Perhaps the most interesting China angle from these revelations is the claim that the NSA “found ways inside some of the encryption chips that scramble information for businesses and governments, either by working with chipmakers to insert back doors or by surreptitiously exploiting existing security flaws” and that “after the government learned that a foreign intelligence target had ordered new computer hardware, the American manufacturer agreed to insert a back door into the product before it was shipped.”
Isn’t that what the US government accuses Huawei of doing?
The NSA knows best what can be done to compromise hardware and software; it does not matter if Huawei is guilty or innocent. The firm has no hope of cracking the US market and might as well disband its lobbying team and save the money.
Today’s revelations are more bad news for US hardware and software makers selling into China. Yes China may not yet have comparable technology at the high-end, but the continuing disclosures stemming from Snowden’s actions will only strengthen the hands of the more security conscious and lead China to redouble its efforts to reduce reliance on American technology. It may take a while, but the odds are high they will get there.
Regular readers may remember the following commentary from July 19:
The Rhodium Group has an important post about PRISM and Its Implications for US Businesses in China:
At the end of June, the state-backed China Economic Weekly ran a cover story (中国经济周刊–美国“八大金刚”渗透中国大起底) calling eight US companies – Cisco, IBM, Google, Qualcomm, Intel, Apple, Oracle and Microsoft – “guardian warriors” that had “seamlessly penetrated” Chinese society. The Weekly called Cisco “the most horrible”, given its significant – more than 50% – market share in China’s information infrastructure in financial, military, government and transportation sectors. The magazine also ran a long list of ‘the Eight’s’ projects within China, including Cisco’s upgrades of the People’s Bank of China’s Intranet, IBM’s facilitation in building the Yunnan province police bureau’s database, and Microsoft’s improvements to China Eastern Air’s information technology.
Last month I suggested in a Dealbook column that in the wake of Snowden’s revelations Cisco and other American technology firms were now at risk of “being Huawei’d in China.” The Rhodium authors argue that “Beijing would probably be the biggest loser if an anti-US tech campaign goes into full swing”. Perhaps, but security concerns may trump other considerations.
Snowden is still the gift that keeps giving, at least in Beijing.
THE ESSENTIAL EIGHT
N.S.A. Foils Much Internet Encryption – NYTimes.com By this year, the Sigint Enabling Project had found ways inside some of the encryption chips that scramble information for businesses and governments, either by working with chipmakers to insert back doors or by surreptitiously exploiting existing security flaws, according to the documents. The agency also expected to gain full unencrypted access to an unnamed major Internet phone call and text service; to a Middle Eastern Internet service; and to the communications of three foreign governments. In one case, after the government learned that a foreign intelligence target had ordered new computer hardware, the American manufacturer agreed to insert a back door into the product before it was shipped, someone familiar with the request told The Times.
Related: After Snowden revelations, China worries about cyberdefense, hackers – The Washington Post “For those in the industry, we really need to thank Snowden,” joked Tony Yuan, founder of NetentSec, a Beijing company selling fire-wall hardware and Internet filtering tools. Government and company officials who once saw information-technology security as an unnecessary cost, Yuan said, have suddenly become interested in upgrades.
Related: Venustech a sign of China’s cyber-boom – The Washington Post The Chinese cybersecurity companies that have grown fastest and are best positioned for the expected boom in spending are often those with the closest ties to government. Among them, Beijing-based Venustech is one of the largest, most successful and most trusted by China’s government and its ruling Communist Party. // run by a returnee from the US
Related: A Few Thoughts on Cryptographic Engineering: On the NSA On the hardware side (and while we’re throwing out baseless accusations) it would be awfully nice to take a second look at the Intel Secure Key (formerly Bull Mountain) integrated random number generators that most Intel processors will be getting shortly. Even if there’s no problem, it’s going to be an awfully hard sell pushing these internationally after today’s news.
Related: Chinese VP stresses integrated circuit industry’s development – Xinhua Chinese Vice Premier Ma Kai has called for faster development of the integrated circuit (IC) industry to spur industrial upgrades. Speaking during an inspection tour of IC industrial bases in Shenzhen, Hangzhou and Shanghai from Sept. 2 to 5, Ma said that the IC industry is the core of the information technology sector and plays an important role in safeguarding the country’s information security.
Chinese, U.S. presidents hold second meeting in three months – Xinhua Chinese President Xi Jinping and his U.S. counterpart Barack Obama met here Friday for talks on bilateral ties and other issues of common concern…”China and the United States have been working closely to implement the consensus reached at the summit,” Xi said, citing the achievements made at the fifth round of the China-U.S. Strategic and Economic Dialogue in July. China-U.S. relations have maintained sound development momentum, the Chinese president said, noting that the two countries have improved their military ties and kept communication and cooperation on major global and regional issues.
Related: [视频]习近平会见美国总统_新闻频道_央视网 CCTV Friday Evening News on the Xi’s meeting with Obama…who is sitting between Froman and Medeiros?
