May 2015 Issue

POLITICS

Court in a Trap: Defense Lawyers Fight Back

CULTURE

Steppe Up: Mongolian Rockers Hanggai

behind the curtain Which way will China’s government head in 2015?

Our essential guide to the Two Sessions

$4.99 www.newschinamag.com

Friendly Fire: China's Myanmar Dilemma

Volume No. 081 May 2015

INTERNATIONAL

EDITORIAL

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

CN11-5826/G2

NEWSCHINA I May 2015

China needs to tackle the problem of ‘land finance’ to foster innovation

I

n delivering the government’s work report to and regulated through legislation. Innovation is enthe annual conference of the National People’s couraged as the potential rewards can be far greater Congress, Premier Li Keqiang cited the im- than the possible proceeds from engaging in real portance of innovation in the conestate speculation. China’s own text of an economic slowdown, a experience also tells us that innoConcerns over the theme that the government has vation contributes more to ecodebt problem of consistently highlighted for more nomic growth in localities where local governments than 20 years. Unfortunately, althe government relies less on prothough investment in research ceeds from land appropriation and and its impact and development has been steadily speculation. For example, in Shenon GDP growth increasing, the contribution made zhen, widely considered China’s rates appear to by innovation to China’s econommost innovative city, land sales achave forestalled ic growth has remained limited. count for 27 percent of municipal relevant land A major obstacle for China’s inrevenue, far less than in other large novation strategy is the existence cities, such as Guangzhou, Shangreforms of so-called “land finance,” where hai, and Beijing, where land sales the government, corporations, account for 73, 40 and 48 percent and individuals aspire to obtain respectively. wealth from the land market, This problem has long been acrather than from investment in innovation and knowledged and highlighted by both experts and creativity. In past years, China’s economic reform officials. Unfortunately, concerns over the debt program has allowed local governments to ma- problem of local governments and its impact on nipulate land reforms to obtain excessive profits, GDP growth rates appear to have forestalled rela byproduct of which has been soaring housing evant land reforms. prices and the undermining of efforts to encourage The Chinese leadership must realize that, facing innovation. As local governments rely on proceeds major demographic shifts and a persistent economfrom land sales for much of their revenue, and the ic slowdown, its window of opportunity to achieve real estate industry has produced many of China’s deeply desired innovation-oriented economic rerichest entrepreneurs, it effectively fosters a social structuring is steadily closing. To transform China’s and corporate culture that worships land hoarding economic structure, the leadership must take more and discourages innovation. decisive action to bring an end to “land finance,” It is no coincidence that in innovation-driven and to create a social and economic environment economies such as the US, the profit margins of in which innovation is truly encouraged, cherished the real estate industry are effectively controlled and, crucially, rewarded.

1

Contents

watching, waiting

P16

Editorial

01 China needs to tackle the problem of ‘land finance’ to foster innovation

politics

10

13

Criminal Lawyers: In Their Defense Family Planning Policy: Call to Cancel

Cover Story

society

28

32

Under the Dome: Breaking the Silence International Education : Egalitarian Elitism?

P64

16 Two Sessions:

The Will of the Party/Graft, Front and Center/Start Your Engines

2

P28 NEWSCHINA I May 2015

Photo by CFP

China’s legislature faces a complex range of challenges, and tackling them will test the government like never before. NewsChina offers expert analysis of this year’sTwo Sessions to provide an in-depth look at the country’s trajectory in 2015

Contents

P40

P13 special report

36 AIIB:

A Genuine Game-changer/We Must Open

Our Minds to a China-led Bank

57 Hualing Nieh Engle:

Crossing Continents

visual REPORT

OUTSIDE IN

P36 P60

60 Fish Fighters

international

40

44

46

Prince William: A Royal Mail Myanmar Conflict: A Diplomatic Dilemma Indian Ocean: Adventure Capital

64 Spellbinding Yunnan: Leap with the Tiger Commentary

72 The New Silk Roads will bypass the Middle East,

and for good reason

economy

50

52

Virtual Red Envelopes: Pushing the Envelope Wu Xinhong: Me, My Selfie, and I

culture

54 Mongolian Folk Rock:

Almost Famous

NEWSCHINA I May 2015

04 MEDIA FOCUS 05 What They Say 06 NEWS BRIEF 08 Netizen Watch 53 China by numbers 66 real chinese 67 Flavor of the Month 68 ESSAY 70 CULTURAL LISTINGS

3

NewsChina, Chinese Edition

Caijing

March 23, 2015

March 2, 2015

A Close Eye On Reform

Call to Change

This March, the Chinese edition of NewsChina rolled out its 700th issue since its inception in early 2000. Over the past 15 years, this magazine has striven to record China’s transformations while promoting the country’s ongoing reform, presenting a genuine portrait of China to its readers. Looking back over the years, the weekly magazine has asked many questions that have yet to be answered. For its 700th issue, NewsChina chose 15 topics from over the years, comparing them with current situations to see how China has dealt with its problems. These topics included healthcare reform, corruption, the rural-urban divide and education inequality, most of them chronic obstacles standing in the way of the country’s drive to modernization. While some of the problems have since been solved, new ones sprouted from the old. For the most part, China is still looking for answers.

Xinmin Weekly March 14, 2015

Doubtful English Skills An English proficiency index released by language training company EF Education in 2014 has generated a public outcry in China. The report, based on a survey of 750,000 people in 63 countries, ranked China 37th in the world in terms of English proficiency, close to the bottom of the list. Nevertheless, according to the report, English proficiency in big cities like Shanghai and Beijing has surpassed that in Hong Kong, a former British colony. The Chinese spend a large amount of time studying the global lingua franca, but various examinations and enrollment barriers have left a growing number of people struggling.

Since most Chinese abandon the language after achieving their academic goals, English proficiency in the country tends to drop off at age of 24, compared to the average age of over 40 in the rest of Asia.

4

In China today, pharmaceuticals have become the biggest money-spinner for hospitals, accounting for 45 percent of revenue, three times higher than the global average. In 2013, the prescription medicine market in China hit 952 billion yuan (US$153bn) and hospitals accounted for 94 percent of the sales volume, leaving drugstores struggling to survive – the number of drugstores dropped from 274,000 to 190,000 in 2014. Conversely, the market for online drugstores last year hit 6.8 billion yuan (US$1.1bn), a rise of 4.2 billion (US$676m) year-on-year. In 2014, China’s Internet tycoons were squaring off to take a share in the health care market – Tencent unveiled its online hospital registration system on WeChat, and Alibaba made public its online medical payment system through Alipay. What’s more, a growing number of start-ups focusing on e-commerce in healthcare entered the market by offering increasingly customized services. However, it may be some time before China finds out whether ecommerce can fuel health care reform in China.

China Economic Weekly March 9, 2015

Double Economic Engines Chinese Premier Li Keqiang highlighted in his government work report in March that emerging and traditional industries are the two engines that will drive China’s continued economic growth. Li emphasized that China must abandon its traditional concept of development, deepen structural adjustment and promote innovation and encourage start-ups to provide social services, ensuring that the economy maintains medium-tohigh speed growth and achieves a medium-to-high level of development. Li’s report argued that in order to achieve this goal, the primary task is the proper handling of relations between the government and the market by streamlining governance and delegating power, striving for a clearly delineated role for the government. An efficient, clean, and innovative government, ruled by law, is needed to boost healthy and sustainable economic growth.

Southern Metropolis Weekly March 16, 2015

Drones Ready to Launch In February 2015, Chinese rock star Wang Feng successfully proposed to actress Zhang Ziyi by delivering her a ring sent by a drone made by Shenzhen-based DJI, a Chinese enterprise making commercial and recreational unmanned aerial vehicles (UAVs). The company began as a research group several years ago, and has grown to a company with 2,800 employees whose sales volume increased 79-fold from 2011 to 2013. The low technical barriers and huge market potential have boosted R&D of UAVs in China. Challenges in China abound as parts and accessories are often made by workers with only temporary training, despite the supply chain’s government backing in Shenzhen. Perhaps the biggest obstacle is tight airspace regulation, enforcement of which remains a gray area.

NEWSCHINA I May 2015

“If we dare to“fight tigers,”how is it that we balk at confronting taxi monopolies?”

“If we fully banned FIT [frequent individual travelers, typically from the Chinese mainland], I believe Hong Kong’s stock index would have fallen by at least 1,000 points.

Hong Kong has been the prime beneficiary of the mainland’s support.”

Hong Kong’s richest man Li Ka-shing on the territory’s controls on mainland visitor numbers.

“The anti-corruption campaign has hit the profit margins of some interest groups, so they’re claiming it has impacted healthy economic development. The rest of us would never [make such a claim].”

Playwright Liu Heping speaking in an interview with the Communist Party’s main anti-corruption agency, refuting claims that the anti-corruption drive has negatively impacted China’s economy.

“A movie adapted from a TV show could earn millions of dollars in exchange for merely five or ten days of shooting. If investors can make such a quick buck, why bother to spend months making a fine movie?”

Director Feng Xiaogang criticizing the current trend for cheap movie adaptations of popular TV shows.

“What has impressed me most about the Two Sessions is that many ministers have held press conferences to answer public questions. Why not make such face-to-face interviews more frequent, especially when any important policy is introduced?”

Wang Xuming, director of the China Language and Culture Press, appealing for greater government transparency.

NEWSCHINA I May 2015

Illustration by Wu Shangwen

Tsinghua University political economics professor Cai Jiming making a public appeal for reform of the country’s government-administered taxi market.

“I don’t support purges of educators, as some have called for online. This would be a return to the antirightist campaigns of the late 1950s, or the Cultural Revolution.”

President of Nankai University Gong Ke opposing leftist attacks on educators accused of “blackening China.”

“Lacking the ability for critical thought, many students blindly follow their teachers, producing identical papers.

I suggest that graduates question every issue, and launch their careers through creativity.”

CPPCC (Chinese People’s Political Consultative Conference) member Tang Xiaoqing speaking out against China’s rigid educational environment.

“Despite being a developing country, China has issued too many diplomas; a blind worship of meaningless titles which I believe is a waste of resources and time.

Most Chinese arts degrees, in my eyes, aren’t worth the paper they’re printed on.”

Economics analyst Zhang Huaqiao causing controversy by calling out Chinese colleges on their low graduate employment rates.

“Many problems are put to the Two Sessions every year.

It does not mean that the delegates fail to keep up with the times, but indicates that those problems have neither been solved nor have they changed.”

Journalist Wei Yingjie suggesting shifting the focus of the Two Sessions from “proposing problems” to “solving problems.”

5

Top Story

China Hopes to Score with Soccer Reform

The Chinese government recently issued a highly anticipated roadmap for systemic reform of the country’s soccer system, aiming to help the Chinese national team qualify for the World Cup and the Olympic Games by streamlining management, improving the country’s professional leagues and promoting the sport among young people.

The biggest highlight of the reform scheme is the separation of the China Football Association (CFA) from full government administration, the root cause of management problems, according to analysts. According to the scheme, the new-look association will consist of representatives from relevant government departments, renowned experts and other non-governmental personnel in related fields.

In order to prevent potential corruption and avoid insular-

ity, the scheme also forbids anyone holding a title within the CFA to work simultaneously with any professional league or club.

Another eye-catching measure was reform of soccer education. The Ministry of Education has announced it will make soccer class mandatory at 6,000 schools nationwide, and gradually promote the country’s professional leagues in elementary, middle and high schools. By 2025, China, according to the scheme, will be home to around 50,000 “soccer schools,” with over 50 million students.

Reportedly in the making for four years, this State-level reform package has received the backing of soccer fan and President Xi Jinping, and has been hailed as key to the revival of Chinese soccer. The public is keen to see whether or not this will be the case.

Three Objectives:

Short-term: streamline management Medium-term: greatly increase the number of young players,

promote professional leagues, push national women’s team to become world champions, and men’s team into the top few in Asia Long-term: win bid to host the World Cup, push the men’s team to qualify for the World Cup and Olympic Games

Features of Reform: De-administration of CFA Fast development of professional leagues and clubs More investment in soccer venues and facilities More investment in soccer education More encouragement of private investment in the soccer industry Improve image of the national team

Business

Merger of CSR and CNR The State-owned Assets Supervision and Administration Commission, China’s State-owned enterprise (SOE) regulator, has recently approved a plan to merge CSR and CNR, the country’s two biggest railway companies, both headquartered in Beijing.

According to the draft of the merger, the new company will be named CRRC Corporation Limited (CRRC), with net assets of nearly 100 billion yuan (US$16bn).

6

Given the similar products, services and target market of the two companies, the major reasons behind the merger are believed to be minimization of redundant construction and reduction of competition, especially in overseas business. Some analysts, however, have cast doubt upon the deal, saying that the competition will not ease until the newly merged company gains control of sales from the two companies’ branches nationwide.

Since the two companies are both major providers of China’s railway and subway services, many are worried that the merger will lead to a monopoly.

Analysts have pointed out that the merger will not be fully settled until it passes all necessary anti-monopoly examinations both at home and abroad.

NEWSCHINA I May 2015

Economy

More “Tigers” Caged

Balancing Act

Qiu He, deputy Party secretary of Yunnan Province, was detained for “severe violations of Party discipline” on March 15.

Having worked as an official for around 30 years, Qiu gained nationwide notoriety while serving as mayor of Suqian, Jiangsu Province, in 1996, where he pushed through tough reforms in urbanization and the privatization of State-owned enterprises. While some praised Qiu for giving the city a brand new image, others criticized him for being autocratic and placing himself above the law.

No official source has so far confirmed any details of the charges against Qiu, but insiders have speculated that he may have been involved in corruption relating to construction projects. Five days later, Xu Gang, deputy governor of Fujian Province, came under investigation for allegedly similar reasons.

The fall of these two big “tigers” has indicated that China’s far-reaching corruption crackdown is continuing, with a focus on political cliques. In its 2015 work report, China’s Supreme People’s Court for the first time criticized Bo Xilai, the disgraced former Party secretary of Chongqing, and Zhou Yongkang, a former Politburo member, for “organizing illegal political activities through cliques.”

Chairman of the China Britain Business Council (CBBC) Lord Sassoon has given an upbeat assessment of UK business prospects in China even though China’s growth is expected to slow.

Speaking at the CBBC’s third Annual China Business Conference in London in March, Sassoon suggested that British companies should look beyond the forecast easing of China’s economic trajectory – the “new normal.” This alludes to a revised official 2015 growth target of 7 percent for China - lower than before on paper, but according to Forbes magazine, actually less than some estimates of current growth.

Whatever the short term wobbles, there is a body of evidence to suggest Sassoon’s advice is sound.

For instance, a survey of over 2,000 Chinese firms by the Centre on Finance and Economic Growth at the Cheung Kong Graduate School of Business found further grounds for optimism due to improving operating conditions, reduced overcapacity and flattening costs.

In his foreword to the CBBC event, UK Chancellor of Exchequer George Osborne pointed out the underlying strength of the economic ties between the two countries: “‘Last year China invested over £3 billion in the UK, became our 6th largest export market, and our trade doubled since 2010, gains which have been made through investing in our relationship with China.” Osborne then proceeded to double UK spending on trade promotion to China in his UK Government Budget the week after the conference.

Qiu He

Xu Gang

Diplomacy

Chinese Minister Visits Japan China’s civil affairs minister Li Liguo paid an official visit to Japan in mid-March, indicating a warming in Sino-Japanese relations.

Li attended the World Conference on Disaster Reduction held in Sendai, and exchanged ideas on disaster prevention and rescue with Japanese foreign minister Fumio Kishida and disaster management minister Eriko Yamatani.

The trip marked China’s first ministerial-level visit

2013 71,798

2012 81,784

2011 87,016

Number of New Chinese Green Card Holders

NEWSCHINA I May 2015

to Japan in three years, the last of which was by former cultural minister Cai Wu in 2012.

