June 2015 by China Newsweek Corporation

ECONOMY

Bear Necessities: Can Russia's Far East Tap Chinese Wealth?

Pushy Parent: The FTZ Trap

CULTURE

Opera Diplomacy: Mei Lanfang Documentary

After two major accidents in two years, why isnâ&#x20AC;&#x2122;t China putting the brakes on its paraxylene chemical industry?

$4.99 www.newschinamag.com

Volume No. 082 June 2015

INTERNATIONAL

EDITORIAL

Published by China Newsweek Corporation Publisher: Liu Beixian Executive Director: Liu Beixian Editor-in-Chief: Wang Xiaohui Editorial Office Managing Editor: Zheng Zhonghai Advisor: Liu Dizhong Senior Editor: Ruan Yulin Copy Editors: Jack Smith, Alex Taggart Lead Writers: Yu Xiaodong, Li Jia Editors: Wang Yan, Yuan Ye, Xie Ying, Sun Zhe, Du Guodong First Reader: Sean Silbert Address: 5th Floor, 12 Baiwanzhuang South Street, Xicheng District, Beijing, China Post Code: 100037 Tel: 86-10-88395566 Fax: 86-10-88388045 Email: readers@newschinamag.com www.newschinamag.com Art Department Art Director: Wu Shangwen Art Editor/Designer: Zhang Dawei Publishing and Development Office China Newsweek Corporation President: Wang Xiaohui Chief Executive: Fred Teng Tel: 1-212-481-2510 Fax: 1-212-481-2503 Address: 820 2nd Ave, 3B-C, New York, NY 10017, USA Email: readers@newschinamag.com Toronto Office Director: Xu Changan Address: 51 Halstead Drive, Markham, ON Canada L3R7Z4 Tel: 1-905-604-6150 Fax: 1-905-604-6170 Email: canada@newschinamag.com Marketing Director: Wang Chenbo Account Manager : Ren Jie Tel: 86-10-88388027 Circulation Manager: Yu Lina Tel: 86-10-88311834 Advertising Director: Gao Weiwei Tel: 1-212-481-2510 Marketing Promoter: Jerry Meng Tel: 1-212-481-2510 New York Office: Wang Yongzhi, Ruan Yulin, Deng Min Washington Office: Zhang Weiran, Diao Haiyang Los Angeles Office: Mao Jianjun San Francisco Office: Liu Dan Houston Office: Wang Huan London Office: Zhou Zhaojun Tokyo Office: Wang Jian Paris Office: Long Jianwu Bangkok Office: Yu Xianlun Kuala Lumpur Office: Zhao Shengyu Moscow Office: Huang Xiujun Manila Office: Zhang Ming Berlin Office: Huang Shuanghong Sydney Office: Zhu Daqiang Brussels Office: Shen Chen Astana Office: Wen Longjie Rio de Janeiro Office: Mo Chengxiong Johannesburg Office: Song Fangchan Jakarta Office: Gu Shihong Kathmandu Office: Fu Yongkang Legal Advisor: Allen Wu ISSN 1943-1902

CN11-5826/G2

NEWSCHINA I June 2015

How to make “Made in China 2025” a reality

s China’s growth slowdown deepens, there are signs that the manufacturing industry is also slipping, as it faces multiple chal-

But to achieve its goal, the Chinese government needs to address various problems currently impeding industrial upgrading. Firstly, China needs to lenges. further its ongoing anti-monopoly Despite excess capacity in variefforts to eliminate access barriers The apparent ous industries, investors in many across various sectors, and to furdecline in China’s labor-intensive enterprises are alther clarify the boundary between ready relocating to neighboring the respective powers of the govmanufacturing countries in Southeast Asia, where ernment and the market in the insector is taking labor is much cheaper. There are terests of fairness and transparency. place against the also signs that some hi-tech inIn the meantime, the government backdrop of other dustries are choosing to relocate to should strengthen IP protection to countries making developed countries. Recent data truly encourage and reward innoa more concerted show that both the number of facvation. tories and the total number of emSecondly, to promote innoeffort to develop ployees in this sector are in decline. vation, the government should homegrown The apparent downturn in consider resorting to structural manufacturing China’s manufacturing sector is stimulus to nurture and support taking place against the backthe development of innovative drop of other countries making a industries. During the National more concerted effort to develop People’s Congress (NPC) session homegrown manufacturing folheld in March, the government lowing the global financial crisis in announced that it will establish a 2008. The US, for example, has launched its “re- 40 billion yuan (US$6.45bn) innovation fund to industrialization” scheme. In Europe, the German sponsor new businesses, which is a good start, but government proposed the idea of “Industry 4.0” in not enough. 2013, while France launched the “New Industrial Thirdly and finally, the government should initiFrance” initiative. In Asia, both Japan and South ate tax reform to reduce the overall corporate tax Korea have launched their own strategies to boost burden. In recent years, government revenue has indigenous manufacturing. been growing at a far higher rate than the country’s Recently, Chinese Premier Li Keqiang also GDP, the product of a problematic tax structure. launched China’s own indigenous innovation A high overall rate of tax has crippled the ability policy, dubbed “Made In China 2025.” Focusing of domestic corporations to devote more resources on promoting innovation, industrial upgrading, into R&D, constricting innovation. construction, green industries and the integration While the Chinese government has vowed to of industrialization and information technology to improve its governance and reform itself into a create leading industrial giants, the strategy aims to service-oriented government, whether China can help the country graduate from its current position achieve the ambitious goals set by its “Made in as the “world’s factory” to make China the planet’s China 2025” strategy will serve as a litmus test for leading manufacturing power by 2025. the nation.

Contents

A CHEMICAL ROMANCE

P16

Editorial

01 How to make “Made in China 2025” a reality

politics

10 13

CCTV Anchor Scandal: Dinner Party Politics Taiwan and AIIB: The Name Game

Cover Story

society

26 28

Food Safety: Going Public Online Lottery : Swept Stakes

P52

16 PX Chemical Industry: An Inevitable Flashpoint/A Nasty Necessity

P44 NEWSCHINA I June 2015

Photo by CFP

In the face of mounting opposition following a string of accidents and ongoing environmental concerns, China continues to push ahead with the expansion of its paraxylene manufacturing industry.Why can’t the country kick this costly habit?

Contents

P30

P48

P28 P40

30 Soccer Reform: Own Goal

visual REPORT

international

OUTSIDE IN

34 Russian Investment Promotion in China: Eastern Promise

64 Hidden Hangzhou: Old Dog, New Tricks

economy

Commentary

36 40

Free Trade Zones: Helicopter Parenting Chinese Cars: Shifting Gears

history

44 Cultural Revolution: The Lost World culture

48 52 56

Andy Lau: Into the Dust Art Collector: Break the System Zhou Bing: A Legend Revisited

NEWSCHINA I June 2015

60 Soaked in Culture

72 China should adopt a comprehensive approach to realizing its “One Belt, One Road” initiative 04 MEDIA FOCUS 05 What They Say 06 NEWS BRIEF 08 Netizen Watch 43 China by numbers 66 real chinese 67 Flavor of the Month 68 ESSAY 70 CULTURAL LISTINGS

NewsChina, Chinese Edition

Oriental Outlook

April 20, 2015

March 26, 2015

Reform And Innovation

Consumer Rights Concern

Most would agree that when describing the city of Shenzhen, Guangdong Province, the buzzword has changed since the mid-1990s from “reform” to “innovation.” Shortly after China adopted its Reform and Opening-up policy in the late 1970s, Shenzhen became the poster-city for economic development. As the dividends of reform and the status of Special Economic Zones began to wane in the 1990s, the city met with significant resistance, while its continued reform efforts benefited the public and unsettled special interest groups. Across China, perhaps no other city embodies entrepreneurship and innovation quite like Shenzhen, where reform has required authorities at different levels to be creative in addressing the changing situation on the ground. NewsChina’s Chinese edition looked at the city’s continuous efforts to reinvent itself, including its most recent experiments in management innovation. Vista

Since the founding of the China Consumers’ Association (CCA), China’s first consumer rights protection organization, in late 1984, it has made public a series of quality control problems over the past 30 years. In 1985, the CCA exposed problems with imported air-conditioners, and made the first such consumer alert in China, contributing to the passing of China’s Consumer Rights Protection Law in 1994. In 2001, the CCA compelled Japan’s Mitsubishi Corporation to recall 75,000 faulty Pajero SUVs in the Chinese mainland and apologize to Chinese consumers after six rounds of lengthy negotiations, helping to establish China’s first product recall system. However, there is still a long way to go in terms of consumer rights awareness in China, and the CCA is expected to play a large role in this respect. China Economic Weekly March 9, 2015

Close-up On Overseas Assets The overseas assets of China’s huge apparatus of State-owned enterprises (SOEs) is a mystery to the public, as the government has never revealed specific figures. Dong Dasheng, former chief of the National Audit Office, said recently that a huge volume of SOE overseas assets have never been audited, leaving much room for wrongdoing. Analysts have estimated the overseas assets of China’s more than 100 centrally administered SOEs exceeded 4.3 trillion yuan (US$694bn) by 2013. Since President Xi Jinping’s “One Belt, One Road” initiative for international economic development has been put on the agenda, the State-owned Assets Supervision and Administration Commission of the State Council said China will invest 1.5 trillion yuan (US$242bn) in overseas infrastructure and energy projects, in which SOEs will be the main players. How to maintain and increase the value of these assets will be an interesting area of discussion.

April 8, 2015

Hard To Settle Down A growing number of Chinese parents are choosing to give birth in the United States, either to circumvent the Family Planning Policy or simply to secure US citizenship for their children. According to statistics from NGO the Association of Mothers and Babies, quoted on the website of news magazine Caixin, more than 20,000 Chinese women left China to give birth in the US in 2013 – while in 2014, this figure shot up to 30,000, it is expected to hit 60,000 by the end of 2015, signaling a boom in the nascent birth tourism industry. Many pregnant Chinese women landing in the US have to conceal their real intentions, and keep quiet when disputes flare up between their “birth agencies” and care centers – often US-based and Chinese-run – as this business operates in a legal gray area.

Minsheng Weekly April 15, 2015

Living in Darkness China’s population of 13 million people without an identity card and hukou, China’s internal visa, accounts for roughly 1 percent of the total population, according to the sixth national demographic census in 2010. According to a report published by the National Development and Reform Commission, those who lack these documents are normally migrant workers who are less educated, poorly paid and pessimistic, based on a sample of 1,929 individuals in 15 provinces across China. The survey concluded that being born in violation of the One Child Policy or out of wedlock are the main issues, accounting for over 60 percent of people living without a hukou. Excluded from mainstream society, reduced to poor living conditions and with no sense of belonging, the report claimed, this group are highly likely to “take revenge on society.” To makes matters worse, unregistered households are now producing a second generation of undocumented people, which may be a ticking time bomb for both the government and communities. NEWSCHINA I June 2015

“We should attach the same importance to restrooms as we do to restaurants. We should make restrooms as clean as our living rooms, and as beautiful as scenic spots.”

“The national economy, especially private businesses, could not have made such rapid progress without shadow banking.” Yale University finance professor Chen Zhiwu, speaking on the difficulty of getting access to bank loans in China, at the Bo’ao Forum for Asia.

“According to our analysis, the rise of Chinese stocks was not due to GDP growth [as in other countries], but to monetary growth.” Ha Jiming, Asia Pacific deputy director at Goldman Sachs, warning against overheating in China’s stock market resulting from the slowdown in the real economy.

“While emphasizing the culture of our traditional festivals, we have ignored their relationship with nature, which has great significance to our perception of life.” Zhang Yiwu, a Chinese literature professor at Peking University, advocating more “contact with nature” during festivals.

“The closer China gets to the rest of the world, the more obvious the downside of nationalism becomes. Excessive nationalism may push neighboring countries to the opposite side and may pressure the government to formulate policies that will harm diplomatic relations.” Wang Weijia, director of Chinese Enterprises Institute (CEI) , triggering debate by advocating cosmopolitanism. NEWSCHINA I June 2015

Illustration by Wu Shangwen

Li Jinzao, director of the China National Tourism Administration, proposing making lavatories “a window on development.”

“It will mislead farmers into thinking they can sell their rural homes, move to the city and become urbanites. By the time they realize city prices are too high, they’ll have nowhere to go back to.” Chen Xiwen, deputy director of the Party’s leading group on rural issues, voicing opposition to liberalization of rural land transfers.

“Too short a tenure will prevent university presidents from realizing their long-term vision for the university, which would be a pity for both the school’s future and the president himself.” The China Youth Daily criticizing Tsinghua and Peking universities for their high turnover among top-level faculty.

“Most Chinese consumption is either to meet survival or material needs, or just to follow fashion, with consumption for spiritual, cultural or personal reasons relatively rare. Given consumption’s big effect on the economy, there is much opportunity for economic growth in changing people’s attitudes towards consumption.” Qiu Haiping, economics professor at Renmin University, encouraging healthier consumption trends.

“So, is provincial or municipal Party secretary now a high-risk occupation?” Journalist Hu Yinbin joking at the news that three former Party secretaries of Kunming, capital of Yunnan Province, have fallen under investigation within a year.

Top Story

China Issues Water Pollution Action Plan

Control emissions from chemical plants, shipping, and animal husbandry Promote adjustment of industrial structures Control water usage and ground water collection Promote advanced technologies in saving and purifying water Adjust water taxation and pricing based on market mechanisms Tighten supervision and punishment of polluters Further specify water quality indicators Work out overall plan to protect the water ecosystem of specific lakes, rivers and oceans Clarify the responsibilities of each relevant department Encourage more public participation and supervision

The Chinese government issued its new Action Plan for Water Pollution Control on April 16, aiming to radically improve the country’s water quality by 2020. Formulated by the Chinese Academy for Environmental Planning under the Ministry of Environmental Protection, the plan sets out 10 “musts,” covering prevention, control, management, supervision and punishment. The plan is believed to be an urgent response to China’s worsening water quality. Official data show that 10 percent of China’s water earned a rating of “V class poor quality,” meaning “completely unfit for any purpose,” with that percentage rising to up to 39.1 percent in some regions. By 2012, 39 percent of the fresh water in China’s 62 lakes did not meet cleanliness standards for drinking water. The Action Plan pledges to raise the ratio of adequate or goodquality water in seven major rivers

above 70 percent by 2020, and to drastically improve the nationwide water ecosystem by 2030. In order to ensure better implementation, the plan emphasizes harsher supervision and punishment of polluters, including setting specific standards in certain industries, and shutting down plants that make insufficient efforts to control pollution. Given that water quality and environmental protection fall under the remit of various different departments, which all have a tendency to shift responsibility onto one another, the Action Plan also clarifies the responsibilities of each relevant department and assigns them specific tasks. Analysts have said that the plan involves around two trillion yuan (US$327.9bn) of government input in reducing water pollution, claiming that “iron-fisted” measures against water pollution will become “the normal state of affairs” in the following decade.

Sports

Liu Xiang Retires Liu Xiang, Asia’s top 110-meter hurdler, announced his retirement from athletics on April 7. In a statement posted on his Sina microblog, Liu claimed that the injury to his Achilles tendon has prevented him from ever returning to the sport. Liu’s career peaked between 2004 and 2007 when he successively won the World and Olympic championships, breaking the world record in the process. The national outpouring of praise, according to Liu’s microblog, encouraged him to push himself harder, but also led him to ignore injuries. At the 2008 Beijing Olympic Games, Liu withdrew from the competition at the starting block due to an unspecified injury. He fell at the first

hurdle at the 2012 London Olympics, ostensibly for the same reason. “I did not want to be called a ‘coward,’…but I really have tried my best,” he wrote in the statement, indicating that he plans to return to study in his retirement, and make efforts to promote China’s sports industry. NEWSCHINA I June 2015

Diplomacy

Laws

Xi Jinping Visits Pakistan

Online Gambling Crack Down

China’s President Xi Jinping made an official visit to Pakistan from April 20 to 21, a further step toward securing his “One Road, One Belt” strategy. According to media reports, the two countries signed 51 agreements during Xi’s visit, most of which were related to the Sino-Pakistani economic corridor proposed by Premier Li Keqiang in 2013. Stretching from Xinjiang in China to the Gwadar port of Pakistan, the 3,000-kilometer corridor includes major projects in power, roads, railways, and gas and oil, and is expected to benefit three billion people. Pakistani media have spoken highly of Xi’s visit, describing it as a milestone for the Pakistani economy and Sino-Pakistani relations. Official media claimed that Xi’s delegation brought US$46 billion in investment, reportedly three times the total amount of foreign direct investment in Pakistan in the past eight years.

Police in Guangdong Province recently cracked a large-scale online gambling syndicate, with a total of 1,071 suspects detained and around 330 million yuan (US$54.1m) of assets frozen. Reportedly the biggest online gambling operation since the founding of the People’s Republic of China in 1949, the syndicate, according to media reports, operated by building websites and luring users to bet on lottery numbers. According to police, the syndicate had set up 199 gambling platforms and possessed over 550,000 registered users, with the monthly stakes amounting to 400 billion yuan (US$66.7bn), about one fourth of provincial capital Guangzhou’s GDP in 2014. To avoid being detected, the group reportedly rented servers overseas, and their websites were maintained from Thailand. Lu Feng, office director of the Guangdong Provincial Public Security Department, revealed at a press conference that his department would soon set up a nationwide network to supervise online gambling.

Economy

PBC Reduces Deposit-reserve Ratio The People’s Bank of China (PBC), China’s central bank, aannounced on April 19 that it would reduce the yuan deposit-reserve ratio (RDR) by 1 percent, and lower the RDR of rural cooperative banks to the same level as that in rural credit unions. This adjustment, the PBC’s second RDR reduction in 2015 following the first on February 4, aims to further improve banks’ capability to grant loans, especially to small enterprises and agricultural projects.

Analysts have estimated that such a big drop in RDR will help release around 1.2-1.5 trillion yuan (US$196.7-245.9bn) of capital, constituting a significant stimulus to the real economy as well as the stock market. Given that the current RDR remains at a high level worldwide, and that traditional industries need funds for upgrading and structural adjustment, analysts predict that the PBC may continue to reduce RDR in the following months.

Society

Corruption in the Grain Reserve System

NEWSCHINA I June 2015

Photos by IC

State broadcaster CCTV recently shocked the nation by alleging that grain depots in Liaoning and Jilin provinces had purchased surplus grain as fresh grain. In order to protect the interests of farmers, the Chinese government had set a minimum price, usually higher than the market rate, for State-owned depots to buy fresh grain from farmers, only to find that many depots had leveraged that amount through fraud. The price difference, according to CCTV, was around 700 yuan (US$115) per ton. In the wake of the exposure, China’s State Administration of Grain sent an investigation team to the grain depots in North China and has reportedly seized up to 16,000 tons of mis-sold grain. Analysts said that low-quality reserve grain may lead to increased imports, which could threaten China’s food security. Many analysts have appealed to the government to reform the minimum-price system for strategic grain reserves, believing it no longer to be sustainable, with the cost of farming in China rising while the global price falls.

Embarrassing A county-level middle school in Yulin, Guangxi, has come under fire after asking students to do exercises in the rain during a tour of inspection by a local official, who watched the performance from under an umbrella. Pressured by public criticism, the school argued that the elderly official was in fragile health, though further backlash occurred when this story was contradicted by his office, which stated that the umbrella was being used to protect camera equipment.

Pitiful

Too poor to pay his hospital bills, Jia Binghui, a 25-yearold farmer from Yunnan Province, has shocked netizens by roasting himself over a home-made “grill” to ease the pain of his acute myeloid leukemia. On his microblog account, Jia stated that an “expert” told him that a temperature higher than 107.6 Fahrenheit would kill his cancer cells, provoking an outcry against the recommendation of quack folk remedies by irresponsible doctors.

Poll the People Peking and Tsinghua universities recently announced that they planned to enroll a defined ratio of outstanding rural students according to admissions criteria 30-60 points below the level set for urban applicants. What do you think of this move? I support it, because it will give more rural students a chance to get into college. I oppose it, because it is unfair to the other candidates. Source: http://t.people.com.cn

Most Circulated Post Retweeted 5,430 times by April 21

Funny

resonating

A man in Changsha, Hunan Province who had amassed 17 girlfriends was found out after he was sent to hospital following a car accident. One of the women told media that none of them knew about the others until they all showed up to visit their boyfriend. Netizens expressed curiosity about how this latter-day Casanova, who was reported as being neither attractive nor wealthy, had managed to acquire so many devoted partners.

“The world is so big, and I want to take a look at it” were words scrawled in a letter of resignation by middle school teacher Gu Shaoqiang, which was later posted online and spreading widely. Many netizens exclaimed that this simple sentence could apply to all China’s overworked employees who had neither the time nor the money to travel.

During an interview with Kyodo News Agency, superstar Japanese author Haruki Murakami appealed to the Japanese government to apologize to the countries it occupied during World War II. Many Chinese media outlets re-posted Murakami’s remarks, which won hundreds of “likes” from Chinese netizens. “Japan must apologize to the countries it invaded during World War II, such as China and South Korea, again and again until the countries say: ‘We are not necessarily completely over it, but you have apologized enough. All right, let’s leave it now.’”

