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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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Study Times: China Should Create State Enterprises

Study Times republished an article from Beijing Youth Daily arguing that China should create a number of state enterprises. According to the author, state enterprises are different from State-Owned Enterprises (SOEs). The latter are companies that the government owns, but state enterprises are companies, whether private or state-owned, that are a symbol of the country or that represent its country in certain industries.

For example, Samsung is the state enterprise of South Korea, Daimler AG is of Germany, and Apple and Google are of the U.S. The author suggested that Huawei (an IT industry) and the newly formed CRRC Corp. (in the railway industry) are the two best candidates to become state enterprises of China, as they are both strongly competitive in their fields. Huawei also needs the government’s backing to compete in the international market and to deal with other governments.

As a result of their monopoly positions, many large SOEs, such as those in the oil, electricity, and banking industries, have substantial revenues and a large market share in China. However, they do not have the ability to compete in global markets, and thus cannot become state enterprises in a real sense.

Source: Study Times, January 19, 2015
http://www.studytimes.cn/shtml/xxsb/20150119/9154.shtml

Briefings | | |   Economy/Resources

Military Parade on the 70th Anniversary of Anti-Fascist War Shows the Knife to Corrupt Officials

On Sep 3, 2015, China will hold a military parade to observe the 70th anniversary of the Anti-Fascist War. It is the first military parade to be staged other than on China’s National Day (October 1) and the first since President Xi Jinping took office in 2012. It is the first time that China will invite foreign leaders to attend a grand military parade; Russian President Vladimir Putin is expected to attend.

On January 27, 2015, China Review News published an article analyzing the political considerations behind the decision to hold such a grand parade as it breaks the convention of having a big military parade every 10 years on National Day. According to the article, there are four purposes in holding this parade. First, it displays China’s military might; second, it deters Japan; third, it enhances the Chinese people’s sense of pride and confidence by showing off the Chinese army’s morale and armaments; finally, it tells corrupt officials that the army, which is “the handle of a knife,” in addition to two other “handles of knives,” which are the Chinese Communist Party’s disciplinary inspections system and its political and legal system, is in the hands of the Party and the people.
On January 20, 2015, when Xi spoke to the Political and Legal Affairs Committee meeting, he said, “Nurture a legal corps loyal to the party, loyal to the country, loyal to the people, and loyal to the law. Ensure that the handle of the knife is firmly in the hands of the Party and the people.”

Source: China Review News, January 27, 2015
http://hk.crntt.com/doc/1035/9/2/9/103592959.html?coluid=4&kindid=18&docid=103592959&mdate=0127100910  

Briefings | | |   Government/Politics

Global Times: Products Sold Online Suffered Low Genuine Rate

Global Times recently reported that the State Administration for Industry and Commerce (SAIC) released its official report on online commerce monitoring and inspections, especially for the rate of genuine products, as made by the original vendor, offered online. According to the report, the industrial category with the lowest rate for being genuine was agricultural supplies such as fertilizers. which had the rate of 20 percent for being the genune product. The cellphone industry was the second lowest, at 28.57 percent – examples are Xiaomi and Samsung related cellphones. In terms of the online commerce platforms, the Taobao network had the lowest genuine product rate, which was 37.25 percent. Taobao is the flagship platform of the Alibaba Group which recently had the largest U.S. stock IPO (Initial Public Offering) in the history of the States. According to SAIC, online shopping service providers typically have four problems: loose seller background checks, a lack of regular legal compliance checks on products that sellers offer, chaotic sales management, and flawed credit checking systems. 
Source: Global Times, January 24, 2015
http://tech.huanqiu.com/internet/2015-01/5492409.html
Briefings | | |   Economy/Resources

Xinhua: Politburo Passed the National Security Strategy Outline

Xinhua recently reported that the Politburo of the Chinese Communist Party met on January 23 and reviewed the reports from the Party branches in the National People’s Congress Standing Committee, the State Council, the Chinese People’s Political Consultative Conference, the Supreme Court, and the Supreme People’s Procuratorate. Communist Party General Secretary Xi Jinping chaired the meeting. The Politburo also discussed the domestic and international challenges to China’s national security. It passed the proposed National Security Strategy Outline, which has the goals of improving the socialist system, enhancing the national administrative structure, and modernizing China’s governing capabilities. The cornerstone of the national security strategy is the leadership role of the Chinese Communist Party. The Outline insisted on centralization, efficiency, and high authority as the core leadership principles for national security. The meeting also discussed the outcome of the recent anti-corruption campaign and called for continued enhancements to the political system. 
Source: Xinhua, January 23, 2015
http://news.xinhuanet.com/politics/2015-01/23/c_1114112093.htm
Briefings | | |   Government/Politics

