December 2015 by China Newsweek Corporation

INTERNATIONAL

Past Pacifism: Japan's Reinterpreted Constitution

SOCIETY

Shattered Memories: China's Alzheimer's Time Bomb

$4.99 www.newschinamag.com

Trim the Troops: PLA Demobilization Program

Volume No. 088 December 2015

POLITICS

EDITORIAL

Published by China Newsweek Corporation Publisher: Zhang Xinxin Executive Director: Zhang Xinxin Editor-in-Chief: Wang Xiaohui Editorial Office Managing Editor: Zheng Zhonghai Advisor: Liu Dizhong Senior Editor: Ruan Yulin Copy Editors: Jack Smith, Brittney Wong Lead Writers: Yu Xiaodong, Li Jia Editors: Wang Yan, Yuan Ye, Xie Ying, Du Guodong 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 Publishing and Development Office China Newsweek Corporation President: Wang Xiaohui Chief Executive: Fred Teng Tel: 1-212-481-2510 Fax: 1-212-481-2503 Address: 820 2nd Ave, 3B-C, New York, NY 10017, USA Email: readers@newschinamag.com Toronto Office Director: Xu Chang'an 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, Deng Min Washington Office: Zhang Weiran, Diao Haiyang Los Angeles Office: Mao Jianjun San Francisco Office: Liu Dan Houston Office: Wang Huan London Office: Zhou Zhaojun Tokyo Office: Wang Jian Paris Office: Long Jianwu Bangkok Office: Yu Xianlun Kuala Lumpur Office: Zhao Shengyu Moscow Office: Huang Xiujun Manila Office: Zhang Ming Berlin Office: Huang Shuanghong Sydney Office: Zhu Daqiang Brussels Office: Shen Chen Astana Office: Wen Longjie Rio de Janeiro Office: Mo Chengxiong Johannesburg Office: Song Fangchan Jakarta Office: Gu Shihong Kathmandu Office: Fu Yongkang Legal Advisor: Allen Wu ISSN 1943-1902

CN11-5826/G2

NEWSCHINA I December 2015

China needs to speed up its own free trade initiative to counter the TPP

n October 5, it was announced that 12 ramifications of adopting the rules enacted by the countries, led by the US, had completed TPP, so that China can either adopt these rules – negotiations on the Trans-Pacific Part- even going so far as to join the TPP if experimentanership (TPP), with all parties tion proves such a move to be agreeing to the conditions of in China’s interests – or take the pact, which include the free measures to minimize the new Two years after the flow of personnel and capital, scheme’s establishment, pact’s impact on Chinese trade. protection of intellectual propHowever, two years after the progress made in the erty rights, and improvement scheme’s establishment, progfree trade zones has in the business environment. ress made in the free trade zones been limited. The agreement also impacts has been limited. Fiscal reform previously untouched areas, is a case in point – the SFTZ including labor and environwas originally designed to adopt mental protection, and restrica liberal financial policy to minitions on preferential policies mize government regulation. In for state-owned enterprises. The progress made on fact, concerns over financial instability have delayed the TPP, which some have dubbed an “economic the enaction of these reforms. Similarly, tax reform NATO” that will serve to undermine Chinese in the SFTZ has also stagnated, largely resulting influence in international trade, has caused alarm from objections raised by local governments loath to within China. lose revenue. Finally, the goal of establishment of a To counter the potential influence of the TPP, modern governance system in the FTZs still seems China has been pushing for the development of a long way off, as there appear to be significant conbilateral free-trade pacts with several countries, flicts of interest among various government departincluding South Korea, Australia, Singapore and ments and agencies with a stake in such reform. New Zealand, all of which are now signatories to As major progress has been made in the TPP, the TPP. Besides these countermeasures, China has the Chinese government must step up its efforts in also launched its “free trade zone” (FTZ) initia- pushing forward its FTZ initiative. As the initiative tive, a scheme which began in 2013. Establishing serves as a kind of “stress test” for the impact of the its first FTZ in Shanghai (the SFTZ), the central TPP on China, prolonged delay in implementing government approved the establishment of another reforms will cause China to miss its window of op12 free trade zones last year. portunity to gain firsthand experience in this field. Different from earlier projects such as the Special As international competition over the establishEconomic Zones, where the government provides ment of trade regimes has become strategic, China favorable trade policies, the SFTZ is designed to must become more audacious in launching its follow the model of free ports such as Hong Kong policy experiments. This is not only a matter of and Singapore by adopting an entirely different whether China can remain competitive in intergovernance structure, including the enforcement of national trade negotiations. It will also be key in financial, taxation and administrative policies. The determining whether China can deliver its reform purpose of the initiative is to help Chinese leaders agenda and create new momentum in its longbetter understand the possible economic and social term economic growth. 

Contents

aLL SMILES Despite the pomp, Chinese President Xi Jinping’s first

P16

Editorial

politics

10 14

Military Downsizing: Fewer, Faster, Stronger Foreign Investment: Going Negative

Cover Story

society

01 China needs to speed up its own free trade initiative to counter the TPP

P56

16 China-US Relations: Cooperative Competition/One Song, Two Tunes

26 30

China’s Homeowner Committees: Trouble at Home Odor Testers: Nasal Officers

special report

P26

32 Alzheimer’s in China: Mounting Threat

NEWSCHINA I December 2015

Photo by CFP

state visit to the US produced fewer concrete results than many have expected. That may have been precisely what was intended - by both sides

Contents

P48

P60

P30 international

36 Japan’s Constitutional Reinterpretation: Eyes on the East economy

40 44

Commentary : Down to Business Virtual Reality: Seeing is Believing

visual REPORT

OUTSIDE IN

60 Supersize Star

64 Wild Hainan: Shelling Out Commentary

72 Local governments’ hunger for land threatens sustainable development

environment

48 Carbon Trading: Trade Off advertorial

52 Fair Growth: Hardware expo boosts industrial cluster

culture

54 56

Jia Zhangke: “Love is Like Tapas” Laibach in Pyongyang: Rocking the Boat

04 MEDIA FOCUS 05 What They Say 06 NEWS BRIEF 08 Netizen Watch 46 China by numbers 66 real chinese 67 Flavor of the Month 68 ESSAY 70 CULTURAL LISTINGS

P44 NEWSCHINA I December 2015

NewsChina, Chinese Edition

Economy & Nation Weekly

October 19, 2015

September 23, 2015

Nobel Prize Fever

Oil and Gas Reform

Chinese scientist Tu Youyou won the 2015 Nobel Prize in Physiology or Medicine for her work on the discovery of artemisinin, a substance now used in anti-malarial therapy. Tu is the first Chinese national to win this international honor in the sciences. Her research drew inspiration from a 1,600-year-old Chinese medical text and developed substantially as part of a secret State project in the 1960s. After testing artemisinin successfully on mice and monkeys, Tu became one of the first human test subjects. Now the substance is used in conjunction with other medicines to fight malaria all over the world. With no doctoral degree, overseas study experience or academician status – China’s highest honor for academics – Tu’s journey to a Nobel win serves as a perfect examination of China’s scientific research system at a time of rapid social transformation. Determined educators, with both conscience and capability, are required to promote the country’s ambitions for further innovation and reform. Minsheng Weekly September 24, 2015

Organ Shortage China unveiled its first national guidelines on organ donation in late August, detailing the ethics involved, the standards used to certify death and the technical regulations governing the extraction and usage of human organs. Since the country initiated a voluntary organ donation trial program in 2010 and implemented it nationwide in 2013, China has registered 4,737 organ donors and seen a total of 12,748 major organs donated, making it the country with the most organ donations in Asia. As of January 1 of this year, China banned the use of organs taken from executed prisoners, making voluntary donations the only legitimate source. From that date through August 19, 1,590 donors gave over 4,000 major organs, nearly matching the total given in 2014. Despite this growth in donations, China is suffering a dire shortage of donor organs, with 300,000 patients needing transplants every year. In addition, China lacks qualified hospitals and doctors that can conduct these surgical procedures, and the financial costs remain prohibitively high.

In 1998, China embarked on its first round of massive reform targeting the oil and gas industry with an emphasis on corporate break-ups and mergers in order to draw a clear line between the functions of the government and enterprises, as well as reduce smuggling and the misuse of mineral resources. The oil and gas industry has since witnessed massive change, and a new round of reform, which is expected to be implemented by the end of this year, is currently open to public comment. Highlights of the new reform package are the relaxation of controls over market entry in each link of the entire industrial chain, and efforts to break up the monopoly of the three giant State-owned enterprises that dominate the industry, something that has drawn growing public criticism over the years. In addition, reforms of oil and gas pipeline networks are likely to be a priority on the government’s upcoming agenda.

Caijing September 28, 2015

Generic Drugs Concern Generic drugs dominate China’s pharmaceuticals market, accounting for over 80 percent of drugs sold. Yet industry insiders have estimated that the medicinal effects of 70 percent of domestic generic drugs are inferior to the originals because of inadequate research and poor quality control. The chemical components of the original patented drugs and their substitutes are the same, but whether or not the generic versions can be effectively absorbed by the body is a different story. The efficacy is also dependent on supplementary materials and the production process, a core asset of any pharmaceutical enterprise. The low evaluation standards of China’s drug administrations is mainly to blame, allowing many enterprises that are incapable of producing quality generic drugs to receive qualification certificates.

Vista October 10, 2015

China’s ‘Mona Lisa’ Beijing’s Palace Museum marked its 90th anniversary on October 10. A highlight of the celebration was the display of the painting “Along the River During the Qingming Festival,” created by Zhang Zeduan during the Northern Song Dynasty (960-1127). It is one of the most famous masterpieces in Chinese art history, widely referred to as China’s “Mona Lisa.” Since the first day it opened to public viewing, the painting attracted a vast number of visitors, many of whom waited in line for five or six hours for their five-minute look. The exhibition marks the first time in nearly a decade that the entire 5.28-meter scroll painting is on display. It became part of the museum’s permanent collection in 1957 after passing through the hands of many imperial and private collectors and surviving the turmoil of centuries of war. NEWSCHINA I December 2015

Illustration by Wu Shangwen

“[People] join online arguments to drive their own interests, believing everything is either black or white,‘us’ or ’them,’victory or failure. They make it impossible to placidly give opinions, let alone reach a consensus.” Shi Po, a senior journalist with South Reviews magazine, on China’s online commentators.

“We must stop categorizing our members as either‘good comrades’or‘prisoners.’” Wang Qishan, director of the Party’s Central Commission

for Discipline Inspection, on improving inner-Party relations, demanding more detailed disciplinary rules and punishments.

“Cut out that kind of narrow nationalism where you get upset about anything related to Japan. Respect other people’s choices, and the economic reasons behind why they wanted to visit Japan. At the very least, we have a lot to learn from Japan when it comes to tourism management.” Commentator Cao Lin, on critics of the flood of Chinese tourists who traveled to Japan during China’s National Day holiday (October 1-7).

“It will be time for me to quit when I have to apologize or my program is taken off the air for being right.” CCTV anchor Bai Yansong, predicting he will not retire from the State broadcaster under typical circumstances.

“The Great Wall needs comprehensive protection instead of letting certain regions do things their own way. Local governments have either abandoned the Great Wall to the wild or overcommercialized it.” Journalist Zhen Weijian, criticizing how some sections of the Great Wall have disappeared due to inadequate protection. NEWSCHINA I December 2015

“Playing the stock market is risky and requires expertise. You’re not qualified to play it unless you have four screens in front of you – you have to be able to watch each of the indexes.” Economist Fan Gang, triggering controversy by suggesting retail investors bow out of the stock market. “Government officials or employees still face many obstacles when changing careers. I hope that three to five years from now, when someone like me leaves the government to join a private organization, it will no longer be news.” Mei Yonghong, former mayor of Jining, Shandong Province, on leaving his government position to work at genome sequencing center BGI. “This bizarre profession of‘mistress persuaders’is unreasonable and illegal.When people in such a profession can openly do business, it is a reflection on some level of a warped social culture.” Psychologist Tang Yinghong, on emerging demand for people who use deception and even threats of violence to “persuade” mistresses to disappear. “If there ever comes a day when the number of dads choosing to stay at home is about the same as the number of stay-at-home moms, then I will believe everyone has actually chosen a lifestyle they want.” Columnist Hou Hongbin on China’s growing number of well-educated housewives, many of whom, she believes, stay at home only because of societal and familial pressure.

Top Story

Pricing System to be Reformed

The State Council issued China’s latest pricing reform program on October 15, pledging to loosen restrictions in competitive market sectors by 2017. Reforms will cover six fields: healthcare, transportation, energy, environmental protection, agricultural products and public welfare. They will aim to make the market, rather than the government, the dominant element in determining pricing. According to the Economic Daily, a newspaper under the State Council, China lifted pricing restrictions on around 60 goverment-managed products and services in the first half of 2015, with the number of fixedprice goods decreasing by 80 percent compared to that of 2011. Deng Yusong, deputy director of the Market Economy Institute of the Development Research Center under the State Council, told media that the reforms will attract more participation and competition into the market, forcing deeper marketization in relevant industries.

Healthcare: Insurers will negotiate with healthcare providers to set prices for relevant services.

Agricultural Products: A global agriculture database will be established to better analyze both domestic and international agricultural markets.

Environmental Protection: Charges for waste disposal will be increased, and market forces will be employed to “guide enterprises to actively control their pollution.”

Transportation: The price of railroad passenger transport will be determined based on the speed and grade of the rails, with competitive sections opened up to the market.

Public Welfare: A new price management system for public welfare and services will be created.

Oil: Restrictions on the use of imported oil will be gradually loosened.

Electricity: Profit margins of electricity grids will be capped, and the market gradually allowed to determine electricity pricing, starting with negotiations between providers and a set list of “big users,” a category set to be broadened over time.

Science

Chinese Vaccine Approved for Overseas Clinical Trials A Chinese vaccine for the ebola virus has obtained a permit from the Sierra Leonean government allowing clinical trials, the first time that a Chinese-engineered vaccine has been approved for testing by a foreign government. Led by a biological research team under the People’s Liberation Army, development of the vaccine began in 2006, and a major breakthrough came in 2014 during the Ebola epidemic in West Africa. Before exporting the vaccine, the research team successively conducted clinical trials among Chinese and African populations in China and published the results in The Lancet. At an Ebola immunology conference held by the World Health Organization this March, Chinese research team members presented their vaccine which, they claimed, was characterized by “strong pertinence, long stability and good safety.” Phase One of the clinical trial in Sierra Leone has just been completed.

NEWSCHINA I December 2015

Culture

Warship Wreckage Discovered

Nanjing Archives Given UNESCO Listing

An underwater archeology team under China’s State Administration of Cultural Heritage recently revealed that a shipwreck they discovered last year was a warship sunk during the first Sino-Japanese War (1894-1895), when the Qing Dynasty navy was almost annihilated by the Japanese, and China lost control of its vassal state, Korea. Direct proof of the vessel’s origins, according to the team, was a porcelain plate salvaged from the wreck which, after restoration, was shown to be stamped with the characters Zhiyuan – known to be the name of a Qing warship. The wreck was discovered at a depth of 24 meters in the Huanghai Sea near Dandong port, Liaoning Province, where the Beiyang Fleet, the Qing’s most advanced naval force, which was established in 1888, was sunk by cutting-edge Japanese naval vessels. Besides the plate, archeologists also salvaged over 100 other articles, including gun barrels, shot and an imperial seal allegedly belonging to the ship’s captain, Deng Shichang, who, Qing historians claimed, used the Zhiyuan to ram a Japanese ship during the battle. Experts said that the discovery would be a boost to research into China’s unsuccessful, early efforts to modernize its navy.

Policy

Ride-sharing Regulation China’s Ministry of Transport (MOT) is soliciting public opinion on new draft regulations on online ridehailing and -sharing apps which, if approved, would prevent any private car owner from operating as a taxi via an online platform without a license. China’s online ride-hailing industry has surged since localized apps like Didi and Uber eclipsed traditional taxi services in the country, the drivers of which have higher operational costs and pay high management fees to their companies, all of which operate under license from the government. The new regulations, according to the MOT, aim to “better combine the online and offline taxi businesses” and “realize fairer competition between the two models.” Analysts have accused regulators of attempting to curb the development of online ride-hailing apps. MOT officials have countered by claiming that “most countries” limit the number of taxis and the price of taxi fares, and that the regulation has received “majority support.”

Business

Alibaba’s Big Buyout Alibaba, China’s biggest online retail platform, announced on October 16 that the company plans to purchase Youku Tudou, a YouTube equivalent jointly formed by China’s two top video-sharing websites Youku and Tudou, for around US$4.5 billion. The move has been viewed as part of Alibaba’s grand strategy to further expand its online services and compete more effectively with market rivals Tencent and Baidu, both of which so far dominate China’s online video-sharing industry. Alibaba has cooperated closely with Youku Tudou, which reportedly has some 500 million users, in advertising and data collection since becoming a major stakeholder in the company in May 2014. By the end of June 2015, Alibaba held around an 18 percent share of Youku Tudou. If Youku Tudou executives accept Alibaba’s offer, it will become a wholly owned subsidiary of China’s biggest e-retailer. Youku Tudou’s CEO Gu Yongqiang and several other major shareholders have expressed support for the Alibaba buyout. NEWSCHINA I December 2015

Over Japanese protests, the United Nations Educational, Scientific and Cultural Organization (UNESCO) published its 2015 Memory of the World Register on October 9, which included Chinese archives dealing with the Rape of Nanking, also known as the Nanjing Massacre. According to UNESCO, the 183-chapter archive is divided into three parts – written and visual records of atrocities carried out by the Imperial Japanese Army against civilians in China’s former capital Nanjing from 1937 to 1938, court records of the investigation and trial of Japanese war criminals between 1945 and 1947, and other relevant documents provided by Chinese judicial organs from 1952 to 1956. The Japanese foreign ministry expressed “regret” at the listing, criticizing China for “using the UNESCO program for political ends.” Japanese media sources have reported that Japanese scholars will “verify the authenticity” of the archives in the coming weeks. The Chinese foreign ministry responded that the Nanjing Massacre should be “engraved in the world’s memory.”

Photos by Xinhua and IC

History

Ludicrous On October 6 in a Kunming airport, a middle-aged woman (known as a dama in Chinese) was found to have inserted an 8-centimeter-long knife into her hair bun in a bid to sneak it onto an airplane. She told customs officials she wanted to peel fruit while waiting for her flight, leading to a raft of comments from netizens admiring the boldness of China’s dama population.

Poll the People Yin Weimin, China’s social security minister, recently claimed that China has one of the earliest retirement ages in the world, with the average citizen able to retire by 55, 10 years before most of their global peers. Domestic media stated that the Ministry of Human Resources and Social Security has already finished a draft scheme to incrementally raise the national retirement age. Do you think it’s too early to retire at 55?

Outrageous

No. 57.5% 8,012

Qingdao, a port city in Shandong Province popular with tourists, came under fierce fire during the National Day holidays after a visitor claimed that his family ordered a plate of shrimp at a local barbecue stand for 38 yuan (US$6), but when they paid the bill, they were told that they had been quoted the price of each individual shrimp. After a public outcry, the local pricing bureau of Qingdao fined the seller 90,000 yuan (US$14,286) for “arbitrary pricing.” Netizens joked that barber shops in Qingdao might start charging by the hair.

Marvelous

Chen Jinxiang, an agricultural technician in Shanghai, earned nationwide praise for creating a map of China using different colored strains of rice. Chen told media that he has planted over 500 varieties of rice in his 30-mu (2-hectare) plot of land, and that his crops come in 30 different colors. He formed his “map” by using 500 sticks and ropes to delineate the shape.

Inexplicable

Several female flight attendants from Kunming Airlines recently revealed that their company shut new flight attendants into overhead luggage racks as a form of “team building.” Despite frequent complaints, the airline defended the activity as a “traditional game” to encourage new staff to “integrate” into the company, and refused to investigate the matter further. Netizens, meanwhile, accused the airline of institutional sexism and of disregarding the safety of its employees.

It depends on the profession. 33.2% 4,624 Yes. 9.3% 1,300 Source: views.news.qq.com

Most Circulated Post Retweeted 78,940 times by October 15 On September 18, 1931, Japan occupied the city of Shenyang and went on to annex Manchuria, beginning the country’s World War II invasion of China. Party mouthpiece People’s Daily posted the following paragraph commemorating the 84th anniversary of the fall of Shenyang. “In the 14 years that followed (1931-1945), we lost vast areas of land and around 35 million [Chinese] nationals lost their lives. This bloody history has warned the Chinese that only a strong country can protect itself from aggression. Please retweet this post to remember this part of history and the importance of developing our country.”

NEWSCHINA I December 2015

WHO’S

Top Five Search Queries On

HOT? WHO’S NOT?

over the week ending October 15 2015 Nobel Prize in Physiology or Medicine 599,985

Chinese medical researcher Tu Youyou won the 2015 Nobel Prize in Physiology or Medicine for her work extracting an anti-malarial compound from Artemisia apiacea, a herb originally used in traditional Chinese medicine.

Alleged Japanese Spies 569,682

Japanese media revealed on October 10 that China had detained two of its citizens on charges of espionage.

Kung Fu Grandpa

Xi Jinping Visits Britain 155,496

Chinese President Xi Jinping made an official visit to Great Britain from October 19 to 23.

Over 220,000 Chinese people have applied to take the 2016 national exam for government employees.

World’s Second-Richest Country 33,266

According to a report by Credit Suisse, China leapfrogged Japan to become the world’s second-richest country, with total assets of US$22.8 trillion.

Top Blogger Profile Guo Jingming Followers: 39,239,017 by October 15 Teen fiction writer Guo Jingming recently filled his microblog with images of posters advertising the bigscreen adaptation of his fantasy novel Legend of Ravaging Dynasties. The movie, which some critics have already accused of being a thinly veiled Game of Thrones ripoff, tells of struggles between seven kings on a fictional continent, and features an all-star cast stacked with pop stars. Known for his ability to connect with his young fanbase, Guo is well known for writing about adolescence, and his works have been slammed by many literary critics for their commercialism and sentimentality. His recent movie Tiny Times was singled out in particular as a paean to consumerism that reflected the decaying moral values of Chinese youth. However, audiences flocked to see it, and the movie grossed millions of dollars at the domestic box office. Eschewing social and political issues, Guo’s microblog is focused squarely on the entertainment industry, specifically the promotion of his own work, something firmly in-step with this self-described “businessman who writes.” NEWSCHINA I December 2015

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

National Exam for Government Employees 115,465

A thief in Chongqing was knocked out by a 95-year-old man on a bus after he tried to steal the latter’s wallet. The old man told the media that he practices qigong, a form of Chinese kung fu, every day, and expressed concern for the thief’s health.

Vain Vandals Three men found themselves under fire after standing on three statues commemorating three firefighters killed in the line of duty in order to snap a group photo. Police have begun a campaign to identify the men and secure a public apology.

