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

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Simon Denyer of The Washington Post has an interesting story Sunday about the various ways the Chinese government at all levels polls the populace through third-party polling firms and online monitoring services, especially the People’s Daily Online Public Opinion Monitoring Center (舆情频道–人民网).

Here is an excerpt from In China, Communist Party takes unprecedented step: It is listening:

In the offices of China’s Communist Party newspaper, rows of analysts sit at computer screens poring over data that is stripped off the Internet.

Every comment made by the 591 million Chinese “netizens” is analyzed at the People’s Daily Online Public Opinion Monitoring Center, with summaries sent in real time to party leaders.

…the government is trying to understand public opinion on an unprecedented scale. In response to government demand, opinion monitoring centers have sprung up in state-run news organizations and universities to mine and interpret the vast rivers of chatter on the Internet. At the same time, the authorities are hiring firms to poll people about everything from traffic management to tax policy.

“The government used to have more power to control the agenda,” said a professor at Renmin University in Beijing, who spoke on the condition of anonymity because of restrictions on talking to foreign reporters. “But now there is a new approach, to identify the hot spots and try to control the crisis.”…

The People’s Daily Online Public Opinion Monitoring Center website has a fair amount of interesting free content, and its employees sometimes write articles for broader publication. While Weibo is still very important, Tencent’s Weixin (WeChat outside of China) is taking a fair amount of activity away from Weibo, making it harder for officials, government organs and social media monitoring firms who just figured out Weibo to have a full grasp of all the important ongoing conversations.

This article–政务微信撬动社会舆论新格局–by two people from the People’s Daily Online Public Opinion Monitoring Center emphasizes the importance of government departments learning to use Weixin, not just Weibo. Weibo, especially Sina Weibo, still matters, but lots of interesting things are going on inside Weixin, which now in some ways resembles an amplified, digital version of the 小道消息 rumor pathways that have been part of Chinese society for centuries. Weixin may not have the “one to millions” broadcast capability of Weibo, but information can travel shockingly fast within and across the various private groups in the service.

Thanks to everyone who contributed in July. I didn’t hit the fundraising goal but at least got close to it, though I am now in my monthly reconsideration of the business model, as more and more people are telling me, not unsurprisingly, that they are not interesting in paying for something that others get for free.

Today’s Links:

THE ESSENTIAL EIGHT

China bans New Zealand milk powder imports on botulism scare: NZ trade minister | Reuters China has halted imports of all milk powder from New Zealand and Australia, New Zealand’s trade minister said on Sunday, after bacteria that can cause botulism found in some dairy products raised food safety concerns that threatened its $9.4 billion annual dairy trade.

Related: Large Dairy Supplier Warns of Botulism Threat – NYTimes.com Fonterra, the world’s fourth-largest dairy company, sells its milk products to other companies that make infant formula, and said those companies would be responsible for any recalls. New Zealand’s Ministry of Primary Indistries said that in addition to New Zealand, six countries were affected: China, Australia, Thailand, Malaysia, Vietnam and Saudi Arabia.

Related: China names importers of NZ dairy products|Society|chinadaily.com.cn China’s top quality watchdog has named on its website four importers, including Wahaha and Dumex, of potentially tainted products from New Zealand dairy giant Fonterra, in a further move to cope with the food safety crisis. China’s largest beverage producer Hangzhou Wahaha’s Health Food Co and Import & Export Co, infants and children’s nutrition company Dumex, and Shanghai Tangjiu Group were found to have allegedly imported problematic dairy products from Fonterra, according to the website of China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).

Related: 从”双氰胺”到”肉毒杆菌”：恒天然就这样走下”神坛”？-财经频道-新华网 Fonterra’s brand is getting trashed in China over botulism in the milk powder. Karma for the 2008 Sanlu melamine coverup? // 新华网上海８月４日电（记者 周蕊）新西兰初级产业部３日宣布，新西兰乳制品巨头恒天然集团旗下部分产品可能含有肉毒杆菌毒素，受污染的产品在中国市场上已经流入了娃哈哈、上海市糖业烟酒集团以及多美滋公司。记者调查发现，恒天然今年以来多次发生负面新闻，在过去的８个月内连续涉及双氰胺、国家发展改革委反垄断调查等事件。

Related: 新华社：不应过度迷信洋食品|新华社|食品安全|洋食品_新浪财经_新浪网 除了“有毒食品”，国外的以次充好、偷梁换柱现象也屡见不鲜。以拥有世界最严格食品安全制度而骄傲的欧洲人，今年年初在“马肉风波”上栽了跟头。欧洲人用马肉充牛肉，美国人去年则被曝出用扁桃仁假冒大杏仁误导消费者。由此观之，食品安全是个普遍存在的问题，一味迷信“洋食品”并非明智之举。“洋食品”不一定都是极品，“国产货”也并非都是次品。据英国经济学人智库近日发布的《全球食品安全指数报告》，中国在107个国家中位居42 //getting huge play in Chinese media as nice propaganda gift to effectively argue that the foreigners can’t do safe milk powder either, also have food safety problems…

Related: Baby Formula Brands Admit Possible Price Violation, Xinhua Says – Bloomberg Mead Johnson Nutrition Co. (MJN), Danone, Nestle SA (NESN), Abbott Laboratories (ABT), Royal FrieslandCampina NV and domestic manufacturer Biostime International Holdings Ltd (1112) were being probed on pricing, the official People’s Daily reported on July 2. The investigation offered a window into how government scrutiny in China can create obstacles for overseas companies expanding there.

