China’s money rates were expected to increase into the end of the year as banks scrambled to meet regulatory requirements, though not to the level to which they have surged over the last few days. We are not yet at the near-panic of June but the current cash crunch is worrisome, and another indication of the mess in the Chinese banking system. The People’s Bank of China clearly does not want a repeat of June, however there are still seven days until the end of the year and then only a month until the Chinese New Year holiday and all its debt-settling, wage payments and cash withdrawals so rates could stay elevated for some time.
Developments continue in the rumored investigation of Zhou Yongkang. The New York Times found five sources who said Zhou was under some form of detention and Li Dongsheng, a vice minister of the Minister of Public Security, is now officially under investigation. Clearly Zhou is in trouble, though so far the administration is not saying anything publicly, probably because once there is any kind of public acknowledgement then they are committed to bringing him to trial. Whatever is going on, the politics are at least as important as the corruption, though perhaps a move against Zhou and a “purge” in the Politics and Law system is also aimed at cleaning out the rot and strengthening it, as one of the key lessons Xi may have taken from studying the fall of the USSR is that the Soviet security services were corrupt and weak by the time Gorbachev took over.
There has been some positive news about visas for the Bloomberg and New York Times correspondents so it looks like there will be no mass boot of American media, though do not be surprised if one or more of the New York Times journalists will not be allowed to stay.
President Obama has appointed Senator Max Baucus, a Democrat from Montana, as the next Ambassador to Beijing. The ambassador matters a lot less in US-China relations than he used to (yes, all the ambassadors so far have been men) but Sen. Baucus could be an inspired choice. He has worked China issues, is a big trade proponent, has good ties with the White House and has long experience in the Senate that should be useful as the Chinese always need tutorials in how Congress and DC work. At a minimum his Senate career may get him better access beyond a Vice Minister of Foreign Affairs given the apparent appreciation in Zhongnanhai for House of Cards. Perhaps Netflix could do US-China relations a service and arrange for advance screenings at the Ambassador’s residence in Beijing…
One model for Sen. Baucus may be James Sasser, a previous Senator turned Ambassador to Beijing (1995-99) who is considered by some folks I respect to have been among the more effective American envoys to China.
The day after Christmas is the 120th anniversary of birth of Mao Zedong. There will be commemorations but so far they look to be more restrained than the recent celebrations of the 100th anniversary of Xi Zhongxun’s birth. If Xi Jinping really is a neo-Maoist, shouldn’t we expect a lot more this week than what it appears will happen?
I do not have any predictions for China in 2014. Here are the eight I made for 2013 in the New York Times, for which I should get maybe a B+. And many of them can roll over into 2014.
This is the last newsletter of 2013, thanks to all 14,510 of you for your support. Happy Holidays, and see you next year!
This week’s recommended readings:
THE ESSENTIAL EIGHT
China Money Rates Surge as Banks Struggle to Meet Cash Demand – Bloomberg The seven-day repurchase rate, a gauge of funding availability in the banking system, jumped 124 basis points today to 8.84 percent, the highest level since June 20, according to a daily fixing from the National Interbank Funding Center. The rate, which has more than doubled from 4.37 percent in the past week, touched a record 10.77 percent in June.
Related: How Tighter Government Spending Contributed to China Rate Spike-WSJ The Chinese government usually draws down fiscal deposits — the amount of funds the government keeps in the financial system—more quickly in December, as it speeds up spending and fiscal disbursements before the end of the year, UBS economist Wang Tao said in a recent note. That boost in government spending adds liquidity to the banking system, and the PBOC normally withdraws liquidity at the end of the year to offset the inflows. This time, though, the government’s tighter fiscal policy means year-end spending has been restrained, Ms. Wang said.
Related: Q&A: Cash crunch in China – FT.com Looking at interbank borrowing rates, while durations of one month and less have shot up, those from three months to one year have remained much flatter. This is an indication that the cash crunch is more an end-of-year scramble for money than a fundamental breakdown of the Chinese financial system.
Related: Treasure piles up for Alibaba as depositors desert China’s banks – FT.com More than 30m people in China have signed up to Yu’E Bao, or “Leftover Treasure”, only six months since its launch. Initially pitched by the Chinese ecommerce group as a platform for its users to manage excess funds in their online payment accounts, Yu’E Bao is becoming something far more powerful: a straight-up substitute for traditional bank deposits….//liberation from financial repression happening for Chinese savers faster than expected? The flow into Yu’E Bao and its ilk is significant, wonder if contributing to the year end crunch, at least on the margins
Related: China pressures media to tone down cash crunch story – FT.com But there did not appear to be a blanket ban on the subject, as journalists from at least two major media outlets that cover general and business news told the Financial Times they had not been contacted over the story. On the popular news portal QQ.com one of the top stories on Sunday was an analysis of last week’s interbank market fluctuations, and several other sites carried opinion pieces from experts on the topic. So far, the orders issued by propaganda authorities do not appear to be as severe as those issued after the cash crunch in June, when reporters and media outlets were given a written directive ordering them to “explain that our markets are guaranteed to have sufficient liquidity”.
Related: 钱荒背后资金空转游戏大行其道 央行陷两难境地_21世纪网 Monday 21 Century Business News on the root causes of the cash crunch, does not shy away from repeatedly using the term “钱荒”, so either they did not got the propaganda memo to not use that term, they ignored it, or the reports of attempts at censorship may be a bit overblown? // 从长远看来，真正的利率市场化带来的利率上升，
China targets deputy police minister Li Dongsheng for corruption | South China Morning Post A deputy national police chief with close ties to former security tsar Zhou Yongkang has become the latest target in a widening corruption probe that has shaken the highest levels of the ruling Communist Party.
