December 2013

SOCIETY Stranger Than Fiction: Online Literature POLITICS Body of Evidence: Forensics Chief Resigns

neighbor li

Can Li Keqiang convince the rest of Asia to pivot to China?

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Volume No. 064 December 2013

SPECIAL REPORT Golden Gateway: Shanghai FTZ

EDITORIAL

Published by China Newsweek Corporation Publisher: Liu Beixian Executive Director : Liu Beixian Editor-in-Chief: Wang Xiaohui 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: Sean Silbert 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: Wang Chenbo Account Manager : Ren Jie Tel: 86-10-88388027 Circulation Manager: Yu Lina Tel: 86-10-88311834 Advertising Director: Gao Weiwei Tel: 1-212-481-2510 Marketing Promoter: Jerry Meng Tel: 1-212-481-2510 New York Office: Wang Yongzhi, Ruan Yulin, Li Yang Washington Office: Wu Qingcai, De Yongjian Los Angeles Office: Mao Jianjun San Francisco Office: Liu Dan Houston Office: Wang Huan London Office: Zhou Zhaojun Tokyo Office: Sun Ran Paris Office: Long Jianwu Bangkok Office: Yu Xianlun Kuala Lumpur Office: Huang Hongbin Moscow Office: Jia Jingfeng Manila Office: Zhang Ming Berlin Office: Huang Shuanghong Sydney Office: Zhu Daqiang Legal Advisor: Allen Wu ISSN 1943-1902

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NEWSCHINA I December 2013

From “Market-oriented” to “Market-based”

A

s China’s leadership prepares to convene in by State-owned enterprises, which have little inNovember to set the tone of national pol- centive to compete or innovate. icy for the next few years, it has been reAt the Summer Davos Forum held in Septemported that “market-based” ber, Chinese Premier Li reform, an escalation of the Keqiang said that China current “market-oriented” will lower the entry threshDespite decades of approach, may be on the old for private capital in a market-oriented reform, cards. Although details of wide range of industries, government intervention the reform are yet to be disincluding finance, energy, has become embedded closed, the reform, should transportation, telecommuin every aspect of the it materialize, is expected to nication, and public facilieconomy. help China achieve muchties. But similar promises in needed economic restructhe past have come to nothturing, laying the foundaing. Although the governtions for another decade of economic growth. ment has lifted legal barriers for private capital to But for any such reform to be successful, three enter these industries, there remain administrative goals must be achieved: reforming the pricing barriers at both the local and provincial level. mechanism of major production factors to be truly Since assuming power, Premier Li has repeatedly market-based; breaking State monopolies over key emphasized that the administration will focus on service industries; and reducing government inter- decentralization and the streamlining bureaucracy, vention in the market. and within this year, the government has removed In recent decades, as major production factors, mandatory administrative approvals in many including land, energy and capital, have all been industries. However, despite decades of marketcontrolled by the State, their prices have skewed oriented reform, government intervention has bein favor of the State sector. The result is that the come embedded in every aspect of the economy.

State has commanded a much larger share of na- There is no way that isolated efforts can lead to tional wealth than the populace, leading to low substantial change. consumption and an investment-driven growth Now, the leadership has a golden opportunity model. Since this model can now no longer sustain to tackle this issue systematically. By escalating reitself, it is time to fix the distorted pricing mecha- form from “market-oriented” to “market-based,” nism. the leadership should set a clear line between the Another major problem with China’s economy “invisible hand” of the market and the “visible is unbalanced development between the manu- hand” of government intervention. Only this way facturing and service industries. The fundamental can the Chinese economy regain its momentum reason is that major service industries, including and achieve its much-vaunted goal of economic finance and telecommunication, are monopolized restructuring. 

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Contents

all smiles

Photo by CFP

Could a combined charm offensive by China’s top leaders allow the country’s relations with East and Southeast Asian neighbors to move beyond economic convenience and develop into genuine strategic partnerships? China’s pundits seem to think so

Editorial

politics

Cover Story

society

01 From “Market-oriented” to “Market-based” 10 Forensic Medicine :

Pathologically Politicized

14 New Strategic Thinking :

You Pivot, I Pivot/Playing Smarter

23 Charitable Organizations :

Something’s Gotta Give 26 New Campus :

One Island, Two Systems 28 Web Literature :

Flight of Fantasy 32 High School Homicide :

Underdog Killer

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P10

P23 NEWSCHINA I December 2013

Contents

P54

P64 34 Yang Bin :

Caring for Criminals

feature

outside in

36 Rare Disease Choir :

Song of the Fireflies special report

40 Shanghai Free Trade Zone :

Fourth Time’s the Charm/All for the Rookies economy

48

50

UnionPay vs. Alipay : Spoil Sport Housing Market : Forever Blowing Bubbles

HISTORY

54 Beidaihe :

The Summer Capital

visual report

60 Quacking Mad 64

67

Hidden Ganzi : To the Skies Flavor of the Month : Happy Hani

Commentary

P50 P60

72 A new world needs a new world order 04 MEDIA FOCUS 05 What They Say 06 NEWS BRIEF 08 Netizen Watch 53 China by numbers 66 real chinese 68 ESSAY 70 CULTURAL LISTINGS

culture

57 Yan Lianke :

Chronicles of Myth and Reality NEWSCHINA I December 2013

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NewsChina Chinese Edition

Southern Metropolis Weekly

October 14, 2013

October 10, 2013

Sugar Rush

Choice and Dignity

According to a recent survey jointly conducted by the Chinese Medical Association and the Chinese Center for Disease Control and Prevention, one in 10 Chinese adults suffers from Type II diabetes, making China home to the world’s largest population of diabetics. The survey also warned that half the Chinese population is already at a high risk of contracting the disease, often the result of a sedentary lifestyle combined with a poor diet. Evidence that the number of young sufferers has exploded while older generations have seen more moderate rises in infection rates adds weight to claims that rapid urbanization is creating a costly legacy for the alreadyunderfunded public healthcare system. Medical experts are now calling on the government to raise awareness of the importance of a healthy lifestyle among China’s urban residents.

China Economic Weekly

Though common in the West, “dying with dignity,” or the right to have life support systems removed at the request of a terminally ill patient, is a brand new concept in China, where discussion of death remains taboo. In order to avoid controversy and opposition from the patients’ families, Luo Yuping, a 62-year-old former doctor, is promoting a “living will” program in China, encouraging patients to make their own choice. However, they found most people surveyed either believed it was “morbid” to talk about death, or misunderstood the system to mean that doctors would arbitrarily decide when to pull the plug. Luo’s team is now trying to break this taboo by lecturing about death. She told the media that her living will program is gaining more support each year, but that progress is slow.

Economy & Nation Weekly September 27, 2013

TCM Tightened The Chinese Pharmacopoeia Commission is now drafting a new version of the official national pharmacopoeia which will tighten controls on the use of pesticides on farms growing herbs for use in traditional Chinese medicine (TCM). Unacceptable levels of toxins in medical products remains the main barrier to TCM exports, and while practitioners have attempted to call international restrictions on the trade “protectionism,” there is growing consensus that the Chinese government has done little to regulate or supervise the TCM industry. Experts have suggested differentiating supervision between developing and developed suppliers while also gradually standardizing TCM products in order to smooth out a chaotic and easily corrupted industrial chain.

September 27, 2013

Road Restrictions According to the Chinese Auto Industry Association, a total of 25 Chinese cities which suffer the worst traffic jams in the country will restrict car purchases by 2015. Measures are already in place in Guangzhou, Shanghai and Beijing (where license plates are issued by auction or lottery) and Guiyang, Guizhou Province which limits new car purchases to 2,000 sales per month citywide. However, critics argue that these restrictions have impeded the rights of road users, while overburdening already struggling mass transit systems. Experts argue that more coherent city planning, rather than the ad-hoc, profit-oriented form currently infamous in cities like Beijing and Shanghai, is the only solution.

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Xinmin Weekly October 13, 2013

Vain Game Following government calls for frugality, the 2013 National Games, China’s biggest and most influential domestic sports event, saw pared-down opening and closing ceremonies and a significant reduction of personnel.

However, these nods to austerity did nothing to shake accusations of corruption, with this Games as riddled as its predecessors with claims of event fixing and shady decisions. Umpires came under fierce fire for almost all decisions, while a number of athletes protested the outcome of their events. The media attributed the chaos to the political nature of China’s official sports system, which critics claim encourages cheating and rewards unfair competition while doing little to improve awareness of sports among the general population.

NEWSCHINA I December 2013

Illustration by Wu Shangwen

“We often cut arts and music out of our basic education, even though they are good for creativity. Therefore, Chinese people generally have nothing in their left brain.

How can we possibly create?”

Professor Zhao Xiao, of the Beijing University of Science and Technology, on utilitarian Chinese education.

“Different from the mainland writers of the past, I will neither demonise the Kuomintang nor deify the Communist Party of China. What I do is make them real.”

Mo Yan, winner of the 2012 Nobel prize for literature, during a speech to Taiwanese readers.

“GDP figures only tell you about scale and speed, but not cost and efficiency, nor fairness of distribution.

A highly efficient 7.5 percent is more valuable than an inefficient 8.5 percent…It is unwise for the government to bail out local governments that have remained sluggish for years.”

“Never replace intensive reading with this socalled‘extensive skim-reading.’The latter will make you nothing but an idiot.”

Writer Wang Meng on the side effects of the information overload that comes with microblog use.

“Although China only introduced government spokespeople 10 years ago, the system is regressing as quickly as the national soccer team.”

Economist Qin Xiao speaking out against government stimulus.

CCTV host Bai Yansong on government departments’ increasing reluctance to explain themselves.

“Preserving an old mansion is just a simple restoration of a material space. It is the spiritual activities that truly vitalize [that space].”

“IfwewaitanylongertopromoteGMrice,wewillbe holdingbackthecountry’sdevelopment.”

Professor Zhou Ruchang suggesting that a historic poetry club should be restored to Prince Kung’s Mansion, the official residence of a Qing Dynasty prince.

“Even those running casinos dare to declare their assets. How about mainland officials – the so-called proletarian pioneers and public servants?”

A total of 61 academicians reportedly petitioning the State to commercialize GM rice, despite growing controversy.

“If we’re no longer shocked, we’ve lost our bottom line.”

Writer Yi Zhongtian on the reasons behind Chinese people’s perceived moral decline.

Jurisconsult Xu Xin urging mainland officials to follow their counterparts in Macau and publicly declare their assets.

NEWSCHINA I December 2013

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Top Story

“Grey” China Jazz singer Patti Austin couldn’t have expected she would be forced to call off her show in Beijing due to a sudden asthma attack. This was the first time in the 63-year-old singer’s career that she had had to abandon a performance for health reasons.

Although Austin’s agent did not reveal the cause of her attack, the culprit is widely believed to be the “super-smog” that has plagued northern China since October.

The capital, Beijing, for example, was covered in thick smog during the latter part of the country’s National Day holiday (October 1-7), with levels of PM2.5, (airborne particulate matter no larger than 2.5 microns in diameter) at one point rising to exceed 750 per cubic meter, 250 over the scale’s official upper limit level of 500.

More severely hit were the three provinces that make up China’s northeast (Liaoning, Jilin and Heilongjiang) where the fuel (mostly coal) used in the heating systems has aggravated air pollution and paralyzed many cities, causing many elementary and middle schools to suspend classes and most highways to close.

Despite having closed many plants several years before for the Olympic Games in 2008, Beijing is still heavily polluted by fuel emissions from its neighbors Tianjin and Hebei Province, where heavy industry is booming. The growing number of cars is another major cause of the increasingly hazardous smog, with vehicle emissions accounting for 22.2 percent of the air pollution, almost 5 percent more than contributed by fuel emissions, according to official data.

On October 22, the Beijing government issued its strictest ever measures against smog, including shutting down heavily polluting power plants, temporarily suspending school classes and imposing significant traffic restrictions.

These policies have been criticized by drivers for infringing on their

right to the road. However, it may be Beijing’s only way of meeting the goal listed in the latest national plan for dealing with air pollution: to reduce PM2.5 levels by 25 percent between by 2012 and 2017.

Society

Army Singer’s Son Sentenced to 10 Years

Meng Ge (third from left) looks gloomy after her son’s verdict

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Li Tianyi, the son of two well-known Chinese People’s Liberation Army (PLA) performers, was sentenced to 10 years in prison for gang rape.

The verdict was announced by a local Beijing court on September 26. According to the court’s statement, on February 20, ring-leader Li Tianyi and the other four defendants forced their intoxicated female victim into a local hotel room and raped her.

Given that Li Tianyi’s father, Li Shuangjiang enjoys a powerful position within the

PLA, and that the younger Li was detained just over one year earlier for assaulting a man whose car had boxed in Li’s BMW (see: “The Show Must Go On,” NewsChina, October 2013, Vol. 063), the rape case triggered outrage, with public calling for a harsh punishment for the privileged Li Tianyi.

Meng Ge, Li’ Tianyi’s mother, however, has continued to argue for her son’s innocence, and has criticized the public for interfering with justice. She has said she plans to appeal.

NEWSCHINA I December 2013

Military

Hurun Ranks Richest Investors

China Gets a Large Missile Order from Turkey

The Hurun Report, China’s Forbes, issued its first ever Richest Investors shortlist on October 9, with Liu Yonghao, the largest shareholder in China Minsheng Banking Corp. Ltd., the mainland’s first national private commercial bank, topping the ranking with 20 billion yuan (US$3.2bn).

A sub-list of the Hurun China Rich List Series 2013, the Richest Investors only weighs the wealth an individual has earned by investment, with the lower threshold at five billion yuan (US$790m), the second highest after the Richest Housing Magnates list.

According to the list, a total of 22 investors have earned more than five billion yuan (US$790m) through investment, and their average wealth totals 9.6 billion yuan (US$1.5bn), 50 percent higher than the average wealth of the Hurun China Rich List 2013. Judging from the list, IT and finance have become the most attractive fields for investment.

Liu Yonghao, 62, China’s biggest animal feed producer, is listed 17th on the Hurun China Rich List 2013, possessing assets valued at 34 billion yuan (US$5.4bn).

Shares of Investment from Top 20 Investors IT: 36.8% Finance: 26.3% Resources: 7.9% Manufacturing: 7.9% Social Service: 5.3% Food & Beverage: 5.3% Medical: 5.3% Housing: 2.6% Retail: 2.6% Liu Yonghao

Headquarters of Top 20 Investors Beijing: 27.3% Shanghai: 27.3% Hong Kong: 9.1% Zhejiang: 9.1% Guangdong: 9.1% Fujian: 9.1% Others: 9%

Source: Hurun Report (www.hurun.net)

Economy

PBC Signs Currency Swap Agreement with ECB On October 9, the People’s Bank of China (PBC), China’s central bank, concluded with the European Central Bank (ECB) a three-year agreement on a currency-swap worth 350 billion yuan, or 45 billion euros (roughly US$62bn).

The specific exchange rate between the two currencies has not yet been revealed, but analysts predict that it will be lower than the market rate.

Given that the currency swap between two governments is usually a measure to increase the reserves of the other side’s currency in case of a financial crisis, the agreement is another sign of the yuan’s rising status on the international markets.

So far, the PBC has signed currency swap agreements with a total of 22 countries and regions, with the amount involved totaling 2.2 trillion yuan (US$349bn).

China’s HQ-9 (short for “Red Flag” 9) remote surface-to-air missile (SAM) has beat its US, British and Russian opponents to a US$4 billion order from Turkey on September 29.

The big order is a part of the “T-Loramids” program, Turkey’s first domestically-made longrange defence system against aircraft and missiles. Although some Western media, including the US outlet Defense News, doubt whether HQ-9 could integrate smoothly with NATO’s existing SAM system, Turkey told the media that HQ-9 could independently detect potential threats with its own radar, just as the US’ Patriot missile does.

During an interview with the State-owned People’s Daily, Chinese military expert Li Jie attributed China’s winning of the order to the HQ-9’s high performance and low cost. Meanwhile, the Voice of Russia cited a Turkish defense official on October 10, saying that China is much more likely to transfer its missile technology to Turkey than the US. According to the official, China promised to deliver the missile within 24 months and agreed to provide assistance in developing Turkey’s missile system.

Politics

Bo Xilai Verdict Upheld The People’s High Court of Shandong Province on October 25 upheld the judgment from a lower court that sentenced Bo Xilai, former Politburo member and Chongqing Party secretary, to life imprisonment.

Bo stood trial on August 23 in a court in Jinan, capital of Shandong Province, accused of embezzlement, abuse of power and corruption. Bo was found guilty, despite denying all the charges, and filed an appeal on September 23.

The high court rejected Bo’s appeal, claiming that the evidence provided by the lower court was clear and conclusive enough for a guilty verdict. While the Jinan court provided what it claimed were live updates of proceedings during the first trial via its microblog, the details of the second trial were not made public.

According to Chinese law, which defines the verdict of the second trial as a final judgment, experts have said that Bo has no chance of a retrial unless he is able to offer new evidence to defend himself – an unlikely prospect.

NEWSCHINA I December 2013

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Photos by IC

Ranking

What’s Embarrassing China?

Poll the People After tourist sites were mobbed and highways jammed with traffic during the October National Day vacation, there was a widespread outcry at the truncated official holidays permitted by Chinese law, which concentrate almost all citizens’ vacation time within the same few days every year.

Due to lack of lavatories, athletes competing in the Beijing Marathon on October 20 had to urinate on the street. Some even gathered to urinate along the outer wall of the Zhongnanhai compound, the heavily-guarded official residence of China’s top leaders and their families.

Are you satisfied with the National Day holiday arrangement?

No 77,441 80% Yes 14,497 15% Don’t care 4,900 5%

What’s Making China Angry?

What’s Amusing China?

Source: www.weibo.com

Most Circulated Post Retweeted: 832,020 times

After serving 23 years in prison, a paroled man from Baoji, Shaanxi Province found his house had been sold off 20 years previously to the local government by a neighbor. The government paid 900 yuan (US$148) for the property, which was promptly demolished.

A little girl from Nanchang, Jiangxi called the local police to report a robbery taking place at a local bank. When police arrived on the scene, instead of finding a hardened criminal holding up bank tellers, they found the little girl’s kindergarten classmate had stolen her lollipop. The boy was let off with a warning, and the girl got a fresh lollipop.

What’s Shocking China?

More than 5,000 male students at Bingzhou University, Shandong Province, were forced to undergo DNA testing by local police attempting to catch a thief who was targeting student dormitories. The testing was estimated to cost 500,000 yuan (US$82,150) in total.

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The renowned pop singer Wang Fei announced her divorce from actor Li Yapeng in the most re-tweeted post ever to appear on microblog platform Sina Weibo since its launch in 2009.

“Our marriage ended. I’m fine. Take care of yourselves.”

CHINA WEEKLY I November 2013

Top Five Search Queries On

over the week ending October 15 Yuyao Flood 84,507 Flooding in early October caused property damage valued at 20 billion yuan (US$3.2bn) and led to riots after claims the media was attempting to trivialize the catastrophe

WHO’S

HOT? WHO’S NOT?

Five-yuan coin 159,325 The central bank issued China’s highest-value coin

Hohhot Girls

Bedbugs on high-speed railway 126,326 Bedbugs were discovered on one of the showpiece trains running on the Beijing-Shanghai high-speed rail link

The local women’s soccer team beat their male counterparts 2-1 to claim the championship title in their hometown of Hohhot, Inner Mongolia.

5-trillion Air Cleaning Program 68,884 The central government unveiled an expensive program to alleviate smog in China’s cities

Top Blogger Profile Yang Dongping Followers: 1,467,377 64-year-old Yang is a professor at the Beijing Institute of Science and Technology and director of the 21st Century Education Research Institute, an NGO. He is one of China’s most renowned advocates for education equality and education reform, having long called for equal opportunities and the distribution of public resources to rural children and the offspring of migrant workers, who are currently discriminated against by the State school system.

NEWSCHINA I December 2013

Some of the images used in this section are from the internet

Evergrande 64,170 Guangzhou’s Evergrande soccer team made it into the finals of the Asia Championship, a first for a Chinese team

Floating Officials Goverment officials from Ningguo, Anhui Province, ordered underlings to photoshop them into a picture to make it look as if they were visiting a 100-year-old local woman.

Mr. Prime A man drove his giant truck, an Optimus Prime Peterbilt 379, across streets waist-deep in floodwater to distribute food and drink to those trapped in their homes in disaster-hit Yuyao, Zhejiang.

Gouging Surgeon Halfway through a surgical procedure he was performing on a local man, a doctor from Wenzhou, Zhejiang marked up his price by 2,800 yuan (US$460).

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politics

Forensic Medicine

Pathologically Politicized Practitioners at all levels concur that “messy” is the word that best defines Chinese forensic medicine. But why?

By Wang Yan, Yang Di and Su Xiaoming

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the presence of numerous CCTV cameras in the vicinity, meaning the circumstances leading up to Ma’s death were unclear.

While an autopsy report issued by the CFMA stated that “Ma died of electrocution through the electrified track,” there was no indication as to whether or not negligence on the part of subway staff and operators had contributed to his death.

The government investigation, conducted by Beijing Xicheng District Administration of Work Safety, therefore declared that Ma’s death was not the result of lax safety provision. After the investigation published its findings, Ma Yue’s mother Meng Zhaohong hired lawyer Xu Liping to exert pressure on the courts to reopen the case. “[The report] says what killed Ma, but it doesn’t explain how he came to fall from the platform or whether he died after being rescued,” Xu told the Global Times in August 2013. He added that, apparently, station staff did not attempt to administer first aid to Ma following the accident, despite this being a legal requirement.

Forensics specialist Wang Xuemei claimed that the conclusions in Photo by AFP

I

n late August, Wang Xuemei, 57, a senior female pathologist and vice president of the China Forensic Medicine Association (CFMA) announced her resignation. In a public statement, Wang cited her “extreme disappointment with the current situation of Chinese forensic medicine” as her principle reason for resigning. Pulling few punches, this former leading light in this emerging field stated that she “loathed” and was “fed up with” the “ridiculous and irresponsible” diagnoses and conclusions falsely presented as accurate by ostensibly respectable figures in her former profession.

To support her argument, she cited one particular case – the electrocution of a Beijing college student named Ma Yue while commuting on the capital’s subway – which she felt had been fudged to suit political interests.

On August 23, 2010, Ma Yue, 21, died after he allegedly fell onto the electrified rails at Gulou Dajie subway station in Beijing. The State-controlled Beijing Subway Company, however, failed to provide detectives with closed-circuit video footage of the incident despite

NEWSCHINA I December 2013

the CFMA’s perfunctory report on Ma’s death were “ridiculous and irresponsible.” She pointed out that trauma to Ma’s jaw, cited in the autopsy, could indicate that he had been electrocuted while standing on the platform. Had this been the case, then Ma’s death could have been attributed to inadequate safety provision by the Beijing Subway Company.

The Ma Yue case, and Wang’s subsequent high-profile attack on forensic medicine in China, has turned into a rallying cry for those who believe that this crucial field is almost exclusively subverted by the justice system in order to exonerate the authorities from any blame in the event of an accidental death.

