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

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Today Beijing launches a long overdue campaign to crack down on foreigners illegally working and living in Beijing. I am surprised it has taken this long. If you are in Beijing make sure you carry your passport with you at all times. The campaign is popular with Chinese and as of this writing it is the number one topic on Sina Weibo. The police are encouraging citizens to give them tips about illegal foreigners, so be nice.

Someone could start a “toxic food du jour” blog for China. Today’s scandal is about fake duck blood for sale at one of Beijing’s most famous food shops. Daoxiangcun stores were found selling fake duck blood “made from poor-quality pork blood and might be mixed with formaldehyde and industrial pigment, which are harmful to liver and kidney.” Some readers might want to reduce their duck blood consumption for a bit…

Yesterday we discussed the Financial Times article claiming that security czar Zhou Yongkang had effectively been kneecapped and that Meng Jianzhu had taken over his duties. For those who think this somehow means a victory for the oft-referenced, rarely (never?) seen liberals/reformers/softliners, Willy Lam reminds us that Zhou’s stability preservation (维稳) would not have happened without the support of the top leadership and that:

there seems to be a strong consensus among the PBSC members—including Xi Jinping and Li Keqiang, who are expected to form the axis of the upcoming Fifth-Generation leadership—that the leadership must pull out all the stops to boost security and stability. The urge to preserve the Maoist “one voice chamber” has grown in light of fissures at the CCP’s top echelons exposed by the Bo Xilai scandal (“Beijing’s Post-Bo Xilai Loyalty Drive Could Blunt Calls for Reform, China Brief, March 30). As was the case in 1989, the party leadership appears anxious to prevent dissidents from exploiting factional strife within the CCP to “make propaganda” for Western-style political reforms. This perhaps explains why, despite Beijing’s pledge to continue “human rights dialogues” with the United States and other Western countries, the wei-wen apparatus has been cracking down even harder on so-called destabilizing agents.

Last year I wrote a post about China’s cybercrats on Digicha, my blog about the Chinese Internet, in which I quote from Meng Jianzhu. Don’t expect a softer approach to the Internet any time soon:

Writing in the Party journal Seeking Truth in December 2009, Meng Jianzhu, the Minister of Public Security, wrote: “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.” Censorship of foreign content has shifted from news sites to Web 2.0 services with superior communication and organizing functions, such as Twitter and Facebook, which the government accuses of becoming a rallying point for dissidents and separatists. A report on new media published by the Chinese Academy of Social Sciences in July bluntly states: “Foreign social networking sites have become a tool for political subversion used by Western nations.”

The FT article about Zhou Yongkang said that he was getting a lot of exposure in the official press in order to maintain the illusion of leadership unity. Whether or not that is really what is going on, today he gets a lot of exposure with the publication of the transcript of his May 9 speech at China’s Politics and Law University in a page 2 spread in People’s Daily.

I welcome feedback on what you like and don’t like about this daily post, and as always appreciate any tips about things you think should included.

Here are today’s suggested readings:

• 北京清理“三非”外国人 | 新浪微博-随时随地分享身边的新鲜事儿
  BEIJING TIDYING UP THE “THREE ILLEGALS” FOREIGNERS IS THE NUMBER 1 TOPIC ON SINA WEIBO
• The Rise of China’s Cybercrats | DigiCha
  FOR THOSE WHO BELIEVE THE FT STORY ABOUT THE KNEECAPPING OF ZHOU YONGKANG, DO NOT ASSUME HIS SUCCESOR IS SOMEHOW A REFORMER/LIBERAL/SOFTLINER, AT LEAST WHEN IT COMES TO INTERNET//
  Writing in the Party journal Seeking Truth in December 2009, Meng Jianzhu, the Minister of Public Security, wrote: “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.” Censorship of foreign content has shifted from news sites to Web 2.0 services with superior communication and organizing functions, such as Twitter and Facebook, which the government accuses of becoming a rallying point for dissidents and separatists. A report on new media published by the Chinese Academy of Social Sciences in July bluntly states: “Foreign social networking sites have become a tool for political subversion used by Western nations.”
• Sina Weibo’s Fretful Hunt for Profit Platform – Caixin Online
  ABRIDGED TRANSLATION OF VERY LONG ARTICLE THAT RAN IN LAST WEEK’S CAIXIN//
  Despite an enormous user base of some 300 million microbloggers across China, Sina Weibo is losing money. And its executives are fretting…
  Sina Weibo’s long-range plan calls for building a “social mapping plus interest mapping” platform. The idea is to offer users a two-way communications system like Facebook or a hybrid “Twitter-Facebook” platform.
  It’s unclear whether this goal can be reached – or make money.
  The authors of a recent Sina financial report admitted, “We have no way of ensuring that the profit models employed by other microblogging services and social networking service providers are suitable to weibo.”
  A mid-level Sina manager told Caixin many at the company feel Sina Weibo lacks a clear strategic plan. Business has stagnated, he said, and as of April some departments had yet to complete their annual plans in part because top executives and mid-level managers have clashed over product initiatives.
  “Maybe upper-level management hasn’t thought it out,” he said. “It feels a little chaotic.”
• The Battle over Securities Reform – Caixin Online
  Recent flurry of regulatory changes is heartening, but further progress will require a long, difficult fight
• Asset Managers Say ‘In Real Estate We Trust’ – Caixin Online
  AMCs shore up funds that financed property developers in lean times, but a regulator shows little faith
• Authorities Say Yunnan Bomb Suspect Misidentified – Caixin Online
  The identification of a suicide bomb suspect in Yunnan was contested by eyewitness reports
• 放贷难_专题频道_财新网
  NEW CAIXIN COVER STORY ON BANKS AND LOAN-MAKING
• China May Give Foreign Pension Funds New Investment Opportunities – WSJ.com
  China is considering setting up a new way for foreign pension funds to invest in its vast capital markets, according to people familiar with the matter, its latest effort to prop up the country’s listless stock market.
• Chinese Group Buying Site Offers ‘Dream’ Tour of Disputed Huangyan Island – China Real Time Report – WSJ
  more than 50,000 Chinese netizens responded to a lottery posted over the weekend by group-buying site Meituan for a trip to the Scarborough Shoal, according to a local media report. The area, also known in Chinese as Huangyan Island, has been at the center of a growing dispute between China and the Philippines, with each side confronting the other over the contested territory.
• RENN Rises: Q1 Beats, Q2 Rev View Light – Tech Trader Daily – Barrons.com
  NOT THE FACEBOOK OF CHINA, FOR SURE//
  Shares of Renren (RENN), sometimes called The Facebook of China, are up 12 cents, or 2%, at $5.61 in late trading after the company this evening reported Q1 revenue that topped analysts’ expectations and a smaller-than-expected net loss per share in line with estimates, but projected the current quarter’s sales below consensus.
  Revenue in the three months ended in March rose 56%, year over year, to $32.1 million, yielding a net loss of 3 cents.
  Analysts had been modeling $29.7 million and a 4-cent loss, according to FactSet.
  For the current quarter, the company sees revenue of $41 million to $43 million, versus the consensus $45.9 million.
• 人民日报-为加快建设社会主义法治国家 培养更多优秀人才提供坚实理论支撑 ——在同中国政法大学师生代表座谈时的讲话 （2012年5月9日）
  MASSIVE PAGE 2 PEOPLE’S DAILY SPREAD FOR ZHOU YONGKANG’S 5.9 CHINESE POLITICS AND LAW UNIVERSITY SPEECH.
• Nation’s oldest brewery unearthed in northeast China – Xinhua | English.news.cn
  The devices date back to the Liao Dynasty (916-1125 AD) and include boilers, a porcelain urn and thousands of furnace stones, Feng said.
