Out of Money: Is China Entering An Era Of Legalized Theft?

Fiscal strain, mainland police seize assets across provinces, leaving businesses crying out. Two mine accidents in four days in China, at least 12 dead and two trapped. Electric car fire, newly bought vehicle ignites suddenly. Tsinghuangdao hit by torrential rain, city streets flooded with one meter deep water, numerous cars swept away. Walmart clears JD.com stock holdings, JD.com stock price plummets. Australian Defense Academy bans visits from Chinese scholars. It's all covered in today's China Truths. Fiscal exhaustion, mainland public security crosses provinces to seize money, businesses cry out with nowhere to complain. As the Chinese mainland economy continues to deteriorate, authorities are increasingly resorting to aggressive tactics to seize funds, with poorer provinces targeting wealthier ones under the guise of legal proceedings. This trend is disclosed by mainland lawyer Zhou Xiaoyun in a Weibo post dated August 20, 2024, titled The Terrifying Offshore Fishing— Some Regions' Extraterritorial Law Enforcement Money Grabs. Zhou discusses how regional law enforcement agencies are overstepping their jurisdiction to manipulate legal procedures for financial gain, a practice that is becoming more widespread. In his post, Zhou details offshore fishing as law enforcement extending beyond their territories to extract funds. He explains how these agencies target not only seemingly wealthy businesses with regional ties, but also those without any ties, using elaborate traps. Moreover, Zhou points out that corrupt officials are known to transfer illicit funds into the accounts of affluent individuals, then freeze all assets, funneling these funds into their own pockets. He also notes the oppressively high tax burden on businesses, which exceeds 60 percent, adding to the financial challenges. Simultaneously, an article by Jin Jianqing titled I Don't Know Whether I Should Say This shares a personal account of dealing with these predatory financial practices from Hangzhou to This piece reveals how economically struggling regions, unable to profit from land sales, are now targeting wealthier areas to bolster their revenues, placing significant legal risks on local businesses and individuals. Zhou warns that the legal hazards associated with these practices are nearly insurmountable. He said that once an account receives funds, it's often neither possible nor practical to verify the legality of those funds. As a result, many individuals, unwittingly involved, find themselves wrongfully accused of aiding cybercrime, leading to criminal detention and severe legal penalties, underscoring the serious consequences of unchecked offshore phishing. A day after Zhou's revelations, on August 21, 2024, Jimian News published a commentary titled Malicious Profit-Driven Law Enforcement Should End, highlighting the increasing severity of cross-provincial financial seizures by local public security. The commentary outlines four primary tactics used—extortion, targeting entrepreneurs with local business ties, targeting a point to exploit the whole, involving charges against large enterprises, catching everything in one sweep aimed at platform-based businesses, and offshore phishing, targeting businesses with strong assets in other provinces. Netizens condemned this blatant robbery and perceived mockery of the rule of law. One commenter expressed, When those in power become corrupt, ordinary people can only lie flat and wait to be taken advantage of. Meanwhile, the local response has varied, with clashes occurring between some local police units and out-of-province officers over cross-provincial arrests. Notably, the Jiubao police station in Hangzhou issued a warning against unauthorized entry by out-of-town public security agencies, requiring the presence of local officers during business investigations. This contentious atmosphere has led many businesses to join WeChat frozen account groups and jelly groups to seek collective redress, though effective complaint channels remain elusive. A notable standoff occurred in 2020 when local police in Hangzhou blocked Heilongjiang officers from investigating Tongdan Technology Company under the pretext of combating online fraud. In 2021, public security from several northern provinces stationed personnel in Yiwu to freeze the accounts of small foreign trade merchants, with unfreezing contingent upon payment. This prompted a viral letter from Yiwu Public Security to national agencies, appealing for moderation in enforcement tactics and a halt to excessive and selective law enforcement. Amid these challenges, some netizens speculated, when the central government's finances run dry and can no longer support local governments, regions will inevitably go their own way. Is this the beginning of danger, social unrest, autonomous splits, or even a republic? Two mine accidents in four days in China, at least 12 dead and two trapped. China continues to face a series of tragic mine disasters. At around 10 a.m. on August 21, 2024, during the sealing operations of the ventilation shaft, an accident occurred at the Saikou mine in Shilin town, Wotonkio district, Sichuan province, leaving eight miners trapped underground. By 2 p.m., rescue operations had confirmed the deaths of seven workers, with one still under rescue efforts. Netizens have voiced their concerns and personal connections to the tragedy. One said, one of them is my family member. Another expressed, all those who died are people I know. A third revealed, my dad is one of them. Another comment read, that coal mine in Wotonkio should have been closed long ago. It's shabby and extremely dangerous. I have seen it myself. Tayen Yanka app details that Leshan Saikou Industry Company Limited was established in 2012 with a registered capital of 24.074 million yuan, approximately 3.4 million