The Sinocism China Newsletter For 09.26.12

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

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China and Japan are talking about the disputed islands but Beijing has told Tokyo to ‘give up the illusion’ (China Daily) and that the islands are China’s “sacred territory” (Reuters). The State Council Information Office on Tuesday published the white paper Diaoyu Dao, an Inherent Territory of China (Xinhua); do not expect the Japanese to be convinced. Taiwan has joined the fun but its fishing boats were kept away from the islands by Japanese Coast Guard water cannons (New York Times). Airlines are hurting, as reservations for over 52,000 seats have been canceled on Japan-China flights (Xinhua), though the prices have not yet dropped, unfortunately, as we would like to take the twins on last minute holiday trip to Tokyo Disneyland.

China officially launched its first aircraft carrier (China Daily), the Liaoning. The launch may be an attempt at a show of force as Japan tension festers (Reuters) but without planes that can fly off its deck the ship is more symbolic of what is to come. CCTV has a nice video about the Liaoning carrier and its first captain, the launch dominates page one of today’s People’s Daily and Xinhua has posted pictures of the interior of the ship.

Mitt Romney’s China’s contortions would make a Peking acrobat sore.

His recent anti-China invective is completely opposite from his views in 2009, as demonstrated by this video of Romney from three years ago (The New Republic).

Romney has made some profitable but now inconvenient Chinese investments. He owned shares in a Chinese oil company but sold “this summer as Mr. Romney’s anti-Chinese rhetoric heated up on the campaign trail.”(New York Times). He also sold shares in Youku (Buzzfeed), the leading China Youtube clone that was once a piracy haven but that is now very respectful of both foreign and local IP.

Romney only sold 300 Youku shares, I assume from a distribution from Brookside Capital, a Bain-affiliated fund. But he is likely to get more in the future as Brookside, which just prior to the 2010 Youku IPO owned 16.86% (SEC Info) of the company, still owns more than 5% of Youku if I am reading the filings correctly.

I wrote about Romney’s indirect Youku stake and his China hypocrisy back in February, in response to an OpEd he wrote for the Wall Street Journal:

I use Youku, have friends who work there (or did before this post), and think it has one of the best management teams of all the Chinese Internet companies. The company is now a staunch defender of foreign and Chinese copyrights and a partner to many American video rights holders.

However, in its early days Youku was a pirate’s den of copyright infringement (of both foreign and Chinese content) and had it not ignored intellectual property rights it is unlikely it would be as successful as it is today. Remember, in his WSJ op-ed Romney writes “we must directly counter abusive Chinese practices in the areas of trade, intellectual property, and currency valuation.”

Youku, like all Chinese Internet companies, has to obey China’s laws and regulations, which include censoring content and limiting free speech. In the op-ed Romney also emphasizes “the character of the Chinese government—one that marries aspects of the free market with suppression of political and personal freedom.”

So tell us Mr. Romney, did you profit from Bain Capital’s investment in Youku?

I have investments in China and have no fundamental problems with investing money here. But I am also not running for president and bashing China to pander for political points.

Mitt Romney should itemize all the China investments he currently holds or once held, directly or through any funds, Bain Capital or otherwise, and he should disclose how much he has made from them.

Jiang Zemin made a very rare public appearance on Saturday, attending The Beautiful Blue Danube—The Story of Johann Strauss´ 1872 US Tour at Beijing’s National Center for the Performing Arts with his wife Wang Yeping, Zeng Qinghong, Li Lanqing and others. Jiang even went up on stage after the show and gave a brief speech praising the performers. Duowei has the story–江泽民高调亮相 被指十八大前“示威”–and a picture. I had heard recently he is so healthy that he swims several hundred meters a day; perhaps that is correct, to the chagrin of others in Beijing…

Jamil Anderlini, Beijing bureau chief of the Financial Times, is out with the first English book about the Bo Xilai case (there appear to be several new ones every week in Hong Kong.) I spoke with Jamil a few days ago and he told me that the book contains lots of previously unpublished details about the case. The Bo Xilai Scandal: Power, Death, and Politics in China (Amazon) is an e-book that “weaves together lurid detail and thoughtful political context to provide a gripping account of the rise and fall of Bo Xilai.”

On to today’s links:


China’s Central Bank Injects Record Funds to Ease Crunch – Bloomberg – happens every holiday, and this year’s is extra long as it combines national day with the mid-autumn festival// China’s central bank added a record 290 billion yuan ($46 billion) to the financial system using reverse-repurchase agreements, seeking to address a cash squeeze in the run-up to a weeklong holiday.