  “We believe the devices are the relics of a baijiu distillery. Since we can date them back to Liao Dynasty, they represent the earliest baijiu distillery ever found,” Feng said.
• Western views of China increasingly positive|Society|chinadaily.com.cn
  An increasing number of people in Western countries view China’s influence in a favorable light, according to a BBC World Service poll published on Friday.
  The percentage of people in the United Kingdom who view China’s influence as positive grew from 38 percent in 2011 to 57 percent in 2012. Similar increases were reported in Australia (43 to 61 percent), Canada (35 to 53 percent) and Germany (24 to 42 percent).
  In the United States, the percentage of people holding negative views of China dropped from 51 percent to 46 percent during the same period, and the number of people holding positive views of the country increased from 42 to 46 percent.
• 《北京日报》微博吁骆家辉公布财产_网易新闻中心
  WEIBO OF BEIJING DAILY ASK US AMBASSADOR LOCKE TO DISCLOSE HIS ASSETS
• Jesus Loves China, Too – By Bob Fu | Foreign Policy
  Why I’m working to save my homeland, one soul at a time.BY BOB FU
• 周永康考察中国政法大学要求抵制西化中国思潮_新闻_腾讯网
  ZHOU YONGKANG CALLS FOR RESISTING WESTERNIZATION OF CHINA DURING HIS MAY 9 VISIT TO CHINESE UNIVERSITY OF POLITICS AND LAW
• 吴永华其人：大摩行贿案中的中方“官员” – 宏观 – 21世纪网
  A LOOK AT THE CHINESE SIDE OF THE GARTH PETERSON/MORGAN STANLEY CHINA BRIBERY SCANDAL. BRIBED CHINESE OFFICIAL, OR AT LEAST ONE OF THEM, APPEARS TO BE WU YONGHUA, FORMER CHAIRMAN OF SHANGHAI YONGYE REAL ESTATE
  有永业集团人士对本报记者描述，吴永华离开永业之际非常匆忙，相关手续在半年之后才办理好，他正式离开永业之际并未领取这半年的工资。
• 89.68%自有房率：中国人越有房越买房 – 宏观 – 21世纪网
  85% OF URBAN CHINESE OWN A HOME?
  调查显示，中国自有住房拥有率高达89.68%，其中，城市自有住房拥有率为85.39%，远超世界60%左右的平均水平。
• CRS-Understanding China’s Political System-Susan V. Lawrence and Michael F. Martin-PDF
• The Bergstrom Group – The Bergstrom Group
  The Bergstrom Group is an insights consultancy with a passion for telling the story of new China. Our goal is to uncover perspectives to help you understand who your customers are and forecast trends that will drive change in the market.
• A slice of the Chinese market – FT.com
  The line comes from What Chinese Want: Culture, Communism and China’s Modern Consumer, a new tome from Tom Doctoroff, chief executive of advertising agency JWT in Shanghai and the doyen of foreign marketers in China. But the theme – understanding China’s transformation, and how it affects those who want to make money from it – is so popular that two other books published this spring also take a crack at it: The End of Cheap China: Economic and Cultural Trends that will Disrupt the World by Shaun Rein, founder of one of the mainland’s leading market research groups; and All Eyes East: Lessons from the Front Lines of Marketing to China’s Youth by Mary Bergstrom, a rare westerner in China who understands what makes the younger generation tick.
• Dalai Lama wins Templeton Prize, says China suffers from ‘moral crisis’ – CSMonitor.com
  The Dalai Lama was in London to receive the $1.7 million Templeton prize for his work affirming the spiritual dimension of life.
• SEC Sues China Natural Gas Chairman for Secret Loans to Son – Bloomberg
  The U.S. Securities and Exchange Commission sued a China-based natural gas company over claims its chairman secretly used the firm’s money to make $14 million in loans to benefit his son’s real-estate business.
  Qinan Ji, the former chief executive and current chairman of China Natural Gas Inc. (CHNG), arranged the two short-term loans, one through a sham borrower, in January 2010, the SEC said in a lawsuit filed today at U.S. District Court in Manhattan. Ji lied about the loans to the company’s board, investors and auditors, as well as during an internal investigation into the matter, the SEC said.
• Chinese Netizens Say Time To “Clean Up” Foreign “Trash” | Tea Leaf Nation
  Foreigners, watch out. Beijing police have sent a shot across the bow of the city’s estimated 200,000 non-Chinese residents, some of whom are in the country illegally. After a video of a British man apparently sexually assaulting a Chinese woman caught fire on Weibo, Beijing police have announced a campaign to “clean up” (清理) unwelcome outsiders (Chinese).
• Foreigners face visa scrutiny|Society|chinadaily.com.cn
  100-day campaign will focus on illegal entry and employment
  Popular Beijing spots for foreigners, such as Sanlitun and university areas, will be targeted by police in a fresh drive against visitors who commit crimes, outstay their visas or gain illegal employment, authorities said on Monday.