NEWSCHINA I June 2015

WHO’S

Top Five Search Queries On

HOT? WHO’S NOT?

over the week ending April 20 China Adult Expo 915,052

The 2015 China International Adult Toys and Reproductive Health Exhibition was held in Shanghai from April 9 to 12, during which the appearance of a number of well-known adult movie stars sparked controversy.

No Communism 406,871

The Ukrainian government recently approved an act making display of any signs, images and ideas associated with either Nazism or Communism punishable by five to 10 years in prison.

Mr Lift

Death of Asia’s Tallest Man 393,830

Wang Fengjun, 39, the tallest man (2.55 meters) in Asia, passed away on March 31 due to anemia and organ failure.

Foxconn, Apple’s China-based manufacturer, announced that they plan to retrofit and sell second-hand iPhone products recycled by Apple, a move met with a lukewarm response from Chinese consumers.

Journey to the West 115,154

A Sino-US 3D co-production slated for release in 2016 is the latest in countless adaptations of the classic Chinese novel of the same name.

Top Blogger Profile Stephon Marbury

Followers: 3,731,332 Stephon Marbury, a New York-born NBA star currently signed with the Beijing Ducks, recently revealed on his microblog that he has applied for indefinite leave to remain in China. If approved, Marbury will become the first athlete among around 5,000 foreign nationals ever granted a Chinese green card. After a spotty career in the NBA, Marbury joined the China Basketball Association (CBA) in 2010 after being signed to a club in Guangdong Province, before transferring to the Beijing Ducks in 2012, leading the team to three consecutive CBA championship victories. On March 22, Beijing Ducks beat favorites the Liaoning Flying Leopards in the 2015 CBA final, after which Marbury was awarded the title of Most Valuable Player. However, it is Marbury’s charm offensive that has won over the public, with his decision to move his family to Beijing, his use of the local subway and a proclaimed fondness for local soccer and “crosstalk” comedy, all given extensive coverage in State media. “I will still feel the same with or without the green card. This is still home for me, this is in my heart,” the 38-year-old US citizen told the English-language China Daily. His latest post was a retweeted picture of a black man standing before China’s national flag, with the caption “forever love.” NEWSCHINA I June 2015

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

Secondhand iPhones 221,306

He Wenbin, a worker in Xiangtan, Hunan Province, was nicknamed Mr Lift by netizens after he rescued a five-year-old girl who fell out of a window and was caught on a fifth-floor balcony railing. He, with the help of several other witnesses, climbed to the floor below and supported the girl’s body until firefighters arrived to free her.

“Ungrateful” Couple After being hit by a car while cycling Death Valley, and owing a local hospital a fortune in medical fees, a Chinese couple had to ask the Chinese government for help. Many netizens, however, were unsympathetic, resulting from the couple’s microblog entries filled with complaints about the Chinese government and the country. The netizens satirized that only a disaster abroad could change their “ungrateful” attitude.

Brave Firemen He Yiliang, a fireman in Zhejiang Province, shot to fame online after dashing into a home and carrying a flaming gas canister outside, preventing a potentially deadly explosion. The story led to other accounts of the bravery of China’s firefighters being posted online.

Hatchet Men An anonymous netizen revealed to media that a recruitment app for “hired thugs” has been made available on China’s Android store, enabling users to bid for the services of hit men. Police have since launched an investigation into the developer and ordered a ban on such apps.

politics

CCTV Anchor Scandal

Dinner Party Politics Video footage of a Chinese television celebrity singing a lewd song mocking Chairman Mao Zedong has rekindled ideological clashes between left and right in China By Yu Xiaodong

n recent months, China Central Television (CCTV), China’s State broadcaster, has found itself constantly in the spotlight as a number of high-profile anchors have been making headlines, one way or another. In 2014, the investigation into several personalities and senior executives including CCTV news anchor Rui Chenggang, following allegations of graft, caused a sensation across the country. Then, in March 2015, Chai Jing, a former CCTV reporter, caused a national storm with Bi Fujian in the leaked video the release of a controversial documentary on air pollution, which attracted hundreds of millions of viewers before being pulled from official outlets by State censors. In early April, Bi Fujian, a popular CCTV anchor, earned more ink for the State broadcaster, after he appeared online in a leaked video purportedly mocking the late Chinese leader Mao Zedong, leading to a new round of debate over a variety of issues ranging from the role played by Mao Zedong in China’s recent history to limitations on freedom of speech and the right of public figures to privacy.

Viral

Widely known as “Grandpa Bi,” Bi Fujian, 56, enjoys broad popularity thanks to his avuncular on-screen style, a contrast with most CCTV anchors, who are often viewed as stiff and officious. Bi has most recently been hosting the multi-season talent show Avenue of Stars and since 2011 has served as a co-presenter on the broadcaster’s annual variety gala, which has drawn hundreds of millions of Chinese viewers on the Chinese New Year’s Eve. In the leaked video, which was recorded in a private suite at a res-

taurant, Bi delivers a rendition of arias from Taking Tiger Mountain by Strategy, one of the eight “model operas” and ballets approved in the 1960s by former actress Jiang Qing, Mao Zedong’s wife. These model operas, which incorporated traditional performance styles and revolutionary socialistrealist content, were the only forms of live theatrical performance officially sanctioned for public exhibition during the Great Proletarian Cultural Revolution (1966-1976). In the footage, Bi interspersed each line from an aria with his own satirical remarks. For example, one line, “the Communist Party! Chairman Mao!” was followed up with “the old son of a bitch has brought calamity to us.” At another point, after singing that “the people’s army, sharing suffering with the people, have come to take Tiger Mountain,”

Bi added, “What a boast!” Following Bi’s performance, his fellow diners, among whom were seated several foreign nationals, are seen to break into laughter and applause. The recording of Bi’s ridicule of Chairman Mao, which soon went viral online, was followed with public outrage. The apparent presence of Westerners at Bi’s dinner table, initially rumored to be staff from the US and Ukrainian embassies, was used by netizens to connect Bi with the idea of fomenting a color revolution, further complicating his position. It later emerged that Bi’s foreign companions were representatives from the embassy of Belarus. On April 8, CCTV issued a statement announcing Bi’s suspension. “[Bi’s] comments in this video have serious social consequences,” the statement ran. “We will conduct an investigation and sternly deal with [him] according to the relevant regulations.” Bi also issued his own statement via his microblog account. “I feel extremely remorseful and sorry, and sincerely offer my apologies to the public,” he said, adding: “As a public figure, I have certainly NEWSCHINA I June 2015

learned [my] lesson and will exercise strict personal discipline.”

Divided

However, amid widespread condemnation of Bi online and in the State media, strong voices have emerged defending his right to privacy when it comes to his own opinions. For example, novelist Xia Shang wrote on his microblog that the anonymous leaking of the controversial video was reminiscent of the “informant culture” of the Cultural Revolution, when people would report the “counterrevolutionary” activities and remarks of their friends, co-workers and even their own family members to the authorities. Others even applauded Bi’s stance on Mao’s mistakes. “To say that Mao brought calamities to the Chinese people is merely stating a fact,” commented one netizen. According to online survey conducted by ifeng.com which drew over 600,000 responses, 34.2 percent of netizens were “outraged” by Bi’s comments, with 31.7 percent of respondents describing themselves as “sympathetic” towards the beleaguered anchor, and a further 24.8 percent as “disappointed.” Another survey conducted by the news portal sina.com.cn showed that 30.4 percent of respondents supported CCTV’s decision to suspend Bi’s programs, while 50.6 percent disagreed with the move, with the rest being “indifferent.” Although both surveys were later taken offline, they illustrate the enduring divide in Chinese public opinion over the legacy of Chairman Mao. Bi is not the first to trigger a national debate over Mao in recent years. In 2013, Mao Yushi (no relation), an independent economist and a persistent critic of China’s late chairman, called for a re-evaluation of Mao’s legacy, a call met with a number of major high-profile protests in which Chairman Mao’s supporters urged that the authorities try Mao Yushi for treason. The protests stoked online debate between China’s leftists (largely supporters of more traditional strong-state Marxism-Leninism) and rightists (generally liberal social democrats), clashes to which the authorities responded with a crackdown on both sides. While the protesters were dispersed and their websites taken offline, scheduled speeches by Mao Yushi in a number of cities were canceled.

NEWSCHINA I June 2015

For many Chinese, such as Mao Yushi, Mao Zedong is directly responsible for movements such as the Great Leap Forward, an attempt to simultaneously industrialize China’s agricultural production and completely restructure society through a network of people’s communes. Many historians believe that this failed scheme was the major cause of the Great Famine of the late 1950s and early 1960s during which, according to official statistics, China experienced at least 13.5 million deaths from starvation. Many also blame Mao for the excesses of the Cultural Revolution, which led to the persecution, torture and murder of an estimated hundred million Chinese. In contrast, Mao’s supporters portray him as an idealistic revolutionary and blame other forces, such as inept subordinates and, in the case of the Cultural Revolution, the Gang of Four clique led by Jiang Qing, for most of the calamitous movements of the Mao era. For them, China’s various existing social problems are the direct result of deviating from Mao’s orthodox socialist path. In the late 1970s and early 1980s, the Party officially ruled, drawing on a statement by the late Chinese leader Deng Xiaoping, that Mao was “70 percent right and 30 percent wrong.” Ever since then, public discussion of Mao’s private life, and his responsibility for the political movements launched in his name, remains a political and social taboo. A major reason for this taboo is that, being the symbol of China’s communist revolution and the founding father of the People’s Republic, Mao’s role has become so intertwined with the legitimacy of the Party’s ruling status, that the Party is concerned that a deeper examination of the Great Helmsman’s historical role in shaping modern China will not only lead to uncomfortable ideological debates, but to some even questioning the Party’s right to rule.

Traitor

Compared to the debate kindled by well-known liberal Mao Yushi, Bi Fujian’s problem is that he works for the State broadcaster expressly charged with maintaining political orthodoxy. Bi’s actions, therefore, have led many to call him a “traitor.” As the leadership has endeavored to boost the Party’s image in the

politics

Photo by Xinhua

‘As a public figure... I have certainly learned my lesson and will exercise strict personal discipline.’

past couple of years, intellectuals who are themselves Party members, or who work in Party- or government-sponsored institutions, an umbrella that extends to include university professors, writers and journalists working for the official media, are expected to maintain their “integrity” by upholding Party orthodoxy both in and outside the office. It is argued that people who are on the State payroll should be punished for criticizing the political establishment and undermining the Party’s legitimacy, a phenomenon known as “eating the Party’s lunch while smashing its cookpot.” This seeming hypocrisy is what State media criticism of Bi’s actions has overwhelmingly highlighted. “Without Mao and the party, would Bi Fujian be able to have his banquets, his successful career and the popularity of the people?” ran a commentary on the website youth.cn, an outlet under the Central Committee of the Communist Youth League.

The Legal Evening News, a newspaper under the Party’s Beijing branch, struck a milder tone. Pointing out that Bi’s actions should not incur criminal charges, an editorial instead argued that Bi, given his position at CCTV, should be expected to bear the “moral and professional consequences.” The China Supervision for Law and Order Newspaper, the official journal of the Central Commision of Discipline and Inspection (CCDI), China’s anti-corruption watchdog, emphasized that “being a Party member himself, Bi’s insults to the Party’s leader should be subject to the Party’s discpline.” “The people will wait and see how CCTV will handle this violation of Party discpline,” it continued. So far, CCTV has not announced its final verdict on Bi’s fate. But as Bi has already been replaced on the show Avenue of Stars, it is widely believed that this former star anchor’s days at CCTV are numbered. NEWSCHINA I June 2015

Taiwan and AIIB

The Name Game

Taiwan’s failed bid to join the Beijing-led Asian Infrastructure Investment Bank illustrates the new reality Taipei will face in handling the cross-strait relationship By Yu Xiaodong

or much of March 2015, the China-led Asian Infrastructure Investment Bank (AIIB) occupied international headlines as it continued to attract unexpected applicants like the UK, Germany and other strategic allies of the US, who petitioned to join as founding members. Of those rushing to join the AIIB, perhaps the most curious was Taiwan, which announced its intention to join the AIIB on the very last day before the March 30 deadline. But when the bank announced that it had approved 57 countries as prospective founding members, Taiwan appeared to be the only applicant who didn’t make the cut. In a statement, China’s Taiwan Affairs Office (TAO) said that Taiwan would be welcome to participate in the bank “under the appropriate name.” Observers believe that with Beijing’s influence rising in the region, Taiwan will have fewer and fewer bargaining chips in its negotiations with Beijing in the process of integrating into the evolving regional architecture.

In response to Beijing’s rejection of Taiwan’s bid to join the AIIB as a founding member, Taiwan’s governmental Mainland Affairs Council says it will re-apply to become a regular member of the bank, so long as Beijing “treats it with respect.” But Wang Jin-pyng, president of Taiwan’s Legislative Yuan, said that while he would approve the name “Chinese Taipei,” anything “less” was unacceptable. While the TAO has said that a way can be found for Taiwan to participate in the AIIB through “practical consultation,” many believe that Beijing may be adopting a “wait-and-see” approach, since it is widely believed that the Kuomintang (KMT), Taiwan’s ruling nationalist party, which supports improving ties with Beijing, may suffer a defeat in the 2016 general election. Having defeated the KMT in a major local election in 2014, it is predicted that Tsai Ing-wen, leader of Taiwan’s opposition Democratic Progressive Party (DPP), well-known for its pro-independence position, will become Taiwan’s top leader in 2016, with her party possibly winning a majority in the legislature as well.

‘Appropriate Name’

‘Status Quo’

For decades, Taiwan’s international status, including the name it uses to join international organizations, has been the major sticking point between Taipei and Beijing. Since the People’s Republic of China replaced the Republic of China at the United Nations in 1971, most countries, including the US and Japan, have maintained only unofficial ties with Taipei. While Taiwan continues to participate in various international organizations, such as the International Olympic Committee and APEC, it changes its name from the “Republic of China” to “Chinese Taipei.” In the Asian Development Bank, its membership name is “Taipei, China.”

NEWSCHINA I June 2015

Given the dominance of the cross-strait relationship in Taiwanese politics, Tsai Ing-wen has been under pressure in recent months from all sides to clarify her policy on the relationship. A major focus is whether Tsai and the DPP, if elected, will recognize the “1992 Consensus,” a tacit understanding reached between the KMT and the Chinese government that both sides of the Taiwan Strait acknowledge that there is “one China,” though each side has its own interpretation of what that means. In recent years, the 1992 Consensus has served as the political basis for improvement in economic ties between the mainland and Taiwan. But for years, the DPP has criticized it for bending to Beijing’s “One

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China” principle which, it has argued, undermines Taiwan’s “sovereignty.” Beijing, for its part, has shown no sign that it will compromise on the 1992 consensus. At the annual National People’s Congress held in March 2015, Chinese President Xi Jinping declared that the 1992 Consensus remained the foundation of cross-strait relations, and warned that the relationship between Beijing and Taipei would return to a state of turbulence if this foundation were sabotaged. So far, Tsai has refused to clarify her position on the 1992 Consensus. Instead, Tsai said the DPP will “maintain the status quo.” But, for many, Tsai’s “status quo” is too vague to be meaningful. While it could be interpreted that Tsai will continue with the existing policies of the KMT, it could also mean that she will stick to the DPP’s long-standing stance outlined in the Resolution on Taiwan’s Future, a keynote DPP document issued in 1999 stating that Taiwan’s “status quo” is that the island is already “a sovereign and independent state.” Tsai’s cautious position has led to criticism from both within and outside the DPP, as well as from Washington. On March 20, former managing director of the American Institute in Taiwan Barbara Schrage warned at a conference on US-Taiwan relations that Tsai should strive to find ways to narrow its differences with Beijing, or she may not gain the support of the US on her upcoming trip to Washington. Schrage stressed that Tsai had failed to clarify Washington’s concern on her policy with Beijing during a 2011 trip to Washington, a major reason why the DPP lost the 2012 election. In response, Tsai said on April 9 that by “maintaining the status quo,” she meant that relationship must remain peaceful and stable. But Tsai’s explanation immediately triggered a new volley of criticism. While pro-independence activists questioned how Tsai can make a difference, KMT supporters accused her of being “hypocritical” in her past attacks on the KMT’s policies which have forged the current status quo.

Reality

According to Lin Ting-hui, vice president of the Taiwan Brain Trust, a pro-independence think tank in Taiwan, Tsai’s new definition of “status quo” is merely designed to reassure Washington that the DPP will not seek confrontation with Beijing. “The definition of the status quo in the Taiwan Strait can be defined by neither Taipei nor Beijing, but by Washington,” Lin said. “As China’s power cannot yet match that of the US, Beijing will have to accept Washington’s definition [of the status quo],” said Lin.

Lin’s confidence appeared to be backed up by an unexpected landing in Taiwan of two US Marine F/A-18 jets on April 1, which some interpreted as a message that Washington was prepared to defend its allies in the region in the event of conflict. However, with Beijing’s regional influence on the rise, others question Tsai’s wisdom in ignoring Beijing when defining her Party’s policy on cross-strait ties. According to Chu Yun-han, a professor of political science from the National Taiwan University, Taiwan’s bid to the AIIB, the first international organization Taiwan has aspired to join in the absence of the US, may turn out to be a watershed moment for the dynamics of the trilateral relationship between Beijing, Taipei and Washington. “Taiwan’s [failed] bid to join the AIIB is now forcing Taiwanese society to wake up to a dire reality it has been trying so hard not to accept, which is that Taiwan’s participation in the international community is effectively at the discretion of Beijing, and its tolerance in the interpretation of its ‘One China’ principle,” said Chu in a commentary published on guancha.cn. Chu pointed out that in the past, disputes between Beijing and Taipei over Taiwan’s international status with various international organizations were often dealt with indirectly, allowing both sides room for interpretation. But as Beijing has begun launching initiatives to facilitate regional economic integration, Taiwan is now being forced to deal with the relevant issues directly with Beijing, leaving less room to maintain the argument that Taiwan is an independent country. Chu warned that Taiwan’s handling of the “new reality” will have long-term implications for Taiwan’s position in the evolving regional architecture. Currently, besides the AIIB, Taipei is currently excluded from various major regional initiatives, including the ASEAN-led Regional Comprehensive Economic Partnership (RCEP) and the US-led Trans-Pacific Partnership (TPP). Beijing will also have the influence to determine Taipei’s position within the Free Trade Area of the AsiaPacific (FTAAP), a trade framework promoted by Beijing in the APEC summit of 2014. Taiwan’s chance to benefit from the mainland’s “One Road, One Belt” initiative will also hinge on attitudes in Beijing. In recent years, the KMT has been arguing that improved ties with Beijing are a necessity to prevent Taiwan from becoming isolated in the region, and has shown a willingness to make certain political compromises to do so. While the DPP is not opposed to further regional integration, it has claimed that it can be done without undermining the island’s “sovereignty.” As it remains unlikely that Beijing will make any major compromises, the DPP, if elected, will have to make some uncomfortable – and possibly existential – choices regarding Taiwan’s future.  NEWSCHINA I June 2015

8 27 24 19 29

31 30

26 7

8 27 24 19 29 33

1. China 20. Saudi Arabia 39. Italy 30 2. Brunei 21. Singapore 40. Luxembourg 3. Cambodia 22. South Korea 41. Netherlands 4. Bangladesh 23. Sri Lanka 42. Spain 5. India 24. Tajikistan 43. Switzerland 6. Indonesia 25. Thailand 44. United Kingdom 1 7. Jordan 26. Turkey 45. Sweden 8. Kazakhstan 27. Uzbekistan 46. Finland 9. Kuwait 28. Vietnam 47. Norway 10. Laos 29. Kyrgyzstan 48. Iceland 11. Malaysia 30. Israel 49. Russia 12. Maldives 31. Georgia 50. Portugal 13. Mongolia 32. United Arab Emirates 51. Poland 2614. Myanmar 33. Azerbaijan 52. Malta 15. Nepal 34. Iran 53. New Zealand 7 Oman 16. 35. Austria 54. Australia 18 17. Pakistan 36. Denmark 55. Brazil 20 28 18. Philippines34 37. France 25 3 56. Egypt 19. Qatar9 57. South 1738. Germany 11 Africa 14 4 16 2 10 23 5 6 32 12 21

38 40

5 12

AIIB Founding Members 31

NEWSCHINA I June 2015

28 25 3

44 42

18 11 2

10 21

38 47 45 40 51 45

46 49

36 39 35

41 52

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BURNING QUESTIO 16

NEWSCHINA I June 2015

that the countr y claims cannot be met elsewhere. However, a string of accidents, ongoing opposition from environmentalists, and stubborn concerns over public health continue to impede the expansion of a designated strategic industr y

Scenes from the PX plant explosion on Fujianâ&#x20AC;&#x2122;s Gulei Peninsula, April 6, 2015 NEWSCHINA I June 2015

Photo by CFP

IONS

lmost singlehandedly responsible for the rise of NIMBYism in Aindustr China, the countr yâ&#x20AC;&#x2122;s controversial paraxylene (PX) manufacturing y strives to meet a need for this unique petroleum product

cover story PX Chemical Industry

An Inevitable Flashpoint An explosion at a controversial PX chemical plant, its second accident in 20 months, has further fueled criticism of ongoing government support for construction of potentially dangerous and environmentally unproven industrial projects By Wang Yan

n the afternoon of April 7, 2015 as members from environmental NGO Green Home of Fujian (GHF) arrived on the Gulei peninsula, the ruined husk of a local chemical plant, the scene of a massive explosion on the previous day, was still aflame. Although the majority of local residents had already been evacuated to a designated safe zone 20 kilometers away, some still remained in their homes, unwilling to leave despite the danger. “The air was heavy with the smell of rotten eggs,” GHF’s Director-general Hong Zhi told NewsChina. “We wore masks, but still felt dizzy and nauseous.” Hong was among a group of representatives of this local advocacy group who visited the scene of the accident. To her surprise, locals informed her that they’d gotten used to the stench released from the plant, which, since beginning operations in 2013, had produced the chemical paraxylene (PX), a flammable chemical used in polyester and plastics manufacturing.

