April 2012 by China Newsweek Corporation

Cadmium Leaks: Mines Over Matter INTERNATIONAL

Sudan Hostages: Brutal Business POLITICS

Wu Ying: Capital Criminal?

HAN, SOLO

Why celebrity author Han Han’s call for political moderation divided China’s blogosphere

$4.99 www.newschinamag.com

Volume No. 044 April 2012

SPECIAL REPORT

NEWSCHINA I April 2012

EDITORIAL

Published by China Newsweek Corporation Publisher: Liu Beixian Executive Directors: Liu Beixian, Zhou Jianming Editor-in-Chief: Wang Xiaohui

China Has Risen. Now What?

i Jinping’s visit to the US was the perfect quickly as old rivalries and political differences opportunity to set the tone for China’s are forgotten. In the foreseeable future, China’s relationship with the rest of the world realignment of its international priorities will be in the coming decade. China’s presumed future a major talking point. president certainly rose to the challenge with more Where will China be in 10 years? With the aplomb than previous leaders on State visits, with nation’s rise, China threat theory has swept the US and Chinese observers alike impressed by his globe, followed closely by a more restrained scrucandor, warmth and selftiny of the country’s acassurance. tions, and its motivations. China is changing, as China’s increasingly proare its leaders. Despite active role in defining its In the foreseeable future, its ascendance to world relationship with the rest China’s realignment of its superpower status, China of world is partly responinternational priorities will largely kept itself aloof sible for this sea change, be a major talking point. from world politics after as Beijing has shifted the communist victory from a policy of “wait in 1949. Absorbed with and see,” to a pledge of a domestic political and “peaceful rise.” The censocioeconomic turmoil, tral government’s most on-off relations with the recent commitment, to Soviet Union, and a rigidly isolationist policy creating a “harmonious world,” is its most supertowards almost all other nations, China seemed ficially utopian and ambiguous pledge to date. stuck in an ideological rut for generations. Even Just as there are debates in the US whether since normalizing relations with the US in the China should be seen as friend, enemy, or nei1970s, setting sweeping economic reforms in ther, there is debate within China on whether the motion and taking its place on the UN Security US will attempt to contain its biggest rival for Council and in the World Bank, China has not global supremacy. Others question the relevance formulated a stable, comprehensive long-term of such speculation, instead asking whether Chistrategy for its role in world politics. This has left na’s rise is sustainable, and whether or not global its foreign policy subject to the whims of its do- politics will be overtaken by climate change or a mestic climate, chopping and changing with the major international upheaval. winds at home. Under a new leadership, what China needs to With China’s economic development widely do is to formulate a long-term and cohesive stratseen as progressing hand-in-hand with globaliza- egy to restore equilibrium to the international ortion, the 21st century world order is now shift- der. Only global cooperation and consensus can ing, presenting new and alarming problems as benefit both China and the rest of the world. 

Editorial Office Managing Editor: Zheng Zhonghai Advisor: Liu Dizhong Senior Editor: Yang Yi Copy Editors: Jack Smith, Alex Taggart Lead Writer: Yu Xiaodong Editors: Wang Yan, Yuan Ye, Xie Ying, Sun Zhe, Li Jia First Reader: Wesley Jacks Address: 5th Floor, 12 Baiwanzhuang South Street, Xicheng District, Beijing, China Post Code: 100037 Tel: 86-10-88395566 Fax: 86-10-88388045 Email: readers@newschinamag.com www.newschinamag.com Art Department Art Director: Wu Shangwen Art Editor/Designer: Zhang Dawei Marketing Office China Newsweek Corporation President: Wang Xiaohui Chief Executive: Fred Teng Tel: 1-212-481-2510 Fax: 1-212-481-2503 Address: Suite 1101, 15 East 40th Street, New York, NY 10016, USA Email: readers@newschinamag.com Toronto Office Director: Lai Hailong Address: 51 Halstead Drive, Markham, ON Canada L3R7Z4 Tel: 1-905-604-6150 Fax: 1-905-604-6170 Email: canada@newschinamag.com Marketing Director for China: Wang Chenbo Account Manager for China: Ren Jie Tel: 86-10-88388027 Circulation Manager for China: Yu Lina Tel: 86-10-88311834 Advertising Director for the US: Gao Weiwei Tel: 1-212-481-2510 Marketing Promoter for the US: Jerry Meng Tel: 1-212-481-2510 New York Office: Jing Xiaolin, Wei Xi, Sun Yuting Washington Office: Wu Qingcai, De Yongjian Los Angeles Office: Zhang Wei San Francisco Office: Liu Dan London Office: Wei Qun Tokyo Office: Sun Ran Paris Office: Wu Weizhong Bangkok Office: Yu Xianlun Kuala Lumpur Office: Zhao Shengyu Moscow Office: Tian Bing Legal Advisor: Allen Wu ISSN 1943-1902

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NEWSCHINA I April 2012

Contents

HAN, SOLO

Editorial

Politics

02 China Has Risen. Now What? 10 Capital Punishment : Death of a Saleswoman

32 36

Giant Panda : Nature Calls Hong Kong Dispute : Family Feud

SPECIAL REPORT

Economy

40 Heavy Metal Poisoning : Finding the Source/Silent Killer

Cover Story

14 HAN, SOLO: Mob Revolution/Who’s in the Ring?/In Their Own Words

24 27 30

Society

Bohai Oil Spill : Fishing for Justice Medical Reform : Just What the Doctor Ordered? Brain Drain : One-Way Ticket

48 50 52 54

Wheat Production : Going Against the Grain Putzmeister Buyout : Rise of the Machines Pork Industry : Globe Trotters Economic Policies : A Year to Lay Foundations

INTERNATIONAL

56 Sudan Kidnappings : Business as Usual

Photo by CFP

By openly suggesting that revolution may not be the best solution to China’s problems, novelist and rally driver Han Han has found himself the target of a vitriolic online smear campaign. When did moderate politics become anathema to China’s intellectuals?

VISUAL REPORT

60 Train Man

outside in

64 67

Frozen Harbin : China’s Winter Wonderland Flavor of the Month : Guru Sanders

04 MEDIA FOCUS 05 What They Say 06 NEWS BRIEF 08 Netizen Watch 55 China by numbers 66 real chinese 68 ESSAY 70 CULTURAL LISTINGS 72 Commentary

NEWSCHINA I April 2012

Southern Metropolis Weekly

NewsChina Chinese Edition February 20, 2012

February 7, 2012

Xi Jinping’s US Visit Fake Ancient Cities China is seeing a trend of dubious cultural protection amid its relentless urban construction, with a great many historical sites throughout the country being demolished and replaced with replicas. While local governments claim that such projects aim to promote traditional culture and add character to cities, cultural heritage protectionists have criticized them for arbitrarily recreating history for political and business interests. Critics have nicknamed the projects “fake flowers,” as they claim local governments build them to avoid spending time and money maintaining genuine relics, or “real flowers.”

China’s Vice-President Xi Jinping arrived in Washington, DC on February 13, kicking off his four-day official visit to the US. In addition to an array of comparatively friendly trade co-operation agreements in a variety of areas, a highlight in Xi’s agenda was his visit to the Pentagon, which analysts believe sent a signal that the two powers will enhance their military cooperation. The world’s media paid particular attention to the meeting between Xi, who is expected to be China’s next leader, and President Barack Obama. Analysts believe Xi’s trip will set a new tone in Sino-US relations, which have seen tension on trade imbalances, US arms sales to Taiwan and the Tibet issue.

China Economic Weekly February 7, 2012

Capitalizing on Art Oriental Outlook February 2, 2012

Hot Cash from POS Machines Police in Xiamen, Fujian Province, in 2011 launched a 10-month crackdown on illegal cash withdrawal using POS machines, warning that 7 billion yuan (US$1.1bn) is circulating on the underground cash provision service market. Those with connections to banks apply for POS machines, then sell them to cash providers. Clients of these providers swipe their credit cards for large amounts on POS machines, and are given cash. Meanwhile, the company with the POS machine profits from a transaction fee of up to 2 percent. Police have called on banks to tighten their supervision of POS machines and credit card applications.

Soaring prices on the Chinese art market have led to increasing interest from investment enterprises, which are gradually marginalizing individual collectors through economic strength. Different from individual buyers, who generally purchase art out of personal taste and interest, enterprises simply view art as a new channel of investment. Experts say the Chinese art market has increasingly resembled a stock market since 2009 – highly susceptible to hype and often blind to genuine value. Although the involvement of enterprises has increased the popularity of the art market among the public, with insufficient regulation and lacking a reliable esthetic, it is too early to say the market has the broad public appeal enjoyed by its overseas counterparts.

Xinmin Weekly February 8, 2012

Luxury Booze? Moutai, China’s top liquor brand, was ranked fourth behind Louis Vuitton, Hermès and BMW, in a list of the world’s most valuable luxury goods compiled by the Hurun Research Institute, China’s equivalent of Forbes. Although Moutai Group has refuted the ranking, claiming they produce affordable liquor for the public, its price, according to the media, has risen nearly tenfold over the past decade, with some of its high-end varieties costing tens of thousands of US dollars. Despite the price, Moutai always falls severely short of demand due to its limited output capacity. Media revealed that over 80 percent of sales of Moutai are for State-funded banquets and for gifts, often to officials. NEWSCHINA I April 2012

“Chinese businessmen are looked down upon because they are enslaved to politics, to power and to money.”

Illustration by Wu Shangwen

Blogger and angel investor Xue Manzi seeks sympathy from an indifferent public. “If my works were used in such an eye-catching event featuring so many stars, I would consider it a compliment.” Peng Youlun, visual effects director of the Chinese New Year concert organized by Hunan Television Station, who allegedly ripped off several artists’ work in his designs.

“Nationalism, if rooted in power and set above constitutional democracy, is as toxic as gutter oil.” Chinese academic Mu Ran in an online interview with China Elections and Governance.

“It is better to risk death on the Chinese stock market than to suffer a slow death from inflation and rising property prices.” Zhang Xiaopei, a 59-year-old stock market investor, writing to China’s Securities Regulatory Commission to appeal for a better-managed stock market to give seniors a better chance to augment their meager State pensions.

“It is better to trust in State-owned enterprises than in Heaven.” A new advertising slogan for a State-owned real estate enterprise in Hefei, Anhui, which shocked Internet users after going viral.

“This is the Department of Stealing. We will steal anything our leader asks us to.” An urban management official in Harbin, Heilongjiang responding to public questioning of his office’s decision to arbitrarily confiscate traditional Lantern Festival dumplings and redistribute them to senior care homes. NEWSCHINA I April 2012

“China is now home to a great many intellects, representing various groups of interests, but the poor are kept out, since speaking on their behalf doesn’t pay.” Director of the East Asian Institute of the National University of Singapore Zheng Yongnian addressing the self-interested nature of mainstream academia during a humanitarian forum in Zhejiang.

“The National People’s Congress must understand and support the government and the people’s courts and procuratorate. It is not a delegate’s job to find fault with everything.” Liu Yupu, director of Shenzhen’s local People’s Congress, answering critics who claim he and his organization have failed to take corruption and poor governance seriously enough.

“The death penalty is no deterrent to corrupt officials. Officials are beyond supervision.” Zhang Qianfan, vice-director of China Constitution Society, a democratic pressure group, calling for the abolition of the death penalty.

Top Story

iPad Trademark Lawsuit The Apple iPad, the world’s best-selling tablet computer, is suffering losses in the Chinese market after its manufacturer Apple became entangled in a trademark battle with Proview Technology, an IT company headquartered in Hong Kong. The lawsuit has been a constant headache for the company since April 2011, when Apple sued Proview’s Shenzhen branch for copyright infringement, only to have its claim rejected by a local court in November. The case can be traced back to 2000, when Proview Technology’s Taipei branch registered the iPAD trade-

Policy

China Supports Small Businesses China plans to put 15 billion yuan (US$2.2bn) into supporting small enterprises, said the Ministry of Industry and Information Technology at a press conference on February 7. The assistance, according to Zhu Hongren, the Ministry’s chief engineer, will be appropriated over five years, 3 billion yuan (US$450m) each year, and aims to free small enterprises from financial troubles and help them upgrade their technology. It is one of the measures detailed in a support package proposed by the State Council in October 2011, responding to a growing number of small enterprises going bankrupt due to financial pressure. The package also includes increasing and extending tax exemptions, loosening loan policies and helping small enterprises to find financing in order to list on the market.

mark in several countries and regions, and the Shenzhen branch registered the name on the Chinese mainland the following year. The heart of the dispute lies in a 2009 agreement in which the Taipei branch transferred all the iPAD trademarks to a British company for 35,000 British pounds (US$54,000), and the latter then transferred the “worldwide rights” to the name to Apple for 100,000 British pounds (US$160,000), including the use of the trademark on the Chinese mainland. However, Apple has been denied its mainland trademark rights by Proview’s Shenzhen branch, which insisted in court that while the Shenzhen and Taipei branches are under the same parent company, they remain independent of each other, so the Taipei branch’s agreement does not affect Shenzhen. The Shenzhen branch now uses the name on several of its products, including computer monitors. The company has

taken legal action to block sales of the iPad at Apple resellers on the mainland, and has asked for compensation. According to Chinese domestic media, many appliance stores throughout the country, including popular online shopping websites such as 360buy and Amazon China, have removed Apple’s iPad from sale. However, the battle is not over. Apple has appealed to a higher court, arguing that the two branches were registered under the same legal representative, and the agreement clearly states that the transfer covers the mainland. The court is yet to make its final judgment.

Politics

Top Policeman Removed A well-known Chinese police official, 52-year-old Wang Lijun, was removed from his post as director of the Chongqing Public Security Bureau, sparking rumors throughout the country. “Wang Lijun is receiving ‘vacation-style medical treatment’ due to overwork and immense mental stress,” claimed the official blog of the Chongqing government on February 8. Rumors suggest that Wang is under investigation for corruption, after China’s foreign ministry confirmed to the media that he had stayed at the US consulate in Chengdu, a city near Chongqing, for one day before leaving “of his own accord,” according to the consulate officials. Wang shot to fame for his tough half-year crackdown on organized crime in Chongqing that began in June 2009, in which 3,000 suspects, including mob bosses and senior officials, were detained. Some online commenters have suggested that the alleged scandal, if true, could damage the political image of Bo Xilai, Chongqing’s Party secretary, who is expected to become one of China’s most senior leaders later this year. NEWSCHINA I April 2012

Laws Business

Chinese Company Sues Nasdaq

Guizhentang, China’s largest user of bear gall bladder in traditional Chinese medicine (TCM), is under heavy public pressure after its intention to list on the stock market met with strong opposition from animal protection organizations. In a letter to the local security regulatory bureau, the Animals Asia Foundation, a Hong Kong-based organization leading the protests, accused Guizhentang of extracting bile from live bears, catching the attention of the public. China’s Association of Traditional Chinese Medicine, however, defended Guizhentang, saying bear bile, a rare ingredient in TCM, has been used in over 100 remedies for decades, and the makers have been using advanced pain-free technology since the 1980s. It also claimed that the protest was orchestrated by “western groups” to cripple TCM’s competiveness in the global market. Currently, there is no law or regulation in China that forbids bear farming. Experts have urged the government to consider whether and how to develop the industry to increase transparency.

Industry

China Vetoes Syria Resolution On February 16, China vetoed a UN draft resolution that threatened sanctions against the Syrian regime if it did not end its crackdown on protesters. The resolution, similar to an earlier UN security council resolution opposed by both China and Russia, condemns President Bashar Assad’s use of deadly force to crush an uprising which began in March 2011, a crackdown which is estimated to have caused over 6,000 deaths. US Ambassador Susan Rice said her country was “disgusted” by the vetoes which “sell out the Syrian people,” while China argued that it is unfair to target the resolution at Assad only. Earlier this month, China had held talks with a key Syrian opposition group in Beijing, urging those on both sides of the conflict to cease all violence while reiterating that China opposes foreign military intervention in Syria’s domestic affairs. Economy

China Lowers RRR

NEWSCHINA I April 2012

CleanTech Innovation (Xinxingjia in Chinese), a Chinese manufacturer of wind turbines based in Liaoning Province, filed a lawsuit in New York in late January, accusing the Nasdaq of discrimination against Chinese companies. The company’s move followed Nasdaq’s decision to de-list its shares. Nasdaq claimed that CleanTech failed to disclose a US$20m-valued financing with its investors in a timely fashion. CleanTech denies the accusation. “We have never delayed any submissions nor offered inaccurate information in financial statements,” said Lü Pei, CleanTech’s president, revealing that the delisting has caused the company a loss of US$220 million, with its share price dropping from US$9 to less than 70 cents. Listed on the OTCBB in July 2010 and transferred to the Nasdaq in December that year, CleanTech was among the influx of Chinese concept stocks listed in the US since 2010, many of which have since been accused of financial fraud. Experts say CleanTech’s rare lawsuit against Nasdaq will alert Chinese concept stocks to the possibility of short selling.

The People’s Bank of China, China’s central bank, announced a 0.5 percentage point drop in its reserve requirement ratio (RRR) for financial organs beginning February 24, which will bring RRR for big financial organs down to 20.5 percent, and that for medium and small ones to 17 percent. It is China’s first RRR cut in 2012, a policy which analysts predict will release 400 billion yuan (US$59bn) more funds into the market to meet increasing demands for loans and investment in the wake of the long Spring Festival holiday. Analysts believe the move will signal a price drop after the government eases inflationary pressure, but as yet there has been no indication that interest rates will be reduced.

Photos by CFP

Bear Parts User’s Listing Slammed

What’s Making China Angry?

What’s Amusing China?

A man surnamed Li from Zhengzhou, Henan took 2.5 kilos of walnuts home to his family only to discover that they were walnut shells glued around concrete husks wrapped in brown paper.

Fearing muggers, a man in Changde, Hunan attempted to conceal two valuable rings by wearing them on his genitalia, only to discover he couldn’t remove them once he got home. In desperation, he called the fire department, but fire crewmen were also unable to remove the rings with bolt cutters without harming the man. Eventually, the man found relief when he was taken to a local hospital, and a surgeon was able to remove the unfortunately placed accessories without harming him.

What’s Shocking China? A burglar in Harbin, Heilongjiang left an unusual calling card at the scene of his crimes – life coaching. “You are really poor. Do work harder!” was scrawled on a wall at a crime scene after the thief had discovered little of value at the property. Six out of more than 20 burgled households reportedly similar graffiti. The man was later caught by police when he was observed behaving suspiciously in an apartment building. He was found to have stolen more than 200,000 yuan (US$31,744) worth of gold jewelry and cash since August 2011.

Most circulated post Poll the People

Retweeted 77,775 times

What stops you from donating blood? Respondents: 5,052 My parents won’t allow it 102 (2%) The procedure is not transparent enough 1,286 (25%) Worries of infection 1,612 (32%) Hospitals profit from blood transfusions 1,672 (33%) Other 380 (8%)

On the evening of the Lantern Festival (February 6) in downtown Zhengzhou, Henan, a homeless man picked up a discarded bottle, took a swig, then beamed up at the blossoming fireworks.

Source: www.weibo.com

NEWSCHINA I April 2012

Ren Zhiqiang

W ho ’s Ho t?

Top Blogger Profile Followers: 6,388,597

Top Five Search Queries On

Over the week to February 20 Feng Feifei 531,340 Taiwanese pop star who died in January after a battle with cancer

Wukan Villagers

Residents in the Guangdong village that evicted its entire government amid allegations of land snatching and police brutality democratically elected a new leadership, including activists and protest leaders, this month.

Expensive Car Accident 215,567 A driver of a Honda Accord dented a Rolls-Royce in a minor collision in early February and was forced to pay repair costs exceeding the value of his whole car. Heyuan Earthquake 194,568 A 4.8-magnitude earthquake occurred in Guangdong Province on February 16. Beijing Film Academy 152,431 An admissions official in the acting school announced he would screen applicants for tattoos and cosmetic surgery. Jeremy Lin 135,013 The savior of the New York Knicks is already making waves in China. NEWSCHINA I April 2012

Occupy Men’s

Sorority girls from Guangzhou participated in a performance artwork entitled “Occupy Men’s” to lobby for more female and unisex bathrooms in public buildings.

Taiyuan Branch of Minsheng Bank While several local buildings caught fire after being hit by fireworks and air pollution hit record levels in the provincial capital of Shanxi Province over the Chinese New Year festival, netizens lambasted a local bank for its overzealous use of traditional firecrackers.

Zhaocun Village Officials Officials of a village in Weinan County, Shaanxi, leased a school building donated by Hong Kong philanthropist Sir Run Run to an auto repair company.

W ho ’s No t?

This 61-year-old real estate tycoon is well-known for his bold remarks regarding China’s chaotic property market. Chairman of Huangyuan Property in Beijing, Ren has frequently irritated countrymen with his cutting remarks about the housing industry, such as “real estate developers only build houses for the rich,” and “I am a businessman, I don’t consider the poor.” It seems Ren’s honesty has proven popular, as it reflects truth of the real estate industry.

