The Sinocism China Newsletter For 10.18.12

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

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 @billbishop

China’s Q3 GDP growth rate slowed as expected to 7.4%. Some of today’s other data came in ahead of estimates (Bloomberg), something Premier Wen Jiabao likely knew when he told people in meetings recently that China’s economic growth is stabilizing (Xinhua). FT Alphaville yesterday explained how to (almost) understand China’s quarterly GDP growth rate.

Earlier this week the Wall Street Journal wrote in the somewhat alarming Billions in Cash Flows Out of China’s Closed Capital System that “in the 12 months through September, about $225 billion flowed out of China, equivalent to about 3% of the nation’s economic output last year.”

FT’s Beyondbrics is less concerned, arguing yesterday in China capital: Fright and flight? that:

China has definitely suffered some capital flight over the past year but the estimated amount, roughly $50bn, is less than 1 per cent of GDP. That is more than enough to cause headaches in Hong Kong, Vancouver and Sydney, where residents complain that Chinese buyers have driven up property prices. But this is not a new phenomenon: hot money outflows from China were even bigger in late 2008 and early 2009 when the global financial crisis struck.

In August Caixin examined capital outflows in the cover story 资本流出中国 (abridged translation Revamping the Landscape of Forex Flows). Caixin is generally a hard-hitting publication that is not afraid of writing truthful, negative reports about China and its economy, and its attitude to the capital outflows was fairly sanguine.

So is China suffering dangerous capital flight? Or would we only know when it is too late? FT’s Beyondbrics concludes that “with the renminbi in vogue again, the supposed capital flight from China might start to look more like a capital influx in the fourth quarter.”

Time Magazine’s Beijing bureau chief seems to imply in Missing in Action: As China Readies for a Leadership Handover, Where are Marx and Mao? that the Communist Party may be ready to downplay if not jettison Marx. Her argument is based on an essay (奋力把改革开放推向前进, English summary CPC magazine praises reform, opening-up policy) by the authoritative “秋石” in the latest issue of the Party journal “求是” (Seeking Truth):

…in the Oct. 16 article, the Great Helmsman who founded the People’s Republic was completely missing in action. Mao’s name was not mentioned once. As for the German, there was only one brief reference to “Marxism with Chinese characteristics,” but that was in a separate part of the story from the potted recital of the People’s Republic’s ideological history.

By my count, Marxism 马克思主义 is actually mentioned eight times in this essay. Perhaps more important, the essay is based on Hu Jintao’s July 23 speech, as was one, by the same author, in the previous issue of Qiushi (坚持和发展中国特色社会主义—— 毫不动摇走党和人民在长期实践中开辟的正确道路). Marx was mentioned seven times and Mao Zedong mentioned once in that earlier essay. Apparently Hu spoke for many hours at the July speech and was very clear on the challenges facing the Communist Party and China. So far I am not aware of a public transcript of his important speech, which likely set the stage for the imminent Party Congress.

Qiushi is an important publication but we should be wary of snap guesses about what a particular essay may mean. The one Time discusses may telegraph the deepening of reforms (though not Western-style political ones) coming out of the 18th Party Congress, but there does not appear to be any evidence to conclude that the Party might be on the verge of downgrading Marx.

CNN has just launched a new show about China. Kristie Lu Stout is the host of ‘On China:’ Experts discuss new generation of leaders. Last night’s debut was very good.

Today’s links:


Private capital enters large infrastructure projects-Morning Whistle – According to local reporting, private capital will account for 46.7 billion yuan out of the 300 billion yuan investments. And the start of operations on the two projects signifies the cracking of monopolies.

Chinese developer profit soars as housing market warms – Xinhua | – The China Merchants Property Development Co., Ltd (CMPD), a leading property developer in China, reported a surge in its third-quarter net profits on Wednesday as the country’s real estate market perked up.

Shanghai home purchase limits to continue – Xinhua |– The property market’s operation in Shanghai has been within expectation since the beginning of the year, Liu Haisheng, director of the Shanghai Housing Guarantee and Management Bureau, told a press briefing. “Currently, the controls are in a critical period and Shanghai will continue to strictly enact housing purchase limits,” Liu told reporters.



