On paper, China is well on its way to becoming a regional or even global power—economically, politically, and militarily. Normally, such developments would bring prosperity and stability to a society. China, however, seems to abide by a different rule. Instead of prosperity, we see increased corruption of government officials, an ever-widening gap between rich and poor, and a growing number of cases of social injustice. As a result, incidents of social unrest have been erupting one after another. This is evidenced by a report from China’s Ministry of Public Security: There were 8,700 incidents of social unrest in 1993 and 32,000 in 1999; in 2004, the number of such incidents increased to 78,000, involving 3.8 million participants.

The causes for such incidents are quite diverse: forced loss of property, unpaid wages, land pollution, deprivation of the right to employment, and so on and so forth; but the manifestation of them are alarmingly similar. In most of the incidents, government officials or entities were the targets, and the socially disadvantaged were seeking justice. In the past, Chinese people had a tendency to accept their fate passively and wait patiently for the government to straighten things out. After decades of seeing the laws and political system work against them, however, distrust and resentment toward the government is bubbling to the surface. Facing great injustices, the common Chinese people are getting organized and boldly confronting the government, a phenomenon widely referred to in China as "weiquan," or "protecting rights."

So far, the government’s answer to the civil movement has been predictable—suppression at any cost—and there is no sign of compromise in sight. A quick look at China’s public security system is quite telling. Until the late 1980s, China’s riot police was an obscure entity that no one ever heard from. Today, it has become one of the best-equipped governmental arms that number a whopping two million, most of them former military personnel.

The weiquan movement in China is starting to catch the attention of some international observers. However, most believe that the situation is still manageable for the Chinese government. In this issue, we provide a synopsis of the weiquan movement in China and its current status.

China is legendary in its richness and longevity of culture. To enrich our readers with the tradition of this civilization, we are introducing a "Culture" section, with stories that cover various topics ranging from history, medicine, and art, to travel and people. Found in this issue is a topic that is quintessentially Chinese: Tea. It is our hope that this new addition will be both informative and enjoyable.

Pregnant Ph.D. Candidate Unable to Obtain Childbirth Permit

[Beijing Morning Post, October 23, 2005] A married and three-month pregnant female Ph.D. student at a Beijing college has been unable to obtain a childbirth permit because of her student status. Many regions in China have stipulations stating that before a married couple’s first childbirth, they are required to obtain a childbirth permit. The permit requires a fee, and has to be used within a certain period of time. If a couple with a permit does not get pregnant within that period, the permit will expire.

The Ph.D. student was married two years ago, and learned in August that she was pregnant. Because her registered permanent residence is outside Beijing, she had to apply for the permit from her college. But the authorities of the college ignored her request. In despair, she sent her request to the authorities of the Beijing Birth Control Office, who indicated that giving birth requires a childbirth permit, that without the permit, the child’s permanent residence cannot be registered, and that other services related to the pregnant woman and her child cannot be guaranteed. Students’ registered permanent residences should be with their colleges, and therefore the schools should issue the childbirth permits, the staff at Beijing Birth Control Office told her.

Associate Party Secretary of Shanxi Province Removed from Post Due to Gang Ties

[Singtao Daily, October 22, 2005] Hou Wujie, the Associate Party Secretary of Shanxi Province, was recently expelled from the Chinese Communist Party and discharged from his post. Hou was reportedly the backstage boss of the largest underworld organization in Shanxi. He was once arrested in Beijing for engaging a prostitute. According to official charges, during the period when he was the Associate Party Secretary of Shanxi, Hou took cash bribes of US$100,000 and material goods valued at 160,000 yuan (US$19,800). Hou was dismissed from his post in December 2004 and was arrested formally at the end of July 2005.

300,000 New College Grads Seek Jobs in Guangdong

[Nanfang Daily, October 17, 2005] Estimates indicate that more than 220,000 students will graduate from universities, technical schools, and graduate schools in Guangdong Province in 2006. In addition, 60,000 to 70,000 graduating students from other provinces will move to Guangdong to look for jobs, making the sum of those newly entering the employment market close to 300,000. This year, the Guangdong Province Career Consultation Center will hold a series of job fairs beginning from November 20. The exact times and places are being coordinated. There will be more than 30 job fairs held this year, which is many more than former years.{mospagebreak}

China’s Pollution Extends to Hong Kong, Air Quality Deteriorates

[The Epoch Times, October 16, 2005] As China’s economy rapidly develops, pollutants from the factories of Hong Kong’s neighboring Guangdong Province increasingly drift across to Hong Kong. With more and more emissions from the ever-increasing number of automobiles in Guangdong, the smog condition has significantly worsened in Hong Kong.

According to a report from Bloomberg News, CLSA research indicates that the terrible air condition in Hong Kong drives away many foreign management workers, annually costs many companies US$9,000 in medical expenses per employee, and greatly reduces their workforce. Anthony Hedley, chairman of the department of community medicine at the University of Hong Kong, said, "Hong Kong is going backward in terms of pollution…The government has been noninterventionist to the point of being really negligent."

Hong Kong Economist Questions China’s GDP

[Financial Times, October 24, 2005] China’s most recent GDP has just been published, and many economists are already questioning the accuracy of these figures. According to Chinese reports, China’s GDP increased 9.4 percent in the third quarter. The growth is about the same as the numbers of the last two quarters, which were 9.4 percent and 9.5 percent respectively. Hong Kong economist Jim Walker questions this data, as he believes that the GDP listed for the last three quarters does not match the figures obtained from other economic indicators. Walker believes the Chinese officials’ published data is "something from an imaginary world."

About One Million College Graduates Jobless This Year

[Central News Agency, October 13, 2005] With the expansion of college admissions, the number of college graduates in China increases rapidly year after year. Nevertheless, there are few job openings for college graduates. It is reported that among this year’s college graduates, about one million of them remain jobless. In the meantime, there are 4.7 million new college students this year-a record number. Out of the 3.3 million college students who graduated this summer, 70 percent of them are now employed, with 30 percent, or approximately one million young graduates, still unemployed.{mospagebreak}

Pharmaceutical Kickbacks in China Reach 770 Million Yuan Annually

[The Epoch Times, October 17, 2005] The medical system in China has become a disaster area of corruption. According to official data, China’s pharmaceutical industry spends 770 million yuan (US$95 million) of national assets annually, or 16 percent of the tax revenue from the industry, in paying kickbacks for pharmaceutical sales and bribing medical professionals. Some Chinese officials have publicly acknowledged that the ten-year-long reform of China’s medical system ended in failure. In particular, 90 percent of people surveyed are unsatisfied with the medical system reform, while four-fifths indicated that hospitals are now out for profit, not for social welfare. The difficulty in getting medical treatments and the high cost of medicines has become one of the toughest social issues in China.

China Has 15 Percent of World’s Auto Accidents

[The Beijing News, October 16, 2005] According to statistics, China has only 1.9 percent of the world’s cars, but has 15 percent of the world’s car accidents. Hundreds of thousands of people die in car accidents every year. China Machinery Industry Association’s deputy president Zhang Xiaoyu said during the "2005 Shanghai Jiading Auto Forum," that according to international standards, cities in which 20 out of 100 families own a car can be recognized as entering the "automobile society." Chinese cities like Shanghai, Beijing, and Guangzhou have already reached this standard. Zhang added that compared to developed countries, China’s automobile cultural consciousness is still weak. Over 100,000 die of car accidents every year in China, making it one of the worst countries for car accidents.

Cholera Outbreak in Zhejiang Province, Over 100 Sick

[Central News Agency, October 7, 2005] In September of 2005, over 100 incidents of cholera were reported in Jiaxing City, Zhejiang Province. According to Hong Kong’s Wenhui Daily, after the cholera outbreaks in several townships of Jiaxing, the Health Department has sent in staff to monitor restaurants, food stores, and industries, drinking water, and medical facilities. The main reason for the outbreaks is suspected to be contamination in the rivers and water supply systems.{mospagebreak}

China’s Groundwater Pollution Reaches Critical Levels

[The Epoch Times, October 14, 2005] After analyzing groundwater quality data from 118 cities in China, The Chinese Research Academy of Environmental Sciences found that all the cities had polluted groundwater. Sixty-four percent of the cities suffered from heavy pollution, while 33 percent registered light pollution. As reported on Xinhuanet, the Academy’s data shows that China’s pollution problem centers mostly on the continually expanding areas of groundwater pollution. The groundwater of two-thirds of China’s cities is generally decreasing in quality, with some areas already in serious situations. In over 300 cities, groundwater pollution has caused water-supply shortages. The contaminants found in water are increasing, and are also becoming more and more complex. The concentration and extent of contaminants are also continually growing. This situation has made the decreased quality of natural water a large problem. Endemic diseases have also appeared in certain areas, caused by poor water quality.

