Chinascope – Page 778

China Review News Agency: China Is Not Ready to Fully Liberate the RMB Exchange Rate in the Market

On March 26, 2014, China Review News Agency published an article on the abnormally sharp decline in the RMB exchange rate this year. In 2012 and 2013, China reduced its goal for maintaining the growth of GDP down from eight percent to seven percent. Last year, as a result, import and export businesses started to slow down. In the past, the appreciation of the RMB (the Chinese yuan) exchange rate resulted from the depreciation of the U.S. dollar. With the recovery of the U.S. economy and the appreciation of the U.S. dollar, the depreciation of the RMB exchange rate has become the trend. Since 2013, a large-scale cross-border capital flow in and out of China has been an indisputable fact. Starting on March 17, 2014, the People’s Bank of China widened the USDCNY trading band to +/-2 percent from +/-1 percent. Thus a larger-scale cross-border capital flow should happen, which may result in a turbulent foreign exchange market and volatile financial markets. Although China holds US$ 3.8 trillion in foreign exchange reserves, they are very limited as China relies more and more on importing fundamental resources from abroad.

The article concluded that excess promotion of the market-determined exchange rate mechanism may intensify the fluctuations of the interest rate in China and not benefit the stability of financial markets. China is not ready to liberate the RMB exchange rate in the market fully because the RMB interest rate and China’s price system are not market-oriented.

Source: China Review News Agency, March 26, 2014
http://hk.crntt.com/doc/1030/9/4/6/103094658.html?coluid=53&kindid=0&docid=103094658&mdate=0326071815

Briefings | | March 26, 2014 | Economy/Resources

People’s Daily: Russian Banks May Switch to UnionPay

People’s Daily recently reported that Anatoly Aksakov, Deputy Chairman of the Russian State Duma Financial Markets Committee, suggested Russian banks under U.S. and European sanction may switch to China’s UnionPay credit card system, replacing the Western payment networks such as Visa and MasterCard. UnionPay is the only domestic bank card organization in China. Established in 2002, UnionPay has grown into the second largest payment network after Visa. UnionPay is now accepted in 141 countries in the world, including United States. Visa and MasterCard stopped the payment services for two Russian banks after the sanctions imposed on Russia after its invasion of Crimea. Aksakov said that even Iran has survived the financial sanctions. Russia’s participation in UnionPay will only hurt Visa and MasterCard.

Source: People’s Daily, March 21, 2014

http://world.people.com.cn/n/2014/0321/c1002-24705197.html

Briefings | | March 25, 2014 | Geo-Strategic Trend

CRN: The U.S. May Encourage Japan’s Aggressiveness

China Review News (CRN) recently published a commentary analyzing Washington’s possible new strategy after the on-going conflict in Crimea. The commentator suggested that the United States is facing an inability to maintain both the new European frontline, which is threatened by the Russian moves, and the existing plan to “Return to the Pacific” at the same time. The U.S. defense budget simply cannot sustain two large overseas spending initiatives. The author expressed the belief that the U.S. core national interests are under attack due to the recent Crimea conflict because it impacts the confidence of all other new European allies from the former Soviet camp. If the “Return to Europe” strategy gains traction, the United States won’t be able to maintain its level of involvement in the Pacific region, which, the article concluded, will result in the U.S. encouraging Japan to play a much more important role.

Source: China Review News, March 20, 2014

http://hk.crntt.com/doc/1030/8/3/7/103083763.html?coluid=218&kindid=0&docid=103083763&mdate=0320111519

Briefings | | March 25, 2014 | Geo-Strategic Trend

Central Bank: Sixty Percent of the Residents Believe the Housing Prices “Unacceptably High”

In the first quarter of 2014, the People’s Bank of China conducted a survey of twenty thousand urban depositors in 50 cities. The results showed that 64.3 percent of the residents believe that current housing prices are "unacceptably high," 33 percent believe that current prices are "acceptable," while only 2.7 percent of the residents believe they are "satisfactory." Within the next three months, 15 percent of residents will be ready to buy a housing unit. This figure is 2.7 percent higher than the previous quarter and 0.2 percent higher than the same period last year.

The report showed that 55.8 percent of residents believe that the general price level is "unacceptably high." 32.6 percent of the population expected the price level to continue to climb, 48.5 percent expected the price level to remain "basically unchanged."

Source: Xinhua, March 22, 2014
http://news.xinhuanet.com/2014-03/22/c_119890856.htm

Briefings | | March 24, 2014 | Economy/Resources

Xinjiang: Crackdown on Terrorism and Religious Extremism

Recently, the Xinjiang Uygur Autonomous Region’s Public Security authorities held a video conference on cracking down on crimes of religious extremism.

Zhu Changjie, Vice-Chairman of the Xinjiang Autonomous Region, Chinese Communist Party secretary, and the head of the Public Security authorities, demanded a "profound understanding of importance and urgency of combatting crimes of religious extremism at all levels."

