Elite Chinese Politics and Political Economy

Finally, the China Investment Company formally opened its door for business. Although this is widely expected, there was ambiguity surrounding its managers until the last minute. We now finally have the definitive answer. As expected, the chairman is Lou Jiwei; the CEO is Gao Xiqing.

The 11 member board of directors
1. Lou Jiwei
2. Gao Xiqing
3. Zhang Hongli
4. Zhang Xiaoqiang (NDRC rep)
5. Li Yong (MOF rep)
6. Fu Ziying (MOC rep)
7. Liu Shiyu (PBOC rep)
8. Hu Xiaolian (SAFE rep)
9. Liu Zongli (outside director, but formerly MOF)
10. Wang Chunzheng (outside director, currently NDRC vice chairman)
11. employee member, yet to be determined

2 observations. 1. Clearly no outsiders in the top management, despite rumors about Fred Hu. 2. What's with two board members from the NDRC??

The company is run by a 7-member working group
1. Lou Jiwei (Chairman)
2. Gao Xiqing (president)
3. Zhang Hongli (VP)
4. Xie Ping (VP)
5. Wang Jianxi (VP)
6. Yang Qingwei (VP)
7. Hu Huaibang (Chief Monitor)

Note, the party group in the company includes all of the above except for Jesse Wang (Jianxi)!! Could it be that he is not a party member?? If he is a party member, why is he not in the party group?!

Also, these poor people will be paid as state cadres, similar to the case of Huijin. But CIC wants to pay its professional employees market salaries. So you will definitely have employees who get paid several dozen multiples that of their bosses.


中国投资公司今日正式挂牌
http://www.sina.com.cn 2007年09月29日 11:30 《财经》杂志网络版

　　《财经》记者 李箐《财经》网络版

　　中投公司董事长楼继伟指出，在不损害商业利益的原则下，中投公司会适当增强透明度

　　【网络版专稿/《财经》杂志记者 李箐】9月29日上午10时，中国投资有限责任公司(下称中投公司)正式在北京新保利大厦挂牌成立。

　　作为国有独资公司的中投公司，注册资本金为2000亿美元，负责管理我国2000亿美元的外汇储备。中投公司自今年3月开始筹备，所从事的外汇投资业务以境外金融组合产品为主。此前，中投公司曾以30亿美元入股了美国最大的私人股权投资基金百仕通公司。

　　挂牌前，中组部副副部长王尔乘到中投公司宣布了人事任命。

　　据悉，中投公司董事会成员共11人，包括三名执行董事、五名非执行董事、一名职工董事和两名独立董事。其中，三名执行董事为楼继伟、高西庆和张弘力；五名非执行董事为发改委副主任张晓强、财政部副部长李勇、
商务部部长助理傅自应、央行副行长刘士余以及央行副行长兼外管局局长胡晓炼；两名独立董事是原财政部部长刘仲藜和现任发改委副主任的王春正。此外，一名职工董事尚未选出。

　　中投公司党委成员共有六人，其中楼继伟任党委书记，高西庆和胡怀邦为副书记，张弘力、谢平和杨庆蔚任党委委员。

　　同时，中投公司将成立七人管理委员会(又称“七人小组”)，由楼继伟、高西庆、张弘力、谢平、汪建熙、胡怀邦和杨庆蔚组成。其中，楼继伟出任公司董事长，高西庆担任总经理，张弘力、杨庆蔚、谢平和汪建熙出任副总经理，胡怀邦任监事长。七人管理委员会将负责公司的对外投资决策以及日常经营管理。

　　据悉，年满60岁的中国人民银行副行长苏宁曾被列入中投公司七人管理委员会名单，但由于最近美国次级债风波的不断扩大，此前计划成立的存款保险公司加快了筹备进度，苏宁有望出任这一机构的负责人，遂退出了七人小组。

　　据了解，中投公司未来的主要决策以及管理都将由七人小组负责。目前，这七人仍然作为国家中管干部，因此在薪酬体系上将与汇金公司接近。

　　汇金公司管理层的薪酬水平略高于国家部委，基本上不在市场化范围之内。目前，中投公司已经请了国际知名的咨询公司为其设计一整套内部管理和薪酬体系。公司表示，将按照市场化和国际化的薪酬体系来操作，具体业务人员也将以市场化形式招聘。中投公司董事长楼继伟在挂牌仪式上则强调了“党管人才”的原则。

　　近日，英国《金融时报》报道称，欧洲最大的私人股本集团Apax Partners高层管理人员本周对中国进行了访问，讨论一系列商业问题，其中包括中国对其投资的可能性。这种投资类似于今年5月中投公司30亿美元收购百仕通股权。

　　报道还称，因为中国政府与百仕通达成交易时曾承诺，明年5月之后才会进行类似投资，因此新的投资还要等待。

　　此外，欧盟经济和货币事务专员华金·阿尔穆尼亚(Joaquín Almunia)在一次专访中称，“除非主权财富基金变得更加透明，否则它们在欧洲的投资将受到限制”。

　　中投公司董事长楼继伟指出，在不损害商业利益的原则下，中投公司会适当增强透明度。-

　　资料：七人小组成员

　　楼继伟，57岁。现任国务院副秘书长，曾任贵州省副省长、财政部副部长。

　　高西庆，54岁，现任全国社保基金理事会副理事长，曾任中国证监会首席律师和副主席。高西庆拥有美国杜克大学法学学位，是美国注册律师，曾在华尔街工作多年，对中美金融法律体系非常熟悉。

　　张弘力，57岁，现任财政部副部长，曾任财政部预算司司长。

　　谢平，52岁，现任中央汇金投资有限公司总经理，曾任中国人民银行研究局局长、金融稳定局局长等职。

　　汪建熙，56岁，现任中央汇金投资有限公司副董事长，曾任中国证监会首席会计师、副秘书长。

　　胡怀邦，52岁，现任中国银行(5.93,0.06,1.02%)业监督管理委员会纪委书记、党委委员。

　　杨庆蔚，58岁，现任
国家发改委投资司司长。

international school kids and guards


Hardgroove and guards

A bit of a side item, though one I find very interesting (and a relief from all this talk of the 17th PC). Recall that this blog showed an article on an unprecedented rock show in Chaoyang Park where Nine Inch Nails, Public Enemy, and Cui Jian played. One of our readers, the bass player of Public Enemy--Mr. Hardgroove, called me yesterday and provided some interesting insights into the show. In essence, there was massive security presence (not police, but hired guards), which got into a bit of a scuffle with the audience. It turns out that it was just a bunch of spoiled international school kids. Interestingly, Hardgroove tells me that the participating bands urged the audience to not antagonize the security guards, even though these bands are some of the most rebellious outfits out there by reputation. Below, I paraphrase part of what he told me, as well as his pictures of the show. Thank you Hardgroove, and I hope to see you in China!