Far From Exceptional

According to Meng Zhaohong, Ma Yue’s mother, she first began to have doubts about how carefully his case was being handled when she attempted to visit the morgue where her son’s body was placed following his death. Upon contacting the Shengtang Forensic Identification Institute in southern Beijing, she found the facility hadn’t bothered to record the time and date when they had taken delivery of the body from the police. Meng, suspecting that Shengtang were unqualified, refused to acquiesce to an autopsy, instead demanding her son’s case was handled by a “more professional” facility.

Upon a recommendation from the police, Meng finally chose the CFMA forensic lab due to its association with China’s leading forensics institute. At the time she was unaware that the CFMA’s forensics department, just like Shengtang’s, was a civilian institution unequipped to deal with the complexities of criminal pathology. Once Meng discovered this, she appealed repeatedly to the Xicheng district government to invalidate the CFMA’s findings, only to be rebuffed time and again.

Meng attempted to appeal to other forensics institutes affiliated with top universities, however centers with ties to Shanghai Fudan University and the Shenyang Medical Institute both rejected her case.

On August 19, Meng sued the Xicheng district government for “unlawful administrative inaction.” Her case remains pending.

“I don’t disagree with the findings of the autopsy,” Meng told the Global Times. “I just want to know what really happened when my son fell off the platform. Now that no surveillance video footage is available, and the forensic center cannot tell me what really happened, to whom else can I turn for the truth?”

Chang Lin, vice dean of the Institute of Evidence Law and Forensic Science, China University of Political Science and Law, told NewsChina that Ma Yue’s case was only one in a series which highlight the limitations under which pathologists and forensic detectives have to operate in China.

In Chang’s opinion, forensic laboratories should not be subordinate to the police, but instead operate as independent facilities under State regulation, working alongside, not under, the police in criminal cases.

“In this way, the independence and scientific integrity of forensic sci-

NEWSCHINA I December 2013

entists can be protected,” Chang told our reporter.

Intricate Ties

Modern forensic science in China took shape in the 1980s, with some universities establishing specialist labs to explore this unfamiliar discipline, and its potential application in law. At the same time, China’s police force and judiciary set up their own forensic institutions.

Predictably, the lack of independence and objectivity in China’s justice system became the principal obstacle to the development of forensic pathology. A suspicious death in 2003 exposed for the first time the chaotic situation in the country’s forensic labs.

When 21-year-old teacher Huang Jing was found dead, naked, in her elementary school staff dormitory in Xiangtan, Hunan Province, her corpse underwent a total of five autopsies. The initial examination concluded that Huang had died of heart and lung failure, but three subsequent investigations found she had died a wrongful death. Finally, in July 2004, seven top forensic experts from Beijing and Shanghai went to Xiangtan making joint autopsy analysis, and reached the final conclusion that Huang Jing’s death was the result of serious physical trauma resulting from a violent sexual assault at the hands of her then boyfriend, Jiang Junwu.

The notoriety of Huang’s case triggered calls for the reform of the role of forensics in criminal cases. On October 1, 2005, the Standing Committee of the National People’s Congress passed the “Decision on Judiciary Identification Management” which decreed that while the police and procuratorates (the two judicial entities which determine whether a case can go to trial) would retain their forensic departments, those of the courts would be replaced by so-called “independent” labs.

Today, most criminal pathologists in China are affiliated with the police, and their role has become key to guaranteeing the country’s controversial 100 percent detection target in murder cases. Essentially, it has become the job of these forensic scientists to, by any means necessary, come up with the evidence to secure convictions in line with the investigative conclusions already reached by the police. It is also difficult for forensic scientists to overturn erroneous conclusions handed down by the police.

One forensic expert, speaking on condition of anonymity, told NewsChina that he regularly received “tips” from police investigators and his superiors on how to produce “favorable” results.

When evidence is lacking or inconclusive, he continued, police investigators often interfere with forensic reports in order to press for a speedy resolution.

“In this way, a corpse can be swiftly cremated in order to prevent further enquiry,” a source using the pseudonym He Ping told Southern People Weekly in late September.

Perhaps the most famous example of a swift cremation being used to cover evidence was the Neil Heywood murder case. Heywood’s body was cremated almost immediately after his suspicious sud-

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Photo by IC

politics

Wang Xuemei re-enacts the Ma Yue electrocution case

den death on November 14, 2011. A coroner’s report issued by the Chongqing police claimed the British businessman had died of alcohol poisoning, despite the fact that no autopsy had been conducted.

Only when Politburo member Bo Xilai’s wife Gu Kailai, along with the former head of the Chongqing Public Security Bureau Wang Lijun were arrested on suspicion of murder did it emerge that Heywood had been poisoned by Gu and Wang – though the swift cremation of Heywood’s body meant that forensic verification of this claim was impossible.

In response to mounting controversy, some forensic experts have attempted to defend their maligned profession. “Forensic scientists are among the most righteous and hard-working of civil servants,” said a scientist from the Zhejiang Provincial Public Security Bureau. “We devote ourselves to the work simply because we love it.”

Marketize

Since the government mandated the separation of forensic labs

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from the courts, nominally independent institutions have sprung up across the country. According to statistics released by the Ministry of Justice, by the end of 2012, the number of registered forensic laboratories in China stood at 4,850, employing 53,000 registered personnel. Unlike those affiliated with the police and the procuratorate, these facilities are for-profit.

According to Ren Jiacheng, a forensic expert with the Beijing Public Security Bureau, while the law mandates that these facilities meet certain national standards in terms of equipment and practice, in reality very few are required to submit to inspection. “Many of them are far from qualified,” he told our reporter. “Yet no supervision organizations have ever tried to improve the situation.”

As a result of increased marketization, forensic science in China is becoming known for cutting corners in order to secure bigger profits.

Insiders have disclosed that unregulated market competition has even led some forensic institutions to draw conclusions based on what their customers want, rather than pursuing a scientific and unbiased code NEWSCHINA I December 2013

of conduct. Some laboratories reportedly feel obliged to draw certain conclusions, as many customers refuse to pay if they don’t receive the result they expected.

Another insider told Southern People Weekly, an autopsy costs an average of 2,000 yuan (US$327), plus 1,000 yuan (US$163) for the release of the cause of death. When other expenses are factored in, a single forensic examination can cost a bereaved family member as much as 10,000 yuan (US$1,634).

Even in some universities, teachers of forensic science often neglect their classes in favor of performing lucrative autopsies. “Some universities can secure more than 200 cases per year and make over 3 million yuan (US$ 490,077) in profit,” remarked the same insider.

Chang Lin told NewsChina that some non-government forensics labs have worked out a profit-sharing deal with clients, whereby the cost of a forensic examination can be offset or even turned into profit by a successful compensation claim. By exaggerating the damage inflicted in, for example, a traffic collision, the client can gain sufficient compensation to more than cover the costs of the lab work. “Though this is illegal, it is hard to prove,” said Chang. “Dirty deals like these are done behind the scenes.”

In an investigative report from Southern Weekly, an anonymous expert held that police departments dominate China’s forensic experts, with no checks and balances to rectify the problem. Another forensic scientist, Wang Jianwen, revealed to the media that in some cases non-government forensic labs establish profitable relationships with the authorities. “For example, a good relationship with the traffic police may translate into priority access to the scene of an accident,” she said, adding that this in turn will result in kickbacks for police officers.

Goals?

In short, China’s government-affiliated forensics departments are subject to the wishes of the State, while non-government entities are typically moneymaking schemes with little scientific value. Thus, forensic science is among the most ridiculed of all China’s medical disciplines.

In her statement to the media, Wang Xuemei said that “through 30 years of adherence to professional ethics, I feel that I myself am not able to change the current situation for the better. I simply cannot come up with wrong judgments against my conscience any longer, even at the cost of my own life.”

During the interviews with NewsChina, some interviewees emphasized that the overhaul of the system is an imperative.

Some argue for a wholesale adoption of forensic detection systems already in place in the developed world. Others are pushing for more moderate reform within the existing framework. What is clear, however, is that in today’s China, any discipline associated with the justice system is going to struggle to rise above the ever-present problem of special interests. NEWSCHINA I December 2013

Forensics Under the Microscope 2007, Heilongjiang Province. Dai Yi was found dead at home. Four separate forensic examinations debunked police claims she had died from an overdose of cold medication.

A follow-up autopsy ordered by Dai’s family seemed to rule out drug abuse altogether, instead finding evidence to suggest Dai might have been strangled or suffocated to death.

These findings were then overturned by a government coroner. Two years later, police were still insisting that Dai had died from poisoning.

2010, Henan Province. Convicted murderer Zhao Zuohai was released after ten years imprisonment when his supposed “victim” walked back into his former home very much alive. Zhao’s wrongful conviction in 1999 was due to the local forensic team’s misidentification of a headless corpse found in Zhecheng County.

July 2013, Wuhan, Hubei Province. Deng Zhengjia, a watermelon vendor, was beaten to death by urban enforcement officers. While an official report concluded that Deng “died of brain abnormality and burst blood vessels caused by an external force,” this conclusion was rejected by Deng’s family as an attempt to turn a potential murder charge into one of involuntary manslaughter.

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NEWSCHINA I December 2013

China’s Pivot

Chinese Premier Li Keqiang delivers a speech at the Thai parliament in Bangkok, Thailand, October 11, 2013 NEWSCHINA I December 2013

Photo by AFP

With recent high-profile tours to the ASEAN countries, Beijing has launched a new charm offensive in Asia.

Making lucrative business offers and attractive proposals across a broad range of fields, including finance, security and maritime cooperation, China appears determined to retain and strengthen its influence following recent territorial disputes. Is China matching the US pivot to Asia with a rebalancing of its own?

15

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New Strategic Thinking

You Pivot, I Pivot China’s recent charm offensive towards Southeast Asian countries reflects the formulation of a new strategic thinking over its role in the region and the world as the US rebalances towards Asia

By Yu Xiaodong

T

hanks to the absence of US President Barack Obama, who canceled his Asian tour to focus on resolving the government shutdown in Washington, Chinese leaders went unchallenged when they launched a new “charm offensive” towards Southeast Asian countries in recent talks held in October, which many say indicate the formulation of a global strategy of the Chinese new leadership in response to the US pivot to Asia.

‘Common Destiny’

Making his first trip to Southeast Asia since assuming power in March, Chinese President Xi Jinping raised a number of proposals to deepen economic integration with ASEAN countries during his visit to Indonesia to attend the APEC Summit in Bali. In a speech addressing Indonesian lawmakers on October 2, Xi proposed that China and ASEAN countries should build “a community of common destiny” and establish a “maritime silk road economic belt.” He also offered US$1 billion to set up

16

an “Asian Infrastructure Investment Bank” to facilitate economic integration between China and ASEAN countries.

During his visit to Malaysia following the APEC Summit, Xi promised to launch a “five-year plan” to increase the volume of bilateral trade from US$94.8 billion in 2012 to US$160 billion by 2017. Both Indonesian and Malaysian leaders agreed to establish “comprehensive strategic partnerships” with China.

Xi’s visits were then followed by that of Chinese Premier Li Keqiang, who attended the East Asian Forum and China-ASEAN Summit held in Brunei, and later visited Vietnam and Thailand.

In the China-ASEAN Summit, Li further laid out China’s vision for the future of the region. Referring to his own remarks made earlier in September that “China and ASEAN have the power to create a ‘diamond decade’ in the future, as they had the capabilities to create a ‘golden decade’ in the past,” Li outlined a concrete cooperation framework to achieve this goal.

Trade between China and ASEAN countries increased from US$78.2bn in 2002 to US$400.1bn in 2012. Li told regional leaders that China’s trade with Southeast Asia could more than double to US$1 trillion by 2020.

But what makes China’s recent move unprecedented is that Beijing has gone beyond trade and commerce in its new charm offensive. Under Li’s seven-point cooperative framework, Li calls for deeper cooperation in a wide range of areas, including finance, infrastructure, cultural exchange, policy coordination, and security issues. He also proposed that China and ASEAN sign a “treaty on good-neighborliness, friendship and cooperation.”

For many, China’s newfound charm is somewhat unexpected, especially given that China has become significantly more assertive over its territorial claims over islets in the South China Sea since its new leadership assumed power. For that reason, it is quite surprising that Chinese leaders should raise initiatives on maritime and security NEWSCHINA I December 2013

Photo by xinhua

Schoolgirls wave Chinese and Vietnamese flags at a welcome ceremony for Chinese Premier Li Keqiang at the Presidential Palace in Hanoi, October 13, 2013

cooperation.

Stressing that freedom of navigation in the South China Sea has never been a problem, Premier Li offered 3 billion yuan (US$491m) to set up a China-ASEAN maritime cooperation fund.

The biggest surprise came from Li’s visit to Vietnam on the final leg of his ASEAN trip. Occupying a number of disputed islets in the South China Sea, Vietnam, along with the Philippines, has been the region’s most vocal challenger to China regarding territorial disputes. In 2012, Vietnam passed a law that claimed sovereignty over the Paracel and Spratly Islands, the two island groups at the heart of the dispute, which China condemned. The two countries also fought a naval skirmish over the islands in 1988.

But during Li’s visit, he announced that China and Vietnam were now working together to make major progress in their joint development of the mouth of the Beibu Bay (also known as the Gulf of Tonkin), the northernmost site of disputes between the NEWSCHINA I December 2013

two countries within the last year. The two sides also agreed to establish a joint working group to resolve maritime issues.

In a joint statement, the two countries have vowed to bring their “comprehensive strategic cooperative partnership” to a new level. Regarding the maritime disputes, both agreed to “actively explore transitional solutions that do not affect either side’s stance and policy.” Along with a working group on maritime disputes, two other working groups have been formed to push forward cooperation in finance and infrastructure.

Dubbed a “major breakthrough” by Chinese media, the deal is believed to aim to relieve the security concerns of the ASEAN countries over maritime disputes in the region and to boost mutual political trust.

Hu Yi Shan, former political secretary to Malaysian Prime Minister Najib Razak and a political scientist, told NewsChina that the deal, which he calls the “Hanoi Interpretation,” sends a message to ASEAN leaders that deeper cooperation is possible

even when territorial disputes persist.

‘Policy Upgrade’

For many analysts, China’s renewed charm offensive is a countermeasure against the US’s “pivot” to Asia, and indicates China’s own pivot regarding its regional and global strategy.

A major adjustment in China’s ties with ASEAN countries is a tilt toward security considerations. For much of the last two to three decades, China’s polices, both domestic and foreign, have been primarily targeted at economic growth. Regarding the ASEAN countries, China have primarily focused on trade and commerce, while downplaying the security issue.

But since the US launched its strategic rebalancing towards Asia, China’s new leadership has increasingly viewed the region with strategic consideration.

Chinese leaders have long insisted on dealing with disputes through bilateral negotiations, and have been reluctant to discuss territory in open forums.

17

cover story But as the US strengthens its military presence in the region and deepens ties with its traditional allies, it has become increasingly difficult for China to resist discussion of the issue.

Prior to the latest ASEAN summit, for example, a US senior official traveling with Secretary of State John Kerry told the media that he would be encouraging ASEAN countries to continue to work “for enhanced coherence and unity” to strengthen their position in relation to China when negotiating a code of conduct for the South China Sea. Japanese Prime Minister Shinzo Abe, who visited eight ASEAN nations earlier this year, also pledged continued Japanese cooperation with ASEAN, stressing that they shared a “common problem,” as Japan has its own territorial disputes with China over a cluster of uninhabited islets in the East China Sea, also known as the Sea of Japan.

“As the region has increasingly become an arena for strategic contests between major powers, Beijing has realized that it can no longer circumvent the issue of territorial disputes in dealing with ASEAN countries,” said Kang Lin, an expert from the National Institute for South China Sea Studies, a government think-tank.

According to Kang, China has adopted a proactive approach, though it continues to insist on solving the disputes through bilateral negotiations. By offering an olive branch to Vietnam, China has offered regional leaders a package solution to solve territorial disputes in the long term, and showed its determination to push forward regional integration with the ASEAN countries.

“China is no longer afraid to talk about the issue, and has gone on the offensive [on the maritime disputes] at the very top level,” Kang told NewsChina.

Multilateralism

Strategists argue that China’s recent diplomatic play reflects “a new kind of strategic thinking” among China’s new leadership over its position in the world as the US rebalances toward Asia.

In an article in the Financial Times on October 9, columnist Philip Stephens argued that China’s biggest strategic challenge was the US’s move from “acting as the guarantor of broadly based multilateral rules,” which has benefited China the most in recent decades.

“The US is swapping postwar multilateralism for preferential trade and investment

deals with like-minded nations, such as the proposed Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Pact (TTIP),” warned Stephens. “Without strong US backing, the multilateral order will fall into further disrepair and globalization will give way to fragmentation.”

“China, the biggest gainer from the liberal order, would be the biggest loser from its demise,” he added.

China’s recent moves in Southeast Asia appear to aim to prevent just that. With his speech entitled “APEC should play a leading role in maintaining and advancing an open world economy,” Xi Jinping called for “injecting new vitality to the multilateral trading system,” and repeatedly emphasized the importance of the spirit of “openness and inclusiveness.”

In response to the US’ efforts to push forward the TPP, a trade organization widely believed to be designed to exclude China, China has made calls to upgrade the existing free-trade zone, and to speed up negotiations over the Regional Comprehensive Economic Partnership (RCEP), an ASEAN-initiated proposal to establish a regional free-trade area, include the 10 ASEAN member countries and countries which have existing FTAs

China 4000.93

Myanmar

Vietnam

Laos

Import Export Trade volume (US$ billion)

The Philippines Thailand Cambodia Brunei

8.7%

Malaysia

5.3%

7.7%

Singapore

Indonesia

The 10 ASEAN Countries $94.8 billion Projected trade value between China and its 3 main ASEAN partners in 2020 and the year-on-year increase rate

$69.7 billion

The total trade value between China and the 10 ASEAN countries Malaysia

18

$69.3 billion

Thailand

Singapore

(January-July, 2003 to 2013)

NEWSCHINA I December 2013

with ASEAN, including China, India, Japan, South Korea, Australia and New Zealand.

According to Professor Su Hao, director of the Asia-Pacific Research Center at China Foreign Affairs University, China’s efforts to strengthen economic integration, and to seek friendship and cooperation with southeastern Asian countries is a preventative measure to be excluded from any Asia-Pacific security framework that the US may initiate.

“Without such a treaty, China could be marginalized by any US-initiated security framework,” said Su. Su’s view is echoed by that of Professor Zheng Yongnian, director of the East Asian Institute of National University of Singapore. In a commentary published in Singapore’s Lianhe Zaobao on October 15, Zheng argued that the essence of the US’s pivot to Asia is to “strengthen ties with its traditional allies to form a new alliance against China.”

In response, China has taken the strategy to develop a multilateral platform in order to prevent the formation of such an alliance.

Win-Win vs. Zero-Sum

The emphasis on inclusiveness, multilateralism and regional integration is dubbed by strategists inside China as the essence of “a

new global security strategy” of the new leadership.

According to Professor Jin Canrong, associate dean of the School of International Studies of Renmin University of China, this new strategy is aimed at dealing with two primary diplomatic challenges China is now facing: a lack of strategic trust between China and the US, and simmering tensions with neighboring countries amid territorial disputes.

As a result, China has made several regional integration proposals with neighboring countries on all sides in 2013. In his earlier visits to Central Asia in September, President Xi made a high-profile proposal to regional leaders to establish a “Silk Road economic belt” and calls for comprehensive cooperation in a wide range of fields including policy coordination, transportation development, currency exchange, commerce and cultural exchange.

On his earlier visit to India in May, Premier Li Keqiang made a similar proposal to establish an “economic belt incorporating China, India, Myanmar and Bangladesh.”

With these proposals, China is attempting to deepen economic integration with neighboring countries all along its border.

In the meantime, China is also trying to avoid direct confrontation with the US. As the US is focusing primarily on the military field and alliance-forging in its pivot towards Asia, direct competition with the US would not only force neighboring countries to choose between the US and China, but lead China to a zero-sum game in the security issue, in which it is already at a disadvantage.

In launching their charm offensive, Chinese leaders have refrained from making direct reference to the US. In promoting the RCEP, Premier Li said China is willing to “discuss exchanges and interactions with frameworks such as the TPP.” According to Professor Zheng Yongnian, while the US tries to drag Sino-US competition in the region to the field of security, China has determined to compete with the US in the field of economies.

Zheng argued that China’s strategy to focus on regional multilateralism will prove to be effective leverage against the US’s pivot to Asia, since China’s initiative will be more popular among regional countries. “While economic competition between China and the US can create a win-win situation, security competition in the region will only lead to a zero-sum game,” Zheng added.

2nd Stop – Thailand (October 11-13)

China

Hanoi Vietnam Chiang Mai

Thailand

Bangkok

October 11 On the first day of Li’s visit, the two sides inked a memorandum on the construction of railway infrastructure in Thailand and the exchange of Thai agricultural products, referred to as “rice for rail.”

1st Stop - Brunei October 9 Chinese Premier Li Keqiang attended the 16th ChinaASEAN (10+1) leaders’ meeting in the Bruneian capital of Bandar Seri Begawan. Li Keqiang put forward a 2+7 cooperation framework to deepen mutual trust between China and ASEAN. October 10 Li attended the 8th East Asia Summit and delivered a speech in Banda Seri Begawan, in which he said East Asian countries should strengthen mutual trust and maintain stability and peace in the region.

October 12 Premier Li and his Thai counterpart Yingluck Shinawatra attended the China High-speed Railway Exhibition at the Queen Sirikit National Convention Center in Bangkok. Li empasized China’s high-speed railway development.

October 13 Premier Li was accompanied by Thai Premier Yingluck Shinawatra in Chiang Mai, the Thai premier’s hometown.

3rd Stop -- Vietnam (October 13-15) October 13 Premier Li held talks with his Vietnamese counterpart Nguyen Tan Dung in Hanoi. The two countries signed an agreement to jointly develop the waters and islands of the Beibu Bay, a disputed semi-enclosed sea between China and Vietnam.

Bandar Seri Begawan

October 14 Morning Premier Li laid a wreath at the Ho Chi Minh Mausoleum.

Chinese Premier Li Keqiang made his debut at the ASEAN leaders’ meeting from October 9 to 15 and visited Brunei, Thailand and Vietnam.

October 14 afternoon Premier Li met the General Secretary of the Communist Party of Vietnam, Nguyen Phu Trong, and other senior officials, to boost bilateral relations.

Source: Xinhuanet & Customs-info

NEWSCHINA I December 2013

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cover story

New Strategic Thinking

Playing Smarter With its latest “charm offensive,� China has opted for a more nuanced form of strategic economic diplomacy to woo the rest of Asia

By Sun Xingjie

Chinese Premier Li Keqiang and his Thai counterpart Yingluck Shinawatra release a Chinese lantern in celebration of SinoThai friendship in Chiang Mai, Thailand, October 12, 2013

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NEWSCHINA I December 2013

Premier Li Keqiang’s proposed “2+7” cooperation framework between China and ASEAN Political consensuses

1. The foundation of advancing cooperation lies in deepening mutual political trust and enhancing good-neighborly friendship 2. The key to deepening cooperation is focusing on economic growth and expanding mutual benefits

W

Seven cooperation fields

Photo by xinhua

1. Actively discuss the signing of a treaty on goodneighborliness, friendship and cooperation 2. Start negotiations on upgrading the China-ASEAN Free Trade Area 3. Push forward connectivity in the region 4. Strengthen financial cooperation in this region to reduce risk 5. Steadily advance maritime cooperation 6. Strengthen security exchange and cooperation 7. Boost exchange in the fields of culture, science and technology, and environmental protection

NEWSCHINA I December 2013

ith Chinese President Xi Jinping and Premier Li Keqiang’s visits to several Association of Southeast Asia Nations (ASEAN) countries, China has taken a more proactive approach to regional cooperation. Although security issues have become more prominent in recent years amid mounting tension over maritime territorial disputes between China and its neighbors, China continues to focus on the economic aspect of its relationship with ASEAN countries.

