"Sinocism is the Presidential Daily Brief for China hands"- Evan Osnos, New Yorker Correspondent and National Book Award Winner
My Dealbook column this week discusses the weak trade data, horrible sentiment in and about China, and a remarkably prescient 2011 talk in which Li Zuojun (Weibo), a DRC economist, predicted an economic crisis in July or August 2013. Here is an excerpt:
This column has argued several times that Beijing does have a plan and is serious about economic reform. Economists inside the Chinese government, and certainly Premier Li, understand very clearly what the challenges are.
In August 2012, Li Zuojun, deputy director of the Institute of Resources and Environmental Policy Research at the Development Research Center of the State Council, published an article detailing nine major challenges the Chinese economy faces. His article received a fair amount of notice.
During the interbank crisis in June, Li Zuojun became an Internet sensation, not for that 2012 article but for a talk (Chinese) he gave in 2011 that predicted an economic crisis in July or August 2013. In that talk, Mr. Li said that China was in the midst of a bubble that would pop by 2015 or 2016.
Mr. Li argued that the new leadership that would be in place by 2013 would have the choice of either taking on the bubble and letting it run, in which case they would be responsible, or popping it soon after they took power in 2013, in which case they could blame the previous administration.
In addition, the new leaders could reset the benchmarks to a lower base and, assuming they could manage through the social challenges of an economic dislocation, would be able to show strong growth through the remainder of their term.
The Development Research Center is an influential government policy research group, one that worked with the World Bank to write the “China 2030” report, a road map for ambitious economic reforms released last year. Premier Li is widely believed to have supported the center in its work with the World Bank.
Transparency is not a strength of the Chinese government, so while there are signs that bigger things are going on it is difficult to be certain. Regardless, the long, hot summer is just getting started and the economy has more weakness ahead.
The full China Insider column can be read here.
A reader has put together a terrific music video about life in Beijing. Rap may not be to everyone’s taste but this MV is well done and the creators are clearly passionate about Beijing. Beijing State of Mind is on Youtube and you can read about the production process at Blog of Niffgurd: Beijing State of Mind.
Thanks to everyone who responded to the ad for interns. They are unpaid for now and will probably require sixty minutes a day, three days a week. I will respond to everyone this weekend. If the lack of payment means you are no longer interested please let me know.
Today’s Links:
THE ESSENTIAL EIGHT
Strategic and Economic Dialogue Joint Opening Session Opening Comments Wang and Yang paragons of brevity next to Biden and Kerry?
Related: U.S. Urges Level Playing Field as China Pledges Reforms – Bloomberg “Our relationship is, and will continue to be, God willing, a mix of competition and cooperation,” U.S. Vice President Joe Biden said during a ceremony at the State Department marking the annual U.S.-China Strategic and Economic Dialogue. “Competition can be good for both of us. And cooperation is essential.”
Related: U.S.-China relationship like a (straight) marriage -China’s Wang | Reuters The relationship between the United States and China is like a marriage, with both parties building trust and cooperation, a visiting Chinese official said on Wednesday. However, it is not like a gay marriage, Vice Premier Wang Yang quipped as he sat next to U.S. Treasury Secretary Jack Lew…”In China when we say a pair of new people, we mean a newlywed couple,” Wang said about himself and Lew. “Although U.S. law does permit marriage between two men, I don’t think this is what Jacob or I actually want.”
Related: 汪洋：习主席与奥巴马会晤时说“兔子急了也踹鹰”_资讯频道_凤凰网 我觉得对话争论常常是激发人创造性思维的重要方式，争论中对手被逼到墙角的时候，往往会急中生智，我们习主席在跟奥巴马会晤的时候就说了“兔子急了也踹鹰”。急中生智的时候，或者能找到新的翻墙方法，或者能达成合作的共识，从而解决了问题。 正如中国古诗说的，“山穷水尽疑无路，柳暗花明又一村”，我也想总结一句带有哲人级的格言，对话是推动人类社会进步的重要工具，我们愿意对话，愿意听到不同的声音，愿意接受正确的意见，因为我们在全球化的进程中，在包括美方在内的其他各方的对话中，从不同的声音和意见中，的确找到了一些影响我们进步的问题，从而改进了我们的工作。当然，对那些可能会动摇我们基本制度，损害我们国家利益的意见，这一点我们和美国是一样的，无论什么样的对话，我们都不可能接受，我们会守住自己的底线。
Related: U.S., China agree to cut emissions from vehicles, coal | Reuters The United States and China, the world’s top emitters of greenhouse gases, agreed to five initiatives on Wednesday to cut carbon output from the largest sources, including heavy duty vehicles, manufacturing and coal-fired plants, the State Department said.
Related: China ready to hand over audit documents to U.S. regulators | Reuters “The timing is very interesting,” said Brian Burke, counsel for Shearman & Sterling in Hong Kong. “Now on one side of the globe there is an apparent thawing of what has been a very tense relationship, and yet in the United States the SEC is still going full steam ahead against the auditing companies without relenting.”
Related: Your “Special Access” Pass to the U.S.-China Strategic and Economic Dialogue | DipNote The U.S. Department of State and the U.S. Department of the Treasury are hosting the fifth round of the U.S.-China Strategic and Economic Dialogue (S&ED) in Washington, D.C. this week, and we’re giving you unprecedented access. One way you can keep up with the events as they occur is to watch the broadcasts on video.state.gov/live. Here’s a list of events scheduled to be broadcast live (subject to change):
Related: Lawmakers urge firm U.S. line on China in bilateral talks | Reuters The letter to Obama cabinet officials on the eve of the annual U.S.-China Strategic and Economic Dialogue contained a laundry list of complaints, from software piracy to market and regulatory barriers and forced technology transfer. “We remain very concerned that China has halted – and in many cases reversed – its market reforms,” the lawmakers said in the letter to Secretary of State John Kerry, Treasury Secretary Jack Lew, Commerce Secretary Penny Pritzker and U.S. Trade Representative Michael Froman.
