THE ESSENTIAL EIGHT *
1. China Stocks, Currency and Corporate Bonds Fall – WSJ The selloff started in the bond market, as traders rushed to sell and raise cash after a regulator banned investors from using low-grade corporate debt as collateral to borrow cash. The turmoil then spread to the yuan, which recorded its biggest two-day tumble ever. Later, the benchmark Shanghai index slumped 5.4% to record its biggest fall since 2009.
Related: 牛市“撞腰”不足惧中证研究中证网 le
Related: 中证登急澄清 股市受新规影响不大金融频道财新网 中证登相关负责人指出，
Related: Easy credit feeds risky margin trades in Chinese stocks | Reuters Such behaviour was widely blamed for a similar stock market rally in 2009, when many companies and individuals took advantage of cheap stimulus credit to speculate on shares and housing, which caused share indexes to double before suffering a bone-rattling crash. Even after the current rally, Chinese stock indexes have yet to recover from that crash; the Shanghai Composite Index is still down 12 percent from the peak hit that year, and 48 percent from their pre-financial crisis high in 2007.
2. Hong Kong Protesters Prepare for Police Clearance – China Digital Times (CDT) Following the partial clearance by court bailiffs and police of the major protest sites in Hong Kong, some protesters have remained in recent weeks. Student protest leader Joshua Wong ended a planned hunger strike after five days, but has continued to join the protests and to call for universal suffrage in Hong Kong…Now, court bailiffs and police say they will clear the remaining protest camps this Thursday and have warned remaining protesters to leave before then.
3. In China, Purge Precedes Economic Rebirth – WSJ Andy Browne’s column, spot on if you ask me // Still, for all its limitations, Mr. Wang’s war on corruption is a necessary prelude to China’s economic overhaul…In the latest cycle, there are plenty of indications that President Xi and Mr. Wang are moving swiftly. Mr. Zhou has been absent from view for more than a year, but from the time that authorities announced an investigation into him to his expulsion from the party was just four months—much quicker than in previous corruption cases involving senior officials…Ultimately, his demise bodes well for the tempo of reform. So far, progress on Mr. Xi’s extensive agenda has been patchy, held up in part by resistance from vested interests, personified by Mr. Zhou and his cronies. In addition, the process of demolition itself has paralyzed decision-making within a frightened bureaucracy.
Related: Arrest of ‘tiger’ Zhou Yongkang sheds light on China graft purge – FT $$ A wealthy Beijing-based property developer, who insisted on anonymity, told the Financial Times the campaign had actually hurt his business because it drove up the cost of bribing crooked officials. “Several of the officials I deal with have told me the risks are higher now and so they need to charge a premium,” this person said. “In some cases that has doubled the cost of my transactions and I have had to go to much greater lengths to conceal these payments [of bribes].” // The CCDI have access to any surveillance on the journalists? Might come in handy to help track down this “wealthy Beijing-based property developer”.
4. 中纪委网站开辟专栏 对追逃追赃线索可举报 CCDI has launched a section on its website for “Anti-Corruption Fugitive Repatriation And Asset Recovery” and is offering rewards for information leading to fugitive officials overseas. The CCDI should have a page with pictures of the officials, like the FBI ten most wanted, and should be distributing the information all over the Los Angeles and San Francisco areas, as well as Canada, Australia, and London. I assume the government has reached out to members of the Chinese diaspora to help (local Chinese private detectives could be especially useful). If you know of any fugitive corrupt officials you can “blow the whistle” here, though only the intro page has any English and according to the Chrome browser there is a configuration issue with the site so you may get a “your connection is not private” message…
Related: China launches website for complaints about Party officials – Xinhua The Weibo exposes of 2011-2012 may be history, but the party is very intent on harnessing the Internet to tackle corruption, just on its own terms and within its set parameters…shouldn’t be any surprises there // Also Tuesday, the CPC Central Commission for Discipline Inspection (CCDI) opened a new “whistle blowing channel” on its website to support its campaign to hunt down fugitive corrupt officials abroad. People, at home or abroad, with relevant information are encouraged to pass on the intelligence on the website.
