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China to Launch Comprehensive Financial Reform Pilot Project in Wenzhou City

On March 28, 2012, the State Council executive meeting approved the implementation of the “Overall Program of Comprehensive Financial Reform Pilot Zone in Wenzhou City of Zhejiang Province,” to implement the decision to establish a pilot project of comprehensive financial reform in Wenzhou City. The meeting proposed to carry out comprehensive financial reforms in order to effectively solve the outstanding problems with economic development in Wenzhou and to guide the development of private financing to enhance the ability of financial services to contribute to the real economy. The program has an important exploratory significance as it may lead to the country’s financial reform and economic development. 
In this regard, the meeting proposed to accelerate the development of new financial organizations, to encourage and support private capital to participate in the reform of the local financial institutions, and to launch new financial organizations such as village banks, mortgage companies, and rural fund cooperatives. The meeting proposed, as part of the pilot project, to create and develop financial products and services for small and micro enterprises and for the agricultural sector.
Source: Xinhua, March 29, 2012
http://news.xinhuanet.com/fortune/2012-03/29/c_122901535.htm
Briefings | | |   Economy/Resources

Party’s Power Struggle Extends to China’s Top Cop

After Bo Xilai was ousted from his position as Chongqing’s Party chief, speculation has been running high on the next target, Zhou Yongkang, Bo’s patron at the Politburo Standing Committee. They are part of the same Jiang faction, Party seniors who remain loyal to former President Jiang Zemin instead of current leader Hu Jintao.

Zhou, one of the nine-member Politburo Standing Committee and the chief of the Party’s Political and Legislative Affairs Committee (PLAC), controls the police, the Armed Police, the courts, and the procuratorate—nearly everything having to do with law enforcement. Zhou has been China’s top cop for a long time—he has headed the PLAC since 2007 and before that was the Minister of Public Security. Bo was Zhou’s handpicked successor to head the PLAC.

On the evening of March 21 Party mouthpiece Xinhua announced that the PLAC would hold a nationwide training session, the first meeting of which would take place on March 26. However, on March 19 when Zhou held a full meeting of the PLAC, he never mentioned that a nationwide training would take place in one week. Also, the announcement on March 21 did not mention Zhou himself. However, the announcement did mention Party head Hu Jintao. The training session would be devoted to the study of Hu’s contribution to CCP ideology, the theory of Scientific Development, which is considered a sign of paying loyalty to Hu.

Also on March 21, the Financial Times quoted “one person with close ties to China’s security apparatus” as saying “Mr Zhou had been ordered not to make any public appearances or take any high-level meetings and was ‘already under some degree of control.’”

On March 21, Hong Kong’s Apple Daily reported multiple arrests of top figures. The paper quoted Wu Guancong, a CEO of Guangzhou Sports Development Company, as saying a person from Beijing with inside information told him that the Party Central had a severe split regarding how to handle Bo Xilai. “Wen Jiabao and Zhou Yongkang had a serious conflict,” Wu was quoted as saying. “I heard that the gang of four [of the Jiang faction], Bo, Zhou, Jia (Qinglin), and Li Changchun, have all been sacked.”

Source:
The Epoch Times, March 22, 2012
http://www.theepochtimes.com/n2/china-news/zhou-yongkang-lost-power-struggle-say-chinese-netizens-209107.html
Financial Times, March 21, 2012
http://www.ft.com/intl/cms/s/0/650bb0f6-735f-11e1-aab3-00144feab49a.html#axzz1poJYt4qe
Apple Daily, March 21, 2012
http://hkmagazine.net/news1/apple/art_main.php?iss_id=20120321&sec_id=15335&art_id=16175010

Briefings | | |   Government/Politics

Bo Xilai Removed from Chongqing Leader Post

State news agency Xinhua reported that China has removed prominent politician Bo Xilai from his post as Chongqing’s Communist Party leader. Vice Premier Zhang Dejiang will replace Bo, said the Xinhua report.
This is another major development following last month’s scandal involving Bo’s former chief of police, Wang Lijun. It began when Wang, the police chief Bo had promoted, spent a day at the US Consulate in Chengdu. Chinese security forces from Beijing detained him when he came out. Although Bo was not formally linked to this case – and denied he was involved – many believed it would tarnish him.
China’s state-run Xinhua said only that Bo has been replaced as Party chief in Chongqing. The move came a day after the end of the country’s annual parliamentary session, the National People’s Congress (NPC), where Bo’s absence from a meeting sparked speculation about his future. After a long silence, he spoke last week about the incident with his ex-police chief, answering questions from journalists at a meeting on the sidelines of the NPC. He said he never imagined Wang would run off. Speaking at a meeting of Chongqing delegates, Bo said that it came suddenly. "I feel like I put my trust in the wrong person," he added.
Source: Xinhua, March 15, 2012
http://news.xinhuanet.com/politics/2012-03/15/c_2111657329.htm
Briefings | | |   Government/Politics

SCMP: Hu Brands Former Chongqing Police Chief a Traitor

There has been a new development in the case of Wang Lijun, the former Chongqing police chief and deputy mayor who sought asylum a month ago at the United States consulate in Chengdu, Sichuan Province. According to the South China Morning Post, a source close to the Chinese People’s Political Consultative Conference (CPPCC) said that “On Saturday evening, President Hu Jintao issued an internal briefing to the Communist Party members among the CPPCC delegates, telling them that Wang was a traitor.”

