing ominous market sentiment. Other parts of the industry have their own opinion about the prospects for the business. Sunac China Holdings Ltd., a leading real estate developer listed in Hong Kong, slashed its stake in KE Holdings, selling shares worth more than $1 billion from June to early December, a period in which KE Holdings' share price fell by more than 60%. The market for existing homes began to show signs of a recovery in November. In key markets such as Beijing, Shenzhen, Hangzhou, Chengdu and Xi'an, existing home sales were up from the previous month. One reason for the rebound, according to the Beike Research Institute, the research arm of KE Holdings, was a three-basis-point dip in the mortgage rate for second-hand homebuyers in 100 monitored cities. Although the second-hand home market is often seen as the best indicator of real market sentiment, many industry experts cautioned against hoping for a quick recovery. Real estate brokering has long been a cutthroat business in China, with competing companies often setting up branches next to one another in the ferocious fight for clients. Hu Jinghui, chief economist of the Jinghui Think Tank, a private research firm, reckons that overcapacity has always been a problem in the business and the current upheaval may end up doing some good for the industry. Hu used Beijing as an example to illustrate the industry's challenges. In the Chinese capital, 80,000 real estate agents close about 150,000 deals for existing home sales on average each year. That's fewer than two deals on average per agent — and that assumes all transactions involve agents. This amounts to a "very low" annual average income per agent, Hu said. As the market cools, real estate agencies have been forced to change how they do business. KE Holdings announced that since the third quarter, it has been pushing for more collaboration between its agents to improve efficiency, particularly between agents who specialize in new homes and those who focus on the second-hand market. In a bid to cut costs, some agencies have instituted hiring freezes for new graduates and suspended openings of new branches. Controlling costs has been the primary goal of Chinese real estate agencies since the second half of 2021, said Harry Lu, president of China operations at Century 21 Real Estate LLC, an American property agency franchise. Some cities are trying to change the model for how real estate agents do business. In November, Shenzhen launched a new version of its online contract-signing system for second-hand home transactions, which restricts agents to representing only one side of a deal. Under the current model in China, it is OK for a single agent to represent both the buyer and the seller. However, agents, whose commissions are tied to a property's sale price, often have an incentive to conspire with the seller to artificially boost the asking price. As a result, agents are typically seen as being in the seller's corner. The Shenzhen model, therefore, could be the future for the real estate agency business, some industry insiders told Caixin. By representing only one party in a transaction, an agent's job will be more like a lawyer's — working to protect the client's interests to the greatest possible extent. However, some experts cautioned that the Shenzhen system remains immature. Li Yujia, chief researcher at the Housing Policy Research Center of Guangdong Province, pointed out that the Shenzhen system only applies to second-hand homes. Meanwhile, it's still possible for two agents who work for the same real estate agency to be on opposite sides of a deal, which creates a conflict of interest. Yang Xianling, founder of Kongbaidata, an information platform specializing in real estate, also holds the view that China's property market has not matured to a point that allowing agents to represent only one side of a deal would work out very well in practice. On the other hand, however, Yang believes that the Shenzhen model is worth trying as a way to stabilize housing prices and as a learning opportunity to see if there are better ways to overhaul the business.

China's inflation tame in 2021 amid stable economy (Xinhua)
2022-01-12

Boao Forum to be held in the spring, focusing on regional economy (GT)
2022-01-12

China's population crisis can be solved only by printing trillions of yuan to boost birth rate, prominent economist claims (SCMP)
2022-01-11

China's 2022 tourism to recover to 70% of pre-pandemic level (GT)
2022-01-10

Winter Olympics spurs foreign sports brands' investments in China (Xinhua)
2022-01-10

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DPRK

N.Korea reports new hypersonic missile test; US, Japan hypes move (GT)
2022-01-13

North Korea fires missile towards Japan, hot on heels of 'hypersonic' projectile test (SCMP/Reuters)
2022-01-11

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Mongolia

Today marks 30th anniversary of the adoption of democratic Constitution of Mongolia (Montsame)
2022-01-13

PM orders decision on 3-day mandatory isolation to be nullified (Montsame)
2022-01-12

Views exchanged on operations of Mongolia-China border checkpoints (Montsame)
2022-01-10

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Embassy of Switzerland
 

The Press review is a random selection of political and social related news gathered from various media and news services located in the PRC, edited or translated by the Embassy of Switzerland in Beijing and distributed among Swiss Government Offices. The Embassy does not accept responsibility for accuracy of quotes or truthfulness of content. Additionally the contents of the selected news mustn't correspond to the opinion of the Embassy.
 
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