Links » Crème » The Daily Twit – 10/26/12: Gray Lady Down
Links » Crème » The Daily Twit – 10/26/12: Gray Lady Down |
- The Daily Twit – 10/26/12: Gray Lady Down
- Friday Links: Xi Jinping’s wife sings “Laundry Song,” Xinhua reports on the fog, and NY Times remains probably blocked
- CNOOC-Nexen Deal in Canada Takes a Turn for the Weird
- Top 10 Search List (October 26, 2012)
- A Recessionary Tale
| The Daily Twit – 10/26/12: Gray Lady Down Posted: 26 Oct 2012 05:01 AM PDT Today's English-language, foreign China news was dominated by a discussion of . . . English-language, foreign China news. No wait, hear me out. You see, a certain major newspaper from the U.S., often known as the Gray Lady, published an in-depth research piece on the family finances of a certain China government official. This sort of thing is frowned upon here in China, and when the media does something like this, web sites tend to get blocked. For example, a certain well known media group that focuses on business reporting did something similar this past June and ran into the same trouble. So it goes. (Every time I use that line, I have to send the estate of Kurt Vonnegut a dollar.) Throughout the day, there has been a series of foreign media navel-gazing pieces that cited to the original article and talked about relevant news industry topics. All well and good, if you're into that sort of thing. My reaction? Muted, for several reasons (aside from the obvious). For the most part, I have little to say about the article and the government reaction because none of it, from beginning to end, is even a little surprising. I'm not trying to criticize the reporting here; I'm just saying I sort of already knew how this was going to play out (kind of like watching the last half hour of Titanic). So let's move on to some other topics, with the subject of the day being "China domestic issues": Reuters: China's year of political surprises not over yet — For China watchers, there is perhaps more than a little "I hope so" as a subtitle to this headline. No one wants a disruptive political season, of course, but something unscripted is always fun once in a while. Xinhua: Bo Xilai expelled from national legislature — Speaking of unscripted . . . well, you know. This is not at all how 2012 was supposed to go. BBC News: Where are the powerful Chinese women? — Now that we're paying attention to Chinese politics, yeah, where are all the female leaders? Not a new question, and we're still waiting on a satisfactory answer. Personally, I'd also like to know why the U.S. government (better than China on this issue but still not great) hasn't had a female president and why the legislature is such an Old Boys' Club. Sad. Economist: Embarrassed meritocrats — Old (very old) debate over whether China's government is really a meritocracy or something else. And if it is something less than meritocratic, is that idea aspirational (i.e., will China get there some day)? East Asia Forum: Does China know it must change? — No, not more politics. This one is about economic policy, specifically rebalancing the economy away from investment and towards more consumption and the role of the private sector. Bloomberg: Flood of money leaving China — Lots of articles on capital flight these days, both via legal and illegal means. Most of today's news on the subject were reporting on a new study by the organization Global Financial Integrity, and the numbers are really, really big. You can also check out a similar story by Reuters: Dirty money cost China $3.8 trillion 2000-2011. CNN: More Chinese cities need to come clean on air pollution — Not about pollution per se, but about disclosing pollution data. Good day for this article; the Beijing sky looked like split pea soup. China Daily: Plan to halve capital's traffic controversial — Speaking of air pollution, this article was rather depressing. Seems like a) we have to reduce the number of cars on the road, but b) it's just not going to happen in an effective manner. Nice. China Dialogue: Overfishing Pushes 80% of Chinese Fishermen Towards Bankruptcy — This environmental story is a few days old, but I just saw it this morning. Another very important, yet depressing, story. Overfishing is a problem that can be solved by government action (I saw that in Massachusetts in the late 90s), but there needs to be the political will to pass tough laws and then enforce them. {sigh} Morning Whistle: Mental Health Law passed in China — I've been writing about this for several years now, and it's finally been done. Let's hope things like compulsory/forced admissions to mental institutions become a thing of the past. Asia Times: US learns hard lessons of Asia 'pivot' — Will America's new Asia policy mean better engagement in the region or just piss off the PRC? Foreign Policy: The Cyber Trade War — Adam Segal writes that the recent debate over Huawei and ZTE belongs in a greater context, one that deals with the technology infrastructure of both the U.S. and China. China Accounting Blog: VIE Rumors — Paul Gillis has been hearing disturbing rumblings from both sides of the Pacific about VIEs. I haven't written about this yet as these are just rumors, and it's not clear what, if anything is going on. Stay tuned. © Stan for China Hearsay, 2012. | Permalink | No comment | Add to del.icio.us |
