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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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People’s Daily: Top Ten Companies That Suffered Large Losses are State Owned

People’s Daily recently reported on the final 2012 annual reports of publicly traded companies. Of those companies that suffered the largest losses, the top ten are all state-owned. These ten companies had total losses of RMB 50 billion (US$8.11 billion). They received a total of RMB 57 billion (US$9.25 billion) in government subsidies last year as well. The number one loser was China Ocean Shipping (Group) Company (COSCO), which reported a loss of RMB 9.56 billion (US$1.55 billion). The second and the third were Aluminum Corporation of China (CHALCO) and Metallurgical Corporation of China (MCC); they lost RMB 8.23 billion (US$1.33 billion) and RMB 6.95 billion (US$1.13 billion), respectively. Five of the top ten were steel companies, led by Anshan Iron and Steel, which lost RMB 4.16 billion (US$670 million). All these companies blamed the downturn in the market for their losses. However, based on a deeper study of the reports, many state-owned companies spent a large amount of money in different industries, instead of their primary ones. They especially suffered heavy losses in their stock market investments.
Source: People’s Daily, April 28, 2013
http://ccnews.people.com.cn/n/2013/0428/c141677-21313410.html
Briefings | | |   Economy/Resources

Outlook: China’s Financial System Faces Danger

[Editor’s Note: Outlook Newsweek published an article stating that China’s financial system is facing great risks. These risks range from an abundance of financial service offerings to an increasing number of companies involved in financial activities; from local government’s excess borrowing to the central government’s providing insufficient supervision. The following are some excerpts from the article.] [1]

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Reports | | |   Report

Iron and Steel Industry: Supply Exceeds Demand with High Cost and Low Profit

According to the China Iron and Steel Association, the sales for China’s Iron and Steel industry were up 0.94 percent to 875.8 billion yuan (USD$142 billion) in the first quarter of 2013, compared to the same period last year, while its first quarter profit reached $2.486 billion yuan (USD$400 million). Monthly profits in Q1 declined, with 1.3 billion (US$210 million) in January, 998 million (US$162 million) in February, and 267 million (US$42 million) in March. These figures suggest that, while the production volume remains high, it exceeds the weaker market demand. Predictions are that the overall iron and steel market will improve over last year. However it will continue to operate at a high cost and with low profit.

Source: People’s Daily, April 28, 2013
http://finance.people.com.cn/n/2013/0428/c1004-21312705.html

Briefings | | |   Economy/Resources

First Group of 50 Officials to Attend Media Training Class

On April 11, the Communication University of China and the China Public Relations Association established the first “Media Training Center for Leaders and Managers.” The training center will teach officials how to interact with the media and the public. The  first group of 50 officials will attend in mid-May. They will take a five day training course which includes the study of cases and theory; it will also include live demos and exercises.

According to Dong Guanpeng, the Principal of the Communication University of China, many leaders currently lack the skills needed to work with the media. They simply rely on the spokesperson in their work unit to deal with the media. However. that person is not the decision maker and does not have access to the overall information. There are many other media training classes in the public relations market but many of them teach skills related to how to delete social media postings rather than the skills of working with the media and public. Therefore, the first training center was meant to correct the chaotic situation in the market and attract officials from around the country. They have invited Wang Guoqing, vice-minister of the State Council Information Office to be the board director of the training center.

Source: Xinhua, April 28, 2013
http://news.xinhuanet.com/politics/2013-04/28/c_124643018.htm

Briefings | | |   Government/Politics

BBC Chinese: Party Disciplinary Measure in Question

On April 23, Jia Jiuxiang, a senior Court Official from the city of San Men Xia in Henan Province died just 10 days after he was placed in Shuanqui (a disciplinary measure outside the regular legal system in which Party members are detained and interrogated). This is the second similar case following another official from Wen Zhou City in Zhe Jiang Province, who also died during Shuanqui. According to Jia’s wife and sister who managed to see Jia’s body, his body showed obvious signs that he had been beaten.

Si Weijing, the defense attorney working on the case, told BBC Chinese that he has asked for an investigation of the case. Si also mentioned that, this time, it appeared that the Chinese media did not seem to block the news report on Jia’s death. Some commentators suggested that, if the official media covered this case, it may indicate that the central administration has started to pay attention to the rights of those people who are under Shuanqui.

According to Si Weijiang, China has adopted some changes to the legal system which restrict the illegal measures used during interrogation of suspects. However since Shuanqui is an internal disciplinary measure used within the Party system, it is not subject to the requirements of the legal system. Therefore a person under Shuanqui can be denied the right to sleep and is also subject to all kinds of torture. Si told the BBC, “The central administration has tried to curb corruption for so many years, but corruption does not appear to be contained. Therefore Shuanqui, a disciplinary measure that is outside of the legal system, is not an ideal way to fix the problem.”