China Agrees to Give 41% of $100 Billion BRICS Reserve Pool – Bloomberg China will contribute $41 billion to a $100 billion pool of currency reserves the BRICS countries are forming to guard against financial shocks, the nations’ leaders said. Russia, India and Brazil will each add $18 billion to the pool, while South Africa will provide $5 billion, according to a statement following an informal meeting today of the countries at the Group of 20 summit in St. Petersburg, Russia.
Related: Chinese president urges BRICS to boost coordination – Xinhua Xi is the tallest of the five // Chinese President Xi Jinping (2nd R) poses for a group photo with leaders from other four BRICS countries in St. Petersburg, Russia, Sept. 5, 2013. An informal summit for leaders of BRICS countries was held here on Thursday prior to the G20 Summit.
Related: BRICS currency reserves pool “a milestone”: Chinese central banker – Xinhua Zhou said a pool formed in the midst of an eventful economic situation like now was of special importance. He further explained the planned pool would learn from other successful regional financial cooperation formats and mechanisms like the Chiang Mai Initiative, and the BRICS pool would become an inter-regional currency cooperation in the form of currency interchanges.
Japan’s Abe Tells China’s Xi Diplomatic Ties Should Be Repaired – Bloomberg Abe shook hands with Xi and exchanged greetings followed by a brief discussion before a plenary session of the Group of 20 meeting in St Petersburg, Chief Cabinet Secretary Yoshihide Suga told reporters. The informal chat yesterday was the first meeting between the two leaders. Next week marks the first anniversary of Japan’s purchase of three uninhabited islands disputed with China.
Related: Chinese president expounds China’s stance on Japan ties to Abe – Xinhua Xi expounded China’s principled stance and pointed out that China-Japan ties are facing grave difficulties, which “we are unwilling to see.” The Chinese side is willing to further advance the China-Japan strategic ties of mutual benefit on the basis of the four Chinese-Japanese political documents, Xi said. Xi stressed that Japan should correctly deal with such sensitive issues as the Diaoyu Islands and history in line with the spirit of facing history squarely and looking forward to the future so as to seek a way to properly manage differences and address the problems.
Related: Commentary: Improvement of China-Japan relations rests with Tokyo – Xinhua The polite encounter in a VIP room for summit participants was the first face-to-face contact between the leaders of the two countries since the Japanese government rebuffed Beijing’s warning and nationalized the Diaoyu Islands, the inherent territory of China, in September last year…A polite encounter may be a good start, and it shows Beijing’s willingness to bring its relations with Japan back on the right track, but whether that can happen still rests with Tokyo. It is better for the doer to undo what he has done. It was Japan that triggered the “grave difficulties” in bilateral relations, so it should be Japan that takes the initiative to break the stalemate.
Yukon Huang: Understanding China’s unbalanced growth | FT Alphaville Misinterpreting the reasons why China’s growth is unbalanced in terms of macro-aggregates leads to the wrong policy prescriptions, including the argument that China needs a more “consumption-led” growth model — a concept which does not exist in economic theory — or that China needs to grow more slowly so that the share of consumption to GDP will increase — which confuses means and end. But China does face major economic problems brought on by declining productivity and surging debt levels. The challenge for the new leadership is to escape the middle income trap by implementing a complex set of structural reforms so that the economy can grow at around 7 percent for the remainder of this decade. This will not be easy. China needs to improve the efficiency of its urbanisation process and develop more appropriate financing sources. If it succeeds, then rebalancing will eventually occur as a byproduct of a more sustainable growth path but not as the intrinsic objective. //Could Michael Pettis be wrong? Many many foreign fund managers subscribe to his view of China’s economy and prospects, and none of them are dumb
AFP: China to allow free yuan exchange in Shanghai zone But companies in the zone will have the freedom to trade the yuan, also known as the renminbi, according to the plan. “Under the pre-condition that risk can be controlled, in the zone convertibility of the renminbi on the capital account will be conducted, the first to carry out and test (it),” it said.
Related: China free trade zone to liberalise 19 sectors | GlobalPost A draft plan for China’s free trade zone in the commercial hub Shanghai seen by AFP proposes further liberalisation in 19 distinct business sectors.
Related: 上海自贸区周边房价一夜涨近10%-新闻中心频道-新华网 housing prices around Shanghai Free Trade Zone jump overnight // 本报讯 （记者 黄勇娣）自贸区利好持续发酵，沪上一些房产中介机构调查发现，以外高桥板块为代表的自贸区周边二手房业主惜售、大幅涨价的势头已经开启，其中一些二手房挂牌价甚至在一夜之间涨了近10%。由于既有轨交房又有学区房的优势，外高桥板块的二手房成交近期非常活跃。交易以次新房为主，但挂牌房源一直偏紧。主力楼盘包含金地未未来、中冶尚城、幸福小镇、仁恒家园、绿地崴廉公寓等，均价在2.7至3.2万元/平方米之间，一些老小区成交价在2.3至2.5万元/平方米左右，距离保税区均在3公里范围内。
Google’s Former China President Lee Says on Blog He Has Cancer – Bloomberg “Although lymphoma doesn’t sound optimistic and has made my family and friends concerned, this is life — it comes as a surprise but I should face it calmly,” Lee, 51, said on his Sina Corp. (SINA) Weibo account at about 8:07 a.m. Beijing time today. “Sickness is part of life; I will choose to face the ups and downs of life with a more positive attitude.” The news sparked more than 70,000 comments, mostly well wishes, within less than two hours after the posting. Lee, chairman and founder of venture capital fund Innovation Works, is known in China as a leader in supporting technology innovation and for offering advice to young people on the Twitter-like Weibo service.
