Skip to content

Reports - 42. page

The United States Faces More Copyright Piracy Than Any Other Country

Piracy of intellectual assets has been one of the biggest dissensions in the field of commercial trading between the United States and China. Many U.S. products, especially those of patented intellectual properties, get pirated in China, which have led to great losses for American merchants. Although the United States government frequently condemns China on this issue, the government of China does not give any apologies. Whenever facing this kind of criticism, the Chinese government usually responds in the following way: “If you say I am not good, I will just say that you are not good either.” It uses this against criticism of China’s human rights issues from the United States, as well as when the U.S. Department of Defense published the report on China’s military situation. Below is an article from Globe, a magazine under the Xinhua News Agency. The article points out that, “as the biggest producer and exporter for audio and video products, the United States is facing even greater challenges from copyright infringement than any other country.” [1]

The United States Suffers the Most in the World from Copyright Piracy

The Institute for Policy Innovation of the United States published a report recently. According to the report, “each year, copyright piracy from motion pictures, sound recordings, business and entertainment software and video games costs the U.S. economy $58.0 billion in total output, costs American workers 373,375 jobs and $16.3 billion in earnings, and costs federal, state, and local governments $2.6 billion in tax revenue … The study found, among other things, that these IP (intellectual property) industries are the most important growth drivers in the U.S. economy, contributing nearly 40 percent of the growth achieved by all U.S. private industry and nearly 60 percent of the growth of U.S. exportable products.” [2]

As the biggest producer and exporter for audio and video products, the United States is facing even greater challenges from copyright infringement than any other country.

The Pirate Party of the United States Founded

A reporter of Globe recently had a phone interview with Seth Oster, the spokesman of the Motion Picture Association of America (MPAA). He was participating in an anti-piracy event hosted by the MPAA. Oster said that the U.S. movie market occupies more than one third of the world movie market; due to great impact of piracy on the movie market and the fact that the United States has the biggest consumer market for family entertainment, one indeed can say that the United States suffers the most from copyright piracy.
For all the markets where piracy plays a role, the markets of motion pictures and sound recordings have the worst situations. In 2005, the MPAA, an association composed of six big movie producers of Hollywood, did a large-scale investigation. It showed that the U.S. movie market had lost $6.1 billion dollars to global piracy [in 2005]. Among this, $3.8 billion came from pirated CDs and DVDs, and $2.3 billion came from illegal transmissions and downloads on the Internet.

In terms of geographic locations, the loss of $1.3 billion happened in the United States, which is higher than the $1.2 billion of the Asia-Pacific region, which was considered the catastrophe region by Hollywood.

In the past several years, the severe piracy activities in the United States have forced the MPAA to ally with law-enforcement branches and strengthen cracking down on piracy.

Oster told the reporter that although the U.S. laws strictly protect intellectual property and the law-enforcement branches spare no efforts in cracking down on piracy activities, as an “investment” that has low cost and fast profits, piracy still attracts many people who are willing to take the risk. Oster said that the development of consumer electronics and disc duplication technology have lowered the technical barrier by a lot. According to estimates, a pirate needs only about $1000 to make a mother disc for a movie and then can duplicate on a large scale. Recently in major cities, there have also been criminal gangs and organizations involved in production and circulation processes, especially some minority groups that have close relationships with international markets. Some criminal organizations even use the profits gained from selling pirated CDs in the drug market, firearms trading, human trafficking, and other criminal activities.

There was something interesting that was related to this. The Pirate Party of the United States has recently formally declared to be founded. This is the first political party in United States that has the political aim of opposing copyrights. After its establishment, it immediately accused a number of media organizations, including the MPAA, of limiting technology development and restraining individual citizens’ freedom.

“They put strict limitations on common Americans, utilize fake files to attack P2P sharing networks, and use political tools to modify the laws and make political bribes.”— From the Pirate Party’s proclamation.[3]
Black Chains on the Streets

In big cities such as Los Angeles and New York, the degree of severity of selling pirated DVDs is no less than in any Asian cities. It is especially bad in places where concentrated minorities reside, because these are the dead spots for law enforcement by police.

A pirated DVD of a new movie costs $5 on the street. It is even lower than a ticket for the movie theater. It is much cheaper than the genuine version that comes out 2 months later, which costs about $20. Even in a medium size city such as Washington, D.C., there are also a number of fixed spots that sell pirated DVDs.

What U.S. officials hate the most are underground black markets, but there is not much they can do. In these black markets, the main and popular items are those counterfeit items of famous brands and pirated digital audio and video products. Most mimicries of famous brand products, such as Louis Vuitton purses, a famous French brand, come from New York markets and then flow into third-world countries. Pirated DVDs are usually duplicated in underground shelters with large-scale duplication equipment.

New York City and Los Angeles can be recognized as headquarters of black markets for counterfeit items. Along the roads near Hollywood, there are vendors all around. They put the goods over rugs on the ground, and there are thousands of tourists from around the world attracted to these places.

An insider told the reporter that according to what he has found out, there is a very big underground factory in Los Angeles for making pirated products. The boss of the factory is extremely powerful; he can obtain the mother disc simultaneously as a new movie is played the first time in the theaters, and within one night, tens of thousands of DVDs will be transported to other cities and even other countries.

The reporter of Globe also got to know from the MPAA that due to the improved protection schemes for preventing piracy, right now the main method for obtaining the source of the new movies is using hand-held video cameras to directly record the movies that are playing for the first time in the theaters. This method does not produce perfect quality DVDs, but it is very common today on the U.S. black market. In order to avoid strict security measures in the theaters in major cities, the pirate organizations even send people to small towns to record new movies. Oster, the spokesman of the MPAA, said that in the past year, there are people all over the United States that were arrested for secretly recording movies using video cameras.
According to U.S. laws, infringing copyrights is a federal felony. However, since September 11, the law-enforcement branches, such as the FBI, have been putting their main focus on anti-terrorism. Therefore, to some degree the strength against piracy has declined. This is thought to be the reason for the overflow of pirated products.

However, in 2005, some law-enforcement personnel creatively attempted to relate piracy and terrorism. For instance, a police officer in Los Angeles who is responsible for investigations of intellectual property said in Congress while he was testifying that some members from terrorist organizations have likely been involved in piracy activities. This has caught the attention of the congressional representatives concerning the increasing severity of piracy.

As the piracy situation is getting worse and worse in the United States, the MPAA and the RIAA (Recording Industry Association of America), who have been focusing a lot more on anti-piracy internationally, are forced to put more attention on the United States. Currently, events for raising awareness on copyright issues have been widely launched to consumers. The consumers are informed that if one buys a pirated product, it is supporting criminal organizations and being a part of them.

Around Christmas and New Year of 2007, the MPAA and the RIAA started a campaign against pirated movie DVDs and music CDs. The campaign was all across America, including Los Angeles, New York, Atlanta, Dallas, Chicago, New Orleans, and other major cities. The two associations not only sent representatives to help police to trace the source and destination of the pirated audio and video products, but also to call for staying away from pirated products, thus attempting to drive the illegal pirates out of the markets.

