Sinocism China Newsletter For 02.17.13–North Korea and Dirty Water

Welcome to the first Sinocism of the Year of the Snake. It is a long one in an attempt to capture some of the more interesting events over the last eight days. Normal, shorter, publication will resume Monday.

The big news over the last week was North Korea’s nuclear bomb test. In China and North Korea: uneasy allies John Garnaut explains why the “Western world should not expect China to lean on its bellicose ally, North Korea, and prevent it from developing a credible nuclear weapon.”

Jane Perlez of the New York Times writes that Some Chinese Are Souring on Being North Korea’s Best Friend, Shen Dingli writes in Foreign Policy that “China has reached a point where it needs to cut its losses and cut North Korea loose” while Xinhua is out defending China’s DPRK policy as not a failure in 新华社驳“中国对朝政策失败论” 称美国应反思.

Sino-North Korean trade is at a record high despite Beijing criticism (NK News), so those cynics who believe in following the money will probably not expect much change from China.

Reuters has blasted out another “Exclusive”, this one claiming, based on a single source, that North Korea has told China of preparations for fresh nuclear test. This Reuters story has seemingly been picked up everywhere, including in Chinese media, even though, as NK News detailed last September, Reuters has an impressive record of getting it wrong on North Korea.

While Reuters could be right this time, I think the odds are decent this is a disinformation campaign designed to benefit those who will look good if North Korea “shows restraint” and does not quickly test another device. We should find out soon enough if this source is correct.

To be fair to Reuters, the US and Chinese governments also have a hard time figuring out what is going on inside North Korea, as the Asahi Shimbun’s Even U.S. did not suspect secret moves before December missile launch reminds us:

The United States used spy satellites and very high-altitude surveillance aircraft in an effort to pinpoint the date of the launch beforehand, which it had planned to share with Japan and South Korea.

But an analysis of events leading up to the launch shows that North Korea kept the United States and its allies in the dark with a simple ruse: parking trailers near the launch pad and pretending to reconsider the launch window.

On Dec. 8, trailers that are used to transport missile parts were lined up around the launch pad. Spy satellite photos of one trailer led analysts to conclude the 22-meter-long vehicle had been used to transport the first stage of a rocket.

Intelligence officers began speculating that North Korea might be removing missile parts from the launch pad…

On Dec. 10, North Korea announced it was extending the possible launch window to Dec. 29 from the earlier period up to Dec. 22.

Other trailers were also brought to the area between the launch pad and the building where the missile was assembled.

Around this time, officials at the North Korean Embassy in Beijing began providing information to Chinese military and government officials that indicated the launch date was being pushed back.

South Korea intercepted the misinformation that North Korea was providing China, and also picked up communications at Tongchang-ri that seemed to indicate missile parts were being removed from the launch pad.

If January should be known as “air pollution month”, February may eventually be known as “water pollution month”. Over the holiday activist journalist Deng Fei launched a Weibo campaign to share images of water pollution (TechInAsia):

Web journalist/activist Deng Fei is already a pretty famous guy in China’s cyberspace. In part through social media, he’s orchestrated a number of online campaigns, most of them targeted at helping children (like his famous “Free Lunch” program). But while everyone is home for the holidays, Deng has sparked another social media movement by asking a very simple question: How is the river in your hometown? While you’re home for the holidays, take a photo of the river or stream in your hometown and upload it to weibo for us to see. It took off thanks in part to retweets from other influential weibo users like tech angel investor Xue Manzi (you may remember him and Deng Fei from their panel at GMIC 2012), and on Friday became one of Sina’s trending topics, with thousands of net users responding to the call.

This campaign could damage many interests and at least in the case of Weifang, Shandong, censors and local officials are striking back (Tea Leaf Nation):

In a post deleted by censors on Sina Weibo, a lawyer named Gan Yuanchun described how officials from Weifang, Shandong sent some of their subordinates to Beijing to prevent media from breaking the news. China Central Television (CCTV)’s coverage of the story was shelved. and the journalist who traveled to Weifang is still being held there involuntarily. Gan Yuanchun wrote in a follow-up post, “Weifang: You think that by harmonizing [censoring] CCTV, you can cover up the truth about #UndergroundWaterPollution? And you’re still trying to help this kind of soulless company complete its IPO? You must be dreaming!!”

This Weibo detailing how people are organizing around water pollution is remarkable on many levels. Environmental degradation and the resulting organized activism has to be a top five challenge for the CCP in 2013, no?

I have redesigned the Sinocism.com site. Comments and suggestions are welcome.

Today’s Links:

THE ESSENTIAL EIGHT

A Chinese Hacker’s Identity Unmasked – BusinessweekCheck out the cover of the magazine–Yes, The Chinese Army Is spying On You// Up to now, private-sector researchers such as Stewart have had scant success putting faces to the hacks. There have been faint clues left behind—aliases used in domain registrations, old online profiles, or posts on discussion boards that give the odd glimpse of hackers at work—but rarely an identity. Occasionally, though, hackers mess up. Recently, one hacker’s mistakes led a reporter right to his door. Stewart works in a dingy gray building surrounded by a barbed-wire fence. A small sign on a keycode-locked door identifies it as Dell SecureWorks. With one other researcher, Stewart runs a patchwork of more than 30 computers that fill his small office. As he examines malware samples, he shifts between data-filled screens and white boards scribbled with technical terms and notes on Chinese intelligence agencies.

Interview: ICANN willing to get China more involved in Internet management – Xinhua | English.news.cn- “China has a huge role to play in the global Internet. Without China and without complete Chinese participation in ICANN, ICANN frankly does not have a global legitimacy,” Fadi Chehade, the newly appointed ICANN president, told Xinhua in an exclusive interview. Chehade is travelling to Asia on Friday for the first time as the CEO of the Internet Corporation for Assigned Names and Numbers (ICANN), a nonprofit private organization in charge of contentious policies surrounding Internet addresses.

