Archive for December 22nd, 2011

Thursday, December 22, 2011

“But aren’t You an Ally of the Government?”

In June this year, Radio Eins, of Berlin’s and Brandenburg’s domestic public broadcaster RBB, reported on the open letter by Wang Fengbo, Hong Zhu and other former Deutsche Welle (Voice of Germany) journalists.

[If you aren’t aware of the story of April/May this year, please read the post and its links under “Related” at the end of this post – JR.]

Christian Hoppe, member of Deutsche Welle’s employee committee, was quoted as saying that some of the letter’s phrasing had been overboard, but that by and large, the events had been described accurately (die Autoren des „offenen Briefs“ seien „mit einigen Formulierungen über das Ziel hinausgeschossen“, würden jedoch “die Vorgänge in der Redaktion insgesamt korrekt wiedergeben”). Radio Eins based a number of quotes on a report by Evangelischer Pressedienst (EPD, Frankfurt am Main).

Tilman Spengler was quoted with a number of critical remarks. When the sinologist was refused a visa to attend the Art of Enlightenment exhibition‘s opening ceremony in Beijing, in March  this year, a duty editor at Deutsche Welle had  called him on the phone and expressed his surprise – after all, Spengler was “an ally of the government”, wasn’t he (ein Verbündeter der Regierung), the editor suggested, according to Spengler.

Spengler had lauded Liu Xiaobo in a ceremony in Germany, in September last year.

I’m not exactly sure if the duty editor – provided that the quote is correct – thought of Spengler as an ally of the Chinese, or the German government (“But you are an ally of the government. How can this happen?”) According to the EPD report, Spengler was “rather an ally of Deutsche Welle”, as he had defended the Chinese department against the 2008 open letter by the department’s critics.

The original story appeared in the EPD reader’s May edition, as one of their main stories of the month. The temporary head of Deutsche Welle’s Chinese department for some of the time described by Wang Fengbo’s and his three colleagues’ open letter, denied most of the letter’s account, and blamed the climate of fear stated there on the restructuring processes, according to EPD/RBB.



» DW, JR turns to Science, Dec 17, 2011


Thursday, December 22, 2011

Three Major External Pressures, as seen by “Economic Reference”: Decreasing Demand, Outflow of Capital, Protectionism

As the Eurozone worries keep deepening, and other developed foreign economies’ recovery remains weak, the emerging economies, too, are feeling the pressure, writes Economic Reference (经济参考报), a paper unter Xinhua management, republished by China National Radio (CNR) on Thursday.

[Main Link:]

2012 no easy ride?

2012 no easy ride?

In such an external environment full of risks, China was to face many risks and challenges in 2012. Global economic recovery was slowing, risks on the financial markets kept accumulating, and protectionism was deepening. Foreign demand would decrease, and so would capital flow away from China, and [trade] frictions.  These were the three major challenges for China, in 2012, suggests the article.

Economic Reference quotes a paper by People’s University (or Renmin University), China Macro-Economic Analysis and Forecast, 2011 – 2012, as referring to the European debt crisis as turning into a medium-term crisis. If it deteriorated or not would be one of the great global economic challenges and uncertainties. It didn’t just have the potential of changing the pattern and structure of global finance, but could also alter the path of global economic recovery. A researcher with the ministry of commerce, Liang Yanfen (员梁艳芬)  is quoted, as she points out that the debt crisis – spreading from Greece as a peripheral European state to Italy and Spain (i. e. more central European countries), weakening market confidence given the close interconnectivity of European countries’ debts and their close economic ties – had become a burden on banks, and on the real economy’s recovery.

The European and American markets had been China’s most important export markets. That China’s export business trends had been declining had become increasingly evident. From rising by 23.6 per cent from January until August on average, it had dropped to 15.9 per cent in October, and to 13.8 per cent in  November. Orders from America and Europe had contracted by 24 and 19 per cent respectively, writes Economic Reference.

On newly-emerging markets, the global slowdown also curbed efforts by Chinese enterprises to tap new markets. For example, Brazil’s import growth had fallen by 19.7 percentage points during the first nine months of this year.

The ministry of commerce predicts that the trend of growing Chinese exports will continue in 2012, but probably at slower rates than in 2011, and the main reasons for this lies in the growingly conplicated external environment. There is hope that imports would grow faster than exports, and that the trade balance will continuously improve.


The global financial markets were in a state of trepidation and anxiety (恐慌不安), the article continues on its second page. Once again, since April this year, increased market volatility and liquidity risks had emerged, the article quotes a blue book by the Academy of Science on 2012. Here, poor macro-economic performance, developed countries’ debt crises and inter-banking problems are given as reasons. There were no reasons to expect short-term changes, and the financial markets would therefore remain unstable.

A ministry of commerce situation report (形势报告) with similar assessments is then quoted, but adding a mention of the risk of an outflow of capital from emerging economies. China’s central bank’s data showed that in October and November, China’s funds outstanding for foreign exchange*) showed negative growth.

Sang Baichuan (桑百川), director of the Institute of International Economy at University of International Business and Economics in Beijing, told Economic Reference [reminder: the paper which originally published the article translated here] that he saw capital outflows as the greatest risk China would be facing from the external environment, in 2012. Analysis showed that if foreign investors withdrew ten per cent of their investment from a market, this would lead to 4.7 million employees being laid off, to a fall in exports by more than 86 billion US dollars (i. e. export growth would only be somewhere above 7 per cent), and the country would lose an annual total of 160 billion Yuan RMB in national tax revenues.

That said, others held different views, write Economic Reference. Wang Jinbin (王晋斌), professor at People’s University’s School of Economics, had told the paper that there was no great risk of such a scenario next year, because the economy as a whole was under control. Another source, apparently a paper from this company,  is quoted as saying that compared to capital outflows in other Asian countries, the impact on China would be small. Foreign banks weren’t strongly engaged in China, and gaps that might emerge all the same could well be filled by domestic banks.

Another economist expresses belief in more active ECB intervention.

Remains protectionism as a factor. Relevant reports by international organizations showed that after the G-20 summit, from December 2010 to May 2011, global trade had been affected by protectionism, with an effect of 0.6 per cent on global trade, or an increase by 61 per cent, when compared with the preceding period – June to November 2010, writes Economic Reference.

Many of the descriptions that follow don’t seem to be too different from previous Chinese articles concerning protectionism I’ve translated in the past, but adds a batch of emerging economies which, too, had taken restrictive measures during the first nine months of 2011, i. e. Brazil, Turkey, Indonesia, Argentina, and India, with eighteen investigations, which meant that they accounted for 36 per cent of all investigations worldwide, carried out on Chinese trade.  This was likely to aggravate, the article quotes from the earlier-mentioned  China Macro-Economic Analysis and Forecast, 2011 – 2012 by People’s University – the coming year would see a period of global economic slowdown and rebalancing, frictions about exchange rates, trade frictions, and  intensified domestic structural restructuring in a number  of countries. Protectionism could go beyond traditional fields of contention.



*) Funds outstanding for foreign exchange are explained as a result of the RMB’s inconvertibility. These funds are the amount of foreign currency bought by the Chinese central bank, and offset the capital inflow in foreign currency, as Xinhua (republished by the Global Times, explained in April. A foreign investor will invest globally convertible currency, but much of it will typically be invested in assets, machinery, and operating costs paid in RMB.



» China’s Options as Exports Dwindle, Oct 12, 2011
» More Scientific and Fairer Rules, Sept 19, 2011


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