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Yesterday Xi Jinping pledged renewal of the nation (South China Morning Post) in a speech that was carried on CCTV and widely covered in official media (Xinhua English, People’s Daily):
In the nationally televised speech (here, no subtitle, ten minutes long), carried by state broadcaster China Central Television’s prime-time news last night, the president-in-waiting appealed to the nation and its people to unite under the party’s new leadership and achieve what he called “China’s renaissance”.
“We are at the closest point towards the Chinese nation’s renaissance than any time in modern history … and I am sure we will accomplish our goal,” Xi, 59, said as the other six members of the party’s supreme Politburo Standing Committee and members of the party’s secretariat, its nerve centre, stood by his side.
The Xinhua commentary New leadership shows resolve to realize “Chinese dream” flowed from Xi’s remarks:
Xi Jinping, the newly elected general secretary of the Central Committee of the Communist Party of China (CPC), and the other six members of the seven-seat Political Bureau Standing Committee, visited “The Road Toward Renewal” exhibition on Thursday…
China is set to build itself into a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious when the New China marks its centennial. With arduous efforts of the Chinese people, the dream of the Chinese nation’s great renewal will surely be realized.
I have noted what appears to be greater emphasis by Xi Jinping on nationalism and the “great renewal of the Chinese nation” and would not be surprised if it is part of a strategy to use nationalism as a cudgel in a corruption campaign and an assault on some of the entrenched special interests:
Watching Xi’s [November 16] remarks I was struck by his three references to “中华民族伟大复兴” (translated as “great renewal of the Chinese nation” or “great Chinese renaissance”) and his omission of most of the standard ideological benchmarks.
“中华民族伟大复兴” is not a new term and has historically been used by Deng Xiaoping and many others as the justification for reform. On November 15 Xinhua in 述评：循序渐进，中华民族复兴路线图清晰可见
Xi’s repeated mention of this goal may be another sign that will see a more nationalist China during his rein. The Party knows it needs more than “Scientific Development”, “The Three Represents”, “Marxism”, “Mao Zedong Thought” or “Socialism with Chinese Characteristics” to justify its rule.
And that is why I think we will see attempts at reforms, though nothing like the political reforms Westerners and liberal Chinese hope for. The great renewal of the Chinese nation will not happen without significant changes to the economy, and a real crackdown on corruption (calling Wang Qishan…) Some will argue that it will also not happen without wholesale political reform, but Xi Jinping and the new leadership are unlikely to agree.
Expect Xi Jinping to be a reformer, but possibly a hardline nationalist one. Be careful what you wish for?
Not everyone thinks this is anything more than a reiteration of tired propaganda. Dr. Greg Kulacki notes in China’s New Leaders May Surprise Obama (All Things Nuclear) that:
Having consumed nearly thirty years of Chinese Communist Party propaganda, I don’t believe Xi’s reiteration of a long-standing CCP talking point represents a dramatic departure from past practice. Those concerned about Xi’s choice of words should watch the 2007 CCTV 6-part series The Road to Renaissance (复兴之路).
We discussed the debate about whether or not there is significant capital flight back in October, after the Wall Street Journal wrote in billions in cash flows out of China’s closed capital system that “in the 12 months through September, about $225 billion flowed out of China, equivalent to about 3% of the nation’s economic output last year.”
Two of Michael Pettis’ students take a more sanguine view in yesterday’s is capital flight taking place in China?:
Taking all into account, we believe the FX position change of Chinese companies was mainly responsible for the capital account deficit, which was not really any sign of losing confidence in Chinese economy. We agree with the SAFE that capital account deficits should not be regarded as capital flight
Capital Economics also has a new research note out and they too are not particularly concerned about rumors of capital flight:
The key point is that the slowdown in foreign exchange accumulation by the PBC has happened because of an increase in the appetite of Chinese firms to hold foreign currency assets. But that appetite may already be fading in the face of the renminbi’s recent appreciation. It could in principle give way to some other form of capital outflow – a surge of illicit outflows is one possibility but there seems little sign of that. Otherwise, the PBC will have to step up foreign exchange purchases once again if it wants to stop China’s still-large current account surplus driving significant renminbi appreciation.
However, I keep hearing about how busy the private bankers are trying to help clients funnel money out of the country. So what is going on?
