The Sinocism China Newsletter 07.09.13

United got us to DC, albeit a little late and a little bent out of shape from sitting in cattle class for fifteen hours. But at least we got her safely. Thanks to all who sent notes about meeting up. I am behind on a few things, especially sleep, and will reply in the next few days. It may make sense to have a Sinocism dinner, recommendations for a decent Chinese restaurant in upper NW/Bethesda area appreciated.

Two Chinese students on their way to summer camp died in the Asiana Airlines crash in San Francisco over the weekend. The New York Times looks at their lives in For Chinese Families, a Journey Cut Short, and With It Their Dreams. As expected, some on Weibo can’t let the dead rest and started ranting about their backgrounds, as the New Yorker notes in The Asiana Crash: China Mourns Its Dead, and Argues About Their Wealth. First Financial has a backgrounder on the booming, and sometimes dirty, of selling US summer camps to Chinese kids in 旧金山空难背后的游学乱象:责任认定界限模糊.

South Korean news presenter  Yoon Kyung-min is now a leading candidate for 2013′s “Jerk of the Year” award. Mr. Yoon said in a broadcast (WSJ) that:

“We just received an update that the two dead are assumed to be Chinese….We can say it is a relief at least for us…”

The fifth meeting of the U.S.-China Strategic & Economic Dialogue (S&ED) begins Wednesday in DC. Chris Johnson and Matthew Goodman of the Center for Strategic and International Studies (CSIS) provide a good overview of what to expect in U.S.-China S&ED: New Players, Familiar Issues.

According to Bloomberg, the  U.S. Downplays Spying Accusations in first meeting of a U.S.- China cybersecurity group :

American officials focused on the hacking of corporate secrets…downplaying their own spying operations exposed by a former government contractor. The Obama administration officials raised accusations yesterday that the Chinese government is responsible for hacking into companies’ computers to steal intellectual property, according to an official at the meeting who asked to remain anonymous due to the sensitive nature of the discussions.

Wang Yang and Yang Jiechi wrote OpEds for the Wall Street Journal and the Washington Post, respectively. Secretarys Kerry and Lew do not appear to have penned OpEds for major Chinese newspapers.

In An Opportunity to Strengthen U.S.-China Ties – WSJ.com Wang Yang writes:

At present, with the global economic recovery remaining unsteady and unbalanced, both nations face challenges as well as opportunities. China is the largest developing country in the world, and the U.S. is the largest developed one. Economic cooperation and trade will benefit our two peoples and contribute to global economic recovery and growth. Building a new model of a major-country relationship based on mutual respect and win-win cooperation is the consensus aim of our two governments and peoples. A bright future awaits China-U.S. relations if we join hands and work together.

In the Washington Post Yang Jiechi writes: U.S., China can forge a more cooperative relationship

This week’s China-U.S. Strategic and Economic Dialogue is an important platform for conducting high-level communication on long-term, strategic and overarching issues. The main task of the upcoming dialogue, the fifth such meeting,is to implement the extensive agreement reached at the presidents’ meeting last month, deepening dialogue and cooperation in various areas, and advancing a new-model major-country relationship. The previous four rounds of dialogue produced more than 340 points of agreement on a range of issues and 11 outcome documents. I believe that, with the joint efforts of both sides, this round will lead to agreement on more issues, produce more concrete outcomes and boost our efforts to open a new chapter in the cross-Pacific cooperation between China and the United States.

The Tom Toles cartoon depicting Xi Jinping picking Barack Obama’s pocket that accompanies Yang’s Oped online is not helpful. Here is a screenshot I posted to Twitter in case it disappears from the article page.

The Sinocism group on LinkedIn is getting active. There is a long discussion on Eric X. Li’s TED talk and yesterday I started a new one about the state of the economy. Your feedback is welcome in Scenario Planning for A China Financial Collapse and its Aftermath:

I do not mean to sound so grim, nor am I convinced that a financial crash is imminent. But the sentiment in and about the country seems to be more negative than I have ever seen it.

Calling for a crash is easy, figuring out what might come afterwards is at least as important, and perhaps more difficult.

Are there any well-reasoned, open source discussions of the political, social, foreign policy and global economic ramifications in the event of a real financial crisis/ crash? Are there any good studies like this that are not open source, or is this a topic that has not been well thought through?

I still assign a low probability to this outcome, but it is higher than zero and the impact would be tremendous. Any thoughts and/or pointers to more discussion on this topic much appreciated.

The timing of the newsletter should return to AM Beijing time over the next few days.

Today’s Links:

THE ESSENTIAL EIGHT

Chinese military seeks ways to improve work styles – Xinhua | English.news.cn During a meeting presided over by Central Military Commission (CMC) Chairman Xi Jinping, CMC members were briefed on the implementation of an “eight-point” regulation that the CPC leadership began promoting in December in order to ban extravagance and formalism. Senior military officers also examined their own conduct to verify whether they have complied with efforts to eliminate bureaucratism and formalism, as well as discussed ways to improve their work styles.

