| Moderate Quake Hits Northern China Posted: 28 May 2012 12:53 AM PDT |
| CDT Money: Stimulus Talk Gaining Steam Posted: 28 May 2012 12:44 AM PDT Another week, another sign of strain within China's economy as the central government steps up its public statements in support of a possible stimulus. Europe's woes continue to weigh on China's factory sector, with HSBC's Flash Purchasing Managers Index (PMI) sliding to 48.7 in May as the index posted its seventh straight month in contractionary territory. HSBC's PMI reading draws from a survey of small and medium-sized businesses and better reflects the health of China's private sector, in contrast to an official reading of China's state-owned manufacturers that the National Bureau of Statistics will publish this coming week. HSBC's manufacturing figures are also typically more pessimistic than the official numbers, given that smaller companies tend to suffer more in an economic downturn than state-owned companies which have easier access to credit and are less exposed to foreign markets. Indeed, the two readings have diverged of late - official PMI has increased for five straight months and signaled a rebound for China's factory sector in March and April. But with the government looking to reduce the influence of its state-owned enterprises and focus on the quality of economic growth as it maps out the next phase of China's development, the health of private businesses will likely become an increasingly important barometer. And while official PMI has been a source of relative optimism, China's industrial giants have faced their share of hardship as well. Profits for the country's state-owned enterprises have fallen nearly 10 percent from a year earlier, according to The China Daily. The good news, writes HSBC's own analyst Qu Hongbin, is that continued weakness suggests that Beijing will pursue more concrete policy action to ensure a soft landing for its economy. On the surface, recent public statements indicate that the government is prepared to do so. Premier Wen Jiabao took time from his trip to Wuhan last weekend to vow proactive policies in support of growth, and the State Council's weekly meeting on Wednesday yielded a pledge to make stable growth a priority. While a stimulus package similar to the one doled out in 2008 may be "inadvisable" and unlikely, the State Council's statement hinted that it would focus on tax reform, large infrastructure projects and attracting private investment in sectors such as energy, railway and telecommunication. The stimulus packages are expected to reach 1 trillion yuan, according to state media, which hailed the proposed measures even though specific details have yet to emerge: The increased likelihood of an economic downturn, together with a worse-than-expected external economic environment, has contributed to the "sudden reversal" in China's tightening macroeconomic policies. It is the Chinese government's belief that steady economic growth will help defuse the country's looming economic and social problems. Thus increased inputs into infrastructure construction, moves to expand domestic demand and tax reductions on enterprises are viewed as effective ways to achieve this goal.
The bears are circling, and critics point out that the inefficiencies and inequalities of China's economic model have set it up for a big fall, but The Economist reports that "the very unfairness of China's system gives it an unusual resilience." And despite all of its problems, writes GK Dragonomics' Arthur Kroeber in Foreign Policy, China's economy is not in serious trouble: Not just yet. The odds are that China will navigate these shoals and continue to grow at a fairly rapid pace of around 7 percent a year for the remainder of the decade, overtaking the United States to become the world's biggest economy around 2020. That's a lot slower than the historical average of 10 percent, but still solid. Considerably less certain, however, is whether China's secretive and corrupt Communist Party can make this growth equitable, inclusive, and fair. Rather than economic collapse, it's far more likely that a decade from now China will have a strong economy but a deeply flawed and unstable society. China's economic model, for all its odd communist trappings, closely resembles the successful strategy for "catch-up growth" pioneered by Japan, South Korea, and Taiwan after World War II. The theory behind catch-up growth is that poor countries can achieve substantial convergence with rich-country income levels by simply copying and diffusing imported technology. In the 1950s and 1960s, for instance, Japan reverse-engineered products such as cars, watches, and cameras, enabling the emergence of global firms like Toyota, Nikon, and Sony. Achieving catch-up growth requires an export-focused industrial policy, intensive investment in enabling infrastructure and basic industry, and tight control over the financial system so that it supports infrastructure, basic industries, and exporters, instead of trying to maximize its own profits. China's catch-up phase is far from over. It has mastered the production of basic industrial materials and consumer products, but its move into sophisticated machinery and high-tech products has only just begun. In 2010, China's per capita income was only 20 percent of the U.S. level. By most measures, China's economy today is comparable to Japan's in the late 1960s and South Korea's and Taiwan's around 1980. Each of those countries subsequently experienced another decade or two of rapid growth. Given the similarity of their economic systems, there is no obvious reason China should differ.