Related: China Focusing Graft Inquiry on Ex-Official – NYTimes.com Mr. Xi and other leaders agreed by early December to put the elder Mr. Zhou directly under formal investigation by the party’s commission for rooting out corruption and abuses of power, the sources said. They said a senior official went to Mr. Zhou’s home in central Beijing to inform him about the inquiry, and Mr. Zhou and his wife, Jia Xiaoye, have since been held under constant guard…
Related: Why Is China Purging Its Former Top Security Chief, Zhou Yongkang? | ChinaFile Chinafile conversation with Ho Pin and Richard McGregor
Related: PetroChina’s Chief Accountant Targeted as Corruption Probe Widens-Caijing A corruption probe into PetroChina, the country’s largest oil producer, has widened to include its chief accountant Wen Qingshan, who is also a member of the company’s party leadership, reported by the Ta Kung Pao.
Related: 舆论场：三起车祸引发的常委层震荡_中国_
Related: 人民日报再发周永康老上级唐克讣告_中国_
The Baucus backstory – POLITICO The vice president — an old friend of Baucus’s dating back to their three decades serving together in the Senate — had emerged as a chief advocate for his nomination, a topic they discussed over lunch at Biden’s residence near the Naval Observatory several weeks ago, according to several sources familiar with the meeting. That friendship, along with Baucus’s close ties with his former chief of staff, Jim Messina, who was also the president’s 2012 campaign manager, helped make what seemed like a pipe dream a reality. Messina quietly asked Baucus sometime in November whether he would ever consider accepting the China post
Related: Max Baucus move to China raises US doubts over trade negotiations – FT.com But if confirmed to the China post, Mr Baucus would soon be leaving and vacating his chairmanship of the committee, taking him out of what is expected to be a fierce political battle to gain congressional approval for the so-called Trade Promotion Authority.
Related: Despite Baucus Nomination, Critics Cite Void in China Lineup – NYTimes.com Administration officials dispute that a new cabinet lineup means China is getting less attention. ..“The hunt for the China person in the administration is a scavenger hunt that misses the fundamental point, which is that U.S.-China relations is a team sport and the team captain is President Obama,” said Daniel R. Russel, the assistant secretary of state for East Asian affairs, who previously was in charge of Asia policy at the National Security Council.
China’s Total Debt at 215 Percent of GDP in 2012: CASS-Caijing China’s total debt topped more than 100trillion yuan in 2012, which was 215 percent of that year’s GDP, according to the China Balance Sheet 2013 released by the Chinese Academy of Social Sciences (CASS). China’s social debt amounted to 111.6trillion yuan at the end of 2012, including 58.76 trillion yuan in non-financing sectors which accounted for 113 percent of the country’s 2012 GDP and 27.7 trillion yuan of government debts, or 53 percent of GDP. Last year, the corporate leverage ratio in China reached 113 percent of its GDP, compared with OECD’s important marker of 90 percent.
“Media control” in the United States – China Media Project After several weeks of uncertainty over the visa status of reporters for the New York Times and Bloomberg working in China, it appears some — but not yet all — are receiving the press cards necessary for them to renew their visas and continue working in the country…This development, however, by no means puts to rest lingering questions about China’s worsening treatment of foreign journalists. As I said to the Straits Times, the recent visa row is probably the clearest indication that Chinese leaders now view foreign media reporting on China as damaging not just to the country’s international image but to the essential project of domestic public opinion control.
Related: The Widening Gyre: The Changed Power Dynamics of Journalists Visas | China Law & Policy The Higgins visa incident and subsequent incidents might indicate more than just a scared China; it might also represent news agencies no longer powerful enough to fight on their own for the principle of freedom of the press. As a result, even if the immediate crisis with the Times and Bloomberg journalists pass, there is still a pressing need for the U.S. government to remain vocal on this issue especially as it seeks to bring a new ambassador to China.//I think it is a mischaracterization to call China “scared” over this issue. This seems straight from the Party’s playbook for dealing with what it deems threats.
China taps legion of amateurs in hunt for US arms tech – Reuters Impressive Reuters series on Chinese efforts to acquire foreign technology, sure to anger Beijing. Reuters has so far stayed out of trouble, maybe now being on some kind of a black list is motivating for new organizations // Their orders come indirectly from the Chinese government and take the form of shopping lists that are laundered through companies with ties to Beijing. The recruits who buy the weapons and system components for those companies are scientists, students and businessmen, and they appear to be motivated more by profit than ideology. As one US Homeland Security official put it, the Chinese “flood the zone with buyers” – a strategy that significantly complicates US efforts to stop the flow of American armaments to China.
Related: Breakout: Inside China’s military buildup–Reuters Agents from Homeland Security sneaked into a tiny office in Oakland’s Chinatown before sunrise on Dec. 4, 2011. They tread carefully, quickly snapping digital pictures so they could put everything back in place. They didn’t want Philip Chaohui He, the businessman who rented the space, to learn they had been there. Seven months had passed since they’d launched an undercover operation against a suspected Chinese arms-trafficking network – one of scores operating in support of Beijing’s ambitious military expansion into outer space.
Related: Breakout: Inside China’s military buildup The Beidou navigation system – developed with EU help – is a striking example of Beijing’s global dragnet for military know-how.
冷溶：毛泽东与民族复兴道路上的四座里程碑|毛泽东|民族复兴|
Related: 《毛泽东年谱（1949－1976）》出版 发表大量未编入毛泽东著作集的讲话-观察者网 new publication on Mao 1949-76, includes many of his speeches not in his Selected Works // 新华网22日消息，为纪念毛泽东同志诞辰120周年，
Related: 毛泽东对当今中国意味着什么？ – BBC中文网 – 评论 Sidney Rittenberg on what Mao Zedong means to China today//
Meet China’s Christmas elves – Telegraph Your present this year is likely to come from a new, well-run factory – but the golden age of toys has passed
BUSINESS, ECONOMY AND TRADE
PBC Governor Proposes Three Financial Reform Measures-Caijing abridged translation of Caijing’s interview with Zhou// In Zhou’s view, now is the time for China to wrap up the market-oriented reform of interest rates. “Only in the time of (economic) crisis or recovery, will the PBC focus on maintaining financial stability,” said Zhou, “In normal times, we do not need to protect financial institutions; rather, we’d like to see banks compete with one another to offer better services to the real economy, as opposed to be preoccupied with making money for themselves.” Zhou added that the Chinese economy is in a “relatively normal” state now.
