Thanks for reading. 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 Twitter @niubi or Sina Weibo @billbishop. And if you really like it feel free to donate through the button on the top right.
China is already unhappy with Mitt Romney, as Josh Rogin notes in Foreign Policy. Beijing will not like the 2012 Republican Platform, though as this OpEd in today’s China Daily shows the Chinese do understand that candidates say things they do not actually mean.
China gets 16 mentions in the platform, some of which are highlighted below.
From the “American Exceptionalism” section:
We will welcome the emergence of a peaceful and prosperous China, and we will welcome even more the development of a democratic China. Its rulers have discovered that economic freedom leads to national wealth. The next lesson is that political and religious freedom leads to national greatness. The exposure of the Chinese people to our way of life can be the greatest force for change in their country. We should make it easier for the people of China to experience our vibrant democracy and to see for themselves how freedom works. We welcome the increase in trade and education alliances with the U.S. and the opening of Chinese markets to American companies.
The Chinese government has engaged in a number of activities that we condemn: China’s pursuit of advanced military capabilities without any apparent need; suppression of human rights in Tibet, Xinjiang, and other areas; religious persecution; a barbaric one-child policy involving forced abortion; the erosion of democracy in Hong Kong; and its destabilizing claims in the South China Sea. Our serious trade disputes, especially China’s failure to enforce international standards for the protection of intellectual property and copyrights, as well as its manipulation of its currency, call for a firm response from a new Republican Administration.
From the “Restoring the American Dream: Economy and Jobs” section:
This worldwide explosion of trade has had a downside, however, as some governments have used a variety of unfair means to limit American access to their markets while stealing our designs, patents, brands, know-how, and technology-the “intellectual property” that drives innovation. The chief offender is China, which has built up its economy in part by piggybacking onto Western technological advances, manipulates its currency to the disadvantage of American exporters, excludes American products from government purchases, subsidizes Chinese companies to give them a commercial advantage, and invents regulations and standards designed to keep out foreign competition. The current Administration’s way of dealing with all these violations of world trade standards has been a virtual surrender.
Republicans understand that you can succeed in a negotiation only if you are willing to walk away from it. Thus, a Republican President will insist on full parity in trade with China and stand ready to impose countervailing duties if China fails to amend its currency policies. Commercial discrimination will be met in kind. Counterfeit goods will be aggressively kept out of the country. Victimized private firms will be encouraged to raise claims in both U.S. courts and at the World Trade Organization. Punitive measures will be imposed on foreign firms that misappropriate American technology and intellectual property. Until China abides by the WTO’s Government Procurement Agreement, the United States government will end procurement of Chinese goods and services.
The conventional wisdom has been that China prefers the GOP. Maybe not anymore?
BUSINESS AND ECONOMY
Chinese Banks Strive to Save Declining Profits -Caijing - A source from the China Banking Regulatory Commission (CBRC) told Caijing that the domestic banking industry’s overall nonperforming-loan ratio, which currently stands at 1 percent, will probably jump to 3 percent in the future. CBRC data also show that by the end of the second quarter, the domestic banking industry’s total assets reached 126.78 trillion yuan, up 20 percent from last year. Banking institutions altogether achieved after-tax profit of 1.25 trillion yuan as of the end of 2011. Hence, a 1 percent increase in the nonperforming-loan ratio would generate over 1 trillion yuan of non-performing assets, which could devour the banking industry’s total profits.
滥用金融体系成时尚-中国金融新闻网 Yi Xianrong in chinese financial news on “abusing the financial system”, rise of bad loans, risk in the system
CHINASCOPE – Wen Jiabao: China Must Push Export Growth He had several working meetings in which he suggested that actions must be taken in five areas: (1) the government must continue to implement and improve export policies that stabilize the export business; (2) companies should adjust their export business models to improve their scale and intellectual properties; (3) China must actively increase the importation of advanced machinery, key technical parts, and frequently used consumer products; (4) Export companies must be careful about trade friction and be positive on risk management; (5) China must put a bigger effort into fully utilizing foreign investments.
Central SOEs pay 1.8 trln yuan in taxes, fees in first seven months – Xinhua | English.news.cn - The figure represents a year-on-year growth rate of 13.5 percent, 4.5 percentage points higher than the growth of national tax revenues during the same period, SASAC said in a Tuesday statement.
央行连续十周逆回购 传递货币松动趋缓信号 新华社——经济参考网 - Economic Inforation: PBOC signaling loosening monetary policy ahead?