Related: 中央军委召开专题民主生活会 习近平提出5点要求 – 高层动态 – 新华网  新华网北京7月8日电(记者李宣良)中央军委7日至8日召开党的群众路线教育实践活动专题民主生活会,紧紧围绕党在新形势下的强军目标,对照检查贯彻落实中央八项规定精神和军委十项规定情况,联系思想和工作实际,剖析在形式主义、官僚主义、享乐主义和奢靡之风方面存在的问题,积极开展批评和自我批评,研究提出进一步加强作风建设的措施。

Related: 解放军内部全面清查房地产 要求严控土地转让-中新网 中新网7月8日电 据中国军网记者频道消息,经习主席批准,中央军委决定从今年开始,对全军基本建设项目和房地产资源进行普查(以下简称“两项普查”),引起全军上下普遍关注。近日就大家关心的问题,记者采访了两项普查工作领导小组办公室负责人。

Related: China’s army newspaper calls for no fear – Xinhua  The People’s Liberation Army (PLA) Daily, the flagship newspaper of China’s armed forces, carried a commentary Monday calling on troops to fear no sacrifice in peaceful times. The spirit of fighting must be stressed in the army and soldiers should always maintain great revolutionary enthusiasm and high morale in peaceful times, the article said. It added without courage and uprightness troops are doomed to defeat in battle.

Japan Says China Using Force to Try to Change Status Quo – Bloomberg China is trying to change the regional status quo by force based on claims that contradict international law, Japan said in a defense report that the Chinese government said contained “untruthful accusations.” “In cases where China’s interests conflict with those of neighboring countries, including Japan, it has taken measures that have been called high-handed, including trying to change the status quo by force,” the Defense Ministry said in its annual report released today on Japan’s security situation.

Related: 新华国际时评:安倍屡发右翼言论是在玩火-新华国际-新华网  Xinhua: Abe is playing with fire with his repeated “rightist” statements // 新华网北京7月9日电(记者 吴黎明 王守宝)日前,日本首相安倍晋三在“七七事变”这一特殊的日子里再放厥词,提出“历史自豪论”与“实力论”,让世人震惊。安倍作为一国之领袖,不思如何改善中日关系及稳定东亚局势,反而屡屡发表不负责任的谈话,煽风点火,使得日本国内右翼势力和思潮不断膨胀,甚至有失控的危险,引起世人的关注和警惕。

Related: Commentary: July 7 Incident should be more significant for Japan than for China – Xinhua  Today, the July 7 Incident, or the Lugouqiao Incident, should bear greater significance for Japan than for China. Japanese Prime Minister Shinzo Abe, since taking office last December, has repeatedly made remarks seen as attempts to whitewash Japan’s wartime atrocity. He has gone so far as to say that there is no clear definition of aggression and raise questions over Japan’s past war apologies.

Related: 解放军11日将在东海浙江省沿岸进行实弹射击_军事_环球网 PLA live fire test not too far from Diaoyus planned for July 11. A similar one was held July 10, 2012, per the Global Times.

Related: Russia-China joint naval exercise begins in Sea of Japan – The Asahi Shimbun  “If armed forces from China and Russia conduct a (joint) military maneuver in close cooperation in the Sea of Japan, it will have a certain level of threat to Japan, which has a dispute with China over the Diaoyu Islands and one with Russia over the Northern Territories,” Chinese media quoted Rear Adm. Yin Zhuo, director of the Chinese Navy Advisory Committee for Informatization, as saying.

In New Forecasts, Even China Bulls Slow to a Trot – China Real Time Report – WSJ As China’s government embraces the reality of lower growth, even long-time China bulls are pushing downbeat forecasts. When the second-quarter numbers are released later this month, the consensus expectation is for 7.5% growth, which would be the second consecutive quarter of decline. But some economists are now cutting their predictions further ahead, too.

Related: Citi Cuts China GDP Growth Forecast -Caijing Citigroup on Monday cut its economic growth forecast for China, another investment bank betting against growth in the world’s second-biggest economy following Morgan Stanley, UBS and Barclays. The brokerage cut China’s GDP growth to 7.4 percent from 7.6 percent in 2013, and to 7.1 percent from 7.3 percent in 2014, citing downside risks to growth from “policy missteps.”

Related: China second quarter GDP to test reformers’ stomach for weaker growth | Reuters Initial predictions that China’s economy was set for a gentle recovery in 2013 have proven wildly optimistic. After slashing their forecasts, some analysts now believe China could miss its official growth target for the first time ever in 2013. This means China’s mild economic pick-up in the last quarter of 2012 was transient and that growth is likely to reverse into another cooldown in coming months after deteriorating from April through to June.

Related: ‘Likonomics’ policies in China | East Asia Forum is there a better name than this? // Since taking office in mid-March, the Li Keqiang government has taken a different policy path from that of its predecessor. Its key economic policy framework, although yet to be fully detailed, can be summarised as ‘Likonomics’, and appears to consist of three key pillars — no stimulus, deleveraging and structural reform. If so, this implies further downside risks for the economy and markets in the near term. But such policy measures are necessary now for China in order to avoid much more disruptive outcomes in the future.

