June 2016 by China Newsweek Corporation

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Volume No. 094 June 2016

INTERNATIONAL

EDITORIAL

Published by China Newsweek Corporation Publisher: Zhang Xinxin Executive Director: Zhang Xinxin

The impact of China’s tax reform will go beyond economics

Editor-in-Chief: Wang Xiaohui Editorial Office Managing Editor: Zheng Zhonghai Advisor: Liu Dizhong Senior Editor: Ruan Yulin Copy Editors: Jack Smith, Brittney Wong Lead Writers: Yu Xiaodong, Li Jia Editors: Wang Yan, Yuan Ye, Xie Ying, Du Guodong First Reader: Wesley Jacks Address: 5th Floor, 12 Baiwanzhuang South Street, Xicheng District, Beijing, China Post Code: 100037 Tel: 86-10-88395566 Fax: 86-10-88388045 Email: readers@newschinamag.com www.newschinamag.com Art Department Art Director: Wu Shangwen Art Editor/Designer: Zhang Dawei Publishing and Development Office China Newsweek Corporation President: Peng Weixiang Tel: 1-212-481-2510 Fax: 1-212-481-2503 Address: 820 2nd Ave, 3B-C, New York, NY 10017, USA Email: readers@newschinamag.com Toronto Office Director: Xu Chang'an Address: 51 Halstead Drive, Markham, ON Canada L3R7Z4 Tel: 1-905-604-6150 Fax: 1-905-604-6170 Email: canada@newschinamag.com Marketing Director: Wang Chenbo Account Manager : Ren Jie Tel: 86-10-88388027 Circulation Manager: Yu Lina Tel: 86-10-88311834 Advertising Director: Gao Weiwei Tel: 1-212-481-2510 Marketing Promoter: Jerry Meng Tel: 1-212-481-2510 New York Office: Tan Hongwei, 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: Wang Xiujun Manila Office: Zhang Ming Berlin Office: Peng Dawei Sydney Office: Lai Hailong 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 2016

uring the annual National People’s housing prices. Congress session held in March, ChiFor heavy and often polluting industries, which nese Premier Li Keqiang announced yield a bigger VAT windfall than others, local governthat, as of May 1, China’s value-added tax (VAT) ments have resorted to lowering the price of indusreform program will be expanded to the construc- trial land and loosening environmental protection tion, real estate, financial and regulations to appeal to businesses. consumer services sectors. If fully As a result, China’s tax code has implemented, the impact of this become a major contributor to China’s tax code reform will be both economic the hot-button issues of rocketing has become a and political. housing prices and industrial overmajor contributor Firstly, extending VAT to incapacity. to the hot-button clude the affected industries would According to the government’s issues of rocketing policy agenda, the implementabring all industries under the same tax code, which could lower their tion of tax reform will be followed housing prices overall tax burden. In the past, as by the restructuring of the revenue and industrial these industries were eligible for sharing policies of central and local overcapacity. business tax while other industries governments. Currently, all busipaid VAT, they would find themness tax and 25 percent of VAT selves effectively subject to double revenue goes to local governments, taxation, paying both the VAT on while 75 percent of VAT goes dipurchases made from up-chain inrectly to the central government. dustries and the business tax payWith the scrapping of business tax, able on their products and servicreform of tax revenue distribution es. Once the proposed reforms are becomes essential, providing a rare introduced, businesses in these industries will be able opportunity to address problems rooted in the curto offset VAT paid on purchases from other indus- rent system, such as local authorities’ excessive depentries against the VAT applied to their products, while dence on real estate sales. business tax is eliminated entirely. It is estimated that VAT reform will inevitably lead to an overhaul of the overall tax burden of China’s service industries China’s income tax system. Currently, income tax will decrease from 5 percent to 3 percent, injecting only accounts for 6 percent of total tax revenue. That vitality into key economic sectors and boosting the ratio is 35 percent in the US, and 20 percent in many prospects of economic growth, an ongoing concern emerging economies. As China’s income tax is essenfor decision makers. tially a salary tax, the wealthy and those with signifiSecondly, by applying VAT to the construction cant gray incomes are largely exempted. By scrapping and real estate sectors, it is hoped that officials can business tax, the government has apparently adopted accelerate much-desired economic restructuring. In a “direct taxation” approach. With a fairer and more the past, business tax and VAT have respectively been comprehensive income tax code, China can achieve the top two sources of revenue for local governments. multiple goals, including reducing the overall tax rate With business tax applied to construction and real for business, securing a stable source of revenue and estate, and VAT applied to heavy industry, local gov- addressing the problem of the ever-widening income ernments consequently adopted policies to maximize gap. their potential tax take. For example, as higher land The successful implementation of the reform and housing prices bumped up business tax revenue, program will be a major factor that helps determine local governments resorted to various means, such as whether China can achieve its overall dual policy limiting the amount of land allocated to the sector goals of economic sustainability and political stabiland liberalizing financial policies, in order to inflate ity. 

Contents

DRIVEN, DEMANDING, DISCERNING

P16

Editorial

Politics

01 The impact of China’s tax reform will go beyond economics 10 Social Insurance: Who Pays the Price? 13 Urbanization: Changing Hands

Cover Story

International

P34

16 Gen 2-D Final Fantasists/Breaking the Wall

28 31

Donald Trump: Mixed Feelings G7 and China: Pressure Point

P40 NEWSCHINA I June 2016

Photo by CFP

China’s ‘2-D’ generation, young people raised on a diet of imported anime culture, are now reshaping the mainstream to cater to their formerly fringe tastes. The domestic market is struggling to compete, but some enterprising individuals are rising to meet this challenge. NewsChina lifts the lid on the subculture that is increasingly setting China’s esthetic agenda

Contents

P56

P13

Society

34 Medical Profiteering: Hijacking Health 37 Blood Shortage: Pennies for Plasma 40 Internet Celebrities: The Business of Online Stardom 43 School Districts: Rough Trade Economy

46 Yu Miaojie: Trade Talk

P60

Visual REPORT

56 On a World Stage

OUTSIDE IN

04 05 06 08 49 62 64

MEDIA FOCUS What They Say NEWS BRIEF Netizen Watch China by numbers ESSAY Flavor of the Month/real Chinese

60 Charming Kenting: Spring Break!

P37

Culture

50 52

Sent-down Youth: Facing Suffering Zhang Huoding: Lone Star

NEWSCHINA I June 2016

NewsChina, Chinese Edition

Vista

April 11, 2016

April 1, 2016

Green Crusader

Immigration Scam

In 2015, China’s Ministry of Environmental Protection (MEP) launched supervision campaigns in 33 cities, talked with 15 citylevel officials about tightening pollution controls, and imposed a total of 4.25 billion yuan (US$653.8m) in fines, an amount 34 percent higher than that of 2014. The MEP also shut down several plants that have been polluting the environment for years in defiance of multiple warnings. On top of the new, harsher environmental protection law effective as of January 1, 2015, new environmental minister Chen Jining is believed to have made great contributions toward the MEP’s efficacy. Although he worked at Tsinghua University for 17 years, Chen, unlike traditional academics, has been voicing great concern over pollution disasters nationwide. Before he was promoted to the position of minister, he led several well-known environmental appraisals and was renowned in his field. Chen is now restructuring the ministry to improve the supervision of different types of pollutants, and preparing to crack some “hard nuts,” such as the emissions of State-owned petroleum giants SINOPEC and CNPC, something his predecessors have been reluctant to tackle. Minsheng Weekly March 30, 2016

Dental Disaster Official statistics show that 80 percent of middle-aged and elderly people in China suffer from oral diseases, particularly dental ones. Many of these patients, however, paid little attention to their dental health until problems arose. To make matters worse, the government has failed to provide price guidelines for dental treatment, creating an industry rife with arbitrary charges. The lack of qualified dentists and resultant imbalance between supply and demand, coupled with the fact that most dental treatment is not included in basic medical insurance, all contribute to the high price of dental treatment in China. According to the National Health and Family Planning Commission, there are an average of 85 dentists for every million people in China. Experts suggest that the government should tighten its supervision of this sector, increase transparency in the development and sales of dental medications and equipment, and improve and enforce toplevel policies.

Canada has long been one of the most popular destination countries for wealthy Chinese looking to emigrate. So popular, in fact, that quite a few people have enlisted illegal immigration agencies to fast-track them through the process. About 1,200 Chinese people gained Canadian permanent residency or citizenship between 2006 and 2014 thanks to Wang Xun, a Vancouverbased Chinese Canadian and the owner of two unlicensed immigration consulting firms. Wang forged documents, altered his clients’ passports, provided fake stamps and manufactured the appearance of Canadian residency to allow his clients to retain residency or obtain Canadian citizenship. His large-scale operation is one of the biggest cases of immigration fraud in Canadian history. There are grounds for some clients who have gained Canadian citizenship to have that status stripped. If that were to occur, they would become stateless, as the Chinese government does not recognize dual citizenship. Caijing March 21, 2016

Big Data Chinese Premier Li Keqiang said in the annual government work report this year that the country has reached an economic turning point and it is time to develop the “new economy.” To do this, the government will step up investment in research and development, enhance more industries with Internet technology and build channels through which innovators can cooperate. Li also pointed out that the application of big data, cloud computing and the Internet of Things will be a priority in the period covered by the country’s 13th Five-year Plan (2016-2020). China’s unified national platform of government data is expected to launch by the end of 2018 and gradually become accessible for public use in more than 20 arenas, such as precision marketing, healthcare and finance. Data in China has become a gold mine for researchers and is likely to bring fundamental changes to various trades and industries. Experts, however, warn that some government bodies’ are monopolizing data, which remains a major obstacle blocking the public’s access to this mountain of information. China Financial Weekly April 5, 2016

Structural Changes The number of Chinese enterprises involved in mergers and acquisitions (M&As) reached a record high last year, and this momentum has continued into 2016. Multiple coalescing factors are behind the rise in M&A restructuring: China’s supply-side reform, the necessary transformation in traditional industries bogged down by overcapacity, burgeoning industries eager to expand market share, and industrial and financial capital looking to flow to industries and businesses with greater global potential. While the large number of M&A cases can give the market a boost, it comes with its own set of risks. Many listed companies are leaning on M&As to achieve rapid growth rather than developing more sustainable practices. NEWSCHINA I June 2016

Luo Jianhui, program management director of China’s State Administration of Press, Publication, Radio, Film and Television, demanding a further tightening of censorship of online TV shows containing “vulgar” content. Recent regulations list depictions of high school romance, extramarital affairs and homosexuality as “harmful.” “Printing warnings on cigarette packaging does not embrace Chinese traditional culture.” Deputy Director of the State Tobacco Monopoly Administration Duan Tieli voicing opposition to China printing disturbing images of diseased lungs and skulls on cigarette packaging.

“We are trying to stop‘student lovebirds’from feeding each other in the dining hall.” Li Xinnian, principal of a high school in Luoyang, Henan Province, explaining the sex segregation of his school’s cafeteria.

“When colleges and universities are rushing to diversify, many departments with little experience, especially on emerging campuses, are actually of poor quality. Even prestigious universities are not immune to this phenomenon.” China Youth Daily commentator Chen Zhiwen voicing support for a recent Ministry of Education decision to revoke 50 doctorate and master’s degrees held by what it termed were “unqualified” academics.

“If you permit yourself to sleep on a cloudy day, you will awaken in complete darkness.” Journalist Xiong Peiyun condemning the suppression of reports on a recent scandal involving improperly stored vaccines, stating that the professed concerns over public panic were no excuse for concealing the extent of the issue.

NEWSCHINA I June 2016

Illustration by Wu Shangwen

“Shows banned from TV are also banned from the web.”

“What the urban management officials face is an array of complicated issues related to different interest groups. It is crucial to find a win-win solution for all parties.” Liu Yuanju, a researcher with the Shanghai Institute of Finance and Laws, opposing recently issued restrictions on electric bicycles and motorcycles.

“The more Chinese students overseas clump together and shut themselves off, the harder they will find it to integrate into society when they come back.” Shi Zehua, an associate professor with Beijing Foreign Studies University, attempting to explain low employment rates among Chinese students returning from overseas.

“The key to the US market is to improve product quality. Without a spirit of craftsmanship, advertisements in Times Square are nothing but a meaningless show.” International relations specialist Sun Xingjie on the fondness among Chinese enterprises for advertising in New York City’s Times Square.

“The public’s right to know is locked in by officialdom, with information inaccessible even to most officials. Decision-making has thus become a kind of‘weapon’used to lay others low by breaking a scandal. Such‘weapons’are only effective because of the concealment of facts.” China Youth Daily commentator Ma Jinbiao explaining public delight in witnessing officials reporting on one another.

Top Story

China, US Enhance Cooperation on Nuclear Security

Chinese President Xi Jinping attended the fourth Nuclear Security Summit held in Washington, DC on March 31 and April 1, during which China and the US published a joint statement pledging to improve cooperation on nuclear security. As in previous years, the 2016 summit continued to examine how attending countries could respond to nuclear terrorism, and how to improve the security of nuclear stockpiles. During the summit, Xi spoke about China’s efforts on nuclear security, calling on each country to take more responsibility for nuclear security and enhance international cooperation on the issue. Xi’s proposals were echoed by US President Barack Obama, who said that the US hopes to deepen its nuclear security cooperation with China. Just one month prior to the summit, an experimental Sino-US nuclear security demonstration center opened its doors in Beijing. The biggest nuclear security project between China and the US to date, the center will provide Asia-Pacific countries with advanced training in nuclear security procedures.

According to Chinese media reports, China and the US have cooperated on nuclear security since 2005, when the two countries jointly conducted a nuclear waste management program in Beijing. The new Beijing center, which covers an area of 53 square kilometers, entered the planning phase in 2011 and was completed at the end of 2015 following 28 rounds of bilateral negotiations. “The demonstration center was initially designed as a simple training center,” Xu Zhenhua, deputy director of China Nuclear Security Technology Center, told NewsChina. “But, during the negotiations, China proposed expanding its functions. Now, the center serves to conduct cooperation and training on nuclear security, nuclear waste management, nuclear import and export management, as well as performing testing and issuing certification for relevant technologies.” At the summit, a scale model of the Beijing demonstration center was exhibited as an example of Sino-US cooperation on nuclear security, which the Chinese side is already using as an example of what top leaders have termed a “new big power relationship.”

Culture

Literary Win For Chinese Writer The 2016 Hans Christian Andersen Award (HCAA), often called the Nobel Prize for children’s literature, was presented to Chinese writer Cao Wenxuan, the prize’s firstever Chinese recipient. According to the International Board on Books for Young People (IBBY), the organization that presents the prize, 62-year-old Cao has distinguished himself by rooting his stories in real life and moving readers with the power of “kindness and beauty.” One of his signature novels, Bronze and Sunflower, for example, was set during the time of the

Cultural Revolution (1966-1976), which Cao experienced in his boyhood. “Cao Wenxuan’s books don’t lie about the human condition; they acknowledge that life can often be tragic and that children can suffer. At the same time, they can love and be redeemed by their human qualities and the kindness they sometimes find when they are most in need,” commented IBBY on its official website. So far, 26 writers and 20 illustrators have received the HCAA. NEWSCHINA I June 2016

Business

New Duty on E-imports China’s General Administration of Customs recently announced the implementation of a new duty on overseas goods which enter China after being purchased online. Starting April 8, Chinese customs officials have been empowered to collect additional value-added tax (70 percent of that already charged on regular imported goods) and consumption tax (a luxury tax) on all overseas goods purchased via the Internet valued at more than 2,000 yuan (US$308) per item, a raising of the previous 1,000-yuan (US$154) threshold, with exemptions capped at a total combined expenditure of 20,000 yuan (US$3077) in a single year. According to officials, the regulation will “better manage the e-commerce business and create a fairer environment.” China already levies a 10-50 percent import duty on certain personal items brought into the country by post, a rate which professional importers believe cuts into their profits. Analysts have stated that the new tax will increase the price of non-luxury overseas goods, making wildly popular imports like infant formula, for example, up to 20 percent more expensive. However, given public distrust in the quality of many domestic goods and the convenience of e-commerce, it is hard to say how much the new regulation will help swell the coffers of Chinese manufacturers. Laws

China’s Supreme Court Revises Rules of Court China’s Supreme People’s Court (SPC) issued its new revision to its Rules of Court on April 14. The first revision to this specific code since 1994, the new Rules of Court, which will take effect as of May 1, consist of 27 articles, including 15 new additions that analysts claim are designed to better protect human rights and increase objectivity in the judiciary. Highlights of the new revision: 1. Any detained person or plaintiff does not need to wear a uniform which identifies the organ he or she has been detained by. Restraints are forbidden in the courtroom. 2. Each party should be treated equally. Any discrimination on the part of the court may be reported. 3. Anyone who threatens the safety of a courtroom will be punished according to relevant laws. 4. Anyone who destroys court property or evidence or disrupts trial proceedings will be punished according to relevant laws. 5. Journalists are permitted to bring mobile communication tools into the court if they obtain clearance first. 6. Judges and other relevant court personnel should wear business suits. Those attending court should be appropriately dressed.

Society

Left-behind Children Investigation The Chinese government has ordered 27 departments to jointly work on protecting children who are left behind in villages by parents who have migrated to the cities in search of work. The plan involves a joint conference convened by the leaders of relevant departments, including the Ministry of Education, the Ministry of Finance and the Ministry of Public Security, with attendees exchanging ideas on how to manage this chronic social problem. As more and more rural people have flooded into cities for a better job, some 60 million of their children, who are denied access to urban welfare or education due to China’s residence permit system, are left behind in small villages either alone or with elderly relatives, with many lacking even basic adult supervision. In response to Premier Li Keqiang’s challenge to relevant departments to find a cure for this “disease,” China’s State Council issued an official document in February on protecting left-behind children, calling on relevant personnel to report any problems relating to these children in their jurisdictions, especially neglect, truancy or physical and sexual abuse. The State Council also launched a nationwide investigation in March to compile a database of left-behind children.

Advertorial

AkzoNobel, a leading global paints and coatings company and a major producer of specialty chemicals, recently announced the launch of its 2016 China Student Sustainability Award (CSSA). Established in 2011, the CSSA is the first award in China to recognize the environmental contributions university student organizations make to their communities. The award’s official website has so far received more than 1,000 applications from 185 universities in 77 cities, engaging more than 10 million people across China. This year, AkzoNobel will continue its partnership with the School Department of the Central Committee of the China Communist Youth League and launch a special project which will analyze Chinese students’ current approaches to community outreach and better coordinate student opportunities. NEWSCHINA I June 2016

Photos by Xinhua and CNS

AkzoNobel Launches Sustainability Award for Chinese Students

Humiliating More and more people are turning away from the traditional Chinese wedding custom of playing often insulting and demeaning pranks on bridesmaids in order to spice up the celebration. Opposition reached a peak when footage emerged showing a bridesmaid at the wedding of actor Bao Bei’er being thrown into a swimming pool by the groomsmen. In the leaked clip the bridesmaid was visibly frightened, while the groomsmen manhandled her until another bridesmaid intervened. Netizens criticized the casually aggressive chauvinism on display, urging male celebrities to take the lead in respecting women and rejecting sexist traditions.

Poll the People The Beijing traffic management bureau recently announced a ban on electric bicycles and motorcycles on 10 major thoroughfares, effective as of April 11. Some other cities, including Shenzhen and Guangzhou, implemented similar restrictions or bans at the same time, sparking debate online. Supporters of the bans believe they will help to reduce the high rate of traffic accidents caused by these two vehicles, many of which are driven illegally. Opponents argued that the ban wrongfully punishes law-abiding commuters and criticized the government for its simplistic approach to urban management.

What do you think of the bike ban? It’s reasonable.

59.1%

It’s unreasonable. 37.3%

Outrageous

Thought-Provoking

I don’t care.

3.6%

Source: www.sina.com.cn

Most Circulated Post Retweeted: 20,158 times by April 10

Chinese women were given another reason to fear for their safety after a video clip was released online showing a young woman being assaulted by a man in a hotel corridor while staff stood idle and watched. According to the victim, who uploaded the clip, she would have been abducted by her attacker if another guest hadn’t intervened. Local police refused to launch an investigation until the video of the attack went viral, angering her further. Pressured by public criticism, police now claim to have apprehended the suspect in the video, who reportedly confessed that he was a member of a prostitution ring and had mistaken the victim for a sex worker working for a rival organization. Netizens decried the seeming superiority of microblogs over the police in terms of dispensing justice, while also speculating whether the police were involved in prostitution at the same hotel.

Zhu Jiang (pseudonym), a 36-yearold paraplegic man, caused an outpouring of public sympathy after it was revealed he had hired a hitman to help end his life. According to media reports, Zhu had been bedridden for four years following a car accident and was too sick to even commit suicide. Unwilling to live in endless pain, Zhu paid his would-be killer online. The man he hired had Zhu discharged and took his client to a hotel room where he proceeded to stab him. Zhu apparently changed his mind about the arrangement midway through the attack, calling for help. However, he was stabbed over 10 times, leaving him in a coma. The case triggered public discussion of the possibility of legalizing euthanasia in China.

On April 1, 2001, 31-year-old pilot Wang Wei died when his fighter collided with an American surveillance aircraft which, according to Chinese media reports, strayed into China’s exclusive economic zone in the South China Sea. While his body was not located after a two-week search for his downed plane, Wang was declared dead and proclaimed a martyr. On the 15th anniversary of his death, an official microblog account commemorating his death was published by the police department of Jiangning, Jiangsu Province. “Since our first online commemoration in 2012, we have received a growing number of retweets, from 200 to over 20,000. It means that more and more people will remember Wang Wei and he will never leave us. 81192 (the number of Wang’s fighter), welcome back home!” NEWSCHINA I June 2016

WHO’S

Top Five Search Queries On

HOT? WHO’S NOT?

over the week ending April 10 Martyr Police Officers 381,441

438 Chinese police officers reportedly died in the line of duty in 2015, 11.5 percent more than in 2014.

Housing Fever Climbdown 167,337

Recent measures to curb rocketing housing prices, such as cracking down on illegal loans and tightening the restrictions on second home ownership, have begun to take effect in big cities like Beijing and Shanghai.

