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Daily Archives: August 18, 2022

Chart: Japan Has Continuous Trade Deficit for the Past 12 Months Since July 2021

Source : Nikkei

Chinese Shun Debt and Pile Up Savings, Threatening Global Growth Engine

Anna Luan is worried about the future. The Shanghai internet business where she works hasn’t paid her salary in full since April, when city authorities instituted a strict lockdown to contain the spread of Covid-19. Luckily the 30-year-old had built up savings through the pandemic, which she’s dipped into to cover regular expenses. She’s also used some of that money to pay off 200,000 yuan ($29,530) in mortgage debt on the two homes she owns in her hometown of Changzhou. “So many companies are laying off people and cutting pay,” Luan says. “Now I just want to save any spare cash I have and don’t even dare to spend.”

Recent surveys show Chinese households are more pessimistic about future income growth than they’ve ever been—even at the pandemic’s start in 2020 or after the global financial crisis. That’s motivating them to cut back debt and beef up savings, a trend that could depress economic growth for years.

Households amassed 10.3 trillion yuan in bank deposits in the first half of 2022, an almost 13% increase from the same period a year earlier and the largest jump on record. Their borrowing grew some 8%, the slowest pace since 2007.

Chinese households have plenty of reason to feel downbeat. The economy is slowing because of Beijing’s draconian Covid-zero posture and a deep slump in the property sector, among other factors. Household wealth has taken a hit from falling house prices, and youth unemployment hit an all-time high of almost 20% in July, more than twice the US rate. Officials have privately acknowledged that this year’s official target of “about 5.5%” annual gross domestic product growth isn’t achievable.

Growth in household income in urban areas amounted to just 1.9% in the first half of the year, adjusted for inflation, compared with 10.7% in the same period in 2021, official data show. Consumer spending slowed even faster, with retail sales contracting almost 1% over the same period.

China has long had a high saving rate compared with other countries, partly because it doesn’t have a very extensive safety net, so families rely more on their own resources for medical treatment and retirement. The saving rate has gradually dropped over the years, from about 40% of disposable income in 2010 to about 35% in 2019, according to Organization for Economic Cooperation and Development data, meaning growth in consumption was outpacing income gains.

Until recently, Chinese households were confident enough about their earning potential to borrow, boosting their spending even further. The ratio of household debt-to-GDP more than doubled to about 60% in the decade before the pandemic, a time when banks made it easier to take out mortgages, facilitating a real estate boom.

A proliferation of consumer-loan companies supercharged consumption spending, which logged inflation-adjusted growth of almost 7% annually in the six years before the pandemic, according to official data. “One of the most pernicious myths about the Chinese economy is that it is not consumer-driven,” Andrew Batson, director of China research at Gavekal Dragonomics, wrote in a note to clients. “In fact, the combination of household consumption and investment has consistently accounted for 50% or more of China’s GDP. The malaise in the Chinese economy over the past several months shows exactly what happens when half of GDP decides not to show up.”

The household debt-to-GDP ratio has remained unchanged since the last quarter of 2020, and some economists see that as marking a permanent shift. “We’re past the era when economic growth can be driven by higher leverage,” says Gan Li, director of the Survey and Research Center for China Household Finance at China’s Southwestern University of Finance and Economics.

The impact is clear for multinationals that have come to rely on China for a large chunk of their revenue. Starbucks Corp. reported a 44% decline in Chinese sales in the quarter ended on July 3. Nike Inc.’s China sales fell 20% in the most recent quarter. Even previously pandemic-proof online retailers are struggling: Alibaba Group Holding Ltd.’s China e-commerce revenue fell 1% in the quarter ended in June.

The pre-pandemic buildup of household debt had raised concerns about financial stability. But now the thriftiness of people like Luan, the tech worker in Shanghai, is fanning worries that China could find itself trapped in a downward spiral. The experiences in Japan following the bursting of the asset price bubble in the 1990s and in the US in the wake of the 2008 financial crisis show that an extended period in which households pare back debt can have negative long-term consequences for property values and consumption, according to a report by BCA Research Inc.

In a sign of changing attitudes toward debt, Bank of Communications Co. drew public criticism on social media after it posted a notice this month saying it planned to institute a penalty for borrowers who repay mortgages early. The bank pulled the notice from its official website after just one day.

“This trend will last until the People’s Bank of China reduces interest rates to discourage savings and encourage borrowing, house prices begin to rise meaningfully, and improving employment and income revive confidence,” says Arthur Budaghyan, chief emerging-markets strategist at BCA Research.

