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Cheng Ming Monthly: Wang Qishan Targeting Zeng Qinghong’s “Independent Kingdom”

The Central Commission for Discipline Inspection (CCDI) of the Chinese Communist Party (CCP) has targeted the five largest Chinese enterprises in Hong Kong for corruption. The five enterprise groups are: China Resources (华润集团), the Bank of China (中银集团), China International Trust and Investment Corporation (CITIC, 中信集团), the China Everbright Group (光大集团), and the China Merchants Group (招商局集团). At a CCDI meeting, Wang Qishan, the Commission’s Secretary, stated that their problems have long existed and are very severe. They have created independent kingdoms and their own cliques.

According to the May Edition (439th Edition) of Cheng Ming Monthly, a Hong Kong-based Magazine, of the top executives of these five largest Chinese enterprises and 35 enterprises owned by Provinces or Ministries in China, 75 to 80 percent are the children, grandchildren, or relatives, of government officials. 63 to 75 percent hold a foreign passport or residence card.

On April 11, 2014, the CCDI held a meeting of the “Anti-Corruption and Rectification Campaign” to target those five largest Chinese enterprises in Hong Kong. Wang Qishan stated at the meeting, “The combined work of auditing, checking, rectifying, and anti-corruption for the five enterprise groups have a clear, well-defined, and firm purpose. This work is to maintain responsibility to our people, our country, and our undertaking. For this work, we should never stop in the middle, retreat, or leave something unresolved for the future.”

Wang further listed the major problems that these enterprise groups face:
1. They have been establishing independent kingdoms and cliques in the areas of appointing executives, operations, and auditing.
2. There are powers at certain Central CCP department and local governments protecting these groups, which means that the central government’s over-twenty attempts to rectify and investigate these companies was done in vain.
3. They have changed or abandoned the CCP Central Committee’s regulations on institutions stationed outside China.
4. They have ignored the central government’s fiscal system, financial system, and accounting system, and created multiple versions of accounting books to cheat the government.
5. Top executives of these enterprises, along with their relatives, have conducted individual illegal economic and financial activities in the name of the enterprise.
6. They spend lavishly on salaries, benefits, and bonuses.

[Editor’s Note: Zeng Qinghong (曾庆红), the number two person in Jiang Zemin’s clique, has a strong influence over Hong Kong and Macao affairs. From 2003 to 2007, he was the Chair of the Central Hong Kong and Macao Work Coordination Committee and has continued to maintain a powerful influence. China Resources Chairman Song Lin, who was recently taken down on corruption charges, is considered Zeng’s man. Some media have mentioned that Wang’s targeting of these enterprises is a step aimed at Zeng.

Source: Wenxuncity.com, May 3, 2014
http://www.wenxuecity.com/news/2014/05/03/3236647.html

Briefings | | |   Grapevine

People’s Forum: Public Authority Wrongly Transformed

After conducting a survey, People’s Forum, a sub-site of People’s Daily Online, commented on how the public authority in China has undergone a transformation in the wrong direction. The article stated that, from looking at the publicly exposed official corruption cases, it is clear that the public authority has gotten into the wrong hands:

The authority belonging to the public went into the hands of a department (a smaller group). The authority under the control of the department went into the hands of an individual (mainly the number one leader). The authority under the control of the individual went into the hands of his family.

According to the People’s Forum, 68.8 percent of the people surveyed thought that the public authority has been severely abused. Over 60 percent thought that, in China, there is widespread nepotism at the grass roots level. Over half of those surveyed thought that the county official’s power abuse was the most severe abuse. Over half thought that allowing an official’s family to control power was more damaging than other type of power transformation.

Source: People’s Daily Online, April 21, 2014
http://theory.people.com.cn/n/2014/0421/c40531-24922464.html

Briefings | | |   Government/Politics

Outlook on National Security Commission’s First Meeting

Outlook Weekly published an article commenting on the first meeting of the National Security Commission which took place on April 15, 2014. Xi Jinping chaired the committee meeting, with Li Keqiang and Zhang Dejiang as deputies. The Commission was established in November 2013, with the responsibility to oversee all security matters that China faces.