New Monitoring System to Be Installed on the Streets of Beijing

[SecretChina.com, October 17, 2005] Beijing’s Haidian District is now implementing a plan called "Science for Security." In the next three years, the government will install 2,052 surveillance cameras to cover the district. The cameras will be set up at all angles, and will form the monitoring and prevention system for the district. Scholars point out that the tightened monitoring system is a sign that Chinese society wants to avoid the control of the Chinese Communist Party. This is the first district-level monitoring and command center. The related department hopes to carefully control public protests and emergencies.

CCP Approves Five-Year Plan, No Mention of Political Reform

[SecretChina.com, October 12, 2005] The Fifth Plenary Session of the 16th Central Committee of the Chinese Communist Party (CCP) concluded in Beijing on October 11. At the meeting, the 11th Five-Year Plan for National Economy and Social Development was approved. Some of the goals addressed included reforming development concepts, improving social justice, reducing the wealth gap, and increasing farmers’ incomes. But according to analysts, the new Five-Year Plan did not mention anything about the urgently needed political reform. It is impossible to solve the existing social and economic problems under the current system of state.

This fifth plenary session is the first committee session presided over by current Chinese leader Hu Jintao, so the outside world has paid much attention to what new policies Hu would implement after strengthening his political power. But after the committee session’s bulletin was released, many people were disappointed.{mospagebreak}

Thousands of Workers in Chongqing Protest, Meet Violent Suppression

[The Epoch Times, October 8, 2005] The former workers at Chongqing Special Steel Co. have held appeals for their rights for over two months, but finally encountered violent suppression by the authorities on October 7, with two women beaten to death, a significant number of protesters injured, and all nine representatives of the workers arrested, leaving behind thousands of jobless workers without leadership.

According to people familiar with the matter, the order to suppress the appeal came directly from Beijing. At 7 a.m., around 3,000 police officers marched into Shuangbei Garden, where over 10,000 workers were gathered. After a standoff, police started to arrest the workers’ representatives. During the violent conflict, two old women died from beatings and many people were injured. In the end, all of the workers’ representatives were arrested.

Beijing Youth Daily Management Suspected of Financial Crimes

[Asia Times, October 4, 2005] The first Chinese media group to list its shares on an overseas stock exchange, the Beijing Youth Daily temporarily stopped trading on the Hong Kong Stock Market on October 3 for undisclosed reasons. According to a same-day report from Caijing Magazine, one of China’s most-respected financial magazines, six managing staff members of Beijing Youth Daily have been suspected of financial crimes from July 9 to September 26, 2005. The six staff members were taken away by the anti-corruption bureau for further investigation. Included were Zheng Yijun and Niu Ming, two vice-presidents of Beijing Media, the advertising unit of the Beijing Youth Daily; Yu Dagong and Zhu Weijing, the director and associate director of the advertising unit; Duan Tao, the director of classified advertising; and a staff member of the advertising unit. They are accused of financial crimes and accepting bribes.

Internet Users in China Exceed 103 Million

[Central News Agency, October 4, 2005] According to a report by the China Internet Information Center, the number of Internet users in China has exceeded 103 million, or one-thirteenth of China’s population, signaling how Internet use is becoming part of life in China.

According to electronic media in Hong Kong, China had roughly 50,000 Internet accounts ten years ago. A recent survey of 2,400 people in five cities shows that China’s Internet users spend an average of 2.73 hours online on a daily basis. They mainly spend their time reading news, sending and receiving emails, playing online games, collecting information, and chatting. According to the China Internet Information Center, exceeding 103 million Internet users is a big milestone for China. In as short as seven years, there has been a hundredfold increase in the number of Internet users in China. As of June 30, 2005, 45.6 million computers are being used for Internet activities, a 25 percent increase from the same period last year.{mospagebreak}

Three Thousand Taxi Drivers in Shanxi Province Hold Strike

[Wenhui Daily, Hong Kong, October 14, 2005] Around three thousand taxi drivers and taxi-business owners in Linfen, Shanxi Province, held a large-scale strike, protesting how corrupt officials collude with businessmen to allow a large number of unauthorized vehicles in the taxi service, which negatively affects the legitimate businesses.

The protesters smashed police cars and taxis, damaging dozens of vehicles and injuring several people. The strike was caused by the fact that many unauthorized cars and manned tricycles are illegally in service, and are protected by the traffic police and some public transportation staffers, who sometimes directly run their own taxi businesses or indirectly control the business through their relatives.

Dam Collapse in Yunnan Causes Man-Made Disaster

[Asia Times, October 3, 2005] On July 21, 2005, the three villages of Zuantian, Xiaoyan, and Fengzi in Liliang County, Yunnan Province, suffered an unforgettable disaster. At 6:20 a.m., the dam wall of the local Qixian Lake Reservoir suddenly collapsed, flooding three villages and leaving 16 dead and 23 injured. Fifteen houses were swept away, and 1,000 acres of fields were flooded. The tragedy was described by local authorities as "a regrettable natural disaster." After that, the media suddenly stopped reporting on the disaster. General estimation was that the propaganda department had forbidden further reports about this affair. An Asia Times Online freelance reporter traveled to the scene and discovered that it was another man-made disaster caused by shoddy construction.

Taishi Village’s Attempt at Democracy Ends in Failure

[Voice of America, October 2, 2005] The attempt to recall the head of the Village Committee of Taishi Village, Guangdong Province, ended in failure because of the withdrawal of two-thirds of the villagers, resulting in an insufficient number of voters backing the motion as required by law. Some villagers who were forced to withdraw said that under the intimidation and lures from the village officials, they had no choice but to withdraw against their own will from the fight to defend their rights. Some observers had previously predicted that the recall motion in Taishi Village would have historical significance in pushing forward political reform in China.

In the afternoon of September 29, 2005, the Recall Election Committee posted a notice that out of 584 villagers who once signed on the motion to recall the village head, 396 no longer supported the motion. As the remaining number of supporters did not meet the one-fifths of the village population required by law, the motion automatically became invalid.{mospagebreak}

Taiwanese Investments Flow Back to Taiwan

[Liberty Times, October 4, 2005] Nowadays it has become very common for Taiwanese businesses to bring their investments back to Taiwan. In the Industrial Park of the Department of Economy alone, there are 47 companies who have investments in the industrial park reaching 32.6 billion New Taiwan Dollars (TWD, about US$975 million). Taking into account investments outside the industrial park and those in the service industries, the capital inflow from Taiwanese businesses outside Taiwan exceeds 50 billion TWD (US$1.5 billion).

According to a survey by Taiwan’s Bureau of Industry, five out of the 47 businesses came back to Taiwan to build new factories after closing their factories in China, while 27 of them still have factories in China, but want to diversify their risks by investing in Taiwan. The rest of the 15 manufacturers have evaluated sites on both sides of the Taiwan Strait, but finally decided to base their businesses in Taiwan.

Below is an excerpt of a commentary on the U.S.-China Economic and Security Review Commission’s (USCC’s) 2005 Annual Report to Congress. It was originally from Nanfang Daily and then republished November 13, 2005, on the website of the Xinhua News Agency under the section "Xinhua Comments," with a title of "Why Does the U.S. Think Tank Like to Incite the Cold Wind [bad-mouth China]?"

 "On November 9, U.S.-China Economic and Security Review Commission (USCC) under the United States Congress submitted its 2005 Annual Report to Congress.

Although the USCC mainly focuses on U.S.-China economic and trade relations, it tends to analyze U.S. security interests from a negative perspective and exaggerates the theory of a China threat. This year is no exception. The Report believes that the United States and China will not become opponents and China has shown ‘some encouraging changes.’ However, the Report concludes that the current situation of China-U.S. relations will have a negative impact on the long-term economic and security interests of the United States. Therefore, in the fields of trade and the appreciation of Renminbi [Chinese currency], non-proliferation and Taiwan issues, the United States must put pressure on China through various means. The Report suggests that on the issues of trade and security the United States and the European Union as well as Japan coordinate to put pressure on China, and that the U.S. forces in the West Pacific be strengthened to counter the continuous increase of Chinese military power. It is not difficult to tell that, while compared to each annual report since 2002 released by the USCC, although the wording of the Report has eased to a certain extent, it continues to play the old tune of exaggerating ‘the theory of a China threat.’

"Led by Chairman D’Amato the USCC visited China toward the end of last summer. I once had a face-to-face exchange with them. These people did not bear anti-China sentiments. They basically are experts and social activists in related fields. When we had the exchanges, although there were differences between two sides, the atmosphere was harmonious. There must be some reasons that the USCC published such a report with ‘the cold war thinking’ again.