GDP may slow for 9th quarter |Economy | – Zheng Xinli, deputy head of the China Center for International Economic Exchanges, a government think tank, said China’s economic data for August has turned out worse than expected and the economy’s prospects remain gloomy. Amid those circumstances,the country’s GDP is unlikely to grow at a faster pace in the fourth quarter.

China’s Great Snow Chrysanthemum Tea Crash | Sinocism – post by yours truly// Snow Chrysanthemum Tea, grown at high elevations and supposedly good for your health, was the subject of speculative manipulation that pushed the price to 20,000 RMB, or about USD 3,150, per kilogram in 2011.A kilo of Snow Chrysanthemum Tea now goes for 30 RMB, or about USD 4.50

What the Foxconn Riot Says About China and Apple : The New Yorker – there is a growing expectations gap across almost all strata of society, at a time when the government is increasingly inept in delivering the goods. Beijing knows this// China today still has, more or less, the same Party-sponsored national trade union it has had for sixty years, even as the economy and the population have transformed. If Beijing is to avoid more riots in the months and years ahead, it needs to stop seeing this as an Apple problem and start seeing it as a China problem.

China Wealth Gap to Stay in Danger Zone, Government Adviser Says – Bloomberg China’s Gini coefficient, a measure of inequality, may hover around 0.5, Li Shi, who helped draft a government plan on income distribution, said in an interview last week. The government hasn’t published a countrywide Gini figure since 2000. The index (SHCOMP) ranges from 0 to 1, readings at 0.4 or higher are used by analysts as a gauge of the potential for social disturbances…The utility of Gini coefficient readings as a predictor for social unrest may be limited, with China’s reading estimated to be little different than the U.S. — at 0.45 for 2007, according to the U.S. Central Intelligence Agency’s World Factbook.

Shanghai Bonded Copper Stocks May at Record, Survey Shows – Bloomberg – “What we’ve heard is that inventories along the industry chain have been rising, from smelters to trading firms, to downstream users,” Jia Zheng, head of nonferrous metals research at East Asia Futures Co., said by phone from Shanghai. “Market participants have placed high hopes on government stimulus policies and this spurred some traders to stockpile a bit, leading to a higher level than the first half.”

Shijiazhuang Skirts Land Development System-Caijing – Shijiazhuang’s method to work around the national system in “urban villages” transformation has in essence granted villagers land development rights.

The ‘big four’ concerns of Chinese--Robert Kuhn in China Daily – What I hear are the “big four” social concerns: education, healthcare, housing and retirement. These challenges are what China’s new leaders face.

FT Alphaville » Don’t be alarmed about China’s balance of payment deficit (yet) – None of this changes the view we’ve had around here for a while: this is not a big problem right now, but it signals what might be the start of a problem.

CDB to extend loans to 12 solar companies |Industries | – China Development Bank will prioritize loans to 12 leading solar companies, the China Securities Journal reported on Tuesday.

Foreign Banks in China Rev Profit Engines – – The report, which accounting firm KPMG LLP is expected to issue as soon as Wednesday, shows that combined net profit at the China operations of 33 foreign banks more than doubled in 2011 from a year earlier, outstripping the pace of profit growth at local banks.

China’s Top 10 Richest – – The ranking of China’s wealthiest people, according to Hurun Report.

“抢地潮”再现 土地市场局部升温 新华社——经济参考网 – local land sales heating up. local governments ned to sell, real estate developers are in better financial shape, between a pop in sales over the summer and the easier loan environment//

房地产开发贷“定向宽松”趋势渐显-中国证券报·中证网 – policy now to make loans easier for top real estate firms?// 中国证券报记者调查发现,近期部分商业银行的房地产开发贷呈现“定向宽松”趋势。针对全国大型房企,特别是全国50强房企以及“五证齐全”的楼盘项目,银行开发贷支持力度普遍加大。

广州限售高端住宅 各地布控狙击国庆房价上涨|广州|高端住宅|房价_21世纪网 – Guangzhou restricting sales of high-end apartments, apparently to make the average selling price in the city look lower than it otherwise would be//

CIC’s Space Ambitions Remain Grounded – – China Investment Corp. (CIC) is mulling how to make the most of its recent acquisition of a minority stake in a leading European satellite operator. But whatever the move is, experts say, it’s unlikely to result in a technology transfer that China craves.

