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Behind the Overheated Chinese Economy

Many scholars have noticed the current overheating of China’s economy, and a fiery debate is ongoing among the people who claim to be "China savvy" about the manner in which the high-flying economy will come back to earth: a soft-landing, a hard-landing, or even a crash landing? Mr. Wen Jiabao, China’s Premier, seems to be the person sitting in the cockpit of that proverbial Chinese airplane struggling to be grounded without too much impact. On April 28, 2004, Mr. Wen told Reuters that the country would take "very forceful action to cool its red-hot economy, since inflationary pressure was building due to a surge in money supply, credit and fixed investment." Whether Mr. Wen really meant business when he said that-and more importantly, if he did, whether he will ever have any chance to see his words translated into reality remains to be seen.

Overheated Chinese Economy

The National Development and Reform Commission released China’s total investment in the year 2003 as 1.6 trillion yuan (~$200 billion). This was about the same as the total investment of 2000, 2001 and 2002 added together. If you need a reference point to have any idea about the magnitude of those investments and the rate of their increase: China’s GDP of 2003 was only 1.16 trillion yuan (~$140 billion, according to official numbers released by the National Bureau of Statistics of China). As it turns out, those numbers are only a small part of the sizzling economy; when you go behind them, some more disturbing patterns emerge, indicating the breakneck boom is as much about the dollars spent on wasteful show-piece projects as about China’s sclerotic system.

After Hu Jintao became China’s President, most seats in the Politburo were still occupied by protégés of former President Jiang Zemin. What is more, Jiang had already placed many of his close allies into different key positions in the government in advance of that transition personally ordained by Deng Xiaoping. However, the two factions, of Hu-Wen and Jiang respectively, differ in their philosophies about economic growth—such as the priorities and strategies—and their interests vary too. In Jiang’s plans, Shanghai and the neighboring Jiangsu Province would have the priority, while Hu has picked the rust belt of Northeastern China (also known as Manchuria) as the new economic focus. But their similarities are just as evident: Both factions have aggressively resorted to exorbitant but doomed loans from state-owned banks to finance and sustain the boom. As a result, what we saw was a top-down chain reaction, as unbridled investments at the national-level bred provincial-level investments, which in turn trickled down to the city-level and the township-level.

The central government has made a practice of not releasing the number of investment projects. Some might guess that the government probably doesn’t track it to start with, given the insurmountable task of doing that. According to related administrative rules, projects under 500 million yuan (~$63 million) do not need to have mandates from the provincial level government. For example, the city of Changzhou, a medium-size boomtown on the Yangtze River can proceed with any projects of choice under 500 million yuan (~ $63 million). By the same reckoning, Nanjing, the capital city of Jiangsu Province with a population ten times larger, should be given the discretion to go ahead with any projects under $630 million; and Shanghai, one of the four directly governed cities in China, can freely work on any projects under $6,300 million. It is easy to see that China’s directly governed cities, its 27 provincial-level cities, its over 200 regional-level cities, its 400 town-level cities, and its over 2,000 town-level executive units have joined forces to form a vast pool of "sovereign" investments that are unknown to the mandarins at the central government.
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Some China experts have estimated that China’s inflation is well within manageable areas as long as its currency in circulation is kept under 1,200 billion yuan (~$145 billion). Since the fourth quarter of 2003, China has experienced three waves of price surges, and the total amount of currency in circulation once peaked at around 6,000 billion (~ $727 billion). A quick, backward calculation would tell us how much those "sovereign" investments could be, for they are supposed to fill in the gap between those two divergent numbers—a hole of several trillion yuan.

Problem Solved?

It is no secret that both Hu and Wen are well aware of the complexity and the seriousness of an overheated economy. The conundrum facing the new leadership, however, is not the symptoms—and problems—of the economic fever but any prescription drug to cure it. A larger, Catch-22 question is: if there is such a drug, one that not only relieves the pain but kills the old patient to create a new, more robust one, are Hu and Wen ready to swallow it? And if they do, will Jiang and his Shanghai faction be willing to go along with it? Right now, the chest-thumping and empty rhetoric from above to cool down the economy is nothing but background noise to the special projects championed by the Shanghai (Jiang) faction. In reality, those projects are still going forward full blast, just as those special projects in Manchuria, darlings of Hu and Wen and their much-hyped New Deal, cannot be recalled or cancelled, either. As such, a question with Chinese characteristics would naturally come to mind: is this discussion about "economic landing" a healthy debate about economics, or another thinly-disguised game for power?