Momsitter A three-year-old girl in Henan Province has had to look after her divorced mother alone after the latter was severely injured in a hit-and-run. Netizens began a campaign to seek donations for the girl after images of her caring for her paralyzed mother appeared online.

Brutish Boyfriend In order to please his girlfriend, a man in a county in the Guangxi Zhuang Autonomous Region allegedly torched a brand-new Buick valued at 270,000 yuan (US$42,857) that he claimed belonged to his girlfriend’s ex. He told police he wanted to punish the man for abandoning his girlfriend.

politics

Military Downsizing

Fewer, Faster, Stronger

President Xi Jinping has announced that China will downsize its total number of military personnel in order to streamline and modernize its armed forces. What does that mean for the Peopleâ&#x20AC;&#x2122;s Liberation Army? Photo by IC

By Xi Zhigang and Xie Ying

NEWSCHINA I December 2015

“

The People’s Liberation Army of China [PLA] is the people’s army. All its officers, men and women must bear in mind their responsibility of serving the people wholeheartedly, faithfully fulfill[ing] the sacred duty of protecting the nation’s security and people’s well-being, and carry[ing] out the noble mission of upholding world peace,” announced Chinese President Xi Jinping during the September 3 parade in Beijing commemorating the 70th anniversary of the end of World War II. “Here, I announce that China will cut the number of its troops by 300,000.” Following Xi’s surprise public announcement, China’s Ministry of National Defense (MoND) convened a press conference, declaring that the promised “disarmament” would be completed by the end of 2017. Spokesman Yang Yujun elaborated on the details of the project, stating that cuts would principally hit old and obsolete equipment, non-combatant personnel and administrative positions. While this announcement was sudden, downsizing the total number of China’s military personnel is widely believed to be a key aim of ongoing military reforms agreed upon, according to State media, by the top decision-makers in the Central Military Commission of the Central Committee of the Communist Party of China, a body chaired by Xi. While details of the program remain unknown, its content and ultimate effect upon China’s military has provoked widespread speculation.

Significant

The People’s Republic of China has already conducted 10 rounds of military downsizing since its founding in 1949, shrinking the total number of PLA personnel from 6.27 million to today’s 2.3 million. The 2015 project, as emphasized by the MoND, aims to further

NEWSCHINA I December 2015

“strengthen the army” by eliminating waste. “The [planned] demobilization shows China’s strong determination to maintain world peace... But the current security environment has led to dramatic changes, with territorial disputes and information wars on the rise,” Chen Zhou, an expert in military strategy employed by the PLA Academy of Military Sciences, told military mouthpiece PLA Daily. “We have to concentrate more effort on [military] quality,” he continued. “Since the 1990s, the PLA has been shifting from a labor-intensive to a tech-intensive [force]. The [2015] disarmament has the purpose of adjusting the army to allow for greater multitasking.” “This disarmament will not weaken our military capacity, but rather enhance it by renewing and upgrading weaponry,” a PLA officer, speaking on condition of anonymity, told NewsChina. “Numbers in some [military] branches will not be reduced, but will in fact increase.” Such official reassurances prove what analysts have generally agreed upon – that China’s “disarmament” is in fact a means to “trade personnel for firepower,” and divert more funding towards R&D and new weapons technology. “Judging by previous demobilizations, the 2015 disarmament is sure to [allow China to] better respond to the international situation and follow the high-tech trend,” commented retired PLA colonel Zhou Antao on his microblog.

Optimization

China’s ground forces, still by far the most heavily populated branch of the PLA, look set to bear the brunt of the cuts. According to China’s 2013 Military Strategy, a white paper on national defense issued annually by the MoND, China currently has 235,000 naval personnel and 398,000 air personnel

on active duty. The PLA ground forces’ mobile operational units, meanwhile, excluding border defense units, garrison units and support staff, number around 850,000, indicating a possible 1.6 million personnel assigned to the PLA ground forces, nearly four times the number of personnel currently in the air force and nearly seven times the number of Chinese naval personnel. By contrast, the land/air/sea service ratio in the US military is reportedly 4:3:3. “Given China’s vast territory, huge population and number of international borders, we cannot maintain a ground force [ratio] as small as that of the US. I think a more rational ratio would be [2:1:1],” Xu Guangyu, a retired PLA major general now working for the China Arms Control and Disarmament Association, said in an interview with news web portal zjol.com.cn. Were Xu’s suggested ratio to be adopted, China would retain a million personnel in its ground forces, and half a million in the air force and navy, respectively. As China’s principal military challenges are currently disputes over maritime territory, increasing the size and efficacy of its navy and air force, possibly at the expense of a vast ground force arrayed against a very unlikely overland invasion from a neighboring state, seems inevitable. China’s 2015 white paper on military strategy highlighted the “provocations” of neighboring countries over maritime interests and warned against “some foreign nations’” aerial reconnaissance missions over what China claims as sovereign territory. Our anonymous military source also stressed the importance of upgrading China’s ability to fight in cyberspace, something which, he said, “the current military structure and hierarchy have not adapted to.” Xu Guangyu has already revealed that the PLA also plans to overhaul its unwieldy command structure by cutting unnecessary per-

politics

sonnel loose. “The current command structure has a large head and stumpy legs, slowing down military response times – which would have fatal consequences in wartime,” said Xu. “I suggest the PLA sets up a cross-service command center that could coordinate actions across all branches, just as the US military does.” Xu’s comments led to speculation that senior military figures might find themselves redundant or relocated to the navy or air force.

Slimming

Along with China’s combat force, or at least its ground forces, cuts to the number of support personnel are also widely anticipated. Perhaps most commonly placed in the firing line by commentators is the PLA’s lavish song-and-dance troupe, which has been slammed again and again for the frequent involvement of its members in military sex scandals, with many other members commanding huge fees for commercial performances. According to media reports, there are about 16 song-and-dance troupes funded by the PLA budget, responsible for a total of 2,000 “art soldiers” – professional performers with official military ranks whose sole function is to serve as delivery vehicles for PLA propaganda. Including those working in production for China’s military propaganda organs, such as the PLA’s film studios, the PLA’s “art division” is bankrolling some 10,000 personnel, increasingly seen as a waste of money, particularly in peacetime. “Unlike in wartime, when art soldiers come to the battlefield to encourage the troops, today’s art soldiers enjoy status similar to that of regular soldiers simply for performing, which has bred public discontent,” Zhou Peng’an, a member of the China Democratic League, wrote on his blog at sina.com.cn. “Will China

follow the example of South Korea and disband its controversial art troupe?” He asked after South Korea eliminated its own expensive performing arts division in 2013 under mounting public pressure. Retired PLA major general Luo Yuan told Chinese media in 2013 that “it is unfair that some art troupe members enjoy the kind of special treatment usually reserved for a battalion commander, while an ordinary soldier can’t even become a platoon leader without years of hard work.” Although other observers, such as Han Xudong, a professor with China’s National Defense University, believe that the country’s art troupe serves as a vital part of the army even during peacetime, calls to further downsize or even disband the art troupe have grown in the wake of Xi’s September 3 announcement. During his interview with zjol.com.cn, Xu Guangyu voiced support for cutting down the PLA art troupe, arguing that, if necessary, the PLA could “outsource entertainment services.”

Difficulties

No matter where the Central Military Commission’s axe falls, some are calling attention to the fact that at least 300,000 families currently dependent on the military for their livelihoods will be affected by the cuts. When Deng Xiaoping announced that China’s standing army would be cut by one million personnel in 1985, he is reported to have said: “It will offend many people. Let me do it.” Although the 2015 cuts are not as broad as those made in 1985, they take place against a far more complicated backdrop combining military and industrial special interests, intractable opinions in sections of the leadership and overlapping jurisdictions in both military and civilian departments. They will also take place under scrutiny from a vocal

community of opinionated observers on social media. Some international media sources, such as Reuters, have reported that anxiety spread among soldiers and officers due to the suddenness of Xi’s announcement. On September 21, the PLA Daily published a commentary, instructing soldiers and officers “not to be impacted by outside rumors and gossip,” and calling on all military personnel to “submit to and engage in reform” for a “stronger army.” However, even the PLA Daily has acknowledged that any large-scale downsizing of China’s military, which is crisscrossed by a complex network of vested interests, carries “some risk.” According to relevant regulations, armed servicemen and women facing redundancy can choose to be transferred to a civilian industry either independently or with help from PLA personnel departments. How this process will happen in practice, and on such a large scale, however, remains unclear. While Xi’s rapid consolidation of power and “strongman” reputation, bolstered by the ongoing anti-corruption campaign, is expected to cow naysayers into silence, the PLA remains the military wing of the Party – not the civilian government – and thus any attempt to overhaul it will be challenging. Immediately after Xi’s declaration, all seven of China’s military regions and numerous personnel voiced public support for downsizing, giving public statements that they “will absolutely obey and fulfill their orders.” This speedy reaction, analysts claim, shows that Xi “holds military power tightly in his hands.” However, as details of the disarmament program and the broader bid to reform the PLA have yet to be published, it appears China’s military authorities are still discussing the minutiae of slimming down the world’s single largest military force. NEWSCHINA I December 2015

Mass Demobilization in the PLA April 1950: 5.5 million cut to 4 million. Less than a year after the end of the Chinese Civil War (1945-1949), total troop numbers were cut by 1.5 million. The program was suspended with the outbreak of the Korean War (1950-1953), during which China re-expanded its military to about 6.27 million personnel. 1952: From 6.27 million to 4 million. As the conflict in Korea wound down, China’s 1950 personnel reduction plan was resumed. August 1953 – December 1955: From 4 million to 3.2 million. 1957-1958: From 3.2 million to 2.4 million. 1975: During the Cultural Revolution, China’s military once again expanded to 6.1 million personnel by 1975, leading then CPC Central Military Commission to plan another reduction, a plan derailed by a campaign to oppose “rehabilitating the case for rightists.” 1980: 1975 plan to demobilize a large number of personnel was reinstated. 1982: Total number of military personnel cut to 4 million. 1985-1987: A further 1 million men and women were demobilized, reducing total personnel to 3 million. Meanwhile, the PLA launched a campaign to recruit more technical specialists and officers. 1997-1999: Personnel numbers reduced from 3 million to 2.5 million. 2003-2005: A further 200,000 personnel are demobilized, reducing the size of the military from 2.5 million to 2.3 million.

Changes in Chinese Military Size (in millions)

Annual Military Budgets of China and the US (2010-2015, in US$bn)

18000

17000

16000

15000

14000

13000

12000

11000

10000 Before

1950

1950 1951 1952 1955 1958 1975 1982 1987 1999 2005 2017

9000 8000 7000 6000 5000

US:

Military personnel: 1.43 million Total population: 316.7 million Percentage of population serving in military: 0.45%

Source: Business Insider (2014) NEWSCHINA I December 2015

China:

Military personnel: 2.3 million Total population: 1.35 billion Percentage of population serving in military: 0.17%

4000 3000 2000 1000 0

2010

2011

2012

2013

2014

2015

The US’s GDP

The US’s Military Budget

China’s GDP

China’s Military Budget

Note 1: 2015 GDP figures are predicted. Note 2: China figures are converted from yuan at a rate of 6.3:1. Note 3: US military budget data are for fiscal years from October 1 to the following September 30, which are approved by Congress.

politics

Foreign Investment

Going Negative

China has recently announced that in 2018 it will further open up to foreign investment by adopting a nationwide “negative list” that outlines restricted investment sectors while emphasizing that anything unlisted is fair game By Min Jie

embers of China’s Central Leading Group for Deepening Overall Reform, led by Chinese President Xi Jinping, announced on September 15 that the country will continue the exploration of a “negative list” foreign investment system and implement it across the country in 2018. This national scheme will build upon the four negative-list pilot programs already established in free trade zones in Shanghai, Tianjin, Guangdong and Fujian. A “negative list” names areas and sectors in which foreign investment is barred. Those not listed are fully accessible. Investors in these unlisted areas can obtain pre-entry national treatment (PENT), meaning that they will be accorded the same status and privileges of a domestic company before entering China. “Setting the timetable and road map for the implementation of a negative list is at once essential, feasible and urgent,” Bai Ming, of the International Trade and Economic Cooperation Research Institute under the Ministry of Commerce, told NewsChina in a recent interview. Part of that urgency stems from the ongoing Sino-US bilateral investment treaty (BIT) negotiations. Since China and the US agreed on a trade system involving PENT and a negative list in July 2013, both sides can now move on from debating the investment model to debating what has made it onto their respective lists.

Making the List

Previously, China had adopted a “positive list” model in its regulation of foreign investment. The country’s Catalog of Industries for Guiding Foreign Investment separated foreign investors into three categories: “encouraged,” “allowed,” and “limited and banned.” While utilizing this list, China granted post-entry national treatment to foreign investors, meaning foreign firms could operate on a level playing field with their domestic counterparts only after they were approved

to do business in China. BIT talks began in 2008 under then-presidents Hu Jintao and George W. Bush in order to deepen Sino-US economic ties. This June, during the 19th round of negotiations, both sides exchanged their respective negative lists for the first time. China wanted the US to make its restrictions clearer, while the US thought China’s negative list was too long, limiting too many areas for investment. Currently, a total of 77 countries have adopted this same model for foreign investment, including both PENT and negative lists in their systems. With this global backdrop, it has become necessary for China to nail down its negative list as soon as possible. “Indeed, the negative-list model China is adopting is not targeted toward any one country, but instead meets shared international requirements,” Shanghai University of Finance and Economics professor Chen Bo told our reporter. “It’s an agreement for a higher level of trade and investment.”

Pilot Projects

The Shanghai free trade zone, established in 2013, was the first place in China to use a negative-list model. Last year, a revised negative list reduced the number of industries restricted for foreign investment in Shanghai from 190 to 139. In mid-April of this year, an updated list shared by the four free trade zones had further shrunk that number to 122. Zhu Min, deputy director of the Shanghai free trade zone management committee, said that the negative-list model had forced government officials to learn more about international regulations while finding ways to help their own supervision measures to meet international requirements. “Although other countries’ negative lists may be shorter, they focus more on the service industry,” Zhu said. “Our government instead sets more restrictions on the manufacturing industry and poses rather lax regulations on the service industry, which results NEWSCHINA I December 2015

Foreign Direct Investment in China (August 2014 -September 2015) 30 25 20 15 10 5 0 -5 -10 -15

Aug’14

Sept’14 Oct’14

Nov’14

Dec’14

Jan’15

Feb’15 Mar’15

Apr’15

May’15

Jun’15

Jul’15

Aug’15

Sept’15

FDI in China (US$bn) Year-on-year change (%)

Source: Ministry of Commerce

in a certain lack of transparency.” “We need to winnow down our barriers from locking front gates to locking specific rooms to locking specific drawers,” Zhu continued. “For example, the newly revised negative list shows significant improvements on the restrictions towards financial sector investment; the original four ‘locked gates’ have become 14 ‘locked rooms.’ This doesn’t mean things are more restricted, rather it means regulations have become more mature and transparent.” This change has brought about visible results. According to Chen Bo, the Shanghai free trade zone attracted 526 new foreign investment projects with registered capital amounting to a total of US$10.7 billion in the two months after the new 2015 negative list was adopted in mid-April. This displayed a sharp contrast to the results after the 2013 negative list was adopted; in that same two-month period, the Shanghai zone only drew in 39 foreign investment projects. Before the first negative-list model went into place in 2013, it normally took a foreign enterprise some eight months to gain approval from 14 relevant government departments before it could settle in China. In 2014, after the negative list had already been implemented, the average time for a foreign enterprise to gain a local business license shrunk to seven working days. This year, with an updated negative list and more regulated management, the shortest recorded processing time was one business day.

Gradual Process

“Although the negative-list model has operated quite smoothly in the four pilot zones so far, its implementation on the national level still faces obstacles,” Chen Bo said. In Chen’s opinion, there are two major obstacles that merit concern. Firstly, the program’s scale would be expanding abruptly from

NEWSCHINA I December 2015

four free trade zones to the entire country. It is relatively easy to handle any problems that may arise in four demarcated areas, but if the government’s capacity to supervise doesn’t keep up with these national reforms, greater risks may appear. Secondly, while most industries have experienced the negative-list model through the four free trade zones, industries such as agriculture, animal husbandry and mining have never gone through this stress test. Thus, if a more inclusive nationwide negative list is put into place, it raises the question of whether or not these industries can manage a smooth transition. At the same time, “just because certain issues and problems never occurred in the free trade zone pilot programs doesn’t mean they won’t happen at the national level,” Chen said. He added that generally speaking, the free trade zones’ degree of openness should be higher than that of the country as a whole. “The key question in implementing a nationwide negative list is now no longer whether or not to do it, it’s when do we do it, how big should its scale be and how much room for adjustment should we allow.” Chen thinks China should reshape the investment regulation system and open its foreign investment restrictions gradually rather than all at once. Bai Ming told our reporter the national negative list will borrow from negative lists negotiated between China and other countries, but would not be a direct copy of any version. The fact that the Sino-US BIT talks have yet to conclude gives the establishment of the 2018 national negative list a degree of uncertainty. If the BIT negotiations wrap up before the national negativelist model is adopted, the national list will likely be nearly identical to that agreed upon by China and the US. Regardless of the timing, China must undergo thorough preparations before it adopts a negative list nationwide. One of the government’s biggest challenges lies in shifting its role from gatekeeper to supervisor. “Many government departments still adhere to their old mentality and cannot adapt to the new model in which resources are distributed through the ‘invisible hand of the market’ rather than the ‘visible hand of the government,’” Chen Bo said. He regards this as an opportunity for government reform. Another challenge is to improve and regulate certain laws governing industries, especially the service industry, to make them cater to the needs of the negative list. In the US, for example, restrictions on foreign investment are stipulated in various industrial laws and regulations, which provide a legal basis for the compilation of the negative list. In China, the negative list actually contradicts some existing legislation. “Some laws against the spirit of [the] negative list should be abolished or amended, while some industrial laws that have been long absent should be mapped out,” ran a China Daily editorial in June 2014. “Legislation should also be improved [regarding] national security checks on foreign investment. By doing these [things], the negative list can be built on [a] sound legal framework.”

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smiles over substance 16

NEWSCHINA I December 2015

Photo by Li Xueren/Xinhua

Chinese President Xi Jinping and his wife Peng Liyuan are received by US President Barack Obama and First Lady Michelle Obama at the White House on September 25, 2015

Despite a convivial public aspect, the top-level summit in September between Chinese President Xi Jinping and his US counterpart Barack Obama comes at a time of increased tension and competition between the two countries. With little progress on hot-button issues, and with both sides ultimately presenting their own version of events in Washington to their respective polities, NewsChina asks precisely what is meant by this â&#x20AC;&#x2DC;new normalâ&#x20AC;&#x2122; in Sino-US relations

NEWSCHINA I December 2015

cover story China-US Relations

Cooperative Competition

While the recent US-China summit appears to have temporarily arrested the downward spiral in relations between Washington and Beijing, the future of the Sino-US bilateral relationship remains replete with uncertainties By Yu Xiaodong

lthough it has been weeks since Chinese President Xi Jinping made his state visit to the US in late September 2015, his first in his capacity as China’s paramount leader, the significance (or insignificance) of the summit between Xi and his US counterpart Barack Obama continues to be the subject of media scrutiny in both countries. Indeed, disagreements between the world’s two largest economies have led many to reconsider the fundamental basis of the bilateral relationship. Ahead of Xi’s trip, Beijing appeared to have placed high hopes upon the visit, which was widely reported as a historic event comparable to the ground-breaking mission undertaken by the late Chinese leader Deng Xiaoping in 1979. Deng’s US trip, conducted 36 years ago at a time when China faced a litany of domestic and international challenges including a troubled economy and external threats from the former Soviet Union, served as a landmark event which marked the start of three decades of Sino-American cooperation. At the time, China accepted US leadership, and joined the US-led international community, unleashing a seismic overhaul of China’s preceding foreign and domestic policies.

‘New Chapter’

Now, after more than three decades of open relations, many underlying factors that shape the US-China relationship have changed beyond recognition. Not only has China emerged as the world’s second-largest economy, making the economic relationship between the two countries much more competitive than before, recent disagreements over various bilateral security issues have created a reshuffled diplomatic landscape in which China has moved closer to her former common enemy with the US – Russia. From a Chinese perspective, in the past, Beijing had to make concessions, either out of relative weakness or out of a need for what Beijing termed “a favorable international environment,” to maintain

its overall relationship with the US. Earlier state visits made by former Chinese leaders, including Jiang Zemin and his successor Hu Jintao, were often interpreted within China along these lines. Now, wielding newly obtained economic and political power, what Beijing views as a status quo that does not work in its favor has lost appeal to the leadership. “When the US is no longer capable of handling regional or global issues on its own, it creates a long-term disconnect between power and international order, which is unsustainable,” argued Qi Hao, an assistant research fellow at the Institute of American Studies of the Chinese Academy of Social Sciences, in a commentary published on thediplomat.com. “Both leaders should bear in mind that the new model needs to be built on a new balance of power and psychological expectations, rather than on unilateral concessions by one party,” he added. Such perceptions in China coincide with increasing concerns over both China’s development trajectory and its global ambitions. As disputes over sovereignty issues such as the South China Sea, repeated American accusations of Chinese cyberattacks, and mutual mudslinging over perceived protectionism all continue to escalate, American experts are now debating whether the US should change its grand strategy toward China, with many arguing that the bilateral relationship has reached a “tipping point.” In such a context, Xi’s visit, just like Deng’s in 1979, was given particular significance, as many Chinese media outlets expect it to open a “new chapter” in the bilateral relationship, which could both accommodate China’s aspirations as a rising power and the US’s desire to maintain its dominance in the global order, thus preventing direct conflict between the two countries.

Symbolism

Starting his US trip on September 22 in Seattle, Washington, by NEWSCHINA I December 2015

Photo by IC

meeting with the local business community and signing a deal with Boeing to purchase 300 jets, Xi kicked off his visit by emphasizing the positive aspects of the bilateral relationship – economic and commercial ties, which have long provided essential ballast. In Seattle, the Chinese delegation also jointly hosted an Internet forum with Microsoft, during which Xi met with top executives of major American Internet companies including Apple, Facebook, IBM, Intel, Amazon and LinkedIn. During the meeting, Xi told the assembled executives that China advocated cooperation in development of a “secure, stable and prosperous” Internet, remarks widely considered an effort to mitigate the negative impact of the persistent allegations of Chinese hacks on US businesses and government agencies on his upcoming summit with Obama. In Washington, DC, Xi and China’s First Lady Peng Liyuan were NEWSCHINA I December 2015

Chinese President Xi Jinping and US President Barack Obama meet at the White House, Washington, DC, September 25, 2015

A commemorative T-shirt issued to students, September 25, 2015 Peng Liyuan and Michelle Obama announce their choice of name for a panda born at the National Zoo in Washington, DC, September 25, 2015

Photo by Xinhua

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Xi Jinping visits Boeing’s commercial plant in Seattle, Washington, September 23, 2015

welcomed to the White House with an honor guard, a 21-gun salute and an elaborate state banquet, the highest level of protocol that can be offered to visiting foreign leaders. As a symbol of international respect and an indication of both status and rank, Xi’s reception was considered a reflection of the strategic importance that the US affords to maintaining strong, positive relations with China. Despite the heated debates and controversies surrounding various thorny issues, most notably the accusations of Chinese cyberattacks on the US, which Beijing has consistently denied, Xi faced no public embarrassments during the two-day summit between the presidents held on September 24 and 25. In their public comments, both leaders stressed the positive aspects of the US-China relationship, while contextualizing disagreements as a normal part of a complex relationship that had to be carefully managed. By signing an agreement on cyberespionage that declared that neither government would support the digital theft of corporate secrets or business information, and finalizing an agreement to govern air-to-air encounters between the two militaries, the two countries also showed that they share a common interest in controlling their disagreements in order to prevent them from escalating into all-out confrontation. As Beijing focuses more on the tone and symbolism conveyed by the summit, rather than specifics, the rhetoric on cooperation has led many in China to hail Xi’s visit as a success.