Differences on Cybertheft Complicate China Talks – NYTimes.com Mr. Snowden’s revelations may be a gift to the Chinese, because they shift the focus from China’s covert activities to Washington’s. And even American scholars say the Chinese have a good argument. “It is not true that ‘unwritten rules’ prohibit economic espionage,” said Jack Goldsmith, a Harvard law professor and cyberexpert who served in the Bush administration. “Economic espionage is expressly prohibited by U.S. domestic law but is not prohibited by international law, written or unwritten, and it is widely practiced.” The most fruitful part of the conversations, American officials indicated in a briefing late on Wednesday, dealt with North Korea and climate change, two areas where the governments have been moving into alignment.
Related: Commentary: China-U.S. dialogue to transcend talks of cyber security – Xinhua | English.news.cn While admitting its extensive hacking activities, the U.S. side now argues that while it did spy on other countries, it didn’t do it for commercial purposes. However, without giving any details or proofs, it sounds like an attempt to cover one’s old mistake with a new excuse, and a bad one. Moreover, by dividing cyber espionage into “bad” and “good” activities, Washington is trying to dictate the rules for global cyber domain, which is a public space.
Related: Asia Unbound » The Positive That Might Have Come Out the U.S.-China Cybersecurity Working Group The one possible bright spot is the broader discussion of international cyberspace rules. There have not been any public statements yet on what concrete rules or norms were put on the table or how the two sides may increase cooperation. But it seems likely that the United States pressed very hard for the norm of state responsibility—-governments are responsible for attacks coming from their territory. Senior U.S. officials have said that President Barack Obama raised this with President Xi Jinping at their “shirt sleeves” summit in June. Also in June, China signed on to a report prepared by the United Nations Group of Government Experts that endorsed the application of the United Nations Charter and international law to cyberspace. James Lewis of the Center for Strategic and International Studies, who wrote the report, has said that it “included agreement that states would not use ‘proxies’ for malicious cyber actions.”
Related: Snowden: I never gave any information to Chinese or Russian governments l Glenn Greenwald | guardian.co.uk NSA whistleblower Edward Snowden, in an interview on Saturday and then again Tuesday afternoon, vehemently denied media claims that he gave classified information to the governments of China or Russia. He also denied assertions that one or both governments had succeeded in “draining the contents of his laptops”. “I never gave any information to either government, and they never took anything from my laptops,” he said. The extraordinary claim that China had drained the contents of Snowden’s laptops first appeared in the New York Times in a June 24 article. The paper published the claim with no evidence and without any attribution to any identified sources.
[视频]李克强主持召开部分省区经济形势座谈会时强调 统筹推动稳增长调结构促改革 完成全年经济社会发展主要任务_新闻频道_央视网 Wednesday CCTV Evening News on Li Keqiang’s comments on economy //李克强强调，我国经济正处于必须依靠转型升级才能持续健康发展的阶段，统筹推动稳增长、调结构、促改革十分重要。稳增长可以为调结构创造有效空间和条件，调结构能够为经济发展增添后劲，两者相辅相成；而通过改革破除体制机制障碍，则可为稳增长和调结构注入新的动力。宏观调控要立足当前、着眼长远，使经济运行处于合理区间，经济增长率、就业水平等不滑出“下限”，物价涨幅等不超出“上限”。在这样一个合理区间内，要着力调结构、促改革，推动经济转型升级。与此相适应，要形成合理的宏观调控政策框架，针对经济走势的不同情况，把调结构、促改革与稳增长、保就业或控通胀、防风险的政策有机结合起来，采取的措施要一举多得，既稳增长又调结构，既利当前又利长远，避免经济大起大落。
Related: Weak Trade Points to China Slowing – WSJ.com Recent statements suggest Beijing may be more tolerant of slower growth than previously expected. “I thought their bottom line for GDP was 7%,” said Ma Xiaoping, China economist at HSBC . “Now it looks like it could be lower than that.” Indeed, as the rate of economic growth has trended lower quarterly and threatens to fall below the government’s 7.5% target for the full year, Mr. Li, who holds the reins on China’s economic policy, reiterated his commitment to steer clear of any fresh stimulus. “As long as the economic growth rate, employment and other indicators don’t slip below our lower limit and inflation doesn’t exceed our upper limit, [we’ll] focus on restructuring and pushing reforms,” Mr. Li told provincial chiefs on Tuesday.
Related: 李克强要求增长率保“下限” 温和刺激可能出台_财经频道_一财网 他同时表示，宏观调控要立足当前、着眼长远，使经济运行处于合理区间，经济增长率、就业水平等不滑出“下限”，物价涨幅等不超出“上限”。在这样一个合理区间内，要着力调结构、促改革，推动经济转型升级。 兴业银行首席经济学家鲁政委对《第一财经日报》表示，政府的上述表态显示，在坚持“调结构”导向下，中国政策钟摆再度转向“稳增长”，但也明确“稳增长”与“调结构”要相辅相成。
Shanghai plan to lure foreign investors to free-trade zone | South China Morning Post The central government will unveil as early as this week a major package of new policies, covering industries from financial services to shipping and transport, as part of its plan to create a Hong Kong-like free-trade zone in Shanghai. The plan, which could contain as many as 21 separate initiatives, will be a template for the potential nationwide roll-out of structural economic reform and liberalisation, two sources with first-hand knowledge of its contents told the South China Morning Post.
