2. CONTENTS
KEEP CALM AND CARRY ON
CHINA US RELATIONS
in the year 2015
TIGERS
& FLIES
P5 DON’t WORRY ABOUT A SLOWDOWn
P17 MORE OF THE SAME
p23 will 2015 shed light on better flight tracking?
P24 BANNING is rarely the answer
P26 reshaping asia
p19 REGAINED CONFIDENCE
Guarded Optimism
p7 Forging New norms
p8 THE GLOBAL ECONOMIC DRIVING SEAT
p3
p16
p10
p20 HANDLING FUTURE CHALLENGES
p18 PLA GETS in on the trend
With constant talk of a hard-landing
for the Chinese economy, this issue of
BUSINESS & TRAVEL assesses the
Chinese government’s stance on the
topic, with suggestions that concerns
of such a slowdown have been over-ex-
aggerated. As well as examining
China’s economy and the concerns that
abound both domestically and inter-
nationally, this issue also looks at the
work of the central government as they
attempt to put their own house in
order, following the establishment
of an anti-corruption campaign by
President Xi Jinping last year. The
obvious question for many when
contemplating such a campaign
is whether the so-called tigers,
or top officials, will still remain
fair game as the “hunt” continues
into 2015. Alongside these topics,
BUSINESS & TRAVEL also presents
two extended interviews, with Cheng
Li of George Washington Univer-
sity and David Shambaugh of
the Brookings Institution,
on the state of China-US
relations in the new year.
Editor’s note
Editor-in-chief
Stuart Wiggin

3. 3

4. 4
EXAMINING CHINA’S ECONOMY
HEADING INTO 2015
4

5. 5
Don’t Worry about a
China Slowdown
By Zhao Yang
At the end of January, Premier Li
spoke at the Davos forum. One day
after China’s GDP came in at 7.4 per-
cent, Li assured the packed audience,
of international business and govern-
ment leaders, that China will avoid
a hard landing, continue its ongoing
reform and restructuring and ensure
a prolonged period of sustainable
future medium-to-fast growth.
Even before the release of the GDP num-
bers,anumberofWesternmedia outlets
and policy pundits were predicting a
China stall. Issues with the real estate
sector, local government debt, SOE
intransigence, shadow banking, over-ca-
pacity and a weak global economy
were cited as the factors which would
continue to push growth rates lower
in the future. But even amongst the
hardened doubters, there were signs of
dissension, with the Wall Street Journal
grudgingly indicating respect for Chi-
na’s handling of its economic affairs.
The 2014 results represented the
slowest growth in 24 years and the first
time the government has missed its
target on the downside. But Li was in
no way defensive, while acknowledg-
ing China’s 10-trillion-dollar econo-
my will continue to face downward
pressures in 2015, Li indicated that the
country will avoid systemic financial
risks and will improve its quality of
growth to ensure an “appropriate” pace
of expansion. The rise in urban and
rural employment numbers, rising real
income levels, moderate inflation, a
50 percent individual savings rate, a
5 percent decrease in energy per unit
of GDP, significant growth in China’s
tertiary industries/services and record
numbers of new businesses, added
meat to his assertions.
Li, in essence continued the line of
thought he voiced at the Summer
Davos in Tianjin, where he indicated
China’s actions are predicated on the
realisation that its economic growth
pattern wasn’t sustainable and that
to avoid the “Middle Income Trap”
China’s economic engine need-
ed to be restructured to be more
efficient and competitive.
Highlights of Li’s Davos Speech
“We will continue to pursue a pro-
active fiscal policy and a prudent
monetary policy,” Li said. “We will
step up anticipatory adjustment
and fine-tuning as well as targeted
macro-regulation, in order to stabi-
lise economic growth, upgrade its
structure and achieve better quality
and performance.”
Li is clear that China does not
regard the fiscal and monetary policy
tools Western governments are
limited to, as an effective means of
transforming its economy.
“For the Chinese economy to main-
tain medium-to-high speed growth
and achieve a medium-to-high level
of development,” Li said, “China
must properly use the hand of the
governmentandthehandofthemarket,
and give full scope to both the tradi-
tional and new engines of growth.”
This highlights a sharp contrast be-
tween China’s “Big Hand” (gov-
ernment) over the “Invisible Hand”
(market) approach, and Western
democratic/capitalist models, which
put the market on top and govern-
ment as a kind of enabling and
clean-up mechanism.
“To foster a new engine of growth,”
Li said, “we need to encourage mass
entrepreneurship and innovation,
and mobilize the wisdom and power
of the people.”
The word innovation was repeated
33 times during Li’s Summer Davos
speech and it continues to be central
to Li’s vision of a more prosper-
ous China. With 3 of the top 5 mobile
phone manufacturers and a host of
other technological innovators like
Alibaba and Tencent, there is a
new sense of confidence within and
outside about China’s future.
“To transform the traditional engine
of growth, we need to focus on in-
creasing the supply of public goods
and services, and strengthening the
weak link of the economy,” the
premier said.
This references the need to make Chi-
na’s SOEs, government and financial
sectors more efficient and responsive to
the needs and pressures of the market.
China, he added, “will continue
to promote trade and investment
liberalisation and facilitation, and
open up its service sector, central and
western regions as well as the capital
market wider to the outside world.”
This is a list of areas which China will
be opening up to more investment
internally and externally. The
Shanghai FTZ has been used as a
model and will be extended to Fujian,
Tianjin and Guangzhou. They repre-
sent the cutting edge of a new kind
of economic development platform
which will be extended inland once the
models have been proven.
“China will encourage its companies
to explore the international market,
and work for common development
with other countries through greater
openness towards each other,” Li said.
Premier Li is signalling strong support
for globalisation and indicating a de-
sire to work regionally and internation-
ally to create better trade mechanisms.
The New Silk Road, extension of trans-
portation infrastructure into Southeast
Asia, AIIB, and the BRICS Bank are
strong indicators of this desire which
is essential to China’s resource imports
and finished goods exports.
So, what can we expect from China,
the second largest economy in the
world, during 2015?
Some say the single biggest risk for
the economy is still the interlinked
and rising problems associated with
shadow banking, local government

6. 6
and corporate debts and a stagnant real
estate sector. But at about 54 percent
of China’s GDP, China’s debt is far
below most developed nations. The
key will be how local governments are
funded and regulated. This touches on
the real estate sector as well which is
badly in need of reform but because it
represents 25 percent of the economy it
must be handled carefully.
Continued increase in consumption
Consumption now accounts for 51.2
percent of GDP in China. Though it
is still considerably lower than the
70 percent average for developed
countries, it continues to move in a
positive direction. The services sector
has now overtaken the industrial sector
as the largest segment of the Chinese
economy and seems to be follow-
ing the government’s playbook to
re-balance the economy.
China is developing more confidence
in its ability to innovate and lead
cutting-edge FMCG markets and this
trend will continue further balancing
the public-investment and ex-
port-driven forces which drove
the economy in the past.
China has also taken some steps to
solve its overcapacity issues. A two
pronged approach which is shifting
heavy industrial capacity in areas
like transportation infrastructure to
projects in neighboring areas and the
world stage; for instance, the merging
of China’s major railroad companies
and the projects they will be doing in
the Mekong delta region. The second
prong is the identification and
closing of first and second genera-
tion industrial plants, which is how
China has been able to achieve a 5
percent efficiency increase in energy
use per unit of GDP.
In the financial sector expect more
pressure on the big banks to be more
SME focused in exchange for more
liberal controls of lending and deposit
rates. An example: the lifting of the de-
posit rate ceiling, the deposit insurance
draft plan being considered and the
new property registration system will
standardize the markets and provide
new financial product opportunities.
To make things more transparent the
government has adopted new bud-
getary laws, local government debt
regulations and encouraged state-
owned enterprises to adopt mixed
ownership structures.
It is clear though that fiscal and mon-
etary policy will be part of the sym-
phony not the main players. Premier
Li was clear that he opposed another
monetary stimulus to push growth
rates and instead would rely primar-
ily on structural reforms. A thought
which was expressed during the Davos
forum, by Zhou Xiaochuan, governor
of the People’s Bank of China, who
also expressed a willingness to sacrifice
growth for stability.
“If China’s economy slows down a bit,
but meanwhile is more sustainable for
the medium and long term, I think
that’s good news,” Zhou said.
China’s growth cannot be delinked
from the global context. As the main
driver of the world’s economy since the
US mortgage crisis meltdown, China
has taken on a new role. Just as im-
portantly, an expanding China needs
access to raw materials if it intends to
consume and export finished goods.
A resurgent US will help China, but a
stagnating EU will hurt it. These seem
to be the dominant trends which the
WTO started and which will carry on
for some years.
Premier Li said China will go full
speed ahead with liberalizing inter-
est rates, allowing markets to play a
greater role in setting prices,
and in forging trade agreements and
opening up its financial system.
“We will not be afraid of difficulties,
and we will continue to move along
the path of reform and restructuring,”
Li said. All of this, he suggested, was
not only in China’s interests but also
that of the global economy. Ultimately,
“China’s reform and development will
bring more opportunities for the world.”

