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People’s Daily: China’s Social Security Consumes 40% of Wages

People’s Daily recently reported that, according to the Ministry of Human Resources and Social Security, the current five pre-tax payment items in the social security account take 40% of a normal taxpayer’s wages. This indicator ranks number one out of all 181 countries. It is 3 times the level of the five Northern European countries, 2.8 times the level of the G7 countries, and 4.8 times the level of the East Asian countries. Meanwhile the current social security funds have a shortfall of a total of RMB 1.76 trillion. A survey was conducted on the recent plan to extend the retirement age. Of those surveyed, 93.9% opposed the plan. Only 2.4% of the people supported it. The  People’s Daily Network conducted the survey. The report ended by calling for major reform of the current social security system and the establishment of a retirement management option like the 401K model in the United States.
Source: People’s Daily, June 15, 2012
http://finance.people.com.cn/insurance/BIG5/18192058.html

Xinhua: Korean Media Discuss U.S. Military Strategic Adjustments in Korea

Xinhua recently republished an article from the Korean Daily News that discussed the U.S. military’s latest strategic adjustments. The U.S. military, not long ago, decided to keep the Korea-U.S. Joint Command as well as deploying the artillery brigade to the north of the Han River (which is closer to North Korea). These are significant decisions that are the opposite of those of President Bush. Apparently with the U.S. moving its strategic focus to Asia, the Obama administration is making corresponding adjustments in Korea to reflect the change. Another important aspect of the move is that, with the weakening of the U.S.-Japan relationship, the United States is giving more weight to U.S.-Korean cooperation in order to better contain China. Containing China seems to be the number one goal for U.S. security and its foreign relations strategy.
Source: Xinhua, June 17, 2012
http://news.xinhuanet.com/world/2012-06/17/c_123293924.htm

Xinhua: The Middle East Factor in Global Oil Prices

Xinhua recently reported that the widely expected global oil price increase did not materialize. The report suggested that, while the planned sanctions against Iran are approaching their effective date, the international oil price has actually been dropping. The reporter expressed the belief that certain Middle Eastern oil countries have been exceeding their production quota. Saudi Arabia, the United Arab Emirates, and Kuwait are named in the report as the primary countries pumping extra oil into the global market. The current Saudi Arabian daily production level has reached its highest point in 30 years. Iran has been accusing these countries of violating the OPEC quota rules. Experts believe that the global demand for oil is on the decline, mainly due to the Euro crisis. The report concluded that some Middle Eastern countries will suffer in the long-term for this over-production strategy.
Source: Xinhua, Jun 17, 2012
http://news.xinhuanet.com/world/2012-06/17/c_112232772.htm

2012 Report on Satisfaction with Life Index Published

On June 16, 2012, the China Economy Experiment Research Institute, which Capital University of Economics and Business and the Institute of Economics at the Chinese Academy of Social Sciences co-founded in November of 2011, published “The 2012 Report on the Satisfaction with Life Index for 35 Cities.” The report indicated that the satisfaction index broke the 50 mark, showing “satisfaction.” It reached 50.88, an improvement from 49.71 in 2011.

The results also suggested that higher living expenses, where the key components are commodity and housing prices, became an important factor that lowered the quality of life for urban residents. According to the results, the satisfaction with life, as expressed by the survey participants, are listed in the following order: human capital, social security, living experiences, living standards, and living expenses.

Among the cities that scored the lowest index numbers, Beijing ranked 7th from the bottom of the list.

Source: Xinhua, June 16, 2012
http://news.xinhuanet.com/local/2012-06/16/c_112230565.htm

Confidential Notice: Provide No Programming to NTDTV

New Tang Dynasty Television has reported that it obtained a hard copy of a confidential notice indicating that, at the end of 2010, the State Administration of Radio, Film, and Television of China issued an official notice that would prevent New Tang Dynasty Television, an independent oversea’s Chinese language television broadcaster, from obtaining movie and television airing rights from any of their sources. The notice was sent to the administrative offices of Radio, Film, and Television at various provincial and municipal levels with copies to the 610 Office.

According to the notice, all of the entities under the State Administration of Radio, Film, and Television of China were strictly prohibited from providing movies or television programs to New Tang Dynasty either directly or indirectly through a third party. Violators would be subject to strict fines and punishment.

New Tang Dynasty has also reported a number of instances in the past few years when overseas Chinese television movie distributors backed out of movie distribution agreements because they feared pressure from their Chinese suppliers.

(Ed: Founded by Falun Gong practitioners, New Tang Dynasty (NTD) Television is a television broadcaster based in New York City, with correspondents in over 70 cities worldwide.)

Source:
New Tang Dynasty Television, June 10, 2012
http://www.ntdtv.com/xtr/b5/2012/06/10/a715396.html

Government Criticized for Lack of Fiscal Transparency

Shanghai University of Finance and Economics and Tsinghua University jointly conducted a study on “Fiscal Transparency.” The study indicated that the none of the 31 provincial governments and only 7 out of the 81 municipal governments studied passed the fiscal transparency test.

The report indicated that even though China executed the “Regulation on the Disclosure of Government Information” four years ago, both the provincial and municipal governments have been willing to share their budget decisions; however none of them has allowed their actual spending to be publicized.

The report also suggested that the budget information that was shared was overly simplified and hard to understand. According to Deng Shulian, a professor at Shanghai University of Finance and Economics, the reason that the governments have overly simplified their budgets is that they know that some of the spending will not meet the governments’ requirements and because accountability measures are still lacking for those who fail to reveal their budget information.

Many expect that, at the upcoming 27th Meeting of the Standing Committee of the Eleventh National People’s Congress, the budget law will go through its second phase. It will then require that government bodies reveal their spending related to work associated with overseas travel, auto expenses, and entertainment.

Source: Xinhua, June 16, 2012
http://news.xinhuanet.com/politics/2012-06/16/c_123291793.htm

Hu Jintao to Visit Hong Kong

According to Sina.com, Hu Jintao may visit Hong Kong before July 1, 2012, in commemoration of the 15th anniversary of the return of Hong Kong to mainland China. Song Xiangyan, Deputy Director of the People’s Bank of China’s international trade department, announced, "President Hu Jintao will visit Hong Kong before July 1, and a set of measures to boost Hong Kong’s economy and improve local residents’ livelihoods will soon be announced." Song did not provide further details. Song said that he has taken note of the controversies involving former Hong Kong Monetary Authority Chief Joseph Yam Chi-kwong’s views about the need to reconsider the HK-US dollar peg to allow more policy leeway on jobs and growth in Hong Kong.

Source: Sina.com, June 14, 2012
http://news.sina.com.hk/news/1663/3/1/2691443/1.html

Next Year, the Shortage in China’s Pension Account Will Reach 18 Trillion Yuan

A recently released research report "to resolve the mid to long-term risk to the nation’s account for asset liabilities” predicted that the gap between the amount in the Chinese pension account and the amount due to be paid out will reach 18.3 trillion yuan [~US$3 trillion] in 2013. The report notes that, due to the impact of China’s aging population, the  co-ordinated pension account will be a huge burden for the nation’s finances. Actions have been recommended to relieve the pressure, including delaying the retirement age; allocating state-owned shares; and reforming (the retirement policies) of government departments and institutions.

The study was a joint effort between the Bank of China research team, led by Cao Yuanzheng, the chief economist for the Bank of China, and the Fudan university research group, led by Ma Jun, the chief economist for the Greater China area of Deutsche Bank.

Source:Xinhua,June 14,2012
http://news.xinhuanet.com/politics/2012-06/14/c_112210997.htm