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The New York Times has a very interesting story of a Ferrari’s role in Chinese politics. In How Crash Cover-Up Altered China’s Succession Jonathan Ansfield writes about Ling Gu’s death by Ferrari and how his father’s actions weakened Hu Jintao:
By September, party insiders said, Mr. Hu was so strained by the Ling affair and the leadership negotiations that he seemed resigned to yielding power. As Mr. Hu’s influence faded, Mr. Xi began taking charge of military affairs, including a group coordinating China’s response to the escalating row with Japan over disputed islands.
Perhaps China should consider banning Ferraris, which are clearly tools of hostile foreign forces.
Overseas Chinese media are running with some crazy rumors about further problems for Ling Jihua. 明鏡新聞網: 明鏡獨家：令計劃涉謀殺竊國，政治風暴快到 and 明鏡新聞網
Reuters has dropped a bomb on Huawei. How foreign firms tried to sell spy gear to Iran is not going to help Huawei with its overseas lobbying efforts:
Documents seen by Reuters show that a partner of China’s Huawei Technologies Co Ltd offered to sell a Huawei-developed “Lawful Interception Solution” to MobinNet, Iran’s first nationwide wireless broadband provider, just as MobinNet was preparing to launch in 2010.
The system’s capabilities included “supporting the special requirements from security agencies to monitor in real time the communication traffic between subscribers,” according to a proposal by Huawei’s Chinese partner seen by Reuters.
Huawei also gave MobinNet a PowerPoint marketing presentation on a system that features “deep packet inspection” – a powerful and potentially intrusive technology that can read and analyze “packets” of data that travel across the Internet. Internet service providers use DPI to guard against cyber attacks and improve network efficiency, but it also can be used to block websites, track internet users and reconstruct email messages…
Although Huawei maintains it doesn’t sell any filtering technologies, its presentation given to MobinNet, marked confidential, repeatedly says its “DPI Solution” features “URL filtering,” which can be used to block specific websites. The presentation also cites a number of customer “success” case studies – including in Britain, Russia, Colombia, and China – where it says telecommunication operators were using its system to filter websites.
If this is true, expect some of Huawei’s foreign consultants to resign.
Congratulations to historian Stephen Platt for winning the prestigious Cundill Prize for his excellent book Autumn in the Heavenly Kingdom: China, the West, and the Epic Story of the Taiping Civil War Stephen R. Platt (Amazon).
Today’s links:
BUSINESS AND ECONOMY
Analysis: China diners say more than economy hurting Yum’s KFC | Reuters – good to see this, too many pundits/analysts jump of company specific news to support their broader macro-theses without actually understanding the company-specific issues// A slowdown in China’s economy is not the only strain on Kentucky Fried Chicken’s business in the country, where competition is getting tougher and customers are getting pickier.
SEC Details Friction with Chinese Counterpart Over Audits – China Real Time Report – WSJ no way SEC can compromise now// In court papers filed late Monday, the SEC said that since 2009 it had sent its Chinese counterpart, the China Securities Regulatory Commission, 21 separate requests for assistance in connection with 16 different investigations and hadn’t received any of the requested audit papers or any meaningful assistance. Additionally, the agency said that long-running negotiations with the CSRC to establish a framework for information sharing had gone nowhere.
China listings may soon flee U.S., expert says – Asia Stocks to Watch – MarketWatch– and may be a fee boon for the bankers, lawyers and accountants// Paul Gillis, a financial author and professor of accounting at Peking University, believes the window to prevent a worst-case scenario of wholescale delistings of Chinese firms in the U.S. is rapidly narrowing.He puts the odds of China companies having to pull up stakes from U.S. exchanges at 80%. In June he assigned a 20% probability of such an outcome, while seeing 70% odds that the “can is kicked down the road,” and U.S. and Chinese regulators find some way to defer the issue.
INTERVIEW: SEC probe will see more China firms list at home | Video | Reuters.com – Dec. 5 – Chinese firms may shun U.S. listings as regulators in Washington and Beijing bicker over the opening of books to U.S. audits, says China Accounting Blog author Paul Gillis.
