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Chinese ‘Hackers’ Denounce U.S. Media: ‘Sheer Nonsense’

A report from CNN on March 7, 2008 stated that several young hackers claimed that they had successfully invaded the government Internet network of several countries such as the U.S., Germany, the U.K., and France; in addition, they had obtained important information from a number of departments including the Pentagon. [1] According to this report, one of the hackers called Xiao Chen claimed his colleague received a cash reward from the Chinese government after succeeding in hacking into the Pentagon.

Three days later, Global Times, a media outlet under Xinhua News Agency, responded to the CNN report with an article titled “Chinese ‘Hackers’ Denounce U.S. Media: ‘Sheer Nonsense.’” [2] The following is a translation of the article.

“Inside an ordinary-looking residential complex in Zhoushan Island, which is south of Shanghai, several young men in their twenties were seated inside a nearly unfurnished apartment unit, fixing their eyes on the computer monitors while moving the mouse swiftly. Although they do not look harmful, they are the key members of hackers who have invaded into the most sensitive network in the world, including the Pentagon network.” [3] On March 7, CNN presented an exclusive report, claiming that CNN reporter Vause conducted a face-to-face interview with several young hackers. In its story highlights, the report stated, “the interview site is close to one of China’s navy bases” [4], as if making a special note for the “Chinese hacker threat.” 

A reporter from Global Times talked to one of the interviewees Xiao Chen (online name) over the phone on March 9. According to Xiao Chen, CNN’s report was “sheer nonsense;” he also pleaded to the reporter to help “clarify the situation.”

‘Chinese Hackers’ Admitted They Hacked into the Pentagon Network?

In the CNN report titled “Chinese Hackers: No Site Is Safe,” the main interviewees are a Chinese young man whose online name is Xiao Chen and his two colleagues. Vause described them in the following manner: “The three belong to what some Western experts say is a civilian cyber militia in China, launching attacks on government and private Web sites around the world.”

According to Vause, Xiao Chen and his friends do not want to reveal their true identities. “No Web site is one hundred percent safe. There are Web sites with high-level security, but there is always a weakness,” says Xiao Chen, the leader of this group. He claims two of his colleagues—not the ones with him in the room—hacked into the Pentagon and downloaded information, although he wouldn’t specify what was gleaned.” Vause also stated repeatedly, “CNN has no way to confirm if his claim is true.”
Xiao Chen: ‘Obviously They Are Distorting the Story Purposely!’

With the clues revealed from the two-minute video provided by CNN, the reporter from Global Times located the lead hacker Xiao Chen. He is one of the founders of the website “Hacker World.”

“They are literally distorting the story. It’s all negative stuff, sheer nonsense!” That was the first response from Xiao Chen when he accepted a phone interview with our reporter. He pleaded to the reporter to be sure to help to “clarify the situation.”

According to Xiao Chen, the reporter from CNN had emailed to him back and forth over 20 times. The reporter claimed that he would come up with a positive report for his website and he would only need a 3-minute interview with Xiao Chen. However, the reporter came and stayed for two days. Xiao Chen revealed that during the interview, the CNN reporter asked directly, “Can you quickly show me the data you downloaded from the U.S. Department of Defense?” He also asked, “Isn’t it the Chinese government which gives you funds to attack sensitive overseas websites?”

“I said ‘no’ to all these sensitive questions,” Xiao Chen said. “Our website is simply a sharing platform for hackers. We never teach others to attack other websites; nor have we ourselves attacked any website, including that of the U.S. Department of Defense.”

“I did say not a single computer is safe,” Xiao Chen added, “however, it turned out to be no site is safe in the report. I stated that my colleagues and I established this website together, while the report had it as the government sponsored us. As a matter of fact, we have limited income from online advertisements. We are currently expecting to get funding from venture capital.”

The U.S. Has Played Up the Chinese Hacker Threat Several Times

In recent years, the American media and some U.S. officials have been attacking China with “China’s hackers are dangerous” being one of the main accusations. Especially in the last year, with the American media taking the lead, British and German media also constantly play up the propaganda that “hackers within China’s People’s Liberation Army are a threat to the world.” In the sensational description in Western media, not only the Department of Defense of the United States has been attacked by “Chinese hackers sponsored by the Chinese government,” some cross-national companies, and even some of the physical training associations in the U.K. have been the “target of attacks from China.”
On March 4 this year, the U.S. Department of Defense submitted the 2008 annual report on “China’s Military Force” to the Congress. In this report, China is criticized for hacking into the government websites of other countries. In response to this, the spokesperson of China’s Department of Foreign Affairs Qin Gang replied that this claim is ungrounded. He also said the Chinese government and military would not hire civilian hackers to attack other countries’ government websites.

According to a report released by Symantec, an Internet security company in the U.S., the U.S. is home to hackers making chaos internationally. The number of attacks originated from the U.S. far exceeds other countries. The report also said, among all target countries of these hackers, China is the biggest victim.

