China Readings for October 29th

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

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  • Groupon Clone Lashou F-1 – Our revenues grew from nil for the period from September 15, 2009 (date of inception) to December 31, 2009 to RMB10.5 million (US$1.6 million) for the year ended December 31, 2010 and to RMB57.8 million (US$8.9 million) for the six months ended June 30, 2011. Our gross billings grew from nil for the period from September 15, 2009 (date of inception) to December 31, 2009 to RMB123.2 million (US$19.1 million) for the year ended December 31, 2010 and to RMB626.7 million (US$97.0 million) for the six months ended June 30, 2011.

            We are a growth stage company and incurred sales and marketing expenses for the year ended December 31, 2010 and the six months ended June 30, 2011 of RMB40.0 million (US$6.2 million) and RMB326.5 million (US$50.5 million), respectively. Our net losses were RMB0.7 million for the period from September 15, 2009 (date of inception) to December 31, 2009, RMB53.5 million (US$8.3 million) for the year ended December 31, 2010 and RMB391.3 million (US$60.5 million) for the six months ended June 30, 2011. As of June 30, 2011, our accumulated deficit was RMB474.2 million (US$73.4 million).

            Due to legal restrictions in China, we conduct our business mainly through Beijing Lashou, our consolidated variable interest entity in China, that we effectively control through contractual arrangements.

  • The Sick Man of Asia | Foreign Affairs – In their single-minded pursuit of economic growth, China's leaders have long overlooked public health — which, by some measures, is now worse than under Mao. Despite recent reforms, China's citizens keep getting sicker, threatening the country's health-care system, the economy at large, and even the stability of the regime.
  • The Jamestown Foundation: Jockeying for Position Intensifies among Candidates for the Politburo Standing Committee – Despite the dearth of information, it is apparent that jockeying for position has intensified particularly among senior cadres who want to make it into the nine-member Politburo Standing Committee (PBSC), the CCP’s powerful inner sanctum where seven members are expected to step down in 2012. Since the 370-odd full and alternate Central Committee members rarely meet, a plenum is a good chance for would-be PBSC members to engage in subtle campaigning. In the run-up to the Central Committee conclave, up-and-coming members of the party’s two dominant if fractious cliques—the Communist Youth League (CYL) faction under President Hu Jintao and the Gang of Princelings (a reference to the offspring of party elders)—have been actively trying to enhance their chances for promotion next year (Bloomberg, October 14; Agence France Presse, October 19).

    The most visible example is Chongqing Party Secretary, Bo Xilai, who is already a Politburo member.

  • Wal-Mart’s China woes began with phone call, then snowballed – Yahoo! News – Deciding it had a case, the AIC called in the police and expanded the probe. Authorities found that 12 of Wal-Mart's 13 stores in Chongqing were selling mislabeled organic pork.
    To the AIC, that was the last straw.
    "Many times we sent our opinions and sent them notices," Zhao said. "They never explained anything to us clearly."
    AIC investigators then delved into Wal-Mart's inventory books.
    "As the No.1 retailer, their management has been perfected," Zhao said. "They can track anything."
    Investigators traced the organic pork to a local meat supplier called Gaojin. Interviewing employees at Gaojin, the numbers didn't add up.
    Investigators worked out that of more than 78,500 kilograms of pork sold in Walmart stores since January 2010 as organic, only 15,000 kg, or 19 percent, was organic meat.
    "They sold more than 600,000 yuan ($95,240) worth of false organic pork," Zhao said. "That's consumer fraud."
    Asked if he thought Wal-Mart tripped up in the pursuit of profit in China's cut-throat retail industry, where a competitor's hypermarket may be only a stone's throw away, Zhao said he didn't think the stores intentionally sought to deceive customers.
    "One employee told us they were instructed to keep the special display shelf for organic pork stocked with meat," Zhao said. "They didn't want to show empty shelves."
  • Amazon To Launch The Kindle "Fire-Wall" in China? | DigiCha
  • In Brief: Things Going Crazy in Linyi | ChinaGeeks | analysis and translation of modern China
  • McClatchy blog-Could Relativity Media really be filming a buddy comedy film in Linyi? – This is the Linyi in Shandong Province. The same place where blind lawyer Chen Guangcheng is being held under extra-judicial house arrest in a local village. He was placed under detention after being released from prison — the consequence of his trying to lead a class action lawsuit against local officials' campaign of forced sterilization and abortions. Chen and his wife were reportedly badly beaten at the behest of local officials earlier this year.

