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Former Officials Challenged National Development and Reform Commission

On March 9, at a break-down group meeting of the 4th session of the 12th Chinese People’s Political Consultative Conference (CPPCC), former Deputy Minister of Railways Hu Yadong criticized the National Development and Reform Commission.

"The [commission’s] annual economic development plan should have shown the actual implementation of the Premier’s [economic] plan at the National People’s Congress, but we didn’t see anything [concrete].

"In government investment, how many projects [will be taken on] and where the money will be spent should be expressed clearly. Leave the rest to the market. You (referring to the National Development and Reform Commission) don’t need to give vague words, such as ‘study to make a decision,’ ‘actively pushing forward,’ and ‘greatly promoting.’ These words do not belong in the actual plan.

"For example, the plan said to build a total of 2,000 km of utility pipes (water, Internet, gas, etc.) in all cities in China this year. I say it can’t be that small a number. We are building so many new residential buildings throughout the country; even 20,000 km is not enough [to support this new construction]. We have paid all the required ancillary fees for new buildings. If we hadn’t paid them, we could not have gotten the building permits. Are we going to get the waste water pipes? Is it that we will get them in some places and we won’t in some other places? Where did the money [that was paid] go?"

Source: Sina, March 10, 2016
http://news.sina.com.cn/c/nd/2016-03-10/doc-ifxqhmvc2263122.shtml

Briefings | | |   Government/Politics

Why Does a Bubble Inflate Faster Right before It Bursts?

Recently real estate prices have risen rapidly in several major cities in China. There have been big debates on whether this represents a bubble. Financial Times Chinese published an article suggesting that by observing the past stock and housing market bubbles in the U.S. and Japan, one can see a phenomenon; the closer the bubble is to bursting, the faster it expands.

The article gave three reasons:

First, the buy and the short are supposed to balance the market. At the early stage of the bubble, they are in balance. As the bubble keeps developing, more people want to buy instead of sell. The short can no longer restrict the bubble.

Second, as the bubble grows, some investors start to worry about risk. To attract those rational investors, the market starts to offer higher short-term returns. If these returns are high enough, it will attract more investors.

Third, at the late bubble stage, a uniform consensus forms that the bubble will last forever. Almost all investors jump in to buy the bubbled assets. However, if all of them have bought the assets, to whom will they sell to make profit?

Source: Financial Times Chinese, March 9, 2016
http://m.ftchinese.com/story/001066525

Briefings | | |   Economy/Resources

CPPCC National Committee Member Requested that the Detaining and Educating System Be Stopped

When attending the current CPPCC National Congress, Zhu Zhengfu, a member of the Chinese People’s Political Consultative Conference (CPPCC) National Committee and Vice Chairman of the All China Lawyers Association, was about to submit a proposal to request the aboliton of the Detaining and Educating System.

Zhu had submitted the same proposal in March 2014, after December 2013, when the National People’s Congress abolished the forced labor camp system. He remembered, however, "The Ministry of Public Security sent officials to talk with me and provided a written response that they objected to the abolition."

In 1993, the State Council issued the "Measures on Detaining and Educating Prostitutes." It granted the police the power to take administrative action to put prostitutes into six months to two years of forced-education and forced-labor work without a court investigation or a trial.

Zhu pointed out that this detaining and educating system is, in essence, a forced-labor camp system for prostitutes. Thus, it should be eliminated completely.

Source: Caixin, March 3, 2016
http://topics.caixin.com/2016-03-03/100915310.html

Briefings | | |   Government/Politics

Xinhua: Not Many People Want to Have a Second Child

Xinhua recently reported on the willingness of Chinese people to have a second child. Although China abandoned its one child policy and, as of  January 1 of this year, began allowing a second child, many people do not want to have a econd child.

"According to a survey that was conducted, 70 to 80 percent of people said that they were willing to have a second child, but in reality only 30 percent actually did."

The obstacles for people to have a second child include companies’ unwillingness to hire women who have two children, the high financial cost, and the limited public resources for raising a child.

Source: Xinhua, March 7, 2016
http://news.xinhuanet.com/politics/2016lh/2016-03/07/c_128777923.htm

Briefings | | |   Social Stability

Global Times: David Shambaugh Praised Xi Jinping

A year ago, the Wall Street Journal published an article by the renowned American Chinese expert, David Shambaugh, "The Coming Chinese Crackup," in which he stated that the regime under Xi Jinping was going south.

On March 1, Global Times published an exclusive report on the dialogue between Shambaugh and Wang Wen, Executive Director of the Chongyang Finance Institute of Renmin University of China. Shambaugh was much more positive about Xi Jinping.

According to Shambaugh, "In the past year, because of that article, many Chinese friends no longer treated me as an ‘old friend.’ Many Chinese media criticized me. No one invited me to visit China. All of these things upset me. … The title of that article was problematic. It was not from me, but the editor of the Wall Street Journal. They wanted to attract more readers’ eyeballs and create more profit for the newspaper. When I heard the title, I asked them to change it. They replied, ‘Sorry, David. It is too late, we’ve already gone to print.’"