Source: BBC Chinese, April 24, 2013
http://www.bbc.co.uk/zhongwen/simp/china/2013/04/130424_henan_death_official.shtml

Briefings | | |   Government/Politics

Chinese Experts: Obama’s Second Term China Policy Will Reinforce both Contact and Precaution

On April 15, 2013, following U.S. Secretary of State John Kerry’s visit to China, the Shanghai Institute for International Studies held a forum. Experts and scholars from the institute discussed the Obama administration’s China policy for his second term. 

Experts believe that, in his second term, the Obama administration will continue the main approach from his first term, that is, "contact plus precaution." However, the degree of engagement will be deeper and precautionary actions will also be greater. Washington believes that only by opening up overseas markets and reviving its domestic manufacturing industry will the United States be able to restore its economic strength and fortify its No. 1 position in the world. Therefore, the Obama administration will continue to strengthen economic and trade ties with China to boost its economic power. Meanwhile, the U.S. always believes that in order to ‘integrate’ China into the U.S.-led international system, it must maintain its contact with and influence in China. 
At the same time, Obama’s second term will also increase its precautions against China. This is mainly reflected in how, in many security issues, the United States joins forces with its allies in the Asia-Pacific region against China. This trend may continue over the next two years. Although the U.S.-Japan and the U.S.-Philippine joint security alliances are the products of the Cold War and are not effective in regional security issues, the United States still considers it the "best" choice to guard against China. 
As for North Korea, the Obama administration will continue the policy from his first term: North Korea is not a direct threat to U.S. national security; the North Korea problem is not a priority for United States’ diplomacy. The main goal  of the White House is to prevent the situation in the peninsula from getting out of control. 
For the development of Sino-U.S. relations in the next four years, experts believe that it is going to be a "more cooperative and more competitive" situation. 
Source: Jiefang Daily, also People’s Daily, April 16, 2013  
http://www.jfdaily.com/a/5823855.htm 
http://world.people.com.cn/n/2013/0416/c157278-21147254.html
Briefings | | |   US-China Relations

Hexun: The Seven Vested Interest Groups in China

Hexun.com published an opinion piece by Deng Yuwen, a senior deputy editor of Study Times, a journal of the Party School of The Chinese Communist Party (CCP). In his article, Deng discussed those vested interests in China that are a serious obstacle to further reform in China.
 
“It has become common knowledge that vested interests are a serious obstacle to deepening reform in China, but to break up their resistance to reform is very difficult at this time. Even Premier Li Keqiang sighed, ‘touching these interests is often harder than touching one’s soul.’”

According to Deng, unlike vested interests in the West, China’s vested interests have their own unique features: “1.) development is unbalanced; 2.) forms are ambiguous and transitional; 3.) abnormal profiteering behavior has the appearance of legality; 4.) interests are exclusive of others; 5.) the supremacy of power is problematic; and (6) there is a lack of legal legitimacy.” Deng defines vested interests as “individuals or those with social status who have control over the use of power and resources and have formed interested groups or alliances with the goal of protecting their special interests.”

Deng categorizes Chinese vested interests as follows: 1.) powerful government departments and their officials; 2.) local governments and their officials; 3.) national monopolistic enterprises (particularly those centrally owned by the State and important enterprises owned by the local governments) and their senior management; 4.) foreign transnational capital and their Chinese agents, commonly known as “foreign compradors”; 5.) real estate developers; 6.) large, privately owned domestic companies, including real estate brokers and coal mine owners and financiers; and 7.) scholars, experts and professionals who are attached to the above categories of vested interests.

Source: Hexun.com, April 24, 2013
http://opinion.hexun.com/2013-04-24/153506662.html

Briefings | | |   Social Stability

Economist: Potential Risks Underlying Economic Stability Cannot be Ignored.

Zou Dongtao from China’s Central University of Finance and Economics published an opinion piece in which he discussed six potential risks underlying the stability of China’s economy and warned that these risks cannot be ignored.

Zuo stated that the foundation of economic stability is not solid and that conflicts in economic operations are accumulating. The potential risks are in the follow areas:

1. Marginal efficacy of investment is diminishing. With investment interests lacking and more investment needed to maintain the current economic growth, the investment-driven economic model is not sustainable.

2. Production capacity surplus is increasing. In the first quarter of this year, over a third of the businesses in textiles, paper, synthetic fiber, nonferrous metal, ferrous metal, and steel indicated that they have serious over-capacity.

3. Consumption of electricity in manufacturing and railroad cargo volume remain low, showing slow industrial growth.

4. The money supply demonstrates fast growth while businesses have “anemia.” Although M2 reached one trillion yuan, many enterprises are short on cash flow.

5. The revenue of the central government shows a negative growth and local government debts show increasing risks. Compared to same period last year, the central government’s revenue decreased by 5.2 percent.

6. Mid and small sized businesses continue to face serious issues. According to a recent survey of Chinese enterprises, on the most difficult issues businesses ranked the problems as follows: “labor costs rising” (78.3 percent), “excessive burden of social security and taxes” (56.2 percent), and "profit margin too low” (45.3 percent). 

Source: jrj.com.cn (Financial Sector), April 24, 2013
http://opinion.jrj.com.cn/2013/04/24073415253621.shtml

Briefings | | |   Economy/Resources