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News » Society » Sex, lies and videotapes: A year in Chinese microblogs


Sex, lies and videotapes: A year in Chinese microblogs

Posted: 28 Dec 2012 04:17 PM PST

A year of scandals exposed on Chinese microblogs

China’s Hunger for Fish Upsets Seas

Posted: 28 Dec 2012 10:23 AM PST

Source: Wall Street Journal By Chuin-Wei Yap and Sameer Mohindru

China's growing hunger for seafood is testing relations with other countries and worrying foreign officials and scientists over the potential damage its massive fleet could do to global fishing stocks.

In the latest example, Argentina said on Wednesday that it had captured on Monday two Chinese fishing vessels that it said were illegally fishing in its waters. Officials said Argentina's coast guard boarded the ships after firing warning shots to prevent them from fleeing to international waters, and that the vessels were carrying 10 metric tons of squid and fish.

Argentina authorities say the Chinese ships were intercepted off Patagonia, two nautical miles inside Argentina's 200-mile exclusive economic zone, on Monday. A federal judge is questioning the ship captains, officials said. In a statement, China's Foreign Ministry said it is trying to verify the facts of the case.

The episode comes as China's fishing boats increasingly find themselves embroiled in both cross-border and commercial disputes. Chinese ships fish in both international waters and under bilateral fisheries agreement in the waters of other nations. They work for largely private companies or for themselves, and aren't generally directed by Beijing.

However, in Asian waters, fishing boats have become a proxy for China's sovereign reach in largely territorial spats. In cases farther afield, its fishing boats have been entangled in accusations of overfishing and harming local economies.

In a review earlier this year, a congressional agency set up to explore the national-security implications of U.S.-China economic relations said China's growing fleet has "global implications."

In recent weeks, South Korea seized a Chinese boat and detained 24 sailors for allegedly illegally fishing in the Yellow Sea. Vietnam has accused Chinese fishing boats of cutting its gas-exploration cables at sea. Chinese fishing boats have also sailed around disputed islands known as Senkaku in Japan and Diaoyu—which means "fishing" in Chinese—in China, contributing to worsening relations with Tokyo.

Official data project that China, the world's largest seafood consumer, is on track to produce more than 60 million tons of seafood by 2015, up from 53.7 million tons two years ago. Some foreign officials question Chinese catch reports and believe total production may be even higher.

Investment bank Rabobank estimates that seafood imports to China—where consumers have for centuries considered fish beneficial to the brain—will total $20 billion by the end of the decade from around $8 billion currently.

Beijing has big plans for expanding its fishing armada to feed that appetite, aiming to increase its long-range fishing fleet by 16% by the end of 2015 to about 2,300 ships compared with 2010. By comparison, the U.S. distant-waters fishing fleet totals around 200 ships.

"China, in particular, uses the resources of its five maritime security agencies to enforce its claims in disputed waters, by escorting Chinese fishing vessels and enforcing seasonal fishing bans on foreign vessels," Commissioner Daniel Slane said at a hearing in January. "These civilian fleets allow Beijing to maintain a maritime presence in disputed waters without having a consistent or overt naval presence."

China's Foreign Ministry referred questions to the Agriculture Ministry, which didn't respond to faxed questions and declined to comment in a telephone call. China has said it has sovereignty over the South China Sea and the Senkaku islands and therefore has the right to escort its fishing vessels there.

The territorial issues and environmental concerns echo the tensions China has faced in a number of industries, from energy to mining to agriculture, as it looks for raw materials to feed its growth. China has moved aggressively in recent years to purchase resources abroad to bolster its energy, minerals and food security, adding needed investment to increase global supplies but raising worries in Washington and elsewhere about China's sway.

China's hunger is growing at a time when around 87% of global fisheries are seen to be at full exploitation, overexploited, or depleted, according to the United Nations' Food and Agriculture Organization. China like other nations has signed international agreements that allow it to fish in global waters, and some fishing experts have praised Beijing for beefing up its statistics on fishing in some areas and for raising more fish in domestic farms.

Still, a European Commission report this year said China reported just 368,000 tons of its 2010-2011 catch from the high seas compared with an estimated actual haul of 4.6 million tons.

Africa—where local governments often have few resources to police opaque bilateral water-access agreements to make sure vessels pay for what they catch—accounts for more than two-thirds of China's long-haul harvest, the report said.

The situation is made more murky by a lack of regulation in China, said Tabitha Grace Mallory, an industry expert with the Johns Hopkins School of Advanced International Studies. "One of the big problems on China's domestic front is lack of capacity and resources in the fisheries bureau, and less control and law-enforcement ability over increasingly private Chinese fishing companies who disobey rules," she said.

China's fishing vessels are being drawn ever farther afield because overfishing in neighboring waters, including around North Korea, Indonesia and Myanmar, has led to falling production in Asian waters, according to an essay from China's agriculture ministry.

In comparison, the ministry said, the catch from West Africa rose 14% in volume and 41% in value last year from 2010. In Mauritania alone, the catch rose 51% in volume and 66% in value over the period, it said. In Morocco, catch values rose 50% despite a smaller volume due to a shortened fishing season.

Peru, a major source of seafood for China, has slashed its global commercial fishing quota for anchovy during the Nov. 22-Jan. 31 season by 68% to a 25-year low of 810,000 tons because of depleted stocks. Anchovy is processed into fishmeal, of which Peru is the largest exporter and China the main buyer.

"There is still a large scope to expand Peru's trade with China in future, but we also want to conserve marine resources," said Peru's ambassador to China, Gonzalo Gutiérrez.

China Cracks Down on Food Safety

Posted: 28 Dec 2012 10:18 AM PST

Source: Wall Street Journal By Colum Murphy

SHANGHAI—Authorities in China's political and financial capitals plan crackdowns on companies that violate food-safety regulations, after scrutiny of drugs given to locally served chickens.

