The Sinocism China Newsletter For 09.01.12

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

Thanks for reading. The best way to see this daily post is to subscribe by email, especially if you are in China, as Sinocism is still blocked here. You can also follow me on Twitter @niubi or Sina Weibo @billbishop. Feel free to donate through the button on the top right, and if there is a story you think I should include please send it to me. 

Apologies, the link in yesterday’s email to Chinese Economist: Expect an Economic Crisis in China in 2013 pointed to the wrong story. It appears to have been the doing of Mailchimp, as the link is fine on If the email link is still busted you can access the article directly at

The original Chinese article is available here.

Just links today:


China Communications Shuns Profitless Domestic Rail for Africa – Bloomberg The company will only bid for domestic rail projects that it can make money on instead of placing low offers to win market share, Chairman Zhou Jichang said yesterday in an interview in Hong Kong. The Beijing-based builder, China’s second-biggest by market value, has traditionally focused on ports and roads.  “Our expansion into the domestic rail business was a bit blind,” Zhou said. “We aimed at market share over profitability, but now we’ve learned our lesson.”

保障房分配:一场公民追逐公平的考量|保障房|分配|一场_21世纪网  one of the failures of the subsidized housing push–civil servants getting priority in many places// 在此前的一周,厦门岛内保障房分配引起了一场广泛的舆论关注:公务员与厦大教师优先获得,而一批等待许久的普通百姓,一直未获得岛内房源。

Chinese City Gives Retirees License to Ticket –  This month, the city fathers of Shaoyang, a financially struggling city in Hunan Province, decided to boldly embrace such an approach, spurring a rash of profit-driven vigilantism that appears to have had too much of the desired effect.  Residents say a climate of apprehension has gripped the city of 600,000 since the local government gave roughly 1,000 neighborhood watch committee members the authority to ticket citizens who litter, spit in public or park illegally.

China Medical Technologies Files Chapter 15 Bankruptcy – Bloomberg   “To date, the liquidators have been unable to locate any other CMED assets anywhere in the world outside the Cayman Islands,” said Kenneth M. Krys, joint official liquidator, in a filing.  He said unsecured debt includes $276 million in 4 percent senior convertible notes due in 2013; and $150 million in 6.25 percent convertible senior notes due in 2016; both governed by Cayman law and mostly held by Americans.  Krys said in the filing that “it appears” the company’s financial troubles resulted from alleged “fraudulent transfers” of assets, and that the money is missing.

FT Alphaville » Iron ore, an alternative view -The following comes from Icap’s shipping team on Friday: The carefully engineered economic slowdown in China is a fact clearly expressed in the recent readings of some key economic indicators. However, we fail to see any affirmative sign of a weakness in the structural demand for iron ore and other raw materials key for industrial output.

Private equity in China: Hony ahoy | The Economist – Sceptics think such success will be hard to repeat. Why, they ask, should a Chinese SOE wanting to enter, say, Germany need a Chinese private-equity firm’s help—rather than that of big Western firms which have better knowledge of the target market? That is not what matters most, Mr Zhao counters: Chinese firms have a very strong culture and little experience working with outsiders, which he thinks gives Hony a decisive edge. He points to Bain Capital’s failed attempt to help Huawei, a telecoms firm, enter America as an example. “I’m going to be riding on the wave of Chinese firms going global,” Mr Zhao insists. But even if he is right, he cannot relax. Investors will not wait forever for the good ship Hony to bring them that promised golden bounty.

Keeping the Faith – Caixin Online  Hony Capital saw Suning as a good investment, but since it put 1.2 billion yuan into a private placement, the appliance retailer’s stock has slumped. Despite this, Hony president John Zhao says he has no regrets

China Huijin Buys into Banks’ Shares for 3 Straight Quarters-Caijing – According to half-year figures reported by the Industrial and Commercial Bank of China, the country’s largest lender, Huijin bought 7 million more share of ICBC in the second quarter, after reports from the other three major Chinese lenders showed that it increased 3.85 million, 0.76 million and 8 million shares of China Construction Bank, Bank of China and the Agricultural Bank of China, respectively, also in the second quarter. That brought Huijin’s holding in the four banks to 35.4 percent in ICBC, 57.14 percent in CCB, 67.63 percent in BoC and 40.13 percent in AgBank, ending June of this year.

