Today’s China Readings August 21, 2012

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

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Gu Kailai got death with a two-year reprieve and some experts say she could be free in as little as nine years. Her accomplice Zhang Xiaojun was sentenced to 9 years and 4 Chongqing policeman convicted of helping Gu cover up the crime received 11, 7, 5, and 5 years respectively. Gu will likely serve her sentence at Qincheng prison on the outskirts of Beijing, known to some as “China’s Club Fed”.

The Wall Street Journal reports that Chinese netizens were disappointed Gu did not receive the death penalty:

“A murder carried out according to a meticulous plan, and in the end it’s a suspended death sentence? How wonderful life is, how handy the law can be, as long as you have the Party to protect you,” popular newspaper columnist and social commentator Yao Bo wrote on Sina Corp.’s Weibo microblogging service.

The Washington Post’s William Wan has a scoop in his report China court gives Gu Kailai a suspended death sentence:

A source close to the case also described in detail on Monday for the first time the testimony that Bo Guagua, Gu’s son, wrote on behalf of his mother. The court did not use the son’s testimony, the person said, though the family gave it to Jiang Min, Gu’s court-appointed attorney.

“In the testimony, Bo Guagua asserted he didn’t meet Heywood and did not engage in anything with Heywood in recent years,” the person said.

Another source close to the family and familiar with the case confirmed the details about Bo Guagua’s testimony, saying, “In his testimony, Bo Guagua cleared up the hearsay about his mother and Heywood, which is not true.”

The assertions attributed to Gu’s son — who was studying until recently at Harvard University — cast doubts on the official narrative pushed by court officials and state-run media throughout Gu’s trial.

Court officials said Gu killed Heywood because he sent her son an email threatening him over business differences.

Heywood’s purported e-mail, written in English, was displayed in court with a Chinese translation as part of evidence at the Aug. 9 trial, which consisted almost entirely of prepared written testimony.

Who has custody of Heywood’s computers, hard drives, mobile devices, as well as access to and/or copies of his email, messaging, SNS and online storage accounts? The UK government should easily be able to verify the existence of the alleged email, as well as any electronic money transfers Heywood made. The UK government issued a short statement after Gu’s sentencing. I wonder if we will ever learn what London really knows about this case; so far there appear to have been surprisingly few leaks from the British side.

Burma’s decision to abolish direct media censorship led to much discussion on Sina Weibo. China’s current information management policies look increasingly untenable in the Weibo age, but things that appear unsustainable in China often persist much longer than people expect.

China’s two largest Youtube clones are now one, as Youku investors approved the acquisition of China rival Tudou. The merger may be closing just as SARFT begins a new regulatory push on Internet video. The video regulator has been focused on “cleaning up” traditional TV over the last few months but I am hearing about a meeting last week called by SARFT that may signal the start of increased pressure on the remaining online video services in China.

According to Xinhua multiple ministries/departments are planning new measures to stimulate consumption–多部委酝酿出台促消费新政 信用消费有望获鼓励. This week’s Caixin cover story is a good, reasoned look at capital outflows–资本流出中国.

Today’s links:

  • Companies in China Are Struggling to Hold on to Talent – TIME
    Wang Yinhong is a China CEO’s dream. He is also a China CEO’s nightmare. Trained at one of the country’s most elite universities, the 30-year-old Shanghai native has a degree in chemical engineering and an M.B.A. He is a bright, hardworking young employee — the kind of guy companies in any number of industries would die for. And the problem is, Wang knows it. He’s with his fourth company in seven years. “I keep getting better and better job offers, so I keep accepting new jobs,” says Wang, now working in Shanghai for a research-intensive biotech firm that just got an injection of venture capital. “I’ve gotten more money and more responsibility at each stop.”
  • 禹晋永涉嫌诈骗被批捕 汶川捐款与学历均造假_新闻_腾讯网
    fraud case of real estate developer yu jinyong a big deal on many levels
  • 孟学农兼任中直机关党校校长 曾两次引咎辞职_新闻_腾讯网
  • 房地产贷款增速反弹料难持续
  • 国务院督察组官员:房地产调控不必出台新政 – 新华时政 – 新华网
  • 人民日报-登高望远天地阔 ——写在《江泽民在电子工业部》出版之际
    long piece on page 13 of today’s people’s daily about publication of “Jiang Zemin in the Ministry of Electronics Industry”
  • 北京市将重点整治天安门地区秩序_网易新闻中心
    cleanup campaign launched around tiananmen square..getting ready…
  • 北京朝阳区将投资5000万元摆花迎接国庆十八大_新闻_腾讯网
    Beijing’s Chaoyang District to spend 50m RMB on flowers around the district in prep for National Day and the 18th Party Congress
  • With China Trial Over, Focus Turns to Fate of Official – nice to see that jeremy page is an alice miller fan// If Mr. Bo is dealt with internally by the party, a final decision on his fate could be announced by the autumn, but if he is turned over to the courts, many observers do not expect a trial until next year at the earliest. ..”In the cases of the two Chens, each man was subsequently turned over for criminal prosecution, resulting in lengthy prison terms,” wrote Alice Miller, a research fellow and expert on Chinese politics at the Hoover Institution, in a paper this month on the Bo affair. “A comparable fate likely awaits Bo Xilai.” ..She continued: “Bo’s removal in that respect therefore does not indicate a departure from the ‘rules of the game’ as played in the last two decades. The reform era initiated by Deng Xiaoping has seen the emergence of a more legalistic exit mechanism for removing high party leaders.”
  • Australia’s Resource Boom Losing Steam – Deal Journal Australia – WSJ
    The cutbacks are largely in response to China, which needs vast amounts of coal for its power stations and iron ore for the steel frames in its high-rise buildings, but where demand for commodities has been slowing. Iron-ore prices, which hit a record last year, are now at a 2½-year low, and aluminum and nickel prices also are holding near multi-year lows.
  • China says U.S. support for clean energy violates WTO rules | Reuters
    China’s Commerce Ministry said on Monday the United States must cut support for six government-backed renewable energy programs or face unspecified penalties, in the latest trade dispute between the world’s two largest economies.
  • China’s rural migrants key to consumption -government report | Reuters
    China’s domestic migrant labor force could power consumer spending growth in the world’s second biggest economy if workers had better access to basic welfare services in the cities where they live and work, a new government report says.
  • 人民日报-大国崛起新路的信心与定力(国际论坛)–钟 声
  • 舆情蓝皮书:微博首次曝光热点事件比例显著上升-中新网
  • CHINASCOPE – Public Opinion Blue Book: News Events Published on Micro Blogs Increased Significantly
    On August 18, 2012, the Chinese Social Sciences Academic Press and the Shanghai Jiaotong University Center for Public Opinion Research jointly published the 2012 Blue Book, “Chinese Public Opinion and Crisis Management.”
    According to the Blue Book, digital and online media continue to grow and, for the first time, have become the major channels in delivering breaking news. There has been a significant increase in news appearing on micro-blogs. Of all traditional media, newspapers have published the most breaking news, but they are falling behind the digital and online media. Statistics suggest that, in 2011, the breaking news carried by digital and online media increased 15 percent over 2007, and now accounts for 65 percent of all news reports, while traditional media only account for 30.8 percent.
  • News Analysis: Oil shale: Game changer for China? – Xinhua |
    China has about 240 billion tonnes of accessible oil shale reserves. About 10 million tonnes of oil can be produced from these reserves using a chemical process called retorting, according to figures from China’s National Energy Administration (NEA).
  • Aaron Friedberg–Bucking Beijing | Foreign Affairs
    China’s recent behavior may prove helpful in this regard. Beijing’s truculence has caused deep anxiety among many of China’s neighbors, making them more inclined than ever to work together to balance the Asian giant. For this reason, other governments in the region have generally welcomed the more muscular rhetoric that has been emanating from Washington in recent months. But they remain uncertain whether the United States will have the resources and the resolve to back up its brave words. Whoever is elected president in November will have to take steps to dispel these doubts. Developing and funding a credible strategy for countering China’s buildup and adopting a tougher approach to economic engagement will both be important. So, too, will be continuing to stand firm on issues of principle. As it engages and balances Beijing, the United States must do what it can to encourage what George Kennan might have termed the “gradual mellowing” of Chinese power.