China Film Co-Productions: Getting the money.-China Law Blog – A dispute currently underway between a Chinese production company and China Film Group indicates just how difficult getting funds due from box office receipts can be. This case is significant for a number of reasons. Most importantly, it demonstrates that Chinese companies too are experiencing difficulties in getting “their” money out of China film co-productions. Moreover, the very fact that a Chinese court accepted a case against a China State Owned Entity (SOE) indicates that the authorities here regard the issue of box office revenue sharing as important and want it sorted out.

Americans In China Feel Pinch Of Shifting Economies : NPR– “The financial crisis of 2008 dropped the respect globally, especially in these emerging markets, of our model,” he says. “And to them, their model is better.” Fagle, who returned to the U.S. last December, says the feel between his first meetings in China and the one last year was utterly different. He says everything was positioned to say: “You are not in charge. I’m in charge. And, by the way, I don’t need your business.”

For Investors, a New Pick of the Crop – – Traders and producers said China’s rise as an apple-eating nation is adding another layer of volatility to a market that has been hit by freezes and droughts across the globe in the past several years.

Estée Lauder Develops a Brand for China – – Next month, the cosmetics company, known as the maker of popular brands like Estée Lauder, Clinique and Bobbi Brown, plans to introduce a hybrid East-meets-West beauty line called Osiao (pronounced O-Shao)…Developed at a company research institute in Shanghai and manufactured in Japan, the cosmetics line is aimed initially at customers in China and is scheduled to go on sale first in select specialty stores in Hong Kong



科学发展成就辉煌_网易专题 – Netease has launched a special “welcoming the 18th party congress” site

明鏡新聞網: 明鏡獨家:政治局會議周末召開 釣魚島沖突還會升級 – take w large grain of salt…Mingjing News claims there will be a politburo meeting this weekend, last plenum of 17th right after national day holiday, Bo Xilai will be kicked out of the Party and handed over to the judiciary, likely for a 20 years+ sentence, the 18th will open in middle of October, perhaps even earlier than expected, They also give their list for the 7 on the 18th PBSC: Xi Jinping, Li Keqiang, Zhang Dejiang, Wang Qishan, Liu Yunshan, Zhang Gaoli, Li Yuanchao// 北京消息人士對明鏡新聞網透露,中共中央已經決定本周末召開政治局會議,中共七中全會將于“十一之后”召開,在這個會議上,18大中央政治局常委確定為7人,包括習近平、李克強、張德江、王岐山、劉雲山、張高麗、李源潮,會議還將作出對薄熙來的「雙開」移交司法的決定。

Retired officials urge China’s ruling party to come clean | Reuters   good article from May by Chris Buckley, may still be very relevant// The retired officials, led by Ma Xiaoli, have long been out of power and proposals from them and other party reformers have little prospect of shaping China’s leadership succession, which will be settled at the party’s 18th congress later this year.

Ai Weiwei Says China Still Has His Passport – – “rebel artist”? // Mr. Ai said in a telephone interview that he would be unable to attend the opening on Oct. 7 of the first survey of his work in North America. The exhibition is being prepared at the Hirshhorn Museum in Washington, one of the Smithsonian museums supported by the United States government. Mr. Ai said that he also expected to be forced to cancel an appearance at a literary festival in New York that promotes freedom of speech and that he would be unable to give talks at Harvard, Princeton and New York University.

China mulls harsher punishments for illegal mapping – Xinhua | – The current regulations put a 300 to 10,000-yuan fine for failing to include the complete territory of the People’s Republic of China in making maps, while the draft law raises the fine up to 100,000 yuan (15,850 U.S. dollars). It also proposes improved supervision on Internet map services, which requires providers to place data servers within China’s territory and use only approved maps.

China slowdown adds urgency to Communist Party soul searching | Reuters – the fruits of a media tour that took 30 journalists from 19 outlests to jinggangshan?  中国官员“红色教育” 助力十八大 AFP, Reuters and Al-Jazeera supposedly on the trip, look for their reports soon//Dressed in ‘Red Army’ garb, they looked like travelers on a history tour, except the scene was less about history than survival — the survival of a party that critics say has lost its ideological soul after more than three decades of free-market reforms and is striving to stay relevant.

