The US-China Business Council has a useful resource to make sense of the current (2011) structure of the Chinese central government and the (direct and indirect) reporting chain for the major agencies, their work plans and bio to key leaders.
China
Recently, I have been doing research on the nature of China’s outward foreign direct investment and its impact on Australia. I found the Vale Columbia Center on Sustainable International Investment, Columbia University to be an invaluable source.
Between Karl Sauvant (former UNCTAD Director) and Ken Davies (former Global Relations Head, OECD), there have been numerous useful articles including:
- Outward FDI from China and its policy context
- Foreign Direct Investment from Emerging Markets: The Challenges Ahead
- 2010 Survey results on the development of leading Chinese multinationals conducted by School of International Management, Fudan University and Vale Columbia Center
(Credit: Remko Tanis)
Corporate accounting scandals, subprime mortgage crisis and European sovereign debts concerns aside, the next looming overseas financial crunch to hit Australia and where it can really hurt is China’s mounting municipal debts. The FT and Citibank estimated the bad debts to be around USD 294 billion -350 billion respectively. While there is little doubt that China can cope with this debt, how the Chinese Government is going to reduce the local governments’ bad debt exposure. Could this reduction avoid massive demand cuts for Australia’s commodities that could (directly) impact up to 10% of Australia GDP?
At the start of global financial crisis (GFC), the Chinese government announced a 4 trillion yuan (USD 586 billion) national stimulus plan, with 38% of the stimulus allocated to infrastructure projects. Local banks lending limit were lifted, and urged to support the country’s growth in midst of the GFC. The market became awashed with easy money and local governments embarked a massive infrastructure spree. Many such projects were being financed through quasi-independent companies. Some of such companies were created by local governments in order to subvert lending restrictions imposed on Central government.
Last week, these practices finally hit the headlines when Liu Jiayi, the Head of the National Audit Office, in a report to the National People Congress (report in Chinese), cast doubt whether those over-exposed local government has the means to repay their loans or would ended up as bad debts? The State Council (China’s Cabinet) responded by ordering all provinces to review all debts, cease illicit local financing and investment and detail a financial health report by end of 2010.
Undoubtedly this directive would result less infrastuture projects and decrease demand for Australian commondites. The Australian mining industry and the Australian Bureau of Agricultural and Resource Economics (ABARE) will want to incorporate this development in their mid-term growth forcast in light of the weakness in the global banks.
Related links:
- Looking into China’s local government debts (People’s Daily)
- State Council Orders Local Governments to Review Debt of Financing Platforms (Economic Observer)
- Legless Stimulus in China (previously published on Asian WSJ)
- How Victor Shih Get China’s Debt So Wrong (China Stakes)
- Moral Hazard and China’s Banks (WSJ)
- Local government finance and municipal credit markets in Asia (ADB)
(Credit: Tim Yang)
On 8 Jun 2010, the China State Council published its Internet policy white paper. The white paper (available in English) was written for an international audience explaining China’s domestic Internet development and the state’s role in the management of Internet in China. On one hand, the white paper demonstrated a contemporary understanding and support and acceptance of the Internet’s contributions and impact on China’s economy and societal development. However on the other hand, the heavy rhetorical tone in sections of the paper masked the government’s internet policy inadequacies and blanket approach legislature response to manage the flow of information via the Internet.
The paper is divided into six sections. First, it introduced the historical origins of the Internet in China, the massive ICT infrastructure development undertaken since 1997 and the government’s target to raise Internet accessibility to 45% of its population by 2015. Next, it described the upcoming Internet-related economic growth sectors and briefly discussed the government e-governance efforts to satisfy the information demand of the country[1]. The section goes on to elaborate the role of the Internet particularly in among its urban population – currently the largest constituent of China’s Internet population.[2]
The third section iterated the Chinese government’s support to the development of news communication over the Internet. This support was in alignment to its citizen’s right to freedom of speech, access to a full range of information and societal participation “in accordance with the law”. The Chinese government also recognised the Internet’s role as a conduit to facilitate communication between the government and its citizens. The government singled out the vibrancy of the citizenry societal discussion on BBS (bulletin board system) which enabled the leaders to become more aware of the grassroots situation[3] and indirectly increased the citizens’ supervision of the government.
The fourth section outlined a litany of legislations and regulations to enable the government “scientific and effective Internet administration by law”. These legislations and regulations covered the administration of Internet network infrastructure, the dissemination of illegal information online, online safety for minors, the protection of digital intellectual property rights and citizen’s online privacy. It also outlined a sweeping list of prohibited content online, established by the National People’s Congress[4]. While this list of content may looked comprehensive, the definition of these prohibited content are often loosely defined. The lack of clarity behind these terms and a non-independent judiciary hindered an accurate understanding how these offences may occur.
