Today’s China Readings May 10, 2012

Apologies for the short commentary today, have a breakfast to get to.

Tensions are rising between China and the Philippines over Huangyan Island/Scarborough Shoal in the South China Sea. Anti-China demonstrations are planned for Friday in the Philippines, the PRC embassy in Manila has issued a warning to its citizens, Chinese state media is ratcheting up warnings to the Philippines and “Chinese Warships Approach Philippine Territory” has been the number 1 topic on Sina Weibo since Wednesday afternoon. A topic does not reach number one and stay there on Sina Weibo unless the government approves, and the sentiment on Weibo is overwhelmingly in favor of force if necessary to get the Philippines to back down. Beijing may be painting itself into a corner, as given everything that has been going on in China over the last few months the government can not be seen as weak in the face of what most Chinese believe is an assault on their sovereignty. Unless Manila gives China a clear “victory” we may see a skirmish. No word on how popular the movie “Wag The Dog” is in Zhongnanhai…

Europeans hoping for a Chinese white knight to rescue them from their financial crisis will be disappointed by CIC sovereign wealth fund head Gao Xiqing’s statement that CIC Stops Buying Europe Government Debt on Crisis Concern. The Chinese, at least when it comes to Europe, are not dumb money..

Still hoping for feedback on the commentary, and as always welcome tips, comments and suggested links. Thanks for reading.

Today’s links:

  • Short Seller Drops Muddy Waters Model for SEC – Bloomberg
    Short seller Jon Carnes [alfredlittle.com] made millions of dollars publishing anonymous reports accusing Chinese companies of fraud. Now settled in Vancouver after fleeing threats of violence in China, he’s trying another business model: providing tips to the U.S. government.
    The 38-year-old says he’s applied to the U.S. Securities and Exchange Commission for whistle-blower status in connection with lawsuits filed by the regulator accusing two executives at China’s Puda Coal Inc. (PUDA) of fraud. The SEC program, established following the 2010 Dodd-Frank Act, gives informants a share of proceeds if their information leads to more than $1 million in penalties…
    In total, Carnes says he and the contributors to what he calls his investment partnership have made about $10 million from shorting Chinese companies.
    Carnes says the reason he published anonymous research was for protection from the companies he targeted. Despite being “obsessive” about security, Carnes says his associates faced threats after they were identified as being part of the alfredlittle.com operation.
  • Chinese Clarify Rules to Challenge Monopolies – WSJ.com
    China’s biggest state-run companies could face more antimonopoly challenges from consumers and rivals under new rules that could put further pressure on the government-controlled behemoths that dominate the economy.
  • Hong Kong Plans Tougher Rules for IPO Sponsors – WSJ.com
    GREAT IDEA, COULD NEVER PASS IN US//Hong Kong’s securities regulator on Wednesday proposed tough new rules on the city’s IPO market, the world’s biggest for the past three years, that could lead to banks being criminally liable if the companies they sponsor lie to investors and could dramatically cut the number of banks involved in stock offerings.
  • Rumors say China’s chief internet censor replaced|WantChinaTimes.com
    ASTUTE SINOCISM READERS MAY HAVE NOTICED LINKS TO VENUSTECH RELATED CONTENT IN THE APRIL 30 READINGS//A report late last month by Japan’s Yomiuri Shimbun said that Fang Binxing, the president of Beijing University of Posts and Telecommunications who is known as the Father of China’s Great Firewall, had been detained for investigation in connection with the disgraced politician Bo Xilai. Fang has refuted the report but implied that he is no longer in charge of China’s internet censorship system and online rumors say Yan Wangjia, CEO of Beijing Venustech, has replaced Fang as the top controller of the internet in the country.
  • 人民日报-菲律宾当有自知之明
    People’s Daily Page 3 warning to the Philippines
  • Obama taps ‘Hollywood ATM’ – FT.com–China deals helping
    Mr Obama’s criticism of a bill backed by the entertainment industry to protect intellectual property infuriated many in Hollywood. “He didn’t just throw us under the bus … he ran us down, reversed the bus and ran over us again,” said one senior film executive.
