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Briefings - 2. page

Duowei News: Central Administration is Extremely Dissatisfied with Municipal Government’s Slow Reform Progress

An article that Duowei News published disclosed that the Central Administration is extremely dissatisfied with the slow reform progress that local governments are making. The article quoted a former Deputy Director from the Finance Office who spoke at the recent Lujiazui Forum in Shanghai (http://chinascope.org/wp-admin/edit.phpai). He claimed that in the past two years, the Central Administration has shifted its focus and made progress on financial crisis prevention. However, the efforts that the local governments and State Owned Enterprises (SOEs) are making are sorely lacking. Examples he listed included some municipal entities that resist the deleveraging measures that the Central Administration has launched; some can’t even pay back the interest on their debt, where the total debt at the municipal level is 40 trillion yuan (US$6 trillion). Meanwhile the SOEs are slow in reducing their excess capacity.

Source: Duowei News, July 10, 2018
http://news.dwnews.com/china/news/2018-07-10/60069825.html

Ministry of Publicity Issued Guideline to Minimize Impact of Realism Movie “Dying to Survive”

A successful movie release based on a true story called “Dying to Survive” became a box office hit in China. The story touched the general public but the Department of Publicity had to face some backfire. This realism film told the story of a Chinese leukemia patient who couldn’t afford imported cancer treatment drugs and was forced to turn to India to buy cheap generic drugs. He was then arrested and punished. The Douban film review website rated the movie 9.0. The movie made over 1.3 billion yuan (USD$200 million) in box office revenue in just four days after its release on July 5. According to RFA, the official’s initial intent was to set the timing of the movie so it was released right around the start of the trade war hoping to incite resentment among the Chinese public towards foreign governments and pharmaceutical companies for the high cost of imported drugs. Little did they anticipate the level of unhappiness among the general public in China about the high cost of medical care. They also did not anticipate that the Chinese people would understand that it was the Chinese officials and the medical system that caused the real problem of the high cost of drugs and medical treatment in China.

RFA reported that the Ministry of Publicity issued a verbal notice on Sunday July 8. The notice required that all media must follow the guidelines of “not interviewing, not reporting, not commenting, and not referring to the movie.” It also asked the official media to strengthen public opinion guidance, pointing to the criticism of foreign pharmaceutical companies, emphasizing that the Chinese government has imposed zero tariffs on imported anti-cancer drugs, and that the government is working hard to require foreign drug companies to cut their prices. The RFA article stated that it is the Chinese government that sets the price of drugs, especially of imported generic brand drugs. Even though it announced that, starting on May 1 of this year, it would not impose tariffs on imported drugs, the price of drugs still remains high.

Source: Radio Free Asia, July 9, 2018
https://www.rfa.org/cantonese/news/medicine-07092018074900.html

People’s Daily Opinion Articles Attack U.S. for Launching Sino-U.S. Trade War

Since last Friday, People’s Daily has published a series of opinion articles on the Sino-U.S. trade war. Below are highlights from two of the opinion articles.

In the article it published on July 11, titled “Be wary of the ‘cold war trap’ that US unilateral protectionism has set up,” it attacked the U.S. “not only for seriously jeopardizing the safety of the global industrial chain and value chain, but also for hindering the pace of economic recovery. It (the U.S.) also brings the risk of sliding the normal world economic and trade pattern into trade protectionism and unilateralism in a ‘cold war trap.’” The article called out the following actions that the U.S. has taken in order to “expose the poisons the U.S. brings to international relationships.” It politicizes the trade issue; it has resumed the 232 investigation; withdrawn from the TPP, the Paris Agreement, the United Nations Educational, Scientific and Cultural Organization, and the Iran Deal; it has openly violated World Trade Organization regulations and has used the investigation results from 301 to impose tariffs on other countries; it expanded the definition of national security and frequently seizes foreign investments in the high-tech field.

In a report published on July 9, titled “The U.S. ‘Zero Sum Trade Theory’ is a kind of evil that harms the world,” it claimed that the trade war the U.S. launched against China has drawn criticism from the international community. “The zero sum trade war game that the U.S. is playing is against the law. It not only impacts Sino-US economic and trade cooperation, but also brings great uncertainty to the entire world economy.” The article claimed, “Under its zero sum mentality, ‘America First’ is evolving into extreme self-interest.” The article stated that in 2017, the trade between China and the U.S. reached US$583.7 billion. It was 233 times what it was after the establishment of diplomatic relations between the two countries in 1979. The article further claimed that, “The huge Chinese market that the world values is increasingly becoming an important business growth point and profit consideration in the global strategy of U.S. companies. … Let other countries sacrifice their own core interests to pay for the unreasonable demands of the U.S. This is a backward and outdated concept of trade.”

