February 2013

BUSINESS Learning to Litigate: AoKang Court Victory

Was 2012 Really the Year of the Dragon?

SOCIETY Grave Robbers: Economics of Exhumation

A DIFFICULT MOVE $4.99 www.newschinamag.com

Can an ascendent China move beyond territorial disputes to counter US supremacy in the Pacific?

Volume No. 054 February 2013

YEARLY ROUNDUP

EDITORIAL

Published by China Newsweek Corporation Publisher: Liu Beixian Executive Directors: Liu Beixian, Zhou Jianming Editor-in-Chief: Wang Xiaohui Editorial Office Managing Editor: Zheng Zhonghai Advisor: Liu Dizhong Senior Editor: Yang Yi Copy Editors: Jack Smith, Alex Taggart Lead Writer: Yu Xiaodong Editors: Wang Yan, Yuan Ye, Xie Ying, Sun Zhe, Li Jia First Reader: Lisa Gay Address: 5th Floor, 12 Baiwanzhuang South Street, Xicheng District, Beijing, China Post Code: 100037 Tel: 86-10-88395566 Fax: 86-10-88388045 Email: readers@newschinamag.com www.newschinamag.com Art Department Art Director: Wu Shangwen Art Editor/Designer: Zhang Dawei Marketing Office China Newsweek Corporation President: Wang Xiaohui Chief Executive: Fred Teng Tel: 1-212-481-2510 Fax: 1-212-481-2503 Address: Suite 1101, 15 East 40th Street, New York, NY 10016, USA Email: readers@newschinamag.com Toronto Office Director: Lai Hailong Address: 51 Halstead Drive, Markham, ON Canada L3R7Z4 Tel: 1-905-604-6150 Fax: 1-905-604-6170 Email: canada@newschinamag.com Marketing Director: Wang Chenbo Account Manager : Ren Jie Tel: 86-10-88388027 Circulation Manager: Yu Lina Tel: 86-10-88311834 Advertising Director: Gao Weiwei Tel: 1-212-481-2510 Marketing Promoter: Jerry Meng Tel: 1-212-481-2510 New York Office: Wang Yongzhi, Ruan Yulin, li Yang Washington Office: Wu Qingcai, De Yongjian Los Angeles Office: Mao Jianjun San Francisco Office: Liu Dan Houston Office: Wang Huan London Office: Zhou Zhaojun Tokyo Office: Sun Ran Paris Office: Long Jianwu Bangkok Office: Yu Xianlun Kuala Lumpur Office: Huang Hongbin Moscow Office: Jia Jingfeng Legal Advisor: Allen Wu ISSN 1943-1902

CN11-5826/G2

NEWSCHINA I February 2013

Political reform should begin with property declaration

I

n the month that has passed since the 18th in formal investigations, fortuitously occurred at a Party Congress, where the fight against cor- time when the fight against corruption is being given ruption became a popular theme, dozens of unprecedented coverage – at any other time, they may government officials have been placed under inves- well have been ignored. tigation. With anti-corrupTo effectively tackle corruption efforts now appearing tion, China should establish to top the priorities of Chieffective mechanisms not just China should establish na’s new leadership, many to investigate corrupt officials, effective mechanisms not argue that a systematic solubut to prevent officials from just to investigate corrupt tion would be to force pubbecoming corrupt. The experiofficials, but to prevent lic officials to declare their ences of other countries would officials from becoming personal property holdings. suggest that a requirement to In a recent move, the declare their assets could help corrupt.

Guangdong Provincial Party achieve this. When Wang QisCommittee announced that it han, chairman of the Party’s would launch a pilot property Central Commission for Disdeclaration program in 2013 cipline Inspection, consulted in three counties under the jurisdiction of Guangzhou, with academics on an anti-corruption strategy, the conZhuhai and Shaoguan, requiring Party cadres to declare sensus was that property declarations were an absolute their family’s assets – details that would be made pub- necessity. lic “within a certain range.” Details of the program are Currently, the Party has regulations requiring cadyet to be released, but this has not stopped State media res to disclose their incomes and property holdings, as in Guangdong praising the local government for its well as the whereabouts of their relatives (some officials pioneering effort. In terms of tackling China’s massive move their entire families overseas). But this informacorruption problem, however, token county-level pro- tion is withheld from the general public, and in most grams like these are far from sufficient. cases is only reported to a handful of Party officials. ParAlthough Guangdong is often hailed as a hotbed of ty leaders, some of whom may have mutually beneficial political reform, the level of corruption is no less serious agreements with each other, have neither the time nor than anywhere else. Several of the various officials ex- any incentive to check the data’s reliability. Consequentposed in scandals over the past month were senior Party ly, these regulations have never been taken seriously.

To effectively tackle corruption, the government figures in the province, including Wei Jinfeng, vice-director of the provincial Finance Bureau, Lü Yingming, must launch a public disclosure program as soon as vice-director of the provincial Bureau of Land and Re- possible. Given the strong ties between officials and the sources, Chen Hongping, Party chief of Jieyang City, business world, such programs have long been resisted by civil servants. Accordingly, the government should and Yingde City vice-mayor Zheng Beiquan.

It is important to note that these officials were not begin with newly appointed officials, making public felled by internal disciplinary mechanisms, but exposed property declarations a mandatory procedure for apby activists and ordinary citizens, often through social praisal and promotion nationwide. Only then can Chimedia. These scandals, many of which have resulted na’s much-discussed political reform momentum.

1

Contents

There Goes the Neighborhood

Photo by CFP

A preoccupation with economic gains and a lack of coordination in sovereignty disputes has left China isolated in its own backyard. Can Beijing regroup in time to counterbalance the US pivot to Asia?

Editorial

Cover Story

society

01 Political reform should begin with property declaration

10 Pivot to Asia :

Rousing Overtures/China’s Greatest Challenge?/Here Be Dragons

22

24

27

30

P23 Animal Cruelty : Dog Soldiers General Education : Front-line Faculty Tomb Demolition : Grave Misconduct Online Dating : Love, Virtually

P27 2

NEWSCHINA I February 2013

Contents

P64

YEAR IN REVIEW SPECIAL P62 china 2012

32 State of the Nation :

The Year in Review economy

52

54

56

58

Courier Industry : On The Move Electric Cars : No Charge Triple Play Program : Connection Failed Trade Disputes : Come Out Swinging

culture

62 Renaissance Foundation :

An Alternative Revival

P32

outside in

64

67

Labrang Monastery : Mingling with the Buddha Flavor of the Month : Oh la la!

04 MEDIA FOCUS 05 What They Say 06 NEWS BRIEF 08 Netizen Watch 61 China by numbers 66 real chinese 68 ESSAY 70 CULTURAL LISTINGS 72 Commentary

NEWSCHINA I February 2013

3

NewsChina Chinese Edition

Southern Metropolis Weekly

December 12, 2012

November 22, 2012

A Model for the Masses

EMBA Vanity Fair

AstheChinesepeopleawaitthe“politicalreform”promised bythecountry’snewleadership,thenation’smediahas descendedonTaicang,alittle-knowncountyinsoutheastern JiangsuProvincethathasbeenexperimentingwith democraticadministrationfor20years.Developedbythe ChineseAcademyofSocialSciences,China’stopthinktank, theTaicangmodelpromotesfullparticipationingovernment affairsbyvillagers.Thebiggesthighlightliesinthevillagers’ jointlydecidinganydisputedissueswithanopenvote, andanonymouslyratingtheannualperformanceoflocal officials.MediareportsclaimedthatTaicanghasminimized conflictbetweenofficialsandvillagers,andrealizedeffective supervisionofthegovernment.Yetthesamereportshave questionedwhetherthesamesystemcouldbeappliedto higherlevelsofgovernment,wherepowerfulinterestgroups holdmoresway.

Xinmin Weekly

In late November, Wang Shi, former head of China’s leading real estate company China Vanke, publicly confirmed that he had divorced his wife and married a young actress he met while studying for an executive MBA, triggering intense public debate over EMBAs. Many claim that some of the leading Chinese EMBA schools are simply glorified dating agencies, where minor movie starlets and TV presenters go to land rich husbands since only the super-wealthy can afford the astronomical tuition fees. Although the schools argue that money is not the only criterion for enrollment and that they aim to teach students about effective business management, people believe that students view the schools as a quick way of expanding their network of personal connections, an indispensible asset in the Chinese business world.

Century Weekly December 3, 2012

Larger Pastures Pressured by the lack of reliable sources of safe dairy produce, the Chinese milk industry is racing to establish large pastures all over the country, with the number of pastures with over 10,000 head of cattle rocketing from zero to more than 40 in the past five years. While many existing pastures are dogged with chronic management problems and lack effective waste disposal technology, local governments are spurring on a wave of construction with an array of preferential policies, hoping to dispel the impact of toxic milk scandals with the use of largescale husbandry. Experts have warned of ticking timebombs such as environmental pollution and shortages of feed, cattle and land. Worse still, they revealed that judging by existing market data, large pastures have done little to restore Chinese consumers’ trust in domestically-produced milk.

December 5, 2012

Inside Job Chinese people are increasingly plagued by junk text messages and cold calls selling everything from medicine and life insurance to sex and guns. Industry insiders told the media that the problem begins with government departments that sell personal information to agents, usually underground detective agencies. These accusations were seemingly vindicated in a recent nationwide clampdown on the illegal sale of personal information, in which police cracked several hundred underground information rings and detained over 1,700 suspects.

Their top suspect revealed that most of his information was bought from local officials. The media have thus called for stricter supervision of government departments, the major source of such leaks.

4

Economy & Nation Weekly November 26, 2012

4G Suspense Thanks to China’s rapid progress in upgrading from 3G mobile Internet to TD-LTE, a Chinese-developed 4G protocol to rival the European FDD-LTE protocol, China has brought forward its plan to begin granting 4G licenses to January 2013. Given that State-owned market leader China Mobile supports the TD-LTE protocol, analysts are debating whether or not the government will also grant licenses to China Unicom and China Telecom, the other two leading carriers, both of which clawed back a considerable market share by adopting the European 3G protocol. Insiders worry that the Chinese government will strongly back its homegrown protocol, putting the two smaller carriers at disadvantage in the global market by only granting TD-LTE licenses. This would further strengthen the position of China Mobile, as Unicom and Telecom would be forced to invest huge amounts of money in re-constructing their networks.

NEWSCHINA I February 2013

“Beijing, Shanghai and Guangzhou are far from being as densely populated as international metropolises like New York and Tokyo.”

“The survival of human beings for millions of years has proved that humans possess strong resistance to poison – even melamine is harmless to the human body.

Li Keji, a health professor of Peking University, under attack

for remarks about a chemical additive which killed several Chinese infants in 2008. His statement was part of a defense of Kweichou Moutai liquor, which was recently revealed to be adulterated with a chemical plasticizer.

“If not for the sake of getting listed in Hong Kong, who would abandon Chinese citizenship to set up on some island or other?”

Zhang Lan, president of restaurant chain South Beauty, on her decision to emigrate in order to further her business interests.

Illustration by Wu Shangwen

Zhou Qiren, national development director of Peking University, advocating more dense urban housing in China.

“I did not realize that my boss had always been working for me!”

A former chauffeur who married his boss’s widow. Wang Junyao, a Wenzhou official who died from intestinal cancer at 38 years old reportedly left 1.9 billion yuan (US$280mn) to his wife, who then married her husband’s driver.

“Chinese entrepreneurs do have the right to make suggestions, but it is up to the officials whether or not to listen. We have to follow the Party, not guide it.”

Chairman of auto parts supplier Zhejiang Wanxiang Group Lu Guanqiu on the role of business in politics.

“If a government fails to protect its people, and robs them instead, then it has no reason to exist.”

Legal pundit Yu Jianrong on a decision by the Changsha municipal government to demolish a local millionaire’s home to build a software park.

“[Rural children] would end up in the gutter if they relocated to the cities with their vagrant parents. Once again we see the kind of broken homes we thought we had consigned to history.”

Popular critic Yan Lieshan on the abandonment of rural

“Top universities like Peking and Tsinghua are mainly funded by the central government, mostly by taxpayers, so they should be open to all.”

Peking University professor Zhang Qianfan making the case for the equal treatment of prospective students, regardless of their origins, by China’s best academic institutions.

“Those who survived the 1942 famine finally died of hunger in the 1962 famine. Then their bodies were dug up in 2012.”

Xu Xin, a law professor with the Beijing Institute of Technology, on the demolition of ancestral tombs in Henan Province to make room for agriculture.

children by their migrant worker parents.

NEWSCHINA I February 2013

5

Top Story

Xi’s Southern Tour A tour of China’s commercial heartlands in Shenzhen and Guangdong Province by the new General Secretary of the Communist Party Central Committee Xi Jinping is believed to be a show of commitment to Reform and Opening-up, and an homage to a similar tour by Deng Xiaoping in 1992.

Beginning December 7, Xi visited the southern cities of Shenzhen, Guangzhou, Zhuhai and Nanhai, taking a similar route to Deng’s 1992 inspection tour, during which the architect of China’s economic miracle remarked that “to halt reform is a dead end.”

Deng’s Southern Tour was an iconic turning point for China’s fortunes, coming over a decade after Deng had proposed a policy of Reform and Opening-up shifting the focus of the Communist Party away from politics and towards economics. Xi Jinping’s father Xi Zhongxun, then Party secretary of Guangdong Province, defined Shenzhen as a Special Economic Zone in 1980, loosening many of the commercial restrictions which remained in place elsewhere in China.

“It is definitely not coincidental that Xi Jinping chose Shenzhen as the first stop on this tour…he intends to declare the new leadership’s resolve to continue the path set down by his

6

predecessor,” Chen Xuewei, a Party history specialist with the Party School of the Central Committee told NewsChina.

On December 8, Xi laid a wreath at a memorial to Deng Xiaoping in Shenzhen’s Lianhuashan Park. “We are firmly committed to reform and opening-up… and Shenzhen and Guangdong Province should play a bigger role on this path,” he said.

“Reform and Opening-up would always make or break China…we should dare to break through the barriers,” Xi told press during his trip. At the central government’s 2013 economic conference, held shortly after Xi’s tour, he urged his staff to work out a roadmap for deepening reform.

Many analysts, including Chen Xuewei, believe that China’s economic progress has hit a bottleneck, and further reform is essential to the country’s survival. However, many blame this stagnation on the fact that political reform has lagged far behind economics, resulting in a widening income gap and the concentration of both money and power in the hands of officials. This has created a hugely powerful network of interest groups straddling the political and commercial arenas, a bloc which critics say will be difficult to break.

“China now needs another Deng Xiaoping to break the bottleneck by hewing out political reform,” Chen Xuewei told NewsChina.

New Image

China’s new leader Xi Jinping is known as a critic of bureaucratic extravagance, and is showing signs of being more approachable than his predecessors. Some called Xi’s southern tour a charm offensive, as the new General Secretary bucked Party practice to showcase a more egalitarian leadership style.

No roads were sealed, with Xi’s car moving through regular traffic.

Minibuses used by the leader didn’t have their windows blacked-out, allowing Xi to wave to passersby.

Police did not prevent onlookers from approaching Xi. Xi stayed in regular hotel rooms, rather than the presidential suites favored by his predecessors, and requested the same food as the rest of his team.

At the wreath-laying ceremony at Deng Xiaoping’s statue, no red carpet was rolled out for the new leader.

NEWSCHINA I February 2013

Culture

Society

Move Over, Forbidden City

An elementary school in Guangshan County, Henan Province became the latest in a series of Chinese schools hit by unprovoked knife attacks, leaving 22 children injured.

At 8 AM on December 14, Min Yingjun, 36, broke into a classroom and stabbed scores of children who struggled to escape. Min was eventually subdued by the school’s security guards and police. 23 students and an 83-year-old passerby who had attempted to stop Min were injured in the attack, though no fatalities were reported.

Police later announced that Min had suffered from mental illness for 20 years. After discovering that no security guards or staff had been on duty at the school gate that morning, parents swiftly rounded on the school administration, accusing officials of negligence.

Economy

China Issues 2013 Economic Report The Chinese Academy of Social Sciences, China’s leading official think tank, issued its annual report on the state of the economy on December 5, 2012.

The report listed US fiscal cliff negotiations and the ongoing Eurozone crisis as potential risks to China’s future growth, as well as highlighting ways in which the government could stimulate slowing domestic GDP growth. These included boosting efficiency and increasing domestic consumption, as well as greater direct investment in social services, infrastructure and housing.

China’s Growth in 2012 and 2011:

+6%) (2011: +25%) 2.Exports: (2012:+7.9%) (2011: +20%) 3.Customer Price: (2012:+2.7%) (2011: +5.4%) 1.Imports: (2012:

4.Average Annual Income:

+12%) (2011: +11.4%) Urban residents: (2012:+9.5%) (2011: +8.4%) Rural residents: (2012:

GDP Growth Forcast in 2013

8.2%

Traffic

First Anti-freeze Rail Line

China’s Harbin-Dalian line, the world’s first highspeed rail line designed to operate under extreme weather conditions, officially entered service December 1, 2012.

Equipped with advanced technology to prevent heavy snow and ice from damaging the rails, the line is designed to cope with the 80 degree fluctuation in yearly temperatures known in China’s three northernmost provinces of Heilongjiang, Jilin and Liaoning.

Despite the new line’s rolling stock being designed to travel at over 350 kilometers per hour, trains will run at 300kmph in the summer and 200kmph in the winter in the interest of safety.

With over 8,600km of high-speed rail lines now in service, China has the world’s largest rail network. However, the memory of the fatal 2011 Wenzhou bullet train crash in which 40 people lost their lives has left commuters uneasy over the pace at which new lines are being opened.

NEWSCHINA I February 2013

Chinese archaeologists have found the remains of an ancient palace complex attributed to Qin Shi Huang, the first emperor of a unified China and founder of the short-lived Qin Dynasty (259BC-210BC), according to the Xinhua News Agency.

The unearthed complex covers a total area of 170,000 square meters, one fourth the size of Beijing’s Forbidden City, arranged into a grid-like floor plan comprising 18 courtyard houses built on a north-south axis around a single central chamber. The remarkably intact state of the foundations calls into question historical accounts claiming that the entire complex was razed by local rebels following the First Emperor’s death.

The walled city of Xi’an served as the imperial capital of China for several ancient dynasties when it was known as Chang’an. On its outskirts, Qin Shi Huang’s vast burial mound, which has yet to be excavated, shot to worldwide fame after the discovery of a life-size funerary army of over 6,000 well-preserved terracotta soldiers and horses.

Photo Credits: Top Story, CNS; Others, CFP

Another School Attack

7

What’s Making China Sad ?

What’s Amusing China ?

Poll the People When you asked your mother where you came from, how did she respond?

Respondents 17,957

by December 13, 2012

The body of a homeless man in his 40s was found frozen to death on the street outside a labor exchange in Dalian, Liaoning Province, on the morning of December 5.

At a concert that attracted an audience of more than 20,000, women had to line up for the men’s bathroom, due to limited women’s facilities.

“We found you” 12,363 (68.8%) “You were a gift” 342 (1.9%) “You jumped out of a rock/my armpit” 1,289 (7.2%) “You came from mommy’s tummy” 2,818 (15.7%) “Ask your father” 204 (1.1%) Refused to answer 193 (1.1%)

What’s Surprising China ?

A fisherman surnamed Ma from Guangxi reeled in the catch of a lifetime in early December: a Porsche Cayenne SUV. It is alleged that the car was dumped by smugglers being tailed by the police. Though the Cayenne’s list price is around 2 million yuan (US$320,000) in China, Ma eventually sold it to a local garage for 4,000 yuan (US$640), as it had sustained serious water damage.

What’s Shocking China ?

As a result of his phobia of germs, a 44-year-old Mr. Lou from Zhengzhou has been divorced by five women over the past 17 years. Lou spends four hours in the bath and typically goes through an entire bar of soap and a bag of detergent every day. He has worn out four washing machines in three years.

8

Other 748 (4.2%)

Source: www.weibo.com

Most Circulated Post Retweeted 210,692 times A post about the asteroid Toutatis on a microblog operated by State broadcaster CCTV December 12, 2012, went viral as people worried that the alleged Mayan doomsday prediction might come true.

Asteroid Toutatis will reach its closest point to the Earth at 2 PM. The closest point is 6.9 million kilometers, or 18 lunar distances. The asteroid is travelling 35,000 kilometers an hour, but experts have assured that the asteroid will not hit our planet.

NEWSCHINA I February 2013

Top Five Search Queries On

Over the week ending December 18 New Year’s Day holiday schedule China loves long weekends.

278,409

WHO’S

HOT?

NOT?

Automobile license plate lottery 16,657 The Beijing government claimed that it would continue with its license plate lottery system next year.

Liu Tienan 85,912 The 58-year-old head of the National Energy Administration was accused of corruption and fabricating academic credentials by Luo Changping, deputy chief editor of Caijing magazine.

Gun-toting Teacher A photo of a teacher from Nanjing University of Science and Technology showcasing AK-47 and M16 rifles in a class on the structure of automatic weapons went viral online. The students, few of whom had ever seen a real rifle, were allowed to take apart and reassemble the weapons.

18th Party Congress Report 72,861 Many were eager to read between the lines of Hu Jintao’s opening remarks at the conference.

Beijing-Guangzhou high-speed railway 19,316 The new line is scheduled to open in late December, and is expected to shorten the travel time between the two cities from 26 hours to eight.

Followers: 1,930,991 by December 13 The 42-year-old, one of China’s most famous economists, is a professor at Peking University who uses Weibo, China’s Twitter, as a tool for debate and propagation of “economic common sense.” He has the patience to explain why taxi and train ticket prices should be marked up, and why it was ridiculous for the government to remove tolls on express highways over the National Day Holiday.

NEWSCHINA I February 2013

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

Top Blogger Profile Xue Zhaofeng

WHO’S

Shan Zengde The 51-year-old deputy head of the Shandong Province Agricultural Bureau was found to have signed a handwritten contract promising his mistress that within one month, he would divorce his wife and marry her instead.

Quacking Cop A policeman from Nanjing sang the theme song to the cartoon Donald Duck for half an hour in order to prevent a man from committing suicide. The man was preparing to jump off a high balcony due to work-related stress, but eventually gave up when the cop became hoarse from singing.

