"Sinocism is the Presidential Daily Brief for China hands"- Evan Osnos, New Yorker Correspondent and National Book Award Winner
The smog storm enveloping Beijing and dozens of other Chinese cities has at least one silver lining. I am trying to hide it out by staying home and so have some time for the newsletter.
Grey Beijing (as you can you see in this live view of the CBD area from my study) is a far cry from colorful Ukraine.
The overthrow of the government in Ukraine has been all over the Chinese media, so far with little apparent censorship. The Global Times last week linked the unrest to excessive political reform and Beijing has been paranoid about “color revolutions” and the role of the West in supporting them for years. The crisis in Ukraine will reaffirm the resolve to strengthen the security services and stamp out any nascent signs of organized dissent, as well as increase suspicions of and rhetoric against “hostile foreign forces”.
The 3rd anniversary of the “Jasmine Revolution” crackdown just passed and the 25th anniversary of the start of Tiananmen Square protests is less than two months away. What was going to be a tense Spring anyway should in the wake of Ukraine be even more so. Xi Jinping’s ongoing consolidation of power over the security services looks even more important.
Three years ago I wrote a post arguing that the protests across the Middle East would not spread to China. Most of the arguments in it still stand today, and the new administration appears to have a much greater sense of urgency:
Apologies for disagreeing with the wishful thinking of the folks at the Wall Street Journal editorial page–China Isn’t Immune to Nile Fever–but I expect that the protests in Egypt will end up strengthening the Chinese government.
To oversimplify, the Chinese Communist Party is focused on three basic things. First, staying in power. Second, driving the “Great Chinese Renaissance” and all that entails, from improving standards of living to expanding global influence. Third, getting rich, both personally and as a way of maintaining loyalty to the system, so long as it does not threaten the first and second principles.
The longer the Egyptian protests continue, and the greater the chaos and economic damage they bring, the easier the job gets for the propaganda organs in China. Egypt looks like a broken, Third World country, which is not what most Chinese aspire to. See Austin Ramzy’s article in Time Magazine–China: Why Egypt’s Uprising Hardly Stirs Chinese Citizens–for a good discussion of this point.
To the extent that the Chinese security services needed a reminder to stay vigilant, they have one. And they also have a very clear roadmap of how activists can use the Internet and social media like Facebook and Twitter to help catalyze political opposition. They will likely both increase their scrutiny of the Internet, especially “web 2.0″ services, and have even more budgetary resources allocated to their online and offline efforts. The Egypt protests will probably dash Facebook’s hopes for a China entry, no matter how much they compromise.
The Chinese leaders are not stupid; quite the opposite in fact. They know that inflation, unaffordable housing, labor issues and corruption are huge problems that may ultimately threaten their rule. Various special interest groups (such as real estate developers, local governments and SOEs) have grown quite powerful and have thwarted progress on some of these issues, especially real estate and further economic liberalization. But the Party has proven itself amazingly resilient over the last six decades, and most analysts underestimate its ability to adapt and neutralize both external and internal threats to its rule.
Egypt may turn out to be the catalyst that leads to the reigning in of the special interest groups that hamper further economic reform and threaten both future economic growth and regime stability. Yes these groups are powerful and have representatives at the highest levels of power, but ultimately no one and no group will be allowed to threaten the Party’s rule.
Note that I make no mention of Western-style political reform. That is not in the cards, and in fact the propaganda apparatus is using the chaos in Egypt to further deposition Western-style political reform as a contributor to instability.
2014 is the Year of the Horse, and probably also will turn out to be the Year of the Grind.
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THE ESSENTIAL EIGHT
China to aim for 7-8 pct economic growth -c.bank chief | Reuters China is aiming for economic growth of between 7 and 8 percent, a level that is good for both the country and the world, Central Bank Governor Zhou Xiaochuan told a G20 meeting in Sydney this weekend. // 周小川：7%至8%的增长速度适合中国
Related: China’s Lou Turns Tables on U.S. Over Calls for Faster Change – Bloomberg China’s Finance Minister Lou Jiwei turned the tables on the U.S., pointing to a lack of structural change in its economy after Treasury Secretary Jacob. J Lew called for China to more quickly expand the role of markets. Lou also played down the risks from shadow banking, saying that possible defaults in some wealth-management products don’t reflect “big problems” in the industry. Lew this week highlighted potential danger in China’s financial sector as one of several risks clouding the global economic outlook.
