The Sinocism China Newsletter 07.23.14

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

Readers in Washington, DC may be interested in the China DC Happy Hour this Thursday at 6 PM at Vapiano on M Street. It looks to be a great crowd, wish I could join.

Today’s Links:


5 Detained in China Over Processing of Spoiled Meat – Those detained include the responsible officer and the quality-control manager of Shanghai Husi Food, which is a subsidiary of the OSI Group, based in Aurora, Illinois, according to a statement posted Wednesday on the official microblog of the Shanghai public security bureau. The bureau is conducting a joint investigation with the municipal food and drug administration.

Related: McDonald’s CEO: ‘deceived’ by audit of China meat plant | Reuters McDonald’s Corp feels “a bit deceived” by the audit it received for Shanghai Husi Food Co Ltd, a China supplier that was shut down this week after a TV report showed workers mishandling meat, Chief Executive Don Thompson said on Tuesday. “We are no longer serving product from the primary facility there that has the challenges and the issues,” Thompson said on a conference call after McDonald’s reported lower-than-expected quarterly earnings.

Related: 麦当劳肯德基再曝黑幕 供应商用过期原料_专题_一财网 CBN has quite the microsite on the OSI/Husi expired meat scandal

Market Reforms, Fight against Corruption Go Hand in Hand, Expert Says – Caixin Li Chengyan, head of the Research Center for Clean Government Construction at Peking University, said the CDIC has already been trying out institutional changes to combat graft in a systemic way. Catching dirty officials is only the beginning of a long-term campaign, he said, and the CDIC has been shifting its focus to solving the root cause of graft by implementing new institutional designs. This includes forming a dual-leadership structure that sees local inspectors no longer led by only their local party committee, but also needing to answer to higher-level authorities. Li also linked the fight against corruption to reform, arguing that the leadership has taken a two-pronged approach: redefining the relationship between the government and the market while fighting graft to prevent further progress. “The two sides of the approach complement and reinforce each other and cannot be separated,” he said.

Related: 山西日报:坚决查处对中央和省委决定说三道四者_新闻_腾讯网 Shanxi Daily commentary warns against resistance to corruption investigations…Shanxi is a target-rich province for corruption investigators, no surprise some officials are unhappy and complaining  //  党的纪律必须严守。党的纪律是党的生命,是不可逾越的高压线和不可触碰的底线。但也应当看到,目前仍有个别党员干部对中央和省委要求置若罔闻、心存侥幸,有令不行、有禁不止。广大党员干部一定要清醒认识到,中央纪委和山西省纪委维护党的纪律的态度是明确的,立场是坚定的,不容有丝毫怀疑。一定要有“泾溪石险人兢慎,终岁不闻倾覆人”的警觉意识。对于那些不收敛不收手、顶风而上的;对于那些不作为、乱作为,严重损害群众利益,群众反映强烈、影响恶劣的;对于那些唯恐天下不乱,对中央和省委的决定说三道四、搬弄是非、编造传播谣言的,要发现一起,坚决查处一起,决不能让任何人心存侥幸、决不能让任何腐败分子逃脱漏网。

Related: 人民论坛:当前官员最怕工作出事 最郁闷收入低_智库_评论频道首页_财经网 – survey data on what officials are most worried about right now, and why many prefer to do as little possible now to minimize risks

China Voice: More Internet companies should go abroad – Xinhua During his trip to Brazil last week, Chinese President Xi Jinping, together with his Brazilian counterpart Dilma Rousseff, witnessed the launch of the Portuguese version of China’s Baidu search engine. It is not the first time that a Chinese Internet company has launched a non-Chinese search engine, but it is the first time that a Chinese state leader has helped promote its services…Chinese Internet service companies going abroad has strategic significance, as search engines are highly monopolized by a few websites and the international community is rightly concerned over cyber security after Edward Snowden’s leaks about intelligence project PRISM. Breaking the information monopoly and building a fairer and safer cyberspace have become the need and consensus of many countries, bringing new opportunities for Chinese Internet service providers.  //  nice these firms face limited regulatory barriers in their overseas expansion while foreign firms effectively blocked from the Chinese Internet, especially as it becomes clear that some really are viewed as national champions