My guess is that there has always been some capital flight and it has increased this year due to economic concerns, Bo Xilai’s downfall, leadership transitions at many levels and the expectation at least among the smart money that the new administration would have to launch, at least for a little while, a fairly serious anti-corruption campaign (as Duowei again argues is imminent in 清党整风成新决策层上任首务 习王联手“打虎”). However, reports of an impending crisis are likely overblown.
The Duowei article notes that Wang Qishan may be an inspired pick as his finance background helped him learn all the ways corrupt officials try to steal money and get it out of the country, and it sure looks like preparations are underway for a new rectification/anti-corruption campaign. In the face of massive corruption, is increasing emphasis on nationalism the best way for the Party to maintain any legitimacy?
Speaking of legitimacy, Daniel Bell, already having a bad week, was just eviscerated by The China Media Project in for whom Mr. Bell tolls:
I don’t want to occupy space here explicating Bell’s ignorance on both sides of this issue. This should be as clear to Bell himself as it is to journalists and communications scholars on both sides of the fence he has unfairly raised.
Let me just say there is no such thing as “the Chinese way of reporting news” — something, time permitting, we will address in the next few days. There is such a thing as the Marxist View of Journalism. But the View has nothing to do with “balanced accounts” or avoiding deceptive geniality.
If you are interested in understanding China’s Internet you should read the IDG-Accel 2012 China Internet White Paper (PDF). While the fund may naturally have a bias towards its portfolio companies, this is the best brief on China’s Internet I have seen in a long time.
Today’s links:
BUSINESS AND ECONOMY
Li Keqiang: China’s Future Development Relies on Urbanization-Caijing – China’s premier-in-waiting Li Keqiang said Thursday the biggest development potential lies in the process of urbanization, in a country where about half of its people are still living in rural areas decades after the biggest urbanization wave in history started. The vice premier made the comment at a meeting with World Bank President Jim Yong Kim in Beijing on Wednesday, according to the official Xinhua News Agency.
Highlights of Caijing Annual Conference–Update Ⅱ-Caijing –
Germany displaces China as US Treasury’s currency villain – Telegraph The US Treasury has issued a damning criticism of Germany’s chronic trade surplus in its annual report on worldwide exchange rate abuse, although it stopped short of labelling the country a currency manipulator…The US Treasury’s shift in focus away from China – and towards Germany’s disguised mercantilism – reflects mounting irritation in Washington over North Europe’s “free-rider” strategy, which relies on exploiting global demand rather than generating it at home.
China’s Stock Market: Of Bears and Rabbits – China Real Time Report – WSJ The market appears to be headed for its third straight year of losses – not just a little bit of market correction but big dollops of downside direction. The Shanghai index is lagging by roughly 10% so far this year after losing 22% last year and 14% in 2010. The average daily turnover on China’s stock markets has been 68.4 billion yuan ($11 billion) over the first three sessions of this week, below the average of 101.4 billion yuan in October, which was the lowest month so far this year.
China Economic Optimism Returns in Poll as Xi Beats Hu – Bloomberg – Confidence in China’s economy is at the highest in more than a year amid optimism that the new leadership headed by Xi Jinping will be better for the financial climate, according to a Bloomberg investor poll. Respondents who see the Chinese economy improving or remaining stable surged to 72 percent this week from September’s 38 percent in the quarterly global poll of investors, analysts and traders who are Bloomberg subscribers. Fifty-three percent said they’re more optimistic about the effect of Xi’s policies on investors, up from 42 percent who were asked in September about President Hu Jintao.
Chow Tai Fook Profit Misses Estimates on Hedging, Demand – Bloomberg – going to get much worse if there is a real anti-corruption campaign//Unrealized hedging loss on gold loans and bullion forward contracts caused gross profit margin to decline by about 2.7 percent in the fiscal first half, the company said. Chow Tai Fook is expanding in China even as economic growth slows and third-quarter gross domestic product rose at its slowest pace in three years. Same-store sales fell 1.7 percent.
UPDATE 1-Yum says key 4th-qtr sales in China to fall | Reuters – The last time Yum reported a decline in same-restaurant sales for China appears to have been in the fourth quarter of 2009, when those sales fell 3 percent in mainland China, according to Yum’s financial reports.
China North East Petroleum Accused of Fraud in SEC Lawsuit – Bloomberg – The government claimed in a complaint filed today in Manhattan federal court that insiders made $59 million without proper disclosures. Starting in 2009, Wang Hongjun, CNEP’s president and chief executive officer, and a company founder, Ju Guizhi, engaged in “numerous undisclosed, related-party transactions” involving the company, the SEC said.
