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China Review News: Sino-US dispute over the exchange rate will be a long-term one

On April 22, 2010, www.chinareviewnews.com published an article, “Sino-US dispute over the exchange rate will be a long-term one” by Wang Dong, a Chinese researcher in Beijing.

Wang said that Obama’s government has never given up on pressuring China to increase the RMB (Chinese currency) value, resulting in the current Sino-US trade friction and a growing number of disputes. Wang further said that the depreciation of the U.S. dollars will cause drastic shrinkage of China’s foreign currency reserve assets, lead to global inflation, and make China’s exports more difficult.

However, Wang pointed out that RMB appreciation will increase Chinese people’s confidence in domestic assets calculated in RMB and thus ease inflation pressure. In addition, a stronger RMB will inevitably speed up the internationalization of the RMB and thus diversify the international currency pattern.

Source: www.chinareviewnews.com, April 22, 2010
http://gb.chinareviewnews.com/doc/1012/9/8/0/101298092.html?coluid=123&kindid=0&docid=101298092&mdate=0422163437

Briefings | | |   US-China Relations

Half of Chinese Luxury Goods Used as Gifts

China has become one of the major luxury goods consumers in the world. A recent Bain survey showed that, in 2009, Chinese spent $9.6 billion on luxury goods, which accounts for 27% of the world total, while China’s GDP only accounts for about 5% of the world GDP. According to Boston Consulting Group (BCG), the consumption of luxury goods in Chinese will reach 40 billion USD by 2015; Bain’s estimation for 2015 Chinese luxury goods expenditures is 14.6 billion USD. According to another consulting firm, McKinsey, about half of the Chinese luxury goods are used as gifts. 

Source: Radio Free Asia, April 22, 2010 
http://www.rfa.org/mandarin/yataibaodao/shechi-04222010100130.html
Briefings | | |   Economy/Resources

China to Merge Phone, TV, and Internet Networks by 2015

According to the “2010 Mass Communication Bluebook” released by the Chinese Social Science Academy, the State Council Standing Committee decided to merge the business scope of the three network industries – telecommunications, broadcasting (radio and TV), and the Internet. Telecommunication companies will be allowed to be involved in production and broadcasting of TV/radio programs; while TV/radio networks may also begin operation of some basic or value-added telecommunication business. The Committee also planned the stages of the merge: 2010 through 2012 would be the trial period; 2013 through 2015 would be the promotion of the merge on a larger scale to promote certain competition and to set up corresponding institutions and regulatory bodies for the merged business models of the three networks. 

Source: People’s Daily, April 22, 2010 
http://politics.people.com.cn/GB/1026/11430260.html
Briefings | | |   Information/Technology

About the Chinese Model

Xu Chongwen, a senior research fellow at the State’s Chinese Academy of Social Sciences published a criticism of “four misconceptions” of the Chinese model. His article is summarized below.

Misconception 1: The term was first coined by foreigners with the ulterior motive of containing China’s expansion. Not true because Deng Xiaoping used the term back in 1980 when discussing the Russian October Revolution. 
Misconception 2: The term “model” means example or demonstration for others to follow; hence one should be cautious when using the term. Wrong because it contradicts Deng Xxiaoping who held countries should independently seek development paths and models suited to their own situation. 
Misconception 3: The Chinese model is the "Beijing Consensus" for the reference use of other countries. Disagree because Joshua Cooper Ramo’s Beijing Consensus was coined to mean opposition to the Washington Consensus. The Chinese model is to develop China based on its own situation and China has no intent to promote it the same way that the Washington Consensus has been promoted.
Misconception 4: It is too early to talk about a Chinese model. This is without grounds. Hu Jintao has set forth the theory on building a harmonious society. No one should use it to deny that the achievements of the Chinese model have already been well recognized.

Source: The Party School of The Chinese Communist Party, April 13, 2010
http://www.cntheory.com/news/Llltllyt/2010/413/1041393831I6EFADA9CEE5413J46J9.html

Briefings | | |   Government/Politics

State Continues to Dominate Reform of Culture System

An article on reform of China’s culture system was published on the website of the Party School of the Chinese Communist Party, addressing bottlenecks and recommendations. The reform moved from pilot programs to full implementation in March 2006. One of the key bottlenecks, according to the article, is “some of the culture enterprises blindly maximize their market profits,” and “have increasingly led to economic benefits diverging from social benefits” and to a greater disparity of income. The recommendation is to uphold the Party’s leadership in the reform, adherence to Marxism and ensuring the dominance of state-owned culture enterprises in the culture market.