Claims China is world’s No 1 trading economy are nonsense | South China Morning Post – The high import and export numbers are distorted by domestic firms fiddling taxes and the country’s heavy involvement in processing trade

Fuling, China: Return to River Town – Pictures, More From National Geographic Magazine – In 1996 a Peace Corps volunteer arrived in Fuling, a sleepy town on the Yangtze, to teach English. He went back recently to find the landscape—and his former students—transformed. By Peter Hessler

In China, Families Bet It All on a Child in College – NYTimes.com – The experiences of Wu Caoying, whose family The New York Times has tracked for seven years, are a window into the expanding educational opportunities and the financial obstacles faced by families all over China. Her parents’ sacrifices to educate their daughter explain how the country has managed to leap far ahead of the United States in producing college graduates over the last decade, with eight million Chinese now getting degrees annually from universities and community colleges.

U.S. Commander Expresses Concern Over Japan, China Dispute – WSJ.com- YOKOTA AIR BASE, Japan—The highest-ranking U.S. military commander in Japan expressed concern about Tokyo’s intensifying territorial dispute with China, calling it “a very bad situation,” and blamed the Chinese navy for what he termed “a provocative act that can become dangerous.” Lt. Gen. Sam Angelella, commander of U.S. Forces Japan, also made a point of praising the Japanese military’s handling of a string of recent incidents with the Chinese military, going further than previous top American officials, who had issued more even-handed statements urging restraint from both sides.

Day will come when we must choose US or China–The Age BEIJING: Within two decades the US will be forced out of the western Pacific, says a high-ranking Chinese military officer, amid concerns that increasingly militarised great power rivalry could lead to war. Senior Colonel Liu Mingfu, at the People’s Liberation Army’s National Defence University, told Fairfax Media this week that American strategic influence would be confined ”east of the Pacific midline” as it is displaced by Chinese power throughout East Asia, including Australia.

Inside China’s Genome Factory | MIT Technology Review- When he was 17 years old, Zhao Bowen dropped out of Beijing’s most prestigious high school. Like many restless young people in China, he headed south to Shenzhen, the country’s factory capital, for a job. As a teenage science prodigy, however, he wasn’t bound for an assembly-line floor; instead, he was on his way to the world’s largest production center for DNA data. Now, a few years later, in a retrofitted shoe factory that is the headquarters of BGI-Shenzhen, the 21-year-old is orchestrating an effort to decipher the genetic makeup of some 2,000 people—more than 12 trillion DNA bases in all. BGI-Shenzhen, once known as the Beijing Genomics Institute, has burst from relative obscurity to become the world’s most prolific sequencer of human, plant, and animal DNA. In 2010, with the aid of a $1.58 billion line of credit from China Development Bank, BGI purchased 128 state-of-the-art DNA sequencing machines for about $500,000 apiece. It now owns 156 sequencers from several manufacturers and accounts for some 10 to 20 percent of all DNA data produced globally. So far, it claims to have completely sequenced some 50,000 human genomes—far more than any other group.

 

BUSINESS AND ECONOMY

‘Year of the Snake’ Ain’t Good for Stocks – MarketBeat – WSJ- Sam Stovall, chief equity strategist at S&P Capital IQ, quantified just how poorly the market has performed during previous snake years: Since 1900, the S&P 500 posted its only average calendar-year decline during the Year of the Snake, falling 3.8%, and rising in price just 33% of the time, which was the worst price performance and frequency of advance of all 12 years.

China Misses ‘Hard Landing’ as Government Spends, Li Daokui Says – Bloomberg – Li Daokui, an economist at Tsinghua University who was an adviser to the People’s Bank of China from 2010 to 2012, said in an interview with CNN that China’s decision to speed up construction projects kept its rate of growth from slowing more than it did. “A soft landing is there,” Li said in an interview with CNN’s “Fareed Zakaria GPS” to be aired tomorrow, according to a transcript. “A hard landing has been already avoided. I’ve been talking about this for the past two years — maybe two and a half years — that is the growth rate will slow down a little bit and then pick up.”

China Voice: Keep China’s big spenders at home – Xinhua | English.news.cn- During China’s Lunar New Year holiday, high-end stores in Europe were jammed with Chinese shoppers snapping up items at lower prices than back home. Policy makers in China have reacted slowly to the growing spending power of Chinese consumers. Media reports estimate that Chinese spent 85 billion U.S. dollars overseas in 2012, with a notable portion going toward top-notch goods such as watches, handbags, jewelry and clothing.

China’s gold consumption up 9.35 pct in 2012 |Economy |chinadaily.com.cn – China’s gold consumption amounted to 832.18 tonnes in 2012, an increase of 9.35 percent from a year earlier, data from China Gold Association showed Saturday.

Spring Festival holiday fuels bank card transactions – Xinhua | English.news.cn- The total value of domestic cross-bank card transactions rose 43 percent year on year during the holiday, which lasted from Feb. 9 to 15, while overseas card transactions gained 33 percent during the period, China UnionPay said in on online statement. Card payments in shopping malls and supermarkets continued to show robust growth, up 44 percent and 34 percent, respectively, but transactions in restaurants grew only 17 percent from a year earlier. Card transactions in jewelry shops experienced a boom during the period, surging 119 percent year on year due to Valentine’s Day, the statement said.

国内成品油价上调窗口开启在即 或进8时代 新华社——经济参考网 –  China may raise fuel prices in the next few days//   春节长假期间,国际油市再现金蛇起舞,布伦特油价一度创出近9个月以来的新高。国内成品油调价参照的三地原油变化率已突破3%,逼近4%的油价上调红线。专家表示,国内油价上调窗口开启近在眼前,北京、上海、广州汽油价格或普遍进入“8”时代。

新年房价看涨预期普遍增强 调控仍有加强空间_财经频道_一财网 - expectations of home price increases growing, more real estate repression measures possible// 今年1月,上海易居房地产研究院监测的20个典型城市新建商品住宅成交面积达1057万平方米,同比增长269.2%。 在楼市的回暖大潮中,一线城市表现极为抢眼,数据显示,今年1月,北京市二手房成交总量高达19561套,创下了近24个月以来的新高。总体成交均价也回到了北京楼市调控细则出台前的水平。 楼市回暖加强了市场的看涨预期。今年1月北京土地交易额达到205.7亿元,成为近11年以来北京土地市场最好的开局。

China Economic Watch | Beijing’s 2015 Industry Consolidation Targets: Problem or Solution?- Conclusion: Work to Be Done, Either Way. There are tens of thousands of Sino-foreign joint ventures with shareholding structures that can’t be rationalized because of local resistance to consolidation or vested interests in industrial policy… If the consolidation process is unfair, private and foreign firms need to scramble to wind down their presence and recover what assets they can, because holding your ground in these key industries while your rivals grow is an unwinnable game.