HG: Public Enemy could not be advertised as such, but instead was named PE in the publicity material. All the bands received warning from the organizers to not antagonize the security guards.....

HG: The security guards there were very young boys, and they were security guards instead of the police. When Marky Ramone was playing, there was commotion, where I saw foreign kids (Australian, New Zealand, US, German) yelling at the security guards. One kid grabbed the hat of the security guard and passed it around. It was the fault of those irresponsible kids, who were international school kids with little accountability in a sense. I felt that it was not a political incidents. I actually went to the kids and tried to quiet them down. It was my obligation to do it.

As expected, the previous article about the possibility of Xi Jinping being promoted into the Standing Committee triggered a storm of discussion among us China scholars. A reporter asked me the following questions about this issue, and I also append my response.

is it unprecedented for someone to do just a short stint in the provinces and then be elevated to the standing committee; and once in the SC, that person can't be concurrently party secretary?

I am searching my brain for an example of a PSC member who is also provincial party secretary. There has not been a case after the liberation where a PSC member served also as a regional leader. The closest example of that after the liberation was Peng Zhen, who was a secretary in the party secretariat and vice chairman of the NPC while serving as PS of Beijing, but he was only a politburo member.

To have Xi serve as a regional leader and PSC member would be unprecedented, but then we never had so many PSC members before, and frankly a couple of them have nothing much to do. An argument can be made that Shanghai is that important, but then Hu would not want to make that argument. So, if Xi is elevated, he would be given a higher job in the government as well. There have been many cases of rapid helicoptering in the past: Zhao Ziyang was vice premier for a few months before
becoming premier; Zhu Rongji; Zeng Qinghong; Remember, Xi is a CC member, just like Li Keqiang, and Xi has been serving as provincial party secretary for a long time before Shanghai, and that experience counts too.

The big news today is that Xi Jinping may be a candidate for the PSC, along side with Li Keqiang. I have always thought that a Xi Jinping-Li Keqiang trade was a likely outcome for the 17th PC. Essentially, Hu would really like to promote Li Keqiang, but in order to accomplish this "helicoptering" from the central committee to the PSC, he would have to allow someone from the Zeng Qinghong/princeling side to similarly "helicopter" someone. Because of dad's connection and the recent straw poll, there is no one better than Xi.

Shanghai Party boss tipped for higher office-sources

By Benjamin Kang Lim

BEIJING, Sept 25 (Reuters) - Shanghai Communist Party boss Xi
Jinping has emerged as a dark horse to join China's top echelon
of power, sources with ties to the leadership said, as jockeying
intensifies ahead of next month's key Party meeting.

Current leaders President Hu Jintao and Premier Wen Jiabao,
both in their 60s, are widely expected to retain their seats on
the Party's all-powerful Politburo Standing Committee in a
leadership reshuffle at the 17th Congress opening on Oct. 15.

Hu, who is tipped to retain the top job in the Party and the
Central Military Commission at the closed-door Congress, may
promote more than one younger-generation successor to the
Standing Committee in what would be a watershed move.

At the very least, several of Communist China's new
generation of leaders -- the fifth after Mao Zedong, Deng
Xiaoping, Jiang Zemin and Hu himself -- are expected to join the
decision-making Politburo, one notch below the Standing
Committee.

Shanghai Party boss Xi, 54, and Li Keqiang, 52, a Hu ally and
top official in the northeastern province of Liaoning, are
front-runners to replace Hu and Wen in 2012, the sources said,
requesting anonymity.

If Xi joins the top leadership, it would mean that an
official who cut his teeth managing prosperous provinces on
China's east coast would have a major say in central policy.

Xi's name emerged last week, while Li, a political ally of
President Hu, was identified by Reuters last year as a candidate.

TOPPED THE POLL

Xi's chances soared earlier this year when he topped Party
regional straw polls known as "mo di" (literally "try to find out
the real situation"), said three independent sources with
knowledge of the informal votes.

"He won about 90 percent of the votes (in Shanghai)," one
source said.

A second source told Reuters: "He was No. 1 nationwide."

Xi has been in charge of the country's richest and most
glamorous city, Shanghai, for only six months.

If he makes it to the Standing Committee at the week-long
Congress, he could be named either first vice premier or vice
president at the annual parliament session next March, the
sources said.

"Xi was put in Shanghai as the Party's best person," the
second source told Reuters.

Xi is close to political allies of Hu's immediate
predecessor, Jiang Zemin. But he is a "princeling", one of the
privileged sons and daughters of the country's incumbent, retired
or late leaders, making him palatable to both Hu and Jiang.

"That figure, someone who can appeal to all sides and who
does not offend anyone, is quite a good source of guidelines for
the sort of people who are likely to rise," said Rana Mitter, a
Chinese politics lecturer at Oxford University.

Xi is the son of late reformist vice-premier and parliament
vice-chairman Xi Zhongxun, architect of China's special economic
zones which enjoyed preferential tax breaks.

He began his political career working as a secretary to Geng
Biao, a vice premier and Politburo member in the late 1970s who
went on to become secretary-general of the Central Military
Commission. Geng was defence minister in 1981 and a vice-chairman
of parliament in 1983.

When Xi became Shanghai Party boss in March, his first public
appearance was a visit to the venue of the Communist Party's
birthplace to underscore his political legitimacy.
(Additional reporting by Chris Buckley and Ben Blanchard)

Xinhua announced that the 17th Party Congress will introduce a change to the CCP Constitution. The key issue here is whether the revision is a "theoretical" one or a procedural one. Most likely, it will be a theoretical one adding Hu Jintao's scientific development and advance nature of CCP members into the constitution. However, it would be really exciting and interesting if procedural amendments are added. It could make clear the status of the many experiments in both leadership selection and decision-making that have been taking place at the local level.


