Monday is an official holiday in China, for the Duanwu Festival.
I have mentioned this in the newsletter at least once but now I am making it official to readers. We are relocating from Beijing to Washington, DC in August, primarily for an even better education for our twins though if I ever get around to an “Au Revoir/后会有期 Beijing” post I will give a more detailed explanation. I have no idea yet what I will be doing in DC yet but plan to keep the newsletter going.
Between now and the end of August I will be very distracted with relocation-related activities and so publication of the newsletter may be increasingly sporadic. I will remain active on Twitter so if you want to follow news about China from my perspective you should also follow me @niubi.
Thanks as always for reading.
THE ESSENTIAL EIGHT *
1. Attack Gave Chinese Hackers Privileged Access to U.S. Systems – NYTimes last summer, officials lost the trail as some of the hackers changed focus again, burrowing deep into United States government computer systems that contain vast troves of personnel data, according to American officials briefed on a federal investigation into the attack and private security experts. Undetected for nearly a year, the Chinese intruders executed a sophisticated attack that gave them “administrator privileges” into the computer networks at the Office of Personnel Management…“This was classic espionage, just on a scale we’ve never seen before from a traditional adversary,” one senior administration official said. “And it’s not a satisfactory answer to say, ‘We found it and stopped it,’ when we should have seen it coming years ago.” // given the US attempts to justify cyber espionage in the wake of Snowden’s revelations it is going to have a hard time imposing sanctions on China for something that it has repeatedly declared was legitimate activity…that said, there should be costs imposed on whoever did this, though we should probably never hear about what was done in return
Related: Hunt for Deep Panda intensifies in trenches of U.S.-China cyberwar Security researchers have many names for the hacking group that is one of the suspects for the cyberattack on the U.S. government’s Office of Personnel Management: PinkPanther, KungFu Kittens, Group 72 and, most famously, Deep Panda. But to Jared Myers and colleagues at cybersecurity company RSA, it is called Shell Crew, and Myers’ team is one of the few who has watched it mid-assault – and eventually repulsed it. Myers’ account of a months-long battle with the group illustrates the challenges governments and companies face in defending against hackers that researchers believe are linked to the Chinese government – a charge Beijing denies.
2. CogitAsia Podcast: S&ED Preview & Korea’s MERS Response | cogitASIA CSIS Asia Policy Blog CSIS Freeman Chair in China Studies Christopher Johnson joins to take stock of the U.S.-China relationship and previews what to expect at the bi-lateral Strategic and Economic Dialogue (S&ED) from June 23-24 //very succinct summary from Johnson, bottom line is do not expect much as any big deliverables will likely be held until Xi’s September visit to DC. But in the meantime expect China to make nicer noises, as they already seem to be doing…
Related: China Voice: Cooperation prevails over confrontation in China-U.S. ties – Xinhua Though progress has been made in China-U.S. relations since Xi and Barack Obama settled on building a new model of major-power relations during their first summit in June 2013, there are also some thorny issues between the two sides. The United States has intervened the South China Sea issue time and again lately. China firmly opposes it and reiterated that the united states is not a party in the South China Sea disputes, which are between China and other claimants and should be handled by those directly involved. The situation has many people pondering how the two countries can avoid “Thucydides’s trap” — the notion an established power becomes so anxious about the rise of a new power that a struggle leading to war becomes inevitable. And how can they build their new-model relationship featuring peaceful coexistence and common development? China and the United States should realize that the targeting of this new relationship is a strategic choice by both sides and requires unremitting efforts despite challenges. The sides have more incentives to enhance communication and cooperation than they do differences.
Related: Commentary: Upcoming China-U.S. dialogue key occasion for repairing trust – Xinhua For those with a pessimistic view on China-U.S. ties, the above-mentioned U.S. moves could be fatal to further development of bilateral relations. Indeed they are detrimental. Therefore, Washington should be wise enough not to let a loose tongue further harm its overall relations with Beijing, given the increasing interdependence between the two countries. The S&ED, designed to promote mutual understanding, augment mutual trust and broaden mutually beneficial cooperation, has proven an efficient mechanism for the two sides to manage their disputes so as not to affect the overall health of bilateral ties. To build a new type of major-country relations, the two countries have many challenges to conquer and it is always imperative for them to enhance mutual trust, which is essential to further growth of any bilateral relations.
Related: Chinese paper stresses common interests with U.S. ahead of dialogue | Reuters The commentary published in the People’s Daily, the flagship newspaper of the Communist Party, praised the “new model of major country relations” between the world’s two largest economies and stressed that differences could be overcome.
