Archive for November 16th, 2012
Xi Jinping is now in charge. He has a different style (New Yorker) than his predecessors, as you can see (Chinese, with English translation-Caixin) from his remarks Thursday when the new Politburo Standing Committee (Xinhua) met the media. China Daily has an English translation of his remarks here.
There is lots of speculation about who is a reformer, conservative or hardliner and what the policy preferences of the new leadership will be. In China reveals its new leaders: Habemus Papam The Economist reminds readers how little we actually know, expert prognostications notwithstanding:
These designations, however, are somewhat fuzzy and can only be taken as a rough guideline to the real contours of China’s top-level political landscape, and to the question of whether the new leadership tilts more towards conservatives or reformers. Factional lines are drawn not only over policy differences, but also on personal, regional, and patronage networks about which outsiders have only incomplete knowledge.
At the East Asia Forum Professor Scott Kennedy provides excellent perspective in China’s new leadership: economic reform yes, political reform no:
Some of the disappointment about the new group is that the two most likely advocates of serious political reform, Li Yuanchao and Wang Yang, didn’t make it to the PBSC. But you’d have to be beyond optimistic to believe the Chinese Communist Party’s top leadership is at all serious about democratisation. That is not on the cards no matter who is in the Politburo. There’s not a Gorbachev among them. We’ll see a range of reforms to improve how this system works (budget transparency, income reporting, more efforts to rein in corruption), but all of these tactics are being done to make this system work better, not prepare China to move toward another (multi-party democratic) system. If you’re sceptical they can make this system work better, they’re going to try and prove everyone wrong. Either they’ll succeed, or there will be a political meltdown.
Nicholas Borst of the Peterson Institute for International Economics is more enthusiastic than some about the prospects for economic reform, as he writes in China’s Leadership Transition and Economic Reform:
At face value, this is not very optimistic for economic reform. However, these statements need to be put in context with respect to what the Communist Party’s official position has been over the past decade.
Outside observers tend to scoff at terms like “socialist market economy” and “socialism with Chinese characteristics” as being self-contradictory and ex-post justifications.
Contrary to popular opinion, these terms do have meaning and represent official views on the correct path for economic development.
Watching Xi’s remarks I was struck by his three references to “中华民族伟大复兴” (translated as “great renewal of the Chinese nation” or “great Chinese renaissance”) and his omission of most of the standard ideological benchmarks.
“中华民族伟大复兴” is not a new term and has historically been used by Deng Xiaoping and many others as the justification for reform. On November 15 Xinhua in 述评：循序渐进，中华民族复兴路线图清晰可见
Xi’s repeated mention of this goal may be another sign that will see a more nationalist China during his rein. The Party knows it needs more than “Scientific Development”, “The Three Represents”, “Marxism”, “Mao Zedong Thought” or “Socialism with Chinese Characteristics” to justify its rule.
And that is why I think we will see attempts at reforms, though nothing like the political reforms Westerners and liberal Chinese hope for. The great renewal of the Chinese nation will not happen without significant changes to the economy, and a real crackdown on corruption (calling Wang Qishan…) Some will argue that it will also not happen without wholesale political reform, but Xi Jinping and the new leadership are unlikely to agree.
Expect Xi Jinping to be a reformer, but possibly a hardline nationalist one. Be careful what you wish for?
Zhang Gaoli’s ascension to the PBSC is great news for Tianjin. Tianjin created a huge debt bubble during Zhang’s leadership, as Bloomberg documented, but whatever the cost it will not be allowed to implode with the man once responsible now at the center of power in Beijing.
BUSINESS AND ECONOMY
China’s Impending Bad Debt Headache Likely Bigger Than Expected – China Real Time Report – WSJ - The banking regulator’s official figure puts nonperforming loans at only 1% of outstanding loans in the banking sector. When asked about the level of bad loans in their region, 57.69% of bankers put it at less than 3% (but presumably above 1%), 32.69% put it between 3% and 5%, and less than 10% put it between 5% and 10%.“Presently, China’s economic growth is slowing, and financial risk, especially the risk of nonperforming loans, are appearing,” said the report, which is dated October. “The credit risk from the steel, shipbuilding, and solar industries is relatively high, and the credit risk of export-oriented companies, local government financing vehicles and property developers can’t be ignored.”
经济参考网-地方融资平台发债超出去年1500亿 银行融资受阻 偿债压力加大 - 业内称风险总体可控，但须警惕发行主体资质下滑
媒体称三一重工窃取对手商业机密 传两员工被刑拘-财经网 - 2 Sany employees arrested for stealing secrets from competitor?
