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Record Drought Worsens in Northeast China

Xinhua reported that, this year, the major grain producing areas in Liaoning Province and Jilin Province in northeast China have suffered the rarest drought in over half a century. Crops have withered away and rivers have dried up. Even drinking water is in short supply. 

On August 14, Vice Minister of Agriculture Yu Xinrong said that since August, the amount of precipitation in northeast China has significantly declined. In some areas the reduction is as much as 79 percent compared to last year. In Inner Mongolia, Jilin and Liaoning provinces, more than 34 million mu have been hit by drought, with more than 15 million suffering from severe drought. “The drought situation is very grim,” Yu said. 
Based on meteorological records, since July, Liaoning Province’s rainfall has been the lowest since 1951. Also starting in July, the drought-hit area has been growing by about 1 million mu per day. 
In Jilin Province, the average rainfall since late July has been 65 percent lower than the same period last year, the second driest in history. The drought-hit area is growing rapidly. In some heavily hit drought areas, the relative humidity in the soil is below 40 percent. Even in non-drought areas, it is declining daily by one to two percentage points. 
Precipitation in some areas of the Inner Mongolia Region has also hit the lowest on record since the same period in 1961. 
Source: Xinhua, August 14, 2014 
http://news.xinhuanet.com/local/2014-08/14/c_1112083359.htm

More Corrupt Officials Fall and They Fall Fast

On August 13, 2014, the Central Commission for Discipline Inspection of the Communist Party, in an unprecedented move, published a total of 10 announcements at its website, each about a high-ranking corrupt official that was disciplined. The first two announcements were posted at 09:44 am Beijing Time on August 13 on its official website. They stated that two Hubei Province officials were removed from their posts due to “serious disciplinary violations” and were being handled according to the law. One minute later at 09:45, a similar announcement was posted on the website for another Hubei official, followed by the fourth announcement posted at 11:00 (Guizhou Province). Additional announcements were posted at 16:30 (Anhui Province), 16:43 (Shanxi Province), 16:45 (Guizhou Province), 16:46 (Shanxi Province), and 16:48 (Shaanxi Province), with the last announcement posted at 17:49 (Hebei Province). The previous record was made on August 11 when an announcement was made about a total of nine corrupt officials. It was observed that one announcement about a official being disciplined may not be a big deal, but ten in one day shows that the situation is very serious. 

Source: The Central Commission for Discipline Inspection of the Communist Party of China, Case Reports, August 13, 2014 
http://www.ccdi.gov.cn/ajcc/index_1.html

People’s Daily: Obama’s Free Ride Remarks are Baseless and Ridiculous

People’s Daily issued a commentary on Obama’s remarks that China is a free rider. President Obama, in an interview with The New York Times, said that China is a global “free rider” and no one expects China do something for the world. 

According to People’s Daily, Obama’s remarks came "out of nowhere" and showed the "confused logic" of the United States. The United States has made a series of mistakes in Iraq, and is “embarrassing itself” by comparing the role it played in Iraq with that of China. The United States is the "invader" and "deserter" of Iraq, while China has been a "partner" and a "builder." 
People’s Daily first indicated that Chinese companies have built comprehensive petroleum production and processing facilities in Iraq and have completed telecommunication projects that provide coverage throughout Iraq. It then stated, “The ‘Free Rider’ remarks are baseless and truly ridiculous.” 
[Editor’s note: From the New York Times interview Aug 8 – Obama: “They are free riders. And they have been free riders for the last 30 years and it’s worked really well for them. … I’ve joked sometimes, when my inbox starts stacking up. I said can’t we be a little bit more like China? Nobody ever seems to expect them to do anything when this stuff comes up.”]
Source: People’s Daily, August 13, 2014 
http://renwu.people.com.cn/n/2014/0813/c357069-25457217.html

State Media Link Jiang Zemin with Zhou Yongkang and Bo Xilai

The People’s Daily website published a series of pictures with texts under each of them titled, “Charts: The Mysterious Petroleum Billionaire behind Zhou Yongkang.” 


The charts show that Zhou, the former Minister of Petroleum, has tightly controlled the petroleum industry through extensive and close connections both in and outside of the government. Most of these connections have been prosecuted or placed under investigation.  

The final chart shows the personal profile and rise of Zhou identifying him as part of petrochemical fraction and as someone who “knows Jiang Zemin and Bo Xilai well.” On July 29, Xinhua announced that Zhou was placed under investigation for "serious disciplinary violations.” On September 22, 2013, Bo was found guilty of corruption, stripped of all his assets, and sentenced to life imprisonment. 

The charts are no longer available on the People’s Daily website, although the title remained. 

Source: People’s Daily reprinted by Tencent Financial, July 31, 2014
http://energy.people.com.cn/n/2014/0731/c71661-25379629-5.html (See title of the article listed) http://xw.qq.com/c/finance/20140731076721

What Does the Showdown Between Xi Jinping and Zhou Yongkang Tell Us?