国家互联网信息办公室、工信部、公安部联合行动打击网上造谣传谣行为-时政频道-新华网 SIIO, MIIT,PSB have stepped up campaign against online rumors  //  据了解,7月15日以来,国家互联网信息办公室、工信部依法关停三批因管理不力、任由谣言传播的网站,对未在通信管理部门履行备案手续、传播谣言信息的赣州在线、中国将军政要网等4家网站依法予以关闭;对篱笆网、回龙观社区、昆山论坛等43家网站给予关停整改处罚;对虎扑体育论坛、邳州论坛给予暂停更新处罚。工作中同时发现,个别国家工作部门开设的网站也成为谣言信息传播的渠道,现已责成相关部门暂停网站更新进行整改。各大门户网站和主要社交网络平台均加强管理,加大对谣言信息处置力度。公安部门对编造谣言信息的北京网民马某、海南网民裴某依法行政拘留,对37名编造、传播谣言的网民给予治安处罚和教育训诫。另据国家互联网信息办公室介绍,一批在网上传谣的网民被通报工作单位进行教育。

Related: Chinese Social Media Shrinks by 7% During Internet Crackdown – China Digital Times (CDT) As Chinese authorities stage a crackdown on “rumor mongering”—seen in many cases as a thinly veiled effort to squelch political and other kinds of verboten speech—the number of people visiting social websites dropped by 20.4 million, or 7.4 percent, to 257 million.

Related: Chinese blogger jailed for ‘rumour-mongering’ – The Rakyat Post – The Rakyat Post Dong Rubin — a businessman known to his 50,000 online followers by the alias “Bianmin”, or frontier person — had long discomfited officials in the southwestern province of Yunnan on issues ranging from environmental safety to police brutality. He was found guilty by Wuhua district court of conducting “illegal business operations” and “fabricating and spreading online rumours for economic gain”, according to the official Xinhua news agency.

中央党校教授:中共面临8大新的伟大斗争|中国特色社会主义_新浪新闻 Deputy Head of the Central Party School Han Qingxiang on the 8 new great struggles facing the CPC  //  1.争夺资源; 2.货币战争; 3.争夺市场; 4.意识形态斗争; 5.领土争端; 6. 反腐败斗争; 7. 网络斗争; 8.反民族分裂主义的斗争 /

Related: 中共再现意识形态二连击 党校学者谈斗争论_中国_多维新闻网 【多维新闻】中组部发布文件要求中共官员不要做西方道德“应声虫”后,在7月23日的《人民日报》上,中央党校副校长韩庆祥发表署名文章《深刻理解和把握“新的伟大斗争”》,要求官员对于中共十八大报告中“发展中国特色社会主义是一项长期的艰巨的历史任务,必须准备进行具有许多新的历史特点的伟大斗争”一句话进行深刻理解,被媒体以“霸权国家对中国进行意识形态渗透”的显示标题予以展现。这也是在一周内再次在意识形态方面出现声音,要求中共官员与西方划清“界限”。

As credit dries up, troubled Chinese steel makers lose lifeline | Reuters In Tangshan, a polluted industrial Chinese city that produces more steel a year than the entire United States, the Xinming Steel Pipe Plant shut earlier this month leaving more than 400 workers and a host of creditors unpaid. The turmoil at the firm shows how huge over capacity is pushing scores of similar steel enterprises to the brink of bankruptcy. Unlike in the past, however, provincial governments are now unwilling or unable to bail them out. In a bid to rebalance the world’s second-biggest economy, Beijing is dismantling a local government support structure that has given steel firms a lifeline of cheap credit, lucrative construction contracts and preferential tax rates.

Beijing-Hebei-Tianjin integration to challenge local leaders’ power | South China Morning Post China is readying an assault on the “fortress economies” of local governments by creating a super region around Beijing, with proposals that sources suggest will be more aggressive than have been publicly revealed. The plans, expected to be considered by the cabinet on Wednesday, will be the first time standards for customs, tax, pollution and industry have been unified across local government areas, the sources say. Combining bloated Beijing, the smog black spot of Hebei province and the port city of Tianjin will create a region with a population of 110 million and an economy the size of Indonesia’s in a move that encapsulates President Xi Jinping’s ambition to overhaul the world’s second-largest economy.

