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China’s Fiscal Revenue Slows Down, with Non-tax Revenue Filling the Gap

The Ministry of Finance’s statistics show that the fiscal revenue for January-September was 9.1 trillion yuan (US$1.5 trillion), an increase of 892.5 billion (US$143 billion) or 10.9% over the same period last year and 18.6 percent points lower than the growth for the same period last year. The tax revenue was 7.7 trillion yuan (US$1.2 trillion), a year-over-year increase of 8.6 percent, down 18.8 percent from the same period last year.

According to an official from the Ministry, since the beginning of this year, due to the downward macroeconomic pressure, the local fiscal revenue growth turned weak. To compensate for the gap, non-tax revenues, or various types of fees, are becoming an increasing source of fiscal revenue.

For the first three quarters of 2012, the non-tax revenue in many provinces and cities has grown far more than the tax revenue. Tianjin saw an increase in non-tax revenue (54.75%) that was more than 40 percentage points higher than the increase in tax revenue (10.86%); Anhui’s non-tax revenue (52.1%) increased more than 30 percentage points more than tax revenue (15.3%); Guangdong had non-tax revenue (25.89%) growing higher than the tax revenue (8.15%) of nearly 18 percentage points. In some places, imposing fines has become an important part of the non-tax revenue.

Source: Nanfang Weekend, October 30, 2012
http://www.infzm.com/content/82459

China News Week: American Groups, in the China School Camp (Pro-China) or the Anti-China Camp?

China Newsweek published an article that categorized a handful of American organizations into one of two camps: the “China School (pro-China) camp” and the “anti-China camp.” 

The “anti-China camp” includes the following: 1) the U.S. military industrial complex (U.S. military institutions, arms dealers, and its associated consortium); 2) the AFL-CIO; 3) American religious organizations; 4) Human Rights Watch; 5) The National Endowment for Democracy; 6) the U.S. Business & Industry Council; 7) the U.S. Congressional Human Rights Caucus; 8) the U.S. Tibet Committee for Refugees; 9) Radio Free Asia; 10) the United Steelworkers of America; 11) the United Auto Workers Union; 12) the Alliance of American Manufacturing. 
The “pro-China camp” includes: 1) the America-China Society; 2) the National Committee on United States-China Relations; 3) the United States-China Business Council (USCBC); 4) the Sino-U.S. Joint Economic Committee; 5) the Sino-U.S. Joint Commission on Commerce and Trade; 6) the National U.S.-China People’s Friendship Association (USCPFA); 7) the U.S.-China Chamber of Commerce; 8) The Committee of 100; 9). the U.S.-China Association for Promotion of Economy and Trade (UCAPET); 10) the China General Chamber of Commerce – U.S.A.; 11) the American Chinese Federation of Industry & Commerce; 12) Large American enterprises that have a high degree of globalization, such as Microsoft, Boeing, and the giants of the U.S. auto industry. 
 Source: China Newsweek, October 25, 2012 
http://insight.inewsweek.cn/report-7630-page-6.html

Wen Jiabao Requests Open Investigation on His Property and Assets to Prove His Innocence

On October 29, 2012, China Gate reprinted an article from Ming Pao (the original article cannot be found) titled “Wen Jiabao Sent a Letter to the CCP Central Committee Requesting an Open Investigation of His Property and Assets to Prove His Innocence.” Wen asked for the “immediate establishment of a specialized agency … to carry out a full and open investigation of the rumors of my corruption … by inviting both Chinese and foreign media representatives to participate in the investigation.” Mr. Wen said that he and his family members would “unconditionally and absolutely cooperate with an open investigation.” Mr. Wen also said that if an open investigation is not allowed, an independent investigation is welcome; if no investigation is allowed, he asked permission from the top CCP leadership to allow him to publicize his personal property and assets. Wen Jiabao has suggested many times that all the CCP and government officials should be open with the public about their property and assets. He said he was willing to be the first one to publicize his assets.

This is the fifth time Wen Jiabao formally wrote letter to the CCP top leadership requesting an independent investigation of himself and his family members. Although the CCP top leadership has never openly accepted Wen Jiabao’s request, an agency led by a high official has conducted several very strict investigations of the so-called Wen Jiabao family corruption case. No evidence of any corruption has been found. 

Source: China Gate, October 29, 2012
http://www.wenxuecity.com/news/2012/10/29/2054108.html

Apple Daily: Wen Jiabao May Publicize His Family’s Assets

On October 28, 2012, China Gate reprinted an article from Apple Daily (the original article is only available to Apply Daily subscribers) titled “It is Said that Wen Jiabao Will Publicize His Family’s Property and Assets.” Recently, a New York Times article alleged that Wen’s relatives had illegally accumulated a fortune amounting to US$2.7 billion. Two lawyers responded on behalf of Wen’s family members and denied the allegations.