5. Discipline watchdog reports gambling cases involving CPC officials – Xinhua more pain for gambling stocks and Macau ahead, even those these cases do not appear to involve Macau? // The officials were found gambling in majiang and card games. They have all received punishment, with some removed from posts, the circular from the CPC Central Commission for Discipline Inspection said. The six cases were exposed in Chongqing and Tianjin municipality, Jiangxi, Hubei and Jiangsu provinces, and Ningxia Hui Autonomous Region. CPC discipline forbids officials from gambling and those against discipline should be punished severely, the circular said. All Party members should clear up undesirable work styles and cultivate healthy habits, and supervision organs should seriously deal with CPC cadres involved in gambling.
6. Beijing’s and Washington’s Dueling South China Sea Papers | Center for Strategic and International Studies Beijing is fast approaching a December 15 deadline to submit its defense in the arbitration case against its South China Sea claims brought by the Philippines. That case, brought under the UN Convention on the Law of the Sea’s (UNCLOS) compulsory dispute mechanism, is summarized here…The timing of these two releases, both in relation to each other and to the next stage of the arbitration case, suggest that policymakers in Beijing and Washington recognize the value of occupying the legal high ground in the South China Sea and are eager to influence the arbitral tribunal even if they are not directly engaging in the case.
Related: China condemns U.S. report on South China Sea claims | Reuters The State Department report (PDF), issued on Friday, said that China’s claims were both unclear and inconsistent. Chinese Foreign Ministry spokesman Hong Lei said that China’s rights were based on its historic claims.
7. Taiwan says to buy two U.S. frigates despite China anger | Reuters The U.S. Senate unanimously approved a bill last week, authorizing the sale of four Perry-class guided missile frigates to Taiwan. China expressed anger in April when a similar bill passed in the U.S. House of Representatives. Taiwan Defense Ministry spokesman David Lo said they had budgeted about NT$5.5 billion ($176 million) in total for two of the frigates, not including any upgrade needs, and will review their needs and then make a decision on the other two vessels.
8. CHINA BANS THE PUN || The Daily Show with Jon Stewart (12/03/2014) – YouTube Fearing that wordplay will lead to cultural and linguistic chaos, China bans the use of puns. // not the kind of soft power China wants
BUSINESS, ECONOMY AND TRADE *
People’s Daily Calls for Slower Growth, More Reform in China – WSJ The People’s Daily, the Communist Party’s flagship newspaper, published a commentary from a top government think tank saying that some stimulus measures may be needed but shouldn’t be used in place of reforms. “The important objectives are to adjust the economic structure and boost its quality,” said Liu Shijin, vice president of the State Council’s Development Research Center, in the commentary. “As the economy begins to lose momentum, an appropriate amount of stimulus may be required. … But it should be made clear that stimulus should only be used to regain economic balance and should not be seen as a way to solve medium and long-term structural problems.”
New York Skyscraper Is Latest Property Deal For Chinese – WSJ Instead of leasing the building, the developers were attracted to the Bank of China’s offering price. While the nearly $1,300 a square foot being paid is shy of the more than $1,700 a square foot fetched by a handful of Midtown towers recently, that doesn’t include the cost of building out the office space for tenants, which could add $150 to $200 a square foot, people familiar with the deal said.
Guest post: what if conventional wisdom on China is wrong? | beyondbrics After two decades of 10% GDP growth, followed by average growth of over 8 per cent, conventional wisdom is that China is on the verge of collapse. But that wisdom is based largely on many misunderstandings. // Andy Rothman is bullish
Yuan Drops to Lowest Since July on Trade Data, Swap-Rate Surge – Bloomberg The currency dropped 0.21 percent to close at 6.1855 per dollar in Shanghai, the weakest since July 29, according to China Foreign Exchange Trade System prices. It declined as much as 0.55 percent earlier today, the most on a closing basis since December 2008. The spot rate has fallen 0.57 percent in two days, the most in almost nine months.
