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

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

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

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

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CRN: U.S. Is Sowing Discord Rather Than Resolving Disputes in the South China Sea

On July 16, 2015, China Review News (CRN) published a commentary on the U.S. involvement in the South China Sea. It stated that, as the U.S. gets more and more involved in South China Sea issues, it actively pushes its own geostrategic agenda. 

According to the commentary, the U.S.’ strategic goal is to maintain its hegemony in the Western Pacific region by maintaining military control over the South China Sea and the political legitimacy of such control. The U.S. actively uses the disputes China has with Vietnam and the Philippines over sovereignty in the South China Sea islands and reefs to implement a strategic entry point for the U.S. to contain China. The U.S. provides political, economic, and military assistance to Vietnam and the Philippines to contend with China. “In fact, the United States does not come to solve the South China Sea issues, but to use the South China Sea issues to sow discord between China and the ASEAN countries.” 
Source: China Review News, July 16, 2015 

http://hk.crntt.com/doc/1038/1/9/8/103819825.html?coluid=1&kindid=0&docid=103819825&mdate=0716001306

Briefings | | |   US-China Relations

China’s SEC Cracks Down on Improper Disclosure of Information

On July 15, 2015, the China Securities Regulatory Commission (CSRC) announced that it was investigating 10 cases that involved improper disclosure of information. The effort was the fifth if the CSRC’s 2015 campaign to crack down on illegal activities in stock trading. 

The 10 cases focus on five types of behavior: obtaining approval for IPOs through the use of fictitious assets and profits; covering up major stock holders’ illegal acquisition of the listed companies through the fabrication of major stock transactions; forging bank documents to inflate assets and profits and whitewashing listed companies’ financial statements; making up the  achievements of listed or targeted companies during the merger and acquisition period; and failing to disclose information in a timely manner or selectively disclosing important information, leading to abnormal fluctuations in the stocks of listed companies. 
Source: Xinhua, July 15, 2015 
http://news.xinhuanet.com/fortune/2015-07/15/c_1115936989.htm
Briefings | | |   Economy/Resources

National Defense University Professor: If China Can Hold on, U.S. May Become Hopelessly Rotten First

The article below is an excerpt from a lecture that Qiao Liang, a professor at China National Defense University, gave at the 2015 Summer Industry Investment Forum. The article was first published on Huanqiu (Global Times). Later a top Chinese military newspaper website www.81.net and many other top Chinese websites republished it. 

“The famous American geopolitical strategist Brzezinski has brought back the theory of the ‘Thucydides trap.’ Brzezinski believes that China and the U.S. are about to fall into the Thucydides trap. Americans once again remind the Chinese people of this. The purpose is nothing more than to let the Chinese people recognize their own strength and status and so they do not fall into the plight of challenging the United States, which would result in the two sides killing each other. Today, times have changed. Not every instance of a great powers’ rise will experience an occurrence of the Thucydides trap. A zero-sum game is not the only choice for great powers’ competition. At least when the U.S. took over the dominating power from Great Britain, the U.S. itself avoided sinking into the Thucydides trap. 

“What do China and the U.S. truly need to be alert to today? It is not China challenging the U.S. in the Thucydides trap. Rather, it is the United States launching a ‘boor-style fight’ against China because that might lead to China’s fighting back in the same ‘hard-hard’ way. Some Chinese scholars believe that, since China’s current focus is to develop the ‘one belt and one way’ strategy, [China] should not be in direct confrontation with the United States on the South China Sea issue. Otherwise China might lose big for a penny. In my opinion, there are two scenarios in the ‘losing big for a penny’ situation. One is penny wise and pound foolish; the other is losing the cavalry because of the loss of a horseshoe, then losing a battle because of the loss of the cavalry, and then losing the war and finally losing the entire country. In the current South China Sea, I think China is in the situation of the second scenario. If China retreats from the South China Sea under pressure, it is by no means just losing a horseshoe. 
“Now China’s ‘one belt, one way’ strategy is about to roll out. The South China Sea is one of its starting points. More importantly, being eager to manufacture a dispute in the South China Sea, the United States has a profound strategic intent, which is certainly not simply to safeguard the freedom of the sea. In Europe, by using the Ukrainian event, the United States has successfully manufactured dissension between the EU and Russia. Now, with the crisis in Greece, the United States is having a battle with Europe for international capital. At the same time, the U.S. also hopes to drive capital away from China and China’s neighboring areas. The Americans placed a lot of ‘bombs’ around China for this purpose, e.g., the Diaoyu Islands, the Huangyan Island, and the Hong Kong ‘occupy central’ movement. Unfortunately [for Americans], none of these bombs exploded. The United States finally had to start action on its own, coming to the South China Sea to pressure China. Contrary to the Americans’ expectations, the China-sponsored Asian investment bank was established at this time. Not just in Asia, many other countries have also stood behind China one after another. Even America’s hardcore British ally also joined the bank. How could some Americans not get angry as a result? In addition to accusing the British of being traitors, the U.S. is creating a tense atmosphere in the South China Sea. What the U.S. is seeking is not hard to understand. In this case, could China retreat? Once it retreated, domestic public confidence in the government’s authority would plummet and global investors confidence in China might ebb. Therefore, China can never retreat because, at the moment, the South China Sea issue is both about ‘face’ and about ‘everything else.’ 
“It is foreseeable that the grand strategy game between China and the U.S. will revolve around ‘one belt, one way’ to develop. To this, we must have a clear understanding. In today’s global economic crisis, it is not a time [to find out] who is better than whom; it is the period to find out who-is-more-rotten. China’s economic fundamental, compared with other countries, is relatively better. If China can hold on, the United States may become hopelessly rotten [ahead of China]. China’s stock market ‘distress’ this time could be a stress test in advance and the release of the crisis ahead of time. From the perspective of the long term, it is not a bad thing. Especially, if we once again hold steady in our position after rescuing the market, the prognosis can be expected.” 