BBC Chinese: China Blocks VPN and Proxy Providers

On January 23, BBC Chinese reported that the Chinese government has recently been blocking more and more VPN (Virtual Private Network) and Proxy service providers. [Editor’s note: VPN and Proxy servers are the primary technology channels used to bypass the government controlled Internet firewalls, such as the Chinese “Great Firewall.”] Multiple commercial VPN/Proxy service companies are reporting failures on overseas servers located in the United States and Australia. Some regular companies’ communications with foreign partners or even with their parent companies located outside China have been seriously impacted, especially small and medium sized companies. Large international companies are not heavily impacted since they typically build their own VPN infrastructure. Some Chinese officials, who would like to remain anonymous, confirmed that the government recently “upgraded” the Great Firewall to defend its “Internet sovereignty.” Not long ago, Google Mail was blocked in China as well – now the connection is largely restored. 
Source: BBC Chinese, January 23, 2015
http://www.bbc.co.uk/zhongwen/simp/china/2015/01/150123_china_vpn_block
Briefings | | |   Information/Technology

China’s Capital Outflow Exceeds Inflow for the First Time

According to the latest statistics from the Commerce Ministry, in 2014, China’s total outbound foreign direct investment amounted to US$116 billion, an increase of 15.5 percent over the figure for 2013. If reinvestment after financing in the local foreign countries were included, the total scale of China’s outbound investment would be US$140 billion, exceeding the total inbound foreign investment by US$20 billion. 2014 marked the very first year that China became a country of net capital exports. As of 2014, China’s outbound foreign investments had increased by almost 40 times in the past 12 years, with its annual outbound investment ranking third place in the world for two consecutive years.
In 2013, China’s outbound investments spanned 6128 overseas enterprises in 156 countries and regions, covering transportation, storage, and postal services. In addition to traditional natural resources and energy projects, Chinese investments in manufacturing and agriculture are increasingly active.
Source: People’s Daily, January 26, 2015
http://paper.people.com.cn/rmrbhwb/html/2015-01/26/content_1526312.htm
Briefings | | |   Geo-Strategic Trend

Xinhua: National Food Security and Permanent Farmland

On January 23, 2015, Xinhua reported that one of the priorities of the State Council for 2015 is to designate permanent farmland. 

As of now, the Ministry of Agriculture and the Ministry of Land Resources have already begun full implementation. The effort will start with big cities and spread to small towns. The effort is expected to be completed in 2016 and farmland will be returned to farmers. 
According to the 2015 National Conference on Land Resources, which just adjourned, the priority is to designate farmland around cities as permanent farmland so that it will be impossible to change the size of the designated farmland. Large-scale urbanization means more and more rural land has become "non-agricultural." To ensure national food security for China’s 1.3 billion people, China has designated 1.8 billion mu (approximately .3 billion acres) as permanent farmland. From 1996 to 2009, China lost 205 million mu (approximately 33.8 million acres) of high quality farmland to urbanization. 
Source: Xinhua, January 23, 2015. 
http://news.xinhuanet.com/politics/2015-01/23/c_1114106019.htm
Briefings | | |   Economy/Resources

Qiushi: China Must Safeguard the State-Owned Economic Dominance

Qiushi published an article on January 23 that emphasized the importance of the dominance of the State-owned economy. 

The article stated that, in China’s socialist economy, the State-owned economy takes the leading role. Without the State economy, it would be impossible to adhere to socialism with Chinese characteristics. State ownership and all of the people achieving prosperity are inseparable. The fundamental difference between the socialist market economy and the capitalist market economy is that China’s economic system is dominated by State ownership. To adhere to socialism is to maintain the economic system which is dominated by State ownership and supplemented by other types of ownership. 
To support its position, the article cited language from a politburo meeting on August 19, 2014, stating that State-owned enterprises dominate major industries and key areas of national security and are an important pillar of the national economy. 
Source: Qiushi, January 23, 2014 
http://www.qstheory.cn/dukan/hqwg/2015-01/23/c_1114109520.htm
Briefings | | |   Economy/Resources