China Readings for September 23rd

  • DST, Silver Lake and Yunfeng Lead $1.6B Tender Offer at Alibaba Group – Kara Swisher – News – AllThingsD – Silicon Valley’s Silver Lake and DST Global of Russia, as well as Chinese private equity firm Yunfeng Capital, are leading a $1.6 billion tender offer for privately held employee and shareholder stock of China’s Alibaba Group, according to sources close to the situation.
    Yunfeng, by the way, was co-founded by Alibaba Chairman and CEO Jack Ma, as well as other prominent Chinese entrepreneurs.
    The deal, which has been discussed for some time, was signed earlier today. To get around persistent foreign ownership issues in China, sources said, DST and Silver Lake are ceding voting control of their stakes to Alibaba management.
  • Cambridge Journals Online – Abstract – The Political Economy of Governing ISPs in China: Perspectives of Net Neutrality and Vertical Integration – Internet service providers (ISPs) have played an important role in China's internet regulation regime. This article illustrates how ISPs are governed to serve the government's regulatory goals. This involves examining some of the most extraordinary and profound insights concerning internet governance: the theories of the layers principle, the end-to-end argument and the generative internet. Chinese ISPs have been dependent rather than neutral regulatory intermediaries of the government. Moreover, in addition to telecommunication carriers, the radio and television networks affiliated to the State Administration for Radio, Film and Television (SARFT) are to become a new type of ISP that is capable of choking the free spirit of the internet, as recently demonstrated by the far-reaching policy of “network convergence.” This article argues that the policy has the potential to drastically alter the structure and ecology of the internet in China.
  • Han Han discusses a load of sensitive topics « Jeremy Goldkorn – This interview with Chinese blogger, novelist and car racer Han Han. He answers questions about censorship, the failed Jasmine Revolution in China and social media in China.Well worth a watch.
  • Don’t Expect A China Announcement At Facebook f8 | DigiCha – China’s cybercrats look prescient, have proven their worth repeatedly to the leadership and are strengthening the Internet regulatory regime. It seems impossible for Facebook to ever be approved in China under the existing political structure.

    Mark Zuckerberg’s goal of connecting the entire world is great. Unfortunately it is currently unattainable, and Zuckerberg may have to settle for the world ex China.

  • China suffering from ‘Confucian confusion’ – Telegraph – "The Chinese blogosphere is humorous and ephemeral, a bit like the western 1960s nudist performance pieces or the act of streaking in public," she writes in People's Pornography: Sex and Surveillance on the Chinese internet, "Bloggers make bold statements against conservative morality and have to deal with hostility from the agents of surveillance and censorship." Despite the official censoriousness towards pornography, which is illegal in China in all its forms, Prof. Jacobs says that more and more material is available, with increasing numbers of Chinese daring to make 'home movies' and post them online.
    To show how available such material is, she recalled visiting a Starbucks café in the southern city of Shenzhen and within five minutes of logging on to the café's open Wi-Fi internet, had found "a wide range of hard-core and DIY images" using China's most popular search engine Baidu.
  • Chinese Property Developers Plunge in Hong Kong on Trust Financing Report – Bloomberg – Chinese developers plunged in Hong Kong trading after Reuters said the nation’s banking regulator told trust companies to report dealings with Greentown China Holdings Ltd. (3900), sparking concerns of a funding squeeze.
  • Traders prepare for falling renminbi | beyondbrics | News and views on emerging markets from the Financial Times – FT.com – The renminbi NDF market – essentially a 12-month forward contract on the Chinese currency – is, as of today, pricing in depreciation.

    While the NDF market is not as reliable an indicator of future gains as it used to be, the market now appears to be contemplating a return to the de facto dollar peg of 2008, or an outright fall.

  • A “secret” official resume sparks anger – China Media Project – The latest scandal over suspected corruption or favoritism in official government appointments in China erupted earlier this week surrounding 29-year-old Yan Ning (闫宁), who is deputy Party secretary of Hebei’s Guantao County (馆陶县) and expected to formally become its Party chief later this year. According to media reports, Yan’s promotion would make him the youngest county Party chief in history.

    But as the Southern Metropolis Daily points out in its lead editorial today, the issue here isn’t so much about age or qualifications as it is about more open government affairs. When Chinese media followed up on the Yan Ning story they were told by government employees that “the chief’s resume is a secret, and it’s not convenient to reveal it to the outside.”

