09/27/2010 Source: Global Times

The total cost of international trips made by government and Party officials dropped by 21.4 percent in the first half of this year compared with the same period last year, reflecting the government’s efforts to curb excessive use of public funds.

He Guoqiang, secretary of the Central Commission for Discipline Inspection (CCPI), said at a meeting Saturday that the government’s budget for international trips, official cars and reception fees was cut by another 5.75 billion yuan ($858 million) this year, following a 15.81 billion yuan reduction last year, People’s Daily reported Sunday.

The report didn’t give the breakdown of costs for the three separate items, which have been dubbed as the three gongkuan xiaofei, or public fund expenditures, and the subject of years of criticism.

Ren Yuling, a counselor of the State Council, revealed in 2006 that China’s administrative costs in 2003 made up 19 percent of the country’s total fiscal expenditure, much higher than that of developed countries or the global average.

He added that administrative costs in 2003 were a staggering 87 times the amount of 1978.

Analysts noted that the abnormal surge of administrative costs is closely related to excessive and unsupervised spending of public money on cars, trips and dining by officials. Jiang Hong, a professor at the Public Economy and Management School under the Shanghai University of Finance and Economics, said in March that the cost of the three gongkuan xiaofei is estimated to be 1 trillion yuan each year.

After the government began tackling this problem of so-called “soft corruption” in 2006, a slew of regulations was announced and expenditure has seen a drop in recent years.

In April, Chinese embassies around the world simplified their welcome ceremonies for visiting Chinese leaders. In June, the CCPI issued a new policy stating that officials who use public money to make private trips abroad are subject to expulsion from the CPC.

“These moves have been effective in reducing the figures, but soft corruption is still far from extinct, and is taking new forms and disguises,” Zhu Lijia, a professor at the Chinese Academy of Governance, told the Global Times, citing domestic tour-ism as its latest manifestation.

The ancient city of Pingyao in Shanxi Province has been hosting up to 100,000 officials a year who go there on free sightseeing trips, China Central Television reported in June. These officials from across China visit Pingyao in the name of public duty and are given free admission to tourist sites along with free lodging and meals.

“The only way to uproot the problem is to open up the government budget and make the costs transpar-ent,” said Zhu. “The media and the public will be able to see if public money is being put to its correct use.”

However, Gao Qiang, director of the Budget Committee of the National People’s Congress Standing Committee, noted in March that the three gongkuan xiaofei are not currently counted as separate items in the government’s budget, making them difficult to define and control.

“Sub-classifying the accounting items should be the focus of future budgeting work,” Gao said.

09/27/2010 Source: Xinhua

While taking aggressive steps to acquire China’s domestic credit rating agencies, the United States keeps a tight “fence” against those trying to foray into its own market.

The U.S. Securities and Exchange Commission (SEC) on Thursday denied a bid by China’s largest credit rating firm to become an officially recognized statistical rating organization in the United States.

By blocking the Chinese rating agency, the Dagong Global Credit Rating Co. Ltd., from entering the international credit rating market, the United States aims to thwart China’s efforts to have a say in the international capital market, Chinese analysts and observers said.

The U.S. government’s decision may not be so surprising as the SEC had in April this year rejected the application of the Dagong Global Credit Rating Co. Ltd., which is currently the only one of China’s four major credit rating agencies that has not been controlled by foreign capital.

“The United States rejected Dagong’s application out of fears that its dominance in credit rating could be challenged,” said Mei Xinyu, an expert with the Research Institute of International Trade and Cooperation of China’s Ministry of Commerce.

“Quite obviously, keeping an absolute dominance in credit rating brings the United States substantial benefits,” Mei said.

Though Washington always brands itself as an advocate for such principles as free trade, it will not hesitate to sacrifice those principles for economic gains, added the expert.

The SEC said it rejected Dagong’s application for registration as a nationally recognized rating organization because it could not ensure the Beijing-based company would comply with U.S. reporting rules, a pretext suggesting that it cannot perform cross-border oversight and regulation.

Dagong contended that such alleged rules have never been used as a standard for the SEC to approve registration of rating agencies in the United States.