    Read more:

  • China’s Net Giants Go Shopping | The Jakarta Globe – China's three biggest Internet firms are working up a rapacious appetite for online companies at home and abroad, in a sign of the country's increasingly muscular cyber wealth.

    Baidu, Alibaba and Tencent – nicknamed 'BAT' in China – have in recent months been on an acquisition rampage to expand their reach, eyeing even brand names from the US.

  • China admits jumping gun on new foreigners’ tax – Yahoo! News – BEIJING (Reuters) – A Chinese official admitted on Friday that they had jumped the gun on a new tax on foreign workers mandating they pay social security contributions before the government had worked out exactly how the system would be implemented.
    But Xu Yanjun, deputy head of the Ministry of Human Resources' National Social Security Management Center, said there would be no going back on the scheme, despite concerns in the business community it will push up already rising costs.
    "Local government have not made full arrangements yet for receiving the payments or registering people, that is the case," he told a news briefing.
  • Bay Area clothiers Levi’s and Gap strive to dress Asians in American-fusion fashions – San Jose Mercury News – SHANGHAI — The jeans are stiletto thin — you won't find baggy pants on these racks — and the customers squeezing into them are looking for denim that makes a bold statement.
    "She looks like she has attitude," said Mike Dai, eyeing his girlfriend, Amy He, after she wiggled into a narrow pair of Levi's on a September afternoon in a high-end mall.
    The brand is all-American but the San Francisco-based jeans-maker is offering up clothes that are all-Asian — pants designed in Hong Kong with an edgy, worn-and-torn finish that can sell for as much as $149 a pair.
  • Fobbing off high-brow culture on the masses – China Media Project – Media scholar and CMP fellow Zhan Jiang (展江) has been one of the most outspoken critics of SARFT’s intrusion into entertainment programming. The following is an interview Zhan did this week with Phoenix Online.
  • Harassment and Evictions Bedevil Even China’s Well-Off – – What kind of rights do the homeowners have to the property? Did they get the full 产权证, or are they on some kind of long lease from the developer? friend has a property in Songzhuang on which built a house; it is a part of a compound of 10 houses or so. One person got the rights to the land from the local village, then they all leased their plot of land for 40 years. But they know that the local govt could show up tomorrow and take the land back for minimal compensation, probably less than the cost of the house. One of the neighbors is a beijing official;they hope that helps//

    the struggle unfolding at Huaxiang World Famous Garden, a gated, suburban-style community on the exurban fringe of the capital, is not like a majority of redevelopment battles that each year lead to the forced eviction and dispossession of countless families.

    The residents involved are by and large middle class and privileged — doctors, financiers, retired government bureaucrats — who thought they were immune to such capriciousness. Among their ranks is one of China’s most successful fiction writers, Yan Lianke, whose satirical novels about famine, AIDS and the cruelties of the Cultural Revolution plumb the suffering of ordinary Chinese.

  • Amazon in talks with Chinese government to launch the Kindle in China – will it be called the "Kindle Fire-Wall" here? $amzn
  • Yahoo: Center of a Global Chess Game – – As Yahoo Inc. maps out its future, a new plan has emerged for the fate of its overseas investments, which are the critical part of any deal to sell the company.

    The Internet pioneer has been exploring a potentially tax-free way to dispose of its roughly 40% stake in the Chinese e-commerce company Alibaba Group Holding Ltd., according to people familiar with the matter.