Having spent years clamping down on loosely regulated consumer lending as part of a campaign to reduce risk, the PBOC isn’t eager to see households piling on debt. It cut benchmark interest rates by a modest 10 basis points this week, the first reduction since January. However, the scope for significant easing is limited because of the risk of destabilizing capital outflows as the Federal Reserve and other major central banks enact jumbo rate increases.

Also, even if it would help spur the economy in the short term, any move that would incentivize well-to-do Chinese to buy more apartments doesn’t fit President Xi Jinping’s “common prosperity” agenda, which is aimed at curbing inequality. “Changes will be politically difficult because Xi Jinping has tripled down” on Beijing’s policy refrain that houses shouldn’t be used as investment vehicles, says Nicholas Borst, director of China research at Seafarer Capital Partners.

Beijing says it wants to boost consumption, but unlike many developed and developing countries, China has refrained from enacting direct payments for households that are struggling financially as a result of pandemic curbs. Zhu He, deputy head of research at Beijing-based think tank China Finance 40 Forum, says the recent mortgage boycott by tens of thousands of middle-class Chinese not only reflects worries about the delivery of housing projects “but also shows some groups are facing huge cash flow pressure.”

A Shanghai businesswoman who wanted to be identified only by her last name, Ma, says she scrapped plans this year to take on more debt to buy another home. Instead, she made 4 million yuan of advance mortgage payments on the four apartments she already owns. Her decision was dictated less by the party line than by the financial strain her family’s commodity import and export business suffered as a result of the city’s two-month lockdown, which severely disrupted activity at the port. “There are so many things that we can’t control or anticipate because of Covid,” she says. “We’d rather repay our loans with the spare cash we have now.”

Source : BNN Bloomberg

Music Video: Isn’t It A Pity

George Harrison

Watch video at You Tube (4:58 minutes) . . . .

Colorful Solar Panels Could Make the Technology More Attractive

Solar panels aren’t just for rooftops anymore – some buildings even have these power-generating structures all over their facades. But as more buildings and public spaces incorporate photovoltaic technologies, their monotonous black color could leave onlookers underwhelmed. Now, researchers reporting in ACS Nano have created solar panels that take on colorful hues while producing energy nearly as efficiently as traditional ones.

Solar panels are typically a deep black color because their job is to absorb light, whereas a red car looks red because the finish reflects red light instead of absorbing it. Most attempts to give these devices color, then, will decrease their ability to absorb light and generate power. One alternative is to use structural sources of color that take advantage of microscopic shapes to only reflect a very narrow, selective portion of light, like the scales on butterfly wings. However, previous technologies attempting to incorporate structural color gave panels an undesirable iridescence or were expensive to implement at a large scale. So, Tao Ma, Ruzhu Wang, and colleagues wanted to develop a way of giving solar panels color using a structural material that would be easy and inexpensive to apply, and that would maintain their ability to produce energy efficiently.

The team sprayed a thin layer of a material called a photonic glass onto the surfaces of solar cells. The glass was made of a thin, disorderly layer of dielectric microscopic zinc sulfide spheres. Although most light could pass through the photonic glass, selective colors were reflected back based on the sizes of the spheres. Using this approach, the researchers created solar panels that took on blue, green and purple hues while only dropping the efficiency of power generation from 22.6% to 21.5%. They also found that solar panels manufactured with this photonic glass layer maintained their color and performance during standard durability tests, and that the fabrication could be scaled up. The researchers plan to explore ways to make the colors more saturated, as well as methods to achieve a wider range of colors.

Source : American Chemical Society

Study: Half of People Infected With Omicron May Not Have Known It

Steven Reinberg wrote . . . . . . . . .

Are you one of those folks who thinks they have somehow miraculously managed to avoid COVID-19 infection more than two years into the pandemic?

You might be mistaken, claims new research that discovered most people hit by the highly contagious Omicron variant had symptoms so mild they didn’t know they were infected.

A full 56% of those infected weren’t aware they had COVID-19, researchers report. Earlier studies had found that as many as 80% of those infected never experienced symptoms.

“These findings help to confirm what we have suspected for some time, which is that many COVID infections are not being detected or recognized — in part because they are not resulting in a lot of symptoms and in part because there is limited access to or use of diagnostic testing,” said lead researcher Dr. Susan Cheng. She is with the department of cardiology at the Smidt Heart Institute of Cedars-Sinai Medical Center in Los Angeles.

