The Sinocism China Newsletter For 12.12.12

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

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The propaganda push for Xi Jinping’s visit to Guangdong has begun. Last night it was the top story on the CCTV Evening News, Xinhua published 习近平在广东考察时强调:做到改革不停顿开放不止步 (abridged English summary in Xi Jinping vows no stop in reform, opening up – Xinhua), Wednesday’s People’s Daily gives it front and center placement-人民日报-习近平在广东考察时强调 增强改革的系统性整体性协同性 做到改革不停顿开放不止步-and all major news outlets and websites today are carrying the news. His simple style is also highlighted–习近平视察深圳住酒店普通套房吃自助餐_网易新闻–with reports that he stayed in a standard hotel room and ate from the buffet.

Guangdong Party Secretary Wang Yang accompanied him, as expected, and Duowei has an interesting piece speculating on how Xi may use Wang Yang in his new administration. If Duowei is correct in 习近平南巡2.0定基调 习汪原是同路人? then those who hope for a bigger role for Wang Yang “the reformer” may be heartened.

Xinhua explains the importance of the trip in China Voice: Reform, opening up key to China’s revival:

The choice of the destination was significant as Xi followed in the footsteps of late Chinese leader Deng Xiaoping’s 1992 southern tour to the boomtown of Shenzhen and the cities of Zhuhai, Foshan and Guangzhou, the provincial capital.

Xi’s reiteration of reform and opening up on his tour sent a clear signal that the new CPC leadership will resolutely follow these tenets.

It comes as a rallying call to the entire Party and the country to gather strength to tackle challenges…

The great revival of the Chinese nation will be realized as long as Party members, officials and people of all ethnic backgrounds increase their sense of urgency, mission and responsibility along the socialist road with Chinese characteristics, and continue the cause of reform and opening up.

More study is ahead for all the party members still digesting the 18th Party Congress report…

The rhetoric is encouraging, but it is premature to get too excited as so far we have seen no substantive policy changes. One important effort–the long-delayed income distribution reform–appears to have crashed on the shoals of SOEs and special interests, as Bob Davis of the Wall Street Journal explains in China Tries to Shut Rising Income Gap:

Now, the plan is finally set to be released this month after a push by Mr. Wen, in the 11th hour of his tenure. But after at least a half-dozen drafts, some of the most significant proposals have been watered down, or dropped completely, after opposition from state-owned firms, researchers involved in the project say. The result is a general set of principles rather than a practical road map with specifics on how to redistribute wealth, they say.

The income distribution reform plan is Wen Jiabao’s initiative and he is a lame duck. Perhaps Xi has other plans? Perhaps he will use the corruption crackdown to go after the intransigent SOE bosses and other special interests, clearing the way for more significant reforms in the next 12-18 months?

Evan Osnos of the New Yorker as a terrific post (and not just because he give Sinocism a nice plug) about the recent outbreak of corruption exposes. In the humorous The Just-Sisters Defense: What’s Behind China’s Sex-Scandal Surge? he penetrates to the heart of the problem:

Some have argued that the surge of sex-scandal news is a sign that the new Politburo is determined to expose and crack down on the phenomenon. (Indeed, the police chief and the hapless Lei, among others, are already on their way to punishment.) Others see it as the accretion of the power of the Web. I see it as a bit of both. But exposing the epic ineptitude of public servants is not the same as rooting it out as its spiritual source: a deep-rooted culture of impunity and entitlement that has grown without boundaries for three decades. That will be a far more difficult task.

Yesterday another scandal broke-网曝云南省纪委官员为情人私搭乱建 纪委正调查-财经网. A netizen charges that a provincial discipline inspection commission member in Yunnan has been keeping a mistress for years and has done all sorts of illegal things with her. If true, this is the fox guarding, or in this case cavorting in, the henhouse.

