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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. 

The New York Times has a very disturbing front page story about Africa’s elephants being slaughtered in a poaching frenzy:

The vast majority of the illegal ivory — experts say as much as 70 percent — is flowing to China, and though the Chinese have coveted ivory for centuries, never before have so many of them been able to afford it. China’s economic boom has created a vast middle class, pushing the price of ivory to a stratospheric $1,000 per pound on the streets of Beijing….

“China is the epicenter of demand,” said Robert Hormats, a senior State Department official. “Without the demand from China, this would all but dry up.”…

Chinese officials declined to discuss any aspect of the ivory trade, with one representative of the Forestry Ministry, which handles ivory issues, saying, “This is a very sensitive topic right now.”

I assume the New York Times Chinese site will get a translation done and onto Weibo quickly. The reactions will be interesting, and perhaps galvanizing.

Vanity Fair published “Agony and Ivory” on the terrible topic last year:

Highly emotional and completely guileless, elephants mourn their dead—and across Africa, they are grieving daily as demand from China’s “suddenly wealthy” has driven the price of ivory to $700 a pound or more. With tens of thousands of elephants being slaughtered each year for their tusks, raising the specter of an “extinction vortex,” Alex Shoumatoff travels from Kenya to Seattle to Guangzhou, China, to expose those who are guilty in the massacre—and recognize those who are determined to stop it.

Chinese superstar Yao Ming recently toured Africa and is now engaged in the fight against poaching, but as I wrote last year in response to the Vanity Fair article:

China of course is not solely to blame for the killings of elephants. Poor, corrupt African nations are either complicit or lack the resources to stop the ivory trade. But unless the seemingly bottomless Chinese demand can be stemmed, it is hard to be optimistic about the future of Africa’s elephants.

Gady Epstein of the Economist has a smart take on the latest Ferrari foulup, writing in Politburo politics: Doesn’t matter if the Ferrari is black or red that:

…it is far from clear how much Mr Hu has given up in this game. Mr Hu does not have a reputation for “taking care of his own people”, as some Chinese observers put it, but that does not mean he has surrendered all leverage. By agreeing to abandon Mr Ling, Mr Hu may be prioritising other battles. The appointment of Mr Ling’s successor, Li Zhanshu, does not signal any obvious weakness on the part of Mr Hu. It is true that Mr Li has known Mr Xi since the 1980s, but he made his ascent through the ranks of the Communist Youth League, Mr Hu’s base of power, and was most recently party secretary of Guizhou, where Mr Hu served as well.

Nor is it yet clear how seriously Mr Ling’s career has been damaged. Accident or not, he would have faced formidable competition for the best jobs on offer, such as Beijing party secretary or head of the party’s powerful Organisation Department. As it is, he has an opportunity to emerge from the shadows of party machinery at the United Front; the task of managing relations with ethnic minorities gives him a potentially high-profile role in China’s most sensitive border regions of Inner Mongolia, Xinjiang and Tibet. In theory he is young enough to be promoted to the Politburo in future—like all seven of the men who have preceded him as director of the General Office since 1978. Five of them went on to serve on the standing committee (including the current premier, Wen Jiabao).

I wanted to avoid bad economic news today but it seems to be everywhere.

China’s steel market is collapsing says Wu Xichun, the honorary chairman of the China Iron & Steel Association, according to Caijing in CISA: China Steel Market Collapsed Already in August:

“The whole steel market has already collapsed in August, because any steel maker, including Baosteel (600019.SH), would make a loss at a such [low] price levels,” Wu Xichun, the honorary chairman of the China Iron & Steel Association, told a weekend conference.

