The Sinocism China Newsletter For 09.20.12

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The New York Times has disturbing video of protesters surrounding the U.S. Ambassador’s car in Beijing. The security forces look surprised but react quite quickly to protect the vehicle. But they did not arrest anyone on the spot, not even the most aggressive protester who clearly throws something at the windshield.

The Chinese government, which has expressed “regret” for the incident, should strictly punish these hooligans according to the law. After all, a certain blind activist who is familiar with the US embassy in Beijing was sentenced to several years in jail for “damaging property and organising a mob to disturb traffic”.

In former Peace Corps colleague remembers Ambassador Stevens, PRI’s The World interviews my sister about the US Ambassador who was recently murdered in Libya. This item may not be China-related but is a reminder of why any mob action against a US Ambassador is so disturbing.

Xinhua has released details of the Wang Lijun case (original Chinese 在法律的天平上–王立军案件庭审及案情始末- 新华网). Bo Xilai is mentioned not by name but by position, a reference that has some speculating that Bo could face criminal charges. We should hear more about Bo Xilai’s case at the conclusion of the imminent final Plenum of the 17th Party Congress.

Reuters has two good articles that examine the triggers for the latest China-Japan spat and the Japanese domestic political forces that may make future disputes more likely. In mistrust, rivalry and bad timing fan Japan-China row we learn of shockingly bad timing from Tokyo:

When Japan’s central government confirmed a media leak on July 7 that it was considering buying islands at the core of a feud with Beijing, the timing could hardly have been worse given the symbolism in China, where a 1937 incident on that date is seen as the start of Tokyo’s full-fledged invasion of the country.

Japan’s Osaka mayor is seeking national power with a new party and calls to “revive a glorious Japan”:

The beginning of Hashimoto’s de facto campaign for a national election coincides with deepening disputes between Tokyo and Beijing and Seoul over islands in the region, feuds rooted in a legacy of resentment over Japan’s wartime rule. ”He’s definitely pushing Japanese political discourse further to the right,” Koichi Nakano, a professor at Sophia University in Tokyo, said earlier. “A lot of Japanese are looking for a messiah who will turn things around and make everything wonderful.”

Reuters reports that a Chinese official has confirmed Xi’s absence was due to a sport injury:

In rare on-the-record comments on Vice President Xi’s health, former Hong Kong leader Tung Chee-hwa, now a vice-chairman of a largely ceremonial advisory body for China’s parliament, said that Xi had injured his back “I believe from swimming”… Sources told Reuters that Xi hurt his back while swimming earlier this month and that he had been obeying doctors’ orders to get bed rest and undergo physiotherapy.

Reuters looks very good as Tung’s comments appear to validate their earlier reporting about Xi Jinping’s absence while contradicting the work of rival journalists.

On to today’s readings:

BUSINESS AND ECONOMY

BHP Says Pace of China Iron Ore Demand Has Slowed by Half – Bloomberg - “We’re already seeing the beginning of the end of the first phase of economic development in China,” Alberto Calderon, the Melbourne-based company’s chief commercial officer and manager of its aluminum and nickel business, said today at a conference in Canberra. “The pace of demand of iron ore from China has slowed down by more than half.”

China Resumed Treasury Buys in July as Trade Surplus Widened – Bloomberg - “The biggest misconception in the marketplace is that Chinese buying of Treasuries has something to do with Treasuries,” said Krishna Memani, director of fixed income at OppenheimerFunds Inc. in New York, who manages $70 billion. “China buying Treasuries has everything to do with China’s trade position relative to the U.S. It’s entirely trade driven.”

Scholar defends China’s reform of monopoly industries – Xinhua | English.news.cn - BEIJING, Sept. 19 (Xinhua) — A scholar with an influential Communist Party magazine has ruled out the possibility of quick privatization of China’s monopoly industries, and warned against mimicking Western models.In a signed article published recently on Qiushi, or “Seeking Truth,” Wu Qiang, assistant to the editor-in-chief of Red Flag Manuscript, said that privatization does not provide an answer to all questions brought about by monopoly.

Overloaded trucks at fault for bridge collapse |Society |chinadaily.com.cn - Four overloaded trucks, weighing more than 480 metric tons altogether, were on the right side of a 122-meter ramp of the Qunli viaduct project, said Liu Xingming, deputy head of a team investigating the accident.

Solar firms cut employees |Economy |chinadaily.com.cn - Chinese solar companies are reducing production and laying off workers to cut costs, in a bid to cope with the crisis triggered by the European Union anti-dumping investigation and anti-dumping duties imposed by the United States.

