The Sinocism China Newsletter 07.15.14

Today’s Links:

THE ESSENTIAL EIGHT *

Ties to Edelman Subsidiary May Have Ensnared CCTV Anchor – NYTimes.com Rui Chenggang taken away Friday, no official announcement, speculation centers on economic crimes though we do not know at this point. Edelman has been sucked in, could get ugly. Advertising and PR in China are especially dirty, if authorities decide to start digging into those industries there could be many people and firms, Chinese and foreign, who will be in pain// People’s Daily did not give further details, but the post appeared to confirm the central point of an article published online Sunday by Tencent [芮成钢曾参股爱德曼公关子公司 为央视提供服务 ], an Internet media company. The article said that in 2002, Mr. Rui and a business partner, Cao Gang, started a public relations company, Pegasus Communications, which was bought by Edelman in 2007. By November 2009, Edelman had an 84 percent stake in the company, while Mr. Rui had 7.9 percent and Mr. Cao had 8.1 percent…Tencent posted public financial documents showing that Mr. Rui sold his Pegasus stock in August 2010 to Mr. Cao, known in English as Steven Cao, who in October 2012 was promoted from Pegasus president to chief executive of Edelman’s main China interest, the Daniel J. Edelman China Group. People’s Daily also posted the documents on Twitter…Telephone calls to the Beijing office of Edelman went unanswered, as did messages sent to Edelman email accounts in the Beijing and New York offices.

Related: Edelman Begins Internal Inquiry After Detention Of CCTV Anchor Rui retained 7.92% of Pegasus, according to Edelman, until 2010, when his shares were acquired by co-founder Steven Cao, who is now CEO of Edelman parent company DJE in China. DJE vice-chairman Alan VanderMolen, who inked the Pegasus deal while running the firm’s Asia-Pacific operations, told the Holmes Report that Edelman is taking the situation “very seriously.”//this is a big problem for Edelman, could trigger legal jeopardy in PRC as well as attract an FCPA investigation from the US DoJ. Will be interesting to watch how professional spinners try to spin this, so far not answering the phones and ignoring emails is not what crisis PR firms usually advise

Related: CCTV Financial News Anchor Rui Chenggang Is Detained – Caixin Caixin broke the story Friday, still no official announcement  //  CCTV sources said that the National Audit Office found more than 1 million yuan in cash in Li’s [Li Yong, also detained Friday] department last year. A source close to the matter said there was no conclusion that Li was involved with the money because the audit was still underway and such operations were common at CCTV. He said the current inquiry is not linked to that incident. A mid-level manager at CCTV said Li and Guo had been at odds.

Related: 央视财经频道已有8人被带走调查 包括1名女主持|芮成钢|央视财经频道窝案_新浪新闻 so far 8 people from CCTV’s Finance channel have been detained

Rhodium Group » China’s Fiscal and Tax Reforms: A Critical Move on the Chessboard On June 30th China’s top leaders endorsed broad reforms to the nation’s tax system and center-local fiscal dynamics, and, critically, set out a near-term 2016 deadline for completing substantial reforms to ensure that the longer-term reform agenda has a chance to be complete by 2020. Tax and center-local reforms are the thorniest and most fundamental elements of a true overhaul of China’s economic system, so while this move in no way assures reform success, it is a powerful indicator of intent and timing. This move enhances the possibility of sincere market reforms in the medium-term. In this brief analysis we review the context of these reforms, discuss the renewed tasks and objectives, and contemplate the implications of this interim reform deadline.

Power Shift: Hopeful Signs in China’s Legal Reform Plan – China Real Time Report – WSJ Judicial reforms being undertaken in China could, in theory, curtail a long-standing the problem with the country’s legal system: the ability of local government to conceal illegal activities through their control over local courts. The Central Leading Group for Judicial Reform of the Chinese Communist Party announced the reform measures last month and an overview of a new five-year plan issued by the Supreme People’s Court on Wednesday signals a serious intention to implement them.

Related: Shanghai pilots greater judicial independence – Xinhua “The responsibility system aims to tackle the administrative intervention in courts and avoid the practice of ‘trying but not judging’,” said Zou Rong, professor at the East China University of Political Science and Law. Greater judicial power will also come with greater responsibility, as trial judges and procurators will assume a lifelong accountability to their cases, which means they will be called into account for previous miscarriage of justice. The plan will also require the judges and procurators at district or county-level courts to be nominated by provincial-level judicial authority. Funds of local courts will also come from the provincial, rather than the local finance.