A much bigger corruption case may be unfolding with the investigation of Sichuan Deputy Party Secretary Li Chuncheng. Now there are accusations–李春城被曝曾花巨资买官上任后疯狂卖官_网易新闻— that Li bought a promotion from then-Heilongjiang Deputy Party Secretary Han Guizhi and also sold many official positions when he was the Chengdu Party Secretary. Post buying and selling has been a scourge throughout Chinese history and is much more serious than, though not unrelated to, zipper problems.

I made some predictions about 2013 for Dealbook in For China’s ‘Great Renewal,’ 8 Trends to Keep an Eye On. It is usually a bad idea to make predictions about China, so feel free to pile on.

Today’s links:


Closer look: The Role of Central Economic Work Conferences through the Years – Caixin – The important policy meetings held each year in December mirror the macroeconomic situation and are indication of future policy direction

China New Loans Trail Forecasts in Sign of Slower Growth – Bloomberg – Aggregate financing, an indicator designed to capture other funding sources apart from the bank loans such as trust loans and bond and stock issuance, was 1.14 trillion yuan in November, today’s report showed. That’s the lowest since August and compares with 1.29 trillion yuan in October and 958.1 billion yuan in November 2011.

Wealth-Management Products Account for 18Pct of Total Social Financing in Jan.-Sept. Official-Caijing – China’s outstanding wealth-management products hit 6.73 trillion yuan ending September, up nearly 47 percent from 4.58 trillion at the year end of 2011

Lennar Said to Get $1.7 Billion San Francisco Loan – Bloomberg – Lennar Corp. (LEN) has agreed to a $1.7 billion loan from China Development Bank that would resurrect two San Francisco residential projects, a person with direct knowledge of the matter said. The loan from the Beijing-based bank would fund an estimated six years of construction at the Hunters Point and Treasure Island development sites, said the person, who asked not to be named because the information was private. Work may begin next year, the person said.

En Route to the Bohai Tunnel – Caixin – While a long coastal drive can be counted as a leisurely pursuit for some, the 1,800 kilometers of roads around the bend of the Bohai Sea remains a hard slog for those in the business of land transport. From the city of Penglai, Shandong Province, to Lushun, Liaoning Province, the shortest distance between the two cities is a mere 106 kilometers. But not taking the long way around won’t be an option until an undersea tunnel is in place.

China to open first subway crossing Yangtze[1]|– China’s first subway line to cross the Yangtze River, the country’s longest waterway, is expected to start test run this month in the central city of Wuhan, local officials said Tuesday.Subway trains have run through the 27.73-km tunnel for Wuhan Line 2, which links Wuchang and Hankou — two major areas of the city — over the past three months. But passengers will only be allowed to board the trains on December 28 when the test run starts

China’s Ghost Towns Won’t Have a Hard Landing – Bloomberg – So yes, expect setbacks. Yet China’s underlying advantages — a vast population, a daunting work ethic, the untapped catch- up opportunities and an unsurpassed appetite for capitalism — are formidable. I wouldn’t bet on its failing.(Clive Crook is a Bloomberg View columnist)

销量低迷渠道纷争 奔驰中国陷迷雾|奔驰中国低迷|奔驰销量下滑渠道混乱|经销商联合会_21世纪网 – a look at the reasons behind Mercedes sales problems in China// 核心提示:2012年,“大奔”在中国尽显失意,倍感迷雾重重:在华销量被宝马奥迪远远抛离,而其在在营销、渠道、市场等多方面一直为业界所诟病。2013年,欲拨开迷雾,重振雄风,奔驰依然面临着多方面的大考。

11月财政收入增幅回升至21.9% 新华社——经济参考网 – 前11月税收增速回落,但专家认为明年结构性减税力度不会小

房地产撑起地方税收 明年财政良好开局可期_财经频道_一财网 – 中国经济的企稳向好带动了财政收入增幅的大幅回升。昨日,财政部发布的数据显示,11月,财政收入同比增长21.9%,增值税、消费税、企业所得税等主体税种全线回暖。