The crackdowns in Beijing and Shanghai mark a new effort by local authorities to bolster food safety in a country increasingly worried about what it consumes. But analysts question whether such measures will be effective in changing China's slack attitude to food safety.

In a statement posted on its website and dated Thursday, the Shanghai Municipal Food Safety Committee said food companies found engaging in any of 11 types of harmful food-safety practices would be blacklisted and prevented from engaging in the food business, and barred from receiving subsidies from the government or benefiting from preferential government policies.

The harmful practices would include the production of food from inedible substances or dangerous materials, or using prohibited food additives. Executives of the companies would also face censure under the new rules.

Shanghai Municipal Food Safety Committee officials weren't available for comment.

Separately, the state-run Xinhua news agency later Thursday said Beijing would soon introduce its own tighter food-safety laws. Food producers or vendors will be banned from the sector for life if they produce or sell unsafe food, it said, while executives of companies that commit violations won't be allowed to operate in the industry for five years. It also bans the reuse of discarded oil, called gutter oil, a persistent problem in China.

Though the Shanghai notice didn't mention it, the city has been in the food-safety spotlight in recent weeks following a report by state-run China Central Television that alleged suppliers to Yum Brands Inc. —owners of the KFC chain—had improperly used antibiotics and questioned the company's food-safety practices.

Subsequent tests by the Shanghai Food and Drug Administration of samples of raw chicken taken from a Yum facility in Shanghai found the KFC arm had complied with government limits on antibiotics. But the authority said more tests were needed after the discovery of what it called suspicious levels of an antiviral drug. While the antiviral drug—amantadine, commonly used to fight influenza—currently isn't limited under Chinese law, authorities said they wanted to consult with experts to create a standard for its use in agriculture.

KFC has previously said it is committed to food safety and that it is cooperating with authorities. It referred questions to its U.S. headquarters, and people there weren't immediately available for comment.

China has had many food-safety scares in recent years. Many analysts blame the country's highly fragmented agricultural sector, which they say makes monitoring of farming practices almost impossible.

Some food-safety experts questioned the effectiveness of the latest approach proposed by the Shanghai authorities. "Safe food depends on production, not on supervision," said Wu Yongning, chief scientist of the China National Center for Food Safety Risk Assessment. "All that's needed is credibility—credible people will produce safe food."

Polls of Chinese public sentiment show increasing worries about food after scandals involving everything from dairy to eggs to gelatin capsules. The issue galvanized the public in 2008 when dairy producers were discovered to have added the industrial chemical melamine to baby formula, killing six infants and sickening 300,000 others.

"The challenge has been for regulators to catch the violating companies before the companies' practices become a national food safety and media crisis," said James Rice, chief executive of CSM China, a unit of Dutch bakery-products supplier CSM. Calling the new law an "additive," Mr. Rice said, "China's enforcement agencies have enough authority to enforce the law, and we have seen them resolve food safety crisis issues effectively in the past." But he adds that "regulators are stretched to the limit of their manpower, given that there are literally hundreds of thousands of small food producers in the country."

In the U.S., the Food and Drug Administration announced new rules in April to reduce the use of antibiotics. The FDA estimates farm animals consumed 29.1 million pounds of antibiotics in 2010, up from 28.7 million pounds a year earlier, although animals are tested to ensure there are no residues in meat.

China tightens loophole on hiring temporary workers

Posted: 28 Dec 2012 09:48 AM PST

Source: Reuters

BEIJING (Reuters) – China amended its labor law on Friday to ensure that workers hired through contracting agents are offered the same conditions as full employees, a move meant to tighten a loophole used by many employers to maintain flexible staffing.

Contracting agencies have taken off since China implemented the Labor Contract Law in 2008, which stipulates employers must pay workers' health insurance and social security benefits and makes firing very difficult.

"Hiring via labor contracting agents should be arranged only for temporary, supplementary and backup jobs," the amendment reads, according to the Xinhua news agency. It takes effect on July 1, 2013.

Contracted laborers now make up about a third of the workforce at many Chinese and multinational factories, and in some cases account for well over half.

Some foreign representative offices, all news bureaus and most embassies are required to hire Chinese staff through employment agencies, rather than directly.

Under the amendment, "temporary" refers to durations of under six months, while supplementary workers would replace staff who are on maternity or vacation leave, Kan He, vice chairman of the legislative affairs commission of the National People's Congress standing committee, said at a press conference to introduce the legislation.

The main point is that contracting through agencies should not become the main channel for employment, he said, acknowledging that the definition of backup might differ by industry.

"In order to prevent abuse, the regulations control the total numbers and the proportion of workers that can be contracted through agencies and companies cannot expand either number or proportion at whim," Kan said.

"The majority of workers at a company should be under regular labor contracts."

Although in theory contracted or dispatch workers are paid the same, with benefits supplied by the agencies who are legally their direct employers, in practice many contracted workers, especially in manufacturing industries and state-owned enterprises, do not enjoy benefits and are paid less.

Employment agencies have been set up by local governments and even by companies themselves to keep an arms-length relationship with workers. Workers who are underpaid, fired or suffer injury often find it very difficult to pursue compensation through agencies.

China would increase inspections for violations, Kan said, including the practice of chopping a longer contract into several contracts of shorter duration to maintain the appearance of "temporary" work.

Korean electronics giant Samsung Electronics Co. said in November that it would require its 249 supplier factories in China to cap the number of temporary or contracted workers at 30 percent of regular full-time employees.

It announced the corrective measure after Chinese labor activists reported violations of overtime rules and working conditions as well as under-age workers at Samsung suppliers. Samsung says its own audit did not find workers under China's legal working age of 16.

