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State Council: Make Sure Price Control is Implemented

A Recent directive from the General Office of State Council re-emphasized exerting price control with “effective measures.” On April 2, 2008, The Correcting Industrial Illegitimate Practice Office (CIIPO) of the State Council issued a Notice On Implementing The Correction Of Industrial Illegitimate Practice in 2008. The notice asked “relevant authorities” to strengthen regulation on market price, strictly control the government-stipulated price, and take temporary measures to intervene the prices of necessities. It also demanded “strike hard” on illegalities on pricing practices.

Source:, April 10, 2008

Xinhua: U.S.-Russian Summit “Whitewashes” the Relationship Between the Two

On April 7, 2008, Xinhua issued a commentary on recent Bush’s visit to Russia. The “warm” meeting between Putin and Bush appeared to be inconsistent with the low tempreture of the bilateral relationship in 2007, Xinhua commented. It stated that the two were closer this time out of their own political agenda – none wanted to leave a negative diplomatic legacy. Xinhua is skeptical and predicts that the future of the Declaration on the Framework of the U.S. – Russia Strategic Relations" will most likely remain unknown.

Xinhua, April 7, 2008

Xinhua: Western Media Influences Public Opinion against China

“Since the beginning of last year, western media on China has primarily been negative. Starting from huge trade deficit of the United States, western media frequently ran reports that the United States government official request China to accelerate RMB appreciation, followed by exaggerated news reports on quality of China-made products that led to China-made products being taken off the shelves in the U.S. stores. Subsequently, western media engaged in massive attacks on the quality of environment as the Beijing Olympics approaches, alleging that Beijing does not meet the prerequisites to host the Olympics. Recently, Tibetan issue has become the focus of western media. Due to the intensive negative reports by the Western media, the Americans will naturally regard China as one of their primary hostile countries.”

Xinhua, April 7, 2008.

SARFT Establishes System To Monitor Real Time Nationwide TV Programming

China Administration of Radio, Film and TV (SARFT) now has a nationwide TV program monitoring network that allows government to monitor real time TV broadcasting of 1,372 programs. The capability is deemed one of the latest achievements of research and development of the SARFT. "This has totally changed the ineffective way of the past when we had to manually monitor – we could not listen or watch or follow up or track down or discipline.”

Xinhua, April 9, 2008

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

Xinhua Article Says U.S. Congressmen Profit from Iraq War

In Xinhua’s World News section on April 6, 2008, the state-run media published an article that quoted an Associated Press’s report of U.S. Congress officials’ investment in U.S. defense companies. The Xinhua article is titled “U.S. Congress Leaders Make Huge Profits From War.” Under the title, the article highlighted Iraq war with a picture memorizing the soldiers died in the war and a description of war’s damage in the picture caption. The article quoted the AP report and said that U.S. congressmen invested US$196 million in the defense companies having businesses from the U.S. State Department and have made huge amounts of money since the Iraq war. The Xinhua article named John Kerry, Joseph Lieberman, and Roy Blunt as the ones that have benefited most.

Xinhua, April 6, 2008