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International Herald Leader: Depreciate RMB Sharply and Keep Foreigners’ Hot Money in China

The International Herald Leader, a publication under Xinhua News Agency, published an article on December 12, 2011, blaming the Western countries for “draining” China of its real estate properties, stocks, and currency. According to the article, since last year, foreign institutions have been quietly selling their real estate properties. Since September this year, China began to notice the trend of property sales when Blackstone sold all of its properties in Shanghai. In November, Bank of America and Goldman Sachs reduced their shares in the Bank of China. Meanwhile, foreign capital has quietly retreated from the stock market. At the same time, high-end U.S. manufacturers are leaving China. The article speculates that once foreign companies start to sell RMB on a large-scale, the RMB will devalue and China’s economy will suffer from a hard landing. The article gave two suggestions to avoid a hard landing and “fight a financial war of defense”: 1) Sharply reduce the price of real estate properties before foreigners sell their properties in China on a large scale; 2) Depreciate the RMB before foreigners sell RMB on a large scale, thus letting foreigners’ hot money “become rotten in China.”

Source: International Herald Leader, December 12, 2011
http://news.xinhuanet.com/herald/2011-12/12/c_131295799.htm

China Establishes Non-War Military Operation Research Center

On December 12, 2011, PLA’s Academy of Military Sciences (AMS) launched a Non-war Military Operations Research Center. The State, the Central Military Commission (CMC), the PLA general headquarters and PLA departments, and the AMS will assign the research that the center will conduct; the center will also be available for consultations. The research center will keep abreast of the latest research achievements and cutting-edge developments at home and abroad so as to increase China’s quick-reaction capability on theoretical research in non-war military operations such as counter-terrorism, stability maintenance, disaster relief, protection of interests and security, international peacekeeping, international relief, joint military exercises, and other theoretical research.

Source: China News Service, December 12, 2011
http://www.chinanews.com/gn/2011/12-12/3526428.shtml

Huanqiu: China Cannot Sit Idly and Watch the U.S. Military Action against Iran

On December 12, 2011, Huanqiu, a state newspaper under Xinhua, published an article titled, “China Cannot Sit Idly and Watch the U.S. Military Action against Iran that Undermines China’s Interests.” The article claimed that “the alliance between China, Russia, and Iran will be a nightmare for the United States.” “From the perspective of the U.S. global strategy, the interdependent relationship between Iran and China, as well as Russia, is the relationship between the lips and the teeth. When the lips are lost, the teeth will be exposed to the cold.” “After the U.S. killed Saddam Hussein, Osama bin Laden, and Muammar Gaddafi, the three anti-American strongmen in the Islamic world, Iran became the last country in the Middle East to be under U.S. siege.”

The article concluded, “After the painful lessons of the Iraq war and the Libya war, China can no longer tolerate the U.S. and the Western countries starting wars at will and undermining China’s interests.” “China should join Russia and firmly oppose any proposal of military action against Iran.”

Source: Huanqiu, December 12, 2011
http://mil.huanqiu.com/Observation/2011-12/2255589.html

People’s Daily: China’s Foreign Trade Increased 21.6% Per Year over the Past Decade

People’s Daily reported on the 10th anniversary of China’s entry into the WTO (World Trade Organization). According to the report, China’s total foreign trade has grown by 21.6% annually since 2001. Standing as the largest exporter and the second largest importer in the world, China’s customs tariffs are now five times the level they were in 2001. Statistics show that, due to the decrease in international demand resulting from a sluggish world economic recovery, the rate of growth of China’s exports has been declining since August of this year. The authorities are fighting the downturn by adjusting the structure of exported goods, as well as by advancing the transformation of export companies. Those provinces that traditionally handle large numbers of exports are still responsible for over 80% of the country’s international trade.

