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Rural reforms are urgently needed. Beijing knows this, and Minister of Finance Xie Xuren said on August 20 that China “desperately needs to deepen comprehensive rural reforms”-谢旭人：新形势下亟待深化农村综合改革. Land reform, Hukou/urbanization reform, and rural health care reform are just some of the reforms that could be key to unlocking China’s next wave of more sustainable growth. They are also devilishly difficult to enact.
Official Chinese media has published a lot about rural reforms and urbanization over the last week.
China’s Academy of Social Sciences (CASS) has released The Urban Blue Book: China City Development Report No. 5 that is another stark reminder of the scale of China’s development challenges. The Atlantic summarizes some of the key data in Chinese Urbanization, By the Numbers.
According to CASS the Urban-rural income gap is growing, as “the ratio of income earned by urbanites to that of rural residents is about 5.2. The figure for income gap is about 26 percent higher than that of 1997 and 68 percent higher than that of 1985, it said, adding it far exceeded figures of the same kind in many foreign countries.”
A separate survey reports that “the wealth gap among rural households is widening. The Gini coefficient, an index reflecting the rich-poor gap, in rural China stood at 0.3949 last year, nearing the warning level of 0.4 set by the United Nations, the institute said…The last time the Chinese government published a Gini index for the nation was in 2000 when it stood at 0.412. But most scholars believe the index is currently between 0.45 and 0.50.”
Per the CASS report up to US$8 Trillion may be needed to integrate China’s new urban population as “over the next 20 years, up to 500 million people from rural areas in China will need to be integrated into the country’s cities.” Reuters reports that China’s rural migrants are key to consumption as “giving the migrant population living in cities permanent status and giving them equal access to fundamental public services would greatly stimulate China’s consumption growth,” the National Population and Family Planning Commission said in its latest annual report.”
Reform of the Hukou system is crucial to urbanization, but the resources may not be there. According to the Economy and Nation Weekly, Hukou reform is too costly for cities facing a cash crunch: “nearly all the mayors interviewed by a multi-agency research team suggested their cities cannot afford to reform the household registration, or hukou system, which if implemented would provide hundreds of millions of migrant workers with better social benefits. ”
I wrote about some of the resources constraints around Hukou reform in last year’s Are You Willing To Send Your Child To The Same School As The Children Of Vegetable And Rice Sellers?:
Discrimination against migrants is official policy, as evidenced China’s hukou regime. That prejudice is also common to many urban dwellers.
As with the rest of China, Beijing has too many people and too few resources. We have already seen Beijing limit purchases of cars and homes, and it is inconceivable that Beijing will reform the hukou system and allow anyone who applies to become an official Beijing resident. It seems Beijing’s motto is becoming less “Beijing Welcomes You” and more “Beijing for Beijingers.”
This kind of mainstream discrimination is also relevant to the “China Fantasy” some foreign observers seem to hold about the eventual “democratization” of China. Beijingers, and probably most urban dwellers in China, are highly unlikely to ever allow rural Chinese to have equal status with them.
The Impostor claims about Gu Kailai are getting a bit ridiculous. I think the body double rumors are off base for several reasons:
1. There are always rumors and conspiracy theories doubting the official version of events in China, with or without evidence. This week there is a second high profile body double rumor, about Zhou Kehua, the fugitive murderer shot dead in Chongqing;
2. The main “evidence” to support the Gu Kailai rumors appears to be that she is much fatter than she used to be. There are not that many public pictures against which to compare her appearance and most Chinese are not familiar with psychotropic drugs and their common side effects of weight gain and “puffiness” that we may be seeing with Gu Kailai;
3. Facial recognition is not necessarily the preferred method to verify identity. Voice recognition can be very accurate, and while she did speak in the courtroom so far I have see no one discuss her voice;
4. Assuming Beijing did substitute a body double, why would they do it at this stage, when there would have to be pictures of her released to the media? It would be far easier to have her go through the motions of a trial and then, once she has disappeared into the prison system, swap her out. And if this were the plan Gu would be more than happy to play along;
5. Based on a total lack of evidence presented so far I do not see how any serious person can responsibly conclude or state that the person we saw in the courtroom is a body double and not Gu Kailai. This is China, so anything is possible, but based on the publicly available information this particular conspiracy theory looks to be wrong.
