The Sinocism China Newsletter For 11.08.12

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

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The 18th Party Congress is now underway. You can follow the official reports in English here and Chinese here.

Foreign Policy has published China Decides, an excellent collection of essays about the leadership transition.

The New York Times looks at Jiang Zemin’s role in the transition, writing in Jiang Zemin, Ex-Leader of China, Reasserting Sway that:

Mr. Jiang’s goal, those insiders say, appears to be to put China back on a path toward market-oriented economic policies that he and his allies argue stagnated under a decade of cautious leadership by Mr. Hu, a colorless party leader who favored more traditional socialist programs and allowed gargantuan state-owned companies to amass greater wealth and influence. Many see Mr. Jiang, who brought China into the World Trade Organization and rebuilt ties to the United States after a breakdown in 1989, as favoring deeper ties to the West and more opportunities for China’s private sector.

Loyal readers of Sinocism will remember that this service first noted Jiang’s “return” in a post in April.

My Internet is still having lots of issues. It is not just me, as the Wall Street explains in Internet Disruptions Rise as China Leadership Transition Nears. No, no New York Times, no Twitter, no Youtube, no Facebook, and now barely the global Internet. And yet people still think the RMB can become a reserve currency?

For fun, check out this electoral map of China that Sinocism’s data team created.

Today’s links:


China’s Economic Growth at Stake as Communist Party Meets – Bloomberg – but early signaling can have powerful affect on expectations and sentiment// Any policy moves will have to wait for the new leadership under Xi to consolidate its power, said Tao Dong, head of Asia economics excluding Japan at Credit Suisse Group AG in Hong Kong. “If the markets hope that structural changes could take place soon after March next year, when the new administration comes in, my advice is ‘don’t hold your breath,’” he said.

经济参考网-铁路基建投资又迎新高潮 明年将超5160亿 四大渠道力保资金到位 – 500B+ RMB in railway investment planned for 2012

China Economic Watch | Is China becoming a Debtors Prison? – In spite of these improvements, it is clear that high corporate debt levels will make China’s task of rebalancing more complicated.

Weighing Risks amid a Wealth Management Boom – Caixin – Is China’s wealth management business a booming profit volcano for investors, or just another smoke-and-mirrors pyramid scheme? It’s a question dividing the nation’s bankers and banking regulators as investors of all kinds pour cash into bank-sponsored wealth management products.

Cheers, Jeers for a Not-Your-Daddy’s PE Fund -Caixin – But so far the freeze has not affected a maverick PE fund backed by a team of young Chinese financiers whose unusual strategy has turned heads and, in some cases, enraged competitors. Jiuding Capital, with about 20 billion yuan under management, is doing well in spite of angry rivals and critics who say the fund’s executives are breaking rules, hurting the market and setting themselves up for a big fall given the lack of IPO demand.

Lardy vs. Pettis: Debating China’s Economic Future, Round 2 – China Real Time Report – WSJ – Nice dig at Pettis’ penchant for simplistic equations. Pettis was on Bloomberg TV this morning and said that best case China averages 3% GDP growth over the next decade. Has anyone tracked the accuracy of his predictions over the years? He makes a compelling if depressing case//Third, your analysis suggests that the outcome of rebalancing is foreordained to be a collapse of economic growth. But the future is not entirely determined by arithmetic. This ignores both the underlying dynamics of the Chinese economy and the scope that government policy has to encourage more rapid growth of private consumption expenditure.

Facing Protests, China’s Business Investment May Be Cooling – – But a few hints have surfaced that sentiment for reining in the excessive reliance on business investment might be strengthening even among those segments of the Chinese elite — executives at China’s big state-owned enterprises — that benefit the most from the status quo.



China Said to Suspect Neil Heywood Was a Spy – – who else is on that watch list?// BEIJING — China’s external intelligence agency, the Ministry of State Security, suspected a British businessman of being a spy before his murder last year at the hands of a senior politician’s wife, according to people with close ties to Chinese state security.

From Reform Blues to Blueprint – Caixin–Hu Shuli – Crucially, a reform blueprint – so necessary to efforts to direct and co-ordinate change – must not be held hostage by interest groups. Thus, the government should consider re-establishing an agency with sufficient authority to set and carry out policies, and monitor their implementation.  In fact, the authorities should grasp the time window for reform wisely. And the window of opportunity to act, which has just begun with the opening of the party congress, will last till the third plenary session of the 18th Central Committee next year. Our leaders would be wise to make full use of it.

