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• Photo: Chute, by Christopher Cherry
• China to Promote Water Efficiency Through Pricing
• China, Bhutan Ready for Diplomatic Relations
• Sensitive Words: Chinese Flag on Hu’s Shoe
• The Status of Fakery in China
• Scenes From 21st Century China
• The Daily Twit (@chinahearsay links) – 6/22/12
• Why Are We Still Talking About China’s Rare Earth Export Quotas?
• Apple’s China Success: TIME Asks the Wrong Question
• Ai Weiwei Refuses to Live in Fear (Updated)

Photo: Chute, by Christopher Cherry Posted: 22 Jun 2012 10:41 PM PDT Chute © Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us Post tags: Download Tools to Circumvent the Great Firewall

China to Promote Water Efficiency Through Pricing Posted: 22 Jun 2012 11:19 PM PDT China's latest water conservancy plan will include a system of progressive pricing to discourage excessive consumption. The country's best known efforts to confront its deepening water crisis have been titanic engineering projects aimed at securing supply. The task of moderating demand is in some ways trickier but at least equally necessary, and pricing can be an effective strategy. One major complication that the government hopes to untangle is the burden on farmers, who use a great deal of water but can ill afford to pay more for it. From Xinhua (via China Water Risk). China will also adopt high water rates for water-intensive industries and encourage reusing recycled water, according to the plan distributed by the National Development and Reform Commission (NDRC), the top economic planner, and two other ministries on Thursday. For rural residents, the country will explore ways that give them price discounts when their water use is within set quotas and calculate prices progressively when they use more than the quotas, said the plan, which was made for the 2011-2015 period. The pricing reforms are part of government efforts to make prices of resource products and energy better reflect market demand and to save natural resources and energy amid growing supply pressure in the world's second-largest economy. © Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us Post tags: farmers, government policy, water conservancy, water crisis Download Tools to Circumvent the Great Firewall

China, Bhutan Ready for Diplomatic Relations Posted: 22 Jun 2012 10:15 PM PDT Amid frustration at the outcome of the United Nations Conference on Sustainable Development in Rio—which The Guardian's Jonathan Watts gloomily compared with a 1930s League of Nations assembly—a side meeting between Wen Jiabao and Bhutanese prime minister Jigmi Y. Thinley does appear to have borne fruit. From the AFP: "China is willing… to establish formal relations with Bhutan, resolve the border issue between the two nations at an early date, strengthen exchanges in all areas and advance Sino-Bhutanese relations to a new stage," Wen said. China appreciated Bhutan's support for the "one China policy" which maintains that Taiwan and Tibet fall under China's sovereignty, Wen said. Bhutan has maintained very limited formal bilateral relations with other nations, according to The Hindu's Ananth Krishnan, though this has started to change: Bhutan, which enjoys close diplomatic, political and military relations with India, has in recent years begun to widen its diplomatic engagement, establishing relations with another country in the region, Myanmar, earlier this year. Bhutan also has diplomatic ties with Nepal, Bangladesh, Sri Lanka, Pakistan and the Maldives, but does not have formal relations with either the United States or the four other permanent members of the UN Security Council. © Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us Post tags: Bhutan, border disputes, diplomacy, jonathan watts, one-China policy, Taiwan, Tibet, UN Security Council, Wen Jiabao Download Tools to Circumvent the Great Firewall

Sensitive Words: Chinese Flag on Hu’s Shoe Posted: 22 Jun 2012 01:41 PM PDT As of June 21, the following search terms are blocked on Weibo (not including the "search for user" function): Hu Jintao "Picks Up" the Flag: Lining up for a photo at the G20 summit, the sticker of the Chinese flag marking his place got stuck to his shoe. In addition to the sensitive words below, footage of Hu's gaffe has been removed from video sharing websites. Chairman Hu (胡主席) pick up the flag (捡国旗) make a show (作秀) Reuters (路透): retest ."] Post text: Kainy: Step on it! Let's all step on it together: "Video: G20 Leaders Photo full version" http://t.cn/zWZgn6U (via @YouKuInfo). Screen text: This video has been removed. Try searching here [link   Other: wire story (通稿) 9000 years old (九千岁) toad (蛤蟆): retest hunger strike (罢餐): retest. Students at the Beijing University of Aeronautics and Astronautics are on hunger strike to protest rising cafeteria prices. Note: All Chinese-language words are tested using simplified characters. The same terms in traditional characters occasionally return different results. CDT Chinese runs a project that crowd-sources filtered keywords on Sina Weibo search.  CDT independently tests the keywords before posting them, but some searches later become accessible again. We welcome readers to contribute to this project so that we can include the most up-to-date information. To add words, check out the form at the bottom of CDT Chinese's latest sensitive words post. © Anne.Henochowicz for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us Post tags: blocked words, filtered words, G20, Hu Jintao, sensitive words, sina weibo, weibo Download Tools to Circumvent the Great Firewall

