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The Economic Observer: Moody’s Downgraded China’s Bank of Communications

Well-known Chinese national weekly newspaper The Economic Observer recently reported that Moody’s has just downgraded the baseline credit assessments of China’s Bank of Communications (BOCOM) from Baa3 to Ba1, which is often known as the “garbage level.” BOCOM was founded in 1908 (Qing Dynasty) and is currently the fifth largest bank in China, with 3,285 domestic outlets and 20 international branches. BOCOM’s total asset value (2016) was around US$1,296.5 billion. Moody’s cited BOCOM’s poor financing capabilities and higher-than-average financing costs, as well as a declining number of savings accounts, as the reason for the downgrade. A few other performance indicators also showed that the bank is facing much higher market risks. BOCOM responded immediately by suggesting that Moody’s focused too much on very few indicators and the downgraded rating was biased. It is worth noting that BOCOM’s rating for its long-term outlook remains at A3.

Source: The Economic Observer, September 8, 2017
http://www.eeo.com.cn/2017/0908/312397.shtmli

Xinhua: China Tightening Regulation of TV Series

Xinhua recently reported that SAPPRFT (the State Administration of Press, Publication, Radio, Film and Television), NDRC (the National Development and Reform Commission), the Ministry of Finance, the Ministry of Commerce and the Ministry of Human Resources and Social Security jointly issued new policies on regulating the industry of TV series to ensure the “healthy improvement” of the socialist entertainment market. The government is compiling a list of TV series to be produced to praise the Communist Party, the motherland, the people, and the nation’s heroes. The TV series are required to promote “socialist values” and the regulations focus on prime-time TV programming. The TV series investment structure will be regulated as well to eliminate celebrity-based pricing. Central Television and provincial TV stations as well as satellite stations must devote a certain percentage of broadcast time investments to titles covering the “revolution history,” rural villages and minorities, or military topics. TV ratings companies will be required to have special licenses and the ratings cannot carry too heavy a weight on title pricing or evaluation of personnel. Online video series are regulated in the same way as TV series and online video series cannot air without SAPPRFT permits. All levels of the government are required to firmly deploy and support the new policies. The work will be audited.

Source: Xinhua, September 4, 2017
http://news.xinhuanet.com/politics/2017-09/04/c_1121597445.htm

Central Military Commission Completed Military Restructure and Inspection Tour

Xinhua recently published an article about the restructuring of the Chinese military, following the directives that Xi Jinping issued. After eight months of consolidation, restructuring, and inspection work, the Central Military Commission has completed both the restructuring of the military and an inspection tour. The article stated that the military inspection team visited military sites, universities, and the armed police force. The focus of the inspection work was to determine whether the military follows the rules and political orders; whether they are loyal, whether they have the ability to execute orders, and whether the party organization and the members are performing their roles in the military.

Source: Xinhua, September 10, 2017
http://news.xinhuanet.com/politics/2017-09/10/c_1121639092.htm

Chinese Consulate Prevented Passage of California State Resolution

According to news reports that Radio Free Asia and the Voice of America published, the voting on a California Senate resolution was cancelled and withdrawn after the members of the Senate received a letter from the Chinese consulate in San Francisco. According to the reports, SJR10 is a joint Senate resolution that Senator Joel Anderson introduced. It praises Falun Dafa adherents for their peaceful resistance to the persecution and torture over the past 18 years. The resolution also expresses support for U.S. Congressional Resolution 343, passed in 2016, which condemns the Chinese government for conducting live organ harvesting on Falun Dafa adherents in China. SJR10 passed unanimously in the California State Senate judiciary committee on August 30 and was expected to be up for a vote on the Senate floor on September 1. On that day, the members received an email from the Chinese consulate in San Francisco. The email denied the harvesting of Falun Dafa adherents organs in China and stated that the resolution would “seriously damage the relationship between China and California in the economy, trade, tourism and in other areas.” The news report quoted comments from Senator Anderson who said he was shocked that the Chinese consulate was able to have such a huge influence on a California State resolution and that the California state Senate has never failed to pass a resolution that condemns genocide in the past. A representative from the Falun Dafa organization in California said at a rally that while Falun Dafa adherents in China have lost the freedom to exercise their rights, the persecution of Falun Dafa has now extended overseas and that countless people are being deceived by the lies that the Chinese authorities spread.

