Chinascope – Page 461

Peking University Economist Criticizes the “China Model”

On October 23, Zhang Weiying, a professor at Peking University, who is also regarded as a liberal scholar, published an article entitled “Understanding the World and the Chinese Economy” on the official website of the National Development Research Institute of Peking University. The article criticized the touted theory of the “China Model,” which believes that China’s 40-year economic rise has benefited from the unique “China model,” namely, a strong government, a large body of state-owned enterprises, and a smart industrial policy.

Citing the marketization data from the Beijing National Economic Research Institute and the economic growth data from the China Statistical Yearbook, Zhang points out that the changes in the marketization index are always positively correlated to the growth rate of the gross national product. Statistics such as the proportion of the urban state versus the private sector employment, the proportion of state-owned versus foreign and private capital, and their relationship to the per capita GDP growth rate, show that the larger the state sector, the slower the economic growth rate. Regions where “the state retreats while the private advances” show better growth performance.

Zhang concluded that China’s rapid economic growth over the past 40 years has come from marketization and the opportunities offered by the second-mover advantage rather than the so-called “China model.” Second-mover advantage refers to the advantage a nation receives from following others or mimicking an existing model.

Zhang warned that if one blindly uses the “China model” to explain China’s economic development one will “mislead oneself and destroy one’s own future. Moving toward a bigger state sector, expanding the government’s power, and relying on industrial policies will led to the reversal of the reform process, waste all previous efforts, and lead the economy into stagnation.

Externally, the “China model” has set China apart from the common sense market economy that the West has acclaimed, and has led to conflicts between China and the West. According to Zhang the unfriendly international environment China is currently facing is not unrelated to some economists’ misinterpretations of China’s achievements over the past 40 years.

Source: Radio France International, October 25, 2018
http://rfi.my/3FzJ.T

Briefings | | October 28, 2018 | Economy/Resources

Xi Furthers Anti-Corruption Purge in the Military

Media report outlets inside and outside of China suggest that the Chinese military may be going through another “anti-corruption” purge. Sources say 120 military officers are being “investigated.”

On August 1, which is the People’s Liberation Army (PLA) Day, a time when a few military officers are usually promoted to the rank of full general, Xi broke the tradition and did not make any announcement. It was also the first time since Xi became the commander-in-chief of the PLA in 2012 that he did not name any generals. China’s official media kept silent on this and the military officials issued no response of confirmation or clarification.

In one of Xi Jinping’s talks on Aug 9 regarding the military, Xi emphasized “absolute loyalty” from the PLA and the importance of “centralized leadership.” He also talked about the issue of corruption in the PLA.

On Oct 16, the Beijing authority officially announced the “investigation results” of two more military “tigers,” — Fang Fenghui and Zhang Yang. These two former generals have since been expelled from the Communist Party and the Chinese military and their ranks of general have been removed.

Zhang, who once served as Director of the PLA’s Political Work Department, committed suicide last Nov. Fang, former Chief of the Joint Staff and a member of the Central Military Commission, is now facing formal charges in court. The “investigation results” said they were “disloyal, dishonest and had been acting two-faced.” A number of media sources pointed out that more military officials might be involved in this current purge — many of the next targets may be those who have ties with those “big tigers” who have already been purged.

Source: Radio France International, October 24, 2018
http://rfi.my/3Fs3.T

Briefings | | October 28, 2018 | Defense/Military

Government Expert Assesses the Worst Impact of Trade War on China

On October 23, Wang Yiming, the deputy director of China’s Development Research Center of the State Council, the government think tank for policy research and consulting, met with business investors. Wang told them that the impact of the Sino – US trade war is evolving from a psychological expectation to the real economy. In particular, it is affecting trade, investments, the supply chain, and employment. In the future, once the U.S. imposes the 25 percent tariff on all Chinese exports, China’s GDP growth rate will fall by 1.5 percentage points. He predicts that this will be the worst case scenario of the trade war.

Wang Yiming said that 15 manufacturing sectors will be affected greatly and negative growth will occur. The sector that will receive the most severe hit will be that of radio, television equipment, and radar facilities. This sector is expected to fall by 7.8 percentage points.

According to Wang, some enterprises have already taken the upcoming tariff factors into consideration, especially those whose production is oriented toward exporting to the U.S. Some are even considering the cancellation of new investment plans or a delay in hiring. On the technical level, Sino – US cooperation in science and technology and personnel exchanges face growing restrictions.

Source: Radio France International, October 25, 2018
http://rfi.my/3FzJ.T

Briefings | | October 28, 2018 | Economy/Resources

Le Figaro: French Intelligence Raised Alert about China’s Systematic Espionage

Taiwan Central News Agency carried an article that Le Figaro, the French daily newspaper, had originally published. The article reported that, in recent years, Chinese intelligence agents have widely used professional social websites to explore secrets and to penetrate into the administrative departments, power circles, and large companies in France. Such actions have generated a major threat to national sovereignty for France and put French economic assets at risk.

