Apologies for the abbreviated post this morning. The Beijing Electric Company is “upgrading” the power system in my building complex and so the power will be off from 8AM until 5PM today.

Ferrari-gate has roared back thanks to Hong Huang. As I detail in Did Rupert Murdoch Crash The Wall Street Journal’s Bo Guagua Ferrari Story?, media entrepreneur, fashion maven and Weibo celebrity (4.7m fans) Hong Huang has just dropped a bomb on the Wall Street Journal. Huang knows some of the participants in the “Ferrari-Gate” story and this week she wrote 知情人洪晃亲述：闹得沸沸扬扬的薄瓜瓜和红色法拉利内幕 for an influential Chinese magazine. WantChinaTimes has summarized her article in English in Red Ferrari, red herring: How WSJ backed down on Bo Guagua claim. I know Huang and consider her to be serious and credible. So does the Wall Street Journal, which in 2010 called her The Godmother of Chinese Designers. Huang alleges sloppy journalism, Murdoch meddling, and threats against a source. Wall Street Journal China editor Andy Browne has spoken with Gawker and denies some of Huang’s charges–Wall Street Journal Fights Back Against Claims Rupert Murdoch and Jon Huntsman Fed It a Bullshit Rumor.

Jeremy Page, the author of the original story that included the red Ferrari lede, is a terrific reporter who is just out with a fascinating story about Bo Xilai and the military–Bo Xilai’s Ties to Army Alarmed Beijing. My understanding is that Page may have not been the person who put the Ferrari lede into the story, and if that is the case it will be disappointing if the Wall Street Journal lets a good reporter hang out to dry. Last week’s Sinica Podcast has a good discussion of Ferrari-gate with Ed Wong, the New York Times reporter who first challenged the story.

Facebook’s monster IPO deserves some discussion in the context of China. Facebook is blocked, the government is not allowing the company to set up operations, even in a regulatory compliant joint venture with a trusted Chinese Internet firm like Baidu, and the SNS market is already quite mature, overfunded and overcrowded. Mark Zuckerberg may have set connecting the world as his goal, but in the near term he is going to have to settle for connecting the world ex-China. I have written a lot about Facebook and China over at Digicha. One world, two Internets…

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.