7. 7
New economic norms estab-
lished in 2014 are chipping
away at China’s previous
growth framework.
Stuart Wiggin
Slower growth may have become a
new norm for the Chinese economy
in 2014, but strong resilience and
timely structural adjustments have
kept the economy buoyant. China’s
GDP, which grew by around 7.4
percent in 2014 still represents an
admirable rate of growth especially
when compared with other major
developing countries.
Healthy employment and sustained
income growth have turned consump-
tion into an ever stronger driver in
regards to overall economic growth.
But as China enters 2015, many feel
that a weak property market could
provide the government with a difficult
obstacle to overcome.
Banking reforms, especially, the rise of
privately-owned banks, have allowed
the market to play a more decisive role
in credit issuance, while the establish-
ment of more pilot free-trade zones
signifies greater liberalization afoot in
previously closely-guarded key sec-
tors. Internationally, China’s growing
economic strength is being felt like
never before. The inking of Free Trade
Agreements, for example most recently
between China and Australia, means
China is more open for business.
The internationalization of the Yuan,
the Chinese currency, has gained
greater momentum and more offshore
RMB trading centers were established
and currency swap deals signed with
China’s major trading partners. But
the Chinese economy is never without
its challenges and of those challenges,
overcapacity remains a prominent
issue. This was compounded by a rapid
cooling-off of the property market, a
main pillar of the economy. Further-
more, China’s growing local debt has
yet to be contained effectively.
Ultimately, a number of new norms
have been recognized in relation to the
Chinese economy, revolving main-
ly around the idea of a new normal
economic growth rate, down from
the highs of 10 percent growth which
China experienced in the past.
A slower speed of growth, around 7
percent, which is expected to be re-
vised downwards by half a percentage
point over the next five years; a more
balanced structural framework which
shifts towards consumption as a driver
for growth; and a fundamental shift
in the nature of growth, away from
polluting industries, represent the new
norms that many within the press and
academia speak of.
As mentioned above, China still
maintains a respectable rate of
GDP growth, causing many to
ask whether concerns of a Chinese
slowdown and the impending
so-called hard landing have been
over-exaggerated. On this point, Shen
Hong, the Shanghai Bureau Chief
of the Wall Street Journal ex-
plains, “It depends on how you look
at it. If you look at what matters to
China, then maybe the concerns
are a little bit overrated.”
Shen added, “The evidence is that
the labor market remains pretty
healthy… That’s why I think the
leadership in general has taken a
pretty relaxed approach in handling
the situation.” But as Shen goes on
to explain, “If you’re an outsider,
a foreign country like Australia or
Brazil that depends increasingly
on exporting resources to a robust
economy like China, they will
become extremely worried if there
is even a slight slowdown in China’s
economic growth.”
Observers agree that the property
market remains a big risk for the
Chinese economy going into 2015. In
explaining the context of the Chi-
nese property market slump, Arthur
Kroeber, Head of research at Gavekal
Dragonomics and Editor of China
Economic Quarterly, points out, “In
eachofthelasttwoyears,Chinesecities
have completed somewhere around 11
or 12 million units of new housing.”
“We think that the underlying
demand for new housing in China
is probably no more than 10 million
units, and over the next several years
it will probably decline even further
to around 9 million units a year,
which is still a lot and you need a
lot of construction activity. But the
point is that more housing has been
built in the last couple of years than
the market can absorb.”
Clearly, talk of such figures is
bound to make for grim reading for
the central government, but local
governments in second, third and
fourth tier cities are likely to be most
anxious of a deteriorating property
market. As Shen Hong of the Wall
Street Journal explains, the situation
of the market in cities like Beijing
and Shanghai is drastically differ-
ent compared to second, third and
fourth tier cities with huge over-ca-
pacity and over-supply.
“Ifyoulookatwhat
matters to China,
then maybe the
concerns (of a hard
landing)are a little
bit overrated”
Shen Hong, Shanghai Bureau Chief
Wall Street Journal

8. 8
TheGlobalEconomic
Driving Seat
Zhao Yang
As we forge ahead into 2015, the
question is what is going to happen
to the world’s economy?
The consensus of international
economic commentators is that it
will be “not bad”. So what does that
mean and what should you be paying
attention to, as you look towards the
future. Putting things in context,
we are in a decade still struggling
with the fallout of the 2007 eco-
nomic meltdown, increasing wealth
disparity, growing unemployment,
rising nationalism, waxing geopolit-
ical competition, unstable govern-
ments, ineffective leadership, severe
pollution, water crises, increasing
severity of weather disasters, ageing
populations in developed countries,
rampant population growth in un-
developed countries and conflicting
ideologically based world views.
Against this backdrop, 2015 will in
part be shaped by these larger issues,
but more immediately by the polit-
ical events in the Ukraine, Middle
East and Africa, and economically
on the effects of lower energy and
commodity prices, and the various
quantitative easing programs in the
US, EU and Japan.
The two biggest positive economic
drivers will be the US and
China. As the US econ-
omy heats up, China
“normalises”, the
EU drifts, Russia
suffers,
Afghanistan, the Middle East
and North Africa unravel and
Abenomics rules Japan, the world’s
number one and two economies will
need to be the world’s engine.
The IMF predicts a 3.8% world
growth rate for 2015, up from 3.3%
last year; an optimistic projection,
which is largely negative on
growth in the EU, Russia and
Japan. If it comes true it would be
the fastest growth since 2011.
So what are the major economic
and political issues to watch in 2015?
Oil and commodity price declines
will provide a positive boot for
consumers in developed countries,
which rely on imported energy
and materials, but will put more
pressure on energy and resource
dependant exporters, many of
whom are already on politically
unstable ground. The extra money
in consumer pockets will help with
consumer purchases, which should
help lower cost exports from China
and other developing nations.
Quantitative easing - As the US con-
tinues to unwind is fiscal stimulus
efforts, and as the EU and Japan
embark on another round to try to
stimulate their flagging economies,
questions remain about when and
how Janet Yellin and the Federal
Reserve will hike inter-
est rates. We believe
the answer will come at
“We’re going to see a divergence
between these two groups of cities
in the future when it comes to the
state of the property market. In other
words, demand for property in Beijing,
Shanghai, Guangzhou and Shenzhen
will remain pretty healthy, because it
attracts not just local investors but also
global investors.”
“But if you look at a city like Chang-
zhou, or a very small city in Sichuan
province, you’ll have to think twice
about it. But in general it’s inevitable
for the Chinese property market as a
whole to undergo some sort of correc-
tion after years of robust growth be-
cause it’s certainly overheated. I think
the trick is how to manage a so-called
soft landing. If there’s a soft landing for
the Chinese property market, there’s a
soft landing for the Chinese economy.”
Measures used to stimulate the market
in 2014, such as the wholesale lifting
of property purchase restrictions in
all cities, alongside a slight easing up
on credit, led to improved activity
and confidence within the market for
several months, only to tail off towards
the end of the year.
However, the options that the govern-
ment pursued to support the market
in 2014 will not be available for 2015.
According to Arthur Kroeber of China
Economic Quarterly, the only option
available to the government going
forward is to loosen credit.
However, Kroeber believes authori-
ties will be reluctant to pursue such a
course too strongly as pumping credit
into the market could lead to bubbles.
Furthermore, loosening credit and tak-
ing further steps in quantitative easing
could make it difficult for the country
to rebalance its economy and reduce
industrial overcapacity in areas such as
shipping and steel.
As Shen Hong notes, “you can-
not make funding costs too cheap
otherwise it will encourage (the)
use of cheap credit to commit to
inefficient investments.”