‘Most Expensive Bed in the World’ Now Sold in Beijing-Caijing The headline-grabbing ‘Royal State Bed’, priced at 125,000 GBP (1,186,600 RMB), is the latest in a series of models being introduced to the Chinese market by esteemed British brand Savoir Beds. Originally exclusive bed makers for London’s prestigious Savoy Hotel, Savoir has over a century of experience giving its customers a sound night’s sleep. It takes Savoir’s craftsmen over 700 hours to make each bed; including the four-metre high headboard, large canopy and hand stitched trimmings made of silk, cashmere and – apparently – Latin American horse tail. // no word on the buyers, or if horse heads eventually join the horse tails
BUSINESS AND ECONOMY
China Stocks Rise as Shanghai Trade Zone Boosts Banks, Shippers – Bloomberg The Shanghai index has climbed 9.7 percent since reaching this year’s low on June 27 as reports ranging from industrial production to manufacturing and money supply signaled the economy is stabilizing. An official manufacturing gauge jumped to a 16-month high in August.
Xinhua Insight: Record land prices prompt call for more control efforts – Xinhua Insiders and experts have called for more government efforts to cool the property market and keep the overall housing prices in check as recent months saw a drastic surge in the land prices and a home price rebounce in major cities. Some of them even warned that home prices may spiral out of control in September and October considering rocketing land prices.
Early Look: Chinese Economy Likely Had a Good August – China Real Time Report – WSJ Underpinning that resilience: strong investment powered by massive credit in the opening months of the year. Government spending on infrastructure, an increase in new building in the real estate sector, and a return to calm in the banking system after a liquidity squeeze earlier in the summer all played a part in stabilizing growth. With evidence of a pick-up mounting, investment bank economists have been rushing to revise their downbeat gross domestic product forecasts for the third quarter. J.P. Morgan now expects 7.6% year-on-year GDP growth up from 7.4%, and Deutsche Bank projects 7.7% versus a previous forecast of 7.5%. Growth in the second quarter was 7.5%.
China’s Cash Crunch, Round 2 – China Real Time Report – WSJ “There’s a decently high chance that you’re going to see rates get very volatile as we get into the fourth quarter,” said Jonathan Anderson, a former International Monetary Fund economist now at Emerging Advisors Group. “I don’t think we’re done.” // but does Beijing really want turmoil heading into the 10.1 National Day Holiday celebration? Kind of goes against the happy patriotic feelings we usually get, I would bet on the politics forcing a much calmer market than last quarter end
Mixed blessings for investors as China lets some firms recapitalize | Reuters Tellingly, 16 property firms, including Xinhu Zhongbao (600208.SS) and Beijing Urban Construction Investment and Development (600266.SS), have announced plans to recapitalize since the start of August, with combined fund-raising targets of 44.4 billion yuan. The sector has been largely cut off from raising fresh capital due to government efforts to cool an overheated housing market, but the stack of applications lying with the CSRC suggest that is about to change. “This is a clear sign that a ban on property firms’ recapitalizing has quietly been lifted,” said Zheng Weigang, head of investment banking at Shanghai Securities. “It’s also part of a government relaxation of a sweeping clampdown on the property sector.”
HSBC completes cross-border, two-way yuan lending in China | Reuters HSBC said on Friday it had completed a two-way cross-border yuan lending transaction for a Taiwanese company under a pilot program China introduced in August, becoming the first foreign bank to conduct such a transaction. The city of Kunshan, in Jiangsu province, got the go-ahead last month to allow cross-border, two-way yuan lending for Taiwanese companies, which enables them to utilize their onshore and offshore yuan funds more efficiently with better flexibility.
楼继伟几度讲话勾勒税改“路线图”_财经频道_一财网 First Financial on the outlines of Lou Jiwei’s tax reform plans // 楼继伟强调，“未来税改，直接税为主不是方向，公平有效简洁的税制结构才是方向”。
How to Make China More Honest | ChinaFile — Derek Scissors Official Chinese economic statistics, from unemployment to arable land, are controlled by the Communist Party and therefore cannot be trusted. The prevailing American and global view of China as a rising, if presently troubled, economic superpower is based on this unreliable data. Evaluation of selected economic, financial, and sociopolitical indicators shows them to be inconsistent and most likely inaccurate, so that American and global decision making is badly informed. A sustained effort to compile more accurate data on China would clarify China’s global economic role and improve the basis for U.S. policy-making and limit taxpayer exposure.
China Central Bank Warns Risks over Surge in Interbank Business-Caijing China’s central bank has warned over dangers from interbank business expansion as surging off-the-balance debt may disturb monetary polices and make it harder to ward off financial risks. Interbank business in the country has grown substantially over the last three years with assets expanding by an average 32.7 percent year-0n-year from June, 2010 to June, 2013, said Hu Xiaolian, deputy governor of People’s Bank of China (PBoC) Thursday at a financial forum in Beijing.
