The Sinocism China Newsletter 05.21.15

Today’s Links:


1. China warns U.S. surveillance plane – interesting PACOM giving such access to CNN, quite the PR push to make sure the world knows what China is doing with its reef reclamation project. A repeat of the 2001 “Hainan incident” would not be resolved with a non-apology apology…how many US firms have contingency plans for their China supply chains? Sadly we are entering the realm of “you better have a Plan B”… // The Chinese navy issued warnings eight times as a U.S. surveillance plane on Wednesday swooped over islands that Beijing is using to extend its zone of influence. Seeking to further challenge China’s military build-up in the South China Sea, the plane conducted a reconnaissance mission over a contested military installation being constructed on a manmade series of islands. A CNN team was given exclusive access to fly onboard the P8-A Poseidon, America’s most advanced surveillance and submarine-hunting aircraft, as it flew over the islands.

Related: Exposing US hypocrisy on South China Sea island reclamation – The Conversation a Chinese scholar’s view  //  China is reclaiming land and building infrastructure in its own territory, or at most, in disputed sea waters. Beijing is not grabbing a piece of land from another sovereign country. So why is Washington so eager to flex its muscles to challenge the Chinese? It’s really about the competition between an established super power and a rising one. The US talk of using its military in the South China Sea could be another attempt to contain the rise of China.

Related: 美媒:美侦察机飞越南海岛礁遭中国海军8次警告|中国海军|岛礁_凤凰资讯 2001年4月1日,一架美国海军EP-3型侦察机在中国海南岛附近海域上空执行侦查任务,中国海军航空兵派出2架歼-8II战斗机进行监视和拦截,其中一架僚机在中国海南岛东南70海里(110公里)的中国专属经济区上空与美军飞机发生碰撞,中国战斗机坠毁,飞行员王伟殉职。// Chinese media coverage of the CNN report, brings up the Hainan Incident

2. 习近平:巩固发展最广泛的爱国统一战线-新华网 On Xi’s comments at the Central Conference on United Front Work, which looks to be upgraded from the previous “national” one in 2006 // 新华网北京5月20日电  中央统战工作会议18日至20日在北京召开。中共中央总书记、国家主席、中央军委主席习近平出席会议并发表重要讲话。他强调,全面贯彻落实党的十八大和十八届三中、四中全会精神,坚持以邓小平理论、“三个代表”重要思想、科学发展观为指导,深入研究统战工作面临的形势,扎扎实实做好统一战线各方面工作,巩固和发展最广泛的爱国统一战线,为推进“四个全面”战略布局,为实现“两个一百年”奋斗目标、实现中华民族伟大复兴的中国梦,提供广泛力量支持。   中共中央政治局常委、全国政协主席俞正声出席会议并作总结讲话。

Related: 中央统战会议明确3类人将成重点团结对象_凤凰资讯 1、留学人员成为统战工作新的着力点 ; 2、首次提到“新媒体中的代表性人士”; 3、重视“非公有制经济人士特别是年轻一代” // on the three types of people Xi said should be targeted for united front work—Chinese stufying overseas, new media workers, workers, especially the younger generation, in the non-state owned economy

Related: Xi stresses befriending non-CPC elites – Xinhua High value should be placed on intellectuals in new economic and social organizations and they should exert their roles in development. Students studying abroad should also be encouraged to return home and serve the country in various ways, said the president. He called for officials to improve their work style and learn to make friends with non-CPC intellectuals in “doing ideological work”. Xi asked them to establish regular contacts with outstanding intellectuals from new media organizations and strengthen interactions with them both online and in reality, encouraging them to make contributions to purifying the cyberspace. The president also called for expanding the selection and use of non-CPC representatives who consciously accept the leadership of the Party and have strong political abilities. Excellent non-CPC representatives should be guided to grasp the theory of socialism with Chinese characteristics.

Related: China’s Xi Targets Tech Elites for Communist Party Outreach Push – Bloomberg Business Chen Tong, a vice president for Xiaomi; Zhu Guang, a vice president for search engine Baidu Inc.; and Chen Danqing, a vice president for video site Youku Tudou Inc., were among the technology executives who attended a seminar on “new social classes” this week that was also organized by the United Front Work Department. It was the first time technology leaders, who made up one-third of attendees, were invited to such an event, the department said on its official WeChat account.

