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Central Bank Report: China’s Economy Is Slowing Down

The Chief Economist of China’s central bank led a number of officials from the bank in writing a research report predicting that China’s economy will continue to slow down for the rest of 2015. 

According to the report, in the first four months of 2015, industrial output continued to drop, while the downward pressure on the economy has been increasing. The report observed three new changes in China’s economy. Export growth has decreased significantly; real estate and manufacturing investment are slowing down faster than expected; and banks are now facing the problem of there being an insufficient demand for loans. 
The report adjusted its prediction for 2015 GDP growth downward from 7.1 percent to 7 percent. 
Source: ifeng.com, June 10, 2015 
http://finance.ifeng.com/a/20150610/13767943_0.shtml
Briefings | | |   Economy/Resources

Exports Slide Further While Imports Plunge

According to China’s General Administration of Customs, in May, Chinese exports fell for the third consecutive month, while imports plunged to the lowest level in three months. These developments highlight the adverse Chinese domestic economic environment, which may trigger further monetary policy adjustments. 

The total trade value in May was down by 9.7 percent from April. Exports fell 2.8 percent, and imports 18.1 percent, with the trade surplus increasing by 65 percent. In the first five months, the U.S. and ASEAN demand helped prevent a more substantial decline in Chinese exports as the exports to Europe and Japan dropped. U.S-China trade went up by 2.8 percent and Europe-China trade was down by 7.1 percent. 
Source: People’s Daily, June 9, 2015 
http://paper.people.com.cn/rmrb/html/2015-06/09/nw.D110000renmrb_20150609_3-01.htm
Briefings | | |   Economy/Resources

Editor Suspended Due to Personal Remarks on the Internet

On May 28, 2015, Lanzhou Daily, a Communist Party media in the capital of Gansu Province, announced its decision to suspend Editor Zhao Wen and to initiate an investigation against him due to his “inappropriate remarks” made on his own weibo (miniblog). Earlier, Zhao had made remarks in his blog criticizing the police.

“According to reports, members of the public filed complaints with the authorities saying that, on May 27, Editor Zhao Wen from the editorial department of Lanzhou Daily published inappropriate remarks on his personal Weibo and his Tencent Weibo. The remarks hurt the feelings of policemen and their families, had an adverse impact on society, and also tarnished the image of journalists in the Lanzhou area. Given the serious consequences that resulted from Zhao’s personal remarks, on May 28, the Party committee decided to suspend Zhao immediately, that he would be subject to a newspaper investigation, and that he would be subject to further disciplinary action.” 
Source: China Gansu, May 28, 2015 
http://gansu.gscn.com.cn/system/2015/05/28/011025341.shtml
Briefings | | |   Government/Politics

CCP Issues Its First Regulations on United Front Work

On May 25, Xinhua announced that the Chinese Communist Party issued the “United Front Work Regulations of the Chinese Communist Party (trial version).” The regulations became effective on May 18, 2015. They are the first ever regulations on managing relations with people who are not members of the Communist Party. The regulations cover relations with individuals and organizations who have social, commercial, or academic influence, both inside and outside China, with the goal of ensuring that these groups are supportive of and useful to the Communist Party rule’s (which is called united front work). 

The regulations state that united front work is the political advantage and strategy of the Chinese Communist Party to solidify its ruling status. As the first codified regulations, they provide guidance and principles. In addition they institutionalize and standardize all phases of united front work.  Therefore, the issuance of the regulations is viewed as a major milestone in the Party’s history. 
The non-Communist Party people who are targeted are “new social class members.” They include managers at privately-owned or foreign owned enterprises, free-lancers, and new media professionals. 
For the first time, the regulations set forth comprehensive guidance on the Party organizations’ responsibilities. Key leaders of the Party organizations will be designated as the No. One responsible person in charge of the united front work. All leaders of the Party organizations must take the lead in spreading the Party’s theories, policies, and rules; in participating in important events of united front work; and in becoming friends with non-Communist Party people. 
Source: Xinhua, May 25, 2015 
http://news.xinhuanet.com/politics/2015-05/25/c_1115401235.htm
Briefings | | |   Government/Politics

Xi Jinping: Build a Pro-Socialist Contingent Outside of China

Chinese President Xi Jinping attended a three-day meeting in Beijing of the united front work, which closed on May 21, 2015. At the meeting, Xi called for authorities to befriend and recruit more overseas Chinese to build a pro-China and pro-socialist contingent outside of China. 

