Ursine China pundits have seized the commanding heights of the media and some look to be planning their victory laps. Perhaps they are right this time, or perhaps they have mistaken an injury time-out for the end of the match. Beijing is clearly concerned about the decelerating economy and is not going to let things go off the rails without a fight. Reuters tells us that China is targeting infrastructure spending to lift the economy, including perhaps 600B RMB of investments to upgrade water purification facilities and residential water purifiers, areas in obvious, desperate need of upgrades given that Caixin has now told us the The Dirty Truth about Water Quality.
Maybe it is too late and maybe the stimulus transmission channels are too broken to have much effect. But even if you think China is just kicking the can down the road, like most of the rest of the world is doing, do not forget that China has a lot of cans, a lot of feet and a lot of (new) roads.
The Beijing municipal government has taken steps to revive its property market and transactions increased 40% from April to May–北京楼市“红五月”被放大 疑为政府托市. Shijiazhuang just raised its reference land price by 43% effective June 1–6月1日起石家庄基准地价上调涨幅近43%–prompting a Beijing developer friend to excitedly quote a famous Chinese poem that “ducks first know when the Spring river water begins to warm” (春江水暖鸭先知, from 苏轼-惠崇春江晚景) to make his point on Weibo that the Shijiazhuang move is another early sign of loosening in the property market. One real estate market participant has posted to Weibo a chart of what it believes are the government’s recent signals about imminent moves to simulate the property market.
Beijing’s residential real estate has struggled but its commercial property has boomed, and a Caixin columnist is again warning of a bubble in Beijing’s commercial property sector–Commercial Real Estate Is No Safe Haven. I live in Beijing CBD and office rents have nearly doubled in the last 2-3 years, vacant space is very difficult to find, retail rents and sale prices in certain locations (generally anywhere but the SOHO CBD properties) have also risen significantly, and the imminent opening of Line 6 will add a third subway line to Beijing’s CBD, making the area even more convenient for commuting workers.
Last month well-known distressed property investor and China commercial real estate bear Jack Rodman announced that he is leaving Beijing. According to China’s ailing bad debt market cries for change “veteran investor Jack Rodman has had enough. After waiting 11 years for China to sell its rising pile of bad bank loans, he is quitting and going to Spain instead.”
I remember Jack Rodman from his 2009 CNN interview Watch Building Boom Becomes Bust? in which he walked around Beijing CBD pointing out empty buildings (my apartment building was in two of the shots and so I was annoyed) to make his point about the coming Beijing commercial real estate crash. Rodman may be right that China is hiding lots of bad real estate debts and a crash will come. But he was early.
Not just yet. The odds are that China will navigate these shoals and continue to grow at a fairly rapid pace of around 7 percent a year for the remainder of the decade, overtaking the United States to become the world’s biggest economy around 2020. That’s a lot slower than the historical average of 10 percent, but still solid. Considerably less certain, however, is whether China’s secretive and corrupt Communist Party can make this growth equitable, inclusive, and fair. Rather than economic collapse, it’s far more likely that a decade from now China will have a strong economy but a deeply flawed and unstable society..
In a few years’ time, China will likely surpass the United States as the world’s top economy. But until it solves its fairness problem, it will remain a second-rate society.
Chengwei Capital’s Eric X. Li has made hundreds of millions of dollars investing in China, including through his stake as the largest outside shareholder in Youku, a Chinese Youtube-clone. The media savvy Li has become an influential commentator and seems to be working towards becoming the Kishore Mahbubani of China. In his most recent essay Li discusses China’s political system and contemporary Chinese art. From his Authoritarian Art:
Prices of contemporary Chinese art continue to reach commanding heights. It is a phenomenon many liberal political commentators rather ignore. It does not fit their narrative. The story they prefer to tell goes as follows: Artistic freedom is the prerequisite of creating great art; China’s authoritarian politics places severe limits on artistic freedom; such lack of freedom makes it impossible for China to attain real cultural achievements — the much craved “soft power.”
For those not familiar with Li’s writings and the reactions they have generated, I recommend you read Professor Sam Crane’s Reply to Eric X. Li: Cultures are not Incommensurable and the CCP is not Confucuian.