Related: 中央统战部首度轮训新媒体从业人员,陈彤张一鸣邓飞等在列中国政库澎湃新闻 Thepaper on the training session for tech elites… //  “本次论坛,由‘今日头条’、优酷土豆、爱奇艺、焦点中国、天涯论坛等媒体全程赞助播出,腾讯微信同步推送……”随着主持人、中国互联网协会秘书长卢卫风趣幽默的开场白,现场爆发出一阵会心的掌声和欢笑……  这是中央统战部“第12期新的社会阶层人士理论研究班”的一次学员论坛。之所以有这样的开场白,是因为此次培训班55名学员中有近三分之一来自互联网和新媒体业,其中不乏大众熟知的新媒体品牌和“网络名人”,包括小米科技副总裁陈彤、“今日头条”CEO张一鸣、百度副总裁朱光、爱奇艺CEO龚宇、优酷土豆集团副总裁陈丹青、天涯社区副总裁马娜,还有知名“网络大V”邓飞和“欧阳委员”欧阳后增… 培训班里最年轻的“80后”张一鸣在完成培训后总结道:“这次培训让我对自身所处的方位和使命有了更深刻的认识,对致力于科技兴国、网络强国有了更强烈的自信。当然,也激发起了更多的思考,尤其是,要如何利用技术创新和互联网更好地为用户服务,不断提升社会效率,为国家发展添加动力和活力。”

Related: President Xi stresses localizing religions – Xinhua Chinese President Xi Jinping on Wednesday stressed that the development of religions in China should be independent from foreign influence. “Active efforts should be made to incorporate religions in the socialist society,” said Xi at a high-profile meeting on the united front work. He promised to fully implement the Party’s policy of religious freedom and manage religious affairs in line with the law.

3. What’s up with the PLA? – China Media Project Its coverage today that provides the clearest context to yesterday’s jeremiad. The front page of today’s People’s Liberation Army Daily tells us that yesterday was the first full session, held in Beijing, of the “All-Military Internet Security and Informatization Expert Consultation Commission” (全军网络安全和信息化专家咨询委员会). I can bet you’ve never heard of this group before, because until now virtually nothing whatsoever has been written about it, in Chinese or in English.

Related: Internet the key front in China’s battle with Western hostile forces: military paper | Reuters The commentary called for a massive “Red Army” of “seed-planters and propaganda teams” to defend the “online Great Wall”. China operates one of the world’s most sophisticated online censorship mechanisms, known abroad as the Great Firewall. Censors keep a grip on what can be published online, particularly content seen as potentially undermining the party. “Western anti-China forces have consistently sought in vain to make use of the Internet to topple China,” the commentary added, calling control of the Internet a “hidden war” for the hearts and minds of the public.

4. Why China’s actual GDP is higher than you think | chiecon As China enters the ‘new normal’ of declining GDP growth figures and gets used to less than blistering economic growth, one famous Chinese economist argues there’s still room for optimism, that China’s GDP growth is in fact under-reported. One of the main reasons for this is private enterprise under-reporting in their income tax assessments. The size of this under-reporting error will only increase, as current Chinese government policy is to encourage more GDP growth from the private sector, causing a more disproportionate understatement in China’s actual GDP. Below are translations in italics taken from Professor Li Yining’s article entitled ‘Six cutting edge issues in the current economy’, with some related observations on the real economy. // certainly a different viewpoint. any legitimacy?

5. New Neighbors: Chinese Investment in the United States by Congressional District | National Committee on United States – China Relations a new report by the National Committee and Rhodium Group finds that Chinese foreign direct investment into the United States has taken off in recent years, bringing a growing number of firms from China face-to-face with American communities. The report, titled “New Neighbors: Chinese Investment in the United States by Congressional District,” documents the new corporate neighbors who are moving into towns across America and details – for the first time – Chinese commercial investment in the United States by congressional district. With that granular information, the report describes the picture so far in terms of cumulative investment values, numbers of operations and facilities, and jobs provision data.  // interesting that one of the funders of the report is Chinese game firm Perfect World

6. Early Lessons in Ethnic Stereotypes in China – NYTimes yup, this is how our kids learned to write 照…glad they will be at a Quaker school starting in September  //  This is how a teacher at a leading state elementary school in Beijing taught first-graders this month how to write 照, or zhao, meaning ‘‘to photograph’’: ‘‘A little Japanese, picked up a knife, killed a person, left four drops of blood.’’ When I asked Chinese friends about this, they laughed. Their reaction wasn’t exactly politically correct, perhaps. But then China isn’t, at least not in the way that phrase is understood in some societies as avoiding speech or policies that could offend an identity group based on gender, ethnicity or sexuality. Or on something else. Like Japanese-ness.