Sinica Podcast-Education in China This week on Sinica, Kaiser Kuo and David Moser are joined by Jiang Xueqin, deputy principal of Tsinghua Fuzhong Affiliated High School and author of Creative China, for a discussion of the education system in China. Specifically, we’re curious to find out how China’s education system ranks internationally, how the politics of education play out here, and all the unscrupulous top-down planning that goes into modernizing Confucian education while maintaining political orthodoxy.

Findings of graft probe into former security chief Zhou Yongkang set to be revealed | South China Morning Post Duowei reported something similar in last couple of weeks //  The formal announcement of the findings in the corruption investigation of retired national security chief Zhou Yongkang could come at about the time of an earlier-than-usual annual party meeting late next month. Sources said the authorities were worried the disgrace of Zhou, who was in charge of law and order for more than a decade, would shake the public’s confidence in the legal system. Party leaders have decided to put more emphasis on the rule of law during the plenary session, said the sources, who include senior law enforcement and propaganda officials.

Logistics: The flow of things | The Economist Logistics spending is roughly equivalent to 18% of GDP, higher than in other developing countries (India and South Africa spend 13-14% of GDP) and double the level seen in the developed world. Li Keqiang, the prime minister, recently echoed industry’s complaints that sending goods from Shanghai to Beijing can cost more than sending them to America.//huge opportunities to improve this

Related: Blackstone’s Schwarzman Prefers China Warehouses | Mingtiandi Stephen Schwarzman, chairman and CEO of the US-based private equity firm was in Beijing last week and had a few views on the market. “Industrial warehouses in China are very interesting, and are set to benefit as Internet and retail sales increase,” Schwarzman told the China Daily. “So are office buildings and shopping centers,” he added.

Related: 商务部官员公开批马云:到处拿地 走歪了_网易新闻中心-网易新闻客户端 A Miinstry of Commerce official from the ecommerce department openly criticized Jack Ma last Friday for “going astray” with his buildout of logistics firm Cainiao  //  商务部官员上周公开批评马云:如果马云做一个物流的第四方智慧平台,我觉得对国家作出重大贡献,但是发现他到处建物流基地建仓储,原因是因为经不住诱惑。 成立已满一年的菜鸟网络,仍被上海快递公司看不明白,“不知道它是干什么的,也不知道它想干什么。”中国商务部官员上周公开批评,马云和菜鸟网络“走歪了,到处建物流基地建仓储”。

5 key takeaways on global views of the U.S. and China | Pew Research Center As new revelations about America’s electronic surveillance efforts continue to emerge, a new Pew Research Center survey finds widespread opposition around the world to U.S. eavesdropping. Still, America’s overall image remains mostly positive. At the same time, however, people see the global balance of power shifting, with China on the rise, and the U.S. in relative decline. Here are five key takeaways on how the world views the U.S., China, and the superpower competition between the two major rivals.

Related:  MAP: How Asia is scared of China – The Washington Post “In all 11 Asian nations polled, roughly half or more say they are concerned that territorial disputes between China and its neighbors will lead to a military conflict,” read a Pew statement.

污地怎么办_专题频道_财新网 cover story of this week’s Caixin is on dealing with China’s soil pollution problems  // 亿亩污染耕地,治则难,不治则贻祸,怎么办? 是彻底修复还是仅进行污染物阻断? 这是中国在水污染、空气污染之外的又一大环境难题

 

BUSINESS, ECONOMY AND TRADE *

China demands wall around wealth management sector to cut risk | Reuters Banks must establish a separate department to carry out wealth management business by the end of September, the China Banking Regulatory Commission (CBRC) said on its website on Friday.

China’s Local Governments Pile On Stimulus – Bloomberg Northern Hebei province, whose 4.2 percent first-quarter expansion pace was less than half that of a year earlier, will invest 1.2 trillion yuan ($193 billion) in areas including railways, energy and housing. Heilongjiang province in the northeast, with 2.9 percent growth that was China’s lowest in the first quarter, will spend more than 300 billion yuan over two years in areas including infrastructure and mining.

