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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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Only One Quarter of Wealthy Chinese Are Very Confident in China’s Economy

On August 8, 2013, the World Journal published an article titled, “One Third of Chinese Millionaires Have Overseas Assets.” The article was based on The GroupM Knowledge – Hurun Wealth Report 2013. The report showed that only one quarter of China’s millionaires are very confident about the country’s economy in the coming two years, a decline of 3 percent from the previous year and one-half that from the year before. One-third of wealthy Chinese have overseas assets. This accounts for an average of 19 percent of their total assets. Nearly 30 percent of the Chinese millionaires who do not have overseas assets plan to make overseas investments in the next 3 years.

Since last year, over 80 percent of millionaires have planned to have their child educated outside of China. The major choices for foreign education are the US, the UK, and Canada. The main destinations for study abroad are also popular locations for them to purchase overseas residential properties. According to the "2013 Report on Private Wealth in China" jointly issued in May of 2013 by China Merchants Bank and Bain & Company – Management Consulting Firm, since 2010, about 60 percent of those respondents who have investable assets of more than 10 million yuan (US$1.63 million) have been considering or have already completed investment immigration. 

Source: World Journal, August 8, 2013
http://www.worldjournal.com/view/full_news/23395704/article-%E4%B8%AD%E5%9C%8B%E5%AF%8C%E8%B1%AA1-3%E6%93%81%E6%B5%B7%E5%A4%96%E8%B3%87%E7%94%A2?instance=m1b

Briefings | | |   Social Stability

The Increase in Financial Black Holes in Jiangsu Province

On August 21, 2013, 21cbh.com, a professional financial news website under the 21st Century Media Group in Guangdong Province, published an article on the increasing financial black holes in Jiangsu Province. Over 10 heads of bank branches have been removed from their positions or held legally responsibile for financial black holes in the steel trading market. From January to June 2013, the number of bad loans in Jiangsu Province increased by 18.2 billion yuan (US$2.97 billion). By the first half of 2013, the total bad loans belonging to the steel trading market in Jiangsu Province were 21.3 billion yuan (US.3.48 billion), among which, the nonperforming loan (NPL) ratio was 42.3 percent, 23.3 percent higher than it was at the beginning of this year. It is expected that the number of new bad loans will continue to increase.

To effectively resolve the steel trade market’s credit risk, the Jiangsu government recently proposed to repackage bad loans for State-owned enterprises to take over. Some financial professionals have concerns that such repackaging process may change these debts in the financial markets into the taxpayers’ responsibility.

Source: 21cbh.com, August 21, 2013
http://www.21cbh.com/2013/8-21/yONTg5Xzc0NjIyOA.html

Briefings | | |   Economy/Resources

The CCP’s File No. 9 Circular Labels Promoting Democratic Ideologies as Seven Reactionary Trends

On August 21, 2013, Hong Kong Apple Daily published an article on the Chinese Communist Party’s “File No. 9” titled, “Circular on the Current Ideological Situation.” The circular, authorized by the CCP’s General Secretary Xi Jingping, labels seven democratic ideological trends. Although popular in China recently, they are called reactionary trends; the circular warns CCP officials that they will lose their power if they cannot eliminate these seven reactionary trends from Chinese society. According to the circular, “Those who oppose the CCP’s one-party rule make trouble, call for publicizing officials’ assets and property holdings, take advantage of the Internet to oppose corruption, media control, and other sensitive problems so as to incite discontent about the Party and the government.” 

Below are the seven reactionary trends cited by the CCP:

  1. Promoting Western Constitutional Democracy and thus denying the CCP’s leadership and the socialist system.
  2. Promoting universal values and thus shaking the theoretical foundation of the CCP’s rule.
  3. Promoting civil society and thus disrupting the social foundation of the CCP’s rule.  
  4. Promoting neo-liberalism and thus changing China’s economic system.
  5. Promoting Western journalism [freedom of the press] and thus challenging the CCP’s media management system.
  6. Disseminating historical nihilism and thus negating the history of the CCP and New China.
  7. Questioning China’s reform and opening up is to question the nature of Chinese socialism.