Dalian Wanda Seen Pricing IPO Toward Low End – Caixin One industry analyst with knowledge of the floating said that Wang Jianlin, Dalian Wanda’s billionaire chairman expected demand for the shares to be higher, but had to agree to lower the end of the price range due to an unfavorable market outlook and cash flow pressure. Dalian Wanda Group, also the biggest owner of luxury hotels in China, has 178 real estate projects in 112 Chinese cities including 159 Wanda multiplexes, 168 shopping centers and 102 hotels, which are valued at 504 billion yuan in total, according to the list prospectus. While it is still on the lookout for expansion, Dalian Wanda Group is facing many challenges as revenues in its three core businesses: shopping malls, hotels and office buildings are all in a downward spiral.
World’s longest train journey reaches its final destination in Madrid – Xinhua The train which arrived in Madrid at 11a.m. local time (1000GMT), departed from Yiwu on November 18th with 40 wagons, carrying 1,400 tons of cargo, consisting of stationary, craft products and products for the Christmas market and it will return to China filled with luxury Spanish produce such as cured ham, olive oil and wine. The results of this first historic journey which will then be evaluated with the aim of opening a regular two-way rail link between China and Spain, which could commence operations in early 2015.
China to regulate preferential tax policies – Xinhua China will regulate preferential tax policies, forbidding local taxation authorities from making such policies, according to a statement released Tuesday by the central government’s website. The State Council, China’s cabinet, recently issued a notice on trimming local preferential tax measures that may impair market mechanisms and macro controls, in some cases leading to international trade frictions.
POLITICS AND LAW *
China Voice: Party discipline stricter than law – Xinhua In China, Party rules are the law within the CPC. More than 86 million Party members must abide by both the national law and Party rules. The ruling CPC orders all members to be strict with themselves as they are “vanguard of the Chinese nation.” It also deals with anyone who breaks Party rules. The CPC rules are much more strict than the national law. Party membership means one should always demand high standards and discipline oneself all the time. // and when people join the Party they agree to subject themselves to Party discipline, including the “shuanggui” system, right?
Yearender/Xinhua Insight: Anti-graft blitz upgrades to protracted war – Xinhua “Nailing a high-ranking official like Zhou sends a strong message to all senior officials. It supports the Party’s zero-tolerance policy against corruption,” said Huang Weiting, a researcher with Seeking Truth, the official magazine of the CPC Central Committee, who has closely followed the anti-corruption issue. However, China’s anti-graft campaign has moved beyond setting warning examples to deter others. The scale of the investigations, as well as new initiatives and legal reform, indicate that the country intends to fight a protracted war.
Supreme Procuratorate protests against insider trading rule by court – Xinhua China’s Supreme People’s Procuratorate (SPP) lodged a protest against the ruling of the country’s largest insider trading case on Tuesday. Ma Le, a former Bosera fund manager between March 9, 2011 and May 30, 2013, was sentenced to three years with a five-year-reprieve for insider trading, Shenzhen Intermediate People’s Court March ruled earlier this year. Ma’s illegal earnings of 18.83 million yuan make his case the largest monetary insider trading case to date. All money was confiscated and he was fined an additional 18.84 million yuan.
新闻道德委员会试点两年，工作持续推进 -无道德 不新闻–时政–人民网
China releases one of its longest-serving political prisoners, relative says | Reuters Hada was tried behind closed doors in 1996 and jailed for 15 years for separatism, spying and supporting the Southern Mongolian Democratic Alliance, which sought greater rights for China’s ethnic Mongols. He says the charges were trumped up. After being released in December 2010, he had to serve a separate sentence of four years of “deprivation of political rights”, mostly in an illegal detention center in the northern region of Inner Mongolia, his family says
辩护律师：刘铁男后悔教子不严 将接受法庭判决新闻腾讯网 sentencing for corrupt former NDRC official Liu Tienan today
FOREIGN AND DEFENSE AFFAIRS *
Chinese National Accused of Transporting USAF Program Information | Defense News A Chinese national has been arrested while carrying sensitive proprietary information on titanium used in a US Air Force program, most likely the F-35 Joint Strike Fighter, according to the US attorney for the District of Connecticut. Yu Long, a 36-year-old former resident of New Haven, was arrested on Nov. 7…A source with knowledge of the situation said Long was an employee at United Technologies Research Center, part of United Technologies — the parent company of Pratt & Whitney.