But different from past years, Chinese leaders have adopted a more strategic perspective toward regional policy. By pushing forward regional cooperation in financial and infrastructure building, speeding up negotiations on incorporating ASEAN-centered free trade zones, and setting up a framework for maritime cooperation, Beijing’s recent economic diplomacy has gone beyond trade and commerce to aim for important strategic goals.

The closer ties between China and the ASEAN countries can be traced back to 1997, when Beijing’s refusal to depreciate the Chinese yuan was widely praised as regional countries suffered from the Asian Financial Crisis that led to depreciation of a number of regional currencies. Since then, China and ASEAN have embarked on what Chinese Premier Li Keqiang has called a “golden decade” of economic cooperation.

Recently, the US’s contemplation over reducing its strategy of quantitative easing has again caused anxiety over financial instability among countries in the region. It is no coincidence that China has called for deeper financial cooperation in the region.

During an Asia-Pacific Economic Cooperation gathering of finance ministers in Bali on September 20, China’s Financial Minister Lou Jiwei proposed that multilateral foreignexchange swap arrangements be put in place to support economies facing difficulties from “external shocks.” China has already signed currency swap agreements worth more than 1.4 trillion yuan (US$229bn) with the

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Photo by xinhua

cover story

Visiting Chinese Premier Li Keqiang (third from left) and his Vietnamese counterpart Nguyen Tan Dung witness the signing of a series of bilateral cooperation agreements in Hanoi, Vietnam, October 13, 2013

ASEAN. During his visit to Indonesia in October, President Xi Jinping announced a 100 billion yuan-rupiah currency swap between the two countries. During his trip to Thailand in the same month, Premier Li Keqiang said that China is considering setting up a yuan clearing bank in Thailand.

With China’s efforts to internationalize the yuan, China has been steadily building up the potentials for its currency to become the anchor currency in the region.

As Washington pushes forward negotiations on the Trans-Pacific Partnership (TPP), which many believe to be designed to exclude China, Chinese leaders have called for the acceleration of negotiations on Regional Comprehensive Economic Partnership (RCEP), an initiative to incorporate existing free-trade zones between ASEAN and other countries.

So far, the RCEP negotiations, which China has recommended should conclude by the end of 2015, appear to have lagged behind the TPP negotiations, which are expected to wrap up by the end of 2014. But in contrast to the US’s efforts to establish a “higher standard,” China has taken a more practical approach, focusing on solving practical problems that impede further economic

22

The Sultan of Brunei Hassanal Bolkiah (L) welcomes Premier Li Keqiang at a gala dinner for leaders attending the East Asian Summit in Bandar Seri Begawan, October 9, 2013

integration, such as infrastructure construction.

In Indonesia, President Xi suggested to set up a regional infrastructure investment bank.

In Thailand, Premier Li opened a high-speed rail exhibit, proposing a high-speed railway that would link China, Thailand and Singapore, preferably built using Chinese technologies. The emphasis on infrastructure cooperation is aimed not only at increasing China’s exports in the industry, but further facilitating region integration, which would consolidate China’s strategic importance in the region.

On the security issue, China’s most significant achievement is an accord with Vietnam on the territorial disputes in the South China Sea. The two countries have agreed to establish a joint working group to resolve disputes. With progress on security issues, the two also agreed to further cooperation on infrastructure and finance.

In recent years, Vietnam has been cultivating warmer ties both with the US and Japan, and it has participated in the TPP negotiations. But given Vietnam’s similarity to China, it remains a question how Vietnam can fit in with the TPP’s “high entry standard.”

In any case, with China being its largest part-

ner, there is no reason for Hanoi to turn its back on Beijing.

Since the end of the Vietnam War almost 40 years ago, the region has experienced no major conflicts. Although the US and Japan have tried to highlight the potential military threat posed by China’s rise, economic issues remain the primary concern of Asian countries. For example, when the US government shut down and the threat of a treasury default loomed, it was Japan, the US’s closest ally in the Pacific and China’s primary strategic rival in the region, who joined China in pressuring the US to avoid a default.

Through the visits of its top leaders, China has shown that it is determined to focus its attention on deepening regional integration with regional countries in Southeast Asia, while in the meantime, showing flexibility in dealing with existing maritime territorial issues. By doing so, China’s strategy is striving to make a larger cake and create a win-win situation for all regional countries including China itself, establishing a foundation for long-term regional security and stability. (The author is a Doctor of International Relations and a columnist for China Newsweek, the Chinese edition of NewsChina) NEWSCHINA I December 2013

society

Charitable Organizations

Something’s Gotta Give Despite their free-falling credibility, scandal-hit Chinese charities, especially those with connections to the government, are still trying to find willing donors

By Xie Ying

U

nder increasing public pressure to increase transparency, Chinese charitable organizations have this year boosted their rating on the China Charity & Donation Information Center (CCDIC). Transparency Index to 43.11 out of 100, a 33.1 percent improvement on last year.

According to the CCDIC, a non-profit organization which has for five years independently delivered annual reports on the transparency of Chinese charities, their survey of 1,000 organizations found wildly fluctuating levels of openness, with 23 mostly private foundations ranking higher than 95 on the scale, while 552 others, mostly governmentrun charitable societies, including the Red Cross Society of China, fell way below average.

The same report found a public approval rating of 20 percent for China’s charities, which, while low, is 11 percent higher than that recorded last year. “This year’s appraisal once again indicated that the public is concerned about the operations and business of charitable organizations, including where donations come from and where they go, information often absent from the public records maintained by charitable organizations,” said NEWSCHINA I December 2013

CCDIC vice director Liu Youping.

Crisis

The Chinese public paid little attention to the country’s charities until June 2011, when Guo Meimei, who claimed to be an employee of a branch company affiliated with China’s Red Cross, showed off a luxurious villa and car on her microblog account. Although the Red Cross immediately denied any direct relationship with Guo, the governmentsponsored investigation into the allegations failed to convince the public, and saw public donations to this previously well-funded organization collapse almost overnight.

This catastrophic loss of credibility, according to statistics released by the CCDIC, meant that China’s charitable organizations received only 8.4 million yuan (US$1.3m) in donations between June and August 2011, a nearly 90 percent drop on the period March to May. For the first time, the Chinese Ministry of Civil Affairs, the department in charge of the country’s charitable organizations, successively issued two official guidelines to promote the transparency of charities as well as stating that it would prioritize an all-round supervision system in its 12th Five-year Plan (2011-2015).

“The Guo Meimei case has proven that public trust is too valuable to be ignored.

People will immediately abandon any organization which they believe has cheated them,” Liu Youping told NewsChina. “The earlier a charitable organization values information release, the more public trust it will enjoy.”

Struggle

As the main target of the Guo Meimei scandal, the Red Cross was the first charity to face an effective boycott. According to a report

by Insight China magazine, the Red Cross received only 140,000 yuan (US$22,000) on April 20, 2013, the first day that Lushan, a county in Sichuan Province, was hit by a magnitude-7 earthquake. By contrast, the One Foundation, a well-known private charity founded by movie star Jet Li, received 22.4 million yuan (US$3.5m) in donations in the same period of time, 159 times more than that received by the Red Cross, formerly China’s leading disaster relief charity.

A county-level branch of the Red Cross told media that they received only several hundred yuan during the Lushan earthquake. Following the disastrous Wenchuan earthquake in 2008, the same branch received 180,000 yuan (US$29,000) in dona-

23

society

tions.

On July 30, 2011, just one month after the Guo Meimei scandal, the Red Cross launched an information release platform on its website and publicized details of public donations received during another earthquake, which hit Yushu, Qinghai Province in 2010. The public were not impressed with the platform’s perceived lack of detail. “We want to know the details of every penny we have donated, not just a few vague numbers,” claimed a post on baidu.com, China’s largest online forum.

Two years later, and the Red Cross online platform is still under testing, with information pertaining to donations received after the Zhouqu landslides in Gansu Province (2010), the Yingjiang earthquake in Yunnan Province (2011) and the Fukushima disaster in Japan (2012) remaining inaccessible.

This May, the Chinese Red Cross found itself once again under fire after a microblogger revealed that he could not find any information on the organization’s public platform relating to a 100,000-yuan (US$16,400) donation given by a 100-year-old man from Shenyang, capital of Liaoning Province, which was widely covered in the media.

“A district-level branch would transfer donations to a city-level branch at regular intervals and record a net figure only, so details of individual donations are not publicized,” Su Lu, vice-director of the Red Cross Shenyang branch, told the Beijing News, in a statement which critics saw as an attempt to fudge the issue.

“Given the down-top structure of the Red Cross, under which only the headquarters has the right to utilize donations, it is actually impossible to track down individual donations unless we have a nationwide platform to release information covering every local charitable organization,” he continued.

Moves to create such a platform were actually initiated by the China Charity Federation, another government-backed charitable organization. “Despite growing concerns over transparency within the industry, [creating] this platform bristles with difficulty in [securing] both funding and talent,” Peng Jianmei, chief architect behind the platform, told NewsChina. “Without professional management of the inner structure, and suf-

24

ficient information [about a charitable organization], we cannot offer a comprehensive release,” she added.

In early 2013, this long-awaited platform finally began to take shape in Jiangsu Province and the provincial capitals of Henan and Hunan, with over 1,000 local charitable organizations joining. The released balance sheets, however, were no more detailed than previous releases.

Fees

All these factors explain why the CCDIC’s annual transparency report has for two successive years warned of a widening gap between transparency in charitable organizations and the perceived public demand for information.

At the end of 2009, the One Foundation published its customary fiscal report, a report much more detailed than those released by other Chinese charitable organizations. However, the foundation found itself heavily criticized for “overspending” on two major online campaigns, as well as on administration in Q3. The controversy did not die down until the One Foundation attached detailed explanations of the expenditures.

As Chinese charitable organizations are essentially wings of the government, the public are particularly sensitive about how they spend their money – particularly on “administration fees” which critics equate with unnecessary bureaucracy. Although national regulations on charitable organizations state that such fees should never exceed 10 percent of total expenditure, this is rarely adhered to, and the popular view is that almost all administration fees listed on charities’ books are simply converted into profit for their directors.

In March 2010, renowned Chinese philanthropist Cao Dewang drew public attention to unpopular administration fees once more by refusing to give a pledged 200 million yuan (US$31.7m) donation to the China Foundation for Poverty Alleviation (CFPA) until the latter agreed to reduce the deducted administration fee to 3.5 percent of the donation.

Following the Guo Meimei scandal, a policy abolishing administration fees was championed by private foundations funded by the rich or celebrities. For example, the philan-

thropists behind the Beijing-based Ai You Foundation pledged to operate the foundation at the expense of the board of directors.

Shanghai’s Adream Foundation, meanwhile, invested in various projects to cover its management fee.

When 100 percent of a charity’s revenue is spent on its work, this is seen as minimizing the risk of corruption, a problem endemic throughout the official charity network.

However, this approach is not without its detractors.

“It is a game for the rich,” Liang Shuxin, the founder of the private Micro-Foundation, told China Fortune magazine. “How can small charities survive on zero revenue?”

“This model will mislead the public into thinking that charitable organizations can operate with minimal expenditure, which is not conducive to their long-term development,” he added.

“A 10 percent administration fee is actually much lower than the international level (1520 percent),” said Wang Zhenyao, director of NEWSCHINA I December 2013

Photo by CFP

Pedestrians turn a blind eye to a Red Cross donation box, Shenzhen, April 21, 2013

China Philanthropy Research Institute under Beijing Normal University, in an interview with Oriental Morning. “The way to enhance credibility is to reform the information release and supervision system.”

Deadlock

However, as scandals concerning the misuse and misappropriation of donations continue to be exposed by the media, the fight to regain public trust has continues to favor the rumor mill. Only recently, members of Shanghai’s Red Cross Society were exposed blowing donation money on a luxurious dinner, while the China Charity Federation was exposed to having allegedly sold off donated solar cells for profit. Talk of reform increasingly seems like so much hot air. As a result, requests for public donations are commonly met with scorn, aggression and even foul language, particularly when solicited online.

Shi Xiaoli, who attempted to establish a rescue home for stray cats and dogs, has experienced first-hand the difficulties in satisfying NEWSCHINA I December 2013

potential donors that her operation is both legitimate and uncorrupt.

“Our project was warmly welcomed, but also put under heavy pressure to satisfy donors,” she told NewsChina, adding that much of her budget had to be allocated to the itemization of every expenditure and the publication of detailed financial reports, down to the total cost of the animals’ feed.

“In order to avoid any controversy, we couldn’t incur any expense if we couldn’t get a receipt,” she continued. “In the end, we couldn’t pay trained personnel or equip our operation. That was my first and last time organizing an online donation drive.”

Strictly speaking, Chinese laws do not allow any individual or organization to collect public donations without government approval. During the Wenchuan earthquake, countless ad hoc fundraising projects were shut down, popular blogger Luo Yonghao’s website, despite having received thousands of yuan in pledges from the public.

Charities across China, regardless of size,

have found themselves in a Catch-22. Big government-sponsored organizations have lost public trust, while small-scale operations struggling to acquire funding and personnel are pursued and shut down by cautious State officials.

While in much of the rest of the world charities are regulated – but not controlled – by governments and NGO watchdogs, in China, the government presence makes it difficult for charitable organizations to shake the negative image associated with other arms of government.

As early as 2006, the State Council put legislation relating to charitable organizations on its official agenda, pledging to standardize the registration, operation and public accountability of charitable organizations while improving supervision. However, critics claim that myriad special interests, competition between conflicting departments and an overall lack of political will effectively guarantees that charities in China will continue to fruitlessly cry for help.

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New Campus

One Island, Two Systems The central government has allowed the University of Macau to build a new campus on mainland territory, but placed it under Macanese jurisdiction

By Yuan Ye

Breathing Space

A 15-minute bus ride from the old UM campus on Taipa Island, passing a few blocks and through a 1.5 kilometer tunnel, is all it

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Photo by IC

“

The assembly hall in the new campus of the University of Macau

Photo by IC

Crossing the wall of the University of Macau is an act of illegal migration.”

This stark warning, written on a banner at the new campus of the University of Macau (UM), annexed on a nearby small island administered by the Chinese mainland, comes courtesy of the mainland border defense authority. Since July, border police have thwarted a number of attempted illegal crossings over UM’s perimeter wall into its campus.

The new UM campus is located on Hengqin, an island three times the size of Macau itself. The island is to the west of Taipa Island in southern Macau, and falls under the jurisdiction of the mainland city of Zhuhai, Guangdong Province. On July 20, the new campus opened after three years of construction. Since then, Hengqin has been divided into two very different areas: that within the UM campus, governed by the comparatively relaxed laws of Macau, and that outside UM, administered by the Chinese mainland.

An agreement between Macau and China’s central government extended the policy of “one country, two systems” – the model that permits Hong Kong and Macau to operate their own independent legal and political systems – to Hengqin, thereby rebranding it as “Hengqin New District.” Many are curious about the legal freedoms that have, on paper, been granted to campus.

The University of Macau’s fortified “border fence”

takes to reach the Hengqin annex. The new campus is an impressive construction – sprawling across 109 hectares, it is 20 times the size of its counterpart, and its classrooms feature stylish “east-meets-west” decoration. Its exterior wall, by contrast, is far more prosaic: the moat and two-meter high barbed wire fence are less than welcoming. Besides the warning signs on the banners, the Frontier Defense Authority of Zhuhai has set up fixed sentries and dispatched patrols.

On January 10, 2009, China’s then Vice President Xi Jinping announced during a visit

to Macau that the central government had decided to develop the relatively backward agricultural island of Hengqin to create new space for the diversified economic development of Macau, a very small yet dynamic former Portugese colony.

UM was quick to register its interest in Hengqin – its old campus, roughly the size of a football field, was far too small to accommodate its 9,000 faculty members and students.

Space was at such a premium that scientific experiments often had to be conducted in dorms, and contrary to Chinese university norms, most students rented housing offcampus. With mainland students enrolling in droves, the school was desperately in need of more space.

Though UM’s ambition of becoming a global first-rate institution was being hampered by its lack of space, it had been impossible for the Macau government to spare any more of the territory’s total 20 square kilometers for the university. UM decided to turn to its mainland neighbor, Zhuhai, for help.

In 2007, the then Chief Executive of the Macau SAR Edmund Ho Hau-wah advised that it was possible to look to Hengqin Island for development, but that the idea needed more thought. “Many things need to be considered, including academic freedom and freedom of speech. Border crossing would also be a problem. It would be impossible for students to cross the border to get to the new campus and back every day,” says Qiu Guoping, associate professor of the School of Government and Public Administration at UM. NEWSCHINA I December 2013

Xi Jinping’s 2009 Macau visit and the idea of diversified economic development were good news for UM. In April 2009, Macau submitted a request to the central government for the construction of the new campus, with the caveat that it remain under the jurisdiction of the Macau government.

Two months later, the National People’s Congress approved the proposal. The Macau government took a lease on the land for 40 years (to December 19, 2049) and paid PTC$1.2 billion (US$146m) in rent.

Concerns

On September 16 this year, UM’s fall semester began, with some 1,600 students relocated to the new campus.

If students and faculty members on Hengqin want to enter or leave the campus, they must first return to Macau and pass through customs in order to reach the mainland. But while immigration control is a mild annoyance, a greater concern is whether the University of Macau will retain its academic freedom now that the new campus is on an island under mainland control.

In May 2010, more than six months into the construction of the new campus, a magazine published by the UM’s Department of Communication ran an article, written by a student, complaining that the new construction had begun without any attempt to gain the approval of the student body, and expressed concern that academic freedom could be affected. That year also saw teachers protesttheir relocation. But a subsequent poll showed that those against the move were in the minority, and the demonstration ultimately failed to effect any change.

On the mainland, academics are divided over the use of the “one country, two systems” model in administering the new UM campus on Hengqin Island. Law professor Guo Tianwu of Sun Yat-sen University in Guangzhou argued that Macau law permits certain things that are illegal on the mainland, and that there should be some distinctions between Hengqin and Macau, despite the support of the central government. Guo suggested that the University of Macau should ban demonstrations inside the Hengqin annex, contending that they would affect the residents of Zhuhai.

NEWSCHINA I December 2013

After the new campus was formally handed over to the Macau authorities – by far the largest piece of land the mainland has ever actively given over to an administration with a different political and legal system – controversies were largely dispelled.

“Given Macau’s legal system, problems will be tackled naturally. There is no need for consultation and negotiation,” says Zhao Wei, principal of the University of Macau.

What drew more attention from the mainland’s netizens is that the Internet access and telecommunications are based on Macau’s network, so that the Internet in Hengqin Campus is not limited by the mainland’s notorious firewalls. Students can browse sites such as Twitter, YouTube and Facebook, all of which are blocked on the other side of the perimeter fence.

Currently, the Hengqin New District authorities are appealing for support from the Ministry of Industry and Information Technology and the State Internet Information Office to open special Internet channels for the island. If approved, the Internet across Hengqin Island will not be subject to mainland censorship.

Hengqin Model

Alongside the potential difficulties brought about by the different legal systems, however, the University of Macau also gained some questionable “mainland advantages” during the construction.

The land where the new campus lies was first developed in the 1990s, and at the time the new campus deal was struck, most of it was under lease – a total of 47 shop owners, 200 farm-produce growers and 200 households engaged in tiny stall-based vending business were in operation on the proposed campus site, as well as a famous “barbeque street.” Whereas in Macau, forced evictions are incredibly difficult for the authorities to orchestrate, land grabs are simply business as usual for the mainland authorities.

According to the Party committee of the Hengqin New District, compensation paid to these people or households amounted to 3.3 billion yuan (US$52.4m). The Hengqin Administration Committee acquired a special fund from the National Development Bank,

and after only three months, the land had been reclaimed from its tenants. “This would be impossible in Macau,” said law Professor Luo Jianwei of the University of Macau.

Besides paying the rent for the 40-year lease, the Macau government invested another PTC$9.8 billion (US$1.2bn) in developing the new campus’ construction area of 940,000 square meters and establishing infrastructure such as power, water, and gas systems, communications, customs, police stations and residences.

With the construction of the new campus, capital began to flow into Hengqin. In the first half of 2013, Hengqin was negotiating with 33 Fortune Global 500 companies and 19 China Fortune 500 companies about setting up operations there. Fifty-six major projects have been so far initiated, with the total investment reaching 226.3 billion yuan (US$36 bn).

Housing prices serve as an important indicator for the attractiveness of the Hengqin New District. The first residential project opened in August 2013, and the price of new apartments there doubled those in Zhuhai. Secondhand house prices have also quadrupled since the project was first agreed upon three years ago. While Macau residents only used to visit Hengqin for its famous oysters, they now go as potential house buyers. Currently, Macau residents make up 40 per cent of real-estate buyers in the Hengqin New District.

“What Hengqin means most to Macau is land,” said Qiu Guoping. Apart from the 1.09 square kilometer campus, Macau and the province of Guangdong jointly plan to build a 5-square-kilometer multi-industry business park, and have so far caught the attention of the Chinese pharmaceutical industry – several companies are already operating in the park.

However, some academics are less optimistic about the fusion of Zhuhai and Macau. Associate Professor Tan Zhiqiang of the School of Arts and Humanities, Macau University of Science, argues that no matter how much the two sides reach out to each other, it will always be over a wall: “The two areas will cooperate in tourism and real estate, but this cooperation will be limited. There will never be complete integration. At the end of the day, there is still a border,” said Tan.

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society

Web Literature

Flight of Fantasy The weird and wonderful world of Chinese web fiction has captured the imaginations of more than 100 million readers

By Sun Zhe

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NEWSCHINA I December 2013

Courtesy of Zongheng.com

A selection of online fantasy novel cover art

C

hina’s “online novelists” are adept at spinning out long, tall tales. But then again, since their works sell online for roughly three yuan cents (0.5 US cents) per 1,000 characters (roughly equivalent to 650 English words) – or 30 yuan (US$4.9) for one million characters – they have an incentive to keep their stories running for as many chapters as possible.

Updated chapter-by-chapter on a daily basis, a piece of online fiction usually clocks in at two or three million characters (around 1.3 to 2 million English words). 5-millioncharacter epics are not rare, and the record stands at 12 million, or 10 times as long as the Chinese translation of Leo Tolstoy’s War and Peace.

NEWSCHINA I December 2013

Fantasy, time-travel and historical novels are the most popular genres in the world of online fiction, with fantasies accounting for about 70 percent of the total output, according to Liang Yu, deputy general manager of Zongheng, one of the top literature websites in China.