In other words, according to The Financial Times' David Pilling, "the wobbly panda won't fall yet." Loans Likely to Miss Targets in 2012 With Chinese New Year data now displaced by the more indicative and disappointing lending figures from April and May, several bank officials acknowledged this week that China's biggest banks will likely miss their annual new loan targets for the first time in at least seven years. From Bloomberg: A decline in lending in April and May means it's likely the banks' total new loans for 2012 will be about 7 trillion yuan ($1.1 trillion), less than an estimated government goal of 8 trillion yuan to 8.5 trillion yuan, said one of the officials, declining to be identified because the person isn't authorized to speak publicly. Banks are relying on small and mid-sized companies for loan growth after demand from the biggest state- owned borrowers dropped, the people said. The drying up of loan demand attests to the severity of China's slowdown and may add pressure on Premier Wen Jiabao to cut interest rates and expand stimulus measures. The economy may grow in 2012 at its slowest pace in 13 years, a Bloomberg News survey showed last week, as Europe's debt crisis curbs exports, manufacturing shrinks and demand for new homes wanes.
Private Capital: Is the Door Open? Among the growth-oriented measures discussed by Beijing this week, none have emerged more quickly or tangibly than those supporting the flow of private capital into the economy. The China Banking Regulatory Commission announced on Saturday that it would treat private capital entering the banking industry with the same standards as state capital, one day after the State-owned Assets Supervision and Administration Commission (Sasac) put out a guideline that encourages the injection of private funds in SOEs. The National Development and Reform Commission (NDRC) is also in the process of drafting rules for private investment in monopolized industries such as electricity, oil and natural gas, according to Xinhua News. The flurry of policy announcements suggest China's "most determined push" to boost private investment since it joined the World Trade Organization, according to Reuters, but will real structural reform emerge? China is open for business for several reasons, writes Forbes' Gordon Chang, but new policies look like "another instance of Chinese vaporware": Why? In the last few years state enterprises have become entrenched and extremely powerful in Chinese political circles. And provincial and local governments are even more hostile to non-state capital because of the perceived divergence of interests between private investors and Party officials. Moreover, it's unlikely that much, if anything, will get done this year as top leaders are now embroiled in disruptive political struggles. In fact, part of the reason for the accelerating economic slide is that for months they have been distracted by the worsening turmoil in the top reaches of the Party. Moreover, not much may get done next year either. Xi Jinping is slated to take over this fall, and new supremos usually take a couple years before they are able to effectively exercise power. In any event, central government ministries, if they were truly serious about liberalization, would just implement structural changes as opposed to talking about them. Until there is a sign he is serious this time, many will think Premier Wen Jiabao is borrowing from his 2010 playbook when he had his State Council grandly announced similar reforms that were not put into effect with real rules. And there is one more factor suggesting private capital will not rescue the Chinese economy this time. As domestic and foreign investors learn more about both the fundamental and cyclical problems in China, it will be increasingly unlikely that anyone will commit substantial sums to the country.