For all the talk, and uncertainties, about deflating any bubbles in the Chinese economy, one thing is certain, that is, it will be those millions of middle—and small—size private enterprises that bear the brunt of the sacrifice required by the "cool-down" measures fervently pitched by the Chinese leadership. Without any political clout, these private enterprises are at the bottom of the pecking order, and subject to unconditional "closure, suspension, or merger" as long as they need support from state banks. In contrast, those enormous special projects in Shanghai and Manchuria will continue to hurtle forward defiantly, although the consensus has it that China’s hope lies in its fast-growing private sector. Apparently, this paradox is not so much about Chinese economics as about the country’s engrained political culture.

Another likely, and ironic, victim of the policies to douse the heat in the economy will be Taiwanese business people throwing big money into all kinds of projects in China. During most parts of the 1990s, Beijing bent itself backward to jump-start its stalling reform program in the wake of the Tiananmen Massacre, when most western investors, still hounded by gory pictures on the TV, balked at doing business there. As it turned out, those Taiwan businessmen filled the void and received a lot of benefits, including preferential treatment in taxes. Now there are over 300,000 Taiwanese-funded enterprises in China. However, all indications suggest that Beijing no longer needs to be so sweet to Taiwan businessmen. The main reasons are as follows:
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  • Most Taiwan businessmen do not have very strong political allies in China. Those who are in favor of the popular President Chen Shuibian are more vulnerable to economic penalties due to their political orientation.
  • For cultural and other reasons, much of the Taiwanese merchandise produced on the Mainland competes with similar Chinese products.
  • China is vigilant about its reliance on money pumping across the Taiwan Strait, as it could erode its firm stance against Taiwanese independence—right now a bargaining chip with the U.S.

Some shrewd businessmen from Taiwan have realized this, and have started to leave the Mainland. For the majority still refusing to come to terms with the reality, and to fold their business in China, it is only a matter of time before a trickle becomes a torrent that becomes a tidal wave, rolling for withdrawals from the Mainland. If they wait for too long—until next year or even later—they may not be able to recover the losses due to a hostile investment environment.

Why So Much Spending?

i. Waste

In China, because of poor management, most projects cost more than can be justified. Consequently, Return on Investment (ROI) of many special projects was zero or even negative. This problem was compounded by blind passions and thus poorly planned actions of many Communist functionaries aggressively promoting economic development as a way to promote their own political careers. They do not respect economic laws governing the market; all they want is statistics that give them the bragging right and the stepping stone for ascendance in the regime.

When former Party leader Zhao Ziyang resigned following the Tiananmen Massacre and Jiang Zemin took over, the reserves in the four major state-owned banks were over 1,300 billion (~$157 billion). After 15 years of breakneck development, or low-efficiency exploitation of resources reminiscent of the famed Schumpeterian growth theory, Chinese banks are now full of non-performing loans. In November 2001, the former chief of the People’s Bank of China (China’s central bank) Dai Xianglong openly admitted to the public that total loans of the four major banks were 680 billion (~$82 billion), among which non-performing loans accounted for about 20% and losses about 7%. This has resulted in none of the four largest state-owned commercial banks reaching the 8% Capital Adequacy Ratio stipulated by the Barsel Accord. On May 8, 2002, former Premier Zhu Rongji said at the National Financial Leadership Caucus, an internal meeting, that national loan losses were as much as 680 billion (~$82 billion). Since he didn’t have to lie at a meeting closed to the outside, this means the entire savings of Chinese citizens had been almost all gone by then.
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At the beginning of the 1990s, there were about 110,000 state-owned enterprises (SOEs). In 1999, only 1,000 of them survived after being repeatedly resuscitated by state-owned banks. These survivors, mostly national champions carefully cultivated by the central government over the years, all weathered the storm that swept across the country between 1995 and 2001, when most SOEs, and the central government, finally accepted their fate to go bust. In fact, the losses of 680 billion yuan (~$82 billion) only refer to those stemming from bank loans; there are many other types of losses associated with those tens of thousands of failed SOEs that will never be known.

