Reform Rumors Surround China’s Intelligence Service

Reform Rumors Surround China’s Intelligence Service
Child Trafficking: A Cruel Trade
On The Web, A Tale of Two Chinas
Workers Go Gangnam Style to Demand Unpaid Wages
Ministry of Truth: Lives of North Korean Leaders
Netizen Voices: Financial Disclosure Never?
Presidential Inbox: Top Priorities for U.S. Policy Toward China and Asia
Biggest French Maid Gathering Turns Scary
China’s Dollar Assets and the Persistent Myth
Bloomberg Terminal Design Case Ends With Settlement
CONTAINING THE DAMAGE: CY Leung’s First Policy Address
Watch: Editor David Wertime Speaks at Harvard’s Berkman Center for Internet & Society
Editor David Wertime Speaks at the Harvard Berkman Center for Internet & Society

Reform Rumors Surround China’s Intelligence Service

Posted: 24 Jan 2013 07:29 PM PST

Amid rumors of a restructuring of China's bureaucracy under the leadership of Xi Jinping and Li Keqiang, the Jamestown Foundation's Peter Mattis assesses the implications of a potential shakeup of the Ministry of State Security. From The Diplomat:

The MSS supposedly would become the State Security Administration (guojia anquan zongju), reporting directly to the State Council and presumably not to the Political-Legal Committee, now officially headed by Meng Jianzhu. If true, these rumors present a significant change to China's domestic intelligence and preserving stability apparatus. Not only would this reform dilute the power of the Central Political-Legal Committee by cutting out the MSS, but it also would give the senior-most leaders an alternate source of domestic intelligence.

…

Although the rumors fit with the narrative of reform of the preserving stability apparatus (weihu wending, abbreviated as weiwen) and demotion of the Central Political-Legal Committee's chairmanship from the Standing Committee to the Politburo, they are still only rumors on a subject that perennially disappoints. As Carl Minzner recently pointed out, reform of the political-apparatus is a real possibility but observers probably will have to wait for personnel changes at the National People's Congress in March and the bureaucratic profile of other players outside of the public security apparatus to see if reform is in the offing.

Specifically for a "State Security Administration," analysts should look for a change in the lines of authority associated with the MSS. Although political-legal affairs at the center are difficult to observe, one national-level change would be the shift of the state councilor overseeing state security, currently Meng Jianzhu. At lower levels, local newspapers and government websites would provide changes to whether local state security officials continued participating in normal political-legal committee processes as well as the joint work of the 610 Office (anti-Falungong work) and the Preserving Stability Office.

© Scott Greene for China Digital Times (CDT), 2013. | Permalink | No comment | Add to del.icio.us
Post tags: bureaucracy, intelligence, Li Keqiang, Ministry of State Security, reform, Xi Jinping
Download Tools to Circumvent the Great Firewall

Child Trafficking: A Cruel Trade

Posted: 24 Jan 2013 05:27 PM PST

Human trafficking is a serious problem in China, and as many as 70,000 children are kidnapped and sold each year. Last month, Xinhua released a report on the bust of a Child trafficking ring, also containing a summary of crack-down efforts since 2009. A recent article from The Economist on the illicit trade says that prices are rising in China – possibly due to a waning supply of kidnapped children, credits social media for raising awareness of the problem, and also introduces activists and officials working to eradicate the trade:

The authorities have launched several crackdowns over the past two decades, but the crime has persisted. Since a renewed effort began in 2009, more than 54,000 children have been rescued and 11,000 trafficking gangs "smashed", Xinhua, the state news-agency, reported in December. Officials claim the problem has become less rampant.

Given the patchiness of official data, this is hard to prove. Individual cases of abduction are rarely reported by the state-controlled media. But Deng Fei, a Beijing-based journalist and prominent campaigner on behalf of victims and their families, believes the number of children being abducted is falling. Mr Xiao estimates that the price of abducted boys has risen in recent years from around 40,000 yuan to about 90,000, perhaps because the supply of abducted children has been affected by the police crackdown.

Social media may also have played a role. In recent years, parents and activists have been using websites and microblogs to share information about cases and draw public attention to child abduction. Their efforts have put pressure on the police, who have responded (unusually, given their suspicion of internet activism) by using the internet themselves to contact the families of victims.[...]

Earlier this month, The Telegraph's Malcolm Moore reported on family planning officials suspected of trafficking children:

Wang Yiping is the head of the village family planning committee in Anxi county, Fujian, and a mother of four, according to the China Youth Daily newspaper.

The police said she is suspected of assisting in the illegal sale of four babies, including the recent sale of a baby boy from Yunnan province for 52,000 yuan (£5,200).

[...]In December, 12 family planning officials in Hunan were suspected of selling orphans abroad, and were found to have "seriously violated regulations", but were later cleared of any wrongdoing.

For more on child trafficking in China, see prior CDT coverage. Also visit the website for "Living With Dead Hearts", a forthcoming film by Charlie Custer and Leia Li, for much more information on the topic, including links to charity organizations dealing with this cause.