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China youth daily takes a long look at beijing taxi industry. A horrible situation for drivers and passengers, a great one for owners of the taxi firms//
- Exclusive: Iran looks to Armenia to skirt bank sanctions | Reuters
Diplomats and intelligence officials told Reuters that Turkey and the UAE remain Iran’s principal banking connections, while China and India are becoming areas of concern as Tehran now finds it difficult to conduct transactions in U.S. dollars and euros. As a result, it has turned increasingly to doing business in less-traceable local currencies
- 人民日报-加紧制裁伊朗 打压欧洲银行 美国想借反洗钱稳固金融霸权
People’s Daily: “US Using Anti-Money Laundering to Strengthen its Financial Hegemony”. Effective US control of global banking system drives China nuts. It is a very valuable US strategic asset//
- China Cotton Demand Seen Falling 11% on Economy’s Harsh Winter – Bloomberg
Cotton consumption in China, the largest user, may shrink 11 percent this year as demand falters, according to Hong Kong-listed Weiqiao Textile Co. (2698), which said that commodities are piling up as the economy deteriorates.
Usage may drop to 8 million metric tons this year, Zhang Hongxia, chairman of China’s largest cotton-textile maker, said in an interview. That compares with consumption of about 9 million tons in 2011, according to Zhang, who had forecast in March that 2012 demand may gain to as much as 9.5 million tons.
- Jiang’s $310,000 at ICBC Compares to Dimon’s $23 Million – Bloomberg
what is the value of all the perks for an official of Jiang’s rank?//
JPMorgan Chase & Co. (JPM) pays Jamie Dimon $1.21 million for every $1 billion of profit at the biggest U.S. bank. Industrial & Commercial Bank of China (601398) Ltd., the world’s most profitable, gives its top executive $9,400.
- 人民网上半年净利增101% 募资仅购一辆直播车_互联网_DoNews-IT门户-移动互联网新闻-电子商务新闻-游戏新闻-风险投资新闻-IT社交网络社区
People’s Daily Online reports results, is very profitable and growing nicely
- Real estate financier held on fraud charges |Society |chinadaily.com.cn
Yu Jinyong, a high-profile Chinese businessman specializing in real estate financing, has been arrested on suspicion of commercial fraud, officials said.
Yu, president of the board of China Shidai Investment Holding Group, a real estate investment and developing company, was arrested by the Haidian District People’s Procuratorate on Friday.
yu jinyong and his arrest for a fraud a great story, ties in real estate development, weibo wars, fake us diplomas and more. chinese press all over it//
- Appeal to boost rare earths imports |Economy |chinadaily.com.cn
trying to drive prices up so his association firms’ stocks more valuable?//
Imports of rare earths, especially the medium and heavy variety, should be increased to meet demand and protect dwindling resources, an industry leader said.
Companies should be encouraged to explore the possibilities of boosting imports of rare earths, Liu Yinan, vice-chairman of the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, said.
- Consumers turn toward imported food|Economy|chinadaily.com.cn
according to the survey, based on interviews with 2,100 respondents, 61 percent of Chinese consumers said their confidence in domestic foods has declined in the past year, and 28 percent said they will buy more imported foods or brands to replace domestic products.
Dairy products are the most purchased imported foods, at 77 percent, followed by grains and oil, at 57 percent, and children’s food, at 56 percent.
- China’s Increased Investment Upsets Some Pakistanis : NPR
are Pakistanis even bigger fans of conspiracy theories than Chinese? good luck with this relationship…//
a boost in Chinese investment has sparked resentment in southern Pakistan, where activists accuse China of trying to be a new colonial power. A bomb blast recently hit near the Chinese Consulate in Karachi — an ominous sign of the rising tensions.
When Bashir Qureshi, a politician in his late 40s, died unexpectedly last month, the medical examiner said it was a heart attack. But Qureshi’s friends and family don’t believe that. Instead they claim there’s been a conspiracy, and that Qureshi was murdered. Poisoned, in fact — by China.
