The Sinocism China Newsletter For 12.28.12

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

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Only a couple of more days in a free Internet zone and then back to Beijing, where the latest news about the Internet does not sound good.

China’s top legislature will vote on a draft decision on online info protection (Xinhua) that will also legally require real-name registration. The China Media Project looks at the controls that have been building for a while in Rule of law: a ring to bind China’s Internet:

As New Year’s approaches, China’s leadership seems to be making its case for tougher internet controls in 2013. Earlier this month, the country’s new propaganda chief, Liu Qibao (刘奇葆), said China must “deeply research the strengthening of the building, operation and management of the internet, singing the main theme online.” Singing the “main theme” refers explicitly to staying in line with the ruling Party’s political, social and economic priorities and does not, as the Wall Street Journal‘s recent translation suggests, refer blandly to “mainstream online themes.”…

This language sandwiches the relatively clear-cut agenda of personal data protection between moral and political goals that are harder to define and are probably code for increased political controls on the internet.

In China Tightening Controls on Internet Willy Lam tells the AP that:

Chinese leaders “realize there are detrimental impacts on business, especially foreign business, but they have counted the cost and think it is still worthwhile,” said Lam. “There is no compromise about the political imperative of controlling the Internet.”

Michael Anti tells the Los Angeles Times in China tightens up censorship of Internet sites that:

…the current pushback on the web reflects paranoia over incoming president Xi Jinping’s crackdown on official corruption.

Local officials could be pressuring propaganda departments to curb freedom of speech online, he said.

“Officials hate the Internet,” Anti said. “They’re afraid of being victims of the anti-corruption campaign.”

Furthermore, Anti said China’s myriad ministries policing the web are likely engaging in a turf war before Xi takes office in March.

It is worth remembering that Beijing has been worried about the destabilizing potential of the Internet, and especially the “foreign” Internet, for years. As Meng Jianzhu, then Minister of Public Security, now Politburo member and Chair of the Politics and Law Committee, wrote in Seeking Truth in December 2009:

The internet has become a primary method for the anti-China forces to infiltrate us and amplify destructive energy. This provides new challenges in maintaining state security and social stability. (Original Chinese here.)

Yes it does. As I wrote in the November 12 China Insider column:

…there is no reason China cannot continue changing its economy while maintaining some Internet controls. Political change and Internet restrictions will have a harder time coexisting.

In the meantime, the world needs to get used to the fact that China is serious about building “Socialism with Chinese characteristics” and an “Internet with Chinese characteristics.”

And that Internet with Chinese Characteristics may mostly exclude the foreign Web.

Today’s Links:


Xinhua Insight: China advances reforms for data accuracy – Xinhua | – interesting, long article on changes to data collection, quite forthright about the problems with the accuracy of official statistics// BEIJING, Dec. 27 (Xinhua) — Nearly 10 months after bypassing local governments to collect data directly from enterprises, the National Bureau of Statistics (NBS) has moved to build backup repositories for deep data analysis and processing. With one disaster recovery system going into operation at the NBS office this month, the NBS will soon install another backup repository to ensure both data safety and deep analysis in the event of disasters. The two systems, along with the National Data Center, which went into service in February to collect data directly from 700,000 enterprises, mark a milestone reform in China’s statistical methodology.

Chinese Industrial Companies’ Profits Climb for 3rd Month – Bloomberg – Net income gained 22.8 percent from a year earlier to 638.5 billion yuan ($102 billion), the National Bureau of Statistics said today in Beijing, after a 20.5 percent rise in October

China’s State-Owned Enterprises In A Squeeze | China Bystander – The agency that oversees China’s big state-owned enterprises (SOEs)– the 117 that are centrally managed — provided a glimpse earlier this week of the profits squeeze they have been under this year. The State Assets Supervision and Administration Commission (SASAC), said that revenues in the first 11 months of this year, at 20.1 trillion yuan ($3.2 trillion), were up 9% on the same period of 2011, but net profits were flat at 1.1 trillion yuan. Given the favorable bank lending and policy advantages these SOEs get and the pricing power their market dominance lets them enjoy (collectively they account for 40% of non-farm GDP), a 5% margin isn’t overly impressive. But SOEs have been underperforming private sector enterprises for years.

Kweichow Moutai to invest more for airport construction|Companies| – China’s largest baijiu liquor producer by market value, Kweichow Moutai Co Ltd, is adding to its airport construction investment portfolio, the National Business Daily newspaper reported on Friday. The company is likely to cover 70 percent of the construction cost of a civilian airport in Renhuai,Guizhou province, in Southwest China, the report said, adding that the projected building expenses were close to 1.4 billion yuan ($225 million).

