The Sinocism China Newsletter For 01.11.13

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

Just links today, had a late night that started with a going away gathering for Will Moss (aka @imagethief). Today’s horrible pollution (official reading, view of a hazy Beijing CBD from my window) is not helping.

Subscribers who signed up with a Yahoo email account did not receive the newsletter Thursday as Yahoo bounced all the emails. Apologies, hope it is a one day occurrence, nothing I can do on my end to fix Yahoo’s dysfunction.

Today’s Links:


Fall in China headline bank lending may signal strength of recovery | Reuters – While weak bank lending figures in December may prompt worries that China’s economic recovery is faltering, most of the recent decline is due to a fall in discounted bills, which have little relationship to investment. In fact, analysts say the lower proportion of bill discounting in overall lending may signal improving risk appetite by banks as China’s economic outlook improves.At the same time, a surge in undiscounted bills in recent months suggests that overall credit demand in the world’s second-largest economy remains strong but is now being satisfied through off-balance sheet credit.

Japan scrambles fighters as PLA jets near disputed Diaoyu Islands | South China Morning Post– testing..dangers of mishap/misunderstanding increasing// Japan scrambled fighter jets yesterday to head off several Chinese military planes near the disputed Diaoyu Islands, Japanese media said.The Chinese planes were spotted on Japanese military radar north of the islands, known in Japan as the Senkakus, the Fuji TV network and Kyodo news agency reported, quoting Japanese defence ministry officials. They did not violate territorial airspace over the islands but flew inside Japan’s so-called airdefence identification zone, the report said.

Now China’s WeChat App is Censoring Its Users Globally-TechInAsia– I was explaining Wechat recently to a very knowledgeable American technology professional and this person’s first question was “it is P2P or server-based”?..point being that foreign users may be concerend about using a mobile SNS when all your data runs through Chinese servers…Tencent needs to be more transparent about how the data are routed and used if it expects to gain significant traction in overseas markets..some commenters questioning this story..but the fact that it is even conceivable is a problem for Tencent…// We’ve tested it out going from users in China to Thailand (blocked), Thailand to China (blocked), and even Thailand to Singapore (blocked); the prohibited words are not sent at all. The name of the magazine can be sent in English.While some long-standing bugbears of Beijing – like the name of a certain cult group – are already blocked on WeChat, this is the first major case of topical censorship seen on WeChat that we know of. It might seriously affect the app in overseas markets if users feel unease over these kinds of restrictions – even if it apparently doesn’t affect English words or phrases.

Chinese netizens turn to metaphors to condemn, evade censorship | South China Morning Post Former Google China head, now Innovation Works CEO Kaifu Lee invited to tea by security authorities for his Weibo postings?// What on earth did Lee really mean? The answer is in the words he intentionally missed out in the post: “south” and “weekend”. And the photo suggests he was invited to tea – meaning he was warned by the authorities – another open secret to Chinese netizens.Lee was one of China’s online celebrities who openly expressed support for the Southern Weekend, also known as Southern Weekly, an outspoken Guangzhou-based newspaper.

China Economic Watch | Did China Really Lose $3.75 Trillion in Illicit Financial Flows? – the Global Financial Integrity report seemed more hyperbole than substance to me…// In this context, while it is certainly useful to identify and estimate illicit flows, GFI’s statement that “social, political, and economic order is not sustainable in the long run given such massive illicit outflows” seems like hyperbole. Chinese illicit outflows are much smaller than the GFI report indicates and a considerable percentage end up back in China in the form of foreign direct investment.

Big China Short Shows Downside of Kleptocracy – Bloomberg – Weil damages an otherwise useful piece with his facile use of the word “kleptocracy”// It is only prudent for investors to start with the assumption that the books of every publicly traded Chinese company are cooked. (To be fair, the same also may be true of the world’s biggest banks.)

Protests Unite Farflung Chinese Activists –  wonder how the next few weeks will be for these folks…// The previous night, he was one of about 30 anti-censorship protesters from across southern China who had gathered up their banners and gone for dinner together at the back of a large banquet hall nearby. On the way to the restaurant, he spoke about how the loosely organized group of protesters was reaching out to others, contacting thousands on China’s instant-messaging service QQ and Sina Corp. SINA ’s Weibo microblogging service. “We told people it is time to stand up, we’ve hit a point where if we don’t we will always be oppressed,” he said. Most at the dinner had Twitter and Gmail accounts, and though they said in recent months it had become harder to access foreign websites from within China, one man pulled up his Facebook account to show off his profile.

