Today’s China Readings August 2, 2012

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

Just links today, on the road.

  • “10-Yuan Brothels” and Sex-Worker’s Rights – China Digital Times (CDT)
    In late April, a Southern Weekend (南方周末) reporter visited a “10-yuan brothel” (十元店)[zh], the most cut-rate of venues housing China’s sex-trade, often catering to China’s many lonely and poor migrant workers. The lengthy article, which has been translated by chinaSmack, tells the story of the pseudonymic Wu Xianfang, a 48 year-old migrant worker turned prostitute:
  • China big city spenders confound global gloom: survey | Reuters
    Consumer optimism in China’s biggest cities rose to its highest in nearly three years in the second quarter of 2012 even as global economic gloom knocked the national average down from a more than six-year high, a survey showed on Wednesday.
  • Taiwan, China on alert as typhoons approach | Reuters
    The typhoon is expected to hit the southeastern Chinese provinces of Fujian and Zhejiang, China’s official Xinhua news agency reported.A separate system, Typhoon Damrey, is expected to pass just north of China’s financial hub of Shanghai on its way inland from Thursday. Wen, who usually leaves more junior leaders to oversee arrangements before storms, told authorities to step up preparations and “put people’s lives first”, Xinhua said.
  • U.S. lawmaker asks for conditions on CNOOC-Nexen deal | Reuters
    he U.S. government should block a bid by China’s state-owned CNOOC (0883.HK) for the U.S. assets of Canadian oil firm Nexen (NXY.TO) unless the merged company agrees to pay royalties on all oil drilled offshore, or spins off the properties, Representative Edward Markey said on Monday.
    Markey, a Democrat, is the second U.S. lawmaker to formally ask for conditions on CNOOC’s bid for Nexen, which has about 10 percent of its assets in the U.S. Gulf. Opposition from some factions in Washington has added a modicum of uncertainty as CNOOC tests Canada’s tolerance for such a large transaction.
  • In China, Recruiting Gets Social –
    Linkedin better move fast//
    The explosive growth of Chinese social-networking sites coupled with inadequate recruiting platforms, is driving many companies in China to experiment with new methods such as social media.
    “Traditional recruitment processes, as they are understood in the West, only really started to be used in China after 1978, with the gradual liberalizing of China’s economy,” said Mike Tims, the Asia, Middle East and Africa president at global human-resources consultancy SHL Group Ltd. “This has made it easier for China to ‘leapfrog’ these traditional approaches and embrace new recruitment methods more easily.”
  • Blind Chinese Activist Meets U.S. Lawmakers –
    did he really believe they would?//
    Chinese dissident Chen Guangcheng, the blind lawyer whose dramatic escape from confinement embarrassed Chinese authorities earlier this year, blasted the central government in Beijing for its apparent failure to investigate the brutality he suffered while under home confinement, and voiced concern over the fate of his nephew.
  • [CEG Translation] China’s Real Challenge is the Next 5 to10 Years | China Elections and Governance
    Translated by Scott Harold
    The original author, Yuan Peng, is the Director of the Institute for American Studies at the China Institute of Contemporary International Relations.
  • 楼市再现抢房风 二手房失疯|楼市抢房|二手房|商品房网签记录_21世纪网
    home buyers have not gotten the message the prices are not supposed to be going up. delay in response/data?
  • 浙江急救担保圈危机 多地财政出资扑火|浙江担保圈|民营企业担保链_21世纪网
    more shadow banking problems in zhejiang, government stepping in
  • 卖空期指四机构赚数亿 融券犹疑散户错失机遇|机构卖空|空头部队|股指期货_21世纪网
  • Chinese Banks Love (China’s) Solar Industry – Real Time Brussels – WSJ
    If a company loses money making widgets, the usual response is to make fewer widgets.That’s true unless the company in question is a Chinese solar-panel manufacturer. These firms have been losing money hand over fist recently, yet some of them are planning to ramp up production this year.
