China has cut interest rates for the first time since 2008. The reduction comes ahead of what many expect will be very weak May economic data and against the backdrop of a worsening outlook for Europe and the global economy. As the FT’s Beyondbrics explains in China’s rate cut: glass half empty?:
In another sign perhaps that the country is making up for lost time following two months of near-paralysis this spring amid political infighting over the fate of Bo Xilai, the central bank also introduced measures on Thursday to give banks more flexibility on the rates at which they can lend money and pay depositors.
In an important move alongside the rate cut, the Chinese central bank said it would allow banks to set deposit rates 10 per cent above the benchmark level and set lending rates 20 per cent below the benchmark
“The discount that banks were previously allowed to offer on lending rates relative to the benchmark rate has been doubled, from 10 per cent to 20 per cent, which means that the lowest official lending rate has effectively been cut by 63 basis points, not just 25 basis points,” said [HSBC’s Donna] Kwok.
The Wall Street Journal conducted a rare interview with Lou Jiwei, head of China’s CIC sovereign wealth fund. In China CIC Chief Lou Jiwei Sees Rising Risk Of Euro Breakup Lou told the reporters that “CIC sold down its exposure to European peripheral countries a long time ago, before incurring any losses, and has reduced its holdings of European stocks and bonds. “Right now we find there is too much risk in Europe’s public markets.”
China’s State Council Information Office published a draft of proposed new Internet regulations, as Reuters reports in China proposes strengthening Internet guidelines (original Chinese draft–关于《互联网信息服务管理办法（修订草案征求意见稿）》的说明.) The biggest change appears to be increased emphasis on real name registration on forums and blogs as well as microblogs (aka Weibo). Tea Leaf Nation has a good take on the draft in What to Make of China’s New Internet Law.
Investors do not seem worried, as Sina stock rose 1% in Thursday trading. But I believe the real name rule, if implemented, would be very negative for Sina. Sina management likely agrees, as in its recent annual filing with the SEC the company admitted it has not complied with Weibo real name registration rules. The actual technical implementation is not difficult, so it might be prudent to assume the delays are really due to concerns over the impact of real name registration. But the sell side analysts will likely say this is good news and churn out happy spin. If you believe them, I still have that Beijing bridge for sale… (and no position in Sina stock)
Meanwhile, has anyone profiled Sina Editor-in-Chief Chen Tong, the company’s real power behind Weibo?
Readers may remember a reference a few days ago to a nasty rumor that Boxun was spreading. I did not describe the rumor but noted that it looked like the start of a smear campaign. It was, though Boxun has so far only retracted part of it. The WantChinaTimes reports that Boxun takes back claim of Ling Jihua’s involvement in ‘coup’. The fact that someone is targeting Ling Jihua could be a sign that he is a dark horse for a big job in the 18th Party Congress, perhaps even a seat on the Politburo Standing Committee.
The South China Morning Post reports in Party polls 370 members on choice of top leaders that senior members of the Communist Party recently held an informal poll to pick their leaders for the next decade. The poll is non-binding, but the paper quotes scholars saying this “vote” represents a very important step forward for intra-Party democracy (the kind of political reform Chinese leaders are really talking about when so many in the West get excited about speeches mentioning political reform.)
There was another interesting tidbit in the SCMP story. China watchers have been debating whether or not Hu Jintao has reinstated the annual summer meetings in Beidaihe after publicly saying a few years ago that there would be no more summer seaside summits. According to the article:
“one party insider, a party theorist, confirmed that a secret vote had been conducted ahead of the top leaders’ summer summit, known in the past as the Beidaihe meeting, after the seaside resort in Hebei, neighbouring Beijing, where it was held. The meetings, often in mid-June, have continued since Hu came to power but now convene in Beijing.”
So there are Beidaihe meetings, but in Beijing? No wonder people are confused.
Caixin has posted a translation of its piece into the dirty business of IPO media relations, writing in Road Show Media Bandits Squeeze IPO Hopefuls that “before most stock debuts, companies helped by PR agents are paying media outlets to sanitize the news.” PR is a dirty business in China.
I highly recommend the recent Sinica Podcast on the state of gender equality in China. This edition features “Mary Kay Magistad, correspondent in China for the Public Radio International/BBC program “The World.”…sociologist Leta Hong Fincher, who’s doing her PhD at Tsinghua University, Didi Kirsten Tatlow of the International Herald Tribune, and Cao Haili, managing editor of the upcoming Chinese language online version of the New York Times.”
The story behind the 1989 “Tankman” photograph is fascinating. In Tank Man Revisited: More Details Emerge About the Iconic Image Time Magazine talks to Jeff Widener, the photojournalist who took the picture. Widener says it would not have happened without the help of a young American named Kirk Marsten.
I stayed a couple of nights in a room on the south side of the Beijing Hotel not far from where Widener took this photo, working as a “fixer” for a major US TV network. We missed Tank Man. Every time there was gunfire my job was to call the radio HQ in New York on one of those brick Motorola phones, tell them to roll tape, then crawl out onto our 12th floor balcony and hold the phone over the side. The scariest moment of the Beijing Hotel stay came one morning at 6 AM or so when I walked out the east exit of the hotel on my way to the Palace (now Peninsula) Hotel to deliver the video cassete I had stuffed in my waistband. I exited out the side entrance onto Wangfujing, right into the middle of a platoon of PLA troops having breakfast. Fortunately they were hungry so all they did was look me over as I quickly crossed the street and walked north, without looking back.