Subway Stud

Hotel Attack 159,783

Wan Jialing, a 19-year-old Taiwanese drama student, found himself famous overnight after a mainland visitor to the island snapped two shots of him with her cell phone while riding the subway, and he responded with a dazzling smile. A legion of fans were soon retweeting the pictures of the fresh-faced youth, saying that Wan’s smile was “heartmelting.”

A video of the attempted abduction of a young woman from a hotel corridor in full view of rubbernecking staff sparked controversy.

Happiest Job 132,705

A survey jointly conducted by China Xiaokang magazine and Tsinghua University ranked freelancers as the happiest workers in China in 2015, followed by teachers and officials.

Passenger Blacklist 21,198

Top Blogger Profile Stephen Hawking Followers: 3,168,907 by April 14 British physicist and Nobel Prize winner Stephen Hawking opened a microblog account on sina.com.cn on April 12, earning over one million followers within eight hours. “Greetings to my friends in China … My first trip was in 1985 when I traveled across your remarkable country by train. In my physical travels, I have only been able to touch the surface of your fascinating history and culture. But now I can communicate with you through social media,” read his first tweet, which earned nearly 400,000 comments. Many netizens expressed their admiration for Hawking’s work in the field of cosmology, in particular his theories concerning black holes. “Thank you for your great contributions to humanity,” said one netizen. “How lucky the world is to have you here,” remarked another. The next day, Hawking’s microblog once again boiled over after he tweeted that he had “launched a mission to the stars.” “Breakthrough Starshot aims to develop a ‘nanocraft’ – a gram-scale robotic space probe – and use a light beam to accelerate it to 20 percent of the speed of light. If we are successful, a flyby mission could reach [triple-star system] Alpha Centauri about 20 years after its launch, and send back images of any planets discovered in the system,” he wrote. The post attracted nearly 140,000 comments, many of which said that they felt excited and honored that Hawking had chosen to share his plan with the world. NEWSCHINA I June 2016

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

The Civil Aviation Administration of China listed three Chinese people on its first-ever air passenger blacklist for so-called “uncivilized behavior.”

Die-Hard Fan A 19-year-old woman in Xiamen, Fujian Province, physically abused a peddler when she found the vendor selling “hell money,” fake banknotes burned as offerings to the dead, printed with the image of her idol, South Korean actor Song Joong Ki. The woman was later stopped by a police officer and fined 85 yuan (US$13). The story polarized online opinion, with some slamming the woman for blindly worshiping her idol, while others mocked the tradition of hell money.

Poor but Dignified Two migrant workers working in the Baiyun Port of Guangzhou, Guangdong Province, earned plaudits online after they returned US$356,000 in misplaced cash to three Ethiopian tourists despite media reports claiming that both men, from rural Henan Province, sent nearly all their meager wages back home due to their families’ poverty. Both went on record saying they would “never pocket anything that did not belong” to them.

Selfie-cide While attempting to take a selfie in a field of roses, a 19-year-old woman was hit and killed by a train in Foshan, Guangdong Province. A witness told media that the train had already blown its whistle, but the woman paid no attention to it, even though she was standing on the railroad tracks. She even ignored a passerby who warned her to get out of the way. A netizen inadvertently caught the tragedy on camera, but even the clip’s circulation online did little to diminish the popularity of taking selfies in the same spot.

Politics

Social Insurance

Who Pays the Price?

As more local governments cut employer contributions to social insurance funds in order to boost struggling businesses, employees worry they will ultimately foot the bill By Cai Rupeng and Xie Ying

n March 23, the Beijing municipal government announced it is reducing the maximum amount employers can contribute to work-related injury insurance funds, lowering it from the equivalent of 2 percent of employees’ monthly wages to 1.9 percent. Recently, 11 other provinces and municipalities have issued similar policies that reduce employer contributions to various social insurance funds. Some of them, such as Shanghai and Hangzhou, the capital of Zhejiang Province, took this a step further and reduced employer contributions to pension and medical insurance funds as well. These funds represent the two most sizable chunks of China’s social insurance package; depending on the region, the employer contribution toward these funds per employee is equal to about 30 percent of that employee’s wage. These locally enforced shifts appear to be a response to the central government’s call to lighten companies’ financial loads in order to help lift China’s economy out of stagnation. Currently, social security tacks on as much as an extra 35 percent of employee salaries to businesses’ expense reports. In other words, if employees earn 10,000 yuan (US$1,588) a month, their employers need to pay up to an additional 3,500 yuan (US$556) toward social security funds, split between pensions (20 percent), medical insurance (8-10 percent), work-related injury insurance (0.2-3 percent), unemployment insurance (1 percent), and maternity insurance (0.8-1 percent). Now that Shanghai and Hangzhou have taken the lead in lowering employer contributions to pension and medical funds, analysts have speculated that more local governments will follow suit. Although officials and business owners hope this move will help pull enterprises out of an economic slump, everyone else views it with trepidation. While employers are contributing less to pension funds, China’s aging population means an increasing number of retirees are making withdrawals. Current workers worry they will be the ones forced to make up the difference. Unless the government successfully reforms the system, they see only two possible outcomes that will save the country’s diminishing pension funds: either today’s employees will suffer pension cuts when they retire or they will have to work longer

because of a raised retirement age, a change the central government has been planning for years.

Small Steps

The Chinese government first expressed concern over employers’ insurance burdens back in 2013, during the Third Plenary Session of the 18th Communist Party of China Central Committee, when officials approved a resolution to “properly reduce employers’ social insurance contributions.” The demand was later written into the government’s 13th Five-year Plan (2016-2020). Last year, the central government lowered employer contributions in three categories: unemployment insurance (from 3 percent of monthly income to 2 percent), maternity insurance (from a 1 percent cap to a 0.5 percent cap), and work-related injury insurance (from 1 percent to 0.75 percent). After these changes were announced, accounting expert Ma Jinghao wrote that these maneuvers would help stimulate an economic recovery by enabling enterprises to devote more funds to labor and production. However, none of these changes touched the two giants in China’s social insurance system: medical insurance and pension funds. The central government’s reductions only represent a maximum of 1.75 percent of an employee’s monthly wage, having “very little effect” on employers’ overall financial burden, Chinese Academy of Social Sciences (CASS) researcher Tang Jun told NewsChina. Reducing the heftier costs caused by medical insurance and pension contributions would do much more to relieve this pressure, he added. China’s Ministry of Human Resources and Social Security (MOHRSS) has echoed this idea. At a press conference in early 2015, MOHRSS spokesman Li Zhong acknowledged that Chinese enterprises’ contributions to pension funds were “on the high side,” and the amount given to the other four funds (medical insurance, workrelated injury insurance, unemployment insurance and maternity insurance) was significant as well. Chinese Premier Li Keqiang brought up the issue during this year’s annual political meetings known as the Two Sessions, urging local governments to adjust employers’ social security contributions. NEWSCHINA I June 2016

The municipality of Chongqing in central China was the first to take action. The local government issued a new policy that allowed small businesses to pay the equivalent of 12 percent of their employees’ wages to pension funds, instead of the previous 20 percent. Hangzhou and Xiamen, the capital of Fujian Province, subsequently announced they would lower employers’ contributions to medical insurance. On March 21, the Shanghai government held a press conference on social insurance, announcing it would reduce local employers’ contributions to pension and medical insurance funds by a total of 2 percent, the biggest such adjustment nationwide. “Shanghai employers were paying the equivalent of 35 percent of each employee’s salary toward social security funds, much higher than the employee’s contribution of 10.5 percent,” said deputy mayor Shi Guanghui at the press conference. “Businesses are at the heart of the market economy and the largest contributor to social security, making their stable development a top priority,” he added.

Resistance

Although some local governments are pushing forward with these changes, others are pushing back. The reality is that most cities, including Beijing, simply cannot afford to adjust contributions to the pension fund, the biggest piece of the social security pie. With an aging society and a shrinking workforce, cities are struggling to keep pension funds afloat, according to China University of Political Science and Law professor Hu Jiye. “It really is a hard nut to crack,” he told NewsChina. His

NEWSCHINA I June 2016

words were proven by Zhang Hao, a fund inspector at the MOHRSS. At a public economic forum held last June in Qingdao, Shandong Province, the official revealed that the amount collected by pension funds in each region has grown at a decreasing rate since 2008, while withdrawals keep rising. Some cities’ funds would already be in the red if not for government subsidies. “Some regions, like Guangdong and Zhejiang provinces, have saved a relatively high amount [in their pension funds], so they can choose to lower rates,” said Jin Weigang, the MOHRSS’s head of social insurance. “Others that are already dipping into past years’ funds or that need large government subsidies should consider this [cut] carefully.”

Workforce Worries

While some local governments are hurting, employees worry they are the ones who will really feel the pain. Many are concerned that the general pension funds are already getting shortchanged by greedy employers who purposefully underreport their employees’ salaries in order to pay less toward social security. “I earn 15,000 yuan [US$2,307] per month, but when applying for social security, my employer defined my monthly wage as only 5,000 yuan [US$769],” Gao Bin (pseudonym), a 32-year-old Beijing resident working at an Internet service company, told NewsChina. “[This practice] is quite common throughout the country. It makes me wonder how the government will have enough money to pay my [future] pension when the employers are allowed to give less?” The government is attempting to alleviate workers’ concerns. The MOHRSS has reiterated that the final amount of social security that employees receive has less to do with how much employers contribute over a fixed period of time and more to do with the economic status of the city giving out the pension, as well as the average income level of the local employees. On the surface this seems true. China’s pension payments consist of two parts: the amount originally paid by each individual (received as a lump sum after retirement) and the regular payments that are provided by the local government, not the individual’s employer. The problem is, of course, that the local government’s funds come straight from local employers. “Shanghai currently has a surplus in social security funds, including its pension fund, so reduced [employer contribution] rates will not impact pension payments,” read the Shanghai government’s latest document on the issue. But as China’s demographic problems cause pension fund contributions to dwindle and payouts to multiply, the country’s youth are left in the lurch. If the pensions of current retirees stay stable or increase in coming years (as the government has pledged in the past), people in today’s workforce will face an even more uncertain future. A safer way to boost pension funds is to increase the number of

Politics

Photo by CFP

Rotten Roots

Two retirees return from a trip to the hospital, Shanghai, December 18, 2013

people paying into the system by raising the retirement age. China’s current retirement age is one of the lowest in the world; men retire at 60 and women retire at either 50 or 55, depending on employment type. The government first proposed this perennially unpopular idea three years ago, triggering a wave of public opposition. During this year’s Two Sessions, the MOHRSS told the media that it will release a detailed plan to increase the retirement age by the end of 2016. The ministry pledged to implement the plan gradually and slowly, but now onlookers are concerned that officials will be given incentives to quicken the process in order to offset decreased pension contributions from employers. “Reducing businesses’ social security contributions gives them much-needed relief, but the reduction will also lead to a greater pension fund shortfall,” Yang Yansui, director of Tsinghua University’s Research Center of Employment & Social Security, told State broadcaster CCTV. “It is truly a dilemma.” In an online survey about lowering employer contributions to social security on the news website view.news.qq.com, 26 percent of more than 25,000 respondents chose not to support the reduction. “I don’t oppose easing companies’ burdens, since that is good for us employees as well,” posted one netizen following the survey. “But I do not want to pay the final price for it. I think the government should find other ways to reduce pressure on enterprises.”

China’s current pension fund system, in which funds come from two sources, individuals and employers, was implemented in 1997. Before that, China’s pensions were paid directly by employers, many of which were State-owned enterprises (SOEs). In order to reduce the debts of some sluggish SOEs and accumulate funds for the pension payments of a growing number of retirees, the government started to collect money from both employees and employers, separating funds by province or municipality. Each employee’s contribution is kept until he or she retires as an untouched sum, while employer contributions are immediately distributed as pension payments to current retirees. However, given that people who retired before the 1997 reform never paid into the system, the government inflated employers’ contributions to ease initial pension pressure. “In the 1980s, when Chile was pioneering pension reform, the Chilean government had to sell state-owned copper mines to fill the financial gap caused by the reform,” Hu Jiye said. “The Chinese government, according to some experts who drafted the 1997 reform document, [covered this cost] by raising insurance contributions by several percentage points.” Yet in some regions, employer contributions still do not cover pension expenditures. Poorer areas where large chunks of the workforce have migrated elsewhere are the worst off. Many experts have warned that some desperate local governments have misappropriated individuals’ contributions to pension funds. Instead of leaving them untouched so they can be returned to the worker when he or she retires, some officials have been using those funds to pay current pensions, rendering the 1997 insurance reform ineffective. In a paper on Chinese social insurance published in 2013, CASS researcher Zheng Bingwen warned that the current system has failed to take China’s aging population into account. There is no mechanism in place to accumulate and save a sum for the growing number of retirees. He said the government should take other measures to reduce the risk of pension fund depletion, such as raising the retirement age and improving economic inequalities between different sectors and regions. This March, MOHSS minister Yin Weimin revealed that his ministry is designing a new, national social insurance system that will help balance these regional differences and allocate some State-owned capital to help prop up the pension fund. He emphasized, however, that crafting and executing this reform will be a difficult task that requires much coordination and cooperation between SOEs, local governments and various government departments. CASS researcher Tang Jun agreed that successfully reforming the social security system will be a challenge, but he added that it is the government’s responsibility to meet it. “Right now, the government only spends 8 percent of its budget on social insurance, much lower than the rate in developed countries,” Tang said. “It should spend more.” NEWSCHINA I June 2016

Urbanization

Changing Hands

Chen Xiwen, one of China’s most prominent specialists on rural affairs, strongly opposes recent proposals to overturn China’s land ownership system and allow urbanites to buy the rural residential land left unattended by migrant workers By Xu Tian and Li Jia

he hundreds of millions of Chinese migrant workers who have left their rural hometowns to man the nation’s assembly lines have not only lifted themselves out of poverty, they have also earned China a place in the “higher middle income” club. Now these workers are expected to drive the country towards becoming what officials have termed a “moderately prosperous” society, with the goals of doubling the country’s 2010 GDP and average per capita income by 2020. As Chinese Premier Li Keqiang likes to say, urbanization is “where we will find the greatest potential for domestic demand and the most powerful force for sustaining economic development.” The government is aiming for 200 million more people, mostly migrant workers and their families, to settle in cities within five years. If this goal is realized, by the end of 2020, China’s urban population will have exceeded 800 million and will make up about 60 percent of the country’s total population. However, migrant workers themselves do not seem to be on board with this plan. A report released by the Chinese Academy of Social Sciences on April 6 shows that more than half of migrant workers from China’s less-developed midwest are considering returning to their rural homes when they get older, and only one-third plan to continue living in a city in the future. A recent policy encouraging migrant NEWSCHINA I June 2016

workers to buy apartments in smaller cities has fueled the controversy surrounding China’s path to urbanization. At the same time, many urbanites and analysts argue that it is unfair that urban dwellers are prohibited from buying rural homes and land from migrant workers who decide to move to cities. Under China’s land ownership system, rural residential land does not belong to the State, but instead belongs to a collective of villagers who are registered citizens of that specific village. It cannot be sold to an outsider. Does urbanization necessarily mean mass migration from rural to urban areas? For those who choose to move to cities for work, what happens to the land, houses and families they leave behind? Recently, a number of economists and officials have put forward the idea of opening up the sale of unused rural land to anyone who would like to develop it. Chen Xiwen, deputy director of the Central Rural Work Leading Group, is strongly against this. Chen is one of the most influential policymakers and experts when it comes to China’s rural affairs. In an exclusive interview with NewsChina, he provided insight on the long-term effects China’s urbanization efforts may have on its rural land and rural lifestyles. In his opinion, village life can be more appealing than city life. He added that rural areas are important because they produce food and ecological products. Therefore, he thinks China should

take other paths to urbanization and not put rural residential land up for grabs. NewsChina: Migrant workers from rural areas are encouraged to become urban homeowners to reduce the amount of unsold real estate in urban areas. What are your thoughts on this? Chen Xiwen: It is hard to expect rural residents to do this. If they could, they would have done so long before there were incentives in place. I do not understand how they could be expected to be the main consumer force that will reduce unsold urban housing inventory. It is a Chinese cultural value that property should be owned, not rented. However, why not rent the vacant, unsold space to migrant workers under a special arrangement brokered by the government? How can people from rural areas afford to buy urban apartments that exceed the budgets of many urban residents? Instead, a better option is to develop a property rental market, as utilization of property helps reduce the cost of unsold inventory more than ownership. The government can turn some vacant properties into indemnificatory housing by either renting or buying them, or offering tax rebates and preferable bank loan interest rates to incentivize potential developers. [“Indemnificatory housing” is a Chinese term that includes low-income housing, affordable housing and

fixed-price housing, among other forms.] The government can also give incentives to real estate agents to buy vacant homes and rent them to migrant workers at capped prices. Any of these methods would make it easier to solve the excessive urban housing issue than just asking migrant workers to buy urban apartments outright. It has been suggested that rural residents could afford urban apartments if they sold their rural homes to urban residents. This simply would not work, due to the huge price gap between urban apartments and rural houses. If urban residents had to pay the same prices for a rural house as an urban apartment, why would they want to buy a rural house at all? For rural residents, the money earned from selling their homes is far below what it costs to buy an urban one. Due to these reasons, I do not think destroying the long-standing, fundamental rural land ownership system to alleviate the glut of urban housing is the right choice. NC: It does not make sense for a migrant worker with a family to settle down in a city alone. How can workers’ families become urbanized as well? CX: It probably will take more than a generation to bring about the urbanization of the families of migrant workers. Take Shanghai for example. Many young men who grow up within a few hundred kilometers of the city get married in their villages, build houses with the support of their parents, then leave those homes for jobs in Shanghai. In six or seven years, they are able to rent apartments in Shanghai, enroll their children in a Shanghai school and move their wives into their Shanghai homes. They return to their rural hometowns to visit their elderly parents during Chinese New Year, increasing the frequency of these visits as their parents get older. They need to keep both their rural houses and rented urban apartments. Their strong physical and emotional attachment to their rural roots may last until their parents die and their children grow up and have their own children. It is not possible to speed up this process

Chen Xiwen answers questions from the press, March 6, 2016

Photo by IC

Politics

through rapid economic growth. In fact, when the economy develops to a certain degree, people will increasingly make decisions based on non-economic factors, such as human nature and emotions. NC: The rural-urban [socioeconomic] gap is expected to narrow and ultimately be eliminated during the urbanization process. What do you think the government should do to facilitate this? CX: In developed countries, the process of urbanization is not separate from industrialization, it is the direct result of industrialization. In China, it has been made a separate concept. Big cities are regarded as too crowded, so rural residents are encouraged to live in smaller cities and urban towns. But why would they go to those smaller cities and towns when they lack adequate infrastructure and public services? Indeed, rural residents would go anywhere, not necessarily the biggest cities, if they could find jobs, housing, basic public services, guaranteed social security and education for their children. When other countries urbanized, they mainly went through two different paths. The first can be seen in Latin American countries. They have some of the highest proportions of urban residents in the world. However, these countries often have severe levels of urban poverty. Big enterprises have

been encouraged to build large-scale plantations of bananas, coffee beans and soybeans, all of which are mainly exported. Farmers lost their rural homes and moved to the cities, where many of them ended up in ghettos. The other path is that of some Western countries with lower urbanization rates. In Germany, for example, 60 percent of the population live in small towns of no more than 20,000 people. The government provides small towns and big cities with similar public services, so people can [take pubic services out of the equation when] choosing where to live. In Japan, if families with school-age children relocate, the education authority in the city to which they move has the responsibility to enroll the children in a local school within three days. It does not make sense for us to encourage rural residents to move to cities when we do not offer the same services as Germany and Japan do in these examples. All in all, a key question needs to be answered. Should we first bring rural residents into cities and put them in [an unequal] twotiered structure while we gradually improve their urban living conditions? Or should the government first provide equal public services between rural and urban areas, leaving the decision of whether to move to cities to rural people themselves? ‘Better city, better life.’ This phrase [which could also be translated as “The city makes life better”] was the official motto of the Shanghai Expo in 2010. I specialize in rural affairs, and I am strongly opposed to this idea. I still think about a poster at the expo put up by the village of Tengtou in Zhejiang Province, which said: “The city yearns for country life.” Tengtou has earned a lot of money through agritourism. Six years have passed since the expo; I’m sure many urbanites have shared this yearning for beautiful rural areas like Tengtou since then. NC: However, it is also a waste of resources when migrant workers leave their rural houses vacant and unused. What can they do with the land on which their houses are built if they are not allowed to sell it? NEWSCHINA I June 2016

Migrant workers and urban life Of the 274 million migrant workers in China in 2014: CX: There are several practices in reality. The land can be reclaimed as arable land to expand or improve agriculture. In some special cases, the land can become new homes for the rural poor. For example, many people in rural Pingluo in Ningxia Hui Autonomous Region in China’s northwest left their houses and farmland after they went to work in nearby cities. Meanwhile, some residents of the Xihaigu area in Ningxia’s south, an area that had been plagued for years by extreme poverty and drought, needed to be relocated to more hospitable regions. A deal was then brokered by the [regional] government so that Pingluo residents transferred their houses and the land beneath them to migrants from Xihaigu, receiving compensation in return. However, this should not be just a simple exchange. Firstly, Pingluo villagers must recognize the membership of the newcomers [which entitles them to collective ownership of the land]. Secondly, Pingluo residents who abandoned their houses and land need to have their hukou [residence permit] registered to the urban area in which they now live, with access to all the public services that come along with an urban hukou. Otherwise, if these Pingluo residents no longer have a home or land in Pingluo, to where should their hukou belong? These issues still have to be resolved. The most common practice so far is for the village to rent migrant workers’ unused houses and renovate them into resorts or nursing homes. This can be seen in areas around Beijing as well as in Zhejiang and Guizhou provinces. Non-rural residents should not covet rural residential land. The examples I mentioned here show exactly how the land resources can be used without being sold. It is true that many people expect reforms that will make it possible for urban residents to buy rural land and build whatever they want on it. I don’t think this would be good for China, nor is it allowed in many other countries. While some are looking forward to this kind of land reform, I do not think such a change will ever happen. NEWSCHINA I June 2016

