Yesterday’s note opened with the claim from a Weibo user that big news was coming. It came, sort of, though it was not about the Wang Lijun or Bo Xilai cases.

Xinhua first announced that CPC Central Committee Politburo met and urged the country to “deepen the reform of its technological system and accelerate the building of a national innovative mechanism.” There had been some concern that the apparent lack of a Politburo meeting since February 20 could be an indication of  turmoil at the top of the Party. Just the fact that a Politburo meeting was held, regardless of the officially acknowledged agenda, is possibly a sign things are back to “business as usual”. For reference, the People’s Daily maintains a list of Politburo meetings here, though it is not yet updated with the recent one.

Xinhua then announced that Former railways minister Liu Zhijun was expelled from Party for corruption. The official statement labeled him “morally corrupted” and said he “had taken a huge amount of bribes and bore the major responsibility for severe corruption in the railways system.” (Oh to see the salacious details of his case. The Viagra bill alone must have been huge..) Liu’s case is extremely complicated and involves many powerful people, so progression to the criminal stage is an interesting development.

Economic Observer wrote a good backgrounder on the Liu case in 2011–What Brought China’s Railway Minister Down?. Other railway officials have been detained, including one whose US home cost over 7m yuan. Naked officials, those whose families have gone overseas while they remain in China, appear in many corruption cases, as the Economist explains in Officials, looking for an exit strategy, send family and cash overseas.  Yesterday Bloomberg reported on new moves to deal with runaway Mandarins in China Tightens Officials’ Overseas Travel to Prevent Flight, though these rules seem a bit too little too late.

On Monday an M4.8 earthquake hit north China near Tangshan, then another M3.2 earthquake hit at 5 AM this morning. I did not feel either one, unlike the 2008 Wenchuan quake when our apartment swayed so much that we thought it was a Beijing earthquake. Tangshan of course was the epicenter of one of the deadliest quakes in history, in 1976, during a year of turmoil in China. Let’s hope this is not a sign of something bigger to come…

Credit Suisse Says a new China Stimulus May Be 2 Trillion Yuan and Bloomberg reports that China is Poised to Revive Cash-for-Clunkers Program. 2 trillion RMB a far cry from the 20 Trillion or so in fiscal and monetary stimulus in response to the 2008 financial crisis, but the government’s move indicates both how much the economy is deteriorating as well as the likelihood that the leadership has worked through the thorniest Bo Xilai distractions and is now functioning “normally”.

The Financial Times tells us that “over the last two weeks, Chinese consumers of thermal coal and iron ore have been defaulting on their contracts, sending prices sharply down” and offers two explanations. One is bearish, that a drop in demand means the Chinese buyers no need the commodities. The other is not so bearish, that they are just trying to negotiate better prices. Given how government policies leak here, I would bet that the buyers had a good idea a stimulus was coming, knew that prices might spike when that news hit, and decided to frontrun the stimulus and cut better deals.

I heard from someone familiar with the Macao casino scene that several of the major casinos are having a hard time collecting from the China junket operators because those operators are having trouble getting paid in China. Everyone seems to have “cash flow issues”, and according to my source it has gotten so bad at one of the big casinos that it has fired its entire China marketing team, blaming it for extending too much credit here. Perhaps the new stimulus will improve cash flows enough that the casinos can get paid.

In the “he probably wishes he had not said it” department, Army Brig. Gen. Neil Tolley, commander of U.S. Special Operations Forces in South Korea, made a strange disclosure at a recent conference, revealing that in order to learn more about North Korea’s underground tunnels “we send [Republic of Korea] soldiers and U.S. soldiers to the North to do special reconnaissance.” Tolley said the commandos parachute in with minimal supplies in order to watch the tunnels without being detected themselves. The recent book The Command disclosed that at some point in the past, no date given, “Operators from Delta Force and SEAL Team Six infiltrated China with the CIA and mapped the locations of Chinese satellite transmission facilities in the even that the United States ever needed to disable them.” What is Chinese for “badasses”?