However, as Internet usage becomes more and more common, illegal downloads on the Internet are gradually replacing illegal duplication of movie DVDs and music CDs, and becoming the major form of piracy. Due to the private and anonymous character of the Internet, Hollywood will be facing an even greater challenge from pirates.

[1] Globe Magazine Issue 6, March 15, 2008.
[2] This report can be accessed in the following link:$File/CopyrightPiracy.pdf?OpenElement
[3] Translator and copyeditor could not find this quote in the Pirate Party’s declaration.

The International Herald Leader on Internet Nationalism

As seen in the loud protests before the 2008 Beijing Olympic Games, many Chinese have truly demonstrated anti-US sentiment and nationalism both in China and abroad. For the Western world, an increasingly powerful China is also an increasingly expanding and arrogant nation. Since the future leaders of China are among them, this is an issue that will have an influence on world peace. The following is an article from the International Herald Leader [1], a newspaper under the Xinhua News Agency, the Chinese official media.

The Internet creates three "new precedents;" Internet nationalism blows a new horn

Five years ago, the International Herald Leader published an article that claimed that Internet nationalism had opened a new page in Chinese nationalism. Five years later, in the spring of 2008, Chinese Internet nationalism completed a real evolution in virtual space.

Immediately after the serious violent incident in Lhasa on March 14, some websites were created to criticize the Western media’s biased and distorted reports, calling people to go to the streets, using their flesh bodies to defend the Olympic torch. In March, with the help of the Internet, in China and abroad, tens of thousands of ordinary Chinese coincidentally showed the world what the true public opinion of the Chinese nation really is. Some western media have had to admit that "the outburst of China’s nationalism is not from top to down," but it also a reflection of a prevalent "new patriotism" among the Chinese people.

About five years ago, International Herald Leader wrote an article, asserting that Internet nationalism had opened a new chapter in Chinese nationalism, predicting, "Internet nationalism is a new starting point, not an ending point." This music chapter was played again this spring, with three new "precedents;" it confirmed the former prediction. Chinese Internet nationalism has completed its real evolution in virtual space, and has blown the horn to march forward.

Three new precedents

After the March 14 incident in Lhasa, a considerable number of Western media blatantly distorted the truth. They completely showed their sinister intentions and their attitude of arrogance. At the same time this also demonstrated their poor methods. In their report, the police from Nepal and India became Chinese police and emergency vehicles became China’s vehicle to ship prisoners. The liars used such a simple way to deceive the public. Thus Chinese Internet users in China immediately brought out the truth.

The Western media, which has a monopoly on television, newspapers and other traditional media, did not realize that the Internet’s subversive impact on traditional media occurs not only in Europe and the United States, but also in China. This time, due to the rise of Chinese nationalism, this revolutionary means of using the Internet as a media and communications tool created three new "precedents” in Chinese Internet nationalism.
First, the broad geographic is unprecedented. From Beijing to San Francisco, from London to Paris, in such a short period of time, the Chinese around the world combined their resources and not only broke through the Western mainstream media’s language barrier, but also successfully launched a large-scale counterattack. They exposed the lies of the Western media, and immersed those waving the rag a few call ”Tibet independence” amidst an ocean of people waving the five-star Chinese flag. The Internet, as a low-cost communications tool, played a decisive role. Without the help of the Internet, it would have been inconceivable to get so many overseas Chinese to act together.

Secondly, the amount of agreement was unprecedented. Earlier, Chinese in China and overseas, could all feel they were separated by territory and by administrative power. Although the subjects of Chinese people’s attention are similar, their views are quite different. The cursing and fighting on the Internet has become a common phenomenon in Chinese forums worldwide. But this time, the voices of Chinese all over the word were shockingly similar. This indicates that, for the issues that involve the fundamental interests of a country or nation, the Chinese people are capable of reaching a high degree of consensus.

Third, the significant effect is unprecedented. The anti-US sentiment and nationalism of Chinese in China and overseas, were fully displayed. Although not all western media that lied were compelled to change their attitude as a result of pressure from Chinese Internet users, and even fewer apologized, still to be able to have the western media bow to Chinese people’s opinions is itself a landmark since Chinese Internet nationalism was formed. With the nature of Internet’s nature, the Chinese Internet users supervise the western media. This represents a model for a vulnerable nation breaking through the western soft language hegemony.

[1] International Herald Leader, April 15, 2008

Ignorant Coordinator for Tibetan Issues

Chinese citizens’ reactions to western media reports on Tibetan issues have surprised many western people. Chinese people’s global protests of western media and western governments reflect the Chinese government’s long-term influence. During this movement, the official state-run media attack from China along with the criticism of individual top officials from Europe and the U.S. encouraged Chinese citizens’ sentiments of nationalism and boosted anti-American feelings. Below is an article from the Xinhua website criticizing Paula Dobriansky, the U.S. Undersecretary of State [1]

Ignorant “coordinator for Tibetan issues” [2]

The Washington Post on Monday, April 21, published an article titled “The Way Forward in Tibet” by Paula J. Dobriansky, the Undersecretary of State for democracy and global affairs in the U.S. State Department, and her capacity was specifically labeled at the end of the article as the “U.S. special coordinator for Tibetan issues.”

First of all, her role as a coordinator invites some questions. Common knowledge tells us that a coordinator has to be accepted or approved by both parties in a dispute, whereas the capacity of Dobriansky here is the outcome imposed by the U.S. government, a third party from the outside, and the Chinese government has never recognized her as she has wishfully imagined or thought of.

Secondly, as a coordinator, one should keep to an uninhibited, impartial and just stance, whereas Dobriansky not only listens to and believes in one side, but openly shields one party and blames the other party, without any fairness to speak of.

Thirdly, a coordinator should have an in-depth understanding and make rather extensive studies on the problems that are to be dealt with. If one has a smattering of hearsay knowledge, makes frivolous comments and talks a lot of nonsense, he or she will make himself or herself a laughing stock. Apparently, Dobriansky has made such a ridiculous error.

Then, let us first look at her knowledge of Tibet. By relying solely on, or basing herself on, distorted reports from a few Western media and briefing reports from the U.S. embassies and consulates, she citied the March 14 Lhasa incident as “peaceful protests” and demanded for China to release people. How could you demand this so harshly, if it is not out of an ill intention? So many video scenes recorded by both Chinese and foreign cameramen obviously show “Tibetan independence” protestors setting fire to stalls, attacking schools, killing or hacking to injure innocent civilians, and how can such obvious violence be said to be “peaceful protests” or demonstrations?
Moreover, the riots in Tibet are caused by a few “Tibetan independence” protestors with an aim to capitalize on Beijing’s summer Olympic Games to divide China and seek Tibetan independence at the very instigation of the Dalai Lama. Even the Western media have not made any denial of this evidence.

Paula J. Dobriansky, however, alleged in her article that “underlying these tragic events is China’s long-standing repression of religious, cultural and other freedoms for the Tibetan people.” She is simply telling a bare-faced lie!