– 1 percent bought apartments in the cities where they currently work – 56.5 percent are 40 years old or younger, down from 66 percent in 2010 – 17.6 percent are covered by basic medical insurance – 2 6.2 percent are covered by work-related injury insurance – 10.5 percent are covered by unemployment insurance – 7.8 percent are covered by maternity insurance – 5.5 percent have access to housing provident funds, a China-specific type of fund that provides loans at preferential interest rates for employees who are buying property

In 2015, Chinese migrant workers:

– Accounted for 69 percent of the 404.1 million people working in urban areas – Earned 18 percent more than urban residents’ average disposable income

In 2015, Chinese rural residents:

– Had a disposable income equivalent to 39 percent of the average disposable income of urban residents and migrant workers living in urban areas for more than six months – Spent 43 percent of the average amount spent by urban residents and migrant workers living in urban areas for more than six months

Targets for public services in China’s urbanization plan (2014-2020) 2014

2020

Compulsory education for the children of migrant workers with urban temporary residence permits

N/A

≥99%

Free basic vocational training for migrant workers, new workers and the unemployed

N/A

≥95%

Basic pension insurance coverage for urban residents*

66.9%

≥90%

Basic health insurance coverage for urban residents*

95%

98%

Indemnificatory housing (mainly government-subsidized housing) coverage for urban residents*

12.5%

≥23%

*’Urban residents’ are classified as people registered to urban areas or migrant workers who have lived for more than six months in urban areas. Sources: China National Bureau of Statistics, State Council

The reasons more than half of Chinese migrant workers do not want to settle permanently in urban areas: I’m getting old 20.6% My parents and/or children in my rural hometown need me 18% I lack the vocational skills needed for urban jobs 16% I need to take care of my farmland 10% I’m unfamiliar with urban life 9% Source: Report issued in April by the Chinese Academy of Social Sciences and Henan University of Economics and Law

Cover story

Cosplayers gather at the Chengdu Comiday Festival, December 26, 2015

the second dime 16

Anime characters commonly appear in unlikely places NEWSCHINA I June 2016

ension

A convention attendee takes a selfie with a cosplayer at the I DO Best Cosplayer Award Ceremony in Beijing, November 15, 2015

Japanese anime culture, once dismissed as a fringe phenomenon in China, has come to dominate the teen and young adult markets let down by a stuffy cultural establishment. From comics and animation to video games and music, a so-called ‘2-D’ mainstream is now proving appealing both to legions of young people and a corporate world eager to exploit their spending power. This month, NewsChina meets the gifted outsiders propelling these trends in China, and examines the limited success domestic entrepreneurs have had in feeding their demands

A blow-up doll named ‘South Little Bird’ accompanies a 2-D fan to the Chengdu Comiday Festival NEWSCHINA I June 2016

Photo by CFP

2-D youth go to great lengths to realize their fantasies

Cover story

Gen 2-D

Final Fantasists

Chinaâ&#x20AC;&#x2122;s 2-D youth have embraced Japanese anime culture and are quietly building their own universe as far removed as possible from the grind of daily life By Wan Jiahuan and Yi Ziyi

NEWSCHINA I June 2016

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Hundreds of cosplayers assemble for the New Year Comic Convention in Jinan, January 1, 2016

NEWSCHINA I June 2016

Photo by CFP

so to differentiate themselves lad in a navy blue from the “3-D” or real world. sailor suit with a blue While the 2-D phenomedenim collar, a red non originated in Japan, it has neckerchief and a miniskirt, spread far beyond to influence Junjun, a passionate cosplayer, has spared no expense in youth cultures the world over, completing her transformaparticularly in Korea and, tion into the Japanese manga more recently, China. Accordcharacter Sailor Moon. ing to data from a research reHer idiosyncratic costume, port conducted by consultancy purchased online for over 300 iResearch, the number of Chiyuan (US$46), was not selected as nese who could be defined as 2-D 2-D youths gather at a comic daywear for a comic book convenconsumers was about 219 million in convention in Qinhuangdao, Hebei Province, January 30, 2016 tion. In fact, Junjun was on her way to 2015. Of 59 million so-called “core usa concert when approached by our reporter. ers,” 95 percent were born after 1990, when She did not feel the slightest bit embarrassed imported cultural products from the rest of Asia about walking on the street in full cosplay – in fact, she began to become available in China on a massive scale. seemed completely at ease with the curious stares of passersby. These young people regularly read manga, watch anime, play video Junjun proudly identifies herself as “2-D.” The term is lifted from games, listen to ACGN music, participate in cosplay and religiously the Japanese ni jigen, literally “second dimension,” but in pop culture attend anime conventions. They form online groups through social it is a reference to the virtual universes of anime, comics, video games media platforms and rally around “bullet screen” video-sharing weband comic novels (ACGN). Those who define themselves as 2-D do sites that shoot viewers’ comments across the screen in real time so

Cover story

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they can instanprecious quality taneously trade of 2-D people barbs and jokes is our absolute concerning their individualbeloved subculism. We are ture. living in our own world. Indeed, “subWe never feel culture” is an inbothered by creasingly redunthe opinions of dant term to apply others.” to China’s 2-D comJapanese munity, given that ACGN material, there is little alternative imported into the competition in the culChinese mainland at tural sphere, particularly in “Masked Girls,” a Japanese girl group, the end of the 20th centuthe field of material aimed at perform at the 2016 CCG MAX convention in Shanghai ry as the marketplace opened teenagers and young adults. For up, quickly earned a wide folthose who identify as 2-D, the label lowing, helped along by legions of goes beyond consumption; it is a badge lifelong fans in Taiwan, Hong Kong and that marks a complex culture with its own Macau. In Japan, and more recently in the West, values, lifestyle, freedom and patois. By choosing to withdraw from the 3-D world, the 2-D feel empowered to build enthusiastic ACGN lovers are usually called otaku, a Japanese a utopia that offers the freedom to pursue passion, solace and self- word loosely equivalent to “geek” or “nerd,” that signifies a passion actualization. for ACGN that borders on obsession. In China, the term otaku has traditionally been pejorative, and applies to young people viewed as antisocial and Boom In her 3-D life, Junjun is a fourth-year student in the sociology kooky – traits that most ACGN lovers argue they department of Renmin University. The wall beside her bed in her do not possess. Thus, they eschew the otaku six-person dorm room is covered with posters of cosplayers, a pho- moniker, and embrace the term 2-D, detograph of a teenage pop star, and a banner reading “Pro-gay, anti- scribing themselves as “2-D creatures.” The core characteristics of the 2-D discrimination.” Junjun is already determined to focus her graduation generation are a fanaticism and exthesis on the topic of moe, a philosophical branch of 2-D culture. Junjun still fondly remembers her first cosplay convention. She ceptional depth of knowledge of dressed as Sailor Moon on that day, too, with her hair in long braids, their preferred media. Individubut soon felt upstaged by the far more elaborate costumes of the more als strive to exploit every avenue seasoned cosplayers. The convention’s boisterous “carnival parade” to obtain the latest information marched down the street, stopping traffic in a country where parades and acquire the most desired and rare products, and, unlike are, understandably, few and far between. Junjun’s own group of cosplayers soon joined forces with over more socially withdrawn sub2,000 more from all over campus. The surreal scene, with vividly cultures, they are not shy about recreated characters from dozens of comics, TV shows, movies and exhibiting their passion for indigames all chatting in a shared space, enraptured Junjun. “It had a vidual series and characters. It is this passion that is termed sense of ritual,” she told NewsChina. “As if it were performance art.” Despite earning disapproving glances or comments from 3-D pass- moe, and, for those who experience ersby, cosplayers are accustomed to being outsiders, and remain unit, is a profound and emotional state fazed. “Let them stare,” said Junjun. “We don’t care. I think the most of mind. “[Moe] is a tingling sensation

NEWSCHINA I June 2016

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that runs through the bones like a surge of elecand personal developtricity,” said one 26-year-old ACGN fan we ment adopted by parents, spoke to who goes by the handle Bluecat. “I schools and society as get a burning feeling of happiness whenever a whole make escape I see my favorite character or production.” into an online universe China’s 2-D boom coincided with the relatively free of such advent of the Internet age and new media. pressures – an essential As digital technology matured, became release for many. mainstream and finally ubiquitous, China’s Moreover, China’s 2-D subculture found itself in a golden age. domestic ACGN inPractically born tech-savvy, and often confined dustry is poorly develA cosplayer attracts the attention of a to their rooms by an exam-oriented academic oped in comparison to the passerby during a comic convention in culture, the 2-D generation can easily use their entertainment industries of Wuhan, February 28, 2016 smartphones to access anime, buy comics, games, Japan and the US. Members of action figures, cosplay outfits – any of the merchandise China’s older generation still view associated with their life’s passion. Another major boon has ACGN as cartoons aimed at children, been the profusion of online platforms that provide a means to as most domestic animation, such as 3000 organize various online or offline activities. Whys of Blue Cat and Pleasant Goat and Big Big Wolf, is Many agree that the 2-D subculture is rooted in exclusivity, and designed for preschoolers. Domestic TV dramas and films aimed at exists and thrives on its members viewing themselves in opposition to adults, meanwhile, tend to echo reality, whether in soap operas or histhe 3-D world. The 2-D community even has a word for the invisible torical dramas. These genres are of limited appeal to teens and young boundary between the two realms – the “Dimension Wall,” a barrier adults who can find a wealth of rich, imported entertainment options, they view as being very difficult to cross. In the 2-D world, a self- from the latest Japanese anime releases to Game of Thrones, available regulating virtual state, people speak with a particular vernac- to stream for free online. In short, 2-D culture caters to a market that ular incomprehensible to outsiders, rich with inside is not served by the domestic cultural sector. jokes, slang and jargon derived from ACGN arcana, reinforcing the sense of identity Duality and belonging among 2-D youth. Junjun’s description of the 2-D lifestyle is succinct. To her, it means Various reasons underlie the “living different lives in different worlds. Talking with different people particularly huge ACGN mar- in different ways.” She added that it is her belief that a certain degree ket in China. The Internet of ease with duality “is a basic skill that every 2-D community memhas a high penetration rate ber will possess.” among teens and youths, Constantly switching between the 2-D and 3-D realms is a vital and poor enforcement survival technique for Junjun and her peers. Maintaining multiple of copyright protection identities and personalities while straddling two dimensions is both a makes premium material challenge and a reward, though many 2-D youth conceal their altereasy and cheap to access. nate identities when moving in the real world. In the foreword to social researcher Yi Qianliang’s book Otaku: the A highly competitive, exam-oriented educa- Mania of the 2-D World, academic Ma Zhonghong states that “the tion system (which keeps virtuality and anonymity of cyberspace gives teens and young people most youngsters either at much more freedom to fully express themselves, further explore their home or in class for most talents and discover richer layers to their personalities and identities.” In the 3-D world, Horo is a 22-year-old fourth-year computer sciof the day), high academic Wenmiao Street, a haven ence student at Hunan University, currently interning with a local IT expectations of parents, and for 2-D lovers in Shanghai, firm. Tall and rangy, Horo is not fond of sports, despite his parents a generally pragmatic and where various stores sell ACGN paraphernalia utilitarian approach to work encouraging him to play basketball. He does not have a girlfriend, NEWSCHINA I June 2016

Cover story

but, unlike many of his classmates, is unfazed by his single status. He never smokes, seldom drinks, is generally taciturn and rarely engages in horseplay with his friends. In his words, Horo was never one of the “cool kids.” In the 2-D realm, however, Horo lives a very different life. When asked about his “other” existence, his face lights up, eyes twinkling, and he delights in talking at length and with consummate wit, albeit employing language alien to the 3-D masses. “I am a typical Lolicon otaku,” Horo grinned, referring to “Lolitas,” idealized underage girls that are a mainstay of manga culture. Horo has a long list of beloved “Lolis,” and a wide collection of figurines and pillows printed with their images that he picks up at anime conventions. Horo’s bedroom looks like an artist’s impression of a typical otaku living space – the shelves are lined with Loli figurines, comic

The Rise of 2-D

books and magazines, model kits, and his number one conversation piece – a mounted steel katana. Horo’s dream woman, he told NewsChina, is Sabor, a female incarnation of King Arthur and the protagonist of the video game “Fate/ stay night.” The character’s unearthly beauty, courage, loyalty and integrity have enchanted him so deeply that Horo is concerned no real-world woman will ever measure up. “2-D girls are perfect” he said. “I’m afraid I will never find such an ideal girl in the 3-D world.”

Creativity

Many 2-D youths are not only cultural consumers, but producers in their own right. According to the iResearch report, 30 percent of 2-D consumers are also authors and artists generating fan fiction, fan art, and musical and video tributes to their favorite characters and

2-D Population Growth, 1980-2014

The 2-D lovers of the“post-’80s”generation, who grew up with Japanese printed manga introduced to China in the late‘90s , already hold stable purchasing power

Growth rate of Chinese 2-D users

220 million 118,620

2-D teens and youths of the‘post-’90s’and‘post-’00s’generation, who grew up with the access to the Internet and Mobile Internet, have experienced a more diverse 2-D culture

226,010

General 2-D users (thousands) ‘Core’2-D users* (thousands)

100,990

199,984

99,420

330 million

159,522

79,200

80,180

81,400

72,110 99,048

56,351 49,840

59,393

70,080

81,990

32,251

Source: iResearch, estimated based on industrial reports, Statistical Yearbook of China and iResearch data

Birth year

Unit: 1,000 people

*Core 2-D users refer to those who watched anime or read manga at least once per week in the past half year; General 2-D users refer to those who watched anime or read manga at least once in the past half year. Anime excludes cartoons for preschoolers. Delivery media included PC, mobile Internet devices, film andTV.

Source: Statistical Yearbook of China

NEWSCHINA I June 2016

terming themselves “rotten girls.” Instead of realistically depicting the lives of gay or bisexual men, BL works present an idealistic fantasy of romantic love between males that resonates most strongly with women. Xianxian, a professional cosplayer from Chengdu, removes his Bluecat, a self-demakeup after a performance scribed “hardcore rotten girl” for 12 years, has an extremely deep understanding of yaoi culture and the thought processes of yaoi fans. In the eyes of many rotten girls, Bluecat told our reporter, opposite sex relationships are rooted in social convention and status. Same-sex romance, which in much of Asia remains taboo, is “purer and fiercer” because such pairings, like 2-D culture itself, fly in the face of social expectation. “Yaoi gives many young women a spiritual shelter in which love for love’s sake, not marriage or childbirth, is uppermost,” Bluecat told our reporter. “True love can transcend gender boundaries and shatter moral, ethical and cultural norms. We know that such love can seldom be found in reality, but it does not mean that we cannot pursue it in our imaginations.” The idealism inherent in 2-D cultural products has led some to stereotype aficionados as infantile and suffering from a collective Peter Pan complex. 2-D youths refute such claims. “Choosing a 2-D lifestyle is not equivalent to isolating oneself,” said Debris. “It is the way I choose to communicate with the world.” Individualistic, creative, diverse and entertaining, 2-D culture has shaped a generation’s sense of identity, lifestyle and values as well as a sense of community in a way that other cultural products in China, tainted in the eyes of many by excessive conservatism and heavyhanded censorship, simply cannot. Despite this, there are few 2-D fans aged over 30, and most will freely admit that, eventually, they expect to fully rejoin the 3-D realm. “I know one day maybe I will withdraw a little from the 2-D world,” said Horo. “But for my whole life? I can’t separate completely from my old friend.” “If one day I have a child, I will definitely introduce him to the 2-D world and say, ‘See what a fantastic world your dad was living in!’” Photo by CFP

series. The process of creating content further entrenches a sense of investment and participation in a meaningful community, something many 2-D youth claim is hard to find in the 3-D world. Horo once wrote a 200,000word online fan fiction novel, Love in the 2-D World, featuring a Loli girl as its main character. The response from fans, and the ability to self-publish online, gave Horo a deep sense of fulfillment, and he relished the opportunity to communicate with his readership. Junjun, who admits she is similarly solitary in the real world and “not good at dealing with people,” is a very popular online singer-songwriter who has uploaded over 100 songs celebrating her beloved series and characters on various video-streaming websites. As many as 200 people have collaborated on Junjun’s tributes, including composers, songwriters, mixers, video editors and graphic designers. “When the song is finally released, you will find that you are a part of it. It feels so great to create a collective work,” she told NewsChina. In Otaku: the Mania of the 2-D World, author Yi Qianliang aligns the nature and values of 2-D culture with ideas and theories of estheticism espoused by Oscar Wilde, to whom the quotation “Life imitates art far more than art imitates life” is attributed. Yi finds that 2-D youth have very similar existential views. “In the eyes of 2-D people,” Yi writes, “the 2-D world is a world of art, a world of beauty, that is more real than reality. Their 3-D life is an imitation of the 2-D world. Their modes of dress, choices made in terms of interior decor, their collections [of merchandise], speech, lifestyles and even values all imitate the 2-D world. Thus, for them, the virtual 2-D world is foremost, and the 3-D world secondary.” “I am an idealistic person,” cosplayer Debris told our reporter. Debris’ favorite anime and manga are rooted in social commentary. “Many comics feature the eradication of injustices that are prevalent in reality,” he continued. “Protagonists in manga are courageous enough to fight against injustice, but few people in real life have the same capability or bravery to stand in opposition to unfairness. Thus, rather than place our hope in the 3-D world, many people turn to the 2-D virtual world to find peace and comfort.” Female ACGN lovers view the 2-D world as a place of chivalry, empowerment and both romantic purity and erotic perfection. The yaoi and shonen’ai, or “Boy’s Love” (BL), genres, for example, featuring romantic and often explicitly sexual relationships between idealized male characters, are particularly popular among women, with fans

The headquarters of video streaming website AcFunâ&#x20AC;&#x2122;s walls are plastered with images of 2-D icons

Photo by Dong Jiexu

Cover story

Gen 2-D

Breaking the Wall

A heady mix of technology and market forces is expanding Chinaâ&#x20AC;&#x2122;s market for digital entertainment and feeding the dreams of a young generation comfortable with inhabiting an entirely virtual social landscape By Wan Jiahuan and Yi Ziyi

NEWSCHINA I June 2016

n February 2, when a lavish live broadcast screened in the run up to the Chinese New Year Gala produced by Hunan TV was in full swing, singer Yang Yuying was already waiting anxiously backstage. Minutes later, she was to appear in front of a potential audience of millions, performing alongside a gray-haired, green-eyed, sweetly voiced girl named Luo Tianyi. At the tender age of 15, Luo has already released 6,000 original songs, with 100 new songs added to her repertoire each month. Luo’s extraordinary productivity might appear impossible, until one realizes she is actually a computer-generated song generator produced by VOCALOID, a singing synthesizer application formerly developed by Yamaha Corporation. Virtual reality (VR) technology enables this virtual “2-D” diva to appear in concert in what critics dubbed a “pan-dimensional” performance, blurring the wall between the “2-D” or “virtual” and “3-D” or “real” world. The phenomenon of so-called pan-dimensional entertainment is now well-established in China, with Luo Tianyi just one example of its success. With China’s younger generation emerging as the nation’s leading consumers, the domestic ACGN (anime, comics, gaming and graphic novel) industry has experienced an unprecedented boom since 2015. The term “2-D” has gradually become a buzzword that has crossed from the online realm into the mainstream media, and its associated values have attracted the attention of China’s IT giants. The 2-D market, previously dismissed as kooky and niche, is now viewed as a new commercial frontier. Manufacturers and distributors are fighting for a slice of the lucrative 2-D economy. Capital has played the most significant part in breaking down the walls between the two cultural dimensions, but what has fascinated observers has been the ability of 2-D consumers, simultaneously ravenous and exacting in their demands, to determine which content creators make the grade. When the two worlds of old-school commercialism and youthful individualism collide, it seems that reconciling them requires considerable expertise.

Market

In contrast with Japan’s long-established ACGN industry, which still relies heavily on traditional print publishing, the growth of China’s ACGN industrial chain has always been rooted in the IT industry. The popularization of 2-D culture in China coincided with the development and widespread adoption of mobile Internet (MI) platforms in the last five to 10 years. Since 2005, with the rise of Web 2.0 (instant messaging, social networking and video sharing), content creators have been offered myriad convenient platforms to promote 2-D culture on a massive scale. Since 2010, the gradual emergence of MI devices, especially smartphones, as a dominant tool for social interaction has allowed end users to devote every second of their spare time to consuming online ACGN materials.

