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Expectations continue to build that Xi Jinping will push for deeper reforms. I have been positive on the prospects, but the obstacles to progress are immense.
Corruption is rampant. A contributor to the Wall Street Journal suggests a test case to determine if the Party is serious about reform:
Arguments about the likelihood of reform in China tend to be highly speculative, made up of educated guesses based on the records and backgrounds of top leaders. But there is a simpler way to test the Party’s seriousness: Wait and see if the leadership makes a big move on the issue of asset declaration by cadres after the 18th Congress.
Asset declaration has been on the agenda for years, but it never seems to happen. Perhaps because, as one Chinese official suggested last year, disclosing official assets would cause chaos?
There is another sign that Xi Jinping may be a reformer, at least for those with a superstitious bent. A respected fortune teller’s prediction for Xi Jinping has apparently circulated among certain Beijing circles. In this foretelling, Xi in his first term will bring major reform to China, though the version I have heard is fuzzy on whether that means Western-style political reform or a reinvigoration of economic reforms with more intraparty democracy and transparency. The latter looks more likely.
Whether or not you believe in fortune telling (算命), you should consider that soothsayers’ predictions about Chinese politics are at least as reliable as China analysts’. (Remember all those predictions about Egypt, the Jasmine Revolution and China?)
Japan and China appear to be looking for an offramp to the current islands crisis, in spite of the ongoing rhetoric. Kyodo News reports that top diplomats from Japan and China secretly met in Shanghai to discuss the Diaoyu/Senkaku islands dispute. Li Keqiang met (China Daily) with former US national security officials who are visiting China and Japan in the hopes of “mediating” a resolution to the crisis.
The economic damage may already be done. Reuters surveyed Japanese firms and reports that as China tensions simmer “almost a quarter of Japanese manufacturers are rethinking their investment plans in China and some may shift future production elsewhere.”
Andrew Chubb, an Australian PhD candiate who blogs at southseaconversations, looks at how an average Chinese migrant worker became a “nationalist” rioter during the recent anti-Japan protests. Anti-Japanese sentiment can be good business for some. Check out these pictures of a “Resist Japan” tourist experience in an area of Shanxi that was once the headquarters of the Eight Route Army.
Today’s links:
BUSINESS AND ECONOMY
China real estate loans see rapid growth in Q3|Industries |chinadaily.com.cn – Financial institutions had 11.74 trillion yuan ($1.86 trillion) in outstanding loans to the real estate sector as of the end of last month, up 12.2 percent year on year, the People’s Bank of China said in an online statement. The growth rate was 1.9 percentage points higher than that of the end of the previous quarter
China Vanke Says Third-Quarter Profit Doubles as Sales Recover – Bloomberg – “In light of a rebound in transaction volume in the market, the company launched more projects during the second half,” it said in the statement. “Given that the number of projects to be launched in the fourth quarter will be relatively large, the company will undoubtedly achieve growth in sales.”
Nexen Sale Said to Turn on China Backing Canada Deals – Bloomberg – This list of deals by Canadian companies in China underscores that reciprocity will be part of foreign investment policies Prime Minister Stephen Harper’s government will release soon, said the person, who spoke on the condition of anonymity because the discussions aren’t public. He declined to say what transactions were on the list. Another person with knowledge of the matter said Canada is seeking concessions from China before agreeing to the Nexen deal.
China Cosco Chief Says Shipping to Expand as Economy Picks Up – Bloomberg – politically correct?// “We’re only beginning to see signs of recovery,” China Cosco Chairman and Chief Executive Officer Wei Jiafu said in an interview at the Tsinghua Management Global Forum in Beijing yesterday. “Premier Wen said the Chinese economy has seen a turning point in the third quarter, and it is bullish news for the shipping industry.”
Pimco Prepared to Reduce Emerging-Market Corporate Debt on China – Bloomberg – prepared to cut its holdings of emerging-market corporate debt next year on concern a flood of new sales and further economic slowdown in China will put an end to a 12-month rally in the securities.
China Economic Watch | China Rebalancing Update – Q3 2012 – The third quarter showed a slight improvement for China in terms of rebalancing indicators. While there were no major changes, things continue to move in the right direction, albeit more slowly than optimal. One lingering question is the extent to which this rebalancing is the result of weak GDP growth. A sharp pickup in growth next year, especially if it’s driven by stimulus-funded investment, could undo some of the progress that has been made.
China’s willing workers not quite as willing as before – The Globe and Mail – “These days, people don’t look for jobs, the jobs look for people,” said a 21-year-old recruiter for a shoe factory who only gave her family name, Jia. She said she had been standing on the street all week with a sign promising workers 85 yuan (about $13.37) a day, but that few had expressed interest.
China’s banks and shadow banks – 张化桥 – 名家博客 – 博客 – 财经网 – My name is Joe Zhang, and I am a director of Wansui Micro Credit in Guangzhou. I’d like to speak about China’s banks and shadow banks from a regulatory perspective, and then highlight a few investment opportunities.
