The Sinocism China Newsletter 09.22.15

And we are back…

Apologies for the longer than expected hiatus, but the relocation from Beijing to the Washington DC area was more distracting and dislocating than expected.

We missed a lot, from the popping of the stock market bubble and the RMB revaluation to the now widespread belief that China’s policymakers are far less competent than assumed. I do not remember sentiment towards the leadership and the economy ever being this bearish in the ten years I lived in Beijing. I do think the negativity is a bit overdone but clearly the challenges are massive and something has broken in the policymaking process.

Perhaps Xi does not actually have the bandwidth to be in charge of everything, and/or perhaps renewed study of dialectical materialism, creation of an atmosphere of paralyzing uncertainty and a campaign of de-Westernization are not conducive to managing a modern economy? Or, as some of the more bearish argue, the place is such a mess that there is nothing they can do in the short-term?

We certainly voted with our feet, though for many reasons other than economic ones. I am not yet sure if I will write a cliched “Why I left China” piece and for now am in a mandatory cool down period, aside from some initial venting on Twitter. I did talk about some of our reasons for leaving on a Sinica Podcast the week before we left in August, available here.

This is a big week with Xi Jinping’s visit to America. I somehow got onto the guest list (thanks to whomever put me on it) for the Friday luncheon with Xi, so if you are there please say hello as I no longer know many people in DC. My kids, still under the influence of mother-in-law and her unassailable faith in Xi, want me to take a selfie with him but somehow I don’t think that will happen.

The US and Chinese sides are both making positive noises about the upcoming summit. My understanding is that up until very recently the Chinese, while under instructions from Xi to make sure that the trip goes well, had little grasp of the growing anger and frustration among American business, media and policy circles. They seemed to have realized a couple of weeks ago that things could be heading off the rails, hence the last-minute, hastily planned visit by Meng Jianzhu as well as much of the positive propaganda efforts over the last few days. Expect the visit to be an optical success but there to be little substantive progress on the very significant areas of tension in the relationship.

The newsletter this week will have a special section on all things related to the visit, and as always informed reader comments are welcome. It is nice to be back, though my perspective and information flows have changed now that I am sitting in the US.

One occasional feature I will add is a useful Chinese phrase. The phrase today, courtesy of a reminder last week from a friend, is 吃硬不吃软 (chi1ying4 bu4 chi1ruan3), defined by the invaluable Pleco as “be open to coercion, but not to persuasion”. This seems to describe the CCP’s approach to the world, especially in the Xi Jinping era.

Today’s Links:

AnchorOBAMA-XI SUMMIT *

China’s Xi Jinping Arriving in U.S. at a Moment of Vulnerability – The New York Times interesting article though not sure I agree with headline that Xi is “vulnerable”.  //  Analysts say Mr. Xi’s recent setbacks will only reinforce his reluctance to offer concessions under pressure from the United States. “Xi is obsessed with strategic rivalry with the United States,” said Shi Yinhong, a professor of international relations at Renmin University in Beijing. “The summit won’t produce progress on strategic matters.” After almost three years in office, Mr. Xi has amassed daunting power. He has taken control of the party’s most important policy committees. His scorching anticorruption campaign has subdued potential opponents. His prime minister and other colleagues have been relegated to cheerleading roles.

Xi Jinping’s State Visit to the United States-Carnegie-Tsinghua Center This week, Chinese President Xi Jinping embarks on his first state visit to the United States at a complicated moment in the bilateral relationship. In this podcast with Paul Haenle, former senior director for Asian affairs on the U.S. National Security Council Evan Medeiros explains why he has modest expectations for Xi’s visit and why he believes that the most important aspect of the summit will be the private, strategic discussions between the two leaders. Medeiros observes that frictions are not a new feature of the U.S.-China relationship, which has long been a mix of cooperation and competition.

America’s painfully outdated approach to China – The Washington PostJames Mann -The truth is, the United States’ China policy is already changing at the working levels of government and at the grass-roots level, but our overriding ideas about this relationship have not kept pace. Over the next few years, a new U.S. policy toward China is sure to emerge, but it may do so gradually, from the bottom up. As it does, some simple concepts could be brought back into play. One is the idea that China should be treated by the same rules as other countries. Another is the notion of reciprocity: When China penalizes U.S. businesses or media, the United States should respond with similar limits on Chinese entities. We should develop a more businesslike approach, forsaking the dream that some personalized diplomacy or dramatic communiqué can bring back the special relationship of the past.

Schedule for the Visit | Xi Jinping’s U.S. Visit-NBR still looking for list of attendees to the state dinner.

National Security Advisor Susan E. Rice’s As Prepared Remarks on the U.S.-China Relationship at George Washington University | whitehouse.gov I know that some people question why we host China at all.  That is a dangerous and short-sighted view.  If we sought to punish China by cancelling meetings or refusing to engage them, we would only be punishing ourselves.  It is determined, constant engagement that allowed us to reach a climate agreement, while overcoming long-standing trade disputes.  And determined, constant engagement is necessary to manage our differences.  If America chose to remove itself from China, we would only ensure that the Chinese are not challenged on the issues where we differ and are not encouraged to peacefully rise within the international system that we have done so much to build. We want the Chinese people to succeed.