Li’s visit is believed to be the result of talks between China and Japan in November 2014, a focus of which was to “restart bilateral talks.” Media said that the two sides plan to resume dialog between China’s National People’s Congress and the Japanese Diet, which have remained suspended for three years due to tense relations.

Survey

Chinese Emigration to US Drops The Chinese Academy of Social Sciences, the government’s leading think tank, issued its annual report on Chinese emigration on March 19, indicating that the number of Chinese people emigrating to the US has decreased for two consecutive years.

According to the report, a total of 71,798 Chinese mainlanders received a US green card in 2013, a 17.5 percent fall from the 2011 figure of 87,016.

The report also cited data from the US Department of Treasury that nearly 3,000 people gave up US citizenship or returned their green card in 2013 – 221 percent more than in 2012 – nearly 6 percent of them Chinese.

Analysts have partly attributed the trend to a new reciprocal agreement concluded between the US and China during the 2014 APEC conferences in which the both countries pledged to issue multiple entry visas to citizens of the other, with a maximum validity of 10 years. This March, China and Canada announced a similar reciprocal scheme.

Photos by IC

Politics

7

Saddening

Poll the People

On March 19, 2015, a huge rock broke off its base at a scenic spot in Guilin, Guangxi, and plunged down a mountain, killing seven tourists waiting in line for a boat and injuring another 19. The local government has attributed the tragedy to a natural landslide, though nearby construction work on a public bathroom was blamed by some netizens.

State broadcaster CCTV recently ran reports claiming that Jinluo, a leading Chinese pork processing company, had used diseased pigs to manufacture sausage products, criticizing the relevant supervision departments for granting quality certificates without requiring an inspection. What do you think?

79.4% This has tarnished the industry.

Where are the supervision departments?

Provoking

Three delegates to the local people’s congress of Qingdao, Shandong Province, were found to have illegally kept 11 endangered Manchurian tigers as pets. The crime was only discovered after one of the tigers fell to its death from the top of a commercial building managed by one of the delegates. The tigers had reportedly been “loaned” to the men by a park in the nearby city of Pingdu, which claimed to no longer be able to support their upkeep. Following widespread public criticism, the three delegates have all resigned, while the director of the local forestry department has been removed from his post.

17.7% I don’t care, because I believe all [Chinese] sausages have similar problems.

2.9% It is an isolated case.

Source: www.sina.com.cn

Most Circulated Post Retweeted 46,407 times by March 19

Embarrassing

Amazing

A picture of a group of mainland visitors in Hong Kong International Airport wearing banners bearing the slogan “Hong Kong, we are not here to shop” has sparked controversy on both sides of the harbor. Offended by frequent protests by Hong Kong citizens who claim that “parallel traders” from the mainland are emptying stores and driving up prices in the territory, dozens of mainlanders have voiced support for a boycott of the coastal city’s shopping facilities.

A Hunan-headquartered construction company under China Grand Enterprises astonished netizens worldwide by finishing a 57-story building within 19 days. After viewing time-lapse footage of construction uploaded to the Internet by the company, comments were divided between astonishment at this example of “real-world Legos” and speculation that the building would later prove to be structurally unsound.

8

A post revealing that a blind man was not permitted to take a train with his seeing-eye dog has led to such a widespread online campaign that the Ministry of Railways has been forced to pledge a revision of existing regulations governing animals on public transportation. The campaign has also led to increased awareness of the needs of China’s blind and partially-sighted population.

“Seeing-eye dogs are well trained and do not represent a threat to passengers. They are the only eyes the blind have. Would you mind sharing space with them? If not, please re-tweet!”

NEWSCHINA I May 2015

WHO’S

Top Five Search Queries On

HOT? WHO’S NOT?

over the week ending March 18 Win10 455,508

Microsoft announced in early March that it will launch its Windows 10 platform this summer, with the Chinese version coming preinstalled on new devices along with software developed by Tencent and Qihoo360, China’s two leading Internet service providers.

Fight for the Country 292,508

A survey by global research company Gallup International indicated that around 71 percent of Chinese respondents were willing to fight for their country, while the rate of 11 percent recorded in Japan was of particular interest in China.

Principled Principal Where is Putin? 287,580

Chanel Sales 281,547

Long queues were photographed outside the iconic French label’s Chinese flagship stores after it began offering a 20 percent discount on its merchandise to narrow the price gap between France and the Chinese mainland.

The March 15 Party 223,936

On March 15, China’s Consumers’ Day, CCTV ran its traditional “party-style” exposé of companies it claimed were using false advertising or otherwise cheating consumers.

Top Blogger Profile Huang Xiaoyang Followers: 41,389 Huang Xiaoyang, a well-known Chinese political writer, recently launched a new book about espionage, only to find his decision questioned by people who wanted to know why he was suddenly “dodging” the subject of Chinese officials. According to media reports, Huang’s bestseller The No. 2 Boss, the story of a provincial Party secretary using various forms of subterfuge to unseat a corrupt mayor, has sold over one million copies and become a “textbook on Chinese officialdom.” Huang, however, argues that the work is “historical fiction,” claiming to have no personal friends who are government officials. “I have never believed in ‘tricks and plots’ as a dominant trend in official circles,” he told media. On his microblog, he attributed the fall of Bo Xilai, former Party secretary of Chongqing municipality, and Qiu He, former deputy Party secretary of Yunnan Province, to their disregard for fundamental Confucian principles.

NEWSCHINA I May 2015

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

After not appearing in public for 10 days, speculation raged across the world over the whereabouts of Russian President Vladimir Putin, with theories ranging from a coup in the Kremlin to an illicit tryst.

Hundreds of netizens mourned Mo Zhengao, a middle school principal in Du’an County, Guangxi, who passed away from illness on March 9. During Mo’s 30-plus year career, he devoted himself to financing for underprivileged students

Foolish Felon Due to traffic congestion during the evening rush hour, Moikit Leng, a 38-year-old Malaysian national, was caught less than half an hour after having stolen 11 watches valued at around 3 million yuan (US$476,000) from Beijing’s Wangfujing shopping street. Leng’s hijacked getaway taxi only made it two kilometers from the scene of the crime.

Martyr Cop Mao Shengquan, a traffic policeman in Shanghai, was dragged to his death by a BMW after he tried to stop the driver for a traffic violation. Media said that Mao was only 32 years old and left behind a pregnant wife.

Corked Cadre A village-level Party secretary in Huoqiu County, Anhui Province, died of alcohol poisoning after attending a dinner party with his superiors. Media reports said that the deceased official had imbibed several liters of the distilled grain spirit baijiu.

9

politics

Criminal Lawyers

In Their Defense China’s latest round of judicial reforms aims to shield criminal defense lawyers from stress, risk and discrimination, but experts say it will be years before any impact is felt

10

Photo by IC

By Fu Yao

NEWSCHINA I May 2015

I

n the Supreme People’s Court’s new proposal to deepen judicial reforms, released in late February 2015, the word “lawyer” was one of the most frequently used – for many, this was a sign that the document’s main intention was to safeguard lawyers’ rights.

At the end of 2014, the Supreme People’s Procuratorate also issued a regulation on safeguarding lawyers’ rights, stating in no uncertain terms that lawyers must be guaranteed their lawful rights to meet with criminal suspects and defendants, access case files, and apply to collect evidence. The regulation marked the third time that China’s top procuratorate had introduced rules to protect lawyers’ rights, having previously done so in 2004 and 2006.

Zhou Ze, a criminal defense lawyer, told NewsChina that this proved that lawyers’ rights are a sore spot. “Otherwise, why would the matter need to be emphasized over and over?”

Another criminal defense lawyer, Zhang Yansheng, agreed with Zhou. Zhang was the lawyer defending Nian Bin, a convict released from prison in 2014 after being cleared of a murder charge. Nian had been found guilty on two counts of murder in 2006 in Pingtan, Fujian Province, after two of his neighbors died of poisoning.

Zhang, together with six other lawyers, walked out of court to protest illegal judicial procedures during a trial in Huizhou, Guangdong Province in January 2015.

Zhang Jianwei, a law professor at Tsinghua University, said China’s judicial organs and criminal defense lawyers are piling pressure on each other, creating a tense situation which may “backfire and trap them in a vicious circle.”

Chilling Effect

In March 2014, the government-affiliated Beijing Lawyers Association (BLA) issued a guideline banning lawyers and law firms from disclosing litigation documents and client statements in any way, or leaking case information to unauthorized personnel before a court judgment takes effect.

Separately, the All China Lawyers Associa-

NEWSCHINA I May 2015

tion (ACLA) attempted to revise the provisional Rules for Punishment of Members’ Misconduct, and the Rules of Professional Conduct for Lawyers. Currently, punishable offenses include failing to show respect to a judge, public prosecutor, arbitrator or any other court personnel; refusing to speak in defense of the defendant or on behalf of the litigant in a court trial; and leaving court without permission.

In October 2014, a draft amendment to the country’s Criminal Law was submitted to the Standing Committee of the National People’s Congress for review, including a modification to Article 35 intended to incriminate those who “insult, slander or threaten” judicial workers and participants in a lawsuit.

However, of greatest concern to lawyers was an ACLA plan to set up a “disciplinary work guiding committee” to supervise local lawyers’ associations, made up of members of the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, the Ministry of Justice and a number of academics.

A lawyer who spoke on condition of anonymity told NewsChina that since lawyers are by nature in opposition to police and procuratorial authorities in court, the disciplinary work guidance committee would enable authorities to impose restrictions on lawyers outside of court, likely leading to improper intervention in the ability of lawyers to defend their clients.

Professor Zhang Jianwei said that given that Chinese lawyers’ defense rights were not fully protected, new restrictions would inevitably stir resentment.

Lawyer Zhou Ze said that one aim of the BLA’s new guideline was to target lawyers who, facing an unfair playing field in court, resort to extrajudicial measures. “Sometimes lawyers turn to public opinion for help,” he told NewsChina. “By making their voices heard online, they can expose and criticize illegal behavior in the courtroom.”

Amid strong protests, implementation of the new guideline was called off less than two months after it came into force, and the ACLA’s two documents also failed to mate-

rialize. Whether the revision to Article 35 of the Criminal Law can pass legislative readings remains unknown, but such rules, designed to restrict lawyers’ freedom to speak in court, indicate that judicial organs are feeling the heat from increasingly outspoken lawyers.

Professor Zhang said the rules, Article 35 in particular, could cause a “chilling effect” in court. “The Law on Lawyers stipulates that lawyers enjoy the right of immunity in court,” Zhang said. “If legislators pass [the amendment to] Article 35, lawyers will be highly likely to commit the crime of ‘insulting, slandering or threatening’ the judge or the public prosecutor, and thus their lawful rights will be hard to safeguard.”

New Obstacles

Lawyer Zhang Yansheng, with more than 30 years of experience in the profession, told NewsChina that this was not the first time Chinese lawyers had met with occupational risks.

An amendment to China’s Criminal Procedure Law, which took effect in 1997, created difficulties for lawyers in three main areas: with clients getting access to files, and investigating and obtaining evidence.

The problems were solved to a large extent after a 2012 revision to the Criminal Procedure Law, but three new difficulties soon emerged: excluding illegally obtained evidence, requesting examination of evidence, and applying for witnesses to be present in court.

Excluding illegally obtained evidence from trials is a common practice in criminal defense. If the police or the procuratorate obtains evidence against a defendant by torture or any other illegal means, the lawyer can appeal to the court for rejection of evidence.

However, China’s rules on excluding illegally obtained evidence were jointly set by the country’s highest judicial authorities in collaboration with the Ministry of Justice, and took effect less than five years ago. It is highly unusual for a court to grant a lawyer’s request to exclude illegal evidence.

In 2013, the Beijing-based Shangquan Law Firm conducted a survey on the implementation of the new Criminal Procedure

11

politics

Law. When asked about the exclusion of illegal evidence during court trials, 123 of the 318 lawyers surveyed said the court held a permissive attitude toward the prosecuting party’s obligation to testify, 132 said the court ignored requests made by the defendant, and 103 said the court initiated an exclusion procedure but made no judgment on whether or not a piece of disputed evidence was illegal.

Lawyer Zhang Yansheng said failing to exclude illegally obtained evidence caused a pernicious consequence – confessions are routinely extracted through torture. “As the court didn’t judge that the evidence was illegally obtained, it was hard to punish those who had used torture to coerce the defendant into making a confession.”

Checking evidence is another major issue that could have a big influence on judgment.

Several criminal defense lawyers, speaking on condition of anonymity, told NewsChina that, nowadays, physical evidence is rarely seen in court during criminal trials, with the prosecuting party generally simply presenting photographic evidence. According to the respondents to the law firm’s survey, some local courts even routinely fail to show key evidence such as judicial appraisals during trials, and lawyers’ requests to review physical evidence are rarely granted.

Regarding requests that witnesses attend court proceedings, 195 of the 318 lawyers surveyed said that courts would usually approve the attendance of witnesses for the defense, but only 74 said the same was true for witnesses for the prosecution.

‘United Front’

Part of the pressure lawyers feel comes from bias inherent in the law itself.

According to the Criminal Procedure Law, witnesses can testify in court only when the court deems if necessary, according to professor Zhang, meaning “the court is the key factor in determining whether witnesses will show up in court or not.”

In lawyer Zhou Ze’s opinion, the difficulties lawyers are facing can be attributed to

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the lack of punitive measures applicable to judicial authorities. “Courts and procuratorates will bear no adverse consequences from failing to show evidence or not allowing witnesses to attend trials.”

Professor Zhang proposed sanctions on judicial misconduct. If the court fails to honor its obligations – failing to show necessary evidence or allow key witnesses to attend the trial, for instance – the defendant should be entitled to appeal to a higher court or request a retrial, he said.

Professor Zhang Jianwei said the root of the problem lies in the double standards inherent in China’s judicial system. “For example, with regard to the police, procuratorates and judicial workers, the court assumes that human nature is good, meaning that their misconduct – such as illegally obtaining evidence – is deemed to be for the proper purpose of clearing up the case,” Zhang said.

“But for defendants and their lawyers, human nature is assumed to be evil, meaning that they intend to do wrong.”

Double standards also exist when weighing evidence, he said. When a defense lawyer asks the court to investigate suspected use of torture in obtaining confessions, investigating authorities need only show a verification document claiming that upon review, no illegal activity was found in the process of obtaining the evidence. These documents, some of which are hand-written and are issued by investigating organs, are accepted by courts as a proof that there was no misconduct in the process of obtaining evidence.

“But it’s hard to imagine the court allowing the father of a defendant to write a note to prove that his son was innocent.”

The police, the procuratorate and the court, which should be independent from one another, have now united, he said. In order to maintain this “united front,” defense lawyers’ legal rights are at risk, which may further erode defendant’s legal rights, he said.

Reform

An amendment to the 1997 Criminal

Law added the now infamous Article 306, which made it a crime for a lawyer to falsify evidence.

Since then, criminal defense law has been seen by many as a high-risk profession, given that lawyers are regularly arrested by police and prosecuted by procuratorates, Zhang said.

A survey conducted by the ACLA showed that from 1997 to 2007, a total of 108 lawyers had been sued on charges of “impairing testimony,” although only 32 guilty verdicts were returned.

A separate ACLA investigation into 23 cases of lawyers falsifying evidence, found 11 cases were withdrawn or ended in acquittal, six delivered a guilty verdict, one was exempted from criminal penalty, with the remaining five still unresolved.

In 2012, China’s Supreme People’s Court issued an explanation of the Criminal Procedure Law – Article 250 stipulates that lawyers who create a disturbance in court during a trial and refuse to stop can be forcibly removed from the courtroom by bailiffs.

The Supreme People’s Court began to revise the Court Rules of the People’s Courts in 2013. The new Court Rules, which will beef up enforcement of court order and restrict the use of electronic devices in court, may be released this year, Professor Zhang said.

Zhou Ze said that the move indicated that judicial authorities were trying to institutionalize limitations on lawyers’ rights. “Our previous means of struggling through are losing effect,” he said.

