Today’s China Readings July 23, 2012

The big news is the flooding in Beijing over the weekend. So far the government has announced 37 deaths but given reports of devastation in parts of the Fangshan District in southwest Beijing the death toll may rise. Economic damage estimates have already passed 10 Billion RMB and are likely to increase as well. The government announced that the rainfall was the most in 60 years in the city proper and in 500 years in the Fangshan district. I suspect they do not have good records going back 500 years, so the “500 years” claim is probably an indication that things are quite bad in Fangshan and this is a way the government will argue they can not be blamed as it was such an unprecedented natural disaster.

CCTV has posted aerial footage of some of the devastation in Fangshan here. The narration is in Chinese. At minute 2 you see an almost 1 km long flooded stretch of the Jinggang highway where some on Sina Weibo said at least 100 cars, trucks and buses were submerged. At about 4:15 you can see how mountainous parts of the Fangshan District are. Fangshan’s most famous area is the Peking Man site, and there are parts that are so rural and poor that they make Appalachia look almost like Westchester County. Fangshan is a stark reminder of the close proximity of the first and third worlds in China, and given the topology, the deforestation and the poor infrastructure in parts of Fangshan things could really be quite bad there. Let’s hope not, but if there are significant deaths and damage Beijing is going to have a hard time covering up the news.

The Wall Street Journal reports on the reaction on social media to the flooding in Anger Swells After Floods Kill At Least 37 in Beijing, writing that there was much criticism directed at Beijing’s overwhelmed sewer system:

Among the sharpest criticisms came in the form of a series of photos, posted to Sina Weibo around midnight, contrasting Beijing’s flooded streets with images of sewer systems in other famous capitals, including Tokyo’s massive “Underground Temple” flood prevention system.

“Sewers are not a face-giving infrastructure project,” artist Li Yijia wrote in response to the images, repeating a sentiment widely expressed elsewhere on the site.

Xinhua also criticized the Beijing sewer system in 新华网:北京排水管网有欠账 逢涝必瘫待改变. Guo Jinlong, the new Party Secretary of Beijing, was mayor from 2008 until earlier this month. Assigning responsibility for infrastructure inadequacies and diaster preparedness problems could be tricky.

Rapid urbanisation has outpaced basic infrastructure development, as the Global Times points out:

Beijing’s decades’ old drainage system is not suitable for current requirements, especially as heavy rain is more common now, said experts Sunday.

“The capital’s drainage network is already outdated, although a lot of repair work has been done to maintain it,” said Zhang Junfeng, founder of the non-government water resource watchdog Happy Water Journeys.

“The capital’s drainage system could be among the most advanced across the country, but it isn’t on a par with some developed countries, where the systems are designed according to a much higher standard,” said Dai Shenzhi, a professor at the College of Architecture and Urban Planning at Tongji University in Shanghai.

Overhauling the entire network may be unfeasible, as it will take time and an enormous injection of cash.

More urban development increases the risk of flooding, as there is less natural vegetation to absorb rain. It would be much more feasible to allocate areas of wetland to be used as overspills to guard against floods, Dai said.

Echoing Dai’s views, Zhang pointed out however that “the nation’s obsession with rapid development has many local governments paying little attention to building wetlands, as it won’t result in economic benefits.”

Given the insufficient basic urban infrastructure in most China cities, could Michael Pettis have too narrow a definition of “infrastructure”? From his most recent newsletter:

…the economic value of infrastructure in China, which is based primarily on the value of labor it saves, is a fraction of the value of identical infrastructure in the developed world.  It makes no economic sense, in other words, for China to have levels of infrastructure and capital stock anywhere near that of much richer countries since this would represent wasted resources – like exchanging cheap labor for much more expensive laborsaving devices.

Beijingers certainly expect to have levels of infrastructure near that of “much richer countries”.