Business group: Foreign companies in China feel unfairly singled out by government probes – The Washington Post Foreign companies believe they are unfairly being singled out for scrutiny in bribery and pricing investigations, the biggest European business group in China said Thursday. The comments by officials of the European Chamber of Commerce in China follow announcements about fines imposed on dairy suppliers over pricing issues and an investigation into possibly bribery by employees of drug manufacturers GlaxoSmithKline and Sanofi.
POLITICS AND LAW
张毅赴大庆长庆传达中央指示_政经频道_财新网 SASAC Head Zhang Yi visits the Daqing oil field, passes on the Center’s instructions // 代替蒋洁敏主持国资委全面工作的张毅到中石油腐败案的两个重灾区安抚宣慰，要求推进人财物等重大决策权力运行的公开透明，打造阳光央企
Scandal-hit PetroChina tightens control over managers to keep firm running | Reuters The company had issued an internal memo asking director-level managers – a group numbering up to 1,000 people – to essentially clock-in each day to show they were at work, a second PetroChina official said. He said the aim was to make sure operations were not disrupted, but also in case directors tried to flee China or were needed as part of the investigation, one of the biggest ever at a Chinese state-owned firm. The first official said the company had “stepped up day-to-day management” and supervision of operations and was ensuring all employees reported for work daily.
油企“黑洞”：承包招标均有寻租空间_财经频道_一财网 First Financial on the massive corruption opportunities in the oil business. How far can they dig? // 近日，《第一财经日报》记者兵分两路，前往中石油集团下属最重要的两个二级公司——大庆油田、长庆油田，了解油田承包、供应商及工程招标等情况。事实上，此次落马的两名中石油前高管王永春和冉新权，也分别是两大油田曾经的一把手。 不可否认的是，我国的石油产业上中下游基本都为央企主导，这种格局的初衷是为保障战略性资源的稳定，却又为管理者带来了寻租及权钱交易的空间。特别是在我国原油对外依存度超过50%，经济发展急需油气增产添砖加瓦的背景下，石油企业吸引民资合作，开放部分业务的做法为利益输送创造了条件。 在梳理出部分中石油旗下公司在承包及采购等领域的生态系统后，这一“黑金”行业的秘密开始隐约浮现。
审计引中石油地震:传一王姓人家1亿美元买设备挣8亿 – money的日志 – 网易博客 so who is this person “surnamed Wang” in Los Angeles who made $800 million on overseas equipment he purchased and then sold to PetroChina? And if this person is a US citizen, have they properly reported all their overseas bank accounts and global income to US authorities? The FCPA may not be the only way in if the US government wants to investigate // 据《商业周刊》中文网报道，此次中石油人事地震由审计引发。有关部门发现中石油的账务资金往来、设备采购存在重大问题。据报道，中石油有单海外设备采购生意，受益者是洛杉矶的 王姓人家。王家成立一信托基金，花1亿美元采购石油设备，然后卖给中石油，挣了8亿美元。但这一消息未获得中石油官方证实。
Sina Weibo users now need employment documents to get verified ID – CHINA – Globaltimes.cn Sina Weibo users seeking to have their identity verified are required to submit their employment certificate sealed by their employer, the microblogging service provider said Thursday.The twitter-like service, with more than 500 million users by the end of 2012, made public the procedure of account verification, noting that on a daily basis 70 percent of applications are rejected for failing to follow the rule. In addition to providing their real names, ID numbers and phone numbers, individual users who apply for the real-name verification must also offer proof of their employment with the seal of their employers.
南方周末 – “打击网络谣言”台前幕后 Southern Weekend on the background to the current crackdown on Big Vs and online rumors // 这次打击网络谣言行动也离不开国家互联网信息办公室的影子。早在2013年5月，国信办就在全国范围集中部署打击网络谣言行动，矛头直指大V。“有一些所谓‘大V’账号以‘求辟谣’、‘求证’等方式故意扩散谣言……扰乱了正常传播秩序。”国信办相关负责人当时对新华社记者说。6月18日，公安部召开电视电话会议，部署集中打击整治网络违法犯罪专项行动，整治周期从今年6月至12月为期半年，打击重点是“利用互联网从事诈骗、涉黄涉赌、侵害公民个人信息等违法犯罪活动”。 一位接近公安部的人士称，打击网络有组织犯罪是这次行动的核心，而打击有组织传播制造谣言等违法犯罪是这次行动的第一阶段，其中是否有组织、是否涉及经济利益是最为重要的两个判断标准。许多地方打击谣言行动从6月就已开始，8月20日是公安部展示“战果”之时…据南方周末记者了解。有关部门在8月底下发文件，称要依法打击网络谣言，严防扩大化。“公安部的初衷是打击网络有组织造谣，而不是普通网民。”一位接近公安部的人士称。
南方周末 – 打击谣言的法律边界重拳严打，天下无谣？ 以“寻衅滋事罪”处理网络谣言，意味着在“口袋罪”里又塞了个“口袋”。一旦以寻衅滋事罪追究网络造谣行为，如何为之规定一个明确的界限，将会和寻衅滋事罪本身一样陷入纷争。 “如果因为一个人举报了一些官员，就把他所造成的损害扩大到民众对于执政党信心的动摇，由此上升为扰乱社会秩序，跨度就太大了。我们的社会秩序没有那么脆弱。”“刑法的‘最后手段性’、谦抑性必须要坚持，不能动辄动用刑罚手段。”“如果把所有的事情都用刑法管起来，试图搞道德纯净化运动，那可能是一种灾难。”
Censors, show your swords! – China Media Project Both the People’s Daily and Beijing Daily editorials use the phrase “showing one’s sword” to encapsulate the idea of official resolve in the face of ideological challenges. “‘Showing Your Sword’ At the Critical Moment” is the headline of the People’s Daily piece. The newspaper sums up the idea this way: “The courage to show one’s sword also means having a firm attitude and holding a clear position on those things that violate the interests of the masses and go against Party discipline and the laws of the nation.”
