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

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China’s neighborly relations look increasingly disharmonious.

Reuters has a great look at ASEAN’s recent failed summit in ASEAN Way founders in South China Sea storm. Efforts to silence discussion of the South China Sea issue were not always subtle:

As Philippine Foreign Minister Albert del Rosario began to raise the sensitive issue of the South China Sea at one of last week’s Asian summit meetings, his microphone went dead….A technical glitch, said the Cambodian hosts. Perhaps something more sinister, hinted some diplomats who were frustrated by Chinese ally Cambodia’s dogged efforts to keep the subject off the agenda.

The Financial Times has a telling quote from a leading Singapore academic and former official:

The outcome was “a disaster” for Asean, said Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at National University of Singapore….“This is clearly a warning signal to Asean that a new geopolitical struggle is breaking out between the US and China in south-east Asia,” he said.

Walter Russell Mead makes the point that:

It is more of a technical and procedural win for China than a substantive one. China’s neighbors will continue to work towards a multilateral approach on this issue, the United States will continue to support them, and China will still pay a diplomatic and political price for its stand.

China’s one party system probably does not create the right culture to build effective diplomacy, in spite of all the bromides to Sun Tsu and harmony.

Russia fired warning shots and then detained two Chinese fishing boats that had entered Russia’s EEZ. Pravda published a provocative but inaccurate piece claiming that the “sneaky Chinese” have territorial claims to nearly 20 countries and another Russian media report warns that China may go to war with Vietnam to shore up support.

Japan sent its ambassador back to China after instructing him “to inform Beijing accurately of Japan’s proposal to place the Senkaku Islands under state ownership”. On Tuesday the Global Times warned Japan about the Senkaku/Diaoyu issue and the dangers of another prime ministerial visit to the Yasukuni shrine:

A confrontation of public opinion may be more disastrous than hostilities between the two governments. Is Asia heading toward a dangerous public opinion showdown? If the Japanese government encourages such a trend within Japan, it may start a chain reaction. Room for negotiation in Asia will gradually be squeezed out.

China’s robust public opinion often imitates blundering words from Japan’s extreme public figures on the issues of the Diaoyu Islands and Yasukuni Shrine visits.

Asia is no longer in an era when governments alone can resolve public issues. Public opinion will be a prime factor shaping public policy. But if governments let public opinion off the leash, Asia will be ushered into an uncertain future when the possibility of war cannot be ruled out.

Contentious public opinion has diverted the attention of countries to territorial disputes. Development, also a core issue, has lost its appeal in public opinion. For now, diplomatic toughness between Asian countries is more or less just public posturing. But once a hostile situation is formed, it is difficult to reverse.

Japan mustn’t be shepherded by politicians such as Ishihara. Rationality must come back to Japanese politics, otherwise confrontation in Asia will spiral out of control.

Just bluster all around? Or potentially something much more dangerous, especially as China and Vietnam’s economies are sputtering?

The Variable Interest Entity (VIE) issue is back with the news that the SEC has opened a formal investigation of New Oriental Education. The announcement dropped EDU 34% on the day and dragged down most other US-listed China stocks, the majority of which also use VIE structures. There is no apparent accusation of fraudulent accounting, unlike with Ambow, another Chinese education company whose stock blew up last week on the resignation of the CFO and allegations of 2008 financial impropriety. Ambow and New Oriental are not sketchy reverse merger stocks; they had blue chip underwriters for their IPOs and PWC audits Ambow, Deloitte audits New Oriental.

Paul Gillis examined New Oriental’s problems in a post earlier today:

EDU announced the investigation in the same call as it announced its fourth quarter earnings. It said that Deloitte had not finished its audit of the accounts for the year ended May 31, 2012. Deloitte is in a real pickle here. They are already up to their eyeballs in trouble with the SEC, and if they sign off on these accounts they could be setting themselves up for more. Deloitte’s signoff, or refusal to do so, will be the first indication as to the seriousness of the SEC’s challenge to consolidation.

What are the risks that this spreads to other companies? It is tough to say, since we do not know specifically what the SEC is focused upon. If Deloitte refuses to sign off on the May 31 numbers, then I expect it spreads very quickly. If instead, it is a company specific issue (such as an allegation of lying to the SEC) then the problem may be contained to EDU.