Explosion

According to local media reports, an oil depot at the Taiwanese-owned Dragon Aromatics (DA) chemical plant, located in Zhangzhou, Fujian Province, exploded at

7PM on April 6. Three storage tanks with total capacity of 12,000 cubic meters caught fire after the explosion. Witnesses told local media that tremors from the explosion were felt up to 50 kilometers away, and that huge flames and a giant plume of smoke shot into the night sky. Homes and businesses nearest the plant had their windows blown out, and some villagers had to escape from the blaze by boat. Even after firefighters extinguished the fires that engulfed three of the tanks, one continually reignited, while the facility’s fourth tank also burst into flame days after the explosion. It was not until the morning of April 9 that the fire was completely extinguished. Zhangzhou’s deputy mayor Zhang Yiteng told reporters that one person was injured at the blast site and five more hurt by broken glass. Although some local netizens used microblog service Weibo to express doubts about official casualty figures, State media reported that a total of 14 people were hospitalized, with no fatalities. As the fire continued to rage, however, government rescue workers had evacuated some 30,000 local residents by April 9. Wang Wensheng, head of the Fujian provincial fire service told NewsChina that 322

fire engines and 1,417 firefighters were deployed to combat the blaze. “As far as I know, this might possibly be the worst chemical factory explosion in Fujian’s, or even China’s, history,” Wang told NewsChina on April 12, adding that the seriousness of the accident was due to the placement density of oil storage tanks, the use of diversified oil products, the large scale of the fire and strong winds. Wang also stated that the materials within the tanks underwent changes of state caused by the extreme temperatures, which further fed the blaze. “In a worst-case scenario, the chain effects of the explosion could destroy not only the factory but the whole peninsula,” he said. Local authorities claimed that there were no leaks from the plant’s three chemical tanks and no signs of environmental contamination following the blast. However, local media reported that a fish farmer surnamed Huang from Daizai village on the Gulei peninsula found that large number of his farmed seahorses had died during the night of the explosion. In Dongshan, some five kilometers away from Gulei across a narrow strait and downwind from the PX plant, locals reported that rainwater had turned black. Both State media and the Zhangzhou govNEWSCHINA I June 2015

Photo by ic

Chinese investigators examine the facility damaged by the explosion, Zhangzhou, Fujian Province, July 30, 2013

ernment have been at pains to play down the accident. Zhang, a 31-year-old Zhangzhou city resident, told NewsChina in mid-April that local media outlets including the Minnan Daily ran only a smattering of reports on the disaster.

Accident

The Zhangzhou explosion was the second to hit the Gulei PX plant, which broke ground in 2008, in 20 months. On July 30, 2013, local media reported a minor explosion at the factory when a pipeline filled with hydrogen cracked, causing the gas to ignite. At the time there were no reported causalities or toxic leaks. As in 2013, the most recent explosion at the plant was described as a production safety accident by official inspectors. One DA engineer told the Beijing News that the cause of the fire was a crack in a boiler pipeline which caused an oil leak that later ignited into a blaze that quickly spread to two nearby runoff tanks. The engineer, speaking anonymously, added that oil pipelines gradually corrode over time if not properly maintained, increasing the possibility of an explosion. The attribution of the explosion to negligence infuriated local residents and led to a NEWSCHINA I June 2015

public outcry. China’s State Council quickly stepped in to express concern and urge the local authorities to launch an immediate investigation into the cause of the accident, and chastise those responsible. According to Yang Dongliang, director of the State Administration of Work Safety, the Dragon Aromatics plant explosion was a “typical case” of unqualified project approval, insufficient investment in safety controls, and a lack of safety supervision. “The [DA] incident should teach us a serious lesson and will surely have repercussions,” Yang commented during a conference held in Beijing on April 14. Cao Xianghong, academician with the Chinese Academy of Sciences, told ScienceNet.cn that industrial accidents are usually caused either by shoddy hardware or human error. Jiang Shicheng from the Chinese Academy of Engineering shared Cao’s opinion, adding that PX was a mid-level oil processor, and, with sound safety controls and strict management, should have been immune to such accidents, leading him to conclude that “there might be a problem with its safety management.” Wei Fei, professor of chemical engineering at Tsinghua University, told Caixin Weekly that, for a grand project worth tens of bil-

lions of dollars like the DA plant, architects and engineers should have made contingency plans for a variety of emergency scenarios. “Why is a potential source of ignition located close to an area with no measures designed to prevent oil spills?” Wei asked, ultimately concluding that lightning, static discharge or even human activity could have produced the fatal spark. “Big accidents like this one are the result of a chain reaction,” Wei continued. “Generally speaking, if regulations are followed, there should not be any safety issues.” At press time, however, the Zhangzhou government, the city’s Administration of Work Safety, the local Environmental Protection Bureau and the Gulei Management Committee have all refused to respond to NewsChina’s enquiries about the disaster.

Propaganda

Initial investment in the DA project amounted to 13.78 billion yuan (US$2.24bn). The plant was designed to produce 800,000 tons of PX annually, but at the time of the disaster had already upped annual output to 1.6 million tons. Of major interest to the local authorities was the potential impact of this enterprise on local GDP, to

Photo by CFP

cover story

Migrant workers leave the Gulei Peninsula to seek employment elsewhere, April 7

which the plant was predicted to contribute some 80 billion yuan (US$12.9bn) in each year of operations. The plant was initially slated to be built in the coastal resort city of Xiamen, also in Fujian Province. However, environmental activists used text messages to disseminate information about the potential impact of a PX chemical plant on public health in this city of several million residents, provoking vehement and coordinated opposition. In mid2007, tens of thousands of protesters took to Xiamen’s streets with banners calling for a halt to the project. Zhao Yufen, a professor at Xiamen University, launched a petition to stop the project that was ultimately presented to the Chinese People’s Political Consultative Conference (CPPCC), top advisory body to China’s legislature. The campaign made headlines nationwide, and under mounting pressure from both the Chinese public and the international media, this rare example of Chinese NIMBYism forced local authorities to relocate the project. While the case was hailed as a rare victory for public protest, the plant was ultimately built in the nearby town of Zhangzhou. Unlike their counterparts in Xiamen, the Zhangzhou government, eager to prioritize urban development, only made a low-profile

The explosion blew out the windows of local buildings

introduction of the project to local residents. Local media followed the government’s lead, only reporting the DA plant’s construction as a “key petrochemical project,” and avoiding any mention of PX. The government diverted huge resources to railroading public opinion. Local villagers on the Gulei Peninsula and fish farmers in neighboring Dongshan engaged in public protests, but had their accompanying petitions ignored. Various local sources confirmed to NewsChina that government employees were required to refrain from participating in any activities that directly opposed or even hindered construction. If spotted at a protest, their employers warned, they would lose their jobs. Furthermore, the Zhangzhou government made no effort to solicit public opinion regarding construction of the plant. Public engagement largely consisted of government assurances via official media that the PX plant was being constructed according to the highest environmental standards and would, according to one press release, “definitely never” experience an accident. Bombarded with propaganda, and with dissenting voices effectively muzzled, most local residents began to believe the government’s line. The construction of PX plants has been

highly controversial in China due to questions surrounding both safety and environmental impact. However, national authorities claim that high domestic demand for the chemical necessitates the expansion of the industry. According to government statistics, domestic PX production in China meets less than 50 percent of total demand, and while public confidence continues to wane, new projects are moving through the approval process. “Theoretically speaking, the latest explosion won’t have a long-term impact on the domestic PX industry, but could possibly create obstacles for its near-term development,” Professor Lin Boqiang, director of the China Center for Energy Economic Research at Xiamen University, told NewsChina. “The general public will use this recent accident as evidence to oppose the further development [of the PX industry].”

Destructive

In May 2008, the investment agreement contract between the Zhangzhou government and Dragon Aromatics was formally signed. After one year spent on an environmental assessment and securing land resource, construction began in May 2009, and the plant began trial operations the folNEWSCHINA I June 2015

Major Events for Zhangzhou PX March 2007, 105 CPPCC members raised petition to the central government, opposing building the PX project in Xiamen.

Photo by CFP

June 1, 2007, over 5,000 Xiamen residents demonstrated against the PX project.

A Gulei villager offers prayers for safety shortly after the explosion

lowing March. The project led to 30,000 local villagers in Gulei being relocated to a newly built settlement named Xingang (New Harbor), 15 kilometers away from their former homes. Although each family who willingly relocated could expect compensation of around 1 million yuan (US$16,140), the bulk of this money was spent buying their new homes in Xingang. Most had to abandon their livelihoods along with their homes, and struggled to find work in their new communities. Those who chose not to relocate experienced a dramatic change in their quality of life, and learned what it means to live in the backyard of a chemical plant. Other than the foul smells emanating from its ventilation system, villagers alleged that the plant’s opening coincided with a rise in mortality among their farmed abalone, a major source of local income. Most blamed runoff from the plant. Worse still, these hangers-on face eviction from the peninsula’s surviving eight villages, all of which are slated for evacuation by October 2015, when the local government has determined it will convert the entire area into a massive industrial base. Most, having seen the fate of those villagers who relocated to Xingang, are reluctant to uproot, despite the NEWSCHINA I June 2015

obvious disadvantages of continuing to live in close proximity to the DA plant. For over three hundred years, people on the narrow Gulei Peninsula have made a living through agriculture, fishing and fish farming. Not wanting to be left behind by China’s coastal industrial boom, the Zhangzhou government began actively seeking investment from major projects in 2002. Prior to DA’s arrival, the largest local industrial project only secured investment of 360 million yuan (US$58m). Despite the recent disaster, which its own spokespeople assured locals was impossible, there are no signs the government will scrap its plan to turn the entire peninsula into a vast chemical processing zone. By April 10, the villagers evacuated from Gulei after the explosion had mostly returned home, eager to return to their crops and to feed their farmed abalone. However, how long they can sustain their old livelihoods remains unknown. “After the explosion, we dare not eat any local seafood, for fear of marine pollution,” Zhang, the Zhangzhou city resident, told NewsChina in a recent telephone interview. “The seafood market has suffered, and everyone is complaining, hoping the PX plant will be relocated, but no one dares to speak up.” 

December 13-14, 2007, a symposium was held by the Xiamen government addressing the PX project. Most city residents taking part in the symposium spoke against the project. The Ministry of Environmental Protection approved the Zhangzhou PX project in principle, with investment increased from 10.8bn to 13.78bn yuan (US$1.74bn to 2.2bn). May 8, 2009, the PX project started construction in Zhangzhou, and scheduled to be in operation by April 2012. In 2012, due to fluctuation in the international market price for raw materials, Zhangzhou PX presented a new Environmental Impact Assessment Report (EIAR) to the MOEP for approval. January 25, 2013, the MOEP called a halt to the Zhangzhou PX project and a penalty of 200,000 yuan (US$32,280) for launching construction without approval. February 2013, the new Zhangzhou PX project EIAR was approved by MOEP. June 2013, trial operations begin. July 30, 2013, minor hydrogen explosion of caused by cracked pipeline. April 6, 2015, oil depot explodes causing major conflagration. 21

cover story PX Chemical Industry

A Nasty Necessity

In spite of a favorable market, mass opposition to the PX chemical industry, exacerbated by a string of accidents, has embarrassed manufacturers and stunted growth By Wang Yan

araxylene (PX), a flammable liquid used in the production of polyester and other plastics, has become almost a household name in China since 2007. That year, citizens of the coastal resort town of Xiamen were credited with taking NIMBYism mainstream in China after demonstrations halted construction on a PX plant in the city’s downtown area, forcing the local government to relocate the project to neighboring Zhangzhou. Since then, the further construction of PX plants has proven resolutely contentious in China. Some proposed plants have encountered similarly strong public opposition and protests, including in the city of Dalian in August 2011, Ningbo in October 2012, and Maoming in April 2014. The other harsh reality, however, is that even as opposition has increased, China’s demand for PX has been growing steadily, with domestic production only able to meet less than 50 percent of the country’s needs.

Controversy

PX as a chemical compound is popularly perceived as being carcinogenic, with airborne exposure linked with harmful side effects. Once the Xiamen PX project was publicly announced in 2003, the view that PX is toxic aroused heated debate in cyberspace, leading to calls for the project to be located well away from human settlements. Zhao Yufen, professor from the Chemistry

Department at Xiamen University, who united over 100 members of the Chinese People’s Political Consultative Conference (CPPCC) behind a petition to halt the Xiamen PX project, stated that “PX is a dangerous chemical product with high carcinogenicity.” Most professionals in the field of chemical engineering have called for calm, claiming that PX is not as “terribly toxic” as publicly perceived. According to the US Agency for Toxic Substances and Disease Registry, shortterm exposure to high levels of paraxylene (PX) can cause irritation to the skin, eyes, nose, and throat, as well as breathing difficulties. Long-term exposure is believed to possibly cause harmful effects to the liver, kidneys and the central nervous system. Yet both the International Agency for Research on Cancer (IARC) and EPA have found that there is insufficient information to determine whether or not paraxylene is carcinogenic and have thus yet to classify the chemical as such. Cao Xianghong, academician with the China Academy of Engineering and chief engineer at the State-owned oil giant Sinopec said during an interview with China Central Television (CCTV) in 2013 that PX was a chemical substance of “low toxicity,” claiming that its most dangerous property was its high inflammability, with PX vapor’s propensity to explode on contact with a naked flame already well-documented. Others have simply stated that more chemical plants in China are an unavoidable

necessity, and that the country needs to learn to live with heavy industry. During a recent interview, Professor Lin Boqiang with Xiamen University told NewsChina that it is impossible for any chemical plant not to cause environmental pollution. However, he added that “it is not reasonable for the general public to be so afraid [of PX],” claiming that “due to first-rate domestic technology and industrial conditions, pollution is currently kept at a level acceptable to human health.” However, the trend to construct such controversial plants close to human habitation remains a major source of controversy. According to Yuan Dongxing, professor in environmental toxicology at Xiamen University, the linear distance between the average PX plant and its nearest city is kept at more than 70 kilometers in other Asian markets, including South Korea and Taiwan, but on the Chinese mainland this distance is cut to within 20 kilometers. While further research has proved that no legislation, either in China or elsewhere, specifies the distance that should be maintained between chemical plants and human settlements, activists do not see this as an excuse to construct such projects close to residential areas. According to an article in Caixin Weekly, some large international PX projects are constructed close to communities, with the author citing Exxon Mobil’s PX plant and its affiliated manufactory in Southampton, UK, which is only 100 meters away NEWSCHINA I June 2015

from the closest private residence. In Ohio, a PX plant owned by Sunoco is located two kilometers from its closest town, while the PX plant on Jurong Island in Singapore is located four kilometers from nearby residences.

NEWSCHINA I June 2015

Officials attend the launch of the PX chemical project in Xiamen’s Haicang District, November 17, 2006

Photo by Xinhua

Since 2009, when China injected a stimulus package of 4 trillion yuan (US$570bn) into its economy to offset the effects of the financial crisis, the country’s production capacities in textiles, polyester, PTA and PX have all expanded considerably. In 2000, China’s PX self-sufficiency rate stood at 88 percent. However, as China became the world’s largest consumer of the chemical in 2012, the situation has changed, with annual demand for PX surging that year to about 13.85 million tons despite total production capacity of less than 8.8 million tons. Around 30 million tons of PX is produced globally each year, more than half of which is consumed by the Chinese industrial sector. In 2014, the country imported a total of 9.91 million tons of PX, an increase of 10.16 percent on the previous year, with the bulk of its supply coming from South Korea (37.8 percent), Japan (19.2 percent) and Taiwan (14.3 percent). “From both an industrial and a market perspective, China’s PX industry is facing an embarrassing situation,” an anonymous industry insider told the Changjiang Times. The same source claimed that China’s status as the world’s top producer and exporter of textiles and growing demand for synthetic materials had caused demand for PX to surge. Li Runsheng, deputy chairman of the China Petrol and Chemistry Industry Federation, believes that the country’s PX supply problem is a direct result of opposition to new plants. The government and enterprises are both tiptoeing around decisions related to the chemical, approving or postponing projects according to the public response. While, having afforded it status as a strategic resource, the Chinese government wishes to maintain a robust domestic supply of PX, the visceral public response to new plants has stymied development of the industry. “It is certain that the two PX plant explo-

Photo by Xinhua

Insufficiency

Some 100 Xiamen residents invited to take part in a two-day symposium on the environmental impact of the potential PX project to be built in Xiamen, December 2007

sions in Gulei [Fujian] will impede construction of new PX projects in China, and the future of the industry is not optimistic,” the anonymous source told the Changjiang Times. Industry figures are warning that a further fall in supply will drive up prices for

the chemical, threatening the long-term development of the low-profit Chinese PTA and textile industries. The price of PX is already edging upwards. On the Asian markets, the average price increased by 5 percent in a single day on April

cover story

PX Production Capacity Distribution in China

(Unit: 10,000 tons)

CNPC Urumqi Petrochemical Co.

CNPC Tianjin Petrochemical Co.

Qingdao Lidong Chemical Co.

100

Sinopec Luoyang Petrochemical Co.

100

Dalian Fujia Dahua Petrochemical Co.

140

CNPC Qilu Petrochemical Co.

CNPC Liaoyang Petrochemical Co.

70 Sinopec Yangzi Petrochemical Co.

85 Sinopec Jinling Petrochemical Co.

70 Sinopec Shanghai Petrochemical Co.

85 CNPC Pengzhou Petrochemical Co.

65 Sinopec Hainan Petrochemical Co.

CNOOC (China National Offshore Oil Corporation) Huizhou Petrochemical Co.

7, 2015 while the cost, insurance and freight (CIF) price for PX in China has increased by US$54 per ton to US$880, a 5.4 percent jump. Li Li, research director with ICIS Energy, a Shanghai-based energy consultancy responded to questions from China Daily reporters, claiming that the explosions at the plant in Gulei might cause the suspension of production, resulting in a further squeeze on the domestic market. Some foreign enterprises have eyed China’s

Dragon Aromatic Hydrocarbon Co., Ltd

160

large potential domestic market for PX as an opportunity to undercut their beleaguered Chinese rivals. So far, a total of 16 PX projects and 21 sets of refinery hardware exist in China, most under the control of the two State oil giants, China National Petroleum Corp and Sinopec Group. These two State-owned enterprises account for around 80 percent of China’s total PX capacity, and 10 new PX projects are currently scheduled for production, which will add 8 million tons of annual

Sinopec Zhenhai Refining & Chemical Co.

Sinopec Fujian Refining Ethylene Integrated Project

80 (Source: oilchem.net)

output. By contrast, according to industry data, some 10 million tons of PX production capacity will have been constructed, mostly in countries bordering China by 2015. South Korea alone is set to increase its total annual output to 5.2 million tons, almost double China’s current production.

Breaking the Ice

PX plants, like nuclear power plants, require huge volumes of water to function and transport their product, and are thus typicalNEWSCHINA I June 2015

PX Industry in China 1000

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NEWSCHINA I June 2015

(less than $31,000). “In Western countries, individuals can initiate litigation against polluters, and their victims can receive considerable compensation through legal means,” Professor Lin told NewsChina. “In China, no such channels exist.” China’s “embarrassing” failure to balance its industrial need for PX with the needs of urban communities is not caused by PX itself, but a lack of government transparency and a failure to assuage public distrust on behalf of businesses and local authorities. As things stand, local communities are completely excluded from the decision making process, with governments keen to secure better GDP figures backing industrial projects while making every effort to silence dissenting public voices. Even when officials give in to public pressure, the eleventh-hour cancellation of such projects is a wasteful and avoidable outcome. To break this deadlock, experts are calling for improvements to the government management system, environmental supervision and legal protection. “The government should not lightly abandon a promising project, but instead openly and actively communicate with the general public on issues relating to PX production, including punitive action and compensation in the event of an accident,” Lin told NewsChina. He added that the “reasonable distribution and layout” of PX projects across the country is “necessary,” with the key being to avoid concentrating too much production capacity in a single area. China’s industrial development requires a healthy supply of PX. In such cases, in China at least, the interests of industry typically trump those of the general public. However, unless manufacturers and the government can confront trust issues head-on, anyone seeking to build a PX plant in China, particularly given the recent explosions in Gulei, faces a long, protracted battle with the public.