Window-Dresser Officials in Zhangxian County, Gansu Province built a wall to prevent an impoverished village from being seen from the new provincial highway.

9

cover story Pivot to Asia

ROUSING OVERTURES By reaching out to Southeast and East Asia, particularly countries friendly to China, the US is proving itself determined to remain the world’s only superpower

By Li Jia

10

NEWSCHINA I February 2013

Photo by Ma zhancheng/xinhua

Chinese Premier Wen Jiabao meets with US President Barack Obama before the East Asia Summit in Phnom Penh, Cambodia, November 20, 2012

B

arely two weeks after his re-election, President Barack Obama, freed from the pressures of the campaign trail, confirmed his commitment to the muchdiscussed US “pivot to Asia” strategy begun under his predecessor, George W. Bush.

Obama’s Asia tour began in Thailand, where the president and the Thai Prime Minister Yingluck Shinawatra hailed the 180 years of formal diplomatic ties between the US and its “oldest treaty ally in Asia,” agreeing to “chart the way for a deeper bilateral

NEWSCHINA I February 2013

strategic partnership and enhanced regional cooperation” in the words of a White House press release.

After reaffirming one old friendship, Obama attempted to kindle a new one, becoming the first US president to set foot in Myanmar. In Bangkok, Obama had spoken of encouraging “better impulses inside a country.” Once in Yangon, he used meetings with both the leader of the civilian government Thein Sein and opposition leader Aung San Suu Kyi to press for political reforms as

well as closer economic and strategic ties.

His Asian tour wrapped up at the East Asia Summit in Cambodia, again in his role as the first US president to attend this important regional forum, where he held meetings with ASEAN leaders as well as top officials from China, India, Australia, Russia and New Zealand.

Strategic Shift

While escalating military and political conflicts in the Middle East and the eco-

11

cover story

of the US Pacific fleet, told reporters at a Pentagon press conference on December 6, 2012 that “the [Asia-Pacific] rebalance draws on the strengths of the entire US government, including policy, diplomacy, trade and, of course, security.” President Obama has already pledged that any defense budget cuts coming as a result of fiscal cliff negotiations with House Republicans would not affect Asia-Pacific deployment.

Since 2010, US political, economic and military resources in Asia have been increasingly diverted towards the countries politically closest to China, with observers increasingly speaking in terms of US attempts at “containment.” The Obama Administration has invested heavily in what the Secretary of State Hillary Clinton describes as “a revitalized Asia-Pacific relationship.”

In a speech at the East-West Center in Hawaii in January 2010, Clinton outlined US Asia-Pacific strategy as a long-term commitment designed to build “historic ties, build new partnerships [and] work with existing multilateral organizations” in the region.

Photo by Paula Bronstein/Getty

nomic mess in Europe also need attention, Obama’s choice of Asia as the destination for his first state visit after re-election reaffirmed his status as the first self-described “Pacific President.” His administration has used its political mandate to reassert US dominance in this key economic and political sphere, following decades of slippage west.

However, another world power cast an imposing shadow over Obama’s visit. On the sidelines of the East Asia Summit, the president met with outgoing Chinese Premier Wen Jiabao, both stressing that they were managing the most important bilateral relationship in the world. While few would contest this assertion, fewer would deny that this relationship is coming under increasing strain, with an existing power gradually learning how to deal with an ascending one.

Javier Solana, former NATO SecretaryGeneral described Obama’s choice of Thailand, Myanmar and Cambodia as destinations as “a choice that cannot have pleased China.”

Admiral Samuel J. Locklear, commander

US Secretary of State Hillary Clinton listens alongside Aung San Suu Kyi as Barack Obama speaks at the University of Yangon during his historic visit to Myanmar, November 19, 2012

12

Significant progress on all the three fronts is recorded in her well-known article in the November 2011 issue of Foreign Policy entitled “America’s Pacific Century.”

History

US dominance in Asia was cemented after the Japanese war machine was dismantled at the end of World War II. During the 1950s and 1960s, the US signed bilateral military alliances with Japan, South Korea, the Philippines, Australia and New Zealand, guaranteeing US defensive support should any one of these nations be attacked by a foreign power. With the US in the center, effectively controlling the respective military strategies of its allies while limiting non-US-brokered contact between them, this structure is called the “hub-and-spokes.”

The US alliance with Japan, described by Ms Clinton as “the cornerstone of peace and stability in the region,” is particularly important, and the US has fought hard to preserve its integrity. In June 2010, Japanese Prime Minister Yukio Hatoyama, an advocate for an East Asian economic area to rival the EU, resigned after failing to honor a campaign pledge to relocate the unpopular Futenma air base on Okinawa. Indeed, the Japanese government went on to invest a further US$5 billion in US military bases on the Japanese archipelago “to ensure the continued enduring presence of American forces in Japan.”

In the face of continuing belligerence from Pyongyang, the US has held more joint naval exercises with South Korea since 2010 than at any point in its history. At the end of 2010, both nations reached a formal free trade agreement which went into effect in March 2012. In November 2011, President Obama announced the largest ever US military deployment to Australia. In October 2012, the nuclear-powered aircraft carrier USS George Washington, one of largest in the US fleet, visited Manila, showing that the 61-year-old mutual defense treaty is, in the words of US NEWSCHINA I February 2013

NEWSCHINA I February 2013

Photo by by Paula Bronstein/Getty Images/CFP

ambassador Harry Thomas, “still alive,” according to a US Navy press release.

The US is also “making a strategic bet on India’s future,” according to Secretary Clinton’s Foreign Policy article. Despite a longstanding US-Indian strategic partnership, establishing effective military cooperation in the Pacific and the Indian Ocean between all US allies and partners is viewed as a challenge, but also a long-term priority. As part of this strategy, US combat troops will also be stationed in Singapore.

President Obama first came to the East Asia Summit in 2011 at the invitation of the Indonesian government. The two countries have established joint military training programs and signed deals in a variety of areas, including defense. Even old regional enemies have softened in their attitude toward the US. Vietnam has also stepped up efforts in securing a strategic partnership with Washington.

The new enlargement of its web of friends and allies in the Asia-Pacific region has led the US to contemplate mothballing its hub-andspokes strategy, instead placing special emphasis on multilateral institutions. In March 2011, David Carden arrived in Jakarta to become the first US permanent ambassador to ASEAN. In 2009, the first US-ASEAN Leaders Meeting was convened in Singapore.

A joint communiqué after their recent summit pledged to make this meeting an annual event “as a further step towards raising the US-ASEAN partnership to a strategic level,” according to a White House statement.

The US has also launched a number of its own initiatives to strengthen multilateral ties with ASEAN, covering areas from the environment and health to business and technology. It also set up trilateral dialogues with, variously, India and Japan, Japan and Australia, and with Japan and South Korea. Those measures not only strengthened bilateral ties between the US and single nations, but also placed the US at the heart of every major multilateral dialog in the region.

Monks hold a poster welcoming US President Barack Obama toYangon, November 19, 2012

In 2011, President Obama rolled out his administration’s vision of a Trans-Pacific Partnership (TPP), a high-standard free trade zone incorporating all economies in the Asia-Pacific Economic Cooperation (APEC) zone. If this is successful, it will become the biggest US-led multilateral institution in the region.

Left Out?

One key player is noticeably absent or marginalized in this complex web of relationships. China, an ascendant power in the region, is now the primary challenge to US strategic dominance in the Pacific, and the Obama administration has realigned its foreign policy accordingly.

A report in March 2012 by the US Congressional Research Service commented that “China’s growing military capabilities and its increasing assertiveness of claims to disputed maritime territory [have] implications for freedom of navigation and the United States’ ability to project power in the [Asia-Pacific] region.”

The US has always been vigilant against any potential challenge to US dominance in Asia. In the 1990s, proposals by Malaysia and Japan for regional economic integration in remained mired in committee partly due to strong US opposition, as these proposals

would not have allowed the US to take a leadership role.

As Secretary Clinton has recognized, the strategic shift to Asia-Pacific region is based on the realization that the US has to use its limited resources more effectively in order to secure ongoing global leadership. The AsiaPacific region, with its relative political stability and undeniable economic strength is identified as the place to do this. Since the US withdrew combat troops from Iraq in 2010 and is now scaling down military operations in Afghanistan, it has freed up resources to complete this strategic shift.

More than determining the leading military power in the region, the US wishes to retain its rule as mediator and, where necessary, law-maker. Chinese GDP growth is an ancillary concern compared to the prospect of a regional free trade system with China at the center, challenging economic practices currently modeled on US trade law, according to Li Xiangyang, director of the National Institute of International Strategy under the Chinese Academy of Social Sciences, speaking at a recent forum in Beijing.

The US waded into the escalating South China Sea territorial disputes on the grounds of protecting its “freedom of navigation” in an area crucial for international shipping. It also urged all claimants to find a solution

13

Photo by by AFP

cover story

(L-R) Philippines President Benigno Aquino III, Singapore’s Prime Minister Lee Hsien Loong, Thailand Prime Minister Yingluck Shinawatra, Vietnam’s Prime Minister Nguyen Tan Dung, US President Barack Obama, Cambodia’s Prime Minister Hun Sen, Brunei’s Sultan Hassanal Bolkiah, Indonesia’s President Susilo Bambang Yudhoyono, Laos’ Prime Minister Thongsing Thammavong, Malaysia’s Prime Minister Najib Abdul Razak and Myanmar’s President Thein Sein join hands for a group photo at the 4th ASEAN-US Leaders’ Meeting in Phnom Penh, Cambodia, 19 November 2012

based on the United Nations Convention on the Law of the Sea (UNCLOS), a legal framework governing the use of oceanic resources. The Philippines and Vietnam have always cited this law as the basis for their territorial claims. China, with the largest claims in the region, has refuted the relevance of UNCLOS in this specific case, accusing the US of hypocrisy as it remains the only permanent member of the UN Security Council not to have ratified this law, leaving the Obama administration locked in a congressional battle to resolve this situation in order to strengthen its negotiating position.

China’s uncompromising diplomatic position in the South China Sea dispute as well as a similar dispute between China and Japan over the Diaoyu (Senkaku) Islands is proving helpful to the US. While the US has repeatedly stated that it does not take sides in either dispute, on December 5, 2012, the US Senate approved a defense bill which includes the Diaoyu Islands into the 1960 US-Japan security pact, meaning that any military action

by China to occupy the island chain would in theory activate the US-Japanese military alliance.

14

While China has found that its hard-line stance on the South China Sea island chains has begun to stymie economic and political dialogue with almost all its regional neighbors, and the issue dominated the November 2012 ASEAN Summit in Phnom Penh, the US has continued to deepen regional strategic ties, presenting an image as a conciliatory mediator. Indeed, the US could be said to have usurped the generous, prosperous, peace-loving image presented by China in the 1990s, making up the US look like the better option. Even Myanmar, widely seen as China’s only major ally in Southeast Asia, is increasingly shifting its China policy toward economic ties, while at the same time mending its relationship with the US. As US Senator Joseph Lieberman said in a recent speech, the US is not only “rebalancing to Asia,” but “rebalancing in Asia.”

Further north, South Korea was frustrated in 2010 by China’s calls for moderation over the fatal sinking of the Cheonan, allegedly by a North Korean midget sub, and the unprovoked shelling of Yeonpyeong Island, again

by North Korean artillery. Defying Chinese protests, South Korea went on to hold large

scale joint military drills with the US Navy after the two incidents. Chinese Foreign Minister Yang Jiechi told Hillary Clinton in a July 2010 meeting that “China firmly opposes foreign warships and military aircraft entering the Yellow Sea and other coastal Chinese waters to engage in activities affecting China’s security and interests.”

China’s increasingly assertive stance in such disputes is partly the result of political necessity – public protests over the South China Sea and Diaoyu Islands controversies, stoked by media editorializing and rising nationalist sentiment, have hardened policy and alienated neighbors at a time when regional strategic support is crucial to China’s future status in its own backyard. “China’s development is for securing a happy life for its people, rather than competing with any other country for so-called ‘world domination,’” said Ministry of Foreign Affairs spokesman Hong Lei at a press conference in December 2012.

That may be, but unless China is able to assert itself while maintaining good relations with its neighbors, it could find that its policy of a “peaceful rise” no longer holds water.  NEWSCHINA I February 2013

Photo bycfp

(L-R) At the same summit, Wen Jiabao (fifth from left) takes Obama’s place in a very similar lineup of ASEAN leaders, the only other switch being Thein Sein’s replacement with his deputy Tin Naing Thein (far right) 19 November 2012

Pivot to Asia

China’s Greatest Challenge?

China’s new leadership has embarked on a more assertive defensive and foreign policy. But does China have the regional support to follow through?

By Yu Xiaodong

D

uring the week-long Zhuhai Air Show, held mere days after the 18th Party Congress that unveiled the country’s new leadership, China presented an array of sophisticated new homegrown weaponry, including attack helicopters, unmanned aerial vehicles and surface-to-air missiles, as well as a quarter-scale model of China’s second stealth fighter, commonly referred to as the J-31.

Also, on November 25, China conducted the first landing of the J-15 fighter on its brandNEWSCHINA I February 2013

new and only aircraft carrier. Broadcast on State television, the landing was hailed as a major step toward the extension of China’s ability to project its military might.

Compared to the secretive test flight of the J-20, China’s first stealth fighter, during a visit

by US Secretary of Defense Robert Gates in January, 2011, an action which led Gates to seek an explanation from Beijing, the recent public display of new weapon systems has been carried out in the open. Experts believe that this open-air approach to showcasing military

technology is an indication of a more proactive stance in China’s future foreign and military policies.

From Economic to Security

According to Professor Yan Xuetong, director of the Institute of International Studies and editor-in-chief of the Chinese Journal of International Politics, the major feature of China’s new strategy in defense and foreign policy is the shift away from securing domestic economic growth toward safeguarding its overall strategic interests.

15

China’s first 300-meter saturation diving mothership, built by Wuchang Shipbuilding Industry, was handed over to the Ministry of Transport in the eastern port city of Qingdao. It is equipped with the world’s most advanced saturation diving environment that can operate at a maximum depth of 300 meters

16

Photo by China news service

cover story

“China’s defense and military development must be oriented towards China’s national security needs, incorporating the need for economic development,” reads the Party’s influential work report, presented during the Party Congress in November, setting out the government’s policy direction for the next five years.

Since Reform and Opening-up in the 1980s, economic growth has been the priority of all government agencies, including those involved in defense and foreign policy. Following the doctrine of “keeping a low profile and biding one’s time” first touted by Deng Xiaoping, the architect of China’s reforms, the chief goal of China’s defense and foreign policy used to be “securing a peaceful international environment so that the country can focus on developing its economy.” In largely achieving this goal, China has previously refrained from asserting its sovereign claim over disputed territories, both land and sea territories, following Deng’s iconic principle of “putting disputes aside.”

Not any longer. As China has become the world’s second largest economy, complicating existing power relations and leading to anxiety over China’s regional role, keeping a low profile has ceased to be an option. China’s economic success has led to a surge in nationalism among its population, and the prioritization of commerce over strategic interests in foreign policy has come under withering attack from the general public, with some accusing the government of surrendering sovereignty for economic gains.

China’s leaders have also slowly been realizing that economic power alone does not automatically translate into strategic influence. While China is unquestionably the dominant economic force in East and Southeast Asia and the number one trading partner of all major players in the Asian-pacific region, including South Korea, Japan and most ASEAN countries, in terms of diplomacy, regional relationships and military strategy, China remains in the shadow of the US. In recent years, China has been trying to woo its neighbors with commercial developNEWSCHINA I February 2013

Pragmatism

“Building strong national defenses and a powerful armed forces commensurate with China’s international standing and can meet the needs of its security and development interests is a strategic task of China’s modernization drive,” reads the opening line of the chapter on military policy in the Party’s most recent work report. An unprecedented commitment to turning China into a major maritime power

NEWSCHINA I February 2013

Photo by Li tang/cfp

A J-15 fighter jet takes off from the Liaoning, China’s first aircraft carrier, November 23, 2012

Photo by by Shining/CFP

ment, believing that economic integration and greater interdependence between China and other Asian countries would eventually lead the region towards the establishment of a regional free trade zone. However, sovereignty disputes in the South and East China seas have shown just how fragile this strategy is. Both disputes have soured political and economic ties, with many of China’s erstwhile partners strengthening their relationships with the US and freezing China out of regional decision making.

“China needs to make it clear that it is not an option for the surrounding countries to challenge China’s strategic interests while simultaneously benefiting from Chinese commerce,” commented Professor Wu Xinbo from Fudan University in an article published by the nationalist Global Times on November 10, 2012. Wu argues that economics will eventually become the means, rather than the ends, of China’s future regional strategy.

For Professor Yuan Peng, this strategic shift signals a move towards “a grander strategy,” incorporating defense, foreign and economic policy.

On November 30, Xi Jinping, the head of the Communist Party of China and presidentin-waiting, generalized this grander strategy in a nationally broadcast keynote speech as the “Chinese dream,” further defined as “the revival of the Chinese nation.” Xi’s ambiguous phrasing has been interpreted by analysts to signify a whole host of policy realignments, both internal and external, but most agree that a more assertive international strategy is already in place.

Chinese sailors clear snow from the deck of the Liaoning, December 8, 2012

was cemented by Xi Jinping’s much-publicized December visit to a Chinese naval vessel in his capacity as commander-in-chief, where he sat down to lunch with sailors.

While pledging that “China will unswervingly follow the path of peaceful development,” and that China “will never seek hegemony or engage in expansion,” the Party work report further stressed that “[We the Party] are firm in our resolve to uphold China’s sovereignty, security and development interests and will never yield to any outside pressure,” apparently a shift

from the iconic concept of a “peaceful rise” and a “harmonious world,” adopted by former Party chief and outgoing President Hu Jintao.

Idealism took a back seat to practical concerns in the latest Party work report. Instead of an unconditional promise of non-violence, the Party work paper stresses that China “will decide our position and policy on an issue on its own merits and work to uphold fairness and justice.”

A “peaceful rise,” along with “putting disputes aside” and creating a “harmonious world” are

17

unpopular with Party pragmatists who believe that China’s idealistic foreign policy has weakened her international standing. Critics argue that not only have these ideas failed to win over policymakers, they actually serve to constrain China’s policy choices, effectively preventing China from defending its own interests.

“China will be more comfortable to speak out about what it will do, instead of what it will not do,” Professor Yan told NewsChina, adding that this policy shift indicates greater pragmatism among the top leadership.

Action and Reaction

Already China’s new assertiveness is making itself felt. Newly-designed passports featuring a map of China, incorporating all disputed territories into its borders has been roundly condemned by all nations affected by such disputes, with Vietnam, the Philippines, Japan and India all protesting the move and launching their own administrative counter-moves.

In early December, 2012, Hainan Province announced that Chinese ships would be allowed to “search and repel” foreign vessels “trespassing in Chinese waters.” In clarifying the new law, Wu Shicun, director general of the Foreign Affairs Office of Hainan Province said the rule only applies to ships that enter within the Chinese-imposed 12-nautical-mile exclusion zone surrounding disputed islands.

While these actions are widely viewed outside of China as aggressive, within China they are painted as legitimate responses to foreign provocations which have been emboldened by the US policy to “encircle and besiege” China.

With both sides claiming moral authority and playing the victim card, it is increasingly difficult for compromise to be considered.

“The military dimensions of the US pivot toward Asia has the undesirable consequence of fueling Chinese perceptions of a deteriorating and more threatening regional strategic environment,” Sam Bateman, senior research fellow at the Maritime Security Program at the S. Rajaratnam School of International Studies,

18

Photo by Zhang Duo/xinhua

cover story

Chinese Premier Wen Jiabao meets with Thai Prime Minister Yingluck Shinawatra in Bangkok, Thailand, November 21, 2012

Nanyang Technological University, Singapore, told defensenews.com. President Barack Obama’s recent visits to Myanmar, Thailand, and Cambodia, the three Southeast Asian nations seen as most friendly to China, has further alarmed Beijing.

In response, China’s Defense Minister Liang Guanglie, met with Soe Win, deputy commander-in-chief of the Myanmar Armed Forces and commander of the Myanmar Army on November 16 in Beijing, pledging to strengthen strategic communication between the two countries. On November 18 and 22, Premier Wen Jiabao paid his own visits to Cambodia and Thailand.

On November 29, the US Senate approved an amendment to Article 5 of the USJapan Treaty of Mutual Cooperation and Security to explicitly confirm that the disputed Diaoyu (Senkaku) Islands fall under Washington’s existing defensive pact with Japan, a move which immediately drew condemnation from China. On the anniversary of Rape of Nanking on December 13, China sent a surveillance plane over the islands, which Japan responded to send eight Japanese F-15 fighter jets to intercept it. Both sides accuse the other of escalating the dispute.

China’s perceived neutrality following the widely-condemned launch of a North Korean long-range rocket in December 2012 and Bei-

jing’s ongoing support for the Kim regime is also a sticking point, fueling anti-Chinese sentiment in Japan and South Korea. Many international observers believe that both countries’ respective electorates could lurch to the right as a result, an outcome which would likely further strengthen US strategy and further isolate China.

At the same time, Japan’s Liberal Democratic Party, then frontrunner in the current electoral cycle, pledged to amend its pacifist constitution.

After Shinzo Abe, the LDP’s center-right leader who has been called an apologist for Japanese militarism in World War II regained power, Chinese State media speculation about a “lurch to the right” in Japan reached fever pitch. In another development, the Philippines recently voiced support for Japanese re-armament - an unprecedented move by a country which suffered massively under the Japanese occupation during World War II. Experts warn that the situation has now descended into uneasy “mutual threat perception,” with China on one side and the US and its allies on the other. This in turn has led to a cycle of tit-for-tat action and reaction, steadily escalating toward an indeterminate conclusion.

This constitutes what Sam Bateman calls a “classic security dilemma,” which, if not controlled through more focused and less prejudiced strategic dialogue, may spiral into a regional arms race, if not open conflict. NEWSCHINA I February 2013

Pivot to Asia

Here Be Dragons As China’s fragmented maritime agencies struggle to enforce an equally chaotic and conflicting set of ambiguous laws, there may be a change in the wind

China’s civilian maritime authorities and the People’s Liberation Army (PLA) Navy conduct drills in the East China Sea, October 19, 2012 NEWSCHINA I February 2013

Photo by cfp

By Han Yong

19

cover story

tralized and integrated maritime agency able to act on its own authority.