China’s stealth fighter could take down foreign rival: industry exec | Reuters Lin Zuoming, president of Aviation Industry Corp of China (Avic), which developed the J-31 stealth fighter, made the remarks in an interview on state broadcaster China Central Television (CCTV). “When it takes to the sky, it can definitely take it down,” he said, in a reference to the U.S.-made F-35. “That’s a certainty.” Lin also emphasized the company’s desire to compete with the United States in new markets, particularly countries the U.S. will not sell military equipment to as well as countries that cannot afford the pricier F-35.
China investigates another senior military official for graft: report | Reuters Major General Dai Weimin, 52, was “taken away” in the middle of November by military prosecutors, according to a report by respected news magazine Caixin. Dai was a deputy dean at the People’s Liberation Army Nanjing Political College.
Exclusive: Canada plans forensic audits of millionaire migrants’ finances | South China Morning Post The unprecedented scrutiny could act as a deterrent to some wealthy mainland Chinese, who made up a large majority of applicants to the now-defunct Immigrant Investor Programme, which is soon to be replaced by the Immigrant Investor Venture Capital (IIVC) scheme. Details of the IIVC programme have yet to be officially unveiled by Ottawa, but documents on a government procurement website reveal that Citizenship and Immigration Canada is seeking private-sector expertise to ensure that all applicants meet the scheme’s wealth requirements, and that their fortunes have been legally obtained.
Chinese Military Newspaper’s Livid Response to Report on Soldier Gear – – WSJ In a blow-by-blow rebuttal, the PLA Daily directed its ire at Southern Weekly, a Guangzhou-based newspaper, for its “ignorant” and “unprofessional” takedown that smacked of “criticism for criticism’s sake.” “Indeed, our army’s individual-soldier equipment are plagued by many problems, and this is something that our troops and military geeks alike have rabidly criticized,” the military newspaper said in an essay published by its official account on the WeChat messaging service. But the PLA Daily said Southern Weekly’s report showed “disregard” for facts. “One should know that even criticism needs to be done professionally, and not something any moron can pull off by smacking one’s water-filled brain,” the essay ran. // the original Chinese piece a few days ago looked pretty stupid
China Voice: U.S. should clean up its own human rights issues – Xinhua The Senate CIA report an early Christmas gift to China?// Besides its deeply-rooted racism, the surveillance scandal — which targeted its own citizens as well as leaders of other countries — and attacks on foreign soil in its anti-terror campaigns — resulting in heavy civilian casualties — have also drawn international concern. A congressional report detailing measures of torture allegedly used by the Central Intelligence Agency (CIA) on al-Qaida detainees during interrogation, expected to be released soon, has also added fuel to the hot disputes. America is neither a suitable role model nor a qualified judge on human rights issues in other countries, as it pertains to be. Yet, despite this, people rarely hear the U.S. talking about its own problems, preferring to be vocal on the issues it sees in other countries, including China.
Chinese army pilots master sergeant system – Xinhua An infantry brigade of Chinese ground forces named 36 soldiers as master sergeants Tuesday, marking the first group to hold the rank in the Chinese military. The infantry brigade in northeast China’s Shenyang Military Area Command is carrying out a pilot master sergeant system, according to a statement from the brigade.
Korea, China launch joint crackdown on illegal fishing The Ministry of Oceans and Fisheries said that the two nations will each dispatch one vessel to patrol the joint fishing zone between Korea and China in the West Sea for one week through Dec. 15. This will be the first such operation carried out by the two countries.
HONG KONG, MACAO AND TAIWAN *
INTERVIEW: Academic reflects on the implications of the elections – Taipei Times The results of Nov. 29 elections are a reflection of the change in public thinking about national politics, a silent revolution where the voters expressed their sentiments on being anti-political families and corporations that are pro-China, said Academia Sinica Institute of Sociology chairman Michael Hsiao in an interview with ‘Liberty Times’
TECH AND MEDIA *
Qualcomm’s royalty fees facing change following China verdict｜WantChinaTimes In addition to a hefty fine for market monopoly, US-based chip manufacturer Qualcomm may be forced by Chinese regulators to change its royalty collection method for its patented technologies in China, reports the Chinese-language Southern Metropolis Daily. Qualcomm has refused to comment on the report, saying it is still waiting for the ruling on the monopoly charge, to be delivered by the National Development and Reform Commission by the end of December.
