Today’s must read is How a High-Speed Rail Disaster Exposed China’s Corruption by The New Yorker’s Even Osnos. The article takes a long look at high speed rail corruption and specifically the spectacular downfall of former Minsiter of Railways Liu Zhijun, aka “Boss Rail”.
In August Caixin Magazine published a cover story on Liu. The first paragraph of the Caixin article made it sound like the police sent by Beijing to arrest him may have interrupted Liu in the middle of a threesome at a 5-star Nanjing hotel (screenshot of lede). Links from the Caixin site to the related articles no longer work for me. In late August Caixin issued a rare apology (《新世纪》周刊更正致歉 – 新华传媒 – 新华网) because the article contained unspecified inaccuracies and had a “negative social impact”. Caixin’s English translation-How Dangerous Liaisons Led to Massive Corruption–is still online but it is an abridged translation that omits the threesome lede and other details.
Official corruption is a huge and acknowledged problem. Anti-corruption chief He Guoqiang just announced that the Communist Party of China’s anti-corruption agencies have punished more than 660,000 officials found guilty of disciplinary violations in the past five years (China Daily).
A key question for many is whether the Party can reform itself and regain control corruption, or whether corruption has become so endemic that it is beyond repair. As I wrote last week in my China Insider column for Dealbook, betting against the Party’s ability to adapt and survive has been a poor wager so far, though the transparency of the Internet era presents unprecedented challenges. Bloggers just exposed another corrupt official (BeyondBrics), this one a mid-level functionary in Guangzhou with 21 properties.
This week’s Dealbook column looks at American Politics and Chinese Data, and specifically the Renminbi rhetoric in the US presidential election. I am kicking myself for editing out a bit about Japan nearly equalling China (Bloomberg) as a holder of US Treasuries:
Chinese holdings of Treasuries fell 0.2 percent this year through July to $1.15 trillion, the latest government data show (US Treasury). Japan, a stronger ally of the U.S., raised its stake by 5.6 percent to $1.12 trillion, on pace to top the list of foreign creditors by November.
Governor Romney may have to alter his line about evaluating new spending (Mitt Romney official site) by asking “a simple question about every federal program: is it so important, so critical, that it is worth borrowing money from China to pay for it?”
There is positive movement in the Sino-Japan dispute over the Diaoyu/Senkaku islands. China and Japan say they held talks over the islands dispute (New York Times) and Xinhua today writes that negotiation is the best resolution for China-Japan islands row and that “people still remember the guideline put up by late Chinese leader Deng Xiaoping and described as “laying aside differences and engaging in joint exploitation.”
Even if there is a return to some sort of peaceful status quo, Japanese people and businesses may be much warier of living and investing in China. Just yesterday several Japanese were beaten by Chinese in a Shanghai restaurant (数名日本人在上海餐馆内被殴打 至少3人受伤_网易新闻中心).
The Shanghai restaurant thugs share today’s jerks du jour designation with the ten Ferrari drivers racing in the rain on a Shaanxi highway. Two crashed, and disintegrated.
BUSINESS AND ECONOMY
FRBSF Economic Letter: Is China Due for a Slowdown? (2012-31, 10/15/2012) – Many analysts have predicted that a Chinese economic slowdown is inevitable because the country is approaching the per capita income at which growth in other countries began to decelerate. However, China may escape such a slowdown because of its uneven development. An analysis based on episodes of rapid expansion in four other Asian countries suggests that growth in China’s more developed provinces may slow to 5.5% by the close of the decade. But growth in the country’s less-developed provinces is expected to run at a robust 7.5% pace.
小额农贷：婺源农户发家致富的原动力-中国金融新闻网 – top story in Chinese Financial News praises rural micro loans in wuyuan, Jiangxi ..interesting signal for rural reform, and especially predictions by some that the 18th Party report will mention rural modernization as on of the 新四化？
上周全国54城市新房成交环比增幅210%-财经网 – huge jump in new home sales in 54 cities last week
All is not well at China’s bellwether Canton trade fair – The Globe and Mail – The bad news is that sentiment on the first day of this three-week event was downcast. While the number of companies who paid for a booth to exhibit their wares was up slightly to a record 24,840, veterans of the Canton Fair said the number of potential buyers browsing the complex on the south bank of the Pearl River was lower than both the spring session and last fall’s
6房企5天斥资240亿抢地_产经_产业新闻_新浪财经_新浪网 – 6 real estate firms spend 24 Billion RMB buying land in 5 days….
How US manufacturers, not Chinese dumping, killed Solyndra – Quartz – The lessons of Solyndra are twofold: Businesses sometimes bet on the wrong solution to an existing problem–in this case, the high price of polysilicon…It’s US manufacturing of polysilicon, and not dumping by Chinese firms, that was the most direct reason that Solyndra’s model was unworkable.
Shibor Better Protected against Fixing, PBOC Official Says – – The pricing mechanism of Shibor is an improvement on the London Interbank Offered Rate (Libor), Li said, because it requires the price quotes from the 16 market makers to be evaluated by a third party and holds the institutions more accountable for their quotes in real transactions.