  • Beijing’s Growing Credibility Gap – Global Public Square – Blogs
    Editor’s note: Kelley Currie is a senior fellow with the Project 2049 Institute in Washington
  • Rough Justice Awaits Gu Kailai – Council on Foreign Relations-Jerome A. Cohen
    Whatever her sentence, a defence appeal from the Hefei Intermediate People’s Court to Anhui Provincial High Court is unlikely to alter it. Indeed, the court may well secretly direct the lower court trial. In any event, since the sentence will be determined politically, amongst Beijing’s highest leaders, it will not be subject to change, even by the Supreme People’s Court.One wonders if Gu still harbours doubts about the protections accorded US death-penalty defendants. Perhaps she now takes more seriously the admonition of Mao Zedong – no amateur when it came to killing – that “people’s heads are not like leeks. When you cut them off, they will not grow again”.
  • China Slowdown Forcing Discounting at Gome to McDonald’s – Bloomberg
    For years, China’s increasing affluence fueled surging sales for consumer companies. That boom is waning as slower spending translates into inventory overloads, discounting and losses for some brands.
    To lure increasingly price-sensitive shoppers, companies from electronics retailers to footwear makers are being forced to offer discounts that are hurting margins and driving down earnings. Even McDonald’s Corp. (MCD), the world’s largest restaurant chain, has introduced a value dinner starting from 15 yuan ($2.40) and reported slower same-store sales growth.
  • Chinese netizens on disqualified badminton players: They are victims of an unfair rule
  • Business Asia: (Chico) Marxism in Beijing –
    If China doesn’t trust openly available information, how much use can it make of cyber secrets?
  • Is China Getting Bad Press at the London Games? | PRI’s The World talks to Orville Schell
  • From Africa, Clinton Takes Covert Shots at China – China Digital Times (CDT)
    She will start the tour in Senegal, where U.S. officials say she will give a speech warning African states about the potential perils of Chinese investment, which many development experts claim enriches China at Africas expense. She will say that proper development will blunt the appeal of extremist groups that are gaining power in Nigeria and Mali and still threaten Somalia.
    Without mentioning China by name, Clinton will urge African leaders to carefully consider projects proposed by foreign countries that do not demand complete accountability and may encourage corruption to the detriment of the people of some of the worlds most impoverished nations, according to the officials who spoke on condition of anonymity because they were not authorized to preview the speech.
  • China develops a robot that walks on water – The Hindu: Mobile Edition
  • Chinese Securities Regulator Pitches Stocks –
    The China Securities Regulatory Commission has again appealed for confidence in the stock market and cautioned against panic selling, showing mounting anxiety over sagging equity prices in a politically sensitive year.Such statements by the regulator—in recent months it has touted the merits of state-run blue-chip companies, for example, and pointed to what it called low valuations in the broader market—have been described by some analysts as uncharacteristic for a securities watchdog.
  • 8月底省部级官员再有异动 俞正声入京韩正掌沪_多维新闻网
    Duowei reporting that Yu Zhengsheng will transfer to Beijing at end of August, to be replaced as Shanghai Party Secretary by Han Zheng. Duowei today also has a piece predicting Yu will make it onto the 18th PBSC. Yu has strong backing, apparently from Jiang Zemin, and there are also some who say he is the “rep” in the leadership for a certain powerful family. we’ll find out soon if Duowei is more reliable than the unreliable Boxun on these kinds of predictions/rumors//
  • 筹谋十八大领导核心 中共高层云集北戴河_多维新闻网
    Duowei says top leaders will arrive in Beidaihe by the weekend, doubles down on its claim that the 18th PBSC will shrink from 9 to 7, says 6 members pretty much set–xi jingping, li keqiang, zhang dejiang, li yuanchao, wang qishan and yu zhengsheng–and that last seat between liu yunshan, zhang gaoli and wang yang. I don’t think we should view this as more than gossip for now, and per Duowei’s prediction it looks like possible next generation leader wont get an early PBSC seat, as Hu did in the 14th, but as Xi did not until the 17th Party Congress//
  • Democracy in Burma : The New Yorker
    good piece by Beijing-based Evan Osnos. Writers like him make the New Yorker worth paying for//
    A brutal regime’s shift toward democracy surprised nearly everyone. How did it happen?
