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ABC News continues with its investigation of China stock frauds (better late than never…) and in the latest installment looks at Rodman & Renshaw, once a leading shoveler to US markets of Chinese…companies…whose chairman was a prominent American General and aspiring presidential candidate. In China Fraud Accusations: Wesley Clark’s Ex-Firm Faces Questions ABC News reports that:

Retired U.S. Army General and former presidential contender Wesley K. Clark was the chairman and public face of a Wall Street investment firm that rode a wave of interest in Chinese stock, and then plunged on reports that much of the profit was hype and many of the companies were outright frauds.

Now the China deals Clark helped promote at lavish parties are among those facing scrutiny from the Securities and Exchange Commission as they try and account for the billions of dollars lost in dozens of suspicious stock offerings, which some officials believe represent collectively one of the largest financial scams since Bernie Madoff. Authorities told ABC News that firms serving as middle men who helped promote the Chinese companies are now in the crosshairs…

One of the firms that pushed most aggressively for investment in Chinese companies was Rodman & Renshaw, a boutique operation based in New York and chaired by Clark, the retired four star general and war hero who mounted a bid for the Democratic presidential nomination in 2004. Clark became chairman of the investment firm in 2009, just as it was emerging as a central player in the China investment wave. He left the firm in mid-2012, and declined repeated requests from ABC News to discuss his tenure there…

The general did not run day-to-day activities at the firm, instead chairing board meetings and lending his star power during extravagant annual conferences, where investors were invited to hear presentations from dozens of Chinese companies trying to attract financing as they joined American stock exchanges. The conferences were luxurious affairs held at the Waldorf in New York and Le Royal Meridien Hotel in Shanghai. Henry Kissinger spoke at one, former Sen. Chris Dodd, D.-Conn., at another. Diana Ross performed, as did En Vogue.

Another American with ties to a sketchy China firm has cut what sounds like a wrist-slapping deal with the US government. As Bloomberg reports in Ex-Xinhua Finance CEO Bush Signs Plea Deal:

Xinhua Finance Ltd.’s former chief executive officer, accused of joining a $50 million insider- trading scheme, signed a plea agreement with U.S. prosecutors resulting in a single charge of conspiring to obstruct the Internal Revenue Service.

The filing of a criminal information in a pending case signals the defendants have reached a resolution with the government and that remaining counts of an indictment will be dismissed, said Bernie Grimm, a criminal defense lawyer in Washington who isn’t involved in the case.

Under the indictment all three defendants faced four charges of mail fraud, each of which carried a maximum penalty of 20 years in prison.

When I was at MarketWatch we had a deal with Xinhua Finance, I met Fredy Bush a few times, a former colleague was a director of her company and I bought shares after the IPO and lost money. Shows what I know…

THE ESSENTIAL EIGHT

China Manufacturing Expands at Fastest Pace in Two Years – Bloomberg – China’s manufacturing is expanding at the fastest rate in two years, according to a private survey of companies, bolstering prospects that economic growth will accelerate for a second straight quarter. The preliminary reading of a Purchasing Managers’ Index was 51.9 in January, according to a statement from HSBC Holdings Plc and Markit Economics today. That compares with the 51.5 final reading for December and the 51.7 median estimate of 17 analysts surveyed by Bloomberg News.

Apple Discloses China Revenues – Business Insider sounds good, but sequential growth way below that of other geographies// Greater China (which includes Taiwan and Hong Kong) revenues were $6.83 billion, up from $5.43 billion in the previous quarter and $4.08 billion a year ago. That represents growth of $26 percent and 67 percent, respectively.

Apple in China: still on a tear | beyondbrics But Coolpad’s surge in sales growth does not come without costs. Gross profit margin at China Wireless was 12 per cent in the six months to end of June 2012, down from 16.8 per cent from the period the year before. This is less than half of the 38.6 per cent in gross profit margin reported by Apple for Q1. //respectable for a Chinese firm, a big mistake to assume that Coolpad will go away because it has razor thin margins…//The numbers are all the more impressive given that China Mobile, the country’s biggest mobile operator, doesn’t distribute iPhones.The introduction of a new Apple financing scheme in China last week could be one way for the iPhone maker to recapture market share without going down the low-end route. But this remains to be seen. But few would argue that Apple is doing alright in China.// but people expect a lot more than “alright”, and Apple no longer has the hot phone. Samsung taking share at top, Apple has completely missed the middle market, which it has in many other markets with its subsidized carrier deals. For whatever reason Apple appears to have thought it has leverage with China Mobile. Whatever leverage it had, or thought it had, it no longer does as it is not selling the most desired phone in China anymore…