"First of all, as two big countries, China and the United States not only have common interests, but indeed also differences and conflicts. This is a fact. The United States is the only super power today while China is a rising developing country. With different national interests and different perspectives, it is not accidental that some frictions happen. What we can emphasize is we hope that both sides push for a healthy bilateral relationship out of consideration of the overall China-U.S. relations. But one cannot impose its own understanding on to the other party.
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"Next, ideology affects U.S. understanding of China in every perspective. China and the United States have different values, different political systems, and different cultures and traditions. Moreover, it is very difficult to have fundamental changes in a short period of time. Americans believe that their system is the best. Such prejudice in ideology and the sense of superiority make it hard for most Americans to identify with the Chinese political system. Similarly, it is also very difficult for 12 members of the USCC not to be limited by such ideology.

"Third, the views of this Report reflect public opinion in the United States. The public in the United States differ on the China issue but has been very negative in general about China. We cannot ignore the influence of anti-China forces. Although in recent years China-U.S. relations have become better, the voices warning of a China threat have been on the rise, poisoning the public’s objective understanding of China. The U.S. domestic politics inevitably affects the USCC. Of course, their Report in turn will promote the China threat theory in the U.S. Congress and then in the entire United States.

"Finally, it is the institutional interest that causes the trouble. The mission of the USCC is to monitor and investigate the impact of China-U.S. economic and trade relations on U. S. national security. The USCC naturally puts a lot of efforts in making the Congress and the Administration take the USCC seriously and in attracting media and public attention to promote its own influence. Think about it, if they claim China-U.S. relations are all good, why should the U.S. Congress allocate funds to set up such a commission? The USCC must demonstrate that it is not wasting taxpayers’ money."

http://news.xinhuanet.com/comments/2005-11/13/content_3773713.htm

Guangming Daily is one of the five biggest Communist Party newspapers in China. The recent democratic movement in Central Asian countries, referred to as the "velvet revolution" or "color revolution," has caused great concerns and worries to the Chinese communist government. Chinese state-run media have followed the events very closely and have published numerous articles both as commentaries and as news reports. A Guangming Daily article "(We) must be alert on the ‘Velvet Revolution’" on May 27, 2005, was a typical one and was one of the most widely posted articles of its kind on Chinese websites.

"Recently, one ‘velvet revolutions’ (a.k.a. ‘color revolutions’) after another took place in Georgia, the Ukraine, and Kyrgyzstan, attracting attention all over the world. The so-called ‘velvet revolution,’ which is directed by the United States to overthrow incumbent governments, requires us to be on high alert.

"Firstly, the so-called ‘velvet revolution’ has it own characteristics for us to trace. In fact, it is not a revolution, but a coup d’etat to subvert a political power by means of peaceful ‘street politics.’ (Sometimes it does not necessarily exclude use of violence, but mostly it does not resort to violence). Certainly this is not something new. During the end of 1980s and the early 1990s, the dramatic political changes in the former Soviet Union were called a ‘velvet revolution.’ Afterwards, it happened in the former Yugoslavia. Nowadays, these same old tricks have been used in some countries of the Commonwealth of Independent States (CIS) again. The ‘velvet revolution’ can be put into two categories. One is to change the nature of a regime in a socialist country from the socialist proletariat regime to a capitalist bourgeoisie dictatorship. The other is to change the ruling power in capitalist countries to be pro-U.S. (or more pro-U.S.) ones. For China, it is somewhat more important to learn our lessons from the first type of coup d’etat.

"Although two types of ‘velvet revolution’ are different in nature, they have something in common and they have some characteristics to trace. For those ‘velvet revolutions’ that have taken place already, they roughly followed these steps:

"The first step was to create public opinion favoring subversion of the government. Comrade Mao Zedong had said, to overthrow a government, you must always create public opinion first and then do ideology work. The revolutionary class must do so and so does the counter-revolutionary class. This is an undeniable truth. The same is true with the ‘velvet revolutions’ covertly orchestrated and supported by the United States.

"The second step is to establish a political organization. An opposition organization is then set up on the basis of creating public opinion to confuse people’s thinking. With the organization, you may influence more people. At first, it is an informal organization and the next step is to establish an oppositional party. In a socialist country, to allow the establishment of a so-called ‘informal organization’ is actually to permit the public to carry on anti-communism and anti-socialism activities in an organized manner. And, to go along with the establishment of an oppositional party is to implement a multi-party political system. However, to adopt the multi-party political system will inevitably bring the end of communist party’s leadership, which will create an opportunity for a bourgeoisie political party to take over.
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"The third step is to look for an influential person, who is liberal and pro-America with a certain commanding ability, as leader of the oppositional group to bring together those who try to overthrow the ruling power. Once the time is ripe, he can lead the public to attack the ruling power and organize a new regime under his leadership. Preferably, this person is trained by the United States government, or has close contacts with American institutions, and must have a pro-America tendency, and therefore be reliable.

"The fourth step is to use an unexpected event or the election, under the banner of democracy and freedom, to organize activities of ‘street politics,’ such as demonstrations, parades, rallies, worker strikes, student walkouts, taking over public squares, attacking governmental agencies and so on, pressuring the government to give up power. The ‘street politics’ is like a ‘one-way street’ that cannot be negotiated with reason. Whatever the oppositional group does is democratic. For the government not meeting the satisfaction of the United States, whatever it does is against democracy. Then, if the oppositional group receives a small number of votes, they would claim election fraud. A re-election must be held or it is not democratic. If the oppositional group carries on illegal activities, including attacking the presidential office and the congressional building, it is democratic. If the government tries to stop them, it is not democratic. In a word, they use ‘democracy’ to tie the hands of the government that the United States is unsatisfied with, and to set free pro-American oppositional groups.

"It can be said that, for the so-called ‘velvet revolution,’ the ideology work is its foundation, to organize important figures to lead the opposition group is the key and unexpected events are opportunities they can use. And their goal is to establish a pro-America regime.

"The United States has a deep understanding of the regularity of success in each ‘velvet revolution.’ After the success in Georgia, the Ukraine, and Kyrgyzstan, the United States could hardly wait to do it in Belarus. At the meeting with Belarus oppositional leaders on April 21, 2005, U.S. Secretary of State Condoleezza Rice declared, ‘It is the time for Belarus to change now.’ She proposed four main directions: supporting independent media and establishing new public media, speeding up the development of the mass movements, organizing an opposition union and electing single presidential candidate [for the opposition union] to compete against incumbent President Lukashenko in the 2006 presidential election.

Secondly, the United States orchestrated all of them from behind the scenes. The ‘velvet revolution’ which implements the United States’ interest has taken place in various countries. On the surface, their purposes were to pursue ‘democracy’ for the people and to change the ruling regime, but there was a black hand behind it all manipulated them. What they have implemented was totally in the U.S. interest and to serve U.S. strategic needs.
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"The United States is an imperialist country ruled by monopolistic bourgeoisie. Its fundamental interest lies in overseas expansion to promote hegemonies. After the Cold War, the United States gained the position of ‘the super power’ and accelerated its steps in a plot to implement hegemony in the world and to build a uni-polar world. International political powers became severely unbalanced. As a result, the American hegemonies appeared aggressive and reckless. ‘To protect the world from past disasters, there must be one leader and only one leader,’ and the United States is ‘most capable to lead this world,’ said former U.S. President Clinton. After the ‘9.11 incident,’ U.S. President Bush said, ‘around the world, all the nations must choose. They are either with us, or they’re with the terrorists.’ These statements fully demonstrate the bullying and overbearing character of the United States. The United States’ position as the super power will not have a fundamental change in a short period of time, and this kind of global hegemonism will not change either. As to the nature of the U.S. imperialism, we should have a clear understanding. Don’t have any unrealistic wishful thinking. As to the danger of a U.S. manipulated ‘velvet revolution,’ we should be highly vigilant and should not lower our guard.