The bigger Macau gets, the better for Las Vegas

Posted: 28 Dec 2012 09:45 AM PST

Source: Las Vegas Sun By Steve Friess

MACAU — We blazed over the causeway in the thick, constant evening fog until suddenly I was surrounded by more light than I could digest. It was disorienting and anxiety-inducing, an over-stimulating visual feast that jammed the circuitry in my head and accelerated my respiration.

For the first time I understood what it must be like to witness the fabulous Las Vegas Boulevard for the first time. No, I wasn't on that Strip: I was cruising its steroidal kid brother, a place of shocking change that takes place so quickly it makes even pre-recession Las Vegas seem stagnant. This is the street from whence profits come so fast and furiously that they prevented the bankruptcy of at least two of Nevada's biggest corporations during the depths of its economic meltdown.

I was on the Cotai Strip in Macau. And if I had long since lost my ability to be bowled over by Las Vegas, that first — and second and third — breathless ride along a perfect, massively wide fresh ribbon of asphalt in this most unlikely place made the enormity of a development like MGM Resorts International's CityCenter feel as if it were a very fancy doll house.

This is not a travel essay, and here's why: Nobody expects you to ever go to Macau. There's no marketing machine trying to excite you about the idea of flying more than 12 hours from the West Coast of the U.S. to lounge by the (polluted) South China Sea. Also, they don't need you. I was told by a bellboy that when he sees Caucasian guests, he assumes they must be evaluators from the Forbes or Michelin travel guides.

And yet, if you care at all about modern Las Vegas, you have to understand — if not care about — what has happened in just the past eight years or so in this previously disregarded and anonymous part of China. It is, simply put, the first wholesale export of what we know to be Vegas, right down to Las Vegas Sands Chairman and CEO Sheldon Adelson actually filing a request to trademark the term "Asia's Las Vegas."

You've probably heard the numbers about Macau, but they bear repeating. Its casinos field more than $33.5 billion a year, five times more than Las Vegas. These gambling dens are vast plains of baccarat tables and salons; Venetian Macao Resort Hotel — a supersize replica of the Las Vegas original with three canals rather than just one — has the largest casino floor in the world at 550,000 square feet. That's more than double that of Las Vegas' MGM Grand. There are 800 table games there, a good number of which are baccarat; MGM Grand has about 140, including its poker tables.

Macau is the only place in China that allows legal betting, and that's because gambling has flourished there since the 1800s, under colonial overlord Portugal. It became such a key piece of the economy there that Beijing couldn't pull the plug when it regained control in the late 1990s. Instead, the central government decided to try to disinfect the corrupt and violent destination of oppressive, crammed and unsafe casinos that had reigned since the 1960s — think Las Vegas during the mob era, minus the glamour. The handful that existed, led by a few gambling giants such as Casino Lisboa, were owned by Hong Kong billionaire Stanley Ho, a monopolist who also held a stranglehold over the privatized ferry system, one of the few means of getting to the Macanese peninsula. (There is now a land-based border crossing that is a manic scene of mainland Chinese people queuing up to cross over for gambling outings, but prior to the Chinese repossession of Macau, citizens rarely were permitted to go.)

The government opened up Macau to bids from non-Chinese companies for casino concessions, or licenses. Among those that won them were Las Vegas Sands and Wynn Resorts; MGM Resorts International, then named MGM Mirage, was forced to enter into a partnership with Ho's daughter Pansy to get a piece of the action. Each concessionaire spent billions on resort construction on land the government could seize at any time, and they'd each pay a 35 percent tax rate on gambling profits. Still, Adelson, Steve Wynn and others decided it was worth it because of one simple fact: While Las Vegas is within a five-hour flight to 300 million people, Macau is within a five-hour flight to nearly 3 billion people. That's almost half the world's population, at least 1.3 billion of whom have been starved for centuries of the ability to gamble legally despite a strong cultural inclination to play games of chance.

"There is no gambling addiction in China," Adelson once told me. "It's just part of their culture."

The first time I visited Macau was in 2001. My lasting recollection was meandering into Casino Lisboa, Ho's flagship, and leaving horrified. Men crowded 10 deep around every table, every one of them smoking and barking angry bets; I still have no idea how anyone kept track. In 2004, Adelson opened his casino-only Sands Macao — opting for the alternate spelling to seem authentic — and the Wynn tower opened with 600 rooms in 2006.

That year, Macau surpassed Las Vegas as the world's top gaming destination. And that was before Cotai.

The original Macau was a peninsula now best likened to Las Vegas' historic downtown. After the introduction of Sands, and then the 600-room MGM Macau in 2007, millions of new gamblers quickly became accustomed to a more civilized gaming atmosphere. Ho built Grand Lisboa Macau to compete.

Meanwhile, Cotai was on the horizon. Wynn and Adelson were at the height of their legendary rivalry, as Adelson became the first of the two to commit to building there. Although Cotai is isolated, Adelson plowed ahead and opened the Venetian in 2007, effectively blasting the roof off profit records for casinos. Five years later, Cotai boasts five upscale casino-resort and resort-hotel complexes with more than 10,000 rooms and suites. After witnessing Adelson's success, Wynn Resorts (which had added an adjacent Encore tower in 2010) landed its license to build on Cotai, what Wynn is promising will be his crowning achievement and "the most innovative, beautiful resort the world has ever seen." It is expected to open in 2015.

Across new Macau, but especially on Cotai, the imprimatur of Las Vegas is simply everywhere. It's not just the enormity of each structure, with their porte cocheres and contemporary casino décor, replica marquees and same-name restaurants. There's even some Vegas cheese — in the form of all-you-can-eat buffets, gargantuan aquariums filled with rare fish, and free indoor hourly laser and mechanical-statue shows. Even slot machines, an afterthought in the pre-Sands version of Macau, get sizable real estate with a variety of games as well as tournaments, although some slots feature the number eight instead of seven in tribute to the Chinese belief in its lucky-number prowess. And just like in Las Vegas, other superstitions are catered to: Oftentimes, there's no fourth floor because the Chinese character for four sounds similar to the character for "death" in a different tone.