© josh rudolph for China Digital Times (CDT), 2013. | Permalink | No comment | Add to del.icio.us
Post tags: child trafficking, corrupt officials, human trafficking, kidnapping
Download Tools to Circumvent the Great Firewall

On The Web, A Tale of Two Chinas

Posted: 24 Jan 2013 05:14 PM PST

Internet Penetration by Province. Source: CNNIC (via Tea Leaf Nation)

GDP Per Capita by Province in 2011. Source: China Bureau of Statistics (via Tea Leaf Nation)

After last week's announcement by the National Bureau of Statistics that income equality had reached potentially destabilizing levels, Tea Leaf Nation's Eli Binder highlights the above maps and explores whether Internet penetration corresponds with economic development in China:

Last Monday, the China Internet Network Information Center (CNNIC) published its annual report on the nation's internet usage and infrastructure. According to the report, the Chinese internet continues to boom, with usage swelling 10% to 564 million users in 2012. But the report also shows that the country's internet use – much like its economy – is highly uneven.

While web penetration in Beijing surpassed 72% in 2012, fewer than 30% of residents in the interior province of Jiangxi are internet users. To put those figures in perspective, Beijing's internet usage is comparable to that of Hong Kong or Israel. Jiangxi, on the other hand, lags behind Uzbekistan, Bolivia, and Tuvalu.

In terms of the production of online content, the gap is even wider. Beijing-based websites host over 38 billion web pages, or an average of 1,890 pages per city resident. Tibetan-based sites host fewer than 3.5 million pages, or just over one page per person.

© Scott Greene for China Digital Times (CDT), 2013. | Permalink | No comment | Add to del.icio.us
Post tags: gini coefficient, income inequality, Internet proliferation, urban rural divide
Download Tools to Circumvent the Great Firewall

Workers Go Gangnam Style to Demand Unpaid Wages

Posted: 24 Jan 2013 03:31 PM PST

The withholding of wages owed to migrant workers often sparks protest in China. In the lead-up to Spring Festival – the only time of the year that many migrant laborers have the chance to see their families – these protests tend to become more common as unpaid wages keep migrants from buying their tickets home. Many innovative methods of protest have been used in the past to demand long overdue compensation, and recently workers in Wuhan employed pop-culture to draw attention to their cause. The Guardian reports:

They have occupied factories and taken to the streets. But Chinese workers chose a more unusual form of protest when they highlighted their unpaid wages by dancing Gangnam Style outside the nightclub they had built.

The construction workers from Wuhan said they had concluded it was the only way to draw attention to their problems.

[...]The leader of the dancers, who gave his name only as Mr Lu, told the Wuhan Evening News that in total 40 workers were owed 233,000 yuan (£23,300).

"There have been many creative protests over the last few years. Younger workers in particular are very media-savvy and clued-in," said Geoff Crothall of the Hong-Kong-based China Labour Bulletin.

For a picture of the PSY-inspired protest, see Chinese-language coverage.

As workers in Wuhan dance Gangnam Style, LinkAsia relays video footage from a CCTV broadcast showing more drastic methods of protest over unpaid wages, which in more than one case included suicide:

ChinaSMACK has translated Chinese news coverage and subsequent netizen commentary on the migrant worker in Guangzhou who detonated a suicide bomb while demanding his wages:

At 3:53pm this afternoon [January 18], an explosion happened in an apartment building in Guangzhou's Tianhebei Road Dushi Huating Community. Upon report, Guangzhou Police quickly dispatched police officers and firefighters to the scene to handle the situation, evacuate the surrounding people, and immediately take the injured to the hospital for emergency treatment.

According to the preliminary investigation by the police, in the afternoon, a man arrived at a company in Tianhebei Road Dushi Huating Community to ask for his salary, then detonated the explosive strapped to his body. The man died of his severe injuries. At present, this incident has already caused 1 death and 7 wounded. Police are currently investigating this incident.[...]

Meanwhile, China Daily reports on a ruling by the Supreme People's Court that may work to help migrants receive their due compensation:

A judicial interpretation that went into effect on Wednesday aims to defend migrant workers by preventing their employers from defaulting on their wages.

A judicial interpretation issued by the Supreme People's Court (SPC), China's top court, clearly defines specific applicable situations in which employers who default on wages can be sentenced to prison for up to seven years.

A 2011 amendment to the Criminal Law classifies failure to pay laborers properly as a crime, specifying a prison sentence of three to seven years for employers whose failure to pay their employees results in "serious consequences."

However, the "serious consequences" are not specified in the law.

[...]The payments mentioned in the interpretation refer not only to employee wages, but also to bonuses and overtime pay.

However, employers can have their penalties relieved or be exempted from punishment entirely if they render payments to their employees before being prosecuted, the interpretation said.

The interpretation is hoped to discourage wage defaults, especially those that impact migrant workers.

For more on migrant workers, unpaid wages or Chinese interpretations of the Gangnam Style meme, see prior CDT coverage.