9. 9
the June Fed meeting. The danger to
the world economy is that a resurgent
US economy, geo-political uncertainty
and actions by the Fed will reverse hot
money flows which had been support-
ing investment led growth in underde-
veloped and developing countries. On
a macro level, the question is what, if
anything, can/will China do to protect
and stabilise its neighbours in Asia.
On a micro level, China should be
largely insulated by its booming
domestic markets, reserves and safe
haven status. Questions remain about
the impact of the EU’s and Japan’s
quantitative easing programs, both
domestically and internationally. We
doubt that there will be much if any
effect, as the issue is not the availabil-
ity of money; it’s on the demand side
which has to do with falling wages and
viable loan applications.
Ukraine will continue to be a sore
spot between Russia and the US, but
an economically fragile EU may be a
reluctant ongoing sanctions partner,
as the realities of low growth contin-
ue to push populist dissatisfaction.
It will continue the game of musical
economic chairs, as Russia is forced to
adjust its import and exports markets
eastward, as EU companies seek to
replace lost markets. The decline
in energy and resources is the most
serious threat to Russia. All of these
factors will continue Russia’s move
towards China as much out of political
as economic necessity.
With a fresh electoral victory Shinzo
Abe will continue to implement Aben-
omics in Japan. The question is will it
work; so far it has produced little other
than temporary stock market gains.
Japan should be a net gainer as energy
and resource prices go down, but will it
be enough to get the reluctant Japanese
industrial combines to invest in Japan?
After engaging in the same give-away
politics, he criticised previous govern-
ments for, to get reelected, Abe is look-
ing to impose a sales tax increase to
solve Japan’s massive debts and chronic
deficits. The difficulty is the first round
of sales tax increases had the same
negative effect on spending as it did
when it was tried previously in 1997.
Why a second round of tax increases
would succeed, where the others failed,
has not been addressed.
TheEUwillcontinuetostrugglewithits lack
of fiscal union and increasing political
dissatisfaction.Individually,EU member
countries will continue to strugglewith
thehighcostsoftheirsocial welfare net,
rising right wing factions and stagnant
economies. Great Britain, although
looking better in the short run, hasalong
termpropertyassetbubbleissue.
India will continue to be on hold
economically until 2016. This is the
minimum amount of time Modi needs
to consolidate his party’s power in
the upper house (short of a political
alliance) in orders to pass his sweeping
economic proposals.
Afghanistan, the Middle East and
North Africa will continue to be a
source of political, economic and social
instability, exacerbated by terrorism,
unemployment, wars, refugees, water/
food crises and the decline in energy
and resource revenues.
For China, 2015 will be an important
year in its ongoing economic reform
and restructuring. To avoid the “mid-
dle income trap” China must become
more efficient and competitive. As
wages and the cost of doing business
go up in China, the point where cheap
labor can counterbalance the inefficient
use of resources is fast disappearing.
China must climb the value chain or
watch the economic miracle come to a
halt. Balancing an investment led
export driven economy with con-
sumption, services and innova-
tion is a difficult undertaking.
As part of the efforts, China is follow-
ing a new political economic model
which reverses the Western concept
of market on top, government below
and instead puts social values and
goals on top and uses the market as
an efficiency tool.
China is currently benefitting from
the political and economic winds and
together, its economic, political and
social reform measures are taking
hold. For those who want to under-
stand in detail China’s road map,
they should read Xi Jinping’s The
Governance of China.
For China the tasks will be in the
details, as its seeks to stimulate SME
driven innovation and efficiency,
which has produced three out of five of
the top cell phone makers, while still
retaining the market heft of SOE’s who
can compete domestically and inter-
nationally in areas like energy and the
high-speed train market.
The good news is that despite rum-
bling sources of potential trouble,
there is a decent chance that 2015
will be another year of reha-
bilitation so long as the US and Chi-
na can act as the engine for the world’s
lagging economy.
Photo: CFP
9

10. 1010

11. 11
China US Relations: 2015
Despite refocusing diplomatic
attention towards its own back-
yard, it can be argued that Chi-
na’s most important diplomatic
relationship lies with the United
States of America; a point con-
firmed by the number of column
inches this magazine devotes to
the subject across issues.
But as we continue to progress
through 2015, where are China-US
relations heading and how are they
likely to influence world affairs in
this increasingly uni-polar world?
In an effort to delve deeper into the
topic of China-US relations for the
coming year, BUSINESS & TRAVEL
presents two interviews with US-
based scholars Cheng Li, Director
and Senior Fellow at the John
L. Thornton China Center of the
Brookings Institution, and David
Shambaugh, Professor of Political
Science and International Affairs at
the George Washington University.
Cheng Li, Director and
Senior Fellow at the John L.
Thornton China Center, The
BrookingsInstitutionintheUS
How different are China-US relations
now compared to the early and mid-
1980s, the period during which you
first started to study this topic?
It is quite different because the Cold
War was not over at that time and
China was not perceived as a major
competitor. And China, which has
just (implemented) Deng Xiaoping’s
reform and opening-up policy I was
among the first group of Chinese
who benefited (from) the education
exchange. So, I experienced the
tremendous enthusiasm and in-
terest and friendship during my first
few years in United States. So that
was a good time.
What lessons and experiences have
both sides learned from the 35 years
of diplomatic relations?
I wish we could learn more lessons
from the mistakes, and I think the real
lesson is that sometimes, perception or
misperception dominates our think-
ing (thus) mutually reinforcing fears,
which could be quite dangerous. But
again this is what I’ve said; the real
problem is that we do not learn many
lessons from history. Ronald Reagan
visited the Soviet Union, I think in
the middle of the 1980s; then when he
came back, he had a press conference.
He told the American people that he
found that Russians smile, they laugh,
they cry, they are human beings.
But a journalist from the White House,
Helen Thomas, asked, “Mr. President,
suppose you visited the Soviet Union
in the 1960s or 1970s, you will prob-
ably find that Russian people smile,
they laugh, they cry. They are
human beings.” Then Ronald Reagan
said, “No, they have changed.” This tells
us about how mutually reinforced
fear dominates our thinking, and
we try to see others through eyes that
really did not exist.
In a blog article that you wrote for the
Brookings Institute, you noted that
while many in China presume that the
United States is not ready to accept
China’s rise, the surprising reality is
that majority of Americans believe that
China is already the world’s largest
economy; so how do you view the
current state of US-China economic
relations?
This actually is not only based on my
observation, but also based on a lot
of surveys; surveys that ask what do
you think, which country has the
largest economy, the No.1 economy?
Actually, most people in the United
States (believe that the answer is)
China. So, that reflects that kind
of view. Because it’s important.
Most Chinese people think that China’s
rise makes a lot of people in the United
States unhappy, which has some
truism, but on the other hand, I think
it’s largely wrong. Because if that’s
happening, it’s already reality, you
cannot change too much.
For most Americans, when they talk
about this dramatic rise and fall of
great powers, those intellectuals, and
middle class Americans, will say that
China’s rise actually reflects that they
are doing something right and we are
doing something wrong. So they will
try to criticize some of the things in
the United States.
For example, no saving, over-spend-
ing, self-indulgence, et cetera. So
again, those findings from surveys are
actually quite revealing. But in China,
people always perceive that the United
States wants to contain China to stop
(China’s) economic rise.
But the reality is I think the United
States and China are the two coun-
tries probably benefitting most from
economic globalization than any other