Communist Party of China to amend Party Constitution

BEIJING, Sept. 17 (Xinhua) -- The Communist Party of China (CPC) is going to amend the Party Constitution in its upcoming 17th national congress scheduled for Oct. 15, according to a meeting of the Political Bureau of the CPC Central Committee on Monday.

The Political Bureau decided to submit a draft amendment to the CPC Constitution to the 7th Plenum of the 16th CPC Central Committee for further discussion on Oct. 9, before it is tabled with the national congress.

The amendment should be made under the guidance of Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thoughts of "Three Represents", and to reflect the major strategic thoughts the CPC Central Committee has set forth since the 16th CPC national congress was held, such as the scientific concept of development, said the meeting.

The amendment should include important theoretic concepts, strategic thoughts and working arrangements which will be established in the report made to the 17th CPC Congress in a bid to reflect the latest development of the localization of Marxism in China, according to the meeting.

Monday's meeting, presided over by Hu Jintao, general secretary of the CPC Central Committee, also discussed a draft report to the 17th CPC national congress, and decided to table it with the 7th Plenum of the 16th CPC Central Committee for further review.

Bert Keidel at the Carnegie Endowment wrote a very informative piece on recent inflation, along with some recommendations. Both he and Jon Anderson at UBS believe that drastic hikes in deposit rates is the only way out, but I disagree.

Historically, the Chinese government never increased interest rates by much in response to inflation. Instead, they implemented lending and investment freezes. Granted, that is likely to be much less effective these days. However, not as ineffective as one might imagine. If we believe that the central government really has gotten control over land availability, they can certainly limit real estate development on that front and impose a wide variety of admin intervention on the housing market. The one big difference now is the stock market, as many, including Jon Anderson, have pointed out. But even here, I think the Chinese government can impose administrative measures like high transaction tax and high short-term capital gains tax.

I have frankly been surprised by how timid central government actions have been given that both Hu and Wen seem unified on the issue. One conclusion that I am drawing is that the government is in fact trying to encourage some capital flight, both through legal QDII channels and through good ole fashion cash in suitcase means. When inflation is high, that has been the main conduit by which Chinese find alternative investment. Unlike before, mild inflation accompanied by mild capital flight would actually do wonders for China's monetary situation without raising interest rates, which would have imposed a cost on bond issuing government entities.


China’s Looming Crisis—Inflation Returns E-mail
Print
By Albert Keidel
Publisher: Carnegie Endowment
Policy Brief No. 54, September 2007
Full Text (PDF)

The Chinese government must move quickly and dramatically to increase interest rates to reduce the risk of an inflation crisis, says a new policy brief from the Carnegie Endowment. Albert Keidel, an expert on China’s economy, urges the Chinese government to avoid the danger of harsh corrective steps which in the past caused severe declines in GDP growth, fueled deadly urban civil unrest throughout the country, and brought long-lasting damage to China’s international reputation.

In China’s Looming Crisis—Inflation Returns, Keidel argues that political disputes between competing interests groups could hold up adjustments to China’s government-administered interest rates. A delayed response could be dangerous, however, as both public and corporate bank deposits are already losing purchasing power. Value-losing deposit rates in the late 1980s and mid 1990s sparked heavy bank withdrawals and accelerated consumer spending—pushing inflationary pressures to the crisis point.

Key Recommendations:

• The Chinese government should raise key deposit rates or index them to future inflation to avoid moderate price rises leading to an inflation-driven panic.

• The Chinese government should enable farm diversification by increasing wheat and rice imports. This would contain future food price inflation and realize higher potential farmer productivity.

• The growing risk of an inflationary storm further confirms that China’s growth and inflation are domestically driven. U.S. government analysts need to take this opportunity to correct the popular misperception that Chinese growth is export-led—it is not. The nature of this inflation and the results of other recent in-depth research show that market demand behind China’s sustained growth is not subject to vagaries of international demand. U.S. commercial, diplomatic, and military thinking regarding China’s commercial behavior and long-term prospects needs to shift to account for this conclusion.

“The next fifteen months will be especially crucial for China. Foreign criticism has already been severe, thanks to imbroglios over food and toy safety, dollar-holding scares, and Olympics-related activism,” writes Keidel. “U.S. political players are all sharpening their anti-China claws for the 2008 elections. Brutal suppression of inflation-related domestic dissent would harden already negative U.S. attitudes governing commerce, sanctions, strategic contingencies, and military spending.”

Click on the link above for the full text of this Carnegie publication.

A limited number of print copies are available.
Request a copy

About the Author
Albert Keidel is a senior associate at the Carnegie Endowment, where he specializes in Chinese economic issues and related U.S. policy. He formerly served as deputy director and acting director at the U.S. Department of Treasury’s Office of East Asian Nations. Before that, he was senior economist at the World Bank office in Beijing. He gratefully acknowledges generous Ford Foundation support for research underpinning this policy brief; the opinions and conclusions were generated solely by the author.

Former Fujian Party Secretary Song Defu passed away after months of being ill, most likely with cancer. At a young age of 61, there is little doubt that he would have been promoted into the Polituro in October, perhaps taking over from He Guoqiang as the head of the Central Organization Department. Alas, this most capable of Hu's lieutenants saw an early end. To give readers a sense of the depth of his connections and ability, Song in 1985 served concurrently as the first secretary of the Central Secretariat of the Communist Youth League and Vice-Chairman of the Organization Department of the PLA General Political Department. In the 90s, he was in charge of finding jobs and housing for retired military officers....imagine the political capital he built up.