瞩望新型大国关系新航程–观点–人民网 People’s Daily pseudonymous international affairs commentator “Guo Jiping” on p1 of Tuesday’s People’s Daily, still pushing the idea of new type of major power relations on eve of Xi’s visit

走好中美构建新型大国关系之路(大使随笔)–国际–人民网 Ambassador Cui Tiankai in Monday’s People’s Daily, Chinese side still pushing hard on concept of new type of major power relations  //  “欲穷千里目,更上一层楼”。中美关系正处于承前启后的重要节点。中美两国的有识之士应该登高望远,用积土成山的精神携手推进新型大国关系建设。我相信,习近平主席对美国的首次国事访问将是一次沟通之旅、合作之旅、人民友好之旅,必将成为中美关系一个新的里程碑。

China’s policy paper calls for new mode of int’l relations – Xinhua  China on Monday called for a new mode of international relations with win-win cooperation as the core. The Chinese Foreign Ministry issued a paper on the 70th anniversary of the United Nations with President Xi Jinping due to attend UN meetings in New York later this week. The paper says that it is important to build a new type of international relations featuring win-win cooperation and a community of common destiny. It also calls for greater democracy and the rule of law in international relations. // the full text, in English

Chinese FM’s speech on Xi’s upcoming visit to US – Xinhua Chinese Foreign Minister Wang Yi delivered a keynote speech at the 14th Lanting Forum in Beijing on Wednesday, focusing on the upcoming state visit of President Xi Jinping to the United States and his attendance at the summits celebrating the 70th anniversary of founding of the United Nations.

When China met Carolina – YouTube slick, positive energy propaganda for Xi’s visit, produced by the “on the road to rejuvenation studio” 复兴路上工作室最新短片:习近平访美前,听听两国民众怎么说  // With insight from those who have been touched by investment from China ‘When China Met Carolina’ is a story of friendship, of shared work ethics, of respect and of the achievements grown from the US and China working together. A film that illustrates two nations that have more to unite than divide them, creating hope for a better tomorrow.

Americans Troubled by China Ties, Economy Tops List: Poll Americans are very worried about ties with China, with economic issues atop the list, including US debt held by Beijing, job losses to the Asian giant and the US trade deficit, a poll showed Wednesday. Half or more of the people questioned for the Pew Research Center survey rated those three areas as very serious problems. “The American public continues to see a number of issues related to China and its rising power as major concerns. In particular, economic issues loom large,” the center said.

Don’t Get Too Excited About A US-China Arms Control Agreement for Cyber – Lawfare If you want to understand the hurdles against a real cyber-arms control agreement, compare any such agreement to the Iran Deal.  Marvel at the extraordinary technical detail of the Iran Deal, note that a real cyber arms agreement would likely be much more technical (and indeed that for many of the most obvious terms we cannot imagine what a concrete agreement looks like right now), realize that verification and attribution are generally easier in nuclear than cyber, contemplate how Cybercommand would warm to the types of inspection and verification regimes that would be needed for China to monitor U.S. compliance with any cyber deal, and then imagine gathering 67 votes in the Senate for the deal without airtight verification and attribution regimes (and yes, a cyber deal, unlike the unusual Iran Deal, would need to go to the Senate).

Washington State Welcoming Banquet for President Xi Jinping – FORA.tv can watch it live here Tuesday Evening at 830 EST

What Would New Breakthroughs on Climate Change Mean for the U.S.-China Relationship? | ChinaFile Conversation With just over a week to go before Chinese President Xi Jinping begins his first State Visit to the United States, there is much evidence to suggest that bilateral action to fight climate change is an area most ripe for meaningful Sino-U.S. cooperation.

At the state dinner, leave some seats empty for China’s political prisoners – The Washington Post Fred Hiatt OpEd. Meanwhile his boss and Washington Post owner Jeff Bezos will meet with Xi in Seattle  // Host the Chinese leader with all the pomp and glitter that he expects, but set a few places for eminent Chinese who merit spots in the official delegation but find themselves unable to attend. Reserve an honored place, next to the first lady, for Obama’s fellow Nobel Peace laureate, Liu Xiaobo. Most governments would be proud to include a Nobel Prize winner in their delegation

No soft landing for China’s president as tension builds over state visit – The Washington Post The bulk of international intrigue has fallen on the U.S.-China Internet Industry Forum, a normally drab affair that, in prior years, has not registered a ripple of attention….Xi will not be dining with Microsoft’s Bill Gates at his mansion, despite numerous reports that that would happen, according to several people familiar with the matter who spoke on the condition of anonymity

Xi to press case for China-US Bilateral Investment Treaty-China Daily Maybe I am missing something but it seems unlikely that US-China Bilateral Investment Treaty negotiations have made such progress that deal will be done this week, no BIT is better than a bad BIT, any deal must include investment openings for US media companies in China, and be light on “trusting” Beijing to deliver future reforms…how did the “trust us for future reforms, implementation and compliance” work out in the deal for China’s WTO accession? // Negotiations on the China-United States Bilateral Investment Treaty will make up most of the discussions during President Xi Jinping’s forthcoming state visit to the US, the Ministry of Commerce said on Wednesday. The visit will speed up and upgrade trade, economic cooperation between the two nations and bolster bilateral relations, said Shen Danyang, the ministry spokesman.

Fu Ying-How Chinese and Americans Are Misreading Each Other — And Why It MattersCHINA US Focus | CHINA US Focus these the comments she made at recent CICR conference in Beijing to many of the leading lights of the US’ China policy establishment? //  The most pronounced aspect of the structural difficulty is America’s rejection of China’s political system and its impact. With different cultural traditions and political histories, countries tend to view and judge others from their own perspective. In the eyes of many Americans, China values collective interests and lacks democracy and human rights, while in the eyes of many in China, the Americans, who believe in individual rights, have a natural tendency to engineer political evolution in other countries, and therefore we need to be on guard. These oversimplified perceptions have put the two countries at two ends of the world, running parallel and never seeming to converge.

