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THE ESSENTIAL EIGHT *
1. Without corruption, some ask, can the Chinese Communist Party function? – The Washington Post Ren Jianming, a professor of clean governance at Beihang University in Beijing, said officials were not used to a system that ran without corruption. “Developers don’t believe that, without bribing, they would get a project, and officials don’t believe that, without bribing, they could be promoted,” he said. “They don’t trust a clean system. “Officials have stopped or delayed making decisions to avoid risks. Even if they don’t take a bribe now, they might be suspected or reported. Then their previous corruption would be found out.” // definitely what I am hearing
Related: Chinese official warns anti-corruption efforts could affect economic growth | Business Spectator According to a People’s Daily report, Zhou Benshan, party secretary of the Hebei provincial committee of the Communist Party made the comments at a ‘self-criticism’ session on 26 December 2014. “I resolutely support the CPC’s decision to form a disciplinary mechanism to ensure party cadres don’t dare be corrupt” Zhou is reported to have said. “However I am afraid that too much punishment of senior officials could harm the stability and development of the local economy.” // Zhou clearly didn’t get the CCDI memo, probably sweating today
2. China’s state-owned enterprises face new inspections in crackdown on graft | South China Morning Post The mainland’s top graft-buster has announced a round of inspections into 26 state-owned enterprises in an extension to the Communist Party’s crackdown on corruption. The widening probe would cover all major SOEs and financial firms this year as some enterprises showed “very noticeable” disciplinary problems, said Wang Qishan, who heads the party’s efforts to combat corruption.
Related: 中共中央政治局召开会议 讨论政府工作报告 审议关于巡视31个省区市和新疆生产建设兵团情况的专题报告 中共中央总书记习近平主持会议新闻频道央视网 CCTV Thursday Evening News on last Politburo meeting befire Chinese New Year, recaps 2014 work, corruption crackdown the final paragraph of the report // 会议强调，
3. China’s People’s Liberation Army audits spending in bid to root out crime | South China Morning Post The People’s Liberation Army is launching a year-long retrospective audit to review military spending over the past two years to crack down on excessive behaviour in the world’s largest army. Army mouthpiece PLA Daily yesterday said the audit would focus on four things: pay orders of all military fund flows, schedules of disbursement, management of internal service venues, and details of spending for extra-budgetary funds.
4. China’s Internet Censorship Anthem Is Revealed, Then Deleted – NYTimes During the talent show portion of a Lunar New Year celebration held on Tuesday by the Beijing Internet Association and attended by many of the country’s leading media figures and Internet executives, the Cyberspace Administration debuted what can only be described as a semiofficial anthem. A throwback to revolutionary songs glorifying the state, the piece uses rich, if mixed, metaphors to boast of China’s influence over the Internet and its innovative prowess // The video is on Youtube《网信精神》. Hope US Internet CEOs trying to get into China won’t recommend their executives learn to sing this song…they are busy enough with their reading as it is…
Related: Do You Know Who’s in Charge of the Internet? | DC Inno wonder what the lawmakers and their staffs think of this video and its lyrics // Monday is the beginning of Internet Governance Awareness Week, which passed the Senate by unanimous consent. The week also sees the first of many international meetings on changing who controls the Internet’s back end, this time in Singapore. Right now the Commerce Department, through the National Telecommunications and Information Administration holds on to Internet domain name functions, basically the index of numbers used to enable browsers to find the right place on the Internet. It works with the Internet Corporation for Assigned Names and Numbers to assign and manage the system. The plan has been to privatize that function with an international group of responsible, non-governmental stakeholders since 1997, but lawmakers in the last year or so have been seeking ways to slow down or stop the transfer.
Related: China Internet Restrictions Hurting Business, Western Companies Say – WSJ Nearly nine out of 10 European companies operating in China say the country’s Internet restrictions are hurting business, a new survey has found, providing another indication that Beijing’s intensified efforts to exert control online are having an impact beyond freedom of speech. Conducted by the European Chamber of Commerce between Jan. 28 and Feb. 6, the survey found 86% of companies had experienced negative business effects as a result of blocked websites or online tools, up 15% compared to June.