  • Japan’s panic over China’s military strength unnecessary – People’s Daily Online
    Japan used a lengthy part in its 2012 defense white paper talking about China’s military power, showing its vigilance against China. It seems to have become the most active country that takes precautions against China in East Asia.Japan has not got accustomed to the rapid changes of the growth of China’s strength and decline of its strengths. As the most powerful country in Asia for a long time, it is unwilling to be overtaken by China’s overall national strength. It even feels panic, it is not surprising.
  • China investigates shuttlers’ suspicious play – People’s Daily Online
    The Chinese Olympic delegation has started the investigation into the alleged Chinese shuttlers’ deliberate losing in the group stage of the tournament in London, spokesman told Xinhua on Wednesday.
  • Why China’s female stars are favored by Hollywood? – People’s Daily Online
    are they?
  • Firms Marching Abroad Seek Red Tape Retreat – Caixin Online
    Private companies in China hungry for overseas buyouts have been salivating over foreign corporations whose market values have plunged in recent months as a consequence of the weak global economy.
    But Chinese government regulators have been standing between many of these companies and the dinner table, investment and legal experts say. Buyout opportunities have even been lost, they say, due to bureaucratic foot-dragging and regulatory limits on bank lending for overseas deals.
  • Reexamining the Confucian Institutes | China Power
    I am a fan of Peter Mattis’ work at Jamestown Foundation. Very smart analyst//
    The Beijing-backed Confucius Institutes, which promote Chinese culture internationally, have been no stranger to controversy since their launch in 2004.Critics have charged they are platforms for Chinese espionage and propaganda—a salacious if still unsubstantiated charge. There importance to Beijing, however, is shown by Beijing recently saying that it could harm the friendship between the American and Chinese people if the U.S. State Department did not reconsider its decisionabout visas for Confucian Institute staff in May. This suggests the cultural centers’ importance to Beijing, but spies and lies probably are misrepresentations just as the Confucius Institutes’ defenders argue. Another possibility out of China’s revolutionary past may be a better explanation of what the Confucius Institutes are truly doing. This explanation blurs the lines between Western understandings of intelligence, soft power, and propaganda: “united front work.”
  • Slowboat Brewery | Microbrewery serving craft beer in Beijing
    A beijing craft brewery that is doing things right, good to see
  • New hurun report on Chinese millionaires
    The report analyses the number of millionaires broken down according to their regional distribution across China, including analysis of their investments, consumption trends, charitable donations, social responsibilities, and media use. For the first time, this report also includes research on the media placement of high-end brands.
  • ‘I suspect Phelps’: Chinese official hits back over Ye Shiwen speculation |
    China’s former Olympic doctor says he has long suspected Michael Phelps of using performance-enhancing drugs, but has kept silent until now because of the absence of evidence…His attack comes in response to allegations raised overnight by an American swim coach against 16-year-old Ye Shiwen, who shattered the women’s 400m individual medley world record…”Abnormal?”, asked Chen Zhanghao, who headed the Chinese Olympic medical team in Los Angeles, Seoul and Barcelona. “America’s Phelps broke seven world records! Is he normal?..”I suspect Phelps, but without evidence, I have to recognise that we should be grounded in facts,” said Dr Chen, whose credibility is arguably tainted by his own role in sports doping in the 80s and 90s, as revealed in an exclusive interview with Fairfax.
  • China restricts Ramadan fasting in restive Xinjiang – International – World – Ahram Online
    TOKYO — Japan voiced concern Tuesday about China’s growing assertiveness in regional waters at a time when it is becoming less clear who in Beijing is making decisions about the country’s military.
