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China is showing its Xenophobic side. Anti-foreigner sentiment is never far from the surface and since the beginning of the crackdown on illegal foreigners in Beijing it has emerged aggressively. Yang Rui, the smooth, urbane anchor of a CCTV 9 English talk show took to his Weibo Friday to attack foreigners. The Wall Street Journal reports that Chinese State TV Host Offers Advice on How to Throw Out ‘Foreign Trash’ . Yang posted another Weibo later in which he asks why the Wall Street Journal would care about his comments and attempts to undo some of the damage by explaining that his attack was only directed at bad foreigners and that in fact there are good ones too. With people like this as the face of the soft power push…

Baidu and Sina are also joining in the anti-foreigner fun. People’s Daily Online tells us that a new Weibo campaign targets misbehaving foreigners. I hope the Department of Homeland Security is not reading this and getting any ideas. Can you imagine if Google and Twitter, as part of a US government campaign, worked together to go after “misbehaving” foreigners? Instead of “see something, say something” perhaps the slogan would be “see a naughty foreigner, report a naughty foreigner”?

On the eve of Facebook’s monster IPO the New Yorker’s Evan Osnos wrote the very thoughtful In China, Facebook’s Shadow and Worries About Innovation. He concludes with a poignant quote from banker Wang Ran’s blog. Wang Ran, who has profited handsomely from the explosive growth of the Chinese Internet, is not just a financier but also an online celebrity with 1.7 million Sina Weibo followers. Wang writes:

“The company listed four countries that have already banned Facebook’s services,” Wang wrote. “They are China, Iran, North Korea and Syria. I don’t know what you think about that, but I’m beginning to think this state of affairs is insulting.”

Kara Swisher broke the news that Yahoo may be on the verge of selling almost half of its 40% Alibaba stake at a $35B valuation or so. Yahoo has given up on its obvious tax dodge structure and will take the IRS hit on the deal. I own shares of Yahoo and think that the company is crazy to sell any shares of Alibaba at lower than a $60B valuation. The Alibaba Group may one day be worth as much or more than Facebook, and Yahoo has no other current business prospects that have such potential to generate so many additional billions of dollars in value to shareholders.

After spending 35 minutes on the phone with Andy Browne, Wall Street Journal China head, and exchanging emails with Jeremy Page, I have issued several clarifications to the post Did Rupert Murdoch Crash The Wall Street Journal’s Bo Guagua Ferrari Story?.

The US Department of Defense has issued its annual report (PDF) on China’s military capabilities and the Pentagon Study Says China Military is Getting Stronger. Wired tell us that according to the report China’s Stealth Jets Are 2 Years Ahead of Schedule.

Thanks for reading, and remember the best way to see this daily post is to subscribe by email, especially if you are in China, as Sinocism is still blocked here.

