China Readings for January 8th

"Sinocism is the Presidential Daily Brief for China hands"- Evan Osnos, New Yorker Correspondent and National Book Award Winner

  • Follow the VIE agreements? | China Accounting Blog | Paul Gillis – The net income findings are particularly troubling. Under the standard VIE arrangements all of the profits of the VIE are supposed to be extracted through the technical service agreements with the WFOE. Those technical service agreements are a critical component in establishing the right to receive the expected residual returns of the VIE that is required in order to consolidate a VIE (ASC 800-25-39). What that means is that the public company must have a right to get the profits of the VIE or it cannot be consolidated.
  • Stanley Lumban: The Wukan Protests and the Rule of Law – China Real Time Report – WSJ – The recent Wukan protest has faded from the media, but one issue continues to percolate in its wake: the role of Chinese law, which some protesters invoked.

    Two Chinese intellectuals have since spoken up about the need to strengthen the rule of law around property rights and, more importantly, about the need for a “paradigm shift” in the way officials think about rights and handle related disputes.

  • Michael Hastings on war journalists – Glenn Greenwald – Salon.com – That mindset shapes Hastings’ superb new book on the Afghanistan War: The Operators: The Wild and Terrifying Inside Story of America’s War in Afghanistan. The bulk of the book is devoted to his experiences in Afghanistan and his examination of how the war has been managed and the propaganda that has been disseminated to sustain it. Because Hastings writes as someone who expressly believes that U.S. should not be in Afghanistan, and (even more rarely) as someone who has no concern whatsoever for whom he offends by reporting the truth, the book provides vital insights about the war and how it has been run that are not available anywhere else.

    Hastings’ exposé on the war is what has received the bulk of the attention in book reviews — both positive and negative (The Wall Street Journal amusingly compared him — as though it were a grave insult — to Vietnam War reporters David Halberstam and Neil Sheehan for the crime of reporting the negative aspects of a war and the government deceit behind it). But his discussions of national security journalists and how the Pentagon uses them are at least equally valuable.

  • Chinese Gymnastics Kids: Training with Tears, Sweat, & Dreams – chinaSMACK
  • Power Play – By Patrick M. Cronin | Foreign Policy – It's time for the U.S. to stand up to China. And cutting the Pentagon's budget isn't going to help.
  • The Jamestown Foundation: The Grim Future of the Wukan Model for Managing Dissent – Does the Wukan case indeed mean that central- and local-level officials will henceforward lean toward relatively conciliatory and non-violent means to tackle protests by peasants and other disaffected elements in society? At least on the surface, Wang Yang’s handling of Wukan has won the support of the state media. The People’s Daily hailed Guangzhou’s efforts as an example of “accommodating and defusing contradictions and conflicts in a good way.” It praised Guangdong leaders for “grasping well the aspirations of the masses.” The commentary noted whether officials could satisfactorily resolve questions regarding the masses’ malcontents was a “yardstick of cadres’ ties with the people as well as their leadership ability.” The Global Times praised Guangdong leaders for “putting the interests of the public in the first place when handling land disputes” (People’s Daily, December 22, 2011; Global Times [Beijing], December 22, 2011; Bloomberg, December 22, 2011). The Wukan model also won plaudits from members of the remnant liberal wing of the party, a reference to the followers of radical, pro-West modernizers represented by the late party secretaries Hu Yaobang and Zhao Ziyang. “I hope that the Wukan incident can push society to establish a system which is based on democracy and the rule of law,” said Hu Deping, the respected son of Hu Yaobang, “I hope that when we are faced with similar problems in the future, we can resort to the rule of law and negotiation” (South China Morning Post, December 30, 2011; Sina.com, December 30, 2011).