北京“公务员房”神秘卖家：随身带房本 午夜签合同|北京官员抛房|财产公示|住房联网_21世纪网–nice anecdotes about officials selling property in face of corruption crackdown, expect to see repeated in some bear PPTs and posts..still dont think big enough surge in sales to hit the market..could be wrong, but so far prices up, reporting on it has not noted any numbers that would have material impact on the real estate markets// 据21世纪网了解，近来在网上出现的诸多抛售政府资源房的信息是真实的。这些抛售的房源所在社区大都是周边设施配置优越，之前出售甚至出租的情况都甚少。因此，这些房源一旦推向市场，立刻吸引了不少消费者的关注。 “十八大后一些业主就开始委托我们中介卖房，房子卖得急，但价格也咬得紧。”一位地产中介向21世纪网表示。“我做房产中介多年，还是第一次遇到这样的抛售。”

Investors in Fraudulent Wealth Management Plan Repaid – Caixin – Investors who bought into a fraudulent wealth management plan got their money back without interest. About 80 investors have received payments equal to their principal investment, several investors said. They agreed not to seek any interest. The agreement was reached at a meeting on January 9 at Huaxia Bank’s Jiading branch in suburban Shanghai, where the wealth product was sold. The deal means that no bank wealth product has ever been allowed to fail in China.

Urban Platforms in a Policy Pressure Cooker – Caixin- Game rules are changing for urban China’s quasi-market financing platforms that have been fueling local government infrastructure projects ever since the global financial crisis. And the game players – mainly government officials in cities, townships and districts for whom the platforms have been convenient cash cows – are getting nervous. Officials digesting the rules released December 24 are looking for new ways to service existing platform debt, estimated by the central government at 10.7 trillion yuan nationwide as of late 2010. They also need financing for highways, subways, tourist venues and other construction projects planned or under way. //poor local officials, squeezed from every side…and now much harder to run away…

China to Cap Electricity Growth at 8 Percent Through 2015 – Bloomberg – In an outline of energy-development goals under the country’s 12th five-year plan, China plans to reduce energy consumption by 16 percent annually and carbon emissions by 17 percent, as measured per unit of gross domestic product, from 2010 to 2015, according to a statement today on the website of China’s State Council, China’s cabinet. The plan, which anticipates a near doubling of consumer power consumption per capita, calls for China to get 11.4 percent of its electricity from non-fossil sources by 2015, up from 8.6 percent in 2010, while reducing coal’s share of generating capacity from 68 percent in 2010 to less than 65 percent.

Official Newspaper Blames Local Govts for Overcapacity Which Threats Chinese Economy-Caijing – A Chinese ruling party’s mouthpiece newspaper has blamed local governments for the country’s excess capacity problem which has long plagued the world’s second-biggest economy, and warned that the persistent obstinacy may lead to a systematically economic collapse in the country without control. The People’s Daily said in a commentary published Wednesday that overcapacity now extends to emerging industries, and is becoming an increasingly big obstacle to the economy’s recovery.

SOEs dominate Beijing’s commercial property market WantChinaTimes.com State-owned and public real estate firms dominated the 2012 list of Beijing’s top 10 property developers in terms of the transaction values, while only two private enterprises entered the list, figures from the Beijing Real Estate Trade Management website reveal. The numbers show that state-run property companies, including Beijing Urban Construction Group, Zhonghai Construction Group, China Railway Construction Corp, Poly Property Group and Beijing Capital Development, occupied the most most of the top 10. Just two private companies, Longfor Properties and Soho China made the list; in 2011 three did.

 

BUSINESS AND ECONOMY

CDB Replaces Head of Its Hong Kong Branch – Caixin – China Development Bank (CDB) has announced it was replacing the head of its Hong Kong branch. The policy bank recently called off a loan that was to be part of the partial acquisition of China’s second largest insurer, Ping An Insurance Co. Liu Hao has been replaced by Han Baoxing, former vice director of the bank’s capital bureau. Liu was made vice director of the bank’s planning bureau.