Related: 中国经济放缓难免 中西部增长不再强劲_财经频道_一财网 兴业银行首席经济学家鲁政委注意到,2013年7月5日,国务院办公厅发布《关于金融支持经济结构调整和转型升级的指导意见》(下称《意见》),从政策部署来看,以往只有每年3月份的《政府工作报告》才会享有如此高规格、专门公开发文明确指定相关职责归属部门来执行的情况。鲁政委猜测,这其实是本届政府全班底形成全面经济金融调控思路后的一次迟来的“经济金融版”《政府工作报告》。《意见》指明了当前中国经济存在的问题,即“结构性矛盾依然突出”,“资金分布不合理”和产能过剩严重。在消化过剩产能上,《意见》提出了不得已还得“淘汰一批”、“压产退市”。鲁政委希望,这次淘汰不再是有关部门“按规模”、“按所有制性质”来人为进行的所谓“淘汰落后产能”运动,而是不论大小与出身让市场竞争来自然完成的淘汰过程。

Why I Became a Chinese Shadow Banker – Bloomberg China’s shadow bankers are easy to demonize…Since 2011, I have run a microcredit firm in Guangzhou, which provides loans to thousands of small-scale entrepreneurs: florists, restaurateurs, fish farmers, vegetable growers, roadside hawkers….Shadow banking is well diversified, and serves a legitimate customer base. By and large, it has much lower leverage than banks or corporate China. Losses at shadow banks are often absorbed by entrepreneurs themselves, without affecting the taxpayer. Even the “wealth management products” offered by regular banks are not to be feared, because they are just deposits, pure and simple, whatever the theoretical distinctions. I buy them myself. //Joe Zhang writes OpEd for Bloomberg, has new book out–Inside China’s Shadow Banking: The Next Subprime Crisis

Related: China Cash Squeeze Seen Creating Vietnam-Size Credit Hole – Bloomberg China’s money-market cash squeeze is likely to reduce credit growth this year by 750 billion yuan ($122 billion), an amount equivalent to the size of Vietnam’s economy, according to a Bloomberg News survey. The number is the median estimate of 15 analysts, whose projections last week ranged from cuts of 20 billion yuan to 3 trillion yuan. The majority of respondents also said they approve of the government’s handling of the credit crunch and said the episode reinforces their expectations for policy reforms such as loosening controls on interest rates.

Related: China Central Bank Tightens Rules on Interbank Bond Trading – Bloomberg Transactions including forward deals and repurchases can’t be reversed or changed once agreed between the two parties, the People’s Bank of China said in a statement posted on its website today. Clearing agencies should not engage in settling trades outside the interbank market, according to the statement. Alterations to bond ownership, such as inheritance that are not related to trading, must be supported by legal documents explaining the nature of the transaction, it said.// 中国人民银行公告〔2013〕第8号-中国人民银行

Related: “金十条”出台 金融促转型立足盘活存量_金融频道_财新网 Caixin English Summary: “Yang Jiacai, assistant chairman of the China Banking Regulatory Commission (CBRC), said on July 5 that 10 measures will be taken to make better use of capital. This came shortly after the State Council announced guiding principles, co-authored by the CBRC, to strengthen the financial industry’s support for structural rebalancing of the economy. Yang said the steps will include investing the country’s foreign exchange reserves in a more innovative way, normalizing the process of credit asset securitization, further opening the financial sector to private investors and improving the control of banks’ wealth management products.” // 国务院办公厅发布《关于金融支持经济结构调整和转型升级的指导意见》,其要义是通过盘活存量,用好增量,以支持经济结构调整和转型升级

US Off’l: China Cenbank Liquidity Restraint Part of Reform | MNI The two-day Strategic Economic Dialogue begins Wednesday – the latest in a series of five such comprehensive discussions and it will be preceded Tuesday by separate security discussions. The Dialogue, as usual, has the U.S. secretaries of State and Treasury facing their Chinese counterparts, all backed by small armies of lesser officials. Three U.S. officials briefed reporters late Monday on what to expect….”On the financial system, there’s been a very rapid growth in credit this year (in China) including credit outside the formal banking system that carries certain risks,” an official said. ”I think the actions taken by the PBSC (Politburo Standing Committee) to delay providing liquidity in the interbank markets in the last few weeks was a signal to market participants that they needed to have greater discipline and greater prudence in their lending decisions, their credit extension decisions,” he said. ”I think that’s part of a move toward a more efficient, more market based financial system,” the U.S. official said.

Pollution Leads to Drop in Life Span in Northern China, Study Finds – NYTimes.com Southern Chinese on average have lived at least five years longer than their northern counterparts in recent decades because of the destructive health effects of pollution from the widespread use of coal in the north, according to a study released Monday by a prominent American science journal.

Related: Evidence on the impact of sustained exposure to air pollution on life expectancy from China’s Huai River policy This paper’s findings suggest that an arbitrary Chinese policy that greatly increases total suspended particulates (TSPs) air pollution is causing the 500 million residents of Northern China to lose more than 2.5 billion life years of life expectancy. The quasi-experimental empirical approach is based on China’s Huai River policy, which provided free winter heating via the provision of coal for boilers in cities north of the Huai River but denied heat to the south.