宋德福简历

　　1946年2月生，河北盐山人。大专学历。1965年参加中国人民解放军，同年加入中国共产党。

　　曾任排长、连副指导员，军政治部干事、秘书，空军政治部组织部青年科科长，青年处处长，解放军总政治部组织部青年处副处长。1983年任共青团中央书记处书记。1985年后，任共青团中央书记处第一书记兼解放军总政治部组织部副部长，中国青年政治学院院长，青年思想教育研究中心主任，中央机构编制委员会办公室主任。1993年3月至2000年12月任人事部部长，1993年5月任国务院军队转业干部安置工作小组组长。2000年12月任中共福建省委书记。2001年12月当选中共福建省委书记。2002年1月在福建省人大九届五次会议上当选为福建省人大常委会主任。2003年1月在福建省第十届人民代表大会第一次会议上当选为福建省第十届人民代表大会常务委员会主任。

　　2004年12月，中共中央决定宋德福不再担任中共福建省委书记，另有任用。2005年1月14日，福建省第十届人大常委会十四次会议决定，接受宋德福辞去福建省人大常委会主任职务的请求，报福建省十届人大第三次会议备案。

　　是中共第十二届中央候补委员，十三届、十四届、十五届、十六届中央委员。第九届全国政协常委。 （中新网资料）

I was more than a bit surprised by the story that Nine Inch Nails played in Beijing. I guess China is really trying to improve its cosmopolitan image. But the People's Armed Police is still on the side-line!

http://shanghaijournal.squarespace.com/journal/2007/9/12/hang-the-police-were-here-to-rock-the-beijing-pop-festival-s.html

Hang the Police, We're Here to Rock! The Beijing Pop Festival, Sept 10 and 11 2007

POLICE.jpgWhen the capital city of the world’s largest authoritarian police state hosts a rock concert with headliners Public Enemy and Nine Inch Nails, how does it prevent mayhem from breaking out? Answer: police. Lots of em. The Beijing Pop Festival was an impressive contradiction of rock-fueled mayhem that brought performers and audience together, and rigid military discipline that kept them apart.

The festival was a two-day weekend event that took place in the northern section of the sprawling Chaoyang Park on the eastern side of the city. One entered the southern gate of the park and passed through a seemingly endless child-oriented amusement park before reaching the grounds of the event. The open grounds offered precious little in the way of shade, and on both days the hot Beijing sun rained its harsh light upon us. Thankfully, a generous supply of cold beers and mojitos (thank god for those mojitos) kept us cool and buzzed throughout the event.

There were two stages. The first stage, sponsored by HIT FM, was the teaser stage--people could enter for free. The main stage was located further north beyond a hillock that kept the two stages from interfering with each other, though there was some bleeding between the two stages, only audible when one stage was silent. Before entering the main stage, one passed through a colonnade of stalls selling rock-oriented products: t-shirts, CDs, and other paraphernalia--packaged cool for the Chinese masses. After paying 200 RMB in advance or 250 at the gate (or less if you wanted to risk buying from a local “yellow cow” or scalper) you walked in and made your way past another set of stalls to the hillside where the stage was located. It was an impressive stage all right. Unfortunately, between the stage and the bulk of the audience was a fenced-off “VIP” area with seats reserved for those who didn’t want to get their hands dirtied partying with the great unwashed. A team of Beijing’s finest Bao’an policemen was arrayed along the inner side of the metal fence to keep the masses from jumping over. This was an accident just waiting to happen.

Well, I suppose you could say it was a fair compromise on the part of the festival organizers. Word has it that the man behind the pop festival, Jason Magnus, who runs a company called RockinChina, is engaged to the granddaughter of Deng Xiaoping, the man who carried China into the “opening and reforms” era. I cannot confirm this rumor but I’ve heard it enough times to feel comfortable blogging this bit of gossip. Hence the relative lack of resistance on the part of our wonderful police state to the very idea of a rock concert on their back yard. Yet the constant, nagging police presence made it very clear that this was a grudging concession on the part of the Beijing authorities.

The symbolic gist of the VIP setup was the Orwellian message: “All are equal, but some are more equal than others.” Especially if those some are China’s highest level party cadres or their scions.

energy.jpg

The physical and psychological rift between audience and performers that the VIP area created was challenged repeatedly by the more raucous members of the great unwashed. A crowd of young punks, both men and women, Chinese and foreign, gathered just behind the fence near center stage, sporting their mohawks and bearing their chests in defiance of the cage made just for them. When the more energetic bands came on, they moshed and crowd-surfed with great violent relish, occasionally sending a crowd-surfer over the fence, only to be repelled back by the hands of policemen. This happened repeatedly during the Public Enemy concert on Saturday night, and again during the Marky Ramone concert on Sunday afternoon. At one point, a young punk must have grabbed a policeman’s hat off his head, which the crowd then flung repeatedly in the air in a ritual taunting gesture reminiscent of a caged monkey in a zoo. Some people in the audience--foreigners mainly--even tried to talk with the police and get them on their side. At one point, Marky Ramone asked the audience to calm down so that they could hold the event again next year. How ironic: one of the members of the godfather family of New York-style punk speaking out against his youngest followers on behalf of the world’s biggest police state. But I see the point: in the world of rock in China, concessions are a necessity.

The only performer who overtly challenged this control-oriented setup was the lead singer and guitarist of the Japanese rock band Rize, who performed on the main stage on Saturday afternoon. At one point in their concert, he tore off his shirt, revealing a seriously cut body that Brad Pitt would envy and an impressive tattoo with the letters R.I.P. prominently splayed across his chest. At another point he leapt off the stage (quite a leap, it was a high stage) and while still strumming his guitar madly, he ran through the mostly-empty VIP area to the edge of the fence to commune with his fans. The crowd went wild. But after a few moments the police coaxed him back to the stage. This was the only major break-out moment in my recollection in which the performer attempted to connect physically with his main audience.
There were far too many performances to relate here in any detail, but I’ll recap some of the highlights. On Saturday, the New York Dolls gave a bravura performance. We skipped out for Brett Anderson but returned for P.E., who gave a great show. Sunday I got there bright and early with four Dartmouth students in tow. We caught the lineup of Beijing punk bands: Hedgehog, The Scoff, and Brain Failure. Hedgehog were up to their usual antics. The lead singer of the Scoff impressed me with his stage presence. Brain Failure had a sizeable crowd of fans who rocked and moshed to their ska-fueled hits. This was also the only band whose lyrics the crowd knew well enough to sing along to. The other two bands are pretty young, while Brain Failure is more established, so that might help explain it. But there’s something about their song “Coming Down to Beijing” that has that anthemesque quality to it. It just begs you to sing along.

Chinese_punks%20copy.jpg

Marky Ramone’s band played all the great Ramones hits, bringing us back to the pure energy and essence of rock-n-roll. Cui Jian, reputed godfather of Chinese rock, came on next and played a selection of old and new tunes, but to our general surprise, few of his classics. The Nine Inch Nails capped off the festival with a light-and-sound extravaganza unmatched by any other band. Lead singer Trent Reznor had an amazing stage presence and a voice to match. The lead guitarist jumped and pranced about the entire stage, handling his guitar like a ninja or a kung fu fighter. They played a long set of old and new tunes from nearly all of their albums. One of the highlights was a set that involved only computers and a backlit screen reminiscent of Kraftwerk’s Minimum-Maximum concert.