Inner Mongolia detains dozens in Communist party internet crackdown | World news | theguardian.com The suspects were detained for illegally distributing 1,200 pieces of information, including “internet rumours and false reports of disaster, epidemic, and police emergency”, according to the statement. Both the statement and follow- up state media reports suggest that the detentions are part of a nationwide “strike hard” campaign by the Communist party to tighten its grip on the country’s online communities.
宁吉喆任国务院研究室主任 为李克强重要助手_网易新闻中心 据知情人士介绍，宁吉喆为国务院总理李克强的重要助手之一，在李克强担任国务院副总理的5年间，几乎陪同李克强参加了所有重大会议和调研考察，也是“十二五”规划和今年政府工作报告的主要起草人之一。
Political manoeuvring: The plot thickens | The Economist Hunting tigers is a traditional pastime of Chinese leaders trying to show their mettle. Mr Xi’s predecessor, Hu Jintao, bagged nine officials of the rank of deputy minister or higher in 2003, the first full year of his leadership (he had felled more than 70 bent officials of such rank by the time he stepped down last November). Since taking over, Mr Xi has kept pace. He has taken down nine so far, according to state-controlled media. His biggest prey was announced on September 1st: Jiang Jiemin (above, right), the minister responsible for overseeing China’s state-owned assets. Mr Jiang is the first full member of the party’s central committee to be investigated for “discipline violations” (a party euphemism for corruption) under Mr Xi’s rule. Mr Hu also locked up an allegedly corrupt central committee member, the then minister of land, Tian Fengshan, at a comparable stage of his leadership….But Mr Xi appears to be going a big step further
Powerful Oil Clique at Center of Chinese Probes – WSJ.com The old oil network includes some figures who are still in senior posts throughout the industry, including Fu Chengyu, the chairman of Sinopec, according to analysts and insiders. But they said the probe was unlikely to spread to the other oil companies because that could risk throwing the entire industry into chaos, and antagonizing too many other senior party figures with interests in the business.
美女高管被捕细节：身带7大箱钱物 登机前10分钟被抓-法治频道-新华网 Details of the arrest of Shanghai Fanxin’s Chen Yi in Fiji..says she was caught 10 minutes before boarding a flight to leave Fiji…she and her companion were not traveling light, had 7 pieces of luggage, some filled w luxury items, and 7 Million RMB worth of cash in various currencies // 上海泛鑫保险代理公司美女高管陈怡携款外逃一案备受关注，上海市公安局召开发布会，披露抓捕细节。案发后，上海公安积极调查取证，8月17日通过公安部发布红色通缉令，确定目标潜逃斐济。公安部和上海公安立即成立境外缉捕小组，经过60多个小时紧急行动，最终在陈怡与男友即将离开斐济前10分钟将两人控制，当场查获近千万元财物，并将两人押解回国。
“替领导看网”将成正式职业_中国新闻·时事_新京报电子报 Online Public Opinion Analyst a growth industry for job seekers // 网络舆情分析师正式被人社部纳入职业培训序列
No Swift China Breakthrough Seen by Mao-to-Xi Scholar of Economy – Bloomberg Zhang Shuguang, who’s studied China’s economy for more than 50 years, is skeptical that Communist Party leaders will unveil significant breakthroughs in an economic plan due in November. “It will mention rural reform, it will mention fiscal reform, it will mention financial reform — but obstacles hindering these reforms are still there,” Zhang, 73, an economist and senior fellow with the Chinese Academy of Social Sciences, said in an interview in Beijing last week. “Hopes for breakthroughs shouldn’t be too high.”
Zhu Rongji: Architect of a New, More Global China | Brookings Institution Zhu Rongji on the Record; The Road to Reform: 1991-1997 is a collection of more than 100 speeches and personal papers selected by Zhu and published by the Brookings Institution Press. Senior Fellow Kenneth Lieberthal says this volume, the first of two, is a revealing and insightful look at Zhu’s thinking and will lead to a greater understanding between the world’s two largest economic powers.