Top Bloomberg News Editor Matthew Winkler Is Replaced by Head of The Economist – NYTimes.com Maybe this will help Bloomberg in China. Replacing Winkler, and an “apology/new initiative tour” by Bloomberg himself seem to me to be at least two of the main steps towards Bloomberg working its way out of Beijing’s dog house, though even if it does it will always be on a short chain here… //John Micklethwait, who has been editor in chief of The Economist since 2006 and has worked for the publication for the last 27 years, will become the new editor in chief of Bloomberg.
HuffPost launches in India, China May Be Next | Bangkok Post Its next big project, though, is a Chinese version of The Huffington Post. “We’d like to put China on the roadmap, we hope we can do business there,” said The Huffington Post media group chief executive Jimmy Maymann. “China is really pushing the boundaries in (online) innovation. We know the (media) restrictions” but “we’re really bullish on China,” he said //wonder who they have hired to help build this
YY acquires famous English teacher and tech team to expand online education offerings- TechInAsia Unless you’ve studied English in China, you’ve probably never heard of Zheng Renqiang. But in a country where English as a second language is compulsory, Zheng is renowned as the best IELTS teacher in the biz, and an expert in online education. Now, Zheng will be plying his trade for Chinese tech company YY’s online education subsidiary, which has acquired Zheng and his Beijing-based education tech company. An official sum has not been disclosed, but Techweb reports that word on the street is the acquisition cost YY RMB 300 million (US$38 million).
Chinese Taxi-Hailing App Didi Raises Over $700M Led by Temasek – Digits – WSJ The round was led by Singaporean state investment firm Temasek Holdings, DST Global, the Russian investment firm led by Yuri Milner, and Tencent, the taxi-hailing app said in a press release. The company called it the single biggest investment round in China’s mobile Internet sector.
Momo vs. Momo: China’s Tinder Fights for Its Name – WSJ As China’s popular dating app Momo prepares for an initial public offering in the U.S. on Thursday, a second Chinese relationship service – also called Momo – is saying it was Momo first. Hangzhou Momo Wedding Service Co. in November sued the better-known Beijing Momo Technology Co. — the one set for a Thursday U.S. IPO — for 11 million yuan ($1.79 million), alleging they have exclusive use of the brand for what in China is called the friend-making businesses. The trial will likely take place around the end of December at an intellectual property rights court in Beijing, said Li Zhen, the major shareholder and legal representative of Hangzhou Momo.
苹果发布中国区应用榜 国内开发者占比超过40%-搜狐IT Apple releases China iOS app ratings, more than 40% from local developers
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH *
A quarter of all ivory sold in Beijing and Shanghai is obtained illegally – Telegraph “China Faces a Conservation Challenge” by Kenya-based Save The Elephants and the British-based Aspinall Foundation said 26.5 per cent of the thousands of elephant ivory items on sale in Beijing and Shanghai were illegal.
Xiaomi Unveils Air Purifier Amid Worries About China’s Pollution – Bloomberg i have pre-ordered one // The purifier can be controlled by a smartphone and alerts users when its filter needs to be replaced, Chief Executive Officer Lei Jun said today during a press conference at the company’s Beijing headquarters. It will sell for 899 yuan ($145) and deliver as much as 406 cubic meters (14,000 cubic feet) of clean air an hour, he said.
Internet Companies Crowd Air Purifier Market as Airpocalypse Hits China – TechNode The booming market has attracted many companies. Another AVC report noted that the number of domestic air filter manufacturers has soared 450%, from 21 in Q1 2014 to 95 in Q3 in the same year. Driven by the smart home trend, internet companies account for a substantial number of new entrants poised to compete with current incumbents like home appliance brands Philippe and Sharp, LightAir, and Yadu.
