The Sinocism China Newsletter 07.21.13

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

A man in a wheelchair detonated a simple bomb (Xinhua) Saturday evening in the Beijing Airport. He was injured in what was an apparent protest at years of failure to get a public accounting after authorities in southern China beat him into disability.

From the Telegraph’s explosion in Beijing airport as man appears to detonate wheelchair:

Ji Zhongxing, 33, from Heze in the eastern province of Shandong entered the main arrivals area of Beijing Capital Airport’s Terminal 3, wheeled himself down the exit channel for passengers disembarking from international flights, and started to shout and distribute leaflets to draw attention to himself….

According to his older brother, Ji Zhongji, Mr Ji had been working as a rickshaw driver in the southern Chinese city of Xintang when he was beaten by local police with a steel tube, leaving him disabled.

“We filed two legal cases against the police in Xintang but we never received any official compensation,” he said.

In 2008, Mr Ji went to Beijing to put his case before the central government, his brother said, but had been asked to return home and had not ventured to the capital since.

Pictures (Caixin) of Mr. Ji with his bomb, the explosion and the aftermath have been all over Sina Weibo. Many are sympathetic to Mr. Ji and are calling him a hero as he warned people away from him before he detonated the small device.

Sunday’s People’s Daily has a brief item on page two about the Beijing airport bombing–首都机场爆炸无他人伤亡–and Chinese media is all over the story (冀中星因不公待遇上访多年 东莞警方:不方便说_网易新闻中心 for example).

Injustices are not hard to find, but this week they have been particularly public. A watermelon vendor was beaten to death by chengguan (城管) a few days ago in Hunan Province, leading to an online uproar (New York Times) and the detention of six urban management officers (South China Morning Post) suspected of involvement in his death.

Authorities reportedly suspended the Weibo account (Telegraph) of Li Chengpeng, one of China’s most famous bloggers, after he published a poignant essay about the case. The Telegraph has posted the full translation of Li’s essay, excerpted here:

The watermelon vendor, Deng Zhengjia, lived in a mountain near Linwu County. He wanted to grow sweet watermelons, have a magnificent harvest, and sell his watermelons quickly, so that he could get home in time for dinner. This was his Chinese dream. He took great care of his watermelons.

Why didn’t you take care of him? Before we sit down to talk about the Chinese dream, you should protect a watermelon vendor’s dream.

Be nice to your people, and to your watermelons. Plant melons, you get melons. Sow beans, and you get beans.

Don’t you understand? Running a country, after all, is not so different from planting melons.

Li Chenpeng has far more depth, is far more interesting, and appears to be far more politically courageous than Han Han.

But the chengguan were not done abusing people this week. The official People’s Daily Sina Weibo account posted this item Saturday evening about Harbin urban management officers beating a watermelon vendor. That post has been forwarded nearly 11,000 times and commented on almost 5,000 times. Not only did the officers beat the vendor bloody, apparently with a walkie talkie, they also then attacked the local TV reporters who went to the chengguan office.

The local Harbin TV report 【新闻夜航】城管执法 记者受伤,[UPDATE: The original video has disappeared, try this link now END UPDATE] highlighted in that People’s Daily Weibo, is amazing, not just for the video of the beaten melon vendor and the chengguan officials attacking the crew, but also for the monologue by the news anchor.

China just entered the 三伏天 (dog days of summer) and things are already very hot.

The last issue of the newsletter highlighted General (Ret.) Michael Hayden’s comments about Huawei. The Huawei PR machine has responded, as quoted by Bloomberg:

“These tired, unsubstantiated, defamatory remarks are sad distractions from real-world concerns related to espionage, industrial and otherwise,” Huawei’s [Scott] Sykes said in today’s e-mail.

So will Huawei now sue Gen. Hayden for defamation? That would be interesting, and perhaps revealing.

Thanks for everyone who submitted content for the internship application. I will go through them over the next several days and reply.

July is almost over. Regular readers know what that means, that it is time again to ask those of you who value to this newsletter to consider making a contribution. Thanks in advance.