The Status of Fakery in China Posted: 22 Jun 2012 01:33 PM PDT China is infamous for the production of counterfeit consumer goods that occurs within its borders. From high-tech electronics to wine, Renaissance-era fine art to shellfish, if there is a market for something, someone is likely trying to fake it. While the central government has made moves to curb this practice, a penny-wise public's desire to conspicuously consume keeps fake products flowing within China's shanzhai markets, and out into to the world. While the quality of counterfeited products usually pale in comparison to the real thing, many consumers sacrifice craftsmanship for prestige in their quest to "keep up with the Wangs". An article in The Economist explores the driving forces and overall implications of China's fake luxury industry: Economists and policymakers around the world want China to consume more. They are eager for it to reduce its dependence on investment, which amounted to almost half of GDP last year. No economy that invests so heavily can possibly invest it all wisely. Economists therefore worry about a widespread misallocation of capital, or "malinvestment". But some of China's consumption is also a bit questionable. [...]A Prada handbag is a bundle of two things: a well-made product and a well-marketed brand. But some consumers value prestige, not quality. Fakes allow shoppers to "consume" the prestigious brand without buying the high-quality good, as Gene Grossman of Princeton and Carl Shapiro, now of the University of California, Berkeley, pointed out in a seminal 1988 paper. This unbundling no doubt drives Prada and others mad, but it would seem to be a boon to consumers. But it is possible that buying genuine luxuries imposes an externality of its own. Status, after all, is a "positional" good. To be top of the social heap, it is not enough to have fine things. Your things need to be finer than everyone else's. Someone who buys a more expensive watch or car to climb up the social ladder forces other social climbers to spend more to stay ahead. In making their purchase, they will carefully weigh how much prestige their big spending will buy. But they will not take into account how much extra everyone else will now have to spend to preserve their social position. As a result of these "arms races", China may be overspending on luxury goods. Its shoppers account for only 6% of the world's consumer spending, but, according to figures released by Bain Consulting last month, they now account for 20% of global sales of luxury goods. A blogpost from The Economist covers the same topic, mentioning a paradox born from the desire to impress: If a customer falls for a fake, they obviously lose out. That is a clear example of malconsumption. But many buyers are not duped by their purchase; they want their purchase to fool everyone else. No doubt they often succeed, passing off a counterfeit good as the real thing. But in China, fakes are so widespread, the opposite danger also looms: genuine articles may be mistaken for fakes. Yue Li of Nottingham University (Word doc) cites one Chinese shopper who wrote the following on an online discussion board:  Even if I bought a real one, it's really embarrassed [sic] if other people think it's fake, should I explain to everyone that it's real? A Global Times article briefly summarizes the topic, and provides some pictures of ambiguously branded products: While China's rich rival their foreign counterparts in conspicuous consumption, poorer Chinese are no strangers to these brands, either. Fake products are easily available at street stalls and some big markets at very cheap prices. Other goods sell under domestic brand names, but are virtually indistinguishable from famous global labels. The authorities have repeatedly launched anti-counterfeiting campaigns in recent years, but the effects so far have been barely visible in the marketplace. So when somebody proudly brandishes their handbag or wears a new designer shirt, it might mean profits for Paris or Milan, or, more likely, another shanzhai product fresh off the line. Chinese made fakes are not only found in upscale consumer markets. Practical and essential products and commodities like medicine or cooking oil are also reproduced. Sometimes, counterfeiters target foreign markets. ABC News reports on a shipment of fake train tickets found in Italy this week: Italian police are not surprised when they find counterfeit goods from China, but were taken aback to find $35 million worth of counterfeit train tickets for Rome's "Leonardo express" train on a ship that arrived from China. Police in the Tuscan port of Livorno discovered over 2 million Chinese-made counterfeit train