Urbanisation and growth: City chickens and country eggs | The Economist the senior leader most closely identified with the idea is the current prime minister, Li Keqiang, and he has outlined a more nuanced position. Elaborating his position in an article published in May in a theoretical journal of the Communist Party, Qiu Shi (here in Chinese), Mr Li wrote that “China is experiencing exponential urban growth which will spur investment and consumption and play a significant role in expanding domestic demand.” His formulation involves more than a simple “urbanisation-causes-growth” assumption. Under China’s current circumstances, there is plenty of reason to believe he is onto something. Rather than counting on urbanisation to boost growth directly, through increased production or higher efficiency say, the hope is that it will raise the economy’s consumption share—a key goal of China’s overall restructuring effort.

Related: 【舒立观察】户籍改革的成本账_杂志频道_财新网 this week’s editorial from Hu Shuli on how the central and local governments should split the cost of hukou reform // 未来全面户改的成本，应由中央和地方政府分担，其中公共服务的支出责任应主要由中央政府承担

Related: 王波明：城镇化牵一发动全身 是中国改革的抓手-财经网 Caijing’s proprietor Wang Boming at the 2013 China Urban Development Forum on the importance of urbanization for the next wave of reform…and not just economic reform // 【财经网讯】“城镇化牵一发动全身，是中国改革的抓手，涵盖了中国改革的方方面面。城镇化所产生的社会效应非常巨大。中国未来改革发展不仅仅局限于经济体制改革，更涉及到社会变革。”财讯传媒集团董事局主席、《财经》杂志总编王波明在8月3日举办的“2013年崇礼·中国城市发展夏季论坛”上作出上述表述。 王波明指出，当年上海资本市场也是中国经济体制改革的抓手，牵扯到国企改革、税制改革、银行体系改革等等方面。今天的城镇化一如当年的开放资本市场，对中国经济乃至整个中国社会都有着巨大的影响。 王波明认为，城镇化过程中所涉及的社会公平问题、个人权利问题也是当前中国变革所面临的关键问题。因此，城镇化的重要性毋庸置疑。

Related: 2013中国城市发展（夏季）论坛-财经网 Any foreign reporters attend the 2013 China Urban Development Forum this past weekend? Caijing special site on the forum

Xiaomi shifts into low end of mobile sector|chinadaily.com.cn Xiaomi released the Hongmi smartphone, priced at 799 yuan ($130), at a Beijing news briefing on Wednesday. Hongmi has a 4.7-inch screen, Android-based device equipped with MediaTek Inc’s 1.5-gigahertz quad-core processor. The dual-card handset supports China Mobile Ltd’s second-generation (2G) and third-generation (3G) networks. Lei Jun, founder and chief executive officer of Xiaomi, said the launch of the Hongmi signifies Xiaomi’s first attempt to explore the nation’s affordable (below 1,000 yuan) smartphone market…According to data from Alibaba Group Holding Ltd, China’s biggest e-commerce company by sales, 61 percent of the mobile phones sold on the Taobao marketplace and the business-to-customer platform Tmall.com were priced below 1,000 yuan. About one-fifth of the mobile phones sold cost 1,000 yuan to 2,000 yuan, while only 18 percent cost more than 2,000 yuan.

Related: 红米售价799，MTK流着泪数钱！ – i黑马 only 799 RMB for the new Xiaomi smartphone “Red Rice”…one commentator suggests this aggressive pricing on such a well-specced smartphone will be incredibly disruptive, and that phone should be called “blood rice” instead given the damage it is going to do to competitors and suppliers in the industry. Meanwhile rumored Apple’s cheap iPhone plan for China is going to be far too little far too late. The android phones are good enough, cheap enough and there is no iTunes ecosystem lock-in like there is in other markets. Apple fans keep hoping that one of these Apple CEO meetings with China Mobile might result in a deal, but Apple no longer has the hot phone, has very limited leverage with China Mobile, and China Mobile is clearly embracing Android at the middle and low end, as the next item shows // 前晚，我在微博中称红米为“血米”：“999的红米，打击竞争品牌的2000次旗舰机(MTK 4核）, 1999的米3打击他们3000-旗舰机（高通4核）。雷军这两招太狠了。红米应该叫血米。”我在红米发布前的一晚微博中写道。 今天，红米正式发布，价格更是令人意外的低到799，于是“血米”更是得到大家认可，他伤到很多人，很多公司，但是也有公司因为这个定价会松一口气而偷着乐。事实上，“红米799，最受伤的群体是山寨，最受伤的公司是MTK，最受伤的产品是小米2A，背后偷着乐的是高通，OPPO，BBK，金立。。。当然，中华酷联也伤得狠深。” 我在微博中写道。

Related: China Mobile launches own-brand smartphones – Xinhua  China Mobile Ltd officially entered the booming mobile terminal market on Friday as it unveiled its own-brand smartphone models. The China Mobile M701, a 5-inch screen Android-based smartphone equipped with MediaTek Inc’s 1.2-gigahertz quad-core processor, is priced at 1,299 yuan ($212). The China Mobile M601 is a 4-inch screen, dual-core Android smartphone that targets lower-end users with a price of 499 yuan. The two smartphones are produced by original equipment manufacturers, Hisense Group and Shenzhen-based BYD Co Ltd, respectively. They will hit the Chinese market through China Mobile’s online and offline outlets this month….Lingxi, the Chinese version of Apple Inc’s Siri service, will be installed on the new China Mobile smartphones. A year ago, China Mobile struck a $214 million deal to acquire a 15 percent stake in Anhui USTC iFlytek Co Ltd, a Chinese company that develops software and apps related to voice input services.