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. You can also follow me on @niubi or Sina Weibo @billbishop. Feel free to recommend to friends or donate.

• Fake silicon bellies are pregnant with possibility|Society|chinadaily.com.cn
  It must have been a very fertile business mind that came up with the idea of selling fake silicon bellies to make the wearers appear pregnant.
• 教育部发文遏制超前教育：6岁学10以内加减即可_新闻_腾讯网
  Ministry of Education trying to crackdown on high pressure early education. kids should have fun in preschool, not cram
• 人民日报-深入学习认真贯彻修改后的刑事诉讼法 更好地惩罚犯罪保障人权维护社会秩序 周永康
  Page 1 lead in to large Page 4 display of a recent speech by Zhou Yongkang about amendments to criminal procedure law
• Chinese Local Official Rapes “Nearly One Hundred” Young Girls Before Capture | Tea Leaf Nation
  Li Xingong (李新功) also lived another life. In that life, he lured dozens of girls as young as 11 years old into his black, unmarked Chevrolet, where he would rape them. He promised payments to students at one of the city’s middle schools who could help find him potential victims. Finally, on the evening of May 8, 2012, Li was caught in the act and arrested.
• Is China finally confronting its dark history? – The Globe and Mail
  So it was a shock to readers of Southern People Weekly magazine to see the front page of last Monday’s edition: the words “The Great Famine” in a bold-lettered headline, over a graphic showing the plunge in China’s population over those terrible four years.It was followed by 18 pages of in-depth coverage, including black-and-white photographs of sobbing famine victims, and of farmers gathering leaves and tree bark for food.
• Moving the family abroad: Hedging their bets | The Economist
  Officials, looking for an exit strategy, send family and cash overseas
• Rescuing GDP Growth – Economic Observer
  More than 70 projects that the NDRC had planned for the second half of this year have been fast tracked for approval.
• M4.8 earthquake hits north China |Society |chinadaily.com.cn
• Foreigners will be faced with a question of identity|Society|chinadaily.com.cn
  Citizens of the ROK, the US, Canada, Russia and Japan were the top five nationalities involved in “three illegal” cases in 2011, according to the exit-entry administration of the Beijing Municipal Public Security Bureau.
  More than 20,000 “three illegal” foreigners were dealt with nationwide last year, according to Yang Huanning, vice-minister of public security.
• » Your Memorial Day Post: Revisiting H. Allen Larsen And Other Flying Tigers’ Amazing Color Photos Of China Circa 1944-45 Beijing Cream
• 自然人可注册“.CN”“.中国”-搜狐IT
• 721 foreigners get ‘green cards’ in Beijing |Society |chinadaily.com.cn
  A total of 852 foreigners have applied for “green cards” in Beijing since 2004, and 721 have been approved for the permits that grant them permanent resident status as of May 26, said authorities with the Beijing Municipal Public Security Bureau.
• REVEALED: Hundreds of words to avoid using online if you don’t want the government spying on you | Mail Online
  The Department of Homeland Security has been forced to release a list of keywords and phrases it uses to monitor social networking sites and online media for signs of terrorist or other threats against the U.S.
• Foreigners Under Fire | China Power
  My erstwhile publisher asked whether I would acquiesce to omitting some “sensitive material” and changing some wording. It sounded like an innocuous request until I got to the details. Since Koxinga is considered a “positive figure in China,” my publisher informed me that the text would have to omit any discussion of torture by him and his soldiers. (Descriptions of Dutch atrocities were acceptable, though.) The book couldn’t refer to Koxinga as a “conqueror” or a “warlord,” and his “restoration of Taiwan” couldn’t be referred to as an invasion or an attack. Similarly, any mention of resistance by Taiwan’s aboriginal peoples (who, historical sources make clear, rose up and killed thousands of his soldiers), would also have to be excised, on the grounds that such episodes hint of “some sort of consciousness of Taiwanese independence.” The Chinese publisher said that if I refused to make such changes, the translation wouldn’t proceed. “Abridgement,” I was told, “is unavoidable.”
• U.S. Forces Spy on North Korea | Flashpoints