Any people who have been to Tibet or those with the slightest interest in Tibet know that the Lamaseries and Buddhist temples across the region are resounding with the chanting of Buddhist sutras and the freedom of Tibetans in their religious belief has never been subjected to government interference. The Chinese central government has, on a couple of occasions, made huge appropriations for overhauling or repairing temples and Lamaseries, preserving cultural relics, or sifting classic Tibetan works; these are facts there for all to see. Why does Dobriansky turn a blind eye to all these things? And is this the little, pitiful Tibet-related knowledge the so-called coordinator possesses on Tibetan issues?

Both Dobriansky and the U.S. Congress have honored the Dalai Lama as a “man of peace” who has advocated a “middle way” that embraces “autonomy for Tibet” within China and “rejects seeking independence” and they even said he “has publicly come out strongly against the violence” and “indicated his support for holding the Olympic Games in Beijing.” A host of ironclad facts so far unveiled have long proven that the Dalai Lama is a man who never means what he says. He utters beautiful, high-sounding words before the scene on one hand and, on the other hand, he masterminds violence behind the scene. So, it is not inappropriate to depict him as the most hypocritical person in the world.

It was reported that Dobriansky attended the fifth “International Tibet Support Groups Conference” in Brussels in May 2007. It was at this conference that the “Tibet independence” organization adopted a strategic plan as well as the related plan of action to take the Olympic Games in Beijing as the main target of assaults in the coming 15 months, and the commander to organize such “Tibetan independence” activities sits right there inside of the U.S. State Department in Washington, D.C..

Does the “special coordinator for Tibetan issues” who had been at that conference really not know any moves of the Dalai clique to sabotage the Beijing Olympic Games? She still cites that “he is supportive of the Olympic Games in Beijing”? Is this “coordinator” cheating herself or deceiving others?

People’s Daily, April 23, 2008
[1]; (original Chinese article)

An Overview of Verdicts on Individuals Imprisoned in the Shanghai Social Security Fund Scandal

On March 25, 2008, Chen Liangyu, the former Shanghai Municipal Party Committee Secretary was sentenced to 18 years in prison, marking the end of the long lasting Shanghai social security fund investigation. People are still speculating on its impact and the turmoil it has caused to party’s top level; it is obvious that this case deals not merely with financial fraud but rather with the power struggle within the party. The following is a description of the verdicts that some of the individuals imprisoned in the Shanghai social security scandal received. [1]

According to an analysis done by some Hong Kong media, the conviction of Chen Liangyu, the former Shanghai Municipal Party Committee Secretary, of 18 years in prison for bribery and the conviction of Chen Xitong, the former Beijing municipal party committee Secretary of 16 years in prison for embezzlement are both indeed "political crimes" and should not be viewed simply as crimes of bribery and corruption.

According to those media reports, the CCP is accustomed to using financial fraud charges or personal scandals as a cover for the political motive behind the matter.

Among those who were linked to the Shanghai Social Security fund scandal in 2006, were Chen Liangyu, 20 other local high-ranking officials, and prominent figures from the business circle allegedly involved.

Due to scale of the case, the defendants were split up and sent to three different locations in Shanghai, Jilin, and Anhui Provinces for trial.

The most recent verdict was on April 7 in Jilin Province when Zhang Rongkun was sentenced to 19 years in prison and 1.3 billion yuan of personal assets were confiscated. The verdict was viewed as a benchmark for Chen Liangyu’s sentence.

Zheng Enchong, a prominent Shanghai rights lawyer stated that, "this (Shanghai Social Security fund scandal) is the result of a power struggle within the party." He said, "Jiang Zemin is Chen Liangyu’s big brother. Jiang was aware of Chen’s misconduct as early as when Chen was the party secretary for the Shanghai Huangpu district all the way until he was promoted to the position of Municipal Party Committee Secretary. Jiang hand picked and promoted Chen. The current circumstances suggest that the CCP high level authorities only wanted to use Chen Liangyu’s trial to call an end to the investigation."

Zheng Enchong said, "There is an internal agreement that no one will expose anything that is related to Jiang Zemin and Huang Ju."

Zheng continuted, "I am extremely disappointed! On Chen Liangyu’s case, we have waited for a total of ten years for this date! More than 200 people have been persecuted to death and more than 2,000 people are still imprisoned. This day has finally come."

According to the number released by the National Audit Office last month, the Shanghai Social Security Fund scandal involved 33.9 billion yuan, which is higher than the original estimate of 480 million yuan.

 Table: Verdicts of Individuals Imprisoned in the Shanghai Social Security Fund Scandal

 Name  Former Post
 Trial Date & Location  Charge  Verdict
 Chen Liangyu  Former CCP Politburo member, and Shanghai Municipal Party Committee Secretary  March 25, 2008. The Second Intermediate People’s Court of Tianjin  Bribery & abuse of power  18 years in prison
 Zhang Rongkun  Former chairman of the Fuxi Investment Holding Company in Shanghai  Dec 27, 2007. The Intermediate People’s Court of Songyuan, Jilin Province  Five charges: bribing officials, company executives, manipulating stocks prices, fraudulent bond issuing and the illegal withdrawal of capital contributions  19 years in prison
 Zhu Junyi  Former Shanghai Labor & Social Security Bureau Chief  Sep 23, 2007. The Intermediate People’s Court of Changchun, Jilin Province  1.6 million yuan in bribes, embezzlement, funding of 1 billion yuan and abuse of power  18 years in prison
 Lu Qiwei  Former Chief of the Department of Pension Funds of the Labor & Social Security Bureau of Shanghai  Sep 23, 2007. The Intermediate People’s Court of Changchun, Jilin Province  1 million yuan in bribes  8 years in prison
 Wu Minglie  Former Head of the Shanghai New Huangpu Group Company (SNHGC)  Sep 23, 2007.The Intermediate People’s Court of Changchun, Jilin Province  Involved in the Huawen and New Huangpu case;10 million yuan in bribes  Life in prison
 Wang Zheng  Former General Vice-President of the Huamen Media Investment Corporation  Sept 23, 2007. The Intermediate People’s Court of Changchun, Jilin Province  Involved in the Huawen buyout of New Huangpu case; 10 million yuan in bribes  3 years in prison
 Han Guozhang  Former Vice President of the Shanghai Electric Group  Sep 23, 2007. The Intermediate People’s Court of Changchun, Jilin Province  Involved in the Shanghai Electric Group case; 6 million yuan in bribes  Life in prison
 Li Songjian  Former Board Director of Shanghai Mingyuan Group & non-executive director of Shanghai Electric Group  Sep 23, 2007. The Intermediate People’s Court of Changchun, Jilin Province  Involved in the Shanghai Electric Group case; the embezzlement of 50 million yuan; 700,000 yuan in bribes  18 months in prison
 Wang Chenming  Former Board of Director of Shanghai Electric  Dec 20, 2007. The Intermediate People’s Court of Changchun, Jilin Province  Involved in the Shanghai Electric Group case; share corruption of 300 million Yuan with Yan Jinbao and Lu Tianming; 210,000 yuan in bribes  Death penalty
 Sun Luyi  Former Director of the General Office of the Chinese Communist Party Shanghai Committee  Sep 25, 2007.  The Intermediate People’s Court of Changchun, Jilin Province  More than 5 million yuan in bribes  15 years
in prison
 Qin Yu  Former chief of Baoshan District in Shanghai  Sep 25, 2007. The Intermediate People’s Court of Changchun, Jilin Province  More than 6.82 million yuan in bribes  Life in prison & Property confiscation
 Wang Guoxiong  Former general manager of Shanghai Industrial Investment Group  Sep 26, 2007. The Shanghai No.1 Intermediate People’s Court    5 million yuan in bribes  5 million yuan in bribes  Life in prison & Property confiscation
 Lin Baoheng  Former director of the Shanghai Municipal State-owned Assets Supervision and Administration Commission  Sep 25, 2007. The Shanghai No.1 Intermediate People’s Court  500,000 yuan in bribes  8 years in prison
 Wu Hongmei  Former Deputy director of the Shanghai Municipal State-owned Assets Supervision and Administration Commission  Sep 25, 2007. The Shanghai No.1 Intermediate People’s Court  1.96 million yuan in bribes  11 years in prison
 Han Fanghe  Former chief executive of Hua An Fund Management Co  Sep 26, 2007.  The Shanghai No.1 Intermediate People’s Court  More than 4 million yuan in bribes  18 years in prison 
 Yu Zhifei  Former Chief of Shanghai’s F1 racing track  Jan 3, 2007. The Intermediate People’s Court of Wuhu, Anhui Province  The embezzlement of 1.05 million yuan  4 years in prison
& a 300,000 Yuan fine
 Yin Guoyuan  Former deputy director of the Shanghai Housing, Land and Resource Administration  Waiting for trial  Charged with taking bribes, abuse of power  Unknown
 Chen Chaoxian  Former director of Shanghai’s Changning District  Waiting for trial  Corruption  Unknown
 Wang Weigong  Former vice general manager of Shanghai-based Shenergy Group  Waiting for trial  Received 9.5 million yuan in bribes from Zhang Rongkun  Unknown