Bankers See Fees Fade as China Era of Jumbo IPOs Draws to Close – Bloomberg – The lack of megadeals comes amid a pronounced slump for IPOs in Hong Kong of any size. The value of initial share sales has fallen to $6.6 billion so far in 2012 from $58 billion in 2010, putting the city on pace for its worst year since at least 2003, when companies raised $7.5 billion there, according to data compiled by Bloomberg.
China Developers Chase Wealthy Locals Abroad Amid Curbs at Home – Bloomberg – 2nd time bloomberg has mentioned the xinyuan deal in brooklyn without mention sam zell’s investment in xinyuan// Diversification would bring China’s developers closer in line with Asian peers.Among the 24 companies in Shanghai Stock Exchange Property Index (SHPROP), only Beijing-based China State Construction Engineering Corp. (601668) earns revenue outside of China, and even then it’s just 5.8 percent of total sales, according to data compiled by Bloomberg from company statements. All revenue from the rest came from China, according to their annual filings last year.
China Tackles Land Seizures – WSJ.com – little-noticed perhaps among western reporters..not little noticed in chinese news or social media..or sinocism// In a little-noticed move, a meeting of China’s State Council, the top government decision-making body, last week backed an amendment to the land-management law. Details remain sketchy, and the law is still to be approved by China’s National People’s Congress. But experts say that the change will make it more difficult for local officials to requisition land, and raise the level of compensation farmers receive when land is taken in the public interest.
明年政策取向继续“宽财政稳货币” 新华社——经济参考网 – 货币政策倾向中性，M2增速13%至14%；财政政策略为积极，
人民日报-政策要向实体经济倾斜（经济聚焦·十八大热词·
兰州最后一宗体育用地消失之谜|兰州|体育用地|消失_
Fulfilling the Pension Promise – Caixin Editorial – With China now enjoying the last of its demographic dividend, there is no time to lose. The priority is to clear the legacy debt. The moves now to promote urbanization and speed up labor mobility are only an attempt to remedy the defects of the system, rather than a fundamental overhaul. In the long run, it must address the problem of unfair access and simplify the fragmented, complicated system. Building an effective social security system is a challenge for governments around the world, and none can claim that theirs is perfect. While European countries struggle with their perhaps overly generous welfare systems, Asian economies in general are lacking in social welfare. While an economy in transition like China’s would need to beware of the welfare trap, for now, the country must accelerate the pace of its social security reform – in an affordable and sustainable way – so it can honor the commitments the government has promised its people.
Husband of sacked Hua Xia Bank employee says wife a scapegoat: report | Reuters– The man, identified only by his surname Xu, has hired lawyers to defend his wife, who has been arrested and is in police custody, the news portal reported.”As a customer manager, Tingting (his wife) had no authority to transfer money over the counter or examine product risks,” the husband told Netease. “The products had been on sale for half a year, and now the bank is pushing the responsibility on her. Why is the bank sacking her now, when the products failed, rather than six months ago?”
China’s Dream Team -Caixin-Stephen Roach – Roach well-liked here// As is the case in any country’s leadership transition, no one knows for certain whether the incoming administration is up to the multiplicity of challenges they face. Since the days of Deng, China has had an uncanny ability to rise to the occasion and meet its challenges head on. The new generation of leaders has the right skills and experience for the task. Western biases notwithstanding, we will know soon enough if they can translate strategy into action.
社科院预测明年经济增速8.2% 新华社——经济参考网 – 中国社科院经济学部2012年12月5日发布《经济蓝皮书：
How Cities Can Save China – NYTimes.com–Henry M. Paulson Jr. – Global prosperity depends on China’s continuing to be an engine of growth. We all need China to reinvent its economic model. Working together on urbanization creates progress toward joint solutions to the challenges the world faces from overwhelming pressure on natural ecosystems, resources and commodities. We need Chinese cities to succeed, and we can help ensure that they do so.