| Posted: 26 Oct 2012 04:32 AM PDT
We understand drunken shenanigans have been planned for tomorrow evening on Subway Line 2. Please remember: be a classy drunk, like Bill Murray, and you won't find yourself here. Now links. Nice. "An adult male who expressed astonishment at the recent revelations surrounding Chinese Premier Wen Jiabao's family wealth has been found in a remote Chinese village, anthropologists claim." [China Daily Show] A nice story. "Four or five years after their youngest son was kidnapped, the Zhou family gave up hope of ever seeing him again. They would still regularly visit the police in their hometown of Zunyi in southwest China and ask if there was any news on the case. But with little money or influence, there was slim hope that the missing boy, Zhou Chengliang, would someday be found amid the thousands of children kidnapped each year in China." [Time] Shanghaiist says NY Times, which became inaccessible today, was not censored. Responses: (I found the same with VPN/no-VPN test.) "This seems highly unlikely to me since I had absolutely no problem accessing the site when I used my VPN (which can allow one to 'break through' China's Great Firewall) during the testing. As I soon as I turned off the VPN I could not access the site. Assuming traffic is being directed to the same place in both cases, I don't see how heavy traffic could account for this. Given the other reports that The Times has been blocked, I do not believe I had an unusual experience." [Isidor's Fugue] GreatFire.org says NYTimes is mostly censored, by the way. "I'm not sure what the people at greatfirewallofchina.org are doing. Shanghaiist notes that they report the site still accessible. But the crowdsourced censorship monitor Herdict finds that a lot more reports of NYT being inaccessible from China are coming in. It would be unfortunate if people got the impression that the Times was crying wolf, when in actuality the picture is more complicated than either the Times or Shanghaiist let on." [Graham Webster, Transpacifica] The inevitable. "Ping'an, population 800, may soon be hard-pressed to maintain its rustic charm. Authorities in Gaomi, the municipality that administers Ping'an, plans to build a £67m 'Mo Yan Culture Experience' theme park around the writer's old home, according to the Beijing News." [The Guardian] Now to set a court date… "Disgraced Chinese politician Bo Xilai has been expelled from the country's parliament and stripped of his legal immunity, clearing the way for his prosecution, state media said on Friday. // The announcement follows intense speculation on the fate of the former party boss of the southwestern city of Chongqing in the lead-up to a once-in-a-decade leadership transition set to begin on November 8." [AFP] Xi Jinping's wife performing "Laundry Song" interlude, via China Digital Times: Finally… Country Brand Index's "Future 15" has China at No. 6. [Fast Company] "Man breaks tooth on fried bread, is given more bread in compensation." [Global Times] Memories of the Cultural Revolution. [CNN] Finally, finally…
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| CNOOC-Nexen Deal in Canada Takes a Turn for the Weird Posted: 26 Oct 2012 01:17 AM PDT
That was then, this is now. We've been through a lot of China investment-related news over the past couple of weeks. Companies like Huawei and ZTE, countries like the U.S. and Australia. Of course, I'm not sure how much effect, if any, this all had on Canadian decision makers, but it seems like a reasonable assumption. Running parallel to the CNOOC-Nexen deal was another acquisition of a Canadian energy company by Malaysian oil behemoth Petronas (disclosure: I used to do some IP work for them back in the day), which is a State-owned company. This deal did not appear to be heading for any trouble, and indeed, according to a great report by Reuters, Petronas had already prepared press releases to send out trumpeting a government approval. What happened? You might have already guessed:
Oh, Lordy. You have got to be kidding. At the beginning of all this, it looked like the CNOOC deal would have no problems. Fast forward a few weeks, and not only is it in doubt, but it has contaminated Petronas in Canada. There were a lot of reasons why the Petronas deal went tits up (i.e., it wasn't just worries about CNOOC-Nexen), but if anything, that just makes the Canadian officials look even worse. I won't get into those details since the timeline of the Petronas cock-up has nothing to do with CNOOC, but if you want a good groan, check out the Reuters article. So what must China be thinking about all this? Not only are they pissed off at the U.S. government for Huawei, ZTE, and Sany/Ralls, and worried about how Australia will handle Huawei, but now they have Canada making trouble. It's all rather discouraging, isn't it? If the Nexen deal is ultimately scuttled, I fully expect Beijing to not only be disappointed and bang the usual "Protectionism!" drum, but to accuse Canada of rigging this game from the beginning. With the Petronas decision, Canada is signalling