The Sinocism China Newsletter For 04.07.13

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

As of today there are two more H7N9 cases (WHO) in Shanghai, China has approved an anti-flu drug with H7N9 potential (Xinhua) and Nanjing has banned live poultry trade (Xinhua). Nanjing residents are on edge but at least a mass sparrow death in Nanjing (Xinhua) that was a top topic topic on Sina Weibo was not due to the H7N9 virus.

Doubts over transparency about the outbreak continue, even in state media, as the South China Morning Post reports in Questions fly thick and fast over delay in bird flu report. The New York Times quotes a WHO spokesman saying China’s response has been “excellent”:

Although some critics have asked why it took so long to publicly announce the outbreak of the H7N9 virus, public health experts have so far commended the government for responsiveness and transparency in the five days since officials identified the first victims. “It was the Ministry of Health and Family Planning that first came to us and volunteered the information,” said Gregory Hartl, a spokesman for the World Health Organization in Geneva. “Their response has been excellent.”

It would not be surprising if the central government in Beijing is committed to transparency but local officials are not.

Our kids had school today, thanks to the vagaries of official vacation planning here, and the school was not checking temperatures before allowing them to enter, as they did in 2009 in response to the H1N1 fears. There was a rumor going around social media today that Dongzhimen Hospital had Beijing’s first confirmed H7N9 case but at this point there has been no official confirmation, and there are lots of false rumors right now. If the school has the thermometers out Monday morning then we may know that the Beijing Municipal Government has upgraded its response.

The government is in a difficult position. Few believe it will be transparent, and if it is then many will assume the situation must be even worse than it is. How do you manage pandemic fears in the social media age, especially when your track record of information management has led to a credibility crisis?

I have a Monday morning speaking engagement and so there will be no newsletter for April 8.

Today’s Links:


Xi promises peaceful, prosperous China helping neighbors | Reuters Painting a picture of a richer China in 2020, when the government expects average rural and urban incomes will be double 2010 levels, Xi said his country would increasingly export its wealth to its neighbors. China will import $10 trillion worth of goods a year five years from now, he said, and outbound investment will rise by a big margin. Domestic consumption, particularly retail consumption, will also continue to expand. China imported $1.8 trillion worth of goods and services last year, up a meager 4.3 percent from a year ago as its economy slumped into its worst downturn in 13 years .// 博鳌亚洲论坛2013年年会_腾讯财经_腾讯网 Tencent News coverage of the Bo’Ao forum

China’s Xi Says Region Can’t Enter Chaos as Korea Tensions Rise – Bloomberg “I think this is a tough warning to the Kim regime not to escalate tensions in the region,” Willy Lam, an adjunct professor of history at the Chinese University of Hong Kong, said by telephone today.

中共北京市委关于开展“中国梦”学习宣传教育工作的实施意见 Beijing Party Committee circular on launching study, propaganda, and education work on “Chinese Dream”…was wondering yesterday when we would start seeing lots of billboards around town about the Chinese Dream..soon I guess…will this be the top nationwide propaganda campaign in 2013 and beyond?// 习近平总书记关于实现中华民族伟大复兴的“中国梦”的重要论述,为指引全党全国各族人民凝心聚力、共同推进中国特色社会主义事业注入了强大的精神力量。深刻理解、广泛宣传“中国梦”的基本内涵、本质要求和实践路径,对深入学习贯彻党的十八大精神,激励全市人民加快推进首都改革发展,具有十分重要的意义。现就全市开展“中国梦”学习宣传教育工作提出如下意见。

China Local Debt May Top Estimates, Former Minister Says – Bloomberg Local Chinese governments may have more than 20 trillion yuan ($3.2 trillion) of debt, exceeding the official estimates, former Finance Minister Xiang Huaicheng said at the Boao Forum for Asia. Xiang’s estimate for provincial and city government borrowings is almost double the 10.7 trillion-yuan figure that the National Audit Office gave for such debt in a 2011 report. The combined debt of China’s central and local governments may currently be more than 30 trillion yuan, said Xiang, who served as finance minister from 1998 to 2003 .// China’s debt issue not particularly serious: former finance minister – Xinhua | He said that China’s debt-to-GDP ration stood at about 37.8 percent in 2011 and 40 percent in 2012. “Some problems should not be ignored, although the debt issue is not so serious,” Xiang said. Take for instance, he said, the loans issued by some policy banks came from inter-bank bond, which take on the nature of government debts. “The amount of debts in this regard is not small,” Xiang said.