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Post tags: CDT Money, China Securities Regulatory Commission, hard landing, lending, National Development and Reform Commission, PMI, private investment, soft landing, State Council, state-owned enterprises, stimulus, Wen Jiabao
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| Chinese Money and Privilege Flow Overseas Posted: 27 May 2012 11:42 PM PDT In the Sydney Morning Herald, John Garnaut looks at the web of business interests and personal wealth that surrounds the children of China's most powerful leaders, known as "princelings." He tells the story of Zeng Wei, the son of powerful former Vice President and Standing Committee member Zeng Qinghong, who bought a $32 million house in Sydney across the street from Rupert Murdoch, after his father had been wined and dined there by the Murdochs: Four years after Zeng Wei's purchase – which remains the most egregious confirmed example of Communist Party princelings flaunting their wealth – China's leaders are again grappling with the predicament of being unable or unwilling to control the privileges that flow towards their relatives. The reformist advocacy of the Premier, Wen Jiabao, has long been discounted because of his wife and son's aggressive use of family status to pursue private business opportunities. And now the purged Politburo member Bo Xilai also stands exposed to allegations of great hypocrisy, as foreign journalists pore over his family's financial dealings. While Bo Xilai was reviving Maoist nostalgia on his official's salary of about $US1600 per month, in a country where per capita income is ranked 121st in the world, his son was renting a presidential-style suite at Oxford and driving a Porsche in the United States. Bo Xilai's elder brother adopted an alias to control $US10 million worth of shares at the Hong Kong-listed subsidiary of a state-owned bank. Two sisters of Bo's wife control business interests worth $US126 million, according to what a Bloomberg investigation could identify. And his wife, Gu Kailai, is accused of murdering an English friend, Neil Heywood, after they fell out over money. Zeng Qinghong, Bo Xilai and Wen Jiabao are all immensely capable individuals, engaging and at ease in any company. Zeng and Bo, who were born into the heart of the communist aristocracy, are far more interested in accumulating personal power and defending the regime than acquiring the trappings of personal wealth. In today's China, however, where "politics is in command" and capital comes at the cost of a future favour for those who have the right connections, even simple-living and apparently idealistic leaders have found it difficult to deny their families access to the power and largesse that naturally flows their way.
Many officials, especially those who obtained their wealth through illicit means, protect their assets by sending their money abroad with spouses or children. The term "luo guan," or naked official, refers to the individual left in China without his wealth. The Economist reports: For senior officials the usual first step to getting naked is to send children overseas to study. Perhaps the most famous example is the recently purged party chief of Chongqing, Bo Xilai. Mr Bo's son, Bo Guagua, is a graduate student at Harvard University, after attending Harrow School and Oxford University in Britain. Mr Bo's wife, Gu Kailai (now detained on suspicion of murdering a British businessman in Chongqing), has lived abroad, and their broader family is worth more than $100m, according to the New York Times. The government has done little to stop the emigration. It began formally to monitor the whereabouts of officials' families and assets only last year, and then only by asking officials to fill in forms. In 2011 the central bank published an estimate on its website, attributed to the Chinese Academy of Social Sciences, that up to 18,000 officials had fled the country between 1995 and 2008 with stolen assets totalling 800 billion yuan ($130 billion at today's exchange rate). The bank then claimed the figures were inaccurate, and scrubbed them from its website (though not from the memories of those who had read them). The chief prosecutor, Cao Jianming, says that in 2011 foreign governments helped arrest 1,631 Chinese fugitives for "work-related crimes" (including officials and employees of state-owned firms) and to recover 7.8 billion yuan in stolen assets. Some senior officials have pushed for reform. In January Guangdong province in southern China announced that officials whose families have emigrated will be barred from high-level posts. But this is an exception. Officials who can afford to send their families abroad are usually the most powerful, and the most aware of China's problems.
In response to this phenomenon and to Bo Xilai's case, Party officials have announced steps to rein in transfers of wealth overseas by officials, Bloomberg reports: The Central Disciplinary Inspection Commission will set up a "flight-prevention coordinating mechanism" for every province and enhance "passport management" measures, according to a statement on the party website posted May 24, citing Gan Yisheng, vice secretary of the commission. [...] The government has "prevented a batch of officials from fleeing the country" through an existing overseas travel- registration system and supervision of cross-border fund transfers, according to the statement, without giving details.