Crucial Backing for ‘Bank’ of Alibaba –  WSJ On Monday, the Shenzhen Stock Exchange released a statement confirming that Alibaba can now tap investors directly to finance its loans to small and medium enterprises that use its e-commerce platform. The approval will likely help Alibaba’s loan program grow and defray risk to investors willing to invest in a product comprised of small Alibaba loans made according to its massive data records of the behavior of businesses that use its site to do business. Within the statement, the Shenzhen Stock Exchange linked the approval directly to a June meeting of China’s cabinet, known as the State Council, that called for greater access to credit for small and medium enterprises

Related: Alibaba Sets Sights on Mobile Users – WSJ.com Chief Executive Jonathan Lu, in his first media interview since he took the helm in May, said that the company has yet to decide on when and where it will list its shares. “We are ready, and we can do an IPO any time,” said Mr. Lu, who replaced Alibaba founder Jack Ma as CEO. Both Hong Kong and New York are “suitable” locations for the listing, he said, though Alibaba is more familiar with the procedures in Hong Kong, where its Alibaba.com unit used to be listed. When it comes to completing the timetable, “the button will be pressed by Jack,” Mr. Lu said.

Failing Trust in China’s Courts: Is Wang Shujin the Last Straw? – TLN What makes Wang’s case unique, however, is that he insists his guilt in a fourth murder, but prosecutors have sought to invalidate his confession and affirm his innocence. Scholars say Wang’s trial will test the impartiality and integrity of China’s judicial system, as well as the public confidence in the judiciary. The verdict, nearly 8 years in coming, has been deferred once again. The crime to which Wang Shujin has now confessed was thought solved long ago. Another man, Nie Shubin, was executed for raping and murdering the woman in a corn field in Shijiazhuang City, Hebei Province. Wang Shujin has claimed he was the real murderer and is appealing his death sentence, asking for leniency owing to his confession to a fourth murder case.

Chinese universities alarmed by rise of proselytization on campus – CHINA – Frontpage – Globaltimes.cn After concluding a two-year study on college students’ religious beliefs, Marxist scholars warned against the rapid growth of Christianity and proselytization disguised as cultural studies on campuses across China. Such warnings were met with objections as many people believe there is nothing wrong with college students discovering religion. At the heart of the debate is to what extent and how religion should be discussed and taught on campus.

 

BUSINESS AND ECONOMY

China Faltering Demand Underscored as Producer Prices Sink – Bloomberg The lowest first-half inflation since the financial crisis in 2009 and prolonged factory-gate deflation reflect a slowdown and overcapacity that leave the government at risk of missing its annual growth target for the first time since 1998. Premier Li Keqiang has indicated he’s reluctant to introduce short-term stimulus, instead focusing on spurring longer-term expansion by restructuring the economy and curbing the state’s role.

Foreign Capital Flows out of China on Expectations of End of QE -Caijing China has seen a monthly net capital outflow in 16 of the last 18 weeks, according to fund flow data provider EPER. EPER figures showed foreign capital registered a net outflow of $834million in the first five trading days in June, the largest since January, 2008.

媒体称中国新一轮城镇化规划有望在年内出台-时政频道-新华网 Urbanization now expected to be released by the end of the year? // 原标题:新型城镇化诸多难题待解 以人为本重质量成共识…中国新一轮城镇化规划正在制定中,并有望在年内出台。面对当前中国城乡二元结构的发展现状,新型城镇化进程如何化解农民进城困境,消除“城市病”干扰,仍有诸多难题待解。

【视频】“人的城镇化”要花多少钱_政经频道_财新网要 实现1.6亿农民工的市民化,政府需要新增支出1.8万亿元  Caixin video on what to expect with urbanization plans, how much will cost

CSRC Opens Chinese Audit Papers to the U.S. for 1st Time-Caijing just in time for SEC hearing and SED in DC // The China Securities Regulatory Commission has finished arrangements of auditing working papers of a Chinese company, and is ready to transfer them to U.S. Securities and Exchange Commission, the state-run Shanghai Securities News reported on Tuesday. The CSRC is also preparing for documents of some Chinese companies to U.S. Public Company Accounting Oversight Board, the paper said.

U.S. SEC says audit firms hinder accounting fraud probes | Reuters U.S. federal regulators tried to persuade a judge on Monday to sanction the Chinese arms of the world’s top five accounting firms, saying their refusal to hand over audit work papers has hindered investigations into fraud at U.S.-listed Chinese firms.

金融支持新兴产业组合政策将出 新华社——经济参考网 据悉,新兴产业金融支持政策包括:建立一个部委联席工作机制,构建一个政策支持体系。科技部人士告诉《经济参考报》记者,目前国家发改委、财政部、证监会、银监会、保监会、科技部、国家税务总局等七部门已建立部委联席机制,围绕构建新兴产业金融支持政策体系进行沟通和协商,并形成相关政策和措施。

多部委“釜底抽薪”去过剩产能 新华社——经济参考网 Economic Information says multiple ministries finalizing “combination plan” to deal with overcapacity in certain industries…implementation wil be exceedingly painful and difficult // 《经济参考报》记者获悉,多个部委近阶段将完善“组合政策”,加强银行审贷管理、实施差别电价、能源消耗总量限制、问责制、新老产能挂钩等对企业投资和生产的约束作用,抑制产能过剩行业盲目扩张。

Rongsheng Talks With Chinese Cities to Seek Financial Aid – Bloomberg The country’s largest shipyard outside state control is in discussions with the cities of Rugao and Nantong and some ministry-level departments related to the shipping industry, Rongsheng spokesman William Li said by phone today. The company said July 5 it was seeking financial assistance from the government after a plunge in orders forced it to reduce production and “restructure” its workforce. Li declined to elaborate.

