THE ESSENTIAL EIGHT *
China food scandal spreads, drags in Starbucks, Burger King and McNuggets in Japan | Reuters China’s food watchdog said it ordered regional offices to carry out spot checks on all firms which had used Shanghai Husi products, and would inspect all of parent OSI’s sites around China to see if enough has been done to ensure food safety. It said the case could be handed over to the police. The regulator’s Shanghai branch said in a statement on Tuesday it had demanded production, quality control and sales records from OSI. It added it already ordered McDonald’s to seal over 4,500 boxes of suspected meat products and Yum’s Pizza Hut to seal over 500 boxes of beef.// This meat scandal can be seen as a takedown of foreign fast food chains and their foreign supplier OSI, or, if allegations true, as a legitimate expose of egregious behavior by OSI and remarkably negligent supply chain management by fast food firms. This time Shanghai regulators may end up wishing that was not exposed, especially as the CCDI has an upcoming Shanghai inspection tour…
Related: Shanghai authorities vow thorough probe into meat scandal – Xinhua Shanghai authorities on Monday vowed transparency and timely disclosure in its ongoing probe into the alleged use of stale meat in products supplied to fast food chains including McDonald’s and KFC. Law enforcement officials had suspended production at a suburban plant of Shanghai Husi Food Co., Ltd, a unit of U.S. food supplier OSI Group, after a news program aired by local television on Sunday claimed the company was using stale meat to make products, the municipal government said in a statement.
Related: China Focus: Fast food chains act over meat concerns – Xinhua A source close to Shanghai’s food and drug watchdog told Xinhua that the company, graded as an A-Level enterprise by the local regulator, is subject to two reviews every year. Two sampling tests the company underwent during its review for the first half of this year showed no problems. “The fact that regulators take action only after violations are exposed suggests that their day-to-day oversight is not effective,” said Shen Jianhua, who sits on an expert panel under Shanghai’s municipal food safety office.
Related: 福喜在华企业将被彻查 央媒：别替洋快餐喊冤_新闻_腾讯网 media assault on Husi intensifying
Insiders worry China’s stimulus focus delays reform drive | Reuters “On policy, we don’t need to prescribe a strong medicine,” said Xu Hongcai, senior economist at China Centre for International Economic Exchanges, a well-connected think-tank in Beijing. “It’s time to push reforms.” Potential measures in coming months include reforming the fiscal system to deal with massive local government debts, a long-awaited deposit insurance system to pave the way for freeing up bank deposit rates, and overhauling state giants. “Reforms are likely to quicken in the second half,” said an influential economist at the cabinet’s think-tank, Development Research Centre.
CDB Said to Get 1 Tln Yuan to Back Shantytown Renovation – Caixin Data from the CDB showed it had total assets of 8.34 trillion yuan at the end of March but of 9.9 trillion yuan at the end of June. “The newly added 1 trillion yuan is from the central bank’s relending program, which was transferred to the bank in the second quarter,” the CDB source said. “Now the CDB is lending the money out to shantytown renovation projects.” It was unclear where the other more than 500 billion yuan in assets the CDB had came from. The central government has pledged to renovate some 4.7 million homes this year, the most in a year since the country started the task in 2009. The work required over 1 trillion yuan this year, Ni Hong, spokesperson for the Ministry of Housing and Urban-Rural Development, said in March.
Trouble at sea reveals the new shape of China’s foreign policy – The A-List – Blogs – FT.com Kurt Campbell says gone are the days of “reactive assertiveness”. What role might Campbell have in a Clinton administration? // Mr Xi’s personal role in decision-making is unmistakable, and Chinese authorities have gone to considerable lengths to shroud the decision-making process from curious outside eyes. Unlike his predecessor, President Hu Jintao, who had a highly institutionalised process for foreign policy making under state councillor Dai Bingguo, it is unclear who is directly involved in the decision-making process with Mr Xi, who by all accounts plays a dominant role in the formulation and execution of matters big and small. We are witnessing much more concerted co-ordination at every level in the Chinese government. Even small fishing boats receive communications and directives in certain circumstances from senior authorities in Beijing. The current set of provocations are not haphazard; they have been carefully choreographed.
