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China’s Reaction to Trump’s Election Win

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

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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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In 2012, 36 Provincial Governments Had Debts Totalling 3.85 Trillion Yuan

China’s National Audit Office recently released the results of the debt audit of 36 provincial level governments. As of the end of 2012, these 36 governments had a debt balance that had reached 3.85 trillion yuan (US$0.63 trillion). This represents a 440 billion yuan (US$71.7 trillion) or 12.9 percent increase over the level in 2010. An official from the National Audit Office observed that the pace of current local governments’ debt growth is too high and that some regions and industries are facing a looming debt crisis.

The audit results highlighted four aspects of the debt problem. The first is the high debt growth of some provincial capital cities: 14 provincial capital cities have 18.17 billion yuan (US$2.96 billion) in overdue debt. Second is the decline in the growth of land sale revenues. Third, in some areas, the debt for highway construction has grown rapidly. Fourth, due to the cancellation of road tolls, some governments face greater pressure for debt repayment.

Source: Xinhua, June 13, 2013
http://news.xinhuanet.com/2013-06/13/c_124847326.htm

Briefings | | |   Economy/Resources

Military Expert: China Has No Reason to Fear Any War

The 12th Asian Security Conference, also called the Shangri-La Dialogue, was held in Singapore, concluding on June 2, 2013. The representatives of the participating countries and regions focused their attention on Asia-Pacific regional security cooperation. 

Qi Jianguo, Deputy Chief of the General Staff of the PLA, made the observation that, in the past 30 years, almost all of the world’s major counties have used their armed forces to participate in a war. "For nearly 30 years, China is the only country that has not used its armed forces to participate in any war or to provoke a military conflict.” 
Military expert Du Wenlong interpreted the message that Qi was signaling. In an interview on the CCTV program, "Today’s Focus," he said that the message expresses two levels of meaning: On the one hand, for the last 30 years, China has not wanted war. First and foremost it has chosen a path of peaceful dialogue and peaceful development. However this approach has also made us lose a lot of opportunities. For example, in Iraq, Afghanistan, and other wars, the armed forces of the United States gained experience in its comprehensive combat capability. Its new weapons and equipment in all combat operations have been tested. We had some trade-offs in these areas compared with the Western counties. 
On the other hand, 30 years ago, the Chinese army was invincible. From 1949 on, after the founding of the Republic of China, the PLA won all of its wars. Now, with the increase in China’s comprehensive national power and with the development of its military technology, we are capable of producing all the weapons required to safeguard our national security, from the F -15, aircraft carriers, and stealth fighter to the new surface ships, etc. From this point of view, we have no reason to fear any war. 
Source: People’s Daily, June 3, 2013 
http://military.people.com.cn/n/2013/0603/c1011-21713902.html
Briefings | | |   Defense/Military

Study Times Commentary Worries about Succession by Princelings

Study Times published a commentary that criticized the princelings (the offspring of former high-ranking Party officials) who succeeded their parents when they took over key government and Party positions. The article considered this to be a major form of corruption.The Chinese people have given it the most criticism because it serves to “severely destroy the legitimacy of our Party’s rule."

“Legitimacy stems from a set of widely accepted principles, which could be democracy or non-democracy, but at least it must mean what it stands for. If you emphasize that people are the masters of the power, you must truly let the people feel they can choose who is in power, makes decisions, and expresses their opinion on major issues.”
 
“We used guns to taker power. This is the origin of the legitimacy of our ruling power. While the people in China may think it makes sense for whoever used guns to take power to rule the country, we must not forget that … we obtained legitimacy by upholding the banner of democracy."

Source: Study Times, June 10, 2013
http://www.studytimes.com.cn:9999/epaper/xxsb/html/2013/06/10/03/03_34.htm

Briefings | | |   Government/Politics

Chinese Real Estate Industry May Have Become the Biggest Money-Laundering Channel

On June 8, 2013, the Hong Kong-based Mirror Books published an article titled, “Chinese Real Estate Industry May Have Become the Biggest Money-Laundering Channel.” “Not only is there money laundering; it is a double shameless plunder. The first plunder is corruption. It is a second plunder when officials invest the money collected through their corrupt acts and channel it into real estate, thus causing housing prices to rise.”

According to the Central Commission for Discipline Inspection of the Communist Party of China, since November 2012, there has been a new trend of selling luxury homes and villas. Many government officials, especially those in Guangzhou and Shanghai, have undersold their luxury homes. In Guangzhou and Shanghai, officials put up 4,880 and 4,755 luxury homes for sale, respectively. Of those public officials who left China from the Mid-Autumn Festival to October 1, 2012, more than 1,100 of them did not return to China on time and 714 of those 1,100 officials have been categorized as having fled China. In 2010, the outflow of illegal money from China was US$412 billion. In 2012, it was US$600 billion. It has been estimated that, in 2012, US$1 trillion was transported overseas. In 2013, the illegal funds that have fled China has reached US$1.5 trillion.

Source: Mirror Books (http://city.mirrorbooks.com) , June 8, 2013
http://city.mirrorbooks.com/news/?action-viewnews-itemid-88522

Briefings | | |   Economy/Resources

Study Times: Standardize the Management of Internet Users and Guide Public Opinion

On June 10, 2013, Study Times, the publication of the Party School of the Central Committee of the CCP, published an article on Internet control. The article proposed to “standardize the management of Internet pubic opinion,” “cultivate mature Internet users,” and “develop platforms for dialogue between government officials and ordinary people.”

