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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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RFA: China’s Attacks on Rumors Was Not Meant to Protect Freedom of Speech

According to RFA, China has recently attacked many of those who were alleged to be “spreading rumors on the Internet.” In the meantime, the China Internet Network Information Center (CNNIC) told Xinhua that “attacking Internet rumors helps to protect the freedom of ‘proper’ speech.” CNNIC said that they can’t allow the Internet to be full of rumors: “If we don’t stop rumors, it is no different from destroying the internet, which no other country in the world would allow.” According to RFA, a large number of microblog postings supporting CNNIC’s actions of attacking rumors have appeared repeatedly on a number of online news websites.

Many people believe that the action of attacking “online rumors” is in fact an attack on freedom of speech. "Why do they think that they have the authority to determine what is a rumor and what is not?" One Internet expert told RFA, "Many people were telling the truth, but they ended up being arrested. Where is freedom of speech when that happens?"

Source: Radio Free Asia, September 28, 2013
http://http://www.rfa.org/mandarin/yataibaodao/meiti/sy-09282013132334.html

Briefings | | |   Defense/Military

State Audit: Local Government Debt Almost Doubled in Two Years

According to Economic Information, a publication under Xinhua, China’s National Audit Office conducted an investigation into local government debt. It found that local government debt almost doubled since the 2011 audit. The nationwide investigation started in August and is nearing completion. 

The officials from the National Audit Office indicated that the increase is largely the result of the build and transfer financing strategy (BT) in which the local government establishes a project and then authorizes construction companies to finance and build it and then transfer it back to the government. Since local governments are not authorized to issue bonds, financing platform companies, set up by local governments, have been instrumental in obtaining financing or issuing bonds to the public. In some cases, the interest rate has reached 14 percent. 
The 2011 national audit showed that, as of the end of 2010, local government debt exceeded 10 trillion yuan (US$1.63 trillion). Most financing platform companies were set up by provincial and municipal governments in the developed regions. However, the ongoing investigation showed that almost every country government now has its own financing platform. “It is literally the ATM of the central bank,” said an official of the National Audit Office. These financing platform companies hold assets of very low market liquidity and have no ability to pay off these debts. Many of them are in the red. 
Source: Economic Information reprinted by China Daily, September 27, 2013 http://www.chinadaily.com.cn/hqgj/jryw/2013-09-27/content_10207613.html
Briefings | | |   Economy/Resources

China’s State Media Welcome Merkel’s Reelection

China’s state media Huanqiu (Global Times) recently published an article about Germany’s chancellor, Angela Merkel, commenting on her reelection. The article stated that she is pragmatic in dealing with China and that in China-German relations she can provide a positive model [for other E.U. countries]. 

The article quoted a German scholar who stated that Merkel’s reelection is good news for China. Merkel wants to have a strong Europe so that it will form a new "world Triangle" with China and the United States. She would remain relatively independent of the United States. 

On September 23, 2013, Cui Jian, a scholar and researcher at the China Institute of International Studies, told the Global Times that Merkel’s victory is "relatively good news" for China. First, Merkel’s reelection is sure to make Chinese authorities more comfortable. This is because if Germany changed its leader, both China and Germany would need a re-adaptation process. Now that Merkel has been reelected, existing German policy toward China can continue. Second, during the first two terms [under Merkel], China and Germany started some large cooperative projects. Merkel’s reelection at least ensures that these projects will not change direction. Cui Jian said that Germany has a very strong ability to learn. During the U.S. economic crisis, Germany was aware of the need to take China seriously. In addition, Merkel’s reelection and her warm bilateral relations with China will provide a positive role model for Europe. 

Source: Huanqiu, September 24, 2013 
http://world.huanqiu.com/exclusive/2013-09/4385028.html

Briefings | | |   US-China Relations

Xinhua: The China Dream is not a Dream for Hegemony

On September 26, Xinhua published a commentary saying the China Dream is not a dream for hegemony. “Internationally, there are always some people who concoct and present different versions of the ‘China Threat Theory,’ to label the China Dream ‘neo-imperialism.’ Such remarks are completely without merit.” 

The commentary stated that the China Dream is a dream for prosperity, “but not one for hegemony.” It said that "China has no tradition of invading other countries. It has not occupied even an inch of others’ territories or taken any resources of other countries.” 
“This malicious distortion of the meaning of the China Dream boils down to the fact that some people cannot let go of the old world where there were haves and have-nots. It also reflects fear that the China Dream may disturb their own dream.” 
Source: Xinhua, September 26, 2013 
 http://news.xinhuanet.com/comments/2013-09/26/c_117512945.htm
Briefings | | |   Government/Politics

People’s Daily: U.S. and Japan Have Ulterior Motives Deploying X-band Radar at Kyoto Military Base

At a recent press conference, Chinese Foreign Ministry spokesman Hong Lei expressed [China’s] concern regarding the issue that the U.S. military is deployed at the Japanese Air Self Defense Force military base in Kyoto. Hong said, "The Chinese side believes that some individual country or group is using the excuse of North Korean nuclear and missile threats to unilaterally deploy anti-ballistic missile systems or conduct group cooperation. This will not help solve the problem of regional [nuclear] proliferation and is not conducive to peace and stability in the Asia-Pacific region.” 

