The Sinocism China Newsletter 06.21.14

Some weekend reading:

THE ESSENTIAL EIGHT

Closer Look: Xi’s Leadership of Top Economic Group Follows Pattern – Caixin The news that Xi was atop this group took some people by surprise. As the top figure in the party, Xi already wears multiple hats. He heads the leadership groups for deepening reform, Internet security and information, and the national security commission. The news indicates the man who already enjoys the most political power granted by the constitution also presides over several vital fields, ranging from national security and foreign affairs to social management and economics. Some media reports said Xi’s taking the position was unusual because it is more often held by the premier, in this case Li. But Southern Weekend, a newspaper in Guangdong Province, published an article correcting this misconception on June 19. It said the job has been held by the party’s general secretary since 1987, citing several sources close to the group and retired senior officials. Former party general secretary Jiang Zemin held the position, and Hu Jintao took over after him. The premiers of those administrations acted as vice chairs of the group.//if these reports are correct, they have exposed a huge gap in knowledge about how these leading groups work…many foreign China specialists have believed that the Premier chairs this leading group since Zhu Rongji

Reading the June 18 media circular – China Media Project It bears noting, however, that there is little of substance in the June 18 circular on “critical reporting” that we can say unequivocally represents a “tightening” or “worsening” of the situation for journalists in China. Which is not to say — I repeat, NOT to say — that continued attention to the issue of press freedom in China is not crucial (it is), or that there is any doubt we’ve seen a progressive worsening of the situation for professional journalists and internet users alike in China….Think of the circular, then, as a warning siren alerting media to the fact that the Party remains vigilant, that in fact it is more serious now about exercising what it sees as its right — the control of all channels of information. This is much the same as the recent news that Chinese journalists would be required to take training in the Marxist View of Journalism, which the Los Angeles Times noted in its story on the circular this week. The content of these training sessions, which are not at all new, is a much less important issue than the signal the training sends to the media: We, the Party, are your master.//so was it a collective overreaction to this latest circular?

社科院遭斥事出有因 国安委彻查境外NGO_中国_多维新闻网 Duowei says national security commission has launched investigation of foreign NGOs, found reference to the investigation in the a document posted to the Yuncheng city website, includes screenshot of the document in this story…no surprise given the roles that US-backed NGOs played most recently in Ukraine, like this for example:  Pando Daily-Pierre Omidyar co-funded Ukraine revolution groups with US government, documents show

Related: China quietly launches probe of foreign non-government outfits: media | Reuters The probe into the activities of foreign NGOs emerged after a website of the Yuncheng city government in the northern province of Shanxi published details this week, apparently inadvertently, which were picked up by Chinese media on Friday. The national security commission has ordered a “nationwide comprehensive and thorough investigation of overseas NGOs and their activities, to find out the basic situation,” the city government said in the notice. The move is intended to lay the foundation for strengthening and standardizing management as the next step, it said, adding that the campaign begun in May will run until the end of July.

11家央企存普遍滥发福利等问题 190人被处理_新闻_腾讯网 National Audit Office discovers problems at central SOEs…not properly implementing the central government’s economic policies, giving billions in “hidden benefits” to employees, underreporting profits and more…interesting that the auditors are playing an expanded role, hand in hand sometimes with the CCDI… // 昨天,审计署发布了11家国有企业2012年度财务收支审计结果公告,涉及石油、烟草、航天、军工等领域。审计发现,部分国企违规金额动辄数百亿元,且普遍存在公车等三公经费超标、滥发福利、未按程序投资并致亏损等问题。根据审计中发现的问题,对190名相关责任人进行了严肃处理,其中厅局级干部32人。

Related: 审计署报告点名多家国资信托_金融频道_财新网 NAO report also criticizes by name several SOE-backed trust firms // 【财新网】(记者 刘卓哲)6月20日,审计署发布对11家国企2012年度审计结果,加上两天前(6月18日)关于中国投资有限责任公司(下称中投公司)的审计结果,已有包括华润信托、昆仑信托和中投信托等多家国资背景的信托公司被审计署点名。审计结果出炉后,三家信托公司的控股股东分别给出审计说明。