Related: 天津自贸区方案已上报国务院_财经频道_一财网 Tianjin free trade zone plan sent to the State Council // 据悉，天津方面的自贸区方案已经上报国务院有关部门，极有可能在一个月后确定最终方案内容。接受记者采访的天津方面人士，亦对方案迅速获批持乐观态度。
Huxiu.me — EXCLUSIVE: 3rd Party Tracks Show Sina Weibo User Activity Declined More Than 30% A 3rd party data tracking service, WeiboReach(知微), has recently done a research on user activity of Sina Weibo. It investigated in the part of users who has more than 10 thousands followers, so-called 大V (influencial verified users). Here’s what they’ve found: After two years (2009 – 2010) of growth, the total number of weibo posts reached its peak in 2011 and 2012, and started to decline in later 2012. // hear Sina very unhappy with WeiboReach
Related: 微博活跃度下降启示：内容永远为王–舆情频道–人民网 来自虎嗅网的咨询表明：在2012年中期到达顶峰后，新浪微博活跃度出现快速下滑。截至到现在，已经降至2011年初的水平，距高峰时期持续下滑超过30%。在面对“最近半年以来，上微博的次数与动力越来越少，而更多的刷信息时间留给了微信的朋友圈？”这样的追问时，相信很多人都暗暗中枪。这样的数据和诘问是不是又暗示着互联网用户群体的又一次大规模迁徙即将到来？
China to Report Air Pollution Monitoring Data in 116 More Cities – Bloomberg A State Council notice told 116 more of its cities to disclose air quality monitoring data, including readings for pollutants such as PM2.5 and ozone, adding to 74 cities that already do so. PM2.5 refers to fine air particles that pose risks for lung and heart diseases. The country will rank its major cities by the severity of their air pollution, according to the statement, posted on the State Council website yesterday and dated July 1.
Related: Ministry calls air pollution study ‘unconvincing’ |Society |chinadaily.com.cn The Ministry of Environmental Protection said on Wednesday that a recent study about the link between air pollution and life expectancy is unconvincing due to the limited samples on which it is based. Liu Zhiquan, an official with the ministry, told China News Service on Wednesday that the pollutants emitted in coal burning include heavy metals, small particles and sulfur dioxide, which can affect human health, but whether the pollution can shorten lives or not is still unknown.
Chinese Buyers Flood U.S. Housing Market | AOL Real Estate “The Chinese came out really huge in the past year,” said Jonathan Miller of Miller Samuel, a New York-based appraiser. Chinese buyers accounted for 18 percent of the $68.2 billion that foreigners spent on homes during the 12 months ended March 31, according to the National Association of Realtors. At a median price of $425,000, the Chinese are also buying more expensive homes than other foreign buyers, who spent a median of nearly $276,000 on U.S. homes. And nearly 70 percent of those pricey Chinese deals were made in all cash.
China donates wax figure of Kim Jong-il to DPRK[1]|chinadaily.com.cn The wax figure of deceased former top DPRK leader Kim Jong-il made by Great Man Wax Museum of China to be sent to DPRK is displayed at the sending-off ceremony in Beijing on July 9, 2013. The ceremony was jointly held by the museum and the International Department of the Central Committee of CPC. The waxwork is scheduled to be unveiled in DPRK on July 27, to mark the 60th anniversary of the 1950-53 Korean War. // 中方向朝鲜赠送金正日蜡像_网易新闻 more pictures of wax statue of Kim Jung-il that China has gifted North Korea
BUSINESS AND ECONOMY
China trade numbers suggest deeper slowdown – FT.com “Exports were too strong earlier in the year, now it’s a payback,” said Wei Yao, an economist with Société Générale. “But it does show that external demand for Chinese goods is really suffering and that leads to the point that Beijing needs to rethink its currency policy. There is no doubt that the renminbi is too strong.” China will report its second-quarter gross domestic product data on Monday. Growth is widely expected to have slowed to about 7.5 per cent, its second consecutive quarterly slowdown.
Why China’s June trade data are almost unremittingly bad | FT Alphaville Coming so soon before the Q2 GDP data, which is due next Monday, the data have raised the possibility — noted by the FT’s Simon Rabinovitch — that China might actually miss its growth targets for the first time in 15 years. The 3.1 per cent contraction in exports, compared to June 2012, was in stark contrast to expectations of 3.7 per cent growth. Imports fell by 0.7 per cent and expectations were for 6 per cent growth.
Cash for copper in China (or whack-a-mole financing) | FT Alphaville Kate’s post on the June China trade data mentions that commodities imports were the only bright spot (although it’s a somewhat dubious bright spot if it indicates a resurgence in investment). It turns out that copper imports were particularly strong, recording a 9.7 per cent year-on-year increase in June, a rather large change compared to a 14.6 per cent decline in May. Goldman point us to one compelling reason why that might be the case. It’s basically another case of whack-a-mole financing in China. Hit over-invoicing over the head and up pops ‘Cash For Copper’ (CFC) financing.