Related: 京津冀一体化三大规划将出台 |京津冀|国务院_新浪新闻 京津冀一体化最早可追溯到1982年,当年公布的《北京市建设总体规划方案》首次提出“首都圈”。此后历时多年,从“京津冀经济一体化”到“京津冀都市圈”终于升级到国家战略层面的“京津冀一体化”,这一过程走了30多年。媒体报道称,7月份京津冀一体化有关议题将提交高层。

CNPC Continues to Be Hit by Scandal as Two More Executives Fall – original Chinese has more detail, including that the titular general manager of CNPC International (Canada), Margaret Jia, is the sister of “Zhou Bin’s stepmother” // The two who were detained were Song Yiwu, deputy general manager of China National Oil and Gas Exploration and Development Corp. (CNODC), and Li Zhiming, head of CNPC’s Canadian operation, several sources said. Song was detained in early July, the sources said, and Li was arrested in late June. This follows a probe into Bo Qiliang, the general manager of CNODC and deputy general manager of PetroChina, that was launched in mid-May. Both Song and Li are veterans of CNPC’s overseas businesses. Song, the son of former oil minister Song Zhenming, has been CNODC’s deputy general manager since 2004 and led many important negotiations for CNPC’s overseas deals.



Does multimillion dollar Chinese investment signal Detroit’s rebirth? | Cities | In September, the Shanghai-based developer Dongdu International (DDI) made its first move. In an online auction, it snapped up three iconic downtown properties, all built during the city’s early 20th-century heyday as an industrial powerhouse. DDI purchased the David Stott building, a 38-storey art-deco skyscraper built in 1929, and the former Detroit Free Press newspaper headquarters, a T-shaped edifice adorned with bas-relief sculptures of biplanes and locomotives. Later, it acquired the 10-storey Clark Lofts, an inconspicuous residential building with a manual, pre-second world war elevator – the oldest in Detroit. Altogether, DDI spent $16.4m (£9.6m) on the properties, slightly more than a top-market apartment in Shanghai.

Ethiopia Becomes China’s China in Search for Cheap Labor – Bloomberg China’s average manufacturing wage is 3,469 yuan ($560) per month. Pay at the Huajian factory ranges from the basic after-tax minimum of $30 a month to about twice that for supervisors. By contrast, average manufacturing wages in South Africa, Africa’s biggest manufacturer, are about $1,200. The duty-free and quota-free access that Sub-Saharan Africa enjoys for the U.S. and EU markets gives additional savings thanks to the African Growth and Opportunity Act for the U.S. and the EU’s Everything But Arms accord for the poorest countries. Import tariffs on shoes made in China range from 6 percent to as much as 36 percent, Zhang said.

China Averts Second Corporate Default as Huatong Pays Bonds – Bloomberg where did the money come from?  //  Huatong Road & Bridge Group Co. paid all principal and interest on 400 million yuan ($65 million) of notes today, four people familiar with the matter said, asking not to be identified because they weren’t authorized to speak publicly. The builder based in the northern province of Shanxi said last week it might fail to make payment.

Chinese Banks Seen Discounting Mortgage Rates, Survey Shows – Bloomberg Banks will resume preferential mortgage rates, according to 74 percent of analysts and economists in a survey conducted from July 14 to July 17. Fifty-six percent forecast banks will lower minimum down payments, while 59 percent said they expected the central bank to ease its mortgage restrictions. A total of 29 economists and analysts responded to the survey.

周报:上周北京二手房成交1803套 环比上升14%_新浪房产_新浪网 Jump in transaction volume and price of beijing secondary homes sales in 3rd week of July  // 新浪乐居讯(编辑 常晓培)根据北京市住建委统计数据显示,7月第三周(07.14-07.20),北京市二手住宅成交1803套,环比上升14%。成交均价为26605元/平米,环比上升0.4%。   从成交量来看,虽然目前7月前三周成交量依然处于2000套以下较低水平,但整体成交水平与6月同期相比仍表现出一定程度的回升态势。

China sees more capital inflows in H2, uncertainties linger | Reuters China may see more capital inflows in the rest of 2014 after experiencing some money flight in recent months, the country’s foreign exchange regulator said on Wednesday, as the yuan recovers due to improved confidence in the economy. Guan Tao, the head of the department of international payments at the State Administration of Foreign Exchange (SAFE), also said at a news conference that China’s rising foreign exchange reserves could stoke long-term inflationary pressures.

JPMorgan names former Citi executive Krause to lead China bank | Reuters JPMorgan Chase & Co said on Wednesday it named Brett Krause to head its locally incorporated bank in China, adding to other recent hires as it rebuilds its leadership team in the country.