Related: 央企审计 华润医药收购北药股份或存利益输送_21世纪网 more details from the NAO report

Hong Kong and China: A showdown looms | The Economist For the democracy activists, that means accepting that most Hong Kongers are pragmatists. However suspicious they are of the Communist Party, they are also disinclined to back radical street politics. Hong Kong is still freer (and richer) than the rest of China. Provoking a clampdown hardly seems wise. But neither is China’s hardline stance. Many Hong Kongers moved towards the radicals’ camp after a senior mainland figure talked about dealing with disorder by sending in the Chinese army. Attacking the independence of the judiciary in the white paper was also barmy, even by the undemocratic regime’s own aims. The economy is still its priority, and Hong Kong is its most global financial centre. Rule of law and press freedom are the foundations of Hong Kong’s prosperity (and a reason why Shanghai still has not caught up).

Related: Hong Kong Group Battles Huge DDoS Attack Occupy Central, a grassroots movement that aims to bring universal suffrage to Hong Kong, has been subject to “one of the largest and most persistent DDoS attacks in the history of the Internet,” according to CloudFlare, the web performance company maintaining its website.

Related: China Says Hong Kong Online Referendum Illegal as Website Hacked – Bloomberg The voting website, which opened yesterday, suffered “severe” distributed denial-of-service attacks, in which hackers flooded systems with information to shut them down, the organizers of the poll said in a statement dated June 19. More than 265,000 votes had been submitted as of 7 p.m. yesterday, the website showed. The election procedure is not in line with Hong Kong’s constitutional Basic Law, Xinhua said, citing the Hong Kong and Macau Affairs Office of the State Council. The public nomination of candidates runs counter to the Basic Law, Xinhua said.

Tibet: Taming the west | The Economist By 2020 the aim is to complete several other major rail routes connecting Tibet with its neighbouring provinces of Xinjiang, Sichuan and Yunnan (see map). One of them, a 1,900km railway from Lhasa to Chengdu, will cost more than $20 billion. Two more railways from Shigatse to the Nepalese and Indian borders, at Nyalam and Dromo, are also planned // how different than the taming of the American West? 

Zhang Lei has Lunch with the FT – FT.com It is a glorious spring Sunday, the day before commencement at Yale University in New Haven, Connecticut. Among the many alumni returning to the campus is billionaire Chinese financier Zhang Lei, 41, who is a familiar figure here. In 2010 he announced a gift of the propitious amount of $8,888,888 to Yale School of Management, the largest donation made to the business school from one of its graduates. In the world beyond Yale, however, Zhang is little known. Yet he runs a $13bn fund in China, Hillhouse Capital, which has a focus on investing in Chinese internet entrepreneurs and start-ups

Fonterra never checked Sanlu’s products in China melamine scare: Study Decentralized milk supply chains were largely to blame for the melamine scandal that bankrupted China’s Sanlu in 2008, but its partner Fonterra’s experience ‘did not appear helpful’ in stopping deadly safety problems, a study claims. Writing in the International Journal of Production Economics this month, Chen et al. use Sanlu’s demise – bankrupt by the December 2008 – as a case study to draw out managerial and policy insights and implications regarding supply chain design, informational visibility, corporate social responsibility and regulatory action to manage global food supply chain quality and risk.

 

BUSINESS, ECONOMY AND TRADE

China’s property market may not be as bad as it looks | Reuters With only about one-third of the 1.3 billion population living in urban centres, too many homes that will never be filled have been built in small cities. That would likely see a sharp spike in bankruptcies among small developers, Lu said, but would not cause “a big crash”. Wages in China are still growing faster than house prices, with average incomes in cities and rural areas climbing 10-12 percent last year, on par or faster than a 10 percent rise in property prices. “This is a cyclical correction,” said Rosealea Yao, an economist at Gavekal Dragonomics. “We see no signs of imminent collapse.”