3. China Stocks Enter Correction as BlackRock Sees Bubble Bursting – Bloomberg Business I am still betting we will look back at year end and see last week’s sharp decline as another good buying opportunity…had some depressed friends and relatives Friday afternoon, though by Saturday they were all joking about how much they had lost…reminded me of the mornings after big losses on trips to Vegas and Macau with Chinese high rollers… // The Shanghai Composite Index sank 6.4 percent to 4,478.36 at the close on Friday. The gauge lost 13 percent this week, entering a correction after falling more than 10 percent from its June 12 high. About 400 Shanghai shares fell by the daily limit as a gauge of volatility jumped to the highest since 2009. Strategists at BlackRock Inc., Credit Suisse Group AG and Bank of America Corp. all issued bubble warnings this week after the market value of Chinese shares jumped by more than $6 trillion in 12 months.
Related: 祸股殃市的新股申购办法该终结了 _ 股票频道 _ 东方财富网 does China need to reform the process for buying IPOs? some blame last week’s sharp drop on the freezing of cash in advance of new issues…that money will be unlocked this week, though with the banks scramble for cash ahead of quarter end and 1H bank examinations money going into the markets could be a bit tight // 每逢新股申购周，A股市场就会上蹿下跳乱作一团。牛市气氛浓时，股市跌下去就会弹上来，所以大家也就习以为常，但本周大盘的连续跳水已经不能让投资者保持淡定了，新股申购周资金大搬家的负面影响放大到了极点，这种祸股殃市的“市值+资金”申购新股政策已经到了必须终结的时候。
Related: China Margin Debt Shrinks First Time in a Month Amid Stock Rout – Bloomberg Business The outstanding amount of margin debt on the Shanghai Stock Exchange fell to 1.479 trillion yuan ($238 billion) on Friday from a record 1.483 trillion yuan the previous day, the first decline since May 22. Shares sank 6.4 percent Friday to cap their worst week since the global financial crisis in 2008. A pullback by margin traders would undercut one of the biggest drivers of the rally that’s lifted the Shanghai Composite Index up 121 percent in the past 12 months. Most of this year’s biggest declines in the gauge, including a 6.5 percent slump on May 28, were sparked by investor concerns over margin-trading restrictions. The regulator announced plans June 12 to limit the amount brokerages can lend for stock trading.
4. McClatchy-Will China finally fulfill Nicaragua’s dream of an inter-ocean canal? Colossal. Mammoth. Vast. There’s almost no other way to describe the proposal to build a 170-mile, inter-oceanic canal across Nicaragua, and while the plan has been greeted with widespread skepticism, powerful global forces may also coax the project forward. Those forces include the rising economic might of China, the suspected backer of the proposal, and the emergence of ever-growing number of mega-ships that can’t pass through an expanded Panama Canal but could transit the one proposed for Nicaragua.
5. The great well of China | The Economist America is relying more on its own shale oil and gas and buying less fuel from the Middle East. In 2000 the region exported 2.5m barrels of oil a day to America; that dropped to 1.9m by 2011. By 2035 the International Energy Agency predicts America will buy only 100,000 barrels a day and 90% of Middle Eastern oil will flow to Asia. Arab leaders such as Egypt’s Abdel-Fattah al-Sisi are keen to woo Chinese investors. They need cash to fix their crumbling roads and dilapidated ports. Mr Sisi and almost every other Arab head of state have visited Beijing since 2012. Chinese firms are building Tehran’s metro, two harbours in Egypt and a high-speed railway between Saudi Arabia’s holy cities of Mecca and Medina. Factories in a Chinese-run special economic zone at the Suez Canal churn out plastics, carpets and clothing. On June 15th Egypt and China signed an agreement for $10 billion-worth of new projects.
