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Xinhua: Uncertainty about the Chinese Economy Lowers Confidence

Xinhua recently reported on some research that the firm Grant Thornton, an international organization of independent audit, tax, and advisory firms, had done on the business indicators of a number of Chinese companies. The study titled, International Business Report (IBR), revealed that 40 percent of the surveyed Chinese companies found the uncertainty that the economy faced was having a major impact on the growth of their businesses. The research results also showed that four percent of the companies felt optimistic about the future. This number had dropped 21 percent from the first quarter to the second quarter of this year. The study indicated that expectations of company sales, product prices, export volume, hiring plans, and profits had all dropped from the first quarter. Especially for the indicators of exports, employment, and profitability, the companies’ level of confidence dropped to a two-year low. Investments in research and development declined by 14 percent in the past 12 months; most of the companies were increasing their cash reserves. Grant Thornton concluded that there is no clear sign of an economic recovery for the Chinese market. The same report for the U.S. market showed a dramatic increase of 24 percent in the confidence level.

Source: Xinhua, July 11, 2013
http://news.xinhuanet.com/fortune/2013-07/11/c_116499670.htm

Briefings | | |   Economy/Resources

Drop in China’s Foreign Trade Exacerbates Fears of Economic Slowdown

On Wednesday, July 10, the General Administration of Customs (GAC) released data showing that, in June, the total value of China’s imports and exports was two trillion yuan (US$0.3 trillion), down two percent from the same month last year. The decline in exports was as high as 3.1 percent. The data was beyond analysts’ expectations. Many expected China’s exports to grow at about four percent in June. Meanwhile the imports in June also fell by a lesser amount of 0.7 percent, indicating a weakness in China’s domestic demand.

Zheng Yuesheng, an official at GAC, worries about the severe challenges that China’s foreign trade faces. He predicted more difficulties in the second half. Zheng suggested that China needs to adjust the structure of its foreign trade to protect its products in the global market.

Source: BBC Chinese, July 10, 2013
http://www.bbc.co.uk/zhongwen/simp/china/2013/07/130710_china_export.shtml

Briefings | | |   Economy/Resources

Xi Jinping Seeks Unity and Discipline among Politburo Members

Xinhua News Agency reported on Tuesday, June 25, that, at a special meeting of the Politburo, the Chinese Communist Party’s chairman Xi Jinping said, "To see whether the Politburo is strong or not and whether the Politburo members are strong or not, one has to look first at whether they are politically strong or not. To strengthen the work of the Politburo, we must give top priority to ideological and political development."

Xi urged the Politburo to "strengthen the study of Marxist theory, in particular, Deng Xiaoping Theory, the thoughts of the ‘Three Represents,’ and the scientific concept of development, so as to grasp the scientific world view and methodology, be equipped with ideological weaponry, remain firm with the ideals and faith, and strengthen political sensitivity and discrimination," in order "to understand correctly and to firmly safeguard the bigger picture of the Party and the state, of reform, development, and stability, of the Party’s leadership and the security of the socialist regime, and of the unity of the Party and the whole nation."

He also asked the Politburo members to play an exemplary role in "strictly disciplining their relatives and staff members, refraining from abusing power, and not seeking personal privileges."

Source: BBC Chinese, June 25, 2013.
http://www.bbc.co.uk/zhongwen/simp/china/2013/06/130625_xijinping_speech.shtml

Briefings | | |   Government/Politics

Overseas Chinese Media Share the “China Dream”

On June 8 in Xining, the capital city of Qinghai Province, He Yafei, the deputy director of the Overseas Chinese Affairs Office under the State Council, and Liu Beixian, President of the China News Agency, met with personnel from overseas Chinese language media for a face-to-face discussion. The overseas Chinese media executives from Canada, France, Germany, New Zealand, Malaysia, and other countries shared their "China Dream."

The "China Dream" is not a narrowly defined dream of the Chinese people, but the dream of all mankind and of the whole world," said Liu Yang, the President of VCChina, a Belgian Chinese radio station. Gao Jin, the chairman of the Romania based Europe Bridge Media (欧桥传媒) also believed that overseas Chinese should combine the "China Dream" with the dream of the hosting countries. He Wanmi from Malaysia’s Sin Chew Daily (星洲日報) said, "I am a third generation Chinese in Malaysia. My fellow Chinese there are deeply rooted in the local country, but we still identify ourselves as part of the Chinese culture." Chen Weirong, the President of New Zealand’s Chinese Herald (中文先驱报) said that New Zealand’s Chinese care very much about the "China Dream." Some proposed that Chinese characters are an important carrier of Chinese culture and suggested establishing a "Chinese Character Day."

He Yafei offered three wishes for the overseas Chinese media: that the Chinese media objectively report China and tell the "China story" and the "China Dream" to the world; that Chinese media become the promoters of the Chinese culture and national spirit; and that the Chinese media become the bridge and pioneers in public diplomacy to facilitate communication between China and other nations.

Source: China News Service, reprinted on the website of the Chinese Communist Party’s United Front Work Department, June 19, 2013.
http://www.zytzb.cn/publicfiles/business/htmlfiles/tzb2010/S2012/201306/740513.html

Briefings | | |   Geo-Strategic Trend

In 2012, 36 Provincial Governments Had Debts Totalling 3.85 Trillion Yuan

China’s National Audit Office recently released the results of the debt audit of 36 provincial level governments. As of the end of 2012, these 36 governments had a debt balance that had reached 3.85 trillion yuan (US$0.63 trillion). This represents a 440 billion yuan (US$71.7 trillion) or 12.9 percent increase over the level in 2010. An official from the National Audit Office observed that the pace of current local governments’ debt growth is too high and that some regions and industries are facing a looming debt crisis.

