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CNS: Chinese Ambassador: RMB Exchange Rate Is Not the Cause of the US-China Trade Imbalance

On November 13, 2010, China News Service published the contents of a speech that Zhang

Yesui, China’s Ambassador to the United States, gave at the University of Nebraska in Lincoln. In his speech, Zhang observed, “The trade imbalance between the U.S. and China is not caused by the under-valued exchange rate of the RMB, but by structural differences in trade and investment.” 

Zhang suggested that a comprehensive approach to easing the trade imbalance between China and the U.S. was in the works: First, China is trying to achieve economic growth through boosting domestic demand. The 12th Five-Year Plan, which is being drafted, emphasizes the continued effort to expand domestic demand. Second, the U.S. should release its restrictions on the export of high-tech products to China. Third, the U.S. should encourage Chinese businesses to invest in the U.S.

Source: China News Service, November 13, 2010 
http://www.chinanews.com.cn/gn/2010/11-13/2653942.shtml

International Herald Leader: China Exhibits Three Symbols of Being a Great Power

[Editor’s Note: The following is a translation of an official media article that appeared in the International Herald Leader on October 11, 2010. It was written as a rebuttal to the September 26 New York Times article, “Three Faces of the New China.” [1] According to the article, “three symbols/indications that a nation is powerful are: that it possesses a full set of armor; it has the capacity to serve; and it has the ability to protect.” It criticized the U.S. by asking, “Or is the U.S. a ‘deadbeat,’ a ‘troublemaker,’ or a ‘blackmailer,’ who is counting on the whole world to pay the price for its debt problems, who vigorously eggs on Asia-Pacific countries to engage in a naval arms race, and who recognizes one China, yet forces a province in China to purchase U.S. weapons that cost an arm and a leg?”] [2]

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Qiushi: Distinguishing Four Major Dichotomies Is the Focal Point of Political Thought Education

Qiushi, a journal of the Chinese Communist Party, published a theoretical article about political thought education. The article stressed that political thought education is a political advantage of the CCP and of socialist countries; it is the major avenue to spread the CCP’s theory and policies, to fortify and expand socialist mainstream ideology, and to provide the spiritual force for economic and social development. In the current profoundly changing international and domestic situation, and with the area of ideology facing complicated situations, it is important to utilize political thought education to help people to “distinguish the four major dichotomies.” The four major dichotomies are: Marxism versus anti-Marxism; a mixed economy that is led by Chinese-style socialist public ownership on the one hand, and an economic order that is dominated by either private capital or total state ownership on the other; democracy under socialism with Chinese characteristics versus Western capitalist democracy; and socialist thought and culture versus feudal and corrupt capitalist ideas and culture.

The editor added a note saying that “distinguishing the four major dichotomies” manifests the fundamental requirement of socialist ideology.

Source: Qiushi Journal, November 9, 2010 
http://www.qstheory.cn/zz/zgtsshzyll/201011/t20101109_56052.htm

The Second Stage of the Currency War Is China’s Biggest Worry

China Business News published an article in which Mei Xinyu, a scholar at the Research Institution of the Ministry of Commerce, asked two questions. What will the “currency flood” produced by the core country (the U.S.) bring to China? What effects and consequences will the “currency war” have?

The article said that currency depreciation and loosening of the currency supply is only the first stage of the currency war. The second stage of the currency war, when the core country re-tightens the currency policy, will create the real blow. Looking at a longer time frame, pressure from the export of inflation is not the biggest blow of the currency flood. The second stage of–currency re-tightening–will bring about massive reversal of capital flow and a debt crisis.

Source: China Business News, November 8, 2010 
http://www.yicai.com/news/2010/11/591485.html

China News Service: U.S. Publicity about Free Navigation in the South China Sea is to Contain China

China News Service recently published a special article written by Liu Feitao, a scholar from the China Institute of International Affairs. The article questioned U.S. public discussion about “freedom of navigation in the South China Sea.” Liu stated, “Since July, on various public occasions, U.S. politicians have frequently mentioned ‘freedom and security of navigation in the South China Sea,’ claiming it ‘is in the national interest of the U.S.’ and that the U.S. opposes ‘any activities obstructing freedom of navigation.’”

The article says that the fact that the U.S. purposely brought up an issue that was a non-issue to begin with is really because of “well-thought-out ulterior motives.” The author believes that the U.S. has three reasons for doing this: first, to maintain the U.S. military hegemony in the Asia-Pacific region; second, to seek support in maintaining its Asia-Pacific strategy; and third, to use the South China Sea issue to contain China.

Source: China News Service, November 9, 2010
http://www.chinanews.com.cn/gn/2010/11-09/2642310.shtml

China to Strengthen Control of City Residents

Xinhua was authorized to publish “The Opinion on Strengthening and Improving the Development of the Urban Community Residential Committee,” which was jointly issued by the General Office of the Central Committee of the CCP and the General Office of the State Council on November 9. This directive stressed that such a committee is the CCP’s basic organization in the city and called for great efforts from Party organizations at all levels to develop it. The directive also emphasized the important role that the residential committee plays in maintaining social stability.

Such a committee will be strictly under the Party’s leadership. The concomitant Party committee members are suggested to be “democratically” elected as the heads of the residential committee. The residential committee will have 5-9 staff members. The city-level government will provide the financing for both the staff salaries and for operations. It will also provide annual training in Party ideology for the head of the committee and training for other members every two years. The provincial Party committee will meet regularly to discuss residential committee development work and the city, county, and district Party secretaries will be directly responsible for the development work.

Source: Xinhua, November 9, 2010
http://news.xinhuanet.com/2010-11/09/c_12755666.htm

China Radio International: U.S. Monetary Policy Hurts China’s Economy

The U.S. has created a great challenge for China’s economy, China Radio International Online reported. The U.S. flooding the market with U.S. dollars has multiple impacts and effectively devalues the U.S. dollar: 1. It makes China lose money on its foreign reserve holdings of U.S. dollar based assets, such as U.S. Treasury bonds. 2. It puts great pressure on the renminbi to appreciate and hurt China’s export economy. 3. It provides the market with extra money that may come to China and continue pushing up China’s stock and housing market bubble. 4. It causes a big increase in the price of commodities such as oil, food, and iron ore, and in turn, it creates the pressure of inflation on China’s economy as China imports large quantities of these commodities. 5. It forces the Bank of China to increase the renminbi supply to maintain the renminbi exchange rate.

Source: China Radio International Online, November 9, 2010
http://gb.cri.cn/27824/2010/11/09/5311s3049187.htm

China Youth Daily: Is India Ready to Challenge China?

Commenting on Obama’s visit to India on November 7, 2010, an article in China Youth Daily said that some Indians want to challenge China, with U.S. backing. The U.S. supports India with economic ties and international diplomacy. Some Indians criticize China for using Pakistan to block India’s rise. They feel that it is the right time for India to challenge China for the leadership of South Asia and even for all of Asia. India is using diplomatic and economic means to win other Asian countries’ friendship in order to counter China’s expansion.

However, the article argued that the U.S. just wants to use India to counter China. The U.S wants itself, not India, to be the leader of Asia. Just like its relationship with Japan, the U.S. will never view India as an equal.

Source: China Youth Daily, November 9, 2010
http://zqb.cyol.com/content/2010-11/09/content_3440306.htm