[Futurework] RE: [Ottawadissenters] Will China sell dollars?

[Cordell, Arthur: ECOM]

China Meeting on Market System Is Leaked on Web 6 April 2006 The Wall Street Journal A10 BEIJING -- Minutes of a closed, government-backed meeting about China's transition to a market economy have been leaked onto the Internet, offering a rare, inside look into the heated debate over the future direction of economic change. The China Society of Economic Reform, a think tank affiliated with the State Council, or cabinet, had invited more than three dozen academics, experts and government officials to the March 4 event to discuss the next step in China's transition to a market system. The aim was to solicit the frank views of participants behind closed doors for China's top leaders. But minutes of the meeting -- including hitherto-unknown details about the sale of stakes in China's big state-run commercial banks to foreign investors, as well as statistics reflecting rising public discontent -- have since surfaced on dozens of Chinese-language Web sites. One of the earliest postings appeared March 20 on a Web site critical of the move to a market economy, Huayue Forum. "We have no idea how the original minutes would get out and be posted onto the Internet," said a society official, who asked to be identified only by his surname, Hu. "This was supposed to be an internal meeting, and some of the words are improper for publication." Following the leak, the think tank published a cleaned-up version of the forum minutes, which it posted on the Internet last week. In an example of the difference between the two versions, the original minutes quoted a state bank-holding company executive as saying Citigroup Inc. had proclaimed one Chinese bank "a total mess." The sanitized version of the minutes has him quoting Citigroup as saying that the Chinese bank's "internal management is poor." Mr. Hu and several participants in the meeting confirmed that the original minutes posted online were accurate, though they included some transcription glitches. It remains unclear who leaked the minutes or for what purpose. The development is the latest twist in an increasingly fierce and public debate over China's transition to a market economy. A rising chorus of criticism about problems arising from the transition -- from an increasing wealth gap to rising corruption to the domination of some industries by foreign investors -- has put China at a critical crossroads in its 27-year-old restructuring program. While few expect a significant rollback of the increasingly market-driven economy, the debate already is affecting policy decisions. Some market-liberalization measures -- such as mergers and acquisitions -- have been scaled back or put on hold.According to the original forum minutes carried online, some participants used the event to defend China's overhauls. Xie Ping, head of China SAFE Investment Corp., or Central Huijin, a state-run company that oversees China's major banks, addressed widespread complaints that China has sold stakes in its banks too cheaply to foreign investors. He said Huijin agreed to sell a 9% stake in China Construction Bank to Bank of America Corp. and other strategic investors for 1.15 yuan (14 U.S. cents) per share -- or $3 billion -- after Citigroup had refused to pay more than one yuan a share, proclaiming the Chinese bank "a total mess." Mr. Xie rebutted concerns that selling Chinese bank stakes to foreigners would endanger China's financial security. He said the state would continue to hold a majority stake in China's four major commercial banks for "at least 10 years" and defined majority stake as at least 66% -- a definition that hadn't previously been made public. Li Shuguang, a vice dean at the China University of Politics and Law, revealed during the forum that the government received about 30 million petitions from people seeking redress for grievances in 2005, a figure that also hasn't been publicized. In comparison, he said, the total number of petitions received between 1979 and 1982 was 20,000. Some forum participants took the opportunity to call for greater democracy and other changes to the political system, which remains under authoritarian, Communist Party control. He Weifang, a professor with prestigious Peking University, told the forum: "We all have a goal, which we can't express for now. But we eventually will certainly step onto that path: for example, a multiparty system, press freedom, true democracy, real individual freedom." Critics of overhauls seized on the original minutes to write attacks on Internet sites against some forum participants who want China to continue market liberalization. One person, writing on the conservative Huayue Forum, questioned "whether this meeting is to carry reform through the hardest part, or to overturn the regime." Others applauded the meeting and the participants' candid comments. -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]On Behalf Of Ed Weick Sent: Thursday, April 6, 2006 3:07 PM To: [EMAIL PROTECTED] Subject: Re: [Ottawadissenters] Will China sell dollars? The US has worked itself into an unenviable position, a huge and growing fiscal debt, reliance on the Chinese to fund that debt by buying US Treasury Bills and reliance on the Chinese and others to produce goods that Americans no longer make.  The saving grace, at least for a time, may be that China is also not in an enviable position, needing stability as much as the Americans do.  From what one reads, it has huge rural/urban problems and much of its growth is essentially a replication of inefficient plants without any real increase in productivity.  It needs time to fix itself up as much as the Americans do.  If there is a difference is that the Chinese may recognize the situation they're in whereas the present US administration does not.   Ed ----- Original Message ----- From: Barry Randall To: [EMAIL PROTECTED] Sent: Wednesday, April 05, 2006 9:12 PM Subject: [Ottawadissenters] Will China sell dollars? The Chinese government has made its first major comment on its holdings of US dollars.  Are they serious about selling US dollars or is this just a negotiating tactic in advance of Hu Jintao’s visit to Washington next month?   Barry   YAHOO! GROUPS LINKS  Visit your group "Ottawadissenters" on the web.    To unsubscribe from this group, send an email to:  [EMAIL PROTECTED]    Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.

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