China’s big banks faking their micro loans: researcher | Reuters China’s big banks are not delivering on their promise to lend more to the smallest firms and are instead “faking” their micro loans, a researcher said on Saturday, suggesting a government drive to increase micro-lending is struggling. Ba Shusong, a researcher from the Development Research Center, a think-tank that advises China’s cabinet, said the biggest Chinese banks are still setting tough collateral standards for small firms, who often cannot meet the demands.

China Is Finally Becoming A Lucrative Market For App Makers | TechCrunch “Two years ago, a lot of people were getting downloads, but they weren’t making a lot of money,” said Henry Fong, the CEO of Yodo1, which helps foreign mobile game developers enter the Chinese market. “This changed in late 2012 when the big mobile operators kind of reset their carrier billing programs. Monetization on Android has gotten a lot better.” That has meant that local app developers are starting to see their revenues per month soar. Beijing-based mobile game developer and publisher CocoaChina/Chukong said a few weeks ago that their flagship game Fishing Joy is now making $6.28 million per month, mostly from China. “We fully expect that sometime in 2013 that there will be a $10 to 15 million-per-month game in China. This should be not ignored by the Western market,” said Lei Zhang, who is the U.S. general manager for CocoaChina.// just in time for government to step in an start regulating the app market. you watch…

WeChat War Escalates, Becomes Showdown Between Government and Internet Users | Tea Leaf Nation Tencent has maintained that it wishes to keep WeChat free for its users. However, the Internet giant has so far kept a low profile in the media, clearly trying to avoid the perception that there is open hostility with the telecom operators and their government backers. While Tencent is reluctant to lead the charge publicly, millions of Chinese Internet users have taken up arms on its behalf by posting messages critical of the telecom operators and the government. The official account of Netease, an Internet portal, posted a summary of user opinions in rather colorful language on Sina Weibo, China’s Twitter:

新华时评:三起“碾人”惨剧以强凌弱气焰何来 – 地方联播 – 新华网 Xinhua on the 3 recent killings by vehicle over land disputes//  新华网北京4月5日电(记者刘巍巍)4月3日,四川省西昌市一村民在与重钢西昌矿业有限公司就用水问题协商解决纠纷时,被矿区推土机碾压致死。这是3月下旬以来媒体曝光的第三起企业施工车辆碾压农民致死事件,其中暴露的问题令人发指,发人深省. 新华社记者调查发现,尽管与此前河南、湖北两起类似事件分别被认定为涉嫌过失致人死亡、涉嫌故意杀人不同,西昌发生的推土机“碾人”事件被当地安监部门界定为“生产安全事故”,但事件发生过程中同样存在相关责任人以强凌弱、视人命如草芥的问题。人们不禁要问,这种嚣张气焰究竟从何而来?



Boao forum panel hears calls for level playing field for private firms | South China Morning Post “The government must free its control,” said Professor Zhang Weiying, an economist at Peking University. “As Premier Li Keqiang put it, we must cut off the hand that has been wrongly installed on the government’s arm.”

