Corruption In China? Actually, There’s Less

Corruption in ChinaCorruption In China? Actually, There’s Less

A Determined War on Graft

China has made systematic strides in snuffing out corruption over the past decade.
China will impose a new five-year plan to tackle corruption following the upcoming national congress of the Communist Party of China (CPC), senior official He Guoqiang said on August 21. The new work plan for 2013 to 2018 would be the second of its kind as the first one was released in 2008. He, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, expressed readiness to improve anti-corruption efforts, describing the improvements as a “dynamic and long-term strategic project.”
The 18th CPC National Congress will find new ways to prevent corruption both now and in the future, said He, who is also head of the CPC Central Commission for Discipline Inspection (CCDI), the Party’s anti-graft watchdog.
He said China has always paid great attention to fighting corruption and creating a clean government, adding that the country has created its own unique methods to combat corruption.
The formation of the new five-year plan should be based on the results of the previous plan, as well as past experience, He said, urging discipline officials to prioritize solving problems that are widely faced by the public and find new ways to suppress and prevent corruption.

According to the website of the Nandu Daily newspaper, the CPC’s new anti-graft plan could come out in the middle of next year at the earliest.

Ren Jianming, an associate professor at the School of Public Policy and Management of Tsinghua University, was quoted by Nandu Daily as saying that the drafting of the work plan started as early as May 2010 and scholars have been invited to carry out surveys and studies, whose results are used as references.

Li Xueqin, head of the CCDI’s Research Division, told Xinhua News Agency that while the first five-year work plan was to establish an anti-corruption mechanism, the next five years would be spent in “perfecting that mechanism” with a focus on preventing abuses of power.

Intensified Crackdown
Li said that in the first 10 years after the Party declared a war on corruption in 1993, the strategy was to curb the rising trend of corruption, and the main tasks were upholding leaders’ integrity and investigating cases. In the past 10 years, however, the main focus has shifted to prevention, and to eradicating the roots of corruption, according to Li.

Since the 16th National Congress of the CPC in 2002, the Party has taken various measures to combat corruption through developing a set of systems, mechanisms and methods to restrict and monitor the exercise of power.

Jiang Hui, a research fellow with the Chinese Academy of Social Sciences, told Xinhua that the country’s leadership has placed the fight against corruption high on its agenda over the past 10 years.
In a speech last July, President Hu Jintao, also General Secretary of the CPC Central Committee, warned that corruption is one of the growing dangers that confront the Party and it has become more important and urgent for the Party to police itself and impose strict discipline on its members.
In his speech at the Party School of the CPC Central Committee on July 23, Hu again listed fighting corruption unswervingly as one of the efforts that must be continued to promote Party building.
From December 2002 to June 2007, a total of 518,484 CPC members were punished according to Party disciplines. During the same period, the CPC’s disciplinary organs across the country also registered 677,924 cases and settled 679,846 ones including those registered before 2002, according to the CCDI’s report to the 17th CPC National Congress.

During those five years, the CPC also disciplined several senior officials including former Shanghai Party chief Chen Liangyu, former Deputy Secretary of the CPC Shandong Provincial Committee Du Shicheng, and former Director of the State Food and Drug Administration Zheng Xiaoyu.

Zheng was sentenced to death by a court in May 2007 after being found guilty of taking 6.49 million yuan ($1.03 million) in bribes and dereliction of duty and was executed in July 2007.

More than 60 officials at the ministerial and provincial levels had been punished for discipline violations since the Party’s last national congress in 2007. These high-level officials were among 600,000 people who faced punishment for violating Party and government discipline standards, according to a statement from the CCDI on July 26.

Among them, more than 200,000 were transferred to prosecutors for involvement in legal infringements, the CCDI statement said.

Former Minister of Railways Liu Zhijun was expelled from the CPC following an investigation into allegations of corruption in May. His case has been handed over to judicial departments.

On July 2, Liu Zhuozhi, former Vice Chairman of Inner Mongolia Autonomous Region, was convicted of taking bribes totaling 8.17 million yuan ($1.29 million) and sentenced to life imprisonment.

In December 2010, China issued its first-ever white paper on the anti-graft efforts, which says that combating corruption and building a clean government is related to China’s national development, the fundamental interests of the overwhelming majority of the Chinese people, social fairness, justice, harmony and stability.

China has adopted the principle of addressing both symptoms and root causes of corruption, enforcing comprehensive treatment, simultaneously stressing punishment and prevention while giving priority to prevention, according to the white paper.

The document also quotes a survey conducted by the National Bureau of Statistics (NBS), which shows that the Chinese public’s overall satisfaction rate of the government’s efforts to combat corruption and build a clean government rose steadily from 51.9 percent in 2003 to 70.6 percent in 2010. Another NBS survey in the white paper shows that 83.8 percent of Chinese thought corruption had been kept down to “varying extents” in 2010.

Prevention—a priority
Great efforts have been made in improving the systems to prevent corruption and restrict the power of officials, Li said. Over the past decade, discipline inspection agencies have initiated supervision and inspection on related departments and officials since the major government action started, he said.
Citing the Beijing Olympic Games in 2008 and the World Expo in Shanghai in 2010 as examples, he said inspectors were sent to supervise the preparation of the events from the beginning.

“Checking departments and officials in charge of major projects has become a regular form of supervision,” Li said. “Such precautionary measures have proven more effective than handing down punishments when damages have been done.”