6. 许昆林谈中国反垄断调查：每次出发时听交响乐壮行财经上下游澎湃新闻-The Paper Oriental Outlook interviews Xu Kunlin, former head of the anti-monopoly bureau at the NDRC. Those subject to his investigations may quibble with some of his comments… // 《瞭望东方周刊》：美国商会也曾指责你们的取证调查执法粗暴。譬如2014年8月4日突击查访奔驰上海办事处，调取了电脑里的数据资料，并约谈多名高管。 许昆林：所谓粗暴就是指我们的突袭调查，我们都给他们作过解释。 事实上这种突袭调查，也是我们和美方交流的时候，美方教我们的。反垄断案件的调查执法包括：发现线索、调查取证、研究处理、作出处罚等多个阶段，其中调查取证是最关键的。如果不突袭，证据很容易丢失、毁灭，美国的反垄断执法部门也是这么做的。《瞭望东方周刊》：也有一种说法是，你们不允许被查企业请律师？ 许昆林：根本就不是这样的。我们与高通公司沟通，对时间、地点、人员数量都不限制。他们每次都聘请了中国律师，全程在场。
7. The Mayor vs. the Mogul – POLITICO Magazine When reporters Mike Forsythe and Shai Oster learned of the decision, they demanded a conference call with Winkler. Forsythe set his voice recorder by the speaker. Winkler explained that if Bloomberg published the story, the company would be kicked out of China. Then he brought up Nazis. He’d been reading about Nazi Germany and how reporters made concessions to work within the Third Reich. Bloomberg would have to operate similarly in China. To an extent, the company already did, by tagging sensitive stories with a “code 204” to prevent them from appearing on terminals in China. But the upshot was clear: Unless they carried the promise of a Pulitzer, stories that might seriously damage Bloomberg’s China business should not be pursued. A few days later, headquarters spiked another article, about the children of prominent Chinese officials employed at foreign banks. ..What has never circulated beyond company walls is that Mike Bloomberg himself defended the China capitulation as forcefully as anyone in the organization. // would love to hear the recording of the Winkler call
8. Allen Iverson trip to China ruined by Chinese agents – Basketball Buddha So now that Hefei was over, Iverson had one last stop, Daqing, China. Daqing was supposed to be the first city Iverson visits but it got delayed due to unprepared documents by Li Dong and David Lee (the visas which Abdur-Rahim travelled to Washington to obtain). In each city, local promoters were lied to by David Lee and Li Dong. So with that in mind, the mayor of Daqing decided to cancel the game. In an effort to make Iverson breach the contract, Li Dong insisted on canceling the tour. “They wanted me and Iverson to breach the contract by us canceling the tour on our own will. Despite all that Iverson still wanted to continue the tour. More importantly, he didn’t want to disappoint his fans. So we went to all the events,” says Abdur-Rahim. Iverson and the crew all made it back to America safe and sound. But the damage remains in China. Iverson’s fans were completely misled and misinformed causing a bad spell on his image. Li Dong and David Lee, two Chinese agents looking to become big players in the market had no regard for proper business etiquette. They took this opportunity as a cash grab, without any consideration for Iverson or his fans, they saw dollars signs and stopped at nothing to grab it. While Iverson still loves his fans in China, he had this to say, “I will never come back to China because of David Lee and Li Dong.”
BUSINESS, ECONOMY AND TRADE *
人民日报：货币政策还有空间 稳健基调不变_网易财经 People’s Daily Overseas Edition says monetary policy still has room // 近日，中国人民银行发布的《2015年第2季度银行家问卷调查报告》显示，59.5%的银行家认为当前宏观经济“偏冷”，较上季上升4.9个百分点。而对于下季度的货币政策，有45.8%的银行家预期为“趋松”，另外51.8%的银行家预期为“适度”。这一调查结果加上此前部分央行货币政策委员会成员的调整，让市场各方格外关注未来货币政策的走向。专家表示，当前中国经济处在筑底期，各项稳增长措施正开始显效，低通胀的环境并未改变，货币政策仍将继续围绕企业“融资难”问题精准发力。
Humphrey shattered by time in Chinese jail – BBC News Speaking over a welcome pint of Guinness in the bar at Heathrow airport, he was clearly angry, saying Chinese prison authorities had denied him treatment for a prostate problem which has now become a tumour. “I was constantly harassed in prison over signing a thing they call an admission of guilt and a statement of remorse,” he said. “I never signed those documents because I did not admit to having committed that offence as charged. “Therefore, that’s why they tried to extort this confession by withholding medical attention for my prostate condition.”
Yuan’s Peg-Like Stability Makes China Hottest Asian Carry Trade – Bloomberg Business “China’s determination in getting the yuan into the special drawing rights system has altered the bearish view on the yuan,” said Ben Yuen, Hong Kong-based head of fixed income at BOCHK Asset Management Ltd., which oversees about $8 billion of assets. “We expect the yuan to remain stable and we find Dim Sum corporate bonds attractive.”
China relaxes e-commerce investor rules for foreigners – Xinhua just in time for SE&D? or directed at allowing US-listed Chinese ecommerce firms to list on domestic market without restructuring away their VIEs, as this article 工信部：电商类中概股可不拆VIE 直接回A股 suggests ? // The MIIT said in a brief statement that it would open up the online data processing and transaction processing businesses to foreign investors. The new policy will enable more foreign companies to compete with local firms, thereby driving the sector to higher standards, the MIIT said. The move is an expansion of a pilot scheme launched in January in the Shanghai Free Trade Zone.
U.S.-Listed Chinese Tech Firms Pursue Relisting at Home – Barron’s buyers jumping into the U.S.-listed shares should beware: Only three deals this year rewarded shareholders with prices above their IPO offerings. The take-out premium to existing prices hasn’t been generous, either. In the case of mobile game publisher iDreamSky (DSKY), the buyout offer of $14 a share was below the previous close. Four company insiders own 66% of the shares, according to S&P Capital IQ. As a result, there’s little minority shareholders can do. Instead of chasing laggards, the more interesting play could be big companies with assets that can realize more value in China’s stock markets.