Analysis: Rare earth prices to erode on fresh supply, China | Reuters- The market has steadied in recent months, but new output from U.S. Molycorp (MCP.N) and Australia’s Lynas Corp (LYC.AX) is likely to pressure prices, especially those of “light” rare earths which are not as scarce as their “heavy” cousins. Weaker economic growth in China is also weighing on the market since the world’s second largest economy not only produces over 90 percent of global rare earths, but is the biggest consumer of the materials.

Some Japanese Companies Resume Operation in China -Caijing - Sony said its factories were not hit during the protests because Chinese government has effectively put the demonstrations under control.

Most Chinese Stocks Gain, Led by Brokerages, on Reform Optimism – Bloomberg  China will push for 15 major capital market reforms during the current five-year plan, Shanghai Securities News reported. The reforms include increasing the development of debt markets and stable development of a futures market, Shanghai Securities News said, citing an unidentified China Securities Regulatory Commission official.

Sugar Harvest in China to Jump on Weather, Paring Imports – Bloomberg Production may climb 19 percent to 13.7 million metric tons in the season starting October, according to the median estimate in a Bloomberg survey of nine analysts and traders. Output totaled 11.5 million tons this season, according to the China Sugar Association. The crop reached a record of 14.8 million tons in 2007-2008, data from the association show.

楼市“库存危机”真相:存量房亟待入市|库存|楼市|存量房_21世纪网 - so real estate developers have a lot more unsold inventory than they say? shocked…//

地方城投借道债券信托加速融资 新华社——经济参考网 - local governments raising more and more money through bonds isuance. who are the buyers? // 在经济增速放缓背景下,地方政府投资力度不断加大,各类城投公司融资需求旺盛。记者19日获得的中债资信数据显示,2012年1至8月份,城投公司企业债券发行额达到2278亿元,远超过2011年的1587亿元规模,发债规模大幅增长。若再加上9月以来新发行超200亿元规模,截至9月19日,城投公司企业债发债规模近2500亿元。与此同时,用益信托数据显示,今年前8月,在各类信托产品中投向基础设施类的信托产品共成立551款,规模达1257.94亿元,占比为26%,相对于前7月23%占比,呈上升趋势,而此类产品融资主体也以城投公司为主。

 

POLITICS AND LAW

China implicates Bo Xilai in criminal case for first time – Yahoo! News - The only corruption cases mentioned in the Xinhua account involved close business cronies of the former politician – potentially opening a corruption angle against Bo himself. Xu Ming, a plastics-to-property entrepreneur whose long association with Bo extended for over two decades, offered two homes in Beijing worth over 2.85 million yuan to a relative of Wang’s, Xinhua said. In return, Wang helped free three of Xu’s associates that had been taken into custody in Chongqing. Xu was detained in March, the day before Bo’s ouster was announced.

Trial Implicates Bo Xilai in Heywood Cover-up – NYTimes.com - The account also laid out bribes that Mr. Wang had taken. It said Xu Ming, a tycoon close to the Bo family, gave Mr. Wang two properties in Beijing in 2009 that Mr. Xu had bought for more than $450,000. In July of that year, Mr. Wang released three people from custody at Mr. Xu’s request, the account said. Mr. Wang also took nearly $32,000 from Yu Junshi, a businessman, for the rental of Mr. Wang’s villa in Chongqing, the report said. In return, Mr. Wang released a detainee. Mr. Yu is a former military intelligence officer who worked as a fixer for the Bo family.

Wang Lijun case proves justice reigns – Globaltimes.cn - Confusion still exists over the case, but people are gradually believing more that justice will eventually trump over any privilege. Confidence is built on more criminal officials being firmly punished, on the influential emergence of online supervision and the rising voice of individuals via Weibo.

Analysis: Chinese leaders may come to regret anti-Japan protests | Reuters - “We have entered a new stage. In the past, the Chinese government advocated setting aside the (island) dispute and developing bilateral relations,” said Liu Jiangyong, a professor of international relations at Tsinghua University in Beijing. ”That period of history is over. We’re in a new phase of history, and that was a totally inevitable outcome of Japan purchasing the islands,” said Liu, who has advised Beijing.

Total Denial and the Will to Forget – China Media Project - It was against this backdrop that Wen Jiabao’s remarks about political reform and the Cultural Revolution created such a stir in China in 2012. In a sense, Wen was breaking through a taboo about discussion of this historical tragedy that has prevailed in recent years. He was using the opportunity presented by dramatic events in Chongqing to raise again the point Zhao Ziyang made in his political report to the 13th National Congress in 1987, that political reform was necessary to prevent a replay of the Cultural Revolution.