- Irrational, violent anti-Japanese protests should be avoided – Xinhua | English.news.cn
The China Youth Daily, the official newspaper of China’s Communist Youth League, in a Monday commentary described the violent acts as “extremely stupid,” as they not only led to the loss of property belonging to Chinese compatriots, but also damaged the country’s global image…”This kind of patriotism will never win praise. Instead, it will make the real patriots feel ashamed,” said the commentary.
- Commentary: Japan minister’s comments on islands spat are reality-distorting, counterproductive – Xinhua | English.news.cn
It is high time for certain Japanese politicians to scrap their wrong means of handling the Diaoyu Islands issue and ties with China. They should learn more history about the islands, mind the Chinese people’s feelings, and do something conducive to bilateral ties.
- CHINASCOPE – IHL: Chinese Global Firms Try “Unusual” PR Techniques
The International Herald Leader (IHL), a branch of Xinhua News, published an article discussing some recent public relations moves by a few of China’s global firms. These companies have been hiring former U.S. government officials to play a key role in their firms. One example is Huawei, a large communications equipment vendor. It is widely known for its Chinese military background. Huawei recently hired Donald Andy Purdy, who is a former Homeland Security Department official, as its chief security officer. Another example is a large Chinese online B2B vendor, Alibaba. It hired James Mendenhall, who is the former General Counsel to the Office of the United States Trade Representative (USTR). Mr. Mendenhall will be representing the Chinese company in its intellectual property negotiations against the United States. The report also gave other “unusual” PR examples that happened in Australia and Chile. Although this type of approach is not popular among Chinese companies, more and more global Chinese firms are exploring the technique.
- 首套房贷优惠将取消 疑为开发商或中介借机逼单-每日经济新闻
discounts on first home mortgages to be done away with?//
Phoenix reporting that Liu Zhijun trial scheduled for September in Liaoning//
- Vietnamese banker Nguyen Duc Kien arrested – Telegraph
economic problems in china, economic problems in vietnam. a skirmish in the south china sea might be a distraction and an economic fillip for both?//
Nguyen Duc Kien, 48, founder of one Vietnam’s biggest lenders, the Asia Commercial Bank (ACB), was seized by police for what officers described as conducting “illegal business”.
Stock markets tumbled yesterday (Tuesday) when the high-profile detention was reported in the state media, with the main HNX index closing down by 5.24pc.
The falls reflected nervousness among investors in economically troubled Vietnam where the government tightened credit and vowed to reform the banking sector in its battle to bring down raging inflation.
- Loans, Not Profits, Key to Assessing China’s Banks – WSJ.com
While the selloff in Chinese banks has made their valuations attractive, investors appear unwilling to buy, with some concerned that the banks underreport or are slow to categorize nonperforming loans…”What worries investors is no longer the results for the quarterly reports, but actually when the Chinese banks will recognize the [nonperforming loans] and give transparency to the market,” said Arthur Kwong, head of Asian-Pacific equities at BNP Paribas Investment Partners in Hong Kong
- China Spends to Boost Economy – WSJ.com
it isn’t clear where the governments will get the money. None of the announcements specified whether the funds were in place or whether they would come from local, national or private-sector sources. Local governments, which depend on land sales for a large part of their revenue, are facing budget constraints across the country due to the weak property market…It also isn’t clear whether the plans are new or previously announced. Chongqing’s five-year plan spanning from 2011 to 2015, unveiled by the city early last year, also called for 1.5 trillion yuan of new investment.
- Foxconn Trims Working Hours, Boosts Safety After FLA Audits – Bloomberg
- KKR buys into Novo, bets on China youth apparel market | Reuters
(Reuters) – Global buyout fund KKR & Co L.P. (KKR.N) has placed a bet on China’s $38 billion youth apparel retail market, saying on Tuesday that it had acquired a stake in privately held retailer Novo Holdco Ltd for $30 million.