Yet as Economist correspondent Gady Epstein points out, these measures may not be much of a change from existing regulations: Worth noting, w/r/t naked officials & tightening on travel, this is a constant refrain. "Passport management" has been in place since 2003. — Gady Epstein (@gadyepstein) May 28, 2012
Resentment toward the wealth and privilege of the "princeling" class has been a long-standing problem in Chinese society that will not be easily resolved. On his Twitter account, Bill Bishop pointed to a Bloomberg article about princelings from 1992: One obstacle to the brat pack's rise is the widespread resentment they evoke among ordinary citizens. Some complain that the taizi are reminiscent of the privileged offspring of the emperors. The creeping power of the taizi was a prime target of the ill-fated student protests in Tiananmen Square in June, 1989. Fear of rekindling such feelings may be one reason only a few of them were elevated to the Central Committee during the October congress. SILVER SPOONS. But the scripted announcements from the congress don't tell the whole story. For instance, the leaders' children are increasingly found in key positions in China's provinces, where market reforms are roaring ahead. The party secretaries of such key cities as Fuzhou, Chongqing, and Datong are all related to powerful party bosses. Given their privileged upbringing, with access to drivers, maids, Western goods, and excellent educations, it's no wonder the taizi have little use for the old, Spartan communist way.
Read more about "princelings" via CDT.
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Post tags: Bo Xilai, high-level corruption, princelings, wealth, zeng qinghong
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| A Black Hood & 81 Captive Days for Ai Weiwei Posted: 27 May 2012 08:00 PM PDT The New York Times' Edward Wong relates a series of conversations with "the world's most powerful artist" Ai Weiwei, detailing his 81-day detention last year. The policeman yanked the black hood over Ai Weiwei's head. It was suffocating. Written in white across the outside was a cryptic phrase: "Suspect 1.7." At the rear of a white van, one policeman sat on each side of Mr. Ai, China's most famous artist and provocateur. They clutched his arms. Four more men sat in the front rows. "Until that moment I still had spirit, because it didn't look real," Mr. Ai said. "It was more like a performance. Why was it so dramatic?" On the morning of April 3, 2011, the policemen drove Mr. Ai, one of the most outspoken critics of the Communist Party, to a rural detention center from Beijing Capital International Airport, where Mr. Ai had planned to fly to Hong Kong and Taiwan on business. So began one of the most closely watched human rights dramas in China of the past year.
See more on Ai Weiwei, his detention and subsequent skirmishes with the authorities via CDT, and look for a nearby screening of Alison Klayman's documentary, Ai Weiwei: Never Sorry.
© Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: Ai Weiwei, Ai Weiwei detention 2011, illegal detentions, People's Armed Police, police
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| Sensitive Words: Foreigners and Cannibals Posted: 27 May 2012 07:37 PM PDT As of May 26, the following search terms are blocked on Weibo (not including the "search for user" function):  Photos of young American sharing fries and conversation with a beggar went viral on Weibo. Foreigners and Exiles: - Lei Feng (雷锋): Results for search terms related to Ambassador Gary Locke, an American who shared McDonald's French fries with a beggar, and other non-Chinese do-gooders are all blocked.
- Wu'er (乌尔): Wu'er Kaixi, a student leader during the Tian'anmen protests living in exile. When he went to the Chinese embassy in Washington this month, he found himself "most unwanted."
