The Sinocism China Newsletter For 09.29.12

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We have a date for China’s leadership transition and progress in the Bo Xilai case.

The Communist Party of China will convene the 18th National Congress on Nov. 8 (中共中央政治局会议建议中国共产党第十八次全国代表大会11月8日在北京召开):

The 18th National Congress of the Communist Party of China (CPC) is proposed to convene on Nov. 8 in Beijing.The Political Bureau of the CPC Central Committee decided at a meeting on Friday to submit the proposal to the seventh plenary meeting of the 17th CPC Central Committee, which will be held on Nov. 1.

The only previous official announcement about the timing of the 18th came last October at the close of the 6th Plenum of the 17th Party Congress–Communist Party of China to hold 18th National Congress in 2nd half of 2012.

Rumors of an October date for the 18th Party Congress have been circulating and preparations and hotel bookings appear to have been made for an earlier start. So something looks to have pushed the opening back, perhaps internal strife, perhaps the Japan tensions, perhaps health issues, perhaps the desire for an auspicious day (11.8 is a very good date), perhaps there is a much broader reform agenda under discussion, or perhaps Hu Jintao wanted to serve as Party Secretary for a full ten years, as he took power at the 16th Party Congress which convened November 8, 2002.

We do not know but lots of us will guess.

One thing we do now know is that the top of the Party found consensus, at least publicly, about the incredibly complex and difficult Bo Xilai case.

Bo Xilai has been expelled from the CPC and public office (中共中央决定给予薄熙来开除党籍、开除公职处分 – 新华网, CCTV Evening News segment, People’s Daily front page) and will be handed over to the judiciary. The 7th and final Plenum of the 17th Party Congress will ratify the Bo Xilai decision. If the Chen Xitong and Chen Liangyu cases are precedents, it will be several months before Bo Xilai goes on trial.

Based on the list of transgressions in the official release, Beijing is putting Bo into a very deep hotpot and turning the burner to 11.

The CPC’s aggressive removal of Bo is good news for Xi Jinping and China as it purges a direct rival and a political malignancy. Bo’s remaining supporters, if there are any who matter, have already or will now pledge loyalty to Xi, or else they will have very limited futures.

Bloomberg reports that at least one economist sees the Bo decision as good news for China’s economy:

Yesterday’s news is “quite positive to the economy and markets for two reasons,” Lu Ting, chief Greater China economist at Bank of America Corp. in Hong Kong, wrote in a note to clients. “One, it will significantly reduce perceived political and economic risks; two, it will help end policy paralysis.”

Meanwhile, China’s Securities Regulatory Commission has called for market stability during the 18th Party Congress period-证监会部署十八大维稳工作 要求确保市场稳定 _一财网. Traders “buck Beijing” at their peril.

Evan Osnos at the New Yorker writes that the case opens a Pandora’s Box for the Communist Party as many will question how Bo could have been so corrupt for so long and how many more senior leaders are like him.

Jeremy Page, who has produced some of the best reporting on the Bo saga, writes in the Wall Street Journal that:

Zhang Ming, a political scientist at Renmin University in Beijing, said Friday’s announcement was as politically significant as that of a failed 1971 coup attempt against Chairman Mao Zedong by his military chief and designated successor, Lin Biao.

Mr. Zhang said he believed China’s leaders were worried by recent anti-Japanese demonstrations, during which many protesters appeared to show support for Mr. Bo by carrying portraits of Chairman Mao, whose patriotic songs Mr. Bo had revived.

“If they didn’t take Bo Xilai’s actions and announce them to the people, he would just turn into a populist leader,” Mr. Zhang said.

Speculation about a connection between the recent anti-Japan demonstrations and the harsh treatment of Bo is interesting. Few people in China take anything at face value and most prefer to believe the conspiracy theories. One such theory, as I mentioned September 17, is that the Maoist displays in the protests did not so much worry Beijing leaders as they were they hoped for. The conjecture is that certain powers in Beijing, wanting to see what might bubble up, allowed latitude in the handling of the protests, while confident in their ability to quell things quickly if they got out of hand.