[1] The Epoch Times,April 13, 2008.

China-Mexico Trade Opens the Door to the High-End North American Market

The following two articles focus on the relationship between China and Mexico’s economy. They were published in the International Herald Leader. They point out that, “As a close neighbor of the U.S., Mexico provides a rare market opportunity for China. Establishing mutual trust with Mexico is advantageous to China’s dealings with the U.S. in the event of a very likely new tide of trade protectionism in the Western Hemisphere. It may lead to the rising Chinese manufacturing industry opening a southern gate leading to the high-end market in North America.” These two articles cite some projects in the China-Mexico economic relationship. Below is a translation of the two articles.

Mexico Invests Large Sum to Train “China Trade Experts” [1]

In order to free itself from its dependence on the U.S. economy, the Mexican Government is training a large number of "China trade experts." Currently, the gross spending of this plan has exceeded 4 million USD.

Every March, dozens of Mexican students cross the ocean to go China. Their destinations are Zhejiang University and Fudan University. These students graduated from local institutions of higher learning and had work experience. They tell the International Herald Leader that learning the Chinese curriculum isn’t the only reason to study in China. How to do business with the Chinese is the ultimate goal of their further education.

They are the Mexico-China Trade Training Plan students that the Mexican government has dispatched to China to learn from their experiences. They resolve to become the business elites who will advance both countries’ trade and keenly seize the market trends.

All Levels of Government Invest in the Training Plan

For many years, Mexico has been busy doing business with the U.S., which accounts for nearly 80% of Mexico’s foreign trade. Mexico-China trade is less than one-tenth of the Mexico-U.S. trade. But at the present, an unceasing inrush of made-in-China [products] has forced Mexico to pay attention to Mexico-China economics and their trade relationship. The Mexico-China trade deficit continues to increase, while Mexican exports to China has made no progress. Many Mexican merchants hope to export products to China but feel they don’t know where to begin because of a lack of understanding of China. At the same time, the Western view that "China is a threat" deepens Mexican merchants’ worries about developing the Chinese market.
The "Mexico-China Trade Training Plan" was developed out of this background. According to sources, the Mexican Ministry of Economic Affairs, the Import-Export Bank, various state governments, universities, and research centers all jointly launched this plan. It was officially implemented in February 2005. Hereafter, every March and September, Mexico sends students to China to participate in one to two years of training. Students are eligible to receive $20,000 USD scholarships each year. The Mexican Federal Government pays one half and local governments pay the other half.

Candidate students are first recommended within the various states. First the National Economic Development Secretariat Association screens them. Then they are confirmed. According to the requirements, only those who have high academic degrees, work experience and have passed English tests are selected. So far, 11 states in Mexico have dispatched over 130 students to China. Spending on this plan has already reached over $4,000,000 USD.
Mexican officials told the reporter that the government hopes to take advantage of the developing trade with China to gain independence from the U.S. economy and to   avoid being more limited by U.S. trade policies.

"Learning from Experience" in China Proves Difficult

Those who are lucky enough to come to China are the elite from various Mexican states. They have received basic training in Mexico beforehand. When they arrive, they go to Zhejiang University to study Chinese. Then they pursue advanced studies at Fudan University. Chinese, the history of modern Chinese economic development, the history of the development of thought and culture, and the history of the development of foreign trade are mandated subjects [3]. Upon graduation, students must score 80% or better in each course to gain state government approval.

In order to intensify the study of the Chinese "business bible," these foreign students often need to take business trips to participate in various seminars, trade investment  conferences, and exhibitions in Hong Kong, Beijing, and Guangzhou as well as to visit Chinese factories and mining enterprises.

For a majority of Mexican students, China is remote and strange. A student from Michoacán told the reporter that China was very different from what he imagined, "There is a lot of seasoning in the food with unknown names; delicious but curious." "The Chinese people are very diligent, with a higher desire to become rich than Mexicans." "China seems to lack nothing; [it] can even produce traditional Mexican handicrafts."
The most amazing thing to [Mexican] students is China’s huge consumer power. They find that many Chinese go abroad on their vacations. They often hope to go sightseeing in Mexico, so this is also a market worthy of the Mexican’s earnest consideration.

Graduates Show Their Skill

Because it hasn’t been long since the project started, the majority of Mexican students are still studying in China. Very few have graduated and returned to Mexico to work. However, a portion of the students have begun to taste the sweetness of training abroad. They told the reporter that some are working for enterprises in their state in order to connect them with Chinese enterprises. Some, after returning to Mexico, have worked in related government agencies. Some simply have established China trading companies.

