Links » Cream » South China Sea Dispute Spreads to San Francisco

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• South China Sea Dispute Spreads to San Francisco
• Photo: Dali Blue, by Michael Steverson
• Netizen Voices: Sign Brother Speaks Truth
• Gu Kailai Found Guilty of Heywood Killing
• Wang Lijun Awaits Trial, Fate
• The Daily Twit – 8/20/12: There Once Was a Woman Named Gu
• Internet Addiction: I Guess There’s No Pill for That Yet
• Wal-Mart, Yihaodian, and the Mystery of the VIE

South China Sea Dispute Spreads to San Francisco Posted: 21 Aug 2012 01:18 AM PDT How could allegations of discriminatory practices against a bank in the U.S. have anything to do with the territorial dispute in the South China Sea? Never underestimate clever activists: [Two Asian-American organizations have] accused ICBC of "not hiring, making loans or investing with Asian Americans, Latinos or Blacks," as well as the bank's "direct and indirect financing of China's military actions in the South China Sea." The organizations said ICBC's practice violates the Federal Reserve's Community Reinvestment Act requirements and the anti-discrimination requirements in the Dodd-Frank Reform Bill. According to the paper, they will be meeting with the Federal Reserve in September to request an immediate investigation and to bar, for five years, ICBC from acquiring any additional banks in the US. (Global Times) Wow, interesting. Asian-Americans going after a Chinese bank for discriminating against racial minorities, including other Asians? Definitely a legal dispute worth my time, I'd say. But wait, that's not really what's going on here. You might have noticed that these allegations include the financing of China military actions in the South China Sea. Huh? What does that have to do with racial discrimination? The answer, of course, that it doesn't. This entire kerfuffle, which I suspect is entirely bollocks, stems from the South China Sea dispute between China and the Philippines (and almost everyone else in Asia at this point). No, really. I'm not making this stuff up. The two groups who ginned up this whole thing are the The US Pinoys for Good Governance (US4PGG) and the National Asian American Coalition (NAAC) and reported by the Asian Journal, which calls itself "The Filipino-American Community Newspaper." The Asian Journal's coverage of this "protest" is inflammatory, as you'd expect. It goes back at least a year, too. Here are a couple of representative bits: Faith Bautista [President of the National Asian American Coalition] stated: "The Philippine government lacks the military force and the economic resources to defeat China. But, we can learn from past successful guerilla warfare, best demonstrated by the North Vietnamese who outlasted both the French and U.S. governments. "We will be using a jiu-jitsu effort. Our organization will seek to delay, if not fully stop the Chinese government's acquisition of all banking companies in the United States. (July 14, 2011) Rodel Rodis, the California Chair of USP4GG and a leader of the California protest, said, "We have the resources to topple the Chinese Government's largest bank and we will do so unless ICBC and the Chinese Government make clear that they want a peaceful resolution in the South China Sea." (August 10, 2012) These folks certainly are motivated, but in the end, I can't say I'm a fan of what they're doing. Going after ICBC is a clever move, seeing as how they (and the Philippines) don't have a hell of a lot of leverage. Gotta love that asymmetric warfare, Ho Chi Minh kind of thing. But mucking about with the U.S. banking regulatory process is a bit much. They're going to meet with (and waste the time of) Ben Bernanke? Come on. As to the charge that ICBC finances military action, give me a break. All the SOE banks here indirectly finance government activity, but that doesn't persuade me that the U.S. should shut its doors to all Chinese banks. Moreover, who do these guys think finances U.S. weapons sales around the globe? The World Bank? The South China Sea dispute sucks, I get that. And the Philippines has very limited options. But these Asian-American groups are not making me feel very sympathetic with this brand of activism. We've already got nationalist lunatics running around planting flags in soggy clumps of coral. This doesn't help the dialogue. © Stan for China Hearsay, 2012. | Permalink | No comment | Add to del.icio.us Post tags: South China Sea

Photo: Dali Blue, by Michael Steverson Posted: 20 Aug 2012 05:00 PM PDT Dali Blue © 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

