Today’s China Readings July 7, 2012

Blame PEPCO for the late delivery. We had another 6 hours of power outages today, including one that started 2 minutes before I was going to press “publish”. It is just incredible the America’s capital city has such a third world electricity infrastructure. We had an outage last Friday, before the big storm, that was a brownout because the system was overloaded. The explanations today ranged from “fixed lines down the road” to “system overloaded due to excessive heat”. Either way, pathetic for PEPCO, and America. And Saturday and Sunday are forecast to have high temperatures over 100 degrees….

In what must have sparked real concern in Beijing, students were instrumental in organizing the recent protests in Shifang, Sichuan. Offbeat China explains in Traces on Weibo: How a NIMBY protest turned violent in a small Sichuan city?:

Students were organized online, reportedly through QQ (China’s No. 1 instant messaging tool) and Baidu Tieba (BBS managed by Baidu). Protest started on July 1. At the same time, they used both online and offline tools to call for support…These students made signs, T-shirts and even held a petition signing event and marched to local government building. They were also smart enough to promote their cause to everybody in Shifang – they handed out flyers during the protest, they texted call-for-support messages out and shared them on social networks, and they left call-for-participation messages on the wall…Apparently, Shifang government has tried to cool down students’ protest…but by the wrong means. It was reported that parents were urged to take their children home in special parent meetings and that parents who were CCP members were told if they didn’t get their children home, they’d be fired. Nothing seemed to have worked. The protest accelerated the next day, possibly out of the control of the students who organized the protest.

The role of the students elicited an editorial from the Global Times–环球时报:不应鼓励中学生走上冲突一线, translated as Do not foment youngsters to protest. China Media Project summarized the Global Times editorial:

In an editorial today, the Chinese-language Global Times, a spin-off of China’s official People’s Daily, writes that it is wrong and worrisome to see young teens participating in political actions that seen recently in Sichuan, where thousands of residents of Shifang city turned out to protests the building of a molybdenum-cooper plant. The paper wrote: “Middle school students are not yet adults and their ideas are not yet fully mature. They are very emotional and highly sensitive . . . [They] can be easily swayed by adults, either toward a correct social mentality or in the wrong direction.” “In every normal household,” the paper continued, “the correct duty of middle school students is to study, and not to be encouraged to join events of a political nature.”

Han Han also weighed in on the students in Shifang, via a TeaLeafNation translation:

These people are the masters of tomorrow, and now, they’ve already arrived. The world is yours, and it’s ours, but at it’s root it’s theirs. The Shifang government officials are our fathers’ generation; they need to look upon these post-80s and post-90s [youth] and make some changes. I know you all have already made many concessions and compromises, let’s finish making something good together.

So Shifang has environmentally aware, political active, digitally native, fearless student protesters. Beijing must realize that this is an extremely dangerous mix. I have written a few times about the coming tsunami of cheap Chinese smartphones and the challenges they will pose for China’s censorship regime. TechInAsia recently provided a useful breakdown of some of the leading new phones in Spec by Spec: China’s 5 Hottest Homegrown Smartphones. These are good phones with decent cameras and 3G connectivity. Even if the government turns off the networks it will not be able to delete all the photos and videos.

It will get even harder for the government with product enhancements like the forthcoming update to Tecent’s massively popular WeChat app. Per TechInAsia, WeChat is to Get Voice and Video Calling in v4.2 Update. I am not a cyber-utopian and enjoyed Evgeny Morozov’s The Net Delusion, but I am really starting to wonder if the mid- and junior level folks in the telecoms companies, and the employees at the big Internet companies, actually know exactly how corrosive these new technologies are to the Communist Party’s rule and are working to help society reach its “tipping point”? Perhaps they believe they will then be seen not as lackeys of the censorship regime but as heroic catalysts of change in China?

Then again, China’s security services are building plenty of counter-measures, as the Jamestown Foundation detailed in last year’s China’s Adaptive Approach to the Information Counter-Revolution.