NEWSCHINA I June 2016

Thanks to MI technology, consuming online 2-D materials has become an organic and inseparable part of teenage and young adult life. According to data compiled by tech consultancy iResearch, in 2015, the total number of Chinese 2-D consumers reached about 219 million, of whom 59 million were listed as core users. While many are still college or high school students and have limited purchasing power, as this generation ages their tastes have been shown to remain fairly consistent, meaning that future potential of this nascent market could be huge. 2015 was a milestone year for China’s 2-D generation, as this former geek legion emerged from the shadows to make cultural inroads in the 3-D mainstream. 2-D slang and inside jokes, many lifted from Japanese and English, have gained widespread traction in everyday parlance and have been widely accepted and spread in the 3-D world. “Moe moe,” (very cute), “adorkable,” “tsukkomi” (trash talk) and “ranbingluan” (no damn use) commonly crop up in online discussions and everyday conversation. On July 3, 2015, during the Huxiu Summer F&M Innovation Festival, Bilibili CEO Chen Rui commented: “From my perspective, the subculture of the [generation born in the ’90s and ’00s] will in fact determine the direction of mainstream Internet culture in the next 10 years.” State broadcaster CCTV’s reportage on the 2-D community symbolizes this former fringe group’s emergence as a leading cultural force. On January 8, CCTV Morning News aired a 14-minute special on the 2-D phenomenon, touching on its culture, the scale of related industries, associated startups and investments, and the group’s market potential. In 2015, capital began to flood into the 2-D market as tech giants realized the potential of China’s ACGN industry. Video-sharing websites acfun.tv and bilibili.com, leading outposts of China’s 2-D content creators as well as those illegally uploading copyrighted content, were respectively acquired by Internet giants Alibaba and Tencent. Nicknamed “A Station” and “B Station” by 2-D users, these two so-called “bullet-screen” websites, which allow users to see their submitted comments and scroll through remarks on screen in real time while watching video clips, are hugely popular with netizens. They also serve as platforms through which distributors and content producers can trawl for talent. “Watching the scrolling bullet screen is similar to watching a soccer match in a stadium. When the favored team scores, everyone stands up and cheers, ” AcFun CEO Mo Ran said of A Station. “The scrolling chat creates a similar effect, giving viewers the sense that they are watching a video clip together. They laugh at the same points, and interact with each other. A Station gives 2-D youths – most of whom grew up without siblings – a boisterous platform with a carnival-like atmosphere.” In August 2015, AcFun received a US$50 million investment from

Cover story

China’s YouTube equivalent, Youku Tudou. After Alibaba acquired Youku Tudou last November, AcFun was absorbed by the Alibaba brand. Later AcFun secured a further US$60 million from SoftBank China Venture Capital. Also last November, Tencent Holdings invested around US$30 million in Bilibili after the company was valued at US$228 million. Rival animation site u17.com, meanwhile, was snapped up by the Guangzhou-based animation studio Alpha, currently China’s leading producer of domestic animation. Some are already calling the second decade of the 21st century China’s 2-D Golden Age.

hairstyle, is decided by netizens. “Having no official character setting is our principle,” said Cheng. Luo’s physical appearance is a composite that includes elements from some 1,500 illustrations submitted to the company through online platforms, many drawn by professional illustrators. Her voice, meanwhile, is based on that of 2-D idol and voice actress Shan Xin.

Community

Doujin is a Japanese term for a group of people who share an interest. In ACGN culture, the term specifically refers to amateur selfpublished works, including manga, novels, illustrations or songs based on an original ACGN work. The day after Luo Tianyi’s debut Sticky in July 2012, the doujin songs created by fans began being published During the Tencent Animation Industry Conference held on No- on online platforms, including AcFun and Bilibili. To compose an vember 19, 2015, company vice president Cheng Wu coined the official doujin tribute song to Luo, fans were required to spend nearly term “2-D Economy” while outlining Tencent’s strategy for corner- 2,000 yuan (US$308) to buy VOCALOID™3 and its related softing this market by producing and managing high-quality intellectual ware. A number of Luo’s doujin songs went viral online. Luo herself property (IP), and exploiting it through production of animation, has 400,000 followers on Twitter-equivalent Sina Weibo, and Shangcomics, movies, TV shows, games and literature. hai HENIAN claims her songs have racked up over 200 million hits The IP-oriented 2-D economy is aiming to cash in on what insid- on various online platforms. “We will integrate fans’ creativity into the construction and proers call the “stickiness” of consumers. 2-D youths, deeply emotionally motion of our brand,” said Cheng Ruohan. “Fans’ efattached to the objects of their passion, reliably conforts have helped build the public’s overall image sume tie-ins and spin-offs as well as premium of Luo Tianyi.” original content, leading some to describe the 2-D economy as an “economy of Virtual pop divas aren’t the only fandom.” icons giving a public face to the These tech-savvy, emotionally 2-D new wave. A creative take on invested, brand loyal and, in one of China’s best-loved litermany cases, highly producary figures has also become a tive young consumers can symbol of the movement. In 2015, the indigenous simultaneously serve as end users, advertisers and animated feature Monkey content creators, makKing: Hero is Back defied ing them ideal targets expectations to become for companies invested a runaway hit, earning in 2-D products. Song plaudits from tens of generator Luo Tianyi, for thousands of fervent fans example, is a creation of who took to social media her fans, with details such to promote it. Despite as her facial features, outfits the relative obscurity of the and even “public appearancmovie, which was initially rees” designed “by the market,” leased with little fanfare, word in the words of Cheng Ruohan, of mouth soon led to the movie’s vice general manager of Shanghai Weibo fan club being flooded by Poster art for Monkey King: Hero is Back HENIAN, Luo’s parent company. 40,000 new members. These superWhile Shanghai HENIAN might have fans described themselves as “tap water” come up with the concept of a holographic – emphasizing the free and flowing nature of preteen diva, the fine tuning, from her shoes to her their promotion. The term contrasted with “water

NEWSCHINA I June 2016

Photo by IC

army,” a pejorative used too driven by profits to describe people paid might find their reeither by political or turns less satisfactory commercial interests than they expect. to disingenuously 2-D youths promote certain may be insatiable works or products. consumers, but In short, fans of their appetites are Monkey King: Hero limited only to Is Back did the stuthe products that dio’s work for it, even resonate with them. going so far as to purFar from being easchase tickets as gifts for ily pleased, a casual strangers simply to englance at online message courage more people to see boards or the scrolling text the movie. Soon, the film had accompanying videos on Luo Tianyi in her first holographic concert broken the box office record set AcFun or Bilibili prove how in Shanghai , December 5, 2015 by DreamWorks’ Kung Fu Panda 2 discerning 2-D young people are to become the most successful animatwhen it comes to the world in which ed film of all time in the Chinese mainland they have immersed themselves. If cynimarket. cal profit-seeking is detected behind a cultural “This is a film of our own. We’ve done so much. We product, it will often be rejected. drew fan art, wrote fan fiction, posted and reposted numerous tweets, One significant reason behind the success of Monkey King: Hero is and recommended the film to our friends, people near us, and also Back is that the indie nature of the film and its reputation as a labor of other netizens,” self-styled “tap water” fan artist Nana (pseudonym) love epitomized the creative spirit of the 2-D generation. The movie’s told our reporter. “We’ve all made our own contributions and we are 41-year-old director, Tian Xiaopeng, optimistically committed himso happy and proud of its success.” self to completing his low-budget work, and his well-documented love for comics and sci-fi, particularly the Transformers franchise (he scrapbooked dozens of posters featuring the series’ characters “as if Profits That kind of passion and brand loyalty has made China’s 2-D con- they were precious stamps”), has seen him evolve into something of sumers the prime targets of most enterprises in the cultural industries, an anti-establishment 2-D hero in the mold of Joss Whedon in the with a once-fringe cornucopia of diverse products quickly becoming West. the leading light of mainstream pop culture. Tian’s primary goal was not to do well at the box office – still the However, the consistent use of terms such as “capital,” “eco-chain,” go-to measure of a movie’s success in the mainstream media – but “ACGN eco-circle,” “Internet Plus,” and “pan-entertainment” by to realize a personal vision. Tian described the production process as companies attempting to tap the 2-D market adds a gloss of hard- “a gamble of idealism”: he spent eight years on the project and had nosed utilitarianism seemingly at odds with the fiercely individualistic to overcome a litany of obstacles before it was completed. “I always and idealistic worldview espoused by their target market. wished that I could have an exciting and heroic life in which I could Younger entrants to the market feel that many businesses hoping make a difference. Considering my personal background... Perhaps to profit from 2-D consumers have no understanding of the people [producing Monkey King: Hero is Back] is most approximate to [havthey are trying to reach. “Many investors were born in the 1950s and ing] the lifestyle that I want,” Tian remarked in an interview with 1960s, with no concept of 2-D,” said Wang Quan, the 27-year-old NewsChina. While on the face of it, China’s 2-D generation might seem the pervice president of newly minted angel investment firm Autobot Capital Partners. “Out of fear that they might miss out on a great oppor- fect consumer base, in practice, their sophistication and commitment tunity because of their ignorance, they still invest in one or two 2-D to authenticity currently jars with major companies’ often mercenary approach to business. Until mutual understanding is established, this companies.” Many argue that by interfering too much in ACGN content, and legion of geeks will continue to resist attempts to manage or restrict over-commercializing cultural products, mainstream content creators their passion for the creative and the kooky. NEWSCHINA I June 2016

International

Donald Trump

Mixed Feelings

Despite Donald Trumpâ&#x20AC;&#x2122;s tough stance on China, the prospect of his presidency is welcomed by many across the Pacific

US Republican presidential candidate Donald Trump speaks at a campaign rally in Syracuse, New York, April 16, 2016

NEWSCHINA I June 2016

Photo by Carlo Allegri

By Yu Xiaodong

s Donald Trump rapidly emerged as the unexpected frontrunner in the race for the Republican Party’s presidential nomination, China has become the foreign country mentioned most frequently on the stump, rivaled only by Mexico. While having said that he “loves” the country and “gets along” with “the Chinese,” Trump has been accusing China of “stealing jobs” from the US since the day he announced his candidacy. Trump has pledged to brand China a currency manipulator and impose a 45 percent import tax on Chinese goods if he is elected president. In the months after Trump launched his campaign, Chinese officials began indirectly responding to various accusations leveled at their country. Last September, Hua Chunying, spokeswoman for China’s foreign ministry, seemed to dismiss Trump’s attacks as “disturbances,” without directly mentioning the candidate. However, such commentary was subsequently dialed back, with Beijing refraining from responding to subsequent attacks on China made by candidates on both sides.

Unexpected

However, as Trump’s campaign has gained momentum and won considerable public support despite bipartisan efforts to discredit him, interest in the businessman-turnedpresidential candidate among the Chinese public has been building. The interest was likely ignited by his often harsh remarks on China-related issues. On Sina Weibo, China’s largest microblogging site, the hashtag #SuperTuesday attracted 13.5 million clicks and 5,600 comments, with the primary focus being on Trump. While the Chinese public has shown some interest in past presidential campaigns, especially the 2008 election of Barack Obama, never before has there been such enthusiasm over a presidential primary. To the surprise of many, despite his hawkishness on China, the brash billionaire appears to have won considerable support among Chinese netizens. According to an online survey conducted by huanqiu.com, in which netizens were simply asked if they

NEWSCHINA I June 2016

“liked” Trump, 59.7 percent of over 4,200 respondents answered “yes.” Considering that the users of huanqiu.com, the online portal of the State-owned and loudly nationalistic Global Times, tend to be more hawkish, many might imagine them to be hostile to a seemingly unapologetic China-basher like Trump. His counterintuitive popularity with this group, therefore, has baffled Chinese observers in much the same way his continued success at the polls in the US has confounded the predictions of their American peers.

Schadenfreude

While detailed research and analysis of Chinese people’s opinions regarding Trump has not been conducted, his apparent “popularity,” reflected in the Global Times survey, needs to be viewed in the context of the growing strategic rivalry between the US and China. To a large extent, Trump’s appeal among Chinese netizens surveyed may stem from a sense of schadenfreude. This is reflected in the little attention paid to Trump himself in online discussions of the candidate, and the overwhelming focus on his campaign’s success. The biggest Trump fan page on Weibo, whose admins state is dedicated to “the next American President,” for example, has about 8,600 followers. Considering that China’s Weibo users number in the hundreds of millions, this is hardly impressive. Trump’s daughter Ivanka, for example, who has an account on Weibo, has about 14,000 fans, while the fan page of Russian President Vladimir Putin has more than 460,000 followers. Instead of interpreting the survey result as indicative of a “liking” for Trump, it may be more accurate to say that his popularity in the US is pleasing to many in China, who hope to see him elected, and subsequently undermine US prestige around the world. “Chinese netizens, who are angry with recent US policy towards China, would like to see Trump lead the US, as they believe he possesses the traits that would bring about its decline,” commented Lao Mu, a senior editor from the People’s Daily, the Party’s flagship

newspaper, in explaining the result of the online survey. According to another commentary published by the Hong Kong newspaper Ta Kung Pao, the rise of Trump is already a reflection of what it calls “great power decline syndrome.” Trump’s ascendancy has also given many in China ample opportunity to criticize deficiencies in the US political system. “The Emperor’s New Clothes” is a frequently used metaphor. In a commentary published by guancha.cn, Chen Lijian, an assistant professor at the University of Dayton, argued that Trump’s rise exposed the “myth” of the “self-proclaimed” superiority of America’s political system. Pointing to the concerted attacks made on Trump by the US mainstream media and the political establishment, which Chen called “biased and distorted,” he argued that such campaigns betray how the political elite has been controlling and manipulating the electoral process. An editorial published on March 14 in the English edition of the Global Times adopted a different angle. Describing Trump as a “clown,” who is “narcissistic” and “inflammatory” with “abusively racist and extremist” views, the article warned that “the US had better watch itself for not being a source of destructive forces against world peace, than point fingers at other countries for their socalled nationalism and tyranny.”

Pragmatism

However, the support Trump has found in China does not all stem from schadenfreude and cynicism. For many Chinese, Donald Trump’s defiance of “political correctness” presents an image of a more pragmatic leader, an image they find easier to understand and consequently can imagine themselves being more comfortable dealing with him as a leader. In one of the mostly widely circulated articles on China’s social-messaging app WeChat, Wo Teng, a researcher of the American political system, described Trump’s rise as a campaign of “common sense” against “political correctness.” According to Wo, the focus

International

on political correctness has evolved a particular “political language” that has enabled the political elite to monopolize power and push their own interpretation of various social problems. This, Wo reasoned, has led to the failure to fully acknowledge and tackle these social problems. This argument, often interpreted as “pragmatism over ideology,” resonates with many Chinese. Confucian philosophy can be interpreted as pragmatic, while a general preference for expediency over idealism has latterly been reinforced by China’s more recent history. While the ideological struggles in the 1950s, ’60s and ’70s are perceived to have only brought calamity and suffering to the nation, the doctrines of pragmatism and expediency adopted since the 1980s and the discouragement of ideological debates have helped China achieve its much-admired economic development in the past three-plus decades. As subscribers to a pragmatic worldview, many Chinese blame humanity’s most disastrous problems on the US, and more broadly what they view as the West’s insistence on political correctness. Euroamerican efforts to promote democracy during the Arab Spring are widely perceived to be a major contributing factor behind both the global spread of terrorism and the recent European refugee crisis. German Chancellor Angela Merkel’s retraction of her government’s previous “open door” refugee policy was hailed in China, as in many sections of European society, as a victory for “common sense.” “The political elite in the US has become so obsessed with reforming the world that they have ignored the aspirations of ordinary Americans to reform American society itself,” argued Li Haidong, a professor of international relations at China’s Foreign Affairs University, writing in a commentary published in the Global Times on March 22.

Impact

The same logic is also applied to mainstream Chinese perceptions of problems affecting the US-China relationship. In the

past couple of years, the US has adopted a more hostile approach to China through its pivot-to-Asia policy, increasing its AsiaPacific military presence, and strengthening military ties with its regional allies. For many Chinese experts, US perceptions of “the China threat,” which inform its China policy, are largely ideologically driven. These same people consider Beijing’s proposal to establish “a new type of great power relationship” based on “mutual respect and mutual benefits,” an idea Washington has been reluctant to endorse, as both fair and pragmatic. The direct result is that many Chinese tend to hold a rather negative view of Hillary Clinton, well known for her tough position and harsh attacks on China. It was during Clinton’s tenure as secretary of state that the US launched its rebalancing strategy in the Asia-Pacific region, and, consequently, many Chinese might embrace an “anyone but Clinton” position on the US election. Comparatively, Trump has consistently defied mainstream ideological lines, both left and right, on a variety of issues, with many in China viewing him as a foreign policy pragmatist who might even be relatively proChina. Although Trump has promised to take a tougher position on Beijing if elected, it is argued that his “common sense” would ultimately prevail. In the same online survey conducted by huanqiu.com, more than half (50.6 percent) of respondents answered that they believed that a President Trump would have a “positive” impact on China. In a separate, widely circulated article on WeChat, Wan Weigang, a well-known current affairs commentator, said that after reading Trump’s book Crippled America: How to Make America Great Again, he concluded that Trump is “the mildest” of all Republican candidates in both his domestic and foreign policy agendas. Regarding Trump’s China policy, Wan argued that Trump is far from hawkish. “Trump never said he would seek all-out confrontation with China... What he said is he would re-negotiate trade deals with Chi-

na,” Wan argued. “Take the issue of North Korea for example. Trump believes that it is in China’s backyard, and should be handled by China.” In an interview with the Global Times, Wu Xinbo, director of the Center for American Studies at Fudan University, suggested that rather than focusing on establishing regional economic unions such as the Trans Pacific Partnership, which some have dubbed an “economic NATO” designed to contain China, Trump may propel forward deeper economic cooperation between the US and the Asia-Pacific region, which to a large extent would chime with objectives set by the Regional Comprehensive Economic Partnership (RCEP) initiative promoted by China. Trump’s recently announced “America First” foreign policy guideline, which many deem equivalent to an endorsement of isolationism, further boosted such expectations. In the guideline, Trump suggested that the US scale back its role in NATO, calling on Japan and other allies to pay more for their own defense. While his comments implying that Japan and South Korea should be permitted to build their own nuclear arsenals are of concern to any serious observer in China, his general preference for a US withdrawal from international affairs, particularly from the Asia-Pacific region, is, unsurprisingly, welcomed by many ordinary Chinese. But, just as many Americans have found Trump’s only predictable trait to be his unpredictability, how a President Trump would actually interact with China if elected remains a mystery. Despite recent friction between the US and China, the bilateral relationship has been manageable under the Obama administration. Many Chinese experts, like their American counterparts, are concerned about the potentially catastrophic impact a Trump presidency might have on bilateral relations. But, despite all the discussion and debate over Trump in China, the Chinese, along with the rest of the world, remain onlookers. American voters, whomever they choose, once again hold the future of the bilateral relationship in their hands. NEWSCHINA I June 2016

Photo by Jonathan Ernst

G7 foreign ministers meet about six weeks prior to the summit in Hiroshima, Japan, April 10, 2016

G7 and China

Pressure Point

Tensions over China’s disputes with the US and Japan are now landing on the agendas of international platforms like the G7 By Yu Xiaodong

hen foreign ministers of the G7 countries – Canada, France, Germany, Italy, Japan, the UK and the US – convened in Hiroshima on April 10 and 11, China became a major topic of discussion. The ministers issued a joint statement regarding the maritime disputes in the East and South China seas, saying they “urge all states to refrain from such actions as land reclamations” and “building of outposts... for military purposes.” Although the statement did not mention China directly, Beijing NEWSCHINA I June 2016

responded by summoning representatives from the G7 nations and warning them not to take sides in territorial disputes.

Tit for Tat

Beijing’s rather strong reaction appears to stem from its anger and alarm over what many see as escalated and concerted efforts from the US and its allies to intervene in the conflicts surrounding the South China Sea.

Photo by CFP

International

US Secretary of State John Kerry (center), Japanese Foreign Minister Fumio Kishida (left) and British Foreign Secretary Philip Hammond receive wreaths for placement at the Memorial Cenotaph at the Hiroshima Peace Memorial Park, April 11, 2016

Just a few days earlier, on April 8, US Secretary of Defense Ash Carter canceled a planned visit to Beijing during a trip to Asia. However, Carter traveled as scheduled to the Philippines, which disputes China’s claims to the Nansha (Spratly) islands and Huangyan Island (Scarborough Shoal). On April 14, shortly before he boarded a US aircraft carrier in the South China Sea, he announced that the US will start stationing warplanes in the country and had begun joint patrols of the South China Sea with Filipino forces in March. The US and allied forces also conducted their annual joint military exercises in the Philippines, an event known as Balikatan, from April 4-15. The drills, which involved about 8,000 troops, were widely interpreted as a show of force against China. In the meantime, the Philippines and Vietnam, strategic partners as of last November, announced that they would explore possible joint exercises and naval patrols in the South China Sea. The day after Carter’s April 14 announcement, China’s Ministry of National Defense released a statement that disclosed Central Military Commission Vice Chairman Fan Changlong had paid a visit to the Nansha/Spratly islands to inspect the cluster and its reefs. It did not specify the exact timing and location of Fan’s visit. According to the statement, Fan greeted officers and soldiers stationed on the islands along with construction workers who are building different facilities there, including “lighthouses, automatic weather stations, oceanic observation centers and facilities for maritime scientific research.” While American media called Carter’s boarding of the USS John C. Stennis aircraft carrier “a deliberate message to China on American power in the region,” as reported by ABC, Chinese State media has described the announcement of Fan’s visit as China’s response to that message. This back-and-forth is just the latest example of the escalating tension between the two countries since the US launched its freedom of

US Secretary of Defense Ashton Carter flies in a V-22 Osprey when visiting the USS Theodore Roosevelt, November 5, 2015

navigation (FON) operations to challenge China’s massive construction activities in the South China Sea’s disputed island groups. In February, Chinese Foreign Minister Wang Yi’s planned visit to the Pentagon was canceled during his trip to Washington amid increasing friction regarding Beijing’s deployment of advanced air defense systems in the region’s Xisha (Paracel) islands, which many experts believe is Beijing’s response to perceived escalated US provocation shown through the extension of its FON operation to the island cluster. Beijing considers the legal status of the Xisha/Paracel islands to be more settled than that of the Nansha/Spratly group, as China has controlled the Xisha/Paracels for more than four decades, with Vietnam being the only other claimant.