Chinese business, political elite flaunt their success with mistresses – The Globe and Mail – wife of a rich friend told me 2 years ago I was a loser for not having mistresses/girlfriends, that of course her husband can have them (and he does), as he is rich and successful, just as long as she stays #1. she is no dummy, from a decent Beijing family, has a PhD… thinking about it now, as a lowly, monogamous blogger, maybe she was right…//China’s top sexologist calls it the “emperor complex” and says powerful Chinese men seek to accumulate women the same way they desire money and power. “I think it mainly comes form the Chinese tradition of having concubines. Monogamy has only been around for 60 years. But in history, there was nothing wrong with [having mistresses] at all,” said Li Yinhe of the state-run Chinese Academy of Social Sciences. “Now successful men take mistresses – I would even call it a subculture – as a way of showing off their success.

Top mainland press official Jiao Li dismissed amid corruption claims | South China Morning Post – Jiao Li , a former close aide to top Communist Party propaganda official Liu Yunshan , has been dismissed as deputy director of the General Administration of Press and Publications (GAPP) in a sign that he could face party discipline over rumoured links to corruption and sex scandals.

Q&A: Jamil Anderlini, the FT’s Beijing bureau chief – Bo and the leadership | beyondbrics – Bo Guagua is not in China. He is definitely afraid of being arrested. Gu Kailai has already been sentenced and I very much doubt it will be changed. I believe there may be more revelations and surprises but Bo Xilai being acquitted won’t be one of those surprises.

薄熙来案党内程序结束 书面检讨已内部传达 _多维新闻网 – if an internal report is circulating perhaps there will be more fact-based leaks about bio xilai case soon// 【多维新闻】距离9月28日中共宣布对原重庆市委书记薄熙来给予“双开”并移交司机关已近20天,外界风传薄熙来案审判在即,势必将在中共十八大前给出定论。而据内部知情者亦向多维新闻透露,薄熙来已就错误进行书面检讨,内部文件已传达至副局级,该案的党内审查程序已经结束。但因事涉机密,薄熙来自省内容尚处“严格保密”阶段,无从获知。

A Chinese woman reaches outer space, but there’s no space for women in China’s elite politics | Fox News – Since the founding of Communist China in 1949, no woman has ever served on the Politburo Standing Committee, the topmost leadership clique where major policy is set. Only two women have served as provincial party secretaries, powerful positions seen as stepping stones to national leadership posts.

Xinhua Insight: CPC highlights case studies of Party-people relations – Xinhua | – Every year, dozens of delegations make “pilgrimages” to an urban community of 120,000 people from all walks of life in central China’s Wuhan City. They are looking to understand the remarkable sense of harmony achieved by Baibuting. The recipe, residents say, is active and responsive Communist Party of China (CPC) organizations.

Chinese residents take to streets after man reported killed | Reuters – Thousands of protesters took to the streets in the city of Luzhou in southwestern China on Wednesday, after reports a truck driver was beaten to death by policemen, residents said.

[拍客]泸州红星村农贸市场交警打死人了—在线播放—优酷网,视频高清在线观看 – video on Youku from the disturbance in Luzhou. Sichuan after police allegedly beat a driver to death and people starting protesting

Ambassador Gary Locke Met With Tibetans Last Month – – if you follow his staff on twitter you knew about it in real time// an embassy spokesman said on Wednesday that the trip to Aba was not made in secret and was known by Chinese officials. Before going there, Mr. Locke, whose activities are of great interest to Chinese citizens because he is Chinese-American, had spent time meeting officials and business leaders in Chongqing and Chengdu, two major western cities.



人民日报-邪恶的参拜 钟声 – “Evil Worship”, Zhong sheng on page 2 of People’s Daily about Abe’s Yasukuni Shrine visit

Commentary: Abe’s visit to shrine to further dent China-Japan ties – Xinhua | – Japanese opposition leader Shinzo Abe’s visit of a controversial Tokyo war shrine on Wednesday afternoon was the latest of a flurry of Japan’s provocative moves against China, and would further poison bilateral ties.

