Chinascope – Page 698

A Follow-up Post on People’s Daily on Social Security Issues (Subsequently Removed)

“Who is raising whom?” [The government treats the people as a mother treats her child, but who is nurturing whom?] was a follow-up post questioning a People’s Daily article titled, “Social Security Is Not a Panacea.” It appeared in Baidu’s follow-up posting section, but the post is no longer available on Baidu. The writer of the follow-up post pointed out that social security should be the retirement funds that the contributors deserve to have after retirement. However, People’s Daily had described it as a charity fund that the government offered. Below are the 10 questions from the post.

1)   People’s Daily said “63 percent" of Chinese residents believe that their retirement life should depend on the government. Only 9 percent of residents believe that they are responsible for their own retirement.” Question: Is the government the creator of wealth or do taxpayers provide the wealth?
2)   In China, around 37 million people enjoy a government pension without paying one cent toward social security; other people who have contributed to social security funds can only receive a 70 yuan basic social security paycheck each month. Who has raised money for whom?
3)   Can I withdraw my contributed money from the government social security funds and take full responsibility for my own retirement from now on?
4)   Chinese people who have paid retirement fund premiums accounted for 28 percent of the national income, three times higher than the same period in other countries. Why have such high premiums resulted in a huge loss? Who should take responsibility?
5)   Retired employees of the civil services and of government institutions enjoy 80 percent of China’s pension resources. Where in the world can government employees not need to pay social security but still enjoy pensions several times higher than those who have paid their social security fees?
6)   If you deposit your money in the bank, and you withdraw it when needed, then does that mean the money was raised by the bank?
7)   Why does the government compel people to join social security and force the people to pay? Why don’t the Chinese [who benefit] know that they should be “thankful”?
8)   Who has provided money for you, People’s Daily?
9)   “The one child policy is good; it is the government that will take care of you when you are old.” Who was it who made this solemn promise to all of the Chinese people?
10)   37 million retirees in China receive pensions several times higher than others but have never paid any retirement premium. Are they retired government officials or state enterprise employees, or ordinary people? Do the people raise the government? Or does the government raise the people?

Source: Baidu’s follow-up posting section, February of 2015
http://tieba.baidu.com/p/3552884419

Briefings | | February 25, 2015 | Government/Politics

Global Times: Chinese Housing Market Saw Record Decline in January

Global Times recently reported that, according to the numbers that the National Bureau of Statistics released, in January, the price of new houses suffered a year-over-year decline of 5.1 percent. It was the worst decline since the Bureau started tracking this index. The statistical scope covered 70 cities. Of those, 64 saw a decline in January. In the past several months, the Chinese housing market has been consistently on the decline, including in many mid-sized cities. More and more investors are moving their money into the stock market. Real estate and its related industries hold a one-quarter share of the Chinese economy. Analysts expect a continued trend of decline in this sector, especially given the situation that the already huge real estate inventory is still seeing growth.

Source: Global Times, February 17, 2015

http://finance.huanqiu.com/view/2015-02/5713304.html

Briefings | | February 24, 2015 | Economy/Resources

China Is Considering Merging PetroChina and Sinopec

Well-known Chinese News Site Sina recently reported that the Chinese government is considering a merger between the top two largest state-owned oil companies – PetroChina and Sinopec. The goal is to establish a “champion” oil company that can practically challenge ExxonMobil and increase oil production efficiency in an era that’s suffering low oil prices. Unnamed Chinese officials said there are multiple options and there is no final decision or timetable yet. As the Chinese economy is slowing down, the Chinese government is planning significant reforms to major state-owned companies in order to improve their global competitiveness. Although the government has been opening up more and more industries (such as infrastructure, natural resources and banking) to private investment, President Xi Jinping stated last year that the state-owned companies are still “an important pillar of the nation’s economy.” Heavy competition among similar state-owned companies is identified as one of the main problems in developing healthy overseas markets. PetroChina has 550,000 employees globally, which is seven times the employee count of ExxonMobil. However its 2013 revenue was US$361 billion, which was much lower than ExxonMobil’s US$420 billion.

Source: Sina, February 17, 2015

http://finance.sina.com.cn/stock/usstock/c/20150217/204821572981.shtml

Briefings | | February 24, 2015 | Economy/Resources

BBC Chinese: Greece to Participate in China’s New Maritime Silk Road

BBC Chinese recently reported that, during the Eighteenth Chinese Naval Escort Fleet’s four-day visit to Greece, Greek Prime Minister Alexis Tsipras boarded a Chinese Naval warship to attend a Chinese New Year’s reception. Tsipras delivered a speech that suggested the visit and the joint naval exercise represented the start of a new era. He also said his government gave a high priority to supporting China’s investments in Greece and agreed that the country will participate in the New Maritime Silk Road plan. Tsipras emphasized that he expects Greece to become the primary entry point to Europe for Chinese goods. The New Maritime Silk Road plan was first announced by Chinese President Xi Jinping in the fall of 2013.