Source: People’s Daily, December 11, 2011

http://paper.people.com.cn/rmrb/html/2011-12/11/nw.D110000renmrb_20111211_6-01.htm?div=-1

Guangzhou Daily: Technical Trade Barriers against Chinese Exports are Increasing

Guangzhou Daily recently published a report complaining that other countries have rapidly increased the technical trade barriers against Chinese exports. Estimates are that the direct financial losses due to these technical trade barriers have grown by 15% per year over the last several years. Last year, the figure was US$58.2 billion. In addition to traditional trade barriers such as tariffs and quotas, ASEAN (The Association of Southeast Asian Nations) countries have adopted more and more technical trade barriers against China. China’s three largest trade partners (Europe, the U.S. and Japan) have recently imposed more and more complicated technical requirements on Chinese products. For example, Chinese rice exported to Japan faces 579 technical inspection items.

Source: Guangzhou Daily, December 11, 2011
http://gzdaily.dayoo.com/html/2011-12/11/content_1554950.htm

Xinhua: China will not Rescue Europe

Xinhua reported on December 10 that the Chinese Deputy Minister of Foreign Affairs, Fu Ying, stated in Vienna that China is not in the business of “rescuing” Europe. Fu offered her opinion when she was visiting Europe and suggested that China is an active participant of Europe’s effort to fight the debt crisis. She said the word “rescue” was misleading. Since the European Union is the world’s largest economy with strong economic power and a much higher living standard than developing countries, it does not need a “rescuer.” Fu expressed her belief in a strong Euro and Europe’s ability to resolve the crisis. She emphasized the point that China does not intend to use financial tools to “control” any European country. She called for a “good investment environment in Europe” for investors from developing countries.

Source: Xinhua, December 11, 2011
http://news.xinhuanet.com/2011-12/11/c_122405576.htm

Study Times: The Cultural Giant Strategy Faces Several Key Issues

Study Times published an article analyzing several key issues that the Cultural Giant Strategy faces.

1) The existing government system: First, in the existing system the government is both the administrator of the culture entities and the host of the culture events at the same time. The government should shift towards being an administrator and be responsible for the entire society. Second, the government is unclear about the difference between a cultural service unit and a business unit and usually applies the same regulations to both. Third, some state owned culture entities have shifted outside of the socialist system. They lack vitality and competitiveness. Last, China lacks elite culture products that are original and have a competitive advantage in the world.

2) Products: In the process of building a cultural giant, what kind of products can China offer that will increase the power of the existing system’s influence?

3) A clear understanding of soft power: How can China turn a rich cultural resource into one with the power of influence and attraction? What is the basis for confidence in Chinese culture?

4) Understanding different paths in developing the culture system. Each region should assess its capabilities to avoid competing against each other. Specifically, they should focus on building their own cultural brand and understand its market potential.

Source: Study Times, December 5, 2011
http://www.studytimes.com.cn:9999/epaper/xxsb/html/2011/12/05/06/06_33.htm

Cambridge Chinese Student Organization Involved in Election Scandal

Southern Weekend recently reported on an election scandal at Cambridge University. Cambridge suspended the Chinese student organization after it could not agree on electing a new president. It also disclosed the organization’s close ties with the Chinese government.

The incident started when Chang Feifan, who was the president of the Cambridge Chinese student organization in 2010, sent an email claiming that the organization’s board had agreed that she would continue her presidency in 2011. The email generated controversy among the members, who stated that no formal election process ever took place and called for one. As elections are a requirement, when the members had not reached agreement by November 1, Cambridge formally disbanded the organization.

Aside from the election scandal, the article also described Chang Feifan, the former president, as being much like a Chinese government official stationed in Cambridge. Chang’s bio indicated that in less than two years she had hosted Chinese government officials who visited the campus and provided trainings for close to 1,000 senior government officials and senior managers from companies in China. Chang managed the foreign projects at Cambridge and was also responsible for several Chinese government sponsored projects in China. An online search suggested that a number of China’s official news agencies, including People’s Daily and China Review News had covered the activities that the Cambridge Chinese student organization hosted. An article from Beijing Youth Newspaper also reported that the Chinese consulate sponsors the annual Chinese New Years party that the Cambridge Chinese student organization hosts each year.

Source: China Review News, December 2, 2011
http://gb.chinareviewnews.com/doc/1019/2/4/2/101924242.html?coluid=7&kindid=0&docid=101924242&mdate=1202092659