In addition to deficits of the four major banks, there are different types of debts of the government, for example:

4,000 billion yuan (~$500 billion) foreign debt;
6,000 billion yuan (~$727 billion) treasury bonds;
8,000 billion yuan (~$969 billion), deferred salaries of state-owned enterprises and social securities;
6,000 billion yuan (~$727 billion) local government debts.

Debts of the government are at least 24 trillion yuan (~$2.9 trillion). The total internal and external debts of the Chinese government are over 50 trillion yuan (~ $6 trillion). If the 1.3 billion of Chinese population have to share this debt now, each person needs to be responsible for 38,461 yuan, equivalent to $4,668. In comparison, China’s GDP in 2003 was 1.16 trillion yuan (~$140 billion).

ii. Corruption

A primary reason for overheated investment in China is rampant corruption. For a government official in charge of investments, an additional project means an additional source of kickbacks and extra power. There are about 60 million Communist Party members in China. Among them, about 6 million are cadres, or the functionaries supervising the rank-and-file members. The Stalinist system that was kept intact during the economic boom has enabled these cadres to be at the forefront in the drive to "get rich hilariously," as exhorted by Deng Xiaoping. Since it is always hard to draw a line between political and economic matters in China, these cadres, no longer called "party secretaries" but perhaps known as "CEOs" or "the Chairman of the board" to outsiders, take on all the trappings of a capitalist but still retain the unquestioned power accorded to them by the Party over every matter within their jurisdiction, whether it be a county or the whole country. Chinese law dictates that any officials who have more than 10,000 yuan (~$1,212) in inappropriate income are to be brought to trial. In the eyes of the masses, those officials with petty violations are only "small greed’s." There are millions of "big greed’s" that take bribes in millions of yuan. According to the Financial Times and other credible sources, in the past five years, over 10,000 corrupted officials in China took $450 billion out of the country, earning China the dubious distinction of number four (after Venezuela, Mexico, and Argentina) in capital loss from large numbers of high-ranking officials and their families fleeing with the country’s financial resources.
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Conclusion

While it is common knowledge that the overheated Chinese economy is caused by excessive investments, the root cause for the country’s economic fever is systemic and intrinsic to its basic infrastructure. Before any substantial changes take place in China that allow it to take real “medicine”, such talks of a soft versus hard landing might be misleading. Remember, the Chinese economy is not yet a free-flying airplane seeking a better landing spot, but only a blip on the screen of a kid’s game machine that is monitored and completely controlled by much older tacticians whose motive and belief are at odds with each other and different from outside analysts. For them, effecting a soft-landing is as easy as producing a consistent 8% GDP growth rate as prescribed in the country’s five-year plan. So, when the Chinese economy finally achieves a landing, the real question is not whether it is "soft" or "hard," but whether it is real.

Li Ding is a Washington DC based economist.

The Multifaced Officials of Beijing

Since I can never quite figure out Beijing officialdom, I simply watch it as I would another indigenous performing art—Beijing Opera, with its fancy costumes, dramatic make-up, dazzling kongfu-style fighting, and high-pitched voices singing and talking in a dialect that few, including yours truly, can understand.

Rising from a junior male role or Xiaosheng, Chinese communist top leader Hu Jintao now masterfully plays the role of Laosheng, the leading actor as the middle-aged mandarin official but without the conventional beard.

And his partner, Premier Wen Jiabao, the man with the willowy figure, smooth manner, and quick tendency to shed tears, plays the leading actress, or Dan, a female role traditionally played by a male in Beijing Opera.

No Beijing Opera would be complete without the role of Chou, or comedy actor, who generally plays the role of a dim-witted and amusing character with blinking eyes and all the comic gestures. Who can play this better than Li Zhaoxing, the infamous, Red-Guard-style foreign minister?

At least I can figure out their roles. It’s those up-and-coming new stars who can sing in English that puzzle me the most.