UBS to Citigroup Say Yuan May Weaken After Surprise Export Drop – Bloomberg China may allow the yuan to weaken in the second half to aid exports after June shipments contracted by the most since the global financial crisis, according to economists from UBS AG to Citigroup Inc. The currency should be allowed to depreciate “at least marginally,” Wang Tao, Chief China Economist at UBS in Hong Kong, wrote in an e-mailed interview. Ding Shuang, Citigroup’s senior China economist, expects “periodic depreciation,” while Credit Suisse Group AG’s Tao Dong said he anticipates a “minor” decline against the dollar.
China: who’s buying? | beyondbrics The drag on export growth from the G3 (US, EU and Japan) increased to 2.6pp in June (May: -2.3pp; Jan-May: +0.2pp). Exports to the G3 comprised 40% of all China’s exports in 2012. We do not have the breakdown of trade to the G3 by commodities yet, but we note that the weakness has been broad-based across all product goods since March for the EU, while for the US and Japan, exports of electronics goods held up relatively better than other goods until May.
Deteriorating China GDP Forecast [CHART] – Business Insider Bloomberg BRIEF’s Michael McDonough tweeted this chart of China’s GDP forecasts for the second, third, and fourth quarter of 2013. Clearly economists are expecting slower growth:
Chinese Outlook On Economy Worsens – Business Insider The monthly survey is given to 200 long-term residents in 61 cities across China. “Some 22% feel safe about their income and jobs, down 3 pp MoM, and another 22% are pessimistic, up 7 pp MoM and the highest since our first survey in June 2011, while the remaining 56% are neutral about the economic outlook, down 4 pp compared with last month’s survey,” writes Credit Suisse’s Vincent Chan.
Luxury Watch Indicator For China – Business Insider In a new report, Deutsche Bank’s Francesca Di Pasquantonio writes that “de-stocking in China is not yet over.”: “The results of our analysis suggest that while globally exports should hold up reasonably well in a normalizing demand environment, we see de-stocking in China as not yet over, and in light of still poor sell-out indications in Q2 provided by industry players, we do not see a pick-up in supply to that region in the short term
人民日报- 正确认识我国经济形势和发展前景（学术交流）——“中国经济增长与周期论坛（2013）”综述–王少国 当前，国际经济形势错综复杂，我国经济下行压力增大。如何看待当前经济形势？我国能否跨越中等收入陷阱？为什么必须加快经济转型升级？日前，首都经济贸易大学、中国社会科学院经济研究所等单位在北京举办了“中国经济增长与周期论坛（2013）”，来自高等院校和社会科学研究机构的近百名专家学者围绕这些热点问题进行了深入讨论，提出了一些颇有启发的见解和思路。
The Perils of Overseas M&As with Chinese Characteristics – Caixin Chinese overseas merger and acquisition activity reflects distinct characteristics of the domestic economic system. These characteristics include institutional features of state-owned enterprises (SOEs), an opaque government approval system and the unusual lending activity of big banks. Chinese enterprises must consider the impact of these forces and face the resulting challenges both at home and abroad.
Yum Profit Tops Estimates as KFC’s China Sales Drop Slows – Bloomberg Yum has faced a backlash in China at KFC after an outbreak of avian flu scared diners away from poultry and a former chicken supplier was investigated for selling food with too much antibiotics. Sales at Chinese stores open at least 12 months fell 10 percent in June. That was less than the 12 percent decline estimated by analysts surveyed by Consensus Metrix and better than drops of 19 percent in May and 29 percent in April.
Using China’s Mountain of Cash – Caixin The country is under tremendous budget pressure. In the first five months of the year, central government revenues grew by only 0.1 per cent, 6.9 percentage points lower than its target for the year. The combined local and central government revenues for the same period similarly fell short, growing by 6.6 per cent. The target set for the year is 8 percent… The government is by no means poor. Its fiscal revenue deposits in the central bank reached 3.23 trillion yuan by the end of May. This does not include the hundreds of billions it deposited with commercial banks. The root cause of this ballooning stash is bureaucrats’ self-serving mentality. Government departments regularly ask for much more money than they actually need. This is why, near the end of the budgetary year, we see officials spending money as hard and fast as they can. Even so, what’s left over has accumulated into no small mountain.
Bright-eyed foreign graduates see internships as way onto career ladder – Frontpage – CHINA – Globaltimes.cn With the unemployment rate at 7.6 percent in the US, many recent graduates look to China. There are no official figures for the number of foreign interns in China as the majority of them come to China on tourist, student or business visa. However, several third-party internship organizers told the Global Times that their business is booming and the number of applications is growing. //how much do they charge?
房地产再融资开闸预期强烈 业内人士近日在接受中国证券报记者采访时表示，从有关部门近期对房地产上市公司融资政策的表态可以看到，虽然在短期内相关政策口径并无实质性变化，但是，与宣布相关政策时相比，仍有细微差异。这种变化预示着，未来房企融资政策可能会有条件地放开。
Advice for Small Fish in China’s Real Estate Market: Swim Fast – China Real Time Report – WSJ “Being a small fish is getting more difficult. The bigger fish are swimming faster,” said Kai Chen, chief executive officer of mid-sized developer Yango Group. “I expect that in eight to 10 years, China’s top 10 developers will have 20% of the market.”
Private-equity lessons from the front line | McKinsey & Company McKinsey principal Bruno Roy recently sat down in Beijing to consider the outlook with four leading private-equity investors: Jin-Goon Kim, a partner at TPG; Suyi Kim, managing director of Asian private equity at the Canada Pension Plan Investment Board; David Qiu, a managing director at Hony Capital; and Jonathan Zhu, a managing director at Bain Capital Asia.