Ping An of China Said to Buy Lloyd’s of London Building – Bloomberg A Chinese insurer is purchasing the home of the Lloyd’s insurance market for 260 million pounds ($388 million), London-based property broker Savills Plc (SVS) said in a statement today without naming the buyer. The deal requires regulatory approval, according to one of the people. Both asked not to be identified because the purchaser hasn’t publicly been named.

China’s Ordos Struggles to Repay Debt: Xinhua Magazine – Bloomberg Some district governments of Ordos, Inner Mongolia, had to borrow money from companies to pay salaries of municipal employees, Economy & Nation Weekly said in a July 5 report on its website. Ordos local-government entities have amassed 240 billion yuan ($39 billion) of debt, while the city had 37.5 billion yuan of revenue last year, the publication said without specifying annual interest costs. // “债城”鄂尔多斯_极度调查_财经国家新闻网

Steel: An inferno of unprofitability | The Economist Steelmaking scrapes by on microscopic margins that make even airlines look like paragons of profitability. This is most apparent in Europe, whose steelmakers are the most beleaguered. Yet China, where the industry is booming—it has enjoyed almost all of the global production growth in the past decade—faces many of the same problems.

Due diligence in China: Art, science, and self-defense | McKinsey & Company It’s not often that the credibility of an entire class of companies is called into question at once. The aggregate market capitalization of US-listed Chinese companies1 fell in 2011 and 2012 by 72 percent—and around one in five was delisted2 —even as the Nasdaq rose by 12 percent (exhibit). Nor is delisting of Chinese companies purely a US phenomenon: since 2008, around one in ten Chinese companies listed in Singapore has also been delisted or suspended.

The Good, The Bad and The Ugly in Chengdu – Chengdu Living w some nice video

Princeling-linked Boyu Capital said to prepare $1.5 bln fund | Reuters Private equity firm Boyu Capital, whose partners include former TPG executive Mary Ma and the grandson of former China president Jiang Zemin, is planning to raise its second fund and is seeking $1.5 billion, according to people familiar with the matter. The firm’s first fund raised $1 billion in 2011, receiving backing from large Asian investors such as Singapore state fund Temasek Holdings and Li Ka-shing, Asia’s wealthiest person.

Returning students: Plight of the sea turtles | The Economist Even as hordes of less employable expatriates return, the brightest remain abroad. A study funded by America’s National Science Foundation found that 92% of Chinese with American PhDs still lived in that country five years after graduation. For Indians, the figure was 81%, for South Koreans 41% and for Mexicans 32%.

Chinese Cash Squeeze Causes Auto Dealer Panic, Group Says – Bloomberg “The cash crunch has led to psychological panic among dealers over access to financing,” Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said in a telephone interview from Beijing today. “So far, it hasn’t caused any real damage to the industry, but if the cash crunch continues, the impact will spread to auto dealers.” About 28 percent of dealers surveyed said they felt “anxious” about their funds last month, up from 11 percent in May, the trade body said in a statement today. Only 21 percent of respondents said they had ease of access to financing in June, down 27 percentage points from a month earlier, the survey showed.

Beijing Cuts Govt. Spending by 5Pct as Fiscal Revenue Growth Slows-Caijing Chinese officials have been ordered to be frugal with fiscal revenue growing at a slower pace in the year, echoing a call from the new leadership led by president Xi Jinping to clamp down on lavish spending including banqueting and gift-giving. The Ministry of Finance has issued a notice recently, ordering all levels of the central government to cut their “regular” expenditure for 2013 by 5 percent, according to the state-run Xinhua News Agency.

Department Stores Shop for New Sales Model – Caixin The department store industry’s established business model has been challenged by shopping malls and the growth of e-commerce, forcing the stores to seek other ways to survive. The model that China’s department stores have relied on is known in the industry as “joint-operation pattern,” which means the stores provide space and management services to manufacturers for a fee. Department stores also collect a percentage of the manufacturers’ total monthly sales.

 

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POLITICS AND LAW

十八届三中全会报告开始起草 涉财税金融等改革_网易财经 aastocks says 3rd plenum draft underway in Yuquanshan in Western Beijing , big focus on financial/finance reform, minister/vice minister level officials working on the draft// 大智慧阿思达克通讯社7月8日讯,消息人士向大智慧通讯社透露,十八届三中全会报告初稿正在北京西郊的玉泉山起草,参与的官员均为部长和常务副部长。

Liu Zhijun given suspended death penalty for bribery, power abuse – Xinhua China’s former railways minister Liu Zhijun was sentenced to death with a two-year reprieve here on Monday for bribery and abuse of power. As well as the suspended death sentence, the Beijing No. 2 Intermediate People’s Court deprived the 60-year-old of his political rights for life and confiscated all his personal property for taking bribes. Liu was also sentenced to 10 years in jail for abuse of power, according to the court verdict.