Chinese Stock Accounts Empty Before Rally on ‘Capitulation’ – Bloomberg – Chinese stock investors emptied trading accounts at the fastest pace in 16 months last week, three days before the benchmark Shanghai Composite Index (SHCOMP) rallied the most in three months.The number of Chinese stock accounts containing funds dropped by 205,000 to 55.6 million, the largest decline since the week ended July 8, 2011, according to regulatory data compiled by Bloomberg. The number of funded accounts slid to the lowest level since the week through Nov. 26, 2010, after reaching a high of 57.28 million in June 2011. About 112 million accounts are empty or frozen, the data show.
POLITICS AND LAW
Commentary: CPC leadership wages war against formalism, bureaucracy – Xinhua | English.news.cn– Deng and Hu Jintao also launched campaigns against this…//These conducts showed the top CPC leaders’ resolve to root out the chronic and lingering problems of formalism and bureaucracy, which have been hampering flesh-and-blood bonds between the Party and the people.Formalism and bureaucracy cannot be gotten rid of within a short time. The new requirements are good as they will help leaders turn rhetoric of into practice. But they will only have their full intended effect if fully implemented.
习李举刀清党 第五代欲达邓胡未竟之志_多维新闻网 – 此外，有分析进一步指出，实际上在1989年“六四”之后，
Under-Secretary Cadre in Sichuan Province Investigated-Caijing Li Chuncheng, Deputy Secretary of CPC Sichuan Provincial Committee, has been investigated by the Party’s Central Commission for Discipline Inspection, Caijing learned from various sources. Li is believed to be the first cadre at the deputy-provincial level to be investigated after November’s 18th Party National Congress, at which he was elected as an alternate member of the party’s central committee.
中纪委：四川省委副书记李春城严重违纪被查_网易新闻中心 –
实德卖地救急 转让北京亦庄三幅地块至万泽集团旗下 _财经频道_一财网 – Dalian? Shide being dismembered..how long a sentence will Xu Ming will get? //从出售足球俱乐部到变卖土地，
内地反腐进入新阶段_资讯频道_凤凰网 – ifeng.con has a special microsite now for the growing corruption crackdown..maybe this is just score-settling politics, but i would not be so sure of that yet…
中纪委座谈会专家:反腐不能仅靠二奶翻脸等事件|十八大|反腐|
网曝新疆一公安局长包养“双胞胎姐妹” 纪委调查_资讯频道_凤凰网 – Internet post claims wusu, xinjiang police chief is keping twins as mistresses…oh man, evil, hits close to home…note the increasing tempo of internet “exposes” of mistress-related corruption…
Cutting Off Corruption – China Media Project sort of safe for work cartoon…
Former village head has 4 wives and 10 children — Shanghai Daily | 上海日报 — English Window to China New– A FORMER legislator currently under investigation in the northern Chinese city of Taiyuan has been revealed as having four wives and 10 children.Details of Li Junwen’s personal life were widely known in the area but the district authority turned a blind eye to villagers’ complaints and just said: “That is his ability,” yesterday’s Legal Weekly reported.
邓聿文：从雷政富案看县委书记的权力-财经网 – Deng Yuwen on how the Lei Zhengfu case shows the excessive power of county secretaries, shows need for faster reform of local county government//
The five levels of expression in China – China Media Project – The following article, shared through Sina Weibo as a text image this week, shares a recent talk given by Wu Si (吴思), a former China Media Project fellow and the editor-in-chief of the liberal journal Yanhuang Chunqiu. In his talk, Wu Si described freedom of expression in China as a building with five levels — starting at the Constitutional ground level and moving up to the odd and unpredictable space of the internet and social media…Therefore, in Wu Si’s view, the way space for expression in China is structured is quite complex. Freedom of expression is not “total,” but nor is it “nonexistent.” It can be found on all five levels.
Exclusive: How a Chinese prisoner release reveals business as usual at ‘black jail’ – CSMonitor.com – A Monitor investigation reveals that Tuesday’s announced freedom for 70,000 prisoners was really just a regular release of several hundred petitioners.