Also mind-boggling: The shopping is such madness that the Louis Vuitton and Prada shops at Wynn Macau have waiting lines, lest the stores reach their capacities.

But not everything has proven transferable: When Wynn Macau opened, for instance, it had a Tryst nightclub, but it failed to draw a crowd (except perhaps the wrong one), so the space is now a restaurant. Precious few big-name chefs have made the pilgrimage to Macau aside from Joël Robuchon. Entertainment, too, has been a real puzzle. One-off concerts by Lady Gaga or Cantopop stars do gangbusters, but the Venetian Macao shuttered its Cirque du Soleil production, "Zaia," this year. Nearby, however, Franco Dragone's House of Dancing Water — at $250 million, it's said to be the most expensive live production ever staged indoors — is killing it.

In Macau, gambling is really the thing — and it's a theater all its own. The casino floor can be an exciting, noisy place, but the high-roller action takes place in the countless VIP salons on every floor throughout these skyscrapers. What's more, most of those patrons are brought into Macau not by the properties themselves but by what are known as "junket operators," private services that market to mainland Chinese people and potential players across Southeast Asia. This is, by far, the most controversial and baffling element of the Macau boom. Gambling debt is not legally enforceable anywhere in China, so the casinos don't provide lines of credit. Instead, it is outsourced to the junket operators, who essentially lease portions of the casinos and provide capital to players. How that debt is collected, given that there's no force of law, is an ongoing mystery; it is assumed strong-arm, Mafia-style tactics come into play.

Yet, that is the state of play over there, and the American corporations see such arrangements as the price of doing business. They eagerly forge ahead, mesmerized by the idea that Macau hasn't even reached its potential. Their excitement is understandable; MGM Resorts International and Las Vegas Sands both teetered on the brink of bankruptcy in 2009, held up only by the torrent of cash flowing in from across the Pacific.

"There is so much demand, I could build 10 Las Vegases over there," Adelson once boasted to me.

And he might just do that.

Have You Heard…

Posted: 28 Dec 2012 09:38 AM PST

Have You Heard…


Defying Mao, Rich Chinese Crash the Communist Party

Posted: 28 Dec 2012 10:31 AM PST

Source: Wall Street Journal By James T. Areddy and James V. Grimaldi
When the Communist Party elite gathered last month to anoint China's new leaders, seven of the nation's richest people occupied coveted seats in Beijing's Great Hall of the People.

Wang Jianlin of Dalian Wanda Group, worth an estimated $10.3 billion and the recent buyer of U.S. cinema chain AMC Entertainment Holdings, took one of the chairs. So did Liang Wengen, with an estimated fortune of $7.3 billion, whose construction-equipment maker Sany Heavy Industry Co. competes with Caterpillar Inc. Zhou Haijiang, a clothing mogul with an estimated $1.3 billion family fortune, also had a seat. As members of the Communist Party Congress, all three had helped endorse the new leadership.

For years the Communist Party in China filled key political and state bodies with loyal servants: proletarian workers, pliant scholars and military officers. Now the door is wide open to another group: millionaires and billionaires.

An analysis by The Wall Street Journal, using data from Shanghai research firm Hurun Report, identified 160 of China's 1,024 richest people, with a collective family net worth of $221 billion, who were seated in the Communist Party Congress, the legislature and a prominent advisory group called the Chinese People's Political Consultative Conference.

China's legislature, called the National People's Congress, may boast more very rich members than any other such body on earth. Seventy-five people with seats on the 3,000 member congress appear on Hurun Report's 2012 list of the richest 1,024, which Hurun says it calculates using public disclosures and estimates of asset values. The average net worth of those 75 people is more than $1 billion.

By comparison, the collective wealth of all 535 members of the U.S. Congress was between $1.8 billion and $6.5 billion in 2010, according to the most recent analysis of lawmakers' asset disclosures by the nonpartisan Center for Responsive Politics.

China has been grappling of late with political and social tension over its murky policy-making process and its growing income disparity. The party has been especially sensitive this year during the leadership change about revelations about fortunes amassed by the offspring of political leaders, known as "princelings," by leaders of state businesses and by other politically connected people. Many ordinary Chinese blame high prices, poor quality food and pollution on guanshang guojie—meaning, roughly, officials in bed with businessmen.

As political families move into business, private tycoons are entering the political sphere—although precisely what is driving that isn't clear. Other Chinese business leaders have cultivated relationships with party chiefs without entering politics themselves. But the Journal's analysis showed that people appearing on Hurun's rich list who also served in the legislature increased their wealth more quickly than the average member of the list.

Seventy-five people who appeared on the rich list from 2007 to 2012 served in China's legislature during that period. Their fortunes grew by 81%, on average, during that period, according to Hurun. The 324 list members with no national political positions over that period saw their wealth grow by 47%, on average, according to an analysis the firm ran for the Journal.

It is difficult to pinpoint precisely how holding political positions advances the business interests of the wealthy, if at all. They may do better because of their political positions, or, conversely, they may owe their positions to their business success. There are a multitude of reasons for Chinese companies to be on good terms with political leaders. Chinese companies routinely do business with the government, borrow money from state banks, even negotiate their tax bills with local authorities.

The business card of Mr. Zhou, the 46-year-old president of family owned Hongdou Group Co., lists 10 political positions. The clothing magnate said in an interview that his political positions give him opportunities to mix with "diverse elites"—businessmen, politicians and military officers.

"It makes me feel good to participate in this kind of exclusive group," he said. Every time he gets a chance, he said, he prods state leaders to cut taxes, noting that he personally pressed Premier Wen Jiabao to extend technology tax breaks to firms building brands. It is unclear whether such tax breaks were extended.

In the days of Chairman Mao Zedong, capitalists were considered enemies of the state. Some business owners were persecuted and most enterprises became government property.