China’s ‘Brother Watch’ Yang Dacai Oddly Beatific in Face of 14-Year Prison Term – China Real Time Report – WSJ China’s anti-corruption drive would appear to be no laughing matter, with a growing list of government officials facing lengthy prison stays for living suspiciously beyond their means. But try telling that to “smiling official” Yang Dacai, who was captured wearing an odd grin at a trial that on Thursday saw him sentenced to 14 years in jail for accepting bribes.
To Reform or Not Reform?—Echoes of the Late Qing Dynasty | ChinaFile Conversation The most fundamental difference I see between the late Qing and the present is the culture of confidence in China today. In the last years of the Qing, Chinese generally believed that, in order to survive, China needed to abandon many of its traditional institutions and learn from the West and Japan. Now, especially after the Euro-American financial collapse of 2008 (also the year of China’s triumphal Olympics), China’s leaders are confident that its political and economic system is superior to that of the West. In many ways, these leaders remind me less of Cixi than of Qianlong in the 18th century, who disdained any need to learn of the West’s new technology. Like Qianlong, the current leaders have experienced years of unbroken progress. What will happen if they are challenged by setbacks in the economy, the environment, or the always troubled ethnic frontier?
FOREIGN AND DEFENSE AFFAIRS
China, Russia a Step Closer on Gas Supply-Caijing Under a memorandum of understanding the two energy giants signed in March, Russia will supply 38 billion cubic meters of gas to China annually from 2018. The volume is expected to increase to 60 billion cubic meters in following years. An energy expert who declined to be named said that although the framework agreement is not legally binding, “the signing of the document, when price remains the only problem, signals the possibility of a breakthrough on the price negotiations.” Gazprom said in March that the price discussions are expected to be finished before the end of the year and lead to a long-term deal.
Is China Occupying 640 km of Indian Territory? | Flashpoints | The Diplomat According to reports in the Hindustan Times and Headlines Today, Chinese military forces have gradually assumed control over an aggregate of 640 km across three sectors along the border in Depsang, Chumar and Pangong Tso. The media reports also said that after a PLA incursion into Indian territory on April 15, Indian forces have been prevented from patrolling the Depsang Bulge.
Communist Party Members May Be Ineligible for U.S. Green Card | U.S. and China Visa Law Blog Did you think the Cold War was over? The U.S. Immigration and Nationality Act still makes ineligible for permanent residence any person who “is or has been a member of or affiliated with” the Chinese Communist Party (CCP). There are certain exceptions and waivers, however. 1 A person may be also be ineligible for a green card (“inadmissible”) due to membership in other organizations “affiliated” with the CCP, such as China’s minor political parties or mass organizations (e.g., Communist Youth League, All-China Federation of Industry and Commerce, All-China Federation of Trade Unions, All-China Women’s Federation, etc.). 2
Aircraft Carriers or Not? Flattops in the Pacific | The DiplomatThe Pacific region—for this article, the line of nations bordering the Pacific Ocean stretching from Australia to Japan and the Korean Peninsula—has in the past decade or so witnessed a surge in the number of naval ships sporting a “through deck” design to allow flight operations to be conducted from their flight decks. Usually classified as amphibious ships or helicopter destroyers/cruisers, they had mostly escaped serious scrutiny in the mainstream consciousness. Until the past few weeks, that is, when a series of events thrust these vessels into global news headlines.
Philippines recalls envoy to China amid new sea spat – Channel NewsAsia The Philippines has recalled its ambassador to China for consultations, the foreign department said on Thursday amid fresh tensions in a seething maritime territorial row.
S. Pacific ‘Chinese ports’ cause worry / Japan, U.S., Australia wary of ‘footholds’ – The Japan News Japanese, U.S. and Australian defense authorities are increasingly wary over China’s moves to develop port facilities in island countries in the Pacific Ocean amid concern that those facilities could become Chinese Navy footholds in the future. Japan, the United States and Australia aim to take concerted action to curb China’s growing influence in the Pacific at the Pacific Islands Forum, which opened on Tuesday, and on other occasions.
Australian tycoon to sue Murdoch, claims wife Chinese spy – Yahoo! New Zealand In a separate interview with the Nine Network, Palmer made extraordinary claims about Murdoch’s estranged wife Wendi Deng. “‘You know, Rupert Murdoch’s wife Wendi Deng is a Chinese spy, and that’s been right across the world,” Palmer alleged, prompting the stunned host to ask whether he had “lost the plot”. “She’s been spying on Rupert for years, giving money back to Chinese intelligence. She was trained in southern China. I’m telling you the truth,” Palmer said. “Wendi Deng is a Chinese spy and that’s why Rupert got rid of her.” He continued: “And this guy (Murdoch) wants to control Australian politics. He wants to control what you think.” // Clive Palmer can kiss his China-related businesses goodbye? And Australian politics is entertaining
U.S. North Korea envoy to visit South Korea, China and Japan | Reuters The Sept 8-13 trip by Special Representative for North Korea Policy Glyn Davies comes shortly after another U.S. envoy was forced to cancel a visit to Pyongyang when the North Koreans rescinded his invitation. North Korea canceled the visit by Robert King, U.S. special envoy on North Korean human rights issues, to Pyongyang last week in a response to annual military drills last week by the United States and South Korea.