Surreal

The storylines of most online fantasies are rooted in the Chinese literary tradition of martial arts fiction, though web-based fantasies, usually not set in the real world, tend to outdo their classical kung-fu novel counterparts in terms of sheer surrealism, according to Liang.

“If a martial arts hero could kill 100 men

with a single strike, the protagonist of a work of fantasy fiction will take out 10,000,” Liang said.

Chinese martial arts novels usually follow a well-trodden narrative arc – a young boy, pursued by villains who have killed his parents, finds himself lost and alone in the wilderness. Helpless, he either discovers a magical kung-fu tome, or encounters a reclusive grandmaster. Either way, the boy inevitably becomes a world-class martial artist, and comes out of hiding years later to face his enemies.

Romance is also a must in both martial arts novels and online fantasies. A number of beautiful women fall for the hero, and happily join his harem.

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While online fantasy writing often borrows heavily from the kung-fu novel canon, many martial arts novelists are highly supportive of web authors and their remarkable talent for dreaming up farfetched yet captivating storylines.

For instance, while seeking revenge for the execution of his family at the hands of the Qin Emperor in the 2nd century BC, the protagonist of a recent popular work of web fiction happens upon the late German mathematician and physicist Carl Friedrich Gauss (1777–1855) in a fictional time and place.

Gauss teaches the young man everything he knows, and the young fellow, apparently a rare natural science talent, progresses so fast that after a few weeks, Gauss finds himself unable to teach his Chinese student anything new.

The boy uses science to hone his fighting skills, and after acquiring magical powers and other essential skills along the way, is eventually crowned King of the Universe – an unthinkable achievement for the comparatively humble heroes of traditional martial art novels.

“Most [web] fantasies end this way,” said Liang. “There is no higher position than King of the Universe, so they have to end there.”

It is vital for fantasy writers to enable their readers to identify with their characters, said Wang Zhaoyang, a 31-year-old web author from Zhengzhou, Henan Province.

“Just imagine how cool it would be to be invincible, and to enjoy a harem like an emperor.”

Wang, who works as chief editor on an auto industry website by day, has been writing ghost stories, thrillers and mysteries for

30

more than four years in his spare time. Ghost stories are a niche category in the web fiction arena, and are far more difficult to write than fantasies, according to Wang.

“Fantasy writers can follow a pattern,” said Wang, “but you always need new tricks to scare people, and a frightening plot does not work a second time.”

“Fantasy authors usually don’t dare turn to mystery writing, because it is much more challenging.”

Smooth Sailing

China’s web fiction readers now total about 150 million, according to industry consultancy iResearch, and the majority are young and poorly educated with low incomes, said Zhang Chong, a data analyst with top literature portal 17k.com.

“The structure of the readership has determined that web fiction has little to do with serious reading,” said Zhang.

Those who read web fiction tend to admit that they are attracted by the genre’s relatively mindless content.

Chen Yuxuan, a 25-year-old salesman from Beijing, said he relies on computer games and fantasy novels to fill the gaps between working days.

“The beauty of reading fantasies is that they can give you a high, and you can totally switch off your brain,” said Chen. “You do not need to think as much as you do when you read serious literature.”

The plots of web novels are tailored to deliver this “high.” The protagonist usually starts out as a nobody, not unlike the readers themselves, but always ends up with glory, wealth, power and the love of many women, usually through sheer luck and only a little

effort. His fortunes play out with relative ease.

“Readers might forgive a small setback,” said Li Guoshu, a 30-year-old engineer from Shanxi who has been reading web literature since his college years. “Most readers might cancel their subscriptions if the writer should dare to put the protagonist through hardship for three [real-time] days in a row. People retreat to fantasies in their downtime – they’ve had enough setbacks in reality,” said Li. Zhu Ling, a 23-year-old nurse and parttime web author from Hangzhou, agrees with Li. Zhu, whose urban romance novels are posted on readnovel.com, would never dream of drawing her hero and heroine into a blazing row, as this could be just as big of a risk as killing off the main character.

Zhu stays in constant communication with her readership in the comments sections of her online posts, or via instant messenger group chats with her fans. Her stories usually develop according to the whims of her readers.

It takes Zhu three to four hours to write 6,000 to 7,000 characters, a rate that can earn her 10,000 yuan (US$1,630) per month, roughly equivalent to a white-collar salary in Beijing.

But Zhu is among the few who can hope to make a living from online fiction – it has been estimated that less than 5 percent of web writers earn 3,000 yuan (US$490) per month or above. And while they make a living trying to sell easy stories, their own lives are far from trouble-free. Even the most established authors, or “big deities” as they are known among readers and their peers, have it tough.

“Big deities” simply do not have their own

NEWSCHINA I December 2013

lives, according to Liang, Zongheng’s manager.

“They swing between sleeping and writing,” said Liang. “They get up in the afternoon and write until the middle of the night, and so on.”

Those who dare let their fans down by not updating for a day or two risk losing a big chunk of their readership.

There is nothing easier than to start writing online fiction. One merely need register for free with a literature portal and begin posting works.

But although there are more than 130,000 writers posting their fiction on Zongheng, editors screen out roughly seven out of every 10. Those who make the cut get signed up.

Only signed writers, who currently number around 40,000, have a chance of being paid minimum wage, and of those 40,000, only around 15 will eventually become “big deities” with a chance of genuine financial success.

Zongheng churns out 10 million characters per day, about the length of 20 traditional novels, but more than 30 percent of them are never read, according to Liang.

A great number of web writers quit writing even before their very first work is finished, because few or no people read it. Writers have access to real-time data on reader numbers, which, for some, can make depressing reading.

Each of the top literature portals has a backlog of what are known as “eunuch novels,” stories that are left unfinished due to poor market performance.

Slim Chance

Each of Zongheng’s editors manages 400

NEWSCHINA I December 2013

writers. Unlike editors with traditional publishing houses, who give writers advice and revise their manuscripts, web fiction editors are mainly responsible for promoting writers and scouting new talent.

Editors distribute promotional resources, namely prominent positions on the portal’s homepage, to the most marketable authors on their roster.

“This sort of promotion is critical for small-time writers to survive on the portal,” said Tian Ziyu, an 18-year-old college freshman from Tianjin who has just started writting his first fantasy novel on Zongheng.

Tian dreams of one day becoming a “deity.”

He said he would lend a hand to promote small-time writers if he ever makes it, because he understands how vital the endorsement from an established author could be for him right now.

He needs to update at least 3,000 characters on average per day to earn the site’s minimum wage of 300 yuan (US$49) a month.

Until a certain number of readers have subscribed to his feed, his work will be available free of charge. After that, he can expect his income to grow, since he will be entitled to a portion of the revenue.

Tian’s idol is Zhang Wei, one of the biggest “deities,” who has made more than 33 million yuan (US$5.4m) over the past five years, the highest income in the web fiction circle.

32-year-old Zhang is seen as a legend by small-time writers and his readership. He was a nobody when he quit a dead-end job and started writing his first fantasy novel nine years ago.

After a bumpy start with two unpopular fantasies, Zhang gathered a large group of fans and established himself as a big name.

He reportedly continues to write 10,000 characters per day all year round, and has never missed a single daily update over the nine years since he began writing in 2004.

In an interview with Life Week magazine, Zhang declared that his principles as a writer were “never to touch politics, negativity or pornography.”

“The best part of writing a fantasy novel is that it is never related to current politics, and I never hint at social realities with my fiction,” Zhang told the magazine.

Most of his online original works have been published on paper, and he was the first web fiction writer to be accepted into the China Writers’ Association, an official organization that pays a salary to its membership.

But most other web writers have had no such luck. While any old yarn can be posted online, breaking into print is tough.

For instance, one popular novel, Stunning Evil, a dark journey through China’s underground gambling and criminal syndicates, was under review by publishers for several years, but was never greenlit for publication, even though the book had made its author millions of yuan from online subscriptions.

“Other fictions that could not possibly published in the real world including those about corrupt officials and their mistresses, and infighting in China’s bureaucracy,” said Wang Zhaoyang, the ghost story writer.

Wang himself has had four of his books suspended from publishing as regulations tightened this year. He said that all web writers dream of having their novels published.

But perhaps Wang’s greatest feats are still to come, for as all good web fiction writers know – things always can, and usually do, get better.

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society

High School Homicide

Underdog Killer How a dispute over a cellphone led a high school senior to murder his teacher

By Su Xiaoming in Jiangxi

I

n the noon of September 14, Sun Wukang, a 32-year-old high school teacher, was found dead in his office, his carotid artery severed in a vicious knife attack.

The murder suspect, Lei Ming (alias), was a 16-year-old senior in Sun’s class, Class 30, at the No 2 Senior High School of Linchuan, one of the most elite schools in Jiangxi Province, where more than 70 students are packed into each classroom, where they are hot-housed for three years in preparation for the all-important national college entrance examinations. The aisles in the classrooms are so narrow that barely a single student can squeeze between the tightly-packed rows of desks.

Crammer School

Lei’s school, the No 2 Senior High School of Linchuan, ensures top marks through an intensive “crammer” timetable and rigorous, discipline. Seniors are permitted only one half-day off every Sunday afternoon, and spend every other day confined to classrooms from 7 AM to 10 PM, with only short breaks in between classes.

One of China’s so-called “college entrance exam factories,” the No 2 Senior High School of Linchuan churns out batch after batch of university recruits who are painstakingly sifted into ever more specialized academic units from the moment they arrive. Only the top students are admitted into the top-tier classes, which groom youngsters for entry into the prestigious Peking and Tsinghua universities in Beijing. Others have to make do with second- and third-tier provincial universities.

In competition with other schools for the best junior high graduates, the No 2 Senior High offers to pay tens of thousands of yuan to those families that promise to enroll their academically gifted children.

Further resources are allocated depending on how many top students go on to secure places at leading universities. Yet more revenue comes from “fees,” essentially bribes, paid by parents keen to get their less-gifted children into this prodigy factory. This can cost families anything from a few thousand to 24,000 yuan (US$3,900), depending on their child’s junior high test scores.

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Police on duty outside the school where the murder took place, Linchuan, Jiangxi Province, September 16

New arrivals are sorted into their relevant classes then graded nonstop for three years through a barrage of tests and examinations, with their performance and grades evaluated and posted publicly.

College enrollment quotas are imposed upon each class, in effect meaning the individual teachers’ prospects hinge on securing college places for a set number of students. Everything, from teachers’ salaries NEWSCHINA I December 2013

Photo by CFP

to class sizes, rely on meeting these quotas.

In terms of its narrow targets, the school’s system works. Of 150 students from Jiangxi Province admitted to Tsinghua and Peking universities in 2012, 12 graduated from the Linchuan No 2 Senior High School.

However, with their income and reputation at stake, faculty, especially the staff in charge of class management, are under no less pressure than their students. Sun was feeling the heat, as his own class was not meeting the expectations of the school’s leaders.

Lei’s parents paid 6,900 yuan (US$1,130) to secure admission for their son, who was six points below the requirement. He duly placed in Class 30 along with 70 other students occupying 72 desks – Lei was allocated two desks at the back of the classroom. At the time of the murder, Sun Wukang had taught Class 30 for just over one semester.

The first ever postgraduate from his home village, Sun had taught chemistry at the No 2 Senior High School since 2008 after graduating from Jiangxi Normal University. Born in an impoverished village in the mountains near Linchuan, Sun himself was held up as an example to the school’s students from humble backgrounds, and was officially commended by the school as an “outstanding teacher.”

Sun managed his class through strict discipline, and was quick to rebuke those he deemed lazy or impertinent, and regularly making an example of those who dared to play with their cell phones in class. Students slacked off were given stern warnings that if they failed to gain a place at a decent college, their best hope would be migrant work in a nearby city.

Heavyset, 5.4-foot Lei was reportedly a quiet, easygoing classmate, though he tended toward indolence and showed little interest in lessons. His personality clashed with that of his diligent and inflexible teacher.

After being seated in the third row because of his short stature, Lei asked to move to the back row of the classroom. One of his close friends told reporters this was because he wanted to nap without being disturbed by the teachers’ “lecturing.”

Once he was in the back row, classmates said, Lei busied himself with his beloved online games. He was an overnight fixture in the local cyber café, and was often late for school, if he showed up at all. He gained a reputation for either sleeping or gaming his way through all his classes.

While his grades slumped, however, Lei was popular with his classmates, and even performed a comedy sketch at the school’s Chinese New Year’s party in 2012, which, according to his sister, brought the house down. She recalled to reporters that her brother had spent a long time rehearsing his routine at home prior to his performance.

However, at Linchuan No 2 Junior High, only grades mattered, and NEWSCHINA I December 2013

soon Lei’s friendship circles shrank as the academic pressure piled on and they got their noses to the grindstone.

“I’m tired of school life. Every day is just a repetition of the day before,” Lei wrote on his microblog.

Isolation

At this time, according to friends and classmates, Lei fell in love with the Fox series Prison Break, and began to model himself on the lead character, even copying his hairstyle and dress. He sought solace in a reduced circle of fellow online gamers, and most faculty turned a blind eye to the cyber cafés springing up on the back row so long as the students involved weren’t being disruptive. Sun, however, Lei’s class supervisor, wouldn’t tolerate students who weren’t willing to fall in line.

An altercation over Lei using a cell phone to allegedly cheat on a test led to his handset being confiscated. Lei then threatened to beat his teacher with a stool unless the cell phone was returned, and Sun backed down.

These conflicts slowly escalated, until finally, the day before Sun’s murder, Lei was rebuked once again for using his cell phone in class.

Lei refused to allow Sun to confiscate his handset, and Sun retaliated by moving Lei’s desk into the corridor outside the classroom. When a classmate eventually talked Lei into giving in to Sun, Sun refused to confiscate the cell phone, instead ordering Lei to “crush it on the ground.” Lei refused, and another fight ensued which resulted in Lei walking out of school.

Sun telephoned Lei’s migrant-worker parents on the afternoon of September 13 to inform them about the incident and his decision to expel Lei. The student’s father then ordered his son to travel to Fuzhou, Fujian Province, where both his parents worked, to explain himself.

A classmate who visited Lei at his home on the night of September 13 later told investigators that Lei had a knife beside his pillow. The classmate advised Lei to apologize to Sun and write a repentance letter.

Lei agreed and confessed that he did not want to drop out of school and go to Fuzhou. According to Lei’s sister, their parents had forced her brother to promise to finish senior high before learning a trade. She told investigators that Lei later called at the school’s office to apologize to Sun, only to be rebuffed and told he needed to formally submit an application to quit school.

Surveillance video taken on day of the murder shows Lei wandering outside Sun’s office for several minutes before finally entering. Sun’s body was found shortly afterward.

That same evening, Lei called his sister in Shanghai to ask what sentence he might get for killing his teacher. Horrified, she urged him to turn himself in to the police, which he duly did.

“My father did not finish high school and my mother barely finished junior high,” Lei Fang (alias), Lei’s sister, also a former graduate of the school, later told the media. “My parents hoped my brother and I would go to college.”

The murder has shocked families in Linchuan and nationwide, and while Lei remains in custody awaiting trial, some are asking if academic achievement, long held up as the zero-sum life goal in Chinese society, is worth dying, or indeed, killing for.

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society

Yang Bin

Caring for Criminals Procurator Yang Bin’s efforts to inject a little compassion into China’s rigid legal system have met with success, and suspicion

By Chen Wei in Guangzhou

C

Photo by ma qiang

hina’s courtrooms haunted her – eventually, she have little time for came to a realization that was to empathy and underdefine her career: Criminals also standing. The justice system deserve to be treated humanely. tends to operate swiftly and dispassionately – evidence is Mercy Project analyzed, judgment is passed, In 1970, Yang was born into and those found guilty are dealt a working class family in Xiangwith severely. Yang Bin, an offitan, in central China’s Hunan cer with China’s procuratorate, Province. After graduating from subscribed to this very system, Chongqing University, she until a chance encounter at a worked as a secretary for a lobus stop. cal State-owned enterprise, beOne day, several years ago, fore moving to Guangzhou in Yang was waiting for the bus the south, in search of better job home from work, when she noprospects. In 1992, she found ticed an old man standing outside work at a local procuratorate in the courthouse holding a small Guangzhou despite having no child. As a police car pulled away background in the legal field, from the courthouse, the old man becoming the first college gradupatted the sleeping child to wake ate ever to work there. She threw him. Yang later discovered that a herself head-first into the study of Yang Bin, an officer with the Guangzhou procuratorate, believes that criminals deserve to be treated more handcuffed man in the back of law, and quickly caught up with humanely the police car, a murder suspect, her colleagues, and at the age of was the child’s father. The old 28 began to handle criminal cases. man, the child’s grandfather, had been trying to wake the boy up, afraid Several years later, she was promoted to a position with the Guangzhou it may have been his last chance to see his father, who he had never met.

Municipal People’s Procuratorate. In her first six months in the job, she Tears in her eyes, Yang found herself hoping that the man would not approved four death sentences. be sentenced to death.

At that time, China’s legal system was very clear in its view of offenders To her relief, he was later granted reprieve. But the scene nevertheless – the justice system was diametrically opposed to offenders, and existed

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NEWSCHINA I December 2013

solely to punish wrongdoing. This was the context in which Yang went about her work.

In March, 2013, Yang visited a rural family in Hainan Province. Both grandparents were in their 70s, the parents were in their 40s, and the family’s young son was working as a migrant laborer. Five years previously, the boy’s elder brother had been killed in a fight with a group of his fellow workers, and the case had been assigned to Yang.

Yang had long wanted to see the family, but her work kept her so busy that it had taken five years for the opportunity to arise. When she arrived, the scene was more miserable than she had expected – the family lived in a shabby house, with firewood scattered about the floor and an odor of pig feces in the air. Since the son’s death, the family had accrued debts of over 30,000 yuan (US$4,917), and although the court had ruled that the victim’s family should receive 370,000 yuan (US$60,700) in compensation, the killer’s family was also poverty-stricken, and no money was ever received.

Upon her return from Hainan, Yang began to formulate a plan to help the poor family, and eventually decided to solicit financial assistance on Weibo, China’s Twitter equivalent. On June 16, she posted a microblog entry about the idea, which grew into a formal aid project – Tianxiang Care Program, the first of its kind in China.

Yang’s organization was named after her father, who kicked off the donations with a 5,000 yuan (US$820) donation – the family in Hainan were the first recipients.

“By providing humanitarian assistance to those on both sides of a criminal case, the project aims to promote understanding and forgiveness between defendants and plaintiffs, in order to reduce hatred and heal the psychological trauma,” Yang said.

By the end of July 2013, Tianxiang Care Program had received a total of 45,500 yuan (US$7,500) in donations, with the majority coming from her friends and Weibo followers. Within three months, six families had received financial aid. Yang hopes that the project can develop into a support network bringing together the families of victims in criminal cases.

“We need more understanding, mercy and redemption,” she said.

Abuse of Power?

On July 20, 2005, in Guangzhou, a mother drowned her own 9-month-old daughter. Yang Bin, prosecutor for the case, was outraged by the woman’s crime, and was planning to denounce the mother, Zhou Moying, in court. But when a totally debilitated Zhou entered the courtroom, clinging to the wall and murmuring “Give me a death sentence,” Yang was thrown off-guard.

After several rounds of proceedings, Yang began to pity the woman, and later went to visit her family in Jiangxi Province. When she saw Zhou’s destitute husband and her neglected children, she began to empathize with Zhou, who had clearly been forced to take care of the whole family single-handedly. The drowned child, the smallest of the children, was very weak and had become seriously ill. Unable to afford treatment

NEWSCHINA I December 2013

in a hospital, and after several unsuccessful attempts at treatment in a local clinic, Zhou threw the baby into a river. She then tried to kill herself, but failed.

Likely thanks to Yang’s plea for leniency, Zhou was sentenced to a comparatively merciful six years in prison. Yang said in the prosecution statement that it was a success of the law that Zhou should stand trial, but that the social problems behind the tragedy could not be overlooked.

She added that the lack of social assistance was partially to blame, and that Zhou was also in a sense a victim.

In China, where prosecution statements and the State media tend to paint even the pettiest of thieves as heinous criminal masterminds, the statement’s sympathetic wording was a shock to the system, and shot to fame within the judiciary.

Yang said that she was trying to bring humanity to the practice of law in China.

When Zhou was in prison, Yang brought Zhou’s children – a boy and a girl – on several sightseeing trips to Guangzhou. “I hope the fate of the two children will be better,” said Yang. “I am confident they will not follow the same path as their mother.”

When Zhou was released from prison, she went to visit Yang to express her thanks in person, and Yang accompanied Zhou to the river to mourn the drowned child. Later, Yang helped the family with their successful application for an affordable apartment in Nanchang City, Jiangxi Province, and sent the two children to school there.

“We are as close as sisters, which neither of us could ever have imagined before,” said Yang.

After the case received broad coverage in the domestic media, Yang became famous, and began to be recognized in the street. She received letters of praise from people in Hong Kong and Japan, and once, when she complained on Weibo that public transport was too crowded, a follower even offered her a car.

However, no good deed goes unpunished, and Yang’s “special treatment” for a criminal resulted in widespread suspicion. Yang was accused of overstepping the boundaries of her duty, and there were accusations of abuse of power – China’s large numbers of urban poor mean that affordable housing is highly in demand, and some claimed that Yang, a prosecutor, had illegally used her influence to ensure Zhou’s application was granted. Yang has said that it was one of the most difficult times of her life.

Some have described Yang as more of a priest than a procurator.

“If people see my acts as a riddle, the answer is love. Love doesn’t need a reason. This kind of love is not simply sympathy for a defendant or victim,” Yang told CCTV News.

On December 25, 2010, Yang was given an official commendation in the judicial system at the provincial level, and was promoted to the anticorruption division. Having worked as a procurator for 12 years, Yang said she had borne witness to the misfortunes of China’s grassroots people, and had seen many tragedies that could have been avoided.

“The law is cold but its essence is warm. We need to dig out this essence through our actions,” she said.

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feature

Rare Disease Choir

Song of the Fireflies The Fireflies Choir provides a mutual support network for a growing community of sufferers of rare diseases

By Liu Yanxun

B

espectacled and wellgroomed Zou Zhengtao could well be the manager of the mahogany furniture store where he met with our reporter.

Instead, using his parents’ store as a base, Zou has devoted his time to managing a tiny NGO, the Gaucher’s Disease Care Center (GDCC), and its lone staff member – himself.

Zou is one of the few sufferers of Gaucher’s disease known worldwide. This debilitating lifelong condition stems from the absence of an enzyme that facilitates metabolism. As a result of this deficiency, metabolite sediment accumulates in the patient’s spleen before being absorbed by the bones, causing intense pain and the contortion of the limbs.

The incidence of Gaucher’s disease ranges from 0.065 percent to 0.1 percent worldwide. Among Beijing’s population of 20 million, there are only seven officially diagnosed cases. Zou is one of them, and the GDCC, founded

36

in 2012, aims to bring the rest of them together in the spirit of communication, support and raising awareness.

In Zou’s view, there is no better way to achieve this aim than through songs. In early 2013, he came up with the idea of establishing a patients’ choir. “This is a way to help ourselves and give back to society,” he said.

Lonely

At the age of two, Zou Zhengtao’s abdomen began to swell alarmingly. A string of inconclusive consultations eventually led him to a specialist who diagnosed Zou with the incredibly rare Gaucher’s disease. This made him the second known case in Beijing’s history.