5. Xi Tells Capital to Shed Unneeded Functions, Integrate with Neighbors – Caixin Xi’s call for better integration of Beijing, Tianjin and Hebei Province – in part to relieve Beijing of some of its overcapacity – has been heard before. In 2004, the central government announced a program for integrating the Jing Jin Ji region, as it is known, but little came of it. Xi then raised the idea in February last year, saying the coordinated development of the region is an important national strategy and urging the three governments to cooperate on environmental protection, infrastructure, transportation and industrial issues.
Related: 侠客岛：习总说了，北京不迁都，但… – 头条网 TouTiao.com 你关心的，才是头条！ on Xi’s plans to clean up Beijing and move industries and function that do not fit with the vision of Beijing’s “four centers” –political center, cultural center, international exchange center, technical innovation center // 从这些方面来看，
Related: 北京削减应届落户指标 毕业生突遭解约政经频道财新网 Beijing has cut central SOEs quota for granting Beijing Hukous this year by 17% from the 2014 number, tough for college grads who thought they could get a Beijing Hukou through one of these jobs // 人社部近日发文，要求“中央单位”
Related: 北京计划关停300家污染企业 北京的“
6. White House to File Trade Case Against China at W.T.O. Over Export Subsidies – NYTimes.com The reported Chinese subsidies affect American industries with powerful political constituencies on Capitol Hill, and with links to fence-sitters in Congress whose support the administration needs to win the trade negotiating authority it seeks. These industries include textiles, apparel, agriculture, chemicals, medical equipment and certain metals like titanium and specialty steels. The administration accused China of providing at least $1 billion in illegal subsidies over three years by providing so-called common service platforms to help exporters. The administration is also contending that China set up 179 “demonstration bases” for exporters in these industries, providing at least $635,000 at each of some of the bases.
7. Beijing Directive Cuts Into Debt Issuance – WSJ In Directive 43, China’s cabinet said it would make it easier for local authorities to issue government bonds directly in a bid to fund future spending. It added that Beijing will strip the function of raising funds for governments away from local vehicles, but stopped short of saying how existing debt will be dealt with. “People are still figuring out what criteria will be used for the upcoming local-debt restructuring exercise. It’s all not very clear now,” said Mr. Gao.
Related: 经济参考网 -三家城投公司海外发债或引跟风 专家称受公司评级、资金回流架构及汇率等制约，
8. Changes Forced on Qualcomm Seen Benefitting Big Phone Makers – Caixin so bad for new firms like Xiaomi? // Wang said one of the key changes is an end to Qualcomm asking for free access to its clients’ patents. Under the new plan, phone makers can use their patents to negotiate with Qualcomm for cross-licensing and get compensation for their technology. This change will give Chinese companies with a strong patent portfolio, such as Huawei and ZTE, greater power in talks with Qualcomm, he said, but will not benefit firms with fewer patents. Large Chinese manufacturers demand more of Qualcomm’s chips and patents so they can tap overseas markets, Wang said, but smaller ones usually turn to other suppliers. Thus, fast-growing smartphone producer Xiaomi, which has great demand for Qualcomm technologies to support its overseas expansion plan, may have less bargaining power because as a new player it has fewer patents.
BUSINESS, ECONOMY AND TRADE *
Michael Pettis and perverse monetary policy | FT Alphaville In arguing his case, Pettis makes some useful observations about household saving habits. But his conclusion is, I think, mistaken. In China, like elsewhere, monetary easing quickens economic activity and raises inflation. That, at least, is what the academic evidence suggests…Note that another China bear, Paul Krugman, argues that it is precisely the abundance of labour that has kept returns on capital high in China’s past—and that it is the new scarcity of labour that will depress those returns from now on. Krugman agrees with Pettis on many things, as do I. But the two contradict each other on this point. Each China bear is bearish in his own way.
Waldorf Astoria sale marks tip of Chinese money into U.S. hotels | Reuters The closing comes on the heels of Monday’s announcement that another insurer from Beijing, the Sunshine Insurance Group, will purchase the luxurious Baccarat Hotel New York for $230 million. Investment from mainland China into U.S. hotels is expected to be about $5.1 billion this year, or triple the amount over the previous four years, according to JLL, a global real estate broker and advisory services company based in Chicago.