FOREIGN AND DEFENSE AFFAIRS
人民日报-习近平在会见第二炮兵第八次党代会代表时强调 深入学习贯彻党的十八大精神 建设强大的信息化战略导弹部队 范长龙许其亮参加会见 –
Xi calls for powerful missile force |Politics |chinadaily.com.cn –
习近平称中国决不称霸 对外开放国策不动摇|习近平|中国称霸|对外开放_新浪新闻 –
China’s Xi pledges peace, opening-up in first meeting with foreigners – Xinhua | English.news.cn– China’s development will never be a challenge or a threat to any other country or the world at large, Xi said.”China will never seek hegemony or expansionism,” said Xi, who is also chairman of the CPC Central Military Commission. The more China develops, the more it is conducive to peace and development of the world, he added.
CPC delegation leaves for U.S. visit – Xinhua | English.news.cn – will speaker Boehner get his picture taken with these folks?// The delegation, led by Wang Jiarui, head of the International Department of the CPC Central Committee, is due to hold the fifth high-level dialogue with the U.S. Democratic and Republican parties during the U.S. tour.
Why US meddles in Diaoyu Islands issue? – People’s Daily Online – Seen from the U.S. traditional strategy, the disputes between China and Japan in Asia Pacific serve interests of the United States. And the easiest way of intensifying China-Japan tensions is to incite Japanese right-wingers to stir up troubles on the surface. This U.S. move will undoubtedly increase the Japanese right-wing forces’ chance to win the election.
Washington shies away from commitments|Asia-Pacific|
China’s J-15 fighter superior to Russian Su-33 – People’s Daily Online– Foreign media especially Russian media guessed that the J-15 is a copy of Russian Su-33 carrier-borne fighter jet because its appearance is similar to Su-33. In this regard, spokesman of the Ministry of National Defense of China Geng Yansheng said on Nov. 29, “The world military affairs have an objective law of development. Many weapons have the same design principle and some command and protection methods are also similar. Therefore, it at least is non-professional to conclude that China copied the aircraft carrier technology of other countries only by simply comparison.”First, J-15 has an avionics more advanced than Su-33. Su-33 is equipped with old-fashioned ARINC429 discrete avionics system of one-way low-speed data bus, while J-15 adopts joint avionics system of bidirectional data bus.
Pictures–Destroyer flotilla in confrontation assessment – People’s Daily Online – Recently, a destroyer flotilla under the North China Sea Fleet of the Navy of the Chinese People’s Liberation Army (PLA) organized its ship formation to conduct actual-combat confrontation assessment in the waters of the Yellow Sea, so as to examine emergency-handling capability of its officers and men under actual-combat conditions
Inside the Ring: Asia pivot questioned – Washington Times– The Senate version of the fiscal 2013 defense authorization bill contains language that would require the Pentagon to highlight China’s growing cyberwarfare and strategic nuclear capabilities.A section of the legislation calls for adding language to the annual report on Chinese military power on “China’s asymmetric capabilities, including efforts to develop and deploy cyberwarfare and electronic warfare capabilities, and associated activities originating or suspected of originating from China.”
Navy chief was fed words by media: NSA – The Times of India– National security advisor Shiv Shankar Menon implied India is uneasy about publicly committing itself about a naval role in the South China Sea because it might hurt Chinese sensibilities.Menon said Admiral Joshi was misled by reporters into saying that Indian naval ships would, if necessary, sail into South China Sea, the scene of dispute between China, Vietnam and Philippines.
Recounting First Visit to China, Orville Schell Evokes a World of Difference | Asia Society – In 1975 the author worked for a month at the Dazhai model agricultural work brigade in Shanxi province. Here he helps prepare the fields for maize, peanuts and fruit
What’s at Stake at WCIT? | NewAmerica.net – This policy brief spotlights seven of the most controversial issues at stake when governments meet at the WCIT to negotiate a revised text of the International Telecommunication Regulations treaty and in the future. They range from the ITU’s role in Internet governance and cyber-security, to Internet traffic routing, to human rights and transparency. The paper argues that the ITU’s role has been limited and should continue to be as part of the broader multi-stakeholder process.