For some reason, Reznor’s performance and songs made me think of the Phantom of the Opera--a goulish fiend, half human, of great musical genius, hiding in the lower recesses of the stage--though of course Reznor’s tunes are much more explicit and up-front than Andrew Lloyd Weber’s lyrics. By that time of the night the audience was too jaded to mosh or crowd-surf. As Trent Reznor belted out such memorable lines as “I want to fuck you like an animal--you bring me closer to God” the audience just danced around, mesmerized by the astounding light show, and the police paraded on in ignorance of the lyrical import.

Holy ****!! Inflation in August came in at 6.5%, again with a focus on food and especially meats. It is weird that meat prices hasn't gone down at all and grew by an astounding 50%. The benign explanation is that pork prices took some time to leak to other meats. Another explanation is that central policies to control food prices totally failed, which means there will be more inflation in September and October. Here is the problem: At a time when the PBOC is trying to get depositors to leave their money in the banks instead of speculating in the stock market, real interest rates are turning negative (note, accumulated inflation rate is now 3.9%; 1 year termed deposits rates 3.6%--Hello Zhou Xiaochuan, remember those good ole days back in the early 90s?)

With my forthcoming book listed on amazon, I have to say I am more than a bit excited about the prospect of more inflation in China-- sick I know.


8月份全国居民消费价格同比上涨6.5%
http://www.sina.com.cn 2007年09月11日 10:02 国家统计局网站

　　国家统计局综合司

　　8月份，居民消费价格总水平同比上涨6.5%，其中城市价格上涨6.2%，农村价格上涨7.2%；食品价格上涨18.2%，非食品价格上涨0.9%；消费品价格上涨8.0%，服务项目价格上涨1.8%。从月环比看，居民消费价格总水平比上月上涨1.2%。

　　从八大类别看，8月份，食品类价格同比上涨18.2%。其中，粮食价格上涨6.4%，油脂价格上涨34.6%，肉禽及其制品价格上涨 49.0%，鲜蛋价格上涨23.6%，水产品价格上涨6.2%，鲜菜价格上涨22.5%，鲜果价格下降3.3%，调味品价格上涨4.4%。

　　烟酒及用品类价格同比上涨1.7%。其中，烟草价格上涨0.9%，酒类价格上涨3.4%。

　　衣着类价格同比下降0.9%，其中服装价格下降1.0%。

　　家庭设备用品及维修服务价格同比上涨1.7%。其中耐用消费品价格上涨1.1%，家庭服务及加工维修服务价格上涨7.5%。

　　医疗保健及个人用品类价格同比上涨2.3%。其中西
药价格下降0.6%，中药材及中成药价格上涨10.5%，医疗保健服务价格上涨2.3%。

　　交通和通信类价格同比下降1.3%。其中，交通工具价格下降2.2%，车用燃料及零配件价格下降1.4%，车辆使用及维修价格上涨1.7%，城市间交通费价格上涨3.0%，市区交通费价格上涨0.5%；通信工具价格下降18.4%。

　　娱乐教育文化用品及服务类价格下降1.1%。其中，学杂托幼费价格下降0.7%，教材及参考书价格下降1.0%，文娱费价格上涨3.1%，旅游价格上涨2.6%，文娱用品价格下降0.5%。

　　居住类价格同比上涨4.3%。其中，水、电及燃料价格上涨2.7%，建房及
装修材料价格上涨4.8%，租
房价格上涨3.9%。

　　1-8月份累计，居民消费价格总水平同比上涨3.9%。

Well, the unofficial list of the China Investment Company management team has been unveiled. As expected, Lou Jiwei will serve as chairman. But in a bit of a surprise, former vice chairman of the CSRC and current executive vice director of the National Social Security Fund Gao Xiqing is to serve as CEO, while MOF vice minister Zhang Hongli and Xie Ping, currently CEO of Huijin, will serve as vice managers. Goldman Sachs veteran Fred Hu is slated as head of research, which is reasonable. One wonders whether Andy Xie, who is currently out on his own, will also play a part in the outfit.

This is almost a "dream team" line-up for the Investment Fund. However, it also deprives other parts of the Chinese government of some of its most capable technocrats and some of the most senior level "sea turtles," or officials who have studied overseas. Gao would have had a long shot at being the head of the CSRC in the fall, but he now will run China's national hedge fund instead. Meanwhile, Xie Ping seems set for an endless exile from the PBOC. One question this line-up raises is what will happen to Jesse Wang, whom many thought might be a candidate to serve as CEO of the fund. Will Jesse Wang instead be rotated back to the CSRC as a vice chairman (he was formerly assistant to the Chair), or the chairman? Or will he stay in Huijin? Another key question for our reporter friends out there to dig up: how much will these guys be paid?


中国投资公司高管名单初定
http://www.sina.com.cn 2007年09月06日 10:32 中国证券网

　　楼继伟、高西庆、张弘力、谢平、胡祖六……即将成立的中国投资有限公司（下称“中投公司”），管理层阵容可能纳入一批堪称豪华的名单。此外，据称还有一位央行高层将进入核心管理层。

　　这家掌握着2000亿美元巨额资金的公司，尽管仍未诞生，其每一笔投资已引来广泛关注。作为中投公司的第一笔投资，黑石集团从浮盈到浮亏，也再次引发了国内对外汇投资运作方式以及风险控制的争论。

　　现在，已初步确定财政部、 央行、社保基金理事会及国际知名投行人士将加盟中投公司。他们到底能为中投带来什么，中投将确立何种投资管理模式，引人关注。

　　高西庆的新使命

　　据知情人士透露，中投公司高管成员已经初步确定，楼继伟任董事长，社保基金理事会副理事长高西庆任总经理，央行一位现任行领导及
财政部副部长张弘力将任副总经理，谢平任副总经理同时兼任汇金公司总经理。而高盛公司的胡祖六有可能出任研究部总经理。几位高管分管职能也大体作出划分，正紧锣密鼓聘任各部门负责人，楼继伟与高西庆已与十数人“谈话”，力邀加盟。