Xi Jinping with Facebook CEO Mark Zuckerberg, September 23, 2015

Partner vs. Challenger

Much of this optimism stems from pledges made by leaders of the two countries to strengthen their cooperation on a broad menu of global governance issues. According to the detailed factsheets released by both countries, China and the US have agreed to deepen cooperation in a variety of fields, including security in Afghanistan, climate change, global health security, nuclear security, sustainable development and marine conservation. For Beijing, the message the US conveyed by welcoming China as a partner in global governance is particularly important, and many Chinese experts have interpreted it as evidence of US endorsement of China’s position in the international order, a major goal of Beijing’s foreign policy. It is intriguing that when Obama urged China to become a “responsible international stakeholder” during his state visit to Beijing in 2009, suggesting a Sino-US relationship dubbed “G2,” China declined the idea out of suspicion over US intentions and concern about over-extending its resources. Now, with Xi’s proactive approach to diplomacy, China has greatly stepped up its global outreach and scaled up its contributions to various global governance initiatives. In Xi’s debut address to the United Nations General Assembly on September 28 just after his state visit had concluded, he announced that China would donate US$1 billion over the next 10 years to create a UN-China peace and development fund. He followed this with pledges to establish a new standby peacekeeping force of 8,000 troops NEWSCHINA I December 2015

Photo by AFP

Xi Jinping (center) meets Microsoft’s Harry Shum (left) and David Brown (right) during Xi’s tour of the company’s main campus in Redmond, Washington, September 23, 2015

and to provide military assistance worth US$100 million for African Union peacekeeping missions over the next five years. These pledges followed an earlier announcement at the UN Sustainable Development Summit held on September 26, when China promised to invest US$12 billion in the world’s poorest countries by 2030. However, unlike the putative framework for the G2 raised by Obama in 2009, which many expected would operate in an institutional arrangement initiated and dominated by the US, China’s recent diplomatic activism in the global arena is widely interpreted as a challenge to the US-led world order. From this perspective, any success China may have obtained with Xi’s visit should be qualified. Unlike Deng’s US trip in 1979, conducted at a time when the US and China shared important common strategic interests that set the tone and direction of bilateral relations for three decades, now a major shift in mutual perceptions is very unlikely to produce an enduring and stable consensus between the two countries.

‘Preventive Cooperation’

According to Professor Yan Xuetong, dean of the Institute of Modern International Relations at Tsinghua University, much of the current cooperation between the US and China can be termed as “preventive cooperation” or “passive cooperation,” in which the purpose of cooperation is mainly aimed at preventing direct conflict. “Mutual trust is the result of cooperation, not its prerequisite,” Yan told NewsChina. “As long as both sides share a common interest in

NEWSCHINA I December 2015

avoiding conflict, the US and China can continue to cooperate with each other even when they lack mutual trust.” However, unlike what Yan terms “proactive cooperation,” the foundation of preventive cooperation is fragile. As the view of just how undesirable specific conflicts might be differs from country to country and from administration to administration, the future of bilateral relations is full of uncertainty. For example, in October, just days after Xi wrapped up his US trip, it was reported that US officials had held talks with the country’s allies about the possibility of patrolling within 12 nautical miles of disputed islands and reefs upon which China has conducted either land reclamation or construction projects. As China considers these islands and reefs as its sovereign territory, such patrols, if conducted, would be very likely to provoke official protests or even direct confrontation. Although Obama has resisted calls to adopt a tougher foreign policy stance on a variety of global issues, including relations with China, both Republican and Democratic presidential candidates, including pack leaders Donald Trump and Hillary Clinton, have taken to playing the “China aggression” card during their campaigns. No matter who claims the White House next, however, the fundamentals of the US-China relationship will inevitably be subject to successive rounds of scrutiny. From this perspective, Xi’s visit to the US may have temporarily arrested a “downward spiral,” but, in the long run, establishing equilibrium in the world’s most important balance of power remains a daunting task. 

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China-US Relations

One Song, Two Tunes

With visibly different approaches and objectives, China and the US are not on the same page regarding the significance of Xi Jinping’s recent state visit to the US. Is this what is meant by the ‘new normal’? By Yu Xiaodong

ince Chinese President Xi Jinping’s state visit to the US was announced in February 2015, the Chinese side voiced expectations that the summit between Xi and US President Barack Obama would help China establish an enduring and stable relationship with the US while maintaining its upward trajectory. In contrast to the high hopes that dominated the Chinese media narrative, the response from the American media was far less enthusiastic. Coverage of Xi’s visit was eclipsed by other events, such as Pope Francis’s visit and the resignation of Speaker of the House John Boehner. Even when both presidents held a joint press conference after the summit, the American media showed more interest in domestic politics than in the US-China relationship. Moreover, despite the re-emphasis of the importance of cooperation expressed by both sides, no major breakthroughs were delivered by the summit. Contrary to Beijing’s hopes, the meetings did not produce a joint statement. Instead, the two sides provided their own versions of what had been discussed and agreed in the presidential meetings. While the one released by the Chinese government listed 49 “consensuses” as the “accomplishments” of the Chinese delegation, the factsheet released by the White House listed far fewer items, in a different order and with far less detail. While media outlets and experts in both countries often rely on documentation released by their respective governments to interpret diplomatic engagements at the highest level, this often leads to the drawing of confused and misleading conclusions on the actual significance of events. Thus, it is important to compare the narratives of both sides to obtain a comprehensive picture of what really took place behind closed doors in Washington.

‘New Model’

The most striking difference between the two documents released

after the summit is the interpretation of the so-called “new model of major-country relations.” First advanced by Xi during his informal meetings with Obama at the Sunnylands estate in California in 2013, this concept consists of three major principles: non-confrontation and non-conflict, mutual respect for core interests, and win-win cooperation. While this concept was briefly accepted by Obama at Sunnylands, US officials have been avoiding it in the past couple of years, as many, skeptical about China’s global ambitions, have interpreted the effort to advance a “new model of major-country relations” as an attempt by China to treat with the US on an equal footing. A major goal of Xi’s visit seemed to be to have the US officially endorse the new model in terms of handling bilateral relations, just as the Chinese leadership has adopted it as a foundation for its diplomatic relations with all other major countries. In the White House factsheet, there was no mention of any discussion between both presidents of this “new model.” Although the list of “consensuses” released by the Chinese government also did not explicitly state that the leaders had engaged in discussion of the new model, the list opened with a section entitled “new model of majorcounty relations.” The section began: “The two sides positively commended the important outcomes of the meeting at Sunnylands in 2013, the meeting in Beijing in 2014, and the meeting in Washington in 2015 between the two presidents, and agreed to continue their efforts to build a new model of major-country relationship between China and the US based on mutual respect and win-win cooperation.” It continued: “The US welcomes a strong, prosperous, and stable China, supports China to play a greater role in global and regional affairs, and supports the stability and reform of China, and China respects the traditional influence and realistic interests of the US in the NEWSCHINA I December 2015

NEWSCHINA I December 2015

Xi Jinping (left) and UN Secretary General Ban Kimoon, September 26, 2015

Xi meets US Congress leaders on Capitol Hill, September 25, 2015

Xi and Obama meet in Washington, September 25, 2015

Photo by Xinhua and AFP

Asia-Pacific region, and welcomes the US to continue to play a positive and constructive role in regional affairs.” This final sentence in particular appears to conform to the “mutual respect” principle China advocates in the new model. According to the interpretation of various Chinese State media sources, the US has endorsed the “essence” of the new model, without explicitly endorsing the term itself.

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Photo by Xinhua

This discrepancy may indicate that the two countries are not on the same page when it comes to the basic principles that guide the bilateral relationship. While China has adopted what Beijing calls a “holistic approach” that focuses more on “the bigger picture” and “overall principles,” the US prefers to focus on specific issues. For the US, mutual trust and respect can only be achieved after these specific problems are solved. For China, specific problems can only be solved when the two sides agree to trust and respect each other. Such a difference in the fundamental approach to the bilateral relationship appears to be manifest in the discussion of various issues during the summit.

Cybersecurity

The issue of cybersecurity was no doubt the most prominent in the run-up to Xi’s visit, as the Obama administration threatened to impose sanctions against China in response to alleged cyberattacks including economic espionage carried out against private US companies as well as the hacking of US Office of Personnel Management security dossiers containing information on 22 million Americans. Beijing has consistently refuted all of these allegations. After extensive diplomacy prior to and during the summit, the US and China reached an agreement that “neither country’s government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to companies or commercial sectors,” phrasing included in the documents released by both governments. Interestingly, neither Washington nor Beijing granted a prominent position to this agreement in their releases. It takes careful browsing of the text to locate these specific clauses. The low-profile nature of the agreement may indicate that neither Washington nor Beijing is content with what they have achieved on the issue. For American officials and observers, the agreement’s lack of specifics and Beijing’s intractable position that it was not behind the alleged attacks have made any such agreement impossible to enforce. For Beijing, the wording of the agreement largely adopted the American perspective on the issue, explicitly differentiating state-led online spying from so-called economic espionage in the commercial sector. Beijing has long argued that there are no international norms regarding cybersecurity and online sovereignty, and thus considers the distinction an arbitrary one made unilaterally by the US in service of its own interests. Moreover, the wording of the agreement is quite different from that reported by the New York Times ahead of Xi’s visit on September 19, which claimed that the US and China would agree “not [to] be the first to use cyberweapons to cripple the other’s critical infrastructure during peacetime,” a position Beijing would likely deem much closer to the principle of “mutual respect” it has been advocating. From the Chinese perspective, China has shown respect to the US and has restrained from directly accusing the US government of cyberespionage, although documents leaked by former CIA employee Edward Snowden suggest that the US has conducted massive cyberat-

Xi Jinping delivers a keynote speech at the UN Sustainable Development Summit at the United Nations headquarters in New York, September 26, 2015

tacks against China, evidence that tallies with official US government reports that state that the gathering of economic intelligence, including that related to science and technology “against both the state and non-state sector,” is a national policy. Adopting the US perspective on the cyberespionage issue without discussing US hacking in China has led Chinese observers to accuse the US of seeking “unilateral concessions.” As neither side got what it wanted, continued diplomacy (or confrontation) over cybersecurity looks to be the norm for some time.

Military

After the issue of cybersecurity, the South China Sea was perhaps the next highest priority topic on the agenda, and also proved to be an issue on which no real progress was made during the summit. Indeed, the ongoing controversy over Chinese sovereignty in disputed waters was not mentioned anywhere in the factsheets released by either side. In their joint press conference, Obama and Xi reiterated their respective positions on the issue, and neither indicated that he would back down from his current position. However, the two countries do appear to have made progress in the area of military-to-military relations. The two sides finalized and signed an agreement governing air-to-air encounters between Chinese and US aircraft, which had been negotiated between the two militaries in the months before the summit. A similar confidence-building measure (CBM) guiding the behavior of the US Coast Guard and China’s Maritime Police was also cemented. As the US steps up its military presence in the Asia-Pacific region to counter the activities of a seemingly more assertive Chinese military, such mechanisms will help manage encounters between the two countries both in air and at sea in order to prevent misunderstandings and miscalculations. NEWSCHINA I December 2015

Both sides have shown commitment to continued discussions on additions to the Notification of Major Military Activities CBM. Documentation of these discussions varied slightly, with the US version stressing that it placed top priority on “completion of a mechanism for informing the other party of ballistic missile launches,” something not mentioned in China’s account. Instead, the Chinese version stressed that the Chinese navy accepted a US invitation to attend the Rim of the Pacific Exercise 2016, apparently in a bid to emphasize the “non-confrontation” and “mutual respect” theme trumpeted by Beijing’s “new model.” Compared to the cybersecurity issue and the ongoing tension in the South China Sea, progress made on the military relationship between the two countries didn’t receive much media attention. In reality, however, such agreements could prove crucial, considering that the possibility of a major confrontation between the two militaries or proxies in the South China Sea looks ever more likely.

BIT and Climate Change

In the run-up to Xi’s visit to the US, analysts had predicted that progress on a bilateral investment treaty (BIT) could potentially be the big deliverable. This view proved overly optimistic. No major progress was announced since both sides exchanged their “negative lists” of sectors that would remain off-limits to foreign investment. During the joint press conference, the two presidents said that they had agreed to “step up” (Obama’s words) and “vigorously push forward” (Xi’s) BIT negotiations. In the White House general factsheet, a potential BIT was not mentioned at all. A separate factsheet on economic relations said there had been “positive progress” in negotiations, with “improved negative list proposals in September.” By contrast, the consensus list released by China devoted five items (out of 49) to the BIT and related fields. In addition to mentioning that the two sides had agreed to “speed up negotiation” to reach “a high-level BIT,” China’s documentation stressed that the two sides had agreed to continue their communication and negotiation in several fields, including national security reviews of investment from the other party, investment at the state/provincial level and high-tech investment. Additional information provided in the Chinese version indicated which areas were priorities for Beijing. Compared to the stagnation in BIT negotiations, progress made on climate change was perhaps the meeting’s most significant outcome. While China announced that it would initiate a “national emissions trading system” in 2017, the US released its Clean Power Plan, which pledges to reduce carbon dioxide emissions from the power sector by 32 percent of 2005 levels by 2030.

Governance

Amid tension over contentious issue such as cybersecurity, a major consensus of the summit was that the US and China would step up their cooperation in various areas of global governance, another objective given significant weight in both sides’ documents. In the White House factsheet, it states that the two sides “agreed to

NEWSCHINA I December 2015

work together to constructively manage our differences and decided to expand and deepen cooperation” in areas including Afghanistan, peacekeeping, nuclear security, wildlife trafficking, ocean conservation, sustainable development, food security, global health security, humanitarian assistance and disaster response. While these areas are also echoed in the Chinese version, there is a major difference in the interpretation of bilateral discussions of cooperation in global financial governance. China’s increasingly prominent role in the global financial system, epitomized by the establishment of the Asian Infrastructure Investment Bank (AIIB), has been a major concern for the US, which sees its international financial primacy, represented by the IMF and the World Bank, as being threatened. It is obvious that the US remains guarded regarding cooperation in the financial sector. In the White House factsheet, the word “finance” or “financial” was not even mentioned. Instead, it only briefly stated that the two sides would “expand their collaboration with international institutions to tackle key global development challenges.” By contrast, the release issued by the Chinese side offered a much more detailed account of the discussions, which, it claimed, covered a variety of fields, including the reform of the World Bank and the IMF, the internationalization of the Chinese yuan, and strengthening the “multilateral development financing system.” While the document didn’t specifically mention the AIIB, it stated that the two sides “acknowledged” that new institutions would become “important contributors of the international financial framework.” The difference in both sides’ perspectives of their respective roles in the international financial system is quite symbolic in that it tells readers more about what the two countries may have disagreed on than what they have agreed upon. With different approaches and different objectives, the two countries seem to be competing more than cooperating. It is beyond doubt that such a discrepancy poses a threat to the stability of the bilateral relationship. But, as the bilateral relationship between the US and China has become increasingly complex, it may not be a bad thing to allow space for the two sides to offer different narratives and interpretations of this summit, and of those to come. To a certain degree, both Washington and Beijing needed to use Xi’s visit to serve their domestic agendas. While Xi sought a favorable result in order to facilitate his reform agenda back home, Obama needed to project a tougher image on China to show that the US could, if needed, hold Beijing accountable on priority issues. As nationalism is on the rise in both countries, there have been calls for tougher positions from their respective polities. By releasing their own versions of the story rather than issuing a joint statement, both governments can interpret the results of the summit to suit their own agendas and appease the hawks, which, in itself, can help to better manage the differences between the two countries. After all, as the relationship between the world’s two biggest economies has entered something of an impasse, setting one song of cooperation to two different melodies is, from a diplomatic point of view, preferable to voicing a common tone of confrontation.

society

China’s Homeowner Committees

Trouble at Home

Since their launch more than two decades ago, China’s homeowner committees have struggled to remain effective in the face of corruption, apathy and a legal vacuum, but, as self-governing organizations are rare in China, they are pushing to develop By Liu Chengwei, Zhou Qunfeng and Hua Xuan

he homeowner committee elected by the residents of Nanjing’s Yueya Lake Garden residential community had been dissatisfied with the quality of property management company Qixia’s service for more than half a year. The five-member committee hired a replacement company and set March 31, 2015, as the handover date, yet Qixia refused to go. On that day, Qixia brought in security guards as reinforcements in a confrontation that ended with a Yueya resident being scalded by a thrown hot water bottle. During the fierce conflict, many other homeowners felt reluctant to offend either side and maintained neutrality, making it more difficult to settle the dispute. This incident embodies the current conundrum that surrounds China’s homeowner committees. Due to ineffective laws and a lack of experience, many homeowner committees find it hard to protect their rights and interests from property management companies, with some also struggling with poor reputations because of corruption and abuse of power. And as older members reach the end of their tenure, many committees find themselves on the brink of extinction due to a lack of successors. However, given that homeowner committees are self-governing, something that is still a rare occurrence in China, homeowners are not expected to abandon this hard-to-come-by opportunity to man-

age their own communities. Many homeowners have begun to try new models to expand their autonomy and strengthen self-discipline, with experts also calling on the government to lend these committees more support, rather than interfere in their operations.

Establishment

Unlike homeowner associations in some foreign countries, Chinese committees are usually convened when conflicts between owners and property managers reach a boiling point. It is when homeowners are oppressed by a property management company that they form a committee to “struggle together,” said Shu Kexin, a homeowner committee expert who works with an NGO engaged in Chinese community affairs. For example, China’s first homeowner committee was established 24 years ago because of a conflict over the price of electricity. Due to a mistake made during construction, the Vanke Tianjing Garden residential community in Shenzhen had to use a commercial transformer to supply residential power, only to find that some of the owners refused to pay the additional charges. Worried about the increasing friction between the two sides, property management company director Chen Zhiping convened a homeowner committee to allow residents to negotiate more effectively. On NEWSCHINA I December 2015

regard to homeowner committees] from ‘supervision and guidance’ to ‘guidance and assistance,’” said Shu Kexin. “It means that homeowner committees have been defined as truly self-governing organizations.”

Photo by CFP

Difficulties

Homeowners in a residential community in Xi’an, Shaanxi Province, present an “award” to their property management company that they have accused of neglecting its responsibilities, November 2011

March 22, 1991, the committee held its first meeting, which was attended by developers and representatives of the property management company. By the meeting’s end, the parties had agreed on a rate for the electricity and solved some other problems for the homeowners, such as installing more garbage cans and outdoor seating areas. Several months later, the committee caught media attention once again by raising the monthly property management fee from 2 yuan (US$0.32) to 10 yuan (US$1.61) on the condition that the property company kept its promise to keep the area completely litter-free. Although the move was criticized as arbitrary by the local department in charge of pricing, it paved the way for other homeowners to get involved in the management of their own communities. When Shenzhen was drafting its first local regulation on property management in 1994, Chen was invited to make suggestions. Eight years later, the Chinese government solicited public opinions on the national Property Management Regulation (PMR) and collected feedback from over 4,000 people in the first month, setting a milestone for Chinese public involvement in legislation. The national regulation took effect in 2007. That same year, China issued the Property Rights Law (PRL), further bolstering the autonomy of homeowner committees. “The PRL has shifted the function of government departments [in NEWSCHINA I December 2015

Despite the improved legal definition, Chinese homeowner committees did not see the rapid growth that experts had expected. They even suffered a decline in some cities. According to data from Chen Fengshan, a private researcher of homeowner committees based in Beijing, only 10 percent of residential communities nationwide elected a homeowner committee. Official data from Beijing Municipal Commission of Housing and Urban-Rural Development showed that in 2013, only 26 percent of the city’s residential communities had set up homeowner committees, about 2 percent lower than the 2011 rate. Many believe that a major reason behind the low rate is the difficulties homeowner committees face in protecting their rights and interests. Many committees have complained to the media that they always have to fight property management companies from a weaker position, despite the PMR and PRL. For example, the Yueya Lake Garden homeowner committee had to ask the local government to help them expel property management company Qixia. Similarly, the Yunzhuyuan residential community in Beijing spent four years replacing their property management company, during which time several committee members were reportedly intimidated. “It is ridiculous that the PMR states that the developer appoints the first property management company for homeowners,” private researcher Chen Fengshan told NewsChina. “It misleads the property management companies [into thinking] that they are right to stay in a community even if they fail to satisfy the homeowners.” According to Chen, many articles in both the PMR and the PRL remain ambiguous in regard to such things as the property rights of some public places and the punishments for property management companies that have damaged homeowners’ interests. These ambiguities make the laws harder to enforce. According to Zhang Tao, director of the homeowner committee for Beijing’s Yunzhuyuan residential community, their former property management company left behind a litany of problems after being dismissed, including an illegally leased basement. In 2014, the homeowner committee sued the company for embezzling the profits earned from public areas in the community, which, according to Chinese law, should belong to all of the owners, only to see the trial thrown out for lack of evidence. “How could we get the evidence, since all the invoices and certifi-

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cates were in the hands of the [former] property management company?” Zhang said. “The PRL states that the developers and the homeowners may negotiate for the property rights of some public places in the community, but in reality, homeowners have no bargaining chips when they talk with developers,” said researcher Chen Fengshan. “The laws have acknowledged the homeowner committees, but in practice, their rights are often constrained or even eliminated,” he explained, adding that he is devoting himself to compiling a database of the struggles of Chinese homeowners as a future reference point for lawmakers.

