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Scholar Calculates ‘Hidden Income,’ Challenged by Statistics Bureau

Wang Xiaolu, a scholar at the National Economic Research Institute under the China Reform Foundation, recently published an article that calculates the 2008 urban residents’ “hidden income” to be as high as 9.26 trillion yuan, about 30% of the year’s gross domestic product (GDP). Wang believes that the existence of gigantic amount of “hidden income” or “grey income” shows the severe distortion of the distribution of national income. The sources of the “hidden income” include corruption, and other means of misappropriation of public funds and private wealth.

On August 24 and 25, the National Bureau of Statistics published two articles on its website, confronting Wang’s study by questioning its methodology.

Source: Jinghua Daily, August 26.
http://epaper.jinghua.cn/html/2010-08/26/content_580292.htm
[Editor’s Note: Jinghua Daily is a Beijing local newspaper]

Briefings | | |   Economy/Resources

China Review: Key Focus of the US-China Relationship is Shifting

“The U.S. is shifting the focus of the U.S.-China relationship from the economy to politics, the military and security,” according to a commentary by the China Review, citing the recent U.S.-Korea military exercises, Hilary’s statement and the appearance of the U.S. fleet in the Yellow Sea.

The commentary suggested that the shift was caused by the U.S. inability to have China change its currency exchange rate while China remains as the largest debt holder of the U.S. The recent actions taken by the U.S. in Asia were to take over its lost influence from China, increase its strategic pressure on China and limit China’s overseas expansion.

Source: China Review, August 25,2010
http://gb.chinareviewnews.com/doc/1014/1/9/4/101419440.html?coluid=1&kindid=0&docid=101419440&mdate=0825001912

Briefings | | |   US-China Relations

Party Political Bureau Passed ‘Opinions to Exercise Open Management of Party Affairs’

On August 20, the Party Political Bureau passed the “Opinions to exercise open management of party affairs at the party’s grass roots level," thus giving more flexibility and less restrictions.

The meeting emphasized inter-party democracy and called for exercising open management of party affairs, separation of party affairs from management administration and increasing party members’ rights to participate in party affairs.

Source: China Review News, August 20, 2010
http://gb.chinareviewnews.com/doc/1014/2/0/9/101420920.html?coluid=151&kindid=0&docid=101420920&mdate=0820143209

Briefings | | |   Government/Politics

Ministry of Justice Completes First Round of Training of 2,799 Directors from the Judicial Bureau

The Party Organization Department within the Ministry of Justice organized a 10-day training session, which was attended by 2,799 Directors of the Judicial Bureaus at the city and county levofel. The training encompassed eight sessions and lasted one year.


The main areas of the discussions were carrying out the “three-key-works,” covering the reduction social conflicts, renovating social management, practicing clean government and enforcing social justice. It also included topics on maintaining social harmony, stability, and promoting economic development. Over a dozen experts and professors from the Central Party School conducted forums on strengthening party development at the grass roots level, various measures in handling sudden incidents, and guiding public opinion.

Source: Legal Daily, August 23, 2010
http://www.legaldaily.com.cn/China_legalaid/content/2010-08/23/content_2254379.htm

Briefings | | |   Social Stability

Wen Jiabao: Advancing Political System Reform

Wen Jiabao stated “(We) should not only advance economic system reform, but also advance political system reform. Without the guarantee of political system reform, the results of the economic system will be lost, and (China’s) modernization goal won’t be reached.” Wen made this speech when he visited Shenzhen City on August 21, 2010. China News Service reported that Wen’s “political reform” statement has profound meanings behind it.

The Epoch Times pointed out that Wen’s speech exemplified that the discord between the CCP “Reformists” and the “Conservatives” has surfaced amidst an intensified power struggle for the upcoming 18th Party Congress. The “Conservatives,” the majority of whom are the CCP “Princelings,” want to have Xi Jinping as the new President and Bo Xilai as the new Prime Minister. The “Reformists” wish to drive the Princelings out of the power center and endorse Li Keqiang as the President and Wang Qishan as the Prime Minister. Wen’s speech is a strong statement by the “Reformists.” Wen also talked about political system reform during his interview with NHK in Tokyo on June 2.

Sources:
1. China News Service, August 23, 2010
http://www.chinanews.com.cn/hb/2010/08-23/2483336.shtml
2. The Epoch Times, August 23, 2010
http://www.epochtimes.com/gb/10/8/23/n3003233.htm

Briefings | | |   Government/Politics

PLA Conducting Information-Based Training

The PLA’s seminar and viewing activity, coded as “Sharpened Sword 2010,” on military training under information-based conditions, started in Beijing on August 23. It lasted for five days. More than 100 mid-level or senior officials from the PLA and the Armed Police will discuss major military issues, including how to improve combat capability over information systems and advance the transition of military training towards information-based training.

Since 2007, the PLA’s military training has been transitioning towards information-based training. It now includes base training, simulation training, and Internet training and focuses on being under complicated electro-magnetic conditions.

Source: Xinhua, August 23, 2010
http://news.xinhuanet.com/2010-08/23/c_12476015.htm

Briefings | | |   Defense/Military

China Review News on Circulating the Renminbi Overseas

The People’s Bank of China recently published a “Notice on Issues of Three Types of Organizations, Including Offshore Renminbi’s Clearing Houses, Investing the Renminbi in Banks’ Bond Markets.” China Review News quoted an article by the Shanghai Securities News, commenting that it will improve the Renminbi’s circulation overseas to create the condition for it to “come back” after “pushing it out,” moving forward the goal of making the Renminbi a major foreign exchange currency.

The article stated that there are 3 ways to push the Renminbi to “go abroad.” They are: currency exchange between China and other countries, using the Renminbi for cross-border trade settlement, and Hong Kong’s Renminbi’s offshore market. The article then argued for establishing a Renminbi onshore market in Shanghai to provide a better condition for the Renminbi to circulate back.

Source: China Review News, August 24, 2010
http://gb.chinareviewnews.com/doc/1014/2/4/1/101424105.html?coluid=53&kindid=0&docid=101424105&mdate=0824074956

Briefings | | |   Economy/Resources

CRN: Aircraft Carrier George Washington Drops out of Exercise

China Review News (CRN) reported that the reason behind the heavy weight U.S. aircraft carrier dropping out of the Yellow Sea exercise was the result of risk assessment. The report believed that the U.S. did not want to “anger” China. It is also believed that China’s biggest advantage is its strong economy. Some Chinese military experts suggested that the aircraft carriers are the “last card” the U.S. can play, and the “U.S. cannot play the same card every day.” Another reason the report discussed was that Asia-Pacific countries welcome the United States less and less, because the U.S. economy is no longer the main engine that runs the economy of these countries.

Source: China Review News, August 21, 2010
http://gb.chinareviewnews.com/doc/1014/2/1/5/101421571.html?coluid=45&kindid=0&docid=101421571&mdate=0821085716

Briefings | | |   Defense/Military