However, Professor Zhang remains optimistic about the future for lawyers’ rights.

In recent years, defendants, lawyers and their rights have become increasingly prominent in society, he said. “Judicial organs have not been not able to catch up with this rapid improvement, and this has naturally led to conflict,” he said.

To resolve these conflicts, judicial authorities should improve outdated judicial mechanisms, instead of just placing more restrictions on lawyers, he said. NEWSCHINA I May 2015

Photo by Xinhua

Family Planning Policy

Call to Cancel Academics continue to call for an end to the population control policy to address the dual issues of an aging society and a looming labor shortage. Why are their requests still being rebuffed?

By Min Jie

NEWSCHINA I May 2015

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politics

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015 marked the fifth consecutive year that school principal He Youlin, also a deputy to the National People’s Congress (NPC), China’s top legislature, appealed to the government to end China’s One Child Policy during its annual sessions in Beijing.

He was not alone. As early as in 2004, a dozen academics including Renmin University of China demographer Gu Baochang signed and delivered a report to the central government calling for adjustment of China’s population control policy. Before the opening of the conferences of the NPC and the Chinese People’s Political Consultative Conference (CPPCC), China’s top advisory body, in March 2015, 39 academics once again petitioned the government to end the current State-enforced family planning policy.

Unexpected

In November 2013, the Chinese central government announced that it would relax the One Child Policy to allow couples to have a second child if either the father or mother was an only child, yet another significant change to a population control policy in effect since the 1970s.

That year, China’s National Health and Family Planning Commission (NHFPC) predicted that more than 2 million additional babies would be born each year, leading to a birth spike. Nevertheless, statistics issued by the same agency in December 2014 showed that although more than 11 million couples across the country were now entitled to have a second child, only 6 percent of these had applied for a birth permit, a far lower percentage than anticipated. In 2014, only 470,000 Chinese couples had a second child. Zhejiang, the first province to adopt the amended policy, estimated that about 80,000 babies would be born in 2014, but saw only 16,000 registered additional births.

Indeed, across China, and particularly in urban areas, the number of applications for birth permits have been declining, indicating that the birth rate continues to fall despite attempts to shore it up with amended policies.

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Wang Feng, a sociology professor with Shanghai Fudan University, was surprised to see that previous projections for China’s birth rate from government demographers were nearly 70 percent off the mark.

NHFPC spokesman Mao Qun’an said the unexpectedly low rate of second births was probably because the policy was put into practice in 2014 and many couples were still preparing to have a second child.

In the same statement, Mao predicted a rise in the rate of second births in 2015.

Crisis

For He Youlin, the tweaked policy has in effect been a failure, prompting him to “strongly urge” lawmakers for a total relaxation to allow all couples to have a second child.

“The policy to allow couples to have a second child if one parent was an only child failed to address China’s aging society and labor shortage – especially after its rapid change from a country with a high birth rate to low one,” He told NewsChina. “The current problem with China’s population is the phasing out of the demographic dividend [and emergence of] a low birth rate, an aging society and a gender imbalance.”

In December 2014, academics from over 30 institutions across the country discussed China’s population problem and agreed that rapid urbanization, growing population mobility as well as the growing number of single-child families have become China’s “new demographic normal.” Professor Gu Baocheng told media that the biggest crisis lay in the country’s chronically low birth rate.

Official statistics have showed that China’s fertility rate has fallen below the global average for the past 20 years. The internationally accepted standard is 2.1 children per couple. Gu estimates that the population of Chinese women aged between 23 and 30 will drop by 40 percent in the next 10 years, meaning even if every one of those women were to give birth to two children, the birth rate might still continue to fall.

According to data from its fifth national demographic census, ChiNEWSCHINA I May 2015

“If the current population restrictions continue, the youth of China will, in the near future, pay the economic and social price”

na’s total fertility rate is as low as 1.22 births per couple. In 2010, Beijing recorded 116,000 new births – a fertility rate of 0.71. Shanghai’s fertility rate in 2010 stood at 0.74, with 129,000 new births.

In Shanghai alone, the registered population has been in consistent decline since 1993, according to statistics from the Shanghai Municipal Commission of Health and Family Planning.

“Today, all the excuses for strictly controlling population growth have disappeared. The situation has completely changed, and it is hard to find a single argument in defense of the One Child Policy,” said Professor Wang.

Way Out

The adjustment of population policy has been a constant topic of debate during China’s annual Two Sessions. In 2015, in addition to He Youlin, a number of NPC deputies and members of the National Committee of the CPPCC, including some government officials working for local health and population commissions, have thrown their weight behind proposals to reexamine the policy.

Guo Yufen, deputy director of the Gansu Provincial Health and Family Planning Commission, also an NPC deputy, told media that before the introduction of the amended policy in Gansu Province, it was expected that more than 30,000 parents would apply to have a second child. However, only 4,000 couples did so, leading her to argue for the swift introduction of a nationwide, universal two-child policy.

In October 2014, Cai Fang, vice president of the Chinese Academy of Social Sciences, China’s top government think-tank, told a conference that China is likely to see a two-child policy introduced by 2016.

A month later, however, the NHFPC told the media that there was “no exact deadline” for such a move.

Ma Xu, director of the NHFPC Research Center said during the Two Sessions in March that China will not begin trial runs of a twochild policy in 2015 because “it is likely to simply lead to birth spikes in several prosperous areas of the country”.

Gu Baochang argues that such theorizing ignores the facts – that

NEWSCHINA I May 2015

it has already been proven by data collected since the introduction of the latest amendment that relaxation of the policy has not created an immediate spike in the birth rate.

As early as 1963, South Korea encouraged couples to have only two children, but as the economy grew rapidly the birth rate experienced a consistent decline. In 1996, the country canceled its population control policy and introduced stimulus packages to encourage couples to have more children. However, neither measure served to reverse the downward trend. In 2005, South Korea’s female fertility rate hit a historic low of 1.1 births, close to what international demographers call a “fertility trap.” Similar situations have been recorded in Singapore and Taiwan.

“China has missed its best chance to revive its birth rate,” Professor Gu told NewsChina, adding that 2004 was when the first One Child generation reached marriage age, the prime opportunity to adjust birth policy. However, Gu told NewsChina, most people, including academics, failed to recognize the window.

“If the current population restrictions continue, the youth of China will, in the near future, pay the economic and social price,” he continued.

China’s labor pool has been declining rapidly as a direct result of its precipitously falling birth rate. According to statistics from the National Bureau of Statistics (NBS), China was home to a working age population of 937 million people aged between 15 to 59 in 2012, 3.45 million fewer than recorded the previous year, the first recorded decline in the working population. In 2014, NBS data showed that China’s labor force dropped 2.44 million on the previous year, indicating that this trend is set to continue.

“It is already a very tough situation now, which allows for no hesitation,” He Youlin told our reporter. He continues to appeal to policymakers to take responsibility for overhauling the One Child Policy to address China’s aging society and labor shortfall – before it’s too late.

“Even if challenges and risks abound, the sooner China allows all couples to have a second child, the better,” he said.

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Photo by Xinhua

cover story

Chinese President Xi Jinping (center), Premier Li Keqiang (right) and Chairman of the 12th National Committee of the Chinese People’s Political Consultative Conference Yu Zhengsheng (left) attend the closing ceremony of the annual session of the National People’s Congress, Beijing, March 15

Security personnel march outside the Great Hall of the People before the closing ceremony, Beijing

Delegates arrive for the opening ceremony of the annual session of the National People’s Congress, 16 Beijing, March 5, 2015

Photo by IC

THE PARTY LINE A delegate from Sichuan Province takes notes during NEWSCHINA I MayCongress 2015 the annual session of the National People’s

Photo by IC

Photo by IC

A Chinese military band member rehearses prior to the closing ceremony of the annual National People’s Congress, March 15, 2015

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Some delegates pose for a group photo after the opening ceremony of the Chinese People’s Political Consultative Conference, Beijing, March 3

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Photo by AP

NEWSCHINA I May 2015

Photo by IC

s the delegates of the National People’s Congress and the Chinese People’s Political Consultative Conference assembled for their annual Two Sessions, the public waited anxiously to see which direction they would take the nation. Facing an economic slowdown, ongoing judicial and administrative wrangling and with its ranks reeling from the rigors of a hard-edged anti-corruption campaign, China’s top legislative and consultative bodies had a lot on their plates. This month, NewsChina offers an overview of the Two Sessions, picking apart the rubric and giving our readers an essential guide to the legislative agenda of a government in transformation.

President Xi Jinping attends a review session with representatives from Jiangxi Province at the annual session of the National People’s Congress, March 6, 2015

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Two Sessions Photo by Xinhua

The Will of the Party

With discussion of legal reform dominating China’s annual Two Sessions, China’s leadership continues to push forward its ‘rule by law’ agenda

By Cai Rupeng and Liu Ziqian

F

ollowing its high-profile Fourth Plenum held in October 2014, during which the Party set “rule by law” as its policy priority for the coming years, the Chinese leadership has defined 2015 as a crucial year. The leadership is expected to launch a wide range of policy initiatives to make progress on the more than 180 reform tasks highlighted at the Party summit last year.

Therefore, it is unsurprising that legal reform has dominated the agenda of this year’s annual Two Sessions, held between March 3 and March 15, when the National People’s Congress (NPC), China’s top legislature, and Chinese People’s Political Consultative

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Conference (CPPCC), the country’s highest political advisory body, convened in Beijing.

At this year’s closely watched annual event, where the NPC’s 3,000 delegates reviewed and endorsed the government’s work of the past year, passed new laws, approved the budget and appoint personnel, while the 2,200 members of the CPPCC made policy suggestions to the government, key government bodies outlined a rather crowded legislative agenda.

Pledges

In his annual report delivered to the NPC, Zhang Dejiang, chairman of the NPC

Standing Committee and a member of the Standing Committee of the Politburo, reviewed revisions to several major laws over the previous year, such as the administrative litigation law, which expanded citizens’ rights to sue the State, as well as environmental law amendments.

Zhang also outlined an extensive legislative agenda for the next few years, covering a wide range of fields including laws governing processes to re-address administrative decisions, domestic violence, philanthropy and food security, among others.

Moreover, Zhang Dejiang restated the importance of the constitution, a major theme NEWSCHINA I May 2015

Legislation Law

Among all the talk of lawmaking and pledges of reform, the area that has received the most attention, and provoked the most debate, has been a revision to the Legislation Law, which was reviewed and passed by the NPC. Under China’s legal framework, only laws that are considered to be of the highest importance can be submitted to a full NPC session, as most laws are submitted directly to the Standing Committee of the NPC.

NEWSCHINA I May 2015

Regulating the process of lawmaking with a mandate subordinate only to the constitution, many legal experts argue that the revision of the Legislation Law can help remove barriers and clear the way for more serious March 9, judges from Fengjie County Court in Chongqing cross a gorge to reform, address- reach a remote village ing some major legal issues embedded within China’s legal arbitrary behavior by both local and central system.

One of the major revisions involves stream- governments.

Similarly, the revised Legislation Law also lining the boundaries of lawmaking power of extends its jurisdiction beyond criminal law the central and local governments.

While the bill expanded the number of to encompass “all forceful State measures that cities under the jurisdiction of a local gov- constrain human freedom,” which Professor ernment from 49 to 284, empowering their Liu said has also cleared the way for the abolegislatures to make local laws, it also tightly lition of various extra-legal detention mecharestricted powers to issue local laws concern- nisms such as forced labor camps for those ing “rural and urban development and man- found guilty of drug offenses.

Another major highlight of the revised law agement, environmental protection, and preservation of historical heritage and cul- is that it formally establishes the principle of statutory taxation. Currently, of China’s 18 tural values.”

Supporters of the revision argued that by existing items of taxation, only three – inexpanding the lawmaking powers of local dividual income tax, corporate income tax, branches of the NPC, the bill will allow Chi- and vehicle and vessel tax – are backed by nese cities to better address their own prob- legislation, while the remainder are based on lems in the context of regional differentia- formal provisional regulations issued by the tion. Meanwhile, others are concerned that State Council, China’s cabinet.

The result is that taxes are often levied and the bill will lead to more widespread abuse of power, as local governments will have the altered arbitrarily by government agencies, a freedom to be more arbitrary in their law- major source of public dissatisfaction. In January, 2015 the Finance Ministry’s decision to making.

According to Professor Liu Xin from increase consumption tax on gasoline three the China University of Political Science times within 45 days led to public outcry.

Fu Ying, spokeswoman for the NPC, told and Law, who participated in drafting the amendment, the real significance of the re- a press conference that China aims to realize vision is that it formally put all government full statutory taxation by 2020 – a move that regulations, not just laws, under its jurisdic- many interpreted as a sign that the revision of tion. Liu argued that this will provide a le- the Legislation Law will be followed by congal foundation for further reform to control crete measures to rein in government powers.

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Photo by CNS

of last year’s Fourth Plenum. Zhang pledged that the NPC and its Standing Committee will focus on improving enforcement of the constitution and enhance legal supervision over the coming year. Among specific measures outlined by Zhang include the establishment of legal procedures for interpretation of the constitution, and a legal mechanism to review and record government regulations so that those that contradict with the constitution can be rescinded or corrected, though he did offer a specific timetable.

Besides Zhang’s speech, reports from China’s Supreme People’s Procuratorate (SPP) and from the Supreme People’s Court (SPC) also received wide attention. Earlier in February 2015, both judicial authorities launched directives to guide judicial reform.

A major focus of the directives was to increase the independence of local courts and procuratorates from local governments. The Supreme People’s Court even set 2018 as the deadline for achieving its 65 reform items, aiming to establish a legal environment in which the justice system can be “trusted, respected and supported” by the general public.

In recent months, the Supreme People’s Court has already set up several circuit courts, as well as two cross-regional courts based in Beijing and Shanghai, to reduce political interference from local governments.

In his report to the NPC, Zhou Qiang, president of the SPC, made an unprecedented apology for previous miscarriages of justice, and highlighted efforts to prevent future ones. According to Zhou, the court in 2014 overturned 1,317 wrongful convictions, including several high-profile cases that had led to strong public outcry.

Supreme People’s Procuratorate President Cao Jianming (left) and Supreme People’s Court President Zhou Qiang (right)

Law-abiding Party

For many observers, the general trend of China’s legal reform appears to be a strengthening of lawmaking power and NPC supervision within China’s legal system. But things may not be exactly as they seem.

In his speech, Zhang Dejiang also said that the NPC will establish legal mechanisms to “seek instruction from” and “report to” the Party, a detail that has baffled many China watchers.

For a long time, advocates of legal reform have argued for a more independent NPC, while the idea of a guidance-seeking procedure appears to be a step in the opposite direction.

According to Han Zhu, a political scientist from the Chunqiu Development Strategy Research Institute, a Shanghai-based think tank, the concept reflects a more active approach by the Party to incorporate its leadership into China’s existing legal framework, simultaneously asserting its ruling status.

“Although China’s constitution endorses the Party’s ruling status, it does not offer a clear legal integration of the relationship be-

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Photo by Du Yang

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tween the Party’s leadership and the authority of law,” Han told NewsChina. The result is while some view the relationship between the Party and the law as two forces running parallel to one another, others adopt a vertical interpretation that puts the Party above the law, Han said.

“Drawing painful lessons from its experiences over the last three decades, the Party has finally realized that it can neither place itself above the legal system, nor act as an external force that runs parallel with the law, as this will not only undermine the authority of law, but also the legitimacy of the Party,” said Han. Han’s argument was echoed by Sun Xiaoxia, dean of the Law School of the Shanghai-based Fudan University. “For several decades, the Party has chosen to go around the theoretical question of the relationship between its leadership and the authority of the law,” Liu told NewsChina, “but the Xi Jinping administration has chosen to confront this challenge directly.”