The government’s initial response was seen by many as almost incompetent. Some Beijing residents rose to the occasion, helping those stranded Saturday night with lodging or free rides. People will tolerate rampant corruption when the economy is doing well and the government delivers the goods, but the economy is struggling and the floods may have significantly damaged the credibility of the Beijing Municipal Government. It is one thing when a disaster happens in distant provinces and rural areas, quite another when one hits the capital city. Since the legendary Yu the Great Chinese have associated flood control with dynastic legitimacy, so expect the central leadership to be very concerned about the response to this disaster.

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Today’s links:
  • Storm kills 37, drainage system overwhelmed – Globaltimes.cn
    Thousands of people in Fangshan district are counting the costs of the flood, with over 20,000 displaced and many more awaiting help from local authorities. Rescue operations were ongoing in the district as of last night. Fangshan’s Hebei township saw the heaviest deluge of rain for 500 years, flood control authorities said.Zhang Yong, leader of Blue Sky Rescue Team, was involved in rescuing around 150 people from the Beijing-Hong Kong-Macao Expressway trapped under a railway bridge.”The water was almost five meters deep, submerging over 100 cars in over 1,000 square meters of water. We rescued the trapped people and brought them to safety,” said Zhang.
  • Locals allege tornado in Tongzhou killed two – Globaltimes.cn
    The roof of a storage building at a construction site in Zaolinzhuang village, Zhangjia township, was toppled by strong winds, killing two workers Saturday afternoon. Another person, also in Tongzhou, was killed after being struck by lightning.
  • Couple die in landslide at Shijingshan store – Globaltimes.cn
    Two people died and one was injured after a landslide Saturday evening engulfed a small store in Shijingshan district.
  • City revokes fines on abandoned vehicles – Globaltimes.cn
    Drivers who received parking fines after being forced to abandon their cars on Saturday during the downpour will not have to pay up, Beijing government announced Sunday night.
  • North Korea Reviewing ‘Nuclear Issue’ to Counter U.S. – Bloomberg
    North Korea said it is reviewing the “nuclear issue” to counter the U.S., days after Kim Jong Un consolidated his power by taking the nation’s top military rank and removing the army chief.
    The U.S. is funding plots to bring down the regime in Pyongyang, an unidentified Foreign Ministry spokesman said in a statement carried by the official Korean Central News Agency yesterday. The dispatch didn’t elaborate on what was meant by the nuclear review.
  • 监管风暴骤起 票据链实地调查|监管|风暴|骤起_21世纪网
    随即,福建、云南等地警方相继公布辖内票据大案告破,涉案金额200多亿元。积弊已久的票据市场正迎来一轮集中打击的风暴。
  • Stuart R. Schram, Physicist and Mao Scholar, Dies at 88 – NYTimes.com
    Over the next 50 years, Mr. Schram, who died on July 8 in France at 88, completed a seminal biography of Mao just before the disasters of the Cultural Revolution, and spent much of the rest of his life translating into English exhaustive volumes of Mao’s words, in the process shedding critical light on a rapidly changing China…To other China scholars, Mr. Schram provided cleareyed analysis of Mao at a time when many people were eager to reduce him to either an evil dictator or a visionary hero. Mr. Schram’s works, they say, are touchstones in the study of how Mao adapted Marxism for consumption by one of the world’s oldest cultures.
  • Attack of the Piranhas–Sinica Podcast
    This week on Sinica, Chinese economic growth is on the rocks, ASEAN tensions are breaking through the facade of East-Asian political unity, a major Chinese telecom company is implicated in an international trade scandal, and man-eating fish have escaped into the wilds of Guangxi, prompting a profusion of local get-rich-quick schemes and threatening our plans to take a break from it all with a swimming vacation in southern China.
  • Now On Line: ‘China and Democracy’ Debate With Minxin Pei and Eric Li – James Fallows – The Atlantic
    disappointing how much major media coverage authoritarian apologists get. Good for Fallows for asking some tough questions. mainstream US media is too worried about balance when they really should be calling out the bullshit