Shandong Heavy’s Tan Xuguang Plans More Acquisitions in West – WSJ.com - of course this will be mocked by some. but the yacht market in china is basically non-existent and will grow massively in the next decades// Less than a year after his company bought Italian luxury-yacht maker Ferretti, the chairman of a Chinese bulldozer maker with a cumbersome name says he isn’t done shopping. Tan Xuguang, the chairman of Shandong Heavy Industry Group-Weichai Group, said the state-controlled machinery maker is planning more acquisitions and partnerships in Europe and the U.S. in the coming months. He declined to disclose details, saying only that the company has plenty of cash for acquisitions and plans to “diversify” its portfolio.
Slowing Growth, Sliding Yuan Tempt Some to Buy Chinese Stocks – MarketBeat – WSJ - instead of viewing the deterioration as a sign to get out of the battered Chinese market, the now discounted valuations are driving in more foreign investors. This month, foreign investors became net buyers of Chinese equities in consecutive weeks for the first time since February, with Chinese equity funds pulling in $98.22 million in the two weeks up to Aug. 22, according to fund tracker EPFR Global. This buying, partly based on a belief that Chinese leaders will take action to stimulate the economy, could support the yuan from further depreciation.
Coal producers predict price recovery |Industries |chinadaily.com.cn - wishful thinking?// Coal prices in China are likely to rebound later this year as inventories decline and demand recovers along with the economy, leading producers China Shenhua Energy and Yanzhou Coal said on Monday.
Uncertainty Clouds Development of Shale Gas Sector – Caixin Online - China has big plans to develop its shale gas resources, but questions over foreign investment and technology must still be addressed
China Retailers Lose Steam, Deepening Wen’s Challenges – Bloomberg - “The pressure on retail sales is growing bigger and bigger,” said Shen Jianguang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd. “When exports are fragile and investment is weak, if companies started to reduce their production or workforce, how can it be possible for consumer spending to stay strong?” Retail sales missed economists’ forecasts in three of the last four months and Mizuho said they will stay weak. Sales increased 13.1 percent in July from a year earlier, the National Bureau of Statistics said Aug. 9, compared with the median 13.5 percent estimate of 32 analysts surveyed by Bloomberg News.
Ford Steers Lincoln to Affluent Chinese – WSJ.com - The Dearborn, Mich., auto maker plans to begin selling vehicles from its Lincoln brand in China in the second half of 2014, initially importing the cars from the U.S. and offering some modifications, such as roomier back seats, to the versions destined for the world’s largest auto market.
BASF says Chinese customers cutting inventories | Reuters - “If you have a little bit of destocking which is currently the case you can bring demand (to) a zero growth rate,” BASF co-Chief Executive told Reuters Insider TV on Tuesday. ”That is what customers do at the moment. They are more cautious,” he said, adding that long-term investment plans IN China remained unchanged.
Status-conscious investors shell out on great walnuts of China | Reuters - yes there is froth, but there more to this than just speculation. // Once the toys of China’s imperial court, the walnuts — which when rotated in one’s palm are thought to stimulate blood circulation — are making a comeback among the wealthy, some of whom see them as not only a place to put their cash, but as a distinctly Chinese status symbol.
A Bunch Of Chinese Sectors Are Jumping Off The Cliff Together As The Non-Performing Loan Nightmare Turns Ugly – Business Insider - China Banking Regulatory Commission (CBRC) is getting extremely anxious about the NPLs. Since July, it has issued six notices about credit risks associated with underground lending, developers, local-government financing vehicles, etc. And with good reason. The number of companies in default or with severe cash flow problems has surged since the second quarter, according to Societe Generale’s Wei Yao.
Evergrande Profit Falls as Property Curbs Are Maintained – Bloomberg - Evergrande Real Estate Group Ltd. (3333), China’s biggest developer by sales volume, said first-half profit fell after the company sold fewer apartments in less affluent cities as the government maintained property curbs.
China’s Margin Trade Trial on Hold: Media-Caijing - China has put on hold a plan to allow short selling -bets that stocks will fall in value-via the intermediary at a time when markets have been under selling pressure
Company Admits Using Ethanol to Make Liquor – Caixin Online - adds to the buzz…//State-owned Gujing says blending grain alcohol into low-end baijiu is in line with national standards
铁道部部长称今年经营形势严峻_公司频道_财新网 - Minister of Railways says this year’s operating environment is grim// 盛光祖提出，将对各路局进行盈亏总额考核；货运改革的关键是要像客运“实名制”购票一样，推行“实货制”，只要有实际货源，就能够安排承运
HK’s SFC sues E&Y for workpapers | China Accounting Blog | Paul Gillis - This case opens a new front in the regulatory wars and creates uncertainty in the H-share and Red Chip markets. The case appears to be virtually identical to the SEC case against Deloitte. Mainland regulators probably decided they needed to be consistent in their treatment of the Deloitte case with the SEC and the E&Y case with SFC. The SEC sought a six-month stay in its case against Deloitte citing efforts to reach a compromise; apparently SFC was not prepared to delay its case any longer. Or perhaps Chinese officials wanted another precedent to illustrate that they were not applying the rules only with respect to the United States….This also illustrates another problem first seen in KPMG’s renewal of its PCAOB registration. The Hong Kong and Mainland Big Four firms are playing fast and loose with their names.