Netizen Voices: Sign Brother Speaks Truth Posted: 20 Aug 2012 08:27 AM PDT "Sign Brother" (举牌哥) was seen at the Xinjiekou stop in the Nanjing subway last week. His makeshift sandwich board reads: Front: If you can fight for democracy and human rights, what sorrow is there in death? Back: If you cannot be free and equal, what gain is there in life? 能争取民主人权死又何哀（前） 得不到自由平等生有何益（后） Surprisingly, the text of the Weibo pictured above ("A handsome guy suddenly appeared at Xinjiekou in Nanjing, really handsome" 南京新街口惊现一帅哥，真帅) still returns search results. The username has been cut off, but this one post alone received 6062 reposts and 1452 comments. CDT Chinese has collected words of praise and caution for their brother-in-arms: ZhouYu424: Braver than going to the Diaoyu Islands. 周宇424：比去钓鱼岛更有勇气。 wudongwei: The pride of Nanjing. wudongwei：南京的骄傲 JuiceSueeze: Now this is what's f**king called backbone. 榨取剩余妹汁：这TM才叫脊梁 StudyBuddyGuoYukuan: Our compatriot is still enslaved. Sweet boy, what joy is there in life, what regret in death? 郭宇宽以研究会友:同胞还在受奴役，好男儿，生又何欢，死又何憾？ HuozhouWhetstone: One person isn't enough. We need 500 million like this… You understand. 火洲砺剑：—个人太少。。要有五亿人都这样。。。你懂的 EverywhereGspots: Front: If you cannot have a high rank and a mistress, what gain is there in life? Back: If you can fight to run naked, what sorrow is there in emigrating? Side: Party-state. //@BeautyArcher: Front: If you cannot have a high rank and a mistress, what gain is there in life? Back: If you can fight to run naked, what sorrow is there in emigrating? Side: Corrupt. 处处G点: 上联：得不到三公二奶党有何益。下联：能争取裸奔转移国又何哀。横批：党国。 //@美女射狼:上联：得不到三公二奶贪有何益。下联：能争取裸奔转移腐又何哀。横批：贪腐。 ManuIsBashensIdol: Most of us will turn up our noses at these people. We think they're good-for-nothings who can only shout a few slogans, worthless trash. But it is precisely because these people exist in China that the government has any misgivings about its actions and considers the will of the people when making policy, like with health care and land compensation. We enjoy the benefits these people bring us while mentally turning away from them. 马努是巴神的偶像：我们见到这些人，大多数人对他们嗤之以鼻。觉得他们除了会喊两句口号，什么都不会，一事无成的垃圾。但中国就是因为这些人的存在中国政府才会顾虑多点。在制定政策时才会考虑到民意。如医疗，土地赔偿。我们一边享受着这些人带给我们的利益，一边心理面歧视他们。 zd319: I hope he can get home safely. //@MiJiejie: //@ExquisiteSapphire: —>//@DummyLY: Not far from the re-education center. zd319: 希望他能安全回家//@弥介介: //@水青玉玲珑: —>//@小痴LY: 离劳教所不远了 ZhangHongfeng: The sign on his side must say: labor re-education. //@RenWeixin: Sign on his side: He will be quietly arrested. 张洪峰:横批应该是：劳教。 //@任卫新:横批：静等被抓。 UFOguest: If he's sent to labor re-education for wearing his wishes on a sandwich board, our country is beyond the pale. 幽浮客：如果因为在自己的前胸后背挂了这么两句表达心愿的话，就要被抓捕被劳教，那这个国度可真够邪乎的。 GoldenDumpling: Take a walk to change China. Surrounding and watching is a virtue. 金牌爽饺：散步改变中国，围观是种美德。 Via CDT Chinese. "Netizen Voices" is an original CDT series. If you would like to reuse this content, please follow the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 agreement. © Anne.Henochowicz for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us Post tags: democracy, diaoyu islands, Human Rights, labor re-education, mistress, Nanjing, Netizen Voices, netizens, Sign Brother, sina weibo, weibo Download Tools to Circumvent the Great Firewall

Gu Kailai Found Guilty of Heywood Killing Posted: 20 Aug 2012 06:01 AM PDT Gu Kailai, wife of deposed Chongqing Party chief Bo Xilai, and family aide Zhang Xiaojun were declared guilty on Monday of the intentional homicide of British businessman Neil Heywood. Zhang was sentenced to nine years for his lesser role in the killing, while Gu received a suspended death sentence which, like that of former business tycoon Wu Ying, will likely be commuted to life imprisonment. From Andrew Jacobs at The New York Times: The verdict and sentence appear to wrap up one of the more lurid chapters of a sweeping scandal that brought down Ms. Gu's husband, Bo Xilai, and challenged the Communist Party during a politically delicate, once-a-decade leadership transition that is set to culminate in the fall. […] Shortly after the verdict, Tang Yigan, deputy director of the Hefei Intermediate People's Court in Anhui Province, told reporters that the court weighed Ms. Gu's confession, her testimony that implicated others and the litany of psychological problems she is reported to have suffered. In the end, however, he said Mr. Heywood's threats in no way justified her crimes. […] Legal analysts and political experts said Ms. Gu's suspended