Commentary: Ex-rail minister’s trial shows China’s anti-corruption resolve – Xinhua  China’s former railways minister Liu Zhijun was given a suspended death penalty on Monday for bribery and abuse of power, making him the highest-ranking official sentenced for such offenses since the country’s new leaders took office. The sentencing shows on one hand the judicial system and top leaders’ resolve to target both high-ranking “tigers” and low-ranking “flies” in its anti-corruption efforts, and on the other hand the judicial spirit of everyone is equal before the law.

Chinese netizens unhappy about Liu Zhijun’s suspended death sentence | Offbeat China Netizens wanted a straight death penalty for Liu, instead of the current death penalty with reprieve, because, as many netizens pointed out, those sentenced to suspended death in China usually end up in medical parole, which means neither death nor life in jail. As one netizen 宁中一 explained: “After some time, suspended death will become life sentence, then life to a few years, then a few years to medical parole.”

高官腐败现影子化:通过中间人代为斡旋勾兑|腐败|官员|中间人_新浪新闻 on the rise of “Shadow Corruption”…officials who, like the banks who profit from shadow banking, keep all their corruption off the books, making it hard to catch them. The Liu Zhijun case gave a glimpse of some of this // 首先,当前一些领域的腐败形式越来越隐蔽,除了此前中纪委重点关注的会员卡腐败外,还有大量的腐败期权化、影子化,正在给反腐工作带来前所未有的挑战。最近不少被认定贪污受贿的案件就表明,官员贪腐已经不再是直接一手交钱一手交“货”,更多是通过中间人代为斡旋勾兑,甚至官员本人根本就不需要参与其中,而所获得的各种好处也以借贷或者劳务费等“合法”名义存入第三方的账户。这种做法类似于逃避信贷监管的“影子银行”,我们也可以称之为“影子腐败”,它在高级官员腐败案件中出现的频率越来越高。

Liu Qibao: Some Points of Understanding concerning the Theoretical Structure of Socialism with Chinese Characteristics. | China Copyright and Media in July 8 People’s Daily// 刘奇葆:关于中国特色社会主义理论体系的几点认识–理论–人民网

[视频]中央党的群众路线教育实践活动领导小组印发《关于做好第一批教育实践活动学习教育、听取意见环节工作的通知》_新闻频道_央视网

官员微博已经走进死胡同 | 木然的共识网·思想者博客 曾几何时,官员微博进入人们的视野,让人耳目一新,人们善良地认为,官员终于可以放下架子,可以以微博的方式,以亲民的样式,与网民互动。但是随着微博的进一步观察,人们就会发现,官员的官本位思维,官员的政绩思维,官员的知识面狭隘,官员的居高临下的态势,官员的形式主义在微博的平台上获得了新的表达。人们对官员微博的热情,官员对于微博的热情都在下降。具体分析如下:

China vows to step up fight against Dalai Lama as shootings reported | Reuters China’s top official in charge of religious groups and ethnic minorities vowed on Tuesday to step up the fight against exiled Tibetan spiritual leader the Dalai Lama, as a rights group reported police shootings of monks marking his birthday. The comments by Yu Zhengsheng, number four in the ruling Communist Party’s hierarchy, appear aimed at thwarting speculation that China’s new leadership could take a softer line on the Dalai Lama.

Liberal Peking University professor threatened with expulsion | South China Morning Post A renowned professor has confirmed online rumours that his peers will decide whether he will be expelled from China’s most eminent university after he made a series of remarks in favour of free speech and constitutional governance. Economics professor Xia Yeliang of Peking University was told by his department that his fate would be decided by a faculty vote, he told the South China Morning Post on Monday.

Working overtime for stability – China Media Project A recent letter of resignation posted to the internet by the deputy head of a township-level government in Sichuan now has many wondering about the immense pressures placed on the daily work of grassroots government officials by the stability preservation mandate. On July 5, The Beijing News published an interview with the deputy township leader, who estimated that a third of his work time was taken up by stability preservation:

中央党校力挺胡耀邦 康生被骂迫害狂_中国_多维新闻网  Duowei on Study Times running 1977 Hu Yaobang speeches about exposing Kang Sheng & summing up the Cultural Revolution. Any chance Zhou Yongkang might find this worrying?【多维新闻】中共中央党校下属的《学习时报》最新一期刊登了《胡耀邦关于支持揭露康生的讲话》,并预备分两次刊出。1977年9月3日,胡耀邦在中央党校整风会议上作了支持揭露康生的讲话;同年12月2日,又在中央党校党委会上作了关于以实践标准检验总结十年“文革”的讲话。胡耀邦的这两次讲话,被视作解放思想、拨乱反正的历史文献。《学习时报》特约请了两次会议的亲历者沈宝祥教授再现了这两大历史场景。// 学习时报_2013-07-08_思想理论_胡耀邦关于支持揭露康生的讲话

The Claws of the Dragon: Kang Sheng – The Evil Genius Behind Mao – And His Legacy of Terror in People’s China: John Byron, Robert Pack: Amazon interesting book, will we ever learn who “John Byron” really is?