Sinology by Andy Rothman – A Chinese Swap Meet China has begun a program designed to clarify the size of its local government debt burden and reduce its financing costs. Swapping cheaper bonds for more expensive loans is an important step toward creating a healthier fiscal system. But it is equally important to understand what this program will not do. It isn’t a bailout, it won’t lead to local government defaults and it isn’t a Chinese version of quantitative easing (QE).
China stock regulator says official fired for alleged irregularities China’s stock watchdog said on Saturday it has dismissed the head of its share issuance bureau because of suspected illegal stock trading by her spouse. The China Securities Regulatory Commission (CSRC), in a statement on its official microblog-style Weibo account, said the official, Li Zhiling, was suspected of criminal activity and had been handed over to police.
配偶违规买卖股票 证监会查处发行部处长李志玲（更新）金融频道财新网 Caixin with more details on the Li Zhiling case, says related to stock trading by her husband among other things, and that the CCDI questioned her several times about a year ago
Insight – Chinese firms pour money into U.S. R&D in shift to innovation Annual flows of Chinese FDI into the United States have gone from tens or hundreds of millions of dollars per year between 2000 and 2009 to $14.3 billion in 2013 and $11.9 billion in 2014, according to Rhodium Group figures, which are widely cited because they track China’s investments made via third countries such as Singapore. That is now approaching the annual flows from America’s traditional sources of FDI: advanced countries such as Germany and Canada who continue to mine much more knowledge from Americans than does China. German companies extracted 1,416 patents last year using U.S. researchers.
How Chinese Billionaire Li Hejun’s Solar Bet Soured – WSJ interesting summary, doesn’t time him to anyone powerful, which was one of the hypothesis about why the stock was soaring…the folks short Hanergy are stuck and paying interest while trading is halted, no? // Hanergy founder, once China’s richest man, now faces company investigation after stock implosion
China spends billions in housing renovation – Xinhua The central government has allocated 185.9 billion yuan (30.5 billion U.S. dollars) to the renovation of run-down areas and dilapidated rural houses so far this year, the Ministry of Housing and Urban-Rural Development (MHURD) disclosed Friday. Specifically, 149.4 billion yuan was used to renovate run-down areas, while 36.5 billion yuan was allocated to rural housing, according to MHURD Vice Minister Wang Ning.
招行高管详解不良原因 山西银行业不良4.5%金融频道财新网 Shanxi bad loan ration at 4.5%, its Q1 GDP just 1%? Interesting comments from China Merchants Bank exec // 经济形势对银行资产质量压力加剧。比如山西省一季度GDP仅逾1%，山西银行业不良则高至4.5%。对于混业经营、混合所有制改革和分拆子公司等银行业热点，招行行长田惠宇表示，将深思熟虑，不会人云亦云地凑热闹
Italian Prosecutors Seek To Indict Bank Of China, 297 People-AP Italian prosecutors are seeking to indict 297 people and the Bank of China in connection with a massive money-laundering investigation reported by The Associated Press earlier this month. The suspects, mostly Chinese migrants living in Italy, include four senior managers of the Chinese state bank’s branch in Milan. According to prosecutors, at least some of the suspects used Mafia-like techniques, including intimidation, the ANSA news agency reported Saturday.
Barshefsky, Froman Back Pacific Trade Pact – WSJ The current U.S. trade representative, Michael Froman, and a former one, Charlene Barshefsky, sat down with The Wall Street Journal’s John Bussey to discuss the issue.
Trade Winds Blow Ill for Hillary – The New York Times As secretary of state, she helped Obama push the Trans-Pacific Partnership that is at the center of the current trade fight. In Australia in 2012, she was effusive, saying that the trade pact “sets the gold standard in trade agreements to open free, transparent, fair trade, the kind of environment that has the rule of law and a level playing field. And when negotiated, this agreement will cover 40 percent of the world’s total trade and build in strong protections for workers and the environment.” Now Hillary says she is unsure about the pact and would likely oppose giving President Obama the special authority to negotiate trade deals for an up-or-down vote in Congress. //disturbing lack of political courage about such a vital issue to US economic and national security interests
Shanghai Stocks Offer Little Fuel for China’s Economy – WSJ In developed markets like the U.S., rising stock markets sometimes boost consumer spending and help spur growth. But in China, that effect appears to be nonexistent. The Shanghai Composite Index has jumped 122% in the past 12 months, but retail sales increased just 10% year on year in May and April, the slowest rate of growth in five years. The reason? At the most, one in 15 Chinese trade stocks, compared with more than half of Americans.