    But such grumblings will be largely forgotten on Thursday night when the love-in between Hollywood and Mr Obama resumes, thanks partly to his administration’s work to ease restrictions that prevent US-made movies from being screened in China.
  • Toddlers face early lesson in harsh realities of life|Cover Story|chinadaily.com.cn
    the teacher wasn’t in the least upset or surprised at the indifference shown by her students. Wu does not expect too much from her students, because most of them can’t speak and some can’t even stand on their own.
    What do you expect to find in a student’s bag? Books, homework notes, pens perhaps. But Wu’s students carry none of the above. Instead they have nursing bottles, milk powder, water, cookies, snacks, handkerchiefs and diapers. They are China’s youngest students, all of them younger than 3 years old.
    Momo can be classified as an “old student” at the preschool institute. She’s been “studying” for more than six months, even though she’s only 11 months old and needs to be held by her mother.
  • Chinese LED Firm Raises $30m, Press Talks About Al Gore Instead | PandoDaily
    Very quietly, as least going by the deafening silence in the blogosphere, Chinese LED lighting company SunSun Lighting announced yesterday that it has raised $30 million in a Series B funding round led by Oak Investment Partners and GSR Ventures.The Jiangsu-based startup specializes in affordable and efficient LED lighting and offers what it says are the world’s first LED lamps, which are low-cost but high-in-light output and strong-in-color rendering
  • Chris Smith: Administration silent on Chen’s cause | The Cable
    Blind Chinese activist Chen Guangcheng’s best friend in Congress, Rep. Chris Smith (R-NJ), told The Cable on Tuesday that the Obama administration has failed to stand up for Chen’s cause, the abuse of women under China’s one-child policy.
  • Chinese warned to stay off the streets — Shanghai Daily
    CHINA warned its citizens in Manila to stay off the streets and take precautions during anti-Chinese protests planned for tomorrow, a sign of mounting tensions during a standoff in the South China Sea.
  • 中菲黄岩岛局势升级
    China Securities News special section on the impact an escalation of the dispute with Philippines might have on stock market
  • 人民日报-周永康在中国政法大学考察时强调 认真学习贯彻胡锦涛总书记五四重要讲话 努力成为社会主义法治国家的积极建设者
    Page 1 People’s Daily, Zhou Yongkang visits Politics & Law University, tells studentsto study Hu Jintao’s important May 4 speech
  • 四川简阳2.4亿建住院楼 内设VIP病房_网易新闻
    impressive VIP hospital room in Jianyang, Sichuan. Pics
  • Xinhua Insight: True story behind Huangyan Island dispute in South China Sea (Part 1) – Xinhua | English.news.cn
  • Xinhua Insight: True story behind Huangyan Island dispute in South China Sea (Part 2) – Xinhua | English.news.cn
  • 中方:菲鼓动反华示威引发中国民众强烈反应_新闻_腾讯网
    China charges Philippines government with stirring up anti-China sentiment. Anti-China marches planned for Friday, could get ugly. If Chinese are beten or shops attacked, should we expect retribution against filipinos in China?
  • 扬州政策出台始末 – 房市 – 21世纪网
    Yangzhou has announced a tax incentive program for purchases of some housing starting July 1, not clear Beijing will not smack it down as it has stopped other recent municipal attempts to boost housing market
  • Never test China’s will to defend sovereignty|Politics|chinadaily.com.cn
    No matter how the standoff over Huangyan Island develops, China will not change its friendly foreign policy to its neighbors, nor switch its will to forge peace and stability, equality and mutual benefit, and cooperation.
    Meanwhile, China’s resolve and strong will to safeguard its inherent territorial sovereignty will never swerve under any conditions.
    In the past month, China has stood on just grounds and exercised restraint in the face of provocative actions from the Philippines. China’s tolerance should not be taken advantage of nor be misjudged.
    Currently, the urgent task of the Philippines government is to stop detrimental moves, keep a solemn mind and return to the right path as soon as possible.
  • Xisha may open to tourists soon | China Daily
    Located 330 kilometers southeast of South China’s Hainan province, the Xisha Islands are one of four big island groups in the South China Sea, together with the Dongsha, Nansha and Zhongsha islands.