death sentence was most likely calibrated to satisfy the Chinese public and the British government, but also supporters of Mr. Bo, who remains a darling among leftists and certain factions of the leadership enamored of his zealous campaign against organized crime and his efforts to address some of the income disparities that have accompanied three decades of free-market reform. The British embassy issued a statement welcoming the investigation and trial, at which two of its diplomats were present as observers, and restated its opposition to the execution of Heywood's killers. Donald Clarke at China Law Prof Blog explained the probable reality of Gu's punishment, which could ultimately be reduced to as little as nine years in prison. Gu Kailai has been sentenced to death with a two-year suspension. Under Art. 50 of the Criminal Law, if she commits no new intentional crimes while in prison, that sentence will be commuted after two years to life imprisonment. It can even be commuted to 25 years' imprisonment if she "genuinely demonstrates major merit" (确有重大立功表现). And further reductions are possible after the initial commutation. Under Art. 78 of the Criminal Law and a 2011 Supreme People's Court directive, those sentenced to life imprisonment or a term of years (including as a result of a commuted death sentence) may have their sentences reduced for good behavior (that's my own term; Chinese law speaks of showing repentance or establishing merit) during their imprisonment. And various forms of good behavior are listed, including (in the 2011 SPC directive) paying compensation. Presumably that will not be a problem for Gu. While state media have presented Gu's trial as proof that all are equal before the law, the possibility of early parole has cultivated the opposite impression. Josh Chin surveyed some online reactions at The Wall Street Journal: While censors appeared to be holding back in the first few hours after the verdict was reported, not all comments were allowed to stand. "A suspended death sentence isn't surprising at all," one Sina Weibo user wrote in a post that was quickly deleted. "From Jiang Qing to today, what government official's family member has been given an actual death sentence for committing a serious crime? It's an unspoken rule!" And although cynicism dominated the early reactions, a handful of users tried to cast the verdict in a positive light — as a development that might help turn public opinion against capital punishment. "It is extremely necessary for China to get rid of the death penalty," argued on Sina Weibo user posting under the name Ke Luomu. "Capital punishment is the only service prepared exclusively for regular people." According to WSJ Chinese editor Li Yuan, however, the verdict's moment in the Weibo spotlight quickly passed: Weiboers have moved on from GKL verdict. They probably don't really care. Now the focus is Myanmar ending censorship. When will it be China? — Li Yuan (@LiYuan6) August 20, 2012 (Myanmar announced the abolition of direct censorship on Monday, though as Reuters' Aung Hla Tun reports, other restrictions on press freedom will remain.) A number of legal scholars and other observers have expressed scepticism about the trial based on second-hand accounts of the evidence presented. On Monday, a new inconsistency apparently emerged between the official version of events and the unheard testimony of Gu's son, as reported by a family friend. From William Wan at The Washington Post: "In the testimony, Bo Guagua asserted he didn't meet Heywood and did not engage in anything with Heywood in recent years," the person said. […] The assertions attributed to Gu's son — who was studying until recently at Harvard University — cast doubts on the official narrative pushed by court officials and state-run media throughout Gu's trial. Court officials said Gu killed Heywood because he sent her son an email threatening him over business differences. Those suspicious that the woman on trial was not Gu Kailai at all received unexpected support on Sunday. According to The Financial Times, "two security experts familiar with facial recognition software said the person shown in state television footage of the courtroom was not Ms Gu." Meanwhile, still more outlandish rumours surfaced on Boxun—"which often makes claims difficult to prove", as Want China Times delicately put it—that a former rival of Gu's had been murdered, plastinated and put on display as part of the famous Body Worlds exhibition. (See a similar rumour debunked by Roland Soong at EastSouthWestNorth, via