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The Wall Street Journal has done a great service by scanning the Chinese and English versions of the Government Work Report, the Ministry of Finance Budget Report and and the Draft Plan for National Economic and Social Development and putting them online in a text-searchable format.

Reuters agrees that the new real estate repression policies announced last Friday may be more bark than bite:

“The market always over-reacts when new rules are announced because of uncertainties and misinterpretation,” He Qi, vice chairman of the China Property Society in Beijing, told Reuters, noting Beijing was handing responsibility for checking house inflation to provincial governments which would, in turn, oversee the cities under their jurisdiction.

“That means policies will be quite different in cities with (housing) over-supply and those with short supply,” he added.

Real estate and credit experts predicted the measures – which also include higher down payments on homes and increased mortgage rates – would do little to harm the homebuilding industry or dampen enthusiasm among those first-time buyers Beijing is keen to encourage.

“We don’t see the new policy will have a particularly huge impact on the industry,” Standard & Poor’s credit analyst Bei Fu told Reuters. “It targets speculators, but the market recovery since last year is driven by self-user demand.”

There is near consensus that one of the most important economic and social reforms China needs to implement is the abolition of the household registration (hukou) system. In his report to the NPC Tuesday Premier Wen Jiaobao called for “hukou” reform to be sped up:

To advance urbanization, the government should register eligible rural workers as permanent urban residents in an orderly manner, and expand the coverage of basic public services in urban areas to migrant workers and other permanent residents, he said.

In his final Government Work Report as premier, Wen said he made his suggestions “based on an understanding of the work of the past 10 years, especially of the past five years” as part of the country’s efforts to promote integrated urban and rural development.

Wen also advised the new government to keep megacities and large cities at an appropriate scale to drive development of surrounding areas and strengthen the ability of small- and medium-sized cities to develop industries, provide public services and increase employment.

Money, resources and bias are some of the obstacles to changing the hukou system. In China Looks to Clear Obstacles for Migrants The Wall Street Journal details the cost:

A big reason that change has come slowly is the cost. The State Council’s Development Research Center, a government think tank, estimates that the price tag for turning one rural migrant into an urban citizen is about 80,000 yuan ($13,000). That means the costs of providing education, health care and pensions to even 10% of China’s 200 million-plus migrant workers is about 1.6 trillion yuan, ($260 billion) equivalent to about 3% of 2012 GDP. With a substantial chunk of that going to pay for pensions, the up-front costs would be lower.

Rural children are often victims of the the hukou system, either by being left behind in the villages while their parents go to work in the cities or by joining their parents but only being able to attend expensive, lesser schools. Today The South China Morning Post looks at migrant families in Beijing forced to educate their children at unlicensed schools:

The couple’s inability to enrol their son in a public school is a complaint shared by countless migrant families in Beijing. Adding to their confusion and frustration is that the central government has said local governments are responsible for providing adequate schooling to children from migrant families – meaning the Beijing government is failing to comply.

As tens of millions of rural families seek jobs and new lives in cities, in an unprecedented urbanisation drive on the mainland, they are often torn between whether to bring their children along and incur the added expense of schooling, or leave the children behind without proper parental care.

Call me cynical, but even with hukou reform I expect rural residents to continue to be seen as second class citizens for the foreseeable future. I also expect that any hukou reform will not include freeing up access to tier one cities like Beijing and Shanghai. I wrote about this in 2011 in Are You Willing To Send Your Child To The Same School As The Children Of Vegetable And Rice Sellers?:

The title of this post comes from a 21st Century Business Herald article (小升初”之战 都是“拼爹”的游戏) that also looks at the problems with Beijing’s public education system. Ms. Wang, who is doing everything in her power to enroll her child in a top school, tells the reporter that one of the reasons she is pushing is so hard is she fears her child attending a school with bad students and migrant worker’s kids:

“万一把你的孩子给派位到一所薄弱校，学生天天抽烟、旷课，好多都是外地孩子，你愿意自己的孩子跟卖菜、卖大米的孩子上同一所学校吗？”王女士有点自己的“歧视”。What if you send your child to a weak school, the students smoke every day, skip class, a lot of them are migrant workers’ kids. Are you willing to send your child to the same school as the children of vegetable and rice sellers?

Discrimination against migrants is official policy, as evidenced China’s hukou regime. That prejudice is also common to many urban dwellers.

As with the rest of China, Beijing has too many people and too few resources. We have already seen Beijing limit purchases of cars and homes, and it is inconceivable that Beijing will reform the hukou system and allow anyone who applies to become an official Beijing resident. As I wrote earlier this year, it seems Beijing’s motto is becoming less “Beijing Welcomes You” and more “Beijing for Beijingers.”

This kind of mainstream discrimination is also relevant to the “China Fantasy” some foreign observers seem to hold about the eventual “democratization” of China. Beijingers, and probably most urban dwellers in China, are highly unlikely to ever allow rural Chinese to have equal status with them.

I hope I am wrong.