张维迎:温州企业家跳楼是负责任的表现_网易财经 网易财经4月6日讯 博鳌亚洲论坛2013年会在海南举行,北京大学经济学教授张维迎在回答现场提问时表示,一个健康社会就是每个人为自己行为承担责任,投资错了,该跳楼就跳楼,不要找其他理由。日本人在这方面做得就比较好。温州人也有跳楼,这就是一种负责任的表现。 张维迎还批评了一些企业家,“有一些企业家到了一定位置后,老害怕得罪政府,所以就会以政协委员、人大代表形式保护自己”。张维迎认为,“这种保护的还是特权,不是人权”。

Superyachts, Supercars: Lavish Life Booms in China: Video – Bloomberg Stephen Engle reports on luxury in China. He speaks on Bloomberg Television’s “First Up.”

Fisker Automotive Firing as Much as 75% of Workforce – Bloomberg Last week, China’s Dongfeng Motor Group Co. (489), a carmaker that had considered buying a stake in Fisker, said those discussions were over. Fisker has repeatedly declined to identify specific companies it’s talking to.

China Vanke Expanding to U.S. After Customer Emigration – Bloomberg“ There are still opportunities in North America,” Wang said today at the China Business Conference at Columbia University in New York. Also, “we follow Vanke’s customers. Many of Vanke’s customers have emigrated abroad. About 30 percent of them have chosen America as the destination.” Vanke and Tishman Speyer Properties LP, the owner of New York’s Rockefeller Center, signed a deal in February to develop two residential towers in San Francisco that will cost $620 million and have 655 units.

Beware of large dividends | China Accounting Blog | Paul Gillis The founders of some U.S. listed Chinese companies have used a new, bolder transaction. The listed Cayman Islands offshore parent company borrows US$ from the overseas branch of a Chinese bank. The RMB deposits of the VIE are used as security for the loan. Chinese banks are apparently willing to do these transactions because they hold the deposits and can easily seize the collateral. The listed Cayman Islands company then pays a massive dividend to the public company shareholders, of which the VIE owner typically gets the biggest share. Voila! RMB cash in the VIE converted into US$, tax free and without exchange controls. The transactions obviously violate the spirit of China’s exchange controls, and as such they could be shut down should SAFE focus its attention on them. There are lots of tax problems. But the biggest concern is how does the Cayman Islands company ever pay off the loan?… The founder will have gotten his money out through a dividend, the bank will get its money back by taking the collateral, and the public shareholders will have worthless shares in a bankrupt Cayman Islands company.



小国务院发改委顶风作案被指忤逆李克强_多维新闻网 多维新闻】近期,经过政府机构调整及完成换届的中国国家发改委对于中国各类经济议题密集表态,引起各方关注的同时也招致强烈争议。连日来,发改委提出的“禁酒令致消费低迷,致使市场需求减少”和“短信收费,微信也应收费”的论述,尤其引发中国民众集体炮轰。分析人士认为,这些言论不仅不符合民众利益和市场发展规律,也与习近平、李克强上台以来推行的改作风、市场化改革的政治和经济方针以及建立“服务型政府”的理念相冲突,因此被认为是“逆风而行”。

红顶川商频受调查 或牵出中共大老虎_多维新闻网 实际上,中石油自2012年之后就成为多事之地。坊间还有一个比较普遍的说法:刚刚卸任中石油董事长的蒋洁敏虽然被调任国资委这个“肥缺”,但此前盛传他被中纪委调查。早前,香港《南华早报》曾引述消息人士说,在令计划之子令谷的法拉利车祸发生后,有人将数百万元人民币从中石油的账号转到了车祸两名受伤女乘客家人的账号上。而当时处理法拉利车祸案的两人正是中央政法委秘书长、中央综治委副主任周本顺和令计划的小舅子、黑龙江省公安厅副厅长谷彦旭。能够在石油系统说上话,又要能够指派得动周本顺,背后的这个人指向了当时中共更高级别的官员。…在中国政治语境中,“红顶商人”的含义即“官商”,即身兼“官员”和“商人”双重角色。中共建政最有代表性的“红顶商人”即被陈毅称为“红色资本家”、担任过中国国家副主席的荣毅仁。但是在今天的中国,却有这样一批商人,他们并非官员,也很少在公众前现身,但是他们与中国官场有着千丝万缕的联系,他们身处灰色地带,通过与官员,甚至“太子党”结合,形成“官商同盟”。利用官员手中的权力为自己获得利益,同时向官员输送金钱,甚至成为某些人实现政治目的的“马前卒”。这些商人虽然头上没有“红顶”,但是他们与中国官场关系之密切,已经远非荣毅仁当年所能比肩。如何在法律的框架内,打掉这样一批依附于官员周围的商人,彻底铲除特殊利益集团,成为已经正式接掌中国大权的习李班子的重中之重,从目前来看,中共已经从“李春城案”开始动手。而这个串案如果继续抽丝剥茧下去,或许还会牵出背后更大的大老虎