Although the Taizidang, or princelings, the children of the Chinese Communist Party (CCP) elite, still enjoy considerable inherited privileges, the new stars are those technocrats who understand the West and have mastered the multifaceted performing skills.

For example, Wang Huning, who emerged from his study of Western politics, was appointed as Jiang Zemin’s senior adviser. Xia Yong, an expert on Western law and human rights, became Hu Jintao’s top intelligence man.

More and more foreign-educated young hopefuls have been drawn into the power circle. Some are placed at the provincial and ministerial levels; some become senior advisers, some academic authoritative figures, and some big capitalists.

Unlike the old guys, these new players not only speak good English and know how to deal with Westerners, but also understand the art, the between-the-lines play of the Chinese language, as well as the underlying rules of the game in China’s power circle. They can switch between two languages, two cultures—like CVT (Continuously Variable Transmission), slick and smooth. In private, they can open up to you and share secrets to make you feel that they are double agents inside CCP headquarters. But on stage, under the spotlight, they are the standard version of the official apologists.{mospagebreak}

Here are a few shining stars:

Zhou Ji, Minister of Education, received his master’s and Ph.D. degrees from State University of New York back in the 1980s. He’s known for putting on a good show in front of visiting Western delegations or whenever he visits Western countries to pledge his commitment to learning from Western educational systems. And he frequently sponsors Sino-American academic exchange programs, such as the first "Exhibit of China’s 21st Century Higher Education" in the United States.

But he’s also infamously known for his iron fist in controlling the thinking among China’s college faculties and students. He’s responsible for censoring college Internets and shutting down popular forums and websites in over a dozen colleges, including Beijing University and Tsinghua University.

Min Weifang, the Stanford-educated CCP Secretary at Beijing University, who also completed his postdoctoral research at the University of Texas and was once assistant to the university president, considers turning the university into a CCP tool as his governing mission. It was he who fired Professor Jiao Guobiao, an outspoken activist, and openly vowed "to sweep any reactionary speeches out of the classrooms!"

Li Xiguang, dean of the College of Journalism and Communication at Tsinghua University, has demonstrated his bilingual acting skills on both sides of the Pacific. When he’s in the States, he lectures and writes papers in English on freedom of the press, which has made him a popular guy, well-known among his American audience for being such an open-minded professor at the most prestigious university in China.

But back in China, lecturing and writing in Chinese, the same Professor Li is also known for demonizing the United States. He openly calls for restriction of freedom of speech on the Internet, and thus has won himself the notorious "Apologist for Speech Censorship" by Chinese Internet users.

It is of small wonder that, other than providing a fancy resume and a stepping-stone to rapid success, Western education and democracy have done little for these people.

And there is no need to worry about the reserves. There are those college students who claim to be "patriotic and angry youth." Living in the campus utopia, their patriotism, no matter how strong, never stands in their way of pursuing an opportunistic lifestyle.{mospagebreak}

They can loudly protest in front of the U.S. Embassy today and come back tomorrow to wait in line for a student visa. They don’t think there is anything incongruous between the two acts, as both are genuine in their perspectives. They can be genuinely angry when they curse the Americans, and they are more genuinely jubilant on their flight to Harvard. No moral burdens. Whatever feels good and works for the moment is considered a smart move.

This is what is currently at play among the modern, multifaced officialdom of China—conflicting but in concert. The sharp difference between public showcase and private behavior, comic acting and tragic reality, patriotism and Western-worship, is magically in cahoots with people’s cynical lifestyles. The greed for profit and the ruthless approach lead to callous indulgence and lavish spending.

Indeed, it’s too complicated for me. Life is much simpler when I watch the "American Idol" show or vote for the shoot-from-the-hip kind of politician.

Liu Xiaobo is a freelance writer in Beijing.

Translated by CHINASCOPE.

“Suicide Rabbit” Cartoon Hugely Popular with Chinese Internet Surfers

To know what young Chinese like or don’t like these days, the best bet is to find the answer on the Internet instead of using a poll. By the end of 2006, there were 843,000 Chinese websites with 140 million people regularly going online, making China’s Internet usage the second largest in the world. What’s more, surfing the Internet has become the No. 1 way for most young Chinese to spend their leisure time.