A composite index of steel complied by the CISA fell to 103.28 on August 24, from 121.19 at the end of April, while the index for hot-rolled coil was 97 basis points, down from 100 when it was established in 1994, indicating that the steel price had plunged to where it was 18 years ago…

Such a situation has been seen only in 1995 and 1996 30 years after China’s opening up and reform, according to Xu Kuangdi, chairman of the Chinese Society for Metals. The steel capacity at that time, though, could not compare with the present. “This time, I am really not optimistic [about a correction of the industry],” Xu said, “The capacity is too huge that I cannot hope for better days ahead.“

And as the 21st Century Business Herald reports today, Hebei may have underreported its 2011 steel production by 50 million tons–河北瞒报钢铁产量近5000万吨|河北|钢铁产量. No word on 2012 production or what other provinces may have done, but why would Hebei be the only one? No wonder Xu is so pessimistic, and especially if he has read FT Alphaville’s are we approaching the edge of a steel cliff?

Most Chinese executives (or American ones for that matter) do not worry too much about SEC enforcement. But you can be sure there is fear when the Communist Party of China is on your case. Zhang Zhirong could end up in a world of trouble as Caixin reports that the Party is investigating insider trading case linked to the CNOOC-Nexen deal:

The Communist Party’s anti-corruption watchdog is investigating the insider trading case related to China National Offshore Oil Corp.’s (CNOOC) purchase of Canadian firm Nexen, sources close to the matter say.

Zhang Zhirong, chairman of China’s largest private shipbuilder, Rongsheng Heavy Industries Group Holdings Ltd., was suspected of making more than US$ 13 million on the New York stock market through insider trading linked to the CNOOC-Nexen deal. The SEC has frozen accounts and launched an investigation.

Perhaps if the SEC had the CCP’s fearsome “double detention” system then more executives would respect the commission?

Meanwhile, the chairman of one of the largest companies in the world has not appeared in public in nearly two months, leading to rumors that he is missing or, as Caijing reports, very sick. From PetroChina denies its Chairman is missing; may be badly ill:

Caijing learned from another source on good authority that Mr. Jiang has been in hospital for a while, which is not a secret to many insiders. The person did not know what it is but added persuasively it could be seriously illness.

The last time Mr. Jiang was seen by the public was on July 12, when he made a keynote speech at a meeting of leadership in Chengdu, which was published by Chinese news outlet. The meeting was hosted by Zhou Jiping, Vice Chairman and President of PetroChina, and Deputy General Manager of CNPC.

Corporate governance is optional I guess…

On to today’s links:

BUSINESS AND ECONOMY

Local Gov’ts Bet Big on Investment Projects – Caixin Online – Cities and provinces are pushing ahead with plans requiring a total of 10 trillion yuan, but questions about overstocked inventories and unclear sources of funding remain

China Big Four Lends 220Bln Worth of New Loans in August, Flat with July: Paper-Caijing – At the same time, the proportion of short-term loans and commercial paper in total loans has remained high, including in other large and medium-sized banks such as China Development Bank and Bank of Communications, where new loans were around 60 billion and 20 billion yuan respectively. That indicates the central government’s effort to stabilize growth by fast-tracking projects and a string of stimulus packages by local governments since April failed to have an immediate effect on banks’ credit structure in the third quarter, according to the newspaper.

Home Sales Double in Beijing on Rate Cuts, Centaline Says – Bloomberg – Beijing home sales in August surged 110 percent from a year earlier driven by first-home buyers after the central bank cut interest rates and signs of a price rebound damped expectations for cheaper housing. A total 28,753 new and existing homes were sold in the Chinese capital in a “traditionally weak month,” 1.2 percent lower than an 18-month high recorded in July, Centaline Property Agency Ltd. said in a report e-mailed today.

银行房地产贷款“缺位” 影子银行悄然接棒_财经频道_一财网 – first financial on the growing role of shadow banking in real estate lending//

High speed rail may need to be rebuilt – People’s Daily Online – corrupt keystone Keynesianism// Part of the newly built Harbin-Dalian high speed railroad connecting Northeast China’s Heilongjiang, Jilin and Liaoning provinces is now facing reconstruction due to roadbed deformation, an expert said on Tuesday.