China’s Internet ‘Wall’ Hits Business – WSJ.com- China continues to keep a tight grip on the Internet even as it seeks greater openness with the world in other ways, striking deals to buy foreign brands and developing its own cultural exports, such as movies. The lack of easy access to Internet services like Facebook and Google that the rest of the world takes for granted could reduce China’s global competitiveness, experts say, and put it at a disadvantage when competing for top talent.

Mainland restaurant takings plummet as party order cadres to tighten belts | South China Morning Post- High-end restaurants in the mainland are feeling the pinch as the Communist Party calls for less spending on extravagant meals before Lunar New Year. The catering sector, one of the bright spots amid a slowing mainland economy in the past two years, has been hit recently by dwindling sales and squeezed profit margins, with pessimistic owners mulling whether to close their businesses. According to a survey by the China Cuisine Association (CCA), 60 per cent of nearly 100 restaurants saw bookings cancelled recently, with one Beijing-based outlet reporting an 80-per-cent drop in sales.

Cat Scammed: How A U.S. Company Blew Half A Billion Dollars In China – Forbesshorts are circling around Joy now, thesis being that IMM will need to be written down too// The largest shareholder in ERA was James Thompson Jr., whose namesake father owns Crown Worldwide Group in Hong Kong. But sources say Thompson Jr. was a proxy for Li Rubo, his father-in-law, who is Williams’ partner. Williams met Li, a mining engineer, in 1997 while running a construction materials firm in Tianjin. In 2004 they began investing in mining machinery. Siwei was one such venture. The other, International Mining Machinery, was listed in Hong Kong in 2010. In July 2011 it was sold to Joy Global in Milwaukee in a deal that valued the company at over $1 billion. Williams and Li held a 9% stake.

For China, Spending Is Harder Than It Looks – WSJ.com- That means that even if China’s leaders want to offer tax cuts and boost spending this year, they may have less fiscal room to do so than official statistics suggest. “Compared with 2012, fiscal policy on both central and local levels this year will be more active, no doubt about that. But the room to be more active is limited,” said Fan Jianping, director of the State Information Center’s economic forecasting department, which is backed by the nation’s top economic planning agency. Beijing’s top leaders will unveil the official target for the 2013 fiscal deficit in March during the National People’s Congress, the annual meeting of China’s legislature. The consensus among private and state-linked researchers is that this year’s budget deficit may rise to about 2% of GDP, up from the 2012 target of 1.5%. By comparison, the U.S. had a fiscal deficit of 8.7% of GDP last year, while India’s was 9.5%, according to estimates by the International Monetary Fund.

The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy: Michael Pettis: Amazon.com – China’s economic growth is sputtering, the Euro is under threat, and the United States is combating serious trade disadvantages. Another Great Depression? Not quite. Noted economist and China expert Michael Pettis argues instead that we are undergoing a critical rebalancing of the world economies. Debunking popular misconceptions, Pettis shows that severe trade imbalances spurred on the recent financial crisis and were the result of unfortunate policies that distorted the savings and consumption patterns of certain nations. Pettis examines the reasons behind these destabilizing policies, and he predicts severe economic dislocations–a lost decade for China, the breaking of the Euro, and a receding of the U.S. dollar–that will have long-lasting effects.

Video: weaning China off credit-fuelled growth | beyondbrics – pettis book tour in full swing// China’s economy has grown at 8 per cent and more each year over the last decade, but much of that has been fuelled by debt. Michael Pettis, professor of finance at Peking University and author of ‘The Great Rebalancing’ explains to emerging markets editor Stefan Wagstyl the problems facing China as it rebalances its economy from one driven by state investment.

China Economic Watch | Book Review: The Great Rebalancing- The two main problems with the text center on debt levels and future projections of economic growth. On the issue of debt, Pettis repeatedly claims that Chinese debt levels are growing and will soon reach unsustainable levels, triggering a sharp correction. What is missing is a specific estimate of China’s overall debt-to-GDP ratio to judge the severity of this risk. Our analysis shows that Chinese debt levels have not increased significantly since the 2008-09 lending boom and that overall levels, while on the high side for an emerging market economy, are not yet at a crisis point. More importantly, unlike other emerging markets that have suffered debt-related crises, Chinese debt is overwhelmingly denominated in renminbi and therefore immune from exchange rate swings. The second point of contention is Pettis’ projection that Chinese GDP growth must slow significantly in order to achieve rebalancing. His analysis is that GDP growth must slow to 3 to 4 percent on average over a decade. Here Pettis underestimates the potential for catch-up consumption growth in China and mistakenly assumes that rebalancing must be abrupt and disruptive.

How Berlin and Beijing tilted world trade – FT.com – The problem is that orderly rebalancing takes time and a disorderly rebalancing through future crises could be catastrophic. In his emphasis on the mechanics of the global economy, Pettis pays too little attention to the role of history in shaping events. The reasons why the Chinese Communist party opted for investment-led growth can help explain why it now finds it so hard to change tack. Ditto Germany and exports.

Pettis on China: how to spot early signs of economic reform- Will the new government in Beijing launch reforms to rebalance the Chinese economy – or not? One way to find out is to scan the pronouncements of the Xi Jinping, the new Communist party leader, and his politburo. But that’s not easy, given the walls that surround China’s political elite. Another way is to look for hints in the economic data. As China-watcher Michael Pettis told beyondbrics, the numbers could begin to reveal signs of change.

Guest post: China’s looming debt burden threatens growth | beyondbrics- By Ben Simpfendorfer of Silk Road Associates–For the past few years, I’ve described myself as a short-term bull and medium-term bear. But it’s time to update that view, as the medium-term has finally arrived; in short, China’s trend growth rate has shifted down towards 7 per cent and will likely stay there through 2015. The bigger question though is whether it will shift downwards again. If that proves to be the case, the unsustainability of China’s debt-fuelled growth will have played an important role.