In 2005, Michoacán’s Daniela Carlonell was among the first group of students to be dispatched to China. After graduating and returning home, she has been working in the government and responsible for the national “Mexico-China Trading Training Plan.” Carlos Moran, who was dispatched by Colima, is the former Colima branch chief of the Mexico Employers Association. He has already spent over four months in China. According to the particular circumstances of the state, he conducted more than 30 specific studies and found commercial export opportunities for products such as chicken feet, kelp, yogurt, etc. [He] has also provided business information for 67 enterprises that want to do business with China. Some students have also found export opportunities to China for Mexican skin care products and cosmetics, as well as health foods such as fruit juice, coffee and so on.

"I want to help enterprises in our state," a student by the name of Salvador Soares
told the reporter. He has studied for two years in China and will soon complete his studies. "I really don’t want to hear anymore about how ‘China is a threat.’ We should transform the so-called ‘threat’ into ‘business opportunities.’"

Knocking Open the South Gate of North America [2]

Mexico is the tenth largest economy in the world. It is also one of the countries most likely to adopt trade protectionism measures. Since joining the General Agreement on Tariffs and Trade in 1986, its strong stance and direct methods to protect its domestic market have been imitated by other developing nations. Last year, Mexico’s protective measures against Chinese import products such as steel, iron and textiles came down one after another. It was a looming force.
Now, without a doubt, it has the intention to know oneself and know one’s enemy in order to win every battle [when] this kind of a country begins to train "China trade experts." But looking at it from a geo-economic point of view, this is a positive signal.

As a close neighbor of the U.S., objectively Mexico provides a rare market opportunity for China. Establishing mutual trust with Mexico is advantageous to China’s contending with the U.S. in a very likely new tide of trade protectionism in the Western Hemisphere. [It can] lead the rising Chinese manufacturing industry to open the southern gate that leads to the high-end market in North America.

First, [one] must understand that many things will happen in the coming year that will affect the stability of the North America free trade area composed of the U.S., Canada and Mexico. China-Mexico economics and trade relations will subtly deepen with this background.

According to the goal of North America free trade area, by 2008, zero customs duty and the elimination of trade and investment limits should be completely reached. This is not a problem between America and Canada; only the weak Mexico is left out. After being a member of the free trade area for more than ten for years, although Mexico has obtained huge export profits and huge foreign investments, its national industries and agriculture have actually suffered heavy losses. At present, Mexico still has to safeguard the basic interest in exports to Canada and the United States and use it as a bargaining chip to protect its domestic interest.

Luckily, this is the year of a U.S. presidential election. The Democratic Party presidential candidates have formed a united front, and all think that continuing to advance the North America Free Trade Agreement violates the national interest. They blame American unemployment and declining living standards on the inexpensive-product-and-labor-providing Mexico, [and] advocated revising and even abandoning the Free Trade Agreement. When the American economy is not booming, passing the burden of the crisis wins support. Although men of insight remind the U.S. not to dump the problem on its neighbor, this voice appears very weak.

Mexico understands that in order to achieve maximum benefit from global trade, it cannot depend only on U.S. arrangements. If the Democratic Party wins the election and raises a big stick against Mexican products, folks in history will sigh once more, "Pitiful Mexico—so far away from God, yet so close to the U.S." The current political situation of the North American free trade area paints the background for Mexico’s urgent need for "China Trade Experts."
China has become Mexico’s second largest trading partner after the U.S. Although there are obvious disparities between China-Mexico trade and U.S.-Mexico trade, it has already seen the best result among its trading partners, outside of local areas. Mexico is willing to approach and fully communicate with China. [This] means expanding bilateral common interests day after day and an unwillingness to see U.S. trade protectionism casts its shadow on its economic development.

China’s brightest investment outlook in Mexico is in the manufacturing industry. Taking advantage of its production strength and superior export geography, [China] may open up new markets in North and Latin America. More than three months ago, a Chinese auto group began a joint venture to construct a base for passenger vehicle production. [This] indicates that Chinese investment in Mexico is transforming towards high-tech levels. This may foreshadow Chinese automobiles entering the American market.

[1] International Herald Leader, March 10, 2008
[2] International Herald Leader, March 10, 2008
[3] Included in these courses, and especially in the history of the development of thought and culture, is indoctrination to the communist worldview.

Outlook Weekly Article: Directions on Fostering a Sense of Urgency and Crisis

On January 21, 2008, Outlook Weekly published an article entitled “Directions on Fostering a Sense of Crisis.” The article cited words of Mao Zedong, Deng Xiaoping, Jiang Zemin, Hu Jintao and other high-ranking Communist officials, reflecting the Chinese Communist Party (CCP)’s attitude towards domestic and international situations. Below is a translation of the entire article. [1]

Directions on Fostering a Sense of Urgency and Crisis

It is the time of the 2008 Beijing Olympics, after 30 years of reform and opening up… The country is inspired, and China has become the focus of world attention.

In discussing the organization of work in 2008 and in the future, the Chinese Communist Party (CCP) high-level authorities have frequently expressed that at all times we should maintain a sense of urgency. Before the New Year an the Central Party School, facing almost 200 new Central Committee members and alternate members, General Secretary Hu Jintao said, “The better our situation, the more we should have a sense of urgency and crisis; the more we should be vigilant.”

In the second Plenary Session of the Central Commission for Discipline Inspection on January 15, Hu Jintao reaffirmed, “Our party, in the new situation of reform and opening up and developing a socialist market economy, holds a very sober and consistent attitude that we are aware that the inner-party has problems. In particular, risks and crises, may arise.”

Dr. Jiang Yong, Director of the Research Center of Economic Security at the China Institute of Contemporary International Relations felt that the central committee’s repeated emphasis on our sense of urgency in recent years has a profound meaning and significance.

Many experts, including Jiang Yong, who are close to the decision-making level and attend the activities of the Central Committee told “Outlook Weekly” that Beijing’s emphasis on a sense of urgency and crisis does not reflect a deliberately held negative attitude. The Central Committee indeed thinks that the challenges we face are many and great and we should not ignore them or be careless about them.

Starting from a new historic point, emphasizing the sense of crisis is strongly directed and instructional. For instance, as stated by Shen Jiru, an investigator from the Chinese Academy of Social Sciences Institute of World Economics and Politics, some high-ranking officials and local and department cadres may not know well or be sufficiently vigilant about financial risks, the energy crisis, trade protectionism, and other issues.
Ye Ducu, an expert in the Central Party School, also said that our previous sense of crisis was mostly directed at internal problems and deficiencies, but now we have a better understanding of the risks in this time of modern globalization. The sense of risk awareness and of overcoming the challenges has escalated. He said, “In training senior cadres at the Central Party School, there has been an increasing emphasis on having a ‘global vision’ and ‘strategic thinking.’”

The Director of the Institute of Strategic Studies of the National Defense University, Junior General Jin Yinan claimed, “Generally speaking, we have a deep understanding of how ‘Backwardness is beaten,’ but are not sufficiently prepared mentally for ‘They are bound to rein in the rise,’ and for how “new unsafe factors arise with high-speed development.’”

Remain Sober-minded in the Event of a Historic Change

"2008 will be the Year of China," said Newsweek in its 2007 year-end special edition.

