The Sinocism China Newsletter For 11.07.12

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

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Just links today, lots of Internet issues for me in Beijing since last night. Sinocism may be degraded over the next week if the Internet problems are related to enhanced Internet filtering during the 18th Party Congress. Apologies.


Chinese system undergoes stealthy reform – –  question the pundits who say China has not pushed any financial reforms or tackled any special interests// China’s financial system has undergone a significant transformation over the past few months, but it has happened so quietly that it has remained off the radar for many investors.The big change is the way in which the central bank conducts monetary policy. The People’s Bank of China has dramatically ramped up its use of open market operations, relying almost exclusively on bond repurchase agreements to inject cash into the economy.

Shandong Pilots Restructuring Program to Safeguard Teetering Steel Industry-Caijing – According to the plan announced last Thursday, the government will create an “oversized” steel group, as well as five regional conglomerates in cities of Zibo, Weifang, Laiwu, Linyi and Binzhou by the year 2015.It also targets total steel production in the province at no more than 50 million tonnes three years later as it pushes companies to cut excess capacity to return to profitability.

The Chinese Credit Bubble – Full Frontal | ZeroHedge – None other than Goldman Sachs is concerned by this absolute number, which in recent years has exploded to all time highs:The rapid rise of corporate leverage to 130% of GDP in 2011 – one of the highest corporate leverage ratios in the world – is concerning. This high leverage is the result of substantial investment in the manufacturing sector since 2008, leading to over-capacity in many sectors such as solar energy, steel and ship building. It is therefore critical for the new leadership to pursue reforms that not only support the private sector, but also consumption more broadly, in order to utilize this capacity; the alternative would likely prove negative for sectors, banks, and ultimately, the economy.

Banks in Zhejiang Burdened with a New Crop of NPLs-Caijing – New NPLs hit more than 30 billion yuan in Zhejiang, and 83 percent of them are in banks in cities of Hangzhou,Ningbo and Wenzhou.



Briton murdered in China fed tips to British intelligence | Reuters  If MSS knew about this then Bo Xilai probably never had a real shot at the 18th PBSC. Likely confirms what Chinese security thinks about foreigners in China, especially those with good Chinese. And who is Jeremy Page’s source who had access to the transcript of Wang Lijun’s visit to the US consulate? Did the US share a copy with the Brits? And if Gu Kallai really told Wang “I killed a spy”, is there more to the coverup of her case than even the more conspiracy minded thought?// The Wall Street Journal reported (paywalled) on Tuesday that Heywood’s contact in MI6 had once described him as “useful.” The newspaper said Heywood, who acted as a “freelance” consultant advising companies and individuals on business in China, for about a year had provided British intelligence with information on intrigue inside the family of Bo Xilai, a Chinese Communist Party boss whose spectacular downfall earlier this year caused political upheaval.

China’s Hu seeks to exert influence long after he leaves power – The Washington Post– But one person with access to senior Chinese leaders warned that it is “not entirely fair to say this is a fight between two men.” “It would also be a mistake to interpret the competition as personal hostility or disagreement,” the person said. “This is primarily a battle over personnel.”A former party official agreed.

Exclusive: China leaders consider internal democratic reform | Reuters – China’s outgoing leader and his likely successor are pushing the ruling Communist Party to adopt a more democratic process this month for choosing a new leadership, sources said, in an attempt to boost its flagging legitimacy in the eyes of the public.

十八大差额选举更上层楼 常委名单“集体”敲定_多维新闻网 – Duowei also reported on “internal democratic reform”, I think a few hours before Reuters. given the overlap in some recent Reuters and Duowei coverage have they found some of the same, good sources?// 此外,多维新闻也从多个渠道获悉,对于中共已基本定型的常委人选名单,在中共党内仍有少量不同声音。基于此,中共高层已在内部采用“集体投票”的方式最终敲定常委7人建议人选名单。该名单将在十八大上之后提请十八届中央委员会第一次会议(即十八届一中全会)进行选举、通过和决定。

Liberals in China Look to Guangdong’s Party Chief, Wang Yang –– “Wang Yang has become the main receptacle for the expectations and hopes of China’s reformers,” said Xiao Bin, a public affairs professor at Sun Yat-sen University here in Guangzhou, the provincial capital.。。A lifelong party stalwart and a current member of the 25-seat Politburo, Mr. Wang would not be mistaken for a Western-style liberal. He does not call for free elections, and he rarely strays far from the agenda set by Beijing. Even if he is something of a political chameleon, Mr. Wang has become a torchbearer for advocates of free-market economics and quasi-enlightened governance

China CPC Membership Swells to 82.6Mln-Caijing – Twenty-five percent of the 82.6 million CPC members are under the age of 35 and 38.6% of them have a junior college degree or above, statistics showed.