"There was one thing in common while the United States carried out the ‘velvet revolution’ — all under the banner of democracy. The United States would first brand those regimes, which it was not happy with, as ‘being undemocratic,’ ‘dictatorship,’ ‘anti-humanity,’ ‘violating human rights’ and so on. Then they would instigate the opposition groups to stand out for democracy. This is most deceiving. Is there anyone who doesn’t want the democracy? Between the end of 1980s and early 1990s, when East-European countries in the former Soviet Union experienced dramatic political changes, the United States just used this trick. In the beginning of this century, the same trick was still utilized in Georgia, the Ukraine, and Kyrgyzstan. For example, on October 7, 1989, in Berlin, the capital of democratic Germany, demonstrators who gained support from the United State shouted loudly outside the Republic Palace where the ‘National Day’ reception was held. Their slogan was to demand ‘democracy.’ On October 9, 70,000 people attended the parade and protest in Leipzig. What they demanded was ‘democracy.’ The socialist regimes in East-European countries in the former Soviet Union all collapsed under the impact of ‘democratic street politics.’ After entering the 21st century, the United States also used the tricks of ‘democracy’ and ‘fair election’ to force the rulers of former Yugoslavia Milosevic government and previous regimes in Georgia, Ukraine, and Kyrgyzstan to step down be replaced with obedient pro-U.S. regimes. In the Ukrainian election incident, for instance, while supporters of the opposition group were asked: ‘Why did you support Yushchenko?’ Many people replied: ‘Supporting Yushchenko is to support democracy.’ This trick has never failed in each case. The United States wanted to use this trick toward China as well.
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‘China’s progress toward democracy should have a time table.’ Rice shouted recently prior to her visit to China. It seemed that she couldn’t wait any longer. Having learned from this historical experience, we must widely educate vast members of the Communist Party, officials, and the public about Marxist democracy ideology, to distinguish the boundary between the proletariat democracy and the bourgeois democracy, to righteously criticize the bourgeois democracy and to expose the real nature of the United States to promote ‘democracy.’ At the same time, we must adopt realistic and effective measures to enhance and glorify the socialist democracy and to truly manifest people being the master of their own country. This is an urgent task while we are confronted by the United States with its aggressive attack of promoting the ‘velvet revolution.’

"To realize the ‘velvet revolution,’ the United States will not hesitate to provide financial support. As long as the ‘velvet revolution’ has taken place in a country, the oppositional groups in that country will have financial support from the United States. Anti-government activities, including ideological propaganda, ‘street politics’ and organizing elections, need a lot of money. But most of the oppositional groups don’t have enough funding. They cannot help but depend on the United States for disbursements. In this aspect, the United States is extremely generous and not concerned about how much it will cost. In the Ukraine, while the opposition groups, led by Yushchenko, organized large-scale demonstrations which needed to gather people from every region to the capital Kiev, the United States provided, through NGOs, such as the Soros Foundation, the money for charter buses and labor. (It is said they paid every person US$10 per day, which is far beyond the local daily wage.) Also, tents were set up on the Square for overnight stays. During the process of the ‘velvet revolution’ in Georgia, in the name of assistance from NGOs the United States had done all the preparation work beforehand, such as how much money they would spend, which anti-government organization should be subsidized, whom they would cooperate with, etc. In 2004, to subvert the Belarus Lukashenko administration, the United States allocated US$89 million to support Belarusian independent media, oppositional groups, domestic organizations, and business groups. In 2005, the U.S. Senate announced that they would allocate special funding of US$5 million to subsidize the opposition groups in Belarus. It is said the funding that the U.S. government allocates to ‘promote democracy’ is as high as US$1 billion.

"It is worth noting that the United States usually accomplishes the preparation for the ‘velvet revolution’ through non-governmental organizations, and the same is true of doing the ideology work. Behind the façade of the cooperation and exchanges, scientific research and so on, various foundations carry on penetration and select candidates who could be of use in the future. This type of covert activity can change and influence quietly. Its impact will not be known until the right time comes. Thus, we must treat this kind of foundations and organizations seriously and scrutinize them carefully. Don’t hanker for a small gain, but forget one’s integrity.
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"The United States emphasizes on training ‘backbone members’ who could lead the public. Ukraine’s Yushchenko was selected by the United States as the ‘leader.’ All of them have accepted the overt and covert help from the United States. Some of them also had taken ‘democratic education’ in the United States.

"We should take serious consideration of various methods used by the United States for promoting the ‘velvet revolution.’ We realize that the United States regards China (the only great country of socialism in the world) as a thorn in its eyes and wants to get rid of it badly. Just as what Deng Xiaoping pointed out: the U.S.-led Western countries ‘are engaging in the third world war without gun smoke— to have socialist countries peacefully transformed’ (‘Deng Xiaoping Literature Selections,’ volume 3, page 344). The United States stepped up its strategies of Westernizing and splitting China and tried to plot a ‘velvet revolution’ in China. Under the support from the United States, members of the bourgeois liberalization are also ready to make trouble. The best illustration was the ‘people’s amendment of constitution’ in 2003. Therefore, we must learn a lesson from the ‘velvet revolution’ hat have already happened and prevent them from happening (in China).

"Thirdly, the prevention of the ‘velvet revolution’ is system engineering. Under current international and national situation, the risk of the ‘velvet revolution’ is a reality. To prevent the ‘velvet revolution,’ we must enhance the national dictatorial tool. Under the situation that the political turmoil appears, utilizing law enforcement to keep the stability of the political situation and social order is totally necessary. Just as what Deng Xiaoping pointed out: ‘In a long period of time, the strength of the proletariat, as a newly arisen class to take the power and to establish the Socialism, is weaker than that of Capitalism. Without relying on the dictatorship, it cannot resist the attack of the Capitalism. To firmly insist on Socialism must firmly insist on the proletariat dictatorship, which is called the people’s democratic dictatorship.’ He added, ‘Using the strength of the people’s democratic dictatorship to fortify people’s political power is righteous thing. There is nothing unreasonable.’ (‘Deng Xiaoping Literature Selections,’ volume 3, page 365 and 379). The democracy and the dictatorship are united. Only by adopting dictatorial rule toward the extremely small number of enemies can we fully safeguard most people’s rights of democracy. WE should adopting a dictatorial rule toward the liberalization activists who created the troublesome ‘velvet revolution,’ by requiring them to be obedient and not allowing them to speak and act casually, and dealing with them righteously and reasonable through legal procedure when they violate criminal law. Doing so won’t damage our country’s reputation. We should not have any concern over this matter.

"However, in regard to the ‘velvet revolution’ that jeopardizes the stability of a political situation, it is far from enough if we rely on the law enforcement authorities to deal with it. We must focus our attention on prevention.
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"First of all, we must strengthen the Marxist leadership in our mind and do the ideological work well. Comrade Hu Jintao has mentioned this issue many times. He said, ‘Ideology has long been an important battlefield where hostile forces struggle fiercely with us. Loss of control in this battlefield can cause social turmoil, or even lose power. The hostile forces want to turn a society into chaos and subvert a regime. Usually, they always break open a breach from the ideological domain first and start to confuse people’s thoughts. We may look at the lessons of the dramatic change in Eastern Europe and the disintegration of the Soviet Union. At that time, Gorbachev proposed the ‘multiplicity of ideology,’ the so-called ‘openness’ and giving up Marxism in the instructional position of the ideological domain, which finally caused a clamor for the ideological trend of non-Marxism and the anti-Marxism. It became a very important reason for the disintegration of the Soviet Union and the collapse of the Soviet Communist Party.

"Next, in terms of organizations we must ensure all levels of leadership are firmly held in the hands of Marxists. This is the key issue as to whether the Communist Party can strengthen its own ruling status and prevent a ‘velvet revolution.’

"Thirdly, the most fundamental issue is to consolidate and strengthen the class foundation of the Party. In socialist countries, the so-called ‘velvet revolution’ is actually an intense class struggle. The power balance of classes determines winner or loser."

http://guancha.gmw.cn/show.aspx?id=2711

Rong Yiren, a Chinese billionaire and former vice president of China, and Communist Party member since 1985 died of illness in Beijing on Wednesday night October 26, 2005, at the age of 89.

Top Chinese leaders bade farewell to Rong Yiren in the hospital, where Rong’s body was covered with a Chinese Communist Party flag and surrounded by flowers and cypress leaves.

According to Xinhua News Agency, the Communist Party officially declared Rong as an "outstanding representative of the national industrial and commercial circle in modern China," a "superb state leader," and a "great fighter for patriotism and communism."

Rong’s life was closely intertwined with the agenda of the Communist Party and the turbulent history of China.

Rong was born in Wuxi City, China’s Jiangsu Province, on May 1, 1916, five years after Sun Yat-sen (1866-1925) was inaugurated in Nanjing as the provisional President of the new Republic of China on January 1, 1912.

<>Rong was educated at Shanghai’s élite British Christian-run St. John’s University, China’s most prestigious college at the time. In 1937, he took over the family business and started to manage flour and textile mills and banking companies.

<>By 1949, when the communists led by Mao took over Shanghai, Rong had become the descendant of Rong Desheng, a Shanghai textile and flour entrepreneur and one of pre-Mao China’s wealthiest men.

For reasons unkown to us all, Rong chose to stay and work with the new communist government, though the majority of his family members and friends had took their wealth to Taiwan, Hong Kong, and the United States.