  • New Oriental, Schooled in U.S. Stock Market, Still Makes the Grade at Home | Tea Leaf Nation
    However, judging from sentiments on China’s social media, New Oriental still gets high marks at home. Many China-based observers see an opportunity to scoop up shares of a Chinese blue chip company on the cheap. Liu Shengjun (@刘胜军改革), a columnist for the Financial Times’ Chinese edition, tweeted on Sina Weibo, China’s Twitter, “Great time to buy up New Oriental at the bottom.” [1]
  • Chinese Artist Ai Weiwei Loses Appeal on Tax Charge | World | TIME.com
    The artist and activist insists that the case against him is politically motivated and says he plans to continue to challenge the government’s charge
  • Sany Heavy Said to Delay $2 Billion Hong Kong Stock Sale – Bloomberg
    Sany Heavy Industry Co. (600031), China’s biggest machinery maker, postponed a $2 billion share sale in Hong Kong after struggling to attract investors, two people with knowledge of the matter said.
  • Fitch Ratings: China may Avoid “Hard-Landing” but Rebalancing Postponed-Caijing
    love the economists and their long-term prescriptions//
    “This is likely to avoid a ‘hard landing’ in the short term, but only at the cost postponing resolution of the economy’s structural imbalance towards investment,” Fitch Rating said.
  • Short Bets on China Could be “Dangerous”: HSBC Analyst-Caijing
    a brave call. could be right, short china trade seems crowded, govt could squeeze hard with a few policy announcements//
    “At this point in time, with low valuation and massive shorts in the market, it is not rational to bet that China will further fall from here”
  • Taiwan To Get New Powerful Rocket System: Report | Defense News | defensenews.com
    indigenous system//
    Taiwan is scheduled to take delivery next month of a powerful multiple-launch rocket system aimed at neutralizing former rival China’s amphibious landing capabilities, local media reported July 22.
    The weapon, called Ray Ting 2000 or “Thunder 2000”, will be put into service in August, said the Taipei-based Liberty Times, as the military plans to phase out the current rocket system introduced three decades ago.
  • 明鏡新聞網: 明鏡獨家:習近平家族新聞,“攪局”十八大
    more speculation on the possible impact of the bloomberg story on xi jinping. funny how all these “experts” assume the story was planted by a xi enemy. i have a high level of confidence that is not the case in this story.
  • 钓鱼岛:我们是否应有两手准备?-王小鲁-我的搜狐
    even Professor Wang Xiaolu talking about the need to be ready to use force over the Diaoyu Islands and S China Sea, if the other side makes the first move/breaks the status quo.
  • Health-care reform: Heroes dare to cross | The Economist
    SO INSPIRED was China’s health minister, Chen Zhu, by a new push to reform the country’s dysfunctional health-care system that he wrote a poem. “Wind and thunder move across the country, health reform brings good tidings,” read the first lines of the paean, dutifully printed on the front page of his ministry’s newspaper. But few share Mr Chen’s optimism. The latest phase of China’s health-care reforms could prove difficult, as hospitals and doctors are asked to end their financial dependence on medicine sales. The wind and thunder could drown out the good tidings
  • Violence against doctors: Heartless attacks | The Economist
    AFTER a growing number of attacks on medical staff in China, doctors and nurses are finding hospitals increasingly unsafe. According to figures from the Ministry of Health, more than 17,000 “incidents” aimed at hospitals and their staff occurred in 2010, up from around 10,000 five years earlier. In a recent editorial, the Lancet, a medical journal published in Britain, warned bluntly that “China’s doctors are in crisis.”
  • Jiaolong pilot recounts journey – Xinhua | English.news.cn
    did Chinese translators invent the word oceanaut? and has James Cameron’s network been hacked yet?//
    While the film director and explorer James Cameron was undertaking a 10,898-meter dive into the western Pacific Ocean in March, Fu Wentao, a 30-year-old man from Yueyang, Hunan province, was busy preparing for China’s 7,000-meter dive project.