Hu Jintao’s Legacy – By Kerry Brown | Foreign Policy – Will China’s outgoing leader be the man who introduced the world to a new superpower, or the man who destroyed it? It’s too early to tell.

Xi Jinping’s Challenge – By Kenneth Lieberthal | Foreign Policy – Thus, there are no simple solutions to China’s challenges, almost all of which are more difficult than those confronting the United States. In the United States, the core issue is one of gaining a political consensus on federal revenues and expenditures. For China, the challenges require major structural overhaul of the economy and wide-ranging changes in the political system. The complexity of both the problem and the necessary corrective measures are massively more daunting in Beijing than in Washington.

Inside China’s Smoke-Filled Room-Foreign Policy In early November, Hong Kong newspapers and overseas Chinese websites published their predictions on the lineup of the new Standing Committee. The list is the same as what my Beijing sources say (and the overseas Chinese websites correctly predicted the identities of the Standing Committee members in 2007): Vice President Xi Jinping, 59; Executive Vice Premier Li Keqiang, 57; vice premier and Chongqing party secretary Zhang Dejiang, 66; Shanghai party secretary Yu Zhengsheng, 67; Propaganda Department Director Liu Yunshan, 65; Vice Premier Wang Qishan, 64; and Tianjin party secretary Zhang Gaoli, 66.

CHINASCOPE – China’s Economic and Social Conflicts Nearing a Crisis – Caijing Magazine recently interviewed Professor Wu Jinglian, a senior research fellow at the Development Research Centre of the State Council of the People’s Republic of China. During the interview, he stated that China’s economic and social conflicts have reached a critical point and that China must press forward with further reform to establish and improve a market economy that is based on competition. He also criticized China because it has, in recent years, strengthened the government’s and the state-owned enterprises’ (SOEs) “control power.” The following are excerpts from the interview.

CHINASCOPE – Beijing Mobilizes 1.4 Million Volunteers to Maintain Stability for the 18th Party Congress – According to the article, 1.4 million volunteers have been placed in charge of checking IDs, Internet control, and other stability maintenance work. Police officers patrol Tiananmen Square and thoroughly examining people’s ID cards.

Reform or Perish – By Michael Pettis | Foreign Policy – very surprised western media seems to have ignored all the discussion around the forthcoming income distribution reform plan…//To spur growth in household consumption, Beijing needs to redistribute wealth and spur the growth of household income. The former is always hard to do, and if economic activity slows with the reduction in investment growth rates, as it must, the latter will also be difficult.

China wrestles with democratic reform – – Another princeling, as the progeny of senior officials are known, puts it more bluntly: “The best time for China is over and the entire system needs to be overhauled.” This son of a former government minister says the party’s authority is “declining at the same time that the economic backdrop has become much worse”. He added that without new rules of the game, Chinese politics would “descend into chaos”.

Deng’s China ––Ezra Vogel – Where the next generations of leaders can draw a lesson is in Deng’s openness to risk and change, in his rejection of xenophobia, in his pragmatic view of the world, and in his support for meritocracy over privilege.

China Pundit Explains The Biggest Priorities Of China’s New Leaders – Business Insider – In a Q&A with Goldman Sachs’ Allison Nathan, Cheng Li, China scholar and Director of Research at the Brookings Institute, said the leadership handover will be watched very carefully for three key reasons.

Book preferences hint at China’s will for mild reform – Xinhua |– “The Old Regime and the Revolution,” an 1856 treatise written by French political thinker Alexis de Tocqueville, is the latest work to be scrutinized by netizens after rumors spread that the book is among those read by China’s central leaders.The previous favorite was Marcus Aurelius’s “Meditation,” which became a bestseller after Premier Wen Jiabao quoted it twice during his second term.

Gov’ts, NGOs Increasingly Cooperating to Solve Social Problems – Caixin – When officials lugging HIV-testing equipment raided a gay bar in the western province of Ningxia, workers at a local NGO knew that their partnership with the government was off to a bad start. But since that raid several years ago, community workers say that while several kinks still need to be ironed out, stronger government ties are helping non-profit organizations get their services to local communities.

