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Beijing boosts domestic consumption as Chinese New Year begins

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The Lunar New Year holiday in China, which starts today, will provide a glimpse of whether recent efforts by central and local governments to boost consumption through subsidies are bearing fruit.

During the eight-day holiday, millions of people will travel to see family or visit domestic tourism spots. Long queues formed at railway stations towards the end of last week as some workers took additional leave to return early.

A teacher in her 30s working in Shanghai took a 14-hour train journey back to her hometown of Luzhou in the southwestern province of Sichuan on Friday. “I am looking forward to spending time with my family and relatives, mostly drinking, gossiping, and playing mahjong,” she told Nikkei Asia, noting that Luzhou is famous for its baijiu, or traditional hard liquor.

The earlier timing of the holiday compared to last year, when it started in February, was partly blamed for an unexpected contraction in China’s manufacturing activity in January, according to an official survey released on Monday. Still, the weak data “means that more needs to be done to help stimulate activity” through policy, HSBC said in a note on Monday.

The Chinese government expects a record 9 billion trips to be made between January 14 and February 22, a 40-day period when travel demand increases during the Lunar New Year, known as Chunyun. Although the government also predicted 9 billion trips last year, this figure represents a 7% increase on last year’s figures. Around 80% of journeys are expected to be made by car, while rail and air travel are forecast to reach 510 million and 90 million, respectively.

Local governments are developing rail networks across the country, making long-distance travel increasingly easier. Airlines are trying to compete during Chunyun with fares about 5% lower than last year, according to FlightAI, which tracks flight data, in a sign that frugal consumers are opting for the more affordable rail option.

Some shopping malls put up signs promoting the government’s subsidy program for household goods and cars launched last year. At a shopping center in Shanghai, a store selling Toshiba home appliances advertised discounts of up to 35%. E-commerce apps such as Taobao and JD.com set up special “government subsidy” sections and displayed banners saying products would be shipped as usual during the holidays.

Earlier this month, the government announced it was providing an additional 81 billion yuan ($11.1 billion) for the program, adding smartphones, tablets, and smartwatches.

Local governments are also offering discount coupons for cinema tickets, hotels, and other consumer activities. According to Chinese media, cinema ticket sales from January 28 to February 4 reached 736 million yuan, already surpassing last year’s bookings. This follows a dismal 2024, when box office sales fell 23% year-on-year.

Investors expect the government to implement additional policies following the announcement of official fiscal targets at the National People’s Congress in March. In a sign of relatively low expectations for generous New Year spending, shares of baijiu producer Kweichow Moutai have fallen 6% since the start of the year.

“Baijiu’s current sales volume is still low compared to the same period last year,” local brokerage Pacific Securities wrote in a recent report. “However, the decline has narrowed compared to the Mid-Autumn Festival and National Day holidays in 2024,” it added.

ASIA

Tokyo court revokes Unification Church’s religious status

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The Tokyo District Court ruled on Tuesday to strip the Unification Church of its religious corporation status, which allowed it to be tax-exempt, following criticism over its coercive fundraising tactics.

The legal procedure, triggered by the assassination of former Prime Minister Shinzo Abe, concluded after 1.5 years of closed-door hearings.

With the court’s decision, the organization affiliated with the Moon sect, officially named the Family Federation for World Peace and Unification, is expected to be financially impacted as it will no longer be tax-exempt. However, it will be allowed to continue its activities.

Following the decision, the church expressed its disappointment on its website, calling the decision “unjust” and arguing that it would be a major upheaval for religions in Japan.

“Since the assassination of former Prime Minister Abe, a great deal of false information about our organization has been circulating in the media and on social media,” it said, adding, “We sincerely ask that the public not discriminate against our congregation.”

The group said it plans to appeal to the Tokyo High Court.

Judge Kenya Suzuki, the presiding judge who issued the ruling, said that even with the right to freedom of religion in mind, “the decision was deemed necessary and unavoidable.”

The ruling stated that the group revised its internal governance in 2009 to prevent its congregation from using coercive tactics when soliciting donations, but despite this, group members continued to employ similar tactics and harm the public.

Suzuki said, “Damages of an unprecedented magnitude have occurred.”

The Unification Church’s questionable tactics came to light after the suspect who killed Abe in July 2022 blamed Abe for his family’s financial ruin. The suspect was outraged by his mother’s excessive donations to the sect and held Abe responsible for his family’s collapse due to his strong ties with the sect.

