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Minister of Public Security: Use Weapon with Caution, Handling Social Unrests

In a recent issue of Qiushi magazine, an article, authored by Meng Jianzhu, the Minister of Public Security, defined the tasks of the public security as maintaining the order, dissolving the conflicts, deterring the violent behaviors, and keeping the situation in control. It called for a stop to intensifying the conflicts caused by improper measures taken by police.

In particular, Meng cautioned against using weaponry and forceful measures so as to prevent blood shedding. He also stressed on guiding the public opinion and announcing the government message in the first time at emergent events. It’s believed that Meng’s article is a response to the recent escalation of police violence and inflated public discontents.

Source: Nanfang Daily, November 4, 2008
http://www.nanfangdaily.com.cn/nfjx/200811040022.asp

Hainan University Sealed, Fearing Spread of Cholera

As of November 1, 7 students were diagnosed as cholera out of the 30 with the symptom of diarrhea at Hainan University, located in the southern island of Hainan province. It’s the second batch of cholera outbreak in the island after the 17 cases found in Zhanzhou city on October 20.

The campus is now closed up. All students, faculty, and staff members are required to take preventive medicine for three days in a row so as to deter the spread of the infectious disease.

According to the local health authority, 51 cholera cases were identified between October 3 and November 2 across the province. No death was reported.

Source: China Youth Daily, November 4, 2008
http://news.sohu.com/20081104/n260431486.shtml

Hu Jintao: Firmly remember the sad lessons of this year’s significant safety incidents

The following is a translation of news report regarding Hu Jintao’s speech at the Central Party School in September, criticizing cadres for lack of “objective consciousness, a general situation consciousness, a sense of hardship, and a consciousness of responsibility”, as reflected in the recent series of food quality scandals. [1]
On September 19, 2008, China News Net broadcast that, according to a CCTV News Broadcast report, the opening ceremony for a special topic seminar for state level main cadres  was held that morning at the Central Party School. This seminar was to mobilize the party to further study scientific development activities. Hu Jintao, the general secretary of the Central Committee of the Chinese Communist Party (CCP), State President, and Central Military Committee President, pointed out during the meeting that some significant production safety and food accidents had happened during the year, which had caused significant losses to people’s lives and property. He emphasized that the severity of these accidents and their consequences must be fully evaluated, and some sad lessons must be firmly remembered.

Hu Jintao stressed that since the reform and open policy began, the CCP has emphasized restructuring, and has insisted that the party must manage the party, govern the party strictly, advance the party’s structuring of its magnificent projects, and drive the party’s structure to grow stronger through constant reforms. At the same time, we must see soberly, along with the continuous development of the reform and open policy and socialist market economy, and along with the increase in time, that the party has been in power and the change in the party’s team, and that the party’s self structuring faces many new topics and new tests. The tests of the party’s power, the reforms and open policy, and the development of a socialist market economy are all long-term and complex, and the task of managing and ruling the party is more arduous than at any time in the past.

Hu said that this year, some places had significant production safety incidents and food safety incidents, which caused a significant loss of people’s lives and property. From these incidents, it shows that some cadres lack objective consciousness, a general situation consciousness, a sense of hardship, and a consciousness of responsibility, and that they show an attitude drift, loose management, and that they have slacked off in their work. Some don’t even listen to the people’s voices, and don’t care about those significant problems that relate to the safety of people’s lives. We must fully evaluate these incidents and their severity, and firmly remember the sad lessons.

Hu Jintao pointed out that those incidents told us again that only if we resolved the existing significant problems in the team of the party members, let the party comrades build the party to better serve the people, build the government for the people, always think of the people first, and always care for the people, can the CCP lead the people to strive for the victory of completely building an affluent society.

Endnote:
[1] www.china.com, September 19, 2008
http://news.china.com/zh_cn/domestic/945/20080919/15097074.html

4,525 Officials convicted in five years

4,525 county-and-above-level government officials were convicted from 2003 to 2008, said by Wang Shengjun, the Supreme Court’s chief justice, in a report to the Standing Committee of National People’s Congress on October 26. The figure is 77.52% higher than five years before. The courts trialed 1.2 million criminal cases that seriously harm the social security, including crimes endangering national security, terrorist, gang crimes, murder, kidnap, robbery, and drug abuse. 1.6 million people were put in jail.