that it has significant doubts about CNOOC; some could argue it has already made up its mind, perhaps prematurely. An approval of the CNOOC-Nexen deal would certainly help to allay some of China's fears on the foreign investment front, but not all of them. At this point, China's SOEs (and some notable private Chinese firms) must feel like they have targets on their backs. One final point, on Canadian foreign investment law. The standard used in these reviews apparently has something to do with whether the deal is a "net benefit" to Canada. If it isn't, the deal can be rejected. I don't know more than that, or what sort of analysis the law requires when determining what constitutes a "net benefit." Quite a difference from the U.S. national security review though, huh? Seems like a "net benefit" standard allows a country to sneak reciprocity concerns into the process, among other factors. I also wonder how this sort of standard squares with WTO law, but that's an issue for another day. Now we just need to wait and see what the Canadian government does next. © Stan for China Hearsay, 2012. | Permalink | No comment | Add to del.icio.us |
| Top 10 Search List (October 26, 2012) Posted: 25 Oct 2012 11:59 PM PDT
2) 江西省副省长(Jiāngxīshéng fùshéngzhǎng, Vice Governor of Jiangxi Province) – A group of passengers in Guangzhou believed that the delay of their flight was due to the late arrival of a VIP, the Vice Governor of Jiangxi Province and refused to board the plane after they heard an airline staff saying the plane is not going to take off unless all the VIPs have arrived. The airline said it was only a misunderstanding and the vice governor had arrived at the VIP waiting room 20 minutes early and the delay was due to airport traffic control. Chinese story here. 3) 张又侠父亲(Zhāng Yòuxia fùqīn, Zhang Youxia's father) – Zhang Youxia was named to lead one of People's Liberation Army's key departments, General Armaments Department, in a major reshuffle. Zhang is the son of Zhang Zongxun, one of the first PLA generals. English story here. 4) 温岭虐童幼师(Wēnlíng nǜetóngyòushī, child-abusing kindergarten teacher from Wenling) – A kindergarten teacher from Wenling, Zhejiang Province posted online photos of her mistreating kids. The 20-year-old teacher and her colleague who shot the video were detained by local police for disturbing social order and the school was going to remain closed for a few days. Chinese story here. 5) 耐克中外双重标准(nàikè zhōngwài shuāngchóng biāozhún, Nike has double standards for the Chinese market) – Nike has been fined 4.87 million yuan ($780,000) by the BeijingAdministration for Industry and Commerce for having a double standard for the Chinese market. A model of Nike basketball shoes that sell for 1,299 yuan ($208) — the same price as in other markets — did not have two cushions as advertised and as sold elsewhere. English story here. 6) 李实 (Lí Shí, Li Shi) – Li Shi, or Mao Yuanxin, is the nephew of Mao Zedong. Li recently appeared on a photo that was taken during a ceremony marking the 60-year-aniversity of Mao's proposing of the South-North Water Transfer Project. Chinese story here. 7) 高速路贞子广告牌(gāosùlùzhēnzíguánggàopái, highway Zhenzi billboard) – A property billboard featuring half of a woman's face has recently attracted much criticism for being a road hazard. Zhenzi is the character from the classic Japanese horror movie "The Ring." Imagine driving past it on a foggy day. Chinese story here. 8）陈怡婷(Chén Yítíng, Chen Yiting) – Chen is the girlfriend of a former Taiwanese singer. Chen jumped off the roof of a 12-story building two days ago, leaving a note and voice message accusing her boyfriend of getting another girl pregnant, more than once. Chinese story here. 9) 裸体京剧(luótíjīngjù, naked Peking Opera) – A collection of photos featuring near-naked performers in Peking Opera costumes have sparked much debate. It is the work of a professional photographer. Many argued that they don't see any artistic value other than pure pornography. Chinese story here. 10) 哈尔滨水污染(Hā'érbīn shuíwūrán, Harbin water pollution) – The running water in certain areas of Harbin was found to be muddy yesterday. Local authorities said the recent move of two pipes stirred up some water scale in the pipeline and the water will be clean again by today. Chinese story here.        |
| Posted: 25 Oct 2012 09:25 PM PDT
Once upon a time, there was a happy and prosperous kingdom called El Dorado. The climate was mild, the forests gave an abundant supply of unicorn and other game, and in the fields, the genetically-modified corn grew tall and pest free. The people were a contented lot, by and large, and while they may not have loved dour old King PJ, they respected his administrative and management skills. But then one year, the West Wind blew through El Dorado, dumping cold rain on the kingdom for days on end. Trade ground to a halt, the genetically-modified corn was destroyed and, as everyone knows, unicorns can't swim. The laobaixing cried out to King PJ for a solution. And so the King called in his Privy Council for advice. "How do we get this kingdom back on its feet?" he challenged his advisors. "No worries, sire," exclaimed Prime Minister Blatheron. "The