A new round of "China fever" in the overseas mainstream media has begun. From the large number of reports being issued, it has reached a new climax. Chinese media have only reported this issue in international reports and in specific columns, while the foreign media often focus on China using the front page, booklets, special editions and editorial reports.

This is different from the “China collapse theory," the "China threat theory," the "Chinese Century" and the "China opportunity theory" from previous years.

Regardless of challenges or praises, in Shen Jiru’s view, their bone of contention is mainly the “China threat theory,” except that it is now expressed as a worry that China will surpass the West.

Central authorities warn that we should never be conceited or overly optimistic when faced with accomplishments, cheers and praises. Shen Jiru said the key is to keep a sober mind and have a clear understanding of the basic domestic situation no matter whether we receive “curses” or “praise.”

“To keep the people in mind and to have long-term strategic thinking determines whether a leader has a sense of crisis and urgency,” Jiang Yong said.

A strong sense of urgency and crisis is a feature of the Chinese Communist Party’s rule. This is closely related to the one-hundred-year history of China. In the Seventh Party’s Congress, with the great victory of the anti-Japanese war in sight, Mao Zedong cited 17 difficulties and risks in one breath, and exhorted all its members to "prepare for disadvantages."
After the reform and opening up, Deng Xiaoping repeatedly emphasized, “We should focus our work on big risks and prepare countermeasures. Thus, the sky will not fall even if there is a big risk.” Jiang Zemin also pointed out, “Only when we stand at a higher point, see farther, and make scientific predictions and correct judgments on economic risks that may appear in our march, can we take precautions and remain undefeated.”

At the New Years tea party of the CPPCC National Committee, General Secretary Hu Jintao said that we will make a systematic review and summary on reform and opening up. According to experts’ judgments, the review and summary will not only illustrate the enormous accomplishments that everyone can see, but will also summarize the risk-defying arduous exploration, including eliminating all kinds of interference from various erroneous ideologies and tendencies. We will not take the old road of being rigidly closed, nor will we change the banner to give up leadership of the Communist Party and the road of socialism.

A clear sign is that the Central Committee has been more and more expressive on issues of risks and challenges, as manifested in the related high-level meeting before the New Year. For instance, when warning about the more predictable and unpredictable risks, and about the possibility and reality of various problems and even quite big risks, a number of examples were given: the wide spread of a severe contagious disease like SARS; some severe natural disasters having an overall impact; severe financial crises like the Asian financial crisis; the worldwide energy crisis; the situation that international anti-China forces band together to put pressure on China; and a major “Taiwan-independence incident,” to name a few.

At end of the report of the Party’s Seventeenth Congress, four “musts” were prominently emphasized. The first one was “we must be vigilant and enhance the sense of crisis.” The experts we have interviewed think about enhancing the sense of crisis from the angle of concern for the Party; we can see the Party is facing many unprecedented new tests. Hence the messages from the top-down emphasize: All party members should firmly keep in mind that if a political party advanced in the past, it does not mean it will advance in the present; advancing now does not mean advancing forever; the party’s core leadership status is not permanent; past possession does not mean possession now; current possession does not mean permanent possession.

In Ye Ducu’s view, the livelihood of the people and the fight against corruption are among the most critical tests for leadership. He said that the livelihood problems have not been satisfactorily resolved, which is related to the insufficient sense of crisis among high-level cadres, and they did not sufficiently attend to the opinions and complaints of the people. The Central Committee has made great efforts on the livelihood issue, but the actual results depend on whether high and middle level cadres can substantially implement the policy.
The issue of anti-corruption is related to the survival of the nation and the party. In an observation of the recently held Second Plenary Session of the Central Commission for Discipline Inspection, Ye Ducu thinks that our party is very clear on this issue. However, "we should win the confidence of people with facts”.

There Should be a Sense of Urgency on Both Internal and International Issues

During the long holidays of October 1, 2007, some district governments in Chongqing City assigned special “homework” to more than 400 cadres at or above the level of assistant county governor: to read the book “Currency War.”

An important view of the book is that, at present, instigated by a handful of "financial oligarchy forces," the "financial terrorists" are likely to launch a bloodless "currency war" in an attempt to eliminate China’s wealth that Chinese workers have accumulated over the years.

After reading this book, Junior General Qiao Liang, the author of "Unrestricted warfare," said, “China’s financial decision-makers should possess two abilities: one is to be vigilant to others’ conspiracies; the other is to have the ability to play conspiracies on others! "

Jiang Yong, who we have interviewed, does not fully agree with the reasoning process in the book, but highly values the sense of urgency. Jiang Yong himself is a scholar and has appealed for the state’s financial security for years.

Jiang Yong points out, “The recent world economic history is not only a history of the creation of wealth, but also a history of how the West (including Japan) has plundered external wealth. Now the times have changed. The modern West may trade and invest to earn money by taking advantage of the international division of labor; but it may also steal or directly grasp money utilizing the so-called intellectual property rules.”

“Currently, domestic and international problems are often inter related," said Shen Jiru. Domestic and international factors affect each other, traditional and non-traditional security threats coexist. We should be more vigilant regarding financial and energy security issues, because we were not previously familiar with them. They are not to be solved behind closed doors. "The prevention of financial crises is a very important project."
Shen Jiru also expressed that energy crisis is another pivotal issue to be prevented during globalization. Because of the uneven geographical distribution of oil reserves, and because the monopoly policy of the western countries, especially of the oil cartels, China, as the third largest petroleum consuming country and the second largest petroleum importing country, is only a passive recipient of the oil price. The so-called national oil "strategic reserve," in his view, can only be described as a "contingency reserve," and far from a guarantee of security.

To view the sense of crisis from the requirement of maintaining social harmony and stability, the interviewed experts candidly said that in our country, because of the unbalanced development and limited productive forces, domestic internal contradictions centering on livelihood are still quite conspicuous. There have been increasing conflicts originating from the gap between rich and poor, the urban-rural gap, and unfair distribution, social security and employment. Meanwhile, the construction of a democratic legal system and expansion of the people’s democracy do not yet fully meet the requirements of economic and social development. Because of pluralistic values, a small number of people have confused ideology, their faith is shaken and they have misplaced values about honor and dishonor. The conventional social managerial approaches are no longer sufficient to adapt to the new management tasks. The management of "social people," the new economic and social organizations and the virtual community are still in the process of exploration.
Therefore, the messages from high-levels emphasize that, on the 30th anniversary of China’s reform and opening up, how to deepen reform draws much internal and external attention. To seize opportunities and overcome challenges should start with resolving current prominent conflicts. There should be an overall plan for reforming the system in the next few years, with timely research and a proposal to reform programs in important areas and with key steps. We should maintain a high degree of vigilance on difficulties and risks to be encountered, and be cautious in order to prevent problems. Meanwhile, a risk evaluation mechanism should be established for various reforms and decision making in order to reduce social contradictions at the source.

To Secure Preparation for the Olympic Games

The external media calls 2008 “the Year of China,” which means, to a large extent, “the Year of the Olympics.” During the Olympics, nearly 100 heads of state, heads of government, thousands of athletes, tens of thousands of foreign journalists, and millions of domestic and foreign spectators and tourists will gather in Beijing. Whether we can host the Olympics is drawing worldwide attention.