Overcoming the Great Recession: Lessons from China – Harvard – Belfer Center for Science and International Affairs Liu He is worth listening to. A rare combination of scholarly analyst and policy advisor, he has emerged as Chinese President Xi Jinping’s right hand man on economic policy. The Chinese press has named him the “Chief Architect” of the current economic program to transform the Chinese economy. As Head of the Office of the Central Leading Group on Financial and Economic Affairs in the President’s office, he plays a role not unlike that which one of us had in the Obama Administration’s first term. In the aftershocks of the Great Financial Crisis of 2008, Liu led a research team that prepared an analysis of earlier financial crises to provide guidance for the Chinese government’s response. We arranged for that document to be translated and have published it here

Deutsche Bank: exit China bull, enter China bear – beyondbrics – Blogs – FT.com It’s been three months since Ma Jun – sell-side economist and well-known China bull – quit the world of investment banking and moved from Deutsche Bank to the People’s Bank of China. Now the German bank has found a replacement – poaching China bear Zhang Zhiwei from Nomura. With apparently rather divergent views on where the economy is heading, either Deutsche or Zhang is likely to be revising its forecasts pretty soon.

Shanghai most likely headquarters for BRICS development bank | Reuters Brazil, China, India, Russia and South Africa are due to sign off on the new institution on Tuesday, along with an emergency reserves fund, after two years of negotiations, a major step for the diverse group known more for its anti-Western rhetoric than coordinated action. Russian presidential adviser Yuri Ushakov told Kremlin reporters late last week that bank would be based in Shanghai, mainland China’s financial capital, citing discussion papers prepared by the member countries.

Mainland China Cracks World’s Top 10 List for Priciest Expat City – China Real Time Report – WSJ In the annual cost of living survey assembled by consultancy firm Mercer, Hong Kong jumped three places to rank as the 3rd most expensive city for expatriates in the world, while Shanghai and Beijing both rose four spots to number 10 and 11, respectively.

Coca-Cola offers expats China pollution-Australian Financial Review American beverage giant Coca-Cola is offering a hefty “environmental hardship allowance” to its ­China-based expatriate employees, as foreign companies struggle to attract and retain staff with many people scared off by chronic pollution. The allowance, which was introduced “recently”, is believed to be 15 per cent on top of an employee’s base ­salary. A company spokeswoman ­confirmed the introduction of a wage premium to The Australian Financial Review, but declined to comment on the amount.

借道葆婴押注中国市场 优莎娜涉嫌非法多层次直销 – 智在公司 – 《中国经营报》官网 China Business Journal says Usana engaging in illegal multi-level marketing in China //  直销行业风波不断。 葆婴作为美国纽交所上市公司优莎娜(NYSE:USNA)的全资子公司,扮演着优莎娜通过直销进军中国保健品市场的桥头堡角色。不过互联网上关于优莎娜涉嫌传销的质疑不绝于耳,其细胞式奖励的薪酬制度,使得经销商们努力通过不断发展下线来提高自己的收入。   此外为了吸引新的成员加入,夸大直销的行业前景,夸大对优莎娜的产品描述,成为了部分葆婴直销团队们的常用手法。   而在质疑声背后,优莎娜在亚太地区的业绩却在不断增长中,公司的发展重心早已转移到中国法律上不允许的多层次直销市场。

铁路再推列车商业冠名权 年租金近千万_公司频道_财新网 Railway Bureau wants 12m RMB/year for naming rights to a train…

消息称长沙将取消限购 政府文件即将发布_财经_腾讯网 reports that Changsha about the become the next city to end housing purchase restrictions

黑龙江最大钢企西林濒临破产 建行农行风险暴露_21世纪网 Xilin, largest steel firm in Heilongjiang, is on the verge of bankruptcy reports 21st CBH //  为了帮助钢厂脱困,许多地方政府主动出面和当地银行进行协调,帮助钢厂进行融资。于是,地方银行又不得不面对在高风险下继续为钢铁企业进行融资的“尴尬”。

Chinese program halted on laundering claims | Business Spectator The CCTV report brought to light a trial program the PBOC launched about two years ago that allowed a few approved banks, including Bank of China, ICBC and China Citic, to start offering cross-border yuan remittance services for Chinese individuals through their branches in the southern province of Guangdong. The PBOC never publicly announced the program because it intended to carry out the trial quietly, the people familiar with the matter said.  “The program itself is neither illegal nor improper as it’s been approved by the central bank, but the question is if any particular bank has gone too far by offering clients services they are not supposed to,” said a senior executive at a big state-owned bank in Beijing. “We all had to put a brake on it before the central bank draws a conclusion from its investigation.”