China Said to Plan Boosting Export-Tax Rebates on Some Goods – Bloomberg – The government may give a full rebate of the 17 percent value-added tax on products including furniture, shoes and toys, up from the current range of 13 percent to 15 percent, said the people, who asked not to be identified because the discussions are private. The policy may be rolled out as soon as this month, depending on whether trade remains weak, they said.

CHINASCOPE – Qiushi: Six Rules behind Adjustments to the U.S. Dollar – Qiushi Journal, a bi-weekly magazine published by the Central Committee of the Chinese Communist Party, recently republished an article discussing the hidden rules behind each major U.S. dollar adjustment made since the Second World War. The author claims that six rules have been discovered: 1) the U.S. dollar became stronger before a global financial crisis and declined afterwards; 2) each time the U.S. dollar appreciated, it brought “a catastrophic blow” to the emerging economies at that time; 3) each time the U.S. dollar depreciated, somewhere in the world an economy would have bubbles, such as Japan in the 1980s; (4) the U.S. dollar obeys “political cycles” which correspond to U.S. presidential elections; (5) the U.S. dollar follows different strategies against “capital surplus” nations (like Europe) and “trade surplus” nations (like China); (6) the U.S. dollar is used to manipulate commodity prices. The author also offered some ideas on how to take advantage of these findings.

赴美生子产业链调查：“月子中心”的秘密_财经频道_一财网 – First Financial investigates the “supply chain” that sends Chinese Moms to the US to give birth. whoever translates and posts this could probably get a lot of Drudge love//

鄂尔多斯楼市过山车 信托突显兑付风险_财经频道_一财网 – repayment time for some Ordos real estate trust products. going to be ugly//

China Development Bank Veers Onto New Path – WSJ.com – In recent months, state-controlled China Development Bank has stepped into some of the biggest private deals in Asia, lending money to e-commerce company Alibaba Group Holding Ltd., Hong Kong Exchanges & Clearing Ltd. and Indonesia’s PT Bumi Resources. The bank, which was established in 1994 and has total assets of more than $980 billion, swooped in to take business away from some of its biggest global rival

U.S. Investors Return to China Bonds – Deal Journal – WSJ – not sure this is so representative,buying a tencent bond like buying a google, facebook or amazon bond// Last week, China’s largest internet portal by value Tencent Holdings Ltd 0700.HK -1.41%., raised US$600 million from a bond. That senior note was more than 10 times subscribed, partly a testament to the company’s strong cash position, earnings growth prospects, and a 55% jump in its share price this year. But buying by U.S. fund managers was a major factor. Tencent’s bond was marketed globally and attracted 307 investors, doubling from the investor base for a similar size bond it issued in December.

Goldman Sachs Cuts China Earnings Forecasts as Economy Slows – Bloomberg – a bit late no?// Profits for companies in the MSCI China Index (MXCN) may increase 1.8 percent this year and 8.6 percent in 2013, compared with previous growth estimates of 6 percent and 12.3 percent, Helen Zhu and Timothy Moe, analysts at the U.S. bank, wrote in a report dated yesterday. Credit Suisse lowered its 12-month target for the index to 60 from 70, analysts Vincent Chan and Peggy Chan said in a report today.

Chinese Medical Firm Sued by SEC Over Phony Weight-Loss Product – Bloomberg – China Sky One Medical Inc. (CSKI) and its top executives have been sued by the U.S. Securities and Exchange Commission over claims they inflated revenue by about $20 million with fake sales of a weight-loss product.

Xinjiang: struggle to revive the Silk Road | beyondbrics – What do  you do about attracting investment if you are a remote corner of China, best-known internationally for your ethnic tensions?…If you are Xinjiang, you invest heavily in a blockbuster economic exhibition.

 

POLITICS

China’s next leader buoyed by fresh setback for Hu: sources | Reuters – Reuters Benjamin Lim really going on on a limb. Good for him if he this right.// China’s next leader, Xi Jinping, looks to have emerged politically stronger after ruling Communist Party elders foiled a second attempt by outgoing President Hu Jintao to stack the top echelon of the new administration with his own allies. Hu had been maneuvering to promote his star protege, Hu Chunhua, to the party’s supreme decision-making body, the Politburo Standing Committee, as part of the current leadership transition, but other senior party figures have opposed the idea, two independent sources said.