Miners Going Overseas for All that Glitters – Caixin- (Beijing) – At every juncture, conversations among gold mining executives at the recent China Mining Conference in Tianjin turned toward a single topic: The quest for gold mines overseas. Owning a mine on foreign soil “primarily can increase (a mining company’s) gold reserves and make it more self-sufficient in terms of raw materials, to improve profitability,” said Zhang Bingnan, secretary-general of the China Gold Association. “Second, gold prices are expected to go higher.”

CCB Employee Denies Improper Sales of Wealth Management Product-Caijing – An employee at China Construction Bank’s branch denied accusations of misleading investors into buying a wealth management product that underperformed, Limited reported, after seven investors reportedly complained to regulators after suffering losses. The savers, from Baicheng city in northern Jilin Province, filed a complaint with the China Banking Regulatory Commission and the China Securities Commission, accusing the country’s second-biggest lender of illegally selling wealth management products, the Guangzhou Daily said on Wednesday.

沪渝版房产税难撼房价 全国推行“无法回避”_财经频道_一财网 –

不良确认高峰压顶 银行清收总动员_财经频道_一财网 –

China 2013 Budget Deficit Said to Increase 50% to $192 Billion – Bloomberg – China plans to increase the budget deficit by 50 percent to 1.2 trillion yuan ($192 billion) in 2013, including the sale of 350 billion yuan of bonds to fund local governments, a person familar with the matter said. The central government deficit is budgeted at 850 billion yuan, according to the person, who asked not to be identified as the deliberations are not public. The nation’s leaders target about 8 percent trade growth, down from this year’s 10 percent goal, the person said.

Vessel Order Dearth Seen Spurring China Shipyard Closings – Bloomberg – unless China decides to launch a crash maritime surveillance/fisheries fleet expansion? or probably those vessels too small anyway..but could all this excess shipyard capacity be helpful to the PLAN?// Shipyards in China, the world’s largest vessel-building nation, are at risk of closing after they failed to secure orders, according to ICAP Shipping International Ltd. Thirty-eight percent of yards in the country didn’t get contracts for new vessels in 2012 and 10 percent have no deliveries scheduled beyond the year’s end, the London-based shipbroking unit of ICAP Plc said in a report sent by e-mail on Dec. 24.

Signs of Changes Taking Hold in Electronics Factories in China – – But in March, unbeknown to Ms. Pu, a critical meeting had occurred between Foxconn’s top executives and a high-ranking Apple official. The companies had committed themselves to a series of wide-ranging reforms. Foxconn, China’s largest private employer, pledged to sharply curtail workers’ hours and significantly increase wages — reforms that, if fully carried out next year as planned, could create a ripple effect that benefits tens of millions of workers across the electronics industry, employment experts say.



The word on Chinese princelings | FP Passport – Additionally, there seems to be a consensus in the United States that China deserves to be understood. Ever since Bo’s downfall, Chinese with high level political access seem to be more open to speaking with foreign media. And Bloomberg, the multi-billion dollar behemoth with probably the world’s best financial databases, has been doing an excellent job of sending its reporters to follow the money….China is not on the brink of revolution….The Bloomberg article compares princelings and their cohorts in present-day China to the robber barons of 19th century United States (and Russia’s post-communist oligarchs, though I think that’s a stretch). The increase in corruption/dissatisfaction with the princely class means that Chinese will continue to work/fight within the system to improve their lot/improve the system. This does not mean that they are planning to take the streets.

Billionaire Princelings Ruin a Chinese Vision -William Pesek– Bloomberg – The sad truth is that hundreds of millions of Chinese arent rolling in yuan the way Deng might have hoped. Its getting harder to hide that reality from Chinas masses, and that poses a growing threat to the Communist Party. Closing international-media websites, as China does at the sight of an unflattering article, cant hide the internal decay as wealth becomes more and more concentrated. The Bo Xilai scandal started well enough for the party leaders. At first, it seemed an efficient way to purge a Chongqing politician who forgot his place. Bos charisma and glowing media coverage of his populist Chongqing model of development ran afoul of many in power. They lost control of the narrative when the story became about the enormous wealth that Bos extended family had accumulated.