  U.S. Special Forces have been parachuting into North Korea to spy on Pyongyang’s extensive network of underground military facilities. That surprising disclosure, by a top U.S. commando officer, is a reminder of America’s continuing involvement in the “cold war” on the Korean peninsula – and of North Korea’s extensive preparations for the conflict turning hot.
• South China Sea Is No Powder Keg | The Diplomat
  China isn’t looking for conflict in the South China Sea. Indeed, it already seems to be moderating its language over it its spat with the Philippines.
• Chinese Authorities Ban Chinese Alien Scenes in MIB3 » M.I.C. Gadget
  Chinese Moviegoers have found out that the duration of MIB3 only last for about 90 minutes in China theaters. The original movie should go for 103 minutes, according to IMDB (Internet Movie Database). Chinese viewers have realized they are not seeing some of the scenes from the trailer. There are three scenes have been deleted, the first footage is Agent K questioning a Chinese restaurant owner which is disguised by an extraterrestrial aliens. Next, Will Smith is attacked by a Chinese cashier girl with elastic green tongue. Lastly, Agent J is using a neuralyzer to wipe the memories of a group of Chinese in Chinatown, in order to maintain their secrecy.
• “There are cocoons growing in my ears!”: Hong Lei and Huang Shanchun’s responses to warmongering ‘netizens’ « southseaconversations 讨论南海
  Two weeks ago, with the state-inspired media wave receding, a timely fishing ban arriving to diffuse tensions, and China’s economic leverage and superior law-enforcement capabilities combining to put it on top in the dispute over Scarborough Shoal, the Foreign Ministry had a message for the world: the PRC authorities will continue to ignore public opinion on the South China Sea.
• Security researcher: I found secret reprogramming backdoors in Chinese microprocessors – Boing Boing
  Sergei Skorobogatov, a postdoc in the Security Group at the Computer Laboratory of the University of Cambridge has written up claims that reprogammable microchips from China contained secret back-doors that can be used to covertly insert code
• June 4 ‘could have been avoided’ | SCMP.com
  Former Beijing mayor Chen Xitong – one of the leaders blamed for the military crackdown on the 1989 pro-democracy movement in Tiananmen Square – now calls it ”a regrettable tragedy that could have been avoided” and downplays his role in the incide
• Analysis: Geography, not economy, counts in China’s rebalancing | Reuters
  the key question for investors is how Beijing can manage the investment and political risks generated by another two decades of development spending, when China’s urban population is expected to swell to 66 percent by 2030 from 51 percent in 2011.”China is large and disparate enough for industry to shift and take advantage of comparative advantages and cheaper labor elsewhere in the country,” said Eric Fishwick, head of economic research at brokerage CLSA.”But China’s scale implies continuing friction as policy
• Jacob Weisberg–Sina Weibo, Han Han, and Chinese censorship: Beijing’s new ideas for cracking down on debate and dissent. – Slate Magazine
  I visited Sina Weibo in Beijing last week, on a trip sponsored by the China-U.S. Exchange Foundation, a Hong Kong-based nonprofit that encourages positive relations between the two countries. Almost alone among the people we met with during our visit, officials at the company weren’t prepared to answer basic inquiries about their policies. They did, however, respond with alacrity to a question about whether their censorship efforts can keep pace with the rising volume of posts, emphatically insisting that they can. As a parting souvenir, they gave the members of my group what must be the perfect symbol of contemporary China: a doll version of their bleary Cyclops mascot, dressed in a People’s Liberation Army uniform.
• China Cracks Down on Web Critics – NYTimes.com
  One of China’s largest hosts of Twitter-like microblogs decreed new punishments on Monday for users who post comments that its editors — and by extension, China’s government censors — deem inappropriate.
  The service, Sina Weibo, imposed “user contracts” that award each of its 300 million microbloggers a starting score of 80 points.
• [toread] Catalogue of a crisis: Chinese food safety website Throw it out the Window crashes after getting 25,000 hits in two hours | chinadialogue
• The Associated Press: Watching dissidents is a booming business in China