经济参考网 -国家新型城镇化综合试点启动重点为镇改市,农村宅基地和农房纳入全国统一不动产登记体系 据《经济参考报》记者独家获悉,近日,国家发改委、财政部、国土部、住建部等11个部委联合下发国家新型城镇化综合试点通知,要求各省选择符合条件的不同层级市、镇作为试点在8月底前上报发改委。

China’s rich pimp their planes as jet market takes off – Yahoo News At the moment, potential buyers are also eager to keep a low profile amid an on-going government austerity campaign and anti-corruption drive launched after Chinese leader Xi Jinping took over as head of the ruling Communist Party at the end of 2012. “If you back up two years ago, this market was really happening very fast and was kind of electric,” said Stephen Taylor, president of Boeing Business Jets. “It definitely has been less aggressive and a more subdued market ever since the new administration came in and started pushing against some of the luxury items.”



China launches campaign to nab overseas suspects – Xinhua so will the MPS be spending lots of time in Australia, UK, Vancouver and the Bay Area and Orange County in California?  //  The Ministry of Public Security (MPS) on Tuesday launched a campaign to apprehend suspects involved in economic crimes who have fled China. Some suspects were involved in corruption-related crimes and needed to face questioning and possible charges, said Liu Jinguo, vice minister of the ministry, during a national teleconference.

贪官逃跑路线:职位高躲北美 级别低去非洲_网易新闻中心 fleeing officials with high rank tend to run to North America, with low rank to Africa?

Twitter Acts Quickly on Suspect Pro-China Accounts – Just hours after The New York Times posted an article about bogus Twitter accounts dedicated to spreading pro-China propaganda — and a Tibetan advocacy group demanded that the company take action — Twitter appears to have hit the kill switch on a score of the suspect accounts.

Run Like Hell: China Releases New Anti-Terror Handbook – China Real Time Report – WSJ The brochure also suggests people be on the look-out for “terrorist suspects” who dress or act abnormally in crowded locations like malls, hospital, bus stations, as well as areas near the offices of the Communist Party and government agencies. It doesn’t specify how terrorists tend to dress, though it does offer up a cartoon of the aforementioned masked man smiling maniacally as he waves his knife in the air. (The man appears racially anonymous, an image that differs notably from the bearded, big-nosed terrorists depicted recently in a series of anti-terror posters in the southern region of Guangxi.)

China Orders More Than 200 Top Officials to Quit Company Jobs – Bloomberg The demand was made after the Communist Party’s Organization Department passed a rule in October banning government and party officials from also holding outside jobs, the official Xinhua News Agency reported yesterday. A department task force found that 40,700 officials — including 229 at the provincial or ministerial levels — had extra jobs. // 中组部:退休官员“曲线”任独董没门 

中国电科院党组书记邓永辉失联_政经频道_财新网 曾任国家电网宁夏电力副总、青海电力总经理、国网生产技术部和运检部主任,到中国电科院刚刚半年

China to further tighten disciplinary inspections – Xinhua | Chen Cungen, deputy chief of the State Organs Work Committee of the CPC, made the remarks at a conference on discipline inspection among central government departments. The anti-graft inspection will continue to focus on supervision of key departments in charge of central finance and administrative approvals, and strengthen checks on grassroots level government units, Chen said. He praised the anti-graft campaign, saying government public spending has dropped by 35 percent from the previous year.



China steps up marine development – Xinhua | China’s Ocean Development Index rose to 115.5 in 2013, up 5.5 points from 2012 and marking notable progress in the country’s marine economy, according to the report published by the China Ocean Information Center, the Xinhua (Qingdao) International Ocean Information Center and the State Financial Information Center Index Research Institute. The index was calculated based on six aspects of marine development, including economy, social welfare, resource exploration, environment, technological innovation and management.

After Malaysia Airlines Crashes, the Payments Are Piling Up for Air Insurers – The crashes of Flight 370 and Flight 17 are not Malaysia Airlines’ first unusual insurance claims, however. The airline had an unusual claim in 2000 for the total loss of an Airbus A330 traveling in the opposite direction on the same route as Flight 370. In that case, a canister of a mysterious Chinese shipment destined for Iran broke open near the end of a trip from Beijing to Kuala Lumpur and began leaking, producing a smell that prompted the captain to conduct an emergency evacuation upon landing of all 266 people aboard. A subsequent investigation found that the hold was contaminated beyond cleaning with mercury and other chemicals that may have been precursors for the manufacture of nerve gas.

China hit by Western military moves in Africa, says Academy of Social Sciences report | South China Morning Post China’s involvement in Africa will face complications despite pouring in billions in investment and aid because Western nations are stepping up their military presence on the continent, a major Chinese think tank says. The Chinese Academy of Social Sciences also warned in its annual report on development in Africa that the continent might be used by the United States to expand its containment of China should the Sino-US relationship continue to worsen, but Beijing was not well equipped to handle such a move.