Shifting Trends in Corruption – Economic Observer Online – In-depth and Independent – Summary:The past year has seen a cascade of officials fall to corruption charges. The Economic Observer looks at certain long-held trends relating to corruption and how things are starting to change, thanks to more determined leadership and better public supervision.

Former Railway Official Stands Trial for Bribery – – (Beijing) – The former head of a state-owned railway transportation company stood trial December 24 on allegations of accepting 47 million yuan in bribes in exchange for construction contracts. Luo Jinbao, former chairman of China Railway Container Transport Ltd., went on trial in a court in Qiqihaer, Heilongjiang Province, on charges of bribery and illegal possession of firearms.

China orders no extravagance during holidays – Xinhua | – BEIJING, Dec. 27 (Xinhua) — The disciplinary watchdog of the Communist Party of China (CPC), as well as the government’s supervisory authority, have called for efforts to halt extravagance during the upcoming holiday season. The use of public funds to purchase cigarettes, liquor and gifts for government officials should be strictly prohibited, according to a circular issued by the CPC Central Commission for Discipline Inspection and the Ministry of Supervision on Thursday.

郑州房管官员亲属被曝有11套经适房 系上海女孩|房婶|90后|房子_新浪新闻 – Exposes of corrupt, expendable local officials keep coming

兰州原交通局长利益链:由他人持股办出租车公司|兰州_新浪新闻 – A look at corruption in Lanzhou’s taxi business…wish someone would look at the Beijing taxi industry. Remarkable that the capital city has such a dysfunctional taxi system

Trying to escape Bo Xilai’s shadow | South China Morning Post – In the third part of our four-part series Revisiting Chongqing, victims of Bo’s crackdown recall a time that has left them with scars they still bear

明鏡新聞網: 情夫檔次高:跟她有染的將軍“至少有一個排”– Mingjing looks at the rumors surrounding Tang Can, a singer who disappeared over a year ago, rumored to be under investigation and to have had affiars with numerous senior military leaders and politicians// 湯燦剛到北京時,特別希望能有一個屬於自己的小窩。那時候東方歌舞團分給她一間宿舍,是筒子樓裏的一個小房間,沒有獨立的衛生間,沒有廚房,做飯衹能在屋門口搭的一個爐子。1999年湯燦有了自己的第一所房子,據說很不起眼,但是有了完全屬於自己的睡房、洗手間、浴室、陽台,還有鋼琴房,讓湯燦身心安寧。後來則又有了新家,被傳為“非法所得”“購置了豪宅”。“豪”到什麽程度?沒有幾個人親眼得見,衹是說二樓有會客廳、瑜珈房和視聽室等,一樓有餐廳,給父母準備了寬大的臥房等。湯燦借助與多名高官和名人的零距離接觸,不斷往上爬,她的床下之臣的名單迅速擴大:包括有軍方背景的大導演、前深圳市長許宗衡、前開封市市長周以忠、前央視台長焦利、前無錫市委書記毛小平……等,光看地域的跨度就真夠大的!

Defying Mao, Rich Chinese Crash the Communist Party – – An analysis by The Wall Street Journal, using data from Shanghai research firm Hurun Report, identified 160 of China’s 1,024 richest people, with a collective family net worth of $221 billion, who were seated in the Communist Party Congress, the legislature and a prominent advisory group called the Chinese People’s Political Consultative Conference.

Family Member of Party Leader Strikes Lucrative Business Deal –– In early 2008, his administration in Chongqing initiated transactions to privatize a state-owned retail conglomerate, according to official statements and corporate filings. When the reorganization was over, a private-equity firm co-founded by the son of Premier Wen Jiabao and its partners ended up with the largest private stake and a big profit, according to an analysis of public records about the deal. The transactions began when officials in Chongqing’s government who answered to Mr. Bo sold shares of a state-run grocery and electronics chain to an investment group led by New Horizon Capital LP, a firm founded by Premier Wen’s son, Wen Yunsong.

China seizes TVs, satellite equipment in Tibetan area | Reuters – Chinese authorities have confiscated televisions from 300 monasteries in a heavily Tibetan part of the west of the country and dismantled satellite equipment that broadcast “anti-China” programs, prompted by Tibetan self-immolations in the region.

中共领导收入曝光:政治局委员月薪1万1_多维新闻网 – Politburo members make 11,000 RMB a month in salary



Navy’s responsibilities|Editorials| – As a country with more than 18,000 kilometers of coastline, 3 million square kilometers of territorial waters and growing interests overseas, China has to significantly improve its navy’s capabilities. The provocation of countries like Japan and the Philippines who covet Chinese islands and waters has complicated and even worsened the country’s security environment. The need to usher in a better security environment in its vicinity highlights the fact that its capabilities have fallen far behind its needs. So it is natural for the PLA Navy to take steps to narrow the gap.