Similar inspection teams were also sent by the Central Government around China to monitor local governments’ use of funds for stimulating the economy following the outbreak of the global financial crisis in 2008, the post-earthquake reconstruction projects and use of donations in Wenchuan, Sichuan Province, and Yushu, Qinghai Province, and the preparation of Asian Games in Guangzhou, capital of Guangdong Province, in 2010.

The CPC started large-scale efforts to curb corruption among Party and government officials about two decades ago and, in the past decade, efforts have been stepped up, Li said.

The CCDI launched several special campaigns targeting outstanding problems, such as excessive overseas travels funded by government, bribery in contracting of construction projects, securities and assets that should but fail to be listed in accounts.

By 2011, the CCDI had investigated about 21,000 graft cases after inspecting more than 425,000 government-funded construction projects across the country, and exposed more than 60,000 off-book accounts leading to punishment of more than 10,000 officials.

The Party also responded fast to cases drawing severe public complaints, such as those related to workplace safety, food safety and environmental pollution.

Over the past five years, more than 700 officials were punished for being responsible for workplace accidents.

Also, the country founded its first national corruption prevention bureau in 2007 to reform the supervision system on officials and develop new anti-corruption policies.

A string of policies to improve government transparency, curb the misuse of power and police the behaviors of senior officials have been issued over the past few years.

In February 2010, the CPC Central Committee issued a code of ethics for CPC cadres to follow to ensure clean practice in their work. The guidelines specify 52 unacceptable practices with respect to CPC leaders and cadres of various levels, including accepting cash or financial instruments as gifts, and using their influence to benefit their spouses, children or “special concerned persons” with regards to their employment, stock trading or business.

“The battle against corruption will be tough and tedious, but with persistent efforts, the future will be bright,” Li said.

– By Li Li

Who’s in China’s Communist Party – and Why?

The number of China’s Communist Party of China (CPC) members had totaled 82.6 million by the end of 2011, higher than the population of both Britain and France, and almost equals the population of Germany, according to the statistics by Organization Department of the CPC Central Committee.
The CPC had added nearly 17 million members in the last decade, with an average of over 1 million people joining the party every year.
Twenty-five percent of the 82.6 million CPC members are under the age of 35 and 38.6% of them have a junior college degree or above, statistics showed.
Government offices and state-controlled agencies and companies have the most party membership but in non-state related sectors, the number has also been growing with party bodies existing in nearly all 983,000 private enterprises and 26,500 social organizations ending 2011.
Twenty seven entrepreneurs in private sectors are elected as deputies to the upcoming 18th National Congress, up from 7 in the 16th National Congress ten years ago and from 17 in 2007.
The 27 deputies are chairmen from leading Chinese enterprises including Sany Heavy Industrial Co.Ltd, Wanda Group and Lenovo Group.
Of all 2270 deputies to the meeting, 145 are business leaders from state-owned enterprises, financial institutions as well as private enterprises across the nation.
The 18th CPC National Congress which marks the once-in-a-decade leadership transition in China will kick off on November 8th.

China: Soft Power Rising?

China: Soft Power Rising?

Is the World Changing its Opinion of China?

Could it be that china’s foreign policy (study whatever the USA does, then do the opposite) is beginning to bear fruit? The 2012 Global Attitudes Survey by the Pew Charitable Trusts suggests that it is. Here’s a screenshot. For the real thing, go to this link.

China: Soft Power Rising?


Full question wording: Please tell me if you have a very favorable, somewhat favorable, somewhat unfavorable or very unfavorable opinion of China.
Notes: Favorable combines “very favorable” and “somewhat favorable” responses. Unfavorable combines “very unfavorable” and “somewhat unfavorable.”
china land tax

China’s New Land Tax

China is implementing a new tax, a land tax. That’s highly significant because it’s the world’s first  national scale implementation of the best tax, the fairest tax, the least bad tax. Once again, China is learning from out mistakes and re-writing the book; this time on how to tax fairly and sustainably.  Here’s a good article that explains China’s land tax and gives some links to great sources of information on land taxes for further reading:

China Shifts to Land Tax

By  (about the author)

China Economic Growth vs. the U.S. to 2030

China Economic Growth vs. the U.S. to 2030

Goldman Sachs just revised its growth target for China downward to “just” 7.1%/year for 2015. See here: click here

However, Goldman uses the classic Western rationale: In economics, there are three factors that contribute to economic growth: labor growth, capital growth and technological advance. Labor growth in China is set to slow. The Chinese society is aging rapidly and the younger generation chooses not to pop out more babies even though Beijing has relaxed its one-child policy. Capital accumulation can only go so far as well and “the current pace of debt accumulation is unlikely to be sustainable in the long term.” As for technological advance, China has already played much of the “‘catch-up’ given the shrinking gap with the highest-productivity nations.

But, China just made a major move to change the way it taxes its people, and this will have a major impact on both its growth and its sustainability. Says Canada’s The Globe and Mail: “China moving quickly to roll out property taxes nationwide” – For years, Chinese property owners have enjoyed a free ride to wealth driven by scorching growth in home prices and a lack of property taxes to whittle away the gains. A condo in Beijing has been like a piece of gold: an asset that can sit and gain value, with little cost of ownership.

But three years ago, Chinese authorities began taxing a small fraction of the country’s real estate, with pilot projects in two major urban areas, Shanghai and Chongqing.