Xi Lauded for China Economic Policy in Sign of His Widening Sway – Bloomberg A magazine article prepared by China’s Communist Party portrays President Xi Jinping as the key driver of economic policy, adding to signs of his accumulation of power since becoming leader in 2012. The piece cites Xi’s “important” economic statements and his efforts to moderate China’s growth rate, and credits him for initiatives such as Shanghai’s free-trade zone, without referring to Premier Li Keqiang’s role….Steve Tsang, director of the China Policy Institute at the University of Nottingham in England, said Xi has reacted to the perceived “ineffectiveness” of the Hu-Wen partnership by trying to better use the party as an instrument for governance and reform. While Xi is now more powerful than Hu was when he stood down, “there is as yet no real evidence that Li is being weakened,” Tsang said. “Li is his subordinate and is expected by him to support him.” // 十八大以来习近平同志关于经济工作的重要论述
Related: 习近平的第三条道路 interesting commentary in FT Chinese from Xiao Shu about Xi Jinping // 【编者按】2014年中国“两会”将在10天后召开。
In Japan’s Drill With the U.S., a Message for Beijing – NYTimes.com CAMP PENDLETON, Calif. — In the early morning along a barren stretch of beach here last week, Japanese soldiers and American Marines practiced how to invade and retake an island captured by hostile forces. Memo to Beijing: Be forewarned
Related: Exclusive: China, eyeing Japan, seeks WW2 focus for Xi during Germany visit | Reuters China wants to make World War Two a key part of a trip by President Xi Jinping to Germany next month, much to Berlin’s discomfort, diplomatic sources said, as Beijing tries to use German atonement for its wartime past to embarrass Japan.
Full text of Premier Li’s anti-graft speech published – Xinhua The full text of a speech made by Premier Li Keqiang at a key anti-graft meeting earlier this month was published on Sunday, reiterating a systematic and reinforced anti-corruption campaign in 2014. Li was speaking at a meeting of the State Council, or China’s cabinet, on promoting clean-handed government and mapping out this year’s anti-graft plans. Calling for rigid accounting for government financial records, Li stressed that all government income and spending records must be included in the budget management, according to the full text of the speech. // 在国务院第二次廉政工作会议上的讲话
楼市唱空论再起 九成城市楼市成交量环比下跌_财经_腾讯网 lots of negative news flow around real estate in the last few, wonder how much this will affect expectations. Remember though that the government does not want prices to crash and has many administrative measures in place to repress sales in many cities, so there are still steps the government could take to try to arrest any significant slides, at least in the tier 1 and tier 2 cities. the tier 3 and 4 cities are in a lot of pain already and will be in more as the year progresses.
Related: China Home Prices in Big Cities Slow on Local Curbs and Lending – Bloomberg Home prices in the southern business hubs of Guangzhou and Shenzhen rose 19 percent and 18 percent, respectively, from a year earlier, the National Bureau of Statistics said in a statement today. That was the slowest pace since July. Prices in Beijing jumped 15 percent, the slowest since August, and increased 17.5 percent in Shanghai, the least since September.
Related: 多家银行停止房地产贷款消息不实 交行明确否认|银行|房贷|房地产_新浪财经_新浪网 mult
Related: 三四线楼市疲软蔓延 众多中小开发商被套牢_证券时报网 开发商欠债“跑路”、“
Related: 楼市告别富得流油 专家:房价下跌是大概率事件_证券时报网
Related: 杭州楼盘狂降价脱销 开发商藏样板间怕被老业主砸_财经频道_一财网 price cut in Hangzhou real estate development leads 2 sales frenzy, & angry earlier buyers/
Related: 楼市开启阶段性降价空间 新华社——经济参考网 但赵路兴认为，
China’s online funds come under fresh fire – FT.com Yu’E Bao et al ending financial repression and effecting interest rate reform faster than expected. painful for some// the attack by Niu Wenxin, a financial editor with the state broadcaster China Central Television, suggests they could begin to face tougher opposition. Mr Niu called for the outright prohibition of Alibaba’s Yu’e Bao fund. “It is attacking the financing costs of Chinese society as a whole and attacking the overall economic safety of China,” he wrote in a blog post published on Friday. “Yu’E Bao is like a vampire that has climbed onto the body of banks. It is a classic financial parasite.”