12. 12
countries in the world. Trade opening
and economic integration really bene-
fits the Chinese economy and also ben-
efits the United States which maintains
their leader (status) in the world.
After Xi Jinping came to office, China
initiated a number of new interna-
tional mechanisms, several of which
are considered to be competitors to
mechanisms that the US has already
led. The Free Trade Agreement of the
Asia Pacific (FTAAP) is considered to
be a competitor to the Trans-Pacific
Partnership and the BRICS develop-
ment bank and the Asia Infrastructure
Investment Bank (AIIB) are considered
ascompetitorstotheWorldBank.How do
you view the competition and tensions
between the two countries in terms of
the global world order and leadership?
First, you simply cannot foresee a world,
or international organizations, or inter-
national integration without the United
States, without China. Any effort to ex-
clude one of them is self-defeating and
self-deceiving. Secondly, in terms of
the AIIB, I think it’s also quite interest-
ing because the current international
institutions of the World Bank and the
Asian Development Bank (ADB) are
really not doing great because they’ve
become very bureaucratic, not effec-
tive, and not so much money is being
spent on infrastructure.
Now they are doing some good things
like poverty relief, or public health (ini-
tiatives), but in terms of infrastructure
development, you could ask a Chinese
village head, they will tell you - start
with building a road, then the village
can benefit. This is common sense.
But look at the World Bank and the
Asian Development Bank; they are
not doing too much on infrastructure.
Now China wants to establish the
AIIB. So what’s wrong with that? You
cannot do it, but you ask other people
not to do it. That stance, in my view, is
quite bizarre. So, I think that the Unit-
ed States needs to adjust to that reality.
But at the same time, I think that any
international institution should be
more inclusive rather than exclusive,
and should really serve the world.
Otherwise international integration,
international institutions really do not
serve that purpose and those kinds of
institutions actually are not in line with
what the world needs.
At this year’s APEC meeting, China
strongly promoted its plans for the
FTAAP. What does the future hold for
the FTAAP and the TPP in general in
the Asia area?
I think both the United States and
China and many other countries in
the world should really change their
perception. I think we should partici-
pate in similar or different internation-
al economic institutions but none of
these institutions should have the aim
to exclude others. Rather they should
be broad enough to include any part-
ner that can follow, and work in line
with other international institutions.
At the same time I think that the United
States and China should really take up
leadership roles to facilitate the global
economic integration rather than
get caught in a kind of trade war and
only try to pursue a narrow interest
via which only several countries can
benefit rather than the international
community at large.
Last year you wrote about China’s
rising middle class, an important,
growing force, and you stated that it
cannot be neglected from the process
of shaping China’s future political and
economic landscape. Do you think
this large bloc of people will have any
impact on US-China relations, and if
so, what impact are we likely to see?
China is a normal country; it’s like
many middle class countries such as
the United States, such as South Korea,
Japan, Germany. And these middle
class groups come with similar middle
class consumption (habits) which will
contribute to the global economy,
which contributes to China’s continu-
ing (growth) or the sustainability of
China’s economic growth.
The middle class also eventually
wants to (achieve) political demands
when you come to protect middle
class interests. So, I’m confident that
China’s middle class will gradually
contribute to China’s own political
development. So, my point is that the
middle class will contribute to China
in a profound way. Consumption,
environmental protection, food safety,
you name it; all these issues. They will
contribute to China’s urbanization, and
reduce economic disparity.
So it’s the race between economic
disparity and a more equal middle
class country. I think that if Chi-
na can expand its middle class, the
Chinese economy should be much
more healthy. So that will contribute
to China’s social-political development
as well, and also contribute to global
economic prosperity and also peace.
How do you define the US-China
relationship?
It’s a new type of international order.
So in a way the world is in the midst
of a major transformation. You do see
geopolitical, geo-economic change
and transformation. You see the rise
of the BRICS nations; you see the
rise of Asia; you see the rise of South
America. But at the same time there’s
a tremendous opportunity to have
international economic integration,
which benefits the entire world.
But you also see the tensions. You see
that some of the areas, (with regards
to) the most important economic
breakthroughs, will only benefit a small
amount of people rather than the large
number of people. Therefore, I think
the key word is governance.
It is global governance that will deal
with the common challenges. And
challenges could be to the environ-
ment, they could be cyber-security
related, they could be economic
disparity or public health crises. I
think it’s important to know in the 21st
century that we should get rid of the
19th century mindset of a Cold War
mentality. I think that’s crucial.
I think that the United States and
China for all reasons should work
together. You cannot see a kind of sce-

13. 13
nario where one country is doing very
well, and the other country is going
to experience disaster. Larry Summer
said that you can see both China and
the United States doing well or neither
country doing well. But one country
doing well and one country doing
badly is not a scenario we will see. So
that tells us that the United States and
China should cooperate with each
other in all aspects.
David Shambaugh, Professor of
Political Science and International
Affairs at the George Washington
University in the US.
In a previous commentary, you stated
that the US-China relationship has
exhibited both elements of cooperation
and competition. But the relationship
has lasted 35 years; so what lessons and
experiences have both sides learned
during this sustained period of time?
Well, I think both sides have learned
that it’s a very complex and compli-
cated marriage you might say, and it’s
a marriage in which divorce is not
an option. We have to work togeth-
er when we can and we have to
manage our differences.
And after 35 years, I think we have
learned pretty well to manage our differ-
ences, at least to keep them from becom-
ing more adversarial. We have learned
a few other issues, I would say. We have
learned how to manage the Taiwan issue.
At least the American side I think has
become adjusted to the sensitivity
of the Taiwan issue for China. We’ve
learned to work together in certain
limited areas of global governance and
I think we are learning that we can
share the Pacific Ocean; I’m not sure
though, there’s a lot of strategic compe-
tition in East Asia between not just the
United States and China but a number
of other countries and China as well.
Over the years we’ve learned each
other’s sensitivities and how to work
together I think in diplomatic ways.
We’ve also learned economic and
commerce and people-to-people
exchanges. We’ve worked really hard
to expand contacts between our two
societies on all levels. For example,
there are 300,000 Chinese students
in American universities.
There are increasing numbers of
Chinese tourists coming to the United
States, increasing numbers of busi-
nessmen and investment from China
into the United States, and all kinds of
interactions from mayors and governor
levels. So the people-to-people (aspect)
is really the foundation of the relation-
ship. That’s the strength of relationship.
A growing number of Chinese organi-
zations, agencies, big companies and
also the Confucius institutes are now
based in America. How would you
characterize their performance in the
United States?
There are [97] Confucius Institutes
[and 357 Confucius classrooms] in the
UnitedStatestodayandmypersonalview
isthattheyarequitegoodanddoing what
they should be doing, which is teaching
Chinese language and culture to Amer-
icans, particularly at the high school
secondary level, but also at universities.
But it has to be said that there’s perhaps
an overreaction in the American media
and several American universities have
now discontinued their contracts with
Hanban. So, Confucius Institutes have
actually become another kind of sensi-
tive issue in the relationship.
(With regards to) Chinese business in
America, (they) are quite frustrated,
I think. Trying to invest in the United
States, there are a number of laws and
regulations that they encounter in the
US that they don’t encounter in other
countriesandthey’rebeginningto learn to
navigate those laws in fact a little bit bet-
ter. And direct investment is increasing
quite rapidly in fact, in virtually every
state of the United States; and I expect
that’s going to go up now that the Chi-
nese side is learning a little bit about
the difficulties of doing business in the
United States.
What kind of contribution do you
think local employees are having on
Chinese agencies based in the United
States?
Well, look at how Chinese companies
operate overseas in the last two or
three years under the “Going Out”
policy, they’ve tended not to hire for-
eign nationals in their operation. (Hir-
ing foreign nationals) is a rather new
development and it’s a good develop-
ment. In fact, most levels of Chinese
multinational corporations find that
Human Resources, HR is the greatest
weakness of Chinese companies that
China operates abroad.
So this recent development (of) hiring
foreign nationals, I think it’s a good
step forward. It’s what all multi-
national companies do… China has
traditionally not done that but is
now beginning to and I think that’s
going to help their competitiveness
in the US and other countries.