• Cross-Strait Relations on the Eve of Ma Ying-jeou’s Second Term
  In a recent article in the Chinese Communist Party journal Seeking Truth (Qiushi), Wang Yi, director of the Taiwan Affairs Office, noted that “generally speaking, opportunities and challenges coexist [in cross-strait relations], but there are more opportunities than challenges.” At this time, that may well be the case, but, as suggested above, the challenges lurk not far from the surface.Steven Goldstein is Sophia Smith Professor of Government at Smith College and the Van Beuren Chair Distinguished Visiting Professor at the U.S. Naval War College.
• billbishop的微博 新浪微博-随时随地分享身边的新鲜事儿
  300 retweets/80 comments and counting on this weibo about today’s fun Beijing Daily editorial 北京日报：媒体热衷负面报道是受西方观念蛊惑 http://t.cn/zOmXSX8
• The internet business in Russia: Europe’s great exception | The Economist
  Fritz goes to Russia. Sure sold out at China top//
  Fritz Demopoulos, an American who co-founded Qunar, a Chinese travel site sold to Baidu last year, and has invested in Ostrovok, a Russian online travel business, says that success in markets with local champions demands local knowledge, technology, access to capital, good management and scale. Except in scale, he says, it is not clear that foreigners enjoy an edge in any of these areas. Since the financial crisis, many people have started to doubt whether “foreign management know-how is all that relevant,” he says.
• 淘宝反腐：谁的裁量权？ – IT·科技 – 21世纪网
  more on the serious corruption problem at Alibaba’s Taobao unit
• JamesFallows的微博 新浪微博-随时随地分享身边的新鲜事儿
  James Fallows opened a Weibo account 6 days account. 34000 fans so far. I (@billbishop) just passed 10,000 fans after 2 years…
• 李长春观看大型情景音舞诗画《天安门》_网易新闻中心
  Li Changchun loves the new musical extravaganza “Tian’anmen”
• 人民日报-王乐泉率中共代表团出访亚欧四国
  Politics & Law Committee #2 Wang Lequan leads a delegation to 4 Asia countries, gets higher billing on People’s Daily page 3 than Meng Jianzhu
• 人民日报-越共中央总书记挂帅“治腐”
  Page 3 People’s Daily interested that Vietnam’s General Secretary is leading a corruption crackdown
• 人民日报-两个毫不动摇”推助中国崛起
  “2 Absolutely No Waverings” Have Helped China’s Rise. Second day n a row People’s Daily Page 1 has had article on China’s economic system
• 人民日报-社会管理创新取得积极成效
  Page 1 People’s Daily-Social Management Innovation Has Obtained Positive Results
• U.S. and China Battle Over Audits – WSJ.com
  U.S. and Chinese regulators are headed toward a possible clash over how Chinese companies are audited.
  Beijing has moved to assert more control over Chinese affiliates of major accounting firms by requiring that Chinese citizens lead those firms and make up most of the partners. That action came after U.S. regulators increased pressure on a Chinese audit firm to force it to cooperate with a U.S. investigation.
• Manila set to dispatch envoys to Beijing|Asia-Pacific|chinadaily.com.cn
  Manila will dispatch two special envoys to Beijing amid a tense standoff in the South China Sea following the harassment of Chinese fishermen in territorial waters.
  Beijing issued an immediate response on Thursday saying that it noted Manila’s “attitude”.
• Is China Facebook’s next step?|Top Stories|chinadaily.com.cn
• 北京日报：媒体热衷负面报道是受西方观念蛊惑_新闻_腾讯网
  Beijing Daily at it again..Media loves negative news because it has been bewitched by Western thinking
• 菲律宾退役军官今日将率众赴黄岩岛捕鱼插国旗_新闻_腾讯网
  Retired Philippine military officers going to Huangyan Island to plant Philippine flag
• 水利部：高污染背景下城市水质达标80%很不错_新闻_腾讯网
• U.S. Imposes Anti-Dumping Duties on Chinese Solar Imports – Bloomberg
• China Car Dealerships Struggle as Stockpiles Increase – Bloomberg
  Chinese dealers are struggling with the rising number of unsold cars that’s threatening to deepen price cuts, according to the nation’s biggest automobile dealers’ association.
  Dealerships for Honda Motor Co. (7267), Chery Automobile Co., BYD Co. (002594) and Geely Automobile Holdings Ltd. (175) carried more than 45 days of inventory as of the end of April, exceeding the threshold that foreshadows debilitating price cuts, Su Hui, vice president of the auto market division at the state-backed China Automobile Dealers Association, said in an interview.
• Dangdang Pushes ADRs to 4-Month Low: China Overnight – Bloomberg
• Evernote’s New China Service Sees More Signups than US and Japan Combined (Video) » M.I.C. Gadget
• Wall Street Journal Fights Back Against Claims Rupert Murdoch and Jon Huntsman Fed It a Bullshit Rumor
• China’s ‘Security Dilemma’ Risks Arms Race in Asia | Battleland | TIME.com
  A shooting war with China may not be inevitable, but a dangerous arms escalation seems a dead certainty. That’s the take from a rare public discussion here this week among naval experts from Japan, the U.S. and China.
• China Expands Scope for Short Selling, Securities Journal Says – Bloomberg
  China will start a trial next week that will allow brokerages to borrow stocks for clients wishing to conduct short selling, the China Securities Journal reported.
• Facebook’s Prospects In Asia | TechCrunch
• Facebook | DigiCha
• The Useless Tree: Reply to Eric X. Li: Cultures are not Incommensurable and the CCP is not Confucuian
  in which Prof Sam Crane destroys specious arguments
• Is China turning against foreigners to cement control? | GlobalPost
  Still, some non-Chinese residents endorse the 100-day “clean up” campaign, seeing it as a justifiable response to Beijing’s emergence as an alluring global destination.
  “I don’t think it has anything to do with fomenting jingoism,” said Bill Bishop, an investor and consultant who has lived in Beijing for more than eight years. Calling the measure “long overdue,” he asks: “Why should illegal foreigners in a first-world city like Beijing expect to be treated any differently than illegal foreigners in the US or Europe?”
• Chen Guangcheng rescuer He Peirong accused by fellow activists of hogging media limelight: Shanghaiist
  divided and conquered chinese dissidents and activists. two days ago several were having a fight on twitter about who was actual a chinese government agent. hopeless?
• China stimulus: a lightbulb moment | beyondbrics | News and views on emerging markets from the Financial Times – FT.com
  Stimulus ahoy! After the miserable economic data last week, and the RRR cut at the weekend, China has moved swiftly to boost domestic consumption.But don’t get too excited just yet, it’s not a repeat of the 2008 mega-stimulus. The latest step is to use Rmb26.5bn ($4.2bn) to subsidise the purchase of energy-saving white goods, like washing machines.Another Rmb10bn will go towards green cars, efficient machinery and the perennial green favourite, light bulbs.