Source: Huanqiu, republished by 81.net July 13, 2015 http://www.81.net/pinglunjingxuan/2015/0G4592942015.html

Briefings | | |   US-China Relations

The Beijing News: Chinese Police Take Action against Malicious Short Sellers

On July 14, 2015, The Beijing News published an article on new findings from a recent investigation on “Malicious” short selling of A-shares (Chinese domestic stocks).

On July 9, 2015, Vice Minister of China’s Public Security Meng Qingfeng entered China Securities Regulatory Commission with a police team in order to look for “malicious” short sellers. On July 12, 2015, the Ministry of Public Security in conjunction with the China Securities Regulatory Commission discovered some clues leading to the crimes of “malicious” short selling of stocks and indexes. Some trading companies have been involved in manipulating securities and futures exchanges. China’s Public Security Ministry and the China Securities Regulatory Commission will take action against “hostile short sellers.”

Source: The Beijing News, July 14, 2015
http://www.bjnews.com.cn/finance/2015/07/14/370518.html

Briefings | | |   Economy/Resources

FT Chinese: Offshore Funds Are Leaving the Chinese Stock Market

On July 15, 2015, Financial Times Chinese published an article on its website titled, “Offshore Funds Pull Out of the Chinese Stock Market.” The article stated, “As of yesterday, global investors had been pulling capital out of Chinese stocks via Shanghai – Hong Kong Stock Connect for seven straight trading days. Since July 6, 2015, overseas buyers have liquidated 44.2 billion Chinese yuan (about 7.1 billion US dollars) from their Chinese stock holdings via the Stock Connect trading link between Hong Kong and Shanghai.

Beijing initiated tough rescue measures to save China’s stock market. It is allowing more than half of listed companies to suspend stock trading. Major shareholders have been banned from selling any shares of their stocks. China’s Central Bank has injected liquidity into the stock market.

For now, the rescue efforts have succeeded in containing the panic in the stock market. "Some rescue measures, however, have shocked Western investors, such as requiring listed companies to report good news in order to boost the price of their stock." Many analysts have recently criticized the Chinese government’s rescue efforts. They describe the current market improvement as a government induced rebound after a decline.

Michael Lai, investment director at GAM, wrote, “The final straw was allowing half the companies listed to suspend trading, effectively turning A-shares (Chinese domestic stocks) into an unsalable market.” Some investors doubt Beijing’s ability to support the market.

Source: Financial Times Chinese, July 15, 2015
http://www.ftchinese.com/story/001063008?full=y

Briefings | | |   Economy/Resources

Xinhua: China’s Serious Soil Pollution Is Worsening

Xinhua recently reported that the Chinese Ministry of Environmental Protection realized that China faces a serious worsening of its soil pollution. The Ministry will come up with a six to seven year plan to get the situation under control. Li Ganjie, the Deputy Minister of the Ministry, called for immediate action to design laws that help protect China’s soil. Currently there is no law that governs the area of soil pollution prevention. According to the United Nations’ title, 2015 is the “International Year of Soil.” In a recent summit of high ranking Chinese government officials, the “soil safety” issue was raised as a serious threat to national food safety, water safety, and the entire safety of the environment. Over the past 20 years, China has faced a significant area reduction of high quality arable land, soil erosion, soil acidification, and various other types of soil pollution. Urgent needs have been identified in the areas of technological innovation and legal protection as well. 
Source: Xinhua, July 11, 2015
http://politics.people.com.cn/n/2015/0711/c1001-27289421.html
Briefings | | |   Economy/Resources

BBC Chinese: China Criticized the UN High Commissioner for Human Rights

BBC Chinese recently reported that China was very angry with Mr. Zeid Al Hussein, the United Nations High Commissioner for Human Rights. It criticized him for “interfering with China’s internal affairs” as well as “not being professional.” Mr. Hussein expressed his concern in relation to the new restrictions imposed on human rights and freedom after China released its proposed draft National Security Law to the public for comments. Hua Chunying, the spokesperson for the Chinese Ministry of Foreign Affairs immediately said that China was “strongly dissatisfied and resolutely opposed to Mr. Hussein’s comments.” Hua also declared that Mr. Hussein’s judgment was “total guesswork” and was “untenable.” The proposed new law, if passed, allows the government to close down Internet sites or cut off regional Internet connections entirely, “under certain conditions.”
Source:  BBC Chinese, July 9, 2015
http://www.bbc.com/zhongwen/simp/china/2015/07/150709_china_un_politics
Briefings | | |   Government/Politics

Ukraine Has Become China’s Largest Corn Supplier

Well-known Chinese news site Sina recently reported that according to the latest statistics from Customs, China imported 403,881 tons of corn from Ukraine in May. This caused the total amount of corn imported from Ukraine to reach 1.55 million tons so far this year (as of May). That volume was near 90 percent of China’s total corn imports. China has been trying to establish the strategy of diversifying its supply sources for food and oil seeds. Since 2012, China has had in place a US$3-billion “loan for corn” agreement with Ukraine, which quickly became China’s largest corn supplier. Until the end of last year, the United States was China’s largest corn supplier. In the first five months of this year, the import volume from the United States sharply dropped by ninety-five percent. With a tougher relationship with Russia, Ukraine’s struggling agriculture is getting more and more dependent on China’s need for cereals and meat. U.S. senior economist Fred Gale suggested that this trend is in line with China’s strategy of investing in some of the “neglected regions.”
Source: Sina, July 6, 2015
http://finance.sina.com/bg/economy/sinacn/20150706/16421292316.html
Briefings | | |   Geo-Strategic Trend