Chinascope – Page 796

CRN: China’s Macroeconomy Faces Three Major Risks

China Review News (CRN) recently published a commentary analyzing the “cyclical fall back” of the Chinese macroeconomy as well as the much needed structural adjustments. The commentary focused on the “imbalance risks” and identified three major ones: 1) The volume of China’s exports is not in sync with the trend of the global economic recovery. The author expressed the belief that this was caused by the rebound in U.S. manufacturing, the increased costs in Chinese manufacturing, the appreciation in China’s currency, competition from other emerging economies, and new international trade agreements in which China does not participate. 2) China’s domestic economy suffers a significant imbalance between the real economy and the virtual economy. The financial industry and the housing industry are the primary contributors to economic growth, while the manufacturing industry is seeing minimal profits. 3) China’s actual interest rate is moving in the opposite direction from that of the global interest rate. While most of the countries in the world are maintaining zero or near-zero interest rates, China’s actual interest rate is growing rapidly. This significantly increases the cost of financing. Government branches, companies, and financial organizations are suffering from across-the-board debt increases.

Source: China Review News, February 7, 2014

http://hk.crntt.com/doc/1030/1/0/4/103010469.html?coluid=53&kindid=0&docid=103010469&mdate=0207092022

Briefings | | February 11, 2014 | Economy/Resources

Migration Due to Climate Change Is Rising among Wealthy Chinese

Guangming Daily reprinted an article which the Economic Observer had originally published on the increase in migration due to climate change in China, a phenomenon that is expected to have a major impact on China’s future social structure. According to the Blue Book of Global Talent, co-published on January 22, 2014, by the Center for China and Globalization and the Chinese Academy of Social Sciences, in 2013, the deteriorated environment has been the main reason driving the migration of the elite and the middle class population in China. The article attributed the major cause of the environmental issues to the extensive economic growth, massive urbanization, and the mismanagement of social issues.

The article indicated that, as millions of farmers have moved to the city to seek job opportunities, urban residents have begun to feel uneasy about air pollution, crowded traffic, an increase in living costs, and other living pressure. In the past two years, weather was the most popular topic among the Chinese people. In 2013 large scale grey smog caused frequent red alerts to be issued in regions such as the Yangtze River delta, northeastern China, Beijing, Tianjin and the Shandong region. The first climate change migration started in large size cities two years ago. Migration routes were divided into two areas: to overseas countries for “clean air” or to regions in China that are still less polluted. The article said that the newly migrated population will drive the local economic development in the new regions but it will also cause conflicts with the local residents in the areas of transportation, education, commodity prices, and real estate markets. It may even cause conflicts in culture and social habits. The article pointed out that, “Many local governments are not prepared to face the large inflows of these immigrants.” “They don’t know how to deal with the delicate relationships, which could be a hidden cause for future conflicts.”

Source: Guangming Daily, February 9, 2014
http://edu.gmw.cn/2014-02/09/content_10313690.htm

Briefings | | February 10, 2014 | Social Stability

Mergers and Acquisitions in the Dairy Industry to Peak Prior to May

According to an article published by People’s Daily, mergers and acquisitions in the dairy industry have started and will peak prior to May of this year. In 2013, the central administration introduced the series of policies driving this phenomenon in order to improve the quality of the products in the baby formula industry. The article stated that the Ministry of Industry and Information Technology set a target to allow two years for the dairy industry to consolidate and transform into ten large enterprises, each with annual revenue of over two billion yuan (US$330 million), its own patents, and the ability to compete in the world market.

Currently there are 128 dairy manufacturing companies. The article said that most are small to mid-size companies. China’s Food and Drug administration has ordered that all dairy manufacturers complete an audit and inspection for their license renewal by May 31. If the manufacturer fails to do so, it will be shut down and be given two years to come back. The article continued with the prediction that this policy will allow those companies who fail to meet the requirements to find another way to survive. Estimates are that close to 1/3 of the companies will close. According to an industry expert quoted in the article, most of them are small size businesses. Therefore some experts predict that the small size dairy manufacturers will be better off putting themselves up for sale to get some money back instead of facing elimination.

Source: People’s Daily, February 7, 2014
http://shipin.people.com.cn/n/2014/0207/c85914-24288124.html

Briefings | | February 10, 2014 | Economy/Resources

Food and Beverage Industry Suffered Lowest Growth in 21 Years

On February 8, 2014, the China Cuisine Association published a report indicating that the revenue for China’s food and beverage industry in 2013 was 25.392 trillion yuan (US$4.19 trillion), up 9 percent from 2012. This represented the lowest growth in 21 years. The report also stated that, in 2013, the business structure of the food and beverage industry underwent a major shift: high end food and beverage businesses suffered the greatest losses. Their revenue declined for the first time, while the mid-range food and beverage businesses gained main stream popularity. The report said that the high end businesses are slowly adjusting their business model to find their niche in the industry. However, the pressure to stay in business in the industry remains high in general. The report also suggested that, in 2013, Microblog, food, and restaurant review websites such as weixin and WeChat became the new sales platform for food and beverage businesses.