Q. and A.: U.S. Commerce Secretary Penny Pritzker on China Trade Talks – NYTimes.com “We’ve made some progress during these meetings, but the fact is, we still have more work on critical issues if we are to further develop our economic relationship,” Penny Pritzker, the United States commerce secretary, said Friday at the conclusion of the annual United States-China Joint Commission on Commerce and Trade, or JCCT. “That said, we understand that the Third Plenum was just completed. We are encouraged by the sentiments and interested to see how that translates into real reform.”
Fake Profit E-Mails at AgFeed’s Farms Back Fraud Claims – Bloomberg The e-mails, which were translated from Chinese, and other documents obtained by Bloomberg News provide the first detailed glimpses behind what a U.S. Trustee in bankruptcy court called “massive fraud” in AgFeed’s Chinese operations. Managers in China openly discussed their methods for doctoring results, according to the e-mails. As evidence of irregularities began accumulating, executives and directors waited at least four months before disclosing any of it to investors, corporate documents show.
Chinese Steel Firms Reported Debt Ratio of 70pct, Margins at 0.43Pct in Jan.-Oct. Period-Caijing China’s iron & steel companies reported a staggering 70 percent liability ratio in the first ten months of this year, with sales margin down to a mere 0.43 percent, a government official said. His remark was made at an annual event over the weekend in Shanghai, based on performance of 86 member companies of the China Iron and Steel Association. Total liabilities in the companies – 21 percent of which posted a net loss – hit 1 trillion yuan in the period, and their margins were among the lowest across all sectors in the economy, said Miao Changxing, a senior official at the Ministry of Industry and Information Technology.
China Luxury Growth Slows to Weakest Pace Since 2000 – Bloomberg China’s luxury spending grew this year at the slowest pace since at least 2000 as more shoppers traveled abroad and the government’s anti-corruption efforts curbed purchases, consultant Bain & Co. said. Spending in luxury goods is estimated to have increased about 2 percent in 2013, compared with 7 percent last year, the Boston, Massachusetts-based company said in a report released yesterday. Growth in 2014 will be at a pace similar to this year, it said.
Baidu Forced to Add Warnings as Regulators Focus on China Stocks – Bloomberg “VIEs are doomed,” said Paul Gillis, a professor of accounting at the Guanghua School of Management at Peking University. “They work until you need them to work and then they won’t at any point you need to enforce the agreement because you can’t. There’s no evidence of anyone successfully enforcing a VIE.”..While remaining on the lookout for more court guidance on the corporate structure, investors such as Oberweis, the China Opportunities Fund (OBCHX) co-manager, continue to play down the concerns raised by Gillis. “It’s part of investing in China,” Oberweis said. “You’re kind of stuck with it.”
评论：“上海方案”透显国资改革新思路-中新网 on the Shanghai SOE reform plan // 从管资产到管资本，
Closer Look: For Annual Economic Conference, ‘Free Trade’ Is the Common Denominator – Caixin Statement issued after annual meeting called for more free trade zones and talks with other countries on free trade agreements
Reforms seen as key focus but growth safeguarded | South China Morning Post Reforms will be the top priority next year but the government will not allow growth to slip below 7 per cent, said one of the main authors of the reform plan crafted at the third plenum and adopted as the core for the targets agreed by the Central Economic Work Conference this month. “Next year is a year of reform. But one important consideration when taking reform steps is to make sure that they are conducive to growth,” Liu Shijin, the deputy head of cabinet think tank Development Research Centre, told the South China Morning Post in an interview.
Hershey makes its way into China – The Term Sheet: Fortune’s deals blogTerm Sheet For proof that the Chinese market is difficult for outsiders, a place where even a booming economy and a love for top foreign brands isn’t enough to guarantee success, look to Hershey’s (HSY) recent $584 million deal to buy candy maker Shanghai Golden Monkey Food Company. The Golden Monkey is no Hershey. Its estimated sales of $225 million in 2013 compare to Hershey’s estimated $7 billion. Hershey has Kisses; Golden Money has red-bean milk candies. And that’s part of Hershey’s problem in China: Its famous milk chocolate doesn’t work well in the country, where consumers tend to prefer candies besides chocolate.
Neither Black nor White: Another Perspective on the Chinese Economy – China Real Time Report – WSJ The preliminary results from the fourth quarter China Beige Book, released on Thursday, paint a very different picture from the official data. “The strong recovery so confidently declared by most analysts [earlier this year] is in fact a fiction,” said Leland Miller, president of China Beige Book International. While official figures China’s gross domestic product growth slowing to 7.5% in the second quarter of the year, and then bouncing back to 7.8% in the third, the Beige Book registered few signs of such a rebound. Most economists expect the final quarter to be weaker than the third. But the Beige Book suggests a modest improvement in the fourth quarter compared with the one before, although momentum is still significantly weaker than it was at the start of the year.
How Real is China’s Growth? GDP Alternative Sheds Light – China Real Time Report – WSJ For the most part, Capital Economics finds that its CAP index generally jibes with China’s GDP numbers, especially in 2009 and 2010. But in the last two years, its CAP index suggests growth may have been 1 to 2 percentage points below the official GDP numbers. What’s up? Mark Williams, a China economist at the firm, says official GDP numbers reflect output data and are “skewed toward what is going on in industry.”
Wenzhou Drops for 27th Consecutive Month Amid China Property Prices Rally -Caijing Wenzhou, for the seventh consecutive month, was the only one of the 70 monitored cities to see declines in newly-built commercial property prices compared with the same period of last year, the NBS statistics showed. Over the last three years, home prices in Wenzhou have slashed by 20 percent.