    As one of three Chinese oceanauts, Fu said deep dives are the stuff of his dreams. On June 27, he had the opportunity to live them aboard the submersible vehicle Jiaolong.
  • Fish farm in waters at Meiji Reef of South China Sea – Xinhua | English.news.cn
    A fish farm is seen in the waters at Meiji Reef of South China Sea on July 22, 2012. There are nearly a score of fishermen working at the farm regularly.
  • 2012年07月23日 星期一_A01版-头版_新京报电子报
    Beijing News Page 1 on the floods
  • 林毅夫:下一轮刺激政策仍是超越凯恩斯主义_经济频道_财新网
    Justin Lin Yifu says the next round of stimulus will exceed Keynesianism//
  • 计生委:坚持计划生育杜绝大月份引产|计生委|计划生育|大月份引产_新浪新闻
  • China Central Bank Adviser Forecasts Growth Slowdown to 7.4% – Bloomberg
    A Chinese central bank adviser predicted the nation’s expansion may cool to 7.4 percent this quarter, adding to concern that the world’s second-biggest economy has yet to bottom out.
    Song Guoqing, an academic member of the People’s Bank of China monetary policy committee, also warned that a decline in producer prices in tandem with consumer inflation may hurt investment returns of industrial companies, damping their desire to expand.
  • Bank of America Defends China’s GDP Data – Bloomberg
    Bank of America Corp. has stepped in to defend China’s second-quarter economic-growth data after analysts from Barclays Plc to Mizuho Securities Co. said the figures may be overstated.
    Shen Jianguang of Mizuho said in a research report this week that deeper slowdowns in industrial and electricity output contradict the gross domestic product statistics. Lu Ting, a Bank of America economist in Hong Kong, said in a July 19 note that industrial production is in line with GDP and that electricity data may fail to capture some growth.
  • Alibaba’s Tmall Woos U.S. Retailers as Chinese Buy Brands – Bloomberg
    Alibaba Group Holding Ltd.’s Tmall online shopping unit aims to add more overseas retailers as demand for U.S.-branded goods from its users in China increases.
    The Chinese company met business owners at seminars in Chicago, Detroit, Atlanta and Seattle this month as part of the unit’s first U.S. tour to discuss opportunities to sell goods to consumers in China via the Internet, said Janet Wang, head of international business development at Tmall.
  • China Foreign Deals Must Obey Market Principles, Regulator Says – Bloomberg
    Chinese companies making foreign acquisitions must obey market principles, follow “international rules of the game” and play down national interest, the nation’s foreign-exchange regulator said.
  • U.S. Missile Shield May Make China Build Better Missiles | Danger Room | Wired.com
    But there’s an irony in here for the United States, too. Its new animating concept for the Navy and the Air Force is to be able to stop any adversary from pushing ships, subs, jets and bombers away from its shores or its skies. The number-one way most adversaries do that: missiles. If China reads the revamped U.S. missile shield as a provocation that requires a new wave of missile advancement, that’s going to make the Navy and Air Force’s job more complicated. (Complicated isn’t the same as impossible, though.) China may not be the only nation locked into faulty defense logic.
  • 五毛VS美分 中共切割左右对抗网络暴力_多维新闻网
    【多维新闻】左派代表吴法天被群殴一事的最新进展是,四川电视台记者周燕19日通过微博平台发道歉信,被打吴法天则在晚间时候以长博文回应。然由此事挑起的公众对网络暴力的挞伐声却仍在蔓延。其中最引人关注的,当属中共党报以正能量对抗暴力,及其首次应和互联网用语将“美分”作为“五毛”的对立面提出来的做法。
  • 明鏡新聞網: 解放军高层人事大调整 不少新任将领出自将门
  • 明鏡新聞網: “江澤民大病一場導致很多人轉向”
  • Infant formula found contaminated |Society |chinadaily.com.cn
    Authorities in Guangzhou, capital of South China’s Guangdong province, said Sunday that they have discovered mildew contamination in some infant formula products during an ongoing dairy safety overhaul.
  • China’s Communist Elders Take Backroom Intrigue Beachside – NYTimes.com
    But it is midsummer in Beidaihe, which means one thing: Communist Party elders and their families are congregating here, about 180 miles east of Beijing, to swim and dine and gossip — and to shape the future of the world’s most populous nation.
  • Today’s China Readings June 8, 2012 | Sinocism
    from early June, background for the NYT article on Beidaihe//