Widener’s full picture of the Tank Man scene is chilling. I will remember that view for the rest of my life.
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- China needs time, room to improve air quality – Xinhua | English.news.cn
The international community should give China enough time and room to gradually improve its air quality, which is sometimes a dilemma for developing countries as they make efforts to compromise between maintaining economic growth and protecting the environment.Air quality conditions and standards in developed countries are undeniably better. However, this level of quality cannot be achieved without long-term efforts to clean up 100 years of pollution.
- China to boost treatment capacity for severe mental illnesses – Xinhua | English.news.cn
“Mental health issues remain an obvious public health and social problem in our country as more people are suffering from melancholy, anxiety and other kinds of mental disorders,” said a draft guideline on the country’s mental health work for 2012-2015, released Wednesday to seek public feedback.
- Surveillance Ends at Chinese Activist’s Village – NYTimes.com
The guard posts came down and the hired toughs who manned them melted away this week in Dongshigu, restoring an air of freedom to a village that authorities turned into a prison to keep the activist Chen Guangcheng under house arrest for nearly two years.
- SCO will be ‘fortress of security and stability’ |Asia-Pacific |chinadaily.com.cn
The Shanghai Cooperation Organization granted Afghanistan observer status on Thursday as President Hu Jintao said the bloc aimed to become a “fortress of regional security and stability and a driving force of regional economic development”.
- AMC最低资本须达12.5% 多项指标高于商业银行|AMC|最低资本|商业银行_21世纪网
required capital ratio for asset management companies set at 12.5%, higher than market expectation of 8%, higher than commercial bank required ratio// 银监会规定，资产公司的最低资本要求为12.5%，高于此前业界预期的8%，也高于商业银行的资本要求。
- Rentrak to Count China’s TV Viewers – WSJ.com
In a bid to provide advertisers and television networks with accurate data about the burgeoning Chinese entertainment market, Rentrak Corp., which measures viewing and spending on TV and movies, will begin measuring TV audiences in China, through a joint venture with a local market-research company called Sinomonitor.
- Best Places to Retire Abroad: Bali, Indonesia – WSJ.com
How a retired California couple found a new life on a Pacific island
- Road Show Media Bandits Squeeze IPO Hopefuls – Caixin Online
- Party polls 370 members on choice of top leaders | SCMP.com
Senior members of the Communist Party held an internal poll in mid-May to select their favoured top leaders for the next 10 years, in a significant reformist step that may be institutionalised in the future.
- 人民日报-我国首部特大型综合性辞典《大辞海》编纂进程过半 陈至立出席主编扩大会议并讲话
the cultural, political and national importance of the Chinese language, as embodied in dictionary projects 据新华社上海６月７日电 （记者孙丽萍）《大辞海》《辞海》主编扩大会议７日在沪举行，全国人大常委会副委员长陈至立出席会议。据悉，我国跨世纪重大文化工程、国内首部特大型综合性词典《大辞海》计划于２０１５年底前出齐３８个分卷，目前编纂工程已经完成６０％。
- Apple Said to Add Baidu as IPhone Search Engine in China – Bloomberg
not like Apple had a choice…
- Alibaba Open to Temasek, CIC Investment to Buy Back Yahoo Stake – Bloomberg
- China CIC Chief Sees Rising Risk Of Euro Breakup – WSJ.com
- Grape Wall of China–China wine word: Opus One CEO David Pearson on fakes, strategies and styles
- Tiananmen activist found dead under suspicious circumstances-MSNBC
- Jing Daily: Picky, Private, Philanthropic: The Evolution Of China’s Art Collectors
- Charlie Rose – James Fallows
A discussion about China with James Fallows of The Atlantic and author of “China Airborne”
- China’s rate cut: glass half empty or full? | beyondbrics
- Scientists uncover evidence of impending tipping point for Earth
- China steps up efforts to keep officials from leaving country – latimes.com
China prosecutors say that 18,487 officials have been caught since 2000 while allegedly trying to flee overseas with ill-gotten gains, according to one report.
- Karzai Cuts Short China Trip After Air Strike Kills Civilians – WSJ.com
Afghan President Hamid Karzai cut short his trip to China on Thursday, denouncing a coalition air strike that appeared to have killed women and children in eastern Afghanistan.
- What’s coming out of China’s taps? Concerns over quality of tap water in Chinese cities grows after two government reports on the product of water-treatment plants.
Studies suggest water flowing into city homes is too dirty, while new rules seem flawed from the get-go and residents are kept firmly in the dark.
- China’s Growing Whisky Bubble – Deal Journal – WSJ
2 friends w whisky bars in beijing. just getting started here. bubble talk premature// analysts at brokerage firm Redburn are cautioning for spirit makers looking to sell the tipple to the huge Chinese market, and it’s not without precedent. Japan went through such Scotch-fueled exuberance in the 1970s and 1980s, say the analysts, and spirit makers are still haunted by the hangover from that experience.