No Raises Unless 2015 Is More Profitable, Gov’t Tells SOEs – Caixin This is the first time the State-owned Assets Supervision and Administration Commission (SASAC) has explicitly linked pay and profits at state-owned enterprises (SOEs). One expert says the emphasis on profitability may mean SASAC is concerned about a slowing economy. SASAC notified centrally administered SOEs on February 9 that they “must not increase the total amount of salaries” if their profit target this year is lower than last year’s profits.
Tesla Misses Estimates After China Sales Disappoint – Bloomberg Business Tesla said Wednesday that it’s working to make Chinese consumers more confident in purchasing a Model S by installing chargers at buyers’ homes before the vehicle is delivered. The automaker is also adding features for the Chinese market, where buyers often are driven. “We believe our new executive seats and second-row center console will be quite popular with new China customers,” Tesla said in its letter. // Audi figured that out decades ago. Did Tesla not know this before they launched?
Tesla’s China Communications Official Leaves in Less Than a Year – Bloomberg Business June Jin, vice president of communications, is no longer with the company, Tesla’s China spokesman Gary Tao said by telephone. He didn’t subsequently respond to further calls to his office or mobile phone seeking additional information. Jin didn’t answer calls to her mobile phone, nor immediately respond to an e-mail seeking comment.
Australia tightens rules over foreign buying of agricultural land no mention of China but… // Australia tightened rules on Wednesday over foreign ownership of its agricultural land amid concerns that it is losing control of its own food security, slashing the amount beyond which land purchases would require regulatory approval. From March 1, foreign purchases of agricultural land over A$15 million ($11.67 million) will be subject to regulatory approval from Australia’s Foreign Investment Review Board, Australian Prime Minister Tony Abbott said.
Shaanxi Government to Probe Missing Funds After Mass Investor Protests $1.2 Billion missing says this report // Some 170,000 people invested in the privately owned Xi’an United University’s expansion scheme during the past 10 years, but they now say there is no sign of the university’s highest-level leaders or their capital. Thousands of disgruntled investors converged on provincial government offices on Tuesday in the hope of pressuring the government to act, investors told RFA. “At least 10,000 people were there, and there were also army vehicles and soldiers,” an investor who asked to remain anonymous told RFA on Wednesday.
Survey of Foreign Companies in China Finds Pollution a Growing Problem – NYTimes expat hardship pay is back…never been on an expat package, here they are getting fat again, at least in Beijing // Concerns about pollution have been on the rise in recent years among foreigners and Chinese. In the survey, more than half of the respondents said pollution made it more difficult to recruit senior executives to work in China. The top problem for companies trying to attract or retain senior executives, however, was the expectation of being highly compensated for working in China.
经济参考网 – 26省下调今年城乡收入增长目标 22省份去年增收未达标，专家建议加大保障支出 据《
India Passes China to Become Fastest-Growing Economy – India Real Time – WSJ Everyone from the World Bank to Goldman Sachs had predicted it wouldn’t happen for another two years but recent recalculations indicate that India has already dethroned China as the world’s fastest-growing big economy.
How the Club Med Bidding War Was Waged – WSJ The prolonged bidding war brought a cast of pugnacious characters into eight rounds of offers and counteroffers: Dueling with Fosun managing director Qian Jiannong, whose group spans industries from pharmacy to mining, was rival Italian financier Andrea Bonomi, whose family holding company is known for turning around Ducati Motor Holding SpA, the motorcycle maker. As the dust finally settles, Fosun’s success in seizing control of the iconic French company comes with a bewildering question: Why pay €24.60 ($27.85) a share—a nearly 80% premium over the Club Med stock price before the battle began—for an unprofitable company that last served a dividend in 2001?
POLITICS AND LAW *
In China, a women’s detective agency battles for wronged wives – The Washington Post In the search for her husband and his mistress, and in her long court battle with them, Zhang embarked on a journey that led her to establish what could be China’s only women’s detective agency, working on behalf of wronged wives.
China Premier’s brother steps down from senior role at tobacco monopoly | South China Morning Post State Tobacco Monopoly Administration vice-director Li Keming had left his role, the Ministry of Human Resources and Social Security said on its website yesterday, listing several other officials who had also stepped down from their positions. The ministry said Li had been appointed as chairman of a supervisory committee focused on large state-owned enterprises.