Today’s Links:


China Scraps a Floor on Loan Rates but Cap on Deposit Rates Still in Place-Caijing While hailing the move, analysts say it is not big enough to hit the deposit rates. “Cancelling interest rates restrictions is a premise for interest rate liberalization, therefore, [the central bank’s decision to] remove the floor of loan rate is a significant move but not enough yet,” said Zuo Xiaolei, a senior researcher with the Galaxy Securities.

Related:  China liberalizes bank lending rates in reform push | Reuters “This is a big breakthrough in financial reforms. Previously people had thought the central bank would only gradually lower the floor on lending rates. Now they scrapped the floor once and for all,” said Wang Jun, senior economist at China Centre for International Economic Exchanges (CCIEE). The move, which goes into effect on Saturday, will likely lower borrowing costs for businesses and individuals, ending what many observers said had been artificially high borrowing costs that benefited big state lenders at the expense of private enterprise. “The reform this time does not expand the floating range on deposit rates. The main consideration is that deposit rate reforms will be more profound and need higher conditions,” the central bank said in a statement.

Related:  Free to Lend: What China’s Interest Rate Move Means – China Real Time Report – WSJ It may not immediately help China with its economic growth slowdown, and it doesn’t go as far as many economists would like. But it’s a strong indicator that China is serious about shaking up a financial system that is in need of reform.

Related:  Economists React: Lending Rate Liberalization – China Real Time Report – WSJ China took a key step in its drive to liberalize its financial system on Friday, as it scrapped its floor on lending interest rates. The move essentially lets banks set loan rates by themselves. It removes a key restraint on China’s tight grip on its banks, suggesting to many economists that it shows a commitment to overall financial reform even if it doesn’t have an immediate impact

Key to Cabinet’s Financial Reforms Is Follow-Through, Experts Say – Caixin It has been two weeks since the State Council announced a policy that aims to reshape the financial industry and strengthen its support for economic rebalancing. As with every grand policy design, however, there is the risk that it may not go to plan. Many of the experts Caixin spoke to voiced concerns on implementing the policy. Much of the plan is simply a restatement of what the government had already committed itself to, thus implementation in the past fell short, an expert who has been following the cabinet’s decision-making said. The key to whether efforts will succeed this time, he said, depends on how well the policy is carried out in practice.

李佐军:城镇化是对地方政府的“挑战”–国研视点–中国经济新闻网 terrific interview in Sanlian Life Weekly with DRC economist Li Zuojun. Hope this gets translated into English. Li now quite the celebrity economist since his 2011 prediction of a summer 2013 financial crisis re-surfaced in June. He is very active on Weibo, surprised no western media has profiled him yet// 六是我国城市化开始进入到加速阶段的下半场。根据国际经验,城市化率30%~70%时是城市化的加速阶段,2012年我国城镇化率是52.6%,正处于加速阶段上半场向下半场的过渡阶段。与工业化一样,城镇化加速阶段上半场也是城镇化量的扩张阶段,到了下半场,尽管速度还是比较快,但已过渡到质的提升阶段。进入到这一阶段后,基础设施建设和房地产开发规模就会相对减少,导致经济增速下降…李佐军:如果政府运用高超的宏观调控技术,将泡沫一点点地挤掉,又不至于引起经济危机和社会动荡,同时又适时地培育起新的经济增长点和新的竞争优势,推进产业结构转型升级,这就算是“软着陆”了,泡沫就不会破。2013年6月底发生的所谓“钱荒”,中央政府在处理过程中就表现出了挤泡沫的决心。中央政府希望通过改革使得房地产成为一般性行业,并给其他实体经济更多公平竞争的环境,这其中涉及垄断特权改革等一整套体制改革问题。至于怎么会发生“钱荒”,钱去哪里了?除了表面因素外,说到底是钱被房地产和地方政府的投融资平台吸走了。如果政府以GDP为导向的考核制度不改变,很多经济问题就难以解决。

SCMP Reporter Who Interviewed Jack Ma Resigns – China Real Time Report – WSJ strange story // In another twist to the much-blogged about Jack Ma interview, The South China Morning post reporter who interviewed the founder and executive chairman of Alibaba Group Holding Ltd. has resigned, according to a statement on the newspaper’s website early this morning. Liu Yi, the reporter who interviewed Mr. Ma, resigned on July 19, according to a statement on the SCMP’s site. The interview generated controversy online as Mr. Ma was quoted as saying the 1989 crackdown on protesters in Tiananmen Square was “the most correct decision”.