  • Spirited into the world of e-commerce |Companies |
    Moutai is again testing the waters of e-commerce after an initial trial saw poor sales because of logistical problems. Experts say the impact will be very limited as the liquor e-commerce market in China is still in embryonic form compared with mature online industries such as garments.
  • Property tax trial likely to expand — Shanghai Daily
    THE central provinces of Hubei and Hunan may be next to implement a property tax trial as detailed rules are being drafted, a newspaper under the Ministry of Land and Resources said yesterday, citing unnamed sources at the State Administration of Taxation.
    The expanded program in the two provinces may impose a tax on second homes, whether newly bought or not, owned by local families, the paper said
  • The Sino-Japanese Naval War of 2012 – By James R. Holmes | Foreign Policy
    OK, it’s probably not going to happen. But if it did, who would win?
  • Game of Thrones: Sri Lanka Stiffs India for China | Via Meadia
    After promising a prime plot of land in central Colombo for an Indian cultural center, the Sri Lankan government has backtracked and sold the land to China’s state-owned aircraft manufacturer, which maintains close ties to Pakistan’s military. Surprised at the slight, India’s high commission lodged a “strong” protest with the Sri Lankan government.
  • China: New visa rules may trip up tourists, business travelers –
    On Aug. 1, the Chinese government started requiring that travelers seeking tourist visas, officially known as L visas, submit a letter of invitation and photocopies of the traveler’s round-trip ticket and hotel reservations.
    To obtain a business, or F Visa, applicants must now have an invitation letter or “confirmation letter of invitation” issued by an authorized Chinese agency. This is in addition to an invitation letter issued by a Chinese local government, company, corporation or institution.
  • China’s Hottest Wheels for Executives: A Buick Minivan – Bloomberg
    the Cadillac of minivans, we have a 2006 one, the new ones are fancier//
    If it’s surprising that China’s business elite prefer these big, boxy models to luxury sedans, it’s perhaps more striking that GM’s Buick GL8 is the hands-down leader. The Detroit-based automaker did so poorly in minivans that it quit making them in the U.S., where they are often considered the least-glamorous family haulers, spurned by moms who prefer the style of a sport- utility vehicle.
  • Balancing the Give and Take in GM’s Chinese Partnership –  SHANGHAI—The next generations of General Motors Co.’s GM +3.19% Cadillacs will have softer corners, dashboards with more gadgetry and plusher rear seats. The U.S. auto maker is tweaking the iconic American brand to make it more palatable to Chinese buyers and GM’s Chinese partner, even though Cadillac hasn’t sold strongly here.
  • Jing Daily: Louis Vuitton’s Inland (China) Empire Set To Grow Even Larger
    Louis Vuitton is set to open its first Anhui province location store at Intime Center in capital city Hefei. Little known outside of China, and certainly not widely known within China as a very luxurious city, over the last several years brands like Gucci, Burberry and Bally have transitioned from small sales counters at malls like Wanqian (万千百货), Shangzhidu (商之都) and Drum Tower Business Plaza (鼓楼商厦) to full-fledged locations at Intime, making it the city’s premier high-end mall over the course of one year.
  • Mass. GOP chairman’s software firm spent company money on politics, lawsuit contends – Metro – The Boston Globe  Chai Ling’s husband// The chairman of the Massachusetts Republican Party faces a lawsuit from a former employee at his software firm, who contends the company squandered money on political interests and illegally compensated employees for their campaign contributions to Republican politicians. The suit, filed in Suffolk Superior Court on Friday, targets Robert A. Maginn Jr., the chief executive of the privately held education software firm Jenzabar, Inc., as well as his wife and several other corporate officers.
  • The Two Chinas at the Olympics – Damien Ma – The Atlantic
    Who had a bigger impact on the London games, China’s athletes or its manufacturing workers?
  • MOFCOM, Wal-Mart and the VIE | China Accounting Blog | Paul Gillis
    My view is that this case is evidence that MOFCOM is well aware of VIE structures, but is not doing anything in this case other than making sure Wal-Mart does not expand the use of Niu Hai’s existing VIE. I don’t think that Chinese regulators have decided what to do with VIEs.
  • 新华社:人民币终结单边升值_国内财经_新浪财经_新浪网
  • As a Harvard Alum, I Apologize – James Fallows – The Atlantic
    The big claims and conclusions Niall Ferguson has offered in recent years, with the extra authority of his academic standing, have been attention-getting and mostly wrong. Joe Weisenthal of Business Insider has an analysis here (and please also see this from Noah Smith). For instance:
    – U.S. budget deficits were going to lead to a US-China breakup. They didn’t.