Portrait of Xi selected as test for university candidates- China.org.cn More than 12,000 undergraduate candidates applying to the art school of Beijing University of Technology were asked to sketch a portrait of President Xi Jinping. The test has attracted quite a lot of attention.
Deng Liqun, Divisive Chinese Communist Party Official, Dies at 99 – NYTimes.com Deng Liqun, who died on Tuesday in Beijing at 99, was a senior Communist Party propaganda and ideology official who began the 1980s as a powerful proponent of change, yet became one of the most vehement and divisive foes of China’s liberalization. His death, after many years spent bedridden, was reported by Xinhua, the state-run news agency.
China Labor Ties Fray as Grievances Rise, Economic Growth Slows – WSJ late last year, the International Center for Joint Labor Research, the first institute of its kind in China, was shut down, with little warning or explanation, people familiar with the situation said. Its demise has alarmed labor experts, including some union officials, who see it as a setback for industrial relations just as China is dealing with rising worker grievances and slowing economic growth. The center—jointly established by the University of California, Berkeley, and Sun Yat-sen University in Guangzhou City—sat on the front lines of labor tensions.
环球：“海外民运”哪儿给钱多去哪 内部互抓特务-凤凰新闻 Global Times looks at the overseas Chinese democracy movement, says lots of infighting, have lost support almost everywhere, been rejected by many, still paying the price for the earlier decisions to “betray the motherland” // 【环球时报驻美国、法国、德国特约记者 林玉 萧遥 张昭东】“他们现在在哪儿？”去年年中，
FOREIGN AND DEFENSE AFFAIRS *
RI, China hunting down Xinjiang terrorism suspects in Poso | The Jakarta Post He said the police in Central Sulawesi have arrested four of the nine Uighur terrorism suspects who had entered Poso, while three had fled into the Poso jungle and two others escaped to Malaysia. The police said that the four arrestees initially admitted to have come from the Uighur region in China, but after further investigation, they retracted their statements and said they came from their hometown in Turkey. Saut said the police had difficulty questioning the four because they gave different statements. The nine were believed to be part of the Uighur separatist group that launched a terrorist attack on a train station in Kunming, Yunnan province in southwestern China, on March 1, 2014, killing 33 people and wounding 133 others. The five captured will likely be extradited to China as the two countries signed an extradition treaty in 2009.
China’s Rising Military Not Ready to Win Wars, U.S. Report Says – Bloomberg Business “Although the PLA’s capabilities have increased dramatically, its remaining weaknesses increase the risk of failure to successfully perform the missions the Chinese Communist Party leaders may task it to perform,” the report said. It cited Taiwan contingencies, maritime claim missions, protecting sea lines of communications and some non-war military operations.
China’s Incomplete Military Transformation: Assessing the Weaknesses of the People’s Liberation Army | U.S.-CHINA This report examines many of the weaknesses in the PLA’s human capital and organization realms, its combat capabilities across various domains, and China’s defense research and industrial complex. Furthermore, the report analyzes how these weaknesses affect the PLA’s performance of missions tasked by Beijing.
China firm ‘sure’ about Colombo project go-ahead : World, News – India Today In its first comments following the controversy surrounding the project, the China Communications Construction Company said on Wednesday it had “nothing to worry” about the future of the deal, although on Friday the Sri Lankan Prime Minister, Ranil Wickremesinghe, told Parliament no decision had yet been taken.
Speak Softly and Carry a Big Ship | Foreign Policy – James Holmes Would Theodore Roosevelt have dispatched a nuclear-powered aircraft carrier to China for a port call? It’s not quite sailing softly, but it is a big stick. And the exercise of diplomacy — including the naval variety — isn’t just about maintaining cordial relations with friends. Roosevelt reached out to neutrals and prospective foes, as well as partners. Mounting a discreet display of force without getting another country’s dander up — which he did to great success with the German Kaiser Wilhelm II in 1902 — was a hallmark of Roosevelt’s diplomacy. And yet Senator John McCain (R-Ariz.) — who calls America’s cowboy president his hero — recently urged the Pentagon to cancel just such a visit.