© josh rudolph for China Digital Times (CDT), 2013. | Permalink | No comment | Add to del.icio.us
Post tags: Gangnam style, judicial action, migrant workers, protest, protests, Supreme People's Court, unpaid wages
Download Tools to Circumvent the Great Firewall

Ministry of Truth: Lives of North Korean Leaders

Posted: 24 Jan 2013 10:23 AM PST

The following censorship instructions, issued to the media by central government authorities, have been leaked and distributed online. Chinese journalists and bloggers often refer to these instructions as "Directives from the Ministry of Truth."

Central Propaganda Department: Strictly observe propaganda and reporting regulations concerning foreign affairs. Do not report, comment on, or redistribute stories about the personal lives of North Korean leaders (such as face-lifts). (January 24, 2013)

中宣部：严格遵守有关涉外宣传报道规定，对朝鲜领导人个人生活（如整容）不报道、不评论、不转载。

CDT has collected the selections we translate here from a variety of sources and has checked them against official Chinese media reports to confirm their implementation.

Since directives are sometimes communicated orally to journalists and editors, who then leak them online, the wording published here may not be exact. The original publication date on CDT Chinese is noted after the directives; the date given may indicate when the directive was leaked, rather than when it was issued. CDT does its utmost to verify dates and wording, but also takes precautions to protect the source.

© Anne.Henochowicz for China Digital Times (CDT), 2013. | Permalink | No comment | Add to del.icio.us
Post tags: censorship, Directives from the Ministry of Truth, media censorship, Ministry of Truth, North Korea, propaganda
Download Tools to Circumvent the Great Firewall

Netizen Voices: Financial Disclosure Never?

Posted: 24 Jan 2013 09:07 AM PST

Hu Xijin as a loyal dog. "Don't go! My master is about to undress! Just give him ten more years!" (Rebel Pepper)

Official corruption is front and center on Weibo. As netizens expose greedy politicians online, Xi Jinping is vowing to crack down. Among the issues citizens want addressed is the lack of public disclosure of officials' financial assets.

On December 19, Global Times Chief Editor Hu Xijin addressed the issue of financial disclosure on Weibo, bringing on a barrage of angry comments. His post was gone the next morning:

@HuXijin: I think it is unrealistic to immediately have all officials publicly disclose their assets. If we push the process, we will inevitably create more problems than the ones we already need to solve. But financial disclosure is the way of the future. The clear road map and timetable for supporting financial disclosure nationally involves, first, implementation among reserve and newly appointed officials. Those who do not disclose will not be hired. From there, we can transition all officials to the system of disclosure. If we can complete this process in ten years' time, China will be quite fortunate.

Gone, too, was a lively exchange between Caijing Magazine and Hu:

@Caijing: [Middle of the Night] Why is it unrealistic to immediately have all officials publicly disclose their assets? Could you specify which new problems it will create? If it's that the prison system won't be able to handle the influx, why not just build more prisons? You'd stimulate demand and create jobs in one fell swoop.

@HuXijin: Heh heh, how old are you? Could you post this under your name instead of Caijing's?

Netizens took Hu to task:

@ProudBreeze: If the reform fails, then the revolution will undoubtedly come. If we have to wait ten years for minor progress like disclosing government officials' financial assets, then how long must we wait for other reforms? One more question: do you think the party-state could afford to wait ten years? If there is no substantial action, people will lose faith in you within five years.

@傲气尘风：改革不成，则革命必来！一个小小的公示都要等上十年，其它的改革又要多久？再问一句，你觉得党国等得起十年吗?若无实质的动作，不出五年，民众就会失去对你们的信心。

@hu_jia: Global Times Chief Editor Hu Xijin says before going to work this morning, he will delete the Weibo post which says we need ten years to disclose officials' assets. This post has 3,000 fantastic comments. One of the newest: "Ten years from now the officials will be hung on the street lamps, and their assets will be disclosed naturally." For Communist Party officials, the outcome of financial disclosure will be terrible, but will it be better if they don't disclose? Financial disclosure has to happen immediately. There are no technical or legal barriers. Refusing to disclose financial assets is proof of the corruption of the Chinese Communist Party.

@hu_jia：环球时报主编胡锡进说今早上班之前会删掉他关于官员财产公开要十年的微博。此条微博三千条评论很精彩，最新一条是："十年后官员们都被挂路灯上了，财产自然就会公开了。"对共产党的官员而言，公开财产结局很坏，不公开财产的结局就会好吗。财产公开必须马上实施，不存在技术和法律障碍。拒绝公开财产，就是中共贪腐的证据。

@MaGuanqingHibernate: It's not realistic for you to disclose financial assets, yet it is realistic for you to spend with extravagance while citizens drift hopelessly?

@马观晴已冬眠：官员财产公开制度不现实，你们奢侈挥霍，国家公民颠沛流离就现实？！

Hu aids in the Wolf Vegetarian Plan. "Just wait a moment, Brother, and we'll be all done!" (Rebel Pepper)

@Elselooker: For the disclosure of officials' personal assets, Hu Xijin wildly suggests that we "first implement [it] among reserve and newly appointed officials. Those who do not disclose will not be hired. From there, we can transition all officials to the system of disclosure. If we can complete this process in ten years' time…" An excuse like this shows that the well-fed cannot know how the starving suffer. It's obvious he's dodging the issue. If the people's resistance doesn't continue to grow in scale and brutality, to the point that the official system can't control them, we won't achieve financial disclosure in 10,000 years!