Militarization of China’s Civilian Leaders? | China Power - Whether the influence of the PLA on the Chinese civilian leadership is growing remains to be seen and must be monitored closely. Just as importantly, albeit often ignored, is whether the civilians in the Politburo themselves are becoming more inclined to use the increasingly powerful arsenal at their disposal to conduct foreign policy. Instead of looking at the Politburo in terms of the balance of power between brass and civilians, we should perhaps try to determine whether the civilians are not themselves calling on the military to do more.
Top city official fled overseas in April |Society |chinadaily.com.cn - publicity official in Dandong, the city that administrates Fengcheng, confirmed to China Daily on Tuesday that Wang Guoqiang, the Party chief of Fengcheng, fled the country in April.Song Ximei, the publicity official in Dandong, said she could not verify that Wang ran off with 200 million yuan ($31.5 million), as anonymous sources posted on the Internet, leading to the exposure of the incident
Public needs to see where tax money goes – Globaltimes.cn - people want more and more accountability. can Beijing deliver accountable authoritarianism?
温家宝再下广东挺汪洋入常_多维新闻网 - was Wen Jiabao’s visit to Guangdong last week also about helping Wang Yang?//
Government micro blogs accounts up to 50,000 – Xinhua The first report on the operation of micro blogs run by ministry-level departments was released by Sina.com, a leading Chinese website.The government now has 50,000 micro blog accounts, according to the report released on Aug 23
Egypt’s Morsi Firms China Ties – WSJ.com - Mr. Morsi secured new Chinese credit for economic development in Egypt, and met Chinese President Hu Jintao at Beijing’s Great Hall of the People on Tuesday, the first day of his state visit. His trip will also include a closely watched stopover in Iran
Strong China policy for votes |Op-Ed Contributors |chinadaily.com.cn - No matter who is elected, he will find himself responsible for properly handling the US’ relations with China. To accommodate specific groups and win more votes, a candidate may need to pretend to be tough in moments that can determine the fate of his campaign. But if he continues to ignore the common interests of China and the US after being elected, he will only succeed in shooting himself in the foot.
Policy will poison relations|Comment|chinadaily.com.cn - As to Romney’s suggestion that the US step up arms sales to Taiwan, it lays bare his ignorance of the fundamentals of Sino-US ties, as this is the most sensitive issue between the two countries. US arms sales to Taiwan have thrown bilateral ties off balance several times in the past. It requires political vision as well as profound knowledge of Sino-US relations as a whole, to make sensible policy recommendations about what are widely recognized as the most important bilateral ties in the world. Romney apparently lacks both.
Analysis: China’s aircraft carrier: in name only | Reuters - Despite public anticipation in China that the carrier — a refitted, Soviet-era vessel bought from Ukraine — will soon become the flagship of a powerful navy, defense experts say it lacks the strike aircraft, weapons, electronics, training and logistical support it needs to become a fighting warship.”There is considerable uncertainty involved, but it could take anything from three to five years,” said Carlo Kopp, the Melbourne, Australia based co-founder of Air Power Australia, an independent military think tank.
TECH AND MEDIA
Baidu Strikes Back at Qihoo 360 Search; Qihoo Redirects to Baidu Results to Cached Pages - users be damned, and qihoo ceo will argue baidu is abusing its monopoly position.// Baidu and Qihoo 360 have been at each other’s throats since Qihoo launched a competing search engine a few weeks ago. Now, in the middle of the night, it seems Baidu has struck a blow in its defense: clicking on any Baidu products in 360 search results (for example, its “Baidu Knows” answer service, its “talk bar” BBS forums, its Baike encyclopedia, etc.) results in the user being taken directly to the Baidu homepage.