According to the Central Committee’s requirements, we would rather have a sufficient evaluation of the risks and difficulties than be at a loss and be passive because of underestimation. Our goal is to ensure a smooth and safe Olympics, and safeguard overall national security and social stability.
Related experts claim that there are signs that the hostile forces are attempting to launch political attacks against our country because it is holding the Olympic Games, and they are conspiring to transform the Olympics into an “arena” to demonize our country, carry out infiltration and sabotage us.

As the 17th Party’s Congress proposed earlier, it is necessary to "improve the national security strategy, to perfect the national security system, to keep a high degree of vigilance, resolutely guard against all kinds of separatist, infiltration and subversive activities, and effectively protect national security." In the year of the Olympics, this test will not be an easy one.

There have been multiple events where international anti-China forces have "kidnapped" the Olympics in order to pressure our country. The external dividing forces and religious organizations are also attempting to disrupt and sabotage activities using the Olympics as an opportunity. Experts have pointed out that Chen Shuibian’s promoting “tying the referendum with the general election” is not without a relationship to the Olympics.

Unexpected events such as natural disasters, accident disasters, public health incidents and social safety incidents require, in themselves, a high level sense of urgency and crisis. According to related experts, it can be expected that in the Olympic year, the high-level and the related departments will be more vigilant, take more stringent precautions, use more sufficient plans, and will certainly provide a safe and harmonious social environment for the Beijing Olympic Games.

Act in response to emergencies took effect on November 1, 2007, facing the approaching test of Olympic Games. Professor Mo Yuchuan from the China People’s University Law School said that now that the law is available, the next step is to simply act in accordance with the law and implement the law. The Olympic Games test is also an opportunity to innovate concrete ways of responding.

According to the requirements from the high-level, in the implementation of the plans for handling emergencies, it is necessary to seriously study the experience and lessons of other countries in hosting the Olympic Games, to comprehensively analyze the factors that security faces, to formulate effective plans for all types of incidents, and to try out necessary combat exercises, thereby improving the ability to cope with emergencies.

 [1] Outlook Weekly, Jan 21, 2008

Party School: Military Strategy of Active Defense in The New Era

This is an article published on March 19, 2008 on the website of the CCP (Chinese Communist Party) Central Committee Party School, entitled “Military Strategy of Active Defense in The New Era.” The article points out that China should strive to win regional wars in the information era, seek to prevent conflicts and wars, improve joint operations and the ability to complete diversified military tasks, push forward the Chinese characteristics of military reform, develop the strategy of a people’s war, and create a safe environment for the nation and peaceful development. The following is the translation of major parts. [1]


As a large developing country, the economic, social, ecological, security issues and so on during development are relatively more prominent [in China than elsewhere]. In a nation of over 1.3 billion people, the modernization of the country is unprecedented, the fast speed of the economic transformation, its wide impact, and the complexity of the issues are rare in the world. Because the market economy has not been fully developed, during the crucial period of reform and development, the economy’s dependence upon the outside has substantially increased. The threat from terrorism, separatism, and extremism to our border security has become increasingly evident. Traditional security threats, the core of which is military and economic, still exist. Unconventional threats to economic security, information security, energy security, maritime strategy channel security, pubic ecological security, terrorism, etc. are on the rise.

In order to adjust to the changes of the international strategic situation and the national security environment, China has formulated its military strategy of active defense in the new era. Its main contents are as follows:

First, focus on winning a local war during the information age. The main conflict that China’s military buildup faces is that its level of modernization does not meet the requirement of winning local wars under the information age. The People’s Liberation Army (PLA) is turning to the trend of military development in the world, takes informationization as the direction for modernization, promotes the combined development of mechanization and informationization, gradually implements from mechanization and semi-mechanization to the transformation of informationization, and will achieve the holistic improvement of military power, attack capability, mobility, protection capability, and the overall improvement of information capability. Thus China has drawn up a three-step development strategy of the national defense and military modernization: To build a solid foundation by year 2010, to achieve significant development around 2020, and to reach the strategic goals of completing the informationalized military buildup and winning informationalized foreign military.
Second, pay attention to prevent conflicts and the outbreak of war. To safeguard the important period of strategic opportunities for the nation’s development and overall situation of national interests, the PLA persistently engages in coordinating closely military actions with politics, economics, diplomatic moves, and so on, and makes comprehensive use of various means and strategies to prevent conflicts and the outbreak of war. China’s security environment is complex—both the major and minor strategic directions have potentials for crises and conflicts. China has always been upholding the principle of no-first-use of nuclear weapons, and adheres to a self-defense nuclear strategy. The fundamental goal of this strategy is to contain other countries in the use of or threat of the use of nuclear weapons against China, and China won’t have any nuclear arms race with any other country.

Third, enhance the capability of joint operations and completing diversified military tasks. To meet the requirement of the modern warfare system and a variety of security threats and responses, the PLA uses joint operations as its basic combat modus operandi to enhance the military deterrence and combat capability, as well as carrying out non-war military operation capabilities. In the new era and new stage, the PLA not only needs to respond to traditional security, but also to deal with unconventional security; not only to protect homeland security, but also to safeguard the interests of overseas security; not only to safeguard national development and stability, but also to maintain world peace and development. To this end, the strategy of armed services is undergoing a significant change: our army is moving from a regional defense to global mobile mode, the Navy is changing from close to or on-shore defense to offshore, on-sea defense mode, the Air Force from the air-defense to the offensive-defensive, and the Second Artillery Corps is to be equipped with both regular and nuclear munitions systems.

Fourth, promote military reform with Chinese characteristics. To meet the challenges of new military changes, the PLA applies the strategy of building the military with quality and high technology, enhances the PLA’s weaponry and the innovation of national defense technology, and carries out military training under the informationization age and trains high quality and new types of military personnel. The PLA persists in seeking development in reform and innovation, promoting innovative military organizational structure and management, adjusting and reforming the military establishment and policy systems, to achieve the unification of speed, quality, and effectiveness of the armed forces. From 1985 to 2005, during the 20-year period, the PLA implemented three large-scale disarmaments, a total reduction of 1.7 million personnel. The size is now stabilized at 2.3 million. The PLA focuses on reducing the army’s personnel and military forces equipped with out-of-date technology and equipment, and strengthens the development of the Navy, the Air Force, and the Second Artillery Corps.
Fifth, develop the strategy and tactics of the people’s war. China’s real advantage and strength lies in the masses of people to build and consolidate national defense. Facing new changes in modern warfare, China adheres to combining the standing army and strong national defense reserve forces, and pays heightened attention to the buildup of militia and reserve forces. According to the strategy of combining peacetime with wartime, and combining the military and civilians with training people to be soldiers, we should develop a unified and highly efficient national defense mobilization mechanism; create new war tactics suitable for normal people to participate in the war, and fully utilize the power of people’s war. Militia is an important component of the armed forces in China. China currently has 10 million primary militia. At present, the militia in China is undergoing changes from infantry forces to a professional technology regiment. Our focus is to develop the air defense sub-teams, branches of the armed forces, and emergency units.