In response to the U.S. State Department's annual human rights report: - human rights (人权)
- renRights (ren权)
- HumanQuan (人quan)
- renquan (pinyin Romanization)
- human rights (English)
Murders in Yunnan: According to reports, the case of missing 18-year-old Zhang Yongming of Puning, Yunnan is related to a serial killer. - Puning (晋宁)
- cannibal (食人魔)
- homicidal mania (杀人狂)
- eat people (吃人)
- Zhang Yongming (张永明)
- Yunnan + missing (云南+失踪)
- dismember + corpse (肢解+尸体)
- Yunnan + kill, including terms with the character "kill" (杀), such as homicide, murderer, murder, etc. (云南+杀, 如杀人、杀手、凶杀等)
Generally blocked: These terms are not related to particular events. - unjust case (冤案)
- obscene (猥亵)
Note: All Chinese-language words are tested using simplified characters. The same terms in traditional characters occasionally return different results. CDT Chinese runs a project that crowd-sources filtered keywords on Sina Weibo search. CDT independently tests the keywords before posting them, but some searches later become accessible again. We welcome readers to contribute to this project so that we can include the most up-to-date information. To add words, check out the form at the bottom of CDT Chinese's latest sensitive words post.
© Anne.Henochowicz for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: filtered words, Gary Locke, human rights report, Lei Feng, sensitive words, sina weibo, State Department, U.S. State Department, U.S. State Department human rights report, weibo, wu'er kaixi
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| Two Self-Immolations in Lhasa, City’s First (Updated) Posted: 27 May 2012 07:23 PM PDT Two unidentified Tibetan monks reportedly set fire to themselves in front of Lhasa's Jokhang Temple on Sunday. From Radio Free Asia: "The security forces arrived immediately and put out the fire and all the tourists in the area were cordoned off from the site. Within 15 minutes, the area was cleaned and not a trace of the incident was left at the site," an eyewitness told RFA. "The flames were huge and witnesses are presuming that they [the two] were dead in the fire," one Tibetan source living in exile said, citing contacts in the region. "Lhasa city is now filled with police and para-military forces and the situation is very tense," the source said.
While there have been 35 self-immolations in Tibetan areas since March 2009, this would be only the second within the Tibetan Autonomous Region itself, and the first to take place in the capital. Columbia University Tibetologist Robert Barnett commented on the incident on Twitter: "Lhasa is boiling", reports eyewitness in the city after double-self-immolation there this afternoon. Exiles are reporting mass arrests. — Robert Barnett (@RobbieBarnett) May 27, 2012
This is the 1st ever immolation protest in the Tibetan capital, + only 2nd protest in Lhasa in 4 yrs. V serious development. @samuel_wade — Robert Barnett (@RobbieBarnett) May 27, 2012
News of the incident is so far scarce, with state media silent [Update: see below] and foreign reporters barred from the region. In addition, phone lines in the region were quickly blocked, according to exile news site Phayul. As Kristin Jones wrote for the Committee to Protect Journalists in February, the government's media exclusion policy "all but guarantee[s] that activists are the ones reporting the news." Update: Xinhua has confirmed the incident: Dargye, from Aba county in the Tibetan area of southwest China's Sichuan province, and Tobgye Tseten, from Xiahe county in a Tibetan community of the country's northwestern Gansu province, attempted the self-immolations at 2:16 p.m. on Pargor Street in the heart of Lhasa, the publicity department of Tibet's regional committee of the Communist Party of China (CPC) said in a press release early Monday. It said police on patrol put out the flames in two minutes and sent the men to hospital. Tobgye Tseten died and Dargye survived with injuries …. Downtown Lhasa is particularly crowded these days as Tibetans celebrate the Saga Dawa, which falls on the 15th day of the 4th month in the Tibetan calendar and marks the anniversary of Buddha's birth, enlightenment and death …. A senior official in Tibet condemned the Lhasa self-immolations on Sunday, saying they were separatist attempts.
The New Yorker recently featured a history of self-immolation and its status as "the paramount form of protest", following a series of cases this year across North Africa and the Middle East, and one in Norway, as well as those in Tibetan areas. The recent Tibetan self-immolations remind us that the practice's longest history is in China, where, beginning in the fourth century A.D., Buddhist monks took to sitting in pyres to propitiate ganying, the force that binds the corporeal and ethereal. "I have been weary of this physical frame for many a long day," the monk Daodu said before melting to death. His forebear Fayu started the trend of swallowing incense chips beforehand, perhaps to lubricate his soul's passage, perhaps to improve the odor of the proceedings. Soon enough, self-burnings became public performances. Officials attended. Crowds wept in admiration. And as the orders took on political power, so did self-immolation. Monks burned themselves to protest declining patronage from the ruling classes or to lament invasions. As the Quing dynasty disintegrated, on the eve of the First World War, there was a wave of self-immolations in protest of the decline of… well, of the world, so it seemed.
© Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: lhasa, Lhasa unrest, Robert Barnett, self-immolations, Tibet, Tibet coverage, Tibet protests
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| China Arrests Man Suspected of Killing 11 Posted: 27 May 2012 03:59 PM PDT Although stories of serial killers are generally unknown, China has arrested a man suspected of killing 11 in Yunnan Province. Aside from murder, the suspect has been accused of dismembering, burning, and burying the bodies. The Washington Post reports: The Ministry of Public Security said in a statement Sunday that 56-year-old Zhang Yongming was arrested by police in Yunnan province on murder charges. It said Zhang is suspected of attacking male victims who were walking alone on a quiet road near his home in Jinning county. The case is believed to be related to media reports this past week that at least eight young people had gone missing in the county. The reports sparked a public outcry because they cited relatives of the missing as saying that police ignored their pleas for help and prevented them from contacting the media.
Other reports are calling the suspect the 'cannibal monster.' The Daily Telegraph adds: It said Zhang, a loner who never talked to his neighbours, had previously served almost 20 years in jail for murder and was known in the village as the "cannibal monster". And it quoted residents as saying they had seen green plastic bags hanging from his home, with what appeared to be white bones protruding from the top. Hong Kong newspaper The Standard said police discovered human eyeballs preserved inside wine bottles – "like snake wine" – and pieces of what appeared to be human flesh hanging up to dry when they entered Zhang's home. Police feared that Zhang had fed human flesh to his three dogs, while selling other parts on the market, calling it "ostrich meat", according to The Standard.
According to AFP, reports on nonpolitical crimes hardly face restrictions, but cannibalism seems to be a sensitive subject: Almost all last week's reports on the grisly case — which made headlines around the world — were later removed from Chinese websites and online searches for the words "missing in Yunnan" were also blocked. Cannibalism is a particularly sensitive subject in China, where it was practised as a survival tactic during periods of mass starvation, for example in the wake of a failed industrialisation drive launched in the late 1950s. "A large amount of physical evidence and DNA comparisons show that Zhang Yongming from Nanmen village, Jinning county, killed the 11 males," Sunday's report said, citing the ministry of public security.
© Melissa M. Chan for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: crime, murder, public security, serial killer, serial killer. public security
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| China Rape Arrest After Web Anger Posted: 27 May 2012 03:55 PM PDT Amid Sina Weibo's recent rule changes, netizens have spurred the arrest of an ex-official through microblogging. AFP reports: Police arrested an ex-Communist Party official in central China on suspicion of raping at least 10 underage girls, authorities said Sunday, in a case that has sparked a storm of Internet anger. The news prompted thousands of outraged comments from Chinese web users, who are increasingly confident in voicing anger about alleged wrongdoing by officials from China's ruling Communist Party. "Fine party cadre. Good leader of the people," said Wang Delong on Sina's weibo, a microblog similar to Twitter. On the same site, Yawen posted: "An official again!"
According to CNN, Li Xingong has confessed to the crimes: Li Xingong confessed to the crimes during police questioning and will face "swift and severe punishment," according to the Xinhua news agency. Li was the party's deputy director in Yongcheng city, Xinhua said. The report did not offer additional details, such as the victims' ages or where the alleged crimes took place.
See also previous coverage on Sina Weibo and Microblogging, via CDT.
© Melissa M. Chan for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: crime, Henan Province, microblogging, online public opinion, rape, sina weibo
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| Photo: Hang out, by Suri Sun Posted: 27 May 2012 03:49 PM PDT  Hang out |
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