That changed in the 1980s and in the early 1990s when paramount leader Deng Xiaoping was said to have declared that "to get rich is glorious." A 2002 constitutional amendment established that the Communist Party henceforth would consider valid the contributions of private enterprise, therefore providing a place for private entrepreneurs in the party system.

These days even lesser-known multimillionaires such as property developer Shi Yingwen of Guangxi Ronghe Co., shirt magnate Li Rucheng of Youngor Group Co. and wig queen Zheng Youquan of Henan Rebecca Hair Products Inc. match Chinese mayors and generals in political rank. Self-made men and women serve in the legislature alongside party-appointed chairmen of state oil companies and banks.

China's National People's Congress bears little resemblance to its U.S. counterpart. Legislators aren't popularly elected but are nominated by party institutions, which sometimes vote internally on nominees. Small groups of legislators write laws in consultation with top party officials. The broader legislature invariably passes them.

Political analysts sometimes describe China's legislative seats as ceremonial because of the limited power of officeholders. Nevertheless, Dow Jones Watchlist, a sister publication of the Journal that provides financial institutions with a global database of government officials, characterizes more than 150 people on Hurun's Rich List as "politically exposed persons" under international standards. Global anti-money-laundering conventions call on international banks to scrutinize transactions involving such individuals, their families and close associates.

Hongdou Group's Mr. Zhou was invited into the party congress before his father retired from the legislature in 2008. Over the past 30 years, his family has gobbled up farmland near Wuxi to expand the company. The facilities now include more than 100 Hongdou-owned factories, including one of Asia's biggest suit factories—and a hall honoring Communist leaders.

Hongdou was the first private company in China to win approval to launch a financing arm, and top party officials have supported its industrial push into Cambodia. Party leaders have adorned Zhongnanhai, the party's Beijing leadership compound, with trees from Hongdou's horticultural division, bolstering its claims that the plants provide therapeutic benefits.

In conversation, Mr. Zhou drops the names of top leaders, including Premier Wen, incoming president Xi Jinping and current President Hu Jintao. A quote from Mr. Wen adorns a full wall of Hongdou's headquarters. Mr. Zhou says of his political activity: "I'm just trying to act as a representative for private entrepreneurs."

Guo Guangchang, another member of the National People's Congress, spent 20 years building China's biggest private financial conglomerate, Shanghai-based Fosun Group. His fortune is estimated at $2 billion.

In March, he met with Mr. Xi, who was named China's next leader last month. He pressed for expanded protection in China's courts for insurers, more government investments into private-equity firms and increasing the scope of lending by nonbanks, according to a summary of his presentation on the company's website. "Guo Guangchang expressed hope for more substantive initiatives in the liberalization of financial services and in reducing the tax burden of enterprises and individuals," the website said.

Although it isn't clear whether Mr. Guo's efforts led to official changes, the fact that state media reported him airing views directly to Mr. Xi suggests that officials looked upon them favorably.

Mr. Guo and more than a dozen politically connected business leaders contacted by the Journal, including those mentioned in this story, either declined to comment on their government posts or didn't respond to requests for comment. Questions about the political activities of the wealthy sent by the Journal to the National People's Congress and other Chinese government and party organizations elicited no response.

Beginning as a tailor's apprentice for his father in the 1970s, Gao Dekang built an apparel business and an estimated net worth of $2.2 billion. He joined the National People's Congress in 2003. A year later, China's foreign ministry certified jackets made by his company, Bosideng International Holdings Ltd., as "national diplomatic gifts." Russia's Vladimir Putin was one of the foreign dignitaries to receive one.

Mr. Gao has hosted President Hu at his home, according to his authorized biography. Bosideng's latest annual report says the company received "unconditional government grants" of about $3.9 million in the year ended March 31, which it said reflected its contributions to the development of local economies.

Chinese People's Political Consultative Conference, or CPPCC, is an advisory council to the Communist Party and the legislature. With about 2,200 members, it is intended to be representative of China's overall population, including those who don't belong to the party. In practice, its function is to support government initiatives.

The CPPCC is becoming more like a Chinese version the U.K.'s House of Lords—weaker than the British version but richer. Seventy-four members appeared on Hurun's rich list in 2012. The average wealth of those 74 was about $1.45 billion.

In a recent interview with the Journal, one CPPCC member criticized the influx of business people, saying she had witnessed "shameless" appeals by CPPCC members to Mr. Xi, China's incoming president. At a small gathering in March, she said, a media tycoon and an infrastructure developer had pressed Mr. Xi to use his muscle to fix their business problems.

Member Chen Siqiang is the chief executive and controlling shareholder of New Oriental Energy & Chemical Corp.,a fertilizer company based in Henan. In late 2010, the company, whose shares were then listed in the U.S. on the Nasdaq Stock Market, faced a cash squeeze, according to a filing made to the Securities and Exchange Commission at that time. In the filing, Mr. Chen asserted: "I will also use my political influence as a member of the National Committee of CPPCC to coordinate with government agencies and financial institutions to enforce government support."

About three months later, New Oriental announced the government in its home region had arranged $3.3 million in new loans. Nasdaq delisted New Oriental in 2011 after its capital fell below required thresholds.

The way political appointments are made is a murky business in China, and the process can involve currying favor with more-senior officials. In recent years, prosecutors in China have accused various officials of bribing their way into government positions and have jailed some of them for such activity. None of the wealthy individuals named in this story has been accused of such activities.

A Shanghai-based consultant said in recent interviews with the Journal that securing an appointment can involve a sophisticated campaign. He said he had devised and executed a "five-year plan" to try to gain political positions for an Internet-game tycoon. "Most people think you just have to bribe them, but it is actually quite subtle," he said about efforts to persuade government officials.

