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Media Digest
UPDATED: December 30, 2013 NO. 1 JANUARY 2, 2014
Media Digest

Water Woes

Oriental Outlook
December 12

For Shaanxi Province, water resources are not only short but also distributed unevenly, with 70 percent of its annual rainfall occurring during the flood season and 70 percent of all its water resources concentrated in the south. The province's per-capita water resources are only about half of the national average.

Today, with the acceleration of urbanization and global climate change, water is becoming an increasingly severe issue for Shaanxi. Their problems include water shortages, pollution and ecological deterioration. Presently, water-intensive energy and chemical industries in the northern part of the province have begun to thrive and urbanization is picking up. Many projects were launched without taking into consideration the amount of water available.

The conflict between an aspiration for economic development and the impending water shortage is becoming increasingly tense. Many locals are calling for a solution by building a west line from the South-to-North Water Diversion Project, a major project to channel water from the Yangtze River in the southern part of the country to the north.

In 2013, in an attempt to seek a solution to the dilemma, the province added the implementation of strictest water resource management into its official appraisal system, attaching great importance to the constraints on development and utilization of water resources. However, the existing conflict between the water problems and an energy-intensive development model remains.

University Enrollment

People's Daily
December 23

Renmin University of China, a renowned university based in Beijing, recently announced that it would suspend independent enrollment of students for 2014, following the arrest of the university's head of admissions in November 2013 over allegations of taking bribes.

The scandal revealed the vulnerability of independent enrollment systems at universities. The pilot program for universities enrolling students independently was initiated 10 years ago and aimed to give universities more flexibility in selecting qualified students. The program was expected to lead to breakthroughs in reforming the college entrance examination system, under which all high school students must pass a unified exam in order to enter college. However, some worry that independent enrollment has become a channel for unqualified students with powerful or wealthy families, and that it may bring educational inequity as well as corruption.

It is necessary to enhance public supervision over college administrative power. Education authorities should take substantial measures to improve the existing university enrollment system and advance information transparency.

Cold Winter for Calendar Market

Yangcheng Evening News
December 24

After the Central Government recently strictly prohibited local governments and state-owned enterprises from using public funds to print calendars, many businesses specializing in printing calendars have experienced a lapse in business.

According to Jin Jingxi, head of the Calendar Products Association in Yiwu, a hub for calendar printing in east China's Zhejiang Province, local printers have lost more than 100 million yuan ($16.47 million) since the government ban.

After the Central Government issued a series of regulations aimed at tackling corruption this year, some markets such as luxury restaurants and liquor have experienced similar declines in revenue. The overall decline in luxury consumption also shows how heavily these industries rely on governmental officials and not just the market.

However, some calendar printers which have centered themselves on the market have not been influenced by governmental consumption bans. This demonstrates that profit model relying on government consumption cannot be sustainable. The drastic drop in calendar sales has pushed enterprises to seek a healthy operation model and develop new products, which is an opportunity for enterprises to shift their focus onto other consumers and reduce risk.

Financial Reform

Caijing Magazine
December 16

Recently, Caijing Magazine interviewed Zhou Xiaochuan, head of the People's Bank of China. Zhou said that right now China is ripe for financial reform, and he elaborated on the direction of the coming reforms and major tasks.

In order to achieve the goal of letting the market play an essential role in resource allocation regarding the financial sector, reform must be carried out across three areas. First, China should grant equal access to the financial market to both domestic and foreign banks, so as to ensure full competition. Second, the price of financial factors should be market-oriented so as to realize the optimization of resources. Third, China should make sure that the market plays a major role, and similarly make sure enterprises and individuals have the right to choose financial products freely.

These three areas are complementary to each other. Only with greater access to the financial market can competition be given full play and reasonable prices be formed, and only with reasonable prices can the optimization of resources be achieved. When enterprises and individuals have the right to choose, they can properly assume their role in the market. Market-oriented pricing is actually an interaction between market entities.

Unlike other reforms, market-oriented reform of the interest rate is about financial stability. The reality is that ever since China approved the interest rate of inter-bank lending in 1996, after 17 years of progressive reform, the restrictions on interest rates are quite weak, with the ceiling on deposit interest rates as the only remaining restriction. Emerging financial products have, to a large degree, replaced the deposit, actually broken the interest rate restriction and are thriving. Therefore, the double-track interest rate, which has existed in the financial market for so many years, will finally embrace a merging in the coming financial reforms.

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