The Autonomous Region vowed it would strike hard on violent terrorist and religious extremist criminal activities, while at the same time focusing on prevention and reactions to emergencies.

Since February 10, Xinjiang’s public security has cracked several related cases, destroyed a number of gangs, and arrested a number of suspects.

Source: Guangming Daily, March 24, 2014
http://politics.gmw.cn/2014-03/24/content_10772936.htm

Briefings | | March 24, 2014 | Government/Politics

PLA Daily: Learn the Lessons from First Sino-Japanese War in 1894

People’s Liberation Army Daily recently published a series of commentaries about the 1894 Sino-Japanese War that took place 120 years ago, giving an unusually objective evaluation of the Japanese military reform at the end of 19th century. That interaction prompted the continuous bloody conflicts between the two neighboring countries. The commentaries called for the People’s Liberation Army commanders to study the humiliating defeat of the Qing Empire at the hands of the Japanese. Analysts believe that the move is to warn of the effect of corruption within the military.

The commentaries said that the discipline and dedication of the Japanese army enabled them to defeat the Qing Dynasty’s Pei-yang Fleet.

One article stated: "(The) Chinese navy’s equipment, including the warships’ tonnage and the fire power, were indeed no less than those of the Japanese navy. … Quite a number of officers and even commanding officers of the fleet fostered ridiculous arrogance. Foreign military professionals who were paid and invited at a high price to instruct the navy were often subjected to ridicule and mockery. That was in stark contrast to the spirit of tireless learning of the Japanese Navy."

Analysts say these articles aimed to reveal the following facts: a lot of challenges that the Qing Dynasty’s army faced are the same as those the PLA battles today: nepotism, factional strife, and corruption.

A military expert at the Shanghai University of Political Science and Law said, "If such phenomena continue, the PLA is bound to be defeated if a military conflict between China and Japan were to occur."

Tensions between China and Japan have deteriorated to the worst level since the end of the Cold War. Both sides repeatedly send planes and ships near the Diaoyu Islands in the East China Sea.

One article on PLA Daily stated, "In a sense, the 1894 War has not ended."

One retired officer in Beijing said, "What our army is facing is clearly what the Qing government failed to deal with. This is exactly the reason why Chairman Xi Jinping urged the PLA senior officers to get rid of their stereotyped thinking."

The Pei-yang Fleet was a result of the Qing Dynasty "Self-Strengthening Movement." On the eve of the Sino-Japanese naval battle in 1894, the Pei-yang Fleet had about the same strength as the Japanese Navy in military hardware, but it was still defeated.

Source: Xinhua, March 24, 2014
http://news.xinhuanet.com/2014-03/24/c_119903160.htm

Briefings | | March 24, 2014 | Defense/Military

Huanqiu: U.S. May Be Forced to “Return” to Europe

Hong Kong Tianda Institute researcher Wu Junfei wrote a commentary article that Huanqiu published about how China should make use of the strategic opportunity of the U.S.-Russian conflict over the Ukraine. Below is an excerpt from the article:

The rapid evolution of the situation in Ukraine has given a heavy blow to Washington’s foreign policy. Since the Obama administration took office, the U.S. has changed from a strategic expansion to a strategic contraction due to the divisions among international powers and economic reality. Being unable to handle both East Asia and Europe simultaneously, the U.S. has loosened its restraint on Russia and has returned to Asia with major energy to deal with the impact of China’s rise.

After the Crimea voted to join Russia, although the U.S. and Russia may not directly go to war, Washington will have to revive the U.S. deterrence in Europe and adopt a tough policy on Russia. It will do so in order to rebuild the balance of power and avoid the quick collapse of its superpower status.

If the United States “returns to Europe” and is forced to institute a tough policy against Russia, China will have the opportunity to gain a brief period for diplomatic strategic opportunities. Facing the restructuring of the world strategy game, China should focus on dissolving Washington’s aggressive "returning to Asia" strategy in order to win more time for its peaceful rise. Therefore, China should, under the grand principle of neutrality, support Russia’s strategic offensive posture in Europe, forcing Washington to reduce its military presence in Asia, thus reducing the strategic pressure China faces in the western Pacific.　

After the Ukraine crisis, China had better stay on the sidelines watching United States and Russia fight against each other. If Washington is busy with other regional conflicts, it is a rare ideal situation for the rise of China. China can actively induce conflict, thus shifting the U.S.’s military delivery and attention on China. At the same time, China may provide a helping hand to Russia for its challenge to U.S. hegemony. This is the internal logic of the quasi-alliance between China and Russia. China’s handling of the Snowden event reflected Chinese decision-makers recognition of this strategy.

Source: Huanqiu, March 20, 2014

http://mil.huanqiu.com/observation/2014-03/4917631.html

Briefings | | March 21, 2014 | US-China Relations

Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized

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

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