14. 14
In a recent paper, with regards to
the meeting between Obama and Xi
Jinping in Beijing this November, you
noted that while the two sides did not
issue a lengthy joint statement detail-
ing the two sides’ respective positions
on dozens of national issues, this time
it was determined to be more modest
but practical in their aspirations and
achievements. Why do you think there
has been such a change?
Well, it’s pretty clear talking with of-
ficials in both governments, I’ve talked
with officials in the White House who
managed the American side of the
summit, and I’ve talked with Yang
Jiechi and others who managed the
Chinese side of the summit, and both
sides recognize that previous summits
have issued these long joint state-
ments with 60 or 70 different elements
to it. And the problem is that they
were overly aspirational and they
were not implemented.
So this time it was decided to pick 3
or 4 really key central issues in which
progress could be made; the climate
change agreement; the information
technology agreement, and the two
military confidence building agree-
ments. And those were agreed to by
both sides and they’re very positive
and tangible and achievable.
There are a number of other areas that
the two presidents talked about; 27
different areas in fact, and that ranges
from working together to combatting
the Ebola health pandemic in West
Africa to antipiracy operations in the
Gulf of Aden, and a variety of other
issues. So they discussed a lot, they
achieved a lot and we really need to
build on that momentum going for-
ward into the new year.
Since Xi Jinping came into office,
China has initiated a number of new
international mechanisms. Several of
these mechanisms are seen as being
competitive to the initiatives that the
US has already led. How do you view
the competition and tensions between
the two countries in terms of world
order and leadership?
Well there is a difference in the two
countries’ views about world order and
international institutions. The United
States very much believes in the liberal
institutions that have existed since
the Second World War. We’re seeing
China begin to set up its own insti-
tutions such as the BRICS Develop-
ment Bank and the Asian Infrastruc-
ture Investment Bank.
But I would also note the Shanghai
Cooperation Organization, the Forum
on China-Africa Cooperation, the
China-Arab Cooperation Forum, and a
number of others. And these are some-
what competitive with the post-war
liberal order that the United States has
been so central in creating. But I’m not
sure that they’re a bad thing.
I think that there’s a lot of room for
many levels, you might say, of global
governance and different architectures,
different institutions. There’s a lot of
development that needs to take place
in the world. The World Bank, the
Asian Development Bank and the
IMF can’t do it all.
Myself and a number of other Ameri-
cans and other observers don’t actually
see these new Chinese initiatives are
necessarily a bad thing, but comple-
mentary rather than competitive.
But they’ve not really been imple-
mented yet. They’ve been created and
funded and we’re going to have to
wait and see how they play out over
the next few years.
How would you define a good or
healthy US-China relationship?
I don’t think we should have any
illusions about the difficulties of the
US-China relationship and what we
disagree on. The United States and
China disagree on a whole lot of things
and we cannot just pretend that those
differences don’t exist.
What we have to do is try and manag-
ing those differences and keep them
from bleeding into a more full adver-
sarial relationship; becoming more
fully adversarial. That’s the first big
challenge; how to manage strategic
differences, trade differences, ideologi-
cal, cultural and soft power differences,
diplomatic differences, world order
differences, and to build on the areas of
cooperation that we do have in place.
I think, again we go back to the
people-people level, and all the in-
teractions between our two societies;
that’s the real foundation of the rela-
tionship. So, it’s a mixture, intrinsic to
the nature of rising powers, established
powers, the differences in our political
systems, our competing geo-economic
and even geo-strategic interests in
the western Pacific.
So that doesn’t mean we cannot
cooperate together very practically
in various areas in both countries’
interests. That’s what we’ve been
doing since President Nixon, Chair-
man Mao, and Zhou Enlai met in
Zhongnanhai in 1972.
But we’re into a new stage of relations
now and China’s the second leading
power in the world. China has its own
interests in Asia and in the world.
Those interests are not always congruent
with American interests and vice versa.
So it’s natural, it’s the new normal; we
should expect it. It’s not unusualthat
thesetwocountriesaregoing to clash.
What we really need to do is learn how
to manage those differences and to
really expand the zone of cooperation.
I think President Xi Jinping’s recent
speech to the Foreign Affairs Work
Conference, for example, is very
encouraging because he suggested that
China is going to have a more activist
foreign policy, activist diplomacy.
That’s good, that means that China
is going to contribute more to global
governance, he said, and that’s exact-
ly what the United States and the
European Union and many other
countries have been calling on China
to do for several years; to contribute
proportionally to its capabilities to
global governance. We have to give
back to the international system. And
I think that China’s leaders have now
begun to recognize this.

15. 15
Chinese Language and Culture College
picture dictionary
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Contains 210 frequently-
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Compiled according to the
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36, Wang Fu Jing St. Beijing, 100710, China
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Email: duanxiayun@cp.com.cn
CROSSING THE
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36, Wang Fu Jing St. Beijing, 100710, China
Tel: 86-10-65258899 ext.407
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www.theworldofchinese.com

16. 1616

17. 17
China’s Anti-Corruption Drive;
more of the same for 2015?
2014 saw an unprecedented crack-
down on corrupt officials, partly for
expediency and partly to meet the
desires of the public. In the coming
year, the Chinese government will
step up its anti-corruption drive, list-
ing a series of priorities at the start of
the year to signal their intentions.
The CPC’s Central Commission for
Discipline Inspection (CCDI), the
department tasked with tackling the
corruption problem, has vowed to
the general public that the fight
against corruption is more than simply
a “whirlwind campaign”.
In January 2015, the CCDI put forward
seven priorities for fighting corruption
in 2015, including tighter scrutiny of
senior officials and intensified efforts
to track down corrupt fugitives hiding
abroad. The major task, however, will
be the tightening up of the Party’s in-
ternal management and supervision via
a series of new rules and regulations. In
November 2012, shortly after becom-
ing leader of the Communist Party,
Xi Jinping stated that with corruption
becoming more rampant, “eventually
the Party and the country will fall. We
have to be vigilant.”
The anti-corruption campaign is
not only a sign of the vigilance that
President Xi called for back in 2012,
it is also a clear sign of President Xi’s
strength within government and pre-
sumably amongst the general public
who are keen to see corrupt officials
dealt with accordingly.
Professor Zhu Lijia with the Chinese
Academy of Governance believes the
CPC is moving to address the root
causes of corruption. “To root out cor-
ruption, an effective mechanism must
be established to control, manage
and supervise the power of officials,”
Zhu explained to CRI. “The Party has
done a great deal of work in creating
a strong sense of deterrence for
those who tend to be corrupt. What
we need next is a system under
which officials cannot and would not
abuse their power.”
Another key priority in this year’s fight
against corruption will be the target-
ing of major state-owned enterprises
(SOE), as more than 70 senior SOE of-
ficials were put under graft-related
investigation last year. Inspectors
will be sent to all major SOEs
while supervision will be
tightened across the board.
Professor Zhu says that this
represents a move in the
right direction.
“As most SOEs provide
basic public services such as
water, power, and gas, how
well they are managed will
directly affect people’s daily lives
as well as the public’s trust in the
government. Reining in the abuse of
power by SOE officials will be signifi-
cant in the fight against corruption.
We should focus more on the SOEs
in order to achieve greater results
in the fight.”
The targeting of SOEs as well as deal-
ing with so-called “tigers” and “flies”,
for example the expulsion last year of
Zhou Yongkang, the country’s former
security chief, from the CPC and this
year’s investigation of Ma Jian, Vice
Minister of State Security, provides a
clear signal that no one individual is
beyond the reach of the campaign, and
that includes physical distance.
The CCDI has vowed to strengthen in-
ternational cooperation in the hunt for
corrupt fugitives and asset recovery,
following the successful Fox Hunt
operation in 2014 which saw nearly
700 fugitives brought back to face jus-
tice. Last year, China’s fierce an-
ti-corruption campaign saw a num-
ber of high profile cases that shocked
the country, including former security
chief Zhou Yongkang, military leader
Xu Caihou and political advisor Ling
Jihua. Nearly 72 thousand officials
were punished for violations of the
eight-point anti-graft rules.
The nature of the corruption cas-
es being brought to light, revolving
mainly around sex and cash, is sure
to repulse many and the punishments
handed down to those individuals
caught up in such cases will no doubt
help bolster support for the campaign
and in turn increase the overall
satisfaction with Xi Jinping’s presidency.
Hopefully, the vigilance that President
Xi called for back in 2012 will not
waver going forward and the tigers
will still be fair game for investigation
alongside the flies.
17

18. 18
In January, 2015, the Chinese mil-
itary publicized a list of 16 senior
officers, corps level and above, who
wereputunderinvestigationforalleged
corruption in 2014. The move under-
lines the People’s Liberation Army’s
resolve to fight corruption in the mil-
itary, an area where abuse of power
has rarely come to light in the past.
The list included a number of names
that had been released before, includ-
ing former vice chairman of the Cen-
tral Military Commission Xu Caihou,
the most senior military leader to be
probed for corruption since 1949. But
cases involving three senior officers
were made public for the first time.
They included Liu Zheng, deputy head
of the PLA’s General Logistics De-
partment; Yu Daqing, deputy political
commissar of the Second Artillery
Force; and Fan Changmi, deputy
political commissar of the Lanzhou
Military Area Command. Liu Zheng
is not the first deputy head of the
PLA General Logistics Department
to come in the crosshairs of the
anti-corruption campaign.
Previously, Liu’s predecessor Gu
Junshan was charged with embezzle-
ment, bribery, misuse of state funds,
and abuse of power. At the time of
publishing the list, among the 16, one
had already been convicted and sen-
tenced to life imprisonment. For many
observers, the past year saw a major
cleanup of the armed forces as part of
the top leadership’s effort to ensure a
combat-ready military.
The most high-profile case that first
came to light was that of the afore-
mentioned Gu Junshan of the Logistics
Department. He is alleged to have ac-
cumulated goods and property worth
more than 600 million yuan, 98 million
US dollars. Following this high profile
takedown, the case of Xu Caihou went
on to shock the nation.
As one of the most powerful officials in
the PLA, Xu was found to have taken
advantage of his position to assist the
promotion of others and of accepting
huge bribes. President Xi Jinping,
Chairman of the Central Military
Commission, has on multiple occa-
sions stressed that the “bad influence”
left by such high-profile graft cases
must be fully eliminated within the
armed forces.
PLA Gets in on the Trend