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Production Output Import Export (Source: oilchem.net)

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ly built in coastal regions or along big rivers close to economically developed cities with large populations. But as environmental pollution caused by heavy industry continues to threaten public health in China, popular protest, usually a rarity in the country, has become a hallmark of any new industrial development situated close to residential areas. Moreover, PX refineries have shown to be notorious for explosions and fires; even before the recent PX plant explosion in Zhangzhou, fires were reported at PX refineries in Huizhou, Dalian, Liaoyang and Shanghai. Despite the question mark over its toxicity, the impact of PX plants on general environmental pollution is largely dependent on government supervision and the willingness of enterprises to maintain safety standards. While some may operate responsibly, the proximity to human habitation and major waterways means just one disaster could have massive ramifications for entire swaths of the country (see “Toxic Time Bomb,” NewsChina, October 2010, Vol. 026). The technology adopted in China’s PX industry in China is reported by insiders as being state-of-the-art, but implementing additional environmental protection measures inevitably raises costs. “The real problem lies with supervision,” commented Professor Lin Boqiang. “Setting standards, reinforcing environmental protection law and regulations and enforcing them can be effective in preventing further accidents.” In many Western countries, the poor management or construction of chemical plants, if discovered, typically incurs stiff penalties, with compensation for pollution or other damage to residential areas often astronomically high. In China, however, even major industrial accidents often result in tiny fines for the companies involved. For example, a massive oil spill from offshore wells operated by ConocoPhillips in China’s Bohai Bay area in 2011 only resulted in fines of 200,000 yuan

People wearing masks gather to oppose the construction of a PX plant by China National Petroleum Corp (CNPC) in Kunming, Yunnan Province, May 4, 2013

society

Food Safety

Going Public

An academic NGO has published China’s first overview of the country’s ongoing food safety problems. Their aim is to give ordinary, scandal-weary Chinese information about what is, and isn’t, safe to eat By Ma Jing

published by Jilin University Press in March 2015 at the team’s own expense. While only 200 hard copies of her work rolled off the presses, Chen put a digital version on the website of Yueyaduo, a grassroots food safety research center established by her team of some 20 volunteers, none of whom are food safety professionals. “China has plenty of food-related research institutions, but food [safety] problems still abound,” Chen told NewsChina. “We’re just trying to find a solution to address these problems from an amateur’s point of view.”

Photo by dong jiexu

Start-up

Chen Qiaoling (center) and her team at Yueyaduo

hen Chen Qiaoling first began to write China’s Compiled Food Safety Incidents, nearly everyone around her voiced their disapproval. Their reason for skepticism towards her project was unanimous: “Nobody will care to read it.” Chen’s finished book, 26 chapters in length, took Chen, an MBA student at Tsinghua University, along with her research team, more than two years to finish. China’s Compiled Food Safety Incidents was

Yueyaduo came into being entirely by chance. In April 2012, when Tsinghua University was celebrating the 101st anniversary of its founding, Chen, then a second-year MBA student, found herself seated beside management graduate Chen Hongrong at a commemorative event. While making small talk about her job prospects, Chen Qiaoling mentioned that what motivated her to study at Tsinghua was her dream to buy a big apartment in Beijing, and a fancy car, after graduation. Chen told NewsChina how her new acquaintance’s disappointment at hearing this was “palpable.” Instead of lauding her stated goals, Chen Hongrong remarked that “as a Tsinghua graduate, you should aim higher, have more spiritual pursuits, and take more social responsibility.” The conversation quickly turned to China’s litany of environmental problems, and then on to food safety, with both parties agreeing that something needed to be done to safeguard public health. Several months later, Chen Qiaoling suspended her studies at Tsinghua and established the Yueyaduo food safety research center with NEWSCHINA I June 2015

Chen Hongrong, who declined to be interviewed for this article. Their mission statement included a bid to raise public awareness of food safety while simultaneously providing solutions to farmers and food manufacturers who wanted to enhance the quality of their products. As Yueyaduo’s first published study, China’s Compiled Food Safety Incidents is being touted as the first major overview of food safety scandals that have affected China’s consumers in recent years. Chen initially aimed to write 50 chapters, but due to staff and funding shortages only managed to publish 26. Each chapter has a specific theme including the impact of water pollution on food, unhygienic food processing practices, and the fatal consequences of adulterating infant formula with chemicals – all themes corresponding to various public outcries in the last decade. “I am fully aware that present efforts cannot solve these problems immediately,” Chen told the official Xinhua News Agency. “My hope is that this record will offer insight into what has happened, and where the dangers are.” Chen said that she was inspired to continue with her research by the story of Harvey Wiley, who caught the attention of the American public and the US government through his research into fraudulent practices in the US food industry; research which contributed to the signing of the Pure Food and Drug Act of 1906 and ultimately the creation of the US Food and Drug Administration. “I think China needs someone like [Wiley],” Chen said.

Immersive

During their two-year research project, Chen and her team visited hundreds of food enterprises, farmers, street vendors and restaurants in nine Chinese provinces to compile a record of how many actually adhered to national food safety standards. Rather than seek to uncover new food scandals, the team’s goal was to better inform the Chinese public about their food choices. Constant exposure to lax food standards has made Chen sensitive to the color, odor and ingredients used in everyday foods. Born into a rural household in Shandong Province, Chen has witnessed first-hand how the weak implementation and the non-adherence to nationallyset food standards, particularly in small-scale enterprises and on farms, is sustained by a combination of ignorance of these standards and a need to reduce costs. “We realized that food safety is a complicated social problem,” Chen told the Chinese daily newspaper Global Times. “It involves a number of issues, including soil and water pollution, agricultural produce standards, logistics and public honesty. From an economic perspective, we wanted to find out what motivates food manufacturers and farmers to tamper with food, and possibly provide them with solutions and incentives not to cheat consumers.” Wang Xianzhi, a food safety expert with China’s Economy and Nation Weekly told NewsChina that in the summer of 2014, Chen Qiaoling brought a copy of her manuscript to him and asked for his advice about publishing it. Wang claims he only offered her one piece of

NEWSCHINA I June 2015

Yueyaduo members visit a restaurant kitchen to check its compliance with national food standards

advice. “Make sure every source of data is correct and reliable.” “For college students to voluntarily set up this organization to raise the public’s awareness of food safety is something that deserves encouragement,” Wang added. Chen’s team, most of whom are Tsinghua students, studied and reviewed all the media reports and academic papers that they had mentioned in their book to ensure its accuracy. However, while they comprehensively fact-checked all their research, not one of them expected that a book on food safety would gain widespread public and media attention. To their surprise, on March 8, 2015 Cui Weiping, a professor with the Beijing Film Academy, mentioned China’s Compiled Food Safety Incidents on her microblog account, which sparked a surge in demand for copies. Shortly afterwards, Chen and her team were surprised to receive a telephone request for several hard copies of their book from China’s Food and Drug Administration, the country’s highest food standards authority. Chen told NewsChina that China’s Compiled Food Safety Incidents is “just the beginning.” Her team is now preparing to publish a series of books related to food safety, including a study of China’s nascent organic food industry, until a direct platform linking food producers and consumers can be established in China. Chen has only recently resumed her studies at Tsinghua, and is now trying to recoup some of the 100,000 yuan (US$16,140) of her own savings that she spent on her book. She told our reporter that she has made addressing China’s food safety problems, which she sees as being social rather than technical, a worthwhile long-term career goal. “Previously, I was happy with the returns of my own work,” she said. “But now I am trying to create some social value in the area of food safety, even if mine are only minor steps.”

society

Online Lottery

Swept Stakes

China’s growing lottery craze could sputter as authorities clamp down on online ticket sales in order to curb ‘rampant irregularities’ By Min Jie

hina’s Ministry of Finance (MoF) issued a joint directive with seven other agencies in early April to ban unauthorized online lottery ticket sales – a move, according to industry insiders, aimed at eradicating widespread malpractice among online operators and their agents and promoting a legal and licensed lottery industry. MOF statistics for 2014 indicate 382 billion yuan (US$57bn) total revenue in China’s lottery industry, a 73 billion yuan (US$11b) increase since 2013. It is estimated that some 40 billion yuan (US$6bn) worth of lottery tickets were bought online in China last year. Despite such healthy sales figures, of 400 Internet enterprises reportedly involved in the online lottery business, only two were licensed under a pilot government program – 500.com and sporttery.cn. Even in the case of these two companies, the government had only licensed them to engage in business relating to the sports lottery so far, not one online business has been approved for involvement in the national welfare lottery – the Chinese mainland’s only other legal gambling outlet.

Overhaul

According to the new government directive, which requires all provincial authorities involved in finance, civil affairs and sports to conduct investigations into unauthorized gambling activities, some Internet companies have been selling “fraudulent lottery tickets.” This latest campaign began on January

15, 2015, when the MoF and other agencies issued a notice asking Internet companies selling lottery tickets to carry out “selfcorrection” and deliver a formal report before March. Major Internet enterprises including Alibaba, Tencent and Netease all suspended online sales of lottery tickets starting in February. Since April 4, the first day after the suspension announcement was made, 500.com also halted its online service. Two days later, the company’s shares stopped trading on the New York Stock Exchange. According to Su Guojing, founder of China Lottery Industry Salon, a quasi-industrial association, China’s lottery business was regulated by three government agencies: the MoF, the Ministry of Civil Affairs and the General Administration of Sport. “The latest announcement shows the government’s determination to reform the lottery sector, especially through the involvement of law enforcement agencies including the public security as well as industry and commercial departments,” Su told NewsChina. “Previous regulations issued by these three agencies lacked a clear and detailed outline, resulting in many gray areas that could be manipulated by Internet lottery companies,” he added. Complaints and scandals surrounding online sweepstakes have been rife as reports emerged that some online lottery companies held on to their customers’ money rather than using the funds to enter sweepstakes. According to media reports, a customer in

Guangdong who found they had won a 5 million yuan (US$800,000) grand prize failed to receive their payout because the online subscription order was not filed by an Internet company in time to claim the winnings. Su Guojing told NewsChina that some Internet agents even refrained from issuing lottery tickets to their customers, instead providing fake ticket numbers after receiving their money. He added that small prizes are often paid to their winners in full, while payouts on big jackpots are completely withheld, with the company, typically a small Internet enterprise, claiming that “because of technical errors, the tickets failed to be issued.” Wang Xuehong, director of Peking University’s lottery research institute, said online sales of lottery tickets have a number of problems because it is difficult for buyers to distinguish legal websites from illegal ones. “Once money has changed hands, it’s impossible to know whether a website will actually buy [your] lottery tickets,” Wang told the official Xinhua News Agency. Li Jian, founder of lottery consulting agency Caitong Consulting, told our reporter that there is speculation that the government may set up a separate government agency such as the “National Lottery Development Bureau” to take charge sector under the supervision of China Banking Regulatory Commission. Li added that the new regulation was set up partly due to the auditing of lottery funds in 18 provinces. Under the current rules, 50 NEWSCHINA I June 2015

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Winners of big jackpots often go to extreme lengths to conceal their identities

percent of the funds raised by lottery ticket sales become prizes, 35 percent contribute to the central government welfare fund, and 15 percent pay the expenses of appointed lottery organizations. Reports emerging from the National Audit Office in recent years showed that the misuse of these latter funds has abounded.

Prospects

In 1987, the China Welfare Lottery was set up in the wake of the establishment of the China Welfare Lottery Management Center (CWLMC), its regulatory body. Ticket sales revenue in the first year of operations hit 17.4 million yuan (US$2.4m). In 1994, the China Sports Lottery appeared on the market, with the China Sports Lottery Management Center (CSLMC) charged with the issuance, printing and management of sports lottery tickets. Over the years, online ticket sales have been gaining popularity, particularly in recent years as a growing number of people have seen winning one of the two national lotteries as a chance at a better life. MoF data shows that in the first two months of

NEWSCHINA I June 2015

2015, 64 billion yuan’s (US$10bn) worth of lottery tickets were sold in China, year-onyear growth of 35.8 percent. According to the 2014 Online Lottery Sales Report published by Caitong Consulting, total revenue from online ticket sales in 2014 hit 85 billion yuan (US$13.7bn), double the figure in 2013, including 38.5 billion yuan (US$6.2bn) or 45.3 percent of tickets that were purchased via mobile devices. With annual growth in its mobile sector hitting 80 percent, the industry could not ignore the contribution made by online ticket sales. Under the existing sales structure, CWLMC and CSLMC, under the Ministry of Civil Affairs and the General Administration of Sport, were directly responsible for the supervision and issuing of lottery tickets, with provincial and city authorities responsible for distribution. However, the appearance of online channels circumvented this top-down arrangement. “Next to the lure of profits, regulations without legal backing were nothing but waste paper,” a senior manager at an online lottery ticket sales company, speaking on condition of anonymity, told NewsChina.

This is not the first time the central government has tried to wrest influence away from the unregulated online lottery market. Since 2007, online sales of lottery tickets have been suspended four times. The responsible companies, however, tended to suspend business and simply resume sales after the dust had settled. In 2012, to restore the credibility of online lottery ticket sales, 500.com voluntarily halted sales for a full year, only resuming operations after being approved under an MOF pilot program. The cost to the company was huge – net profits dropped from 13.5 million yuan (US$2.2m) in 2011 to 4 million yuan (US$645,200) in 2012, according to the company. Since resuming business, 500. com has also withdrawn from sales of welfare lottery tickets. Since business was suspended in April, industry insiders agree that there is no specific time frame for the resumption of sales. On April 7, representatives of 500.com told Chinese media that the company has been cooperating with the CSLMC to develop its online sales system and, when the new system is unveiled, the company will apply to MOF to reopen its sales channels. According to Li Jian, before online sales can resume, several industry-wide changes need to be made, including the establishment of a supervisory management system, the alignment of the currently distinct welfare and sports lottery sales systems and final adjustments to the entry requirements to the industry for online companies. Li added that this year’s “strictest suspension” would prove to be a turning point for China’s lottery sector, and was in the best interests of most companies working in this industry. “Online lottery tickets sales is nothing but another sales channel in China today,” Li told NewsChina, adding that lottery tickets, whether sold on- or offline, are “exactly the same” and thus coordinating the two channels is an “urgent task” for the supervisory authorities. “The development of an exclusive online lottery would be a priority,” he added.

society

Soccer Reform

Own Goal

The Chinese government has launched nationwide reform of the country’s soccer apparatus to a mixed reaction from the sports world and the public By Xie Ying

hile China may not be known as much of a soccer nation, a State-level roadmap for systemic reform of the country’s soccer apparatus – allegedly personally backed by President Xi Jinping – was recently unveiled, with the stated goal of “pushing Chinese soccer teams into the World Cup and the Olympic Games.” The reform, which fans and those associated with the sport have been advocating for many years, aims to spin the China Football Association (CFA) out from full government administration – a structure that many believe to be the cause of all the major problems in

Chinese soccer – while improving professional leagues and promoting the sport among children and young people nationwide. Overnight, soccer has become a buzzword online and offline, much to the excitement of soccer fans and pundits, many of whom had lost confidence in the country’s soccer apparatus. Many exclaimed that the reform has brought “a new spring” to Chinese soccer, and are already predicting to see the national team make moves on the global stage. The reform also provides an opportunity for local governments to get closer to the central administration. Immediately after the reform NEWSCHINA I June 2015

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Elementary school students in Zhejiang Province use soccer balls as part of an exercise routine, March 26, 2015

program was announced, regions across the country began building soccer fields, releasing soccer-related publicity campaigns, and holding matches in schools and even kindergartens. Meanwhile, controversy was growing too, with many experts and critics wondering whether the campaign would be just an easy way for local officials to rack up performance statistics, or, at worst, an ill-advised, disastrous waste of funds.

De-administration

In the sports world, there is a general wariness of any reform de-

NEWSCHINA I June 2015

scribed as a “nationally sweeping” campaign, a term generally linked to clunky, government-sponsored administration programs. As early as 1992, the Chinese government launched its first reform program to carry out the “de-administration” of soccer, announcing it would “marketize” the sport by setting up a system of professional leagues. While the reform resulted in a number of new leagues and clubs, and injected fresh blood into the soccer industry, it failed to bring about any improvement in the fortunes of the national team. In June, 2008, the Chinese national team once again failed to qualify for the World Cup, outraging a great many Chinese fans

society

Photo by ic

and experts. Amid an outpouring of venomous criticism, the General Administration of Sport of China (GASC) attributed the national team’s poor performance to the “marketized” system, and appealed for Chinese soccer to be placed back under government administration. This resulted in an outcry among experts and insiders, especially the professional leagues and clubs. “The source of the problem did not lie in marketization, but in ‘half-marketization,’” Yang Zuwu, then manager of Beijing Guo’an Football Club, told the media. “Due to heavy government interference, Chinese soccer was far from selfA soccer team from a county-level elementary school in Shandong Province management and operation,” he added. takes a rest after training, March 19, 2015 Over the years, there have been numerous media reports – and even books – released about official corruption in Chinese soccer, with repeated accusations of wrongdoing. In 2010, Nan Yong, former soccer management director of GASC, and Xie Yalong, for- A Great Leap For Soccer? mer deputy president of CFA (2005-2008), were detained for fixing A major reason that many people support upgrading soccer develsoccer matches and taking bribes, triggering calls for the purification opment to the State level is that they believe that China’s professional and streamlining of management in the Chinese soccer system. leagues and clubs spend most of their funds on top-level players for Given the mistrust of soccer officials in the industry and among quick profit, while ignoring lower-level ones. Meanwhile, few of them the public, it is understandable that “de-administration” has been have shown any interest in improving the country’s soccer education. made a highlight of the new reform program. The roadmap will see Hebei Province, for example, was once criticized by domestic merenowned experts and other non-governmental personnel included dia for its soccer development campaign, which some compared to in the revamped CFA, and will prevent anyone with an official CFA the disastrous Great Leap Forward industrial reform campaign of the title from taking up a leadership position at any professional league late 1950s and early 1960s. Local clubs paid top dollar for popular or club. players, driving developing players out of the province or away from “Our analysis and research while drawing up the roadmap have the game altogether. Short of money, the clubs, according to media told us that a ‘nationally sweeping’ system [purely administered and reports, have broken their promise to train young talent and build sponsored by the government] is no longer suitable for Chinese soc- more soccer facilities. “I now only have 12 million yuan (US$1.9m) to train young playcer. The reform is not a return to the old path,” Cai Zhenhua, deputy ers, which is nowhere near enough. I cannot even find any proper director of GASC, explained to State broadcaster CCTV. However, for many, the use of the loaded term “nationally sweep- land for a training field,” Lin Weiguo, director of the young player ing” in the roadmap undermines the government’s stated goal of dial- training department of CFA, told NewsChina in 2014. “Chinese soccer has actually benefited little from government adminising down administration – while the roadmap does aim for increased marketization, it continues to emphasize that government administration since the 1992 reform. The latest roadmap will bring more space tration is needed, and demands that the reform take advantage of for grassroots development of Chinese soccer,” Ma Dexing, a well-known sports journalist based in Beijing, told NewsChina. both.

NEWSCHINA I June 2015

“I don’t think [government administration and marketization] are contradictory. Chinese soccer can hardly develop without government support, especially financial assistance,” he added. As Ma expected, the 2015 reform has indeed placed heavy emphasis on soccer education. The Ministry of Education announced that it will make soccer class mandatory at 6,000 schools nationwide. By 2025, China, according to the roadmap, will be home to around 50,000 “soccer schools” – regular schools with a strong soccer pedigree – with over 50 million students. To respond to such a grand plan, many local governments are now dedicating themselves to opening soccer schools, recompiling soccer textbooks, selecting young soccer players and promoting professional leagues in regional elementary, middle and high schools, only to find themselves criticized for what some see as short-sighted, heavy-handed methods. The criticism came to a peak following news that Zhejiang Province had set up professional leagues in several experimental kindergartens, and that Shandong Province had allegedly planned to suspend college basketball and volleyball leagues to devote more resources to soccer, though the latter denied the claim. “It seems that the reform has become a way of sucking up to the central government. So, what will [local governments] do if the next NEWSCHINA I June 2015

Photo by Xinhua

Students at a county-level elementary school in Shaanxi Province play in a local league soccer game, April 13, 2014

[central government] leader loves basketball?” quipped a user on Weibo, China’s Twitter equivalent. Yao Ming, the former basketball star, expressed similar worries during an interview with Xinhua News Agency. “If we develop soccer at the cost of other sports, we might lose both,” he said. “A few mistakes or a couple of detours are excusable in the course of reform, but we should never pursue quick success,” he added. The Ministry of Education has refuted this accusation. In an online public discussion with netizens, the ministry’s sports and arts director Wang Dengfeng pledged to take the plan step-by-step, and will not make soccer a compulsory part of any entrance examination for higher education. His words, however, failed to persuade parents whose children are not naturally talented at or fond of soccer. “Even if soccer assessments are [in Wang Dengfeng’s words] ‘just a reference,’ they might influence my son’s final appraisal if other candidates of the same standard are better at soccer,” Hu Haibo, a 38-year-old Beijing resident, told NewsChina. A die-hard soccer fan, Hu said that he feels very glad that the government cares so much about soccer, but while he looks forward to cheering for the national team in the World Cup one day, he cares more about his son’s freedom to “choose the sport he likes.” Meanwhile, since a group of Chinese soccer fans rioted on the streets of Beijing after the national team was beaten by Hong Kong in a qualifying match for the 1986 World Cup, soccer in China has always been heavily linked to nationalism – a legacy echoed in the reform roadmap, with the frequent inclusion of terms like “a national dream” and “a strong country of sports.” “It is quite narrow-minded to set ‘winning matches’ as the objective of reform. The final objective of sport reform should be to popularize it among ordinary people and push it into the free market,” Yan Qiang, a columnist of Financial Times, wrote in a commentary. “Though the CFA will no longer be related to the government, as stated in the roadmap, they and local governments will have easier access to resources thanks to the State-level reform. If some relevant officials misuse their power or unreasonably allocate resources for the sake of performance or bribery, there will be a ‘Great Leap Forward effect,’” warned a commentary from Xinhua News Agency.

