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Xinhua: Housing Prices Are Dropping in China

Xinhua reported that recently some real estate developers in Beijing, Shanghai, and Hangzhou have reduced their housing prices in order to promote sales. For example, the “Beijing Business International City” apartment complex is selling at 15,000 yuan per sq. meter (U.S. $256 per sq. ft), down from its peak of 25,000 yuan. “Long Hu Li Cheng” in Shanghai gave the buyers a 280,000 yuan (U.S. $43,000) discount, or 20 to 30% off the list price. This has attracted a lot of buyers, but has also greatly agitated the earlier buyers who purchased properties at a higher price. The earlier buyers are demanding refunds of the “lost value” or even that they be able to return the properties to the developers.

The article listed three groups of developers who are considering the decision of whether to reduce the price of property. The first group conducts quick sales in a short period to recover their capital investment. It tends to include limited developers with only spotty action and does not impact the overall market price. The second group is the small to mid-sized developers who might be forced to lower prices because of pressure to repay loans. There was a burst in real estate trusts after 2009 with an interest rate of 15% or more. The trusts must be paid back between September of this year and the end of next year. The third group is the big companies that have sufficient capital. They face a pricing dilemma. If they don’t lower their prices, the properties won’t sell; but if they do lower their prices, there might be complicated disputes with owners who paid higher prices earlier.

According to statistics, of 70 large or mid-size cities, the housing prices in 17 of those cities were lower in September than a year ago; 29 kept the price the same; and for the cities with an increased price, the increases were all below 0.3%.

Wen Jiabao recently expressed that it is critical to control the real estate market and maintain a healthy growth of the market (Ed: not to have a dramatic drop in prices). Officials from Shanghai and Beijing all expressed their determination to “unswervingly control the real estate market and ensure that housing prices remain ‘flat or with only a slight decrease.’”

Source: Xinhua, Oct 26, 2011
http://news.xinhuanet.com/politics/2011-10/26/c_111125641.htm

China’s State Media on the Purpose of Cultural Reform

Chinese State Media published a number of articles that comment on cultural system reform as proposed at the sixth plenary session of the 17th Central Committee of the CCP held from October 15 to 18. The aticles suggested the following reasons for China to effectuate cultural reform:

1. Culture, as a “soft power,” is part of a country’s comprehensive national power. Nowadays the Oriental and Western ideologies are interacting and merging. “Whoever’s ideology and values are most widely spread (over the world), and whoever controls the discourse right, will have the greatest influence (over the world).” China needs this “soft power” both to defend against the Western countries’ subversion (“a major reason for the former Soviet Union’s disintegration was the severe decline of its cultural soft power”) and also to exercise its influence over the world. “China needs to have its cultural power match its international status.”

2. Culture has become an important support for economic development. “Culture, economy, and technology are increasingly mingled together. Economy has an increased cultural flavor; likewise, culture has an economic function.” Developing the culture industry can help China boost its economic growth.

3. The CCP wants to use culture to improve its deteriorating moral standards.

Sources:
1. Qiushi Journal, Oct 14, 2011
http://www.qstheory.cn/lg/clzt/201110/t20111014_116563.htm
2. Xinhua, Oct 18, 2011
http://news.xinhuanet.com/politics/2011-10/18/c_111105718.htm

What Does China Tell the World in Its Peaceful Development White Paper?

On September 6, 2011, China issued the “China’s Peaceful Development” white paper. On September 8, Qiushi Journal published an article on the significance of the white paper. It tells the U.S. and other "hostile" countries not to interfere with China’s Core Interests. China’s white paper defines China’s core interests as: national sovereignty, national security, territorial integrity, national unity, the stabilization of the political system defined by the Constitution (Ed: the Chinese Communist Party’s reign), and the basic protection of sustainable economic development.

The Qiushi article praised the white paper as a clear declaration. “For many years, the U.S.-led Western countries have viewed socialist China as a thorn in their side and tried in every way to topple China. Their desire to destroy China has never died. Politically, they promote ‘democracy, freedom, and human rights’ and develop Tibetan separatists, Xinjiang separatists, and ‘democracy activists’; economically, they pressure for renminbi appreciation and attempt to stop China’s economic growth; militarily, they drag Japan, India, Vietnam, the Philippines and other countries to form an anti-China C-circle. Defining our national core interests is to tell the U.S. and other Western countries: Don’t touch my cheese!”

The Qiushi article pointed out that China is prepared to go to war to defend itself, saying, “(In its wars) China fights the invaders furiously. … The white paper unmistakably warned a number of countries: the increasingly strong Chinese people will never tolerate anyone’s attempt to damage China’s core interests.”

The white paper itself declared that “China conducts a defensive defense policy.” “China faces complex and non-traditional challenges and is threatened by separatist and terrorist forces. Defense modernization is a legitimate security requirement for China. … China’s defense spending is reasonable and appropriate. It matches the need to safeguard our national security.”