GSK chief Andrew Witty set to admit China ‘scam’ – Telegraph The chief executive of GlaxoSmithKline is to admit to major failings in the pharmaceutical giant’s Chinese operations following allegations by the country’s security ministry that the company took kickbacks and paid bribes to government officials.

China Communist Party Fate Seen Resting on Farmer Rights – Bloomberg China’s growth and the future of the Communist Party rest on giving farmers their land and allowing equal rights for migrants in cities, according to the state researcher who wrote a reform road-map. “Land and hukou reform is the cornerstone for future economic growth and political-system reform,” said Yuan Xucheng, of the China Society of Economic Reform, who was the lead author of a report submitted to top officials. Yuan spoke in an interview in Singapore last week. Hukou is the term for a household registration system which limits migrants’ rights.

Related:  Will the Boat Sink the Water?: The Life of China’s Peasants: Chen Guidi, Wu Chuntao:  Amazon from research in early 2000s, still relevant // Chinese journalists Wu Chuntao and Chen Guidi returned to Wu’s home province of Anhui, one of China’s poorest, to undertake a three-year survey of what had happened to the peasants there, asking the question: Have the peasants been betrayed by the revolution undertaken in their name by Mao and his successors? The result is a brilliant narrative of life among the 900 million, and a vivid portrait of the petty dictators that run China’s villages and counties and the consequences of their bullying despotism on the people they administer. Told principally through four dramatic narratives of paricular Anhui people, Will the Boat Sink the Water? gives voice to the unheard masses and looks beneath the gloss of the new China to find the truth of daily life for its vast population of rural poor.

Hitting China’s Wall – Paul Krugman says in latest column that China is about to crash, is “afraid for them”//  China is in big trouble. We’re not talking about some minor setback along the way, but something more fundamental. The country’s whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits. You could say that the Chinese model is about to hit its Great Wall, and the only question now is just how bad the crash will be….Just the other day we were afraid of the Chinese. Now we’re afraid for them

Related: How Much Should We Worry About A China Shock? – Followup blog post from Krugman //  Of course I’ve been reading Michael Pettis, who has been making many of the points I’ve raised for some time. // hard to argue with a Noble Laureate and Michael Pettis, consensus seems strongly on side of impending crash, is that trade very crowded now?

Related: Orwell, China, and Me – Second followup blog post from Krugman to his China crash column

The Useless Tree: Chinese Middle Class Aspirations the regime’s formula for legitimation – trading material gain for political acquiescence – is still working. And I suspect it will continue to work for some time yet. It would take a very hard landing, an economic downturn that undermined the middle class’s complacency. There will certainly continue to be protests and demonstrations, like the recent one that stopped a polluting plant in Guangdong, but those are essentially part of the system now. The regime can process those kinds of events without large-scale violence, and adapt to keep a step ahead of real political challenge.



Chow Tai Fook Among Shanghai Jewelers in Pricing Probe – BloombergChow Tai Fook Jewellery Group Ltd. (1929), the world’s largest listed jewelry chain, and other gold shops in Shanghai are being probed by Chinese regulators for price manipulation amid increased scrutiny of consumer-goods prices. Chow Sang Sang Holdings International Ltd. (116) was also identified as one of several companies “rectifying” their practices, after a National Development and Reform Commission investigation found wrongdoing, according to a report from People’s Daily, which was reposted on a website controlled by the Ministry of Commerce yesterday.

Japanese car sales in China rebound, but outlook remains cloudy – AJW by The Asahi ShimbunSales of Japanese cars are showing signs of a comeback in China, but they are still a long way from making a full recovery. The share of Japanese automobiles rebounded in November to 11.7 percent from 7.6 percent a month earlier, although the sales number represented a 36.1 percent drop year on year. Japanese carmakers have seen their sales in China plummet since September due to anti-Japan demonstrations and a boycott of Japanese products over the Senkaku Islands dispute.