Now Chinese authorities say they are moving to rapidly roll out property taxes nationwide, in a bid to reshape the country’s financial structure and curb some of the incentives for local governments to trammel the rights of farmers and others left behind by China’s extraordinary wealth gains.

My group, Common Ground-NYC, has been advocating a land-heavy property tax for years, in a series of comments on both Western and Chinese media, as have more influential Georgist, or Georgist-sympathetic, economists like Michael Hudson and Former Assessor of Greenwich, CT, Ted Gwartney, who have both had high level meetings with officials in China and other Chinese groups going back to the 1990s.

Hudson has written in July, 2013: China — Avoid the West’s Debt Overhead: A Land Tax is needed to hold down Housing Prices  How can China avoid the “Western financial disease” — a real estate bubble followed by defaults and foreclosures? The U.S. and European economies originally sought to avoid this fate by taxing the location’s site value. A rent tax was the focus of Progressive Era reforms.

Enacting a rent tax remains China’s main challenge to accompany its privatization of real estate and natural resources. If land rent were fully taxed, it would not be paid to banks as interest for rising mortgage loans — and governments would not have to tax income and sales. Holding down housing debt will reduce labor’s cost of living, but not its living standards. 

While Western economies shrink in response to debt deflation and fiscal austerity, China continues its unprecedented 30-year growth. Many Western forecasters warn that it must suffer a Western-style financial crash, as if this is a universal path. But China has been industrializing and raising living standards by public credit and infrastructure investment similar to the mixed private/public balance that raised America, Germany and France to world powers as their Industrial Revolutions gained momentum in the late 19th century. Its keys are active public investment in infrastructure, subsidized education and urbanization, rising wage levels and progressive taxation. Read More….

China’s New Land Tax is a winner. It’s the best tax, the most sustainable, the most logical, the least bad of all taxes. Let’s consider a land tax at home

Censorship in America? China?

Censorship in America? China?

Of course. Censorship has always been an important tool of the Capitalist regime in America, just as it is for the Communist regime in China. The difference is that the Chinese trust their Government media 76% of the time (Edelman). The American Capitalist government (which has not explained their censorship policies to the people who live under Capitalism) receive a media a trust rating of 49%. Here’s one reason why:

Our American Pravda–by Ron Unz

The realization that the world is often quite different from what is presented in our leading newspapers and magazines is not an easy conclusion for most educated Americans to accept, or at least that was true in my own case. For decades, I have closely read the New York Times, the Wall Street Journal, and one or two other major newspapers every morning, supplemented by a wide variety of weekly or monthly opinion magazines. Their biases in certain areas had always been apparent to me. But I felt confident that by comparing and contrasting the claims of these different publications and applying some common sense, I could obtain a reasonably accurate version of reality. I was mistaken.  Read more…

This story, from The Independent, is a typical example of censorship under Capitalism. I’ve boldfaced the giveaway paragraph, below:

Max Keiser: ‘Barack Obama is clueless. Mitt Romney will bankrupt the country’