  • The Curious Case Of The Vanishing Chinese City : NPR – Imagine a city like Los Angeles disappearing from the map completely. That's exactly what happened to Chaohu, a city in eastern China's Anhui province with a similar population — about 4 million. The people have remained, but the city has vanished in an administrative sleight of hand.

    That was the Kafkaesque reality for Chaohu's inhabitants, who went to bed one night and woke up the morning of Aug. 22 to find out that their city no longer existed. For many, their first inkling that something had changed was from the local news.

    "Anhui province is today announcing the cancellation of Chaohu city," the broadcast said. It went on to explain that the city once known as Chaohu had been divided into three. The nearby cities of Hefei, Wuhu and Ma'anshan each absorbed a piece of territory. The broadcast confusingly described the move as "an inherent need at a certain level of economic growth."

  • Trump to Expand Brand With China, Japan Projects After Manila, Seoul Entry – Bloomberg – sign of hairy top?//

    Donald J. Trump, the U.S. billionaire real-estate developer, is planning to put his name on projects in China and Japan as he expands his brand in Asia after developments for South Korea, the Philippines and India.
    China’s 300 million middle-class population and their aspirations for brands and lifestyles make it an attractive market, said Eric Trump, executive vice president of development and acquisitions at Trump Organization. Japan is similar, he said, adding that the company is in talks with various partners in both markets.

    “Asia is very powerful, it’s booming and it really values brands and lifestyles associated with brands,” Trump, who is a son of Donald Trump, said in a phone interview from New York on Sept. 20. “We had some very successful projects in the Korean market which made us start looking at Asia as a whole.”

  • LumDimSum » Cupcake Eating Competition: Colibri’s 1 Year Party – muffins with icing. I am biased of course; CCSweets makes the best cupcakes and cakes in Beijing
  • CapitalVue News: Chinese Banks Face Crisis As Deposits Plunge – ATMs at my Beijing CBD China Merchant's ATM were out of cash Monday//

    Deposits in the big four state-owned banks, including Industrial and Commercial Bank of China (ICBC) (601398, 1398.HK), Bank of China (601988, 3988.HK), Agricultural Bank of China (601288, 1288.HK) and China Construction Bank (601939, 0939.HK) fell by about 420 billion yuan during the first 15 days of September from end August, reports China Securities Journal.

    The huge drop in deposits led to a significant decline in new loan growth by the big four banks during this period, with only 87 billion yuan of new loans extended. 

  • U.S. selling JDAM guided bombs to Taiwan – Washington Times – The arms notification calls for retrofitting 145 F-16 A/B jets with a high-tech radar called the Active Electronically Scanned Array (AESA), GPS navigation, electronic warfare countermeasures pods, and other electronic warfare gear.

    Defense officials said, however, the key elements of the package are offers of 140 AIM-9X Sidewinder air-to-air missiles and the 96 Joint Direct Attack Munitions, or JDAM, laser-guided bomb kits, that turn 500-pound bombs into precision-strike weapons.

    Another significant element of the package is the announcement that the Pentagon will conduct a study for upgrading the F-16s in the future with new, more powerful engines.

  • Chinese nationalism and where it might lead | East Asia Forum – How the Chinese government decides to respond to domestic nationalism has implications not only for relations between the government and the Chinese people, but also for relations between China and other states. There are debates about whether Chinese nationalism poses a threat to world order or to individual countries. Whether Chinese nationalism constitutes a threat is uncertain. It depends upon a number of conditions and their interaction in particular situations. The traditional metaphor of the ruler being like a boat and the people like the water can be used to describe five possible future scenarios in which Chinese nationalism is likely to impact on Chinese foreign policy.
  • Chinese Bail-Out of Europe Could Be Good News for Free Trade – Max Fisher – International – The Atlantic – Still, it's more difficult to imagine that this would liberalize China's domestic governance; for now at least, the country is likely to continue making dissidents vanish, tightly managing speech, and mistreating poor rural communities regardless of how much Italian debt it holds. The question of whether a country like China will naturally become more democratic as it embraces the free market is still largely one of theoretical debate. But, when it comes to the global economy at least, it might be time for the West to start looking at China as a natural ally rather than a competitor.
  • TKACIK: White House bickering and Taiwan’s F-16s – Washington Times – The “highly personal, often bitter animosity existing between senior White House officials and senior Asia players at State” is how one of Washington’s nonpareil foreign-policy insider newsletters, Chris Nelson’s eponymous NelsonReport, describes the forces at the bottom of the Obama administration’s latest national security crisis: whether to sell 66 new F-16 fighters to Taiwan to replace unsafe Vietnam War-era F-5 jets.

