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Xinhua Article on China’s Current Manufacturing Model

Xinhua published an article on the current manufacturing model in China. The article said that manufacturers do not invest sufficiently in research and development and do not have the urge to transition from a traditional manufacturing company into one that conducts its own technological innovations. Because Chinese manufacturers don’t own the core technology and can only make a small profit, they have lost their competitive advantage in the international market. The article also pointed out that the contribution from China’s scientific research remains low. The rate at which a research concept is actually converted into the final product is at less than 5 percent. At the same time, China is losing most of its elite talent to foreign countries. According to the article, the statistics available during a recent international optoelectronics expo held in Wuhan City suggested that 77 percent of the world’s cell phones are made in China each year. However, China only owns less than 3 percent of the chip technology. Therefore it has to spend over US$200 billion a year on cell phone chip imports.

Source: Xinhua, November 10, 2014
http://news.xinhuanet.com/info/2014-11/10/c_133778091.htm

People’s Daily: What Does China Expect to Get from Xi-Obama Meeting during APEC?

Ahead of the meeting between the Sino-U.S. heads, Chairman Xi Jinping and President Barack Obama, during the APEC meeting in Beijing, People’s Daily (overseas edition) published an opinion article commenting on what China would like to see from the meeting. The article was titled, “What Does the World Expect from Xi Jinping and Obama’s Meeting [during APEC]?” 

The article stated that the first Xi and Obama meeting last June in California set the tone for the development of Sino-U.S. relations. One year later, both countries have made new progress in Sino-U.S. cooperation in a number of fields. At the same time, there is no denying that the U.S. has digressed from the direction set in the first meeting. Some remarks that the U.S. made have not had the right tone. The road leading to great power relations between the two countries has hit some bumps. Pragmatic cooperation between the two countries has increased. However, there are danger signs that mutual strategic trust is decreasing instead of increasing. 

The article stressed that during the remainder of Obama’s term as President, Sino-U.S. relations need to adjust to ensure that both sides have better control of their differences and make big efforts to allow the two sides to have more sincere cooperation and less suspicion. 

The article also stressed that the international community looks forward to Sino-U.S. relations continuing to improve and develop. Because China and the United States are countries with huge body masses, not only will cooperation benefit them while confrontation will hurt both countries, but also, regarding other countries, better Sino-U.S. cooperation will be a booster and stabilizer for world peace; otherwise the world will not have peace. 

Source: People’s Daily, November 7, 2014 
http://cpc.people.com.cn/pinglun/n/2014/1105/c78779-25977571.html

Disasters in October Caused Direct Economic Losses of 8.1 Billion Yuan

On November 6, the Ministry of Civil Affairs released information explaining that, in the month of October, the occurrence of a number of calamities resulted in direct economic losses of more than 8.1 billion yuan (US$1.33 billion). The disasters in October consisted primarily of earthquakes, flooding in the south, and snow in the northeast. The disasters impacted over 3.25 million people in 21 provinces and resulted in direct economic losses of 8.1 billion yuan. During the disasters, over 8,000 houses and buildings collapsed and an additional 179,000 houses and buildings suffered different degrees of damage. A total of 3,527,000 hectares of crops were damaged, while 421,000 hectares of crops were totally destroyed. 

Source: Ministry of Civil Affairs, November 6, 2014
http://www.mca.gov.cn/article/zwgk/mzyw/201411/20141100723376.shtml

China’s CPI Growth Continues to Slow Down

Economic Information Daily reported that the anticipated growth of the Consumer Price Index (CPI) in October will reach a new low of 1.4 percent. It is likely that the 1.6 percent growth earlier, which was the new low for the last 56 months, had not bottomed out. Estimates for the CPI growth for October came in at 1.4 percent. Analysts believe that the consecutive decline in the CPI monthly growth is indicative of the deepening pressure from the deflation in the world economy. The sharp slowdown in the CPI and PPI growth requires further relaxation of China’s monetary policy.

“We cannot supply a simple explanation of the decline using numbers alone. The real problem is that the factors causing the decline are very complex, including expansionary macroeconomic policies, rising costs amid economic growth, dependence on foreign raw materials, and other factors. These factors are structural and deep-rooted. They cannot be resolved using short-term macroeconomic policy.” 