• China on high alert over Huangyan Island: spokesman|Politics|chinadaily.com.cn
• China refutes India’s border accusation|Politics|chinadaily.com.cn
• Defense.gov News Transcript: Press Briefing on 2012 DOD Report to Congress on “Military and Security Developments Involving the People’s Republic of China”
• Pentagon Study Says China Military Getting Stronger – NYTimes.com
  China is pressing a long-range modernization of its military, part of a strategy aimed at maximizing its leverage over Taiwan, extending its influence farther abroad, but avoiding conflict around its borders or with the United States, the Pentagon said on Friday in an annual report to Congress.
• Security chief Zhou in police pep talk| SCMP.com
  Security tsar Zhou Yongkang made another high-profile public appearance yesterday – this time with President Hu Jintao
• Chinese desert Hong Kong art market – FT.com
  Sotheby’s has reported a sharp drop in mainland Chinese participation in its Hong Kong sales just as the auction house opens a new gallery in the city, paying some of the highest commercial rent in the world.
• Surprise! China’s Stealth Jets Are 2 Years Ahead of Schedule | Danger Room | Wired.com
  Last year, former Defense Secretary Robert Gates was greeted in Beijing by China’s experimental stealth jet buzzing over his head. Gates didn’t sweat it: He proclaimed that the J-20 wouldn’t be ready until at least 2020. Oops.The Pentagon’s top China official has now revised that estimate. The J-20, China’s first stealth jet, will be operationally ready “no sooner than 2018,” David Helvey, deputy secretary of defense for East Asia and Asia Pacific Security Affairs, told reporters Friday.The new anticipated timetable for the J-20 hardly augurs the end of American military dominance. But it wasn’t the only Chinese military development that took the Pentagon by surprise last year.According to the Pentagon’s new report (.pdf) on the Chinese military, China’s got three nuclear-powered submarines — an advance that Helvey conceded the U.S. military didn’t anticipate
• 中国共产党新闻网
• FT Alphaville » Is the Lafite bubble about to pop?
  Wine is not something FT Alphaville often writes about but we all need a break from the euro crisis, and this chart caught our attention. It’s the Liv-ex Fine Wine 50 index, which tracks the daily price movements of the most heavily traded commodities in the fine wine market – Bordeaux first growths. It has fallen off a cliff in the past few months.
• Drone filmmaker denied visa – Glenn Greenwald – Salon.com
  A Pakistani student is unable to accept his film festival award because he is denied the right to enter the U.S.
• New Home Prices in 43 of 70 Chinese Cities Fell in April-Caijing
• SASAC: Profits From Central Government-Owned Companies Down 13.2Pct in Jan-April-Caijing
• Chinese State TV Host Offers Advice on How to Throw Out ‘Foreign Trash’ – China Real Time Report – WSJ
  With a surge of anti-foreigner bile rising in Beijing, one might expect a prominent Chinese TV personality whose job it is to interview foreigners to weigh in with a few calming words.One would be dead wrong.In a rather perplexing move this week, Chinese Central Television host Yang Rui added a dose of poison to an already vitriolic debate about the behavior of foreigners in the Chinese capital by posting a message online in which he accused foreign spies in the city of pursuing Chinese women to cover up their activities, blamed Western residents for encouraging Chinese people to move abroad and appeared to take a certain vulgar delight in the recent expulsion of al-Jazeera correspondent Melissa Chan.
• DOD Annual Report to Congress: Military and Security Developments Involving The People’s Republic of China-PDF
• Japan, China’s Maritime Step | M. Taylor Fravel
  Many of the most salient disputes between China and its neighbors involve maritime issues. Moreover, as demonstrated by the current standoff between Beijing and Manila over Scarborough Shoal, China is often seen as assertive and uncompromising.  Nevertheless, maritime talks held with Japan this week suggest that China can be more flexible in managing its maritime disputes than most outsiders believe.
• 主持人杨锐的微博 新浪微博-随时随地分享身边的新鲜事儿
  CCTV Anchor Yang Rui attacks foreigners, supports the campaign to clean up illegals
• Weibo campaign targets misbehaving foreigners – People’s Daily Online
  Internet search giant Baidu and popular forum mop.com jointly launched a campaign with Sina Weibo yesterday, calling on Internet users to expose bad behavior by foreigners in China.
• In China, Facebook’s Shadow and Worries About Innovation : The New Yorker
  That idea—that the political system that has nurtured China’s rise may also be limiting its next step—has not yet been thoroughly embraced. But events like Facebook’s listing make it clearer by the day. When Wang Ran, the chief executive of China eCapital, paged Facebook’s prospectus, he stumbled on a section that he had never fully apprehended until reading it in black and white. Under a discussion of risks to the business, Facebook has listed a discussion of the potential impact if a government were to block the site. “The company listed four countries that have already banned Facebook’s services,” Wang wrote. “They are China, Iran, North Korea and Syria. I don’t know what you think about that, but I’m beginning to think this state of affairs is insulting.”