Attempts at treatment proved unsuccessful. At the age of four, Zou’s spleen was removed entirely, but his liver began to swell two years after his operation, as the disease spread into his bones, causing agonizing pain. Surgery only seemed to exacerbate the problem.

Zou told our reporter he felt as if there were “a demon inside him, controlling his body.” What made things worse was, nobody seemed to know how best to confront this demon.

When Zou was nine years old, his family heard about an effective treatment for Gaucher’s disease available in the US. After contacting the manufacturer and describing their case, the medication was provided free of charge, finally stabilizing Zou’s condition.

In 2012, Zou graduated with a bachelor’s degree in finance.

However, he remained committed to improving the lives of other sufferers from rare diseases. This stemmed from his own feelings of loneliness at being unable to share his experiences with other sufferers of Gaucher’s disease.

“Doctors can relate better to patients of other, more familiar diseases,” he told our reporter, “but many doctors are completely ignorant about [Gaucher’s] disease.”

Zou wanted to establish an orNEWSCHINA I December 2013

The Chorus

Shortly after establishing the GDCC, Zou watched the French movie The Chorus (Les Choristes),

NEWSCHINA I December 2013

Zou Zhengtao, founder of the Fireflies Choir and the Gaucher’s Disease Care Center

in which a group of wayward teenagers are “straightened out” through music. Zou began to wonder if music could further improve the lives of his fellow GDCC members.

After posting an invitation to join a rare disease choir, responses

Courtesy of Zou Zhengtao

ganization for rare disease patients to meet and support each other.

With the help of his mother, the Gaucher’s Rare Disease Center was founded in Beijing. In the process of registering and managing the care center, Zou felt his loneliness eased by the enthusiasm of those who joined his cause. He found that other sufferers had an “incredible passion” and were keen to organize activities. Each meeting became something to look forward to, as it allowed a community to form from previously isolated individuals.

“When I was little, I did not know that other people were suffering from the same disease as me.

My mother said that only foreign websites had information about Gaucher’s disease. That sort of loneliness is only known to a patient’s family,” said Zou.

came thick and fast. Zou’s first respondent was Long Lin, a sufferer of pulmonary lymphangiomyomatosis, a condition with an incidence of about 1/400,000, making it rare even by the standards of rare diseases. Long’s response to the choir idea was: “The idea is great. I love

37

Courtesy of Zou Zhengtao

feature

Fireflies Choir members get together after a rehearsal

singing.” After a short meeting, both men decided to collaborate and form Beijing’s first rare disease choir.

In the following five months, dozens of patients contacted Zou about joining the choir. While those living outside Beijing were reluctantly turned down due to the logistical limitations of transporting them to practice, those within the city limits were warmly welcomed. Zou came up with the name for the choir – Fireflies.

“A single firefly only emits a dim light, but when we gather, we light up with hope,” Zou told our reporter.

The choir’s message board also attracted a volunteer vocal coach, Qiao Fan, a graduate of the Central Conservatory of Music. Qiao said

38

that it was the choir’s name which first attracted her. “They claim to be small, but I can feel immense power behind them,” she said.

Zou’s alma mater, the Capital University of Economics and Business, offered a free rehearsal space, and at the end of 2012, the choir met for the first time.

Zou said that, despite the initial enthusiasm prior to the first rehearsal, when the choristers met for the first time, the six or seven initial members of the choir were suddenly overcome with shyness.

Having a dedicated coach was invaluable from the outset. “Ms Qiao led us in some games and encouraged us to take each other’s hands and communicate,” said Zou. By the time the second rehearsal rolled around one week

later, Qiao had selected a hit song from Taiwanese pop singer Jay Chou for the choir to practice.

Everyone in the choir was familiar with the lyrics, and “we even sang in different parts,” said Zou. “Gradually, we started sounding pretty good.”

As time passed, some members had to leave due to deteriorating health, while others found singing too challenging. At the same time, more members signed up, and the choir eventually settled at its current size of around 16 fixed members, representing a cross-section of Beijing’s community of sufferers of rare diseases. Among the Fireflies are a sufferer of amyotrophic lateral sclerosis who is almost entirely paralyzed, a sufferer of brittle bone disease, and a few hemophiliacs NEWSCHINA I December 2013

dependent on regular blood transfusions.

Hemophilia patient Wang Yao was one of the first to register for the choir. She arrived early for the first rehearsal but, as she said, “wasn’t sure whether someone would pass out, whether it would be depressing, whether people would find each other abnormal, or whether they would all have nothing to talk about.”

Despite Wang’s misgivings, however, choir practice turned out to be relatively relaxed. She recalled that everyone was polite and calm, conversing amiably after Qiao had led some ice-breakers. Despite the reason behind their coming together, nobody was in a hurry to probe others about their suffering, preferring instead to focus on conversation, music and games.

Singing didn’t come easily for many of the choir members, and the group stuck to the same Jay Chou song for months as each member found their voice.

Over time, as members grew closer to one another, they began to open up, even sharing information they were reluctant to raise with their families. Questions would be raised in discussion which allowed individuals to more closely examine their own conditions, and explore new strategies for living with debilitating diseases. Many discovered that their fellow choristers had opened online stores, a business perfectly suited to those with limited mobility.

Sharing experiences also allowed the choristers to identify some of the challenges facing Chinese sufferers of rare diseases. “Rare diseases are not really rare,” said Zou. “Given the population of China, the absolute number of rare disease patients is not that small.” Despite this, China’s healthcare system lags behind in recognizing and treatNEWSCHINA I December 2013

ing rare diseases, the vast majority of which are the result of genetic defects and require lifelong access to affordable, effective medication.

Though he describes himself as “relatively lucky,” Zou has run into difficulties. Chinese customs have held up his essential medication from the US. On another occasion, during Zou’s college studies, the pharmaceutical company manufacturing his medication experienced contamination of one of its production line, halting production and leaving Zou short of medicine for over a year.

Only switching treatment to an experimental drug manufactured by another US company allowed him to regain his quality of life and complete his degree.

Anticipation

As the Fireflies’ reputation grew, a number of people volunteered to help, while charitable foundations offered donations to cover its expenses. A recording studio in Beijing even offered free recording sessions. “Our voices sounded great after professional mixing,” said Zou. “We realized we could be pros.”

The Fireflies Choir was invited to perform at China’s second annual Rare Disease Summit held in March 2013. Dressed in T-shirts with the choir’s logo, the choir took to the stage with pride.

However, recognition was not enough to pay the bills. “We cannot live on donations forever,” Zou told our reporter, adding that access to care and treatment for sufferers of rare diseases in China has barely improved since he was diagnosed as a child.

In 1983 the United States passed the world’s first bill to allow the rapid registration of pharmaceutical products designed to treat rare diseases. Tax breaks for companies

that research rare disease medicines are also provided under US law, which has led to a rapid increase in the range of treatment options available to US patients.

Ten medicines for the treatment of rare diseases in 1983 multiplied to 1,951 by December 2008, 325 of which were approved for retail by the FDA. Consequently, Japan, Australia and the European Union passed similar bills, dramatically improving the quality of life of rare disease sufferers within their borders.

In China, medical insurance that covers rare diseases is only available in Shanghai, where some patients can also apply for financial assistance. “China’s current GDP is way ahead of US GDP in 1983,” said Zou. “Yet nothing has been done in this area.” He hopes that the Fireflies Choir can draw more attention to the need for healthcare legislation that will benefit rare disease sufferers like him and his fellow choristers. “Essentially, patients like us will only be helped when Chinese companies mass produce the medicines that we need, and our medical insurance is extended to cover our conditions.”

Zou does not want the choir to inspire pity. Instead, he wants it to serve as an inspirational example of the potential of individuals who suffer from rare diseases. Zou now intends to take in patients with talent in calligraphy, painting and photography in order to reflect the broad range of talent and positivity represented by China’s rare disease patients.

“Currently, our main mission is still to improve our singing,” said Zou, who is now in the throes of organizing the first Fireflies Rare Disease Charity Concert, to be held in October. “As well as a concert, we’re also planning a musical,” he remarked with a wink.

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SPECIAL REPORT

Shanghai Free Trade Zone

Fourth Time’s the Charm As China approaches its so-called “fourth openness surge,” care must be taken to ensure efforts are genuine

By Li Jia

40

that Shanghai – Prince Charm – won the race.

At the end of September, China’s first free trade zone was launched, amid much fanfare, on a 29-square-kilometer area within Pudong New Area, with deregulation of foreign investment in the long closed-off service sector, particularly international finance, high on the agenda. All pilot projects to be tested in the FTZ, if successful, will be rolled out around the country. It is expected that international assistance will lead China to become a real gao fu shuai in the global value chain.

Photo by CFP

A

popular Chinese Internet meme devides the nation’s bachelors into diaosi (“losers”), and gao fu shuai – tall, rich and handsome.

If China’s cities were in the dating market, its gao fu shuai would doubtless be its first-tier metropolises, with their sleek skyscrapers and high GDP per capita. Among these slick cities, Shanghai is undoubtedly Prince Charming – international highend service business is an integral part of its past and present.

Along the Bund on the west side of the Huangpu River, international and Chinese banks dominate the Baroque and Gothic buildings which were built by Western banks after the gunboats of their home countries forced open China’s door at the beginning of the mid-19th century. By the early 1930s, Shanghai was known as the “Wall Street of the Far East.” Opposite the river are the avantgarde high-rises of Pudong New Area, home of more regional headquarters of multinationals than anywhere else in China. Foreign exchange rates are shown in some subway cars, and billboards of global stock exchange indices glitter at the crossroads of the Lujiazui Financial City, the heart of Pudong.

This is both the reason why Shanghai has repeatedly been chosen as the proving ground for further opening up of the coun-

try’s economy, and the cumulative result of these efforts over the years. In 1990, the late Chinese leader Deng Xiaoping decided to open Pudong to foreign investors to assuage their doubts over China’s seriousness about opening up after the Tian’anmen incident in 1989. From the very beginning, Shanghai’s opening up focused heavily on international finance and trading, regarded as sophisticated service businesses, a contrast to the sweatshops producing goods for foreign brands in the dozens of coastal cities that had opened to foreign business previously.

Over the past few years, China’s opening up process has rolled back. In addition, China has become a world plant, but no more than that. A new message that China is committed and able to restart the openness to march towards the high-end sector is necessary. Several cities were eager to be the messenger and test field. It came as no surprise

Best of Times, Worst of Times

It was not until Deng Xiaoping declared Pudong officially open for business in 1990, and mandated bolder economic liberalization in 1992, that European, US and Japanese multinationals began to be a new important source of foreign direct investment (FDI) in China. China’s WTO accession in 2001 gave them more assurance. They regarded China as an attractive market from the very beginning, and localized some of their R&D and parts supply, rather than just their assembly lines. As a result, their investment has helped China build a fully-fledged supply chain, said Professor Wang Zhile, President of Beijing New Century Academy NEWSCHINA I December 2013

of Transnational Corporations. They were loved by the Chinese government and local white-collar workers – until 2006.

It was the end of the five-year grace period for China to honor its WTO commitments on tariff reduction and rule-making. The WTO review in 2006 noted that China’s remarkable trading reform had made China the world’s third largest trader, one of its largest FDI destinations, and had effected high economic growth and poverty alleviation. However, this had also led to “complacency over its track record and a lack of a new direction for the next steps,” as Professor Wang said to NewsChina. In addition, Chinese exporters were unhappy to find themselves the top target of anti-dumping tariffs by developed and developing country trading partners.

Skepticism about China’s openness prevailed. Long Yongtu, a retired senior Chinese official, was hailed in 2001 by the media as a national hero for leading China’s WTO accession negotiations, but discredited for the same reason five years later. A number of acquisition attempts of big Chinese brands by foreign companies since 2006, from State-owned machinery giant SCMG to the privately-owned beverage maker Wahaha, were dubbed by some media as a “preemptive strike” against certain Chinese industries.

Those changes resonated in the international environment. Professor Wang highlighted that in the 1990s, the end of the Cold War resulted in a peaceful new dawn on the global market human history. Multinationals began to integrate resources globally, a process further facilitated by Internet-enabled communication and neoliberal economic globalization. Enterprises became “global companies” whose interests were intertwined with their host countries at least as much as, if not more than, their home countries.

In the late 1990s, before China earned its WTO membership, US multinational giants, including Boeing and GE, lobbied hard in Congress to grant China most-favored nation status, making it a normal trading partner not subject to discrimination.

The 2008 financial crisis, an example of the potential pitfalls of neoliberal financial globalization, aggravated China’s complaNEWSCHINA I December 2013

cency. Protectionism in trade and investment gained momentum around the world. Major international investors from the US were motivated either to return home as a response to the Obama administration’s “Reshoring Initiative,” or to move to other countries with cheaper costs than China. Western multinationals and politicians are now less enthusiastic about lobbying in favor of China than urging their governments to pressure China for more market access.

It is an open concern among Chinese analysts, including Professor Wang, that the golden age of openness may be long gone.

Backfire

The hesitance towards openness has already cost China’s potential growth in the innovation and service sectors. In its annual Position Paper released in September, the European Union Chamber of Commerce in China (EUCCC) complained that foreign companies are discriminated against in government subsidies for R&D projects and public procurement, in the name of protecting indigenous innovation. This has made European companies less motivated to bring their best technologies and R&D activities to China. European and American businesses have made such complaints repeatedly at least since 2007. It is a reluctance, not a rush, toward greater openness, said Professor Wang, that has hindered China’s efforts to move up the global value chain.

Because of restrictions on personnel and capital flow, Asia-Pacific headquarters of multinationals in China can only carry out low value-added services, while locating their high value-added services, like marketing and capital management, in Singapore or Hong Kong, according to Wang Xinkui, director of Shanghai municipal government’s counsellor office and a main architect of the Shanghai Free Trade Zone (FTZ), in an exclusive interview with the Chinese edition of NewsChina.

The reluctance will likely be costly. The service sector is now thought to play a bigger than ever role in world trade – in a report on the global value chain, the United Nations Conference on Trade and Development (UNCTAD) noted that “almost

half (46 percent) of value added in exports is contributed by service-sector activities, as most manufacturing exports require services for their production.” As the global value chain is mainly coordinated by multinationals, added the UNCTAD, more FDI inflow generates more share of domestic added value in a country’s trade. Given that, the report stressed, most FDI promotion in countries around the world between 2003 and 2012 was related to the service sector.

Chinese Premier Li Keqiang disclosed in May at the Global Services Forum in Beijing that only 10 percent of China’s foreign trade is in services, compared with the world average of 20 percent. While low-skilled services like foot massage, hair washing and catering boom in China, those crucial for upgrading manufacturing, like design, finance, information, logistics and marketing, remain underdeveloped. Limited and expensive access to decent health care and education services has hampered consumption. All of those sectors are highly restricted to foreign investors.

In addition, the US is leading several regional free trade area (FTA) negotiations, including one with the European Union and another with Asia-Pacific countries. While the WTO is more about trade in goods, these talks focus on trade in services and investment. China is not part of these talks. Once those agreements become new international rules, many Chinese analysts and major State-owned media have warned, China will face “another difficult WTO-like accession process” to join the new international economic system.

Bang

The openness of the services sector and investment liberalization to foreign investment are the major goals of the Shanghai FTZ. Six service sectors are open to foreign investment in the Shanghai pilot project, including finance, shipping, telecom and gaming, professional services (construction, legal, engineering design, etc), entertainment, and social services. US and European companies are strong at all of these, and have long been eager to enter. For example, solely foreign funded health care institutions and credit rat-

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China’s trade balance in services by sector 2012 (US$bn)

20

Tra nsp ort atio n: 47 Tou rism : -5 2 Co nst ruc tion : 8.

6 Ins ura nce and fina IT a nce nd : -1 com 7 mu n i cat Pat ion ent : 11 loy alti es: -17 Co nsu ltan cy: 13 Ad ver tisi ng: 2

SPECIAL REPORT

10 0 -10 -20 -30 -40 -50 -60 Source: Minsitry of Commerce of China

Lujiazui Financial City, on the east bank of the Huangpu River, Shanghai

ing companies are allowed.

More importantly, the way that foreign investment is administered has been improved.

Under the existing system, a foreign investor has to check the long catalog that classifies a foreign investment as welcome, restricted or prohibited. Even a welcome business has to prove to various Chinese government agencies that it will be honest and beneficial, though it is up to the market, not any official, to decide whether it will be successful or not.

A mountain of supporting documents must be prepared, such as application forms, business plans and credentials for capital sources.

The international practice in recent years has been to replace the long catalog with a much shorter list telling foreign investors which industries are closed to them, and any investment outside the so-called “negative list” will only file for their business, not applying for approvals. Nine rounds of negotiations between China and the US on a bilateral investment agreement made little

42

progress because the US insisted the negative list be the foundation of any such agreement, a provision that China refused. At the fifth China-US Strategic and Economic Dialogue in July, China finally agreed to do this, and the two sides declared their intention to enter into “substantial” negotiations. In the same joint statement, China promised to test-run increased openness in the service sector and the “negative list” in the Shanghai FTZ. National laws on the approval procedures for foreign investment have been suspended in Shanghai, followed by the publication of the first negative list at the end of September.

These changes were immediately hailed by nearly all Chinese media and analysts as the fourth openness surge following those in 1979, 1992 and 2001.

Appetizer

However, the list is widely thought to be a disappointing one, as it includes the majority of areas where foreign investment was

previously unwelcome anyway. Observers are hoping the list is only a starter – the government has made it clear that the current draft is only the 2013 version and new, shorter versions will be forthcoming.

Andrea Nessi, Secretary General of the Swiss Chamber of Commerce in Shanghai, told NewsChina that Swiss banks have been looking forward to financial services liberalization in the Shanghai FTZ, but the list granted little freedom to set up foreign banks or bank branches. Swiss companies are usually cautious in making business decisions, he said.

Due to the complex and difficult process of getting approvals, most foreign banks rarely do real banking business in China, operating more like representative offices promoting their profile, such as sponsoring concerts or sports events. Mr Nessi has to use the Industrial and Commercial Bank of China, not UBS, a Swiss bank, for his payments in China.

NEWSCHINA I December 2013

Photo by LI JIA

Shanghai’s historic Bund on the opposite shore

Mixed feelings of disappointment with and appreciation for this first step, combined with a strong expectation of bolder steps to come, seem to be the prevailing sentiment in foreign companies. In a statement on October 8, the EUCCC described the replacement of the catalog with the negative list, a practice that they have long called for, as “a positive step forwards” which “could represent a potential breakthrough in China’s future management of foreign investment.”

Several foreign banks, including Citibank and HSBC, have set up a presence in the FTZ. Mr Nessi, also an executive with Unitouch Services Shanghai, an international consultancy, is helping his Swiss clients follow the FTZ closely, to be well-prepared for upcoming business opportunities once the project’s full extent is known.

There is no guarantee that expectations will be met. At a forum on the Shanghai FTZ at Fudan University on October 13, Wang Xinkui explained why a low-quality list was NEWSCHINA I December 2013

made on the basis of the previous catalog. An important reason is that it would have taken too long to clear the many restrictive and conflicting market access policies that were entangled “like a bowl of noodles,” so the first step is to use the catalog as a reference so that the replacement of the approval system with a filing system can be realized immediately.

This explanation proved the extent to which the barriers to openness have been institutionalized, and thus difficult to remove.

In his article in the Southern Metropolis Daily newspaper, Ma Yu, director of the foreign investment institute of the Chinese Academy of International Trade and Economic Cooperation, expressed his concern that the opening-up pilot to foreign companies in Shanghai would meet with the same failure as China’s efforts to give wider market access to Chinese private companies, a goal that has been repeatedly touted by the central government since 2005 but resisted successfully so far by vested interests, particularly govern-

ment agencies holding approval power, and State-owned monopolies in those industries.

It is true that the new “negative list” model and filing system pave the way to what the EUCCC has labeled in its statement as a “level playing field” between Chinese- and foreign-funded firms. This, however, also means foreign investors still have to acquire industrial licenses if their industry happens to be restricted to their Chinese counterparts as well. Given the discrimination against the private sector in China, there is doubt about how much more business opportunity will be brought to foreign investors through the Shanghai pilot.

This suggests that the opening-up efforts in Shanghai cannot be ever be a complete success without domestic reform. Indeed, pushing forward reform is an even more important goal of the Shanghai project, and one that Chinese enterprises are looking forward to just as eagerly as their foreign counterparts.

43

SPECIAL REPORT

Photo by CFP

Bund No.6 was the office of the Imperial Bank of China, the first Chinese bank founded in 1897

Shanghai Free Trade Zone

All for the Rookies The newly opened Shanghai Free-Trade Zone may look like open season for foreign enterprises, but domestic private investors are providing the real momentum

By Li Jia

44

NEWSCHINA I December 2013

“

It’s a pity you aren’t a financial analyst, otherwise there’d be plenty of good job opportunities for you in the finance sector in the newly launched Shanghai Free Trade Zone [FTZ],” Yao Zhichang, a stock market investor in Xuzhou, Jiangsu Province, told NewsChina. Yao has bought shares in two listed companies with a presence in the FTZ. “Companies of this kind will surely be part of my long-term investment,” he added.

In July 2013, the State Council approved a plan to upgrade a 29-square-kilometer bonded zone in Pudong district of Shanghai, making the area a national pilot project for the further development of Reform and Opening-up, China’s economic reform program set in motion three decades ago by Deng Xiaoping. On 15 separate days within one month, the Shanghai Waigaoqiao Free Trade Zone Development Company (Waigaoqiao), which runs the majority of the FTZ, saw its shares suspended as prices rocketed more than 10 percent higher than the previous trading day, the maximum increase allowed by stock exchange rules.

The frenzy even spread to companies similarly placed to benefit from potential free trade zones in cities across the country, like Chongqing, Xiamen, and Tianjin.

The madness was by no means limited to the stock market. Second-hand housing prices near the Shanghai FTZ also rose fast, thanks in large part to investors from around the country rushing to set up companies in what they assume will become the epicenter of Chinese business. At a forum at Shanghai’s prestigious Fudan University, Liu Hong, vice-general manager of Waigaoqiao Development Group, said he was impressed by the kind of private investor who competed to be “on a racetrack” without knowing exactly where to run.

By any standard, these Chinese private investors look like rookies when compared with the 36 foreign multinationals, Chinese State-owned enterprises (SOEs) and joint ventures present at the inauguration ceremony on September 29, all of whom had been granted licenses to set up shop in the FTZ.

NEWSCHINA I December 2013

At least ostensibly, these well-groomed cityslicker companies – symbols of openness to foreign investment and international finance – are what the FTZ pilot project is designed to attract.

The giddy atmosphere generated by the Chinese private investors here may seem irrational, but it may in fact be justified.

Although the area is nominally a free trade zone, it appears to be more about reducing government intervention in the economy – widely regarded as the most urgent, and most difficult, reform that China’s economy is currently in need of. The FTZ initiative aims to give fresh momentum to reform by promoting openness, just as China has been repeatedly trying to do since 1979.

Sensibility

Over the three days of introductory forums offered by the FTZ administration explaining the new policies in October, investors were keen to find out how easy it would be for them to set up a company in the FTZ, what favorable tax policies they would enjoy, and how free the financial sector would be.