This is known as 引蛇出洞 (draw the snakes out of their holes) and is a strategy Mao Zedong nearly perfected. Sure enough, Bo supporters, neo-Maoists, leftist opportunists and other dead-enders tried to take advantage of the protests. I have no idea if this is true, just passing along one of the more interesting theories going around.

What does his dad’s formal downfall mean for Bo Xilai’s second son Bo Guagua? The Wall Street Journal reports that:

Bo Guagua, 24 years old, is believed by family friends to have been living in the U.S. since graduating from Harvard’s Kennedy School with a master’s degree in May. He has mostly maintained a low profile since then and hasn’t been accused of any wrongdoing by Chinese authorities.

The announcement about Bo hints at corruption involving Guagua. Shifeike, a prominent microblogger, analyzed the official statement and concluded that (as translated by Tea Leaf Nation):

…what I get is: “Bo Xilai took advantage of his power, his wife Gu Kailai took advantage of the influence of Bo Xilai’s position, and the husband and wife together sought to benefit others, then Bo Guagua [Bo's son, who lives in the United States] accepted enormous amounts of property on the outside.”

As more information comes out, could Harvard face a scandal over the source of funds for Gaugua’s Kennedy School tuition fees? How much money does Guagua still have access to, how will the US government treat him, what passport does he hold and will he ever be able to return to China?

This video of Henry Kissinger attending a 100,000 person red rally in Chongqing in 2011 as Bo Xilai’s guest of honor is embarrassing and possibly damaging to Kissinger as his ties to Bo could hurt his access to other politicians here. Any idea how much Kissinger was paid for this shameful performance?

Zhang Ziyi’s rumored sexual relationship with Bo Xilai is back in the news. Coincidentally, or not, Friday afternoon the People’s Daily web site posting an item about her libel case against Boxun going to court in the US next week–章子怡跨国控诉”六宗罪” 下周五美国开庭-人民网. Hong Kong media is going to have another field day with her, and progress in the Bo case may be bad news for her new film “My Lucky Star” and its investors.

The FT’s Jamil Anderlini, whose e-book The Bo Xilai Scandal: Power, Death, and Politics in China is the first english book about the scandal, needs an update to cover Wang Lijun’s sentence and the Bo Xilai decision.

Meanwhile, the dispute with Japan continues. The Asahi Shimbun goes inside the Japanese government’s decision-making process that precipitated the crisis. In Japan tried but failed to avert disaster in China dispute we learn, among many other interesting items, that:

…the government felt it would be easier to act before China’s impending leadership shakeup, and later to repair ties when Beijing’s new leaders took power; and that Japan’s government drew up—but shelved—possible plans to build on the islands.

Chinese Assistant Foreign Minister Le Yucheng made some interesting remarks at a symposium marking the 40th anniversary of the normalization of relations between China and Japan:

Forty years after the normalization of their relations, China and Japan once again find themselves at a crossroads. The decision of the Japanese government to “purchase” Chinese islands, like an atomic bomb dropped on China, has aroused the anger of all Chinese and rallied the 1.3 billion people of China closely together. I want to make it as clear as possible to Japan: never expect China to accept the so-called “nationalization” of the Diaoyu Dao islands, never cherish the illusion for continued occupation of the islands, and never assume that the matter will simply disappear or be explained away by some kind of envoys. If Japan insists on having its own way and lurches down on its erroneous path, then the big ship of China-Japan relations may strike a rock and sink like the Titanic.

Loaded rhetoric aside, what I am hearing between the official, bellicose Chinese statements sounds almost like pleading from China for Japan to find a way to give China face and allow both sides to de-escalate the situation. So far Japan is not responding.