tickets stashed in 28 cardboard boxes at the back of a container meant to be carrying office furniture and postcards. The tickets were all for the Rome central train station-airport "Leonardo express" train which sells at 14 euros ($19) a ticket. The National Journal reports on a new bill designed to keep nearly indistinguishable counterfeit microchips out of the US military's supply chain. A flawed Department of Homeland Security policy has opened the "floodgates" to counterfeit microchips from other countries, Rep. Mike McCaul, R-Texas, said on Thursday as he announced a bill designed to stem the tide. "This is a tremendous national security risk to our military and our intelligence networks," McCaul, who chairs the House Homeland Security Oversight and Investigations Subcommittee, said in a statement. He said that in 2008, DHS officials stopped providing companies with photos, serial numbers, and other information needed to identity fake microchips. That policy, McCaul said, allowed the United States military to buy nearly 60,000 counterfeit microchips from China in 2010. Corrupt microchips were discovered in Navy anti-submarine helicopters and aircraft, as well as military cargo planes, according to a Senate Armed Services Committee investigation. © josh rudolph for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us Post tags: counterfeit goods, counterfeiting, fake goods Download Tools to Circumvent the Great Firewall

Scenes From 21st Century China Posted: 22 Jun 2012 11:21 AM PDT Alan Taylor's In Focus, a regular photo blog on The Atlantic's website, put China in its frame for an edition earlier this week. By compiling a collection of powerful images caught by photojournalists over the past few weeks, Taylor provides us a glimpse into the diverse and captivating political and cultural landscape that makes up China. The images selected juxtapose an assortment of scenes from across the nation, showing beauty and inequity, the traditional and the trendy, the prosperous and the displaced, and more of the contradictions that make up modern China. From Taylor's intro: China, the most populous country and the second-largest economy in the world, is a vast, dynamic nation that continues to grow and evolve in the 21st century. In this, the latest entry in a semi-regular series on China, we find images of tremendous variety, including astronauts, nomadic herders, replica European villages, pole dancers, RV enthusiasts, traditional farmers, and inventors. This collection is only a small view of the people and places in China over the past several weeks The subjects of the 47 pictures included visually supplement much recent CDT coverage of China: Liu Ying – China's first female astronaut; Wang Jinxiang – mother of activist Chen Guangcheng, caught in the fallout of his recent escape; a Uyghur man in the ruins of his recently demolished house; victims of China's increasingly endemic obesity problem; a scene from inside China's clone of an Austrian world heritage site; a young Tibetan monk mourning a protester who died in self-immolation; a Hong Kong street brimming with protest after Li Wangyang's suspicious suicide; and much more. For more photo-documentation of a changing China, also see In Focus's previous China slideshows: Tiananmen Square, Then and Now; A Look Inside China; Rising Protests in China; or 21st Century China. © josh rudolph for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us Post tags: journalism, modern life, photography Download Tools to Circumvent the Great Firewall

The Daily Twit (@chinahearsay links) – 6/22/12 Posted: 22 Jun 2012 06:10 AM PDT We're sliding into a holiday weekend here in China, so rev up your Dragon Boats, eat some sticky rice, and try to ignore the stifling, pollution-choked air. For some holiday fun, check out the doodle over at Baidu; it's interactive and festive. Or you can just read some news: Time Cover Story: The Cult of Apple in China — I spent a bit of time myself today responding to one sentence in that article that suggests China doesn't want foreign companies to succeed. Weird. You can read my post here. Reuters: China's Evergrande mulls legal defense against fraud accusations — You recall the story of Citron Research victim Evergrande from yesterday. Today's news is the "equal and opposite reaction" in the short selling universe. There's only a remote possibility Citron will actually get sued, but if they do, no need to worry. I assume they have good lawyers and suitable insurance. China Economic Watch: The Chinese Growth Model: Before and After the Crisis — What will this latest economic downturn mean for China's traditional investment-led growth model? Everyone's been waiting for rebalancing, but I don't think we're going to see it this year. Bloomberg: China Said to Propose Limits on Local Government Loans — Be thankful you're not in charge of China's economic policies. On the one hand, the government needs to stimulate the slowing economy. One way of doing that is to encourage infrastructure investment. On the other hand, the nation is still suffering a hangover of nonperforming loans from the 2008/9 round of stimulus that