The fifth section highlighted “cyber security” as a crucial area of interest to the China government. The Chinese government recognised that the Internet is an important infrastructure for the entire country and therefore internet security is a matter of state security and public interest. Within Chinese territory, “the Internet is under the jurisdiction of Chinese sovereignty.” Therefore, all PRC citizens, foreign citizens and organisations within Chinese territory must obey the laws and regulations of China.
To further lend support for the case of internet security, the paper provided an unsubstantiated statistical reference (“incomplete statistics”) to more than 1 million IP addresses in China were controlled overseas.[5] A series of agencies, laws and regulations concerning administration of the Internet security in China were also mentioned. Interestingly, the government is placing the onus of monitoring the users’ usage and content on the ISPs “to prevent the transmission of all types of illegal information”[6] [7].
In the last section, the Chinese government outlined its willingness to engage multilateral and regional organisations to share the responsibility of maintaining global Internet security. It specifically expressed its support for the ITU (a United Nation agency) to hold the role of International internet administration and also provided a list of exchanges and agreements with regional organisations with ASEAN, Shanghai Cooperation Organization, Interpol and specific countries like the UK and the US. In this section, China demonstrates an acceptance to norms of international internet administration.
In conclusion, the Chinese government demonstrated a contemporary understanding of the Internet and is eager to take advantage of its information sharing economical benefit, societal development, and electronic governance capabilities. But at the same time, it also highlights an uneasiness undertone with the wide availability of information exchange. In response to information which may fall under its list of prohibited content, the government employs a long list of laws and regulations to administer the Internet but questionably placing the heavy burden of responsibilities onto ISPs to monitor the users’ data. On the international front, the government expressed its willingness to support and cooperation in multilateral organisations to administrate and promote Internet security and development.
This piece was written in my personal capacity.
[1] The haphazard references to e-governance may indicate a lack of established formal e-governance policy.
[2] The white paper did not include specific ICT policy for the rural population.
[3] From the author’s personal perspective, middle level Chinese authorities have a tendency to micro-manage situations particularly those involves senior level authorities. This tendency which may led to “astro-turf” participation during the occasional senior level authorities consultations.
[4] Within the IV section of the white paper quoted, “The citizens’ freedom and privacy … is protected by law, which stipulates at the same time that while exercising such freedom and rights, citizens are not allowed to infringe upon state, social and collection interests or the legitimate freedom and rights of other citizens.” In absence of an independent judiciary, there is no institution apart from the CCP in China to determine the boundaries of the State’s interests.
[5] Researchers from University of Toronto and US’s Shadowserver Foundation uncovered a vast online espionage network based in China, http://bit.ly/9WftsS (The Globe and Mail)
[6] The Sydney Morning Herald reported the Australian Federal Government proposed new ISP regulation to retain the private users’ certain web usage data. In doing so, the government may be able to bypass the need for court warrant to access these data, http://bit.ly/9i695I (The Sydney Morning Herald)
[7] Are private entities (ISPs) in the position to be trained and resourced to monitor private users’ data? Should they actually get involved in monitoring their customers?
I actually believe that China society at the grassroot is actually more open than under-reported by the international media. Nevertheless, I marvelled at the efforts and creativity of the Chinese netizen trying to overcome state censorship.
While researching on the state’s internet policy in China and the online civil society, I came across references to the terms and images of “river crab” and “wearing a watch” (and “grass mud horse” – a vulgar term involving one’s mother). These euphemistic terms were invented to avoid censorship that were established along the lines of state construct of a “harmonious society” (héxié shèhuì) and the ideology of “Three Represents” (sāngè dàibiǎo).
River Crab
The term “river crab” (héxié) which sounds similar to “harmony” is used when one’s posting had been subjected to online censorship (or being “harmonised”). Such is the popularity and acceptance of this term, that it made the leap from the internet and into mainstream lingo.
Wearing a Watch
The wearing of a watch (dàibiǎo) is pronounced in the same tone as “represents”, an acknowledgement of “The Three Represents”. The Three Represents mark an acceptance of the “advance productive forces” (other economical forces present in the Chinese socialist-market economy) in the CCP.
This phenomenon illustrates a missing meaningful and effective societal space in China to engage with the local and Central authorities. This gap forced the Chinese netizens to go underground to musk their opinions and grievances and often in doing so the complaint’s objectivity and purpose got lost in midst of this translation.