If you want to see some cool, expensive art created in a democratic society, check out Roy Lichtenstein’s “Landscapes in the Chinese Style.”
Thanks for reading, and remember the best way to see this daily post is to subscribe by email, especially if you are in China, as Sinocism is still blocked here. You can also follow me on @niubi or Sina Weibo @billbishop. Feel free to recommend to friends or donate.
- Watch: CCTV host Yang Rui gets the NMA treatment: Shanghaiist
Next Media been good for Taiwan soft power
Wanda, the new owner of the AMC movie theater chain, is in trouble for demolishing a school in Sichuan that was built in 2009 with Wenchuan quake reconstruction funds
- Battle lines drawn for Law of the Sea Treaty | The Cable
On Wednesday, the Senate Foreign Relations Committee kicks off a major new effort to ratify the Law of the Sea Treaty, and interested senators are already preparing behind the scenes for a protracted battle over the issue.
- Bear in a China Shop – By Arthur Kroeber | Foreign Policy
- 媒体曝菲军舰曾试图向中国渔民开炮 但火炮哑火_资讯频道_凤凰网
- Pork prices keep falling despite gov’t intervention – Xinhua | English.news.cn
China’s pork prices continued to fall 1 percent last week despite the government’s move to purchase frozen pork from the market in order to boost national reserves, the Ministry of Commerce (MOC) said Tuesday.
Weak pork prices last week sealed an accumulated decline of 15.7 percent and marked the 16th consecutive week of declines, the MOC said in a market monitoring report on its website.
- 公务员招考内幕：危险的“第一名” – 宏观 – 21世纪网
corruption in the civil servants testing and recruitment process? shocked…//
- Chinese gov’t departments told to “buy China” – Xinhua | English.news.cn
Central government departments should continue to buy made-in-China products when implementing the government procurement policy, the Ministry of Finance (MOF) said Tuesday.
- China opposes Philippines’ attempt to draw third party – Xinhua | English.news.cn
China opposes Philippines’ decision to draw a third party into the incident over Huangyan Island.
The move will further escalate the situation and even change nature of the issue: FM spokesman.
China has consistently used diplomatic means to urge the Philippines to correct its mistakes.
- Standard Chartered “localizes” China strategy to recruit rich kids – Finance & Markets – morningwhistle
us or uk operate any differently? the way things are//
if local media reports are true, Standard Chartered is taking a much bolder approach: the bank will give priority for internship places to the children of its VIP clients — those with a deposit account of at least 500,000 yuan ($80,000).
An unnamed PR officer from the bank was cited as saying by Xkb.com.cn that if two candidates of the same calibre came head to head, the VIP candidate would be favored.
- New plan to reduce income inequality| china daily
A new income-distribution framework is set for approval to redress the growing gap between rich and poor, government officials said.
The framework comes at a time when the most affluent 10 percent of the population make 23 times more than the poorest 10 percent.
In 1988 it was seven times.
- Defense Ministry cancels Japan trip|Politics|chinadaily.com.cn
Japan’s Kyodo News agency on May 19 cited a diplomatic source saying the issue of the Diaoyu Islands and the meeting of the World Uyghur Youth Congress held in Japan were reasons for the postponement.
- Most Chinese favor scrutinizing foreigners: poll|Society|chinadaily.com.cn
BEIJING – Ninety-four percent of participants in a recent online survey agreed that the financial conditions, real estate assets and job status of foreigners living in China should be more closely scrutinized.More than 6,000 netizens have responded to a poll created on Monday by outspoken children’s writer Zheng Yuanjie on Sina Weibo, a popular Chinese microblogging site.Zheng kept the poll simple, limiting it to a single question with two choices: maintain the “status quo” of China’s visa policy, or implement a stricter examination process.
- 内地将进口英国猪肉 价格约为中国一半左右_网易新闻中心
China to begin importing English pigs and pork
- EXCLUSIVE: Here’s The Inside Story Of What Happened On The Facebook IPO – Business Insider
scandalous selective disclosure//
at some point soon, we will likely get the full story.
In the meantime, it’s hard to conclude anything other than this:
In one of the biggest IPOs in history, in which a huge amount of stock was sold to small investors, privileged Wall Street insiders once again got much better information than individuals did.