铁道部新开工10万套保障房：保障还是福利？_财经频道_一财网 – 在刚刚结束的全国铁路工作会议上，铁道部部长盛光祖表示，将大力改善职工生产生活条件，确保2013年全年开工建设10万套、基本建成7.5万套职工保障性住房。

各地再现农民工返乡就业潮 新华社——经济参考网 – 刚入腊月，23岁的阳炳钻就回到了老家襄阳准备安心过年。不久前，他辞去了在武汉已经干了4年的保安职位，“年后打算在襄阳找份工作，不再回武汉了，那边一个月挣两千六七百块钱，物价那么高，不如留襄阳。”　随着春节临近，像阳炳钻一样的外出务工人员都正汇集成一股回乡的大潮。2013年1月，《经济参考报》记者分赴东、中、西部调研发现，尽管未出现类似2008年末的农民工返乡潮，但仍有为数众多的在东部沿海地区打工的农民工开始返乡。由于对2013年东部就业形势不十分看好，返乡就业、创业正成为越来越多外漂农民工的选择。为此，一些中西部省份已经将促进返乡人员就业工作提上日程。

First-time house buyers are youngest in China: survey｜Society｜News｜WantChinaTimes.com– The average age of first-time home buyers in Beijing is 27, the youngest in the world, according to a recent survey. Many of these young people however bought a property due to insecurity about the property market and the government housing system and have experienced anxiety about keeping up the payments on their homes. China Everbright Bank and the market research division of a property developer carried out a survey on the age at which people around the world purchase their first home. The average age in other countries and regions was above 30, according to the Chinese-language Guangzhou Daily.

Joy Global: When Will We See The $1 Billion Write-Down? – Seeking Alpha – written i believe by a short seller (does not mean they are wrong) who connects Emory Williams and Rubo Li to another possibly problematic China mining machinery firm// Based on the evidence I presented, I believe a detailed internal review and audit of International Mining Machinery is warranted by Joy Global in light of the recent scandal reported by Caterpillar. While it is difficult to predict the outcome of such investigation and what level of write-down Joy may ultimately take, it is most likely going to be very significant given the size of its IMM acquisition, the percentage reported in Caterpillar’s write-down and the important connections shown between IMM and ERA. A write-down north of a billion dollar is very well within the realm of possibilities and could happen in the very near term.

Starr Scores Rare Victory Against Chinese Reverse Merger Company – China Real Time Report – WSJ – According to the filing, the committee of three judges found in Starr’s favor, and instructed China MediaExpress’s chairman and two main shareholders to pay Starr $77 million in damages and other relief. Lawyers say that Beijing has a good track record of recognizing the findings of international arbitration tribunals (including Hong Kong tribunals) that involve Chinese firms.

Has China’s bright future turned dim? | Marketplace.org – Want to know when China’s economy’s going to crash? “The crash came at the end of October of last year. This is really clear,” says Anne Stevenson-Yang, research director at J-Capital research in Beijing.//from last month, Anne’s point worth thinking about..China may have already had several localized crashes..bad, but careful extending that to national crash…and no you will not be taken seriously if you are still citing Ordos as a sign China’s economy is in trouble..old news, find something bigger that matters please..trust me, you can

Soho China’s Sales fall on two consecutive years – MorningWhistle – Too obvious now that SOHO builds crappy buildings end up being relatively bad investments for many buyers…even in China there is a limit to dumb money and PR

Conference Board Dec China Leading Index Rises 0.4% | MNI – “Growth in the LEI for China slowed in December. A decline in real estate activity, a drop in new export orders, and weak consumer confidence accounted for the slowing, while credit extension and improved conditions in the manufacturing supply chain offered only little support,” said Andrew Polk, resident economist at The Conference Board China Center in Beijing in an accompanying statement.