The suggestion to establish a legal procedure within the NPC to make it directly answerable to the Party indicates that the CPC

has begun an attempt to legalize its leadership through established judicial procedure.

By doing so, the Party can argue that defending the authority of the law and defending the Party’s rule are two sides of the same coin.

“The Party, with its ruling status, will serve as an integral component and leading power in the process of establishing rule by law, rather than a force that undermines the law’s authority,” said Han. When asked about the role of the Party’s leadership in the reform of the NPC at a press conference on March 9, Kan Ke, deputy director of the NPC’s Legislative Affairs Commission repeatedly emphasized the importance of “legal procedures.”

“The Party’s leadership will be achieved through turning the Party’s will into government policy through legal procedures,” said Kan. According to Professor Sun, the Party’s “socialist rule of law”approach, which focuses on establishing the authority of the law, may provide an empirical solution to the heated ideological debates of the past few years between leftists, who argue for a stronger and more Leninist-style state, and rightists, who advocate Western-style democracy.

“After all, establishment of the authority of the law is an aspiration shared across all sectors of society, both leftists and democrats, rich and poor, and the authorities and the general public,” Kan said.

In the meantime, with a more assertive approach in emphasizing the Party’s ruling status, coupled with legal reform initiatives, the Party appears to be aiming to put an end to ideological debates, which it has deemed to be a major source of challenges to its legitimacy and ability to rule.

So far, the Party’s new approach appears to be working, as its legal reform initiatives, coupled with an enduring anti-graft campaign, has boosted its image. But as the Party has tied its legitimacy to its ability to establish the authority of law amid widespread public anticipation of serious reform, there will be less and less room for error. NEWSCHINA I May 2015

Two Sessions

Graft, Front and Center This year’s Two Sessions provided an unprecedented opportunity for China’s leadership to publicize, intensify and broaden its anti-graft campaign

By Wang Quanbao

I

n China’s political sphere, there is perhaps no event as eagerly analyzed as the “Two Sessions,” when the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), respectively China’s top legislature and its political advisory body, convene in March each year.

As delegates to the NPC and CPPCC review the government’s work and approve the policy agenda for the year, the Two Sessions serve an important ceremonial, symbolic and practical function in China’s political system.

As the show of unity between the Party and the people is considered a political priority during the meetings, the Party traditionally

NEWSCHINA I May 2015

chooses to play down the issue of corruption.

This year, however, as China’s high-profile anti-graft campaign carried into 2015, the issue of corruption became the surprise highlight of the Two Sessions. Anti-corruption measures not only dominated the various keynote reports delivered by leaders of major government organizations at the NPC, but became the focus of both the internal discussion and media coverage of the event.

Runaway

Given that the high-profile corruption crackdown has claimed a number of NPC and CPPCC delegates in the past year, drafters of this year’s Two Sessions agenda had lit-

tle option but to address the corruption issue.

It is estimated that 34 NPC delegates, who also serve as government officials, along with 13 CPPCC members, have been snared in the last year, more than the combined total over the past five years. Among them are Ling Jihua, principal political aide to former president and general secretary of the Communist Party of China (CPC) Hu Jintao, and Su Rong, at various times chief Party secretary of Jiangxi, Gansu and Qinghai provinces. Both Ling and Su also previously served as deputychairmen of the CPPCC. The fall of senior CPPCC leaders may be the reason why the body’s chairman Yu Zhengsheng chose to devote much of his

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tral Commission for Discipline Inspection (CCDI), in a meeting during the NPC session.

In addressing the problem of corruption, Xi Jinping emphasized that the Party will focus on establishing a healthy “political ecosystem,” a concept reiterated by various national and local leaders.

Photo by Yang Yu/IC

From Local to Military

Students in Jiangsu Province carry out a roleplay exercise in support of the anti-graft compaign

keynote speech to CPPCC delegates to the anti-graft agenda, the first time in 20 years that a CPPCC annual report has tackled the issue of corruption.

With an unprecedented number of corrupt officials falling under investigation, it was inevitable that the issue would dominate the work reports of the Supreme People’s Court (SPC), China’s highest court, and the Supreme People’s Procuratorate (SPP), China’s top prosecutor.

Zhou Qiang, head of the SPC, told the NPC that the court had convicted more than 44,000 people for corruption-related crimes in 2014. According to Cao Jianming, procurator-general of the SPP, the prosecutor investigated 3,664 for embezzlement and taking bribes totaling over one million yuan (US$160,000) in 2014, involving 4,040 public servants, a 42 percent rise from the previous year.

Among them were 589 bureau-level of-

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ficials, 2.3 times the number convicted in 2013, and 28 officials at the provincial or ministerial level, more than the total number that fell in the four years from the beginning of 2010 to the end of 2013.

Corruption also became a major issue in province-based meetings. Wang Rulin, Party secretary of Shanxi Province, for example, admitted that corruption in the province had become so endemic that in some cities, the fall of a single official could lead to the removal of an entire leadership. In Taiyuan, capital of Shanxi Province, three former Party secretaries and three former police chiefs have been removed from their posts during the anti-graft drive.

“From recent investigations, we can see that corruption has become so serious that it is not the problem of a corrupt individual, but a corrupt region or family, which has led to systemic and runaway corruption,” said Zhao Hongzhu, vice-chief of the Cen-

With corruption dominating the discourse, it was unsurprising that more officials fell during the sessions. On March 3, two days prior to the opening of the NPC conference, the CCDI announced that it was placing Jing Chunhua, general secretary of the Hebei provincial government, under investigation for “serious violations of law and party discipline.”

On March 11, 2015 the CCDI announced it was launching an investigation into Ren Lizhi, a deputy standing committee chairman of the regional NPC in Xinjiang, making him the first provincial-level official in the autonomous region to fall in the anticorruption drive.

Then on March 15, 2015 the day when the NPC session concluded, another two ministerial level-officials, Qiu He, vice-Party secretary of Yunnan Province, and Xu Jianyi, Party secretary and general manager of the State-owned First Automotive Works and former party secretary of Jinlin City, both came under investigation. Both Qiu and Xu are deputies to the NPC, and had attended this year’s NPC session. On March 18 and 20, the CCDI announced a probe into the conduct of Liao Yongyuan, general manager of State-owned energy giant PetroChina, and Xu Gang, deputy-governor of Fujian Province.

This most recent announcement has brought the total number of officials at the provincial or ministerial level claimed unNEWSCHINA I May 2015

der the anti-corruption drive since October 2013, when Xi Jinping assumed power, to 99.

But for many, what is more significant about China’s ongoing anti-corruption drive is that it has expanded to ensnare military personnel. This January, the Chinese leadership released a list of 16 senior military officers under investigation for corruption, of whom 15 held a rank of major-general or above.

On March 2, the Chinese People’s Liberation Army (PLA) released a second list of an additional 14 senior officers accused of corruption, the most prominent of whom was Guo Zhengang, son of the retired general Guo Boxiong, former deputy chairman of the Central Military Commission (CMC), the PLA’s top commanding body.

The probe into the younger Guo has fueled speculation that his father may be the next big “tiger” to be snared for corruption.

Guo Zhengang had just been promoted to major general in January, which observers now believe was a carefully designed ploy to lull his family into a false sense of security.

Meanwhile, the authorities and the media focused their investigation on Xu Caihou, another CMC vice-chairman, the highest ranking military officer investigated so far.

In his speech delivered to the NPC on March 12, 2015, Zhou Qiang, head of the SPC, pledged that all 28 ministerial officials who fell last year, including Xu, would be tried, leading to speculation that Xu would face a civilian court, rather than a court martial.

But at midnight on March 15, 2015, the State-run Xinhua News Agency reported that Xu had died of multiple organ failure caused by bladder cancer. According to Xinhua, the criminal investigation against him would be dropped, and Xu’s “illegally obtained wealth” would be dealt with according to the law.

NEWSCHINA I May 2015

The announcement, which was made at the exact moment the Two Sessions ended, immediately provoked suspicion over the exact time of Xu’s death.

Anti-graft Legislation

A major feature of China’s ongoing anticorruption drive is that it is led by the CCDI, the Party’s internal disciplining body, rather than by the government’s investigation agencies.

Normally, the Party would conduct its own corruption probe before handing over suspects to prosecutors, if the case is ever handed over at all. Officials are routinely detained for months without being officially charged. This system has long been criticized for operating outside of the country’s existing legal system, and for its lack of transparency.

Experts have long argued that anti-corruption efforts should be conducted within the legal framework, rather than in the style of political campaigns.

In a speech delivered at the annual meeting of the NPC on March 8, 2015 Zhang Dejiang, chairman of the NPC’s Standing Committee and a member of the Standing Committee of the Politburo, said that the drafting of a national anti-corruption law is high on this year’s agenda.

Zhou Qiang, president of the Supreme People’s Court, also pledged the launch of a judicial interpretation to assign a legal procedure for the seizure of “illegally obtained assets,” and to reclaim assets from corrupt officials who have fled overseas. In recent years, the authorities have strengthened their efforts to hunt down runaway corrupt officials – 49 officials suspected of corruption, who had fled to 17 different countries, were either captured or persuaded to turn themselves in last year.

Similarly, Cao Jianming, head of the SPP, also said that the prosecution authority was

working to set up an anti-graft “super-bureau” to lead the investigation of corruption cases within the year. In a later interview with Beijing-based English-language newspaper China Daily, Cao said that the plan for the bureau had been approved by the central government.

All public moves made by government during the Two Sessions appear to echo the “rule by law” agenda established at the Fourth Plenum of the Communist Party of China held in October 2014, at which the Party set legal reform as its priority for the coming years.

Regarding the corruption problem, the Party has pledged to address “both the symptoms and the root causes” of the issue.

So far, no details of any anti-graft legislation have been released. According to Zhou Guangquan, a law professor at Tsinghua University, who also serves as a member of the NPC Law Committee, if concrete steps are taken, China could develop a basic legal system for preventing corruption, which would likely include a cluster of laws, in five years’ time.

According to Professor Zhou, China not only needs a national anti-corruption law and a national agency to coordinate anticorruption efforts across different agencies, it also needs a systemic change in legislation regarding the government’s administrative procedures. Zhou argues that as the root cause of corruption lies in the fact that it has no clear legal definition, China needs a series of laws to regulate the government’s decisionmaking process to rein in the power of government officials.

More importantly, Professor Zhou argues that the key to success is not lawmaking, but implementation and enforcement of laws.

“No matter how many laws the country enacts, if governments do no enforce them... corruption will be inevitable, and there will be no rule by law,” Zhou told NewsChina.

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Chinese Premier Li Keqiang arrives at the opening meeting of the third session of China’s 12th National People’s Congress (NPC), Beijing, March 5, 2015

Two Sessions

Start Your Engines

For the new ‘twin engines’ of China’s economy, conventional concepts of entrepreneurship like passion, professionalism and patience are still required

By Li Jia

4

1-year-old Ms Hu always took taxis when working as a PR rep for her previous employer, an Internet company.

These days, she takes the subway to meet her clients, but feels much happier. “I was overwhelmed by anxiety at that time, haunted by how much I ‘owed’ my boss every day; now I am doing what I am really interested in, and pursuing my own dreams,” she said to NewsChina. Hu is developing a smartphone app for middle-income pensioners in Beijing.

“The excitement I feel every day now has even helped me lose weight and look younger

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than my age,” she laughed.

Ms Yu, a postgraduate student in her late 20s in Beijing, is thinking about starting an online outlet promoting pesticide-free vegetables and fruits, as well as historical tourist attractions of her hometown, a county in relatively underdeveloped Henan Province.

She told NewsChina she had already received positive responses from several rural cooperatives and friends with IT expertise, and was looking for rural households that could provide accommodation for tourists.

These Internet-based ventures represent

the fashionable side of one of the new “twin engines” for China’s economy – the engine of “popular entrepreneurship and innovation,” as defined as in Chinese Premier Li Keqiang’s report to the annual session of the National People’s Congress (NPC), China’s parliament, in March. The other engine is “increased supply of public goods and services” to boost domestic demand. Private investment is also encouraged to fuel this engine.

Several new or revamped concepts were highlighted in the report, which focuses on the new engines driving the “new normal” NEWSCHINA I May 2015

Photo by newschina

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of the Chinese economy and immediately made headlines in both domestic and international media.

But as the government shows off the blueprints for its shiny new engines, analysts also have reminded that it takes time and effort from various participants to get them under the hood of the economy, and put that power on the road.

Grassroots Economy

For the first time since the Asian Financial Crisis in the late 1990s, deflation, with the specter of systematic business contraction and job losses, has been brought back to the center of debates among domestic and international observers of the Chinese economy. The growth rate target has been set at about 7 percent for 2015, the lowest since 1990. Hitting even this target, as Premier Li acknowledged in his press conference at the conclusion of the NPC session on March 15, is no easy task, given the size of the economy.

Moreover, his work report noted that China’s growth model remained “inefficient,” and the innovation capacity “insufficient.”

The “twin engines” are designed to disperse the dark cloud of a continued slowdown in growth rate and uncertainties over structural upgrading in China’s economy. They are also endorsed by international analysts. Christine Lagarde, head of the International Monetary Fund, stated in her speech at the China Development Forum in Shanghai on March 20, that if China takes the risk of slower growth to place more importance on innovation and consumption than ever, China’s “economic cup of tea” would “end up with a richer taste.”

A boom in start-up business among the public, or the “grassroots economy” in the words of Premier Li, is in full swing. In 2014, newly registered companies soared by 47 percent and created more jobs than expected, despite the economic downturn. According to the annual joint survey by State broadcaster China Central Television (CCTV) and the National Bureau of Statistics released on March 9, 2015, the group with the strongest desire to open a start-up are married, lower middle class urban men between the ages of

NEWSCHINA I May 2015

26 and 35. Those with a higher educational background and higher income seem to be more satisfied with the jobs they have.

Internet Plus

Setting up a business has been made much easier due to the streamlining of registration procedures in the past two years. Technology has provided a seemingly irresistible incentive – Internet-based businesses are the most popular category of start-up. Ms Hu, for example, had begun to think about her own business three years ago, but did not put her plan into action till recently. “I don’t have a glittering background like the superstars of the business world, like a US or European business diploma, or the support of a rich family. But now, the age of mobile Internet gives everyone an equal chance at least to give it a try,” she told NewsChina.

Premier Li Keqiang, himself an enthusiastic advocate of Internet based business and consumption, proposed the concept of “Internet-plus,” using online services to facilitate offline industries. In cafes in Beijing, it is very common to hear exciting dialogs about Internet business plans. Hu herself spends much of her time meeting with her team and potential users in coffee shops.

Talking and thinking do not cost much.

Registering a business is also comparatively easy. However, a lot of money is needed to build both the Internet, and the “plus”– realworld things for consumers to buy.

Believe in Angels

Angel investment, a kind of equity investment that seeks to invest in high-risk, highreturn start-up ventures at, or even before, their inception, is widely recognized to have underwritten innovation in the US, the world’s most vigorous market for grassroots entrepreneurship. China also hopes to rely on this kind of investment for its Internetplus boom. Articles and seminars on how to win the favor of an angel are very popular in China – both Hu and Yu, for example, are convinced that somewhere out there, their angels are waiting for them.

Probably not as many as they might imag-

ine. Professor Yao Yang, director of the National School of Development at Peking University, thinks China is still far from being a hotbed of risk-oriented financiers – most of the country’s big investors remain preoccupied with bigger, safer projects. In addition, they are heavily concentrated in China’s firsttier cities. Chen Zhiyi, director of a local equity exchange for small, unlisted companies in Fujian Province, told NewsChina that even in prosperous second-tier cities like Xiamen, such investors are rare.

This means that the small number of angel investors who focus on brand new businesses are even harder to reach. As one of them, Terrence Zhang, told NewsChina, while it is true that there are more “angels” out there than ever before – at least in mega cities – there is even more competition for their attention.