    The South China Morning Post reports in Party polls 370 members on choice of top leaders that senior members of the Communist Party recently held an informal poll to pick their leaders for the next decade. The poll is non-binding, but the paper quotes scholars saying this “vote” represents a very important step forward for intra-Party democracy (the kind of political reform Chinese leaders are really talking about when so many in the West get excited about speeches mentioning political reform.)There was another interesting tidbit in the SCMP story. China watchers have been debating whether or not Hu Jintao has reinstated the annual summer meetings in Beidaihe after publicly saying a few years ago that there would be no more summer seaside summits. According to the article:“one party insider, a party theorist, confirmed that a secret vote had been conducted ahead of the top leaders’ summer summit, known in the past as the Beidaihe meeting, after the seaside resort in Hebei, neighbouring Beijing, where it was held. The meetings, often in mid-June, have continued since Hu came to power but now convene in Beijing.”So there are Beidaihe meetings, but in Beijing? No wonder people are confused.
  • Vietnamese protest against ‘Chinese aggression’ | World news | guardian.co.uk
    Demonstrators also driven by increasing frustration with Hanoi’s one-party government over human rights violations
  • ASEAN urges South China Sea pact but consensus elusive | Reuters
    Southeast Asian states sought to save face on Friday with a call for restraint and dialogue over the South China Sea, but made no progress in healing a deep divide about how to respond to China’s growing assertiveness in the disputed waters.
  • China to formally garrison disputed South China Sea | Reuters
    China’s powerful Central Military Commission has approved the formal establishment of a military garrison for the disputed South China Sea, state media said on Sunday, in a move which could further boost tensions in already fractious region.。。
    Sansha city is based on what is known in English as Woody Island, part of the Paracel Islands also claimed by Vietnam and Taiwan. China took full control of the Paracels in 1974 after a naval showdown with Vietnam.
  • Beijing Pressures House Curbs in Urgent Notice; Loans to Property Grew 10.3Pct in H1-Caijing
    Departments at different levels “should have a clear understanding [of current situation], hold back from easing regulations on property markets,.. and avoid any rebound in housing price.”
  • 北京特大暴雨已致190万人受灾 经济损失近百亿|北京|暴雨_新浪新闻
    全市最大降雨点房山区河北镇为460毫米,接近500年一遇;
  • Murdoch out of step in new China – Business – Business – smh.com.au
    2005 report. Rupert Murdoch made a bad deal with Ding Guangen’s son//
    In June, uniformed customs officials and inspectors from the Industry and Commerce Administration appeared in offices of a company linked to Star in Beijing, interviewing staff and confiscating certain documents and company seals relating to allegedly illegal marketing of Star’s programming to local outlets. The passport of one executive has been impounded….Around the same time, the State Administration of Radio, Film and Television shut down a deal whereby Star effectively took over the operations of a TV broadcaster based in remote Qinghai province that, via satellite links, could have reached hundreds of millions of viewers around China….The leasing deal with Qinghai TV had been made by a company called Runde Investments, in which a communist “princeling” called Ding Yucheng, son of former communist party propaganda minister and politburo member Ding Guangen, is a prominent investor. Media sources here say News had put $US30 million ($39.7 million) into the venture via Rundle.
  • Former Chinese propaganda chief Ding Guangen dies; oversaw party control of media and arts – The Washington Post
    Ding Guangen, a former chief of propaganda for the ruling Communist Party who oversaw party control of media and the arts in the 1990s, has died at age 83.
  • China Focus: Beijingers survive urban flooding|chinadaily.com.cn
    Many volunteered to offer rescue, helping drag vehicles out of flooded areas and transporting passengers back home by individual means.
    At least 80,000 travellers were stranded at the Beijing international airport due to the cancellation of more than 500 outbound flights, hundreds of taxi drivers and motorists in the closest big urban neighborhood of Wangjing drove to the airport to give free rides to strangers, who were advised by the airport to accept such assistance under the precondition of ensured personal and property safety.