SEC Charges New Jersey-Based Consultant to Chinese Reverse Merger Companies with Violating Securities Laws; 2012-262; December 11, 2012 – The SEC alleges that Huakang “David” Zhou and his consulting firm Warner Technology and Investment Corporation located more than 20 private companies in China to bring public in the U.S. through reverse mergers, and then committed various securities laws violations in the course of advising those companies and later assuming operational roles at some of them.  After earning millions of dollars in consulting fees, Zhou and his firm have left several failed Chinese companies in their wake in the U.S. markets including China Yingxia International, whose registration was revoked after the company collapsed amid fraud allegations.  The SEC has previously charged several individuals and firms with misconduct related to China Yingxia, including Zhou’s son.

Boom in Mongolia Deflates After Deal That Started It Is Threatened –– the underlying fundamentals of the country look increasingly shaky. Mongolia faces a financing crunch, as investment dollars flowing from abroad have fallen. And revenue from coal, the country’s main export, has dropped along with Chinese demand.“There are a series of elements that have built up less-than-welcoming attitudes to Mongolia at a time when the macroeconomic situation is deteriorating,” said John P. Finigan, the chief executive of Golomt Bank, the country’s second-biggest bank.



The fight against corruption: Life and death struggle | The Economist – But for those less inclined to disclose their assets, He Jiahong, a scholar at Renmin University in Beijing, has suggested a solution in the form of an amnesty. Mr He proposes that officials be given until the end of 2013 to disclose their family assets publicly, and that they get an amnesty for any acts of corruption committed to acquire those assets.

Poison soup killer gets death — Shanghai Daily – the case of the poisoned cat word on breed of kitty…// The court said Huang asked the owner of the restaurant to prepare a cat meat hotpot and sneaked into the kitchen, where he put gelsemium elegan, a poisonous herb also known as “heartbreak grass,” into the soup. He soaked the toxic herbs for a few minutes and threw them away.

济南政府大楼造价40亿 规模仅次五角大楼(组图)-搜狐新闻 – a 4b rmb official govt office monstrosity in jinan causing an online uproar..not quite as big as the corridor is 1km long…and will overrun budget..someone is going to be in a lot of trouble

济南豪华政府大楼揭秘:一出阴差阳错的“房产置换”|济南|豪华政府|房产置换_21世纪网 – the 4b rmb jinan government building uproar is getting fun// 核心提示:一位官员称,实际上建造龙奥大厦“没有花政府的一分钱”,是把政府各职能部门在市里的房产处置后置换的。但他没有进一步解释具体的置换情况。

Elite SWAT forces battle for supremacy[1]| – pictures–Two elite SWAT officers display their combat skills during a competition in Urumqi, Northwest China’s Xinjiang Uygur autonomous region on Dec 10, 2012. Some 288 police officers from 24 SWAT units across Xinjiang Uygur autonomous region will compete in the region’s first SWAT force military skills competition which started on Monday and will last four days.

地方驻京信访机构被曝为截访付费 每人200元/天_新闻_腾讯网 – more expose about petitioners and the dirty business of “managing” them in Beijing

Translation: ‘How to Break the Cycle of Black Jails’ | ChinaGeeks | analysis and translation of modern China – Caixin’s recent package of stories includes this opinion piece by professor Yu Jianrong. He’s a bit light on actual solutions aside from the usual (totally reform everything), but if nothing else, the piece is an excellent exposition of exactly why the petition system “works” the way it does.

唐志军:为何习近平深圳行获普遍赞誉-财经网 – 习总书记的深圳之行,不仅表达了要进行权力结构改革的决心,而且也向人民展现了自觉取缔特权、将权力关进笼子和与人民亲密接触、自觉接受人民监督的行动。从而让大众看到了中国取缔特权、构建起新型权力结构的希望

Rare Protest in Beijing Against Express Train Catches China by Surprise · Global Voices – Around 300 protesters demonstrated in Chaoyang district demanding the route of the Shenyang-Beijing line be changed. The protest was in reaction to a report by the Ministry of Environmental Protection [zh] which claims that 37.27% Beijing residents supported, while 24.01% opposed the planned express train route which cuts across a number of highly dense residential districts in Beijing’s downtown area. Many residents claimed that they had not done any survey and were outraged by the result.

