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Briefings - 1112. page

China May Discount J10 Fighter Plane

Eastday Website, the largest portal site in Shanghai, reported that China is likely to sell its J10 fighter plane on the international weaponry market at a discount. The Eastday report is based on a report from the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore. Eastday Website is partially owned by state-owned enterprises. The Rajaratnam School report stated that most of China’s weapon offerings lack technical competitiveness. Its buyers are limited to a few developing countries. To expand its weaponry sales, China may offer its J10 fighter jet at a discount. J10’s performance is similar to Israel’s Lavi fighter jet or the U.S. F-16C. Pakistan and Iran are likely to be the buyers of the J10.

Source, Eastday Website, June 5, 2009
http://mil.eastday.com/m/20090605/u1a4416686.html

Briefings | | |   Defense/Military

Behind China’s Largest Overseas Investment

The International Herald Leader published an article on the collapse of Rio Tinto’s controversial deal with China’s state-owned aluminum company, Chinalco. The Chinalco’s deal, valued at $24.3 billion, would have been China’s largest investment in a foreign company. Rio recently announced to would combine its large iron ore operations with BHP Billiton instead. 

The International Herald Leader blamed the scrap of the Chinalco deal on political reasons, mainly western countries’ anti-China mentality. The article stated that many politicians in the Canberra Congress raised the issue as jeopardizing Australia’s national interests. “The loss of the Chinalco Rio deal is not a loss of market competition, but rather a sacrifice resulting from a new form of ‘Cold War’ thought.” 
[Editor’s Notes: After Rio’s deal with Chinalco was announced, Australian businessman Ian Melrose spent $200,000 on television advertising, using images from the 1989 Tiananmen Square Protest to warn that the Chinese government-owned Chinalco should not be allowed to raise its stake in Rio Tinto to 18 per cent thereby increasing its control of Australia’s resources.] 
Source: International Herald Leader, June 8, 2009

http://news.xinhuanet.com/herald/2009-06/08/content_11506794.htm
Briefings | | |   Economy/Resources

China Loosening Controls over Domestic Enterprises’ Overseas Purchases

Nanfang Daily reported that China has made policy changes to smooth the process for domestic enterprises to buy properties overseas. There are three check points for such purchases: National Development and Reform Commission (NDRC) – checks on whether the investment is in line with national interests; Ministry of Commerce – checks on trade balance, anti-trust, WTO suit, etc; and State Administration of Foreign Exchange – approves use of foreign currencies. The Ministry of Commerce has relaxed their control.

In 2009, the State Administration of Foreign Exchange published “Foreign Currency Management Regulations on Domestic Enterprises’ Overseas Investments (Draft of Soliciting Opinions),” which changed the funds source verification process from approving before the investment to recording after the investment.

The Ministry of Commerce published “Measures for Overseas Investment Management” in March. The regulations have the following changes: 1. Ministry of Commerce will only review and approve a limited number of large overseas investments. 2. The process is simplified so that most companies only need to submit a form and receive an investment certificate in three working days. 3. The financial viability and feasibility of the investment is left to the company to decide.

Source: Nanfang Daily, June 2, 2009
http://www.nanfangdaily.com.cn/epaper/nfrb/content/20090602/ArticelB03002FM.htm

Briefings | | |   Economy/Resources

China News: Calling for Chinese Oil Futures for the Power of Setting International Oil Price

China News, a state owned and internationally oriented Chinese news agency, recently reported on the idea of having Chinese oil futures. The Chairman of the China Securities Regulatory Commission and the Deputy Mayor of Shanghai delivered speeches that indicated the State Council intended to introduce crude oil, gasoline, diesel and asphalt futures at the Shanghai Futures Exchange. The Exchange has been pushing the oil futures for quite some time and the system is ready. However, the Chinese oil industry is highly centralized and the related oil companies are not willing to give up the pricing monopoly. Another major barrier is foreign exchange control, which prevents international players from participating in the commodity trade.

Source: China News, June 2, 2009.
http://www.chinanews.com.cn/cj/cj-gncj/news/2009/06-04/1719401.shtml

Briefings | | |   Economy/Resources

Qiu Shi: Globalization, Financial Crisis and International Cooperation

Qiu Shi, a magazine by CCP Central Committee, published an article on global economies by Professor Zhang Boli, a member of the Administrative Council of the CCP Central Party School. The article suggested that the solution to the global financial crisis is international cooperation. Aspects of the suggested cooperation include: establishing a healthy global economic and financial system; restraining protectionism; enhancing financial supervision and control; reforming the international currency system; and strengthening regional economic cooperation.

Source: Qiu Shi, June 1, 2009.
http://www.qsjournal.com.cn/qs/20090601/GB/qs%5E504%5E0%5E26.htm

Briefings | | |   Economy/Resources

Deutsche Welle: CCP Structural Change – College Graduates Join the Party to Get Better Jobs

Deutsche Welle recently published a digest article based on a report by Friday Weekly – a Hong Kong based magazine. The report focused on female college graduates who are applying for Communist Party membership. The students believed that the structure of the Party is changing due to the fact that 30% – 50% of students apply for Party membership. Although the students generally find the Party’s theories very boring, they are interested in better job opportunities. The Party welcomes young idealists with outstanding academic records and leadership capabilities – though the students are often just acting to demonstrate these qualities.

Source: Deutsche Welle
http://www.deutsche-welle.de/dw/article/0,4307287,00.html

Briefings | | |   Government/Politics

Study Times: Regionalizing RMB will Promote Asian Economies

On June 1, 2009 the Study Times wrote that China should push Reminbi regionalization starting from border trade settlements and direct investment in neighboring countries. Study Times is the journal of the School of the CCPC. The article believes that this step is the key to Asian economy. In doing so, “China should leverage the existing bilateral currency settlement agreements with Korea, Hong Kong and Malaysia to further deepen and expand RMB cooperation in the region. Moreover, China should take advantage of financial markets in Hong Kong in engaging in RMB offshore business, thus making Hong Kong the hub for distribution of RMB to neighboring countries.”

Source: Study Times, June 1, 2009
http://www.studytimes.com.cn/WebPage/ny1.aspx?act=1&id=2685&nid=9756&bid=4&page=1

Briefings | | |   Geo-Strategic Trend

Employment Challenge for College Graduates

Xinhua republished an article from China Youth, which states that as of June 4, only 2.75 million college graduates, 45% of the total number of graduates this year, have received job offers. To ease the unemployment pressure, the government is creating basic level positions in the countryside, remote towns, and less-developed areas and encouraging the graduates to go there.

Source: Xinhua, June 5, 2009
http://news.xinhuanet.com/politics/2009-06/05/content_11489469.htm

Briefings | | |   Economy/Resources