China aquaculture farmers demand compensation over oil spill – Xinhua The sea cucumber farmers from Leting County of Hebei Province demanded a compensation of 148 million yuan (23.9 million U.S. dollars) to cover their economic losses and litigation costs, according to the Tianjin Maritime Court. They claimed that the oil spill, which was not made public at first, led to the death of a large amount of their sea cucumbers, with losses amounting to 140 million yuan.
Three Key Questions About China’s Climate Commitments | Barbara A. Finamore China’s announcement that it will cap its carbon pollution by 2030 – earlier if possible – and increase the share of non-fossil fuel in its primary energy mix to 20% by the same year, represents a major departure from China’s previous position in the international climate negotiations (now underway again in Lima, Peru), and a vital step forward for the world’s largest CO2 emitter. A number of questions have arisen about whether China is serious about meeting these targets, and how it will achieve them in the face of daunting challenges. Here are three reasons why we believe China is completely serious about tackling climate change and has the necessary tools to succeed in doing so.
跨越半个多世纪的调水梦–时政–人民网 long spread in today’s People’s Daily on the South-North Water diversion project, on eve of completion of phase I of the project, as well as this shorter piece on page 1 五十载论证十一年建设，中线一期工程通水在即-
LNG boom over as China looks to sell out of long-term deals | Reuters China’s state-controlled energy giant Sinopec wants to sell some long-term liquefied natural gas (LNG) import deals as a slowing economy makes them unprofitable, sources say, signalling the end of a five-year boom fuelled by rising Chinese demand. Asia’s thirst for energy has helped drive a “dash for gas” in producer countries from Australia to Canada, with LNG emerging as the fastest growing fuel source since the beginning of the century on the back of soaring Chinese imports.
Over-use of fertilisers may threaten China’s rich grain-growing northern region, says expert | South China Morning Post “It took 300 million years for the black soil to become one metre thick, but now it’s degrading at a rate of one centimetre each year,” Chen Wenfu, an academic at the Chinese Academy of Engineering, told the newspaper. “If we let this continue, sustainable development of agriculture will be seriously threatened,” said Chen, who is also a professor at Shenyang Agricultural University.
FOOD AND TRAVEL *
High-speed Rail Now Connects Two of China’s Biggest Commercial Centers | TheNanfang New railway lines opening tomorrow will provide shorter travel times between Shanghai, Guangzhou, and other major Chinese cities. The Shanghai railway authority announced it will provide high-speed rail service to 32 cities in Guangdong, Guangxi, Hunan and Jiangxi. As well, direct service will be provided to fast trains going to Harbin, Shenzhen and Lhasa.
Miserly Harvard Professor Harasses Chinese Restaurant Over $4 When Ben Edelman, an associate professor at Harvard Business School, realized the Sichuan Garden in Brookline had inadvertently overcharged him by $4, he went with option number three. Edelman’s emails, and the responses from Sichuan Garden’s Ran Duan, are below…Duan told Boston.com he responds to every complaint about his restaurant, which his parents founded in the early 1990s. “I have worked so hard to make my family proud and to elevate our business,” he said. “[Edelman’s emails] just broke my heart.”
Who Is Ray Wigdal? Contrasting Views Emerge of Missing American Foster Father | the Beijinger Contrasting views of Ray Wigdal, the foster father of an eight-year-old girl who died Sunday night and ten other children who are now in protective custody, have emerged, as his whereabouts remain unknown. Early Chinese media reports on the situation indicated that Wigdal, a US citizen, may have been in China for as long as 30 years and speaks fluent Mandarin. One of the volunteers who assisted with caring for the 11 children whom he had adopted described him as being “nearly 60.”
JOBS AND EVENTS *
Cyber Policy in China | Brookings Institution On December 9th, the John L. Thornton China Center at the Brookings Institution will host a book event marking the publication of Cyber Policy in China by Greg Austin….December 9, 2014 2:00 PM – 3:30 PM EST Brookings Institution Falk Auditorium 1775 Massachusetts Avenue, N.W.
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