开发商信心谨慎回升 土地市场上演“翘尾行情”_财经频道_一财网 - real estate developers cautiously gaining confidence?// 无论北京、上海还是广州，
Wal-Mart Expands Foreign Bribery Investigation – NYTimes.com - lots of rumors of big China problems when they had the sudden China management changes last year// Wal-Mart disclosed on Thursday that it has expanded an internal investigation into bribery accusations in Mexico to Brazil, China and India.
China’s Illicit Flows Are ‘Big Issue’ for Money Laundering – Corruption Currents – WSJ - Banks face a risk from money laundering in China because of large flows of illicit money, weak controls and the difficulties of screening names, said a new report from research and consulting firm Celent.
POLITICS AND LAW
人民日报-人民网 - another classic people’s daily front page..xi’s coloring looks a bit different in print than live
Xi Jinping Offers Few Hints of a Shift in Direction in China – NYTimes.com - “The bad news from looking at the political system is that it really seems to have thrown a wrench in our understanding of institutionalization,” said Joseph Fewsmith, a professor at Boston University who specializes in Chinese politics. “This whole institutional idea that people retire and then don’t play much of a role seems to have been pretty well demolished.”
New Politburo pecking order reveals changes | South China Morning Post - The pecking order of the Communist Party’s supreme Politburo Standing Committee unveiled yesterday reflects three changes and gives the next premier greater authority.
China’s new leaders could have reform thrust upon them | Reuters - If the new leadership lacks vision, said David Shambaugh, director of the China Policy program at George Washington University in the United States, then “I’ll be surprised if they have a 19th party congress,” referring to the just ended 18th conclave where the next generation of leaders were announced.
China names conservative, older leadership | Reuters- big change for Shambaugh after he spent a year in Beijing, I think in 2010// “We’re not going to see any political reform because too many people in the system see it as a slippery slope to extinction,” said David Shambaugh, director of the China Policy Program at George Washington University’s Elliott School of International Affairs. ”They see it entirely through the prism of the Soviet Union, the Arab Spring and the Colour Revolutions in Central Asia, so they’re not going to go there.”
Microblogs and the party: The naked emperor | The Economist - Everyone within the party knows the problems of social change, he wrote. Yet on official occasions media still report only good news. “Ordinary people like us all know the emperor is not wearing any clothes. The emperor himself knows that he is naked. He also knows that we know. And yet he still walked out like this.”
Politburo Lineup Signals Rising Stars Who May Replace Xi in 2022 – Bloomberg - “Their mentality is quite different,” said Zheng Yongnian, director of the East Asian Institute at the National University of Singapore. Hu, Sun and other younger party cadres were educated during China’s “best decade” of political opening, which ended with the government’s 1989 crackdown on the Tiananmen Square protests, Zheng said.
Parallel history: Times of intrigue and promise | The Economist - lots of problems here but any comparisons to late Qing just facile, as Economist points out// It might be the understatement of a century to note that there are significant differences between 1908 and 2012. At the time of the Guangxu Emperor’s death, the Qing empire was in the midst of a financial crisis, burdened by excessive indemnity payments to the foreign powers, tariffs fixed by treaty and interest payments on loans to foreign banks. The same foreign powers had divided much of China into “spheres of influence”, keeping large areas of the country under their control through a system of unequal treaties backed by the threat of military force. China today is the world’s second-largest economy and a regional military power.
Ending Congress, China Presents New Leadership Headed by Xi Jinping – NYTimes.com - But Robert Lawrence Kuhn, an American businessman who wrote an authorized biography of Jiang Zemin and remains close to senior officials, predicted Mr. Xi would surprise those expecting him to adhere to the status quo. The pressures on China to create a more sustainable economic system — one that relies less on investment in large projects and exports and more on domestic consumption and private business — will compel him to act soon. “The risks of not reforming are now higher than the risks of reforming,” Mr. Kuhn said.
FOREIGN AND DEFENSE AFFAIRS
The Problem of ‘Mutual Trust’ – NYTimes.com- sensible piece// Policy makers in Beijing and Washington should keep in mind that mutual trust is a result rather than a premise of long-term cooperation. Instead of “mutual trust,” Beijing and Washington should drop the wishful thinking and spend more effort on building a realistic relationship based on their interests. Yan Xuetong is dean of the Institute of Modern International Relations at Tsinghua University in Beijing.