A couple of days ago I asked if we should pay attention to the difference between “城市化” and “城镇化”, terms that some have used as interchangeable for “urbanization”. The question arose after hearing a Chinese economist flag the potential for misunderstanding and claim that Li Keqiang historically may have supported “城镇化”. The distinction may matter as so much of China’s potential future growth appears dependent on urbanization.

Professor Jeremy Wallace of Ohio State has helpfully weighed in with the post On Chinese urbanization – 城市化 vs. 城镇化:

What is the difference between these two terms? Urbanization of cities (城市化) implies growth of China’s large cities, particularly the famous megacities, Beijing, Shanghai, Guangzhou…. Urbanization of towns (城镇化) implies growth of the small and medium sized cities that proliferate throughout the Chinese coast and interior. For much of the past 30 years, the regime has focused on constraining the growth of large cities while pushing for urbanization in the countryside or small cities…

Li Keqiang very well may move the regime away from the pro-small city policies that the regime has been pushing for the decades of the reform era. It is possible that other prerogatives compel such a decision. Certainly, on environmental terms, there exists a possibility of efficient land use in large cities compared to many smaller ones (even if Beijing viewed from space increasingly looks like an amoeba determined to spread ever-outward). The decision of which path to take may be a more consequential one that it appears.

Further enlightenment is always welcome.

Today’s Links:

THE ESSENTIAL EIGHT

China Leader, Wen, Is Regretful but Defensive – NYTimes.com BEIJING — Prime Minister Wen Jiabao of China, well known for baring his emotions in public, has displayed a blend of defeatism and defensiveness as he winds down his decade in office. During a visit last month to a Muslim neighborhood here, Mr. Wen lamented that he “fell short in some tasks” to improve people’s livelihoods. “In my heart I feel guilty and constantly blame myself,” he said.

Google controls too much of China’s smartphone sector: ministry | Reuters surprised it has taken them this long…android is google’s revenge, powering hundreds of millions of affordable smart phones that are empowering chinese at almost every level and dramatically increasing the operators’ and government’s censorship load// The white paper, authored by the research arm of China’s Ministry of Industry and Information Technology, also said China had the ability to create its own mobile operating system. (here) “Our country’s mobile operating system research and development is too dependent on Android,” the paper, posted online on Friday but carried by local media on Tuesday, said. “While the Android system is open source, the core technology and technology roadmap is strictly controlled by Google.”//Android is Google

How a Request from SASAC Fell on the Deaf Ears of Property Developers – recently spent time with an exec for a central SOE who is in charge of their beijing real estate business…he was joking that they are now a real estate company, not the leader in XYZ industry that their name would suggest…easy access to capital, and actually make money on their projects, he oversaw one of beijing most successful mall developments. told me they had just paid 25k/rmb/m for a plot of land between east 4 and 5th ring roads, will need to sell the apartments at 50k/m to make a reasonable profit…banks and local governments like the SOE real estate arms as they buy a lot of land at high prices, filling local coffers and helping banks avoid write downs// In early 2010 the central government enacted policies to cool the real estate market. While the curbs have, to some extent, had their intended effect, government-controlled companies that should be busy with other business have prospered in property. In January, eight commercial plots were sold in Beijing, and the buyers were either central government-controlled companies or state-owned enterprises (SOEs), data from Yahao Real Estate Selling & Consulting Solution Agency shows. Last year 37 residential plots were sold in the capital, and central government-controlled firms and SOEs bought 24…In March 2010, SASAC sent a notice asking 78 central government-controlled companies whose main business was not real estate to exit the field as they completed current projects. They were also asked not to buy more land.

More local governments borrowing this year |Economy |chinadaily.com.cn On the local government level, there will be a 350 billion yuan shortfall in expenditures compared to revenue, which will be made up by bonds issued by the Ministry of Finance on behalf of local governments. Bond-issuing this year will be increased by 100 billion yuan from last year’s 250 billion yuan, adding pressure to the already huge local debt that stood at an estimated 12 trillion yuan at the end of 2012. “Local government plays a major role in undertaking the mission to further China’s urbanization, and the financing needs of projects such as affordable housing must be guaranteed,” Zhao said. In addition, he said, it will be safer to raise money via bond issuing by the Finance Ministry than to allow more fund-raising via local government financing vehicles and private equity funds, which will be even harder to manage.

全国企业应收账款规模达20万亿 商务部预警风险 新华社——经济参考网 Chinese companies have 20 Trillion RMB of receivables according to new report// 5日，由中国服务贸易协会和商务部研究院合办的“首届中国商业保理行业峰会”发布了一份名为《中国商业保理行业研究报告2012》的报告。报告指出，应收账款规模持续上升风险加大，据估计全国企业应收账款规模在20万亿元以上。此外，商务部研究院对非金融类上市公司的财务状况监测结果表明，2012年我国上市公司财务风险已经为近十年来最大。

China’s Tencent Aims App at U.S. Market – WSJ.com The well-funded maker of one of China’s most popular mobile apps is training its sights on a tough new market: the U.S. Tencent Holdings Ltd. 0700.HK +0.44% Chief Executive Pony Ma said Tuesday that the company is speeding up its effort to introduce its WeChat to developed countries, including the addition of a team dedicated to the app in the U.S.

