The Sinocism China Newsletter 03.01.17

Today’s Links:

AnchorTHE ESSENTIAL EIGHT *

1. Taming Real Estate, Zombie Companies Become Focus at Annual Legislative Meeting – Caixin Global Signals coming from President Xi Jinping this week indicated that taming the country’s real estate and gray lending sector will be top priorities in the year ahead. Within the corporate sector, a campaign to reduce excess capacity in sectors like steel and coal could be expanded to other industries, and the closing of dying state-owned enterprises (SOEs), sometimes called “zombie companies,” could also accelerate.

Related: Xi Vows to Speed Up Reforms, Curb Risky Borrowing – Caixin Global Xi said this year authorities would continue to crack down on speculation and “guide investment activities and reasonable anticipation” as part of efforts to strike a “dynamic balance” in the property market. The comments suggested that the target of curbs this year may shift from home buyers to property developers, likely by limiting lending to the companies while lowering their expectations on returns on investment to discourage reckless borrowing, said the People’s Daily commentary.

Related: China refrains from mega economic stimulus plan: official – Xinhua “Instead, it will focus on supply-side reform for a modest expansion of aggregate demand,” said Li Pumin, secretary general of the National Development and Reform Commission, at a news conference.

Related: Deleveraging financial market and curbing property bubbles top agenda for this year’s NPC | South China Morning Post Containing financial leverage and avoiding a property bubble will be the major focuses of the upcoming National People’s Congress (NPC) meeting due to start in Beijing on Sunday.


2. Full Text: International Strategy of Cooperation on Cyberspace – Xinhua International Strategy of Cooperation on Cyberspace provides a comprehensive explanation of China’s policy and position on cyber-related international affairs as well as the basic principles, strategic goals and plan of action in its external relations on that front. It aims to guide China’s participation in international exchange and cooperation in cyberspace for the next period of time, and encourage the international community to come together to enhance dialogue and cooperation and build a peaceful, secure, open, cooperative and orderly cyberspace and a multilateral, democratic and transparent global Internet governance system. 网络空间国际合作战略 

Related: China warns against cyber ‘battlefield’ in internet strategy | Reuters “The building of national defense cyberspace capabilities is an important part of China’s military modernization,” the Foreign Ministry and the Cyberspace Administration of China, the country’s internet regulator, said in a strategy for global online cooperation on the ministry’s website.

Related: 同心共铸网络空间命运共同体(钟声)–人民网 Comment: People’s Daily Zhong Sheng weighs in on the Cyberspace strategy


3. U.S. Not Bound by WTO Decisions, Trump Warns in Trade Agenda – Bloomberg America plans to defend its “national sovereignty over trade policy,” the Office of the U.S. Trade Representative said in an annual document laying out the president’s trade agenda. Under the terms of its entry into the WTO, the U.S. didn’t abandon its trade rights, according to the document, obtained by Bloomberg News and titled “2017 Trade Policy Agenda.” —2017 Trade Policy Agenda and 2016 Annual Report | United States Trade Representative 

Related: For China’s Factories, a Weaker Currency Is a Double-Edged Sword – The New York Times Investors and economists widely expect market forces to push the renminbi to weaken even more. And that leaves China with some tough choices. If Beijing lets its currency slide, it will risk worsening relations with Washington. On the other hand, a weaker currency would help its factories. But economists and business executives are increasingly throwing cold water on that thinking, saying the dynamic has changed: These days, they say, a weaker currency may hurt China and its companies more than it helps.


4. Chinese Media on Eve of Unifying Trump Speech: Globalization Needed to Curb ‘U.S. Political Chaos’-Breitbart In a column titled “U.S. Political Chaos Reveals Urgency to Advance Globalization,” the Global Times argues that opposition to Trump’s presidency around the world “could be an opportunity to gather global forces together to advance globalization.”

Related: The State of Trump’s State Department – The Atlantic “With the Chinese, protocol is policy,” said the mid-level State officer. “We’re sending signals that are potentially damaging the relationship in ways we can’t anticipate.”…“This is probably what it felt like to be a British foreign service officer after World War II, when you realize, no, the sun actually does set on your empire,” said the mid-level officer. “America is over. And being part of that, when it’s happening for no reason, is traumatic.”