Sixth, create a safe environment that is beneficial to the peaceful development of the nation. The PLA carries out the national peaceful development strategy and foreign policy, develops military cooperation under the no-alliance, no-confrontation and not targeting any third party, and opposes hegemonism and power politics. We do military exchanges and cooperation, and create the military security environment with mutual trust, mutual benefits, jointly preventing conflict and war. We participate in United Nations peacekeeping operations, in the international cooperation to fight terrorism and disaster relief operations, and play an active role in safeguarding the world and regional peace and stability. Since 2002, China has held 18 joint military exercises with 11 countries and regional organizations. Since 1990, China has participated in 18 U.N. peacekeeping operations, and has sent over 9,000 peacekeepers and military personnel. Eight military personnel died in peacekeeping missions. China has sent the most peacekeeping forces among the five permanent members of the United Nations Security Council. Currently there are 1,700 peacekeepers carrying out the peacekeeping task. The PLA also sent troops to participate in the Indian Ocean tsunami, as well as Algeria, Iran, Indonesia, Pakistan earthquakes, and other international relief operations.

[1] CCP (Chinese Communist Party) Central Committee Party School

Outlook Article: Why Is the United States Strengthening Control over Exports to China?

On March 19, 2008, Outlook Magazine under the State-run Xinhua New Agency published an article entitled “Why Is the United States Strengthening Control over Exports to China?” The article stated that the strengthened control over exports to China is part of a U.S. military containment strategy. The author of the article is a deputy director, associate researcher at the American Studies Department of China’s Institute for International Issues. The institute is a Chinese Government think tank. Below is the translation of the article. [1]

In recent years, along with new changes in the strategy of yhe United States national security and China’s national defense modernization development, the United States has further tightened its control over exports to China using the areas of legislation, list management, the organization establishment, departmental coordination, multilateral systems and so on.

The first change to occur was the revision of regulations on export and re-export licensing for China and expanding the scope of controlled items. In June 2006, the United States officially announced a new export licensing policy for China. The new regulation requires all exports to China to re-apply for a license when the exported merchandise is suspected to be destined for military use in China. The list of items covers 20 product categories and associated technologies and software such as aircraft and aircraft engines, avionics and inertial navigation systems, lasers, and depleted uranium, as described in 31 entries on the Commerce Control List. Controlled categories may be added as needed. Some products that are not originally on the control list may also be included.

The second was to strengthen the control of “deemed exports.” The U.S. government has stipulated Chinese scholars and researchers must apply for a deemed export license when they will have access to sensitive information and technology. This includes American Chinese citizens and foreign corporations that may bring sensitive technology to China. In 2005, the U.S. Department of Commercial Affairs also proposed restricting individuals who were born in the United States but held another country’s citizenship from obtaining U.S. technology. Although, as a result of strong opposition from the academic community and industry associations, it was eventually abolished, the U.S. Department of Commerce still indicates that it will further tighten the deemed export control. At the year-end of 2006, the Department of Commerce established the Deemed Export Advisory Committee (DEAC), which will advise the Secretary of Commerce on export controls for China. In 2006, the U.S. government reviewed 865 deemed export licenses, 60% of which were held by Chinese citizens.

The third was to strengthen the construction of the export control mechanism, enhance control efficiency, set up new coordination organizations, strengthen the management of the blacklist system; and strengthen the “end-user-visit” system.
The fourth was to strengthen sanctions on corporate and individual violators, both in the United States and foreign countries. This includes the so-called severe punishment of any companies or individual that is suspected of selling sensitive technology to China, strengthening sanctions over foreign corporations, and deliberately bringing public attention to Chinese spy cases. Since 2005, the U.S. has successively brought public attention to the "Mark espionage case," the "Moo Ko-Suen espionage case," and several others. In November 2007, the United State-China Economic and Security Review Commission declared that China has been engaged in espionage to obtain key technologies in the U.S. military industry. It called for immediate action, to conduct comprehensive reviews of China’s “illegal technology transfers,” and to provide additional funding for export control and counter-espionage work.

The fifth was to promote and strengthen multilateral export control systems and obstruct and sabotage the normal military trade and cooperation between China and other countries.

Export control has always been one of the important methods that the United States has employed in maintaining national security and implementation of external strategies. In recent years, the further strengthening of export controls for China has been closely related to the adjustment of the U.S. global security strategy since “911,” and is meant to ultimately serve the U.S. military containment strategy for China.
First, the U.S. security concepts went through a fundamental change after “911.”  Anti-terrorism and anti-proliferation have become the core of its global security strategy. The U.S. officials believe export controls for China still have many flaws in the legal system, license approval, and regulation implementation. Some companies have “poor” records. Therefore, it is necessary to implement more restrictive export control policies for China in order to be in compliance with the U.S. “broader national security and diplomatic agenda.”

Next, the United States continues to strengthen the China Containment Policy and ensure its military has technological superiority over China. U.S. officials believe, after entering into the new century, that China’s national defense modernization has accelerated, and China’s national defense foundation industry is approaching or even surpassing the powerful western countries at an unprecedented pace. Certain more advanced technologies like the nuclear industry and man-in-space flight technology have reached the world’s leading level. Therefore, it is necessary for the U.S. to globally prevent advanced military technology and equipment from getting into China, to hinder the modernization advancement of China’s national defense, and to safeguard the U.S. military’s hegemony.
Thirdly, U.S. existing laws and regulations lag behind and it is difficult for the laws and regulations to catch up with the steps of technical upgrades and proliferation. U.S. officials believe that the U.S. military is no longer the main source of the advanced dual-purpose technology. Now many leading technologies are flowing from private enterprises to the military, which makes it difficult for the government to define military technology and therefore include it in the control list. This makes it more complex for monitoring.  Following the rapid Internet development, the methods of obtaining technical information have become more convenient, and technical proliferation has increased exponentially. Multinational corporations seek investments, production, and sales throughout the world. As a result, production and work process technology flow to overseas subsidiary companies and it is inevitable that dual-purpose technology transfers overseas.

In addition, multilateral export control mechanisms have various holes and problems and need to be amended. After the end of the cold war, priorities in many countries shifted from security to economic welfare and business competition. The U.S. and allied countries differ on export controls. The Wassenaar Arrangement replacing Batumi is the result of such a difference. It does not officially list the countries that are subject to export control, nor has it a strict control mechanism. The organizational structure is extremely loose. A member of the allied countries makes his/her own decisions in carrying out export control based on common control policies and a detailed list, and in granting export licenses. U.S. officials think it is difficult for the above system to monitor the dual-purpose technology exports. “It is time to start the coordination of licensing policies in all countries in order to minimize the differences in international export control systems.” Therefore, the United States urges to revise some provisions, so as to better coordinate member countries’ export licensing policies and close the loopholes of the multilateral export control system.

[1] Xinhua, March 20, 2008