Related: China banks strike back against threat from Internet finance | Reuters Industrial and Commercial Bank of China, Bank of China, Bank of Communications and Ping An Bank have all launched new products in recent weeks that match the attractive features of Yu’e Bao. Banks are also lobbying regulators to introduce curbs on the growth of on-line funds offered by non-banks. Ultimately, however, competition for deposits will drive up banks’ funding costs and crimp profit margins this year.
Related: 动了银行的奶酪 余额宝做错了吗？_财经频道_一财网 对于近期争议，《
Asylum Fraud in Chinatown: Industry of Lies – NYTimes.com The conversation, in December 2010, was secretly recorded by federal officials conducting a wide investigation of immigration fraud in New York’s Chinese population. The inquiry has led to the prosecution of at least 30 people — lawyers (including Mr. Wang), paralegals, interpreters and even an employee of a church, who is on trial, accused of coaching asylum applicants in basic tenets of Christianity to prop up their claims of religious persecution. All were charged with helping hundreds of Chinese immigrants apply for asylum using false tales of persecution.
6 Experts On What Worries Them About China – Business Insider We asked six China experts the same question. What worries you the most about China? Here are their responses// yours truly one of the six, only one to not have debt at top of the list. There are two more parts to the interview not yet published. in the second part I mention the debt mess
BUSINESS, ECONOMY AND TRADE
China ‘ban’ on letters of credit leaves banks in limbo | South China Morning Post According to widespread reports at the end of last year, the People’s Bank of China told the mainland’s Big Four banks to stop issuing letters of credit backing offshore bonds issued by mainland companies. There was concern that state banks’ SBLC-backed deals crowded out demand for their own bonds, as issuers perceived them as all coming from the same credit.
Luxury Home Broker Sotheby’s to Open in Beijing China | Mingtiandi In an effort that appears motivated by the demand among China’s newly wealthy consumers to buy homes overseas, the luxury residential broker has signed an agreement with Beijing Xin Rui Zeng Yi International Real Estate Brokerage Co. Ltd., which is owned by Plus Investment Holding Group (Beijing), to open Beijing Sotheby’s International Realty.
Chicago architecture firms are redesigning China – Chicago Tribune In a three-part series, “Designed in Chicago, Made in China,” Chicago Tribune architecture critic Blair Kamin and photographer John J. Kim provide a fascinating and revealing look into China’s urbanization and the role that Chicago architects are playing in the reshaping of China’s cityscapes, using as their template the three pillars of urban life:
China’s Big State Firms Gain More Clout in Strategic Sectors – WSJ.com “Beijing has been unable to control strategic sectors in which locally owned SOEs [state-owned enterprises] or private firms predominate because of local government backing_ so Beijing promoted consolidation campaigns_” where large state-owned acquire other companies_ says Scott Kennedy_ a China expert at Indiana University.
Online agents cut luxury bills for Chinese buyers – FT.com While Ms Liu loves shopping, she buys mostly for others in her role as a daigou agent – a growing group of people who specialise in helping mainland Chinese consumers secure products from overseas.
A New Light on Regulators in the Dark – NYTimes.com risky to assume that the PBoC somehow has better grasp than the US Fed did back then // My initial takeaway from these voluminous transcripts is that they paint a disturbing picture of a central bank that was in the dark about each looming disaster throughout 2008. That meant that the nation’s top bank regulators were unprepared to deal with the consequences of each new event.
POLITICS AND LAW
中油国际党委书记沈定成失联 秘书四人组悉数沦陷_财经频道_一财网 with the apparent investigation of Shen Dingcheng, Zhou Yongkang’s “group of four secretaries” now all in custody //2 月18日，中央纪委监察部网站发布消息，
China Focus: What is this “middle way” the Dalai Lama preaches? – Xinhua | English.news.cn A bylined opinion article was published on Saturday to expose the true nature of the “middle way” approach preached by the Dalai Lama. Following is the translation of the article // 新华网揭达赖“中间道路”：1/4国土划入“大藏区”|
全面深化改革 让我们的制度更加成熟更加定型-时政频道-新华网 always nice when Zhuangzi is quoted in support of current policies// 《庄子》有一名句：“其作始也简，
官员司机自曝隐形福利：曾通过领导买到半价房_网易新闻中心 a look at all the extra income drivers of officials used to make// “与2006至2011年相比，
FOREIGN AND DEFENSE AFFAIRS
Beijing ‘exploring whether to change tactics’ over North Korea relationship | South China Morning Post Jia Qingguo , an international relations professor at Peking University, said “nation-to-nation” ties would allow Beijing to deal with North Korea in a more “normal” way, focusing more on China’s national interests instead of heavily emphasising ideology. That would clearly spell out under what conditions Beijing would continue to provide aid to Pyongyang. “China is very upset with the younger Kim,” Jia said. “China had expectations he would further open up the North Korean economy, but now it is not sure if such expectations can continue.”