  The 100-day campaign will start on Tuesday, according to the public security bureau.
• Losing Face: Why China Can’t Stop Squandering Its Soft Power – Damien Ma – International – The Atlantic
  Though the country has become the world’s second largest economy, its leadership is struggling with the spotlight, and with the global expectations that accompanied their rise.
• Tiger mothers spending a fortune om teaching their children small talk for Oxbridge exams | Mail Online
  The families are doing their utmost, including paying out the huge sums to British ‘education consultants’ based in China in order to give their children the edge in interviews for our top universities.
  This behaviour is known as ‘Tiger Parenting’, a term inspired by Amy ‘Tiger Mom’ Chua, the woman who wrote a book about her super-strict Chinese parenting style called Battle Hymn of the Tiger Mother which received world-wide recognition last year.
• China Growth Seen at 13-Year Low by Pimco – Bloomberg
  Pimco, which oversees the world’s largest bond fund, sees Chinese growth this year in the “mid-7 percent range,” a pace unseen since 1999. Its call is still lower than that of banks from Citigroup Inc. and JPMorgan Chase & Co. to Bank of America Corp. and UBS AG, which all pared their forecasts after April economic data were released last week.
• Stable Transition or Fumbling Majesty? : When Kim Jong Un Met the Chinese VP « SINO-NK
  Perhaps inspired by the distant knee-wrenching fury of the American basketball playoffs, our Chief Editor has been breaking down “game film” in Sichuan, primarily in the form of moving images released by North Korean and Chinese state media of PRC Vice Premier Li Keqiang’s visit to Pyongyang last October.  Along with a Mao-inspired comparison between North Korean attitudes toward Kim Il Song and Tibetan reverence for the Dalai Lama, and some reportage from outside the DPRK Embassy in Beijing, Cathcart’s post contains some reflection on the content of the film and what it may augur for Kim Jong Un’s standing with his main foreign ally.
• A Lethargic Dragon – National Review Online
  Late last year, Andy Stern, former president of the Service Employees International Union and one of the leading lights of the American labor movement, published a short essay in the Wall Street Journal extolling China’s virtues. He contrasted China’s extraordinary economic success since the late 1970s with the failure of “the conservative-preferred, free-market fundamentalist, shareholder-only model,” which, in his view, “is being thrown onto the trash heap of history in the 21st century.” As Exhibit A, Stern cited a visit to a mushrooming metropolis in China’s southwest: “Our delegation witnessed China’s people-oriented development in Chongqing, a city of 32 million in Western China, which is led by an aggressive and popular Communist Party leader — Bo Xilai. A skyline of cranes are building roughly 1.5 million square feet of usable floor space daily — including, our delegation was told, 700,000 units of public housing annually.”This aggressive and popular leader has, alas, run into some trouble. Bo, the son of Long March veteran and Chinese vice premier Bo Yibo, has been removed from office on grounds of corruption, and there are extensive reports that he used torture and intimidation tactics to eliminate or discredit his political rivals. His wife is currently under investigation for her alleged role in the murder of British businessman Neil Heywood. To be sure, this doesn’t in itself undermine the notion that Chongqing’s people-oriented development has been an economic success. But a closer examination suggests that the glittering Chongqing that so impressed Andy Stern is a kind of overgrown Potemkin village.
• Philippines urged to stop inflaming Huangyan tensions – Xinhua | English.news.cn
  hina on Monday again urged the Philippines to stop complicating tensions between the two countries over the sovereignty of Huangyan Island, in a dispute that has now lasted more than a month.
  “The Chinese side demands the Philippine side seriously respect China’s territorial sovereignty and stop all moves that will expand and complicate the situation,” said Chinese Foreign Ministry spokesman Hong Lei at a regular news briefing.
• China security chief down but not out after blind dissident’s escape | Reuters
  FROM APRIL 30, PREDATES FT CLAIM THAT ZHOU IS OUT IN ALL BUT NAME//
  There is uncertainty about who will succeed Zhou as domestic security chief. He was a provincial leader with a background in oil, and his successor could be another provincial boss.