5. White House Explores Options, Including Use of Military Force, To Counter North Korean Threat – WSJ About two weeks ago, Deputy National Security Adviser K.T. McFarland convened a meeting with national-security officials across the government and asked them for proposals on North Korea, including ideas that one official described as well outside the mainstream. The request was for all options, ranging from U.S. recognition of North Korea as a nuclear state to military action against Pyongyang. Ms. McFarland’s directive was for the administration to undergo a comprehensive rethink of America’s North Korea policy.

Related: China fires broadsides at South Korea’s Lotte group for providing land to host anti-missile system | South China Morning Post Attempts to visit Lotte’s Chinese website have failed since Tuesday afternoon, meeting only a message saying that the server could not find the webpage. A Lotte official told Yonhap that the disruption was caused by a virus planted by hackers, citing analysis by computer security experts.

Related: 罗援献反制萨德十策:必要时可定点清除萨德阵地_凤凰资讯 Comment: Luo Yuan not happy about THAAD, offers ideas to resist and destroy if necessary. PRC hysteria over THAAD is getting a bit over the top, not constructive at this point but they have no better cards to play short of something radical over North Korea

Related: China’s response to South Korea’s THAAD, TV drama ban – CGTN As to a ban on South Korean TV dramas on Chinese video websites, Geng Shuang said China still holds a positive and open attitude towards bilateral communication and cooperation between China and South Korea.

Related: 海外版望海楼:美韩不要在错误道路上越走越远–观点–人民网 Comment: Su Xiaohui weighs in on THAAD in the “Haiwang Lou” column of People’s Daily Overseas Edition

Related: China calls for calm on North Korea U.N. suspension call | Reuters China urged calm and restraint on Wednesday after South Korea called for the possible suspension of North Korea’s seat at the United Nations to punish it for using chemical weapons to kill the half-brother of its leader.


6. Ambassadors Winston Lord & J. Stapleton Roy: 45 Years of the Shanghai Communique – YouTube Comment: Fascinating talk at the National Committee on U.S.-China Relations


7. Bloody Islamic State video puts China in cross hairs | South China Morning Post Islamic State militants from China’s Uygur ethnic minority have vowed to return home and “shed blood like rivers”, according to a jihadi-tracking firm, in what observers said marked the first IS threat against Chinese targets. The threat came in a half-hour video released on Monday by a division of Islamic State in western Iraq, and featuring militants from China’s Uygur ethnic group, said the US-based SITE Intelligence Group, which analysed the footage.// Comment: The downward cycle of repression, terrorism and outright insurgency seems to be well underway

Related: IS Video Highlights Uyghur Fighters and Children, Training Camps in Western Iraq | Multimedia | Articles Al-Furat Province, a division of the Islamic State (IS) in western Iraq, released a video highlighting the Uyghur fighters in its ranks and their children, showing their activities in the battlefield and training camps, and brutally executing informants


8. WHO says bird flu outbreaks raise alarm, but human risks still low | Reuters The risk of sustained human-to-human transmission of H7N9 bird flu in China is low, the World Health Organization said on Wednesday, but a surge in human cases there is worrying and requires constant monitoring.

 

AnchorBUSINESS, ECONOMY AND TRADE *

Chinese official finds fault with western economicS-FT $$ Do Asian social values like filial piety and institutions like state-owned enterprises hold the key to diagnosing flaws in mainstream economic theory that rendered most economists unable to predict the 2008 financial crisis? This is the provocative claim advanced by Chinese central bank official Wang Zhenying in his ambitious new book, Principles of Transactional Economics, published last year by China Financial Publishing House

Make the Foreign Serve China: How Foreign Science and Technology Helped China Dominate Global Metallurgical Industries | Center for Strategic and International Studie – Michael Komesaroffs While trade remedies may be appropriate in some specific circumstances, Western industry would be better served by strengthening its advantages in downstream areas of metallurgical industries and cooperating with leading Chinese producers of primary materials. The paper’s title comes from a letter Mao Zedong wrote to students of the Central Conservatory of Music in February 1964 in which he said: “Make the foreign serve China,” by which he meant to adopt the good qualities of foreign cultures to enrich Chinese culture. The paper aims to demonstrate how in the post-Mao era China’s leadership has applied this aphorism to the development of the country’s metallurgical industries.

Industrial SOEs see healthy gains in 2016 – China Daily In 2016, the profits of State-owned industrial enterprises rose 6.7 percent, the highest growth rate since 2012, according to the State-owned Assets Supervision and Administration Commission.