Bill Bishop). With Gu's case, for now, apparently closed, The Wall Street Journal's Jeremy Page looked ahead to future developments in the Bo Xilai saga: The next step toward concluding the scandal is widely expected to be the trial of Mr. Wang [Lijun], most likely on treason charges related to what authorities have called his "unauthorized" consulate visit. Mr. Wang, who was detained by Chinese security officers and placed under investigation after leaving the consulate, stepped down in June as a member of the national Parliament—a resignation that stripped him of immunity from prosecution. Mr. Bo, however, is still a member both of the national Parliament and of the party—official exclusion from which is usually a necessary precursor to criminal charges, according to experts on Chinese politics and law. […] If Mr. Bo is dealt with internally by the party, a final decision on his fate could be announced by the autumn, but if he is turned over to the courts, many observers do not expect a trial until next year at the earliest. © Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us Post tags: Bo Xilai, death penalty, death sentence, donald clarke, gu kailai, legal system, murders, Neil Heywood, rule of law, trials, Wang Lijun Download Tools to Circumvent the Great Firewall

Wang Lijun Awaits Trial, Fate Posted: 20 Aug 2012 04:55 AM PDT The New York Times' Edward Wong recaps the saga of Wang Lijun, the former police chief under Bo Xilai's Chongqing regime, whose early February dash to the U.S. consulate in Chengdu set off a chain of events that saw Bo purged from power and Bo's wife, Gu Kailai, convicted of murdering a British businessman. While Wang is expected to face treason charges as soon as this month, though Wong writes that his role in the Bo Xilai scandal remains cloudy: The official narrative, laid out at a trial of Ms. Gu on Aug. 9, said that Ms. Gu and Mr. Wang intended to lure Mr. Heywood to Chongqing, where Mr. Wang would then shoot Mr. Heywood in a drug-related arrest attempt, according to courtroom observers. After Mr. Wang backed out of the plot, Ms. Gu poisoned Mr. Heywood with the help of a family aide, and then confessed to the murder in a talk with Mr. Wang, who secretly recorded the conversation. The account by the official Xinhua news agency, though, barely mentioned Mr. Wang. Four policemen under Mr. Wang were tried separately on charges of harboring Ms. Gu. Legal experts and some political observers in China say some of the evidence presented in court lacks credibility. Hu Shuli, a prominent Chinese journalist, wrote Wednesday that parts of the official murder narrative had raised "suspicions." A Hong Kong television channel reported last Monday that Wang had been tried behind closed doors in Chengdu, according to The Telegraph, though no other sources have confirmed that story. See also a profile of Wang published last Friday by BBC News, as well as previous coverage by CDT. © Scott Greene for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us Post tags: Bo Xilai, Chengdu, Chongqing, gu kailai, legal system, murder, Neil Heywood, treason, Wang Lijun Download Tools to Circumvent the Great Firewall

The Daily Twit – 8/20/12: There Once Was a Woman Named Gu Posted: 20 Aug 2012 04:18 AM PDT Today was billed as a BIG NEWS day, when we'd all get to hear the verdict in the Gu Kailai murder trial. Everyone already knew what it was going to be, but like the sheep we all were, that didn't matter. It's news, damnit! Pay attention! As a result, the "news" itself was underwhelming, and since no one was paying attention to anything else today, there's nothing else to talk about. Funky. So anyway, the verdict was a suspended death sentence. Of course. If you're unfamiliar with Chinese criminal law, that basically means that she was given the death penalty, but it's commuted to a life sentence as long as she doesn't poison to death any other people in the next few years. I'll give you a couple links, but honestly, there's nothing much exciting to read about this. The best thing I've seen thus far is this bit of doggerel from @twitmericks (h/t Melissa Chan) There once was a woman named Gu Whose husband was fired in a coup The party man's wife Is now doing life And there isn't a lot Bo can do. Pretty much says it all. But if that's not enough for you: Guardian: Gu Kailai given suspended death sentence over Heywood murder — your basic news report, although at this point, you already know the punchline. Chinese Law Prof Blog: How much time will Gu Kailai actually have to serve under