一线城市土地疯狂 开发商溢价400%上海抢“面粉”_宏观经济_财经频道_一财网
AMC Theater Chain Climbs After Raising $332 Million in IPO – Bloomberg AMC Entertainment Holdings Inc. (AMC), the U.S. movie-theater chain controlled by China’s second-richest man, jumped in its trading debut after raising about $332 million in an initial public offering.
IMF Working Paper 10.2013–Local Government Financing Platforms in China: A Fortune or Misfortune? Yinqiu Lu and Tao Sun China’s rapid credit expansion in 2009–10 brought local government financing platforms (LGFPs) into the spotlight. This paper discusses their function, reasons behind their recent expansion, and risks they are posing to the financial sector, local governments, and sovereign balance sheet. This paper argues that LGFPs were a fortune for China in the past, but would turn out to be a misfortune if the causes of the rapid expansion of LGFPs are not addressed promptly.
POLITICS AND LAW
After the Plenum | Foreign Affairs–By Evan A. Feigenbaum and Damien Ma it is vital to assess the plenum’s commitment to reform against the realities of China’s political economy and the Chinese government’s own goals. And, on that score, the plenum has reinvigorated a reform process that will, in time, make the Chinese economy more resilient, dynamic, and sustainable.
Discipline Inspection Commission Unveils Institutional Changes-Caijing The CCDI will gradually shift its focus to developing anti-corruption policies and allow judicial organs to play a major role in handling cases….According to the Decision on Comprehensively Deepening Reform which was adopted at the close of the Third Plenary Session of the 18th CPC Central Committee, the CCDI will dispatch standing discipline inspection bodies to all first-level Party and government organs and implement unified classification and management. This means that Party organs which previously were without accredited agencies will soon welcome their own discipline inspection groups. At the same time, the inspection system will also cover local governments, government departments, state-owned enterprises, and public institutions.
CPC anti-decadence campaign hammers clubbing – Xinhua The Communist Party of China (CPC) has ordered officials to shun high-end clubs and promised severe penalties for for party goers in its campaign against unacceptable practices. “Some CPC officials frequented private clubs, enjoying themselves with feasting and other entertainment, some even engaging in power-for-money or power-for-sex deals,” said the circular made public Monday. These practices have a “serious negative effect on Party and political work styles and social ethos,” said the CPC discipline agency, the Central Commission for Discipline Inspection (CCDI) and the steering group of the CPC’s “mass line” campaign. Party officials have been asked to promise that they will not enter nor accept membership of private clubs.
中央纪委、中央教育实践活动领导小组发出通知 严肃整治“会所中的歪风”-时政频道-新华网 Sounds trite, but making this explicit, and making them actively make the promise “they will not enter nor accept membership of private clubs” will deter more than a few from going // 通知要求，党员领导干部在教育实践活动整改落实、
China mulls abolition of reeducation through labor – Xinhua The Standing Committee of the National People’s Congress (NPC) began reading a motion on abolition of the reeducation through labor system (laojiao) on Monday. The State Council’s decision on reeducation through labor was approved by the top legislature in 1957, establishing the “laojiao” system. Supplementary regulations were approved in 1979. The current motion points out that, for over 50 years, the laojiao system played a historically important role in safeguarding public security, maintaining social stability and correcting illegal behavior. Constant improvement to the legal system means the historical mission of laojiao has been completed.
China can’t cede agenda-setting to Western media – OP-ED – Globaltimes.cn Friedman supposedly understands China well. He should have known that information security is among China’s core security concerns. China is willing to communicate with the world, but it won’t yield its own agenda-setting rights to the Western media. Friedman should understand that Chinese authorities are breaching their duty if they allow Western media to work in China unchecked.
Propaganda officials to head top-tier Chinese journalism schools | South China Morning Post The Communist Party’s propaganda authority is planning to tighten its control over major journalism schools across the country and increase Marxist education at the universities. Three people familiar with the plan said senior local propaganda officials would become heads or high-level officials of journalism programmes at 10 top-tier universities, in an attempt to ensure their teaching is in line with authorities’ directives.
Learning the news – CHINA – Globaltimes.cn In September, the State General Administration of Press, Publication, Radio, Film and Television issued a notice, demanding that all news organizations should hold the training before the exam to be held between January and February in 2014. The training should focus on the textbooks compiled by the administration which falls into six parts including socialism with Chinese characteristics, the Marxist view of journalism, journalistic ethics, regulation on journalism, news reporting norms and preventing rumors, according to the notice. “The training and the exam aim to improve the overall professional quality of reporters,” Zhang Zhi’an, an associate professor at the School of Communication and Design at Sun Yat-sen University and one of the textbooks’ authors, told the Global Times on Sunday.
Are You Qualified to Be a Journalist in China? Take the Test – NYTimes.com What is the essence of the Chinese Dream? What did Marx and Engels ask of newspaper reporters? How do Chinese and Western views on journalism differ? Those are some of the questions Chinese journalists can expect to be quizzed on when they renew their press cards in early 2014.
Yearender: Xinhua Insight: CPC gets closer to masses to ensure a “red China” – Xinhua There used to be concerns that the “mass line” campaign could do little to shake up the party, and the campaign would become ritualized or a formality. However, the public and low-level officials are now seeing more clearly that the central leadership is determined to bolster the party’s ties to the people through long-term efforts…Xi has made it clear that he does not want mere words. He has said that the campaign would continue, and that officials “should not have the wrong idea that they have passed the test just because the sessions are over.” In order to prevent countermeasures against the central policy at the local level, the CPC has rolled out a set of detailed documents aimed at blocking all countermeasures to the campaign.
China Revives Mao-Era Self-Criticism, but This Kind Bruises Few Egos – NYTimes.com Wielded with often violent results in the days when Mao Zedong was China’s paramount leader, “criticism and self-criticism” sessions have been resurrected by President Xi Jinping as “the most powerful weapon” for rallying the Communist Party and the Chinese people behind his push to liberalize the economy while fortifying the party’s control over this nation of 1.3 billion people…“It’s using an ideological tightening to prevent the kind of explosion of political participation that could be triggered by a more relaxed environment,” said Xiao Gongqin, a history professor at Shanghai Normal University. But critics say the campaign is at best superficial, and at worst a dangerous revival of Maoist tactics that in an earlier era brought the nation to its knees.