The U.S.-China Reset – NYTimes.com–Minxin Pei - To shift American perceptions of his leadership, the third component of Xi’s reset is domestic reform, especially political reform. The conservative backsliding in China over the past decade is the deeper cause of the worsening U.S.-China relationship. Xi can reverse this dynamic, beginning with a more symbolic step, such as releasing Liu Xiaobo, the jailed Nobel Peace Prize laureate, under medical parole
Cautious but firm attitude needed over Suyan Rock dispute with S.Korea – Globaltimes.cn- It is not a serious obstacle to Sino-South Korean bilateral relations at present. Neither serious accident or clash has occurred. The current situation has left enough diplomatic space for both countries to resolve this problem. In the future, China should attach more attention to this issue. China should strength the coordination between its marine patrols and diplomatic measures, using these methods to oppose South Korea’s unilateral actions and infringement of Chinese sovereignty. It should force South Korea to get back to the negotiating table.
Japan to set course for December 16 election and seventh PM in six years | Reuters Political experts worry former Prime Minister and head of the LDP Shinzo Abe, who polls suggest will be the next premier, will further fray ties with China, already chilled by a territorial row over a group of islands.
China Drone Maker Expects to Double Sales on Islands Dispute – Bloomberg China Aerospace Science & Industry Corp., the nation’s biggest maker of non-military drones, expects to double unmanned aerial vehicles sales next year as sovereignty disputes spur government orders. The country intends to increase monitoring at sea amid a row with Japan about the ownership of islands in the East China Sea, Huang Xingdong, deputy head of CASIC’s drone-making arm, said in a Nov. 13 interview at the Zhuhai airshow. The state- owned company signed an agreement to supply an undisclosed number of drones to an oceanic agency at the expo.
HONG KONG AND TAIWAN
US seizes two homes linked to Taiwan’s Chen Shui-bian | South China Morning Post - US authorities have seized two residences worth US$2.1 million bought by the family of Taiwan’s jailed ex-president Chen Shui-bian with alleged bribe money, the Justice Department said on Wednesday
Q&A with Nien-Dzu Yang | Defense News | defensenews.com - After three years of struggle, Nien-Dzu “Andrew” Yang’s appointment as the policy coordinator for Taiwan’s military continues to offer both old and new challenges. The Ministry of National Defense (MND) is struggling to implement an all-volunteer force, initiate streamlining and modernization, cope with a reduced defense budget and an increased threat from China’s military and procure new arms long held up in Washington by political impediments.
TECH AND MEDIA
Hu Jia explains why mobile apps make activism spooky | South China Morning Post - reports like this will hurt Tencent’s global expansion plans for Wechat
Tencent Q3 profit misses estimates |Companies |chinadaily.com.cn - stock hammered thursday
Sina’s profit beats on Weibo; co forecasts weak fourth quarter revenue | Reuters -stock down a lot after hours on big guidance miss// Weibo contributed about 10 percent to total advertising revenue in the second quarter and had 368 million registered accounts.
Apple’s China challenge: Cheap Androids own 90.1% of market — Mobile Technology News - Based on recent data reported by Chinese research firm, Analysis International, which has tracked smartphone sales for the past several quarters, Apple may have a challenging time replicating the market share success its iPhone has seen in other countries: In the third quarter of 2012, Android accounted for 90.1 percent of all smartphone sales in China.
Mike Sui, China’s Superstar | The Awl - While reception to Sui’s video was largely positive, a few observers remarked that his command of the language and accents was less impressive because of his background. Sui’s mom is a white American and his father Chinese; he graduated high school in Madison, Wisconsin, but spent his formative years attending school in Beijing. Thus his language attainments were less remarkable, noted these commenters. This jealousy about one’s Chinese proficiency is characteristic of many Chinese learners.
SOCIETY, ART, SPORTS, CULTURE AND HISTORY
ENERGY, ENVIRONMENT AND HEALTH
Apocalypse Mao – By Christina Larson | Foreign Policy - Ma Jun — author of China’s Water Crisis, 2012 Goldman International Environmental Prize recipient, and one of the country’s most prominent green activists — says that many problems in China persist or worsen “not because of lack of technology, but lack of motivation.”China has at its disposal tools and strategies it could deploy to move more quickly toward solutions, but without a free press, independent court system, and vibrant civil society to force change, it often seems more convenient to bury bad news than to respond to it, he says, especially for officials far from Beijing. Or to purchase water-treatment or smokestack-cleaning equipment, but then trim electricity costs by rarely turning them on.