“Most people with COVID being unaware of their infection status, especially while actively transmissible, is likely a major driver of the ongoing pandemic that we are all still trying to make our way through,” she added.

For the study, Cheng’s team took blood samples from health care workers, and in 2021 they were also able to collect blood samples from patients. That part of the study was funded by Sapient Bioanalytics, which tested the samples for the virus.

The researchers had nearly 2,500 health care workers and patients contribute blood samples just before or after the start of the Omicron surge.

They identified 210 people who were infected with the Omicron variant. Only 44% of these people were aware that they had been infected. Of those who were unaware, only 10% said they had symptoms, which they attributed to a common cold or other infection.

“More than half of people who developed Omicron infection were unaware of their infection. In most cases, they had mild or no symptoms. In the few instances where there were mild symptoms, these symptoms were attributed to some other cause, such as a common cold,” Cheng said.

To try to beat the pandemic, it’s vital that people know that they can have COVID-19 and not have any or only mild symptoms, but still spread the infection to others, she stressed.

“Increasing infection awareness could help a great deal to curb the ongoing spread of COVID across our communities,” Cheng said. “Because infection awareness rates appear to be low, there is tremendous room for improvement. We now have the tools to achieve this improvement, and we can each do our part to, hopefully, get through this pandemic faster and together.”

Infectious disease expert Dr. Marc Siegel, a clinical professor of medicine at NYU Langone Medical Center in New York City, said this study clearly shows that COVID-19 has infected many more people than has been reported.

“There’s a heck of a lot more mild or asymptomatic or very, very mildly symptomatic COVID out there than we’re acknowledging, and that means that we’re getting a lot of immunity at least to this variant,” he said. “That might help explain the overall picture of the current state of the pandemic, which is that there’s a lot of mild cases, but there’s also a lot of severe cases.”

Siegel thinks the immunity one gets from the virus has been underplayed.

“It’s especially important now when we’re seeing how easily transmissible this thing is,” he said. “We know we’re undercounting. When I see 100,000 cases a day, I think it’s really a million cases. We’re getting to the point where the vast majority of people in the United States have had COVID in one form or another.”

The combination of immunity from the virus itself and that gotten from vaccination may help slow the pandemic, Siegel said.

Vaccination is important in preventing severe disease, especially among those most at risk. “I’m encouraging patients to get boosted to decrease the risk of hospitalization,” he said.

Soon, Siegel expects to see new vaccines that will be more effective than the current crop, including nasal vaccines and universal coronavirus vaccines.

The report was published online in JAMA Network Open.

Source: HealthDay

Did ‘God Songs’ Kill China’s God of Rock?

Cai Yineng wrote . . . . . . . . .

Quick, catchy, and inane, short video-optimized “god songs” have taken over Chinese music. Does anyone still have the patience for an old-school album?

Last August, legendary rocker Cui Jian released his first album in six years to a largely indifferent response. “Flying Dogs” won Cui the “Best Male Singer” prize at the Golden Melody Awards in Taiwan — a first for a mainland singer — but 35 years after his iconic live performance of “Nothing to My Name” at Beijing’s Workers’ Stadium, his new music barely registered as a blip on the Chinese mainland.

The album’s lukewarm reception stood in sharp contrast to Cui’s virtual concert in April, which was viewed live by over 40 million people. With regular tours all but impossible due to China’s strict COVID-19 protocols, livestreamed concerts have become a rare bright spot for the industry over the past three years. In addition to Cui, millions have logged in to streaming platforms to see performances by pop pioneer Lo Ta-yu, early 2000s idols like Stefanie Sun and Jay Chou, and boy bands like Westlife and the Backstreet Boys.

Perhaps inevitably, the most popular of these shows have leaned heavily on viewers’ nostalgia for earlier eras of Chinese music, whether the heady, intellectual rock of the 1980s or the pop idols of the ‘90s and ‘00s. Although this nostalgia has helped artists weather the storm of COVID-19, it’s also laid bare some brutal truths about China’s music business, which even before the pandemic was growing increasingly dependent on partnerships with tech companies for survival. What does it say about the traditional music-making and marketing model when audiences are more willing to spend multiple hours watching ad-laced virtual concerts than listening to short, cohesive albums by the same artist?