　　不过，这尚未得到相关部门的确认。央行人士表示尚不知有高层调任一事，“还没有定”；财政部人士对张弘力的出任亦表示“不知道情况”。

　　楼继伟、高西庆、张弘力等作为中投公司筹备组成员，如果担任中投公司高级管理职务，当在市场预料之中。

　　“这是一个非常棒的组合。”广东金融学院教授陆磊认为，中投公司高管汇集了原财政部和央行的专业人士，各有所长，且互为补充。高西庆熟悉国外金融法规，擅长投行合同处理，又是中国
证券市场的发轫者之一。而胡祖六具备英美投行背景，不仅熟悉资本市场与并购，业内的人脉关系也极为深厚，长期担任高盛研究部高级职务，出任中投公司研究部总经理亦为极佳人选。

　　更重要的是，高西庆对于社保基金的投资运营管理已经多年。业内人士猜测，高此次赴中投公司任总经理，很有可能将社保基金投资运作模式移植于中投公司。

　　“睿智而不失书生意气”，海归派同仁谢思敏对高西庆的评价10年未变。而高所负责管理的社保基金，多年来也维持着不错的业绩。2001年社保基金投资运作以来至2004年，按资本加权计算，4年间累计收益率为11.82％，同期通货膨胀率为5.04％。而2006年全年，社保基金实现收益 9.34％；浮动盈利增加额423.99亿元，经营业绩619.79亿元，以此计算的经营收益率为29.01％。

　　不过，在成为2000亿美元的掌门人时，高是否仍能续写佳绩、波澜不惊？

　　中国社科院金融研究所研究员周茂清表示，由于中投公司核心业务是从事对国外的金融组合投资，它将来所要面对的竞争对手，是那些在国际金融市场呼风唤雨、历经磨练的机构投资者。“如果拘泥于传统的治理结构，后果很难预料。”他说，类似中投公司这样巨大的金融公司，最需要的是以科学的、市场化的管理模式来进行运营。

　　社保模式只宜在初期采用

　　无论如何，这次履新令高西庆担子沉重不少。中投公司将管理2000亿美元资金，社保基金2006年底的资产总额则不过2827亿元人民币。如果刨去境内、境外投资管理人运作的委托资产，直接投资管理资产1771亿元，占总量的63％。

　　当然，以管理资产总额多少来衡量投资运营压力显然有失客观。陆磊认为，中投公司在运营初期，在缺乏人才和经验的条件下，可以先以委托投资为主。而社保基金管理的最大特点也正在于此——通过招投标、对中标者的监督管理和淘汰约束，以此间接达到资产管理的目的。

　　2006年，社保基金选聘北美信托和花旗银行作为境外投资资产托管人，选聘联博、德盛安联等10家著名国际投资机构作为境外投资管理人。同年底，境外投资正式开始运营，主要投资品种包括香港
股票、全球股票（美国除外）、美国股票、全球债券、现金管理等5大类。

　　此外，全国社保基金还通过投资渤海产业基金10亿元扩大了实业投资范围。此前，社保基金曾以较小规模投资了中比产业基金。

　　不过，陆磊坚持认为，这种委托投资的运作方式最好只在中投公司成立初期采用，因为中投公司本身就是无国际经验可借鉴的。业界认为，中投公司从长远看更应借鉴新加坡的政府投资公司（GIC）的运作模式。

　　GIC是否可资借鉴

　　目前，GIC所管理的资产超过1000亿美元， 其投资遍及世界各地的2000多家公司。25年来，按美元计算，GIC实现年均收益率为9.5％，扣除通胀因素后的平均收益率为5.3％。

　　当然，GIC还因为其独特的运作模式而著名，韩国的KIC便可称为是GIC的成功“克隆”。

　　1981年5月，新加坡成立专门的政府投资公司（GIC），专司外汇储备的长期管理。与此同时，固定收入投资和外汇流动性管理保留在新加坡金融管理局（MAS）。根据新加坡法律，GIC属于“私人企业”，但为政府全资拥有。

　　这种产权设定意味着，主管部门可以不管GIC的具体经营，只管业绩，要求其年底不少于一定的回报等。“从GIC成立至今的实践看，这一操作模式总体上是成功的。”社科院一学者认为。

　　但他同时也表示，如果要借鉴GIC模式管理外汇储备，中投公司就必须在管理体制上要有所突破，完全按照专业化、市场化的运作模式，实行行之有效的公司治理结构和激励约束机制。而这一点正是“说易行难”。

　　清华大学金融系主任李稻葵称，由于中投公司可支配的外汇数额非常庞大，可能对世界经济造成一定影响；且中国的海外投资很容易受到政治的干扰；加之，中国的市场化程度，法律法规完善程度还远远不够。因此，借鉴包括GIC在内的国际经验，短期内看来并不可行。

　　同时，国内高级金融专业人才短缺，尤其是既有专业技能又能为政府接受并信任的专业人才奇缺，这又是中投公司无法借鉴国际经验的一个客观因素。李稻葵担心由于这些专业人才的短缺，很难保证投资能达到预期的目标，实现保值增值，以及实现国家战略的目标。

　　不过，陆磊却认为人才并不是问题。“在市场经济条件下，只要有良好的激励机制，完全可以吸引到需要的人才。”这也是陆磊建议中投公司在运营初期可以借鉴社保基金模式，即委托专业人士进行投资管理的一个原因。

Wow, another one falls from the MOF, this time the minister instead of the head of a department. Still, even though this is a corruption case, I don't think it was politically motivated so much. Jin obviously had some ties with Jiang and Jia Qinglin, but he is also seen as a capable helper of Wen Jiabao in recent years. He is probably in trouble due to overwhelming evidence provided by others already in custody.

Sacked Chinese finance minister Jin detained-paper

8 September 2007
05:44 GMT
Reuters News

BEIJING, Sept 8 (Reuters) - China's former finance minister Jin Renqing has been detained, Hong Kong's Ming Pao Daily News reported on Saturday, despite officially having been transferred to a post at a think tank.

Jin, 63, was a few years short of mandatory retirement from a ministerial post, when he was sacked last month and demoted to deputy director at the State Council Development Research Centre, a position with vice ministerial rank.

He has not shown up at his new post because he is "required to assist the investigations of relevant departments," the paper said, citing sources at the centre.

His name is not listed on the Centre's Web site.

Jin left the Finance Minister post for "personal reasons" a State Council Information Office spokeswoman said in August. The spokeswoman declined to comment on Saturday, asking for a fax.