Regional Rivalry

Apart from denouncing intensified military pressure from the US, Beijing also implicitly criticized Japan for its role in the G7 statement. When he was explaining why China deemed the statement offensive and specifically directed at China, foreign ministry spokesperson Lu Kang said that “a senior official of one of the G7 countries mentioned that China needs to heed the voice of the G7.” That country is widely believed to be Japan, as Japan’s Kyodo News Agency had previously reported that Tokyo invited G7 foreign ministers to attend a meeting to hear concerns over “China’s construction work and military deployment in the South China Sea.” In contrast with official statements, Chinese media and experts have been more blunt. In a commentary written by Chen Yang, a PhD candidate at Toyo University, Japan “hijacked” the G7 meeting to serve its national interests. An editorial in the State-run Global Times claimed that Japan was trying to push its agenda during G7 gatherings because it is the only Asian country represented within the organization. The same editorial claimed that Japan lacks influence in other international bodies NEWSCHINA I June 2016

Photo by IC

Photo by CFP

Filipino police officers guard the US embassy in Manila following attacks by locals protesting the Mutual Defense Treaty signed between the US and the Philippines, January 20, 2016

such as the UN, despite applying to be named as a permanent member of the UN Security Council, and is thus leveraging its G7 status instead. The dispute between China and Japan over the East China Sea’s Diaoyu (Senkaku) islands seems to have quieted down in recent months. However, the two countries may soon clash over the South China Sea, as Tokyo appears to have shown an interest in getting involved in those regional disputes. Japan has been actively promoting its military ties with the Philippines over the past few years. Just one week before the G7 ministers’ meeting, three Japanese naval vessels, including a submarine, sailed to the Philippines. The countries also held their first joint naval drills last year. On top of the South China Sea issue, Beijing has been wary about the intentions behind Japan’s selection of Hiroshima as the meeting’s host city. The historical significance of the city, which became the site of the world’s first nuclear attack after the US dropped an atomic bomb on it in 1945, seems to some as being especially meaningful as the two countries have been butting heads not only on territorial and historical disputes, but on nuclear issues as well.

Going Nuclear

During the UN Non-proliferation of Nuclear Weapons review conference held last year, Tokyo encouraged world leaders to visit atomic bomb memorials in Hiroshima and Nagasaki and attempted to record that invitation in the conference text, a move that was blocked by China. According to Chinese Ambassador for Disarmament Affairs Fu Cong, emphasizing the suffering caused by the bombings without mentioning the circumstances surrounding them, including Japan’s wartime atrocities, serves Tokyo’s agenda “to portray itself as a victim of the Second World War, rather than a victimizer.”

NEWSCHINA I June 2016

Therefore, when the G7 foreign ministers paid a visit to the Hiroshima Peace Memorial Park during the conference, it was to Beijing’s relief that US Secretary of State John Kerry, who was the first person in his position to visit the memorial and the city, offered no apology for the Allies’ 1945 decision to drop the atomic bomb. Beijing interpreted Tokyo’s rhetoric during the meeting regarding nuclear disarmament as an attempt to highlight China’s nuclear arsenal, especially because the meeting was so focused on China. In contrast, China is worried about Japan’s nuclear ambitions. China raised concerns earlier this year over the amount of enriched uranium and weapons-grade plutonium Japan is stockpiling. It is estimated that Japan has accumulated 11 tons of plutonium within its borders, with a reported 36 additional tons stored in Europe. Some experts believe that Japan has the capability to produce an atomic bomb within six months if it were to decide to do so. In late March, Japan transferred 331 kilograms (730 pounds) of its weapons-grade plutonium to the US, in addition to a portion of its enriched uranium, but these amounts represent only a tiny portion of its total stockpile. Remarks on the topic made by Japanese leaders have also caused China anxiety. A written statement released on April 1 by Japanese Prime Minister Shinzo Abe’s cabinet directly touched on the constitution’s Article 9, a critical clause outlawing war as a means to settle international disputes. Abe’s cabinet said this language does not prohibit the country from possessing the “minimum necessary level” of armed personnel needed for self-defense and makes no distinction between nuclear and conventional weapons when it comes to this requirement. As China, the US and Japan become more entrenched in their positions on various issues, the stir caused by the G7 foreign ministers’ meeting may be just the precursor to further tension escalation.

Society

Hijacking Health

Patients line up for an appointment at Beijing Children’s Hospital

Authorities are cracking down harder on people who sell doctors’ appointment slots, but with massive financial incentives and minimal legal ramifications, systemic changes are needed to squash the scalpers By Wang Siqian

t is 7 AM on a brisk winter day in Beijing, and patients-to-be have started to line up to register for appointments at Guang’anmen Hospital for the first time since the Chinese New Year break in midFebruary. As they step up to the automatic registration machines one by one, security guards walk around and monitor the scene. While in the West, patients see doctors when they schedule appointments, in China patients see doctors only if their number comes up. Whether they have an ear infection or a brain tumor, they need to register at the right department, receive a ticket that says how many people are ahead of them, and wait their turn. This system may work in China’s banks, but in hospitals it has created a serious problem. Intense demand for access to the coun-

try’s best medical facilities has generated a market for enterprising vendors who hoard these tickets and then sell them to sick people at a steep markup. Guang’anmen Hospital, like many others, had once been plagued by these ticket scalpers, but they all disappeared earlier this year thanks to one young woman. On January 19, the woman from northeast China spent the entire night in line for a ticket, only to find them sold out. Frustrated and furious, she alleged that hospital security guards were colluding with scalpers. She yelled that the security guards don’t control the line, the scalpers do. The young woman claimed that scalpers arrived after her, but still obtained tickets and offered to sell her a 300-yuan (US$46) ticket for 4,500 yuan (US$694). Someone caught

it all on tape and the video clip instantly went viral, garnering over 10 million views. On January 29, Beijing Municipal Commission of Health and Family Planning, the local health authority, united with police to launch a campaign cracking down on scalpers, detaining more than 20 of them at several major hospitals in the city’s Haidian and Xicheng districts. Although ticket scalping is illegal in China, scalpers are a common sight at the country’s top medical institutions. A police officer stationed in a local hospital told NewsChina: “It’s not like we don’t try to catch them, it’s just that we can’t.”

Family Business

Wang Hong and his wife first came to Beijing seeking treatment for their son, who has NEWSCHINA I June 2016

Photo by CFP

Medical Profiteering

cerebral palsy. When the couple made it to the front of the line on their first visit and began to register for an appointment, scalpers approached them and offered them 50 yuan (US$8) to register for an additional appointment. They saw this solicitation as a business opportunity, and eventually they joined the scalpers’ ranks. “Many ticket scalpers have a family member who is suffering from chronic problems like mental health issues or paralysis,” said the police officer, who declined to give his name. “They rely on scalping to foot their medical bills. Because of the huge profits, they transform from patients to scalpers.” Wang told our reporter that if his son were not suffering from cerebral palsy, he would push him to join the business, too. It is common for a family of three to do so, he added. Zhang Meng (pseudonym), a police officer charged with monitoring two hospitals ranked at the top of China’s three-tier public hospital system, told our reporter that it is easy for family members to divide up the work – the amiable wife drums up customers; the son, familiar with online apps, makes the online reservations; and the husband distributes the tickets and collects the money. This basic model has proliferated nonstop, resulting in a standard hierarchy of boss, middlemen and runners. “Those we catch are usually the lowest on the totem pole,” Zhang said. “It is very difficult to ferret out the mastermind behind the scenes.” She added that scalping at hospitals was most rampant back in 2012. At that time, police in plain clothes patrolled hospitals every day and recorded any illegal activity before making arrests. However, she complained that even after they nabbed a scalper and asked the patient to hand over the evidence, the patient would usually refuse to cooperate and flee the scene. “We have to run after both scalpers and patients,” said another police officer. “Hospital security guards just watch us, they don’t help us out.” To make an appointment for a family member at Beijing Tongren Hospital’s famous ophthalmology department, Zhang NEWSCHINA I June 2016

Lin arrived an entire day in advance. Shortly after 5 PM, when the registration office employees had all gone home, she stood on a small stool she had brought and climbed through a waiting room window. She was quickly followed by a scalper. Zhang managed to nab the coveted first-in-line position, but soon groups of scalpers came and tried to physically push her away. Many of them yelled at her, but one scalper resorted to threats: “Believe it or not, I can place you in the front of the line or the back.” Zhang dared not reply and focused all of her energy on clinging to the handrail below the ticket window, trembling all over. “I never thought that the same people who ask you quietly whether you want a ticket would be so fierce when fighting for them,” she told NewsChina. Police officer Zhang Meng told our reporter the youngest scalper she has ever caught was only 19 years old. Scalpers are not afraid of being caught over and over again. One 21-year-old was caught scalping the day after he’d been released. When he was freed the second time, Zhang asked him whether or not he will continue in the same line of work. With his new iPhone in hand, he responded: “I can’t not do it; if you could earn 70,000 to 80,000 yuan [US$10,812-12,356] a month, wouldn’t you?” (The average Beijing monthly salary in 2014 was 6,463 yuan [US$998].) Zhang knows that the sky-high potential profits make it impossible to root out scalping completely, especially while the offense’s punishment remains so light. Under China’s Law of Punishment for Public Security and Administration, apprehended scalpers face five to 15 days’ detention, with an accompanying fine of 1,000 yuan (US$154) at most. “To some scalpers, getting detained is like taking a vacation,” Zhang said. “They can easily earn over 1,000 yuan [US$154] in a single transaction, enough to cover the fine and then some... They have too small a price to pay.” In contrast, the crime of scalping train and ship tickets has already been written into China’s Criminal Law. People who scalp tickets priced at over 5,000 yuan (US$772)

or who reap a profit of over 2,000 yuan (US$308) can be sentenced to up to three years in prison, with a fine five times that of the scalped ticket price. According to Zheng Xueqian, an expert from China Health Law Society, the lack of regulations in the national criminal code that targets hospital ticket scalpers is a gaping legal hole. She said tougher punitive measures are necessary to maintain a sound healthcare market.

Plight

According to the Beijing Health Bureau, doctors at Beijing hospitals met with patients for treatment and consultation about 220 million times in 2014. Half of those appointments occurred at the city’s major hospitals, and 90 percent of patients preferred to see specialists. The bureau also found that only 1.8 million specialist appointments are available in the capital every year, meaning more than 99 percent of patients who wanted to see a specialist were out of luck. Data from China’s Ministry of Health show that 80 percent of the country’s medical resources are concentrated in big cities, and 30 percent of those resources are directed to top-tier hospitals. Beijing Health Bureau found an average of 94 percent of beds in these hospitals were occupied, but that number dropped to 46 percent at smaller facilities. “Major hospitals ought to focus on complex and rare diseases,” Zheng Xueqian said. “Minor ailments could be treated easily at lower-tier hospitals.” In the face of overwhelming demand, many doctors hope to increase registration fees to ease major hospitals’ load. One doctor told NewsChina that “the price provided by scalpers reflects the real market price; patients buy these tickets because they think they’re worth it.” At this doctor’s hospital, appointment ticket fees for two famous specialists once yielded 2,000 yuan (US$308) and 5,000 yuan (US$772) on the black market, much higher than the original price of 300 yuan (US$46). “The price astonished a foreign doctor visiting our hospital, who only charges 300 euros

[US$338],” he said. Huang Yuguang, head of the anesthesiology department at Peking Union Medical College Hospital, however, said ticket scalping is the result of a severe shortage of highquality medical resources, leaving top-tier hospitals unable to cope with the deluge of demand. “The distribution of quality medical resources varies greatly in different regions, and between urban and rural areas,” he told China Daily. “The hospitals that people are really dissatisfied with fall far short of requirements.” This imbalance has become a focus of the country’s medical reforms. In 2015, the State Council, China’s cabinet, announced that China will set up a new system to improve services at county- and township-level health centers. The National Health and Family Planning Commission stated that training general medical practitioners would be a main aspect of the new reforms. Nevertheless, it remains hard to change patients’ traditional way of thinking. One dermatology patient told our reporter that she came to Beijing specifically for the best doctors. She bought a ticket from a scalper at more than 300 yuan (US$46), only to find that the medicines prescribed by physicians at the reputable Peking Union Medical College Hospital were the same as those recommended by doctors in her own town. Both hospitals and public security organs have been making an effort to make it more convenient for patients to make their own appointments, attempting to pull people away from the scalper route. Starting in 2001, hospitals began to implement an appointment system that required giving the patient’s name when registering. In 2009, making an appointment online and by phone became possible at major Beijing hospitals. But hospitals remain heaving with scalpers. A police officer told NewsChina that scalpers make appointments with patients’ medical cards in hand and also register appointments with false information online because

Photo by CFP

Society

Police officers in Beijing's Haidian District crack down on scalpers, January 29, 2016

those platforms are not connected to the public security bureau’s ID database. A doctor revealed that new patients are required to show their ID cards when they apply for a medical card, but if patients forget to bring their IDs, hospitals usually still let them obtain a card. As a result, a scalper could potentially have several medical cards and make many bookings under different names. And even when the eventual ticketholder’s name doesn’t match what’s on the paper, the scheme usually still works, as hospital staff find it hard to turn away patients who are often desperate and in need of medical care. “If a patient was holding a ticket under someone else’s name but kneels before you begging for treatment, would you refuse him?” asked one doctor at a top-tier hospital. According to Wang Yue, a medical law professor at Peking University, these problems could be solved by closing systemic loopholes, and there are plenty of ways to do so. “There are always more solutions than there are problems,” he said. For example, doctors could be required to see patients’ ID cards once more before giving prescriptions, rather than just their medical cards. He said the health ministry should learn from the railways ministry, as some high-speed train routes have forgone paper tickets altogether

and rely on ID cards alone when checking passengers at the station. “It is a matter of administration. Each department in the system has their own regulations; they rely on each other, but rarely communicate with each another,” he told NewsChina. “Hospitals, social security departments and public security organs need to figure out how to better exchange information.” Changes are in the works. After the Chinese New Year break in February, several reputable departments at major hospitals, including Beijing Tongren Hospital’s ophthalmology department where Zhang Lin was threatened by scalpers, removed the limit on the number of appointments to eliminate scalping. Industry insiders, however, are pessimistic about the move, saying it will “motivate more patients to see a doctor at the major hospitals and place those doctors under even more pressure.” At the same time, 22 major Beijing hospitals have started requiring all patients to make appointments either online or by phone as of this year. According to the Beijing Municipal Administration of Hospitals, canceling onsite appointments and requiring patients to register with their own names will effectively suppress scalping in the future. NEWSCHINA I June 2016

A nurse checks the stock of a local blood bank in Huai’an, Jiangsu Province, August 18, 2015

Blood Shortage

Photo by IC

Pennies for Plasma

Chronic seasonal blood shortages have created a huge black market for blood across China. NewsChina investigates By Wang Shan

hen Beijing Hospital blood bank director Gong Jiwu went back to work in late February after the annual Chinese New Year break, he issued an immediate “blood shortage alert” to all departments. The hospital’s stocks of type A and B supplies were low, a Level III alert, while supplies of type O blood were at critical levels, necessitating a Level II alert. “A Level III alert from the Beijing Hospital indicates the cancelation of all elective surgeries requiring over two units [in China one unit is 200 milliliters] of blood, while a Level II alert means refusing new admissions of surgical patients,” Gong, who also serves as the head of the Beijing Blood Transfusion Quality Control and Improvement Center, told our reporter. When NewsChina visited, the Beijing Hospital blood bank had only 30 units of blood in storage. A single liver transplant operation requires up to 100 units of blood. Therefore, when supplies are low, NEWSCHINA I June 2016

only Gong decides when the hospital can spare its precious reserves. “[Our stocks] are reserved for emergency use only,” commented one orderly, who chose to remain anonymous. ”A single case of postpartum hemorrhage could use up our entire supply.” A blood shortage occurs when on-hand blood products in blood banks cannot satisfy surgical demand. The phenomenon is commonplace in many Chinese provinces, particularly Jiangsu, Anhui, Henan and Shandong. According to media reports, some hospitals have canceled over 80 percent of elective surgeries, and 50 of 70 major cities across the country were facing severe blood shortages immediately after Chinese New Year. Lured by the potential to profit from China’s lack of legitimate blood stocks, an underground black market for donated blood products has boomed. “In our hospital, over 80 percent of donated blood has come through scalpers,” admitted one staff member at a top-tier

Society

Beijing hospital who chose to remain anonymous.

Chronic

In early March, in an inpatient ward of Peking University People’s Hospital, 63-year-old Li Huize was waiting for her scheduled knee replacement surgery. Her operation had already been postponed for a week due to a shortage of type O blood. With a sufficient blood supply, People’s Hospital can conduct some 15 double knee replacement surgeries, each of which requires an average of 400 milliliters of blood every day. In the month prior to Li’s arrival, a total of 100 surgeries had been canceled. “Many surgeries were canceled the day before at the behest of the blood bank,” Lin Jianhao, chief physician at the People’s Hospital orthopedic department, told NewsChina. “This situation makes it very difficult for us to treat patients.” “In the last few days, type O blood levels have not been on alert, but our blood bank informed me not to admit type B patients,” said Liu Qiang, head of admissions at People’s Hospital. Liu had to call each patient individually to persuade them to agree to postpone. “They have to wait anyway, so why not just wait at home?” Wang Hongjie, head of the Beijing Red Cross Blood Center, the capital’s largest supplier of legally donated blood and a provider to virtually all the city’s blood banks, confirmed the existence of a shortfall, but described it as a “seasonal issue” that, he claims, began in 2010. “In the worst situation in our history, our center’s reserve fell to 3,800 units [the center usually stores an average of 10,000 units of blood], enough to supply all Beijing hospitals for three days,” Wang explained, adding that blood shortages are common during the Chinese New Year season each year, when blood drives cease and large numbers of non-local residents return to their home provinces. In 2012, Guo Yanhong, then deputy director of the medical administration department of the Ministry of Health, told a press conference that since the end of 2010, blood shortages had already become “the norm” in several localities. The general consensus is that China’s number of blood donors, while growing, cannot keep up with rocketing demand. Total donations increased from 1,000 liquid tons in 1998 to almost 4,400 liquid tons in 2014, while the total number of registered blood donors went from 328,000 to 1,299,000 in the same period. According to data from the Ministry of Health, in 2014, 95 out of

every 10,000 people in China donated blood, far fewer than the average of 454 per 10,000 people recorded in developed countries, and still below the World Health Organization’s optimal “self-sufficient” ratio of 100 to 300 blood donors per 10,000 people. China’s National Blood Donation Law encourages patients whose conditions allow it to choose a date for their operation and have reserves of their own blood, or that of family members and friends, stored for their personal use. Legislators termed this practice “mutual assistance blood donation,” and the measure was essentially a response to the country’s chronic blood shortages. According to Zhang Xuan of the oncology and hematology center of Yanda Lu Daopei Hospital in Yanjiao, Hebei Province, his hospital can provide a mere 10 units of red blood cells per day, despite a waiting list of more than 300 patients, essentially making all surgeries dependent on mutual assistance blood donation.

Business

This form of donation was first legalized when the country’s blood donation law was ratified in 1998. It listed mutual assistance blood donation as a “supplementary” measure to voluntary blood donation. However, as supplies have failed to keep pace with demand, hospitals are increasingly dependent on this stopgap option. Worse still, it appears to have opened a back door to black marketeers. “Patients on our ward come from three different provinces, and do not have relatives living in Beijing, so where can they find resources for mutual assistance blood donation?” asked Li Feng, whose 19-yearold daughter suffers from severe aplastic anemia. “We have to seek help from blood scalpers. [In 2015] my daughter needed a transfusion and the doctor told us to go the mutual assistance route.” Li already had the contact information of seven scalpers in his cell phone. “As soon as I called them, they came. All I needed to do was to inform them of my daughter’s name and bed number,” he said. Zhang Yongxu, father of a five-year-old boy, showed our reporter a pile of receipts. From December 16, 2015, to February 25, 2016, his son used 37 units of blood platelets and 14 units of red blood cells. “One unit of blood platelets costs 500 yuan [US$77] and one of red blood cells costs 1,200 yuan [US$186],” Zhang recalled, the prices stamped in his memory. Most of the 300,000 yuan (US$46,400) that Zhang spent on blood went directly to scalpers. During Chinese New Year, he added, the price of blood platelets rose to 1,000 yuan NEWSCHINA I June 2016

Photo by IC

A blood donation center screens donated blood

(US$155) per unit, while the price of a unit of red blood cells shot up to 2,500 yuan (US$387). Due to impressive profit margins, China’s underground blood business, though illegal, has many eager recruits. From covert ad distributors to patient liaisons, scalpers are paid according to their rank within the system’s pyramidal management structure. “On average, a scalper can make 400,000 to 500,000 yuan [US$61,597-76,797] per year,” said an insider. 2,000 milliliters (10 units) of blood, he added, can sell for 10,000 yuan (US$1547), and, when the five donors needed for that amount are paid off with 500 yuan (US$77) apiece, the scalper can pocket 7,500 yuan (US$1,160) in pure profit. China’s black market for donated blood, it is claimed, has developed into a mafia-style organization, with various groups of scalpers in control of different territories, even within individual cities. Wang Ming (pseudonym), a scalper in his late 20s, is in charge of selling to patients in Beijing People’s Hospital and Jishuitan Hospital. He told NewsChina that in some particularly rich territories, individual scalpers work different departments within a single hospital, and violence can ensue if rival gangs attempt to muscle in. According to the Stipulations on Criminal Case Prosecution Standards jointly issued by China’s Supreme Procuratorate and the Ministry of Public Security, people who have engaged in illegal blood selling that resulted in a total income of 2,000 yuan (US$309) or more, or who have “organized” blood sellers found selling stocks contaminated with HIV or hepatitis B, will be “prosecuted according to the law.” According to data collected from 2009 to 2012 by the Beijing Blood Center, HIV infection rates in cases of mutual assistance blood donation cases are twice as high as in voluntary blood donation cases. NEWSCHINA I June 2016

Since 2014, the National Health and Family Planning Commission began to promote nucleic acid testing technology to blood banks to contain the spread of certain blood-borne viruses. Despite these “strict,” vague stipulations, it is very hard to prosecute blood scalpers. “In most cases, blood purchasers are not willing to testify since they do not want to anger the scalpers,” Wang Zhaohua, a prosecutor with the Xicheng District People’s Procuratorate in Beijing, explained to NewsChina. “At most, blood scalpers might receive administrative detention. Once released, they normally will resume their business.”