POLITICS AND LAW *
Chinese Communist Party cadre expelled over bribes for promotion | South China Morning Post The 65-year-old Zhejiang native’s final post before he retired in 2013 was senior political adviser in the province. He had headed Zhejiang’s organisation department until 2009 – a role that gave him tremendous power over the selection and appointment of party cadres. His eight-year tenure overseeing the party’s personnel matters saw him serve three former Zhejiang party bosses, including President Xi Jinping, National People’s Congress Standing Committee chairman Zhang Dejiang, and CCDI deputy chief Zhao Hongzhu, Thepaper.cn reported.
China busts group staging paid protests – Xinhua The group in question specialized in paying a “relatively regular” group of people who acted as mass protestors in the name of protecting the rights of petitioners and assisting lawyers advocating their rights, the ministry said in a late Sunday statement, citing police investigations. Among the detained is Zhai Yanmin, 54, the main organizer that paid people to stage protests, and Liu Jianjun, a lawyer who accepted cases from involved parties who hoped to influence judges and assigned them to Zhai. They are under the charge of staging illegal gathering to disrupt social order. “The group was close-knitted with specific assignments for its members, and their activities were seen in heated cases across the country,” the statement said. //男子策划“访民”滋事被刑拘 曾参与庆安枪击案
述评:真反腐败才能兴党兴国—中央纪委监察部网站 从严峻性上看，近年来腐败现象趋于严重，区域性腐败、系统性腐败、家族式腐败、塌方式腐败等不断发生。山西的塌方式腐败触目惊心，国家发改委、石油系统的腐败让人瞠目结舌。一个令计划，背后依附着兄弟、妻子、弟媳等一堆人的利益，真是拔出萝卜带出泥，查处一个牵出一窝。 特别是在反腐败斗争高压下，有些人仍然不收敛、不收手，还在顶风作案、我行我素。如谭力在中央巡视组已经进驻海南时，还肆无忌惮与老板们打高尔夫球；韩先聪在中央纪委对他宣布立案调查决定的当天，手机信息还显示其中午晚上各有一次饭局。
经济参考网 – 国家将建重要网络设施安全保护制度 能源、金融等行业和医疗卫生等领域实行安全等级保护制度 针对网络安全的国家监管正在逐步加码。《经济参考报》记者日前从权威渠道获悉，近期国家开始启动国家信息安全审查、关键基础设施保护和互联网信息服务等方面的专项立法，目前立法草案第一轮针对行业内的征求意见已经结束，按照计划最快有望明年出台，其中一项重要内容是下一步国家将有望建立重要网络设施安全保护制度并由国务院制定具体保护办法。 记者了解到，目前针对网络信息安全立法工作，国家有关部门已经召集了三大运营商和包括华为、阿里、腾讯、百度、360在内的互联网巨头进行讨论和修改，下一步将会向公众征求意见。
Xi emphasizes food safety, big data on Guizhou trip – Xinhua During his trip, Xi visited a small supermarket at a highway service area on his way from the city of Zunyi to Guiyang, the provincial capital. Picking up a package of snacks, Xi asked a member of the supermarket staff about its expiration date and was told it would expire at the end of this year. Xi also inspected two street-side food stands which sold stewed duck necks and other local foods. In China, substandard foods have been a safety concern in recent years. In Guiyang, the president visited a big data research center where more than 400 enterprises gathered to develop the technology. Xi talked to the heads of companies engaging in building Internet hospitals and affirmed their plans of offering high-end, online health services, which will gather 1,000 top doctors. Xi was also shown a miniature 3D-printed drone built by a laser technology company and was told about big data usage in disaster relief operations.
新华网评：争做“中国好网民” 守护美好网络生活-新华网 日前，由国家网信办指导，新华网主办，人民网、中国网、央视网、中国新闻网、光明网、新浪网、腾讯网、新浪微博等网站协办的“2015中国好网民”流行语和故事征集活动正式启动。据国家网信办网络社会工作局负责人表示，此项活动是“2015中国好网民”系列活动之一，除此之外，还包括网络大讲堂、第十二届全国法治动漫微电影作品征集活动、公益广告设计大赛、网络媒介素养研讨会等十项活动。
上海市委原常委徐麟调任中央网信办副主任新闻腾讯网 head of Shanghai propaganda department Xu Lin becomes deputy director of general office of cysberspace affairs leading group // 2008.02——2013.05 上海市委常委、浦东新区区委书记 2013.05——2015.06 上海市委常委、宣传部部长
Closer Look: Applying the Law Against Child Trafficking-Caixin An online statement calling for capital punishment across-the-board for child traffickers has gone viral on the social networking app WeChat in recent days, setting off heated debate over how to deal with a growing spate of child kidnappings in China. The source of the WeChat article containing purported images of abducted children which was circulated some tens of thousands times has yet to be confirmed. Some legal academics dismissed the campaign as “collective hooliganism,” while others have tried to cool the discussion by saying that such calls are unfounded and at odds with the rule of law.