Related: PacNet #58 – Dealing with America’s China Problem in Asia – Targeting China’s Vulnerabilities | Center for Strategic and International Studies Robert Sutter is a professor at George Washington University. Recently completing a book manuscript assessing the status and outlook of US relations within the broad Asia-Pacific region reinforced this writer’s opinion in an earlier PacNet (“Rebalancing, China and Asian Dynamics – Obama’s Good Fit,” Jan. 6, 2014) that the United States remains unsurpassed in regional influence and leadership. The Obama government’s nuanced and multifaceted rebalance initiatives mesh well with regional priorities and promise growing security, economic, and political ties. By contrast, China, the only other possible competitor for regional leadership, pursues conflicted policies at odds with key regional concerns of independence, sovereignty, and stability.
4 Reasons China Removed Oil Rig HYSY-981 Sooner Than Planned | The Diplomat very interesting from Carl Thayer. Will the Vietnamese be calmed by the withdrawal, or is the damage done? // While Chinese and Vietnamese party foreign affairs specialists began sounding each other out, Vietnamese party leaders agreed to convene a meeting of the Central Committee specifically to focus on the South China Sea dispute and the proposal to initiate legal action against China. Given the ground swell of anti-China opinion in the party and society at large “to break out of China’s orbit,” it appeared likely that the Central Committee would not only approve legal action against China but also approve steps to align more closely with the United States. Foreign Minister Minh’s trip was approved and he is scheduled to visit Washington in September. It was in this context that China decided to announce the early withdrawal of HYSY-981 from contested waters. According to retired General Nguyen Trong Vinh (xuandienhannom blog, July 16), China deliberately withdrew the oilrig to influence the outcome of the forthcoming Vietnamese party plenum. The coincidence of Typhoon Rammasun provided the pretext. If Chinese officials were concerned about the safety of HYSY-981 they should have left it in place rather than tow it towards Hainan Island where Typhoon Rammasun was headed.
Related: China Tensions Choke Off Tourism to Vietnam – NYTimes.com Chinese accounted for about a quarter of the nearly 4.3 million foreign visitors to Vietnam in the first six months of 2014. But in June, arrivals from the Chinese mainland fell about 30 percent and those from Hong Kong fell 72 percent, compared with May.
Related: China remains largest exporter of major items to Vietnam in H1: Vietnam Customs – Xinhua According to a recent report on the website of General Department of Vietnam Customs, China continued to be the largest supplier of machinery, equipment, tools and accessories for Vietnam during the first half of 2014, with total revenue of nearly 3.62 billion U.S. dollars, up 25.8 percent year-on-year. China was followed by Japan and South Korea during January-June period, with export revenue of 1.74 billion U.S. dollars and 1.49 billion U.S. dollars, respectively.
Xi visits Chavez’s mausoleum to pay respect to China’s “great friend” – Xinhua Chinese President Xi Jinping visited late Venezuelan President Hugo Chavez’s mausoleum on Monday to pay respect to the “great friend of the Chinese people.” Chavez is also “a charismatic leader” and “a good friend of mine,” Xi said, recalling that the late president was fond of Chinese culture, had deep understanding of the Chinese Communist Party’s history and governance philosophy, and made outstanding contributions to China-Venezuela ties.//His visit to the mausoleum was top item on the Tuesday CCTV Evening News
Related: China, Venezuela strengthen partnership with infusion of new vigor – Xinhua As Venezuela reaffirms its firm adherence to the one-China policy and support to the peaceful development of cross-Strait relations as well as China’s peaceful reunification, China shows understanding and respect toward Venezuela’s adoption of its foreign policy of independence and self-reliance by inheriting the unfulfilled wish of late liberator Simon Bolivar. Both sides believe that promoting comprehensive, pragmatic cooperation is a key component in developing bilateral ties, and are ready to strengthen scientific planning, make concerted effort and work step by step, and complement each other’s advantages in advancing cooperation. According to the declaration, the two sides vow to continue promoting the stable and balanced development of two-way trade, deepening cooperation in such fields as finance, investment, energy, mining, agriculture, infrastructure construction, telecommunication, manufacturing and hi-tech, and encouraging technology transfer and knowledge sharing.