一线城市房租上涨加速 白领月入6千压力大_国内财经_新浪财经_新浪网 – resi
潘石屹微博惹争议 交易时间贺江河幕墙中标|潘石屹|微博|江河幕墙_21世纪网
China’s Luxury-Property Bust Stings J.P. Morgan – WSJ.com – who were JP Morgan’s Dalian partners? // SHANGHAI—A luxury apartment building that is one of the most visible casualties of China’s high-end property bust is up for auction in the northeast city of Dalian, after a bank foreclosed on the property. The 48-floor Park Central was owned by a fund run by J.P. Morgan Asset Management, which invested $80 million in the property. But the asset manager lost the property when U.K.-based lender Standard Chartered PLC, which provided the majority of a roughly $140 million loan, foreclosed over the summer
Gao Ping: the emperor and his clothes | In English | EL PAÍS – Gao, who was arrested on Tuesday as part of an early morning nationwide sweep, is said to be the ringleader of one of the biggest money laundering operations ever seen in Spain. So far there have been 84 arrests, most of them Chinese nationals. They are accused of laundering up to 300 million euros a year.
China Bans Foreign Ships From Rivers as Local Operators Struggle – Bloomberg – Overseas investors will also be barred from engaging in river shipping, including through the use of Chinese vessels, according to a statement posted on the government’s website yesterday. The ban, which comes into effect Jan. 1, doesn’t apply to vessels registered in Hong Kong, Macau and Taiwan.
Gov.’s Debt Ratio Reaching an Alarming Level: Report-Caijing – About 42% of the local government debts are coming due by the end of this year and about 53% due by the end of 2013, said the report alerting risks lurking in China’s finanical system.
Subway Construction Falters Amid Safety Hazards -Caijing – notice there have been no reports of accidents during construction of beijing subway in several years?// All aspects of subway construction, from preliminary survey and design, to middle term construction, to late stage management and the establishment of construction standards, are in dire need of further improvement. Despite this, subway line construction in China is still proceeding full steam ahead. “In the future, subway accidents will become commonplace. Problems are inevitable,” said Xue Dawei, head of the Traffic Engineering Department at Heilongjiang Institute of Technology.
China’s Slowing Economy Puts Pressure on American Exporters – NYTimes.com – “There’s definitely been an effect from slowing exports to China on U.S. exports,” said Dean Maki, chief United States economist at Barclays. According to his analysis, the drop in exports to China alone is responsible for shaving 0.1 to 0.2 percentage point off the growth rate for the American economy, which expanded at an annualized rate of 1.3 percent in the second quarter.
POLITICS AND LAW
China hints at reform by dropping Mao’s legacy | Reuters – this reports may be premature, not clear that this conclusion can be drawn from one release, also not clear that previous releases all contained this language// “It’s very significant,” Zheng Yongnian, the director of the East Asian Institute at the National University of Singapore, said of the removal of a reference to Mao Zedong Thought and the implications of that for the direction leaders were taking.
中央党校副校长陈宝生：政治体制改革要理直气壮地讲–理论–
China Voice: Public scrutiny forces officials to behave – Xinhua | English.news.cn – Internet, esp BBS and microblogs, are the bane of corrupt, local, expendable officials// A deputy provincial governor in central China has met fierce criticism from netizens after pictures of him walking on a red carpet during a construction site inspection were posted on the Internet…The idea of a high-ranking official behaving like a pop star, complete with expensive clothing and a large entourage, upset many Internet users.
信仰 搜库-专找视频 – “Faith”, or “Conviction”, or “Belief”, the documentary on Party history that all cadres are watching/studying //《信仰》以党的90多年光辉历程为背景，通过讲述革命、
人民日报-学习《信仰》 树立信仰 践行信仰 ——历史文献纪录片《信仰》反响热烈 – People’s Daily on the documentary all the cadres are/should study “Faith”, or “Conviction”, or “Belief”
人民日报-生态文明：永续发展的中国探索（科学发展 成就辉煌·十年回眸·重大战略） – page 1 people’s daily on “ecological civilization”..sure looks like something about this/”conservation culture” that will be in the upcoming party congress work report
FOREIGN AND DEFENSE AFFAIRS
Breaking down the China debate | Marketplace.org –yours truly interviewed, should have noted the one change in China policy from Obama’s general adherence to policies of past 30 years is the “pivot to Asia”
Obama contradicts Clinton, calls China an ‘adversary’ | The Cable– Secretary of State Hillary Clinton appears to agree with Romney, not her boss. She’s said on several occasions that China is not an adversary and doesn’t have to become one.”Now, some believe that China on the rise is, by definition, an adversary. To the contrary, we believe that the United States and China can benefit from and contribute to each other’s successes,” Clinton said in one her first speeches in office in 2009.
Chinese Watch Debate Online, Take to Sina Weibo With Commentary – WSJ.com– Zhu Feng, an expert on U.S.-China relations at Peking University in Beijing, said that despite Mr. Romney’s currency-manipulation call, the two sides appeared to basically agree on China policy. “They both claimed they wanted to focus more on urging China to play fair on economic and trade issues,” Mr. Zhu said. “That’s something they really care more about now than human rights or security.”He said he didn’t expect much official reaction from Mr. Obama’s use of the word “adversary” to describe China, saying it reflect broad attitudes in Washington toward Beijing.