7. Solar Panel Maker Suffering HK Share Sell-Off ‘Failed to Repay Loans’ – Caixin Several people close to Hanergy Holding Group said it used shares in its listed unit to take out bank loans, but has been unable to repay some of them. The share sales escalated after debtors made little progress in negotiations with the company over the defaults, those sources said. Hanergy secured loans from Jinzhou Bank, in the northeastern province of Liaoning, in the second half of last year after the bank gave it an 8 billion yuan credit line, other people close to the firm said. In January last year, Hanergy reached a deal with China Minsheng Bank and a credit consortium the bank leads to provide the company with loans of no less than 20 billion yuan. However, a senior executive at Minsheng said it had not extended any loans to Hanergy. “We’ve studied the company carefully and found it relies too much on connected transactions between the parent company and its listed unit, so we have been vigilant over its operations,” the bank executive said. // looks like Caixin again ahead of western media

Related: Under-investigation Hanergy had appointed Goldin Financial as adviser -filing | Reuters Hanergy appointed Goldin to advise it on a deal whereby Hanergy would supply solar panels to its parent company, the Hong Kong bourse filing showed. Trading in Hanergy was suspended on Wednesday after a plunge that saw its shares lose half their value. Goldin Financial fell by more than 60 percent on Thursday.

8. China Unleashes Bonds to Tackle Local Debt-Caixin CICC acknowledged that using low-rate bonds to pay off existing, high-interest debt would mean lower yields for banks and other local government creditors. On the other hand, the report said, bonds backed directly by the credit of provincial governments are safer than loans through companies connected with lower-level governments. Moreover, bonds can be sold to other investors or used by banks as collateral for liquidity from PBOC, the nation’s central bank, commonly issued through key lending facilities. “The ultimate purpose of the swap is to make local government debt what it really is – a low-risk, low-yield, normal interest rate investment product, rather than a freak that has low risk but high yields because of local government guarantees,” a source close to the central bank said.



Merger of Chinese Startup Rivals Tests Cooperative Spirit –  WSJ Didi-Kuaidi has been expanding from taxi hailing to chauffeur services and hopes to do the same with buses and other public transport, Ms. Liu said. Oh, and it has plans for helicopter services too. Despite the prospect of an IPO payout, she said, there was a mood of urgency in the company to meet its far-reaching ambitions. “A lot of investors have given us a valuation of more than $10 billion. My friends have asked me: ‘Does that mean you’ve reached your endgame, and you can sit and wait for an IPO now?’” she said. “It’s actually not that way at all. I and our entire team feel a tremendous sense of crisis.”

Chinese shares close higher Thursday – Xinhua Chinese shares closed higher on Thursday, with the benchmark Shanghai Composite Index up by 1.87 percent to finish at 4,529.42 points. The Shenzhen Component Index gained 3.49 percent to close at 15,872.53 points. The ChiNext Index, tracking China’s Nasdaq-style board of growth enterprises, surged 3.56 percent to end at 3,527.41 points.

This Hong Kong Executive Made $22 Billion This Year, And This Week He Lost Most of It – Bloomberg Business In two days, the Goldin twins have lost about $21 billion combined. Welcome to the world of Chinese share trading.

BHP settles SEC probe into Beijing Olympics hospitality – BHP Billiton has paid $25m to settle charges from the US Securities and Exchange Commission after the miner offered packages worth thousands of dollars to foreign government officials to attend the 2008 Beijing Olympics. The Anglo-Australian miner did not have enough internal controls over a hospitality programme that invited 176 government officials and employees of state-owned companies to the summer games, the SEC said on Wednesday. BHP was a sponsor of the 2008 event.