The Coming Information Totalitarianism in China, by Mo Zhixu | Seeing Red in China On March 28, the General Office of the State Council issued a “Notice about the Division of Labor in Implementing ‘the Plan for the State Council’s Institutional Reform and Function Change’” (国务院办公厅关于实施《国务院机构改革和职能转变方案》任务分工的通知) which lays out, among other things, the time table for implementing the information network real-name registration system (“The Ministry of Industry and Information Technology and State Internet Information Office, along with the Ministry of Public Security, will be in charge of it. It shall be completed by the end of June, 2014”); and for establishing a unified credit information platform and a unified social credit coding system based on citizens’ identification numbers (implementation will start in 2015 and be completed in 2017).

温州高官情妇再爆料:多位领导共用情妇 – 搜狐视频 were several Wenzhou officials sharing a mistress? messy

河南安阳市委书记涉嫌严重违纪被调查_网易新闻中心 Anyang, Henan Party Secretary under investigation



NKorea aggression could strengthen US-China bond – Yahoo! News Ally?// Much of the policy has centered on China — both in strengthening diplomatic ties and economic trade. But China is an unreliable American ally and has been suspicious about the U.S. entreaty, which it sees as economic competition on its own turf.

Detecting Shift in Beijing, U.S. Makes Its Case on North Korea – In Beijing, officials said Mr. Kerry also wants to reinvigorate the dialogue with China on climate change. And the United States is pushing the Chinese leadership to crack down on the proliferation of cyberattacks on American government and commercial interests originating in China. Making progress on those issues will be easier if Washington is in sync with Beijing over North Korea. A week after Mr. Kerry’s visit, Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, will spend four days in China to try to improve communication between the American and Chinese militaries.

Former top U.S. official: China getting fed up with North Korea | The Cable The Chinese government has changed its approach to North Korea and taken a tougher line out of frustration with Pyongyang, according to Kurt Campbell, the State Department’s top Asia official until last month. “The most important new ingredient [in the North Korea crisis] has been a recognition in China that their previous approach to North Korea is not bearing fruit. That they are going to have to be much clearer and much more direct with Pyongyang that what Pyongyang is doing is undermining Chinese security,” Campbell told an audience at the Johns Hopkins University’s School of Advanced International Studies Thursday.

Progress slow in developing fighter jets, Major General Zhu Heping says | South China Morning Post careful of taking things at face value?// Hong Kong-based military commentator Ma Dingsheng said having the right materials for the alloy and the proper smelting technique were preconditions for manufacturing high-quality engines – for aircraft, tanks or warships. “Beijing could spend hundreds of millions of dollars to buy the aircraft, dissect them and pore over the advanced engines inside and out before trying to copy their design,” he said. “But they are doomed to fail to overcome the predicament presented by the lack of the materials and techniques required to make them.” He said it would be hard to make significant progress in machinery production capabilities in a decade or two.

Hacking Is Top U.S.-China Economic Issue, Ex-Trade Official Says – Bloomberg Cyber attacks against American companies allegedly emanating from China have had an “extremely negative” effect on relations between the world’s two biggest economies, Charlene Barshefsky, who served as U.S. trade representative from 1997 to 2001, said in an interview. “I think this is perhaps the most significant economic issue between the U.S. and China at the current time,” Barshefsky said today while attending the Boao Forum for Asia in the southern Chinese province of Hainan. “It has extremely negative spillover effects, particularly with the development of strategic trust, so I do think that the U.S. and China have to come to an agreement on the proper bounds of cyber activity.”