The finance minister in China plays more of an administrative role managing the country's finances, rather than driving policy, which is usually set by leaders at the vice-premier level or higher.

Media speculated that Jin's departure was linked to a sex scandal or questionable dealing.

A person can be detained indefinitely in China to "assist" in investigations, during which time they generally have no contact with family members, lawyers or any other associates. The detention period often ends with a formal charge.

I typically avoid self congratulations, but someone was telling me that an article coauthored by me and my colleagues Liu Mingxing at PKU and Zhang Qi at Northwestern is now the most downloaded paper on China Economic Review. Some of you may be interested in the paper. The paper is pretty atheoretical, but it's the first paper with some rigorous measurements of bank performance in different regions. Probably a lot of non-academics were downloading it.....

Comparing the performance of Chinese banks: A principal component approachstar, open

Victor SHIH, Corresponding Author Contact Information, Qi ZHANG and Mingxing LIU
Department of Political Science, Northwestern University, United States
The School of Government, Beijing University 03/2006, China

Available online 28 December 2006.

Abstract

Using previously unavailable central bank data, this paper first uses principal component analysis to derive four measures of a bank's ability to perform the core task of financial intermediation. This study then compares the performance of China's state banks, joint-stock banks, and city commercial banks along these measures. In terms of overall performance and in credit risk management, joint-stock banks perform significantly better than both the state banks and the city commercial banks. In China, unlike in other developing countries, the size of the bank is not correlated with their performance. Mid-size national joint-stock banks perform considerably better than the Big Four banks and smaller city commercial banks (CCBs). We further conduct regional and jurisdictional analysis of the CCBs, which indicates that a mix of geographical and historical legacies drives the substantial variation in CCB performance.

A really interesting article in Liaowang Zhoukan, an official publication of the Central Committee, describes the topic of a recent politburo study session: financial security. It is clear from the article that the central leadership is weary of "government agencies abusing national credit." The article argues that the current official NPL ratio is under-counting the actual NPLs hidden in the books. The article is not very clear, however, on how to fix the problems. I think they have done as much as they can without relinquishing control. The next step is to privatize and liberalize.

事关重大 金融再引高层关注
http://www.sina.com.cn 2007年09月03日 14:41 四川新闻网-成都日报

　　四川新闻网-成都日报讯：8月28日，中共中央总书记胡锦涛主持了中共中央政治局第四十三次集体学习。

　　这次集体学习安排的内容是世界金融形势和深化我国金融体制改革，国务院发展研究中心巴曙松研究员、中国银监会李伏安高级经济师进行了讲解。这是继年初全国金融工作会议之后，高层将视角再次聚焦于金融领域。

　　胡锦涛在主持学习时强调，要充分认识做好金融工作的重要性和紧迫性，深入研究金融领域的新情况新问题，加快推进金融改革，切实保障金融安全，全面做好金融工作，增强金融业综合实力、竞争力和抗风险能力，推动金融业持续健康发展。

　　对于这个判断，中国现代国际关系研究院经济安全研究中心主任江涌在接受记者采访时深有感触：“当前，中国经济改革、对外开放与社会转型已进入关键期，国内经济社会矛盾也聚焦于金融领域。虽然我国金融体制改革取得了不俗的成绩，但在国际金融环境日趋复杂、我国金融机构竞争力仍然不强的现实下，中国金融业依然是制约中国经济增长、社会和谐、国家崛起的主要风险因素，依然是中国经济安全的薄弱环节。”

　　因此，在这个背景下，中央领导集体学习和关注世界金融形势与深化我国金融体制改革，表明决策层已经清醒认识到：金融已越来越成为一国经济发展与经济安全的重大问题。

　　在这个时间点，高层之所以关注金融安全和我国金融体制改革，在于国际金融形势正在发生明显而深刻的变化，我国金融体系面临的风险环境前所未有。

　　目前，全球经济和金融市场总体发展状态良好，但这不能掩盖国际金融体系依然存在诸多风险因素，国际金融安全新挑战众多。

　　特别是近期爆发的美国次级贷危机对全球金融市场形成了巨大冲击。尽管通过欧美央行巨额注资等操作，当前的情况也只是恢复到一种微妙的“尚不稳定的平静状态”，下一步走势还需观察。

　　关键词：体制性弊端

　　一些政府部门滥用国家信用

　　“中央高度关注世界金融发展的趋势和特征，更重要的原因在于我国金融业发展的现状和伴随的问题。”江涌告诉记者。权威判断指出，目前我国金融业抗风险能力有了明显提高，金融体系不存在明显的系统性风险，在当前较高外汇储备和
人民币升值市场环境下，我国发生债务危机和货币危机的可能性不大。但是，经济运行中的深层次问题和体制性、结构性矛盾，以及金融机构自身控制风险能力不足，公司治理机制建设不到位，企业和社会整体信用水平低，始终是我国金融安全运行的长期隐患。

　　江涌认为，银行风险依旧是金融安全的重心。其一，实际不良贷款仍然需要警惕。据银监会公布，目前国有商业银行五级分类不良贷款率已降到约8%。但是，若剔除财务重组和政策性剥离等因素，同期实际不良贷款余额与比率难以乐观。而且，不良贷款比率的降低主要通过“扩大分母”(即多贷款)所致，且多半为中长期贷款，其中一些风险(如千亿计的高校扩张贷款)正在显形化。

　　其二，操作风险突出。近年来，国有银行大要案此起彼伏，上到总行行长下到电脑操作员，涉案金额动辄数百万乃至数亿，暴露出因金融违规、金融腐败、监管滞后而导致操作风险的防控存在严重缺陷。

　　其三，金融市场与社会风险不断向银行风险转化。新一轮股市与房地产形成的许多资产泡沫与银行资金关系密切。一旦股市与房地产泡沫持续遭遇重挫，银行不良贷款将迅速增加，极有可能形成与上世纪90年代日本一样的银行危机。

　　同时，复合性金融风险不同程度地积聚。一是“外在风险内部化”。比如，国际游资为投机人民币升值，通过多种渠道入境，加剧股市与房地产市场泡沫，这不仅增加银行坏账与汇率等风险，而且直接威胁金融体系的稳定。二是“内在风险外部化”。一些“走出去”的中资企业由于鞭长莫及与内控不力，原先潜伏的金融风险迅速暴露。比如“中航油”事件。