A serf in the days of King John, Max Keiser argues, was in many ways better off than some US voters in 2012.
“Because in the age of Robin Hood,” Keiser says, “at least the process of theft was transparent. The barons came to your house. They whacked you over the head then they took all your money.” Even if the poor didn’t exactly empathise with their oppressors, Keiser adds, they could at least comprehend their methods. “And the serfs,” he continues, “did enjoy a modicum of stability. They got something in return for their enslavement. A small plot of land. Shelter. A relationship with the lord of the manor.” In the modern age of “financial tyranny” orchestrated by what Keiser refers to as “the banksters” in charge of the major financial institutions in the US and Europe, he believes, “We have reverted to a more pernicious kind of neo-feudalism. The instruments of larceny have changed; that’s all.”
What better time, you might ask, to have the opportunity to vote in a presidential election? But the real forces which shape the destiny of his homeland, Keiser says, have long been impervious to democratic pressure.
“Barack Obama,” he maintains, “has been a huge disappointment. He reneged on every one of his campaign promises except one: he did buy his kids a dog. Of course he could be replaced in this election, but if that happens we will simply inherit a different version of the same thing, just as we have done in the US for the past 30 years. The guy in the White House,” he believes, “is really taking his orders from finance.”
You may never have heard the name Max Keiser, even though, once he begins to broadcast across China in the New Year, he will have confirmed his status as the most widely watched news commentator on the planet. Assisted by his producer, co-presenter and fiancée Stacy Herbert, Keiser, 52, mercilessly castigates rogue financiers and the politicians notionally required to oversee them, on programmes already transmitted by international networks including France 24, Al Jazeera and Iran’s Press TV. No channel in the United States will carry his broadcasts, which go well beyond the benign impudence of The Daily Show.
His most popular outlet is The Keiser Report, on Russia Today (RT), and its international viewing figures, as Keiser (not a man plagued by self-doubt) isn’t slow to point out, are huge. What has fascinated me, I tell him, when we meet in his London television studio, is that in Britain, in recent months, I’ve begun to hear his mischievously seditious RT show mentioned, with admiration, by taxi drivers, patrons in the Haringey Arms, and my window cleaner. This may not, I admit, constitute a statistically significant sample, but Keiser is clearly attracting people you wouldn’t necessarily expect to view a rolling news channel on a foreign network.
The presenter isn’t surprised. “There is a fury against this global banking fraud that is building every day,” he says. “People from all kinds of backgrounds, all over the world, have had enough.”
The Keiser Report, first aired in September 2009, is produced here three times a week. One episode, shown in September 2011, contained the interview with Roseanne Barr during which she famously observed that her solution to banking malpractice would be to “bring back the guillotine”.
While his sardonic, quick-fire delivery would allow him to shine in a debate at the Oxford Union or a Hampstead dinner party just as effectively as, say, David Dimbleby, Keiser’s utterings on the less laudable activities of Morgan Stanley, Goldman Sachs and other financial institutions also manage (unlike Dimbleby’s) to resonate with the kind of people who might fantasise about fire-bombing their local branch of NatWest. To illustrate a point, he will occasionally produce a plastic chicken, a stuffed rat, or a small explosive device. On one recent show, he advised David Cameron to, “Go back to Eton and get some of that back-stall shower pleasure.”
I tell Keiser how, the first time I saw him presenting the show with Stacy Herbert (his partner’s name, somewhat unfortunately, may be familiar from her appearance in 2002 red-top headlines concerning the “three in a bed sex sessions” whose pivot was Angus Deayton), I’d assumed his performance to be fuelled by amphetamines.
“I wave my arms,” he says. “I shout. Of course I do. Because this is a global insurrection. Against banker occupation.”
He folded balloon animals on one show.
“Well, you have to make an impression quickly. Most people first see The Keiser Report at an airport or hotel. RT has 450 million viewers. It goes into more hotel rooms than the BBC and it has more YouTube views. Everywhere I go, people stop me in the street. And remember I’m broadcasting about global financial corruption; not so long ago, everyone used to say, who could be interested in that?”
is histrionic style, combined with the forthright nature of his views (Keiser recently derided the Eurozone as an entity “which poses as this prestigious club, but is actually a leper colony where everyone is checking who still has the most fingers left”) have led some to dismiss him as a marginal, whacked-out conspiracy theorist.
This perception is some way removed from the truth. Raised in an affluent New York suburb, Keiser was a highly successful Wall Street stockbroker and the creator and former chief executive of HSX Holdings, a company which, using his own software system, allowed traders to deal in virtual securities. Put simply, this allowed you to gamble on the success – and, more disturbingly to the studios, on the failure – of a Hollywood film before its release. The practice was halted by the industry, but not before Keiser had sold his shares at the top of the market, adding to his already substantial fortune.
He founded the hedge fund Karmabanque, which has sought (with limited success) to profit from any decline in the equity value of companies criticised by environmental groups, such as Coca-Cola and McDonald’s. And in 2007, in an Al Jazeera film called Extraordinary Antics, he travelled to Milan to examine how CIA agent Robert Seldon Lady and others had illegally abducted then deported an Egyptian imam, Hassan Mustafa Osama Nasr, who later faced torture in Cairo. (In 2009 Lady, also known as “Mister Bob”, was sentenced to eight years in absentia by an Italian court, though the US refuses to extradite him to Italy.)
“I imagine,” I tell Keiser, “that some Americans, seeing your work carried by RT, Arabic and Iranian stations, view you as a modern-day Lord Haw-Haw.” (William Joyce, the Irish-American who broadcast Nazi propaganda to the UK during the Second World War, and was hanged in London in 1946.)
“Some might. But all around the world, working people love the show. We make The Keiser Report at Associated Press. That, as you know, is an American company. The people who feel challenged are the banksters. What I’m saying is that you can fight back: by fighting fire with fire.”
Keiser is among the most outspoken of a group of American commentators (Texas-based broadcaster Alex Jones being another) who argue that national sovereignty and democracy in the US and elsewhere have been eroded by the power of global corporations. Keiser maintains that the most effective form of resistance is through individual financial activism. “If the Karmabanque hasn’t worked,” Keiser says, “it’s because there isn’t yet a critical mass of people who are prepared to fight back, and who instead prefer to be victims.”
The presenter lived in France for a decade, toying with screenplays including one near-miss based on the life of Houdini, which would have starred his close friend Alec Baldwin. (He currently runs a highly successful crowdfunding site, Keiser was based in Villefranche-sur-Mer, near Nice, when he met Herbert, who is eight years his junior, in 2003.
Herbert’s apparently subordinate role as co-presenter of The Keiser Report, in which her main task is to prompt, and then revel in her partner’s hyperbole, belies her acute instincts as a producer and editor. Before collaborating with Keiser, Herbert, the daughter of a NYPD officer who died in tragic circumstances when she was six, began her career working with Michael Phillips (who co-produced Taxi Driver and The Sting). She was later associate producer on the acclaimed but highly controversial animated 2005 series Popetown. A cartoon sitcom featuring the voices of Mackenzie Crook, Ruby Wax, Matt Lucas, Jerry Hall and Ben Miller, it was once described as Father Ted meets South Park. Originally commissioned for BBC Three, Popetown was dropped from its schedule after protests from the Catholic Church, though it is available on DVD.
Herbert and Keiser moved to London a year ago. “Because this is the world capital of banking fraud. Pretty much every financial scandal of the past 20 years has had its main component in London, because it has the least regulated banking environment. This is very important for the US, because America outsources its own fraud to London, just as it outsources its labour to China.” The JP Morgan and UBS traders who lost billions, he points out, were both London-based. “And Lehman Brothers went through the UK. As did AIG.” (The latter, a multinational insurance corporation, has been troubled by many controversies including its 2008 government bailout, subsequent executive bonus payments estimated at between $165m and $450m – some say more – and charges relating to accounting fraud, settled out of court in 2006.)
Tony Blair, Keiser adds, “was the first prime minister in this country’s history who knew that going into Downing Street would act more as a resumé builder than a way of serving the public. He has become fabulously wealthy with the contacts he made as prime minister.” Blair, he continues, “personifies the move, in the UK and the US, away from representational democracy and towards control by bankers. It is since New Labour that you have the rise of these incredible scandals: so you have HSBC involved in multimillion-dollar Mexican drug-laundering. [In July of this year, the bank publicly apologised for its "lapses".] And Barclays involved in rigging Libor [the estimated interest rate for inter-bank loans].”
I tell Keiser I can feel many readers wondering exactly what relevance such activities might have to their lives. “Well, the policy of the banks has been to keep interest rates as low as possible, so as to fuel financial speculation, no matter how oppressive the effect of that would be. Low interest rates wipe out savers and devastate middle-class workers. The banksters have orchestrated this wealth transference of trillions, from the poor to the very wealthy. At the expense of everybody who isn’t at the top.”
In a recent televised discussion chaired by Andrew Neil, Keiser recalls, “We agreed that the country suffers from economic and financial illiteracy. Which makes it amazing that George Osborne has a programme whereby people will exchange their rights as workers for shares. Why is he proposing this, if not to exploit that knowledge gap? Shouldn’t the Chancellor be ashamed of himself?”
“But hang on – you’re not an anti-capitalist.”
“No. I am pro-capitalism and I am pro-free market. But what you have now is not capitalism. It is a state- controlled, command and control, centralised politburo. Both in Britain and the United States. The States is run by the Federal Reserve, an institution that answers only to itself and to a few large banks. It’s modelled on the Bank of England. Ben Franklin said that one of the main reasons America revolted was to get away from the Bank of England, the mother of all central banks; the most pernicious and insidious of all.”
Read more…