Besides, many of these so-called “angels” themselves have little expertise to offer new companies, and no ability to take the wheel when things go wrong. Experienced angels equate their careful decision making process to “looking for a potential partner in a romantic relationship,” according to Zhang.

In the past few years, online crowdfunding or peer-to-peer (P2P) borrowing platforms have mushroomed in China, but a spate of fraud scandals last year dealt a blow to their popularity. By July 2014, founders of about 150 of an estimated 1,200 P2P websites absconded with investors’ money, according to the China Banking Regulatory Commission (CBRC). Equity investment platforms are also facing a crisis of creditworthiness. Many crowdfunding investors complain of receiving shoddy products as a reward for their investment.

On March 23, 2015, the State Council declared a roadmap to put an innovationfriendly policy and legal frameworks in place by 2020. Angel investment will enjoy favorable tax conditions, which comes as good news to angel investor Terrence Zhang.

CBRC is working on rules governing online lending platforms. It seems angels themselves will have to grow before they can serve as a reliable source of growth for business start-ups on the ground.

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Made in China 2025

There are also plans to give China’s traditional economy a makeover. The “Made in China 2025” strategy has been launched to turn the world’s biggest manufacturer into the world’s “best,” within a decade. “Internetplus” is also intended to aid this process, with manufacturing serving as the offline “plus.”

Indeed, the strong German performance in the aftermath of the 2008 Global Financial Crisis has persuaded most Chinese economists that while flashy start-ups may get all the media attention, the so-called “real economy” never goes out of fashion. In an interview with NewsChina, Professor Yao Yang expressed his concern about the pervasive “Internet anxiety” in society, and insufficient concentration on small, advanced progress on production lines.

His concern is apparently justified. Terrence Zhang told NewsChina he had noticed an obsession with identikit smartphone apps among start-up entrepreneurs, but indifference towards the idea of making something tangible and unique.

Times are tough for small and mediumsized enterprises (SMEs) in the manufacturing sector. Chen Zhiyi has noticed that many local companies cannot afford to hire enough skilled workers, let alone invest in better tech.

Though local equity exchanges like Chen’s are highlighted in the government roadmap, investors need time to understand the new market and are lukewarm towards buying stakes in SMEs in the current economic downturn, he said.

Various policies have been adopted to address the lingering problem of expensive and restricted access to capital for SMEs. The effect, however, remains limited. Private local banks, with more flexible and robust risk management arrangements than big Staterun banks, are regarded as the solution.

Direct subsidies are a much more immediate way of helping enterprises to upgrade.

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Tens of billions of dollars of public funds have gone to SMEs and hi-tech enterprises, and more investment is planned. However, according to the National Audit Office, some of the money was invested in vineyards in France, rather than for any technical purpose.

Party mouthpiece People’s Daily on March 16 criticized the lack of transparency in reviews of subsidy applications, and the absence of follow-up reviews of how subsidies are used.

Professor Yao does not believe the government is more adept than the market at identifying which industries and companies should get support in the first place. He believes research institutes are a better user of such funds. For enterprises, he explains, bank loans with favorable terms for specific technical upgrading projects would be more helpful, since they would encourage more thoughtful use of funds by putting borrowers under financial pressure, and reduce the risk of corruption among government officials who review applications.

There is another important player whose potential is yet to be exploited in industrial upgrading. Under the existing rules, researchers with universities and institutes, though they possess more cutting-edge, forwardlooking know-how than most enterprises, are not entitled to intellectual property rights to their own inventions. Yao proposed that China learn from common practice in the US, whereby researchers share intellectual property rights (IPR) with their institutions, and are permitted to privately monetize the technologies they create. A robust IPR system is also necessary to prevent infringement, he added.

Trials and reforms have been going on to allow private banks to operate, and develop a more diversified and liberalized financial market. The new Budget Law has put public revenues and spending under much stricter scrutiny. According to the State Council’s March 23 innovation roadmap, IPR in-

fringements will face tougher legal penalties, while researchers will be allowed to share IPR with their institutions, and start their own businesses. In some places, such as Chengdu, capital of Sichuan Province, academic staff at universities have already been encouraged to set up their own businesses implementing the fruits of their research.

None of the above tasks are easy. Ostensibly, since 2014, these tasks are all about money, but in reality, as Professor Yao and Chen Zhiyhi stressed, they are about laws and creditworthiness in the eyes of the law.

How to Partner?

As the operator of the other engine, increased public goods and services, the government is also trying out a new strategy. The central government is scheduled to invest US$78 billion this year, and provincial governments’ plans made public so far total up to about US$2.3 trillion. Major projects on the list include transportation, power grids, information networks, urban underground pipe networks, agricultural water conservancy, clean energy, environmental protection.

As Premier Li’s report described, the government “does not intend to perform an investment soliloquy.”

“Public-private partnership” (PPP) has thus become a buzzword since 2014. According to the World Bank definition, the term refers to cooperative contracts on public projects which are long-term, binding commitments with the private party bearing “significant risk and management responsibility.” The purpose is to provide public assets and services as professionally and efficiently as possible, and PPPs have been applied in China since the 1980s. However, as Wang Bao’an, Chinese Deputy Finance Minister, acknowledged in an interview with Xinhua News Agency in March 2015, in many cases, Chinese PPPs did not operate as such. A disproportionate amount of credit risk was NEWSCHINA I May 2015

Photo by ic

Journalists interview Professor Li Yi’ning, a prominent Chinese economist, at the third session of the 12th Chinese People’s Political Consultative Conference (CPPCC) National Committee, March 6, 2015

shouldered by the government. End users were overcharged for the services PPPs provided. Contractors faced government default when new officials took office. The practice shrank greatly after the government’s massive 2009 stimulus package to counter the Global Financial Crisis, and reemerged last year when enormous and ill-regulated local government debts in the form of financing platforms, a tool to get around budgetary disciplines to access bank loans, became an alarming risk threatening China’s financial system.

A new boom of PPPs seems to be on the horizon. Wang disclosed that local governments had announced more than US$160 billion’s worth of PPP projects for 2015. Jin Yongxiang, general manager of Dayue Consulting, a leading Beijing-based PPP consultancy, told NewsChina that recently there is now growing interest not only from Stateowned, private and foreign enterprises, but also financial institutions.

In December 2014, the Finance Ministry initiated 30 demonstration PPP projects, 22 of them existing local government financing platforms. This has reinforced the expectaNEWSCHINA I May 2015

tion that the model is designed to save local governments from debt.

Social Capital

Too much emphasis on debt easing, analysts warned, may distort the model once again. Dr Li Kaimeng, Director General of China International Engineering Consulting Corporation, a research center, stressed in an interview with NewsChina that efficiency and quality brought by private participation makes much more sense than money in PPP projects.

Unlike in other countries, the “private” in China’s PPP refers to “social,” and thus also includes State-owned enterprises (SOEs).

As private companies have mostly been in competitive sectors and have yet to develop experience in operating infrastructure projects, Dr Li estimated that SOEs, the main existing player, would continue to act as the biggest “social investors” in PPP projects for some time. This, however, has aroused concerns over the efficiency and fairness of PPP projects.

This, Dr Li noted, has highlighted the importance of following market-oriented

and law-based principles in operating PPP projects. For example, he explained, financial analysis has to be taken seriously in feasibility studies which now focus on technical designs and catering to application standards set by different government agencies. The performance of government-SOE cooperative projects, he added, will affect the enthusiasm of private companies joining the game.

Meanwhile, as Jin Yongxiang remarked, the PPP model is also a test for how government carries out its supervising duties, to ensure that quality of public services is not compromised by contractors in their pursuit of cost efficiency, a lesson from other parts of the world.

Policy makers also seem to hope to renovate the model with market-oriented standards. Instructions issued by the Finance Ministry, for example, repeatedly stress that legally based contracts are the core of the whole partnership, and specify every step of the whole process, from feasibility studies and financing, to interest and risk sharing, supervision and dispute settlement. SOEs controlled by local governments are excluded from bidding for local PPP projects.

Another less discussed potential integration of real private participation into PPPs are the plethora of start-ups sprouting up all over the country today. Both Hu and Yu hope that one day they will have the chance to bid for government procurement. Indeed, in developed countries like the UK, Dr Li said, PPPs are more often used in government procurement of public services than in infrastructure projects like construction. He shares Professor Yao’s view that this makes it possible to make the two sides of the engine work together, rather than separately.

The twin-engine itself, indeed, is a megaPPP project. Ways to ensure quality and efficiency have already been made clear. The challenge ahead is to make them not only look shiny, but run smoothly, too.

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society

Under the Dome

Breaking the Silence

An independent documentary discussing China’s air pollution problem, released online in February and erased from most video sharing websites in March, has rekindled debate over how best to tackle the country’s most pressing environmental issue

By Wang Yan

C

hai Jing, a former TV anchor and investigative reporter, produced a self-funded documentary about China’s air pollution problem, releasing it online in late February, 2015. The slickly-produced 104-minute film, delivered in the style of Al Gore’s An Inconvenient Truth, quickly became a sensation, going viral on its first day of release and becoming the top trending topic on Twitter equivalent Sina Weibo.

Within three days, Under the Dome received over 150 million views and attracted millions of comments from netizens. Then, on March 6, 2015 the documentary was swiftly removed from most Chinese video sharing websites.

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Grudge

Over the previous decade, as an investigative reporter for the State-owned China Central Television (CCTV), Chai Jing earned her household-name reputation through coverage of major national news stories including the Severe Acute Respiratory Syndrome (SARS) outbreak in 2004, the 2008 Wenchuan earthquake, coal mine accidents and issues surrounding environmental pollution caused by coal mining in her home province of Shanxi. In 2009, Chai quit reporting and took up a position as an anchor on popular CCTV current events talk show One on One. Chai finally resigned from her job with CCTV in 2014 following the birth of her

daughter. Under the Dome, named after a US TV series based on the novel by Stephen King, marks her return to the public eye.

Chai’s “Dome” is the smog that frequently obscures the sky above many places in China.

Under the Dome is presented in the format of a TED Talk, combining a lecture with computer animation embedded with graphical data and animation interspersed with recorded interviews. Chai’s film opens with a slideshow demonstrating the PM2.5 (units of particulate matter no more than 2.5 micrometers in diameter found in the atmosphere) curve for Beijing in January 2013, when the city experienced 25 days of unacceptable smog in a single month. Chai NEWSCHINA I May 2015

Photo by CFP

Chai opens her film with an impassioned account of her difficult pregnancy

discovered her pregnancy that same month, and seeing 25 provinces and cities in China blanketed by heavy smog at that time added to existing fears after her unborn daughter was found to have a benign tumor already growing on her body.

“I’d never felt afraid of pollution before, and never wore a mask,” says Chai during her presentation. “But when you carry a life inside you, what she breathes, eats and drinks are all your responsibility, and then you feel the fear.”

PM2.5 is widely accepted as being particularly hazardous to public health as it can penetrate the alveolus – the gas exchange region in the human lung. “I perceived smog NEWSCHINA I May 2015

through my daughter’s eyes,” Chai recalls, describing how her newborn daughter would be confined indoors on smoggy days, often slapping the window, as Chai perceived, to express her desire to play outside.

“This is a personal grudge against smog,” Chai tells her audience, adding that she made Under the Dome in order to answer three major questions – what is smog, where does it come from, and what should we do about it.

To back up her claims, Chai interviewed professionals from academic institutes in China and abroad, approached government think tanks, State ministries and environmental departments, took field trips to polluting factories and even former smog

hotspots like London and Los Angeles, where she looked at the history of industrial air pollution, and explored potential solutions possibly applicable to China.

Through the use of multimedia platforms, scientific data and interviews with researchers and government officials, the documentary identifies the wide usage of substandard and low quality fossil fuels and the lack of government supervision as the primary contributing factors to China’s smog problem. Chai calls for government action in regulating polluters, improving the enforcement power of relevant government departments and individual participation in combating pollution.

According to Chai, Under the Dome is also

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society

Photo by Wang Lei

an “answer” that she has been preparing for when her daughter grows up. Many attribute the power of Chai’s film to her willingness to place her family at the center of the project.

Response

Chai’s film premiered on the website of the People’s Daily, and swiftly inspired an unusually passionate public and mass media response. Soon, clips were circulating across China’s vibrant social media landscape, and Chai was being lauded by users of instant messenger WeChat and microblog site Sina Weibo for funding the project with her own money. Others singled out her bravery in being willing to speak out on issues such as the power of the State energy lobby and bureaucratic obstructions to cleaner air – problems which rarely gain prominence in official media coverage of pollution.

Indeed, Chai’s status as a concerned parent rather than a TV reporter was seen as helping her connect with a broad audience. Painting air pollution as a clear and immediate threat to all Chinese people, regardless of social status, Chai struck a chord that few celebritiesturned-activists have been able to. Actor Sun Yizhou commented on his microblog account on February 28: “Everyone watch.

Regardless of where you are from, whatever your social position, this is a fate that we must collectively face.”

“So profound! There has never been such a comprehensive dissection of PM2.5,” ran another Weibo post applauding Chai’s work.

While the praise was fervent, criticism also emerged as Chai’s film became increasingly ubiquitous. Some questioned the morality of Chai explicitly linking her daughter’s tumor to air pollution. Others accused her of being a lackey of the State, given the official support afforded her project by numerous government organs, particularly Party

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Chai Jing was formerly a news anchor for State broadcaster CCTV

mouthpiece People’s Daily Online. Peking University professor Wu Jing called the film a typical example of celebrities “promoting themselves” for commercial gain or to obtain public funding while masquerading as concerned citizens.

Some even accused Chai of hypocrisy for “pretending to care about China’s problems” even though she chose to have her baby delivered in the US. Others spread rumors that Chai was a smoker, and chose to drive a gasguzzling SUV. When most links to Chai’s film in its entirety were expunged from the Chinese Internet, however, much of this criticism subsided. In professional circles, environmental advocates, including China’s new minister of environmental protection Chen Jining, sent personal messages to Chai to thank her for raising public awareness of environmental issues. Nevertheless, certain scientists and industrialists pointed out factual inaccuracies in Under the Dome, while others accused Chai of singling out the coal and oil industries for attack while neglecting other major contributors to the pollution problem.

Ripples

The ongoing debate surrounding Under the Dome has come alongside a major lead-

ership reshuffle in China’s Ministry of Environmental Protection. Minister Chen Jining, a former president of Tsinghua University, even likened the documentary to Silent Spring, ecologist Rachel Carson’s landmark exposé of profligate use of synthetic chemical pesticides which helped inspire a generation of environmental activists in the 1960s.

The film’s release, which just preceded the annual gathering of the National People’s Congress and the Chinese People’s Political Consultative Conference, popularly referred to as the “Two Sessions,” was intepreted as a bid to have China’s smog problem become a leading item on an agenda dominated by the economy and the Party’s ongoing anticorruption campaign.

Despite being removed from most Chinese video sharing websites, the film’s social impact has already been felt in a number of fields. An environmental protection hotline mentioned in the film, which allows members of the public to notify the authorities of illegal emissions, was flooded with calls following the film’s release. Although this national hotline has existed since 2001, many have claimed that if it weren’t for Under the Dome, few members of the public would have known about its existence.

“The hotline does play an effective role in NEWSCHINA I May 2015

Photo by Liu Jiao/IC

A billboard is erected by real estate developer in Hubei, proclaiming “Chai Jing, we support you“ as part of an advertisement

supervising local environmental protection bureaus taking action to combat pollution,” Beijing resident Yan Yan, 35, told NewsChina. A passionate environmentalist, Yan has personally called the hotline on a number of occasions since 2005 to report air and water pollution issues in her community. According to Yan, all these cases were followed up on by her local environmental protection bureau.

According to Zhong Chonglei, head of the Beijing Environmental Monitoring Team, all calls made to the hotline are recorded and forwarded to relevant local departments within 24 hours, with a follow-up by government personnel also guaranteed.