  Mostly unknown outside their communities, the activists are a growing portion of what’s called the “targeted population” — a group that also includes criminal suspects and anyone deemed a threat. They are singled out for overwhelming surveillance and by one rights group’s count amount to an estimated one in every 1,000 Chinese — or well over a million.
  Targeted are growing numbers of people, from typical political dissidents to labor organizers and, increasingly, ordinary Chinese who want Beijing to correct local wrongdoing. In method, this new policing represents a break from recent decades.
• Chinese defaults prompt mystery – FT.com
  Analysts and traders have put forward two radically different theories – with almost opposite implications to global commodities markets: either Chinese buyers do not need the raw materials because weak demand and high inventories – a bearish scenario – or they need the shipments, but they are defaulting to take advantage of falling prices and they plan to rebook at a lower costs – neutral to bullish.
• Powerful ‘Flame’ Cyber Weapon Found in Middle East – NYTimes.com
  Security experts have discovered a new data-stealing virus dubbed Flame they say has lurked inside thousands of computers across the Middle East for as long as five years as part of a sophisticated cyber warfare campaign.
• India and China – ‘Double-Trouble’ for the U.S. – China Real Time Report – WSJ
  strange WSJ doesn’t mention George Gilboy’s day job? George J. Gilboy is chief representative, China, for Woodside Energy Ltd. of Australia. Before joining Woodside in 2005, he was the head of Strategy and Planning for Shell Gas & Power in China. Prior to joining Shell, he established the China office and consulting practice for Cambridge Energy Research Associates. He has been living and working in Beijing since 1995.//In short, to U.S. policy-makers worried about the long-term threat from China, India looks like a useful counterbalance.
  Not so fast, says a newly published book by George Gilboy, a researcher at the MIT Center for International Studies, and Eric Heginbotham, a senior political scientist at the RAND Corporation. “Chinese and Indian Strategic Behavior” argues that the benign view of India in Washington policy-making circles may be an illusion, rooted more in U.S. insecurity about China than a hard-nosed assessment of India.
• Insight – China Rises in Science, but Equation May Have Flaws – NYTimes.com
  The country has increased its spending on science at a blistering rate and now publishes the second most scientific papers in the world after the United States. Read the headlines and you might think that China is about to overtake the West.But China’s scientific progress is no sure thing. Interviews with Chinese scientists working in the West together with data from the OECD and some of the world’s leading science academies suggest restrictive political and cultural attitudes continue to stifle science there. International collaboration is harder from China, scientists say, while many still prefer to be educated in and live in the West.
• China Poised to Revive Cash-for-Clunkers Program, Official Says – Bloomberg
  China’s cabinet agreed to revive financial incentives for consumers to trade in their passenger cars to help increase demand in the world’s biggest vehicle market, a government official said
• China Stimulus May Be 2 Trillion Yuan, Credit Suisse Says – Bloomberg
  The Chinese government’s stimulus in response to the nation’s economic slowdown will probably be as high as 2 trillion yuan ($315 billion), half the size of 2008’s package, Credit Suisse Group AG said.
  Spending on investment will range from 1 trillion yuan to 2 trillion yuan, compared with the 4 trillion yuan stimulus enacted in response to the global financial crisis, Tao Dong, a Hong Kong-based economist, said in a research note today. The government actions will aid a rebound in growth that may slow to 7 percent or “slightly below” this quarter, Tao said.
• Premier Wen urges further opening up in service sector – Xinhua | English.news.cn
  Chinese Premier Wen Jiabao on Monday called for increased opening up in the country’s service sector and encouraged local service providers to go global to boost the industry’s share in foreign trade.
• CPC Central Committee Politburo urges deepening technological reform – Xinhua | English.news.cn
• Former railways minister expelled from Party for corruption – Xinhua | English.news.cn