On September 24, 2013, a Chinese radar and missile expert, who did not want to disclose his name, told a Global Times reporter that X-band radar is an important part of the U.S. anti-missile system. After deployment in Japan, it will further expand its coverage of reconnaissance and surveillance. It can detect ballistic missiles that the target countries launch from multiple directions. Apart from the main goal of monitoring space objects, X-band radar can also, theoretically, detect and monitor China’s drones in the waters near the Diaoyu Islands. The expert said that the U.S.-Japan missile defense system is actually deployed against China using the excuse of North Korea’s ballistic missile threat. North Korea’s ballistic missiles, from the quantity to the range or quality, are all questionable. They are not worth so much energy and attention. The U.S. and Japan have their ulterior motives. 
Source: People’s Daily, September 25, 2013 
http://military.people.com.cn/n/2013/0925/c1011-23026154.html
Briefings | | |   US-China Relations

China’s Local Government Debts Result from the Government’s System

On September 24, 2013, Gao Peiyong, Director of Institute of Finance and Trade Economics of the Chinese Academy of Social Sciences (CASS) spoke at an economic forum in Beijing. At the forum, Gao stated that the ultimate risk that occurs as a result of local governments’ debts is not due to the size of the debts themselves, but to the nature of the government system.  

Gao indicated that it is because the local governments lack awareness of the standard of “living within their means” and recognizing an obligation to pay off their debts. “Only by improving local governments’ financial systems can local debt risks truly be resolved.” “The greater problem is that almost all of the local governments give little thought to and have no consideration for how to repay their debts.” Gao said that if a person never wants to pay back his debts or never wants to take his obligations seriously, that person’s actions result in the greatest risk, which is the system’s problem and its most fundamental problem. 

According to Gao, the reason why local governments are such debtors is directly linked to Communist China’s financial system. In the eyes of the central government, local governments are children that need to be controlled. They do not have a separate, sound personality for dealing with self-finance. 

Source: Xinhua, September 24, 2013 
http://news.xinhuanet.com/yzyd/local/20130924/c_117490452.htm
Briefings | | |   Economy/Resources

China Review News on the Necessary Adjustment of China’s Diplomatic Policies in Southeast Asia

On September 22, 2013, China Review News published a commentary on the necessary adjustment to China’s diplomatic policies in Southeast Asia. According to the commentary, as China is becoming a world power, it has to deal with complicated relationships with China’s neighboring countries. The United States, by comparison, has always enjoyed the advantage of “no wars with its neighbors.” Although China has the power to handle any neighbors now, China needs to focus on its domestic economic development. Therefore, China should balance its domestic development and its international relations with its neighbors in the following ways:

  1. Strengthen China’s domestic system building, economic development and social control, and its management.
  2. Convince the neighboring countries to trust China’s political commitment, its promise of safety and the direction of its economic development.
  3. Share international responsibilities and authority in the Asia-Pacific region and take care of small countries’ interests appropriately so as to increase China’s international influence and its legitimacy in the world.

Source: China Review News, September 22, 2013
http://www.zhgpl.com/doc/1027/4/9/0/102749041.html?coluid=1&kindid=0&docid=102749041&mdate=0922000405

Briefings | | |   Geo-Strategic Trend

Economic Bubble: China’s Economic Growth Model Faces a Serious Challenge.

On September 19, 2013, 21cbh.com, a professional financial news website under the 21st Century Media Group in Guangdong Province, published an article titled, “The Economic Bubble: China’s Economic Growth Model Faces a Serious Challenge.” According to the article, China’s export-oriented economy is going nowhere because China’s strength in its large population of cheap labor, its vast cheap land, and the government controlled depreciated RMB exchange rate no longer exist. China is now experiencing an economic bubble:

  1. In 2012, the ratio of broad money supply (M2) to GDP reached 188 percent in China, while the ratio of M2 and GDP in the U.S. was only 90 percent.
  2. In 2012, the ratio of investment in fixed assets to GDP in China was over 70 percent.
  3. China’s PPI has been declining over the last 18 consecutive months, since March of 2012. Meanwhile, China’s CPI has been increasing sharply. The prolonged divergence between PPI and CPI, which has not happened before in history, indicates a prolonged excess production capacity and lingering inflation, with a huge credit expansion.

Source: 21cbh.com, September 19, 2013
http://finance.21cbh.com/2013/9-19/2OMzcxXzc3NTU2OA.html

Briefings | | |   Economy/Resources