 

POLITICS AND LAW *

改革是块试金石_网易新闻中心 “Reform is a Touchstone” editorial on page 1 of Tuesday’s People’s Daily  //  新一轮改革大潮已经起势,其成败直接关系两个百年目标的实现。增强发展的内生动力,需要加快简政放权的步伐;推进新型城镇化,亟盼户籍制度改革的推进;构建现代财政制度,必须有财税制度改革的深化;加强党风廉政建设和反腐败斗争,离不开党的纪检制度改革;满足人民对公平正义的需求,呼唤司法体制改革的提速……解决当前所面临的突出矛盾和挑战,我们比任何时候都需要通过改革释放制度新红利、注入发展新动力;落实中央对全面深化改革的部署和要求,既是当前工作的头号任务,也是领导干部肩负的神圣使命。

China Exclusive: GSK China’s private-eye agents indicted in Shanghai for illegal investigation – Xinhua  Prosecutors in Shanghai have indicted a foreign couple for illegally obtaining private information of Chinese citizens, prosecutor sources said on Sunday. The couple, Peter William Humphrey, a 58-year-old British national, and his wife Yu Ying Zeng, a 61-year old American, were arrested in last August. They were hired by GlaxoSmithKline (GSK) China’s Mark Reilly as private eyes in 2013. It is the first indictment Chinese prosecutors have announced on foreigners for illegal investigation.

SW China official dismissed for suspected discipline violation – Xinhua Zhang Tianxin was removed from his post as a member of both Yunnan provincial Communist Party of China (CPC) Committee and Standing Committee, for suspected violation of disciplines, the CPC Central Commission for Discipline and Inspection (CCDI) said on Saturday. Zhang was formerly the Party secretary of Kunming, capital city of the southwestern Yunnan Province.

E China senior political advisor under investigation – Xinhua Han Xiancong, a senior political advisor of east China’s Anhui Province, is under investigation for suspected serious discipline and law violation, the discipline watchdog of the Communist Party of China (CPC) said Saturday. Han is vice chairman of the Anhui Provincial Committee of the Chinese People’s Political Consultative Conference.

本网推出“推进党的纪律检查体制改革”图解——要闻——中央纪委监察部网站 CCDI has posted a nice infographic of the planned reforms to the discipline and inspection commission

Three former high-ranking Chinese officials probed for bribery – Xinhua Three former high-ranking Chinese officials are being investigated by the Supreme People’s Procuratorate (SPP) for bribery-taking, a statement from the SPP said Monday. The SPP has decided to file cases to investigate Jiang Jiemin, former head of the State-owned Assets Supervision and Administration Commission, Wang Yongchun, former vice general manager of the China National Petroleum Corporation, and Li Dongsheng, former vice minister of public security.

大连市中级法院院长李威接受调查|大连市中级法院院长李威_凤凰资讯 Dalian Intermediate People’s Court head Li Wei is under investigation

中组部首次明确5类岗位“裸官”需清理_新闻_腾讯网 Organization Department lists 5 types of positions from which “naked officials” are not allowd to serve  //  “裸官”不得在党委、人大、政府、政协、纪委、法院、检察院领导成员岗位、以上机关工作部门或机关内设机构负责人岗位等5类重要岗位任职,要求已在所列5类岗位任职的裸官,组织人事部门应与其谈话,或者动员其配偶、子女回国,或者调岗。

人民日报:慎重处置犯错误党员干部 整风不能整人–时政–人民网 坚持“严字当头”,是中央对活动的基本要求。党内存在“四风”问题,就是因为失之于宽、失之于软。纠正“四风”,非严不足以祛病强身,非严不足以扫除顽瘴痼疾。但治病是为了救人,不是为了把人整死。整风不能搞成整人,否则就偏离了正确轨道。

警惕西方意识形态渗透的新型话语工具 Red Flag on the need to be on guard against infiltration of Western ideology via new types of tools of discourse

 