Source: Xinhua, October 26, 2008
http://news.xinhuanet.com/newscenter/2008-10/26/content_10254667.htm

Gansu Police Put Video Surveillance System in Place

Gansu provincial Pubic Security Division’s Visual Command & Coordination System (VCCS) was in operation on October 27. VCCS, composed of large screen monitor, visual command function, and phone recording facility, is mainly used as a central command system for major emergencies.

The current visual surveillance monitor covers 14 cities and a mining area with high resolution. In real time, the monitor can switch to and zoom in any geographic target inside the province, provided incorporated into the system. The VCCS allows a centralized control of daily dynamics of public security across the whole province. Gansu is the last province in the country to equip the provincial PSD with VCCS.

Source: Xinhua, October 28, 2008
http://news.xinhuanet.com/legal/2008-10/28/content_10265748.htm

Expanding the Navigation System; China to Launch Dozen Satellites in 2009

China is planning to launch 12 satellites in 2009 as part of Big Dipper Satellite Navigation & Position System (BDSNPS), aiming to provide basic services to domestic and neighboring regions, said Ran Chengqi, deputy head of National Center of Satellite Navigation Project (NCSNP), at a conference on October 28.

BDSNPS was born in 2000. The dozen new satellites, adding onto its current five, is a major step toward a final complete system of 30+ satellites. Ran claimed that the system aims to expand services around the globe.

According to Xinhua, China started its R&D on satellite navigation in 1994, following US, Russia, and Europe.

Source: Xinhua, October 28
http://news.xinhuanet.com/newscenter/2008-10/28/content_10267364.htm

The New Trend in Foreign Exchange Investments of China

On September 26, 2008, an article in The Economic Observers Network from China, in regards to the new trend in foreign exchange investments of China after the economic crisis in the U.S. The following is the translation of the Article. [1]

Bound for Europe!
The New Trend in Foreign Exchange Investments

 
In recent two weeks, many high-level executives, from a number of the European private equity investment firms, who frequently showed up in Beijing, revealed by insiders. Some of them were invited by the interrelated Chinese government authorities to teach the technical skills and methods of investing in Europe. Some came on their own to search for investment opportunities in Europe.
 
This is a sign of concern. The insider informed the Economic Observers that following the U.S. financial crisis, the Chinese government is expected to speed-up the diversification of its investment of foreign exchange reserves. “The Chinese foreign exchange reserves hold too much U.S. dollars, and exactly they need to be diversified,” outright said Fu Yong Hai, the CEO of Asia-Pacific region, the Wealth Management Research Department of Union Bank of Switzerland (UBS).

The Investments of the State Administration of Foreign Exchange (SAFE)

As a matter of fact, the pertinent Chinese institutions have previously made many attempts. It began in 2007, SAFE has already held small amount of equities from close to 50 British publicly listed companies.

Since the beginning of 2008, SAFE has been frequently appeared on the list of international companies. This has attracted the attention of the global financial organizations.

On April 15, 2008, a spokesperson, in charge of the global investors’ relations of the British Petroleum (BP), confirmed that a Hong Kong-registered Hua (SAFE Investment Company, Ltd.) a subsidiary company of SAFE, purchased a grand total nearly 1% of the BP stocks. In terms of BP’s market value of the day, the investment from SAFE was almost $2 billion.

Previously, SAFE purchased 1.6% stocks, from the Total Petroleum (TOTAL), a French oil company. The said investment became the hot topic news among the investors. It was stated the grand total investment in TOTAL was around $2.8 billion.

Subsequently, SAFE has become a stockholder of Prudential, the second-largest British insurance company, holding 1% of the equities of Prudential. (It is estimated according to the current market value of Prudential,) SAFE invested about 1.34 million British pounds. It was said that SAFE used a Nominee Account; that is, through a secondary market agent to complete the transactions. After purchasing the stocks, SAFE has become one of the top 25 stockholders of Prudential.

According to the latest news, SAFE holds a small amount of equity, approximately, in50 British public listed companies.

By the end of March 2008, the total foreign exchange reserves have reached $1.68 trillion. The current data showed that they have already risen to $1.81 trillion. SAFE is faced with the troublesome management know-how problems.

Actually, according to the State Council of PRC, “The Three-Fixed Policies,” is one of SAFE’s main responsibilities to manage the nation’s foreign exchange reserves in accordance with the provisions of the foreign exchange reserves management of China.