Lawyer Defending Shandong Farmers Is Arrested – Caixin – A Shandong lawyer who represents farmers who have lost their land was arrested on November 6 because police say he was extorting the government. The Public Security Bureau in Jinan, in the eastern province of Shandong, confirmed the arrest of Shu Xiangxin on Sina Weibo, the Chinese version of Twitter.

Curiosity and Indifference Toward U.S. Election – China Digital Times (CDT) – As it became clear that President Obama had been re-elected Tuesday night, Chinese netizens responded quickly online, often comparing the U.S. political process to their own.



China Welcomes Obama’s Win, but Hopes for More Balanced Ties With the U.S. – – In China, the government welcomed Mr. Obama’s victory, but woven into the warm words from outgoing President Hu Jintao was a warning that the United States should be a more cooperative partner as China, even with a slowing economy, continues to rise in wealth and power.

U.S. trade panel approves five-year duties on China solar products | Reuters – The United States gave final approval on Wednesday to duties on billions of dollars of solar-energy products from China for the next five years, protecting U.S. producers against lower-priced imports and raising fears of Chinese retaliation.

Beijing’s Senkaku goal: Sub ‘safe haven’ in South China Sea | The Japan Times Online – Kawamura believes Beijing is trying to turn the South China Sea into “a safe haven” for its nuclear-powered submarines, which are armed with ballistic missiles that can reach the United States. For that purpose, seizing the Senkakus — just 190 km east of Taiwan and close to the northern gateway to the South China Sea — is indispensable, Kawamura says.



互联网人士缘何扎堆做手机?_财经频道_一财网 – lemming effect..several internet execs have quit senior jobs to try to copy what lei jun has done with his startup mobile firm xiaomi

“恐龙病”蔓延 李彦宏“整风”百度_股票频道_一财网 – Qihoo has shaken Baidu, Robin sends letter to Baidu employees warning of complaceny..will he launch a rectification campaign?

ChinaCache Releases Third Quarter 2012 China Internet Connection Speed Rankings – these days a pigeon is faster// it appears Beijing’s 3rd Quarter average speed of a little less than 2.5 Mb/s is significantly less than its performance on the previous report, which indicated that Beijing had an average speed of a little over 3.5 Mb/s.

Sony PlayStation certificate sparks talk China may lift console ban | Reuters – reports of lifting of ban premature//”The Ministry of Culture has the regulatory authority over the console segment and is the sole organization that can revoke the ban,” said Lisa Cosmas Hanson, managing partner of U.S.-based video games consultancy Niko Partners.



China Fights to Go Beyond Organs Harvested From Executed Prisoners – – The official, Wang Haibo, said there is now a “consensus among China’s transplant community that the new system will relinquish the reliance on organs from executed convicts.”



“过路收费”模式终结 中航信垄断艰难破局_股票频道_一财网



Chinese sci-fi saga to have English edition in 2013 – Xinhua | – BEIJING, Nov. 7 (Xinhua) — The Three Body trilogy, one of the most popular Chinese-language science fiction novels, will be published in English next year, according to the publishing company on Wednesday.Three translators, Ken Liu, Joel Martinsen and Eric Abrahamsen, will carry out the trilogy’s translations respectively under contracts with China Educational Publications Import & Export Corporation Ltd (CEPIT).

Spread the word by forwarding this email to your friends, follow me on Twitter @Niubi or Sina Weibo @Billbishopsupport Sinocism.

3 thoughts on “The Sinocism China Newsletter For 11.08.12

  1. You seriously don’t have a VPN/VPS? If your VPN services don’t work, get a friend who can do networking/linux and get a cheap Japanese VPS service and configure OpenVPN to run from there. is $25 a month, and has been reliable for me, is about $15 a month for a very good VPS, but you need someone with Japanese residency to operate as a proxy.

    VPSes tend to work better than VPNs; if the government wants to run IP filtering they’re more liable to go after large commercial services. VPSes for personal cloud services are less likely to trigger their ire.

    • Of course I do. Right now my ISP is killing VPN connections within five minutes and then killing all Internet access for at least ten minutes. Started Tuesday evening

      • Weird, I have someone in Beijing and they’re not reporting any issues with this; although the fact that they’re using a personal VPN hosted on a personal server contributes to this; I don’t think the government is going to kill VPN connections to VPN servers with only one or two users.

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