In 2007, the consultant prepared a 14-page political primer for his client and mapped alliances between certain Beijing officials and the provincial government. The consultant said he added evidence to the company's website that it was a "good citizen" that paid taxes and donated money. He said he staged a fake Communist Party meeting at the company in order to take photos.

The consultant hosted a dinner for the assistant to a senior Beijing official. During a foot massage, he said, the secretary hinted that a modest Chinese painting in traditional style might make an acceptable gift to the boss. The consultant said he bought one for around $3,000 and sent it anonymously to the official's assistant in Beijing. He mailed the certificate of authenticity separately to make it clear the gift was from his client.

His client was hoping to be appointed to the Communist Party Congress. In the end, he got a lesser post: a seat in a provincial CPPCC. But in the process, the consultant said, he got potentially valuable information about provincial government plans for an economic zone and technology subsidies, which the consultant claimed were worth more than the campaign's $320,000 cost.

Mr. Zhou, the clothing magnate, concedes that some people buy their way into power but calls such episodes "isolated incidents." He says his fellow entrepreneurs are joining political bodies "to keep pace with the direction for the country's development. If what I'm doing complies with the government principles, then every government official will support me."


10 killed in packed van plunge

Posted: 28 Dec 2012 09:00 AM PST

AT least 10 people, including five children, died when an overloaded van crashed down a mountain ravine in the Guangxi Zhuang Autonomous Region yesterday morning.

There were 20 people on board the nine-seater van when it plunged more than 50 meters at about 6am. It was traveling from the regional capital, Nanning, to Dahua Yao Autonomous County, Xinhua news agency said.

Eight people died at the scene, one on the way to hospital and another despite emergency treatment at the Duyang Town Central Clinic.

The nine injured have been transferred to the county's People's Hospital. One is a two-month-old baby who is in a critical condition and suffering from bleeding in the brain, China Central Television reported.

Another injured person will be transferred when he is in a stable condition, CCTV reported.

The baby's mother, 24-year-old Wei Yuefang, said she and her family were heading for their home village of Bahaotun in Qibainong Township to attend a wedding, according to Xinhua.

She said that her daughter was sleeping in her arms when the minivan toppled over the side of the road. They were thrown from the vehicle as it fell, Wei said.

"Passengers who were still conscious shouted for help. Nearby villagers came and saved us," Wei said.

Survivors told CCTV that it had been raining in the region for several days.

The road was wet and there was thick fog at the time.

An initial investigation said the casualties were workers from a wood processing factory in Nanning and their children. The minivan belonged to the factory owner, according to China News Service, which said that most of the people onboard were from five families.

This posting includes an audio/video/photo media file: Download Now

2 pupils die in school restroom collapse

Posted: 28 Dec 2012 08:58 AM PST

TWO children died and two others were injured after an outdoor restroom collapsed in a primary school in south China's Guangdong Province yesterday.

Officials in Guangdong's Luoding City said the accident happened at around 8:10am at the school.

Four children were injured when a wall of the restroom collapsed. Two of them died in hospital, while the other two are in a stable condition.

Local authorities are investigating and the city has ordered safety inspections for its middle and primary schools.

China has seen a string of incidents in recent months in which children have been killed or injured in school bus crashes, violent attacks and child abuse cases. Experts say the tragedies, which often occurred in rural schools, have exposed a lack of government supervision.

On Monday, 11 preschoolers died after the school van they were in plunged into a roadside pond in a rural area of Jiangxi Province.

The privately run kindergarten they attended was found to have been operating without a license for eight years.

On December 15, a man stormed into a village primary school and slashed 23 pupils with a knife in the central Henan Province. Surveillance footage showed the school was poorly guarded at the time.

Student games lost 12.8b yuan, figures say

Posted: 28 Dec 2012 08:06 AM PST

THE largest-ever World University Games held last year in the southern city of Shenzhen caused a huge loss of 12.78 billion yuan (US$2.05 billion), figures showed.

The games brought in income of 1.217 billion yuan (US$195 million) from ticket sales and other promotional considerations, but the games' expenses were 13.996 billion yuan, according to a report released by the city's audit office.

The 26th Summer Universiade was held between August 12 and 23, 2011.

The games are an international multi-sport event, organized for university athletes by the International University Sports Federation.

The audit report showed the sports event went dramatically over budget mainly because some of the projects exceeded their budget, some made purchases that were unauthorized or in violation of rules, and some didn't have budgets.

Organizers spent 4.49 billion yuan on operating the games, including the opening and closing ceremony; 7.52 billion yuan on building and renovating venues; and 1.986 billion yuan on other support facilities, the audit showed.

The Shenzhen audit office also found donations from some sponsors were poorly arranged, and some resources, such as oil for sailing ships and bullets for competitions, were wasted.

Involved personnel would be investigated and would be punished if wrongdoing was uncovered in the process, according to the audit office.

The report was published almost 11 months later after some local political advisers and local legislators demanded a full disclosure of spending following media reports of big outlays and unpaid debts.

The Shenzhen audit office said they have started auditing the related expenditure on January 2008 and finished this September, according to Southern Metropolis Daily.

"We sent 222 teams auditing 239 units, 61 construction projects and 26 supporting programs. It takes a long time to work out the figures," the office said in response to why it took so long to publish the report, according to the paper.

Liang Daohang, former vice mayor of the city, was said to be toppled for his connection with unclear accounts in the Universiade, according to The Beijing News.

The Guangdong Province Party discipline watchdog on December 1 confirmed Liang was under the investigation for severe violations, but didn't disclose more details, according to its official website.

Student hacker uncovers exams, brags about skill

Posted: 28 Dec 2012 08:05 AM PST

A COMPUTER wizard studying at Nanjing University may be punished for using a social networking website to flaunt how he hacked the school's e-mail account and found the final exam papers, local media reported.

The 21-year-old bragged on Wednesday on popular social networking website renren.com that he hacked into the academic dean's e-mail account, the Yangtze Evening News reported yesterday.