U.S. dollars. The company's business scope includes coal mining and sales, along with electricity production and sales. It has been non-operational since 2020. Further research on Tayen Yanka reveals that Peng Zhongyong, linked to 11 companies, is involved in industries such as coal mining and tea in Leshan. In July 2021, the Leshan Chamber of Commerce disclosed that Peng holds another position as the president of the Sichuan Provincial Mining Chamber of Commerce. Prior to these incidents, the Emergency Management Bureau of Huixin County reported another mine disaster in Yunnan Province. At approximately 5.40 a.m. on August 18, 2024, the Guda Coal Mine experienced a suspected coal and gas outburst, resulting in five deaths and one person missing. These recurring disasters underscore the perilous state of China's coal mining industry, recognized as one of the most hazardous globally. Independent labor organizations estimate that approximately 20,000 miners die annually in mine disasters across the nation. Electric car fire, newly bought vehicle ignites suddenly. Chinese electric cars, backed vigorously by the CCP, have consistently faced incidents of fire and explosions. A dramatic event was caught on a viral video, showing a brand new blue electric car navigating a street when its front end abruptly bounced. Within near seconds of landing, the vehicle's underside burst into flames, fiercely engulfing the right side door in fire. The male driver acted swiftly, exiting the vehicle and rescuing a female passenger from the left side door. This incident, which took place on August 18, involved a freshly purchased electric car that had only recently been driven on the streets. The exact location of this occurrence remains undisclosed. The rapid ignition of the fire has led to widespread speculation among netizens regarding its cause, with many expressing alarm at the speed of the fire's escalation. The brand involved, Deep Blue, known for promoting the safety and security of its batteries, has come under significant scrutiny. Questions arise among the public, with some netizens explicitly asking, Deep Blue, are you really safe? In response to the fiery incident, senior executives from Deep Blue Automobiles provided clarifications in the early hours of August 21. They attributed the fire to a tire impacting a damaged floor tile, which caused a sharp tile edge to lift and slice through the battery's base plate, piercing two of the battery cells. Despite the severe incident, executives claimed that the fire self-extinguished within 25 seconds, affecting only two battery cells, and highlighted that the golden bell cover battery endured the ordeal. Nonetheless, skepticism persists as some netizens pointed out that the video footage does not visibly demonstrate the tile lifting, suggesting that the bounce of the front end could potentially be a flaw inherent to the vehicle itself. In recent years, the frequency of fire or explosion incidents involving domestic Chinese electric cars has increased, with continual documentation on social media. Further incidents have been reported recently, including spontaneous combustion of an electric car on a street in Kaili City, Guizhou, and another devastating fire in Jilin that destroyed a storefront and several other vehicles. Qinhuangdao hit by torrential rain, city streets flooded with 1-meter-deep water, numerous cars swept away. On August 20, 2024, Qinhuangdao City in Hebei Province was severely impacted by an extremely strong rainstorm. The entire city was submerged, with the deepest floodwaters reaching over a meter, paralyzing city traffic and causing widespread disruption. In the heart of the disaster, Zizangsuang Village suffered extensive damage. Viral videos circulating online showed floodwaters rushing through the streets, carrying along numerous vehicles including a white sedan that was eventually trapped by other stranded vehicles, causing a pileup. A Qinhuangdao resident reported to the media that the city's numerous roads were overwhelmed by floodwaters. On the afternoon of August 20, staff from the Qinhuangdao Municipal Government Service Hotline described the situation as The worst flooding was reported in the Xinhai-Xingli community at the intersection of Xihuan North Road and Beihuan West Road, where waters rose to residents' wastes. They confirmed that public transportation was almost entirely disrupted. The next morning, streets were littered with abandoned vehicles. According to drivers, the demand for vehicles was so high that local cars were sold for 800 yuan, about 112.21 US dollars, while out-of-town cars fetched 1,500 yuan, about 210.4 US dollars. Autopark City was filled with a variety of submerged vehicles. Despite the chaos, there were no visible rescue operations, leaving residents to fend for themselves among the scattered vehicles. At 5.11 p.m. on August 20, 2024, the Qinhuangdao Meteorological Department issued a red alert for torrential rain. The forecast predicted continuous heavy rainfall for the next 24 hours, with total rainfall expected to exceed 200 millimeters in some areas. Hourly rainfall rates were anticipated to reach 20 to 40 millimeters, with some areas experiencing more than 70 millimeters per hour. Meanwhile, on August 20, 2024, devastating floods swept through Jiancheng County in Huludiu, Liaoning Province, leaving some areas submerged under up to two meters of water. The floodwaters prompted numerous calls for help from residents trapped by the rising waters. Local residents reported that the flooding was triggered by a reservoir release, causing the river to surge and overwhelm downstream communities. Videos circulated online, showing the Jiancheng Reservoir and Huludiu's Nanpiao District discharging water, with urgent calls for residents downstream to evacuate immediately. Walmart Clears JD.com Stock Holdings, JD.com Stock Price Plummets On