重庆打黑一等功臣唐建华因受贿罪被捕-财经网 – 原重庆市公安局副局长唐建华因涉嫌受贿罪已于8月13日被重庆市检察院批准逮捕

Chongqing ex-cop held – – The Standard – A former deputy police chief of Chongqing has been formally arrested on bribery allegations, Caijing magazine reported, citing unidentified sources. Tang Jianhua was arrested on August 13 and his wife nine days later, the report said.

 

FOREIGN AFFAIRS

A Harsh Reception for Clinton in China’s State Media – NYTimes.com – Secretary of State Hillary Rodham Clinton arrived here on Tuesday night to a barrage of unusually harsh coverage in China’s official news media over what they called American meddling in territorial disputes in the region — and then a strikingly warm welcome from the country’s foreign minister.

Hillary Clinton to discuss wide range of issues during China visit CCTV News – CNTV English – Jin Canrong, Deputy Dean of School of Int’l Studies of Remin University of China, said, “She will try to calm the Diaoyu Islands dispute properly, because any worsening of the issue will be dangerous. The real target for the US is to harm China’s relations with neighboring countries. The US wants China to experience some hardship, but not to the extent of a war.”

China improves far-sea territory monitoring – People’s Daily Online – The satellite remote sensing images of the Huangyan Island, Diaoyu Islands and Xisha Islands have been included in the state’s dynamic monitoring and management system, according to the State Oceanic Administration of China. It is another great progress since the dynamic monitoring and management system of the waters began implementing regular monitoring to the offshore area of China.

Which country is exporting arms irresponsibly? – People’s Daily Online – translation of piece last week// The Washington Post reported that China’s arms exports have intensified armed conflicts and humanitarian disasters in Africa and other regions, which is not in accordance with the responsibility of a global power. The ridiculous criticism reflects double standard of some Westerners.

Two detained for harassing Japanese envoy’s car |Politics |chinadaily.com.cn – The two men, surnamed Guo and Xia respectively, were detained by police on August 29 in the city of Cangzhou in north China’s Hebei Province, according to the Beijing Municipal Public Security Bureau.

 

HONG KONG AND TAIWAN

Taiwan Hedges its Bets on China | Flashpoints – Interestingly, during Ma’s first term as he was attempted to create a new paradigm in relations with China, government agencies, including the MND, found it very difficult to say anything publicly that was too critical of China. This, we can assume, was under directions from top officials in the Presidential Office, who feared that hostile rhetoric — such as pointing out that, despite better relations, China was continuing its missile build-up targeting Taiwan — would undermine his efforts at rapprochement. For one reason or another, that restraint seems to have disappeared. Officials are now making it clear that military exercises, for example, are targeted at China and not at “nature” or some abstract enemy. Last week’s report to the Legislative Yuan on the five-year modernization plan for the armed forces’ military capabilities went one step further by claiming, reportedly for the first time in such a report, that China “may attempt a direct assault on Taiwan proper” once it has acquired enough amphibious transport vehicles or when the situation calls for it.

Plan for Change in Hong Kong Schools Stirs Protest – NYTimes.com – HONG KONG — A plan by the Hong Kong government to require schools to teach courses in contemporary Chinese history has set off an acrimonious dispute here with political implications. The controversy may threaten the prospects of pro-Beijing candidates in the legislative elections scheduled for this Sunday, and it has opened a broader discussion over the city’s future…The city’s Education Bureau issued a statement on Saturday strongly disavowing a teaching manual for the subject that has drawn heavy criticism in the city for praising the Chinese Communist Party unreservedly and questioning the value of multiparty democracy.