[1] CNN, March 7, 2008
[2] Xinhua, March 10, 2008
[3] The original CNN English: “ZHOUSHAN, China (CNN)—They operate from a bare apartment on a Chinese island. They are intelligent 20-somethings who seem harmless. But they are hard-core hackers who claim to have gained access to the world’s most sensitive sites, including the Pentagon.”
[4] The original CNN English: “The hackers met with CNN on an island near a Chinese naval hub.”

Over 90% of Online Survey Participants Support China’s Military Budget Increase

The United States Department of Defense’s Report on China’s Military Power was severely criticized by Chinese official media. On, the website of the Huanqiu Times, a newspaper published under Xinhua News Agency, a survey on “Should China maintain its current military budget increase?” was conducted. The result of the survey was that 96 percent of people thought that China should strengthen its defenses and keep its current military budget increase. Below is the full translation of the article published in the Huanqiu Times. [1]

Online Survey: More Than 90 percent of Online Survey Participants Support China’s Military Budget Increase

Should China maintain its annual military budget increase of 17.6 percent? After China published its 2008 defense budget, conducted a survey on “Should China maintain its current military budget increase?” By the end of the survey, ( 9 pm. on March 10th, 2008,)  96 percent of the participants thought that China should strengthen its defenses and keep its current military budget increase.

One survey participant: “For the fourth most economically powerful country, which is still not unified, is it too much to increase military budget?”

The survey of “Should China maintain its current annual military budget increase” started at 12 pm. on March 6, 2008 and ended 9 pm. on March 10, 2008.  A total of 5928 Internet users participated in the survey. Among them, 5713 people (96 percent) voted “yes” and 215 people (4 percent) vote “no”. The total messages on this topic were more than 176 pages long. Messages from the supportive side were obviously very active and enthusiastic. One person said: “Our country is vast in terms of territory. If there is no strong national defense system to safeguard it, it will end up like the Qing Dynasty, losing dignity and being shameful! I think we all remember all of the unfair treaties in China’s modern history; would we really like to see that happen again? So I strongly support the increase of the defense budget!” One Internet user left this message in English, “When you step out of the country, you will understand how badly our country needs a strong national defense system.”

The Internet voters expressed their extreme repugnance for Western countries’ comments on China’s military budget. One person taunted, “Western countries want to see the PLA fight with swords and lances!” As for the US government’s worrying about China’s military budget increase, one person said, “The United States has the most expensive military budget. It has never been threatened by any country, but still spends several hundred billion dollars on its military budget. Why don’t they criticize themselves?”
In addition, the issue of China’s unification was a focal point. Many people thought that the situation of the Taiwan Strait was the most important factor in determining the need for strong national defense. One person left a message, “The United States is deploying powerful military power along the Taiwan Strait. If China does not have a strong military deterrent, it won’t guarantee that we might not lose Taiwan someday.” Another person said, “As the fourth most economically powerful country, China is still not unified. Is it too much to expect to increase our military budget?”

Compared with the supportive side, the messages from the opposing side did not seem very fervent. They were mainly concerned about the lesson learned from the Soviet Union and Western countries’ theory of China’s threat. One message said, “The economic development is the most important task now for China. Only by the improvement of economics and development of technology will there be real and persistent development of military power. If only military power is developed but economic development is ignored, our lessons learned could be like those of the former Soviet Union. By maintaining a moderate increase of our military budget, the suspicion from the international community would be reduced, which would benefit the economic development in a peaceful environment and China’s peaceful rise.”

Expert: Survey Participants’ Reactions Reflect Reality of China’s Security

Zhou Fangyin, an expert on international affairs from the China Academy of Social Science, said, “This survey was conducted after China published its defense budget. What followed was, viewed by the Chinese, Western media’s wanton exaggeration about China’s threat. This conflict stimulated the Internet users’ enthusiasm to vote, thus this survey should relatively reflect the true public opinion from China’s Internet users.”

Zhou Fangyin, also told the Huanqiu Times reporters during the interview, “It is not difficult to understand that so many survey participants supported this issue, because they directly felt the actual need for strong defense at present.”

Zhou Fangyin thought the three main reasons for such widespread support from Internet users on China’s increase of military budget were: first, China is still facing the unification issue. China is the only member among the United Nations Security Council’s permanent members that still has a unification issue. The status as a United Nations Security Council permanent member and the reality of the country’s disunion are serious contradictions in Chinese people’s minds.
Second, China is the country that has the most neighboring countries and the complexity of its boundary environment is rare. Furthermore, in recent years, the Chinese have seen more of China’s economic rise. However, strong military power is what people feel their security should rely on. In reality, few things can let Chinese people feel their country’s strong defense. This kind of setback feeling contrasts dramatically with China’s powerful economic power on the world stage. In other words, China’s “great nation aspiration” is still short of critical support.

Finally, Zhou Fangyin said that the fundamental reason for maintaining the military budget increase is true demand. Although China’s military budget is about the same as Great Britain and Japan, how big are these countries? How many security issues do they face? The main reason that Western countries exaggerated the issue of China’s military budget is because of their distrust of China.