The Foreign-Policy Presidential Debate: China, Trade, and Human Rights : The New Yorker – But the most surprising fact about the debate’s discussion of China—and the one that tells us the most about the new relationship taking shape the world’s two greatest powers—was that neither candidate in uttered the words, “human rights” in relation to the People’s Republic. That used to be a standard feature…the erosion of human rights from the candidates’ priorities will be taken as a sign, as foreign-affairs specialist Zhu Feng put it, that economic issues are “something they really care more about now than human rights or security.”
Obama Debate Language Hints at Nature of China Relationship– Security analyst Gregory Kulacki, a China Project manager at the U.S.-based Union of Concerned Scientists, tells VOA he thinks Obama’s comments offered a subtle insight into the nature of the complicated U.S.-China security relationship.”There is no way of knowing. But I do think it is interesting that he chose to use the word ‘adversary’ in combination with the word ‘partner.’ ‘Adversary’ is a term used in a military or security context,” says Kulacki. “And he used the word ‘potential partner,’ which shows that he really doesn’t think that China is a partner now.”
Why Don’t Chinese-Americans Matter in the Election? – Caixin – While Jews have a large influence on U.S. politics, Asian groups have very little say, despite some efforts to change this
Opinion Journal: Candidates ‘Getting Tough on China’ – WSJ.com – Mitt Romney professes to believe in free trade, except with China, where he reverts to mercantilism. During Monday’s debate, the former manager of multinational investments doubled down on his pledge to label China a “currency manipulator” on day one of his Presidency. Like the dog that catches the bus, the puzzle is what he would do on day two.
China opens new consulate general in northeastern Thailand – Xinhua | English.news.cn – China officially opened a new consulate general in Khon Kaen in northeastern Thailand on Tuesday.
Chinese state councilor visits Vietnam to cement bilateral ties – Xinhua | English.news.cn – Chinese State Councilor Meng Jianzhu arrived in Vietnamese capital Hanoi on Tuesday for a three-day visit to strengthen bilateral ties and promote cooperation in law enforcement between the two countries.
Cambodian Workers at Chinese Factory Protest Disrespect to Late King – NYTimes.com – A Chinese factory supervisor who caused an uproar by tearing up a poster of Cambodia’s late King Norodom Sihanouk was transferred Tuesday to a city court where she could face formal charges for insulting the monarchy and inciting public disorder.
Beijing Shakes Up Military Leadership Ahead of Congress – WSJ.com – “The point is that it’s not Liu Yuan,” said Steve Tsang, professor of Contemporary Chinese Studies at the University of Nottingham in Britain. “This also shows that we’re at the stage where they’re getting into agreement on the new CMC. What we still don’t know is whether Hu Jintao will stay on as its head,” he said.
Devastating power of China’s J-15 ranks high in the world – People’s Daily Online – Du Wenlong, senior colonel and researcher of Chinese Academy of Military Sciences, told the reporter in an interview, “First, it is a heavy-duty carrier-based aircraft, which means that it has larger flying range and bigger bombs and fuel load, and its control range and devastating power rank high in the world. In addition, from the basic equipment of the heavy-duty carrier-based aircraft, the J-15 is compatible with various kinds of ammunition and has any functions a standard foreign carrier-based aircraft owns. The J-15 aircraft is able to accurately and efficiently run on the aircraft carrier and is also an important sign of integrated sea-air combat force of Chinese navy until now.”
HONG KONG AND TAIWAN
Nursing Home Fire in Taiwan Kills 12 and Injures 60 – NYTimes.com – An early morning fire tore through a nursing home in a hospital in the southern city of Tainan on Tuesday, killing 12 people and injuring 60, many of them too weak to get out of their beds to escape. The police said a nursing home resident had confessed to setting the fire.
TECH AND MEDIA
Tencent’s online video business to be profitable in two years|Business|chinadaily.com.
SOCIETY, ART, CULTURE AND HISTORY
文物投机高烧不退风险积聚 深度报道——经济参考网 – speculative fever in antiques not abating, risks increasing, fakes abound…
ENERGY, ENVIRONMENT AND HEALTH
China Sells Just 235 Electric Cars in Second Quarter, Report Says – – Chinese makers of electric cars sold only 235 units globally in the second quarter, down 31 percent from the first quarter, a McKinsey & Co. report released on October 22 said.The 31 percent decline was the highest among the countries in the repor
59 people hospitalized over suspected food poisoning in NW China – Xinhua | English.news.cn – The sickened, including 56 children and three teachers, showed symptoms of food poisoning after eating breakfast at the Jinxiu Kindergarten in the Jinfeng District of Yinchuan, capital of Ningxia, said Ma Rulin, director of the municipal health bureau.
FOOD AND TRAVEL
All IDs to be checked on trains to Beijing – People’s Daily Online – Starting Oct 23, passengers taking trains to the capital city, Xinjiang Uygur autonomous region and Tibet autonomous region will all go through identification checks before boarding, according to the Shanghai Railway Bureau.
The best way to see this daily post is to subscribe by email. You can also follow me on Twitter @niubi or Sina Weibo @billbishop.