In Something to Talk About in the East China Sea Taylor Fravel explains the history behind the China-Japan understanding and suggests there may be a way to resolve this current dispute:

At the moment, China and Japan stand at a diplomatic impasse.  Yet China’s September 10 statement retains sufficient ambiguity for creative diplomats to define the “common ground” between the two sides in order to restore stability in the dispute.  For example, Japan could state that although its sovereignty over the islands is “indisputable,” it recognizes that, in practice, other claims exist. If China and Japan want to move forward, they will need to find a way to shelve the dispute again.

China is on vacation for a week starting this weekend. I will be posting sporadically.

Today’s links:

BUSINESS AND ECONOMY

Goldman sees China’s growth slowing to 7 percent for next decade | Reuters - China’s economy is expected to grow at a much slower pace of about seven percent over the next decade, but its stock market still has the most attractive upside among “BRIC” countries, according to Jim O’Neill, Chairman of Goldman Sachs Asset Management.

MMAC: 40Pct Iron Ore Mines in China Suspends Operation-Caijing - Metallurgical Mines’Association of China (MMAC) said Thursday that 40 percent of the country’s iron ore mines had suspended production as the world’s largest steel market faces unprecedented challenges.

Foreign developers rush to buy commercial properties in China|WantChinaTimes.com - Foreign property developers have been stepping up their efforts in China’s market, buying premium properties and land plots in Beijing and Shanghai, suggesting overseas investors are predicting a healthy outlook for China’s property market and the country’s commercial property may grow rapidly in the near future.

China’s Megacities-to-Be – Businessweek- The hometown network, colloquially known as Hunan TV, is responsible for launching the wildly popular American Idol-like audition shows Chao Ji Nu Sheng (Super Girl) and Kuai Le Nan Sheng (Super Boy). Last year it was the top-rated provincial network in China, trailing in viewership only behind national behemoth CCTV. Changsha is not just an entertainment center, it’s also home to two big construction-equipment makers, Zoomlion and Sany

 

POLITICS AND LAW

Gold mooncakes raise suspicions of corruption – Xinhua | English.news.cn - Gold mooncakes made their debut in the gift sector ahead of China’s back-to-back autumn holiday but suspicions of corruption have been raised.Made of pure gold, the mooncake-shaped artifact witnessed good sales on the eve of China’s traditional Mid-Autumn Festival, also known as the Mooncake Festival.

十八大新闻领导小组正式成立_多维新闻网 - 中共十八大新闻领导小组日前已经正式成立,成员超过十位,全部为副部长级以上高级官员,来自中宣部、中央外宣办(国新办)、人民日报社、新华社、国家广电总局、中央电视台、中国记协、国家民委等单位。香港《大公报》称,该小组负责统一协调十八大新闻报道的会务组织、记者报名、新闻发布会安排等工作。而外交部、国台办、港澳办、中国记协等将有工作人员参与具体工作。

“八二宪法”的回顾与展望-2012年第9期 炎黄春秋杂志 - cover essay of september issue of yanhuang chunqiu looks at the 1982 constitutional reform// 宪法是治国之大纲。中国现行宪法是1982年通过和颁行的宪法(以下简称“82宪法”)和四个修正案。现行宪法反映了改革开放以来党和国家奉行的实事求是的思想路线以及政治、经济、文化与社会各个领域所取得的重大成就和进步,是中国现状的真实反映。但是它尚未达到理想宪政的应有水平,尚需随中国宪政的历史发展而不断完善。当前的主要问题是如何树立宪法的极大权威,并全方位推进民主与法治建设。

政治体制改革应该中步前进了–炎黄春秋杂志 - 杜导正 Du Daozheng again calls for political reform in latest issue of yanhuang chunqiu, right on eve of 18th party congress. //最近一段时间,我与《炎黄春秋》的同仁以及一些老朋友有过多次谈话、对话,话题是当下党和国家的形势与走向,重点是政治体制改革的紧迫性和切入点。一些老朋友认为我最后形成的对这些问题的思考,有助于人们对当下中国的认识。这些观点不是我一个人的,而是大家讨论后所引发的思考,也算是集中了大家的意见。现在发表出来,供大家参考,一起来讨论。