did that very thing. So Beijing is going to try targeted stimulus while restricting the local guys. Good luck. Silicon Hutong: China's Shipyards on the Ropes — More effects of the economic downturn. Shipyards are hurting, and the Navy could be the beneficiary. An angle I never would have considered. Forbes: Donations to charity in China dropped by nearly 18% last year amid scandals — You might know about China's various "confidence" problems. Folks don't trust local government, the food they eat, etc. But because of some very well publicized scandals involving charitable organizations, this confidence crisis is having serious effects. And this was before the economic slowdown. Jack Perkowski: Behind China's Rare Earth Controversy — I know I hit on this topic a few days ago, but this is a great backgrounder on the topic and also explains why China's quotas might not be much of a headache for the U.S. in the very near future. As to why the U.S. might still file a dispute with the WTO anyway (or at least keep threatening to do so), here's my take on the subject. Economic Observer: Cops In China Use Public Humiliation As Crime Deterrent – And Have Fun To Boot — If you've dealt with a lawsuit over here in China, you might have some experience with the "public apology" remedy. Still popular in the Middle Kingdom. As this article shows, the criminal justice authorities have also not given up on public humiliation, including classics like locking folks up outside in public, and parading criminals through the streets in chains. Xinhua: China arrests suspected foreign robber — Oh boy. Being an expat has been more difficult than usual this year, given new "show us your papers" laws, a few nasty incidents involving foreign assholes, and of course the rants by famous nationalist jackoffs. Then we had the expat who was beaten to death, which sparked a protest. And now, in the same province, we've got this arrest of two "dark-skinned" expats accused of being armed robbers. China Daily Show: Self-immolating monk sacks publicist — Something fun to get your weekend started. It's funny 'cause there's a little bit of truth there. By the way, this is the end of the first week of the new and improved The Daily Twit. Seems like the number of links has been hovering around 10 most days. I'd change the name to "Top Ten" or something catchy, but top ten lists are the kind of things put together by search engine optimization douchebags, so I'll hold off on that for the time being. © Stan for China Hearsay, 2012. | Permalink | No comment | Add to del.icio.us Post tags:

Why Are We Still Talking About China’s Rare Earth Export Quotas? Posted: 22 Jun 2012 05:51 AM PDT China's big media push justifying its rare earth export limits is a few days old, but I wanted to briefly revisit it to recommend Jack Perkowski's Forbes column on the subject: The timing of the WTO action by the U.S., the EU, Japan and Canada is curious, though, because it appears that market forces are already correcting the current imbalance. Molycorp is in the process of modernizing and reopening its Mountain Pass mine, which is expected to come online later this year. A study by the U.S. Defense Department published in March, the same month that the WTO complaint was filed, found that the stranglehold that China has on rare earth production could be coming to an end with the opening of new production facilities in North America. If the WTO dispute is unnecessary, why might it still go forward? I can think of three good reasons. First, you never know. Sure, it looks like North American rare earth supplies will solve the problem, but it hasn't happened yet. Second, and more important, legal precedent. Just as the raw materials case set a precedent regarding export quotas, a rare earth quota win would seal the deal, making it very difficult for China, or anyone else, to institute a similar program in the future. Third, if the U.S. thinks that it has a strong legal case and has the evidence to back it up, why give up on something that can be used as a bargaining chip? China doesn't want to lose the case and suffer a public loss of face backtracking on a policy that it just this week so strongly supported. If I'm a U.S. trade negotiator, I want the threat of a WTO dispute like this in my back of tricks when I come to Beijing for bilateral talks. © Stan for China Hearsay, 2012. | Permalink | One comment | Add to del.icio.us Post tags: rare earth exports, world trade organization