FOREIGN AND DEFENSE AFFAIRS *

学习时报- 用党的创新理论引领战略导弹部队前进方向 -:魏凤和 张海阳 5.000 character front page article in 7.14.14 Study Times by 2nd Artillery Commander Wei Fenghe and Political Commissar Zhang Haiyang…more expressions of support for Xi and Party in wake of Xu Caihou investigation…not sure what else to make of it yet //  为打造一支听党指挥、能打胜仗、作风优良的人民军队,二炮始终把学习放在首位,并在学习内容、学习方式、学习与实践结合等方面进行探索,通过专题化学习、课题式调研、对策性研讨,向着建设强大的信息化战略导弹部队的目标努力奋进。   ——编者

二炮五进忠 魏凤和对徐才厚案表态_中国_多维新闻网 Duowei on the Study Times article written by Wei Fenghe and Zhang Haiyang // 【多维新闻】北京时间7月14日,第二炮兵司令员魏凤和与政委张海阳联名在中共党媒《学习时报》上发表文章,并作出“自觉划清界限、肃清影响”的表态。文中还以强烈口吻表达了坚持中央领导的立场。这一动向含义丰富,不仅是对中央处理军委原副主席徐才厚的拥护,而且在稳定军心方面亦有必要。值得注意的是,这已是二炮在徐才厚案前后第五次作出这种政治性的表态,也是第五次表达对中央和习近平的坚定支持。另外,二炮司令魏凤和是习近平上位之初即提拔的第一位上将。诸多迹象是否具有关联性?是否有着某种特殊含义?决策层对二炮究竟有着怎样的态度和规划?

Chinese President leaves for Latin America – Xinhua Xi work harder on foreign relations than Obama does?  //  Chinese President Xi Jinping left Beijing on Sunday morning for state visits to Brazil, Argentina, Venezuela and Cuba. Xi will visit the four countries at the invitation of Brazilian President Dilma Rousseff, Argentine President Cristina Kirchner, Venezuelan President Nicolas Maduro and Raul Castro, president of the Council of State and the Council of Ministers of Cuba. Xi will attend the sixth BRICS Summit and the China-Latin America and the Caribbean Summit in Brazil.

Julie Bishop a ‘complete fool’, says Chinese paper–Sydney Morning Herald The newspaper, owned by The People’s Daily, the Communist Party’s self-described “mouthpiece”, was responding to comments made by Foreign Affairs Minister Julie Bishop published by Fairfax Media on Thursday.  The Chinese version of the Global Times editorial goes further than the English version, saying “China’s Ministry of Foreign Affairs doesn’t even have the tools to deal with this kind of ‘complete fool’ of a foreign minister.”

Andrew Erickson and Austin Strange | China’s Island-Building Strategy in the South China Sea | Foreign Affairs So what are the implications of China’s large-scale island building? Some international observers believe that, beyond asserting de facto sovereignty, China’s efforts to amass sand on the reef and rock formations are aimed at strengthening its claim to the 322-kilometer (200-mile) exclusive economic zone (EEZ) abutting its coastline and all of its islands under the aegis of the United Nations Convention on the Law of the Sea (UNCLOS). This seems unlikely. Article 60 of UNCLOS explicitly states that artificial structures are not equal to islands and that their existence has no bearing on the demarcation of territorial seas, EEZs, or continental shelves. Although China could theoretically argue that it is building on pre-existing natural island structures, other countries would surely dispute that claim — and they could furnish pictures to prove it. China itself has lambasted similar behavior by Japan on the Okinotorishima atoll in the Philippine Sea…Arguably more discomfiting for other states, a mature network of military facilities in the Spratlys, including an expanded Fiery Cross presence, would effectively extend China’s ability to project power by over 800 kilometers (500 miles), particularly through Chinese Coast Guard patrols in contested areas and potentially even air operations.

Japan PM Abe wants to hold summit with China at APEC | Reuters “We need to return to the basics of a strategic relationship of mutual respect. I would like to have a summit in Beijing this November at the time of the APEC meeting,” he said, referring to the Asia Pacific Economic Cooperation forum annual summit. China’s Foreign Ministry said it had expressed its view on the issue many times already, though stopped short of outright rejecting the request. “The Japanese side should take real steps and work hard to banish the political obstacles which affect the development of bilateral ties,” it said in a statement faxed to Reuters.