Jonathan Mirsky: China’s Panchen fires a surprise ‘poisoned dart’ at Beijing- Nikkei Asian Review China’s 11th Panchen Lama, Tibet’s second-highest religious leader, “discovered” and installed by Beijing, recently expressed alarm that Buddhism in Tibet may soon exist in name only because of a shortage of monks — the implication being that the shortage was due to Chinese policy. Will this unexpected criticism be seen as a “poisoned arrow” by the Chinese Communist Party, like the one for which his predecessor, the 10th Panchen Lama, was punished in the 1960s? And if so, will he, also, face punishment?
The Useless Tree: Thoughts on Yu Ying-shih’s brief reflection on “Confucianism’s Kiss of Death” The title of the post is: 余英时：大陆提倡儒家是儒家的死亡之吻, which runs something like: “Yu Ying-shih: The Confucianism Promoted on the Mainland is Confucianism’s Kiss of Death.” Yu is a long time critic of the CCP regime in the PRC. Thus, it is unsurprising that his comments express a certain skepticism regarding how Confucianism might be used there now. I share a good deal of that skepticism, but I would raise a question with one aspect of Yu’s approach.
31省公安厅长7人由公安部空降 23人兼任政府副职新闻腾讯网 “政事儿”小编梳理发现，目前全国31省份中，除了广西壮族自治区和宁夏回族自治区两省的公安厅长暂时空缺以外，其他29省份中有7省份的公安厅长系从公安部“空降”，17省份的公安厅长系异地调任。 值得一提的是，23省份的公安厅长同时担任政府副职。另外，由省政法委书记兼任的公安厅长只剩下湖南一省。
FOREIGN AND DEFENSE AFFAIRS *
US-China: Shifting sands – FT.com The White House is still committed to an approach that involves engaging China and hedging against its increasing military power. It will emphasise the potential for co-operation when the two governments meet in Washington this week for an annual summit, known as the strategic and economic dialogue. But among the former officials, analysts and think-tanks who set the tone for the broader Washington debate, there is an urgent search for a plan B. The proposals range from major military spending to cutting a grand bargain with Beijing but they are all rooted in a fear that the status quo cannot hold.
The 2015 Chinese Defense White Paper on Strategy in Perspective: Maritime Missions Require a Change in the PLA Mindset | The Jamestown Foundation-Dennis J. Blasko This year’s white paper does not provide specifics about the impending changes the PLA is soon to undertake. It does, however, provide a general outline of topics to monitor as the force undergoes a complex modernization and transformation. Based on the call for a greater maritime orientation in the force, we can expect to see reductions in the number of Army personnel and Army units in coming years, which will automatically raise the percentage of the other services’ personnel in the total force (currently Army and Second Artillery personnel make up over 70 percent of the 2.3 million active duty PLA, while the Navy consists of about 10 percent and the Air Force about 17 percent). A major question is whether the other services will be expanded by receiving some of the personnel billets from the reductions in the Army. Will more Navy admirals and Air Force generals be elevated to the Central Military Commission? Will Navy admirals and Air Force generals be tasked to command operations away from China’s shores? Will logistics forces be created or expanded to support extended operations outside of China? How will the PLA education system be adjusted to prepare officers and noncommissioned officers for the new tasks and mental outlook ahead? The shift to a more maritime-oriented mindset and force structure is an evolutionary step necessitated by growth in all aspects of China’s comprehensive national power
White Paper Expounds Civil-Military Relations in Xi Era | The Jamestown Foundation Perhaps the most lasting impact of the preponderance of the military sector is that this could predispose the spread of a kind of “war culture” especially among young Chinese. It is not coincidental that General Liu Yuan is a keen proponent of the quasi-militarization of everyday life. Liu noted in a controversial 2010 article that war culture “has crystallized the most time-honored and most critical intelligence of mankind” (Seeking Truth, September 1, 2010; People’s Daily, August 3, 2010). More recently, Major-General Xu Aishui, a much-published author, has argued that “in terms of military thought, superior traditions and institutional design, the unique culture of the people’s army has breached the front ranks of world civilization.” The veteran political commissar and military strategist urged the leadership to build up a “space culture, maritime culture and Internet culture that are compatible with a strong army, so that soldiers can demonstrate their charismatic culture in [different] arenas” (Guangming Daily, May 28). The relentless militarization of national life could have lasting consequences for China’s socio-political development as well as its relations with the world.