Chinese, Cuban leaders pledge staunch friendship, reciprocal cooperation – Xinhua | Visiting Chinese President Xi Jinping and Cuban leader Raul Castro pledged here Tuesday that the two countries will be long-term, staunch friends and partners for reciprocal cooperation. “We will resolutely deepen our friendship and treat each other with all sincerity, carry out mutually beneficial cooperation and forge our partnership in reform and development,” Xi said during talks with Castro, president of Cuba’s Council of State and the Council of Ministers. “China cherishes the traditional friendship between the two nations. No matter how the international situation changes, it will be a set policy of China to develop a long-term friendship with Cuba,” Xi noted.

Chinese president visits Cuban revolutionary leader Fidel Castro – Xinhua | at Castro’s farm

China’s EximBank Suspends Loans For Roads, Bridges in Laos Export-Import Bank of China (EximBank), the official export credit agency of the Chinese government, has suspended loans for infrastructure and construction projects in Laos, saying it would prefer to only finance mining and hydro-power ventures, according to Lao sources. The move is seen by some as an indication of Beijing’s concern over its neighboring communist ally’s ability to repay loans for such projects as roads and bridges in the absence of immediate guarantees. In the mining sector, for example, natural resources act as ready collateral.



Macau scholars warn of rising censorship, loss of confidence in ‘one country, two systems’ | South China Morning Post The fate of three outspoken professors has led Macau academics to warn of rising censorship and a loss of confidence in ‘one country, two systems’



Apple revenue lags Street’s view despite strong China growth | Reuters Chief Executive Tim Cook told analysts on a conference call that Apple’s Chinese performance was “honestly surprising.” Unit iPhone sales jumped about 48 percent and Mac computer sales rose 39 percent in the June quarter, Chief Financial Officer Luca Maestri said in an interview. Lower-cost phones sold there by up-and-coming rivals such as Xiaomi appeared to be grabbing market share mainly from other companies that rely on Google’s Android software, he added.

China to require real-name registration for app developers China’s Ministry of Industry and Information Technology (MIIT) issued a notice today requiring developers to register with their real names when publishing their mobile apps to the public, according to Techweb.



China to curb blind investment in coal-to-gas – Xinhua The country will ban coal-to-gas projects with an annual output of no more than 2 billion cubic meters and coal-to-oil schemes that produce 1 million tonnes or less, according to an NEA document published on Tuesday. Projects larger than those will be subject to regulatory approval from the State Council, China’s cabinet, the NEA said.

China ‘seals off’ town after man dies of bubonic plague – Yahoo News Singapore A Chinese town has been sealed off and 151 people placed in quarantine since last week after a man died of bubonic plague, state media said Tuesday. The 30,000 people living in Yumen in the northwestern province of Gansu are not being allowed to leave, and police at roadblocks on its perimeter are telling motorists to find alternative routes, state broadcaster China Central Television (CCTV) said.

Increased Oil Imports ‘Spur Rise in Shipping Costs, Plans to Build More Ships’ – Caixin Rising demand for VLCC shipping was not the sole reason Chinese companies were building VLCCs on a large scale, said Jiang Ming, a researcher with Haitong International Securities Group Ltd. The building of a strong fleet of VLCCs is mostly inspired by government strategy, a source at China Shipping Tanker said. The government wanted domestic shipping companies to transport 85 percent of its imported oil from 2011 to 2015, but the figure was only 40 percent of 282 million tons of oil in 2013, customs data show. Domestic shippers got a few orders to transport imported oil because foreign companies controlling oilfields chose a shipping company themselves, industry insiders say.

Arctic Ice Melt Seen Freeing Way for South Korean Oil Hub – Bloomberg The country, whose proximity to China, Russia and Japan makes it an ideal conduit for oil arriving via the Arctic, plans to add tanks for storing almost 60 million barrels of crude and refined products by 2020, about the same as Singapore’s current capacity. The nation also seeks to leverage its energy infrastructure, which includes five refineries, to become Northeast Asia’s oil hub, said Kim Jun Dong, the deputy minister of energy and resources policy.



Beijing closes coal-fired power plant to cut pollution – Xinhua | The Gaojing Thermal Power Plant, a subsidiary of the state-owned China Datang Corporation, shut down six coal-fired power generation units, according to the municipal development and reform commission. There are four major coal-fired power plants in Beijing. The 50-year-old Gaojing plant is the first to be closed. The other three are expected to be closed by the end of 2016 when power will be wholly generated by clean energy.

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