Chinese law? — Prof Don Clarke with some criminal law background for you wonks out there. China Law & Policy: The Trial of Gu Kailai – Did the CCP Bite Itself in the Butt? — Elizabeth Lynch muses on the big picture. NBC News: With wife's conviction, what is next for China's Bo Xilai? So yeah. The only actual news out there today concerns the clusterfuck that is the South China Sea dispute, specifically the idiot nationalists in Japan and China who are making things worse. Here's the latest: Wall Street Journal: China Conflicted Over Anti-Japan Protests — the stupid, it hurts. Caijing: Anti-Japan Protests Held in Over 10 Chinese cities — disturbing pics. Some other stuff: Global Times: Deaths in custody — Pilot program concerning treatment of prisoners. I think the idea here is to avoid those situations where prisoners mysteriously wind up dead from "drinking hot water" or "playing hide and seek." Xinhua: Addresses avoiding unlucky figures forbidden — Rather amazing. The Beijing government says it will not approve building plans that call, for example, for skipping floors with "unlucky" numbers, like four, thirteen, fourteen, etc. Somehow I have a feeling this will only be enforced against private projects, not government buildings. © Stan for China Hearsay, 2012. | Permalink | 2 comments | Add to del.icio.us Post tags:

Internet Addiction: I Guess There’s No Pill for That Yet Posted: 20 Aug 2012 03:20 AM PDT China has more than 1,500 counselors who can provide psychological treatment for children or teenagers addicted to the Internet, the Beijing Morning Post reported on Aug 20. Currently, 1,567 therapists in 83 cities provide help to young people who spend too much time daily on the Internet. The counselors provide psychological treatment and tell people how to surf the Internet in a healthy way, the report said. (China Daily) You thought it was a fad perpetuated by the brain dead, but no, Internet addiction appears to be going strong as a made-up ailment. It's important of course that these fake illnesses can be cured of course. If they were incurable, then no one could make any money off 'em. Thought experiment: in one room, put a Net addiction counselor with one of his patients, and in another room, do the same with a gay man and an American religious "Pray Away the Gay" counselor. Start the clock. Who gets "cured" fastest? Will the gay man find Jesus and instantly become straight, or will the Net addicted kid discover the joys of educational web sites instead of porn and MMORPGs? What I think is that the gay "patient" who, at least for the moment, thinks he's straight, will now spend all of his time online watching porn, perhaps necessitating the need for a Net addiction counselor. There's no free lunch, folks. The moral of this story: there is no limit to the stupidity that the human mind can create, and then unfortunately force upon others. © Stan for China Hearsay, 2012. | Permalink | No comment | Add to del.icio.us Post tags:

Wal-Mart, Yihaodian, and the Mystery of the VIE Posted: 20 Aug 2012 02:16 AM PDT It didn't take long for the usual suspects (i.e., foreign investment lawyers) to start chattering about the significance of the reference by the Ministry of Commerce to VIEs in its conditional approval of Wal-Mart's purchase of a controlling stake in e-commerce giant Yiahodian. I wrote about the deal and the approval last Friday. I've since had a chance to look at the actual approval language (in Chinese) as well as some of the conversations that have ensued, including this brief article from British firm Herbert Smith. In my post last week, I did not make a big deal of the VIE aspects of this case because frankly I didn't see it as the central issue, and besides, it didn't appear as if the MOFCOM ruling changed anything with respect to the legality of the VIE structure. I think I'm going to stick with that thinking. However, in light of the Herbert Smith article and other speculation out there, I figured a further comment might be a good idea. Let me start off by saying that I haven't yet read anything that suggests anyone really knows for sure what that MOFCOM ruling really means for VIEs. No, seriously. I've read it myself, along with several interpretations, and I have to say, more than one of them sounds feasible. I think I understand the shareholding structure at this point: 1. Wal-Mart was a minority shareholder of a company called Niuhai, which has a Hong Kong offshore structure as well as one or more onshore subsidiaries. Niuhai is the entity in which Wal-Mart increased its shareholding. 