Ministry of Truth: Reporting Official Corruption – China Digital Times (CDT)– Central Propaganda Department: All media will not republish, report, or comment on the online rumors concerning National Energy Administration director Liu Tienan. (December 6, 2012)中宣部:对网传国家能源局局长刘铁男相关问题,各媒体不报道不评论不转载。 Through several Weibo posts, Caijing Magazine Assistant Editor-in-Chief Luo Changping reported Liu to the Central Commission for Discipline Inspection for fabricating his academic credentials and forming business alliances while in office. She also posted images corroborating documents, such as Liu’s certificate from his studies in Japan [zh]. The National Energy Administration states that Luo’s accusations are “pure slander and rumor-mongering” (纯属污蔑造谣) [zh].



BBC News – North Korea ‘launches long-range rocket’ –

Vice-premier lauds nation’s US ties |Politics |– Cooperation is the dominant trend in the relationship between China and the United States despite some problems between the two countries, Vice-Premier Li Keqiang said on Tuesday.Li made the remarks when meeting former US president Jimmy Carter. It was Li’s third meeting with US guests since the 18th National Congress of the Communist Party of China, which concluded last month.

[视频]李克强会见美国前总统_新闻台_中国网络电视台 – Li Keqiang meeting w Pres Carter #2 on CCTV evening news// 李克强说,卡特先生任美国总统期间,中美正式建交。中美两国关系从交手、到握手,再到携手,不断走向成熟,这是两国几代领导人和两国人民共同努力的结果,值得珍惜和维护,两国关系的意义和影响也日益超越双边范畴。虽然在交往合作中仍不可避免有这样那样的问题,但中美加强合作始终是大趋势,只要坚持相互尊重,管控分歧,包容发展,拓展共同利益,使友好的纽带更加紧密,中美双赢是完全可以实现的。

Chinese, U.S. parties pledge to enhance communication, promote ties – Xinhua |– Wang Jiarui, head of the International Department of the Communist Party of China (CPC) Central Committee, made the pledge at the fifth high-level dialogue between the CPC and the Democratic and Republican parties of the United States.Former U.S. Secretary of State Madeleine Albright and former U.S. Assistant Secretary of State Richard Williamson, representing the Democratic and the Republican parties, respectively, attended the dialogue.

PH puts gas, oil exploration plans in S.China Sea on hold | ABS-CBN News – The Philippines is temporarily holding off the awarding of contracts to companies interested in conducting gas and oil exploration in the South China Sea due to a lingering territorial dispute with neighboring countries, a senior official said Tuesday.Energy Secretary Carlos Jericho Petilla told Kyodo News that the process is “on hold right now” pending concurrence by the Department of Foreign Affairs

Early Bird: Pacific Commitment – “The [U.S. Pacific Command] commander now has his Army back and is now capable of utilizing it in the [operations] that we live day to day here in this theater of operations,” said Lt. Gen. Francis Wiercinski, commanding general of U.S. Army Pacific, the Army Service Component Command to PACOM. “Twelve or 13 years ago, we had an Army out here that the PACOM commander could reach into his quiver and utilize as he saw fit,” Wiercinski said. “But we’ve been very, very busy. … For over 11 years, we have not been part [of PACOM operations]. Now we’re back.” The focus on the Pacific is part of the national security strategy as the Army and the nation transition from the wars in Iraq and Afghanistan.

Patrol ship starts maiden voyage to Diaoyus |Politics | – China’s largest fishery patrol ship, the Yuzheng 206, started its maiden voyage from Shanghai to patrol waters near the Diaoyu Islands on Tuesday, according to the Regional Bureau of East China Sea Fishery Management of the Ministry of Agriculture.