In 1956, when private companies were nationalized, like those who did not flee communism, Rong "surrendered" his wealth to the communists. In 1957, he was appointed Vice Mayor of Shanghai and later moved to Beijing where he became Vice Minister of Textiles.

From 1966 to 1976, Mao Tsedong unleashed the Cultural Revolution in a bid to hang on to power and destroy "capitalist roaders" when millions of Chinese suffered from the protracted harassment and imprisonment. Rong’s background made him an obvious target for "re-education."
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According to some accounts, his home in Beijing was ransacked, his art collection smashed and looted, and his assets confiscated. He was reportedly beaten, denounced, humiliated by Red Guards, and made to work menial jobs as a janitor.

At the end of the Cultural Revolution, communist China was at a dead end — the economy was completely grounded. As a last resort to maintain Communist power, Deng Xiaoping "rehabilitated" Rong for Deng’s "open door" policy to attract foreign investments.

In 1979, at the Communist Party’s behest, Rong founded China International Trust & Investment Corporation (CITIC). Based in Beijing, 60 percent of the company was owned by the state and 40 percent was owned by Rong, according to some accounts.

Little known to the world, on July 1, 1985, Rong became a Communist Party member. At a time when membership in the Communist Party was no longer the requisite to survive, one cannot but wonder about the unspoken reason of his admittance in the Communist Party.

Under the auspice of the Communist Party, CITIC quickly grew into a global conglomerate with diverse holdings, from airlines, banks and property, to aluminum smelting factories and timber operations. Rong was instrumental in promoting a new open door image for the Party.

During the pro-democracy protests in Beijing’s Tiananmen Square in 1989, Rong issued an open letter calling on the Communist Party’s top leaders to work with the students.

In 1993, Rong was elected Vice President of China and retired in 1998. In 1999, Forbes magazine reported that Rong was the richest man in China, valuing his net worth at US$1 billion.

Some observers outside China dubbed him as the success of capitalism over communism. But there is little doubt: In China, Rong could not have been rich but for the need of the Communist Party. Few, if any, of those who surrendered their wealth together with Rong in the 1950s nationalization are to be found.

Steven Tian is a correspondent for Chinascope.

Ear acupuncture, also known as auricular acupuncture, is a method of treating a variety of physiological and psychological health problems by the stimulation of certain acupuncture points on the external ear. Similar to classical body acupuncture, ear acupuncture was discovered in China over 5,000 years ago and is still widely used as an effective therapeutic method in Chinese medicine today.

The auricle of the ear is an unique microcosm that can display complete information about the whole body. The human body’s twelve yin and yang channels on the hands and feet all reach the ear either directly or indirectly. In "The Chapter of Verbal Enquiries" in Ling Shu (Spiritual Junctures), it says, "In the ear, all of the energy channels are put together." In "The Chapter of Essays on Words of Gold and Truth" in Su Wen (Questions of Simplicity), it says, "Red from the south goes to the heart, opens on the ear, hides spirit in the heart." So, we can tell one’s congenital physique from one’s ear color, high or low position, thickness, flat or round shape, and firmness. We may even be able to tell the pathologies of many generations from the ear’s shape and appearance.

How do we judge the actual situation of the internal organs by observing the ear’s color, shape, or thickness? In "The Chapter of Organs" in Ling Shu, it says, "If the ear is black and small, the kidney is small. If the ear is thick, the kidney is big. If the ear is high, the kidney is high. If the back of the ear falls then the kidney is low. If the ear is firm, the kidney is firm. If the ear is thin the kidney is weak. If the kidney is small then it is safe and difficult to be injured. If it is firm, it does not get sick. If the kidney is big, it is empty and an empty kidney causes deafness or tinnitus."

The distribution of acupuncture points on the ear auricle is like an inverse embryo with the head down and the hip up. The various positions on the body have corresponding points on the ear. It is not surprising to see the pathological changes of any position in the body from the ear. For example, a slanting wrinkle on the earlobe can be seen on a person with coronary disease, a ring-like hollow around the ear auricle, called a plum pattern, can be found on a lung cancer patient’s ear, a person with schizophrenia has indentation on the pinna of the ear. Even loss of a tooth will show up on the ear.

People usually misunderstand that Chinese medicine is capable of only treating and curing chronic illnesses. Actually, other than emergencies such as amputations and surgical organ removal because of serious internal bleeding, Chinese medicine is actually the best choice for many urgent and acute illnesses. This is because, 80 percent of patients who visit emergency rooms are forced to go there because of suffering from symptoms that cannot be controlled. The pains or the symptoms of the illnesses are beyond their tolerance level, and they cannot wait for an appointment that might be two or three months down the line. The patients feel helpless and have to seek urgent help from the emergency services. Acupuncture can promptly treat, control, and cure many acute illnesses and take patients out of danger.
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It may be to one’s surprise that one of the major characteristics of ear acupuncture treatment is stopping pain with obvious curative effectiveness. In fact, using acupuncture treatment to treat acute diseases is not a new invention. It has a long history in China. Many such cases are documented extensively in ancient Chinese books. For example, Shi Ji: Bian Que Chronicles described how Bian Que, a famous Chinese doctor who lived during the Period of Warring States, used acupuncture to bring back a prince who had been pronounced dead for half a day. In the book Prescriptions for Emergency Cases written in the Eastern Ji Dynasty, Ge Hong described how to use acupuncture to bring people back from heart failure and other complicated, acute illnesses such as cholera. In the book Theories on the Root Causes of Various Diseases written in the Sui Dynasty, Chao Yuanfa wrote how to use acupuncture to treat stroke and other acute heart problems. In Essential Emergency Prescriptions, Sun Simiao of the Tang Dynasty wrote extensively on using acupuncture to treat acute diseases such as stroke, severe vomiting and diarrhea, urinary obstruction, uterine bleeding, lung problems, swollen midriff, snake bite, rabies, epilepsy, and other acute illnesses. He indicated that these treatments were highly successful in clinical applications.

In the 1980s and 1990s, China’s energy consumption elasticity averaged 0.4. That is, for every one percent of GDP growth, the energy consumption increased by 0.4 percent. Based on this number, the government made the assumption, in its long-term development strategy, that China’s energy consumption elasticity would reach 0.5 by the year 2020. However, China’s energy consumption growth in the past few years has far exceeded the economic growth rate. In fact, the energy consumption elasticity in 2003 and 2004 surged to 1.32 and 1.6, respectively. This demonstrates that China has entered the era of Heavy Manufacturing.

China’s Energy Consumption Structure Is Showing a Trend of Reversal

In the early 1990s, light industry and heavy industry products were virtually equal in terms of total industrial output. By the end of last year, the percentage of heavy industry products rose to 67.5 percent. That figure climbed to 69 percent in the first seven months of this year. Because the energy consumption in heavy industries is generally four times that of light industries, China’s transition into the stage of heavy manufacturing will inevitably lead to higher energy consumption, a common characteristic shared by industrialized nations when entering the same stage.

When industrialized nations enter the heavy-manufacturing stage, energy consumption is more dependent on oil and natural gas than on coal. Oil and natural gas, called clean energy resources, generate more heating value while producing less harmful gas. Thus, despite accelerated energy consumption, nations using clean energy resources cause significantly less environmental damage despite accelerated energy consumption.

However, the same shift in its energy consumption has not occurred during China’s industrialization. As a matter of fact, the percentage of oil consumption in relation to overall energy consumption decreased from 24.6 percent in 1999 to 22.7 percent in 2004. Despite the 15.7 percent of annual growth in crude oil imports since 2000, with a record 120 million metric tons imported last year, oil usage in relation to overall energy consumption dropped because of a slowing in the growth of domestic oil production. Is this reversal of the pattern of energy consumption temporary or is it an indication of a long-term trend? My answer is the latter, because two major factors limit China’s long-term shift to oil-based energy consumption.

The first factor is the unavailability of world energy resources. China is short of oil resources. It has been predicted that China’s maximum annual oil production is 200 million metric tons. Compared to China, the oil consumption per capita in many industrialized nations is far greater. In the United States, per capita oil consumption is 28 barrels. That number is 17 in Japan or Korea. In contrast, China’s per capita oil consumption is 1.7 barrels, one sixteenth of the United States, and one tenth of Japan or Korea.
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While the United States is the largest consumer of total energy, Japan and Korea boast that they have the most efficient energy users of all industrialized nations. By the standard of Japan and Korea, in 2030 when China accomplishes its industrialization, its annual oil consumption will amount to 3.6 billion metric tons, out of which 3.2 billion tons will have to be imported. World oil resources, however, are just not that abundant. Currently total annual oil production stands at 4.5 billion tons, out of which only 2.2 to 2.3 billion tons are tradable. Even taking the future growth of world oil production and trade into consideration, the world’s oil supply falls far short of the demand from China.