The audit results highlighted four aspects of the debt problem. The first is the high debt growth of some provincial capital cities: 14 provincial capital cities have 18.17 billion yuan (US$2.96 billion) in overdue debt. Second is the decline in the growth of land sale revenues. Third, in some areas, the debt for highway construction has grown rapidly. Fourth, due to the cancellation of road tolls, some governments face greater pressure for debt repayment.

Source: Xinhua, June 13, 2013
http://news.xinhuanet.com/2013-06/13/c_124847326.htm

Briefings | | |   Economy/Resources

People’s Daily: China’s Talent Loss Tops the World

After a screening of 1,907 of the world’s top technologically innovative, talented people in six fields, including biological and biochemistry, computers, physics, agriculture, mathematics, and chemistry, the Chinese Academy of Sciences found that China has the leading edge in physics, mathematics and computer science. However, the number of China’s most talented who have been lost tops the world. An average of 87 percent of those in the science and engineering fields have chosen to stay overseas. An official from the Central Talent Work Coordination Group Office pointed to several problems that China has: a shortage of high-level, innovative, creative talent; a lack of innovation capabilities, and a mismatch between the demand for and the supply of talent.

In this current "war for talent," many developed countries are using immigration reform to attract or retain talented people. In recent years, nearly a million overseas Chinese students have chosen to return to China under the "thousands of people plan," including over twenty thousand with high-level talent.

Source: Xinhua, June 6, 2013
http://news.xinhuanet.com/2013-06/06/c_124820431.htm

Briefings | | |   Economy/Resources

Expert Blames SOE’s Privileged Status for New College Graduates’ Low Employment

The year 2013 has seen the largest number of college graduates since 1949. With 6.99 million new graduates, there were 190,000 more that last year. However, the rate of employment for these graduates is less than 30 percent. In fact, a large number of small and medium sized enterprises (SMEs) need college students, but many students do not want to work at SMEs.

Zhang Weiying, a prominent Chinese economist and  head of the Guanghua School of Management at Beijing University, attributed the mismatch in the Chinese job market to the ingrained notion that only a job at a state-owned enterprise (SOE) is secure; it is called the "iron rice bowl," whereas a job with a private enterprise is only good for a temporary situation. Zhang believed that the government has set up a large number of SOEs; they receive more resources and better treatment than private enterprises. If SOEs did not have such an identity, employment opportunities would be relatively fair and students would not have to pick and choose.

A media survey found that many students use personal connections to hunt for jobs at SOEs. Many employers’ hiring decisions are based upon the applicant’s connections rather than their capabilities. The students who get into SOEs through personal connections create a new form of nepotism. Beijing News conducted a recent survey which showed that about 21.5 percent of those surveyed admitted this regarding the question, "Have you used personal connections when looking for a job?"

Source: Beijing News, carried by Caijing magazine, May 30, 2013
http://economy.caijing.com.cn/2013-05-30/112843978.html

Briefings | | |   Economy/Resources

Qiushi Article Criticizes Constitutional Governance as Belonging to Capitalism

Red Flag Manuscript, the bi-weekly publication of the Chinese Communist Party’s Central Committee’s Qiushi Journal, published an article that criticized Constitutional Governance, saying its ideals and key institutional elements “only belong to capitalism and the dictatorship of the bourgeoisie."

Yang Xiaoqing, a law professor at Renmin University of China, authored the article. He compared Constitutional Governance to the Chinese regime’s "Socialistic People’s Democracy." For example, the former is based upon private ownership and a market economy, while the latter is based on an economy of public ownership; the armed forces under Constitutional Governance are neutral and belong to the government, while the military in the "Socialistic People’s Democracy" is under the absolute leadership of the Communist Party. The author believes that "Constitutional Governance, as a comprehensive governance system, is not universally applicable" and that "its key institutional elements and ideals do not fit the socialist countries." The article also disapproved of Constitutional Governance as being deceptive. "The freedom and democracy on the surface cover up its essence, which is the freedom and democracy of the bourgeoisie and the dictatorship of the bourgeoisie." "Constitutional Governance boasts of a separation of powers with checks and balances, but, in reality, it is not a true separation of powers."

The article concluded that China’s "People’s Democracy" must not be called "socialist constitutional governance" because the people’s democracy and constitutional governance are two fundamentally different political systems. In the end, constitutional governance does not fit China’s national conditions.

Many Chinese Internet users criticized the article. One user responded, "It seems the people at high levels have never thought about really implementing the rule of law, democracy, constitutional governance, and human rights." Another said, "The root of China’s problems is the absence of constitutional government. Now someone blatantly claims, on one side, that a constitutional government does not fit China, but, on the other, it cannot really solve the increasingly serious social crisis. Either go for constitutional government, or go for the guillotine." Another one said, "The core of constitutional governance is democracy, the rule of law, and human rights. It is in favor of limiting the government to protect the rights of citizens. If one actually puts a capitalistic label onto democracy and human rights, that amounts to covering up the reality with its own ideology."

Source: BBC Chinese, May 21, 2013
http://www.bbc.co.uk/zhongwen/simp/china/2013/05/130521_china_capitalism.shtml

Briefings | | |   Government/Politics