[1] Huanqiu Times, March 11, 2008

Overseas Chinese Media to Help Build a Harmonious Society [1] as an Extension of Mainland Media

Chinese language media remain influential among overseas Chinese people because even for those who have already become naturalized citizens of another country, Chinese is the most popular language. Europe Express is a Chinese language newspaper based in Italy. Its front page shows that it is a partner of the People’s Daily, the Chinese Communist Party’s flagship newspaper. On March 3, 2008, Europe Express published an article entitled "In Order to Build a Harmonious Society for Overseas Chinese People, the Function of Overseas Chinese Media as a Watchdog is Very Important." It was republished by China News Service — the second largest official Chinese Communist Party news agency after Xinhua. Below is the translation of the republished article (excerpts) by China News Service. [2]

Chinese Newspaper: In Order to Build a Harmonious Society for Overseas Chinese People, the Function of Overseas Chinese Language Media as a Watchdog is Very Important.

The reform and opening up policy has rapidly improved China’s international standing, and innumerable overseas Chinese people have benefited from it. Consular protection and consular services have become part of the Chinese government’s national policy. The Chinese government never stops emphasizing the issue of consular protection. While emphasizing the need to build a harmonious socialist society, building a harmonious society among overseas Chinese people has been considered strategically as the most important policy in the new era. An article in Europe Express in Italy stated: For building a harmonious society for overseas Chinese people, the function of overseas Chinese language media as a watchdog is very important.

As stated in the article, from the 1980s of the last century, the trend of Chinese emigration has reached the entire world, and several million Chinese people have migrated overseas. As the number of overseas Chinese people as new immigrants increases, and the unique overseas Chinese cultural tastes evolve, there has come an upsurge of overseas Chinese media. Although the foundation, audience and positioning of the Chinese media in each country are quite different, most of them proclaim the principles of being patriotic, promoting Chinese culture and China, strengthening communication and social development. Their function lies in assisting overseas Chinese to better integrate into the mainstream society in economics, politics, and culture; providing services for employment, studying, social networking, etc.; defending overseas Chinese legal rights; creating better living conditions for the Chinese community; promoting solidarity and patriotic sentiment amongst local Chinese people; and advocating friendly communication and interaction between the countries of their residence and motherland.

[…] {mospagebreak}
Now, the overseas Chinese media have the same ideological guidelines and the same angle of reporting that is consistent with the mainstream media in Mainland China. Based on the needs of the local Chinese community, it provides information about the country of residence and helps overseas Chinese to integrate into the mainstream society; and the Chinese media also provide information about China and help overseas Chinese people to nurture their ties with the motherland emotionally. The overseas Chinese media truly take on the responsibility for helping China to understand the world and the world to understand China. It may be called the overseas extension of the mainland Chinese media.

The article indicates that the Chinese media’s development not only depends on the strength of the overseas Chinese, but also depends on the great power of the motherland. When the motherland is formidable with high international standing, Chinese civilization will be respected. When Sinology and the Chinese language gains global popularity, the Chinese language media will be prosperous too.


to construct a harmonious society, the function of the overseas Chinese language media as a watchdog is very important. While the Chinese government encourages the mainstream media in China to play the role of a watchdog, it should also emphasize the overseas Chinese media as a watchdog.  The policies should safeguard the right of overseas Chinese media as watchdog, facilitate overseas media and reporters to play a better role of a watchdog so that they can truthfully report on overseas Chinese, and promote the harmonious development of Chinese communities.

[1] The construction of a Harmonious Society (和谐社会) is the current and dominant socio-economic goal to be achieved using Hu Jintao’s signature ideology of the Scientific Development Concept. It serves as the ultimate goal for the ruling Chinese Communist Party (CCP). First proposed by the Chinese government under the Hu-Wen Administration during the 2005 National People’s Congress, the idea deviates from the focus of economic growth to overall societal balance. Independent observers believe the initiation of the Harmonious Society policy is the regime’s response to ever escalating domestic instability due to the CCP’s governance crisis. The CCP’s concept of “harmonious society” or “social stability”, meaning that dissident voices or social unrest are to be suppressed, is different from the use of the concepts in Western societies.
[2] Source: China News Service, March 3, 2008

How the Chinese Communist Regime Does Grass-Roots Management

Large-scale social unrest in China has been on the rise in recent years. The upcoming 2008 Beijing Olympic Games has become a rallying point for issues of social discontent. To deal with social unrest in both urban and rural areas, the Communist regime is focusing on one aspect of Chinese society — a special grass-roots organization — the Community Neighborhood Committee. These community committees are unique to China. On the surface, they are non-governmental organizations, but the staff is on the government payroll. These committees exist everywhere and form a dense network of control, working for the local police and governments. On February 16, 2008, the official journal of the CCP Central Committee Qiushi published an article entitled “Grass-roots is the focus of social management and supervision.”[1] The author is a member of Standing Committee of Anhui Provincial CCP Committee and Secretary of Committee of Political and Legislative Affairs of the Anhui Provincial CCP Committee. [2] Below are excerpts from the article.