China looks at the west « New Paradigms Forum It is still something of a mantra in some parts of the U.S. China policy community that we must not think that, or act as if, China is a competitor or adversary, for this will “confirm” the worst suspicions of “hard-liners” in Beijing and thus become a “self-fulfilling prophecy.” This is an analytical mistake, however. The PRC has taken different approaches over the years for tactical reasons, based upon its assessment of various factors – including of what it stood to gain from smooth Sino-American relations in support of its dream of “return,” what the trends of “comprehensive national power” were felt to be, and what the domestic legitimacy discourse of the the CCP regime was felt to require.  Beijing has perceived the United States as an adversary and competitor all along, however, and the darkness and confrontationalism inherent in the regime’s America narratives cannot be dispelled, or Chinese strategic approaches redirected, simply by U.S. congeniality. // 吃硬不吃软

Chinese, Russian presidents send congratulatory messages to bilateral friendship organization – Xinhua top story in Tuesday People’s Daily// Chinese President Xi Jinping and his Russian counterpart Vladimir Putin have sent congratulations to the Chinese-Russian Committee of Friendship, Peace and Development on its 10th plenary session, which opened in Moscow on Monday.

AnchorTHE ESSENTIAL EIGHT *

1. China releases full text of reform plan for ecological progress – Xinhua China has released the full text of an integrated reform plan for promoting ecological progress on Monday. The plan, which consists of 56 articles, was released by the Communist Party of China (CPC) Central Committee and the State Council, or China’s cabinet. The plan was approved at a meeting of the Political Bureau of the CPC Central Committee on September 11. // full text in English and in Chinese

2China stresses Party leadership in SOE reforms – Xinhua China’s central authorities on Sunday issued a guideline to strengthen the leadership and supervision of the Communist Party of China (CPC) over its state-owned enterprises (SOEs). “The CPC leadership can only be strengthened rather than undermined as SOE reforms have entered the deep-water zone,” said the document released by the General Office of the CPC Central Committee. The Party leadership over SOEs is vital in ensuring the socialist direction of their development and enhance their competitiveness and competence, it added. // 中共中央办公厅印发《关于在深化国有企业改革中坚持党的领导加强党的建设的若干意见》

Related: China Announces State-Owned Enterprise Reform…Again | Gordon Orr | LinkedIn It’s not that nothing has been done in the last few years – quite a lot has. In particular, initiatives to have SOEs sell off non-core assets have made progress, and mergers of the national level SOEs into fewer larger entities is also ongoing.  It just has not been as radical, and certainly not as market driven, as the soundbites from 2 years ago implied. And so this September 2015 paper reiterates much that had been put forward earlier.

Related: 中共中央、国务院关于深化国有企业改革的指导意见(全文)中央有关文件政策_中国政府网 Full text of the SOE rfeforms guideline

3. Citic Securities, a Pillar of Finance in China, Finds Itself in Beijing’s Cross Hairs – NYTimes.com the company’s political connections have not provided protection. The Georgetown-educated chairman of Citic Securities, Wang Dongming, is the son of a former Chinese diplomat. The father of Liu Lefei, a vice chairman, is the Communist Party’s propaganda chief and a member of the ruling seven-member Politburo Standing Committee. Citic Securities also finds itself fending off rumors on Chinese websites and on social media. Shares of the company are off by almost two-thirds since peaking in late April. // can’t find much deeper waters in Beijing than those around Citic and Caijing, this investigation is remarkable, and chilling, though no one should be under the illusion that Citic Securities is a good actor

Related: Fei Chang Dao: Baidu Begins Censoring “Liu Lefei” – Vice Chairman of CITIC These screenshots were taken on September 18, 2015, and show that Baidu was not censoring search results for “Liu Lefei,” but was censoring search results for “Liu Lefei Father” (刘乐飞 父亲) and “Liu Lefei Dad” (刘乐飞 爸爸)…These screenshots show that at some time between September 18 and September 21, Baidu began censoring search results for “Liu Lefei.”  //  Daddy Liu Yunshan has a bit of a say in censorship…rumors going around that Liu Lefei may be in real trouble this time though nothing concrete yet

Related: 中信证券危局财新周刊频道财新网 总经理及多位高管被调查,老客户转投其他券商、被争抢IPO和再融资项目⋯⋯业界巨人中信证券面临成立以来的最大危机  //  Caixin on the crisis facing Citic Securities

4Why China Is Turning Back to Confucius – WSJ Two years after outlining a “China Dream” to re-establish his nation as a great world power, Mr. Xi is backfilling his vision and seeking a fresh source of legitimacy by reinventing the party as inheritor and savior of a 5,000-year-old civilization. The shift forms the backdrop for Mr. Xi’s visit to the U.S. this week and could shape China for years. Mr. Xi appears to be seeking to inoculate Chinese people against the spread of Western political ideals of individual freedom and democracy, part of what some political insiders say he views as a long-term contest of values and ideology with the U.S. // Party organs have made it very obvious that the CCP sees it in an ideological war with the US, and especially with the Internet as the “primary battleground”

Related: Why is China Talking ‘Democracy’ and ‘Freedom’ in Schools? – China Real Time Report – WSJ Not from a dissident underground, the posters are part of a government campaign. Through billboards, rhymes, pop quizzes and newly penned songs, the effort aims to promote what the ruling Communist Party calls “core socialist values.” A dozen in all, the values include rule of law, patriotism, honesty and justice as well as democracy and freedom. Schools in particular are a focus of the push. While it might seem incongruous for a government that recently detained scores of human rights lawyers and ranks 6.5 for freedom on the 7-point human rights index (7 is the worst) maintained by the nonprofit Freedom House, the campaign is part of a broader quest to diminish the attraction of Western values and revitalize party ideology by melding traditional Chinese culture with communist principles.