Source: The Party School of The Chinese Communist Party, April 14, 2010 http://www.cntheory.com/news/Dshcdssdjt/2010/414/104141520769BBIIKAJ192JK20I11F.html

Briefings | | |   Government/Politics

Disparity of Income Distribution: A Long March from Pyramid Pattern to Olive

Yu Jianrong, a professor at the State’s Chinese Academy of Social Sciences, predicts that it will take another 30 years for China to move from the current pyramid pattern of income distribution to one that is olive-shaped. The pyramid pattern of income distribution is used to describe the great disparity of income, intense social conflicts, and the lack of a middle class as a buffer, while an olive-shaped pattern denotes the existence of a large middle class with relatively small groups of rich and poor. Hence it is more conducive to social stability. Yu holds that a middle class has not yet formed in China whatsoever. “For example, the popular ‘hatred of the rich’, ‘hatred of government’ and other social discontent and resentment are both the evidence and ‘combustion’ that has induced large-scale incidents of conflict by social groups to vent their anger.” “People at the bottom are growing in numbers, albeit economic development and improvement of living standard for the bottom society.” “Objectively, the white-collar workers are a little bit more capable of making money, but speaking of their social situation or political status, they are the same [as migrant workers],” says Yu.

Source: International Herald Leader, April 19, 2010
http://news.xinhuanet.com/herald/2010-04/19/content_13383024.htm

Briefings | | |   Social Stability

Nanfang Metropolitan: Loving Ones Country Does Not Mean the Same as Loving the Imperial Court

On April 11, 2010. Nanfang Metropolitan published an article by History Scholar Hong Zhenquai, “Loving Ones Country Does Not Mean the Same as Loving the Imperial Court.” The article suggested that nowadays many people misunderstand the relationship between the people, the country, and the imperial court (or the government in modern society). Mencius [a philosopher from the fourth century B.C. who defended the teachings of Confucius against other philosophies] made public that “people are the most important, followed by the country, with the emperor coming last.” An explanation for the confusion is that the sitting government misleads people into believing that “loving the court is representative of loving the country.”

The article makes a case for people having oversight and control over the government. The article received a lot of compliments for its boldness, given the CCP’s media control. An unconfirmed blog message on Aiyuan said that Nanfang Metropolitan Editor Zhu Di was chastised (and lost her job) for publishing the article. The article is no longer available on the website of Nanfang Daily (Nanfang Metropolitan’s parent company), but can be found on many overseas Chinese sites.

Source:
1. Tianya website, April 14, 2010
http://www.tianya.cn/publicforum/content/develop/1/408089.shtml
2. Aiyuan website, April 17, 2010
http://aiyuan.wordpress.com/2010/04/17/%E4%B8%80%E7%AF%87%E8%AE%A9%E7%BC%96%E8%BE%91%E4%B8%A2%E6%8E%89%E9%A5%AD%E7%A2%97%E7%9A%84%E6%96%87%E7%AB%A0%EF%BC%9A%E7%88%B1%E5%9B%BD%E5%AE%B6%E4%B8%8D%E7%AD%89%E4%BA%8E%E7%88%B1%E6%9C%9D%E5%BB%B7/

Briefings | | |   Government/Politics

Chinese Scholar: Five Challenges to China’s Modernization

Zhang Xin, Professor and Ph.D. Advisor to the Marxism Institute, People’s University outlined five challenges to China’s modernization process. Zhang furthered his thoughts during one of a series of interviews on "Studying and Practicing the Scientific Concept on Development" organized by Xinhua Net.

The five challenges are:
1. Countryside Modernization – the urban-rural gap is getting wider
2. Environment – a challenge China has been facing over a long period
3. Resources
4. Regional Development Imbalance
5. Relatively Backward Technology


The greatest conflict that China faces is the conflict between interests. While China experiences exceptional economic growth, problems related to social security, an urban-rural gap, a regional economic development gap, and problems in taking people’s homes/land for new development are all interest-related conflicts that threaten social stability.

Source: Xinhua, April 19, 2010
http://news.xinhuanet.com/video/2010-04/19/content_13383544.htm

Briefings | | |   Economy/Resources