India’s Modi targets China in election speech – Channel NewsAsia India’s opposition leader Narendra Modi, favourite to win this year’s polls, on Saturday warned neighbour China to shed its “expansionist mindset” as he toured a disputed region in the remote northeast.
U.S. Air Force reveals ‘neighborhood watch’ spy satellite program – Yahoo News The United States plans to launch a pair of satellites to keep tabs on spacecraft from other countries orbiting 22,300 miles above the planet, as well as to track space debris, the head of Air Force Space Command said.
Top official says Chinese security depends on Afghan stability | Reuters Foreign Minister Wang Yi was due to meet President Hamid Karzai during his visit, which coincides with preparations by U.S. and allied troops to draw down their forces after more than 12 years of fighting Taliban extremists. China, which shares a short border with Afghanistan in the country’s mountainous northeastern corridor, has become increasingly concerned about security in its western region of Xinjiang, where it says Muslim extremists receive help from militants in neighboring countries.
UK government assures Chinese students that English test ban won’t affect their visa applications | South China Morning Post British authorities’ decision to suspend English language proficiency tests organised by the US-based Educational Testing Service (ETS) over alleged fraud has raised doubts among many Chinese students hoping to study in Britain.
Captain James Fanell | Commander, U.S. Pacific Fleet Capt. Fanell is the moderator of the defense and academic related Red Star Rising information service dedicated to monitoring the rise of China and its impact upon U.S. national security interests throughout Asia. He has also authored several articles in the Hoover Digest, Proceedings, and Naval Intelligence Professionals Quarterly.//have not seen the red star rising service, must be interesting
Japanese residents demand removal of ‘comfort women’ statue in California – AJW by The Asahi Shimbun The lawsuit demanding the statue’s removal was filed in the U.S. District Court for the Central District of California on Feb. 20 by the Global Alliance for Historical Truth (GAHT), a nonprofit group made up of Japanese citizens living in the United States and naturalized Americans from Japan. It says the city’s actions could cause confusion over U.S. diplomatic relations with Tokyo given Japan’s stance over the delicate and controversial issue. In Tokyo, Chief Cabinet Secretary Yoshihide Suga clearly empathized with the lawsuit in a news conference held Feb. 21. //in Glendale, California. Perhaps GAHT could be countered with GFYS
HONG KONG, MACAO AND TAIWAN
Thousands march in Hong Kong against erosion of media freedoms | Reuters Carrying “Free Speech, Free Hong Kong” banners, some 6,000 protesters including working journalists, demanded Hong Kong protect media freedoms as a core value underpinning the financial hub’s success and global reputation. In recent years, Hong Kong journalist and rights groups have warned of mainland Chinese propaganda officials influencing local newsrooms, deepening ties between Hong Kong media bosses and Beijing, greater censorship, and the dismissal of influential liberal journalists.
Million-Dollar Gamblers Spark Latest Macau Turf Fight – Bloomberg The latest battle pits casinos against their long-time allies, so-called junket operators that for years have recruited rich gamblers from China, whisked them to Macau and given them interest-free loans to circumvent limits on cash they can take out of the mainland. Now companies like Sheldon Adelson’s Sands China Ltd. (1928) are offering the same services, aiming to cut out the middlemen. At stake are profits from the world’s biggest gambling market, which with $45.2 billion in revenue last year, is almost seven times the size of the Las Vegas Strip.
TECH AND MEDIA
Focus Media targets year-end $1bn HK listing – FinanceAsia Focus Media is looking to list in Hong Kong to raise at least $1 billion as soon as the end of this year, according to sources familiar with the situation. The size of the IPO could even be “much larger” given the company is growing at a fast pace and its valuation will increase accordingly, said one source. Focus Media, China’s largest out-of-home advertising network operator, has posted an annual growth rate of 10%-15% and has a strong and stable cash flow. Its EBITDA was $480 million and Capex was less than $50 million last year, according to sources.