Following the shooting, numerous former followers and their families came forward with similar stories. It was determined that the sect had harmed many families.

In October 2023, the Ministry of Education applied to the Tokyo District Court, requesting that the Unification Church’s religious corporation status be revoked.

This is the third instance in Japan where a court has stripped a group of its religious corporation status. Prior to the Unification Church, these sects include Aum Shinrikyo, responsible for the 1995 sarin gas attack on the Tokyo subway, and Myokakuji Temple in Wakayama Prefecture, whose top leader was convicted of fraud.

However, this is the first time a court is making a decision based solely on civil court findings regarding a group’s illegal actions, rather than criminal convictions.

Unlike previous cases, the Unification Church has not faced any criminal charges.

The Tokyo District Court accepted the Ministry of Education’s request based solely on the outcome of 32 civil lawsuits in which various courts recognized the church’s practices as illegal and awarded damages totaling more than 2.2 billion yen ($14.6 million).

The ministry argued that the civil court decisions acknowledging the church’s behaviors as illegal met the criteria for legal violations under the Religious Corporations Act. The church argued that the law only refers to criminal violations and that civil cases, such as torts, should not be considered.

The law also requires that the illegal activities have significantly harmed the public interest.

The ministry argued that the church’s repeated and continuous solicitation of large donations over four decades forced its followers into financial and emotional distress, and therefore met this threshold. In addition to the 32 civil court decisions, the ministry collected testimonies from more than 170 victims to build its case.

The Unification Church argued that donations are part of its religious expression and insisted that it implemented internal compliance measures in 2009. It argued that complaints have greatly decreased since then and that its actions lacked the malice alleged by the ministry.

In a separate case heard earlier this month, the High Court ruled that the Unification Church’s civil violations involving intentional or negligent harm could justify stripping the group of its religious corporation status.

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ASIA

BYD sales surge 29% on robust hybrid demand in China

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Chinese electric vehicle champion BYD exceeded expectations with a 29% increase in full-year sales, driven by strong demand for plug-in hybrids in its domestic market.

The group’s revenue reached Rmb 777 billion ($107 billion), crossing the $100 billion threshold for the first time. Growing exports also contributed to the sales figures.

Net income rose by 34% to Rmb 40 billion, largely in line with analysts’ estimates of $5.5 billion, according to a Bloomberg survey.

With overseas sales exceeding 400,000 vehicles last year, the Chinese company recently raised approximately $6 billion to finance its expansion plans, setting its sights on further overseas growth.

BYD, which accounted for approximately 16% of cars exported from China in January and February, is building factories in Europe and South America.

The strong figures followed founder Wang Chuanfu’s introduction last week of a new battery charging system that will allow customers to charge electric vehicles in five minutes.

Since the beginning of the year, the Shenzhen-based company has introduced a range of EV technologies, including an advanced driving system called God’s Eye, to make its model lineup more attractive.

BYD’s Hong Kong-listed shares closed up 3% on Monday. The shares have risen more than 50% this year, in stark contrast to Tesla’s 34% decline.

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ASIA

Sadiq Khan’s prompt trip to Kabul; Pakistan is really sidelined on Afghan front 

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Pakistan’s special envoy to Afghanistan Muhammad Sadiq Khan’s prompt or in “hurry” trip to Kabul could be seen as an act for “immediate” response to US acts ignoring Pakistan in recent developments of establishing direct links with Taliban governing Kabul for the second term since August 15 2021. Prior to Sadiq Khan’s comprehensive trip to Kabul, high powered US officials have made the first ever formal trip to Kabul and held detailed talks with Afghanistan’s foreign minister.

Ironically, both the developments took place soon after high power discussion on National Security issues in parliament, whereas apparently Prime Minister Shehaz Sharif was the most important figure but internally the whole session was dominated by Chief of Army Staff (COAS) Gen. Asim Muneer. First with help from its most trustworthy Qatar, a US team headed by Ambassador Adam Boehlar visited Kabul and got the release and air lifting of George Glezmann, an American airline mechanic to the United States via Qatar Doha. And on the next day, Sadiq Khan, considered most effective and popular in Afghanistan, landed in Kabul for a three day visit.