Coin of Realm in China Graft – Phony Receipts – NYTimes.com Not sure if it inflates the size or actually hides a huge amount of activity. There are plenty of small businesses that to the tax authorities amd other government data collectors look tiny and unprofitable but in fact are much larger, profitable businesses. There is a massive amount of grey income in china, and this is one of the enablers. Remember the Wang Xiaolu/CSFB 10 Trillion RMB grey income report from three years ago? // So widespread is receipt fraud that clerks at many hotel gift shops agree to falsify receipts so they show up as room charges. And at least one mutual fund company in Shanghai asks its employees to turn in fake receipts every month to claim half their salary — an accounting fraud that reduces tax liability for the company and the employee. In the Glaxo case, Chinese investigators say the drugmaker’s top Chinese executives worked closely in recent years with a Shanghai travel agency to falsify documents. For instance, airline ticket receipts were filed for trips that never took place and when executives listed 100 guests at a conference, perhaps only 80 showed up, making it possible to file false inflated receipts and thus embezzle from Glaxo’s London headquarters.

实拍大巴高速倒车追尾 司机乘客飞出窗外 – 搜狐视频 terrifying video from several cameras inside the vehicle of a bus backing up on a Jiangsu highway, being rear-ended. 1 dead, several injured

Related:  大巴高速路倒车致追尾 监控拍下10多人飞出窗外_新闻_腾讯网 pictures of the bus after getting hit, flipped on side. Lost count of how many times I have seen idiots backing up on freeways after they missed an exit, all to ave the toll fee required from taking the next exit and going back

Life in a Toxic Country – NYTimes.com Before this assignment, I spent three and a half years reporting in Iraq, where foreign correspondents talked endlessly of the variety of ways in which one could die — car bombs, firefights, being abducted and then beheaded. I survived those threats, only now to find myself wondering: Is China doing irreparable harm to me and my family? // the front page story in the New York Times Sunday Review (picture of the paper from Twitter). Expat executive recruiting just got pricier. Joked on Twitter that this story should be included in the author’s annual review “why I deserve a raise” memo

Insight: China turf war over yuan reform rattle foreign firms – Reuters As President Xi Jinping and Premier Li Keqiang try to build confidence in their reformist agenda through consensus and resolution, analysts say the last thing they need is key agencies in charge of critical components of policy being seen as in conflict. “There’s a perception, particularly outside of China, that policy is unfolding according to some great plan,” said Mark Williams, chief China economist at Capital Economics in London. “Clearly that’s never actually been the case, but evidence of conflict within the government will certainly dent confidence.”…Four other sources said they too had been warned of the spat between the PBOC and SAFE, to the extent that the conflict appears to have been an open secret in certain circles of the financial community in China and Hong Kong.

Sinica Podcast–Shop Talk with Phonemica China has no shortage of other dialects, which is why we’re delighted to host the creators of Phonemica, a crowd-sourced project to build a digital map of Chinese languages. In our studio to talk about their project and how it’s being received in China are the two founders: Kellen Parker, a linguistics graduate student at National Tsinghua University in Taiwan, and Steve Hansen, a university professor and long-time resident in Beijing. // I am a big fan of Phonemica

 

BUSINESS AND ECONOMY

China Services Growth Picks Up in Sign Economy Stabilizing – Bloomberg China’s service industries showed the first pick-up in growth since March, adding to signs the world’s second-largest economy may be stabilizing after a two-quarter slowdown. The non-manufacturing Purchasing Managers’ Index (CPMINMAN) rose to 54.1 in July from 53.9 in June, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. An official gauge of manufacturing released Aug. 1 showed an unexpected expansion.

Murky Data Muddy Debate on Chinese Consumers’ Strength – WSJ.com the country’s leaders are increasingly saying Chinese consumers aren’t shirking their responsibility—they’re just undercounted. “The official data severely understates household consumption,” argued People’s Bank of China Deputy Governor Yi Gang, speaking at a meeting of top government and private economists from China and the U.S. in April….One of the key flaws identified by Mr. Yi and other economists is difficulty measuring spending by China’s rich—who are likely underrepresented in the survey and unwilling to report all the details of their lavish lifestyles. The survey also fails to capture some household consumption paid for by firms. For China’s massive state sector—which continues to employ millions of workers—firms often pick up employees’ tabs on myriad goods and services.

深化改革 激发活力——五论做好当前经济工作 本报评论员–人民日报 Deepen Reform, Arouse Vitality—5th in a series of page 1 People’s Daily commentaries on the economy // 深化改革，是稳增长、调结构的制度保障。片面追求速度和数量的发展模式已经难以为继，不转型升级、不调整结构,经济就无法健康持续发展。处在增速换挡期、调整阵痛期，新老矛盾交织，各种问题叠加，只有深化改革、锐意创新，才能突破体制机制障碍，进一步解放生产力,使全社会创造能量充分释放、创业活动蓬勃开展，为稳增长、调结构注入不竭动力。 深化改革，要坚持正确取向，划清政府和市场的边界。更好发挥市场在资源配置中的基础性作用，提高资源配置效率。凡是市场和企业能够决定的都要交给市场和企业。政府要简政放权、转变职能，主动做好该做的事情，提高宏观调控水平，维护公平竞争的市场环境，制定规则、支持创新，最大限度地激发市场主体的活力。

制定全面改革的行动规划_杂志频道_财新网 Wu Jinglian writes in the latest issue of Caixin calling for formulating a comprehensive action plan for comprehensive reform // 十八大全面深化改革的决定能不能落实，是决定中国命运和未来的大事。我们必须以极大的勇气和智慧来克服各种困难和障碍，把改革推向前进

China Issues Plan to Overhaul Troubled Shipbuilding Industry – Bloomberg The main focus of the State Council plan will be on accelerating innovation, strictly controlling new capacity, promoting high-end products and stabilizing the industry’s international market share with greater funding support, Xinhua said. Local authorities and agencies should formulate supporting policies and ensure the timely completion of targets, Xinhua said, without providing any specific goals or a timetable.

