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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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Xinhua Commentaries: “Exposing the Three Major Political Deficits of the U.S.”

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The CCP’s Performing Arts Troupes in the U.S.

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Chinese Think Tank: It’s Obvious that U.S. Air-Sea Battle Strategy Is Targeting China

On July 23, the Association of China Strategic Culture Promotion [a “civil” Chinese think tank] issued a "2013 U.S. Military Assessment Report" in Beijing. The report said that the United States plans to develop an "Air-Sea Battle" strategy to meet the challenges of "anti-access and area denial." The report pointed out that "Air-Sea Battle: a military collaboration dealing with the challenge of ‘anti-access and area denial,’" as the first official U.S. document to explain "Air Sea Battle," will have a significant and far-reaching impact in four areas. 

First, it will have an impact on the transformation of the U.S. Army. 
Second, it will damage the Sino-U.S. strategic relationship of mutual trust. According to the analysis in the report, the U. S. “defense strategy guide" clearly stated that China’s rise broke the balance of power in the Asia-Pacific region and the Chinese military’s "anti-access and area denial" capabilities posed a serious threat to the U.S. military. The intention of the American "Air-Sea Battle" against China is very clear. China cannot help but suspect the sincerity of the U.S.’s cooperation and its true strategic intentions. 
Third, it will, under the influence of the overall U.S. military strategy, force its allies to undergo military expansion. 
Fourth, it will eventually have a negative impact on the peace and stability in the Asia-Pacific region. This impact will manifest mainly in the following areas: an increase in the U.S. military deployment in the Asia-Pacific region; the expansion of naval and air bases in Guam, Hawaii, and other places; as well as the conduct of several large-scale multinational military exercises. 

Source: People’s Daily, July 24, 2014 
http://military.people.com.cn/n/2014/0724/c1011-25337744.html

Briefings | | |   US-China Relations

Tough Issues for Balance Sheets of Local Governments

In a recent article in China Finance, which Xinhua then reprinted, Ma Jun, the chief economist for China’s central bank, the Bank of China, wrote about the balance sheets of local governments and related issues. 

In their preliminary work, most of the local governments completed the balance sheets in accordance with generally accepted international principles. Yet, the process also presented problems unique to China in terms of the scope, valuation methods, and accounting standards. Ma stated that in dealing with these issues, one should first consider the major objective for compiling the balance sheets, which is to help evaluate the debt risks that the local governments face and their future ability to repay these debts. 
Specifically, there are three major questions. First, should State-own enterprises be included in the balance sheets and how? Second, should special assets be included in the balance sheets? Special assets include debt-free public infrastructure (such as roads, bridges, and parks), minerals and other natural resources, and cultural assets. Third, should the balance sheets include pension liabilities? 
Source: China Finance reprinted by Xinhua, July 18, 2014 
http://news.xinhuanet.com/fortune/2014-07/18/c_126768371.htm
Briefings | | |   Economy/Resources

Senior Chinese Official on Trial over Election Vote Buying

On July 24, 2014, the Beijing Second Intermediate People’s Court held a public hearing on negligence charges lodged against Tong Mingqian, the former vice chairman of the Chinese People’s Political Consultative Conference of Hunan Province, in relation to a major election fraud scandal. 

During the Hunan provincial elections in 2013, as the Party secretary of Hengyang City in Hunan, Tong "did not carry out his duties properly and he did not take timely and effective measures to investigate and handle cases of bribery that were exposed before and after the election." The 596 officials, as well as the 749 People’s Congress representatives in Hunan, resigned or were dismissed. Of those, 466 were reprimanded or disciplined. The Hunan Provincial Procuratorate Office investigated 68 and 50 of them were later charged. 
Sources: 
Xinhua, July 24, 2014 
http://news.xinhuanet.com/legal/2014-07/24/c_1111781506.htm 
The Central Commission for Discipline Inspection of the Communist Party of China, June 19, 2014 http://www.ccdi.gov.cn/xwyw/201406/t20140619_24314.html
Briefings | | |   Government/Politics