Though no further details of Sadiq Khan’s engagements in to Kabul is ascertained but a brief statement, is appearing in Rawalpindi-Islamabad controlled media which states, “Pakis­tan and Afghanistan on Saturday vowed to sustain their diplomatic engagement to address ongoing bilateral challenges, including trade, security and the status of Afghan refugees in Pakistan.” Through such statements, Pakistani officials confirmed only Ambassador Muhammad Sadiq’s meeting with Afghanistan’s Acting Foreign Minister, Mawlawi Amir Khan Muttaqi.

Is there any discussion over the prolonged controversial issue of Durand Line

No one can deny the fact that since the return of Taliban into power in mid of August 2021, Pakistan is a head with a stock of confusions. On one hand like of Mullah Muhammad Omar Akhund, his successor Mullah Haibatullah is reluctant to change mind on prolonged controversial issue of Durand Line and on the other the policy makers in Rawalpindi-Islamabad corridors are going towards isolation as the major global players like US, China, Russian Federation and even European Community succeeded in establishing direct links with Kabul. Pakistan is no longer dependent on the global community in handling issues and matters with Kabul.

Soon after his first ever trip to Kabul after August 15th 2021, former US special envoy Zalmay Khalilzad who was part of Ambassador Adam Boehlar has criticized the Pakistan Army. Through this latest statement, Khalilzad cautioned Pakistan’s government and military, emphasizing that time is running out to prevent further turmoil. It is his second criticism against Pakistan after May 9th 2023 whereas he had backed the deposed Prime Minister. Now the situation is very clear as Zalmay Khalilzad’s status in US society especially in the ruling Republic is very clear. Almost all Afghans, especially his (Khalilzad) long time friends and familiars are now very clear about his next assignments or agenda.

Another stressful issue is the Torkham crossing for trade in Central and South Asian countries

Besides soon after US team’s trip to Kabul, Pakistan has not only ordered reopening of Torkham border, considered most important corridor between the two neighbouring countries but Sadiq Khan in Kabul and Khyber Pakhtunkhwa Governor Faisal Karim Kundi in Peshawar received joint delegations of traders involved in bilateral trade. A report from Kabul revealed, “officials of the Chamber of Commerce and Investment have met with Pakistan’s Special Envoy for Afghanistan Muhammad Sadiq and Obaidur Rahman Nizamani, the head of the Embassy of the country in Kabul and discussed bilateral trade relations and the problems in this area. According to the Chamber of Commerce and Investment Newsletter, Muhammad Younis Momand, Deputy Chief of the Chamber, stressed the importance of the Torkham route for trade in Central and South Asia, which route can connect with other countries in the region like Afghanistan and Pakistan. They have created an increase in grants and by the way, the lockdown can also cause a big loss to the economy of both countries.”

On certain issues, especially Afghans maltreatment, frequent closure of Torkham, imposition of taxes on transit and bilateral trade. Controversial Durand Line and others, Islamabad and Kabul are at loggerhead with each other. 

Though nothing in detail regarding Pakistan’s stance on the issue of terror during his talks with Foreign Minister Mutaqqi appeared in media but Governor Faisal Karim Kundi in his chat with traders repeated, “terrorists are incurring from Afghanistan into Pakistan. 

Afghanistan not only explored alternate trade routes but its sitting rulers made more friends and sympathizers like the US, China and Russian 

Compared to other civil-military officials, Sadiq Khan has long had a realistic approach towards issues with Afghanistan. He believes in talks and dialogues. Unfortunately, high ups occupying important offices in the Rawalpindi-Islamabad corridor are stuck to British colonial rulers’ inherited expansionism based policies towards Afghanistan. Unless and until honouring the importance of talks and consultations and remaining neutral in intra Afghan issues, it could be hard to earn the hearts of Afghans which is a must for tackling the situation that erupted with direct jumping of US and others in the region.

Compared to the past, the regional situation is different. Earlier Pakistan was dealing matters with Afghanistan like a landlocked and under developed country wholly solely depending on Karachi sea port. But now Afghanistan has not only explored alternate trade routes but its sitting rulers made more friends and sympathizers like the US, China and Russian Federation. After the empowerment of Donald Trump, now Washington is making ways and means for converting long time hostilities in friendship with Russia. Similarly growing influence of terror, especially presence of IS-Daesh militants in certain parts of the country, especially along the Pak Afghan border is also much more harmful to the very interests of Pakistan. Instead of remaining hostile to its failed “STRATEGIC Depth” policies inherited by successive military generals, Pakistan must follow the realist politico-diplomatic approaches towards Afghanistan and other neighboring countries.

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