SOCIETY POLITICS

Journalists from about 30 agencies and 200 spectators witness the first trial of Wu Ying who was accused of fundraising fraud in Jinhua city, Zhejiang, April 16, 2009

Capital Punishment

Death of a Saleswoman

A controversial death sentence handed down for financial fraud has caused a public outcry, forcing China’s legal authorities to take the stand By Li Jia

n February 14, China’s Supreme People’s Court made an unprecedented pledge at a press conference. The nation’s highest judicial authority announced it would review the death sentence handed down to Wu Ying, a 31-yearold woman accused of financial fraud (see: Funding Fraud, NewsChina, issue 35). The Supreme Court rarely comments on individual cases. On January 18, the Zhejiang Provincial

High Court rejected Wu’s appeal against her conviction for fundraising fraud amounting to US$120 million, raised through a Ponzi scheme. The decision immediately triggered what State news agency Xinhua described as a “rare phenomenon where a verdict runs flagrantly counter to public opinion.” Lawyers, economists, entrepreneurs and even philosophers and literature experts have questioned the justice of the verdict. The general consensus is that Wu, whether guilty

or not, does not deserve capital punishment. Economist Zhang Weiying lamented that the sentence shows that China is “200 years away from an equal, rights-based market economy.” The reaction was so overwhelmingly strong that a Zhejiang High Court judge publically defended the verdict, another rarity in China. The public response is a clear departure from reactions to similar cases in the past, both in China and abroad. Bernie Madoff, NEWSCHINA I April 2012

the former Nasdaq chairman who defrauded billions of dollars via a Ponzi scheme, is now serving a 150-year prison term, the maximum sentence permissable for his crimes, which came to light in 2008. Madoff and his wife both attempted suicide under the pressure of “terrible phone calls” and “hate mail,” according to a Reuters report. In China, between 2008 and 2010, several convicts were executed for fundraising fraud, with some cases involving much more money than Wu’s. In all cases, the Chinese media focused its attention primarily on the grievances of fraud victims.

Doomed

As the title of her as yet unpublished autobiography Black Swan indicates, Wu had been known for unlikely feats of commercial wizardry since her first venture, a beauty salon, opened in 1999. In 2006, at the age of 25, the high-school educated Wu became one of China’s most famous businesswomen, registering nearly 10 companies in various industries including catering, laundry, logistics and advertising. NEWSCHINA I April 2012

Photo by CFP

Reporters interview Wu Yongzheng, Wu Ying’s father, after his daughter’s second trial in Jinhua city, Zhejiang, April 7, 2011

The boldness with which she leapt into new businesses led to rumors about the source of her wealth, earning her the nickname “the mysteriously rich woman” in the media. In 2007, she was arrested for “illegally pooling the savings of others,” but was in 2009 given the death sentence on another charge, financing fraud, the only private lending-related crime with a maximum sentence of death. At the final ruling in January, the Zhejiang Provincial High Court concluded that Wu had used her hotels and other businesses to create the illusion that she was financially powerful, so as to mislead would-be investors by masking her serious debt and her intention to abuse funds. Zhang Sizhi, one of China’s most respected lawyers, said in an open letter to the Supreme Court that the evidence available was not strong enough to support the verdict. For example, while swindlers usually abscond quickly with their ill-gotten gains, Wu kept massive assets in her hometown, and most of the funds went to real investment. In addition, her 11 major creditors were all her friends or managers of her company, who

were most likely fully aware of Wu and her financial situation. They never accused Wu of fraud, even after she was arrested. Though the voice in favor of leniency has dominated the public debate, experts are divided over her guilt, and if she should be subject to any form of punishment. Liu Renwen, a researcher at the Chinese Academy of Social Sciences, for example, argues that the possibility of fraud should not be entirely ruled out. “They say she is innocent simply because they are so eager to save her life,” Zhao Xu at the China Research Center for Public Policy told NewsChina.

Whose Order?

The wider social context provides more important reasons for bringing Wu’s fate under public scrutiny. Lawyer Zhang Sizhi said, “It is absolutely unjustifiable to secure a State financial monopoly by means of the death penalty.” The law is supposed to punish acts that “disturb the national financial order,” but, as finance commentator Dr Ma Guangyuan has asked, “Whose financial order is the law protecting?”

Photo by Liu Bin/CFP

Wu Ying takes the stand for the first time in Jinhua city, Zhejiang, April 16, 2009

POLITICS

Photo by Liu Bin/CFP

Private businesses in the counZhang Qianfan, a law professor try, the majority of which are at Peking University, believes the small and medium-sized, have debate itself is moot. “What if difficulty getting loans from the her death can serve that purpose? State banks. “As a member of the If so, is it justified?” He asked. chamber for the past 18 years, I The core principle, he said, is that have never heard of any Zhethe termination of human life jiang-based private company cannot be used as a means to an relying on bank loans. Instead, end. He strongly urged the abolithey borrow from each other,” tion of the death sentence for all said Chen Jun, vice chairman economic crimes. of the Zhejiang Chamber of Legal experts have also identiCommerce, at a Beijing forum fied misconduct in the handling on Wu Ying’s case, sponsored by of Wu’s case. For example, shortly the China University of Political after her arrest, her corporate asScience and Law. sets, including her cars, were Private lending cases exceedauctioned by local police withing a certain amount of money out her consent, and her lawyers involving a certain number of and family were summoned to people are usually classified uncourt only to hear the final rulder two criminal charges: “pooling, without being told why they ing the public’s savings,” which is were summoned, both of which subject to up to 10 years in jail, constitute breaches of the law. and “financing fraud,” which “Without following the right carries a maximum sentence of legal procedure, justice is imposdeath. Private lending for busisible,” said Professor Li Dun at ness purposes is normally tantaTsinghua University. mount to usury, which increases Doors were boarded up and signs were removed from the Bense Hotel, In addition, the illegal disposal both commercial and legal risks. a Wu Ying venture in Dongyang, Zhejiang Province, two days after her of Wu’s assets has made it nearly arrest on February 10, 2007 Those who prosper are hailed impossible for ordinary creditors as entrepreneurial pioneers, and to get their money back. Chen those who fail are pilloried. “This kind of Unirule Institute of Economics led by econo- Youxi has noticed a change of attitude on the results-decide-all legal judgment is unfair and mist Mao Yushi shows that Chinese banks part of creditors in some recent alleged fraud against the law,” said Chen Youxi, director of would have reported huge losses without the cases, including Wu’s. Suicides and comCapital Equity Legal Group, who is famous monopoly-backed revenue. plaints among creditors exert pressure on local for his expertise on and experience in dealing governments, who are responsible for mainRespect for Life taining social stability. Local officials are thus with criminal lawsuits. China now adopts a more cautious attitude motivated to appease social unrest by punishDespite the lingering dilemma for private businesses, there was little sympathy for defen- towards capital punishment than it has in the ing the debtors. This worked in previous casdants in similar situations only two years ago. past. Since 2007, all death sentences have es. Now, however, creditors believe they have In 2011, however, the public was shocked by been subject to the final approval of the Su- much more hope of getting their investment a series of suicides, kidnappings and abscond- preme Court, a responsibility that previously back by keeping the business alive, which is ments by private business owners connected rested with provincial high courts. In 2011, better than closed-door auctions which only to usury defaults. Sympathy for the struggling 13 non-violent crimes were removed from the benefit privileged buyers behind the scenes. “Wu may have done something wrong, but private sector, China’s economic engine, was category of crimes punishable by death. At the same time, the public are becoming misconduct on the part of the government combined with fury at the profits reaped by banks and other State monopolies. Chen increasingly sensitive to the death sentence. can cause much more damage to society,” said Yongjie, vice secretary-general of the China In this context, “the death of a young woman Professor Li. Unless the State monopoly is Center for International Economic Exchang- would particularly arouse public sympathy,” broken and real respect is shown for human life and the rule of law, Li, like many other exes, recently told the media that banks’ profit Chen Youxi said to NewsChina. There is a consensus among analysts that perts and the public, believes that Wu’s tragic margins were “even higher than tobacco and oil” in 2011, thanks to the high interest rates Wu’s execution, if enacted, would not serve case could be repeated in the future, even if resulting from State control. Research by the the purpose of protecting financial order. her life is ultimately spared.

NEWSCHINA I April 2012

cover story

HAN, SO 14

NEWSCHINA I April 2012

Photo by Liu Bin/CFP

OLO NEWSCHINA I April 2012

Once a poster boy for China’s thinking youth, Han Han’s public opposition to a Chinese “velvet revolution” has sparked an all-out war on his credibility spearheaded by a liberal academic. What lies ahead for China’s original enfant terrible? 15

cover story

Han, Solo

Mob Revolution

Since coming out in opposition to a “Velvet Revolution” in China, writer and rally driver Han Han has become the target of a smear campaign questioning everything from the authenticity of his works to his personal morality

Photo by Zhen Hongge

By Yu Xiaodong

or more than a month, Han Han, perhaps China’s most recognizable writer, known as much for his rebellious style for his criticism of censorship and social injustice, has been on the defensive. While his outspoken character and inflammatory personality has never left him short of enemies, Han has thus far been able to draw

strength from his international profile and domestic popularity. Hated by conservatives in China, who have termed him “a slave of the West,” and by many mainstream intellectuals for his “literary shallowness,” Han has often reveled in criticism, using polemics against him as an opportunity to demonstrate his flair as a critical writer.

However, while previous attempts to unhorse the self-styled bad boy of Chinese literature have simply left him with a higher profile and an even greater legion of fans, a recent, concerted attempt to undermine Han’s personal and literary credibility seems to be drawing blood. Some of China’s most ardent liberals and democrats, many of whom are NEWSCHINA I April 2012

former admirers, have joined Han’s critics. A potentially fatal blow came in the form of an accusation that Han’s own works were ghostwritten, an unproven but damning allegation which threatens the very career of China’s foremost superstar blogger.

Unpopular View

The controversy started with three essays posted by Han between December 23 and 26, 2011, on his personal blog, the most popular in China with more than 500 million hits. As the titles of the three entries - “On Revolution,” “On Democracy,” and “Wanting Freedom” - suggested, they dealt with some of the most sensitive and important issues regarding China’s political future, immediately attracting attention. To the surprise of many of his supporters, in these essays, Han Han distanced himself from self-appointed “public intellectuals,” liberals and democrats who would welcome a so-called “Jasmine Revolution” in China, that would mirror the Arab Spring of 2011. “Revolution may not be a good option for China,” Han warns, “In a country with a complex social makeup, the fruits of revolution would be inevitably reaped by the vicious and the ruthless.” According to Han, the public intellectuals advocating revolution are so “preoccupied with gaining the moral high ground” that they have “lost touch” with China’s social reality, and with the general public. According to Han, they fail to recognize the reality that ordinary Chinese tend to be too self-centered and utilitarian to participate in any kind of meaningful revolution. “Even if our social conflicts are intensified tenfold, even if you had 10 Vaclev Havels to make speeches in 10 cities, and even if the authorities didn’t take action [against you], those speeches would eventually end up being sponsored by a throat lozenge manufacturer,” he writes. What seem to have drawn the fire of other

NEWSCHINA I April 2012

intellectuals are Han’s later remarks about China’s ruling Communist Party, and its relationship with those it rules. “The Party has 80 million members. If we count these members’ family members, that’s 300 million people. I believe that a very strong one-party-system is the same as a no-party system,” he writes. “When the party organization reaches a certain size, it becomes the people. So the issue is not to deal with the Communist Party in this or that way… but to seek improvement. Rule of law, education, culture … these are the basics.” With his target audience largely made up of intellectuals and young people, Han knew he was opening himself up to attack. In a mock Q&A added to “On Democracy,” he asked himself, “Did the government pay you a ‘stability-maintenance fee’ to say this?” In his answer to his own question, Han writes, “In a polarized society where everything is either black or white, right or wrong, talking about revolution sure sounds cool, but it may prove harmful in the end.” Han Han may have underestimated his own influence. Opposition was swift and vitriolic, with many former supporters lining up to discredit Han. Li Chengpeng, one of Han’s literary friends and a long-time critic of China’s government, immediately challenged Han’s assertions, accusing Han of “ingratiating himself with the Party.” Dissident artist Ai Weiwei, who had previously called Han “a gravedigger for the old order,” also accused him of “voluntarily surrendering.” Invoking the name of one of China’s most nationalistic State-run newspapers, Ai said, “It would be a good piece for the Global Times to publish.” Unfortunately for Han, the Global Times did indeed come to his defense, publishing an editorial endorsing his views, and praising him for going “beyond ideological rivalries” to “speak the truth.” Han quickly brushed

“

In 2009 and 2010, I spoke out a lot against social injustice and received a lot of praise. Gradually, I started to feel like a professional mourner. When bad things happened, I would repeat the weeping, over and over again. Because I wept better than others, people started to gather to watch me every time bad things happened. So it followed that when a bad thing happened and I didn’t burst into tears, people would attack me as a running dog of the government. Over time, I realized that I couldn’t just lash out at the government, but I needed to be able to attack the masses too.”

”

-- Han Han, Interview with Southern People Weekly

“

Cravings for democracy and mass freedom are not as urgent as the circle of intellectuals had hoped. Their hatred of authority and corruption is quite utilitarian. Rather than calling for limiting and supervising the powerful, they are more oriented to resent the fact that they are not among the beneficiaries of the current system. Only when their personal interests are infringed upon will they pick up the banner of freedom and democracy to protect themselves. They will be satisfied if the government pay them enough. Any conflict that can be solved by money is not a real conflict.

”

-- Han Han, On Democracy

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aside the Global Times’ goodwill when questioned by other State media. “The Global Times does not deserve to be my supporter,” he said. “In order to criticize the public, one has to first criticize the government.” Other than the accusation that Han has taken the wrong side, a consensus among many mainstream intellectuals seems to be that Han’s knowledge of democracy and freedom is superficial, a view long held by Han’s conservative critics. “He needs to read more,” commented Xue Yong, a historian at Suffolk University in Boston, MA. Many of Han’s critics have accused him of being out-of-touch with mainstream scholarship, a view which has drawn fierce scorn from the author himself. “The paradox is that when these intellectuals talk about revolution and democracy, they claim to represent ordinary people, but when ordinary people who read less than them, such as me, disagree with them, they dismiss them,” said Han. Many of Han’s supporters have challenged their idol’s critics to put their money where their mouth is. “If you’re so erudite, academic and professional, why not stand up and say something significant, as Han Han has done?” commented Yi Zhongtian, a well-known academic specializing in classical Chinese literature. According to Yi, Han’s power lies in his “nakedness” – his lack of pretension and his personal openness. Han Renjun, Han Han’s father also came to his defense. “My son at least touches topics that most people dare not to,” he wrote on his blog.

Allegations

As the debate between Han and his critics increased in profile, the government was apparently caught in an impasse. While it had refrained from censoring the debate from China’s hyperactive social media, State me-

dia organizations such as the People’s Daily, Xinhua News Agency and China Central Television kept silent, possibly hoping that the debate would continue to revolve around mud-slinging, and sideline the issue of the validity of a Chinese “Velvet Revolution,” a discussion which could swiftly become incendiary. Such hopes would have been borne out as the debate soon became mired in personal attacks on Han’s credibility. The rightness or wrongness of revolution was soon swept aside when academics began questioning the authenticity of Han’s works. The first to speculate that Han had employed a ghostwriter was Mai Tian, an executive in the IT field, who hinted that Han’s article had been “rewritten” by Lu Jinbo, Han’s publisher, a claim Han swiftly denied. Without hard evidence to support his claim, Mai soon issued an apology, which Han readily accepted. As the dust was about to settle, Fang Zhouzi, an activist better known for his initiatives targeting academic fraud, took up Mai’s charges against Han. After comparing Han’s writings in different periods, Fang claimed that it was “impossible” that they were written by only one person given the sharply contrasting styles and contradictory character archetypes, citing this as “proof” that some or all of Han’s work, had been ghostwritten. Fang’s public profile in China, almost as prominent as Han’s, proved crucial in adding weight to what had been previously dismissed as spurious charges, doing so at a time when Han was on the defensive. Political semantics were soon swept aside by a war of words that threatened to consume China’s blogosphere, with over 14 million micro-bloggers weighing in on the debate on Weibo, China’s Twitter.

Mob

As nationalists, conservatives, democrats, liberals and people of different generations

“

For many intellectuals, freedom naturally follows democracy. But the meaning of democracy and freedom is different based on different cultures. For most Chinese, ziyou [the Chinese word for “freedom”] does not extend to the freedom of the press, speech, art and public elections. It refers to freedom in a moral sense, i.e. the freedom to talk loudly or spit in public, to violate traffic rules, or to manipulate loopholes in the law. For this reason, the social progress intellectuals supposedly crave may not be the same as that desired by the general public. For example, many Chinese feel uneasy when they travel to a western country primarily because the actions I have just described are taboo there. Therefore, I believe that Chinese people have a different definition of the word “freedom,” and that freedom in the western sense of the word lacks a cultural foundation and may not be a natural result of democracy in China.

”

-- Han Han, On Revolution

“

If a revolution does take place in China, the intellectuals should serve as facilitators, ready to swing behind the weakest and most disadvantaged groups. They should be suspicious of the motives of self-styled revolutionaries and any promises they make, and the goal should be to prevent a total victory of one camp over the other. I would forsake my political opinion to achieve the coexistence of all political ideologies.

”

-- Han Han, On Democracy NEWSCHINA I April 2012

NEWSCHINA I April 2012

Photo by CFP

re-aligned their loyalties with either Han or Fang, online polls were initiated to get a sense of how the battle lines were being drawn. For example, among Weibo users, the vast majority of whom belong to China’s tech-savvy post-1980s and 90s generations and can often be counted among Han’s most staunch supporters, only 18 percent of those polled favored Fang’s argument. However, according to a similar survey conducted by ifeng.com, the homepage of Phoenix Media, a liberal Hong Kong-based media group, 47.6 percent favored Fang, outnumbering those who favored Han (40.1 percent). A survey on the People’s Daily website showed a 37 percent to 63 percent split in favor of Han’s position. Under huge pressure, Han was forced into an indignant defense of his works, claiming that he has 1,000 pages of handwritten manuscripts to prove the originality of his work. Han even offered a 20 million yuan (US$3m) cash reward for anyone who could identify his “ghostwriter.” However, the polarized nature of online debate in China meant such a defense did little to silence critics. On January 29, Han decided to sue Fang for libel, with Fang quick to brush the lawsuit aside, claiming that similar previous lawsuits had “done him little harm.” According to Fang, his ultimate purpose is to “destroy Han’s trumped-up image as a youth idol.” According to some legal experts the attack against Han, mainly based on speculation, has gone too far to be considered free speech. Xiao Han, a well-known law professor from the China University of Political Science and Law, said that credence given to public accusations based on speculation are justifying the practice of presumption of guilt, in which the accused bear the burden of proving their innocence. “People must be aware that there has never been a copyright dispute concerning Han’s

Han Han is a brand ambassador for Fanke, a major online clothes retailer

works,” commented Xiao, which, he believes, is proof enough of their authenticity, given the fortune Han has made through his writing. By comparing Han’s critics to an online lynch mob, Xiao suggested that the Fang Zhouzi incident has ironically proved to be evidence supporting Han’s argument that a revolution in China would end in tragedy. Xiao even indirectly evoked the disastrous Cultural Revolution as an example of what happens when mob law becomes the only law. “No matter whether it is a tyrannical ruler or an online mob, both can carry out assassinations in the name of protecting public interests,” Xiao warned. “It is this tradition, which ignores individual rights, that has led to tragic political campaigns in Chinese history, setting in motion a cycle of mutual prosecution, with the prosecutor turned into the prosecuted, and vice versa.”

“

By joining the regime, one can immediately obtain physical benefits. In the imperial era, only a tiny minority of people could get involved. But now, when a large proportion of the population has joined and benefited from the regime [with 80 million Party member and 300 million beneficiaries including their families], it has made it very difficult to change the system.”