The day after Xinhua announced the downfall of Zhou Yongkang, it published a blog commentary entitled “What Does the Investigation of Zhou Yongkang Tell Us?” 

According to the blog commentary, first, the showdown indicates that the anti-corruption movement is pressing ahead with no return. Second, Xinhua‘s announcement did not call Zhou Yongkang “comrade” indicating a fundamental change in Zhou’s case. Third, it shows that the anti-corruption campaign has no ceiling and will go after anyone who is involved in corruption. Fourth, retirement does not shield corrupt officials from an investigation. Even after a corrupt official retires, he may still be brought to justice. Fifth, there is no scapegoat for corrupt officials. They will be held accountable for their own actions. The fall of other corrupt underlings in the past has paved the way to investigate higher-ranking officials. Sixth, there is no special procedure – even Zhou Yongkang has to be subject to the investigation of the Central Commission for Discipline Inspection of the Communist Party. 
Source: Xinhua Blog, July 30, 2014 http://big5.xinhuanet.com/gate/big5/khyyaaa.home.news.cn/blog/a/0101003E31C10D010E29FE8E.html

Seventy Percent of Coal Mining Companies Are in the Red

The level of the inventory in China’s coal mining industry reached a record high in the first half of 2014 in spite of measures to reduce the price and to restructure production. Seventy percent of these companies are in the red.

Recently, the largest 14 coal mining companies agreed on four measures. They agreed that, for the second half of 2014, they would reduce the output of their production by 10 percent; they would reduce the June level of their inventory by 50 percent; they would regulate and standardize coal imports and they would establish a self-regulatory mechanism within the coal mining industry. 
According to the statistics that the China Coal Industry Association released on July 12, 2014, as of the end of June 2014, China’s coal inventory had reached 99 million metric tons. Nine provinces had experienced industry wide losses in coal mining. Twenty out of 36 of the largest coal mining companies are in the red. Nine of those are on the brink of bankruptcy. Seventy percent of the coal mining companies in China are in the red. 
Sources: 
Securities Daily reprinted by People’s Daily, July 29, 2014 http://energy.people.com.cn/n/2014/0729/c71661-25361362.html 
Economic Information Daily, July 28, 2014 
http://news.xinhuanet.com/fortune/2014-07/28/c_126803768.htm

More Party Inspection Teams Conduct Corruption Investigations

Within days after July 29, when the announcement was made that an investigation had been instigated against Zhou Yongkang, several inspection teams of the Central Committee of the Communist Party were on their way to conduct investigations in Hebei, Shanghai, Helongjiang, and at the Chinese state-owned automotive, the First Automobile Works Group located in Changchun, Jilin Province. 

For the next two months, the inspection teams will stay in Hebei, Shanghai, and Helongjiang, respectively. They will also spend one month at the First Automobile Works Group. Xinhua has published the inspection teams’ hotline phone numbers and mailing addresses to encourage whistle blowers to contact them and report incidents of corruption and abuse of power. 
Shanghai, one of the inspection teams’ destinations, has been a long time base of the Jiang Zemin faction with which Zhou was aligned. The timing of the dispatch of these inspection teams was within three days of Xinhua’s announcement that the Central Committee of the Communist Party of China had decided to investigate Zhou Yongkang for suspected "serious disciplinary violations." Zhou is a former member of the Politburo Standing Committee of the Central Committee of the Communist Party.
Soho.com has compiled a list of 422 Party officials taken down from July 2012 to July 2014, including Zhou Yongkang.
Sources: 
Xinhua, July 31, 2014 
http://news.xinhuanet.com/politics/2014-07/31/c_1111873238.htm
Soho.com 
http://news.sohu.com/s2014/2832/s395957637/?pvid=470ca54660a1099c

In the Economic Downturn, Local Governments Increase Tax and Fines

According to Xinhua, the Ministry of Finance recently released statistics showing that China’s national revenue increased by 8.8 percent in the first 6 months of 2014, as compared to the same period in 2013. Of the national revenue increase, tax revenue grew by 8.5 percent and non-tax revenue by 11.1 percent. The national GDP increased by 7.4 percent. 

According to Zhou Tianyong, an official from the Chinese Communist Party Central Party School, the tax rate was 36 percent in 2013, but was increased to 44 percent in the first 6 months of 2014, an increase of 8 percentage points. This increase occurred in spite of slower GDP growth, slower consumption and investment growth, and a negative growth in exports. 
Zhou asked, “What does this tell us? Local governments are increasing taxes and fees right in the middle of the economic downturn. It is, in fact, a fiscal mechanism of local governments based on fines and tax increases.” 
 Source: Xinhua, July 30, 2014 
http://www.js.xinhuanet.com/2014-07/30/c_1111858664.htm