Back in Fashion: China’s Bad Debt – WSJ.comtoo bad WSJ doesn’t ask/report on returns of their previous funds// Specialist investors are starting to raise funds on the expectation that the country’s lenders, under pressure to improve their balance sheets, will soon sell nonperforming loans. Shoreline Capital Management Ltd, a longtime investor in distressed Chinese debt, raised over $300 million for a new fund at the end of 2012. DAC Management LLC, a hedge-fund firm and another experienced investor in Chinese bad loans, is seeking to raise $300 million for a new China-focused fund. And Fortress Investment Group, FIG +2.79% a New York private-equity fund that invests in distressed property globally, is looking at buying a small Guangzhou-based company that manages distressed loans on behalf of investors, said people with knowledge of the deal.

Tesla Motors plans first China dealership|Economy|News|WantChinaTimes.com – partner?// Struggling US electric vehicle manufacturer Tesla Motors is planning to tap into the business opportunities offered by China. The company announced it will open a dealership this spring in Beijing — its first outlet in China — in a bid to establish a niche for its Tesla Model S electric sedan, Shanghai’s First Financial Daily reports.

 

POLITICS AND LAW

Vowing Change, China’s Leader Airs Other Message in Private – NYTimes.com  Yet Mr. Xi’s remarks on the lessons of the Soviet Union, as well as warnings in the state news media, betray a fear that China’s strains could overwhelm the party, especially if vows of change founder because of political sclerosis and opposition from privileged interest groups like state-owned conglomerates. Already this year, public outcries over censorship at a popular newspaper and choking pollution in Beijing have given the new party leadership a taste of those pressures.  Some progressive voices are urging China’s leaders to pay more than lip service to respecting rights and limits on party power promised by the Constitution. Meanwhile, some old-school leftists hail Mr. Xi as a muscular nationalist who will go further than his predecessors in asserting China’s territorial claims.

2013年中央一号文件首提发展“家庭农场”_网易新闻中心 – 新华网北京2月14日电 2013年中央一号文件提出,鼓励和支持承包土地向专业大户、家庭农场、农民合作社流转。其中,“家庭农场”的概念是首次在中央一号文件中出现。

关于若干重大问题的谈话纪要_共识网 – 编者按:据了解,这是卢德之先生与某要员在十八大召开前的一次谈话记录

Wukan democracy leaves village divided – SCMP Some elected leaders of a Guangdong village renowned for its democratic elections say the village is not ready for the democracy its residents aggressively aspired to a year ago.

The Jamestown Foundation: Can Xi Jinping Grow Political Power Out of the Barrel of a Gun?- Although he belongs to an elitist coalition built upon ex-CCP General Secretary Jiang Zemin’s “Shanghai Faction,” Xi is not necessarily of Jiang’s faction and, like his predecessor, may be another “first among equals.” The question is does Xi need to create a personal power base—or faction—at the center and, if so, how can he leverage his institutional positions to create it. Because Xi simply cannot exploit the security forces and investigative apparatus for personal motivations, consolidating political influence becomes a function of using policy to bind others to him and isolate potential opponents.

The Jamestown Foundation: All the General Secretary’s Men: Xi Jinping’s Inner Circle Revealed – It is probably too early to say in what ways the composition of Xi’s power base and support network may affect China’s policymaking. The preponderance of military figures within his inner circle, coupled with the country’s increasingly tense confrontation with Japan and the United States, could predispose the commander-in-chief toward pursuing more pugilistic foreign and military policies. The dearth of relatively liberal aides among his corps of advisers could affect the extent to which Xi might be pushing political liberalization.

Tibet’s Voice of Realism-Pico Iyer – It only takes logic—and far-sightedness and empiricism—to see that Beijing has much to gain from loosening up on Tibet and everything to lose, world-wide, from pushing it down; and that whoever succeeds the Dalai Lama is likely to have less first-hand knowledge of China, less experience, and probably less forgiveness and sympathy in his heart than the Tibetan leader we’ve long known. “Once things are open and more information is available in the People’s Republic,” the Dalai Lama said in Yokohama, “these complicated matters can be solved more easily. In the meantime, frankly speaking, even if I make some comment, it’s no use. Nobody listens.”

Yale grad takes low-paying job as government official in Chinese village — Latitude News – Qin Yufei, 27, graduated from Yale University in 2010 with a double major in political science and economics. For the past year and a half, he’s served as an official in a remote village in Hunan Province in China, according to a report in the People’s Daily, a state-owned newspaper. Instead of a cushy bachelor’s pad in New York or Beijing, Qin lives in an old house in Hejiashan village, putting up with rain from a leaky roof and noisy rats at night. His monthly salary is 1,450 yuan, about 233 dollars. The villagers respectfully call him “Brother Yale.”

国务院:将落实收入分配政策纳入日常考核-财经网 – 各级政府要将深化收入分配制度改革列入重要议事日程,建立统筹协调机制,把落实收入分配政策、增加城乡居民收入、缩小收入分配差距、规范收入分配秩序作为重要任务,纳入日常考核

Blogging the Slow-Motion Revolution: An Interview with China’s Huang Qi by Ian Johnson | NYRblog | The New York Review of Books – Huang Qi is best known in China as the creator of the country’s first human rights website, Liusi Tianwang, or “June 4 Heavenly Web.” A collection of reports and photos, as well as the occasional first-person account of abuse, the site is updated several times a day. It documents some of the hundreds of protests continually taking place in China, many related to government land seizures

 

FOREIGN AND DEFENSE AFFAIRS

Giants, but Not Hegemons – NYTimes.com – By ZBIGNIEW BRZEZINSKI WASHINGTON — Today, many fear that the emerging American-Chinese duopoly must inevitably lead to conflict. But I do not believe that wars for global domination are a serious prospect in what is now the Post-Hegemonic Age. Admittedly, the historical record is dismal. Since the onset of global politics 200 years ago, four long wars (including the Cold War) were fought over the domination of Europe, each of which could have resulted in global hegemony by a sole superpower. Yet several developments over recent years have changed the equation. Nuclear weapons make hegemonic wars too destructive, and thus victory meaningless. One-sided national economic triumphs cannot be achieved in the increasingly interwoven global economy without precipitating calamitous consequences for everyone. Further, the populations of the world have awakened politically and are not so easily subdued, even by the most powerful. Last but not least, neither the United States nor China is driven by hostile ideologies.