Japan and Korea, both lacking in oil resources, are forced to rely on world resources to accomplish their transition from a coal-based energy structure to an oil-based one. These two countries, with small populations, have fairly low levels of total oil demand despite high per capita oil imports. China, with its huge population, has such a high demand that it will be impossible to accomplish the energy structure shift by relying on world resources. In 2003, China’s imports of crude oil and oil products totaled 120 million tons, while that number surged to 150 million in 2004, 40 percent of the newly added trade volume for that year. Many people have even attributed the surge in oil prices to the increasing demand from China. Despite the rise in imports, the percentage of oil in relation to total energy consumption in China continues to drop. This phenomenon reflects how hard it is for China to rely on world resources to accomplish the transition of its energy consumption structure.

The second major factor lies in the ever more severe international conflicts caused by China’s enormous oil imports. This will be an increasingly serious constraint on China’s oil imports. As a matter of fact, developed nations own over two-thirds of the tradable oil in the world. In 2004, U.S. oil imports reached 640 million tons, while that number was 620 million tons for the European Union, and more than 200 million for Japan. When the growth in China’s oil imports exceeds the growth in the amount of international tradable oil that is already owned by the developed nations, it will certainly create pressure on those developed nations. China’s conflict with them will be inevitable. That is, when China’s demand for oil imports reaches a certain threshold, not only will economic feasibility be an issue, but political and military security issues will come into play as well.

Oil is a key factor in every country’s economy. Therefore it is a focal point of the economic, political, and military fights among large nations. Since 2001, the United States has launched military assaults in Afghanistan and Iraq. Recently it has been actively conducting "color revolution" [2] in some Central Asian nations. In addition, in the name of anti-piracy, it has established its military presence in the Malacca Strait. America’s military actions in the past few years center around the oil resources in the Middle East and Central Asia. If China’s oil demand relies too heavily on the imports from these regions, not only will its economic security be unpredictable, but its political independence will be challenged also. Thus, even if it were economically feasible to rely on overseas resources to accomplish China’s conversion of its energy consumption structure, it is politically unsafe.
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In conclusion, in the long run, China’s industrialization can hardly be achieved by completing an energy structural change similar to that of other developed nations. Because of its abundant coal resources compared to its oil resources, however, China will surely rely more heavily on coal in its future development. As a result, the continued increase in coal usage in China’s overall energy consumption and the drop in oil consumption will become a long-term trend in China.

China’s Environment in the Next 10 Years Will Continue to Deteriorate

If China’s energy structure becomes based on coal when it enters the heavy-industry era, it will surely face ever-mounting environmental problems. As of today, no country has ever accomplished its industrialization based on a coal-based energy structure. Presently, the discharge of harmful gases in China due to coal burning accounts for 65 to 90 percent of the total, exceeding 80 million metric tons annually.

Based on the growth rate of China’s energy consumption and the drop in its oil consumption since 2000, China’s total energy consumption is expected to reach nine billion metric tons of standard coal by 2020, with the weight of coal consumption surging to 75 percent, or the equivalent of 9.5 billion tons of raw coal. The harmful gases that this amount of coal will emit when burned, based on current environmental standards, will reach 400 million metric tons, a fivefold increase from its current level. Such a tremendous amount of harmful gases will be catastrophic.

Some people may ask: If entering the Heavy Manufacturing era is the root cause for the surging energy consumption and its resulting environmental disaster, can China bypass this stage? Because of the potential issues of resources and investments in Heavy Manufacturing, many people are debating whether China should take this route.

The reason is that at the current per-capita income level, many people have a demand for durable goods- including housing and automobiles-which has to be supported by heavy industry. Therefore whether China should develop its heavy industries is related to the question of whether the Chinese people should increase their demand for high-grade consumer goods. Evidently this is not a question for debate, but a question of Chinese people’s pursuit for a better life. Without this pursuit, what is the meaning of China’s modernization and development of social productive forces?

Some people use the example of Hong Kong and Singapore to demonstrate that domestic demand for heavy-industry products can be fulfilled through international exchanges. Unlike the issue of oil, for the economies of millions or even tens of millions of people, domestic demand for heavy-industrial products can indeed be satisfied by international allocation and exchange, so that the domestic economies can bypass the stage of Heavy Manufacturing. Nevertheless this is impossible for as large an economy as China’s, with such a huge population. It is equally impossible for China to bypass the stage for oil, steel, chemical, or mechanical industries. China’s modernization, therefore, must take the path of Heavy Manufacturing. The result is that its consumption of energy cannot be cut back.
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Still others argue that because China intends to construct an "energy efficient society," China can reduce the demand for energy by taking the path of a "cyclic economy." For example, using scrap steel will reduce energy consumption and the emission of harmful gases by over 90 percent. I have to remind the readers that a "cyclic economy" takes the approach of recycling and reusing the processed resources. To develop a large-scale cyclic economy, one must have a society in which a large amount of products have reached the end of their life cycle. This is the reason why there can be a cyclic economy in developed nations, while in developing countries this possibility is limited.

In modern China, over half of the steel is consumed in real estate, with 20 percent in mechanical industries, and only five percent in the auto industry. As of 2004, 60 percent of the total housing square footage in urban areas was built in the past five years, and 60 percent of the automobiles and machinery has been in use also for only five years. Assuming the average use cycle for housing is 50 years, and that of automobiles and machinery is 15 years, then in the next ten years, China will not have large quantities of used steel to recycle. The story will be the same for other colored metals and plastic. Thus, one cannot expect China to accomplish large-scale energy saving by developing its cyclic economy.

As China’s coal usage continues to accelerate, the country will easily reach the limit of its environmental tolerance in just a few years. If China cannot bypass the path of heavy and chemical industries and the world resources cannot support China to accomplish its shift from coal-based to oil-based energy structures, China’s industrialization must take a whole new path.

We often talk about how China should take "brand-new industrialization approaches." By this we mean that it needs to grow from extensive to intensive production. From the relationship between energy and environment, the word "new" should reflect how China should take a brand-new technological approach that has never been taken before by any country, namely, to accomplish its industrialization on the basis of new energy resources and new raw materials. China’s new industrialization should be not only new as compared to its past, but new to the whole world.

Since China’s developing industrialization is a brand-new process, the path of exploration will surely be full of difficulties, and the process will naturally take an extended period of time. Before it can successfully switch to the new industrialization approach, China must rely on traditional energies and raw materials for an extended period of time. As the burning of coal continues to weigh heavier in its overall energy consumption, China’s environment will further deteriorate. We must be able to foresee the future, and increase our investment in the protection of our environment. Only this way can we ensure that, in relying on coal, China’s economy can sustain its growth on the path of traditional industrialization.
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The Key to Building an Energy Efficient Economy Lies in Production, not in Consumption

The shortage of resources in China’s economic development raises urgency in China to develop an energy efficient society. To save energy, China must examine two aspects. One is production, and the other is consumption. In production, China must save resources. That is, it must focus on the efficient use of resources. China must also encourage consumers to reduce consumption. Out of these two aspects, which one should be emphasized in an energy efficient economy? Personally I believe the emphasis should be on production, not consumption.

From the perspective of consumption, it means encouraging a thrifty lifestyle, which is contrary to people’s desire for a better life. Japan has the most efficient use of national resources, and is a role model for an energy efficient economy. This does not contradict the fact that for every 1,000 Japanese people, there are 600 cars. Regardless, China must encourage its citizens to have a thrifty lifestyle and thrifty habits.

One might question, why not use economic measures such as taxation to constrain the demand for large housing and cars with powerful engines? As part of the pricing components, higher taxes for resource-intensive consumer products will certainly suppress the demand for such products. However, if the market pricing already reflects the degree of scarcity of the resources, consumers will naturally make rational decisions based on their income level and the price of the product. For example, as the gas price surges, many consumers are expected to give up their plans to purchase cars or to choose to buy less powerful cars. Therefore as long as the market pricing mechanism continues to be effective, the government does not have to interfere in order to suppress consumption.