Related link:
An illustration of the Green Dam Youth Escort (a state-sanctioned censorship software) with Caonima (Source: Wikipedia)
Politics
- Robert Kaplan | The Geography of Chinese Power: How far can Beijing reach on land and at sea? (.pdf) (Foreign Affairs)
- Q & A with Robert Kaplan with further discussion on the US, China, India naval development and China potential military development trajectory
- In China, the party always starts at the top
Philosophy
- Joergen Oerstrien Moeller| Encourages an update of what we knew of globalisation (Globalisation 2.0)
Economy
This week at the Lowy Institute’s Distinguished Speaker Series, former Australian Prime Minister Malcolm Fraser shared candour and shrewd insights into meaning of liberalism in the global context, small countries’ relations with super powers and the importance of due processes adherence .
Click here to listen to his presentation entitled “Liberalism and Australian foreign policy“.
Last month in a period of three weeks, I visited five China cities. This trip could be sum up in three phrases: physical exhilarating, cultural enriching and geo-political awareness enlightening.The visit included UNESCO World Heritage sites such as Huangshan (often referred by Chinese as “The number one mountain under the Heavens”), the ancient Chinese Village of Hongcun, the classical gardens of Suzhou, the burial ground of the founder and first Emperor of the Ming Dynasty – Ming Xiaoling Mausoleum and Hangzhou’s West Lake (featured on the RMB 1 dollar note).
Despite making this trip by myself, I never felt alone. I had the good fortune of travelling and interacting with many kind, helpful and interesting people (backpacking tourists and local residents) in every city along my journey. There is always a friend company in a hostel or along the streets. Such are the joys of backpacking 
My travel began from Anhui Province (Tunxi, Huangshan, Yixian, Shexian) to Zhejiang Province (Hangzhou) to Jiangsu Province (Suzhou and Nanjing) and finally China’s largest city – Shanghai. These authentic sights and the opportunities to interact with the local residents are captured in the following highlights.
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A. Shanghai – Huangshan Overnight Sleeper Train
My journey began when I caught an soft-sleeper overnight train from Shanghai to Huangshan (K8418, cabin interior). During the 15 hours journey, I chatted and shared my travel plans with many other travellers from different countries including Japan, USA, Sri Lanka and of course China. Soon I got acquainted with a young Chinese couple and we decided to hike Huangshan together. |
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B. Tunxi Old Street After a long train ride, I decided to stay overnight in Tunxi town (where the Huangshan railway station) was located. I stayed in Old Street Youth Hostel, where the area’s old architectures were preserved and now transformed into tourism-oriented enclave.
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C. Huangshan
Huangshan in Anhui’s province is one of China’s most scenic spots. The mountain range is characterised by numerous gravity defying odd-shaped pine trees, steep trails, deep gorges with lush greenery and grotesque rock formations representing the arch-typical Chinese landscape (shanshui) paintings. With my new founded Chinese friends, we began our 2 days hike from the Western Steps (also known as the back entrance) and exit from the Eastern Steps as recommended by the hostel. The Western Steps landscape is filled with numerous strange and interesting rock formations such as Monkey Gazing at the Sea, Fairy Lady Flower and the Mobile Phone rock. The Eastern Steps is more steep and gives you the opportunity to appreciate the majestic mountainous range. Many other celebrated sights include Yingke Song (Welcome Guest Pine) and the Tiandu Feng (Apex of the Celestial Capital Peak).
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D. Hongchun and Tangyue Memorial Archway
Apart from the Huangshan, there are another two popular tourist attractions which can be easily managed by oneself without booking those overpriced guided tours. They are Hongcun village and the Tangyue Memorial Archways. Just travel like the locals and use the long distance public buses from Huangshan long distance bus terminal to get to Yixan and Shexian counties respectively.
D1. Hongcun Village Hongcun with its water features and distinct Anhui architecture has becomes a popular subject amongst many Chinese art students. In 2004, this cherished village was commemorated as part of a China Post “Ancient Villages in Southern Anhui” stamp series.
D2. Tangyue Memorial Archway
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E. Hangzhou – West Lake, Lingyin Temple, Longjing Village
Around the prosperous city of Hangzhou lies one of China’s most popular attraction, the famed West Lake or Xihu. The beauty and the wealth of this city led to a claim that Hangzhou“beyond dispute (is) the finest and the noblest in the world” attributed to Marco Polo. When I was finally able to pull myself from West Lake sights, I visited Lingyin Temple (Temple of the Soul’s Retreat), one of China’s largest monastery and Longjing Village. Longjing Village is the famed green tea growing area that grows the popular Longjing tea (龙井茶). During my visit, I was invited to a farmer’s actual house and had the opportunity to sample the different grades of Longjing tea.