Source: Economic Information Daily reprinted by Xinhua, November 7, 2014 
http://news.xinhuanet.com/2014-11/07/c_127187247.htm

China to Build High-speed Rail in Mexico

On November 4, Xinhua reported that the Mexican Transportation & Communications Ministry announced that an international consortium led by China’s state giant China Railway Construction Corporation (CRCC) won the bid to build Mexico’s first high-speed rail connecting the capital, Mexico City, with Queretaro. According to Xinhua, this will be the very first 300 kph overseas high-speed rail that is designed and constructed by China, adopting Chinese standards and equipment.
This is Mexico’s largest infrastructure project so far. The high-speed rail connecting Mexico City and Queretaro will be 210 kilometers in length, with a designed speed of 300 kph. The project is planned to be finished within 40 months, with an additional 60-month period of operation maintenance and technical services. The contract amount is US$4.4 billion. The consortium led by CRCC will undertake the design, construction, equipment manufacturing, installation and testing, and maintenance services.
At present, CRCC’s international operations reach 77 countries and regions. The first quarters of 2014 saw new overseas contracts of 114.7 billion yuan (US$18.8 billion), a year-over-year increase of 243.99 percent. The CRCC-built Turkish high-speed rail between the capital city Ankara and the largest city Istanbul was put into operation this year.
Source: Xinhua, November 4, 2014
http://news.xinhuanet.com/politics/2014-11/04/c_1113103242.htm

Seventy Percent of Coal Companies in the Red; Inventory Hits 400 Million Tons

On November 5, 2014, the 21st Century Business Herald reported that, at 400 million metric tons, the inventory of coal in 2014 has hit a record high in China. Seventy percent of coal companies are in the red. 

At a November 4 press conference, Song Yuanming, Deputy Director of the State Administration of the Coal Mine Safety Supervision Bureau, stated that there is a serious oversupply of coal on the market. 
According to statistics, 23 State-owned companies that account for 76.7 percent of the 30 publicly listed coal companies saw their profits slashed in the third quarter. The industry wide decline was, on average, 67 percent. On October 17, the China National Coal Association released information that 70 percent of all coal companies in China are losing money. 
The earnings for one metric ton vary between a profit of six yuan and a loss of over 20 yuan. The coal price index of 136.3 for the second half of 2014 reflects a 38.9 percent or 86.7 point decline from its peak in July 2008. Experts expressed that the coal inventory level in 2014 will exceed 400 million metric tons, hitting a record high in history. In 2009, the coal inventory level was 50 million metric tons. 
Source: 21st Century Business Herald, November 5, 2014 
http://money.21cbh.com/2014/11-5/zNMDA0MDRfMTMzMzIzNA.html

Xinhua: Xi Jinping’s Instructions on Political Work in the Military

Xinhua published a lengthy report, summarizing the instructions that Xi Jinping, Chairman of China’s Central Military Commission, gave on the political work in the military. Improving the military’s political work is a key step in the overall theme of "building a strong army."

The article had three major sections, titled, "The goal of building a strong army requires applying strong political work in the military," "Promote strong political work in the military," and "Inspire and motivate soldiers using [Xi’s] own acts."

The article stated, "There are thousands of approaches to accomplishing the goal of developing a strong army, but the greatest one is to ensure resolutely that the military follows the [Chinese Communist] Party’s direction." In late 2012, Xi pointed out, "[We] must adhere to developing the army in ideological and political areas, adhere to the fundamental principle and system that the Party has absolute leadership over the military, and ensure the military is absolutely loyal, absolutely pure, and absolutely reliable."

It listed several approaches to developing the Party’s control over the military. "In peacetime, it should test whether the military adheres to the Party’s leadership. The key observation is whether it implements firmly, effectively, and seriously the directives of the Party’s Central Committee and Party’s Central Military Commission."

Source: Xinhua, November 3, 2014.
http://news.xinhuanet.com/politics/2014-11/03/c_1113098221.htm

China’s High Rank Military Official: Obey Orders from Chairman Xi

Xu Qiliang, the Vice chairman of the Central Military Commission of the Chinese Communist Party wrote an article which Xinhua republished on November 4, 2014, titled, “Hostile Forces Attempt to Pull Our Army Away from the Party’s Banner.” Earlier, People’s Daily published his original article with a different title, “Further Promote the Rule of Law in the Army and Strictly Govern the Army (Study and Implement the spirit of the Fourth Plenary Session of the 18th CCP Central Committee). The article stated, “(China) must adhere to the Party’s absolute leadership over the armed forces, which is the core of the rule of law and a fundamental requirement.” (China) must not copy Western models to build and govern the army. “Nationalization of the Military Army” must be criticized clearly to ensure the principle that the Party commands the gun.

The article stressed the Central Military Commission Chairman Xi’s leadership position in the army. “(We) must ensure that all army personnel across the country obey the orders from the CCP Central Committee, the Central Military Commission, and Chairman Xi.”

Source: Xinhua, November 4, 2014
http://news.xinhuanet.com/politics/2014-11/04/c_127174438.htm