China seeks well-educated students for army – Xinhua Priority will be given to better-educated young people in army recruitment, according to a national conscription tele-conference on Friday. A recruitment website, gfbzb.gov.cn, run by the Ministry of National Defense, is open for applications, with recruitment procedures including body check-ups beginning on Aug. 1 until Sept.30.
Interview: China, U.S. should rise above pessimism, cynicism – Xinhua To pursue a more robust relationship, China and the United States should demonstrate to the world their ability to rise above pessimism and cynicism, said Cheng Li, an expert on China at the Brookings Institution, a renowned U.S. think tank. China and the U.S. should continue to seek consensus and enhance cooperation in various fields in a bid to help maintain world peace and economic prosperity, Li, director of John L. Thornton China Center at Brookings, told Xinhua in an exclusive interview ahead of the major talks between the two countries this week.
North Korean drought is hobbling the power supply, and the economy with it – The Washington Post Now, after a dry 2014 followed by an unusually dry winter and a dearth of rainfall over the spring, North Korea is facing a devastating drought and severe power shortages. More than 60 percent of its electricity comes from hydropower, but the rivers and dams are running low.
Beijing-Based Writer Jiu Dan Accuses Spanish Ambassador of Striking Her | the Beijinger On Thursday, Jiu Dan staged a one-woman protest at the gate of the Embassy of Spain in north Sanlitun, writing “Protest Spanish Ambassador Manuel beating a Chinese female writer” on an umbrella. She left of her own accord after Spanish embassy staff called the police…She has apparently written a fictionalized account of her alleged affair, entitled Ambassador
TECH AND MEDIA *
Pictures of Chinese People Scanning QR Codes — Chrysaora Weekly — Medium In China, however, people scan QR codes all the time. There are two major factors that give QR codes a leg up in China. 1. For most Chinese people, the typical URL for a Chinese site is only slightly more human-readable than a QR code; The install base for QR code scanning capabilities is simply way larger. // because of Wechat…Snapchat seems to be copying some of Wechat’s QR functionality, Facebook and Twitter should follow
Full speed ahead in China’s taxi app war – FT.com Didi is facing an increasing challenge from Uber, the San Francisco-based ride-hailing app that is moving into China on a sea of venture capital-financed subsidies for drivers. It claims to be gaining ground on Didi, although the Analysys study suggested that it only held about 11 per cent of the Chinese premium ride-hailing market. Uber drivers report that subsidies can be as high two or three times the fare, although only in certain circumstances. The company has refused to confirm the size of the driver payments.
SOCIETY, ART, SPORTS, CULTURE AND HISTORY *
The Chinese Want Their Art Back – The New York Times As Paul Harris, a leading British dealer of Chinese art, wrote in a blog post in March: “The general feeling in intelligence circles is that this was ‘an ordered job’ carried out by local French professional criminals acting as agents for a third party. That third party is almost certainly abroad, well away from French jurisdiction and, according to one intelligence expert, ‘The smart money is on the artifacts being on the way to the People’s Republic of China.’ ”
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH *
经济参考网 – 国家地下水监测工程获批复 正式启动建设 underground water monitoring project approved // 摘要：国家地下水监测工程主要建设任务包括：国土资源部与水利部共同建设1个国家地下水监测中心，国土资源部建设10103个地下水监测站点、31个省级地下水监测中心和信息节点，改建2个地下水均衡试验场、1个地下水与海平面综合监测站。 日前，由国土资源部、水利部联合报送的国家地下水监测工程初步设计概算由国家发展和改革委员会核定并正式批复，标志着国家地下水监测工程已由申报和设计阶段转向建设阶段
Study Maps Concentrations of Antibiotics in Chinese Waterways – NYTimes Rivers near Beijing and Tianjin in the north and in the Pearl River Delta in the south contain some of the highest concentrations of antibiotics in China’s waterways, according to a study that cites the overuse of the drugs in humans and farm animals. China has about a fifth of the world’s population, but it accounts for nearly half of the world’s consumption of antibiotics, according to the study, conducted by the Guangzhou Institute of Geochemistry, under the Chinese Academy of Sciences
China’s super “eye” to speed up space rendezvous – Xinhua Chinese space experts have developed the world’s most sensitive “eye” that enables the autonomous rendezvous and docking of two spacecraft — flying eight times faster than bullets — more efficiently and safely. The “eye” is China’s newly developed third-generation rendezvous and docking CCD optical imaging sensor. It will be used on China’s second orbiting space lab, Tiangong-2, the Chang’e-5 lunar probe and the permanent manned space station, according to China Academy of Space Technology (CAST).