政法委的历史与演变 - Yanhuang Chunqiu on history and evolution of Politics & Law Committee, by Zhou Yongkun// 现行党委政法委员会(以下简称“政法委”)是公、检、法三家的“党内领导机构”,它已经存在了半个多世纪,现在应当将它放到社会主义法治建设的大背景下重新检视,以寻求新的历史定位。.. 在历史上,党政不分现象同样存在于财经、政法、外事、科学、文教等领域,其他领域的问题在经济体制改革过程中都比较容易地解决了,政法委是文革式一元化体制的唯一遗存。因此,从不同工作领域的横向比较来看,政法领域的党政不分体制已经严重落后于其他领域,造成中国改革开放的“跛足现象”,拖了改革开放的后腿。因此,对政法委的改革当确立为一步政治体改革的首要目标。作为过渡,可以考虑先撤销地方政法委员会,保留中央的政法委员会,其职权借鉴当年的政法小组的规定,当为党内的政法智库。

What Romney’s tax returns say about his investments in Chinese companies | GlobalPost - This year, Romney’s blind trust also unloaded several hundred shares of Tencent, an Internet company that owns (among other things) China’s largest instant-messaging service, as well as a position in New Oriental, an education company.

China Forensic Expert Defiant After Casting Doubt on Gu Kailai Story  - WSJ - No individual, no group, no organization can use me, Wang Xuemei, to speak the lies they want to speak or commit the sins they want to commit, because I’m a professional who is deeply loyal to the souls of the dead and who acts in accordance with what Heaven decrees.

 

FOREIGN AND DEFENSE AFFAIRS

Obama blocks Chinese wind farm in Oregon over national security | Reuters- Ralls Corp, which had been installing wind turbine generators made in China by Sany Group, will now be forced shelve its plans and divest its interest in the four wind farm projects it acquired earlier this year.The wind farm projects were all within or in the vicinity of restricted air space at a naval weapons systems training facility in Oregon, the administration said.

Author Haruki Murakami says nationalism over Japan-China dispute is like ‘cheap liquor’ – The Japan Daily Press -

Has Japan ever respected territorial rule of law? – Xinhua- Japanese Prime Minister Yoshihiko Noda’s speech on Wednesday at the United Nations General Assembly, in which he emphasized respect for the international rule of law in resolving territorial issues, looks speculative, or to a larger extent, deceptive to observers, given its history of relentless invasion of neighbors. That the Japanese government chose to play the international-law card at a moment of lingering disputes with China over the Diaoyu Islands exposed its intention to manipulate international vox populi after failing to push China back via unilateral actions such as “purchasing” and landing on the islets.

US won’t play role of mediator in islands dispute, diplomat says/ chinadaily.com.cn - The United States isn’t seeking to mediate an escalating dispute between China and Japan over the Diaoyu Islands but will continue to encourage the two Asian powers to resolve the matter through diplomacy, a senior US diplomat said Friday. Kurt Campbell, assistant secretary of state for East Asian and Pacific affairs, told reporters at a briefing in New York that the US has a strong interest in seeing the territorial dispute handled through dialogue. Any military action in search of a solution would be “unwise”, he said.

Japan must protect Chinese embassies, personnel: FM – Xinhua  - A Chinese Foreign Ministry spokesman on Friday responded to media reports of threatening mail sent to the Chinese embassy in Tokyo by saying that China requires Japan to protect the safety of Chinese embassies and personnel within its territory.

Chinese hospitals begin boycotting Japanese medicines in protest – The Japan Daily Press - hospitals in Beijing have begun boycotting Japanese-made pharmaceutical drugs. Japan’s Kyodo news heard from several domestic business sources who say several hospitals have returned their medicines to the Japanese distribution companies located in China.

