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Head of State Oceanic Administration: Marine Resources Plundered; Multiple Conflicts

In a recent talk, Liu Cigui, the Administrator of China’s State Oceanic Administration, discussed the severe situation of safeguarding maritime rights and interests in China’s surrounding waters: marine resources have been plundered; waters have been divided up; reefs have been occupied; the security of strategic passages has been threatened; and conflict has broken out in multiple locations.

Liu said that the ocean is an important platform for international political, economic, military, and diplomatic cooperation and competition. The ocean is in an even more important position for the national strategy of coastal countries. "The State Oceanic Administration, confronted by various maritime conflicts such as Japan’s so-called ‘nationalization’ of the Diaoyu Islands and the Philippines Ayungin Reef incident, has taken a series of counter-measures and achieved initial results."

Liu added that, in accordance with the "United Nations Convention on the Law of the Sea," China has extensive strategic interests and legitimate rights in the open seas, the ocean, the international seabed, and the North and South Poles.

Source: China News, April 11, 2014
http://www.chinanews.com/gn/2014/04-11/6055889.shtml

China’s State Media Praise the Military’s Strong Showing to the U.S. Defense Secretary

In the meeting with U.S. Defense Secretary Chuck Hagel, Chinese Military Committee Vice Chairman Fan Changlong directly expressed how upset China was with the unfriendly remarks Hagel made ahead of his visit. China’s state media Global Times published an editorial praising the military for showing strength to the U.S. Defense Secretary. The article stated: 

“China’s military was very frank in showing its differences with the U.S. Previously this was quite rare. This change is a manifestation of the Chinese military’s confidence. It is to showcase the real China in an internationally popular manner.” 
“When having a conflict with someone, China does not resort to war, but Japan often takes out the treaty of the U.S.-Japan alliance [as a weapon]. It constantly preaches that it will use force against the Chinese aircraft ‘invading’ the Diaoyu Islands. The Philippines also shows off its U.S. military protection. From time to time, the U.S. hints that it might have military involvement in the Island conflicts that Japan and the Philippines are having with China. In such instances, the Chinese People’s Liberation Army reaffirms the will and ability to defend China’s territorial sovereignty. It is not quite normal.” 
“Facing such a large country as China, the Philippines dares to play the hooligan by setting up an old warship on the beach at Second Thomas Shoal. This is by no means normal. Manila misjudged China’s tolerance. If such misjudgment spreads out to some extent, it will become a baseline for an understanding of China from the outside. China must clear up this false impression and try to achieve its goal by using language. If language is not enough, it must be coupled with action.” 

“If China’s effort to dispel such outsider’s false judgments of China implies risk, then the United States, Japan and the Philippines will need to take the risk together with China.” 

Source: Global Times, April 9, 2014 
http://military.people.com.cn/n/2014/0409/c1011-24855505.html http://opinion.huanqiu.com/editorial/2014-04/4960368.html

Financial Trouble Looming as Demand for Coal Continues to Decline

According to Securities Daily, as a result of China’s economic downturn and the severe drop in the demand for coal, coal prices have continued to fall. This factor, along with an increase in coal imports, has resulted in a decline in the price of domestic coal and a serious excessive capacity. In Erdos, Inner Mongolia which is highly dependent on the development of coal resources, the daily sales of coal from some coal mines is less than one-tenth of the normal amount of sales. The slump in the coal industry is seriously affecting the revenue from real estate and hotels, as well as tax revenue. The tax revenue from one coal district declined from 200 million yuan per month to 20 million per month. 

The demand for coal has fallen drastically. With a few exceptions for several major steel mills, all the steel mills in Tangshang, Hebei Province are shutting down their production. All cement plants within 100 miles of Beijing are also closing down. 

Source: Securities Daily, April 10, 2014 
http://zqrb.ccstock.cn/html/2014-04/10/content_412087.htm

Chinese Investment in Australia

In March of 2014, KPMG and the University of Sydney’s China Study Center jointly published the report, "Demystifying Chinese Investment in Australia." The report explores the recent direction of Chinese investment in Australia.

In 2013, Australia lost to the United States as the top destination for Chinese outbound direct investment. The total value of Chinese investments in Australia from 2005 to 2013 was $57,250 million, second to the U.S., which was $59,900 million.