August 21, JD.com stock experienced a significant drop, with shares in Hong Kong falling by as much as 11 percent during the trading day, following news that Walmart had sold off its entire stake in the company. In response, JD.com promptly invested approximately $390 million to repurchase its own stock. Previously, Walmart was JD.com's second-largest shareholder, holding 9.4 percent of its shares. Documents from the U.S. Securities and Exchange Commission reveal that Walmart has finalized the sale of its JD.com shares, concluding an eight-year-long investment in the Chinese e-commerce giant. Reporting from The Wall Journal on August 21 highlights that Walmart offloaded 144.5 million shares at $24.95 per American Depository Receipt, ADR, 11.5 percent lower than JD.com's closing price of $28.15 on the prior day. This strategic sale fetched Walmart a total of $3.6 billion. The impact of this news was felt immediately, with JD.com's U.S. stocks plunging 9.54 percent to $25.50 in after-hours trading. In Hong Kong, the stock price tumbled 11.5 percent at market opening, dropping below the 100 Hong Kong dollars, about $12.80 mark. Amidst the stock turbulence, JD.com issued a statement at noon on the Hong Kong Stock Exchange, confirming the expenditure of around $390 million on stock repurchases that day. Despite Walmart's divestiture, sources close to JD.com assert that the shift in equity investment will not affect ongoing business cooperation between the two companies. Both parties continue to regard each other as important strategic partners and are keen on maintaining and expanding their business collaborations both domestically and internationally. Walmart's statement clarified that this move allows the company to concentrate on the strong performance of its China operations and Sam's Club, reallocating funds towards other priorities. Over the past eight years, JD.com has been a valued partner, and Walmart remains committed to sustaining this business relationship. According to Reuters, Walmart's decision to liquidate its holdings signifies a shift in the once-lucrative Chinese e-commerce sector, now marked by fierce price competition and consumer spending reticence, which has repeatedly constricted profit margins. The partnership between JD.com and Walmart began in 2016 with the merger of Walmart's Yehudian into JD.com and an acquisition of approximately 5% equity in JD.com by Walmart. This initial collaboration, valued at around $1.5 billion based on JD.com's stock prices at the time, saw Walmart's stake quickly exceed 10%. JD.com's stock, from its peak in early 2021, has plummeted by approximately 70%. Australian Defence Academy bans visits from Chinese scholars. In a significant move, the Australian Defence Force Academy has announced restrictions on visits from Chinese scholars to its University of New South Wales' Canberra campus, where a majority of international students are from China. This decision aligns with growing concerns over national security and escalating military tensions between Australia and China. According to the Australian Broadcasting Corporation, ABC, this measure aims to limit research collaborations with Chinese scholars, particularly in areas sensitive to national defence. The Canberra campus has been integral in educating officers and non-commissioned officers, offering courses directly related to defence operations such as the Master of Explosive Ordinance. Experts like Yu Zhongji, former dean of the College of Political Warfare at Taiwan's National Defence University, highlight the strategic nature of this move. He said, the CCP has extensively used these academic visits and exchanges under the guise of military academia to carry out what's called the Thousand Talents Plan, aimed at capturing or infiltrating and stealing relevant national defence secrets, or to seize elite scholars from important think tanks and their strategies. For Australia, this represents a potential significant vulnerability in national defence and security, so this publicisation and rejection of visits from Chinese scholars to the Defence Academy signifies that the Australian government is taking comprehensive measures to block all potential channels for Chinese intelligence and espionage. Su Ziyun, director of the Institute of National Defence Strategy and Resources at Taiwan's National Defence University, observes that this is part of a broader tightening of policies against China. He recalls past concerns over the CCP's efforts to steal sensitive underwater data and radar technologies through ostensibly benign scientific collaborations. The change also reflects broader strategic alignments, notably the AUKUS partnership between Australia, the UK, and the USA, which intensifies Australia's role in regional defence strategies, including hosting critical military training and equipment facilities. Amid these developments, Shadow Home Minister James Patterson has expressed support for the university's decision and urged a thorough review of all collaborations with entities tied to the Chinese government. This stance is part of a global trend of increasing vigilance against potential espionage activities facilitated through academic and technological channels, ensuring that national security remains a top priority. As early as 2019, Australian experts cautioned against underestimating China's infiltration efforts. They pointed out that China has made inroads into Australia's military, cultural, economic, and other key areas. This is particularly evident in universities, where academic collaborations are often used as a cover. During these exchanges, advanced technology is quietly transferred back to China and other countries. There, it's used for surveillance and to infringe on human rights, a tactic described as picking flowers abroad to make honey in China. 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