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China’s Food Security Problem

The Sun, a Hong Kong newspaper, published a commentary stating that food security has become a real threat to China. If the Sino-U.S. relationship went south, the U.S. could use the food weapon and "win over China without a war."

"For the first time, the first government directive in 2015, titled, ‘The Opinion on Deepening Countryside reforms and Accelerating Agricultural Modernization,’ listed the potato as the fourth staple food for China. In the past, the list included only three staple foods: rice, wheat, and corn."

"At the recent meeting of the Central Financial and Economic Affairs Leading Group, Xi Jinping put food security in a prominent position. It was prior to energy security, which indicated that China’s food problem is more severe than what the outside world thought."

"The North China Plain is the main production area for wheat, but the production of wheat has been decreasing year by year due to the contamination of underground water. Hunan Province is a main production area for rice, but its rice has become carcinogenic due to heavy metal pollution."

An earlier China Review News article on China’s food problem mentioned four challenges for China’s agriculture industry:
1. High Prices: The prices of major agricultural products in China exceed their international prices.
2. Increasing Costs: The costs of agricultural products keep increasing.
3. "The Yellow Line" for Subsidies: China’s commitment to the WTO means the country can no longer increase its subsidies to the agriculture industry.
4. "Red Light" on the ecological environment: In its agricultural decisions, China has to pay more attention to the ecological environment.

Sources:
1. The Sun Online, February 17, 2015
http://the-sun.on.cc/cnt/china_world/20150217/00674_001.html
2. China Review News, January 27, 2015
http://hk.crntt.com/doc/1035/9/3/0/103593027.html?coluid=151&kindid=11511&docid=103593027&mdate=0127102620

Briefings | | February 18, 2015 | Economy/Resources

Chinese Media on the “One Belt, One Road” Strategy

Recently, Chinese media have published several articles discussing the "One Belt, One Road" initiative, which is a major diplomacy and economic development strategy for China.

The term "One Belt, One Road" ("一带一路") refers to the "Silk Road Economic Belt" ("丝绸之路经济带"), which includes China, Central and West Asian countries, and the "21st Century Maritime Silk Road" ("21世纪海上丝绸之路"). It connects China, ASEAN member nations, South Asia, Africa, and Europe.

This combined economic zone contains a population of 4.4 billion. With 26 countries and regions, the size of its economy is $ 21 trillion. In the next ten years, China’s exports are expected to count for one third of the imports to these countries and China is likely to invest $1.6 trillion in this zone.

According to Baidu’s definition, "[this term] is not a physical entity or mechanism, but rather a concept involving cooperation and initiative. The purpose is to develop a partnership of economic cooperation between China and the countries in the zone and to build a community with political trust, economic integration, and a common fate and responsibility."

The following is a summary of key viewpoints from these media, some of which even contradict each other.

China Review News:
1. Investing in countries in this economic zone is more for political considerations than for economic reasons. In fact, many investments in Central Asia and South Asia involve infrastructure construction projects that have a low economic return. Though many countries have low labor costs, their poor infrastructure and strong labor unions jeopardize their investment environment.
2. The Southeast Asian region might be the first area in which China has a breakthrough, due to the large Chinese population and their stable political environments. Their exports of food and oil can help China to lower its security risk on food and the supply of resources.

Qiushi:
This strategy can enable China to develop a tight economic and trade relationship and common interest partnerships with emerging economies and developed European countries. This can counter the U.S.’ "Asia-Pacific Rebalance" strategy and relieve the pressure of China’s overproduction and of its being forced into the heavy purchase of U.S. debt.

Xinhua:
China should focus on the "belt" (land) instead of the "road" (sea). This is because on the sea side, China will face strong resistance from ASEAN countries on its exports. This relates to their own domestic policies and can’t be completely influenced by China’s investment in their countries.

Stock Times:
The globalization of the renminbi and developing renminbi offshore trading centers are critical steps in the "One Belt, One Road" plan. China has made good progress in issuing renminbi bonds, setting up renminbi offshore trading centers (e.g. in Frankfurt and London) and offshore markets (Hong Kong, Singapore, Taiwan, and London), and in signing currency swap agreements with 28 countries.

Sources:
1. Baidu
http://baike.baidu.com/view/12241799.htm
2. China Review News, January 18, 2015
http://hk.crntt.com/doc/1035/7/9/4/103579473.html?coluid=202&kindid=11695&docid=103579473&mdate=0118095339
3. Qiushi Online, January 21, 2015
http://www.qstheory.cn/freely/2015-01/21/c_1114074599.htm
4. Xinhua, January 27, 2015
http://news.xinhuanet.com/fortune/2015-01/27/c_127424890.htm
5. Stock Times Online, January 26, 2015
http://www.stcn.com/2015/0126/11988834.shtml

Briefings | | February 4, 2015 | Geo-Strategic Trend

Study Times: China Should Create State Enterprises

Study Times republished an article from Beijing Youth Daily arguing that China should create a number of state enterprises. According to the author, state enterprises are different from State-Owned Enterprises (SOEs). The latter are companies that the government owns, but state enterprises are companies, whether private or state-owned, that are a symbol of the country or that represent its country in certain industries.

For example, Samsung is the state enterprise of South Korea, Daimler AG is of Germany, and Apple and Google are of the U.S. The author suggested that Huawei (an IT industry) and the newly formed CRRC Corp. (in the railway industry) are the two best candidates to become state enterprises of China, as they are both strongly competitive in their fields. Huawei also needs the government’s backing to compete in the international market and to deal with other governments.