AGRICULTURE AND RURAL ISSUES *
Building Better Schools in Rural Areas Worth the Price, Say Experts-Caixin The death of the four children has brought to the fore rural education problems faced by “left-behind children” – rural kids who remain at home while their parents take up jobs in big cities, said Ye Jingzhong, dean of the College of Humanities and Development Studies of China Agricultural University. Schools in villages have served as rural community support networks, particularly for left-behind children, said Ye. However, central government measures which shuttered some 370,000 rural schools from 2001 to 2012 drastically altered the social resources available to vulnerable migrant worker children. Fewer schools in rural areas has resulted in children either being forced to travel long distances to attend class, or to live further away from their families.
Xi stresses rural poverty relief – Xinhua President Xi Jinping has stressed poverty relief in underdeveloped rural areas as key for economic development nationwide. Xi made the remarks on Thursday at a Communist Party of China symposium on poverty relief and economic and social development in the 2016-2020 period. “The most arduous task for achieving a well-off society in an all-round way lies in the rural areas, especially the impoverished ones. Party committees and governments at all levels should strive for a scientific poverty relief plan,” Xi told attendees. // 习近平：确保农村贫困人口到2020年如期脱贫
More policies to encourage rural startups – Xinhua The State Council, China’s cabinet, has announced policies to encourage migrant workers, college graduates and discharged soldiers to return to their rural hometowns and start small business. Issued on Sunday, the policy package is the latest move to encourage entrepreneurship and innovation and create jobs, in order to drive economic growth.
国务院办公厅关于支持农民工等人员返乡创业的意见_政府信息公开专栏 State Council opinion on encouraging rural entrepreneurship // 支持农民工、大学生和退役士兵等人员返乡创业，通过大众创业、万众创新使广袤乡镇百业兴旺，可以促就业、增收入，打开新型工业化和农业现代化、城镇化和新农村建设协同发展新局面。根据《中共中央国务院关于加大改革创新力度加快农业现代化建设的若干意见》和《国务院关于进一步做好新形势下就业创业工作的意见》（国发〔2015〕23号）要求，为进一步做好农民工等人员返乡创业工作，经国务院同意，现提出如下意见
土地权利 – YouTube Laohu Miao documentary about a land dispute in Gansu // 发生在甘肃省永靖县红柳台村的一场土地纷争，凸显公权力的傲慢。
BBC News – The village and the girl She spent her childhood working in the fields, feeding the family’s pigs. The destruction of rural China became for Xiao Zhang a liberation – and an opportunity. This is the story of how her life changed as much as her country. In 2015, Xiao Zhang’s former home, White Horse Village, is long gone. A new city which stands in its place is full of slogans painted in urgent red. The one above her head reads: “Justice, efficiency, cleanliness, serving the people!”
FOOD AND TRAVEL *
Q. and A.: Peter J. Li on the Clash Over Eating Dogs in China – NYTimes Peter J. Li, an associate professor of East Asian politics at the University of Houston-Downtown and a China policy adviser with Humane Society International, has studied and written about animal protection and wildlife conservation in China for the past 15 years. In an interview, he discussed dog eating in China and the conflict between those who defend the practice as part of their cultural heritage and those who increasingly view dogs as cherished companions. Excerpts follow:
Thousands of dogs and cats slaughtered at China festival despite government promises to crack down – Telegraph Thousands of cats and dogs have been slaughtered at the Yulin Festival despite government promises to end the practice which has been condemned internationally on grounds of animal cruelty. Hundreds of traders gathered in China’s southern Guangxi province on Sunday for the annual feast where dogs are served with lychees to mark the summer solstice.
BOOKS AND LITERATURE *
Is China the perfect setting for crime and spy thrillers? | Asia House Canada-born British Adam Brookes claims to have had real-life experience of the Chinese espionage world during his tenure working for the BBC in Beijing, which inspired his fictional spy thriller Night Heron (2014). Meanwhile Chinese policeman-turned-writer A Yi (real name Ai Guozhu) says a growing Western-style “ennui in modern Chinese society” inspired his noir existentialist novel A Perfect Crime (published in Chinese as Xiamian Wo Gai Ganxie Shenme in 2012 and published as A Perfect Crime in English in 2015). He felt that China was therefore the perfect setting for books like his.
What Do Beijing’s Blue Skies Really Mean? It’s Too Soon to Say | Paulson Institute Bottom line: So far, Beijing has had significantly cleaner air in 2015 than the prior two years, and the comparison holds true even when accounting for wind and humidity. Lower emissions from neighboring cities may have played a role in improved air quality in Beijing. Government actions to shut down Beijing-area coal plants, enforce tighter environmental standards and retire polluting vehicles are important and laudable, but it is still too early to call a clear trend, since 2013-2014 were especially polluted years, especially the winter months. While we can’t yet say whether environmental policy moves such as shutting Beijing’s coal plants are at the root of the recent improvement, actions like these are crucial to putting the Jing-Jin-Ji region on the right path toward cleaner air and, ultimately, a more stable climate.
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