When the Cracks Appeared – Caixin long piece on the June liquidity crunch// “After this lesson, everyone will normalize their various off-balance-sheet business,” the Harvest Fund source said. “In particular, the model of using short-term interbank capital to support long-term off-balance-sheet business will certainly shrink. This means that the shadow banking system will shrink, which is something that regulators are willing to see. “But financial institution deleveraging will exacerbate the spread of liquidity risks and will inevitably impact the real economy.”
央行叫停线下交易 银行间债市潜规则终结_财经频道_一财网 习 惯了交易所游戏规则的股民们很难想象，在银行间债券市场，交易双方可以私下成交，不必经过官方电子交易系统。这种不透明的线下交易堪称关联交易的温床，由此引发的利益输送可想而知。 如今，这种在银行间债市流行多年的潜规则看似走到了穷途末路。昨日，央行网站公布了《中国人民银行公告（2013）第8号》（下称《公告》），旨在规范银行间债券市场的交易结算行为，通过叫停不透明的线下交易，建立全市场网上交易制度，力促市场阳光化…这是央行治理银行间债市的最新举措。多位银行间市场人士向《第一财经日报》记者表示，自4月份银行间债市整顿风暴以来，不透明交易产生的利益输送备受诟病，通过杜绝线下交易，可以极大减少利益输送的发生。与此同时，鉴于线下交易以丙类户居多，这应当是将银行理财等丙类户升级为乙类户的前奏。
Andrew Batson: The SOE Irritant in U.S.-China Relations – WSJ.com Getting China to reduce subsidies to SOEs is tricky, but the U.S. has stepped up its use of trade remedies to fight against subsidy policies. It wants to incorporate restrictions on SOE aid into the Trans-Pacific Partnership and other new trade deals under negotiation. These are not necessarily bad policies, but their popularity appears to be based on a mistaken understanding of how SOEs actually function. Simply put, the real problem is not that China’s state firms are too profitable or too subsidized, but that they are too inefficient. Most SOEs are not globe-straddling colossi flush with cash–they are parochial, poorly performing companies. As the Chinese government cools down the rapid credit growth that many SOEs rely on, the real condition of its state sector will become increasingly clear.
US senators are still squealing about a Chinese takeover of US pork – Quartz has Ned Beatty ever played a Senator? // The US Senate Agriculture Committee heard testimony today on the pros and cons of the takeover of pork company Smithfield Foods by China’s Shuanghui International. The title of the hearing alone sounded foreboding: “Smithfield and Beyond: Examining Foreign Purchases of American Food Companies.” It’s clear that some US politicians won’t let the largest Chinese takeover of a US company go quietly, but what’s still unclear is how much it will matter in the end.
Prospects for US-China Trade in Meat Products and Associated Investment Opportunities–PDF the first Paulson Paper on Investment, released earlier today. Written by Dermot J. Hayes, Pioneer Hi-Bred International Chair in Agribusiness at Iowa State University and one of America’s most distinguished experts on the economics of meat, the paper is especially timely in light of Shuanghui International’s proposed acquisition of Smithfield Foods. In his paper, Hayes argues that the Chinese government, the agriculture community, and consumers are facing a quandary with increasing prices and an inability to produce enough high quality meat to meet increasing demand. Savvy investors, he argues, are in a position to capitalize on the Chinese government’s inevitable recognition of the need for policy changes in the agricultural sector. .
The Slow Boat from China – By Stephen S. Roach | Foreign Policy The message from China’s fiscal and monetary authorities is clear: the days of open-ended hyper growth are over. At the same time, Xi has been calling for a “mass line” education campaign aimed at addressing problems arising from the “four winds” of formalism, bureaucracy, hedonism, and extravagance. Though cryptic, his message appears to underscore a new sense of political discipline, to complement the discipline of China’s fiscal and monetary policies. The Chinese Communist Party, Xi seems to be saying, must realign itself with the core interests of the people and their requisite economic fundamentals.
地方GDP数据注水常年高于中央_财经频道_一财网 《每日经济新闻》记者以2012年数据进行详细剖析后发现，当年全国GDP同比增长7.8%，而在地方，除了北京、上海以外的其他29个省份，增速都高于全国水平。 针对GDP的央地数据差异，中国社科院区域经济研究专家徐逢贤表示，地区GDP增速高于全国、地区GDP总量大于全国，这主要由两方面原因造成：一是因为地方和中央在统计口径上稍有不同，地区存在重复计算；二是GDP增长与地方政绩考核紧密挂钩，各地追逐GDP高增长，以至于数据“注水”。 国家统计局局长马建堂此前曾表示，目前各地GDP汇总之和高出全国核算数，主要是因为分级核算中一些重复计算的技术问题以及原始数据存在差异的结果。
POLITICS AND LAW
Party paper’s caution on Xi’ s ‘mass line’ campaign | South China Morning Post “The mass line is not an effective substitute that can realise the function of democracy,” Li Haiqing said in an article published yesterday in the Study Times, a newspaper run by the Central Party School. Li is a Communist Party historian, also with the Central Party School.