Chinese Leader Xi Weakens Role of Beijing’s No. 2 – WSJ.com definitely been the scuttlebutt around Beijing for a while. One rumor has Premier Li as head of the Comprehensively Deepening Reform Leading Small Group, but nothing has been announced, and other rumors have others running it, including Huang Qifan. And does Liu He have more influence over the economy than Premier Li?// There is no evidence of discord between Messrs. Xi and Li, the party insiders say. But Mr. Xi is subverting a nearly two-decade-old division of power whereby the president, who is also party chief, handles politics, diplomacy and security, while the premier manages the economy. Having rapidly established his authority over the party and the military in his first year in power, Mr. Xi is now stepping in on the economy, making him the most individually powerful leader since Deng Xiaoping, the man who launched China’s economic liberalization in 1978…Premier Li still ranks second in the party and handles day-to-day running of the government and the economy, party insiders say. Nonetheless, his remit has largely been reduced to implementing decisions made by Mr. Xi and his advisers, while making sure the economy doesn’t miss its 2013 growth target of 7.5%, the insiders say.
如何把权力关进制度的笼子（权威访谈·
两千村官护照统一上缴（抓党风 促廉政）–时政–人民网 2
China Targets Lavish Funerals in Crackdown on Official Corruption – NYTimes.com After taking on lavish banquets and expensive gifts, the crackdown on official extravagance led by President Xi Jinping has a new target in its sights: opulent funerals. According to an announcement, posted online on Thursday, Communist Party members have been instructed to “set an example in holding simple and civilized funerals.”
Zhang Ziyi Settles Libel Suit and U.S. Website Retracts Story – NYTimes.com A website based in the United States has retracted a series of stories alleging that the Chinese film star Zhang Ziyi slept with powerful men in exchange for more than $100 million. Ms. Zhang had sued the website, Boxun News, which publishes mostly in Chinese, for libel in a California court. A court document said the two sides reached an undisclosed agreement in principle on Dec. 12.
新疆：保守思潮的危险信号_网易新闻中心 Phoenix Weekly cover on threat of conservative Islam to Xinjiang, details of Tiananmen terror attack//《凤凰周刊》最新一期刊出文章《新疆：
Chinese University Professor Quits to Seek Academic Freedom · Global Voices A university professor’s resignation letter online has triggered hot discussion on academic freedom in China’s universities. Chen Hongguo, an assistant professor at the Northwest University of Politics and Law in Xi’an, uploaded the long resignation letter on his personal blog and his account on Sina Weibo, the country’s most popular microblogging site, on December 23, 2013. The letter details his frustration with the university for restricting his academic freedom.
The New Face of Chinese Propaganda – NYTimes.com Murong Xuecun// Cheng Yizhong, a former editor in chief at the newspaper Southern Metropolitan Daily, who has been jailed for his journalism, says of the slick look of the posters, “I would guess they were outsourced.” My friend Wang Xiaoshan, a publisher, thinks that officials are wasting time with archaic slogans that seem irrelevant to ordinary people’s struggles. “Don’t they know what era we’re living in?” he asked. But my old schoolmate, the party member Mr. Lin, sees it differently. “Of course it’s stupid!” he told me. “But who cares? We can stick that stupid stuff on all those walls. Can you?”
FOREIGN AND DEFENSE AFFAIRS
Perry Link: There is a price to cross China’s borders – The Washington Post If there is a silver lining in the predicament of the New York Times and Bloomberg, it is that the West may finally be getting a direct sense of the political culture at the top in China. It is a shrewd and inveterately competitive culture, drawn far less from Karl Marx than from China’s classic novel “Romance of the Three Kingdoms,” in which outsmarting the opponent by whatever means is the most admired of achievements. When U.S. policymakers use terms like “strategic partner” and “responsible stakeholder” for the people at the top in Beijing, they are out of their depth.
Report:US Furious Over Equipment Transfer to China – Israel National News Top Israeli defense official allegedly resigns over transfer approval for military equipment move to China; US fears Chinese sale to Iran.
Terrorism lawsuit clouds Chinese Israel visit – Yahoo News China’s foreign minister paid a rare visit to Israel on Wednesday, reflecting the burgeoning trade ties between the two countries. But the trip was clouded by fresh accusations that Israel’s prime minister had compromised the global war on terrorism under heavy Chinese pressure. Wang Yi’s visit came as the family of a Jewish-American teenager killed in a suicide bombing accused Israel of caving in to Chinese pressure by blocking the testimony of a key witness in a terrorism case against the Bank of China. In an awkward welcome for the Chinese official, details of the case splashed across the front pages of Israeli newspapers.
Universities and colleges urged to end ties with Confucius Institutes The Canadian Association of University Teachers is calling on universities and colleges to sever their ties with institutes subsidized and supervised by the authoritarian government of China. At a meeting of the CAUT Council earlier this month, delegates passed a resolution calling on universities and colleges in Canada which currently host Confucius Institutes on their campuses to cease doing so, and those contemplating such arrangements to pursue them no further. “Confucius Institutes are essentially political arms of the Chinese government,” said CAUT executive director James Turk. “They restrict the free discussion of topics Chinese authorities deem controversial and should have no place on our campuses.”
Chinese FM outlines diplomatic priorities for 2014 CCTV News – CNTV English Chinese Foreign Minister Wang Yi on Monday outlined China’s diplomatic priorities for 2014, including enhanced ties with major powers and closer relations with neighbors.