Source:
Radio Free Asia, September 9, 2017
http://www.rfa.org/mandarin/yataibaodao/shehui/ck-09092017135725.html
Voice of America, September 8, 2017
https://www.voachinese.com/a/voanews-20170908-cali-senator-falungong/4020437.html

Three Percent of College Graduates Had to Start Their Own Business Due to Poor Job Market

According to a report that Radio Free Asia (RFA) published, new statistics from the Ministry of Education showed that, after graduation, three percent of college graduates in China start their own businesses. The rate is twice what it is in developed countries. The most likely conclusion is that these college graduates were forced to start their own businesses because of the lack of job opportunities. One economics professor in Beijing told RFA that the struggles that private companies have directly impact the job market for college graduates. Most of these college graduates have been forced to start their own businesses because they can’t find jobs. The Chinese economy has slowed down in recent years. Many private businesses face the challenge of high tax rates and the difficulty of getting a loan from state owned banks. Some of them have chosen to borrow money at a high interest rate and have ended up in a capital chain rupture.  The Ministry of Human Resources and Social Security found that over half of the businesses that college graduates started failed within three years.

Source: Radio Free Asia, September 8, 2017
http://www.rfa.org/mandarin/yataibaodao/kejiaowen/hc-09082017111255.html

Haiwainet.cn: What Does Australia Want to Do with the Largest Military Exercise Encircling China in 30 Years?

Haiwainet.cn (the official website for People’s Daily overseas edition) published a commentary article on the recent military exercises of the Australian Navy’s “Indo-Pacific Endeavour 2017.” Below is an excerpt from the article:

According to an Australian Defense Magazine report, the Australian Navy will be conducting military exercises, starting on September 4, in the Indian Ocean and in the Pacific with the code-name, “Indo-Pacific Endeavour 2017.” During the three months of military exercises, the Australian Army fleet will also visit a number of countries including Japan, Korea, the Philippines, Brunei, Thailand, Malaysia, Singapore, Cambodia, and Indonesia. Excluding Vietnam, the Australian Army fleet will visit almost all countries across the South China Sea and the East China Sea that surround China. What does it mean that Australia’s military exercise route is “encircling” China?

Gao Cheng, a researcher at the Asia-Pacific and Global Strategy Institute of the Chinese Academy of Social Sciences mentioned in an interview with Naihai.com that Australia wants to conduct this exercise in order to please the United States and to take this opportunity to consolidate the alliance between the two countries. We can also regard it as Australia’s position toward the United States. In fact, with the recent increase in the amount of attention Australia’s Navy is receiving, the Australian Army is holding a large number of joint exercises with the United States and Japan each year to enhance Australia’s international influence. We also observed that Australia, as a foreign country, is often very active in commenting on South China Sea issues.

Recently,  (China’s) domestic media created a cartoon ridiculing Australia: Australia is depicted as a loudspeaker that a United States radio station set up in the Asia-Pacific. It works very hard and is very proud, but it is becoming more and more like noise in the area. Gao Cheng agreed with this symbolism. He further pointed out that Australia belongs to the “first echelon” in the Asia-Pacific region in its support for the United States. It often acts as the “assistant police” for the United States in the region. However, it also “swings” politically. The honeymoon period with China from the beginning of 2017 fully explains this point. The United States is Australia’s most important ally. China is Australia’s most important trading partner. Australia faces a tough problem trying to balance between these two, but time has proven that, as a “hardcore” ally of the U.S., it is difficult for Australia to get rid of the United States’ political influence.

Gao Cheng said that although it “swings,” Australia’s “pro-U.S.” stance is consistent. Australia boasts, as a “mid-level power,” that it likes to seek dominance in the South Pacific. However, it is impossible to achieve this goal using its own capacity for technology. It needs the support of its U.S. ally. At the same time, Australia regards America as its most trusted ally in security.