QFII Increasingly Attractive, CSRC Official Says – – CSRC has increased the national quota for QFII investments to US$ 80 billion since April. By the end of 2011, the ratio of foreign investors’ holding in the A-share market accounted for only 1.97 percent of all stocks’ value, in comparison with the 36 percent in South Korea. QFII investments were barely above 1 percent.
Consolidating EDU’s VIE | China Accounting Blog | Paul Gillis– What troubles me about EDU’s accounting is the combination of claiming an interest in the profits of the VIE despite the lack of ownership but also arguing that EDU will never get those profits. When you start layering on aggressive accounting policies, even if individually each is GAAP, the final picture does not fairly present the situation.If, as EDU appears to say, the SEC has signed off on this, we can stop worrying about accounting challenges to the VIE structure.
POLITICS AND LAW
人民日报-People’s Daily Page 1 – front page item about Jiang Zemin sending condolences to the Cambodia Queen Mother just under item about Hu Jintao sending his condolences. Is this the most prominent official media of Jiang we have seen in years? and just the weeks before the 18th.
坚持和发展中国特色社会主义_2012/19_求是理论网 – The Qiushi article calling for further implementation of the country’s reform and opening-up policy ［UPDATE, this is from the last issue, also based on Hu Jintao’s important 7.23 speech. This is article summarized below–奋力把改革开放推向前进.]
CPC magazine praises reform, opening-up policy – Xinhua | English.news.cn – Tuesday’s edition of Qiushi (Seeking Truth), the flagship magazine of the Communist Party of China (CPC), will include an article calling for further implementation of the country’s reform and opening-up policy. Titled “Sparing no effort to push forward reform and opening up,” the article quotes CPC Central Committee General Secretary Hu Jintao’s speech July 23, saying Hu underscored the significance of the policy on building socialism with Chinese characteristics.
Official confesses to poisoning billionaire at cat food restaurant | Nanfang Insider– Long Liyuan, a billionaire businessman from Gaozhou in Guangdong Province, was also was a member of the People’s Congress of Guangdong. Huang was vice director of the local agriculture department. Huang received 2.54 million RMB from Long from 2009 to 2011 while claiming to help him with contract law and legal procedures.In fact, Huang simply gambled the money, losing all of it, and was under pressure from Long to pay it back
2 mln expected to compete in civil servant recruitment: experts – Xinhua | English.news.cn– where the money, the perks and the security are// more vacancies does not mean applicants will have better chances of securing a position, as the number of applicants may top 2 million, up from 1.3 million last year, said Li Yongxin, chief research fellow of Zhonggong Education, a training company focused on civil service applicants.Therefore, only one in every 90 applicants will get the jobs in the end, said Li.
Will Beijing’s New Leaders Solve the Tibet Crisis? – Print View – The Daily Beast – Meanwhile, some analysts hope that Beijing’s Tibet policy could soften after the once-in-a-decade leadership transition that begins after next month’s 18th Communist Party Congress, when a new generation of Chinese leaders will assume top-level party posts.. “I’m cautiously optimistic,” prominent Tibetan blogger and activist Woeser told Newsweek. “
FOREIGN AND DEFENSE AFFAIRS
Why does ‘China Collapse’ theory persist? – Globaltimes.cn– The Chinese public loathes corruption, but this social ill will not be rooted out just by changing the political system. Many developing democracies are bothered by equally serious problems, and this has been realized by more people. The Chinese public is keen to find solutions to curb corruption, but a revolution is not one of them.In recent decades, predictions of a China collapse have been accompanied by China’s growth, which reflects the West’s lack of understanding of the country and the emotional resistance against China’s rise.
Iran seeking China funding to complete metro project | Reuters – Tehran initially planned to build 430 kilometers of metro lines with 256 stations at a cost of $18 billion. But as sanctions began to bite, only 261 kilometers and 175 stations were approved, estimated to cost around $10 billion, he told the conference earlier.
Chinese investment in US grows despite rhetoric | South China Morning Post– By dollar value, the US was the third destination for Hong Kong and Chinese M&A, with Canada on top and Britain second, Mergermarket said.The value of mainland and Hong Kong deals in the US next year could be between US$5 billion and US$8 billion, said Mao Tong, a lawyer at US law firm Squire Sanders.
Chinese A-bomb test base opening to tourists |Society |chinadaily.com.cn – About 6 million yuan ($944,882) will be invested to turn the Malan Base in the remote Xinjiang Uygur autonomous region into a “red tourism” site, a local official said on Monday
Chinese fighters practice landing on “Liaoning” aircraft carrier – China News – SINA English – Carrier-based fighters, including two J-15s, were photographed practicing “touch-and-go” landing on China’s first aircraft carrier “Liaoning”.
Zhongkun set to rent Icelandic land for tourism |Economy |chinadaily.com.cn – Beijing-based Zhongkun Investment Group Co Ltd will sign an agreement this month on leasing 300 square kilometers of land in Iceland for tourism investment, the group’s Chairman Huang Nubo said.