China Attacks the USA

China Attacks the USA on All Fronts.

Try to see it from the hegemon’s point of view: While Russia confronts the USA head-on, China is attacking on almost every other front, simultaneously. China’s attacks look like neutral, ‘commonsense’ or ‘competitive’ moves. All nice and friendly:

  • Like Shanghai’s new gold exchange. Shanghai forbids naked shorting; all sales are for physical delivery. Perfectly sensible, right? Well, it drives a wedge between the price of ‘paper’ (naked short) gold on US’ Comex and physical gold. This thwarts the world’s biggest paper gold shorter, the US Treasury, which has been using trillions in naked shorts to rig the market since the US failed to deliver gold that Germany had lodged with it for safe keeping.
  • China’s offering Turkey financing and IP with their antimissile defense system. Turkey will be half out of NATO if it goes through with the deal – as it is threatening to do. Turkey is NATO’s Eastern wing.
  • Then there’s the renminbi, which is internationalizing 10 times faster than anyone predicted. China’s controlling the world’s desire to diversify their reserves by bulking up on renminbi.
  •  If the past 50 years are a guide, the next financial crisis is due within 36 months.

You’ve got to feel sympathy for the hegemon, don’t you? I certainly do. My income is entirely tied to the $US. Maybe it’s time we thought of cooperating with the Chinese government, instead of treating it as an enemy. Maybe it’s too late.

China Holds “Gold Congress”

– Positioning Itself As Global Gold Hub –

“In China, Gold Is Money”


With increased regulatory scrutiny on the London gold and silver fixings and what looks like a defensive attempt by the LBMA in London to protect their proprietary gold and silver price discovery auctions via the recently introduced CME/Thomson platform for silver and probably soon to be introduced similar CME platform for gold, it will be interesting to see how the Chinese government’s pro-gold strategy pans out.

China gold in the Shanghai Gold Exchange

China gold in the Shanghai Gold Exchange

We may soon see global gold hub wars between London and New York on the one hand and the increasingly powerful eastern hubs of Singapore, Shanghai and Beijing on the other.

China Gold Congress in Beijing

The China Gold Congress is currently in full flight in Beijing. The three day Congress is China’s biggest gold industry event of the year, drawing in participants from across the Chinese and international gold sectors including central banks, mining companies, bullion banks and refiners.

The event, co-sponsored by the World Gold Council (WGC) and the China Gold Association, showcases China’s gold industry and acts as a focus point for what is now the world’s largest gold market in terms of demand and product innovation.

Discussions and forums during the event cover everything from reserve asset management for the official or central banking sector, through to investment products and mining supply. One of the key themes this year is the internationalisation of the gold market.

China’s gold market accounts for one third of global demand, and according to the WGC, is expected to grow another 20% cumulatively from now until the end of 2017. In what is still a very centrally planned economy despite many market related reforms, nearly all reported gold activities in China flow through the Shanghai Gold Exchange (SGE) in one form or another.

Both the China Gold Association and the Shanghai Gold Exchange were established with government backing and their growth and success reflect a very deliberate pro-gold strategy on the part of the Chinese Government. Even though the China Gold Association is a non-for-profit member association, it still primarily acts as a conduit and coordination group between the government and the gold producers. The Shanghai Gold Exchange is the government’s second central hub in China’s gold market.

SGE approved refiners take in production from China’s fragmented gold mining industry and in imports from Hong Kong and other countries. The gold then flows through the Exchange after which SGE deliveries flow out to the banking sector, the official government sector, and additionally to the jewellery and technology industries.