China grapples with great power status FT-many foreign observers to suspect a split between a “moderate” civilian leadership and more “hawkish” military. However, there is little evidence for that.

China State TV Host Apologizes for Cursing American Reporter. Or Does He? – China Real Time Report – WSJ – damaging affair for CCTV9, hear the bosses were not happy// Writing on Sina Corp.’s Weibo microblogging service, Mr.Yang said he had expressed “sincere apologies” on numerous occasions to al-Jazeera correspondent Melissa Chan, though Ms. Chan said in an email to China Real Time that the TV host had not contacted her personally

Delicate Touch: Flight Operations Begin on China’s First Aircraft Carrier – China Real Time Report – WSJ – over the past few years, Chinese deck aviation development has evolved in both nature and rhetoric as Beijing gradually voiced carrier ambitions, revealed Liaoning’s refitting, commissioned this first hull, and now is beginning initial flight exercises with it. Beijing has taken pains to maintain a light touch, but is making progress that will add up over time.

China to set military zones for defense industries – Xinhua | – Some key organizations will be zoned as forbidden military areas or restricted military areas, said Ma Yifei, bureau director of the PLA’s Headquarters of the General Staff, on Wednesday.

Watching the Presidential Debate in China: The Panda Sluggers  The New Yorker over-all, the Chinese seem to prefer, if only slightly, the panda slugger they know to the one they don’t. “If this election was online and open to the whole world—like voting for N.B.A. All-Stars—I could vote for Obama,” one Chinese commentator wrote after the debate. “For China to continue to reform and develop, we need a stable environment. We’re already familiar with Obama’s attitude toward China and his style, which makes it easier to predict.”

Red State – By Shen Dingli Foreign Policy-interesting post, though do not assume Shen speaks for the government//

2nd U.S. presidential debate sees candidates flex China muscle Xinhua-Romney’s willful attacks on China and unfair trade rules do not necessarily mean that the billionaire, a veteran investor who used to profit handsomely from doing business with China, does not know the root of problem — he said only said so to further his campaign.

The U.S. and China: Jobs, Trade, and More–Heritage Foundation – Many Americans worry that China is stealing jobs from the United States and will surpass America as the world’s strongest economy. Heritage expert Derek Scissors explains why this simply isn’t the case.

Romney’s Chinese Manipulation Pledge Has Risks, El-Erian Says – Bloomberg – “There’s merit in saying that so far China hasn’t stepped up to its global responsibilities,” El-Erian, also the co-chief investment officer of the world’s largest manager of bond funds, said on Bloomberg Television’s “In the Loop” with Betty Liu. China “believes that its national responsibilities come ahead of its global responsibility. We also have to remember that from the Chinese perspective, they are operating in a global economy that is dominated by the west.”

Calling China a Currency Manipulator Could Be Empty Gesture – Bloomberg – What little leverage the U.S. has over China will disappear if Romney approves the manipulator moniker, an act that China will interpret as an attack. This helps explain why, under President Barack Obama, the U.S. has refrained from doing so. Instead, Obama and Treasury Secretary Timothy Geithner have opted to negotiate, mostly behind the scenes, with China.  The strategy appears to be working. Since Obama took office, the yuan has appreciated about 11 percent against the dollar.

Huntsman Speaks Out – By Isaac Stone Fish | Foreign Policy – but he got a visa later to attend a board meeting// But China hasn’t always wanted to engage with Huntsman: In an interview with Foreign Policy in mid-October in his Washington, D.C. home, Huntsman revealed that the Chinese government canceled his visa, prohibiting him from entering the country to give a talk in September.



China Business Journal confirmed that 3,000 to 4,000 workers refused to work at Foxconn ZhengZhou – so criticism of the reporting unfair? // After CLW released a press release on October 5th on a strike occurred in Foxconn ZhengZhou, we received some doubts on the number of workers who participated in the strike. Today, China Business Journal published a report on the strike, they interviewed many workers in Foxconn ZhengZhou, part of this article confirmed our press release.