Bloomberg’s Linda Yueh makes some excellent observations about yesterday’s rate cuts in China’s quiet radical moves. Yueh argues that:

China again widened the amount that banks can deviate from the benchmark lending rate, and it made asymmetric cuts to the lending and deposit rates. Both portend a significant set of financial reforms that is quietly emerging behind the headlines of further monetary stimulus….This may signal the eventual removal of the lending floor and the deposit ceiling. It would also complete the significant set of reforms that began in October 2004 when China lifted the ceiling on the lending rate and the floor of the deposit rate. With such reforms, China could finally have the market-clearing interest rate that it needs…The distortions in the financial markets preclude efficient capital allocation. For China to re-balance its economy and sustain its growth, improving the use of capital rather than increasing fixed asset investment or ‘factor accumulation’ is key. Yesterday’s quiet set of moves towards that goal may prove to be much more radical than they first appear.

Perhaps Yueh is getting ahead of herself, but as the Peterson Institute details in China’s Recent Financial Reforms: More than the Sum of the Parts?, China has initiated many financial sector reforms. Reforms in general are painful and face massive resistance, and China is effectively trying to upgrade a Tuplolev Tu-204 to a Boeing 747, in mid-flight. But Beijing deserves more credit than it has gotten for taking on entrenched special interests. The central government has inflicted enormous pain on the real estate sector and construction and building materials industries through the property controls introduced in Q2 2010. And now it is taking on the banks.

Beijing pays attention to the multitude of Western expert claims that China’s economy is near a crisis. Today’s overseas edition of the People’s Daily has a page two article denying that the economy is in trouble and warning readers against the ulterior motives of foreign institutions who are pushing the short China meme–中国经济“危急”说于实无据: 稳增长政策空间大 洋机构唱空有企图. Could this be a sign that the government will start to crack down on the PRC resident, foreign China bears, especially those who make lots of money consulting with foreign institutions, probably illegally under PRC law? And if People’s Daily publishes something like this, is it a sign Beijing is really worried about the state of the economy?

No official word yet from China about the Libor scandal. China has Shibor, which the government effectively controls, but it is irrelevant compared to Libor and the the hundreds of trillions of dollars of securities that rely on it. Expect China to argue that Libor is another relic of the hegemonic, corrupt Western financial system that nearly collapsed the world economy. Sadly, that argument has some merit…

Caixin has a good update on the customs investigations that have roiled the China art world–Customs Agents Clamp Down on Artful Dodgers. Has anyone met a Chinese artist or gallery who reports accurate sales and income information to the Chinese authorities? This industry is a gold mine for tax collectors.

And just because it is a great read, check out Will Moss’ Godzilla vs. the SARFT Monster on Chinese movie and television censorship over at Rectified.name.

Don’t forget that today is the 75 anniversary of the 1937 Marco Polo Bridge Incident outside Beijing.

The best way to read this blog is to subscribe by email, especially if you are in China, as Sinocism is still mostly blocked by the GFW. The email signup page is here, outside the GFW. You can also follow me on @niubi or Sina Weibo @billbishop. Comments/tips/suggestions/donations are welcome, and feel free to forward/recommend to friends. Thanks for reading.

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The best way to read this blog is to subscribe by email, especially if you are in China, as Sinocism is still mostly blocked by the GFW. The email signup page is here, outside the GFW. You can also follow me on @niubi or Sina Weibo @billbishop. Comments/tips/suggestions/donations are welcome, and feel free to forward/recommend to friends. Thanks for reading.

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2 thoughts on “Today’s China Readings July 7, 2012

  1. “So Shifang has environmentally aware, political active, digitally native, fearless student protesters. Beijing must realize that this is an extremely dangerous mix. ”
    Another take:
    “So Shifang has environmentally aware, political active, digitally native, fearless student protesters. Beijing must be very proud. It has taken only 60 years for them to go from 95% illiteracy to this. And, with a trust and approval rating of 85%–95% (Pew, Edelman, Harvard) they can afford to take a relaxed point of view”.
    Of course, the local authorities, who provoked this reaction, are the ones to blame and whose careers will–righty–suffer.

  2. People like to harp on “rule of law”, but doesn’t that mean stuff like:

    – don’t endanger young children by using them as human shields against the police?
    – allow the government to create policy and regulate highly polluting industries? Wouldn’t setting a factory bet better than  molybdenum illegally mined and processed in a hole?
    – doesn’t the police have the right to maintain order, unblock streets, and declare protest to be over?
    – by extension don’t the police have the right to enforce law and order with tear gas, baton, rubber bullets? Heck even real bullets if use of deadly force is deemed justifiable? 
    – destruction of public property and rioting isn’t exactly “peaceful” or legal protest, not even in US?

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