Non-performing Assets

Caixin Weekly Issue No. 1， 2017

Loans taken by private enterprises can be transformed into seemingly reliable securities through the shadow banking system. The process is： get a recommendation from a local financial assets exchange， or approval from a registered online financial company. Then go through a series of credit checks， assessment by insurance companies， and get a letter of guarantee from a commercial bank. Also， have your sponsor list your personal property as collateral. However， when the system fails， people discover that these processes are nothing but a game.

According to the supervision regulations on internet finance implemented by Chinas Central Bank in 2016， investigations will be carried out on online trans-boundary assets management， including online sales of financial products that have been privately enlisted offline by a small group of accredited investors to unspecified customers， or sales to large numbers of specified customers which exceed prescribed limits. Businesses with different stakeholders and nonspecific responsibilities are especially subject to increased controls by provincial branch offices of the Peoples Bank of China， together with local financial authorities， including banking， security， and insurance regulatory departments.

On the one hand， the current bank system cannot accommodate undeclared assets. They consequently urgently need to be hidden. On the other hand， the Chinese people require assets management to achieve wealth appreciation. Various financial organizations are attempting to find a way to meet the needs of both sides. However， the questions of how accurate risk assessments for customers can be made， how unified standards for accredited investors can be established， how appropriate products can be sold to suitable investors， and how a balance can be found between financial risk and reward， are yet to be resolved.

The Archaeology of the Future

Sanlian Life Weekly Issue No. 1， 2017

People have always lived in hope. Originally placing their hopes in religion or reincarnation， they unconsciously shifted their focus to the future as if it were a new sort of religion. Being convinced of a better tomorrow makes the present seem just that much better.

After the industrial revolution of the 19th century， people started to abandon their old superstitions and readily embrace the concept of a futuristic world. New technology adds to the trend， encouraging an obsession with studying the future. A decade ago， nobody could possibly have imagined just how much artificial intelligence （AI） and the Internet would figure in every aspect of daily life. The thought of a future of unlimited possibilities is a comfort to those who are dissatisfied with reality.

A future where everyone is happy， healthy， and wealthy does not seem all that far off； but people seem unwilling to acknowledge that the shadow of the future， with its relentless march of technological progress， may hold even greater dangers.

Being concerned about the future or even having the capacity to be aware of the future is an ability unique to sentient creatures of advanced intelligence. But we need to realize that the future is inextricably linked with the present. We need to take an objective view of humanitys current situation， as well as looking to the future.

Another Global Industrialization Competition

China Economic Weekly Issue No. 1， 2017

The growth of industry started with the Industrial Revolution and expanded continuously until the 1970s. During that time there were two successive World Wars， from which European industry sustained immense damage.

After the collapse of the Bretton Woods System in the 1970s， a new era of financial capitalism was ushered in. What characterized this new system and by what means has it developed？ The answer can be summarized under five points： globalization， marketization， privatization， liberalization， and securitization.

Globalization demands that all nations open their doors to allow capital to flow freely， especially financial and industrial capital.

2008 saw the end of an age of financial capitalism. Due to constant short-term investments and ever increasing leverage， the real economy all but disappeared. This made the whole world ponder seriously whether a nation can function properly without a real economy. What， then， to change and reform？ It is pretty clear that reindustrialization is the way out.

To revive the real economy and push for continued industrialization is the wisest choice for China. Financial capital can only speculate， whereas industrial capital creates real wealth. There can be no compromise.

War on Pollution Reaches Crisis Point

Caijing Issue No. 33， 2016

On December 16， 2016， a massive cloud of smog enveloped the city of Beijing.

The smog crawled southwards over China， making everything look like a black-and-white photograph. On December 16， the smog covered 160，000 sq km， the next day， 370，000 sq km， and by the third day 620，000 sq km， and at its height 1.88 million sq km.

The Chinese governments “War on Pollution” was launched in 2014， a year after toxic levels of pollution began to occur. These microscopic particulates （with a diameter of less than 2.5 microns） have caused massive problems， prompting the government to pledge special efforts to tackle them. It has invested large amounts in finding the source of the pollution， upgrading industry， placing restrictions on vehicles， and prohibiting coal burning.

Unfortunately， environmental authorities alone do not have the power to change the structure of the energy supply-chain， which has long been dependent on the burning of coal.

Why， after all these years， have we consistently failed to control the use of coal？ The public is demanding a solution to this pollution – we cannot just sit and wait for the wind to blow.

China： Fifteen Years in the WTO

China Economic Weekly Issue No. 50， 2016

Becoming a member of the WTO was a milestone in Chinas reform and opening-up process. That was 15 years ago.

In the interim， Chinas total volume of imports and exports grew from around US $500 billion in 2001 to over US $4 trillion in 2015， with its share of the worlds trade volume increasing from 4 percent to over 13 percent. Since 2009， China has become the worlds largest export market and also the worlds second largest economy.

As of 2010， China has fulfilled all the commitments that it made a decade ago， including a revision of more than 2，300 laws and regulations； decreased tariffs， fully opening the sector of foreign trade operations， and further opening of service markets. The WTOs foundamental principles such as non-discrimination， transparency， and fair competition have been incorporated into Chinas new laws， regulations， and administration systems.

Some developed countries refused to grant China market economy status， deliberately going against the promise detailed in Article 15 of Chinas accession protocol. The WTOs non-discrimination principle calls for respect to be shown to all its member states， including China.