9 in 10 families own their homes – Xinhua | Nearly 90 percent of Chinese families either fully or partially own their homes, a survey by Peking University’s Institute of Social Sciences showed yesterday. And more than 10 percent of households have two or more homes, found the study of 14,960 families in Shanghai, plus Henan, Gansu, Guangdong and Liaoning provinces. The average size of a home owned by a Chinese family is 100 square meters – 30 square meters per person, according to the survey.

The Myth of China’s Economic Reform – Bloomberg Strange that Pesek makes no mention of Xi Jinping when discussing the needed political reform. // That’s nothing compared to the third test: inviting the Communist Party’s wrath. There’s ample reason to doubt Li’s doctorate in economics will help him navigate Beijing’s cutthroat politics. If you think Abe faces resistance from vested interests, imagine what awaits Li as he tries to get Communist Party power brokers, ambitious regional leaders, a vast network of state-owned companies and the Chinese people to make sacrifices. Li must take on thousands of party stalwarts who make millions, or billions, of dollars from dodgy land grabs, insider trading and old-fashioned rent-seeking. Politics will stymie Li’s every effort to reduce the state’s role in the economy and create the vibrant private sector China needs in order to thrive. We’ll have a sense of whether he’s serious when the number of unnamed-source gripes in the official media starts to spike

China, U.S. companies’ great hope, now a drag | ReutersThe slowing has occurred as major U.S. names garner more revenue from Asia. Among 18 S&P companies with large exposure to China, 12 of them were underperforming the broader S&P 500 .INX index year-to-date, including Yum Brands Inc (YUM.N) and Intel (INTC.O), which noted the slower growth in China as a headwind. “The China impact is becoming more and more significant because the (U.S.) companies’ exposure has grown so much over the years,” said Robbert van Batenburg, director of market strategy at Newedge in New York.

Ningxia Official Courts Investment from Arab Countries – Caixin Region’s deputy head wants policy advances that would allow foreign money to help develop the economically struggling region…Yuan Jiajun, a member of the region’s Communist Party standing committee, said on July 17 at a press conference organized by the State Council Information Office that he plans to lure investment from Arab countries to develop industries, including the energy sector. Ningxia has advantages in chemical industries, foodstuffs and halal foods, Yuan said. Yuan, 51, is a former commander of China’s Shenzhou spacecraft program. He was appointed one of Ningxia’s top officials in 2012.
But he also said that “there are restrictions on foreign investment and there needs to be policy breakthroughs.”



南方周末 – 方滨兴的墙内墙外 Southern Weekend on Fang Binxing and his retirement. Fang is known as the father of China’s Great Firewall // 方滨兴的尴尬在于,举国体制下诞生的工程师与社交媒体时代的网友有难以弥合的隔阂。而且“50后”的信仰和情怀对“80后”“90后”而言太陌生了。墙内的方滨兴代表着过去十多年的互联网管理方式;而墙外方滨兴的质疑者则昭示着未来互联网发展必须正视和解开的结。

习近平再次剑指体制 近十次表态体制改革_大公资讯_大公网 大公网7月19日讯 北京时间7月17日,中共现任总书记习近平前往中国科学院考察时强调,要“深化科技体制改革”,“坚决扫除影响科技创新能力提高的体制障碍”。观察人士指出,自习近平成为中共一把手后,已经多次发表有关体制改革的讲话,其内容涉及反腐、整风、行政、经济、司法等诸多方面。半年多以来,这些方面的体制改革规划尤其行政、经济、司法等方面出现一定的进展。

Coal-rich county denies cutting free medicare after protest – Xinhua | Coal-rich Shenmu County of northwest China’s Shaanxi Province has vowed to continue free medical care and education despite rumors that the local government is deeply in debt and cannot provide such services any more. The Shenmu government has accrued no debts in the past decade and never borrows to pay off its public servants, said Liu Xiaoping, head of the county’s finance bureau, on Wednesday.