    Tourists will be able to visit the islands mainly on cruise ships while some can travel by air, Feng Wenhai, an official in charge of the Zhongsha, Nansha and Xisha islands’ affairs under Hainan provincial government, was quoted by Xinhua News Agency as saying.
  • Deep-sea drilling a key step in protecting waters|Politics|chinadaily.com.cn
    A vow to boost oil and gas exploration in the South China Sea accompanied the launch of the country’s first domestically manufactured deepwater drilling rig.
    The semi-submersible Haiyangshiyou 981, with an operating water depth of 3,000 meters, drilled its first well on Wednesday.
  • Multipolar world on the horizon|Last Word|chinadaily.com.cn
    Foreign policy expert believes that as US power wanes, several nations will pick up the baton
    Shi Yinhong, one of China’s foremost foreign policy experts, believes we could be moving into an era where the world is dominated by three or four powers and not just the United States. The 60-year-old professor of international relations and director of the Center for American Studies at Renmin University of China, is convinced the writing is on the wall for American hegemony.
    “I think if the US continues to borrow so much money and at the same time interfere so widely in this world, it will meet with a typical empire’s fate and reach a tipping point. Everything has its end.” //YES, EVERYTHING DOES HAVE ITS END PROF SHI…
  • BBC News – Ferrari sorry after car damages Nanjing city wall
    NO REASON TO BELIEVE BO GUAGUA WAS DRIVING//
    Italian sports car maker Ferrari has apologised after one of its cars drove on an ancient Chinese monument, prior to a publicity event, causing damage.
    Ferrari suggested the incident was the fault of a local dealership employee.
    The car was filmed wheel-spinning on top of a 600-year-old Ming-dynasty era wall in the city of Nanjing.
    Footage of the screeching vehicle has infuriated China’s online community, hitting a nerve in a society where such cars are a symbol of privilege.
  • Fed Approves Chinese Bank Expansion in U.S. – American Banker
    wonder if they have to turn over to the US government all information re us passport/green card holders with accounts with them in China?//
    The Federal Reserve said Wednesday it approved the expansion of the U.S. operations of three of China’s largest banks, including the first acquisition of a U.S. bank by a Chinese bank.
    The Fed said it had approved applications from the Bank of China and Agricultural Bank of China to establish new branches. The central bank also approved an application by China’s largest bank, Industrial & Commercial Bank of China, to become a bank holding company through the acquisition of up to 80% of the U.S. operations of Bank of East Asia.
  • CIC Stops Buying Europe Government Debt on Crisis Concern – Bloomberg
    China Investment Corp. has stopped buying European government debt because of an economic crisis on the continent, though it continues to look for new investments there, said CIC President Gao Xiqing.
    “What is happening in Europe right now is of course of concern,” Gao said yesterday in an interview in Addis Ababa, Ethiopia, during the World Economic Forum on Africa. “We still have our people looking at opportunities in Europe, even though we don’t want to buy any government bonds.”
  • 新京报社长被任命为北京市管正局级干部|新京报|社长|任免_新浪新闻
    Director of Beijing News Mr. Dai Zigeng now has official Beijing municipal government bureau-level rank
  • 徐明因薄熙来受审 传供出惊天大案_多维新闻网
    duowei says xu ming has given some interesting information to investigators, including a lot related to current Dongbei officials and football corruption//
    多维新闻】传因受薄熙来牵连而正在接受调查的大连实德董事长徐明,在审问期间,吐出了一系列惊天大案,其中包括对现任辽宁省委副书记夏德仁,大连两个副市长,以及辽宁和大连的其它官员和富商涉及腐败的指控。
  • SEC Charges Deloitte & Touche in Shanghai with Violating U.S. Securities Laws in Refusal to Produce Documents
  • Sina Weibo Introduces “User Contract” -Caijing
    China’s web giant Sina, operator of Weibo.com, has created a “user contract” for this most popular twitter-like microblog service, shortly after it admitted it hasn’t enforced rules requested by the government
  • China Cuts Retail Fuel Prices for First Time in Seven Months – Bloomberg
    China will cut retail gasoline and diesel prices tomorrow for the first time since October after international crude costs fell to a government threshold for adjusting fuel rates.