@监政铲腐：公布个财产，胡锡进竟然规划，"先从新后备和新提拔的官员开始财产公开，不公开的不予提拔。然后逐步向全体官员过渡。如果这个进程能10年内完成"，这真是饱汉不知饿汉饥的说辞，推脱之意非常明显，如果没有人民群众越来越大面积的高效强力的抗争，直到让公器也无法控制，恐怕一万年也难！

@Poetjustice: Hu Xijin thinks "it is unrealistic to immediately have all officials publicly disclose their assets. If we push the process, we will inevitably create more problems than the ones we already need to solve."–I would like to ask Chief Hu: Why is it unrealistic? Which new problems will it create? How could Sweden implement financial disclosure more than 200 years ago? How could most countries in the world implement it? How could Hong Kong, Macau, and Taiwan implement it? Is it true that the superiority of socialism lies in the infeasibility of officials' financial disclosure?

@徐昕：胡锡进认为：立即实行所有官员财产公开制度不现实。如果强推它，新制造的问题必将多于它要解决的问题——请教胡总：为什么不现实？会制造哪些新问题？为什么瑞典200多年前就可实行？为什么世界大多数国家可实行？为什么港澳台可实行？难道社会主义优越性就在于不能实行官员财产公开制度吗？

@GuoGuangdong: "Heh heh, how old are you?"–This'll go viral.

@郭光东："呵呵，你几岁？"——胡总编这句估计要火。

@Cinderana: Why is it unrealistic to disclose financial assets right now? 90% of the countries in the world have disclosed officials' assets. Can't we display the superiority of socialism here? If we wait for another ten years, the corrupt officials will all be retired. Mr. Hu even goes on to ask how old the other person is. Doesn't he just say the darndest things? Mr. Hu, when you comment on historical figures, would you please ask yourself how old you are first?

@迷仰：为什么马上公开财产不现实？世界90%的国家都公开了，社会主义的优越性不能在这儿体现一下吗？再等个10年，贪官们也退休了吧。还问别人几岁，真是态度可掬。胡编您下次评价历史人物的时候也先问问自己几岁好吗！

@Weiwenjinhechu: Ten years is still too fast. We should design a hundred-year plan, no, a thousand-year plan!

@为问今何处：十年还是太快了，应该设计个百年大计，不，千年大计。

@Northwind: Hu Xijin says the disclosure of officials' assets "will inevitably create more problems than the ones we already need to solve." He has essentially made it clear that the bulk of officials are corrupt. He directly proves that China's anti-corruption effort is a complete failure. (Of course, everybody knows this, but it's rare for Frisbee Hu to say so. Don't pretend that you are confident in the ideology, the system, and the path.)

@北风：胡锡进说，（财产公开）"新制造的问题必将大于它要解决的问题"，这句话其实已经挑明了中国官员的腐败占了大多数，也直接说明中国的反腐败是彻底失败的。（当然这是人尽皆知的事，但飞盘胡能说出来，也难得。就别装什么理论自信制度自信道路自信了。）

@Xushaolin: This weibo from Hu Xijin last night was deleted. Don't know if it was deleted by him because he felt it was inappropriate, or deleted by Sina. I think this Hu guy sometimes fights fire with fire. Intentionally or not, he often reveals the real thoughts of government officials. Judging from netizens' comments, his idea is a gross violation of the popular will. The disclosure of officials' personal assets is the right way to go, and we must proceed. We can be careful and thoughtful in the process, but this cannot be used as an excuse to stall.

@老徐时评：胡锡进昨晚的这条微博被删了，不知是他自己感觉不妥删的还是新浪给删的。感觉胡这个人有时真是个高级黑，经常有意无意地将官员们内心真实想法泄露出来。从当时网友的评论看，他的想法是多么的有违民意。官员财产公示是大势所趋必须往前走。程序上可以谨慎周到，但绝不能成为无所作为拖延时间的借口。

Via CDT Chinese. Translation by Mengyu Dong.

© Anne.Henochowicz for China Digital Times (CDT), 2013. | Permalink | No comment | Add to del.icio.us
Post tags: Global Times, Hu xijin, Netizen Voices, netizens, official corruption, sina weibo, weibo
Download Tools to Circumvent the Great Firewall

Presidential Inbox: Top Priorities for U.S. Policy Toward China and Asia

Posted: 24 Jan 2013 08:09 AM PST

U.S. President Barack Obama shakes hands with China's Vice President Xi Jinping in the Oval Office of the White House in Washington on February 14, 2012.

President Obama,

You and your foreign policy team have steered the United States on a constructive course in Asia over the past few years. There is thus no need for a policy overhaul. However, the dynamics of the region—from exploding trade and investment to rapidly rising security tensions and emerging flashpoints—leave no room for complacency.

