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Xi Jinping Calls on Military to Resolutely Obey the Party’s Commands

Xi Jinping, China’s President, who is also chairman of the Central Military Commission of the Communist Party, met with delegates of the People’s Liberation Army (PLA) who were attending a seminar in Beijing on Party development. During the meeting, Xi called on the military to uphold the leadership of the Communist Party and advocated strengthening Party development in the military. 

“The most fundamental reason that our military has been able to overcome all kinds of hardships and has moved from victory to victory is that the military steadfastly obeys and follows the Party. This is the soul and lifeblood of our military which we should never change or lose. The primary task of the Party’s development in the military is to ensure the CPC’s absolute leadership which is also the fundamental requirement of Party development in the military. … [Our military] must unswervingly adhere to the fundamental principle and system of the Party’s absolute leadership over the military to ensure that at any time under any circumstances the military resolutely obeys the commands of the Party Central Committee and the Central Military Committee.” 
Source: Sina.com, November 7, 2013 
http://news.sina.com.cn/c/2013-11-07/081428644456.shtml
Briefings | | |   Defense/Military

Xinhua Comments on Explosions in Taiyuan

On November 7, Xinhua published a commentary on the multiple explosions that took place in front of the Provincial Communist Party building in Taiyuan, the capital of Shanxi Province.

“On November 6, there was an explosion in front of the Provincial Party building with one fatality, one in critical condition, and seven with minor injuries. Police have found steel balls and circuit boards on the site. The preliminarily determination is that the explosions were set off deliberately.” 

“Some recent bombings have gone beyond an ordinary individual ‘venting,’ and have even put on the cloak of terrorism. As ordinary citizens, on the one hand, [we] should be vigilant and create in the whole society a situation ‘to prevent and to fight back against such actions so that acts of extreme violence will have no opportunity to start. On the other hand, we must also remain cool and calm and not exaggerate the significance of such extreme violence. China has already entered the era of a complex society. Modern terrorism and extremist activities outside China are very frequent. Inevitably there are a few flies [in China] that follow them.” 
“Security and order are still the main theme in China. The law will eventually punish any acts of extreme violence.” 
Source: Xinhua, November 7, 2013 
http://news.xinhuanet.com/comments/2013-11/07/c_118040363.htm
Briefings | | |   Social Stability

China’s Central Bank: Real Estate and Local Government Debt Are Most Worrisome

On November 6, Xinhua reprinted an article from Beijing Youth Daily on the worries that China’s central bank faces. The bank stated that real estate and local government debt have become its most worrisome macroeconomic issues. 

In the Third Quarter Monetary Policy Report from the People’s Bank of China, China’s central bank warned that inflation is likely to increase during the fourth quarter because of rising labor and service costs and higher rents. 
The bank stated that China faces many risks and challenges in its economic operations. “The new strong growth momentum remains to be formed. The economy may experience de-leveraging and capacity reduction over a long period of time. There are major problems in the real estate sector and in local government debts. The structural adjustment and transformation of the development mode remain as arduous tasks.” 
Source: Beijing Youth Daily reprinted by Xinhua, November 6, 2013 
http://news.xinhuanet.com/house/bj/2013-11-06/c_118020614.htm
Briefings | | |   Economy/Resources

Media: The Communist Party Covered up the Real Purpose of Bo’s Trial

A recent VOA report discussed how the Bo Xilai trial covered up both the political coup in which Bo had been involved and the crime of live organ harvesting.

The article reported a netizen’s comments on the end of Bo’s political life after his appeal was rejected. It quoted a tweet from a netizen named “Handsome Water:” “Bo Xilai thought he had the upper hand against the CCP’s vital position and could escape the legal punishment due because of his political coup and the crime of live organ harvesting, so he kept showing off his ‘smile’ during the trial.” “Although, Bo Xilai could escape for this moment, he will never escape for his whole lifetime. When the CCP collapses, Bo Xilai’s live organ harvesting crime will for sure be brought up and he will be tried. At that time, he will finally face his punishment under the law.”

The report didn’t specifically mention the victims of live organ harvesting. Falun Gong practitioners have been repeatedly reporting that the CCP has committed this crime against its members in China.

Earlier, Epoch Times published a special commentary on Bo’s trial, stating that he and the Communist Party acted in concert; they deliberately covered up the most crucial truth about his trial: a political coup and the persecution of Falun Gong practitioners.

The commentary pointed out that the trial was not about Bo’s strategy of “Sing Red and Strike Black.” Rather, it was about the underlying conspiracy to usurp power, which the Communist leaders could not tolerate. It further pointed out that Bo’s conspiracy to seize power was not simply a matter of personal ambition, but a major step of a group that former President Jiang Zemin, Zeng Qinghong, and Zhou Yongkang led to continue the persecution of Falun Gong and to avoid accountability for that persecution. According to the commentary, the group decided that Bo Xilai would take over instead of Xi Jinping, would continue the persecution, and would make Hu Jintao, Wen Jiabao, and other political opponents the scapegoats.  