Japanese businesses booted from major China trade fair | The Japan Times Online -friend with a factory in North China says China Customs has started  impounding the raw materials they import form Japan//  The organizers of the Western China International Fair in the city of Chengdu sent notices to Japanese firms Monday evening asking them to pull out of the event, which runs through Sunday, the sources said.

U.S. cyber warrior accuses China of targeting Pentagon | Reuters - The U.S. Cyber Command’s top intelligence officer accused China on Thursday of persistent efforts to pierce Pentagon computer networks and said a proposal was moving forward to boost the cyber command in the U.S. military hierarchy.

 

TECH AND MEDIA

8 Questions For GlobalWebIndex | GreatFire.org - I know from conversations w a top exec at one of the firms listed that GWI’s numbers are off by more than an order of magnitude. ridiculous how easily major media picked up this bs and ran with it//GlobalWebIndex published a new report on Internet usage around the world this week, and it contained some great news for China. Twitter, Facebook and Google+ have increased their user numbers dramatically in China, as seen below. There’s just one problem. They are all blocked in China, and we believe that GlobalWebIndex has got it’s data wrong

No, Facebook Doesn’t Have 63.5 Million Users in China–Thenextweb - With that in mind, we’d suggest that you treat the GlobalWebIndex figures with more than a healthy dose of scepticism…oh and pour on a tonne of salt for good measure.

Alibaba and the Copyright Pirates – Businessweek - no doubt Alibaba wants this resolved before its rumored 2013 IPO, USTR has lots of leverage// To help solve the problem, Ma and his deputies are turning to James Mendenhall, an attorney in Washington who was the general counsel for the USTR during the George W. Bush administration and is now counsel at Sidley Austin, the Chicago law firm where Barack and Michelle Obama worked as young associates. Alibaba retained Mendenhall’s firm early this year to work with U.S. trade associations and companies worried about piracy on Taobao. While pledging to address their concerns, Mendenhall also stresses the need for patience. Ma and his team “have an enormous amount of commerce on their platform,” he says. “They are trying to come to grips with it.” Last year, Alibaba also hired the Duberstein Group, a lobbying firm founded by a chief of staff to President Ronald Reagan, Kenneth Duberstein.

 

SOCIETY, ART AND CULTURE

Rural activism: Working the system | The Economist - Now, the dynamic in Shibaihu has shifted. One of the officials disciplined as a result of Mr Li’s activism has sought Mr Li’s help in appealing against his treatment; they do not trust each other, but they are working together. Mr Li and another ousted official don’t speak when they pass on the road. Mr Li and his mother long ago locked the gate to the village office, and still have the key. The village’s financial books, though, are not there. The tales they contain remain a secret.

China Focus: “Black kindergartens” scrutinized after child’s death – Xinhua  - The death of a 3-year-old girl in central China has thrust unregistered kindergartens in the country’s rural areas into the spotlight.

 

FOOD AND TRAVEL

In Search of Beijing’s Most Exquisite Peking Duck – WSJ.com - Now given its proper due, true renditions of Peking duck abound in its host city. Any poultry-based tour of Beijing would be a great way to witness the growing sophistication and design savvy of restaurateurs in a land where eating has always been the prime obsession and status symbol. It’s also delicious.

 

BOOKS

What the U.S. Can Learn from China: An Open-Minded Guide to Treating Our Greatest Competitor as Our Greatest Teacher: Ann Lee,Ian Bremmer:  Amazon. - uh, published 1 year too late? // Why did China recover so quickly after the global economic meltdown? What accounts for China’s extraordinary growth, despite one of the highest corporate tax rates in the world? How does the Chinese political system avoid partisan rancor but achieve genuine public accountability? From education to governance to foreign aid, Lee details the policies and practices that have made China a global power and then isolates the ways the United States can use China’s enduring principles to foster much-needed change at home.

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