5. Rhodium Group » Broken Abacus? A More Accurate Gauge of China’s Economy In Broken Abacus? A More Accurate Gauge of China’s Economy, Daniel H. Rosen and Beibei Bao independently re-estimate China’s economy in terms of nominal GDP. To produce a result that could be compared with official Chinese figures, they relied on official data when it made sense to do so, while diligently documenting their methodology for future researchers. Die-hard national accounting specialists and macroeconomists will find a multitude of quantitative and qualitative findings in the full study, but the text is readable for experts and general China-interested readers alike. This path breaking study sets the stage for future China analysis where the absolutely size of the Chinese economy, not just the year-on-year change, will be of increasing interest and discussion.

Related: What Do U.S. Economists Think of Official China Statistics? ‘Only a Fool Would Believe Them’ – China Real Time Report – WSJ An overwhelming majority of the respondents to the latest Wall Street Journal survey of 64 economists–not all of whom answered every question–said China’s gross domestic product figures miss the mark. How far-fetched are the numbers? Well, here are a few comments on the question, “Do you think that China’s GDP statistics accurately reflect the state of the Chinese economy?”

6Special report: Chinese e-commerce’s rush into online finance could put countless users’ data at risk | CER while both Alibaba and Tencent expect users to trust them, neither seems to trust the other not to spy on its own employees given the chance. Such concerns may have prompted Alibaba’s chief risk officer, Shao Xiaofeng, to send an internal memo to the rest of the company one Monday in June of 2013 advising employees to only use the company’s products to communicate with coworkers.

7China, Connected | Foreign Policy What was once the object of concern and skepticism is now a point of national pride. Foreigners impressed with China’s HSR are frequent social media fodder, such as this video of a Swedish man successfully balancing a coin during his ride. Images of crowded trains are another recurring theme; one uploader also made sure to include some pointed remarks for earlier skeptics, saying: “No one’s saying China’s HSR loses money now.” But many comments are simply appreciative, underscoring how HSR has transformed the country the last few years. “HSR is fast and comfortable; you should try to take it whenever possible,” one Weibo user wrote. “China’s gaotie,” he added, “is number one in the world.”

8The politics of China’s anti-corruption campaign Implementing economic reform has a paradoxical relationship to the anti-corruption campaign. While vital to nullify interest group opposition, the campaign frightens and immobilises the officials who should implement reforms. Any reform hurts someone and the offended person may respond with an accusation of corruption — almost everyone has some vulnerability. Until the intensity of the anti-corruption campaign diminishes, economic reform will be limited. And that could take a while.–Bill Overholt

AnchorBUSINESS, ECONOMY AND TRADE *

China’s ‘Sloppy’ Policy Irks Blankfein as Yellen Cites Xi Doubts – Bloomberg Business. “If I wanted to invest in China, I wouldn’t invest now,” Blankfein, Goldman’s chief executive, told a breakfast meeting in New York last week. “I’m not going to buy after the Chinese government may have intervened.”

China Beige Book Says Pessimism ‘Thoroughly Divorced From Facts’ – Bloomberg “Perceptions of China may be more thoroughly divorced from facts on the ground than at any time in our nearly five years of surveying the economy,” CBB President Leland Miller wrote in the report. “Global sentiment on China has veered sharply bearish–too bearish. While we have long cautioned clients against relying on rosy official views of the Chinese economy, we believe sentiment has swung substantially too far in the opposite direction.”

Chinese state media continues tirade against Hong Kong tycoon Li Ka-shing in People’s Daily commentary | South China Morning Post Communist Party mouthpiece People’s Daily urged readers to “build a better country to make his departure today become his regret tomorrow”. In an article published on its WeChat social media account on Sunday night, the newspaper attempted to play down the impact of Li’s sell-off of mainland assets but admitted it could be seen as a “landmark event” that might have some negative impact. // 人民日报评论”谈李嘉诚事件:斯人已去 不必挽留 

How China decided to redraw the global financial map | Reuters Plans for China’s new development bank, one of Beijing’s biggest global policy successes, were almost shelved two years ago due to doubts among senior Chinese policymakers.

China Is Hoarding the World’s Oil – Bloomberg In the first seven months of the year, China purchased about half a million barrels of crude in excess of its daily needs, the most for the period since 2012, according to data compiled by Bloomberg.

China Home-Price Growth Widens to More Cities Amid Rate Cuts – Bloomberg Business China’s home prices rose in August in half of the 70 cities monitored by the government, spurred by easing of home-purchase restrictions and interest-rate cuts, even as the economy slowed and share markets plunged. New-home prices rose in 35 cities, compared with 31 in July, the National Bureau of Statistics said Friday. Prices dropped in 25 cities, fewer than the 29 in July, and were unchanged in 10.

A high-speed rail from L.A. to Las Vegas? China says it’s partnering with U.S. to build – LA Times sounds like a very long way from reality, but makes for good pr ahead of Xi’s visit  //  XpressWest, a private company formerly called DesertXpress, has been talking about its high-speed rail project since at least 2007. Plans have called for a 185-mile route that would run adjacent to heavily-traveled Interstate 15 from Las Vegas to Victorville, 85 miles northeast of downtown Los Angeles.

China investors in rare protest accuse regulators of ignoring fraud | Reuters Hundreds of investors gathered outside the headquarters of China’s securities watchdog on Monday to protest against a metals exchange in a southwest province they accuse of defrauding them of billions of yuan. Carrying banners emblazoned with the words “ignoring Fanya fraud”, the protestors were eventually dispersed by police from the main gates of the China Securities Regulatory Commission (CSRC) in Beijing’s financial district after more than two hours.

