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All posts by LLD - 146. page

SASAC: Not Being Able to Layoff Makes SOE Reform Difficult

Huang Shuhe, a deputy director of the State-owned Assets Supervision and Administration Commission (SASAC) spoke about the difficulty of State-Owned Enterprise (SOE) reform. Huang said, for an enterprise to develop, it has to travel light. SOEs still carry many heavy burdens, such as retired workers and companies running social security. Huang said that during the 2008 financial crisis, none of the central government enterprises laid off employees, although all the Western multinational companies laid people off. This was to maintain social stability. Huang believed that the reform of SOEs still faces many difficulties, as the government has yet to transform its functionalities and the social security mechanism for 5-6 million retired workers is not in place.

Source: China News Service, March 14, 2013
http://finance.chinanews.com/cj/2013/03-14/4643414.shtml

Briefings | | |   Economy/Resources

Chinese-funded Enterprises Made Headway in Europe

On March 15, People’s Daily published an article that gave a detailed account about the expansion of Chinese enterprises in Europe. It mentioned such companies as Haier (in Italy), Shanxi Yuncheng Saueressig Plate-making Co., Ltd (in Spain), Zhejiang Geely Holding Group (in the UK), Liugong Machinery Co., Ltd. (in the Netherlands), Huawei, and ZTE Corporation.

According to the article, as of the end of 2012, the number of Chinese-funded enterprises in Spain reached a total of 34, with the main businesses being in communications, financial services, steel, fishing, air transport, and maritime transport. As of the end of November 2012, cumulative investment from China in Spain amounted to $410 million, including $24.21 million from January to November 2012. In 2011 and 2012, China’s new investment projects in the Netherlands numbered 30 and 31 respectively, expanding to the sectors of energy, construction, finance, and advanced technologies. The total number of Chinese-funded enterprises in the Netherlands is more than 300, with a cumulative total investment of about $30 billion, hiring 7,000 local employees.

Source: People’s Daily, reprinted on Xinhua, March 15
http://news.xinhuanet.com/2013-03/15/c_124460827.htm

Briefings | | |   Geo-Strategic Trend

Yu Zhengsheng: Never Copy the Western Political System

On March 12, Yu Zhengsheng, the 4th ranking member of the 18th Chinese Communist Party’s Politburo Standing Committee and the new Chairman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), gave a speech at the closing meeting of the first session of the CPPCC. He said, "We should comprehensively and accurately study and understand the bright theme, spiritual essence, and strategic planning of the 18th Congress of the Party; comprehensively and accurately study and understand the series of important speeches of General Secretary Xi Jinping; and continuously deepen our understanding of the path of socialism with Chinese characteristics, its theoretical framework, and social system. We must unswervingly adhere to the leadership of the Chinese Communist Party, uphold and improve the multi-party cooperation and political consultation system under the leadership of the Chinese Communist Party, and firmly take the path of socialistic political development with Chinese characteristics. We should never copy the Western political system, always maintain a firm and correct political direction, and consolidate the common ideological and political foundation of the Chinese People’s Political Consultative Conference."

Source: Xinhua, March 12, 2013
http://news.xinhuanet.com/2013lh/2013-03/12/c_114995349.htm

Briefings | | |   Government/Politics

Mainland Expert: Military Spending Growth Not Enough

China’s defense budget for 2013, released on March 5, shows an increase of 10.7 percent over last year. Although the increase has been widely reported in foreign media and some members of the U.S. Congress are concerned, some mainland observers pointed out that China’s military spending growth is moderate.

Ma Gang, a director at China’s National Defense University, believes a country’s military spending mainly is a function of the needs to safeguard national sovereignty and carry out international responsibilities, as well as its economic development. In recent years, with the growing sovereignty and security challenges, the responsibility of defending national interests, the obligations for international security as a permanent member of the UN Security Council, and steady economic development, it is a normal phenomenon for there to be a double digit increase in military spending. Ma said that there is still a gap between the growth in China’s military spending and China’s actual needs. Future military spending growth will still be a function of national security and economic development.

Since the 1990’s, China’s annual defense spending has generally maintained double-digit increases. In 2010, it dropped to 7.5 percent, but double-digit increases resumed in 2011.

Source: People’s Daily, March 8, 2013
http://military.people.com.cn/n/2013/0308/c1011-20720222.html

Briefings | | |   Defense/Military

People’s Daily: U.S. Pushing Global “Cyberspace Arms Race”

On March 8, People’s Daily published an article written by Yang Jian, a scholar at the Shanghai Institute for International Studies, in response to a U.S. security company’s report accusing the People’s Liberation Army unit in Shanghai of engaging in cyberwarfare against American corporations, organizations, and government agencies.

"The U.S. institutions, media, and politicians recently joined hands to stir up the so-called incident of China’s cyberspace attacks on the U.S., provoking distrust  in cyber security among the major powers. The logic and thinking process (behind this accusation) are worrisome. The U.S. is guiding global cyber security to a wrong conclusion."