The China Quarterly – Abstract – Secret Codes of Political Propaganda: The Unknown System of Writing Teams fascinating article, full text not free // Within the Chinese Communist Party (CCP), some Party units have established a largely unknown network of writing teams which propagate the policies or perspectives of a particular unit by publishing feature articles in Party journals. These writing teams often make use of a pseudonym in the form of a person’s name, leading outsiders to believe that the work is written by a journalist. In fact, the pseudonyms of the Party unit writing teams function as a form of secret code. Through this code, inner Party members can recognize which unit’s views an article reflects. In order to reveal exactly which units the codes represent, we have collated the names of over 20 writing teams. In addition, we provide an introduction to the functioning of the writing teams and the manner in which articles are produced. Finally, we propose that the CCP’s mechanism of “propaganda codes” is gradually undergoing the process of institutionalization.

Public advocates: Jarring on the ear | The Economist A string of incidents involving the harassment and detention of rights activists and rule-of-law advocates suggests there are limits to how far Mr Xi is willing—or able?—to go, when it comes to changing the model of official responses to agitators. The most prominent of these cases is that of Xu Zhiyong (pictured to the right), a lecturer in law at the Beijing University of Post and Telecommunications.

Fei Chang Dao: After Lawyer Xu Zhiyong is Detained His Baidu Encyclopedia Entry Disappears The reason is that the Baidu Encyclopedia entry, originally available here – – appears to be because it has been deleted. The screenshot below shows what users clicking on that URL saw on July 20 – a notice saying “Apologies, we are unable to display the article you wanted to access!” (对不起,您所要查看的词条无法显示!)

中国远洋渔船上演大逃杀:11人杀22名同伴获刑-财经网 11 crew members of chinese fishing vessel sentenced for murder of 22 of their crew mates in 2011

李天一案受害人朋友承认曾发短信 否认索要钱财_新闻_腾讯网 新京报讯 针对有媒体报道的“李某家收到被勒索50万短信”一事,昨日,受害人杨女士的一位朋友表示,事发后杨女士向自己求助,由其帮助处理此事。短信系在李某等涉案人员蛮横不理会受害人的情况下,由其向李某家人发送,为的是告知对方并希望家长出面处理担责,但从未索要过钱财。

李天一被提审见梦鸽称想吃米饭遭斥:还想着吃_新闻_腾讯网 7月19日,李天一等因涉嫌轮奸在北京海淀区某法庭提审。李天一母亲梦鸽作为监护人当天出现在了法院,而李双江则未有现身。据知情人士透露,关押多日的李天一在见到母亲梦鸽后曾说:“妈,我想吃米饭”,而梦鸽则气愤的说:“都什么时候了还想着吃!”

李天一家庭律师否认李双江展示遭敲诈50万短信_新闻_腾讯网 昨天,媒体曝出李某某案新进展,称当天海淀法院提审李某某,李某某自称该案属卖淫嫖娼,其父亲李双江还公布手机短信指受害人杨女士敲诈勒索50万元。昨晚,李家新聘家庭法律顾问兰和表示,李某某一家从未向该媒体以及其他任何媒体提供过有关短信等证据。原告杨女士律师表示,杨女士不是陪酒女,其不了解酒吧有工作人员发短信索要50万元之事。

华润董事长遭记者实名举报巨额贪腐-财经网 Caijing special section now on the allegations of China Resources Power corruption



PacNet #53 – China’s Shift to Toughness on Maritime Claims – One Year Later | Center for Strategic and International Studies Robert Sutter and Chin-Hao Huang // China’s tough stand on maritime territorial disputes evident in the 2012 confrontations with the Philippines in the South China Sea and with Japan in the East China Sea has endured through China’s leadership transition and now marks an important shift in China’s foreign policy with serious implications for China’s neighbors and concerned powers including the United States. China’s success in advancing its claims against the Philippines and in challenging Japan’s control of disputed islands head the list of reasons why the new Chinese policy is likely to continue and perhaps intensify over the next year. Few governments are prepared to resist. Over the longer term, a wide range of existing and potential adverse circumstances at home and abroad could prompt Chinese leaders to see the wisdom in shifting policy again, perhaps moderating their approach to these neighbors.