Investigative Reporting Under Attack in Hong Kong, Reporters Say – China Real Time Report – WSJ – In a paper submitted to the legislature this week, the government proposed blocking public access to the personal information of company directors. Such a change would pose a threat to “most of the investigative reporting in Hong Kong,” said Mak Yin-ting, who chairs the Hong Kong Journalists Association and calls the proposal the biggest threat to local press freedom since the city’s showdown over a proposed anti-subversion law in 2003



China exports rebound but 2013 outlook remains murky | Reuters – Uncertain trade prospects contrast with data that showed resilient local loan demand, further evidence that the world’s second-largest economy rebounded towards 8 percent annual growth in the last quarter of 2012 on firming domestic demand. That modest revival may reassure China’s new leaders after a once-a-decade power transition at the top of the Communist Party in November, and follows a raft of pro-growth policy steps designed to support the economy – poised to post its slowest full-year growth figure since 1999.Trade data released on Thursday showed the value of China’s exports grew 14.1 percent last month compared with a year earlier, racing past forecasts of analysts polled by Reuters, who had expected annual growth of 4 percent.

China’s Global Investments Climbing, But Troubled – China Real Time Report – WSJ– China’s overseas investments neared $80 billion in 2012, according to the latest tally by the Heritage Foundation, a conservative Washington D.C. think, and may well hit $100 billion a year in the coming years.But rapid, further expansion is far from assured, says Derek Scissors, a China analyst at Heritage

China Global Investment Tracker Map--Heritage Foundation – China’s investment in the U.S. and around the world as a whole set more records in 2012. The China Global Investment Tracker created by The Heritage Foundation is the only publicly available, comprehensive dataset of large Chinese investments and contracts worldwide (excluding bonds). Details are available on over 750 attempted transactions — failed and successful – valued at more than $100 million in all industries, including energy, mining, transportation and finance.

Yum Brands’ China CEO Apologizes Amid KFC Chicken Probe – – Yum have strong anti-corruption controls in its China operation?// BEIJING—Yum Brands Inc.’s YUM +2.21% head of operations in China publicly apologized to KFC customers on Thursday after a high-profile official probe into chicken suppliers hurt its sales, demonstrating the growing power of digitally connected and increasingly health-conscious Chinese consumers.

China Data Suspected Says 75-Year-Old Theory: Cutting Research – Bloomberg – A mathematical tool devised by an American physicist in the 1930s underscores doubts about the quality and reliability of Chinese economic data, according to research by Australia & New Zealand Banking Group Ltd. (ANZ) The results are based on “Benford’s Law,” which holds that in any series of numbers, certain patterns will be found only if the statistics are naturally generated. The rule, created by former General Electric Co. (GE) engineer Frank Benford, suggests patterns for the first and second digits in a numeric series and can be used to detect phony data, Li-Gang Liu, ANZ’s chief economist for Greater China, and colleague Louis Lam said in a Jan. 8 report.

华晨宝马副总裁戴雷或离职_财经频道_一财网 – what is going on at BMW China? three executive resignations in a month// 一个月内,宝马中国面临第三位高管离职,“后史登科”时代宝马中国的本土化战略变数陡增。尽快度过“后史登科时代”动荡成宝马中国当务之急。

地方预缴税违规乱象频生——经济参考网 – Economic Information looks at growing phenomenon of local governments demanding tax prepayments..another sign of serious financial stress at some local governments//

China’s centrally-administered SOEs see profits decline – Xinhua |– China’s state-owned enterprises (SOEs) administered by the state-asset regulator saw profits drop 6.9 percent in the first 11 months of 2011, according to official data released on Thursday.Wang Yong, head of the State-owned Assets Supervision and Administration Commission (SASAC), said at a conference that these enterprises made total profits of 1.7 trillion yuan (270.73 billion U.S. dollars) during the period.