HONG KONG AND TAIWAN
China will step up pressure on Taiwan for political talks: MAC – CNA ENGLISH NEWS – He said that judging from what was said at the 18th National Congress of the Communist Party of China and views from all sides, “the mainland will step up pressure on Taiwan for political talks,”
TECH AND MEDIA
Facebook Backer Alisher Usmanov Now Focused on China – Bloomberg The billionaire is particularly interested in e-commerce in China, Streshinskiy said. Alibaba Group, the country’s largest e-commerce company, was valued at $40 billion in September, when an investment group led by China Investment Corp. paid $2 billion to acquire a 5.6 percent stake, a person familiar with the matter said at the time.
工信部酝酿民资进入电信业新政 新华社——经济参考网 – 租用网络和设备费用有望直降
SOCIETY, ART, SPORTS, CULTURE AND HISTORY
多地曝孩子落户母亲须先上节育环 律师呼吁松绑_新闻_腾讯网 – 本报讯 （记者李秋萌）
Video: Education, Education | Watch Why Poverty? Online | PBS Video – In China, education is considered the only way out of poverty. But as the nation’s higher education system has largely been privatized by for-profit companies, the future for millions of students is bleak. College is less accessible to Chinese youth than ever before, and without it, they are often shut out of well-paid employment opportunities. What will it mean for coming generations and the future
ENERGY, ENVIRONMENT AND HEALTH
Mega-Dairies Riding a Herd Instinct Industry – – Heavyweight investors such as the U.S. private equity firm Kohlberg Kravis Roberts Co. LP (KKR) and China’s Citic Industrial Capital helped lay a financial foundation for the agribusiness boom. Government subsidies and retail investor enthusiasm for Chinese dairy company shares on exchanges at home and abroad also helped prime the sector’s pumps. And overseas suppliers from forage growers in California to cattle breeders in South Africa have been happy to accommodate China’s new dairies. China’s dairy farm industry has hit a few bumps on the road to success, for example in the area of environmental protection. Some experts have warned about the potential for cattle disease spreading from vast, crowded milking parlors. And for some companies, financial support is cooling.
Environmentalist Liu Futang fined for exposing Hainan pollution scandals | South China Morning Post – Liu, 65, was sentenced to three years in prison, but given a full reprieve, and fined 17,000 yuan (HK$21,000). He is thought to have struck a plea deal to avoid imprisonment.
After Another Cruel Spate of Poaching in China, Netizens Ask When It Will Stop | Tea Leaf Nation – The poaching and trading of wild animals has again attracted the attention of China’s Internet users after a video called “Shocking Killings” aired on a popular Chinese television program, Focal Interview (焦点访谈), on China Central Television (CCTV). The video was secretly recorded by a journalist in Zixi County, a small mountainous area in Jiangxi Province. The county advertises itself as a “Jade in China” and a “Human Oasis” based on its ecological environment index and the fact that 87% of its surface is covered by forest. But the reality is far darker for its animal residents, including wild macaques, geese, muntjacs and boars.
China demands timetable to $100 billion climate aid for developing world | Reuters– “The core issue is finance,” Xie Zhenhua, head of China’s delegation, told a news conference of a main track of the November 26-December 7 talks among 200 nations in Doha, Qatar, that is a big block to a modest deal to keep U.N. climate efforts on track.He said a deal on finance would “create very good conditions for the settlement of other issues” in Doha, which is also seeking a symbolic extension of the U.N.’s Kyoto Protocol for curbing greenhouse gas emissions by rich nations beyond 2012.
China pledges $56 billion to cut air pollution | Reuters – local governments will fund with what money?// China will spend 350 billion yuan ($56 billion) by 2015 to curb air pollution in major cities, the environmental watchdog said on Wednesday. Local governments will fund most of the programs aimed at cutting the level of harmful particles in the air in 117 cities by at least 5 percent between 2011 and 2015, the Ministry of Environmental Protection said in a statement on its website.