”

-- Han Han, Interview with Southern People Weekly

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Who’s in t Blue Corner Han Han

ubbed the poster child of the post80s generation, Han Han is perhaps China’s most famous living writer, and indisputably the country’s most famous blogger, with a total of 546 million hits by mid-February, 2012. Han’s fame can be traced back to 1999, when he won first prize in China’s New Concept Writing Competition at the age of 14. After dropping out of high school in 2000 because he was failing seven subjects, the 18-year-old started a career as a professional writer, resulting in the publication of his debut novel Triple Door. The book, which dealt with a teenager’s struggle to adapt to the suffocating constraints of Chinese education, sold 2 million copies, making it China’s best-selling novel in two decades, and made its author an instant celebrity. In the following decade, Han published more than a dozen books, also managing to become a professional rally driver, winning various national

championships, a career move which somewhat diminished his output. But his online comments on current affairs continued to attract a large number of readers, sparking intense debates over a range of sociopolitical issues. In 2010, TIME magazine included him among the 100 most influential people in the world. To a large extent, Han’s outspoken public persona has overtaken his literary output. Using his blog as a weapon, Han has criticized China’s authoritarian Writer’s Association, literary critics, fellow writers, bureaucrats and anyone else he sees as hypocritical or immoral. His stark language and free-flowing criticism has won him a huge pool of supporters. His refreshing, rebellious outlook turned him into something of a spiritual leader who could lay claim to knowing the mindset of China’s younger generation. Criticisms of what some saw as a lack of depth to Han’s convictions only served to augment his public profile. In 2010, Han launched a literary magazine called Party, the first and only issue of which sold half a million copies in a few days, but he had to terminate the project under pressure from what he called “unknown force from the top,” although there is no official ban on the magazine. At the same time, Han become increasingly outspoken in his criticism of the official censorship system and what he saw as widespread social injustice. His clash with authority made Han a poster boy for revolution – that is, until he seemed to openly reject this projection by renouncing violent revolution as a solution to China’s problems. NEWSCHINA I April 2012

the Ring? Red Corner Fang Zhouzi

ang Zhouzi, born in 1967, started his career as a biochemist after obtaining his PhD at Michigan State University in 1995. He soon joined China’s fledging online world by founding the website New Threat, initially focusing its content on Chinese literature, history and philosophy. In the subsequent decade, Fang published more than a dozen books on popular science in China, but is better known for his campaigns against academic fraud, becoming a whistleblower on plagiarism and the falsification of credentials. Since 2000, Fang has launched various campaigns against both individuals and corporations. In 2001, he exposed the academic fraud of a Tsinghua University professor, leading to a crackdown on similar fraud throughout China’s university system. In 2010, Fang claimed that the doctoral degree of Tang Jun, a well-known executive, had been obtained from a diploma mill (Pacific Western University), an accusation that blew up into a public scandal implicating dozens of executives who had also purchased their diplomas. Through these campaigns, Fang won a large core of supporters who considered him “a lone crusader against fraud-plagued Chinese society” according to their own fan literature. On August 29, 2010, Fang was physically assaulted by thugs hired by a professor who had fallen victim to Fang’s anti-fraud campaign, an attack that further enhanced his reputation as a heroic fighter. However, Fang’s aggressiveness in pursuing his targets has also drawn criticism both in academic circles and among the general public. On 8 May 2006, Fu Xinyuan, a professor with the University of Indiana published an open letter signed by 120 overseas Chinese academics calling for due process and presumption of innocence in cases in-

NEWSCHINA I April 2012

volving academic fraud, criticizing Fang’s witch-hunt tactics. On 25 May 2006, Nature published a critical review of Fang’s work, calling Fang’s accusations “reminiscent of the ‘Big-Character Posters’ during the Cultural Revolution,” which forced Fang to defend his work as exercising freedom of speech. In October 2010, Fang was accused of plagiarizing work by Michigan State University professor Robert Roote-Bernstein, who later published an open letter refuting Fang’s denials of wrongdoing and urging him to stop imposing his own criteria on what constitutes academic fraud over widely accepted institutional standards. Inside of China, Fang’s disavowal of traditional Chinese medicine and his staunch support for genetically-modified crops, a commodity which is almost exclusively produced overseas, has led his staunchest critics to accuse him of being unpatriotic. His seemingly selective attacks on prominent Chinese figures, often at the peak of their fame, especially his recent attack on KaiFu Lee, former president of Google China, have been seen as simple character assassination. Moreover, his failure to direct attacks against government officials has also led some to accuse Fang of picking his fights according to what will grant him maximum publicity with minimum personal inconvenience.

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In Their Own Words Han Han and Fang Zhouzi make their case in interviews with NewsChina Fang Zhouzi: “Han Han has been cheating us all for more than a decade.” By Qian Wei NewsChina: Why do you pick Han Han as your target? Fang: When Mai Tian used Weibo to allege that Han Han’s novels and articles had been ghostwritten, many netizens urged me to get involved. But I was not interested in Han Han. To me, he is merely an entertainment star and a youth idol. But in refuting Mai’s questioning, Han sounded disproportionately exasperated - attacking his accuser, rather than arguing against him. He even offered a 20 million yuan (US$3.18m) reward to anyone who could name his “ghostwriter.” So I made some comments on this matter. I didn’t expect Han to immediately realign his attacks at me. It was at this point that I started to seriously examine his earlier work, and I simply found it impossible to believe it had been written by a 14-year-old. NewsChina: What evidence did you find of ghostwriting? Fang: I first analyzed two of Han’s works, Triple Door and Seeing Ourselves in a Cup, and questioned how they could have been written by a teenager. Han and his father have both given accounts of how these works were written, accounts which were often conflicting. This proves that at least one of them has lied. Then, I conducted textual analysis of his essays, such as Seeing a Doctor and Bookstore. My analysis shows the author was most likely to be a middle-aged person in poor health with a solid literary pedigree, who had experienced the latter phase of the Cultural Revolution in the 1970s. All these factors dovetail neatly with the personal profile of Han Renjun, Han Han’s father. NewsChina: This evidence is hardly con-

clusive. Some argue that you’re basing your argument on speculation, rather than hard facts. Fang: Even criminal cases more often than not have to rely on circumstantial evidence. My analysis draws on circumstantial, rather than hard evidence. Based on this, I have deduced that Han Han has a ghostwriter, or ghostwriters, supporting him. But identifying this ghostwriter is difficult. NewsChina: Han has responded publicly to your accusations. Do you think he makes a good case? Fang: I haven’t found his explanations acceptable. Han says that in his works he just copied some excerpts from the classics, refuting claims by his fans that he has a vast knowledge of classical literature. This move itself has proven that he is not the literary genius that many have claimed. I will later release my analysis of his media interviews to further prove my points. NewsChina: Han has filed a lawsuit against you for libel. Are you concerned about it? Fang: I think the argument is in the province of academic debate. It does not involve libel, and it should not be resolved in court. I didn’t use abusive language, nor did I paraphrase Han’s works. What I have done is simply posit a theory based on his output. NewsChina: Some legal experts, such as Professor Xiao Han, have argued that you have violated Han’s right to privacy. What do you think? Fang: That’s a ridiculous notion. I’ve read that a few years back he argued that the right to privacy does not apply to public figures. I think the argument has nothing to do with private rights. How can a writer, especially a famous one, forbid other people to question the authenticity of his works?

NewsChina: As a public figure yourself, do you think you should be cautious about this kind of smear campaign, in case it later damages your credibility? Fang: My reputation and credibility are gained through my persistent efforts to combat fraud in academic and literary circles. Therefore, more and more people are listening to me. This is beneficial to establishing a healthy code of social morals. I’m serious about anything I say. It is those celebrities (like Han) who have a large number of fans who should be cautious about what they say. NewsChina: What is the difference between your fight with Han and your earlier campaigns? Fang: It is more complicated this time and I have to make elaborate analyses, which is hard to follow for those who lack the ability to think logically. That is why many think my reasoning is not convincing. I want to prove that Han Han is not a literary wonder as many believe and he has been cheating us for more than a decade. My purpose is to unmask this so-called role model. NewsChina: Are you concerned that your unmasking act may undermine your own image? Fang: There has certainly been an impact. People who may have admired both myself and Han Han may now turn against me. But I don’t care, since I don’t rely on my followers for a living. Han is different. Without fans, his books won’t sell. NewsChina: It seems that you are moving beyond academia to attack figures in entertainment. Fang: My campaign against charlatanism is not limited to academic circles. I have the right to comment on other fields too. If others can enter the entertainment area, why not me? NEWSCHINA I April 2012

Han Han: “It all stems from a bizarre hatred of celebrity.” By Yi Xiaohe in Shanghai NewsChina: What do you think about Fang Zhouzi’s accusations regarding the authenticity of your works? Han: I am really surprised by Fang’s attack. He is known for fighting academic fraud, but I don’t have a university degree, not even a senior high school diploma. I think the worst people can say about me is that I write badly. I never expected that he would create a jumped-up accusation out of thin air simply to attack me. NewsChina: Your earlier essays on democracy, freedom and revolution are highly controversial, but you didn’t really stand up to defend your purported political neutrality. However, you’re threatening Fang with legal action. Why is that? Han: First, I prefer not getting myself into political battles. When I was younger, I was once passionate about defending my beliefs. But now I think that one needs to be tolerant of different opinions, and think carefully before voicing one’s own. Second, Fang’s attack on me is different in that it is not about opinions. Instead, he categorically challenges my reputation as a writer by claiming that I have a team of ghostwriters. Why? Because he “believes so.” Since Fang has earned considerable credibility from his earlier anti-fraud initiatives, many people believe what he says. If I don’t respond to such an attack, my reputation as a writer will be damaged. I don’t want myself to become the victim of a scandal. NewsChina: Some people argue that Fang’s criticism falls under freedom of speech. The argument is that since you yourself

have criticized other writers before, Fang is free to criticize you. Han: I have criticized other writers, but never questioned the authenticity of their works. You can claim that a writer’s work is badly written, but you should not challenge the originality of a literary work unless you have solid evidence. For example, if I claim the works of [founding father of modern Chinese literature] Lao She were ghostwritten, his family would definitely sue me for libel. If this is considered freedom of speech, then you can attack any writer you don’t like and probably ruin his or her career with impunity. If such attacks are legitimate, it would spell disaster for all writers. NewsChina: Many of your supporters, including your publisher Lu Jinbo, seem to have suggested that you should have ignored Fang’s questioning to avoid falling into a trap. Han: It became impossible to ignore it. After Fang raised his points, many of my readers attacked him, which made him even more smug. If he came up with more smears and I still kept silent, many would start to think the accusations were correct. Now I have produced solid evidence including 1,000 pages of original manuscripts and letters. But those who attack me choose to ignore the evidence, as their sole purpose is not to find the truth, but to ruin my image. NewsChina: Why do you think many people would believe what Fang says? Han: Because he has some credibility. The reason why is very simple: there is a blemish on everyone’s record, especially in China, where people talk about “original sin” in many fields. I choose to confront him because I believe I do not have this particular blemish on my record.

fall into two camps, yours and Fang’s. How do you perceive this? Han: I think it is natural people to take sides, and there is no neutral ground on this issue. NewsChina: Do you think the reason why some people have joined Fang in his criticism is due to your opposition to a velvet revolution in an earlier essay? Han: Definitely. Since I published those essays, many fanatical liberals and democrats have turned against me. Many have collected so-called evidence to attack me. For example, they picked an old song from a novel I wrote as a teenager, and claimed only people of the older generation could know it. Therefore, in their reasoning, the novel must have been written by my father. This is ridiculous. Whether leftists or rightists, conservatives or democrats, these people all share a common nature: if you disagree with them, they will try to destroy you. NewsChina: But at the same time, it seems people don’t realign themselves along pure political or ideological lines. What do you think? Han: Yes, I notice that too. For example, Fang is left-leaning [in China, conservative] as he never targets government officials in his fight against academic fraud. But many liberals and democrats [on the right] have joined him in attacking me. It all stems from a bizarre hatred of celebrity, and an uncontrollable desire to bring celebrities down. In order to achieve a common purpose, they can shelve their political differences.

NewsChina: It seems that people quickly

NewsChina: You still have a large following. Many say that you are a product of your generation, and of your times. Your opinion? Han: I am a product of myself. 

Weibo.com Fang 19% Han 81% Total: 83,031

iFeng.com Fang 47.6% Han 40.1% Total: 183,787

Who’s Winning? Online Voters Choose Sides People.com.cn Fang 37% Han 63% Total: 80,785

NEWSCHINA I April 2012

SOCIETY

Bohai Oil Spill

Fishing for Justice Fears are growing that a government-brokered compensation fund for fisheries affected by the disastrous Bohai Bay oil spill is designed to free polluters from the threat of legal action

Photo by CFP

By Li Jia

He Jingzhou, a shrimp fisherman in Laoting county, Hebei, shows his dead catch, September 3, 2011

NEWSCHINA I April 2012

“This deal has actually reduced pressure on polluters.”

Photo by CFP

ore than seven months after the oil spill at the Penglai-3 field within Bohai Bay polluted 6,200 square kilometers of seawater(see: There Won’t be Blood, NewsChina, issue 39), the first compensation settlement was announced January 25, 2012. The deal was drawn up jointly by the Chinese Ministry of Agriculture (MOA) and ConocoPhillips, the Houston-based international oil giant whose Chinese subsidiary took official responsibility for the spill. ConocoPhillips China (COPC) pledged some US$160 million in public and private compensation for the disaster. An additional fund of US$56 million for the “recovery and improvement” of the area’s badly damaged fisheries was also jointly established by COPC and China National Offshore Oil Corporation (CNOOC), a 51 percent shareholder in the Bohai oilfield. The MOA declared the deal a “significant step forward in maritime compensation.” Despite the payout being the largest of its kind made by any Chinese company in the wake of an environmental disaster, critics swiftly dismissed it as a case of “too little, too late.” Unfavorable comparisons were drawn between this deal and British Petroleum’s US$20 billion compensation fund pledged two months after the 2010 Gulf of Mexico disaster, and US$10.7 billion in fines paid by Chevron one month after the November 2011 Brazilian oil spill. The deal was also seen as a belated admission of the spill’s severity. COPC denied the incident caused severe pollution merely one month prior to the announcement. The media has continued to question the legitimacy of the opaque government-led negotiations that led to the deal. Lawyers are concerned that the agreement has established a new array of bureaucratic hurdles that fishermen will have to overcome when making similar claims in the future. With compensation being paid according to government dictat rather than public court rulings, critics argue, the rule of law in China will continue to operate within a political

Two villagers in Laoting County, Hebei, collect dead clams on the beach as evidence of pollution, September 1, 2011

straitjacket.

Closed Doors

According to the MOA, the compensation deal is the result of “administrative mediation,” a process in which government agencies serve to broker negotiations between claimants and offenders. However, there is little evidence that the actual victims of the Bohai spill were present or even consulted during negotiations, which seem to have taken place exclusively between the MOA, COPC and CNOOC. This gives any deal supposedly struck on their behalf no legal foundation. The MOA, which cannot legally represent fishermen but has jurisdiction over fisheries, is obliged to demand that polluters offer compensation for the destruction of national fishery resources. Part of the US$160 million is earmarked for that purpose. This effectively makes the MOA both mediator and claimant in the negotiation process. “The independence and impartiality of the Ministry in the whole negotiation process has been called into question,” said Hugh Dong, a partner at Beijing King and Bond Law Firm and a specialist in maritime law. Dong even doubts whether the pledged sum exists. Without commitments on a timeline and a method for payment,

little can be done if COPC fails to honor the deal. Claims for more than US$160 million in compensation have already been independently filed against COPC by more than 300 fishermen. The core issue is not the amount of compensation, but rather “how the amount is calculated,” said Jia Fangyi from the Beijing Great Wall Law Firm, engaged in the legal battle for the public interest and Bohai fishermen against COPC, CNOOC and China’s National Oceanic Administration (NOA). Without details of how the government and COPC have determined the scale of the losses inflicted on fishermen being made public, Jia argues, it is impossible to attach any credibility to the sum pledged in the January deal. No details of how the payments will be made have been forthcoming. With negotiations taking place behind closed doors, a declaration that the MOA and local governments in the affected areas “will manage and distribute the fund” has added to concerns. “It is reasonable for the public to doubt if the fund will be appropriately used and distributed,” commented Professor Wang Canfa from the China University of Political Science and Law, a key player in the drafting of many of the country’s environmental protection laws.

SOCIETY

Fishermen leave the courthouse after being informed by the Tianjin Maritime Court that they must provide more documents before their claims will be heard, December 20, 2011

he told NewsChina. “There are laws in place to support maritime pollution compensation claims,” said Hugh Dong of King and Bond. With China’s legal system heavily influenced by political interests, lawyers like Jia Fangyi are routinely told that “higher leaders” have to approve of his legal action. The primary function of a government investigation into disasters like the Bohai spill should be to determine the extent of the disaster in order to facilitate private compensation claims. China’s courts have the right to

Photo by CFP

So far, government intervention in the Bohai Bay disaster seems to have consisted of backroom deals struck with the offending companies, with little support offered to those directly affected. “The local government told us they would investigate when we asked them for help,” one local fisherman told NewsChina. “We’ve still got no answer after half a year. We can’t afford to wait, so we decided to file our own lawsuits.” Our reporter telephoned several government offices of Laoting County, a seriously affected area, and one responded to our enquiry about specific local fishery losses with “I have no idea about this matter.” Another staff member told NewsChina “I don’t know which office is in charge of dealing with this issue.” The official websites of Laoting and Changli County governments made no mention of the oil spill or the resulting lawsuits. Professor Wang Canfa expressed surprise that no criminal investigation had been launched in the wake of the Bohai Bay pollution case, and incredulity that the first compensation payments were brokered between the government and the polluters, with the actual victims not even consulted. “This deal has actually reduced pressure on polluters,”

Photo by CFP

Barriers

Fishermen are informed by the Tianjin Maritime Court that they will have to wait for the court to decide whether to offer them a hearing, December 20, 2011

ask COPC to set aside funds for compensation or even freeze the company’s assets in case of noncompliance. No such punitive action has been taken so far against those responsible for the spill. As ConocoPhillips, the parent company of COPC, has declared itself operator of the Penglai-3 oilfield, Hugh Dong insists the government should also fully disclose the details of the ownership and operations of Penglai-3, a disclosure that could potentially open both ConocoPhillips and even CNOOC to damaging lawsuits. Furthermore, the government’s role in the negotiations could make the filing of individual lawsuits even more difficult for fishermen affected by the disaster. Zhao Jingwei of the Beijing-based Yingke Law Firm, which has provided free legal advice for 107 fishermen claiming US$78 million in compensation, is concerned that the courts will see this deal as an unspoken agreement placing the Bohai spill under their jurisdiction, bypassing China’s judiciary in the process. This may allow judges to throw out any compensation claims filed in court. Even if the court agrees to hear his cases, Jia Fangyi is doubtful that they would be fairly handled. “If judges take such a deal, with no legal grounding, as a legal precedent, the prospects for winning these lawsuits, or receiving appropriate compensation, are anything but promising,” he said.  NEWSCHINA I April 2012

SOCIETY

Medical Reform

Just What the Doctor Ordered? The Chongqing Medicine Exchange, China’s first electronic platform for drug sales, is designed to reduce the price of medicines by cutting out profiteering middlemen. Some, however, have called its long-term effectiveness into question By Xie Ying

NEWSCHINA I April 2012

Photo by CFP

oing live with a comprehensive list of 7,000 government-approved essential medicines two months ago, the Chongqing Medicine Exchange, China’s first online platform for medicine sales, has commenced operations. “The Chongqing Medicine Exchange is designed to cut out superfluous intermediaries in the medicine sales chain, and bring down the inflated prices of pharmaceuticals,” said Huang Qifan, mayor of Chongqing municipality, at the exchange’s official opening ceremony on December 29, 2011. Based on a membership system, the exchange brings together medical institutions and hospitals (buyers), medicine suppliers (distributors) and pharmaceutical manufacturer’s (sellers) on one website, where every deal, from quotation to contract, is processed entirely through the exchange’s system. “The platform lists all prices for the same medicine offered by pharmaceutical companies so that hospitals can choose whichever they think appropriate, and do business with the maker directly, while suppliers only provide delivery and technical services,” Liu Gaoqing, president of Chongqing Medicine Exchange, told NewsChina. In December 2010, the exchange initiated a one-year pilot operation that only listed nonessential drugs. Now, all local public hospitals

Chongqing Medicine Exchange holds an opening ceremony for the listing of essential drugs and medical equipment, Chongqing, December 29, 2011

and clinics have been included in the platform, making the exchange their only channel to buy medicine.

Underground Deals

China’s existing pharmaceutical supply chain began to take shape in 2001, when the govern-

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ment issued a new policy centralizing the management of medicine. This stated that provincial medical and pricing authorities should invite bids for bulk purchases, and all public medical institutions under their jurisdiction could only buy medicine from successful bidders. “Under this scheme, medicine generally changes hands six times before reaching the patient, going through national and provincial agents to bidders, then to city and county-level agents, then to local suppliers, and then to hospitals,” An Yang, a retired doctor now working at a branch of the drugstore Tongrentang, told NewsChina. “Each link adds additional cost to the medicine, including the salaries of those involved, advertising fees, bidding fees, communication fees and the profits of agents at different levels. Eventually, this inflated cost hits the patients,” she added. This is why Liu Qun, vice-director of the Chongqing Municipal Medicine Industry Commission, believes the 12-year old system of centralized bidding and bulk purchase is “a total failure.” “The system is riddled with corruption, and has exponentially inflated the cost of medicine. It is the patient who is the final victim,” Liu Qun told the local media. His remarks followed a notorious medicine scandal exposed in Chongqing last year, in which more than 10 doctors and hospital administrators as well as four senior health officials were alleged to have received illegal kickbacks or taken bribes, abusing their positions in the supply chain. “Pharmaceutical companies, agents and suppliers have to spend a great amount of time and money cultivating good relations with hospitals, particularly the departments in charge of bid invitations, or they lose business across the whole province,” Zhou Anqi, a director at drug developer and supplier Chongqing Yugao Group, told NewsChina.

