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Red Flag Manuscript: State-Owned Enterprises (SOEs) Are the Bellwether for the Rise of the Economy

[Editor’s Note: The U.S.-China Economic and Security Review Commission was mandated in the year 2000 to report to Congress annually on the security implications of trade with the People’s Republic of China. It recently published its 2012 report, "An Analysis of Chinese Investments in the U.S. Economy." [1] Bill Gertz discussed some of the report’s conclusions in an article he wrote for the Washington Free Beacon, "Congressional Report: Chinese government-controlled enterprises threaten U.S., world economy." Gertz summarized from the

report, "The Chinese system of state capitalism or ‘capitalism with Chinese characteristics’ has blocked many of the potential benefits of a free market, not only in China, but among China’s trading partners," "The state-owned sector in China can undercut prices charged by privately held competitors globally due to a variety of subsidies granted by the Chinese government: low-interest-rate loans; below-market-rate land, fuel, and electricity; special exemptions from environmental and labor regulations; tax abatements and preferences." [2]

Recently, the Chinese Communist Party (CCP) agreed that having the backing of state funding and favorable government policies gives China’s SOEs a huge economic advantage. Hu Angang, Director of the Center for China Studies, Tsinghua University, wrote an article on for Red Flag Manuscript, a publication of the Central Committee of the CCP in which he argued that, although China’s SOEs are a form of enterprise and compete in the global market, they differ greatly from Western enterprises in that they are state-owned and under the leadership of the CCP. China’s SOEs have the advantage of being backed by state-owned capital and, as such, have the ability to generate strong competition to rival the world’s top 500 enterprises. They should be the leading force for China’s "going abroad" strategy. The following are translated excerpts from the article.] [3]

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Qiushi: China’s Grain Security

[Editor’s Note: Qiushi Online published an article titled “China’s Strategy on Grain Security.” It discussed the national security issues related to China’s food supply and considered several questions. Will China itself be able to produce the agricultural products needed to feed its population? How should China balance the production of different agricultural products? How should it deal with foreign investments and develop domestic farmers? These issues are discussed in the following excerpts translated from the article.] [1]

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China’s Economic and Social Conflicts Nearing a Crisis

[Editor’s Note: Caijing Magazine recently interviewed Professor Wu Jinglian, a senior research fellow at the Development Research Centre of the State Council of the People’s Republic of China. During the interview, he stated that China’s economic and social conflicts have reached a critical point and that China must press forward with further reform to establish and improve a market economy that is based on competition. He also criticized China because it has, in recent years, strengthened the government’s and the state-owned enterprises’ (SOEs) "control power." The following are excerpts from the interview.] [1]

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Deng Yuwen: The Political Heritage of Hu and Wen

[Editor’s Note: In anticipation of the transition of power from Hu Jintao to Xi Jinping, Study Times’ Deputy Copy Editor Deng Yuwen published a three-part series on the political heritage of Hu Jintao and Wen Jiabao. In the first part, he praised Hu and Wen’s achievements. [1] In the second part, he listed ten major problems left in their wake and stated, “In their ten years in power, many huge problems were created and the problems outnumbered the achievements.” [2] In the third part, he advocated for a transition in the economic structure and for political reform. [3] Shortly after they were published, his articles were taken down from media sites in China. The following is a translation of part 2 of his article.]

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Does Beijing’s Hard-Line Stance over the Diaoyu Islands Dispute Target the United States?

[Editor’s Note: Over the years and by agreement, China and Japan have remained silent on the Diaoyu (Senkaku) Islands issue. When Japanese Prime Minister Yoshihiko Noda announced that the Japanese government would make a bid to buy the islands, the Chinese government took a strong stance on the situation even to the point where it demonstrated a willingness to start a war. A number articles in China’s state-run media see the “black hand” of the United States behind the scenes, “fanning the flames” of discord. The following are excerpts from articles that express China’s view of and response to what it sees as U.S. involvement.]

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Nanfang Weekend: The First Massive Layoffs in China

[Editor’s Note: Nanfang Weekend reported that, due to the reduction in the rate of growth of China’s economy, Chinese companies have started their first round of massive layoffs. These companies range from the global ones to Chinese brand names and from state-owned enterprises to local small businesses. Although the layoffs are taking place quietly in many places, they are widespread and their impact has been devastating. The following is a translation of an excerpt from the article.] [1]

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The Dark Side of China’s State-Run Sports Engine

[Editor’s Note: China put on a great show and won many medals at the London Olympics. What may not be well known to Westerners, or even to many Chinese is that a large number of Chinese athletes have experienced or are likely to experience dark endings. The tragedies we know about may just be the tip of the iceberg in the Chinese state-run sports engine. An article by Internet author Zhao Zhongkang, published by Radio France International (RFI), relates the experiences of many of China’s most successful athletes. The following is a translation of an excerpt from that article.] [1]

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