Explosive Growth of SF Holdings Sparks Regulatory Concern – Caixin Global A private fund manager told Caixin that part of the reason behind the jump in China’s largest express delivery company’s share price was its small percentage of tradable stocks — a factor that often attracts “hot money” that hypes up share prices as investors attempt to achieve the highest returns.

How Trump’s China Policy Can Put Americans First | The Huffington Post Right now, entrepreneurial American mayors are doing the grunt work to capitalize on a massive boom in Chinese outbound investment, tourism and immigration. They’re traveling to China to promote land for development, businesses for investment and cities for tourism.

Tibet and Xinjiang have become a draw for China’s wealthy… in search of low taxes | South China Morning Post Why Chinese celebrities Zhao Wei and Fan Bingbing are basing companies in China’s autonomous regions

China’s Factory Gauge Strengthens as Producer Prices Rebound – Bloomberg “Early signs on China’s economy in February point to an acceleration in growth,” Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing, wrote in a report. “Gauges of expectations show optimism at elevated levels. For now at least, managers are shrugging off the risk of trade tariffs by the U.S. or a slowdown in the domestic property sector. Factory reflation is continuing at a rapid pace.”

China Said to Order Steel, Aluminum Curbs to Fight Pollution – Bloomberg

Baijiu Makers Benefit from Rising Middle Class, Reform in Sector – Caixin Global 

Pimco, BlackRock and Mobius’s Predictions for China in 2017 – Bloomberg

 

AnchorPOLITICS AND LAW *

上海市人民检察院原检察长陈旭涉嫌严重违纪接受组织审查——中央纪委监察部网站 Comment: Former head of the Shanghai People’s Procuratorate Chen Xu detained, rumors going around say involved in 4 murders

Xi’s right-hand man can see the big picture | South China Morning Post Xi needed an aide like Liu He who had a good understanding of economics and the global economy, an area that Xi himself and his other close advisers, such as Wang Huning, were not good at, one source who has worked under Liu said. “Liu is a person who can think of China’s problem in a global context,” the source said. “If he turns on the television, it’s always the major English news channels he will watch.” Another source said Liu had a Bloomberg terminal on his desk.

Former SOE executive sentenced to 16 years for graft – Xinhua Wang Shuaiting, former executive of China Travel Service (Holdings) Hong Kong Ltd.

NPC expected to pass general provisions of new civil law – Global Times The law, called “General Provisions of Civil Law,” covers comprehensive areas of legal regulations concerning people’s civil life, and is seen as a big step forward in the legal system to better protect the civil activities of society. China’s current General Principles of the Civil Law has been in place since 1986. Though it was amended once in 2009, many of its articles have become obsolete or inapplicable as a result of fast economic development and dramatic social changes since China’s reform and opening up.

天津市委常委成其圣服用过量安眠药昏迷 抢救后已清醒_新闻_腾讯网 Comment: Tianjin Municipal Party Committee member Chen Qisheng overdoses on sleeping pills, is recovering, announcement does not say if attention, just that he had been using them for a long time

 

AnchorFOREIGN AND DEFENSE AFFAIRS *

China replaces top general in charge of tackling military corruption | South China Morning Post A front-page report by the People’s Liberation Army Daily on Tuesday said Lieutenant General Zhang Shengmin, secretary of the commission’s Discipline Inspection Commission, had chaired an enlarged meeting of the anti-graft agency in Beijing on Monday, confirming that Zhang had replaced General Du Jincai. Sources said the reshuffle could be because Du, 65, had reached retirement age, but there are concerns over his close ties to military officers implicated in corruption

China in line for long-awaited extradition treaty-AFR The Turnbull government will push ahead with ratifying an ­extradition treaty with China — making Australia the first of the “five eyes” intelligence alliance countries to do so. Legislation to ratify the treaty will be tabled in parliament today, and the government hopes it will come into force by July.

China deep-sea submersible probes northwestern Indian Ocean – Xinhua The operation marked the 38th ocean scientific expedition by a Chinese team, and Jiaolong’s first deep-sea exploration of the year.

China’s Changing Foreign Policy – All Things Nuclear If Xi is attempting to initiate a new era in Chinese foreign policy, the concepts in his speech in Davos and his speech to China’s National Security Council on the occasion of the Munich Security Conference should be codified in the final report of the Chinese Community Party Congress later this year. Depending on the outcome of what is anticipated to be a contentious fight over China’s political future, Xi may emerge as a significant force for change not only at home but internationally as well.