Senate frowns on China’s behavior | TheHill The bill, co-sponsored by Sens. Marco Rubio (R-Fla.), Ben Cardin (D-Md.), and John McCain (R-Ariz.), condemns “coercive and threatening actions or the use of force to impede freedom of operations in international airspace by military or civilian aircraft, to alter the status quo or to destabilize the Asia-Pacific region.”

The Iron Auntie – Caixin Peng Dehuai’s niece//  The passing of Peng Gang, former member of the Standing Committee of the Central Discipline Inspection Commission (CDIC), the Communist Party’s top anti-graft fighter, was reported on June 24. Peng was also the anti-graft head of the People’s Liberation Army’s General Political Department. She was one of a handful of female generals in China to be promoted to her position and became one of the few women to have reached the standing committee of the CDIC.

Why were this company’s computers attacked millions of times this year? Algae. – The Washington Post About 16 months ago, a Florida-based biofuel company called Algenol noticed that its Internet service was slowing down. In checking that out, Jack Voth, Algenol’s information technology chief, stumbled on something odd: a telnet connection to its videoconference camera from an Internet Protocol address in China, a country where Algenol has never sought to do business.

Experts: Latest China hack OK under U.S. rules – Joseph Marks – POLITICO.com China’s alleged efforts to hack into a trove of personal information about U.S. federal government employees seeking security clearances shows a brazen disregard for American sovereignty. It’s also precisely the kind of national security-focused cyberespionage that U.S. intelligence agencies engage in against other countries — and say is well within the bounds of modern spycraft, analysts tell POLITICO.

Malware hidden in Chinese inventory scanners targeted logistics, shipping firms | PCWorld The supply chain attack, dubbed “Zombie Zero,” was identified by security researchers from TrapX, a cybersecurity firm in San Mateo, California, who wrote about it in a report released Thursday. TrapX hasn’t named the Chinese manufacturer, but said that the malware was implanted in physical scanners shipped to customers, as well as in the Windows XP Embedded firmware available for download on the manufacturer’s website.

Chinese Man Charged in Plot to Steal U.S. Military Data – Bloomberg Su Bin, the owner of a Chinese aviation technology company with an office in Canada, conspired with two unidentified individuals in China to break into the computer networks of U.S. companies to get information related to military projects, according to charges unsealed July 10 in federal court in Los Angeles. Su advised the two others in China on what data to target, according to the charges. Su’s alleged co-conspirators claimed to have stolen 65 gigabytes of data from Boeing related to the C-17 military cargo plane, according to the criminal complaint. They also allegedly sought data related to other aircraft, including Lockheed Martin Corp. (LMT)’s F-22 and F-35 fighter jets.

 

HONG KONG, MACAO AND TAIWAN *

Who Will Stand Up for Hong Kong? – NYTimes.com “If in the future there were any suggestion of a breach of the Joint Declaration, we would mobilize the international community and pursue every legal or other avenue open to us,” Prime Minister Major said back in 1996, a year before the handover. It’s clear that time has come. // think too late, and there is nothing the international community is willing to do that actually has teeth

China’s rulers team up with notorious ‘White Wolf’ of Taiwan-The Age how many supporters does he really have in Taiwan?  //  Taipei: The Chinese Communist Party, which came to power promising to break the nexus between politics and crime, has teamed up with a notorious triad figure to help press its claims in Taiwan. Chang An-lo, known as White Wolf, is a convicted kidnapper, extortionist and heroin trafficker who has been mobilising muscular protests and intimidating pro-democracy activists on the island.

Heard in Hong Kong: The View on Democracy – China Real Time Report – WSJ As Hong Kong activists ratchet up a fight for more democracy, relations between Beijing and the city are feeling the strain. On July 1, the anniversary of the former British colony’s return to Chinese control, tens of thousands of protesters took to the streets, fueled in part by a controversial government white paper stressing Beijing’s control over the city. One group, Occupy Central, is threatening to shut down the city’s financial district with 10,000 people in an act of civil disobedience if demands for genuine democracy aren’t realized. China Real Time hit the streets in Hong Kong to hear how ordinary residents feel about the struggle.