Source: BBC Chinese, February 21, 2015

http://www.bbc.co.uk/zhongwen/simp/world/2015/02/150221_tsipras_greece_china_cooperation

http://www.bbc.co.uk/zhongwen/simp/world/2015/02/150219_greece_china_eu

Briefings | | February 24, 2015 | Geo-Strategic Trend

China’s Coal Industry Is Facing a Tough Time

China Economy reported that 2014 was a bad year for China’s coal companies. China’s Coal Industry Association issued a release stating that, in the first 11 months of 2014, profits fell by 44.4 percent and losses increased by 61.6 percent when compared to same period in 2013; 70 percent of coal companies were in the red. China completed 3.52 billion tons of coal production, which was a 2.1 percent reduction from a year ago. It was the first decline since the year 2000. On the one hand, coal consumption continues to decline. On the other, the companies have excess capacity and operational difficulties. According to China Economy, this will be the new norm for the future of the coal industry.

Source: China Economy, February 21, 2015 http://www.ce.cn/cysc/ny/gdxw/201502/21/t20150221_4630603.shtml

Briefings | | February 23, 2015 | Economy/Resources

Shenzhen Becomes World’s First Friendship City with Berne of Switzerland

As Switzerland as a nation strengthens its ties with China, China’s Shenzhen has become the first Friendship City for its canton of Berne.

The free trade treaty between China and Switzerland took effect last summer. In late January this year, Chinese premier Li Keqiang visited Switzerland. Then in early February, the Swiss Treasury Minister reciprocated the visit in order to promote bilateral cooperation for the internationalization of the Chinese yuan. After two years of communication and preparation, the Swiss canton of Berne formally became a Friendship City with the city of Shenzhen, the most important industrial and economic city in southern China. Since it is the first Friendship City for Berne globally, the story was widely covered in Switzerland. Berne is the second most populous canton in the country. Its industrial structure bears high similarities with Shenzhen. Products include precision instruments, watches and clocks, medical and life sciences, finance, and technology.

Source: Radio Free Asia, February 20, 2015

http://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/gr-02202015103128.html

Briefings | | February 23, 2015 | Geo-Strategic Trend

Qiushi: The Dividends of Hegemony: America’s Source for Reaping without Sowing

Qiushi recently republished a Red Flag Manuscript article with the title, “The Dividends of Hegemony: America’s Source for Reaping without Sowing.” Two researchers, Yang Duogui and Zhou Zhitian, from the Science and Technology Policy and Management Institute of the Chinese Academy of Sciences were the authors.

The article said, “Since 500 years ago, from Portugal, Spain, and the Netherlands to England, and then to the United States, state ‘hegemony’ has gradually developed from the traditional ‘territorial colonization’ into a modern ‘financial colonization.’ Today, for the U.S., as the world’s only superpower, financial colonization is its core secret for maintaining its hegemony power. For the Americans, financial hegemony has become the cornerstone for the United States to be able to obtain its hegemony dividend. It is the source for reaping profits without sowing.”

The article summarized the following ten major ways and channels the U.S. uses to harvest its “hegemony dividends”: 1) Seigniorage. The author calculated that “assuming that all of China’s foreign exchange reserves are held in U.S. Treasury bonds and the interest spread between U.S. Treasury bonds and China Treasury bonds is one percent, then each year the United States will get about US$ 23-26 billion in seigniorage at a minimum from China’s economic development without paying any costs.” 2) International inflation tax revenue; 3) Earnings from [issuing] debts; 4) Overseas investment income; 5) Fee income from dollar transactions; 6) Unfair trade gains; 7) Currency manipulation of earnings; 8) Financial derivative gains; 9) Returns from big item Commodity futures; 10) Income from intellectual property.

Source: Qiushi Journal, February 6, 2015

http://www.qstheory.cn/dukan/hqwg/2015-02/06/c_1114285652.htm

Briefings | | February 20, 2015 | US-China Relations

Qiushi: State Owned Enterprises Should Return More Profits to the State

Qiushi published an article advocating that State-owned enterprises should provide “social dividends” by returning more profits to the State and by increasing the amount of funds used for public benefits.

According to the article, the economy has been experiencing downward pressure. To increase fiscal revenue, state-own enterprises must increase their “social dividends” in addition to their taxes. The article made the following observations.

First, the profits submitted to the central government have not been expended properly. For example, in 2014, only 18.4 billion yuan (US$2.94 billion) went to pay for social security expenses, while 120 billion yuan ($US 19.19 billion) went back to the State-owned enterprises. More profits should be paid into the State coffers.

Second, currently the maximum amount that enterprises submit to the State coffers is about 15 to 25 percent of their profits. In the West, about 30 to 40 percent of the profits are for dividends to be distributed to shareholders.

Third, of 5,000 State-owned enterprises, only 799 are included in the national budget and are required to submit their profits to the State. Particularly, the highly profitable State-owned enterprises in the financial sector are not required to submit their profits to the State coffers at all.

Source: Qiushi, February 17, 2015

http://www.qstheory.cn/economy/2015-02/17/c_1114398141.htm

Briefings | | February 20, 2015 | Economy/Resources

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.