 

FOREIGN AND DEFENSE AFFAIRS

Panetta Meets With Xi, Easing Doubts on Chinese Leader – NYTimes.com - The meeting with Mr. Xi in the Great Hall of the People was viewed as additional proof that the vice president was clear of whatever physical or political ills had pushed him from public view for two weeks, prompting speculation about whether he would ascend to China’s top post. Mr. Xi greeted Mr. Panetta with a vigorous handshake and a broad smile, and he said the meeting “would be very helpful in further advancing” ties between the United States and China.

China’s Xi meets Panetta, wants better military ties with U.S | Reuters- good luck with this argument here// Critics in China believe that a U.S. move to shift its strategic focus to the region has encouraged countries like Japan to be more bold when dealing with Beijing. But Panetta, in remarks later to cadets at a Chinese military academy, sought to convince Beijing that the shift in focus was not an attempt to hem in China, whose neighbors have expressed concern about its expanding military reach. Panetta told students at the Armored Forces Engineering Academy that expanding U.S. missile defenses in Asia were aimed at North Korea, not China, and that deepening U.S. defense ties with allies in the region were to reinforce a security system that had helped China flourish

China Must Move Past Japan’s War-Inflicted Wounds, Panetta Says – Bloomberg - Panetta said the Japan-U.S. alliance shouldn’t be viewed by China as American support for the Japanese point of view on the island dispute, likening the U.S. stance to its alliance with Israel.“We’ve made clear to Israel that it’s not the right time to strike Iran,” he said. “We have made it clear to Japan’s leaders that they’ve a responsibility to resolve this dispute peacefully.”

China’s Xi calls Japan’s “purchase” of Diaoyu Islands “a farce” – Xinhua | English.news.cn - He said Japan’s “purchase” openly questioned the legal effects of the Cairo Declaration and the Potsdam Proclamation and intensified the neighbors’ territorial disputes.

No need for more China respect, says Defence head – ABC News (Australian Broadcasting Corporation) - The Secretary of the Foreign Affairs Department and incoming Defence Department head Dennis Richardson has dismissed suggestions Australia should show more respect to China…”What – should I walk differently, conduct myself differently, bow three times? What should I do?,” he said.

日本媒体眼中的钓鱼岛危机 – 头版 – FT中文网 - FT Chinese interviews a Japanese Nikkei reporter based in Baijing who says that a lot of Japanese hope China gets more violent and irrational because that will make the world see what kind of country CHina is becoming. This interview is getting a lot of play on Sina Weibo//很多日本人其实希望中国变得更暴力、更丧失理性,因为这样全世界就能看到中国是个怎样的国家。抗议者砸碎越多的玻璃、放越多的火、从日本人开的超市里偷越多的东西,只会在世界面前越多地伤害中国的形象。这是日本人的想法,与中国的抗议人群的想法非常不同。

18 detained in Guangzhou for violence in anti-Japan protests – Xinhua | English.news.cn - Police in south China’s metropolis of Guangzhou, capital of Guangdong Province, have detained 18 people who allegedly committed violent acts while staging anti-Japan protests on Sunday, local police said Wednesday.

Insight: In Africa’s warm heart, a cold welcome for Chinese | Reuters - Malawians bill their country as the “Warm Heart of Africa” and pride themselves on a reputation for friendliness. But Jaffa Shaibu, a burly 32-year-old merchant in a clothes market in Salima, a dusty town near the shores of Lake Malawi, feels less than welcoming to the Chinese traders who have moved in over the past four years. ”The way it looks, one day there will be a big fight with them,” Shaibu said. “One day there will be blood.”

Ex-CME Software Engineer Admits to Trade-Secrets Theft – Bloomberg - Prosecutors said Yang intended to use the stolen information to improve an electronic-trading exchange in Zhangjiagang, China, and that he was plotting with two other, unnamed business partners. The U.S claims the potential loss was at least $50 million.

“Ni hao. You hear me?”: Snoop Dogg finally joins Weibo: Shanghaiist - he does know weed pics will likely be censored?// In his inaugural post, Snoop writes to his Chinese fans: ”Ni Hao to all my fans in China! Big Snoop Dogg here, so blessed to be on Sina Weibo, and to see my Chinese fans – follow me @Snoop_DoggCN for much more coming up.“你好”,Snoop Dogg在这儿和大家打招呼,很高兴来到这儿与你们互动。赶快关注我吧! Accompanying the post is a short video of Snoop donning a Rastafarian hat and sitting in front of a Chinese flag (totally not green-screened).