The Homeowners

Shu Kexin, however, is concerned more about the problems created by the homeowners. He said he would be more likely to blame Chinese homeowners’ apathy toward self-governance for the low number of homeowner committees. “In China’s several thousand years of history, Chinese people were used to joining together only in [times of] disaster, such as famine. Except for religious organizations, China has few self-governing organizations, leading many citizens to become accustomed to being governed,” he wrote in an article for NewsChina titled “The Silent Homeowners.” Chen Fengshan shared this view. He told NewsChina that he had spent more than a year collecting enough signatures to establish a homeowner committee in his community. Many homeowners rolled their eyes at his promotional materials and even questioned whether he was aiming to benefit from them in some way. “Even young people are reluctant to bear some responsibility in a homeowner committee,” real estate giant Ren Zhiqiang once told the media. “Chinese homeowner committees will always experience a process of rising and falling,” said Shu Kexin. “When a conflict is escalating, a homeowner committee will rise, and when the conflict subsides, it becomes harder to sustain the committee.” Committee director Zhang Tao told NewsChina that by next March, two committee members will be left in service, including himself, yet only two residents in his community have signed up to be future candidates. More troubling is that some homeowners have conflicting interests, preventing them from forming a united front. Media discovered that the discord in Yueya Lake Garden extended to residents as well, with some of the homeowners helping the old property management company Qixia oppose the handover. According to media reports, some of them didn’t want to offend the old property staff members with whom they had good relationships, while others had personal stakes in the company – some of their relatives were Qixia employees. Other Chinese homeowners simply feel like they’re not being heard. “Many of the residents in my community are elderly and what

A homeowner meet-and-greet in the Yunzhuyuan residential community, Beijing

they care about is not what I care about,” said an anonymous residential community resident in Guangzhou to local media. “I sometimes feel that I [need to push] to be represented.” Corruption is also a big obstacle. A local newspaper in Hubei Province recently exposed a series of corruption cases in local communities, including bribery during elections, colluding with property management companies for illegal profit, and embezzling public funds.

Government’s Role

Currently, most Chinese residential communities have contracted property management out to a professional company and the homeowner committee members work on a voluntary basis. Many experts believe that a better way to develop homeowner committees is to let them bear the cost and profit of property management, with the property management company serving as an employee. In such a way, the committees not only have more say on property matters, but they also can more easily control the finances involved in their operation. This new model, however, cannot be realized without support from the government. Residential communities, for example, are not allowed to use the government-allocated fund for community repair and maintenance until it gets permission from their residents committee, a street-level department engaged in local governmental affairs, such as helping local police maintain community security, settling disputes among neighbors, and implementing family-planning policies. However, many government departments still hold a suspiNEWSCHINA I December 2015

Photo by IC

Courtesy of Interviewee

Over 500 residents of the Xinghewan residential community in Guangzhou, Guangdong Province, protest their property management company’s unilateral decision to cancel shuttle bus services to downtown areas, December 8, 2012

cious attitude toward the self-governing homeowner committees. For example, the local residents committee strongly opposed Yunzhuyuan’s homeowner committee when its members first moved to replace their property company. According to homeowner committee director Zhang Tao, some officials even asked him to “think of his future if he insists on the replacement.” More recently, members of Yueliangwan residential community in Jiaxing, Zhejiang Province, told local media that their application to establish a homeowner committee has remained unanswered by the government for half a year. According to Chen Youhong, a professor working with the Beijing-based NGO Governance & Community Institute, homeowner committees greatly depend on their surrounding political environment, which varies significantly throughout the country. Shanghai, for example, has a high rate of membership in homeowner committees (85 percent), but most of these committees were established by the local government. This has actually weakened the autonomy of homeowners, and failed to balance the powers of the government and the property management companies, according to Chen. On the other end of the spectrum, Jiangsu Province’s provincial government has given local homeowners more space by proposing a new concept of “homeowner representatives” who are empowered to manage the community with relevant government departments if their community is otherwise ineligible for the establishment of a homeowner committee. “The ultimate objective of a harmonious community is to realize smooth interaction between the homeowners, the property management companies and the government,” said Chen. NEWSCHINA I December 2015

“As current laws have far from resolved the problem, the three sides must jointly work out [rules] for better running the community… The government and the homeowner committees actually complement and complete each other... [and] it is time for the government to make room for the homeowner committees,” he continued. It does not mean that the government should not do anything in the development of homeowner committees. On the contrary, all the experts interviewed said that the government should give more support to help them develop. “The homeowners committees and the [government-backed] residents committees should work as two colleagues at the same level,” Zhang Tao told NewsChina. “My experience proves that both sides need cooperation in many fields.” As a homeowner committee researcher, Chen Fengshan is often invited by government departments to give lectures on property management. When some people questioned if he was suborned by the government, he replied that better communication with the government helps the struggle for homeowners’ rights and interests. “In addition to more detailed legislation, the government could take measures to enhance public awareness [of self-governance] and offer some technical guidance,” suggested Shu Kexin. “Everybody knows that a bunch of chopsticks is much harder to break than a single one, but the chopsticks will not gather together without external force,” he added. “The government is one such force. The more support the government gives, the better a homeowner committee runs. A sustainable homeowner committee will in turn alleviate the government’s burden. It is a win-win situation.”

society

Odor Testers

Nasal Officers

Perfumiers require a sharp nose, but to become an “odor tester,” whose profession is to sift safe from potentially dangerous smells, it seems any nose will do By Fu Yao

he human eye is able to distinguish millions of colors in the various wavelengths and intensities of light. The human ear can recognize 500,000 distinct frequencies. How many smells the human nose can identify, however, remains a mystery. A research paper published in Science in March 2014 reported that the human nose is capable of sensing at least a trillion individual aromas, far more than was previously thought. However, few people have to push their proboscis that far. Even a professional perfumier – a job that requires inborn ability and years of formal training – only needs to recognize and recall around 400 fragrances. For an “odor tester,” however, China’s latest weapon in the fight against pollution, a sensory memory of five smells will suffice.

Chen Yuanyuan injects an odor sample to a bag filled with clean air

Photo by dong Jiexu

Ordinary

The Beijing Municipal Environmental Monitoring Center (BMEMC) is a pioneering institution in China that has conducted odor testing since its inception in the 1970s. Senior engineer Chen Yuanyuan is one of its staff of 40 odor testers who has worked in this little-known area for more than 10 years. The main task of an odor tester, as a relatively new occupation, is to gauge pollution levels from odor samples collected at places including factories, landfills and sewage treatment plants. As is the case for her colleagues, odor testing is not a full-time job for Chen. She is a quality and technical supervisor by day; she only moonlights as an odor tester when called into the BMEMC laboratory. Since 1994, when China unveiled its Standards for the Discharge NEWSCHINA I December 2015

Photo by dong Jiexu

of Odor Pollutants, odor testers became a crucial, if part-time, tool She told our reporter that there is no major difference between the in the country’s environmental protection industry. In 2004, China two methods in terms of reliability and validity. began to issue work licenses for odor testers if they passed a qualification test. Unique “It is a part-time job, and to ensure [we have] sufficient personnel, The BMEMC is mainly responsible for the environmental monievery newly recruited colleague, in whatever department, is advised toring as well as the emergency monitoring of air, water and noise to sit the [odor tester] exam,” Chen told pollution. Odors, for the purposes of the NewsChina. BMEMC, are unpleasant smells that are Chen added that an odor tester needs no not always indicative of a threat to public more than an “ordinary nose,” not the finely health. Testing these smells is just one mihoned sense of smell of a perfumier or food nor aspect of the agency’s workload. tester. In fact, she told our reporter, a keen The BMEMC conducts two routine sense of smell could prove a detriment, as it odor tests each year targeting the city’s landwould be likely to “affect judgment, because it fills and pollutant-discharge facilities. Chen is not a true reflection of the average person.” Wei said that many people have mocked According to Chen Wei (no relation the gauging of odors through human noses, to Chen Yuanyuan), another engineer at Odor samples collected from factories, landfills and calling the technique primitive and unrelithe BMEMC analysis laboratory, recruit- sewage treatment plants able, but he maintains that, currently, “hument requirements for an odor tester are man noses work much better than instrunot complicated. Anybody who passes the ments.” exam can take the job so long as they are According to the national Standards for aged between 10 and 45, do not smoke or drink and do not have the Discharge of Odor Pollutants, there are nine control indexes for any olfactory disorders. Reassessment is compulsory every three years. the discharge of odorous pollutants in China, only two of which – “Candidates have to recognize five smells, including the fragrance ammonia and hydrogen sulfide – can be effectively detected entirely of a flower, the stink of sweat and an unpleasant stench infused into by monitoring equipment. Chen Yuanyuan told NewsChina that the diluted test paper. One mistake means they fail,” said Chen Wei. human nose, meanwhile, can sense over 4,000 distinct odors. “Some enterprises have installed monitoring devices [to detect odors] by themselves, but, generally speaking, the instruments remain Testing Essentially, the job of an odor tester is to gauge whether an odor is in the early stages of development and haven’t been widely adopted unpleasant or not. Despite the simplicity of this task, the verdicts of in other countries,” Chen continued. “The ratio between input and odor testers directly influence the application of polluting emissions output leaves much to be desired. Such instruments are also likely to regulations by China’s environmental and law enforcement agencies. be affected by environmental changes. Sensors are susceptible to dysWhen an investigation occurs, samples of suspect odors are taken at function as a result of changes in humidity or temperature.” two-hour intervals at four monitoring stations attached to emissions On top of scheduled and random testing, the BMEMC also invesvents around the site in question. These are then passed directly to the tigates public complaints of suspect smells – a common phenomenon BMEMC lab for testing. in Beijing. Chen Yuanyuan still recalls initiating emergency monitorChen Wei told our reporter that, generally speaking, odor testers ing of a pharmaceutical factory in 2008 after a tip-off from a member can only work two sites per day. “Their sense of smell will be affected of the public, later discovering that the factory was indeed secretly if they are exposed to a single odor for a long time,” she said. flouting emissions regulations. She told NewsChina that the factory In the lab, six odor testers, one assistant and a senior tester will test would vent pollutants at night to evade the attention of the environa total of 18 “olfactory bags” – containers of clean, odorless air, some mental protection authorities. of which have had particles of one sample introduced into them. The In recent years, Chen continued, district- and county-level environsix odor testers will work in isolation to determine which olfactory mental monitoring stations are now assisting with investigating bad bags contain the samples. To ensure accuracy, each group’s olfactory smells, significantly easing the burden on the BMEMC. More and bags have to be tested three times. The assistant will gradually increase better laboratories have sped up response times, even as public attenthe dilution of the sample until it can no longer be detected by most tion has shifted away from bad smells and towards Beijing’s ubiquitous of the testers, at which time the overseer will determine whether or smog, and the levels of PM 2.5 (particulate matter less than 2.5 minot the sample exceeds acceptable levels. crometers in diameter, capable of penetrating the lining of the lungs), According to Chen Yuanyuan, this methodology is an adaptation which today are a much bigger concern than malodorous landfills. of Japanese techniques, adopted in place of the dynamic dilution ol“PM 2.5 [levels] are visible, but odors can only be smelled,” said factometers, or “artificial noses” widely used in the US and Europe. Chen. NEWSCHINA I December 2015

SPECIAL REPORT

Alzheimer’s in China

Mounting Threat

As China’s older demographic swells rapidly, its Alzheimer’s-affected population also booms, yet the general public remains unaware of the disease’s severity and the massive challenges it poses for families and society as a whole By Qian Wei and Wang Shan

ei Ya was surfing the Internet on a Saturday in the middle of a muggy Shanghai summer when she was suddenly hit by a pungent smell. “Oh, no! Dad must have wet his pants again!” Rushing out of her bedroom, she saw her father standing helplessly in damp trousers on the now-soiled living room floor. Changing her father’s dirty clothes and washing his unclean bedsheets have become routine tasks for Wei and her mother over the past five years, ever since her father was diagnosed with Alzheimer’s disease. “We never expected that someday my father would be diagnosed with Alzheimer’s, a disease so strange to us that in our minds, it would only affect really, really old people that we didn’t know,” Wei wrote on her blog. Many Chinese people aren’t familiar with the Chinese term for Alzheimer’s; instead they call the disease laonian chidai, or “elderly dementia.” Few know what the disease may look like in its early stages. In most cases, the person with Alzheimer’s doesn’t recognize the illness when symptoms first appear, and neither do

his or her family members. Statistics indicate that in China, more than 90 percent of people with Alzheimer’s in 2014 did not receive a proper diagnosis from a healthcare provider, while Chicago-based nonprofit Alzheimer’s Association found that number to be 55 percent for those in the US. Because of China’s growing aging population, a lack of public awareness and inadequate treatment options for those with Alzheimer’s, the increased prevalence of this disease is poised to create major challenges for the country in the coming years.

Overlooked

Due to the One Child Policy adopted in the late 1970s, China’s population is aging much faster than any other middle-income country. With more than 200 million people over age 60, China has the world’s largest population of seniors, as well as the largest number of people living with Alzheimer’s. According to a 2013 report published in The Lancet, the number of cases of all kinds of age-related dementia rose in China from 3.7

million in 1990 to 9.2 million in 2010. The number of people specifically with Alzheimer’s increased from 1.93 million to 5.69 million over that same 20-year period. In a recent telephone interview with NewsChina, Wang Wei, report co-author and professor at Edith Cowan University in Perth, Australia, told our reporter that most people with Alzheimer’s start to show symptoms at age 75 or older. Previously, people in low- and middle-income countries like China did not typically survive to that age, thus Alzheimer’s was most common in developed countries where the average life expectancy was much higher. With improved medical services and a longer life expectancy, the number of people suffering from Alzheimer’s in China has begun to surge, and now more and more cases of the disease are being diagnosed. “With advanced medical and educational services, the number of people with Alzheimer’s in Western countries has passed its peak, remained stable or even dwindled,” Wang Wei told our reporter. “But in China, the numbers keep increasing. In the foreseeable future, as NEWSCHINA I December 2015

Photo by IC

China is home to the world’s largest population of Alzheimer’s patients, with an estimated 5.69 million people affected by the disease, according to 2010 data

China’s older population hits its peak, so will the number of Alzheimer’s patients.” According to Wang’s estimates, the number of people with Alzheimer’s in China will rise to 8.93 million by 2020. “This is like a time bomb,” he said. “The most terrible situation is the one in which we are not even aware we’re on the edge of explosion.” This unawareness is accompanied by a general lack of knowledge about the disease. Xiang Nan (a pseudonym), a well-educated woman in Beijing, recently noticed that her 80-yearold mother-in-law started to have difficulty remembering recent events and also showed other early symptoms of Alzheimer’s. Xiang asked other family members about this and they all said they’d noticed it, too. However, none of them thought to arrange for Xiang’s motherin-law to see a doctor and seek early treatment. Xiang explained to the reporter the reason behind her inaction: She had heard about Alzheimer’s through various news outlets and knew there was no effective medical treatment for the disease so far, thus her family felt it was hopeless to inquire about medication. She also NEWSCHINA I December 2015

had not anticipated the financial and emotional difficulties her family may end up facing when her mother-in-law’s disease advances. Xiang’s understanding is very typical among the family members of the millions of Chinese people who suffer from age-related dementia. People generally don’t think of Alzheimer’s as a serious or fatal disease like cancer, although it’s the sixth-leading cause of death in the US, according to the US National Institutes of Health. “This perspective is very wrong,” said Wang Huali, professor at Peking University’s Institute of Mental Health (IMH). “They do not know that, even though there is no cure at present, an early diagnosis, proper treatment and fastidious care can postpone the development of Alzheimer’s and ease the family’s potential burden.” Wang added that without active treatment, the condition of someone with Alzheimer’s may decline more rapidly, with symptoms progressing from short-term memory loss to total memory loss, problems with language, disorientation and the inability to maintain personal

care developing within three to five years. “The speed of progression may vary if active measures are taken as early as possible,” he said. Wang Wei shares the same opinion, and he believes the importance of early diagnosis and active treatment should be heavily promoted. The general public also needs better education about prevention; research shows that smoking, lack of exercise, hypertension and diabetes are all risk factors for Alzheimer’s, thus a healthy lifestyle may help stave off the disease. “Scientific researchers and society as a whole often focus on diseases with a high mortality rate, such as cardiovascular disease and cancer, while ignoring Alzheimer’s and other neurological diseases,” Wang said. Apart from a lack of awareness and education, many Chinese people receive a late diagnosis because of the stigma surrounding the disease. Even well-educated families often regard an Alzheimer’s-affected family member as a skeleton in the closet. Wang Wei said that as China moves forward, it can refer to the relative success in the prevention and treatment of HIV/AIDS. While there

SPECIAL REPORT

Photo by IC

is as yet no outright cure for HIV/AIDS, an increase in public outreach has led to a sharp decline in the number of new infections each year, and a greater number of those affected have a better quality of life due to improved medications. Similarly, education and research about Alzheimer’s should receive the same level of support, Wang says.

Unaware

Shanghai resident Wei Ya’s father went missing in 2012. It was a haunting nightmare that she’ll never forget. “I went to seek help from local police stations and emergency personnel, and I handed out ‘missing person’ flyers,” she told our reporter. “Finally a police officer found him in a gutter at a construction site.” Loved ones going missing is one of the most worrying possibilities for family members of Alzheimer’s patients. According to an international study published in 2013 by physicians at Shanghai Sixth People’s Hospital, about 40 percent of Alzheimer’s patients worldwide have experienced wandering and getting lost. Wei Ya and her mother have given her father a special yellow wristband that has been used in China since 2012 as a signal to others that the wearer has Alzheimer’s. But, Wei says, the band is often covered by her father’s sleeve, making it less visible to others. In addition, many people who do see it may not understand its significance because of a lack of public awareness. Professor Wang Huali, one of the founders of the yellow wristband campaign, explained to our reporter that the very intention of the movement is to raise awareness, similar to the red ribbons worn during World AIDS Day. “Alzheimer’s patients and their family members can all wear it, and if people see yellow wristbands everywhere on World Alzheimer’s Day, within a few years the yellow wristband will be regarded as a warning sign and it will fulfill its goal of helping lost Alzheimer’s patients,” Wang said.

Care

Wei Ya’s father’s condition has deteriorated rapidly since 2012. He lost his ability to take care of himself independently and suffered from severe insomnia and hallucinations. In the space of a few years, Wei Ya and her mother

Approximately 40 percent of people with Alzheimer’s have wandered from caregivers or gotten lost

had become ensnared in his daily struggle with the disease. By May 2014, they had no choice but to send him to a nursing home in a Shanghai suburb. “Most Alzheimer’s patients end up living in a nursing home… according to some estimates, some 20 percent of Alzheimer’s patients have died at home, while about 80 percent of patients lived at a nursing home for an average of two years before they died,” wrote Dutch journalist Stella Braam in the Chinese translation of her Dutch-language book I Have Alzheimer’s: My Father’s Story. Braam’s father, a psychologist and author, died at age 81, four years after being diagnosed with Alzheimer’s. While Wei Ya’s father was in the nursing home, she would make the one-hour journey to visit him every two weeks. For the first few months, she was satisfied with conditions in the facility, but a change in management resulted in a decrease in its quality of service. This past March, Wei’s father caught a cold that soon developed into a pulmonary infection because he didn’t receive proper treatment. When he was sent to a hospital for emergency care, a doctor told Wei and her mother that her father’s lungs were blocked with phlegm because patients with severe Alzheimer’s can forget how to get rid of phlegm by themselves. Caregivers need to use a suction pump to clear out the mucus. At that time, Wei also found bruises around her father’s ankles. She realized he must have been bound to his bed by nursing home employees when he refused to sleep at night.

According to Braam’s research, people in the Netherlands often use this method as well. “Some 70 percent of hospitalized Alzheimer’s patients have been tied up by their caregivers,” she wrote. After Wei’s father’s situation stabilized, she took him back home. She could not allow her father to stay at that nursing home any longer. Proper nursing homes that care for Alzheimer’s patients are in short supply in China. Sensing a market opportunity, private investors have recently poured a significant amount of capital into building high-quality facilities. Such institutions are, for the most part, prohibitively expensive for ordinary Chinese families. For example, while the average monthly salary in China is 3,806 yuan (US$612), monthly fees for these nursing homes can surpass 10,000 yuan (US$1,610). That means lowerand middle-class families are stuck; they can’t afford the upscale choices, while the limited number of low-cost, publicly funded nursing homes that accept Alzheimer’s patients are fully booked year-round. Alzheimer’s can be a substantial financial burden for the whole family, even if the family is caring for the loved one at home. The average monthly cost for an Alzheimer’s patient’s medication exceeds 1,000 yuan (US$161). According to a 2013 report done by Alzheimer’s Disease International (ADI), an international federation of Alzheimer’s associations, the total cost of caring for and treating Alzheimer’s patients globally amounts to 1 percent of the world’s total GDP. NEWSCHINA I December 2015

Families of patients with Alzheimer’s bear more of a financial and emotional burden than family members of people with other diseases, according to a Shanxi Medical University study published in 2012. It showed that having a loved one with Alzheimer’s may affect family members’ daily life to a large extent and concluded that “active prevention and controlled treatment of Alzheimer’s can effectively alleviate both the burden of family and society, in addition to lowering the number of Alzheimer’s patients.”

Support

Indeed, apart from regular medical treatment, proper daily care can effectively slow down the development of the illness. Peking University Health Science Center assistant professor Liu Yu told our reporter that patients with Alzheimer’s show different symptoms during each phase of the disease: mild, moderate and severe. Thus caregivers need to adopt different skills and techniques according to each stage. In 2000, IMH professor Wang Huali launched a support group for family members of Alzheimer’s patients, arranging for them to gather once a month. Group members exchange their experiences and relate different stories to encourage each other and share advice. According to Wang, the intention of the group event is to lighten the psychological load borne by family members of the patients and to enhance their caregiving skills. In the US, there are numerous similar Alzheimer’s caregivers’ associations to address the needs of families and friends providing long-term care for patients. In China, these kinds of local, nonprofit organizations are very rare. Cao Guirong, a Beijinger who often visits IMH to ask doctors for advice regarding her Alzheimer’s-affected husband, participates in every support group session. She told our reporter that she has always hoped that someday there will be a community-based nursing home which can provide daytime care for her husband so that she can have a little time for herself. According to Liu Yu, even in the developed world, Alzheimer’s patients are mostly taken care of by their families, even though

NEWSCHINA I December 2015

such community-based care centers are a vital service for long-term caregivers.

