The Sinocism China Newsletter For 10.26.12

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

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David Barboza of the New York Times drops a bombshell just before the Party Congress in family of Wen Jiabao holds a hidden fortune in China. The New York Times websites were immediately blocked in China. The website is still inaccessible here four months after its story on the wealth of Xi Jinping’s extended family. Bad times may be ahead for the New York Times in China.

This New York Times story is in many ways more damaging, as Bloomberg did not find any assets held by Xi’s wife or child. Premier Wen has a reputation as a repressed reformer, a topic I addressed last year in views on political reform and leadership splits in China, before the Bo Xilai case exploded.

This week’s Economist cover calls Xi Jinping “The Man Who Must Change China“. The issue has several good China stories.

Thanks for the handful of you who responded to yesterday’s call for support. Clearly I will need to find a day job…

Meetings this morning, abbreviated list of links:


China Aluminum Stockpiles Seen at Two-Year High Amid Glut – Bloomberg – Aluminum stockpiles in the main trading regions in China have climbed to the highest level in two years as growth in supply outpaces demand in the world’s largest user, according to two industry surveys. Reserves in Shanghai, Wuxi and Hangzhou, and in Guangdong province gained to about 940,000 metric tons as of Oct. 22, the highest since September 2010

Guest post: is China’s slowdown structural or cyclical? | beyondbrics – But, if the downturn is msotly cyclical, then the government has tools to stimulate the economy. If it’s structural and slowing in line with the government’s plan, then the small measures currently seen will continue, and we will all need to become used to a slower but perhaps more stable growth path for China.

As Economy Slows, Firms Leave Bills Unpaid – Caixin- Enterprises are struggling to pay suppliers on time, adding to the financial strain felt by the suppliers, which in turn find it hard or impossible to repay their creditors. As of August, combined net receivables for the nation’s industrial companies totaled nearly 8 trillion yuan, up 15.6 percent from August 2011, outpacing the companies’ average operating revenue growth by 5.4 percentage points, data from the National Bureau of Statistics shows.

Yuan Forwards Climb to May High as Melco Surges – Bloomberg – Investors increased bullish bets on China’s currency, pushing yuan forwards to a five-month high, on prospects rising industrial output will help the world’s second- biggest economy meet its growth target this year.

Bank of China 17% Profit Jump Tops Estimates on Margins – Bloomberg – Profit growth accelerated to the fastest pace in more than a year as China’s largest banks resisted pressure from the government to offer discounts on loans, protecting their margins after the central bank widened the band for lending rates. Bank of China may struggle to maintain earnings momentum as a continued slowdown pushes borrowers to default.

Capital outflows: The flight of the renminbi | The Economist– The capital flight identified by GFI does not pose a macroeconomic danger. In some respects, its calculations imply that China’s external balances are even stronger than official figures suggest: for every dollar of capital flight their method posits, it also uncovers one extra dollar of hidden export earnings (or one less dollar spent on imports than officially reported). This flight may not be a threat to macroeconomic stability, but it is surely a sign China’s new leaders should heed

China rare earths producer suspends output – Businessweek – State-owned Baotou Steel Rare Earth (Group) Hi-tech Co. said in a statement released through the Shanghai Stock Exchange that it suspended production Tuesday to promote “healthy development” of rare earths prices. It gave no indication when production would resume and phone calls to the company on Thursday were not answered.

China Leading Index Rises at Slower Pace, Conference Board Says – Bloomberg – A leading index for China’s economy rose at a slower pace in September, damping signs of a growth rebound in the world’s second-biggest economy. The gauge increased 0.3 percent from August to 241.2, the Conference Board, a New York-based research group, said in a statement today, citing a preliminary reading. That compared with a 1.7 percent gain in the previous month.



Bo Xilai’s post as national legislator terminated |Politics | – The Standing Committee of the 11th National People’s Congress (NPC) on Friday announced the termination of Bo Xilai’s post as the NPC deputy.

The man who might have been king – The demise of Bo Xilai has opened multiple cleavages in the party, writes John Garnaut.

Bo Xilai’s family complains of Chinese government obstacles to his defense – The Washington Post – Bo’s immediate family has been warned not to hire any lawyers, according to two people close to his wife’s family. And two lawyers retained by his mother-in-law on his behalf have been unable to visit the formerly powerful party chief, they said, speaking on the condition of anonymity for fear of government reprisal.

Redrawing the Law’s Bottom Line –  Hu Shuli’s Caixin editorial this week. Hope based on inside knowledge, or wishful thinking?//Following the upcoming congress, we should expect the central government to continue to propel economic, political, cultural and social reforms, in which judicial reform will play a crucial role.

China’s new leadership: Vaunting the best, fearing the worst | The Economist – . The question is, what does Mr Xi think? Will he heed the right’s demands for more rapid political and economic liberalisation, maintain Mr Hu’s ultra-cautious approach, or even take up Mr Bo’s mantle as a champion of the left?

China’s year of political surprises not over yet | Reuters – “I think we will have surprises this time … Negotiation is a very complicated process,” said Cheng Li, an expert on Chinese politics at the Brookings Institution think-tank in Washington. “Outsiders have no idea. We probably have only 20 percent of an idea of what’s going on. There will be some last-minute changes, possibly even to the Standing Committee.”

Banyan: Embarrassed meritocrats | The Economist– Daniel Bell of Tsinghua University in Beijing, co-editor of “A Confucian Constitutional Order: How China’s Ancient Past Can Shape Its Political Future”. Mr Bell believes that the party’s emphasis has shifted to “the task of good governance led by able and virtuous political leaders.” The scholar-official, it seems, stands in for the gentleman from Whitehall who thought he knew best. The party recruits the best and the brightest, says Mr Bell, and the vetting process for the promotion of top leaders is impressively objective and rigorous, though he admits scope for improvement, especially through more transparency. But to believe virtue always floats to the top in a system such as China’s is fantasy.