The article stated that, in his speech at the meeting, Xi Jinping presented two new ideas:
1. He raised the “overall national security concept” and the “national security path with Chinese characteristics” for the first time. The “overall national security concept” is bigger than the previous security concepts. It encompasses the people’s safety, political security, economic security, as well as military, cultural, and social security.

2. He emphasized the concept of five “both’s": both external security issues and internal security issues, both the land security issue and the people’s safety issue, both traditional security issues and non-traditional security issues, both the (economic) development issue and the security issue, and both China’s own security issues and common security issues (with other countries).

Source: Outlook Online, April 21, 2014
http://www.lwgcw.com/NewsShow.aspx?newsId=35078

Briefings | | |   Government/Politics

Study Times on Handling Internet Crises

Study Times recently published an article on how to improve the handling of crises that spread over the Internet. The article recommended that China should develop an Internet security and information control mechanism, strengthen its monitoring and emergency response capability for such crisis, develop new technologies, improve communication between the government and the people, and educate the media and the people about how to be cautious. The article suggested that the government initiate efforts in the following areas:

1. Strategy and institutional structure: The government should include Internet crisis management as part of its national security strategy and develop a proper institutional structure and laws on Internet information management. Also the government should clarify the structural relationship between the National Security Commission, the Central Internet Security and Information Leading Group, and local governments.

2. Early detection of and emergency response to Internet crises: The government can establish Internet information collection teams to monitor news discussion groups, forums, and search engines’ search results; it can also collect information on the hot issues and events as well as on people’s opinions on these issues and events.

3. Internet technology: The government should put the R&D of Internet technology in a core position and strive for China’s own innovations of core Internet technology.

4. Crisis management: The easiest way is for the government to tell the truth, so as to gain people’s trust and weaken the impact of negative opinions.

5. Education: The government should educate media professionals on professional ethics and professional “discipline.” It also needs to educate the general public about Internet crisis – to train citizens on how to tell, criticize, and evaluate information on the Internet. It can do this through the use of television, newspapers, the Internet, school, and special education programs.

Source: Study Times, March 24, 2014
http://www.studytimes.cn/shtml/xxsb/20140324/4272.shtml

Briefings | | |   Social Stability

China’s Central Bank’s Four New Policy Characteristics

Xinhua republished an article from CNStock.com, which had reported on several major actions that China’s Central Bank has recently taken. The bank has stopped virtual credit card products, capped the amount of third party payments, and increased the volatility of the RMB exchange rate. All these show that People’s Bank of China is adopting policies to avoid innovation, reduce financial risks, and maintain the GDP level.

The article listed four new directions that the Central Bank is following:
1. Prevent financial problems and maintain the GDP level.
2. Focus on resolving financial risks and ensure that financial innovation does not create additional economic risks. The decision to stop virtual credit card products is an indication that the Central Bank would rather give up new innovation of financial products to avoid the potential risks associated with introducing innovative products.
3. Increate the volatility of the RMB exchange rate to push for the RMB’s devaluation and stimulate exports.
4. Limit the Internet purchase amount to support physical stores.

The article stated that because of item 1 and 2, the increasing trend of the RMB’s interest rate will be turned around and the cost of capital will decrease. This will lead to two results: one is to indirectly support real estate prices; the second is to limit financial innovation, which will reduce the inflow of foreign money into China.

Source:
1. CNstock.com, March 18, 2014.
http://news.cnstock.com/news/sns_jd/201403/2950773.htm
2. Xinhua, March 18, 2014.
http://news.xinhuanet.com/fortune/2014-03/18/c_126280684.htm

Briefings | | |   Government/Politics

How Xinhua Made Fun of Jiang Zemin

Several times over the past year, Xinhua made fun of Song Zuying (宋祖英), a famous singer of Chinese folk songs. It is widely known to the Chinese people that Song, though married, is Jiang Zemin’s mistress. When Jiang had power, defaming Song in any Chinese media, not to mention the official media Xinhua, was unimaginable. It never happened, even when Hu Jintao was the head of China.

A recent Xinhua blog wrote about the relationship between Song Zuying and the Chinese actor Zhao Benshan (赵本山). It is rumored that Bo Xilai chose Zhao to be his Minister of the Ministry of Culture after Bo’s coup to overthrow Xi Jinping. The blog said that Song and Zhao are like brother and sister and they are “even closer than brother and sister.”