Russian Investment Promotion in China

Construction on a bridge spanning the Heilong (Amur) River between China and Russia has so far only begun on the Chinese side, March 25, 2015

Eastern Promise

Photo by cfp

international

Russia is stepping up efforts to tap the Asia Pacific region to make up for lost ground in European markets. Chinese investors, however, remain hesitant when responding to business overtures from the Russian bear By Xu Fangqing and Li Jia

ou Wanlong, a Chinese trader from Heilongjiang Province, has been doing business in eastern Russia since the 1990s. He has been impressed by the frequent visits to China by Russian Far Eastern officials, and the return visits of Chinese business delegations at the invitation of Russia since early 2015. “Russia used to be lukewarm about China’s enthusiasm towards trading with Russia, but now seems to be more eager than China,” he told NewsChina.

This change of heart is widely thought to stem from Russia’s economic difficulties following both US and EU sanctions slapped on Moscow after its annexation of Crimea in March 2014, plus a steady fall in the global price of oil – the main contributor to the Russian exchequer. Even before the onset of this recent economic crisis, turning east was already on President Vladimir Putin’s agenda. In May 2012, the Ministry of Development of the Russian Far East was created by the Dimitry Medvedev cabinet. Until the Ukraine crisis,

however, progress in this area was slow. As Russia’s largest neighbor, boasting decades of rapid economic growth, China is regarded as a big business partner. Russian Prime Minister Dmitry Medvedev noted at a meeting in early 2014 that Russia could draw on China’s experience in setting up special economic zones to attract foreign investors. New legislation introduced by the Kremlin and put into effect in April 2015 would grant tax incentives, faster administrative approval and infrastructure improvement in NEWSCHINA I June 2015

such zones, all of which were major tools of China’s Reform and Opening-up. This does not mean that a gold rush is on the horizon. For Asia Pacific investors, including those from China, Russia’s Far East remains a precarious option, not least due to potential competition from other AsiaPacific companies welcomed in to diversify the risk of Moscow becoming too reliant on funds from China.

New Momentum

Russia has placed high hopes in its eastern regions not only lifting the country out of its current economic difficulties, but also improving the market strength of its nonraw materials industries. Yury Trutnev, Russia’s Presidential Plenipotentiary Envoy to the Far Eastern Federal District, explained at a press conference in October 2013 and in a recent interview with Russian magazine Kommersant Vlast that the Kremlin’s primary vision for the country’s Far East is to build a localized, export-oriented manufacturing economy in situ, rather than shipping natural resources 9,000 kilometers back to the densely populated “European” part of the country. President Putin held a meeting on April 3 to urge ministers to “use to full effect” the new laws designed to attract investment in the country’s Far East. Putin has repeatedly stressed the importance of turning the current challenges imposed by Western sanctions on Russia into an opportunity to speed up Russia’s import substitution strategy and boost both domestic consumption and employment. The Far East, and its growth potential (according to President Putin, the area showed far higher industrial and agricultural output than the national average in 2014), figures heavily in this grand plan. China is regarded as both a good example to follow and a business partner with enormous potential yet to be tapped. Currently, bilateral trade is only one-sixth of that between China and the US. In December 2014, Trutnev led a delegation including a number of senior officials from the Far Eastern Federal District on a visit to Beijing, where they highlighted proposed tax reduc-

NEWSCHINA I June 2015

tion policies to 33 corporate executives from big State-owned and private Chinese companies. Trutnev agreed with analysis comparing Russia’s Far East to the Special Economic Zone (SEZ) of Shenzhen, the first major proving ground for China’s Opening-up in the early 1980s. Three priority development zones in the Far East, based on a concept similar to China’s SEZs, have been approved so far, with 20 scheduled for completion before the end of 2015. Since Trutnev’s visit, officials from Russia’s Far East have become known for their promotional activities in China’s northeastern provinces of Heilongjiang, Jilin and Liaoning. Thousands of Chinese officials and businesspeople have also been invited to return such visits, particularly in the light of Chinese ambitions to link Asia with Europe through a number of routes, including one through Russia. On April 13, 2015, Heilongjiang Province, which shares more than 3,000 kilometers of land border with Russia and accounts for one fourth of bilateral trade, unveiled a plan for a network of railways, ports, airports, roads, bridges, power lines and telecommunication cables in place to build an economic corridor connecting Russia, China and the EU.

Beyond Taxes

In his recent article in Russian daily newspaper Kommersant (“The Businessman”), Alexander Gabuev, head of the Russia in the Asia-Pacific Region Program at the Carnegie Moscow Center, noted that Russia needs to show investors how its new priority zones in the Far East are different from existing special economic zones in Russia, as investors face the problem of small market size and high cost of labor cost due to the Russian Far East’s small population, a problem that tax breaks alone are unlikely to solve. The Russian government is struggling to implement a new policy encouraging Russians to move to the underdeveloped Far East by granting plots of free land. For Chinese investors like Mou Wanglong, making Vladivostok, Russia’s largest Pacific port, open-access as was proposed by Presi-

dent Putin at the end of 2014, holds more appeal than the establishment of new priority zones. A more relaxed visa system and specialized parks dedicated to tourism, science and industry are reportedly slated for construction in the area. Doubts, acknowledged in Gaubev’s Kommersant article, about diverting attention away from natural resources and towards hitech investment, refuse to dissipate. Indeed, investor uncertainties are compounded by delays in officially announcing details of the Vladivostok plan. In addition, erratic bilateral commodities trade activity in Russia’s Far East since the second half of 2014 caused by dramatic fluctuations in the Russian currency has led to the current unfavorable situation in which, according to Mou, “the market has nearly frozen.” While eager to court Chinese investment, Russia remains wary of an excessively strong China presence, with some media outlets warning this will indicate to China that Moscow has nowhere else to turn. In his recent interview with Kommersant Vlast, Yury Trutnev answered such concerns by stressing the importance of both securing Chinese investment while seeking to “work with everyone” in the Asia Pacific region. On April 13, 2015, Dmitry Medvedev and his Vietnamese counterpart Nguyen Tan Dung, meeting in Hanoi, agreed to sign an FTZ agreement by mid-2015 between Vietnam and the Eurasian Economic Union (EEU) which includes Russia, Armenia, Belarus and Kazakhstan, with Kyrgyzstan scheduled to join soon. This will be the EEU’s first FTZ with a foreign country. On April 15, Medvedev offered the same opportunity to Thai military leaders during a visit to Bangkok, while the Russian International Affairs Council declared in May 2014 that South Korea was “Russia’s most promising partner for technological and investment cooperation in the Far East.” For Russia and China, two neighbors with a long history of both cooperation and conflict, adaptibility will prove essential going forward. In trade, as in politics, money matters, but never defines everything. 

economy

Free Trade Zones

Helicopter Parenting Will more free trade zones help or hinder Chinaâ&#x20AC;&#x2122;s efforts to stop local governments from luring investment with special treatment?

Customers at a duty-free shop in the Shanghai Free Trade Zone

NEWSCHINA I June 2015

Photo by zhang peng

By Li Jia and Min Jie

he maxim “Don’t let your children lose the race of life at the starting line,” all too familiar to Chinese parents, is often used to justify forcing children into advanced education ahead of their time. Chinese local officials, generally regarding local markets as their brainchildren, are equally competitive when vying for a head start – getting an early spot on the list for a trial reform project means earlier access to favorable fiscal treatment and the regulatory framework, and a better chance of winning the GDP race. Unsurprisingly, the “on your mark” call in the latest round of China’s ongoing reform has effectively set the competitors off at full pace. On March 24, 2015, the central government approved three new free trade zones (FTZs) – in Fujian, Guangdong and Tianjin – as well as the expansion of the existing Shanghai FTZ established in October 2013. Aiming to promote business and liberalization of trade, these new FTZs are in line with the goal of this round of reform set by the Party: giving the market the “decisive role” in resource allocation. While this second lineup of FTZs have just hit their stride, wouldbe candidates for an as-yet unconfirmed third set are already warming up – Chongqing, Qingdao and Guangxi have submitted their respective applications to the State Council, and a number of others are preparing to follow suit. Analysts have warned that the outdated method of offering favorable policies is the cause of the fad, which even repeated proclamations from the central government that FTZs are about “reform dividends” rather than “favorable policy dividends” have failed to quell.

FTZ FoMO

In the detailed blueprints for the new and expanding FTZs disclosed on April 20, 2015, their geographic locations fitting into the strategic national economic landscape are highlighted: Tianjin will become the first free trade zone in China’s northern area, playing a crucial role in the economic integration of Beijing, Tianjin and underdeveloped Hebei Province. Fujian, the closest mainland province to Taiwan, will focus on cross-strait trade ties. Guangdong will ramp up her already lively economic cooperation with Hong Kong and Macao. The Shanghai FTZ will triple in size, making the city a test ground for international finance and a renewed thrust to prosperity along the Yangtze River. These prospects, if realized, are also expected to serve China’s vision for the One Belt, One Road initiative, linking Asia and Europe by both land and sea. Besides their locations, the four (three new, one expanded) prospective FTZs’ relatively developed markets make them strong candidates. Within their collective borders lie nearly half of the first cities that opened to foreign capital in the early 1980s, where private and foreign investment enjoyed an array of favorable policies, particularly lower taxes and cheaper rent. This provided the boost for each city’s respective take-off, and each has been hailed as an example for the rest of the country to follow. As China pushes on with reform, the chance to be an early adopter of a certain trial project has become a feather in

NEWSCHINA I June 2015

the cap of local governments, be it a hi-tech industry park, rural land exchange or financial deregulation. Rumors and clarifications about who has made the cut have been known to cause related stock prices to skyrocket or nosedive, a phenomenon described by investors as “map-based speculation.” Unsurprisingly, underdeveloped areas are the most enthusiastic about joining the FTZ club by stressing their geographical importance. On March 31, 2015, the Sichuan provincial government announced its roadmap to establishing China’s first hinterland FTZ in Chengdu, which included a bevy of mega-projects in logistics, ecommerce, manufacture of autos and robotics, as well as investment promotion events in the US and Europe. The next day saw Wuhan, capital city of Hubei Province, attempt to accelerate their application process by applying Shanghai-inspired changes in their existing hi-tech parks sooner than the central government required. Hubei’s neighbors, Jiangxi, Anhui and Hunan provinces, all in central China along the Yangtze River, are considering a joint application with Wuhan. In the far-flung northwest, Ningxia, with the country’s largest population of Hui people, Chinese-speaking Muslims, is still awaiting the central government’s decision on its proposed FTZ with countries on the Arabian Peninsula. Inner Mongolia wants a border FTZ with Mongolia, while Heilongjiang has been preparing for one with Russia since late 2013.

Cloud of Doubt

Since the establishment of the Shanghai FTZ 18 months ago, free trade zones have been the subject of much debate. Before it can be considered for an FTZ-upgrade, a place is expected to have a certain standard of foreign trade, and the facilities that entails. Cheng Bo, secretary general of the FTZ Institute at Shanghai University of Finance and Economics has doubts about the feasibility of inland FTZs. “Foreign trade in a big city there can be dwarfed by that of a second-tier coastal city,” he told NewsChina. In addition, most places that have declared FTZ ambitions do not even have well-developed bonded zones, the basic infrastructure of any FTZ. Given this, more doubts have been cast on what really lies behind the FTZ fever. The Shanghai FTZ is part of the central government’s plan to fuel stagnant reform using the pressure brought by openness, rather than a simple play to attract foreign investment, as previous special zones have been designed to do. The focus is on wider market access and less red tape, not favorable fiscal grants. Immediately after the Shanghai FTZ launched, at least 20 cities and provinces immediately declared their plans to follow suit. In a June 2014 interview with Outlook Weekly, a magazine under the national Xinhua News Agency, Zhang Yansheng, secretary general of the academic committee of top macroeconomic planning body the National Development and Reform Commission, said many applications had little more value than “the old idea of building parks.” The “parks” he referred to, be they “hi-tech parks,” “development

economy

zones,” or “industrial parks,” have mushroomed across the country over the past few decades. As Cheng Bo explained, most were designed to attract certain industries by offering fiscal or financial incentives, such as tax rebates and lower interest rates. Places with no such parks often use local public budgets to compensate enterprises as a disguised way of tax rebates. “Many local governments still want dividends from the special policies granted by the central government, rather than the reform,” Cheng said. Besides visible public money, whether granted by the central government or doled out from local public funds, local governments use a number of invisible – yet more important – tools as they compete to woo investors. In some places, large private companies paying more taxes have been put on local so-called “protection lists,” making them all but immune to local environmental, labor or food safety law enforcement agencies. Another problem is a much-criticized recent phenomenon that media call “luxurious business promotion,” lavishing public money on five-star hotels and grand banquets for local officials’ investment promotion tours, particularly on the overseas market.

Out of Favor

It is now widely recognized that this method of soliciting investment using “special treatment,” and even the very concept of local governments focusing on investment promotion, are neither business-friendly nor in the public interest, and both have lost favor with investors and policymakers. Most “parks,” whether self-styled or designated from on high, including those in areas with poor labor and infrastructure facilities, have been competing to attract similar industries, such as solar panels, biopharmaceuticals and animation. Enterprises lured by subsidized investment in those industries saw their businesses boom and bust rapidly. Some have ended up in the hands of property developers, or simply sitting idle. Since 2003, the Ministry of Land and Resources has had to launch a number of campaigns to recover misused or idle land in various industrial parks. Cases of enterprises on “protection lists” harming the local environment or ignoring labor laws are not rare. For investors, these problems have taken the shine off of parks. Mats Harborn, vice president of the European Chamber of Commerce in China (EUCCC) told NewsChina that places providing better public services, fairer law enforcement and sustainable public financing are much more attractive than those offering special treatment. Chinese enterprises are increasingly inclined to agree, often finding their hosts illequipped to honor their promises, but keen to squeeze what-

What is the value of China’s FTZs?

Tianjin Municipality in 2014 GDP size comparison: Greece Rank in China’s foreign trade value: 6th

Shanghai Municipality in 2014 GDP size comparison: South Africa Rank in China’s foreign trade value: 3rd

Fujian Province in 2014

GDP size comparison: Thailand Rank in China’s foreign trade value: 5th

Guangdong Province in 2014

GDP size comparison: Double that of Belgium Rank in China’s foreign trade value: 1st

NEWSCHINA I June 2015

ever benefit they can from the investor, often hampering operations. Those not on “protection lists” complain of unfair competition, even within the same area or park.

No Addiction, New Business

The central government apparently decided to kick away local officials’ special treatment crutch, and cure their obsession with investment promotion. In November 2014, the State Council ordered a stop to any illegal reduction of taxes and fees to local enterprises, to build a fair and open national market, a move widely regarded as the end of the era for many economic parks and zones. Despite very strong market expectations of favorable taxes and tariff policies in the Shanghai FTZ, none have ever materialized. In June 2014, the central government suspended reviews of any new FTZ applications to temper the FTZ fever, and approved the second batch of FTZs much later than expected. It has taken pains to emphasize that the FTZ project is all about reform, not gifts. In March 2015, a number of practices that have proven to work well in the Shanghai FTZ began to roll out throughout the country, focusing on streamlining corporate registration and operations. In March 2015, Shanghai announced that governments in certain towns under its jurisdiction, including those in the newly extended FTZ areas, would not take any responsibility for attracting outside investment – focusing instead on providing better public services, the very reason for having a government in the first place. Indeed, a shift toward public services can directly bring more tax revenue and jobs for local economies. While local officials have always tried to lure foreign companies into parks or zones, as Mats Harborn of the EUCCC explained, European investors see far more business opportunity in participating in improving the public facilities and services that originate from the growing demands of daily life in any society. At a press conference in Beijing on April 9, 2015, Harborn highlighted the interest of European companies in Beijing in turning waste, such as industrial sludge, into energy.

From the Top

This does not mean that the central government need only discipline recalcitrant local officials – change must also happen at the top. In March 2015, China’s Legislation Law was revised and the national legislative body took over the taxation legislation from administrative agencies, making it nigh impossible for the central government to grant special tax policies in future. Relevant laws and regulations were suspended under the approval of national and local legislation bodies before the Shanghai FTZ was in operation. This contrasted with the typical practice of China’s reform over the past decades, whereby the law was generally ignored in trial projects, and altered if the trial was a success. Now that an almost fully fledged legal system has been installed, respect for the law in any reform project has been made a

NEWSCHINA I June 2015

priority. Responsibilities are scheduled to be redistributed between the central and local authorities by 2016, so that local governments have fiscal resources proportionate with their jobs. The Party’s HR department has declared new standards, with GDP rates given less weight, and social standards counting for more. There are also doubts over the practice of testing reform policy in FTZs. “One can question perhaps whether China has come to the point where it would make sense, instead of creating special zones to develop new policies, to roll them out nationwide now,” said Mats Harborn. Professor Feng Xingyuan with the Chinese Academy of Social Sciences has long been researching competition among Chinese local governments. He does not think it necessary to test policies like financial liberalization and red tape reduction in FTZs, as they have long since been proven to work well in market economies the world over. In addition, restricting this freedom to FTZs is unfair to other places in the country, he said. Local governments are now eager to prove that they are transforming to “service-oriented” functions from investment-oriented ones, as required by the central government. While he believes it is good for local governments to compete in this regard, Professor Feng warned against a belief that the more services local governments provide, the better – the market and social forces should be at work. For example, public debate is necessary in growth planning. Business associations must be independent from the government. Products and services that can be provided by the market should be left to the private sector. These can only be made possible, he noted, by the Party’s commitments to more public participation in social governance, breaking off business associations from government agencies, and reform of Stateowned enterprises. In a wider sense, local economic growth models have long been regarded as part of national industrial policy. A number of cities have been designated as national demonstration bases for different sectors, including software outsourcing, modern agriculture and industrial upgrading. The central government has also announced plans to carry out regional economic integration. Professor Feng is concerned that these actions could disturb the flow of resources between markets in different areas. It is the responsibility of the central government, he stressed, to secure a unified, rule-based internal market where local governments have more autonomy and compete fairly. For example, local governments can decide local taxes within certain bands, but are not allowed to impose any discriminatory tariffs or restrictions on products from elsewhere. Chinese parents have begun to realize that giving their children a so-called “head-start” is no guarantee of success, and may even be a hindrance. If Chinese governments can stop “helicopter-parenting” and take a hands-off approach, perhaps local markets will learn to play amongst themselves, and grow up stronger and more independent.

economy

Chinese Cars

Shifting Gears

Can Chinese automakers step their game up before foreign and joint-venture brands solidify their dominance? By Yue Wei, Yan Guangming and Zhou Yao

n March 23, autohome. com.cn (ATHM), China’s most popular auto industry website, announced that it would no longer be using the somewhat pejorative term “domestic” cars, preferring instead “Chinese” cars, striking a chord with car manufacturers and industry experts. “The term ‘domestic’ has led Chinese customers to [feel compelled to] buy Chinese cars for the good of the country, but this is not how the market economy works. The new term will place Chinese cars on the same footing as foreign ones, which in my eyes, will be helpful to the development of Chinese cars,” Li Xiang, ATHM’s president, told NewsChina. While China is now the world’s biggest car market, Chinese-branded cars have seen a drop in their market share over the past three years. Official data show that the Chinese market saw 2.73 million domestic-branded cars sold in 2014, a 16 percent decline since 2013. According to some analysts, this trend will continue in 2015. The phenomenon is believed to be due to the rapid expansion of foreign and joint-venture auto brands in the Chinese market, particularly their entry into the low-end market – previously the dominion of Chinese brands – and also to Chinese customers’ deep distrust of domestically-branded cars.