Photo by Juzhenhua/cfp

Too Many Dragons

Photo byxinhua

A tug belonging to the People’s Liberation Army (PLA) Navy tries to put out a fire on a marine surveillance vessel during exercises in the East China Sea, October 19, 2012

A Chinese marine surveillance vessel patrols the waters around the Diaoyu Islands, September 14, 2012

S

ince the most recent escalation of the ongoing territorial dispute between China and Japan over the Diaoyu (Senkaku in Japanese) Islands in the East China Sea, China has maintained a flotilla of surveillance ships in the waters around the tiny archipelago. The move, protested by Japan, is the best China has been able to muster in the way of a challenge to Japan’s sovereignty claims, which are backed up by the highly organized Japanese coast guard.

20

China’s maritime authorities, despite attempts to appear assertive in such high-profile territorial disputes, are slammed within the country as incompetent, with maritime experts of all political stripes arguing that the government is currently unable to safeguard or defend China’s maritime interests. A major reason lies in China’s fragmented maritime administrative system, which unlike its equivalents in neighboring countries, particularly Japan, lacks both a clearly-defined maritime strategy and a cen-

Unlike major maritime powers such as the US and Japan, where their respective coastguards are the primary agencies for dealing with maritime issues, several agencies are in direct competition for maritime authority in China.

In a 2010 report by Lyle Goldstein from the US Naval War College titled “Five Dragons Stirring up the Sea,” he identified five major agencies under five different ministries, all with a major say in oceanic administration.

These agencies were the Maritime Police of the Ministry of Public Security, the Maritime Safety Administration of the Transport Ministry, the Bureau of Fisheries under the Ministry of Agriculture, the State Oceanic Administration (SOA) under the Ministry of Land and Resources, and the General Administration of Customs.

Other agencies also have a stake in China’s territorial waters, most importantly the People’s Liberation Army Navy, the Ministry of the Environment, various private mining concerns and powerful State-owned enterprises, which all have maritime branches. Indeed, there could be more than nine “dragons” stirring up the seas off China’s coast – and they all appear to be fighting internally.

According to Liu Nanlai, honorary academician of the Chinese Academy of Social Sciences (CASS), the institutional arrangement of China’s maritime administration is an ad hoc extension of its land administration system – essentially managing the oceans as if they were dry land.

China literally had no maritime authority other than the navy until the 1980s, when the government began to explore the possibility of turning maritime resources into hard capital. Until then, the ocean had been seen as a strategic risk – the arrival point for foreign invaders. In a few decades, this perception changed as ocean trade skyrocketed.

While China’s coastal waters have always been crowded with fishermen, trading vessels, smugglers and illegal emigrants and immigrants, in recent decades they have beNEWSCHINA I February 2013

come dominated by vast shipping operations transporting Chinese-made goods across the globe. In response, relevant ministries extend their administration over the ocean. In 1988, the Ministry of Agriculture set up its Fisheries Bureau. At the same time the Ministry of Public Security established China’s first maritime police force. To regulate maritime shipping, the Transportation Ministry set up its own maritime wing in 1998, and the General Administration of Customs established an anti-smuggling unit in 1999. While independent from one another, all these agencies have related and often conflicting goals when it comes to their jurisdiction.

Referring to these agencies as “dragons,” Goldstein and many foreign analysts tend to view them as powerful players seeking to carve out their own lucrative slice of ocean territory.

Chinese observers go even further, arguing that without a cohesive national maritime strategy and clearly defined responsibilities, these agencies are not only in competition with one another, but are also reluctant to take action in matters of national, rather than individual, interest.

“Without clear central guidance, relevant agencies are reluctant to step into gray areas for fear of being held accountable,” Zhang Huazhong, director of the Oceanic and Fisheries Bureau of Sanya city, Hainan Province, told NewsChina. Zhang added that maritime police have refused to take action against foreign vessels allegedly encroaching in Chinese territorial waters “on several occasions” on the grounds that they “lack adequate vessels.”

Sometimes, internal conflicts between competing Chinese agencies spiral into international disputes. For example, China’s maritime police have an interest in restricting Chinese fishing boats to non-sensitive areas of the ocean. However, the Fisheries Bureau has a vested interest in encouraging fishing in the rich waters surrounding disputed island chains, bringing them into direct conflict with neighboring countries.

Japan, South Korea, the Philippines and Japan have all detained Chinese fishermen found operating in disputed waters. In April, 2012, a Chinese fishing boat was fired upon by the South Korean coastguard, and one Chinese NEWSCHINA I February 2013

fisherman was killed.

China’s fragmented system is also wasteful.

With centrally-allocated maritime expenditure divided among five agencies, no single agency is adequately funded and equipped, resulting in outmoded ships supported by inadequate port facilities and ineffective, overstaffed logistics departments.

Xu Sen’an, a former senior official from the SOA, told NewsChina that under the current arrangement, when a surveillance ship belonging to the SOA encounters a ship in distress, its captain is forbidden to attempt a rescue.

Instead, the SOA vessel has to report to the maritime police to send a rescue ship, often from hundreds of miles away. Similarly, Fisheries Bureau vessels are limited to the bureau’s own operations, and cannot be loaned out to other agencies even when half the fishing fleet is standing idle in the off season.

According to Xu, the result of this chaotic and inadequate jumble of competing agencies is that when confronted with well-organized and equipped foreign maritime authorities in disputed regions, particularly the Japanese coastguard, China is forced to back down.

An Oceanic Committee?

While many are wondering why China hasn’t attempted to centralize its maritime governance, especially in light of recent escalations in oceanic territorial disputes, China does in fact have an umbrella agency which is charged with coordinating its maritime authorities. In theory, China’s SOA fleet of surveillance ships serves this very purpose. Established in 1964, the SOA was under naval control until the 1980s when it was transferred between various central agencies and finally placed under the powerful Ministry of Land and Resources in 1998. In reality, the fact that the SOA does not have ministry-level status means it is often ignored by the agencies it is designed to coordinate.

As a result, calls for a national law of the sea and an integrated maritime administrative system have not gone away. Relevant proposals are submitted every year to the National People’s Congress, China’s top legislature, but have come to nothing. According to Liu Nanlai from CASS, a major obstacle to these proposals

is trenchant resistance from existing maritime agencies. Liu told NewsChina that in a recent session of the State Council, China’s cabinet, representatives from various maritime agencies explicitly rejected the idea of a centralized agency.

Rather than a national oceanic law, agencies have resorted to creating their own laws and regulations in order to protect their own interests.

“All these laws, drafted by individual agencies, aim to maximize [that agency’s] own presence, thus lacking a national and holistic perspective,” Professor Qu Guifang, director of the Institute of Oceanic Law under the Oceanographic University of China told our reporter.

China’s highest-level maritime law, the Law on Territorial Waters and the Contiguous Zones has no designated enforcement agency, giving it little sway over the various agencies operating offshore.

With China’s maritime interests given new strategic importance in the wake of the 2012 leadership transition, reformers have renewed their efforts to push for centralization. Three approaches are now under discussion. The first proposal is to reshuffle existing agencies into a “Ministry of Maritime Affairs” – effectively creating a central authority. The second option is to remove the existing maritime agencies from their individual ministries and amalgamate them into a new centralized agency, which would still be below the level of a Ministry. The third approach is to maintain the status quo, but to set up a high-ranking central agency with genuine powers of enforcement to replace the SOA. According to Li Haifeng, a former senior SOA official, the third approach, despite being the least progressive, is also most likely to win out, as it poses the least threat to existing agencies. However, the government has so far failed to give specifics as to how such an arrangement could effectively tackle the problem of conflict between competing agencies.

For Li and many others, some kind of central authority is essential to rein in the dragons currently tearing each other apart in China’s coastal waters, a struggle which is now threatening the country’s ability to project power within and beyond its borders.

21

society

Animal Cruelty

Dog Soldiers A media exposé of dog fighting rings in Beijing has led to public calls for a ban on this controversial blood sport. However, while police are quick to bust illegal gambling operations, China has yet to criminalize animal cruelty

Photo by by AFP

By Li Guang

O

n the morning of October 10, a large crowd of people gathered at a dog farm in the town of Qingyundian in Beijing’s Daxing district. The hum of excitement rose to a crescendo when six muscular pit bulls were brought out of their ringside cages, and money began to change hands. By noon, the pot had reached 200,000 yuan (US$32,000), and all six dogs were snapping at one another’s throats in anticipation of the coming bloodbath.

Dog fights are perhaps one of the least savory fixtures of China’s diverse underground gambling industry. In the Daxing case, local police were only alerted to the blood sports taking place on the farm by media reports on this local form of “entertainment.” The owner was arrested and the dog farm shut down as police launched an investigation into other dog farms in Daxing in order to root out similar activities.

Few believed that the October media reports were the first the authorities knew of an activity which has been popular in Qingyundian for almost a decade. Indeed, dog fighting rings in the area had established a sophisticated and highly profitable business model prior to the recent police raid.

Gold Farmers

After Li Jie, the Qin-

22

gyundian dog farm’s owner, was arrested, his stock of fighting pit bulls was turned over to the care of an elderly man in his 80s. Our reporter visited the farm on October 19, and found little evidence that the recent troubles had stamped out the local taste for dog fights.

“They are really good at fighting. They made great money,” the stoic octogenarian, who asked to remain anonymous, told NewsChina.

He then took us on a tour of Li’s farm, showing us the rows of cages still occupied by heavilyscarred pit bulls. In Qingyundian, he told us, the pit bull terrier, Tibetan mastiff, Tosa Inu, bull terrier and Staffordshire terrier are all prized as fighting dogs. One of the most aggressive animals, which would perhaps net a few thousand yuan if sold as a pet, can bring in ten times its retail value when entered into a local dog fight.

The October 10 match in Qingyundian was particularly profitable for the ring’s owners, attracting a crowd of regulars, some traveling from Beijing, Hebei Province and Tianjin.

Betting exceeded 124,000 yuan (US$19,683) for the first match, with the second and third matches netting 30,000 and 25,000 yuan (US$4,762 and 3,968) respectively.

Indeed, this pragmatic attitude to a practice reviled among animal lovers in the West and, increasingly, in China, is common in dog fighting circles. Most people involved in these gambling rings simply see their activities as a business. The authorities, too, raid and shut down dog fights which draw too much attention to themselves as an extension of zero-tolerance gambling laws, not as a crackdown on animal cruelty. Police would have been powerless to close down the October dog fight in Daxing, no matter how bloody, if nobody had been betting on the outcome.

Qingyundian’s southern quarter is home to several farms which specialize in raising and selling Tibetan mastiffs. A local dog farmer, who chose to call himself Chen Tashan, manages one of the area’s largest farms, responsible for a total of 36 Tibetan mastiffs. Chen claimed that his animals are raised purely as pets, telling our reporter that the breed is not known to be particularly aggressive. He said this is why his animals live communally, rather than in individual cages like the pit bulls on the Li farm.

“Occasionally a fight breaks out, but once I yell, it will immediately stop,” Chen told NEWSCHINA I February 2013

Bloody Entertainment

Among Daxing’s dog fighters, pit bulls have long been regarded as the prime breed, with aficionados claiming that pit bull fights can go on for two hours or more. A pit bull’s bite force maxes out at 80 kilograms per square centimeter, and their tough skin, resistance to pain and extreme aggression are all attractive to those wanting to offer their paying audiences an impressive and bloody spectacle. “Large pit bulls weighing about 50 kilograms are pretty much unbeatable in the ring,” one anonymous insider told NewsChina.

Du Zhipu, owner of the Dragon Tiger Farm, one of the oldest and largest bulldog farms in China, was among those who first introduced pit bulls into the country. According to him, Hong Kong-bred bulldogs in the southern provinces of Guangdong and Guangxi were gradually displaced in the late 1990s by import-

NEWSCHINA I February 2013

Photo by CFP

NewsChina. “There are people training Tibetan mastiffs to fight, but I don’t know how they’re doing it.”

Chen’s farm covers an area of 7,000 square feet. The dogs are fed three times a day on cornmeal, beef and chicken. Chen told our reporter that besides vaccinations, disinfectant and worming pills, feeding his animals is his main expenditure. “On average, one dog costs me 10,000 yuan (US$1,587) a year,” he said. “One weaned Tibetan mastiff puppy sells at around 5,000 yuan (US$794). An adult Tibetan mastiff sells at 60,000 to 80,000 yuan (US$9,524 to 12,698),” Chen told NewsChina. He also rents animals out for breeding purposes. All in all, Chen’s farm makes a net profit of more than 1 million yuan (US$159,000) a year. While he claims that he only sells the mastiffs as pets to serious dog lovers, Chen admitted that some inevitably wind up in dog fights, many taking place just a stone’s throw from his farm.

Insiders told our reporter that Daxing dog fights fall into two categories: pre-arranged and random. Pre-arranged bouts are by far the most profitable, sometimes netting the organizers tens of thousands of yuan. The ring owner typically acts as bookmaker, with individual bets counted in the thousands of yuan with two to one odds. Random matches are often arranged at the last minute and have little formal structure, with no weight classes or particular rules.

A dogfight in Haozhou City, Anhui Province, September 16, 2012

ed American pit bulls, which were soon being bred domestically.

Dogs raised in Henan Province, where dog fighting has long been a traditional form of entertainment, are now the most popular fighting dogs in China. Du therefore chose Henan as the location for his first pit bull farm. However, he claims no association with China’s widespread network of dog fighting rings, calling the blood sport a “low taste” form of entertainment.

Despite his contempt for dog fighting, Du has acquired some knowledge of their breeding practices and the brutal training regimens forced on fighting dogs. Aside from intensive bodybuilding, some animals are also injected or fed with stimulants. “Most dogs fed with stimulants won’t last into a fourth fight,” said Du Zhipu. “They typically overdose and collapse in their third fight.”

After spending over 10 million yuan (US$1.6mn) in recent years importing and raising purebred pit bulls, Du sees dog fighting as a wasteful pastime. “Real dog lovers won’t drive their dogs to death for money.”

Qin Xiaona, chairperson of the Capital Animal Welfare Association, believes that a lack of animal cruelty legislation has contributed to the spread of blood sports in China. While some instances may fall under elements of China’s extant Wild Animal Protection and Animal Quarantine Laws, the authorities have yet to

establish an umbrella law to protect all animals from being treated with excessive cruelty by humans.

“The current laws only mention that small animals should not be mistreated or abandoned without specifying punishments for such behavior,” she said. “Some countries have already made animal cruelty a criminal offense.”

While public opposition to dog fighting and other blood sports is on the rise, there is no shortage of apologists who use cultural or even simply psychological arguments against outright bans on blood sports and other activities which involve animal cruelty.

“Psychologically, as the pressures of modern Chinese life have increased, some seek to release their negative emotions through these bloody fights,” Liu Daoxing, associate dean of the Henan Academy of Social Sciences, told NewsChina. “Their discontent dissolves through the illusion that their champion is slaughtering their enemies.”

In Qin’s opinion, unnecessary violence perpetrated by human beings against animals is an indicator of the tension between people and the society in which they live. “From cricket fighting through to cock fighting, dog fighting and bullfighting, people constantly upgrade the levels of cruelty and gore,” she told NewsChina.

“This is the result of a vicious cycle where people trade more money for less fulfillment.”

23

society

General Education

Front-line Faculty According to some, while China has millions of graduates, it has a dearth of creative, critical minds.

A few of the country’s academics are trying to solve this problem by overhauling the country’s approach to higher education, with mixed results

By Chen Wei and Yuan Ye

W

hat is the purpose of higher education? Should students stick to a specific sphere of knowledge, or should their minds be nourished from a broader plate? Thirty-five years after higher education was restored in China after the Cultural Revolution, the country’s institutions are once again under attack – this time from within – with some claiming that their brand of highly-specific education creates drones, not thinkers.

“General Education,” an idea first pioneered by American academics at the turn of the 19th century, has been presented as the answer in some of the country’s universities.

At Sun Yat-sen University (SYSU) in Guangdong, the first batch of students studying for degrees in general education was enrolled in the Liberal Arts College (LAC) in 2009. At prestigious Fudan University in Shanghai, five undergraduate colleges were established in the autumn of 2012 with a view to expanding a general education curriculum among the university’s undergraduates. Beihang University (BUAA) in Beijing launched its Zhixing Experimental Class, providing general education programs centered around the liberal arts curriculum since 2010. In 2012, this same class expanded to provide a full-year general education class, combined with interdisciplinary basic courses, for all liberal arts freshmen. At Dong-

24

guan University of Technology in Guangdong, 30 students formed their institution’s first “social science experimental class” in 2012 to receive a general education degree – in other words, a degree with no major.

After three decades of focus on labor-intensive production, China is eager to upgrade its economy and increase the number of Chinese workers handling the upper links of the global economic chain. In order for this drive to succeed, according to some educators, Chinese workers need a more well-rounded educational footing in order to facilitate critical thinking and creativity. General education is believed by some to hold the key to unlocking this potential.

Disputes

“What’s the use of learning Latin?” is the question Wang Chengjiao, the LAC Latin teacher of Guangzhou’s SYSU, dreads being asked, mostly because it is asked by everyone – students, parents and faculty alike. He described how his students were “horrified” by the complicated grammar and seeming irrelevance of Latin when compared to living languages, and many were indignant at having to devote an hour a day to a language that they believed they would never use.

Wang’s answer to his least-favorite question is familiar to classics teachNEWSCHINA I February 2013

Photo by CFP

ers the world over. “Classical Latin and Greek are the necessary foundation and means to deeply understand the Western classics and tradition.”

Wang has refined his answer to the point that it is the official description of his course in the LAC school journal.

Not all his colleagues agree with his assessment.

Gao Quanxi, dean of the School of Humanities and Social Sciences of BUAA and director of the university’s Zhixing Experimental Class, believes that study of the “classics” should not simply be restricted to Europe or China’s respective “classical” eras, but incorporate more recent materials. Gao’s particular focus is literature and thought of the 15th through 19th centuries, prior to the Enlightenment. “Ancient and modern classics are not in opposition,” he told NewsChina. “I think that modern classics are even more important.”

During an internal conference on the BUAA general education curriculum held at the end of 2011, several parties clashed over what a more broad-based liberal arts curriculum should involve. Some proposed giving more weight to traditional Chinese culture, specifically classical literature.

Others argued that an understanding of the values and traditions at the root of so-called Western culture were essential to success in a globalized world. Others argued that too much emphasis on the liberal arts came at NEWSCHINA I February 2013

a cost to the study of natural sciences.

Some even lashed out against the principle of general education as a whole, arguing that it was unrealistic in terms of a student’s future prospects. Some academics present at the meeting claimed that it would be impossible for students undertaking a general education degree to secure research funding or publication, essentially freezing them out of a career in academia.

Striking a balance or even establishing a consensus between varying disciplines, with each department focused on its own interests, proved impossible. Indeed, most of those arguing were themselves the product of a highly-specific system which set strict limits on each individual’s field of study.

“We can’t have all subjects, can we? If so, we would be a university in our own right,” argued Gan Yang, dean of the LAC. Yet he also hinted that in coming years his college might incorporate more science and engineering courses.

“I think that in the 21st century, environmental sciences, life sciences and geography are very important,” he told NewsChina.

Both Gao Quanxi and Gan Yang had to attempt to find a compromise which simply matched available faculty with students, organically giving

25

society

Photo by CFP

no time for anything else, welcome! You have become a student with the LAC!” declared one student representative during the college’s 2012 opening ceremony.

However, there are signs that general education does give a boost to the critical faculties of some students. Zhai Zhiyong, a law professor from BUAA, told NewsChina that he has found the college’s Experimental Class, with its broader academic training, generally is more responsive and analytical even than law majors. He gave the example of a discussion about positive discrimination towards ethnic minorities during college entrance examination, during which law students struggled to grasp basic concepts while those from the exA student from Yuanpei College, the general education school under Peking University, moves his possessions perimental class eloquently quoted Arisby tricycle on enrollment day 2010 totle’s theory of distributive justice.

“General education pushed me to read extensively,” said Zhu Ziyue, an experimental class sophomore. “That’s the biggest benefit. Otherwise, books such as Utopia and The Iliad might have priority to the disciplines with the highest number of available staff.

“Sometimes the arrangement was rather random,” said an anonymous never come to my attention.” faculty member, adding that some courses which were seen as important in committee lacked the resources to run. Even Gao Quanxi admitted Out of Place that he’d been searching for a specialist in the history of Western economic China’s rigid, State-controlled university system has also proven tricky thinking “for three years.” for pioneers of general education to negotiate. The bureaucrats who control Chinese universities set strict and inflexible limits on funding and Hard Lessons resource allocation, meaning that many disciplines have to borrow faculty Staff members aren’t the only people disoriented by the sudden intro- and resources from other departments. Those professors willing to teach duction of general education to China’s formerly rigid academic land- general education classes receive no credit or remuneration for their time, scape. Students, themselves fresh from the highly-prescriptive national and thus few are keen to put the hours in. During the LAC school’s opencollege entrance examinations, have also complained that they are not ing ceremony at SYSU in 2012, Gan Yang expressed a wish that “other departments would count these teachers’ LAC hours into their overall equipped to handle this new academic experiment.

“I wasn’t happy in college,” a student who asked to be referred to as Lin workload.”

Besides staffing problems, it remains hard for general education schools who was enrolled in the LAC school at Guangzhou’s Sun Yat-sen University told NewsChina. Now a senior, Lin is taking Japanese as her elective to secure funding. Gao Quanxi has recently found his experimental class at the BUAA has bottlenecked. “Each additional allocation of funds has course, and plans to relocate to a university in Japan after graduation.