人民日报-开展批评不妨“红红脸”（人民论坛） 田之章 page 4 People’s Daily today // 整顿党的作风，不能不想到延安整风；提起延安整风，不能不想起那时的批评和自我批评。 1942年4月19日，当时的《解放日报》登载了一篇“新的‘月旦’”的文章。“月旦”就是品评人物，就是开展批评。文章中登载的批评者与被批评者虽已不知其详，但其中记载的批评的内容，今天读来仍深受教益和感染…批评和自我批评，是我们党的优良传统，是纯洁党内生活的一剂良药。毛泽东同志曾把批评和自我批评看作抵抗政治灰尘和政治微生物的有力武器，要求每个共产党员都要拿起这个武器。在我党历史上，每一次整风活动的开展，都伴随着批评和自我批评这一武器的运用
中纪委监察室增至10个 新设第十室查办王素毅_网易新闻中心 知情人士介绍，此次中央纪委监察部的机构调整后，新合并成立的党风政风监督室，室主任为许传智。许传智曾任中央纪委纠风室主任、国务院纠风办副主任等职。
人民日报-今年各部门一般性支出统一减5% 中央机关钱咋省（政策聚焦） “当前，全国上下正在开展党的群众路线教育实践活动，对政府过紧日子营造了很好氛围。”刘尚希说，群众路线教育实践活动明确反对形式主义、官僚主义、享乐主义和奢靡之风，对各级党政机关转变职能作风提出了更高的要求。当公款大吃大喝、配置高档办公用品、大手大脚讲排场等失去环境与土壤，而厉行节约、精打细算渐成风气，政府自身不必要的、不合理的支出肯定会有明显下降。
人民日报-中央机关一般性支出统一压减5% 5%哪里来？ 从“三公经费”扩展到办公楼建设维修支出、会议费、差旅费等. 中央部门公务接待费预算平均压缩了4.3%，最高的压缩了6%
What Is the “Chinese Dream” Really All About? | ChinaFile
Bribery for Dummies: Leaked List Makes Waves – Tea Leaf Nation How do you get a “license to pollute” in China? Start by giving a RMB2,000 (approximately US$330) gift card to the local environmental protection agency’s director. That is, according to a list that was circulated on China’s social media that allegedly shows 47 government officials as recipients of gifts from a real estate developer in Yinchuan, the provincial capital of Ningxia province. While the authenticity of the list cannot be verified, journalists in China have confirmed that the officials named on the list do indeed exist.
Sinocism Does Not Take Bribes But Will Happily Accept Contributions
China issues timetable for gov’t info disclosure – Xinhua The State Council, China’s Cabinet, on Wednesday issued a timetable for disclosing government spending on receptions, vehicles and overseas trips, as well as information on investigations into major accidents. The timetable was included in a State Council document that orders all localities and government departments to put promoting transparency high on their agenda, in a bid to enhance government credibility. According to the document, provincial governments should disclose their spending on receptions, vehicles and overseas trips starting from 2013, and municipal and county governments should strive to disclose such information by 2015.
陕西眉县官员忙：要卖水泥要买房 | 每经网 近日，《每日经济新闻》记者在当地调查发现，不只是卖水泥，眉县还存在下达购房任务的情形。宝鸡市政府办公室在人民网也证实，眉县确实有给相关单位下达 “指导性任务”的行为。然而，记者多次向眉县县委宣传部求证相关情况时，始终未能获得正面回复。 “水泥的事情曝光后，各个单位都开会了，要求不能乱说。”一位当地知情人士告诉记者。水泥销量纳入年终政绩考核
Zhejiang University Appointment Makes Waves – Economic Observer Opposition to the Organization Department of the CPC and the Ministry of Education’s decision to appoint Lin Jianhua as the new president of Zhejiang University has opened up debate about how leaders of Chinese universities are selected. Should teachers, students and alumni be given the right to elect the president of their university?
住房信息联网爽约 住建部承诺保护地方官员隐私|住房|信息系统|联网_新浪财经_新浪网 local governments won’t put their housing data online without guarantees from central land ministry that only the localities can look up housing data, as afraid of exposure of all the homes they own from corruption…what a joke // 不过，一些地方政府官员对房产信息的披露仍存有担忧和顾虑。为了减少一些地方政府官员的顾虑，住建部也和地方政府签订“安全协议”，承诺联网数据仅用于宏观分析，而且查询权限也保留在地方政府，住建部颁布的《个人住房信息系统使用管理暂行办法》也对信息查询权限作了严格规定。这就意味着以“个人住房信息系统”联网进行反腐的可能性大大降低。
百年复兴：关于中国共产党的“天命”的对话_2013/13_求是理论网 （作者：曹锦清,华东理工大学社会与公共管理学院教授；玛雅，凤凰出版中心主笔）
内蒙古原统战部长王素毅落马前多名旧部下被查处_资讯频道_凤凰网 王素毅曾主政内蒙古巴彦淖尔市，那期间这个城市进行土地大开发、城市建设。王素毅离开两年后，他的多名与土地开发有关联的旧部落马，其中包括巴市原副市长李石贵去年底被判死缓。
FOREIGN AND DEFENSE AFFAIRS
China Has World’s Most Active Missile Programs, U.S. Says – Bloomberg China is “developing and testing offensive missiles, forming additional missile units, qualitatively upgrading missile systems and developing methods to counter ballistic missile defenses,” according to the “Ballistic and Cruise Missile Threat Assessment” report obtained by Bloomberg News. It’s an update to one released in 2009. // interesting timing, on day S&ED opens
War hero Li Zuocheng appointed to top PLA post | South China Morning Post Li Zuocheng, who was decorated for conduct in Sino-Vietnamese war, takes Chengdu command
习近平注重实战 七大军区新阵容形成_中国_多维新闻网 Duowei on personnel changes in the 7 military districts // 【多维新闻】解放军在7月初进行新一轮将领大调整，涉及多位大军区级高级将领。其中成都军区司令员李世明年满65岁退役，副司令员李作成升任司令员。西藏军区司令员杨金山中将调任成都军区副司令员，遗缺由驻重庆的第13集团军军长许勇接任。南京军区副司令员宋普选晋升国防大学校长，执掌中国最高军事学府。总后勤部、武警部队、海军也有多位高级将领履新。此番调整，标志着解放军大军区层面“40后”退出历史舞台，新一届中央军委指挥下的七大军区新阵容正式形成。有分析人士认为，这份军队人事调整方案在某种程度上体现了现任中共中央，尤其是中共总书记习近平选拔任用军队干部的标准，即注重实战，能力突出，以才能为标准而不会过多地涉及现实政治或派系。
Nina Rosenwald – Profile – Right Web – Institute for Policy Studies a reader sent me this, in response to my question Tuesday asking who funds the Gatestone Institute, where Gordon Chang is now a fellow…have to follow the money with all the think tanks // Nina Rosenwald is founder of the Gatestone Institute—a New York-based offshoot of the neoconservative Hudson Institute—and an important funder of a panoply of right-wing “pro-Israel” and anti-Islamic organizations. Dubbed the “Sugar Mama of Anti-Muslim Hate” by journalist Max Blumenthal, Rosenwald is an heir to the Sears Roebuck fortune, a co-chair of the board at the equity firm American Securities Management, and vice president of the William Rosenwald Family Fund, which has donated enormous sums to conservative causes. She is the daughter of the late William Rosenwald, a liberal Zionist philanthropist who founded the United Jewish Appeal in the late 1930s.