Introducing The Atlantic’s China Channel – Matt Schiavenza – The Atlantic more quality content about china, more need for a service like Sinocism that “hacks the news” for you to save you time and help you discover what is important?//  Nobody – not even the best-credentialed experts – can tell you the answer to this last question. But at The Atlantic, we want to find out. And that’s why we’re launching a channel devoted exclusively to China: a closer look at a nation whose emergence is likely to be the most significant geopolitical event of this century. The China Channel will feature regular analysis and commentary from a wide range of correspondents, freelance contributors, and photographers based both inside and outside the country. We will also bring you regular content from partners like ChinaFile, a new site featuring some of the world’s most prominent observers on China, and Tea Leaf Nation, another new site profiling contemporary China through the lens of social media. We will also continue to have regular posts and updates from Atlantic national correspondent and China specialist James Fallows, whose books and articles have helped shape our perception of what’s happening in the country.

How did SARS change China? – China Media Project Through May and June 2003 there was a sense (and a hope) that China’s leadership was heading in a new direction, toward greater openness and transparency. There was even talk of a “media spring” in China as a new generation of commercial media hit hard on SARS and other stories, like the beating death of young migrant Sun Zhigang. Those hoping for bigger and bolder political change in the wake of the SARS epidemic were setting themselves up for disappointment. Once the crisis had passed, Party leaders reasserted control. Media that had been bolder in their reporting of SARS and other stories were disciplined that summer. But how did SARS change China? Has progress been made on issues like crisis preparedness?

 

BUSINESS AND ECONOMY

Second-hand house prices in China rising: report – Xinhua | English.news.cn Last month, second-hand house prices in Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu and Tianjin all saw month-on-month increases of over 1 percent, according to the report conducted by Centaline China, a subsidiary of the Hong Kong-based real estate agency Centaline Group. As of February, second-hand house prices in the six major cities had been rising for 11 consecutive months, it said. Beijing saw the largest month-on-month increase of 3.04 percent, as well as a year-on-year rise of 22.19 percent.

China’s yuan hits headwinds in bid to be global currency | ReutersIn particular, executives say, they are not convinced using yuan will lower the cost of doing business with suppliers and customers in China. Holding yuan will remain problematic as long as China controls the flow of money in and out of its economy, they say. And executives and economists alike are sceptical about just how eager China is to open up and expose itself to the vagaries of international capital flows.

More Trouble for the Big Four in China: Pushing Prudent Analysis or Propaganda? | China Private Equity Similar doubts can be raised about the quality, credibility and soundness of the judgments the accountants provide in assessing China’s private equity industry. Even as the PE market began to slide into serious trouble last year, the accountants kept talking up the industry. In particular, it’s worth reading the two big and well-publicized reports on China private equity produced by Ernst & Young  and PWC. Both can be downloaded by clicking here. E&Y Report. PWC Report. Both of these documents were published in late December 2012. All IPO activity for Chinese companies had come to an abrupt halt months earlier, and along with this, China’s PE firms basically went into hibernation, closing off almost all new investment in China. The situation has, if anything, worsened so far in 2013. And yet, to read these reports, you’d probably conclude everything was overall pretty rosy.

十年来政府工作报告对房地产问题的表述回顾_特色频道_财新网 Caixin looks at what the last 10 NPC work reports have said about real estate

CSRC Chairman Indicates Changes in Loan-to-Deposit Ratio Rules-Caijing Economists and lenders are lobbying the regulator to make a change on the rules at a time when China is trying to align new liquidity rules with practices recommended by the Basel Committee on Banking Supervision. Responding to concerns over rising LDRs in some banks, Mr. Shang said only a small percentage of banks have reported LDRs nearing the 75 percent limit, “largely smaller banks with unstable sources of deposits.” Local media said the ratio in Bank of Communications, Bank of China and China Merchants Banks was close to the “red line” ending January. The average LDR of Chinese commercial banks was 65.3 percent in 2012, up 0.5 percent from a year ago.

China Vanke to issue its first dollar bond – FT.com As a “large nationwide player”, Vanke is likely to be less affected than some of its rivals by the property tax announcement “given their broad project mix . . . geographical coverage and high margins”, said Fitch. The sell-off of Chinese property stocks abated on Tuesday after government officials said they had to work out the details of how the new capital gains tax would be implemented. Vanke gained 0.5 per cent.

Analysis: Alibaba, China’s King of E-Commerce, Pushes Deeper into Financial Services Industry — [contextChina] / 太平洋中国通As of September 2012, a month before news of Amazon Lending emerged, Alibaba, China’s most successful e-commerce company, had supported more than 15,000 of its merchants with an average of $7,400 distributed per loan. Unlike Amazon, though, Alibaba’s lending is not restricted simply to its merchants. The company has also teamed up with major financial institutions, such as the China Construction Bank, to provide an array of loans to small and medium-sized enterprises (SMEs) more generally. This operation, run through the Alibaba Group’s Alibaba Financial Company, is driven not simply by the e-commerce giant’s desire to increase transactions on its web platform, but rather by a general niche in the Chinese micro-finance market. As Alibaba Chairman Jack Ma noted at the company’s annual summit, Chinese SMEs are hard-pressed to obtain credit through traditional channels. Simply put, Alibaba hopes to plug this gap.