- Shell plans at least $1 billion a year China shale gas investment | Reuters
China in the midst of a shale gas fever//
- BBC News – Data sent over first cables linking China and Taiwan
The first data has been sent over cables linking China and Taiwan, in what seems to be another sign of improved ties between the two…Traffic flowed over the two subsea fibre-optic cables for four minutes during a “completion ceremony”.
- Breakingviews: Goldman still on wrong side of China’s great wall | Reuters
really, goldman “unlikely to compromise its global reputation by taking on doubtful clients”? they sure are happy to make huge money on investments in them. remember shuanghui, of the clenbuterol pork?//
In equities, even a whizz like Westerman, who formerly ran global equity capital markets, may struggle to liven things up. The flow of IPOs in China is tightly managed by the securities regulator, and Goldman is unlikely to compromise its global reputation by taking on doubtful clients. Goldman’s strategy of giving local equity houses a run for their money may work eventually. For now the firm is in the same boat as its rivals: the slow one.
Accusations that a Peking university dean sexually harassed waitresses. This particular alleged incident occurred at a restaurant a friend owns//
- Rongsheng Gets Sued for Alleged False Statement-Caijing
more problems for rongsheng and its insider trading chairman//
Shipbuilder China Rongsheng Heavy Industries Ltd. is facing a lawsuit for alleged false statement, in which it said it would pull out a plan to take control of a Chinese diesel-engine maker as persistent European woes weights on its performance.
- Closer Look: Nearly Getting Away with Murder – Caixin Online
Doctored witness testimonies and hiding forensic evidence – how political loyalty served as ‘Exhibit A’ in the conviction of four officers involved in the Heywood cover-up
- Weak demand drags on Chinese carmakers, earnings growth stalls | Reuters
“This is a tough year for all automakers, large or small. 2011 wasn’t so good either because (government stimulus) incentives were gone, but it’s much worse now as the economy is not doing so well,” said Zhang Xin, an analyst at Guotai Junan Securities. “It’s like a double whammy.”
- China’s next top models bypass the catwalk for the Web | Reuters
Tian Yuan Yuan is China’s top Internet model, a title she earned by promoting products from skin-tight leggings to rabbit fur bags through online shopping site Taobao Marketplace…The models can make as much as 10,000 yuan ($1,600) a day, a far cry from the five-figure payouts top supermodels bank for a photo shoot, but a healthy sum considering average per capita full-year income for urban Chinese was just 21,810 yuan in 2011.
- 中国首艘航母拟今年服役 最早2017年形成战斗力_图片频道_新华网
China’s first carrier won’t be ready for battle until 2017 at the earliest
- Yang Rui Needs to Call the Atone Phone | China Hearsay
I understand that most Chinese would not consider these remarks anti-Semitic, and indeed might see Yang’s post as complementary to Jews. News flash: it isn’t. Just stop trying, for God’s sake. I think Yang is getting dangerously close to hurting the feelings of the children of Israel. If he keeps this up, someone a lot more Jewish than me is going to open up a big can of kvetch on his ass.
- 冷知识 Cool Knowledge » Did A CCTV Anchor’s Outburst Even Matter? Hu Yong on Yang Rui// So is it true then that a new wave of discrimination against foreigners is surging in China or, as some bloggers abroad said, that the specter of the Boxers2 has re-emerged? The answer lies in what the Chinese government will think and do. Every society has people within it who harbor anti-foreign feelings. China will not see a surge of anti-foreignism unless the government turns xenophobic. To suggest that Yang has raised the specter of the Boxers overstates his importance. Although some domestic political forces do want less foreign influence, China, as a whole, is unlikely to become an anti-foreign country. Instead, there are plenty of strong forces both inside and outside China propelling it into the international community. The stir caused by Yang Rui’s outburst is nothing more than a blip in the process of integration.
- Deutsche Bank Warns of Australian Recession Risk – WSJ.com
An investment pipeline valued at close to A$500 billion is expected support economic growth over coming years, but cracks are increasingly showing in the country’s mining industry. Prices for exports of coal and iron ore have slipped to multiyear lows as growth has cooled in China, the country’s biggest trading partner.