On March 1, 2015 the Ministry of Environmental Protection also launched a new public WeChat account to allow users to upload photos and written descriptions of pollution, with all reports accessible to local authorities who can then inform users of any follow-up action taken.

Chai’s documentary has even been credited with helping boost the share price of many “environmentally friendly” companies.

On March 1, more than a dozen stocks in the fields of pollutant treatment, air quality monitoring and green technology saw huge increases, with several stocks jumping 10 NEWSCHINA I May 2015

percent or more to reach their daily trading limits.

Prospects

In her documentary, Chai Jing tells the audience how “smog” was once described by weather reporters as “fog,” with most ordinary Chinese citizens, herself included, barely noticing the horrendous air pollution blanketing their towns and cities. “Smog” as a concept only really entered the Chinese psyche in 2012, when the US embassy in Beijing publicized its PM2.5 monitoring data to indicate the local air quality. Under pressure from social media, the municipal government began to publish its own data, and a rash of record-breaking readings in recent years have turned smog into a national issue.

According to a report by the World Health Organization, it is estimated that 2.8 million of the premature deaths caused worldwide by air pollution in 2012 were clustered in China and the Western Pacific region. Statistics from China’s Health Ministry indicate an annual number of premature deaths due to air pollution of 350,000 to 500,000.

Zhang Jin, deputy managing editor with Caixin Media, commented that Chai’s delivery, not her source material, was what made

Under the Dome groundbreaking. “Frankly speaking, the content and viewpoint presented in the documentary are not new... [yet] its influence is much stronger than ours. We can only learn from Chai’s technique in delivering information.”

While air pollution was a leading topic of discussion in the State media in 2012 and in the first half of 2013, the Party’s national security and anti-corruption agenda soon took precedence, with coverage of environmental issues being softened or sidelined even as face masks and air purifiers rapidly become features of everyday life.

Action has, however, been taken. A new environmental protection law enacted on January 1, 2015 was hailed as China’s toughest environmental law yet. In late February this year, inspectors from the Ministry of Environmental Protection summoned mayors from two northern cities, urging them to crack down on violators of the national environmental law. However, grassroots activism, despite being showered with outward praise, remains unwelcome in the corridors of power. Days after Under the Dome was erased from China’s video sharing websites and online media outlets, minister Chen Jining called for “greater transparency” in the fight against pollution, and encouraged greater public participation in anti-pollution efforts.

Although Chai Jing’s efforts have kept the pollution debate alive, the fact that the same government supporters who gave her a platform have since attempted to mute her message shows that China’s political establishment remain sensitive to criticism when it comes from the general public. The long-term effectiveness of Under the Dome to engender real change on a national level will hinge primarily on whether or not Chai’s work can be rehabilitated into mainstream discourse.

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society

International Education

Egalitarian Elitism?

Will joint programs between China’s public high schools and foreign institutions help reform the country’s education system, or simply prove to be yet another privilege restricted to the children of the wealthy?

By Yang Di

“

I opted for the international department of a public senior high school in order to send my child to study abroad after graduation,” Zhu Li, a parent whose child is enrolled at Beijing’s 101 Middle School, told NewsChina. Her words were repeated almost verbatim by every other parent our reporter spoke to.

Nevertheless, the principals running the few Chinese public schools that can offer international programs are at pains to stress that they are not trying to establish prep schools for future overseas students. “International departments are a proving ground of senior high school education,” said Zhu Jianmin, principal of the Beijing No 35 High School. His colleague Ma Lize, chief administrator at the Second High School Attached to Beijing Normal University, agreed, telling NewsChina that his school’s international curriculum helps to “train talent with a global view.”

Since the scheme’s inception at select Chinese public high schools 10 years ago, the establishment of international departments is gaining popularity at a time when increasing numbers of Chinese nationals are obtaining degrees abroad. Standard curricula comprise three parts: key domestic high school courses, liberal arts and science disci-

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plines generally taught at foreign high schools, and language courses prioritizing TOEFL or IELTS training.

On the one hand, education authorities and policymakers hope to open a new door to globalization and reform in the Chinese education system. On the other, poor faculty availability, the rising expectations of parents and, above all, a chance to make money have, despite the stated intentions of administrators, effectively created academic boot camps for ambitious Chinese students and their parents.

Going Global

In 2003, the State Council, China’s cabinet, unveiled regulations on “Sino-foreign cooperative education” which indicated that joint programs could be set up in high schools if those schools obtained permission from provincial governments.

Shortly afterwards, a number of international programs were established in public high schools around the country. However, because of high tuition fees and low enrollment rates, these experimental departments were largely clustered around elite high schools in Beijing and Shanghai.

NEWSCHINA I May 2015

Photo by IC

A foreign teacher gives a lesson at Hangzhou No 14 High School, April 27, 2014

In 2010, the Ministry of Education released a ten-year outline for its national education reform and development agenda, which spurred schools at different levels to begin to engage in international cooperation and outreach, giving a significant nationwide boost to China’s international education program.

According to data from the 2014 Report On Study Abroad published by the consultancy firm China Education Online (EOL), Beijing was home to 22 international departments at 17 public high schools by the end of 2013, up from nine in 2009. Enrollment, meanwhile, had risen from 440 to 1,355 students.

According to current regulations, with the exception of compulsory or sensitive disciplines including military and political studies, China’s academic institutions can apply to provincial or municipal authorities for permission to establish Sino-foreign joint programs. Generally speaking, after 15 percent of the program’s starter capital is secured, together with formal government approval, joint programs can begin recruiting students.

“Studying overseas is easier than expected,” said Zhu Jianmin, adding that as the United States alone is home to over 4,000 universities, NEWSCHINA I May 2015

the ongoing enrollment rate for many Chinese high schools was close to 100 percent.

“Roughly 80 percent of my colleagues are planning to send their children to study at international departments of public high schools before applying for undergraduate programs overseas,” said Zhu Li, who works for a foreign company in Beijing.

According to the “Chinese Mass Affluent Report 2013” released by Forbes China, the country is home to 2.7 million citizens categorized as “middle class,” with assets ranging from US$100,000 to US$1 million – of whom three fourths are planning to have their children educated overseas.

For these affluent parents, international programs at public high schools are an appealing stepping stone. Compared to international schools, they enroll both foreign and Chinese nationals, generally charge lower tuition than private institutions, and tend to have a smaller faculty and student turnover. What’s more, most public high schools with the ready capital to open international programs are already well-regarded and enjoy watertight funding.

An Ying, assistant principal at the Beijing No 4 High School, told

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Photo by CFP

society

A student walks by posters promoting study abroad at an international education fair

NewsChina that her school’s international programs were introduced after it was noted that a growing number of graduates chose to study abroad. According to An, from 2009 to 2010, more than 30 graduates from the school left China to study abroad each year, a number which was growing steadily as time went by. During a public information session on its international programs in 2013, the school’s 250seat hall was crammed with more than 400 people.

Chen Zhiwen, editor in chief of EOL, told NewsChina that when international programs debuted in the country 10 years ago, good results in prospective students’ high school entrance exams were not a major entry requirement, and virtually any child could be admitted as long as the parents were willing to pay. Growing demand in recent years has, however, seen entry requirements become much more exacting.

Intermediaries

When selling a school to parents, so-called joint programs have

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proven to be a major selling point for international departments at senior high schools, but the truth is that with the exception of high schools affiliated to Peking and Tsinghua universities, along with the independent Shanghai and Shenzhen High Schools, all 86 remaining international programs at public high schools approved by the Ministry of Education were established with the help of intermediary agencies.

These agencies design curricula, recruit foreign teaching staff and seek overseas partners for Chinese high schools. One insider speaking on condition of anonymity revealed that the so-called “cooperation” that many Chinese institutions arranged with some overseas partner schools was simply window-dressing designed to secure approval from education authorities.

Yin Jia, a former education officer with the US Embassy in China, told NewsChina that a number of US high school principals have complained to him that, every few days, they will receive emails seeking cooperation from China, but that most of these communications NEWSCHINA I May 2015

come from commercial intermediaries rather than the schools themselves.

One particularly well-known go-between is Dipont Education, which opened for business in 2002. So far, Dipont has partnered with 29 storied high schools in China, establishing 36 international programs. NewsChina tried to secure an interview with the company but our request was declined, with a representative claiming that Dipont does not give media interviews.

An employee at a Beijing high school, also speaking on condition of anonymity, told NewsChina that, generally speaking, an international program’s running costs typically account for 40 percent of tuition fees paid to the relevant high school, with the remainder divided between the school administration and its intermediary agency.

Average tuition fees at higher-end Chinese public schools range from 80,000 yuan (US$12,720) to 200,000 yuan (US$31,800) per year in Beijing and Shanghai, and are slightly cheaper in second-tier cities. These fees are often bumped up by additional charges for IELTS and TOEFL courses, study tours and consulting fees. Chen Zhiwen estimated that the average tuition paid by a Chinese student pursuing an international program could easily hit 450,000 yuan (US$71,550).

Chen added that intermediary agencies undoubtedly boost both the efficiency of joint programs and the internationalization of China’s high schools. However, he also warned that the job security of foreign faculty was a major issue, as most teaching staff can only sign a one-year contract, meaning a high staff turnover that could potentially disrupt learning.

He Daoming, assistant principal at the Affiliated High School of Peking University, told NewsChina that whether or not the curriculum and faculty provided by intermediary agencies are of sufficient quality, they remain commercial enterprises.

“What motivates them [intermediary agencies] to dip their toes in international programs is pure profit,” he said.

Challenges

Zhu Jianmin told NewsChina that a number of so-called international programs at Chinese high schools simply lump domestic and international curricula together.

“For example, on Monday, math is taught by a Chinese teacher but then, on Tuesday, it is taught by a foreigner. Half of Tuesday’s content is probably the same as Monday’s, which is a waste of teaching resources and dampens student morale,” he said.

Zhu added that, for many parents, curricular standards are not NEWSCHINA I May 2015

a major concern – what they are focused on are TOEFL and SAT scores, and a school’s enrollment rates with overseas universities that they themselves have heard of.

A high school principal who declined to be named said that TOEFL or SAT training courses had become compulsory at his school. “Student satisfaction is our mission, and to help [students] achieve better exam scores is what high schools should do,” he said.

In many cases, the curriculum used in some high schools has been tuned to meet undergraduate entry requirements at universities in a target country. Specifically, Chinese students who intend to study in the United Kingdom will focus on A-level courses, while US-bound students would study equivalent AP disciplines. Some high schools also provide an IB curriculum for students hoping to study in the EU. He Daoming said the introduction of foreign curricula was not always suitable for Chinese students. He found that, for many parents, AP scores are simply a means to an end for parents who have little interest in the content their children are absorbing.

EOL’s 2014 Report On Study Abroad showed that among the 22 international classes offered in public high schools in Beijing, at least seven curricula were in use, with AP courses accounting for 63.6 percent of content.

In November, 2014, Alex McGrath, head of the UK-based King’s Ely independent school, said during a roundtable meeting on SinoUK elementary and high schools held in Guangzhou that many Alevel courses provided by Chinese high schools failed to instil the breadth of knowledge demanded by admissions authorities at UK universities.

For the past 10 years, controversies surrounding international classes in China’s public high schools have abounded. One major criticism is that these schools’ high tuition fees run contrary to the welfare status of national public education. Growing inequality in China’s nominally centralized education system is also of concern to analysts and policymakers.

In March 2014, Beijing’s Education Commission announced that the agency would no longer approve new proposals for international programs at public high schools in the city. Several provincial governments across the country including in Zhejiang, Anhui and Jilin provinces also withdrew the right to approve such programs from their local branches.

Ji Zhiwei, Party Secretary of the Beijing Film Academy, said that China’s education authorities should be cautious in approving the so-called international programs at public high schools, and instead restrict such programs to the private sector.

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German Finance Minister Wolfgang Schaeuble (right) and Chinese Vice Premier Ma Kai at a joint press conference in Berlin, March 17, 2015.

Germany has since joined the AIIB, along with other major European economies

Photo by CFP

SPECIAL REPORT

AIIB

A Genuine Game-changer

When the UK ignored the special relationship and threw its weight behind the China-led Asian Infrastructure Investment Bank on March 12, it secured the future of a project crucial for Beijing’s longterm goals

By Shirong Chen & Rowan Williams

H

istorians may call March 2015 a watershed for China, and the rest of the world.

After more than three decades of Reform and Openingup, China has won the support of major Western powers as well as its Asian neighbors to transition from “apprenticeship,” where it plays by the rules of a game set by others, to “leadership,” which empowers Beijing to set its own rules. The UK, meanwhile, has defied its closest strategic ally and emerged as one of China’s strongest supporters in the West.

Business or Politics?

Six years after the Great Recession began, China’s efforts to establish the Asian Infrastructure Investment Bank (AIIB) have unleashed a political storm. While a multilateral investment platform designed to more efficiently develop Asia’s infrastructure is welcome, and long overdue, suspicion and opposition from Washington has kept many US allies at bay, until March.

Indeed, when 21 mainly Asian countries signed a memorandum to form the AIIB in Beijing on October 24, 2014, three crucial players were absent: Australia, South Korea, and Japan, the three major US

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strategic allies in Asia.

The US ostensibly trumpeted the transparency of financial institutions such as the World Bank and the International Monetary Fund, intimating that the newly created AIIB would fail to meet the high standards required of an international lending bank. US Assistant Secretary of State for East Asian and Pacific Affairs Daniel Russel, said that it was “up to each individual country” whether or not they would join, but also reiterated US calls for “high standards.”

Many have pointed out that the real motive behind Washington’s opposition is concern that the AIIB would be competing directly with both the US-led World Bank and the Asia Development Bank, and that China would use its new “tool” as a soft power channel.

The UK, which found itself rebuked for signing up to the AIIB, has been a major beneficiary of China’s rise, with bilateral trade doubling in the past few years, to reach a projected US$100 billion by the end of 2015. The UK government has plans to turn London into the biggest European offshore market for the Chinese yuan, and has become the first country to issue yuan-backed treasury bonds, some US$500 million at the last count.

In short, London has every reason to exploit opportunities created NEWSCHINA I May 2015

What is the AIIB? by the AIIB. Even though a formal charter is still to be negotiated, the China-led AIIB will exist mainly to fund Asian energy, transport and infrastructure projects.

Britain’s decision to be the first European nation to throw its weight behind the project, overruling the misgivings of its own Foreign and Commonwealth Office, gave it a crucial early bird advantage.

It’s worth noting that the UK has a wealth of experience in establishing financial infrastructure and dealing with overseas development. By offering the considerable resources of the City of London to the AIIB, the UK’s membership will likely benefit all concerned, though its support for a China-led multilateral development project has come at a price.

The UK’s move clearly wrong-footed the United States, prompting an unusually frank rebuke from Washington, accusing the UK of “constant accommodation” of China. However, the ball was already rolling, and Europe’s two biggest economies – France and Germany – soon followed London’s lead. After staunch US ally South Korea announced its decision to join the bank, Australia, which had previously been publicly lukewarm towards the project, also signed up.

Both the IMF and the Asia Development Bank have now voiced their readiness to cooperate with the AIIB. US Treasury Secretary Jacob Lew has also made a visit to Beijing and confirmed that the US “looks forward” to working with the AIIB.

Name: Asian Infrastructure Investment Bank, or AIIB, an Asia-focused inter-governmental lending bank

New Phase

countries, including India, Thailand, Singapore and Indonesia, had joined. On March 12, the UK became the first major Western country to announce its application for membership, quickly followed by France, Germany, Luxembourg, Italy, Switzerland, Austria, the Netherlands, Denmark and Finland. Australia and South Korea signed up just before the application deadline in late March, while Russia and Brazil have also applied for membership.

China’s triumph is testament both to its economic clout and its increased prominence on the international stage. If three decades of Reform and Opening-up have enabled the country to seize the development opportunities presented by globalization, then the establishment of the AIIB marks the beginning of China’s transition from rule-follower to rule-maker.