Collection of new-appointed provincial Party chiefs – People’s Daily Online – In this adjustment of provincial party leaders, a lot of vigorous and experienced officials with high degrees are promoted to provincial leaders, which has attracted great attention of Internet users. The following are the resumes of all the new-appointed leaders People’s Daily Online has collected for the reference of netizens.

Note to Media: High-profile Criminal Cases Are Not Representative of China’s Judicial System | China Hearsay – I’ll further stipulate that China does not, in fact, have a completely independent judiciary and that political interference is common in certain types of cases. Again, my point is that these cases do not represent the vast majority of civil or criminal actions in China, and therefore using them to make a general assertion about rule of law in China is inaccurate and misleading.

Defense Lawyer Seeks to Clear His Name – and Accuser’s – Caixin – Amid a wave of appeals seeking to overturn verdicts handed out during an anti-mafia campaign in Chongqing is one curious case: a defense lawyer is seeking to not only clear his name, but that of a former client whose testimony sent him to jail. On November 2, Beijing lawyer Li Zhuang confirmed on Sina Weibo, China’s version of Twitter, that he would represent Gong Gangmo in his appeal. Gong’s testimony that Li coached him into making false claims led to the lawyer being jailed for 18 months.

山东律师舒向新被控“敲诈政府”遭刑拘(更新)_政经频道_财新网 – 自述代理征地拆迁案得罪地方政府,警方指控其涉嫌敲诈勒索罪

Fei Chang Dao: Reports About “Watch Official” Li Dejin’s Censorship Get Censored –



China explains abstention over Japan-led nuclear disarmament resolution – Xinhua |– He said China upholds that nuclear disarmament should follow the principles of maintaining global strategic stability and undiminished security for all. Certain parts of the resolution go beyond the final document approved in the 2010 Review Conference on Nuclear Non-proliferation Treaty, he added, without specifying details.

U.S. and Japan Begin Huge Military Drill, Minus Key Part – – But the Japanese government canceled a joint amphibious landing on a remote island in what experts described as an effort not to provoke China, which is locked in an emotional dispute with Japan over control of uninhabited islands near Okinawa in the East China Sea.

The Jamestown Foundation: Professionalism and Factionalism in the PLA Leadership Selection – Given that factional loyalty is a key consideration behind the on-going personnel movements, it is perhaps not surprising that not as much priority has been given to weeding out corruption in the military. This is despite the fact that General Liu Yuan–one of the high-profile losers in the promotion sweepstakes–was praised highly for initiating an anti-graft campaign within the GLD early this year. Senior Colonel Liu Mingfu, a professor at the National Defense University and a respected military commentator, pointed out recently that “corrupt generals” were an even more serious problem than “corrupt cadres.”

The Jamestown Foundation: PLA Personnel Shifts Highlight Intelligence’s Growing Military Role – The latest round of top-level People’s Liberation Army (PLA) personnel selections reinforces an emerging trend in how the Chinese military manages intelligence. First, ever since the departure of General Xiong Guangkai in December 2005, the PLA has started rotating operational staff through the deputy chief of the general staff slot for intelligence and foreign affairs. Second, intelligence experience seems to be taking on greater significance in the PLA writ large as a small diaspora of intelligence personnel have taken up posts outside their system.

The Jamestown Foundation: Shifts in Beijing’s Afghan Policy: A View From the Ground – It thus seems likely that China’s growing focus on Afghanistan is at least in part out of recognition that it can no longer simply abrogate its strategy toward Kabul to Islamabad—a default setting Beijing previously employed. As the security situation in Afghanistan (and Pakistan) continues to muddle along in a negative direction, Beijing now has realized that it must do more to stabilize its restive neighbor.

After Year of Talks, Sichuan Miner Still No Closer to Greenland Deal – – Sichuan Xinye Mining Investment Co. was still negotiating with London Mining and Greenland’s state resource department over issues including employment of Chinese workers at the site, the firm’s supervisory board chairman Tan Qizhong said on November 5.The state-owned firm has shown interest in forming a partnership with London Mining to jointly develop its rights to an iron ore deposit in the large Arctic island’s southwestern Isua region. The reserves are known as Greenland’s largest of its kind.