It is starting to look like shorting almost anything China is 2012’s trading version of shooting fish in a barrel.

For fun, I posted to Twitter some pictures I took when I was in Beijing in 1989. I have a lot more, but the negatives are eluding me right now.

The best way to read this blog is to subscribe by email, especially if you are in China, as Sinocism is still mostly blocked by the GFW. The email signup page is here, outside the GFW. You can also follow me on @niubi or Sina Weibo @billbishop. Comments/tips/suggestions/donations are welcome, and feel free to forward/recommend to friends. Thanks for reading.

Today’s links:

• South China Sea issue divides Asean – FT.com
• TODAYonline | World | ASEAN, neutral or neutered?
  Perfect neutrality is impossible, when some of its members are formal allies with one power, or receive large amounts of high-profile aid from another. But open and healthy dialogue about the fullest possible range of issues is critical for ASEAN-led dialogues to remain relevant.For this, each ASEAN member must be willing to keep the group’s interest as a whole in view, and not focus solely on its bilateral ties with China or America. Otherwise ASEAN will not only fail to be neutral, but be ineffective and indeed neutered.
• Iran arrests oil export decline as China buys more | Reuters
  Iran is set to arrest a slide in oil shipments in July as China increases imports to a record high to amount to more than half Iran’s crude exports, an industry report said.
• Gold-trading ring took in billions|Economy|chinadaily.com.cn
  Police in Central China’s Henan province rounded up 33 people suspected of illegal gold-futures trading in a case involving more than 5,000 investors and at least 380 billion yuan ($59.62 billion).
  The suspects, who had been trading since October 2008, had never registered with industrial and commercial authorities, as required by the law, said Guo Congbin, director of Luoyang public security bureau, on Tuesday
• China has territorial claims to nearly 20 countries – English pravda.ru
  They are silent about the “Iodo island” (the Chinese version is Suenchzhao. – Ed) in the East China Sea. The sneaky Chinese took the principle of dividing the Arctic as an example and now claim that the underwater ridge of this tiny piece of land is under close control of the Chinese. Since the Iodo is closer to Korea, in 2003 the Koreans built an uninhabitable marine research station there. From the standpoint of the international law, this rock in general should not be the subject of a debate.
• Tax revenue too high – People’s Daily Online
  However, despite their claim that they are abiding by the rules, local governments seem to be tightening the screw on businesses making it even harder for them to navigate the uncertainties…As the corporate sector holds the key to stable growth and job creation, a more predictable taxation system is a must.
• US stirs up conflict among Asian countries as part of rebalancing strategy – People’s Daily Online
  Stirring up tensions and conflict among Asian countries has been an important way for the Obama administration to implement its rebalancing strategy. Objectively speaking, there remain many unresolved territorial disputes in Asia, and certain neighboring countries are worried about and afraid of a rapidly rising China. U.S. policymakers have taken advantage of this situation to rebalance their national economic and security interests toward Asia.
• 赵紫阳大秘文集面世 学者料成禁书_多维新闻网
  the collected works of zhao ziyang’s secretary bao tong go on sale in hong kong
• 赵紫阳在内蒙古-炎黄春秋
  the yanhuang chunqiu essay on Zhao Ziyang–“Zhao Ziyang in Inner Mongolia”
• 炎黄春秋忆赵紫阳勤俭亲民_多维新闻网
  latest issue of yanhuang chunqiu has essay about zhao ziyang
  中国敢言杂志《炎黄春秋》2012年第七期再次刊登怀念前中共总书记赵紫阳的文章，称赞赵紫阳爱下乡与农牧民促膝谈心、不通知地方政府接待、睡会议室等故事，展现赵紫阳亲民、勤俭等形象。
• 中共五巨头齐现信访会 政法系统改革入深水区_多维新闻网
  more from duowei on reforms to politics and law system
• South China Sea tensions deliberately stirred up with outside help – Globaltimes.cn