“A government source in Chongqing took a similar stance yesterday, saying: ‘All officials above the prefecture level in Chongqing were told the day before yesterday [March 4] that Wang had betrayed his country.’”

When interviewed by Hong Kong based Phoenix TV at the Great Hall of the People, where the session of the National People’s Congress and the People’s Political Consultative Conference is held, U.S. Ambassador to China, Gary Locke, repeated the U.S. line on the deputy mayor. "He came in for a regularly scheduled meeting," Locke said. "He later left of his own accord."

Source: South China Morning Post, March 7, 2012
http://www.scmp.com/portal/site/SCMP/menuitem.2af62ecb329d3d7733492d9253a0a0a0/?vgnextoid=0d5ea7bb8d8e5310VgnVCM100000360a0a0aRCRD&ss=China&s=News
Phoenix TV, March 5, 2012
http://v.ifeng.com/news/mainland/201203/deec6057-a9ce-4c1c-8196-096445e3221e.shtml

Briefings | | |   US-China Relations

2011 Saw Huge Growth in Central Government Enterprises

A Xinhua report revealed some statistics on the 2011 performance of China’s state-owned enterprises that are under the central government, or central government enterprises. (State-owned enterprises include those under the central government, provincial government, and city government, among which those under central government are the largest in size.)

In 2011, these enterprises achieved an operating revenue of 20.2 trillion yuan (US$3.2 trillion), up 20.8% over 2010; a net profit of 971.3 billion yuan (US$154 billion), an increase of 6.4%; and tax payments of 1.7 trillion yuan (US$0.27 trillion), up 19.7%; accounting for about one sixth of the national tax revenue. As of the end of 2011, the asset size of the 117 central government enterprises reached 28 trillion yuan (US$4.4 trillion), up 14.9 percent; with net assets of 10.7 trillion yuan (US$1.7 trillion), an increase of 11.4%. Among the 2011 Fortune 500 companies, 38 are China’s central government enterprises, an increase of eight over 2010.

For the first 11 months of 2011, those enterprises’ overseas operating revenues reached 3.4 trillion yuan (US$0.54 trillion) with a profit of 128 billion yuan (US$20.3 billion), an increase of 30.7% and 28% respectively. The growth rate significantly exceeds that of their domestic operations.

Source: Xinhua, February 28, 2012
http://news.xinhuanet.com/2012-02/28/c_111577568.htm

Briefings | | |   Economy/Resources

CNOOC in Joint Venture on Uganda Refinery

According to a Xinhua article published on February 21, 2012, state owned China National Offshore Oil Corp (CNOOC), along with Anglo-Irish Tullow Oil, and France’s Total, will invest in an oil refinery in the Lake Albert rift basin in western Uganda. The projected cost is $1.5 billion. The report said that the three companies investing in the refinery will have a one-third interest in each of the basin’s three blocks. Tullow said Tuesday that it had finalized a long-delayed $2.9 billion sale of two-thirds of its Uganda oil licenses to Total and CNOOC. The group will now focus on a $10 billion plan to start pumping oil from huge reserves discovered on the shores of Lake Albert. Early production is scheduled to start in 2013 before ramping up to a major production phase in 2016.

Source: Xinhua, February 21, 2012
http://news.xinhuanet.com/2012-02/21/c_122734986.htm

Briefings | | |   Geo-Strategic Trend

Chinese Vice Premier Li Keqiang’s Article on Boosting Domestic Demand

On February 16, Li Keqiang, China’s Vice Premier, who is discussed as the likely successor to Wen Jiabao as Premier, published a feature article in the Chinese Communist Party’s flagship publication Qiushi Journal. The article elaborates on China’s 2012 national economic strategy with a focus on boosting domestic demand by urbanization.

Li points to three “structural problems” in the Chinese economy: First, a slowdown in the drive for economic growth. “While the external demand declines, factors restricting the growth of domestic demand are also increasing. It is difficult for people’s income to maintain a rapid growth and Chinese enterprises’ ability and willingness to invest has waned. There are many obstacles to expanding private investment.” Second, there are many factors that drive up prices. “They include the upward pressure on production costs caused by labor, land, energy resources, and other production factors; the impact of inflation on the importation of bulk commodities in the international market, as well as the effect of the deepened price reform of raw materials.” Third, the problem of unbalanced, uncoordinated and unsustainable development is still prominent.

Source: Qiushi, February 16, 2012
http://www.qstheory.cn/zywz/201202/t20120216_138924.htm

Briefings | | |   Economy/Resources

Real Name will be Required to Use Microblogs

PCOnline recently reported that, starting on March 16, 2012, the four primary microblog providers will require users to register with their real names. Anonymous users can only browse the microblogs but cannot submit their own. In the new user registration process, the user’s name and National ID number will be checked against the national police verification system. An initial trial of the “Real Name System” took place in Beijing and it is now being deployed nationwide. Users expressed concern over the new system, mainly on the privacy front as well as the freedom of speech side. The government suggested that the new requirement will help stop rumors and illegal activities. Microblogging has become a very popular means of communication in China. Internationally well-known microblog service providers, such as Twitter, are banned in China.

Source: PCOnline, February 8, 2012
http://pcedu.pconline.com.cn/softnews/yejie/1202/2666630.html

Briefings | | |   Information/Technology