The answers only served to fuel the excitement – in industries not subject to government approval (like consumer goods), it takes just four days to complete the filing process after a comparatively manageable set of documents are submitted to a single government agency, compared with more than 20 days and many more documents to a number of agencies when applying outside the FTZ. Even in industries subject to approval (like logistics), the lag-time had been cut to 10 days. Annual government reviews of companies had been cancelled, replaced with compulsory annual reports by the companies on a government-sponsored Web site accessible to the public, promoting transparency by exposing companies to the scrutiny of the market.

This was music to the ears of those in attendance. Like many investors, Ms Bao, a 55-year old Shanghai resident, wondered whether she could take advantage of this by setting up a company then holding onto it until she decides what exactly she wants

to do with it – newly registered companies can remain entirely inactive for 3 years while they consider their next move.

Those pondering whether or not to set up a company have no such luxury. Outside in the street, private company registration agents peddle their services, adjusting their prices on the fly. Luckily for Mr Wu, a fund manager in his 30s, he had the foresight to set up one of these agencies in July. He told his potential clients that due to fierce competition, his prices had risen and fallen several times within the last two days, and he and his competitors made sure to emphasize to anxious investors that office space available for incorporation was running out. The registration addresses on the business certificates Wu issues are legitimate virtual offices.

Those set on renting their own office space in the FTZ may do better to reconsider – rents have doubled since the FTZ was launched. According to several agency representatives like Wu, the prices were pushed up by business consortiums from nearby Wenzhou – a city famous for its private enterprise before its private lending market began to crash in 2011 – who bought any office they could get hold of in the FTZ compound.

“They are smarter than us,” Wu said. While these agencies likely exaggerate the shortage of space in order to entice clients, land is most certainly at a premium in this tiny area.

Once registered, companies can choose to carry out their actual operations from anywhere in the country. Before the launch of the FTZ, there was wide speculation that a special 15 percent corporate income tax would be granted within the FTZ, compared with the 25 percent in the rest of the country. This has been repeatedly denied by the government, and investors are noticeably disappointed.

After spending the best part of a day inquiring about the new foreign exchange policy at booths manned by various government agencies, Mr Xu, an executive with a foreign-funded company in Ningxia, was still confused. “We need a general practitioner – a stomach problem may be caused by something wrong with the heart, then a doc-

45

Photo byLI JIA

SPECIAL REPORT

Photo by IC

Chinese investors and intermediaries gather outside the administration office building of the China (Shanghai) Pilot Free Trade Zone

Chinese investors collect brochures about the China (Shanghai) Pilot Free Trade Zone, Shanghai, September 29, 2013

tor only specializing in the stomach or heart cannot help,” he told NewsChina. Indeed, the specifics of the FTZ’s much-vaunted financial liberalization policies are yet to be clarified.

Amid the mess, confusion, disappoint-

46

ment and uncertainty, the fever remains.

Why?

Sense

In essence, this is what the project is all about. Any policy to be tested in the FTZ

must have the potential to be rolled out nationally. Special treatment like tax incentives, as government officials have repeatedly explained, do not serve the purpose of this national project.

The aim of the Shanghai pilot as a national strategy, as stated in the State Council’s General Plan for the FTZ, is “to explore new ways of deepening reform and expanding openness.” The top priority is “to accelerate the transformation” of the way that the government plays its role in facilitating trade and investment. Removing the government approval when a business is born is a confident step in that direction.

The FTZ aims to create “dividends through a better system,” not “dividends through favorable policy,” noted Professor Sun Lijian, deputy dean of the School of Economics at Fudan University. The former, as he explained to NewsChina, means less government intervention, while the latter would essentially mean giving money to businesses who do what they are told by the government.

Even the “opening-up” aspect of the FTZ, ostensibly aimed at attracting foreign investment, is in a sense designed to boost, or even force, domestic reform. This same strategy has been used by both Deng Xiaoping and Zhu Rongji, previous reform-minded Chinese leaders. In March this year, during his trip to Shanghai immediately after taking office, Chinese Premier Li Keqiang said that there was still “a lot of room and potential to [push forward domestic reform].”

However, focusing on domestic reform certainly doesn’t mean that foreign companies have nothing to gain. In the annual Position Paper released in September, the European Union Chamber of Commerce in China (EUCC) stated that previously, China could “make a choice between economic restructuring and maintaining growth,” but now, “economic restructuring is necessary to maintain growth.” David Cucino, the chamber’s president, expressed his concern at a press conference that liberalization had “stalled.”

NEWSCHINA I December 2013

More fundamental reform is expected – the market will be granted more power in pricing capital (using interest rates and foreign exchange rates), and deciding where capital can go, by loosening controls on the cross-border capital flow. Foreign and private players will also be invited to join in the game tightly monopolized by State-owned banks.

“This ‘restaurant’ has had such a high-profile grand opening that the government has had no choice but to serve a few big dishes.

This is how openness forces reform,” said Mr Ye, from Jiangxi Province, who has been doing logistics for many years in Shanghai.

Some “dishes,” he noted, are already on the table – hundreds of mandatory approvals on economic and social affairs have been lifted around the country since April. This apparent willingness to liberalize gives confidence to investors like Ye. While clearly fascinated with the finance industry, Sun Baocheng, a textile wholesaler from Shandong Province, was dismayed that as a Chinese private investor, he had little chance of getting into the financial sector, even in the FTZ. Still, he had decided to set up a financial consultancy first. Sun told NewsChina that in his previous business, he learned that “the door, once open a little, will be opened wider and wider,” and that “you can only make money when the policy begins to be relaxed and before competition becomes too difficult.”

At the Fudan University forum, Jian Danian, vice director of the FTZ Administration, said that the influx of private investors showed a “build-up of enthusiasm over the years in society, the market and enterprises for reform and opening.”

It is this desire, coupled with a belief that the door will indeed open wider, that has sparked the free-trade feeding frenzy, even though policy so far is weaker than expected or not particularly clear, according to Mr Ye. “Less, and more efficient, government intervention saves taxpayers’ money and has a betNEWSCHINA I December 2013

Photo by IC

Dishes

Investors line up to inquire about FTZ policies, Shanghai, October 7, 2013

ter effect than simple tax rebates,” he noted.

Watch Out

But the power of opposing forces cannot be played down. It is reported that Premier Li Keqiang insisted on pressing forward with the Shanghai pilot despite strong resistance within his cabinet. Previous policies aimed at relaxing regulations have become distorted in practice.

Even if the pilot were to succeed, it will not be enough. Before the 1990s, the Chinese government had tried several times to give more freedom to local governments and SOEs, but each time it led to chaos and local protectionism. The economy was only saved when the private sector was given a chance, according to Wu Jinglian, a Chinese economist, in his famous textbook on China’s economic reform.

In an editorial for the Chinese edition of NewsChina, Professor Zhang Ming with the World Economics and Politics Institute of the Chinese Academy of Social Sciences criticized the monopoly of SOEs in sectors relating to market resource allocation, such as railways, money supply and telecommunications. However, these SOEs have already become too powerful to challenge, compared with ten years ago when they were weak. This is also true for government agencies holding approval power in those sectors.

Simply opening everything to the private

sector and hoping for the best would also be unwise. Professor Sun, of Fudan University, is concerned about excessive interest in the finance industry in the FTZ, particularly offshore finance. Liberalization of interest rates, exchange rates and capital flow must all be regarded as no more than technical means of supporting trade related services – shipping and logistics, for example – and providing funds for real economy investment in the FTZ. There is a risk, he warned, that investors just want to “play the ‘yuan game’ and speculate on the currency’s appreciation.” Moreover, it is certainly not time for Shanghai to become a financial center like London or New York, delinking it from the real economy, he said.

Disadvantaged by the central government’s massive stimulus in 2008, many Chinese private companies lost interest in the real economy and turned to speculation on property and other assets. If this mindset prevails in the FTZ, analysts have warned, the project is likely to run itself into the ground.

The Shanghai test is supposed to help guide national reform, but it is not entirely isolated from the drama playing out on the national stage on which it is set. The success of the FTZ does not lie in whether or not the market is rational or not, but whether the government can agree to play a smaller, more elegant role.

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economy

UnionPay vs. Alipay

Spoil Sport State monopolist UnionPay boots private payment services off its offline turf

By Sun Zhe and Zhou Zhenghua

48

NEWSCHINA I December 2013

F

or Alipay’s foray into offline transactions, there was a disproportionate reaction. Alipay, China largest third-party payment service, said early October that it would transfer its offline point-of-sales (POS) service to Ping’an Bank, after its State-owned rival China UnionPay blocked it from carrying out direct transactions with banks.

Alipay, owned by Chinese e-commerce giant Alibaba, had already announced late August that it would be halting its offline POS service, when UnionPay pressured its member banks, who comprise all of China’s commercial banks, to route their POS transactions with Alipay through UnionPay’s own system.

China UnionPay, both player and quasi-regulator of the offline payment market, ruled that all POS services must be routed through its system, according to a statement issued by UnionPay early July, shortly after the People’s Bank of China, the central bank, signaled its intention to open up access to the offline bank card transactions and clearing market for third-party payment services, in a new set of regulations.

Over the past year, a string of regulations have been released to weaken UnionPay’s monopoly in the bank card transaction service sector, including a statement issued by the central bank late June that abolished the rule that all bank cards issued by commercial banks must carry the China UnionPay logo, lifting the legal grounds for the company’s monopoly.

Tan Jinghui, an official with the central bank, had said early July that third-party payment services should be allowed to route their transactions via direct links with banks, given that this was not prohibited by the central bank regulations unveiled early July. Tan further stated that this model was in line with the opening-up of China’s bank card transaction and clearing sector.

The UnionPay statement set a deadline – the end of June 2014 – by which time all its member banks must transfer all their direct transaction channels with third-party payment services to UnionPay so that all their transactions with these services be conducted through UnionPay, on the grounds that transactions via direct channels with thirdparty services and banks pose a higher risk to bank account security.

According to a survey by UnionPay, each third-party payment service was directly linked to an average of 12 banks, enabling them to bypass UnionPay for bank card transactions, posing a great threat to UnionPay’s market share and revenues.

The legality of UnionPay’s status as both an operator and regulator in the bank card transaction market is in question, as is the question of whether UnionPay broke anti-trust law by mandating that all transaction channels from its membership banks be consolidated, said Yang Dong, a professor of anti-trust law with Renmin University of China.

Sole Player

Founded in 2002 jointly by more than 80 Chinese commercial banks to handle the transactions between their bank cards, UnionPay used to own the only inter-bank transaction and clearing system.

For each transaction conducted on POS terminals under its system, UnionPay pockets 80 percent of the commission paid by merchants, who have long been grumbling that the industry’s high commission

NEWSCHINA I December 2013

rates are set by the monopolist.

UnionPay’s revenue totaled 7 billion yuan (US$1.1bn) last year, the majority coming from its traditional offline POS services – the company only made a belated foray into the online third-party payment business two years ago, but has yet to make any headway.

UnionPay’s short-sightedness allowed Alipay and TenPay, another payment service owned by Internet giant Tencent, to grow, relatively unchallenged, into the country’s top two third-party payment services. Had State-backed UnionPay ruled private players out of the online payment market earlier in the game, Alipay and TenPay would have long been throttled.

With the boom in e-commerce, the online transactions business has mushroomed in the past few years, with transactions almost on a par with payments conducted via POS terminals.

Over 2012, UnionPay handled 12.5 billion offline transactions, only marginally higher than the total number of online transactions, numbering 10.4 billion, almost all processed by third-party payment services such as Alipay and TenPay. Alipay commanded about 47 percent of the online payments market, with TenPay coming in second with 21 percent, according to industry research firm Analysys International.

Who’s Losing?

By the time UnionPay began to expand into online payments, AliPay’s dominance in the sector was already unshakable, given that it is the primary payment method on Taobao and Tmall, two of the country’s largest online shopping portals, both also owned by Alibaba.

Conversely, Alipay had significant advantages as it moved to penetrate the UnionPay-dominated offline market by setting up a POS service network, including a logistics infrastructure that seeks to promote pay-on-delivery transactions.

Both banks and merchants have more to gain from dealing directly with Alipay or other third-party services than with UnionPay. Merchants equipped with Alipay POS terminals would be charged lower rates of commission than those with the UnionPay-linked ones.

Banks are willing to deal directly with Alipay and charge a lower rate commission, after Alipay offered to park its immense intermediate cash pools in these banks, and emphasized its intention to promote the banks’ services to big retailers on its e-commerce platforms Taobao and Tmall.

Alipay and TenPay only need to pay its partner banks a commission of 0.1 percent, in contrast to the 0.3 to 0.55 percent the banks required from China UnionPay. Eventually, Alipay’s efforts to build a payment clearing system independent of UnionPay seemed to set off alarm bells for the sensitive State monopolist, as it threatened to bring an end to its decade of dominance in the offline payment business.

It is estimated that consumers will end up paying an extra 3 billion yuan (US$490m) per year after all transactions return to the UnionPay system, and routing payments from their POS terminals through the UnionPay system will cost third-party payment services 24 billion yuan (US$3.9bn) more in commission.

It’s UnionPay’s party, and it’ll cry if it wants to.

49

economy

Housing Market

Forever Blowing Bubbles Will the potential collapse of housing markets in second- and third-tier cities affect the white-hot markets in China’s biggest urban centers?

By Su Xiaoming, Sun Zhe and Zhou Zhenghua

50

NEWSCHINA I December 2013

Spending Spree

Local officials, the people driving what critics call an unsustainable and poorly-structured housing boom, have refuted claims that a bubble is threatening to bankrupt China’s hinterland. An official surnamed Wang with Wuwei’s housing administration told NewsChina that there is “robust demand” for the

NEWSCHINA I December 2013

city’s newly erected condominiums, claiming that dispossessed farmers are enthusiastically relocating to brand-new urban housing complexes.

How exactly these below-minimum-wage earners are affording these new condos is unclear. In the construction frenzy which swept Gansu and most of western China between 2009 and 2012, local housing prices shot from 2,000 yuan (US$330) per square meter to over 5,000 yuan (US$820), meaning that a single square meter of urban housing costs

70 percent rise in investment.

Until now, there was little indication that investors are losing their appetite. Gansu’s year-on-year growth rate in 2012 still stood above 50 percent according to the local statistics bureau.

However, in the first half of 2013, growth in real estate investment dropped by around 30 percent, with sales growing by only 6.5 percent on the same period in 2012. Countless pristine but deserted housing complexes are a visible testament to the overestimation

Photo by CFP

Y

ang is at a loss after his small plot of farmland was appropriated by the local government three years ago in exchange for just enough compensation to buy into a new resettlement housing project also being built by the government.

“I’ve been eking out a living on the land my whole life, but now it is all gone,” the 58-year-old farmer in Wuwei, northwest China’s Gansu Province told our reporter.

Yang used to support his family of three by growing vegetables on a meager plot of 1.3 mu (0.2 acres). Now, that livelihood is gone.

After being appropriated for the cheap price of 125,000 yuan (US$20,400) per mu, more than 2,000 mu (329 acres) of land in Yang’s village was sold on to property developers by the government for more than 400,000 yuan (US$65,400) per mu (0.16 acres), giving the government a profit margin of about 300 percent. Even this hefty profit margin is likely to be dwarfed by the rocketing market price of China’s dwindling land resources, which is predicted to hit 3 million yuan (US$490,000) per mu amid the country’s ongoing construction boom.

Land price hikes have in turn driven up housing prices way beyond the budget of the vast majority of Chinese people. Wuwei city, its population of 1.9 million making it a relatively small place by Chinese standards, was ranked second nationwide on the scale of vulnerability to housing market risks introduced by the China Real Estate Information Corporation (CRIC). Longnan, another city in underdeveloped Gansu Province, topped the same scale, while another four cities in the same province placed in the top 10.

Meng Yin, director of the CRIC, said that economically backward western China was home to nine of the country’s 10 most vulnerable housing markets.

Ordos, the poster-city for China’s ghost towns

the equivalent of 83 percent of the average Chinese farmer’s annual income. And despite housing being priced by the square meter, it is retailed by the unit.

According to the 2013 Annual Report on the Development of the Western Regions in China released by the Chinese Academy of Social Sciences, investment in the housing industry in China’s west grew 20.4 percent in 2012 over the previous year, while sales only grew 3.7 percent in the same period.

Housing investment in Gansu Province in particular has been continued at a breakneck pace despite no indication of a rise in demand. In 2010, housing investment in Linxia, Gansu tripled on the same period in 2009, while three other cities saw an average

of the potential locked up in Gansu’s cities.

Though housing prices in Wuwei have yet to fall dramatically, the city’s newly built apartments are now retailing at cost price according to Liu Weiqiong, a sales manager with a local developer.

Other cities are showing similarly alarming trends. In Ordos, Inner Mongolia, house prices have fallen 80 percent from a high of 30,000 yuan (US$4,900) per square meter in 2009. In the nearby new town of Kangbashi, rows and rows of darkened windows in vast high-rise housing developments at night have earned this under-populated urban landscape the title of China’s foremost ghost town.

There are plenty of other contenders to this title. Hohhot, capital of Inner Mongo-

51

economy

lia, Zhengzhou and Hebi in Henan Province, Yingkou in Liaoning, Chenggong in Yunnan, Shiyan in Hubei and Zhenjiang in Jiangsu are all cities swamped with deserted high-rises as China’s underpaid consumer class continue to defy unscrupulous developers.

The bursting of these obvious property bubbles is now seen as a foregone conclusion. According to a report by the Chinese Academy of Social Sciences, China’s developers have been building homes at a speed that outstrips population growth since 2008,

According to He Tian, director of the China Index Academy, a housing research body, income and population growth in most third-tier cities have lagged far behind housing market expansion. Only government officials and civil servants living in these areas are seen as potential homebuyers, and this weak purchasing power has contributed to the current real estate bottleneck.

Poor sales, grim economic data and a rising number of ghost towns are all offering highly visible red flags to governments, developers and speculators. Yet, even in the

Condo floor plans are drawn on the backs of models at a housing fair, April 21, Nanjing, Jiangsu Province

with the average urban Chinese family already owning more than one apartment.

Almost all cities listed in the top 50 in the CRIC housing risk scale are classed as thirdtier cities. Only China’s four so-called “mega cities” – Beijing, Shanghai, Guangzhou and Shenzhen – are so far classed as first-tier cities. The country’s other largest cities and most provincial capitals are classed as second-tier, while prefectural- and county-level cities are in the third tier. Third-tier cities have historically been the principle source of cheap labor and population growth in second- and firsttier cities. With population and wage growth in third-tier cities stagnating as a result of the brain drain to burgeoning population centers in the developed east, it remains unclear how local authorities propose to avert economic backsliding.

52

most vulnerable areas, the bulldozers continue to work through the night. One of the most ambitious new town construction programs was launched just this year in Guiyang, capital of Guizhou Province, where the four mega construction projects, with each boasting a total floor space of more than 10 million square meters, could house the city’s entire existing population. Essentially, the project will double the size of a city which already appears to have adequate housing for its existing residents.

Unsustainable Growth

As China’s leaders attempt the mammoth task of shifting the country’s economic weight from manufacturing onto services, housing prices in first- and second-tier cities are expected to keep growing. According

to Fan Jianping, chief economist of the State Information Center, the uneven distribution of resources throughout China’s economy mainly explains the concentration of the population in big cities.

Speaking at a recent conference, Fan told reporters that “a better part of the best educational and medical services is concentrated in the provincial capitals or big municipalities, which helps drive the influx of population.”

The latest census found that in the 2000s, Beijing’s population grew by 37 percent, and Shanghai’s by 40 percent. Both cities continue to register major housing deficits despite ongoing construction, as hundreds of thousands of workers from the hinterland swarm into China’s most prosperous mega-cities.

In September 2013, Beijing’s housing developers reported sufficient lots to keep pace with population growth for only the next six months, a situation which could lead to yet another price hike, according to He Tian of the China Index Academy. Beijing’s land resources have also begun to dwindle, failing to meet demand for three years in a row.

Housing prices in 70 Chinese cities, a majority of them in the first- and second-tier category, have risen for more than 10 consecutive months according to data from the National Bureau of Statistics. Government attempts to rein in growth have been limited to purchasing caps, restricting sales to those with local residency, and sanctions on developers – measures which, in corruption-riddled China, are easily circumvented by those with the capital or connections to do so.

For example, the Shaanxi provincial government imposed a 10-percent cap on the profit margins of property developers, while in Beijing advance-sale licenses for new property development projects need approval from a deputy mayor.

However, neither measure has so far borne fruit. In August, only China’s four first-tier cities – Beijing, Shanghai, Guangzhou and Shenzhen – saw their net housing inventory decrease, while unsold housing continued to pile up in second- and third-tier cities. According to the China Index Academy, about 4 billion square meters of floor space, equivalent to 40 million three-room apartments, NEWSCHINA I December 2013

china

bynumbers were constructed in second- and third-tier cities by the end of 2012 – enough to give these urban centers a four-year housing surplus.

These attempts to control housing prices by suppressing the demand through administrative measures are, in the view of critics such as Pan Xiangdong, chief economist with Galaxy Securities in Beijing, bound to distort the market unless the problem is tackled at the root – the poor distribution of resources.

In Qinhuangdao, a small coastal resort city in Hebei Province with barely one million residents, more than 50 million square meters of new residential housing has been built in recent years, or 500,000 100-squaremeter apartments. A local real estate agent estimated that it would take up to a decade to sell Qinhuangdao’s glut of property.

While a few high-end developments have proven popular with holiday home seekers, sales have been slow since prices began a sharp decline in August.

For the governments of third-tier cities, heavily reliant on sales of appropriated land, a stagnant or depressed housing market could spell disaster. Some places are already seeing signs of a squeeze. In Wuwei, the construction of a new stadium, government office buildings, a theater and a museum, all initiated at the height of the land sales boom, have all been suspended due to shortage of funds. For farmers like Yang, the shortfall in the government budget has proven crippling. His relocation apartment, due to be completed by June this year, has been left half-finished after the government defaulted on payments to the contractor, leaving Yang temporarily homeless.

After losing his land, Yang has been doing odd construction jobs in the city, with his age a barrier to more stable employment. He is now anxiously awaiting turning 60, when he will, at least according to his agreement with the government, become entitled to a 603 yuan (US$99) monthly pension.

Yang, and many others like him, can do little more than cross his fingers and hope that, this time around, the government may at least keep its word. NEWSCHINA I December 2013

14% The average year-on-year

Change in national fiscal revenue vs tax revenue, % 50 40

increase in individual income tax revenue January - September 2013, compared to an 8.9 percent average monthly increase in national fiscal revenue.

Source: China Ministry of Finance

30 20 10 0 -10 Jan-Feb Mar Apr May June July Aug Sept

92,000

Enterprises’ attitudes towards economy compared with Q3

The number of enterprises surveyed by the National Bureau of Statistics that believe that economic growth in China will improve in the 4th quarter 2013.

A total of 400,000 respondents were surveyed.

260,000 (65%) the same as Q3 92,000 (23%) better than Q3 48,000(12) worse than Q3

Source: China National Bureau of Statistics

US$15bn

China’s foreign trade surplus in September 2013, its second lowest point this year.