Solution and Setbacks

Nearly 44 million people worldwide have Alzheimer’s or another type of dementia, according to the ADI. By 2050, the organization believes that number will have quadrupled. Many countries are beginning to realize the sheer scale of the challenge presented by the increasing prevalence of Alzheimer’s. According to a study published in the journal Alzheimer’s & Dementia, the global cost of the disease was about US$604 billion in 2010 alone. More and more countries have incorporated the research and prevention of Alzheimer’s into national plans, and are investing more into the development of its medication. In 2011, US President Barack Obama signed the National Alzheimer’s Project Act, making it a national goal to “prevent and effectively treat Alzheimer’s disease by 2025.” The following February, the Obama administration announced a historic US$156 million investment earmarked to tackle the disease. Many European countries and Japan also have national strategies for combatting dementia in place. Several medications have been approved by the US Food and Drug Administration (FDA) to treat symptoms of Alzheimer’s, such as Aricept (donepezil), Exelon (rivastigmine), and Razadyne (galantamine) for mild to moderate cases and Namenda (memantine) for severe ones. Yet “all existing medications for treating Alzheimer’s can only ease symptoms, and on top of that they may cause serious side effects,” said Shen Yong, director of the Roskamp Institute’s Center for Advanced Therapeutic Strategies for Brain Disorders and professor at the University of Science and Technology of China. Professor Zhong Chunjiu of Fudan University’s Institute of Brain Science said that no new medications for the disease have been approved by the FDA since 2003, despite the efforts dedicated to Alzheimer’s research. In recent years, a few once-promising medications were declared failures during the third phase of their clinical trials. “Normally, the R&D process for one new medication requires over 10

years and costs at least US$10 billion,” Zhong said. According to a 2012 report published by Pharmaceutical Research and Manufacturers of America, from 1998 to 2011, 101 attempts to create drugs for the treatment of Alzheimer’s were unsuccessful. “In that time three new medicines have been approved to treat the symptoms of Alzheimer’s disease; for every research project that succeeded, [about] 34 failed to yield a new drug,” the report said. Due to the high cost of developing Alzheimer’s-related drugs and the low rate of approval, many of the world’s largest pharmaceutical companies have pulled back investments in this area. Shen Yong has personally encountered setbacks while researching Alzheimer’s medications. One project he once participated in lost over US$100 million. Yet he remains passionate and active in this field. In his words, “as a medical scientist, the ultimate goal is to free patients from suffering.” Shen and his team have found that using chronic thalidomide (a substance which has been found to hinder tumor growth) may be an alternative approach for Alzheimer’s prevention and therapy. “Presently, we are experimenting with the drug’s chemical structure so as to reduce its side effects,” Shen told our reporter. “The innovated medicine is in the second phase of clinical trials.” Globally, scientists’ attempts to develop new Alzheimer’s medications never stop. Despite the setbacks, researchers are constantly making advancements. For example, earlier this year, University of Queensland scientists found that non-invasive ultrasound technology can be used to treat Alzheimer’s and restore memory function. “China’s scientific research into Alzheimer’s still lags far behind that of other countries,” said Zhong Chunjiu. At the Alzheimer’s Association 2013 International Conference held in Boston, only 30 of the 4,000 participating scientists were from the Chinese mainland. Insiders admitted that the number of Chinese researchers was proportionally small, and current financial support for Alzheimer’s research is limited and inconsistent. Zhong said that a national-level strategy with sufficient government support is key to tackling a health crisis of this magnitude.

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international

Japan’s Constitutional Reinterpretation

Eyes on the East

Protesters call upon Japanese Prime Minister Shinzo Abe to protect the country’s pacifist constitution, Tokyo, October 2, 2015

Japan recently passed legislation that reinterprets its pacifist constitution. NewsChina examines what this reveals about the tense tug-of-war that is SinoJapanese relations By Li Jia

njoying the cherry blossoms in Japan became very popular among Chinese tourists last year. For the 2016 blossomwatching season, Natsuo Yamaguchi, head of the Komeito party in Japan’s ruling coalition, hopes to host a special guest. On October 15, 2015, he invited Chinese President Xi Jinping to see the cherry blossoms in Tokyo next spring. The Chinese Foreign Ministry has confirmed that Yamaguchi also delivered a letter from Japanese Prime Minister Shinzo Abe to Xi, conveying Abe’s wish to hold a bilateral meeting with him on the sidelines of an upcoming interna-

tional conference. The next possible occasion would be the APEC Summit in mid-November. If the two leaders ultimately meet, the chances are that cherry blossoms will not be the main topic of discussion. The subject Chinese and Japanese leaders will most likely dig into is national security. This issue casts a long shadow on their views on history and present states of mind. On September 19, the Japanese Diet approved a highly controversial package of security bills that reinterpret the country’s postwar pacifist constitution to allow Japan to take action not only when NEWSCHINA I December 2015

the country itself is under attack, but also when someone attacks its allies, notably the US. While Japan justified the shift by stressing current security challenges, China noted that Japan’s military and security actions “have been closely watched” by all “due to historical reasons.” Chinese foreign ministry spokesperson Hong Lei described the legislation as “an unprecedented move taken by postwar Japan in the military and security fields,” and questioned “whether Japan is going to drop its exclusive defense policy and deviate from the path of peaceful development it has followed since World War II.” The two countries are also in a row over UNESCO’s decision to add Chinese documents about the Rape of Nanking, also known as the Nanjing Massacre, to its Memory of the World Register. On October 18, Abe became the first Japanese prime minister to tour a US aircraft carrier, a visit that was regarded as a symbol of the US-Japan security alliance that is to be further reinforced by Japan’s new security legislation. In the meantime, a trilateral meeting of Chinese, Japanese and South Korean leaders is scheduled to be held in Seoul in early November, after a three-and-a-half-year suspension. In mid-October, Chinese State Councilor Yang Jiechi met with Abe in Tokyo and also held a high-level political dialog with Shotaro Yachi, Secretary General of Japan’s National Security Secretariat, the second such dialog in three months. They all agreed to keep up the momentum of improved relations that started early this year, and to try to make the upcoming trilateral summit a success. Individual exchanges between China and Japan, either through tourism or think tanks, are on the upswing as well. With this sociopolitical backdrop, analysts do not see war in China and Japan’s future, but whether or not the newly passed security legislation stunts this fragile relationship’s growth remains to be seen.

Pacifist History

The current Japanese constitution was drafted by authorities from the General Headquarters of the Supreme Commander for the Allied Powers in February 1946, promulgated after some adjustments by the Japanese Diet in November of that year and put into effect on May 3, 1947. Article 9 enshrines the permanent renunciation of war as a nation’s sovereign right, along with the threat of using force as a means of settling international disputes. Debate over the article’s interpretation in terms of Japan’s self-defense rights has persisted since the law’s inception. There were lawsuits in Japan involving the constitutionality of the existence of the Self-Defense Forces (SDF) as well as the US’s military bases in Japan. The mainstream academic view, and the stance of successive Japanese governments, has been that Japan can exercise the right to individual self-defense, or fighting back against wrongful armed attacks on the country itself, but is barred from performing what the UN Charter terms “collective self-defense,” or helping its allies retaliate against

NEWSCHINA I December 2015

armed attacks. This is the constitutional basis for what is known as Japan’s exclusively defense-oriented policy. Before the new package of security bills was proposed, Japan’s Cabinet Legislation Bureau (CLB), the highly respected government body that interprets the constitutionality of Japanese laws, had, since the 1960s, constantly resisted pressure from political conservatives to change this interpretation, according to a September report published by the US’s Law Library of Congress. In 1954, when a law was passed to reorganize what was then called the National Police Reserve into what is now known as the SDF, Japan’s upper house passed a resolution to ban dispatching the SDF overseas. In 1968, the Three Non-Nuclear Principles that prohibited the manufacturing, possession or introduction of nuclear weapons into Japanese territory were adopted by the Japanese government and ratified by the Diet in 1971. In 1976, by expanding the restrictions on exports of weapons and military technologies, the Japanese government imposed a de facto ban on such exports.

Salami Slicing

Things started to shift in the early 1990s. At that time, the Japanese government began to “salami slice” those restrictions, as some analysts have put it. Instead of hacking down the entire ban, it pushed its limits bit by bit. Its US$13 billion contribution to the US-led coalition during the Gulf War was dismissed as “checkbook diplomacy” and was omitted from Kuwait’s official expression of thanks after the war. Taking this as a diplomatic humiliation, Japan passed a law in 1992 to enable it to join humanitarian activities in noncombat areas of UN peacekeeping operations (PKO). As Abe said in his speech to the US Congress this past April, since the enactment of the PKO law, 50, 000 SDF personnel have been sent on peacekeeping missions in a number of countries, including Cambodia, Mozambique and South Sudan. Restrictions on the use of weapons and the export of military equipment and technologies, as well as limits on the geographical areas in which Japan can support US military operations, were all relaxed further in the years following the PKO law’s ratification through amendments and temporary laws. These were passed in response to security issues on the Korean peninsula and to US pressure for more Japanese contributions to US military operations in Iraq and Afghanistan. Chinese analysts generally believe these adjustments also reflect a change in the Japanese political landscape that began in the late 1980s. The Japan Socialist Party, who favored the pacifist constitution, was greatly undermined by Japan’s rise to world economic power status, the ensuing stagnation and the end of the Cold War. For example, during his tenure as Japanese prime minister from 1982 to 1987, the hawkish Yasuhiro Nakasone pursued the revision of Article 9, which failed. Most adjustments that relaxed the restrictions, particularly the passage of the three war-contingency laws, took place between 2001 and 2006 when the nationalist Junichiro Koizumi was in office. In 2005, the ruling Liberal Democratic Party (LDP) pub-

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international

Japanese Prime Minister Shinzo Abe during a fleet review aboard the Maritime Self-Defense Force (MSDF) ship Kurama, just prior to his tour of the nuclear-powered aircraft carrier USS Ronald Reagan, Kanagawa Prefecture, Japan, October 18, 2015

lished its first proposal for a constitutional amendment, replacing the second paragraph in Article 9, which prohibits maintaining “land, sea and air forces” and the right of belligerence. The first law detailing the procedure for a national referendum for constitutional amendment was enacted in 2007 during Abe’s first term as prime minister. Then, when the LDP lost the upper house at the end of 2007, revising Article 9 basically stayed off the government’s core agenda until the end of 2012, when the Abe-led LDP returned to power.

China Concern

China clearly carried a lot of weight in Japan’s recent security legislation. In the cabinet decision submitted to the Diet in May, a “shift in the global power balance” was given as the first reason behind the legislation. At a Diet hearing on the security bills in July, Abe and his defense minister directly named China as a threat, a move that shocked Japanese media. Revisions to the US-Japan defense guidelines that strengthen their security alliance, the first such changes since 1997, were finalized even before the bills were submitted to the Diet. Both the US and Japanese foreign and defense secretaries highlighted the importance of these new guidelines in the rebalancing of the Asia-

Pacific region. Chinese analysts paid particular attention to two changes in the new US-Japan defense guidelines that were highlighted in a US Department of Defense press release. One is the now “seamless” cooperation between the US and Japanese militaries. Besides humanitarian and disaster relief, the two sides will work together on surveillance, reconnaissance, and defense against missile, space and cyber attacks. The other is that US-Japanese cooperation will go beyond the geographical range set by previous laws and move into the global arena. Besides, new conditions have been set for the use of force in SDF’s global operation, which is now allowed in “situations where an armed attack against a foreign country results in threatening Japan’s survival,” as explained by Japan’s defense white paper released in July, which also singled out China as a threat. Although Diet approval is required for these actions, ex-post facto approval is allowed in some cases. This has caused widespread concern in and outside of Japan that the Diet would not have the ability to constrain government power. In an article for the Chinese edition of NewsChina, Peking University researcher Hu Bo concluded that the conditions necessary to justify a use of force have faded from the clear concept of an armed attack on Japanese territory to the vague notion of a “threat.” And, he added, a small circle in the cabinet will ultimately be the people who decide how Japan will judge and respond to potential threats. Some Japanese cabinet members’ remarks and actions have fueled such concerns. Taro Aso, Japan’s deputy prime minister and minister of finance, suggested in a July 2013 speech in Tokyo that Japan could learn from Nazi Germany in regards to its technique of changing the Weimar Constitution quietly, without being noticed by the public. (He later retracted these remarks.) In his speech on the 70th anniversary of the Hiroshima bombing on August 6, Abe did not mention Japan’s long-standing Non-Nuclear Principles, though he confirmed the commitment later after domestic criticism. According to the Study on Japan’s Nuclear Materials released on October 9 by the China Arms Control and Disarmament Association and the China Institute of Nuclear Information and Economics, Japan holds enough plutonium to make 1,350 nuclear warheads, as well as 1.2 to 1.4 tons of highly enriched uranium, which is far more than what Japan would need to produce nuclear energy. Chinese and international analysts have thought that Japan is a “threshold” nuclear NEWSCHINA I December 2015

Original text of Article 9 of the Japanese Constitution RENUNCIATION OF WAR

state for years, one that is technically ready to make nuclear weapons but chooses not to do so for political reasons. This has been confirmed by the Carnegie Endowment for International Peace.

Future Tense

Despite all this, Chinese and international analysts do not think that Japan is on a militaristic path towards war with China. They are generally cautiously optimistic about the short- and mid-term future. Professor Tang Chongnan, honorary president of the Sino-Japanese History Association, believes pressure from the US and the Japanese public, China’s own increased military capabilities and a basically stable SinoUS relationship would be strong enough to prevent the Japanese government from going too far. As he told NewsChina, “no nuclear weapons” is the bottom line of the US’s policy towards its alliance with Japan. In his September 28 lecture in Beijing, Professor Liu Jiangyong, vice dean of the Institute of Modern International Relations at Tsinghua University, said the US-Japan security alliance would collapse if Japan were to make nuclear weapons. Cultural exchanges between the two countries are increasingly important. Many young Japanese people have joined the protests against the legislation. Japanese media and legal scholars are increasingly skeptical about the legitimacy of the legislation. For example, it recently came to the attention of the press that the CLB did not keep records of its internal discussions that led to Abe’s amendment, making it “almost impossible to examine the process of the constitutional reinterpretation,” according to a Japan Times editorial. Liu noted that “this is the best time to develop a better understanding between Chinese and Japanese people,” adding that sports events, particularly the 2018 Winter Olympics in South Korea and the 2020 Summer Olympics in Japan, would provide good opportunities. A messages from the Chinese government to the Japanese public would probably help as well. In his speech at the first National Memorial Day for Nanjing Massacre Victims on December 13, 2014, Xi stated that the purpose of the ceremony was to “recall that every good-hearted person yearns and holds a firm stance of peace, but does not try to prolong hatred,” and “[we] should not bear hatred against an entire nation just because a small minority of militarists launched aggressive wars.” Tang Chongnan said some Japanese officials told him they were deeply touched by this expression of goodwill. China’s official response to the passage of the security legislation was per-

NEWSCHINA I December 2015

Article 9. Aspiring sincerely to an international peace based on justice and order, the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as means of settling international disputes. In order to accomplish the aim of the preceding paragraph, land, sea, and air forces, as well as other war potential, will never be maintained. The right of belligerency of the state will not be recognized.

ceived as restrained. High-level contact intensified instead of fizzling out, as it used to when contentious events occurred. This is probably because of the urgent need to avoid military conflicts, and China’s wariness of giving the Japanese government further pretext to describe China as a threat. In addition, exactly how Japan’s security laws will be implemented remains to be seen. J. Stapleton Roy, former US ambassador to China and founding director emeritus of the Kissinger Institute on China and the United States, told NewsChina that his impression from the frequent meetings he has attended recently was that Chinese and Japanese officials expressed confidence that the current progression towards improved and stabilized relations will continue. He does not think the shift in legislation will change that trend. New proposals for easing regional tension have recently gained more support. The general consensus at an October 19 forum sponsored by Peking University was that the Asia-Pacific region needs its own security architecture, something that could perhaps be achieved by elevating existing platforms, such as the East Asia Regional Forum. Chinese analysts believe Abe will push forward the revision of Article 9 if the LDP or its coalition secures a majority in the upper house in the 2016 elections. The idea of revising Article 9 is also supported by some Japanese people who oppose Abe’s methods. It seems that the tug-of-war between tensions and improvement will continue for some time, but fortunately, war remains unlikely. 

economy

Commentary

Down to Business

China needs new perspectives and new actions to convince the market and alleviate fears that the world’s second-largest economy is spiraling By Li Jia

t has been a tumultuous few months for the world economy. In September 2015, the market watched nervously as the US Federal Reserve considered raising interest rates and Chinese leaders explained their plans to mitigate the impact of China’s current growth slowdown and build new economic engines. The sweeping stock sell-off in late August brought the world priceearnings ratio, a share valuation measure, down to its 1987 median value by the start of September, according to the Bank of International Settlement (BIS). Commodity prices on the international market continued to dip, reaching a 16-year low as measured by the Bloomberg Commodity Index at the end of August, reducing profits in commodity-producing economies. Major emerging economies, including Russia, Brazil, Turkey, Malaysia and South Africa, have been regarded as a significant source of risk for the global economy after their currencies suffered significant depreciation during the same month, greatly increasing their foreign debt burden. Market observers worried that if the Fed raised interest rates in September, the first such action in nearly a decade, it would trigger capital flight from other parts of the world, particularly from emerging economies whose currencies had been weakening against the strengthening US dollar since the second half of 2014.

In August, the stock market in China struggled to recover from its mid-June chaos, and real estate investment declined. The sudden yuan depreciation that resulted from a foreign exchange rate policy change was interpreted as an official confirmation of the country’s economic deterioration. Meanwhile, new growth engines have yet to gain enough strength. These have fueled already pervasive fears that if China runs out of steam, commodity prices and the global economy could be dragged into a deeper downturn. The market needs to be reassured that China’s growing pains today are both tolerable and worthwhile.

Discouraging Data

China’s Producer Price Index fell in August for the 44th month in a row. As a result, profitability for such industries as mining, manufacturing and utilities was well below the interest rate on their loans. The Consumer Price Index remained below target. Chinese Academy of Social Sciences (CASS) professor Yu Yongding noted at an August 30 forum in Beijing that these indicators show China had already been trapped in deflation, which could exacerbate China’s debt-to-GDP ratio, the highest in the world, and threaten the potential for growth. Many Chinese and international economists share this opinion. Also NEWSCHINA I December 2015

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People walk past a billboard advertising a planned upscale shopping and office complex in Beijing, October 19, 2015

in August, the Caixin Purchasing Managers’ Index recorded a six-year low, reflecting business contraction in the private manufacturing sector. On August 11, the People’s Bank of China (PBoC), China’s central bank, announced a sudden change in the foreign exchange rate system. The yuan’s interbank benchmark value set by the central bank would be influenced more by the closing price of the previous trading day than by the central bank’s daily whims. The main purpose is to make the exchange rate more market-oriented. As the yuan’s price on the interbank market had already been much lower than the parity price for some time, reflecting the buildup of devaluation pressure, the new policy immediately led to a nearly 3 percent slump in the parity price within three trading days. This was a minor correction from the yuan’s 15 percent rise in real effective terms over the previous year as measured in July, according to the IMF. However, market watchers did not believe the PBoC’s reform rhetoric, and interpreted the step as the Chinese government’s tacit recognition that the country’s economy had deteriorated to such an extent that a drastic currency depreciation was necessary to save the country’s exports, which experienced a 7.3 percent year-on-year fall during the first seven months of 2015. Worse still, the market pessimism over NEWSCHINA I December 2015

China’s economy has led to the assumption that the depreciation may become so intense in the future that it will force China to burn through its foreign exchange reserves to prop up the yuan.

Overreaction

During their international visits and meetings this September, Chinese leaders took advantage of every opportunity to try to ease the market jitters. At this year’s World Economic Forum held on September 10 in Dalian, Liaoning Province, Chinese Premier Li Keqiang highlighted the country’s low unemployment rate, rising service sector, growing consumption, faster growth in residents’ incomes compared to that of the GDP, as well as signs of strong movement in tech-oriented industries and business startups. Indeed, China’s growth targets over the decades have always been closely linked with the unemployment rate. In addition, the targeted growth rate set for the year is now “about 7 percent.” As Li reiterated in Dalian, something either a bit above or below the line is acceptable. Revised forecasts for China’s growth in 2015 by major international institutions, including the IMF, the World Bank, Goldman Sachs, JP Morgan, the BIS and the OECD, stand between 6.8 and 7 percent, falling comfortably into the “about 7 percent” range. Some Chinese

economy

economists, including Yu Yongding and Professor Cai Fang, deputy head of CASS, believe that even an average growth rate of 6 to 6.2 percent for the next five to 10 years would be sufficient, taking into account the labor and capital supply. Since the end of August, international investment banks and analysts have recognized that the market overreacted to China’s short-term stock market chaos and growth figures as well. However, these facts are often simply ignored by the market, as investors, particularly those in the stock market, tend to overreact to short-term changes. No one can change that. This is why managing market expectations is always so difficult and important. At the end of September, China declared that there was further decline in industrial profitability in August, and the Fed hinted that an interest rate hike was coming soon. The equity markets in China and the rest of the world, along with international commodity prices, plummeted at this news. There are other reasons for this persistent and sometimes excessive reaction to China’s changing growth figures. Although everyone has been talking about the “new normal” ever since last year, when Chinese leaders highlighted the idea of slower growth now for better growth in the future, it is still taking time for investors to accept the reality in practice. Professor Nouriel Roubini of New York University is known as Dr Doom for his predictions of the 2008 global financial crisis and early warnings of China’s economic crash, yet even he recently told international media that investors were switching from exuberance over China’s two-digit growth rates to excessive pessimism too quickly. “China is not in free-fall,” he said at a recent forum in Italy. This is largely attributed to China’s GDP-centered growth model and politics, which have guided the market focus since the late 1970s. There have already been calls from some analysts that it is time for China to officially make other signposts just as important as the GDP in economic policies, such as the unemployment rate, which is used by the Fed. This is particularly important at a time when China is trying to shift its growth model from being quantity-based to being quality-based. Using indicators other than the GDP will send a much stronger, more direct signal to the market that China is serious about the shift. Past problems also affect today’s confidence. Professor Lu Feng of Peking University’s National School of Development has studied deflation in recent years. He thinks it is necessary to rethink what he terms “deflation panic syndrome” in international analysts, an affliction rooted in the memory of the Great Depression of the 1930s.

Fresh Perspective

Certain voices in the market are urging bigger monetary and fiscal stimulus. Catering to this pressure may not be a good idea. It may not be a good idea, either, to wait for investors to calm down, as their panic could lead to a self-fulfilling crisis. Instead, fresh perspectives could be useful both for investors and policy makers. Professor Lu Feng describes China’s current deflation as “neutral,” with some positive aspects. According to data from the National Bu-

reau of Statistics, China’s most serious price slump now is in upstream sectors that expanded too fast during the 2003-2008 boom, as well as in 2010, such as coal, steel and oil production. In Lu’s view, while this has worsened corporate balance sheets in those sectors, it also shows the market is successfully squeezing the bubble, something the government has tried to do in vain for years. Similar things, he added, can be said about the fact that individual incomes are now growing faster than the GDP, a long-expected change that will help boost consumption and social equality. Indeed, the rise of retail sales has been so stable that those numbers were rarely a part of the debate over China’s economic downturn. It has proven to be the most reliable buffer amid the downward pressure felt by the whole economy. This buffer would not be possible without consistent income growth and low prices. In the first eight months of the year, the value of China’s imports plunged by 14 percent, according to the General Administration of Customs of China. This figure has also been used by analysts as proof that demand in China has shrunk significantly. However, a closer look at the details would find that the decline is mainly due to the commodities’ lower prices rather than lower quantities. For example, as a major buyer in the world market, China imported 0.2 percent less iron ore in 2015 than recorded over the same period last year, yet the amount spent was down by 43 percent. While resource-intensive areas in China have felt the pinch of cheaper commodity prices, Lu said, less developed midwestern provinces have benefited from the reduced production costs and reported higher growth in the first half of the year.