“It is a barrier specifically set for Dagong, which is obviously discriminatory against China and the Chinese rating agency,” it said.

Chinese analysts believed that the SEC’s denial of Dagong’s application indicates its intention to protect the monopolistic status of the “Big Three” Western rating agencies – Moody’s, Standard & Poors and Fitch, which have the make-or-break power over countries by upgrading or downgrading their bonds.

“The United State has the world’s biggest capital market…To be registered as the U.S. Nationally Recognized Statistical Rating Organizations (NRSRO) means obtaining the status of an international credit rating agency,” said Jiang Yong, director of the Center for Economic Security Studies under the China Institutes of Contemporary International Relations.

Therefore, foreign credit raters have long been cautiously protected by the United States, he said.

According to Jiang, so far, only 10 of some 200 credit rating organizations around the world have been registered as an NRSRO, among which seven are U.S. domestic companies, two Japanese agencies and one Canadian rater.

However, the latter three have never actually operated businesses after entering the U.S. market, Jiang said.

“The United States keeps its ‘fence’ even tighter against foreign credit rating agencies, especially after the outbreak of the global financial crisis, as the world has seen an increasing significance of credit rating in ensuring and protecting a nation’s financial stability and core interests,” said Jiang.

On the other hand however, the Big Three, two of which are now America-funded, are now penetrating deeper and deeper into the Chinese market through large scale stock acquisition, Jiang said.

“Over the recent three years, the ‘Big Three’ ratings agencies have penetrated very deeply into China’s domestic credit raters, enterprises, and even the government bodies,” he said.

“Through such means as buyout, they’ve built a massive database, the scale of which is far bigger than that of the government,” said Jiang, who himself was shocked by the fact.

The expert warned that the Big Three set rating standards that serve the interests of their own countries, posing a serious threat to China’s financial sovereignty and national economic security.

“Credit rating has already become a tool of the United States to strengthen its economic and political supremacy and contain the development of China,” said Wu Hong, who is from China’s Office of the Central Leading Group on Financial and Economic Affairs.

09/20/2010 Source: Xinhua

Chinese police freed 10,621 women and 5,896 children who had been abducted for human trafficking as of September 6,since the Ministry of Public Security launched a crackdown on trafficking the crime in April last year.

In the campaign, police nationwide apprehended 2,398 human trafficking gangs and handled 13,500 such cases, said the ministry in a statement on Sunday.

Further, the police put 15,673 suspects under criminal detention and handed out administrative penalties on 1,518 people, it said.

In addition to the tough crackdown, the police have stepped up measures to return the children who have been trafficked to their biological parents, including building a database that collects the DNA of those children who may have fallen victims to human trafficking and their parents.

The database had helped 813 children to find their biological parents through DNA matching.

09/20/2010 Source: Global Times

An adviser to China’s central bank said Sunday that unlike Japan in the 1980s, China won’t cave to foreign pressure to let its exchange rate appreciate, a financial news website reported.

Li Daokui’s comments come after US Treasury Secretary Timothy Geithner called for Beijing to address “trade distortions” by letting the yuan strengthen.

“China, as it stands now, is not Japan in 1985, it is not a country that completely relies on external demand,” he said at the China CEO Forum taking place in Beijing, in a speech transcribed on finance.qq.com.

“We will not appreciate the yuan solely because of external pressure.”

Li appeared to refer to the 1985 Plaza Accord, where Japan agreed to let its yen currency appreciate against the dollar.

China vowed more flexibility in its foreign exchange policy in June, but Geithner said Thursday that despite the move, the yuan’s value was “essentially” unchanged in the past two years because of “very substantial” intervention by authorities.

Since June the yuan has appreciated about 1.6 percent against the greenback and gained about 0.7 percent this week ahead of Geithner’s testimony to US Congress.

Li said this kind of pressure won’t abate in the coming decade.

“Protectionism against China and India will continue to increase and pressure on the currency will also continue,” he said.

08/31/2010 Source: Xinhua

An 82-year-old former Chinese “comfort woman” is going to appeal to the International Court of Justice (ICJ) in September to pressure the Japanese government to issue an apology to her and other women who were forced into sexual slavery by the Japanese military during World War II.