A Peek into China’s No.1 Gold Mine Army -Caijing – The world’s only army devoted to gold mining is in China. The No.1 gold mine contingent of the Chinese People’s Armed Police Force (APF) which has so far discovered over 1800 tons of gold and contributed to one third of China’s newly-found gold helped China to be the world’s largest gold producer.

Modern China: A tale of luxury villas and displaced villagers | McClatchy – former residents of Puxin Village, much of which was razed for ThaiHot Mansion, say that some who refused to move were beaten. People who’ve since tried applying to government offices for redress, they said, have been detained and harassed…former residents of Puxin Village, much of which was razed for ThaiHot Mansion, say that some who refused to move were beaten. People who’ve since tried applying to government offices for redress, they said, have been detained and harassed.

Merkel seeks Chinese concessions in solar row | Reuters – Chancellor Angela Merkel said on Friday that Germany had no interest in starting a trade war with Beijing over solar exports to Europe, but stressed that China must take action to address distortions to fair competition in the sector. Beijing was also forced to defend its rare earths exports policy on the second and final day of Merkel’s China trip, with Premier Wen Jiabao saying China was not intentionally holding back exports amid a supply squeeze that has driven up prices.

China won’t challenge WTO ruling in U.S. bank card row | Reuters – China has decided not to appeal against a World Trade Organisation ruling that found it had discriminated against U.S. bank card suppliers such as Mastercard Inc (MA.N) and Visa Inc (V.N) in favour of a state-owned enterprise, China UnionPay.

How bad is China’s cash crunch? | beyondbrics– Searching for warning signs in China’s economic slow down? Look at corporate cash flow. Both at the macro-economic and company level, reports suggest that Chinese companies are increasingly short of cash – and are having to resort to ever more desperate means to get hold of it.  The overall picture is hard to grasp, given a scarcity of data, but the evidence is multiplying.

Hermes Raises Growth Target as China Demand Boosts Sales – Bloomberg – Hermes, in which LVMH Moet Hennessy Louis Vuitton SA (MC) owns a 22.3 percent stake, is seeking to tap growing demand for luxury goods in Asia, where wealthy clients continue to increase spending on items such as Birkin bags. Sales in the region, other than Japan, rose 25 percent in the half-year, led by China, Singapore and Hong Kong, the company said.

Hong Kong to Boost Home Sales, Favor Locals as Prices Surge – Bloomberg – Chief Executive Leung Chun-ying announced a 10-point package yesterday that included speeding up the approval of permits for private project sales, selling public units that were originally intended for rent, and drafting policies that will give preference to local buyers.

开发商暗调销售节奏 “金九银十”降价潮或难现 – Real Estate developers worried about” golden september silver october” sales, historically the best sales period of the year



China’s Hu seeks clean power handover with ally’s promotion – sources | Reuters – skeptical about this story. would be a real shift to have premier on CMC in the reform era. we’ll know soon enough if he gets this job// China’s outgoing President Hu Jintao is angling to promote one of his closest allies to the military’s decision-making body, sources said, in a move that would allow him to maintain an influence over Beijing’s most potent instrument of power. Three sources with ties to the top leadership said Hu hopes to cut all of his direct links to the top echelons of power by early 2013, on the understanding that his protégé, Vice Premier Li Keqiang, is made a vice chairman of the military commission at the party’s five-yearly congress later this year.

《新维月刊》2012年9月号 | 新维资讯网 • 新维月刊 – September issue of HK’s Xinwei Monthly is out, PBSC 9vs 7, details on Gu Kailai. take with a grain of salt, but sometimes stories that appear here first eventually flow into western media reports. The August cover story an interesting read//

Hong Kong’s Tycoons Under Attack – – Mr. Leung and the anticorruption agency have been backed in their recent efforts by Beijing, which is apprehensive about the rising discontent in Hong Kong. The Chinese government supported the selection of Mr. Leung, and Chinese President Hu Jintao instructed him to make resolving social tensions his first priority. At Mr. Leung’s inauguration earlier this summer, Mr. Hu said social conflicts “could affect Hong Kong’s long-term development.”