Solution

“During a blood shortage, performing transfusions is like cooking with limited rice,” said Gong Jiwu. “Some hospitals use up all their blood reserves when supplies are ample, while never thinking of managing their stocks in a reasonable way. Then, when the blood supply is already too low, they tell patients to seek mutual assistance.” A staff member in charge of the blood bank at one Beijing hospital, speaking anonymously to our reporter, complained that despite the precautionary measure of issuing blood shortage alerts, some doctors continued to conduct elective surgeries. “Sometimes, when the patient is already prepped, a doctor will call for blood. We have no choice then but to provide what the patient needs.” In Gong Jiwu’s opinion, two measures could alleviate China’s blood shortage crisis. One is to improve management systems and set up a standardized alert system for blood banks in order to make supply and demand more transparent. The second measure, he told our reporter, would be to promote voluntary blood donation in an effective way, emphasizing it as a social responsibility. “The government has given sufficient financial support to voluntary blood drives, yet their effectiveness is very limited,” Gong added. Zhou Keda, a researcher with the Guangxi Academy of Social Sciences, speaking in an interview with China Daily in 2012, argued that strictly implementing the law, which provides voluntary blood donors with preferential treatment when in need of transfusions themselves, would also help matters. Voluntary blood donation, according to Gong Jiwu, is ”self-help.” “The government should guarantee voluntary blood donors with free transfusions, should they need them in the future, creating a virtuous cycle,” he said.

Society

Internet Celebrities

The Business of Online Stardom A new group of Internet stars is emerging in China – its members are cultivated by “celebrity incubators” to quickly garner fame and use it to push self-branded products. Just as quickly, they are becoming undeniable contenders in online markets By Wang Sijing

ike many other 27-year-olds, Xu Yayan spends a lot of her time online. Unlike many of her peers, however, she has turned her social media skills into serious cash. The former model has more than 200,000 followers on Weibo, China’s Twitter equivalent, and about 40,000 followers on China’s ubiquitous messaging app, WeChat. Through WeChat, she and her sales representatives sell more than 10 million yuan (US$1.6m) in personal care products every month. Her three-year-old company, Yancy Beauty, is now worth more than 100 million yuan (US$15.5m). Most of the people who sell her products are minor Internet celebrities and models, just like Xu was several years ago. They are all

part of a new generation of business-savvy online stars that is fast developing in China – the stars who, armed with a pretty face and a team of investors, capitalize on their 15 minutes of fame by pushing products under their own labels. And it’s working. On last year’s record-breaking Singles’ Day, which occurs every November 11 and is China’s equivalent to Black Friday, e-commerce giant Alibaba saw US$14.3 billion in sales, with most of that coming from its titanic online retail plat-

The right to advertise on Internet sensation Papi Jiang’s videos was auctioned off for 22 million yuan (US$3.4m)

NEWSCHINA I June 2016

Photo by CFP

form, Taobao. Five of Taobao’s top 10 bestperforming shops that day belonged to online stars. Unlike in the West, where celebrities who market products are typically already famous in their own right, most of these young entrepreneurs appear seemingly out of nowhere. Along with their managers, they have successfully carved out a significant slice of the largest ecommerce market in the world.

Starting Up

Back in 2011, Xu Yayan was modeling for women’s clothing shops on Taobao. Xu earned 200 yuan (about US$30) per outfit. She sometimes did photoshoots for hundreds of outfits in one day. As Xu got increasing exposure on the Internet and built up some capital, she gradually learned to cash in on her growing fame by selling products to her fans. Now she is in the process of founding a new company, the mission of which will NEWSCHINA I June 2016

be to help fledgling stars mimic Xu’s own trajectory. She plans to sign a number of up-and-coming Internet celebrities, manage them, sell products directly to their fans, and profit. Xu is far from the first person to think of investing in rising Internet stars. Ruhan E-commerce, an “Internet celebrity incubator,” has received votes of confidence from investors with successful rounds of Series A and B funding. One of its signed Internet personalities, former Taobao model Zhang Dayi, has more than 4.2 million Weibo followers. In 2015 alone, Zhang’s Taobao shop sold 700 million yuan (US$108m) worth of products. “Copying Zhang Dayi” is now Ruhan’s main strategy. Perhaps the most famous example of investors stepping into the Internet celeb world is the 29-year-old Shanghai native who vlogs under the handle “Papi Jiang.” Earlier this year, she started uploading video clips in which she discussed, mocked or criticized various social phenomena. She parodied everyone from rich Shanghai socialites to people in relationships who never stop talking about their significant others. Her videos went viral among China’s social networks and have been

Internet star Papi Jiang

viewed more than 100 million times in total. On March 19, news broke that Papi Jiang had received an investment of 12 million yuan (US$1.85m) from venture capitalists looking to monetize her brand. Her liberal use of colorful language, however, has recently seen her videos pulled from many sites.

Behind the Scenes

To fans, it often appears as if online stars manage and operate their businesses singlehandedly. Yet in reality, in most cases, they need funding and support from a team in order to create a brand out of nothing. Companies like Ruhan exploit various channels to try to get as many fans as possible for their Internet stars-to-be. Normally, it costs about 30 yuan (US$4.63) to get

Society

Profits

one Weibo follower. “No one can become famous out of nowhere without spending some money,” said Liu Sa, chief operating officer of Xu Yayan’s Yancy Beauty. Liu concentrates on lowering the cost of accumulating fans. “Getting one million followers for 100,000 yuan [about US$15,500] is the best possible result,” he said. An industry report by Everbright Securities found that behind a budding Internet celebrity, there are usually one or two managers and a small team of copywriters and photographers. When the star really starts to shine, the team adds on an additional handful of people to run the supply chain. Finally, at least one customer service representative is needed for every 1 million yuan (about US$155,000) in sales made per year. Da Jin is a 24-year-old Internet celebrity who, after six months of collaboration with Ruhan E-commerce, has racked up more than a million transactions on her Taobao store. The company provided a team of more than 30 people for her business. And Da is just one example – Ruhan currently runs more than 50 such Taobao stores.

Once the number of fans hits a tipping point, the returns pile up. When Xu Yayan was still a lesser-known celebrity back in April 2013, she launched a shampoo-and-conditioner set that she dubbed hair care’s new “magic weapon.” The first batch of 3,000 sold out in two hours through Weibo and WeChat. The next 65,000 sold out in three days, an average of more than 15 sales every minute. Now, with the help of Xu’s sales representatives, she sells more than one million sets a year, netting her company a profit of over 10 million yuan (US$1.55m). Xu’s company has been collaborating with a number of other Internet celebrities and up-and-comers, gradually forming their own Internet celebrity incubator with the main aim of producing as many of these top-selling products as possible. Yet products manufactured for Internet celebrities require a different supply chain from traditional ones. To quickly respond to the ever-changing needs of an online shop, suppliers need to purchase raw materials, design the product, produce and deliver it in a week or less. In Guangdong Province, famous for its clusters of gigantic factories, it’s not difficult to develop these products. Sometimes, an online star’s shop may just need to send suppliers a product made by a famous international brand and say: “Give me something identical.”

These factories may even use the same raw materials a foreign brand uses to produce the new product, so a perfume may not be under the Dior name but still have the Dior aroma. Then it gets stamped with the Internet celebrity’s brand. Right now, Xu Yayan’s company manages six brands and some 20 products, including fragrances, shampoos and tooth whiteners. Every day, more than a thousand boxes of products are mailed out from the company’s 3,000-square-meter warehouse. Xu told NewsChina that she has more than a hundred senior sales agents under her company umbrella, most of whom are smallscale online stars themselves. They currently sell Xu’s products exclusively, but once they gain more fame and fans the company will develop products specially made for them. According to iResearch, a consulting company focusing on e-commerce, managing companies and their signed online celebrities tend to split profits 50-50. Still, 10 percent of the Internet star market is made up of people clearing 1 million yuan (about US$155,000) in profits every year. Xu Yayan herself isn’t hurting, either. The 20-something owns two apartments in Shenzhen and more than ten cars, including a Ferrari, which she has featured in more than a few of her social media posts. She uses it as motivation for others who want to sell her products. “I want to show [them] that if they sell online then they, too, can afford a Ferrari,” she said. NEWSCHINA I June 2016

School Districts

Rough Trade

Parents in the Chinese capital rush to buy expensive homes in top school districts regardless of their quality, or even the guarantee of placement in a decent school By Wu Ziru and Du Guodong

hen Hua (pseudonym) noticed a tense atmosphere growing even as the number of his son’s playmates began to dwindle. A software engineer, Chen lives in a neighborhood of Huilongguan in northern Beijing’s Changping District, an area home to many IT professionals. Some of his son’s best friends had recently moved into xuequ fang, or school district homes, in downtown Xicheng, a district boasting Beijing’s best elementary, middle and high schools. So long as their parents hold a Beijing hukou, or permanent residence NEWSCHINA I June 2016

permit, children living in homes within top school enrollment areas are guaranteed a place provided their homes are bought and registered in their parents’ names. Chen’s son is already six years old, and while, in his words, the elementary school in his community is “not too bad,” the local middle school “leaves much to be desired.” As the education policy in Beijing requires that middle schools enroll students from the elementary schools in closest proximity, Chen has had to consider buying a second apartment in order for his son to gain access

to better educational opportunities. “If my son cannot go to a good elementary school, he will not be able to enter a good middle school, or a good high school after that. As a result, it is unlikely he will be admitted to a reputable university,” Chen told NewsChina.

Mania

In April 2014, the Beijing Municipal Commission of Education announced a new round of reform, saying that in order to boost equality in education, school-age chil-

Photo by IC

School district residential properties under construction in Huai’an, Jiangsu Province, September 14, 2014

Photo by IC

Society

An 11-square-meter apartment in Beijing’s Xicheng District recently sold for 5.3 million yuan (US$815,000), March 7, 2016

dren will only be enrolled in schools according to where they are registered as residents. The same reform package outlawed entrance examinations. According to new regulations, the most important factor that decides enrollment in an elementary school is local home ownership. Rather than helping restore equilibrium in access to education in a system tilted in favor of the wealthy, however, the change simply pushed parents who could afford it to buy homes in top school districts, dramatically increasing housing prices in the most desirable enrollment areas. Starting from the spring of 2014, average prices of top school district apartments witnessed an explosive spike citywide, catching many parents off guard. Many subsequently bankrupted their families in a bid to buy a school district house. The reform also turned many ordinary, dingy, poor-quality apartments into hot properties simply by virtue of the fact they were in good school districts. In October 2014, a colleague of Chen’s bought a one-bedroom apartment in downtown Dongcheng District, which was not consid-

ered a good school district house at the time it was built. The 50-square-meter, dilapidated apartment ended up costing Chen’s colleague 2.45 million yuan (US$378,000). After the detailed reform regulations came into force in Dongcheng District, 30 percent of students attending the elementary school in the residential community in which Chen’s colleague now lives could directly enroll in a reputable middle school. House prices in the neighborhood have continued to soar ever since. Chen decided he could not wait any longer and has spent nearly every weekend since the beginning of 2016 hunting for a school district apartment. He has scraped together a down payment of 3 million yuan (US$460,000) including a 1 million yuan (US$154,000) loan from his father. This sum, he has found, is “far from being enough to buy a good school district apartment, let alone one in Xicheng District.” Chen told our reporter that he once looked at a 15-square-meter bungalow in a courtyard downtown, with neither a kitchen nor toilet. Its walls were peeling paint and its floor was filthy and uneven. He described the

house as “uninhabitable,” and yet the price was extortionate simply because it was situated adjacent to a top elementary school. Chen finally secured an old apartment in the downtown area, paying a 2.5 million yuan (US$386,000) down payment and getting a bank loan of 1.6 million yuan (US$247,000). The price of the property had increased by nearly 50 percent in six months. His son will be admitted to an elementary school close to his new apartment in September. “This is all I can offer my son,” he said. The National Bureau of Statistics announced in March that the price of secondhand housing in Beijing had gone up 27.7 percent year-on-year. According to statistics from Chinese real estate agency and consultancy firm HomeLink, the average house price in Beijing hit 44,341 yuan (US$6,878) per square meter in March, a record high in a city that had an average monthly salary of 6,463 yuan (US$998) in 2014. Yin Bo, a realtor at HomeLink, told NewsChina that apartments in popular school areas are 30 to 50 percent more expensive than the average, adding that “the gap has become increasingly wider.” “Whether a child can be admitted to a good elementary school or not depends on nothing but the size of their parents’ wallet,” he said. Xiong Bingqi, deputy director of the 21st Century Education Research Institute, a private educational think tank, believes school district apartments are gaining popularity because they have become a dual investment. “It is both an educational and a financial investment,” he told the Shanghai Morning Post. He said the rocketing prices of school district homes in major cities reflects the severe imbalance in educational resources, adding that the only way to cool down the market would be to ensure the balanced development of nine-year compulsory education. NEWSCHINA I June 2016

NEWSCHINA I June 2016

Photo by IC

Liu Dongmei (pseudonym) and her husband have been living in Beijing for more than 15 years. Like Chen Hua, they also live in Changping District and their community’s elementary school is a very small two-building establishment. The middle school nearby is slightly better, but, Liu told our reporter, “students have to go a long way to use the public toilet.” Also like Chen, Liu and her spouse both graduated from college and made education a priority for their son. As their child is about to reach school age, they too have embarked on a search for a school district home in a downtown area in order to prevent their son “losing at the starting line.” The couple has amassed around 600,000 yuan (US$92,560) for a down payment, meaning they are effectively priced out of Xicheng District. HomeLink statistics show that the average house price in Xicheng hit 78,267 yuan (US$12,138) per square meter in March. They have also discovered that some reputable schools require that new enrollments have lived in the pertinent school district for at least three years. In the end, they settled on a property in the northwestern district of Haidian. Their first viewing was an old apartment built in the 1980s with a floor space of only 40 square meters but a price tag of 2.2 million yuan (US$340,000), the bathroom of which was too tiny to hold both a toilet and a sink. They finally settled on another small apartment in the same neighborhood for 2.15 million yuan (US$330,000), a home which fell in the school district of Peking University’s affiliated elementary school. Even after committing to handing over their nest egg for a shabby apartment, the couple’s troubles had only just begun. Initially delighted they had secured the property, they were shocked to discover that, as Liu owned one apartment in her hometown and her husband owned another in Beijing, under cur-

Photo by IC

Cost

A resident in Shenyang, Liaoning Province, sells her school district house at a local real estate fair, June 27, 2013

Chinese parents need to research enrollment policies intensely in order to find the right school district

rent regulations, the maximum home loan they could apply for would be 800,000 yuan (US$123,000). This meant that their new “find” would require a down payment of at least 1.35 million yuan (US$208,000), way beyond their means. Liu’s realtor had some advice: The couple should divorce. In Liu’s case, unmarried people without property in Beijing can apply for mortgage loans of 1.2 million yuan (US$185,000). “It was just like they were offering a tip on where to eat dinner,” Liu told our reporter. “School placement is so urgent that many parents have bought their school district houses [by divorcing].” Yin Bo told our reporter that it is common nowadays for couples to divorce in order to buy a third apartment (when each individual household was still allowed to buy two apartments in Beijing), or even simply to avoid additional taxes on a second home purchase. As marriage licenses and divorce certificates are

easily issued in China, once their transaction is complete, he said, “the divorced couple remarries shortly after.” “You choose the lesser of two evils,” he added. On the advice of her realtor, Liu divorced her husband and successfully bought their coveted school district apartment. However, their son’s enrollment is far from settled, as neither Liu nor her husband has a Beijing hukou. The most recent admissions requirements issued by Peking University’s affiliated elementary school state that places will be offered first to students who both live in the school district and have a Beijing hukou. Only a shortfall in enrollments could make space for Liu’s son. Liu told our reporter her experiences made her realize that she had to adapt to breakneck social change by preparing for everything – including the worst – in advance. “The rules are right there and they are changing all the time. You can do nothing but comply,” she said.

Economy

Yu Miaojie

Trade Talk

In an academic area lacking Chinese representation, a Chinese economist is building an international reputation by deftly deciphering China’s global economic role. NewsChina talks with him about his research and what the country can do to spur growth By Li Jia

Yu Miaojie

Photo by CFP

or more than two decades, international economists have been trying to unravel the mysteries surrounding China-specific economic phenomena that seem to be at odds with orthodox economics. The riddles have ranged from the paradox of China’s massive money supply yet low rate of inflation, as put forward in 1993 by international economist Ronald McKinnon, to the country’s miraculous rise from impoverished nation to economic powerhouse. Yu Miaojie, a 40-year-old professor at Peking University’s China Center for Economic Research, has spent the past few years trying to solve a puzzle of his own: why reducing tariffs on imported final goods in China has contributed so much to the country’s growth in productivity. This is an apparent deviation from existing theory pointing to evidence in other developing economies, where reducing tariffs on imported intermediate goods – not final goods – has contributed more to productivity growth, as those items are used to create other products that can then be exported. This process is called “processing trade.” In a recent paper, Yu argued that China’s improvement in productivity, which was

largely caused by the elimination of tariffs on imported components intended for processing trade, is not an economic exception, but proof of existing theory. On March 24, the UK’s The Economic Journal announced that his paper had won its annual Royal Economic Society Prize, an honor given to the best paper printed each year in the esteemed 125-year-old publication, which was edited by John Maynard Keynes from 1912 to 1944. Yu has become the first economist from the Chinese mainland, and the first solo economist of Chinese descent, to win the prize. NewsChina talked to Yu about the theories and research that led to this accomplishment. He highlighted the importance of China’s further integration into the global value chain, particularly through boosted imports and outbound investment. He also said he sees more potential for cooperation between Chinese and international economists, whose respective advantages can bring analysts one step closer to cracking the puzzle that is China’s economy. NewsChina: What made your research project different from others’? NEWSCHINA I June 2016

Ordinary and processing trade as a percentage of China’s total imports and exports

55.2

5.5.0

50 40

53.0 47.6

41.5

41.0

Ordinary trade Processing trade

52.0

50.6 44.0

46.3 47

44.0

48.8

45.7 47

48.3

53.0

52.8

54.0

44.0

41.0 34.8

32.6

32.8

31.8

20 10 0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Sources: General Administration of Customs of China, Ministry of Commerce of China

Yu Miaojie: When other researchers have discussed the impact of trade liberalization on the productivity of a country’s domestic producers, they typically focus on the effect of lowering tariffs on imported final goods. For example, lower tariffs on cell phone imports could bring more iPhones into China. This would cause a pro-competitive effect among domestic cell phone manufacturers, motivating them to improve so they can keep up in a more competitive market, while driving out inefficient manufacturers at the same time. Both Chinese consumers and related industries benefit from this. However, processing trade – in which Chinese companies import intermediate products, such as tires for a car, and export the final outputs, or the cars – has accounted for nearly half of China’s total foreign trade for years. China now records about US$4 trillion in foreign trade every year. About US$2 trillion of it involves processing trade, which is huge. Lowering tariffs brings costs down for businesses engaged in the processing trade. However, there have been zero tariffs on such imports in China since the 1980s. Because there have been no tariffs from the start in this sector, there can be no tariff reNEWSCHINA I June 2016

ductions, leaving a hole in previous observations by international analysts on the impact tariff changes have on productivity at the enterprise level. As a result, China appeared to be an exceptional case in international trade studies. In other emerging economies that also encourage processing trade, gradually reducing tariffs on imported intermediate goods has boosted productivity more than decreasing tariffs on imported final goods. However, once China’s zero-tariff policy that nurtures the country’s gigantic processing trade is taken into account, it is clear the significant cost-saving effect of the policy has been overlooked. The conclusion is that the use of better, cheaper intermediate imported goods in the processing trade has also contributed more to China’s upsurge in productivity than tariff reductions on final goods, making China no exception to the rule. My quantitative analysis shows that 42 percent of the growth in productivity in China’s manufacturers and about 15 percent of China’s economic growth as a whole came from trade liberalization in the decade following China’s World Trade Organization accession in 2001. These numbers prove that

deep integration into the global value chain has made a significant contribution to China’s prosperity. NC: Through its Made in China 2025 national strategy, China is trying to become a manufacturing power that is placed higher up in the global value chain. How could increased imports help realize this goal? YM: As economist and Nobel laureate Paul Krugman has stressed, “Productivity is not everything, but in the long run it is almost everything.” Imports can contribute to China’s productivity in several ways. Firstly, upping the imports of quality intermediate products can improve the quality of final products made in China and give more choices to Chinese businesses engaged in processing trade. Besides, when one Chinese producer uses a better intermediate product imported from overseas, its competitors may immediately follow suit. In this way, the productivity of entire industries can be improved. Secondly, importing capital goods, or materials used for production that do not require further processing, such as machinery,

Economy

can help, say, shoe manufacturers to produce better shoes. Thirdly, importing more final products, as I touched on before, can spur competition and give consumers more options. It also provides a chance for Chinese producers to study the quality gap between their products and the best ones in the world, and figure out how to catch up. NC: Exports have been prioritized over imports in China for years. Do you think we should reassess the importance of imports? YM: Yes. Actually, at least as far as processing trade goes, the lack of tariffs shows that imports have been given the same importance as exports in this regard. Generally, however, more efforts have been made on bolstering the country’s exports. China currently has several opportunities to boost imports. Firstly, as the US is eyeing ways to up its exports significantly, China can take advantage of this and import more, which would help ease trade disputes, reduce its excessive foreign exchange reserves and improve businesses’ total factor productivity [the growth gained from efficient use of factors like labor, capital, raw materials and technology]. This would make everyone happy. Building free trade areas [FTAs] with major trade partners is another important method. The agreement to upgrade the ASEAN-China FTA will take effect [in May 2016, a move which is expected to more than double the trade between China and the 10 ASEAN member states to US$1 trillion by 2020]. Negotiations are underway for the Regional Comprehensive Economic Partnership [which includes the ASEAN countries, China, Australia, South Korea, Japan, New Zealand and India]. Both trade partnerships are crucial for China’s imports. ASEAN countries are some of China’s main sources for raw materials like rubber and wood. South Korea and Japan are China’s main suppliers for core intermediate products.