Hong Kong to Deliver Report on Electoral Reform to Beijing – NYTimes.com While the Hong Kong government “will very likely push for universal suffrage in 2017, it will probably use very ambiguous language in the specifics, like nominating methods, and kick the can down the road,” said Lester Shum, a leader of the activist group Federation of Students. “It’s the central government that has the power to make decisions.” Mr. Shum said that the student coalition might call for a student strike in August if Beijing ruled out nomination by the broader public and by political parties in the 2017 election.

 

TECH AND MEDIA *

Apple Refutes China Assertions on IPhone as Security Risk – Bloomberg In response, Apple said on its Chinese website that it has never “worked with any government agency from any country to create a backdoor in any of our products or services.” The tracking function is used to speed up applications designed to show iPhone users their own location or assist in driving directions to avoid traffic. It can be turned off, Apple said in its statement. Personal location information is stored only on the phone, protected by a user password, and isn’t available to third parties, the company said.

Alibaba’s IPO: Shocked, shocked! | The Economist The firm itself has just updated the prospectus it filed with America’s Securities and Exchange Commission, and has revised its own estimate of its valuation from $117 billion in June to some $130 billion now. The technology giant took two other steps in the revised SEC filing. These have provoked controversy, but come as no surprise to old lags. Perhaps prodded by American regulators, Alibaba has tried to explain why it spun out Alipay, a vital online-payments division, in 2011. Yahoo, a big shareholder that did not approve the move, was outraged at the time. Alibaba repeats its claims that it had no choice given that pending regulations from China’s central bank looked as though they might penalise Alipay for not being wholly domestic. Advocates of corporate governance will not be impressed.

AMENDMENT NO.3 TO FORM F-1-Alibaba the story of the Alipay expropriation keeps changing..so there was never a PBoC rule that foreign-investment payment firms could not get license, as Alibaba said at the time… //  We originally established Alipay in December 2004 to operate our payment services. In June 2010, the PBOC issued new regulations that required non-bank payment companies to obtain a license in order to operate in China. These regulations provided specific guidelines for license applications only for domestic PRC-owned entities. These regulations stipulated that, in order for any foreign-invested payment company to obtain a license, the scope of business, the qualifications of any foreign investor and any level of foreign ownership would be subject to future regulations to be issued, which in addition would require approval by the PRC State Council. Further, the regulations required that any payment company that failed to obtain a license must cease operations by September 1, 2011. Although Alipay was prepared to submit its license application in early 2011, at that time the PBOC had not issued any guidelines applicable to license applications for foreign-invested payment companies (and no such guidelines have been issued as of the date of this prospectus). In light of the uncertainties relating to the license qualification and application process for a foreign-invested payment company, our management determined that it was necessary to restructure Alipay as a company wholly-owned by PRC nationals in order to avail Alipay of the specific licensing guidelines applicable only to domestic PRC-owned entities. Accordingly we divested all of our interest in and control over Alipay which resulted in deconsolidation of Alipay from our financial statements. This action enabled Alipay to obtain a payment business license in May 2011 without delay and without any detrimental impact to our China retail marketplaces or to Alipay.

China government demands OTT/smart TVs switch to TVOS from Android, say reports The China government is demanding cable TV service providers in the country only adopt TVOS 1.0 for their over the top (OTT) devices and smart TVs, which is expected to significantly delay the development of Internet TV applications, according to reports from China citing sources from people familiar with the matter.

Rumor: GAPPRFT to Restrict Branded Video Channels on Internet TV | Marbridge Consulting – China Television News According to an insider at China’s General Administration of Press and Publication, Radio, Film and Television (GAPPRFT), the bureau is currently considering promulgation of new regulations that would limit online video websites to acting only as content providers on internet TV set-top boxes (STBs) and other devices, while restricting online video sites from offering dedicated content channels or setting up branded content zones within STB user interfaces // 广电总局称:盒子不能设视频站专区 

21st Century Fox to Sell Its Stake in China’s Bona Film Group I believe this was Wendi Deng’s project, makes sense Murdoch would dump it  //  Chinese film studio and distributor Bona Film Group has announced a major shake-up of its ownership structure, with investment group Fosun saying it is upping its stake in Bona to 20.8 percent, while Bona’s founder and CEO, Yu Dong, is buying back 21st Century Fox’s entire 19.3 percent holding in the company for $71.4 million.

