The Sinocism China Newsletter For 02.09.13

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

Last day of the Year of the Dragon. Happy Year of the Snake!

Today’s Links:


国务院就落实收入分配制度改革进行工作分工(全文)_资讯频道_凤凰网 – State Council assigns bureaucratic responsibility to each section of the income distribution reform guidelines

China plan on wealth gap preserves much of state firms’ cash pile | Reuters– China’s broad plan to address income inequality promises to extract higher dividends from profitable state-owned enterprises (SOEs) to finance a more generous social safety net. But the increased payouts may do little to channel wealth towards boosting social security. The Communist Party’s new leadership has promised reforms to address the country’s yawning wealth gap. The new dividend payout levels also fall short of not only international norms but payouts that minority shareholders in non-state companies already enjoy, suggesting some conflict within the government over the issue.

Asian astrologers warn of stormy Year of Snake – FRANCE 24– As they bid farewell to the Year of the Dragon, the fortune tellers warn that the “black water snake” that emerges to replace it on February 10 — the first day of the Lunar New Year — could be a venomous one that brings disaster. Previous Snake years have been marked by the September 11, 2001 terror strikes that killed nearly 3,000 people, the crushing of the 1989 Tiananmen pro-democracy protests and the Japanese attack on Pearl Harbor in 1941. The 1929 stock market plunge that heralded the Great Depression also occurred in a snake year.

人民日报-针对蛇年多种传言,专家表示 “蛇年忌红”不可信(求证·探寻喧哗背后的真相) –People’s Daily goes after some of the rumors about what to avoid in the Year of the Snake//  农历癸巳蛇年马上就到了。近来有些说法称,这个蛇年是“火蛇年”忌穿红色,是“无春年”不适合结婚等。对此,民俗文化学家和科普专家认为并无道理。专家建议,我们要用理性、科学的态度,客观清醒地对待这些说法。

How Securities Firms Got 1 Tln Yuan from Banks in 2012 – Caixin- The amount of assets managed by Chinese brokerage firms soared last year, exceeding 1.2 trillion yuan by the end of December, up from 280 billion yuan at the beginning of the year, data from the industry group Securities Association of China shows. However, most of those assets – 80 to 90 percent of the total according to some analysts’ estimates – was tied to banks and had nothing to do with the brokers’ investment ability. In a typical bank-to-securities company asset management agreement, the bank entrusts the securities firm with funds raised from wealth management products, and the securities firm uses the money to buy the bank’s notes or invest in other types of financial instruments. The arrangement allows the bank to shift assets off its balance sheet and circumvent lending restrictions. The securities firm, in return, charges the bank a fee for using its service.

Assuring Chinese Finish Their Live Lobster Sashimi – Bloomberg – Think Sinocism was first to note in English that this was going to be a big deal in the 1.25 newsletter// The Clean Your Plate Campaign was started by Chinese microbloggers in mid-January, and on Jan. 25, People’s Daily, the official mouthpiece of the Chinese Communist Party, ran the campaign on its front page, joining — if not co-opting — the effort, which aligned well with a broader party crackdown on official extravagance. Yet the Clean Your Plate Campaign is about much more than ruining state-sponsored nights out by junior military officers. Rather, it is the latest effort to explain, confront and control a food-waste problem that has plagued China since economic reforms began to lift the country’s fortunes three decades ago.

Biggest China Deal Brokered by Ma as HSBC Sold Ping An – Bloomberg – “Mr. Ma wanted a long-term investor so that Ping An’s share price doesn’t fluctuate too much,” Tse said in an interview in Hong Kong yesterday. “Ping An is a good company — we like its culture and business model. That’s why we are willing to pay a good price for it.” Ma’s role illustrates the influence exerted by Chinese executives over their investors and the importance of personal connections in closing a transaction that allowed London-based HSBC to reap a $2.6 billion profit. The deal survived a last- minute withdrawal of funding by China Development Bank Corp. and scrutiny by regulators in Beijing.

China’s great migration from ‘Hukou Hell’ – – great story by CNN’s Kristie Lu Stout// Suki Chung of Labour Action China adds that China’s latest generation of workers are more rights-aware and willing to challenge the long-held registration system. “For the first generation of migrant workers, their hometown subsidized them and their children could go to school at home. But the new generation want their family to stay in the city.” After two decades of the “Great Migration,” China’s latest generation of workers simply want to stay put. To hell with the hukou.



SEC Halts $150 Million Investment Scheme to Dupe Foreign Investors and Exploit Immigration Program; 2013-20; February 8, 2013 – The SEC alleges that Anshoo R. Sethi created A Chicago Convention Center (ACCC) and Intercontinental Regional Center Trust of Chicago (IRCTC) and fraudulently sold more than $145 million in securities and collected $11 million in administrative fees from more than 250 investors primarily from China. Sethi and his companies duped investors into believing that by purchasing interests in ACCC, they would be financing construction of the “World’s First Zero Carbon Emission Platinum LEED certified” hotel and conference center near Chicago’s O’Hare Airport. Investors were misled to believe their investments were simultaneously enhancing their prospects for U.S. citizenship through the EB-5 Immigrant Investor Pilot Program, which provides foreign investors an avenue to U.S. residency by investing in domestic projects that will create or preserve a minimum number of jobs for U.S. workers.