China bans fishing in waters off DPRK’s east coast – Xinhua | English.news.cn Chinese fishermen have been told to stop fishing in the waters off the Democratic People’s Republic of Korea (DPRK)’s east coast because of a bilateral dispute over fuel supplies. Waters off DPRK’s east coast are risky due to the complicated and changeful situation in the Korea Peninsula and their proximity to Russia, Japan and the Republic of Korea, China’s Ministry of Agriculture (MOA) said in a statement.
Commentary: Japan runs risk of playing with fire – Xinhua In a short term, Abe may benefit from catering to the rightists, but in the long run, what he has done is equivalent to playing with fire. It’s known to all that the rightist forces in Japan have been on the rise in recent years. As a national leader, Abe fails to contain such tendency. Instead, he even fans the flames and stirs up the troubles.
TECH AND MEDIA
阿里巴巴进军在线旅游搜索 去哪儿紧急应战_财经频道_一财网 First Financial on Alibaba’s efforts to enter online travel sector and the challenge it will pose for Baidu’s Qunar // 一淘依托阿里巴巴强大的资源、客户量及支付宝等优势，进军在线旅游搜索一定会对去哪儿这类在线旅游搜索商产生重大竞争影响。
Ctrip denies Tencent takeover–Global Times Domestic online travel service provider Ctrip Wednesday denied media reports saying that Tencent is seeking an equity investment in Ctrip, according to a statement sent to the Global Times. Earlier media reports said that Tencent, the country’s leading comprehensive Internet service provider, was eyeing a stake of more than 51 percent in Ctrip, aiming to further commercialize its WeChat smartphone app. The market value of Ctrip is around $4.13 billion at present.
China’s box office surges in first half – Xinhua China’s box office sales totaled 10.99billion yuan (1.79 billion U.S. dollars) in the first half of 2013, up 36.2 percent year on year, amid a surge in ticket sales for domestic films. Ticket sales for Chinese films increased 144 percent to 6.85 billion yuan, while imported films posted 4.14 billion yuan in sales, down 21.3 percent year on year, according to data published Wednesday by the State Administration of Press, Publication, Radio, Film and Television.
新浪旗下公司获得第三方支付牌照|第三方支付|新浪|牌照_互联网_新浪科技_新浪网 PBOC issues more third party payment licenses, including to SIna, withs its VIE structure and foreign investors
淘宝列贷款黑名单：欠240元被永久关闭-搜狐IT Taobao publicly shames shops that do not repay their loans from Alibaba Finance, listing amounts due, banning those users for life from Taobao // 据悉，淘宝贷款是由阿里巴巴金融运营的面向淘宝卖家的融资产品，包括订单贷款和信用贷款，贷款额度为1元到100万元。订单贷款的贷款期限30天，贷款利率为0.05%/天，按日计息。信用贷款的贷款期限最长12个月，贷款利率最低0.05%/天，按日计息。
SOCIETY, ART, SPORTS, CULTURE AND HISTORY
American author takes aim at Chinese concept of ‘Leftover Women’ | Marketplace.org At a recent stop in Beijing, Joy Chen meets with a group of fans. She offers them pointers on how to find Mr. Right. Her advice has made the book one of the best-selling self-help books for weeks, and the state-run All-China Women’s Federation declared Chen “Woman of the Year” last year. Public speaking engagements throughout China soon followed. // looking forward to the upcoming CNN On China show with Joy and Leta Hong Fincher
Southern California is big summer destination for Chinese teenagers trying out American education | 89.3 KPCC “The market is huge. There are many, many people in Los Angeles doing this,” said Kenny Hsu. After a long career in banking, he founded EduWin five years ago to bring Chinese teenagers to the Los Angeles area for summer English classes. He’s essentially a broker. He charges $6,000 for a three-week program, which includes classes in a private school, housing and airfare. Most of it goes to cover the costs, but Hsu does take a fee. He said it’s less than 10 percent.