• Philippines to drill at China-claimed reef
  A Philippine oil firm said on Thursday that it would start drilling in 2013 at a potentially massive natural gas field at a reef in the South China Sea also claimed by China
• Tencent Invests US$63M into KakaoTalk the Korean WeChat | TechNode | TechNode
  Tencent revealed in its latest financial report that the company has acquired 13.54% of Korean mobile communication app KakaoTalk with US$ 63.7 million. The deal was completed in last month.
  KakaoTalk, which supports iOS, Android, Blackberry and of course Samsung’s Bada platform, shares the similar functions that Tencent’s WeChat has, like free text messaging, stranger social networking, group chatting and so on. That’s why some see it as the Korean WeChat.
  As of now KakaoTalk boasts more than 42 million registered us
• Bo Xilai’s Ties to Army Alarmed Beijing – WSJ.com
  By visiting the military base in Yunnan province, Mr. Bo appeared to be flaunting his revolutionary ancestry and courting political support from the People’s Liberation Army at a time when his career was in crisis, according to Communist Party and military officials. “Bo’s trip to Yunnan caught people at the highest level off guard,” said one high-ranking military officer.
• Bo Xilai v Chen Guangcheng: Who is the mightier? | The Economist
  For 20 years, it has been more dangerous for the Communist Party to start political reform than it has been to put it off. The tipping point, when the reverse becomes true, may be at hand. Mr Chen would symbolise that shift.
  China has made extraordinary progress and does not always receive the credit it deserves for it from its watchers in the West. But the time has come now for leaders to lay out their vision for the next ten years. Their vision for China needs to be about more than roads and buildings and high-speed railways; it needs to concentrate more on people. Inherent tensions are starting to throw the inevitability of China’s rise into question. For all their success in building an increasingly modern country, China’s leaders have no broader vision for what they want their country and its people to be.
  Chen Guangcheng is just one peasant-activist. He may never have intended to get involved with high politics. It is no small irony that, when it comes to defining a society in which the government obeys the laws and individuals’ lives are to be respected, it is the blind man who has the clearest vision.
• Does He Guoqiang have unfinished business in Bo Xilai affair?｜Politics｜News｜WantChinaTimes.com
  A conspiracy theory doing the rounds suggests that the execution of Wen was not only a move to purge officials in Chongqing still loyal to He but also in revenge for the case of Wang Yi, the former deputy governor of China Development Bank. As a former secretary to Bo’s father, the Communist Party “immortal” Bo Yibo, Wang was considered a loyal associate of the Bo family but he was placed under investigation by He Guoqiang for corruption and then sentenced to death in 2008. The rumors therefore say Bo had Wen executed as a tit-for-tat move under the pretext of the “Strike the Black” campaign.
• Did Rupert Murdoch Crash The Wall Street Journal’s Bo Guagua Ferrari Story? | Sinocism
  What other China coverage has Rupert Murdoch meddled into? Yes, it is his paper, but…The good news, or bad depending where you sit, is that in China phone hacking is done by an even higher power than Murdoch.And why was Jon Huntsman gossiping to Murdoch about Bo Guagua? Perhaps because featly and gossip are keys to the heart of the man who controls the Wall Street Journal and Fox News, and when you are a GOP candidate for President you need to feed that beast?
• 知情人洪晃亲述：闹得沸沸扬扬的薄瓜瓜和红色法拉利内幕
• Red Ferrari, red herring: How WSJ backed down on Bo Guagua claim｜Politics｜News｜WantChinaTimes.com
  Hong said a friend of hers was hunted down by the Wall Street Journal who wanted her to confirm the truth of the Ferrari story, but her friend said she had not made the claim. The friend was nonetheless deemed to be the “source” to which the Wall Street Journal referred in its piece, though how she came to be cited as such is a somewhat convoluted affair. It is reported that the friend was the matchmaker who introduced Bo Guagua to Huntsman’s daughter. Huntsman allegedly mentioned the story to others, including media tycoon Rupert Murdoch. As Murdoch could not act as the source for a story run by one of his own titles, he dispatched his reporters to find other sources which led them in time to Hong’s friend.