Ambitious Initiative

Thanks to the exchange, Zhou said, his company now spends much less on intermediaries than before, which has enabled them to concentrate more effort on core aspects of their business, such as improving services.

“Sponsored and led by the local government, the exchange makes the supervision of each step in the deal easier and more efficient, with the help of other related government agencies, such as the pricing department and the medical supervisory bureau,” said Liu Gaoqing, the exchange’s president. During its operation as a pilot scheme last year, the exchange, according to Liu, processed deals worth 5 billion yuan (US$740m), with the purchasing price of medicine dropping by 28.4 percent on average. “The prices of some medicines dropped by more than 50 percent,” he said. “An extreme example is ganciclovir, an injection to treat eye infections, which sold for 73.57 yuan (US$10.8) before the exchange was set up, but now sells for only 13.58 yuan (US$2),” he added. Some patients in Chongqing have already felt the benefits of the exchange. Chen Shifang, a 76-year old sufferer of cerebral thrombosis and hypertension at the People’s Hospital in the city’s Ba’nan district, said on Chongqing TV that the price of his medication had dropped by about 40 percent. The sharp reduction in price is mainly attributed to the exchange’s pricing system, under which a benchmark price for each medicine is determined based on nationwide market research, and no registered seller is permitted to list their products at a price higher than the benchmark. “Although it seems that the pricing system will lower the price of medicine, it does not mean that profits are cut, since it removes the costs created by intermediate links,” said Zhou Anqi, the Yugao director. Li Hongyi, a director at the pharmaceutical producer and exchange member, Chongqing Yaoyou Pharma, told our reporter that the exchange offers many opportunities for competition. “In the past, only five pharmaceutical producers had access to the provincial-level bidding, but now the exchange is open to all registered members. This means that medicine producers can put a wider variety of products on the market, and buyers have more choice to meet their diverse needs,” he said. In addition to the 1,500 public medical institutions automatically listed on the exchange, a total of 400 suppliers and 3,600 domestic and

international pharmaceutical makers including each of 2010’s top 20 global pharmaceutical companies have registered with the exchange on a voluntary basis, according to Liu Gaoqing. Although Liu did not reveal specific predictions in terms of sales volume and price reduction, Huang Qifan, the Chongqing mayor who initiated the exchange, presented a general vision for the exchange’s future. “There will be 20 billion yuan [US$2.9bn] worth of annual medicine sales in Chongqing in the following three years, and I hope that half of this value will go through the exchange,” he said. “Also, I hope that one-tenth of the predicted trillion yuan [US$147bn] worth of annual pharmaceutical deals nationwide in the next three to five years will also be struck there on the exchange.”

Doubts

Chongqing is not the first place in China that has tried to push medical reform by restructuring pharmaceutical sales. Anhui Province, for example, launched a new program for medicine sales bidding and bulk purchases in August 2010. A “two-envelope” bidding scheme, an established practice worldwide, was introduced, whereby the technical information of a product is evaluated prior to any financial bid. However, in practice, the scheme deviated from its original design, with invitees rushing to bid for the lowest priced medicines, with little concern for quality. Yaoyou Pharma harbors similar doubts about the Chongqing exchange. “Unlike nonessential drugs, whose benchmark price is determined by the average price of the product on the market, the benchmark price of an essential drug is defined by its national average bid price. This is often lower than the cost price, since big pharmaceutical manufacturers generally put more resources into development and quality control than smaller concerns,” said Li Hongyi, Yaoyou Pharma’s director. “Yet, despite the complete lack of financial incentive, we have to list our products at the exchange, or we will lose business with public hospitals in Chongqing,” he continued. “This violates market rules.” Li’s complaint was upheld at a seminar on the Anhui model held by the China Association of Medical Commerce in September NEWSCHINA I April 2012

2010, which revealed that a great many medicines which won the bid sold at prices lower than their actual value. “The exchange simply provides an alternative sales channel that is more open and transparent, but I don’t think it should replace all other models,” Xiong Xianjun, vice-director of the China Institute of Medical Insurance, told NewsChina. This view is shared by Li Hongyi. “Too many backroom deals exposed in the intermediate links have destroyed the credibility of sales agents. But they are not useless. Considering their rich experience in sales, we sometimes need them to promote our new products to hospitals face-to-face,” he said.

No Cure

Although the government is trying hard to reduce the price of medicine, its effect on the overall medical reform remains contro-

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versial. Xiong Xianjun believes the exchange will make no change to the profit-based relationship between hospitals and patients. “The exchange does greatly streamline the intermediate costs, but given that doctors draw a percentage of money from the medicines prescribed, they will still prefer to use expensive medicines,” said Xiong. The dependence of hospitals on drug sales can be traced back to the 1950s when the government allowed hospitals to sell medicines for profit to make up for a shortfall in government funding (the current markup limit is 15 percent). However, the practice has come under increasingly strong criticism since the government demanded that hospitals support themselves after Reform and Opening-up began in the early 1980s. Recent official statistics show that the Chongqing municipal government’s input in public hospitals only accounted for 10 percent of its

total annual expenditure in 2011. “Even if the 15 percent markup limit is waived as has happened in some areas, hospitals will still have to drive up the prices of other services to turn a profit,” Xiong said. “No approach will solve the root problem without shaking up the current rigid system of hospital management and non-performance-based pay mechanisms for doctors.” While the exchange is likely to bring down prices in the short-term, it remains to be seen how medicine quality and medical service will be affected by the reform. A large number of profiteers will likely be weeded out, but the problem may lie deeper in the for-profit medical system. “We are exploring new ways of medical reforms, which need more time and space,” Liu Gaoqing argued, “[The exchange] is definitely not a panacea for all the system’s maladies.”

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Brain Drain

One-Way Ticket Although more and more Chinese students who have studied overseas have been returning to China in the past decade, coming home is still not an attractive prospect for many of the country’s top talents By Ma Duosi

hen Taiyuan University of Technology sent an ultimatum to its teachers who studied on Chinese government-funded scholarships overseas but never returned after completing their studies, it touched a national sore spot. The school released the notice in a lastditch effort to claw back some of their lost talent, according to Liu Guanghuan, the school’s personnel director. The university, based in Taiyuan, Shanxi, issued the notice last December and included an appended list of 103 teachers who were living abroad. It asked the teachers to return or face the termination of their bianzhi, a lifetime employment scheme enjoyed by public servants that guarantees medical care, pensions and other benefits. The ultimatum did not work: not one teacher returned to save their bianzhi before the January 15 deadline. No-one even made a phone call. The ultimatum only served to increase personnel director Liu’s workload. Following the announcement, Liu was busy answering calls from journalists, as it had reignited public

concerns over a “brain-drain,” and indignation at the huge waste of public funds that the “defecting” teachers represented. Liu said that concerns over a brain drain were something of an overreaction, as the majority of these 103 teachers had departed for foreign shores in the 1980s and 90s, and made up only a small portion of the university’s teaching staff, who number over 1,900. Taiyuan University of Technology had retained these estranged teachers’ bianzhi for so long because they used to be its best teachers, and although they had been long removed from the payroll, the university had kept a door open for them. More than half of these 103 teachers are now living in the US, with many having stayed there for more than a quarter of a century. Some of them have obtained green cards or become American citizens and found jobs in multinational companies or teaching posts in universities. Some even have their own companies. A better life and research environment abroad are their main reasons for breaking the conditions of their scholarships,

which mandated their return to China upon completion of their studies.

Efforts

However, the university’s efforts to persuade the teachers to come back was not a total failure. Some of the defaulters agreed to come back as visiting scholars or take sideline teaching jobs for a certain period. Gu Fengshou, now a senior engineering researcher with the University of Huddersfield in the UK, was sent by Taiyuan University of Technology to the University of Manchester for a year of study in 1991 when he was 34. Gu found that one year was not enough to obtain a doctoral degree, which usually required three years of study and thesis writing. Thus, he chose to stay. Now, his child has graduated from university in the UK. The ability-oriented academic climate in Britain was a very important factor in his decision to stay, as was the region’s green landscape and unpolluted air. NEWSCHINA I April 2012

Illustration by A Dong

Born in the dusty mining heartland of Shanxi, Gu was amazed by Britain’s blue skies upon his arrival. In China, promotion within the university system was determined by length of service rather than academic achievement, he said. He has long since repaid the one-year government scholarship of about 2,000 British pounds (US$3,150) to the Chinese embassy, as have the majority of China’s academic defectors. In the 1980s and 90s, it was common practice for Chinese people studying abroad on government scholarships not to return, given that Chinese intellectuals were paid poorly and often had to work in an unpredictable academic environment. Between 1978 and 1996, about 45,000, or 35 percent, of 130,000 talented young people sent overseas for study at the expense of the State did not return as required, according to the State Education Commission, the predecessor of today’s Ministry of Education. The figure even exceeded the expectations NEWSCHINA I April 2012

of Deng Xiaoping, the architect of China’s economic reform, who initiated the government scholarship for overseas studies in 1978. To soothe other top leaders’ worries about the threat of a brain drain, Deng said, “Even if 100 out of 1,000 talents get away, that is only a loss of one-tenth, and we still have 900.” Even after the higher attrition rates became clear, Deng was not dissuaded. In 1992 during his famous “south China tour” which he used as an opportunity to defend his policy of Reform and Opening-up, Deng changed his tone, saying: “Even if half of them do not return, the other half will come back to help the country.” The situation later changed when pay and benefits for returning academics were raised significantly, and that the country tightened regulations on the State scholarship system. Since 1997, Taiyuan University of Technology has sent a total of 391 teachers and researchers overseas to study on government scholarships, and only 11 of them have chosen not to return. On a national scale, the situation has improved significantly. During the period between 1996 and 2009, 98 out of every 100 students funded by government scholarships eventually returned, according to the Ministry of Education. The China Scholarship Council, the regulator of government scholarships for overseas studies under the Ministry of Education, was founded in 1996. Since then, winners of government scholarships have been required to put up collateral against defaulting, and have been obliged to return to China to work for at least two consecutive years after they finish their studies abroad. But despite the encouraging statistics about the ratio of returners to defaulters, the brain drain may still be worsening, if self-funded students are taken into account. While about half of Chinese graduates from foreign universities in 1992 returned home, the figure dropped to around one quarter in 2006, according to the China Statistical Yearbook published by the National Statistics Bureau. Most of the top talent still prefers to stay overseas for the

continuation of their academic pursuits, and those who do choose to come back are mostly those unable to land a teaching job in foreign universities, according to a report by the China Youth Daily, which attributed the consistent loss of top talent to the lack of academic independence back home. Many Chinese universities are in the habit of granting academic degrees to government officials in exchange for potential or outright patronage. Heads of State-run universities are actually officials who work as professors or researchers before being given the top job. The presidencies of the most prestigious universities like Peking and Tsinghua are roughly equivalent to vice-ministerial posts. While policy relating to returning academics has, to a certain extent, stemmed the flow of the government-funded brain drain, it is ineffective in addressing the most basic cause: the perceived superiority of a foreign education among students and academics in China’s education system. With foreign universities increasingly dependent on fees from international students and boasting talented international faculties, it may take more than policy to make returning home a genuinely attractive option for China’s intellectuals.

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Giant Panda

Nature Calls Despite great progress in research and breeding, captive-bred pandas have yet to be successfully released into the wild By Yang Di and Yuan Ye

id-January is the coldest time of the year in Sichuan Province, where pandas have lived and bred for millennia. Unlike their more adaptable bear-brethren, however, giant pandas never hibernate. They don’t absorb enough energy from their food to do so. The world’s only almost exclusively herbivorous species of bear, giant pandas have retained their cuddly image despite being filmed ripping apart decomposing water buffalo by a local forestry bureau in November 2011. Perhaps the panda in question was channeling a carnivorous ancestor as it feasted. Despite the unphotogenic break from its usual diet, a forestry bureau employee said that the animal was clearly “enjoying the meal.” “Looks can be deceiving,” said Zhang Hemin, director of the China Research and Conservation Center of the Giant Panda (CRCCGP), based in Sichuan. According to local reports, pandas have been known to attack domestic goats in remote rural communities. The giant panda’s digestive system is in fact better designed to handle meat than bamboo, as are its powerful jaws. It remains a mystery why this large mammal switched to its bamboo diet, which has slowed down its metabolism and left it at the mercy of even the slightest fluctuations in its food supply. However,

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Photo by Getty NEWSCHINA I April 2012

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Courtesy of the CRCCGP

this new footage proves that pandas will gladly chomp on a image of pandas as the definitive gentle giants, might think. piece of meat if it comes their way. Most staff members at the base bear scars and scratches “Pandas eating meat is atavism – a reversion to a previous from unpleasant encounters with their aggressive charges. state of being,” Zhang Hemin told NewsChina. “If pandas Pandas, like all bear species, can be fiercely territorial. come across animal carcasses or crops of mushrooms, they Zhang Hemin told our reporter that pandas, especially will eat them. But they move too slowly to prey on live nursing females, have been known to attack humans who animals.” trespass in their territory. Eight million years ago, the primal panda, ancestor of Over decades, the panda has become China’s unoffitoday’s giant panda, subsisted on meat. About 2 million cial national animal, prized for its cuddly looks as much years ago, the dwarf panda, a smaller ancestor of the giant as for its endangered status. Its earliest appearance in the panda, switched to a vegetarian diet, apparently in response West dates back to 1869 when French missionary Armand to climate change. “Today’s pandas spend about 16 hours David sent a specimen back to Paris. In 1936, a live pana day eating, consuming some 30 kilograms of bamboo in da was brought to the United States for the first time by the process,” Zhang told our reporter. “This is proof that fashion designer and socialite Ruth Harkness. In 1941, the the panda’s digestive system hasn’t evolved to properly me- Kuomintang government sent the first panda as a goodwill tabolize vegetation.” gift to the United States, which marked the beginning of The mysterious life of the panda has only become a mat- the so-called “panda diplomacy” between China and the ter of public record in the past century, since the animal’s rest of the world that persists to this day. From 1957 to cute and placid appearance won the hearts of conservation- 1982, a total of 23 pandas were sent to nine countries as ists worldwide, followed closely by the general public. Al- “national gifts,” including the former Soviet Union, Japan, most as soon as the giant panda was cataloged it became the United States and North Korea. apparent that the species was under threat from habitat Despite the species jetting off to distant climes, however, destruction and human activity, and it soon became the pandas remained stubbornly resistant to captive breeding. mascot of the World Wide Moreover, growFund for Nature (WWF). ing demand for In-captivity breeding these precious gifts started in the 1950s in was putting even China, with the first sucgreater strain on cessful birth taking place the rapidly dwinat the Beijing Zoo in dling wild popula1963. However, systemattion. The Chinese ic study of this notoriously government curfussy and reclusive animal tailed the gifting of didn’t begin until 1978. pandas to foreign Even today, despite mascountries in 1982. sive strides being made After that, pandas through observation of were only leased giant pandas in captivity, abroad for a destudy of their behavior in cade at a time. the wild remains patchy In 1983, large at best. Attempts to inareas of the bashaCostuming researchers are one way breeding centers attempt to troduce captive-bred pannia fangiana bamreduce infant pandas’ dependence on humans das to the wild have been boo, the panda’s equally unsuccessful. staple food, in the giant pandas’ habiCaptivity tat that covers parts of Sichuan, Gansu and Shaanxi provJinke is a two and a half year old giant panda, just out of inces started blossoming – which, in most bamboo species, infancy. Sleeping under a tree in the yard of the Bifengx- only happens prior to death. The very survival of the panda ia Base of the CRCCGP, Jinke is every inch the clumsy, was suddenly threatened by a possible loss of its major food roly-poly panda of a child’s dreams. When his playmate source. Giant pandas in the wilderness were captured and Xianglin approaches him, however, Jinke rears up, snarls, taken to panda research centers to be fed artificially. and attempts to maul him. This less-than-cuddly behavior Later scientific research indicated that though bamboo is more common among pandas than most visitors to the flowering every 60 years would not lead to the giant panda’s breeding center, raised on the carefully-cultivated public extinction, it would undoubtedly reduce the numbers of

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New Dream

Despite the jump in numbers, captive breeding remained an elusive goal. At the same time, wild breeding was seemingly in terminal decline. According to field research by Professor Pan Wenshi of Peking University, the fertility rate in populations of wild pandas was only 4.1 percent. Captive pandas had even lower rates of fertility, with the animals seemingly losing all interest in mating once they were caged. Worse still, the survival rate before 1990 of baby pandas in captivity was only 33 percent. Many research centers and zoos lacked the expertise to raise pandas in a nurturing environment, with many reduced to living in concrete bunkers, hand-fed by humans. In 1991, the CRCCGP started a research program tackling key problems in captive breeding. Over more than 10 years, Zhang Hemin and his colleagues gradually adjusted the pandas’ diets and living conditions to bring them more in line with their natural habitats. They also started training programs to encourage the development of social behavior between pandas, and reduce dependency on human contact, which had in some cases led to the virtual domestication of captive pandas. The efforts to comply with the laws of nature worked well in raising fertility rates and, in 2002, the program was declared a success. The number of pandas born in the CRCCGP increased exponentially after 2003. Each year, about 15 cubs were born in the center and the record 17 were born in 2006. However, increasing the number of the pandas in the center was not the ultimate purpose of Zhang’s research. Unlimited breeding of pandas in captivity would not solve the problem of a dwindling wild population, and could even negatively affect the genetic diversity of the species. The introduction of captive-bred pandas into the wild became the Holy Grail of Zhang’s conservation team. As the numbers of newly-born panda cubs began to rise in 2003, Zhang picked a two-year old panda called Xiangxiang as one of the first captive-bred pandas that would ultimately be released into the wild. Xiangxiang’s prospects looked good. He was the strongest of the pandas chosen for the program, and the only one which had never fallen ill. A training regimen was designed to strengthen Xiangxiang’s physical fitness and reduce his dependency on the human beings. However, Xiangxiang still struggled to adapt to wild living, particularly to the parasites and bacteria to which wild pandas had developed an immunity. In the first summer of his training,

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Xiangxiang was attacked by dozens of leeches which clung all over his body. However, the conservation team remained confident that Xiangxiang would eventually adapt to life in the wild. In April 2006, Xiangxiang was carried to a secluded spot in Sichuan’s Wolong National Nature Reserve, home to China’s largest concentration of wild giant pandas. Once his cage was opened, Xiangxiang immediately trotted away into the woods. Ten months later, despite three years of training, Xiangxiang’s body was unexpectedly spotted in the snow by a search party sent to check Zhang Hemin, director of the on his progress. CRCCGP, weighs a panda cub The autopsy indicated that Xiangxiang, whose body bore several wounds, had been killed by falling from a high ledge, possibly during a fight with another panda. Zhang Hemin burst into tears when he heard the news. Yet, his goal to introduce a captive-bred panda into the wild remained unchanged. Greater emphasis on genetic selection was introduced to the rearing process. Selectivelybred pandas proved more resistant to disease and better equipped to deal with physical challenges. The center also tried to encourage mother pandas to raise cubs by themselves, allowing cubs to learn survival techniques from an earlier age, and from other pandas. In 2010, the CRCCGP started a new reintroduction program. The pandas to be released would be entirely raised and coached by their mothers, free from all artificial intervention. Zhang Hemin maintains that this method is the best way to reintroduce pandas to the wild. But still, he and his team remain cautious about their chance of success. “No scientific technical standards for the introduction of captive-bred pandas into the wild exist,” he said. Though he may bare his teeth from time to time, Jinke, in the eyes of Zhang Hemin, is unlikely to know a life outside an enclosure. However, Zhang doesn’t believe the future of Jinke’s species lies in zoos. “In the end, they belong in nature, and nature alone,” he told our reporter.

Photo by Liu Zhongjun

pandas in the wild. Scientists and conservationists argue that bamboo flowering also helps the process of natural selection, with the strongest, fittest pandas migrating to greener pastures, and wild populations stabilizing in 20 years or so. Nevertheless, from 1980 to 1990, a total of 18 wild pandas were captured and kept at the Bifengxia center for research purposes.

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Hong Kong Dispute

Family Feud Nearly 15 years after its reunification with the Chinese mainland, Hong Kong, a former British colony, is experiencing friction in its changing relationship with the motherland By Yuan Ye

NEWSCHINA I April 2012

Photo by Aaron Tam/AFP

A Hong Konger holds a local newspaper with an anti-mainland advertisement that reads “Are you willing to pay HK$1 million every 18 minutes to raise the children of non-Hong Kongers?” as Chinese mainlanders pose for a picture in the background on February 1, 2012

fter pregnant women in Hong Kong protested last year against a growing trend among mainland mothers who were travelling to Hong Kong to give birth, an “anti-mainlander” song, referring to mainland Chinese tourists as “locusts,” circulated online. A choir of members from a local online forum even hit the streets to serenade the song’s intended targets. Online anger was given a face in mid-January, when a video of a fierce argument between a mainland woman and a group of Hong Kongers caused by a mainland child flouting regulations by eating on the Hong Kong subway, went viral, evoking strong opinions from all sides. Immediately after the incident, Kong Qingdong, an outspoken professor from Peking University, publicly cursed the former colony, calling Hong Kongers “dogs,” and “[the people of] the lowest quality among all Chinese.” Kong’s words, though eliciting damning criticism from the mainland authorities, resulted in no punitive actions and succeeded in adding fuel to the already raging flames. Since the Chinese government loosened its restrictions on travel to NEWSCHINA I April 2012

Hong Kong in 2003, millions of mainland Chinese now enter Hong Kong every year for sightseeing, shopping, business, and more contraversially, to give birth. While the local economy has benefited from the purchasing power of increasingly rich mainland travelers, disparities in culture coupled with an economic paradigm shift in the region are leading to tense clashes.