New Moves

While a closer look at past records can help unfold more truth into the present, it is much more difficult to read the future in the rubric of current policy. A major concern of the market is the uncertainty of whether China’s troubles today can be taken care of by installing a market-oriented economy tomorrow. In this regard, the whole world is watching for China to give the market “a decisive role,” a goal enshrined in China’s reform agenda in November 2013. The government is trying to renovate both the private and Stateowned sectors. Much of the red tape blocking entrepreneurs from starting up and running their own businesses has been reduced. The number of companies in China has increased more quickly since 2013 than the average from the previous decade. This fact, along with the wide use of the Internet, has made Internet-based services a part of daily life for Chinese consumers. This has boosted China’s low-end, labor-intensive services market, such as catering, which had previously been regarded as saturated. New services related to the tech industry, from entertainment to professional consultancy, are emerging all the time. However, these services are all adjacent to markets that already exist. Some innovative projects that create cutting-edge solutions aren’t seeing the light of day. Mao Xiao, a Tsinghua University graduate, has had little luck in the past few years getting her new smart household power meter off the ground. She faces two problems. One is NEWSCHINA I December 2015

The state of Chinaâ&#x20AC;&#x2122;s economy in the first three quarters of 2015 (% change from the same period in 2014)

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Ms Zou, a housewife in Wuhan, Hubei Province, becomes a parttime courier with e-commerce platform JD.com in July. More than 100,000 people in 21 cities have done the same

insufficient intellectual property rights protection. Under the existing rules, she cannot apply to protect her method of data collection and analysis. The other is the existing electricity industry. Mao is missing out on many potential partners, as retail power companies simply will not exist until reforms open up the market. She has to wait for the State grid monopoly to break up and loosen the whole power supply chain. A lot of other innovators in this industry, she said, are in the same situation. In mid-September, long-anticipated guidelines on State-owned enterprise (SOE) reform were unveiled. They focused on improving the efficiency of SOEs by lessening administrative intervention into their business decisions, a concept that has been hailed by the market. However, onlookers are disappointed that crucial reforms have yet to be enacted, such as removing the exclusive business licenses or privileged access to production resources, including land, capital energy and telecoms services, that SOEs enjoy. Without these reforms, the commitment to equal access to production factors and a level playing field for all companies, regardless of ownership, can hardly be realized. Rules on mixing private investment into SOEs were specified at the end of September. These policy changes, however, have not fully dismissed the lingering controversy over pricing of State-owned assets, which brought the previous round of SOE reforms to a halt in the early 2000s. Unlike central SOEs, local SOEs today are mostly fundraising platforms for local governments, so their reform is linked with the issue of massive local government debts, noted Zhao Changwen of the DevelNEWSCHINA I December 2015

GDP growth Fixed asset investment in agriculture Fixed asset investment in industry (manufacturing, utility and mining) Fixed asset investment in the service sector Land purchased by property developers Social retailing sales (price-weighted) Residentsâ&#x20AC;&#x2122; disposable income (price-weighted) Unemployment Import value Trade surplus

Sources: China National Bureau of Statistics / China General Administration of Customs

opment Research Center of the State Council at a recent meeting at Peking University. The solution proposed so far is also inviting private investment in public projects. Indeed, many government documents have been issued over recent years to encourage private engagement with State-dominated sectors, projects or companies, but private investors remain hesitant. They are afraid of being accused of buying State assets at a discount, or facing contract breaches by the government. Consumers are frustrated with high prices caused by SOE monopolies on the one hand, yet on the other hand, they are concerned that the services provided by private operators, once they are introduced into the utility market, will be even worse. No government document can deliver true confidence and fair practices in the economic world, no matter how complete its provision. The only thing that can accomplish this is the law, when it adequately defines and protects fair economic practices. The role of the law has been mentioned, but not highlighted, in these documents. It appears that the reform progress will depend on good officials, rather than a mechanism that encourages and imposes good conduct. Chinese laws to be followed, such as the Corporate Law, the Bankruptcy Law and the Contract Law, have to be specified in all reform documents. More importantly, the market needs to see at least one or two cases in which contract disputes between governments and private companies are brought to court, and do not merely appear in media, academic or official reports. The best way to manage market expectations is to provide more progress on the rule of law, something that is beyond the scope of the marketplace.ď&#x192;Ş

economy

Virtual Reality

Seeing is Believing

How are Chinese companies engaging in one of the tech world’s most exciting frontiers? NewsChina investigates By Lu-Hai Liang Visitors play a first-person VR shooter at the China (Beijing) International 3D Virtual Reality, Industrial Simulation Technology and Products Exhibition, October 9, 2015

ur reporter is immersed in a three-dimensional virtual world, armed with a gun-like weapon in his right hand. Voice commands allow him to move through the digitized environment, while, outside the visor, he is standing in a bland, white conference room in Beijing. The tutorial continues with a command to jump off a cliff. Extreme vertigo ensues, the eyes and brain unable to discredit what they perceive. Our reporter is playing a beta version of a game called Finding, designed by a startup established by former Peking University students. To play Finding, you need to own a Samsung Galaxy S6 smartphone and its virtual reality (VR) visor attachment, the Gear VR. The phone handset slides into the VR headset, with its screen becoming the user’s entire field of vision once the Gear VR is placed on the head. The Samsung Gear VR is one of a number of consumer-orientated VR devices currently shaking up the tech world. While posited as the future of consumer entertainment since the late 1980s, VR is touted more than ever before as a brave new world, with the tech industry excited by its possible applications. The main players currently developing VR hardware are Sony, with device Project Morpheus; the aforementioned Samsung Gear VR; HTC and

gaming industry heavyweights Valve Corporation, who teamed up to develop the HTC Vive headset; Microsoft’s HoloLens; Google’s Cardboard; and Oculus VR with its headset the Oculus Rift. Oculus VR made the biggest splash when the company was bought by Facebook in March 2014 for a whopping US$2 billion. This massive price tag slapped on what was then a small, independent company, brought VR technology, constantly in development but largely seen as a disappointing flash-in-the-pan brainchild of the ‘80s and early ‘90s, back to global attention.

Throwback

The development of the Oculus Rift, a head-mounted VR display, was initially funded by a Kickstarter campaign launched in the summer of 2012, which reached its US$250,000 funding target within four hours. A year later the company secured US$75 million from Series B venture funding, led by venture capital firm Andreessen Horowitz. One of the firm’s co-founders, Marc Andreessen, a wellknown Silicon Valley tech mogul, joined Oculus VR’s board of directors. Less than four months later, on March 25, 2014, Mark ZuckerNEWSCHINA I December 2015

Photo by IC

Visitors try out 9D virtual reality “pods” at the China (Beijing) International 3D Virtual Reality, Industrial Simulation Technology and Products Exhibition, October 9, 2015

berg announced that Facebook would be acquiring Oculus VR for US$2 billion in cash and Facebook stock. That same month, Sony announced Project Morpheus at the Global Game Developer’s Conference in San Francisco. The Project Morpheus VR headset is designed for use with Sony’s latest consoles, the PlayStation 4 and the PS Vita, and while there is currently no official release date, Sony says the Project Morpheus headset will be released in the first half of 2016. But it was Oculus who brought the concept of VR to China, at least according to Chinese tech blogger Nada. A computer science graduate, the 27-year-old Lu Daye, who uses “Nada” as an online handle, has been tracking the development of the VR industry for years. Nada, who is from Hunan Province in southern China, launched the country’s first tech blog solely devoted to VR tech, vrerse. com, in September last year. “There was nothing before Oculus,” he told NewsChina. Now, he claims, there are more than 100 companies making VR hardware in China. The biggest names in Chinese VR are Noitom Technology, who raised US$571,908 on Kickstarter last year for their prototype motion-tracking device; KATVR, who are developing an omnidirectional treadmill and “racing chair;” ANTVR, who launched their headNEWSCHINA I December 2015

set in the fall of 2014; and Baofeng Mojing, an affiliate of Baofeng Technologies that manufactures VR headsets. Baofeng Technologies attracted headlines when its stock rose 4,200 percent in only 56 days of trading after the company went public on China’s stock market in April of this year. Dr Galvin Fan met with NewsChina in Beijing to talk about his company uSens Inc, where he is vice president of strategic development. A US company founded by Chinese developers, uSens is headquartered in San Jose, California, with offices in Shenzhen, Hangzhou and Beijing. The company’s latest development is the Impression Pi, one of the first VR headsets to combine 3D gesture control and visuals in a device that only requires a cell phone to use, which he allowed our reporter to test. Wireless, light and portable, the device allows users to walk around freely. The VR environment itself was simple; a galaxy of stars and planets fills the user’s field of vision, while multicolored balls, with which the user can interact, drop into view. Fan told our reporter that VR hardware will be similar to that currently available for PC and smartphone headsets. “It’s a special category of devices that cannot be replaced,” Fan said. “The volume might not be that big, but it will become a very significant [category].” He

economy china

New foreign investor accounts/month, 2015

Number of new accounts in China’s Ashare market opened by RMB (Chinese yuan) Qualified Foreign Institutional Investors (RQFII) in September, the smallest increase since January. Source: China Securities Depository and Clearing Corporation Limited

60 50 40 30 20 10 0

QFII (Qualified Foreign Institutional investors)

RQFII

Jan’15

Feb’15

Mar’15

Apr’15

May’15

Jun’15

Jul’15

Aug’15

Sept’15

0.852

US$619bn

Index of business operation challenges for Chinese enterprises in 2015, a number higher than the rate of 0.84 reported in 2014.

Volume of corporate debenture (longterm, generally fixed-rate loans) issued in the first eight months of the year, 14 percent greater than the same period in 2014, with the value recorded in August at a record high of US$105bn.

Percentage of enterprises hoping for further policy support in specific areas of business operation

Source: People’s Bank of China

16%

Legal rights protection

Share represented by mergers and acquisitions in total foreign direct investment in China for the first nine months of 2015, compared with 5.8 percent in the same period of 2014.

No unlawful fees

90 80 70 60 50 40 30 20 10 0

Cheaper financing

KATVR, whose product KAT WALK uses an omnidirectional treadmill to track wholebody movement within virtual reality, is a Chinese company based in Hangzhou. The company’s device was created, according to Nada, to solve the problem of how to “simulate real space, in a tiny physical space.” “There is no ideal solution for that right now, you have to invent something from scratch, software and hardware,” he told our reporter. “The omni-directional treadmill is a step, but far from ideal.” It has been projected that VR will have many different applications in entertainment (creating virtual museums and parks, for example); in health, particularly the field of physical rehabilitation; the military; and education. American Tony Christopher’s Landmark Entertainment Group is hoping to build a series of “virtual-reality aquariums” across China. Christopher has said he has had interest from 10 Chinese cities and is hoping to break ground in a year’s time. A market research report from Business Insider predicts that VR shipments alone will create a US$2.8 billion hardware market by 2020. This compares to current estimates of US$37 million. However, some industry analysts predict that AR – Augmented Reality – will be a bigger deal. AR differs from VR in that VR aims to immerse users in a virtual world, while AR adds layers or virtual objects into the real world. Google Glass, for example, is a potential AR device as it allows users to see through and around it, resulting in only partial immersion. A report from techcrunch.com predicted a US$150 billion combined AR/VR market by 2020, with AR securing 80 percent capitalization. Whether it’s a game like Finding, where users can entertain themselves while fully immersed in a virtual world, or a project like Christopher’s virtual aquariums, the ambitions of VR developers are unquestionably soaring. It is too early to tell whether or not their achievements will reach the same heights. 

Fewer administrative approvals

Ambitious

bynumbers

Tax reduction

confidently predicts that the Chinese VR market will be worth US$50 billion in the next five years – a quarter or a third of what the Chinese smartphone market is currently worth.

Source: Ministry of Industry and Information Technology of China

28th China’s ranking out of 140 world economies listed in the Global Competitiveness Index 2015-2016, the same position it held in the 2014-2015 list Source: World Economic Forum

Source: Ministry of Commerce of China

China’s best and worst rankings in sub-indices

Market size 1 Macroeconomic Environment 8 Innovation 31 Tech readiness 74 Higher education and training 68 Goods market efficiency 58 NEWSCHINA I December 2015

NEWSCHINA I December 2015

environment

Carbon Trading

Trade Off

Regarded as one of China’s major initiatives to combat climate change, the plan to implement a national carbon trading scheme by 2017 is still facing a lot of uncertainty

Photo by CNS

By Wang Yan

In a bid to cut their carbon emissions, Xinfa Group, a power company in Shandong Province, demolished the company’s eight coal plants, August 11, 2015

ith the United Nations Climate Change Conference starting November 30, 2015, in Paris, a joint statement on climate change issued by Chinese President Xi Jinping and US Presi-

dent Barack Obama on September 25 was hailed as a silver lining after years of stagnation in UN climate talks since the eventful Copenhagen round in late 2009. “The recent joint announcement strength-

ens the common ground shared by both sides on climate change and may make them a model for other developed and developing nations to follow, while boosting everyone’s confidence that this year’s upcoming cliNEWSCHINA I December 2015

Pilot Performance

China has committed to making sure its greenhouse gas emissions peak by the year 2030, but the absolute ceiling at which emissions will peak has yet to be announced. According to estimates by the Paulson Institute, an independent think tank located at the University of Chicago, the cap for China’s carbon emissions may range from three to four billion tons, with a carbon market size of up to 64 billion yuan (US$10.1bn) per year. China’s National Development and Reform Committee (NDRC) has predicted a national carbon market cap of two to three billion tons, which still allows China to eclipse

NEWSCHINA I December 2015

Photo by CNS

mate change meeting in Paris will end with positive results,” said Teng Fei from Tsinghua University’s Institute of Energy, Environment and Economy during a recent interview with caixin.com. Apart from announcing a 20 billion yuan (US$3.1bn) fund to support other developing countries in combating climate change, an amount just over the US’s previous pledge of US$3 billion to the Green Climate Fund, Xi also made another significant announcement in the joint statement: China plans to establish a national “cap-and-trade” program, which will be the world’s largest emissions trading system (ETS), by 2017. As the world’s largest greenhouse gas emitter and its second-largest economy, China is increasing domestic efforts against climate change and gearing up to play a leadership role in helping the developing world mitigate and adapt to climate change. Joshua P. Meltzer of the Brookings Institution wrote a commentary in late September describing China’s ambitious ETS as the “most noticeable element” of the joint statement. He added: “The decision by China to introduce a national cap-and-trade system stands in increasingly stark contrast to the absence in the US at the federal level of a national program (or even a serious political debate) on carbon pricing.”

Workers make final checks on a new solar plant in Lianyungang, Jiangsu Province, December 26, 2014

the EU as the world’s largest carbon market. China’s ETS, once established, will set a cap on CO2 output and force firms to buy or sell allowances to meet their individual emission requirements, thus providing a monetary incentive for them to reduce their emissions. China’s endeavors in carbon trading can be traced back to October 2011, when it declared it would set up seven pilot regional carbon markets. They are located in Shenzhen, Beijing, Shanghai, Tianjin and Chongqing, as well as the provinces of Hubei and Guangdong. Since mid-2013, the seven pilot schemes have been rolled out successively and some 2,052 enterprises have been required to participate in the system so far. By July 31, a total of 51.7 million tons of carbon allowances, at a combined value of about US$308

million, were traded under these plans, according to the Paulson Institute. Yet, as these pilot programs have been operating individually, each region’s market has performed differently. According to the 2015 China Carbon Pricing Survey that was conducted jointly by China Carbon Forum and ICF International, prices in the seven pilot schemes have fluctuated significantly. “Prices in many schemes temporarily rose following their establishment in 2013 and 2014 (prices in Shenzhen even exceeded 100 yuan [US$15.75] per ton for a short time in October 2013), but then declined and stabilized throughout late 2014 and early 2015,” reads the report. “In May and June 2015 prices in most schemes dropped sharply, largely due to oversupply

environment

of allowances.” When the survey was taken in mid-2015, prices ranged from 9 yuan (US$1.42) per ton in Shanghai to 42 yuan (US$6.61) per ton in Beijing. “For a healthy, intact carbon market, once the price runs too low, it may indicate there’s a surplus of allowances and that the overall emission cut target is lethargic,” explained Jiang Enjun, senior researcher at Energy Research Institute, in an interview with NewsChina. “However, in China, so far the market is in its trial period, and prices, largely manipulated by some market forces rather than being adjusted by emission allowance demand, cannot fully indicate the present condition of the carbon market.” As pilot projects, these seven different places can hardly be judged to be performing well or poorly either through indicators of its price or the amount traded. For example, Hubei Province appears to have traded the largest amount of allowances, but that is only because it allows for intermediary companies to trade allowances between themselves, a practice the other six pilot areas do not allow. On the contrary, companies in Chongqing, due to the city’s reluctance to participate in the scheme as it may impede its economic development, traded very little, with some days passing without any trade at all. Although analysts expected a surplus of emission allowances as it is an inevitable result of the recent downturn of the domestic economy (lower production equates to lower emissions), China’s carbon market prices cannot be considered the same gauge as those of the more established ETS in the EU. The Climate Group Greater China Director Wu Changhua told our reporter that it is only when China acquires a sound legal basis for its carbon market, sets detailed policies for the implementation of emission targets in different stages and forms mature mechanisms to allocate allowances, that the price may become a meaningful indicator for a healthy carbon market. “So far, the complicated system in China

[needed] to develop a national ETS is far from complete,” Wu added.

Company Reaction

When the pilot schemes launched, most enterprises required to participate had absolutely no conception of what carbon trading was. Dimitri de Boer of China Carbon Forum told NewsChina that, despite local governments’ mandates that high-emission enterprises take part in the carbon market, there were some who simply refused to buy allowances and said they would not pay a fine when the pilot programs began in 2013 and 2014. In Hubei Province, 138 enterprises with annual energy consumption exceeding that produced by 60,000 tons of standard coal were included in the pilot scheme. Fang Li (pseudonym), the director of the science and technology department within a large petrochemical company in Hubei who spoke on condition of anonymity, started to take government-organized training programs on the carbon market in March 2013. She told the reporter that it was not difficult for her company to fulfill its compliance in 2014 with the free allowances the government issued to the company that year (most allowances in China are free, rather than sold at auction). “Through the application of a new waste gas recycling technique last year, not only is our company producing an extra 10,000 tons of natural gas annually, we’re also making an extra 1 million yuan (US$157,000) selling our saved allowances on the market,” she said. Fang also told our reporter that most eligible companies in Hubei are rather active in the process, yet there are some she knew of that were slow to respond and only traded to comply with the local government, putting off trading until shortly before the deadline. “An unwillingness to participate in the carbon market is a universal attitude amongst enterprises, particularly when most industries are facing overcapacity,” Wu Changhua said. “Thus, it’s very important for the government to have the proper policies in place

to stimulate enterprises’ enthusiasm.”

Improvements Needed

Industry analysts and researchers agree there are major problems with the current carbon market: a lack of openness, transparency and fairness; a flawed system of allowance allocation which does not reflect real industry conditions; and an inadequate monitoring, verification and reporting system. Fang Li told the reporter that when the national ETS is formed, her company’s biggest concern would be the system’s fairness, i.e. the allocation of allowances. So far the most successful ETS in the world remains the EU’s. “Since our government still offers free emission-allowances to enterprises and there is no timetable so far for the cancellation of the free allowance system... The ETS in China cannot be compared to the EU ETS; strictly speaking, it is not a real ETS,” said Jiang Enjun of the Energy Research Institute. The national ETS to start in 2017 would cover such key industry sectors as iron and steel, power generation, chemical, building materials, papermaking, and nonferrous metals. These sectors were selected for two main reasons, according to Wu Changhua. “First of all, these key industry sectors account for about 60 percent of [China’s] total emissions. Secondly, data collected during the past decade for these sectors is comparatively complete, [making it easier] to establish a reliable ETS.” The once-trumpeted EU ETS has exhibited imperfections, with slumping prices eroding the system’s power to motivate potential polluters. “To conclude whether China’s ETS is going to be effective or not, we need to see whether there is real trading within its system, whether the trading can stimulate technological innovation, and push companies to take measures to cut emissions, ” Wu Changhua told NewsChina. “We need to wait and see.” NEWSCHINA I December 2015

NEWSCHINA I December 2015

advertorial

Fair growth:

Hardware expo boosts industrial cluster F

rom September 26 to 28, 2015 the China Hardware Fair was held in Yongkang, a city located in the eastern province of Zhejiang. This year’s event was a special one: It marked the expo’s 20th anniversary. Looking back on its 20-year history, the China Hardware Fair has developed from a lesser-known hardware trade expo into a highly influential event that attracts businesses from home and abroad. In 2014, Yongkang’s GDP totaled 45.1 billion yuan (US$7.1bn). That represented an impressive tenfold increase from the figure recorded in 1996, when the city held the first China Hardware Fair. Its fiscal revenue reached 6.9 billion yuan (US$1.1bn) in 2014, a 31-fold surge from its 1996 revenue. This year, Yongkang ranked 74th on China’s list of its top 100 most economically competitive counties. The city has also become one of China’s manufacturing hubs, creating everything from doors and drinking cups to electric tools and leisure vehicles. And the China Hardware Fair is seen as a driving force behind this massive change.

A leader of the exhibition industry

As the 20th China Hardware Fair kicked off, Hu Zhenqian, owner of drilling bit retailer Drilling Bit World, embraced one of his busiest days of the year. He cleaned his shop, tidied up the shelves and put new items on display, waiting for buyers from around the country to peruse his products. When the event first began 20 years ago, Hu was only a small hardware supplier based in the local Hardware City market. Thanks to this influential trade platform, his business has become a prominent supplier with a nationwide reputation in the hardware industry. In fact, the China Hardware Fair has helped many grassroots entrepreneurs in Yongkang develop their small family workshops into large companies. With the help of the expo, Yongkang’s hardware manufacturing sector has flourished and transformed into a modern industry with

high technology, high added value, and high-quality products. At the first China Hardware Fair, Li Qiang, then-Party secretary of Yongkang and now the governor of Zhejiang Province, outlined the goal of “making Yongkang a global competitor and a global hardware hub.” Now, this vision is becoming a reality. Li Qiang was a key figure in the creation of this trade expo. Amid doubt and pressure, he made the bold decision to launch the first China Hardware Fair in October 1996. That first event saw transactions totaling 589 million yuan (US$71m), including US$17.2 million from overseas businesses, as well as 285 transactions of patents totaling 13.8 million yuan (US$1.7m). This successful start paved the way for a bright future. In 2011, the 16th China Hardware Fair relocated to the newly built Yongkang International Convention and Exhibition Center. Its new home boasts an exhibition area of 80,000 square meters. The center, with nearly eight times more exhibition space than the previous venue, offers a larger stage for Yongkang’s hardware manufacturing industry, as well as the city’s convention and exhibition sector. This year, the 20th China Hardware Fair remained an increasingly popular event: 2,138 applications were filed for a booth at the fair, 73 applications more than the previous year. After a strict screening and selection process, 1,660 applicants obtained permission to participate in the exhibition. The China Hardware Fair has become the largest, most effective and most influential hardware expo in the country.