28 Average age of Chinese migrant workers in 2012

China’s balance of trade, US$bn 30 25 20 15 10 5 0 -5

Jan Feb Mar Apr May June July Aug Sept

Source: General Administration of Customs of China

20%

Source: National Health and Family Planning Committsion of China

The average gap recorded in August between profit growth in companies’ main businesses and their operation as a whole, indicating potential inconsistencies. The survey examined the profits of Chinese industrial enterprises declaring over US$3.3 million in annual revenue.

Source: China National Bureau of Statistics

25 20 15

Gross profit growth Profit growth in main business

10 5 0 -5

May

June

July

Aug

53

history

Beidaihe

The Summer Capital Beidaihe, often called “China’s Camp David,” becomes the center of political gravity every summer, as the country’s leaders descend on the small seaside resort to hash out major decisions

By Xie Ying and Shen Xinwang

‘Camp Beidaihe’

Beidaihe, only 258 kilometers away from the capital Beijing, lures the nation’s leadership with its picturesque scenery and favorable climate. Located on the Bohai Bay, the beach resort, whose coastline stretches 22 kilometers from east to west, is known for its cool summers. While most Chinese cities suffer sweltering heat in summer, Beidaihe rarely sees temperatures over 30 degress Celsius (86 degrees Fahrenheit).

With fine sandy beaches and a cool breeze that blows from the richly wooded mountains

54

Photo by IC

I

t was just another afternoon in early August in Beidaihe, a summer resort in the coastal city of Qinhuangdao, Hebei Province. Our NewsChina reporter was walking down Xihaitan Road, when he was stopped at a roadblock by a police officer.

This sudden heavy police presence would have jarred with the sleepy seaside scenery, were it not for the city’s reputation.

“Judging from the level of security, I can tell that top government leaders are gathering here at the moment,” Sun Zhisheng, a cultural consultant for Beidaihe district, told NewsChina.

Having lived and worked in Beidaihe for decades, Sun is used to the yearly step-up of security – the beach resort has served as a “summer base” for top Chinese officials for the last half-century. Although former Chinese President Hu Jintao abolished the yearly decampment during his time in office, the resort still remains a favorite topic for political analysts, since top leaders gather there to discuss important issues like personnel changes and major economic decisions.

Mao Zedong on the beach at Beidaihe, 1954

nearby, Beidaihe was the country’s first summer resort to open to foreigners in 1898, and became a popular tourist destination in the 1930s, with a great many foreigners, particularly Russians, flocking to enjoy modern pastimes such as tennis, golf, bowling and bonfire parties, in addition to the area’s natural beauty.

The resort’s famous sanatoriums, however, did not spring up until after the founding of the People’s Republic of China in 1949.

The new government took over or purchased more than 700 villas abandoned in the Chinese Civil War, and converted them into facilities to accommodate wounded People’s Liberation Army (PLA) soldiers and to offer rest and recuperation for model workers from all walks of life.

Chairman Mao Zedong first visited Beidaihe in the summer of 1951, and enjoyed the beach so much that he stayed until September. That year China saw satisfactory progress in economic development, and Beidaihe’s coastal scenery is said to have further boosted Mao’s confidence.

“Let’s go to the beach, where the tide matches the tide of socialist construction,” Mao told one of his guards, according to the book The Tracking Report on the Days in Beidaihe by Xu Yan, a professor of national strategy from the PLA National Defense University.

According to the book, Beidaihe attracted several hundred ranking officials that summer, and became thereafter the “summer camp” for top leaders to escape the stifling NEWSCHINA I December 2013

the resort.

Photo by Deng Lin

Fall and Rise

Deng Xiaoping (front, center) in Beidaihe, 1989

heat of Beijing.

At the time, China’s five top-level government bodies – the Central Committee of the CPC, the State Council, the National People’s Congress, the Chinese People’s Political Consultative Conference (China’s political advisory body) and the Central Military Commission – carried out their administrative duties from Beidaihe every summer from July to August. The government assigned special areas for each of these bodies, with that for the CPC Central Committee and State Council located in the city’s quieter west side (from Xihaitan Road to the south of Lianfeng hill).

“Only top leaders [like Mao Zedong, Zhou Enlai and Liu Shaoqi] were assigned special villas, which their family members could keep NEWSCHINA I December 2013

for three years after their deaths,” Sun Zhisheng told NewsChina.

It was in these villas that many important decisions were made, from the launch of the Anti-rightist Campaign in 1957 to the 1958 shelling of Jinmen (also known as Kinmen, an island off the Fujian coast controlled by the nationalist Kuomintang), from the launch of the Great Leap Forward to the People’s Commune system, beating the path that China traveled in the 1950s and early 1960s.

In 1971, Marshall Lin Biao, Mao’s designated successor, fled his Beidaihe villa to the nearby military airport after what the CPC maintains was a failed attempt to assassinate Mao, before finally perishing in a plane crash in Mongolia, casting yet more mystery over

By the time of Lin Biao’s death, the Beidaihe resort had been deserted for over five years, since a great many senior leaders and officials had fallen during the Cultural Revolution (1966-1976) which Mao Zedong launched against what he called “capitalist roaders” and “Chinese Khrushchevs.” Mao himself was also absent from Beidaihe from 1965, with his last decision made at Beidaihe being to counter what he claimed was the rise of revisionism in China.

In 1979, the year that Deng Xiaoping initiated the policy of Reform and Opening-up, a headline story in the Party paper the People’s Daily claimed that the government had decided to transfer the Beidaihe sanatoriums to tourist use.

“It was strange that the news seemed to be a government decision, but nobody had ever received a formal government document [as was common practice],” Sun Zhisheng told NewsChina. “The only reply from the central government was that the news was equally authentic as an official document, and that the decision had been made by Deng Xiaoping himself.”

According to Sun, China at the time was in urgent need of cash to pay off its huge foreign debt, and the tourism industry was viewed a fast track to revenue. “[The luxurious villas] are like a gold mine,” a foreign expert reportedly told government-run Xinhua News Agency when visiting the government sanatoriums in Beidaihe at the time.

Following Deng’s decision, the government set up a new tourism company in Beidaihe and took over nearly 400 resort buildings

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plus other facilities such as bathing beaches and garden parks. Thanks to the attraction of these “treasure troves,” the company saw the number of visitors to Beidaihe rocket to 730,000 in 1979, including 6,800 foreigners.

The boom was not to last, however – as more and more old cadres and senior officials were politically rehabilitated, the demand for official summer sanatoriums in the balmy climes of Beidaihe became overwhelming.

In 1981, the Beidaihe Tourism Company had to return a portion of the resort buildings to the government to ease the shortage. Two years later, the central government convened a meeting on cracking down on crime in Beidaihe, marking the resumption of the central government’s summer sojourn.

By now, the number of resort buildings and sanatoriums in Beidaihe had risen to over 200 from 50 before 1980 – however, public access to most of these was denied. In the Xihaitan Road section, for example, a speed limit of 15 kilometers per hour was imposed throughout the year and the bathing beach for the leaders was separated from ordinary tourist beaches by a wire netting. The only leader who reached out to the public across the netting was Deng Xiaoping, who invited ordinary tourists to cross the “borderline” for a photo opportunity one summer day in 1984, winning him much media applause.

Political Barometer

Today, with the Chinese public growing resentful of corruption, the spree of construction of official leisure facilities in Beidaihe is becoming a sore spot for ordinary people, many of whom believe that the government controls too much of the country’s resources, and is increasingly removed from ordinary people. This was seen as one of the major reasons why former Chinese president Hu Jintao put a stop to the Beidaihe decampment practice in 2003, the year that China was hit hard by the SARS epidemic.

Concerns about Beidaihe’s future after being disconnected from the political arena were soon dispelled later that year when the government invited a group of medical experts to the resort for a vacation, as a reward for their great contributions to the fight against SARS.

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Photo by Xinhua

history

Deng Xiaoping meets with Kimura Mutsuo, then president of the House of Councillors of Japan, in Beidaihe, July 1985

This was a custom copied from the former Soviet Union to show the government’s care of those with special talents. According to media reports, the Chinese government has invited 13 batches, totaling more than 700 experts and academics, to the Beidaihe sanatoriums since 2001.

Analysts have noticed that the fields from which these experts come tend to coincide with the priority of the government’s agenda at the time. For example, after the government began promoting the slogan “science is the most productive” in 2004, it invited several dozen high-tech scientists to the Beidaihe resort. In 2006, while promoting the importance of rural issues, the honored guests were mainly agricultural experts.

“It is an extraordinarily high level of treatment, which I had never received before,” Zhao Zhengyi, a rural inventor who was awarded first prize in the national scientific and technological progress awards, told the media in 2012 when he and another 61 experts were hosted at an upscale Beidaihe sanatorium.

Government media have rarely reported on the leaders’ activities during their stay in Beidaihe since Hu Jintao abolished the yearly outing, so meetings between the top leaders and their advisers have become a signal that the top leaders are holding an “informal” conference in Beidaihe to discuss something crucial.

It was unsurprising, then, that when for-

mer politburo member Bo Xilai was detained on suspicion of corruption and the Chinese government approached a once-in-a-decade power transition last year, a New York Times report that an elderly relative of former Premier Zhou Enlai had been spotted at the Beidaihe resort caused widespread speculation among foreign media that the CPC was discussing candidates for the new Politburo before the Party’s 18th national congress scheduled for November 2012.

Although some analysts like Deng Yuwen, the former senior editor of Study Times, a publication affiliated with the Party School of the CPC Central Committee, predicted that the government might not hold the so-called “Beidaihe conference” this year due to new President Xi Jinping’s calls for frugality and clean government, the resort still came under the spotlight after Liu Yunshan, a standing member of the Politburo, met with over 60 experts and retired cadres in Beidaihe on August 5 and remained out of the public eye until August 15.

“Given the fact that the ‘disappearing’ politburo members have resurfaced together in Beijing, we can deduce that the CPC’s top leadership has ended its meeting in Beidaihe, and thus they have established the priorities of the Party Central Committee’s third plenary session,” read a report in the Singapore-based newspaper Lianhe Zaobao.

Even domestic media outlets like the Economic Observer cautiously implied that “the government [had] discussed some crucial issues, like the fight against corruption, in Hebei Province.”

An insider, who asked not to be named, told NewsChina that the local government in Beidaihe had been making preparations for the leaders’ arrival since June. “Since the ‘summer office’ system was abolished, a new custom has formed whereby central government leaders and some retired cadres stay in the Beidaihe retreat for their summer holidays or for recuperation,” he said.

While a summer-long Beidaihe conclave may be too extravagant for today’s political climate, the sleepy seaside town will likely remain the epicenter of every major political decision for the time being. NEWSCHINA I December 2013

culture

Yan Lianke

Chronicles of Myth and Reality Walking a path not too far removed from that taken by China’s first Nobel prize winning author Mo Yan, “mythical-realist”Yan Lianke aims to elucidate absurdity without straying too far from China’s real-world problems

Writer Yan Lianke NEWSCHINA I December 2013

Photo by IC

By Chen Tao

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culture

I

n the past five or six years, drafts of Yan Lianke’s novels have tended to circulate among publishers, before eventually being rejected. The fact that his latest novel Zha Lie Zhi (literally, Chronicles of Explosion and Split) has been published, he feels, is largely down to good luck.

Yan, at the age of 55, has been called China’s most controversial writer – several of his books are banned in the mainland, including Serve the People!, a story about an affair between a soldier and the wife of a general during the Cultural Revolution, and Dream of Ding Village, a story about rural populations infected by HIV. In 2008, he published the novel Ballad, Hymn, Ode, telling the story of a college professor sent to an asylum after finding out about his wife’s affair, who ends up fleeing to his countryside hometown.

Thanks to its unsavory portrayal of the dark side of the Chinese intellectual circle, the work provoked much debate.

“Writers mustn’t self-censor, but to publish you have to compromise,” said Yan. He admits that in order to secure the release of his new book, he had to make various concessions. Over the course of thirty years of writing, Yan has been trying to learn to fit into China’s highly politicized literary establishment, his sizeable talent and tendency to be outspoken often sabotaging these efforts – Yan, unsurprisingly, is no stranger to the censor’s red pen.

Chronicles of Explosion and Split, Yan’s latest novel, is a story of a village (called “Explosion and Split”) that mushrooms into a massive metropolis over the course of thirty years. Yan calls it a further exploration of “mythical realism,” a term he himself coined to describe his writing. The narrative is framed as a set of village chronicles, a style that evokes the strong Chinese tradition of local record-keeping.

Literary critic Chen Xiaoming called the storytelling in Chronicles “astonishing,” while popular post-80s generation writer Jiang Fangzhou commented that “while dealing with the complexity and queerness of the reality of contemporary China, the novel harnesses them easily, rather than responding to them passively.”

But Yan himself remains dubious about the value of his own works. “How could it be possible for a writer to examine three decades of anation and the psychology of its people in one book?” he asks, sitting in a café on Beijing’s West Third Ring Road.

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Explosion and Split

Yan believes that content and narrative framework are equally important in his writing, and accordingly, the form of a Yan novel often alludes heavily to evocative Chinese cultural reference points.

In Ballad, Hymn, Ode, Yan borrowed the table of contents from the The Book of Odes, the earliest collection of Chinese poems, to string the series of stories together. This time, he thought it more appropriate to elucidate change using village chronicles.

“Chronicles are very popular in China. Every county has its chronicles, and each of our ancient dynasties kept chronicles, too.”

Yan says the style makes the narrative more direct, and makes it easier for readers to observe change. The records’ editorial board serves as a cast of characters, and “Chief Editor Yan Lianke” also appears as a character in the story.

Similarly to other controversial mainstream Chinese novelists (Nobel prize-winning magical-realist author Mo Yan being a particular example), Yan’s “mythical-realist” style seems to be designed to illustrate social ills with just enough abstraction to escape being blacklisted.

“Realism relies on cause-and-effect, as does absurdism to a certain extent. My ‘mythical realism’ is a combination of realism and magical realism, but it emphasizes internal cause-and-effect relations [i.e., those within the character’s conscience].” He points out a few examples: In Chronicles, when the protagonist Kong Mingliang is made mayor, his secretary Chengjing automatically loosens her clothes. “It does not look reasonable at first sight. But what I have taken hold of is internal cause-and-effect, or internal logic, that everyone is as obedient as a plant when confronting power,” explained Yan. He believes this style of writing is “more direct and powerful”.

2011 was a particularly eventful year for Yan. In an op-ed for the New York Times titled “The Year of the Stray Dog,” Yan called the year “as long and dark as a tunnel without light.”

First, Yan’s son, a returning graduate with a master’s in law from a UK university, was rejected for a government position in China’s legal system because he had not joined the Chinese Communist Party. Then his politically provocative novel Four Books, which he had spent twenty years planning and two years writing, was rejected by twenty publishers. The rest of the year, he had to face the NEWSCHINA I December 2013

reality of his mortgaged apartment being demolished.

It was only at Chinese New Year, when he returned to his countryside hometown, that he had a chance to relax for a week and a half. “Everything was delightful,” he said. As he left, six days into the new lunar year, Yan wept.

However, Yan knows it is impossible for him to return to the countryside. “It is devastating living in Beijing, but it is also not that easy to leave,” he said. “Besides, it could be hard to readapt to the countryside. The countryside is not what it once was. People have changed dramatically. We know, in fact, that all urbanization is an encroachment on the countryside.”

Yan was born in a village in Tianhu Town, Song County, Henan Province. The village is not far from Beijing, and he goes back there from time to time. Yan is familiar with his hometown, and the symbolic Palou Mountain in his novels represents his home. “Every writer has a place that he is familiar with, a place he knows exactly how to write about,” he said. In his new novel, the village of Explosion and Split is located at Palou Mountain.

“Why did I call the village Explosion and Split? Because that is what is going on in China now,” Yan explained. “Our society is one that is exploding and splitting, as are the minds of its people. Anyone who knows anything about China is self-conflicted at heart.

[For example,] everyone wants to make money, and they all know it’s improper to evade tax and that corruption is intolerable, but it’s very difficult to make a fortune any other way.”

“Lowering My Head”

Despite being one of the most controversial writers in China, Yan’s early motivation to become a writer was actually rather practical: to escape the impoverished countryside.

At the end of the Cultural Revolution, Yan, then a senior high school student, once read in the afterword of a novel that the author’s writing prowess had led the government to relocate him to the city. He detected the possibility of changing his life through writing, and wrote a 300,000 word novel in two years. In need of fuel to keep the family home warm, his mother later burned the manuscript.

In 1978, Yan joined the army. He was promoted from private to platoon leader, and later to a political instructor. During this time, NEWSCHINA I December 2013

his talent for writing was recognized within the army, and at the beginning of his army life, Yan wrote a great number of propaganda novels and plays, earning him the opportunity to stay in the armed forces as a professional military writer.

Yan’s writing career saw a turning point between the late 1980s and early 1990s, during which time he completed People from All Walks of Life in Dongjing, a short story series. In the series, discussions about “lifestyle” are conducted through depiction of historical figures, demonstrating social changes and hardship in China over the course of a hundred years. He also wrote the Yao Gou series, broadly recognized as the point at which Yan began to depict suffering in a more starkly realistic manner. In this series, he examines rural China in a contemporary light, constructing a tiny artistic world of the northern Chinese countryside.

It was during this time that Yan joined the China’s Writers’ Association. Despite the organization’s inherent link to the establishment, membership did not stop him from looking in new artistic directions.

In 1997 he wrote Year Month Day, which won the prestigious Lu Xun Literary Prize. In 1998, his novel The Sunlit Years drew wide acclaim among critics, who said that the work marked Yan’s abandonment of realism, and the beginning of a shift towards fables.

After 2000, Yan joined the Beijing Writers’ Association as a professional writer, and wrote the novel As Hard As Water about the political chaos of the Cultural Revolution, and Enjoyment, which is widely considered a political fable. Serve the People! and the Man Booker Prize-shortlisted Dream of Ding Village, both critical of the establishment, consolidated the irony of Yan’s increasing entrenchment within the system.

However, Yan says that how others define him is unimportant, and his works will continue to contemplate history and examine reality, just as he does in Chronicles.

In August, Yan was awarded the Huazhong Literary Award in Malaysia. Speaking at the reception, he said, “I come from a distant village. While I was young, I bent my head constantly in pursuit of fortune and fame. It is literature that allowed me to find the real me. Literature has allowed me to hold up my head confidently, but now only when I write do I lower my head.”

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visual REPORT

Quacking Mad The 18-meter-tall floating rubber duck sculpture, designed by Dutch artist Florentijn Hofman, wrapped up its tour of the Chinese mainland on October 27.

During a one-month exhibition on Kunming Lake at Beijing’s Summer Palace, tens of millions of people visited the installation.

Ever since the first incarnation of Hofman’s duck debuted in Hong Kong Harbor earlier this year, China has been swept by yellow fever.

Capitalizing on the duck’s popularity while disregarding its copyright, knock-off rubber ducks have sprung up not only as attempts to attract visitors to various cities, but also at events such as the promotion of real-estate developments, new shopping mall openings, and even on dining tables at the famous Quanjude roast 60

duck restaurant. However, the sudden overpopulation of giant ducks in China appears to have brought a lot of amusement for local residents – particularly in cases where the imitation was somewhat below par. For example, in a park in Beijing in September, a rubber duck wearing a green vest, followed by a long line of eggs, floated forlornly on the water’s surface.

Businesspeople, most notably street peddlers, have also cashed in by selling yellow duck memorabilia over the past few months. Ironically, as the designer and copywright owner of the duck, Mr. Hofman’s intention was reportedly to spread joy around the world, yet in China, the duck’s most enduring legacy will likely be a long line of knock-offs.

NEWSCHINA I December 2013

The giant yellow rubber duck looms over the Summer Palace, Beijing, September 26 NEWSCHINA I December 2013

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visual REPORT

A visitor jumps for a photograph at the rubber duck’s farewell ceremony at Beijing’s Summer Palace, October 15

Tourists visit the giant yellow rubber duck, brainchild of Dutch artist Florentijn Hofman, at the Summer Palace in Beijing on62 October 3, the third day of China’s National Day Holiday

NEWSCHINA I December 2013

A replica rubber duck floats on the Huangpu River in Shanghai, October 5

A knock-off duck in a green vest floats alongside seven inflatable eggs at the Garden Expo Park, Beijing, September 6

Workers inflate the giant rubber duck at the Beijing Garden Expo Park, September 5

A chef at Quanjude roast duck restaurant adds the finishing touches to a duck-shaped pastry sculpture, Beijing, September 1

After several days on display at the Summer Palace, the rubber duck gets hosed down, Beijing, October 11

Street-peddlers rubber NEWSCHINA Isell December 2013duck memorabilia to visitors at the entrance of the Summer Palace, Beijing, October 4

Two young women sport rubber duck backpacks, Beijing, September 28

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OUTSIDEIN perspectives from within China

Hidden Ganzi

To the Skies

Gruesome, spectacular and powerfully spiritual, Tibetan sky burials are one of China’s most shocking ethnic customs. Our writer travels to Ganzi Tibetan Autonomous Prefecture, in northwest Sichuan, to bear witness to the ceremony

By James Kingston

Where to Stay: Sertar is full of hotels, ranging from the gaudy to the squalid.

With no youth hostels, expect some expense. Alternately, persuade a monk to let you stay at the Buddhist College for free; facilities are basic but the experience unique.

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A panoramic view of the temple of Serthar Wuming Buddhist Study Institute

NEWSCHINA I December 2013

Photo by IC

How to Get There: It is, as many a woolly spiritualist might be tempted to observe, not the destination that counts but the journey. This one is long and exhausting. From Chengdu go to Kangding; from Kangding to Luoho; from Luoho you may be able to find a minivan taking you north to Sertar. Traffic jams, collapsing roads and the occasional corrupt policeman keen to chat about Justin Bieber may all be expected.