China’s 2013 targets, and what they (probably) mean | FT Alphaville Steep curtailment of money growth: the M2 growth target is 13 per cent, compared to 14 per cent last year. In fact this is more dramatic than it seems, says Nomura’s Zhang. For one thing it’s the lowest target rate since 2002. And furthermore, reaching the target would require a big step back from what’s been done so far this year: M2 growth in January was 15.9%, much higher than the 13% target.

China’s growth: A bountiful half decade | beyondbrics Like any politician looking to cast his legacy in the most flattering light, Wen barely mentioned the downsides to the economic success story: a sharp rise in local government debt, a frothy property market and a stalled transition from an investment-led growth model to a consumption-led model could yet cause big trouble. But it is hard to begrudge Wen his celebration of China’s economic achievements. By the standards of any country in any era, it was a superlative half decade. To have occurred against the backdrop of global financial turmoil, China’s record of growth was all the more remarkable.

Deloitte loses a round | China Accounting Blog | Paul Gillis Eventually, I expect the judge will rule that Deloitte must turn over the Longtop working papers to the SEC. Deloitte will certainly refuse citing Chinese laws that criminalize doing so. The judge will likely find Deloitte in contempt of court and punish them, possibly fining the firm, ordering the arrest of its partners should they show up at the San Francisco airport, or banning them from practice before the SEC. The latter could cost Deloitte China all of its U.S. listed clients. But I expect Deloitte appeals and the issue is tied up in courts forever.

奢侈品的意外“淡季” – 经济观察网 － 专业财经新闻网站 EEO looks at the winter for luxury goods in China// 2月27日，位于北京市朝阳区的某奢侈品销售公司收到一笔订单。订购人显示是某烟草公司人事科，但收货地址却填写的是北京市一处家庭地址。看到订单，这家公司的CEO边讲述边笑了笑，“看，政府地址的订单再没出现过。”春节后，这家公司的集团采购业务基本消失，消失最彻底的订单是来自各个企事业单位。 往年2月前后，奢侈品的生意却异常旺盛。名为世界奢侈品协会的机构在2月26日发布的“2013中国奢侈品市场预测”显示，中国人今年春节奢侈品的购买量达到5年以来的最低点。

 

POLITICS AND LAW

汪洋：改革就是拿刀割自己的肉 要破解利益格局-财经网 Wang Yang says reform is like cutting off one’s own flesh, China must break through the vested interests…Rumor is that Wang Yang will get a vice premier job with responsibility for reform…//　据人民网消息，中共中央政治局委员汪洋3月5日参加十二届全国人大一次会议安徽代表团全体会议时表示， 如果说30年前改革解决的是意识形态问题，那么现在就是利益问题，改革实际上就是拿刀割自己的肉，需要全体下决心，必须要坚定信心。

Audis Trump Patriotism for China’s Elite as Local Brands Falter – Bloomberg Led by China FAW Group Corp. (000800), maker of the Chinese Red Flag brand of luxury vehicles, local automakers are pushing to win government sales to burnish their brands. “If the top leaders started to switch to Chinese brand cars, junior officials and bosses of state-owned companies would follow overnight and that would be a great push for state-owned automakers,” said Chi Yifeng, head of the Beijing Asian Games Village Automobile Exchange, a vehicle dealer in the capital. “People have been waiting for detailed policies of promoting domestic brands for the government fleet.”

China stresses farmers’ property rights in land transfers – Xinhua | English.news.cn China included farmers’ property rights into its government report for the first time Tuesday, suggesting enhanced protection of their rights amid the country’s frequent land transfers. The report, delivered to the ongoing annual session of the national legislature, said “to guarantee farmers’ property rights and interests” is the main purpose of the country’s rural land system, which is “central to China’s rural stability and long-term development.” Experts believe the report suggests the Chinese government will work harder to protect farmers against illegal land grabs and facilitate land transfers to boost rural productivity.

Seizing homes, seizing lives: The anatomy of a Shanghai land grab | Marketplace.org So far, the Xuhui government hasn’t tested Chen’s threat. Instead officials have allowed Chen and his neighbors to stay here, living in their partially demolished homes. Officials paid off the developer, losing money for the district, and then re-designated Maggie Lane as land for public use, yet a wall remains around it.A few weeks ago, the district sent a crew to install new gas lines for Chen and his neighbors. He doesn’t know what to make of this, but he’s optimistic that change is afoot, China’s new leadership may help people like him, and maybe someday his house will again feel like home.