    The maximum price at which gasoline can be sold to motorists will be reduced by 330 yuan ($52) a metric ton and diesel by 310 yuan, the National Development and Reform Commission said in a statement on its website today. That is a reduction of as much as 3.5 percent, according to Bloomberg calculations.
  • The cost and limitations of control – China Media Project
    But while China’s leaders have shown a renewed determination — desperation? — to employ press controls to maintain a white-fisted grip on the agenda, they have unwittingly exposed the cost and limitations of control in the face of a networked public with a keen interest in social, economic and political affairs.This was patently clear last Friday, as the Beijing editorials were widely criticized on Sina Weibo, so that by day’s end China’s censors had to turn on their own propaganda.
  • 中国军舰接近菲律宾本土 | 新浪微博-随时随地分享身边的新鲜事儿
    #1 sina weibo topic: Chinese warships approach the Philippines. government painting itself into a corner
  • Sina Leads Index to Month Low on Growth Concern: China Overnight – Bloomberg
    Sina (SINA) Corp., the Chinese Internet operator trading at six times the valuations of Nasdaq Composite Index companies, led declines among the nation’s stocks traded in the U.S. as concern rose that global growth will stall.
  • A Luxury Slowdown in China? Don’t Hold Your Breath – Scene Asia – WSJ
    20% SOUNDS LOW//A third potential roadblock: a corruption probe widespread enough to dissuade Chinese from gift-giving, a popular practice among businesspeople that accounts for as much as 20% of luxury goods purchases among Chinese consumers.
  • 山东青州部分商贩使用甲醛浸泡山药等蔬菜-财经网
    now yams sprayed with formaldehyde in shandong//
    醛,也就是福尔马林。用甲醛给食品“保鲜”,出处实际上是根据人的尸体保存。用在食品上非但没有必要,而且对人体非常有害的
  • Behind Twists of Diplomacy in Case of Chen Guangcheng – NYTimes.com INTERESTING ACCOUNT OF CHEN CASE, DC BYLINE, APPEARS TO BE SOURCES DOING DAMAGE CONTROL, SOME VERY FISHY THINGS IN HERE, INCLUDING DESCRIPTION OF ALLEGED MSS-MOFA ARGUMENT WITNESSED BY US OFFICIAL. MAKES IT CLEAR CUI TIANKAI DOES NOT LIKE KURT CAMPBELL, SO REPORTS THAT SOMETHING HAPPENED DOWN ON CAMPBELL’S FARM MAY BE CORRECT. IF ANYONE KNOWS THE DETAILS PLEASE EMAIL ME OR COMMENT ON THE SITE.//
    They learned of it only when He Peirong, a rights advocate, called the embassy three days later and told officials there that he was in hiding on the outskirts of Beijing, his foot broken from a fall during the escape.After a late-night meeting at the State Department on April 25, Mrs. Clinton approved a plan to spirit him into the embassy, an operation that involved hustling him from one car to another twice. “Everyone understood the magnitude of the decision, how unpredictable it was, and that there would be consequences,” the senior official said.
  • Regulator Predicts U.S. Will Soon Take Part in Chinese Inspections of Auditors – NYTimes.com
    “We ought to be able to observe the inspections they conduct in the late summer or fall, and certainly by the end of the year,” said James R. Doty, the chairman of the Public Company Accounting Oversight Board, in an interview after he returned from China.
  • From Beijing With Love – NYTimes.com
    Our consistent support of dissidents during the cold war played a key role in the collapse of Communism, and American officials must keep this history and our values in mind as they struggle with each case. Secretary of State Hillary Rodham Clinton got it right when she sought a solution to the Chen incident “that reflected his choices and our values.” That must never change.Jeffrey H. Smith is a former assistant legal adviser to the State Department and was general counsel for the C.I.A. from 1995 to 1996.
  • China fully prepared to respond to anything Philippines does – Xinhua | English.news.cn
    BEIJING, May 9 (Xinhuanet) — China has issued a strong warning to the Philippines not to escalate the tension. Vice-Foreign Minister Fu Ying said China is fully prepared to respond to anything the Philippine side does on the issue. The statement comes as the stand-off over Huangyan Island enters its third week.The stalemate is about to be a break. China’s tone, for first the time, was not optimistic.