Source:
1. People’s Daily, July 11, 2018
http://opinion.people.com.cn/n1/2018/0711/c1003-30138897.html

2. People’s Daily, July 9, 2018
http://opinion.people.com.cn/n1/2018/0709/c1003-30133557.html

China’s Direct Investment in the U.S. Went into Free Fall

Well-known Chinese news site Tencent News recently reported that, according to an independent study that the Rhodium Group conducted, in the first five months of this year, China’s direct investment in the United States (including mergers) saw a year-over-year sharp decline of 92 percent, to US$1.8 billion. This is the lowest level in seven years. If one counts the sell-off of China-owned U.S. assets, China’s direct investment in the U.S. is actually -US$7.8 billion. The drama of Chinese companies “sweeping” the U.S. market with mega-deals has “faded into history.” The same statistics in 2016 were a completely different story. China’s direct investment doubled in 2016 to $46 billion. Since the second half of last year, the Chinese government has put a very tight control over out-flowing capital. As Xinhua has indicated, starting early this year, in the name of national security, the U.S. government has subjected Chinese investments to tight reviews. The Committee on Foreign Investment in the United States (CFIUS) has stopped many Chinese investment projects. Many Chinese companies are still in the process of selling their U.S. assets.

Source: Tencent News, June 21, 2018
https://kuaibao.qq.com/s/20180621A0KR3S00?refer=spider

Chinese Foreign Exchange Administration Warned about Illegal Activities

Well-known Chinese news site Netease recently republished a report from Xiamen Daily News that the State Administration of Foreign Exchange, Xiamen Branch, issued a public risk warning on illegal foreign exchange activities. The warning said that, without approval and authorization from the Administration, no organization is allowed to conduct the business of exchanging Chinese currency for any foreign currencies. Any organization without a permit will have to face law enforcement. The warning listed the authorized local commercial banks as well as companies that have a permit. Some companies may require a prior appointment for doing an exchange transaction. {Editor’s note: before the great Reform that Deng Xiaoping started, China used to have a large foreign exchange black market. In the past few decades, since the government authorized organizations have had an ample supply of foreign currency, especially the U.S. dollar, the black market nearly disappeared from everyday life. However, recently, the Chinese government has been tightening up the supply of U.S. dollars.}

Source: Netease, July 2, 2018
http://xiamen.news.163.com/18/0702/16/DLNKIL2504418D23.html

China’s First Batch of Graduates with Masters Degree in United Front Studies

The Central Institute of Socialism (CIS), the Chinese Communist Party’s training and education facility for its officials, recently saw its very first batch of graduate students receiving Master’s degrees with a major in united front studies. The program is a joint effort between CIS and Shandong University and was launched in 2015.

The united front is an alliance of groups against {communism’s} common enemies. They employ a tactic that socialism and communism have carried out in their revolutionary political and/or military campaigns. The Comintern, an international communist organization that former Soviet communists created in the wake of the 1917 Bolshevik Revolution first developed the theory.

According to the thesis of the 1922 4th World Congress of the Comintern:

“The united front tactic is simply an initiative whereby the Communists propose to join with all workers belonging to other parties and groups and all unaligned workers in a common struggle to defend the immediate, basic interests of the working class against the bourgeoisie.”

Chinese Communists extensively adopted this tactic during communism’s earlier years, before 1949, when carrying out propaganda and military campaigns against Nationalists. In later years, it also used the united front in its international politics, such as the recent attempts to ally with the European nations and to strike back at the tariffs that the U.S. imposed. According to the Jamestown Foundation, “The United Front Work Department (中共中央统一战线工作部) is the department of the CCP charged with consolidating support for Party policies among non-CCP members, including among individuals of Chinese descent overseas. It is has long been a key, albeit well concealed, element of the CCP’s foreign policy.”

The majority of studies on the united front at CIS include four fields of research: the theory and policy of the united front, China’s system of political parties, the theories of ethnic groups and religions in the united front, China’s traditional political thought, and the culture of the united front. In Shandong University, the program is housed in the School of Political Science and Public Administration, a subsidiary program under Political Science. Since its launch in 2015, the program has recruited 38 doctoral and 50 masters degree students.

Li Jinhe, a professor at CIS, said, “The united front is the study of the laws regarding the governance of the Chinese Communist Party. This is very important.”

Sources:

1. Central Institute of Socialism, July 4, 2018
http://www.zysy.org.cn/a1/a-XDI93M823C37528A39F066
2. Jamestown Foundation, June 19, 2018.
https://jamestown.org/program/understanding-the-role-of-chambers-of-commerce-and-industry-associations-in-united-front-work/

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