There is another proposal to use taxation to raise resource prices in order to save the resources. Personally I disagree with such an idea. China’s own resources are not enough to help it achieve modernization. China has been more and more deeply involved in world resources and market ecosystems. As China’s demand for resources increases, the prices for the world’s resources will follow suit and increase. As a result, all nations that import resources from the international resource market will have to share the burden of rising prices, which makes China’s burden much lighter. If China unilaterally raises resource prices domestically, it is equivalent to automatically giving up the advantage of utilizing cheap world resources. By the same token, if demands for world resources from other countries like India increase, China will be forced to share the consequences of rising prices for these resource products. Therefore, as long as the resource prices accurately reflect the scarcity of the resources, China has no need to proactively raise its domestic prices.
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Currently, waste of resources in China’s production is widespread. The main reason for such waste is due to backward equipment and technologies and the small scale of its enterprises. In many manufacturing sectors, including steel, concrete, electricity, mechanical, and construction industries, the consumption of energy and raw materials per unit of product output far exceeds the average in developed nations. Therefore, there is tremendous potential for saving in these industries. Developing an energy efficient economy is not merely an issue of ideology, but more importantly, an issue of material basis. We must take legislative and economic means to force the elimination of some backward production equipment. By using financial subsidies, government-backed discounts for loans, and accelerated depreciation, we can encourage companies to quickly eliminate obsolete equipment and purchase more advanced equipment. In addition, we should strictly regulate the technological and scale levels that China should possess, and widely encourage economies of scale.

The Key to Efficient Production Lies in Incremental Efficiency

Production efficiency can be divided into two categories: incremental efficiency and stock efficiency. In its middle stage of industrialization, China has to consume a lot of new resources every year. Incremental efficiency is to improve efficiency in extracting and processing resources in order to raise the utilization rate of resources. Stock efficiency is to recycle and reuse the processed products, which is also called "cyclic economy."

Developing incremental efficiency and stock efficiency requires large investments from the government and society. With limited financial and social resources, emphasis needs to be selective. From the perspective of China’s industrialization, production efficiency in the next ten years should be focused on incremental efficiency. This is because the development of a cyclic economy requires the accumulation of a certain amount of products. Take steel as an example. Generally there are two criteria used in assessing the development of an industrialized country. One is steel production per capita. The other is the amount of steel stock per capita. Developed countries, after industrialization, own an average of 700 kilograms to one metric ton of steel production capacity per capita, with a per capita steel stock of 10 metric tons.

Once the per capita steel stock reaches 10 metric tons, the steel production capacity gradually retreats, because demand for consumer products is basically satisfied. Renovating products usually takes the form of replacing new for old. The obsolete and abandoned products, such as cars and buildings, often contain a large amount of metal. The recycling rate for abandoned metal products can often reach 80 percent, which provides ample room for the development of a cyclic economy. In the steel industry of developed countries, steel manufacture using electric stoves produces 80 percent of their total steel output because the raw materials in their stoves are comprised mainly of scrap metal. China as a developing country, however, has the per capita steel output of merely 200 kilograms, and steel stock of 1.5 metric tons per capita as of last year, because of its limited economic development. So far, steel manufacture using steel ores still makes up 85 percent of the steel output, while only 15 percent comes from scrap metal. Furthermore 60 percent of the scrap metal is actually imported from abroad.
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In summary, the emphasis of production efficiency should be on improving the utilization efficiency of incremental resources. As China’s economic scale is already very large, with its metal stock as high as that of Japan, there is still a lot of room to develop a cyclic economy. It is better to start right away, though.

The Most Critical Resources Are Land and Water

It is the non-tradable resources that are the ultimate bottleneck for China’s economic development.

Efficient production is to save the usage of various production elements. Because of the variations in different countries in the natural condition of various production elements, the usage density of the production elements varies as well. With international trading, the production elements that are scarce in one country can be obtained through trading with other countries. Nevertheless, some production elements, including land and water, cannot be obtained via trade. As a result, in economic development, the non-tradable resources are the ultimate bottleneck that cannot be overcome.

While China boasts vast land and abundant natural resources, because of its large population, its per capita land is less than 1,000 square meters (1,196 square yards). Industrialization must then rely on farmlands. It is even more urgent and important to save the use of land than the use of any other tradable resource. Saving the land is also the most important approach in maximizing wealth output with the least input of production elements. As is demonstrated by many developed nations, two-thirds of the wealth in a nation is in the form of real estate. Food will disappear after it is consumed; clothing is tossed when it is worn out; cars are just durable goods that also depreciate. Real estate is the major form of wealth that can be preserved.

As land is very scarce in China, without improving the efficiency of land usage, China will go astray on the path of an increase-without-development economy. For instance, the plot ratio (or floor area ratio) among China’s recently constructed buildings is very low. China’s gross plot ratio (the ratio of building floor area versus the building area) averages at 0.5. Even in crowded Shanghai, that number is less than 0.8, compared to 2 in Tokyo, 1.6 in Hong Kong, and 1.2 in Taipei. Even in the Zhuhai Triangle and the Yangtze Triangle where land resources are extremely scarce, buildings with five or six floors are common in the downtown areas.

Recently, I visited a city in Zhejiang Province. I learned that all land development plans thereh had reached the limit of the city’s capacity. Nevertheless, most newly constructed homes are buildings with six or so floors. This year the land use in Zhejiang Province approved by the central government is merely 230,000 Mu (37,950 acres), with 40 percent of it reserved for projects by the central government. The allotment of land usage for each city averages 20-30 Mu (3.3-4.95 acres), while the allotment for each county is less than 1,000 Mu (165 acres). This has resulted in a dramatic decrease of investment growth in Zhejiang Province.
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Other provinces, including Fujian, Guangdong, and Shanghai, are facing the same problem. As a result, it is said that China’s economic growth has been experiencing regional changes, showing the "Cold" East and "Hot" West phenomenon.

To find new room for growth in the East, builders have to raise the floor area ratio of already used lands, that is, by demolishing old buildings and building new ones. In the past five years, China has witnessed an increase in demolition. On the average, demolition accounts for 20 percent of all building area. Based on my rough estimate, assuming that the value of the demolished buildings is half of the new ones, the loss of real estate values as a result of demolition in recent years totals 50 to 60 billion yuan (US$6.25-7.5 billion) on an annual basis. So far, the demolished buildings are mostly old and used ones. If the lack of land forces the builders to demolish many relatively new buildings in urban areas, the wealth loss will be even greater, leading to the state of increase without development.

The shortage of water is also a serious issue. Despite the lack of water resources in China’s North, many northern regions have invested a lot in the so-called "pillar industries" which have a high water consumption, including steel, chemical, and building materials industries. When the water resources can no longer sustain the growing demand, production cannot be carried out normally and investments are wasted, even with the new technologies that save energy and mineral resources.

Under China’s special situation, turning China into a nation with the most efficient utilization of land and water resources in the world is the most important task in developing China’s efficient economy.

Footnotes:
1. The article was combined from two articles originally published in the 25th and 27th issues of "Internal Reference for Reform."
2. See Wikepedia at http://en.wikipedia.org/wiki/Color_Revolution: Color revolutions or Flower revolutions are the names given collectively to a series of related movements that developed in post-communist societies in Central and Eastern Europe and are possibly spreading elsewhere including some places in the middle east. Their participants use mostly nonviolent revolutionary change to protest against governments seen as entrenched and authoritarian, and to advocate democracy, liberalism, and national independence. They usually also adopt a specific color or flower as their symbol, and the protests are notable for the important role of NGOs and particularly student activist organizations in organizing creative nonviolent resistance.

Wang Jian is the Vice Secretary-General at the Chinese Macroeconomic Research Society.

There is a saying: "If you are confident that you know the Heavenly Empire, it means you don’t know it." Chinese politics has baffled generations of China scholars. The October 8-11 recently concluded Fifth Plenary Session (Plenum) of the 16th Central Committee of the Chinese Communist Party (CCP) was a typical one.

Speculations over the Plenum results have kept China analysts busy. Many think that the CCP leader, Hu Jintao, who became both the Party boss and the military chief last year, would use the meeting to consolidate his power base. Yet the critical motions proposed by Hu Jintao all suffered setbacks at the meeting. There was no sign of political reform, as many had hoped. Some committee members raised critical issues that challenged the validity of the political system. The concluding communiqué issued after the Plenum was nothing but unbridled propaganda concerning the 11th Five-Year Plan (2006-2010). There was not a single word on the shuffle of the top apparatus as many analysts had anticipated. This casts serious doubts on the boasted success of the Plenum.

During the Plenum, in contrast to the intrigue of closed-door elite politics, local CCP organizations arrested thousands of people who had come to appeal their grievances to the CCP leadership in Beijing. Mobs directed by CCP local authorities brutally beat a representative of the National People’s Congress in the remote southern village of Taishi in Guangdong Province. Although such suppression has been common occurrence in recent years, having them conspicuously exposed to the world press during the CCP Plenum cast a satirical glow on the fanfare of the Plenum theme "A Harmonious Society" and signified the overall ineffectiveness of the CCP rule.

Toppled Arrangements

It has been a CCP tradition to use the Central Committee meetings to make key personnel shifts. Deng Xiaoping twice used the fifth plenary sessions (in 1980 and 1985) to arrange for his henchmen to take up important positions.