- Online firefly sales light up opposition|Economy|chinadaily.com.cn
With the Qixi Festival only two days away, online sales of fireflies, an illuminating symbol of love, have surged to the dismay of insect experts.
“Usually we sell hundreds of fireflies every day, but the sales volume increases significantly about a week before Qixi,” said Li Ting, a storeowner of Taobao, a Chinese online marketplace. She added that she sold 2,000 to 3,000 fireflies per day this week.
- Clean energy sources generate more electricity in China – Xinhua | English.news.cn
BEIJING, Aug. 21 (Xinhua) — Sources of clean energy generated 106.8 billion kilowatt-hours of electricity in July, up 31 percent from a year ago, according to figures released by the State Electricity Regulatory Commission (SERC) Tuesday.
During the first seven months, sources of clean energy generated 505.5 billion kilowatt-hours of electricity, accounting for 18.4 percent of total on-grid power, up 1.9 percentage points year on year.
- The European Chamber’s new study, “Dulling the Cutting Edge: How Patent-Related Policies and Practices Hamper Innovation”
looks at the current state and quality of China’s patent applications, and how policies such as quantitative targets are hindering the development of genuine innovation.
- Qihoo 360 Portal Drops Google as Default Search Engine | Marbridge Consulting – China Internet News
qihoo was a very important traffic partner for google in china. if qihoo no longer sends google searches then google’s china search market share could drop to as low as 5-7%, aka irrelevance//
Tencent Tech reports that Fu Sheng, CEO of Chinese software company Kingsoft (3888.HK), revealed on his Tencent Microblog that over the five days following the launch of Qihoo 360′s search aggregator, the essentially unknown site quickly took a nearly 10% share of China’s search market.
- Stabbing Rampage in Beijing Leaves Six Dead – Caixin Online
imagine if China had US gun laws//
(Beijing) – In a fit of anger over a family dispute, a man killed six people with a knife, including relatives of his ex-wife and a former party secretary, in Beijing’s northeastern county of Pinggu.
- Noble Will Target U.S. Agriculture Assets to Supply China – Bloomberg
“It’s hard to be the supplier and partner of choice for China in the grain space, and especially in the corn space, without having significant origination assets in the U.S.,” CEO Yusuf Alireza said today in an interview with Susan Li on Bloomberg Television’s “First Up” program. “Over the medium term, that’s an investment we’re looking to make.”
- Beijing Plans to Levy Congestion Charges to Ease Traffic Jams – Bloomberg
if official cars exempt the plan will be worse than useless//
Beijing plans to build a system for imposing road-congestion charges on motorists, adding to caps on vehicle registrations as China’s capital seeks to ease traffic jams and cut emissions…The municipal government will also accelerate the expansion of the subway network, increase dedicated bus lanes and encourage the use of bicycles for short commutes, according to a five-year development plan by the city’s transportation commission posted on its website.
- Fish demand ‘exceeds UK sea supply’ | Environment | guardian.co.uk
not enough fish in the world given chinese consumption growth?//
Level of consumption in 2012 has already met annual fish supplies, leaving the UK reliant on imported stocks
- Amazon.com: Cloud Atlas: David Mitchell: Books
- ‘Cloud Atlas’ Author Mitchell Mobbed in Shanghai – China Real Time Report – WSJNow, in China, too, social media is fanning the flames of the “Cloud Atlas” craze, helping Mr. Mitchell’s feed on Sina Corp.’s Weibo microblogging website rack up 35,000 followers in its first week.Why is the book so popular in China?According to one fan, 32-year old designer Li Wei Gang, the appeal of “Cloud Atlas” lies in its melding of contemporary British literature with themes that resonate in China.
- China’s Party papers, losing touch? – China Media Project So this is one provincial-level Party paper’s idea of what is relevant and has appeal to the average Chinese reader, to the “grassroots,” as they like to say? A profile of a selfless Party servant, a propaganda minister no less. And for good measure, a paean to the lasting value and importance of Party-run newspapers. ..The People’s Daily informs us that this “reform and innovation” at Liaoning Daily was the product of a top-down process of “liberation of thought” — that is, provincial Party leaders are in full support of, and have directed, the changes.