人民日报-改革需要更广泛群众基础(人民观点) ——深化改革方法论之六 – today’s edition of continuing series in people’s daily on deepening reform…rhetoric really trying to make government sound much more accountable and “consultative”// 改革是利益格局的调整。个税起征点调整方案一个月收到20多万条意见,“重罚闯黄灯”交通规则短时间引发全民大讨论,莫不因为涉及群众的切身利益。推进各项改革,必须充分吸纳群众不同意见,积极推动公众参与,形成利益协调机制,才能处理好各方面复杂的关系,让改革发展成果更多更公平惠及全体人民。改革的目的是更好地实现人民利益,公众参与热情是否高涨、参与渠道是否通畅、参与机制是否健全,直接关乎改革方向、改革效果、改革成败。

China Voice: Labor camp system reform renders salute to Constitution – Xinhua |– To accommodate the broad changes that have taken place in China’s social and economic spheres, the Constitution was amended four times from 1988 to 2004, with notable amendments including those that emphasize the protection of human rights and citizens’ private property.Re-education through labor, however, runs contrary to those amendments as many cases have shown that it has been misused to persecute innocent people and illegally punish protestors.

适应民主法治进程 改革劳教制度 – 新华法治 – 新华网– 劳教制度最早可追溯到1955年《关于展开斗争肃清暗藏的反革命分子的指示》,引自苏联,主要处罚的是“反革命分子”和“坏分子”。1957年全国人大常委会批准国务院提交的《关于劳动教养问题的决定》,成为中国首部劳动教养法规。    不可否认,在新中国成立初期的历史阶段,劳教制度的设立对于巩固执政党地位、维护社会稳定发挥了较大作用。 不过,在近些年的实践过程中,劳教制度的问题日益凸显,譬如:实施劳教机关对劳教权随意使用、以“教养”之名行刑罚之实、对现行劳教决定涉及不到的人进行劳教等。近些年来,劳教制度甚至成为某些地方政府官员滥用的“维稳”工具之一。

Greater courage needed to build China a country under rule of law – People’s Daily Online– The governmental departments and the public have reached a consensus on issues including reforms of the reeducation through labor, the petition letters and visits related to complaints and lawsuits, the use of judicial powers and the household registration system after discussing many times. Now, the most important thing is to take action.The contents of reforms are in highly keeping with the aspiration of the public. The 18th CPC National Congress proposed to seize the opportunity and use greater political courage and wisdom to deepen the reforms in important areas. Each of the four focuses of reforms set at the national conference on political and legal work is a hard nut, but it is also a breakthrough in doing practical things.

As Protest Ends, Chinese Censorship Battle Remains –– Mr. Xi has said he favors deeper reform, which some observers have said could include measured political relaxation. But rolling back China’s censors will take more than general vows of change, said Zhang Jicheng, a journalist who left a sister publication to Southern Weekend last year under political pressure.“At the senior levels, there may be people who are personally more open and forward-looking, but ultimately the censorship doesn’t budge much, because the regulations and institutions remain the same,” Mr. Zhang said. “I hope that this incident leads to good changes, to less meddling, but I find it hard to believe that there won’t be internal recriminations. There always have been in the past.”

重庆卫视时隔两年全面改版 恢复综艺与商业广告_网易新闻中心 as of Jan 1 Chongqing TV has returned to “normal”// 随着一批综艺节目于元旦期间登陆晚间十点档,重庆卫视终于借跨年之际全面改版。这是重庆卫视去年3月恢复晚间电视剧和回收地方频道栏目后又一次大规模节目调整。商业广告也于去年年末悄然复播。本报记者1月9日从多个渠道得知,重庆卫视全天各时段的商业广告均已恢复招商,部分王牌栏目的广告刊例价翻倍

中青报:与媒体良性互动应是执政共识-财经网 – 新闻工作者不是麻烦制造者,而是上情下达、下情上达的沟通者;新闻媒体也并非心怀恶意的捣乱者,而是执政者与公众交流、沟通、互动的有力平台。善待媒体,是现代治理的应有之义,不仅关乎执政能力建设,更关乎执政伦理

媒体曝郑州经适房仅1/3给市民 其余被层层扣留_资讯频道_凤凰网 – expose of massive corruption in subsidized housing in zhengzhou..shocked, just shocked…

Crash survivors: Families of the Lin Biao clique| –know one of the relatives..has a good life now in China// Some 40 years later, China’s media has become interested in the status of the offspring of the members of Lin’s clique of senior PLA officers. The website of the state newswire Xinhua says that the children of “Huang Wu Li Qiu” — four senior commanders who aligned themselves with Lin as he rose to become Mao’s right-hand man during the Cultural Revolution — are all living comfortable lives and some of their own children have even become executives at multinational companies, reports Want Daily, our Chinese-language sister paper.