原贵州省委书记栗战书已任中办常务副主任|栗战书|贵州省委书记|中办_新浪新闻 former guizhou provincial secretary li zhanshu is now the executive vice director of the very powerful General Office of CPC Central Committee.. Li is said to be very close to Xi Jinping, expected to replace Ling Jihua as head of the office around 18th party congress//

Li Zhanshu – Wikipedia, the free encyclopedia  his wikipedia page needs updating//

Ling Jihua – Wikipedia, the free encyclopedia very close to Hu Jintao, first rumors he was in line for a big promotion, now rumors that maybe he is not. we’ll know when we know, and even then we may not know//

人民日报-新闻战线“走转改”活动理论研讨会在京举行  新华社北京8月31日电  (记者李菲)源于实践的思考,总结规律的探讨。在“走转改”活动开展一年之际,中宣部8月30日在京举行新闻战线“走基层、转作风、改文风”活动理论研讨会。来自中央和地方有关部门、新闻单位和高校研究机构的100多名代表参加研讨,进一步深化了对“走转改”活动的规律性认识。

Frenchman Linked to Bo Xilai Case Returns to Cambodia – Patrick Henri Devillers, 52, came back to the capital, Phnom Penh, this month after helping authorities in China with their investigation of Gu Kailai

Xinjiang: Fast and loose | The Economist – In Kashgar, however, security this month does not seem too obtrusive. Even the open grumbling of many Uighurs is, in a way, a sign of relative relaxation. When tensions rise, the Chinese authorities have shown themselves well able to prevent any attempted uprising. What they seem unable to do, in spite of the investment they have poured into the region, is to tackle the inequalities and prejudice that alienate so many Uighurs.

Insight: Does China’s next leader have a soft spot for Tibet? | Reuters – The Dalai Lama, too, has yet to be convinced that Beijing will soften its stance on Tibet – even if Xi turns out to have the same moderate inclination as his father – and says political reformers sometimes do not last long in the Communist Party. “These realistic people sometime live a very short life.”

Japan writes letter to China as calls to ease tensions grow|Politics|  A senior Tokyo diplomat handed a letter, written by Japanese Prime Minister Yoshihiko Noda and intended for President Hu Jintao, to State Councilor Dai Bingguo on Friday.  Tsuyoshi Yamaguchi, Japan’s parliamentary senior deputy minister of foreign affairs, arrived in Beijing on Tuesday as Tokyo’s chief messenger to ease bilateral tensions over territorial issues

Isle Spats Backdrop for Clinton’s Asia Trip –   Secretary of State Hillary Clinton is scheduled to tour parts of Asia over the coming week in what could be one of the Obama administration’s last chances to address escalating territorial disputes across the region ahead of November elections. Mrs. Clinton is scheduled to meet with leaders of Indonesia, East Timor, Brunei, China and Russia amid growing tensions over competing claims on the islands, shoals and open waters in Asia.

China-NZ joint Pacific aid project targets water in Cook Islands – Xinhua |China, New Zealand and the Cook Islands announced a new partnership that will deliver an improved water mains system to the people of Rarotonga, the Cook Islands’ main island.

China in Pacific for common development: Chinese vice FM – Xinhua    In a press conference with mainly foreign journalists, Cui refuted suggestions that China was out to extend its influence or to “compete” with the United States in the Pacific.

Hillary Clinton Travels to the Cook Islands : The New Yorker -Before returning to Washington, Clinton will meet with Chinese foreign-policy chiefs, and one hopes they can find greater common ground on issues like Iran and Syria, where there are urgent reasons for coöperation. It’s been a while since Americans had cause to spend much time in the neighborhood of Guadalcanal and Bougainville, and I hope that we won’t have many reasons to be there again soon.

China Focus: Timeline for China’s space research revealed – Xinhua In an interview with Xinhua, Zhang Shuangnan, an astrophysicist at the Institute of High Energy Physics of the Chinese Academy of Sciences, said key developments will include China launching its first space telescope around 2015 and the country’s space station being completed around 2020.

Banyan: Snow dragons | The Economist – Of all Asian countries eyeing the Arctic, it is inevitably China that provokes the most interest and, in some quarters, alarm, for many reasons. It is huge, desperate to secure supplies of energy and other minerals and nervous about the strategic vulnerability implied by its “Malacca dilemma”—that four-fifths of its energy imports pass through that narrow strait near Singapore. So China has invested both financially and diplomatically in the Arctic. An article by Malte Humpert and Andreas Raspotnik of the Arctic Institute, a Washington think-tank, notes that China spends more on polar research than America (though, to put this in perspective, so does South Korea). It has a research station in the Svalbard archipelago, the northernmost part of Norway, and is building a sister ship to the Xue Long, to go into service in 2014.