Grass-roots is the focus of society’s management and supervision

The 17th National Congress of the CCP raised an important issue: To form a sound grass-roots society management system, using a healthy Party committee’s leadership, responsible government, a coordinated social network, and participation from the public. Anhui Province, when dealing with political and legal work, has focused its work at the grass-roots level in order to dissolve all social conflicts and problems at the grass-roots level, to maximally enhance harmonious factors, and to maximally reduce the unharmonious factors, so as to lay a solid foundation for the construction of a socialistic harmonious society.

I. Promoting the construction of communities, perfecting grass-roots management and a service network

We take the construction of communities as the base for managing society. Advice on Promoting the Construction of Communities on all Fronts was drawn on for the purpose of actively promoting construction of urban communities, and relying on Community’s Neighborhood Committees (CNC). We have constructed 2300 CNC’s covering all the cities and towns in the province. In 2007, we also established 10 pilot rural village communities so as to promote the construction of rural neighborhood communities based on the autonomy of villagers.

We have strengthened the communities’ self-governance function and clarified the CNC’s obligations and its autonomous role. As a result, the government’s administrative management effectively coordinates with residents’ self-governance through CNC’s. The government’s law enforcement interacts with the community’s lawful autonomy. We have strengthened construction of the community management team. By hiring community managerial staff members, implementing the system of certification, and improving staffer’s welfare, we have built a steadfast community management.

II. Perfect social organizations and enhance their service functions

Taking the management of social organizations as an important issue of strengthening the grass-roots work, we have issued Suggestions on further strengthening the management of civil social organizations, so as to guide and regulate the healthy development of non-governmental organizations. In Anhui province there are more than 10,000 lawfully registered non-governmental organizations, with a total staff of 70,000. These organizations span across the cities and villages, forming a system of non-governmental organizations with extensive coverage and comprehensive categories.

III. Strengthen grass-roots law enforcement, preserve long-term social stability

We take grass-roots enforcement as the focus, and use the construction of a "Peaceful Anhui" as a framework for handling prominent public order and security problems collectively. We implemented a policy focusing on the grass-roots, reinforcing the grass-roots level police force, and promoting an in-depth control system for preventing social unrest and promoting social stability. By organizing all social forces to carry out law enforcement, we managed to maintain continuous stability in the urban and rural areas across the province.

In the process of strengthening grass-roots public security management, we adhere to the policies of combining crackdown with prevention and combining targeted strikes with general supervision. We set up a working mechanism of rapid response, flexible operation, and orderly coordination to guarantee effective security protection and control. We have implemented a responsibility and accountability system. We oppose inaction and chaotic action. We have severely clamped down on various criminal activities, improved the service and management of the migrant population, strengthened the propaganda and education of rule of law to the whole society including young people, and effectively prevented crimes.

IV. Improve the emergency management mechanism and enhance the abilities of the grass-roots level to manage crises and risks

Emergency management is a crucial aspect of managing society. We have made legal regulations such as an Overall Emergency Plan for Unexpected Public Incidents, established an emergency management organization system, and enhanced the ability to prevent and deal with unexpected events. We focused on the counter-emergency planning at the county and township levels, and strengthened guidance of the counter-emergency planning in key work places, important public locations, schools and communities (villages). We strengthened the organization and training of specialized teams for emergency events management; established a working system of unified command, orderly coordination, sensitive response, and efficient operation. We improved the construction of the monitoring and detecting system, established an integrated system of society emergency monitoring, societal mobilization, rapid responsiveness, and high efficiency reaction.

V. Coordinate various interest groups and properly handle internal conflicts among the people.

We take the coordination of various interest groups and proper handling of various social conflicts, especially any internal conflicts among the people, as the daily work to promote and guarantee grass-roots stability and harmony. We adhere to the principle of "local management and hierarchical responsibility" and "whoever is in charge is responsible," so as to implement the responsibility policy and the policy of accountability at the grass-root level. We improve the case analysis and conflicts resolving system, adhere to the policy of "actively preventing, promptly exposing, effectively controlling and properly resolving," and extensively carry out the survey of public opinions. We also established a people-administration-judiciary trinity mediation system based on the judiciary, in which the departments of public appeals, the courts and public security participate. Thus, we have strived to achieve early investigation, rapid detection, complete control, and proper handling of various conflicts.

[1] Qiushi,issue 4, 2008
[2] Committee of Political and Legislative Affairs:Committee of Political and Legislative Affairs (CPLA) is CCP’s (Chinese Communist Party) a functional body in charge of judicial issues. The Central CPLA organizes and leads the work of all judiciary related CCP agencies, guiding the work of CPLA’s at CCP Committees in provinces, autonomous regions, and municipalities under the direct jurisdiction of the Central Government. Top officials at Ministry of Public Security, Supreme People’s Procuratorate, and Supreme People’s Court ought to report to the Secretary of Central CPLA, who usually is a member or leading member of the CCP Committee in Ministry of Public Security, Supreme People’s Procuratorate, and Supreme People’s Court. The establishment of CPLA guarantees the de facto control of the CCP over the judicial branch of the central government.