　　而且，金融“道德风险”突出。

　　在江涌看来，最为严重的“道德风险”是一些政府部门对国家信用的滥用。银行坏账冲消、金融集团倒闭、证券公司破产、中央与地方政府债务、社会保障基金、股市泡沫消除等等最后都集中到国家。

　　为此，他强调，“国有银行没有发生系统性危机的根本原因在于国家信用，即储户对国有银行国家所有的信任。但是，国家信用是有限的。政府部门大包统揽，无限‘兜底’，这容易造成严重的‘道德风险’，还可能导致国家信用资源加速流失。长此以往，很难避免信任危机。”

　　关键词：金融安全

　　高度关注当前国内三大问题

　　面对国内金融业现状，在高层专家看来，当前，影响我国金融安全需要高度关注的问题主要集中在三方面：

　　流动性过剩带来的影响。一是对房地产市场的影响。近年来，城市化进程的加快，过剩的资金为投资获利大量进入房地产，加速价格上涨。特别是外资也大量进入，甚至在部分热点城市成为推动
房价上涨的主因之一。

　　二是对股市的冲击。上证综指从2005年年底的1000点左右已经涨到目前的5100点以上，而过剩的资金流动性加大了股市的估值泡沫。其中境外资金在A股市场的投机，已经形成了现实威胁。

　　三是对货币政策有效性的影响。专家指出，我国目前资本项下的资金流入已经大于贸易项下的流入。由于热钱并不通过金融银行体系循环，而是更多直接进入资产领域，不在货币政策直接调控范围之内。

　　金融机构自身在体制上还存在不少缺陷。比如公司治理仍然薄弱。董事会“一言堂”等问题仍存在，股东大会、董事会、监事会和管理层间尚未形成有效监督制衡机制，高管人员重大失职未能严格问责。

　　同时，产生不良资产的机制尚未根除。尽管目前不良资产率较低，但商业银行防止新增不良资产的机制还没有完全建立起来。而且，我国金融企业经营模式雷同，同质化、低水平竞争普遍，缺少新利润增长点，同时资产规模不断扩大，抗风险能力下降。一旦经济增长有所放缓，就会形成新一轮不良资产。

　　再者，风险控制和金融创新能力较弱。一些金融机构改制还存在改上不改下的问题，分支机构改革明显滞后于总部，使得基层机构违法违规现象严重。同时，风险管理信息系统不健全，还不能实现全程监控和及时暴露、报告和控制各类风险。

　　而用人机制还不能适应激烈的市场竞争。“官本位”思想依然存在，经营责任不清，尚未建立择优任用、优胜劣汰等用人制度。

　　金融运行环境对金融安全还存在较大制约。其一，部分行业产能过剩，粗放经营以及税收政策对金融运行环境带来的影响。一些部门和地方政府科学发展观落实不到位，导致部门和地方有扩大投资冲动，大量低水平、技术落后的投资和重复建设又会形成新的风险。

　　其二，金融机构退出及维护金融稳定的相关法规欠缺。在金融安全保障机制建设方面，银证保都存在着重要法律基础缺失问题。越来越多的中外资机构入股或控制我国金融机构，引发垄断和利益冲突等问题，却没有针对性的法规加以规范，目前一事一议的处理方式不能整体上保障金融安全问题。外汇管理方面在控制热钱和其他资本流入方面，不能发挥有效作用。

　　其三，监管有效性和综合监管能力不足。目前我国对跨行业、跨市场的风险，监管政策和监管实践都缺乏充分协调，对问题机构还不能实施有效的联合监管和检查，缺乏总体的金融风险处理制度。特别是针对外资金融机构进来和中资机构出去的跨境监管，力度不足难以有效防范金融风险跨境转移。

　　关键词：深化改革

　　特别要防止股市非理性暴跌

　　权威人士指出，中国是一个大国，一旦发生大的市场波动或金融危机，很难指望国际组织提供及时有效援助。能否独立自主地有效应对和妥当处理危机将是对我国金融业自身实力和监管机构实际管控能力的真正考验。因此，加快深化金融体制改革，建立主动的金融安全战略观是目前解决问题的关键。

　　加快建设协调高效的金融安全评估、危机管理和应急处理机制。面对挑战，任何单一部门和单一政策都难以发挥整体作用。此次美次级贷危机显示，发生危机时，市场出现非理性惶恐，必然需要政府干预。因此，国家需要打破部门利益的顾虑和行政权力的约束，形成战略优化、目标清晰、操作性强的政策“组合拳”。目前，特别要防止
股票市场在非理性上涨后随时可能出现的非理性暴跌和大幅异常波动。

　　积极实施和推进金融创新战略。创新是我国金融业生存发展的迫切需要，是维护我国屹立于世界金融之林和持续发展的重要保障。有关部门需要以创新为思维，制定以我为主的金融创新战略和整体操作方案，解决经济社会运行中的现实问题；各类金融机构也要结合我国实际，以客户为中心，以市场为导向，采用新方法、开辟新市场。构建新组织，开发新产品。

　　加强对资本流动的监控。加大力度防止违法违规资金流入股市房市，密切监测境外资金通过非法途径进入这两个市场，特别是要加强人民币资金的反洗钱检查。督促银行把好资金关，控制股市风险向银行体系传导。严密监控国际资本流动，降低对我国金融稳定的负面影响。把好汇率和资本账户的关口，稳步推进汇率制度改革和资本账户开放。

　　提高金融机构综合竞争能力和抗风险能力。加快对高风险金融机构的风险处置，和市场退出机制建设。建立健全公司治理机制，提高风险控制能力，在风险可控的基础上激发金融机构创新精神。

　　正确把握金融对外开放。金融业对外开放政策的核心是，“以我为主、循序渐进、安全可控、竞争合作、互利共赢。”在坚持开放的同时，也要注意到开放不当、管控不好可能对我国金融安全的威胁。国际经验显示，曾经影响金融安全的主要问题大都来自于资本项下过早过快的开放。因此，必须坚持我国政府一贯持之的审慎开放政策。

　　继续加强监管能力。在目前分业监管前提下，健全银证保监管的协调机制，特别是对交叉业务、创新业务和跨行业风险的监管，防止出现风险的系统转移和监管真空。加强金融法制建设，使法律法规覆盖到金融监管各个方面。建立有效的风险预警机制和应急预案，和针对中低收入者的保护及救助机制。

　　据瞭望新闻周刊