U.S. Investors in China’s Internet Companies Face Risks – Bloomberg U.S. shareholders face “major risks” from investing in Chinese Internet companies such as Alibaba Group Holding Ltd. that use a variable interest entity, according to a U.S. congressional commission report . Risks are associated with VIEs because the structures create holding companies to link foreign investors to Chinese firms via a set of complex legal contracts, according to the June 18 report by the U.S.-China Economic and Security Review Commission. There is a “high probability” Chinese courts will not uphold those contracts, the report said.

传温州松绑楼市限购:房价已连跌33个月 _财经_腾讯网 is Wenzhou about the loosed housing purchase restriction? its property market has crashed hard over the last couple of years

CITIC analyst suspected of insider trading – Xinhua posted the leak on wechat //  The news was unveiled by Zhang Xiaojun, spokesman of the China Securities Regulatory Commission (CSRC), which was quoted by its official weibo account. Zhang Mingfang, a securities analyst at CITIC securities, had reportedly posted the equity incentive plans of the management of Livzon Pharmaceutical Group on a private messaging group for institutional investors, resulting in sharp increase of the company’s share prices.

If China Were Going To Have A Hard Landing, We Would’ve Heard About It By Now – Business Insider But seven years after the first signs of financial stress in the global economy, we have not seen anything remotely resembling an economic crash. As Bernstein’s Michael Parker and Flora Chang note, the Chinese economy is continuing to tick along at reported levels just shy of the targeted 7.5% GDP growth, even as the country’s energy demand has slowed. “The numbers might be fudged, but just how fudged could they be?” they wrote in a new note. “When you debate for 30 months whether an economy is having a hard or a soft landing, you already have your answer. If it’s still not clear after almost three years, it’s a soft landing.”

A Love-Hate Relationship: Why Guangdong’s Financial Health Is So Tied to Property – China Real Time Report – WSJ a credit rating report on Guangdong shows that even this relatively well-to-do province is heavily dependent on land and property sales, and that could make it vulnerable to financial stress in the current real-estate market downturn. The credit report, issued by Shanghai Brilliance Credit Rating & Investors Service Co., was released publicly on Tuesday thanks to the requirement that local governments need to make their financial position transparent before they can sell bonds. The financial data show that in 2012 – the most recent year for which full figures are available – more than half of the province’s revenue came from land sales. Moreover, that relatively high dependence was actually below the national average.

 

POLITICS AND LAW

【舒立观察】反腐无禁区_杂志频道_财新网 Hu Shuli Editorial on the corruption crackdown, again says needs more of an institutional framework // 欲根治腐败,道德修养、党性教育诚然有益,但归根结蒂需要建立有效约束制衡权力的机制,以监督、问责和透明化来端正官员的行为。有学者认为,“西方国家反腐靠法治,中国反腐靠政治。”这一观点显然有失偏颇。

Liu Yunshan, defender of the faith | Inside Story So what can we make of the fact that Liu [Yunshan] now seems a central figure in the Chinese leadership? He holds the crucial ideology portfolio, heads the Central Party School, manages day-to-day Politburo business as secretary of the central secretariat, and is intimately linked with the continuing clampdown on internet freedom. As a humble journalist from Inner Mongolia with a modest family background, a man who didn’t graduate from an elite school and whose sole patronage links are to a couple of erstwhile senior leaders in the ideology field, his rise merits some explanation. // and how does Liu view the current CCTV investigations?

Family, Corruption and Sage Words From a News Agency – NYTimes.com Xinhua cited the example of Liu Zhijun, the former minister of railways, who last year was convicted of graft that also involved his brother. The Xinhua commentary cited more of those old sayings to make its point that family patronage will be punished. “The notion that it’s coolest under a big tree won’t work,” it said. “The new normal is that when a turnip is pulled out, mud also follows.” But perhaps the commentary was too blunt for party officials’ sensitivities. Later on Friday, it began disappearing from Chinese websites, including Xinhua’s own. There is a saying for that too: “Men fear fame like a pig fears getting fat.” // the original Xinhua comment now deleted from the Chinese Internet

[视频]俞正声主持召开党外人士专题调研座谈会_新闻频道_央视网(cctv.com) Ling Jihua in a Friday CCTV Evening News report on united front work department meeting. Gets an appearance on screen, mention

China launches campaign to cleanse web of terror content | Reuters “Terror video and audio products have become a major instigator of the high incidence of terrorist activities at present,” the official Xinhua news agency said, quoting a statement from the State Internet Information Office. The government aims to stop circulation in China of terror-related materials made overseas, remove such information from the Internet, punish websites that break the rules and urge Internet firms to “uphold their responsibilities”, Xinhua said.