- Chinese food companies: getting hungry | beyondbrics
“If [the Weetabix deal] is successful, that could be a precedent for other companies,” Bruno Lannes, who follows the Chinese trends in Retail and Consumer Products as a partner for Bain & Co in Shanghai, told beyondbrics.
- Sandia National Labs Scientist Arrested – Science News – redOrbit
A Sandia National Labs scientist was arrested recently because he allegedly stole laboratory research and shared it with China. Jianyu Huang is being accused of stealing research belonging to the U.S. that he claimed was his own original research that he shared with several Chinese universities. He went online to share the data with the country’s state-run schools. Sandia National Labs said that he did not have access to classified national security information.
- Metal Piles at China Ports Signal Growth Sputter – China Real Time Report – WSJ
The mountains are iron ore, a crucial import that’s a lifeline to the world’s largest steel producer, and their size has become a telling, even if imperfect, indicator of the Chinese economy’s sharp, sudden sputter.Iron ore stockpiles at Chinese ports this week reached an all-time high of around 120 million tons, a senior analyst for Beijing’s Umetal.com told China Real Time on Thursday. The high supply level is not a good sign: It suggests steelmakers aren’t in a hurry to produce, pointing to a weak appetite across the industry, which is heavily dependent on China’s all-important real-estate sector.
- China Due Diligence and AIC Documents – An Update | China Hearsay
only thing you need to read about the AIC document access issue
- » I’ll Be the Judge of the Air Quality in These Parts Rectified.name 正名
- China’s $23 Billion Steel Push Seen Igniting Iron Ore – Bloomberg
China is set to jolt iron ore off a six-month low after approving an estimated $23 billion of steel projects that will use the raw material produced by mining companies such as Rio Tinto Group (RIO) and BHP Billiton (BHP) Ltd. The commodity will climb to $152 a metric ton in the second half, according to the average of five analyst estimates compiled by Bloomberg. The price declined to $131 a ton yesterday, near year-lows reached on May 2
- Ex-Singapore Civil Defence Chief Charged With Corruption – Bloomberg
Lim, 52, allegedly obtained “sexual gratification” from three women between May 2010 and November 2011 in exchange for favoring their companies in awarding contracts, according to charge sheets filed by the Corrupt Practices Investigation Bureau. The events took place at locations ranging from parking lots in the city to a Paris hotel, the documents showed.
- China Cuts Interest Rates for First Time Since 2008 – Bloomberg
China cut interest rates for the first time since 2008, stepping up efforts to combat a deepening economic slowdown as Europe’s worsening debt crisis threatens global growth.The one-year deposit rate will drop to 3.25 percent from 3.5 percent effective tomorrow, the People’s Bank of China said on its website today. The one-year lending rate will fall to 6.31 percent from 6.56 percent. Banks can offer a 20 percent discount to the benchmark lending rate, the PBOC said, widening from a previous 10 percent.
- China proposes strengthening Internet guidelines | Reuters
In a draft update of the government’s “Methods for Governance of Internet Information Services”, China is proposing to widen the definition of Internet information service providers to include online forums, blogs and microblogs.
- Photos: China’s Final Exam, the Gaokao – China Real Time Report – WSJ
- Like it or Not: State Oil Company Becomes ‘Flag’ in South China Sea – China Real Time Report – WSJ
On May 9, CNOOC Chairman Wang Yilin described the company’s new rig in terms befitting of an aircraft carrier, calling it “mobile sovereign territory” and a “strategic weapon” for developing South China Sea energy resources – a statement that has led many to wonder whether CNOOC is in effect serving as a tool of state policy in the South China Sea.At the very least, it seems Beijing is permitting CNOOC to increase operations in a maritime arena in which the Chinese government has actively sought to prevent other nations from conducting similar operations—even as close as 70 miles from their own coasts. And it puts CNOOC equipment and personnel in a position in which it would be very difficult for Beijing not to defend them in the event of tensions or crisis.
- Coffee Chat: Tencent’s Plan in Indonesia | Tech in Asia
Tencent has been in Indonesia for six months because of the massive market here, especially in mobile. In that time, the company has been pushing its QQ Browser and WeChat products in internationally, but for the Indonesia market, Tencent has a separate WeChat-like product called Qute that’s more targeted at Indonesia specifically.
- International – James Fallows – China Soft-Power Watch: Looking on the Bright Side – The Atlantic
there is a very nasty going around Beijing about Lang Lang. Won’t repeat, just wish I knew the genesis of it// quite respectful of Lang Lang’s talent and his overall charm and appeal.
- Chairman Mao, in Their Own Hand – NYTimes.com
The literati has integrity? hah// Amid very little fanfare, the Writers Publishing House, one of China’s most prestigious publishers of literary fiction, brought out a book entitled “One Hundred Writers’ and Artists’ Hand-Copied Commemorative Edition of the ‘Yan’an Talks.”’..That this nation’s literati can be so blasé about their integrity and role in society and politics is a reminder of the dangers of blithe optimism about the progress of freedom in China.
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