Injecting more ‘positive energy’ into China-US relations – People’s Daily Online – Beijing and Washington have long reached a consensus on building a partnership on thebasis of mutual respect and mutual benefit. The White House has repeatedly said thatChinas rise does not mean the decline of the United States, and it welcomes a strong,prosperous, and successful China that plays a greater role in world affairs. However, theUnited States has lost its composure when implementing the consensus. For example,the U.S. Congress recently passed the National Defense Authorization Act for FiscalYear 2013, which contains controversial articles related to the Diaoyu Islands and armssales to Taiwan. This is obvious interference in Chinas sovereignty and internal affairs.Both countries have just finished their leadership elections, and China-U.S. relationshave entered an important transitional period. Such defense bill can only inject negativeenergy into China-U.S. relations.

Defense ministry strongly opposes U.S. defense authorization act – Xinhua | – “The content is a rude interference in China’s internal affairs and harmful to our strategic mutual trust. We are strongly opposed to it,” said spokesman Yang Yujun, referring to the U.S. National Defense Authorization Act for Fiscal Year 2013, which contains controversial sections related to the Diaoyu Islands and arms sales to Taiwan. One section says the act acknowledges Japan’s administration over the Diaoyu Islands, and another calls for more arms sales to Taiwan. “Someone wants to make a profit in a troubled situation on the Diaoyu Islands issue, and someone wants to bully people by flaunting his powerful connections. All these are futile efforts,” Yang noted.

Chinese military on guard against Japanese jet activity near Diaoyu Islands – Xinhua | – Ministry of Defense spokesman Yang Yujun made the remarks at a press briefing while commenting on Japanese fighter jets’ recent interception of a Chinese marine surveillance plane patrolling areas around the Diaoyu Islands. “We will decisively fulfill our tasks and missions while coordinating with relevant departments such as maritime supervision organs, so as to safeguard China’s maritime law enforcement activities and protect the country’s territorial integrity and maritime rights,” Yang said.

Japan to review defense guidelines for closer cooperation with U.S. – AJW by The Asahi Shimbun– The Abe administration plans to review defense policy so the Self-Defense Forces can work more closely with the U.S. military in response to China’s rise. Prime Minister Shinzo Abe on Dec. 26 instructed Defense Minister Itsunori Onodera to see what changes need to be made to the National Defense Program Guidelines and the Mid-Term Defense Program.

A Frightening Prospect: War in the East China Sea– Doubtless there will be a need for cool heads and assiduous incident-management in the months ahead. But considerably more likely than war in 2013 is the possibility that, for all their tough talk, all sides are already working quietly to engineer a decent interval after which they can resume some serious diplomacy…Rory Medcalf directs the international security program at the Lowy Institute in Sydney and is a Diplomat contributor

China’s Beidou system starts service in Asian-Pacific – Xinhua | – Ran Chengqi, the spokesman for the BeiDou Navigation Satellite System (BDS), introduces the symbol of BDS during a press conference in Beijing, capital of China, Dec. 27, 2012. Ran announced that the BDS, China’s domestically-produced navigation system, began providing positioning, navigation, timing and short message services to civilian users in China and surrounding areas in the Asia-Pacific region on Thursday.

Unmanned drone ready for testing|Politics| – An unmanned drone developed by a research team of the People’s Liberation Army will soon undergo its first test. The drone’s functions include automatic tracing and surveillance, and key attack technologies will be tested, according to a report by Science and Technology Daily on Dec 27.

The “United States of China,” 100 Years Later | ChinaFile Beta –fascinating piece by Stephen Platt//Now, as then, the prospect of China becoming more like us has occasioned a collision between our ideals and our fears—ideals of political stability and economic prosperity for China on the one hand and, on the other, fears that we will be undermined by a country whose people are willing to work for wages far lower than our own (the exact same fears, it should be noted, that drove the original Chinese exclusion laws). America likes to think of itself as encouraging modernization, political liberalization, and economic development in China, but it is worth remembering that behind the outward charity of such impulses there has always lurked the companion fear that such changes, if they should prove too successful, might also prove our own undoing.