China Policy Institute Blog » Kyrgyzstan’s accession to the Eurasian Economic Union: Impact on cross-border trade with China Within this panoramic, Kyrgyzstan has often been described as playing a key role as intermediary between China, on one hand, and Kazakhstan and Russia on the other. Over the last couple of decades, the country has served as a transit and re-export channel for Chinese manufactures, the resulting trade accounting for a significant portion of her GDP, with some sources claiming that “half of our economy is dependent on re-exports of goods coming from China”.
HONG KONG, MACAO AND TAIWAN *
Taiwan to Appoint New China Affairs Head, United Daily Reports – Bloomberg Business Taiwan’s top mainland China affairs official, who participated in the first meeting between the Beijing and Taipei governments, will be replaced by a defense department official, according to a newspaper report.
TECH AND MEDIA *
Everything that’s new in iOS 8.3 | Cult of Mac This is only big news if you live in mainland China, but iOS 8.3 finally adds support for Apple Pay on UnionPay, bringing Apple’s mobile wallet to the country with the most iPhone 6 owners in the world.
Baidu Profit Misses Estimates on Spending to Lure More Users – Bloomberg Business The company forecast first-quarter sales of between 12.6 billion yuan and 13.1 billion yuan. That compares with the 13.5 billion-yuan average of seven analysts’ estimates. “The weak guidance is surprising,” Ella Ji, a New York-based analyst at Oppenheimer & Co., said in an e-mail. The quarter’s profit miss was partly due to spending on mobile user growth, Ji said. The forecast reflects an impact from the Lunar New Year holiday that begins next week and the rising contribution by mobile search, which generates less revenue than personal-computer search, Chief Financial Officer Jennifer Li said.
China App Distribution Market Share in Q4 2014 — China Internet Watch The top three app distribution players in China in the last quarter of 2014 are Baidu league, 360 league and Tencent’s with 42%, 22.3% and 21.8% market share respectively according to EnfoDesk.
SOCIETY, ART, SPORTS, CULTURE AND HISTORY *
The English Test for Chinese Middle School Students: Could You Do It? | The Nanfang One such English examination was leaked online, and people were shocked at how hard it was. The test is from the Nanjing Foreign Language School, and many felt the extensive English section was too difficult to complete, even for adults. Do you have what it takes to get into the Nanjing Foreign Language School? Try out the following questions:
Filming China’s Dark Side – Video – NYTimes.com Zhao Liang’s films, which explore the relationship between the Chinese government and its citizens, have received critical acclaim abroad, but are not screened in China.
Alibaba’s Latest Marketing Campaign Supports Same-Sex Marriage | TechCrunch Alibaba marketplace Taobao will celebrate Valentine’s Day by sending gay couples to the U.S. and other countries where same-sex marriage is legal. To be sure, the event, We Do, is a publicity ploy like Alibaba’s recently announced drone pilot program. We Do, however, is much more notable because it is unusual for a Chinese company to publicly support gay rights.
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH *
Do Not Resuscitate: China’s Elites Push for a Better Way to Die – Bloomberg Business The group’s goal: to help patients say no to certain medical interventions toward the end and seek palliative care for comfort. For the past nine years it has promoted living wills. This year they are widening their mission to train doctors and volunteers to provide end of life support for terminally ill patients. Led by Chen Xiaolu, the son of a former general, and the offspring of other former officials, the association includes medical experts and social celebrities, and also receives support from children of party veterans like Huang. // interesting Bloomberg makes no mention of Caixin’s long story on this topic from early January: Children of Party Luminaries Raise Awareness for Dying with Dignity.
China’s Health Insurance Reform and Disparities in Healthcare Utilization and Costs: A Longitudinal Analysis | RAND China’s economic success during the past 30 years was not mirrored in its health care system. As a result, the rural-urban disparities in health insurance coverage and the related health care areas became prominent. Since the late 1990s, China has been expanding insurance coverage, in order to provide accessible and affordable health care to all residents. This study analyzes whether the insurance expansion reduces rural-urban disparities in terms of health care utilization and financial protection.
Thousands of Beijing’s ‘rat tribe’ underground residents evicted – Telegraph But authorities have been clearing out residents over the past three years in the first stage of a planned mass eviction, according to the Beijing News. Around 7,250 makeshift houses were found on sites spanning an area of some seven million square metres.
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