  The last major principle in the international law is promissory estoppel, which means you must not withdraw your promises. Vietnam has acknowledged in the past that the Xisha and Nansha Islands belong to China and the Philippines also once acknowledged Huangyan Island as China’s territory.So it is illegal and unreasonable for Vietnam and the Philippines to expand their exclusive economic zone into Chinese territories just because they signed the UN treaty. These acts are a violation of promissory estoppel.The article was based upon a speech given by Zhu Chenghu, at the World Peace Forum in Beijing. Zhu is director-general and professor at the Academic Department of Strategic Studies of the National Defence University
• Bargain govt car auctions prompt graft accusations – Globaltimes.cn
  A recent auction of government cars in Central China’s Henan Province has fueled heated controversy after they were sold at extremely low prices, prompting experts to call for transparency to prevent the loss of state assets
• Lexington: The China-bashing syndrome | The Economist
  The trouble with such talk is that it reinforces the feeling among China’s leaders that America is out to thwart their country’s “peaceful rise”. The fact that both parties are happy to portray China as the bogeyman of globalisation creates an impression of uniform hostility. That, in turn, undermines America’s message that China is unduly paranoid and defensive. It also disenfranchises those American voters who would like to express a more optimistic view of the consequences of commerce.
• CNOOC says S.China Sea blocks tender progressing well | Reuters
  CNOOC, China’s top offshore oil producer, said on Tuesday a tender issued last month to invite firms to bid for oil and gas blocks in the South China Sea is progressing well, attracting interest from companies including from some U.S.-based ones.
  The state-run firm in late June invited foreign companies to jointly develop nine blocks in the western part of the South China Sea, a move Vietnam said was illegal because the blocks overlap its territorial waters and ownership is disputed.
• 最小的公租房小区|最小|公租|小区_21世纪网
  这块竞拍的土地是北京大兴区庞各庄镇改造4号地。该地经过72轮竞价，最终被河北众美房地产开发有限公司以4.8亿总价竞得，溢价率为46.08%，最终核算楼面价为4486元/平方米。值得注意的是，此次土地竞拍在触及4.8亿元价格上限后，只有河北众美确认参与配建公租房面积拍卖环节，而公租房竞拍环节是从100平方米开始竞拍的，所以河北众美成为唯一一家举牌的开发商，也因此该地块仅需配建100平方米公租房。
• 政府表态“三不”|政府|表态|三不_21世纪网
  did not realize solar firm LDK is in so much financial trouble, report says LDK may be seeking to be nationalized//
  7月16日，有媒体报道称，7月12日召开的新余市八届人大常委会第七次会议上，审议通过了市人民政府关于将江西赛维LDK公司向华融国际信托有限责任公司偿还信托贷款的缺口资金纳入同期年度财政预算的议案。而赛维在上述信托中的借款余额约为7.55亿元，引发地方政府帮助企业还贷的巨大争议。
• Chongqing Court Convicts 18 of Running $10 Billion Money-Smuggling Ring in China – WSJ.com
  A Chinese court in Chongqing convicted 18 people on Tuesday of running a nearly $10 billion money-smuggling ring, according to an attorney involved, giving Chinese officials one of their biggest victories yet in their efforts to stop the illegal flow of funds.
• Heard on the Street: China’s Expanding Outbound Investment Appetite – WSJ.com
  Foreign direct investment in China’s economy came in at $59.1 billion in the first half of 2012, down 3% year-to-year. That reflects slower economic growth, which makes China a less attractive place to invest. A remission in yuan appreciation, falling property prices, and dismal mainland equity markets have taken the shine off the China bet, too.
  The story on China’s outbound investment is the reverse. Overseas direct investment in the first half came in at $35.4 billion, up 48% year-to-year. That reflects a combination of abundant cash on the books of Chinese firms, and bargains to be had as foreign asset prices remain depressed.
• Working together is the best way, Wen says|chinadaily.com.cn
  Premier Wen Jiabao stressed the importance of consultation to address the trade balance during a meeting with China-US business leaders, officials and former officials in Beijing on Tuesday. Wen also highlighted the benefits of cooperation.
• Yongshu Reef is heart of Nansha Islands[1]|chinadaily.com.cn