    In its annual white paper, Japan’s Defense Ministry spoke of the “changing” influence of the Chinese military on foreign policy, although the document did not specifically say that the influence is growing. An increasingly “complex” relationship between the People’s Liberation Army and the ruling Communist Party presents a “risk management issue” for the region, Tokyo said.
  • FT Alphaville » China’s two-way liquidity risk: shadow banking
    Meanwhile, in the domestic banking scene… [See part 1 on capital outflows here.]China’s financial system stability is increasingly intertwined with its shadow banking system — which is big, according to various tallies. Bank of America Merrill Lynch says it accounts for a quarter of all bank loans, with the biggest segments being wealth management products or WMPs (8 per cent) and trust companies (8.9 per cent). Fitch Ratings says that WMPs now account for about 16 per cent of all commercial bank deposits; KPMG says trust companies will overtake insurance to become the second-biggest component of the financial sector.
  • FT Alphaville » China’s two-way liquidity risk: capital outflows
    Izzy wrote in May how China’s Rmb exodus is a huge (and still little-explored) story for the world economy, and it’s one that won’t be going away as China recorded a net capital account deficit in Q2. We’re wondering now how this might collide with risks to domestic liquidity — specifically, whether a combination of Rmb exodus and local banking problems might affect the People’s Bank of China’s ability to maintain financial stability?
  • FT Alphaville » The sound of falling Chinese USD reserves…
    Could it be true? Did China’s USD FX reserves really fall in the second quarter?Certainly seems so. Here are the details via ChinaScope on Wednesday:
  • Vinson & Elkins LLP – Lawyers – David M. Blumental
    lawyer w killer Chinese, among best I have ever seen a foreigner have
    David recently advised CNOOC on its investments of more than US$3.47 billion in U.S. shale properties, and Sinopec International in its US$7.1 billion joint venture with Repsol YPF in upstream oil and gas assets in Brazil. In 2009, he co-led the firm’s team representing Sinopec International on its C$10.3 billion tender offer and acquisition of Addax Petroleum, a public company traded on the Toronto and London Stock Exchanges. He also represented a Chinese steel and minerals company in its proposed acquisition of iron ore mining rights in Argentina and a proposed joint venture to own and develop uranium mining rights in Kyrgystan.
  • Huawei responds to hacker reports of vulnerabilities |
    In response, Huawei issued a statement saying it was aware of “media reports on security vulnerabilities in some small Huawei routers” and was trying to verify the claims.
    “Huawei adopts rigorous security strategies and policies to protect the network security of our customers, and abides by industry standards and best practices in security risk and incident management,” it said.
  • Hackers reveal critical vulnerabilities in Huawei routers at Defcon – Computerworld
    But did not test any of the big routers used in telecom networks//
    IDG News Service – Security researchers disclosed critical vulnerabilities in routers from Chinese networking and telecommunications equipment manufacturer Huawei at the Defcon hackers conference on Sunday.
    The vulnerabilities — a session hijack, a heap overflow and a stack overflow — were found in the firmware of Huawei AR18 and AR29 series routers and could be exploited to take control of the devices over the Internet, said Felix Lindner, the head of security firm Recurity Labs and one of the two researchers who found the flaws.
  • The Jamestown Foundation: A Young Turk in China’s Establishment: The Military Writings of Liu Yazhou
  • Bikini Ban at Chinajoy Event Shines Spotlight on Cosplay and Cross-Dressing Enthusiasts – China Real Time Report – WSJ
    In a bid to polish the image of Chinajoy, one of the country’s biggest videogame conferences, organizers of the Shanghai event are cracking down on one of its main attractions, its famed “bikini girl” exhibitors.