NC: China is not only a big international trader, but also, increasingly, an international investor. Can China’s outward foreign direct investment [FDI] improve productivity back in China? YM: Absolutely. [For the first time,] China’s outward FDI exceeded its inward FDI in 2014 [if overseas investment via a third market is taken into account, according to China’s Ministry of Commerce]. China became the world’s third-largest outbound investor [in 2012]. This new phenomenon is worth researching. Why are Chinese enterprises going abroad? The first reason is they are driven by a demand for resources, as seen in their iron ore mining projects in Australia, for example. The second is they are acting as contractors to build roads and bridges in other countries. Chinese businesses have been using these two channels of conventional outward FDI for years. The third is they are attracted by cheaper labor in less-developed markets in Southeast Asia and Africa. The fourth is they are eyeing expansion in developed markets like the US to circumvent high import tariffs during trade disputes. The last two reasons contribute more to China’s productivity growth than the first two. Greenfield investment [mainly the building of manufacturing facilities in a foreign country] not only expands the overseas market, but also forces a company to improve the technology used in its overseas subsidiaries in order to survive in global competition. The progress made in its overseas operations will then spread throughout the entire company. For companies taking advantage of cheaper labor in their overseas factories, the money they save can then be spent on upgrading their domestic facilities. At the same time, some of these companies have had to close their factories in China. Those workers then have to find other jobs. Many of them have moved to the service sector, working in package delivery or opening online businesses. This has already happened, and has

actually helped China’s service sector grow rapidly over the past few years. NC: In one of your recent papers on China’s outward FDI, you discuss a strange phenomenon. Despite disadvantages in access to land and capital, China’s private enterprises have outperformed State-owned enterprises [SOEs] domestically. However, they are less productive than SOEs in overseas markets, even though those disadvantages do not exist in other countries. Why is this? YM: This is also because of domestic discrimination against private companies. For example, let’s say there are two companies at the same level of productivity, one private and one State-owned. The private company would be much more motivated to go abroad to avoid unfair domestic competition, even if it may not be prepared enough to do so. By contrast, the SOE feels much more comfortable staying in the domestic market. As a result, SOEs only venture abroad when they are strong enough, while some private companies are forced to try their luck on a fairer playing field before they are prepared for internationalization. NC: Do you think Chinese economists face biases in international academia? YM: There was probably bias about a decade ago, to some extent. For example, a grammatical error in a paper could call the academic competence of a Chinese scholar into question, but would be treated as no more than a different writing style in a paper by a Western academic. However, things have changed over the years. I certainly feel happy and lucky to have won [the Royal Economic Society Prize]. I was quite impressed by the openness of the review process. Academic rigor in a paper is everything. It does not matter where you are from. The candidates included some very prominent, world-class economists. There are several reasons for winning the award in my case, and factors contributing to NEWSCHINA I June 2016

china

bynumbers US$4tn more international recognition of Chinese economists nowadays. Firstly, solo researchers [like myself] have a higher chance of winning than teams of authors. Secondly, I am a Chinese economist addressing an economic issue specific to China, with practical significance. I don’t think I could have won the prize if I were doing research on the US economy or if I had done the research on China while abroad. Economists’ understanding of China, the second-largest economy and the largest emerging economy in the world, is still very limited, but is regarded as increasingly important by analysts around the world. Chinese scholars have firsthand information on what is going on in China, and are thus better at spotting the long-term, substantial issues most worthy of research. All of my research topics – growth, trade liberalization – resonated with China’s long-term economic reality. Then I narrowed down my focus on imports and productivity, which are very specific and as of yet underresearched. An economist should refrain from taking up too broad of an issue, or commenting on unfamiliar arenas. Once your topic is identified, the next step is to work on it in depth. In this regard, the training on conducting meticulous research that I received while studying abroad [as a PhD student at the University of California, Davis] was very helpful. I learned how important it is to build your propositions on empirical and quantitative analysis, using intense precision. All of the data in my paper are available for others to download, so the data can be cross-checked by colleagues around the world. You cannot convince others that you just feel your theory is true. You have to prove it with standard academic language and rigorous analysis. Given this, my own experience tells me Chinese and international economists can cooperate, each using their own advantages, to provide a better understanding of China’s economy to market observers and players. NEWSCHINA I June 2016

Difference between fixed asset investment and capital formation, %

Amount by which fixed asset investment, including investment in tangible assets only, currently exceeds capital formation, including investment in both tangible and intangible assets -- typically the higher value -- in 2015. Fixed asset investment has exceeded capital formation in China since 2006.

90 80 70 60 50 40 30 20 10 0

2006 2007

2008

2009 2010 2011

2012

2013

2014

2015

Source: National Bureau of Statistics of China

US$72.5bn

US$222.1bn

Approved value as of March 30 of the yuan-denominated Qualified Foreign Institutional Investor program (RQFII), a scheme which allows offshore yuan deposits to be invested in the Chinese mainland.

Net external financial liabilities of China’s banking sector (not including the country’s central bank) by the end of 2015. This is the first time this figure has been publicized. External financial assets of China’s banking sector, % of total US$721.6bn Deposits and loans Bonds Stocks/other

Origins of RQFII, % of total Hong Kong South Korea

Deposits and loans Bonds 0 Stocks/other 10 20

France

Germany

Source: State Administration of Foreign Exchange of China

Singapore Australia

Switzerland

Source: State Administration of Foreign Exchange of China

Luxembourg Canada

33.9bn kW The 2015 unused capacity of wind farms in China’s northern, northeastern and northwestern regions, home to the bulk of the country’s wind capacity.

Source: National Energy Administration of China

External financial liabilities of China’s banking sector, % of total US$943.7bn

6.7% Growth rate of China’s economy in the first quarter of 2016 Indicators of China’s economy, Q1 2016, y-o-y change 30 25 20 15 10 5 0 -5 -10 Value-added industrial output for enterprises with at least US$31bn in annual revenue Real estate investment Online retail sales of goods and services Value of imports and exports Producer Price Index (indicator of profitability) Infrastructure investment Crude coal output volume Crude steel output volume

Source: National Bureau of Statistics of China

Culture

Sent-down Youth

Facing Suffering

During the Cultural Revolution, millions of urban youth were sent to labor in the countryside for “re-education.” Almost 40 years later, two of them wrote a cantata about the experience that has since reverberated around the world By Rong Xiaoqing

ways shortly after. At the time, they couldn’t have known that after decades of dormancy, their musical cooperation would come back to life and together they would create something that would resonate among sent-down youth the world over.

Buried Past

At 15 years old, Su left his Guangdong Province hometown in the midst of chaos. His father and one of his older brothers had been accused of spying for China’s Nationalist Party and thrown in jail. Soldiers had ransacked his home and others had bullied and beaten his family members. When he reached rural Hainan, Su and his fellow sent-down students arose before daybreak and tapped rubber trees for 10 to 12 hours every day. Later, he was selected to manage a plant nursery, for which he shouldered a pole bearing two buckets of water more than 100 times a day. The arduous conditions took their toll – the manual labor left him with chronic lumbar strain in adulthood and, perhaps because of malnutrition, he now stands a few inches shorter than his siblings. When China began its period of Reform and Opening-up in the late 1970s, Su became part of the first class of students to pass the reinstated national college examination and attend university after the end of the Cultural Revolution (1966-1976). After graduating in 1982, he was among the first to

Photo courtesy of the interviewee

n a spring day in 2007, as the Yale University cherry blossom trees began to bloom, two men met on campus, reuniting for the first time in nearly four decades. “He recognized me at once, but I didn’t recognize him; I had forgotten his face,” said Su Wei, a senior lector in Yale’s department of East Asian languages and literature. The other man, Huo Dongling, was a successful entrepreneur who had for years occupied a place on The Hurun Research Institute’s list of China’s wealthiest individuals. When they last laid eyes on each other, they had been young men assigned to work in the countryside as “sent-down youth” – urban teenagers and young adults sent to be “re-educated” by laboring alongside farmers in rural areas. This Mao Zedong initiative, dubbed the “Up to the Mountains and Down to the Countryside Movement,” led to the relocation of about 17 million young people in the late ’60s and early ’70s. Strictly speaking, Su and Huo had only met a few times as sent-down youth in the Hainan Province countryside. Huo had taught himself musical composition and had garnered some fame among Hainan’s sent-down youth as a composer of sorts. Su, a future language professor, had earned a reputation for his literary talent. They wrote a propaganda song together called “Patrolling the Dam” for a coastal land reclamation project run by the local military. They parted

Su Wei as a sent-down youth in Hainan Province, 1973

study abroad after the country reopened its doors. He studied in the US and returned to China after graduation, coming back to the US more permanently in 1989. He has since taught at several American universities.

Second Life

In 2006, Su once again crossed over the Pacific to visit relatives in Guangdong Province. While watching a TV show called My Sentdown Youth, he heard a melody and lyrics he knew well. Business executive Huo Dongling NEWSCHINA I June 2016

Photo courtesy of the interviewee

Musicians perform “Ask the Sky and the Earth: A Cantata for the Sent-down Youth” at Yale University

was singing their song, “Patrolling the Dam,” while being interviewed on the show. Huo even named Su on air as the song’s lyricist. For some reason, Su didn’t really give the show too much thought. By that point, that period of his life had been buried deep in his memory. But, one year later, he dug it back up. Before Huo went to the US on a business trip, he looked up Su’s email address and asked whether or not they could meet. Su agreed without hesitation due to a simple rule of his: “My door is always open to any sent-down youth.” After that Yale meeting, the two old friends spent the entire night talking. “All of a sudden, all of my deepest memories about my sent-down days came back to me,” Su told NewsChina. The product of their conversation was the beginning of a multipart cantata, or narrative musical composition written for voices and instrumental accompaniment, titled “Ask the Sky and the Earth: A Cantata for the Sentdown Youth.” Huo had asked Su if he would be interested in writing a song dedicated to their sent-down peers. Over the next year, Huo composed the music and Su wrote the lyrics, just as they had done decades prior. The piece consisted of nine songs and included parts for a choir, soloists and a wind NEWSCHINA I June 2016

band. By depicting scenes of abandonment, labor, romance, loss and death, “Ask the Sky and the Earth” echoed the memories of a young generation’s untold sufferings in the countryside. The cantata premiered in Guangzhou, Guangdong’s provincial capital, in September 2008, and later traveled to Beijing’s National Center for the Performing Arts. It won the 2009 Lu Xun Literature and Art Award, one of Guangdong’s most important cultural awards. It did not take long for the cantata to cross oceans and reach international audiences. Musicians have performed it in the US, Australia and Germany. In 2011, the cantata made its way to Carnegie Hall. It was performed by the Yale Concert Band and a special chorus formed specifically to sing the piece. “Neither of us expected this to go to Carnegie Hall, to get so big,” Su told the Yale Daily News in 2011. “Any performance at Carnegie Hall speaks to the world... And that night, we were telling a story to the world.” The “Ask the Sky and the Earth” story has about 17 million protagonists, all of whom could relate in some way to Su’s and Huo’s sent-down experiences. At the cantata’s Carnegie Hall performance, conductor Thomas Duffy asked those who had been sent-down youth, or whose family members had been

sent down, to stand. A significant portion of the audience rose to their feet. The cantata’s fame continued to spread by word of mouth. Many performances were organized by former sent-down youth or their relatives. “A chorus member from Yale went to Indiana to look for work, so Indiana invited us to perform,” Su said. “From Indiana, word spread to Chicago, so Chicago invited us. Then it was St. Louis. It was snowballing.” In 2015, the cantata’s European premiere was held in Frankfurt, Germany. When covering the event, local Chinese newspaper Huashangbao wrote: “When the performance was over, everyone, both on stage and in the audience, was very excited. Even the venue’s manager said he had never seen such a sight there.” According to Huashangbao, Su, Huo and that night’s conductor were surrounded by admiring audience members for a long time. The cantata is still gracing stages worldwide, with tours planned in the UK and Canada.

Mixed Reaction

While many have praised “Ask the Sky and the Earth,” others have criticized it, especially for its overall upbeat nature. For example, in the cantata, Su painted his experiences tapping rubber trees in a positive light: “We were busy tapping rubber trees by the Nandu River. Songs flew with the rosy clouds… I carried the rubber you collected. We sang and laughed all the way.” When addressing this criticism, Su emphasized that the cantata was not written to mourn a lost past. Instead, it was meant as a tribute to the idealism and vigor of youth, as well as the beauty of Hainan Island. At the same time, he’s all too aware of the misery that members of his generation have experienced and the conflict they feel when reflecting on their sent-down youth. A line in the cantata goes: “Don’t ask me whether I regret my youth. There is nothing more precious than life.” Su said asking him and his peers whether or not they grieve for that period of their lives is a flawed proposition. “We never had a choice,” he said. Now, he added, the only choice they have is the way by which they view their past. “It’s not about whether or not we suffered, but about how we face that suffering,” said Su.

Culture

Zhang Huoding

Lone Star

Zhang Huodingâ&#x20AC;&#x2122;s intense discipline and talent propelled her to opera greatness, making her a bright star in a fading firmament

Zhang Huoding performs The Jewelry Purse at Beijing's National Center for the Performing Arts, May 28, 2015

Photo by XHS

By Liu Danqing

NEWSCHINA I June 2016

n stage, in one of her signature roles, opera megastar Zhang Huoding transforms into a spoiled bride on her wedding day. From beneath her mask of makeup and a gilded blue headdress, the 44-year-old enchants the audience with her refined voice and expressive dancing. After the last curtain call, however, she returns to a life of simplicity. After she removes her heavy makeup and ornate gowns, this petite performer keeps a low profile, forgoing the primary colors of her stage costumes to remain unassuming in black. Despite her fame, Zhang harbors an aversion to publicity. She rarely grants interviews or attends promotional events. She leads a simple, quiet and highly disciplined life, following the strict “old rules” outlined by her opera master predecessors. Zhang is the standout third-generation heir of the Cheng school of Peking opera, one of the four greatest schools for the art’s female roles. Although the luster of Chinese opera’s golden age has long faded, Zhang’s fans still flock to her performances and shower her with the same adulation given to movie stars or pop singers. This passion she still inspires makes Zhang’s demure personage even more exceptional.

Unexplained Power

In April 2014, after taking a four-year break to teach and be with her newborn daughter, Zhang returned to the stage and gave two back-to-back shows at Beijing’s Chang’an Grand Theater. On the first night she performed The Butterfly Lovers, a tragic romance often called China’s Romeo and Juliet, and the next she starred as the wealthy bride in The Jewelry Purse, the Cheng school’s signature work. The two plays both sold out the same day tickets went on sale, with some scalpers reselling seats for a small fortune. The event organizer had to issue a special policy – ticket sales were linked to buyers’ ID cards, and each ID cardholder could snag two tickets only. This fervor stretched across the Pacific, too. In 2015, the opera diva made her US debut in New York City’s Lincoln Center. She performed The Jewelry Purse once again, as well as Legend of the White Snake, a classic love story between a young scholar and a shape-shifting snake spirit. The US audience, with many Chinese-speakers in attendance, roared in admiration for the artist’s melodious yet sorrowful singing and graceful, long-sleeved dancing. Theatergoers wouldn’t let Zhang leave the stage until after she took six curtain calls. Peking opera differs greatly from its Western counterpart. It not only consists of vocals, acting and instrumental performances, but also dancing, martial arts, acrobatics, miming and speech. The art evolved out of several southern regional operatic styles in the late 18th century and reached its peak toward the end of the Qing Dynasty

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(1644-1911) and the advent of the post-imperial era. Performers wear specific facial makeup and garments to signify the identity of their characters. Different colorings or costumes could represent a warrior, a scholar-official, a noblewoman, a maidservant or a clown. Zhang Huoding plays qingyi roles, a term which translates literally as “blue robes.” In Peking opera, qingyi characters are often virtuous female leads; they are the faithful wives or filial daughters. Qingyi performers focus more on singing and have fewer dance or acrobatic requirements. Their behavior is restrained, controlled and graceful. The Cheng school emerged in the early 20th century from the teachings of Peking opera legend Cheng Yanqiu. This school’s quintessential performance skill is the expression of deep, subtle, lowpitched tones that sound like a woman sobbing or whimpering, making Cheng school disciples best equipped to convey a character’s tormented inner world. Cheng school plays are mainly tragedies. While her on-stage persona might be filled with lovelorn angst, the real Zhang is neither an emotional person nor a romantic. “Too straightforward” is the way many describe her. She’s known for candid remarks that, while sincere, rarely please others. There is a vein of forthrightness and decisiveness in her nature. When asked why she persisted with Peking opera and never thought of quitting, despite the art’s decline, her answer was simple and clear: “I never considered other choices. My entire life, the only thing I know how to do is perform Peking opera. If I had to change my profession, I wouldn’t know where to turn.” Yet the Peking opera market has undeniably withered over the past few decades. Zhang Bai, a disciple of Zhang Huoding who studied under her for more than 10 years, told NewsChina that she has witnessed many performers quit and turn to other occupations in face of this decline. Fewer and fewer audience members have dragged down ticket prices, and now some performers only garner a mere 200 or 300 yuan (US$31-46) for one show. Even some popular stars only fill theaters to 30 percent capacity. Zhang Bai said that the reason she has stayed in the business is the power she sees in her teacher. To her, Zhang Huoding has a mysterious charm and power that calms and centers people. As long as she sees Zhang Huoding still on stage singing, her water sleeves billowing, Zhang Bai feels an unexplained strength that soothes her and encourages her to carry on.

Slow Start

Born in 1971, Zhang Huoding grew up in a family of traditional opera performers. Her father performed a regional form of opera called pingju, which is popular in Hebei Province. Zhang herself first

Culture

As the world flies by around her, taking Peking opera’s former popularity with it, Zhang stands still, sticking to the old ways of her predecessors.

learned Peking opera from her elder brother Zhang Huoqian. Her professional life got off to a rocky start. Starting from the age of 10, she applied three times to Tianjin Opera School, a regional Peking opera training academy, over a period of five years, but never received an acceptance letter. At age 15, after her father wrote a letter to the head of the academy explaining Zhang’s passion for the art, she was accepted as the school’s only self-funded student, responsible for covering the tuition fee on her own while other students’ had their fees subsidized by the government. Her luck changed in 1989, when she was invited to audition for a position in the Zhanyou Peking Opera Troupe. If she nabbed the spot, she would study under Li Wenmin, a renowned Peking opera master and teacher of the Cheng school. Li, today approaching 80 years old, said she still remembers the first time she saw the 18-yearold performer and heard her sing. A skinny, petite and unremarkable young woman – that was Li’s first impression of Zhang. “She looked quite asocial and seldom talked,” Li recalled. Despite her noticeably limited singing skills and lack of vocal power, the girl impressed the teacher with the simplicity and ingenuousness in her voice, her constrained facial expressions and her unworldly disposition. “There is a saying in the Peking opera world: ‘Showiness and gaudiness make for a poor performance,’” said Li. “But [Zhang] never acted like that.” Seeing Zhang’s potential, Li accepted her as a student. Zhang’s intense diligence stood out immediately. Li recalled that her quiet student was always eager to do extra exercises to sharpen her singing skills. Zhang was determined to keep up with Li Haiyan, then China’s most popular qingyi performer. Her industriousness made her famous within the troupe. Troupe members had a saying: “If there is only one person left in the practice room, without a doubt, it’s Zhang Huoding.” In 1993, Zhang became the last disciple of Zhao Rongzhen, who

was one of Cheng school founder Cheng Yanqiu’s greatest students. Two years later, Zhang transferred to the National Peking Opera Company, where she gradually became the most popular representative performer of the third generation of the Cheng school. In 2007, Zhang became the first Peking opera singer to perform solo at the Great Hall of the People, the seat of the National People’s Congress, China’s parliament. Zhang’s solo performance turned out to be exceedingly successful. Yet when reporters asked how she felt about her performance, Zhang answered frankly: “I really dislike the solo format. Opera performers not only need to sing but also to perform on stage, working together with the whole orchestra. Standing there and singing alone made me feel so awkward that I did not even know where to put my hands.”

