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China Review News: China’s Foreign Exchange Reserves Start to “Lose Weight”

According to recent data released by China’s Central Bank, by the end of the fourth quarter of 2011, China’s foreign exchange reserves had fallen to $ 3.181 trillion, a decrease of $20.55 billion or a decline of 0.6%, compared to the end of the third quarter of 2011. The decline in the foreign exchange reserves occurred because of China’s policy adjustments, the slower speed of China’s economic growth, and capital outflows.

Source: China Review News, February 14, 2012
http://gb.chinareviewnews.com/doc/1020/0/9/5/102009536.html?coluid=10&kindid=253&docid=102009536&mdate=0214084959

International Herald Leader: The Western Capitalist System’s Crisis and the Resurgence of Marxism

On February 13, 2012, the International Herald Leader, a newspaper under Xinhua News Agency, published an analytical article on its front page in which it observed, “The capitalist system has encountered the biggest crisis since its birth.” Holding Western capitalism accountable for the financial crisis and the economic recession since 2008, the article described “signs of a resurgence of Marxism” in the Western world.

“After the 21st century, though crises have occurred in the Soviet Union and Eastern Europe, contradictions still exist in the capitalist society. That is why more and more scholars value Marxism. Especially since the financial crisis, more and more people have been accepting the Marxist doctrine.”

Source: International Herald Leader, February 13, 2012
http://news.xinhuanet.com/herald/2012-02/13/c_131402521.htm

The Chinese Banking System Profits from Being a Monopoly

A-Finance recently published an article analyzing the fact that the profit that the Chinese banking system makes is greater than that of the tobacco industry or the oil industry. According to CBRC (the China Banking Regulatory Commission), in the first three quarters of the year 2011, the increase in the banking system’s annual profit was 35.4%. Those who work in the banking industry have an average income that is dramatically higher than any other industry in China. An analysis showed that the primary sources of profit are the high interest differential, frequently collected fees, and a massive amount of “wealth management” products. The net interest differential contributes from 75.7% to over 90% of the banking system’s annual income. The differential is the highest in the world and is determined by the government. Meanwhile, 79% of the services that banks provide are fee-based. Today, these fees are ten times higher than they were ten years ago. Chinese banks are considered monopolies both as institutions that take deposits and as lenders.

Source: A-Finance, February 6, 2012
http://www.afinance.cn/bank/yhxw/201202/420475.html

Legal Evening News: Excessive Births Abroad Will Be Fined upon Return

Legal Evening News recently reported that, according to the National Population and Family Planning Commission, if both parents are residents of Mainland China, then giving birth to a second child abroad will result in a fine upon return. The standard for the fine will vary depending on the couple’s residence location. Recently many pregnant women have traveled to Hong Kong to deliver their babies. The Chief of the Family Planning Committee of Guangdong Province issued a warning in this regard and declared that giving birth to a child beyond the first one in Hong Kong was illegal for Mainland parents. If a parent is a Communist Party member and a government official, he or she will lose that Party membership and the government work.

Source: Legal Evening News, February 10, 2012
http://www.fawan.com/Article/gn/sh/2012/02/10/170142145396.html

Real Name will be Required to Use Microblogs

PCOnline recently reported that, starting on March 16, 2012, the four primary microblog providers will require users to register with their real names. Anonymous users can only browse the microblogs but cannot submit their own. In the new user registration process, the user’s name and National ID number will be checked against the national police verification system. An initial trial of the “Real Name System” took place in Beijing and it is now being deployed nationwide. Users expressed concern over the new system, mainly on the privacy front as well as the freedom of speech side. The government suggested that the new requirement will help stop rumors and illegal activities. Microblogging has become a very popular means of communication in China. Internationally well-known microblog service providers, such as Twitter, are banned in China.

Source: PCOnline, February 8, 2012
http://pcedu.pconline.com.cn/softnews/yejie/1202/2666630.html

Scholar: China’s Strategic Oil Stockpile Had a Late Start and May Have Lost Opportunities

Xinhua‘s Huanqiu interviewed Lin Boqiang, the Director of the China Center for Energy Economics Research at Xiamen University. In the interview, Lin commented on China’s strategic oil stockpile. He observed, “Unfortunately, our response to the demand to stockpile oil came late. Had we taken action sooner, we would have been in a better position to take advantage of the international oil price dive that occurred in 2008 and to enhance our stockpile capability.”

The China National Petroleum Reserve Center was established on December 18, 2007. The plan was to complete the build-up of China’s reserves within 15 years in three phases. The first phase has been completed and the second phase is scheduled to conclude in 2012. The third phase is in the design stage and is scheduled for completion in 2020. At the present time, China’s strategic oil stockpile will last 50 days. Lin said that after the second phase, China will have 60 days of oil stockpiled, and when the project is completed the oil reserve is to reach 90 days. He estimated that the U.S. may have about 90 to 100 days of strategic oil stockpiled, and can support well over six months. Currently about 55% of the oil that China consumes is imported.

Source: Huanqiu, February 10, 2012
http://mil.huanqiu.com/Observation/2012-02/2426983.html

Changes in Chinese Companies’ Overseas Investments

Xinhua published an article which observed three changes have occurred in 2012 in Chinese companies’ overseas investments. First, there was a change in the investment philosophy from the time of start-up to merger and acquisition. If a Chinese company builds a new business in competition with existing traditional industries, clashes with those local businesses will likely occur; the Chinese business often becomes the “enemy” in the local community. Second, the sectors where investments are made appear to be more diversified, moving from the resources sector to the technology, brand name, and distribution sectors. There have been political complexities associated with the acquisition of resources overseas. These acquisitions have tended to occur in Africa and South America, and have brought geo-political risks that cannot be ignored. The acquisition of technology, brand name, and distribution businesses make up for the weakness in manufacturing in China and also can be easily accepted overseas. Thirdly, recent acquisitions have involved private equity (PE), which is viewed as good progress. With PE’s expertise in investment, their participation has enhanced the success rate of China’s acquisitions.

Source: Xinhua, February 12, 2012
http://news.xinhuanet.com/fortune/2012-02/12/c_111515389.htm

There is Nothing Remarkable about the U.S. New Military Strategy

Guangzhou Daily published a commentary criticizing the United States’ new military strategy. “The new U.S. military strategy shows that, as its national power is declining, the U.S. is helpless – it has no choice but to adjust it military strategic objectives and downsize its military forces. At the same time the U.S. demonstrates that it is obstinate in maintaining its superior military power and world hegemony. It is attempting to get away from wars it cannot afford to continue, and is aiming its strategic spearhead very unwisely at its so-called ‘potential adversary’ [China] that upholds peaceful development. … Of course, we do not want to be treated this way, but the U.S. insists. Therefore we do not need to cover up for the U.S. Secondly, there is no need to panic. It is nothing more than containment and constraint, to assemble and win over allies, and to compress our strategic space. We have had that experience before and there is nothing remarkable about it.”

Source: Guangzhou Daily reprinted by Xinhua, February 12, 2012
http://news.xinhuanet.com/world/2012-02/12/c_122689185.htm