INTERVIEW/ Kurt Campbell: China should accept U.S. enduring leadership role in Asia – AJW by The Asahi Shimbun- As Washington implements its “rebalance to Asia” strategy, it will be important for China to accept the enduring and strong role of the United States in the region, said Kurt Campbell, outgoing U.S. assistant secretary of state for East Asia and Pacific affairs. In an exclusive exit interview with The Asahi Shimbun to review major diplomatic issues in the Obama administration’s first term, Campbell rejected perceptions of a U.S. decline, emphasizing, “We will be a leading country for decades to come.”

Commentary: Japan’s petty tricks counterproductive to ties with China – Xinhua | English.news.cn –  • The accusation Chinese warships targeted fire-control radars at Japanese vessels is sheer fabrication. Japan’s petty tricks are counterproductive to the improvement of its ties with China.It is time for Japan to make sincere efforts to rectify its wrongdoing and mend relations with China.

Nicholas Castle, teacher in China, dies – SFGate- Nicholas Castle, a 23-year-old UC Berkeley graduate who taught English with the Peace Corps in rural China, died Thursday. Mr. Castle, who grew up in Brentwood, died at a Chinese hospital three days after falling ill, said his mother, Susan Castle, who flew to China to be with her son. Doctors aren’t certain what the illness was, she said.

McMaster closing Confucius Institute over hiring issues – The Globe and Mail- McMaster will pull the plug when the current contract, which is up for renewal, expires July 31. The decision to abandon the partnership comes in the midst of a human rights complaint against McMaster from a former teacher at the institute. It was sealed by concerns over hiring practices – reported last year by The Globe and Mail – that appeared to prohibit teachers Hanban hired and sent abroad to staff the schools from having certain beliefs. The closing is a black mark on what’s been called China’s global soft-power “charm offensive.” Confucius Institutes, a key component, are regarded warily by academics and intelligence officials alike.

Resilience and the Asia-Pacific Rebalance | United States Pacific Command | USPACOM - “U.S. Rebalance”// As delivered by Admiral Samuel J. Locklear III, Commander U.S. Pacific Command U.S. Indonesia Society, 08 February 2013

Rogers: U.S. must confront China on cyber theft and espionage | Killer Apps- “We need direct talks with China and it needs to be at the top of a bilateral discussion about cyber espionage,” Rogers told Killer Apps after a speech at the Center for Strategic and International Studies on Wednesday. “This is a problem of epic proportions here and they need to be called on the carpet. There has been absolutley no consequences for what they have been able to steal and repurpose to date.” Rogers suggested that the U.S. begin implementing trade sanctions and “identifying individuals who participate in this, go after their visas, go after family travel, all of the levers we have at the Department of State, the problem is that bad.”

Lawmakers: NASA May Have Given Secrets To China–Aviation Week – According to sources at Ames and on Capitol Hill, the case involves Ames Center Director Simon P. “Pete” Worden and members of the center’s staff who are not U.S. citizens. Among the technology in question is a propulsion system originally developed for missile defense applications that was adapted for NASA’s Lunar Atmosphere and Dust Environment Explorer (Ladee). Now entering thermal vacuum test at Ames, Ladee is a robotic mission designed to study the Moon’s thin atmosphere and conditions near its surface from an equatorial orbit. It is scheduled for launch this summer.

Chinese Social Media’s Guerrilla War Against Army Privileges | Tea Leaf Nation- While many Internet users jump to the conclusion that some servicemen in the PLA use taxpayer money to get nice rides for themselves, others have pointed out that it is not necessarily the case. Many wealthy businessmen pull connections to finagle PLA license plates for their cars to take advantage of the privileges on the road. Fake PLA plates also have a large market. Nonetheless, the campaign is another attempt by China’s Internet users to chip away the privileges and mystique enjoyed by the PLA in Chinese society

日本拟将钓鱼岛申报世界自然遗产 将登岛调研_新闻_腾讯网 – 据央视报道据日本《冲绳时报》15日报道,日本冲绳县石垣市已经制订将钓鱼岛申报世界自然遗产的草案,将征求民众意见并择机登岛调研。

LEFT IN THE DARK: Secret U.S. military flights carried officials, equipment to N. Korea – AJW by The Asahi Shimbun- Senior U.S. administration officials held secret talks in North Korea on at least three occasions in 2011 and 2012, The Asahi Shimbun has learned. Although the visits had potential implications for Japan, Washington did not inform its security partner at the time and only informally confirmed one of them when the Japanese side pressed, government and other sources in Japan, South Korea and the United States said. The U.S. State Department even warned the Foreign Ministry against making further inquiries, saying they would harm bilateral relations, the sources said.

Obama Bid for Trade Pact With Europe Stirs Hope – NYTimes.com – Experts cited tough economic times on both sides of the Atlantic and a perceived need among European leaders for a cause to unify their frayed union as major reasons that an agreement might be reached now, where past efforts have failed. But an even greater consideration, they said, was the growing economic might of China.

Exclusive: Russia plans $25-$30 billion oil-for-loans deal with China | Reuters – Rosneft is seeking to borrow up to $30 billion from China in exchange for possibly doubling oil supplies, making Beijing the largest consumer of Russian oil and further diverting supplies away from Europe. Four industry sources familiar with the situation told Reuters that Rosneft was in talks with Chinese state firm CNPC about the borrowing, which would echo a $25 billion deal the two companies clinched last decade.

Iranian buying spree raises concerns about major expansion of nuclear capacity – The Washington Post – Purchase orders obtained by nuclear researchers show an attempt by Iranian agents to buy 100,000 of the ring-shaped magnets — which are banned from export to Iran under U.N. resolutions — from China about a year ago, those familiar with the effort said. It is unclear whether the attempt succeeded.

