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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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Minister of Finance on Areas to Help China Overcome the Middle Income Trap

Phoenix Chinese News and Entertainment reported that, on April 24, when attending the Tsinghua China high-level economic forum held at Tsinghua University, Lou Jiwei, China’s Minister of Finance, said that there is a 50 percent chance that China will fall into the middle income trap [where a country attains a certain level of income and then gets stuck at that level] in the next 5 to 10 years due to its fast becoming an aging society. Lou listed five areas that will help China to overcome this problem.

1) Agricultural reform: to promote agriculture imports and reduce farm subsidy spending. Lou believes this will shift the labor force in the countryside to supplement the labor shortage in the manufacturing and service sectors while keeping salary increases below the growth of productivity.

2) Reform of household registration: to break the registration barriers. Lou said that since the reform initiation published in July 2014, only 14 provinces have introduced a plan to execute the reform and none of these are in the areas where most people wish to migrate. Therefore, in order to break the barrier, the government must provide education and medical resources that will help the migrant workers to have stable living conditions in the city.

3) Labor relations: to allow employers and the employees to manage labor relations themselves in order to promote flexibility in the labor market.

4) Land reform: Once the construction land is bought out, it can be freely traded, just like urban land. The government is not allowed to expropriate land and evict the tenants.

5) Social Security: the government needs to allocate more funds so as to reduce the social security rate. More changes are needed in social security payments and in collection and investment. Otherwise, China will not be able to deal with its aging population.

Source: Phoenix Chinese News and Entertainment, April 26, 2015
http://finance.ifeng.com/a/20150426/13664167_0.shtml

Briefings | | |   Economy/Resources

Qiushi Theory on the Challenges to Socialism with Chinese Characteristics

Qiushi Theory published an article on the challenges to socialism with Chinese characteristics. The article summarized three challenges that the development of socialism with Chinese characteristics will inevitably face. 

The first is external Pressure. The article said that Western countries take the growth in China as a threat to their value system. Therefore, they have strengthened their effort to prevent the infiltration of Chinese ideology. A number of conflicts also exist in China’s neighboring countries. China needs to have superior wisdom in order to face these challenges.

The second is growing Pains. The article stated that, as China grows, it faces new challenges and risks in its economic development and reform. Different social issues exist, which affect whether China advances or retreats. Therefore, China must have the courage to deal with these growing pains. 

The third is major tests for the country’s leadership. The article said that how the Party manages the major tests and risks it is facing is a key to how the Party accomplishes its goals. Therefore the Party must be determined while increasing its effort to enforce strict discipline within the Party.

Source: Qiushi Theory, April 23, 2015
http://www.qstheory.cn/dukan/hqwg/2015-04/23/c_1115069787.htm

Briefings | | |   Government/Politics

China Review News Agency on Why China Is No Longer the Largest Holder of U.S. Debit

China Review News Agency carried an article titled, “Why China Is No Longer the Largest Holder of U.S. Debit.” The article said that, in February, Japan surpassed China and became the largest holder of U.S. debit. The article called it good news because China has found a better way to invest its money elsewhere. It is an indication that China is trying very hard not to be trapped in U.S. treasury bonds. The article stated that the reason for China to reduce its holding of shares of U.S. Treasury Bonds is that China has shifted its investments into other assets that have a better return. Meanwhile China plans to make investments in other areas, including the Asian Infrastructure Investment Bank, the Silk Road fund, and BRICS (an association of five major emerging national economies: Brazil, Russia, India, China and South Africa). In addition, China also needs to protect the stability of its own currency. The article predicted that holding U.S. debit will remain as the largest share of China’s foreign reserve. It could also go up if needed but the overall trend will decrease.

Source: China Review News Agency, April 26, 2015
http://hk.crntt.com/doc/1037/2/6/7/103726774.html?coluid=53&kindid=0&docid=103726774&mdate=0426080653

Briefings | | |   Government/Politics

People’s Daily: The U.S. and the Philippines Held Joint Military Exercises to Intimidate China

The Philippine military announced that the Philippine-U.S. joint military exercises codenamed "shoulder to shoulder" opened on April 20. People’s Daily reported on a CCTV interview of China Institute of International Affairs researcher Teng Jianqun, who commented on the military exercises. Teng said that more than 10,000 people from both sides took part in the exercises, more than double the number from last year. In addition, the exercise site was only 220 km. away from the nearest Chinese Huangyan Island. The sudden increase in the number of people in the exercises is indeed surprising. It is a manifestation that the United States and the Philippines have ulterior motives in the South China Sea. The Philippines chose to use the exercise area close to China in order to intimidate China. 