  Still, the standoff over Chen’s fate is unlikely to force leaders to fundamentally revise their entrenched security policies, said several experts.
  “I’m not optimistic that there will be much change. The whole model of stability preservation is part and parcel of the mode of rule, not the work of just one man,” said Xie.
  “Zhou Yongkang will retire, but the stability preservation model will not.”
• Local Governments Retreat, Testing Waters on Property Easing-Caijing
  Rumor also has it that some new policy easing may be brewing in Shanghai, as sales witnessed a significant fall in the past months.
• Is China About to Get Its Military Jet Engine Program Off the Ground? – China Real Time Report – WSJ
  evidence still suggests that China’s main military jet engine maker—Aviation Industry Corporation of China (AVIC)—is struggling to maintain consistent quality control as it scales up production of the WS-10 Taihang turbofan that China hopes to use to power more of its fighter fleet. This issue is causing problems with reliability and keeping China’s tactical aircraft heavily reliant on imported Russian engines. China’s July 2011 order of 123 additional AL-31 jet engines supports the view that domestically-made engines still are not good enough to rely on as the mainstay to power Chinese fighters.The latest jet engine import numbers suggest Chinese engines may now power roughly 20% of the country’s most modern fighters and strike aircraft as well as the JF-17 fighters it is exporting to Pakistan. That means at least 80% of China’s tactical aircraft fleet runs on Russian-made engines and will likely continue to rely substantially on imported Russian engines to support its tactical aircraft programs over the next two years. China’s high-performance jet engine programs are nearing takeoff but they, and China’s development of a more competitive precision manufacturing sector, appear to still have some additional runway ahead of them.
• At China’s Grand New Museum, History Toes the Party Line – NYTimes.com
  But if their interests run to the Cultural Revolution that tore the country apart from 1966 to 1976 and resulted in millions of deaths, they will have to search a back corner of the two-million-square-foot museum, which will complete its opening this month, for a single photograph and three lines of text that are the only reference to that era.
• EALC – Harvard University
  Mark C. Elliott
  Mark Schwartz Professor of Chinese and Inner Asian History
  Professor Elliott’s interest in East Asia began at Yale, where he earned his BA and MA. After several years of study and archival research in Taiwan, the PRC, and Japan, he earned his PhD from the University of California, Berkeley, specializing in the history of the last imperial dynasty, the Qing. A leading figure in what is sometimes called the “New Qing History,” he is among the very few historians in the United States trained in the use of Manchu-language sources, upon which his first book, The Manchu Way (Stanford, 2001), is largely based. His second book, a biography of the Qianlong emperor, was published in 2009. He is at work on a new book examining the connections between the Manchu empire and modern China.
• Daoxiangcun stores found selling fake duck blood — Shanghai Daily
  A time-honored Beijing food company is investigating its franchise stores that allegedly bought fake duck blood from meat processors and sold it at a price fivefold its value…
  Li Xingmin, a food expert with the China Agricultural University, told the paper that fake duck blood was made from poor-quality pork blood and might be mixed with formaldehyde and industrial pigment, which are harmful to liver and kidney.
• The soft power of meeting eye to eye – China Media Project
  What is perhaps most interesting about Gary Locke’s “little tricks” in China — and perhaps what discomforts Chinese leaders most — is the way Chinese have seized on his actions to reflect back on China’s own political culture. And China’s government has arguably deepened the sense of reflective value by obsessing on Locke’s actions, putting itself in the awkward position of fussing about minutia like backpacks and cups of coffee.Today, Locke is again grabbing attention for his “little tricks”, this time over a recent exchange with Shanghai third grader Yang Zhimei (杨芷湄), 9, who happens to be the daughter of one of China’s finest investigative reporters, former CMP fellow Yang Haipeng (杨海鹏).In October 2011, Ambassador Locke made a visit to Shanghai that included a stop at the Museum of Contemporary Art, where he spoke with a number of local primary school students. Yang Zhimei had a brief opportunity to speak with Locke, and her photo was later featured on the website of the U.S. Consulate in Shanghai and in various local media.
