Government/Politics - 148. page

Chinese enterprises are accelerating the pace of their overseas mergers and acquisitions (M&As) as a whole. Guo Song, director of the Capital Management Department of the State Administration of Foreign Exchange (SAFE), said SAFE would support normal overseas M&As and would maintain a balance of international payments.

At a press conference on September 22, Guo said that [the Chinese government] will support real overseas investments, but will not allow false investments. Over the past year, [SAFE found] that some enterprises and individuals transferred assets through foreign investment channels. This will become the SAFE’s major focus in managing overseas M&A activities.

Given the background of the slowdown in China’s economic growth and the continuous devaluation of the RMB, cross-border M&As have become the choice of many Chinese enterprises to mitigate risks. According to statistics that the Zero2IPO Group has published, China completed 107 cross-border M&As in the first half of this year, with a transaction amount over 176.446 billion yuan (US$26.46 billion – both data represent record highs).

In the overseas M&As, the proportion of central enterprises has continued to decline. Zhang Ming, director of the International Investment Office of the World Economics and Politics Institute at the Chinese Academy of Social Sciences, pointed out that private enterprises completed nine out of the top ten overseas M&A deals announced in the second quarter (which was 99 percent of the total); three of them (accounting for 64 percent of the total amount) were due to the domestic private parent company injecting capital into overseas subsidiaries. The specific purpose of the injection and the final destination were not very clear.

Source: Caixin, September 22, 2016
http://economy.caixin.com/2016-09-22/100990981.html

People’s Daily recently reported that the National People’s Congress (NPC) Standing Committee held a full member meeting on September 13. The meeting concluded that 45 national Congressmen elected in the 2013 election were illegal due to the bribery activities that had taken place. A total of 523 involved provincial Congressmen from Liaoning Province were terminated or resigned. There are 38 Liaoning provincial Congressmen in the 62-member provincial Congress Standing Committee who were removed from the Committee. The result was that the Liaoning Provincial Congress ceased to function due to a lack of members who met the minimum that the law required. This is the first time in the history of the current Republic that a provincial legislative branch could not serve. The National Congress decided to establish a Preparatory Group of the Liaoning Congress to play a temporary role. Zhang Dejiang, the Chairman of the NPC Standing Committee, held the meeting.

Source: People’s Daily, September 13, 2016
http://paper.people.com.cn/rmrb/html/2016-09/14/nw.D110000renmrb_20160914_4-01.htm

Guangming Daily published an article that Red Flag magazine originally carried. The article clarified the misunderstanding that the Party organization’s role in economic reform is not important. It stated that, during the latest round of SOE reform, it is imperative that the leadership of the Party organization in each SOE must be improved and strengthened. The article listed a number of reasons why the Party’s role is important. The Party’s leadership has served an important role in the economic growth of the country. Only under the Party’s leadership and in a stable political environment can the SOE grow within its market. The SOE bears the responsibility of safeguarding the nation’s economic security and public interest. The Party’s leadership will ensure that the SOEs are walking on the correct political path. The role that the Party leadership is not limited to safeguarding ideology; it also needs to be part of the senior leadership team that provides proper guidance to the development of the company during the reform. The article also named two CEOs as examples who serve as both the CEO of the company and the head of the Party organization. It said that the joint title confirms the newly established SOE reform policy which states that the the CEO of the company and the head of the Party organization can be the same person.

Source: Guangming Daily, September 18, 2016                                                                                                               http://theory.gmw.cn/2016-09/18/content_22014123.htm

China.com recently reported that dozens of Congressmen from the National People’s Congress are under investigation. An election bribery case that was discovered in Liaoning Province triggered the inquiry. At least eight of the Congressmen are from Liaoning. The election in question was the 2013 national election. According to information leaked from the investigations, some wealthy figures in the private sector bribed provincial government officials and provincial Congress members (who then elected national representatives) in order to create a path for themselves to the National People’s Congress. Since Liaoning has over six hundred provincial Congress members, it’s very challenging to distribute bribery across so many people. Anonymous sources said some powerful members of the government played the role of middleman to facilitate the transactions. Some provincial Congressmen claimed that they had donated the money to charities.

Source: China.com, September 6, 2016
http://news.china.com/domestic/945/20160906/23485900.html

Boxun published an article titled “Zhongnanhai Insider: To Prevent a Coup Before He Left Beijing for the G20; Xi Jinping Did a Lot of Thinking.” It stated, “According to the article, Xi Jinping, China’s current top leader, visited strategic resources in the army yesterday in high profile and posed for a photo with all representatives and military officers above the division level.” Boxun claimed that an insider from Beijing said Xi had arranged this army visit to prevent “a backyard fire” or “a palace coup.” Xi has repeatedly pressured the high level officials to be loyal, but are they absolutely reliable? Boxun cited an insider’s words: “At the last moment who will really be laughing?” “Everything is changing!”

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According to Radio of Free Asia (RFA) on August 16, 2016 and Voice of America on August 18, 2016, an unofficial Chinese website called Huanqiuzhiyin (Global Sound) based in Mainland China, published a long article saying that opposing a coup is the important political work that will need to receive special attention now and into the future. The original Huanqiuzhiyin article is no long available online. The article once again confirmed that the internal fighting within the top-level leadership of the Chinese Communist Party is far more intense than outsiders can imagine.

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On August 26, People’s Daily published an article reporting that the Central Commission for Discipline Inspection (CCDI) website posted a notice from the Party organization of the State Administration of Press, Publication, Radio, Film and Television (SARFT). The notice stated that a television station is not allowed to set the purchase price of a television program based on the status of the celebrities it uses in the program or on how famous they are. It cannot spend excessive marketing funds on the actors in the leading roles. The notice stated that, in addition, the movie and television industry should focus on the ideological values of the work and should also improve the cost structure of the production. It should also set requirements to limit the amount of music entertainment programs such as reality shows and also to limit the appearance of celebrities and their children who participate in the reality shows.

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