What is most interesting is that the blog also mentioned “big brother.” It said that in 2000, there was a rumor that Song has special backing (implying Jiang). To support her, Zhao said, “With the backing of big brother, what are you afraid of? If there is any problem just tell big brother. Even if the sky falls, big brother will hold it for you.” On the surface, the “big brother” here seems to mean Zhao, but in reality, Song’s political power (from Jiang) would have been much stronger than Zhao’s. So Zhao would not have said this to her.

What this blog did was directly make fun of Jiang Zemin, who claimed himself to be the “big brother” to Song. According to the book “The Real Story of Jiang Zemin (江泽民其人),” Jiang watched Song’s performance and felt attracted to her. He then gave her a note which said, “In the future if you have any problem, you can come to big brother. Big brother can solve any problem for you.” The “big brother” in the note referred to Jiang himself. Thus Song became Jiang’s mistress.

On another note, this “big brother” story from “The Real Story of Jiang Zemin” book was, of course, banned in China. Some Chinese found a creative way to publish it though. On a 163.com blog, the author published the exact same story by replacing Jiang’s name by Ma Yingjiu (the President of Taiwan) and Song’s name by Lin Zhiling (a Taiwanese singer). It went on to say that Lin held a performance in Sydney and sang in Korea for the 2002 Soccer World Cup (Chinese know that it was really Song who did that) and that Ma built the National Center for the Performing Arts for Lin (Chinese know that Jiang built it for Song). The readers’ responses show that they understand who the two people really are.

Sources:
[1] Xinhua Blog, “What Is the Hidden Secret That Song Zuying and Zhao Benshen Swore to Be Brother and Sister?”
http://yuyu26.home.news.cn/blog/a/0101007C4C310CEF1F9188FA.html
[2] Epoch Times Online, “The Real Story of Jiang Zemin,” Chapter 18, “Love Beautiful Ladies and Have Many Mistresses.”
http://www.epochtimes.com/gb/5/6/17/n957853.htm
[3] 163.com Blog, “Come to the Big Brother when You Have Problem,” November 24, 2010
http://bbs.news.163.com/bbs/zhongmei/192313326.html

Briefings | | |   Government/Politics

Qiushi on Chinese Culture Going Abroad

Qiushi republished an article from Guangming Daily about Chinese culture going abroad. The article drew the conclusion that "Chinese culture needs to go abroad; ‘going abroad’ is not to change other people but to let the world understand China and Chinese culture. Letting others accept Chinese culture is to let them accept it voluntarily."

The author discussed the forms for spreading Chinese culture. His suggestion was to provide as many culture products and culture services overseas as possible. Another approach is to have a large number of Chinese go overseas. Those people are the ones who spread Chinese culture. If they demonstrate a good personal quality and civilized behavior, Chinese culture will have a higher status.

Source: Qiushi, November, 8, 2013
http://www.qstheory.cn/wh/whzl/201311/t20131108_288251.htm

Briefings | | |   Government/Politics

Qiushi on the Direction of China’s Economy

A recent Qiushi article discussed the direction of China’s economy. It stated that China should continue relying on development-based high economic growth to solve its problems.

The author argued that, with a per capita GDP of US$6,090, for the next ten years China should still rely on the high economic growth model in order to reach US$12,000. By then it will be able to join the ranks of developed countries.

He rebutted the idea of laying blame for China’s current economic and social problems, such as environmental pollution, an increasing gap in income distribution, an imbalance between urban and village development, an imbalance in regional development, and insufficient public services, on the rapid economic development in the past. Instead, the author argued that the problems that have occurred during economic development can only be solved in through the process of further development.

The author listed the following as the direction for economic development: expanding consumption by taking real estate and the automobile as the driving force; developing a third industry to absorb a large number of unemployed people; getting more farmers off the land to work in cities; building a system to encourage more innovation; and developing and improving capital markets.

Source: Qiushi, November 1, 2013
http://www.qstheory.cn/zxdk/2013/201321/201310/t20131030_284130.htm

Briefings | | |   Economy/Resources