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Briefings - 1008. page

China and Russia Challenge the U.S. Dollar’s Leading Position in International Trade

Chinese and Russian leaders announced on November 23, 2010,  that both China and Russia will use their national currencies to settle bilateral trade.

On November 27, 2010, China Review News predicted that "the U.S. dollar’s hegemony will collapse” when the U.S. fails to find a new “myth” to maintain its economic model that profits from increasing debts. “It is the U.S. dollar’s hegemony that has forced China and Russian to use their national currencies to settle their bilateral trade. Of course, the move that China and Russia took is a challenge to the U.S. dollar’s hegemony, though it cannot immediately end the U.S. dollar’s hegemony.”

On November 23, 2010, China Daily, on the other hand, said that the move did not directly challenge the U.S. dollar.

Sources:
China Review News, November 27, 2010
http://gb.chinareviewnews.com/doc/1015/1/9/1/101519126.html?coluid=148&kindid=0&docid=101519126&mdate=1127000659
China Daily, November 23, 2010
http://www.china-daily.org/China-News/Bilateral-trade-between-China-and-Russia-will-be-settled-in-national-currency/

Briefings | | |   Geo-Strategic Trend

The CCP Achieves 100% Coverage of Law Firms in China

People’s Daily Online published an article on November 26, 2010, reporting that, on November 25, 2010, the Organization Department of the Chinese Communist Party Central Committee and Ministry of Justice announced that the Chinese Communist Party had achieved 100% coverage of all of the law firms in China. 

By June 2009, 3,895 of the 14,741 law firms in China had their own Party branches (26%) and 8105 law firms had joint Party branches (55%). Regarding the law firms without any Party members (19%), political instructors and coordinators had been assigned to build up the Party’s presence in each of them.

Source: People’s Daily Online, November 22, 2010
http://qh.people.com.cn/GB/182778/13326203.html

Briefings | | |   Government/Politics

Xinhua Explains the Reasons for Sharp Price Increases in China

On November 22, 2010, Xinhua published an analytical article explaining why prices, especially food prices, have been increasing sharply in China. Below are the key points:

China has excess currency. China’s banking system has made 17 trillion yuan in RMB loans since 2008. The broad money supply is approaching 70 trillion yuan. The excess currency in the market leads to excess purchasing power that needs to find investment opportunities. However, the real estate market is now regulated; the stock market is in the recovery stage; and the RMB’s appreciation limits capital outflow.

In addition, the prices of agricultural products have increased in the international market. The prices of bulk raw materials have also increased. This is the result of the United States’ monetary policy and in particular, the second round of quantitative easing, and also from other countries’ loose monetary policies.

Source: Xinhua, November 22, 2010
http://news.xinhuanet.com/herald/2010-11/22/c_13616725.htm

Briefings | | |   Social Stability

The State Is Getting Richer While the Poor Get Poorer

Study Times published a article on the topic of Chinese citizen’s tax burden: "During recent years, tax revenues have drastically increased, growing faster than the GDP. Further, the GDP has grown faster than residents’ income from wages and salaries. This shows that, by distributing the nation’s wealth, the state’s share of that wealth has been increasing through its leveraging of the taxing mechanism."

Source: Study Times, November 22, 2010
http://www.studytimes.com.cn:9999/epaper/xxsb/html/2010/11/22/12/12_40.htm

Briefings | | |   Government/Politics

Study Times: Lessons for State Owned Companies to Learn from the Financial Crisis

A recent Study Times article summarizes lessons that state-owned companies should learn from the financial crisis, highlighting the role of state control:
 
1. The State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) must fulfill its obligations as regulator.
2. SASAC must lead and dominate during the election of the board of directors.
3. SASAC must further research and improve board governance and the evaluation of board members.
4. SASAC should further clarify the criteria used in appointing board members.
5. SASAC should balance between the political core role of the Party and modern corporate governance.
6. SASAC should strengthen the training and quality of board members.

Source: Study Times, November 15, 2020
http://www.studytimes.com.cn:9999/epaper/xxsb/html/2010/11/15/08/08_62.htm

Briefings | | |   Government/Politics

Party Official Urges Lawyers to Support the Party

Politburo Standing Member Zhou Yongkang urged lawyers to follow the Party line. He made a speech at a national conference of lawyers in Beijing on November 22, 2010, emphasizing that [lawyers] should diligently study recent Party directives for lawyers. "[Lawyers] must uphold the legal system of Chinese style socialism, … uphold the Party’s leadership over lawyers actions, deepen education in the socialist rule by law, and ensure that lawyers follow the socialist direction."

Source: Xinhua, November 22, 2010
http://news.xinhuanet.com/politics/2010-11/22/c_13617186.htm

Briefings | | |   Government/Politics

CBN: East Asian Foreign Exchange Reserve Will Begin Operations

China Business Network (CBN) recently reported that the East Asia 10+3 Group (the Association of South East Asian Nations plus China, Japan, and Korea) will establish an organization to run the East Asian Foreign Exchange Reserve. The 10+3 Leaders Conference, held at the end of October, made it clear that this process needs to speed up. The new organization will be called the ASEAN+3 Macroeconomic Research Office (AMRO). The primary mission of AMRO includes: (1) studying regional economics, and (2) clarifying the mechanism behind the usage of the Foreign Exchange Reserve.

It has not yet been decided who will lead this new organization. There have been several rounds of negotiations on the ratio of shares that each of the parties should hold. The primary competition is between China and Japan. Singapore was selected to be site of AMRO’s physical location.

Source: China Business Network, November 17, 2010
http://www.yicai.com/news/2010/11/602258.html

Briefings | | |   Geo-Strategic Trend

CRN: Bank Deposit-Reserve Ratio Increased Again

China’s central bank, the People’s Bank of China, announced that, starting November 16, 2010, the RMB Deposit-Reserve Ratio increased by 0.5% to 17.5%. This is the fourth time this ratio was adjusted this year. Analysts believe it is very likely the central bank will raise interest rates in a few months. Based on some estimates, every 0.5% increase freezes RMB 350 billion. Since the ratio adjustment does not ease the high inflation situation, this move is recognized as a sign of a new round of interest rate increases. China’s central bank blames the recent issuance of U.S. Dollars for China’s inflation, calling it “imported inflation.” It was also promised that “hot money” would be strictly controlled.

Source: China Review News, November 11, 2010
http://gb.chinareviewnews.com/doc/1015/0/0/7/101500716.html?coluid=45&kindid=0&docid=101500716&mdate=1111080113

Briefings | | |   Economy/Resources