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After the party back to the reality of the Party

China has come out of the festive mood of celebrating the Wood Dragon Years arrival. The Lantern Festival that marks the end of Spring Festival and is celebrated with lanterns displays, happened last weekend. Unfortunately in many places in China the traditional stroll to look at the lanterns was interrupted by bad weather, with snow in the North and Northwest, heavy smog in Central China and rain in the South. Domestic tourism saw a new record in spending, even though the spending per trip declined. Outbound tourism reached almost 60% of the 2019 level.

Coming back to normal also meant facing the harsh economic realities of current China. The Real Estate crisis is going on, causing the stockmarket in Shanghai to lose almost 2 percent in a single trading day today. The Hang-Seng-Index in Hong Kong SAR almost went south by 1.4 percent. 

The Albatros around the neck of Chinese stocks turned out to be Country Garden, losing 12 percent after it became known that a creditor filed for liquidation of the company, after Country Garden failed to pay back 205 million USD in time.

A lawsuit brought in Hong Kong by Ding Yumei, the ex-wife of Hui Ka-yan, the founder of the even bigger defaulting real estate company, China Evergrande, against her own son, named Xu Tenghe, for an unpaid loan of about 130 million USD is another colourful episode in this saga. Analysts are pointing out that this might after all be an attempt by family members of Hui to move their money to prevent it from being confiscated.

Ding is asking her son for the money, however, the lawsuit might help Xu to transfer some of his assets and prevent them from being seized. Xu’s and his father’s assets could be confiscated by courts in mainland China as the two are currently under investigation and in custody. There may actually be financial disputes existing within the family. At the same time a lawsuit could also be used as a method to avoid paying creditors.

Ding and her son’s loan agreement was signed in June 2020, at a time when China Evergrande was still raising capital to fund expansion.

In the political sphere the wave of dismissals and resignations continues ahead of the ‘two sessions’ meeting. Feng Jiehong, chairman of CASIC-affiliated aerospace group, joins former foreign minister Qin Gang in resignation. No reasons were given for the departures, which follow the recent dismissals of a number of defence-related National People’s Congress (NPC) deputies.

The latest departures from the NPC follow the recent dismissals of four senior Chinese defence executives. CASIC deputy manager Wang Changqing, Wu Yansheng, chairman of the China Aerospace Science and Technology Corporation, Liu Shiquan, chairman of the board of the China North Industries Group Corporation and Wang Xiaojun, a former leader of the China Academy of Launch Vehicle Technology all lost their positions on the Chinese People’s Political Consultative Conference.

This came at the same time as the dismissal of nine PLA generals, including a number of senior Rocket Force personnel, from China’s top legislature in December following an earlier shake-up of the high command of the Rocket Forces.

It remains to be seen what will be the outcomes of the “two sessions” next week, when China’s political elite and lawmakers will gather for the country’s annual legislative sessions which will set budgets and lay down plans for the country’s economy, diplomacy, trade and military.

For tourism experts, Berlin is the place to be in the coming week. Hopefully many of our readers will be able to come to ITB Berlin and to visit the China tourism panel organised by WTCF World Tourism Cities Federation. Among the speakers will also be the author of this text. The panel is scheduled for May 5th, 16.45 h in Hall 7b of ITB Berlin. Participation is free, but you will need an entry ticket for the fair.