Chinascope – Page 849

National Business Daily: Rail Construction May Slow Down

On July 2, 2013, National Business Daily published a commentary on the impact that banks’ tightening of credit will have on rail expansion.

China is transitioning from a country on tires to one on the rails. High-speed railways, urban subways, and light rails are becoming the primary mode of transportation. The total rail length will reach 6,000 kilometers by 2020, requiring an investment of 3 to 4 trillion yuan.

According to the commentary, real estate appreciation has become the most important element in funding rail transit construction. The rail transit companies that the local authorities control first acquire some land. Then they start to develop real estate, followed by construction of a rail transit system and other infrastructure in the area. This leads to anticipated appreciation of the land they own. The increase in the real estate market allows the rail transit companies to make the money needed to cover the cost of all the construction and to repay the debts they owe for rail transit.

The commentary concluded that, as banks tighten credit by evaluating the financials of prospective rail transit projects, a few planned rail transit projects will not make it.

Source: National Business Daily, July 2, 2013
http://ntt.nbd.com.cn/articles/2013-07-02/754446.html

Briefings | | July 5, 2013 | Economy/Resources

Senior PLA Official: Promoting Military Reform with Chinese Characteristics

Liu Yazhou, the political commissar of the National Defense University of the People’s Liberation Army, published an article in the recent issue of Qiushi about promoting and deepening military reform with Chinese characteristics.

Liu wrote that the PLA faces two “incompatibles.” First, the existing level of modernization is incompatible with the requirement to win local informationization wars. Second, military capabilities are incompatible with fulfilling our historic mission in the new century. “The only way to solve these two "incompatibles" is through a vigorous and deep reform. Otherwise, we will once again be eliminated by the tide of military development.”

Such military reform must be included in the framework of national reform so that “the military reform will synchronize with political and economic reforms and reforms in other fields and will be in harmony with social reforms. On the other hand, it is essential for the military reform and for overall national development that, during the historic stage of overall changes in society, military reform does not exceed what social reform can tolerate.”

Source: Qiushi reprinted at sina.com, July 1, 2013
http://news.sina.com.cn/c/2013-07-01/155827545695.shtml

Briefings | | July 5, 2013 | Defense/Military

VOA: When the Father of China’s Internet Censorship Resigned, Chinese Netizens Cheerfully Mocked Him

On June 29, 2013, Voice of America published an article on why Chinese netizens were so cheerful when a university president announced he would resign from his post as the president of Beijing University of Posts and Telecommunications due to illness. The president was Fang Binxing, China’s best-known Internet censorship engineer, nicknamed the “Father of China’s Great Firewall.” The “Great Firewall” allows China’s regime to censor websites like Facebook, Twitter, YouTube, Google, and anything that the Chinese authorities do not approve. When Fang sent his greetings on a Weibo (Chinese microblog) account, Chinese netizens responded with 250,000 “Go Away” messages. In 2012, when Fang spoke at Wuhan University, students threw eggs and shoes at him.

Fang’s resignation announcement sparked a new round of mocking. Some netizens even posted a sarcastic couplet poem to Fang: “Thousands of People Point Fingers at You When You Are Alive; One Excremental Name Will Follow You after You Pass Away.” The title of the poem was “A Life Journey Not Taken in Vain.”

Source: Voice of America, June 29, 2013
http://www.voachinese.com/content/beijing-principal-20130629/1691720.html

Briefings | | July 3, 2013 | Grapevine

Britain and China Signed Agreement on Currency Swap Valued at 21 Billion British Pounds

According to BBC Chinese on June 23, 2013, the Bank of England and the People’s Bank of China signed an agreement to establish a reciprocal 3-year sterling/renminbi (or Chinese yuan) currency swap line. The maximum value is 21 billion British pounds or 200 billion Chinese yuan. Beijing hopes to further facilitate the internationalization of the renminbi through currency swap agreements. So far, China has signed currency swap agreements with a number of major trading partners, including Japan, Hong Kong, Australia, and Brazil.

Source: BBC Chinese, June 23, 2013
http://www.bbc.co.uk/zhongwen/simp/uk/2013/06/130623_uk_china_currency_deal.shtml

Briefings | | July 3, 2013 | Government/Politics

China News: More Pregnant Chinese Women Go to the U.S. for Delivery

China News recently reported that the number of pregnant Chinese women visiting the U.S. for delivery increased by twenty times in the past five years. More and more Chinese companies are getting into this new highly profitable “business.” The advertising, “return on investment higher than bank robbery,” can be seen in many places. The implication is that the United States offers much better social benefits to its citizens than what the Chinese government offers. However, the U.S. operations for many of these “delivery services” are not properly licensed. Some of them are only registered as “consulting firms.” Dual citizenship and gray legal gaps are other problems associated with this “business.” Despite all the issues, the number of “customers” coming to the U.S. grew from 600 in 2007 to over 10,000 in 2012. Most of the women delivering in the U.S. are related to company owners, executives of international firms, famous politicians, doctors, lawyers, statisticians, and professors. A typical “U.S. Baby” costs US$20,000 to US$30,000. Most of the U.S. side operations are located in Los Angeles.

Source: China News, June 24, 2013

http://www.chinanews.com/sh/2013/06-24/4959459.shtml

Briefings | | July 2, 2013 | US-China Relations

Beijing News: Stock Market Landslide Results in 1.3 Trillion Loss in One Day

On June 25, Beijing News reported that, on June 24, the Chinese domestic stock market suffered a major landslide, losing RMB 1.34 trillion (around US$194 billion) in one day. The Shanghai Stock Exchange Index dropped below 2,000, which was the biggest single-day decline in 46 months. Over 200 stocks were suspended from trading. The banking stocks suffered the biggest loss. In the weeks before this landslide, a number of Chinese banks had been running very low on liquidity. The Shanghai Inter Bank Offered Rate (SHIBOR) reached over 13 percent, which was much higher than the normal level of less than 4 percent. The central bank did not immediately inject money into the market this time like it had in previous years. Sectors related to banking, such as insurance and brokerage, all suffered major losses in this round of crisis. Experts expressed the belief that mid-sized banks were the biggest losers in this wave and that this market landslide was a clear signal calling for better risk management in the Chinese banking industry. Some also blamed the QE exit strategy that the U.S. Federal Reserve had announced as being responsible for triggering the event. Since 2009, there have been four other Chinese domestic stock market landslides at this level.

Source: Beijing News, June 25, 2013

http://www.bjnews.com.cn/finance/2013/06/25/269993.html

Briefings | | July 2, 2013 | Economy/Resources

Global Times: Chinese Central Bank Requires Enhanced Liquidity Management

On June 24, Global Times reported that the Chinese central bank issued a regulatory requirement that all financial institutions, including commercial banks, must apply more control over liquidity management. The central bank statement suggested that the purpose of the new requirement is to stabilize the currency environment and to improve the handling of an increasingly volatile financial market, especially at the mid-year time point. The central bank also asked all banks to “pay careful attention” to the market trend and to maintain an adequate reserve level. Large commercial banks were asked to maintain good control over risks as well as to cooperate with the central bank in the effort to stabilize the market. The central bank statement mentioned that banks should set reasonable profit goals and loans should be used mainly to support the growth of the real economy.

Source: Global Times, June 24, 2013

http://china.huanqiu.com/politics/2013-06/4057189.html

Briefings | | July 2, 2013 | Economy/Resources

China’s Reaction to Trump’s Election Win

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