国务院印发船舶工业加快结构调整促进转型升级实施方案 新华社——经济参考网 from the Shipbuilding plan. a bailout? // 《实施方案》强调，要立足当前，着眼长远，以加快转变船舶工业发展方式为主线，以提高发展质量和效益为中心，创新体制机制，发挥企业市场主体作用，着力改善产品结构、提升技术结构、优化组织结构、调整布局结构，化解产能过剩矛盾，提高产业核心竞争力，努力实现船舶工业由大到强的转变。《实施方案》明确了今后3年船舶工业结构调整和转型升级的主要任务：一是加快科技创新，实施创新驱动。开展船舶和海洋工程装备关键技术攻关，培育提高科技创新能力。二是提高关键配套设备和材料制造水平。重点依托国内市场需求推进关键船周配套设备、海洋工程装备专用系统和设备以及特种材料的研发、制造。三是调整优化船舶产业生产力布局

8个轨道交通项目获批 交通基建“领跑”稳增长_财经频道_一财网 more city rail projects approved // 在 中国经济“半年考卷”公布后，稳增长将领衔下半年经济工作。 昨日，发改委网站发文称，将统筹协调、加快推进重大基础设施建设。发改委称，目前一批重大工程进展顺利，先后批复了8个轨道交通项目，另有10个项目前期工作进展顺利，预计下半年开工建设。 在总结上半年工作情况时，发改委称已按照国务院决策部署，认真落实“十二五”规划。在加大规划内重大交通工程前期工作力度的同时，加强相关配套政策的制定完善，推动交通运输总体保持了良好发展态势，有力支撑了国民经济和社会发展。

China’s Steel Problem – Economic Observer During the first half of the year, every steel company in China saw massive declines in revenue. The industry has as much as 200 million tons of overcapacity, but yet, many are still expanding despite government attempts to eliminate capacity.

China’s Solar Plants will Get a New Boost From Tax Cut: Paper-Caijing China’s photovoltaic power plants will get a 50 percent cut in added-value tax, another good news for the industry after the country resolved a biggest-ever trade dispute with Europe, its largest importer. “Related authorities will make clear of a favorable tax policy in the near future”, which will have the added-value tax in photovoltaic power plants cut by half, reported by the China Securities Journal, citing “authoritative sources.”

Chinese Local Govnts Unlikely to See Detroit-like Bankruptcy: Think-Tank-Caijing “Don’t just look at figures of debts, look at real-value assets behind them,” said Song Ping, deputy director at the National Development and Reform Commission (NDRC)’s economic research center, a Chinese government think-tank, said Thursday at a State Council briefing. Detroit is in a different situation with local Chinese governments which have more high-quality assets, said Song, adding the Chinese growth, though with a slower pace, remains on an upward trajectory.

Risk in local govt debt ‘well under control'[1]|chinadaily.com.cn The risk element of local government funding vehicles is well under control, said Shang Fulin, head of the China Banking Regulatory Commission in an interview with CCTV on Friday. Shang said in general the risk exposure of lending to local governments is small because most of the loans are long-term and contained by effective regulations and controls. It is possible that there will be defaults on some lending to local governments. The commission will classify the lending and take various measures to manage it, said Shang.

北京土地出让金前7个月达870亿 远超去年全年|北京|出让金|日光盘_新浪财经_新浪网 Beijing City land sales through July have already exceeded the total for all of 2012 // 近日，中原地产市场研究部统计数据显示，北京7月土地出让金合计达206.22亿元，前7月累计870.46亿元。7月也是年内第三个单月土地出让金突破200亿元的月份。

Western Asset Picks China Developer Debt as Slowdown Cuts Prices – Bloomberg Western Asset, which had more than $436 billion under management as of June 30, favors short-dated bonds from BB rated real-estate companies, according to Chia-Liang Lian, the Singapore-based head of investment management for Asia outside Japan. Securities sold by Beijing-based Soho China Ltd. (410), for example, fell as low as 94 cents on the dollar in June before rallying to 99 cents last week, Bloomberg prices show. “These are good names, they have a relatively long track record as bond issuers and, if you look at real estate versus other industries, it’s more transparent,” said Lian, speaking during an interview in Hong Kong last week. “Fears of a Chinese hard landing, we think, are overplayed and we have full confidence that there will be sufficient ammunition.”

Developer’s Share Placement Plan ‘Means Fundraising Controls Easing’ – Caixin In addition, since the State Council, the country’s cabinet, and Premier Li Keqiang have repeatedly emphasized they wanted to push forward with the renovation of shantytowns and building of subsidized housing in urban areas, property companies involved these projects will find it easier to get approval. Xinhu Zhongbao says it is deeply involved in shantytown projects. It added that funds raised in the proposed share placement would mainly be used for a work on a shantytown in Shanghai.

GM splits China from international unit, hires former Volvo CEO | Reuters General Motors Co (GM.N) said on Friday it has split the critical China operations from its international unit, which will now be run by the former chief executive of Swedish automaker Volvo. Tim Lee, who has led the international operations unit for almost four years, was named chairman of GM China and retains his position as global chief of manufacturing.

Dying out? China’s young shun family firms | Reuters As China’s first-generation entrepreneurs hit retirement age, more than 3 million private businesses will have to deal with succession issues in the next 3-8 years, according to data from the Chinese Academy of Social Sciences. This is not unique to China, of course, but it poses particular risks in a country where there are few professional managers, and families are reluctant to hire outsiders anyway for fear they will take control of the business. Domestic acquisitions and private equity involvement are also rare, giving first-generation owners fewer exit options

China’s Tallest Building Reaches Highest Point – Bloomberg A topping-out ceremony today marked the placement of the final beam on the main structure of the 632-meter (2,074-foot) project in the city’s Pudong business hub. Shanghai Tower is set to be the tallest building in East Asia, and second in the world to the 828-meter Burj Khalifa in Dubai, according to the Chicago-based Council on Tall Buildings and Urban Habitat. The 125-story complex will include offices, a luxury hotel and retail space, according to the developer, Shanghai Tower Construction & Development Co.