Net Companies Scoring with Huge Surge in Legal Soccer Betting – Caixin Some 3.329 billion yuan worth of soccer lottery tickets were sold in the second week of this year’s World Cup, which started on June 12 and ended on July 13, data from Caitong Consulting Inc., an online lottery consulting firm, shows. Total sales for this year’s event might reach 15 billion yuan, far more than the 2.3 billion yuan handled in 2010, and Internet companies would process 70 percent of the sales, said Li Jian, chief executive officer of Caitong. Online lottery ticket services from Internet companies have attracted a lot of buyers, especially many users of social networking software like WeChat and QQ.

电商下乡刷墙 火拼网购蓝海(经济聚焦)–财经–人民网 People’s Daily on the growth of ecommerce in rural areas, how ads for ecommerce firms are taking over walls in villages

 

SOCIETY, ART, SPORTS, CULTURE AND HISTORY *

How much does Xi Jinping really like soccer? | China Sports Insider Xi was invited by his Brazilian counterpart Dilma Rousseff to watch the World Cup Final at the Maracana – but he turned her down. Even a half-hearted football fan would bite your arm off to get a ticket to the biggest game in the world, and Xi had the perfect excuse: he was already due to be in Brazil for the BRICS summit, which kicks off on Tuesday.

Pride and Prejudice: Young, Uighur and in Beijing | THAT’S Aliya is not the only one who has an issue with covering her head. Beijing-based Uighur musician Parhat Korax has just received a call from his sister in Kashgar, in the south of Xinjiang. On the phone, his sister asks his opinion on whether she should buy a burka. “She said that it’s becoming really trendy these days, and her husband wants her to buy one. It’s ridiculous!” says Parhat. “Islam has different branches and that kind of robe, and these types of rules to control women, do not belong to us Uighurs. Why are Uighurs buying into that?”

Alhambra police work social media beat to reach Chinese speakers – Los Angeles Times “Alhambra police are en route to Twohey to handle an incident of customer harassment,” Yu writes in Chinese, and taps send. Within minutes the post is deluged with likes and comments. One user says a man exposed himself near that location, and asks what to do. Another asks him to explain the meaning of harassment. Yu’s fingers dance over his iPhone trying to respond. In a city with about 30,000 Chinese residents and just four sworn officers who can speak Chinese, police leaders hope Weibo, the world’s largest social network, will help bridge the cultural divide….The next big Chinese social network is WeChat, phone-based group messaging that could end up eclipsing Weibo’s 500 million users. Yokoyama is exploring the idea of an Alhambra Police WeChat.

 

ENERGY, ENVIRONMENT, SCIENCE AND HEALTH *

Beijing to enforce use of clean coal in anti-pollution drive | Reuters China’s capital city, Beijing, will enforce the use of cleaner low-sulphur coal from Aug. 1 in a bid to tackle the soaring levels of air pollution that frequently clog the country’s major cities, the official Xinhua media agency said on Saturday. Beijing will implement strict controls and targets for airborne sulphur from coal, Xinhua said, citing the Beijing Municipal Administration of Quality and Technology Supervision. This is the first time China has enforced the use of low-sulphur coal across all industries to tackle pollution. // 北京将建国内最严地方环保标准体系改善空气质量

Xinhua Insight: Gov’t organs in China to buy more new energy vehicles – Xinhua | English.news.cn From 2014 to 2016, new energy vehicles will account for no less than 30 percent of newly purchased cars in state organs every year, according to the plan jointly released by the National Government Offices Administration (NGOA), the National Development and Reform Commission, the Ministry of Finance, the Ministry of Science and Technology, and the Ministry of Industry and Information Technology.

China May Announce Emissions Cap Next Year: Treaty Envoy – Bloomberg China is working to announce in the first or second quarter of next year what measures it might include in a new global agreement to fight climate change that treaty envoys from 194 nations aim to devise by year-end, Xie Zhenhua, vice chairman of China’s National Development and Reform Commission, told reporters today in Berlin.

 

JOBS AND EVENTS *

Public Intellectuals Program | NCUSCR Applications due August 1. The Public Intellectuals Program (PIP), launched by the National Committee in 2005, is dedicated to nurturing the next generation of China specialists who, in the tradition of earlier China hands, have the interest and potential to venture outside of academia to engage with the public and policy community.

Senior Manager, International Communications, Baidu at Baidu, Inc. in Beijing – Job | LinkedIn Beijing-based

Follow me on Twitter @Niubi

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