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China’s Reaction to Trump’s Election Win

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Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

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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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Exports Slide Further While Imports Plunge

According to China’s General Administration of Customs, in May, Chinese exports fell for the third consecutive month, while imports plunged to the lowest level in three months. These developments highlight the adverse Chinese domestic economic environment, which may trigger further monetary policy adjustments. 

The total trade value in May was down by 9.7 percent from April. Exports fell 2.8 percent, and imports 18.1 percent, with the trade surplus increasing by 65 percent. In the first five months, the U.S. and ASEAN demand helped prevent a more substantial decline in Chinese exports as the exports to Europe and Japan dropped. U.S-China trade went up by 2.8 percent and Europe-China trade was down by 7.1 percent. 
Source: People’s Daily, June 9, 2015 
http://paper.people.com.cn/rmrb/html/2015-06/09/nw.D110000renmrb_20150609_3-01.htm
Briefings | | |   Economy/Resources

Phoenix TV Website: China’s Bull Market Is a Long Term Necessity

 Liu Shan, deputy editor-in-chief of China Business Times, reported on an interview of an anonymous "authoritative insider" on the Chinese economy. People’s Daily published the interview on its front page on May 25. Then on May 26, the Hong Kong based Phoenix Television’s website carried an analysis of the interview.

One of the things that People’s Daily indicated in the interview, according to Liu, is that "China’s bull market is a long term necessity."

People’s Daily‘s interview of the "authoritative insider," when commenting on China’s economic downturn, acknowledged the vital effect of investment on economic growth, "At this stage of China’s development, whether savings can be transferred to investment will be the key to stable economic growth. Given the high rate of household savings, the Chinese people are having trouble getting a sustainable return on assets. At the same time, the real economy and key construction projects lack sufficient funding. More financing channels need be explored to tap into the potential of private capital and to transfer more savings into investment."

It is clear from the "authoritative insider" that the public needs sustainable income from savings and the real economy need financing. The most straight-forward approach is to increase direct financing. This can only be done through the capital market; that is, by directing savings into the pre-IPO market, the equity market, and the bond market so as to generate income based on people’s cash assets. As a result, sustaining a healthy bull market should have been a strategic decision of the central government, rather than a short term expediency.

The central government would also like to achieve the dual effect of stabilizing growth while reducing leverage. Again this approach would effectively increase direct financing. Through direct financing, banks’ loan-deposit ratio could be lowered. We consider that reducing leverage on equity financing by the regulatory authorities is not meant to suppress the equity market. Instead, it is meant to prevent the bubble from growing too fast to lead to a sudden burst. If regulatory measures are appropriate, we expect this round of bull market will last at least three years.

Source: Pheonix TV Online, May 26, 2015
http://finance.ifeng.com/news/special/xiaobg74/

Briefings | | |   Government/Politics

Xinhua: Insulting China with Devil’s Curse; How Does Aquino Become So Brazen

Xinhua published a group of articles in its web magazine, International Sphere (Volume 548) striking back at Philippine President Aquino’s remarks during his visit to Japan in which he compared China to Nazi Germany. In the introduction, the editor wrote, “During his visit to Japan, Philippine President Aquino III made irresponsible remarks regarding the South China Sea issue. This was expected. What was surprising was that, as a head of state, Aquino totally disregarded the bottom line in diplomatic relations, openly talking nonsense, and comparing China’s reasonable and lawful activities in the South China Sea with Nazi Germany. In openly insulting a big country that has normal diplomatic relations with the Philippines, it is losing the national dignity of the entire Philippines. If a head of state makes such a downcast speech, how can the nation be noble and the people have pride!” 

Similar language was used in the collection of articles. For example, “If the Chinese did not have such good-natured composure, the Philippines might have come to know how many big slaps on the mouth they have suffered.” “Why does the Philippines dare to be so rampant, continuously fan the flames, and maliciously provoke? An important reason is that there are external forces in back of them to support them.” 