 

TECH AND MEDIA

Huawei’s Cavernous Cyber Security Credibility Gap | Digital Dao – would have been nice if the recent Sinica podcast on Huawei could have included Carr, but alas he is not in Beijing// I’ve been monitoring Huawei for several years and have given dozens of briefings on the security risks associated with the company, its management and its products. I’ve had several Huawei employees contact me privately about issues within the company and I’ve spoken to at least one of their senior executives last year about my concerns. I just finished reading Mr. Suffolk’s white paper, which Andy Purdy, former Director of DHS National Cyber Security Division and now Huawei’s Chief Security Officer, helped write. While it covered all of the usual bases regarding Huawei’s commitment to security (I’m not going to recap these – read the paper if you must know), it addressed none of the issues that underscore the opinion of myself and others that Huawei is a security threat

Chinese official calls for Asia’s own “Facebook,” “Twitter” – Xinhua | English.news.cn – Asian media groups should use technical innovation to enrich their communication channels and have their own versions of Facebook and Twitter to expand the region’s influence, a senior Chinese official said Tuesday. “Compared with Asia’s increasingly vital role in the world economy, the influence of Asian media groups on the world stage is very much disproportionate,” Cui Yuying, deputy director of the State Council Information Office, said Tuesday at the 5th 10+3 Media Cooperation Forum

发改委：电商价格战涉嫌欺诈消费者_网易新闻中心 – NDRC says consumers were cheated in recent ecommerce price wars//

Chinese Business Leaders Condemn Citron » Citron’s Fraud – site set up by Kaufu Lee. Citron has performed a service but its recent work on Internet firms has been garbage// Citron is an “investment analysis company” owned by Mr. Andrew Left, a man with a long record of fraud, deceit, and unlawful behavior. Citron’s reports take advantage of the information asymmetry between China and the US, and boldly tell lies, knowing that their American readers have no way of verifying them…We are investment professionals and company founders/executives in China. We are joining together in this effort to expose and condemn the deception and ignorance of Citron and other short sellers like them. This English website (citronfraud.com) is being created to host this ongoing fight against fraud

Dozens of Chinese and US Business Leaders Should Join Kaifu Lee and Condemn Citron Research « thelongshorttrader – pre Internet crap Citron has good record// LongShortTrader believes that dozens of additional Chinese and US business leaders  (from the below list) should join Kai-Fu Lee’s quest against Citron Research… Last, but not least: the C-level executives and members of the Board of Directors of the following should join as well: LFT, LEXG, DEER, MOBI, ZAGG, VVUS, NUS, QCOR, and Evergrande Real Estate Group (HK: 3333). Oh, if you have a chance, check out the stock prices of all the names mentioned above…better yet, see if they even remain listed.

优酷土豆合并案遭美国监管局调查 新一轮做空危险系数增加_中国经济网――国家经济门户 – more in the Chinese press on the supposed FINRA investigation into insider trading around the youku-tudou merger announcement. so far western media ignoring this. who keeps pushing this?//

Dolphin Browser lands $10mln in funding – Companies & Industries – Morning Whistle – – if true, lucky they got it before Baidu’s mobile browser announcement. know several VCs who passed on UCWeb, hard to see an exitable business model// MoboTap, developer of the mobile browser Dolphin Browser, recently revealed on its website that it will soon announce a new round of funding, which, according to an industry source, could reach $10 million and is reportedly led by Qualcomm.

 

SOCIETY AND CULTURE

China’s Airports Increase Security – Economic Observer Online – In-depth and Independent – Many internet users have complained about the extra time check-in takes with the new security measures. Some say taking an airplane is now less convenient than taking a train.

Praise for invisible watchdogs as Party seeks to cement governance – Xinhua | English.news.cn– China’s netizens deserve the credit as they bring once no-no topics for ordinary people to the public agenda, stirring waves of criticism and posing pressure on the ruling Communist Party of China (CPC) that endeavors to build harmony and cement governance. The latest example might be the Giggly Brother. It’s no laughing matter for Yang Dacai, a workplace safety official in the northwestern province of Shaanxi.