Although Chinese investments in Australia registered a 10 percent decrease in 2013 as compared to 2012, there was a clear shift toward larger numbers of small to medium sized deals having larger shares of private Chinese investors, particularly in the commercial real estate sector.

For the first time, Chinese investments in Australia were not concentrated in the mining sector. Instead the power transmission industry dominated with the State Grid deal accounting for 40 percent of the total investment value in 2013, followed by mining (24 percent), gas (21 percent), commercial real estate (14 percent) and agribusiness (1 percent).

Source: "Demystifying Chinese Investment in Australia," March 2014 Update.
http://www.kpmg.com/au/en/issuesandinsights/articlespublications/china-insights/pages/demystifying-chinese-investment-in-australia-march-2014.aspx

Fan Changlong to Chuck Hagel: Your Remarks in Japan Really Upset the Chinese People

While meeting U.S. Secretary of Defense Chuck Hagel, China Central Military Committee Vice Chairman Fan Changlong shared his response to Secretary Hagel’s recent remarks made in Japan:

Secretary Hagel recently made some remarks. We, the Chinese people, are upset [with those remarks]. On the Diaoyu Islands issue, the U.S. has repeatedly said that the U.S. does not choose sides. It is puzzling that Mr. Secretary has publicly welcomed Japan to lift the ban on collective self-defense and has encouraged and supported Japan. It is the Philippines that invaded the South China Sea islands and reefs, but Mr. Secretary defends the Philippines and accuses China. 
Now there are people provoking us in the areas surroundings us. … The Chinese army is prepared to face all kinds of threats and challenges at any time. We will be ready at the first call to fight and [we will] win any battle. 

Source: People’s Daily, April 9, 2014 
http://world.people.com.cn/n/2014/0409/c1002-24855428.html

Sporting Goods Store Closures Continue with High Inventories

During the economic downturn in China, stores for sporting goods with brand names faced their second round of closures in two years. In 2013, six well-known brand name sporting goods closed over 3,000 of their stores; inventories reached 3.1 billion yuan in 2013. 

In 2013, Lining, Anta, Peak, 361 Degrees, China Dongxiang, and Xtep closed over 3,000 stores. 361 Degrees was hit the hardest with 783 closures. Xtep shut down 150 stores and was the least affected brand. Back in 2012, during the first round of closures, Lining and Peak alone closed over 1,000 stores.
The inventory for all six brands remained high, hitting 3.1 billion yuan in 2013: Lining (942 million), Anta (689 million), Peak (366 million), 361 Degrees (409 million), China Dongxiang (183 million) and Xtep (537 million). 
Sources: 
Sina.com, April 8, 2014 
http://finance.sina.com.cn/stock/hkstock/marketalerts/20140408/145518734884.shtml 
Tencent, April 8, 2014 
 http://finance.qq.com/a/20140408/014472.htm

Two Constraints to Investment in Foreign Countries: Money and Insurance

On April 4, 2014, www.cnstock.com published an article on China’s overseas investments. According to the article, the amount of China’s overseas investments accounted for only 6.3 percent of global cross-border investment, while China’s principal assets accounted for only 2.3 percent of the world’s investments. Although both state-owned or private enterprises all have a strong desire to invest in foreign countries, two major constraints prevent these Chinese enterprises from increasing their investments: the difficulty in obtaining financing and in obtaining insurance to cover their overseas investments.

Source: www.cnstock.com, April 4, 2014
http://news.cnstock.com/news/sns_jd/201404/2974836.htm

People’s Daily Overseas Edition: Xi Jinping Explained Why Western-Style Democracy Is Wrong for China

On April 3, 2014, People’s Daily Overseas Edition published an article acclaiming Xi Jinping’s "Socialism Is the Only Way’ speech given in Belgium on April 1, 2014. In his speech, Xi explained that the Chinese people had “experimented with constitutional monarchy, imperial restoration, parliamentarianism, a multi-party system, and presidential government, yet nothing really worked.” “Finally, China took the path of socialism.”

The article further elaborated on Xi’s statement and explained why the Chinese Communist Party must be the only state power in China. According to the article, there is no democracy that is not class bound. Multi-party competition and free elections are games for wealthy people. The article concluded, “We should cherish our existing political system. We cannot irresponsibly conduct "political reform through trial and error."

Source: People’s Daily Overseas Edition, April 3, 2014
http://opinion.haiwainet.cn/n/2014/0403/c353596-20489564.html