Lin’s main complaint was the volume of work required of her and her to be personally approved by the university president,” he told our refellow students. She found Japanese much easier when compared to Latin porter. “It has made things very difficult. We need a consistent budget.” or Greek, which occupied nine hours of her weekly class time on top of General education could well be the panacea to China’s perceived crehefty English translations, throughout her second year of college. “I felt ativity gap. However, the system within which educators are forced to like I was still in high school,” she said. operate has seriously limited both enthusiasm and resources which could In the first year after the establishment of the LAC school at SYSU, engender change. However, the pioneers of general education remain untwo students dropped out after failing several classes. “The LAC is not for daunted by the task ahead, and some have rather lofty expectations. everyone. There are so many classics courses. Some students might not be “What we are doing right now is only experimental,” said Zhai Zhiso willing to take them. Others might simply not be capable,” said Lin. yong. “But it will eventually spark reform of the whole undergraduate “If you found yourselves buried in reading the course material, with education system.”

26

NEWSCHINA I February 2013

Tomb Demolition

Grave Misconduct A controversial campaign to reclaim farmland by demolishing family tombs is in full swing in rural Henan Province

Photo by CFP

By Liu Ziqian, Chen Tao and Zeng Jianzhong

NEWSCHINA I February 2013

27

society

T

The millennia-old Chinese tradition of ancestor worship is most rigidly observed in rural areas, and in recent decades peasants have buried their dead relatives on farmland contracted to them by the State. But in March this year, the Zhoukou government made a controversial

Photo by CFP

his year on Tomb Sweeping Day, a spring holiday when Chinese across the country visit their ancestral tombs, groups of villagers in Zhoukou, Henan Province were busy smashing their family graves and mausoleums to rubble.

A tombstone in Zhengwan Village, Henan Province, November 21, 2012

break from tradition, announcing a new policy to “convert graves to farmland.”

According to the policy, the 3.5 million tombs located on farmland in the Zhoukou area are to be leveled and repurposed by March 2015. At the same time, the policy dictates, the exhumed dead are to be cremated and buried in cemeteries.

The local authorities argue that since the 3.5 million graves occupy nearly 3,333 hectares of farmland, the dead are effectively competing with the living for land resources, and as farmers’ incomes grow, graves are getting larger. “We are stuck at a dead end, and have no choice but to launch burial reform,” local government sources said.

The better part of the goal of removing 3.5 million graves in three years, however, has been fulfilled in just half a year thanks to particularly strong lobbying from the local government.

The policy can be traced back to November 2011, when Lu Zhangong, Party secretary of Henan Province saw so many graves dotting the landscape during his tour around Zhoukou City he decreed that they be removed to make way for farming.

Immediately, the demolition of graves shot to the top of the agenda for the Zhoukou authorities. A “burial reform work group” was quickly convened, headed by the city’s mayor, and on March 8, 2012, the program officially began.

Photo by CFP

Not So Voluntary

A woman sits by a recently demolished tomb in Xiamaliu Village, Henan Province, November 21, 2012

28

Shangshui County, nine kilometers from Zhoukou, was chosen as the pilot county for the scheme. Amidst much fanfare, a burial reform conference was held in the county on March 13 at which Party secretaries of various townships handed their responsibility contracts to the county government, vowing to fulfill their grave-demolition quotas before the deadline. Yang Jun, the county magistrate, declared proudly at the meeting, “[Demolishing graves] is a great undertaking aimed at severing ties with millennia-old bad habits.”

With the help of the county’s official media, a burial-reform propaganda campaign was launched and work groups were set up in every township.

By way of incentive, 200 yuan (US$32) was offered as compensation for each grave leveled.

NEWSCHINA I February 2013

Tomb Raiders

On September 16, the Henan provincial government issued a document approving of the Zhoukou experiment and calling for the further development of burial reform. The

NEWSCHINA I February 2013

Photo by CFP

But would anyone dare to dig up their ancestors? Zhu Wei, Party secretary of Zhuji village under Zhoukou’s Lianji Township, took the lead, actively exhuming 28 of his own relatives.

Zhu Guiying, president of the Zhoukou City Trade Union, persuaded her relatives to level her grandparents’ graves. Their deeds were lauded in the county’s media.

A villager surnamed Liu in Daliu village told NewsChina that while no one could stand to see their ancestors’ graves destroyed, the local government had threatened forced demolition by bulldozers if the villagers didn’t do it themselves within three days. A retired village Party secretary told our reporter that village officials had gone door-to-door informing local peasants that “there would be trouble” if they failed to comply with the policy.

In the words of Guo Gui, Party secretary of Daliu village, however, villagers had shown a strong sense of civil awareness by removing the tombs “of their own accord.” He told NewsChina that large clusters of graves posed a serious obstacle to the use of farming machinery, citing the example of a 0.13-hectare patch of land contracted to a household in his village that was dotted with eight graves. This made it impossible for large farm machinery to operate, he claimed.

Under overwhelming pressure, 20,000 graves were leveled in Shangshui County in just a few months.

On June 29, the Zhoukou city authorities convened an ad-hoc burial reform meeting in Shangshui County to evaluate the pilot project and promote the spread of the practice to other counties. City mayor Yue Wenhai advocated a special fund to reward townships and villages where grave removal was most enthusiastically enforced and determined that grave-removal figures should be an important metric in the evaluation of local government performance.

His words, particularly the mention of cash bonuses, fueled enthusiasm among the city’s grassroots officials.

A woman stands in a converted cemetery in Shangshui County, Henan Province, July 14, 2012

practice of converting graveyards to farmland was thus extended to cover the whole province.

True to the mayor’s words, the city established a 13 million yuan (US$2.1m) fund to inject more cash into the campaign. Additionally, the Fugou county government promised a reward of 300,000 yuan for the five township governments to act the fastest on grave demolition. In Luyi County, the reward for townships that fulfilled their tomb removal targets before November 30 was 500,000 yuan. Enticed by such sizeable rewards, officials at various levels began racing to demolish graves.

According to statistics released by the local authorities, 100,000 graves had been leveled in Zhoukou by July 21. The figure hit 400,000

by October 9, and then rose to 1.68 million

by October 25 as the campaign gained momentum. Gong Changlin, vice director of the Zhoukou City Civil Affairs Bureau, told NewsChina on November 26 that the latest figure was 2.46 million.

At a burial reform promotion meeting convened by the Henan provincial government in Zhoukou on November 6, Wang Tie, deputy governor of Henan Province, awarded 3 million yuan (US$476,000) to Zhoukou City for its “outstanding achievements.” Wang urged that burial improvements be used as a tool to

improve a locality’s image so as to boost its attractiveness to investment. Wang’s speech set off wide speculation that the land gained by grave removal would be used for property or industrial development. Since the profits from such projects often find their way into the pockets of corrupt officials, speculation was rife that the entire grave-demolition campaign had been a cynical land-grab.

The campaign has outraged the general public. On November 20, 26 well-known scholars and social-science researchers jointly issued a letter of appeal, calling for an immediate halt to the grave destruction campaign, which they called “brutal and barbaric” and an assault on the tradition of ancestor veneration.

Shi Pu, a professor from the Henan University of Political Science and Law, alleged that the conversion of graves to farmland was a cover for the government’s financial motives.

He continued: “There is insufficient supply of land in Henan, a province whose economic development has gone awry. Local governments, caught in tight financial straits, have a strong incentive to sell land to make a quick buck.” In his view, this is what is driving the destruction of graves.

Professor Zheng Fengtian of Renmin University of China is of the same opinion: “The government needs land to attract investment, but the province is restricted by the central government’s decree that China must not fall below 120 million hectares of farmland nationwide, and by the ceiling imposed by the State on the requisition of farmland. Hence, graves have now become a target in the local authorities’ efforts to acquire more land to attract investment and boost GDP.” Indeed, a Zhoukou city government document pressing for burial reform states that grave removal should be accompanied by “the transfer of rural land,” phraseology that has overtones of resale and repurposing.

While few of the project’s critics denied that centrally-imposed restrictions on land use mean that rural China’s burial practices are in need of reform, most took issue with the campaign’s lack of sensitivity.

“Respecting people’s beliefs is the very foundation of social and political stability,” said media commentator Qiu Feng.

29

society

Online Dating

Love, Virtually When it comes to an effective profit model, China’s online romance business has failed to find a perfect match

By Chen Jiying

H

u Qiang, a 32-year-old from Beijing, has been a paying member of China’s largest dating website Jiayuan for three years. However, despite hundreds of dates, he remains

single.

This hasn’t caused Hu to give up on his dream of finding a mate online.

Few of his fellow users are as devoted to Jiayuan’s own data show that few people maintain a profile for longer than six months. Many leave as soon as they find a partner, others lose interest, and still more are poached by other websites. This failure to keep clientele is the reason that many of China’s online dating services are facing mounting financial losses.

The Nasdaq-listed Jiayuan, despite accounting for more than one third of China’s online dating market, blames rising marketing costs for its paltry 15.9 million yuan (US$2.54m) profit in the third quarter of 2012, a 34 percent drop compared to the same period in 2011.

Image Issues

The only way dating sites can continue to see profit growth, according to research by Qi Jianzhe, analyst with IT research Analysys International, is by hiking their sales budgets and attracting new users. Annual sales in the online dating market are projected to grow to 2 billion yuan (US$320m) in 2013, compared to 1.3 billion yuan (US$208m) in 2012.

However, sales growth has barely boosted Jiayuan’s profits, largely due to the soaring cost of advertising its services, according to the same report.

Chinese netizens are notorious for their resistance to pay for online services -

30

less than one fifth of Jiayuan’s membership of more than 10 million are actually paying for their personal accounts.

The profit model of China’s top three dating sites, Jiayuan, Baihe and Zhen’ai, sharing among them more than 70 percent of the market, has copied that of Match.com. Users have to pay membership fees in order to gain unlimited site access, as well as purchase virtual gifts such as “roses” priced at 2 yuan (US$0.3).

As a result, many prospective users who register for free stop visiting Jiayuan without spending any money at all. Those who do give it a chance often abandon their search before finding a partner. According to Analysys International, weaknesses in Jiayuan’s algorithms give it a low rate of success when it comes to matching prospective couples, further weakening its image.

NEWSCHINA I February 2013

Illustration by Wu Shangwen

Out of 8 million active users, only 7,000 find a match each day.

Another common complaint is that Jiayuan and other dating sites are used as a front for companies to lure in customers, with employees maintaining fake profiles in order to attract business to restaurants, bars and nightclubs with the promise of meeting Mr or Mrs Right. Jiayuan has had to hire more than 100 moderators simply to handle its fraud complaints and identify swindlers. Its main rival Baihe introduced real-name registration in late 2011 in an attempt to combat this problem.

However, Zhou Zhongxiao, vice president of Jiayuan, doesn’t believe the site is to blame for its poor record and worsening image – rather, he has publicly singled out the “unrealistic expectations” of its users.

“Too many people want to seek a date that is out of their league,” Zhou told our reporter. “Why can’t they be a little more realistic?”

“Those who have failed to find a date in several years simply lack skills in online courtship,” he added.

dent on advertising.

A more immediately profitable area of business in the view of Jiayuan’s executives is China’s hugely lucrative wedding market. 24 million Chinese get married each year, with the average couple spending tens of thousands of yuan on their wedding banquet. However, such a profitable sector is also plagued by a glut of rival companies which have already established themselves, and so Jiayuan has so far had to limit itself to “headhunting” services for high-earners seeking a spouse these services now account for one tenth of Jiayuan’s total annual revenue.

Clients are charged a minimum of 40,000 yuan (US$6,400) for a “headhunting service package” lasting eight months for a male client, and six months for female. Prices go up depending on the relative “difficulty” of securing a match, according to Hu Yaozong, vice president of Jiayuan’s offline service sector. The most lucrative case handled by the company so far netted them 5 million yuan (US$800,000), paid by a middle-aged billionaire who wanted to marry a woman in her early twenties. Had the middle-aged billionaire been female, however, the price would have been even higher – women over 35 need to pay a hefty premium on Jiayuan’s matchmaking services, whereas for men the threshold is 50.

Height is also a key factor. The ideal height range for men, according to Jiayuan, is between 166 and 190 centimeters and for women between 155 and 175 centimeters. Those falling outside these parameters have to pay an extra 20,000 yuan (US$3,200) for matchmaking services. Earnings are another factor – the bigger the gap between a client’s earnings and those of their imagined ideal partner, the higher their service fee. Divorcees and people with children from previous relationships are all charged considerably more than unmarried singles.

Middle-aged male multimillionaires have proven a goldmine for websites like Jiayuan, which offer customized services whereby employees will scour China for suitable candidates - typically young, attractive women with fine arts educational backgrounds. However, even this service is not guaranteed to net a spouse – Jiayuan merely guarantees a first date.

Lucrative as marriage headhunting may seem, however, it is remains a niche market. Websites like Match.com secure their market share with sheer volume, and it is in this area that Jiayuan and its rivals are struggling to succeed. Without the ability to balance the provision of reliable services to existing members and maximize outreach to future clientele, China’s online dating agencies could be facing a bleak and lonely future.

Offline Expansion

While continuing to rely on membership fees and value-added services like virtual gifts for a majority of their revenue, profit pressures have now pushed dating sites to make forays into offline commerce.

Jiayuan had tried to integrate social networking with its dating service, allowing members to follow each other on izhenxin.com, a new dating and microblogging platform launched in late October 2012. This service is attractive to longtime members who have failed to find a perfect match, such as Hu Qiang, as it allows for more direct communication and is less profile-oriented. However, the profitability of this service is also depen-

NEWSCHINA I February 2013

31

china 2012

STATE OF THE NATION

T

he Year of the Dragon has been one of change and challenge. The Communist Party skillfully navigated the tricky waters of a once-in-a-decade leadership transition while the downfall of Bo Xilai and his allies reminded the public that corruption continues to plague the highest levels of power.

China continued to expand its overseas presence with more business ventures and multilateral trade agreements than ever, though an economic slowdown and the stirrings of a push-back against its influence in Europe and America serve as a warning to those who see commerce as a panacea for all conflicts of interest.

The US pivot to Asia came alongside the re-election of “Pacific President” Barack Obama, whose reaching out to Myanmar, Cambodia and Thailand has added further obstacles to China’s attempts to assert itself as a benevolent superpower. These attempts have already been severely hampered by the deterioration of relations with China’s most influential neighbors, with territorial disputes threatening all-important regional trade.

More development milestones - the first Chinese woman in space, a record-breaking dive by a Chinese submersible and another spectacular Olympic performance by China’s athletes came alongside familiar public complaints - snowballing food safety scandals, a new trend of NIMBY protests against industrial prestige projects and the looming demographic precipice of the aging population.

Our editorial team has combed our 2012 archives for a one-stop guide to China’s past year, selecting the most important, most interesting and most representative stories, personalities and quotations we have featured during the last 12 months. This overview will inform both regular readers and recent subscribers about China’s 2012 journey, and, most crucially, the state of the world’s fastest-rising power as it heads into 2013 - under new management.

32

1 2 3 4 5 6

Headlines

People

Economics

Culture

Phrases

Online

NEWSCHINA I February 2013

1. Headlines

Leadership Transition (November)

Territorial Disputes (March-present) Since March 2012, spats have continued between China and its Southeast Asian neighbors, particularly the Philippines, over a disputed area of the South China Sea. These escalated following the Philippines’ alleged harassment of Chinese fishermen near Huangyan Island (Scarborough Shoal), and their invitation to foreign oil companies to explore resources in disputed waters adjacent to the Nansha (Spratly) Islands. In late July, China established a new “prefecture level” city, Sansha, to administer three disputed islands in the territory. In the East China Sea, decades of dispute between China and Japan over ownership of the Diaoyu Islands (known as Senkaku in Japan) provoked vehement nationwide protests against Japanese detention of Chinese nationals who sailed to the islands, and tension grew when Japan officially “nationalized” the islands by purchasing them from their private owners in September. Both of these territorial disputes remain unresolved and continue to cause controversy.

NEWSCHINA I February 2013

The Chinese Communist Party’s 18th Congress, held in Beijing November 8-14, 2012, was the venue for a once-in-a-decade power transition in China. A new generation of leaders, headed by General Secretary Xi Jinping, took over from the previous leadership, led by Hu Jintao. After decades of breakneck economic development, the new party leadership faces historic challenges including the pressing issues of ecological degradation and rampant corruption. Since the Congress, anti-corruption campaigns have been launched across the country with investigations into alleged disciplinary violations by a number of high-ranking officials in Guangdong, Chongqing and Shandong, all initiated by the Central Committee. In addition, Guangdong is to launch a pilot project requiring all Party and government officials to declare their assets. 2013 will likely bear witness to whether or not such efforts can be extended across the nation, and really be effective in the fight against corruption.

33

china 2012

Road Tragedy (August) Environmental Protest (July) Early July, construction of a molybdenum copper plant was halted after thousands of locals took to the streets to protest in Shifang, Sichuan Province. The mass incident caused skirmishes between police forces and protestors, who tossed bricks at local government office buildings. The demonstration was one of a series of “not in my backyard” grassroots protests against polluting chemical plant projects sparked across the nation this year. In October, a similar mass protest took place in Ningbo, Zhejiang Province, when thousands took to the streets to oppose the proposed expansion of a petrochemical factory. The Ningbo government immediately announced that the expansion would not go ahead. Public planning hearings do not exist in China, and many have hailed this series of legal rights movements across the country as a breakthrough for civil rights awareness.

36 were killed in a fatal road accident where a double-decker sleeper bus collided with a fuel tanker in Yan’an, Shaanxi Province on August 26. The startlingly high number of traffic accidents in China in recent years has caused widespread public and government concern over traffic security issues. Following the August collision, in addition to banning the manufacture and sale of sleeper buses, road transport authorities in many localities have suspended or banned all overnight long-distance bus services. However, the lack of a systematic road safety program, together with loose safety testing standards in China’s domestic car industry and slack enforcement of driver’s licensing all combine to pose a continuous threat to people’s lives.

Serial Killer Gunned Down (August) One of China’s most wanted fugitives, Zhou Kehua, was shot and killed by police on August 14 in Chongqing, having eluded the authorities since 2004. 42-year-old Zhou was suspected of killing 10 people and wounding several others in an eight-year string of armed robberies. A robbery that left one woman dead and two men injured outside a bank in Chongqing on August 10 set off a large-scale manhunt that ended 4 days later when Zhou was gunned down outside a shoe factory. Gun crime is exceedingly rare in China given the limited access to firearms, including a ban on private gun ownership. Zhou’s alleged crime spree captured the country’s attention partly because of its reported brutality, but also for Zhou’s ability to elude China’s well-funded public security apparatus, despite having what the Chongqing police described as only a “junior middle school education.”

34

NEWSCHINA I February 2013

Deadly Downpour (July) Beginning on July 21, a 16-hour rainstorm flooded Beijing’s metropolitan area. The biggest rainstorm in the capital since 1951, it plunged the city into chaos. The official death toll in the flash flood stands at 79, with one man drowning in his car under a submerged viaduct in the busy downtown area. Apart from scientific explanations such as “heat-sink” caused by city expansion, the great loss of life and property in the rainstorm sparked public anger at what people saw as the badly constructed drainage system and the failure of the authorities to adequately prepare the city for extreme weather. In 2012, many cities in China, including Tianjin, Wuhan and Nanning, all experienced record-breaking rainstorms and floods.

Going Deeper (June)

Anti-Japanese Protests (September) As the territorial disputes between China and Japan escalated following Japan’s purchase of the disputed Diaoyu Islands, to which China also lays claim, massive anti-Japan demonstrations erupted in cities across China as crowds of thousands of Chinese vandalized Japanese restaurants, ransacked department stores, and smashed up Japanese-made cars. Some protests turned violent, resulting in damage to Japanese-branded businesses and the temporary closure of several Japanese-funded companies. In Xi’an, Li Jianli, a Toyota car owner, was struck on the head with a steering lock and saw his car destroyed by an angry mob as he drove home on September 15th. Li was taken to hospital and diagnosed with brain trauma. The brutality was caught on film, and went viral on Chinese video-sharing websites and microblogs, triggering a fierce public backlash. A new phrase “violent patriotism” was coined to decry the behavior of protestors. Police arrested Li’s suspected assailant in October.

NEWSCHINA I February 2013

As China’s manned spacecraft Shenzhou IX was successfully launched in mid-June, China’s manned submersible Jiaolong broke a new national dive record after reaching 7,062 meters below sea-level during its fifth diving test into the Mariana Trench in the Pacific Ocean. The voyage brought China into the ranks of deep-sea faring countries including the US, Japan, France and Russia. Official sources told media that after collecting samples, recording video footage and photographing the undersea world in 2012, the Jiaolong is expected to conduct further scientific research in the South China Sea between April and May 2013.

35

china 2012

2. People Xi Jinping, 59, General Secretary of the Communist Party of China After months of speculation, Xi Jinping, always the favorite, was formally inaugurated as China’s top political figure as well as head of the armed forces in November 2012. Taking the reins of an ascendant but increasingly conflicted China faced with a long list of domestic and international challenges, all eyes are on Xi and the six other members of the slimmed-down Standing Committee of the Politburo to set the timetable for further political reform.

Barely one month after assuming power, a number of senior Party officials have found themselves under internal investigation, with some observers claiming that Xi is seeking to secure his position by taking a more hard-line stance on corruption than his predecessor Hu Jintao. Xi’s transition from heir apparent to paramount leader will be completed in early 2013, when he officially takes over from Hu as head of state.

In one high-profile speech, Xi spoke of a “Chinese dream,” which he defined as “the renewal of the Chinese nation.” With speeches by Chinese leaders often the public’s only insight into their political personalities, some have implied that Xi’s choice of words is a sign that his tenure will be marked by more assertive policies.

Bo Xilai, 64, disgraced politician Among the officials disgraced in 2012, the most senior and the most sensational one is Bo Xilai (left), former Party Secretary of Chongqing municipality and Poliburo member as well as one-time favored candidate for a seat on the Wang Lijun all-important decision making body’s Standing Committee.

An attempted defection by Bo’s police chief Wang Lijun (right) to the US on February 6, 2012 led to the arrest of both Wang and Gu Kailai, Bo Xilai’s wife, on suspicion of complicity in the death of Neil Heywood, a British businessman who had close ties to the Bo family. On August 7, Gu Kailai received a suspended death sentence for Heywood’s murder, likely to be commuted to a life sentence.

Wang was convicted of treason, obstruction of justice and an assortment of offenses relating to corruption, receiving a 15-year jail sentence. Bo himself, kept in custody but out of the news during the sensitive months surrounding the 18th Party Congress, is likely to face a formal criminal trial later this year.