With a new leadership in China and your new foreign policy team coming together in Washington, it is a good time to take a step back and assess what more you can do to advance U.S. interests in the bilateral U.S.-China relationship, as well as in the Asia-Pacific region more broadly. Here are three suggestions:

1) Breathe life into the pivot (or rebalance) in Asia

The pivot was a singularly deft move. It gave economic and strategic purpose to a previously aimless U.S. policy in Asia, while simultaneously addressing the very real concerns of many U.S. allies and partners over China's aggressive rhetoric and actions in the Asia-Pacific region. The pivot also helps secure the U.S.-China relationship in a larger regional context, which is helpful given the wide range of shared trade and security interests.

Now it is time to put our money and muscle where our mouth is. The economic opportunities, as well as the security risks in the region, are only growing. The United States needs to devote real energy to negotiating the high-end regional free trade agreement, the Trans-Pacific Partnership; and it needs to start restocking the region with our military personnel and hardware. Otherwise you run the real risk that the pivot will prove without real substance and the naysayers—those who keep questioning the long-term commitment of the United States to the Asia Pacific—will win the day.

2) Welcome the Chinese proposal for a "new type of relations between major countries," then ask what it means and what the Chinese are planning to do to realize it

Chinese foreign policy scholars and officials have adopted a new mantra: it is time for a "new relationship" between the United States and China. Yet probe a little bit, and it is almost impossible to find someone who can define what this new relationship might entail.

To the extent that there is some collective understanding within China of the broad contours of this new "major country" relationship, it seems to rely overwhelmingly on the United States changing the way it does business. According to Chinese foreign policy analyst Jia Xiudong, the ability to achieve this new relationship depends on how the United States views China's strategic intention; how the United States moves forward on rebalancing; and how the two countries "develop their potential" for win-win cooperation. Senior foreign affairs official Wang Yusheng similarly says this about the "new type of relations": "The ball is in the U.S. court. So long as the U.S. can make efforts in the same direction as China does, there is hope."

The Chinese have been relatively reluctant in the past to help construct bilateral or international agreements and architecture, so it is important to encourage such efforts. But before a new type of relations between the two countries can come to fruition, Chinese thinkers and officials will have to do more than say it is up to the United States.

3) Get the U.S.-China economic relationship right

The good news is that the U.S.-China economic relationship is one of the world's most robust. We are each other's second-largest trading partners, and China represents the fastest-growing market for U.S. exports. Chinese firms also invested more than $6.5 billion in the United States in 2012, over 10 percent more than the previous high in 2010.

At the same time, challenges in the trade and investment relationship are proliferating, including intellectual property rights theft, fraudulent reporting of assets by Chinese companies, and concerns over burgeoning investment in the United States by Chinese state-owned enterprises with weak corporate governance.

The United States would benefit from a trade and investment architecture that offered greater protection to U.S. economic interests. Both a bilateral investment treaty and, over the longer term, a free trade agreement fit the bill. President Obama, your team should make moving forward with these negotiations one of the top priorities of the Strategic and Economic Dialogue.

Mr. President, the United States can continue to help drive an economically dynamic and strategically secure Asia by keeping the region front and center in U.S. policy priorities. Given all the other demands on your foreign policy team, this will not be easy. However, there is much to gain and more to lose if you don't continue to assert U.S. leadership in the region.

Biggest French Maid Gathering Turns Scary

Posted: 23 Jan 2013 06:04 PM PST

Source: Marketing to China

Chinese game company organized and applied for Guinness record-breaking biggest French maid gathering.

This gathering was organized by 17173 Game, in Shanghai World Financial Center.

It was claimed by the organizer that there would be over 300 beautiful girls cos-playing in French maid dress to set a record of the "biggest gathering of French maid".

However, only 264 female were present and 140 of them were paid to come after the gathering started. Some of them don't even know what's happening there. There were even some middle-aged women mixed in them and bargaining for the price!

That's not a little far away from the maids in MANGA!

To be ugly is not your fault, but it's not necessary for you to come out and scare people in French Maid dress.

Netizens seem to be irritated and inspired again by the "Guinness record-breaking scary gathering", as they comments:

春哥之神力：斯巴达300女仆!

(this is Sparta ~300 FRENCH MAID!)

南无旃檀功德佛：这TM也能叫女仆！！！

(WTF maids they are!!!)

被逆推的傲娇受: 单纯报复社会…

(It's pure revenge to the society…)

All right, let's knock off the jokes. The fact is now in China, Guinness is gradually losing its attraction to the people because too many companies from many industries like food market are using that for catching eyes: the biggest moon-cake, the most people playing Taichi together… People really get tired with this and some of them begin to joke on this,"why not sharpen a log and apply for the Guinness-record breaking toothpick?!"

China’s Dollar Assets and the Persistent Myth

Posted: 24 Jan 2013 01:59 AM PST

I note that Ken Rapoza at Forbes has written yet another good post on the issue of China's holding of U.S. debt. The occasion is a report issued by the US-China Business Council, which says "Nothing to worry about. Go about your business." Yes, they are a pro-China lobbying group, but as Ken says, in this instance they are right.