Chinese Journalist Is Released on Bail – NYTimes.com The journalist, Du Bin, said in an interview hours after his release that he could still face trial for “picking quarrels and making trouble,” accusations he said stemmed from his recent film about a Chinese labor camp and a book about the crackdown on Tiananmen Square protesters. The charges against him carry a maximum five-year prison term.

李天一案或在国庆节前做出一审判决_网易新闻中心 Li Tianyi may go on trial for an alleged gang rape before October 1. All these leaks suggesting lenient treatment, which enrage netizens and force the Beijing authorities to deny he is receiving special treatment, may be preemptive strikes to ensure that every possible escape route for Li is blocked before his parents are able to purchase it, or so believe some of my more conspiratorially minded Beijing friends // 晨报讯 备受关注的李双江之子李某涉嫌强奸罪一案,已有阶段性进展。昨天,北京市人民检察院对外通报,李某等人涉嫌强奸案已被提起公诉,检方同时确认了李某“系轮奸”。这也意味着,李某的案件有望在3个月内做出判决。

Has Xi’s graft crackdown run out of steam? | South China Morning Post  President Xi Jinping has consulted retired party leaders on his anti-corruption and austerity campaign, the Communist Party’s official newspaper reported on Monday – a move some analysts believe is a sign that the current leadership lacks the confidence or political will to ring the changes of real political reform. //we’ll see

 

FOREIGN AND DEFENSE AFFAIRS

Paulson Institute Paper Calling for US-China Bilateral Investment Treaty (PDF) ”The authors suggest that reviving and rapidly completing negotiation of a BIT will be an important step in creating a sound foundation for a 21st century economic agenda between the United States and China. They argue that a rules-based treaty between the United States and China will bring tangible benefits to both countries, including creating a more stable environment for attracting Chinese investment into the United States and a level competitive landscape for US investors in China. The two countries have different models and approaches toward such a treaty, but the paper suggests that some of these differences can be overcome through creative negotiation.”

Asia Sentinel – Vietnam: Playing with fire Follow America and save the country; follow China and save the party. This saying, heard everywhere in Vietnam, distills the geopolitical dilemma facing its ruling Communist Party.

A Waiting Game – The Code of Conduct for the South China Sea | East by Southeast On June 30, 2013, following the China-ASEAN Foreign Ministers’ Meeting held in Bandar Seri Begawan, capital of Brunei, China released a joint-statement with ASEAN in a post-meeting press conference, indicating that they have agreed to hold “official consultations” on a proposed Code of Conduct (CoC) to govern South China Sea “naval actions”. All parties agreed to move forward with consultations in upcoming meetings to be held in China during September later this year. Misleadingly or mistakenly billed as a significant paradigm shift by many English language news outlets, this development should not have come as a surprise to anyone.

China’s New Jet, Radar Complicate US Posture | Defense News | defensenews.com China’s increasing military musculature continues to crush the margins of how far the US military can conduct operations near the mainland, experts say. Through the purchase of Russian-made equipment, China is attempting to break beyond the current air defense range of 250 kilometers in what US experts refer to as China’s anti-access/area-denial strategy. China plans to procure two new Russian weapon systems that will extend the range of its air defense strike capability to 400 kilometers. This would place all of Taiwan within the scope of China’s air defense network and endanger the Japanese-controlled Senkaku Islands, which China also claims.

Beijing unveils fresh campaign to promote ‘Chinese dream’ abroad | South China Morning Post In a lengthy People’s Daily article, Liu Qibao called for more resources to be directed towards sharing the idea of the Chinese dream in the media. “We should take a proactive approach to spreading and interpreting the Chinese dream, to help the international community better understand it,” he said.

Gordon G. Chang :: Gatestone Institute Distinguished Senior Fellow, Gatestone Institute //who funds the gatestone institute?

Canada Loses Luster as Destination for Chinese Fugitives’ Illicit Cash – China Real Time Report – WSJ Canada became the first country to reach a deal with China to share forfeited assets in an effort to target international organized crime, according to the official Xinhua News Agency. Once the pact is signed, one country will be able to get money back if a fugitive transfers illegal assets to the other, according to Xinhua.

China’s rising stature in global finance | McKinsey & Company The country’s financial markets are deepening, foreign investment keeps pouring in, and capital is flowing outward. What would it take for China to assume a new role as world financier?

【网络对话】专家纵论“棱镜门”:国际社会如何构建网络治理权 – 新闻中心 – 新华网 “棱镜门”之后,国际社会应该如何构建互联网国际治理权和规则制定权,如何建立公开透明的体系?又该如何平衡网络安全和公民个人信息隐私?多位互联网和通信领域、国际关系研究方面的专家就此发表了他们的看法。

工信部总工程师谈中国网络安全:现状不容乐观–时政–人民网  人民网北京7月8日电 (记者 常红)美国前情报人员斯诺登日前爆料称,美国国家安全局曾入侵中国电讯及清华大学的主干网络。据互联网协会网站消息,工业和信息化部总工程师张峰7月4日出席2013年中国计算机网络安全年会时表示,我国互联网持续快速发展,但同时网络安全的现状不容乐观。一旦铁路、银行、电力等重要行业领域的系统数据和运行安全受到威胁,将带来不可估量的损失,甚至会影响国家安全和社会稳定。

Agreements with private companies protect U.S. access to cables’ data for surveillance – The Washington Post The Hong Kong company soon withdrew from the Global Crossing deal, under pressure from Team Telecom, which was worried that the Chinese government might gain access to U.S. surveillance requests and infrastructure, according to people familiar with the negotiations. Singapore Technologies Telemedia eventually agreed to a slate of concessions, including allowing half of the board of directors of a new subsidiary managing the undersea cable network to consist of American citizens with security clearances. They would oversee a head of network operations, a head of global security, a general counsel and a human resources officer — all of whom also would be U.S. citizens with security clearances.

