Reports - 13. page

[Editor’s Note: China Business News published an article by Xia Bin, the Director of the Financial Research Institute of the Development Research Center of the State Council. Xia argued that urbanization (城镇化), or developing and expanding towns by absorbing peasants from villages, should not be seen as the solution to making a "breakthrough in reform," because it requires a huge investment that the government does not have. He suggested that a real breakthrough should be made by reducing the income gap between city residents and peasants and by giving the land back to the farmers (so that they can enjoy the appreciation in land value).

Xia also acknowledged that a reform that would reduce the income gap would cause a huge fiscal deficit for both the central and local governments. His solution was to re-direct the huge profits from State-Owned Enterprises (SOEs) to cover the losses.

The article advocated reform to tackle a few tough obstacles to economic development inherent in the structure of China’s communist system. However, Chinascope’s editors feel that the author’s suggestion for reform, insofar as it reduces the government’s income to give more to the general public, may fall on deaf ears in the Communist Party.] [1]

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[Editor’s Note: Qiushi published an article discussing different opinions on whether to continue reform in China. It talked about the importance of reform and how reform is needed. However, it then stressed that the most critical issue is the political direction that reform takes. China’s reform must take place under the direction of the Chinese Communist Party (CCP). The major political reform that Western countries hope will take place in China will never happen. To strengthen its point, the article discussed Deng Xiaoping’s words, "It is a dead end if we don’t reform or open up," which some people keep quoting in order to promote further (political) reform. The article argues that the correct way to say it is, "It is a dead end if we don’t insist on using Socialism as the basis of our reform; and it is also a dead end to insist on reform that embraces Capitalism." The following is a translation of the article.] [1]

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[Editor’s Note: Dai Xu, the Director of the Marine Security and Cooperation Research Institute, is an Air Force Colonel who is well known for his anti-American Hawk statements. He is frequently invited to give lectures to different groups around China. Such lectures often serve as "political or nationalistic education" for the younger generations and particularly for students in military schools. Dai has attracted a sizable base of Internet followers due to his extreme nationalistic talk which is highly promoted by China’s state-run media. He also is said to be well regarded among the leaders of the Central Military Commission. Dai holds that the United States fabricated that hacking emanated from China’s military headquarters and that, furthermore, the U.S. is waging a "cultural war" throughout the world to spread "American values." The following is a translation of his recent article on the cyber war between the U.S. and China.]

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[Editor’s Note: Qiushi Online republished an article from Red Flag Manuscript on Western Market Fundamentalism. The article claimed that the recent global financial crisis has proven that Capitalism is approaching its end; that the Wall Street oligarchs and the U.S. government launched an unprecedented disaster affecting everyone on the planet; and that the world is turning to Marxism for a solution. The author, Yu Zurao, is a guest researcher at the World Socialism Research Center, Chinese Academy of Social Sciences. The following is a translation of the article.] [1]

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[Editor’s Note: In a recent article, Xinhua reported that the U.S. Senate added an amendment to its National Defense Authorization Bill for Fiscal Year 2013, stating that, while the United States took no position on the sovereignty of the Senkaku Islands (called the Diaoyu Islands in China), it acknowledged that Japan had administrative authority over them. Xinhua collected and reviewed many of its recent reports on the Diaoyu Islands. In the article it criticized the U.S. Senate for making a wrong decision and claimed that “the U.S. is the controlling hand behind the scenes on the Diaoyu Islands issue.” It further alleged that the U.S. wants to “use the Diaoyu Islands to distract and interfere with China’s strategic focus in order to deter China’s rise.” The following is a translation of excerpts from the article.] [1]

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[Editor’s Note: The U.S.-China Economic and Security Review Commission was mandated in the year 2000 to report to Congress annually on the security implications of trade with the People’s Republic of China. It recently published its 2012 report, "An Analysis of Chinese Investments in the U.S. Economy." [1] Bill Gertz discussed some of the report’s conclusions in an article he wrote for the Washington Free Beacon, "Congressional Report: Chinese government-controlled enterprises threaten U.S., world economy." Gertz summarized from the

report, "The Chinese system of state capitalism or ‘capitalism with Chinese characteristics’ has blocked many of the potential benefits of a free market, not only in China, but among China’s trading partners," "The state-owned sector in China can undercut prices charged by privately held competitors globally due to a variety of subsidies granted by the Chinese government: low-interest-rate loans; below-market-rate land, fuel, and electricity; special exemptions from environmental and labor regulations; tax abatements and preferences." [2]

Recently, the Chinese Communist Party (CCP) agreed that having the backing of state funding and favorable government policies gives China’s SOEs a huge economic advantage. Hu Angang, Director of the Center for China Studies, Tsinghua University, wrote an article on for Red Flag Manuscript, a publication of the Central Committee of the CCP in which he argued that, although China’s SOEs are a form of enterprise and compete in the global market, they differ greatly from Western enterprises in that they are state-owned and under the leadership of the CCP. China’s SOEs have the advantage of being backed by state-owned capital and, as such, have the ability to generate strong competition to rival the world’s top 500 enterprises. They should be the leading force for China’s "going abroad" strategy. The following are translated excerpts from the article.] [3]

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[Editor’s Note: Qiushi Online published an article titled “China’s Strategy on Grain Security.” It discussed the national security issues related to China’s food supply and considered several questions. Will China itself be able to produce the agricultural products needed to feed its population? How should China balance the production of different agricultural products? How should it deal with foreign investments and develop domestic farmers? These issues are discussed in the following excerpts translated from the article.] [1]

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[Editor’s Note: Caijing Magazine recently interviewed Professor Wu Jinglian, a senior research fellow at the Development Research Centre of the State Council of the People’s Republic of China. During the interview, he stated that China’s economic and social conflicts have reached a critical point and that China must press forward with further reform to establish and improve a market economy that is based on competition. He also criticized China because it has, in recent years, strengthened the government’s and the state-owned enterprises’ (SOEs) "control power." The following are excerpts from the interview.] [1]

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