An unashamed populist, Bo’s tenure in Chongqing was marked by his perceived zero-tolerance crackdown on organized crime and a high-profile anti-corruption campaign, both of which have been quietly debunked following his detention and expulsion from the Party.

36

NEWSCHINA I February 2013

Mo Yan, 57, Nobel Prize laureate

Liang Wengen, 56, billionaire After topping the 2011 Forbes China Rich List, Liang, chairman of Sany, China’s heavy machinery giant, kicked off 2012 in style as rumors began to circulate that he would be the first businessman to be given a seat on the Central Committee of the Communist Party of China. In February, Sany launched a high-profile acquisition of German multinational Putzmeister, which led to an abortive attempt to expand this new acquisition in the US. The Obama administration went on to block an acquisition which would have seen the Sany-owned Ralls Corp. from gaining control of four wind farms in Boardman, Oregon, citing the reason that the wind farms were located close to military facilities.

Sany reacted by taking the Obama administration to court, though legal experts believe the company has little hope of a victory. In the meantime, rumors that Sany’s capital flow has been severely depleted by its failures in overseas markets, leading to massive layoffs, caused the company’s stock price to plummet. On the Forbes 2012 China Rich List, Liang found himself a distant 6th.

In late November, Liang made headlines by announcing that Sany would relocate its headquarters from Changsha, Hunan, to Beijing, citing “embarrassment” on the part of the Changsha authorities. Liang accused the Hunan government of collusion with Sany’s chief rival Zoomlion Heavy Industry, engaging in industrial espionage, slander and other illegal business practices. China Economic Weekly offerd readers a different assessment, claiming that Liang’s decision to relocate was a retaliation after he failed to gain support from Hunan officials in his failed bid to become a member of the Party’s Central Committee in November.

NEWSCHINA I February 2013

As the first Chinese citizen to win a Nobel Prize, Mo Yan’s newfound international acclaim has been hailed in China as an acknowledgment of that country’s contemporary literary culture. However, given Mo’s ties to the Communist Party and its censorship apparatus, his win also triggered debate.

Many have accused Mo of dodging the issue of censorship and failing to use his position as a Nobel laureate to defend freedom of expression. Others, however, have pointed out that most of Mo Yan’s works often take an unflinching view of social ills, including political oppression, incorporating sensitive themes such as the Cultural Revolution, forced abortion and local uprisings.

In its announcement, the Nobel committee praised Mo’s technique of “merging hallucinatory realism” with “folk tales, history, and the contemporary.”

“This is a victory for literature, not political correctness,” said Mo Yan in a December 6, 2012 news conference prior to the awards ceremony.

37

china 2012

Ye Shiwen, 16, swimmer After Ye (left) won gold in the women’s 400 meters individual medley and set a new world record at the London Olympics, a senior coach with the American men’s swimming team, publicly implied that she had secured her victory through doping. Although the British Olympic Association stated that Ye had passed her mandatory drug tests and “deserved recognition for her talent,” it was pointed out that Ye’s time in the final 50 meters of the race, faster even than men’s event gold medalist Ryan Lochte in the men’s event, was simply “too good to be true.”

The allegations aroused a storm of nationalistic protest in China, with many accusing the Americans of racism. The more reasonable of Ye’s supporters argued that despite her record-breaking home stretch time, Lochte’s overall time was comfortably ahead of Ye’s.

A homegrown belief that China and her athletes are singled out by Westerners as inveterate cheats continues to characterize Olympic controversies, with many drawing parallels with perceived opposition to China’s rise as a world power. Indeed, the controversy surrounding Ye eclipsed the astonishing success of her teammate Sun Yang (right), who left London with two gold medals and a place in the history books as the first male Chinese swimmer to win an Olympic gold.

Liu Yang, 38, astronaut On June 16, 2012, Shenzhou IX, China’s most advanced spacecraft, docked with Tiangong I, China’s space station. On board were Liu Yang (right), China’s first female astronaut, and her two male colleagues Jing Haipeng and Liu Wang. While the mission itself was one of many manned missions required to complete assembly of the country’s first space station, Liu’s presence on board was taken as a milestone in China’s domestic space program, which has set lofty targets for the coming decade, including a moon landing and the expansion of China’s satellite array.

As a member of the Chinese military, Liu’s public image was carefully managed by the official media, with her commitment to her work heavily emphasized and her personal life and character, beyond her exemplary patriotism, left out of all coverage. However, not every public appearance was all smiles. When Liu and her two fellow Shenzhou IX astronauts appeared at a “welcome home” event in Hong Kong on August 15, all three national heroes found themselves heckled by protesters opposing a new “patriotic” educational policy being introduced to the territory.

38

NEWSCHINA I February 2013

3. Economics New Economic Pace

China’s economic growth for the first three quarters of 2012 slowed down to 7.7 percent, one of its lowest points since 1993, as a result of decline over seven consecutive quarters. It partly reflects the government’s goal of placing growth on a slower track, while focusing on “growth quality.” The sluggishness of export markets is another significant drag. While little progress has been made on giving household consumption and industrial innovation a bigger role, infrastructure investment remains the most realistic option for policymakers. In the short term, there is still enough room to boost the economy, given China’s eased inflationary pressure and strong fiscal position, though this window of opportunity is closing fast. In the long term, the question of the market-government relationship must be answered.

Quarterly GDP growth, %

Q4-2010 Q1-2011

Q2-2011

Q3-2011

Q4-2011 Q1-2012 Q2-2012

Q3-2012

Private Lending Crisis The careers of famous Chinese private entrepreneurs typically begin with small business start-ups funded by the meager savings of their family networks, which expand with the aid of high-interest loans from legal or illegal private lenders.

The economic downturn resulted in multi-billion-yuan losses suffered by many private lenders, and significant social unrest. Some big borrowers were severely punished. A reform program has been launched in Wenzhou, one of the epicenters of the crisis, to create an open market for private lending, improving loan access for small- and medium-sized enterprises (SMEs) and ensuring better regulation of the private lending market.

Banks are also required to lend more money to SMEs. However, private banks are still illegal, a major impediment to small- and medium-sized enterprises.

NEWSCHINA I February 2013

39

china 2012

Interest Rate Reform Since July, Chinese commercial banks were given some freedom to determine deposit interest rates in order to attract deposits for the first time. They have also been given more flexibility to offer cheaper loans than ever before. This is the first substantive move towards building a market-based risk-pricing system in banking. The new interest rate flexibility has put pressure on profits, which for decades have been based on cheap deposits and cheap loans to big borrowers, normally State-owned or well-connected enterprises. Banks are expected to shift to sophisticated non-credit services like those offered by international banking giants, and loaning to SMEs, with whom higher lending rates can be negotiated. Currently, banks compete fiercely on off-balance sheet credit grants, creating new business but also resulting in significant risk.

The success or failure of the reform will have a crucial impact on China’s banking-dominated financial sector.

Deposit-loan intrest spread: Benchmark: deposit: 3%, loan 6%, spread 3%

Pre-reform minimum spread

Dark Days for the Stock Market China’s stock market plunged to well below 2000 points on November 27, a psychological indicator of a long, deep bear market. Although it rebounded back to 2000 points a few days later, investor confidence remained weak after the bear trend dominated the market for a few years. Net capital outflow has continued. Transactions are not active. Few can explain why the world’s fastest-growing major economy has some of the world’s worst stock prices.

However, foreign investors have increased their holdings of Chinese shares through their Qualified Foreign Institutional Investors accounts. Regulators are applauded for stepping up efforts on cracking down on the misconducts of listed companies. Investors expecting less government intervention in the listing process don’t think it’s enough.

After-reform minimum spread

deposit: 3%

deposit: 3.3%

loan: 5.4%

loan: 4.2%,

spread: 2.4%

spread: 0.9%

E-commerce Controversy “Come on, let’s fight to the death!” With these provocative words on his microblog in August, Liu Qiangdong, CEO of 360buy, a leading B2C website, launched a price war on Suning and Gome, two home appliance chain stores that are moving into e-commerce. The same thing had happened in June, and lasted one day. This time, it lasted two days, and all three retailers announced victory. The loser? The consumer. In September, government investigations uncovered price fraud, including several cases of companies raising prices before cutting them. On November 11, a promotion campaign launched by Taobao, an e-commerce website, generated US$3 billion sales within 24 hours. According to the Data Center of China Internet, online shopping accounted for nearly 5 percent of the country’s entire retail sales for 2012, compared with nearly zero in 2003.

40

NEWSCHINA I February 2013

Shale Star By early December, two rounds of bidding for shale gas exploration had finished, meaning China had begun implementation of its shale gas strategy less than half a year after the plan was first announced. It is expected that by the end of 2015, 6.5 billion cubic meters of shale gas will have been extracted, about four percent of China’s gas supply by then. While several private companies are on the list of successful bidders, State-owned giants remain the majority. Foreign companies like Total and Shell have already joined hands with SOEs on China-based extraction projects. China hopes to follow the US in using shale gas to reduce its heavy reliance on oil and gas imports.

ZTE: Telecom / the US Solar Cliff

Huawei: Telecom / the US

Encouraged by government support for new energy, the investment frenzy in China’s solar power industry led to overcapacity and heavy reliance on the US and European markets. In October, the US announced punitive tariffs on imports of Chinese solar cells. In September, the European Commission launched trade investigations into about US$21 billion Chinese PV imports. Major Chinese companies either faced being delisted from the New York Stock Exchange because of slumping share prices or insolvency due to heavy debts. In November, the Chinese government filed a complaint with the WTO against the EU’s subsidization of its own solar power industry. Since it will take some time before domestic demand can rush to the rescue, China’s solar industry now faces a survival crisis.

Sany: Heavy machinery / the US

CNOOC: Oil / Canada Zhong Kun: Real estate / Iceland

Hard Road Abroad Several investments by big Chinese companies have run into barriers in foreign countries, out of “national security” concerns. In each case, the company in question has been accused of having too close of a connection with the Chinese government, either in the form of personal background (official-turned-businessman Huang Nubo), the sensitive nature of the industry (heavy machinery manufacturer Sany), government ownership of the company itself (State oil giant CNOOC), or a combination of those reasons (telecom companies Huawei and ZTE). Sany has sued President Obama for vetoing the company’s acquisition of a wind farm. Opportunities for Chinese companies to go global are undermined by a combination of deep political mistrust and the vigilance against competition in host countries, and the strong State intervention in economy in China.

NEWSCHINA I February 2013

41

china 2012

The Property Game Since 2010, China’s central government has imposed unprecedentedly stringent policies to temper soaring property prices, imposing restrictions on buyers to contain demand and encouraging the development of low-income housing projects to increase supply. For local governments, the property market is the biggest source of fiscal revenue at their disposal, and the quickest way of increasing GDP growth. Their attempts to circumvent the restriction and delay affordable housing projects have repeatedly been blocked by the central government. The decline in property investment and sales in the first ten months of the year are evidence that the policy has taken effect. The central government has reiterated its commitment to continuing the control into 2013. However, strong sales and price increases in November show that the game is far from over.

Yuan Movement From April 16, the trading band of the yuan on the spot market was expanded to 1 percent of the midpoint price set daily by the People’s Bank of China.

This doubles the previous 0.5 percent limit and is regarded as a milestone in the move towards a market-based foreign exchange system. Since the global financial crisis in 2008, the yuan has seen peaks and troughs, contrasting sharply with its previous constant upward movement since the managed floating system was installed in July 2005. Analysts believe the yuan exchange rate is now very close to equilibrium.

Changes that already happened and will continue affecting the value of yuan include the reduction of China’s trade surplus, the deficit of its capital account, and the economic climate and policies of its major trading partners like the US, the EU and other emerging economies.

42

NEWSCHINA I February 2013

Photo by by AFP

4. Culture Popular Voice From July to the end of September, China was fixated on talent show The Voice of China, the Chinese version of The Voice of Holland. For more than 10 weeks, the show topped China’s TV ratings, reaching an audience share of 29.5 percent at the peak of its 100-minute final on the evening of September 30. Online, meanwhile, each of the 15 episodes accumulated tens of millions of clicks, making it one of the most watched programs of recent years. Since the success of the second series of Super Girl, a singing contest for women in 2005, talent shows have become major cash cows for Chinese networks.

Yet, in contrast to earlier offerings, The Voice of China prioritized singing ability over all else – for the first time, the audience seems to have been overwhelmed by the music itself. The show’s producers went on to make 300 million yuan (US$48m) on their 100 million yuan (US$16m) investment.

Palace Intrigue Starting in March 2012, a 76-episode drama series called The Legend of Zhen Huan had the nation glued to their TV sets and computer screens. Zhen Huan, a 17-year-old woman, is taken into the harem of emperor Yongzheng (1678-1735) of the Qing Dynasty (1644-1911) and thus begins her struggle for survival in the dog-eat-dog environment of the imperial palace. Rising from the position of a low-ranking concubine to that of the empress dowager, Zhen Huan’s complex fate was so popular with audiences, particularly women, discussion of the latest plot developments became a daily activity for neighbors, friends and co-workers. Many saw the story as an allegory for modern-day office politics, perhaps the main reason behind its popularity.

NEWSCHINA I February 2013

43

china 2012

Boycotting the Bosses In just one week in early June, more than 400,000 netizens joined a boycott initiated by KaiFu Lee, the founding president of Google China, against Only You, a job-seeking reality TV show shown on satellite TV station Tianjin TV. Zhang Shaogang, the show’s host, earned notoriety for his arrogant and dismissive attitude towards some of the contestants. In one episode, a student who had returned from studying overseas fainted on the show after the judges alleged that his master’s degree received in France was fake. In other episodes, the host and panel of entrepreneurs would often enter into fierce arguments with the job-seekers. Critics claimed that the show was a “very negative depiction of workplace culture.” While some believed it was an honest depiction of China’s cutthroat job market, the boycott revealed a desire for fairness and mutual understanding in the employer-employee relationship.

An Epic Dispute

Photo by by AFP

Feudalism may have collapsed, but deep-rooted traditions die hard. In White Deer Plain, tragedy follows on the heels of revolution and wars on the fertile land of the eponymous plain in northwest China.

In Cheng Zhongshi’s 1993 novel, the love and hate between two families, and their tenacity amid social turmoil develop into an epic tale spanning half a century from the fall of the Qing Dynasty in 1911. Wang Quan’an, winner of the Golden Bear at the Berlin International Film Festival and one of China’s famous “sixth generation” directors, spent three years completing his big-screen adaption of the modern classic. Expectations had been high before the movie’s release in September, and the movie polarized critics and audiences. The director won praise for his realistic portrayal of history, but many criticized his poor presentation of the story’s romantic lead, actress Zhang Yuqi.

44

NEWSCHINA I February 2013

Authenticity Spat At the very end of 2011, star blogger, rally driver and novelist Han Han posted a series of three blog posts laying out his views on revolution, democracy and freedom. Before long, science writer and notorious fraudbuster Fang Zhouzi made accusations that Han’s posts were ghostwritten. In the disputed posts, Han advocated a gradual approach to democratic reform, a stark contrast to his usual gung-ho attacks on corruption and the selfish interests of the rich and powerful.

For a while, both the right and left wings turned on Han, who later offered 20 million yuan (US$3.2m) and the copyright to his entire oeuvre as a reward to anyone who could provide conclusive proof that he had used a ghostwriter. Though no one has so far claimed the reward, the accusations continued for months.

Pritzker Pride Architect Wang Shu studies the sites where his project locations as long as possible. He adapts to the local environment, and reuses local building materials. Incorporating traditional Chinese aesthetics from landscape paintings and calligraphy, his buildings are typically simple and abstract, finding equilibrium between tradition and modernity. In February, he won the prestigious Pritzker Architecture Prize, the first Chinese citizen ever to do so. Building a bridge between the past and the present, Wang cherishes Chinese architectural heritage, and has strongly campaigned against the demolition of traditional buildings.

Flavor of the Year No Chinese-made documentary has ever caused such a stir as A Bite of China. The 7-episode documentary took director Chen Xiaoqing and his team 13 months to complete. Produced

by State broadcaster China Central Television (CCTV), the documentary introduced viewers not only to the rich and refined world of Chinese gastronomic culture, but also to the human stories behind the food and its production. Meanwhile, the narration showed considerable improvement on previous works, and the production team were honest about their imitation of documentaries produced by the BBC. Dining culture varies widely inside China, where people now migrate frequently from one place to another, and the series not only whet viewers’ appetites for fine cuisine, but also their nostalgia for the flavors and fragrances of their hometowns.

NEWSCHINA I February 2013

Moneyball The market-oriented reform of China’s sports leagues in the past two decades has resulted in such rapid monetization that some of the world’s biggest names are now being made offers they can’t refuse, and 2012 saw something of a “China Rush” for famous foreign athletes and coaches. In October and November, former NBA stars Tracy McGrady and Gilbert Arenas joined their new CBA (Chinese Basketball Association) teams the Shanghai Sharks and the Qingdao DoubleStar Eagles respectively. In June, former English Premier League soccer star Didier Drogba signed up with Shanghai Shenhua, while famous Italian soccer coach and former player Marcello Lippi took over at Guangzhou Evergrande in May.

45

china 2012

5. Catchphrases 躺着也中枪

Shot Lying Down

Originating from the movie Fight Back to School, in which the popular Hong Kong actor Stephen Chow complained that he was so unlucky that he could even get shot while lying down, the term is now widely used in the Chinese online community and in the entertainment circle to mean “to be punished unfairly,” usually to refute an accusation. For example, if a celebrity were to claim that their marriage was destroyed by an anonymous third party, anyone the media were to accuse of being the culprit might claim to have been “shot lying down” to protest their innocence.

Ordinary youth, arty youth, dumbass youth

普通青年， 文艺青年， 2B青年

Ordinary youth refer to young Chinese who follow mainstream culture, whereas arty youth (also known by the throwback communist term “petty bourgeoisie”) are primarily known for their pretentiousness – dumbass youth, meanwhile, are the ones that style left behind. While the three terms have been around for some time, a meme comparing them went viral on the Internet in early 2012.

Pictures contrasting how the three groups dress, act, talk or deal with various situations resulted in equal parts hilarity and self-reflection among China’s online community.

Yuanfang, what do you think?

元芳，你怎么看？

The question comes from a popular Chinese TV series telling the story of Di Renjie, a Chinese version of Sherlock Holmes set in the Tang Dynasty, who habitually asks for the advice of Li Yuanfang (his Watson) when trying to crack a mystery. The phrase has now entered everyday speech, but is most commonly used on online forums, to start a discussion or to solicit other people’s opinions on something outrageous.

While the series has been popular for several years now, the term didn’t gain much traction until this October when a girl in Quanzhou, Fujian Province, was found dead, having committed suicide by jumping off a building. A Chinese netizen started an online discussion entitled “Yuanfang, what do you think?” popularizing the term overnight. The classic reply is “Sir, there must be a secret behind it.”

46

你懂的

You get it

One of China’s shortest yet most powerful catchphrases, “You get it” indicates tacit understanding of a common truth. The term first appeared on the popular Chinese web portal Mop, and was used by netizens as a request for the incriminating pictures in a particular sex scandal. In order to avoid censorship – China forbids all forms of pornography on the Internet – many used wording like: “Hey, original poster, here is my e-mail address. You get it.” The term is now the easiest way to imply that a topic involves sensitive political matters, or some unwritten rule or unspoken truth. For example, if a netizen was to write “How could a local official afford so many fancy villas? You get it…” the implication would be that the official in question was corrupt.

NEWSCHINA I February 2013

“I’m here to read your water meter/deliver a package”

“查水表”/“送快递”

The term originated from crime dramas on Chinese TV in which police, when knocking on a suspect’s door, often conceal their identities by saying “We’re here to read the water meter,” or “Package delivery.” Since online watchdogs exposed a number of cases where local officials had hunted down people who had exposed government scandals, the term has been increasingly used to satirize censorship – anyone posting sensitive material will be warned by commenters: “Be careful, someone might drop by to read your water meter tonight.”

Chinese netizens have developed stock replies to suspicious callers: “The water meter is outside the door,” and “You’ve got the wrong person. I didn’t order anything.”

过劳死

累了，感觉再也不会爱了

Worked to death

I’m sick of it – I’ll never love again

“Work to death” is not a new term in China, but it has come into vogue this year following a series of cases about employees allegedly being worked to death. A recent case was that of Luo Yang, a 51-year-old director-in-chief of China’s new carrier-borne-fighter jet the J-15, who died of a heart attack onboard the carrier, the Liaoning, on November 25, the same day that the J-15 made its first successful landing on the ship. Experts said that Luo had suffered heart illness for years, but that he was too busy with work to receive timely medical treatment. In October, office solutions provider Regus published the results of their global survey on work pressure, which revealed that Chinese people’s work-related stress was nearly 30 percent higher than the global average.

The term has been widely used since a 13-year-old boy posted on the Chinese social network Douban, complaining that girls prefer younger boys, and that he was now too old to attract a decent girlfriend. “I am an old man born in 1998…suddenly, an indescribable coldness has gripped my heart,” he wrote. “I want to be strong and independent, but I cannot bear the loneliness. I could find a wife by going on a blind date, but that’s not what I really want.”

His words echoed with China’s sizeable population of singles, who blame society’s materialism for their solitude.

正能量

Positive power

NEWSCHINA I February 2013

“Positive power” was a word coined by the Chinese media during the London Olympics. Now, however, it has been appropriated by the authorities to encourage Chinese traditional media to deliver more “positive news,” in order to brighten up a population plunged into despair by constant scandals. A typical case was when reports of violent nationalist riots over a territorial dispute with Japan caught headlines, State media and critics called for more “positive power” news to keep people from thinking that all anti-Japan protestors were violent.

47

china 2012

6. Online Official Orgies

Wu Hong

Photos of Wu, a government official from Chongqing, embracing a nude woman while wearing his official uniform went viral this year. A local disciplinary inspection committee has since looked into the case.

Lei Zhengfu

Party secretary of Beibei District of Chongqing Lei Zhengfu was exposed by a two-year-old sex tape filmed by his mistress. A series of screenshots were posted online late November 2012, and the woman in question turned out to have been “gifted” to Lei by a local construction contractor, who ordered her to record their encounters in order to gain more leverage on government projects. Lei has since been dismissed from his post, and is now under investigation for various other misconducts.