In his post, Liu said he found out that teachers sent the electronic exam sheets to the dean by e-mail, so he sent an e-mail and soon received a reply. He also received a "session cookie," a unique string that contains the path of an automatic login generated when a user logs into his account.

He then used the stolen cookie to log onto the dean's account without providing a user name or password.

"I searched 13 exam sheets but I didn't click any one," Liu said, adding that he just found the bug and wanted to test it. He also said students could use the same method to change bad scores.

His post was widely circulated on the Internet and many students asked him to teach them. But he deleted it on Thursday morning at the order of his instructor.

His father also received a call from the school, saying his son might be expelled, the paper reported. But the school told the newspaper that it hasn't decided how to punish the student.

Liu has apologized, saying he was sorry for posing negative influences, but he insisted the school should improve its computer system.

March date for congress

Posted: 28 Dec 2012 08:00 AM PST

CHINA has decided to convene the first plenary session of the 12th National People's Congress on March 5 next year, during which top state leaders including the country's president will be elected.

The 30th meeting of the 11th NPC Standing Committee, which ended yesterday, passed a decision which sets suggestions for the agenda of the session, which will last about two weeks.

Police hunt suspects in toilet porn case

Posted: 28 Dec 2012 08:00 AM PST

POLICE are hunting suspects who took photographs and filmed video footage in women's toilets at a university using hidden cameras.

The material was found on foreign pornographic websites, according to yesterday's Legal Evening News.

The university wasn't named but police said many students featured in the photographs and they had been shocked to find out they had been photographed. A number of the students were now too afraid to use the university's toilets, police told reporters in Beijing.

During their investigation, police found suspects communicating via online chatting software and trading photographs and videos. On one chat service, suspects were sharing their experience of taking photographs with hidden cameras and "showing off their achievements at toilets," police said.

The suspects, who hid their identities, frequently joined different online chat rooms and freely shared experiences and photographs.

Spreading the photographs and videos online was a serious violation of the victims' rights, police said, adding that their investigation was continuing.

The case surfaced after an online post under the heading "Caution Girls" claimed in May that hidden cameras had been used to secretly record women in toilet booths.

The post said photos and footage taken from the toilets were then sold to Japan and featured in adult movies. Women in the videos seemed unaware they were being filmed, the post said.

There was concern in Shanghai after the poster claimed that women featured in some of the clips spoke Shanghai dialect, and the pictures might have been taken at Shanghai's Metro City, a shopping mall in downtown Xujiahui area.

Police checked the mall's toilets but found nothing.

In other cases, more than 500 people suspected of involvement in major pornographic websites had been detained.

About 100 of the suspects were caught at the beginning of the year in a case involving a website in Hebei Province which had more than 230,000 registered members and 12,000 hits a day.

In March, police arrested about 400 people in a case involving porn website "Adult Video Wolf" which had more than a million members.

China approves real-name regulation for the Internet

Posted: 28 Dec 2012 08:00 AM PST

CHINA'S lawmakers have given the green light to rules requiring Internet users to register their real names with service providers.

The rules also specify punishments for websites or service providers who leak or sell personal information.

The rules, adopted yesterday at the closing session of the Standing Committee of the National People's Congress in Beijing, are meant to "ensure Internet information security, safeguard the lawful rights and interests of citizens, legal entities or other organizations and safeguard national security and social public interests."

The identity management policy will require Internet users to use their real names to identify themselves to service providers.

It bans organizations and individuals from obtaining personal information via illegal means, as well as prohibiting them from selling or illegally providing the information to others. Violations can lead to confiscation of illegal gains, the loss of licenses and website closures, as well as a ban on any future Internet-related business.

"Network service providers will ask users to provide genuine identification information when signing agreements to grant them access to the Internet, fixed-line telephone or mobile devices or to allow users to post information publicly," the decision states.

A senior member of the legislature allayed public concern that the rules could hamper the exposure of corruption cases online, stifle public criticism and negate the Internet's supervisory role.

Such worries are "unnecessary," said Li Fei, deputy director of the Commission for Legislative Affairs of the NPC Standing Committee.

Earlier this week, when briefing lawmakers on the decision, Li said: "Identity management work can be conducted backstage, allowing users to use different names when posting material publicly."

Many Internet and telecommunications operators have already put identity management into practice in China. The new decision aims to improve the policy through legislation, according to Li.

By November, almost all fixed-line phone users and 70 percent of mobile phone users have registered with their real names.

Unregistered users are mainly owners of prepaid mobile phone cards, figures from the Ministry of Industry and Information Technology show.

The new rules will empower supervisory departments to take technical and other necessary measures to prevent, stop or punish those who infringe on online privacy.

People who find information that discloses their identity or infringes their rights, as well as those who suffer harassment from promotional messages, have the right to demand providers stop such practices.

The decision bans service providers, as well as government agencies and their personnel, from leaking users' information, as well as from selling or illegally providing it to others.

Network service providers are also responsible for taking measures to ensure the safety of information during business activities and adopt countermeasures when information is leaked, damaged or lost, it says.

To tackle the rising number of complaints regarding spam messages, the decision bans any organization and individuals from sending commercial digital information to fixed-line phones, mobile phones or personal e-mail addresses without consent.

Law covers parental visits

Posted: 28 Dec 2012 08:00 AM PST

VISIT your parents ... and that's an order.

Lawmakers yesterday amended the law on the elderly to require adult children to visit aged parents "often" - or risk being sued by them.

The amendment does not specify the frequency of visits but earlier news reports said the new clause will allow elderly parents who feel neglected by their children to take them to court.

Law boost for contract workers

Posted: 28 Dec 2012 08:00 AM PST

CHINA has amended its labor law to ensure workers hired through contracting agents are offered the same conditions as full employees, a move meant to tighten a loophole used by many employers to maintain flexible staffing.