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F. Suzhou
This famous saying praises the beauties of Suzhou and Hangzhou. Suzhou often referred as the “Venice of the East” for its gardens, stone bridges and canals across the city. The beauty of Suzhou’s classical gardens was recognised as a UNESCO World Heritage under the “Classical Gardens of Suzhou”. These gardens include Master of the Net Garden. The Master of the Net garden is the smallest of the classical gardens but because of its size, it was easy to appreciate the beauty of the garden.
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G. Tongli
About 27km from Suzhou, lies the small water village of Tongli. Within Tongli are picturesque waterways and bridges, famed garden (Tuisi Garden -Retreat and Reflection) and also China Sex Museum.
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H. Nanjing
Nanjing is capital of Jiangsu Province which include Suzhou. Nanjing (the Southen Capital), together with Beijing (the Northen Capital), Luoyang and Chang’an (now Xi’an) formed the “Four Historical capitals of China” (中国四大古都). Nanjing is also home to one of the largest concentration of tertiary institutions in China. This city is also the final resting places of major statesmen in Chinese history including Sun Yat-sen (founder of the post-imperial China) and Emperor Hongwu (Zhu Yuanzhang, founder and first emperor of the Ming Dynasty). Travelling to Nanjing from Shanghai is easy and comfortable via a 3 hours train ride on China Railway Highspeed (CRH) trains
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I. Shanghai
Shanghai, China’s largest city and the symbol of China’s growing economic stature on the world’s stage. Ever since the days of the Western nations trade concessions settlements, Shanghai has been one of Asia’s financial and trading hub. The modern Shanghai is now a buzzing, vibrant and energetic metropolis. The energy of this city is simply tremendous.There is something for everyone in this city. For arts fans, the Shanghai Museum is a treat. This museum housed an mind boggling first class collection of Chinese arts including pottery, ancient currency and sculptures. To appreciate the origins and the development of this city, the Shanghai Urban Planning Exhibition Centre is a must, even just to see the mini model of the city sprawl. Fans of la mien and xiao long baos, you can finally have one’s fill in Shanghai. While you’re there, get introduced to shenjian too, a dish similar to xiao long. The Shanghainese cuisine is more noodles and bread based. Let’s just say, I had my fill of xiao long and dumplings for a very long time. For the defenders of the world’s economy (aka shopaholic), after your saving rounds in Ginza or Fifth Avenue, you will have your hands full in Huaihai Lu and Nanjing Lu.
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You can view my additional China holiday pictures trip from my 2009-Anhui-Zhejiang-Jiangsu-Shanghai-Trip collection.
Berno: The Obama Administration maintains a very difficult hybrid stance towards restoring faith in the US financial industry without much success. America has long championed faith in the hands of the free market. However, the Federal Reserve was repeatedly forced to prop up crippling financial institutions like Citigroup and AIG from collapse with massive public funds injection without outright public ownership (ie nationalisation).
The article below takes a step back and examines the China Government’s direct and forceful approach to support their economy when the invisible hand of markets gives up.
“The visible hand of Beijing might look excessive to people in the West, but many Chinese are pleased to see the government intervene and feel it will win time for China to ride out the global crisis. Elsewhere around the world banks are unwilling to lend and the U.S. Federal Reserve has had to bypass commercial banks to lend directly to corporations. Beijing just needs to send out a few directives and the banks do their bidding — Chinese banks posted a record 1.62 trillion yuan in new loans in January, already one-third of the total extended in 2008. “
Continue reading “When the invisible hand fails, try China’s ‘two hands’“.(Forbes)
Over the weekend, the Microsoft Research website was given a new coat of paint. The new home page features a cleaner information layout and two Microsoft Research Asia (MSRA) researchers interviews with Drs. Guo Baining and Zhang Dongmei.
- Dr Guo Baining (Interview: Microsoft Research Asia’s Guo Discusses the Future of Graphics) is a computer graphics researcher and also the Assistant Managing Director of the Beijing lab. In his interview, he shared about his passion for geometrical modeling which led him into computer graphics, his Microsoft Research experience and also discussed Internet Graphics group future research directions.
- Dr Zhang Dongmei (Interivew: Chinese Researcher Leaps into Prominence) is a research manager from the User Interface Group. In her interview, she drew similiarities in the necessary traits that led to her professional success from a long jump child athletic and what fuels her passion for research today.
