While the Bank of China (BOC) vigorously prepares to go public on overseas stock markets, it seems that more disturbing news is just around the corner. It was just a short time ago that the president of the BOC’s Kaiping branch took 4 billion yuan (US$482 million) illegally and escaped out of the country. Now the Bank of China faces another scandal. The BOC’s Tianjin branch has stolen money from its clientele. A depositor involved has been jailed and tortured for the past two years. The scandal has tainted the BOC’s image as it prepares for its initial public offering (IPO) in the U.S.
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A series of serious mining accidents in China has recently brought mining safety into the spotlight. In several cases, casualties have been in the hundreds. As the accidents were being exposed, people shockingly discovered that child laborers were among the casualties.

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Mrs. He Qinglian is a renowned economist and jornalist from China. Her book “The Trap of China’s Modernization” became a bestseller and an authoritative reference book for China’s economists. The Japanese translation of the book was also highly acclaimed. The updated version is now being translated into English. Because of her explicit views and analyses of China’s economic truth, based mostly on government released data, she is disliked by the authorities and has been forced into exile. She is now staying in the U.S. as a guest researcher.

The following is her comments on the impact of a new regulation regarding money transfer issued by the People’s Bank of China.

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The Bank of China (BOC) and the China Construction Bank (CCB) —two of the country’s Big Four [1] state-owned banks—are both racing for initial public offerings (IPO) sometime in 2005, possibly on the New York stock exchange. “We hope that all our financial indices can reach the standard of a listed company at the time of our initial public offering,” said Li Lihui, President of the BOC.

Both banks are negotiating with potential strategic investors—probably more sophisticated financial institutions—who will buy stakes in the Chinese banks and help them streamline their operations, said the presidents of the two banks. They did not want to reveal the investors’ names, however, citing “commercial secret concerns.”

Why are the banks so eager to get listed on the overseas exchanges? What are the major risks for overseas investors if they choose to purchase their stocks?
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Background

1. International

Since the policy of reform and opening-up to the outside world was first laid out in November of 1978 during the Third Plenary Session of the Eleventh Central Committee of the Chinese Communist Party (CCP), China has been peacefully developing for 25 years, and its overall national strength has been significantly increased. Nevertheless, the political system of a one-party dictatorship has never changed, and China’s human rights record has been notoriously bad. As a result, countries around the world, including the United States, Europe, Japan and many other Southeast Asian countries, are worried about the expansion of China’s influences and the emergence of a new “Yellow Calamity.” Several years ago, some western scholars put forward the argument of a developing “China Threat,” arousing questions about China’s fast development. This caused a great amount of international tension. In response to such an argument, President Hu Jingtao and Premier Wen Jiabao instructed the Chinese scholars led by the Party School of the CCP to study the notion of “China’s Peaceful Rise” in order to counter the “China Threat” argument.

2. Domestic

In the final few years of Jiang Zemin’s thirteen-year era as the Secretary General of the CCP, Jiang presented his “Three Representations” theory, to which most senior officials inside the CCP were indifferent. Some outside the CCP even mocked it as “shameless self-praise.” By and large, the “Three Representations” theory has played no meaningful role at all domestically or internationally.

To launch their own theoretical framework and ideological foundation, Hu and Wen have gathered a number of scholars in the first year of their administration to shape up a new theory. Finally on November 3, 2003, Mr. Zheng Bijian, vice president of the Party School of China’s Communist Central Committee, put forward the theory of “China’s Peaceful Rise.”
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“Treatment or lifesaving” usually is the job of medical doctors. In China, it has become a buzzword in the Chinese securities industry these day.

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For over five thousand years, the Chinese people have created a splendid civilization on land nurtured by the Yellow River and Yangtze River. During this long period of time, dynasties have come and gone, and the Chinese culture has waxed and waned. Grand and moving stories have played out on the historical stage of China.

The year 1840, the year commonly considered by historians as the beginning of China’s contemporary era, marked the start of China’s journey from tradition to modernization. Chinese civilization experienced four major episodes of challenge and response. The first three episodes include the invasion of Beijing by the English-French allied force in the early 1860s, the Sino-Japanese war in 1894, and the Russo-Japanese war in China’s northeast in 1906. To these three episodes of challenge, China responded with the Westernization movement, which was marked by the importation of modern goods and weapons, institutional reforms through the Reform Movement of 1898 and the attempt at the end of the late Qing Dynasty to establish constitutional rule, and later, the Democratic Revolution of 1911.

At the end of the First World War, China, though it emerged victorious, was not listed among the stronger powers at that time. Many Chinese believed that the first three episodes of response had failed. The May-Fourth Movement would lead to the fourth attempt at responding to previous challenges and culminate in the complete westernization of Chinese culture through the communist movement and its extreme revolution.

This article concerns the impact on the civilization of China of the communist movement and the Communist Party. Looking at the history of China’s last 160 years, nearly one hundred million people have died unnatural deaths. After all that has happened to China’s traditional culture and civilization, whether chosen by the Chinese or imposed on China from the outside, what have been the consequences?
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The Epoch Times newspaper is making its “Time” by publishing a series of nine commentaries on the Chinese Communist Party.

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