Cross-Border Births

According to the Hong Kong government, about 43,000 newborn babies in Hong Kong in 2011 were born to mainland mothers. In 2010, the figure was about 41,000, among which over 32,000 were “shuangfei” (“double-nots”), children whose parents are both nonHong Kongers. Accounting for only 1.3 percent of babies born in Hong Kong just over a decade ago in 2001, shuangfei children now make up around 40 percent of Hong Kong’s total annual births. Children born to mainland women now make up the majority of the region’s chronically low total fertility rate.

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Photo by Dawvon

In 2001, the Hong Kong Court of Final Appeal granted citizen- “Hong Kongers are fed up” in a local newspaper in early February. ship to a shuangfei boy born in 1997, thus setting the definition of Maternity wards in Hong Kong’s eight public and 10 private hospi“Hong Kong citizen” as “a citizen born in Hong Kong before or after tals are nearly at capacity as more and more mainland babies are born the establishment of the Hong Kong Special Administrative Region.” there. Liu Guolin, the president of the Hong Kong Private Hospitals There are ample benefits Association, told NewsChina that available to children born the hospitals are short of equipment in the territory. Citizens enand staff. He is also worried about joy 12 years of free bilingual the baby boom likely to be seen education, generally seen as in 2012, owing to the auspicioussuperior to mainland schoolness of the “year of the dragon” in ing. Children who return to the Chinese zodiac. “Shuangfei is a the mainland also enjoy a matter for the government. We just comparatively favorable educare about our patients,” he said. cation policy, allowing them To lessen the trend’s effect on easier access to top schools local pregnant women, Tsang and universities. With enYam-kuen, Chief Executive and titlement to a Hong Kong President of the Executive Council passport, which allows visaof Hong Kong, claimed in midfree access to more than 130 January that the Hong Kong govcountries worldwide, heavily ernment plans to restrict the quota subsidized public healthcare of maternity wards open to mainand better social security land mothers-to-be this year. Early provision, it is not difficult reports indicate that the quota for to understand the attraction pregnant women from the mainfor mainland parents. land in public hospitals will be reBefore 2003, mainland duced from over 10,000 to some residents could only go to 3,000. Together with the 31,000 Hong Kong on business vilimit in private hospitals, the total sas or in a tour group. In July quota will be reduced by 20 percent of that year, the Individual this year. Visit Scheme was launched, It is not only hospitals that are which allowed mainlanders feeling the pressure. Hong Kong’s to visit Hong Kong for pereducation system is also facing sonal travel. The scheme was an overload. Kindergartens and first applied to residents in Hundreds of Hong Kongers protest in front of Dolce & Gabbana’s Hong schools are now filled with more flagship store for its “ban” on locals’ taking photos there, on January 11 cities including Beijing, Kong and more shuangfei students. The 8, 2012 Shanghai and Guangzhou. northern district of Hong Kong, One year later, it expanded to more than 30 cities, and later to 49. close to the border with the mainland, has become the first choice for The policy immediately caused a surge in visitor numbers. In the first the education of shuangfei children in recent years. Now, about 5,000 four months after the scheme’s launch, a total of 450,000 visas were young students cross the border every day through Luohu Port, the issued to mainland visitors. By May 2004, two million individual main point of entry and exit between the mainland and Hong Kong, mainland travelers had visited Hong Kong. to attend their lessons. Hong Kong taxpayers are unhappy, as parents This wave of tourism was accompanied by annually doubling num- of shuangfei children contribute little to the already struggling local bers of shuangfei newborns, with some 2,000 born in 2003, 4,000 in economy. The district is facing a quota drop of some 3,000 students 2004 and 9,000 in 2005. Meanwhile, an industrial agreement help- this year. ing mainland women to give birth in Hong Kong also took shape, accelerating the trend. According to figures from the Census and Subtle Change In late 2002, SARS (Severe Acute Respiratory Syndrome) broke Statistics Department of the Hong Kong government, more than 174,000 shuangfei children were born in Hong Kong between 2001 out. The 6-month epidemic dealt a serious blow to Hong Kong’s vital tourism and service sectors, pillars of the region’s economy. Anticipaand 2011. Understandably, growing numbers of shuangfei children have put tion of negative economic growth led the central and Hong Kong pressure on the territory, a densely populated metropolis of 7 mil- governments to launch the Individual Visit Scheme. The policy had an immediate effect. In 2003, numbers of mainlion. “Are you willing to pay HK$1 million (US$130,000) every 18 minutes to raise shuangfei children?” asked an advertisement entitled land visitors to Hong Kong rose to 8.46 million, up from 6.82 mil-

NEWSCHINA I April 2012

Photo by Antony Dickson/AFP

lion the previous year. The figure kept rising at a double-digit rate The subtle psychological change is further strengthened by the year after year. Four years later it had reached 15.4 million, and last disproportional distribution of wealth. Hong Kong’s Gini coeffiyear it stood at over 28 million. From 2003 to 2010, there were cient, a measure of statistical dispersion between rich and poor, has more than 147 million visits from the mainland, among which the remained high, running at around 0.43 in recent years. According percentage of individual visto various reports from both mainits increased from 35 perland and Hong Kong media, about cent, to the most recent 1 million people are currently livfigure of over 60 percent. ing below the poverty line (annual Meanwhile, Hong Kong’s per capita income roughly below GDP rose from HK$1.2 US$3,000) in Hong Kong. trillion (US$154.7bn) in Meanwhile, sociologists claim 2003 to HK$1.9 trillion that Hong Kongers are feeling (US$245bn) in 2010. increasingly marginalized. As a However, other major former British colony, Hong Kong Chinese cities and the mainhas been experiencing decolonizaland economy as a whole are tion for nearly 15 years. Yet “the catching up, especially since nature of Hong Kong’s decolonizaChina joined the WTO in tion is not to build a new world but 2001. Upon its handover to to return. Facing a gigantic moththe mainland in 1997, Hong erland, Hong Kong finds it has Kong’s GDP was about one become too different,” said Liang sixth of the mainland’s, but Wendao, a famous Hong Kongthis proportion has dropped based commentator. The merger yearly, with the region’s is a difficult one, especially when economy becoming roughly Hong Kongers feel their cherished the same size as Shanghai’s values such as fairness and rule of and falling behind that of law are being challenged. Peking Guangdong Province in the University Professor Kong Qinglast two years. dong’s logic that “an order mainMeanwhile, shopping tained by rule of law is the proof of trips are gradually becoming people’s low quality” has offended the most popular reason for Hong Kongers badly, said Choy individual visits. Over the Chi-keung Ivan, a famous Hong past few years, inflation has Kong commentator. remained high on the main- A placard at a demonstration in a Hong Kong park, February 12, 2012 Nonetheless, tourism pushed land, while taxes on imports by mainland visitors has become and luxury goods remain indispensible to Hong Kong’s much lower in Hong Kong. This has made Hong Kong a shopping prosperity. Professor Francis T Lui from Hong Kong University paradise for the middle and upper classes from the mainland, espe- of Science and Technology estimated that mainland visitors keep cially when they plan to spend their money on international brands. Hong Kong’s unemployment rate at 3.3 percent, supporting about Accordingly, mainland tourists are parting with more and more 70,000 jobs. cash, with spending by visitors who stay overnight going from The fact remains that tens of thousands of mainlanders are crossHK$5,200 (US$670) in 2003 to HK$7,400 (HK$954) in 2010, ing the border to visit Hong Kong, and many believe that rationaland day-trip tourists’ expenditure reaching HK$2,300 (US$297) in ity and understanding are what both sides need most. In a recent the last two years. article, Xu Zidong, associate professor of Chinese language and litYet Hong Kongers are showing a growing sense of unease and erature from Lingnan University in Hong Kong, said that the curannoyance with many mainland tourists, who continue to speak rent cultural differences and economic conflicts between the two loudly in public, spit on the ground, cut in line and jaywalk, violat- regions should not become a political issue. He believes that with ing local etiquette expectations. Hong Kongers have reported be- further communication, misunderstanding will fade away. ing given the cold shoulder when shopping in upmarket stores for On February 3, an anti-discrimination demonstration was held speaking Cantonese. In early January, Italian fashion brand Dolce at Lingnan University by both mainland and Hong Kong students. & Gabbana sparked protests when staff at its Hong Kong store pro- Students from Hong Kong wore dog masks, and mainland stuhibited locals, but not mainlanders, from taking photos in front of dents dressed as locusts. Together, they burnt a poster of the “lothe store. cust” advetisement. NEWSCHINA I April 2012

SPECIAL REPORT

Heavy Metal Poisoning

Finding the Source Serious cadmium pollution hit Hechi in the Guangxi Zhuang Autonomous Region in January. How did it happen, and how long will the poisoned water continue to flow? NewsChina investigates By Wang Yan in Guangxi

NEWSCHINA I April 2012

Photo by Huang Xiaobang/Xinhua

Left map: China listed 14 provinces and autonomous regions (indicated in red and yellow) including Inner Mongolia, Jiangsu and Guangxi as areas suffering from heavy metal pollution in early 2011 Right photo: Workers dump polyaluminium chloride and sodium hydroxide into water to dilute cadmium in the Longjiang River at the Luodong hydro plant, Februrary 1, 2012

NEWSCHINA I April 2012

Photo by Gui You/CFP

SPECIAL REPORT

inter is sugar season in south China’s mountainous Guangxi region. In early February near the city of Hechi, amid drizzle and mist, our reporter watched as trucks loaded with harvested sugar cane busily shuttled between fields and processing plants. Nothing seemed out of the ordinary. Just a couple of weeks earlier, however, panic struck the area when word spread that the Longjiang River, which runs through the area, had been polluted with cadmium, a toxic heavy metal, discharged from local mines.

Untreated mine waste in Hechi

Photo by Guo Tieliu/CFP

Photo by Deng Ketie/CFP

confirmed date of the leak. The cleansing involved pouring polyaluminium chloride (PAC) and sodium hydroxide into the polluted sections of the river to neutralize the cadmium and bring down Nuomitan hydropower plant, the last PAC dumping spot on the the level of the toxic heavy Longjiang River metal in the river. The two remedial chemicals are reported to be harmless to humans, and are commonly used by waterSlow Response The first signs came in works across the country in mid-January, according to processing extracted natural media reports, when local water. Continuous dumping fishermen found that fish of thousands of tons of PAC in some sections of the river into the river eventually were dying in huge numbrought down the cadmium bers. The news triggered levels from 80 times in excess panic-buying of bottled of the legal limit (0.005 milwater in the area and downligrams per liter), to 20 times stream in cities like Liuzhou. the limit by late January. A local chemical plant near Lalang Reservior which failed to meet The local government formalThe pollution, which local ly confirmed the pollution, say- environmental standards was ordered to close in late January experts have called the worst in ing it had occurred on January 15. recent decades, is believed to have been Through interviews with local fishercaused by the equivalent of 20 tons of cadmen Huang Yuqiu and Huang Chaoxin in mium. By January 31, the cadmium levels Lalang, where the dead fish were first spotin Lalang had returned to normal. ted, NewsChina found that dead fish had “We just hope that the February 3, the local government of appeared as early as January 7, more than a government lifts the fishing ban Hechi announced the results of the offiweek earlier than the authorities said. cial investigation, which involved over 150 Clean-up efforts began in earnest on as soon as possible.” small local mining companies, pinpointJanuary 22, one week after the officially ing the two culprits: Hongquan Lithopone

NEWSCHINA I April 2012

Last-ditch Battle

As the pollution began drawing nationwide attention, the local government ordered all heavy metal mines and processing plants in upstream sections of the Longjiang River to suspend operations. Fishermen from Hechi, as well as Liujiang and Liucheng counties downstream, were prohibited from selling farmed and wild fish. On February 3, at the Nuomitan hydropower station, the last PAC dumping spot on the downstream Longjiang River, Tang Zhenguo, dep-

NEWSCHINA I April 2012

uty magistrate of Liucheng County, told our reporter that the cadmium level at the spot was still 4.2 times higher than normal. “This is the last-ditch battlefront. After this, the water runs unrestrained and the level of cadmium can only be lowered through either dilution or diversion before it approaches the city of Liuzhou.” At this point, packages of PAC powder were being dumped into the river by soldiers in full hazmat suits. “It is hard to get rid of pollution in a river system because the pollution is constantly on the move. So far, PAC dumping is the only way to stop it,” a research fellow from the China Aquatic Product Science Research Institute told NewsChina, speaking on condition of anonymity. “But the effects of the large amount of added chemicals together with the sealed cadmium won’t disappear.” A dead fish from Hechi was quietly sent to him for further examination, in order to determine whether or not cadmium poisoning alone was the cause of death. “The dumping will remain a long-lasting problem for the local fishery industry , and will contaminate soil after the dumped chemicals settle into the riverbed,” he added. According to Zhang Xiaojian, a water expert from Tsinghua University and a member of the onsite emergency committee at the scene of the pollution, the dumping of chemical neutralizers into the river should go on until the end of February, so as to comPhoto by Gui You/CFP

Factory and Jinhe Mining Company. Both are located within two kilometers of the Longjiang River and within 30 kilometers from Lalang. Nine management staff from the two companies were put under surveillance during the investigation, and Wu Haique, head of the environmental protection bureau of Hechi, was removed from his post, along with seven other local officials. Hechi is noted for its large non-ferrous metal reserves, boasting the largest tin reserves in China, and is also rich in zinc, lead and indium. The city’s total revenue from the non-ferrous industry in 2011 was estimated to be over 20 billion yuan (US$3bn). Cadmium and arsenic, common byproducts of mining of heavy metals, are highly toxic and prolonged or intense exposure can cause kidney failure and liver and bone damage.

Local fishermen stopped work due to the pollution that caused the deaths of millions of fish

SPECIAL REPORT

pletely stop the movement of the cadmium.

dents has been mounting in recent years, with the last incident occurring in August 2011, when 31 children in Nandan County were diagnosed with a disease caused by high levels of lead in the blood.

Invisible Pollution

Photo by Wang Yan

Heavy metal pollution normally does not show its poisonous effects until the pollutants reach a certain concentration. Were it not for the telltale dead fish, the people of Hechi Threat Overhead could still be unaware of The latest statistics from the dire condition of their the Guangxi Environwaters. mental Bureau show that Before he was sacked, a total of 465 registered Wu Haique, the envicompanies in the province ronmental bureau chief are related to the heavy of Hechi, told media metal industry ,and onethat the bureau conthird of them are located ducted monitoring on in the Hechi area. the Longjiang River once Thanks to the unique every month, but admitkarst topography, there ted that heavy metals in are thousands of limethe water were difficult to stone caves in the provdetect. ince. Many mining com“Even low concentrapanies release their waste tions of heavy metals may water into these caves in be far more toxic than an effort to avoid the gaze ordinary organic pollutof environmental agenMetal alloys containing antimony and lead in the Wuxu mining region, ants,” said Chen Tongbin, a cies and to escape penalties. Hechi researcher with the Chinese AcadThis time, one of the two pollutemy of Sciences who has been working on heavy metal pollution ers, Hongquan Lithopone Factory, was reported to have poured for over 20 years. To make matters worse, the local water-moni- untreated waste water into such caves. However, it is highly toring agency was reluctant to release data to the public for fear doubtful that these two polluters alone released all 20 tons of of the potential impact on the local economy, which is heavily cadmium. In researcher Chen Tongbin’s opinion, the cadmium could not dependent on the mining industry, according to Chen. In recent years, cadmium pollution has started attracting at- be attributed to the two companies alone. “Apart from the offitention from the media. In 2006, for example, it was reported cial explanation of the special karst topography which might lead that some 150 villagers were poisoned by drinking cadmium- to sudden outbursts of pollution, month-long continuous heavy tainted water from the Xiangjiang River, Hunan Province. Last rains might be another major factor that triggered the disaster.” year, a media report claimed that over 10 percent of the rice sold on the domestic market was contaminated with cadmium. In Meager Expectations At a press conference in early February, He Xinxing, mayor the Hechi area alone, the number of heavy metal pollution inci-

NEWSCHINA I April 2012

Photo by Gui You/CFP

Photo by Guo Tieliu/CFP

Photo by Gui You/CFP

water authorities are looking to nearby mountains for their backup water supply, rather than relying exclusively on the Liujiang River. People in Liuzhou Fish in the affected areas have are still buying bottled wadied in their millions ter, keeping their distance from tap water, at least for the time being. Some are planning to buy water purifiers. of Hechi, publicly apoloHuang Yuqiu, 48, a fishgized for the pollution and erman in Lalang for over promised to restructure lo30 years, has been moored cal industry, finding new indefinitely for a few weeks methods of sustainable now. With no chance of development. One major fishing, all Huang can do After the pollution incident, the local fish market in Lalang was closed effort that Hechi will make is is sit and wait for compensato move mining companies into tion. “We just hope that the govthe Wuxu Industrial Park area, 35 kilometers southwest away ernment lifts the fishing ban as soon as possible,” said Huang to NewsChina.“After all, March and April are the best fishing from the Hechi city proper for better government supervision. The Wuxu Industrial Park is an area of 15.8 kilometers, rich months of the year.” in lead and antimony resources. Our reporter visited a “model” mining company in Wuxu, but left unimpressed: no specific water treatment technology had yet been adopted, nor was there any recycling equipment for sulfur dioxide. Huang Xing, the owner of the company, told our reporter that smelting technology had not changed since the 1960s: “Other private mining companies also imitate this technology, which cannot meet present environmental requirements.” According to Huang, the mining resources in this area could last for at least sixty years and provincial and local governments have invested a total of 24 million yuan (US$3.8m) in a planned water treatment plant for the whole mining area. Before new technology is adopted, however, it is hard to secure anything. The industry remains stuck in the past. In the meantime, downstream in Liuzhou, city Dongli village near Lalang Reservior was the site of the initial outbreak in Hechi in early January

NEWSCHINA I April 2012

SPECIAL REPORT

Heavy Metal Poisoning

Silent Killer Chen Tongbin, a pioneer researcher into heavy metal pollution, talks to NewsChina about the grave threat this invisible yet lethal form of pollution poses to the country

Photo byBo Wei/ CFP and Zhang Cunli/CFP

By Wang Yan

Untreated mine residues are a common sight throughout the country

hen cadmium pollution in sections of the Longjiang River in Guangxi Province made national headlines in mid-January, it turned the spotlight on the potential threat posed by heavy metal pollution throughout the country. About 10 million hectares of arable land in China is contaminated by heavy metals, according to official statistics released by the Ministry of Land and Resources in 2011. This amounts to roughly 8.3 percent of the country’s total arable land. Among the major pollutants, arsenic and cadmium are two major offenders. Research has also indicated that at least 10 percent of the rice sold on China’s domestic market is tainted with cadmium, a toxic heavy metal discharged from mines or contained in industrial sewage that ultimately finds its way into rice paddies. Evidence gathered in multiple locations in recent years shows that some rural people who live close to mines or regularly eat rice grown on the poisoned soil have suffered chronic muscle pain, kidney problems and cancer. Some have died. In mid-February, as the crisis alarm was still

People buy large quantities of bottled water after the pollution scare in Liuzhou in late January

sounding in polluted sections of the Longjiang River, NewsChina conducted an interview with Professor Chen Tongbin, director of the Environmental Remediation Center at the Institute of Geographic Sciences and Natural Resources Research affiliated to the Chinese Academy of Sciences, on the current situation of heavy metal pollution across the country and its remedy. Since 1985, Chen and his research team have been engaged in field research on heavy metal contamination. Mainstream opinions used to hold that the economically prosperous eastern coastal regions were the major victims of heavy metal pollution because of the high concentration of chemical and manufacturing industries there. But Chen insists that it is the underdeveloped southwest that bears the brunt of such pollution, due to a boom in the unregulated mining industry. Frequent incidents of pollution in those regions strongly support his argument.