Red Flag Manuscript: Chaos” in Western Democracy

On July 23, Red Flag Manuscript (红旗文稿) published an article, which Qiushi then republished, titled "’Chaos’ in Western Democracy." The following is a translation of some excerpts from the article.
The West, in particular the U.S., emerged as the triumphant side in the post-Cold War world and then promoted the so-called Third Wave of “Democratization” in the world. Twenty some years later, the records of the democracies that the U.S. exported are totally lackluster. In 2012, former U.S. national security adviser and renowned international expert, Zbigniew Brzezinski, when answering reporters’ questions, asked, "Will democracy still be prosperous? It really is a question." Recently, the British magazine the Economist published an article asking, "What’s gone wrong with democracy?" The article pointed out that "democracy’s global advance has come to a halt, and may even have gone into reverse." This statement was spoken loudly in the Western media, causing hot debates and discussions.
First, (in west democracy) it has become a norm to canvass for votes through the use of illegal bribes. Today, the Western democratic rule has developed to such an extreme that votes decide the seats and party politics has become purely electioneering politics. Therefore, a democracy based on parliamentary form has become a democracy of ballots. The ultimate goal of political parties is to court votes. Thus they have become the hostages of votes and votes have become the stepping stones for politician to be elected to “(the emperor’s) palace.” To win more votes, they would do their best to cater to voters in elections, which lead to illegal bribes for votes as a norm. 
Second, the system of representation has incurred a structural imbalance. As the U.S. Democratic and Republican Parties are tit-for-tat in the budget battle, resulting in delays in passing the budget act, and the federal government has to close down its non-core departments and repeat its mistakes of 17 years ago. Since 1977, this is the 18th time the federal government has closed down. From this, we can see there are problems in the three structural features in US politics. First, the US stresses the importance of checks-and-balances of the executive branch and the judicial and legislative branches, including the two major political parties. This results in the fact that the legislative branch ends up solving the executive branch issues. Consequently there is inconsistency and inefficiency in government functioning. Second the impact of interest groups and lobbying groups are increasing, which not only distorts the democratic process, but also erodes the government’s ability to operate effectively. Third, the legislative body is divided into two evenly matched bodies – the House and Senate, and different political parties control each body. Therefore, on the national level, more obstacles (for the government) keep in from acting in accordance with the wishes of the majority.
Third, money is the mother’s milk for "the game of democracy." The West has always preached that Western capitalist democracy is sacred and equal, and that the process is fair. In fact, money, business, media and vested interests groups often manipulate Western-style democracy. It has evolved into a kind of "rich man’s game" and a "democracy of money pockets." Democracy has been reduced to elections, elections to political marketing, and political marketing to the fight for political donations, to electoral strategy and to the fight for PR or shows. 
Fourth, the dissemination of democracy triggers social unrest. The externally existence of Western-style democracy is in the form of expansion and dissemination. In the process of dissemination of Western-style democracy, the Western powers have played a leading role. In March 1990, President George W. Bush proposed in the report of the "National Security Strategy," that one of the main goals of the U.S. in the 1990s was "to foster political freedom, human rights, and democracy" globally. He wanted to extend this democratic trend to the entire African continent. On this basis, the U.S. government announced that its aid to African countries would be pre-conditioned on these countries’ implementation of "multi-party democracy." That is, the US would invariably link its aid to African countries with democracy, in order to blackmail African countries.
We can look at today’s Africa, particularly at the countries that have implemented Western-style democracy like Tunisia and Egypt. These countries all have unbearable political instability, continued war, and conflicts. The ordinary people cannot even have the most basic social stability and a guarantee of a material life, let alone freedom and democracy. We can say that, to some extent, "democratization" has become synonymous with social disorder in these countries. 
In recent years, the global trend of democratic recession has been more obvious in non-Western regions. The introduction of Western values and political systems in these developing countries not only failed to promote the country’s economic development, political stability and social progress, but also caused a mushrooming of political parties, political instability, and social disintegration. A lot of pressing issues related to people’s lives are often put aside because of political strife. Many countries have been pushed into the "quagmire of democracy."
Source: Qiushi, July 23, 2014
http://www.qstheory.cn/dukan/hqwg/2014-07/23/c_1111750512.htm
Briefings | | |   US-China Relations

In the Second Half, China’s Economy Faces Three Big Risks

According to Economic Information Daily [under Xinhua], in the second half, China’s economic performance needs to be alert to the following three risks, as the economy is still facing downward pressure. The first risk is "deflation" in the industrial and manufacturing sectors. As of June this year, China’s PPI showed 28 months of continuous negative growth. The second risk is increased pressure due to the policy adjustments in the real estate market. The adjustments in the real estate market are expected to continue into the second half. The third risk is the number of defaults in market debt. 