Charles Li Involved in Controversial China Hiring While at J.P. Morgan – WSJ Mr. Li’s emails show him struggling with requests from powerful Chinese officials to hire their children or acquaintances. He sought to maintain standards, inquiring about the qualifications of candidates before making recommendations, professing willingness to risk damaging a client relationship rather than hire an unqualified candidate, and in several cases turning candidates down, the emails show.

China May Require Hailing Apps to Register Business Vehicles – Bloomberg Business China is considering regulations that would force ride-booking apps such as Uber and Didi Kuaidi to use commercially registered cars and drivers, and would allow city governments to limit permits for those services, according to people familiar with the plan. // in the Chinese press last week, could cripple Uber et al

Pando: Oh no you Didi… A joint press conference between Lyft and dominant Chinese ridesharing company Didi Kuaidi….The two of them must have casually mentioned China’s “regulatory regime” a dozen times during the event, as if navigating it is the same as Uber and Lyft’s battles in, say, Las Vegas. In reality, everyone who has watched Google, Twitter, and Facebook’s experiences in China knows the “regulatory regime” is code for “China will just shut you down, Uber.” Particularly because, unlike those other companies, Uber is trying to map and control cities’ transportation grids, has a history of inciting its drivers into political activism… and its China expansion is being coordinated by a former special assistant to the US Secretary of Defense.

Chinese Group Buys Controlling Stake in Turkish Container Terminal-Caixin A consortium of state-owned enterprises has taken a controlling stake in a container terminal in Turkey for about US$ 940 million, one of the firms said on September 17, as one executive involved the deal linked it to China’s “belt and road” plans. A subsidiary of the shipping company China Ocean Shipping Co. (COSCO) called COSCO Pacific Ltd.; the shipping firm China Merchants Holdings (International) Co. Ltd.; and CIC Capital Corp., a subsidiary of the state investment firm China Investment Corp., said they made the purchase.

Insurance Firm’s Share Purchases Make Vanke’s Leaders Very Nervous-Caixin Foresea Life Insurance Co. Ltd. and an investment company linked to it, Shenzhen Jushenghua Co. Ltd., bought 15.04 percent of China Vanke Co. Ltd.’s shares on the Shenzhen stock market in three rounds on July 10, July 24 and August 26, the developer said in statements.

各方利益围剿 最后的千亿配资“死亡”财经腾讯网 nice Tencent Finance piece on the “death” of stock market shadow margin financing  //  这些生于灰色地带的场外配资公司,一方面面临着监管层的严厉监管;另一方面,围绕配资公司而建成的利益链条在市场与监管的双重挤压下,开始纷纷弃配资公司而去,加速了配资公司的“死亡”。

李超系周小川秘书 在打击热钱方面颇有建树-搜狐新闻 Li Chao, former secretary to Zhou Xiaochuan, appointed vice chairman of the CSRC, report says move decided in July

China Economic Watch | The PBoC Cautiously Embraces Transparency: Mea Culpa On August 31, 2015 without a press release, the People’s Bank of China (PBoC) took an important step toward increased transparency. On that date, the State Administration of Foreign Exchange (SAFE), the agency of the PBoC that manages China’s foreign exchange assets, posted on its website data on China’s international reserves as of the end of June and July in the format of the Template for International Reserves and Foreign Currency Liquidity (Reserves Template)…The data presented in China’s Reserve Template release do little to answer recent questions about the availability of China’s foreign exchange reserves to support the renminbi (RMB) or finance private capital outflows. That is not China’s fault, but the fault of IMF members for failing to agree to update the Reserves Template to provide more information on the asset composition of a member’s reserves.

China’s e-commerce market hits 1.2 trillion USD in H1 – Xinhua E-commerce in the world’s second-largest economy reached 7.63 trillion yuan (1.2 trillion U.S. dollars) in the January-June period, up 30.4 percent from a year earlier, the China E-Commerce Research Center said in its a report. Business-to-business (B2B) was up 28.8 percent year-on-year, at 5.8 trillion yuan. The online retail sales, which include business-to-consumer (B2C) and consumer-to-consumer (C2C) rose 48.7 percent to 1.61 trillion yuan.

社科院报告:预测2015年中国经济增长速度为6.9% _ 经济参考网 _ 新华社《经济参考报》官方网站 CASS report estimates that 2015 GPD growth will be 6.9% //  中国社科院21日发布《经济蓝皮书夏季号:中国经济增长报告(2014~2015)》,预测2015年中国经济增长速度为6.9%,经济增长减速来自企业与个人投资的下降。

Inquiry into Bank Head ‘Tied to Closing of Dalian Bourse’-Caixin The president of a city commercial bank whose major shareholders are nearing bankruptcy is being investigated for graft over alleged wrongdoings dating as far back as the 1990s. Wang Jingping, president of the Bank of Dalian, has come under investigation over “serious violations of law and discipline,” the Liaoning provincial branch of the Central Commission for Discipline Inspection, the Communist Party’s graft watchdog, said on September 20. The phrase is usually used by China’s ruling party to mean graft.

Adviser on Chinese Reverse Mergers Is Charged in a Securities Fraud Case – The New York Times Benjamin Wey has described himself as a “leading Wall Street American financier” who helped Chinese companies sell shares in the United States. Federal prosecutors call him something else: a “master of manipulation” who reaped tens of millions of dollars in illegal profits.

AnchorPOLITICS AND LAW *

The 18th Central Committee Leadership With Comrade Xi Jinping As General Secretary | Hoover InstitutionAlice Miller-Authoritative party documents refer to the prescribed dynamic of elite politics in the Chinese Communist Party (CCP) as its “collective leadership system.”  Despite widespread impressions of Xi Jinping as a rule-busting strongman leader, PRC media consistently depict the current Politburo and its Standing Committee as operating in the same manner they did during the Hu Jintao period: as an oligarchic collective leadership according to the system’s norms.