The need for such reports, and Ken's article, however, makes me sad.

I certainly agree with USCBC. I've written about this topic numerous times over the years (see below), and even dredged up U.S. Department of Treasury numbers to show that China's chunk of the U.S. public debt is fairly minor. Ken's piece contains the usual arguments, persuasive to anyone with a working pre-frontal cortex.

Unfortunately, both his and my writing on this topic is ultimately futile. This story has graduated to myth status, and that means that the spectre of the Chinese loanshark is firmly ensconced in the mind of many Americans, including I assume a large group of folks up on Capitol Hill who probably don't understand the issue all that well.

How do I know? Because I've seen guys like Jon Stewart and David Letterman make jokes about it. If you can make a political joke about a complex issue like this, it means two things: 1) the topic itself is familiar to your audience; and 2) the veracity of the underlying premise is already taken for granted. Jokes about Chinese leaders coming to Washington and repossessing monuments are only (very mildly) funny if you are aware of the debt issue and actually believe that the debt holding is meaningful.

For me, those jokes just piss me off as they perpetuate the myth and misunderstanding. Alas.

Mitt Romney Jumps the China Debt Shark

Bloomberg Terminal Design Case Ends With Settlement

Posted: 24 Jan 2013 01:30 AM PST

You might remember the post I wrote on this infringement case back in July. Check that one out for photos of the products in question. If you've ever seen or worked with a Bloomberg data terminal, that's what was at issue in this case, with Bloomberg claiming that the Shanghai company, Da Zhi Hui (aka "Great Wisdom"), was guilty of a trade dress infringement.

Well, this case settled, and Bloomberg withdrew the complaint from the Shanghai First Intermediate Court. I'd really like to know why, but somehow I doubt that anyone from Bloomberg is going to tell me what happened.

Why do I care? It's not exactly an earth-shattering case. The Shanghai firm is in the financial data business like Bloomberg, and sells a similar service complete with desktop dedicated data terminals. The design of those terminals, including the keyboard and color-coded system, looks suspiciously like the Bloomberg design, which has been around for a long time.

Your basic trade dress (brought under China's Anti-Unfair Competition Law) case. Bloomberg filed the case about a year ago, and a hearing was held by the Shanghai court last July (that's when I wrote my post on the topic). My interest here lies in my suspicion that this settlement is yet another example of "judicial mediation."

My first question is why so many months went by without a judgment. July to January – kind of a long time. One article I read suggests that the court may have requested further information after the initial hearing, but come on. The case isn't that complicated, and we're talking about six months. I'm not buying that explanation.

My guess? Once again, I think the court might have strongly encouraged {ahem} the parties to settle. It's no coincidence that we're seeing this case wrap up just days before the Spring Festival holiday. It's that time of the year to clear dockets, and judges can get aggressive when it comes to pushing settlements on litigants.

The statements made by the parties (as reported in the articles I read) don't exactly match up. It sounds like Bloomberg's story is that the case was only withdrawn once the infringer agreed to, and made, changes to the product design. Sounds fine, although what happened to that one million USD claim for damages? Hmm.

Here's a Bloomberg quote that was in the Shanghai Daily:

"Our objectives have been met, and we agreed to withdraw the complaint against Da Zhi Hui Co," Bloomberg said in an e-mailed statement. "Da Zhi Hui made certain changes to those elements, thereby limiting the risk that consumers would confuse the two products."

Right. Strange that Bloomberg doesn't say that these changes were made at the behest of Bloomberg, which makes me wonder whether the spin put out by Da Zhi Hui may be true (see below).

How about Da Zhi Hui? A slightly different story. They say that changes to the product had nothing to do with the infringement case:

"The result signals a victory to us," Zhang Long, an investor relations staff member of Great Wisdom, told the Global Times Wednesday.

"Bloomberg spent more than 2 million yuan for lawyers' fees on this lawsuit. Withdrawing the lawsuit indicates that it lacks confidence that it can win the case," a staff member at the legal department of Great Wisdom, who declined to give her name, told the Global Times.

"We make changes to our financial services terminal on a regular basis to meet our clients' demand, not because of the lawsuit," she said.

So the big question for me remains: did the judge force the settlement, with Bloomberg dropping the case in return for design changes? If yes, then the Da Zhi Hui statement would be pure spin.

Who was the winner here? It all depends what those changes were, and unfortunately I don't have pics to go along with this. If the changes were significant, then I would assume Bloomberg is satisfied. As far as that million bucks is concerned, let's face it, in terms of a typical China IP litigation, particularly for something like trade dress, that amount is quite high. I doubt an actual judgment would have given them anything near that amount.

Da Zhi Hui might be happy if those changes were minor, and of course they didn't have to pay damages, which is a bonus. (By the way, that comment by one of their in-house lawyers about the other side's legal fees (how would she know that?) is really unprofessional.)

You'd think I'd be used to these settlements already, but no. I'm too curious.

