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Huanqiu: American Hegemony’s Biggest Threat to China is the Americanization of China

On May 26, 2014, Huanqiu published a commentary titled “Issues of China’s ‘De-Americanization.’” According to the article, American hegemony’s biggest threat to China is the Americanization of China. The purpose of “‘De-Americanization’ is to get rid of American centrism.” The trilogy of "De-Americanization" is to “let China be China, let Asia be Asia, and let the world be the world.”

"Let China be China" refers to the point that the "China Dream could be a nightmare for Americans," if China cannot handle well the environmental challenges posed by economic development. However, "if China can successfully achieve that, China will create a new civilization of sustainable development for human beings. China will then become a country that can lead the world." "This is what Obama failed to realize."

"Let Asia be Asia" is in response the dilemma that "Asian countries rely on China economically and rely on the U.S. for security issues." "This is why the U.S. is ‘returning to Asia.’ Under the banner of the TPP, the U.S. expects that Asian countries will rely on the U.S. for both economic and security matters." As a solution, "China’s Communist Party Chair, Xi Jinping, proposed at the 4th CICA Summit in Shanghai that ‘Asian people should, ultimately, handle Asian issues and the Asian people should ultimately safeguard Asia’s security.’"

"Let the world be the world" is the effort of China to "make the West the West and reduce universal values back to Western values." To achieve this, China has been working with Russia, the SCO, ASEAN, and the BRIC countries (Brazil, Russia, India and China) to promote a "diversified world development model and democratic international relations." Specific efforts include "condemning Japan for challenging and undermining the post WWII international order," "internationalization of the Chinese currency," "the twenty-first Century Maritime Silk Road," and "the Silk Road Economic Belt."

Source: Huanqiu, May 26, 2014
http://opinion.huanqiu.com/opinion_world/2014-05/5005164.html

China Daily: China To Allow Ten Provinces and Cities to Issue Bonds

China Daily recently reported that China is planning that, later this year, the first group of ten provinces and cities will be allowed to issue their own bonds. The bonds will be modeled after the “Western municipal bonds.” The plan includes Zhejiang, Jiangsu, Shandong, Guangdong and two other less-developed provinces. It also includes the cities of Beijing, Shanghai, Shenzhen, and another coastal city. The report estimated that the announcement would be made near the end of May and that the bond issuance might happen in July. Currently, China’s local governments are not allowed to issue bonds directly, at least not officially. The new plan will also include a rating system for the local bonds. However all these are still pending approval of the National People’s Congress (NPC). The scale of this first wave of local bonds is still unclear.
 
Source: China Daily, May 19, 2014
http://caijing.chinadaily.com.cn/2014-05/19/content_17518160.htm

Xi Jinping: Pushing China-Iran Friendly Cooperation Forward

The Chinese Central Government Official Site (gov.cn) recently reported that Chinese President Xi Jinping met with Iranian President Rohani in Shanghai on May 22. At the meeting, both Presidents agreed to work closely together to push forward broader cooperation in a number of areas. Xi Jinping emphasized that China is willing to make continued contributions towards a comprehensive and proper resolution of the Iranian nuclear issue. Both sides expected an expansion of cooperation in trade, energy, and transportation infrastructure areas, as well as in anti-terrorism and anti-extremist activities. Xi expressed China’s respect for Iran’s right to the peaceful usage of nuclear energy. He also offered to play a “constructive role” in the peaceful negotiation process. President Rohani expressed his appreciation and welcomed China’s continued positive help.
Source: Chinese Central Government Official Site, May 22, 2014
http://www.gov.cn/xinwen/2014-05/22/content_2684906.htm

China and Russia Speed up Settlements Using RMB and Ruble Directly

Well-known Chinese news site Netease recently reported that China and Russia signed a series of agreements in the financial area during the presidential summit on May 20 and 21. One of the agreements allows the rapid expansion of direct use of the currencies of the two countries for financial settlements. Today, China-Russia trade settlements are largely done in U.S. Dollars. Similar experiments started in 2008 on a very small scale in some areas on both sides of the China-Russia border. The two nations have decided to expand the use of their native currencies significantly instead of using the U.S. Dollar, especially after the Ukraine incident. The recent China-Russia announcement delivered at the Summit set a goal of a total trade volume of US$100 billion in 2015, and US$200 billion before 2020. However, the new agreement still faces challenges. For example the Chinese RMB is still not a freely exchangeable currency, while the Russian Ruble does not have a stable valuation in the global market. More improvements on both sides will be required.
Source: Netease, May 22, 2014
http://money.163.com/14/0522/02/9SQKCS2F00253B0H.html

China Youth Daily: Calmly Deal with U.S.’s New Assault in Cybersecurity

Shen Yi, a professor of international politics at Fudan University, wrote an opinion article about how to deal with the U.S.’s recent cyber espionage charge against five Chinese military officers. Shen offered three guidelines that China should take to respond to the U.S.’s new round of cybersecurity offensives against China: 

“First, China needs to stay calm, based on moderation and on an accurate judgment of its own national interests. It should comprehensively use a number of different strategies in response to the United States’ new offensives in cyber security. … China must be fully prepared on two sides. On the one hand, it must prepare enough short-term measures so that U.S. companies can pay clear, palpable, high-enough prices for Washington’s irresponsible actions. The goal is to let Washington actively come back to a dialogue to resolve the issue and to revoke these absurd [charges]. On the other hand, China cannot shake the strategic judgment and strategic direction. We must stick to our own path and not dance [in tune with] the U.S. strategic tempo.” 
“Second, from the perspective of China’s own national cybersecurity strategy, the United States’ surprise attack is both a challenge and more of an opportunity. … Today, the U.S. government’s move clearly and explicitly tells China the urgency of developing its own comprehensive national cybersecurity capabilities. … To deal with such threats in cyberspace, China must, under the framework of overall national security, promote the development of critical network security capabilities and cultivate a large number of network security enterprises with considerable potential. From mechanical design, strategic planning, and policy development, China should learn how to compete and cooperate with the United States in the realm of global cyberspace.”   