Foreigners to get key rights |Society | – Foreigners who obtain permanent residency will have the same pension, employment and property rights as Chinese citizens, under new regulations announced on Tuesday.



China Names Clearing Bank for Taiwan Yuan Transactions – Bloomberg – China’s central bank announced the appointment of Bank of China, which already clears yuan transactions in Hong Kong, on its website yesterday. Taiwan had earlier made the Bank of Taiwan’s Shanghai branch a yuan clearing bank after an agreement signed with China in August.

For St. John’s Dean, a Quick Descent From Smiles to Suicide – – It was an unlikely lifestyle for anyone, let alone a dean at St. John’s, where she helped attract millions of dollars in contributions to the university from her native Taiwan. But that life, prosecutors charged in state and federal indictments, was enabled by fraud and embezzlement. Federal prosecutors accused her of forcing foreign students to perform household labor in exchange for tuition grants, stealing over $1 million from the university and taking $250,000 from a Saudi prince to organize academic conferences that never happened.



Tencent’s WeChat is a Threat to Everyone–Tench in Asia  That WeChat, like all domestic social media, poses a security risk to dissidents should not come as a surprise. Nor is it particularly surprising that countries like Taiwan are concerned about the potential security implications of the service. But interestingly, Chinese authorities see the service as something of a threat as well. On Sunday evening, state-run broadcaster CCTV ran a feature piece about the dangers of WeChat, focusing primarily on how its anonymity and location-reporting features can give criminals an easy in. For example, the report told the story of Xu Xiaohong, a single woman who was ultimately ambushed and murdered when a man she met on WeChat attempted to rob her. He knew where she was, and when she was going to be there, because of WeChat.

WeChat: the Chinese social media app that has dissidents worried | World news | guardian Activists believe security services are using WeChat to monitor in real time the movements of some of its 200 million subscribers//may be the achilles heel for Tencent, and other Chinese net firms like Baidu that have global aspirations, in their attempts to expand into at least developed if not also developing markets. India is always paranoid about China, wonder how much Wechat will be allowed to grow there

传工信部酝酿APP备案制 开发者称操作性不强|APP|备案|操作性_互联网_科技时代_新浪网 – MIIT to roll out new regulations for mobile apps and app stores? long overdue given how other areas are so regulated, like online gaming

‘Dream’ Show as a Channel-Changer for China – Caixin – (Beijing) – China’s television production sector appears to be entering a more creative and potentially market-ready phase now that BBC Worldwide Ltd. has shown interest in buying a copyrighted reality-talent show format pioneered by Zhejiang Satellite Television (ZJST). BBC Worldwide plans to pay an undetermined amount for the latest version of Chinese Dream Show if the popular program continues to win high audience ratings, said Du Fang, deputy director at ZJST.

Huawei to Open Research Center in Finland – – so they are going to capitalize on all the laid off Nokia brainpower, just as they did with in Sweden with Ericsson? smart// The planned center in Helsinki, involving an investment of 70 million euros, or about $90 million, will work on smartphone development, including features like user interfaces and power management, the company said. When the center opens next year, it will employ 30 people, but this could grow to 100 over the next five years, the company said.

‘Iron Man 3’ Casts China’s Wang Xuequi As New ‘Dr Wu’: Beijing Filming Starts Monday – – EXCLUSIVE: Marvel starts filming several Iron Man 3 scenes in Beijing on Monday. And I’ve learned from my Chinese-based movie biz sources that the studio has just cast leading Chinese actor Wang Xuequi as a new character playing “Dr. Wu”. The highly secretive Marvel has been prepping for the shoot for a week in Mainland China.



Foreigners asked to retrace Long March –– However, Zhou Xiaozheng, a professor of sociology from the Renmin University of China, said the promotion of the Long March route as a World Heritage site is an extremely conservative action by Maoists.”They’re hyping the significance of the route,” Zhou told the Global Times.

