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Battling Corruption with Chinese Characteristics

Yang Dacai, 55, head of the Shaanxi Provincial Bureau of Work Safety, was grinning in a photo taken after he arrived at the scene of a deadly traffic accident on Sunday in Yan’an, Shaanxi. Thirty-six people were killed when a bus rammed into a truck carrying a tank of methanol and caught fire. The photo triggered an online wave of criticism, which grew in strength when photos of Yang wearing five different watches, including Rolex, Mont Blanc and Radar, were posted online.

Although Yang defended his innocence claiming he had "used legal income" to buy them, the Party Discipline Inspection Commission of Shaanxi started an investigation. On Thursday, however, new photographs of Yang wearing four other watches appeared online. Experts identified those watches as two Rolexes, a Diagono by Bulgari, and a Constellation by Omega.

In recent years, a number of corrupt officials were uncovered via the Internet. Netizens accidentally ran across another official in Nanjing city who was found to be smoking 1,500-yuan cigarettes. This led to a series of other charges and, in 2009, he was sentenced to 11 years in prison.

Beijing Institute of Technology professor Hu Xingdou said it involves “Chinese characteristics” to use Internet exposure to sack corrupt officials. It is also unfortunate that other conventional weapons against corruption, such as a public declaration of an official’s personal property, checks and balances of power, and monitoring by a free media, are not in place.

Source: Voice of America, September 6, 2012
http://www.voachinese.com/content/chinas-grasping-officials/1500248.html

Briefings | | |   Government/Politics

PLA Daily: U.S.-Japan Security Treaty Can’t Be a Protecting Shield

On August 29, People’s Liberation Army Daily, the official mouthpiece of the Chinese military, published a commentary on the recent renewed dispute over the Diaoyu Islands (called the Senkaku Islands in Japan), titled “Is the U.S.-Japan Treaty of Mutual Cooperation and Security a protecting shield for Japan?” The article stated that, although the United States holds that the issue of the Senkaku Islands falls within the scope of the Article 5 of the 1960 U.S.-Japan Treaty of Mutual Cooperation and Security, the U.S. government will not dispatch troops to solve the conflict.

The article emphasized, “The fact that the Diaoyu Islands are China’s territory will not change in the slightest because of any party’s attempts to interfere. The Chinese government and its people will not back off because of a so-called treaty or certain people’s position. It is unwise for the Japanese to provoke incidents again and again in hopes of having the protection of the U.S.-Japan Treaty of Mutual Cooperation and Security. What is the most critical is that, in the face of the Chinese people’s righteous and determined resolution, no treaty can protect the Japanese from violating the interests of others.”

Source: PLA Daily, August 29, 2012
http://www.chinamil.com.cn/jfjbmap/content/2012-08/29/content_13331.htm

Briefings | | |   Geo-Strategic Trend

International Herald Leader: Water Lilies û the U.S. Overseas Military Bases in Asia

The International Herald Leader, a publication under the state’s Xinhua News Agency, published an article on August 17, 2012, pointing to the expansion of U.S. military bases in the Asia Pacific region. The article said, “Over the past decade, the Pentagon has quietly transformed its overseas military bases. Compared to its military fortresses during the Cold War era, the new generation of small-scale bases and garrisons is limited in number, but like water lilies quietly surfacing in the pond, frogs can use them as a springboard to jump for prey in the distance. During its strategic shift to Asia, the Obama administration has been trying to multiply the Pentagon’s ‘water lilies’ throughout the whole region.”

The article mentioned a few hot spots where the “water lilies” will be grown or strengthened: Thailand’s U-Tapao Royal Thai Navy Airfield, Vietnam’s Cam Rahn Bay, the Philippines’s Subic Bay and Clark Air Base, Tinian Island in the Northern Mariana Islands, South Korea’s Jeju Island, and Australia’s Cocos Islands and the port of Darwin, as well as small-size military bases in Indonesia, Malaysia, and Brunei.

The article concluded that the goal of establishing these mushrooming military bases around Asia and the Pacific is to isolate and contain China.

Source: International Herald Leader, August 17, 2012
http://ihl.cankaoxiaoxi.com/2012/0817/79780.shtml

Briefings | | |   US-China Relations

China’s Growing Young Shoppers of Luxury Goods

As China has become the world’s second largest market for luxury goods, the population of young consumers has steadily been growing, particularly when compared to the small number of affluent luxury consumers in Europe and the United States who are mostly over the age of 40. According to the World Luxury Association (WLA), the average Chinese consumer of luxury goods is 15 years younger than the European consumer, and 25 years younger than the American consumer. Ouyang Kun, CEO of the WLA’s China Office, said that more than half of China’s luxury goods consumers have monthly earnings of about 10,000 yuan (US$1,570) with an age between 25 and 28.

“The world’s youngest luxury goods consumers are in China. The vast majority of them received their money from their parents.” said Ouyang Kun. As China’s first generation of entrepreneurs didn’t spend their time enjoying their lives because they were starting and growing their businesses, they then passed that wish on to their children, who now own the best phones, the best bags, and the best pens. A large factor affecting this trend is the way the offspring of millionaires and billionaires compare themselves to others. They use the possession of luxury goods as a way to identify themselves and show themselves off, as well as their family’s wealth and social status, while European and U.S. parents rarely buy luxury goods for their children.