As a result of their monopoly positions, many large SOEs, such as those in the oil, electricity, and banking industries, have substantial revenues and a large market share in China. However, they do not have the ability to compete in global markets, and thus cannot become state enterprises in a real sense.

Source: Study Times, January 19, 2015
http://www.studytimes.cn/shtml/xxsb/20150119/9154.shtml

Briefings | | January 28, 2015 | Economy/Resources

Xinhua: Major Signals in Xi Jinping’s Important Speech

On January 13, Xi Jinping gave a speech at the Fifth Plenary Session of the Eighteenth Communist Party Central Committee’s Central Commission for Discipline Inspection. Xinhua interviewed a number of scholars and published an article delineating six major signals in Xi’s speech.

Xi had stated that China should "adhere to [conduct the anti-corruption campaign] with no-exclusion areas, full coverage, and zero-tolerance; seriously punish the corrupt elements; and strive to create a political atmosphere in which [people] dare not, cannot, and do not want to be corrupt."

The scholars that Xinhua interviewed read six signals from Xi’s speech:
1. A basic read of the situation: The situation in the anti-corruption fight remains severe and complicated. Not only did Xi make this exact statement, but he also stated that the campaign "has yet to achieve an overwhelming victory." Xi is still far from making substantive progress on seeing that officials "dare not, cannot, and do not want to be corrupt."
2. A firm determination to keep high pressure on the campaign.
3. A straightforward attitude to correct official’s improper working styles.
4. A clear requirement emphasizing [that officials] follow the Party’s discipline and its rules.
5. A regulatory focus: to strengthen supervision of the leadership of the state-owned enterprises.
6. A permanent cure: to revise a number of important Party regulations.

Source: Xinhua, January 13, 2015
http://news.xinhuanet.com/politics/2015-01/13/c_1113982665.htm

Briefings | | January 14, 2015 | Government/Politics

China Sets New Trade Surplus Record in 2014

China’s General Administration of Customs reported China’s trade data for 2014. The total import and export volume was 26.43 trillion yuan (US$4.26 trillion), a 2.3 percent increase over the previous year. The trade surplus was 2.35 trillion yuan (US$379 billion), an all-time high.

Exports were 14.39 trillion yuan (US$2.32 trillion), an increase of 6.1 percent over the previous year and also an all-time high. However, the increase rate of 6.1 percent was the lowest in the past five years.

China had a 5.4 percent increase in its trade with the U.S., to 3.41 trillion yuan (US$550 billion) and an 8.9 percent increase in trade with the European Union, to 3.78 trillion yuan (US$610 billion).

Source: Caixin Online, January 13, 2015
http://datanews.caixin.com/2015-01-13/100773846.html

Briefings | | January 14, 2015 | Economy/Resources

2014 Statistics: Smog Days Increase 70 Percent in Beijing

The China Meteorological Administration recently issued its "China Climate Bulletin 2014." According to its report, the smog situation has worsened in China. Last year, there were 61 Smog days in the area of Beijing, Tianjin, and Hebei Province, a 70 percent increase over the 36 days in the previous year. On average, the whole nation has 17.9 smog days.

Source: Caixin Online, January 12, 2015
http://datanews.caixin.com/2015-01-12/100773475.html

Briefings | | January 14, 2015 | Economy/Resources

Xinhua: China’s Major-Country Relationships in 2014

Xinhua published an article reviewing China’s progress in developing major-country relations with Russia, the U.S., the E.U. and major developing countries.

Sino-Russia relations: "The relationship is the best it has been in the 65 years since China and Russia established diplomatic relations. The Sino-Russia comprehensive strategic partnership will be moving forward at a high level in 2015. In May 2014, the heads of the two countries signed the ‘Sino-Russian Joint Statement on the New Stage of Comprehensive Strategic Partnership in Coordination.’ The two countries finalized a gas supply treaty. The two countries are working on reaching the goal of bilateral trade at $100 billion in 2015 and $200 billion by 2020."

Sino-U.S. relations: "Although there was friction in the relationship in 2014, the waves didn’t stop the voyage. In 2015, the two countries will continue developing their relations while controlling their differences. Xi Jinping and Obama not only met twice in 2014, but also called and sent letters to each other multiple times. A highlight in 2014 was the continuous military relations development. Military exchanges frequently got interrupted due to issues of the Sino-U.S. relations in the past, but the exchanges were strong last year."

Sino-E.U. relations: "Xi Jinping’s visit to Europe in the spring of 2014 set the direction for Sino-E.U. relations, and thus European scholars largely viewed his visit as a ‘milestone in the Sino-E.U. relationship.’ The European Commission and European Council went through an election. The new leaders expressed a desire to push for an E.U.-Sino comprehensive strategic partnership."

China and major developing countries: "China has an outstanding relationship with Brazil, India, and South Africa. It can be summarized as frequent top leaders’ visits, the development of practical cooperation, support for each other’s discourse rights, the enhancement of strategic trust between the different countries, and substantive improvement in connecting each other’s development strategies."

Source: Xinhua, December 16, 2014
http://news.xinhuanet.com/world/2014-12/16/c_1113667231.htm

Briefings | | December 17, 2014 | US-China Relations

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