China has spent decades observing and integrating itself into international norms.

Now it needs to improve and innovate on what has gone before. For the first time in its modern history, China is combining diplomatic and economic strategies designed to take the country further along a development path that can incorporate US strategy in the Asia-Pacific region and accommodate its own “new normal” of slowing domestic growth.

On the same day that Chinese President Xi Jinping gave his keynote speech at the Bo’ao Forum for Asia, with the theme “Asia’s New Future – Towards a Community of Common Destiny,” China published its official road map for its One Belt, One Road initiative – re-establishing a new overland Silk Road economic belt through Central Asia to Europe alongside a 21st century Maritime Silk Road linking Asia’s key maritime trading hubs.

With a growing war chest of foreign exchange reserves to draw upon, China, increasingly frustrated by the restrictions imposed by other international financial platforms, set up the BRICS Development Bank in 2013, created the AIIB in October 2014, and announced its Silk Road Fund of US$40 billion in November 2014. The latter two institutions will be crucial to China’s realization of its grand economic plan, although, for now, they remain supplementary to the existing world order, with the actual rule-making yet to come.

It may be premature to declare what Joseph Stiglitz termed “the Chinese century,” but China certainly has the desire and capacity to re-draw the global trade map along its own lines. The global financial crisis exposed the inherent limitations of US- and Eurocentric capitalism, and the inherent weaknesses inside the global financial system. Will China be able to engender deep enough reform to produce a new paradigm?

What is certain is that more than 40 countries have now signed up to join the AIIB. When it comes to money, it seems, China has no shortage of eager partners.

NEWSCHINA I May 2015

HQ: Beijing, China Founded: First proposed by Xi Jinping on a

state visit to Indonesia in October 2013, a formal signing ceremony in Beijing almost exactly one year later marked the official establishment of the bank. The AIIB will likely approve its first loans in 2015.

Capital: Initially US$50 billion, expandable to US$100 billion, half of which will come from China.

By way of comparison, the World Bank currently has US$220 billion of available capital, while the Asian Development Bank has US$175 billion.

Members: 44. Before March 2015, 21 Asian

Controversy: The UK’s announcement that it would be a founder member of the AIIB resulted in a rare rebuke from Washington, accusing London of “constant accommodation” of China. Analysts have suggested, however, that Britain’s declaration paved the way for other European nations to throw their support behind the bank. In addition, key US strategic allies in Asia – Australia, Japan and South Korea – were initially dissuaded from joining, but both Canberra and Seoul had reversed their stances before the application deadline. Tokyo, meanwhile, looks unlikely to change its position.

Advantages: The AIIB gives Beijing a muchneeded outlet for its considerable forex reserves and a means of reducing its trade surplus, while also serving as a “soft power” tool. Some have called the bank’s successful establishment as a major blow to US and European dominance in international finance.

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SPECIAL REPORT

AIIB

We Must Open Our Minds to a China-led Bank The positive aspects of the Asian Infrastructure Investment Bank far outweigh the negatives highlighted

by Washington. A more nuanced understanding of international relations is required

By Kerry Brown

W

hat was the motivation behind the Chinese government’s decision to establish an investment bank along with 20 other Asian partners late last year?

If Beijing’s goal was to deliberately sow disarray among the US and its allies, then it has certainly succeeded. The creation of the US$100 billion Asian Infrastructure Investment Bank (AIIB), which will derive half its

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initial capital from China, has struck some as China’s defiant answer to the US-led World Bank, which is typically headed by an American. The AIIB is the competition, so the narrative from some officials and analysts in Washington has run: a means through which China is trying to edge in on global financial systems, and set its own rules and norms at the expense of others. This story would have the world believe that the AIIB is part of a

wider Chinese plot to secure global influence.

Scepticism and suspicion regarding the AIIB was of course to be expected. Developed countries – the US in particular – have long been uncomfortable with what they feel to be China’s desire to revise and redraw global rules of financial governance and regulation. But, examining the facts, it is hard to objectively conclude that China desires to wield this sort of influence.

NEWSCHINA I May 2015

On the whole, academics studying China’s participation in the global system have found that, internationally at least, China has tended to be a rule follower, signing up to fiscal discipline regimes that it can use to enact domestic reform. Take China’s induction into the World Trade Organization in 2001, for example: while China might argue fiercely for rule adaptations and modifications before joining a governing body, in the economic realm at least it tends to observe the rules of an institution once it has joined it. No one would say that China has not faithfully complied with the bulk of its WTO obligations, for instance.

Nonetheless, the AIIB was met with a cool reception by many in the West, as well as by some of China’s neighbors. Australia, one of the key players in the region the bank will presumably be active in, was at first positive. After a few alleged late-night calls from Washington last November, however, Australian Prime Minister Tony Abbot distanced himself from the scheme. Japan and South Korea, major players in the region, have also kept the AIIB at arm’s length, with South Korea only declaring its application for founding membership at the eleventh hour. With the US leaning on its allies to avoid the bank, a united Western front of wariness was established.

As the AIIB sign-up deadline drew near, however, that front was shattered by the UK, who surprised many when it announced on 12th March this year that it intended to join the AIIB. France, Germany, and Italy all followed suit shortly after. The US responded with a rare rebuke to the UK government. Was this breaking of ranks the sign that, at least on policy towards China, the world was witnessing a major division?

The UK is often regarded as Washington’s closest ally – indeed, the Special Relationship is sometimes seen as Whitehall’s almost slavish adherence to White House policy on diplomatic issues.

In fact, for all their concert in other areas, the UK and the US have rarely been unified in their approach to the People’s Republic. Its interests in Hong Kong led the UK to recognize the People’s Republic in 1950, many decades before the US established diplomatic ties. The NEWSCHINA I May 2015

UK government had representation in Beijing from the early 1950s – the US held out until the mid-1970s. In 2004, under then British Prime Minister Tony Blair, the UK supported an initiative in the EU to lift a 15-year arms embargo on China, though this initiative soon fell to US pressure. The UK’s attitude towards the AIIB is, therefore, not as uncharacteristic as some would paint it. It is a continuation of a long-standing streak of independence, particularly in the realm of commerce.

However, what can be seen from Washington’s rebuke, and from its general opposition to the bank, is that in the instance of the AIIB, the US instinct was to react with its heart, not its head. When allies as fervent as the Australian Foreign Minister Julie Bishop and the British Chancellor of the Exchequer George Osborne – both of them regarded as pro-American – support membership of the AIIB, then the US needs to revisit its initial hard-line attitude. Even in Washington, opposition to China’s banking ambitions is not universal. Treasury Secretary Jacob Lew testified to Congress on March 18 that continuing to block or prevent China’s access to greater voting rights in the IMF was ultimately not in the interests of the USA. Instead, it was causing China to become disengaged with the IMF and seek its own path. Such behavior is in no one’s interests. America needs to listen to its friends and consider the advantages of the AIIB with an open mind.

For a start, the growing demand for infrastructure in Asia cannot be ignored. From the most distant islands of Indonesia to the Mongolian steppe, there is an immense need for new roads, high-speed rail, airports, and port facilities. The AIIB can provide a new way of dealing with the immense investment opportunities such infrastructure challenges present. The idea that the International Monetary Fund, or the World Bank, or the Asia Development Bank should have sole responsibility for trying to meet these demands is unrealistic. There are limits to their various mandates, and to their available capital.

There is plenty of space, therefore, for a new player. And what is wrong with a bit more competition?

Add to this the fact that this is an initiative set up for Asia, in Asia, by Asians. That

local support matters. After all, these are the countries best placed to decide what they need, and how they want to go about achieving it. Having more local input over investment decisions surely makes sense. Finally, there is the opportunity the UK spoke of after it announced its intention to join the AIIB. The British government argued – quite rightly – that it is better to be on the inside, influencing the governance and regulation of the AIIB, than to sit helplessly on the outside unable to do anything about decisions it disagrees with if and when they arise.

One final point. For all the media speculation of a new Cold War, it is hard to imagine during the USSR’s prime that an argument would break out over its founding of an international investment bank. The very fact that China is promoting an idea like the AIIB, and winning broad support, shows that it has accepted key tenets of the current global system. All China is trying to do is find a place where it has a stronger voice for itself and its own interests. It would be odd for any growing nation to do otherwise. The priority now, for those who have joined up to the AIIB, is to find the best ways of implementing operations, and make sure that it does what it proposes to do in a sustainable, fair and well-governed manner.

There is a larger lesson here. It is tempting to see growing Western approval for the AIIB as a sign of some grand realignment.

But dividing the world into a US zone of influence and a Chinese one is way too simplistic. The interests of the US and China regularly overlap, with plenty of blurred edges. The same can be said of all countries involved, where interests are split in different areas and in different ways: siding closer to the US on some issues and with China on others. The quicker we move away from the current Manichean view of international relations and accept a more complex, nuanced understanding, the better things will be for all. Kerry Brown is professor and Director of the China Studies Centre, University of Sydney, Team Leader of the Europe China Research and Advice Network, and Associate Fellow of Chatham House, London.

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international

Prince William

A Royal Mail The Duke of Cambridge’s recent visit helps further exploit already strong business and cultural ties between the UK and China. However, whether Xi Jinping’s upcoming state visit will iron out some remaining political wrinkles will be down to the politicians, not royalty

By Li Jia

W

hen asked about how he felt about the film Paddington, a six-year-old boy began to excitedly describe how the smart bear and the Brown family finally thrust the villainess Millicent (played by Nicole Kidman) off the roof of the Natural History Museum in London.

“My son was so worried about the little bear that he kept clinging to my hand,” the boy’s mother, Wang Li, told NewsChina outside a movie theater in Beijing on March 6, 2015.

“I am very pleased to see my son moved by stories about love between humans and nature.” Wang added in a follow-up interview that, since watching the film adaptation, she had bought a copy of the original book, and that her son loves it.

Wang Li was not just another parent taking her child to a movie. She is secretary general of the Beijing Institute of Children’s

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Growth by Nature, an educational research enterprise. Wang told NewsChina that she hopes more inspirational British cultural products beneficial to children’s education can be brought to China. The Natural History Museum itself, with its more than 130 years of history, is also a draw to Wang and her family, and now plans are being laid for a vacation to London in the near future.

A small victory for British soft power in a major focus market for UK companies. Like most ordinary Chinese, however, Wang Li’s family were more familiar with David Beckham than Prince William, who attended the China premiere of Paddington. Indeed, it was simply the syllable “ding” in the titular Peruvian bear’s name (her husband and son have the surname Ding), and not the movie’s marketing campaign nor its British origins, that drew Wang Li to the movie theater.

However, as illustrated by the feedback from the Ding family, the purpose of Prince William’s goodwill mission to China was well served by his association with a British hit movie, as were the other cultural, sporting and social engagements scheduled for the first British royal visit to China in nearly 30 years.

In terms of soft power alone, David Beckham would likely have been a bigger draw than the Duke of Cambridge. In terms of diplomacy, however, the grandson of Queen Elizabeth II is a shrewd choice of ambassador.

Prince William arrived with a formal letter of invitation for Xi Jinping, welcoming China’s president on a state visit to the UK. According to the concurrent press release issued by China’s Foreign Ministry, he returned home with a pledge from Xi to “jointly blueprint China-UK relations with UK leaders.”

NEWSCHINA I May 2015

Photo by ic

Prince William takes part in a Premier Skills football coaching session at Nanyang High School in Shanghai, March 3, 2015

The royal visit itself took place when bilateral economic ties are developing fast and political relations are on an even keel. The invitation from Queen Elizabeth II also comes at an opportune moment, as the new “UK leaders” Xi will likely meet on his visit have yet to be elected, or re-elected, in one of the UK’s most closely contested general elections in a generation. Any negotiation of political divisions between the two countries will be left to that crucial visit.

Soft Sides

A huge flow of money underwrites the strongest aspect of China-UK relations, and Prince William’s visit is set to further consolidate this. UK Trade and Investment (UKTI) estimated that Chinese investment worth some 150 million British pounds (US$220m) is currently being pumped into

NEWSCHINA I May 2015

the UK economy. At the GREAT Festival of Creativity, launched by the Duke of Cambridge in Shanghai, a range of deals were unveiled including joint film and TV production, the marketing of traditional Chinese medicine (TCM) in the UK, establishment of direct flights between Beijing and Birmingham, the Royal Mail’s first China shopfront on Alibaba’s Tmall platform and the opening of a Chinese insurance broker in the UK. British exports to China have more than doubled since 2010, according to figures released by the UK government.

The two countries hope to increase total trade revenue to US$100 billion this year, up from US$80 billion in 2014. As President Xi mentioned in his meeting with Prince William, Britain has become a major destination for Chinese investment. Indeed, the UK is recognized as more open to Chinese invest-

ment in certain sensitive areas than many other economies, welcoming Chinese money in telecommunications, property, nuclear power and high-speed rail. In August 2014, the UK became the first Western economy to make the Chinese yuan one of its foreign exchange reserve currencies, a significant step thought to reinforce the City of London’s leading role in international finance and push forward the internationalization of the Chinese currency. Recently, Britain decided to join the Asian Infrastructure Investment Bank, a Chinese initiative, with other developed countries quickly following suit.

On the Chinese microblog account of the British Embassy in Beijing, a poll asking netizens which British “star” should accompany Prince William on his visit attracted more than 1,500 responses, with many asking if the Duke of Cambridge could ask for a new

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Photo by ic

international

Photo by ic

The Duke of Cambridge at an event at the British ambassador’s official residence in Beijing to mark the 2015 UK-China year of cultural exchange, March 2, 2015

Prince William is escorted by Chinese officials on a tour of the Forbidden City, Beijing, March 2, 2015

Elephants, a UK conservation NGO, called upon Xi to “end all ivory trade in China.”

Prince William made the same request while visiting an elephant sanctuary in Yunnan Province, the last stop on his China trip and a pointed choice of destination. The prince also raised the issue of wildlife protection in his Beijing meeting with President Xi. Right before Prince William’s arrival in Beijing, China announced a one-year ban on all ivory imports.

Prince William’s quiet manner and willingness to push a largely apolitical agenda focusing on conservation and the environment, mixed with his interest in Chinese culture, impressed the Chinese media and the public, with many casting him as a conscientious British royal “gentleman” performing his duty and boosting cultural and business exchanges, which bodes well for his future as the British sovereign.

William also steered clear of the gaffes that marred earlier visits by his father and grandfather. On Queen Elizabeth II’s state visit to China in 1986, her consort Prince Philip remarked to some British students that if they stayed in China too long, they would get “slitty-eyed.” Then, in 1997, after attending the handover ceremony of Hong Kong to China, Prince Charles described Chinese officials as “appalling old waxworks” in a private journal which was later leaked to the media.

Hard Edges season of Sherlock, or bring Thor star Tom Hiddleston on his trip, proving Britain’s disproportionate cultural clout in China’s entertainment sector.

Prince William’s visit may also improve relations in less savory economic areas. Growing demand for ivory from China’s increas-

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ingly affluent population, which has led to a boom in poaching in Africa, has turned China into a target for international concern and criticism from conservationists and the UK public. In an open letter to Chinese President Xi Jinping published a few days prior to Prince William’s trip to Beijing, Action for

Political ties between London and Beijing have been rather more volatile than trade relations, and a royal visit, purged of politics in line with William’s constitutional role, does little to dismiss lingering shadows and uncertainties. However, William played an important symbolic role in communicating his grandmother’s state visit invitation directly to the Chinese head of state.

NEWSCHINA I May 2015

NEWSCHINA I May 2015

Photo by ic

Military exchanges send even more important political signals. In December 2013, HMS Daring, the first of the Royal Navy’s six type-45 destroyers and one of the most advanced of its kind in the world, docked in Shanghai’s port. CO Angus Essenhigh expressed his hope that “infrequent” visits like that of his command would lead to “many such interactions.” However, earlier that same month, during a visit by British Prime Minister David Cameron to Beijing, Admiral George Zambellas, First Sea Lord, met with Itsunori Onodera, Japan’s defense minister, in Tokyo, where he reportedly expressed support for Japan’s stance on China’s establishment of an Air Defense Identification Zone over the East China Sea. In response, the English-language version of China’s Staterun Global Times questioned the “sincerity” of Cameron’s overtures in Beijing.