In the exclusive report that Le Figaro published, it stated that the French Directorate-General for External Security and the Directorate-General for Internal Security have gathered enough evidence to conclude that Chinese intelligence agents have used fake identities and created accounts on business and social websites such as LinkedIn or the Viadeo Group to contact at least 4,000 managers in French government agencies or their employees or some strategic corporate partners. There are about 500 such accounts on LinkedIn. A total of 200,000 Chinese intelligence agents who the Ministry of State Security manages are involved in this project. The online profiles of these Chinese agents show that they often appear to be young, funny, talented, hold a degree from a top university in China, carry a fancy title and work for companies that have over one thousand followers on social media. These agents generally start with warm greetings and complements to their target and extend an invitation for them to come to China for business seminars. Once the agents gather enough evidence such as private photos and financial transaction records, they then use these as a bargaining chip to force the target to work for the Ministry of State Security.

Other than using the online social media to look for their targets, Le Figaro reported that these Chinese spies also find Chinese students or visiting scholars in France to steal or make copies of their research secrets.

Source: Central News Agency, October 23, 2018
https://www.cna.com.tw/news/aopl/201810230355.aspx

Briefings | | October 24, 2018 | Geo-Strategic Trend

China Said to Export Large Amount of Luxury Goods to North Korea

The United Nations imposed sanctions against North Korea’s nuclear and missile programs and called on all member states to implement it strictly so as to exert “maximum pressure” on Pyongyang and push the economically distressed North Korea back to the negotiating table. However, there are signs that, since North Korea stopped missile and nuclear tests and Kim Jong-un promised to go nuclear-free at the US-DPRK summit in June this year, sanctions have begun to lose power. At the same time, Russia and China are also calling for relaxation of sanctions against North Korea.

Yoon Sang-hyun, a South Korean opposition party lawmaker, pointed out that “Kim Jong-un has been purchasing luxury goods from China and other places, including a seaplane, high-end musical instruments, high-end TVs, cars, brand name liquors, luxury watches and other gifts, not only for his own family, but also as gifts for the elite inside the government.”

Yoon added that with the expansion of the loopholes, Kim Jong-un will soon be able to achieve the purpose of weakening and offsetting sanctions gradually without giving up nuclear weapons. The opposition law maker said that last year, North Korea imported $640 million worth of luxury goods from China.

China does not publish detailed classified data on customs imports and exports. The number that Yoon quoted is based on a list of embargoed goods from the Korean government.

Yoon pointed out that, compared with the peak level of $800 million in imports in 2014, the scale of North Korean imports of luxury goods from China has shrunk, but compared with the $666 million from 2016, it was a decline of only 3.8 percent. In addition, luxury goods accounted for 17.8 percent of the total value of North Korea’s imports from China ($3.7 billion) last year. Among all imported luxury goods, high-end TVs and other electronic appliances accounted for more than half or about $340 million, followed by cars ($204 million) and liquor ($35 million).

According to figures that China’s General Administration of Customs released last month, China’s January through August trade with North Korea fell by 57.8 percent year-on-year to $1.51 billion.

The figures that Yoon quoted also show that, since Kim Jong-un came to power at the end of 2011, the amount of money that North Korea spent on imported luxury goods from China has increased to $4 billion.

Source: Deutsche Welle Chinese, October 23, 2018
https://p.dw.com/p/36xRW

Briefings | | October 24, 2018 | Geo-Strategic Trend

Global Times: Trump Quitting UPU Because of Jealousy

Global Times recently reported that, after quitting the Paris Climate Agreement and UNESCO, along with many other organizations and agreements, U.S. President Trump once again decided to continue down this path. Now it is the turn of the Universal Postal Union (UPU). It appears that Trump could not live with the fact that, under UPU rates, China can enjoy a lower shipping rate when sending packages to the United States. UPU coordinates international postal shipping costs with a fair balance between industrialized countries and developing countries. The balance was to improve the economic development in Asia and Africa. Apparently, Trump’s Director of the Office of Trade and Manufacturing Policy, Peter Navarro, believes quitting UPU is one of the convenient methods to defeat China and to challenge the “status quo.” Chinese experts expressed their belief that Trump’s new move is not going to fundamentally change the fact that China produces affordable products, and the true victims will be the American consumers. {Editor’s note: The U.S. Postal Service loses money due to UPU lower rates for developing countries.}

Sources:
1. Global Times, October 18, 2018
http://world.huanqiu.com/exclusive/2018-10/13290946.html
2. CNN, October 17, 2018,
https://www.cnn.com/2018/10/17/business/postal-treaty-withdrawal/index.html

Briefings | | October 23, 2018 | US-China Relations

Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized

Xinhua Commentaries: “Exposing the Three Major Political Deficits of the U.S.”

The CCP’s Performing Arts Troupes in the U.S.