- China State Media at Odds Over Myanmar Censorship Move – China Real Time Report – WSJ News on Monday that Myanmar had decided to end press censorship has prompted different takes from Chinese media outlets, as well as doubts from the online community that China will its own tight restrictions anytime soon. Conflicting views of the development were evident even within the same state-run media organization.
- Motorola Adds More to Layoff Compensation Package Following Protests in China-Caijing Motorola said it will do all it can to help these employees survive this hard time and provide them with compensation and re-employment services to help them find new jobs.
- CNOOC Limited Maintains Strong Profitability and Achieves Good Exploration Performance in 1H2012 — HONG KONG, Aug. 21, 2012 /PRNewswire-Asia/ -We will strive to build up a strong foundation for the Company’s “A new leap forward” blueprint
- North-Central China Offers Massive Market Opportunity for Mongolian Coal Miners | China SignPost™ 洞察中国 Mongolia’s massive and low-cost coal reserves are well-positioned to serve seven nearby Chinese provinces with more than one billion tonnes of annual coal demand
- China’s leftists dig in for fight over Bo Xilai | Reuters how many of these leftist “scholars” were on Bo’s payroll?// Leftist supporters of China’s toppled politician Bo Xilai are digging in for an unusually defiant defense of their hero, arguing that he and his wife are victims of a plot that has opened a dangerous schism between them and the Communist Party.
- Remembering a son of Sichuan – Al Jazeera Blogs No doctor ever diagnosed Zhao Xinghua with alcoholism. But day after day, he downs cups of baijiu, that potent Chinese drink distilled from sorghum, while Mrs Zhao purses her lips and stays silent. She disapproves, but has long given up protesting, believing him a lost cause. Zhao Xinghua didn’t always drink. But four years ago he lost his 11-year-old son, Zhao Yi, in the magnitude 7.9 earthquake which hit China’s southwestern province of Sichuan.
- China Trusts Hill & Knowlton for Cnooc Advice: Corporate Canada – Bloomberg The Canadian division of the New York-based public relations company has lobbied on five foreign purchases of Canadian firms valued at $30 billion since it worked with BHP Billiton Ltd. (BHP) on its unsuccessful 2010 bid for Potash Corp. of Saskatchewan Inc., according to data compiled by Bloomberg from company filings and records kept by the country’s lobbying commissioner. That’s almost double the amount of any other firm among transactions of more than $1 billion.
- Australian general to help lead US military push into Pacific | World news | guardian.co.uk An Australian general will become a deputy commander of US Army Pacific, which oversees more than 60,000 American soldiers in the Asia-Pacific region. US army secretary John McHugh said on Monday that Major General Richard (Rick) Burr of the Australian Defence Force would direct training and supervise the Pacific command’s efforts to work with Australia, New Zealand and south Asian countries.
- Up to US$8tn needed to integrate China’s new urban population｜Society｜News｜WantChinaTimes.com Over the next 20 years, up to 500 million people from rural areas in China will need to be integrated into the country’s cities, a demographic shift that will come at a cost of at least 40-50 trillion yuan (US$6.3 trillion-$7.85 trillion), according to a blue paper entitled the China Urban Development Report (2012), published Aug. 14 by the Chinese Academy of Social Sciences.
- Court Victory for Free Speech Will Protect Investors | Leading the Fight Against Chinese Stock Fraud and Corruption Alfred Little wins a US court case
- CME Seeks head of China
- Foreign Correspondents’ Clubs in China Jointly Express Extreme Concern Over Abuse of Journalists | The Foreign Correspondents’ Club, Hong Kong
- CNOOC Pulls Back the Curtain-CSIS [Editor's note: This post is the second in cogitASIA's new blog series, The South China Sea Frame-by-Frame. It incorporates data and imagery from the CSIS Southeast Asia Program's innovative policy tool, The South China Sea in High Resolution.] The state-owned China National Offshore Oil Corporation (CNOOC) June 25 pulled back the curtain on Beijing’s ambitions in the South China Sea, announcing that it would open nine oil and gas blocks in the area to bidding by foreign companies.
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