 

TECH AND MEDIA

Chinese E-Books Platform Gets $110 Million in Funding From Goldman Sachs and Temasek-TechInAsia after failing several times to get a US IPO done. Down round? // Shanda Cloudary, the e-book, e-reader, and publishing division of Chinese web giant Shanda (formerly NASDAQ:SNDA), has raised $110 million in funds from Goldman Sachs and Singapore investment company, Temasek.

John Woo’s ‘Chinese Titanic’ Begins Shooting in Beijing – The Hollywood Reporter

Internet Video Companies Go Mobile in Search of Profit – Caixin Indeed, the online video market is changing as an increasing number of users move from PCs to mobile devices to enjoy TV shows, movies and user-made clips any time they like. This change in user habits has led companies to see new business and profit models, and created new challenges for online video service providers.

 

SOCIETY, ART, SPORTS, CULTURE AND HISTORY

Liang Becomes R&A’s First Ambassador in China – NYTimes.com Liang Wenchong has been appointed the Royal and Ancient’s (R&A) first ambassador for golf in China, the rulemaking organization said on Tuesday.

For once, Ai Weiwei should be sorry – Salon.com We’ve been through this before. I’m a HUGE Ai Weiwei fan….And then the music started. Golden art god, interrupted. I was originally excited about the prospect of Ai Weiwei doing a music project, especially when I heard that he was going to exploit the genre of Heavy Metal, something close to my heart. I immediately had thoughts of Ai spewing rage on top of a bed of rancid, righteous riffage. Then, the first song from the album, “Dumbass,” appeared. Terror, floating in a small pool of tepid, slightly spoiled milk. As I mentioned in the earlier Hyperallergic post, the video and the song were derivative and lame. Derivative is fine, but there is no greater crime in Metal than being lame.

 

ENERGY, ENVIRONMENT, SCIENCE AND HEALTH

Legislation urged in China to guarantee nuclear security – Xinhua  Experts on Monday called for creating new legislation regarding the use of nuclear energy in order to standardize its use and guarantee security. “Radioactive waste disposal has become a prominent problem with the development of nuclear energy and technology,” said Pan Ziqiang, an expert on nuclear security from the Chinese Academy of Engineering.

Undetected river pollution sparks criticism– China Daily The thallium- and cadmium-contaminated water in the Hejiang River in Hezhou, the Guangxi Zhuang autonomous region, will keep about 30,000 people downstream in Fengkai county, Guangdong province, from using river water for almost three weeks and put tens of millions more people on alert in the downstream Pearl River Delta. The Hezhou government closed 112 illegal metal mines along the Maweihe River, a branch of the Hejiang, on Saturday. Seventy-nine of the closed mines had been verified as pollution sources by 9 am on Sunday. Their industrial waste was carried to the river by floods from recent torrential rains.

 

FOOD AND TRAVEL

List of top ten Chinese noodles released[1]|chinadaily.com.cn The first Culture of Chinese Noodles Festival has released its list of the top ten most popular Chinese noodles. The list covers famed dishes from all across China, including Wuhan hot noodles, Beijing noodles, Shanxi sliced noodles, Henan Xiaoji stewed noodles, Lanzhou ramen, Hangzhou Pian Er Chuan, Kunshan Aozao noodles, Zhenjiang pot cover noodles, Sichuan spicy dandan noodles and Jilin Yanji cold noodles. The big surprise was that Shaanxi failed to get a single dish on the list

 

BEIJING

北京明将迎最强暴雨 强度或接近“7•21” 全国雨情预测 – 新华网移动版 heavy rains predicted for Beijing, may be worse than the 7.21.13 storm that caused dozens of deaths and massive flooding 

北京政府叫停奥数与升学挂钩政策失效_政经频道_财新网 数班悄然复课,若干“名校”小升初入学继续以奥数为选拔标准 education system so corrupt, Beijing can’t enforce rules against Olympic Math, teachers and schools making too much from kickbacks

北京旧城改造每疏散1万人需安置费超15亿元–时政–人民网   新京报讯 (记者郭少峰)北京旧城保护改造每疏散1万人,平均安置费用达15亿元以上。北京市规划委员会和北京市城市发展研究院日前发布了一份《北京历史文化名城保护评价体系研究报告》,按照现行政策和货币补偿标准粗略计算,得出上述数字。

 

JOBS AND EVENTS

Sinocism is looking for interns to help improve the “Tech and Media” and “Energy, Environment, Science and Health” sections. If you are interested send me an email (bill at sinocism dot com). Fluency in reading Chinese is required.

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