2. Yishiduo is a Chinese company HQ'd in Shanghai that is the holder of the necessary VATS license required to operate the Yihaodian e-commerce platform. This is the VIE. 3. Presumably, Niuhai's onshore company and Yishiduo have several contractual arrangements we all know and love, the basis of the VIE structure. OK, in other words, Niuhai was basically doing some old-style round-tripping, which means money from China was taken offshore and used to capitalize a foreign entity, which was in turn used to set up one or more foreign-invested enterprises. The original investor was Chinese, but the companies in China were considered foreign under Chinese FDI law. Classic stuff. Wal-Mart wanted to buy out one of the investors' offshore holding, which triggered the anti-monopoly review. Wal-Mart, therefore, was not buying the e-commerce operating platform directly, therefore, only the foreign portion and its rights under the VIE. So all is clear? Not exactly. The problem, as usual, is that the language from MOFCOM is mushy and unclear. Welcome to China law. FYI, the language in question is the following: （一） 纽海上海此次收购，仅限于利用自身网络平台直接从事商品销售的部分。 （二） 在未获得增值电信业务许可的情况下，纽海上海在此次收购后不得利用自身网络平台为其他交易方提供网络服务。 （三） 本次交易完成后，沃尔玛公司不得通过VIE架构从事目前由上海益实多电子商务有限公司（益实多）运营的增值电信业务。 Before you Chinese speakers out there say "Hey, that language doesn't look all that complicated," take another look and explain to me exactly what it means. I'm genuinely not sure. For example, in that third paragraph, when it says that Wal-Mart may not use the Yishiduo network, via the VIE, I cannot really say for sure what that entails. I hope that Wal-Mart understands what it can/cannot do. Obviously Wal-Mart cannot jump on the Yishiduo platform and start expanding it as a Wal-Mart business, offering services to third parties. That would be a pretty blatant use of a restricted license. Similarly, it also seems clear that Niuhai (i.e., Wal-Mart) can use its own network, although I have questions there as well. The Herbert Smith article includes the following reaction: The imposition of these conditions appears to be primarily driven by MOFCOM's concern over the potential use of the VIE structure by Walmart to operate essentially a VATB business without obtaining the requisite foreign investment approval. I disagree with the emphasis here. Yes, it's true that MOFCOM is concerned about Wal-Mart's potential use of the Yihaodian platform. This is a normal competition law issue, one that we would expect in such a conditional ruling. The presence of the VIE is however, at least in my mind, purely incidental. This deal happens to involve a VIE structure, and so if Wal-Mart was going to abuse a post-deal dominant position by using the Yihaodian platform, then yes, that would include its VIE structure, a key asset. In other words, MOFCOM isn't so much worried about Wal-Mart's use of a VIE per se, but rather with a possible market concentration that could, in part, be built upon a VIE. Does that make sense? So has MOFCOM said anything concerning VIEs that is significant? Herbert Smith suggests yes, but is cagey about it: The MOFCOM approval therefore is the first time that the VIE structure has been expressly mentioned by a PRC authority. It should be noted that the approval itself does not expressly say the use of such structure is illegal. Accordingly, it remains to be seen whether MOFCOM will take any further action in this regard. There are three ways I could argue this. Being a lawyer, this comes second nature to me: 1. MOFCOM's warning about the use of the Yishiduo VIE suggests that it is adopting a policy of closer scrutiny of such structures. Investors beware! (King & Wood's Susan Ning supports this interpretation.) 2. MOFCOM's specific acknowledgement that the target company for which it is giving an approval operates a VIE structure is as close to a formal recognition of the legality of VIEs that we are going to get. Investors celebrate! 3. MOFCOM's chief concern with this approval was competition in the retail space. Yihaodian could just as easily owned the country's largest trucking or warehousing business instead of a VIE-operated e-commerce platform. MOFCOM seems neutral on VIEs and will probably only deal with them on a case-by-case basis. Investors go back to sleep! Me, I'm kinda thinking Argument #3 makes the most sense, but I'll admit that I'm speculating along with everyone else out there. © Stan for China Hearsay, 2012. | Permalink | No comment | Add to del.icio.us Post tags:

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