Driver of regional economy

The convention and exhibition industry is seen by economists as a driver of regional economy. In Yongkang, the industry, led by the China Hardware Fair, has expanded foreign trade and investment, while providing a boost to Yongkang’s hardware manufacturing sector and market. With the help of the hardware expo, Tianxing Group, a hardware maker in Yongkang, has developed from a small family business with NEWSCHINA I December 2015

only four employees and a 40-square-meter workshop to an industry leader with both annual revenue and tax contributions growing at an average rate of 30 percent annually. “We were one of the earliest fair participants. We have made a name here, and our exports of copper products have been on the rise,” said Mr Lyu, director of the company’s general office. A large number of other local manufacturers have, like Tianxing Group, also prospered and developed overseas thanks to the expo. The event now attracts businesses from more than 100 countries, including Russia, Brazil, Italy and Australia. It helps Yongkang’s hardware makers expand internationally, while bringing a global market into the city. At the same time, each expo season is also accompanied by surging sales at the emporium China Science & Technology Hardware City, with orders pouring in and business partners visiting from abroad. Yongkang manufacturers’ exports totaled around US$60 million in 1997. By 2014, that figure had surged to US$4.9 billion, an eyepopping 81-fold increase in 17 years. In the first half of 2015, the spot transactions of businesses within China Science & Technology Hardware City totaled 20.3 billion yuan (US$3.2bn), a 4.5 percent increase compared to the previous year; during the same period, those businesses’ online transactions jumped 22 percent to reach 12 billion yuan (US$1.9bn), more than half the amount of their brick-andmortar transactions. Conventions and exhibitions help propel the regional economy. According to the Global Association of the Exhibition Industry, such an event can contribute eight to 10 times its revenue to other parts of the local economy, including the catering, accommodation, entertainment and tourism sectors. Led by the China Hardware Fair, a series of expos on doors, machinery equipment, building materials and cars have also mushroomed in Yongkang. Within the past two years, the city has held 33 expos, with transactions totaling 21.1 billion yuan (US$3.3bn). The booming exhibition industry has become a bright spot for the local economy.

Internet Plus Expo

Throughout the China Hardware Fair’s 20-year history, it has experienced constant upgrades in scale and quality. For example, in 2003, the event launched its online presence. The 2013 fair saw the launch of the China Yongkang Hardware Index, a measurement based on hardware product prices which has made its way onto the official website of China’s Ministry of Commerce. The move has helped lift the pricing power of Yongkang’s hardware manufacturing industry. As the central government rolls out its “Internet Plus” strategy, the China Hardware Fair is also embracing the trend. In 2014, the expo included a cross-border e-commerce summit and

NEWSCHINA I December 2015

the launch of a large-scale online shopping campaign with e-commerce giant Alibaba. The 20th China Hardware Fair utilized the new smartphone app Smart Expo. By scanning the app’s QR code with WeChat, a messaging app, users can search for booths, products on display and participating exhibitors. The Hardware City Group has also created its own e-commerce platforms, namely Smart Market (zhihsc.com), and Top Hardware (shangwj. com), integrating offline resources onto online spaces in a bid to build the country’s most influential online hardware-trading platforms. These websites’ robust growth and positive prospects are now attracting offline hardware markets across the country. Now these platforms have more than 72,000 registered members, with total transactions topping 86 million yuan (US$13.5m) since their test launch on May 20. The expo’s official website has been upgraded with the function of online transaction, allowing businesses to browse and purchase products online without having to attend the event. Xia Ting, general manager of the Hardware City Group, says the company will continue to ride the tide of “Internet Plus Expo.”

culture

Jia Zhangke

“Love is Like Tapas” Photo by Zhen Hongge

Director Jia Zhangke meets with NewsChina to reveal the story behind his latest work Mountains May Depart prior to its theatrical release

Jia Zhangke and his wife Zhao Tao, the lead actress in Mountains May Depart

By Wen Tianyi and Yuan Ye

hen visiting his aunt in the mountains near his hometown more than 10 years ago, Jia Zhangke, from afar, witnessed a family walking amid the melting snow. The words “mountains may depart” immediately leaped into his mind. When asked about the curious phrase by our reporter, Jia responded: “There is time. There is space.” By the time he was struck with the inspiration for what would become his latest project, Jia had already risen to become one of China’s most famous art movie directors both at home and abroad. His 1997 debut feature Xiao Wu, shot on a shoestring budget of 400,000 yuan (about US$50,000), won him at least six international awards. Focusing on sensitive and ignored social groups – such as pickpockets and prostitutes in Xiao Wu – and adopting cinematic expression redolent with the direct, quiet detachment more commonly associated with documentary filmmaking, Jia persisted in his commitment to the pursuit of alternative cinema in the years after Xiao Wu. After releasing several semi-autobiographical works, in

2006, Jia directed Still Life, which explored the mass migration resulting from the building of the Three Gorges Dam. The movie won Jia the Golden Lion for best film at the 2006 Venice Film Festival. It was also the last of Jia’s films to be screened publicly in his home country – until recently. “For reasons everyone knows,” as Jia phrases it, his works, including the features 24 City (2008) and A Touch of Sin (2013), as well as several documentaries and short movies, have not been approved for general release on the Chinese mainland. Both focused on contemporary social problems in China – 24 City depicted the lives of three generations of workers in a State-owned factory, and A Touch of Sin dramatized a series of recent social conflicts that turned violent. Despite Jia’s continued commitment to social realism, as he has aged, Jia feels he has accumulated a certain number of “interior experiences” that, he told NewsChina, need an “outlet.” It was this desire that prompted Jia to shoot Mountains May Depart. With a narrative spanning the years between 1999 and 2025, the

movie is divided into three acts set in three distinct time periods – 1999 (the past), 2014 (the present) and 2025 (the future). Shifting away from his usual approach of depicting the relationship between the individual and his specific social reality, Mountains May Depart focuses instead on the characters’ emotional trajectory. For years, Chinese audiences have only seen Jia’s name in reports from international film festivals or in the credits of pirated DVDs. Jia said this situation has made him “embarrassed,” especially when fans tell him they have only ever seen his work through piracy. He told NewsChina he feels “sorry” for his audiences, adding that he hopes “we won’t miss each other” in his latest offering. Indeed, with Mountains May Depart, it seems Jia is finally coming in from the cold. The movie will be released on the Chinese mainland in late October. NewsChina: What was your original intention when shooting Mountains May Depart? Jia Zhangke: Just after A Touch of Sin, I startNEWSCHINA I December 2015

ed thinking about making a movie focusing on people’s emotional lives. Although there was an emotional aspect to A Touch of Sin,, it was principally about violence and social change – individual crises caused by social problems. What I wanted to express in Mountains May Depart is that, in recent years, many of our choices – values, new technology and lifestyle – have brought huge changes to our emotional lives. When people are in their 20s, they may think only about love affairs. As time goes on, they will have a family, and then aging parents. After [turning] 40 in particular, many previously hidden aspects of life suddenly unfold. Birth, aging, illness and death all share space with love. To me, love is like tapas – it needs time to feel things out and understand. In Mountains May Depart, I expand a very long timeline to express my understanding of love and affection. I do feel it’s marvelous to see affection combine with time. NC: Why did you separate the movie into three acts? What is the factual base of the final act, which is set in the future? Jia: I don’t see Mountains May Depart as a three-act movie. I’d rather view the narrative as three stages of life in which the stories of two generations are intertwined. When I first wrote the screenplay, I didn’t plan to expand [the plot] into the future. Yet, gradually, I started to wonder what the future of the child in the movie would look like. The child’s life is passively decided by his parents’ choices. His mother makes two important choices in the movie. She marries for money. When she and her husband divorce, she lets him raise their child as she believes that a wealthy father will mean a better education and future for the child. Therefore, when I finished the act set in the present, I felt obligated to continue into the future and reveal the ultimate fate of the child. To some extent, I think we can confidently try to determine our futures instead of dwelling on the present. NC: Were you trying to express some social viewpoints in Mountains May Depart? Jia: In the current situation and under China’s present system, pretty much everyone’s lives are somehow similar, although some are very NEWSCHINA I December 2015

wealthy. I mentioned in a recent speech that I do not like it when people say that characters in my movies are representative of the “underclass.” I’d rather call these characters the “powerless.” There are so many of them. Even if you become rich, you might still be powerless. One minute you’re the boss, the next minute you’re done.. NC: Many critics, especially in the West, claim that “through your movies one can comprehend China.” Is that fair? Jia: I don’t have any obligation to determine the fate of a nation. The French critic Jean-Michel Frodon wrote in an article that Jia Zhangke as a narrator helps people to understand what is going on in China. Yet, when I make a movie, my intention and focus are not to ‘tell the fate of the country.’ Such a task is too big – it’s too difficult to depict an entire country comprehensively in a single movie. It’s not what an artist needs to do. China changes so fast. I’m always interested in the feelings and life crises that individuals experience when going through these changes. I’d like to record and express them. NC: In Mountains May Depart, you depict choices relating to lifestyle, familial affection and communication. In general, what do you think is the fate we all have to face? Jia: It’s loneliness. My parents inspired aspects of what the main character goes through. My parents loved each other deeply. However, when my father passed away suddenly, in 2006, I found my mother became a very lonely person. We, her children, could never replace our father, her spouse. Now she lives with me and we meet once in the morning and once in the evening. However, what does she do in between? I don’t know. There is no one with her. If my father were around, they would do things together. I realized that every one of us will ultimately have to face this kind of lonely and bitter end. Sooner or later, one partner will leave the other. Though such things are still some distance away for me, it still makes me sad when they come into my mind. NC: It is said you own a small noodle restaurant in your home province of Shanxi. What do you do outside of work?

Jia: Life is not only about movies. There was a time when I realized that everything around me – my activities, the people I met and the things I did – were all related to movies, and it almost drove me insane. I had become a slave to filmmaking and it was wrong. I needed something more. Actually, the noodle restaurant in Shanxi is more like a club. It’s not open to outsiders and it’s where I meet my childhood friends and schoolmates. We talk about interesting things from our past and gossip and argue about current events, which really cheers me up. NC: Being an artist, do you care about audiences’ opinions and comments? Jia: The reason I shoot movies is that I have a strong desire to communicate, though it’s not necessary for me to know who my audience is. I have retained my enthusiasm. After all, movies are mass media. I’d like to share my emotional world with others through filmmaking. However, a willingness to communicate doesn’t mean you are going to appeal to others. As a director, criticism from all quarters is unavoidable, but you need to learn to live with it. If the criticism is reasonable, you accept it. If it’s not, let it go. NC: You have taken a realistic approach to filmmaking. You once said that the tradition of “quotidian realism” has largely been lost in Chinese movies. What is your opinion now? Jia: The situation has improved, but the cinematic tradition remains broken. Before 1949, Chinese people belonged to clans and regions. Yet after 1949, people became organized. The Party is an organization, so are other bodies like trade unions and the Communist Youth League. Through the process of being organized, as well as under the influence of revolutionary theories of art and literature, we ignored ordinary, daily life in the pursuit of those literary and artistic esthetics. In the works of the “fifth generation” directors, there is a movie called Lost Art [1985] by director Zhang Zeming. I like it very much. It was shot in Guangdong and it focused squarely on everyday concerns. Later, at the Beijing Film Academy, I watched Angels on the Road [1937], which I also felt was an honest and lively depiction of everyday life in China.

Courtesy of Laibach

culture

Promotional poster for Slovenian rock band Laibachâ&#x20AC;&#x2122;s North Korean tour

NEWSCHINA I December 2015

Laibach in Pyongyang

Rocking the Boat

As the first Western rock band to perform in North Korea, Slovenian group Laibach has drawn the attention of world and Chinese media. NewsChina talks to the band about China’s secretive and mysterious neighbor By Liu Yutong

“

Edelweiss, edelweiss, every morning you greet me,” Laibach’s Milan Fras sang on stage at Pyongyang’s Ponghwa Art Theater on August 19, 2015. Steps away from the theater is the Ministry of People’s Security building of the Democratic People’s Republic of Korea (DPRK). About a thousand North Koreans saw the avant-garde industrial metal band from Slovenia firsthand. It was the first time a Western rock band performed in North Korea. Yet for most of the time, audience members sat quietly and responded to the band with polite applause. Only when the concert was over did they stand up and applaud loudly, which, to the band, looked more like a “mechanical, prearranged procedure” to celebrate that “the show was finally over.” But the band was comforted to learn that “an old North Korean man from the audience summed our main achievement up quite brilliantly when he was interviewed by the Associated Press after the concert,” a band member who goes by the pseudonym Ivo Saliger told NewsChina. “He said: ‘I didn’t know that such music existed in the world. And now I know that it exists.’” The 50-minute gig was one of the performances celebrating the 70th anniversary of the Korean peninsula’s liberation from Japanese control. The band performed nine songs, including a cover of The Beatles’ “Across the Universe,” several songs from the movie The Sound of Music and Korea’s famous folk song “Arirang.” The stage’s LED screen flashed images of the rising sun, infinite sky, the country’s Mount Paektu and rockets, symbols which frequently appear in North Korea’s propaganda. Laibach’s usual backdrop of war scenes and people dressed in unconventional costumes wasn’t accepted by the country’s censors. NEWSCHINA I December 2015

The next day, the band’s final concert of its two-show tour went well, too. North Korean leader Kim Jong-un didn’t go to either show or the band’s rehearsal, even though Laibach’s performance was a national first. “Maybe he was too busy restarting the conflict in the [Demilitarized Zone] with South Korean loudspeakers,” Saliger said. On August 20, the day of the second show, North Korea fired a rocket at South Korea, which retaliated with artillery fire. Tensions rose on the Korean peninsula, with Kim even threatening an attack on South Korean loudspeakers if they continued to blast propaganda across the border.

Bridging

Norwegian director Morten Traavik worked for a year to arrange Laibach’s tour in the DPRK. As one of the few Western artists who has established a stable connection with North Korean authorities, Traavik acted as an intercontinental bridge, successfully organizing a number of cultural communication and exchange projects between North Korea and his homeland. In 2012, because of his efforts, North Korean teachers taught the Norwegian army a mass performance method that accompanies the folksong “Arirang,” which they performed for the public in the Norwegian town of Kirkenes. In 2014, Traavik directed Laibach’s music video for “The Whistleblowers,” one of the band’s most recent tracks. Laibach members’ radical music and visual esthetic in which they adopt symbols of totalitarianism, neo-nationalism and state power, though often exaggerating everything to the edge of parody, convinced Traavik that North Korea’s officials might find rapport with the band’s message. So Traavik went to Laibach with a proposition — a North Korean tour.

culture

“By bringing a band like Laibach to North Korea we introduced a new way of looking at artistic expression – that art can be read in many different ways,” Traavik told NewsChina. In his opinion, for a country like North Korea where art and public expression in general is expected to carry a positive message of state propaganda or be only political decoration, Laibach’s tour was “no small step.” When the band agreed to the tour, Traavik started communicating with North Korea’s authorities. Many wondered whether he had received backing from Kim Jong-un directly. “It is a misconception that Kim Jong-un personally decides every little detail of what is going on in North Korea,” said Traavik. He told NewsChina that he just collaborated with officials from the country’s Ministry of Culture and its Committee for Cultural Exchange in order to receive official approval for the concerts.

Prepared Spiritually and Mentally

This past June, Traavik received an email from North Korean authorities confirming the performances. With that email came a wave of pressure, as such an avant-garde band had never before performed in one of the world’s most secretive and mysterious countries. Traavik sent the band members a personalized guide to brief them for the shows, suggesting they not be “openly critical of the system.” “Remember that in this project we are all pioneers – both us and the North Koreans – and a lot of experiences will be new to everyone,” he wrote in the guide. As Traavik was busy ironing out the details with North Korean officials, Laibach’s members returned to the Slovenian city of Trbovlje, where the band originally formed, and rehearsed at the performing arts center Delavski Dom (Worker’s Hall). Besides “trying to obtain as much relevant information about North Korea as possible,” they were “spiritually and mentally” preparing themselves “collectively at Mount Kum, a mountain near Trbovlje,” Saliger told NewsChina. Perhaps to better engage their new audience, the band members decided to cover three traditional North Korean songs – “Honorable Life and Death,” “We’ll Go to Mount Paektu” and “Arirang.” They also prepared four songs from the movie The Sound of Music, as it is used in North Korean schools as part of the English-language curriculum. They also picked a selection of Laibach “classics” – “Life is Life,”

In traditional Korean costume, Laibach’s vocalist Milan Fras sings on stage at Pyongyang’s Ponghwa Art Theater, August 19, 2015

Europe’s “The Final Countdown,” The Beatles’ “Across the Universe” and “The Whistleblowers.” “All songs are somewhat similar to uplifting Korean pop and marches,” said Saliger.

Compromise

On August 12, Laibach arrived at the Pyongyang airport. They were received by officials from the Ministry of Culture and the Committee for Cultural Exchange. Soon after, photos of Laibach members in North Korea’s “people’s suits,” plain gray outfits styled after those favored by DPRK officials, started to pop up on news sites from around the world. These suits were commissioned for the band members by North Korean authorities. But “it was our idea to have these suits made, and we wore them as a sign of respect for North Korean culture and tradition,” said Saliger. Although they sent all the lyrics and their Korean translations in advance and received no objection, the band members were still met NEWSCHINA I December 2015

Photo by IC

Laibach members in “people’s suits” in Pyongyang

with interference from censors during their one-week rehearsal period in Pyongyang. They were instructed to skip “Honorable Life and Death” and “We’ll Go to Mount Paektu.” “Both ‘Honorable’ and ‘Mount Paektu’ are songs that have a special significance politically and ideologically in North Korea,” said Traavik. “When Laibach did their versions… the songs were no longer recognizable to[the censors]... They were worried that the audience would react negatively and think that Laibach was making fun of and disrespecting the Korean culture.” Nonetheless, the band members weren’t frustrated. “Of course we had to make some compromises – we always have, even when we play in the United States, Russia or the country we’ve always wanted to play but haven’t had the chance yet – China,” said Saliger. The only Korean song Laibach was allowed to play was “Arirang,” for which they combined the traditional Korean arrangement with bubblegum pop and experimental electronics. A female North Korean pianist accompanied them on the song, which earned the night’s NEWSCHINA I December 2015

biggest round of applause. Overall, during both concerts’ 50-minute sets of nine songs, all went well. “The vice minister of culture, who is a musician himself, was very happy with the concert,” Traavik told NewsChina. “And we also got a very positive review in the Rodong Sinmun,” the daily newspaper of the Worker’s Party of Korea and an official mouthpiece for the North Korean government. The band felt they had experienced something special. “The general people of Korea are definitely the brightest jewel in the country. We couldn’t find any cynicism, sarcasm, irony, vulgarity and other ‘Western characteristics’ in their eyes, on their faces and in their behavior,” said Saligor in an interview with Rolling Stone. But of course everything wasn’t rosy. “Pyongyang is a leisurely, comfortable city to walk around – if they let you walk around,” he said. The band members and their entourage were taken care of by five Korean “helpers, guides and translators” who also made sure that they did not act “too freely” and vanish into the night.

visual REPORT

Supersize Star Joey Castillo, a 37-year-old, 200-kilo Chicagoan, shot to fame in China after appearing on the Beijing TV show of comedian “North American Brother Sway” in 2014. Castillo went on to appear in the Beijing TV annual “Spring Festival Global Gala.”He has since married a Chinese woman, who interviewed him for his current position with JPMorgan Chase, Beijing Branch, with whom he has two young sons.

NEWSCHINA I December 2015

3 1 4 1. Castillo with a poster for one of his personal appearances, August 6, 2015 2. Castillo has a background in theology, and holds faith healing workshops for friends 3.At home with his mother-in-law and his youngest son Etan 4. Castillo and his wife are attempting to set up an English language teacher training company 5. With his beloved car NEWSCHINA I December 2015

visual REPORT

1 2

NEWSCHINA I December 2015

1. Castillo has commenced a weightloss program 2. With his massage therapist

3. At the pool 4. A leaflet promoting Castillo’s company in a pizza parlor 5. Castillo’s debut on the talk show of comedian “North American Brother Sway,“ September 4, 2014

NEWSCHINA I December 2015

OUTSIDEIN perspectives from within China

Wild Hainan

Shelling Out

Hainan’s Tourism Association describes the island as China’s answer to the tropical paradise of Hawaii. But the similarities don’t end with palm trees and golden beaches. An organization in Hainan aims to emulate conservation work that began successfully in Hawaii, and resurrect the island’s critically endangered sea turtle population By Alice Stevenson

ea Turtles 911 is working tirelessly to rebuild Hainan Province’s population of sea turtles, which has suffered massive decline as a result of poaching and environmental factors such as tourist litter and marine pollution. Whilst sea turtles were a frequent sight in the island province’s waters in the past, sightings are now a rarity, and their total numbers are continuing to decrease. The efforts of Sea Turtles 911 hope to change this and through research, education and conservation work, encourage a regrowth in the island’s turtle population. They also offer a great alternative vacation for those not so keen on Hainan’s tacky resorts. I was lucky enough to be able to volunteer with Sea Turtles 911 in June 2015 as they released rescued turtles across Hainan as part of an event for World Oceans Day. In conjunction with several hotels on the island, the organization orchestrated the release of five sea turtles. The event was unique in that it represented a larger gathering of representatives from Hainan’s tourism industry than had previously been seen. Even more important, these enterprises were coming Silver Fox Cave

together with the united cause of highlighting marine conservation. The release of the sea turtles emphasized the focus on maintaining and rebuilding Hainan’s ocean ecosystem, which has suffered neglect as the island has chased the tourist dollar. The organizers hoped that, following their release, the five reptiles would return to their original feeding grounds.

