China

China’s newly rich are flaunting wealth — and giving Communist rulers a headache

The Washington Post

China’s new rich love luxury products — imported French handbags, Italian sports cars — and even more, they love to show off their bling.

That seems to be creating headaches for China’s Communist rulers, who after three decades of exhorting their subjects to get rich are facing growing discontent over a widening income gap. Officials now talk about making sure wealth is more evenly distributed, and how to get the rich to tone it down.

As the global economy melts down, and China tries to accelerate its shift to a more consumer-led growth model, Beijing’s leaders see luxury items as a lucrative revenue source. Many Chinese now buy luxury products in Hong Kong or abroad to avoid China’s high taxes, so officials are debating a move to slash tariffs to encourage consumers to shop at home.

But government is loath to be seen as taking any new measures to support the sliver of the population that can afford that pricey new Hermes bag or latest Ferrari, and has delayed any decision on cutting tariffs, according to Chinese media reports and industry analysts.

Why is biggest U.S. creditor getting U.S. grants?

OneNewsNow

A grassroots pro-family group is outraged that the National Institutes of Health (NIH) has awarded more $90 million in grants to Communist China.

The Traditional Values Coalition (TVC) has completed a six-month investigation into the NIH's budget, discovering that in the past two and half years alone, it has awarded more than $30 million to scientists at Chinese universities and institutions to research Chinese medical issues. But the U.S. has given the Chinese government more than $90 million over the last decade.

TVC executive director Andrea Lafferty does not understand why America's biggest creditor needs grant money from the United States.

Andrea Lafferty (Traditional Values Coalition)"China holds over $1.1 trillion in American debt, yet we are sending our hard-earned taxpayer dollars to a communist country so it can fund the education of [its] citizens," she summarizes. "There are so many people in America that can't afford studies at colleges and universities."

Inflation in China Poses Big Threat to Global Trade

New York Times

As the United States and Europe struggle to get their economies rolling again, China is having the opposite problem: figuring out how to keep its revved-up growth engine from generating runaway inflation.

The latest sign that things were moving too fast came on Sunday, when China’s central bank ordered the biggest banks to set aside more cash reserves.

The move essentially reduces the amount of money available for loans, and is an attempt to cool down the economy. It follows the government announcement on Friday that China’s economy was growing at an annual rate of 9.7 percent, by far the strongest performance by any of the world’s biggest economies.

Because China is now the world’s second largest economy, after the United States, and because the country has been a leading source of global growth during the last two years, money problems here can reverberate from Wal-Mart to Wall Street and the world beyond.

Cables show China used debt holdings to press US

Breitbart

Leaked diplomatic cables vividly show China's willingness to translate its massive holdings of US debt into political influence on issues ranging from Taiwan's sovereignty to Washington's financial policy.

China's clout -- gleaned from its nearly $900 billion stack of US debt -- has been widely commented on in the United States, but sensitive cables show just how much influence Beijing has and how keen Washington is to address its rival's concerns.

An October 2008 cable, released by WikiLeaks, showed a senior Chinese official linking questions about much-needed Chinese investment to sensitive military sales to Taiwan.

Amid the panic of Lehman Brothers' collapse and the ensuing liquidity crunch, Liu Jiahua, an official who then helped manage China's foreign reserves, was "non-committal on the possible resumption of lending."

Instead, "Liu -- citing an Internet discussion forum -- said that as in the United States, the Chinese leadership must pay close attention to public opinion in forming policies," according to the memo.

China restricts news, discussion of Egypt unrest

Breitbart

Chinese censors are apparently blocking online discussion of unrest in Egypt and sanitising news reports about it in a sign of official unease that the uprising could fuel calls for reform at home.

Keyword searches on the unrest returned no results Monday on microblogs and the reader comment function on news reports about Egypt was disabled on major portals as China's pervasive censorship apparatus swung into full gear.