Are Huawei the enemy within? GCHQ is tightening its supervision of the giant Chinese technology company’s UK testing centre – The Independent The centre scrutinises equipment from servers to transmitters supplied to British operators such as O2, Talk Talk and Everything Everywhere, looking first at its physical components from access points to hard drives before then scrutinising software for vulnerabilities. It is understood that the decision on what to examine is taken by the phone companies in consultation with GCHQ rather than Huawei
PLA General on “Incalculable Damage” of North Korea’s Nuclear Program | Sino-NK The number and variety of Chinese statements on North Korea since the bureaucratic fall and psychologically brutal execution of Jang Sung-taek has increased markedly. After Jang’s death–or what one Chinese essay called “the long-rumored political earthquake” in North Korea–the Chinese Communist Party is trying to avoid the contagion of blame while preserving freedom of action. One of the most striking op-eds to appear in recent days was by Wang Hongguang, a retired PLA general whose essay was briefly featured on Huanqiu Shibao‘s front webpage.
China vents anger over Dalai Lama’s planned Norway visit | Reuters so much for Norwegian salmon coming back to China. Can they launder it through Sweden or Finland and re-label it there? // China’s Foreign Ministry expressed anger on Friday at plans by the Dalai Lama to visit Norway, a country with which China already has strained ties following the awarding of the 2010 Nobel Peace Prize to prominent Chinese dissident Liu Xiaobo. “China resolutely opposes any country receiving the Dalai Lama. China resolutely opposes any form of official meetings with the Dalai Lama by government officials of other countries,” ministry spokeswoman Hua Chunying told a daily news briefing
China behavior in South China Sea ship encounter ‘irresponsible’: U.S. | Reuters China’s behavior in a narrowly averted naval collision in the South China Sea was both “unhelpful” and “irresponsible,” U.S. Defense Secretary Chuck Hagel said on Thursday, warning against incidents that could escalate U.S.-Chinese tension. “That action by the Chinese, cutting their ship 100 yards out in front of the (USS) Cowpens, was not a responsible action. It was unhelpful; it was irresponsible,” Hagel told reporters at the Pentagon. // just 100 yards?
国防部回应”中美军舰南海对峙”:两国已进行沟通_网易新闻中心
China, U.S. communicate effectively over warship encounter: ministry – Xinhua Defense authorities of the two countries have reported relevant information to each other via normal channels and communicated effectively about the matter, the statement said. It said some media reports about the event are untrue. Also, the statement stressed that the Chinese and U.S. armed forces have an opportunity to develop their relations and both sides are willing to enhance exchanges, practice closer coordination and make efforts to maintain regional peace and stability.
Pentagon Less Dependent on China Rare Earths, Report Says – Bloomberg “Global market forces are leading to positive changes in rare earth supply chains, and a sufficient supply of most of these materials likely will be available to the defense industrial base,” according to the Pentagon report by Elana Broitman, the Defense Department’s top official on the U.S. industrial base. “Prices for most rare earth oxides and metals have declined approximately 60 percent from their peaks in the summer of 2011.” //still remember the crazy media hype over this
Japan unable to get ASEAN members on same page at special summit – The Asahi Shimbun Host Japan aimed to strengthen security ties with the organization’s 10 Southeast Asian member countries to counter China’s newly declared air defense identification zone (ADIZ) in the East China Sea. However, most ASEAN members were more focused on seeking stronger economic ties with Japan.
Africa and the Chinese Way – NYTimes.com In the 20 years since the Cold War’s end, free-market, multiparty democracy has been held forth as the ideal form of government (and a key to obtaining support from Washington). But now, drawn to the example set by the fast-growing economies of Asia like China, Singapore and Malaysia — all of which achieved phenomenal growth under modernizing authoritarian governments — a group of African leaders has emerged that openly declares its admiration for this mode of government.
Insight: For Chinese farmers, a rare welcome in Russia’s Far East Russia’s Far East Federal District, a region two-thirds the size of the United States, has a population of just 6.3 million and wide swathes of unfarmed fertile land. China is next door, its 1.4 billion people have an insatiable appetite for crops and produce, and its companies have gone as far as Australia, South America and the Pacific island of Vanuatu to lease farmland. Unlike most other parts of the world, the local population, cut off from Russia’s western-facing economy, mostly welcomes Chinese investment, which has provided a lifeline following the collapse of the Soviet Union. Chinese firms already lease or control at least 600,000 hectares of land in the Far East, which is equivalent to the size of a small U.S. state like Delaware.
Japan is back: Unbundling Abe’s grand strategy | Lowy Institute for International Policy In this publication, prominent US Asia watcher and Lowy Institute nonresident fellow Mike Green argues that Japan needs help in resisting possible Chinese coercion, refining its own foreign policy narrative and seeking a stable relationship of reassurance with Beijing.
HONG KONG, MACAO AND TAIWAN
China Unveils Memorial to Spies in Taiwan – NYTimes.com The granite monument in Beijing’s Western Hills sheds light on the extent of the covert activities that continued after Chiang Kai-shek’s Nationalist forces fled to Taiwan in 1949 following their defeat by Mao Zedong’s Communists. The memorial lists 846 names and includes blank spaces to allow the addition of more, the state-run China News Service reported, adding that about 1,100 of some 1,500 agents sent to Taiwan in the early 1950s were caught and executed.
TECH AND MEDIA
Apple – Press Info – China Mobile & Apple Bring iPhone to China Mobile’s 4G & 3G Networks on January 17, 2014 As part of the agreement, iPhone 5s and iPhone 5c will be available from China Mobile’s expansive network of retail stores as well as Apple retail stores across mainland China beginning on Friday, January 17, 2014…China Mobile is rolling out the world’s largest 4G network. By the end of 2013, China Mobile’s 4G services will be available in 16 cities including Beijing, Shanghai, Guangzhou and Shenzhen. By the end of 2014, China Mobile plans to complete the rollout of more than 500,000 4G base stations, which will cover more than 340 cities with 4G service
Chinese cartoon blamed for children’s injuries A Chinese court on Wednesday decided the producer of a popular animation was partly to blame for injuries to two children when another child imitated an episode of the TV series. The two brothers, Ran Ran, 7, and Hao Hao, 4, from Donghai County in east China’s Jiangsu Province, were badly burnt on April 6, when they were tied to a tree and set alight by their friend Shun Shun, 10, who confessed he was imitating a scene from the cartoon “Xi Yangyang & Hui Tailang (Pleasant Goat and Big Big Wolf)”.