A Study of Chinese Leaders’ Name Ordering

It is not an easy matter to understand Chinese official media reports, yet the Chinese populace has, over the years, learned how to predict upcoming changes in the political landscape by reading between the lines. These indications include the frequencies of a leader’s media appearance, the page on which a report appears (whether it’s front-page headline news), font size, picture size, article length, whether or not the name is mentioned in official news or documents, TV news report length, the change of wording in supplemental notices, adjectives used to describe a leader, and so on, to mention just a few. One notable indication is the name ordering of leaders. Below is an unabridged translation of the Chinese Leaders’ Name Order Study originally published on the news website, [1]

When Chinese leaders attend public events, sometimes the list of names put out by the official Xinhua News Agency is longer than the news content itself. Although it annoys overseas media and populace, for the local Chinese media and populace who know the secret, they are the delight of talks. From it, one can predict the change of the status of a leader.

Li Keqiang Placed After Xi Jinping

During the Culture Revolution, people’s study of the name ordering of Party and national leaders reached a peak. A person’s name suddenly missing implies that he has been overthrown. A person’s name suddenly advancing in the ordering means he was promoted. This kind of ordering convention is in use today. Every major media has an ordered referential list of leaders’ names, and every provincial-level media also has an ordered referential list of provincial leaders. However, there are still times when editors and reporters misplace a leader’s name out of negligence. They are penalized.

Last October, the Chinese Communist Party’s (CCP) 17th Congress selected a new leadership group. The ordering of Xi Jinping and Li Keqiang, new standing committee members of the Politburo, confirmed that “group faction” favorite Li Keqiang was no match for the “Crown Prince Party” Xi Jinping. It is believed that they will be the respective successors of Party General Secretary Hu Jintao and Premier Wen Jiabao.

Because Vice President Zeng Qinghong, Vice Premiers Wu Yi and Zeng Peiyan, and so on resigned their Party posts, and new successors have to wait for their confirmation during next month’s National People’s Congress (NPC) and the Political Consultative Conference, the present name ordering of Party and national leaders has now become most complex. The author, through a Baidu (a popular Chinese search engine) search, found only one complete list of 219 incumbent and retired officials published by official media since the beginning of the year. It appeared in an obituary of Zhang Lichang, former secretary of Tianjin Municipal Committee of the CCP, as a list of leaders expressing their mourning and saluting [his] family members.
Jiang Zemin Ranks Second, Respected by Hu and Wen

From this list, the order of leaders are as follows: members of the Standing Committee of Politburo, members of the Politburo of the CCP Central Committee, retired members of the Standing Committee of the Politburo, members of the Secretariat of the CCP Central Committee, vice chairman of the NPC, state councilor, president of the Supreme People’s Court, procurator-general of the Supreme People’s Procuratorate, vice chairman of the Chinese People’s Political Consultative Conference (CPPCC), retired members of the Politburo and the like, members of the Central Military Commission, and retired members of the Central Military Commission.

At the present, because the change of new and old leaders has not been completed, there are some exceptions to the rule. The first eleven rankings are Hu Jintao, Jiang Zemin, Wu Bangguo, Wen Jiabao, Jia Qinglin, Zeng Qinghong, Li Changchun, Xi Jinping, Li Keqiang, He Guoqiang, and Zhou Yongkang. Jiang Zemin continues to place second, indicating that Hu and Wen respect him. Zeng Qinghong places sixth; Wu Yi and Zeng Peiyan rank among the other members of the Politburo members, [and are] still integrated into the sequence of incumbent leaders.

It should be pointed out that although the appointment of the CPPCC vice premier needs confirmation from the NPC, because the vice premier is concurrently a member of the Politburo, his rank surpasses that of the NPC vice chairman. This also shows NPC’s rubber stamp status from another angle.

[1] Boxun News, February 28, 2008

China’s Sexual Liberation

On December 14, 2006, the International Herald Tribune asked, “What’s the most rapidly growing industry in China today? The phone? Computer components? Toys? No, it’s the prostitution industry.” [1] Compared to ancient times, when holding hands in public was rare and would cause criticism, today the openness toward sex in China represents a major historic change. "One-night stand hotels” have mushroomed in the university areas of Beijing. The new doctrine of “All for money,” has become the norm in China, giving prostitution’s development a great boost. It seems that what is brewing in China is a wave of sexual degeneration, a revolution that is destroying traditional morality and standards of behavior. Although the Chinese Communist Party (CCP) says it will crack down on pornographic websites, even the Chinese official media website, Xinhuanet, displays photos of the “2006 top 10 hottest female stars,” “rare sexy men,” etc. Below is the translation of a report from Taiwan’s China Times [2]

Sexual liberation, an hourly-room is difficult to book

Every weekend, energetic university lovers follow a familiar path, passing skillfully through restaurants and cafes, coming to the cheap hotels with dimmed lights, ready to enjoy 3 hours of private time. The hotels are only 10 minutes away from the schools. The facilities are not luxurious but very clean. If they are not booked ahead of time, it is hard to find a room.