 

POLITICS AND LAW

“二奶”警告“干爹”： 舒服的时候小心点！-财经网 – nice pictures of the “anti-corruption mistress special force” in shenzhen// 2013年1月22日下午，数名声称要用“美人计”抓贪官的靓丽女子，现身深圳书城门前大剧院地铁口，她们配戴“二奶反贪特工队”腰牌，打出更加雷人的标语：“被包为耻，抓贪为荣，洗心革面，重新做人，用好美人计，杀个回马枪”“二奶也是人民子弟兵，二奶也要为人民服务”“警告干爹们：舒服的时候小心点！”。上面还有热线电话。她们手持手铐、皮鞭，面戴墨镜，性感摩登，冰火尽现，香艳逼人。而被她们现场“公审”的一名“贪官”，胸前则挂着“人民公敌”牌子，显得极其狼狈。围观人群中不时发出阵阵叫好声。醒悟的“二奶”们似乎在瞬间找到了做人的尊严。

人民日报–another great cartoon in People’s Daily – This one on local corruption..dont need to read chinese to get it

人民日报-遏制特权才能确保公平（评论员观察） ——从严治党新观察之二 范正伟 – 　　特权思想、特权现象，绝不仅仅是党风政风问题，更关系社会的公平正义；绝不仅仅是财富分配问题，更关系党和国家的前途命运

央视《新闻联播》新增特约评论员 35年来首亮相–图片频道–人民网 – CCTV Evening News adds a commentator. Yang Yu the first one in the 35 year history of this broadcast

Commentary: When power is encaged, so will extravagance – Xinhua | English.news.cn– The traditional idea of “honor to frugality and shame to extravagance” should be promoted among the entire party, Xi said. The volume of leftovers in restaurants in China annually is estimated to be enough to feed 200 million people throughout the year. While showoff displays and waste at private dinners are just a personal vice that need to be rectified, extravagance and unnecessary ostentation at official banquets must be resolutely stopped. Leaders and officials’ abstinent lifestyle is needed. Not only for the reason that they should take the lead in practising the fine frugal tradition in China, which is still a developing country with a large population living in poverty, but also because they are not allowed to snatch taxpayers’ money for their own lusts.

Xi’s anti-corruption resolution arouses public expectations – Xinhua | English.news.cn– dangerous to raise expectations and not meet them…Xi has to know this// The most quoted phrase from Xi’s speech was “Power should be restricted by a cage of regulations,” which some believe connects with the theories of classic Western political philosophers. Xi explained that such a cage refers to sound disciplinary, prevention and guarantee mechanisms to ensure that people do not dare to, are not able to and cannot easily commit corruption. The speech has received a warm welcome, as well as comments indicating increased expectations, from public intellectuals and netizens.

Communist Party watchdog to launch 5-year war on graft | South China Morning Post– The commission also said yesterday it would crack down on commercial bribery, as well as focusing on graft in sectors including finance, telecoms, education, medicine and land. The communiqué said government organs should accept both public and media supervision and curb spending on official functions, government buildings and official tours.

Report: Firm set honey traps to lure officials — Shanghai Daily– A COMPANY in Chongqing Municipality has been accused of setting honey [note, original uses different word that seems to trigger email spam filters] traps for senior government officials to gain engineering contracts worth millions of yuan. Chongqing Yonghuang Group videotaped at least six officials, including the sacked Beibei District Party Secretary Lei Zhengfu, with the same woman, Zhao Hongmei, Southern Metropolis Daily reported yesterday.

【财新辩论】中央党校副校长李景田：中国要继续改革开放的道路_世界频道_财新网 – Caixin’s covers Li Jintian’s Davos remarks, focuses on his reform comments…//李景田还提到对执政党的监督问题：要做到不犯错误和少犯错误，执政党“需要来自社会、民主党派，包括新闻舆论的监督”

China’s Li Jingtian Says Social Media Encourage Press Freedom – Bloomberg – Li Jingtian, Senior Vice President of the Central Party School of the Communist Party of China, said social media are helping his country move toward a greater degree of press freedom. “The social media is actually strengthening supervision of the Chinese officials” and “this is a very good thing,” he said today during a panel discussion at the World Economic Forum in Davos. “To guarantee the freedom of the media, of the press, this is the common goal of the administrations of all the countries in the world, and this is an issue remaining to be solved

人民日报-菲律宾的徒劳之举 钟声 – Zhong Sheng not happy about about Philippines appeal to UNCLOS, calls it futile