 

TECH AND MEDIA

China pushes for Internet co-op among emerging countries |Sci-Tech |chinadaily.com.cn - Wang Chen, head of the State Internet Information Office, made the remarks while delivering a keynote speech at the 2012 Internet Roundtable for Emerging Countries. Enhanced international cooperation is urgently needed to cope with increasingly severe challenges regarding Internet security, according to Wang.

CIC, CITIC Capital, CDB Capital Lead in $2Bln Investment to Alibaba in Buy-Back Deal-Caijing - Alibaba raised the funds through an issue of ordinary shares, convertible preferred shares and corporate bonds. CIC acquired half of the common shares, or 2 billion U.S. dollars while the rest were bought by CDB Capital, CITIC Capital and Boyu Capital. Existing shareholders including Singapore state investor Temasek Holdings Pvt Ltd and DST Global acquired a stake in Alibaba and preferred stocks were sold to global institution investors from Asia, Europe and the United States, the company said.

“国家队”入围 阿里回购资本盛宴背后_财经频道_一财网 - First Financial looks at the background to state funds buying into Alibaba through the Yahoo sale

Qihoo’s search share increased 1pp in September: Deutsche Bank – Morning Whistle - We estimate Baidu and Qihoo’s market share to be 75-80% and 5-10% respectively vs. 80-85% and 0% prior to Qihoo’s search engine launch. Although Qihoo gained search traffic share across a broad range of websites, its traffic share remained slightly below the first peak on 21 Aug among 40% of our surveyed websites. We attribute the rebound in Qihoo’s search share to the conversion of more Qihoo browser users to Qihoo’s search engine.”

ZTE, Mozilla Plan Mobile System to Compete With Android – Bloomberg - ZTE Corp. (000063), China’s second-biggest maker of phone equipment, will release a new mobile operating system with the developer of the Firefox web browser to compete with Google Inc. (GOOG)’s Android software. The software will be available in the December quarter, ZTE Executive Vice President He Shiyou told a briefing in Beijing today.

 

SOCIETY AND CULTURE

Prominent Chinese Writer’s Viral “Confession”: I Am a Traitor | Tea Leaf Nation - Li Chengpeng, an influential writer and social commentator, has published an article on his blog denouncing the boycott of Japanese goods and the violent anti-Japan sentiment currently sweeping China

北航教授游行时掌掴老人 称其“侮辱毛主席”_新闻_腾讯网 - Beihang University (formerly Beijing Institute of Aeronautics) Professor Han Deqiang caught on film smacking an old man criticizing Chairman Mao during one of the recent anti-Japan protests. not very Confucian//

 

ENERGY AND ENVIRONMENT

China: running short of water | beyondbrics - According to a new report from HSBC and consultancy China Water Risk, water shortages are set to play a bigger role in shaping China’s energy choices.

Analysis: Inventory mountain adds to pain for Chinese solar firms | Reuters - Trina and other Chinese solar companies, including Suntech Power Holdings Co Ltd (STP.N) and Yingli Green Energy Holding Co Ltd (YGE.N), hold inventory of about 5 gigawatts (GW), analysts say, nearly one-sixth of annual global demand.

Hajime Kitano On The China-Japan Dispute – Business Insider - It is thus common sense to expect Japan’s dependence on China to rise in terms of energy security, if Japan aims for ‘zero nuclear.’ This makes strengthening of relations with China a necessary precondition for targeting ‘zero nuclear.’ In other words, ‘zero nuclear’ is impractical as long as relations with China remain poor. The Japanese government thus looks likely to forego a Cabinet decision on ‘zero nuclear’ amid deterioration in Japan-China relations.

 

FOOD AND TRAVEL

Jing Daily:China’s Thirst For Cognac & Whisky Boosts Pernod Ricard - Beijing wine-dealer friend now setting up a fund to buy up casks of whisky to store/hoard to sell to his compatriots in the coming years. too bad no way to buy whisky or cuban cigar futures. the chinese demand for both will swallow up much of the world’s supply//

 

BOOKS

In the Garden of Beasts: Love,Terror,and an American Family in Hitler’s Berlin: Erik Larson: 9780307408846: Amazon.com: Books - read this when it came out in 2010, primarily to see if I could recognize parallels to today’s China. Felt a little better, but perhaps should read it again in the wake of the last few days// A mild-mannered professor from Chicago, Dodd brings along his wife, son, and flamboyant daughter, Martha…As that first year unfolds and the shadows deepen, the Dodds experience days full of excitement, intrigue, romance–and ultimately, horror, when a climactic spasm of violence and murder reveals Hitler’s true character and ruthless ambition.

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 blocked by the GFW. You can also follow me on Twitter @niubi or Sina Weibo @billbishop.

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