Source: Xinhua, July 22, 2014 
http://news.xinhuanet.com/fortune/2014-07/22/c_1111727356.htm
Briefings | | |   Economy/Resources

China’s Junk Bond Crisis Is Looming

On July 22, the Chinese media wallstreetcn.com reported that, with the frequent defaults on debt in China, 2014 is becoming the year of defaults for the Chinese financial market. 

It has been 26 months since June 2012, when the Chinese version of junk bonds (bonds issued by mid and small businesses) were first introduced in the capital market. With a typical two year maturity, 46 junk bonds, with a total value of 4.143 billion yuan (US$670 million) and an average yield of 8.79 percent, are about to reach maturity. 
In April of this year, "13 Zhong Sen" was about to default on 180 million yuan (US$29.05 million) of its interest payments when its guarantor stepped in to commit to making the payments. When it was unable to make payments on its bonds, Zhejiang Huatesi Polymer Technical Co Ltd., the issuer of “12 Huatesi” went bankrupt. The court ordered it to restructure. 
In July, “12 Kim Tae” failed to meet its July 10 obligation to make its principal and interest payments. The issuer of another junk bond “12 Jin BBDO,” with a nne percent yield, is expected to default on the payments of principal and interest due on July 28. Its State-owned guarantor, Tianjin Hi-tech Investment Management Co., Ltd., is in the middle of its own crisis. In 2013, it had issued a guarantee for a total of 7.592 billion yuan (US$1.23 billion), which was 13 times the amount of its security deposits at the bank. 
Source: wallstreetcon.com, July 22, 2014 
http://wallstreetcn.com/node/100649 http://wallstreetcn.com/node/100657
Briefings | | |   Economy/Resources

China Is Developing Special Chinese Discourse System to Promote China around the World

On July 23, 2014, People’s Daily published an article on the development of a “Chinese discourse system.” The 3rd Plenary Session of the 18th Central Committee of the Chinese Communist Party (Nov. 9 to 12, 2013, in Beijing) stressed the need to develop “a discourse system” for foreign affairs and international relations so as to “tell China’s story and spread China’s voice" skillfully.

According to the article, the original Marxism and contemporary Chinese Marxism are the theoretical basis and the guidelines for the development of the Chinese Discourse System. Selected portions of the ancient Chinese culture are the “rich nutritious sources” for the Chinese Discourse System. China’s dream of national rejuvenation (the China Dream) and the practice of socialism with Chinese characteristics are the foundation and root of the Chinese Discourse System.

Source: People’s Daily, July 23, 2014
http://paper.people.com.cn/rmrb/html/2014-07/23/nw.D110000renmrb_20140723_2-07.htm
http://www.qstheory.cn/zhuanqu/zywz/2014-07/23/c_1111749353.htm

Briefings | | |   Government/Politics

The CCP Is Worried about Chinese Intellectuals’ Distrust of China’s Political System

On July 22, 2014, Qiushi Theory, a periodical on political theory run by the Chinese Communist Party Central Party School and the CCP Central Committee, criticized Chinese intellectuals in China’s academia (for example in the fields of economics, law, political science, sociology, and international relations) for their agreement with Western constitutional democracy and universal values. The article asserted that those intellectuals do not have confidence in China’s socialist road and China’s political system because they do not have a sufficient understanding of China and Marxism. However, China needs a large group of researchers to develop a Chinese Discourse System in order to tell China’s stories and spread China’s voice around the world. Therefore a wake-up call is needed to awaken most of the intellectuals in the ideological field and call on them to summarize, categorize, and beautify the “Chinese style discourse system” so as to spread it among the international mainstream discourse system and eventually turn it into the authoritative national voice of China.

Source: Qiushi Theory, July 22, 2014
http://www.qstheory.cn/wp/2014-07/22/c_1111732295.htm

Briefings | | |   Government/Politics