China to continue to patrol in Diaoyu Islands – Xinhua |– China will continue to carry out regular patrols over its territorial waters off China’s Diaoyu Islands and the South China Sea, the State Oceanic Administration said on Thursday.China will continue to oppose any infringement on the country’s sovereignty over territorial waters by Japan, Vietnam and the Philippines, said Liu Caigui, director with the administration at a national conference on maritime work.

人民日报-2013,海洋强国坚定起步(昂首迈入落实十八大精神开局之年) 海洋生产总值去年已超过5万亿元,今年将推进第一次全国海洋经济调查 Page 1 People’s Daily on building a maritime power (as much economic as anything), on occasion of national maritime conference

Chinese submersible to assume South China Sea missions – Xinhua |– China’s manned submersible, the Jiaolong, is scheduled to conduct experimental missions in the South China Sea in May and June, according to a national maritime work conference on Thursday.Chinese authorities are also considering sending the Jiaolong to survey the international seabed for polymetallic nodule ore in the northeast Pacific Ocean, it was revealed at the meeting.

China eyes more polar voyages, bases – Xinhua |– China will launch its 30th expedition to the Antarctic region, as well as its sixth Arctic expedition, this year.It will also work to build more Antarctic research bases, according to a document released at the national maritime work conference held on Thursday.

The Interview: Admiral Samuel J. Locklear – The Diplomat – PACOM Commander, Admiral Samuel J. Locklear, spoke to Sergei DeSilva-Ranasinghe on what the upgraded U.S. presence in the region will imply, including initiatives to neutralize the growing challenge of transnational threats and violent extremism; the impact of the pivot on relations with Indonesia and Indochina; and, importantly, the likely reverberations for U.S.-China relations.

China consistently against US arms sales to Taiwan|Politics| – The remarks were made after US senator James Inhofe reportedly told Taiwan’s leader that the United States will sell advanced weapons and helicopters to Taiwan.

US to urge allies SKorea, Japan to mend ties as tensions rise in Northeast Asia – The Washington Post – A high-level U.S. delegation will urge key allies Japan and South Korea to mend strained ties that have hurt security cooperation. It will also likely remind the new government in Tokyo that any disavowal of its apology for the use of sex slaves in World War II would make matters worse.

China’s Soft Power in East Asia: A Quest for Status and Influence?–NBR – This report examines China’s use of soft power as a foreign policy tool and analyzes the strategic, economic, and political implications for U.S. policy in East Asia… The practice of soft power has become an attractive policy option for China to help demonstrate its commitment to a “peaceful rise.” This has resulted in Beijing’s attempt to use an increasing array of foreign policy tools beyond material hard power in its interactions in East Asia, including development assistance, trade, and cultural exchanges. However, China’s massive push to project soft power has not directly translated into more supportive views of its quest for status and legitimacy.

Kashgar’s mystery complex is not complex, and not a mystery | Ogle Earth it looks to be just an industrial park// I was disappointed. Not with the Chinese for failing to construct a mystery complex, but with the gullible reporter, who should at the very least have gotten a second opinion before letting loose on the Internet a retired analyst with an overactive imagination and no on-the-ground knowledge of the area. I left a comment to that effect.That, of course, did not nip this meme in the bud. My RSS reader started filling up with rewrites, soon enough including from mainstream news outlets such as Salon, Australia’s Telegraph and even Sweden’s Nyheter24. The rewrite-industrial complex was going gangbusters. All that was missing was the Huffington Post version.This story thus reveals more about us than about China. It is above all a story about technology racing ahead of our ability to put it into context.