Related: Chinese president arrives in Havana for state visit – Xinhua In Cuba, Xi will hold talks with Cuban leader Raul Castro to draw up a blueprint for the future development of China-Cuba relations at a strategic height and from a long-term perspective. The two sides will also sign documents of cooperation covering economy, trade, agriculture, bio-technology, culture and education. Cuba is the last leg of Xi’s four-nation Latin America tour, which has already taken him to Brazil, Argentina and Venezuela.
Alibaba Says It Relies on Markets, Not Connections – NYTimes.com Alibaba said that the three Chinese investment companies – Boyu Capital, Citic Capital Holdings and CDB Capital – had acquired their stakes in 2012 at a time when “global capital markets were depressed” and there were few companies that wanted to invest. Alibaba said their stakes were relatively small. At the end of June, Boyu Capital held 0.55 percent of Alibaba’s common shares, Citic Capital held 1.1 percent and CDB Capital held 0.47 percent. //seemingly de minimis stakes, and Alibaba still can’t beat Unionpay at the lobbying game. Perhaps these funds are not just connected but smart, saw a good deal and elbowed their way into it? What about the ownership structure of the Alipay subsidiary?
AFP-China domestic abuse victims voiceless as network disbands – Features – My Sinchew China itself remains without a national domestic violence law, and the country’s Anti-Domestic Violence Network (ADVN), its first and largest umbrella group on the issue, has announced its own surprise dissolution. “It will have a detrimental impact, because when it comes to professional anti-domestic violence work nationwide, of course the more power we have, the better,” said Hou, whose Beijing-based Maple Women’s Psychological Counselling Centre was one of the ADVN’s 72 members.
BUSINESS, ECONOMY AND TRADE *
苏州证实调整楼市限购政策 90平米以上随便买_21世纪网 Suzhou relaxes housing purchase restrictions, no longer any restrictions for purchases of apartments larger than 90m // 90平米以上的房子不限套数，本地人外地人均可直接购买，
Alibaba.com and 7 Big Chinese Banks Offering Loans to Small Exporters | Alizila Under the new program, small businesses that participate in Alibaba’s OneTouch trade-services platform can borrow from RMB 1 million ($161,000) up to RMB 10 million ($1.61 million) depending upon their recent overseas sales histories and creditworthiness. Banks joining the program are Bank of China, China Merchants Bank, China Construction Bank, Ping An Bank, Postal Savings Bank of China, Bank of Shanghai, and Fuzhou City-based Industrial Bank, Alibaba.com announced today in a press release.
Huatong May Avoid Default on Bailout, Founder Securities Says – Bloomberg “We probably won’t see a default on bond principal in the the short term,” given regulators’ stress on curbing systematic risk, Beijing-based Song said in an e-mail yesterday. “There is low probability of systematic risks this year. We may see sporadic risks, such as defaults in private bonds and trusts.”
Chinese Pork Producer Rekindles Hopes For I.P.O. – NYTimes.com WH is trying again, hoping that a more modest fund-raising target, a cheaper valuation and only two underwriters — Morgan Stanley and Bank of China International — will help ensure success.
Goldman, Warburg Pincus and others nearing $2bln Huarong deal-sources | Reuters Goldman Sachs and private equity firm Warburg Pincus are among the investors nearing a deal to buy an up to 20 percent stake in China Huarong Asset Management Ltd for about $2 billion, people familiar with the matter told Reuters. Other companies preparing to invest in China’s biggest bad debt manager include Malaysian state investor Khazanah Nasional Bhd, China state-backed CITIC Group, China International Capital Corp, conglomerate Fosun Group and China state-backed COFCO Corp, the people added.
A Fox-Time Warner deal would give Murdoch new heft in China | Reuters “China is a great market and we’ve all wanted to be there for years,” said former Viacom president Frank Biondi, one of the first U.S. media executives to visit the country. “But for all the upside, there’s the obvious downside that the government controls everything – what gets put into movie theaters, what’s put on TV.”