Source: Hong Kong Apple Daily, August 21, 2013
http://hk.apple.nextmedia.com/international/art/20130821/18387627

Briefings | | |   Government/Politics

BBC Chinese: Chad Put Chinese Oil Prospecting Operations on Hold

BBC Chinese recently reported that the government of the Republic of Chad ordered a pause in the oil prospecting work contracted to the China National Petroleum Corporation (PetroChina). Chad’s Minister of Energy and Oil, Djerassem Le Bemadjiel, suggested at a press conference that the government stopped the operations in the Koudalwa Oil Field (200 kilometers south of the capital city of N’Djamena) after an environmental protection law compliance inspection. The Minister said the Chinese company intentionally performed drilling without the use of required spill clean-up equipment in order to cut the cost. Afterwards the company ordered the local workers to clean the spill without proper protection. The Chad government did not provide a date when the work can resume. PetroChina started oil prospecting work in Chad in 2009.
Source: BBC Chinese, August 13, 2013
http://www.bbc.co.uk/zhongwen/simp/china/2013/08/130813_china_chad_oil.shtml
Briefings | | |   Geo-Strategic Trend

People’s Daily: Chinese Leadership Structure Better than the U.S. Presidency

People’s Daily recently published a commentary by Professor Hu Angang, Dean of the Institute of China Studies at Tsinghua University. The commentary suggested that the Chinese “joint leadership” structure is more innovative than and superior to the U.S. Presidency coupled with the “dual-party system.” Hu indicated that the U.S. system suffers from a loose organizational structure of political parties, poor mobilization of capabilities, weak political solidarity, a low level of wisdom integrated into its decision-making, and hollow promises made by lying candidates. The U.S. system guarantees ignorance of substantive issues and maximizes delays. The U.S. political structure not only ensures a balance of power, but also introduces mutual constrains and a divided country. The President is often unable to deliver on his promises, as clearly demonstrated by President Obama, who frequently lacks Congressional support. Hu expressed the belief that the 200-year-old U.S. design is largely outdated, while the Chinese Communist Party is structured based on the lessons learned in recent human history, which has been highly competitive. 
Source: People’s Daily, August 16, 2013
http://hb.people.com.cn/n/2013/0816/c194063-19321669.html
Briefings | | |   Government/Politics

Beijing Apartment Rental Market Prices Continue to Increase

Sina Financial News recently reported that Beijing’s apartment rental prices have been increasing for the past 52 months. The national price has been increasing for 42 months. Though the law bans such practices, it is not unusual for seventeen people in the capital city to share a three-room apartment. There are millions of couples living in apartments with less than 20 square meters. Based on the international standard, the cost of rent should be less than 30 percent of a family’s income. In Beijing, the official data for 2012 shows it is 39.3 percent. However, Beijing’s current population and real estate prices are both showing rapid growth. The city government has attempted several times in the past few years to ban overloaded rental apartments with no success. A new round is being implemented in addition to the plan of introducing the Residence Permit System. Rental agents are not really worried, however. They believe that this new effort will fail just like the previous ones.
Source: Sina Financial News, August 16, 2013
http://finance.sina.com.cn/china/20130816/234516476514.shtml
Briefings | | |   Economy/Resources

China to Expand Broadband Coverage

China’s State Council issued a notice indicating that China will promote broadband infrastructure development in both urban and rural regions. The development plan will have two phases. The first phase will be completed by 2015 with residential coverage reaching 50 percent, 3G telecommunication coverage reaching 32.5 percent, and broadband access reaching 20 Mbps (mega bites per second) in urban and 4 Mbps in rural regions. The second phase will be completed by 2020 with residential coverage reaching 70 percent, 3G telecommunication coverage reaching 85 percent, and broadband access reaching 50 Mbps (mega bites per second) in urban and 12 Mbps in rural regions.

Source: Xinhua, August 17, 2013
http://news.xinhuanet.com/politics/2013-08/17/c_116981979.htm

Briefings | | |   Information/Technology

Hotel Industry Faces Tough Challenges

The China Tourist Hotel Association published a consolidated report with information from over 2,000 hotels having the level of three stars and above. It included the financial results for the first half of 2013. The consolidated results showed that the average occupancy rate was 53 percent, which was below the breakeven rate of 60 percent. This was down six percent from the same period in 2012. The average hotel revenue was down 8.5 percent; food and beverage revenue was down 17.2 percent; meeting and conference revenue was down 17.8 percent, which was the greatest amount from all areas. The total revenue was down 11.8 percent. The results also suggested that 31.1 percent of the hotels are not optimistic about their business opportunities in the future.

The report stated that China’s hotel and restaurant industry had experienced double digit growth over the past thirty years. The growth rate even exceeded 22 percent over a period of twenty of those years.

The drop in hotel revenue resulted from the following four circumstances. Government entities decreased their spending due to the tightened meals and entertainment policy. Foreign tourism was down five percent due to the world’s economy. The downturn in the stock market had an impact. The government’s misjudgment of the market resulted in an excess supply. This last circumstance was cited as the major reason for the lowered occupancy rates.

Source: People’s Daily, August 18, 2013
http://finance.people.com.cn/n/2013/0818/c1004-22601996.html

Briefings | | |   Economy/Resources