Mr. China Comes to America – James Fallows – The Atlantic For decades, every trend in manufacturing favored the developing world and worked against the United States. But new tools that greatly speed up development from idea to finished product encourage start-up companies to locate here, not in Asia. Could global trade winds finally be blowing toward America again?
Local Gov’ts Angle for Slice of Rail Projects – Caixin – does Beijing have a K Street? // Provincial government officials are making their final sprint to win support for railway projects, as the Ministry of Railways (MOR) draws closer to announcing next year’s budget. Since November 22, leaders from Jilin and Liaoning provinces and Tibetan Autonomous Region have visited the railway minister Sheng Guangzu, requesting the ministry to step up support for railway projects under their administration, a source from the ministry said.
POLITICS AND LAW
China’s Push for Stability Undermines Law, Sociologist Says – Bloomberg The Chinese government’s emphasis on maintaining stability has undermined rule of law in the country, leading local officials to “do evil,” Tsinghua University Professor Sun Liping said at a conference in Beijing today. China has been moving away from the rule of law in the last couple of years as local officials push to enforce limits on childbirth and reach tax collection quotas, Sun, 57, one of the country’s best-known social scientists, told the Caijing Annual Conference in Beijing.
Chinese lawmaker makes urgent call for rural land reform | South China Morning Post – Chen Xiwen, director of the Communist Party’s Central Rural Work Leading Group, told an economic forum in Beijing that reform of the land requisition system and the entire rural land system was imperative to protect farmers’ rights
CHINASCOPE – Scholar: Low Compensation for Land Acquisition a Cause for Social Conflict – Zheng Fengtian, a professor at Renmin University of China said that the major problem with China’s rural land acquisition is that the standard for compensation is too low. A survey conducted by the Development Research Center of the State Council found that 40 to 50 percent of the value-added part of land acquisition goes to investors, 20 to 30 percent goes to the local government, 25 to 30 percent goes to the village organizations (grassroots government body), and the farmer who sold the land receives only 5 to 15 percent of the entire pie.
China Matters: Lei Zhengfu Tape Correction: The Wrong Girl! – The incomparable Roland Soong of EastSouthWestNorth turned his critical eye on the webstorm surrounding the Lei Zhengfu sex tape and posted a notice that the girl depicted in the various pictorial pastiches being circulated (such as the “Lei Zhengfu as Jabba the Hutt” japery I posted on a couple days back) is not the girl in the tape. She’s a student in Xiamen who has nothing to do with the shenanigans in Chongqing
雷政富的政商生意经 – 国内 – 南都周刊 Lots of details about the Lei Zhengfu history in Chongqing
大连富豪富彦斌神秘失踪调查：曾在重庆包揽多项工程|富豪|
FOREIGN AND DEFENSE AFFAIRS
U.S. Not Neutral About Japan, Armitage Told Beijing – Japan Real Time – WSJ We’re not neutral when our ally is a victim of coercion or aggression or intimidation,” said Mr. Armitage in an interview, referring to Japan.
Here’s the Chinese passport map that’s infuriating much of Asia –
Chinese buy farms for food – The West Australian– China’s biggest agricultural conglomerate is buying big parcels of prime land in the State’s south as part of its plans to invest up to $4 billion creating a supply chain direct from WA farms to the Chinese food bowl. The Beidahuang Group, ultimately owned by the Chinese Government, wants to buy and lease more than 100,000ha to grow grain for export direct from WA to China.
China’s Misguided Hugo Chávez Love Affair–The Diplomat – good piece from Matt Ferchen, a resident scholar at the Carnegie-Tsinghua Center for Global Policy// China’s blithe optimism about the impact of continued Chávez dominance of Venezuelan politics sits uncomfortably with a growing anxiety about the effectiveness of the country’s political stability. This anxiety is directly related to the dramatic political changes in places like Libya and Burma over the last 18 months or so. Many in Chinese diplomatic and academic circles lament that the Chinese government and firms were caught off guard, and on the losing end of regime change in Libya in 2011 and by Burma’s ongoing political transformation.
Matt Ferchen – Carnegie Endowment for International Peace – Qinghua does have some very sharp foreign scholars, wish western media would run more opeds from people like him…// Matt Ferchen is a resident scholar at the Carnegie-Tsinghua Center for Global Policy, where he runs the China and the Developing World program. His research focuses on the governance of China’s urban informal economy, debates about the “China Model” of development, and economic and political relations between China and Latin America.