Recently, a cartoon series called "Suicide Rabbit" has emerged as a new Internet star and become hugely popular among Chinese Internet surfers. Since the first "Suicide Rabbit" cartoon was posted on the forum of the Tianya website (www.tianya.cn, Tianya is the Chinese word for skyline) on August 17, 2006, it has attracted hundreds of thousands of Chinese Internet viewers and has constantly generated a record volume of new hits.

The idea of "Suicide Rabbit" came from British cartoonist Andy Riley’s popular work "Bunny Suicide." On the Internet, it even uses the Chinese name for "Bunny Suicide." The cartoon portrays a rabbit with sunglasses that always seeks to commit suicide at various spots that have social relevance.

The author is a 35-year-old cartoonist from Beijing. He uses the nickname "Right-Hand-Cartoon" as his signature. All his works are closely related to social news events, with the exception of "politically intolerable topics." Using a satirical and humorous manner, the author successfully reveals social problems of public concern in a way that the character gets people’s sympathy.

For example, one time when the rabbit wanted to commit suicide, he injected himself with xinfei. [Editor’s note: xinfei is the Chinese name for clindamycin, a common antibiotic in clinical use. Due to the manufacturer’s poor quality control, the medicine caused seven accidental deaths. The public was in an uproar, demanding punishment for those creating the fake products that are so rampant in China.]

In another case, the rabbit stands high up on a truck that surpasses the height limit when the truck passes under a bridge. The regulation of transportation is so chaotic in China that many don’t bother to follow the rules, although they are, for the most part, strictly enforced. In another instance, the rabbit lies on the hot ground during last summer’s unprecedented drought in Chongqing, exposing itself to the sun. In another, the rabbit intentionally falls into a manhole. In China, people steal the manhole covers and sell them as used metal for a tiny profit, leaving the holes uncovered, and so on, and so forth.

Every episode draws on the familiarity of real-life situations, and reflects a true social problem that requires serious attention and solution.{mospagebreak}

The cartoon has not only attracted viewers but also invited heated discussion over the satirized topics. Some believe that the popularity of "Suicide Rabbit" on the Internet results from people’s desire to openly criticize the circumstances of today’s modern life in China. Others think it is a reflection of the limited avenues of escape from today’s highly stressful metropolitan life. In the cartoon, they find a way to release the pressure. Still others believe that the cartoon gives a hint that death is a kind of release. If a person already has thoughts of committing suicide, it could be dangerous. So the topic is only suitable for adults, not for adolescents.

As a matter of fact, "Suicide Rabbit" is not the only Internet cartoon that has intrigued Internet surfers. Since last June, many other Internet cartoon themes have come forward, one after another. They have even become a main theme on many Internet forums. A few other topics such as "Modern Embarrassments" and "Wanton Village," topics that describe the trivial stories of ordinary people’s daily lives, have also had tremendous success.

Can Sun is a correspondent for Chinascope.

Eight-Year-Old Girl Baby-Sits Her Brother at School

The typical winter weather in Guizhou Province (southwest China) is gloomy and rainy. the sunshine barely lasts for three days in a row. On a slippery village road near the Moon Mountain area, seeing a young girl carrying a boy on her back to school is a common sight.

On June 24, 2006, China’s Today Morning Express newspaper published the story of such a girl. Her name is Ning Yuexiang, a fourth grader at the Dadong Elementary school in Yongli County. She is eight years old, and the boy she carries on her back is her two-year-old brother.

She started washing clothes at the age of four. At age five, she climbed hills with her father to chop wood, which is a source of fuel supply for daily cooking. She started taking care of her six-month-old baby brother at six years of age so that her mother could work on the farm.

the first time Ning Yuexiang took her brother to school, he cried in the classroom. the next day she was upset and went to school alone. After school, she realized that her brother had been crying at home for the whole day. Since then, she has been carrying him to school every day.

Her father often works away from home, and her mother takes care of the farm. Her grandmother is over 90 years old. After school, Ning Yuexiang’s daily chores consist of taking care of her brother, doing housework, washing clothes, and feeding the pigs.