New Bureaucratic Diet Takes Bite Out of China’s Restaurants, Hotels – China Real Time Report – WSJ – One five-star hotel in Beijing saw roughly 10 million yuan ($1.6 million) in reservations cancelled, according to the report. Catering businesses in the northeast city of Tianjin have seen business drop by 30% this year compared to the same period last year, the report added, though it didn’t specify a time frame for the period.

白酒年关难过_杂志频道_财新网 -Caixin on problems for Baijiu firms, not just from frugality and anti-corruption campaigns// 党政军反腐禁酒,白酒行业市场格局剧变,经销商首当其冲



Rich, Poor and Chinese—Does Anyone Trust Beijing to Bust the Corrupt? | ChinaFile –interesting conversation

揭秘中国政坛领导人排名诸多依据_多维新闻网 – interesting look by Duowei at protocol rank for Chinese leaders// “和”字隔开现任和退休领导人 新老党和国家领导人集中出现的场合,往往是一些纪念大会、仪式性场合,如党的十一届三中全会召开30周年纪念大会、中共十八大开幕式等。在任领导人排名在先,之后才是原任(政治局常委除外)领导人的名单。在新闻报道中,关键词在于一个“和”字——名单中,“和”字之前是现任领导人,“和”之后是原任领导人。

Chinese Province Backtracks on Work Camp Suspension Pledge – China Real Time Report – WSJ – In a sign of the sensitivity around reforms under China’s new leadership, officials in southwestern Yunnan province appeared to backtrack on a promise from earlier this week to immediately suspend gulag-like re-education through labor programs there, saying instead on Friday that they will “strictly control” use of the much-despised system.

Zhejiang official arrested after being blackmailed over fake sex photo | South China Morning Post– Just as people started asking why he would pay for a fake sex photo, authorities launched an investigation over allegations that Xuan was sleeping with large numbers of female teachers. This resulted in Xuan’s expulsion from his position in December. Now Xuan has been arrested and is staying in a local detention centre, the report said. “It seems that sending sex photos to officials is a fast way to get rich,” commented a Chinese netizen on Sina Weibo, China’s twitter-like service.

盘点“到龄转任”省级党政高官_政经频道_财新网 – 按中国政界惯例,正省部级65岁退休,副省部级届满60岁退休、届满58岁时不再提名担任副省级职务。不过,“十八大”前后,各省级党委政府换届中,仍有例外情形,财新记者据公开资料,整理如下



China Denies Directing Radar at Japanese Military –– For all China’s vehemence, the statement by its Defense Ministry suggested that senior officials in Beijing wanted to avoid an escalating quarrel, said Denny Roy, a senior fellow at the East-West Center in Honolulu who researches security issues. “I think it’s a positive development that the Chinese would deny doing this, as opposed to saying, ‘Yes we did it, and we’ll do it again,’ ” Mr. Roy said. “For the Chinese to not want to be portrayed as an aggressor, I think, is a good sign.”

Rebuilding a Relationship – Caixin – Japan’s new envoy to Beijing, Masato Kitera, says his country will never escalate tensions with China, and points out the two countries have a range of issues they cooperate on

China, Japan engage in new invective over disputed isles | Reuters– China’s Defence Ministry rejected Japan’s complaint about the radar, its first comment on the January 30 incident. It said Japan’s intrusive tracking of Chinese vessels was the “root cause” of the renewed tension. A Japanese official dismissed the Chinese explanation for incident saying China’s actions could be dangerous in the waters around the islets, known as Diaoyu in China and Senkaku in Japan, believed to be rich in oil and gas.

中国保岛战略势在必行 不排除先发制人_多维新闻网 –Duowei keeps hinting at worrisome unilateral escalation by China in the Diaoyu/Senkakus Islands dispute//  中日钓鱼岛争端升级已持续多时,眼下并没有明显降温的迹象,局势依旧紧张而复杂。各种因素表明,习近平和安倍晋三在钓岛问题上都更倾向于强硬的姿态,间歇性的温和音调也都是为了更好地落实酝酿已久的强硬举措。面对异常变动的钓岛局势,有观察人士认为,日本只是在变相地实施拖延战术,吃定中国不敢打仗。安倍叫嚣战火的言语刺激,更多是为了博得美国的同情并为完成修宪的日本梦制造理由,掩人耳目。就目前形势来看,中国的既定战略已日渐浮出水面,在保持定力的同时,中国并不排除先发制人的主动式出击。对此美国表示格外担忧,如果中国出兵钓岛,美国袖手旁观的可能性或将更大。

Good news: World War I is over and will not happen again | Stephen M. Walt– But the key point is that the European powers did not go to war in 1914 because a minor incident suddenly and uncontrollably escalated into a hegemonic war. The real lesson of 1914 for the present day, therefore, is to ask whether any Asian powers are interested in deliberately launching a preventive war intended to establish regional hegemony, as Germany sought to do a century ago. The good news is that this seems most unlikely.//but as Walt notes the risk of one side thinking it can win a limited air or naval conflict is not insignificant…and that is certainly what Duowei has hinted at repeatedly over the last few weeks

US vows support on sea code | The Brunei Times– THE head of US Pacific Command said the United States pledges its support for Brunei to conclude a legally binding code of conduct in the South China Sea, while also urging closer relations between ASEAN and China. “The US role is to be supportive of ASEAN and be supportive of Brunei and its leadership role (as ASEAN chair),” Admiral Samuel Locklear told reporters in the capital yesterday.