Wan Aihua is the first woman to use her real name when accusing Japanese occupiers of crimes during the war. However, she lost three earlier lawsuits in Japan since her first appeal in 1992.

During the past 18 years, Wan has been to Japan eight times to attend international hearings and conferences, and spoke of the ordeal and harrowing experiences that she had gone through, as she sought an apology and compensation.

Although the Japanese government acknowledged that Japan’s imperial army was involved “directly or indirectly” in sexual slavery, it refused to pay the victims compensation.

Japanese courts had rejected Wan’s petition, saying that her right to claim indemnity had expired and China had given up individuals’ claims for reparations in the China-Japan Joint Statement.

“What China gave up at that time is state compensation, because that’s too much for Japan to pay,” said Wan.

“But what I demand is non-governmental compensation. They must repay the debt of blood,” she added.
Historians say the Imperial Japanese Army forcibly sent as many as 200,000 women, mainly from the Democratic People’s Republic of Korea (DPRK) and the Republic of Korea (ROK), China and the Philippines, to wartime Japanese military brothels to work as prostitutes in the 1930s and 1940s.

Wan said she was forced to work as a “comfort woman” for Japanese soldiers in Yuxian County, north China’s Shanxi Province, at the age of 15, in 1943. She said she was savagely tortured by Japanese soldiers because she opposed their abuse.

The inhuman torture had caused her several fractures in her thighs and ribs and deformed her body. Her right ear had been torn and only half an ear remains on her left side.

Although she survived the persecution, she lost the ability to give birth. She had to adopt a girl and never married.

“I’m heart-broken whenever I see others enjoy a happy family life with a husband and children. It is the Japanese invaders who deprived me of the right to be a normal woman and destroyed my whole life,” Wan said.

The Japanese government has acknowledged the wartime atrocities. In 1993, then Chief Cabinet Secretary Yohei Kono, officially acknowledged and apologized over the fact that Japan forced women from other Asian countries to be sex slaves for its soldiers during World War II. But the government’s refusal to accept responsibility has enraged its victims.

In March 2007, then-Japanese Prime Minister Shinzo Abe said there was no proof the women were “coerced” to provide sex for imperial Japanese soldiers. He later apologized and said he stood by Japan’s 1993 apology.

Wan said she had met some kind-hearted Japanese who supported her.

She said a Japanese woman in her 70s told her at a hearing that many of Japanese only knew the A-bomb havoc in Hiroshima and Nagasaki. “She said only after hearing my stories had she learned that the imperial Japanese army had perpetrated so much wrongdoing.”

Regrettably, only a small number of Japanese can face the facts or know the truth.

With ambiguous apologies, Japan has created some funds to compensate the victims, financed by private donations, not the government, in order to quiet the victims.
“We had to appeal to the International Court of Justice, and I hope we can demand justice there,” Wan Aihua said.

Many victims from China, DPRK, ROK, and the Philippines have broken decades of silence to speak of their traumatic experiences as “comfort women” in recent years, revealing the truth of what the imperial Japanese army did to the countries they invaded during the war.

Wan wrote to Japan’s former Prime Minister Yasuo Fukuda years ago, but there was no response. She also wrote to former Japanese Prime Minister Yukio Hatoyama, hoping that the Japanese government can resolve the issues of “comfort women” and offer apologies and pay compensation to them, but there was no response, too.

“After so many years, the Japanese government still ignores our denouncements and rejects victims’ legal demands. As a result, we have to continue enduring the huge misfortunes the Japanese military had brought to us,” she said.

“We are all in our eighties, and we only want justice. Can the Japanese government still stand by and watch us dying with indifference?” Wan asked.

Professor Su Zhiling, director of the Chinese Research Center of Comfort Women at Shanghai Normal University, said most of the victims are very poor and living at the bottom of society.

Their children or adopted children cannot help them either, because most of them are peasants who can only give them food.

“Their children can hardly help them demand justice from the Japanese government,” Su said.

According to the rules of the International Court of Justice, it only accepts lawsuits from governments and individual cases will not be accepted, no matter how sad they are, he said.

Like Wan, victims in China, DPRK, ROK and the Philippines are facing the same dilemma that there is no progress on the issue of “comfort women.”