西部矿业旧事新案 interesting Southern Weekend story on the Western Mining case, looks at a mysterious company that cashed out several Billion RMB…Western Mining case has brought down officials and the antagonist in the Qingdao metals collateral fraud is reportedly involved…this is one hosted overseas, can’t find it on Chinese Internet though originally read it on wechat  //  潮汕商人陈基鸿突然入股西部矿业,两年即获得200%收益,但却在公司上市前夕突然收手退出,放弃唾手可得的更巨额财富。 接手者是一家成立仅半个月的神秘公司安瑞盛。西部矿业如期上市后,安瑞盛在解禁期结束后便减持手中股份,套现数十亿。

媒体称山西运城书记被查 北京家中搜出千万现金_新闻_腾讯网 Chinese media reporting that the Party Secretary of Yuncheng, Shanxi is under investigation, that more than 10m rmb in cash was found in a search of his house..no official announcement yet

 

FOREIGN AND DEFENSE AFFAIRS

Beijing sends more oil rigs to South China Sea – Channel NewsAsia One of the new rigs, Nanhai 9, was dispatched that same day and was to arrive Friday, according to a statement posted online Wednesday by the China Maritime Safety Administration. The three other rigs — Nanhai 2, 4 and 5 — have already arrived at their destinations and will conduct drilling operations over the next four to eight weeks, the administration said. Some of the positions it gave for them are east of Hong Kong and far from any area claimed by Vietnam, but it remains unclear whether the others will be deployed in disputed waters.

Foreign Ministry Spokesperson Hua Chunying’s Regular Press Conference on June 20, 2014 As agreed by China, India and Myanmar, commemorative activities of the 60th anniversary of the Five Principles of Peaceful Coexistence will be held in Beijing fromJune 28 to 29. President Xi Jinping will attend the commemoration on June 28. Premier Li Keqiang of the State Council will attend the commemorative reception on June 29. President of the Republic of the Union of Myanmar U Thein Sein and Vice President of the Republic of India Shri Mohammad Hamid Ansari will attend the above-mentioned commemorative activities. At the invitation of President Xi Jinping, President of the Republic of the Union of Myanmar U Thein Sein will pay a state visit to China from June 27 to 30. At the invitation of Vice President Li Yuanchao, Vice President of the Republic of India Shri Mohammad Hamid Ansari will pay an official visit to China from June 26 to 30.

Five Principles of Peaceful Coexistence – Wikipedia, the free encyclopedia The Five Principles of Peaceful Coexistence, known in India as the Panchsheel Treaty (from Sanskrit, panch:five, sheel:virtues), are a set of principles to govern relations between states. Their first formal codification in treaty form was in an agreement between China and India in 1954. They were enunciated in the preamble to the “Agreement (with exchange of notes) on trade and intercourse between Tibet Region of China and India”, which was signed at Peking on 29 April 1954.[1] This agreement stated the five principles as: Mutual respect for each other’s territorial integrity and sovereignty. Mutual non-aggression. Mutual non-interference in each other’s internal affairs. Equality and cooperation for mutual benefit. Peaceful co-existence.

China publishes book on U.S. global surveillance – Xinhua | China on Fridaypublished a book exposing the United States’ surveillance activities over China and other countries across the world. The book, “How is the United States surveilling China?”, includes a report titled “The United States’ Global Surveillance Record” released in May as well as a series of analysis articles and commentaries by 18 experts.