U.S. Energy Information Administration (EIA) – EIA estimates the South China Sea contains approximately 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proved and probable reserves. Conventional hydrocarbons mostly reside in undisputed territory.

China’s one-child policy creates wimpy military recruits, deserters – AJW by The Asahi Shimbun– According to a source who was involved in the joint investigation by the military and police, the four men smuggled a tablet computer to their base quarters and became heavily involved in an online gambling site. They were unable to pay off their losses with their monthly salaries of 2,000 yuan (about 30,000 yen, or $323) and began piling up debt. Their gambling activities came to the attention of their superior officer only a few days before the incident, and they were severely chastised. According to the source, the lone survivor who was taken into custody said, “We wanted to take revenge on our superior officer.” He also revealed that the group had planned to rob a bank. “The incident revealed some serious problems, including a low sense of morale among military personnel and the lax oversight structure,” said the source.

Swaggering Chinese military no match for common folk – AJW by The Asahi Shimbun– The uniform of the People’s Liberation Army automatically accords its members elite status. But all-too-often, this sense of privilege goes to the heads of those who wear it. In supposedly egalitarian China, incidents of PLA members flaunting their power, and expecting common folk to kowtow in reverence, are increasingly making waves. Public anger over arrogant behavior by those in uniform has caused alarm bells to ring in the military hierarchy.

China’s Hydro-Hegemony –– ASIA is the world’s most water-stressed continent, a situation compounded by China’s hydro-supremacy in the region. Beijing’s recent decision to build a slew of giant new dams on rivers flowing to other countries is thus set to roil riparian relations. China — which already boasts more large dams than the rest of the world put together and has unveiled a mammoth $635-billion fresh investment in water infrastructure over the next decade — has emerged as the key obstacle to building institutionalized collaboration on shared water resources in Asia.

Thang Dinh Tran loves maps and Vietnam. That may put him in the eye of a storm. – – hope he has good security and fire insurance// His passion for all things Vietnamese has combined with his passion for old maps, placing him at the center of a territorial dispute between Vietnam and China.

North Korea: The new capitalists | The Economist – optimistic Economist cover this week// Even as another nuclear provocation looms, hope glimmers for the world’s most oppressed people



500 Startups Is Setting Up Shop In China, Adding Beijing-Based Venture Partner Rui Ma | TechCrunch – great hire by Dave McClure// 500 Startups is already focused heavily on investing overseas, with partners looking at startups in markets like Mexico, Brazil, India, and Southeast Asia. Now you can add China to the list, as the firm just hired a venture partner to focus on that region. Rui Ma will be joining 500 Startups as its first venture partner in Beijing, where she will be investing and sourcing deal flow in China



Airpocalypse Now: China’s Tipping Point? | The Green Leap Forward 绿跃进 – In this guest post, Alex Wang acknowledges that the  current sharp public reaction to China’s deteriorating air quality bodes well for a potential strengthening in policy efforts to protect the environment, but observes that China’s environmental tipping point occurred at least seven years ago.

China sets timetable for cleaner fuel standards | Reuters – China’s cabinet has issued a timetable for oil companies to deliver cleaner fuel nationwide beginning this year, the Xinhua news agency reported, but the new standards won’t become mandatory for four years despite rising public anger over choking air pollution. Thick smog has blanketed many Chinese cities in recent weeks and auto emissions are among the major contributors to the pollution.



Retailers prepare for holiday shoppers from China|Across Americas| – Relaxed visa rules, more flights are main reasons to influx of consumers US merchants are ready with special products, snake-themed displays and Mandarin-speaking staff to greet the shopping sprees of Chinese travelers celebrating the Chinese New Year during an otherwise slow winter for US tourism. The Chinese Lunar New Year, or Spring Festival, begins on Feb 10 and can stretch into two weeks when combined with the Lantern Festival, which begins Feb 24.

Chinese rush overseas for holiday|Society| – Liu Jing has decided not to go home to see her family for Spring Festival, or Chinese New Year, this year. Instead, she will celebrate the festival in Ho Chi Minh City, Vietnam, thousands of miles from her hometown. “I am going to spend Spring Festival overseas to seek inner peace,” said Liu, 24, who just resigned from her job. “I’ll have New Year’s Eve dinner with other backpackers and send my greetings home via the Internet.”

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