    Taiwan has hundreds of supporters on Capitol Hill, and two dozen House members made a point of greeting a visiting Taiwanese presidential candidate, Tsai Ing-wen, at a reception in the Rayburn House Office Building on Sept. 14. Several senators also made the trek across Capitol Hill to show their support, including the venerable Daniel K. Inouye, Hawaii Democrat, chairman of the Senate Defense appropriations subcommittee, an unmistakable signal of broad bipartisan support for U.S. defense sales to Taiwan, especially the new F-16s.

  • Commentary: Arms sales to Taiwan causes multiple damage to China-U.S. relations – BEIJING, Sept. 21 (Xinhua) — An Obama administration plan for new arms sales to Taiwan is related to China's core interests and the overall China-U.S. relationship. The deal, pushed by some U.S. lawmakers, will inevitably cause multiple damage to China-U.S. ties.

    Reuters reported that a U.S. official involved in Taiwan policy said the White House was set to notify Congress formally about details of a plan to supply state-of-the-art weapons to Taiwan, adding that the move was an "apparent compromise" to China.

    There are also reports that some U.S. lawmakers remain dissatisfied with the deal, saying the U.S. should fully meet the arms request from Taiwan, a "strong ally and long-time friend."

    What a wrong viewpoint from a wrong perspective.

  • Chinese official confident atheist Communist Party can "unite God’s followers" – BEIJING, Sept. 21 (Xinhua) — A former top religious affairs official said Wednesday that he is confident that the atheist Communist Party of China (CPC) can unite people with different religious beliefs under the party's policies that dictate freedom of worship.

    Ye Xiaowen, former head of the State Administration of Religious Affairs, said at a Beijing human rights forum that foreigners who are skeptical about China's human rights record often ask him questions regarding the feasibility of uniting people with different religious beliefs under an atheist ruling party.

    Ye, who is now the vice chairman of the China Society for Human Rights Studies, said that atheists and religious believers in China share the same political and economic interests.

    "As long as we are united politically and have mutual respect regarding spiritual beliefs, religion can play a positive role in social harmony," Ye said.

  • Asia’s Millionaires Form Family Offices – Bloomberg – “It was fairly demonstrably clear that there was a very significant problem of alignment of interests by private banks and their customers,” said the 47-year-old founder of Vulpes Investment Management, whose Singapore-based family office has invested in hotels in Japan and farms in Uruguay. “They ceased to be custodians of people’s money and they became salesmen.”
  • Xiao Nan Guo Cancels Hong Kong Initial Offer on Recent Market Volatility – Bloomberg
  • Background Briefing: Notification to Congress on the Sale of Arms to Taiwan – SENIOR ADMINISTRATION OFFICIAL ONE: Okay, thanks. We’ll I’d just make a few quick comments to provide a little context to the arms sale, which is really the longstanding bipartisan commitment in the United States to the security of Taiwan, which is a close friend of the U.S. And it’s part and parcel of the efforts by the Obama Administration to strengthen ties with Taiwan across a number of boundaries – trade, energy, people-to-people, so on – as well as our efforts to help ensure that Taiwan’s voice is heard in relevant international fora.

    The fundamental principle here is that the preservation of peace and stability across the Taiwan Strait is very much in the strategic interests of the United States and of our allies and partners, and that the very considerable progress in cross-strait ties over the past couple of years through diplomacy and dialogue, in our view, has been a major contributor to that stability in the region. And it’s something that the U.S. supports and we’ve made our support known clearly to parties on both sides of the strait.

    We firmly believe that our support for Taiwan’s legitimate defense needs is conducive to stability across the straits, and now that there has been a notification to Congress, I think that it’s time to talk about what we are doing, and what we’re actually doing and why, not about what we’re not doing.

  • China raps US on Taiwan arms, warns of fallout – Yahoo! News – China on Thursday denounced a decision by the United States to upgrade Taiwan's F-16 fighter jets, summoning the U.S. ambassador and warning that relations overall and recently warming military ties will suffer.

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