• China’s most-wanted man sentenced to life in prison – Telegraph
  Lai Changxing, the man once considered China’s most-wanted fugitive, was sentenced to life in prison Friday for running a large-scale smuggling operation that paid off scores of Chinese government officials.
• Goldman Sachs Cuts China Growth Forecast After Slowdown – Bloomberg
  Gross domestic product will expand 7.9 percent this quarter from a year earlier, down from a prior projection of 8.5 percent, Song Yu and Michael Buchanan said in a research note today. They predicted 8.1 percent growth for the full year, compared with a previous forecast of 8.6 percent.
• Exclusive: Yahoo Finally Set to Strike Alibaba Share Deal – Kara Swisher – News – AllThingsD
  stupid for yahoo to sell any shares at such a low valuation//
  Yahoo will sell half of its roughly 40 percent stake in Alibaba in a taxable deal. The transaction is likely to value that portion of Yahoo’s holdings at about $7 billion — or 20 percent of Alibaba’s $35 billion enterprise valuation. Alibaba is in the midst of raising capital to fund the sale.
  After taxes of upwards of 35 percent are paid on the long-term gains — remember Yahoo bought the now lucrative Alibaba stake for a fraction of that many years ago — the company will likely use the funds to buy back its own shares. That stock has been caught in the mid-teens doldrums for quite a while.
  A shareholder dividend is also being considered.
• 推系列文章 党报为胡温任内政绩背书_多维新闻网
  此外，文章还赞扬：正在神州大地推行的“大调解”工作，已经成为维护社会稳定的“安全闸”，促进经济发展的“助推器”，夯实基层基础的“加固器”，密切党群干群关系的“连心桥”。分析人士指出，这无疑将为“大调解”机制的最早推动者李源潮的政治前景再添一利好。
• China bars blind dissident’s family choice of lawyers | Reuters
  The nephew of blind activist Chen Guangcheng has been denied his family’s choice of lawyers to defend a charge of “intentional homicide”
• Echoes of Tiananmen, on Film, Face Hurdles in China – NYTimes.com
  Meanwhile, China’s younger rock scene leapfrogged into the Internet era with punk bands like Subs or Hedgehog. Mr. Cui, the onetime spokesman for disaffected youth, was seen increasingly as a figure from an earlier time. Some critics accused Mr. Cui of selling out to the government-run culture system, with appearances on state television, in a effort to reach a broader audience. But, Mr. Bai said, “a taboo around him persists.” Mr. Cui taped a performance for the CCTV Internet Spring Festival Gala this year, but the segment was never shown.
• 洪晃:“红色法拉利”的故事 – 洪晃 – 南都周刊
• Power and Profit in China’s Economic Boom – Graphic – NYTimes.com
• ‘Princelings’ in China Use Family Ties to Gain Riches – NYTimes.com
• 两名韩国男子在中国肯德基恶意殴打两名中国女子-专辑：老外在中国那些事 -热点专辑 视频分享 在线观看 视频搜索-56网视频
  video of 2 korean men beating up 2 chinese women in a kfc
• Angler may have broken world record with snakehead caught in Occoquan River – The Washington Post
  it weighed in at a fin under 18 pounds 4 ounces. 黑鱼
• 经济聚焦：国企民企，谁也离不开谁–财经–人民网
• Bad loan ratio below 1 pct for commercial banks in China – Xinhua | English.news.cn
  life is nice in this parallel universe
• 誰救了陳光誠？東師古村秋後算帳 : 陽光時務
  4月20日，陳光誠翻過家裏的圍牆，在鄰居家的豬圈裏躲到深夜。4月21日清晨5時，一身泥水的陳光誠從東師古村進入西師古村。一名遇到他的村民把他領到西師古村民劉元成家。劉元成通知了陳光誠的大哥陳光福，陳光福聯繫北京的學者郭玉閃，正和郭玉閃在一起的南京網友珍珠，驅車趕到山東。此時，陳光誠被東師古村民陳華開車送出臨沂市，藏在山東新泰市。4月23日凌晨，陳光誠與陳光福、珍珠等人在新泰會合，即刻前往北京。整整一個星期後，東師古村開始了抓捕
• Tsinghua University educates most billionaires in China: study｜Society｜News｜WantChinaTimes.com
  Beijing’s Tsinghua University educated 84 billionaire alumni with total assets of nearly 300 billion (US$47 billion) over the past 30 years, according to school ranking site Cuaa on May 16.
• Australia will need to choose between US and China: retired PLA officer｜Politics｜News｜WantChinaTimes.com
  Song Xiaojun, a retired People’s Liberation Army officer, said to the Sydney Morning Herald that Australia will have to choose a side.
  “Australia has to find a godfather sooner or later,” said Song. “[It] depends on who is more powerful and based on the strategic environment.”
• Stirring up the South China Sea
  This week on Sinica, as the situation in the South China Seas simmers and Chinese society turns noticeably xenophobic, we’re pleased to be joined by Stephanie Kleine-Ahlbrandt from the International Crisis Group, a non-governmental organization which has just released a fantastic report on the actors and factors in Chinese policymaking that are contributing to increased tensions in the South China Sea.
• At USA Today, Larry Kramer jumps back into fray of digital journalism – The Washington Post
  One question people want to ask the journalist-turned-Web-entrepreneur Larry Kramer is: Why would he take a job as publisher and president of the troubled USA Today?
• 美驻华大使馆：骆家辉年薪17.97万美元_政经频道_财新网
  5月17日，美国驻华大使馆官方博客转载了《美国国务院员工和骆家辉大使的工资》一文。文章称，骆家辉自从政以来，几乎每年都会按照地方或联邦政府的规定申报财产
• 新华社报道周永康“一切如常”_多维新闻网
  fact that Zhou Yongkang not on Heibei 18th delegate list may not be a sign of anything. TBD
• 南方周末 – 实德如何掏空大元股份
  Southern Weekend looks some of at Dalian Shide’s Xu MIng activities
  5年间，徐明仅动用不到3亿的资金，就在大元股份身上获利超过18亿元，回报率超过500%。2001年，实德把土地资产高价卖给大元股份，从上市公司套取近亿元利润。8年后，这块土地增值数倍，实德再次通过关联交易，低价把土地买回，并获取巨额的政府拆迁补偿款。

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