© Stan for China Hearsay, 2013. | Permalink | One comment | Add to del.icio.us
Post tags: bloomberg, trade dress infringement

CONTAINING THE DAMAGE: CY Leung’s First Policy Address

Posted: 24 Jan 2013 12:19 AM PST

Hong Kong's new Chief Executive has grown accustomed to telling audiences he knew it was a tough job, if he couldn't take the heat he would have stayed out of the kitchen, that's the way he likes it, and so on. But considering all that he promised before his election on March 25 last year, and comparing those promises with what he spelled out in his first policy address last week, only one conclusion seems possible: he really did not know just how tough a job it would be. Refusing to admit it only reinforces the case his most ardent critics have built against him on the matter of integrity.

That he really did not know is a more interesting possibility to explore, however, because it suggests he probably suffers from the same political handicap that forced his mentor, Tung Chee-wah, to resign mid-way through his second term of office. Tung was Hong Kong's first post-1997 Chief Executive. Having been surrounded by pro-Beijing loyalists and conservatives, and handpicked by them for appointments throughout his political life, Leung like Tung seems not to have appreciated the new political reality of post-colonial Hong Kong. It now has an opposition that cannot be completely discounted, as Beijing has tried its best to do, because the opposition is strong enough to weaken and discredit a chief executive even if it cannot directly remove him. In any event, it's a lesson that he, like his mentor before him, is being forced to learn the hard way.

THE PROMISES

Leung Chun-ying's pre-election promises went though several revisions as do those of most politicians on the campaign trail. But his goals, spelled out in a final 80-page summation manifesto, have not varied and they are what initially attracted a number of grassroots pro-democracy activists to his candidacy. He was and remains committed to populist livelihood issues with the many consequences of Hong Kong's growing wealth gap foremost among them. His March 2012 manifesto was sweeping and comprehensive in scope, pro-active in design, and far more impressive than that of his chief opponent Henry Tang.* Here at last was someone who actually seemed interested in getting things done.

Housing is currently Hong Kong's biggest headache. The poorest are still living in bed-space cubicles and sub-divided apartments while the supply of public housing cannot meet a demand made worse by middle-income families unable to afford their own accommodation due to skyrocketing prices … made still worse by new-rich mainlanders investing in high-end properties. Leung promised something for everyone although not necessarily to everyone's liking. He focused on the thorny matter of land supply for long term planning and short-term use, proposing to open up the closed Hong Kong/mainland border area, resume rural land in the northern suburbs, and coordinate with cross-border projects. On the land thus acquired, he would build more public rental housing, restart the government-subsidized Home Ownership Scheme, increase mortgage interest deductions, and consider imposing restrictions on home purchases by non-Hong Kong residents.

To grow the economy at a faster pace, he promised a new industrial policy, more cross-border initiatives, upgrades for the shipping and financial services industries. Simultaneously, he promised to formulate a population policy that would focus among other things on the needs of an aging society and on the problem of local births to non-local parents, Hong Kong's version of the "anchor baby" phenomenon. Included would be an assessment of the new minimum wage scheme and labor's demand for standard working hours. Addressing the problem of poverty more directly, he promised "short, medium, and long-term measures" aimed at its alleviation. He also promised to work toward guaranteeing as soon as possible 15 years free schooling for all, from early childhood through Hong Kong's recently expanded 12-year school system. Sports, culture, and environmental protection were included as well.

Last but not least, or so those suspicious of his political motives hoped, came his pledges on government administration and the electoral system albeit with far more emphasis on the former than the latter. To help him implement his ambitious agenda he would need a few more posts, top officials to fill them, and lower-ranking appointees as well. The division between career civil servants and the new appointed officials (all a post-1997 addition to Hong Kong's bureaucratic establishment) would be "properly demarcated" to differentiate between political and administrative responsibilities. He wanted to expand the political accountability component with new "echelons and tiers to encourage young talents to pursue a career in politics through political appointments."

At the very end of the long list came constitutional development but he did pledge to carry out Beijing's most recent mandate. This promised universal suffrage elections for the Chief Executive and the Legislative Council by 2017 and 2020, respectively.

WHAT HAPPENED NEXT

Tell-tale indicators of his failure to grasp Hong Kong's new political reality came soon after Leung's formal March 25 election, while he was struggling to form his new administration. He was sworn in on July First, but the protests against his pro-Beijing ties and suspected communist party membership had continued non-stop from March 25. Had Leung taken seriously that opposition, he presumably would not have boasted in early June that he aimed to set the world on fire during his "First Hundred Days." No need to wait for his first policy address in October, he said. The initiatives he was planning to help those most in need would have immediate effect (South China Morning Post, June 7). Two weeks later, Ming Pao Daily did to him what it had done to his opponent during the election campaign by reporting that Leung's residence, too, had undergone "unauthorized" renovations. He had failed to acknowledge these while accusing Henry Tang of the same transgression during the campaign.