"Another issue was the anti-corruption campaign. I have stated clearly that anti-corruption is good. I am all for it. It is the right thing to do and the public has received it very well. I give a thumbs up to Xi Jinping and Wang Qishan’s anti-corruption fight. Corruption is the cancer that erodes the Party, the government, the economy, and society. It must be taken care of; otherwise it will lead to the downfall of the Chinese Communist Party (CCP)."

"The future reform in China should be reform of the structure, not like what China did 30 years ago. It is no longer an adjustment; rather, it is a systemic reform. For example, the financial area needs a thorough reform. However, there are quite a few people who feel that their interests have been impacted [and therefore, they resist it]. So, I agree, China’s reform needs the present strong leader."

Sources:
1. Global Times Online, March 1, 2016
http://world.huanqiu.com/exclusive/2016-03/8628170.html
2. Wall Street Journal Online, March 6, 2015
http://www.wsj.com/articles/the-coming-chinese-crack-up-1425659198

Briefings | | |   US-China Relations

Qiao Liang on the North Korea Issue

Zijing Magazine recently interviewed People’s Liberation Army (PLA) Major General Qiao Liang, author of Unrestricted Warfare. Excerpts from the interview, in which Qiao expressed his views on the North Korea issue, follow:

Kim Jong-un wants a security guarantee. He conducted the nuclear bomb tests and the satellite launch with a long-range missile, for the purpose of continuing his regime. He wants the neighboring countries, especially those big countries to give his regime a security guarantee.

The U.S. does not really want to have a war with North Korea. It just wants to create tension in this area, which will then justify its involvement in this area. Therefore, the U.S. will not provide the security guarantee that Kim Jong-un seeks. If South Korea unites with the North, or North Korea becomes a peaceful neighbor, South Korea will see no need for the U.S. to station its army on South Korean territory and neither will Japan.

The U.S. is deploying the "THAAD" anti-missile defense system to create tension between South Korea and China. Its goal is to destroy the China-Republic of Korea Free Trade Agreement.

North Korea needs to change its attitude toward China. The relationship between China and North Korea is going south.  Qiao said, "China does not want to change North Korea, but North Korea must change its attitude toward China." "You can’t take my stuff and eat my stuff, yet keep creating trouble for me and making me unhappy. This is not acceptable."

Source: Zijing Online, February 28, 2016
http://world.zijing.org/2016/0228/687080.shtml

Briefings | | |   Geo-Strategic Trend

Chinese Diplomats’ Obscene Behavior in a South Korean Restaurant

South Korean TJBV TV reported on the obscene behavior of several Chinese diplomats in public in a family restaurant in Myeongdong, a commercial shopping area in Seoul. Epoch Times reported the news in Chinese.

On the evening of February 23, over a dozen Chinese men and women were having dinner at the local Myeongdong restaurant. Several men kept touching the women next to them. A few women also sat on the mens’ laps; some even moaned. A male and a female were seen entering a restroom together and the female’s moans could be heard from outside the restroom.

At the same time, another 30 customers were having dinner in the restaurant, including female high school students and children. They asked the Chinese to stop their behavior, but they refused.

The restaurant staff then moved the group to another seating area. Their indecent behavior continued for another hour.

Three Chinese diplomats were in this group, including Consul Wang.

The TJBV‘s report, which was in Korean, can be seen here: https://www.ondemandkorea.com/odk-clips-jtbc-news-room-022616-clip-647.html?lang=cn.

Source: Epoch Times Online, February 27, 2016
http://www.epochtimes.com/gb/16/2/27/n4649317.htm

Briefings | | |   Geo-Strategic Trend

China Will Cut 1.8 Million Jobs in the Steel and Coal Industries

Yin Weimin, Minister of Human Resources and Social Security, stated in a press conference on February 29, that China will cut 1.3 million jobs in the coal industry and a half million jobs in the steel industry, to solve the over capacity problem in these two industries.

According to Radio Free Asia, the State Council proposed, in January, to reduce crude steel production by 100 to 150 million tons, on top of the already planned elimination of 90 million tons of steel produced from old technology, over the next few years.

The National Development and Reform Commission (NDRC) recommended that 4,300 coal mines be closed and 700 million tons of coal production be cut over the next three years.

"Experts anticipate that, over the next two to three years, if such industries as steel, coal mining, cement, ship building, aluminum, and plate glass, which are severely over-capacity, cut their production by 30 percent, China will lose at least 3 million jobs."

Source: Radio Free Asia, March 1, 2016
http://www.rfa.org/mandarin/yataibaodao/jingmao/ql2-03012016105153.html

Briefings | | |   Economy/Resources