Contracting agencies have taken off since China implemented the Labor Contract Law in 2008, which stipulates employers must pay workers' health insurance and social security benefits and makes firing very difficult.

"Hiring via labor contracting agents should be arranged only for temporary, supplementary and backup jobs," the amendment reads. It takes effect on July 1 next year.

Contracted laborers now make up about a third of the workforce at many Chinese and multinational factories, and in some cases account for well over half.

Some foreign representative offices, all news bureaus and most embassies are required to hire Chinese staff through employment agencies, rather than directly.

Under the amendment, "temporary" refers to durations of under six months, while supplementary workers would replace staff on maternity leave or on holiday, Kan Ke, vice chairman of the legislative affairs commission of the National People's Congress Standing Committee, told reporters.

The main point is that contracting through agencies should not become the main channel for employment, he said, acknowledging that the definition of backup might differ by industry.

"In order to prevent abuse, the regulations control the total numbers and the proportion of workers that can be contracted through agencies and companies cannot expand either number or proportion at whim," Kan said. "The majority of workers at a company should be under regular labor contracts."

Although in theory contracted or dispatch workers are paid the same, with benefits supplied by the agencies who are legally their direct employers, in practice many contracted workers, especially in manufacturing industries and state-owned enterprises, do not enjoy benefits and are paid less.

Employment agencies have been set up by local governments and even by companies themselves to keep an arms-length relationship with workers. Workers who are underpaid, fired or suffer injury often find it very difficult to pursue compensation through agencies.

China would increase inspections for violations, Kan said, including the practice of chopping a longer contract into several shorter ones to maintain the appearance of "temporary" work.

Ctrip travel agency stole clients on web, suit says

Posted: 28 Dec 2012 08:00 AM PST

CTRIP, the country's leading online travel agency, is accused in a lawsuit of using the link promotion service of China's largest search engine to steal customers and cause severe losses to a Guangdong-based ticket agent.

Dongguan Guo'an Ticket Co. Ltd is seeking 5 million yuan (US$801,835) in compensation from Ctrip for alleged trademark infringement and unfair competition, the Shanghai No. 1Intermediate People's Court heard yesterday.

Guo'an said it found the first search result of "Guo'an ticket" on a search on baidu.com directed Internet users to ctrip.com when clicked in July. Guo'an blamed the link for its declining online sales.

"It was an infringement action for Ctrip to use our company name in its promoted links. The action was also an unfair means of competition that cost Guo'an nearly 6 million yuan in losses," said Liu Yaya, a lawyer representing Guo'an.

Liu said Guo'an is the trademark holder of its company name until at least 2017. Liu said Ctrip infringed both the trademark rights and the company's naming rights.

According to Liu, Ctrip created the infringing promotion link on September 21, 2011 to lure online customers to book air tickets and travel packages on Ctrip's website. The link was not deleted until November 29 of this year, the court heard.

Ctrip denied the accusation.

Guo'an said the compensation was based on a daily average margin of its sales income before and after the link was deleted. Guo'an said it is willing to mediate but Ctrip refused. The court didn't make a ruling yesterday.

VIDEO: Major new subway crosses Yangtze river

Posted: 28 Dec 2012 09:41 AM PST

A major new subway line has opened in the Chinese city of Wuhan, the first in the country to cross under the mighty Yangtze river.

10 killed in packed van plunge

Posted: 28 Dec 2012 09:00 AM PST

AT least 10 people, including five children, died when an overloaded van crashed down a mountain ravine in the Guangxi Zhuang Autonomous Region yesterday morning.

There were 20 people on board the nine-seater van when it plunged more than 50 meters at about 6am. It was traveling from the regional capital, Nanning, to Dahua Yao Autonomous County, Xinhua news agency said.

Eight people died at the scene, one on the way to hospital and another despite emergency treatment at the Duyang Town Central Clinic.

The nine injured have been transferred to the county's People's Hospital. One is a two-month-old baby who is in a critical condition and suffering from bleeding in the brain, China Central Television reported.

Another injured person will be transferred when he is in a stable condition, CCTV reported.

The baby's mother, 24-year-old Wei Yuefang, said she and her family were heading for their home village of Bahaotun in Qibainong Township to attend a wedding, according to Xinhua.

She said that her daughter was sleeping in her arms when the minivan toppled over the side of the road. They were thrown from the vehicle as it fell, Wei said.

"Passengers who were still conscious shouted for help. Nearby villagers came and saved us," Wei said.

Survivors told CCTV that it had been raining in the region for several days.

The road was wet and there was thick fog at the time.

An initial investigation said the casualties were workers from a wood processing factory in Nanning and their children. The minivan belonged to the factory owner, according to China News Service, which said that most of the people onboard were from five families.

This posting includes an audio/video/photo media file: Download Now

2 pupils die in school restroom collapse

Posted: 28 Dec 2012 08:58 AM PST

TWO children died and two others were injured after an outdoor restroom collapsed in a primary school in south China's Guangdong Province yesterday.

Officials in Guangdong's Luoding City said the accident happened at around 8:10am at the school.

Four children were injured when a wall of the restroom collapsed. Two of them died in hospital, while the other two are in a stable condition.

Local authorities are investigating and the city has ordered safety inspections for its middle and primary schools.

China has seen a string of incidents in recent months in which children have been killed or injured in school bus crashes, violent attacks and child abuse cases. Experts say the tragedies, which often occurred in rural schools, have exposed a lack of government supervision.

On Monday, 11 preschoolers died after the school van they were in plunged into a roadside pond in a rural area of Jiangxi Province.

The privately run kindergarten they attended was found to have been operating without a license for eight years.

On December 15, a man stormed into a village primary school and slashed 23 pupils with a knife in the central Henan Province. Surveillance footage showed the school was poorly guarded at the time.

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