This Fifth Plenary Session was the first Central Committee meeting since Hu Jintao became the real CCP boss, that is, being both the General Secretary and the President of the Military Commission of the CCP Central Committee. Many believed that Hu would place his trusted followers in Shanghai and Beijing, the two power centers. Early this year, Hu tried to replace Chen Liangyu, the CCP chief in Shanghai who has close ties to Jiang Zemin, with Liu Yandong, a protégé of Hu. Liu, however, declined the offer. It was rumored that Hu would try it again in the Fifth Plenary Session. In addition, Li Keqiang, the CCP chief in Liaoning Province, was rumored to be up for a new key post. The post-Plenum communiqué, however, revealed no such change. Hu’s failure to arrange for key posts indicated that Hu might have suffered setbacks in the meeting.
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Another signal of the failed meeting was that all five major motions put forward by the Political Bureau of the CCP did not get onto the agenda. Those motions were all of the "Sunshine Bill" type. The bills would have required: (1) All top-level CCP officials and their family members to reveal their revenue sources; (2) All top-level CCP officials to reveal to the departments or provinces of which they are in charge the employment and education of their family members; (3) All top-level CCP officials to encourage their sons and daughters to go to work in remote areas; (4) That the CCP General Secretary at the provincial level not serve more than one term both as the CCP Secretary as well as Governor; (5) All top-level CCP officials and CCP-controlled government organizations itemize their public relations expenditures.

This suggests a powerful force against any political change within the Party. By shelving those motions, this behind-the-scenes force successfully challenged Hu Jintao’s newly established authority.

It is ironic that the CCP, a political party that has done so much economic engineering, has failed with all its political motions. In fact it would be much appreciated if the CCP would indeed focus on taking care of its affairs by formulating a five-year political agenda to rectify itself, leaving the economics to functional departments and the private sector.

The meeting also failed to exert its authority and discipline by successfully appointing the coordinators of panel groups. The Fifth Plenary Session was divided into eight discussion panels: the CCP Central Committee and Departments of the State Council, the People’s Liberation Army (PLA), the Northeast group, the North group, the Northwest group, the Southwest group, the South group, and the East group. Of the eight panels, except for the Northwest and the PLA groups, the other six panels did not accept the coordinators the CCP Political Bureau originally appointed. Based on that fact, Hu Jintao had to admit a lack of centralized CCP authority.

The weakening of centralized CCP authority may be beyond the study of factional politics. The communiqué of the Fifth Plenary Session revealed nothing about the factional struggle. The CCP leadership deliberately left the Chinese public ill-informed about the instability within its top leadership, since leakage of a failed CCP authority could be exceedingly dangerous and lead to unexpected results for the entire CCP political system. Therefore, it became a tacit imperative for the CCP leadership to uphold a superficial consensus, for which Hu developed the official title "A Harmonious Society."
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A Hollow Blueprint

A high-level CCP conference is usually a two-sided enterprise: There is a polished façade, and then there is the dirty backyard. The façade is for public relations work and entails discussions of long-term plans. The backyard is where the "dirty linen" gets hung out, typically involving the shuffling of personnel and the reallocating of seats, both of which reflect the results of muddy power struggles. For the façade, the CCP uses its propagandized media to make it center stage. As for the "dirty linen," the CCP tries to conceal it as much as possible.

The only agenda the Plenum released to the public was the 11th Five-Year Plan (FYP). After taking over power from Jiang Zemin at the 16th CCP Congress in late 2002, General Secretary Hu Jintao and Premier Wen Jiabao sought to distinguish themselves from Jiang by hoisting the banner of a "Putting-People-First Leadership." The new 11th FYP crystallized their close-to-the-people approach by laying out a grandiose roadmap for the country’s "scientific development."

In this 17,000-word document, the new plan pretends to take into consideration the welfare of disadvantaged groups, the uneven development between China’s East and the West, as well as environmental concerns. The CCP proclaimed that the newly approved 11th FYP signified a transition from a "government-oriented" economy to a "market-oriented" economy and thereby merited the new title "Five Year Blueprint" (FYB).

However, an in-depth analysis shows that, by every measure, the new 11th FYB is nothing but another grandiose illusion to woo the general public.

First, the use of the FYP has failed repeatedly. The CCP imported the idea from the Soviet Communist Party. From 1953 to 2005 the CCP has executed 10 FYPs, with an interruption of three years (1958-1960) due to the failure of the Great Leap Forward. The 10 FYPs have not helped China catch up with the developed world, which has instead watched as the gap has widened. Let’s compare China with three other entities-Taiwan, Hong Kong, and Macao-that all share the same Chinese cultural tradition. In 1949 when the CCP took power, the four were economically at the same level. After more than 50 years, the per capita GDP for communist China is only US$1,200. The per capita GDP for the other three non-communist Chinese entities is Taiwan US$13,000 and Hong Kong and Macao each over US$20,000.

Russia stopped the failing FYP practice 14 years ago. The CCP did not. One has to wonder why a superficial term change from "FYP" to "FYB" would prevent the history of failure from repeating itself.
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Secondly, the new FYB cannot ensure that it can close the gap between the rich and the poor. In recent years, this gap has widened to an unprecedented extent. According to an official Chinese estimate, China’s Gini coefficient has reached 0.47, among the top Gini scores in the world. International analysts have graded China’s Gini even higher at 0.54 (varying from zero to one with the higher number closer to socio-economic inequality).

Such a gap and the resulting dissatisfaction resulting from a sense of relative deprivation have given rise to massive riots in Chinese society. Reduction of this gap of inequality requires improvement in a social security system, which in turn requires allocating more money. However, the fundamental cause of the inequality was the notorious corruption by CCP officials that drained the money generated by the "GDP miracle." The annual cost of CCP officials’ corruption has been as high as close to 20 percent of the annual GDP. The money annually smuggled out of China, mostly by family members of high-level CCP officials, has already exceeded the annual influx of foreign investment.

The 11th FYB may help the CCP leadership to achieve high GDP rates. Yet, with the mechanism for corruption unchanged, an ever-larger pool of money will continue to flow into CCP officials’ pockets at the expense of the socially disadvantaged and the social security system. In a CCP-controlled game where both the referee and the player are on the same side, how can the socially disadvantaged and a weak social security system compete with the candid conspiracy of a CCP leadership "referee" and "players" composed of the vast majority of greedy CCP officials?

Thirdly, the 11th FYB failed to lay out the details of how to promote social equality among a total of 900 million rural inhabitants. The blueprint included at least five subsections detailing rural policies. The CCP seized national power largely due to the support of peasants. Since the communist regime came into power, however, it has never given peasants land as promised. "Rural collectives" rather than individual peasants own land in the countryside, as stipulated by law. The local CCP officials have been using this murky ownership situation to sell land-use rights to urban developers, in which members of the "Iron Triangle"— the CCP government officials, bankers (appointed CCP officials) and developers — share the booty. To the victor go the spoils! The peasants are the helpless victims. The new blueprint did not address this core issue at all.

While the new FYB promised to help implement democratic management in the rural areas, there were few details on how to realize this rosy promise. In fact, the local CCP officials in townships and villages are powerfully opposed to those policies. Peasants call those CCP officials "bandits" to allude to roving rebel bands led by the CCP guerrilla forces during the years of "revolution." Those officials are beneficiaries of the CCP rule and have developed various formal and informal taxes to exploit the peasants. They have every vested interest in fending off rural democracy to protect their autocratic kingdoms. It would be impossible to carry out the proposed policies without eradicating the entire CCP apparatus at the local level.
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This points to a core irony: Is it possible for the top CCP leadership to remove its local power base to consolidate the central power? The answer, as evidenced by an incident that occurred in the middle of the Fifth Plenary Session, is "No." On October 9, a delegate to the local People’s Congress was brutally beaten while trying to investigate an election in the village of Taishi. A reporter from the U.K.-based newspaper The Guardian and an interpreter accompanied the delegate. The purpose of the organized brutality was to threaten the villagers of Taishi, who had tried to oust their corrupt chief and elect their own local leaders. The incident was just one of a million such incidents in villages all over China. That the Plenum tolerates such persecution makes a mockery of its proposal for rural democracy.

In sum, without transforming the norms of the totalitarian CCP, it is highly doubtful that mere terminology modification in the new "FYB" will lead to a market-driven socio-economic boost to drastically reduce long-existing social inequalities. In light of the elite power struggle, the new FYB is just another political tactic to attack by innuendo the previous "GDP worship" of Jiang’s developmental model.

Dong Li holds a Ph.D. in Political Science from Columbia University. He is a China specialist who provides news analysis for New Tang Dynasty Television based in New York City.