Ctrip to Sina Raise Record War Chests as Big Three Drive Deals – Bloomberg likely better deals for the bankers than companies. how will these firms legally get this money raised offshore in China, or is it all for overseas deals? //The financing weapons of choice for the nation’s mid-sized Internet companies are convertible bonds. Companies from travel agent Ctrip.com International Ltd. (CTRP) to web portal Sina Corp. sold $3 billion of the securities this year, more than in all previous years combined, data compiled by Bloomberg show.
文化部整顿手游市场：违规企业名单曝光|文化部|手游|违规_
Call to ensure netizen privacy from Internet sites – Chinadaily.com.cn Liu Zhengrong, director of the information coordination bureau with the State Internet Information Office, said on Monday that it was morally wrong and illegal to expose people’s privacy on the Internet. Those who initiated searches for “human-flesh” (looking for detailed private information on the Internet) should be punished strictly, he told Global Times…The official was commenting on an incident in which a highschool girl in Lufeng city, Guangdong province, committed suicide after she was accused of stealing by a costume manager who exposed her information on a website.
China’s film industry: The red carpet | The Economist A lighter touch by the censors might produce films that were more authentically Chinese and artistically interesting. It would also avoid embarrassing incidents. The Chinese film that has garnered most attention in the West lately is “A Touch of Sin” by Jia Zhangke—a gloomy art-house portrayal of modern China that won the award for best screenplay at Cannes this year. The government has banned it from cinemas and journalists from interviewing Mr Jia. More Westerners have probably seen reports of this in recent months than have watched a Chinese film.
Chinese PR Group BlueFocus Buys London-Based We Are Social | Global News – Advertising Age Chinese PR group BlueFocus Communications is taking a big step toward becoming an international player with the $30 million acquisition of five-year-old social media agency We Are Social. The London-based agency also has offices in New York, Paris, Milan, Munich, Singapore, Sydney, Sao Paulo and Singapore.
Li Ruigang’s CMC Buys Stake in Caixin Media | Variety China Media Capital, a RMB5 billion ($833 million) venture capital fund with connections to Rupert Murdoch, Time Warner and Jeffrey Katzenberg, has bought a stake in Caixin Media, one of China’s leading independent news organizations. The size and the value of the stake were not revealed, though some media have reported that the holding is a controlling majority. Others say that CMC bought a 40% stake — which would make it the largest single holder — from state-controlled Zhejiang Daily Press Group. // Li has far more important connections than those to Murdoch and Katzenberg
Chinese state media says Battlefield 4 video game is a ‘new form of cultural aggression’ | South China Morning Post In an editorial published last week in military newspaper Zhongguo Guofangbao, Battlefield 4 was criticised for “discrediting China’s image abroad and distorting the truth in an effort to mislead young people”. “[In the game], American soldiers attack Shanghai [and] exchange fire with the People’s Liberation Army,” the editorial read. “Set in the year 2020, China’s domestic unrest is the [game’s] backdrop, and the US military must fight for peace and uncover China’s conspiracies.”
SOCIETY, ART, SPORTS, CULTURE AND HISTORY
Auctioned calligraphy dismissed as fake – Xinhua Three researchers from Shanghai Museum are insisting that a calligraphy supposedly belonging to famous poet and politician Su Shi (1032-1101), and attracted interest at a Sotheby’s auction in New York in September, is fake. The successful buyer has announced plans to exhibit it at a private museum next year. The Gong Fu Tie Calligraphy, a hanging scroll with just nine characters, was sold for US$8.229 million at Sotheby’s in the Fine Classical Chinese Paintings and Calligraphy auction on September 19 after 70 rounds of heated bidding. It has been described as one of the finest examples of calligraphy ever produced.
China Poly Group Corp. Takes On Christies and Sotheby’s – NYTimes.com Poly officials, however, speak confidently of their ability to ward off the competition and are focusing instead on their company’s expansion. Last year, Poly staged its first auction in Hong Kong, where the Western houses do significant business, and opened a New York office to help it secure consignments in the United States, celebrating with a party at the Harvard Club. One indication of Poly Group’s ambition is a plan to sell shares in its cultural division on the Hong Kong Stock Exchange in the near future. “They don’t want to be one of the great auction houses of China but one of the great auction houses of the world,” said Laura B. Whitman, a specialist in Chinese art formerly with Sotheby’s and Christie’s.
Chinese Respondents Top Materialism Poll – NYTimes.com The survey was conducted by the French market research company Ipsos in September and polled more than 16,000 adults in 20 countries. Chinese respondents topped the list in measuring success by their possessions, coming in more than double the global average, according to the results published last week. Seventy-one percent of Chinese respondents agreed with the statement “I measure my success by the things I own,” far higher than respondents from its East Asian neighbors South Korea, at 45 percent, and Japan, 22 percent.
Q. & A. With Liping Ma – NYTimes.com Liping Ma, a former teacher and principal in China, has written extensively about the differences between how the United States and China teach math to elementary school students. After earning a doctorate in curriculum and teacher education from Stanford University, she worked as a senior scholar at the Carnegie Foundation for the Advancement of Teaching. In 1999, she published “Knowing and Teaching Elementary Mathematics,” an influential book that argues elementary school teachers need a better grounding in arithmetic and math in order to teach them effectively to their students.
China’s worst diplomat: The fall guy | The Economist very fun story // Chonghou always felt aggrieved. From the moment of his release, he told anyone who would listen that he was a scapegoat; one of his fiercest critics lamented that he would not just “shut up at home and regret his misconduct”. He almost need not have worried: Chinese historians have largely ignored him. An exception to that general disdain, Tang Renze, writes in his biography of Chonghou that, to profit from history, we must learn from its “anti-heroes”. Indeed—and from the corrupt, hidebound system that created China’s worst diplomat, promoting him and indulging his failures, until the last one.