Rumor: Alibaba Acquires Online Music Service -TechInAsia– alibaba acquiring music site xiami would make recent USTR decision ironic, given xiami’s piracy problems// Rumor broke by local portal Tencent claiming that Alibaba the ecommerce behemoth has stealthy acquired Chinese online music service Xiami which also based in Hangzhou was founded in 2006 by former Alibabaers. It started as a service to exchange music through its P2P network and make money off uploading music for downloads

Alibaba CEO Jack Ma Announces Restructuring As The Chinese E-Commerce Giant Moves Farther Away From Yahoo | TechCrunch – Chinese e-commerce giant Alibaba Group is embarking on a major reorganization of its business structure that will divide the company into 25 different units, each led by a general manager, said CEO Jack Ma in a company-wide email published by Sina News (link via Google Translate, h/t 36Kr). The move is the latest in several the company has made to grab greater control over its future after an often tense partnership with Yahoo.

Interview: Apple CEO expects China to become biggest market – Xinhua |– Apple’s CEO, who is on a China visit this week and has been impressed by the significance of its secondary market, said on Thursday that new Apple products may possibly be launched in China in the future.”I would love that to happen. China is a very important marketplace for us,” said Cook in an exclusive interview with Xinhua in Beijing. “China is currently our second largest market. I believe it will become our first. I believe strongly that it will,” he said.



NBA Washouts Have China Calling Foul – Bloomberg – The Bayi Rockets, the team owned and operated by the People’s Liberation Army, employs no foreigners — only soldiers — and remains a long-time favorite of patriots and government officials. While the team dominated the league during its early years, it hasn’t won a championship since 2007: Teams with foreign players have supplanted it. Most humiliating of all, the CBA has implemented rules that particularly restrict the time that foreign players can be on the court against Bayi. However, in the eyes of many Chinese fans, the problem isn’t the foreign players, but the failure of China and its massive athletic bureaucracy to develop basketball players who can rival the international competition

China’s One-Child Policy Yields Adults Fearing Risk – Bloomberg – Using surveys of 421 men and women in Beijing and testing their skills in economic games, researchers in Australia found those born after the 1979 policy were more pessimistic, nervous, less conscientious, less competitive and more risk averse. They also found them to be 23 percent less prone to choose an occupation that entails business risk, such as becoming a stockbroker, entrepreneur or private firm manager. The study, published today in the journal Science, adds a new twist to evidence suggesting that China’s policy to limit population growth is harming its economy. Research has already tied the rule to worker shortages. Risk aversion may negatively affect the economy if it leads to fewer people starting businesses in their communities, said study author Lisa Cameron.



Chinese Firm Buys an American Solar Technology Start-Up –– On Wednesday, the chief executive of MiaSolé, one of the most promising Silicon Valley solar start-ups, appeared in Beijing for the announcement that Hanergy Holding Group of China had completed the purchase of his company and its technology for a fraction of what investors had put in. Hanergy made its money building hydroelectric dams.Hanergy’s purchase of the 100-employee MiaSolé, based in Santa Clara, Calif., follows its acquisition in September of the 400-employee thin-film solar unit of Q.Cells, an insolvent German solar company. The two deals have allowed Hanergy to acquire at low cost an array of patents developed for hundreds of millions of dollars of venture capital investments.

人民日报-走出“毒地困境”需用重典(新论) 汪 劲 – strong guest comment in today’s People’s Daily on poisoned/polluted soil..scary to think how many EPA superfund sites there are in China..article worth clicking through just for the remarkable cartoon that accompanies it//病土贻害几丈深,挖走毒瘤难断根。先污后治路不通,莫添新账留子孙。徐 简图 三 宝文

China’s carbon intensity falls over 3.5 percent in 2012: official | Reuters – China’s carbon intensity, or its emissions relative to economic output, fell more than 3.5 percent in 2012, outperforming its average annual target, China’s chief climate change official said on Thursday. China aims to cut carbon intensity by 17 percent during the 2011-2015 period, which means an annual average target of around 3.5 percent.