“Most of the assistance given to the ‘comfort women’ comes from some individuals and non-governmental organizations, and their ability is very limited,” Su said.

“The situation is not optimistic,” he added.

08/31/2010 Source: People’s Daily

The National Bureau of Statistics (NBS) published an article on its Web site on Aug. 30 in response to allegations by scholar Wang Xiaolu that 9.26 trillion yuan of incomes were not represented in official statistics and expressed its willingness to jointly improve the measurement of residents’ income statistics with the help of the public.

Some scholars believe there have been a large number of omissions in residents’ income statistics. This led the National Bureau of Statistics to successively publish two signed articles on its Web site to discuss with scholars the income survey and the estimation methods.

The signed article by Wang Youjuan and Shi Faqi published on the Web site of the NBS on Aug. 30 pointed out that the NBS welcomed feedback from scholars and express willingness to further study the questions under discussion.

The article pointed out that after discussions, both sides agreed that the omissions in the current income statistics are mainly caused by two reasons. First, some high-income residents were not willing to accept the survey and second, some households that were surveyed may have evaded and understated the data.

The article also said that in regards to the phenomenon of some high-income residents not wanting to accept the survey, the NBS plans to adopt three methods to remedy and revise the statistical results.

First, it will use the existing personal income tax data to estimate the proportion and income level of the high-income group.

Second, it will invite global bank experts to study the data on the current ongoing large sample statistics of national urban households. Third, it will use the data of the sixth national census to comprehensively revise and evaluate the sample structure.

In regards to the problem of some households evading and understating data, the article pointed out that the NBS plans to send some anonymous survey questionnaires by mail to the surveyed general households in order to compare the proportion of omissions in the accounting process and to evaluate the deviation of the national income survey results.

08/24/2010 Source: People’s Daily

China’s property developers will endure a cold business climate this winter with no let-up in the government’s tightening measures, and as housing supply gradually picks up and financing channels are blocked, industry insiders said.

“Based on signals from the central government, the tightening policies will definitely continue in the remaining months of the year, which will put many property developers in a very difficult situation,” said Huang Nubo, chairman of Zhongkun Group, a Beijing-based property developer specializing in commercial real estate.

Speaking at a meeting in Changzhou, Jiangsu province, on Saturday, Vice-Premier Li Keqiang called for the smooth implementation of the government’s tightening measures.

This is the second time in nine days that Li has made such a point, highlighting the central government’s determination to regulate the property market.

Meanwhile, Li pledged that China would complete the construction of 5.8 million affordable homes this year and increase the supply of commercial housing to meet demand.

“These measures indicate that the government will not let its guard down, and the construction of affordable housing will be the policy focus in the next stage of regulation,” said Qin Xiaomei, chief researcher with property consultancy Jones Lang LaSalle Beijing.

She estimated that a large number of affordable homes could come on the market within the next year, which would help to redress the current imbalance between supply and demand and thus ease price growth pressures.

Despite the better-than-expected financial performance of the country’s leading property developers in the first half of the year, analysts said most of the reported sales were achieved in the second half of last year when the property market was sizzling.

The tightening measures have already had an impact on realtors’ sales, said Qin, adding that these effects will continue to be felt for the rest of this year.

Meanwhile, as it is much more difficult for realtors to receive bank loans and get finances from trusts, some of them have been seeking high-cost financing, with interest rates ranging from 12 to 16 percent, compared with the benchmark rate of 5.31 percent for one-year loans.

“Even though some property developers are not encountering cash flow problems in the third quarter, the fourth quarter will be a really difficult period for them as they will evaluate their sales and revenue plans and try to end the year on a robust note,” said Qin. “I suggest that property developers cut prices as quickly as possible.”

Many realtors have in fact quickened their pricing adjustment to adapt to market changes.

Beijing-based Runfeng Real Estate, for instance, has just cut prices at its project in the south of the city by 10 percent. The effect is self-evident, as 90 percent of the apartments were sold out within a matter of days.

Sino-Ocean Land also plans to put units at its new project in the east of the city on the market 6,000 yuan ($882) lower per square meter than the average in that area, which is 23,000 yuan.