Source:
1. VOA, October 31, 2013
http://www.voachinese.com/content/error-404-episode-64-bo-xilai-verdict/1781060.html
2. Epoch Times, September 8, 2013  
http://www.epochtimes.com/gb/13/9/8/n3959387.htm

Briefings | | |   Government/Politics

Government Think Tank on Upcoming Party Meeting’s Agenda of Reform

Chi Fulin, an economist and Deputy Director of the China Institute for Reform and Development, a government think tank, made some predictions about the Third Session of the 18th Congress of the Chinese Communist Party to be held from November 9 to 12 in Beijing. Chi looked at its agenda on economic reform.   
Chi stated that the factors of production that China has relied on, such as resources, land, and labor are diminishing, while social problems are increasing. Economic, social, and management transformation will depend on China making a major breakthrough in reform. He believes that, if the reform is successful, China’s economy may maintain moderate growth for another five to 10 years. 
Chi predicted that the six points made by Xi Jinping back on July 23, 2013, have set the theme for the upcoming Third Session of the 18th Congress of the Chinese Communist Party. The six points are to form a nation-wide, market oriented system, to further strengthen economic revitalization, to increase macro-economic control, to improve social justice and fairness, and to enhance the ability of the Communist Party to rule China. 
Source: China Review News, October 30, 2013 
http://www.zhgpl.com/doc/1028/3/4/4/102834458.html?coluid=151&kindid=0&docid=102834458&mdate=1030221536
Briefings | | |   Government/Politics

Qiushi: Next Ten Years Will See Fundamental Changes

Xu Jian, a research fellow at the China Institute of International Studies, who leads the National Social Science Fund Project, "The International Environment and China’s Strategic Opportunity," wrote an article that was published  in Qiushi magazine (Seeking Truth), a bi-monthly political theory periodical published by the Central Party School and the Central Committee of the Communist Party of China.  

Xu wrote that, compared to the first decade of the 21st century, the next decade will see a major change rather than a mere continuation of the past. The change involves the transformation and upgrading of China’s development, which will be different from the rapid expansion that occurred in the past 10 years. This is the critical difference. It reflects that the trend for China will transform from a model of rapid expansion to a model that focuses on intense development to enhance quality. Xu expressed that this major change will bring about fundamental changes in government functions, economic structure, industrial policies, and other changes in society. 
Source: Qiushi, October 30, 2013 
http://www.qstheory.cn/zz/zgtsshzyll/201310/t20131030_284033.htm
Briefings | | |   Government/Politics

Scholar: Major Economic Problems in China

The economist Gao Liankui wrote a commentary that was published in Hexun on a book that Yang Guoying wrote on the current economic problems that China faces. The economic problems that Yang identified are internal inflation and deflation, investment issues, revenue from taxation, external financial risks, and Chinese enterprises going overseas. 

According to Yang, if deflation continues for a long time, a strong and negative cycle will likely form in which recession leads to serious deflation. This would seriously accelerate the economic recession even further. 
As for the excessive investments that local governments make, it is because of these governments’ credibility and their guarantee of highly transferable assets such as land that local governments have been able to increase their debts in spite of the central government’s prohibition. 
On the deficit that local governments’ excessive investments have caused, Yang also expressed concern that the negative cycle of the increase in the deficit and of economic growth have entered an extremely dangerous phase. 
Yang also noted that the obstacles that Chinese companies face when going overseas have changed from pressure from international competitors to resistance from governments in developed countries. It comes in the form of technical resistance, intellectual property rights resistance, and political resistance. 
Yang observed that from the experiences of several Chinese companies, the excessive use of financial instruments originally meant as a hedge against risks may actually bring further risks to China’s manufacturing. 
Source: Hexun.com, October 29, 2013 
http://opinion.hexun.com/2013-10-29/159161277.html
Briefings | | |   Economy/Resources

State Think Tank on Strategies for China’s Foreign Exchange Reserves

Zhang Ming, an official from China’s Academy of Social Sciences, suggested that China, as the largest creditor of the U.S. debt may be the key to stabilize the U.S. dollar’s exchange rate. 

Zhang said that, in the long term, the U.S. exchange rate rather than the U.S. Treasury yield is the determinant for China’s purchase of the U.S. Treasury debt, thus stabilizing the U.S. dollar’s exchange rate in the foreign exchange market. When the U.S. dollar’s exchange rate is under pressure to appreciate, China will buy additional U.S. Treasury bills to help depreciate the U.S. dollars. 
Zhang recommended that China should diversify its foreign reserves within its U.S. dollar assets, rather than changing into other currencies. Also China should buy credit default swaps or S&P Volatility Index (VIX) calls to hedge against the risk that the U.S. Government may default. China should also take action to reduce the growth of its foreign exchange reserves. 

Source: Financial Times (Chinese Edition), October 23, 2013 
http://www.ftchinese.com/story/001053040

Briefings | | |   US-China Relations