Shauna Mei, rumored mistress of US general Wesley Clark｜WantChinaTimes.com
Actor’s charity accused of dodgy dealings – CHINA – Globaltimes Faye Wong’s ex// A cultural foundation managed by Li Yapeng, a famous actor, was recently accused of getting involved in the real estate industry in the name of philanthropy. Li responded on Sunday that local civil affairs authorities have concluded their investigation of the issue. Whistle-blower Zhou Xiaoyun reported to the Beijing Municipal Bureau of Culture and the Beijing Municipal Bureau of Civil Affairs in a letter on December 17 that Li’s foundation is involved in illegal operations. One day later, Zhou released his letter on the Internet, he told the Global Times on Sunday.
真相：沪郊人的生活_UGC精选 interesting photo series on people living on the edge of Shanghai // 系列本期为大家带来刘禹扬的摄影作品【沪郊人的生活】
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH
Death of Infant after Vaccination Causes Confusion, Concern – Caixin In response to the trio of problems, the China Food and Drug Administration (CFDA) and the Hunan Provincial Center for Disease Control and Prevention (CDCP) called for use of all vaccines from the same batch as those in question to be suspended. On December 16, the Hunan CDPC announced that “we have not discovered any direct causal relationship between hepatitis B vaccines and the infants whose bodies experienced abnormalities.” The vaccine manufacturer, Biokangtai Pharmaceuticals Inc., in the southern city of Shenzhen, also released a statement denying any problems with the company’s products, and saying that “the infant deaths are suspected to be coincidental.” The vaccines from were offered to families for free. Later, some health centers began offering a different type of vaccine to families for a fee in order to ensure planned vaccination work was completed.
Chinese police detain three after toxic parcels kill one, sicken nine | South China Morning Post Police in Shandong province detained three suspects after parcels tainted by a toxic chemical killed one and made nine others sick. A man in Guangrao county died of methyl fluoroacetate poisoning after his family received shoes that were tainted by the chemical, which had leaked from another parcel transported by the same truck in late November.
H5N2 bird flu areas sealed off in N China – Xinhua Areas within 3 km of a farm in north China’s Hebei Province, the site of an H5N2 bird flu outbreak in poultry, were confirmed to have been sealed off, according to local government. The disease killed 4,000 chickens raised at the farm in Baoding City after they showed symptoms of suspected avian flu on Dec. 17, according to the Ministry of Agriculture.
Woman in China dies from new strain of bird flu: Xinhua | Reuters A 73-year-old woman in China has died from a new strain of bird flu, the H10N8 virus, the Xinhua state news agency reported on Wednesday. Xinhua cited unidentified experts as saying that the case in Nanchang, the capital of the landlocked southeastern province of Jiangxi, was an individual one and the virus had a low risk of spreading to humans. The Chinese Center for Disease Control and Prevention had identified the strain as the H10N8 avian influenza virus, Xinhua said.
Gov’t, Scientists Struggle to Root Out Opposition to GM Foods – Caixin Cover story The public has been slow to accept scientifically altered rice and other staples, setting back efforts to begin industrial cultivation
China Said to Refuse More Than 500,000 Tons of U.S. GM Corn – Bloomberg China has rejected more than half a million metric tons of genetically modified U.S. corn in November and December, almost three times the amount it previously announced, said three people with knowledge of the issue. At least nine Panamax-sized vessels, each carrying about 60,000 tons of insect-resistant MIR 162 grain, have been refused, said the people, who asked not to be identified because the information is confidential. State-owned COFCO Corp. bought the first seven of the nine cargoes, one official said.
Beijing Air Quality Shows Hope in the Homestretch of 2013 | the Beijinger According to a story in Saturday’s Beijing News (Chinese only), the volume of four major pollutants — Sulfur Dioxide, Nitrogen Dioxide and two sizes of particulate matter — PM10 and PM2.5 — has been reduced by 25% compared to the same period last year.
FOOD AND TRAVEL
France searches river for China tycoon after chopper crash – Yahoo News The owner of the Brilliant group had celebrated his purchase of the Chateau de la Riviere, one of the region’s oldest estates, with a lavish event Friday. After a press conference, an introduction to the staff and dinner, former owner James Gregoire was planning to take his buyer on a short tour of the 65-hectare (160-acre) vineyards and surrounding grounds. View gallery A rescue operation at the site of a helicopter crash in which a Chinese billionaire disappeared, on … Lam Kok’s wife pulled out at the last minute, saying she was “scared of helicopters”, said an AFP photographer at the event. // how many of these vineyard purchases are about money laundering?
BEIJING
北京确定明年重点任务：控制人口过快增长居首_新闻_腾讯网 B
北京门头沟政府新办公楼被指酷似克里姆林宫(图)_
BOOKS AND LITERATURE
Age of Ambition: Chasing Fortune, Truth, and Faith in the New China eBook: Evan Osnos not out until May 2014 but have no doubt it will be terrific, already pre-ordered it // As the Beijing correspondent for The New Yorker, Evan Osnos was on the ground in China for years, witness to profound political, economic, and cultural upheaval. In Age of Ambition, he describes the greatest collision taking place in that country: the clash between the rise of the individual and the Communist Party’s struggle to retain control. He asks probing questions: Why does a government with more success lifting people from poverty than any civilization in history choose to put strict restraints on freedom of expression? Why do millions of young Chinese professionals—fluent in English and devoted to Western pop culture—consider themselves “angry youth,” dedicated to resisting the West’s influence? How are Chinese from all strata finding meaning after two decades of the relentless pursuit of wealth?
Amazon.com: The Hall of Uselessness: Collected Essays (New York Review Books Classics) eBook: Simon Leys: Kindle Store The Hall of Uselessness is the most extensive collection of Leys’s essays to be published to date.
CORRECTIONS
In last week’s issue I wrote “The US-China relationship is not ending 2012 on a positive footing”. Of course I meant 2013 not 2012. Sometimes having an editor can be a good thing…