People Daily (overseas edition) published an article to reflect Chinese scholars’ opinions on U.S. Federal Reserve Chairman Ben Bernanke’s recent hint that the U.S. may implement a third round of quantitative easing of monetary policy. Zhou Xiaochuan, Director of the Bank of China, asserted that the U.S. should shoulder more responsibilities and not just consider the economic needs of the U.S. [when it prints dollar bills]. The U.S. quantitative easing of monetary policy will result in capital moving into other emerging economic entities, making it more difficult for these nations to control inflation. The Vice President of Chengdu University, Zhang Qizuo, expressed the belief that the U.S. adopts the tactic of inflation and devaluing the dollar to covertly default on its debts so as to shift the risk of the U.S. debt crisis to others. This is the ultimate and biggest risk for global investors. Yu Yongding, a member of the Chinese Academy of Social Sciences, noted that China is the biggest creditor in the world. The biggest victims of U.S. currency devaluation are its creditors.

[Ed. Contrary to Chinese media reports, many Western media indicate QE3 is unlikely during an election year.]  

Source: People’s Daily, April, 4, 2012
http://world.people.com.cn/GB/14549/17571541.html
Reuters, April 3, 2012
http://www.reuters.com/article/2012/04/03/us-markets-usa-bonds-idUSBRE8320UJ20120403

On April 1, 2012, Qiushi, a journal of the Central Committee of the Chinese Communist Party, published an article written by Du Qinglin, the head of the United Front Work Department of the Chinese Communist Party. The title was, “Vigorously Strengthen the Development of the United Front Culture.” According to the article, the United Front includes different political parties, ethnic groups, religions, classes, and different organizations in Hong Kong, Macao, and overseas. With the cooperative political Party culture, the United Front must always follow the lead of the Chinese Communist Party. It must always adhere to the socialist political development path with Chinese characteristics and demonstrate the characteristics and advantages of the political system and political Party system in China.

Source: Qiushi, April 1, 2012
http://www.qstheory.cn/zxdk/2012/201207/201203/t20120329_148684.htm

On March 30, 2012, Qiushi, a journal of the Central Committee of the Chinese Communist Party (CCP), reprinted an article from http://www.chinareform.org.cn/ titled “The Key to Reform Is to Distinguish State-Owned Enterprises  from Public Sector Enterprises.” The article differentiates State-Owned Enterprises from Public Sector Enterprises. According to the author, state-owned enterprises refer to those enterprises in key industries (such as energy, IT, manufacturing, etc.) that, in Western free market economies, would commonly be private enterprises, while public sector enterprises refer to those in non-competitive industries which private entrepreneurs would find unprofitable. The article says public sector enterprises are common to both socialist and non-socialist countries, while the state-owned enterprises are unique to socialist countries.

According to the article, state-owned enterprises are a socialist symbol with Chinese characteristics and the economic foundation of the CCP, the ruling Party. Therefore, the CCP’s ruling position requires that it must maintain state-owned enterprises. Although China should have public sector enterprises based on the state capitalist enterprise system, just like other countries, China must keep state-owned enterprises with socialist characteristics.

The article concludes that the fundamental problem that socialist economic system reform must seriously study and resolve is how to enable state-owned enterprises and public sector enterprises to coexist and develop.

Source: Qiushi, March 30, 2012
http://www.qstheory.cn/jj/jjggyfz/201203/t20120330_148796.htm