A Chinese landing craft with 1,000 marines for Syria – DebkaFile Really? To evacuate Chinese citizens, assuming this report is accurate? // Western naval sources reported Friday that a Chinese landing craft, the Jinggangshan, with a 1,000-strong marine battalion had reached the Red Sea en route for the Mediterranean off Syria. According to DEBKAfile, Beijing has already deployed a number of warships opposite Syria in secret. If the latest report is confirmed, this will be the largest Chinese deployment in the Middle East in its naval history.
为将军正名–时政–人民网 PLA performance troupe members do not have official ranks in the PLA// 不得称呼“文职将军”，不仅是依法加强军队干部管理的应有之义，而且淡化了文职干部的“官本位”色彩，有利于在文职干部的选拔、培养、使用中凸显专业为先的导向，有利于部队内部管理秩序的正规运转，有利于释放我军能打胜仗良好形象的正能量。
HONG KONG, MACAO AND TAIWAN
Cheung Kong Group Denies Li Ka-shing Pulling back from China-Caijing Board of director of Cheung Kong Group, the leading HK-based multi-national conglomerate, has denied its chairman Li Ka-shing is giving up on investments in China following reports of his groups selling Chinese assets while shopping in Europe. Li’s conglomerate, Hutchison Whampoa, has put the supermarket chain ParknShop in HK up for sale while the Cheung Kong is selling an office building in Shanghai for at least 6 billion yuan, triggering speculations that the Asia’s richest man is withdrawing investments in China, both the mainland and HK. The two of Li’s groups are also reportedly selling a piece of commercial property in Guangzhou to GCREF Acquisitions 22 Limited for a total of over 3 billion yuan.
Casinos in Asia: The rise of the low-rollers | The Economist The billionaire developers and politicians behind these ventures all believe they can lure Chinese high-rollers away from the territory. A Chinese businessman who has often entertained wealthy clients in Macau’s casinos adds that the new Chinese leadership’s crackdown on official corruption and flaunting of wealth are leading clients to consider new venues far from its reach: “Beijing has too many cameras watching us in Macau.” …In fact there are several reasons to think that Macau’s brightest days may still lie ahead. The most important is that unlike rival destinations, which must typically be reached by air from China, Macau’s physical attachment to the mainland (it is composed of a peninsula and islands) means it can easily and cheaply be reached by land. So it has an alternative to the high-flyers: the mass market.
TECH AND MEDIA
合伙人制被否 马云继续博弈IPO_财经频道_一财网 First Financial reports that Hong Kong’s securities regulator rejects any special exemptions for a possible Alibaba IPO // 香港证监会已召开董事局会议，对于任何会被视为对阿里巴巴作出豁免，使其不需遵守现行上市规定的改变，证监会都予以否决.
Alipay and UnionPay Battle over How Payments Are Processed – Caixin In 2004, UnionPay rejected Ma’s proposal to handle Internet payments forwarded by Alipay because it thought little of the market, he said. Ma had to negotiate with banks one by one to connect Alipay with their payment systems. Alipay’s online payment system now supports nearly 200 banks’ credit and debit cards. Following Ma’s footsteps, many non-financial companies, including Tencent and Suning, have started offering consumers payment services. By the end of July, about 250 companies including two with foreign investors have been licensed by the central bank to run third-party payment business. “Almost all of them are in the form of direct links” with individual banks, the source said. Now that the market is flourishing, “UnionPay wants to come in between and grab what others hold dear. These third-party payment companies, having invested a huge amount of energy at significant risks when the market was young, apparently find it unacceptable,” he said.
Xiaomi unveils new Android-powered 5-inch MI3, 47-inch smart TV in China Moving on, we have the 47-inch 3D-capable Xiaomi TV which is assembled by Wistron (who apparently also makes TVs for Sony), and it’ll come in six colors for the aluminium faceplate. The body boasts an 8.4mm bezel plus 2mm to 4.8cm thickness thanks to LG’s IPS and Samsung’s SVA panels. Like the Xiaomi Box, the TV also runs the company’s MIUI flavor of Android, supported by a quad-core Snapdragon 600 with 2GB of RAM, 8GB of storage, dual-band WiFi and Bluetooth 4.0. It even claims an “easy to use” remote with 11 buttons and Bluetooth. Shockingly, the TV will cost just CN¥2,999 (US$490) when it arrives in mid-October.
Apple’s Falling China Share Complicates IPhone Deal – Bloomberg Apple is expected to introduce an updated iPhone on Sept. 10, and there’s rising speculation the company will offer a low-cost handset. That would help seal a deal with China Mobile, which has 63 percent of the country’s 1.19 billion wireless accounts. “In this relationship, China Mobile has all of the power,” said Edward Zabitsky, chief executive officer of Toronto-based ACI Research. “China Mobile will offer the iPhone as soon as Apple gives in on price.”