Report: N. Korea’s Defense Chief Replaced by Hawk | Defense News | defensenews.com– North Korean leader Kim Jong-Un has replaced his defense chief with a hawkish general in a shakeup apparently aimed at tightening his grip over the military, a report said Nov. 29. Vice Marshal Kim Jong-Gak was sacked as defense minister after just seven months in office, Yonhap News Agency quoted an unnamed senior South Korean presidential official as saying.
Chinese officials will board, seize ships in disputed waters – CSMonitor.com – Beginning January 1, Chinese police will board and seize control of foreign ships which enter waters that are the center of a territorial dispute between multiple Asian nations.
Michigan Couple Stole GM Secrets for Chinese, U.S. Says – Bloomberg – A former General Motors Co. (GM) engineer and her husband should be convicted of stealing the automaker’s trade secrets related to hybrid-car technology to help develop such vehicles in China, a U.S. prosecutor said at the end of their trial.
China refutes assertion of copycat jet technology – Xinhua | English.news.cn– A spokesman for China’s Defense Ministry has countered suggestions that the development of China’s carrier-borne fighter jet copied U.S. technologies. China sticks to independent innovation and has the capacity to build and develop its own aircraft carrier, said Geng Yansheng in response to a question at a press conference on Thursday.
CPC report to guide future development of int’l relations – People’s Daily Online – Hu Jintao’s report to the 18th National Congress of the Communist Party of China has provided a clear and profound answer to questions about China’s principles, role, and goals in international relations.
Expert: China needs at least three aircraft carriers – People’s Daily Online – China should own at least three aircraft carriers in order to accomplish sea combat missions and fulfill international obligations, Chinese naval expert Li Jie said while communicating with the users of People’s Daily Online’s Qiangguo Forum on Nov. 27.
US-Myanmar ties: beware the backlash-Josh Gordon-Myanmar Times High expectations also cluster around improvements that Western companies will bring to business practices in Myanmar. The hope is that the contrast with what noted Mandalay writer, Daw Ludu Amar, has called the lawpan khit, or “era of the Chinese boss”, will be stark. Myanmar’s reliance on China for imports of finished goods, infrastructure development and energy investment has brought to the fore resentment about how Chinese businesses operate in the country.
HONG KONG AND TAIWAN
Next Media buyout confirmed, Want Want chairman takes 32%｜Culture｜News｜
TECH AND MEDIA
Businessman’s Murder Sparks Industry Scrutiny on Company -Caixin – The killing of a businessman helming an online loan company has turned the spotlight back on the lack of regulations over peer-to-peer financing companies. An executive at Rowerp2p said the firm has appointed a new president and all client accounts remain ‘normal.’ An industry insider said the death of Wang Huishi, former president of the P2P firm Rowerp2p.com, in October could be related to a business conflict.
How China’s Web Censorship Is Driving Traffic to a Miami Pet Spa Website– Chinese authorities are employing all kinds of techniques to prevent their population from seeing the real web. Often that involves subtle tricks, like giving the appearance of a slow internet connection. But sometimes the country uses DNS poisoning, which employs cheeky redirection to throw up a website that wasn’t requested. In particular, a Miami pet spa, known as The Pet Club, is one of the chosen sites
Qihoo 360’s Zhou Hongyi: Taking Aim at China’s Internet – WSJ.com – paywalled, google backdoor not working on it//
Android, China and Addressable Markets – Forbes – The smartphone market in China is exploding. Depending on who you talk to, there were anything from 40-50m smartphones sold in the last quarter, compared to around 19m in the USA. Combining Baidu and CNNIC data, it looks like there were around 180m smartphones in China in Q2, of which 65m were Nokia Series 60 (a rapidly shrinking base), 30-35m were iPhones and about 80m were Android. Running the growth forward, there are probably now 120-130m Android phones in China.
Xmas Surprise: Why China Is Spending More Online Than the U.S. | Alizila: News about E-commerce, Alibaba Group, China’s Internet, Alibaba.com and Taobao – tough for brick and mortar retail everywhere, combine with that retail overbuilding in china…//According to a recent report by Macquarie Equities Research, online retail sales in China will grow from about $125 billion in 2011 to $445 billion in 2015, recording a compound annual growth rate of 35 percent over that period. U.S. online spending will rise at a much slower pace, growing from $188 billion in 2011 to $270 billion in 2016, Macquarie projects. China will soon overtake America in gross annual online spending, and may even achieve that feat this year.