“In those areas that suffer from a high density of heavy metal pollution, including Hunan, Guangxi, Yunnan, Guizhou and parts of Guangdong Province, we see plants struggling to live and crops unable to grow or bear fruit,” Chen told NewsChina adding that large numbers of peasants in these areas rely heavily on local governments’ relief funding for survival. NewsChina: When did you start your research into heavy metal pollution? Chen: We started as early as 1985, when nobody from either the academic circle or the government took the slightest interest in the matter. In recent years, this subject has increasingly asserted itself because life-threatening pollution incidents have been occurring ever more frequently in various parts of the country. I have visited all the provinces, studying the issue along the way. Because its negative effects only appear very gradually, heavy metal pollution is NEWSCHINA I April 2012

NewsChina: You and your team have conducted specific projects in the city of Hechi over the years. What is the situation there? Chen: Heavy metal pollution cannot be seen with the naked eye. Invisible pollutants can contaminate rivers and soil, and in turn vegetables and crops. For example, had it not been for the death of fish in large quantities in the Longjiang River, the local residents might still not know what was happening. Our team has been visiting Hechi on the Longjiang River annually since 2005. Though I did not go there to carry out the water tests personally after this particular incident, our previous tests and results of research conducted in this area tell me that cadmium is not the only reason behind the death of the fish. There is very likely also pollution caused by arsenic, an even deadlier toxin. NewsChina: What’s the general situation of heavy metal pollution in China? How is it treated? Chen: One thing that is certain is that the heavy metal pollution in both rivers and soil is very, very severe. Different from organic pollutants, heavy metals refuse to dissolve even over long periods of time. The country’s basic research on heavy metal pollution started rather late and the investment in research is far from sufficient. It is indeed very difficult to stave off widespread heavy metal pollution in mining areas such as Hechi. One environmental remediation project could work well for a single mining area, but when the problem involves hundreds of polluting private mines, the task seems impossible. To compound the dire situation, there are quite a large number of abandoned old mines void of any environmental protection measures. So when it rains, all the poisonous residues are washed into the local ecosystem. Our team has been working on the remediation of heavy metal polluted soil through NEWSCHINA I April 2012

mass planting of the metal-hyperaccumulator, Chinese brake fern (pteris vittata), which can absorb 8 percent to 12 percent of heavy metals such as arsenic and lead from the polluted soil annually. This magic plant is unique in that it can eat up large quantities of poisonous elements as well as resist heavy metal poisoning.

“The key solution lies in effective governmental management and adoption of advanced mining technologies.”

NewsChina: Are there any fast, effective measures to test for heavy metal pollution? Chen: Our team has developed equipment to quickly test the heavy metal contents of soil. So far we’ve used it in a few situations, such as at a copper mine tailing area in Pengzhou, Sichuan after the earthquake in 2008. Now the upgraded version of the equipment can conduct soil sample tests and draw data maps, or even send signals directly back to the research center in Beijing simultaneously. It is vital to figure out the exact area of pollution before any remediation work starts. Naturally, the equipment should be widely used. So far, a number of private companies have signed cooperation memorandums with our research team for the production and marketing of the equipment. But it takes time, since it needs a large amount of investment. NewsChina: What is the general situation of heavy metal pollution worldwide? Chen: Generally, it’s not a problem for developed Western countries as they do not have such a large number of heavy metal excavation mines. In other countries, pollution cases happen from time to time for different reasons. For example, in Vietnam, heavy metal pollution occurred due to residue from Agent Orange, the US military’s toxic defoliant sprayed during the Vietnam War, mainly in 1960s. The chemical contains dioxin and arsenic, and has led to disfigurement and cancer among local residents. In Bangladesh, arsenic pollution in

underground water has been reported, due to natural factors, posing a health threat to 100 million people. NewsChina: Is the situation improving in China? Chen: I would say that despite the fact that governments at various levels are showing increasing concern over the issue, the general situation is deteriorating. In the case of individual mines, the situation may have improved slightly, because stricter environmental requirements are being imposed. However, the number of mining companies is skyrocketing at the same time, making environmental management difficult. Furthermore, though some mines are closed, the pollutant residues still remain a potential threat, particularly during the rainy seasons. It is very important for mining companies to carry out environmental impact studies before they begin mining. For example, Tibet boasts the largest copper deposits in the country, but one big mining project was denied an operation license on the advice of scientists who thought its location close to the Yarlung Tsangpo River posed a potential environmental threat. Since all mining activities have a great deal to do with environmental pollution, the key solution lies in effective governmental management and adoption of advanced mining technologies. Some suggest that a law specializing in the prevention and treatment of heavy metal pollution be enacted. But I don’t think it will work out, since we have already had numerous laws, each addressing different aspects of environmental protection. The most viable solution is to find the major sources of pollution and take specific countermeasures.

Photo by Yang Xingwu/FOTOE

not an issue that causes instant environmental damage once it occurs. This is why it was extremely difficult for us to collect enough convincing evidence to prove the severity of the situation 10 years ago. But now time has proved that we were right, with heavy metal pollution becoming a widely acknowledged problem.

Chinese brake fern, a plant widely found in southern parts of China, can withstand a concentration of heavy metals in its body 200,000 times higher than any other plant

ECONOMY

Wheat Production

Going Against the Grain A number of Chinese grain farmers have struck it rich catering to changing urban diets with new types of wheat, but this could be causing an imbalance in the overall food supply By Han Yong and Wang Xiao

Photo by CFP

W 48

ith more mouths to feed than any other country in the world, the security of Chinaâ&#x20AC;&#x2122;s grain reserves has always been a tough issue. Engaged in one of the most vital yet least profitable occupations in the country, long-suffering Chinese grain farmers were subject to a State purchasing monopoly until the 1980s. Widespread economic reform in 1978 did little to help, as much of NEWSCHINA I April 2012

the country’s scarce arable land gave way to factories, housing and other developments. However, over the past two decades, with central economic controls loosened and the country’s palates changing, a number of astute farmers have learned to play the market to their advantage. Adjusting to modern trends, some have succeeded in hitching their grain wagons to China’s economic engine. Ding Zhifa is one of these farmers. A native of Xiping County in Henan Province, Ding now has an annual income of more than 10 million yuan (US$1.6m). Farming 6,600 acres of land in cooperation with other farmers in the area, his business took off in 2004 when he switched from growing the traditional medium-gluten wheat to wheat with stronger gluten. One of the country’s largest wheat producing regions, Henan provides one fourth of China’s yearly wheat yield, and until the late 1990s, almost all of this was of the mediumgluten variety used for making the noodles and steamed buns that have fed China for millennia. Since then, however, consumption has become more diverse. Bread, cookies and other baked goods have gained popularity in China’s cities, bringing with them new demand for strains of wheat with strong and weak gluten. As a result, the market saw a glut of medium-gluten wheat on the one hand and a shortfall in both strong and weak gluten wheat on the other. It was clear that a change was needed. Henan Province made its move in 1998, and more than a decade later, one third of the province’s wheat farmland is now used for growing strong-gluten wheat, providing local farmers like Ding Zhifa with a generous income.

Hard Sell

Responding to problems with the national grain supply in 1993, the Chinese government raised the grain purchase price by 42 percent in 1994. Two years later, this was raised a further 40 percent, a shot in the arm which sent grain production soaring to more than 500 billion kilograms in 1996. Ding and farmers from all his neighboring villages had to queue for two days in front of the purchasing station to sell their bumper harvests. Yet, having bought the wheat from the farmers, the State-run grain purchasing sta-

NEWSCHINA I April 2012

tions had a tough time reselling the overvalued crops. Drastic output growth caused a glut in following years, which made business even less profitable for rural grain farmers. By November 2002, wheat surplus in Henan Province hit 28.8 billion kilograms, costing central and local governments an annual storage subsidy of more than 3 billion yuan (US$476m). But while domestically produced medium-gluten wheat piled up in storehouses, imported strong and weak-gluten wheat soared in demand, selling at a much higher price. Guo Tiancai, a wheat expert from the Ministry of Agriculture, told NewsChina that while he was carrying out field research in Henan at the time, a flour producer told him that despite its measly price tag of 0.6 yuan (about US$0.08) per kilogram, domestic wheat was impossible to sell. Stronggluten wheat imported from Canada, however, was selling for 2.6 yuan (US$0.35 at the time) per kilogram, and was still falling short of demand. Guo, head of a government-sponsored committee to promote high-quality wheat in Henan Province in the 1980s, felt it imperative to change this imbalance. His solution was to revolutionize the province’s wheat production, challenging imports with a domestically produced high-gluten competitor. Supported by a 1 million yuan (about US$133,000) government grant and some 20 team members, Guo began ecological studies that were vital to the division of specially designated areas growing different strains of wheat in Henan Province.

New Strains

In 1997, a domestically cultivated stronggluten wheat strain named Zhengmai 9023 was bred by the Henan Provincial Academy of Agricultural Sciences, and was ready for marketing. The next year, adjustment of wheat distribution was initiated in Henan, and two years later, trial planting of the new strain was carried out across some 3,300 acres of farmland in the province. Guo Tiancai’s planting area division project was also making steady progress. After analyzing climate and soil data and results from trial plantings in various areas, Guo divided Henan’s farming areas into three regions: strong-gluten wheat in the north and

west; medium-gluten wheat in the province’s central region, and medium and weak-gluten wheat in the south. By the time he submitted his report to Henan’s provincial government, the trial planting of Zhengmai 9023 in 2000 had been declared a success. Yields for the new strain were far higher than its medium-gluten counterpart, and the purchase price was roughly 20 percent higher. At that point, rumors of a revolutionary new crop had reached rural communities, and farmers were desperate to get their hands on the seeds. Guo’s report and the results of trial planting persuaded the Henan provincial government to plant high-quality wheat and develop its wheat processing industry. In November 2002, the province’s Yanjin County exported 5,000 tons of wheat to Indonesia, and in 2004, 4.28 million acres of farmland in Henan were growing the new-generation wheat crop. By 2011, this number had doubled to 9.65 million acres. Ding Zhifa signed five-year contracts with a group of fellow farmers in 2004, in which they all agreed to grow the new highquality wheat. In 2009, these contracts were extended for ten more years. Ding is confident about the future of high-quality wheat in China, and was recently recognized by the central government as one of the country’s 300 model grain growers and salesmen. His prize was a bright red tractor. Thanks to Henan’s adaptive attitude towards grain production, Ding and those like him have managed to secure their livelihood, a long overdue victory for the country’s grain farmers. But with the new strains of grain catering almost exclusively to the changing tastes of wealthier city residents, the growing area of farmland used for strong- and weakgluten wheat may mean that the country’s vast rural population will find the wheat for their medium-gluten buns and noodles getting pricier in the long term. Further adjustment is expected. Zeng Liying, vice minister of the State Administration of Grain, said on January 8 at an international market analysis meeting that while China had struck a general equilibrium in the supply and demand of grain, there was still an acute imbalance between the different varieties. Perhaps her remarks foreshadow another shake-up on the horizon.

ECONOMY

Putzmeister Buyout

Rise of the Machines Chinese heavy machinery companies are now merging with their better-known European rivals, but will Chinese-made machinery be able to compete internationally? By Sun Zhe

Illustration by Wu Shangwen

hile Chinese shoppers are keeping the lights on in Paris boutiques, their homeland’s lumbering industrial enterprises are also on a European spending spree, with the heavy machinery concerns particularly keen to escape shrinking demand at home. After the State-owned enterprise (SOE) Zoomlion purchased Italian concrete machinery manufacturer Cifa for 271 million euro (US$356m) in 2008, Hunan-based private enterprise Sany Heavy initiated bidding for the German concrete machinery manufacturer Putzmeister, finally securing a 324 million euro (US$426m) buyout in early February 2012. This means Chinese companies now own two of Europe’s three largest concrete machinery companies. Shortly after the Putzmeister buyout was announced, Jiangsu-based Xugong, another SOE, revealed it was considering buying out German company Schwing, the last of Europe’s big three concrete machinery corporations not in Chinese hands. The Sany-Putzmeister deal would have been impossible 10 years ago, when the German company had a stranglehold on China’s domestic market, maintaining its dominance well into the 2000s. However, as cheaper Chinese machinery flourished under preferential government policies, Putzmeister saw its China market share decline to 10 percent. Now, despite both companies having been founded in the early 90s, Sany and Zoomlion account for more than 70 percent of China’s total sales of concrete machinery. Chinese corporations have shown mounting enthusiasm for for-

NEWSCHINA I April 2012

eign buyouts. Liugong Machinery, another State-owned giant from Guangxi Province, recently announced that it had secured a deal to acquire the construction equipment division of HSW, a major Polish concern, for 335 million yuan (US$53m). HSW is one of the world’s largest wheel-loader manufacturers with a global market share of about 15 percent. Lu Guchun, a partner at PwC’s enterprise merger and acquisition department in China, told our reporter that China’s major corporations had become increasingly sophisticated in negotiating buyouts of foreign firms. “Ten years ago, the deals were mostly focused on acquiring natural resources, whereas now it has diversified into technology and brand acquisition,” said Lu.

Spending Spree

In a press release, Liugong said the deal would help the company obtain proven technology and benefit from HSW’s distribution network, allowing access to key international markets. A global distribution network, access to high-grade technology and the brand loyalty of longtime customers are all desperately needed by upstart Chinese corporations, according to Wang Dongwei, a machinery analyst with Beijing-based Oriental Securities. In the domestic market, lower prices and the government’s indigenous innovation policies have enabled Chinese brands to wrest the lion’s share of key markets from foreign competitors, a boom facilitated by the explosive growth in construction since the turn of the century. In 2002, China accounted for 18 percent of global sales of construction equipment. By 2009, that figure had more than doubled to 43 percent, making China the world’s leading consumer of construction materials and equipment. “Low prices and passable quality have allowed our market share to soar in recent years,” said Zhou Hailiang, a 34-year-old sales manager working for Sany’s excavator division. The company’s excavator sells at four-fifths of the price of its cheapest international competitor, according to Zhou. Chinese companies have largely retained the edge over European rivals in terms of pricing due to the drastically cheaper cost of labor in the People’s Republic. The profit margins of Sany and Zoomlion topped 40 percent in 2009, in contrast to less than 10 percent among their European rivals, according to the China Construction Machinery Association (CCMA). With wages rising in China, however, companies have also had to adopt more aggressive marketing strategies to boost their sales. Eschewing China’s time-honored and almost universal network of NEWSCHINA I April 2012

value added distributors (VADs), both Sany and Zoomlion have employed their own sales teams to market products directly to end users. By cutting out middlemen, most of whom skim a significant commission off of any transaction, both companies were able to increase their revenue streams and minimize unnecessary losses. By offering hire-purchase options to smaller clients, they were able to gain a better foothold in small-scale construction, where foreign competitors had traditionally dominated. According to company representatives, these measures allowed Sany’s excavator division to eliminate its former rival, Japan’s Komatsu Corporation, gaining almost complete dominance in China’s domestic excavator market in 2011, only nine years after the first Sany excavator rolled off the production line. Business was especially good between 2009 and 2010, said Zhou, as when a big part of the Chinese government’s multibillion dollar stimulus package issued in the wake of the global financial crisis was funneled into infrastructure construction in an attempt to stave off recession. According to the CCMA, the stimulus package is believed to have spawned more than 1,400 manufacturers of construction machinery alone, though only 11 of them have annual sales exceeding 10 billion yuan (US$1.6bn). This brief golden age soon ground to a halt, when the domestic construction market was dragged down by government regulations introduced in April 2011 aimed at curbing soaring house prices across China. Railroad and highway construction has also slowed down since a collision between two high speed trains in July 2011 killed at least 40 and injured hundreds more in Zhejiang Province. Sany, like most others, missed its sales target in 2011. To maintain its sales growth and to weather the decline in the domestic market, Sany sped up its incursion into global markets, constructing factories in India, Germany, Brazil and the US. However, overseas sales still account for less than 5 percent of its total sales, despite the company’s executives having high hopes for the merger with Putzmeister. Zoomlion, the first Chinese construction machinery manufacturer to successfully buy out a foreign rival, has fared better. Cifa looked set to file for bankruptcy when it was acquired by Zoomlion in 2008, but last year managed to turn a profit according to a company statement earlier this year. Zoomlion has pledged to obtain 40 percent of its total sales revenue from its overseas operations by the end of 2015. Despite gaining a foothold overseas, the main problem faced by China’s domestic brands is that they still fall short of international standards in terms of quality, efficiency and technological sophistication. As in countless other sectors, Chinese heavy machinery is synonymous with knockoffs, according to analyst Wang Dongwei. “It is routine for companies to purchase and disassemble an imported model, study each component, and then replicate it,” he told NewsChina. This makes imported Chinese heavy machinery, despite its low price, an unattractive option for companies focused on developed markets, where health and safety regulations and intellectual property law present a considerable barrier to the import of cheap Chinese knockoffs. While Chinese companies may be holding the purse-strings of their European rivals, they have yet to compete with European quality.

Photo by Green Health

ECONOMY

Zhang Beichen (third from left), owner of Beijing Green Health Boar Breeding, selects pigs on a farm in Nebraska

Pork Industry

Globe Trotters While imported pork is rarely seen on Chinese dining tables, the almost universal dominance of American and European breeds on China’s pig farms is leaving a bad taste in the mouths of agricultural planners By Li Jia

“

Imported pork? I have never seen any on the market. These days I don’t eat pork as much as beef or lamb, which I think are safer and more delicious,” said a customer we encountered in a branch of KFC in Daxing, Beijing. Indeed, in the past few decades many Chinese consumers have developed an appetite for meats besides the national favorite, pork, in the past few decades, though the humble pig still accounts for 65 percent of China’s meat consumption. Pork prices have such a big impact on China’s economy that China’s consumer price index (CPI), the major indicator of inflation, is often dubbed the “China pig index” by certain analysts. The country even has a strategic pork reserve, recently deployed to reduce the market price of this staple foodstuff. China has long trumpeted its ability to feed its vast population with domestically-reared livestock. However, the truth behind the popular myth of self-sufficiency remains one of the best-kept secrets in China. Foreign-raised pigs are becoming increasingly integrated into China’s pork supply. In

the first nine months of 2011, pork imports increased 45 percent, breaking the national monthly record in September. Pork imports from the US alone increased fivefold in the same period, more than double the 2010 rate. Most alarmingly for China’s pork producers, the imported pork sold at less than half the price of its locally-reared equivalent.

Pig Index

Not everyone is happy with the government’s resorting to imports to ease inflationary pressure in China’s food market. “Already trapped by rising costs, we are further hampered by artificially low prices due to imports,” said Zhang Beichen, president of Beijing Green Health Boar Breeding Co. In a somewhat sensational report, China Comment, a State-run magazine, likened the debate over China’s pork industry to “water sprinkled into hot oil.” Market analysts are now concerned that China’s pork supply, and the country’s future food security, are increasingly vulnerable to overseas industrial concerns. Some observers have speculated this

Government building of Yingquan District, Fuyang City, Anhui Province

has enabled them to seize control of a staple foodstuff, citing the example of the country’s recent shift towards dependence on imported US soybeans, another domestic staple. Despite the sensationalism, however, imported pork still accounts for only a tiny percentage of China’s pork supply, and most analysts believe the recent surge is an anomaly. Of greater concern to those working in the industry is China’s ability to reduce its reliance on imported pork, and to continue feeding growing consumer demand without a serious overhaul of the domestic meat industry. “The fast growth of pork imports is temporary, not a long-term trend,” Huo Jianguo, head of the Chinese Academy of International Trade and Economic Cooperation, told our reporter. Huo, like most market observers, sees the recent fluctuations in pork imports as part of the Chinese government’s package of measures to rein in inflation. “The so-called competitive pricing of US pork reported in the media is simply non-existent,” he added. Data from China’s Ministry of Commerce support this view. According to the ministry, NEWSCHINA I April 2012

pork imports declined in October 2011 after peaking the previous month. In fact, despite US imports accounting for a bigger market share, growth in pork imports in the first nine months of 2011 declined in comparison to total annual growth the previous year. Statistics from the China Animal Agriculture Association show imports accounted for less than two percent of China’s total pork supply between 2000 and 2010 and even during the peak year of 2008 their market share dwindled, proving the dominance of Chinese local produced pork on the domestic market

Breeding Trends

However, this does not mean that China’s pork industry is as self-sufficient as it may claim. Zhang Beichen himself, while expressing no fond(Source: China Animal Agriculture Association) ness for imported pork, is a devotee of imported pigs. Each of his 1,000 breeding hogs were born in the US and cost him US$3,000 a head. He has little tural University said that China has developed interest in local breeds. “Selectively bred pigs several excellent breeds of pig over thousands from the US, Canada and Europe do better in of years of husbandry, but that funding has key indexes such as meat quality, feed cost and dried up in recent decades, followed quickly disease resistance,” he said, adding that nearly by the indigenous gene pool. “No serious 80 percent of pigs raised in China’s developed effort is being made on this issue, in sharp areas are the offspring of selectively bred im- contrast with what is being done in the US ported pigs. Genetic degradation in successive and Europe,” said Zhang. The import tariffs generations means that new pigs need to be for pork and soybeans are even lower than the imported every few years, maintaining for- national 15.2 percent tariff on agricultural eign dominance in the China’s livestock mar- imports, already far below the world average ket, if not directly in its meat market. of 62 percent. That makes China’s agricultural Pigs imported into China have a relatively products extremely vulnerable in the face of soft landing, as farmers also raise them on foreign competition strongly supported by imported feed, made from soybeans, bone- heavily subsidized US and European agriculmeal and, increasingly, corn. According to the ture. 2010 annual report on China’s agricultural While there seems to be some consensus exports by the Ministry of Commerce, 70 about the causes of China’s vulnerable livepercent of China’s soybean is imported. The stock market, analysts are divided on the best US is the largest source of China’s transgenic solution. The mainstream idea is that intensoybean imports. A Morgan Stanley report sive, industrialized production, rather than published in October 2011 sees “the potential the current system of smallholdings, would that corn will follow the same track as soy- ensure both security and improved financial beans [in China].” returns. The Ministry of Commerce estiInsufficient investment in and protection mates that 70 to 75 percent of pigs are raised of agriculture are frequently blamed for Chi- by smallholders, which has led to “neglect of na’s reliance on imported foreign livestock. sanitation, abuse of antibiotics and difficulties Professor Hu Yuegao at the China Agricul- in improving meat quality.” Huo Jianguo is

NEWSCHINA I April 2012

an advocate of nationwide mechanization and intensive farming, and Zhang Beichen told our reporter that more frequent inspections and more exacting national standards meant that bigger producers in China offered a better product because they were more accountable than almost anonymous smallholders. Hu Yuegao of the China Agricultural University however, is a traditionalist. He argues that encouraging smallholdings will attract surplus migrant labor back to China’s fields, though he also believes that a more structured system of smallholdings is needed to increase market accountability. “This traditional method makes monopolization very difficult and self-sufficiency more achievable, given the huge size of China’s rural population,” he told NewsChina. Global opinion seems to be on Hu’s side. Pigs raised by smallholders, according to a report by the UN Food and Agriculture Organization, “might also constitute a financial safety net, fulfill a role in cultural traditions, or provide additional cash for school fees, medical treatment or small investments.” However, for these benefits to be realized, even traditionalists agree that pig farming needs to up its scale. According to the Ministry of Agriculture, only 14 percent of rural households had joined cooperatives by the end of June 2011, with only 24 percent of them engaged in any form of animal husbandry. A brain drain coupled with a shortage of funds has also hindered the development of such organizations. The Ministry of Commerce report recognizes that labor quality in agriculture has deteriorated as better-educated laborers have migrated in their millions into China’s cities in search of more lucrative work. With a majority of China’s rural population continuing to live and farm pretty much as they have for millennia, weak agricultural competitiveness and heavy reliance on foreign supplies threatens both the country’s short-term food security and its long-term economic sustainability. Across the board, agricultural experts seem to agree that China’s pigs, and their owners, deserve more press.