  • Chinese Call the Shots in Business, Sex Comedy ‘Chinglish’: Jeremy Gerard – Bloomberg – A lethal comedy about business, sex and the failure to communicate, “Chinglish” could be a model tale for these times of China’s rise to economic domination.
    An ambitious Western man comes under the spell of a beautiful Chinese woman, leading to mixed messages and transformed lives.
    That thumbnail sketch applies equally to “M. Butterfly,” the David Henry Hwang play that electrified Broadway in 1988, and to his latest, which opened last night at the Longacre Theatre.
  • Government building in Tibet hit by blast: report – Yahoo! News – A Chinese government building in a remote part of tense Tibet was hit by an explosion, leaving no injuries but adding to tensions after a string of self-immolation protests, an overseas radio service said late Thursday.
    Radio Free Asia, based in Washington, said a bomb blast struck a township government building Wednesday in Changdu, Tibet.
  • The Hindu : News / International : China boosts security after self-immolations in Sichuan – China has boosted security deployment and restricted communication in towns in the western Sichuan province after the tenth case of self-immolation protest by Tibetans in recent weeks.

    A monk in the predominantly-Tibetan town of Garze in Sichuan set himself on fire outside a monastery on Tuesday, several overseas Tibetan groups reported.

    Most of the nine other self-immolation attempts occurred in the nearby prefecture of Aba, home to the Tibetan Buddhist monastery of Kirti. Among them was a nun, Tenzin Wangmo. At least five of them have died because of their injuries, according to reports in the Chinese media.

    Since the immolations, China has boosted deployment of military and paramilitary forces in Aba and nearby towns, according to several Tibetans from Sichuan who are now living in Beijing.

  • Relativity’s First Film Under Sky Land Partnership Begins Production in China – The Hollywood Reporter – Some footage has already been shot in Seattle. Production commenced Oct. 26 in the city of Linyi, in the south of China's Shandong province.
    The Chinese Communist Party Secretary of Linyi's Municipal Committee, Zhang Shajun, who ranks above the local mayor, issued a statement welcoming the production to his city and adding that he "particularly welcome(s) my good friend (Relativity CEO) Ryan Kavanaugh and his great company" to his "historic city," adding: "We promise to provide the best service possible in order to help make the movie successful worldwide."
  • China on ‘Bigger, Faster Treadmill’: Chanos – Bloomberg – China is on “a bigger and faster treadmill” than ever as property sales slow, said Jim Chanos, the hedge-fund manager who’s shorting banking stocks on a bet the market will crash.
  • China could play key role in EU rescue – – China is very likely to contribute to the eurozone’s bail-out fund but the scope of its involvement will depend on European leaders satisfying some key conditions, two senior advisers to the Chinese government have told the Financial Times.
    Any Chinese support would depend on contributions from other countries and Beijing must be given strong guarantees on the safety of its investment, according to Li Daokui, an academic member of China’s central bank monetary policy committee, and Yu Yongding, a former member of that committee.
  • After China Abuse Scandal, Celebrity Teacher Li Yang’s American Wife Files for Divorce – China Real Time Report – WSJ – The American wife of China’s most famous English teacher has filed for divorce after a months-long public battle between the two that ignited a rare public debate in the country around domestic violence.

    Kim Lee, wife of “Crazy English” founder Li Yang, filed for divorce with the Beijing Chaoyang District Court, China’s state-run Xinhua news agency reported Thursday, citing the court.

  • Insight: China premier-in-waiting schooled in era of dissent | Reuters – Li Keqiang, China's likely next premier, once huddled beside Yang Baikui in a Beijing university dorm, translating a book by an English judge, little separating the future Communist Party leader from his classmate who would be jailed as a subversive.
    Over three decades ago, Vice Premier Li and Yang entered prestigious Peking University, both members of the storied "class of '77" who passed the first higher education entrance exams held after Mao Zedong's convulsive Cultural Revolution.

    More than any other Chinese party leader until now, Li was immersed in the intellectual and political ferment of the following decade of reform under Deng Xiaoping, which ended in the 1989 Tiananmen Square protests that were crushed by troops.