China committed to settling maritime disputes via dialogue: premier – Xinhua Pledging to jointly build a “sea of peace” with other countries, Li said China will unswervingly follow the path of peaceful development and firmly oppose to any act of hegemony in maritime affairs. “China firmly supports any act that safeguards marine peace and order, and firmly opposes any act that undermines marine peace and order,” he said. China is willing to strengthen communication and cooperation with relative countries and improve any bilateral and multilateral mechanism, to jointly safeguard free and safe navigation, fight against piracy and maritime terrorism, respond to marine disasters and construct a marine order of peace and tranquility, Li said. He added that the country is resolute in safeguarding its national sovereignty and territorial integrity, which is conducive to safeguarding regional peace and order as well.

 

HONG KONG, MACAO AND TAIWAN

Jimmy Lai denies foreign ties and funding – The Standard America betrayed Hong Kong a long time ago and is no longer interested in its affairs, says Next Media boss Jimmy Lai Chee-ying. Defending himself against allegations that he held secret talks with former US deputy defense secretary Paul Wolfowitz last month, Lai said he had never even considered asking Washington for help. The allegations were made in Eastweek magazine as Beijing began stepping up its warning that overseas forces are meddling in the Hong Kong affairs.

 

TECH AND MEDIA

Qvod, the Chinese Video Service with a Special Business Model, was Pulled down, Thanks to Lawsuit Filed by Tencent | TechNode Qvod, or Kuaibo in Chinese, was recently sued for video rights infringement and is required to pay RMB260 million (roughly US$42mn) fine. What’s interesting is it turns out the lawsuit was filed by companies led by Tencent, the Chinese Internet giant based in the same city with Kuaibo, Shenzhen. Other companies include Youku, LeTV and state-backed movie sitem1905.com.

Chinese Company Demands Edits to New ‘Transformers’ Movie – NYTimes.com The China woes are not over yet for Michael Bay’s latest “Transformers” film, “Age of Extinction.” A week before its expected release in the China, and almost everywhere else, the film was hit with a demand for the removal of any scenes depicting the logo or properties of the Beijing Pangu Investment Company, which was a commercial sponsor of the movie. The Pangu company issued a statement on Wednesday accusing Paramount Pictures, the studio behind the film, and others of failing to perform contractual obligations, and said it had filed court charges related to its allegations.

 

SOCIETY, ART, SPORTS, CULTURE AND HISTORY

大学生拍“文革批斗”毕业照_网易新闻中心-网易新闻客户端 Harbin students stage cultural revolution struggle session for university graduation pictures

Yunlin Dog Sellers Openly Taunt Dog Lovers: “Buy The Dog Or It Dies!”  | Nanfang Insider We first heard rumors that the Yulin dog eating festival was to be cancelled, and then heard reports that it had already taken place last week. With tensions running high between animal rights activists and Yulin’s traditional dog-eaters, it now appears Yulin’s dog sellers are taunting activists and exploiting their love of dogs. Reports in the Morning Report suggest that dog sellers in Yulin are selling their live dogs to animal activists at inflated prices while threatening harm to the dogs in their possession.

 

ENERGY, ENVIRONMENT, SCIENCE AND HEALTH

The Problem with Chinese Gas Prices | ChinaFile-Sohu Infographic Oil companies should be willing to bear the costs associated with higher fuel standards. But the “Big Two,” even while they reap enormous profits, complain that they are losing money. So the government subsidizes them, while at the same time consumers are asked to bear 70% of the cost increase created by higher fuel standards. We need clean air, but bad things are sometimes committed with good intentions. Before they raise the price of gas, shouldn’t oil companies come clean about what the new fuel standards actually cost them?

 

FOOD AND TRAVEL

难忘老北京点心 a nice look at Beijing snacks, from a popular Wechat account about old Beijing

 

BEIJING

Stunning Drone Video Shows Beijing From a Risky Angle – China Real Time Report – WSJ Peng Bin, founder of drone-maker XAircraft, said it was his understanding that drones were prohibited inside Beijing’s Fifth Ring Road, which traces a circle roughly 12 miles in diameter around the city. At certain times, such as during the 2008 Olympics and annual legislative meetings, drones are banned throughout the city

 

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