POLITICS AND LAW *
Graft Fight Will Take Years, U.S. Expert Says, but China Is Heading in Right Direction – Caixin interview with Caixin…I am no longer calling this an anti-corruption campaign. The ccdi reforms and the 5 year graft fighting plan announced late 2013 should be taken seriously, and that what we are seeing on the anti-corruption front is going to continue as the new normal, though perhaps some of the intensity may lessen by year end. Questions like “when will this end” increasingly look to be missing the bigger picture // Andrew Wedeman, one of the world’s top scholars on corruption in China and author of the 2012 book Double Paradox: Rapid Growth and Rising Corruption in China , said that compared with so-called developmental corruption, which played a role in the economic rise of Japan, South Korea and Taiwan, graft in China today is more “predatory” and in fact undermines economic growth. Wedeman argues that China has taken the fight against corruption more seriously than many other developing countries, but changing the culture of its bureaucracy has been a challenge and will require a sustained effort across generations.
Veteran Tianjin Police Official Investigated by Party’s Graft Fighter – Caixin Sources close to the situation said that the investigation into Wu is linked to his relatives’ involvement in parking lot businesses in urban areas. There have also been rumors that Wu was linked to cases involving his former supervisors Li Baojin and Song Pingshun. Li, who was the top prosecutor in Tianjin, was handed a suspended death sentence in 2007 for taking bribes and embezzlement. Song committed suicide in June 2006 after being investigated for graft. Song was accused of abusing his power and seeking profits for his mistress, Xu Min. Xu operated three companies involved in maintaining firefighting equipment and automobile testing.
Is Ling Jihua target of graft probe? Brother-in-law of the ex-Hu Jintao aide detained | South China Morning Post The detention of a relative of Ling Jihua, a former senior aide to ex-president Hu Jintao, has led to speculation the authorities may be building a case against Ling himself. Wang Jiankang, who is Ling’s brother-in-law and a deputy mayor in Yuncheng in Shanxi province, has been in custody for more than 10 days. He is either helping with, or is directly implicated in a corruption inquiry, three sources told the South China Morning Post.
中央巡视组进入体育总局 开始“足球反腐”-体育频道-新华网 CCDI inspection team goes into the State General Administration of Sports, to start by looking at corruption in football
Trending: Attractive People Sharing Upbeat News About Tibet – NYTimes.com But when it comes to leveraging Western social media outlets like Twitter, Facebook and YouTube — all of which are blocked here — Beijing’s efforts would appear to be a bit ham-handed. On Twitter, many of the fake accounts identified by Free Tibet use stock images or headshots found on the sites of commercial photographers in the United States. Others employ the likenesses of actors like Erica Durance, who played Lois Lane in the television series “Smallville,” or in one case, Syd Barrett, the lead vocalist of Pink Floyd, who died in 2006. Oddly, many of the Twitter handles, like Oliver Nina, Felix James and Philomena Rebecca, appear to be created through the combination of two first names. Nearly all the profile images are those of Caucasians.
Chinese police clash with protesters over cross removal | Reuters In the latest move, police tried to remove a cross from a church in Pingyang county close to Wenzhou city. But the congregation surrounded the church and prevented police from getting close, two witnesses said. “We did not want them to get close, so we joined up to stop them getting in, but they came at us and beat us,” one of the protesters, who gave his family name as Zhang, told Reuters by telephone, putting the number of police at about 500.
Chinese courts to receive anti-corruption supervision – Xinhua China’s Supreme People’s Court (SPC) is considering putting courts under anti-corruption supervision by parties involved in legal cases, according to an SPC circular issued Sunday. The circular stipulates that all relevant case information, including status of case filing, enforcement measures and investigation and control of property, should be sent to parties involved in the case.
Chinese Journalist Fired Over Work for Hong Kong Website – NYTimes.com The journalist, Song Zhibiao, was forced to terminate his contract on Friday with China Fortune, a monthly magazine owned by Southern Metropolis Daily, a relatively liberal newspaper in the southern city of Guangzhou. According to Mr. Song, the magazine’s editor in chief informed him on Friday morning that local propaganda officials had said that Mr. Song violated the government’s new rule by writing commentaries for Orient, a news website belonging to the Hong Kong-based Oriental Press Group.
FOREIGN AND DEFENSE AFFAIRS *
China Pushes Limits to Closer Ties With U.S. Military – WSJ “Admiral Wu wants to work on that,” Adm. Greenert told The Wall Street Journal in an interview at the end of his trip, which included a tour of the Liaoning. “He’d like his crew to get a tour of the George Washington and have the George Washington crew, a gaggle of them, come to the Liaoning,” he said. “I’m receptive to that idea.” A U.S. carrier’s visit to China—possibly Shanghai—could happen within a year if Adm. Wu formally proposed it and won support for the idea from policy makers on both sides, he said.