News coverage of the protests against the 30-year rule of Egyptian President Hosni Mubarak was limited to sparse accounts of the unrest that largely glossed over the underlying political factors and calls for democracy.

Hu calls currency system 'product of the past'

Breitbart

China's President Hu Jintao said Sunday the international currency system was "a product of the past," but it would be a long time before the yuan is accepted as an international currency.

Hu's comments, which came ahead of a state visit to Washington on Wednesday, reflected the continuing tensions over the dollar's role as the major reserve currency in the aftermath of the US financial crisis in 2008.

"The current international currency system is the product of the past," Hu said in written answers to questions posed by The Wall Street Journal and the Washington Post.

Highlighting the dollar's importance to global trade, Hu implicitly criticized the Federal Reserve's recent decision to pump 600 billion dollars into the US economy, a move criticized as weakening the dollar at the expense of other countries' exports.

"The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable and stable level," Hu said.

List of US concerns with China grows

FT.com

China must reduce unfair subsidies, stop the theft of intellectual property and let its currency appreciate, Tim Geithner has said.

The US Treasury secretary, in a speech on Wednesday ahead of next week’s visit by Hu Jintao, Chinese president, widened US concerns about Chinese economic policy well beyond currency, which has been a focus of Capitol Hill’s anger.

But he sought to reduce the blame put on China for domestic economic woes. He said the US needed to invest more in research and development, to reform education and to improve public infrastructure.

World Bank taps offshore yuan bond market for first time

Reuters

The World Bank issued its first yuan-denominated bond, raising $76 million and trying to promote the use of the Chinese currency in international markets at a time when China's stake in the institution is about to increase.

The World Bank said in a statement on Wednesday the International Bank for Reconstruction and Development, its low-interest lending arm, had priced the two-year paper at 0.95 percent, representing the lowest yield so far on same-maturity dim sum bonds -- the nickname for yuan-denominated bonds issued in Hong Kong.

The offshore yuan market in Hong Kong has seen explosive growth in less than a year, with renminbi deposits in the former British colony surging more than 150 percent in the six months to October 2010. Global companies and institutions such as the Asian Development Bank, McDonald's Corp and Caterpillar have all issued yuan bonds.

China stakes claim to S. Texas oil, gas

My SA.com

State-owned Chinese energy giant CNOOC is buying a multibillion-dollar stake in 600,000 acres of South Texas oil and gas fields, potentially testing the political waters for further expansion into U.S. energy reserves.

With the announcement Monday that it would pay up to $2.2 billion for a one-third stake in Chesapeake Energy assets, CNOOC lays claim to a share of properties that eventually could produce up to half a million barrels a day of oil equivalent.

It also might pick up some American know-how about tapping the hard-to-get deposits trapped in dense shale rock formations, analysts said.

Obama State Dept. Tells Communist China: AZ Immigration Law Is Indication of 'Troubling Trend' of 'Discrimination' in U.S.

CNS News

In a "candid and constructive" human rights dialogue with officials from the People’s Republic of China last week, Obama administration officials brought up Arizona's new immigration-enforcement law, telling the Chinese Communists it was an example of a “troubling trend” in the United States and an indication of “discrimination or potential discrimination” in American society.

Ironically, the State Department’s most recent report on human rights in China indicates that the government there restricts the internal travel of its own citizens.

China to overtake US as largest manufacturer

Financial Times Online

China is set to overtake the US next year as the world’s largest producer of manufactured goods, four years earlier than expected, as a result of the rapidly weakening US economy. The great leap is revealed in forecasts for the Financial Times by Global Insight, a US economics consultancy. According to the estimates, next year China will account for 17 per cent of manufacturing value-added output of $11,783bn and the US will make 16 per cent. Last year the US was still easily in the top slot and accounted for a fifth of the total. China was second with 13.2 per cent.

