Chinascope – Page 978

Twelve Challenges China Faces in 2012

Qiushi Journal, a bi-weekly magazine published of the Central Committee of the Chinese Communist Party, recently republished an article from the Tokyo-based magazine The Diplomat on the twelve key challenges China will face in the year 2012: (1) A once-in-a-decade political transition in October; (2) A slowing of China’s economic growth; (3) High local government debt; (4) Falling real estate prices; (5) China’s debt problems may have major repercussions for countries benefitting from China’s commodity demand boom; (6) Tighter domestic media reporting guidelines; (7) Intensified policies to drive growth in Central and Western China; (8) A heightened risk of inflation; (9) The increased outbound investment of money seeking safe havens; (10) Continued friction and possible skirmishes in the South China Sea; (11) Drilling China’s first ultra-deepwater oil/gas well; (12) The ongoing Gulf of Aden/Indian Ocean anti-piracy mission.

Source: Qiushi Journal, January 16, 2012
http://www.qstheory.cn/jj/jjyj/201201/t20120116_135021.htm

Original: The Diplomat, January 8, 2012
http://the-diplomat.com/china-power/2012/01/08/chinas-2012-challenges/

Briefings | | January 31, 2012 | Government/Politics

State Official Advocates Use of Foreign Exchange Reserve to Solve Domestic Problems

Zhang Anyuan, the Director of the Office of Fiscal Finance at the Economic Research Institute of the National Development and Reform Commission, proposed two approaches to use regarding China’s foreign reserves. “Rather than watching our foreign exchange reserves shrink in value, we should use them to solve domestic problems.” The first approach is to “convert financial assets into reserves of resources,” whereby China encourages the exploration but limits the production of oil, coal, iron ore, and non-ferrous metals. This would increase their imports, reduce the foreign exchange reserves and keep the reserves of resources available in China. The second approach is to “inject funds into local financial entities so as to increase their credit ratings.” According to Zhang, local financial entities have entered into the peak period when payments are due on the government bonds they previously issued. Some of them may face a high probability of liquidity risks. Such an injection of funds will help improve their credit ratings so that these local financial entities can issue more bonds, domestically or in Hong Kong, to solve their liquidity problems for the payments on the bonds they previously issued.

Source: Modern Bankers reprinted by Sina.com, January 19, 2012
http://finance.sina.com.cn/leadership/mroll/20120119/160911242096.shtml

Briefings | | January 30, 2012 | Economy/Resources

CRN: China Should not Join the U.S. in Sanctioning Iran

China Review News published a special commentary stating that China should not join the United States in sanctioning Iran unless Iran openly opposes the resolution of the Security Council of the United Nation. The poor economy in the United States has made its Secretary of the Treasury (Timothy F. Geithner, who recently visited China) seek China’s support for an increase in sanctions against Iran. If that is the case, “The U.S. Secretary of the Treasury will leave China empty handed. Sanctions are a double-edged sword. For decades the sanctions that Western countries have taken against Iran have not caused the collapse of the Iranian economy. In fact the Western countries have lost a lot of business interests. The Chinese government will absolutely not agree to join the camp that is taking sanctions against Iran unless Iran openly opposes the resolution passed by the U.N. Security Council and moves further and further away on the issue of nuclear weaponry."

Source: China Review News, January 25, 2012
http://gb.chinareviewnews.com/doc/1019/7/5/4/101975417.html?coluid=136&kindid=4710&docid=101975417&mdate=0125000148

Briefings | | January 30, 2012 | Geo-Strategic Trend

Chinese State Media on the Change in U.S. Military Strategy

[Editor’s Note: After President Obama announced the change in military strategy on January 5, 2012, Chinese media published a series of comments about the new U.S. strategy of “targeting China.” Rear Admiral Yang Yi, a researcher at the National Defense University Institute for Strategic Studies, stated in a commentary in People’s Daily that China is the “protector” of regional peace and the U.S. is the “troublemaker.” [1] A Huanqiu editorial suggested that China use Iran both to counter the U.S. and to gain more time for economic development in order to beat the U.S. [2] The following are translations of the two articles.]

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Reports | | January 29, 2012 | Report

Outlook Weekly: Why the West Has Been Wrong about China’s Economy

Outlook Weekly published an article about the West’s pessimistic forecasts for China’s economy. The article pointed out that these negative Western forecasts about China’s economy have never materialized. It stated that there are three reasons: One, Western economists do not want to see a rising China and have the wishful thinking that China will go downhill and collapse. Two, the Western economists measure China against the history of the growth of Korea and Japan. They believe that if other countries such as Korea and Japan did not make it, then China will not be able to make it either. Three, China’s market economy is one that is atypical. When Western economists reviewed the prospects for China’s economy, they relied on the methodology and standards applicable only to typical market economies. That is why their grim forecasts for China have failed to materialize.

Source: Outlook Weekly reprinted by sohu.com, January 21, 2012.
http://news.sohu.com/20120121/n332841922.shtml

Briefings | | January 27, 2012 | Economy/Resources

China’s Ambassador to UK: China is not a Communist Country

On January 23, 2012, Jeremy Paxman interviewed China’s Ambassador to the United Kingdom, Liu Xiaoming, live on BBC 2’s Newsnight program. During the interview, Liu made the remark that China cannot be called a communist country. Paxman asked Liu whether he was a communist. In response to the question, Liu did not answer directly but stated, “Well, in China, the ruling party is the communist party. The communist party now has more than 80 million party members. But you have to remember China is a country with 1.3 billion people. So I don’t think you can call China a communist country, just as you can not call the UK conservative UK.” The Chinese Embassy in the United Kingdom has posted the full English text of the interview on its official website. Media in China, such as the popular portal sina.com, had reported the interview earlier.

Sources:
Embassy of the People’s Republic of China in United Kingdom, January 26, 2012
http://www.chinese-embassy.org.uk/eng/EmbassyNews/t899190.htm
Sina.com, January 24, 2012
http://dailynews.sina.com/gb/chn/chnnews/ausdaily/20120124/16313091588.html

Briefings | | January 27, 2012 | Government/Politics

In the U.S.-Iran Conflict, China Needs to Prepare for the Worst Scenario

Xinhua republished an article from Guangzhou Daily about how, in the U.S.-Iran conflict, China should be prepared. The article stated, “From the perspective of oil supply, if China cooperates with the United States to sanction Iran, it will undoubtedly bring us a lot of trouble. Considering the direction in which the U.S.-Iran conflict is developing, we need to prepare for the worst case scenario, that the U.S. starts a war against Iran. That way we can make arrangements accordingly in advance to assure our domestic energy supply.”

The article also suggested, “At the same time, (in making decisions) we should not just consider the issue of Iran in the context of oil. We should also consider the geopolitical situation. Even if the U.S. were to use its armed forces to strike Iran, the war would eventually end. Many countries, including China, would still need to import oil from Iran.”

Source, Xinhua, January 25, 2012
http://news.xinhuanet.com/mil/2012-01/25/c_122618892.htm

Briefings | | January 27, 2012 | Geo-Strategic Trend

Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized

Xinhua Commentaries: “Exposing the Three Major Political Deficits of the U.S.”

The CCP’s Performing Arts Troupes in the U.S.