    – U.S. budget deficits were going to drive bond rates sky high. The opposite has occurred.
    – U.S. budget deficits will make us like Greece. They have not.
    – A year ago, Ferguson warned that we were on the verge of a damaging new round of inflation. We were not.
    You can say these things if you’re a talk-show host or a combatant on some cable-news gabfest. To me this is not what the tradition of Veritas and the search for scholarly enlightenment is supposed to exemplify. Seriously, I wonder if one of Ferguson’s students will have the panache to turn in a similar paper to see how it fares.
  • 揭秘中国第一监狱:秦城监狱(组图)_读书频道_凤凰网
  • Qincheng Prison – Wikipedia, the free encyclopedia
  • 亲历秦城监狱监管岁月_舒云_新浪博客
  • 秦城监狱 – 维基百科,自由的百科全书
  • 陈希同陈良宇狱中近况:可看书读报看电视不穿囚服–时政–人民网
  • China’s Club Fed: A Look Inside Qincheng Prison– China Media |
    Editor’s note: The following article was translated and edited from an article that appeared in the Shenzhen Economic Daily newspaper. The article provides a surprisingly candid introduction to the history of Qincheng Prison, including its Soviet roots, the treatment of the prisoners (many of who were/are high officials) and its inevitable “retirement”.
  • WildChina Blog » Shangri-La Family Style
  • China: service tax reforms to spread, as other jurisidictions follow Shanghai | beyondbrics
    China is speeding up tax reforms to boost its weak service sector after in which the system has been skewed in favour of the country’s manufacturing industry.
    Under the current taxation system, the country’s service sector pays business tax of 3-20 per cent on sales, which represents a heavier tax burden than faced by the manufacturing sector, which pays value added tax of 13-17 per cent on gross profit.  From September 1, things will be different.
  • China’s ‘Model Workers’ Head to Cyberspace | China Power
    The Chinese press has recently introduced two new model workers active in cybersecurity: Li Congna (李聪娜) of the PLA, and the “Legendary Female Cyber Cop,” Gao Yuan (高 媛) of the Beijing Public Security Bureau’s Cybersecurity Defense Division. The stories of these two women repeat many of the same tropes from campaigns in the 1950s and 1960s, especially those focused on what historian Tina Mai Chen calls “female kind first“—the first woman tractor driver, welder, or train conductor.
  • Russia, China, and America’s Supersonic Missile Race | Flashpoints
    We’re probably years from seeing the deployment of supersonic cruise missiles, but given the clear advantages in range, speed, and precision (not to mention the benefits of having a non-nuclear strategic strike force), this is technology that has far too much appeal to be abandoned. The arms race, it seems, has entered a supersonic phase.
  • Simmering Chinese Anger at Japan Is Now on the Boil –
    As we reported on Rendezvous last week, the dispute over the islands is not about fishing grounds, the control of sea lanes or possible mother lodes of oil and gas.
    That view “misses the point entirely,” Mr. Sneider said.
    “It’s not about these rocks,” he said. “It’s about much, much more. It’s identity, first and foremost. It’s pride.”
  • Township official sacked after pushing cameraman into pond – Xinhua |
    The journalist with the Zhejiang Provincial TV Station, who was reporting about fish being killed in the pond, ignored Shi’s requests to stop shooting. His camera worth 220,000 yuan (34,700 U.S. dollars) was destroyed after it also went into the pond.
    The latest development has eased anger in cyberspace, where there have been demands for an investigation and the safeguard of media’s supervisory role.
  • “China’s Show Trial of the Century” by Ma Jian | Project Syndicate
  • Locals fight tourism on Tibet’s holy lakes | chinadialogue
    Public outrage has halted a damaging cruise boat project on one of Tibet’s sacred lakes, but unrestrained tourism remains a threat. Liu Jianqiang reports.
  • The Killing of a Miner in Zambia – Caixin Online
    Steady undercurrents of dissatisfaction among workers and mine management culminated in yet another tragedy at the Collum Coal Mine
  • 尚德被欺诈案疑云_杂志频道_财新网
  • 银行资金池的秘密_杂志频道_财新网
  • 中共官方延迟开腔 薄谷案通稿前后存疑_多维新闻网
  • 汪洋懂得审时度势 “三打”急刹转“两建”_多维新闻网 interesting happenings in guangdong
  • FT Alphaville » China’s economy growing in the wrong places Which makes it hard to see much positive about property prices rebounding while little else improves. The ailing Shanghai stock market is at a new three-year low today, on the aforementioned fears that the property market upturn will make monetary stimulus measures more difficult, as outlined by BAML analysts above. Nomura’s Zhang Zhiwei, usually cautiously positive on China, sees a similar problem
  • The American Mandarin Society – Supporting the development of the future stewards of U.S.-China relations The American Mandarin Society is a non-partisan, non-profit, members-based organization that serves as a broad forum for the growing numbers of Americans who have studied, researched, and lived in Greater China since the early 1980’s, all of whom have Mandarin language capabilities. The Society aims to facilitate communication, intellectual synergies, cultural and educational exchanges, and other productive collaboration among Americans and Chinese in an effort to support the development of future stewards of U.S.-China relations.