Homeless for a month’: U.S. interns in China learn to reset expectations | Marketplace.org Once the group of Americans arrived, they were handed costumes. They were ordered to put them on. “Don’t know if you’ve seen ‘Mary Poppins,’ but when Mary Poppins goes into the dreamland and Dick Van Dyke is wearing that white and red jump suit with the top hat? That’s exactly what I looked like,” says Madson. And that’s the moment Madson realized he had traveled 10,000 miles around the planet so that he could greet visitors at the front gate of a Chinese amusement park. His job was to wear a candy cane striped suit and collect entrance tickets from Chinese tourists. Intern Mark Rowland — the accounting major — was given a safari costume to wear. He was told he’d be working inside the park’s zoo.

Plight of Chinese hawkers highlights impact of downturn – FT.com “There are studies that show a connection between unemployment and the number of street vendors in China,” says Ye Tan, a popular columnist who has written extensively about the chengguan. “But for many vendors the problem is not that they can’t find a job, but that they are unwilling to work long hours in high-risk manufacturing jobs.” //the prolific Ye Tan is out with a new book 《中国经济站在了十字路口？》  

From One-Child Policy To Two In China – Business Insider “According to the 21st Business Herald which cited sources close to the National Population and Family Planning Commission, China may significantly relax its one-child policy at end-2013 or early-2014 by allowing families to have two children if at least one parent is from a one-child family,” writes Ting in a note to clients. “A plan for allowing all families to have two children after 2015 is also being reviewed. We believe the news to be reliable and is in line with our view.”

 

POLITICS AND LAW

Tip-offs wanted regarding faux master |Society |chinadaily.com.cn The health inspection institute of East China’s Jiangxi province on Saturday called on the public to offer tips regarding potentially illegal medical practices conducted by self-proclaimed “qigong” master Wang Lin. Institute head Luo Youwu said two hotlines and an email address have been set up to receive tips, adding that the public can also send tips through conventional mail.

INNER SANCTUM (4): No one knows for sure what lies beneath Zhongnanhai – AJW by The Asahi Shimbun lots of underground tunnels around DC, irresponsible of Beijing planners to not have any too // A heavy veil of secrecy shrouds what goes on within the Zhongnanhai compound, but a bigger mystery may be what is happening beneath it. Several sources in the Chinese Communist Party say an underground passage connects the compound to the Great Hall of the People, where the National People’s Congress is held. The secret passage is supposed to allow top leaders, such as General Secretary Xi Jinping, a safe way to get to and from the Great Hall of the People. // and the rumor is that there was a passage to the old Sichuan Hotel, now China Club, so Deng Xiaoping could get some tasty Sichuan food

Four senior Shanghai judges suspended for hiring prostitutes | South China Morning Post Four officials with the Shanghai Higher People’s Court, including Chen Xueming and Zhao Minghua, chief and deputy chief judge of the No 1 civil court, were among five people filmed with prostitutes at a luxury resort in the city’s Pudong New Area in June. There was no official information about the fifth person’s identity

刘娟前传-财经网 由陕西省政府打字员下海打拼，到坐拥价值上千亿元煤矿，刘娟14年资本腾挪的背后是谁在助力？// Caijing looks at how Liu Juan built her 100B RMB empire. Liu started as a typist in the Shaanxi government

“大师”王林涉嫌非法持有枪支 被警方立案调查_新闻_腾讯网 local police in Jiangxi have opened an investigaton into Wang Lin for illegally possesing a firearm // 中新社南昌8月4日电 根据江西省芦溪县公安局出具的“立案告知书”显示，因涉嫌非法持有枪支，江西所谓“气功大师”王林被芦溪警方立案调查。立案告知书下达于2013年8月1日，芦溪县警方认为，“王林非法持有枪支案”符合立案条件，决定立案侦查。

Xiao Shu freed, releases statement – China Media Project Veteran journalist and former CMP fellow Xiao Shu (笑蜀), who was detained by state security police on August 2 for his vocal support of rights activist Xu Zhiyong (许志永), was freed earlier today after being returned to his home in Guangdong province. Xiao, a key proponent of China’s so-called New Citizen’s Movement, a broad movement to promote greater citizen involvement in a range of social and political issues, posted the following statement shortly after his release:

Maverick official’s blogs give life to ‘zombie’ accounts[1]|chinadaily.com.cn As a way to connect with the public, in recent years, many government departments and officials have set up micro blogs that are considered a powerful tool to break news and gather information. Sina, a major micro-blogging host, now has nearly 80,000 such accounts, including more than 30 owned by officials like Chen who hold powerful positions at provincial or ministerial levels. However, after the initial fanfare and buzz, most of these accounts have either been used as bulletin boards to post press releases or trumpet government achievements, or have become “zombie” accounts, as they are popularly called. Sina has found that only 15 percent of its micro blogs run by officials have published any “original content”.

Ex-journalist to take China Resources ‘corruption’ files to Hong Kong investigators | South China Morning Post An independent mainland investigator with ambitious plans to topple the chairman of one of the country’s largest state-owned conglomerates with corruption charges has announced he would visit Hong Kong’s top anti-graft bodies on Monday and turn over evidence on alleged mismanagement, negligence and corrupt activities involving dozens of senior corporate executives.

Wall Street Journal’s Chinese version site blocked in China | South China Morning Post Access to the Wall Street Journal’s Chinese-language edition has been cut off in China, where official censors routinely delete online content deemed sensitive but less often block entire websites. Only the local version of the US newspaper, and not the English-language website, was unavailable. It was unclear why this occurred or whether it was intentional.