  China’s former railways minister, Liu Zhijun, has been expelled from the Communist Party of China (CPC) after being found guilty of corruption, the CPC disciplinary watchdog announced on Monday.
• Another ousted China party chief challenges case against him | Reuters
  Chen Xitong was dismissed as Communist Party secretary of Beijing in 1995 and later jailed on corruption charges, which many observers at the time saw as resulting from a power struggle pitting him against then President Jiang Zemin…Chen gives a similar defense in a Chinese-language book of interviews to be published soon in Hong Kong. Reuters obtained an advance copy.”This was the worst miscarriage of justice involving a high-level leader since the Cultural Revolution, or since 1989 – it was an absurd miscarriage of justice,” Chen says of the corruption and abuse of power charges that brought him a 16-year jail term in 1998. Chen won medical parole in 2004.
• What Brought China’s Railway Minister Li Zhijun Down? – Economic Observer News- China business, politics, law, and social issues
  Good backgrounder from Feb 2011
• British woman facing death penalty after arrest on suspicion of trafficking cocaine in Bali – Telegraph
• CapitalVue News: Forty Percent Of Chinese Listed Companies Forecast Lower Earnings
• Foxconn receives orders for Apple TVs: sources｜Economy｜News｜WantChinaTimes.com
  Insider sources told China Business News that a Foxconn factory in Shenzhen has received orders for an Apple TV and is producing them on a trial basis.
• 铁道部原部长、党组书记刘志军严重违纪被开除党籍–时政–人民网
  looks like the big news predicted on weibo is about former railways minister liu zhijun, who has been kicked out of the Party, a precursor to criminal trial
  人民网北京5月28日电（记者姜洁）2011年2月以来，经中共中央批准，中共中央纪委对中共中央委员、铁道部原部长、党组书记刘志军严重违纪问题进行了立案检查。
• China to test submersible with 7km dive｜Politics｜News｜WantChinaTimes.com
  The Jiaolong, a deep-sea research submersible developed by China, will conduct a 7-kilometer trial dive at the Mariana Trench in the western Pacific Ocean this June, reports our sister newspaper China Times.
• 劫案背后 假出租车潜行_特别报道_新京报网
  fake cabbies behind a string of robberies in beijing
• China Yongda Scraps Hong Kong IPO Amid Weak Demand – Bloomberg
  China Yongda Automobiles Services Holdings Ltd. (3669) canceled its plans to raise as much as $430 million in an initial public offering in Hong Kong, two people with knowledge of the matter said.
• Update: China Econs Urge Policy Caution Despite Slowdown | MNI
  Chinese government economists have urged caution in the rush to ease policy, warning of inflation and bad loans that could come if credit conditions are loosened too quickly and too aggressively.
• FT Alphaville » Is Chinese real estate nearing a tipping point?
  Property developers in China face tough choices in 2012. Those companies with large maturing debts and refinancing risks on their offshore debt and trust loans are likely to push property sales by cutting prices aggressively or sell assets. As a result, we stand by our base-case forecast calling for average selling prices to drop by about 10% in 2012 due to rising inventory and liquidity pressure.
• Report: Massive Data Leak on Walmart-Backed Yihaodian Exposes Users | Tech in Asia
  Many customers of Yihaodian, the food-oriented Chinese e-commerce site that’s backed by Walmart (NYSE:WMT), have reportedly had their real names and other sensitive data leaked in a major breach of security on the websit
• How to unblock websites in China for web owners | GreatFire.org
  This is a play by play guide on how to unblocked your website from visitors in Mainland China without efforts on their side. Great FireWall of China is a complicated filtering system capable of blocking websites by a variety of methods. The common used ones are IP blocking, URL and Packet filtering by connection reset, TLS(SSL) certificate filtering by connection reset and DNS hijacking.
• Economics Asia | Brief – The World. In Brief | Bloomberg Newsletter
  $1495/yr
• China Tightens Official Travel to Prevent Flight – Businessweek
  China’s Communist Party will boost measures to make sure government officials don’t flee the country or transfer money abroad, the party said on its website.The Central Disciplinary Inspection Commission will set up a “flight-prevention coordinating mechanism” for every province and enhance “passport management” measures, according to a statement on the party website posted May 24, citing Gan Yisheng, vice secretary of the commission.

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