How to Handle Internet Management: 1) Filter out “negative” information. 2) Post the government authority’s information as much as possible and strengthen the journalists’ sense of self-discipline. 3) Train forum moderators, hosts, commentators, and public opinion managers to guide Internet discussions and to spread the government’s authoritative information at the appropriate times. 4) When accidents or tragedies occur, immediately express sympathy for the victims and report the details of the plans to help and the progress of those plans. Avoid using over-stimulating photos and words and get approval from the relevant officials before publishing anything. Train Internet Users: 1) Enhance Internet users’ ability to regulate themselves. 2) Strictly control the messages, enhance the self-regulation of the Internet media industry, and “purify the Internet communication channel." 3) Let Internet users realize that they should not focus on “swearing” at the government or at enterprises. Develop a Dialogue Between Government Officials and Ordinary People: 1) Reach a consensus by dispelling public anger. 2) Control the right to speak and guide public opinion. 3) Government officials should chat with the Internet users and improve their effectiveness in guiding public opinion. 4) Include Internet work in the system for evaluating government officials.

Source: Study Times, June 10, 2013
http://www.studytimes.com.cn:9999/epaper/xxsb/html/2013/06/10/04/04_35.htm

Briefings | | |   Information/Technology

Chinese Scholar in the U.K. Praises Xi Jinping’s 12-Word Strategy to Nail Down the U.S.

On June 10, 2013, China Gate and several other overseas Chinese websites in the U.S., Canada, and Australia published Shujie Yao’s article titled, “Xi Jinping’s Diplomatic Strategy to Deal with the U.S.: Using 12 Chinese Language Characters (3 four-character phrases) to ‘Nail down’ the United States.”
 
Shujie Yao, a Professor of Economics at the University of Nottingham in the UK, gave high praise to Xi Jingping for being smart in the way he obtained the 2-hour “intimate” meeting with U.S. President Obama on June 7, 2013.  The 12 Words for the Diplomatic Strategy are: 1) Use the diplomacy of showing off his wife’s beauty; establish China’s first lady’s image.  2) Allow someone to be free so as to be successful in apprehending him later: ignore the U.S. in Xi’s first overseas trips for the purpose of winning U.S. attention. 3) Rescue the kingdom of Zhao by besieging the capital of the kingdom of Wei: To solve the problems in Asian Pacific areas, China must gain wide support from Africa, South Asia, Latin America, Russia, and other countries first. Then, China will have enough energy to negotiate effectively with the U.S. and with Eastern Asian countries.

[Editor’s note: The reference to Zhao is about a well-known Chinese stratagem to let the enemy fully commit himself against his prey, and then, instead of rushing to the rescue, attack the enemy’s dearest possessions.]

Source: China Gate, June 10, 2013
http://www.wenxuecity.com/news/2013/06/10/2446069.html
http://www.neixun.cn/sanshiliuji/sanshiliuji_yingwen_02.htm

Briefings | | |   US-China Relations

China Prevents MasterCard from Handling RMB Transactions

Xinhua recently reported on a dispute between MasterCard and the Chinese authorities on the right to handle RMB transactions. The report is based on British media reports of a document that the Chinese central bank issued  asking online payment platform EPayLinks to stop cooperating with MasterCard in conducting RMB business. About a year ago, the World Trade Organization (WTO) ruled that the Chinese government’s protection of the monopoly power of UnionPay, China’s bankcard association, in RMB credit card transactions broke the WTO agreement. Since that ruling, the Chinese central bank has not made any changes. It seems the Chinese authorities will continue to maintain a tough position on this matter. China is one of the fastest growing credit card markets in the world. China issued 46 million credit cards in 2012. According to MasterCard’s estimate, China will surpass the United States in 2020 to be the largest credit card market in the world. The Chinese RMB-based credit card monopoly, UnionPay, doubled its business volume over the past four years. EPayLinks argued in this new case that its business with MasterCard did not break any Chinese law since all operations are handled by the Hong Kong branch.
Source: Xinhua, June 3, 2013
http://finance.cankaoxiaoxi.com/2013/0603/219334.shtml
Briefings | | |   Economy/Resources

Beijing News: China Started Trade Investigation of EU Wines

Beijing News recently reported that the Chinese Ministry of Commerce held a press conference on June 5, at which it announced the beginning of an anti-dumping and countervailing investigation of wines imported from the European Union (EU). The EU made a decision on June 4 to charge anti-dumping duties for photovoltaic solar products imported from China. The EU decision had a major impact on a trade volume of over US$20 billion. Several EU member countries voted against the EU decision but could not change the final outcome. The China-EU wine trade volume is relatively low (around US$1.04 billion). However this sector has enjoyed a rapid growth in the past several years. The wine industry in the EU has a long supply chain across the entire Union. Its export profit margin is much higher than that of the photovoltaic solar products. The Chinese investigation is especially damaging to wines from France, Spain, Italy, and Germany. There is still room for negotiation. The Chinese Fair Import/Export Trade Bureau insisted that the Chinese investigation has nothing to do with the EU decision on photovoltaic products. It is  based solely on the requests that the the Chinese wine industry filed. 
Source: Beijing News, June 6, 2013
http://epaper.bjnews.com.cn/html/2013-06/06/content_437684.htm?div=-1
Briefings | | |   Economy/Resources