19. 19
Regained Confidence,
Guarded Optimism
Lin Shaowen
2014 witnessed regained public confi-
dence in China thanks to the ongoing
anti-corruption drive launched by the
ruling Communist Party. People are
excited to see “fat cats” brought down
one after another, with some eventu-
ally put behind bars.
The official website of the Party’s
watchdog, the Central Disciplinary
Commission, is now the ninth most
popular online news source;
representing a rare case for a high-
ly-political outlet to be among the top
ten. The commission’s leader, Mr.
Wang Qishan, together with Presi-
dent Xi Jinping, enjoys a high public
approval rating in opinion polls.
Self-telling yet thought-provoking; an
in-depth look at the progress made
in the crack-down on corruption and
its remaining challenges would lead
to guarded optimism. Mr. Wang once
outlined a three-phase anti-graft goal
- namely that officials first dare not be
corrupt, then are unable to be corrupt
and finally have no intention to be
corrupt. This three-phase goal can be
simplified to the pithy slogan of “dare
not, cannot, will not.”
To me, those three goals may mean,
firstly, fighting corruption case-by-case
with high-profile, harsh measures;
secondly, preventing corruption via
systematic and institutional efforts,
including laws and regulations to con-
tain powers or power abuse as well
as privileges; and thirdly, cleaning
up the public service sector by
introducing people with moral integ-
rity into official positions.
To help achieve these goals, the Party
Central Committee, in its fourth
plenary session, issued a document
on achieving rule of law for China;
stressing that every decision
should be made on a legal basis and
that no one is above the law. This
represents a lofty mission and the
achievements made so far are indeed
encouraging, with some widely ap-
plauded as nice surprises.
The public once doubted the resolve
of the government to chase after real
big “tigers”; but they now see that even
former political and military leaders at
the highest level are not immune from
the anti-corruption drive.
Five rounds of disciplinary inspec-
tions carried out nationwide over the
past two years have brought down
dozens of officials at or above the
vice-ministerial level. Public accusa-
tions and online exposure of immoral
and unlawful behavior accompanied
by evidence are being answered more
quickly, and followed by swifter action.
Casual weekends are routinely a time
for big news of yet another case com-
ing under investigation.
There is also the added aspect of in-
ternational coordination with Interpol
and foreign governments, under the
“fox hunting” move to bring back fugi-
tives to face justice. China has signed
extradition treaties with 36 countries
and it has also entered deals, or is
teaming up with a number of countries
on information sharing. Hundreds of
fugitives have been brought back or
surrendered themselves to prosecutors.
There are also systematic efforts being
taken designed to deal with the root
causes of corruption; or in other words,
efforts to prevent corruption through
mechanism-building. Measures range
from regulations on inspections, which
cover overseas visits and use of public
funds; standards on office sizes, real
estate registration, use of official cars;
and even barring “naked officials”
(those whose family members are all
abroad) from taking up key positions.
The Party’s Central Organisational
Department also has rules on the
nomination, promotion and removal
of officials; no doubt representing a
long list beyond the limited number
of measures listed above. Still, the
effect may be limited in achieving Mr.
Wang’s three-phase goal.
Yes, there is now a clear strong signal
of zero-tolerance towards corruption
(approaching the “dare not” effect).
But prevention, in order to achieve the
“cannot” phase, is much more difficult.
To that end, the judicial system should
play a leading role; public scrutiny is
a must; media supervision must be a
more powerful leverage.
And there should be greater exposure
of official performance to achieve
government transparency under com-
prehensive institutional rules, as well as
laws and regulations.
The biggest challenge lies in achieving
the “will not” phase. It involves both
subjective and objective elements
- the mind and will to serve public
interests and moral integrity on the
part of the candidate, and then the
nomination, election, promotion,
demotion and removal of that person.
What’s more, people, especially those
who know the person well, must have
a greater say in his/her political life,
present and future.
That’s why I express guarded op-
timism when I talk of confidence
regained. For instance, I would not be
surprised at all to hear of yet another
case involving yet another fat cat, for
there is absolutely no mercy at all if
someone is caught breaking the law.
My initial reaction, then, apart from
excitement, would also be to
question who chose and promoted
that fat cat in the first place, and who
made the ultimate decision.
Illustration: Robert Wiggin

20. 20
Discussion related to methods of
governance for China has long
been a tradition amongst Chinese
intellectuals. But over the course
of the past decade, the study of
comparative government with a
focus on the Chinese system has
become a more popular topic for
politics students outside of China.
Questions such as where the source
of legitimacy lies for the Chinese
government, or what agents of po-
litical socialization are import-
ant in reinforcing proper conduct
and values are regular questions
being asked of students abroad as
part of their courses.
These same questions are not nec-
essarily being asked of the younger
cohort of civil servants who will
look to maintain the stability of
the political system that the CPC
has been keen to foster. With the
benefit of being able to look at the
developmental history of estab-
lished nation-states, the Chinese
government can form a blueprint,
with the often talked about Chinese
characteristics, in order to tackle
future impending challenges that
the party is all too well aware of.
In order to explore some of the
most pressing challenges faced
by China and its governing par-
ty today and how they can be
tackled, BUSINESS & TRAVEL
presents the views of Professor Al-
ice Ekman, Research Fellow at the
China Center for Asia Studies, in
the French Institute of International
Relations based in Paris, France.
The many challenges ahead
If I were myself a CPC cadre I would feel a lot of pressure on my shoul-
ders and I would maybe feel tired just by the amount of challenges. We all know
that China has to face a set of domestic challenges as well as internation-
al challenges If we list just the domestic challenges, first of all we know it’s to
maintain economic growth; [as well as] a set of challenges related to urbanization
and integration of the migrant population within cities; you also have challenges
related to the development of the welfare state, the development of medical care,
the development of the pension scheme, better access to education.
All these are all related to the reduction of social and economic inequalities in the
country between rural areas and urban areas and within the cities themselves,
between permanent residents and migrants; the newly arrived urban popula-
tion. So, in this context I think the party is facing a number of challenges that it
has never faced at the same time.
Also, in the new media landscape you also have the rise of social networks that
are positively powerful in China so you have a new power emerging in China
which is diffusing information much faster and which is also developing a debate
that may also raise tension or at least raise new questions that the party has to ad-
dress. If you look also at the international challenges, first of all on a regional
scale, you have a tense regional situation with territorial disputes in the East
China Sea as well as in the South China Sea. And you also have a restructuring
of the region which is itself a major challenge for China.
Policy manipulation and implementation at the
local authority level
The key challenge is coordination; coordination between central government and
local governments, but also coordination at the central level. Since the launch of
the era of reform and opening up in 1978, you have an increasing number of new
institutions taking part in the policy-making process within China. You have
new institutions emerging, with the intention of coordination.
Under the Xi Jinping leadership, there is a new attempt to coordinate the de-
cision-making process. So, there is an idea, some form of initiative; but I don’t
know completely how the implementation would take place. Streamlining
is needed at the institutional level. At the same time, party officials themselves
recognize that there is sometimes overlapping between institutions, between cen-
tral government, and sometimes even between party institutions and between
government institutions, between ministries for instance.
There is a need in China for coordination at an institutional level but also at a re-
form level. I guess the anti-corruption campaign can partly help in coordinating
reform and institutions, but also it can generate tension at the senior level but also
at the medium level and lower level. I wonder today what is the mood and general
20