China’s Huawei seeks U.S. foothold in smartphone race: executive | Reuters After launching five new devices at the Mobile World Congress trade fair in Barcelona, Huawei’s Colin Giles said the group was taking early steps in the United States to build better relationships with mobile operators and directly with consumers via online shops.
Wolff: What is ‘Forbes’ worth?–USA Today Forbes has recently been dampening expectations about its sale price. Instead of $400 million or $500 million, the deal seems likely to be significantly less than that. Then there is its reported Chinese buyer, which might appear to be more like a whale-size Forbes “contributor” ready to make the brand its willing mouthpiece rather than a publisher with a fine touch. This all might seem terribly discouraging for people in the publishing business. But then again, respectability is an old model.
Mobile Game-Maker Chukong Said to Plan $150 Million IPO in U.S. – Bloomberg Deutsche Bank AG and Morgan Stanley are helping prepare the IPO, said the people, who asked not to be identified because the information is private. Chukong, based in Beijing, aims to start the offering in the second half, they said. Founded in 2010, Chukong develops leisure games for smartphones, according to the company’s website. Fishing Joy, one of its most popular games, has attracted more than 200 million users in China, the website shows.
Chipmakers dream of China as they head to Spain’s smartphone gala | Reuters From Qualcomm and Intel to MediaTek, Marvell and Broadcom, the suppliers of the crucial components that power smartphone applications and drive high-speed wireless connections are scrambling to capitalize on opportunities taking shape as Chinese brands and telecoms carriers such as China Mobile gear up for 4G LTE, or Long-Term Evolution. China’s move to LTE, a standard now adopted mostly in the United States, gives Intel and other chipmakers a unique chance to knock dominant LTE chip supplier Qualcomm off its perch.
Tencent, Alibaba mobile payment war escalates｜WantChinaTimes
SOCIETY, ART, SPORTS, CULTURE AND HISTORY
CCTV host Chai Jing labeled a “traitor” for giving birth in the US | Offbeat China Pictures of famous China Central TV host Chai Jing holding a newborn baby at the airport have been making the rounds on Chinese social media in the past few days. It’s reported that Chai, who is sometimes referred to as “the Chinese liberals’ goddess”, gave birth to a daughter in October 2013 in the United States. //another birth tourism abuse
Mr Selden’s Map of China by Timothy Brook, review – Telegraph Those questions are at the heart of Timothy Brook’s journey to understand “Mr Selden’s Map of China” . The quest is fascinating and picaresque, a sort of cartographical Tristram Shandy with a sure-handed narrator steering us from Ming dynasty China to pre-Civil War Oxford to the Spice Islands of South-East Asia. Much of the book is in the first person, a daring trick for a work of serious history, but one that works very effectively. The reader feels as if he or she were looking over Brook’s shoulder as he muses on the page about what he can know about the map, as well as what he cannot. And the journey is a complex one.
Old Railroad Stirs Memories of a Pre-Industrial China – NYTimes.com The idea to write an article on the now-vanished Xinning Railway came to me after hearing stories from my father and his older brother, Sam Wong. The railroad cut through the heart of the lush Taishan region of Guangdong, the point of origin for many overseas Chinese. A private railroad, it had been built as a modernizing project for the region by Chen Yixi, a Chinese immigrant to the United States who had lived for years in Seattle and made a fortune as a labor contractor on railway projects in the American West.
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH
China sends government teams to investigate pollution | Reuters Twelve teams of inspectors will head to the cities of Beijing, the nearby city of Tianjin and Hebei province to see how authorities are responding to the worst air pollution in months, the Ministry of Environmental Protection said on Sunday.
Beijing Now Has World’s 4th Highest Office Rents Says Cushman | Mingtiandi According to the Office Space Across the World report issued by real estate consultancy Cushman & Wakefield, in the 2013 world rankings of the most expensive office locations Beijing’s CBD surged from seventh position in 2012 to fourth for last year, despite flat rental rates. London’s West End is the world’s most expensive office market for the second year in a row, retaining its title ahead of runner-up Hong Kong, according to the report.
BOOKS AND LITERATURE
Stranger Than Fiction | ChinaFile A Q&A with Yu Hua–In January, Yu’s Boy in the Twilight: Stories of the Hidden China, was published in English in the United States by Pantheon. His latest novel, The Seventh Day, will be published in English in January 2015. I conducted this interview with Yu over email over several months beginning in July 2013.