Apple’s China Success: TIME Asks the Wrong Question Posted: 22 Jun 2012 03:21 AM PDT This week's Time magazine cover story is entitled "The Cult of Apple in China" and includes, from what I can tell, a decent rundown of the reasons behind Apple's strong performance in the Middle Kingdom. I haven't actually read the full story, since it is available only to subscribers and it's been many years since I bothered paying for a news weekly. Plenty of other folks have reported on the article, though, and Time itself has published a companion piece. Without knowing the complete context within which this sentence appeared, I was nevertheless taken aback when I saw the following excerpt: How much longer will an increasingly nationalistic government allow foreign companies like Apple to profit so handsomely on its shores? Fascinating. The implication here is that Beijing will only permit foreign companies a modicum of success before it firmly places a Communist boot on that foreign investor's neck, putting that company in its rightful place. Well yes, that certainly has happened in the past to some foreign firms here, but how likely is it that Apple will suffer the same fate? Before we can answer that question, we have to look at what has happened to other foreign enterprises that have experienced catastrophic problems in China. Entire books have been written on this subject, so allow me to generalize a bit. Why do foreign companies fail in China? Of the myriad business and legal difficulties, we should probably zero in on issues directly or indirectly related to government action. After all, the rhetorical question posed in the Time cover story suggests that it is the government itself standing by and monitoring Apple's profitability, and waiting for the right time to strike. So what can the government do if it wishes to sabotage a foreign company? Quite a number of things of course. First of all, every company in China, foreign or domestic, must pass an annual review. If the government was hell-bent against a foreign investor, it could simply instruct local officials to withhold the green light on that annual review. That being said, the government simply doesn't do that sort of thing. Too obvious, too in-your-face protectionist. Most governments are smarter than that. Similarly, many companies can only maintain their operations because of one or more regulatory licenses that they hold. Indeed, Apple, either directly or through its distributors, is beholden to the government in this regard. You can't do much as an electronics/telecom company without securing one or more regulatory licenses. So there is that. Have other foreign companies been essentially shut down over the failure to renew regulatory licenses? Certainly some have, but I wouldn't call that tactic common when it comes to government intervention into a specific sector or with respect to an individual company; even Google has had some of its licenses renewed since its much-publicized tiff with Beijing over Internet censorship. The government is much more likely to proactively set up high barriers to entry in a specific sector using regulatory licensing, and this kind of licensing regime is usually tied in to other policy initiatives. I'm thinking, for example, of what happened with online video file sharing a number of years ago, where an entirely new set of requirements and rules were set up to restrict investment and monitor operators. Alternatively, the government could selectively enforce any number of laws. The Time cover story mentions labor issues a number of times. If the government really wanted to smack Apple around, couldn't it go after Apple's local manufacturing partners, such as Foxconn? Yes, I'm sure there are some labor violations going on down south that could come into play, but remember that Foxconn is a huge employer and taxpayer in Guangdong and elsewhere. Moreover, if the government went after Apple's partners and not other labor law violators, the charges of selective enforcement and protectionism would be nasty. I don't think the government really wants to mess around in that sandbox. Where else can we look for possible government meddling? If we want to focus on the most likely kind of foreign company that can run into trouble in China, we have to talk about patented technology. As I've written about for years, China's economic planners have established a certain number of key industries important to the nation's future and continued development. In each of these sectors, national champions have been established in a variety of ways; these are pretty much always State-owned enterprises. What happens to a foreign company that has the ability to compete against one of these national champions? Well, first of all, foreign investment restrictions usually take care of the problem at the outset. However, if the sector has not been closed or restricted, there are indirect measures that can be taken to ensure that a national champion maintains its dominance. As it so happens, many of these key sectors involve high-tech products, many of which are patented. A lot of this know-how or patented technology has therefore been brought onshore and transferred to Chinese companies. In some instances, the patents of foreign entities have even been invalidated. We begin to get a good picture of what kinds of companies the Chinese government will not, to paraphrase the Time cover story, allow to flourish. So what about all the rest? Surely there are a whole lot of foreign companies that are doing quite well here. Why are they allowed to profit when a Chinese domestic counterpart could be substituted in its place? There are two answers. The first is that many successful foreign invested enterprises in China have strong brands and are expert at marketing. For example, there are numerous cola