21. 21
motivation of civil servants at the time
of the anti-corruption campaign.
I believe part of the population believe
this campaign is justified, given the
scandals that were noticed in recent
years and given that there was some
excess noticed at various levels in
terms of expenditures and privileges.
At the same time, this anti-corruption
campaign has been implemented at a
very fast pace, and I believe that civil
servants even at medium and lower
levels are facing some pressure and
have to readjust their working style
and also the way they perceive their
own mission in a very short time.
I wonder whether this anti-corruption
campaign will bring cohesion for the
consensus within the Party and
central institution or if it will also
create more tension. It’s too early to
assess, but this is very interesting to
assess as a China watcher.
Striking a balance between
the haves and the have-nots
I think the CPC is conscious about the
gap between the expectations between
the normal people and the elite, and
is trying today to reduce the gap by
listening to expectations. Of course,
in the current political system there is
also ways to look at satisfaction and
to listen to expectations (collecting
polls, online polls, or looking at hot
topics and main comments on the
internet). I think this concept of the
Chinese Dream, for instance, is a way
to be appealing to the less privileged
part of the Chinese population,
maybe the rural areas.
Parts of the urban areas now have
reached a more comfortable lifestyle,
but the majority of people living in
the rural areas are still struggling to
improve their daily life. So, the
Chinese Dream is still giving some
form of hope to this population that
it’s possible to some extent to reach
“Xiaokang Shehui” a small pros-
perity level. So this kind of public
political communication is a way to
try to maintain a form of legitimacy of
the party in this changing context.
I think the anti-corruption campaign
itself is a response to one of the most
pressing expectations of the popula-
tion, developing a fairer system, less
unjust apparently. So, it’s a symbol
as well; you have also cases that have
been broadcasted about leading
officials that have been charged for
corruption issues. So, this is public
political communication.
You also have effective decisions that
have been made. But there is also
expectations regarding the overall
relation regarding poverty and social
inequalities and I think if there is no
result in the next two or three years,
popular expectations, popular pressure
will grow and may generate a real chal-
lenge for the stability of the country;
as the party is worried about. It’s a real
challenge for the current political sys-
tem. I would say, at the same time, the
current government is conscious about
the gap and partly helps to reduce it
but this is only part of the solution.
Guiding moral value
systems and establishing an
ethical framework
Ethical framework is important but it’s
a personal issue. Sometimes, you may
have guidelines from the top or advice
to follow a specific orientation but you
may not integrate them in your life just
because someone is saying you should
go back to traditional culture or to
values of Confucius; that someone
may believe it is relevant to the current
context or may feel it is appropriate to
one’s own personality or ambition.
It’s true that there is an issue that has
been generated since the erosion of
traditional Marxist ideology with
the era of Reform and Opening
up; progressively traditional
ideological framework
that was widespread
during the Cultural
Revolution and
before has
disap-
peared, and at the same time the
progressive coming back of traditional
Chinese culture but also the develop-
ment of a consumption society. So, in
this context, I understand that part of
the Chinese population may feel a bit
lost, especially because there’s a lot of
pressure, pressure for young graduates
to enter the work environment.
In this situation I would say that it’s
more a matter of self-personal con-
sciousness. Moral values are ethical,
at university level fighting against
plagiarism, at work level having a
specific set of conduct with colleagues
and not being able to develop specific
behaviors for carrying a promotion
only. So, it’s also related to the an-
ti-corruption campaign.
I guess this campaign can help in
building a framework but I would
say it’s more thorough reform,
thorough reform even in the vocation-
al system; reinforcement of mer-
itocratic recruitment of students;
reinforcement of meritocratic recruit-
ment of civil servants which is already
partly meritocratic. But fairer access to
education, fairer access to white
collar jobs and serving in public
service, and also fairer practice in
the civil service might provide
an interesting example for
building a stronger more
ethical framework in
China.

22. 22

23. 23
At the time of going to press, search
vessels equipped with deep-sea
sonars are still combing an area in
the remote southern Indian Ocean,
striving to find clues of the Malaysia
Airlines Flight MH370, which
disappeared last year.
The aircraft, a Boeing 777-200ER
mysteriously vanished into thin air on
March 8, 2014, with 227 passengers
and 12 crew members on board, en
route from Kuala Lumpur to Beijing.
About 40 minutes after takeoff, MH370
disappeared from air traffic control ra-
dar screens. Its transponders appeared
to be either switched off or had failed.
Primary radar, which didn’t rely on
transponders to detect aircraft as the
air traffic control’s secondary sur-
veillance radar did, soon picked up a
signal and for a while was able to track
what was believed to be MH370 as it
diverted from its scheduled route. The
plane was last seen above the Strait of
Malacca, heading northwest, before it
dropped off the radar altogether.
MH370 continued to fly for hours, ac-
cording to a series of satellite commu-
nication logs recorded by the British
satellite telecommunications company
Inmarsat. Months of ground-breaking
analysis of the satellite data by both
official and independent experts has
brought the search to its current area,
thousands of kilometers away from
the plane’s last known position. Even
so, finding MH370 is no easier than
finding a needle in a haystack. In fact,
authorities are not even 100 percent
sure they’ve found the right haystack.
People have heard various theories that
vividly lay out every detail as to where
MH370 went and what happened to
it. But the truth won’t be learned until
the search team locates the aircraft’s
two black boxes - a flight data recorder
and a cockpit voice recorder - and has
the luck to retrieve useful information
from them, since the cockpit voice
recorder usually captures sounds in
the cockpit in a two-hour loop, but
MH370 presumably continued to fly
for at least six hours after the critical
moments that defined its fate.
Commercial airliners are tracked by
air traffic controls using primary and
secondary radars, based on technolo-
gies originally developed during World
War Two. But radar coverage has its
limits over sea, and so tracking aircraft
with radar becomes unreliable in the
case of transoceanic flights.
Today, many airlines have added to
their fleets a new technology known
as Automatic Dependent Surveil-
lance-Broadcast (ADS-B), which relies
on satellites to track and report aircraft
positions in real-time and appears to
be a promising replacement for radar.
MH370 was equipped with ADS-B
equipment. The problem, however, is
ADS-B still relies on transponders to
relay data to the ground, and tran-
sponders can be turned off manually.
It’s still unclear whether MH370’s
ADS-B equipment was deliberately
turned off or failed, but this new tech-
nology didn’t provide useful informa-
tion in this case.
It seems that the keys to a reliable
aircraft tracking system lie in whether
itissmartenoughtodetectanomalies,
alert those on the ground in time, and
send positional data back without having
adeactivationswitchthatcanbeeasily ac-
cessed. In the wake of MH370, aviation
decision-makers have been pondering a
new global standard for aircraft tracking.
Xie Tingting
Will 2015 Shed Light
on Better Flight
Tracking?
“ T h e k e y s t o a
r e liable aircraft
tracking system lie in
whether it is smart
enough to detect
anomalies, alert
those on the ground
in time, and send po-
sitional data back with-
out having a deactiva-
tion switch that can
be easily accessed.”

24. 24
A new system, called the Global Aero-
nautical Distress and Safety System
(GADSS), is being mapped out with
a mission to “ensure that information
is provided in a timely fashion to the
right people to support search and
rescue, recovery and accident
investigation activities,” according
to the International Civil Aviation
Organization (ICAO), an agency
of the United Nations specialized in
international aviation.
This February, ICAO is holding a
high-level safety conference at its
headquarters in Montreal, Canada.
Attendees will discuss the GADSS
concept and how the standard can be
implemented. Based on feedback
from this conference, ICAO will
finalize its GADSS blueprint by the
third quarter of 2015.
Under ICAO’s current blueprint,
GADSS will be a globally integrated
system that maintains an up-to-date
record of an aircraft’s progress. GADSS
will contain an automatic aircraft
tracking system that will be activat-
ed at takeoff and remain operational
throughout the flight.
The system will broadcast the aircraft’s
position at least every 15 minutes, and
reportmorefrequentlywithaone-minute
interval when an abnormal event is de-
tected. A separate autonomous distress
tracking system can be automatically
or manually activated, in case of failure
or risk of failure of the related aircraft
tracking systems.
In worst scenarios like crashes, a tam-
per-proof flight recorder designed to be
automatically separated from the aircraft
in extreme events will be deployed at the
start of an accident. The flight recorder
will be equipped with an emergency
locator transmitter, and will be able to
land at low speeds on hard objects or
float on water, making it easier to be
located than the current black boxes.
GADSS is still at a concept level, but an
ICAO spokesman has told Reuters that if
adopted,thesystemcouldgointo effect in
the near term because it wouldn’t require
newtechnologyonplanes.
On December 28, 2014, exactly 42
weeks after MH370 disappeared; the
Indonesia AirAsia Flight QZ8501 was
lost over the Java Sea on its route from
Surabaya, Indonesia to Singapore. Be-
cause QZ8501’s radio and ADS-B con-
tacts were lost without warning, just
like MH370, widespread speculation of
another MH370 quickly surfaced.
QZ8501 was not another MH370. The
wreckage of QZ8501 was found and
confirmed within days; but it took
two weeks to locate and recover its
black boxes, and more weeks to ana-
lyze all the data in order to know what
caused the crash.
In the event of an aviation accident,
tracking the plane is one thing;
getting to know what happened is
another and maybe more important
issue. Currently, a plane’s black
boxes are usually fixed at its tail
section, which makes immediate-
ly-getting-to-know-what-happened
near impossible.
Even the deployable flight recorder
proposed by ICAO would still require
time to locate and recover. While
technologies continue to advance,
some companies have made it pos-
sible to live-stream black box data in
case of an emergency.
Not long ago, Canadian airline First
Air became one of a few in the world
to be able to live-stream black box data
when needed. The airline has adopted a
system designed by the company Flyht
Aerospace Solutions, which monitors
data about a plane’s location, altitude
and performance, and can automatical-
ly begin streaming information every
second when something goes wrong.
The system reportedly costs 120,000
US dollars per plane. Inmarsat, the
satellite communications company,
also said it had been developing similar
“black box in the cloud” services.
It will take time for such new concepts
to be accepted by every airline, budgets
and necessity among other concerns.
It will also take time for ICAO to
make its new flight tracking system a
Banning is Rarely
the Answer
Liu Yan
In a somewhat controversial move,
China’s Ministry of Transport has
banned private cars from offering
unlicensed taxi services via mo-
bile-phone apps. In other words,
private-car owners are not allowed to
use the country’s slew of ride-hailing
apps to pick up passengers for profit.
The logic behind the move is, this
will “allow passengers who use these
services to travel at ease”. I’m more
than willing to acknowledge that
safety is always a legitimate concern.
If private-car owners can provide taxi
services via mobile applications such
as Didi and Kuaidi, amongst others, as
they please, then in essence, they are
no different from all those “black cabs”.
Op
OP-
ED
requirement. Yet, since Henk Hof, who
chairs ICAO’s ad-hoc working group
on flight tracking, has said that avia-
tion has the culture to react and take
lessons from rare events, let’s hope that
every member in the aviation industry
really makes every effort to learn from
the past, and take action.
Let’s also hope that no one in the
future will go through the same, pain-
fully long wait that has been haunting
the families of those on board MH370
to this day.