Drinking water safety is not a simple problem – People’s Daily Online– Beijing understands the challenges of the growing expectations gap// In recent years, food safety, air quality, drinking water quality, and other usual topics are gradually becoming publicly debated topics, which is a reflection of the progress of China’s development stages.In the past, when we only had husk flour, pickles, and industrial saccharin to eat, few people were concerned about food safety. But after the bicycle kingdom became an automobile powerhouse, with the improved economic conditions came such problems as the PM2.5 issue. This context makes it complex to solve the “post-development problems” and face the corresponding rise in public expectations.

Nestle Taps China Water Thirst as West Spurns Plastic – Bloomberg – While the tough economy and green opposition to bottles are weighing on the water business in Europe and the U.S., it’s growing fast in China where industrial and agricultural expansion have polluted supplies.Sales of bottled water in the country will climb to $16 billion by 2017, versus $9 billion in 2012 and $1 billion in 2000, according to researcher Euromonitor International. The market in western Europe will remain flat at $21 billion and North America will increase 18 percent to $26 billion over the same period, Euromonitor predicts.

Probe begins into illegal blood trade |Society |– An investigation into the sale of fake blood-donation certificates is under way after a newspaper reported it had uncovered an illegal trade exploiting the blood donation system.New Express Daily in Guangzhou, Guangdong province, reported last week that one of its reporters bought a proof of blood donation certificate for 3,000 yuan ($480) without making the donation.

“Fake medicine” allegations against China baseless, mudslinger: Ugandan experts – Xinhua |– China’s entry into Africa’s pharmaceutical industry is causing competition and discontent among industry players especially those from the West, with the latter accusing the former of shipping “fake” medication to the continent.Policy makers, pharmacists, distributors and suppliers in Uganda, however, refuted the allegations, noting that they arise from the cut-throat competition that China brings into the lucrative industry in Africa and are designed to tarnish Chinese anti-malarial medicines. Some Western media outlets have recently hatched out a multitude of much-hyped reports against Chinese medications. The volley of attacks started when British newspaper The Guardian alleged late December that one third of the fake anti-malaria drugs in Uganda and Tanzania have origins in China and India.

Flu season peak expected for China’s northern provinces – Xinhua |– The flu season that started in China’s northern provinces in December is expected to peak with infections in the next few weeks, a ministry spokesman said Thursday.Ministry of Health spokesman Deng Haihua said despite the expected peak infection levels will not reach that of previous years.One of the reasons is that no variation has occurred to the prevailing flu virus strains, the spokesman said at a regular press conference.He said a total of 360 cases of A/H1N1 flu were reported across China between Dec. 1 and Jan. 6. They included two deaths in Beijing.



Best-selling list reveals shift in taste |Books |– The best-selling lists from both online and offline bookstores reveal the major trends of 2012 that show shifts in Chinese readers’ taste.Many of this year’s cinematic blockbusters are based on novels. This has in return triggered a fever for the original fictions. Among them are Liu Zhenyun’s Back to 1942 and Chen Zhongshi’s White Deer Plain. The movie adaptations of these two novels, by acclaimed directors Feng Xiaogang and Wang Quan’an, became the center of public attention with their controversial stories.

Chinese Whiskers by Pallavi Aiyar [Asian Review of Books] – What might be most unusual about Aiyar’s book is that while adult readers will certainly enjoy the tale, it is also accessible to a young adult audience. Teens and even pre-teens who would not be ready to tackle any of the other China expat memoirs will find in Chinese Whiskers a wholesome but engaging plot, enhanced by charcoal sketches drawn by Gerolf Van de Perre. Younger readers interested in city life in contemporary China will be well-served by having Soyabean and Tofu serve as their tour guides in the hutong neighborhoods of Beijing. Chinese Whiskers: Pallavi Aiyar:– Chinese Whiskers by Pallavi Aiyar is a charming fable set against the landscape of contemporary Beijing, seen through the eyes of two cats. Soyabean is a middle class cat looked after by a grandmother who embodies traditional Chinese morality. Tofu is born to a stray cat mother in a backyard dustbin. They are brought together when they are adopted by foreigners, who live in a traditional style courtyard house in Beijing’s traditional hutong neighborhoods. Then Soyabean is offered a job as a model for a new brand of cat food while at the same time a mysterious virus is sickening people across the city. Cats are blamed for it and are being rounded up, and Soyabean and Tofu’s idyllic lives as pampered pets come to an abrupt end.

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