Make It Easier for China to Buy U.S. Businesses – Bloomberg – look where he works now, hard to take his advocacy seriously, but at least Bloomberg discloses his conflict…// In the long run, the U.S.-Chinese espionage tension will have to be defused by cooperation and trust. The continued development of mutually beneficial institutions, such as the World Trade Organization, and increasingly close government-to- government relations can reduce each side’s reliance on spying. The current outbreak risks real damage by making it harder for cooperation and trust to grow. (Stephen Heifetz is a partner in the Washington office of Steptoe, an international law firm. His clients include parties subject to review by CFIUS. He is a former deputy assistant secretary at the Department of Homeland Security, where he was a representative to CFIUS. The opinions expressed are his own)

[CEG Commentary] More Cooperation and Trust is the Only Way Forward for Sino-U.S. Relations | China Elections and Governance- Major General Zhu Chenghu, Dean of the Defense Affairs Institute at the National Defense University of the People’s Liberation Army (PLA) of the People’s Republic of China (PRC), gave a speech first at The Carter Center, then at Emory University on February 5, 2013. This is a compilation of his thoughts on three main subjects: the influence of Singapore’s model on China’s development, political reforms in China and the Sino-U.S. relationship.

American Policy Toward China: Getting Beyond the Friend-or-Foe Fallacy | NewAmerica.net- The question for this paper is this: Which approach makes sense for better policy making in Sino-American relations?  If this strikes you as potentially trivializing or overly colloquial, consider the pressure on policy analysts and the media to “score” U.S.-China summits and meetings, like the Washington summit of January 2011 or the Strategic and Economic Dialogue, as a “plus” or a “minus,” an “improvement” or a “deterioration” in relations. This tendency to reduce a complex relationship to a dichotomous “index” points to a conceptual-analytic fallacy in thinking about Sino-American relations. This paper dissects the fallacy, explains briefly where it comes from, explores in a bit more detail why it is a significant problem from a policy-making perspective, and suggests a few ways to overcome it in the interest of making  better policy.

Ordering off the menu in China debates | OUPblog- My problem with the Jacques vs. Chang debate is that I find neither pundit convincing.  Jacques’ vision of China moving smoothly toward global domination glosses over the fissures within the country’s elite and the many domestic challenges its government faces. Chang continually underestimates the Communist Party’s resiliency and adaptability.  His 2001 book said it would implode by 2011. Late in 2011, he told Foreign Policy readers that he’d miscalculated and they could “bet on” his prophecy coming true in 2012.  In 2013, the Communist Party is still in control and somehow Chang’s still being invited onto news shows to make forecasts. When asked whether Xi Jinping is a reformer or a conservative and whether Mo Yan is a collaborator or a critic, I can craft an answer that draws a bit from both Column A and Column B  Being asked whether I side with Jacques or Chang is different

Waiting for the Next Act-Orville Schell – ORVILLE SCHELL: That’s why I say, I’ve waited through probably three or four generations with people always telling me, “Wait for the next generation.” The next generation comes and things do change, but what is equally as amazing is what has not changed. Truthfully, I don’t know where things are going. In China, things are always going in opposite directions at the same time. And there is no understanding the place, unless you can embrace such contradictions in your head at the same time.//always say mastering cognitive dissonance the most important skill for trying to understand China

U.S.-China Relations: Key Data Points from Pew Research | Pew Research Center – American public opinion has shifted in favor of getting tougher with China when it comes to economic and trade policy.

Disaster at Xichang | History of Flight | Air & Space Magazine – An eyewitness speaks publicly for the first time about history’s worst launch accident.

 

HONG KONG, MACAO AND TAIWAN

The HKID index–The HKID index: service suspended A special message from our Founder- For the first time in many years, probably since our early coverage of the Cyberport, we feel threatened in our coverage of HK affairs. Despite this, Webb-site is not-for-profit and although I heavily subsidize its running costs and commit a great deal of my time to promote transparency, accountability, and good governance in Hong Kong, I am not willing to commit vast amounts of money to a protracted legal court challenge of these principles against the virtually unlimited resources of the Government. Accordingly, with immediate effect, the Webb-site HKID index is indefinitely suspended. We will respond to the PCPD’s questions in due course, and seek to convince them that transparency of public data, and the freedom to collate it, is both legal and in the public interest. If the index never returns, you will know why.

 

TECH AND MEDIA

Morgan Stanley’s Latest Alibaba Estimates Suggest It’s Worth $66 – 128 Billion – Forbes- Of these three, I think the most relevant is Tencent which is still the biggest Chinese Internet company still experiencing rapid growth – albeit at a slightly slower pace than Alibaba.  (Tencent did $1.88 billion in the last year and is currently valued at $65 billion.) This analysis suggests the most likely outcome is that, if Alibaba IPOs this year (which seems likely), it will be valued at $80 billion.//I own shares of yahoo, think they sold part of their Alibaba stake far too early

Billionaire Alwaleed Buys Stake in China Online Retailer 360buy – Bloomberg – Kingdom Holding Co. bought a stake in 360buy Jingdong Inc., a Beijing-based online retailer, as the investment company controlled by Saudi billionaire Prince Alwaleed bin Talal increases investments in e-commerce. Kingdom Holding led a group of investors to purchase a stake valued at 1.5 billion riyals ($400 million) in 360buy, the Saudi company said in an e-mailed statement today, without providing details about the other investors. Kingdom Holding’s investment was about $125 million, which was financed by debt, and Qatar’s QInvest LLC advised on the deal.

Adding Some Key Facts In WSJ.com’s China’s Internet ‘Wall’ Hits Business Article | VPN Instructions – The article states “the government has been closing ports used by VPNs, and that the company has maintained services by switching to new ports each time an old one is closed.” Yes, this is true and this began around October 20, 2012. However, according to the monitoring from VPN provider Kovurt.com based in Hong Kong, as of around November 27, 2012, new actions were taking place in China: not only were ports closed, but also highly encrypted packets started to be filtered. So even when using alternate ports, it was the more enhanced packets that were being captured for possible further analysis and/or blocking.

Hollywood Celebs now talk to Chinese fans in Mandarin, on WeChat! | Digital in the round- Western celebrities are tackling the Chinese-made IM social network with personalized posts aimed to their Chinese fans.Right on time for Chinese New Year (Feb 10th), a series of Hollywood stars decided to take a leap forward, and wish a happy new year to their fans in Mandarin – some of them fairly successfully, I must say. From Paris Hilton’s “That’s hot, tell me more” to Ian Somerhalder’s “I’ll make sure to tell you something about me, much more than being a vampire”, each voice message specifically fits the characteristics of each celeb and creates a one-to-one relationship with the fans.