Xi Jinping: The man who must change China | The Economist – The Chinese Communist Party has a powerful story to tell. Despite its many faults, it has created wealth and hope that an older generation would have found unimaginable. Bold reform would create a surge of popular goodwill towards the party from ordinary Chinese people…Mr Xi comes at a crucial moment for China, when hardliners still deny the need for political change and insist that the state can put down dissent with force. For everyone else, too, Mr Xi’s choice will weigh heavily. The world has much more to fear from a weak, unstable China than from a strong one.

The Political Mapping of China’s Tobacco Industry and Anti-Smoking Campaign | Brookings Institution – In his latest monograph Cheng Li drafts a political map of China’s tobacco industry and its main stakeholders essential for the next phase of the campaign. On October 25, Li will discuss the key findings in his monograph at Brookings.

China Leader’s Job at Odds With Tobacco Ties, Brookings Says – Bloomberg – Xinwei Yuekan had a big story about this a couple of issues ago// The brother of Chinese Vice Premier Li Keqiang, who oversees public health, should be removed from his post as a top official in China’s state-owned tobacco monopoly to avoid conflicts of interest, a report published by the Washington-based Brookings Institution said.

Fei Chang Dao: Central Propaganda Department Orders News Websites to Support 18th Party Congress –



China dismisses reports about anti-satellite missile test – Xinhua | – Chinese Defense Ministry spokesman Yang Yujun has dismissed media reports about a planned test launch of an anti-satellite missile in November.

Top Military Command is Reshuffled – Caixin – Yin Fanglong, 58, was promoted to deputy chief of the General Political Department. In April, he published an article at the official People’s Daily, which listed a number of ideas “promoted by hostile forces from the West” that will “damage the leadership of party.” The ideas cited by Yin included de-partyization, de-politicization and the nationalization of the PLA. Zhao Keshi, a 64-year-old Hebei Province native is the new head of the General Logistics Department. He will work closely with Liu Yuan, the political commissar and son of former Chinese President Liu Shaoqi.

BBC News – Tokyo governor Shintaro Ishihara quits to form new party – Tokyo’s governor Shintaro Ishihara is resigning to form a new national political party, ahead of expected general elections in Japan.



Apple: bucking the China doom and gloom | beyondbrics – Full-year country revenue totalled $23.8bn, a 79 per cent increase from the $13.3bn earned in 2011. China now accounts for 15 per cent of Apple’s total sales, making it the iPhone maker’s second biggest market after the US.

Wang Li of momotech tells the secret of hooking up strangers | Agenda  – With  10  million users gained within a year, momo helps smartphone users to make friends (or any other kind of connection) with strangers. Wang Li, Operations Director of momotech, told Agenda how momo does the trick.



Kindergarten teacher’s child abuse photo album sparks public fury | Ministry of Tofu 豆腐部 – A young female kindergarten teacher pulls a little boy off the floor by his years. She keeps smiling, while the boy are crying out loud, his ears twisted out of shape. This was the most circulated image on Chinese social media yesterday.

Teachers Detained Amid Student Abuse Controversy in China – China Real Time Report – WSJ – hinese police detained two teachers in China’s coastal Zhejiang province after photos in which the pair appeared to have physically abused students were posted online amid already simmering anger over child abuse in schools.

Beijing and Shanghai Natives Unite to Defend Their Children’s Privilege | Tea Leaf Nation – Many provincial capitals, including Guangzhou, are drawing up plans to allow children of migrant workers to take the exams, but Beijing and Shanghai, the two cities with the best educational resources and some of the lowest test-score cutoffs in China, have held out.



BBC News – Tibetan mountain finch rediscovered after 80 years –



China Exclusive: China cracks down on counterfeit liquor – Xinhua |– Du Guangyi, vice general manager of Kweichow Moutai Co., Ltd., said the company only provides a limited quantity of “tegong” liquor to a few central government organizations for special occasions. But these ‘tegong’ liquors are not supposed to circulate in the market. Almost all ‘tegong’ Moutai liquor sold on the market is counterfeited,” Du said.

Introducing Chengdu Places | Chengdu Living – From the beginning the idea was not to create a listing of each and every location in Chengdu, but to create a very high quality listing of the places in Chengdu that everyone should know about–Chengdu Places | Discover the Sichuan capital –



Lin Shu,Inc.: Translation and the Making of Modern Chinese Culture: Michael Gibbs Hill: Amazon  Lin Shu, Inc. crosses the fields of literary studies, intellectual history, and print culture, offering new ways to understand the stakes of translation in China and beyond. With rich detail and lively prose, Michael Gibbs Hill shows how Lin Shu (1852-1924) rose from obscurity to become China’s leading translator of Western fiction at the beginning of the twentieth century. Well before Ezra Pound’s and Bertolt Brecht’s “inventions” of China revolutionized poetry and theater, Lin Shu and his assistants–who did, in fact, know languages like English and French–had already given many Chinese readers their first taste of fiction from the United States, France, and England. After passing through Lin Shu’s “factory of writing,” classic novels like Uncle Tom’s Cabin and Oliver Twist spoke with new meaning for audiences concerned with the tumultuous social and political change facing China.

The best way to see this daily post is to subscribe by email. You can also follow me on Twitter @niubi or Sina Weibo @billbishop.  And if you like this service, please support Sinocism