Source: People’s Daily, February 9, 2014
http://finance.people.com.cn/n/2014/0209/c1004-24302911.html

Briefings | | February 10, 2014 | Economy/Resources

China.com: The United States Has No Right to Make Irresponsible Remarks about the South China Sea

China.com, an authorized portal site established by the Chinese government, published a commentary stating that the United States has no right to make irresponsible remarks on the South China Sea issue.

The commentary was responding to the statement the U.S. State Department made following a Japanese media report that China had developed a draft plan to establish an air defense identification zone in the South China Sea. The U.S. statement claimed that China’s action was “a unilateral provocative act.”

The article stated that this was the second time in recent years that the United States had accused China of "provocation" for defending the sovereignty of the South China Sea. It argued that the Chinese government has the right and duty to implement management of the biological and non-biological resources in the related reefs and waters. Even if China really announces an identification zone in the South China Sea, it is China’s business and China has the right to do so. Why is the United States so sensitive about the South China Sea issue?

The article said that it is the United States that is provocative in the South China Sea. The new U.S. Navy Littoral Combat Ship is "free" in the South China Sea and earlier made a "standardized routine" cruise and carried out simultaneous "comprehensive reconnaissance missions." The United States has had a military presence in the South China Sea for decades. When did the U.S. ever give a reasonable explanation? The United States sending warships to the South China Sea is itself a "provocative" act and is a manifestation of the U.S’s strategy of returning to the Asia-Pacific.

Source: China.com and Huanqiu, February 4, 2014

http://opinion.china.com.cn/opinion_28_91228.html

http://opinion.huanqiu.com/opinion_world/2014-02/4807292.html

Briefings | | February 7, 2014 | US-China Relations

IHL: The U.S. Military Does Not Have a Patent on the Hypersonic Missile

The International Herald Leader (IHL, under Xinhua News Agency) published a commentary regarding the U.S.’s response to China’s hypersonic missile "weapons" test. Below is a summary of the article.

On January 9, 2014, China conducted a hypersonic missile "weapons" test. The missile will be used for defending the U.S. missile defense system. A U.S. official stated that China’s new hypersonic weapons test marks an important advance for the Chinese new strategic nuclear and conventional missile development program.

The article stated that the U.S. has continuously hyped in high profile regarding China’s weapons and spacecraft tests, which is the same as hyping and spreading the “China threat" theory. The reason for this is to create a sense of urgency for the United States mission and arouse a sense of crisis among U.S. allies. After all, the U.S. is treating China as its core opponent in its Asia-Pacific rebalancing strategy. At the same time, hyping China’s military power can help "unite" the U.S.’s many Asia-Pacific allies to fight against China.

The article concluded that, to break the "missile defense system" built by U.S.-led allies and the "China threat theory" encirclement, and to control the discourse power, what China needs most is [military] strength. The U.S. does not, by any means, have an exclusive patent on the hypersonic missile. If the Europeans can make it, the Russians can do it, and the Japanese are also working on it, then China has no reason not to do it. Only when China becomes really strong will the [China military threat] noise eventually disappear.

Source: International Herald Leader (under Xinhua), January 20, 2014 http://ihl.cankaoxiaoxi.com/2014/0120/333961.shtml

Briefings | | February 6, 2014 | Defense/Military

Study Times: Ensure the Chinese Communist Party’s Publications Carry the Voice of Authority

On January 27, 2014, Study Times, a journal of the Party School of the Central Committee of the Chinese Communist Party, published an article on how to ensure the voice of authority of the Chinese Communist Party’s publications. According to the article, the Party’s publications must promote all kinds of achievements, lead the diverse social thought trend with the socialist core value system, and have the courage to face and actively respond to social hot spots and emergencies so as to lead public opinion. Internationally, the Party’s publications must create new concepts and new expressions that both China and the West accept and they must propagandize China and the Chinese Communist Party around the world.

“The essential attribute of the Party’s publications is to uphold the Party’s principles and lead public opinion. As for the management system, the organizations of the Party’s publications must be important departments of the Party and the government. In terms of the propaganda content, the Party’s publications must mainly promote the Party’s theories, the Party’s line, the Party’s principles, the Party Central Committee’s important decisions and plans, and the Party Central Committee’s major analyses and judgments on (China’s and the world’s) situation. Politically, [the Party’s publications] must maintain a high level of consistency with the Party’s Central Committee and resolutely safeguard the authority of the Central Committee. As for staffing, most news propaganda workers must become determined Marxists.”

Source: Study Times, January 27, 2014
http://www.studytimes.com.cn/shtml/xxsb/20140127/3864.shtml

Briefings | | February 5, 2014 | Government/Politics

Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

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.”