Vigilant Internet watchdogs deter corrupt officials – People’s Daily Online – netizens can target officials they don’t like and expose their wrongdoings through “human flesh searches” to track down every scrap of information possible. Due to the staggering numbers of Chinese netizens, the power this group has to curb corruption may grow exponentially, changing the landscape of the fight against corruption in China.

Official suspended from post amid public furor over flight fight incident – Globaltimes.cn – good timeline of recent lawlessness by Chinese airline passengers.//

Jesus vs. Mao? An Interview With Yuan Zhiming by Ian Johnson | NYRblog | The New York Review of Books – After the Tiananmen crackdown, Yuan became one of the country’s most-wanted dissidents, fleeing to Paris and eventually making his way to Princeton. It was there, in 1992, that he converted to Christianity and later started his US-based charity, China Soul for Christ Foundation. Although banned from entering China, he has become one of the country’s most influential spiritual figures through his documentaries and videotaped sermons. This summer, I met Yuan at his offices north of San Francisco, where we talked about China’s moral crisis, the future of communism, and the problems Christianity has in adapting to its new home.

 

ENERGY AND ENVIRONMENT

Morgan Stanley Arm Makes Large Investment in China’s Renewable Energy – WSJ.com – energy even dirtier than real estate. MS protecting against Garth Peterson 2?// Morgan Stanley and its partners, Chinese private-equity firm Fountainvest Partners and Asia-based private-equity firm Olympus Capital, have invested a total of $300 million in Zhaoheng Hydropower, making their first investment of $150 million in December 2010 and the latest $150 million investment in August….Zhaoheng is China’s largest small hydropower focused operator

中国疾控中心被指参与转基因大米实验_网易新闻中心 – Genetically modified rice testing on Chinese kids blowing up//

 

BOOKS

Amazon.com: Behind the Red Door: Sex in China: Richard Burger: Books – A sexual revolution is underway in China. Traditional morals and behavior are being turned on their head as the country’s climb towards economic prosperity brings sex into the open. But it is a revolution distinctly different from the one experienced in the West and has taken unexpected twists and turns.

Sex in China: Q&A with author Richard Burger | Danwei – Richard Burger is the blogger behind Peking Duck, a record of his thoughts on China since 2003, when he first wrote about being in Beijing during SARS. Burger is also the author of Behind the Red Door: Sex in China, published by Earnshaw Books this week. He answered questions from Danwei by email about his new book.

Amazon.com: Passions of the Cut Sleeve: The Male Homosexual Tradition in China: Bret Hinsch: Books – groundbreaking when written 20 years ago// The first detailed treatment of the Chinese homosexual tradition in any Western language, Passions of the Cut Sleeve shatters preconceptions and stereotypes. Gone is the image of the sternly puritanical Confucian as sole representative of Chinese sexual practices–and with it the justification for the modern Chinese insistence that homosexuality is a recent import from the decadent West.

Amazon.com: A Confucian Constitutional Order: How China’s Ancient Past Can Shape Its Political Future : Jiang Qing, Daniel A. Bell, Ruiping Fan, Edmund Ryden: Books – that funny new york times piece a few weeks ago was a summary i believe// As China continues to transform itself, many assume that the nation will eventually move beyond communism and adopt a Western-style democracy. But could China develop a unique form of government based on its own distinct traditions? Jiang Qing–China’s most original, provocative, and controversial Confucian political thinker–says yes. In this book, he sets out a vision for a Confucian constitutional order that offers a compelling alternative to both the status quo in China and to a Western-style liberal democracy. A Confucian Constitutional Order is the most detailed and systematic work on Confucian constitutionalism to date.

A Confucian Constitutional Order: How China’s Ancient Past Can Shape Its Political Future-Jiang Qing Edited by Daniel A. Bell & Ruiping Fan Translated by Edmund Ryden – this official site offers a free download of Daniel Bell’s introduction

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. 

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