“Third, China must always be aware of its special nature as an emerging great power. Facing the pressure from the United States, China can neither cut off its contact with cyberspace, or replicate the strategy of the U.S. and thus fall into the typical security dilemma. … In the long run, in the transition of global cyberspace governance, China must put forward a strategic proposal on behalf of the emerging powers and developing countries.” 

Source: China Youth Daily, May 20, 2014 
http://news.youth.cn/gn/201405/t20140520_5228883.htm http://opinion.people.com.cn/n/2014/0520/c1003-25042706.html

Business Bankruptcy Filings Escalate

Economic Information, a publication under Xinhua, reported that bankruptcies are on the rise and banks have tightened credit, adding fuel to the economic downturn. 

A total of 346 bankruptcy cases have been filed in the Courts in Zhejiang Province. This represents an increase of 145.07 percent compared to the same period last year. The debt of these bankrupt companies totals more than 159.5 billion yuan. This is a six fold increase compared to the debt in 2012, which was 24.3 billion yuan. 
Of the 346 cases, 198 are from companies in Wenzhou City. Closures of the companies have caused a domino effect. Among the waves of corporate bankruptcies, over 90 percent of Wenzhou credit guarantee companies have gone belly up. Wenzhou Credit Guarantee Investment Co., Ltd., the largest credit guarantee company closed its doors in July 2013. 

Banks have ceased making corporate loans and have started asking for an accelerated payment of principal on outstanding loans. In Hangzhou City, Zhejiang Province, the default of one of the largest companies affected more than 600 companies because they provided credit guarantees to each other. In Xiaoshan, and also in Zhenjiang Province, the insolvency of one company adversely impacted over 300 other companies due to the credit guarantees that they provided to each other. 
Source: Economic Information reprinted by State’s China Radio International, May 23, 2014 http://gb.cri.cn/44571/2014/05/23/3005s4552048.htm

Ten Local Governments Allowed to Issue Bonds to Repay Debts

According to China’s Ministry of Finance, the State Council has approved 10 local governments as part of a pilot program to give them the authority to issue municipal bonds and be responsible for the repayment of their debts. 

Prior to the pilot program, the central government was responsible for the payments of interest and principal on the bonds that the local governments issued. These payments were then deducted from the funds the central government allocated to the local governments. 
The 10 local governments are Shanghai, Zhenjiang Province, Guangdong Province, Shenzhen, Jiangsu Province, Shandong Province, Beijing, Jiangxi Province, Ningxia Autonomous Region and Qingdao. Of these 10 governments, Ningxia and Jiangxi are considered to have a strong solvency. Their 2013 debt ratios were 50.5 percent and 68 percent respectively. The estimated value of the bonds may reach 150 billion yuan and they may mature in five, seven, and 10 years. These bonds will become part of China’s first-ever municipal bond market. 
Source: China Securities, May 21, 2014. 
http://www.cs.com.cn/zq/zqxw/201405/t20140522_4397444.html

U.S. Cyber Crime Charges Enrage Beijing

In an angry response to the U.S. cyber-spying charges against members of a secretive Chinese military unit, China’s official media hurled back extensive counter-charges.
Cui Tiankai, China’s Ambassador to the United States, responded, "China is the victim of cyber-attacks. There have been massive U.S. originated cyber invasions and surveillance into Chinese government agencies, businesses, universities, and even individuals." "China has decided to suspend its activities with the China-U.S. Internet working group. The U.S. should immediately correct its mistake and withdraw from this so-called prosecution." [1]
One opinion article said, "In fact the U.S. is the most ‘qualified’ defendant. This also reminds the world’s countries that the Internet can no longer be dominated by American hegemony." "The U.S. is one of the few that control the main root server and secondary root servers of the Internet. It also exerts actual control over the allocation of domain names. Holding the global Internet infrastructure resources and core technologies, the U.S. was the first to build a cyber-warfare unit and to include ‘network-centric warfare’ as part of the nation’s ‘core capabilities.’ The U.S. set off an arms race in cyberspace and has its ears and eyes on cyber surveillance reaching almost every insignificant corner around the world. It has always been the hegemon in cyberspace. They are the thieves moving everywhere; they are the most brazen robbers." [2]
Another commentary criticized the U.S. government, "The U.S. government uses two excuses: the so-called separation of powers and that ‘the government cannot interfere with legislative and journalistic independence,’ in order to connive with Congress, the media, and business’s so it can constantly hype up the ‘Chinese hacker threat.’" [3]
One University scholar wrote an article on People’s Daily. "This outrageous act of the U.S. only proves its imperialist logic of ‘might is right’." "Today, the U.S. is not the only country that has advanced monitoring technologies. Countries that are able to detect attacks against their own network are everywhere. With the U.S. pressing charges against other country’s military officers without credible evidence, other countries will have a more reasonable basis to prosecute the chief of the U.S. National Security Agency and its superiors. As long as the U.S. does not stop breaching other countries’ cyber boundaries, it is not qualified to require other countries not to implement network defense or even counterattacks." [4]
Source: [1] Guangming Daily, May 22, 2014
http://news.gmw.cn/2014-05/22/content_11385205.htm
[2] People’s Daily, May 22, 2014
http://opinion.people.com.cn/n/2014/0522/c1003-25048271.html
[3] China.com, May 21, 2014
http://opinion.china.com.cn/opinion_96_99396.html
[4] People’s Daily, May 22, 2014
http://opinion.people.com.cn/n/2014/0522/c1003-25050385.html