48

Li Dejin

Director of the Department of Transport in Fujian Province, Li was photographed wearing a diamond-studded luxury Rado watch worth more than 50,000 yuan (US$8,000) and an Hermès belt worth 13,000 yuan (US$2,100) by Yunnan-based newspaper the Kunming Metropolitan Times early October.

Two months after the report, ant-corruption authorities in Fujian were yet to look into the case, triggering a new round of appeals on the blogosphere in early December.

NEWSCHINA I February 2013

WatchWatchers Yang Dacai

An online “human-flesh search” for Yang, head of the Shaanxi Provincial Bureau of Work Safety, after he was photographed grinning at the scene of a traffic accident that claimed 36 lives in late August 2012, revealed that he owned 10 luxury watches that he could not have possibly afforded on a civil servant’s salary.

Yang was swiftly fired and is still under investigation.

Yuan Zhanting

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

The mayor of Lanzhou, capital of Gansu Province, was accused by a microblogger in early December of owning five luxury watches. The local anticorruption bureau later claimed only one of the watches was genuine.

NEWSCHINA I February 2013

49

china 2012

Food Scandals

Poisonous Capsules

More than 10 pharmaceutical companies were exposed for using industrial gelatin produced from scrap leather in the production of medicinal capsules.

Plasticizer-contaminated Baijiu

Toxic plasticizer was found in almost all brands of baijiu, China’s most popular liquor. The use of plasticizers as food addictives is banned in China, due to links with infertility.

Toxic Preserved Fruit

Preserved fruit factories in Hangzhou and Shandong Province were found to be processing fruit with industrial bleach, as well as repackaging and reselling expired products.

Photo Memes Aircraft-carrier Style

After the video clips were broadcast of fighter jets practicing their first aircraft-carrier landing and take-off exercises, people, ranging from doctors to firemen, started uploading photos of themselves giving the “cleared for take-off” signal to their gurneys and fire trucks.

50

NEWSCHINA I February 2013

Lives of Pi

Over-stretched

After a picture of a college girl doing the splits in her dormitory went viral, many other young women followed suit, uploading photos of themselves in various other humorous contortions, doing the splits while eating instant noodles or performing daily chores.

NEWSCHINA I February 2013

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

Pictures of Chinese netizens imitating the theatrical poster for the blockbuster movie Life of Pi went viral online. The tigers were replaced with cats, dogs or rabbits.

51

economy

Courier Industry

On The Move China’s glutted domestic courier industry, with 8,000 private and Stateowned companies competing for turf, faces an uncertain future. Can this hodgepodge of warring service providers hope to compete on anything other than price with their big international rivals?

By Wang Yan

S

ince 2005, the courier market in China has grown 25 percent year on year, with annual average business volume in the sector increasing by 50 percent in the last two years alone. China’s vast population of consumers are increasingly abandoning newly-built shopping complexes to take part in digital retail therapy, and the couriering of vital documents bearing the all-important scarlet stamps still ubiquitous across all commercial and administrative sectors is often the only way to guarantee security.

China’s 200 million online consumers are increasingly reliant on couriers, with many willing to shop around for the more dependable. In 2011, the total value of mainland e-commerce was valued at 6 trillion yuan (US$960bn), 800 billion yuan (US$128 bn) of which was spent on online retail.

On November 11, a nationwide online discount festival designed to coincide with the so-called “Singles’ Day” celebrations saw Chinese netizens spend 19.1 billion yuan (US$3bn) on China’s eBay equivalent taobao.com (see: “Single Currency,” NewsChina, Volume 053, December 2012).

Da Wa, deputy chairman and secretary general of the China Express Association, is feeling optimistic about the future of his industry.

“Operations volume in 2012 is expected to be over 5.5 billion units with an average of 20

52

Mark et sh

are o

f ma

jor p

layer

s

Annu

2007 Shentong 23% SF Express 17% Yuantong 17% EMS 17% Yunda Express 9% Zhongtong 7% Other domestic courier companies 7% Foreign courier companies 3%

million daily deliveries,” he told our reporter.

“The US boasts an annual 8 billion units in operations volume and China is set to overtake Japan’s 5 billion to become the world number two,” he added, displaying the fondness among Chinese officials and businesspeople for world rankings as growth indicators.

u

on vol

perati

rier o al cou

2008

2009

ieces)

llion p

it: bi me (un

2010

2011

2012

Source: China Express Association

By the end of 2012, there were a total of 8,000 registered companies and 900,000 employees working in China’s courier industry.

Market Share

Before the 1980s, all mail in China passed through the China Post Office, a State moNEWSCHINA I February 2013

nopoly. The Universal Postal Union granted China Post priority in air mail and customs checks worldwide, a perk that has extended its courier services to more than 200 countries. Since the early 1980s, foreign enterprises including DHL, UPS, FedEx and TNT were allowed into China to meet increasing demand for reliable international deliveries.

However, thanks to a series of favorable policies, China Post’s Express Mail Service (EMS) still dominated the domestic market and accounted for over 97 percent of the market share until the early 1990s, when the market started to open to the private sector. Private courier companies, relatively easy to establish and cheap to maintain, mushroomed in the 1990s, mostly in the economic hubs of Shanghai, Guangzhou, Shenzhen and Beijing.

Since 1995, EMS has lost its monopoly, along with an annual 4 percent decrease of its market share ever since. Today, EMS accounts for less than 20 percent of the total courier market, dropping to below 10 percent in major cities.

According to Da Wa, by 2012, six domestic Chinese courier companies were moving two million or more units daily, These “Big Six” are EMS, SF Express, Shentong, Yuantong, Zhongtong and Yunda. These six companies account for 80-90 percent of the courier business, with “over 5,000 out of the total 8,000 private express companies in China either [their] franchises or affiliated companies.”

Da Wa believes that the dominance of China’s Big Six couriers has stabilized this growing market. Now, however, the battle to determine the top dog has begun.

New Beats

EMS, a nominally private company affiliated to the State-owned China Postal Express & Logistics Co., Ltd, has cut high delivery prices and now offers home pick-up and drop-off services to consumers after years of complaints about inefficient and “arrogant” business practices. EMS used to price domestic deliveries at 20 yuan (US$3), which was steep compared to the 6-8 yuan (US$0.961.28) average fee in the private sector.

“E-commerce was not initially on EMS’s radar, but this potential market should not be NEWSCHINA I February 2013

ignored,” Da Wa told our reporter. EMS has been approved for public listing by the National Development and Reform Commission (NDRC), China’s top macroeconomic agency. EMS will likely be officially listed in 2013.

SF Express, one the leading private express company set up in 1993 and based in Shenzhen, has always enjoyed a good reputation among domestic consumers. Building on its domestic strength, the company began expanding its international operations in 2010.

SF Express currently maintains eight fullcargo air planes and has opened international service networks in Singapore, Malaysia, South Korea and Japan. Its US wing opened in September 2012. Similar initiatives have been tentatively launched by other courier companies. Driven by the e-commerce boom, leading online retailers including Taobao, Jingdong and VANCL have also entered the courier market.

However, international dominance could be a mere pipe dream for these upstart Chinese companies. While industry insiders believe that less-developed Southeast Asian markets such as Vietnam, the Philippines, Malaysia and India are a potential source of revenue, global omnipresence is likely to remain the preserve of the big multinationals, led by FedEx. Foreign companies are already snapping at the heels of the Big Six within China proper.

On September 6, after a three-year wait, FedEx obtained a license to handle domestic packages services in eight mainland Chinese cities, while UPS was issued licenses for five cities. According to Chinese pledges to the WTO, since the end of 2005, foreign express companies have technically been allowed to operate international express services through individual proprietorships within China.

However, as with many obligations, this one has yet to be fulfilled in its entirety. Despite foreign companies, including FedEx and UPS, maintaining Chinese operations for a decade, they have yet to be granted unrestricted access. Only the profitability of these foreign giants prevented them from becoming outcasts.

Despite a gradual loosening of restrictions on foreign operators within China, many feel the process is too slow, and prevents these

well-regarded international carriers becoming models for China’s domestic couriers.

“The introduction of world-standard companies into the domestic market is not a bad thing for Chinese companies,” said Da Wa. “It could stimulate the vitality of the domestic industry and speed up improvement in the private sector through competition.”

Evolution

Booming growth in China’s courier industry is fueled purely by demand. As the industry expands, more critics voice concerns over the lack of effective regulation of private operators. In 2010 and 2011, for example, domestic media revealed the less-than-careful treatment meted out to packages by some smaller courier firms keen to cut costs, with many unceremoniously dumped on the sidewalk outside their offices.

According to Zhou Huande, director of the Shanghai Research Institute operated by the China Postal Express & Logistics Co., Ltd., despite market growth, the quality and reliability of China’s courier services lags far behind their international competition.

“Generally speaking, the development of the courier industry cannot meet demand, particularly in e-commerce. The franchise model adopted by most domestic express companies allows the mother company to set up nationwide networks. However it remains virtually impossible to monitor and manage them,” Zhou told our reporter.

Zhu Hongzhi, a logistics specialist, told NewsChina that most private courier and freight companies in China are poorly regulated. “In order to gain more market share, they resort to price wars and malicious competition.”

Many have already predicted an escalation in courier turf wars which could lead to mergers and acquisitions, with the market only stabilizing over the course of the next decade.

In a 2011 interview with The Founder magazine, Wang Wei, CEO of SF Express said that “China’s courier industry will see two major trends. One is the intensification of labor, technology and capital in IT, transfer centers and airplane construction; the second is survival of the fittest. There will be only a few that can survive the process.” 

53

economy

Electric Cars

No Charge China’s program to leapfrog the hybrid and instead mass produce the world’s most affordable electric cars could already be out of gas

By Sun Zhe

L

icense plates issued by the Shanghai municipal government, auctioned off at the price of an average compact car, are ridiculed by locals as the world’s most expensive piece of metal.

However, there is a way motorists can escape this crippling charge – by going fully electric.

Beijing and Guangzhou are on the verge of following suit, allowing buyers of battery electric vehicles (BEVs) to bypass these cities’ unpopular license plate lotteries, a measure introduced to ease traffic congestion which gives would-be road users a monthly one-in-40 chance of getting behind the wheel of their own car. Needless to say, many have given up hope of ever owning a gas-powered car, and are searching for alternatives – meaning that there is a potentially vast untapped market for electric vehicles in these cities alone.

Wan Gang, minister of science and technology and a prominent advocate of BEVs, declared in 2009 that the “era of the electric car” would offer China’s car industry a potential “curve” upon which it could overtake developed economies. The State Council, China’s cabinet, declared the new-energy auto industry to be one of the country’s seven emerging pillar industries, along with IT, bio-tech and new materials.

Fat subsidies from both the local and central governments, distributed like candy to China’s indigenous automakers, provide further incentives to prioritize electricity over gasoline. China has pledged to put 500,000 units of plug-in hybrids and BEVs on the nation’s roads by the end of 2015, and 10 times that number by 2020, according to a State Council industry program released in April, 2012, which has no less an aim that to turn China into the world’s largest market for electric vehicles within a decade.

However, with three years to go until 2015, China is still 480,000 units away from meeting its first stated target, according to a report from Pingan Securities. Why does China’s domestic electric vehicle industry appear to have stalled?

Outside Track

In the past three decades since it opened its domestic auto market, China has been implementing a market share-for-technology strategy with the global auto industry, building joint ventures and developing domestic R&D. However, in terms of selling Chi-

EV AB

auto

Photo by by CFP

54

ned e-ow t a t S from

t an Ca SAI r e mak auto

hai ang h S w in sho

NEWSCHINA I February 2013

Photo by by CFP

nese-branded cars, this strategy has achieved plug-in hybrids in 2011 totaled only 8,000 mixed results, with domestic brands only able units. In the same period, 13.7 million brandto corner the low-end of the market, leaving new gasoline-powered private cars hit China’s Chinese automakers churning out cheap roads, a major embarrassment for champions compact cars while their foreign competitors of new energy vehicles. clean up in terms of desirability and overall “The difficulty of developing BEVs might sales. With foreign brands overwhelmingly have been underestimated,” said Wu Jin, favored over Chinese alternatives, internachief engineer with Chinese automaker Litional automakers are less and less inclined to fan. Lifan has already suspended its BEV share key technologies with Chinese manuR&D program due to shortage of funds. facturers, further thwarting the brand ambiA quick glance at the numbers explains tions of domestic companies. why individual consumers, the only market While hybrids are already familiar to road likely to guarantee sustainable profits, has users across the globe, an affordable, roadsnubbed the BEV. The two major electric worthy and practical electric car, despite becars sold on the China market – BYD’s E6 ing touted as the future of auto transport, and Roewe’s E50 – have price tags of 370,000 BYD E6 model debuts as a taxi in Shenzhen, remains in development hell. For a still-ma- The yuan (US$59,100) and 235,000 yuan Guangdong Province turing auto industry like China’s, this means (US$37,600) respectively. A modest foreignthe playing field is more equal, and the counbranded gasoline-powered car could be had try’s status as one of the world’s biggest producers of both electric for less, and without the inconvenience of scouring one’s home city motors and lithium batteries gives manufacturers an added edge in for a place to recharge it. terms of access to key technologies in the field of electrical automotive Despite massive subsidies, it seems, electric vehicles are a prohibitransport, according to a report by Pingan Securities. tively expensive and impractical novelty. Manufacturers have fallen In an attempt to break this pattern, the central government has back on government procurement and public transportation simply tilted its subsidy policy away from hybrid cars – an area already domi- to secure sufficient sales to justify their operations, which effectively nated by international brands - and toward BEVs, which have largely means the government pays itself to manufacture expensive, impractifailed to go mass-market anywhere in the world. Each BEV buyer cal vehicles for its own use – hardly a productive or sustainable busican theoretically receive up to 120,000 yuan (US$19,200) in cash ness model. subsidies from the central government and local governments in pilot “The slow progress with BEV technologies keeps production costs cities such as Shanghai, Beijing and Shenzhen, almost half the market high.” Chen Peng told NewsChina. “The government could offer subprice of their vehicle. Those opting for hybrids, by contrast, are only sidies to promote a mature BEV, but the maturity of domestic BEV offered 3,000 yuan (US$480) in subsidies, a reflection of the hybrid’s market will take a long time.” more mature market position.

By the end of 2011, more than 100 BEV models, manufactured by The Toyota Prius, the world’s bestselling hybrid which has sold 54 Chinese automakers, had received the government green light to more than 1 million units in the US alone, is reported to be 40 per- go into full-scale production. However, the results of road safety and cent more fuel-efficient than gasoline-powered cars. The best Chinese crash testing for almost all of them have never been published, further equivalent so far has only proven to be half as efficient as the Prius. tarnishing the image of the BEV as a legitimate alternative to gasoline.

According to a research report by Dongxing Securities, while this In late May 2012, a BYD E6 which was involved in a crash in shift towards fully electric vehicles has undermined the potential de- Shenzhen caught on fire due to a short within its battery pack. The velopment of a commercially viable, Chinese-designed hybrid, it has driver and two passengers burned to death, and even financial backing dramatically increased the possibility of a breakthrough in the field of from Warren Buffett couldn’t stop BYD’s share price dropping more the BEV. Chen Peng, an industry analyst with Dongxing, told our than 7 percent the day after the crash. Even before they have become reporter he was ready to give up on a Chinese hybrid. “The odds are a feature of China’s roads, electric cars are already being viewed with low that Chinese automakers could come up with a viable hybrid due suspicion. With few electric cars on the roads, there is little incentive to their technical weaknesses,” he said. for entrepreneurs or local governments to construct recharging stations, further limiting the utility of BEVs. Over-optimistic By the end of 2011, only 243 battery swap and recharge stations Despite generous policy, a favorable market position and a poten- had been built, with 13,283 recharge posts constructed nationwide, tially vast, untapped domestic market, China’s electric dream has yet hardly sufficient coverage for an area just slightly smaller than that of to spark.

Europe.

In early 2009, China’s central economic planning agencies pledges Until the electric car becomes a viable, affordable alternative to that BEVs and plug-in hybrids would account for five percent of total gasoline, supported by national-level infrastructure and rigorous safeauto sales in China by the end of 2011. According to the Ministry of ty standards, China’s admittedly pioneering work in this field could Industry and Information Technology, domestic sales of BEVs and eventually finds its batteries go flat. NEWSCHINA I February 2013

55

economy

Triple Play Program

Connection Failed A tug-of-war between industry regulators has hamstrung China’s plan to allow direct competition between its TV, Internet and telecoms heavyweights

By Sun Zhe

I

Photo by by CFP

n China’s rapidly-evolving tech industry, makers are gloomy,” said Zhao Xufeng, anano one is safe from sudden changes in lyst with industry consulting iResearch, “as the law – a market-beating innovation they are banned for generating content. and can become illegal overnight, often resulting hardware sales barely make any profit.” in grievous financial losses. The makers of However, set-top box makers like Xiaomi the Xiaomi Box, an Internet TV set-top box, are not the only ones under pressure. Internet found this out the hard way.

Protocol Television (IPTV), a service offered Similar to Apple TV, the Xiaomi Box is by telecom giant China Telecom that delivbuilt to stream video from the Internet, as ers on-demand TV through a broadband Inwell as games and music. Only 10 days afternet connection, must also stream content ter its launch in mid-November, Xiaomi from SARFT-licensed consolidators.

Box suspended all content services after it So far, only seven companies, all of them was placed under investigation by the State from the broadcasting sector under the ausbroadcasting regulator for streaming Internet pices of SARFT, have been licensed for convideo, according to a report by online news tent provision for set-top boxes. And in terms portal Sina. of content censorship, the licensees answer Xiaomi, known for its high-spec budget directly to SARFT. smartphones, claimed on its official microblog that the suspension was due to mainRegulation Tug-of-War tenance. Few were convinced – over the The development of IPTV is part of a past few years, the State Administration “triple play” program, a three-way conof Radio, Film, and Television (SARFT), vergence that allows telecom carriers, the country’s regulator of broadcasters television broadcasters and Internet and cable companies, has banned firms to enter each other’s turf. more than 10 similar set-top The program had been under boxes. discussion for more than a In addition to prodecade before the State grams from Wasu, a Council, China’s cabiState-owned content net, unveiled a timeconsolidator licensed table in early 2010 to complete the program

by SARFT to ofbefore 2015. However, fer content to set-top Company CEO Lei Jun seated on his brainchild, the Xiaomi Box the program’s progress has boxes, Xiaomi Box had been less than encouraging. also merged with internet Little advancement was made video portals Sohu, Tencent and PPTV, but streaming Internet content to set- their content exclusively from SARFT-li- due to a conflict of interest between SARFT top boxes was strictly banned. censed consolidators, and prohibited Inter- and China’s telecoms regulator the Ministry In a statement released late 2011, SARFT net videos from being streamed on television. of Industrial and Information Technology ordered all set-top box producers to derive “The profiting prospects of the set-top box (MIIT), argued Xie Wen, an industry ana-

56

NEWSCHINA I February 2013

NEWSCHINA I February 2013

enough to ward off the telecom giants. Tian Jin, deputy director of SARFT, said at an industry forum in early 2011 that it was vital for China’s triple play plan to put the broadcast regulator in charge of content supervision for IPTV and mobile TV, so as to ensure the country’s cultural and information security.

Similar to SARFT’s licensing power, the MIIT also has a trick or two up its sleeve. The telecom giants can charge the cable companies data fees for their Internet service, as the former are the gatekeepers of the country’s access to the worldwide web.

However, at present, the major obstruction to broadcasters and cable companies providing telecommunications and Internet services lies in their shortage of a national network to compete with the telecoms camp, given that the country’s fragmented cable TV network consists of more than 100 independent regional cable operators that answer to local governments.

Merging all these cable operators and building a telecommunications backbone would incur heavy costs in both time and money. The total investment is estimated to total $42.3 billion to cover the country’s current cable TV subscriber population of 164 million, according to a report by iSuppli, an industry consultancy.

Though pilot projects have been in progress since 2010, it is highly unlikely that the triple play program could be completed by 2015, according to Xie Wen, the Caixin columnist.

Luckily for netizens, it is not necessary to

wait until the far-off completion of the State’s triple play program: small-brand set-top boxes, most of them able to stream Internet video and countless pirated movies, retail for 300 yuan (US$48) on Taobao, the country’s largest e-commerce portal.

None of these brands has held a conspicuous launch event as Xiaomi Box, abiding by a rule of thumb in China’s business world – the best money is to be made by flying under the radar.

“The regulation always starts with big market players, while the countless small-time producers are immensely hard to supervise,” said Zhang Fan, an industry analyst with Analysys International.

Zhang expects that the Xiaomi Box will be remarketed after it purges its Internet content. However, the censored, sanitized Xiaomi Box will likely have a tough time pulling in an audience.

Photo by by CFP

lyst, in his column in Caixin magazine.

According to the State program, broadcasters would be allowed to offer telecommunications and Internet services. In return, telecom companies would be allowed to produce and transmit radio and television programming.

Envisioned as a way of bringing more competition into both industries, the triple play program was meant to benefit TV viewers as well as web users, since China’s Internet is currently among both the slowest and most expensive in the world. Plus, it was reasoned that given dwindling TV audience numbers, the program would offer broadcasters an opportunity to find a new business model.

However, the program did not quite roll out as smoothly as planned. The telecom carriers, though allowed to participate in radio and television program transmission, still found themselves slapped with a SARFT ban from generating content.

MIIT is backing the three State-owned telecom monopolists under its regulation (China Mobile, China Unicom and China Telecom) to make their respective forays into the IPTV, mobile TV and the Internet TV sectors, while at the same time endeavoring to keep cable companies and broadcasters off its own telecom turf, according to a report by Deloitte.

For its part, SARFT is trying to build a national cable company to compete with MIIT’s telecom giants on the provision of telecommunication and Internet services, while simultaneously blocking the telecom companies’ entry into television by cracking down on their content and licensing.

SARFT seems to have found reason

57

economy

Trade Disputes

Come Out Swinging Chinese exporters are learning to use international trade rules to defend their market power

By Li Jia

T

hese are dark days for manufacturers. The world’s consumers no longer have the deep pockets they used to, and governments are on constant alert against challenges from foreign products.

In order to survive, producers are having to fight more vigorously than ever, with a dualpronged attack of business and rules.