25. However, I can’t help but feel like this
is yet another “too simple, too lazy”
type of solution China is prone to
toss out. The decision-makers seem
to have a default ban button, and
anytime something goes wrong or
may go wrong in the future, they
immediately ban it.
I’m not saying banning is never called
for. Take smoking in public places
for instance. In theory, people should
have the right to smoke anywhere
they want, but considering the
second-hand smokers who are forced
to suffer, the already-terrible air,
and many smokers’ ghastly habit of
flicking cigarette butts willy-nilly, the
ban makes sense. There is no “absolute
freedom” after all. Cliché as it sounds,
it’s for the greater good.
Unfortunately, in most cases, banning
is not the answer. The original intent
may very well be to “nip it in the bud”,
“it” being whatever potentially bad
thing that may harm our society or
country. But in the end, all it does is
make life more difficult for the vast
majority of the law-abiding citizens.
Just ask anyone in China who wants
to keep in touch with their overseas
friends or family members on Facebook.
So the crux of the problem is whether
the ban is indeed for the greater good.
And by that, I mean judged by the
result, not the intention. In most Chi-
nese cities, cab fares and the number
of total taxis available are both under
tight control. At the same time, there’s
a double threshold for anyone who
wants to be a professional taxi driver.
On top of meeting all the qualifica-
tions for a cab driver, you also have
to work for an employer that
meets all the qualifi-
cations for a taxi
company.
As such, there is
always a huge gap
between demand
and supply for cab
services, and so for
taxi companies,
profit just keeps
coming in. It’s practically guaranteed.
That’s why they have this natural ani-
mosity toward private-car owners who
want to join the game and eat away at
their profit.
Like taxi companies, cab drivers also
fiercely object to private-car owners.
But in fairness, it’s not all about that
“don’t encroach on my turf and steal
my business” mentality. They simply
don’t have much of a choice.
Currently in Beijing, each cab driver
must pay over 5,000 yuan (US$806)
per month to taxi companies to cover
their overheads. Even with the price
hike last year, Beijing’s taxi drivers
earn about 6,000 to 8,000 yuan per
month. Subtract 5,000 from that, how
much is there left? So of course, they
steadfastly refuse to let private-car
owners swoop in and take more money
away from them.
How then, do you give private-car
owners an in without wreaking havoc?
My gut instinct is to say “no way”. Ap-
parently the Ministry of Transport feels
the same, hence the ban. It’s a heck of a
lot easier than cutting the huge profits
of taxi companies and consequently
having to deal with the havoc.
But here’s the thing. I’m just a regular
Joe. I can shrug my shoulders and be
done with it. Authorities, on the other
hand, shouldn’t cop out. Their deci-
sions affect millions of people. Since
the Internet is quickly changing the
commercial landscape as we know it,
old business models have to be ad-
justed and old profit chains have to be
restructured.
Sure, the undertaking is going to meet
resistance, and it’s much more difficult
than pushing the default ban button so
to speak, but handling difficult tasks
goes with the territory, doesn’t it? They
are the “authorities”. They need to step
up to the plate and face the challenges
head on. on. They need to be daring
and not afraid to make tough deci-
sions. After all is said and done, they
need to do what’s good for the people.
You know, the greater good.
Interestingly enough, the Ministry of
Transport has also said, “apps for pre-
mium car services have an innovative
service model and play a positive role
in meeting the high-end and differenti-
ated transportation market.”
In that case, put your money where
your mouth is. Do more research, and
come up with a feasible mechanism
to regulate private-car owners instead
of banning them altogether. Remem-
ber, people need more and better taxi
services, not less.

26. 26
Reshaping Asia
By Xu Qinduo
I did a bit of translation work the
other day, or provided some advice,
to be accurate, to a friend who was
organizing a forum on China’s “One
Belt and One Road” project. The
program, together with related ini-
tiatives, are not known to everybody
yet, but they are poised to reshape the
landscape of Asia.
There was not much meat to the “Belt
and Road” concept prior to the recent
APEC summit held in Beijing, when
China announced the establishment
of a 40-billion-dollar Silk Road Fund,
which is designed to support the “One
Belt and One Road” program.
The “Silk Road Economic Belt” refers
to a network of highways, railways and
other infrastructure to link China to
countries in south and central Asia and
Europe. The “21st Century Maritime
Silk Road” will connect China with
Southeast Asia, the Middle East and
Africa through high-speed rail links
and the funding of roads, ports and
bridges that will play a role in up-
grading economies in these regions.
In short, the ultimate goal is to create
economic connection between China
and the neighboring regions.
Such a grand initiative originates partly
from the understanding that China’s
economic future relies to a largel extent
on sustainable economic growth in
surrounding countries, or Asian coun-
tries in general. According to Chinese
Customs’ figures, trade with Asian
countries in 2013 reached 2.2 trillion
U.S. dollars, representing more than 53
percent of China’s total trade with the
rest of the world. In comparison, trade
with Europe, the U.S. and Japan stood
for only 33.5 percent of China’s total
trade volume during the same year.
By investing overseas, China can
also alleviate its overcapacity in the
manufacturing sector by exporting
construction materials, machines and
technologies to other countries. The
strategy is regarded as a reasonable
choice to meet the need of the Chi-
nese economy at this particular stage,
where it is necessary to ensure eco-
nomic growth while transforming the
economy from relying on exports and
investment towards a reliance more on
domestic consumption.
Asian countries are expected to benefit
tremendously from the Chinese invest-
ment. Nepal is a case in point. Beijing
will increase official aid to Nepal by
more than five times in 2015 in order
to develop infrastructure in the land-
locked nation which is a key stop on
the “One Belt” project.
Along with infrastructure construction
comes people-to-people exchanges,
stronger trade and commerce links
and closer ties between China and the
rest of the countries situated in Asia.
Economic connectivity will be created
among Asian countries in the process
of the implementation and realization
of these initiatives, thus achieving
long-term stability and a shared pros-
perity in this region.
Another positive and significant
element being introduced by China to
Asia has been the spirit of openness
and inclusiveness. Related to the “One
Belt and One Road” initiatives is a new
financial institution called the Asia
Infrastructure Investment Bank, or
AIIB. As the leading force behind the
initiative, China has adopted an open
attitude toward the membership of
both the Silk Road Fund and the AIIB,
noting that all countries are welcome
to invest in these schemes.
The AIIB is different from the U.S.-led
Trans-Pacific Partnership, or TPP, which
is an exclusive club of 12 countries that
shut the door on China. In contrast,
Beijing proposed the idea of a Free Trade
Area in the Asia Pacific, which groups
all 19 member economies of APEC.
The U.S. efforts have been lobbying
Asian allies not to join the AIIB, but
Asian nations are warmly embracing
the initiatives, as shown in the fact that
more than 20 Asian countries have
signed up to the AIIB already.
By launching these global initiatives,
China is reshaping Asia not only by
creating a solid foundation to spur
trade and economic growth in Asia,
but also bringing about a new tone for
Asia - be open and inclusive.

27. 2727

28. 28