China’s arctic pioneers begin work[1]| A scientific researcher breaks ice at a Chinese research station in the Arctic Ocean, Aug 29, 2012. China’s fifth Arctic expedition team began their work on Wednesday, carried by icebreaker Xuelong, or Snow Dragon, which started its trip in July. The 120-member team includes one scientist from Taiwan and four from France, Denmark and Iceland. Their work will include a survey on the impact of changes in the Arctic Ocean’s environment on China’s climate, the arctic eco-system’s current conditions and its interaction with global changes.



陶然: 雪球体研报:360搜索 8月16日$奇虎360(QIHU)$低调上线… – 雪球 – Snowball Finance research report on Qihoo search and the battle with Baidu

HEARD ON THE STREET: Online Upstart Qihoo Rattles Baidu – – Investors aren’t taking any chances. Baidu’s stock price has fallen 16% from its mid-August high. Qihoo’s stock is up nearly the same amount over the same period. That seems like an overreaction to the immediate threat. But even if Baidu manages to see off Qihoo, the sneak attack is a reminder that dominance can’t be taken for granted.

The Huawei Enigma – How do people in the telecommunications industry think about Huawei? And what is really going on with the Shenzhen-based ICT conglomerate. Joining Kaiser Kuo and Jeremy Goldkorn this week to talk about Ren Zhangfei and the company he built are two experts in the Chinese telecommunications market: David Wolf, president of the ICT consulting firm Wolf Group Asia, and Will Moss, a Chinese public relations expert who now works for Motorola, China.

Vancl Lays Off Rufengda Delivery Staff, Pulls Service from Most Cities Nationwide -ecommerce firms struggling to conserve cash



China’s One Percent – By Mathias Braschler and Monika Fischer | Foreign Policy  photo essay// China’s growth has also given rise to a vastly unequal country, and its economic gains over the last three decades have been far from evenly distributed. Instead they have gone to the already wealthy and the wily, the well-connected, and, sometimes, the visionary. But today, as China’s growth slows and a Internet-fueled animus takes root at the excesses of wealthy princelings and the entitled wealthy, the first sprouts of a new backlash again these nouveau riche may have already begun. Meet China’s 1 percent.

Hilton’s sweet tweets attract Chinese fans|Society| And the one everyone came to the private party in Shanghai to know was American socialite Paris Hilton…She had been tweeting about it on Sina Weibo for the past two months….What made this party girl pay attention to China?…Adam Roseman knows… The 34-year-old American, who lives in Shanghai, is the founder of China Branding Group, which launched website fanstang.comin June. ..The site publishes tweets from Hollywood stars and NBA athletes, especially for their Chinese fans — and Hilton is one of his most important clients.

国酒茅台文化研究会 –hear the Beijing Maotai Wine Culture Association is a fun club. too bad no foreigners, not that i could afford it. but you can get real moutai

北京国酒茅台文化研究会_互动百科 –

北大起诉“奸淫”传闻爆料人邹恒甫_网易新闻中心 –Peking University sues the former professor who accused Beida officials/professors of lewd behavior at a restaurant near campus//

FinSpy Software Is Tracking Political Dissidents – – The software proved to be the stuff of a spy film: it can grab images of computer screens, record Skype chats, turn on cameras and microphones and log keystrokes. The two men said they discovered mobile versions of the spyware customized for all major mobile phones.But what made the software especially sophisticated was how well it avoided detection. Its creators specifically engineered it to elude antivirus software made by Kaspersky Lab, Symantec, F-Secure and others.The software has been identified as FinSpy, one of the more elusive spyware tools sold in the growing market of off-the-shelf computer surveillance technologies that give governments a sophisticated plug-in monitoring operation. Research now links it to servers in more than a dozen countries, including Turkmenistan, Brunei and Bahrain, although no government acknowledges using the software for surveillance purposes.



To Build or Not to Build – Caixin Online  China should slow the pace of building based on the conditions in the country. The related authorities should strengthen their efforts to monitor the construction quality…China should shift its nuclear power application to the naval ships. This can save oil, while accumulating experience in nuclear operations. According to China’s existing energy structure, we can increase the efficiency of coal usage and promote the development of clean energies, such as solar power, wind power and natural gas. …The author is from the Resources and Environment Policy Institute, Development Research Center of the State Council