California Governor Jerry Brown looks to sell China on his state | Reuters California Governor Jerry Brown said on Saturday he was aiming for a big win as he sets off for China to pitch the Golden state’s wine, produce and technology and open a trade office in Shanghai. Chinese consumers have “hundreds of billions in savings,” Brown told Reuters in an interview, saying he was determined to persuade at least some of them to spend it by purchasing goods from California and investing in the state’s businesses.

The soft, weak Chinese cite concerns for international law and due process | Glenn Greenwald | So even when China refuses to use weapons the US routinely uses, by citing precepts of international law, respect for the sovereignty of neighboring countries and at least the pretense of due process, this shows that China is a growing threat to US interests in the region. At some point, either China or Russia or someone else is going to start drone-killing people in other countries, and the only thing certain to happen is that US political and media circles will erupt with condemnation without the slightest sense of irony or shame (provided that it’s done by a government that is not a US client). The fact that China’s restraint is depicted in US media circles as evidence of the growing threat it poses highlights the mindset that drives this.

菲律宾外长指责中国“过分声索”南海_资讯频道_凤凰网 第29次菲美“肩并肩”联合军演于5日正式启动,菲律宾外长德尔罗萨里奥在演习开幕式上高调提及南海问题,并批评中国对南海的声索“违反国际法”。

Silicon Valley Fights Restrictions on Chinese Tech – Corporate Intelligence – WSJ The last-minute addition of the language to the spending bill represents broader unease in Washington that Chinese telecommunications manufacturers increasingly supply vital network equipment here and U.S. computer systems are vulnerable to Chinese hackers. Although the spending bill’s language appears targeted at purchases from Chinese manufacturers, U.S. tech companies worry it could also cover their subcontractors in China and routine purchases of laptops or other technology.



The Increasingly Astonishing Rise of China’s Film Business | chinafilmbiz 中国电影业务 This year, China’s theatrical movie business is growing more than 6 times faster than its GDP. North America’s theatrical business, in contrast, has been growing slower even than its recession-worn economy, at an annual rate of just over 1 percent since 2002

Apple Has To Release A Bigger iPhone, Says Topeka – Business Insider This morning he reports, “our discussions this week in Taipei and China continue to highlight the need for Apple to launch a larger-sized iPhone to cater to the Asian market,” adding, “Essentially, we are being told that the minimum size needed by Apple is a 4.5-inch display on the iPhone; however, a 5-inch to 5.5-inch would be optimal.”



Tom_Carter: Of Peasants With Pitchforks: Inside China’s Villages Dragon-scale rooftops, hay-insulated walls, washing laundry in the river, falling asleep to a symphony of frogs and rising with the call of cockerels… this is life in the thousand-year-old, 16-family village I now call home. I proposed to my wife in an immense bamboo grove, and our child was delivered in the communal delivery room of our local, public People’s Hospital. Jiangsu is not a poor region — the blight of white-tiled buildings with blue-tinted windows (New China’s architectural symbol of success) — is prevalent even in our village. But just outside our front door, vast fields of golden wheat spread out in leisurely harvest, where our neighbors plowed, tilled and sowed the good earth from dawn till dusk. Then, last year, these lands were suddenly seized by the government and sold off for profit to a colluding company. The fields were fenced up overnight, and, just like that, a livelihood passed down from time immemorial came to an end. In other parts of China, peasants with pitchforks are rising up against state-sponsored property confiscation. My neighbors, lacking leadership (or resolve), unfortunately acquiesced without a fight; they are now all lowly assembly-line workers in outlying factories.