  Soldiers receive supplies from a fishing boat near the Yongshu Reef, Nansha Islands, in China on July 16. Yongshu Reef, a coral atoll located about 740 sea miles away from Chinese mainland , is the administrative and military headquarters of Nansha Islands. High tide swallows the reefs in water 0.5 to 1 meter deep, while it reveals only a few rocks below the low tide. China successfully set up an ocean observatory and mobile services on the reef. About 100 people reside on Yongshu, which has big potential for development.
• Survey shows strong support for tax relief |Economy |chinadaily.com.cn
  Two-thirds of people polled in Guangzhou, Beijing and Shanghai support large-scale tax reductions that they believe will lead to lower prices, better social equality, decrease random government spending and increase individual wealth.
• Wenzhou bad loans jump |Markets |chinadaily.com.cn
  As of the end of June, the balance of bad loans reached 18.1 billion yuan ($2.8 billion), almost double the 9.4 billion yuan at the start of the year. The corresponding bad-loan ratio jumped to 2.69 percent, up from 1.33 percent at year-start.
• Beijing halts face-lift of ancient courtyard home |Society |chinadaily.com.cn
  where hong huang used to live. beautiful old house//
  Authorities have halted a project to give an ancient courtyard home in downtown Beijing a face-lift and issued a hefty fine to the construction firm and the courtyard’s owner, Beijing cultural heritage bureau said Tuesday.
  The century-old courtyard, No. 51 in Shijia Hutong, is better known as the former residence of Zhang Shizhao, a prominent scholar and politician in modern China history. After his death in 1973, the courtyard home was lived in by his daughter Zhang Hanzhi who once served as Chairman Mao’s English teacher and her husband Qiao Guanhua, a former foreign minister.
• Island exploration |Books |chinadaily.com.cn
  A garrison overlooking the crystal blue waters of Nansha Islands’ Jimei Reef.
• 温州公务接待“减肥”仅限工作餐 不含接待上级_新闻_腾讯网
• Beijing real estate market warming up: analysts – Xinhua | English.news.cn
  Real estate developers’ appetite for land bids seems to have recovered, as home sales grew in the Chinese capital more than one year after unprecedented tightening policies were introduced to control the property market, market analysts said.
  Two land bids hit high points on Tuesday. In the southern suburb of Daxing, a 53,870-square-meter plot was auctioned for 2.2 billion yuan (about 346 million U.S. dollars), according to the Beijing Land Reserve Center, a government body in charge of public land management.
• Senior official stresses stability prior to national congress – Xinhua | English.news.cn
  Zhou Yongkang, a senior official of the Communist Party of China (CPC), has called for confidence and more concrete methods to ensure social stability for the upcoming 18th National Congress of the CPC.
  Zhou, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, made the remarks Tuesday at a meeting on keeping social stability.
• China Focus: China’s Sansha starts forming government – Xinhua | English.news.cn
  Photo taken on July 17, 2012 shows a scene of a meeting of the Standing Committee of the Hainan Provincial People’s Congress in Haikou, capital of south China’s Hainan Province. China on Tuesday set up an organizing committee for the legislative body of Sansha, officially beginning the formation of the government of the newly established city in the South China Sea. The committee was set up by the Standing Committee of the Hainan Provincial People’s Congress on Tuesday morning. The State Council, or China’s cabinet, in June approved the establishment of Sansha, a prefectural-level city to administer the Xisha, Zhongsha and Nansha islands and the surrounding waters in the South China Sea
• Chinese Premier urges efforts to boost jobs – Xinhua | English.news.cn
  Premier Wen Jiabao on Tuesday called for more efforts to expand employment, urging authorities at all levels to prioritize job creation.
  Wen made the remarks at a national conference held in the Great Hall of the People to honor collectives and individuals that have made great contributions in boosting the country’s employment.
• Dictionary’s exclusion of gay terminology sparks criticism – Xinhua | English.news.cn
  The compilers of a newly-revised authoritative Chinese dictionary have come under fire for excluding a word commonly used to refer to the country’s growing homosexual community from the reference book.