Source: People’s Daily, August, 15, 2012
http://finance.people.com.cn/n/2012/0815/c1004-18745005.html

Briefings | | |   Economy/Resources

CRN: Foreign Exchange Reserves should Introduce Privatization

China Review News (CRN) recently published an article discussing how China should manage its large foreign exchange reserves. The article started by comparing China with Japan and Germany, two countries that also have large foreign exchange reserves. The ratio of net privately owned assets versus total foreign exchange reserves in Japan is 56%; in Germany it is 86%; and in China it is 50%. The article suggested that China should establish new policies to allow privatization of the ownership of foreign exchange and assets. The author offered four actionable items: (1) establishing a foreign currency based bond market that limits trading to domestic customers; (2) allowing foreign companies to issue bonds in Chinese currency; (3) with some restrictions, allowing domestic residents to invest directly in foreign markets; (4) loosening up the restrictions on Chinese companies’ international investments. The author expressed the belief that a certain level of privatization of foreign exchange reserves will lower the government’s foreign exchange management risks and will also lower the pressure of issuing more Chinese currency.

Source: China Review News, August 6, 2012
http://www.zhgpl.com/doc/1021/9/0/1/102190145.html?coluid=53&kindid=0&docid=102190145&mdate=0806070937

Briefings | | |   Economy/Resources

Qiu Shi: Chinese Economic Trend from a Global Angle

Qiu Shi, a magazine of CCP Central Committee, recently published an article discussing the direction in which China’s economy is headed, given the background of the global downturn. The author expressed the belief that, although the global economy seems to be recovering slowly, the long term expectations are that it is moving in a negative direction. The world economy currently is a mixed bag of a number of pros and cons, such as uncertainty in Europe, lowered global inflation, capital outflows in emerging countries, and global investments shrinking in value. Impacted by the world economy, China faces some challenges: (1) the high pressure of a downturn; (2) small businesses are still struggling; (3) food prices are fluctuating significantly. The author suggested that China should take positive actions: (1) government investments should continue; (2) the government should support strategic new industries; (3) Mid-Western provinces will have more growth based on industries that have moved from the east; (4) domestic consumer spending should be encouraged; (5) second half imports and exports will speed up. The article concluded that the Chinese economy still has hope despite its difficulties.

Source: Qiu Shi, August 2, 2012
http://www.qstheory.cn/jj/jjyj/201208/t20120803_174163.htm

Briefings | | |   Economy/Resources

Chinese Scholar: Navy Needs 3-5 Carrier Battle Groups

In an article published on Globe Magazine, a publication under the official Xinhua News Agency, Wang Haiyun, a major-general, former diplomat, and scholar at a government think tank on China-Russian relations, proposed to equip the Chinese navy with three to five carrier battle groups.

“Considering its degree of modernization and oceanic combat capability, the Chinese navy can only be called a ‘near-shore navy’ and ‘offshore navy,’ which can only meet the needs of the coastline and offshore defense. In order to maintain the security of three million square kilometers of sea territory effectively, we must build a more powerful navy.”

“Over the years, the United States, Japan, and other countries have subjected our country to strategic containment. In the past two years, the U.S. has announced a high-profile ‘return to the Asia-Pacific’ by building an alliance system of our neighboring countries with a focus on the oceans. Japan was also eager to organize a ‘value based alliance’ as the vanguard of the U.S. Facing this relatively serious maritime security threat, to deal with the challenges, stabilize the peripheral security environment, and break the US-Japan containment, we must concentrate on the ocean.”

“Another related problem is: with economic development and the rising scale of imports of resources and energy and exports of all kinds of goods, we must place an ever growing reliance on our maritime transport and our ability to secure our maritime transport. With the instability of a few countries at the global choke-points of maritime transport, if China does not have the military capability of sea deterrence and handling emergent events, it will be difficult to avoid being subject to the blackmail of certain countries.”

“As a world power with a growing global interest and responsibility, we need to push for an early start to the construction of the ‘deep blue navy.’ It is essential to build, as quickly as possible, several modern aircraft carrier battle groups with comprehensive combat capability. Neither oceanic territory defense nor military power delivery can be achieved without these aircraft carrier battle groups. As for the number, with our vast ocean territory and difficulties in carrying out our responsibilities as a global power, we cannot do without three to five aircraft carrier battle groups.”

Source: Globe Magazine, July 31, 2012
http://news.xinhuanet.com/globe/2012-07/31/c_131737507.htm

Briefings | | |   Defense/Military

Scholar Details U.S.’s Short-term Strategy against China

In an op-ed published on People’s Daily, a Chinese scholar laid out the strategies the U.S. will use against China over the next five to ten years.

“… the United States will make greater use of non-military means to delay or interfere with the process of China’s rise in order to reap strategic benefits, revive its national strength, and ensure its hegemonic position. Its main tactics will include: comprehensively breaking into China’s tertiary industries to reap huge financial benefits while controlling the lifeline of the Chinese economy; using the yuan exchange rate as a breakthrough point and opening up China’s financial and insurance market as an interim goal; under the banner of ‘Internet Freedom,’ abandoning the traditional ‘top-down’ mode of promoting democracy in China, and, instead, aiming to infiltrate the grassroots of Chinese society with a ‘bottom-up’ approach, allying with human rights lawyers, underground religions, political dissidents, Internet opinion leaders, and marginalized social groups, to create conditions for ‘change’ in China; enhancing its partnerships and strengthening its relations with allies; sowing discord between China and North Korea, Pakistan, and Burma; re-launching U.S.-Russia relations, so as to put China in a diplomatically disadvantageous position; weakening the external environment for China’s rise and squeezing the strategic space for China’s rise; using issues in the ‘global domain’ such as ‘sea, air, sky, and web’ as the starting point to promote related dialogue mechanisms and develop guidelines so as to essentially weaken the strategic challenges from China in the above areas.”

The article did not give the name of the author, but identified him as Director of the Institute of American Studies under the China Institute of Contemporary International Relations.

Source: People’s Daily, July 31, 2012
http://ccnews.people.com.cn/n/2012/0731/c141677-18636091.html

Briefings | | |   US-China Relations