The development of the Shanghai Futures Exchange also provides an additional venue for hedging and gold price discovery. In China gold is money and is accepted as such by the general population. There really does not seem to be a debate about this in Chinese government circles, and another part of the government’s strategy has been to advocate the increased innovative usage of gold by the Chinese banking sector.

Read more here at Max Keiser…

Read about how the US rigs the gold market in Foreign Policy Journal..

China Attacks the USA!!

China’s Productivity Miracle

Reflecting the Progressive Era’s reform agenda Simon Patten (1852–1922) argued that freeing markets from one source of economic rent (by taxing land rent) would merely leave the surplus to be taken by other monopolists and rent extractors (railroads, Wall Street trusts, and basic privatized utilities). To prevent unearned income (economic rent) from adding to the economy’s cost of living and doing business, potentially rent-yielding infrastructure should be kept in the public domain as a “fourth factor of production.” Instead of rentiers making a profit by charging access fees and user fees, the return to public investment should take the form of reducing the economy’s overall price structure. (Michael Hudson)

The U.S. lost 202,000 textile jobs between 1995 and 2002, a tremendous decline by any measure. But China lost far more jobs in this sector–1.8 million. All told, 26 of China’s 38 major industries registered job losses between 1995 and 2002.The Conference Board
Try imagining that you are the President of China and that, every day you are ultimately responsible for ensuring that 4 billion meals are served and 55,000 new jobs are created. Every day. There are two reasons why you need to create so many jobs (20 million a year):
  1. 10 million young people enter the workforce every year;
  2.  Because so many existing jobs get destroyed by automation.

Automation raises productivity and, therefore, wages. Wages in China are rising 15% a year.

But, if you don’t work and plan very hard, automation also creates unemployment–as we are seeing in the USA.
China’s labor productivity grew at a 17% annually between 1995 and 2002. The rise in productivity comes from improved technologies and the reallocation of resources: from lower-value to higher-value activities–which is very much a part of the Chinese Government’s 5-year plan. So plastic flowers are now manufactured in India, for example, while X-Ray machines are made in China….
China’s 17% annual productivity growth compares with an average of 4% in the USA. Of course, US productivity was already much higher than China as we would expect of a rich country. High productivity is a hallmark of wealthy economies.
27 of the 38 industries in China saw annual average productivity growth of over 10%. Steel production saw a loss of 557,000 jobs, but actual steel production has soared. Even though private manufacturing in China added 9 million new jobs, there was a net loss of 4 million manufacturing jobs in China in the period–mostly from older, state-owned industries.
China’s labor force is now producing 3 times as much as it did 10 years ago.
Think about that: it’s not just the lower wages in China that helped produce the boom of the last 10 years. It is that Chinese manufacturers are becoming more efficient. That’s one reason why US import prices are stable or falling even though the dollar is down 20% over the last few years. Companies who export to the US are simply making the same products less expensively.

Economists refer to a rise in output per input of capital and labour as a gain in “total factor productivity”.
Such gains have many sources. One textile boss got 20% more out of his seamstresses by playing background music in his factory, recalls Arnold Harberger of the University of California at Los Angeles.
The striking thing about the growth in China’s total factor productivity is its speed: the fastest in the world over the past decade. Between 2000 and 2008 it contributed 43% of the country’s economic growth, according to the APO. That is just as big a contribution as the accumulation of capital, which accounted for 44% (excluding information technology). The Economist.

St. Louis Federal Reserve


If we believe the mainstream media, China is taking advantage of our good nature, undervaluing its currency (though American exporters do not think so) and generally being mean.  But the figures tell quite a different story.

But take a look at the growth in US exports to China!

Harvard’s Martin Feldstein has this to say about the future of our trade relationship:


The policies that China will adopt as part of its new five-year plan will shrink its trade and current-account surpluses. It is possible that, before the end of the decade, China’s current-account surplus will move into deficit [It has already done so, briefly–Ed], as the country imports more than it exports and spends its foreign-investment income on imports rather than on foreign securities. If that happens, China will no longer be a net buyer of US and other foreign bonds, putting upward pressure on interest rates in those countries.
Although this scenario might now seem implausible, it is actually quite likely to occur. After all, the policies that China will implement in the next few years target the country’s enormous saving rate–the cause of its large current-account surplus.

So that’s the story on China’s economy: annual productivity growth of 17% means wages rising 15% and national tax income rising 22% which means rising investment in education, infrastructure, and health care.

It also means that the Chinese people continue to give their government 85%–95% trust and approval ratings, year after year. Hardly surprising, when you think about it.

As always, your comments are welcome and encouraged. Issues like this need more than just one opinion. And do feel free to add links to useful sources and stories!