Thereafter, Leung's first hundred days were filled with nothing but trouble (Oct. 9 post). Tens of thousands marched on Day One calling on him to step down from office just hours after he had formally stepped up. A month later, tens of thousands marched down the same streets again, this time protesting the mandate he had uncritically accepted from his predecessor to introduce the new compulsory national political education course starting in September. His just-appointed Secretary for Education seemed clueless as to what all the fuss was about. The Democratic Party's then chairman, Albert Ho, went to court in an attempt to have Leung's election annulled on grounds he had misrepresented himself as a candidate by not acknowledging his unauthorized household renovations. And so it went.

Leung said his agenda could not get off the ground without the new posts and appointments he needed to begin, but these needed Legislative Council approval for the additional budgetary allocations. His intermediaries pleaded with the council, but its calendar had been disrupted by a pan-democrats' filibuster and the council refused to fast-track his request before the summer recess. At some point during the summer, it became clear that he had shelved his plan for more top-level posts and appointees. Then his office announced that he was also delaying his first policy address to the Legislative Council from October to January. The address is traditionally presented at the start of the council's legislative year. And then as the scheduled January 16 date approached, just a week after the council's historic attempt to impeach him, Leung's officials began the game of "reducing expectations."

A flashback is in order here because the best indicator of Leung's failure to grasp Hong Kong's new political reality had actually appeared some time before, in early 2010, when he was just beginning to advertise his interest in making a run for the top job. One of the ways he did this was by writing many long serious articles for the local Chinese-language press and one of these "policy vision" essays appeared in the Washington, D.C.-based Hong Kong Journal.

As Leung explained it there, the best prescription for Hong Kong's economic future was economic integration with the mainland. Consequently, he lamented the constraints in moving toward that future, which he blamed on Hong Kongers' fear of losing their political autonomy. This he dismissed as "paranoid nonsense" and blamed also the Basic Law's design for hindering the ability of its "supposedly" executive-led government to lead decisively. Hence he also dismissed demands for greater legislative responsibility and wrote that "our society has unnecessarily allowed legislators to insert themselves between government and the Hong Kong people." As he saw it, "government should engage directly with the people." **

And that was what he began to do as a candidate … until the protests at his town hall meetings grew so great soon after he won that they had to be discontinued. He knew enough to identify the source of his discomfort. But like his Secretary for Education and Tung Chee-hwa before them, Leung seemed oblivious to public fears about losing rights and freedoms, and the strength of a popular movement trying to defend them.

CHASTENED AND SUBDUED

During the past three years, Leung has learned to express his political views less bluntly. In fact, he scarcely expresses them at all so the extent to which he might have come to appreciate the value of elected representation remains unknown. But events on the ground and in the Legislative Council are at least forcing him to respect the limitations they can impose. The boasting and bravado are gone. Gone too is the promise of initiatives that will take the town by storm and bring speedy relief. Instead, his January 16 policy address was billed as a long-term five-year blueprint that sounded more like an exercise in damage control. His delivery remained confident and the populist vision remained as well, with the same special emphasis on housing and poverty, but the specifics seemed to have melted away. ***

To grow the economy, he fell back on the old Hong Kong government habit of setting up blue-ribbon advisory committees. A new Economic Development Commission and a Financial Services Development Council are tasked with identifying areas for future growth. To tackle the most pressing livelihood issues, he is reviving the Commission on Poverty, tasked to begin its work by establishing a poverty line. A Special Committee on Standard Working Hours will continue studying the problem. On housing, a new Long-Term Housing Strategy Steering Committee is to formulate plans. Meanwhile, Leung set a target of 20,000 new public rental housing units to be built each year … from 2018. The number is up from 15,000 units per year at present and nowhere near enough to meet demand. More than 200,000 households are currently on the waiting list for these public rental units.

Hardly worth the delay from October to January, scoffed his critics. Others took their cue from his title calling his maiden effort pragmatic and modest … and a wise move given his credibility problem. But the fireworks and the final step in the annual policy address ritual are yet to come. So many legislators have signed up to have their say that three days (Jan. 30, 31, Feb. 1) have been reserved on the Legislative Council's calendar for the "motion-of-thanks" debate. Legislators will then talk for hours before giving his address a final thumbs up or down. Pan-democrats have already declared their intention to tell him "no thanks" … (to be continued).

* C.Y. Leung, Manifesto for the Chief Executive Election 2012 (March 2012): www.ceo.gov.hk/eng/pdf/manifesto.pdf

** Leung Chun-ying, "Does Hong Kong Have the Policy Vision Needed for the Coming Years?," Hong Kong Journal, Jan. 1, 2010: http://www.hkjournal.org/archive/2010_spring/1.htm

*** The 2013 Policy Address: Seek Change, Maintain Stability, Serve the People with Pragmatism: http://www.policyaddress.gov.hk/2013/eng/index.html

suzpepper@gmail.com

Watch: Editor David Wertime Speaks at Harvard’s Berkman Center for Internet & Society

Posted: 23 Jan 2013 11:53 PM PST

Tea Leaf Nation's David Wertime spoke on January 22 at the Berkman Center for Internet & Society at Harvard University. The topic: "Redefining the Quote: Using the Social Web to Gauge Grassroots Sentiment in China." Our thanks go to the fellows and staff at Berkman for the kind invitation. Please have a look.