products out there in the marketplace, but Coca-Cola is doing just fine all over the world. Certainly the product itself has something to do with this, but branding and marketing are just as important, if not more so. The "domestic alternative" approach was tried by a cola company a few years ago, and its marketing campaign failed miserably. Which brings us to Apple. There are many iPhone competitors, for example, and there are many iPhone copycats. Why does the iPhone continue to sell so well in China? Several reasons no doubt, but a lot of the success relates to branding, marketing, image, and consumer trends amongst the upper and middle classes here. Are these things that the government could easily take away, substituting a domestic competitor in Apple's place? I don't think so. The second answer, and my general response to that key line in the Time cover story, is that the government here has no problem with foreign companies being profitable. The situation with key industries and national champions are special cases, not the rule. Why are companies like Coca-Cola, Unilever, and Nike allowed to do so well in China? For the same reasons that they do so well in many other countries. There is no Communist cabal in China waiting in the wings to sabotage every successful foreign invested enterprise. Even that suggestion smacks of ignorance and misguided ideology. Apple is not being "allowed" to do well in China, it simply is doing well. © Stan for China Hearsay, 2012. | Permalink | One comment | Add to del.icio.us Post tags: apple, protectionism

Ai Weiwei Refuses to Live in Fear (Updated) Posted: 22 Jun 2012 02:04 AM PDT Writing at The Guardian, Ai Weiwei reflects on his 81-day detention, which ended a year ago today. I often ask myself if I am afraid of being detained again. My inner voice says I am not. I love freedom, like anybody; maybe more than most people. But it is such a tragedy if you live your life in fear. That's worse than actually losing your freedom. […] Reflect on Bo Xilai's case, Chen Guangcheng's and mine. We are three very different examples: you can be a high party member or a humble fighter for rights or a recognised artist. The situations are completely different but we all have one thing in common: none of us have been dealt with through fair play, open trials and open discussion. China has not established the rule of law and if there is a power above the law there is no social justice. Everybody can be subjected to harm. I'm just a citizen: my life is equal in value to any other. But I'm thankful that when I lost my freedom so many people shared feelings and put such touching effort into helping me. It gives me hope: Stupidity can win for a moment, but it can never really succeed because the nature of humans is to seek freedom. They can delay that freedom but they can't stop it. Ai's one year probation has now been lifted, according to Edward Wong at The New York Times: "They told me they had lifted the probation because I had behaved well all year," he said in a telephone interview as he was dining at a restaurant in Beijing's Sanlitun neighborhood. "It really surprised me because I violated almost every rule they imposed." Before Mr. Ai was released from detention last year, the police said he had to refrain from talking to foreign journalists and could not use Twitter. But Mr. Ai regularly talks to journalists and uses Twitter daily. Mr. Ai said the police did not give him back his passport. "You don't need it," Mr. Ai quoted one officer as saying. The officer then said that on Monday the police would return the passport and computer equipment they had seized. Despite the promised return of his passport, Ai has been told that he still may not leave China as he may face charges of pornography, bigamy and illicit exchange of foreign currency, as Reuters' Sui-Lee Wee explains. The pornography charges revolve around images, posted online "as a joke", of Ai posing naked with a group of women. When the threat of prosecution first emerged late last year, supporters posted a barrage of nude photos online, while the original images sparked further controversy by tripping Facebook's nudity alarms. "We never even touched each other," Ai said. "It's nothing. Nobody will say that's pornography. I asked them why this is pornography. They said under our policy, if there's nudity, if people try to open a file many times, like over 1,000 times, that's pornography. They have a law like that, which is ridiculous." Ai, who is married, also denies the charge of bigamy. He openly meets a girlfriend and has a three-year-old son from that relationship. On the possible charge of "illicit exchange of foreign currency", Ai said police told him that it concerned a project in 2008, when he invited 100 foreign architects to Inner Mongolia and arranged for a Swiss gallery to pay them in euros, while he got yuan currency in return. Last July, Ai accepted a visiting lecturer post at the Berlin University of Arts, even knowing that once outside China, he might be unable to return. The continued bar on international travel will postpone this still further, but Ai may in any case now be less