Local Government Accused of Forcing Students to Work for Foxconn-Caijing – Citing a teacher at Shandong Business Institute, China National Radio reported that all of vocational colleges in Yantai, a city in northern Shandong Province, were given a clear order by the local government, asking them to send students to work at Foxconn factories as interns from September this year.

White House review finds no evidence of spying by Huawei – sources | Reuters – found no clear evidence that Huawei Technologies Ltd had spied for China, two people familiar with the probe told Reuters. Instead, those leading the 18-month review concluded early this year that relying on Huawei, the world’s second-largest maker of networking gear, was risky for other reasons, such as the presence of vulnerabilities that hackers could exploit.

China’s online trade hits $45 billion in Q2, Taobao reigns: report | Reuters – China’s e-commerce industry grew 45 percent year-on-year in the second quarter to reach 278.84 billion yuan ($44.5 billion) in transaction volume, with Alibaba Group’s Taobao capturing 76 percent of the market, an Internet research firm said on Tuesday.

Alibaba rekindles cut-price war|Business | – A advertisement in a subway station in Beijing. The company, a unit of Alibaba Group, will stage a promotion in which 10,000 online vendors from three of the group’s online shopping arms will sell products at half-price on Nov 11.

China’s 360buy Set to Go Global, Plans to be the Next Amazon-TechinAsia – The company will reportedly launch an English version of its website (the ‘coming soon’ placeholder is at, with the goal of delivering products to over 36 countries, particularly in North America and Europe. 360buy has also opened up social presences, with Twitter, Facebook, and Google Plus accounts now active.

神秘包裹牵出真相:京东副总裁吴声的生意链_互联网_科技时代_新浪网 – allegations of dirty dealings by a 360buy executive, delivered anonymously to a major Chinese paper last month..shocked, just shocked…//



Urban dysfunction: child abuse increases in cities – People’s Daily Online – evil//The number of juveniles falling victim to domestic violence is now growing faster in China’s cities than in its rural areas, according to a report released by the Beijing Children’s Legal Aid and Research Center.



Drug From Chinese ‘Thunder God Vine’ Slays Tumors in Mice – Bloomberg – The plant, also known as Tripterygium wilfordii, contains triptolide, which earlier studies have shown can cause cancer cells to die. In traditional Chinese medicine, the plant is used as a treatment for rheumatoid arthritis. While the researchers hope to start human trials in six months, Saluja said it’s still a long leap from mice to people.

China approves marine functional zoning of coastal regions – Xinhua | – It also marked out mariculture, marine conservation and reserved areas and the length of repaired coastlines in the eight regions. This is to ensure reasonable control of marine exploitation and guarantee fishermen’s livelihoods and the development of modernized fishery.

Blood in the Water – Caixin – Far from the internationally contested borders of China’s ocean frontier is a tempest over territory between local governments. Experts say blurred partitions have resulted in bloody clashes that are on the rise with the growth of the marine economy.

China issues nuclear safety blueprint, eyes $13 billion investment | Reuters – China will have to spend around 80 billion yuan ($12.74 billion) by 2015 to upgrade the security of its nuclear facilities and radioactive contamination control to international standards, a report issued by the Ministry of Environmental Protection said.



Jing Daily: Chinese-Owned Virginia Winery La Grange Targets China’s Burgeoning Oenophile –

Nestle to Battle Starbucks in Chinese Premium Coffee Market – Bloomberg – With Chinese consumers drinking only three cups of coffee per capita each year, compared with 604 for the French, the companies are wagering that there’s latent demand in cities such as Shanghai



Inside China: Mr. ‘Don’t Speak’ speaks – Washington Times – his criticisms of Communist Party policies — from forced abortion to the moral debauchery and political greed of party members — are often more scathing and devastating than many writings by China’s dissidents.

In 3 Awards, 3 Ways of Seeing China – – Literature is not a boxing match, though sometimes it can appear that way given the polarizing passions it can generate. Such was the case in recent days, as two very different Chinese writers, one feted by the ruling Communist Party and the other spurned by it, received prestigious international awards.

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 @billbishop