郭美美因涉嫌开设赌场罪被起诉 亲自设赌局赚钱新闻腾讯网 Guo Meimei to be prosecuted for running an illegal casino

Control and innovate – China Media Project During his tour, Lu Wei gives Shenzhen News Online “a high degree of recognition” for breaking new ground in recent years, and notes that Shenzhen will play a “leading role” in the Party’s Internet Plus strategy. But Lu emphasises that the site’s success also derives from its “firm grasp of guidance,” a reference to the propaganda policy that has held sway in China since June 4, 1989, the notion that all media must adhere to the Party line in news coverage in order to ensure social and political stability. Lu Wei also links innovation to the “spreading of positive energy,” now one of the core concepts in Xi Jinping’s treatment of media, arts and culture. Most telling, however, is Lu’s reversion to one of the oldest terms in the Chinese Communist Party’s media control lexicon, the principle of “politicians running the newspapers,” or zhengzhijia banbao (政治家办报). This is a phrase first used by Mao Zedong in 1957, when he said: “The writing of articles, and especially of official editorials, must take into account the overarching interests of the Party, being closely united with [the necessity of] political circumstances; this is what is meant by politicians running the newspapers.”

CFP for a CASS forum on historical materialism and Marxist theory of history « History, Ethics and Faith in China 您好! 中国社会科学院历史学部和马克思主义学部将于2015年9月18日举办中国社科院首届唯物史观与马克思主义史学理论论坛,我们诚挚地邀请您惠赐佳文。 征文主题如下: 1.当今历史虚无主义及其危害性 2.阶级和阶级斗争再认识:历史与现实 3.唯物史观在中国的传播和发展 4.社会形态演进的多样性与统一性

万庆良“老部下”晏拥军落马 政经频道财新网 Yan Yongjun, subordinate of Wan Qingliang, under investigation  //  广州市纪委5月20日通报称:广州市政府副秘书长、荔湾区原区长晏拥军涉嫌严重违纪,目前正接受组织调查。

刘彦平卸任公安部副部长政经频道财新网 2013年6月升任副部长至今;公安部领导层3月就有一次较大规模调整,三名领导分工变化;国务院办公厅秘书一局局长孟杨出任国务院副秘书长



China and MIRVed Warheads – All Things Nuclear It would result in a modest change in China’s nuclear forces because it affects a small number of silo-based missiles. China is thought to deploy roughly 10 of the DF-5 Mod 3 missiles mentioned in the Pentagon report. So if these went from carrying one warhead to three warheads (see below), that would add about 20 warheads to the Chinese force. (In comparison, recall that the U.S. and Russia each currently deploy 1,800-2,000 warheads.) And contrary to some reports, China’s fleet of 30 mobile missiles appears able to carry at most one or perhaps two warheads anytime soon, for reasons I discuss below. Since the New York Times article is bound to lead to Chicken-Little analyses warning that China can quickly build up its long-range nuclear forces to many hundreds of weapons, it’s worth looking at some of the technical issues to ground the story in reality.

Indonesia sinks 41 foreign boats to warn against poaching – AP The boats, seized from Chinese, Malaysian, Philippine, Thai and Vietnamese fishermen, were blown up on National Awakening Day, which commemorates the first political movement toward Indonesia’s independence.

中国空军首次飞越宫古海峡开展远海训练-军事频道-新华网 中国空军新闻发言人申进科上校5月21日在南京发布消息说,中国空军航空兵首次飞越宫古海峡赴西太平洋开展远海训练,提升空军航空兵部队远海机动作战能力。// first time PLAF planes fly through the Miyako Strait on a training mission?

China, Japan to hold finance minister dialogue – Xinhua first in three years?  //  China and Japan plan to hold a dialogue between their finance ministers in Beijing on June 6, China’s Ministry of Finance said on Thursday. The talks may cover topics including the Chinese and Japanese economies, bilateral financial cooperation and global financial cooperation, according to a brief notice on the ministry website. This marks the fifth bilateral finance dialogue since the first meeting in 2006.

China Voice: Abe’s denial of Potsdam Proclamation no good for Japan’s image – Xinhua The latest remarks by Japanese Prime Minister Shinzo Abe refusing to recognize the rule of the Potsdam Proclamation will do no good to his country’s international image. When faced with a request for comment on the Potsdam Proclamation, which accelerated the end of the WWII and established the war Japan waged over 70 years ago is an aggression war, the prime minister rejected to give any comment and claimed that he did not notice this part in the proclamation.