inclined to take the attendant risk. He told The Telegraph's Malcolm Moore recently that "'it has never been important to stay, until now …. When I went to New York in 1981, I vowed never to come back.' But he has now become so emotionally involved, and has such faith in the twin powers of the internet and globalisation to change China, that he cannot bring himself to leave." The expiration of Ai's probation coincided with a hearing in his lawsuit against local tax authorities, whose case against him, he claims, was riddled with procedural irregularities. Ai was prevented from attending the hearing. His legal advisor Liu Xiaoyuan went missing, and was then forced to leave Beijing; potential supporters were placed under watch and, in Hu Jia's case, reportedly beaten; posts about Ai including some memorable photos of him posing in a police uniform were removed from Sina Weibo; and in the courtroom itself, his lawyers were prevented from giving evidence, while all public seating was filled with paid attendees to keep supporters out. From NPR's Louisa Lim: On Wednesday, a Beijing court heard Ai's challenge to tax authorities demanding almost $2.5 million in back taxes. Ai was ordered to stay home, so he missed the eight-hour-long hearing. He said the court did not allow his lawyers to read the existing evidence, submit new evidence or call witnesses. Ai noted the irony of a public hearing in which the defendant wasn't allowed to attend and the public seats — all five of them — were occupied by people paid to be there. "Those five seats they assigned to their own people," he said. "After three hours, these five people, they completely have no interest in case. They ask can they leave, 'We didn't know it would last for so long.' And the court tells them that no, you cannot leave, you have to stay here until the case finishes and we'll pay extra money for it. So they just take a nap in the court." So far, there has been no verdict from the hearing. Update: Ai gave CNN a pessimistic and disheartened interview on his legal battle: "I feel very sad, very miserable, actually," he said in an interview Friday with CNN at his studio in Beijing. […] He said more than forty police cars and hundreds of officers surrounded his home. "You just cannot go, if you try, you cannot make it," he claimed the police told him. Public buses were also prevented from stopping in the area of the court," he added. "They use the tax case to crush me but they don't want me to show up because…all facts can be revealed." Ai likened the court proceedings to a "very bad play" and said he was feeling "very discouraged" and "powerless." "The outcome is very clear. The court works for the police; the tax bureau also works for the police; the police is becoming a superpower in China…And they decide everything because we have a policy: it's called 'maintain stability'…But what is stability? Is it stability of the nation? Or of the people? Or stability of the controller?" In another interview for the BBC, Ai also expressed his disappointment at the extension of the ban on international travel: "My feelings are very mixed," he said. "They told me I cannot leave the nation. I asked them for how long and they said: 'We cannot answer you'. It seems very disappointing." The artist said he would like to go to both the UK and the US later in the year for work, but did not know whether it would be possible. "It comes as a surprise they will not let me travel, because you cannot give somebody freedom and say there are strings attached," he said. While the inability to travel abroad for his work is clearly a source of frustration, Reuters' Mike Collett-White writes that the overall effects of the government's restrictions on Ai's career are somewhat mixed. On one hand, his absence increases his allure among Western collectors; on the other, political sensitivities appear to have dampened enthusiasm among the Chinese collectors who have driven up other artists' prices. There is little doubt Ai's outspoken views and subsequent travails have placed him at the "high table" of contemporary art in the West, although many of his works are not overtly political and their conceptual nature limits their market value. "In terms of his impact, it makes him an even more important artist," said Anders Petterson, head of ArtTactic which analyses trends in the art market, commenting on the latest headlines. […] While significant, Ai's commercial value pales in comparison to other Chinese contemporary artists, and prices for his works have not skyrocketed in the same way. Before this year, his auction record stood at $657,000 for "Chandelier" set in 2007. By comparison, the contemporary Chinese auction high is held by Zhang Xiaogang, whose "Forever Lasting Love" sold for just over $10 million at Sotheby's in Hong Kong in April 2011. © Samuel Wade for China Digital Times (CDT), 2012. | Permalink | One comment | Add to del.icio.us Post tags: Ai Weiwei, Bo Xilai, Chen Guangcheng, courts, detention, Hu Jia, legal system, Liu Xiaoyuan, pornography, tax evasion Download Tools to Circumvent the Great Firewall

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