While they remain as skilful as ever in the former, Chinese companies are now making headway in the latter, though the battle has been long and bloody.

On November 19, the European Court of Justice upheld an appeal by AoKang, one of the largest privately-owned Chinese shoemakers, listed in Shanghai, against the European General Court’s decision on antidumping duties imposed by the European Commission (EC). The Council of the European Union was ordered to repay AoKang’s legal costs, and the EC had to refund anti-

58

dumping tariffs collected from European importers over the past few years. The final ruling applied to “imports of certain footwear with uppers of leather originating in the People’s Republic of China and Vietnam,” according to the court’s assessment.

Typically, Chinese companies keep silent or give up before the final battle in trade disputes initiated by foreign competitors. Shen Danyang, spokesman for China’s Ministry of Commerce, stated at a recent press conference that AoKang’s victory had “boosted the confidence of Chinese companies in protecting their interests through legal action.”

Wang Zhentao, chairman of the company, also told media that the keyword when dealing with trade disputes was just that: “confidence.”

When considered alongside commercial interests on the ground, confidence is not so simple.

Small Slice, Big Deal

The value of China-made products involved in trade disputes filed by foreign parties is in the tens of billions of dollars a year at most, according to data from China’s Ministry of Commerce. This is almost negligible for the world’s largest exporter, which turns over several trillion dollars ever year. However, it has been proven to have the potential to damage the Chinese industries it affects, sometimes heavily.

At the end of 2004, the EU’s 14-year quota on shoes from China expired, according to the WTO commitment. But before Chinese shoe exporters could breathe a sigh of relief, the EU launched its anti-dumping investigations in 2005, and at least 1,200 Chinese shoemakers were immediately exposed to the harsh duties that came into effect in 2006.

The 16.5 percent tariff was nearly 10 percent higher than the average export profit marNEWSCHINA I February 2013

Photo by AoKang Shoes Co., Ltd.

Workers at an AoKang factory producing shoes for export to Europe, Zhejiang, 2007

gin at the time. It was widely reported that China’s shoe exports to the EU dropped by 20 percent the month after the duty was implemented. Behind that, Wang said, were hundreds of thousands of lost Chinese jobs, and the shattered global ambitions of Chinese exporters who had waited so long for the duty to expire.

Non-tariff trade measures (typically heightened technical standards) adopted by the US, the EU, and Japan since the mid-1990s have brought the metal cigarette lighter manufacturing business, a booming sector just over a decade ago, “to the brink of paralysis,” according to Huang Fajing, director of the metal lighter guild in Wenzhou, Zhejiang Province.

The EU and US lighter markets, which used to be dominated by Chinese products, are no longer the primary destination for Wenzhou’s lighters. Huang’s company is investing hugely in equipment and talent to meet the NEWSCHINA I February 2013

“Even if we lost the case in the end, we still would have won in a way.”

new Japanese standards, he told NewsChina, lamenting the colossal difficulty involved in winning a market, and how easy it is to lose one nearly overnight.

Currently, Chinese bicycle companies are awaiting a decision on the anti-dumping tariffs imposed on them by Brazilian regulators.

This uncertainty, according to Song Bo with the China Bicycle Association, has already incurred a huge opportunity cost for the Chinese companies, as it has put the brakes on their expansion plans.

The latest report in June by Global Trade Alert, a London-based independent trademonitoring institute, states that “40 percent

of all protectionist measures implemented since November 2008 have included China as one of the harmed trading parties.” These include nearly every kind of tariff and nontariff measure imaginable.

Besides commercial interests, Chinese exporters have had to factor in the humiliation that has come with constant trade disputes.

Wang said during an interview on State broadcaster CCTV that Chinese companies respected their European counterparts “like a grandson respects his grandfather,” and were eager to learn from them. “But they are still unhappy with us,” he said. Unfair treatment is perhaps the most common complaint from the Chinese side of a trade dispute.

Given the tough economic situation worldwide, trade disputes involving Chinese products are likely to become more common. Several senior officials at China’s Ministry of Commerce have warned recently

59

Photo by Peter PARKS /AFP

economy

Piles of unsold Christmas goods are displayed at a large wholesale market in the southern Chinese city of Shenzhen, November 29, 2011. Many companies in Guangdong Province reported fewer orders for decorations, toys and electronics from crisis-hit Europe and the United States

that trade disputes could pose a big threat to China’s exports. Based partly on this concern, the ministry has already scaled down the country’s foreign trade goal, now aiming to retain China’s current share of the global market, rather than pushing for the 10 percent growth rate set previously.

Chinese exporters are backed into a corner, and now have every reason to come out swinging in international trade disputes. The most convincing reason for doing so is that it appears to work.

To the Victor, the Spoils

The EU anti-dumping tariffs were annulled in April 2011, meaning that even without the final ruling, China’s shoe exporters had suffered no subsequent losses.

Without effective legal challenges against the administrative measures, explained Pu Lingchen, partner at the Beijing-based Zhong Lun Law Firm that represented the victorious Chinese shoemaker, the often erroneously-applied legal articles used to defeat Chinese companies will be taken as precedent in future cases. This could encourage other

60

foreign markets to follow suit, attacking Chinese products without fear of retaliation.

These lessons should have already been learned. The US was the first to increase its safety standards on lighters. Unsure what to do, Chinese producers withdrew from the US market. When the EU used the same tactic, Huang realized that something had to be done, although few in the industry joined him. “If you always retreat, where in the world will you find your market in the future?” he said.

His team succeeded in fending off the antidumping tariffs, and securing amendment of the new EU regulations, ensuring that they are now based solely on safety and quality standards. This, Huang said, is more consistent with WTO rules and fair to Chinese manufacturers than the previous price-based standards.

In October, the US placed roughly 20 to 30 percent tariffs on Chinese solar panel exporters who provided evidence to defend themselves, compared to nearly 250 percent on those who did not. This trend is an important reason why for years the Chinese

government and media have called on domestic companies to speak out in international trade disputes.

“Even if we lost the case in the end, we still would have won in a way,” said Wang, of AoKang. Six years ago, AoKang barely understood what anti-dumping was – now, they’re flush with experience, and have at their disposal a professional team specializing in world trade law. He also believes that the legal action, even if it had failed, won the respect and trust of their foreign partners and competitors. “It’s an issue of dignity… you can be beaten to death, but don’t ever be scared to death,” he said.

Despite Wang’s rousing endorsement of the value of choosing to fight, it was a tough, costly decision, and one that not everyone is willing or can afford to take.

Hard Game

In 2005, when the tariff was announced, hundreds of Chinese shoemakers signed various joint statements – including one led by AoKang on behalf of more than 300 companies – expressing their determination to fight against what they called the EU’s unfair treatment. By the time it came to the EC investigation, 160 companies remained.

After the tariff was imposed, five companies brought the case to the General Court. AoKang found itself going it alone towards the last resort: the European Court of Justice, according to Wang.

“I would have made the same decision if I were them,” he added. One reason was that among the companies that had signed up to the statement, his partners did not export as much as he did to the EU at the time. Also, the companies taking action would have to bear the monetary and time costs no matter the result. These realistic calculations prevail among Chinese companies in most trade dispute cases.

It took Wang 15 minutes to decide to take the case to the court, a few days to decide to appeal after losing in the first instance, and six years to achieve a favorable result. Still, it will take time to implement the ruling. The company spent roughly US$650,000 on the case, the majority of which went to lawyers who “got paid on an hourly basis, even while they slept on airplanes on business trips,” said Wang.

NEWSCHINA I February 2013

NEWSCHINA I February 2013

china

bynumbers US$3.7tn Outstanding local currency (LCY) bonds in China at the end of September 2012, an increase of 10.8% over the same period in 2011. Government bonds grew by 7.9% YOY, while corporate bonds grew by 20.2% YOY. Issuers of the US$2711bn government bonds

Top five issuers of the US$943bn corporate bonds Ministry of Railways $110.9bn

Treasury $1259bn 46%

State Grid Corporation of China $52bn

Central bank $241bn 9%

China National Petroleum $49.3bn

Policy bank bond $1210bn 45%

ICBC $36.6bn Bank of China $31.3bn

Source: Asian Development Bank

0

US$2.3bn

20

40

60

80

100

120

55.8%

The amount of six-month-plus defaults on credit card payments at the end of Q3, 2012, US$186 million more than at the end of Q2. The default ratio stood at 1.4%, slightly lower than the 1.5% recorded at the end of June.

Increase in the balance of China’s foreign currency deposits in the first 11 months of 2012, a total of US$415.7bn. This is 4.3 times greater than the 13% rise from January to November 2011 and the fastest rate of increase since 2007.

Source: People’s Bank of China

Source: People’s Bank of China

US$21bn

Source: General Administration of Customs

30

15 10

012

20

2/2

25

201 12/ 1 2 1/2 011 012

The value of China’s textile and apparel exports in November 2011, the lowest recorded rate in 12 months. This sector is the main source of China’s foreign trade surplus.

3/2 0 4/2 12 012 5/2 01 6/2 2 01 7/22 01 8/2 2 01 9/2 2 0 10/ 12 201 2 11/ 201 2

Value of China’s textile and apparel exports, US$bn

11/

A bigger question is whether or not the market in question is even worth fighting for.

Having suffered under 19 years of anti-dumping tariffs, Chinese mainland bicycles only hold a three percent market share in the EU. The dwindling commercial stakes involved and the long fruitless effort of protesting the measures have led to “little interest and confidence from our members in continuing the fight against what we believe to be unreasonable treatment, even if it will not cost them much,” said Song Bo with the China Bicycle Association.

In its WTO commitment, China agreed not to be recognized as a market economy.

This gives its competitors a head start in trade disputes – the EU has launched two new investigations into bicycles from China partly on the grounds that the Chinese government controls the steel industry. The onus is on Chinese bicycle manufacturers to prove that they buy their steel parts at market prices.

However – the law has the final say. Lawyers play the key role in “playing this game of chess, the rules of which are very different from China’s,” said Pu, the lawyer. However, the short supply of Chinese lawyers specialized in world trade disputes gives Chinese companies even less incentive to fight. Relying on foreign lawyers could be more expensive, and less convenient. Pu, who worked with international law firms in Europe for 18 years, thinks all these problems are largely due to language barriers.

In addition, private connections are trusted more than the legal system in Chinese society, despite the extra time and material costs such a system involves, said Pu. Fairness of court process is routinely criticized in China. Moreover, for years, many saw lawyers as bad guys who defended other bad buys – a prejudice that still exists, albeit to a lesser extent. This helps explain why some bosses sign contracts without consulting lawyers, Pu said – they trust their own business expertise over the opinions of legal professionals.

In today’s chilly global market, no-one in the game can afford inaction or compromise.

This presents a good chance for Chinese exporters, who now have the incentive and the confidence to prove they are smart, fair players who deserve to be loved by consumers and feared by competitors.

5 0

50.9

HSBC China PMI

The HSBC China Purchasing Managers’ Index, a composite indicator for manufacturing growth, in December 2012 – a 14-month high

60

Source: HSBC

40

50

10/2011 11/2011 12/2011 1/2012 2/2012 3/2012 4/2012 5/2012 6/2012 7/2012 8/2012 9/2012 10/2012 11/2012 12/2012

61

culture

I

Renaissance Foundation

An Alternative Revival On their mission to promote independent artistic culture across Greater China, the Renaissance Foundation has enlisted an all-star team of Chinese alternative cultural figures. Can they bring the underground back to life?

Anthony Wong

62

Photo by CFP

By Wang Chen in Hong Kong

t isn’t often that a group of volunteers steal the show at an event attended by thousands – but the Renaissance Foundation doesn’t recruit ordinary volunteers.

For its Renaissance 2012 Music Festival in the West Kowloon Cultural District in Hong Kong, this fledgling NGO pulled out the big guns.

Among their ranks are China’s favorite writer-spokesmodel-rally-driver Han Han, multiple award-winning independent director Jia Zhangke, veteran Taiwanese lyricist Yao Qian and Shu Kei, dean of film and television studies at the Hong Kong Academy for Performing Arts, to name just a few.

Their leader, and likely the busiest of the group, is alternative singer, composer and music producer Anthony Wong – a muchloved Hong Kong performer who has consistently bridged the gap between the independent and mainstream music industries in the region.

On the evening of November 24, 2012, Wong closed out the festival, which, for the first time, brought together alternative and independent musicians from the mainland, Hong Kong and Taiwan in an all-star showcase. And in stark contrast to Hong Kong’s overtly commercialized and often prohibitively expensive entertainment world, the festival was free of charge.

Wong, the festival’s organizer, is the founding president of the Renaissance Foundation, an NGO founded by a group of leading figures in Chinese art and literature. “All those involved believe that art and literature are very important, or even the most important things,” said Anthony Wong.

A successful alternative singer who made his name in the 1980s, Wong is one of the few in Hong Kong’s pop music scene best known for his attempts to push back musical frontiers.

The foundation was formally established on September 29, and put on its first largescale event, the free music festival, just two months later. Without pausing for breath, the group held a film festival from November 25 to December 16, screening arthouse and independent movies from across Greater China. A series of funding schemes for 2013 were also unveiled.

Clearly, Wong and his star-studded staff NEWSCHINA I February 2013

singers but also local alternative and experimental musicians and groups like At17 and PixelToy. However, promoting independent music and culture wasn’t easy.

Zhang Tie-zhi, a famous Taiwanese music critic and adviser to the Renaissance Foundation, said that the space for independent creativity has been suppressed by strong commercial interests over the last decade. “A good musician could hardly make Right Place, Right Time any money, unless they Wong has attained widespread popularity in Hong signed with a major reKong, Taiwan and the mainland, yet his style is distinctly cord company, which different from the rest of the heavily-sanitized pop indusare only interested the try. When Wong was a radio DJ 37 years ago, another market. Commercial young composer and guitarist Tats Lau advertised in a temptations have serimusic magazine looking for a singer. Wong went for an ously affected independent creativity,” he said. audition, and the two formed a group: the Tat Ming Pair. From left to right on the stage of the Renaissance 2012 Music For Wong, indepenWith elements of western music styles like new Festival: Anthony Wong, mainland rock artist Zuoxiao Zuzhou dent music and culture wave and post-punk, their music clashed heavily and Taiwanese singer-songwriter Sandee Chan become even more imwith the Hong Kong pop scene, and Wong’s long hair and glam-rock style makeup made the duo’s statement even bold- portant under such conditions. “Independent artists are pioneers. er. However, their music was also catchy, with thoughtful, poetic lyrics They walk faster than others. They often impact the mainstream and that earned them significant market recognition. They soon became push forward,” said Wong. He remains optimistic about his efforts: “I think that there is fertile soil for avant-garde and experimental culture one of the biggest groups in Hong Kong.

The group’s songs touched a wide range of social issues such as ho- everywhere. Hong Kong has this soil, with its strong social order and mosexuality, nuclear power plants, emigration and AIDS. “Music can openness,” he said.

The Renaissance Foundation aims to build a platform for combe cloistered. But it can also record changes in society. I think the latter is very important. That’s why I chose to devote myself to music,” munication between independent artists from the mainland, Hong said Wong. Meanwhile, he also noted that the “openness” of the time Kong, Taiwan and Macau. Wong’s pursuit of independent culture, had contributed largely to the group’s success. and his popularity in all four markets, make him the perfect frontman Hong Kong’s economy took off in the 1960s, and by the 1980s, for the organization. it had become one of the most developed areas in the world. “People “In Hong Kong, there are few singers like Wong who have survived became richer, and they wanted more choice,” said Wong. Also, as in the independent and mainstream scenes, without being swallowed a former British colony, Hong Kong was exposed to heavy cultural by the latter,” said Liang Dong. “The foundation needs people like influences from the West. Besides the Tat Ming Pair, there were also Anthony Wong and Han Han,” said Zhang Tie-zhi. “They have reseveral other alternative bands and groups, introducing elements of mained independent, yet are influential in the market.” rock, rap and electronic music to Hong Kong listeners.

However, it has been suggested that this group of singers, writers, In 1991, Tats Ming Pair disbanded due to musical differences, directors and critics might be too idealistic to run the foundation alongside various other reasons. Meanwhile, the space for indepen- practically and effectively. Wong responded to the doubt by affirming dent music in Hong Kong was also shrinking quickly. “The media his endeavor: “We do not just provide sponsorship for independent talked mainly about the economy, GDP, entertainment and gossip. creators. More importantly, we cooperate with them closely and give There were few people who cared about art and independent mu- them professional and artistic direction,” he said. Over his decades sic,” said Liang Dong, spokesperson for the Renaissance Foundation. of experience in the independent scene, Wong has found that inde“Since then, not a single music magazine has survived in Hong Kong.” pendent artists often have the desire to create, but lack powers of execution. The foundation aims to “provide independent creators with Bridging the Gap direction, and an atmosphere for creation.”

Yet Wong’s solo career went pretty well. In the mid-1990s, plenty As the foundation has just been established, Wong has much to of his songs hit the top on Hong Kong’s pop charts, and he received ascertain before moving forward. “There are too many things to think many prestigious music awards. about. What kind of music should we give the audience? How can we Wong still persisted with his pursuit of independent music. In 1999, support independent creators? Yet one thing is for sure: independent he founded the music production company People Mountain People Sea. work will make waves in the mainstream, while itself continuing to The company not only produced and released albums for high-profile pop move ahead.” Photo by CFP

have been working nonstop, with a firm belief that independent Chinese culture has the strength to survive. “It’s an attempt at self-rescue by independent intellectuals and artists,” said Wong, 50.

“Suppose we don’t need literature and art. We don’t have discussions. We don’t read books – only comics. All lyrics talk about is love, and we don’t have spiritual enjoyment or think on a more abstract level. Will we be happy?” he asked. “If we only work to make money, and then we spend our money, we are no different from machines.”

NEWSCHINA I February 2013

63

OUTSIDEIN perspectives from within China

Labrang Monastery

Mingling with

the Buddha

Searching for a cosmic experience in mysterious Xiahe led this explorer to different, more humanistic conclusions

By Sean Silbert

“

Do you want something authentic, or just something memorable?” the gaunt Australian woman challenged. “Nothing here is real. Those prayer wheels are made in Nepal, same as the jewelry. The tapestries are probably made elsewhere in China. If you want something genuine, you’re going to pay top dollar for it.”

I popped my head outside, looking for arguments to the contrary. The line of shops outside the temple sold a good selection of the thick robes the monks wore. Store after store modestly promoted their wares with no touts or gaudy signs. Most only had one or two staff behind a desk to mind the slowly meandering trickle of disheveled pilgrims and natty tourists walking in off the dusty road.

The Australian lady, despite her acid tongue, was proven right – the real treasures were inside the walls of Xiahe’s magnificent Labrang monastery.

The sprawl of modern Xiahe simply and suddenly ends. After passing through the Tibetan residential district the temple simply began, without any grand gatehouse or even a poky ticket office. I had read plenty about Labrang Monastery’s high position in the institutional hierarchy of the popular Yellow Hat sect of Lamaism. Monks paced behind every

64

doorway, loitered around every corner and occupied every desk. Monks led tour groups, operated ticket counters and souvenir stands and, of course, minded prayer halls.

These men, or at least their forebears, produced reams of handwritten sutras by candlelight and traveled around by the cartload whenever a religious festival was in the offing.

Presumably it was these monks’ predecessors that took up arms when this region’s temples commanded their own armies.

Holy rollers

Lacking a map of my environment, I blundered into a college of theology, with lecture halls and rows of cells for individual study surrounding a vast courtyard. A monk brandishing a broom for maintaining the paving stones, wordlessly signaled to me that I was not welcome. I saw my error on a map acquired later on: the monastery expanded into a labyrinthine compound of squat, whitewashed educational facilities, prayer rooms, museums and dormitories that dominated the northern part of the city. There were plenty of wrong turns to make.

A long corridor flanked by tall, colorful and ancient-looking prayer wheels marked the boundary between residential and sacred

areas. Pilgrims spin the entire row of wheels by shifting their hands from base to base, moving in a clockwise circumnavigation of the entire temple complex. Inside this loop, a series of alleys and boulevards echo with the footsteps of robed monks and elderly pilgrims as well as the sonorous rumbling of the wheels.

Walking around a monument is common.

An elderly woman moved without resting, her face fixed with an expression of absolute solemnity. I had no idea how many laps of the complex she had completed. I merely moved behind her, keeping the wheels spinning as the shadows crept in from the outside, before I struck out on my own into the inner sanctum.

Hall of Treasures

The drab, white plaza at the north side of the complex went on far further than it seemed to at first glance, overshadowed as it was by the entrance to the sutra pavilion. The green arched roofs of the three-tiered pavilion’s gables, pierced by single gilded spikes, were visible right across the length and breadth of the complex. Each level was decorated with a decorative tapestry, resplendent in the ochers, azures and emeralds of the gorgeous statuary which characterizes Tibetan religious art.

Almost immediately after passing through NEWSCHINA I February 2013

Getting There

Xiahe town is easily reached in a few hours by public bus or hire car from the provincial capital Lanzhou.

Southwest Gansu is predominantly Tibetan, so expect communication challenges. Spoken Mandarin is widely understood, though it’s worthwhile to get all destinations written out in Chinese characters for use in emergencies.

Places to stay

the huge wooden doors and emerging into the smaller courtyard behind the building, a crimson throng of monks rushed out. Robe after saffron robe moved reverently into one side chamber. I lurked by the door and watched them prepare butter tea in a huge copper vat requiring two or three monks to lift it. Dozens more shaven-headed monks of indeterminate age and ethnicity appeared outside, removing their fur-lined boots though retaining their striking yellow ceremonial hats oddly similar to bishops’ miters. It was time to eat.

Visitors were confined to the sidelines, watching the cohort rest on rows of cushions before eating a simple meal. One monk approached me, his youthful face peppered with stubble, attempting to practice his English. Despite never having traveled abroad, he spoke with a strong American accent and a remarkable degree of fluency which highlighted the monastery’s dual role as a seat of learning.

He told me how he was also taking classes in philosophy, traditional Tibetan medicine and NEWSCHINA I February 2013

Photo by Sean Silbert

Xiahe’s been noticed by the growing Chinese tourist trail, and boasts a varied array of lodging. Everything from bunk-bed pilgrim holes to deluxe five-star hotels is available, though make sure you book in advance to guarantee a bed.

