Saturday, September 29, 2007

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.

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


  【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。









  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。


  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”。










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Thursday, September 27, 2007

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.

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Tuesday, September 25, 2007

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.

Surely if Xi does make the PBSC it is likely, as the Reuters article suggests, that he would get a job such as first vice premier (i.e. replace Huang Ju) in Beijing? And that opens the next can of worms, who takes over Shanghai?
According to the Hong Kong Ming Pao, Han Zheng is now enough trusted by Hu for Han to formally get the party secretary job in Shanghai.
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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

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.


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)

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Monday, September 17, 2007

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.

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Saturday, September 15, 2007

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
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.

Sir, your analysis into China politics is really ingenious. No doubt, basically you are Chinese, understanding their mentality; and meanwhile you are acute in perceiving through layers of disguises. Expecting your more works.

your fan from China
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Friday, September 14, 2007

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.





  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)

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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!


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.


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.


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.

It's worth noting that most of the police at the place were actually sitting around in circles shooting the breeze outside of the audience area. So relaxed were they that a hipster kid and his foreign friend could jump the fence and walk right by them, if willing to endure some prickly bushes. Not that I would know. -Former NU student
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Monday, September 10, 2007

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.

http://www.sina.com.cn 2007年09月11日 10:02 国家统计局网站



  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%。









Hello Victor,
Great Blog and terrific explanation of statistics and your point of view.
The prices are year to year measures, which means that if there is a price spike in one month, it's going to affect the statistics for the next months.
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Sunday, September 09, 2007

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?

http://www.sina.com.cn 2007年09月06日 10:32 中国证券网



  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。







  “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%。










  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%。








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Saturday, September 08, 2007

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.

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Thursday, September 06, 2007

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.


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.

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Tuesday, September 04, 2007

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










































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