- Macquarie Lands Lead Role on $1 Billion Mongolia IPO – Deal Journal Australia – WSJ
Macquarie and Bank of America-Merrill Lynch have been appointed joint global coordinators and bookrunners for the proposed listing of Altain Khuder, which owns the Tayan Nuur iron ore mine in the southwest of Mongolia, a person familiar with the matter told Deal Journal Australia.The IPO, which could be worth US$1 billion, is targeted to take place in Hong Kong in the fourth quarter of this year, the person said.Altain Khuder produces iron ore from the Tayan Nuur mine around 168 kilometers from Mongolia’s border with China and has been exporting to customers including a unit of China’s Baosteel since October 2009.
- Sino-Forest Engaged in ‘Fraudulant Scheme,’ OSC Alleges – Bloomberg
- Disturbing Photos: Chinese man protesting forced demolition crushed to death by backhoe | Ministry of Tofu 豆腐部
- The Specter of the Cultural Revolution – NYTimes.com
Implementing real reforms, not merely a tweak here and there, will demand courage. Will Xi Jinping and Li Keqiang, the two men who will most likely take power in the autumn, be up to it?
I doubt it. They are selected to lead the nation because they’ve proven not only their ability to govern but also their loyalty to the regime. Like all top party leaders, they understand how to place the party’s honor before the country’s interest. This next generation of leaders is unlikely to rock the boat — and that’s unfortunate.
- Eric X. Li: Authoritarian Art
Amid the hustle and bustle of the Hong Kong International Art Fair, those who have been preaching “artistic freedom” seem rather out of place. For them, it is not supposed to be like this. For any objective observer, it is not unique at all. Human civilization has been blessed with marvelous artistic creation under all different kinds of political systems. Those who claim that only one form of political governance is conducive to the development of culture are under the spell of ideological self-delusion. It is an irony that they are the ones who seem to be politicizing art just as much as, if not more than, the authoritarian state they detest.Are they really prepared to pronounce Damien Hirst inherently superior to Michelangelo, Lady Gaga more enduring than Mozart and subway graffiti greater cultural monuments than the pyramids? The thundering footsteps of Chinese art are leaving them far behind.
- Introducing Shanghai’s ‘New’ Party Leaders – China Real Time Report – WSJ
The Communist Party of China Shanghai Committee on Tuesday returned Yu Zhengsheng to its helm and reaffirmed Mayor Han Zheng as his deputy. In all, half the 12-person Shanghai standing committee representing 1.82 million local party members was unchanged, including its No. 3 cadre and the only woman in the party’s top rank, Yin Yicui.
- 外媒挑拨中朝关系 朝方回应抓扣事件强调两国友好_国际新闻_环球网
- 基准地价拟上调 对石家庄市房价影响有多大-石家庄二手房 搜房网
- China Stocks Rise for 2nd Day on Infrastructure Spending Report – Bloomberg
China’s stocks rose for a second day on speculation the government will accelerate infrastructure spending to counter an economic slowdown
- Xinhua Insight: Global harmony-themed conference mulls Confucian wisdom – Xinhua | English.news.cn
Some 2,500 years after the great Chinese thinker Confucius put forward the concept of “harmony with differences,” his teaching still resonates, providing guidance to people seeking peaceful co-existence in a diversified world.
At the ongoing Second Nishan Forum on World Civilizations in Confucius’ birthplace – Qufu city in eastern China’s Shandong province, experts on philosophy, theology and religious studies from different cultural backgrounds have gathered to discuss the way toward a harmonious world.
Participants agreed that Confucius’ idea of harmony is not only an ideal to strive for, but also a tool for problem-solving in a world where conflicting beliefs sometimes endanger lives and cause grave problems.
- Obama’s ‘Paper Tiger’ Pentagon Budget Spends Five Times China – Bloomberg
U.S. spending accounted for 41 percent of global military expenditures in 2011, according to the Stockholm International Peace Research Institute. China accounted for 8.2 percent and Russia 4.1 percent, the Stockholm-based policy group said in an April report.