Looper bridges the cinematic gap between China and the US | Film | guardian.co.uk - Dan Mintz’s DMG agency offers guidance to Hollywood studios trying to crack the Chinese market as its co-production hopes to navigate the cultural divide
Movie makers seek to please Chinese|Americas|chinadaily.com.cn - Most recently, the American action film Red Dawn, directed by Dan Bradley and scheduled for a November release, changed its villains in post-production from an invading Chinese army to one from the Democratic People’s Republic of Korea. The Western film industry is now aggressively pushing beyond the negative portrayals of Chinese people — and even the iconic kung fu roles of Bruce Lee, Jackie Chan and Jet Li — to tap what promises to be one of the world’s most lucrative movie markets
Price War Reshapes Landscape of Online Shopping -Caijing - and Alibaba// As China’s business-to-customer (B2C) market prospers, price wars in the e-commerce sector could last through the next three to five years. In the end, the winner will be the company with adequate funding.
Official caught smiling at deadly bus crash scene enrages internet vigilantes | Ministry of Tofu 豆腐部 - Photos of a government official beaming at his colleagues at the scene of a road accident, in which 36 people were burned to death, have been circulating on the Chinese social media sites. Netizens set human flesh search engine in motion and soon found that the official has expensive taste for luxury watches.
Chinese parents defrauded by ‘perfect’ education | World news | The Guardian - Parents in China ‘cheated’ by summer course claiming to allow children to read books in 20 seconds
The Most Famous Chinese Blogger and Racecar Driver You’ve Never Heard Of – Atlantic Mobile - In any case, we’ll soon get a chance to figure out how the various factors that have limited Han Han’s global fame fit together. In October, Simon and Schuster is publishing a collection of his blog posts, fittingly titled This Generation.
Re-education Through Labor Reform Hits Critical Point-Caijing - The re-education through labor system, which has long been criticized for depriving citizens of their individual liberties and being able to detain suspects without trial, has reached a critical point for reform.
Businessman wants entire Peking Uni leadership fired if he can prove academics slept with students: Shanghaiist - In a post on his Tencent Weibo account that has since been deleted by site administrators, Han charged: I don’t talk about PKU deans sleeping with waitresses because I don’t have evidence, but I have evidence to prover that some PKU deans and professors sleep with female students. If PKU president dares to bet, I want the president, other PKU leaders and principle inspection committee to resign and never go back to work as long as I can prove more than five officials more senior than deans have slept with students. (If I win,) all leaders in PKU should go. If I do not have the evidence, I cannot escape the punishment of law.
Nanjing paper punished for exposing Liu Xiang injury scandal｜WantChinaTimes.com - The Oriental Guardian’s editor-in-chief Chen Zhaohui has been suspended and deputy editor Yu Jiechen was given an official warning, while news directors Guo Xiaosong and Zhao Zaiqiang and editorial assistant Zhang Yuhai were sacked, Ming Pao said. The reporter who wrote the article was reassigned to another position because he was not responsible for the offending headline, Ming Pao added.
Gao Xiaosong | Danwei - Gao, who has lived and traveled in the US, later published another episode on America, this time focused on racial dynamics and, perhaps surprisingly, geography. In the episode, he describes the US as a melting pot for immigrants the world over. According to Gao, the largest ethnic group in the US are WASPs, or White Anglo-Saxon Protestants. Other racial and ethnic stereotypes are played equally fast and loose: Jews are good at art and doing business; ethnic Germans are innately warlike; Italians are mobsters.
Proposal on Publicity Rules in Courts Causes Uproar – Caixin Online - Lawyers say a draft law to clamp down on publicity in court cases goes too far in attempting to restrict information from the public. A recent judicial proposal submitted July 31 as a draft for comment to the Supreme People’s Court seeks to prevent lawyers from reporting information about pending cases by audio, video, photo or email. The proposal states that the penalty for violating this rule should be a suspension of the lawyer’s license for legal practice of six to 12 months.
In China, Bullfighting Has Found Its Mike Tyson – WSJ.com - funny piece on bull fighting Chinese-style, no word on whether he becomes Optimus Prime Rib in retirement// Optimus Prime Is a Transforming Figure Who Humbles Rivals, When He Feels Like It
A model for conservation in China? The Tibetan antelope – CSMonitor.com Since the antelope’s population plunged to around 70,000 in the early 1900s, its numbers have stabilized at more than 100,000, according to 2009 field estimates by the Wildlife Conservation Society.
China invests £235 billion to tackle pollution - China invests £235 billion to tackle pollution China will pump nearly £235 billion into pollution reduction and energy saving schemes before 2015 in a bid to clean up its notoriously toxic environment.
Subscribe to the Sinocism China Newsletter email. Free