  • 新华网:北京排水管网有欠账 逢涝必瘫待改变_新闻_腾讯网
    Xinhua on problems in Beijing’s sewer system
  • 北京大雨 老外雨中玩起自由泳 – 高清在线观看 – 腾讯视频
    foreigner swimming in the floods. guess he wants hepatits and more
  • 警用直升机空中航拍北京暴雨灾情 – 高清在线观看 – 腾讯视频
    aerial video of floods in Beijing, minute 2 or so you can see 1 km or so of the flooded jinggang highway, where some on weibo said 100 cars or more were submerged, with occupants. no confirmation yet. at about 4:15 you can see how mountainous Fangshan is, and a flooded river near the Fangshan/Hebei border
  • 北京遭遇61年来最强暴雨_腾讯新闻_腾讯网
    QQ News special site about the Beijing floods
  • Death toll from Beijing downpours rises to 37 |Society |chinadaily.com.cn
    Nearly 60,000 people evacuated from their homes, Hu Yongqi and Cui Jia report in Beijing…The 20-hour storm that hit Beijing on Saturday claimed the lives of 37 people — 25 of the deaths were caused by drowning…Millions of people across the capital were hit by the deluge and thousands were evacuated from their homes. The flooding caused losses of at least 10 billion yuan ($1.6 billion), according to the Beijing municipal government….The southwestern district of Fangshan was the hardest hit. Of the 56,933 people evacuated in the city, 20,990 came from Fangshan. There were two landslides in the district…The rainfall reached 460 millimeters in the district, the highest ever recorded, according to the government.In the rest of Beijing, the average was 170 mm, the highest since 1951.
  • Anger Swells After Floods Kill At Least 37 in Beijing – China Real Time Report – WSJ
    The deaths of more than three dozen people in Beijing as a result of heavy rains on Saturday have prompted public expressions of grief and anger and led some in China to question how a city lauded for its shiny new infrastructure and rapid modernization could fail so tragically in the face of bad weather.
    Urban areas of Beijing were hit with an average of nearly nine inches of rain over 16 hours on Saturday — the heaviest the Chinese capital has seen in six decades, according the state-run Xinhua news agency.
  • MEMO: President Obama Has Lost All Credibility On China And Trade Romney campaign position document
  • A Beijing Family’s Holiday From Pollution – NYTimes.com
    At home in Beijing, we only drink and cook with bottled or purified water. Air purifiers hum at home. My children wear protective face masks outdoors when the pollution spikes. About a year ago, teachers at my son’s school began expressing their approval when he wore a mask — they know the air is bad, informed partly by recent microblog campaigns like the one Sharon described. But masks are not a long-term solution for the country. Neither is leaving.
  • Citic Agrees to Buy Credit Agricole’s CLSA for $1.25 Billion – Bloomberg
    Citic Securities (6030) Co., China’s largest brokerage by market value, agreed to buy Credit Agricole SA (ACA)’s Asian CLSA unit for $1.25 billion.
    Citic Securities, based in Beijing, completed its purchase of a 19.9 percent stake in the brokerage for $310.3 million, the companies said in a statement today. Citic Securities will buy the remaining 80.1 percent in CLSA for $941.7 million subject to conditions including regulatory approval, the companies said.
  • Warburg Pincus Sues Titan Petrochemicals Over Contracts – Bloomberg
    Titan, its founder Tsoi Tin Chun and two other executives are responsible for 1.48 billionyuan ($232 million) of unauthorized guarantees by subsidiaries of Titan Group Investment Ltd., Warburg Pincus affiliate Saturn Storage Ltd. said in its lawsuit with Hong Kong’s High Court yesterday.
  • Little-known Chinese firm’s offer for Hawker Beechcraft raises eyebrows|Economy|News|WantChinaTimes.com
    In contrast, Cheng’s headquarters in Qingdao had only nine workers. Cheng refused to be interviewed, while his employees in Qingdao said Chen’s representatives were on an inspection tour to Hawker Beechcraft, and negotiations with the company were going on.
    The newspaper quoted a source from the aviation industry as saying Cheng’s bid was a farce and doomed to fail.
  • 黄鸣承认与原副省长黄胜交情
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