知情人：国资委认为限国企高管收入将致人才流失_网易新闻中心 SASAC says if SOE execs pay is cut there may be a talent drain…where have we heard that before? // 收入分配改革方案公布5个月后，一直悬而未决的国有企业高管薪酬问题的解决方案进入到实质讨论阶段。《中国经营报》记者获悉，近日，人社部、国资委等相关部委针对国有企业高管薪酬问题已经展开了两次讨论。 “一次是针对垄断行业和非垄断行业的国企高管薪酬问题的讨论，另外一次是针对金融领域和非金融领域的国有企业高管收入问题的讨论。”一位参会人士向记者透露。

多维独家：薄熙来十八大前已移交山东廉政基地_中国_多维新闻网 Duowei says reports over the last few months of Bo Xilai’s location have been wrong, that he’s been in Jinan, Shandong since before the 18th Party congress// 【多维新闻】薄熙来案日前在山东济南正式被提起公诉，并酝酿近期开审后，各大媒体对薄熙来如今下落传闻纷纭。总括之，目前有关薄熙来下落的消息计有3种说法，一说仍在秦城监狱羁押，一说两周前由北京转往济南待审，而最后一种说法则明确指出薄熙来目前人在山东中部城市淄博。不过，多维新闻独家从接近薄熙来专案组的人士处获得消息，证实上述3种说法皆不准确。事实上，在中共十八大前，薄熙来便被秘密转移至山东省济南市相当于四星级酒店的“山东廉政教育基地”。

罗昌平《打铁记》第十章：红色“黑匣子”_UGC精选 installment 10 in Luo Changping’s serialized story of his role in the takedown of Liu Tienan // 这个冬天格外寒冷，四场大雪飘然而至，来不及消融，钢混森林的上空漂浮着黑色的煤灰颗粒，仿佛盖着一个灰蒙蒙、脏兮兮的罩子。那天的陌生来电，声音和蔼，语调平缓，他先通过同事张鹭跟我约定通话，确定身份与地点，然后提出派车来接送，我拒绝了，我清楚他们的办案经费毫无节制——正如在雾霾毒气中还要吸烟的人，不要试图占党和国家的便宜。 但他们接着提出，自驾必须遵循两点要求：一是避免意外，二是提防跟踪，“现在盯你的不止一两方。”

China rights scenario deteriorating, says United States | Reuters The United States got few answers to questions about detained activists during its annual rights dialogue with China, and believes the situation in the country continues to deteriorate, a senior U.S. official said on Friday.

上海市纪委介入调查“法官夜总会娱乐”事件_网易新闻中心 中新网上海8月2日电 上海市纪委2日晚间回应网民爆料“上海高院法官夜总会娱乐”时表示，获知相关信息即会同上海市高级人民法院党组，对该院民一庭庭长陈雪明等四人在某度假村夜总会娱乐的情况开展调查。上海市纪委方面表示，将根据查清的事实依纪依法进行处理，并向社会公布结果。

Controversial Railway Changes Course – Economic Observe The Beijing-Shenyang high-speed railway has changed its origin stop from Beijing Station to Xinghuo Station, which may be linked to protests by local residents. //NIMBY

 

FOREIGN AND DEFENSE AFFAIRS

Xi Jinping promotes 10 more to PLA general, including two in Hong Kong | South China Morning Post Two days after promoting six senior PLA officials to full general, President Xi Jinping yesterday elevated another 10, including the two senior officials in charge of ideology at the army’s Hong Kong garrison.

Chinese Defense Professor Says Army Closing Corruption Loopholes – Bloomberg China’s army is closing loopholes that allowed for corruption and led people to become unhappy with the military, a professor at the National Defense University said in remarks posted online. Corruption is a problem for the whole of Chinese society, yet people have higher expectations for the army since it has to fight wars, Gong Fangbin wrote on the People’s Daily website yesterday, in response to questions submitted by readers. The National Defense University is part of the People’s Liberation Army.

Wang Xiangwei–Time for Xi to clean up the sleaze pervading the PLA | South China Morning Post Gong mentioned the corruption cases involving Lieutenant General Gu Junshan and his predecessor former deputy admiral Wang Shouye , saying such crimes involving senior military officers had made mainlanders unhappy. His public acknowledgment of corruption in the PLA was highlighted by mainland news portals and newspapers. Indeed, despite intense rumours about the widespread corruption permeating the PLA, leaders have never publicly broached the issue.

Woman in green paint case slept in park near White House, and her life is a mystery – The Washington Post consular officer who gave her the visa must be rethinking things // Tian has declined to tell investigators where she lived in the District, where she is from or how she got here, authorities said. Federal immigration officials would say only that she came to the United States on a short-term visa that expired July 27, in the midst of the rash of vandalism. Citing privacy concerns, they declined to reveal the date she arrived in this country or her city of entry. One of Tian’s attorneys confirmed in court last week that she came to this country on a tourist visa.

Bad management drives talent from CIA, internal reports suggest – latimes.com The analyst, who declined to be named to shield his association with the CIA, was hired in 2005 into the agency’s Directorate of Intelligence, where he was assigned to dig into Chinese politics. He said he was dismayed to discover that unimpressive managers wielded incredible power and suffered no consequences for mistakes. Departments were run like fiefdoms, he said, and “very nasty internecine battles” were a fixture. By 2009, he had left the CIA. He now does a similar job for the U.S. military.

‘Comfoo’ APT Cyberespionage Campaign Exposed — Dark Reading Comfoo has been associated with one of China’s largest cyberespionage organizations known as the Beijing Group, and the attacks discovered by Secureworks operate on the same infrastructure as the group. “But it may or may not be the same persons at the other end of the computers. They may just be sharing the same infrastructure,” Stewart says.

Beijing hacking combine exposed–USA Today A Beijing-based hacking combine that has broken into hundreds of company networks — and continues to do so with near impunity — may have a tougher go of it from here on out. That¹s because here at the Black Hat Conference researchers from DellSecureWorks disclosed evidence that helps fingerprint the handy work of one of the top two cyber espionage gangs operating out of China. Dell SecureWorks calls them the Beijing Group, , so-named for the location of the IT infrastructure they use to pull off their hacking campaigns.