  The Chinese term “tongzhi,” which literally translates as “comrade” in English, has been widely used by Chinese homosexuals to refer to themselves for years and has entered the popular lexicon as well. However, the word failed to find its way into the sixth edition of the Contemporary Chinese Dictionary.
• Drop in the Dirty Water Bucket – Caixin Online
  Will a 410 billion yuan government project be enough to finally rid China’s cities of unsafe drinking water?
• Hu Deping–The Integral Role of Integrity – Caixin Online
  Today’s businessmen would do well to remember why Ming Dynasty traders revered Guan Yu
• Falling property investment drives China H1 FDI drop | Reuters
  China’s foreign direct investment inflows fell 3 percent in the first half of 2012 versus last year, the Commerce Ministry said on Tuesday, the latest sign of intensifying headwinds facing the world’s second-largest economy as global growth slows.
• China Slowdown Stymies Plan to Curb Shadow-Banking Risks – Bloomberg
  China’s economic slowdown threatens to derail efforts to curb underground lending — measures championed by Premier Wen Jiabao as crucial to future growth.
  The country grew in the second quarter at the slowest pace since the depths of the global financial crisis in 2009, 7.6 percent, putting pressure on China’s leaders to boost stimulus spending. Wen’s proposals to rein in the shadow-banking system, estimated to be about one-third the size of official lending, may be sidelined as a result, according to half a dozen economists interviewed by Bloomberg News.
• Indonesia president warns over South China Sea | ABS-CBN News
  Indonesian President Susilo Bambang Yudhoyono Tuesday said there would be no quick resolution to competing territorial claims in the South China Sea, warning tensions must not be allowed to escalate.
• Politburo Standing Committee to revert to seven members: Duowei｜Politics｜News｜WantChinaTimes.com
  really?//
  Senior officials as well as Jiang Zemin are believed to have decided the lineup of the next leadership generation at the meeting at the Beidaihe resort in Hebei between July and August last year. As Hu’s successor, Xi Jinping will consult with the current president before making a final decision on the lineup, while the still-influential Jiang will be an adviser to review all candidates, in line with the party’s practice of ensuring continuity of policy and a smooth planned transition of power
• Capital Vue: China’s Electricity Demand Growth Drops Significantly In First Half
  According to Yu Yanshan, deputy director of the Office of the SERC, power consumption growth continued to slow down in the first half of this year, with total electricity consumption up 5.5% y/y to 2.3744 trillion kwh, with the growth rate down 6.7 percentage points from the same period last year. The electricity consumption of secondary industry grew by 3.76% in the first five months, lower than the electricity consumption growth of the entire society by 2.06 percentage points. Since the beginning of January this year, the industrial electricity consumption growth rate has been consistently lower than the growth of the entire society. Among the major electricity consumption industries, ferrous metals and building materials industry continued negative growth.
• China may go to war with Vietnam to shore up support: Russian media｜Politics｜News｜WantChinaTimes.com
  An article published in a Russian newspaper suggests that China’s government will launch a war against Vietnam over the South China Sea, both to establish sovereignty over disputed islands and consolidate the support of its public.
• LOST in the Senate | Via Meadia
  GOP kills ratification of law of the sea treaty, against the urging of us military//
  The treaty has been kicking around the Senate for twenty years, but support has recently grown as China asserts rather tenuous claims to disputed islands in surrounding waters. Beijing is a signatory to the treaty, along with 161 other countries. U.S. officials (including all living Republican former secretaries of state) worry that refusing to follow suit diminishes America’s leverage in dealing with China over these territorial clashes.