Web Redraws China’s Beauty Market – WSJ.com- While smaller than the $36 billion U.S. market for cosmetics, China is considered a major source of growth for the industry’s players. But online cosmetics retailers are quickly gaining ground in China by selling a wide range of brands at big discounts. Jumei.com gives discounts up to 15% on about 45 different high-end cosmetic labels like Dior and Lancôme. The discounts have taken a toll on foreign rivals. Avon Products Inc.’s AVP -2.49% China sales sank 31% in the third quarter; the company says it will study how to do better there. Sephora, a unit of LVMH Moët Hennessy Louis Vuitton SA,MC.FR +1.80% closed some stores recently in the country after sales of perfumes, lipsticks and the like slumped, and now plans its own online push.

 

SOCIETY, ART, SPORTS, CULTURE AND HISTORY

Dancing in Empty Beijing by Ian Johnson | NYRblog | The New York Review of Books – Probably the best temple fair is held each year next to the China Bookstore at Liulichang, a street that features galleries and stores selling traditional fine art supplies, such as writing brushes, ink stones, and xuan rice paper. Called the Changdian Temple Fair, it featured many of the most famous performers of folk dance, singing, acrobatics, and martial arts. These groups originated as societies that performed in honor of gods on their feast days at temples, as well as to entertain the pilgrims who were visiting. Many still have a religious orientation but some are more secular, with their members participating for fun, exercise, and camaraderie.

The Lunar Tao: Meditations in Harmony with the Seasons: Ming-Dao Dengbook Ian Johnson is reading, I have pre-ordered it// The lunar calendar is a main pillar of Chinese tradition and culture, encompassing many festivals and stories. Though most explorations of Taoism take place within the realm of scripture, exercises, and formal lectures, Deng Ming-Dao looks to the lunar calendar and highlights where these festivals and stories coincide with Taoism, giving readers a renewed and original way into this ancient philosophy. Each day of the lunar year is represented with a reading meditation, original translations, illustrations, and illuminating facts about festivals and traditions, providing readers with the context that gives Taoism such depth and resonance. Unlike any other book, and beautifully illustrated with more than 400 photo-graphs and drawings, The Lunar Tao offers a new way to explore Taoism and shows readers how to include the tenets of Taoism in daily life.

Celebrating Chinese New Year on the Street of Eternal Happiness | Marketplace.org- The Lunar New Year came in with a bang on the Street of Eternal Happiness, just like it does every year. Apart from the fireworks, though, it’s a quiet time for China: Shops are closed, the street’s empty, it’s a time to be indoors with family. But not for Zhang Naisun. His family is hundreds of miles away, in his home village. The 62-year-old spends his New Year’s Eve on the city sidewalk, head down, holding out a plastic cup for donations. Today, families taking a stroll along the Street of Eternal Happiness are feeling generous.  “You’re not returning home for the New Year?” a father walking with his children asks Zhang as he slips him a paper bill. “I wish you happiness and prosperity, sir,” replies Zhang.

Liu Xiaodong – is that all there is?-Randian – Liu Xiaodong’s current exhibition at Today Art Museum in Beijing presents six traditional paintings and lots of his painting-photographs and sketches of ethnic-minority-jade-digger types. A couple of the latter are also included in the Parkett edition – a good bit of multitasking. “I needed to think of a new way to engage, to make people discover that painting still has possibilities.” Quite.

Western Art is Barking at China » Counterpunch: Tells the Facts, Names the Names- Much of Chinese art, at least the best of it, is still undeniably socialist. But Western propaganda is continuously barking at China. “Censorship!” it screams. “Freedom of speech!” Anyone who attacks socialism or the leading role of the Communist Party is immediately elevated to the status of a cultural icon, a divine being, by Western critics and media. It does not really matter how well the artist paints, singer sings or filmmaker directs – becoming a dissident, an anti-Communist; it gains immediate access to fame, limitless grants and funding.

China produces most raw doping materials: WADA | Reuters – Virtually all the raw materials used by criminal gangs throughout the world to produce illegal performance-enhancing drugs come from China, World Anti-Doping Agency (WADA) director general David Howman said on Tuesday.

社科院报告:中国社会总体信任度已跌破60分底线_资讯频道_凤凰网 – CASS report says China’s society trust “index” has dropped below 60…still seems high…// “目前,中国社会的总体信任进一步下降,已经跌破60分的信任底线。人际不信任进一步扩大,只有不到一半的调查者认为社会上大多数人可信,只有两到三成信任陌生人。”前不久,中国社会科学院社会学研究所的社会心态蓝皮书《中国社会心态研究报告2012-2013》发布之后,引起社会各界强烈反响。

Ping Fu’s childhood tales of China’s cultural revolution spark controversy | Books | guardian.co.uk- A successful US entrepreneur faces mounting questions over her widely lauded tale of childhood torment in China’s cultural revolution, as fresh contradictions emerge and experts cast doubt on key elements of her story. Ping Fu’s rags-to-riches memoir Bend Not Break says she was torn away from her parents at eight, brutally abused and sent to work in a factory; then forced to leave China for the US after triggering an international outcry over female infanticide as a student. She went on to found software company Geomagic, currently being acquired by 3D Systems.

Welcome to Wuwucun, a Village in the City | ChinaFile – nice pictures// Tucked amidst the factories and shops of of the Longgang district of the southern boomtown of Shenzhen sits a handful of narrow Qing Dynasty lanes collectively called Wuwucun, after the original Hakka minority Wu clan who established the village in the early nineteenth century. If one squints a bit and ignores the satellite dishes on the tiled roofs, the place does not appear to have changed much since then. But the Wus have been gone for a couple of decades now, leaving their ancestral buildings for the modern apartments springing up in the nicer parts of town. Who has taken their place? China’s new urban settlers—migrant workers who do not want to migrate anymore.

UCLA Asian American Studies Center: Film Screening and Panel Discussion: Linking Our Lives: Lucie’s Life Exploration – This film documents the late Professor Lucie Cheng, UCLA faculty and Director of the UCLA Asian American Studies Center. A pioneering scholar of feminist issues, immigration, and disadvantaged groups, Cheng pursued academic freedom and freddom of the mind through hands-on work in society. This film, winner of Taiwan’s prestigious 2012 Golden Harvest Award for Best Documentary, Linking Our Lives, portrays her unfettered spirit and remembers her legacy at UCLA. Screening to be followed by a panel discussion.