Ning Yuexiang’s home is a three-room, two-story building mostly made of locally available wood. the partitions of the house are broken. the cooking stove, situated in the middle room, is surrounded by plastic sheeting to block the mountain breezes. the pig pen is located at the right. the upper floor is where the family sleeps and stores grains. the floor squeaks whenever someone walks.

the story may sound improbable in metropolitan cities such as Beijing or Shanghai, but in the remote countryside many children may even fare worse than little Yuexiang. As one of her teachers says, "She is lucky that she can make it to school."

When asked if life is hard, Yuexiang says no. She also says that she is not tired as long as her brother is not crying, and that shets happy when he is with her.

But when asked about how hard she has to study to go to college, she showed sadness on her face. Yuexiang is never late to school and has been getting excellent grades. Being able to go to college one day is her biggest wish. She worries whether her father will be able to afford the tuition.

Lily Qu is a correspondent for Chinascope.

On Sino-U.S. Relations

How Do  Ordinary Chinese View China-U.S. Relations?

[Editor’s note: In general, China’s state-run media has not been very kind when reporting American politics and government policies. How the Chinese view Sino-U.S. relations may help in analyzing the impact of the Chinese media on the people. Around the time of the traditional Chinese Lantern Festival, Global Times (a newspaper under the Xinhua News Agency) conducted a poll in five major cities (Beijing, Shanghai, Guangzhou, Wuhan, and Chongqing), with the assistance of the Institute of American Studies at the Chinese Academy of Social Sciences. The poll contained 22 questions and started with random sampling, and then assigned survey personnel to visit and interview selected respondents. The effective samples for the whole poll are 1,175 respondents. Below is a report of the results published in Global Times on March 2, 2005.]

How Chinese See the United States

"Of residents in these cities, 51.9 percent are somewhat satisfied, 18 percent satisfied and 1 percent very satisfied with China-U.S. relations. With three combined, the rate of satisfaction reaches as high as 70.9 percent.

"Most people somewhat like or like Americans, accounting for 52.9 percent and 13.2 percent respectively. The combination of the two is 66.1 percent.

"49.2 percent of respondents believe that the United States is China’s competitor. At the same time, 10.4 percent regard the United States as a friendly country. 11.7 percent regard the United States as a model to follow. 25.6 percent regard the United States as a cooperation partner. The total of the three categories is 47.7 percent.

"A high 56.7 percent believe that the United States is indeed trying to restrain China.

"60.5 percent think that the major issue that may influence China-U.S. relations in the future is the Taiwan issue.

"Under the question of why they are not satisfied with the United Sates, 37.6 percent choose ‘Arms sale to Taiwan.’ 31.7 percent choose ‘Starting the Iraqi War,’ while 7.9 percent choose ‘Enhancing military relations with Japan.’

"Over half of the respondents think that China and the United States ‘will’ or ‘may’ have conflicts over the Taiwan issue (11.9 percent and 41.2 percent respectively). Yet 40 percent of respondents think the possibility of conflicts is not high or does not exist.{mospagebreak}

"Respondents commonly hold a negative attitude toward the United States for repeatedly raising China’s human rights issue. 49.3 percent think that the United State wants to use this method to sabotage China’s stability. 10.4 percent think it is to smear China’s image. 19.1 percent thinks it is the result of U.S. lack of understanding of China. The total of the three reaches a high 78.8 percent. A mere 15.7 percent indicate that the United States is promoting democracy in China.

"50.7 percent of the respondents do not see much change in China-U.S. relations in recent years, while 27.3 percent see some improvement.

"61.92 percent hold that that the development of China-U.S. relations has accelerated China’s economic development. 49.31 percent believe that it has promoted China’s reform to open up.

"45.0 percent of the respondents predict that, during Bush’s second term, China-U.S. relations would remain status quo. 29.4 percent think there will be some improvement. But 11.7 percent of respondents believe there will be regression.

"More than half (55.7 percent) think that the American culture has both good and bad influence on China. Another 22 percent think that it has a positive effect on China.

"Among the respondents, what people appreciate most is the United States’ advanced science and technology, accounting for 43.7 percent, followed by the United States’ well-built legal system (20.9 percent) and good life (17.9 percent).

"Large numbers of urban Chinese have positive comments on the economic exchange between the two countries. 46.18 percent hold that the economic exchange between the two countries has promoted political exchanges, and 46.09 percent think it has enhanced the friendship between their people.