Labor NGOs: Growing Pains | China Development Brief (English) | 中国发展简报 – The following is a translation of an in-depth Southern Daily (Nanfang Ribao) article examining the recent supression of labor NGOs in Guangdong

Democracy with the Doors Shut – China Media Project – There is little doubt that we will continue to see the watchword “intraparty democracy” at the 18th National Congress, but the above three issues are critical ones that the 18th National Congress would have to grapple with if any meaningful progress is to be made.

Lawyer Criticizes Report on Police Shooting of Liaoning Man – – “Even if the situation was urgent, the police should fire a warning shot first,” Wang Ling said. “In the end, how far and fast can he run after lighting himself on fire?”

China’s bamboo ceiling – Decoder – YouTube – Many women have been successful at the top of China’s business ladder, but they are largely absent when it comes to politics – and an upcoming leadership transition looks unlikely to change that

Mitt Romney Jumps the China Debt Shark | China Hearsay Mitt Romney has said some mighty stupid things in the past couple of weeks, so I can’t exactly put the below quote forward as competitive in the “Top Romney Gaffes” list. In terms of China policy, though, this is not only an inane non sequitur, but it’s also quite misleading



Govt to object to China’s bid to extend shelf : National : DAILY YOMIURI ONLINE (The Daily Yomiuri) – The government plans to file an objection to China’s application to extend the outer limit of its continental shelf in the East China Sea, if Beijing submits it to a U.N. panel, it has been learned. Earlier this month, the Chinese Foreign Ministry announced its intention to submit such an application to the U.N. Commission on the Limits of the Continental Shelf, a move believed to be retaliation against Japan’s purchase of three of the Senkaku Islands in Ishigaki, Okinawa Prefecture.

China-Venezuela commercial cooperation benefits two peoples: FM – Xinhua | – Chinese Foreign Ministry spokesman Hong Lei said Tuesday that China-Venezuela commercial cooperation is in the interests of the two countries and peoples, rejecting views that Chinese capital in Venezuela may have an impact on its politics.

China Bankrolling Chavez’s Re-Election Bid With Oil Loans – Bloomberg – Since 2007, the China Development Bank has lent Venezuela $42.5 billion collateralized by revenue from the world’s largest oil reserves, according to data compiled by Bloomberg from announcements of deals by the Chavez government. That’s around 23 percent of all overseas loans by the state-run lender and more than the $29 billion the U.S. spent rebuilding Iraq between 2003 and 2006.

China Loans Boost Access to OPEC Nation After Ecuadorean Default – Bloomberg – Home to untapped copper reserves similar to those of Chile and Peru, the world’s top producers, Ecuador has signed loans for $7.3 billion from China since 2009, or about one-third of the Andean country’s annual budget, according to data compiled by Bloomberg based on government announcements. President Rafael Correa is asking China for an additional $1.7 billion to prop up public spending before February’s elections, following a trail blazed by his ally, Venezuelan President Hugo Chavez.

CNPC Performs Balancing Act in Iran – – CNPC will not abandon Iran, a source at the company said, partly because CNPC’s annual output from its oil fields abroad was 50 million tons by the end of 2010 and it wanted to reach its target of 100 million tons by 2015. CNPC also considers Iraq central to its Middle East ambitions. It lists three oil fields in the country now free of U.S. military activity as key to its efforts in the region.

US-China Institute :: news & features :: assignment: china – the chinese civil war – This segment of Assignment: China examines efforts by journalists to report on this final four years of the war and its impact on Chinese society. It features archival photos and interviews as well as interviews with some of those who brought news of this battle for the world’s largest country to Americans via newspapers and magazines, news reels, and radio.

China Becomes World’s Top Source of Overseas Students – – China has become the world’s largest source of overseas students, accounting for 14 percent of global total, according to a report released by the Center for China and Globalization (CCG) and the Chinese Academy of Social Sciences on September 17…The number of Chinese students studying in America grew so robustly that China beat India to become the biggest source of overseas students in America in 2010. More than 157,000 Chinese students studied in the United States in 2011, or 22 percent of total number of foreign students in the country.



Hong Kong’s Holiday Crackdown on Mainland Smugglers – China Real Time Report – WSJ – Such traders are bitterly resented by many Hong Kong residents, who accuse them of driving up prices of everything from milk powder to toothpaste, and of crowding subway stops close to the border. On one Facebook page, locals have taken to posting angrily captioned images of smugglers and their laden trolleys. “A shameless locust trader puts four lobsters in a suitcase to smuggle home,”



Riots, suicides, and other issues in Foxconn’s iPhone factories | Apple – CNET News – What makes life hard at the giant plants that make iPhones and other staples of high-tech life? CNET’s Jay Greene traveled to China to find out.