破除對西方文化的迷信(大家手筆)–觀點–人民網 張西平 2017年03月02日 來源人民網-人民日報

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AnchorTECH AND MEDIA *

 

Xiaomi Is the China Trump Needs to Watch – Bloomberg Gadfly China has been vocal about its semiconductor ambitions and has committed billions of dollars to the cause. According to Xiaomi, its own chip cost more than one billion yuan ($145 million) to develop. A company representative wasn’t able to tell Gadfly exactly how much the chip cost to design or how much money the government provided, but said assistance extended beyond cash to include research and development.

Shared-Economy Specialists UCar, Ofo Raise $1.1 Billion – Caixin Global Ofo competes with rival Mobike in the shared bicycle industry, which lets subscribers use company-branded bikes anywhere they can find them and then park them anywhere when they are done, paying a small fee based on distance traveled or time of use. Ofo said it has 51.2% of the market, citing third-party statistics. It had more than 1 million bicycles on the road at the middle of last year

Huawei’s Campus Design Under Fire – WSJ Photos of architectural renderings and videos of the new headquarters for Huawei’s smartphone division outside the southern tech hub of Shenzhen came in for a critical drubbing when they cropped up on websites and social media last weekend. Attention focused on images of the lakeside campus’s 12 building clusters, each imitating the architecture of famous European towns such as Oxford, Verona and Bruges.

 

AnchorSOCIETY, ART, SPORTS, CULTURE AND HISTORY *

Submerged in the Cosmic Kingdom | by David Shulman | The New York Review of Books Comment: Book review of Peter van Ham’s Guge: Ages of Gold. The West Tibetan Masterpieces (here on Amazon) // Among the Shangri-Las scattered through the remote mountain valleys and passes of the Himalayas and the Karakoram, the most exotic may well be the once flourishing medieval kingdom of Guge. It’s not so easy to go there; the closest airport is at Ali (Ngari) in far western China, still a grueling ten-hour drive or more from the great Guge sites. The roads south from Lhasa, some 1,200 miles away, are a challenge. // Comment: In 2015 when we did the Mt. Kailash Kora we had permits to also go to Guge. It would have taken added three days to the trip, we decided not to. Hope we get another chance

Remembering Elliot Sperling: Personal Reflections on a Public Loss | The Huffington Post Until he came along, Western academics viewed Tibet only through Chinese eyes, largely because they could not access Tibetan sources; Elliot, who was fluent in Tibetan as well as Chinese, upended the old Sino-centric narrative and literally transformed the field overnight. His writings have become so central to the field that any scholar who attempts to write a paper, or even a page, about historical Sino-Tibetan relations cannot do so without paying homage to Elliot’s work. He is the Hegel of Sino-Tibetan history.

China Economy Draws More Students Back From Abroad – WSJ Chinese media last week trumpeted how 94-year-old Nobel laureate Chen Ning Yang and Turing Award winner Andrew Yao, 70, recently gave up their U.S. passports to take up Chinese citizenship again and join the Chinese Academy of Sciences. Back in Beijing, Ms. Feng, whose company helps advise Chinese firms on how to build education partnerships in the U.S., said she partly let her palate decide: “I don’t like food in the U.S.—too many sweet things and too much cheese.”

 

AnchorAGRICULTURE AND RURAL ISSUES *

JD.com to Expand Offline Presence in Rural Appliance Market – Caixin Global JD.com said this year it would switch the focus of its physical stores from small towns and villages to larger counties to better meet consumer demand. Yan said there is great potential in China’s vast rural market where big appliance malls are still scarce and brand product sales networks have yet to penetrate.

 

AnchorEDUCATION *

How Chinese Education Leaves Mothers Overburdened | Sixth Tone Chen Jingnan is a director and editor at Shanghai Education Television Station.

Fujian School Bans Foreign Shoes to Halt Students’ One-Upmanship | Sixth Tone “If we find any student still wearing imported shoes, parents should send domestic shoes to the school for them to change into,” the teacher from privately owned Zijiang Middle School in Jinjiang, a city in Fujian province, reportedly wrote. The regulation was implemented to put a stop to the trend of “invidious comparisons of luxury goods.”

 

AnchorBEIJING *

北京著名鬼宅出租 年租金1000万_高清图集_新浪网 Comment: Beijing’s most famous “haunted house” renovated, can be rented for 10m/RMB/Yr

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