Mathias Braschler’s and Monika Fischer’s Chinese Portraits – NYTimes.com- When the Swiss photographers Mathias Braschler and Monika Fischer took a six-month road trip across the United States for their portrait series “About Americans,” it was a journey through a foreign land. Sort of. They spoke the language. They had comfortable motels. They could eat hamburgers. That all changed when the pair, who had never been to China, decided to undertake an ambitious road trip there, hoping to visit every one of the country’s 33 provinces and regions

Duke Kunshan University delayed again, following communication and funding problems | The Chronicle- Poor management and insufficient funding contributed to major construction problems that have caused the fifth significant delay of Duke Kunshan University’s opening in three years. The campus’ opening has been delayed another semester to Fall 2014. Construction slowed to almost a full stop in 2012 despite promises of development from the Kunshan government, which manages and funds the campus’ construction.

The Useless Tree: Great Leap Famine Denial- In my other class this semester, contemporary Chinese politics, we are getting ready to consider the Great Leap Famine.  In noodling around the internet in search of the any new bits of information, I have found several examples of what I will call GLF denialism, arguments that attempt to deflect attention away from the horrible fact that millions and millions of people starved to death as a direct result of state policy.  I will not link to these sites, because I do not want to advance their project; moreover, they are an insult to the countless victims of the CCP’s horrific assault on rural society.  But I do want to engage with a point or two that the denialists raise.

 

ENERGY, ENVIRONMENT AND HEALTH

北京雾霾检出危险有机化合物_资讯频道_凤凰网 – CAS scholars look at the dangers of beijing’s smog// 本报综合消息 据中国青年报报道,中国科学院近日公布了该院“大气灰霾追因与控制”专项组的最新研究结果,研究认为,最近的强雾霾事件,是异常天气形势造成中东部大气稳定、人为污染排放、浮尘和丰富水汽共同作用的结果,是一次自然因素和人为因素共同作用的事件。

Sharp Joins Panasonic in Surge of China Air-Purifier Sales – Bloomberg – Sharp’s sales of the products, built mainly in Shanghai, tripled last month from a year earlier, Miyuki Nakayama, a company spokeswoman in Tokyo, said by phone yesterday. That’s spurring the Osaka-based manufacturer to increase output, she said. Panasonic’s production of air purifiers for the Chinese market in January were 50 percent above average monthly levels, Chieko Gyobu, a spokeswoman, said yesterday.

Desalination Seen Booming at 15% a Year to Add Water – Bloomberg – really?// . “In places like China, desalination is an economic slam- dunk,” he says.

Desalination: Costly drops | The Economist – In its first five-year plan for the industry, in December, the government insisted that desalination was “of benefit to sustainable development”. It was better, it argued, than sucking more water out of the north’s fast-diminishing aquifers. That is surely right. Yet desalinating water uses enormous amounts of energy, which comes mainly from highly polluting coal (though Beijiang’s advanced technology is more efficient than that found in standard power plants). And diverting water from the river basin could exacerbate the impact of droughts in the south. No wonder that environmentalists complain that the government is relying on costly remedies, and doing too little to encourage conservation.

Big shifts ahead in Chinese energy consumption | FT Alphaville- That first point — targeting total energy consumption rather than intensity — would be a huge deal if enforced, because China’s targets have previously focused on units of energy per unit of GDP. Of course, there’s much scepticism about China’s energy targets; targets for the previous five-year plan to 2010 were missed by a wide margin. But as Garnaut reports, Chinese officials and analysts are saying this time will be different:

China’s farms pose growing antibiotic resistance risk- Unchecked use of antibiotics in Chinese farms had led to widespread antibiotic resistance, a new study has found, with researchers warning the problem may spread worldwide through manure and fertiliser run-off. China is the world’s biggest producer and consumer of antibiotics in the world, with at least 46.1% being used in livestock, as much as four times the amount used by livestock industry in the US.

 

FOOD AND TRAVEL

Chinese appetite for shark fin soup devastating Mozambique coastline || guardian.co.uk- Standing among coconut and mango trees near the coast of Mozambique, Fernando Nhamussua carefully prepares shark meat for a family meal – and contemplates a basket with a profitable haul of four dried shark fins. “I want to sell them to the Chinese,” the 33-year-old admits with disarming candour, estimating that a kilogram’s worth will fetch around 5,000 meticals (£104). “We take them to town where there is a place for Chinese buyers. It’s good money.”

China’s fishmongers lament waning popularity of shark fin soup | World news | Guardian Weekly – Anti-shark hunting campaign fronted by ex-basketball player Yao Ming is leading Chinese youth to reject traditional dish

Spring Festival holiday sees 440 mln trips – Xinhua | English.news.cn- Chinese made 440 million trips during the Spring Festival holiday, which lasted from Feb. 9 to 15, transportation authorities said Saturday. Railways handled 34.68 million trips with a year-on-year increase of 3 million trips, according to the Ministry of Railways (MOR).

Chinese netizens to Europe horse meat scandal: “Bring them all to China!” OffbeatChina- Chinese media have been on high gear reporting the horse meat scandal, but netizens are responding differently. They think that horse and donkey meat taste better than beef, and that China has more serious food safety problems.

 

BOOKS AND LITERATURE

Takeaway: Catherine Sampson: Amazon – A short story featuring Detective Song Ren, an honourable man trying to navigate the murky depths of Beijing’s dark underbelly. One day, in the sweltering heat of a Beijing summer, a young woman comes to the Sherlock Holmes Investigation Agency and pleads with Detective Song to help her. She claims that her own parents have poisoned her and sold her identity. Now she is on the run, accused of murder. Detective Song investigates, and uncovers a web of deception such as he has rarely seen.

 

JOBS AND EVENTS

Al-Jazeera english Hiring China correspondent to replace Melissa Chan – Based in Beijing, the Correspondent will have a proven track record of delivering reports of the highest standard. The Correspondent will be responsible for covering one of the most important countries in the world. From its economic clout to the social changes taking place inside and concern over its territorial claims, China has made its mark on the early 21st century. S/he must be able to provide the necessary context in reports and live interviews, understand how China and its people work and how they view the outside world. Travelling widely, s/he will have the ability to work independently and must possess excellent people skills.

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