One popular Englishspeaking option is the Tara Guesthouse, whose multistory complex increases in comfort (and price) as you move upstairs. Beds start at 40 yuan (US$6) per night – though prices can double during religious and national holidays.

astrology, as well as Tibetan studies, for which Labrang is famous.

The two of us exchanged pleasantries about our surroundings. He asked the same list of pointed questions typically directed at foreigners in China; our age, how we got here, what we like about the area.

Before becoming overwhelmed, I remembered reading about the debates held at Labrang, where the Buddha was discussed in lively moonlight forums. I asked if I might come and watch. No problem, said my new friend.

Play and Pray

We progressed through a tangle of alley-

ways, turning corners and passing unmarked doorways that would make it near impossible

65

Preyer wheels outside the Labrang Monstery

Photo by by Sean silbert

to find our way a second time. As we passed one corner, I heard giggling, yelling, hooting.

A gaggle of young red-robed youths were kicking a ball around, but when they saw my white face, and my camera, they scattered, a few stragglers peeping out from behind a tapestrydraped door.

The paved debate plaza was shaded by sweeping eaves, with the shade of twisted birch trees providing shelter for venerable lamas to nod sagely along to debates beneath their swept-back yellow headdresses.

One elder sat silently under a tree surrounded by clusters of junior monks. Others approached him with one hand extended – one rule of these theological debates is that a point is only conclusively made with a vigorous clap of the hands. With the area slowly filling up with monks of all ages, the entire garden erupted in firecracker-like pops and snaps as the debate got going. I stayed silent, and held back spontaneous applause.

From my hiding place, I caught sight of one diminutive monklet bolting from the entrance towards a group of his peers. I followed his progress with my eyes as he made a bold leap, soaring through the air in a crimson ripple, before landing on the back of an older student monk. Soon both were rolling together in the grass, laughing. Then they caught sight of the gawking foreigner,

Photo by by Sean Silbert

travel

Monks gather for a daily discussion of scripture

and fell silent. One teenaged member of the circle beckoned me over. I obliged – feeling like an unmasked peeping Tom. However, he merely handed over a small sack the size of his closed fist and pointed to his mouth.

“Eat.” I poured out a handful of ground, toasted barley and, fearing a rebuke, tossed it into my open mouth. It was like smoky dust – I coughed up a cloud of malty particles to a chorus of laughter.

That was the olive branch – now I was fair game to be prodded, pinched and poked. I played along as best I could, practicing my “debate clap.” One youth approached me, asking about my home, my job, and standard introductions while the others twittered in Tibetan. It was a conversation cut short – time to pray – and my newfound companions gathered in a circle around a crinkle-faced monk seated on a rough-hewn stool. From within the folds of his skin, the same color and texture as his robes, emerged a low, unearthly rumbling, a deep, sonorous rhythmic chant which was responded to in kind by the assembled congregation.

I took this as my signal to leave. Retracing my path along the outlying walls of the garden to avoid disturbing the prayer meeting, I turned back only once, to snap a final still of this serene tableau.

Nobody noticed me leave.

real chinese

nì

Nixi Counter-attack

As China’s much-discussed online community of social rejects, or diao si, continue in their struggle to find girlfriends, the term nixi has become popular. The word is a call to arms – the desperate losers are encouraging each other to fight back.

With ni meaning “counter” and xi meaning “attack,” nixi originated from the world of online gaming, referring to when game admins program AIs to launch attacks on human players, rather than standing in fixed positions.

66

But it wasn’t long before the term began to appear offline. Often, the word is used by the media to describe how a person or group struggled through adversity, or how a loser made a successful comeback.

However, it wasn’t until China’s young men were divided into the diao si and their natural enemies the gao fu shuai (literally “tall, rich and handsome”) that nixi went nationwide, with many self-described diao si flocking to sign up to what they called “diao

xí

si nixi” campaigns. This brave attempt to fight back listed the typical merits of a diao si (loyalty, honesty, diligent), and gave pointers on bagging a bai fu mei (“fair, rich and beautiful” – the female equivalent of a gao fu shuai).

The protagonist of a recent diaosi nixi story inspired the entire community: a driver working for a billionaire in Zhejiang Province married his boss’s widow, whose inheritance was valued at 1.9 billion yuan (US$280m).

NEWSCHINA I February 2013

flavor of the month

Oh la la!

By Stephy Chung

NEWSCHINA I February 2013

assembly of the next appetizer, crab salad. He’s soft-spoken but meticulous, and after 5 years in Beijing is able to confidently direct his staff in both Chinese and English. Just how he landed in Beijing, and got to this very point, was a convoluted process familiar to the city’s diverse foreign population. “Well, I missed the naval academy nomination. I had a year to blow and so I went to a small cooking school in Napa. And I never turned back.”

Our bellies were thankful he didn’t. The crab salad was executed with West Coast flair – slices of avocado hugging fresh Canadian Dungeness crabmeat. Tossed with a milky celery rémoulade and sat on a fine layer of seaweed-enriched green apple jelly, the crab salad struck a pleasing balance between creaminess and acidity, enriched with a lemongrass and caraway emulsion. A lone rye crouton, wisp-thin, was appreciated both aesthetically and for adding a distinctive crunch to the dish’s smoothness.

Farm-raised Australian venison was served as the entree. The graincrusted loin yielded a subtle, mild flavor, and was marinated with milk, juniper, cloves, orange zest and black pepper, topped with a rich sliver of roasted foie gras. Perfectly grilled veggies and a lick of light, chestnut purée whimsically skipped across the plate. I became majorly obsessed with the garlicky, slightly bitter Brussels sprouts that rounded the dish.

If the basket of fresh, citrusy madeleines and a finger tray of nutty macaroons were to be any indication, dessert was going to be decadent.

Our server, the same one that urged us to eat the madeleines while still warm from the oven, was adorably flushed with pride as he brought out a regal duo of fruit and chocolate.

Dessert was a visual triumph, almost too good to eat. I felt spoiled.

The chocolate fondant was perfectly baked – crisp on top, and deliciously moist on the inside. As I dug in, a hot, sweet caramel core oozed out, a flourish of berry sauce was the only line of defense between me and this luscious eruption of caramel. Then it was on to a wonderfully tangy and chilly compliment – a dome of blueberry and white chocolate vacherin.

Woozy from all the food, we worked some of our indulgence off with a one-minute toddle to the bar. That’s when we discovered that Reimer’s penchant for flavor pairings extends to his latest drink creations like raspberry infused Pisco, and bourbon infused with figs and cinnamon. The real treat-Hendricks Gin infused with Earl Grey teawas the perfect end to a delicious meal.

We barely felt the cold on the journey home. Photo by Stephy Chung

E

xecutive Chef Brian Reimer rides a scooter to work. His daily commute transports him from his home in Wangfujing, one of Beijing’s busiest and newest shopping districts, past Tian’an’men Square, and into a quiet, former colonial district, on the edge of the capital’s former Legation Quarter.

In a city not known for its preservation, the very fact that much of this foreign-built district exists within the city walls is remarkable, and not lost on Reimer. A self-styled history buff, the former California native delights in ticking off old sites along the area’s tree-lined boulevards, such as a stunning former bank and a repurposed post office, linking each relic to its founder nation as he goes.

“It’s a unique area,” Reimer gushes.

“The British were just north of us, the Dutch were next door and the French, Japanese, and Russians were just two blocks down.”

It is somewhat fitting then, that Reimer should showcase his culinary talents in the former American Legation. This immense neo-classical building, dating from 1903, has borne witness to some of the most prominent moments in Sino-US relations. In 1971, Chinese Premier Zhou Enlai and Henry Kissinger met in secret in the room adjacent to today’s main dining hall.

Maison Boulud, the offshoot of celebrity restaurateur Daniel Boulud’s New York City empire, opened in 2008, offering Beijing residents fine French dining in the old style. Reimer has led the Maison Boulud team from the very start, incorporating more contemporary flourishes into classic menus and developing dishes that cater to evolving Chinese palates.

In the depths of winter, the restaurant comes into its own. Soft atmospheric lighting, elegant white décor and vaulted ceilings, create a hushed coziness. “Our menu is seasonally driven,” explains Reimer.

“It’s hard to sit down to a squash soup in Singapore, but in Beijing, we really feel all the seasons.”

And so, with the harsh wintry winds barreling down outside, we gladly sunk into plush seats and tucked into the first appetizer, the aforementioned butternut squash soup, delightfully thick and velvety.

Bursting with flavors, one sip instantly summons an image of a snug blanket and a crackling fire. Dabs of cranberry coulis alternate with several floating peaks of cinnamon meringue. The tartness of the cranberry and saltiness of smoked lardons bits enhanced the meringue’s marshmallow-like goodness.

Reimer runs a tight ship in the kitchen, which we visited to see the

67

essay

Smoke Signals

By David Green

68

is hard to feel excited about saving US$6 a week.

I’ve also been turning to online forums that are supposed to be helpful to would-be quitters, but have often found them alienating rather than comforting. They are all written by

Illustration by Xiang Zhaohui

I’ve been a smoker for about 15 years. Last week, I decided that this was quite long enough.

As of the time of writing, I’ve been off the cancer sticks for SIX WHOLE DAYS. I feel better than I have in a long time, so well done me. On the other hand, my life has taken on the aspect of an unfortunate season of Big Brother, with every day of abstinence prefaced by an annoying voice in my head intoning how many days and hours I have been inhabiting the non-smoking house.

Outside, chaos reigns. One of my most frequent excuses for not kicking the habit while living in China is that it would be impossible. Onethird of all cigarettes manufactured are smoked in the Middle Kingdom. Nearly one-third of all Chinese adults smoke regularly, among them over half of the country’s doctors (who are partial to lighting up in between or even during consultations).

Travel to rural China and things get worse.

When talking to peasants or migrant laborers, it is customary to exchange cigarettes continually until the conversation is concluded or you faint from asphyxiation. Elsewhere, the giving of cigarettes is de rigueur when attempting to hurry up a business deal, with a box of the governmentcontrolled Panda brand the modern Chinese equivalent of a chest of Aztec gold. The same is even true at weddings and funerals – including the funerals of those who have croaked from lung cancer.

I have been using British comedian Allen Carr’s infamous book Easy Way to Stop Smoking as a crutch to get me through the process, along with copious amounts of exercise and Haribo binges. Carr’s “willpower method” does work, but some arguments against smoking which may be efficacious in the West simply don’t hold true in China. The expense argument falls particularly flat. Cigarettes are hardly taxed at all, with a pack of 20 costing less than a dollar – pound for pound, considerably less than fruit and vegetables. Even projecting decades into the future, it

People break for a smoke in the middle of a meal and often put their butts out in their uneaten food.

dyed-in-the-wool Westerners, who wax lyrical about how much easier it is than they expected now that smoking is banned from public places, particularly bars and restaurants. No such luck here - people break for a smoke in the middle of a meal and often put their butts out in their uneaten food.

If only I lived in Australia, where they have just introduced a new law banning all tobacco company logos and artwork from cigarette packets, replacing them with graphic depictions of diseased lungs and distended throats. This looks especially harsh from China, where some cigarette brands print their packaging with messages informing smokers that they have performed a good deed because some of the proceeds will be donated to charity (no, not a cancer charity – irony, even in China, has limits).

The news reports from Oz sounded like they were emanating from a distant world, and in terms of health education and awareness they might as well be. There is a catastrophic health disaster happening in China every year as more than a million people die from smoking related illnesses.

Allen Carr’s book includes a one-page chapter entitled “The Advantages of Smoking.” It’s just a blank page. Oddly, I found this as poignant as I found it witty. Giving up smoking in China is extremely hard, and Chinese people often make no attempt to do so - some will even intone arguments for smoking which date from the 16th century – that it promoted robust health, clears the lungs and even wards away mosquitoes.

Perhaps my attempt to quit smoking is destined to fail – after all, in China, it is positively incentivized. People look at you funny if you refuse a cigarette, whereas offering one in the West is now treated in some quarters as a minor assault.

However, if a miracle occurs and I do stay smoke free, it will be no small thanks to the heartwarming cloud of thick, impenetrable smugness that envelops me every day I wake up, a nonsmoker, in the smoking capital of the world.  NEWSCHINA I February 2013

Child’s Play

By Elyse Singleton Okuda

NEWSCHINA I February 2013

Commuting suddenly became miraculously smooth, despite having a baby and pram in tow.

Instead of having to weave and duck my way up the street past other uncaring pedestrians, the Shanghai crowds now parted for us like the Red

Illustration by Xiang Zhaohui

Before I had even left the airport, I knew things were going to be different. After three years' hiatus in which I had left, moved to Japan, got married, and had a baby, I was back in the motherland – the place I had spent eight years of my life, making me more than 20 percent Chinese in the process. Sort of.

This time, my China experience wasn't only about me – it was about the small person I had brought along for the ride – my 22-month-old daughter. Her grandmother had been freaking out about it. “You'll be all right,” she said, “but I am worried about her. Don't let her drink the water.” Sound advice, Mama S. I had no idea how this little bundle of noise and responsibility would change my beloved Shanghai. As soon as we got to customs, instead of having to take my place in the usual interminable line of frazzled laowai – foreigners – at passport control, Miss F and I were swiftly and politely directed to a much shorter queue, and I think the very dour customs officer may have even cracked a smile at her pudgy passport mugshot. I could get quite used to this, I thought to myself, as I breezed past the lines of travellers who hadn’t the foresight to bring a baby with them.

Barely days later, as Mommy got settled in for the full expat-style manicure and pedicure, Miss F was quickly monopolized by a cooing beautician who was evidently having a slow day. While I had my eyebrows waxed, my daughter gleefully watched cartoons on her impromptu nanny’s iPhone, completely oblivious to my absence.

In other countries, including my own, I wouldn't dream of taking my child to a beauty salon, especially a massage parlour, in case she might be a nuisance to other customers. However, on arrival at our local foot massage center, not only did the staff help us with our pram, but they also allowed my daughter to toddle around other recumbent patrons, asking questions, trying to get hold of the remote control and wolfing down all the complimentary fruit she could get her hands on.

Everyone in China seems to become broody at the sight of a toddler.

Sea. A smiling ocean of people would stop and ask me about my daughter’s vital statistics before crouching down to chat to her directly.

Everyone in China seems to become broody at the sight of a toddler.

Chefs prepared special dishes for her. Gorgeous young men smiled and waved at her. She could have been my wing-kid, if that wasn't totally broken and wrong. She and I were lapping it all up.

Of course, raising a young child in China isn’t always a cakewalk. Socially conditioned to believe in the absolute necessity of baby car seats, I didn't feel quite so blasé about stepping out the door and hailing a taxi anymore. As a result, we had to take Bus Number 11, as they say in China,

and walk – great for fitness, but not so great for the wheels on our Maclaren stroller – Shanghai's irregular and precipitous sidewalks often giving it such a jolt it could accidentally fold up my daughter inside it.

Even the gleaming Shanghai subway isn’t exactly child-friendly. Quite apart from the apocalyptic overcrowding, many stations lack elevators, meaning repeated struggles up and down long flights of stairs with Miss F’s stroller in my arms.

While some would studiously ignore my difficulties, many, many more would rush over to help me – of course, the most popular job being acting childminder rather than stroller Sherpa.

Of all the challenges China throws the Western parent, obtaining daily necessities remains the toughest. I prayed that my daughter wouldn't need to have her nappy changed urgently while we were out and about as baby change facilities, as with nappies, are almost unheard-of in China - not even in fancy restaurants. Not even at the socalled children's market could I find a changing table, instead having to go native and hold my daughter precariously over a hole-in-the-ground latrine.

The range of nappies and creams in China is also different – if you’re looking for chemical-free and biodegradable baby gear, you’ll have to look hard. Finding the right baby food to avoid setting off my daughter’s unfortunately extensive list of allergies was simply impossible, and our family simply had to give up our dream of going organic for fear we’d have to remortgage our home. But one always finds a way of coping, and we have – my daughter, well-fed, clean and, for the most part, happy, is oblivious to the struggle we’ve had simply to cater to her dietary requirements.

Being in Shanghai with my daughter showed me a new side to a city that I thought I knew so well – generally it seems much friendlier and altogether more appealing. The old Jezebel of the Orient might seem hard-bitten and indifferent on the outside, but really, if you can trigger her maternal instinct, she's a big softie.

69

Cultural listings Cinema

Tall Thai Tale Against all expectations, Lost in Thailand, a comedy about two rival Chinese businessmen whose fierce competition takes them both to Thailand, saw great commercial success after its release in mid-December. The writing and directorial debut of wellknown actor Xu Zheng, the movie’s mere 14 million yuan (US$2.2m) budget translated into box office takings of 240 million yuan (US$38m) in its first four days. Casting himself in a lead role, Xu was joined

by Huang Bo and Wang Baoqiang, both ordinary-looking actors with very distinctive acting styles. Critics praised the movie’s smart, natural style, and a new wave of Chinese tourists to Thailand is also expected in its wake.

Music

Book

The Grateful Rocker

Beyond Left and Right Radicalism

After four years of touring, singer-songwriter Xu Wei released his sixth studio album At the Moment in December. One of China’s best-known pop-rock stars, Xu earned instant recognition from the rock scene with his debut album In Another Place in 1997. Incorporating themes of loneliness, confusion and depression, with sad, angry but often catchy tunes, the album was seen as one of the most sincere and accomplished works of the 1990s. Over the next five years, Xu released two more albums, gradually embracing spiritual freedom and brightness. With even catchier tunes, the albums won him national fame among both rock and pop listeners. Over the following years, Xu continued to sing about his gratefulness for the good life, with increasingly smooth and upbeat tunes. Xu takes this trend to new heights with his latest album, while the gritty realism that made him famous has all but vanished.

Exhibition

Elements of Ink and Wash Can abstractionism work with Chinese ink and wash painting? To find out, Li Gang folded rice paper into small squares, soaked the edges with ink, unfolded the paper and painted with the squares. Reconstruction of Ink and Wash, an exhibition showcasing his experiments, was held in December in the Loftooo Art Space in Shanghai, to a warm reception from critics. Born in 1962 in Guangdong, Li learned traditional Chinese ink and wash painting at an early age. He later turned to print, due to the influence of modernist art movements in the 1980s, but moved back to ink and wash around 2000. In recent years, he has once again “deconstructed” the ink and wash style – he discarded his brushes, and replaced them with anything he could lay his hands on. With his new rice paper experiment, Li reveals an impressive and unique expression of both order and chaos.

70

By Xiao Gongqin

Xiao Gongqin believes that gradual reform towards becoming a new “political civilization” is the only way to complete China’s transformation. Therefore, he calls for extreme caution towards both left- and right-wing radicalism – respectively the “romanticized Cultural Revolution” and the “Western liberal revolution,” in his words. With the stagnation of political reform in recent years, the ideological gap between China’s left and right wings has widened, and both sides are attracting increasing number of supporters. Meanwhile, radicalism has also gained a considerable following. A famous historian and a prominent researcher on neo-authoritarianism, Xiao has systematically criticized the trend over recent years. In his view, China urgently needs to find a course of action suited to its specific conditions.

NEWSCHINA I February 2013

NEWSCHINA I February 2013

71

Commentary

Division of power is needed in county-level politics The recent spectacular fall of a county-level Party chief demonstrated how China’s current anti-corruption mechanisms have failed to rein in local officials

By Qiu Feng

A

mong the dozens of officials who have come under in- Party chiefs, including the power of supervision, they are compavestigation for corruption in recent weeks, Lei Zhengfu, rable to officials in feudal China, who were commonly known as Party chief of Beibei District of Chongqing, was easily the “local emperors.” most sensational. Lei’s unsalubrious If China’s new top leadership fall from grace was triggered by a is serious about pushing forward With all political power concentrated series of stills from a video recording political reform and curbing correleased by Zhu Ruifeng, a freelance ruption, it must reform the politiin the hands of county Party chiefs, journalist, showing a naked Lei in a cal structure at the county level. As including the power of supervision, decidedly compromising situation county governments have tradithey are comparable to officials in with a woman. tionally constituted the backbone feudal China, who were commonly According to Zhu, the 18-yearof Chinese society, rampant corknown as “local emperors.” old woman was “offered” to Lei by a ruption at this level of government construction company boss in return can easily erode the Party’s legitifor privileged access to government macy. The first step of a countycontracts, and was instructed to vidlevel reform program should be to eotape their encounters as an “insurance policy” should things not separate relevant powers, and increase transparency in county-level go to plan. In 2009, when Lei instead gave priority to a company politics. owned by his own brother, the construction boss tried to threaten In recent years, various localities have carried out a range of exLei with the sex tape. Lei reported the matter to Wang Lijun, for- periments on limiting the power of county-level Party committees, mer police chief of Chongqing, who arrested the construction boss by removing them from the policymaking process and limiting and sentenced him to a year in prison for “faking official seals.” The them to veto powers. In some cases, meetings of Party commitwoman was also detained for 30 days. tees regarding major public policies are broadcast live. However, Although details of the case have yet to be verified, it provides an none of this has genuinely affected the power base of county-level example of how local officials can abuse their power, and how the Party chiefs, since these programs were actually designed by the very current anti-corruption mechanisms can be manipulated to protect people whose power they purported to reduce. To rely on officials corrupt officials. Within the system, the supervisor and the super- to design a system of keeping their own power in check would be vised have ample room, and plenty of incentive, to ally with each truly naive. As long as China’s real politics continue to be conducted other. The reason that Lei was placed under investigation several behind closed doors, no amount of symbolic power reduction or years after the fact is arguably due to the recent fall of the Chongq- live broadcasts will effectively deter officials from the graft. ing police chief Wang Lijun. Were it not for Wang’s conviction, the To effectively curb corruption at the national level, the governcase may never have surfaced. ment must take serious action at the county level. Only when Party As a county-level Party chief, Lei enjoyed absolute power within chiefs like Lei Zhengfu are held accountable not just to themselves, his district, including powers of appointment, setting public policy but to the people they govern, can there be hope. and supervision, the only exceptions being defense and foreign policy. With all political power concentrated in the hands of county (The author is a freelance commentator)

72

NEWSCHINA I February 2013

NEWSCHINA I February 2013

73

74

NEWSCHINA I February 2013