Photos Of Chinese Rare Earth Mining – Business Insider Take a look at rare earth mining in China and its impact on local villagers and the environment.

Isatis tinctoria – Wikipedia, the free encyclopedia sold out in many places after some medical professionals said can prevent bird flu//  Indigowoad Root (Chinese: 板藍根; pinyin: bǎn lán gēn) is a traditional Chinese medicine herb that comes from the roots of woad. Literature on traditional Chinese medicine uses the scientific name Isatis indigotica, although this name is usually considered synonymous with Isatis tinctoria by botanists. It is also known as Radix isatidis. The herb is cultivated in various regions of northern China, namely Hebei, Beijing, Heilongjiang, Henan, Jiangsu, and Gansu. The roots are harvested during the autumn and dried. The dried root is then processed into granules, which are most commonly consumed dissolved in hot water or tea. The product is very popular throughout China. Possible minor side effects include allergic reactions and dizziness; only large dosages or long term usage can be toxic to the kidneys.

New Bird Flu Seen Having Some Markers of Airborne Killer – Bloomberg The H7N9 strain, which is a new virus formed as a result of two others merging their genetic material, has features of viruses that are known to jump easily from birds to mammals, and a mutation that may help it attach to cells in the respiratory tract, said Ron Fouchier, a professor of molecular virology at Erasmus Medical Center in the Netherlands, in a telephone interview yesterday.

The New Bird Flu, and How to Read the News About It | Wired Science |



The Chosun Ilbo- Chinese Overtake Germans as Biggest-Spending Tourists Chinese tourists have overtaken Germans as the world’s biggest-spending travelers after a decade of robust growth in the number of Chinese holidaying abroad, the United Nations World Tourism Organization said on Thursday. Chinese tourists, known for traveling in organized tours and snapping up luxury fashion abroad, spent $102 billion on foreign trips last year, outstripping deep-pocketed travelers from Germany and the United States.

China to open Xisha Islands to tourism before May – Xinhua | China is scheduled to let tourists visit the Xisha Islands in the South China Sea ahead of the forthcoming May Day holiday, said Tan Li, executive vice governor of the southern-most province of Hainan, on Saturday. People will be allowed to visit the islands on cruise tours, said Tan at the 2013 Boao Forum for Asia Annual Conference, which will open on Sunday.

Nestlé brewing hot cup of promise for Chinese coffee growers The Yunnan announcement comes two days after Nestlé said it would continue with the second phase of its five-year, RMB500m (US$80.6m) investment in its ice cream business in China. The company completed the first phase of the investment last year with the installation of new equipment at its ice cream cones factory in Guangzhou province. This will increase production capacity to over two million per day, making the factory Nestlé’s largest ice cream cone manufacturing facility in the world.



From the Dragon’s Mouth: 10 True Stories that Unveil the Real China: Ana Fuentes: FROM THE DRAGON’S MOUTH: Ten True Stories that Unveil the Real China is an exquisitely intimate look into the China of the 21st century as seen through the eyes of its people. This is the first time that a book combines the voices of everyday Chinese people from so many different layers of society: a dissident tortured by the police; a young millionaire devoted to nationalism; a peasant-turnedprostitute to pay for the best education for her son; a woman who married her gay friend to escape from social pressure, just like an estimated 16 million other women; a venerable Kung-Fu master unable to train outdoors because of the hazardous pollution; the daughter of two Communist Party officials getting rich coaching Chinese entrepreneurs in the ways of Capitalism; among others. ANA FUENTES is a journalist whose reports have been broadcast on three continents by Radio Netherland, Prisa Radio, CNN en español and others. Ana holds a degree in Journalism from the Complutense University in Madrid and the Sorbonne University in Paris, and a Master’s in Journalism from El País and the University Autonoma in Madrid.

From the Dragon’s Mouth | ChinaFile From The Dragon’s Mouth: Ten True Stories that Unveil the Real China is an exquisitely intimate look into the China of the 21st century as seen through the eyes of its people.

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