Opinio Juris » Blog Archive » Game Changer? Philippines Seeks UNCLOS Arbitration with China Over the South China Sea – Strategically, I think I understand why the Philippines has filed this claim. They have very little leverage with China: economically, politically, or militarily.  In this forum, the worst case scenario is the Philippines will lose on jurisdiction. This shouldn’t affect the merits of their claims, though.  For China, the worst case scenario is that it loses on the merits and would have to face the decision of whether to comply with the tribunal.  If they lose, I can see China simply withdrawing from UNCLOS. In any event, I think it is safe to say this it a game changer in the long-running South China Sea dispute.  It is also, without question, the most important case that has ever been filed under the dispute resolution procedures of UNCLOS.  It will be a crucial test of the UNCLOS institutions, as well as of UNCLOS members.  I am skeptical that China will allow itself to be drawn into serious international adjudication (see my argument here), but it will be fascinating to see how China reacts.

Stranded Navy minesweeper taking on water – Navy News | News from Afghanistan & Iraq – Navy Times– stranded on a reef in the Philippines..how are China’s SCS charts?// On Jan. 18, the service revealed that a digital chart used by the ship to navigate in the region misplaced the location of a reef by about eight nautical miles, and may have been a significant factor when the ship drove on to the reef on Jan. 17. As of Jan. 18, U.S. Navy ships have been directed to “operate with caution” when using similar electronic charts and compare the map data with paper charts, which are considered accurate.

有关国家不应使南海问题复杂化扩大化 <BR>望澳国家安全战略有助于中澳关系发展 -解放日报

China: Old barriers in way of Xi’s bid for reform – FT.com – need to test the new equipment at some point// The most persistent whispers talk of a brief engagement some time in the next two years between China and Vietnam, which has overlapping territorial claims in the South China Sea and no formal defence treaty with the US. As the ambassador of another regional country engaged in territorial disputes with Beijing told the FT recently: “My main job in the next few years is to make sure that if China does go to war that it doesn’t do it with us.”

China Will Not Overreact to Western Engagement in Myanmar | CHINA US Focus– Myanmar’s policy of seeing China as a friend will not be changed. The foundation of the relationship, which was built since the 1950s and also during years of isolation, is solid. Even though Myanmar is seeking more cooperation with the Western world, it is unlikely that this country will underestimate it relationship with China or take sides between China and the Western countries in regional affairs. In the future, Myanmar will continue to provide cooperation opportunities for Chinese companies. At the same time, China will pay more attention to the demand of the local civilians and the environmental issues, and will strengthen the efforts in benefiting the local community. The prospects of China-Myanmar cooperation are positive. Su Xiaohui, Deputy Director, Department of International and Strategic Studies, China Institute of International Studies

Former China State TV Director Bemoans Anti-Japanese Propaganda: “Where’s the Creativity?” | Tea Leaf Nation – On January 19, 2013, former China Central Television director Xia Jun (@夏骏) posted on microblogging platform Sina Weibo, “What’s up with China’s TV industry? Take a look around Hengdian [a major Chinese television studio] and you’ll see 40-50 casts and crews fighting [Japanese] ‘devils.’ Where’s the creativity?” Mr. Xia’s statement was reposted 10,000 times and garnered over 2,600 comments on Sina Weibo, China’s Twitter-like microblog platform. Most of those responding to Xia’s post seemed to share his concern.

Did China Test its “Carrier-Killer?”–The Diplomat– Want China Times explains:”The People’s Liberation Army has successfully sunk a U.S. aircraft carrier, according to a satellite photo provided by Google Earth, reports our sister paper Want Daily — though the strike was a war game, the carrier a mock-up platform and the “sinking” occurred on dry land in a remote part of western China. Satellite images revealed two large craters on a 200-meter-long white platform in the Gobi desert used to simulate the flight deck of an aircraft carrier. The photo was first posted on SAORBATS, an internet forum based in Argentina. Military analysts believed the craters would have been created by China’s DF-21D anti-ship missile, dubbed the “carrier killer.”

