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HSBC Chinese Manufacturing PMI Recorded a Seven Month Low

Well-known Chinese news site Sina recently reported that HSBC/Markit jointly released the final Chinese Manufacturing PMI (Purchasing Managers Index) number for December, which is at a seven month low point at 49.6. According to Qu Hongbin, HSBC Chief Economist of the Grand China Region, domestic demand is on the decline, which has caused the number of new orders to shrink. This also confirms that the manufacturing industry is getting weaker. Qu suggested that the government may need to relax its currency policies again in the next few months. The unemployment sub-index showed an increase in unemployment, which may indicate that manufacturing companies are not hiring. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: Sina, December 31, 2014
http://finance.sina.com.cn/stock/usstock/c/20141231/111321206181.shtml

RFI: Head of Confucius Institute Admitted Exporting Communist Values

Radio Free International (RFI) recently reported that Xu Lin, the Chief Director of the Confucius Institute’s World Headquarters and Director of the Chinese Language Development Center of the Ministry of Education, admitted in a BBC interview that her organization’s mission is to export the values of the Chinese Communist Party to “international academic organizations, no matter whether it’s Columbia University, Stanford University, or a district primary school.” The Wall Street Journal also reported that Xu confirmed that Beijing clearly banned Falun Gong practitioners from overseas Confucius Institutes. Meanwhile, Confucius Institute teachers are required to submit reports on whether sensitive political topics were discussed in classes. The University of Chicago and the University of Pennsylvania both recently closed their Confucius Institutes. Canada’s Toronto school district also discontinued its contract. However many U.S. K-12 schools signed secret agreements with the Confucius Institute. [Editor’s note: New Jersey Rep. Chris Smith of the Congressional Executive Commission on China (CECC) has pledged to investigate Confucius Institute contracts and the extent to which U.S. institutions outsource academic control and faculty oversight to a foreign government.]
Source: RFI, December 29, 2014
http://rfi.my/1y0K97F

BBC Chinese: China to Adjust Salary Structure for State-Owned Company Management

BBC Chinese recently reported that, starting on January 1, 2014, 72 large central government owned companies started adjusting their management salary structure. These companies include PetroChina, Sinopec, China Mobile, and some banks and railway companies. According to the Ministry of Human Resources and Social Security, after the reform, the salary level of these companies’ leadership teams will very likely decline. In China, the central government owned company management personnel are both corporate administrative professionals and government officials at the same time. The management personnel typically include the Chairman of the Board, the Chief Executive Officer, the Chairman of the Board of Supervisors, and the Top Secretary of the Communist Party branch in the company. The new plan will set the ceiling on the management salaries to be around eight times the average salary of the company’s staff. The current level is around 12 times.
Source: BBC Chinese, January 3, 2015
http://www.bbc.co.uk/zhongwen/simp/china/2015/01/150103_china_stateowned_corporation_salary

Xi Jinping: the Socialist Rule of Law with Chinese Characteristics

In its No. 1 issue of 2015, Qiushi published Parts 2 and 3 of Xi Jinping’s speech given on October 23, 2014, at the 4th plenary session of the 18th Communist Party of China Central Committee. 

Xi spoke about advancing the rule of law in China. According to the speech, the general objective is to form a system serving "the socialist rule of law with Chinese characteristics" and to build a country under "the socialist rule of law." In doing so, China must uphold the leadership of the Party and the dominant position of the people. Everyone must be equal before the law, with the rule of law and morality applying, all based on Chinese reality. 

Source: Qiushi, January 5, 2015 
http://www.qstheory.cn/dukan/qs/2015-01/01/c_1113810966.htm

Over Five Thousand Party Officials Investigated for Corruption in December 2014

The Communist Party’s Central Commission for Discipline Inspection (CCDI) released information on January 5, 2015, describing its accomplishments. In December 2014, it handled 4,238 corruption cases; it dealt with 5,340 Party officials; and 2,280 had been placed under administrative adverse actions and the Party’s disciplinary actions. 

Corruption cases involve violations of work discipline, the use of public funds for personal expenditures, the use of government vehicles for personal trips, extravagant weddings and funerals, giving and accepting gifts, and personal travel using public funds. 
By of the end of 2014, CCDI had handled 77,606 corruption cases. It had dealt with 102,168 Party officials and 31,338 had been place under administrative adverse actions and the Party’s disciplinary actions. 