Less is More

Zhang employs a less-is-more passivity in managing her career. People around her say she does not have enough ambition and lets opportunities slip by. But as Zhang told NewsChina, “there’s nothing I want to expand on, doing more would consume a lot of energy.” By 2008, Zhang had become a distinguished performer in Peking opera circles. She had legions of fans nationwide and performed more than 100 shows every year, touring through one city after another. At the time, Zhang was 37. At a prime age for an opera artist to pursue every opportunity for career development, Zhang chose to press the pause button. In her opinion, sometimes people need to take a step back and take a breather to better prepare for future challenges. For Zhang, academic life was a good choice. That same year, she accepted an offer for a professorship from Beijing’s National Academy of Chinese Theater Arts (NACTA), while still performing occasionally on the side. In 2010, pregnant with her first child, she bid the theater a formal farewell in Shanghai after performing one of the most-beloved roles in her repertoire, the snake spirit Bai Suzhen in Legend of the White Snake. After that, she kept off NEWSCHINA I June 2016

NEWSCHINA I June 2016

Photo by zhen hongge

the stage for four years. Her life became more simple and peaceful. She spent her time either at school or at home, dedicating most of her energy to teaching and being with her daughter. At first, Zhang was not accustomed to the classroom. The NACTA students were mostly young millennials born after 1990. She was disappointed to discover that today’s young people were generally not willing to put up with the strict discipline and sacrifice needed to be a good performer. Sometimes Zhang received text messages from students who got up late and decided to cut her class. Once, a student texted her: “Professor, I can’t attend class because something came up. Heh heh.” Zhang was very confused by the last part and asked her disciple Zhang Bai, “Why did she [laugh at] me if she cannot come to my class?” Another time, she noticed a student failing to execute a movement well in class. “Did you practice?” she asked. “I forgot,” the student replied unabashedly. Zhang was stunned. From her perspective, practicing is not something a performer can simply forget about. She seethed in silence for a while before stating solemnly, “I am very disappointed in you.” Zhang herself sticks to the old disciplines of the traditional Peking opera schools. In the past, all of the opera masters became greats by practicing physically strenuous exercises on a daily basis. For instance, teachers would pour a basin of water on the ground on freezing winter days to create a sheet of ice and force students to practice walking barefoot on it. If the performers could learn to stride gracefully on the ice, strolling on stage would look effortless. Even now, as a renowned opera star, Zhang keeps a strict, fixed practice routine. Three or four times a week, she arrives at the practice room at 9 AM on the dot to rehearse the basic movement of walking in circles around the stage – an action in Peking opera that symbolizes a long journey and a change of locale. Zhang practices one to two hundred circles each session, examining her movements and postures in front of the mirror during each rotation so she can perfect them. She also practices her singing weekly with the help of musician Zhao Yu, who accompanies her on the Chinese instrument jinghu. Her quiet routine has barely changed since she returned to the stage

Zhang Huoding

in 2014. The introverted artist seems to like holding onto the status quo and living in the past. She admitted quite frankly that she does not feel comfortable with the Internet, not to mention social media. She does not devote any spare time to other hobbies. Apart from Peking opera-related subjects, people find it difficult to locate any common conversational ground with her. As the world flies by around her, taking Peking opera’s former popularity with it, Zhang stands still, sticking to the old ways of her predecessors.

Visual REPORT

On a World Stage 1. A representative from Algeria poses a question to Montenegrin Foreign Minister Igor Luksic 2. A delegate listens to a candidate during the hearings 3. Luksic smiles after his informal dialog

NEWSCHINA I June 2016

For the first time in the United Nations’ 70year history, the process of selecting the organization’s secretary-general is being witnessed by the world he or she will ultimately represent. From April 12 to 14, informal dialogs with each of the nine candidates were held in New York and broadcast live online. The UN Security Council’s first straw poll that will narrow the field of contenders will take place in late July, and the winner will take office after Secretary-General Ban Ki-moon’s term ends on December 31. Traditionally, this decision has been made behind closed doors by the five permanent members of the Security Council: China, France, Russia, the UK and the US. They choose a nominee whom they then bring before the General Assembly for final approval. While this year’s process is more transparent, the five permanent members still hold veto power over the final decision. Based on the current lineup, it’s likely the UN’s ninth secretary-general will make history. The position has never been held by a woman nor someone from Eastern Europe, and this year four of the nine candidates are women and seven hail from Eastern European countries. The first candidate to occupy the spotlight on April 12 was Igor Luksic, Montenegro’s 39-yearold foreign minister and former prime minister. During his question-and-answer session, Luksic discussed pressing global issues such as violent extremist groups, sustainable development and the refugee crisis. Irina Bokova, the head of the UN cultural agency UNESCO and a Bulgarian politician, held her informal dialog later that day. The other seven candidates are Helen Clark, the administrator of the UN Development Program and former New Zealand prime minister; Natalia Gherman, former foreign minister of Moldova; Vesna Pusic, former foreign minister of Croatia; Antonio Guterres, former Portuguese prime minister and UN high commissioner for refugees; Srgjan Kerim, former foreign minister of Macedonia and president of the UN General Assembly; Danilo Turk, former president of Slovenia and UN assistant secretary-general for political affairs under Kofi Annan; and Vuk Jeremic, former foreign minister of Serbia and president of the UN General Assembly. There is no clear deadline for new candidates to apply for the position, and analysts are anticipating as many as 15 total candidates may throw their hats into the ring. NEWSCHINA I June 2016

Visual REPORT

1 3 1. Two staff members listen to a candidate's dialog

2. Two interpreters busily translate during the dialogs 3. Mogens Lykketoft, president of the UN General Assembly, says he looks forward to the selection of a highly independent and competent candidate as the next UN leader 4. Delegates take notes on their laptops during the presentations 5. UN events require many interpreters to perform real-time translations 6. UNESCO Director-General Irina Bokova from Bulgaria speaks in the UN Trusteeship Council Chamber 7. If Bokova (pictured) wins the appointment, she will be the first woman and first Eastern European to be UN Secretary-General

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OUTSIDEIN Perspectives from within China

Charming Kenting

In the damp Taiwanese winter, experience one of Asia’s best beach parties in the island’s still-tropical south By Francesca Triggs

ituated on the southern tip of Taiwan, Kenting is beloved by locals and tourists alike for its beautiful white sand beaches, warm climate and delicious seafood. After several rainy winter months in Taipei, it was with great ease that my friends persuaded me to join them on their trip down to this sun-kissed land of sweet tropical fruit for the annual “Spring Break on the Beach” music festival. It is worth pointing out that three festivals in Kenting take place over the same weekend. Unfortunately, our delayed realization of this crucial fact, coupled with the similarity of the three events’ names, was enough to throw some of our group off the scent. While the neighboring “Spring Scream” festival offers a mix of rock and reggae, “Spring Break on the Beach” attracts electronic music lovers with a variety of talented DJs, from world-class acts Danny Avila and TUJAMO, to the less well-known DJ Mon-

The Kenting seafront

ey Dick. Indeed, there was something for everyone, with Ladybeard’s death metal performance notably providing a particular treat for those who enjoy listening to lyrics screamed out by cross-dressing wrestlers. Every day from 3 PM, a multicultural crowd of sun-soaked youths spilled through the gates of the five-star Chateau Beach Resort where the festival was held, and onto the hotel’s private stretch of beach. There, volleyball tournaments and mango cocktails combined with the sounds from the main stage, the BPM gradually increasing as the afternoon progressed and truly taking off when the sun finally set.

Wild

At 6 PM the free beer began to flow and hilarity, naturally, ensued. As the strong, rhythmic bass cast a spell over the crowd, the otherwise naturally reserved nature of our Taiwanese friends was cast aside. The

Photo by CFP

Spring Break! foreigners, therefore, went off the deep end – understandably, as many had traveled from as far afield as France and Brazil. As dusk set in, garbage cans were overturned and used as dance platforms, new friends were made and language barriers broken through the universal language of workin’ it. The Bikini Dance Contest proved particularly popular with the crowd, as barely clothed men and women were given the chance to win prizes ranging from bottles of vodka to a night at the resort. At midnight the music stopped and, like moths to a flame, the beer-infused crowd stampeded towards the golden arches of the nearby 24-hour McDonald’s. Others opted for more local fare available at the excellent nearby night market, where the drunken orders of foreign tourists were met with looks of bemusement from the stallholders. Some people spent the night camping on the beach, having left organizing a hostel too late. For those who do not fancy the idea of wakNEWSCHINA I June 2016

GETTING THERE Driving takes about six hours from Taipei without stops and in clear traffic. Renting a car requires an international driver’s license. There are flights into Kaohsiung from Taipei as well as a number of locations around Asia. From Kaohsiung there are regular buses that go to Kenting and take about two hours. A high-speed rail ticket from Taipei to Kaohsiung is relatively expensive but much faster than the alternatives, with local trains taking about seven hours.

Photo by CFP

Travel Tip Make sure you agree on which festival you want to go to before everyone goes off to buy tickets. These, incidentally, are very reasonably priced, with early bird tickets starting at 700 New Taiwan dollars (US$22) for a single-day pass and 1000 New Taiwan dollars (US$31) for the full three-day pass.

Reveling festival-goers dance and drink

Taiwanese delicacies at Kenting’s night market

ing up with sand in strange places, with a bit of forward planning there are several hotels and hostels available within walking distance of the festival.

Explore

Train tickets are notoriously hard to buy for travel on this particular weekend. Not only are these festivals very popular, but they coincide with the annual Tomb-Sweeping holiday. Our group decided to rent a car for the trip, which had the extra benefit of giving us the freedom to explore the coast. For those relying on public transport to get around, beautiful Nanwan Beach offers a wide array of activities, whether you want to rent a jet ski or experience for yourself why Kenting is famous for its scuba diving. It also has many small hotels and guesthouses on its doorstep, as well as coffee shops and restaurants. In peak season, Nanwan gets very busy, which is why we favored the much quieter

NEWSCHINA I June 2016

Baishawan Beach, only accessible by road and consequently less crowded. For those willing to pay the 300 New Taiwan dollars (US$9) for a parasol and chairs (recommended if you want to avoid acquiring a deep shade of lobster red), there is cabana service of sorts, as you come under the attentive care of sun-beaten locals who, mouths scarlet from chewing betel nut, ride quad bikes up and down the beach delivering cold beer and food to visitors. Another favorite spot for our group was Houbihu Marina, boasting some of the freshest fish on sale in Taiwan. Walking through the fish market, customers can pick the fish they want and watch as it is deftly prepared before their eyes. While taking food away is an option, in order to fully enjoy the freshness of the fish it is recommended to eat it on the spot. Here, a mere 200 New Taiwan dollars (US$6) will bring to your table 40 pieces of fresh assorted sashimi, laid on a bed of ice.

This is a culinary experience not to be missed. After a wonderful three days in the sun, we were in no hurry to get back to Taipei. Having said this, after hours stuck in traffic our destination became more and more appealing. And here lies the main disadvantage of traveling on public holidays in Taiwan, as snail-paced conditions are an inevitability. Despite leaving at around 9 AM, we only made it back to Taipei by 7 PM, taking 10 hours for what should have been a six-hour trip. For those interested mainly in exploring the rugged beauty of Kenting, this particular weekend certainly brings with it the disadvantage of crowds and substantially higher accommodation prices. However, for music lovers who are looking for a new environment for their spring break adventures, Kenting and its idyllic coastline bring the guarantee of stunning surroundings infused with the charm of a laid-back, beach-bum culture.

Photo by CNS

GETTING AROUND Scooters are a popular option for navigating Kenting, though these also require an international drivers license. Taxis are thin on the ground, as is public transportation.

essay

Tricks of the Trade By Jozette Allan

Surely the mics we were wearing would pick up the sound of me singing complete gobbledegook?

Illustration by Liu Xiaochao

In China, anything and everything can happen. After only a few short months in the country, I had already been invited to perform on Liaoning provincial TV as part of the channel’s annual Chinese New Year gala, which, I was told, was in desperate need of more foreigners. On a recommendation from an acquaintance who worked at the station, I had secured my first 15 minutes of fame. Apparently foreigners are hard to come by in Liaoning, since two of the girls who were singing with me had been flown in from South Korea and Japan specifically for the show. On the day of the dress rehearsal, a taxi had been called to pick me up at 7 AM. As I boarded, still half asleep, I noticed the fare displayed on the meter was rather high, but took this to be a call-out fee. It was only later that I learned this was one of those “private” cabs, known as “black cabs” in government warnings, the drivers of which would collect any number of random passengers simultaneously, each one paying a flat fee to get to their destination. As I was his only fare, my driver, incensed at the loss of earnings, insisted on driving round the city in search of additional passengers, even shouting out of the window to people waiting at bus stops. Thwarted by his friendly sales pitch, he then decided to make his journey more worthwhile by making a detour to his local fish market to purchase an evening meal. Thus, after an utterly unsolicited tour of the city of Dalian, I arrived, horribly late, at the concert hall. As I prepared myself in the wings, I pored over the lyrics to the song I’d be singing, written out phonetically in Roman letters, willing the chorus to stick in my head. After a few moments, my South Korean counterpart noticed my desperate floundering over the lines. She reassured me with a startling revelation, promising that as long as “my mouth was making the correct shape,” nobody would know what I was singing. Confused, I opined that surely the mics we were wearing would

pick up the sound of me singing complete gobbledegook? Now it was her turn to look confused. “You know we are just lip syncing, right?” In three weeks of stressful preparation, nobody had told me my vocal talents would not be required for this musical number. Part of me was relieved at the sudden release of pressure, yet another was bitterly disappointed that I was not going to be performing. I had already told my Chinese host family and my friends to tune in to watch me sing. I felt like a fraud. The dress rehearsal which followed, naturally, went smoothly – as one might expect when what might have gone wrong had been taken care of before we arrived that morning. Unless there was a total loss of

power during our performance, we’d bring the house down on the night. The following day – on the threshold of my big moment – I eschewed the private cab; once bitten, twice shy. I arrived on time and positively glowing with confidence. However, an unexpected snag reared up before me – my clothing size. Chinese couturiers are not known for catering to Western proportions. Thus, I found myself being squeezed into a rented, gilt, Disney Princess gown. My bodice was so tight I resolved to eat next to nothing at lunch, for fear I’d burst my seams midtake. By the end of yet another packed day of rehearsals, caked in makeup and squinting from the camera flashes at the obligatory photoshoot, we filed onto stage for our big, show-stopping number. As the red curtains parted, I had to catch my breath before appreciating the grand scale of the spectacle. The stage before me was pulsing with twirls of color, as countless, lavishly dressed dancers cavorted under the studio lights. Flashes of red and gold – the colors of Chinese New Year – shimmered with each choreographed movement. A rising crescendo of percussion filled the auditorium and I was given my cue. Despite my disappointment that my dulcet tones were denied to millions of eager viewers, I couldn’t have been more entertained or bowled over by the immenseness of the undertaking I’d gotten involved in. It has to be said that Chinese TV stations really know how to turn it out, and, with limited talent available, a lip sync was certainly a guarantee against having the most important show of the year ruined by the unrefined braying of an untrained chorus line. What I found harder to explain was why the solo performances by the professional Chinese singers in the lineup were also prerecorded. I guess in a country with such a huge population, the need for perfection in presentation outweighs any artistic quibbles over turning to smoke and mirrors rather than taking a chance on the talent. NEWSCHINA I June 2016

Don’t Fence Me In By Lilja Saeboe

NEWSCHINA I June 2016

If nature is a right in Norway, it is an industry in China

Illustration by Liu Xiaochao

China is home to many natural wonders. From high mountaintops sprinkled with snow, to lakes so blue that no painter could render them in oils and expect to have their work praised as realistic. The country boasts lush forests and jungles where the trees are so tall that they can compete with the skyscrapers of the encroaching urban jungles. When I got the opportunity to travel China’s byways, the scenery was what I was looking forward to the most. And the little I have been able to see has indeed been breathtaking. But besides wonder, my encounter with the great Chinese outdoors has also filled me with less salubrious emotions – indignation and frustration. First, let me explain a bit about my background. I come from a country that is also quite proud of its natural beauty. Norway’s fjords and mountains are widely known, and we Norwegians are uncommonly fond of hiking, skiing and generally spending time outside. We are in fact so fond of being outdoors, that nature – in the eyes of both the people and the law – is invested with something close to human rights, and we don’t appreciate anyone trying to fence in our wide open spaces. Nature for Norwegians is all about freedom, adventure, and – and this is important – quiet. With a total population that in Chinese eyes would be considered a poor showing for a medium-sized city, once you leave the populated areas of my homeland you are pretty much alone. Out in nature there are no paths besides those formed by generations of adventuring feet, and nothing but your common sense to keep you from falling off a cliff. Sometimes people mark trees to indicate a good route up a mountain, but these markings are mere suggestions. If you would like to climb right up a sheer rock face, or cross a river where it is at its most turbulent rather than using the partially submerged log bridge half a mile downstream, you are more than welcome to. If nature is a right in Norway, it is an in-

dustry in China. This realization crystallized for me at Huashan, a mountain near Xi’an. Upon first hearing that we would have to pay money to enter the park – and not just a token sum, but US$30, a week’s wages in some parts of the country – I was outraged. The evening before our trek I was all indignant bluster, wondering aloud where my cash would go and angrily repeating: “They didn’t build the mountain!” Upon reaching Huashan, however, I soon realized where my money was going. I didn’t for one moment feel like I had left civilization. Paved paths with handrails to hold onto while climbing and garbage cans disguised as tree stumps demarcated the route to the summit. Every 20 minutes or so you could be sure to come across a snack kiosk,

and a public toilet almost as frequently. The peace and quiet of a Norwegian forest seemed a laughable fantasy as we trudged in a line of gabbling tourists most of the way. Every now and then we would come across a temple, making me realize that mountain hiking in China is viewed as just as much a cultural experience as it is a natural one. The feeling of accomplishment when reaching the top was also slightly dulled by the fact that people who didn’t want to walk could easily reach the top by ropeway. In Emeishan, close to Chengdu, you can even hire a sedan chair, like a modern-day imperial memsahib. China’s local governments seem to revel in fencing off nature. Whether with ticket booths, wire mesh or sternly worded road signs complete with surreal English translations, everything more than 10 paces from the designated path, it seems, holds a wealth of death traps and must be avoided. Wherever I go in China people keep telling me that the mountains can be dangerous, but after being carefully shepherded up fully paved roads to a walled-in summit, I couldn’t imagine a safer place to be. There is no chance of getting lost, no need to scramble over deadfalls or jump across streams. Anywhere there might be the smallest chance of hurting yourself, you may be sure to find a fence and a sign telling you to stay well clear. Despite all this, I have to say that it makes me happy to see how people of all ages and shapes are out enjoying the mountains and nature of China. Although I, a Norwegian, might frown a bit at the mollycoddling of humanity and the enclosure and taming of what should be wilderness, it is also nice that the beauty of China has been made accessible to those without the fitness level or hiking experience to attempt a more serious adventure. Despite the fences, China’s landscape remains beautiful, so beautiful that even a Norwegian might be able to overlook certain infringements upon her right to roam.

flavor of the month

Bamboozled

ll over the world, bamboo is thought of as panda food. I visited the giant panda breeding research base in Chengdu, Sichuan, and watched its residents chomp through mounds of the stuff. Arriving just in time for breakfast, myself and a handful of tourists followed the meals-on-wheels truck as it chugged around the park, piled high with bamboo stalks adorned with tasty-looking, bright green leaves. Pandas take eating seriously: gathering the leaves into thick bunches, discerningly discarding any unworthy specimens and only chowing down when their meal is just so. Just hearing them crunch through stalk after stalk made me quite peckish. Thankfully, pandas aren’t the only ones who can enjoy the taste of bamboo. Throughout China’s history, bamboo has been used to make just about everything, from paper to houses to weapons. But from excavation at the country’s earliest Neolithic times, archeologists have concluded that, before it became a catch-all manufacturing material, bamboo was a source of food, with the inedible leftovers (fashioned into chopsticks) used to eat it. Today, the shoots of baby bamboo plants are a popular ingredient in China. These succulent beauties are seasonal, growing during the winter and spring, but the spring shoots, chunsun, are the fattest and juiciest. The edible part of the shoot is protected by layers of tough sheathing leaves, and even the consumable parts of the plant must be boiled to remove a bitter toxin – hydrocyanic acid. Once fully prepared, however, bamboo shoots are a rich source of protein, calcium and iron, and are subsequently dubbed by fans as caiwang, the “king

Photo by CNS

By Olivia Contini

of vegetables.” Whether sautéed, steamed, fried or boiled then left to cool and served salad-style, bamboo shoots prepared right will retain their unique earthy sweetness and crisp crunch. While ubiquitous in all regional cuisines, it is in Zhejiang Province where some of the tastiest bamboo shoot dishes can be found. One Chinese New Year delicacy is bamboo shoots steamed beneath a soy marinated duck, the idea being for the vegetables to soak up the delicious drippings. Somehow, even cooked like this, the shoots still taste fresh and light. Chinese vegetarians in particular prize bamboo shoots for their versatility, matching beautifully with almost any other vegetable to “beef up” meatless dishes. A Hangzhou favorite, “two winter stir-fry,” pairs tender winter shoots, dongsun, with winter shiitake mushrooms, donggu. It’s a heavenly match! If that doesn’t do it for you, when the shoots are boiled with sheets of pressed tofu and salty Chinese bacon, the umami-sweet result very much will. Su Shi, an artist from the Song Dynasty (960-1279 AD), was a firm believer in the otherworldly powers of bamboo. He was sure that China could not live without the stuff, and thanked the world’s largest variety of grass for inspiring his poetry. It was also during this time that crisp and fresh bamboo shoots became an essential ingredient in the Chinese diet, as they remain today. Who’d have thought this lush plant would be the thing that brought China’s people and their favorite species of bear together?

real chinese

xǐ

xi’nao brainwash

As China witnesses ballooning unemployment rates among recent college graduates, many young people have been drawn into pyramid schemes, the organizers of which earn their trust through xi’nao, a literal translation of the English word “brainwashing.” Pyramid schemes are well established in China, and the masterminds behind them are masters of xi’nao techniques. “Leaders” at the top of the pyramid manipulate their subordinates into thinking their chosen product is of high quality and effective, before convincing them they can make their fortune by selling it. Given that new entrants to pyramid schemes are often illegally held by the company along with their fellow salespeople, they are often subjected to

daily brainwashing until they fully embrace the company’s ethos. Brainwashing techniques used by such companies are highly sophisticated. Many former pyramid salespeople have recalled being led into locked rooms where gentle music is being played, while a company representative relentlessly repeats how good the product in question is. Without others present, victims are easily disarmed and their common sense undermined. According to some psychologists, xi’nao works on a subliminal level by leveraging the power of suggestion – people often equate what they hear or see with fact, especially when information comes from people

nǎo

they do not know personally. Younger people with less social experience, or people with learning difficulties, often become targets. Phony “living Buddhas,” for example, prey on the combination of reverence for and popular ignorance of Buddhism on the Chinese mainland, with countless victims handing over large sums of money in the hope of good fortune. Thanks to the rapid development of the Internet, young people now have broader resources at their fingertips that they can use to sniff out brainwashing scams. Among netizens, xi’nao is gradually losing its pejorative meaning. Many netizens like to use the term to joke about their own passions, as in the phrase: “That movie left me xi’naoed.” NEWSCHINA I June 2016

NEWSCHINA I June 2016