Luo Yuan’s US-style military report, and difficulties for Dai Xu | southseaconversations 讨论南海 Luo Yuan’s think tank, the “China Strategy Culture Promotion Association” (中国战略文化促进会), yesterday released separate reports on the “military power of the US and Japan”. Curiously, given it’s supposedly an non-governmental think tank (民间智库), the Global Times quoted China Foreign Affairs University’s Su Hao calling the reports “strong and timely responses to the inaccurate remarks in the US annual report on China’s military and the Japanese Ministry of Defense’s recent white paper” (emphasis added).

Pangang and Kolon, Like Edward Snowden, Elude U.S. Charge – Bloomberg China’s Pangang Group Co. and Korea’s Kolon Industries Inc. (120110) have eluded U.S. criminal charges of trade-secret theft for months. Unlike fugitive security contractor Edward Snowden, they aren’t hiding from authorities. Pangang and Kolon can’t be forced yet to face the accusations in court because federal rules dating to the 1940s require prosecutors to issue a summons the old-fashioned way — by mailing it to a U.S. address. The companies said they don’t have offices, employees or agents in the U.S. and can’t be served. Federal judges in California and Virginia have mostly agreed.



《一夜惊喜》“高潮版”预告片 范冰冰突破诱惑为爱大冒险—在线播放—《一夜惊喜》—电影—优酷网,视频高清在线观看 trailer for the new Eva Jin movie 一夜惊喜 《一夜惊喜》“高潮版”预告片 范冰冰突破诱惑为爱大冒险 stars Fan Bingbing, can’t wait to see it

Can China Kick Its Dependence on Foreign Technology? Yes (Someday) | contextChina But keep in mind that there’s a difference between China breaking its dependence on foreign technology and China boasting the sort of companies that lead the field in their respective industries. Most of China’s tech users don’t need the most cutting edge technology to do what they want. Indeed, an unidentified senior official at a Chinese software company told Sina Tech that current domestic software meets 90 percent of the needs of the vast majority of Chinese companies. Doing away with its dependence on foreign technology doesn’t mean matching American technological capabilities; it means producing tech products that can get the job done and convincing consumers of this fact.



Shame! A Taiwan Tennis Ace Flirts With China, and Big Money – What is the quickest way for a professional athlete in Taiwan to get a sponsorship deal? Perhaps by threatening to shift her allegiance to China.

China is using the Asiana plane crash to crack down on rip-off overseas student tours – Quartz Beijing municipal authorities also laid out a framework for future trips, including strict requirements that schools seek approval from district education authorities six months in advance, and requiring school principals to lead trips and take responsibility for rule violations. Shanxi and Zhejiang provinces, where students involved in the plane crash attended schools, issued similar suspensions and rules, pledging an investigation into local study tour arrangements.



河北廊坊赴京女患者确诊感染H7N9禽流感_网易新闻中心 severely ill Hebei patient at Bejing Chaoyang Hospital, confirmed to have H7N9 // 2013年7月20日,一例河北省来京就诊患者在北京朝阳医院确诊为人感染H7N9禽流感病例。目前,患者病情危重,北京朝阳医院将患者安排在呼吸重症监护病房进行全力抢救。北京市卫生局对患者救治和疫情防控进行了部署,并将确诊病例情况报告了国家卫生计生委,通报了河北省卫生厅。据悉,河北省卫生厅已经部署进行流行病学调查和现场处理工作。

安徽巢湖蓝藻大面积暴发 水体腥臭粘稠如粥_新闻_腾讯网 stinky green algae outbreak in chaohu in anhui. pictures



Book Publishers Try to Sell Chinese Fiction in Translation – Businessweek Although China is now the world’s second-largest economy, few Chinese writers are read outside the country or inform the global conversation. In 2012, American publishers purchased translation rights for just 453 foreign titles, about 3 percent of the total books published in the U.S. Of those, just 16 were books first published in Chinese, according to records kept by Chad Post, publisher of New York-based Open Letter Books press.