  • Chen’s tackling of rural conflicts exploited by outside forces-Global Times
    As a disabled man, Chen hasn’t received a higher education. He has a very unusual way to deal with his conflicts in rural society. You can say this is paranoid or impulsive. External forces would like to use this to politicize and universalize some of China’s social conflicts. But Chen didn’t realize he was being used and his case being hyped into a national political issue.This has made him vulnerable to manipulation from people who have their own hidden agendas
  • China’s Sina Weibo to Introduce Contract for Microbloggers
  • Stealing Attention: A Chinese Thief on Social Media Isn’t What He Seems – China Real Time Report – WSJ
    what at first appeared to the social media diary of an oddly attention-hungry thief turns out to have been a hoax dreamed up by a Shanghai-based advertising company in an effort to promote a Chinese smartphone brand.After the account was shut down by Sina Corp, the advertising company, Avazu, admitted on its official Sina Weibo feed that the whole thing had been dreamed up by an employee and that mobile phones and wallets appearing in photos this month belonged to staff members, “so users mistakenly believed that it was a real thief.” The aim of the account? To gain attention for Green Orange smartphones, which were among the items Shanghai Hooligan claimed to have stolen. (At one point, the Shanghai Hooligan uploaded a photo of a Green Orange smartphone, calling it his favorite.)
  • U.S. Millionaires Told Go Away as Tax Evasion Rule Looms – Bloomberg
    Go away, American millionaires.
    That’s what some of the world’s largest wealth-management firms are saying ahead of Washington’s implementation of the Foreign Account Tax Compliance Act, known as Fatca, which seeks to prevent tax evasion by Americans with offshore accounts. HSBC Holdings Plc (HSBA), Deutsche Bank AG, Bank of Singapore Ltd. and DBS Group Holdings Ltd. (DBS) all say they have turned away business.
  • 人民日报国际论坛:中国对黄岩岛的领土主权拥有充分法理依据–观点–人民网
  • The Hindu : News / International : China crafts a carrot-and-stick response to immolations
    Kumbum has remained relatively stable through the troubles over the past year, which saw more than 30 Tibetan monks and nuns setting themselves on fire in monastery towns across the Tibetan plateau.The response from officials here, monks said in interviews, was a combination of carrots and sticks: a slew of welfare measures — renovating prayer halls, increasing stipends and improving living conditions — coupled with tight security policies that bear no tolerance for dissent.
  • The Asian Arms Race That Wasn’t – By M. Taylor Fravel and Vipin Narang | Foreign Policy
    India and Pakistan are firing off missiles left and right. So why aren’t the Chinese nervous?
  • No Roads Are Straight Here – NYTimes.com
    Murong Xuecun on corruption in China. unlike many countries, stuff gets built. mostly
  • CHINASCOPE – Xinhua: Fighting Internet Rumors is an All Encompassing Battle
    (1) The government should introduce systematic and routine Internet monitoring procedures and prosecute those who distribute rumors. (2) The use of cutting-edge technologies should be increased. For example, advanced data mining technology can be employed to analyze Internet user’s behavior and distribution models like the U.S. researchers did to analyze high volume Twitter traffic. (3) Traditional media should adjust to the era of new technology to provide better guidance in the formation of public opinion.
  • CHINASCOPE – China Economy: China should Attack the Philippines Militarily
    Zhou Erquan, an associate professor at the College of the Air Force Command, recently wrote an article that was published in China Economy. Zhou called for a military attack against the Philippines, “Otherwise they will not awaken.” He suggested that the Philippines is still trying to make the situation in the South China Sea worse. “They figure that the United States is a country they can count on to be reliable.” The article expressed the belief that the United States will not engage militarily. Instead, the U.S. is only interested in muddying the waters and playing the role of judge. The author also suggested that China’s relationship with ASEAN (Association of Southeast Asian Nations) will not be damaged by a small military conflict because most of the ASEAN countries would continue doing business with China. Zhou concluded that too much “peace talk” would send the wrong message, namely, that China lacks confidence. He recommended the strategy of “attack early, attack quickly, and attack heavily.”
  • Suicide Mission Volunteer Was Double Agent, Officials Say – NYTimes.com
    awesome, if this account is true

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