The cheap hotel rooms near the universities have sprouted like mushrooms. They are the symbol of the sexual revolution in China. According to a report by the Associated Press, the university students’ open-mindedness toward the traditional concept of sex means that the Mao era’s abstinence has collapsed. However, the liberation does not mean you can talk about it loudly; the political ideology has not lifted the ban on sex. Sex can only be discussed in private areas or among close friends. This has caused a lot of problems in society.

An increase in premarital sex and a rise in late marriages

Chinese young people’s attitude towards sex is in a period of change. In Beijing’s famous Chili Bar, the 20-year old manager agrees that today, young girls’ attitudes towards sex are very arbitrary. They often change their boyfriends, and love does not result in marriage. A 23-year old golf coach with the nick name “tank” said directly, “If two people really love each other, time does not matter.” Every night, the bars famous for one-night relations are filled with men and women looking for no-responsibility, no-burden love.
The new openness has caused a booming business in cheap hotels that advertise “hourly-rooms,” and “part-time rooms.” In a survey, a social sciences researcher from the Chinese Academy, Li Yinhe, found that premarital sex in China is showing a stable upward trend. From 1989, when it was at 15%, it has jumped to 70%. Premarital sex has also led to the late marriage phenomenon. Last year the average marriage age for men in Shanghai was 31, 5 years older than the traditional age of 26-year-old.

The huge gap about discussing sex

There is a serious gap between the open-mindedness about sex in practice and lack of sex education in schools, which results in social problems. For example, the schools only emphasize the danger of AIDS, but avoid talking about how to use contraceptives. The result, as official media has reported, is that during the two long national holidays on May 1st and October 1st, 80% of those having abortions in Shanghai hospitals were high school girls. As for cost of an abortion, the hospital’s formal price is 1,000 yuan, or about 4,400 yuan Taiwan NT. There are cheaper ones; the non-narcotic procedure only costs 400 yuan.

Deng Zhen, who lives in Beijing and works as a love consultant, related that every day he receives 15 to 20 calls for consultation, many of which are related to sex. The callers are mostly high school or college students. He even received a phone call from a 10-year-old girl. Prof. Li Yinhe says, “Chinese are shy when it comes to directly talking about sex, but without a direct discussion of sex, sex education is not complete.”

[1] International Herald Tribune, December 14, 2006
[2] China Times (Taiwan), 2008.03.03,4521,

Persecution of Falun Gong Escalating in the Run-Up to the Olympics

As the Olympics is approaching fast, there is no sign of improvement in the human rights in China other than continuous efforts by the Communist Party to cover-up the human rights violations.  In fact the Communist Party is escalating the suppression of the Chinese peoples’ speech, beliefs, even the most basic right to live, using the excuse of hosting the Olympics, particularly in the persecution of Falun Gong.  Recent cases of Falun Gong practitioners being arrested, detained, tortured, killed, or homes ransacked have been on the rise. The persecution has intensified.  The following contains translated excerpts from Falun Dafa website,[1]

In 2005, Deputy Minister of Public Security Liu Jing received an order from the Communist Party to eliminate Falun Gong before the Olympics.  To implement the order Liu issued a mandate to the national police system. In March 2007, the former Minister of Public Security Zhou Yongkang issued another order, demanding a second round of severe persecution against Falun Gong. Soon after, massive arrests of Falun Gong practitioners took place in several regions. Practitioners were detained or sentenced to prison.  Some have gone missing while others have been tortured to death.  During the abductions and arrests, police clamored, “[There is an ] order from the above: kill a batch before the Olympics."

Beijing Seized with Terror as Olympics Approaches

Sources from Mainland China indicate that, as the 2008 Olympics approaches, Beijing has been seized with terror.  Police are searching people’s bags at Tiananmen Square, main traffic intersections, and vehicles that exit the highway going towards Beijing. Those who enter Beijing by train must now show their ID paperwork, along with their tickets. This practice is usually used one or two weeks before the Communist Party Congress, but this time it has begun a full eight months before the Olympics would start. On January 24, 2008, police in Chaoyang, Chongwen, and Shunyi Districts barged into Falun Gong practitioners’ homes or workplaces to ransack and perform illegal arrests. On January 25, 2008, police were all over Beijing stopping vehicles and checking passenger IDs. Sources say that the funding for persecuting Falun Gong has also increased.

Falun Dafa website reports that several dozen Falun Gong practitioners in Beijing were arrested in December 2007, followed by more arrests in January 2008. Over twenty were detained on January 23-25, 2008, including some practitioners’ family members and colleagues.  Some insiders indicated that some practitioners’ friends have also been taken away.  The actual number of those detained appears to far exceed what is reported here.