NEWSCHINA I June 2015

created a brand-oriented culture in the Chinese market, where customers will prefer a foreign-branded car even though it is of similar or lower quality than a Chinese one,” said Wu. Li Xiang, ATHM’s president, agrees. “As foreign cars enter the lowend market, Chinese cars can no longer keep supplying their customDomestic vs. Foreign ers with low-price knockoffs. Although some of them have launched People’s worries about the development of Chinese cars actu- several high-end products which I believe are of better quality than ally originate from over 10 years ago, when the Chinese car market foreign ones, they have failed to convince customers,” Li said. boomed as foreign and joint-invested brands entered the market, the A typical example is the Roewe, a model in the SAIC Motor range. country’s own car manufacturers were still in their infancy. Though based on a foreign car, analysts have attributed its poor sales Although Chinese car makers, particularly State-owned ones, made to its transparently Chinese origins. Similarly, poor sales forced Riich, huge profits by cooperating with foreign investors, they gained little a car aimed at the luxury market by domestic automaker Chery, to in terms of technical improvement, particularly in fundamental tech- shutter its showrooms and stop production not long after opening. nology such as engines and gearAccording to a 2013 report on boxes. the car industry by the Chinese “Most Chinese engines were Academy of Social Sciences, Chiattempted copies of foreign ones, na’s domestically-made cars only and often broke down, made account for 5 percent of the total noise or vibrated… if we canprofit made in the Chinese car not make a good engine, how market, with the rest flowing to can we make a good car?” wrote foreign and joint-venture brand Zheng Shiyi and Ma Bing from cars. In 2014, none of the top Southwest Jiaotong University in five highest selling car brands in a 2013 paper on the tech gap beChina were Chinese. tween foreign and domestic cars. For Chinese analysts, this is “China hoped to exchange a particularly sore point – so market access for technology, much so that some have begun but failed. The reduced market referring to foreign car brands share has proven that Chinese as the “Eight-Power Alliance,” cars have not yet been acknowla Chinese term used to describe edged,” Wu Song, general manthe foreign powers who presided ager of Guangzhou Automobile A Chinese-made Hover car participates in the Dakar Rally, Argentina, over the dismantling of the Qing Group, told NewsChina. Empire in the 1900s. In recent January 5, 2014 Many analysts have criticized years, there has been much handChinese car makers, especially wringing over China’s inability to State-owned ones, for sacrificing technological development for produce a market-leading “national car” like Germany’s Volkswagen short-term financial gains, and have warned that the expansion of Beetle or Italy’s Fiat 500. joint-venture brands is squeezing Chinese cars out of the market. The “Generally speaking, a ‘national car’ should be economical, high“Shanghai” brand, an iconic Chinese car in the 1980s, for example, quality and hold a significant market share. It guides the development has been out of production for two decades since its maker, SAIC of the car industry and represents citizens’ confidence in the country’s Motor, began working with Volkswagen to build a Chinese version of manufacturing. Judging by these criteria, no Chinese car is currently the German brand’s Santana model. After incorporating Audi tech- worthy of such a title,” Tang Yuejin, a deputy PR director for SAIC nology, Hongqi, perhaps the most storied Chinese car brand, first Motor, told NewsChina. began producing cars that heavily resembled Lincolns, then Toyotas. “It means that neither China’s car manufacturers nor its consumWhile several private Chinese automakers have struggled on by ers have entered a ‘mature’ or ‘developed’ phase like Germany’s,” he making low-end cars, dominating that section of the market with added. prices much lower than those of their foreign counterparts, their poor technology and reliability, according to Wu Song, have given them a Way Out bad reputation. 10 years ago, Chinese experts and car makers still disputed whether “Having dominated the Chinese market for years, foreign cars have or not the Chinese car industry could survive and develop based solely Photo by Victor R. Caivano

“We used to connect domestic brands to patriotism or nationalism, but in reality, few customers choose a product based on place of origin rather than quality. It is time for the Chinese cars to fully join the market competition,” said Li Xiang.

NEWSCHINA I June 2015

economy

Photo by Peter PARKS

Photo by Vincent Yu

Wall Motors, an auto maker based in Hebei Province, told NewsChina. At Audi’s annual conference this March, the organizer issued guests with memory cards manufactured using 3D printing technology, a symbol of the company’s technological expertise. This small move triggered debate in the Chinese car industry, with many people complaining that foreign companies are spending their profits from the Chinese market on further research and development, broadening the technological gap with their Chinese counterparts. “There is not much time left for us. If we fail to keep up with foreign competitors in this fast-developing market, we will lag farther beWang Chuanfu, president of BYD, does chin-ups on a BYD-made electric bus during the governor of hind when the market cools down five years California Jerry Brown’s visit to BYD headquarters in Shenzhen, April 16, 2013 down the line,” Wang Xiaoqiu, a passenger car product manager at SAIC Motor, said at a product release event in March. During this year’s Two Sessions, Premier Li Keqiang publicized a 10-year strategy for the manufacturing industry, encouraging Chinese enterprises to focus on technological development, which many see as the best way for the country’s automakers to improve their businesses. “As a big manufacturing industry, automobiles should and have to be a pillar industry, since they will drive the development of many upstream and downstream industries,” Tang Yuejin, SAIC Motor’s deputy PR director, told NewsChina. “Given that the car industry is the cause of certain societal problems, such as traffic jams and pollution, Chinese car makers can fight on by tackling those problems,” he added. The Chinese government has been guiding Chinese car makers to take this approach, proA Chinese worker assembles a car on the Geely Motors assembly line in Cixi, Zhejiang viding subsidies to encourage things like cleanProvince, June 21, 2012 energy cars, but with limited success. Critics have complained that car makers have either misused funds or taken clean-energy cars to on foreign technology – now, many analysts agree, it is becoming market with underdeveloped technology. clear that these concerns were legitimate. Due to a lack of charging stations, one electric car model manufac“The Chinese car industry cannot get a toehold worldwide until tured by BYD, a leading Chinese car maker, for example, was a comChinese car makers free themselves from reliance on foreign technol- plete flop on the Chinese market, particularly in key big-city markets ogy and shift to self-development,” Wei Jianjun, president of Great where charging stations are difficult to install.

NEWSCHINA I June 2015

china

bynumbers 4.2% “The government should have subsidized the construction of charging stations. When you give someone rice and pork, you have to give them oil, firewood and a stove as well,” said Li Xiang. According to Li, catering to customer demand is the only way to regain market share. “Besides appearance, gas consumption and performance, a Chinese car maker should consider how to satisfy Chinese customers in the Chinese traffic environment, such as raising efficiency in a heavily-populated city,” he told NewsChina. “It is not wise to blindly follow foreign companies. We have to come back to the market and our customers,” he added. According to Chinese media reports, China will be home to over 600 types of vehicles by 2016 which Li believed both a challenge and a chance for the Chinese makers. “As the market slows down, the gap between Chinese and foreign cars solidifies. But this decreased market share will in turn push Chinese manufacturers to concentrate their efforts on self-improvement,” he said. The Trumpchi GS4, an SUV model made by Guangzhou Automobile Group, is a good example. Despite the sluggish market, the Trumpchi’s sales grew by 41 percent last year. In March, Yahoo Finance awarded the Trumpchi its “Innovation for the Future” prize, claiming that the brand was of the same performance and quality as its foreign competitors in the same price range. “In order to seize a bigger share of the lowend market, many foreign brands have degraded the specifications of their cars to be sold in the Chinese market, including safety equipment, but we do the opposite. It is a good chance for [Chinese car makers] to change the image of low price and low quality,” the company’s president Wu Song told NewsChina. “It will take a long time to rebuild our image, but we have to do so. If we do not seize this opportunity, the Chinese car industry is as good as over, and this might have a very negative impact on the national economy,” he added.  NEWSCHINA I June 2015

Industries with biggest rise and fall in profits in January-February, %

Y-o-y decline in profits for Chinese enterprises with upwards of US$3.26m in annual revenue from their main business, Jan-Feb 2015.

50 40 30 20 10 0 -10 -20 -30 -40 -50 -60 -70 -80

Oil and gas exploration

433%

Q1, 2015 increase in new accounts belonging to Chinese stock investors. Key Market Data 80 70 60 50 40 30 20 10 0

62% New accounts by people under 35 years old 5.5% New accounts by people over 55 years old 90% New accounts holding less than US$82,000 in shares 80% Total trade value of individual investors

Source: China Securities Depository and Clearing Corporation Limited

Coal exploration and processing

Ferrous metallurgy Electronic equipment

Power and thermal supply

Non-ferrous metallurgy

99.63%

Percentage of depositors with less than US$82,000 to be fully covered by China’s deposit insurance system as of May 1, 2015. US$687.7 billion yuan-denominated financial assets in China held by overseas entities by the end of March 2015

Equities US$98bn 14% Bonds US$116bn 17% Loans US$143bn 21% Deposits US$330bn 48% Source: People’s Bank of China

US$610m

Foreign currency payments made in Jan-Feb 2015 by Chinese individual and corporate consumers during an e-commerce trial project for overseas retailers, almost one-third of the US$1.7 billion recorded for the whole year 2014.

US$1.7bn

China’s total investment in the 14 operational overseas joint economic and trade cooperation zones, mainly in Asia, Africa and eastern Europe, as of the end of March 2015. Source: China Ministry of Commerce

Source: China State Administration of Foreign Exchange

history

Cultural Revolution

The Lost World

A collection of amateur photographs taken by a former attaché with the French embassy in Beijing gives a previously unseen view of China’s Cultural Revolution from an outsider’s lens By Wu Ziru

olange Brand was aged only 19 when she arrived in Beijing in 1965 to work as a secretary at the French embassy. Just one year later, Chairman Mao launched the Cultural Revolution (1966-1976), a mass movement that would devastate a nation. On October 1, 1966, China’s National Day, Mao Zedong appeared on the rostrum in Tiananmen Square to greet Red Guards from all over China – the Great Helmsman’s fourth such “inspection” since August 18. Over 1.5 million students and citizens joined the parade. Brand, in her official capacity as an attaché of the French Embassy, was in-

vited with other foreign guests to a formal reception in celebration of the event in the restaurant of the Beijing Hotel. Instead of sitting down to dine, however, Brand joined the crowd in the streets of the capital, camera in hand. An amateur photographer, she documented what it was like to be part of the biggest mass mobilization in China since the Revolution.

Hobbyist

In 1964, France was one of the few Western counties to establish diplomatic relations with the People’s Republic of China. Brand

was recruited by the embassy in Beijing right out of secretarial school. Her daily routine involved cataloging documents and undertaking various administrative tasks in the embassy compound. Though she had little knowledge of Mandarin, Brand was curious about everyday life in Beijing. “I had a great interest in observing people on the street. I tried to understand them,” she told NewsChina. Before arriving in China proper, Brand had used up her savings and bought a Pentax camera in Hong Kong. She had previously experimented with photography in France, NEWSCHINA I June 2015

Photo by Solange Brand

Red Guards in Beijing wait to join a parade

using her father’s camera, describing the experience as discovering a “way to communicate with the outside world.” Though Brand had little formal training, she quickly became an inveterate street photographer. Shortly after she started working in China, she was invited to the May Day celebrations in a cultural center and a park. The exotic performances of Chinese acrobats and masked dancers were utterly alien to her. Brand was especially fascinated by the dance performed by young women wielding replica rifles and swords, capturing all these sights through the lens of her camera. NEWSCHINA I June 2015

Brand’s early impression of Chinese people was that they were mostly friendly and kindhearted, if rather introverted. She was horrified at the turn things took barely a year later, when she would see the masks formerly worn by traditional dancers smashed as replicas of a feudal society, and witness the same young women raise real guns and machetes to attack one another. “I was totally amazed that there were such photos of the Cultural Revolution,” Yang Lang, a historian and media professional, told NewsChina. In April 2014, Yang attended a photographic exhibition held by the French

Embassy to commemorate the 50th anniversary of the establishment of bilateral ties. While many of the photographs on display were familiar to him, Yang told NewsChina that Brand’s took his breath away. “They were so different,” he said. Chinese photojournalists Li Zhensheng and Weng Naiqiang produced work relating to the Cultural Revolution that remains iconic today. Brand’s photography, said Yang, was in a completely different category. While technically rudimentary, their casual and natural style, even to the point of being romantically naive, set them apart from other

Photo by Solange Brand

history

Dancer wearing a “big head” mask performs during May Day celebrations. Such traditional performances were outlawed later that year, Beijing, 1966

documentation of the period. Most photographic records of the Cultural Revolution were posed according to strict propaganda regulations vigorously enforced by the authorities. Few ordinary Chinese families could afford a camera, and even those with access to one were mostly in the pay of the Communist Party’s propaganda departments. Brand was in a special category. She was not tied to regulations limiting the activities of Western journalists, nor was she strictly beholden to the sociopolitical pressures that restricted her Chinese peers. Instead, she was an amateur able to follow her instinct and her passion, elements strengthened by her unfamiliarity with the local language and culture.

“I was just shooting for the sake of interest; trying my best to understand people and what was happening,” Brand told NewsChina. By the time of her departure from Beijing in 1968, she had taken some 400 photographs. Yang Lang believes that Brand’s output constitutes a more vivid and authentic photographic record of the Cultural Revolution than any material that made it past the Party’s censorship apparatus. Thus, when Yang’s publisher friend Shang Hongke asked for recommendations for new subjects, Yang immediately brought up Brand’s work, and soon Shang had approached her with a view to publishing a selection of her Cultural Revolution pictures. Early this year, China Memory, 1966, a collection of nearly 100 color photos taken by

Brand, was published in China, with the captions written by Yang. Yang told NewsChina that some of Brand’s more sensitive photos were excluded from the collection, but stands by the book as a valuable documentary of China’s political past, especially those details missed in the mainstream historical record. “The arcane truths of history often lie in its less preserved aspects,” said Yang.

Politics

Brand used her camera to document the social transformation undergone by China in the throes of the Cultural Revolution, peaking with the festivities in Tiananmen Square on National Day, 1966. She told NewsChina that in 1965, though she did occasionally see NEWSCHINA I June 2015

Photo by Solange Brand

Red Guards leave Beijing to return to their hometowns on foot, 1967

posters calling for “revolutionary acts,” some of which appear in her photos, it was a shock to see them blanket the city at the onset of the Cultural Revolution. Even the people, she recalled, seemed to change. “It seemed that they had not enough clothes and food,” she told NewsChina. “But everyone looked so excited.” Such “excitement” finally arrived at the gates of the French Embassy. In early February 1967, the embassy was surrounded by a mob protesting the arrest of some Chinese students in Paris who had surrounded the embassy of the Soviet Union – China’s arch enemy at the time. Brand captured the slogans on their banners with her camera. Written in Chinese and English, they read: “Down with French imperialism!” NEWSCHINA I June 2015

The protest lasted for days, with even elementary school and kindergarten students joining the crowds by its end. Brand made sure she captured their faces on camera for posterity. But Brand’s vision was not restricted to political upheaval. Indeed, she showed a distinct preference for scenes from daily life. Discarded shoes, streetside sewing machines, and the soon-to-be-demolished gates of Beijing’s ancient city walls were all notable subjects. As an embassy staff member, she also had the opportunity to capture scenes in cities like Nanjing and Datong, which were generally off-limits to other foreigners. The photographs she took on her trips outside the capital, such as a portrait of an elderly man selling wontons in a narrow Nanjing al-

leyway on a sunny day, serve as a reminder that even as virtual civil war raged elsewhere, in some corners of China, life continued very much as normal. Photography critic Chen Xiaobo told NewsChina that when he first saw Brand’s photos, he didn’t think much of them – they just didn’t meet his standards. However, the more he studied Brand’s work, the more value he found in their seemingly trivial details. In his foreword to China Memory, 1966, Chen writes: “Brand’s photos are speaking. They tell the world a story that happened in China not so long ago. They disclose some of the secret scenes that history doesn’t want to or couldn’t talk about – the weariness and absurdity that an extreme era brought to China.”

culture

Andy Lau

Photo by Zeng Hongge

Into the Dust

NewsChina meets superstar singer, actor and movie producer Andy Lau, one of the legendary â&#x20AC;&#x153;heavenly kingsâ&#x20AC;? of Cantopop and one of the most recognizable faces in Chinese entertainment, to discuss his striking transformation in his latest movie, and his desire for roles that earn him more than just commercial success By Wan Jiahuan

NEWSCHINA I June 2015

n 2004, in the run-up to the release of his international hit kung-fu movie House of Flying Daggers, Chinese director Zhang Yimou famously commented that the film’s dashing lead actors, Andy Lau and Takeshi Kaneshiro, “can play any role, except that of a farmer.” A decade later, Lau has seemingly been on a mission to prove Zhang wrong, taking the role of a farmer father on a 15-year quest to find his missing son in Lost and Love, an adaption of a true story, by director Peng Sanyuan. When it comes to the question of his range as an entertainer, Lau has a resume that should silence the critics. Born in 1961 in Hong Kong, Lau first gained fame as an actor in Hong Kong’s booming TV and movie industries, before beginning a career as a Cantonese pop singer, releasing his debut album in 1985 – a work that led critics to call Lau “talentless.” Yet now, three decades and nearly 50 studio albums later, Lau holds the Guinness World Record for “Most Awards Won by a Male Cantopop Artist.” Besides performing in nearly 150 movies, Lau also set up his own movie production company, which, despite losing money in its early days, has nurtured a number of new talents in the Asian movie industry. Now, the veteran heartthrob faces perhaps his biggest challenge to date – breaking away from the type-cast roles he has played for decades. In Lost and Love, Lau’s timid, hunchbacked character squats on the street to eat noodles and wears one pair of cloth sneakers throughout the movie – a far cry from the debonair leading men and razorsharp police officers that audiences are used to seeing him portray. Besides spending an entire week sunbathing in order to give his skin an “authentic countryside tan,” Lau carried a nail file and a bottle of medicinal liquid to keep his hands rough while shooting, and would angle his face to better expose his wrinkles to the camera. Director Peng Sanyuan was impressed by Lau’s transformation. “Not only his appearance, but also his temperament was uncannily close to that of a Chinese farmer from the mainland,” he said. Lau’s first steps towards breaking down audience preconceptions came in his 2012 work A Simple Life, where he played a servant to

NEWSCHINA I June 2015

Andy Lau plays a farmer

a wealthy movie producer. “He was still playing a ‘prince charming’ role in A World without Thieves [2004] and I Want to Be You [2002],” said Peng. But in A Simple Life, an opportunity arose for Lau to play an average man. Peng said she wanted to pull Lau “into the dirt and the dust.” Released in late March, Lost and Love roused much debate about Lau’s commitment to the role. The movie generated impressive box office takings – over 200 million yuan (US$32m) in ten days – but a lukewarm critical reception, scoring 6.2 out of 10 on ratings aggregator website Douban – a fairly standard outing for Lau. While much of

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In Lost and Love, Lau’s character talks to a monk

the criticism focused on Lau’s noticeable Hong Kong accent, few laid into other aspects of his performance. Lau himself was pleased with the role. “When I was a child, I once wrote that my dream was to become a farmer,” he told NewsChina. “Some movies are important due to their impact on film history and their societal significance, regardless of their box office income,” he continued. “If you miss [movies like A Simple Life and Lost and Love], you never know when another will come along again.” NewsChina: Your role in Lost and Love couldn’t be more different from your normal roles. Why did you take the job? Andy Lau: I was thrown when the director offered me the role, and

I hesitated. She said she didn’t want to make a movie that relied solely on promotion and star quality, rather than on a strong performance from me in the farmer role. I agreed with her, so I accepted the role, and decided to play it well. NC: Was the success of A Simple Life a major reason why you took the role in Lost and Love, a similarly realistic piece of social criticism? Lau: Not really. Actually when Lost and Love came up, I was planning to take some time off, since my daughter had just been born and I wanted to spend more time with my family. Yet when I read the script, I didn’t think twice. Actors tend to take the roles that are helpful to their career. This NEWSCHINA I June 2015

movie won’t suddenly bring in a box office income of 500 or 800 million yuan (US$80m or $128m), but I think Lost and Love is helpful to me – not to my career, but as a part of my life. NC: You play a typical mainland farmer. How did you identify with the character? Lau: Obviously, my character, Lei Zekuan, is a pitiable man. However, pathos can hardly solve his problems. In the real story, Lei had searched for his child for 15 years – his chances of finding his child were so slim that he surely must have been close to giving up. I hope the movie will instil courage in the hearts of those still looking for their missing children, and let them know that there is still hope. NC: Were you aware of mainland social issues like child abduction before Lost and Love? Lau: I had seen many reports and TV programs on the topic. In fact, when I was a child, the abduction of children was a serious problem in Hong Kong. Many societies see these kinds of problems in the course of their development. Since it still hasn’t been solved after so many years, many people think of abduction as an old problem. I think that more people should pay attention to the issue, no matter through what channels. In the 1990s, I sang a song called Tell Me If You Saw Her. For the song’s promotion, I went on a TV news show to talk about a missing girl. Even though this was a promotional activity, the girl was found, and brought to the police station. NC: A Simple Life also provoked media discussion of the State pension system. Do you think the movie had any actual social influence? Lau: In the short term, I don’t think we’ve had much influence on anything. But taking a long-term view, the movie may prove to have been of some value. I think children between 8 or 12 who watched and liked our movie will remember it their whole lives. The pension fund deficit is certainly a significant social problem, though. In the 1970s, Hong Kong initiated a two-child policy, and the mainland had its One Child Policy. Nowadays, if two young people get married, they will later have to support and provide for four elderly people. This will be a big problem in the future. If young people take note of the situation as early as possible, they may have a chance to prepare. NC: Many say that the “four heavenly kings of Cantopop” [Lau, NEWSCHINA I June 2015

along with Aaron Kwok, Jacky Cheung and Leon Lai Ming] are among the most successful products of Hong Kong’s entertainment industry. But now, there are fewer and fewer successful Hong Kongmade stars. Why do you think this is? Lau: The environment has changed. Hong Kong is no longer a fertile environment for budding stars. For example, mainland-Hong Kong co-productions now feature equal numbers of actors from both sides – in the past, Hong Kong stars would have dominated. That’s the environment nowadays. Since Hong Kong and the mainland have been operating under the “One Country, Two Systems” policy, more important [Hong Kong] directors have been coming to the mainland to make movies. Many of them are increasingly willing to cast mainland actors and actresses, because those of us from Hong Kong don’t speak good Mandarin. Hong Kong performers have fewer opportunities these days. NC: So Hong Kong actors and actresses need to speak Mandarin in order to get better roles? Lau: That’s right. Just like if they were to go to America, they’d need to speak good English. [As a Hong Kong actor] you’re probably better off learning Mandarin on the mainland than learning English in Hollywood. NC: Your company has scouted and supported many new directors. Why didn’t you develop your own “star-making” business? Lau: Directors develop by themselves. However, an actor or actress needs to invest a lot of time in training. In Hong Kong, it takes most actors 10 to 15 years to get accustomed to the entertainment industry “way of life,” and to develop a healthy work ethic. It’s very hard to turn out stars today. Mainland actors have a different background and method from us. Since we don’t have the same rhythm, how could [my company] teach Hong Kong actors this? Also, mainland actors are difficult for us to develop, as we don’t have the same way of life. NC: Do you mean that your experience of becoming a star is no longer applicable in today’s industry? Lau: That’s right, but not absolutely. [New actors] can make use of my experience. I often share my experience in this industry with others – even those who aren’t with my company. As a singer, dancer or actor, I wasn’t at this level when I started. It was a very difficult journey – audiences were patient with me.