建川博物馆抗战文物展在京开展 新华网北京频道7月8日电（王振）7日，“为了和平，收藏战争”——建川博物馆文物展在北京中国人民革命军事博物馆开幕。 据了解，此次展览分为敌后战场、正面战场、川军抗战、美军援华、不屈抗俘、汉奸丑态、日军暴行七个单元，以丰富的历史实物展示展现了全民抗日战争，从不同角度反映了全民抗战的主题。展览共展出珍贵抗日文物300余件、图片300余张，其中国家一级文物51件（套）。
“Grandma’s Legs”: An Ode to Taxes – China Digital Times (CDT) Zuoxiao’s latest solo album, I Have Never Eaten These Tiny Grapes, is a collection of acerbic children’s songs. CDT has subtitled the music video for one of the songs from the album, “Grandma’s Legs” (奶奶个腿)…Writer Li Chengpeng’s cutting lyrics are sung by a cheerful choir of children as one little girl learns a strange lesson in “gardening.” (Make sure to the “CC” icon at the bottom of the YouTube screen is highlighted in order to view the English subtitles.
Chronicling China’s Changing Cities – NYTimes.com Mr. Lam believes that China is often misunderstood by Western photographers and journalists…The key to understanding China today, he says, is nationalism, confidence and pride… “The Chinese people have so much pride; they want to tell the world that they are no longer a third world country, and they want to be treated as equal partners, not as a backward society,” he said.
Chinese Boston bombing victim’s family to get US$2.2m | South China Morning Post The size of the compensation payments drew a flood of sarcastic comments from internet users on the mainland, where compensation is usually far less. “I finally know why so many people like to run to America: because it is better to die there,” one commenter wrote. Another said: “The American capitalists are making the Chinese lose face.” By comparison, the families of children in a knife attack in Henan elementary school in December received about 300,000 yuan (HK$380,000).
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH
China Seen Widening Car-Purchase Limit to Fight Pollution – Bloomberg Eight cities — Chengdu, Chongqing, Hangzhou, Qingdao, Shenzhen, Shijiazhuang, Tianjin and Wuhan — will probably introduce measures limiting auto purchases, Shi Jianhua, deputy secretary general of the China Association of Automobile Manufacturers, said in a briefing in Beijing today, without being more specific about the timing…Such limitations could cut vehicle deliveries by 400,000 units, or 2 percent of nationwide sales, and undermine economic growth, Shi said. If introduced, the measures may triple the number of Chinese cities — Beijing and Shanghai have vehicle quotas — imposing curbs on automobiles as public anger grows over worsening congestion and air pollution.
北川地震遗址连年被淹 数亿元投资打水漂_网易新闻中心 核心提示：持续的大暴雨袭击四川，北川老县城地震遗址再遭劫难，有关它的存亡也成为关注的热点。有学者称，此举“劳民伤财”，“几亿元打了水漂”。据报道，2010年，四川省相关部门批复，北川遗址保护项目总投资6.7亿多元，包括一座地震纪念馆、一个地震遗址保护区。
四川都江堰爆发泥石流 多户人家被埋_网易新闻 pictures of the flooding in Sichuan
China Reacts Strongly on Report That Mainland Brands of Infant Milk Formula Contain Trans-fat-Caijing China’s state-run media and state-backed dairy industry association fired back Tuesday at a report by the South Morning Post, which claimed mainland brands of infant milk formal contain trans-fat which could lead to heart disease. “It’s such a pity that, as an influential media outlet, the Hong Kong-based South Morning Post has published such a botched article,” an official with the China Dairy Industry Association said in a statement published on its website.
内地奶粉符合安全标准 为何有人吓唬消费者-财经频道-新华网 值得注意的是该文发布时机，发改委7月2日刚刚启动针对五大外资奶粉品牌和进口奶粉品牌频繁涨价和价格虚高等问题的反垄断调查，该报迫不及待地抛出所谓3罐国产奶粉含反式脂肪、2罐进口奶粉不含的文章，就是在中国乳业正处于逐步恢复声誉和消费信心的关键阶段，利用内地公众对婴幼儿奶粉的高度关注和敏感，对反式脂肪不了解，制造非理性恐慌，其抹黑竞争对手，打击我国乳业的恶劣动机，是昭然若揭的。
Chinese Trial Misconduct Delayed Bristol-Myers Medicine – Bloomberg Bristol-Myers Squibb Co. (BMY) and Pfizer Inc.’s blood thinner Eliquis, approved in December, was stalled for nine months because of misconduct, errors and an alleged cover-up attempt at a Chinese trial site overseen by Bristol-Myers, according to documents posted by the U.S. Food and Drug Administration. The delay came after the company told the FDA that patients got the wrong medicine, records were secretly changed and “serious adverse events” went unreported, the documents show.
FOOD AND TRAVEL
What to Read: The Best New Books of August | Vanity Fair Noodle-ophile Jen Lin-Liu travels from Beijing to Rome seeking their origins On the Noodle Road
The baijiu blitz | 300 Shots at Greatness and now working on a book // It was in this spirit that I organized an extensive baijiu tasting in Shanghai last month. It was a small, private affair held at in Shanghai at Yuan Bar (who I must parenthetically add makes a mean baijiu cocktail). I spent a couple of months soliciting baijiu donations from the best baijiu distilleries in China and, in some cases, abroad. In all, I collected over eighty unique bottles including a small selection of huangjiu (undistilled Chinese grain wine), which had to make it one of the most comprehensive tastings of Chinese alcohol ever attempted.
JOBS AND EVENTS
Wealth and Power: China’s Long March to the Twenty-first Century | New York | Asia Society–With Jonathan Spence, Orville Schell, and John Delury 16 July 2013–6:30pm – 8:00pm–725 Park Avenue New York, NY 10021. As I have said before, Wealth and Power is an excellent book.