10年最短报告 391字谈矛盾_时政_新京报网 代表委员热议政府工作报告：篇幅更精炼，内容更实在，重点突出了民生. 15000字的报告，改善和保障民生方面工作用了2000多字，篇幅最多，笔墨最重，回应了所有社会上关注的热点，包括住房、教育、医疗、社保等等。

“只隔一座山，为何差距这么大？” 深度报道——经济参考网 京、冀交界虽只有一山之遥，但由于政策、投资差别等方面原因，延庆、昌平的北京山区百姓已经开始享受政策红利，专心于植树造林、看林护林，并具备了完善的自我造血功能，良性循环凸显。而赤城、怀来的河北省山区百姓，依然饱受“经济发展与生态保护”矛盾的困扰，可谓“一山隔开两重天”。拿艾河滩村来说，全村现有371人，人均耕地1.7亩，全村山场面积约25000亩，去年人均收入还不到2000元。而与艾河滩村一山之隔的北京市延庆县张山营镇西大庄科村，在2011年村民年人均收入就达到了16000多元。

雷锋生前战友张峻去世 倒在宣讲雷锋精神讲台上_教育频道_新华网 colleague, photographer of lei feng collapses and dies on dais at symposium celebrating lei feng// 3月5日，张峻（左）在座谈会上发言。这是他生前留下的最后影像。当日下午，雷锋事迹见证人、曾为雷锋拍摄200多张照片的沈阳军区原工程兵政治部宣传助理员张峻，在沈阳军区学雷锋座谈会上发言时，突发心脏病，经抢救无效，不幸去世。新华社发（秦富梁 摄）

The Difficulty of Figuring Out Who Owns What in China – Yueran Zhang – The Atlantic In some ways, China is falling into the “Tacitus Trap”: when a government loses credibility, it will be perceived as dissimulating whether or not it is telling the truth. Nefarious motives will be read into its every move. These conditions in turn act as a deterrent for any progressive interaction between state and society, and create a dilemma that may cast a shadow over China’s public sphere for some time to come.

Govt officials wary of losing trust |Politics |chinadaily.com.cn September 2012 Publius Gornelius Tacitus (56-117 A.D.), a historian and a senator of the Roman Empire, said neither good nor bad policies would please the governed if the government is unwelcome, which was later called “Tacitus Trap” in political studies. “Tacitus Trap” warns any leaders in power that when a government loses credibility, whether it tells the truth or a lie, to do good or bad, will be considered a lie, or to do bad. There was a similar political adage in ancient China when Confucius (551-479 B.C.) told his followers that the people’s trust is the top priority among all considerations of governance.

Groundhog Day for China’s Xi–CNN Richard McGregor talks about the challenges for China’s new President Xi Jinping as the NPC gets underway.

 

FOREIGN AND DEFENSE AFFAIRS

North Korea Abandons Armistice Again–Bruce Klingner–Heritage foundation On March 5, Pyongyang threatened to nullify the 1953 armistice agreement ending the Korean War, raising already heightened tensions on the Korean Peninsula. The declaration comes amidst large-scale military exercises by North Korea and by U.S. and South Korean forces as well as rumors of impending rocket and nuclear tests. The regime’s threats are consistent with previous North Korean behavior and are meant to intimidate the United Nations Security Council as it deliberates on additional sanctions against Pyongyang for its February nuclear test.

China Backs UN Sanctions Targeting North Korean Diplomats – Bloomberg A vote to adopt the measure is expected this week. Russia, which like China has veto-power in the council, also supports the sanctions, according to the RIA news agency, which cited citing Russia’s UN Ambassador Vitaly Churkin. The new measures target “illicit activity” by North Korean diplomats and bulk transfers of cash by the North Korean regime. They’re aimed at halting the North’s imports of technology for its weapons programs as well as its ability to raise cash by selling its nuclear, missile and military technology to other countries.

Crab Trade Ties North Korea to China – NYTimes.com By encouraging trade with North Korea, China aims to prevent North Korea’s government from collapsing, an outcome that could result in a Korean Peninsula allied to the United States. And business with North Korea serves a domestic goal: it helps employment and incomes in needy Jilin Province, where an estimated two million ethnic Koreans live. That is where the crabs come in. Scooped from 3,000-foot-deep waters by trawlers crewed by North Korea workers, they are first taken to the North Korean port of Rason, a special enterprise zone serving foreign investors and largely financed by China. The crabs are trucked in ice to the Chinese border town of Quanhe, and then brought to the market in Yanji, or flown to cities across China as a delicacy for the affluent.

China Is Not Our Banker–Heritage Foundation–Derek Scissors There are lots of things to say about this, but one stands out: The loose talk about China “owning” America never made any sense and perhaps now can finally end. China’s share of all American securities (corporate, municipal, etc.) is only about 2 percent, since the value of all U.S. securities is in the neighborhood of $70 trillion. China’s direct holdings of U.S. securities fell $130 billion between June 2011 and June 2012. Did anyone notice?

Hawkish General Liu Yuan sounds note of caution on Diaoyus row | South China Morning Post A senior PLA general and “princeling”, usually seen as a hawk, struck a moderate tone as he urged fellow countrymen to heed the words of late paramount leader Deng Xiaoping and settle conflicts with Japan peacefully. General Liu Yuan, political commissar of the General Logistics Department of the People’s Liberation Army, sounded a note of caution amid increasingly heated discussion over the Diayou Islands, the uninhabited islets in the East China Sea claimed by Beijing but administered by Tokyo.