Source: The Central Commission for Discipline Inspection (CCDI) of the Communist Party of China, January 5, 2015 
http://www.ccdi.gov.cn/xwtt/201501/t20150105_49683.html

Japan’s Triple Motives in Attacking Chinese Military Exercises

Zhang Junshe (张军社), a researcher at the Institute of Military Studies of the Chinese Navy, published a commentary article in People’s Daily (overseas edition), arguing about China’s right to conduct military activities in the waters of the Western Pacific Ocean. Below are some quotes from the article:

“Since December 4, the Chinese Navy has been organizing ships and planned activities in the waters of the Western Pacific Ocean so as to conduct remote sea drills following its annual training plan.” 
“To the Chinese navy’s normal training activities, the Japanese side has appeared very uncomfortable and reacted inappropriately. Since the 4th [of December], the Japanese side has repeatedly sent ships and planes to follow, monitor, and harass China’s warships. Japan also issued several statements, such as the so-called ‘given the fact that China’s military planes entered Japanese airspace, the Japanese Air Self Defense Force dispatched fighter planes in an emergency,’ … hyping the information about the ‘China threat.’" 
“Japan is very clear about the legality, legitimacy, and necessity of the Chinese Navy’s far sea exercises in the Western Pacific waters. The reason that Japan insists on harassing and smearing the Chinese Navy’s warships activity has to do with its selfish purposes. 
“One is the Cold War mentality, attempting to block the Chinese navy within the boundary of the so-called ‘first island chain.’ Second, it is trying to break through the restrictions of its ‘peace constitution,’ lift the ban on its right to a collective self-defense, and look for excuses to develop offensive combat forces. Third, it is trying to consolidate the Japan-U.S. alliance, using the United States to contain China’s military development.” 
The article concluded, “The Chinese Navy will continue to conduct far sea drills in the Western Pacific waters in the future. The Japanese government had better get accustomed to this reality.” 

Source: People’s Daily, December 30, 2014 
http://world.people.com.cn/n/2014/1230/c1002-26297069.html

China’s Two Voices: Xi Jinping Happily Chatted and Shook Hands with Santa Claus on Christmas Day

On December 25, 2015, a Chinese blog named Liyuanfans posted 3 photos of Xi Jinping with Santa Claus. Xi Jinping is the present General Secretary of the Communist Party of China, the President of the People’s Republic of China, and the Chairman of the Central Military. Liyuan is the first name of Xi’s wife. The blog of Liyuanfans regularly posts photos and short messages about the couple. The 3 photos showed that Xi was accepting a gift from Santa Claus, sitting next to Santa Claus with Santa’s hand on Xi’s shoulder, and shaking hands beamingly with Santa Claus.

The above message is contradictory to what happened in some schools and universities in China recently. On December 22, 2015, the Zhejiang Board of Education prohibited elementary, middle, and high schools from organizing Christmas events. On Christmas Eve, Northwestern University in China forbade students from spending Christmas Eve by themselves. [Editor’s note: A previous Chinascope briefing said of Northwestern University: "Some netizens posted that, on Christmas Eve, all of the students were organized to watch videos inside the classrooms. The videos were related to traditional Chinese culture. The teachers stood guard at the classrooms. It was said that whoever celebrated Christmas would be disciplined."]

Secret China questioned, “Why are there two voices within the Communist Party?” 

Sources: Blog of Liyuanfans, December 25, 2015.  
http://www.weibo.com/liyuanfans

Secret China, December 29, 2015
http://www.secretchina.com/news/14/12/29/564019.html
Chinascope, Some Chinese Schools Prohibited Students from Celebrating Christmans.
http://chinascope.org/main/content/view/6864/81/

China Unicom Top Executives under Investigation

On December 30, 2014, Caixin.com, a website from Mainland China, released a news report on the investigation (arrests) of two high-ranking executives at China United Network Communications Group Co., Ltd. (or China Unicom). According to Epoch Times, China Unicom is associated with Jiang Mianheng, the son of China’s former paramount leader Jiang Zemin.

Sources: Caixin, December 30, 2014. 
http://companies.caixin.com/2014-12-30/100769556.html 

Epoch Times, December 31, 2014.
http://www.epochtimes.com/gb/14/12/31/n4330649.htm