ECONOMY

Economic Policies

A Year to Lay Foundations In this crucial year, the success of reform hinges on building a modern, market-friendly infrastructure for China’s economy. By Ye Tan

and Indonesia, forced the country into a new round of ad hoc reform geared toward industrial restructuring, promoting consumption plus regulation and control of real estate.

Top-heavy

In the past three decades, the combined assets of China’s State corporations and banking institutions have swelled. In a culture that continues to prize scale over efficiency, the size of an enterprise becomes the decisive factor in survival, with State monopolies protected from collapse regardless of their financial situations. Unfortunately for State oligarchs, the market doesn’t follow these rules. In the marketplace, management efficiency is what makes or breaks businesses, regardless of their scale, with profit margins the sole measure of success. China in 2012 faces an economic downturn far graver than that which engulfed the world in 2008. Between January and September 2011, the number of bankrupt enterprises in the eastern coastal province of Zhejiang, one of the country’s economic powerhouses, hit 23,000, a 5 percent rise from the previous year. In the same period, 105,000 new businesses were registered, but without the freedom to borrow from State banks, and lacking the capital to expand into new sectors, the small and medium-sized private enterprise (SME) sector may begin to collapse, undermining the foundations of Photo by CFP

aving bid farewell to the tumultuous 2011, we are now acclimatizing to 2012. Early signs suggest it could be an even bumpier ride. The Great Recession meant China’s export-based development strategy, which had guaranteed a high rate of employment for decades, was no longer viable. While 2009’s mammoth financial stimulus The author is a renowned financial columnist package delivered by the central government managed to keep the Chinese economy on the fast track, it was clear that such abnor- would trigger mass unemployment. Most of mally high growth was unsustainable, and China’s labor-intensive industries have been rising inflation began to erode the efficiency balanced on a knife edge for three years, atof investment. In 2011, further easing of tempting to fight off rising production costs monetary policy and a shift toward a more and a tidal wave of layoffs and bankruptcies proactive fiscal policy lacked sufficient impe- in the country’s eastern boom towns. tus to propel growth, with China’s principal In a country as vast as China, there’s never trading partners crippled by debt. a good time to make major changes to eco2012 has been touted as a year that will nomic policy. Thirty years ago, the only anmake or break China. But first, we need to swer to a near-bankruptcy of the national take stock of where we are. economy was an unorthodox land contract system, an anathema to conservatives, which triggered a mushrooming of small townshipKnife Edge It is predicted that China’s CPI (Con- level private enterprises. In 2003, once again cornered by shifting sumer Price Index) will stabilize at 4 percent and that the GDP growth rate will remain markets, China’s State-owned banking instiat eight percent in 2012. Greeks might well tutions opted for the only option of monenvy Beijing’s its superficially bullish figures, etary reform, with “capital infusion,” “going but China’s economists have found little public” and “risk control” becoming Beijing’s comfort in them. Unlike many external ob- buzzwords. In 2011, the evaporation of servers, Chinese observers know that were China’s cumulative export advantage, underthe growth rate to dip below eight percent, it mined by competition from India, Vietnam

NEWSCHINA I April 2012

China’s economic miracle. If State monopolies continue to exert parasitic influence on the all-important manufacturing sector which in turn evades taxes with impunity; and if the government continues to levy high fees to ensure higher-than-GDPgrowth in its own revenue stream, the Chinese economy could nosedive, bringing weakened international markets down with it. If the government is determined, as it claims, to break up the State monopolies and open their areas of interest to private enterprise, the “cult of size” which has been a guiding principle of Chinese economics since 1949 would be finally broken and, in turn, the sting could be taken out of any local government debt crisis. A big “if” indeed. We have no way of knowing how determined China’s reformers are to change the status quo. This uncertainty is reflected in gloomy predictions for China, and the world, in terms of the fiscal year 2012.

Poker Face

On Christmas Day 2011, Minister of Finance Xie Xuren offered a roadmap for structured tax reduction at a national fiscal work conference, a veritable Christmas miracle for businesses that have struggled with China’s burdensome private business tax rate. Typically, however, neither Xie nor his ministry made any mention of specific measures to implement the policy. Anyone hoping for a quick fix to China’s current financial difficulties and an overnight shift which will cause 1.3 billion people to stop saving and start buying are unlikely to have their prayers answered. For sustainable, long-term prosperity, a comprehensive and modern market infrastructure is the only solution. We can’t afford to be starry-eyed about 2012. But we can afford to be optimistic, if the government can roll up its sleeves and do the back-breaking labor required to lay a solid, sustainable foundation for China’s future. 

(The author is an expert in capital markets, land property and finance, and currently edits the commentary columns of The Daily Economic News. Her published works include With What We Can Save the Chinese Economy? and The Real Estate War in China) NEWSCHINA I April 2012

china

bynumbers #2 China’s international ranking in terms of demand for gold in 2011, with India retaining its top spot. Both the recent jewelry craze and a surge in bullion investment meant demand stood at 769.8 tons, up 20% on 2010. Source: World Gold Council

US up 29% EU down 42% Increased US investment in China in January 2012 was more than matched by a massive drop in EU investment. Source: Ministry of Commerce

US$292.5bn Investment: 54.2%

The amount of outstanding local government debt due for repayment in 2012, including government and government-backed liabilities. 79% of this debt is in the form of bank loans. Source: National Audit Office of China

Consumption: 51.6%;

Exports: -5.8%

-5.8% The contribution of exports to China’s official 2011 growth rate of 9.2%. Foreign trade as a percentage of GDP fell to 50% in the same period, a major drop from its 2006 peak of 67%. Source: National Bureau of Statistics/General Administration of Customs

107.37 The index of effective exchange rate of the Chinese yuan in January 2012, down 0.65% from December 2011 (taking the 2010 rate as 100). Source: Bank For International Settlements

INTERNATIONAL

25 Chinese workers held hostage in the Sinai, Egypt, January 31, 2012.

Sudan Kidnappings

Business as Usual With the frequency of attacks on its overseas workers increasing, China is being made aware of the cost of doing business in the worldâ&#x20AC;&#x2122;s trouble spots By Su Jie and Li Jia

NEWSCHINA I April 2012

Dangerous Business

“Bedouin had already blocked the road for three days when the coach carrying the Chinese workers passed by. Their target was not the Chinese specifically,” Zhang Zhizhong, an official with the Chinese embassy in Cairo, told NewsChina.

NEWSCHINA I April 2012

Photo by Xinhua

n the early hours of January 28, 2012, Hou Xianming, a young Sichuanese man, received a phone call from his girlfriend Li Yan, telling him she and her colleagues were returning to their work camp in South Kodarfan, Sudan, from the nearby town where they were employed. The following day, China’s embassy in Sudan confirmed that 29 Chinese workers employed by Sinohydro, a hydroelectric power company, including Li Yan, had been kidnapped by the Sudan People’s Liberation Movement-North (SPLM-N). Three days later, 25 Chinese workers from Sinoma International engineering were abducted by a group of Bedouin tribesmen in the Sinai. After more than ten hours of negotiations between the Egyptian government and the kidnappers, the Chinese workers were released on February 1. Seven days later, the 29 Chinese workers held in Sudan were also freed after an offer was made by the International Committee of the Red Cross (ICRC), acting as a neutral intermediary. However, it was only after the hostages were released that authorities discovered one Chinese worker had been killed in an attempt to escape the Sudanese kidnappers. According to the Chinese Ministry of Foreign Affairs, incidents in which consular staff have had to be mobilized to protect Chinese nationals have been on the increase and now number around 30,000 a year. With most contracted Chinese workers employed in infrastructure and energy projects in the Middle East and Africa, Chinese people are among the most visible, and vulnerable, overseas workforces in some of the world’s most turbulent regions.

Chinese hostages arrive at Wilson Airport, Nairobi, Kenya after being released by Sudanese militants, February 7, 2012

Zhang went on to say that as far as he was aware, the kidnappers wanted to secure the release of prisoners jailed by the Egyptian government after a string of Red Sea resort bombings which killed more than 100 people between 2004 and 2006. After the Mubarak regime was toppled a year ago, the security situation has worsened in the Sinai. On January 28, a French tourist was murdered in the area by suspected militants. In South Kordofan, Sudan, 9 Chinese workers were kidnapped in 2008, five of whom were killed during a botched rescue attempt. In an article for the People’s Daily Online, Ding Long of the Chinese Association of Middle East Studies argued that militant rebel groups, struggling to retain a profile after the Sudanese Civil War which has led to the partitioning of Sudan, had resorted to kidnapping to increase pressure on the North and South Sudanese governments. On February 8, 2012, the ICRC expressed its concern over the situation facing refugees fleeing war-torn South Kordofan to the new-

ly-created South Sudan. Security alerts warning against travel to Nigeria and Angola, two major markets for Chinese contractors, have been issued by the Chinese Foreign Ministry and the Ministry of Commerce. After Asia, Africa is China’s second largest market for international contracting projects and labor outsourcing. Some conflicts erupting in the wake of the Jasmine Revolution that swept the Middle East have forced the Chinese government to evacuate overseas workers, most notably during the civil war in Libya. As unrest continues to unfold, Chinese contractors face heightened risks in Saudi Arabia, the United Arab Emirates and Iran, the three top Middle Eastern destinations for Chinese workers. China’s domestic media have been quick to reassure the public that these hostage crises do not indicate that Chinese workers in particular have become a target. While there is some popular resentment towards China’s influence in Africa, only a few opposition parties in countries like Zambia are running

INTERNATIONAL

Photo by CFP

on anti-China platforms. Generally Beijing’s involvement in African infrastructure projects has been welcomed by regional governments. However, local attitudes towards China in general rarely influence kidnappers, most of whom simply target the most prominent foreign presence in their region. “The more China engages with the world, the more vulnerable it is to world conflicts,” said Liu Haifang, an African affairs researcher at Peking University.

Staying Safe

Ashes of a Chinese worker killed by Sudanese militants are repatriated to Chengdu, Sichuan province, February 11, 2012

Photo by Pu Feng/CFP

According to the China International Contractors Association (CHINCA), the organization’s total number of contracts in Southeast Asia increased by 28 percent in the first half of 2011, with their total value jumping 129 percent. By contrast, the total number of contracts in the North AfricaMiddle East markets were down by 42 percent and 15 percent respectively. For the whole of 2011, China’s contract values in Latin America, North America and Europe have all grown much faster than its global averages, indicating that political stability has become a major consideration for Chinese contractors looking to do business overseas. According to a statement issued by the Ministry of Commerce, during a visit by a Chinese business delegation to Libya in early February, the new Libyan government has expressed hopes that China will “resume and expand its operations in the country by assisting with the reconstruction effort following the removal of the Gaddafi regime.” This follows the country’s dramatic withdrawal of Chinese citizens following the outbreak of the civil war in 2011. “Chinese companies are still hesitant about security, and it takes time to renegotiate contracts suspended after the evacuation,” said Zhang Xiang, spokesperson of CHINCA at a press conference on February 20. Despite security jitters, the sheer volume of contracts means that in 2011, Chinese contractors outperformed all competitors in terms of revenue for the first time, according

After the 29 rescued Chinese workers arrive at Beijing Capital International Airport, a silent tribute is held for their dead colleague, February 9, 2012

to data released by Engineering New-Record 225, the world’s most important league table for international contractors. Zhang Xiang believes China’s new prominence is partly due to the withdrawal or reduction of foreign workforces, particularly those from developed countries, in the world’s trouble spots. Mandatory evacuations and economic sanctions have all led to a decline in the number of western companies

doing business in Africa and the Middle East in particular. “[Western] dominance in the high-end market compensates for losses in the developing world; but Chinese companies don’t have this option,” Zhang told our reporter.

Beyond Blue Collar

Even Chinese white collar workers are attracted by opportunities in Africa. Li Yan was NEWSCHINA I April 2012

Photo by AFP Photo by AFP

A Chinese worker cooks for his colleagues at a construction site in Khartoum, Sudan, February 2, 2012

Chinese workers on a construction site in Khartoum, Sudan, February 2, 2012

1000

Number of Chinese Labor Sent: 2003-2011

800

600

400

200

2003

2004

2005

2006

Source: Ministry of Commerce of China NEWSCHINA I April 2012

2007

2008

2009

2010

2011

Number of Chinese Labor Overseas: 2003-2011

delighted to be offered the post of translator for the Sinohydro team in Sudan, though her boyfriend, concerned for her safety, had tried to persuade her not to go. Her monthly salary of US$1,600 would be a decent wage even in China’s biggest cities. Zhang Zhe, a worker for a Chinese infrastructure project in riot-prone Lilongwe, Malawi, has remained at his post despite opposition from his family and has already secured a promotion. After the kidnapping, Sinohydro set up a 24-hour “contingency team” to protect workers. The Foreign Ministry has set up a website to provide safety information for overseas laborers, but has yet to call for a withdrawal of Chinese workers from danger zones. In September 2011, CHINCA established an overseas security alliance offering advice, insurance and travel health services for its members. Chinese workers overseas usually remain sealed off from local communities, remaining shut up in their work camps and only venturing out in groups. “Many of our members are considering increasing local labor or even using third-country labor,” Zhang told NewsChina, citing security concerns. China’s only military forces in Africa are UN peacekeepers under UN command. However, the People’s Liberation Army Navy has increased its presence around the Horn of Africa to counter piracy against Chinese shipping, a move also taken by other Asian countries, particularly India. In the case of kidnapping, China is forced to negotiate with hostage takers through proxy organizations or local governments. While this approach has often met with more success than hardline non-negotiation polices implemented by the US and other governments, it seems likely China will have to step up measures to protect its vast overseas workforce. If such measures include the dispatch of armed security or even military personnel, China will have overstepped the boundaries of its traditionally passive role in international politics.

visual REPORT

Train Man E

dward Newson, 31, from Derbyshire, England, is currently an English teacher at the China Agricultural University in Beijing. During Spring Festival, the Chinese New Year holiday period, he set off on his first long-distance journey since arriving in China. His trip began in Beijing and passed through Taiyuan, Pingyao, Xi’an and Chengdu, before reaching its final destination of Kunming. Despite solemn warnings from his students about the crowds he was likely to face during Spring Festival, the world’s largest human migration, he insisted on taking the train, reasoning that the experience would deepen his understanding of China. Before the festival, it was estimated that over 3 billion journeys would be made during the week-long vacation period. When Newson arrived at the station, he was overwhelmed by the crowds. His journey, and all kinds of weird and wonderful encounters, lay ahead of him.

NEWSCHINA I April 2012

1. January 18, waiting outside the train station in Xiâ&#x20AC;&#x2122;an

2. A little unessy among the crowds lining up to check in 3. Under the new real-name system, a passport is now required to buy a train ticket 4. Hurrying to grab a good seat

NEWSCHINA I April 2012

visual REPORT

2 62

NEWSCHINA I April 2012

1. A childâ&#x20AC;&#x2122;s toy train lightens the mood 2. The heaving crowds begin to agitate Newson 3. An elderly lady who had failed to buy a seat ticket chooses to sit directly in front of him 4. Bottled water and instant noodles are a train journey staple 5. At 3 AM, trying to fall asleep 6. Newsonâ&#x20AC;&#x2122;s height makes him something of a attraction 7. People-watching to pass the time on the long journey

7 NEWSCHINA I April 2012

Photos by Deng Xiaowei/CFP

8. Arriving in Chengdu, he makes his way to the ticket office

8 63

OUTSIDEIN perspectives from within china

Frozen Harbin

Chinaâ&#x20AC;&#x2122;s Winter

Wonderland

Distinctive Russian flourishes and the ever-impressive gaudiness of the annual ice festival make Harbin a must-see for visitors to China during the long winter months By Sean Silbert

NEWSCHINA I April 2012

Photo by Zhao Gang/CFP

imply put, Harbin is cold. Among both Chinese and foreigners, sample Harbin’s street foods – grab a stick of bingtang hulu, candied the city is notorious for its brutal, frigid winters; temperatures hawthorn fruits frozen solid by the winter chill, and pick up some regularly plummet to about thirty degrees below of the city’s famed Russian-style sausage to take home. zero, cold enough for icicles to form on beards More adventurous types can even sample ice or freeze drinks almost before you finish cream (yes, ice cream) served at a temperathem. Yet every winter, Harbiners turn ture higher than that of the biting air. their city from a frozen backwater The (even) colder months see to a winter wonderland, showing Harbin sprout ice sculptures on off its unique blend of culture every street corner as the city through a wide variety of rolls out its annual Ice Lancold weather events and actern Festival. Transparent tivities throughout the city infants, miniature houses and surrounding area. and all manner of objects At first glance, it’s difprovide ample photo ficult to miss the influopportunities along the ence of China’s massive wide boulevards. Govneighbor to the north, ernment buildings and with the city’s history banks place ceremonial inexorably linked with lions crafted from solid that of Russia. After the blocks of ice, rather than tumultuous events of the the traditional stone, outearly part of the 20th censide their main entrances. tury, hundreds of thousands Even traffic-control barriers of retreating White Russians are hewn from frozen water, flocked to Harbin to form the suggesting that some streets are largest expat community outside of forced to open up to cars in the Russia. Though almost the entire ensummer months. Following the statSt Sofia Cathedral clave scattered after the Second World War, ues towards the river at Stalin Park, a long, when the Soviet Union forcibly repatriated most tree-lined promenade along the bank leads the of its overseas citizens, and the few holdouts departed explorer directly onto the meter-thick ice of the Songafter the foundation of the People’s Republic, hua river. Ice skating, ice sledding and even ice the cultural influences in what was once go-karting are on offer for those willing to practically a Russian colony are inbrave the lines of tourists. extinguishable, evident through Using ice cut from the Songlasting markers such as street hua River, workers on Taiyang names. Dao (Sun Island) construct Harbin’s old quarter still a veritable frozen city, with fizzes with imperial Ruseverything from doorways sia’s legacy. Even newer to roof tiles constructed buildings are constructed completely from ice. in the baroque style, with Gothic castles soar dozens dramatic eaves topping of meters above the park, elaborately sculpted facades. looking over recreations of Many are concentrated along Chinese traditional gardens, the vehicle-free Zhongyang Street Indian temples, and European cot– still the city’s premier shopping promtages. The real spectacle comes when enade which has remained largely unchanged the sun goes down: each block of ice is lit since the end of the 19th century. Harbin’s cosmofrom the inside with a dazzling array of candy-colored politan flair made it a center of style; in fact, styles arrived on the hues. The event is internationally renowned, and rightly so—it truly railroad before making their way to glitzy Shanghai, briefly earning is a spectacle of spectacles, where every photo taken will draw amazethe town the moniker “Paris of the East.” Venerable stone mansions ment. Not far away is the companion snow sculpture festival, where and complexes, a showcase of European architectural styles, still house titanic cityscapes crafted from packed snow are stunning works of art. restaurants, snack shops, and fashion boutiques. This is the place to If you’ve got more time, get out of the city – the suburban areas NEWSCHINA I April 2012

travel

Photo by Cancan Chu/CFP

The far north of Heilongjiang province lends itself of Harbin, though pretty barren in terms of scento all things alpine. The Yabuli Ski Resort, loery, boast a few sights to see. The Harbin Volga cated in the mountains outside of the city, Manor, an hour or so from downtown, is a haven for skiers: crisp, fresh powder modeled in the mold of a traditional covering postcard-worthy scenery. The Russian village, is worth a look. Don’t slope is world-class: the ski runs are kid yourself, the setup is Disneyfied used by the Chinese national team. to a fault, with twee log cabins covThe resort is the largest in China, ered in snow, wooden halls made spanning three mountain peaks, from decidedly un-traditional and boastsing the longest ski run molded plastic and windmills in all of Asia. If that’s not enough, with large arms fixed in place. the surrounding national park Beyond the false fronts, the rehas your winter desires covered. sort is quiet, scenic, and does Try riding a horse-drawn sled have the flair of the old motherthrough the snowy wilderness to land within it, down to the dinindulge your chocolate box childnertime song-and-dance show and hood fantasy. Russian channels on the televisions. Despite the winter cold, Harbin is The centerpiece is a reproduction of Harbin International Ice and Snow Festival a warm and welcoming fantasyland for the stunning St Nicholas Church, once a those with thick clothing and an appreciadomineering landmark of Harbin’s old city, tion of both the gaudy and the elegant effect of filled to the brim with gilded religious iconography. a collision between Chinese and Russian esthetics.