It was reported in the beginning of 2005, SAFE has been permitted to invest 5% of the foreign exchange reserves in the overseas equity investments. Based on the total amount of $1.5 trillion in the foreign exchange reserves by the end of 2007, the total amount could have been invested were no less than $75 billion. For the present, SAFE has acquired, at least, $6.7 billion of stocks from the U.K. stock market through its Hong Kong-registered Hua (SAFE Investment Company, Ltd.) In actuality, this type of small-scale investment is in line with the investment policy of SAFE, which is to invest for financial returns, rather than control the companies, or influence the stability of the financial market.

The stock holdings from the U.K. stock market, Hua controls less than 1% of the total stock capital values of the companies, the vast majority holdings belongs to 100 (FTSE100) index of stocks, and the rest are from FTSE250 index of stocks.

Lu Ting, the Economist of the Merrill Lynch (Asia-Pacific) Ltd., believed that was a good phenomenon. He pointed out that the mid- to long-term investment of China’s foreign exchange reserves
will move to the long-term, non-U.S. assets, and proceed to diversified investments.

The external environment is also helpful to the changes in investment of SAFE. In January 2008, during the Prime Minister Brown’s visit in China, he bid his welcome to the Chinese Sovereignty Funds to invest in the U.K., hoping the U.K. could become the most favorable overseas investment nation of China.

“Timing is very essential to any investment; furthermore, the evaluation of different asset categories of the investment is also necessary,” said Deng Dade, the Senior Advisor from TerraFirma Foundation. The British Prime Minister’s comments, at least, should be viewed as the British is welcoming the economic investment of China in a positive cue.

Speed-up the Process

At present, the investments, in Europe is similar to that of SAFE, could be expedited in the near future.

The Economic Observers was informed that SAFE is not the only foreign exchange reserves, there are many other forms of foreign exchanges will be investing in Europe, the relevant Chinese authorities are discussing the issues related to such investments. This is a start-up of the selection process.

Some of the European financiers warned China that the Chinese need to be more honest and open in its process of investing in Europe. In the past, the low-profile investments from SAFE and the China Investment Corp had become the target of the “attacks,” from the people outside of their organizations.

Deng Dade, in charge of the state-owned assets management in Sweden, specified, “There is no fundamental difference in the nature between the China Investment Corporation and SAFE in terms of a sovereign wealth fund investment.” “The sensible way is to consult other state-owned organization’s principles of management.” “There are three principles to abide by: To be independent of politics, own self-decision making rights, and the clear objectives that benefit all parties concerned.” “Openness and honesty are guaranteed, and the rules and regulations will lead you to success.” Deng emphasized repeatedly. 

His comments were not without reasons. The Western media, in general, believe that SAFE and the China Investment Company don’t disclose their investment contents to the public. In the past, they even denied the existences of their registered companies outside of China. Their investments are also very difficult to be away from the political ditch.

Kerry Brown, the senior research analyst of Asian Projects from The Royal Institute of International Studies (the Chatham House,) indicated that the people are suspicious of SAFE’s other investment projects. As SAFE is purchasing stocks from the well-known companies in some of the areas, for the aforementioned-facts, the politicians and businessmen in these areas are filled with apprehension.

The Auvitek Financial Consultation expressed, “The proposals to the government investment institutes and the sovereign wealth fund investors show concerns about other investors enjoying the same consultation services. First of all, focus on the specific investment, and the investments in the currency market to bear the risk; secondly, evaluate the assets allocation from a long-term perspective, especially, in the currency and assets types of diversification; thirdly, give full consideration to build up systematic internal control, management system and risk assessment system to ensure that the future investment decisions on the risk and return.

Endnote:
[1] The Economic Observers, September 26, 2008
http://www.eeo.com.cn/eeo/jjgcb/2008/09/29/115028.html

Unemployment among College Graduates up to 15%

Among all of China’s college graduates, as many as 15% cannot find a job, according to a recent report issued by China Youth Research Center. The Report on China Youth Rights and Welfare also forecast the deteriorating trend in the imbalance in the gender structure of the nation’s youth population in the coming decade, with 15 to 20 surpluses of males in every 100 females. The report is compiled based upon a survey on a sample of 4,000+ people in 108 counties in 12 provinces.

Source:
Xinhua, October 22, 2008
http://news.xinhuanet.com/employment/2008-10/22/content_10231406.ht