Taobao Links Up With Another U.S. IP Advocacy Group | China Hearsay – Although Chinese companies like Taobao and Baidu are not engaged in significant outward investment in places like the U.S., this type of model, partnering with strong, politically connected organizations, should be emulated as much as possible by other Chinese firms moving overseas. Doing so will allow them to avoid a lot of mistakes and wasted resources.

Confirmed: China’s Redbaby Cheats Death, Gets Acquired for Only $66 Million – The valuation is apparently based on Redbaby’s previous year’s sales revenues of RMB 1 billion ($158 million). But the B2C site raised four rounds of funding in its lifetime, the most recent being this August when it secured $20 million from NLVC, NEA and KeyTone Ventures. KPCB had participated in earlier rounds too. In total, just over $100 million was invested in Redbaby over the years, suggesting that investors are losing out badly.

China Mobile Games And Entertainment Group Listed On Nasdaq – – Auditor is E&Y// China Mobile Games listed under the ticker CMGE Tuesday. Its executives rang the closing Nasdaq bell on Monday.The company didn’t issue any new stock for the U.S. market. It also didn’t go through the typical IPO process, or the investment banking roadshow that goes along with that process, so it’s up to the market to determine a fair price for shares before they can start trading, says Sin.

Apple Built Special Version of Maps for China – China Real Time Report – WSJ – i own shares in autonavi// Customers in China, however, found more detailed maps covering their country than those overseas, in part because their data is provided by AutoNavi Holdings, a Chinese mapping company that makes auto navigation systems as well as virtual maps and satellite images. AutoNavi is also the most widely used mobile mapping service in China, with 45% market share, according to Analysys International.

iOS6 has your iPhone speaking Chinese | Sinosplice Apparently iOS6 not only added text-to-speech support for new languages, but also enabled the ability to recognize and read out Chinese, even when the phone is in English language mode, and even when the text is a mix of Chinese and English.



北京一长颈鹿乘车出行 动物园称遇限高可卧倒(图)_国际_大洋网 – Giraffes spotted on Beijing’s 5th ring road, in transit to a zoo in Anhui. The picture shows them not going in style, no sign of marty driving Pets’ Republic of China: Michael Zhao: Amazon Instant Video – Synopsis: The film touches upon some of the neglected and under-reported social issues in modern China. These amazing men and women, going to extraordinary lengths helping animals, have exhausted their financial resources, sheltering hundreds, even more than a thousand lives, in various parts of the country, feeding the handicapped and nursing the sick.

武当山将建全球首个太极功夫主题乐园 – 要闻 – 楚天都市网 – Wudang Shan to spend 2.2B RMB to build a Tai-chi theme park…

北京节前降雨市区严重拥堵似停车场_高清图集_新浪网 – pictures of the especially bad gridlock in beijing last night

24-Year-Old Chinese Pop Star Publicly Declares His Love for Preteen Model – Gawker- where are her parents?// In a disturbing flipside to this story, an adult Chinese pop star has taken to the social networking site Sina Weibo to declare his love for a preteen model and singer who claims she loves him back. 24-year-old Zhang Muyi and 12-year-old Akama Miki have apparently been exchanging love notes and posting “romantic” photos of themselves spending time together at the beach and on the couch.



Tangled Titans: The United States and China: David Shambaugh: 9781442219694: Books – Tangled Titans offers a current and comprehensive assessment of the most important relationship in international affairs—that between the United States and China. How the relationship evolves will have a defining impact on the future of world politics, the Asian region, and the citizens of many nations. In this definitive book, leading experts provide an in-depth exploration of the historical, domestic, bilateral, regional, global, and future contexts of this complex relationship. The contributors argue that the relationship is a unique combination of deep interdependence, limited cooperation, and increasing competition. Never in modern history have two great powers been so deeply intertwined—yet so suspicious and potentially antagonistic toward each other. Exploring this cooperative and competitive dynamic, the contributors offer a wealth of detail on contemporary Sino-American relations unavailable elsewhere. Students will find Tangled Titans essential reading to understand the current dynamics and future direction of relations between the world’s two most important powers.

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 blocked by the GFW. You can also follow me on Twitter @niubi or Sina Weibo @billbishopDonations welcome.