China looms large over MH17 debate at UN Security Council-Sydney Morning Herald Already, China’s envoy to the United Nations, Liu Jieyi, has left himself ample room for manoeuvre. “Our priority now is to establish facts, Mr Liu said. “Pending that, it is not advisable to jump to any conclusion, make any assumptions or trade accusations.” Xinhua has gone further and lashed Australia and the United States for being “rash” in laying blame with Russia. Back in March, American officials had misinterpreted a similar mix of Chinese messages in their hope that China would oppose Russia’s annexation of Crimea from Ukraine.
Chinese FM welcomes UN resolution on MH17, urges independent, fair, objective probe – Xinhua Before the result is produced, he stressed, all parties concerned should refrain from making conjectures and prejudgment and, more importantly, avoid politicizing the issue. The crash further suggests that an early settlement of the Ukraine crisis is the fundamental way to maintain regional peace and stability, Wang said. “We urged all Ukrainian parties concerned to cease fire as soon as possible and conduct dialogue and consultation so as to seek a comprehensive, lasting and balanced political solution,” Wang said.
China to launch HD observation satellite this year – Xinhua China will launch Gaofen-2, a high-definition Earth observation satellite, to space this year, according to the State Administration of Science, Technology and Industry for National Defense (SASTIND). As one of China’s major science and technology projects, the Gaofen satellite series will help in geographic and resources surveys, environment and climate change monitoring, precision agriculture, disaster relief and city planning.
Beijing’s New Internet Buzzphrase-Silicon Hutong In a ten minute speech last month in London at the 50th Meeting of ICANN, Lu Wei, the Minister of China’s Cyberspace Affairs Administration, introduced a set of seven principles under which, according to him, the Internet should be governed. While not much attention was paid Mr. Lu or his speech outside of the confines of the attendees, we can assume that it was an official statement of government policy, and therefore worth understanding, analyzing, and discussing.
China’s secretive military cracks open door for glimpse inside on a yearly trip for foreign reporters to a Chinese military base, this time to an engineering academy in Beijing’s southwestern suburbs, officers went to great lengths to put a non-threatening face on the world’s largest military. “It is not necessary to pick an enemy or an opponent for combat while developing ones military. I think the People’s Liberation Army’s development is in line with China’s overall development,” base commander Xu Hang told reporters. During a carefully escorted tour of the leafy base, soldiers stopped to chat and patiently answer questions about everything from their salary to why they wanted to join up. At one point a group of cadets proudly showed off miniature dancing robots they had designed, as piped Western pop music played in the background, including a musak-version of George Michael’s “Careless Whisper”.
Heard in the Hutong: Will China’s Rise Lead to Conflict? – China Real Time Report – WSJ With Mr. Xi currently finishing up a trip to South America following a meeting of BRICS leaders in Brazil, China Real Time hit the streets of Beijing to find out what residents think about China’s place in the world.
The Chosun Ilbo (English Edition): Daily News from Korea – N.Korea Slams ‘Spineless’ China North Korea’s relations with its sole ally and benefactor China are going rapidly downhill. In an unprecedented move on Monday, North Korea attacked Beijing as “spineless” after cracking down on the usage of the yuan within its borders and reducing exchanges of personnel between the two sides.
HONG KONG, MACAO AND TAIWAN *
内地与澳门达成反洗钱监管合作意向_金融频道_财新网 how much might this hurt casinos? Beijing and Macao reach anti-money laundering MOU // 中国人民银行网站宣布，
China Policy Institute Blog » Redefining Hong Kong SAR: The Mainland Security Crackdown Arrives Citing the former director of the Xinhua News Agency, Zhou Nan, a June 19th China Daily commentary explains: “The central issue in Hong Kong is no longer ‘true’ or ‘fake’ democracy or technical details about electoral systems. Instead, it is a political contest between China and Western Powers, who pose a direct threat to China’s sovereign rule over Hong Kong and its national security” (Yang, 2014).