Crime in China

Crime in China

iLook China

This guest post and first-hand expose by Tom Carter first appeared on May 1, 2010 as On Crime in China – Part 1 (a five part series).
Perhaps the single most reassuring fact about travel in thePeople’s Republic of China is its remarkably low crime rate.
The Ministry of Public Security (MPS), the principal authority of domestic criminal procedures, regularly reports a year-on-year decline in violent crime, while common property infringement incidents such as theft, fraud and robbery, which account for no more than 80 percent of all cases, rise annual by as little as 1
Cosmopolitan cities such as Beijing and Shanghai, which annually attract tens of millions of overseas visitors on business or holiday, applaud themselves for providing public order and relatively safe-city streets where one can walk at just about any hour in relative safety.
But all is not necessarily quiet on the home front.
In an uncharacteristically candid public admission, the MPS once reported a pandemic of illicit drug trafficking in China led by an increasing number of foreign crime syndicates, reportedly from the African regimes of Nigeria and Liberia and triads from neighboring Asian countries.
Moreover, violent crime on the southern shore is notoriously rampant in Guangdong, making it the only province in China‘s mainland to arm police with guns.
Nor is this to say that Westerners are entirely exempt from either being the victim of, or committing, more serious crimes.
I found myself in several situations while traveling extensively throughout China. I fondly remember the street gang that confronted me in a darkened alley in Inner Mongolia, or facing off with a pickpocket in a crowded Qianmen hutong in Beijing with a baying crowd of onlookers taking great delight in watching a 196cm waiguoren vigilante.
Then there was that time in Chongqing. Not exactly heralded as a top tourist destination, the interior municipality of Chongqing, located on the rusty banks of the Yangtze River, uncannily resembles a lawless early-century port-of-call of maritime merchants, hardened dock laborers and waterfront brothels.
An overnight stay in a small hotel on the outskirts of China’s largest, and hottest, city, turned into a midnight brawl after a polite request on my part to ask three obviously drunk men loitering in the hallway to settle down, was met with a hostile response.
A push on their part led to a not gentle shove on mine, sending one of the men flying back into his two friends.
The next few moments were a feral blur, and for a short time, I laudably held my own. But six bare fists can infallibly do more damage than two can.
The tough guys retreated into the night, leaving me breathless and battered.
The police arrived thereafter and took me to the Public Security Bureau to get a statement.
It was determined that the hotel security guards failed to serve their purpose, and it was also found that the hotel did not follow strict municipal protocol in copying the three perpetrators’ identification cards before accommodating them, which would have assisted the police in their investigation.
This meant that it was my right under Chinese law to demand an immediate financial settlement from the hotel proprietor—for my troubles, you see—though it hardly made up for the bang-up job those inebriated gentlemen did on me.
To be sure, the aforementioned incident is an isolated one, with a great majority of expatriates being lucky, or not, to see so much action during their stay in China (“I was overcharged!” seems to be the leading complaint).
With only one police officer for every thousand residents in a population of 1.3 billion, and more than 40 percent of mainland precincts having fewer than five officers, compounded with a general lack of funding, resources or state-of-the-art technology, China’s police ought to be commended for maintaining an impressively low national crime rate.
Let there be no mistake: Xinhua News Agency has reported that total criminal prosecutions in China increased by more than 10 percent in 2009, and public security cases increased by about 20 percent.
However, compared to hyper-violent icons of the Wild West such as Los Angeles and New York, it is no wonder that China is witnessing an increasing number of foreigners residing in its gleaming municipalities.
China remains one of the statistically safest countries to visit, and the rest of the world would do well to take notice.
Travel photographer Tom Carter is the author of CHINA: Portrait of a People, a 600-page book of photography from the 33 provinces of China, available on!
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This entry was posted on Tuesday, August 2nd, 2011 at 11:00 and is filed under ChinaChinese CultureChinese policecrimecultural differencesexpatriatesgovernmentlegal systemtourism. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
mao great leap forward

Great Leap Forward Fatalities

How Many Great Leap Forward Fatalities Were There?

For 60 years our corporate media has told a horrifying tale of Chinese Government: cruel, oppressive, corrupt, and failing. Always failing. (That China has thrived as never in its 2500 year history is irrelevant to the narrative).

The Great Leap Forward, a eye-blink in that history and an experiment everyone embraced enthusiastically, was ill-considered. Mao gambled on revolutionary development because, he said, if China didn’t develop quickly it would be bullied and overpowered by the USA.  On that, everyone agreed. Mao’s stature allowed him generate enthusiasm and override the better judgement of his peers. The Great Leap’s failure sidelined Mao and allowed Premier Deng to propose – ta-dahhhh! – Reform and Opening Up. The rest is, as they say history. 

Western media hated the GLF for several reasons:

  • It was revolutionary. Revolutions threaten elites.
  • Mao did it. They wanted to equate Mao and Stalin.
  • Chinese are foreign.
  • Foreign is Almost always bad. (So it’s OK to torture and kill  foreign people).
  • Because COMMUNISTS. Communists are always bad.
  • Because crops had failed so a famine story would be credible
  • To support the US, which had imposed a food embargo on China.

Even if crops had been bountiful the GLF would have failed – for reasons any developmental economist can explain. But instead of bounty there was a famine, so it could be rolled into the failure of the GLF and rendered more credible. Did lots of people starve to death? No. Here’s why:

  • China has been dealing with famines since before Jesus was born. Everyone has at least 12 months notice to leave the afflicted area. There was no sign of population movements that, in killing 30 million would have sent 100 million fleeing.
  • Famines bring down governments. The Chinese government has total recall of centuries of governmental famine data. Their survival depended on the CCP preventing starvation – which they have done consistently in every area where they’ve operated in for the past 80 years. Their track record has been unequalled in Chinese history.
  • Famines are always political. as Amartya Sen explains. Regional famines are used to target undesirable populations. There was no such population in the alleged famine zone.
  • China was politically united for the first time in 200 years. They were all in it together, happy  to cooperate putting their beloved country back on its feet.
  • Famines are fatal to governments; competent governments prevent them. The failure of the GLF was not incompetence. It was a bold experiment that failed and whose failure the CCP publicly acknowledged.
  • China was, at the time of the GLF, 1958-61, the most equitable country on earth. They were already sharing everything they had fairly. Their GINI coefficient was closer to 1 (perfect equitability) than any nation before or since. What little they had they all shared.
  • China was Communist, a brand that commits the Party  to sharing everything equitably. It was their ideological claim to legitimacy. No one accused the CCP of being inequitable. Nobody would have gained from a famine.
  • There’s no evidence for it. Conclusions from census data, for example, are mixed at best. Frank Dikotter’s (see below) ‘evidence’ is like the evidence on which the Mormon Church is founded: nobody’s ever seen it.
  • Famines don’t kill everyone. They kill the most vulnerable. If a famine killed 30,000,000 people then at least 150,000,000 people watched their death agonies and lived to tell the tale. Over the course of their lifetimes they would have told at least another 750 million people. It would have been common knowledge. They didn’t. It isn’t.
  • Virtually all the sources for the famine story are Western or Western-funded. The ‘famine’ story came from the West and lives in the West today, not in China.

Like the Tiananmen ‘Massacre’, the ‘famine’ never happened. Both events were and are wildly unlikely and would have benefited nobody. To have perpetrated either would have required a government so stupid, so incompetent, so corrupt, so cruel and brutal that it would act to delegitimize and destroy itself. 80% of Chinese trust the CCP and approve of what it’s doing.

With that background, take a look at Chris Luo’s thoughtful coverage in the Post:

The Great Leap Forward

by Chris Luo [email protected]

A commentary on the Great Leap Forward published in official media has come under fire online after it said studies which concluded tens of millions of Chinese starved to death were “schemes of Western hostile forces”. The article touched on Mao Zedong’s massive-scale economic drive of 1958 to 1961 that attempted to rapidly transform China from an agrarian society to a Communist nation through industrialisation and collectivisation.

Several studies released in recent years – none recognised by the Chinese government – have estimated that as many as 42 million people starved to death during the famine caused by the campaign.

Small backyard steel furnaces were erected in rural neighbourhoods during the Great Leap Forward, with the hope of making high-quality steel. The results were often unsatisfactory due to a lack of the right materials and knowledge of the manufacturing process.

Some Western hostile forces repeatedly hype and exaggerate that China starved to death tens of millions of people … [They] were attempting to undermine and disprove the Chinese Communist Party’s validation to rule,” wrote Bei Yuan in an article published in Social Sciences Weekly, a publication of China’s top official think tank, the Chinese Academy of Social Sciences.

Bei, a retired teacher at the Anhui Administration Institute, acknowledged there was “great loss” during the period but called it “an exploratory miscarriage” as the Communist Party sought a path to socialism. “Since it was an exploration, it could have been a success, but it could also fail,” he wrote.

On social networking site Weibo, which has become a vigorous space for public discussion, the article was overwhelmingly greeted by outrage. Comments flooded in, criticising the article as a poor attempt to justify Chairman Mao’s campaign.

Citizens brave the rain as they construct a reservoir in Beijing during the Great Leap Forward. Photo: Chen Bo

“How arrogant! In their eyes the entire population is only lab rats for a political experiment,” Ma Qianli, a Shenzhen-based consultant, wrote.

A blogger with the alias Chengdu Xiao Xuehui added: “No one, or any organisation, has the right to treat a nation as an experiment, nor does it have the right to treat anyone like a lab rat.”

The article was flagged high on Xinhua’s news portal on Monday, a rare high-profile touch on a usually sensitive subject.

Official narratives have long described the Great Leap Forward as “three years of natural disasters” or “three years of difficult times” and avoided mentioning the number of deaths during the period. The subject is rarely publicised by official media. Article author Bei also questioned the number of deaths attributed to the campaign by independent studies, saying that unnatural death did not necessarily mean death by starvation.

A granary with a slogan that reads “preparing against war and famine for the people”, seen during the Great Leap Forward.

He added that a rapid drop the population of some Chinese provinces during the period may have been due to a large population outflow to other regions.

Yang Jisheng, author of Tombstone: The Untold Story of Mao’s Great Famine, an influential book published outside of mainland China in 2008, has argued that unnatural deaths caused by other factors during the famine were only a fraction of those caused by starvation.

He estimated that 36 million people died from starvation, basing his conclusion on interviews and piles of local government demographic records and journals.

Frank Dikotter, a Dutch historian who wrote Mao’s Great Famine, a major overseas study published in 2010, estimated there were at least 45 million premature deaths in China during the period. He said that widespread violence also contributed significantly to the staggering number of unnatural deaths and that starvation was often used as a punishment by party cadres.

Read more at South China Morning Post

How many Great Leap Forward Fatalities? None, probably

Income Distribution

Income Distribution

Department of State: The fourth quarter will develop the overall program of reform of the income distribution Wen Jiabao chaired a State Council executive meeting Analysis of the current economic situation in the deployment of the recent economic work Conference that China’s economic growth rate to stabilize and continue positive change, we are confident that through the efforts of the full realization of the goals for this year Xinhua Beijing October 18, Premier Wen Jiabao of the State Council, chaired a State Council executive meeting on the 17th, the analysis of the current economic situation, economic work arrangements for the fourth quarter. Conference that China’s economic growth rate stabilized and continue to appear positive changes, we are confident that through our efforts….