China, the Abnormal Great Power – Carnegie Endowment for International Peace–Yukon Huang and Beijing will ask “how much are you willing to compromise and cooperate? We did not agree to all the rules in the global system, we want and believe we have the right to change some of them”…// A reactive China is helping neither itself nor others. The United States and other major powers should take pains to stress the benefits of more active participation in shaping the international agenda as China enters a riskier period of economic transition. Harsh rhetoric and actions that are perceived as attempts to contain China’s development will not be helpful, but reaching out and constructing sensible solutions would be wise policy for Washington. The key is convincing Beijing that its interests are best served by forging solutions now, showing that compromise and cooperation will help China in the long run, and reassuring Beijing that its concerns will be heard.

Cyber Deterrence against China? The only route left is an Open Source Approach – Global Guerrillas So, how do you deter this activity? You don’t do it by building a cyberwarfare capability.  Something big and expensive and geared towards fighting a war with China that will never happen. NOTE:  Why won’t China launch a cyber Pearl Harbor.  Besides the fact we are a major customer of theirs, it’s because we have nukes and they have nukes.  A big attack on the US would only cause minor damage in comparison to the nuclear war that would follow. So, how do you deter cyber espionage, crime, etc.? Counter grief.   Make it painful to be permissive.//naming and shaming won’t work. if Obama administration’s recent public response is the only response then it will turn out to be an ineffective pr show. but the white house has to know that, so…

The Brutality Cascade – NYTimes.com David Brooks–Americans and Europeans tend to think it is self-defeating to engage in cyberattacks on private companies in a foreign country. You may learn something, but you destroy the trust that lubricates free exchange. Pretty soon your trade dries up because nobody wants to do business with a pirate. Investors go off in search of more transparent partners. But China’s cybermercantilists regard deceit as a natural tool of warfare. Cyberattacks make perfect sense. Your competitors have worked hard to acquire intellectual property. Your system is more closed so innovation is not your competitive advantage. It is quicker and cheaper to steal. They will hate you for it, but who cares? They were going to hate you anyway. C’est la guerre.

China Joining U.S. Shale Renaissance With $40 Billion – Bloomberg China National Petroleum Corp., the country’s biggest oil company, is seeking its first stake in the U.S. as Chinese explorers with $40 billion of cash try to join an energy renaissance unlocking billions of barrels of crude. “We are currently studying” investing in U.S. oil, Jiang Jiemin, chairman of the state-run company, said yesterday at the National People’s Congress meetings in Beijing. Domestic rival China Petrochemical Corp. last month agreed to buy stakes in an Oklahoma field from Chesapeake Energy Corp. (CHK) for $1.02 billion.

Ex-U.S. Guard Sentenced to 9 Years in China Spying Case – Bloomberg A former civilian guard at a U.S. consulate compound being built in China was sentenced to nine years in prison after admitting that he tried to sell classified photographs and information about the building to the Chinese. Bryan Underwood, 32, learned of his punishment today in federal court in Washington after pleading guilty in August to attempting to communicate national defense information to China. He planned to sell the information and access to the compound under construction in the southern city of Guangzhou for as much as $5 million, according to the U.S.

傅莹_百度百科 fu ying is mongolian, born in tongliao inner mongolia, uni in beijng

发言人穿上长裙子 – 西蒙周 – 名家博客 – 博客 – 财经网 nice commentary on Fu Ying// 傅莹是继王海容之后，新中国第二位副部级的女外交官。这位一头银发的副外长，面相慈和，气质不俗，仪态优雅，擅长沟通。蒙古族出生的她，今年60岁，她在外交系统书写了一系列记录：最年轻的女大使，第一位少数民族女大使，第一位驻大国女大使，第一位为驻在国媒体撰文进行沟通的大使。对于外交，她有句名言，“实事求是，要早说话，要多说话，说明白话”。如此办外交，才能化不利为有利，化消极为积极。当北京奥运火炬传递在西方遭遇藏独势力干扰时，傅莹一周之内在英国主流媒体上连撰两篇讲人情、摆事实、说道理的文章，她柔中有刚、带有女性特有亲和力的处理方式，一改中国外交不苟言笑、严肃有余的传统，傅莹从此开始名扬天下，而外交“傅莹模式”的说法也不胫而走.现在，这位60岁的女副外长有了新角色，兼任人大发言人。这意味着，她开始有了一方展示女性柔和魅力的国内舞台。当今中国，女官员不少，但漂亮的女高官少，优雅的女高官更少。傅莹一人兼具两项优势，怎能不吸引采访两会的众多记者前来捧场？

A Confident China–New York Times Video Jane Perlez, a diplomatic correspondent, discusses covering China’s challenging relations with the world.

China to provide loan for rail track to key Sri Lankan port | Reuters China’s Export-Import Bank will provide a loan of $278.2 million to Sri Lanka to help lay a rail track to a key port which Beijing is building that has stoked concern in neighboring India. The port of Hambantota on the southern tip of the Indian Ocean island nation is envisioned as a refueling and service point for cargo ships, which pass a few kilometers away on one of the world’s busiest East-West shipping lanes.