"The U.S. strategic papers are filled with the wrong idea of seeking superpower status in cyberspace. The U.S. was the first to name allies and potential enemies in their network security strategy documents; the first to set up a network force to develop network operational plans; and the first to introduce the concept of deterrence in cyberspace. The U.S. strategy is to make enemies, cause the deterioration of relationships between the countries, and undermine the basis and atmosphere of international cooperation on cyber security. Advocating cyber warfare destroys the peaceful nature of the Internet. With other countries following the lead of the U.S., a worldwide destructive view of cyber security has developed. In the past two years, South Korea, India, NATO, Germany, Britain, Japan, and Russia have one by one established network forces or developed plans for armed forces of network security. The global arms race on cyber space is about to begin."

"The U.S. has taken a lot of trouble to look for the shadow of the Chinese military. Actually it hopes to implement outdated and harmful cyber security concepts by making an enemy and tracking the evidence. So far, only the U.S. government has initiated cyber attacks against nuclear facilities and network firewalls in countries. In the current round of the so-called China’s cyber attack incident, the U.S. again has provided a wrong presentation, which validates its revengeful actions based on the so-called ‘facts’ recognized by its own domestic organization. The U.S. already played this trick when launching the Iraqi war. The act of making up excuses for its unilateral actions, if spread in cyberspace, will bring catastrophic consequences."

Source: People’s Daily, March 8, 2013
http://military.people.com.cn/n/2013/0308/c1011-20718565.html

Briefings | | |   US-China Relations

New Housing Regulation Triggers Surge in Divorces

On March 1, 2013, China’s State Council issued a new measure to reinforce the control of housing prices, including a capital-gains tax of 20 percent on profits from the sale of a family’s second home.

This provision immediately triggered shock waves in the secondary housing market, leading to many divorces of couples who owned two or more homes. China currently allows a couple with two houses to allocate one house to each at the time of divorce. If a couple intends to sell their second hone without being taxed, they can divorce so that the house to be sold goes to one spouse, who is able to sell that house as the only family home so as to avoid the 20 percent tax. Then the couple can remarry.

The divorce procedure in China is relatively simple. Cities, including Shanghai, Guangzhou, Harbin, and Ningbo, saw a surge in the rate of divorce immediately after the new regulation went into effect. Three years ago, another a policy restriction on the purchase of second homes also led to waves of divorce. In recent years, China’s divorce rate has continued to rise: about 2.87 million couples divorced in 2011, a jump of 7.3 percent over 2010.

Source: BBC Chinese, March 6, 2013
http://www.bbc.co.uk/zhongwen/simp/china/2013/03/130306_property_divorce.shtml

Briefings | | |   Economy/Resources

Sanctioned Chinese Firm Profits from Transactions with Iran

Li Fangwei, also known as Karl Lee, the person-in-charge of the operation of the Dalian Metallurgy & Minerals Co., a firm sanctioned by the U.S. for exporting missile parts to Iran, is still making millions in profit from the company’s transactions. Several officials responsible for overseeing the Western countries and the United Nations sanctions said that, since 2009, when he was sued by the New York District Attorney, Li Fangwei has received at least US$10 million in profit from illegally trading with Iran.

Trade sanctions are the major means for the international community to stop Iran from developing its nuclear weapons program. Li has been accused of continuing his company’s illegal provision of materials to Iran. This may be related to Iran, which is very clever at evading the international sanctions and may also be related to China’s export restrictions policy. Although it is difficult to quantify the support that foreign companies and individuals have provided to Iran’s nuclear and missile program, analysts believe that Iran cannot independently manufacture some important components.

Li told Reuters that Iran continues to propose the commercial requirements to him, but he provides only legitimate goods, such as iron and steel products. Li also denied the charge that he has sold any missiles or nuclear related products since a few years ago, when the United States began the sanctions against Iran. However security officials overseeing the United Nations’ sanctions accused Li of adopting deceptive means to continue these illegal transactions with Iran, including changing the company’s name in order to sell Iran advanced alloys, Chinese or foreign-made uranium enrichment, and missile parts. China’s Foreign Ministry spokesperson said that China has always abided by international regulations on trade restrictions.

Source: BBC Chinese, March 1, 2013
http://www.bbc.co.uk/zhongwen/simp/china/2013/03/130301_china_iran.shtml

Briefings | | |   Defense/Military

Chinese Space Scientist: Chang’e 3 Mission to Launch in 2013

China’s National Space Administration has scheduled a launch of the Chang’e 3 for a lunar exploration mission in late 2013. According to Ye Peijian (叶培建), a space scientist and the chief engineer for the program, the mission will operate by incorporating a robotic lander and a rover; it is part of the second phase of the Chinese Lunar Exploration Program.

This will be China’s first lunar rover and the first spacecraft to make a soft landing on the Moon since the Soviet Luna 24 mission in 1976. It is named after Chang’e, the Chinese goddess of the Moon and is a follow-up to the Chang’e 1 and Chang’e 2 lunar orbiters. Chang’e 3 will perform tasks that include a soft landing on the Moon, lunar surface exploration, survival on the lunar surface, deep space communications, remote operations, and a carrier rocket directly entering the Earth-Moon transfer orbits. The Chang’e 3 lander is said to be carrying an astronomical telescope and  an extreme ultraviolet camera. The rover is said to be carrying radar for lunar exploration.

Source: Xinhua, March 3, 2013
http://news.xinhuanet.com/2013lh/2013-03/03/c_114868837.htm

Briefings | | |   Defense/Military