SOCIETY, ART, SPORTS, CULTURE AND HISTORY
Female doctor axed to death in Chinese hospital – Telegraph – A female doctor has been axed to death by a patient in the northern Chinese city of Tianjin in the latest act of violence in the country’s hospitals.
Aids patients march through Beijing | South China Morning Post– More than 100 HIV/Aids patients from Henan, where future premier Li Keqiang held senior government or Communist Party posts for six years, took to the streets of Beijing yesterday, calling on the party’s new leadership to meet their demands for more attention and better care.
China’s Aids crisis lingers over country’s new leaders – Telegraph – Nor is he the only victim. Between 50,000 and 300,000 others were also mistakenly infected with HIV in Mr Wang’s home province of Henan in the 1990s, in one of the biggest medical scandals of all time. There are no official figures because the Chinese government has never admitted or apologised for what happened. And the man who led the cover-up in Henan has just been anointed as China’s new prime minister: Li Keqiang. Now that Mr Li has reached the apex of power, he appears keen to fix the worst stain on his political career.
Chinese AIDS patients fight hospital rejections – AP -In this Nov. 22, 2012 photo, Meng Lin, coordinator of China Alliance of People Living with HIV/AIDS, talks during an interview in his office in Beijing, China. In China, hospitals routinely reject people with HIV for surgery out of fear of exposure to the virus or harm to their reputations. After years of denying AIDS was a problem in China, the country has significantly improved care for patients, but the lingering stigma sets back those advances.
Chinese family planning official denies changes to one-child policy considered – – MorningWhistle – Zhang Jian, director-general of the Department of Publicity and Education with the National Population and Family Planning Commission, told Sina.com on Thursday that the institution’s former Director Zhang Weiqing’s remark about the changes to one-child policy is not accurate.
China’s Imperial Plagiarism – By Jack Carlson | Foreign Policy – did the author talk to any of the developers or buyers of these projects? talk about over-analyzing// The First Emperor built the greatest superpower in the known world, and he created a monumental vocabulary to articulate this supremacy. Now modern China, consciously or not, is marshaling his symbolic language to convey its burgeoning global primacy.
Paris on the Yangtze – An FP Slideshow | Foreign Policy – A look at the Western villages and monuments that are popping up all over China.
ENERGY, ENVIRONMENT AND HEALTH
京沈高铁遭遇“环评门”：北京沿线居民要求改线|北京|
Toxic Effects and Environmental Nondisclosure – Caixin Editorial – Maintaining ‘social stability’ is no longer a valid excuse for hiding pollution data from the public
Call for wild animals off menu |Society |chinadaily.com.cn– Animal rights campaigners are calling on the Chinese people to lose their taste for wild animal meat, as the government carries out a major crackdown on poaching nationwide. On Thursday, China Wildlife Conservation Association signed a public appeal urging people to refuse to put wild animal meat on dining tables, saying the increasing consumption is at the root of poaching and illegal trading
Train rolls into Xinjiang’s isolated region[1]|chinadaily.com.cn– Prior to the operation of the railway, Lop Nur’s only link to the rest of the country was a six-year-old highway. The 374.8-km railway is widely considered vital for accelerating mining of the abundant potassium-rich salt in the region to boost the country’s ability to meet its own fertilizer demand.
China Cracks Down on Poaching Monkeys for Dinner – The crackdown followed media reports that restaurants in hilly Zixi County, Jiangxi Province, were selling meat from the macaque, an endangered short-tail monkey.
China at the centre of global illegal timber trade, NGO says | Reuters China is the world’s top importer of illegal timber, with the trade worth about $4 billion a year, said the London-based Environmental Investigation Agency (EIA). Globally, Interpol estimates total trade in illegal timber is more than $30 billion.
FOOD AND TRAVEL
36 Hours in Lijiang, China – NYTimes.com –
BOOKS
China’s Urban Billion: The story behind the biggest migration in human history (Asian Arguments): Tom Miller: Amazon. The rapid expansion of urban China is astonishing, but new policies are urgently needed to create healthier cities. Combining on-the-ground reportage and up-to-date research, this pivotal book explains why China has failed to reap many of the economic and social benefits of urbanization, and suggests how these problems can be resolved. If its leaders get urbanization right, China will surpass the United States and cement its position as the world’s largest economy. But if they get it wrong, China could spend the next 20 years languishing in middle-income torpor, its cities pockmarked by giant slums.