Photo by CFP

NEWSCHINA I December 2013

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Photo by CFP

T

owering like some vision out of Wagnerian myth a huge prayer flag stood, shrouded in cloud atop the sheer side of the mountain, its colored mantra-sheets moving slowly in the currents of wet air. Beneath it we stopped and drank from the icy water which fell mist-like down the rock-face, watched by a family of nomads camping beside a stupa at the stream’s edge. Bathing our hands, our faces, we washed off the dust of Ganzi Town, left behind what seemed an eternity before. For eight hours our minivan had ground its slow way along the unpaved roads of northwestern Sichuan, a ride and journey of enervating, pot-holed intensity. We passed remote mountain villages hidden in the cleft of deep valleys, dotted with water-powered prayer wheels spinning eternally their mantras within; great expanses of open grassland, alternately bright and dark with the rain, and marked here and Lamas watch a sky burial in Sertar, there with clusters of yellow November 20, 2012 and red prayer cloths; golden towers could be seen glinting in the distance upon the green hills, with the black around their workshops. Smoke rose tents and herds of the people from simple chimneys, and above around them. the town lines of prayer flags flutWe reached Sertar at evetered in the mountain air. Simple alning, driving through a green leys of grass, mud, and tiny streams plain filled with the encampform the space dividing houses, ments of Tibetan herdsmen, which stood one or two stories high women building cooking and made of wood and stone. Old fires from stores of dried women in long robes walked past yak dung. The town itself spinning Mani prayer wheels. Men was unremarkable; a main were clad in wide-brimmed hats and drag filled with tool shops Lamas carry wood in Sertar Wuming Buddhist Study Institute heavy, long-sleeved coats tucked in and cheap restaurants run upon themselves so as to leave one

by Han Chinese from the arm free. These Tibetan laity seemed lowlands below, leading on to make strong contrast with the to the central square, largely monks about them, so young, redunder construction, about which lay the hotels. The morning brought robed and fresh faced. farmers and young monastics from the college above to town, shopI had come to see a sky burial. ping and sunning themselves in the light under the unsmiling gazes of We chatted as we walked through the town and onto the grasslands the local police and army detachment, who stared out in cordoned-off beyond, past the painters at work on their stones and yaks being chivsilence from their position at the centre of the square. vied through muddy alleyways. He had, he said, grown up upon the The journey from Sertar to the Buddhist College was yet more grassland, a nomad so close to the animals almost as to be one himself, striking in its imagery – a long road uphill streamed with the saffron and had come illiterate to the training college at the age of 12, smiling of wandering monks. My guide, a young novice met dining the night still as he remembered the joy of his first arrival, the wonder at the before, took me through the town. Low flat-roofed houses of stone opportunity which opened up for him. and wood, brown and red and glinting in the rays of the morning sun, Our path took us beyond the fringes of the town, and onto the lay piled atop one another along the contours of the upper hill, rising slopes beyond, to where there could be seen prayer flags, a small around the central buildings of the Buddhist College and the libraries crowd, and a stone platform cut into the side of the hill and dotfor the sacred books, two of each that the monks and nuns might be ted about with the signs of ongoing construction. Stacks of bricks lay kept separate. Skilled artisans could be seen at work creating devo- about the place, bundles of sticks and loose cables, yellow excavators tional art, carving and painting mantras and images into rocks arrayed grabbed at the soil beneath them. Wreathed in scaffolding, dark crags

travel

of fake rock jutted upwards, behind a central platform upon which lay three grey stone skulls jumbled and huge, fangs gaping at the sky.

We wandered upon the platform, amidst young women demonstrating unencumbered consciences by lying down within the circular depression apparently used to lay corpses – a custom showing, via their readiness to face death, their lack of sin. On the slopes above, a scattering of monks mixed with local Tibetans and Han Chinese tourists hefting their cameras.

Cars and trucks drew up, holding within them the deceased and their families. Swaddled in sheets, they were taken first to the central platform, then to its side where, discolored with death, they were unwrapped and laid naked upon the ground.

Beating lazy wings the vultures circled above as the monks, clad in heavy aprons over the saffron of their robes, began their work.

Making long and deep incisions down legs, arms, and back, they butchered the deceased and exposed the red and white of their innards to the sky. Cuts were made wider, skin and fat flayed. Arms and legs, where rigor mortis had set in, were hacked with a butcher knife, crunching as bones shattered underneath. Heads were scalped.

Double now in their nakedness the dead looked pitiful and somehow absurd, denuded of their dignity along with their skin. Whether curious or ghoulish, the crowd inched forward until it was mere feet away from the cutting of the dead and, according to my young monk, worrying the vultures who now squatted waiting upon the slope, intent upon the sight below.

However, crowd control in Khampa is a rough affair. Seeking to make us move back, a monk ran at us shouting and waiving a flail – it seemed perhaps a slingshot, or a length of leather, but was in fact a long and thick strip of human skin, yellowed and fatty and dangling

in his hand. The crowd recoiled, with pudgy Chinese screaming for their children to get out of the way, a solitary dreadlocked Westerner sprinting up the slope. They probably didn’t warn of that in the Lonely Planet.

Freed of onlookers, the monks poured barley butter upon the flayed remains and called up to the birds. Squawking, they rushed hopping down to the corpses, tumbling over themselves and squabbling with loud cry over their waiting’s reward. They stripped the bodies down to the bone, and then fought over bare ribcages and loose skulls glistening under the sky.

As the vultures roiled yaks stood confusedly about, gazing with dumb bovine incomprehension at the proceedings beneath them. A monk sat burning incense, chanting, and banging a small drum – it was his job to frighten away those restive spirits who still failed to realize they and their bodies were no longer attached. Beside him stood some relatives of the deceased who with their phones aloft stood recording the entire event.

To the Tibetans, the sky burial is but the last stage in a funerary process lasting several days, usually in the homes of the dead. By this point, the souls of the deceased are judged to have fled, their bodies being as mere empty containers to be disposed of. Photos and videos are thus not inappropriate, and of no real importance – the young monk I was with encouraged me to take some, he even posed himself, and took the opportunity to take some of his own.

Bones now bared, it is the work of the monks to pound the remainder down into paste and mixed with roasted barley flour which is rolled by hand and fed to the birds; a process simply regarded as “boring” by my guide. Together we walked out across the grassland, green and warm on a summer’s afternoon.

real chinese

tǔ

tuhao New Money Hot on the heels of the hated gao fu shuai (tall, rich and handsome) have come the new scapegoats for online China’s burgeoning dislike of those who flaunt their wealth. World, meet the tuhao.

Tu literally meaning “dirt” but used as a euphemism for anyone or anything seen as rural, rough or unrefined, is paired with hao, a word which incorporates the meanings of both wealth and power. Tuhao was a common phrase used in 1940s and 50s Communist Party propaganda urging rural workers and farmers to rise up and overthrow local landlords – the tuhao – that the Party claimed had disenfranchised the masses.

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Today, however, the tuhao are those who flash their wealth with the purchase of extravagant and unnecessary luxuries. Tuhao may be richer than the equally-maligned gao fu shuai, but are sneered at for their perceived lack of refinement which, in an increasingly snobbish online environment, places them below the gao fu shuai in China’s social caste system. While the gao fu shuai might lavish expensive but tasteful brand-name goods on their partners, tuhao typically go for the more expensive but far less tasteful or subtle gesture.

When a millionaire in Jiangsu reportedly shaped millions of yuan in banknotes into mutton pancake rolls as a gift to his fiancée,

háo

for example, he was castigated as a tuhao.

The term took off after online portal ifeng. com posted a picture of an extremely luxurious and star-studded launch party held by a Chinese movie company. The accompanying caption “In this hot summer, let me fan the heat away from the tuhao” immediately went viral, spawning legions of imitations.

When Apple launched the gold handset of its new iPhone 5, which was widely mocked for being tacky, it nonetheless became a number one seller in China. “[Gold] is really the color of tuhao, since it’s the only way to distinguish the iPhone 5 from other [iPhone] handsets,” ran one post.

NEWSCHINA I December 2013

flavor of the month

Happy Hani

By Stephy Chung

NEWSCHINA I December 2013

and started on the noodles.

The rice noodle with savory bean custard was a triumph.

The slippery strands yielded a bouncy bite, and absorbed the subtly spiced vinegary broth. The homemade soft tofu, broken over the dish in tasty morsels, was marvelously creamy.

Peanuts, a primary source of protein in Hani diets, are used generously. The restaurant’s version of roast fish was a crispy carp loaded with chopped chilies and peanuts. I didn’t quite enjoy the sweet taste of peanuts paired with the aromatic fish.

However, I found them wonderful in the cold, chickpea jelly dish.

The chickpea jelly came out differently than I had pictured. My experience with chickpeas in the past has been whole, tossed in salads or sautéed in curries. In this Hani version, chickpeas are ground into flour and used to make savory, translucent jellies.

The centimeter-wide slices in the dish were stacked firm, like Jenga, and topped with a thick chili sauce and crushed peanuts. The combination of textures – the thick sauce, the crunch of the peanuts, and the delicate jelly made for compelling mouthfeel, and the flavors were bang on – salty, spicy and garlicky.

The appetizer dishes highlighted the cuisine’s light and healthy features. The chicken salad was simple and delicious – the chicken poached, pulled, and then flavored with lime, chilies, ginger, and cilantro. The multi-grain rice, which Zhou explains is eaten more as a snack and not part of a big meal, was a scrumptiously nutty serving of four different types – red, sticky, purple and rice made with corn.

Yunnan staples – like mushrooms and potatoes are done in different ways throughout the province. At Hani Gejiu, oyster mushrooms are battered, deep-fried and served with dry spices and chili powder. The potatoes were a lighter nod to hush puppies – mashed, rolled into velvety balls and fried. Both were best when dipped in the accompanying sauce – an addictive mixture of chilies, soy sauce and vinegar.

During previous trips to Yunnan, I remember thinking the region’s hot subtropical climate seemed to compliment its food. Strange then, while at Hani Gejiu, that I had the exact same thought about Beijing’s cold, bitter winter.  Courtesy of Hani Gejiu

E

ating at a Yunnanese restaurant is a reminder that food in China’s most far-flung southwestern province can be as diverse as its wildlife. Home to over a third of China’s flora and fauna, Yunnan luxuriates in boundless diversity – and the same can be said for its vast variety of menu options.

The province’s cuisine is heavily influenced by neighboring Southeast Asian countries, incorporating fresh, zesty flavors. It’s pretty much as “foreign” as you’re likely to find inside of China – for instance, goat cheese is a favorite, and as a result Yunnanese cuisine has yet to win over less exotically-inclined Beijingers.

That though, is changing thanks to the growing number of Yunnan restaurants now found throughout the city. Most are concentrated in the historic Gulou neighborhood – an area that’s still largely made up of hutong alleyways – quieter surroundings that fit the homey appeal of the Yunnanese culture.

A few paces away from the Drum & Bell tower is newly opened Hani Gejiu. Painted green characters spell out the restaurant’s name on flat wicker baskets outside the doorway. Inside, the space is warm and furnished with second-hand treasures. Wooden tables are crafted from old doors, childlike murals depict goat-herders, and colorful fabrics create a grounded, cozy vibe.

Unlike most Yunnanese restaurants in Beijing, this one draws less of its inspiration from the Dai minority, who use more sour flavors, and more from the Hani minority, who work more fragrant and spicy elements into their dishes. The Hani people are one of China’s 56 official ethnic minorities, and their population centers around Gejiu, a city located by Yunnan’s Red River, along which rural villagers farm many of the region’s rice terraces.

Hani rice noodles – unique to the Gejiu area – are what attracted co-owner Sue Zhou to Hani-style foods. “During a visit, I noticed that the Hani are like Italians when it comes to making noodles. They have such high standards. They can tell you the difference in taste between a noodle made in Kunming, and a noodle made in Gejiu.”

The restaurant mimics those exacting standards, and imports all of its dry rice noodles from the region, after realizing the same couldn’t be recreated in the city. “So much about noodles has to do with water quality, and in Beijing, the water is too hard,” Zhou says.

With that in mind – I ordered several Hani favorites off the menu,

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essay

What’s for dinner?

By Sean Silbert

Illustration by Xiang Zhaohui

Shrug, and keep eating, all the while wondering if it’ll be the next bite that kills us

The pollution problem in China is as obvious as the capital’s swirling, chalky skies, though just as easily dismissed as a mere annoyance, rather than a catastrophe. Expats make a habit of checking how many millions of particles are in the air in the same way New

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Yorkers might check the weather forecast.

Tap water isn’t drinkable, so once every two weeks a diminutive but spry gentleman delivers a water-cooler sized drum of the stuff up six flights of stairs. Nobody asks why we can’t drink what comes out of the tap.

Even frightening tales of “cancer villages” are little more than cocktail banter.

So it is with China’s growing almanac of food horror stories. Familiarity has bred resignation, and every new tale of exploding watermelons, bioluminescent pork and rat kebabs just becomes another sad joke. Rice is contaminated with cadmium, sewage is used in tofu production, honey is just artificially flavored sugar syrup and even eggs are manufactured from a blend of paraffin and gelatin, and what do we do? Shrug, and keep eating, all the while wondering if it’ll be the next bite that kills us.

Everyone has their different strategies for coping with the reality of the Chinese-style food scare. Perennial warnings flow in from Chinese friends – one week we’ll hear “don’t eat chicken, it’s not good.” A Singaporean friend of mine who worked at a hotel decided to buy her groceries only from ritzy Westernstyle supermarkets, where she’d spend maybe four times the local price for a cut of meat.

Imported Thai rice may be twice what the local stuff costs, so the shopper is forced to let either their body or their wallet take the hit.

Insecurity over food gets to you after a while. Obviously I can’t quit eating, and if I want to stay in China then eating local food is part of the package. A meal at a local restaurant always comes with questions – is that oil taken from the gutter? Are the vegetables contaminated with lead? Fine dining isn’t much better: A superior supply chain has been proven time and again to be no defense against the unscrupulous ersatz food baron.

Even cooking at home doesn’t solve anything – you won’t have visited the farm your pork

chop came from, so its antecedents are anyone’s guess.

Going organic is an option if you can pay for it, and Beijing has developed its own niche organic food industry run by a new breed of entrepreneurs that likes to harangue consumers for not knowing what is in their food. Some restaurants have got in on the act – sourcing vegetables from their own farms, or only using so-called organic suppliers. But there is no official certification system for organic products in China, meaning that, in reality, all you have to go on is the word of yet another farmer or businessperson hoping to make a profit.

In short, one has little choice when it comes to the provenance of one’s local grub, and a food system so incentivized to deliver the lowest price possible is bound to breed corner cutting. Although the government has paid lip service to cracking down on violators, the regulators have difficulty keeping up with the ingenuity of the marketplace. They simply don’t have the manpower. Hopefully, it won’t take long before sheer consumer demand results in cleaner, safer food from the fruit vendor to the banquet hall – such changes have already been seen in the dairy and rice sectors.

Chinese people and expats living in China don’t shrug off food hazards because we don’t care – we shrug them off because we have little choice in the matter. While it’s tough not to worry too much, life in China revolves around the dining table, from business deals to meeting old friends. Food safety discourages one from really delving into local culture, but is unlikely to stop those living here from patronizing local restaurants and purchasing local ingredients. Who wants to live in China, birthplace of the planet’s most diverse and exciting culinary culture, while subsisting on exactly the same fare they do at home? NEWSCHINA I December 2013

The Chinese Abroad

By Will Philipps

Illustration by Xiang Zhaohui

China’s still relatively nascent foreign travel culture is in danger of being sterilized before it finds its wings.

I’m sat on the train from Beijing to Hong Kong. It’s October 2, the day after National Day, and the carriages are packed. I migrate south at this time of year to renew my visa and visit friends in Hong Kong, and given the crowds as I leave the capital it seems 1.3 billion other people have had the same idea.

This week is famous for being the time when business takes a back seat and the whole country is on the move, with the number of travelers increasing every year, and the warning signs getting heavier. Xinhua News Agency estimated that 610 million people (pretty much half the country) were expected to take to the roads and airways this year, an increase of 12 percent from the previous year.

But the madness is not limited to within China’s borders. Last year China became the world’s top-spending nation abroad, having spent US$102 billion in foreign countries, according to the UN world tourism organizaNEWSCHINA I December 2013

tion. Given the huge amount of income that tourism can generate, Chinese tourists are generally welcomed by overseas governments.

Only this week I read that my native UK has changed its regulations regarding Chinese tourists, allowing them to enter the country more freely, perhaps a response to the news that UK visa problems were forcing many Chinese to shun Buckingham Palace in favor of the Eiffel Tower.

But with great travel comes great responsibility, and in terms of Chinese manners abroad, it hasn’t exactly been a year to write home about.

Remember the young Banksy impersonator – a Chinese middle school student who got in deep trouble for scrawling graffiti on an ancient Egyptian frieze? More recently, a photo circulating on the Internet showed a young Chinese mainland boy urinating into a trash can at a Hong Kong subway station (with the assistance of his mother). At least he was making some effort to contain spillages – no-one likes an ominous puddle making its way down a crowded subway carriage.

This year Vice-Premier Wang Yang publicly urged Chinese travelers to be on their best behavior abroad, and a 64-page guidebook was issued with rules on how to be a polite traveler abroad: “Keeping up appearances abroad is vital for the image of a nation on a purely social level and for most people any interaction with people from other countries will come through tourism,” the book declares.

It includes some relatively straight-forward advice (be punctual when part of a tour group), some essential advice (refrain from touching antiques or defacing ancient relics) and some less obvious (never use your left hand to touch other people in India, or give a handkerchief to anyone in Italy).

And of course there are some which might raise a chuckle or two: Don’t pick your nose in public, don’t look dirty in public places, don’t eat a whole piece of bread in one mouthful or

slurp noodles noisily inside an aircraft.

Manners maketh the man, so there’s no doubting these rules need to be adhered to, and for most of us they will just seem like common sense. Visiting tourists can make a big impression on the locals and I can bet that cleaners at Buckingham Palace won’t take too kindly to having noodle soup splashed all over their carpets.

But I hope this doesn’t herald the start of a one-way ticket to soulless group travel, where it becomes the norm to be shepherded around sites, bunched together only with your fellow countrymen, and feeling like straying off the beaten track is tantamount to burning your host’s national flag. “You can’t leave the tour bus here!” they’ll shout. “We haven’t been given clearance by the locals.”

Part of the magic of travel (at the risk of sounding like a hippy backpacker after six months touring Thailand without a change of clothes) is to interact, and to be independent.

China’s still relatively nascent foreign travel culture is in danger of being sterilized before it finds its wings. From where I’m sitting, it looks like the European tourist board has made “uncultured” visitors from China seem rather unwelcome. Quirks, foibles and oddities impart character, and witnessing the other side – as both host and guest – is something I’ve always found exciting. The message seems to be: Remain invisible abroad, look but don’t touch, leave only footprints, take only photos. Given the rich experiences I’ve gained from travel, I feel I owe it to the places I’ve visited to return the favor and be an understanding host, regardless of any inadvertent faux-pas, misbehavior, or seemingly ill-mannered interchange.

My train to Hong Kong pulls into the station, and I take my place at the back of the horrendously long immigration queue. The numbers of travelers aren’t likely to be falling anytime soon, but surely we can spread it out over the year a bit?

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Cultural listings

Cinema

Never-ending Love Songs Taboo romantic relationships are a typical theme in a style of Chinese folk music performance known as errentai, banned during the Cultural Revolution (1966 – 1976) despite its popularity in northwest China near the Mongolian border. Hao Jie, a young Chinese film director in his early 30s, revives the theme in his latest work The Love Songs of Tiedan. Depicting the protagonist Tiedan’s tangled love story with Mei Jie and her three daughters, accompanied by performances of errentai, the movie has been called one of the boldest and most ambitious works of the year.

Music

Book

World Music Fever

Love in the 1980s

While the booming number of music festivals in China are becoming larger and more homogenous, some are looking to distinguish themselves with a new trend for world music. Snow Mountain Music Festival, one of the earliest music festivals in China, held at the foot of Snow Mountain in Yunnan Province, presented more than 10 world music bands from both home and abroad over two days in October. In Beijing, the MOMA Post Mountain Music-Art Festival also brought in a dozen world music artists for a month-long program of performances. Featuring sounds that ran the gamut of world folk styles, these performances were a breath of fresh air to China’s live music market, and an inspiration to industry insiders.

By Yefu

Exhibition

Great Charm of Silent Mountains Born in Zhejiang Province in 1892, Long Chin-san was one of the first photojournalists in China. However, he didn’t limit his work to realistic journalistic photography. After working in the field for a decade, he perfected a composition method at the end of the 1930s that allowed him to combine multiple images in the darkroom. The results were photographs that incorporated the methodology of traditional Chinese ink-and-wash painting, creating a synthesis of Chinese aesthetic and western photographic techniques. This October, 100 of Long’s some ten thousand works were displayed in the National Art Museum of China, their subject matter spanning marvelous landscapes, stunning portraits and innovative conceptual photography.

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What was love like in the first decade of Reform and Opening-up, when Chinese people were all of a sudden released from severe economic and political control? Yefu, now in his 50s, looks back on this special period through a fictional love story. A former policeman and a poet, Yefu was imprisoned for six years due to his involvement in the Tiananmen incident in 1989. After his release, he continued writing while making a living as a bookseller in Beijing. In 2010, he became the first mainland writer to win the Taipei International Book Exhibition Prize, with his essay collection Mother on the River, a private history and portraits of his family members and friends, many of whom suffered from political persecution after 1949. Critics say that Yefu’s writing displays a traditionally Chinese intellectual spirit and style, while remaining sharply reflective of the zeitgeist.

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Commentary

A new world needs a new world order China is trying to expand its global influence by building new platforms rather than challenging existing ones

By Wang Zhengxu

C

hina’s concentrated diplomatic maneuvers in recent its own world order. months have led some domestic observers to claim that This is not a retreat from existing institutions – a BRICS bank China has formulated a “grand global strategy.” What this would be no challenge to the supremacy of the World Bank or the strategy might be, however, remains anyone’s guess. What experts IMF, but would most likely simply smooth trade relations between do seem to agree upon is that China has no plans to overthrow the world’s fastest-growing economies. An Asian infrastructure dethe “global liberal order” – a state of velopment bank would similarly affairs that benefits its own interests pose little threat to the already wellReforms always lag behind more than the alternatives. established Asian Development While basking in greater accepBank, it would simply allow counthe situation on the ground, tance of its economic primacy, Beitries in the region better access to as former top dogs cling on jing is visibly unhappy to continue neighboring economies. to power while up-and-comers to be sidelined politically. In recent China may have based this struggle to find a voice and an years, there have been attempts to renew strategy on its experiments international identity distribute power with the existing inin domestic reform. When China ternational framework to reflect the launched its market reform policies changing dynamics of global geopolitics, particularly the relative in the 1980s and 90s, it did not attempt the same kind of “shock decline of Europe and the US, and the rise of emerging economies. therapy” privatization seen in the former Soviet Union. Instead, it Greater voting power at the IMF, and the growing importance chose to create a new private sector by allowing access to non-State of the G20 are two examples of the world’s superpowers yielding capital to prosper, while largely keeping the State sector under govgreater say to emerging economies. ernment control.

However, in real terms, such reforms always lag behind the situaWhile the private sector grows, it enlarges the overall economy, tion on the ground, as former top dogs cling on to power while up- and, in theory, forces the State-owned sector to be more competiand-comers struggle to find a voice and an international identity. tive. In this way, the risk to existing interests is minimized, allowing Since assuming power, China’s new leadership seems to have the goverment greater control over further economic reform. adopted a new strategy of building new platforms rather than inIn its global strategy, China seeks similarly to reshape the existing corporating itself more fully into existing ones. During the BRICS order in its favor by establishing global institutions with its own insummit on March 27, China proposed to establish the first BRICS terests at heart. In 1996, China, along with Russia and the Central development bank. On a state visit to Indonesia October 2, Presi- Asian republics, founded the Shanghai Cooperation Organization, dent Xi Jinping proposed to set up an Asian infrastructure invest- and by 2020, China plans to establish the China-ASEAN free trade ment bank. zone.

Setting aside the massive political, economic and bureaucratic China’s leaders continue to propose similar organizations in the hurdles to establishing such institutions, simply proposing such ini- hope that they will allow the country to play a leading role in Asia tiatives is suggestive of a new, incremental, global strategy. Instead and the world. of seeking to change the balance of power within existing international mechanisms, most of which it likely sees as irrevocably domi- (The author is Associate Professor of Contemporary Chinese Studies and nated by either the US or the EU, China has resorted to building Politics at the University of Nottingham, UK)

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