Source: haiwainet.cn (People’s Daily), September 7, 2017
http://nanhai.haiwainet.cn/n/2017/0907/c3542184-31106801.html

Beijing Enforces Real-Name Registration on the Internet

According to new rules that the Cyberspace Administration of China (CAC), the country’s highest Internet regulator, recently announced, starting on October 1, 2017, only users who have provided their identity information will be able to post online content or comments on the Internet. Radio France Internationale (RFI) reported on August 26 that the new rules aim to prevent the spread of views the state bans or which the law prohibits, that the circulation of such information has to be stopped immediately, and that measures must be taken for its removal.

The CAC website explicitly required that website operators will have to review comments on news stories before they can appear online. At the top of the CAC’s list of harmful information are: endangering national security, revealing state secrets, subverting state power, damaging national honor and interests, undermining national unity, spreading rumors or disrupting the social order.

On August 29, China’s state media Global Times published an article to defend the above provision. The article said, “Without real name authentication, one cannot function on the Internet.” The article also claimed that the vast majority of the people had widely accepted real name certification.

An analysis published at a Shanghai-based news and finance web portal, jiemian.com, expressed the expectation that online promotional activities will be curtailed. In recent years, online public relations companies have hired paid commentators to promote products. Some well-connected public relations companies even offer services to remove web pages that contain negative consumer reviews. CAC’s new regulation prevents commercial operations from generating massive favorable comments or from selectively removing unfavorable comments.

Sources:
1. jiemian.com, August 31, 2017
http://www.jiemian.com/article/1591415.html
2. Radio France Internationale, August 26, 2017
http://cn.rfi.fr/中国/20170826-大陆网民发表意见十月开始需用实名
3. http://opinion.huanqiu.com/editorial/2017-08/11188623.html
4. Cyberspace Administration of China website, August 25, 2017
http://www.cac.gov.cn/2017-08/25/c_1121541844.htm

Global Times: How Should China Respond to North Korea’s New Nuclear Test?

Following North Korea’s latest nuclear test, China’s state media Global Times published an editorial to state China’s stance. Soon after, the article was withdrawn from its website, but it is still available on the website of Sina, which republished the article. Below is an excerpt from the article:

North Korea’s latest nuclear test explosions and a recent series of long-range missile tests show that Pyongyang does not yield to any pressure, soft or hard. It is determined to obtain long-range nuclear strike capability and will not yield to any external pressure. North Korea nuclear issue is almost a dead knot (unresolvable).

Faced with this complex situation, China has to maintain a high degree of calm, take measures from China’s national interests, and minimize the risks that Chinese society faces. The safety of northeast China is of number one importance. We need to make it clear to Pyongyang through a variety of channels that its nuclear tests cannot pollute the northeast of China. China’s strategic security and environmental security are the bottom line in China’s exercise of restraint.

North Korea’s latest nuclear campaign will inevitably lead to a discussion in the UN Security on imposing new sanctions. Intensified sanctions will be inevitable. However, we believe that, despite the fact that Chinese society is very upset about the DPRK’s new nuclear test, we still want to avoid impulsive action. China should not easily agree to extreme sanctions such as one similar to the embargo against North Korea.

Once China has completely cut off the supply of oil to North Korea, or even shut down the border between China and North Korea, it is still uncertain whether it can prevent North Korea’s nuclear activities. The DPRK’s comprehensive and open opposition to China will likely happen. In that way, over a period of time, the contradiction between China and the DPRK will at least become the most prominent contradiction surrounding the Korean Peninsula. The opposition between China and the DPRK will overwhelm the contradiction between the U.S. and North Korea and take most of the energy of the highly tense situation. Washington and Seoul will then achieve the purpose of “outsourcing” North Korea’s nuclear problem to China. That is completely inconsistent with China’s national interests.

Therefore, as long as the DPRK nuclear activities do not pollute China’s northeast, China should avoid the radical attitude of the United States and South Korea in issuing sanctions against North Korea.

China is a big country. China’s agenda and interests are global. The issue of the Korean peninsula will never garner China’s whole attention.

Source: Global Times, republished by Sina, September 3, 2017
http://news.sina.com.cn/c/nd/2017-09-03/doc-ifykqmrv8295988.shtml