China Unicom, Telecom to sell latest iPhone shortly after U.S. launch | Reuters China Unicom and China Telecom, the mainland’s second and third-biggest mobile carriers respectively with a combined 266 million subscribers, are Apple’s carrier partners in China, the world’s biggest mobile phone market with more than 1 billion users. China Mobile Ltd (0941.HK) is the only carrier without an iPhone contract, although it has been rumored in the market Apple and China Mobile may soon come to an agreement. Apple’s high-end 5S model may support a 4G technology called TD-LTE, which could pave the way for an agreement with China Mobile, which has more than double the subscribers of China Unicom and Telecom combined.
China market: Smartphone sales over 77 million units in 2Q13, says Analysys There were 90.39 million handsets sold in the China market during second-quarter 2013, slipping 0.2% sequentially but growing 41.8% on year, and 77.11 million of the units sold were smartphones, increasing 2.4% sequentially and 56.8% on year, according to China-based consulting company Analysys International.
China factory fire sends memory chip prices to three-year high | Business | theguardian.com The price of memory chips for mobile phones and computers has soared by 19%, a three-year record, following a fire at a factory in China belonging to Apple supplier SK Hynix. The world’s second largest chip maker after Samsung, Hynix supplies one third of the dynamic random access memory (DRAM) chips sold globally. The company has halted production at its factory in Wuxi near Shanghai after blaze tore through the foundry for 90 minutes.
SOCIETY, ART, SPORTS, CULTURE AND HISTORY
The burden on students: Must not try harder | The Economist Amid intense competition for university places and jobs, Chinese schoolchildren spend hours on homework each night. Pressure from an early age is the cause of constant hand-wringing in the press. Yet the very notion of lightening the burden has met opposition from the people who complain most: parents. Last spring Beijing attempted its own homework restrictions, but workloads crept back up as insistent parents worried about their children falling behind. //our kids are in the international side of a local school…no more homework starting last semester, per a Beijing policy…they have “suggested” work now…2nd graders. Frankly I wish they still had homework. It is good for them, within reason.
Stricter scrutiny for Sino-foreign joint education – Xinhua Chinese educational authorities will tighten scrutiny on Chinese-foreign joint education to address problems caused by for-profit, low-quality “overseas study preparatory classes.” Many Chinese senior high schools offer expensive “international classes” in cooperation with foreign educational institutions, many of them without approval from Chinese authorities, Sheng Jianxue, deputy director of the Ministry of Education’s international cooperation and exchanges department, said at a press conference on Thursday
Chinese Literature Textbooks Modified to Curb ‘Deep Thinking’ | TLN Recent changes to China’s teaching curriculum have made the news: an essay by the father of modern Chinese literature, Lu Xun (1881 – 1936), has gone missing from new editions of middle school textbooks. Citing the need for more “age-appropriate” material, the People’s Education Press has removed Lu Xun’s essay “The Kite” from its most recent edition, replacing it with an essay entitled “Autumn Nostalgia” by Shi Tiesheng. In recent years, Lu Xun’s writings have been disappearing gradually from official language and literature textbooks, sparking some concern among parents of school-aged children. In surveys conducted by Sina News, a popular news website, and Sina Weibo, China’s version of Twitter, an overwhelming majority of respondents expressed displeasure with the changes, noting that “Lu Xun’s works are classics, and represent the ‘spirit of the Chinese people.’鲁迅的作品是经典，代表“民族魂””
Say what? China says 400 million can’t speak national language | Reuters Ministry of Education spokeswoman Xu Mei said that only 70 percent of the country could speak Mandarin, many of them poorly, and the remaining 30 percent or 400 million people could not speak it at all, Xinhua news agency reported. “The country still needs to invest in promoting Mandarin,” it quoted her as saying, ahead of an annual campaign to promote Mandarin held every year since 1998.
南京私家车在拥挤隧道内为救护车让道(图) _新闻_腾讯网 Sad, it is news in China when cars move aside to let an ambulance pass, this time in Nanjing // 【为生命让道】还记得德国千余辆私家车自觉给救援车辆让道的视频吗？现在有了南京版！@XReTurNer ：7点27分，玄武湖隧道东向西，已经是车行缓慢的状态了，一辆救护车鸣笛通过(红车左前方)，大家纷纷让道，感动！ @郭洁琳Lynne ：都自觉给救护车让道了 ！为给所有让开生命之路的南京人点个赞！
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH
China’s Factory Owners Hunt for Energy Savings – Businessweek For decades after China started trading with the U.S. in 1979, most factory managers didn’t focus on electricity prices. Demand from abroad was expanding, labor was cheap, and the exchange rate favored China’s exporters. But conditions have changed since demand softened in the wake of the 2008 financial crisis. Chang says his labor costs have doubled, and the exchange rate is less favorable. Increasing energy efficiency is one way to shore up the bottom line.
FOOD AND TRAVEL
Boeing: China needs 5,580 new aircraft over next 20 years | Reuters China will need 5,580 commercial aircraft worth some $780 billion over the next 20 years, according to a statement released by Boeing Co (BA.N) on Thursday. // which is why China is trying to find alternatives to Boeing and Airbus, though will be tough