pagan tribes along our southern frontier have been quiet for a generation. We can slash our defense budget by discontinuing patrols along The Wall and decommissioning half the army. We plow the savings back into the Kingdom to tide us over until these dark times pass." Without a second thought, King PJ gave the green light to Blatheron's plan, but not six weeks later, the savage Victs and Flagrantes, screaming their terrifying war cry "There Can Be Only One!" invaded, forcing an unprepared El Dorado to sue for peace and allow the marauding tribes to annex the Sudetenland. The Kingdom's fiscal situation was dire, and King PJ once again called in his advisors. This time, Grand Vizier Brent, an efficiency expert from Slough, spoke up first. "I've drawn up a redundancy plan, your Highness. Twenty percent cuts in personnel kingdom-wide, subject to your approval of course." Brent handed King PJ a thick vellum scroll filled with names. Without a second thought, King PJ gave the green light to Brent's plan, but not six weeks later, problems arose. Quality control in the royal kitchens suffered after the head cook was sacked, and seven members of the Chancery succumbed to food poisoning. The Chamber of Commerce complained bitterly to the King after cuts in the royal constabulary led to a sharp increase in property crimes. And perhaps worst of all, the closing of the royal courts had led to creditors taking matters into their own hands; the incidence of broken legs and kneecaps had skyrocketed. El Dorado was in disarray, and King PJ, in a panic, did what he always did in an emergency: he went to the castle's tailor for a new set of robes, knowing this would cheer him up. The King was a bit of a clothes horse, you see. Arriving at the tailor's workshop, King PJ was dismayed to see his tailor nailing boards on the windows and locking the door. Demanding an explanation, the tailor told the King: "After you fired half of the staff, demand for my wares plunged. I'm busted. Frankly, sire, I'm surprised that you approved such a hasty and ill-conceived economic recovery plan. Everyone knows that you must measure twice and cut once." _______________________ Recessions can lead management into making very poor, knee-jerk decisions. A common problem for foreign companies in China is to import austerity plans from other business units abroad, assuming a "one size fits all" approach. Take for example a typical layoff plan. During downtimes, when labor markets are usually slack, it may make sense to furlough part of your staff, knowing that it should be relatively easy to recruit when business picks up again. This has certainly been the case in the United States and many parts of Europe in the past few years. However, although China's economy is slowing down, the labor market has shown surprising resiliency. Companies in China that adopt a cookie-cutter approach to downsizing may realize, a year or two later, that they will have to pay a premium to bring back experienced staff. Obviously targeted cuts may minimize this problem. If instead of firing his head cook, King PJ had sacked Bojangles, his jongleur, or Schtickle, his fool, he could have avoided those costly wrongful death lawsuits from the families of deceased Chancery officials. Legal budgets are often savaged during hard times, and while I would not presume to argue for blanket protection of in-house counsel, there are some choices that are better than others, particularly in the China market. First, business disputes are often allowed to fester. Surely it does not make sense to disrupt your joint venture in the middle of a recession by taking your partner to court, does it? Actually, it might. Not only is it a bad idea to allow business disputes to worsen over time, but during a slowdown when your staff is not working 25/8 filling orders, the effects of a management fight might be somewhat lessened. Is it preferable to disrupt the company when business is booming? Second, putting off registration and enforcement of intellectual property rights can be short-sighted. These processes often require several years to complete as it is, and any delay might mean that even after the recession is over, the company will still be without enforceable IP for a long time. Similarly, the decision to temporarily overlook infringement can be a disaster, allowing the bad guys to consolidate their market share and do lasting damage to brands in the meantime. Third, I would reiterate generally what I said in my previous post: The DIY China Lawyer. There are many things that can be done in the name of cutting costs, but each and every one has potential risks. Cutting corners on contract review and due diligence, for example, may be very attractive in the short term when budget pressures loom large, but eventually conditions will improve, and those poor decisions may impede the rebuilding process. Hard choices need to be made during economic slowdowns, but these should not be undertaken without considering negative consequences and local market conditions. Think twice and cut once. © Stan for China Hearsay, 2012. | Permalink | No comment | Add to del.icio.us |
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