  • HTC: not so smart now | beyondbrics Analysts often say that the commoditisation of smartphones (i.e., the stage at which making a phone with good hardware is no longer restricted to market-leading companies like Apple and HTC but spreads to rivals) is upon us. That’s a problem for all top-flight companies, but HTC is particularly vulnerable given its dependence on China, the market which is home base for many low-cost phone companies. Expect more strains to show in the coming months.
  • Going Too Far: China Conflicted Over Anti-Japan Protests – China Real Time Report – WSJ  But in a country where deep-seated mistrust of Japan is apparent even in China’s most cosmopolitan cities, an unusual number of voices both online and in state-run media argued that protesters from Shenzhen to Shenyang went too far. “This type of “patriotism” will never receive applause,” read a front-page editorial in the party-backed China Youth Daily. “It will only make true patriots feel ashamed.”
  • Yao Ming shoots into world of private equity|Economy|News| The 7’6″ former Houston Rockets center, who reportedly lost US$7 million on the stock exchange recently, has been involved in two Chinese private equity fund management companies since 2011. The future scope of the two funds is said to total 6.6 billion yuan (US$1.1 billion).
  • China’s winemakers call for probes on EU imports – Xinhua | Wang Zuming, head of the wine division of the China Alcoholic Drinks Association, told Xinhua, that winemakers want the ministry to look into the increasing amount of EU imports and its impact on the domestic industry. EU wine imports surged to 169,114 kiloliters, in 2011, from 35,944 kiloliters, in 2008, at an annual pace of 67.71 percent. In the past four years, its market share in China increased from 4.94 percent to 14.76 percent, Wang said.
  • Rubber Seen Dropping as Chinese Inventories May Equal Record – Bloomberg  Rubber is poised to drop as sustained supplies from Southeast Asia and falling demand from China’s tiremakers push stockpiles to match their record at Qingdao port, the main shipment hub, an industry executive said. Futures fell for the first time in four days.
  • Value Added? Undervalued Currency Isn’t Beijing’s Only Export Trick – China Real Time Report – WSJ  a new study by three researchers say Beijing has used a far more obscure tool to manage trade: fiddling with the level of tax rebates, which can greatly boost or reduce the profits of Chinese exporters.
  • China’s Big Four boost new bank loans in Aug first half: report | Reuters China’s top four banks extended 70 billion yuan ($11 billion) of new local-currency loans during the first half of August, up from 50 billion yuan in the same period a month earlier, an official newspaper reported on Monday.
  • Zhejiang fisherman earns US$470,000 for a fish|Society|News| To the fisherman’s surprise, fishmongers starting bidding incredible amounts for the fish when they identified it as a Chinese bahaba, a valuable fish that is compared to gold in the fish market. The fish was eventually sold to a fishmonger that paid the fisherman at the price of 40,000 yuan (US$6,200) per kilogram. The fisherman has earned 3 million yuan for the fish and can now afford a bigger boat to replace his small one. The fish, sometimes found off the coast of China, is listed as an endangered fish by the country. Its outrageously high price in the market is owed to its value in Chinese medicine, as its bladder can be used to cure diseases related to the lungs and heart.
  • Hanoi bans China TV in reassertion of South China Sea stance|Politics|News| After air patrols conducted by Su-27 fighters from Vietnam People’s Air Force over the Spratly Islands and the establishment of Sansha by the Chinese government, Hanoi has again demonstrated its hostility towards Beijing by banning television shows from China. Hoang Huu Luong, director general of Hanoi’s Press Department under the Ministry of Information and Communications, stated that broadcasts of Chinese and Korean TV series will be suspended in Vietnam during a journalism conference on Aug 16, reports by our sister newspaper, Want Daily.
  • James Webb: The South China Sea’s Gathering Storm – While America’s attention is distracted by the presidential campaign, all of East Asia is watching what the U.S. will do about Chinese actions in the South China Sea. They know a test when they see one. They are waiting to see whether America will live up to its uncomfortable but necessary role as the true guarantor of stability in East Asia, or whether the region will again be dominated by belligerence and intimidation. The Chinese of 1931 understood this threat and lived through the consequences of an international community’s failure to address it. The question is whether the China of 2012 truly wishes to resolve issues through acceptable international standards, and whether the America of 2012 has the will and the capacity to insist that this approach is the only path toward stability. ..Mr. Webb, a Democrat, is a U.S. senator from Virginia.
  • Diaoyu solution lies in strength and unity – The reluctance to resort to military means doesn’t mean China is afraid of war. China will launch a reciprocal competition with Japan over Diaoyu. For example, if Japan sends Self-Defense Forces, it should expect the participation of China’s navy ships.

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