In contrast to the United States or United Kingdom, where rock music was born out of working class culture, the early Chinese rock scene, at least on the mainland, was largely dominated by the political and cultural elite. As China’s economy and politics became increasingly liberal in the 1980s, a wave of cultural change took place both within and outside the system. Cui himself is a representative example: His father was a trumpet player for the People’s Liberation Army Air Force; his mother was a professional dancer. Passionate about literature and music from a young age, he became enchanted with Western musical styles such as jazz and rock after they were reintroduced into China in the late 1970s.

Cui’s ability to mix these diverse influences propelled him to stardom in the mid-1980s; his 1986 performance at the Workers’ Stadium is considered a seminal moment in the history of Chinese rock and helped set the template for a generation of literary-minded rockers. Although wildly popular, Cui and other members of the 1980s rock scene like He Yong sought to present themselves as poets and polemicists, rather than merely commercial acts.

This elitist model of cultural production came under sustained challenge in the 1990s. To start, the Chinese government began reasserting more forceful control of the arts: Cui’s nationwide tour in 1990 was called off halfway; He Yong was quietly blocked from performing to large audiences for over a decade after 1996. Meanwhile, and perhaps more fundamentally, the music industry, fueled by the craze for pop music from Hong Kong and Taiwan, became increasingly commercialized.

This mirrored trends in other sectors of pop culture on the Chinese mainland throughout the 1990s. As economic liberalization took root and spread, the “culture fever” of the 1980s receded, giving way to a market frenzy. In music, there was the rise of pop; in film, Hollywood-style blockbusters ruled the box office; and on TV screens, melodramatic Taiwanese dramas competed for eyeballs with locally produced shows.

At the time, the commercialization of Chinese music was hailed as a sign of the “democratization” of culture, if not Chinese society. Key to this narrative was the rise in the 2000s of reality shows like 2004’s Super Girl, where TV viewers across China could vote for their favorite contestant via phone.

Rather than fight back, the heirs to Chinese rock retreated into ever smaller subcultures. An oft-quoted 2001 declaration by Wu Tun, lead singer of the band Tongue, sums up the prevailing attitude: “Seeds must be planted underground.” Distancing themselves from both officialdom and capital, rock musicians mocked their contemporaries for attending bureaucratic forums or performing at state-backed events. Cui Jian himself turned down an invitation to perform at the 2014 Spring Festival Gala.

Meanwhile, the “democratization” of Chinese pop music accelerated with the rise of short-video apps like Douyin, the mainland Chinese version of TikTok. A 2021 survey found that, in December 2020, mobile internet users in China spent an average of two hours a day on short-video apps, compared to just 28 minutes a day listening to music online.

As users migrate to addictive short-video apps, contemporary pop artists have been forced to adapt their approach to music creation and marketing. With only 15-second blocks to work with, artists in the short-video era eschew traditional song structures in favor of simple, cheaply made melodies that influencers can dance to and listeners can memorize quickly. These shenqu — or “god songs” — have replaced singles as the dominant form of music consumption among young Chinese. Even Douyin itself has been unable to steer users back to more traditionally produced tunes.

Unsurprisingly, breaking songs down into 15-second bites does not make for meaningful music. Critic Li Wan sums up the predicament faced by the music industry in China and abroad as a kind of unbearable “lightness”: Distracted by inane melodies and shallow sentiments, people have gradually lost their concern for the human condition. “The kind of intense soulfulness that music demonstrated in the past is now nowhere to be found,” he bemoans. Even rock music has become “inarticulate.”

That’s not to say all is lost. Somewhat optimistically, Li believes “Flying Dogs” represents a return to form for Chinese rock. He also cites Omnipotent Youth Society’s 2020 album “Inside the Cable Temple,” which deftly evokes social issues such as pollution, corruption, and declining class mobility. Crucially, unlike “Flying Dogs,” “Inside the Cable Temple” was a hit, selling hundreds of thousands of digital copies in a matter of days and proving that there’s an audience for carefully crafted albums — though bassist Ji Geng still felt the need to thank fans for their patience in listening to the whole album in the liner notes.

There’s no particular reason to hope that Chinese music will return to the elite-centric model of production and consumption that reigned in the 1980s, but that doesn’t mean accepting the fast-food approach to music being pushed on us by tech companies, record firms, and the cultural authorities. “Flying Dogs” might not have been a commercial hit, but there’s something appealing about an artist who, after nearly 40 years of making music, insists on making music their way. As Cui himself puts it in the lyrics to “The B-Side of Time”: “I haven’t changed at all.”

Source : Sixth Tone