坚决维护党中央权威-来源:《求是》2015/18  作者:仲祖一 interesting by “zhong zuyi”, which I assume is a pseudonym for the Organization Department, in the latest Qiushi, on the importance of maintaining the Party’s authority  //  我们党是一个拥有8700多万名党员、在13亿人口大国长期执政的马克思主义政党,决不允许各级党组织各树旗帜、各搞一套,决不允许党员干部口无遮拦、为所欲为。否则,党的创造力凝聚力战斗力就会大大削弱,党就会成为一盘散沙,甚至垮台。周永康、薄熙来、郭伯雄、徐才厚、令计划、苏荣等人,破坏党的政治纪律和政治规矩问题非常严重。有的政治野心膨胀,搞破坏分裂党的政治勾当;有的把自己凌驾于组织之上,搞“独立王国”,给党造成严重危害。因此,必须维护党中央权威,决不允许背离党中央要求另搞一套,全党同志特别是各级领导干部在任何时候任何情况下都必须在思想上政治上行动上同党中央保持高度一致。

Core Readings for Chinese Communist Party Discipline Inspectors August 2015 | 高大伟 在美国华盛顿人的博客 Here are some core readings for the Chinese Communist Party Central Commission for Discipline and Inspection dated mid-August and now released on the Party central corruption-fighting website

China prosecutors investigate 140,000 suspects in anti-graft drive – Xinhua Prosecutors handled 110,000 corruption cases, involving 140,000 suspects, from the beginning of 2013 until this August, according to the Supreme People’s Procuratorate (SPP)…According to Sun, an increasing number of senior officials are among the judicial targets. In 2013, eight officials at or above the provincial or ministerial level were under judicial investigation. Last year, the number rose to 28, while the first eight months of 2015 have already seen the fall of 26.

Top Chinese discipline inspector emphasizes superior line of faith – Xinhua Top discipline inspector Wang Qishan on Wednesday said that to eliminate corruption all members of the Chinese Communist Party (CPC) must adhere to the ideals, faith and tenets of the Party, and serve the people. Wang, head of the CPC Central Commission for Discipline Inspection (CCDI), made the remarks during a meeting with Vietnamese Deputy Prime Minister Nguyen Xuan Phuc in Zhongnanhai, the headquarters of the Chinese government. To curb the spread of corruption, Wang said, the CPC is tightening discipline, cracking down on graft and enhancing supervision.

China’s anti-graft body to supervise more central organs – Xinhua China’s top anti-graft body will set up offices in more central authority departments this year to strengthen supervision, Xinhua learned on Sunday. The Central Commission for Discipline Inspection (CCDI) of Communist Party of China (CPC) already has 58 resident offices, supervising a total of 102 central authority departments and institutions, but it will achieve the full coverage of all central organs this year. At the end of last year, the central authority reformed the resident office system, and established seven more in core central departments, including CPC Central Committee General Office and United Front Work Department.

内蒙“呼格冤案”续:多名警官涉冯志明案被查新闻腾讯网 several police officials under investigation in wake of overturning of Hugjiltu wrongful execution case  //  法晚深度即时(稿件统筹 朱顺忠 记者 冯明文 实习生 张明明)法晚记者今日从内蒙古自治区警方获悉,因为涉及冯志明涉嫌职务犯罪案件,呼和浩特市公安局及赛罕分局的多名警官接受办案机关调查,其中一派出所所长被办案机关采取司法强制措施。

学习时报-做焦裕禄式的县委书记 Study Times publishes Xi Jinping’s speech on being a county head like Jiao yulu // (本文为习近平同志在中央党校县委书记研修班学员座谈会上的讲话)

江苏村干部被曝不雅视频:饭桌上脱女子衣服新闻腾讯网 not the Jiao Yulu-style local official xi wants..Jiangsu village official caught on video ripping off woman’s top at a raucous dinner // 三段视频分别视频时长1分20秒,2分20秒,44秒。视频中,一中年男子跟一名长发女子搂抱在一起并试图脱该女性衣服,视频显示该男子金表、金戒指等光亮闪闪,而被其脱衣抚摸的长发女子胸部、肚部等已裸,三段视频语音显示,视频并不是偷拍,而是故意配合拍摄。 记者多方证实,视频中出现的中年男子确为如皋市吴窑镇长西村副书记、村主任陈某明。

微博正文-这个刁民胆子真雷,敢袭警!警察的枪法更雷 Another absurd shooting by Chinese cops caught on video. They miss man w machete at close range, he walks away, cops run away。Cops shooting blanks?

司法体制改革:所有刑案讯问将全录音录像新闻腾讯网 PSB says all criminal case interrogations will be recorded in their entirety

中国官员级别的政治逻辑 – 评论 – FT中文网 要理解中国的政治经济问题,首先要理解中国政府官员的行为;要理解中国政府官员的行为,首先要理解政府官员的行政级别。为什么?第一,在官场,行政级别决定了资源和权力的配置方式。俗话说,“官大一级压死人”,说明级别是官场的明规则。第二,几乎所有官员都将级别的提拔和职位的重用当做职业奋斗目标。这对应于一句名言:“不想当将军的士兵不是好士兵”。因此,理解官员级别才能理解地方政府及其官员的行为模式。 然而,中国官场的行政级别非常复杂,有时甚至没有明确的规定。不仅普通人难以明白,即便像我们这样专门研究中国问题的专业学者,也往往需要花费很多时间才能搞明白。

AnchorFOREIGN AND DEFENSE AFFAIRS *

China ‘Concerned’ at Call for U.S. Navy Patrol of Disputed Islands – NBC News Chinese Foreign Ministry spokesman Hong Lei said China was “extremely concerned” about the comments and China opposed “any country challenging China’s sovereignty and security in the name of protecting freedom of navigation”. “We demand that the relevant country speak and act cautiously, earnestly respect China’s sovereignty and security interests, and not take any risky or provocative acts,” Hong said at a daily news briefing.