Getting There Harbin is a major metropolitan area with flights to over a dozen destinations in China, as well as international flights to Russia, South Korea, Japan, and Hong Kong. Overnight sleeper trains connect to most major cities, including an 8-hour rapid service train from Beijing. Trains are also the fastest way to reach the ski resort at Yabuli. If you’re short on cash, long-distance buses are also available from a number of cities, but stock up on supplies – trekking it to Beijing takes about 18 hours.

Communication Harbin is often said to be one of the best places in China to learn Mandarin, with locals famous for their clipped, clear pronunciation and pitch-perfect intonation. If you don’t speak Chinese, and have no desire to learn, make sure destination addresses are printed out in Chinese characters beforehand – most drivers won’t be able to communicate in English, and English-language place names, as in most Chinese cities, often bear little relation to their local pronunciation.

real chinese

chuanyue Crossing Over

The word chuanyue, meaning “to cross over,” has recently been through something of a shift itself. While technically a scientific word referring to theoretical passage through time and space, it is now most often used to describe a style of novel or TV series that centers around a modern-day character somehow being sent back to ancient times. In 2011, the nation’s entertainment world caught chuanyue fever, with major channels pumping out primetime drama shows where everyday 21st century urbanites found themselves dropped into the feudal empire for one

reason or another. The genre found particular popularity among young viewers, especially females, leading to the term’s new definition being popularized online. Palace, probably China’s best known example of the genre, first aired in January 2011. The protagonist finds herself in the Qing dynasty (1644-1912) when contact with a piece of pottery in an antiques store whisks her off to the imperial court. Storylines largely revolve around rivalry for the throne between the princes, dressed up with love stories, conspiracy plots and plenty of kung-fu. The success of the genre has been attributed to its use of

a fantastical setting to reflect common interpersonal conflicts in modern society. Many critics claim that plotlines appeal to white-collar women because they depict the pursuit of wealth, love and power from the perspective of an ordinary woman, mirroring their own desires and perhaps teaching them how to go about achieving them. The genre has also been criticized for its often shoddy representation of history, while others have pointed out that the flashy TV dramas are decidedly disappointing when compared to the original novels from which some of them were adapted. NEWSCHINA I April 2012

flavor of the month

Guru Sanders By Stephy Chung

here’s something deeply dubious about the term “fake meat.” Although popular, I’ve always found it to be an unappetizing proposition, especially here in China, where the word fake is routinely used in conjunction with terms such as “dangerous” and “toxic.” Skepticism, of course, usually stems from ignorance, or simple caution. Like most Americans, my concept of “imitation meat” was engendered in the supermarket, where plastic-looking products such as “facon bacon” jostled for space alongside chickenfree, cholesterol-heavy chickpea patties. So it came as something of a surprise to learn that the art of counterfeit cuisine extends far beyond the frozen goods section. In fact, imitation meat has a long and distinguished pedigree. In Asian countries where vegetarianism has been intrinsic to both cultural and religious life, replicating the taste of meat has become a finely honed skill, particularly among Buddhists. The Baihe Vegetarian Restaurant in Beijing is arguably the city’s leading proponent of this ancient art. Like the food it serves, the restaurant’s location is deceptive. Hidden away on a distinctly unfashionable hutong alleyway, Baihe makes little attempt to attract new customers. In fact, many visitors fail to find it at all. Once inside, however, it’s a different story; the narrow darkened street gives way to a bright, calm and surprisingly spacious courtyard designed according to traditional Confucian esthetics, giving it a cozy, yet minimalist feel. The food too, is something of a revelation; the entire menu is made up of meat-free variations of classic meat dishes, everything from Peking duck and bright pink ersatz shrimp to shark-fin soup recreated in the most surNEWSCHINA I April 2012

prising and inventive of ways. Not that the restaurant is about to reveal any of its secrets. Although the chef was willing to share the base ingredients of each dish with us – usually involving soy protein, mushroom, melon or lotus root, the preparation itself remained a closely guarded secret, and we were politely refused entry to the kitchen. Our first dish, as recommended by the chef, was the popular hot pepper chicken, lajiao ji, made with mushroom and deepfried with cashew nuts. With KFC proving such a hit in China, it’s no surprise to learn that this is a favorite among the restaurant’s younger patrons. The dish’s most striking feature, aside from its surprisingly accurate taste, was the texture of the “chicken” pieces. Just like real chicken, the meat-less mushroom chunks break into sinewy white strands, easily fooling even the most ardent carnivore. The restaurant also offers a crispy fried chicken-style leg, created from a regional variation of mushroom known locally as the “chicken-leg mushroom,” due to its uncanny resemblance to its namesake. To illustrate the point, the chef gamely held up one the unprepared mushrooms to his mouth, in imitation of atypical fast-food commercials. Both chicken style dishes have a light, delicate spicy taste, and although crispy, don’t appear excessively greasy or salty like regular fast

food style chicken. This was followed promptly by spare ribs with lobster sauce. A sweet and sour dish, its appearance was markedly less successful than the chicken. Made from peanut protein and wrapped around a strip of lotus root to make for edible bones, the ribs had a somewhat damp spongy texture, not helped in any way by the off-brown and goopy “vegetarian oyster sauce” that coated the mix of carrots, celery and wood ear fungus. After just a few minutes of eating, the dish lost all of its shape. Fortunately, while the taste is far from accurate, the strong flavors are enough to carry the dish. Our final choice was the famous lamb skewers. A cheap yet steadfast classic Beijing street food, these are a common late night sight on street corners. Unlike those you might partake of after a heavy night out, these kebabs were made from mushrooms, skewered and then delicately tenderized to resemble wiry strips of lamb. Seasoned with cumin, salt, a little spice, and plenty of cilantro, the kebabs are then grilled until crisp. The overall effect is surprising, so much so, that my dining companion began to grow a little incredulous: “How is it that vegetables can look so much like meat?” It’s the type of question that will keep people coming to this quaint little restaurant, but unless you’re vegetarian, it’s also likely to be the reason why you don’t come back. Vegetarian food is healthy, and Baihe makes a virtue of this fact, its dishes are stacked full of nutritious vegetables, pulses and herbs. But its real selling point remains its novelty factor, food that looks like meat, but isn’t. Once you’ve got past that, there’s really very little else on offer. But it’s hard to argue with an ethical alternative to KFC. 

essay

Dragon Fever I love dragons. Since childhood, I’ve been fascinated by this most stately and powerful of mythical beasts – all the best elements of bird of prey, reptile, dinosaur and good old-fashioned monster rolled into one, the dragon, in the eyes of an imaginative child, is the perfect animal. My fascination with China was partly spurred by dragons. Associations from childhood – running my hoi sin sauce-stained fingers along the dragon-phoenix designs on takeout chopsticks, coloring in line drawings of dragon dancers during Chinese New Year in elementary school, watching the dancers themselves cavort in London’s Chinatown – these flash-frames kindled a love and admiration for China, the land of dragons, from a very young age. Even the fact that the Chinese dragon was wingless, apparently didn’t breathe fire and never showed any interest in eating virginal maidens tied to trees failed to diminish its power over my imagination. Dragons, whether Chinese or Arthurian, were cool. I wanted one. This brings me to one of the biggest disappointments of my childhood: the day I discovered my Chinese birth sign. I had always been ambivalent towards my status as an Aquarian – I mean, how excited is a small boy likely to get over some chick with an amphora? However, when we had a special class on the Chinese zodiac in elementary school (it must have been Chinese New Year), and I learned everyone got allocated an animal according to their birth year, my ears pricked up. When it turned out one of those animals was a dragon, second, in my young mind, to only the tyrannosaurus rex, my excitement went into overdrive. Then I found out I was an ox. What a gyp. Why couldn’t my parents have put things off until 1988? Didn’t they know they could have had a dragon, rather than a dumb ox? All I could do was take consolation in the fact that I wasn’t a rat. It was only after my arrival in China, well

Illustration by Xiang Zhaohui

By Jack Smith

When the first tribes that would go on to form the backbone of the Han ethnic group were formed, they pooled their totems, creating the Chinese dragon from off-cuts of hawk, snake and even a flying pig.

over a decade later, that I learned the Chinese shared my love of dragons, and then some. I even wound up in a relationship with someone from Taiyuan, Shanxi, better known as Dragon City. I also discovered to my bovine chagrin that the dragon is one of the most auspicious birth signs going. The only mythological creature in the Chinese zodiac, the dragon has massive cultural importance in China way beyond twee street performances. When the first tribes that would go on to form the backbone of the Han ethnic group were formed, they pooled their totems, creating the Chinese dragon from off-cuts of hawk, snake and even a flying pig. Appropriately enough, the resulting chimera was adopted as the symbol of the Emperor, emblematic of authority, wisdom, nobility, strength, wealth and prestige. The dragon’s feng shui element is water, an association dating back to sacrifices offered to

the dragon gods during ancient droughts and now the companion element of riches. Put simply, dragons mean big bucks. It follows, then, that if your son or daughter is born a dragon, he or she will go on to great things. With the Chinese zodiac focusing on birth year, rather than birth month, couples are able to more or less plan what sign their child will be born under. When you only get one shot at having a kid, you need to get everything right. Where better to start than their birth sign? Augment this knowledge with pressure from superstitious parents and in-laws warning you to get busy before the less auspicious year of the snake rolls around, and the choice seems clear. As a result, the State Family Planning Bureau has predicted a five percent hike in the birth rate, putting additional pressure on the country’s overstretched schools, welfare system and jobs market. Some might think that if a superstition could kick-start a demographic crisis, then said tradition is foolish. But not me. Why is it ridiculous to take a tradition so seriously that you structure your culture around it? Perhaps my elementary school, which boasted precisely zero Asian students, rolled out special lessons on the Chinese zodiac once a year because these ancient totems stirred something primeval in even the most prim schoolteacher. While Chinese New Year couldn’t have had less direct relevance to my classmates, we all connected with its symbolism and traditions, and some, myself included, showed more enthusiasm for learning stilted phrases in Cantonese and clumsily replicating Chinese characters in Magic Marker than in the remainder of the school year. Something about this culturally intricate but resolutely animistic festival spoke to all of us in a way the prettified, commercialized fripperies of Christmas never quite managed. Which is why I won’t be surprised if this predicted baby boom does indeed come to pass. I’d want my son or daughter to be born a dragon.  NEWSCHINA I April 2012

Cross-Straits Blues The bewilderment that accompanies arriving in China for the first time is hard to beat. I’d been travelling on the Trans-Manchurian railway for five days, an experience that gradually blurs the passing of time until you are almost oblivious to the progress of the train. “Train lag” sets in: where once I would rise with the sun, I found that every day I travelled east I lost an hour or two, so that by the end of the journey I was waking at dusk. With my sleeping patterns shot to pieces and nothing but the inky blackness of the endless Siberian night visible outside the window, it seemed natural to pass the time by sharing cultural notes with my fellow travelers. Sessions exchanging queries on the merits of vodka versus whiskey were a particular favorite among my newfound Russian friends. This was the discombobulated and slightly drink-addled state I found myself in when, with no warning whatsoever, the train pulled in at my destination. My things were scattered all over the carriage, but I managed to throw them together and bundle myself onto the platform at Changchun station. Blinking in the sunshine, I quickly realized I’d left my glasses on the train. I then fell victim to the classic con trick performed on disorientated foreigners the world over, and was convinced by an enterprising Chinese couple that it was a far better idea to pay for a ride to my final destination with them than to catch the local train. Three hours later, somewhere on the outskirts of a small town called Siping in western Jilin Province, my chauffeurs decided they had better things to do than cart me around in the waning light, and deposited me at a small hotel. After much wrangling, they finally convinced the staff that there wouldn’t be a problem with this gangly 19-year-old Englishman staying with them for a while, despite their protests that they were not permitted to accept foreign guests. With an apologetic smile, I clambered up to my room, and sat down to wait and see what would happen next. Having accidenNEWSCHINA I April 2012

Illustration by Xiang Zhaohui

By David Green

I was simply and abruptly orphaned after having fleetingly been part of a Chinese family.

tally stumbled into the communal toilet, I resolved to barricade myself in my room and meditate to the sound of choral spitting resounding around the hotel until someone came to rouse me. I was eventually collected and whisked to the safety of the martial arts academy I was enrolling in, where I safely spent the next two or three months. After such a traumatic introduction to the country, I thought I was immune to Chinarelated culture shock. But returning to Beijing after a two-week Spring Festival break in

Taiwan, I found myself unsettled. I couldn’t really place the source of the feeling, only it seemed that somehow Beijing no longer felt quite like the home it become over the last four years. While in Taiwan, I had acclimatized to its comparatively balmy winter, and was less than impressed by the sub-zero temperatures that greeted me on arrival at Beijing Capital Airport. But there was more. I’d been to visit my girlfriend’s mother and the rest of her Taiwan clan. While there, I’d allowed myself to completely switch off from the pressures that gnaw at the mind when you are in familiar surroundings, whether they be the city where you work, or the place you grew up in. It did not sit well to return to a bleak Beijing facing the prospect of an endless, polar commute. More than this, though, I’d been swept away by my first true experience of a Chinese New Year. I’d been lucky enough to light fireworks with families in Beijing, but always felt one step removed from the festivities. In Taiwan, I’d been accepted as part of a family. I’d been scolded for picking up the coins stacked in the corner of my host’s new house, an offering meant for the spirits. I’d “overseen” the creation of a myriad New Year’s Eve dishes, and played midnight dice with my girlfriend’s extended family until I’d lost almost all the contents of my red envelope. In the daytime, I’d visited temples and had the finer points of Buddhist offerings explained to me. I’d also made myself scarce for the special “mother and child” day of the festival. I realized I wasn’t disenchanted with Beijing. I was simply and abruptly orphaned after having fleetingly been part of a Chinese family. The absence was made more poignant because I’d now experienced it in a Chinese setting and thus unaffected by the cultural differences which assuage my physical distance from London. Having experienced a true home away from home, Beijing would never feel the same again, but then Taiwan is not so very far away, and spring is just around the corner. 

Cultural listings Cinema

The Real Hong Kong Daily life in Hong Kong is hardly a non-stop flurry of gunfights and car chases involving gangsters and the police, as depicted in the territory’s occasionally schlocky silver screen output. However, in the latest offering from gangster-loving director Johnny To, movie-goers can read between the lines to drink in a unique vision of life in one of Asia’s most crowded international metropolises. With its crucial finance industry badly hit by the European debt crisis, Hong Kong’s economy has struggled to remain afloat. Taking these uncertain times as its backdrop, To’s movie Life Without Principle tells the story of a triangle of interests between a gang member, a bank clerk and a policeman. As the story unfolds, daily pressures faced by ordinary Hong Kongers, including high real estate prices, a status-obsessed class system and a struggling economy, are gradually incorporated. Coinciding with a recent downturn in relations with the mainland, To’s movie has provided additional food for thought. Music

End of a Pop Era At age 60, pop icon Feng Fei-fei passed away in Hong Kong January 3. A Taiwanese folk and pop singer, Feng was one of the defining figures of the Chinese pop scene in the 1980s and early 1990s. During her long career, Feng released nearly 100 albums across several genres. Numerous songs from her golden years still enjoy massive popularity throughout the Chinese diaspora, especially among mainlanders born in the 1970s and 1960s, who are given to selecting her songs in karaoke bars. Feng’s death kindled a now-familiar wave of nostalgia for the optimism of the 1980s, with fans recalling the pop classics of a simpler time, a phenomenon now widespread among China’s music aficionados, seemingly starved for new pop icons. Book

Retelling the Modern History of China By Zhang Ming

Aside from pseudo-historical archetypes of demonic foreigners, perverted feudal rulers, tyrannical warlords and rapacious plutocrats, average Chinese citizens have a rather skewed perspective of their own modern history, thanks both to a linear school curriculum and the loose treatment of historical fact by the country’s influential entertainment industry. Controversial intellectual Zhang Ming, a history professor at Beijing’s Renmin University, has made his history class one of the most popular courses on campus by “correcting” student preconceptions about Chinese history. Compiled under the title Retelling the Modern History of China, Zhang’s lectures are now receiving plaudits from historians and students alike.

Exhibition

Right to Be Bald

At the turn of the 20th century, women in China were suddenly offered their freedom from domestic servitude, gaining at a stroke the universal right to education, self-determination in marriage (and divorce), employment and, eventually, extended political rights. Yet, in today’s society, Chinese women are voicing their frustrations with misogyny at all levels of society, a problem many believe has been exacerbated by the rising tide of consumerism. “Bald Girls,” an exhibition held at the Spanish-backed Iberia Center for Contemporary Art from early March to April, aims to challenge the “new male dominance.” Xiao Lu, Lan Jing, Li Xinmo, three female artists representing the 1980s, 1990s and 2000s respectively, interpret the definition of female liberation through their bold and challenging works. NEWSCHINA I April 2012

NEWSCHINA I April 2012

Commentary

Once again, China is at the crossroads Just like 20 years ago, China is now in need of leaders who dare to break the deadlock over serious political reform By Qiu Feng

n February, during a trip commemorating the 20th anniver- ficials would appear to agree with the consensus among experts sary of the keynote speech made in 1992 by Deng Xiaoping, and the general public that political changes are urgently needed. the late architect of China’s era of economic liberalization, Pre- But so far, nothing significant has materialized. When calls for mier Wen Jiabao reiterated the importance of reform. Vice-premier reforms from the country’s very top leaders themselves do not lead Li Keqiang, who is expected to succeed Wen this year, also vowed to tangible progress, the people are confused about who will actuto continue Deng’s cause: “Without reform, we are at a dead end.” ally carry them out. Such promises from top leaders, however, have not been greeted With the country increasingly divided, many believe that powith much enthusiasm. Chinese peolitical reform will be inevitable, and ple want concrete plans and actions. there are three ways it could hapTo some extent, the current situapen. In the first scenario, China’s When calls for reform from tion in China is similar to 20 years economic growth slows down or the country’s very top leaders ago when Deng launched his reform stagnates, and political reform is themselves do not lead to tangible program. Back then, China faced seforced upon the government. Soprogress, the people are confused rious challenges, as the conservatives cial conflicts would intensify, leadabout who will carry them out. who opposed further liberalization ing to political turmoil, eventually and reform had consolidated their effecting governmental change. The positions following the Tian’anmen second option is to launch reforms Square incident in 1989. It was of different styles in different localifeared that the country would regress ties, and then carry out reform at from its track of reform, and return the national level. The final option to darker times. By visiting southern China and addressing the is to kick-start serious reform with the Communist Party leaderwhole nation with his personal influence, Deng managed to tip ship change in 2012. the balance towards reform. Obviously, the former scenario is the least desirable for China’s However, China’s reform has so far been largely confined to the leaders. But whether or not it will happen will depend on how the economic field, while political reform has stagnated. The result is new leadership handles the issue of reform. Just like 20 years ago, a distorted administrative system in which the government has China has come to a crossroads where determination, courage become disproportionally rich and powerful, accompanied by an and a sense of responsibility is needed among the new leadership unbalanced private sector. As a result, social grievances in China to steer the country onto the right track. have been intensified, not soothed, by economic development. Often talking about the importance of reform themselves, of(The author is a freelance commentator)

NEWSCHINA I April 2012