Source: Xinhua, June 5, 2015 
http://www.xinhuanet.com/world/jrch/548.htm

Briefings | | |   Geo-Strategic Trend

Xinhua: G7 Remains but the World Has Changed

Xinhua published a commentary on June 6 to give its perspective on the upcoming G7 Summit scheduled to start on June 7. The commentary observed that, 40 years after the birth of the G7, the United States is still fond of acting like the “world’s police”; Japan is still carrying its historic burdens; and Germany, France, and Britain are still fighting each other under the “European Union” cover. However the world outside the ancient castle holding these closed-door meetings has changed. The G20 that includes the developing countries is now standing at the center of the world stage. Take a look at the items on the G7 agenda. None of the issues can be resolved without the participation of the developing countries. The author concluded that the days of the G7’s global monopoly on agenda-setting and development-leading are long gone.
Source: Xinhua, June 6, 2015
http://news.xinhuanet.com/world/2015-06/06/c_127885660.htm
Briefings | | |   Government/Politics

Xinhua: Communist Party Plans to Establish Branches in Social Organizations

Xinhua recently reported that, on May 29, the Politburo of the Chinese Communist Party Central Committee decided to establish Party branches in the leadership sections of all levels of the government, people’s groups, economic organizations, cultural organizations, social organizations, and other organizations. The Communist Party is determined to ensure a strong organizational guarantee that it maintains overall leadership as well as central coordination. The Party expressed the belief that the new organizational model is required to deepen the nationwide reform and to ensure the rule of law. The Communist Party used to have similar guidelines but the newly reinforced rules changed the wording “could establish branches” to “should establish branches.” A new term “Social Organization” was added to the language of this new Party decision. Analysts suggested that a large number of new types of organizations have been established recently and the Communist Party does not have any presence in most of these social bodies. Communist Party General Secretary Xi Jinping chaired the Politburo conference that passed the decision.
Source: Xinhua, May 30, 2015
http://www.ce.cn/xwzx/gnsz/gdxw/201505/30/t20150530_5502293.shtml
Briefings | | |   Government/Politics

China and Japan Are Negotiating an Extradition Treaty

Xinhua recently reported that China and Japan just completed a round of negotiations on signing an extradition treaty. The last round of negotiations took place in 2010 and was later paused due to the worsened relationship between the two nations. China has such a treaty with 38 countries but Japan only has extradition treaties with the United States and South Korea. Currently, China is the number one destination country for Japanese criminals to hide, so the Japanese authorities are very much interested in having such a treaty in place. The on-going anti-corruption movement in China also calls for legal tools to help capture corrupt officials who have escaped to Japan. However, some Japanese human rights advocates are against this initiative and have expressed their concern that China could abuse the concept of “criminal.” This recent round of negotiations has lasted for two days.
Source: Xinhua, June 5, 2015
http://china.cankaoxiaoxi.com/2015/0605/807284.shtml
Briefings | | |   Geo-Strategic Trend

Huanqiu Commentary: The US Might Launch a War against China to Keep it from Surpassing the US

Huanqiu published an article that a professor from the PLA National Defense University wrote. The article stated that, ever since the U.S. launched its Asia-Pacific rebalance strategy, Asia has no longer been a peaceful region, especially in the South China Sea. The author expressed the belief that the U.S. only cares about its own interests and is determined to control the South China Sea in order to stop China from surpassing the U.S. Therefore, it couldn’t care less about the world’s peace and it might even launch a war in the regions surrounding China. The author suggested that China should remain calm and proceed with its original plan in the South China Sea while keeping a dialogue open with the U.S. China can let the U.S. know that its cold war mentality is outdated and that China’s intent is to cooperate and make it a win-win situation for both countries. Meanwhile, China should be ready to enter into a war with the U.S. The author said that the U.S. will not give up its urge to launch a war because launching a war is the best way to shift attention from the domestic conflicts it faces, such as economic depression and a high unemployment rate. The war can also stop other countries from investing in Asia and stop China from surpassing the U.S. Therefore China should be highly alert and be fully prepared.

Source: Huanqiu, June 5, 2015
http://mil.huanqiu.com/observation/2015-06/6605704.html

Briefings | | |   US-China Relations

The Legacy of the June 4th Movement – The Legacy of Jiang Zemin

Twenty-six years ago on the night of June 4, 1989, on Tiananmen Square, the Chinese Communist Party (CCP) answered student’s hope for democracy with tanks and guns. That night, the Tiananmen appeal became the Tiananmen Massacre. Not only have many people’s memories of that night faded; any discussion of what really happened has become taboo in China. To those who live in China, but were born later, it never happened.

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Perspectives | |