Teng pointed out that, in 1991, after the end of the Cold War and according to the law, the United States should have withdrawn all of its troops from the Philippines. The United States offered to conduct joint military exercises with the Philippines so that that it could continue to station its troops there. 
Teng stated that the U.S. and the Philippines’s military alliance has a long history. The United States has been providing military protection for the Philippines and has a large number of long-term troops stationed in the Philippines, especially since Aquino took office. He has tried to win over the United States to strengthen their military presence in the Philippines. In the current military deployment in the Philippines, Singapore, Thailand, and other countries, the U.S. has basically achieved its "Air Sea Battle" strategic plan in the South China Sea. 
Teng said, "According to figures released by the United States itself, the number of U.S. military exercises in the Asia-Pacific region each year will reach 170-200. The U.S. will have a military exercise almost every other day. Military exercises have become a symbolic action of the United States’ return to the Asia-Pacific." 
Source: People’s Daily, April 21, 2015 
http://military.people.com.cn/n/2015/0421/c1011-26879925.html

Briefings | | |   US-China Relations

Government Reduces the Amount of Land Available for Commercial Development

On April 21, the Ministry of Land and Resources released major economic statistics for the first quarter of 2015. The statistics showed that the amount of state-owned land available for commercial real estate development declined by 38.7 percent year on year. Beijing, Guangzhou, Harbin, and other cities have published an estimated 2015 land availability forecast for real estate development. On a year on year basis, the availability in Guangzhou decreased 24 percent, Beijing 27 percent, and Harbin about 50 percent. The reduction is in response to the sluggish housing market and the high inventory of available housing.

According to sources familiar with the government promotion of sales of state-owned land, the issue is not that local governments want to cut back on the sale of land; it is that the decline in the market has forced the reduction of such sales. In fact, local governments have been very enthusiastic about the sale of land because it has been a major source of revenue for them. 

Based on the numbers the National Bureau of Statistics of China released, in the first quarter of 2015, housing developers reduced the amount of land they acquired by 32.4 percent year on year. 
Source: 21st Century, April 22, 2015 
http://jingji.21cbh.com/2015/4-22/xOMDA2NTFfMTM4MTcxOA.html

Briefings | | |   Economy/Resources

Hong Kong Media on Anti-Corruption in Shanghai; Jiang Zemin’s Nephew in Trouble

On April 20, 2015, Boxun republished a news article from The Trend Magazine in Hong Kong on the current intense anti-corruption campaign in Shanghai, where former top leader Jiang Zemin has been for many years (the original article cannot be found online). Several high ranking political officials and business executives are already under investigations. Wang Qishan, Secretary of the Chinese Communist Party Central Commission for Discipline Inspection (CCDI), said that they “cannot afford to lose” in the anti-corruption effort and “vowed to break through Shanghai.” The Central Commission for Discipline Inspection is now investigating the Shanghai Politics and Law system.

Many serious corruption cases involved the Shanghai Politics and Law Committee. Most of these cases happened when Wu Zhiming, Jiang Zemin’s nephew, was in charge. Wu was the former Party Secretary of the Shanghai Politics and Law Committee and is the current chairman of the Shanghai Chinese People’s Political Consultative Conference (CPPCC). “What Wu Zhiming faces is far from a soft landing as outsiders have speculated.”

Source: Boxun, April 20, 2015
http://www.boxun.com/news/gb/china/2015/04/201504201500.shtml#.VTfMrWfYq3M

Briefings | | |   Government/Politics

Qiushi: How Should China’s SOEs Deal With the Competitive Neutrality Rule?

"The Western countries have been on high alert about China’s State-Owned-Enterprises (SOEs). The U.S. and other countries have been promoting the ‘Competitive Neutrality’ rule in bi-lateral and multi-lateral trade treaties and have tried to adopt it in the TPP negotiations. [Editor’s note: Competitive neutrality is the recognition that significant government business activities which are in competition with the private sector should not have a competitive advantage or disadvantage simply by virtue of government ownership and control.] A Qiushi article stated that, whether or not China joins the TPP negotiations, the ‘Competitive Neutrality’ rule will create challenges for China’s SOEs to carry out the ‘Going Abroad’ strategy."

The article suggested the following solutions to enable China’s SOEs to deal with this restriction:

1. Let the SOEs experiment with competition involving this principle (without the government’s subsidies and backing) in China’s Free Trade Zone (e.g. Shanghai) to gain experience.

2. Expedite "Going Abroad" activities. SOEs should take advantage of China’s "One Belt, One Road" strategy and other economic collaboration plans with Asian and African countries. This will enable them tom expand overseas quickly before the "Competitive Neutrality" term becomes a global rule.

3. Compete for international discourse power. Actively seek to control the discourse power and the right to define terms. Try to narrow the applicability of the "Competitive Neutrality" rule, reduce [other countries’ imposed] restrictions on China’s SOEs, request a longer grace period [for the government to stop supporting them], and tie the applicability of the "Competitive Neutrality" rule to match the economic development level of the emerging economies.

Source: Qiushi Online, April 19, 2015
http://www.qstheory.cn/tjyd/2015-04/19/c_1115015135.htm
Briefings | | |   Government/Politics

Hired Armed Police Officers Attempted to Assassinate Wang Qishan

On April 20, 2015, Boxun republished a news article from The Trend Magazine in Hong Kong on recent attempted assassinations against Wang Qishan, Secretary of the Chinese Communist Party Central Commission for Discipline Inspection (CCDI). The original article in The Trend Magazine is not available online.

From the beginning of 2015, Wang has narrowly escaped assignations in Shanxi, Tianjin, Henan, and other places. In the assassination attempt in Shanxi, two killers were former provincial armed police officers who had been expelled from their positions. Both of them committed suicide after biting their poisonous collars. Since 2013, Wang Qishan has suffered assassination attempts over 12 times.

Source: Boxun, April 20, 2015
http://www.boxun.com/news/gb/china/2015/04/201504200306.shtml#.VTfgO2fYq3M

Briefings | | |   Government/Politics