"49.8 percent of respondents do not harbor prejudice against American products in the Chinese market. They think that as long as the quality and the service are good, they do not mind the origin of the brand. 25.5 percent say they welcome American products in the Chinese market, thinking it would benefit both countries.

"31.9 percent of the respondents are able to accept America’s cultural products but think those are not applicable to their lives. Moreover, 27.5 percent say that they highly appreciate America’s cultural products and that there are many exquisite pieces in those products. With the two combined altogether, 59.4 percent are able to accept American culture.{mospagebreak}

"Besides, there is another group of important data: 62.7 percent of China’s urban residents learn about the United States mostly through public media. 20.7 percent learn about the United States from American movies, while only 3.7 percent through direct contacts with Americans."

"Love and Hate" Between China and The United States

"Speaking about interpreting the poll results, Ding Gang, Deputy Director of the International Section of People’s Daily, said that he was deeply impressed by how Chinese’s view of the United States resembles the way that Americans view China. Both have a contradictory mentality: love and hate or love and fear.

"Such a mentality could be seen in several results in the poll. Most Chinese, for example, have sensed that the United States is restraining China but there are still a lot of Chinese who like Americans. Yan Xuetong, Director of the International Affairs Institute, Tsinghua University, also stated that we were able to see from the poll that the majority of the Chinese public shows appreciation of Americans and the American society. However, a larger percentage of the respondents do not think much of the U.S. foreign policies, including its China policy.

"As to the negative factors in the development of China-U.S. relations, the viewpoint of everyday Chinese people is consistent with that of the Chinese government. Yan Xuetong stated that one could see from the poll that Chinese made a clear distinction among Americans, American society and the U.S. government. What the Chinese public is discontented with is mostly the U.S. foreign policies, including its China policy—Taiwan being the core. Over 60 percent of the respondents think that it (the Taiwan issue) is the key issue that affects China-U.S. relations in the future. However, according to a survey conducted recently in the United States, 32 percent of Americans believe that the most important problem in the China-U.S. relations is the human rights issue. Tao Wenzhao, researcher at the Institute of American Studies of the Chinese Academy of Social Sciences, thinks that different Americans raised such issues for different reasons. Some of them have never been to China. Others intentionally use the human rights issue to sabotage China’s development. Also, others are of the opinion that all should accept American values. Thus, it is rather complicated."

What Influences How Chinese View The United States?

"All experts pay special attention to the 62.7 percent—the high percentage of Chinese urban residents who admit that media form their impressions of the United States. Tao Wenzhao also admits that in fact media influences, to a great extent, scholars and policy makers in China and the United States. The role of media on public opinions of China-U.S. relations should not be underestimated. Yan Xuetong says that it is obvious that Chinese people basically accept whatever media says about international affairs.{mospagebreak}

"Just because of this, Yan Xuetong pointed out specifically, that among the factors that cause the discontent of Chinese people with the United States, there was almost no difference between the number of people who choose ‘Arms sale to Taiwan’ and the number of people who choose ‘Starting the Iraqi War.’ But to his great surprise, few people choose ‘Enhancing military relations with Japan.’ ‘One is something far away from us. Another is an important event that takes place outside our front door. The third one is happening right in our house. Why does the poll show such a result?’ says Yan Xuetong. He further reminds us, ‘Think about our media’s reports on Iraq. Compared to the U.S. reports on the Taiwan arms sale, we don’t know how much our reports outnumber theirs!’ As for ‘the United States and Japan strengthen their military relations,’ Ding Gang believes that from the analysis of the poll data, many people do not even know about it or simply do not understand it.

"Ding Gang’s view on this particular issue is that, media that has a significant influence on the public should heighten their sense of responsibility. With respect to balanced reporting, news quantities, perspectives and positions, media should be cautious in making statements and careful in their conduct so as to play a positive role on international issues concerning China’s interests, such as China-U.S. relations. Media should stick to its own position—media should not give up independent thinking and proceed to follow the tune of western countries."

Translated by CHINASCOPE from http://news.xinhuanet.com/world/2005-03/02/content_2637134.htm

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