- How One Policeman Got Burned When Dealing With the Devil – Caixin Online
When a drug enforcement officer arrested men involved in trafficking he had no idea it would spell the end of his career because they enjoyed official protection
this week’s caixin cover package is “broadband china’s divergence”
- Roy Lichtenstein – March 1 – April 7, 2012 – Gagosian Gallery
LANDSCAPES IN THE CHINESE STYLE
- Unplugging from China: AES is latest foreign power company set to leave China as rising coal prices and unfavourable policies force firms out
Rising coal prices and unfavourable policies have forced foreign power companies – once eager investors – to leave the country。。
Apparent preparations by US energy giant AES Corporation to withdraw from China have raised eyebrows lately. Earlier this year, it emerged that the firm – one of the world’s biggest independent power generators – had engaged an investment bank to sell all or part of its business in China for US$300 million to US$400 million (1.9 billion yuan to 2.5 billion yuan). Then in April, China’s Energy magazine revealed that Yangcheng International Power Company, operator of the last Chinese thermal power plant under AES control, was up for sale.
“AES plans to sell off its Chinese assets as a whole and quit the Chinese market – it’s common industry knowledge,” said Lin Boqiang, director of the Center of China Energy Economics Research at Xiamen University..
As foreign firms flee, state-owned power companies have demonstrated their immunity to high costs – thanks to state-controlled contracts which price coal at 17% to 50% below market prices. “If private, local or foreign power companies could do the same as the five big state-owned firms and just offload bad assets and obtain funding, they would do so straight away,” said Lin Boqiang.
- Taiwan’s Jailed Ex-Leader Chen Shui-bian Faces Fresh Charges – China Real Time Report – WSJ
Taiwan’s incarcerated ex-president Chen Shui-bian might not able to go home as early as he expected.In a move Mr. Chen’s allies described as the continuation of a political vendetta, prosecutors on Tuesday slapped the former Democratic Progressive Party leader with fresh charges of concealing classified state documents.
- China Oil Imports From Iran Rebound – WSJ.com
China’s imports of Iranian crude oil recovered in April after sharp drops earlier this year, suggesting Beijing remains a steady customer despite U.S. efforts to tighten sanctions on Tehran.China’s April crude imports from Iran, at 1.6 million metric tons or about 390,000 barrels a day, were down almost 24% from a year earlier—but up more than 48% from March.
- Cargo Derivatives Exchange Falling Overboard – Caixin Online
A trading deck designed to help Chinese shipping companies hedge against fluctuating freight prices hit a figurative shoal in April, raising doubts about its crew and course.
The trouble surfaced around the beginning of May. On April 27, the Shanghai Shipping Freight Exchange (SSEFC) announced that derivatives trading for contracts coded UW1204 finished with a settlement price of US$ 2,715.40 per forty-foot equivalent unit (FEU).
A few days later, however, officials from the exchange, without saying why, notified affected investors via phone that all transactions made in the last 20 minutes before the trading closed had been nullified.
- School Built With Quake Funds Demolished – Caixin Online
A middle school rebuilt using funds from the Hong Kong government following the 2008 Sichuan earthquake was demolished to a make way for commercial property development by Dalian Wanda Commercial Properties Co. Ltd.
- Watch Building Boom Becomes Bust? Online – VideoSurf Video Search
Jack Rodman on CNN in 2009 talking about the coming Beijing commercial real estate bust
- Crosswater Realty Advisors
Jack Rodman’s firm//
Crosswater provides independent, unconflicted strategy and manager evaluation, asset workout and commingled fund/partnership restructuring assistance to institutional owners of underperforming real estate investments.
- Commercial Real Estate Is No Safe Haven – Caixin Online
(Beijing) – Since the central government enacted policies to slow the residential housing market in January 2010, investors have switched their focus to commercial real estate.
In the first quarter of 2012, the average vacancy rate of class A office buildings in Beijing was 4 percent – a new low – and the average rent climbed 39 percent from the same period in 2011. Investors saw this as a good sign and the building of commercial property projects to increase supply was accelerated.
But is commercial real estate really the safe haven investors are seeking?
- Analysis: China’s ailing bad debt market cries for change – CNBC
Veteran investor Jack Rodman has had enough. After waiting 11 years for China to sell its rising pile of bad bank loans, he is quitting and going to Spain instead.