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Break the System Art Collector

Upstart art collectors Lin Han and his wife Lei Wanwan are making their mark on the global scene By Yuan Ye

M WOODS Art Museum in Beijingâ&#x20AC;&#x2122;s 798 art district NEWSCHINA I June 2015

NEWSCHINA I June 2015

Photo by Dong Jiexu

Lin Han and his wife Lei Wanwan in M WOODS Art Museum

culture Works displayed at M WOODS’ opening exhibition titled Pale Fire: Revising Boundaries, October 2014

n just a year and a half, 27-year-old Lin Han has purchased more than 200 pieces of art from around the world. The first piece acquired for his formal art collection was a painting by Zeng Fanzhi, one of China’s most important and internationally renowned modern artists, purchased at Sotheby’s for US$1 million. Besides Zeng Fanzhi, Lin’s collection now includes works from top artists such as Yayoi Kusama and Zhou Chunya. More important to Lin, and to his wife and fellow collector Lei Wanwan, is their mission to showcase young artists from all over the world, including Chinese artists like Chen Fei, Gao Yu and Qiu Jiongjiong, as well as artists from Europe, US, Japan, Brazil and many other countries.

“Young artists around the world are discussing increasingly similar things,” Lin Han told NewsChina. “It’s very narrow minded to separate art by [national] borders.” As the couple’s collection continued to grow, they decided to share it with the public – in October 2014, their art museum M WOODS opened in Beijing’s renowned 798 Art District. The Bauhaus-style museum of some 27,000 square feet was designed by Lin himself, while Lei Wanwan took charge of curating their opening exhibition, titled Pale Fire: Revising Boundaries, which included works owned by seven young collectors in China including Qiao Zhibing, Zhou Dawei and Lin Han himself. Works by top artists were

exhibited alongside those by unknown young artists. “Yayoi Kusama’s works are so expensive, while Sarah Peoples’ haven’t appeared as part of a single commercial exhibition. But I think Peoples’ works are qualified to be exhibited next to Yayoi Kusama’s,” said Lei Wanwan. “The exhibition’s core ideal is the removal of boundaries, including those of nationality, sex and age, but also of price.”

The Big Buyer

Lin Han’s rapid-fire round of international art acquisition came as a surprise both at home and abroad, and caught the attention of many in the industry, some of whom dismiss him as a strongwilled young man spending his famNEWSCHINA I June 2015

‘Our system is to break down the system.’

ily’s money. Indeed, according to Lin’s biography on Baidu Baike, China’s Wikipedia equivalent, Lin’s family has “connections to China’s political, commercial and cultural circles.” Lin’s parents, former military officers turned successful businesspeople, sent Lin to study in Singapore at the age of 14. “They bought me a plane ticket and I just went,” Lin said, adding that his parents hoped this would teach him to become independent and build a future for himself. Lin’s development in Singapore vindicated his parents’ decision. Besides school, Lin was good at basketball, and got into business at a young age. “I made a lot of money when I was 17,” he said. In 2006, when Lin was still a college student majoring in animation at the University of Northumbria in the UK, he returned to China to register his own advertising company, and picked up work as a freelance designer. In 2009, Lin became chief visual effects designer for the 53rd Asia Pacific Film Festival. In his own words, he dug up “first, second and third pots of gold” for himself. Long before he began purchasing art, Lin was already an experienced collector. As a child, he collected basketball posters, footwear and bicycle logo plates. “I have more than 100 bicycle brand plates from both home and abroad,” he told NewsChina. Later he began collecting supercars, and was invited to participate in the design of a limited-edition Lamborghini for the Chinese market. NEWSCHINA I June 2015

Through his work as a designer, Lin gradually developed a strong interest in art. When he returned to China after graduation in the UK, he found that the boundaries between art and design were becoming increasingly blurred. “My father taught me how to be a good businessman,” he said, “and I also inherited my mother’s artistic temperament.” Lin’s mother had been a Chinese opera singer, and Lin had always maintained a very close relationship with his mother. The “M” in the museum’s name “M WOODS” is the initial of Lin’s mother’s given name, and Lin’s family name means “woods.” While Lin himself lacks any formal art education, Lin found himself a perfect partner – his wife Lei Wanwan. Having graduated from China’s Central Academy of Fine Arts, Lei went to Columbia University in New York to read a postgraduate degree in art management. In 2012, Lei founded WanWan Lei Projects, curating a series of small exhibitions in various New York art spaces. Lei had actually planned to stay in New York, until she met Lin in Beijing at a party for young collectors in 2014. “An artist needs talent, and a collector also needs a talent for discovering art,” Lei said. While she saw this talent in Lin, she also provided professional consultation for Lin’s purchases.

Universal Secret

Lin’s some 200 pieces include almost every kind of artwork imaginable, from paintings, to installations, to sculpture, to photography and video art. “We do

not decide what to collect based on medium and material,” said Lei Wanwan. “Our system is to break down the system,” Lin added. In Lin’s opinion, the ideas of philosophy, science, art and economics are interlinked. “There are common characteristics of good art works. But it’s a universal secret, and you can’t define them exactly,” Lin told NewsChina. The museum’s latest exhibition is a screening of Dutch artist Guido Van Der Werve’s video work Nummer veertien, home, a piece that took the artist six years to finish, in which stories of Alexandria and the death of Chopin are combined with Guido’s performance art and original classical compositions. The exhibition is Guido’s first in Asia. However, on the Friday afternoon when NewsChina visited M WOODS, attendance was sparse. As a not-forprofit private art museum – currently financed by Lin’s parents – Lin is under pressure to keep the museum in business. He and Lei Wanwan plan to hold a series of exhibitions and activities at the museum, in addition to publishing art books and carrying out academic research. “We want to adhere to international standards in the running of our museum. We hope to contribute to the development of modern art, and share modern art with not only China but the world,” said Lin. “Globalization facilitated us enjoying art works from around the world… Collectors of our generation have a natural global vision,” said Lin.

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Zhou Bing

A Legend Revisited

As celebrated Chinese filmmaker Zhou Bing sets out to shoot his third documentary on Peking opera legend Mei Lanfang, NewsChina interviews Zhou to find out how he plans to avoid retreading his previous work By Wang Yan

hou Bing, the award-winning director and producer of hundreds of documentaries, is one of a handful of Chinese independent filmmakers whose work has resonance overseas. The Forbidden City – perhaps his best known documentary – has been broadcast on the National Geographic channel in 169 countries. In 1997, as an ambitious 29-year-old Zhou Bing was diligently aspiring to establish himself as a documentarian, he stumbled upon the opportunity to direct a biographical documentary, Mei Lanfang 1930. Mei Lanfang (1894-1961), China’s best-known Peking opera artist, was the first performer to take the art form overseas, with his 1930 visit to the US making a particularly lasting impression - the extravagant costumes and choreography, as well as Mei’s personal charisma in his preferred female or dan roles, winning over many American audiences. After agreeing to direct Mei Lanfang 1930, Zhou Bing decided to try something new - incorporating elements of “docu-fiction,” or in his own words, “representation of reality,” into the process. “Inspired by stage effects of Peking opera performance, I

found a suitable way to ‘cast’ certain ‘roles’ so as to re-enact certain events naturalistically,” Zhou Bing told NewsChina during an interview in late March, 2015. “This technique, though widely practiced in Western countries, was pioneering in China.” According to Zhou, the documentary was a runaway success, and it propelled him to nationwide fame as a documentary director. In 2005, Zhou shot another ten-episode longform documentary chronicling Mei Lanfang’s life story. “The second time I encountered Mei, I drew more inspiration from him. Mei, as a reform-minded Peking opera performer, introduced a lot of new elements to the art form. So did I, in pursuing innovation in my field,” added Zhou. “Each time I studied Mei, I felt that it took my spirit and esthetic sense to new levels.” This year, Zhou and his team members are preparing to shoot a new three-part documentary on Mei Lanfang. In late March, Zhou Bing sat down with NewsChina in his studio in eastern Beijing, to discuss his latest attempt to explore the curious world of Mei Lanfang. NewsChina: Explain the different concepts of your two NEWSCHINA I June 2015

Zhou Bing

previous documentaries on Mei Lanfang. Zhou Bing: Mei Lanfang 1930, which was finished in 1997, was a short documentary assignment from my previous employer [State broadcaster] CCTV, and was purely based on Mei’s tour to the US. At the time, when I was in my twenties, I wasn’t particularly interested in Peking opera, and had no sense of the significance of his 1930 visit to the US. Looking back now, his initiative in promoting Peking opera worldwide, particularly during that unique era, was significant even to present-day cultural exchange. After the May Fourth Movement in 1919, society was calling for elimination of traditional Chinese culture, including Peking opera. But Mei’s devotion to Peking opera was not shaken by this movement – on the contrary, he spent eight years preparing for his US tour. His significance as a cultural ambassador was historically incomparable. The second documentary I directed on Mei in 2005 was a biography of his whole life. Lacking natural talent as a Peking opera singer, he gained fame through personal diligence and various support from his broad social network. He organized salon-like gatherings with top cultural elites to exchange views NEWSCHINA I June 2015

on culture and art. His performance on stage and his personal life experience in attaining artistic creation can both be regarded as legendary. NC: Can you recall a scene or a line from your previous works on Mei that impressed you the most? ZB: I’d like to quote the narration in the final section of Mei Lanfang, the second long-form documentary on him: “[Mei Lanfang’s] voice touches hundreds of thousands of people, his long sleeve flies over both hemispheres, his expressive hands shake with the talent and modesty of other great masters of his time – writers, poets, dramatists and dancers alike – and certainly hundreds of thousands of ordinary people. His refined and peaceful smile seals his status as an eternal cultural icon. He spends his life fulfilling his role as a real actor.” NC: Why did you choose to make another documentary on Mei Lanfang? What is the angle and emphasis this time? How will you top yourself in this regard? ZB: This time, I will not only work on Mei Lanfang, but on another three famous male Peking opera artists of his age

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form. I’d rather say it is a process of discovering new things while reviewing what I’ve learned about him – an understanding of his inner spirit and beauty. My two previous works concentrated more on his personal story from an external perspective, while ignoring the power inside that allowed him to attain such levels of artistic achievement. Besides this, I will try to present a better picture of the rich beauty of his stage performance. This time around I’m working with young directors in their early twenties, and I want to dig out and share something eternal with my audience – some human emotions in Mei’s personal life that they can identify with. We will make some innovations in visual effects design, narration and staging. We will use some old material, but will of course include more previously unseen material. For example, we will include original illustrations from a book of all the plates for the costumes and props used on Mei Lanfang’s US tour. NC: How is the project going so far? ZB: We’ve finished the script, and have done some interviews. Now we’re designing the shooting schedule. It is expected to be finished by this October, and the TV station will decide when to broadcast it.

Mei Lanfang meets with Charlie Chaplin in Los Angeles, May 1930

who played mostly female roles. They are also part of a major TV series, Chinese Masters in Last Century, which CCTV has been producing since 2014. I do not intend to top anyone in any regard. For me, excellent documenting of Mei does not rely on the external art

NC: Do you plan to distribute the documentary overseas? ZB: Apart from the Chinese mainland, we will certainly release it in Hong Kong, Macao, Taiwan and some countries in Southeast Asia. I also hope to set up links with Chineselanguage media in North America so it can be distributed in those regions. My two previous works on Mei Lanfang were only distributed on the mainland and in Taiwan. Peking opera is marginalized nowadays, so it is hard to get to the core of mainstream culture, as it is dominated by Western pop culture. While we want to promote it globally, without strategic support from the government, we can only seek commercial opportunities. But in reality, these themes are not favored by international media like the Discovery Channel or National Geographic, thus global promotion is difficult. Some of my previous works have been distributed worldwide – for example, The Forbidden City and The Bund were NEWSCHINA I June 2015

broadcast on National Geographic, South of the Ocean on the History Channel, and Buddha and the Snow Leopards on [German broadcaster] NDR and [Franco-German broadcaster] Arte.

NC: Indeed, you have made a number of breakthroughs in your documentary filmmaking, such as adopting certain techniques from movies. But where are the boundaries of such breakthroughs? ZB: It is very simple, a documentary director can never break one basic rule – obeying reality. That’s why we pay special attention to researching written historical sources. For many years, the industry misinterpreted my adoption of the “representation of reality” technique as too casual and unrestricted. But every time, I’d put in a large amount of work on raw materials and field research before shooting a documentary. For the current project, we have so far invited academic consultants, including scholars in related fields, like the China Art Research Institute. They will provide authoritative guidNEWSCHINA I June 2015

Photo by Fotoe

NC: Considering the harsh reality of dwindling public interest in Peking opera, what value do you see in shooting a documentary? ZB: Despite the fact that Peking opera as an art form is dropping in popularity, and few young people are interested in it, I can affirm that it is valuable in the sense that it conveys the cultural and esthetic essence of Chinese culture. First, the art form is my interest, and secondly, I believe there are many who, like me, need it and appreciate the beauty conveyed through it. Our audience are mostly cultural vultures, and there are a number of youngsters in their twenties who have shown a keen interest in such topics, which has made me feel vindicated. However, I admit that the road to shooting a documentary, particularly on traditional Chinese culture, is a lonely one. I feel this loneliness all the time, but I am happy to have been walking this road for more than two decades. I now work with young directors, and I encourage and expect their achievements to exceed those of my previous work. One thing is for sure, the pursuit of beauty through cultural elements is a common interest among people of all ages.

Mei Lanfang on stage

ance with their professional background to our team throughout our work. Audiences can expect to be presented with a considerable amount of precious historical material about Mei Lanfang that has never before been disclosed to the public.

visual REPORT

NEWSCHINA I June 2015

Soaked in Culture Words and Photos by Zhang Na and Yuan Ye

ishuangbanna, an autonomous prefecture of the Dai ethnic group in Yunnan province, is known for its marvelous tropical scenery, spectacular biodiversity and vibrant ethnic culture. Of its 1.13 million population, more than 70 percent are ethnic minorities, and 35 percent are Dai. The Dai people have a long religious tradition of Buddhism, followed actively by almost the entire population, and faith is central to daily life. In Xishuangbanna alone there are more than 500 Buddhist temples, with at least one per village. As in neighboring countries such as Myanmar, Dai children, on reaching a certain age, are routinely sent to live in local temples as part of their education.

Each year from April 13 to 15, Dai people celebrate their New Year with numerous ceremonies and community activities. These include water-splashing, dragon boat racing, parades, launching paper lanterns and floating candles down rivers. Buddhist rituals are an indispensable part of these activities, with abbots and monks chanting sutras to pray for blessings for their communities, while believers throng temples to wish for good fortune. This yearâ&#x20AC;&#x2122;s Dai New Year celebrations in Xishuangbanna drew hundreds of thousands of local people and tourists, with the traditional watersplashing, an activity popular throughout Southeast Asia, perhaps the biggest draw for outsiders.

1 3 1. Buddhists gather for prayers in Xishuangbannaâ&#x20AC;&#x2122;s central temple 2. The chief abbot (front) and monks from the central temple on their way to chant sutras by the river 3. Tens of thousands of paper lanterns are launched into the sky

NEWSCHINA I June 2015

visual REPORT

2 3

NEWSCHINA I June 2015

7 1. A local lights a large paper lantern 2. People participate in a traditional water fight 3. Ethnic dancers perform in a parade

4. A festive performance takes place by the Lantsang River

6. Monks and other Buddhists meditate in a village temple

5. Young monks take a bus to the river to chant sutras 7. Monks chant sutras while paper lanterns rise into the sky 8. Home-made food brought to the temple by locals

NEWSCHINA I June 2015

OUTSIDEIN perspectives from within China

Hidden Hangzhou

Old Dog, New Tricks

Dismiss this gem of a place as a mere tourist trap at your peril. Even in these days of widespread Disneyfication, there’s a lot more to Hangzhou than meets the eye By Ankur Shah

Getting Around: Hangzhou’s public transport system is a good deal cheaper than Shanghai’s, and, better still, runs with equal efficiency. Nonetheless, the grid-like nature of the streets does mean that traffic is frequently an issue, particularly during peak travel times, when hailing a cab is a nuisance (taxi-hailing apps can reduce the pain somewhat, but most are only usable if you can read Chinese). Cycling, perhaps surprisingly, is often a better option — public-access bicycles are available city-wide if rented with ID, and the first hour is always free.

A vista of downtown Hangzhou over the West Lake NEWSCHINA I June 2015

Photo by ic

Getting There: Hangzhou is among China’s best-connected tourist destinations with daily, often hourly, flights from all major airports. The city is also now thoroughly linked into the national high speed rail network. You can reach Hangzhou by the G-train in less than an hour from Shanghai Hongqiao train station, or in around five hours by high-speed rail from Beijing South train station.

angzhou, just a stone’s throw away from the metropolis that is Shanghai, is far too often reduced to a sideshow, a mere “must-see” on some interminable coach trip that aims to take in the entirety of China in less time than it would take to walk around the Grand Canyon. This is a great pity, as the city defies touristic pragmatism to warrant an extended visit in its own right. Whilst Hangzhou is perhaps less of a “must see” for foreigners than Beijing or Hong Kong, the Chinese themselves cherish it as a trip that should appear on everyone’s bucket list. Blessed with stunning scenery, Hangzhou epitomizes China’s recent modernization, and how the blending of old and new, if done tastefully, can product a fine result.

to ascend Feilai Peak, which is often missed out of itineraries but deserves appreciation for its spectacular views. If you’re looking to get off the tourist trail (and who isn’t?) one excellent option is cruising the former Grand Canal. Skip the expensive and overcrowded tourist boats, and instead catch the public ferry, which will give you a waterborne view of this miracle of ancient engineering for a mere three yuan (40 cents), one-way. With Hangzhou the embarkation point for Beijing during the Ming and Qing dynasties, this ancient man-made waterway is dotted with stunning pagodas, wharfs and ancient bridges, typically only enjoyed by those using

Of course, if you’re going off-piste, you still can’t miss out on the West Lake. This expansive body of water encapsulates everything that is beautiful about classical China as much as it serves as a warning to those who see unfettered tourism as nothing but a boon. To avoid the crush, visit during the wee hours whilst the city remains in a sleepy daze. The morning fog on the lake is simply enchanting, the stillness of the waters soothing. At this time of day only the elderly come to life, and the shores play host to tai chi sessions, games of hackey sack, and line dancing. Evenings on the lake are also worthwhile, featuring a nightly dancing fountain show (admission is free, arrive early to get a seat) accompanied by classical Chinese music. Expect at least one audience member to burst into tears. In years gone by, the West Lake inspired countless writers, poets and painters who eulogized its tranquil beauty – a mantle taken up by the selfie generation. From people-watching to picnicking, you can easily blink away half a day, even when the tour bus hordes descend in full force. Don’t let them put you off, as you only have to walk a few minutes from the main pathways to find yourself alone with nature. Resist the temptation to hop on and off a shuttle bus, as the only real way to see the lake is by bike, and make sure you stop by the Leifeng Pagoda. Whilst the entrance fee is steep, it is absolutely justified by the views from the top (and the ticket price serves to keep all but the most determined tourists out).

Escape

For the temple collectors among you, Lingyin temple should definitely be your next stop. A photo upload of the West Lake might get you more likes on Facebook, but Lingyin will surely leave a more longstanding impression. The incense-infused air is heavy with serenity; and despite the scars of commercialism, this temple, particularly its extensive grounds, gives visitors enough space to retreat and reflect. Marvel at a 20-meter statue of Siddhartha Gotama, play a quick game of spot the difference in the Hall of 500 Arhats, or watch the monks tap away at their iPhones in between chants. In grottoes dug into the nearby hillside are a range of Buddhist frescoes, a spectacular fusion of faith and art. Make sure you save time

NEWSCHINA I June 2015

Photo by ic

Ancient

The West Lake

the canal for their daily commute. Board at the Wulinmen pier and be ready to hop off and admire the elegant arches of ancient Gongcheng bridge, gateway to a quaint, old-style town (albeit with its own Starbucks), that houses a number of charming museums (including the China Fan Museum and the China Umbrella Museum, both worth a browse) and a lively, inexpensive tea house.