N. Korea’s China Trade Expanded More Than 60 Percent in 2011 – Bloomberg – North Korea’s trade with China expanded more than 60 percent to $5.63 billion in 2011, as the totalitarian regime deepened its dependence on its main political and financial backer. Commerce with China accounted for 70.1 percent of the North’s total $80.1 billion trade in 2011, up from 57 percent in the previous year, South Korea’s national statistics office, Statistics Korea, said in its annual report today in Seoul. North Korea does not report economic data. Inter-Korean trade amounted to about $1.71 billion in the same year.

China sends first oceangoing patrol vessel to South China Sea — Shanghai Daily– CHINA today sent an oceangoing patrol vessel equipped with a helipad to the South China Sea, the first of its kind to be put into service there.The vessel, Haixun 21, will be under the administration of the Hainan Maritime Safety Administration.

Korea Times–Park can better tackle NK issue–Donald Gregg – The current young North Korean leader, Kim Jong-un, was carefully chosen by his father to succeed him. Park Geun-hye’s meeting with Kim Jong-il is well-remembered in Pyongyang. This will work favorably when Park decides to make her first move toward the North. When Park makes this move, as I am sure she will, she will carry with her the credibility of conservatism which Richard Nixon took with him to China in 1972. Kim Dae-jung and Roh Moo-hyun, both full-blown liberals, were never trusted by large segments of South Korea’s conservatives when they took the “sunshine policy” to the North. Moon Jae-in would have suffered from this same disadvantage.

Australia plans military exercises with China – Channel NewsAsia– SYDNEY: Australia and China are planning joint military exercises which may also include the United States as the nations work to ensure stability in the region, Canberra’s defence chief said. General David Hurley told The Australian newspaper the war games were “on the short-term horizon”.



Tencent Turns to WeChat to Defend China Turf Against Sina: Tech – Bloomberg – As people spend less time with their PCs, WeChat, known as Weixin in Chinese, gives Tencent a way to capture the explosive increase in the use of tablets and smartphones. Despite its early lead in the mobile shift, Sina’s advertising-driven business model ultimately won’t keep pace with Tencent’s e-commerce capability, said Cynthia Meng, a Hong Kong-based analyst with Jefferies Group Inc. “Sina’s mobile traffic is large, but we’re talking about positioning for mobile monetization,” Meng said. “The first opportunities in mobile will come from games and mobile commerce,” at which Tencent has a distinct advantage, she said.

新浪管理层减持 或将资产转移至微博注册公司_互联网 – Sina management’s MBO holding company New Wave files to sell more shares, not a bullish sign, especially given drop in Sina’s share price

Losing It at the Movies: Silly Beats Sober in China’s Box Office – China Real Time Report – WSJ– A low-budget Chinese comedy that has become a dark-horse hit on China’s movie screens has sparked intense discussion of what Chinese filmgoers should be watching. “Lost in Thailand,” which cost only 30 million yuan ($4.8 million) and was made by actor-turned green-hand director Xu Zheng, earned 700 million yuan in less than two weeks after its debut on Dec.12, according to the state-run Xinhua news agency. The movie tells the story of two managers who compete to find the company’s biggest shareholder in Thailand to secure a contract approval, making fools of themselves in the process.



China refutes counterfeit drug export accusations – Xinhua | – BEIJING, Dec. 27 (Xinhua) — China’s Foreign Ministry on Thursday refuted accusations that counterfeit drugs made in China were exported to Africa and posed a threat to public health. Spokeswoman Hua Chunying said at a daily press briefing that the accusations are unfounded, noting that cooperation between the Chinese government and African countries has played an important role in improving the healthcare environment for people in Africa.



Authorities Investigate Farms for Excessive Use of Drugs – – (Beijing) – Poultry suppliers are undergoing inspections by food safety authorities for the excessive use of drugs in food, following a state media report which uncovered unhealthy levels of antibiotics in chickens at two farms in eastern China. Chicken farms that have been found using unhealthy amounts of drugs in chicken products have already been closed down, spokesperson at the Ministry of Agriculture Bi Meijia said on December 25.



Stories from the morgue|Center| – Qin Ming listens to the dead, and he hears their stories. Now, he has translated the tales into a best-selling crime thriller that has topped China’s Amazon and sold about 50,000 copies in just two months. His debut novel, Voice of the Dead, is a collection of 20 enthralling criminal investigations from his seven years working in forensics. Qin joined the forensics team under Anhui province’s public security bureau in 2005 after earning his degrees on forensic medicine at Wannan Medical College in 2003, and the China Criminal Police University in 2005.