Learning

My trip to Hainan as a volunteer began in the city of Haikou, the provincial capital. Haikou is less popular with travelers than the southern city of Sanya, and boasts fewer swanky hotels and touristfriendly beaches. Yet the city has its own charm, from the crumbling facades of the Old Town’s colonial-era buildings to the deserted sands of Baishamen, when I visited populated only by a few weather-beaten Chinese men attempting to get a tan. A university in Haikou that is the base for local turtle research – the marine biology department has excellent facilities for carrying out such work. NEWSCHINA I December 2015

Committed

The work I undertook was varied, and required enthusiasm and flexibility. It was with some bemusement that I found myself filling the role of turtle babysitter on the eve of World Oceans Day – I was tasked with standing guard over two green sea turtles until they could be delivered to their release locations. While the turtles weren’t the best of company, the most encouraging element was observing the response from passersby as they walked past us on the beach where the turtles were temporarily resting. Everyone was enthusiastic about the event, in awe of the beautiful animals and eager to know more about sea turtle conservation. Truly a step in the right direction in a culture that traditionally would have seen turtles as dinner, or a potential source of material for making jewelry and ornaments. In the markets of Hainan, turtle meat is still sold openly, and in the malls you can purchase combs and sunglasses made from turtle shells, despite the fact that such trade is now illegal. As the law has failed to protect these animals, it falls to activists to raise awareness of their plight by tapping into growing public interest in conservation. This enthusiasm was in evidence on World Oceans Day itself, when crowds of hotel staff and guests turned up to the beach at the hotel Raffles Hainan to watch my fellow volunteers and me assisting with the morning release. After an introductory speech, the event was ready to begin. The turtle, who we had named Raffles in a nod to our hosts, was lifted into the water and, after a little confusion, swam happily off. We strained our eyes following his progress towards the sunny horizon. Later that afternoon we repeated this formula at Howard Johnson Resort Sanya Bay. I plucked up the courage to give a speech outlining all that I had learned about the plight of sea turtles and their important role in the ocean ecosystem. It like an appropriate culmination of my sea turtle experience, emphasizing both how much I had learned

NEWSCHINA I December 2015

Photo by Alice Stevenson

It was at Hainan Normal University that I had my first chance to learn about the work carried out by Sea Turtles 911 and was given the opportunity to get up close and personal with the animals themselves. I assisted in weighing and measuring them, part of the constant work required in monitoring their growth and recovery – sea turtles are particularly vulnerable to infection and illness. Utmost care was required when handling the creatures – although their history extends back hundreds of millions of years, before dinosaurs walked the earth, these deceptively sturdy-looking reptiles require attentive care and protection in order to ensure the survival of their species. I won’t forget the smell of the lab in a hurry – a pungent stench permeated every space, which emanated not from the animals themselves, but rather their doughy feed, made up of sand blended with fermented shellfish. The following day, scrubbed clean, we were headed from Haikou to Sanya, in preparation for the big release event. Volunteer work with Sea Turtles 911 does not follow a set structure, unlike many volunteer programs, but instead allows you to work to your strengths in order to maximize your efficiency.

A volunteer helps protect a sea turtle from tourists

Getting There

There are multiple daily flights to Sanya and Haikou from most major Chinese cities, with several flights a day from Shanghai and Beijing. Transportation on the island is great, with a modern train system and comprehensive (and comprehensible) bus services, though things become stretched during the high season.

Getting Involved

If you are interested in volunteering with Sea Turtles 911 and think that you have the skills and enthusiasm to make a difference to its team then you can email the organization at volunteer@seaturtles911.org. If you have been inspired by the team’s cause and want to learn more, you can go to the website www.seaturtles911.org which gives information on the organization’s research and rescues. Through the website you can also donate to the cause or adopt a turtle of your own.

Where to Stay

In Sanya the accommodations cover all points along the price spectrum. If you are looking for real luxury and exquisite service then Raffles Hainan, set in peaceful Clearwater Bay, is the perfect choice. Rooms start at 1800 yuan (US$283) in the low season but the price is worth it for the attention to detail, not to mention the outstanding breakfast buffet. For those on a budget, the hostel Sanya Backpackers offers clean rooms and good proximity to Dadonghai beach and the facilities there. Dorms here begin at 40 yuan (US$6) while private rooms are available from 75 yuan (US$12) per person.

Photo by Alice Stevenson

travel

A baby turtle perches on the hand of a tourist

and also how willing the Chinese public is to engage with worthwhile causes. Beyond the sea turtles, though, is Hainan all it’s cracked up to be? Quite simply, yes. If you’re looking to lie on a beach and gaze up at a cloudless sapphire sky, then Hainan is ideal. The weather in the summer months is searingly hot, rarely dipping below 30 degrees Cel-

sius. It’s also humid, so it’s a good idea to make sure you have access to a pool or beach (most hotels and all resorts do). The high season is from October to December, when the temperature hovers in the more manageable mid-20s. Hainan merges the holiday beach idyll with uniquely Chinese cultural elements, though those hoping to experience authentic local culture really do need to climb off the sun lounge and get out into the sticks. It is all too easy to relax within the confines of the luxury hotels that Hainan has in abundance, but beyond the Sanya coast there is a lot more to be discovered. The center of the island, with its emerald valleys and untouched forest landscape, is well worth exploring. The island also offers numerous activities from cycling to surfing for the more active traveler. My volunteering experience on Hainan was a unique opportunity to do something worthwhile whilst enjoying exotic tropical surroundings. The passion and enthusiasm of the team was the icing on the cake. With its clear air and open roads, Hainan is the antithesis to the crowded and bustling image of China. It might not be Hawaii, but sitting back, sipping on fresh coconut water and munching on local seafood is a great escape from the megacities on the mainland. And, while volunteering might not be for everyone, there are few people who wouldn’t enjoy a stay on an island surrounded by golden beaches and turquoise ocean – being able to touch a live sea turtle is just a bonus.

real chinese

gēn

genfeng on-trend

Many Chinese heads have been sprouting recently. A new fashion trend – tiny plastic sprouts or buds attached to hair clips – is getting so popular in the country’s big cities that even old ladies have taken it up. In Chinese, going along with whatever is currently “in” is known as genfeng – to literally “go with the wind.” Genfeng is generally a pejorative term, implying blindly following any fad regardless of individual circumstances. This kind of behavior is becoming so ubiquitous in China that the term can be found describing people in all manner of fields, including, recently, business.

When China’s first batch of mobile gaming startups made a killing by launching addictive games for smartphones, a huge number of other companies attempted to follow in their footsteps, most of which ended up bankrupting themselves. As Chinese-designed apps, many of them shameless rip-offs of existing services, have flooded the Internet, encouraged by the government’s “Internet Plus” policy, the public has begun to bemoan the genfeng epidemic. The media is by no means averse to the allure of genfeng. Online resources, in particular, are singled out for criticism – unsubstantiated, gossipy stories become fodder for

fēng

dozens of web portals, regardless of the accuracy of the reporting. What psychologists call the “herd mentality” applies equally to click-hungry online reporters and their audiences, leading to a profusion of both paeans and polemics, seriously hampering the casual reader’s ability to gain impartial insight into an issue. The phenomenon has attracted much attention from sociologists and industry analysts who warned that the genfeng trend has the potential to derail entrepreneurship and constrict independent thinking – both of which are seen as crucial to developing a healthy society. NEWSCHINA I December 2015

flavor of the month

A Snack to Bray About By Sean Silbert

NEWSCHINA I December 2015

Photo by IC

rom the hero to the hoagie, every place worth a mention has its iconic sandwich. In Beijing, they’re stuffed with donkey. Don’t think for a minute that this is a novelty treat. While Beijing’s tourist markets might serve up skewered scorpions, silkworm larvae and various animal genitalia, eating donkey wouldn’t register as odd. Known as lürou huoshao and often translated as “donkey burger,” the donkey meat sandwich is such a common snack as to be almost a staple. In Hebei Province, this treat is served up everywhere – from tiny roadside stalls to high-end hotels. The cities of Baoding and Hetian both claim to be the originator, though the nearby capital Beijing is as good a place as any to get your fix. You’ll know instantly when you’re in a donkey meat restaurant; giant photos of unsettlingly cute donkeys glower down at you from the walls. I sometimes swing by Wang Pangzi – Fatty Wang’s – which locals laud as the best place in Beijing to get a donkey sandwich. The first branch opened about a decade ago, and the franchise has since expanded across town. The dining room is always bustling, full and rowdy enough that you’ll need to holler to get your order filled. The chef will grab a piece of oily flatbread and toast it in a large, round oven. In the meantime, he chops up a handful of meat on a worn chopping board, adding in some diced green chili and cilantro leaves to the mixture for a little zest. Once the meat has been painstakingly cured, there’s not much skill involved in preparing donkey sandwiches, explaining both their prevalence and popularity. A skilled chef can have a crunchy platter of the things at your table in only a few minutes. The meat is served cold and lean, marbled with natural gelatin. The result is a robust, chewy mouthful that may surprise first-timers: New Yorkers immediately make the comparison with pastrami. This is the interesting bit – donkey meat is essentially the Chinese version of corned beef, reminiscent of the same umami flavor. It is no coincidence: They share a similar method of production and curing, in which the cuts of donkey are brined and cured, becoming infused with a rich red color that can only be produced with saltpeter. You could do the same to beef or lamb (indeed, the Chinese do), and produce a similar result. What’s fascinating, as food writer Christopher St. Cavish notes, is that the Chinese came up with a system for curing meat nearly iden-

tical to those used in Eastern Europe and England, yet it has overwhelmingly been applied to donkey meat, rather than more common cuts. The flatbreads, meanwhile, are also interesting to those familiar with Chinese breads. Served warm, crisp and flaky (donkey lard is used as shortening), the simplicity of this sandwich only leads to two variations – both in the breads used. Hetian buns are round, and the Baoding style (more commonly seen in Beijing) are long and thin, like a hot dog bun. By the time the sandwich filling is chopped, assembled and served in a little wicker basket, the secrets to its preparation (more closely guarded than ever in this era of food scares), it doesn’t matter. The sumptuousness of the lean meat melds wonderfully with the soft, yet crisp, flatbreads. The only drawback is the size – indeed, donkey burgers are so small that two or three are needed to quell a ravenous local’s hunger. As a result, many diners pair their sandwiches with a clear, refreshing soup that cuts right through the grease. The more adventurous might also order up a dish of donkey kidney, or donkey penis (alarmingly cheap, considering its value to its former owner). Every bit of this beast of burden can be consumed – the Chinese would accept nothing less. Some say that eating donkey helps to alleviate depression and anxiety. If you believe the hype, donkey meat is claimed to have particularly healthful side effects: it may increase male virility, improve strength and generally improve your mood. No word yet on whether the beast of burden can make you live forever, but one thing is for sure – it’s mighty tasty.

essay

Panda-monium By Taylor McNaboe

I asked myself the question that I am sure many who visit Chengdu will ponder: Do pandas deserve the hubbub?

Illustration by Liu Xiaochao

Since coming to Chengdu, the ubiquitous popularity of the giant panda has held my attention. In the streets of Sichuan’s provincial capital (and self-declared “Panda Capital”), statues, advertisements and frescoes are testament to this cute critter’s importance to the local economy. Chengdu is the city where, whenever and wherever you enter a taxi, the phrase: “Welcome to Chengdu, home of the panda” greets you in robotic English from the automated meter. Needless to say, the panda is definitely hogging the limelight. The best way to observe this cultural trend is by visiting the place where Chengdu’s reallife pandas reside. By the time I got around to stopping by the Chengdu Research Base of Giant Panda Breeding, a “must-see” local attraction, I must admit that I was already suffering from panda fatigue. I saw pandas all day, every day, without even trying. I’d come to the wrong place. Arriving at the gates of the base, a stark, industrial contrast to the surrounding rural area, the hustle and bustle made me feel like I’d arrived for a Hollywood premiere. Early in the morning, just after the sun came up, eager tourists lined up (well, swarmed) at the entrance to the base, a nodding sea of selfie sticks obscuring signage as the crowds proved to friends back home that they’d made their panda pilgrimage. In the research base there were beautiful, scenic paths winding through the different exhibits; gorgeous lakes and scenery were our appetizer, soured by the public announcements telling us to protect the environment. The biggest surprise was that there were other animals to see – something the marketing materials had failed to mention – and, if so inclined, visitors can get up close with the giant panda’s cousin, the red panda, as well as wandering swans and peacocks. In all honesty, these particular wonders of nature might as well have not been there. Visitors jeered at the “ugly” endangered swans, and instead formed up for an all-out assault on the star attraction.

What was most astounding to me, however, was that the pandas were the least active of all the animals featured in the exhibits. They received overwhelming praise for even the most mundane of actions: eating bamboo, moving, showing any vague signs of life. Giant pandas only really move around at daybreak. Well before lunchtime, they lapse into the familiar lassitude that is both part of their appeal and a major threat to their survival. The fever surrounding this fuzzy, blackand-white bear has surely reached its zenith; panda-mania has spread across the globe, and this animal does more good for Chinese soft power than a thousand trade missions. The heady combination of mass consumer

culture and a burgeoning middle class has allowed savvy entrepreneurs to flood stores and zoos with a tidal wave of panda merchandise – plush toys themselves, movies, books and, yes, panda-themed music. The hype is, to say the least, overwhelming. It gets so excruciating that when I visited the research base, I asked myself the question that I am sure many who visit Chengdu will ponder: Do pandas deserve the hubbub? Do the crowds, the celebrity endorsements and the pop culture tsunami place the giant panda on too high a pedestal? It depends on the way you examine their value. Practically speaking, zoo owners can retire on the proceeds they’ll make from a panda exhibit. Retirement might be advisable, as the lucrative presence of a giant panda, outside China at least, is only ever temporary. Although pandas may appear to be highly profitable, many zoos have to pay ludicrous fees in order to incorporate the pandas into their exhibits. Creating new facilities and equipment in order to accommodate pampered pandas (and impress the Chinese government) is expensive. Although pandas have been massively commercialized, most consumers of panda culture are motivated by good intentions. Protecting our natural heritage is a necessary challenge that must be addressed in China, and not only for the giant panda, but for less cuddly, yet far more threatened species. So long as the circus of media attention also allows conservationists to raise awareness of the plight of endangered species, a little tastelessness is a small price to pay. Exhausted, plodding towards the exit of the research base, it dawned on me. I was asking the wrong question. Whether or not the pompous panda is “worth” the hype is irrelevant. This animal is demonstrably marketable. Indeed, its highly photogenic looks have meant that the giant panda’s ability to sell could ultimately save the species. If only other endangered beasts were as effortlessly cuddly. NEWSCHINA I December 2015

La Dolce China By Olivia Contini

NEWSCHINA I December 2015

Did I really see that? Am I really in China? I thought my mind was playing tricks on me

Illustration by Liu Xiaochao

Though born and bred in Scotland, I come from an Italian family, and have spent many holidays enjoying the joys of Italian life. I am so familiar with the country now that I feel it is my second home. The thought of leaving Edinburgh to study in Hangzhou filled me with trepidation. What would I find? How would I cope? What would I miss? Happy times with my Italian family would be a distant memory. How wrong could I have been? To my absolute delight and amazement, China has embraced me and I feel more at home here than I ever thought possible. Bizarrely, with every corner I turn, China transports me right back to Italy. From the moment I arrived and stepped out of the airport in Hangzhou, something felt oddly familiar. My first taxi ride from the airport to the hostel, despite involving four near-death experiences, felt oddly comforting. The screeching, swaying journey felt exactly as if I were zooming around the tight corners of the mountain road leading to the village of my ancestors in Abbruzzo. Car horns wailing past echoed the city sounds of Naples. Over the next few exciting days, as I began to explore the city, it happened again and again. Things caught my attention that made me look twice. The corner shop tobacconists, barely big enough to fit the stool on which the seller sits. The local handyman’s workshop, lined from floor to ceiling (not excluding the floor and ceiling) with every kind of bolt, nail and screw ever produced. Old friends betting over a game of cards by the West Lake, each with a grandchild sitting on their knees. I had witnessed such scenes so often, but far away in the winding back streets of the villages lining the Amalfi Coast. Surely only in Italy would I see a sunwizened man riding a scooter with 50 or so tiny wooden chairs bound precariously to the back – did I really see that? Am I really in China? I thought my mind was playing

tricks on me. Even while in my dormitory, a beautifully sad piece of Chinese music drifted through the window, reminding me instantly of the melancholic songs of Naples.

Had I been blindfolded, the lingering smells of fresh fish from the market on Wenyi Road could have been those of a fish market in Venice. In Shanghai, after wandering for hours around yet another multi-story shopping complex, I came across an unexpected delight – a narrow street lined with small houses, crammed together, of all different shapes, some with a thin, steep staircase leading up to the door, some with roofs made out of a simple stretch of tarpaulin. Here I found that the locals not only hung their washing out to dry, but also hung their legs of lamb and bunches of chili peppers. While my friend found this peculiar, it seemed like common sense to me – my Neapolitan great-grandmother did exactly the same. And the thing I thought I would miss the most has become the most exciting part of my trip. Of course, the food! Back home I was no stranger to Chinese food, but the real deal is even better than I could have hoped. Here, the menus themselves are mouth-watering, much like in Italian trattorias. I have found that at both Chinese and Italian tables, meal time is an important social event. Dish upon dish upon steaming dish is thrown into the middle of the table for everyone to share. The tempting smells of sticky sweet and sour sauce, fried bamboo shoots and vinegar are too good to resist! When invited to dinner with a Chinese friend and her parents in celebration of the Mid-Autumn Festival, I was reminded throughout the meal to “chi ba! chi ba!,” “Eat, eat!” These are normally my grandmother’s words, and of course I willingly complied. It seems as though slices of my memory from life in Italy have found their way into my day-to-day life in China. While they could easily have triggered bouts of homesickness, they have actually given me great comfort. Before I left for China, my aunt told me, “Remember, don’t be homesick; China is home to so many!” She was so right.

Cultural listings Cinema

‘Loser’ Wins When a middle-aged “Mr. Loser” passes out in a drunken stupor, he dreams he travels back to a time before he got married and his life got messy. He gets the chance to live again – he rebels at school, becomes a huge pop star and marries the beautiful girl who got away. But once again, he loses control of his life and finally dies of AIDS, which wakes him up to reality, changing his perspective on his life and sending him back to his wife. Produced by Mahua FunAge, a well-known comedic theater company, Goodbye Mr. Loser, released in late September 2015, won favorable reviews for its tense comedic plots, nostalgic appeal and strong performances from its cast of stage actors. It grossed an impressive 1.2 billion yuan (US$189m) at the box office in three weeks. Yet controversy has accompanied its success. Besides being accused of copying its idea from the 1986 American movie Peggy Sue Got Married, the movie’s main criticisms are that it promotes chauvinistic values while portraying one-dimensional female characters with little independent personality.

Music

Book

A Story of Seven The concept album Yesternight Yes Tonight, released by Guangzhou-based post-rock band Zhaoze in October, tells the stories of seven different people living in Guangzhou over the 14 hours between dusk and dawn, a period equivalent to seven ancient Chinese units of time called shichen. Combining the guqin, a seven-stringed, zither-like instrument with a 2,400-year history, into the band’s imaginative and powerful music, Zhaoze brings post-rock listeners a completely new experience and bridges the music of a distant past to the present. Accompanying the album is a 40-minute video that the band shot exactly in accordance with the seven shichen. Founded about two decades ago, Zhaoze has released more than 10 full albums and singles. The band’s music has been mostly exploratory and experimental, combining elements of progressive rock, post-rock, avant-garde electronic music and “China Wave,” a genre of music that integrates traditional Chinese features with modern pop.

Zhi China: Shanshui Compiled by Su Jing

Exhibition

Past and Present Su Xinping, one of the most famous artists in China, has a solo exhibition showcasing three decades of his work at the Guangdong Museum of Art and FM Art Space in Guangzhou. It runs from mid-October to late December. Born in 1960 in Inner Mongolia, Su served as a soldier before he attended art school. He received a master’s degree in print making from the Central Academy of Fine Arts in 1989 and stayed at the school as a teacher. His works, mostly paintings, show hints of influence from print making, yet also display a much broader expansion into realistic subjects as well as abstract expression. Titled “Landscapes with Ritualistic Practices,” the exhibition intersperses Su’s most recent abstract series, installations and other works among his earlier realist paintings and prints, creating an interesting dialog between the artist’s different methods of expression.

Shanshui, or “mountain and water” in Chinese, is both a geographic and cultural concept in China, one which ancient Chinese artists transformed into one of the most representative symbols of Chinese art with their brush-and-ink paintings of towering peaks and wavering rivers. Zhi China: Shanshui, the first installment in the series Zhi China, which aims to explore Chinese culture through collections of essays, was released in October 2015. The book discusses shanshui paintings’ origins and development as well as other art forms esthetically related to the mountain-water concept. Throughout the book, expansions on the theme unfold with discussions of Chinese geography, gardens, bonsai and feng shui. NEWSCHINA I December 2015

NEWSCHINA I December 2015

Commentary

Local governments’ hunger for land threatens sustainable development The enthusiasm for urban overexpansion may have catastrophic consequences By Tang Liming

ccording to a report released by the State Council on ur- is mostly driven by the hunger for rural land. As the government banization that covered 12 provincial capitals and 144 plays a dominant role in land appropriation and distribution, more major cities, each provincial capital is planning to build an urban lands means more government revenue. That explains why average of 4.6 new districts, with prefectureeven city governments in northeastern level cities planning the construction of an China, where the local population has deaverage of 1.5 new districts. At the national clined by 1.8 million, continue to urban While urbanization level, the urbanization plans for all Chinese expansion plans. is often hailed as a cities could accommodate a population of This rapacious land-grabbing is behind major driving force 3.4 billion, almost three times China’s curmany of China’s major social and ecoof China’s economic rent population of 1.3 billion. nomic problems, ranging from widespread development, it has In contrast to these ambitious goals set corruption, environmental deterioration, come at a great cost by China’s city governments, it is estimated increasing social tension and local governthat China’s total population will reach its ments’ mounting debt. peak in 2017 and then rapidly decline as the In recent months, the central governpopulation ages. China’s urban planners’ obment has launched various measures to vious detachment from this reality indicates tamp down this craze, such as releasing a that the country’s urbanization policies have guideline that put a “permanent boundbecome ridiculously out of control. ary” over the geographic limit of a city. But In the past three-plus decades, China has so far, there is no evidence that such meaexperienced unprecedented urbanization, as sures have taken effect. In the midst of an its urban population increased from 18.9 percent of the population economic slowdown, expansive urban policies have even become a in 1978 to 54.7 percent in 2014. As the urban proportion increased financial solution for some local governments. by about one percentage point each year, 657 new cities sprung up To address the problem, the Chinese government must take a in the process. systematic approach and restore the role of the market in the proWhile urbanization is often hailed as a major driving force of cess of urbanization. The key issue is to take away local governChina’s economic development, it has come at a great cost. In just ments’ power to appropriate land and make arbitrary urban-planthe seven years between 1996 and 2003, China’s arable land re- ning decisions so that the true value of rural land can be reinstated duced by 100 million mu (16.5 million acres), mostly due to urban- through a market-based system. More importantly, governments ization. Between 1990 and 2013, the total built-up urban area of need to be made subject to the rule of law, a declared goal of the Chinese cities expanded from 12,900 square kilometers to 47,800, Chinese leadership. an increase of 370 percent. Over the same period of time, the urban If China fails to address the problem of its urbanization, it will population increased by a mere 27.3 percent, which has led many result in further catastrophic and irreversible consequences.  to call China’s urbanization the urbanization of land, instead of the The author is a partner and chief researcher with Anbound, a urbanization of people. Indeed, local governments’ zeal for ambitious urbanization plans Beijing-based public policy think tank.

NEWSCHINA I December 2015