Bush visits Beijing church, urges freedom

The Washington Times

BEIJING | President Bush continued his Olympics juggling act on Sunday, settling for a pointed remark in public to push for wider religious freedom in China and raising further political concerns privately with Chinese President Hu Jintao. Standing on the rain-splattered steps of the state-sanctioned Beijing Kuanjie Protestant Christian Church after attending an early morning service, Mr. Bush said it was "a joy and a privilege" to worship in the Chinese capital, as he did in 2005. "It just goes to show that God is universal. No state, man or woman should fear the influence of loving religion," he declared, alluding to the strict controls the Communist Party imposes on religion, while taking care not to embarrass his hosts - or the church pastor he encircled with his arm - with explicit criticism. 'JOY': President Bush speaks at the state-sanctioned Beijing Kuanjie Protestant Christian Church on Sunday. He later raised the issue of human rights abuses behind closed doors with Chinese President Hu Jintao. (Associated Press)

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China's leaders are resilient in face of change

International Herald Tribune

As Beijing was starting construction on its main Olympic stadiums four years ago, China's vice president and leading political fixer, Zeng Qinghong, warned the 70 million members of the ruling Communist Party that the party itself could use some reconstruction. Zeng argued that the "painful lessons" from the collapse of other Communist parties in the Soviet Union and Eastern Europe could not be ignored. He said China's cadres needed to "wake up" and realize that "a party's status as a party in power does not necessarily last as long as the party does." Zeng, who is now retired, was alluding to the pressures of economic liberalization, political stagnation and globalization that many analysts have argued would ultimately topple one-party rule in China. The Olympics also posed a pressure point, as some analysts wondered whether the expectations and international scrutiny brought by the Games might help crack open another authoritarian political system - as happened in Seoul in 1988.

Bush to attend church in China, urge religious freedom

Breitbart.Com

US President George W. Bush plans to attend church while in China for the opening of the Olympic Games next month, and will speak about freedom of religion, a top aide said Wednesday. "When he goes to church on Sunday (August 10) he will make a statement afterwards in which he discusses his view on religious freedom in China," said national security council director of Asian Affairs Dennis Wilder. "You can deliver the message of freedom without politicizing the events of the game," Wilder said. "The president will have diplomatic meetings with the Chinese leadership that are separate from the games. And in those meetings with the Chinese leaders he will of course bring up these issues." Bush, a devout Christian, has walked a diplomatic tightrope over the Olympics, repeatedly insisting the games are not a political venue while recently stepping up his public criticism of Beijing's rights record. Bush will attend the August 8 opening ceremonies of the games, having rejected human rights activists' appeals for him to boycott the gala in protest of China's overall rights record, including a crackdown in Tibet in March.

China's economy to become world's biggest in 2035: study

Breitbart.Com

China's economy will overtake that of the United States by 2035 and be twice its size by midcentury, a study released Tuesday by a US research organization concluded. The report by economist Albert Keidel of the Carnegie Endowment for International Peace said China's rapid growth is driven by domestic demand more than exports, and will sustain high single-digit growth rates well into the 21st century. "China's economic performance clearly is no flash in the pan," Keidel writes. "Its growth this decade has averaged more than 10 percent a year and is still going strong in the first half of 2008. Because its success in recent decades has not been export-led but driven by domestic demand, its rapid growth can continue well into the 21st century, unfettered by world market limitation." Keidel said the rise of China to the world's biggest economy will happen regardless of the method of calculation. Under current market-based estimates, China's gross domestic product is about three trillion dollars compared to 14 trillion for the United States. Based on a more controversial purchasing power parity (PPP) measure used by the World Bank and others to correct low labor-cost distortions, he said China's GDP is roughly half of that of the United States.

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China's one-child policy has exemptions for quake victims' parents

International Herald Tribune

CHENGDU, China: In response to inquiries from grieving relatives, local officials announced Monday that parents whose only child was killed or grievously injured in the May 12 earthquake would be exempt from the country's one-child policy. The exception, issued by the Chengdu Population and Family Planning Committee in Sichuan Province, said qualified parents could apply for legal permission to have another child, according to The Associated Press.

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