China’s Disempowered Urban Planners Build Support Through Weibo · Global Voices – Since 2011, urban planners have found a new way to make their voices heard: they use Weibo (China’s twitter) to communicate their work to the public and to criticize improper planning strategies forced upon them by the government. They are essentially attempting to transfer Chinese urban planning from a closed government establishment into an open public participation platform.

An Interview with Charles Zhang, CEO of Sohu | Agenda – Beijing’s Premier Business Magazine – how many Chinese Internet CEOs have sent their kids to the US for high school or college? if you have made it in China and have the means, why would you want you child to suffer through the Chinese education system?// I believe the US system is definitely better than the Chinese system. First of all, China just has way too many people. The entire system becomes very competitive and thus opportunities are limited. Education in China is not education; it is selection. Of course, the biggest selection process is the national college entrance exam, the Gaokao. The Chinese system naturally must prepare children to study for this inevitable exam, but the preparation is the complete destruction of creativity. To be fair, such a system does have its positive sides: it trains and tests your endurance, will and commitment to your learning. Yet overall, I believe it is very harmful to children.



康泰克可制冰毒被限售:感冒药市场洗牌在即|康泰克|冰毒|感冒药_21世纪网 – restrictions on sales of Contact as it can be use to make meth..can a Breaking Bad (China) be far behind? would it be set in Henan or Guizhou?

Ancient Chinese Cures Seen Helping Drug Maker Pipelines – Bloomberg – GlaxoSmithKline Plc is testing botanicals — compounds extracted from plants — for immune disorders, Sanofi plans to turn traditional Chinese medicines into alternative diabetes and cancer therapies, and Nestle SA (NESN) teamed last month with billionaire Li Ka-Shing to develop a drug derived from ancient Chinese approaches to cure inflammatory bowel disease.



Moutai Says Tests Show DEHP Amount below National MRL-Caijing – The company said in Monday’s announcement that testing results from three different testing groups, all showed DEHP amount in its products are below the Maximum Residue Limit

With Flight Delays in China, a Rise in Air Rage – – need to crack down one in US would dare to this// In China, airline passengers are resorting to extreme measures to protest flight delays as the country’s air corridors become congested with millions of new fliers each year, a result of the quick rise of the middle class and of increasingly inexpensive air tickets.

China’s UnionPay Vies With Visa for Global Card Dominance – Bloomberg – UnionPay, founded 10 years ago in Shanghai by the State Council and central bank, extends its reach. With more plastic in circulation than any other payment network — 2.9 billion cards, or 45 percent of the world’s total last year — UnionPay is now accepted in 135 countries. Its rise is causing friction as the firm grabs market share from Visa Inc. (V) as well as MasterCard Inc. (MA), which UnionPay surpassed in customer spending in the first half of the year.

Beijing street to be duty-free haven |Society |– Beijing is considering making a city neighborhood often called “Russia Town” its first downtown duty-free shopping area, following the announcement last week of a 72-hour visa exemption policy for foreign tourists from Jan 1.The city authorities have revealed plans are afoot to turn Yabao Road – a retail hub that attracts many foreign traders, especially Russians – into a pilot area for outlets offering tax refunds and duty-free shopping.



Mo Yan’s Nobel: Parable of a Patsy? – Bloomberg – Not every interpretation is quite so flattering to Mo, or to the Communist Party. Indeed, across Weibo — and in less obvious ways, in Chinese newspapers — the Chinese seem genuinely conflicted about how to interpret their new Nobelist’s tale. In a Saturday tweet by Weibo user Kai Yan, Mo is both a Communist Party pawn and a satirist whose subject-matter is China’s all-powerful Politburo Standing Committee: “Mo Yan’s prize was controversial and recently he supported censorship. He was also condemned by the global media for not joining those who support Xiaobo’s release. However, his acceptance speech was interesting. One story in his speech was about eight masons who took shelter from rain in a temple … this is an obvious satire of the Communist Party’s court intrigues.”