Warily Eyeing China, Philippines May Invite U.S. Back to Subic Bay – The New York Times  with China forcefully pressing its claim to a vast expanse of sea west of here, the Philippines is now debating whether to welcome the United States Navy back to the deepwater docks, airstrips and craggy shores of Subic Bay, which served as a haven for bruised battleships and weary soldiers during the Vietnam War. It is also asking Washington for hundreds of millions of dollars in new funding to strengthen its own military, one of the weakest in Asia. The change of heart is just one sign of the shifting strategic calculations in the region as President Xi Jinping of China has sought to reinforce Beijing’s claim to almost all of the South China Sea by turning reefs into islands and putting military facilities on them. Satellite photos taken last week appear to show China preparing to build a third airstrip on one of the new islands.

Promoting “Young Guards”: The Recent High Turnover in the PLA Leadership (Part I: Purges and Reshuffles) | Hoover InstitutionCheng Li-A key component in Xi Jinping’s consolidation of power has centered on the military domain.  Xi has made several important political and tactical moves, including the purge of the two highest-ranking generals under the previous administration on corruption and other charges; the arrest of over 40 senior military officers on various charges of wrongdoing; large-scale reshuffling of generals between regions, departments, and services; ongoing efforts to reform the PLA structure and operations; and, most importantly, the rapid promotion of “young guards” in the Chinese military.  All of these bold measures will have profound implications for Xi’s political standing in preparation for the next leadership turnover in 2017, for the trajectory of civilian-military relations in the country, and for the assessment of China’s military modernization.  The first installment in this series focuses on the recent purges and reshuffling of military leaders, which has significant consequences in the political dynamics of present-day China.

China’s new Long March-6 carrier rocket blasts off into space: Shanghaiist Long March-6 measures 29.3 meters in length and has a takeoff weight of 103 tons. Upon reaching orbit the rocket successfully deployed 20 satellites which separated 15 minutes after takeoff. State media were glowing in their praise for the new rocket.

UK should do more business with China, says George Osborne | Politics | The Guardian British chancellor affirms economic ties during Beijing visit while avoiding questions about human rights and democracy issues  //  making Tony Blair look like he has a spine

Should the US patrol around China’s artificial islands? | East Asia Forum Ensuring FoN operations in the Spratlys are constructive rather than destabilising depends first and foremost on making them scrupulously legal. The key would be to make certain that US ships and aircraft only pass within 12 nm of those artificial islands built on features that were naturally underwater at high tide. One example is Mischief Reef, where China has created more than five square kilometres of new land. No matter how much sand is dumped on these ‘islands’, the waters around them have no legal territorial sea status. On this point, international law is, thankfully, unambiguous. Article 60 of the UN Convention on the Law of the Sea (UNCLOS) explicitly states that artificial islands ‘have no territorial sea of their own’. Patrols within 12 nm of such submerged features would be on safe legal grounds and could not be construed as a violation of any country’s territorial waters.

The Spy Who Was Innocent – The New Yorker Going by the sheer numbers alone, that demographic composition presents a challenging signal-to-noise problem for agencies looking to detect the transfer of sensitive and proprietary information in violation of American laws. What makes the problem worse is that international collaboration is an integral part of technological development in the twenty-first century. U.S. researchers routinely partner with scientists elsewhere in the world, including China, often in order to overcome funding constraints in their respective countries. Most of these scientific exchanges have nothing to do with trade secrets. Yet, from the point of view of law enforcement, some of them do have the potential to be used as a cover for the theft of sensitive technology. The F.B.I. would be remiss to turn a blind eye to such collaborations.

Nuclear technology – China’s next great export? – BBC News For China, the prize on offer in the UK is not the investment in Hinkley Point or Sizewell B but a controlling stake at Bradwell in Essex. This could be the first Chinese-designed nuclear power plant in the West, a massive breakthrough for China in promoting global exports of its nuclear technology.

China military hints at strong opposition to large-scale troop cuts | Reuters “It’s been too sudden,” the source told Reuters, speaking on condition of anonymity. “People are very worried. A lot of good officers will lose their jobs and livelihoods. It’s going to be tough for soldiers.” China’s Defence Ministry, in a statement sent to Reuters, said the “broad mass” of officers and soldiers “resolutely endorsed the important decision of the (Communist) Party center and Central Military Commission and obey orders”. It has said the cuts, the fourth since the 1980s, would be mostly completed by the end of 2017.

PacNet #62 — China’s Preferred World Order: What Does China Want? | Center for Strategic and International Studies As the US and China prepare for President Xi Jinping’s first state visit to the United States, the world awaits the two leaders’ answers to long-standing issues in the bilateral relationship. In particular, there is great anticipation surrounding China’s explanations of its basic attitude toward global order. While Xi will offer carefully crafted statements and proposals to reassure the US of China’s benign intentions, he must square them with muscle-flexing, vigorous new regional initiatives, and assertiveness on multiple fronts. Xi must explain China’s endgame.