Defining Taiwan’s Status Quo | Thinking Taiwan This month, Democratic Progressive Party (DPP) Chairperson Tsai Ing-wen (蔡英文) sent to the party’s Central Executive Committee several proposals related to the DPP charter. Arguably the most controversial includes a freeze on the party’s independence clause. While reforms to the charter are not unprecedented — eight since 1986 — this move comes at a time when the party is clearly positioning itself not only for this year’s mayoral and local elections but the 2016 presidential and legislative elections. Such a move attempts to position the party as moderate on one of Taiwan’s main electoral cleavages, the future status of Taiwan, in part to appeal to the proverbial median voter who supports the status quo. Yet appealing to the status quo itself largely sidesteps a broader issue: what does the status quo actually mean?
Alleged details of Apple Daily founder Jimmy Lai’s political donations leaked | South China Morning Post Hundreds of records detailing alleged business deals and donations to pan-democrats made by Apple Daily founder Jimmy Lai have been leaked to the media. Among the leaked files the Post found receipts for donations made last year of HK$5 million and HK$3 million to the Democractic Party and Civic Party. But there was no evidence to back up a variety of claims made by pro-Beijing media on Tuesday morning, including that Lai had donated the same amounts, HK$5 million and HK$3 million, to the Democratic Party and Civic Party again this year, or HK$3.5 million to Anson Chan Fang On-sang.
TECH AND MEDIA *
China has more people going online with a mobile device than a PC | Reuters China’s total number of internet users crept up 2.3 percent to 632 million by the end of June, from 618 million at the end of 2013, said CNNIC’s internet development statistics report. Of those, 527 million – or 83 percent – went online via mobile. Those doing so with a PC made up 81 percent the total. China is the largest smartphone market in the world, and by 2018 is likely to account for nearly one-third of the expected 1.8 billion smartphones shipped that year, according to data firm IDC.
Alibaba Film Unit to Work With Wong Kar Wai – Digits – WSJ The agreements with Wong and other directors is part of Alibaba’s efforts to beef up its entertainment offerings. Alibaba has also approached some film studios in China with proposals to invest in them, according to people familiar with the matter.
Xiaomi Unveils The Mi 4, Its New Flagship Smartphone–TheNextWeb want /
Chinese Team Wins Biggest-Ever Prize in Professional Video Gaming – NYTimes.com The winners, from a team called Newbee, hoisted a shield-shaped trophy over their heads. They were each $1 million richer. Newbee’s members, five young men from China, were the winners of The International, an annual tournament for the online arena battle game Dota 2. This was the fourth year for the tournament, which is produced by the game’s publisher, Valve.
SOCIETY, ART, SPORTS, CULTURE AND HISTORY *
Millionaire Hunters Lure Rich Chinese to Australia – Bloomberg Berrick Wilson is one of at least 30 fund managers who have jumped into the business of luring China’s wealthy to Australia using a new visa program that helps Chinese invest abroad. Wilson has flown to China three times this year from the Melbourne headquarters of investment firm KordaMentha Pty. He’s looking for millionaires to invest at least A$5 million ($4.7 million) and qualify for residency,
中共情报元老陈忠经病逝 曾长期潜伏胡宗南身边_网易新闻中心 Chen Zhongjing dies at 99, was a leading figure in Chinese intelligence, once worked closely with KMT General Hu Zongnan as a CPC spy, leaked word of an impending KMT attack in Shaanbei among other things, then held a variety of interesting roles over his career // 陈忠经原籍江苏仪征，1915年12月出生于江苏扬州。
FOOD AND TRAVEL *
Flight Delays Expected to Worsen in Eastern China – NYTimes.com The air traffic snarl has been caused by the “influence of high-frequency exercises by other users,” China National Radio reported, citing the Civil Aviation Administration of China. The “other users” were not explicitly identified but are believed to be China’s military, which has broad control over Chinese airspace and has been blamed in the past for the terrible record of flight delays at Chinese airports.
JOBS AND EVENTS *
Position Title: Editor, China Brief The Jamestown Foundation, Washington, D.C. Jamestown seeks an Editor for China Brief, a biweekly publication on Chinese strategic, political and economic issues. The ideal candidate will have online publishing experience, with an interest and background in Chinese affairs and the Asia-Pacific. The position requires substantial research on China, using Chinese-language sources; Mandarin Chinese language proficiency is required. The position is full-time and located in Jamestown’s Washington, D.C. office.
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