His pull-out exposes a pressing failing in China’s booming financial sector: it does not properly dispose of a growing store of bad loans from banks’ profligate lending, keeping risks pent up within the world’s second-biggest economy…
“I’ve gone to Europe because I recognize that China is never going to come honest and play fair with its non-performing loans,” said Rodman, who runs his own investment firm Global Distressed Solutions after working for auditor KPMG for 37 years.
- China Water Sector May Get 600B Yuan Boost-CapitalVue News
China’s new standards for drinking water, which will be effective July 1, are expected to lead to 600 billion yuan worth of investments to upgrade water purification facilities and residential water purifiers, reports China Securities Journal.According to the report, there are more than 4,000 water works in China, supplying 60 million tons of tap water to more than 400 million urban residents per day.
- Beijing Symphony Axes Russian Cellist After Foot Video – China Real Time Report – WSJ
A Russian cellist with the Beijing Symphony Orchestra whose impolite treatment of a Chinese train passenger drew widespread online condemnation has been dismissed.
The orchestra disclosed the move to dismiss Oleg Vedernikov on its website in a statement dated Monday.
- Ma’s ‘one Republic of China, two areas’ declaration peeves Chinese scholars｜Politics｜News｜WantChinaTimes.com
Remarks by Taiwan’s president, Ma Ying-jeou, during his inauguration speech on Sunday referring to “one Republic of China, two areas” have gone down poorly with scholars in China, reports our Chinese-language sister newspaper Want Daily.Ma has increased the divergence between Taipei and Beijing by declaring “One Republic of China” instead of “one country” or “one China,” an unacceptable distinction for the leaders of the People’s Republic of China, according to Chinese scholars.
- Translation: Chen Guangcheng’s Brother Says He, Villagers First Thought Chen Was Dead | Tea Leaf Nation
Below are translated excerpts of a Chinese-language article (available here) that originally appeared in iSun Affairs, Issue 19, 2012. It details the stunning escape of activist Chen Guangcheng from his home in Dongshigu Village, part of Linyi municipality. Many thanks to iSun Affairs for its permission. Section headings and nicknames have been added by Tea Leaf Nation.]
- 北京楼市“红五月”被放大 疑为政府托市 – 地产要闻 – 21世纪网
40% increase in Beijing real estate transaction from April to May
- 最高人民法院披露黄光裕案内幕交易犯罪细节 – 港股 – 21世纪网
details released about the insider trading in the huang guangyu/gome case
- China targets infrastructure to lift economy, report says | Reuters
China will fast track approvals for infrastructure investment to combat a slowdown in the economy, a state-backed newspaper reported on Tuesday, underlining a call by Premier Wen Jiabao for policies to maintain growth.
- The Dramatic Story of a Ferrari Crash in Singapore Caused by China Second-gen Rich (Video) » M.I.C. Gadget
A dashboard camera on another cab not involved in the accident showed clearly the speeding Ferrari beating the red light and ramming into a taxi which has the right of way. The 31-year-old driver, named Ma Chi, died on the spot while the local taxi driver and his female Japanese passenger succumbed to their injuries later at the hospital. The motorcyclist sustained injuries to his spine and remains under medical observation. Ma’s pregnant wife arrived at the crash site and was surprised to find an unidentified female passenger in her husband’s car. The woman was rumoured in local press to be a KTV hostess and is currently still in hospital.
- China Reverse Merger News: Gulf Resources Litigation Moves Forward | China Hearsay
- Politburo Standing Committee to be reduced to seven: Boxun｜Politics｜News｜WantChinaTimes.com
A source from Beijing has told Want Daily that contrary to reports in foreign media, Zhou has not lost any of his power as the head of the Political and Legal Affairs Commission, the security organ that oversees all of the country’s legal enforcement authorities. On the contrary, Zhou was one of the two key officials ordered personally by party leader Hu Jintao to lead the investigation into Bo, the source claimed.This appears to be corroborated by a report from the state news agency Xinhua, which said Zhou joined President Hu and Premier Wen Jiabao for a ceremony honoring police officials in Beijing last Friday, an event possibly aimed at demonstrating unity among the central leadership.Zhou, who turns 70 this year, will step down from the standing committee along with Hu and Wen after the 18th National Congress to make way for Xi Jinping, Li Keqiang and the new generation of party leaders.
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