New Chinese Book Says the U.S.-China ‘Feast on Power’ is Winding Down | ChinaFile At a time of heightened tensions between the U.S. and China, it comes as little surprise that a new and important book on the bilateral relations, published by a think tank affiliated with the Chinese Foreign Ministry, should have the foreboding title The Twilight of a Feast on Power: The U.S. “Rebalancing to the Asia-Pacific” and China’s Countermeasures. Although the book, published in July, largely tracks a familiar narrative of the irreversible decline of the U.S. cast against the unstoppable ascent of China, it also contains a notably nuanced interpretation of Washington’s intentions.

China’s Military Modernization: Eric Heginbotham and Michael Chase in Conversation | RAND The unprecedented buildup of the People’s Liberation Army (PLA) over the past 20 years has pushed Chinese military modernization to the forefront of discussion among U.S. policymakers. We asked RAND senior political scientists Eric Heginbotham and Michael Chase to discuss their recent assessments of Chinese military modernization and its implications for U.S. interests in Asia.

AnchorHONG KONG, MACAO AND TAIWAN *

The return of the Taiwan issue to U.S.-China relations | Brookings Institution President Xi Jinping is likely to make Taiwan a major issue at his summit with President Obama. The island is having presidential and legislative elections in January. There is a good chance that the Democratic Progressive Party (DPP), which China doesn’t like, will come back to power. Xi’s message to Obama is likely to be: “You Americans don’t realize the danger that the DPP and its presidential candidate Tsai Ing-wen pose. You need to do your part to contain what will become a bad situation.”

AnchorTECH AND MEDIA *

Warner Bros, CMC in joint venture to launch China movies | Reuters “This partnership with Hollywood’s most iconic studio will bring Warner Bros’ deep experience in creative storytelling and unparalleled expertise in producing global titles to China’s film industry,” CMC founder and chairman Ruigang Li said.

What You Need to Know About iOS Malware XcodeGhost – Mac Rumors Earlier this week, Chinese developers disclosed new iOS malware called XcodeGhost on microblogging service Sina Weibo. U.S. cybersecurity firm Palo Alto Networks has since published details about the malware. MacRumors has created a FAQ so you can learn more about XcodeGhost and how to keep your iOS devices protected.

AnchorSOCIETY, ART, SPORTS, CULTURE AND HISTORY *

Guo Meimei’s relatives threaten blackmail pending release|WCT The relatives of Chinese internet celebrity, Guo Meimei, have demanded her release before Sept. 20 or they will reveal damaging information on the Red Cross Society of China (RCSC) to the New York Times, reports Duowei News, a US-based political news outlet.

The Grand Spin: How China Makes Sense of the Syrian Refugee Crisis to Itself | Chublic Opinion So when a Foreign Policy commentary rebuts a People’s Daily op-ed for its double standard of accusing U.S. meddling while turning a blind eye to Iran’s deep intervention into that same country, it misses the key point: from a Chinese perspective, shoring up the “legitimate government” of Syria is in itself a politically justifiable thing, while supporting rebels is not. Following the same logic, a Global Times editorial brings the argument to a new height of absurdity by openly musing about a hypothetical Chinese refugee crisis: “In the past century, most Chinese emigrants to the outside world were of economic nature.

Campaign in China Seeks to Reunite Abducted Children With Their Families – The New York Times These children are among the 284 shown on a new Chinese government website intended to increase their chances of being reunited with their biological parents after they were taken and sold to other families, and then rescued by the police. Each picture is accompanied by information such as where the children were found, their physical characteristics and what they were wearing when rescued.

看见- 拉萨是座城 photo series on Lhasa, much changing there with urbanization, we saw lots more building this summer than last

Language Log » Niubi (“awesome”) revisited Although “niu(B/bi)” is used so frequently, in mixed company, on packaging, and so forth that it has lost much of its original shock value, it now means not much more than “awesome”.  Nonetheless, I would recommend scrupulously avoiding it in situations where you are expected to be polite and formal.

AnchorAGRICULTURE AND RURAL ISSUES *

Dim Sums: Rural China Economics and Policy: China Cuts Corn Price Floor 11% A September 18 document from China’s Grain Administration announced a “temporary reserve” price for corn of 2000 yuan per metric ton for 2015/16. This is an 11-percent cut from the 2014/15 level and a return to the level set in 2011/12. This year’s price floor is equivalent to $8 per bushel, more than twice as high as corn prices in the United States.

Dim Sums: Rural China Economics and Policy: China to Reform Bloated Farm Subsidies Chinese authorities are intent on overhauling their bloated farm subsidy program after it spiraled out of control in its first decade. They urgently need to move on to a new generation of subsidies, but they have encountered unexpected problems in trial programs. Economic Observer reports that agricultural subsidy programs are in the midst of a major reform. Business Reference News reports that the 13th Five-Year Plan (2016-2020) will alter grain subsidies and reform the fiscal system for disbursing the funds.

AnchorEDUCATION *

人大教授宣布断绝与一新生师生关系 斥其狂徒_网易新闻中心 师生之交首重道义。是我多年来与弟子相处的重要原则。今天中午,我在微信上看到了今年新招收的硕士生郝相赫发出的微信,居然对阎步克先生 韩树峰先生无端嘲讽。 我极为震怒!当即发出公开评论,怒斥狂徒。我的评论,无法显示。随后,我发现他把狂言撤销了。但是,问题已经暴露无遗。学界自有学界的规矩与尊严。

AnchorBOOKS AND LITERATURE *

Spy Games: Adam Brookes: Sequel to Night Heron, a good read

AnchorBEIJING *

北京市国土局前局长安家盛证实自首 或因英皇中心产权纠纷遭举报_手机财新网|公司 former chief of the Beijing land bureau turns himself in after allegations of corruption around deal for Emperor Group development across from Friendship store in Yonganli

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