Three groups of overseas Chinese are priorities. The first group, Chinese students studying overseas, are “a new focal point of the united front work.” Second, authorities must strengthen and improve the work on well-known “representative figures of the new media,” establish regular communications, “let them demonstrate positive energy in cleaning up the Internet, and in promoting the [Party’s] main theme.” Authorities must guide the third group, business owners and their younger generations on being patriotic to China. 
“It is our Party’s consistent policy to train and use non-Party individuals. [We] must deepen our work to train, select and use non-Party individuals, and strive to cultivate a contingent that proactively accepts the leadership of the Communist Party of China, unswervingly takes the socialist road with Chinese characteristics, and has strong representation and the ability to participate in politics.” 
Source: People’s Daily, May 21, 2015 
http://politics.people.com.cn/n/2015/0521/c1024-27032155.html
Briefings | | |   Government/Politics

PLA Daily: Chinese Navy Commanders Should Not Act Rashly

On May 19, 2015, right after U.S. Secretary of State Kerry’s visit to China, the People’s Liberation Army Daily issued a commentary stating that Navy commanders should not cause trouble, show signs of weakness, or act rashly. 

"Right now and for a long time, actions to maintain sovereignty and maritime rights and interests are highly political and strategic. So are the actions to protect the safety of strategic maritime passage and the safety of overseas Chinese and their interests. How to act in line with the overall situation of national political diplomacy has become a high political and strategic requirement for Navy commanders at all levels. … At all times and under any circumstances, the front-line commander must especially bear in mind and carry out firmly and actively that he must maintain orderly movement including advance and retreat, and must not speak and act carelessly or act rashly, in order to ensure that China’s national strategic intent is reached and achieved.” 

Source: People’s Liberation Army Daily reprinted by military.china.com, May 19, 2015 http://military.china.com/important/11132797/20150519/19708389_3.html 

Briefings | | |   Defense/Military

The Central Commission for Discipline Inspection Co-locates with Key Departments

Guangming Daily recently reported on the progress that the Communist Party’s Central Commission for Discipline Inspection (CCDI) team leaders made after they had been sent, in late March, to co-locate with seven key central Party and government departments. The seven central departments are the General Office of the CPC Central Committee, the Organization Department of the CPC Central Committee, the Publicity Department of the CPC Central Committee, the Central United Front Work Department, the National People’s Congress organs, the General Office of the State Council, and the Chinese People’s Political Consultative Conference. 


The relationship between the CCDI team and the department with which it co-located is one between the supervisor and supervisee. The CCDI team engages in no business other than fulfilling its oversight responsibilities. These teams are to be fully staffed by end of June. The focus of the CCDI work is department leaders, middle level cadres, and division chiefs. Activities so far have included distributing copies of the Party’s Charter, establishing the Party’s local CCDI branch, and requesting that grievance complaints involving officials be sent to the CCDI team within three days of receipt. A CCDI team will be held accountable if there are new violations involving division chiefs or above and if the CCDI team failed to discover the violation or to investigate. 

Source: Guangming Daily, May 18, 2015 
http://politics.gmw.cn/2015-05/18/content_15694509.htm

Briefings | | |   Government/Politics

The Effort to Join SDR May Include RMB Depreciation

Laohucaijing.com published a commentary about the speech that Zhou Xiaochuan, president of China’s central bank, gave at the meeting of the International Monetary Fund (IMF) on April 18, 2015. The commentary warned that, based on Zhou’s remarks, the bubbles in China’s housing and stock markets will burst in the second half of 2015 and RMB depreciation may be likely.

According to the commentary, Zhou’s speech was very detailed and important, unequivocally demonstrating China’s determination to be included in the IMF’s Special Drawing Rights (SDR). The currency value of the SDR is determined by summing the values in U.S. dollars, based on market exchange rates, of a basket of major currencies (the U.S. dollar, Euro, Japanese yen, and pound sterling). 
The core of Zhou’s speech was that the Chinese Government is working to allow free conversion of the RMB, or at least managed free conversion. The condition for joining SDR is free conversion of the RMB, which China cannot do at the moment. Therefore managed free conversion is a major step forward. If managed conversion is implemented, the bubble in China’s housing and stock market will burst. Chinese will be looking all over the world for investment opportunities. To avoid a reduction in foreign exchange reserves, China’s central bank may depreciate the RMB in the second half of the year. 
Source: Laohucaijing.com, May 7, 2015 
http://www.laohucaijing.com/news/23466.html
Briefings | | |   Economy/Resources