From Chinese and Japanese Web Users, Strikingly Similar Vitriol on Islands Dispute | Tea Leaf Nation –

 

TECH AND MEDIA

Line-Cutting Apps Lure Chinese on New Year Travel Demand – Bloomberg – like our migrant worker maid whose migrant worker son also in Beijing used his laptop with this plugin to get them tickets home…//The free apps from Internet companies including Qihoo 360 Technology Co. (QIHU) and Kingsoft Corp. have split government departments and highlighted a digital divide within China. While the tech-savvy can more easily make bookings, low-wage workers living thousands of miles from their families are finding it harder to buy tickets at stations for their once-a-year trips. “This is definitely unfair,” said Zhao Jian, a professor of economics at Beijing Jiaotong University, which focuses on transportation. “In the past, migrant workers with stamina could get tickets. Now, people with technology get them.”

China Train Ticket Site Cost Nearly $100 Million, Seems to Be Harassing Programmers, And Might Be Broken Again–TechInAsia – Last fall, we learned that China’s 12306 train ticket sales platform cost 329 million RMB ($52 million), which seemed like sort of a lot given that the thing barely worked. Recently, a weibo whistleblower named Zhou Xiaoyun has alleged that in addition to that, the Railway Ministry has also spent an additional 200 million RMB ($31 million) on a web commerce system from Taiji Computer Corporation. That brings the total cost of the site up to $83 million.

 

SOCIETY, ART, SPORTS, CULTURE AND HISTORY

The Chinese lottery: a tax on hope | beyondbrics – really any different than in America or other countries?// In other words, the more extreme the inequality, the greater the incentive to play. Even if those buying tickets in China know the odds are long, they see quick-fix solutions like the lottery as the only way to get ahead.

 

ENERGY, ENVIRONMENT AND HEALTH

两石油巨头油品含硫量超欧洲15倍 被指系阴霾天气推手-财经网 – 业内人士指出，此次雾霾事件更为深远的影响或是推动两大石油公司加快机动车油品质量升级，但成本则是影响炼厂实现这一步的最大阻碍

Beijing sets stricter emission limit — Shanghai Daily– While tightening the emission standard on new cars, the Beijing government also said that gasoline and diesel that meets the new standard will be available in local gas stations from May 31. The new standard will apply to new cars that have yet to receive license plates, Xinhua news agency reported, citing Fang Li, vice director of the city’s environment protection bureau. Vehicles currently in use will be exempted.

中国近20年癌症呈现年轻化 青年胃癌发病率翻番 – 新闻中心 – 新华网 – 近日，中国社会科学院经济研究所发布的2012年《中国药品市场报告》显示， 2008~2011年我国三级医院、二级医院用药类别的结构变化显著，一个重要特征为抗肿瘤和免疫调节剂占医院总用药的比重明显上升，提示人们重视当前肿瘤发病现状。全国肿瘤登记中心日前发布的《2012中国肿瘤登记年报》表明，我国近20年来癌症呈现年轻化、发病率和死亡率走高的趋势，每年新发肿瘤病例约312万例，每分钟就有6人被确诊为癌症。乳腺癌、肺癌、结肠癌、甲状腺癌等癌症发病年龄均出现提前。

Smog thickens again in Beijing with pollution at danger levels | South China Morning Post– but today apparently a beautiful air day after winds picked up overnight// With heavy smog blanketing much of the country this month, raising environmental concerns among the public – particularly over the use of coal – authorities in Inner Mongolia have halted production at a massive US$2.7 billion coal-to-chemicals plant found to be breaching environmental regulations. The Shenhua Baotou project will not be allowed to reopen until it meets standards set by the Ministry of Environmental Protection, the National Business Daily reported.

 

FOOD AND TRAVEL

Beijing Taxi Torment: What’s Driving It? | Agenda – – In reality, to make a reasonable living of say around RMB5000 a month, they need to average a profit of RMB220 per day. Which means bringing in RMB200 (franchise fee per day) + fuel costs + RMB 220 (profit). I don’t know how many miles they drive daily, but New York cabbies drive around 180 miles a day. Using that as a yardstick, that’s 7.2 gallons, or RMB216. So per day they need to pull in RMB636 to make a blue-collar living. Your rush-hour fare that brings in RMB10 in half an hour ain’t going to cut it. Would you work for nothing in real terms, in the most stressful working environment your industry offers?