China’s Beidou system ready for Asia-Pacific service – Xinhua | English.news.cn – A report in the Beijing News on Monday quoted Guo Shuren, a core member of the China Satellite Navigation System’s development team, as saying that the system is expected to start providing free services to civilian users in the Asia-Pacific region in the first half of 2013.
Mongolia’s Strategic Calculus – The Diplomat–Prof Jeffrey Reeves – Scholarship that points to Mongolia as a potential U.S. ally but does not examine the utility of such alliance from Ulaanbaatar’s perspective is overly simplistic at best. While the U.S. should pursue ties with Mongolia, it must do so with a clear understanding of Mongolia’s priorities and the region’s greater dynamics. While these realities do not preclude the United States and Mongolia from having good relations, they do challenge the prevailing view that the U.S. just need ask and Mongolia will come running.
New Shanghai college a lesson in joint action|Society|chinadaily.com.cn – Shanghai New York University, the first institution of higher education jointly established by China and the United States, was officially founded on Monday.
TECH AND MEDIA
Form F-1 for YY Inc–SEC.gov – Lei Jun owns 23.8% before the IPO// YY is a revolutionary rich communication social platform that engages users in real-time online group activities through voice, text and video. YY Client, our core product launched in China in July 2008, has attracted 400.5 million registered user accounts as of September 30, 2012. We achieved approximately 10.0 million peak concurrent users and approximately 70.5 million monthly active users on YY in August 2012…For the six months ended June 30, 2012, our total net revenues grew to RMB324.5 million (US$51.1 million), representing a 173.2% increase from RMB118.8 million for the six months ended June 30, 2011.. in the six months ended June 30, 2012, we had a net income of RMB20.8 million (US$3.3 million)
Chinese social-media firm YY unveils IPO plans – MarketWatch – really, shareholders are selling into the IPO? good luck with that in this market// China-based social-media platform YY Inc. and some selling shareholders plan to offer up to $100 million American depositary shares in an initial public offering to raise funds for purposes such as purchasing servers and leasing more bandwidth to support its growing user base.
China’s Yihaodian Plans 1,000 Virtual Supermarkets Where You’ll Shop Via QR Codes – These stores, to be called “Unlimited Yihaodian” will actually just be full of product images and QR codes – yes, no actual physical products – so shoppers can just scan the QRs to add an item to their virtual basket. The items that are bought will then be delivered – just like with Yihaodian’s regular website.
China in Hollywood, Hailed and Investigated – NYTimes.com – LOS ANGELES — The powerful gatekeeper of China’s rapidly growing film world, the China Film Group chairman Han Sanping, will be here on Oct. 30 to receive an award as the China Entertainment Visionary of the Year
China’s Tencent Sees its QQ Browser Reach 16 Million Overseas Users, Mostly in Asia – Aside from those in China, Tencent tells us that the top 10 nations for QQ Browser usage are, starting with the largest: India, Indonesia, Nigeria, Pakistan, Bangladesh, Iran, Brazil, Thailand, Saudi Arabia, and the US.
SOCIETY, ART, CULTURE AND HISTORY
Ai Weiwei Survey in Washington – NYTimes.com – Too often in this exhibition, the objects come off as a window dressing that is all but overshadowed by the celebrity, pronouncements and predicaments of the artist himself. They suggest that he doesn’t make great art as much as make great use — amplified by digital technology — of the role of the artist as public intellectual and social conscience.
ENERGY, ENVIRONMENT AND HEALTH
北京将评估分时分区单双号限行_新闻_腾讯网 – Beijing evaluating odd/even license plate restrictions at certain times to deal with traffic congestion
» Is Mo Yan a Stooge for the Chinese Government? Rectified.name 正名 – Mo Yan is a serious writer with a substantial body of work, much of it dealing with Chinese social and historical issues as directly as he dares. We might wish as readers that he were more daring, but we don’t get to make that call — he does. He has chosen to ensure that he will have the freedom to keep writing and publishing. Mo’s novels and stories do his speaking for him, and they do so eloquently and forcefully.
Lao She in London: Anne Witchard: Amazon – the four years the young aspiring writer spent in London between 1924 and 1929 have largely been overlooked. Anne Witchard, a specialist in the modernist milieu of London between the wars, reveals Lao She’s encounter with British high modernism and literature from Dickens to Conrad to Joyce.
A Subversive Voice in China: The Fictional World of Mo Yan: Shelley Chan: 9781604977196: Amazon.com: Books – Shelly Chan delves into Mo Yan’s entire collection of literary works, considering novels as well as short stories and novellas. In this analysis, Mo Yan’s works are dealt with in a diachronic fashion–Chan discusses the development of Mo Yan’s style throughout his career by considering themes that he has addressed in a variety of narratives over time. This provides the reader with valuable insight into understanding how individual narratives fit into the entire collection of Mo Yan’s body of literary work.