Car company with ties to Terry McAuliffe probed by SEC – The Washington Post The visa program, which is dominated by Chinese applicants, permits foreign nationals to enter the United States if they agree to invest at least $500,000 to create U.S. jobs. The 20-year-old program enjoys broad bipartisan support, but it has recently been dogged by national security concerns. Some of those concerns center around Huawei Technologies, a privately-held electronics conglomerate with close ties to the Chinese government that has raised national security concerns. The documents obtained by The Post show that an executive for Huawei applied for a visa through Gulf Coast by investing in Green Tech. DHS officials launched an inquiry into the executive that includes finding out where his investment money came from. Representatives of Huawei did not respond to requests for comment Thursday. The firm has long denied any impropriety.

U.S. wins trade dispute with China over chicken parts | Reuters hope this means cheaper chicken feet…// An official with the U.S. Trade Representative’s office estimated that the United States has lost about $1 billion in broiler product sales since the duties were imposed by China in 2010. Since 2010 the Chinese Ministry of Commerce has had anti-dumping duties on Tyson, Keystone and Pilgrim’s Pride ranging from 43.1 percent to 80.5 percent, and a “weighted average” duty of 64.5 percent on imports from 32 additional U.S. companies.

Paris ramps up tourist security amid Chinese concerns | Reuters France is the world’s most-visited country and solid tourism revenues are a bright spot in its depressed economy. But reports of pickpockets and muggers targeting Chinese tourists have soared of late, tarnishing the French capital’s image as a favored destination for love-struck couples and high-end shoppers.

The Asan Forum–A New Cold War? Introduction to the July Special Forum The prospect of another cold war, scarcely raised in the 1990s-2000s, has recently drawn increased attention. A few realists, under the spell of deductive logic or historical analogy, raised it earlier. Obsessed by the record of China’s Communist Party, a small number of China watchers made a rather seamless transfer from prior warnings against the Soviet threat to a China threat, especially after the June 4, 1989, intensification of oppressive measures. Yet, until recently, the prevailing outlook was liberal optimism about the predominant weight of a market economy—international economic integration—in soothing tensions among major powers in the Asia-Pacific. Why has the mood shifted? Multiple reasons are discussed in the articles that follow. //promising new Journal, looks to be funded by South Korean Money

Former Bureau Chief Allegedly Preyed On Female Interns and Reporters | wusa9.com with video, what a mess // It involves Phoenix Television, one of the world’s largest and most popular Chinese broadcasting companies and its former Washington Bureau Chief.  According to the complaint in a federal lawsuit, Zhengzhu Liu allegedly groped and propositioned numerous female interns and reporters.  In our video, we agreed to conceal the identities of the alleged victims in this case. They fear not only for their current jobs, but for their family members in China. What’s alleged is a pattern of sexual assault and harassment, and a company that appears to have taken years to stop it.

China Is Winning the Space Race – By John Hickman | Foreign Policy Shenzhou 10, however, represents more than a pricey technological ornament for nationalists with a chip on their shoulders. China now has what the United States lacks: a reliable manned spacecraft. The United States finds itself in the preposterous situation of depending on Russia to transport personnel and much of the cargo to and from the ISS. Underfunding and poor planning means that the same nation that once landed men on the Moon can no longer launch anyone into orbit. The United States’ best hope is that the private firm SpaceX, which NASA has contracted to supply cargo to the ISS, will eventually be able to transport U.S. astronauts as well. Shenzhou 10 is a reminder that for at least the next few years, space is only accessible via a Russian or Chinese rocket. No wonder that astronauts from the European Space Agency are learning Chinese. // this dire for the US? 

 

HONG KONG, MACAO AND TAIWAN

Huge crowd protests Taiwanese soldier’s death over unauthorized cellphone-AP Tens of thousands of Taiwanese gathered in downtown Taipei on Saturday to protest the death of a 24-year old soldier confined to a brig as punishment for bringing an unauthorized cellphone onto his base. The protest was the biggest so far in the continuing campaign to register discontent over the death of Hung Chung-chiu on July 3. The simmering anger is complicating the Taiwanese military’s efforts to transition from a mixed forced of conscripts and volunteers to an all-volunteer force.

China plans cross-strait highways | South China Morning Post The mainland government has recently approved a national road project that includes two cross-strait highways linking both sides of the Taiwan Strait. If completed, the project would be a literal and figurative bridge between the mainland and Taiwan and would mark a major milestone in cross-strait relations. However, Taiwan’s Mainland Affairs Council, the island’s top cross-strait policy planning body, told the South China Morning Post the project had been “unilaterally worked out by mainland authorities”.

 

TECH AND MEDIA

China Scrutinizes 2 Apple Suppliers in Pollution Probe – WSJ.com KUNSHAN, China—Chinese regulators are scrutinizing two suppliers to Apple Inc. AAPL +1.28% and other gadget makers following allegations by environmental groups that plants run by the two companies are pumping large amounts of toxic heavy metals into nearby rivers.

China Joy 2013 Recap – Niko Partners One of the most interesting meetings we had during the week actually took place away from China Joy. It was at publicly traded BesTV (Shanghai Stock Exchange). BesTV’s booming business seems to have spawned from demand within a highly regulated digital entertainment and TV industry. The company is the sole owner of an IPTV license and one of nine companies that have an OTT license for online programming via smart TV. It already offers “console alternative” games via smart TVs, including a “skype-like” chat service, controller and more. It is developing a games console too, which leads me to the interesting part: perhaps the rumor of a possible overturn on the current ban on consoles within the future Shanghai Free Trade Zone will lead to legalization of a console by a Shanghai-based company, ie BesTV. Perhaps this console will differ from the global console companies’ products in such a way that it can be approved but they cannot. I have no insight into this, but I left the meeting at BesTV with a hunch that maybe, just maybe, this company will be a winner if the ban is overturned, and that it already seems to be doing great business anyway.