Advanced patrol vessel commissioned in China’s Sansha city – Xinhua An advanced patrol vessel was delivered and commissioned in China’s southernmost Sansha city Wednesday. The No.1 law enforcement ship of Sansha City, Hainan Province, is 97.5 meters long and 14 meters wide with seven floors. With a tonnage of 2,600 tonnes, the vessel has a designed speed of 22 nautical miles per hour and is capable of sailing 6,000 nautical miles. The cruising ability means it can patrol the seawaters at the Nansha Islands, said Wang Shizheng, deputy head of the Sansha City Comprehensive Law Enforcement Bureau.

Chinese Scientists Indicted by U.S. Are Seen as Stars at Home – NYTimes A spokesman for the Foreign Ministry said the Chinese government was trying to get more information about the case. “The Chinese government expresses its serious concern,” Hong Lei, the spokesman, said at a news conference in Beijing, adding that it “will ensure that the legitimate interests and rights of Chinese personnel involved in China-U.S. exchanges are effectively protected.”

The Naikon APT and the MsnMM Campaigns – Securelist For over half a decade, the Naikon APT waged multiple attack campaigns on sensitive targets throughout South-eastern Asia and around the South China Sea. It maintained a heavy offensive focus on Myanmar, Vietnam, Singapore, the Philippines, Malaysia, and Laos. Targets and victims included ASEAN governmental agencies and government departments, investment enterprises, military, law enforcement and border control organizations, embassies, university faculties and others.



Avengers smoke China box office competition – Xinhua Superhero sequel “Avengers: Age of Ultron” dominated China’s box office, taking 973 million yuan (about 157 million U.S. dollars) in ticket sales, in the week ending May 17. The latest big-screen action-fantasy, which is based on the eponymous Marvel comics characters, opened in Chinese theaters on May 12.

How China’s Censors Influence Hollywood : Parallels : NPR Ying Zhu, a professor of media culture at the College of Staten Island at the City University of New York, worries China’s growing market power is giving the Communist Party too much leverage over Hollywood. “The Chinese censors can act as world film police on how China can be depicted, how China’s government can be depicted, in Hollywood films,” she says. “Therefore, films critical of the Chinese government will be absolutely taboo.”

China to investigate anti-Japan TV drama decried as vulgar | Reuters China’s media watchdog will investigate an anti-Japan television serial that viewers have criticized as vulgar for a scene showing a woman making use of a grenade concealed in her crotch to kill Japanese soldiers, state media said on Thursday.

移动发狠招手机不实名将被停机 电信联通表示没听说过业界头条前瞻 China Mobile to turn off all mobile numbers that are not registered in real name by June 30

Lenovo Shipped Record 18.7M Smartphones in Q4 2014, But Profit Dropped 37% | TechCrunch The firm is shifting its focus as global demand for PCs continues to decline and smartphone ownership begins to reach saturation point in key markets — sales recently contracted in China, Lenovo’s biggest market, for the first time in six years. The future of Lenovo, the company said, is about going beyond hardware. “In view of the opportunities and challenges of the new Internet+ era, we are ready to transform ourselves from making mostly hardware to a combination of hardware and software services,” Lenovo Chairman and CEO Yang Yuanqing said in a statement. “This will spur a new wave of growth for Lenovo in the coming years.”



Deng Xiaoping: A Revolutionary Life | Foreign Affairs looks like an interesting book  //  Like the heroes of a Hollywood Western riding into town to clean up a mess, Pantsov and Levine have swept into the unruly genre of contemporary Chinese biography. Pantsov contends with Soviet archives, while Levine wrangles Chinese-language materials and secondary sources in English. Both bring prodigious energy and research firepower to their work. Their previous collaboration, 2012’s Mao: The Real Story, questioned the conventional wisdom among U.S.-based China specialists that Mao Zedong retained a good deal of independence from Soviet leader Joseph Stalin and his Comintern; Pantsov and Levine emphasized Mao’s loyalty to both. Their portrait of Mao’s successor, Deng Xiaoping, cuts in a similar direction: despite the independence and pragmatism that Deng displayed later in life, Pantsov and Levine argue that the distinguishing features of Deng’s formative years were his servility to Mao and his extreme radicalism. They claim that their interpretation finally sets the record straight after many previous efforts missed the mark; this pretension lends their work a certain dynamism but also detracts from the authority of a well-researched, interesting, and readable book about an elusive figure who exhibited a curious combination of idealism and ruthlessness