Chinese student charged over fatal US car crash ‘released on US$2 million bail’ | South China Morning PostA microblogger, called “Pretending in New York” and describing himself as living in the US, shared a report by www.kirotv.com on Sina Weibo, a Chinese Twitter-style site, on Tuesday morning. The report revealed more details about Xu Yichun’s background from the Hong Kong-based Sing Tao Daily. The report by a Sing Tao Daily reporter in San Francisco said Xu Yichun was from a rich family. His father, Xu Zhaohong, was the chief executive oftaxchina.com, a prominent mainland tax and accounting firm.

 

TECH AND MEDIA

淘宝回应电商征税：94%卖家不在征税范围 _阿里巴巴集团（ALIBABA） _i美股 Suning Chairman & CPPCC delegate calls for tax on ecommerce// 全国政协委员、苏宁云商董事长张近东今年6份提案5份指向电商，其中包括建议B2C加强征税。他在提案中称，我国当下电商交易的90%是以C2C的形式从事B2C的交易，约一半交易量游离于法律监管之外，进而导致假冒产品充斥、侵权现象严重；同时，非注册经营、非税销售等行为导致行业不公平竞争，正规注册经营企业成本高企，劣币驱逐良币。

Sohu Leads Stock Rally on Buyout Talk: China Overnight – Bloomberg rumors about this on and off over the last few months// The South China Morning Post reported that Beijing-based Sohu is talking to investment banks, including Credit Suisse Group AG, and private equity funds about taking the company private, citing four unidentified people in the financial industry. Chinese U.S.-listed equities were also bolstered by a Ministry of Finance plan to boost spending, increasing the budget deficit by 50 percent this year, and Premier Wen Jiabao saying that economic growth will be unchanged at 7.5 percent in 2013.

Chinese search contender Qihoo 360 beats street in Q4 2012 with $103m in revenue, $13m in net income – The Next Web According to StreetInsider, analysts had expected $0.17 in earnings per share and $93.68 million in revenue, less than the company’s actual results of $0.22 EPS and $103 million in revenue. Looking ahead, Qihoo expects to achieve revenue between $104.5 million and $106.5 million next quarter. Qihoo reported 456 million monthly active users of its products, which include security software, games, a browser and a web portal, in Q4 2012, up from 402 million in the year-ago quarter.

Vipshop F-1A For Secondary Offering–SEC Big win for DCM and Sequoia…DCM does not get much press, one of the best silicon valley VC firms in China over the years

Analysis: E-Commerce Eases Access to Chinese Market for American SMEs — [contextChina] / 太平洋中国通For the answers to these questions, market access consultants and direct communication with specialized importers remain vitally important. E-commerce, though, stands to challenge the role of these intermediaries as the only way to access the China market. As demonstrated in the above accounts of Cheers In and Tmall’s recent promotion, e-commerce has already eased the process by which American SMEs can connect with Chinese consumers. Its potential to further streamline this process, however, is more eye-opening than the progress it has secured thus far. If China’s major e-commerce platforms further engage in imports promotion, especially if they step in to provide access to resources on the logistical and regulatory aspects of these transactions, e-commerce could transform the face of U.S.-China trade itself.

 

SOCIETY, ART, SPORTS, CULTURE AND HISTORY

Language Log » Nerd, geek, PK: Creeping Romanization (and Englishization), part 2 I would like to discuss the problem of “nerd” in Chinese from a broader standpoint, namely, how ideas and concepts — and the words that signify them — pass from one culture to another. So let’s continue our examination of the question of how to say “nerd” in Chinese.  First of all, we have to know what “nerd” itself means.  It doesn’t just signify a bookish or pedantic person, but rather someone who is socially inept or square (try finding an exactly equivalent word for that in Chinese!), perhaps, but not necessarily, because of a consuming commitment to intellectual or technical pursuits (in my case it’s Language Log).

“少年派”越洋求学潮涌 提案呼吁教育结合市场需求 | 每经网 核心提示： 如今，留学潮更有逐渐低龄化之势。《每日经济新闻》通过对“少年留学生”这一群体进行观察，以展现中国教育的现实与梦想。

Song Zuying in New York: Singing for China’s Leaders : The New Yorker Recently, another warrior of the arts with a connection to China’s leaders led a small brigade to New York. Song Zuying, a pop singer who has been nicknamed Nightingale, Mommy, Song Ph.D., and First Mistress (more on that later), arrived to launch a three-week-long American concert tour at Radio City Music Hall. The day before her performance, Song Zuying met with a bevy of Chinese journalists in the conference room of a midtown high-rise. The walls were festooned with glossy posters of Song in a long crimson gown. “I am so proud to have been dispatched to the U.S.,” she said. Song is forty-six years old, with an unlined face—of the shape most coveted by the Chinese, the “sunflower seed”—that has aged little in the two decades since she became a household name in China. Her first big hit, in 1990, was “Tiny Basket,” a sentimental ode to rural girlhood. Since 2003, she has also been member of the People’s Political Consultative Conference, China’s top government advisory organization.