If Wen does make information about his family members’ property and assets available to the public, he will be the first CCP national level leader, since the establishment of the People’s Republic of China, to dare to let the public know about his family’s assets. Such an action may cause a chain of reaction among the CCP leadership community. It is not known at this time whether Wen will receive his colleague’s consent to move forward.

Source: Apple Daily, October 28, 2012
http://www.wenxuecity.com/news/2012/10/28/2052290.html
http://hk.apple.nextmedia.com/international/art/20121028/18050776

Xi Jinping Admits that the Legitimacy of the CCP Ruling Position Is in Danger

On October 28, 2012, China Gate reprinted an article from Hong Kong’s Trends Magazine titled “Xi Jinping Admits, in a Secret Meeting, that the Crumbling Legitimacy of the CCP’s Governance Has Set off Alarm Bells.”

According to Hong Kong’s Trends Magazine, at a secret meeting, incoming CCP Chairman Xi Jinping again admitted that the CCP faces a fatal crisis. On September 26, 2012, at the 41st enlarged meeting of the 17th CCP Politiburo Standing Committee, Xi Jinping gave preparatory comments about the 18th National Congress and its agenda, putting forward 5 key issues. Xi asked, "Why is there so much tension between the people and the CCP?" and "Why is the people’s distrust of the Party growing?” He also pointed out that the CCP’s legitimacy in governance is crumbling, setting off alarm bells to all.  In May, Xi Jinping talked about the collapse of the CCP. At that time, the Chinese Communist Party’s own investigation showed that 90% of the family members of CCP Central Committee Officials have emigrated overseas.

Source: China Gate, October 28, 2012
http://www.wenxuecity.com/news/2012/10/28/2051895.html

People’s Daily: Government Planning 70 Billion RMB Rescue Package for the Solar Industry

People’s Daily recently reported that the Chinese government is planning to invest in the domestic solar industry. The planned total investment will be around 70 billion RMB. This plan is in response to the fact that both the United States and the European Union are filing anti-dumping and countervailing cases against China. The Chinese solar industry relies heavily on exports. Sixty percent of the production output goes to the European Union, while 30 percent goes to the United States. With the coming trade wars, the entire Chinese solar industry faces the possibility of total bankruptcy. The Chinese government’s plan is to establish a large domestic market that will be funded mainly by government investment. Meanwhile the government is also coordinating an effort to lower the cost of delivering solar-generated power to national networks.
Source: People’s Daily, October 27, 2012
http://energy.people.com.cn/n/2012/1027/c71661-19407371.html

CRN: Significantly More Environmental Emergencies in China

China Review News (CRN) recently reported that the 11th National People’s Congress Standing Committee held a seminar focusing on environmental protection issues. Since 1996, major environmental emergency events increased at an annual rate of 29 percent. Since 1995, the Ministry of Environmental Protection has directly handled 927 emergency events. In 2011, major emergencies suffered a 120% increase over 2010, especially in incidents involving heavy metals and dangerous chemicals. Experts suggested in the seminar that the country needs to establish an environmental public interest litigation system and also to pass an Environmental Damage Compensation Act. It is widely recognized that the government’s current environmental information lacks sufficient transparency and that environmental regulations are incomplete and vague. In the past decade, only one percent of the environmental conflicts were resolved through legal channels. Even today, much large scale environmental damage remains unresolved. 
Source: China Review News, October 27, 2012
http://www.zhgpl.com/crn-webapp/doc/docDetailCNML.jsp?coluid=7&kindid=0&docid=102283121

Xinhua: Hong Kong Increases Real Estate Cost for Outsiders

Xinhua recently reported that the Hong Kong government just extended the real estate stamp duty for another three years. It also added a 15 percent duty for buyers, which will apply to local businesses and to non-residents. According to the Hong Kong government, the new requirement will help lower the cost that local permanent residents have to pay to purchase real estate. Another goal of the new policy is to place a more substantial restraint on the recent speculation in the housing market. Large outside capital has been targeting Hong Kong real estate. However, the government suggested that this new tax is a temporary measure designed to reduce the number of external buyers. Eventually the policy will expire. The background of this recent change in real estate policy is the loss of balance between demand and supply. The influx of capital has resulted in a sharp increase on the demand side of the housing market. If the new policy is not strong enough to improve stability, the government is determined to do more.
Source: Xinhua, October 26, 2012
http://news.xinhuanet.com/fortune/2012-10/26/c_113513933.htm