  • Taiwan and China broach political issues for first time|Editorials|Opinion|
    The eighth Cross-Strait Economic, Trade and Culture Forum was held July 28 and July 29 in Harbin, the capital of northeast China’s Heilongjiang province. Seventeen suggestions were made during the course of the forum after discussions on three topics: the outlook for cross-strait relations, improving economic and trade ties, and intensifying cultural and educational exchanges.Whereas seven previous meetings had focused on cross-strait trade alone, this time the forum included several new topics. The two sides discussed political issues for the first time, a major breakthrough since cross-strait dialogue recommenced in May 2008, though both China and Taiwan are expected to face many challenges ahead.
  • CapitaLand highlights balancing act in Chinese property market | beyondbrics
    If your aim is to “truly prevent a rebound in housing prices” – as China’s Politburo promised recently – you won’t necessarily welcome news from a big property developer that it’s on track to release residential units at projects dubbed “The Loft” in Chengdu and “Dolce Vita” in Guangzhou.Yet that is what CapitaLand, a Singapore-based property developer, said on Wednesday, noting that the “underlying fundamentals” of China’s housing sector “remain sound”.
  • Experts fear subway costs could go off the rails – Xinhua |
    is that really all China has spent on its space program? doubtful//
    BEIJING, July 31 (Xinhuanet) — Cities may struggle to fund and maintain ever-expanding underground systems, report Xin Dingding and Wang Xiaodong in Beijing and Shi Yingying in Shanghai.
    China has spent 39 billion yuan ($6.1 billion) in the past 20 years on its manned space program, which has sent 10 craft into orbit and achieved several notable breakthroughs.However, even that vast sum would only fund construction of 78 kilometers of subway given the current average cost of 500 million yuan for each kilometer. And for most big cities with a subway, or planning a subway, 78 km is a mere fraction of a network.
  • China urges U.S. to cancel sanctions on Chinese bank – Xinhua |
    China on Wednesday urged the United States to cancel its sanctions on the Bank of Kunlun and stop damaging ties between the two nations.”The U.S. side imposing sanctions, in accordance with its domestic law, on a Chinese financial institution has severely violated the principles of international relations and impaired the interests of the Chinese side,” Chinese Foreign Ministry spokesman Qin Gang said in a statement, voicing “strong dissatisfaction” and “resolute opposition” to the U.S. move…On Tuesday, the U.S. government announced the sanctions on the Bank of Kunlun and an Iraqi bank that it accuses of doing business with Tehran.
  • Summer fishing moratorium in South China Sea concludes – Xinhua |
  • The Horrible Truth About Beijing’s New Homeless | Tea Leaf Nation
    The recent devastating floodwaters that hit China’s capital ten days ago may have receded, but thousands of residents who dwell in Beijing’s basement tenements–many migrant workers with few other options in the expensive capital–have been left homeless, their subterranean flats flooded. And it appears that authorities, as well as many netizens, couldn’t seem to care less.
  • China Development bank fell in Suntech’s fraud case – Finance & Markets – Morning Whistle – Latest chinese economic, financial, business, political and society news
    The incident of GSF’s ghostly guarantee increased Suntech’s debt table by billions of dollar. “We currently have not received any statement from Suntech. If it happened to cause such a huge debt to Suntech, then it will matter significantly”, one banker from creditor banks said.China development bank and other several Chinese lenders are Suntech’s major creditor banks. The loan Suntech got from banks surged from US$ 56 million to US$ 1.7 billion since the end of 2005 to the end of last year. Bank credit soared 30 times in less than 7 years…China Development Bank is the major creditor to Suntech’s GSF projects; however, there is no information about the lender’s detailed credit quota and means of gurantees.
  • HSBC China Manufacturing PMI (Final, July):Taking Its Time-Caijing
    nice that Caijing publishes the HSBC report in full//
    The final manufacturing PMI confirms only modest improvement of manufacturing conditions thanks to the initial effect of the earlier easing measures. The reversal of China’s growth slowdown is taking its time to unfold. Downside pressures persist with external markets still deteriorating and labour market conditions slackening. We still expect Beijing to step up policy easing in the coming months to support growth and employment.

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