• As China Squeezes Nepal, Tibetan Escape Route Narrows | World | TIME.com
  Tibetans seeking to flee Chinese rule are finding their traditional passage of escape — via the Himalayan nation of Nepal — far more fraught and difficult than before
• Q. & A.: Searching for Perfect Pitch in Chinese Design : The New Yorker
  But when the global advertising business handed out awards last month at the annual Cannes Lions festival, one of the biggest prizes went to a surprising winner, the obscure twenty-year-old student artist from Hong Kong named Jonathan Mak Long. He had designed a serene outdoor ad for Coca-Cola, and the path that led him to the stage in France was no less surprising: after Steve Jobs died, last October, Mak dreamed up a little tribute—an Apple symbol subtly embedded with Jobs’s silhouette—and the image went viral.
• Chinese Draft Rule Could Prohibit Citizens and NGOs From Monitoring Air | Tea Leaf Nation
  enter Rule 81 of the Chinese environmental protection agency’s April 2009 innocuously-named draft document, “Environmental Monitoring Management and Regulations: Consultative Report (For Public Comment).”
  The money line: “Prior to official approval, no work unit or individual can in any shape or form publish environmental quality monitoring information from environmental monitoring equipment.”  If the rule were implemented and enforced, public air quality monitoring could become the sole province of the government once again.
• ASEAN Way founders in South China Sea storm | Reuters
• Cambodia Rules The Waves, And China Cheers | Via Meadia
  In the long run, this could be good for ASEAN. Many friends of the organization have long felt that the ASEAN tradition of requiring unanimous consent on every issue prevents the organization from living up to its potential. Cambodia’s veto of an agreement that its neighbors passionately support will prompt some thinking in other ASEAN countries about whether this approach really works.
• China’s financial slow boat speeding up – FT.com
  Beijing deserves credit for its accomplishments. After all, many observers had thought 2012 would be a quiet year for government initiatives. With the Communist party consumed by a once-in-a-decade leadership transition, there was supposed to be little appetite for policy experiments.
  But Beijing’s progress looks slow when set against the rapid pace of change in Chinese financial markets, which is occurring beyond the confines of the official reform agenda.
• SEC v EDU – the end of VIEs? | China Accounting Blog | Paul Gillis
  New Oriental Education and Technology Group (NYSE: EDU) dropped a bombshell in its fourth quarter earnings release this morning. The company reported that the SEC has issued a formal order of investigation captioned “In the Matter of New Oriental Education & Technology Group Inc.” The Company believes that the investigation concerns whether there is a sufficient basis for the consolidation of Beijing New Oriental Education & Technology (Group) Co., Ltd., a variable interest entity of the Company, and its wholly-owned subsidiaries, into the Company’s consolidated financial statements.
• New Oriental Education & Technology Group Inc. ADR EDU Q4 2012 Earnings Call Transcript
• Domestic Institutional Challenges Facing China’s Leadership on the Eve of the 18th Party Congress
  China’s institutional weaknesses, often misperceived as strengths, provide the principal challenges to the new, fifth-generation leadership and its ability to execute its policy preferences and meet the growing complexity of state and societal expectations
  Taiwan seek missing intelligence officer-RTHK  Taiwan has put a military intelligence officer on the wanted list after she failed to report to work following a holiday in Thailand last month. The lieutenant has been sacked by the military intelligence bureau and will face court martial for abandoning her post if she returns to the island. However, the defence ministry denied media reports alleging she had acquired important intelligence and defected to the mainland.