 

SOCIETY, ART, SPORTS, CULTURE AND HISTORY

Police find kidnapped baby alive in Henan |Society |chinadaily.com.cn Staff at hospital are accused of removing babies from parents and selling them A baby allegedly kidnapped and sold by an obstetrician in Fuping, Shaanxi province, has been rescued, police said on Sunday. Police found the baby at about 3 am on Sunday in Anyang, Henan province, which borders Shaanxi.

CHINA.lupho.de Interesting China Photo blog

 

ENERGY, ENVIRONMENT, SCIENCE AND HEALTH

湖北宜昌：长江水域再遭“死猪”入侵(高清组图) – 新闻 – 国际在线 more dead pigs in a river, this time in the Yangtze in Hubei near Yichang. Pictures

China Pollution Report – China Real Time Report – WSJ People who want to live in a Chinese city with acceptable air quality can try the Tibetan capital of Lhasa, the island city of Haikou, the coastal town of Zhoushan or the Pearl River Delta city of Huizhou. That’s it. No other major population center in the country makes the cut, according to a report by China’s environment ministry on air pollution in the first half of 2013.

Energy Risks: China Shale Gas Resources Redux EIA’s estimate of China’s technically recoverable shale gas resources still exceeds those of China’s Ministry of Land Resources, noted in the article below.  Further, the EIA/ARI report emphasizes that future exploration and development drilling in China will affect shale gas TRR estimates, and could increase these appraisals.  So while China’s early targets for shale gas production of 6.5 bcm in 2015 and 60-100 bcm in 2020 appear unrealistic, China continues to possess by far the world’s largest shale gas resources.

Reforming China’s S&T System–Science Magazine abstract, article behind paywall // There is growing anxiety among Chinese political and scientific leaders that, despite more money, better-trained talent, and sophisticated equipment, the domestic innovation system is still underperforming (1). Chinese scientists have yet to produce breakthroughs worth a Nobel Prize. Research and business sectors have been disconnected for decades, with few research results turned into innovative technology and products. With few exceptions, Chinese enterprises depend on foreign sources for core technologies (2). We discuss interwoven roots of these problems at macro, meso, and micro levels of governance of the science and technology (S&T) system and the need for political will if they are to be overcome.

[视频]【抗旱保民生】南方旱情持续 多地全力抗旱_新闻频道_央视网 bad droughts in southern China, as CCTV Evening News Sunday reports in several segments at top of the broadcast // 央视网消息(新闻联播)：受持续高温晴热天气影响，贵州、浙江、湖南等省市部分地区出现了不同程度的旱情。6月份以来，贵州更是遇到了50多年来最严重旱灾。面对旱情，当地干部带头深入一线，带领基层干部全力投入抗旱保民生，用实际行动践行党的群众路线教育实践活动。

 

FOOD AND TRAVEL

From sex toys to Chateau Lafite: Andrew Caillard on China wine documentary ‘Red Obsession’ | Grape Wall of ChinaRed Obsession’ is almost like a thriller about China and the passion for wine. It’s a tale of the rise of the middle class in China and its voracious appetite for luxury goods as seen through the prism of Grand Cru Class Bordeaux.

 

BEIJING

Beijing subways expecting shorter interval|Regional|chinadaily.com.cn Beijing has plans to reduce the time interval between trains on its three busiest subway lines, over the next several years, local transportation authorities said on Tuesday, with the minimum interval on Lines 1, 5, and 10 expected to be two minutes, the minimum interval in major cities of the world. This means that, if we add in Lines 2 and 4 (the two that now use this system), subway passengers in the capital will have five lines with only a 2-minute interval.

Pollution blamed for Beijing tourism drop | China tourism | SBS World News The number of tourists visiting China’s capital fell by more than 14 per cent in the first half of this year compared to 2012 with air pollution blamed for the decline.

Overseas investors welcome to bid on projects in Beijing|Economy|chinadaily.com.cn Six areas of Beijing’s infrastructure construction will be open to overseas and domestic investors this year, said Peng Bo, a spokesman for the Beijing Commission of Reform and Development, the city’s economic planner. The six areas include rail transport, city roads, the rail transit complex, drainage treatment, garbage disposal and heat supply in townships. A total of 126 projects will need an investment of 338 billion yuan ($55.15 billion), of which 130 billion yuan will be channeled from social capital, according to a plan released last week by the commission at the 5th Beijing Investment Fair.

北京私家车合乘协议拟年内出台 明确与黑车区别|北京|私家车|黑车_新浪财经_新浪网 Beijing to release carpool rules/guidance in september // 中广网北京8月4日消息(记者解朝曦 杨扬 北京台记者王琛琛)据中国之声《新闻晚高峰》报道，根据过去3年的数据显示，每年9月份是北京市交通拥堵指数最高的月份。为治理拥堵，北京市交通委网站草拟了2013年《”绿色出行畅通北京”9月缓堵专项行动方案》，目前正在面向社会征集意见。

 

BOOKS AND LITERATURE

Tash Aw’s ‘Five Star Billionaire’ Captures China’s Changes – NYTimes.com been reading this book for weeks, have little interest in finishing it, find it pretentious and unrealistic…must just be me, since everyone else is praising it // Mr. Aw has an eye for status distinctions. There is some Edith Wharton, as well as some Tom Wolfe, in how he invests awareness of these distinctions with moral and financial peril. “Five Star Billionaire” was recently placed on the long list for the Man Booker Prize, Britain’s top literary award, and one of its pleasures is purely sociological. It’s a busy yet sophisticated portrait of life in one of the most populous cities on earth. // The book on Amazon

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