• Figure in China’s Political Drama Found in Cambodia – NYTimes.com
  Throughout the drama this spring revolving around the dismissal of the ambitious Chinese official Bo Xilai and the investigation of his wife as a murder suspect, the most mysterious figure has been a French architect named Patrick Henri Devillers.
• Blame Canada – By Mark MacKinnon | Foreign Policy
  In December 2010, a trio of Western diplomats stationed in China — one each from Canada, Switzerland, and the European Union — drove from Beijing to the village of Dongshigu, eight hours away in Shandong province, hoping to visit the detained dissident Chen Guangcheng.
  No one has spoken publicly about what happened next. They did not mention the excursion itself, and certainly not the rough reception they received from the hands of the guards who prevented them from seeing Chen. But one person with knowledge of the incident used the words “roughed up;” another said the diplomats had been “threatened” by “thugs.” All three embassies declined to comment about what had happened in Dongshigu.
• China Slowdown to End in Third Quarter, Survey Shows – Bloomberg
  China’s economic growth is likely to accelerate for the first time in seven quarters after banks’ reserve requirements were cut, buoying global expansion threatened by Greece’s possible exit from the euro.
  Third-quarter growth will rebound to 8.3 percent from 7.9 percent this quarter, according to the median estimate of 21 economists surveyed by Bloomberg News. Analysts forecast a further reduction of 100 basis points in reserve ratios this year, while a majority of respondents expect benchmark lending and deposit rates to be unchanged.
• Hollywood Moves on China No Matter What SEC Probe Finds – Bloomberg
  Hollywood studios are moving ahead with plans to make and sell movies in China, a sign the industry’s push to expand in the third-largest film market will proceed without being slowed by a federal inquiry.
• A Chinese Composer Sounds Off About Music and Politics – NYTimes.com
  Ye Xiaogang, artistic director of the Beijing Modern Music Festival and one of China’s leading contemporary composers, is a quicksilver personality who laughs wryly, exudes determination and likes to dress in black.
• Man stabs foreign tourist in Beijing to publicize his case — Shanghai Daily
  A man who stabbed an American tourist in Beijing yesterday to draw media attention to his grievances has been detained, Beijing police said
• BBC News – The dual identities of Bo Xilai’s brother
  When Li Xueming joined the board of directors at a Hong Kong-listed company in 2003, little did he know he would eventually be engulfed by China’s biggest political scandal in decades.Among the reams of documents Mr Li had to sign when he joined China Everbright International was a routine declaration asking whether he had ever used another name.The businessman wrote “nil”, according to a person familiar with the document.

• How forgetful can you get? Chinese builders attempt to construct underground car park AFTER they finished original block of flats | Mail Online
  Developers working on a block of flats in China left residents open-mouthed after they began work on an underground car park – when the building above it was already finished.Worried that the move endanger lives, one man posted pictures online which show the work underway.
• Retired Party Members Call for 2 Top Chinese Officials to Resign – NYTimes.com
  Ian Johnson calls BS on the FT story about Zhou Yongkang’s alleged demotion?//
  Some reports have speculated that Mr. Zhou has already been stripped of power, although many party insiders doubt this. He has appeared at all major functions and recently made a major speech on the need for law to serve stability that was carried in official news media.

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