Green

If waterborne transport isn’t your thing, Hangzhou is also blessed with a number of lush, green hills, perfect for those seeking solitude without roughing it. Baohe and Laohe hills are both located in the city center, ideal for a morning hike, offering panoramas of the city and its lake, and also providing a window on the juxtaposition that comes with development. Shard-like skyscrapers jut snaggle-toothed from both man-made and natural topography, and while Baohe hill offers a serene classical pagoda, its twin Laohe is right next to the

travel

dies, which will come as a relief to anyone hipster coffee shops, VPN-enabled Wifi who has overindulged on the local grub. hotspots and boho restaurants of Zhejiang Another means to settle the stomach University’s cosmopolitan campus. comes in the form of city’s sippable pride Which brings me to food. Hangzhou’s and joy, Longjing tea. Aficionados should street snacks are a further embodiment check out the National Tea museum, the of the history and breadth of this city’s only one of its kind, where you can broaddiverse culture. First stop on the savvy en your understanding of the tea-making gastronome’s itinerary food tour is usuprocess before organizing a tour to one ally Hefang street, a lively night market of the local plantations (the nearest is 15 pulling in Chinese and foreign tourists in kilometers from the city center) via your equal measure (be ready for long lines), a hotel or guesthouse. drag known as much for its (heavily reIf you’d prefer to drink locally, some touched) architecture as the morsels on teahouses, like Hefang street’s Taichi Douoffer. That said, try the cong bao hui, an cha, incorporate a kung fu performance age-old delight comprising a crispy paninto their presentation of the green stuff. cake stuffed with caramelized shallots, Others are more conservative, focusing on that was once eaten to express hatred for a good cup of tea accompanied by an even Qi Hui, the Benedict Arnold of the Song better view – take your pick of the many Dynasty. Don’t come expecting too much options on the shores of the West Lake. authenticity, however – the food may be Some stunning temples and pagodas await the intrepid But to truly appreciate the joys of a quality the real deal but the abundance of selfie brew, my recommendation would be the sticks and cheesy keychains does not suggrass-scented, gently undulating hillsides gest this street has eschewed the allure of the tourist buck. Nonetheless, there are a few gems to be found here, of the tea plantation at Longwu town, where days drift by in a swirl including a traditional medicine shop that still sells traditional reme- of green eddies.

real chinese

nǚ

shén

nüshen Goddess

Liu Xiang, a 19-year-old female swimmer, was dubbed the “nüshen of Chinese swimming” after bringing home a gold medal from China’s 2015 national aquatics championships. This rather condescending title, which literally means “goddess,” refers only to Liu’s attractiveness, with the Chinese term nüshen generally reserved to describe attractive women perceived to “have it all.” With “nü” meaning “woman” and “shen” meaning “God,” nüshen is believed to have emerged as a popular term alongside its antonym diaosi, a self-deprecating term commonly used by Chinese men keen to paint

themselves as unattractive losers. Therefore, the term nüshen, in most cases, is deployed by diaosi men to describe women who are out of their league. Its masculine equivalent, nanshen, is also gaining currency in common parlance. Some have even described David and Victoria Beckham as the perfect storm of the nüshen/nanshen combo. The term is also regularly applied to “idols” of both genders such as athletes, actors or South Korean pop stars. During the 2015 Chinese New Year Gala variety show staged by State broadcaster CCTV, the term nüshen was referenced in a sketch where a stocky, unassuming woman competed for male attention with a tall, at-

tractive peer. The sketch included several references to the popularity of a nüshen, who received dozens of sympathetic Tweets following a break-up, while her jilted tomboy friend merely received a single “thumbs up.” The sketch, while popular with mainstream audiences, earned criticism from feminists who saw it as essentially justifying the perceived current obsession with physical appearance over other qualities. Others claimed that representing femininity and gender roles as black-and-white simply played to stereotypes rather than challenging them, noting that the men featured in the sketch were the sole focus of the two female characters’ anxieties. NEWSCHINA I June 2015

flavor of the month

The Big Freeze By Sean Silbert

any like to rag on fast food, particularly McDonald’s, for selling a meal that doesn’t look as appetizing as advertised. They may have a point – their new black sesame flavor soft-serve ice cream, for instance, doesn’t even look like food. The color looks like something the Tin Man would flush away: a metallic gray ooze, served in a similarly gunmetal shade of cone. One last thing – did I mention it’s delicious? The nutty, creamy flavor of black sesame is a cousin of many other localized ice creams tailored to the Chinese palate. Right up the street from where I bought my stainless steelhued treat, another dessert vendor sold green and jasmine tea ice cream varieties. High-end hotels like the Hilton Beijing Wangfujing offer scoops infused with the notoriously potent fragrance of Wuliangye-brand baijiu liquor, while corner stores across the country offer prepackaged treats in a rainbow of unusual flavors to relieve the sweaty in summer. Traditionally, the Chinese haven’t had much space for dessert in the phenomenal gastronomic repertoire contained within the country’s borders. Service á la Russe is an unknown – Chinese restaurants usually serve their dishes all at once, ending the meal with palate-cleansing fruit, with sweets usually a distraction enjoyed alongside more wholesome fare. This can wrong-foot foreigners who frequent “international” Chinese restaurants that try to integrate a dessert course into their menu: order a durian puff or an egg tart and it might come right after your appetizer. Moreover, any dutiful Chinese grandmother will quickly remind you that cold foods, as TCM has long understood, are a one-way ticket to digestive illness. Ice cream, and its growing popularity in this mostly dairy-averse culture, has added an interesting swirl into the culinary mix. As with many other foodstuffs, the Chinese, alongside the Persians, are credited with creating some of the world’s first “iced NEWSCHINA I June 2015

creams.” In her seminal History of Food, Maguelonne Toussaint-Samat claims that Chinese aristocrats invented a method of freezing syrup with a mixture of snow and saltpeter. Other sources detail Chinese chefs freezing a milk-and-rice mixture by packing it into snow around 200 BC, or by using ice to chill a mixture of buffalo milk, camphor and flour. Yet ice cream today is enjoyed by more than just China’s upper class. Just take a look at any local store in Beijing, which usually stocks a jumble of domestic ice creams in a cabinet-sized fridge. Here you’ll find flavors that resonate with the local sweet tooth: while chocolate and vanilla have their staunch supporters, there’s plenty of competition from taro, green peas and corn. That last one is even designed to look like a shucked ear for the full visual effect. Local English-language blog SmartBeijing (and its sister SmartShanghai) annually run an unscientific study to dredge the depths of the country’s corner stores for the most revolting frozen concoctions. Creativity, if not culinary flair, is a common theme: some previous finds have included a banana pudding pop hidden in a gooey “peel,” a green tea sorbet which inexplicably has a pizza on the wrapper (the author compares the appearance to “untreated sewage”) and a vanilla-chocolate snowman popsicle with a “face” described as resembling “a child’s nightmare.” The seemingly unquenchable Chinese appetite for ice cream has already attracted plenty of foreign companies to the table. While it has proven difficult for foreign brands to convince Chinese consumers to embrace certain foreign flavors, Coldstone Creamery and Haagen-Dazs have appealed to aspirational sensibilities, tempting hipsters to ignore their comfort zones to pose with a cone of macadamia nut or praline. Swish sensibilities applied to desserts emerge in full force during October’s Midautumn Festival, when China goes gaga for

mooncakes – a flaky pastry packed with dense fillings like salted egg yolk or lotus seed paste. In warmer parts of the country, iced versions are available from Dairy Queen. Inspired by China’s ongoing love affair with Italian vacations, gourmet gelato stores are now popping up in major cities, with one in Beijing’s dapper Sanlitun shopping district serving ice cream in the shape of cute puppy paws or pink hearts. As an irrepressible ice-cream fanatic myself, I had to make a pit stop the last time I was in Hong Kong to Lab Made, the city’s first (and so far only) vendor of flash liquid nitrogen-chilled ice cream, a method popularized by the likes of celebrity chef Heston Blumenthal. The outlet’s treats are made to order with a dramatic puff of nitrogen vapor, eliminating long freezing times and capturing fresh, sharper flavors. The instant-freeze method also allows chefs to experiment further with creative and ever-changing flavors, including many with a Hong Kong twist such as custard bun or purple sticky rice. It should therefore come as no surprise that ice creams are a preferred way to beat the heat in China, but such is their popularity that they are still available in the dead of winter. Up in notoriously bitter Harbin, for instance, you can still grab a popsicle at the local Ice Lantern Festival. I guess at least it won’t melt.

essay

Little Englanders By Andrew Knowles

‘Rufus!’ For crying out loud!

Illustration by Liu Xiaochao

New Year’s Eve. Not the best time to get stood up, but we rarely get a choice. Without much else to do in cold, gray Beijing, I decided to try my luck in the hotel bar – hoping for a sympathetic bartender willing to listen to my woes as I sipped at an Old Fashioned, just like in the movies. I am by no means flash with money but on this occasion I had splashed out on a rather fancy hotel. My intention was to surprise my girlfriend, but now she was stranded far from China’s capital due to a visa mix-up. So, here I was, alone in this plush hotel, heading into its equally plush hotel bar. I took a quick look around. It was quite busy – it was New Year’s Eve after all – and the clientele consisted of bright young Chinese, all dressed up and exuding nouveau riche confidence. There were no other foreigners that I could detect. I pulled up a bar stool and ordered a drink in my best world-weary manner, hoping my feigned habituation to this sort of environment would prompt some conversation. My bartender, strangely, hesitated a little before mixing my order. Couples and small groups engaged in conversation around me and I noticed that a buffet had been laid on in the corner. My solitude was accentuated by the fact that everyone in the bar that night seemed to know everyone else. So I entered that solo-person’s very modern fall-back of checking my phone. “I say, hello!” a very posh English voice, straight from Downton Abbey, brogued from behind me. “Are you part of our little group?” I turned to face two Chinese men, smiling widely, holding flutes of wine and plates of horsd’oeuvres. They resembled some kind of classic double-act. One was short and stout, sporting a V-necked cricket sweater and round bifocals which magnified a pair of sad-looking eyes that did not quite match his eager smile. His partner was a foot taller and half as wide. Dressed in a slightly oversized suit, his sallow complexion exuded a nervous hesitancy.

“I said, are you part of our little group? I don’t believe I’ve had the pleasure?” A little taken aback by his upper-crust English accent, a relic of a bygone England, I stammered a reply that revealed my ignorance of his meaning. “Oh, I see. We are all part of a society, you might say. We have these little get-togethers once in a while. All of us studied in the UK, you understand, myself in Cambridge and Rufus here in York. My name is Sebastian. And you are…?” Rufus! For crying out loud! I was beginning to realize why everyone had seemed so familiar with one another. It also explained my bartend-

er’s confusion, and the lavish buffet. I said I was unaware of their group and had just come in for a drink. Whilst eyes narrowed and the conversational temperature began to match that outside, I decided to take a gamble by rolling out my own credentials, name-dropping my own alma mater, the University of Edinburgh. “Really! We have a couple of Edinburgh alumni here I believe. What was your major?” A brief and strained conversation about my degree led inexorably to an awkward silence. “Well,” stated Sebastian to break the dead air, “do enjoy your drink.” The bartender had just placed my order on the counter. I turned to pick it up and when I swiveled back, the pair were backing away as if on invisible skateboards, smiling and nodding at me all the while. I returned to my phone, the friendly bartender busy doling out refills. For the next few minutes I sipped and, occasionally, glanced around. My two English graduates were chatting now with another gentleman and round the bar I could now see the signs of friends reminiscing and, perhaps, trying to impress with how bally well they all were doing now, what ho! My solitude was again broken, not this time by an upper crust staccato, but by a heavy hand on my shoulder. “This is a private party, you must leave,” said the gentleman who had been talking with Sebastian and Rufus just moments before. His English was also impeccable, if a little less genteel. I explained I hadn’t known, and he replied that he was surprised that I had been able to just walk in. He told me to finish my drink and go. Slightly frustrated, and feeling the world was definitely against me this evening, I did as I was told and sulked back to my lonely room. How very Chinese, I thought, of that pair. They wouldn’t dare be so rude as to tell me to leave themselves, so found someone else to do it for them. And then, I considered, how awfully British of them! NEWSCHINA I June 2015

Strange Fruit By Victoria Jin

NEWSCHINA I June 2015

I discovered that, for my Beijing relatives and expat friends, familiarity was central to personal comfort.

Illustration by Liu Xiaochao

‘You’re a banana.’ I was shocked. My Chinese language teacher had just labeled me as something that (a) only I had ever called myself, and (b), sounded kind of rude. I felt a twinge of resentment. Who was she to tell me who I was? It was okay for me to self-describe as a banana – yellow on the outside, white on the inside, and culturally confused through and through. The implication is that I neither belong in China nor the West. This fruitflavored metaphor, in short, consigned me to an ethnocultural limbo. I felt affronted. Did this adult, who wasn’t even a relation, just call me a banana? I felt unceremoniously placed into a much-maligned basket of strange fruit in China, right between drunken foreigner and unshaven commuter. Other overseas Chinese might be familiar with this feeling. It hits when you’re incessantly interrogated about why you sound American (I watched Friends and listened to All-American Rejects). Your cosmopolitanism is assessed by how many foreign languages you speak (determined by the ability to effectively communicate ‘a portion of fries, please’). Things tend to get most awkward when you are unceremoniously asked where you’re from (dude, I could tell you a very long story, but I don’t want to). Maybe a little background to this rant. You cannot be expected to empathize with my struggle without knowing the circuitous route by which I returned starry-eyed to the land of my forebears to discover that I no longer quite belonged. I was born and raised in Austria, studied in Scotland, and now I’m an exchange student at Peking University. I spent every second summer in Beijing to visit family, but never stayed longer than a month, during which all familial interactions took place around the traditional round table, with the conversation dominated by observations of my height and/or weight. In between questions and bites of fish generously portioned and presented to me by loving

relatives, I would stick to my assumed role of Shy Cousin From Abroad and just nod and smile a lot. Every year I wheeled out the same routine, having learned how best to inhabit my chosen

role, which, over time, became all my Beijing family expected of me. When I first moved (back) to Beijing, I saw it as a terrifying new opportunity for self-discovery. My ecstatic excitement over finally being able to get in touch with my (by now highly polluted) homeland without parental interference (‘Cab drivers will kidnap you and steal your organs!’), I was now on a mission to find pride in my Chineseness. Being constantly asked if I was Korean somewhat took the shine off my confidence, as did the gradual accumulation of little moments of exclusion. As it turns out, it’s not that China that didn’t accept me, it’s that I decided to, in a way, reprise my role of Shy Cousin, lodging myself in that indefinable no-woman’s-land between native and expatriate. After half a year living and working in Beijing, I realized that all my friends speak English. Other than my family, I don’t use Chinese to communicate outside of class. I still can’t read the People’s Daily without abusing handy translation app Pleco, and depend on photographic menus to ward off starvation. Most alarmingly, I couldn’t care less. I lost the motivation to stick to my mission. I got caught up in the everyday necessities of life. I discovered that, for my Beijing relatives and expat friends, familiarity was central to personal comfort. Speedy Internet and decent coffee, weekend Bloody Mary brunches, and sleek shopping precincts populated by walking eye candy were, simply, keeping me sane. Does this mean I won’t bristle if someone calls me a banana? Hell, no. I might be Chinese. But then again, I might be Austrian. Heck, I might just be an outsider everywhere I go. But I will still be me, still figuring all this out. In the words of Simple Plan, I’m just a kid and life is a nightmare. So let me just do me. At least that way, nobody can accuse me of being inauthentic.

Cultural listings Cinema

Bittersweet Youth Nostalgic coming-of-age movies depicting the chaotic, often bittersweet young adulthoods of their protagonists have become a popular trend among China’s filmmakers in the past few years. Following last year’s My Old Classmate and Fleet of Time, and 2013’s So Young, Ever Since We Love, the latest work by director Li Yu, starring Fan Bingbing and Han Geng, was released in the mainland this April. Adapted from a novel of the same name by well-known writer Feng Tang, the movie is about the “cruel youth” of a group of college students to whom love may be the only important thing in the world. The movie’s box office quickly broke 100 million yuan (US$16m) in a week, but reviews of the movie have been less than favorable. On culture-focused social networking site Douban, the movie scored a mere 6.5 out of 10 from 17,000 users.

Music

Book

The Sun Looks Round Thirteen years after his debut album Walking Up and Down, folk singersongwriter Wan Xiaoli has released his fourth studio album The Sun Looks Round. One of the most recognized folk singers in the wave of folk revival of the past decade, Wan is known for his plain but often unconventionally satirical lyrics, his very simple instrumental arrangements, and his somewhat “unpolished” singing. The new album continues in this vein, but with plainer and sometimes even childlike language. An independent release, Wan wrote, recorded and produced all the songs himself. Many critics have said that while the album, which comes four years after his last release, contains few surprises on first listen, it may have hidden depths that become obvious the second time around.

You Can’t Learn from Zhu Orange By Huang Tieying

Exhibition

Ink Wash New Generation As the “new ink-and-wash” painting craze of the past decade begins to fade, what does the future hold for the medium? An exhibition titled “Ink Wash on Paper” held from April to May at Beijing’s Rightview Art Museum tries to explore the theme by showcasing works from a dozen important young inkand-wash painters born in the 1980s. Works by these artists present varied directions of development, combine China’s long artistic tradition with modern elements and ideas. Influences from modern genres such as pop art, deconstructionism and expressionism, as well as oil painting, are all on display. Though some works retain a strong link with traditional forms, others deviate so far that the viewer may not immediately recognize them as ink-and-wash.

After six years in jail, then 75-year-old Zhu Shijian, former chairman of the board at State-owned Hongta Tobacco Group, began growing oranges with his wife on a mountain in Yunnan while on medical release. Following a 20-year career that saw Zhu grow Hongta from a tiny tobacco mill into one of China’s largest tobacco companies, Zhu was jailed for corruption, a fall many have attributed to backroom dealings during the murky early days of China’s market economy. Zhu and his wife worked for 10 years to develop their orange business, and their produce was so successful that Chinese media dubbed them “Zhu oranges.” Huang Tieying, a professor of organization management from Peking University, spent eight months researching Zhu’s orange business and composing a biography. After eleven drafts and two reviews from 87-year-old Zhu himself, You Can’t Learn From Zhu Orange by Huang Tieying was finally released in early April, to much favorable criticism from Zhu’s admirers and readers eager to “learn from” him. NEWSCHINA I June 2015

NEWSCHINA I June 2015

Commentary

China should adopt a comprehensive approach to realizing its “One Belt, One Road” initiative Increased Chinese overseas investment requires better researched and coordinated efforts to secure both the safety of both Chinese workers and reliable investment By Wu Peng

n his recent visit to Islamabad, well result in heightened tensions with President Xi Jinping signed China often has to forsake local communities, leaving no buffer agreements with Pakistan zone when this tension leads to conits entire stake when to invest US$46 billion in infrastrucflict. conflict breaks out ture projects to build a China-Pakistan As China increases its overseas inEconomic Corridor (CPEC). The deal vestment in carrying out the One marks China’s first major concrete step Belt, One Road initiative, the Chinese in its high-profile “One Belt, One Road” initiative. government needs to have a clear and comprehensive strategy to However, as China makes progress with increasing its invest- deal with these issues. ment along the New Silk Road, the government must work out Firstly, the government should provide security guidelines rea comprehensive strategy to ensure the profitability and safety of lating to target countries. For example, China could adopt a ratsaid investment. ings system to assess the risk level of a country, and offer advice Previous experience has shown that there are two major cat- on a list of contingency plans accordingly. egories of problems with China’s existing overseas investment: Secondly, given that One Belt, One Road is a national strategy, lack of proper research into target countries, and a reactionary the government should coordinate the policies and actions of response to inadequate security provision. different agencies, including the Ministry of Foreign Affairs, the In recent years, the Chinese navy has launched several major Ministry of Finance, trade organizations, the military, research missions to evacuate Chinese nationals from conflict areas such groups and local players to offer a package of solutions in a counas Libya, Syria and, most recently, from Yemen. While these try. evacuation efforts were largely successful, they also reflect the Thirdly, the government should incorporate the private sector vulnerability of Chinese investment in cases of political turmoil and non-governmental organizations into the process, to nurture and conflict. deeper relationships with local societies, promoting soft power In many cases, Chinese investors have ventured abroad with- and minimizing friction with local communities. out carrying out sufficient research and risk assessment regarding According to Ministry of Foreign Affairs, Chinese embassies political and social tensions, and failing to establish a contin- throughout the world handled more than 59,000 consular assisgency plan to ensure the safety of both Chinese nationals and tance and protection cases in 2014, a 40 percent increase on the Chinese assets. The result is that China often has to forsake its 42,000 cases recorded in 2013. As China’s overseas investment is entire stake when conflict breaks out. expected to grow in the coming years, this issue should be conIn countries where conflicts are less intense, Chinese corpo- sidered a priority on the government’s agenda.  rations often try to protect their employees and investment by building high walls separating their projects from the local com- The author is a consultant at WZG Strategy Consultants, a private munity. Such a strategy may work in the short term, but may think tank.

NEWSCHINA I June 2015