Sources:
1. Qiushi Journal, September 6, 2011
http://www.qstheory.cn/zywz/201109/t20110906_108413.htm
2. Qiushi Journal, September 8, 2011
http://www.qstheory.cn/lg/rpzm/gj/201109/t20110908_108915.htm

Video: Government Training of the 50 Cents Party Staff

A video about how the government trains spokespersons and Internet commentators was posted on the Internet. The Internet commentators are commonly known as 五毛黨 (the 50 cents party, or 50 centers), because they are paid 0.5 yuan for every article they post on the Internet to praise the Chinese Communist Party (CCP) and denigrate those the CCP opposes." The video reported that, on September 8, the Xishui County Party Propaganda Department in Hubei Province provided a training session for all government spokespersons and Internet commentators in the county to prepare them “to actively respond to sudden public events and correctly guide public opinion.” The propaganda department stressed that “the Internet has become a major battlefield in the war of ideologies.” It requested that the “governments’ spokespersons and Internet commentators continuously increase their sense of responsibility and mission” and improve their capabilities in five areas: “to make sure the Party and the government maintain a positive image, to manage their work, to handle sudden events, to guide public opinion and public relations, and to use and manage the Internet.”

Source:
1. Youmaker.com, September 15, 2011
http://www.youmaker.com/video/svb5-f784c018d27d4a4ea31337044d0e46f5001.html

Party’s Leadership in Enterprise Management

Study Times, the publication of the Party School of the Central Committee of the CCP, published an article by Li Huaqing, the Party Secretary and Vice Chairman of the Board the of Chongqing Energy Investment Group (CQEIG). In the article, Li shared how the Party will impose its leadership in enterprise management. CQEIG’s approaches include:

1. The Party organization participates in the enterprise’s major decision making. To ensure the party’s effectiveness in managing the company, it implements a “cross-representation” leadership system (the Party’s leadership takes key positions in the enterprise).
2. Party development is intermingled with business operations. One approach is to develop Party members to be the key personnel while also having key personnel join the party. Another approach is to include Party development as a key criterion when it comes to managers’ performance reviews.
3. The Party controls the human resources function and sticks to the principle that “the Party is in charge of talent.”

Source: Study Times, September 5, 2011
http://www.studytimes.com.cn:9999/epaper/xxsb/html/2011/09/05/10/10_28.htm

Momentary Freedom for the Media – An Analysis of the CCP’s Reaction to the High-Speed Train Wreck

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The deadly high-speed train wreck near Wenzhou City, Zhejiang Province on July 23 stirred up a deluge of Internet/media activity in China. The general public reacted swiftly and overwhelmingly on the Internet to share information and cast doubt on the government’s credibility. While the Chinese Communist Party (CCP) attempted to quiet the media, the media, on the other hand, tried to express their freedom of speech. Eventually the Central Propaganda Department of the CCP imposed tight control over media and Internet content.

This paper analyzes how the public, the media, and various official actors reacted to the situation and observes: Some “bad guys” and “good guys” in the CCP may react differently to an incident, but it is the CCP’s top decision makers who make the final call. What they care about the most is to protect the CCP’s power. They would not let anything happen to jeopardize that power.

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Central Military Commission Requests Military Study Hu’s Speech

On August 2, 2011, the Central Military Commission issued “The Opinion on In-depth Study of (Party) General Secretary Hu Jintao’s Important Speech at the Chinese Communist Party’s (CCP’s) 90th Anniversary Celebration.” The "Opinion" stressed that “when studying (Hu’s) speech, one should firmly stick to the fundamental political requirements to hold (high the CCP’s) banner and follow the Party’s direction, forever maintain faith in Marxism, forever maintain faith in socialism with Chinese characteristics, forever maintain the stand that the party has absolute leadership over the military, and forever maintain trust in the Party Central Committee that is under Hu’s leadership to ensure that the military resolutely follows the direction of the Party Central Committee, the Central Military Commission, and President Hu.”

The opinion requested that “Party committees at all levels in the military should put the study in a prominent position. The Party secretary should fulfill the responsibility of the person-in-charge to carry out the mission."

Source: Xinhua, August 2, 2011
http://news.xinhuanet.com/politics/2011-08/02/c_121760949.htm

CCTV Finance Channel: How to Deal with the Sky-High U.S. Debt

On People’s Daily Online, Niu Wenxin, Managing Editor and Chief Commentator of the CCTV Finance Channel, commented on the “sky-high" U.S. debt. Niu argued that, technically speaking, the U.S. government is already bankrupt. The total U.S. debt in 2007 was $US73 trillion, including hidden debts such as social security liability and bonds issued by companies with government guarantees or by local governments, but the total of U.S. current assets is only $US50 trillion. “The best choice for the U.S. is to repudiate its debt” and “force other countries to accept U.S. debt restructuring.”

“It is a ‘zero-sum’ game. If the U.S. wins, other countries (including China) will lose.” Niu then listed four reasons why China should not tighten its monetary supply: 1. Such a tightening will suppress economic growth. 2. It may lead to a financial crisis and recession in China. 3. It will cause higher unemployment. which in turn will result in social unrest and challenges to the CCP’s ruling position. 4. Europe is trying to hang on to the U.S. and hopes China will be sacrificed.

Source: People’s Daily Online, August 1, 2011
http://finance.people.com.cn/GB/15294964.html