Inside sources said that the detained Falun Gong practitioners were brutally beaten without normal processing or questioning.  Many were arrested without pretext, at home or at their workplaces, and then sentenced to eight months or more of forced labor, which will end when the Olympics is over. The forced labor camps in Beijing are full, so camp administrators are transferring practitioners out of town.  This is the so-called preemptive “Hard Strike” launched by the Party in the run-up of the Olympics.

Peaceful on the Surface Yet Persecution Intensifies

In 2007, seven Falun Gong practitioners died in Daqing City as a result of the persecution. They include Mr. Zhang Hongquan, Mr. Zhou Shuhai, Ms. Jiang Pai, Ms. Liu Sheng, Ms. Ma Bing, Ms. Zhang Baoying, and Mr. Ni Wenkui.  In 2007, several dozen abductions occurred targeting Falun Gong practitioners and their families. For instance, on the morning of April 25, 2007, police from the Dong’an District arrested practitioner Ms. Lu Guilan and her son Yan Jiaohui who is not a practitioner.

Masanjia Forced Labor Camp is notorious for locking female Falun Gong practitioners in male cells. On February 21, 2008, Director Wang had many "dead person’s beds"[2] shipped to Masanjia, ordering prisoners to torture those Falun Gong practitioners who were holding hunger strikes. According to eyewitnesses, four practitioners, Mr. Chen Kaiqu, Mr. Liu Qing, Mr. Gao Yuling, and Mr. Han Ximin were beaten to the point of becoming deformed. Mr. Zheng Haitao and Ms. Chen Yan were tied to the dead person’s beds, their four limbs pulled apart, with a horse’s bit inserted into their mouths so that they could not talk. Brutal force-feeding torture was then carried out on these practitioners.

Severe Torture and Death Cases on the Rise

Information from Falun Dafa website shows that the Chinese Communist Party has engaged in renewed campaign in the name of the Olympics to further persecute Falun Gong.  Falun Gong practitioners who have been arrested at their workplaces or homes have gone missing, and arresting officers are refusing to tell their families the whereabouts of the arrested practitioners, are not allowing visits, or have denied the fact that they arrested these practitioners. Eyewitnesses in Xinjin County, Sichuan Province, and Rong County in Guangxi Zhuan Autonomous Region revealed that the police put masks on the practitioners’ heads when they arrested them. In 2007, the number of confirmed deaths reached one hundred twenty three practitioners. In January 2008, there were another eight confirmed deaths.

[1], February 27, 2007
[2] Dead person’s bed – the victim is tied to the four corners of a cold metal bed frame and not allowed to get up to eat, drink, or use the bathroom. The torture typically lasts from several hours to over ten days.

China’s Strategies on Financial Market for Petroleum

China’s two-pronged strategy for meeting its giant oil-consumption needs involves seeking oil-producing countries as long-term strategic partners while simultaneously attempting to play an important role in the global oil market.  China recognizes that the international economy is greatly impacted by the US dollar being the only currency for oil price quotes. This has been observed especially in light of the way in which the US dollar has been gradually devalued during the sub-prime mortgage crisis. The oil price hike has brought tremendous pressure on China to appreciate its currency, the RMB.  As a result, China is currently striving to establish a forward market for crude oil so as to secure domestic resource supplies even while counteracting the expansion of US influence into Asia, thus bringing the country to play a larger role in the world oil market. The following translation is of an article on Xinhua News, February 24, 2008, entitled “Some Thoughts on China’s Strategic Financial Planning with Regard to the Petroleum Market.” [1]

Oil prices twice exceeded $100 per barrel within the last week. In addition to the supply and demand for petroleum and international political factors, the devaluation of the US dollar and fund speculation certainly have played a crucial role in the rise of the price of oil. The oil market is becoming an increasingly important aspect in finance. As a giant consumer of oil, China must fully exploit financial strategies to counter the fluctuation of oil prices as an important aspect of its strategic planning for energy and resources.

Negative Effects of the “Oil and Dollar” Duet

The US reached an agreement with OPEC in the 1970s; namely, the US dollar would be the only currency for oil price quotes. Since then, the petroleum market has been intimately tied to the fluctuation of the US dollar. Suffice it to say, with the ups and downs in the price of oil, the variety of incidents which suddenly emerged [recently] have merely been superficial triggers while it is the decisions made by the US Federal Reserve (the Fed) that are the “main switch” ultimately determining the direction of oil price.

Since the sub-prime mortgage crisis, the Fed lowered interest rates three times–on September 18, October 31 and December 11 of last year. As a result, international oil prices rose immediately each time.  On the same day that the interest rate was lowered, the forward price of light crude oil increased $0.94, $4.15 and $2.16, respectively, from the price quoted on the previous transaction day.  The first two rate cuts resulted in record high crude oil prices at $81.51 per barrel and $94.53 per barrel, respectively, on the same day that the rate cut was announced.