Chinese golfer signs with IMG | The Li-Ning Tower While the world’s press are catching up with news of David Beckham’s CSL deal, a more important signing in the world of Chinese sport in the last week might end up being female golfer Feng Shanshan partnering with IMG.

A Glimpse Into Yosemite’s Chinese History – YouTube Did you know that early Chinese immigrants played an important role in shaping the Yosemite that we know today? Join Park Ranger Yenyen Chan to explore this impressive and surprising history

 

ENERGY, ENVIRONMENT AND HEALTH

中石化董事长：大气污染罪魁祸首是煤炭|污染|煤炭|雾霾_新浪新闻 傅玉成介绍，我们生活在大城市中车多，所以感觉到污染大部分来自汽车尾气，其实最大的杀手是煤炭，在我国的能源结构中，70%的能源靠烧煤获得，“有的排放污染是以百万分之级别计算的，国四排放的硫污染是百万分之五十个单位，标煤的污染达到了百分之一到二个单位。”

Founder, Chairman of Suntech Power Resigns amid Debt Burden-Caijing Suntech shares have plunged to about about $1 from a peak of $80 in 2007.  The company who’s now teetering on the brink of bankruptcy will have as much as 4.5 billion yuan worth of debts mature in the single month of March, of which nearly 1billion yuan was extended by banks. Shi gradually lost his controls in the company himself founded after rejecting requests from local government and banks who asked him to offer his personal assets as a guarantee for more borrowings to help the solar products maker to pull through. Shi was also reportedly hollowing out Suntech by transferring assets to companies he personally owned.

China to get its own FDA | Marketplace.org From toxic infant formula to the widespread use of gutter oil in local restaurants, the Chinese have little confidence in their government’s ability to make sure their food is safe. Shaun Rein, author of The End of Cheap China, says creating a “super agency” is essential to restore consumer confidence and address the current risks. “Otherwise, the government is going to face severe social instability and dissatisfaction in the coming five years,” says Rein. “People have the money, they have the education, and they’re no longer willing to accept it.”

Ex-China Official Says Firms Forced to Fix Vitamin Prices – Bloomberg An ex-Chinese official testifying for vitamin C exporters sued by U.S. companies said they had no choice but to follow Chinese government rules and thus can’t be blamed for price-fixing in the $500 million market. Qiao Haili, a retired Ministry of Commerce official who oversaw the vitamin C companies, testified today in Brooklyn, New York, federal court. A key witness for the defense, he told jurors vitamin C makers were required by the Chinese government to adhere to agreed-upon pricing and volume restrictions.

Environmental Outlook: Air Pollution In China | The Diane Rehm Show Diane and her guests discuss the air pollution crisis in China. Guests Kenneth Lieberthal, Yanzhong Huang senior fellow for global health at the Council on Foreign Relations, Jennifer Turner director of the China Environment Forum at The Woodrow Wilson Center.

 

FOOD AND TRAVEL

Rage, Smelly Socks and Stolen Wine in China’s Skies – Bloomberg penalties for bad behavior at airports and in airplanes too light. people need to start going to jail like they would in the US for some of this// Should every Chinese — including hundreds of millions who can’t afford to fly — be held responsible for the misbehavior of often well-heeled air passengers? The answer, for at least a few microbloggers, is a decided no. For them, the fact that so many of the air rage miscreants fly business class or internationally suggests that these issues result from people who don’t fear the consequences. In effect, money and power corrupt, and on airplanes they set off entitled, temperamental behavior.

Glass half full for imported liquor |Economy |chinadaily.com.cnSales of imported liquor have witnessed continuous growth in China despite gloomy reports from high-end Chinese baijiu producers hit by the central government’s frugality campaign and a military ban on luxury dinners. Insiders said the growth has been mainly stimulated by individual consumption in pubs and at home. Chinese consumers interest in high-end foreign liquor, such as branded whiskey, cognac and vodka, is also increasing, and they expect growth momentum to be maintained. However, the anti-corruption policies may delay foreign companies’ plans to merge with or acquire baijiu brands in China.

 

BEIJING

Easing traffic tops Beijing work agenda |Hot Issues |chinadaily.com.cn Easing road congestion has been placed at the top of Beijing’s work agenda this year. The government has released a to-do list with 32 items to benefit people in 2013, five of which involved traffic, Beijing News reported on Tuesday.

 

LAST ISSUE’S TOP THREE READS

PREMIER LEAGUE: After fatal Ferrari crash, careers are stalled, group loses power – AJW by The Asahi Shimbun – Editor’s note: This is our fourth series on the inner workings of the Chinese Communist Party. Previously, we described the downfall of rising star Bo Xilai, profiled the powerful children of high-ranking party members, and explained the leadership shift in 2012.The latest series, “Premier League,” focuses on the Communist Youth League and the high-ranking officials who have risen–and fallen–through its ranks. The series will appear on Tuesdays, Thursdays and Saturdays

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