• China rail: back on track | beyondbrics  Andy Rothman, China macro strategist at CLSA, said that although China’s infrastructure spending has come in for criticism, much of the rail spending is on necessary upgrades such as double-tracking and electrification. “Although passenger rail gets the headlines, high-speed rail frees up the existing network for freight. And as well as manufacturing gains, rail has played a big role in income inequality. The gap in wages between coastal regions and the interior has narrowed, as it’s become possible to set up factories inland.” Rothman points out that due to transport bottlenecks, for some areas of the country it’s been easier to get coal from Indonesia rather than from within China. “The investments by and large make sense.”
• China steel hits 2012 record low | beyondbrics when Chinese steel prices sink, they carry a stark economic message. On Tuesday, the world’s most traded steel futures contract – the Shanghai rebar future – hit its 2012 low, with the most-traded January contract reaching Rmb3,848 per tonne, the lowest price the since the rebar future was launched in early 2009.
• 明镜网等接力报导：中共权力交接博弈，习近平“中枪” – 中国数字时代  Is it conceivable Bloomberg exposed details about xi jinping relatives’ wealth that the central disciplinary inspection commission didn’t find while vetting xi? rumors about his sister have been around for years, two family friends in Beijing who know the xi family knew all about her dealings, said they were widely known, didn’t see the big deal about the Bloomberg story, other than the embarrassment of having this so well documented. Why do so many assume that the Bloomberg story about xi family assets was the result of tip/tips by xi’s enemies? Maybe Bloomberg realized w gu kaiIai and bo xilai that they didnt need rumors & could find a lot in public filings, more than anyone realized?
• Peterson Perspectives Interview: More Slowdown in China  Nicholas R. Lardy assesses the latest Chinese economic output numbers, which show that a drop in exports and housing investment are contributing to slower growth.
• Already Valued at $4B, China’s Xiaomi Has Declared War on Apple | PandoDaily Apple could do it major damage if it released a <2000 RMB apple 4 for china, say when iphone 5 launches.// China’s answer to Apple occupies the 12th floor of a staid office tower in a sprawling commercial area of Beijing. It has no signage on the building’s exterior, so the only clue that suggests I’m in the right place is a standard directory plaque in the lobby that lists, among other companies, the name “Xiaomi Corporation.”
• China Railway Ministry Falls Behind Investment Schedule for Lack of Money-Caijing  China’s Ministry of Railways has completed just about one third of its planned fixed-asset investment and investment in infrastructure in the first half of this year for lack of money.
• Chinese Billionaire Huang to Revive Iceland Deal After Rejection – Bloomberg  Huang Nubo, the Chinese billionaire whose bid to buy Icelandic land was blocked by the local government last year, said he’s secured a deal to lease the property instead, helping him revive his resort project
• West to Gain as China Imports Rare Earths, Quest CEO Says – Bloomberg U.S. and Canadian producers of heavy rare earth metals are poised to benefit as China becomes a net importer of some of the materials as early as 2014, said Peter Cashin, chief executive officer of Quest Rare Minerals Ltd. (QRM)
• US sees record 1m visa request from China|China|chinadaily.com.cn  President Barack Obama’s initiative to boost international tourism has pushed the US government to process a record 1 million visa applications from China so far during fiscal 2012. “This extraordinary accomplishment represents visa processing growth of almost 43 percent over the same period last fiscal year, when we had processed just over 675,000 visa applications in China,” the State Department announced Thursday.
• China’s Soft Power Strategy in the Middle East | Brookings Institution  While the U.S. is looking more towards the Pacific, China’s needs are driving it more towards the Middle East. To fuel and sustain its economic growth, China is heavily reliant on Middle Eastern oil. The resource rich and volatile Middle East is a critical center of gravity for the Asia-Pacific and the key for China’s continued economic prosperity. Thus, while China builds military capability to project power closer to its shores, it is also leveraging its power into a new kind of anti-access and area denial (A2/AD) strategy in the Middle East. It is operating through mostly asymmetric means, effectively using its growing soft power to circumvent America’s traditional military strengths and significant sway in region.
• Am I a China Bear? « Patrick Chovanec Indeed I am worried — not thrilled, not vindicated — because contrary to stereotypes, I do not consider myself a “bear” on China.  In that respect, I would like to make a few points.  Because over the next few days I’m going to be saying some very negative, critical, and even scary things about China’s economy, these points are quite important.
• China’s solar frontier – YouTube  China’s far western province of Xinjiang is at the forefront of the nation’s newest energy push: renewable energy, and particularly solar power. Leslie Hook visits a remote desert village that draws all its power from an off grid solar project.
• 政治局委员们的知青岁月(组图)-搜狐滚动
• Top editor reshuffled at Guangzhou paper – China Media Project CMP has confirmed today that the editor-in-chief of the New Express, a spin-off of Guangzhou’s Yangcheng Evening News, has been shuffled sideways in a move that effectively spells his removal as editor-in-chief of the popular newspaper.
• Sotheby’s Sues Chinese Bidder for $3.5 Million Nonpayment – Scene Asia – WSJ Just ask Sotheby’s, who on Tuesday said it was suing a man from mainland China for 27.5 million Hong Kong dollars (US$3.5 million) plus interest, an amount the auction house claims he owes for 20 works of art he won at a Hong Kong sale. The lawsuit against Zhang Bo, whose address is in China’s Henan province, was filed over the weekend in Hong Kong’s High Court.
• Art World Unnerved by China’s Detention of Two –Gallery openings are a bit more subdued, anxious art dealers have been keeping a low profile, and several wealthy collectors have been barred from leaving China while the investigation continues. Auction house giants like Sotheby’s and Christie’s have been asked to cooperate with the authorities in what has become a wide-ranging investigation
• In Mongolia’s Boom Town, Hope and Fear – NYTimes.com  With the country on the brink of prosperity, Ms. Badamgarav is betting her future on her nation’s soaring aspirations. “Mongolians are like dogs just let off the chain,” she said. “We’re hungry to afford the good stuff.”

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