Expats awarded for charity work-Shenzhen Daily – MARK OKOTH OBAMA NDESANDJO, half-brother of U.S. President Barack Obama, was recognized at the 20th anniversary of the Shenzhen Social Welfare Center on Friday, for teaching orphans at the center to play the piano over the past 10 years.



China’s digital revolution – Telegraph – ‘Weibo has created the biggest social debate ever in Chinese history,’ Michael Anti, a leading blogger and political commentator, told me. ‘For the first time ever there is one platform to which everyone can have easy access. For the first time, Chinese people are talking to each other.’

Google Maps App is Lost in China, Loses Half Market Share in Q3 [CHART] – It seems clear in which direction Google Maps is heading in China. Down. New stats for Q3 2012 for mobile maps app market share in the country show Google Maps getting even more lost amidst strengthening local competition, losing nearly half its market share and slipping to sixth position – that’s down from second place in Q2.

Trailer for Wong Kar-Wai’s ‘The Grandmasters’ Hits Web – China Real Time Report – WSJ – The movie — scheduled for a mid-December release — stars Tony Leung as Ip Man, the martial-arts master who taught the form of kung fu known as Wing Chun. He was born in China’s Guangdong province in 1893 and died in Hong Kong in 1972, and Bruce Lee was among his students. “The Grandmasters” also stars Zhang Ziyi and Chang Chen.

The FT in play | Felix Salmon – But there are two huge global news companies which are desperate to make inroads in China and other fast-growing countries: they have an enormous strategic interest in reaching the next generation of global technocrats, and they know they can’t do that with terminals alone. They need something which can travel more easily, something with a first-rate reputation: a foot in the door, if you will. To Bloomberg and Thomson Reuters, the value of the FT is not in its profitability, but rather in its reach and its reputation. It’s one of the very few possible ways of reaching the people who will be running the world in 10 or 20 or 30 years’ time — no matter what country they currently live in



Poll: wealth gap greatest challenge for China’s growth – Xinhua | – More than 75 percent of respondents said the wealth gap will be the biggest problem for China’s development in the next 10 years, followed by the abuse of power (59.4 percent), entrenched interest groups (52.8 percent), ecological and environmental degradation (52.6 percent) and infringements on the rights of disadvantaged groups (50.3 percent).



Central Gov’t Subsidizes Shale Gas Companies – Caixin – Companies involved in developing shale gas will get a central government subsidy of 0.4 yuan per cubic meter from this year until the end of 2015, two government agencies said on November 6.The subsidy aims to support the extraction of shale gas, the Ministry of Finance and National Energy Administration (NEA) said in a statement.

Safety Nets for Fishing Nets – Caixin – There’s a gulf between the fish catches of thirty years ago and today around the world. But in places like the Bohai Sea, the Zhoushan Islands and the Beibu Gulf, a fishing industry reeling in lighter and lighter nets has yet to reach for sustainable production labeling.It isn’t just the dearth of wild caught fish that has lead to environmental issues, but a massive boom in farmed fish. As the world’s largest fish consumer and producer, the country accounts for roughly 60 percent of the world’s total fish production.



The Best China Tourism Video Ever? Zhangjiajie does Gangnam Style | Sinocism – Here is the video via Sina, complete with a cameo around minute 2 by Zheng Yaping (郑亚平), the 58 year old deputy director of the Zhangjiajie Municipal Tourism Bureau, as a dancing straw bird in an elevator:

Chinese Village, Global Market: New Collectives and Rural Development (China in Transformation): Tony Saich, Biliang Hu:Amazon – This book is a story of one village, Yantian, and its remarkable economic and social transformation. The village sits in the Pearl River Delta, the engine of China’s emergence as the hub of global manufacturing and production. The village’s success relied on the creation of new economic collectives, its ability to leverage networks, and its proximity to Hong Kong to transform forever the formerly sleepy rural area. The result of almost 20 years of field work by the authors, Chinese Village, Global Market shows how outcomes are shaped by a number of factors such as path dependence, social structures, economic resources and local entrepreneurship.
Eight Questions: Tony Saich, ‘Chinese Village, Global Market’ – China Real Time Report – WSJ– The sheer scale of China’s change over the last three decades tends to overwhelm attempts at analysis. One way to cut through the fog is to focus on a specific location. In their new book, “Chinese Village, Global Market: New Collectives and Rural Development,” that’s exactly what Harvard’s Tony Saich and Beijing Normal’s Biliang Hu set out to do.