Deng Xiaoping: A Revolutionary Life – by Alexander V. Pantsov, Steven I. Levine the book on Amazon



Why China’s Big Oil Companies Have Stopped Big Spending  – WSJ First, the big three need time to integrate the assets they just bought. Especially with the price of oil dropping so quickly, they need to tackle the low return (generated by new investments). Second, they don’t have that much cash anymore. Although they are backed by state-owned banks, their pockets are not unlimited and the debt-to-asset ratio is something management has started to worry about. And there is the “new normal” of China’s economic development, which requires more attention be paid to pollution, a better energy mix, improvement in the quality of oil products and higher efficiency. A secure energy supply is no longer their top priority. Moreover, there have been lessons from their active overseas M&As. Some projects came at a high cost, some with underestimated risk, and some system loopholes led to abnormal losses. Coupled with the anti-corruption campaign, the slowing-down of M&A activities is a good time for them to reflect and learn.



《土地承包法》迎大修 承包期长久不变存争议政经频道财新网 仍处于多方征求意见、研讨阶段,尚未形成草案。其中,承包期限等关键问题仍未明确,是永久不变还是长久不变,长久不变是否有期限,期限多长,各界对此争论不休



Censorship and Conscience | ChinaFile In this report, PEN American Center (PEN) examines how foreign authors in particular are navigating the heavily censored Chinese book industry. China is one of the largest book publishing markets in the world, with total revenue projected to exceed $16 billion in 2015 and a growth rate of roughly 10% per year.



Beijing “fast and furious” drivers sentenced to jail – Xinhua Yu Muchun, 20, and Tang Wentian, 21, were charged for dangerous driving, according to the Chaoyang District People’s Court of Beijing. Yu, who surrendered himself, will be jailed for four months and fined 8,000 yuan (about 1,290 U.S. dollars), while Tang was sentenced to five months and fined 10,000 yuan (about 1,613 U.S. dollars).

Expert Criticizes Capital for Using Education Policies to Rein in Population Growth – Caixin Education authorities in Beijing told universities and colleges to recruit only 83,000 new students this year, 1,000 fewer than last year. It also told them to cut the number of students they admit who do not have a Beijing hukou, or household registration paperwork. Xiong Bingqi, deputy director of the 21st Century Education Research Institute, a consultancy in Beijing, said enrollment policies should serve universities, not government population targets. A growing population has caused Beijing to miss its population targets over the past decade. In 2005, the city government set a target of 18 million people by 2020, but it surpassed that figure in 2010. The population stood at 21.52 million people at the end of last year.

Holy Smoke: 23% of Beijingers Light Up – China Real Time Report – WSJ China’s capital city has a grand total of 4.19 million smokers, each of whom inhales around 15 cigarettes per day, just shy of a pack, according to a new survey from the Beijing Municipal Commission of Health and Family Planning. To give some perspective on the smoking scale, Beijing’s smokers outnumber the population of the city of Los Angeles. About one in five people in the capital smoke, and the number of people they subject to secondhand smoke is around 10 million in addition to themselves, according to health officials cited in the Beijing News.



China Reality Check: Xi Jinping’s Economic Reforms: Progress, Challenges, and Contradictions | Center for Strategic and International Studies Friday, May 22, 2015 | 10:30 AM – 12:00 PM Second Floor Conference Room, CSIS 1616 Rhode Island Avenue, NW, Washington, DC 20036 2015 is slated to be “the year of implementation” for China’s economic reforms. Although major fiscal reforms have clearly begun, state-owned enterprise (SOE) reforms are still idling. What are the prospects of further economic reforms in the near- to medium-term? Please join us for what promises to be a rich discussion featuring one of the world’s leading experts on the Chinese economy, Barry Naughton, with commentary from Beijing-based economist for Bloomberg, Tom Orlik. // this should be a good event, wish I could attend

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