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The Chosun Ilbo: Super-Sovereignty Reserve Currency Triggers US-China Currency War

China recently suggested the creation of a “global currency” to replace the US dollar. The US is firmly against the proposal. US President Obama told the press on the March 24 that “the US dollar is extraordinarily strong.” Primary US economic officials retorted on the same day.

Despite US rebuttal, Mr. Zhou Xiaochuan, Governor of the central bank of China, mentioned this “international reserve currency” issue again on March 25. The new members of the G20 are skeptical about the current international currency system.

The article quoted a Russian official announcement on the necessity of a G20 discussion on a new IMF international currency. The British Prime Minister was also quoted on his dismissal of such a discussion.

Source: The Chosun Ilbo, March 26, 2009
http://chn.chosun.com/site/data/html_dir/2009/03/26/20090326000033.html

130,000 Emergencies Reported in Hebei Province in 2008

According to the Emergency Management Teleconference in Hebei Province, close to 130,000 incidents took place in Hebei in 2008, causing 6308 deaths and economic loses of 10.5 billion Yuan. Examples include coal mine accidents as well as milk poisoning from the San Lu milk powder scandal.

All levels of municipal entities at the district, village, town, and city level are instructed to finalize their emergency plans by the end of March. So far, 165,000 plans are reported in place and subject to provincial review.

Source:  China News, March 25, 2009
http://www.chinanews.com.cn/gn/news/2009/03-25/1616631.shtml

US Vigilant of China’s Challenge to US Dollar

Global Times, under Chinese state daily news, Renmin, reported from New York that the United States responded strongly against China’s call for a new international reserve currency to replace US dollar.

The report referred to an AFP article which quoted President Obama as stating that the“US dollar is extraordinarily strong” on March 24.
 
Earlier, US Fed Chairman Ben Bernanke and Treasury Secretary Tim Geithner both agreed that they’ll “unconditionally” refuse the switch to an international currency. The Wall Street Journal reported the story in an article entitled :“China Points the Finger at US Dollar”. The New York Times believes that this demonstrates China’s worry about the safety of its assets in US dollars as well as China’s intent to use this as a playing card in the G20 Summit.

Source: Renmin/Global Times, March 25, 2009
http://world.huanqiu.com/roll/2009-03/414150.html

China Preparing Major Move in South China Sea

An article was posted in a popular Chinese discussion forum suggesting that China should rapidly improve naval and air forces to deal with the increasing threats introduced by the countries bordering the South China Sea.

The article emphasized a need for aircraft carriers. It also compared the current naval and air capabilities between China and those of Malaysia, Vietnam, Indonesia, and the Philippines. Detailed mid-term and long term strategies were laid out.

Source: Teng Xun Forum, March 24, 2009
http://news.boxun.com/news/gb/army/2009/03/200903241058.shtml

BBC’s Field Visit to China’s Economy

According to the British Broadcasting Corporation (BBC), the Chinese economy is facing a major test. China recently released that exports dropped by 25% in February.

BBC business editor Robert Peston recently visited China’s coastal regions.  According to his observations, the southern provinces, unlike Shanghai where the situation is still holding up, are near desperate.  Many factories have shutdown; unemployment is rising. Due to reduced export demand, some companies have relocated to lower operating costs.

Southern China, as Peston sees it, has already fallen into a serious economic recession.  However, official figures still provide an optimistic picture, stating that the economy is just taking a slower pace.

Source:

BBC Chinese  March 20, 2009
http://news.bbc.co.uk/chinese/simp/hi/newsid_7950000/newsid_7954500/7954580.stm

Urban Enforcement Team Formed in Guangdong

A group of urban administrative enforcement teams was formed by Guangdong Nanshan branch of the Public Security Bureau. It consists of 1000 policemen, district security guards and militia. They will assist the Public Security Bureau to deal with urgent incidents to ensure social stability.

Source: Nanfang Daily, March 28, 2009
http://epaper.nddaily.com/H/html/2009-03/28/content_743542.htm

Government Waste/Corruption Documented

China’s Transition Institute (Zhuan Zhixing), a think tank like NGO for socio-economic transformation published a 2008 Handbook of Citizen’s Tax Rights. The book lists sources of government waste:

"There are about four million government vehicles in China that cost the government an annual 200 billion Chinese Yuan (30 billion USD) to operate; however, only about one third of the use is for official business."

"Rough estimates say the government spends at least 200 billion Yuan on dining costs each year, which is equivalent to the cost of the Three Gorges Damn Project."

"In the past year travel overseas for government officials on fact finding/training trips has continued for many locations. At present China’s officials spend more than 300 billion Yuan (44 billion USD) on travel abroad."

"Waste from political building projects–a number of local governments went into debt building ultra-luxurious public squares, theaters, gyms, airports, golf courses, etc. A poor county government in one province spent 70 million Yuan (10 million USD) on a government building, which is equivalent to one third of that county’s yearly income."

Source:
2008 Handbook of Citizen’s Tax Rights
http://www.zhuanxing.cn/search.asp#

Chinese State Media Gloat over France’s General Strike

Xinhua posted on its website an article from The People’s Daily (overseas edition) titled “Why Does France Always Have Mass Strikes?” The article starts, “Widespread strikes, just like delicious wine and luxury products, are one of France’s ‘local specialties.’ [Note: The article refers to strikes in France on March 19, 2009.] So what has caused such a large scale strike? The article states that “it had to start with Sarkozy’s ‘Reform France’ project. As a person who likes to show-off and behave eccentrically, ‘emotional president’ Sarkozy always acts on his own will and in his own way, even in political affairs. After taking office, Sarkozy has started social welfare reform that emphasizes extending working hours, increasing medical fees and decreasing welfare, disregarding opposition from many other sides. … Even at a time of economic crisis with an ever increasing number of jobless workers, Sarkozy insists on his way and continues the reform. Obviously this has angered the French people.” The article concludes that “If conflict from both sides gets worse, one can foresee that in this nation where strikes are a ‘local specialty,’ what awaits Sarkozy will be larger scale strikes, a more difficult situation to handle, and a more perilous political career.”

Source: Xinhua, March 25, 2009
http://news.xinhuanet.com/world/2009-03/25/content_11067019.htm