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The Driving Force of the Belt and Road

Oriental Outlook Issue No. 19， 2017

It is often asked， if China had not invented gunpowder， would Western countries still have developed firearms？

History makes no assumptions， but there is no doubt that without the ancient Silk Road， the course of human civilization would have been completely different.

Buddhism， Islam， foreign astronomy， calendars and medicine were all introduced to China via the ancient Silk Road， while in the opposite direction the four great inventions of ancient China – the compass， gunpowder， papermaking， and printing – spread to the rest of the world. These exchanges not only influenced the economic and social transitions of the importing countries， but also the general course of world history.

Drawing on the ancient Silk Road， in the autumn of 2013， Chinese President Xi Jinping launched the modern-day Belt and Road Initiative， a major scheme offering opportunities for countries and regions along its route.

The speed of its progress has surpassed expectations. In the past four years， the Belt and Road Initiative has gained the support and participation of more than 100 countries and international organizations. And it has been factored in some important resolutions of the United Nations General Assembly and Security Council. From idea to practice， from vision to reality， its construction has achieved plentiful results.

In fact， the progress is not difficult to understand given the various challenges the world faces. Just as President Xi said， global economic growth requires new drives， and development needs to be more balanced and benefit more people.

Common challenges will give rise to joint actions. The principles of extensive consultation， joint contributions and shared benefits are the sum and substance of the Belt and Road.

Looking back at the prosperous ancient Silk Road， people along the route used not only silk， porcelain， lacquer and ironware from China， but also pepper， flax， spice and grapes from the West. The strong demand for these commodities and the mutual benefits they brought made the Silk Road the most significant trade route connecting East and West.

Times have changed but the spirit of the ancient Silk Road， while adapting to the interests of people from various countries， has not. This is the driving force behind the Belt and Road.

Where Did the Chinese Come From？

Life Weekly

Issue No. 23， 2017

On November 24， 1974， the skeleton of a female Australopithecus afarensis， a now-extinct human-like species， who lived 3.2 million years ago， was unearthed in Africa. The discovery apparently proved that Africa was the cradle of humanity.

But Chinese science writer Qiu Jin published an article in Nature magazine on July 12， 2016， saying that China is rewriting the theory of anthropogenesis， or the process of becoming human.

The skull of Sinanthropus pekinensis， or Peking Man， found near the Chinese capital in the 1920s， captured the attention of paleoanthropologists worldwide， who were later drawn in by the discovery in Africa. The recent finds in China put the spotlight back on East Asia. After these discoveries， it is quite possible that human evolutional history will have to be rewritten.

This year， Qiu Jins prediction came true. A thesis from China was published in Science magazine on March 3， 2017， identifying the skull of Xuchang Man， discovered this century in central Chinas Henan Province， as dating back 105，000-125，000 years. The Xuchang remains reveal shared features with East Asian hominids， Neanderthals and early modern humans.

Why can this change anthropogenesis theory？ This is a question for professionals.

Shrinking Balance Sheet

Caijing Magazine Issue No. 12， 2017

When liquidity is tight and the price of borrowing is high， the change in the Peoples Bank of Chinas （PBOC） balance sheet becomes the markets most important way of predicting monetary policy. In May this year， this “shrinking balance sheet” was the most popular financial term used in China.

According to PBOC data， from the end of January to the end of March， its balance sheet shrank by RMB 1.1 trillion. This change triggered a huge reaction on financial markets.

But does the shrinking really equate to contraction？ According to the PBOCs China Monetary Policy Report for the first quarter of 2017， released on May 12， the shrinking does not necessarily indicate a tightening in monetary policy. The PBOC balance sheet expanded in April.

According to the report， a change in the PBOC balance sheet and basic stability of capital mobility are not mutually exclusive. The situation over the past few years should not be used to measure current capital mobility， nor should certain seasonal changes in the balance sheet be seen as signs of changes in the orientation of monetary policy.

WeChat： Annoyance for the Telecom Giant

Caixin Weekly

Issue No. 22， 2017

According to Tencents first-quarter financial report this year， the number of active WeChat users has reached 938 million. In just three months， the number of new users was higher than the population of Germany.

Originally a social app， WeChat has now been integrated into various basic aspects of life and everyday necessities， and goes far beyond the market recognition of general app.

As the parent company of WeChat， Tencent is Chinas largest digital content provider. It has created games， web portals， Internet literature， and QQ， the leading social networking software during the PC era. Now， WeChat has become Tencents major source of content distribution.

Many leading Chinese Internet companies like JD.com and Meituan.com have connected with WeChat to share the rewards as Tencent continues to invest in the industry.

In 2016， the number of active users of Apples iOS smart phone operating system exceeded one billion， and WeChat is very close to that level. Its product experience has narrowed the gap between iOS and Android， and it is believed that WeChat has the ability to run an operating system. The question for Tencent is whether to do it and when？ And how may it avoid a conflict of interests？

New Strength of Military Industry

China Financial Weekly Issue No. 10， 2017

Chinas private sector is full of confidence and expectation that it will enter the military industry， especially by investing private capital in nonlisted companies.

According to the Peoples Liberation Army Daily， by April 2017， there were 2，054 entities in China that had gained licenses to develop and produce weaponry. And one third of them are private enterprises.

It is estimated that in the next five to 10 years， China will have top private military industrial enterprises， just like Lockheed Martin of the U.S. and BAE Systems of the U.K. This optimistic prediction is based on Chinas strategic plan for military and civilian industrial integration.

Judging from the three-decade development of Chinas private economy， military and civilian industrial integration is a new transformation trend. In the face of internal and external pressure， private entrepreneurs and private capital need to share the benefits of the new round of reforms to achieve new development.

There are many investment companies that focus on the military industry， in which the role of venture capital and private equity has already reached a certain scale. Their investment has gradually linked enterprises that used to be separate.