The devaluation of the US dollar keeps pushing up the price of oil. The exchange rate between US dollars and 14 other major currencies all dropped during the last year.  For example, the exchange rate with the Euro dropped by about 10.5%, and with the Japanese Yen it dropped by about 6%. Studies show that when the US dollar devalues by 1%, the prices for energy and crude materials rise on an equivalent scale.  Currently, if converted to Euros, oil priced at $100 is equivalent to last year’s price at $60.
At the same time the depreciation of the US dollar has made oil and gold more attractive to speculators.  According to experts, speculation has resulted in at least a $25 increase in oil prices. The forward business of West Texas Intermediate (WTI) has increased 18% annually since the beginning of this century. The forward business was expected to have reached 1,300,000 transactions per day, amounting to 1.3 billion barrels per day, which is 15 times the daily consumption of the whole world. At the end of last year, hedge funds invested in the petroleum market had reached $200 billion, a 60% increase from the beginning of last year.

In the face of the US dollar’s devaluation and increasing oil prices the US only needs to increase its export capacity to counteract the negative effects on the US economy.  Other countries such as the European Union, Japan and the UK, are able to exchange their currencies with the US freely; they can easily handle the increased oil price by appreciation of their respective currency. However, as China’s currency cannot be traded with US dollars freely as of now, we have to endure the dual pressure from both the increase in oil cost and the appreciation of the Chinese RMB. As a giant consumer of oil, it is a hard reality for us to swallow.

Financial Strategies Need to Be Exploited to Counter Oil Price Fluctuations

The price quote for oil sold to Europe from the Middle East is currently tied to Brent Oil forward pricing; oil sold to the US is tied to WTI forward pricing and oil sold to Asia is priced with reference to Platt’s Oil Price Index. The Platt’s Oil Price Index is based on the evaluation of spot market trading status, which can be easily manipulated. According to statistics, light oil from Saudi Arabia sold to northeastern Asia is usually higher by $1 per barrel than the same oil sold to Europe, and higher by $3 per barrel than oil sold to the US. This single item costs us $0.5 billion to $1.5 billion in oil import expenditures every year. The core issue in strategic oil planning for a nation lies in whether or not the pricing of petroleum is reasonable and can be stabilized within a certain range. In order to change the aforementioned negative effects, China proposed the  first draft of the Energy Act at the end of 2007, stating that “the government will establish a mechanism for energy pricing with market regulation being the dominating force.”

Then, how do we arrive at a “market price” for oil imported to China? The answer is, establishing a rational financial strategy for petroleum and encouraging more enterprises to get into the international oil financial market, getting actively involved in an attempt to quote oil price in RMB and gradually establishing an oil business forward market, so as to counteract the inflated oil price. Among all these strategies, establishment of an oil forward market would be our final choice. In order to change the current status wherein the price we pay for oil is higher than what Europe and the US pay, we need to develop a crude oil forward market, so that we have the right to participate in price quoting for crude oil.

After the refined oil is priced on an open (freely-traded) domestic market, the refined oil forward market will also need to be established to set the oil price.  In addition, the huge petroleum reserve accumulated by the business transactions of the Petroleum Exchange will also serve to replenish the petroleum reserve in our country.
Nonetheless, we will have to face a lot of issues during the establishment of a crude oil forward market. Japan, India and other Asian countries have expedited the formation of these forward markets, trying to be key members in the control of oil pricing in the Asia-Pacific region. Some European countries and the US also hurriedly expanded their force into Asia-Pacific, attempting to strangle the formation of an independent oil pricing control system within the Asia-Pacific region.  Inside China, many oil-related companies cannot participate in the import trade of crude oil, yet they are not motivated to join the establishment of the forward market. In addition, as to whether we should continue to quote prices in US dollars in order for us to have a certain degree of international influence or to quote prices in RMB for the sake of a long-term, stable development, we do not have a final answer yet.

Presently with the financial system in the process of globalization and the international currency system constantly changing and adjusting itself, some oil supplying countries have started to request that buyers close transactions with currencies other than the US dollar. We have started to see the emergence of “oil price in the Euro” and “oil price in Japanese Yen.”  The oil pricing system and currencies used in oil transactions are becoming more diversified. Many oil-supplying countries are willing to accept RMB in trade for oil.  In the face of an oil price increase pressuring China to appreciate the value of our RMB, it is a good choice to gradually attempt to quote oil prices in RMB.

China’s investment fund has not yet made its way into the international oil market. A few giant oil companies, after government ratification, will be able to enter the outside forward market to secure the long-term price of oil; however, because doing so will get too much international attention and because there is a lack of a related mechanism inside China, we will be placed in a very passive position.  In addition, China does not yet have a hedge fund. So, speculation funds cannot enter into an international petroleum forward market for the time being. These are undoubtedly negative factors for China’s economy. With the development of a domestic forward market, the growth of investment funds, and the opening up of financial business, we should soon move investment funds into the international petroleum market, so as to make a profit from the big fluctuations in the price of oil.

[1] Xinhua, February 24, 2008