• 炎黄春秋放言论政治体制改革_多维新闻网
• 中药协炮轰亚洲动物基金：胁迫取缔养熊业是反华行为_财经_凤凰网
  Traditional Chinese Medicine society attacks the Asia Wildlife Fund, says opposing bear bile extraction is “Anti-China” behavior
• Bona Film Group Secures Strategic Investment From News Corporation – MarketWatch
  Bona Film Group Limited BONA +4.16% , a leading film distributor and vertically integrated film company in China, today announced that the Company has secured a strategic investment from News Corporation.Under the investment agreement, News Corporation will acquire a 19.9% equity stake in Bona directly from the Company’s Founder, Chairman and CEO, Mr. Dong Yu.Mr. Yu has entered into separate agreements to acquire 1,000,000 Bona ordinary shares from SIG China Investments One, Ltd., 1,000,000 Bona ordinary shares from Matrix Partners China Funds and 1,500,000 Bona ordinary shares from the Sequoia Funds, at an average price of $11.40 per share, or $5.70 per American Depositary Share.
• Resource-Rich Canada Looks to China for Growth – WSJ.com
  Canada’s economic reliance on the U.S. has ebbed for decades amid sporadic efforts to diversify. But weak demand from a prolonged economic downturn south of the border has accelerated the move, sending Canadian companies looking for new markets.
• Yuan Declines After PBOC Weakens Fixing, Lowers Reserve Ratios – Bloomberg
  The yuan declined after the central bank set the weakest reference rate for the currency in more than three weeks and cut banks’ reserve requirements for the third time since November.
  The People’s Bank of China lowered the reference rate by 0.14 percent to 6.3040 per dollar, the weakest level since April 20
• 外籍高管“不服水土” 高朋闪电衰落_互联网_DoNews-IT门户-移动互联网新闻-电子商务新闻-游戏新闻-风险投资新闻-IT社交网络社区
  a look at why the foreign management of Gaopeng, Groupon’s China JV, failed so miserably
• WTO A/V Products Case: Suspicions Confirmed? | China Hearsay
  Look, I’m not an executive at a big film studio, so I’m not going to say which side “won” this dispute. Maybe with the relaxation of the import quota and the new revenue sharing deal, the studios figured they would make so much money that it was worth it to essentially give up on the legal issues that began this whole thing five years ago. Perhaps they’re right.But I have to say, after writing about this case for so many years, learning the underlying law and reading countless pages of legalese gibberish, I am more than a little disappointed that the core issues everyone was fighting about were so easily thrown under the bus by American industry.
• Will baijiu kill you? | 300 Shots at Greatness
  During my month-long trip, I consumed approximately 160 shots of baijiu, many liters of huangjiu, one bottle of red wine and more craptastic Chinese lager than I care to recall. As mentioned, I went to the doctor right before I set out on my trip and immediately after I returned. Two days after the follow-up test I received the results.It turns out that there was no statistically significant change in my body chemistry. In every category that was tested, my results were either about the same as before or, more puzzling, slightly better. That’s right, not only did the baijiu pass through my liver with ease, but it may have actually made me healthier.**
• Glossary | China Heritage Quarterly-Geremie R. Barme
  The following essay is a preliminary attempt to describe what, since the 1980s, some Chinese writers have identified as ‘New China Newspeak’. This style of language is also known as Maospeak 毛语, although I would contend that this latter term offers too narrow a purview of a complex array of language practices that pre-date High Maoism (c.1964-78).
• Meet China’s Best 2011 Stock Analysts – China Real Time Report – WSJ
  CLSA does well
• Two Big Stories, One Conclusion: China Has No Legal System – China Real Time Report – WSJ
  An investigation has begun into allegations that, under Bo, police officers in Chongqing used torture and subjected some people to cruel conditions in prisons. How Bo’s misdeeds are addressed might signal whether there will be any movement within the Party for greater adherence to law in the execution of its policies.It is too early to tell whether the new leadership that is expected to begin taking over this fall might initiate measures that would reduce the dominance of Party policy – and, potentially, their own authority — over law.

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