Cameron’s visit was at the time seen as an “ice-breaking” exchange, a view echoed in media coverage in both countries. In May 2012, Cameron met formally with the Dalai Lama who remains accused by China of advocating Tibetan independence. Diplomatic relations nearly froze at the time and were not restored until his visit in December 2013, moved forward from April at the request of Downing Street. British media reported that a promise not to meet with the Dalai Lama had been obtained by Beijing before Cameron could depart for Beijing. When Chinese Premier Li Keqiang visited London in June 2014, where he met with Queen Elizabeth II, it seemed that relations were back on track.

In January 2015, Chinese naval vessels made their first visit to the UK in seven years after a mission in the Gulf of Aden and off the Somali coast. China’s ambassador to the UK Liu Xiaoming said during a press conference at the Royal Navy’s Portsmouth base that this visit by some of the Chinese navy’s best hardware was a “good beginning” for

Prince William is served local specialties on a visit to Mengman, Yunnan Province, March 4, 2015

interactions between the two militaries, adding that more high level military exchanges would be arranged later in the year. In Beijing on March 9, Chinese Foreign Minister Wang Yi told Barbara Woodward, London’s new ambassador to China, that President Xi’s upcoming visit to Downing Street would be on top of this year’s bilateral diplomatic agenda.

However, Hong Kong has once again emerged as a source of contention, particularly since the eruption of protests which effectively halted business in the territory’s Central financial district in September and October 2014. The British government and Parliament have repeatedly shown their support for the demands of Hong Kong for free and direct elections for the city’s Chief Executive in 2017. Beijing responded with accusations of foreign intervention in its internal affairs, and warned that Britain had “no

responsibility” for Hong Kong. The most recent barbs were exchanged just days before Prince William’s visit.

These political frustrations between them will likely be complicated in the event of political fragmentation of the UK following the general election in May 2015. No one knows whether and how these lingering frictions will affect Xi’s trip to London, if at all.

Prince William has done his job as both a royal emissary and a cultural ambassador. It is now up to politicians on both sides to do the complex diplomatic work. However, an appearance by Prince William on the dais at the state banquet for Xi which will be held by Queen Elizabeth at Buckingham Palace will likely go some way to repair the damage done when his father snubbed a similar banquet held in honor of former President Hu Jintao in 2005. 

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international

Myanmar Conflict

A Diplomatic Dilemma

With the escalation of ethnic conflict close to its border with Myanmar, China finds itself in an awkward position between its strategic interest in closer ties and mounting domestic pressure to toughen its position on security

By Yu Xiaodong

S

ince armed clashes between government forces and ethnic insurgents in Myanmar’s Kokang region broke out in midFebruary, conflict has raged for more than a month along the country’s border with China.

The violence spilled across the border in March as jets from Myanmar entered Chinese airspace and dropped several bombs on farmland in Yunnan Province, killing five Chinese nationals. The incident has further contributed to mounting pressure on the Chinese government to intervene to forestall further collateral damage. However, given the strategic importance of Myanmar in China’s global strategy, and with the US playing a “curious” role in Myanmar, China may have to uphold its official policy of non-interference.

China’s Crimea?

Compared to earlier ethnic conflicts near the Chinese border with Myanmar, such as the Kachin uprisings in late 2012 and early 2013, a major difference of this recent conflict is that it is taking place in a region home to 200,000 Kokang, an ethnically Chinese minority group with a total population in Myanmar of around 1 million.

The conflict began when the leader of Kokang’s Myanmar National Democratic Alliance Army (MNDAA) led by Pheung Kya-Shin, who also goes by the Chinese name Peng Jiasheng, launched attacks on government military bases at Laukkai, the regional capital. Pheung was forced out of power after a ceasefire agreement between the MNDAA and the government expired in 2009.

After briefly taking control of Laukkai, MNDAA forces quickly retreated, with government troops in pursuit. In the following month, clashes continued throughout the Kokang region.

Throughout the uprising, Pheung has consistently appealed to the Chinese public to support their “compatriots in Kokang” through the Internet and the mainstream media. In one video addressed to the Chinese public, the 84-year-old, who speaks fluent Mandarin, urged the Chinese people to support his cause. Taking advantage of China’s unease regarding the US’ strategic intentions in the region and a rising tide of nationalism among the Chinese public in recent years, Pheung portrays the Myanmar mili-

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tary’s control of Kokang as serving America’s strategic interests as part of a broader China containment policy. Pheung even allowed some Chinese media outlets, such as the nationalist Global Times, to conduct immersion reporting among its troops.

The strategy appears to be working. Pheung’s appeal, and his claims that the Kokang are treated as second-class citizens by Naypyidaw, has elicited sympathy among the Chinese public for his insurgency. Denied national IDs, ethnic Kokang have no freedom of movement within Myanmar’s borders despite the government taking control of the region in 2009.

This has led some media commentators to describe Kokang as “China’s Crimea.” But for most Chinese experts, such a comparison is a leap too far.

According to Sun Yun, a fellow with the East Asia program at the Henry L. Stimson Center and a non-resident fellow with the Brookings Institution, other than a complex ethnic makeup, there is little similarity between Kokang and Crimea.

“For China, the strategic importance of Myanmar significantly outweighs China’s interest in its border ethnic groups,” Sun commented, adding that Myanmar not only protects key cross-border natural gas pipelines, but also serves as a critical link in China’s One Belt, One Road strategy (both Beijing’s hallmark Silk Road Economic Belt and 21st Century Maritime Silk Road initiatives necessitate Myanmar’s involvement), as well as a priority country in China’s “periphery diplomacy.”

The fact that Pheung, leader of the Kokang insurgency, has a long history of switching allegiances between various political factions, has also led many experts to warn that his fight is more about gaining political capital for his own group rather than supporting the interests of the Kokang.

According to Sun, the Chinese government has explicitly rejected the idea of supporting the Kokang insurgency. Even the Global Times, which has run a number of sympathetic reports on the Kokang fighters, published an editorial in February supporting the continuation of China’s “hands off” policy.

Escalation

However, as China and Myanmar share a 2,200-kilometer border in a region characterized for millennia by broad ethnic mixing, China may NEWSCHINA I May 2015

Photo by ic

A Chinese soldier stands guard in Nansan town, Lincang city, Yunnan Province, near the border with Myanmar, February 16, 2015

struggle to keep itself out of the conflict. On the one hand, China aspires to have a closer relationship with Myanmar, but on the other, China is deeply concerned about border security, particularly a large-scale influx of refugees into Yunnan Province. According to China’s Foreign Ministry, by March 7, 2015, more than 60,000 refugees had entered China since the Kokang conflict began.

China’s position on Myanmar’s ethnic conflicts has remained consistent; Beijing has called for peaceful negotiation and a sincere attempt to find a political solution, in some cases even facilitating negotiations between the Myanmar government and ethnic insurgents.

Analysts believe that after failing to regain control of the Kokang region, a major goal of the latest insurgency is to force the Myanmar government to recognize the MNDAA’s status in broader negotiations with other ethnic rebel groups, including the Kachin, the Karen and the Rohingya. After defeating the MNDAA in the 2009 Kokang conflict, the Myanmar government ended recognition of the group in its negotiations with other ethnic insurgencies.

According to a report by Chinese online news portal Sina.com, after the recent conflict broke out, China proposed that Naypyidaw recognize the MNDAA’s political status in its negotiations with ethnic groups, a request which was rejected by Myanmar, signaling impatience with both the country’s insurgent groups and China.

For Myanmar’s military, which enjoys a clear numerical and technological advantage in all the country’s ethnic conflicts, China’s advocacy of peaceful negotiation seems to favor the insurgents, especially as the country has provided a safe haven for former ethnic fighters masquerading as refugees – many of whom later return to the front lines.

In addition, concerns over cross-border fire have also constrained the ability of Myanmar’s armed forces to pursue fleeing insurgents, giving a tactical advantage to their enemy. It is reported that various armed ethnic groups have stationed their command centers near China’s border, in some cases less than a hundred meters away, to discourage airstrikes by Naypyidaw.

In late February, Myanmar officials openly accused Chinese authorities NEWSCHINA I May 2015

of supplying the Kokang rebels with weapons and supplies, a claim denied by both Beijing and the insurgents themselves.

However, as clashes have continued, the Myanmar military appears to have become increasingly impatient. In early March, Burmese jets strayed into Chinese airspace and dropped ordnance on several occasions. Then, on March 12, 2015, bombs dropped by a Burmese jet hit a Chinese sugar cane plantation, killing five and wounding seven Chinese nationals, which immediately led to accusations that the People’s Liberation Army (PLA) was failing to protect Chinese citizens.

In response to mounting public pressure, the PLA Air Force swiftly dispatched fighter jets, helicopters, and anti-air missile platforms to the region, while Fan Changlong, vice chairman of the Central Military Commission, made an urgent call to Min Aung Hlaing, commander-in-chief of Myanmar’s armed forces, requesting that Myanmar investigate the incident and punish those responsible.

After initially denying that its air force had participated in the aerial bombardment, instead claiming that the Kokang rebels should be held responsible, Naypyidaw admitted in a statement released on March 17, 2015, that “harm had been done” to China, though the statement stopped short of admitting responsibility.

American Dreams

As the relationship between China and Myanmar has been strained by the cross-border conflict, many have placed present tensions within the context of the ongoing regional rivalry between the US and China.

Shi Yongming, an associate research fellow with the China Institute of International Studies, suggested that the US has played a “curious” role in Myanmar’s ethnic conflicts. Shi pointed out that, just before the outbreak of the Kokang conflict at the beginning of 2015, the US sent a delegation to Myanmar, including Assistant Secretary of State for Democracy, Human Rights and Labor Tom Malinowski, Deputy Assistant Secretary of Defense Thomas Harvey and the Deputy Commander of the US Pacific Command Anthony Crutchfield.

The fact that Crutchfield paid a visit to Myitkyina, capital of the Kachin State in north Myanmar, a major ethnic region and a principal source of unrest since a long-dormant Kachin insurgency resumed in 2011, led many to suspect that the US may have a hand in the resumption of ethnic insurgencies in Myanmar.

For others, as Myanmar’s ethnic conflicts are closely related to its recent rolling out of political reforms ending the decades-long rule of the former military junta, Naypyidaw’s apparent tougher stance against ethnic insurgencies may serve its domestic agenda and allow the new government to resist further political reforms. Currently, Myanmar’s military holds one fourth of seats in the national parliament and has a veto on changes to the country’s constitution. Although President U Thein Sein, a former general, has stated publicly that the country’s military has initiated reform, no time frame has been given.

While the prospects of Myanmar’s program of political reform remains unclear, it is clear that China is losing regional influence. As ethnic conflicts rage along the Chinese border and anti-Myanmar sentiment rises among its population, the Chinese government appears to possess fewer and fewer policy options regarding its relationship with Myanmar. 

45

international

Indian Ocean

Adventure Capital

As a guest in the Indian Ocean, China cannot choose its hosts, and therefore the principle of ‘business is business’ looks like Beijing’s best option

By Ye Hailin

O

n March 19, 2015, China’s Foreign Ministry spokesperson Hong Lei confirmed at a press conference in Beijing that the Sri Lankan government had approved the resumption of construction on the Colombo port city breakwater. Before this, during his first three months in office, Sri Lankan President Maithripala Sirisena’s government had suspended, on at least two separate occasions, this China-funded project, launched by former President Rajapaksa and his Chinese counterpart Xi Jinping during the latter’s visit to Sri Lanka in September 2014. Though both governments have repeatedly clarified the temporary nature of the suspension, changing attitudes towards China in Sri Lanka have already posed a challenge to Beijing’s vision of a “Maritime Silk Road” in Southeast and South Asia.

China played a major role in helping the former President Mahinda Rajapaksa’s administration to finally prevail over Tamil Tiger rebels, ending their decades-long insurgency in 2009. This resulted in golden

46

opportunities for Chinese enterprises in the infrastructure construction binge undertaken in Sri Lanka after the civil war.

Today, however, the new government in Colombo, led by a coalition of former umbrella opposition parties, claimed that it would “reassess” the China-funded port project according to environmental and other legal standards. The question for China is whether this change is simply the result of a power transition within Sri Lanka, or whether Chinese companies have failed to learn lessons from their Myanmar operations, once again falling short of the expectations of local extragovernmental interests groups and opening themselves to legal criticism.

The rest of South Asia and the other Indian Ocean powers are closely monitoring cooperation between China and Sri Lanka, one of the first countries to embrace China’s Maritime Silk Road initiative in a practical sense. The success or failure of China’s first Indian Ocean projects has a major impact on regional attitudes towards Beijing’s vision for the economic integration in the south and

southeast of Asia. Speculation has even arisen of Indian and US meddling having derailed China’s ambitions in Sri Lanka.

While many questions remain, none of them truly reflect the complexity and scope of China’s Indian Ocean ambitions and the difficulties on the road ahead.

Why Sri Lanka?

Economically, Sri Lanka is a significant component of China’s vision of a Maritime Silk Road. The island nation has acted as a crossroads for global trade between East and West since the 8th century. Arabs, Portuguese, Dutch and British traders all established themselves in Colombo’s harbor, with the city that grew out of this trading entrepot described as “Singapore in the Indian Ocean” during the country’s economic takeoff in the late 1970s. The island’s long, thin shape facilitates connections between ports and inland areas. While today Singapore remains a more formidable commercial center than Colombo, Sri Lanka, with its quality port and human resources, has the potential to NEWSCHINA I May 2015

Photo by AFP

A Chinese worker at Puttalam Coal Power Plant in Norochcholai, Sri Lanka. The Puttlam plant was built by China Machinery Engineering Corporation and handed over to Sri Lanka in July 2011

play a much bigger role in boosting regional prosperity.

Sri Lanka boasts a larger high-value labor pool than many other countries in South Asia. If it avails itself of its geographical and demographic advantages by building industrial and commercial centers around its ports, it can serve as a siphon for industry and a “regional office” for multinationals. These advantages were the economic reasons behind China’s choice of Sri Lanka as a proving ground for its Maritime Silk Road. The consequence of this is that China’s activities in Sri Lanka directly determine the attitudes of other countries in the region towards the entire project.

According to the official government news portal of Sri Lanka, the Colombo port city project was the brainchild of former President Rajapaksa, partially funded by an initial US$1.5 billion investment from China with the potential to attract up to US$5 billion from around the world. The proposed “offshore city” is to be built on reclaimed land and includes sports complexes, a golf course, NEWSCHINA I May 2015

hotels, apartments, offices and other modern facilities. The website of China Harbor Engineering Company (CHEC), the developer who won the contract for the project, claims that 83,000 local jobs will be created in the process. CHEC has already purchased or leased part of the land allocated to the project, which marks a shift from previous practice, where Chinese firms generally only act as construction contractors when operating overseas.

The Colombo project is not the first of its kind launched by China in Sri Lanka. The Hambantota port terminal in the country’s south, and the second phase of the Colombo port, also developed by CHEC, have already improved Sri Lanka’s potential as a new shipping hub on the Indian Ocean. The new port city, once built, would pave the way for Sri Lanka to realize its potential as a regional economic hub.

However, the twofold suspension of the project despite China’s diplomatic efforts is concerning. Construction only resumed in early February when Liu Jianchao, Chinese

assistant minister of foreign affairs raised the issue with Sri Lankan Foreign Minister Mangala Samaraweera in Colombo. At the end of the same month, during his meetings with senior Chinese officials in Beijing to prepare for President Sirisena’s upcoming state visit in March, Samaraweera reiterated the country’s willingness to support China’s Maritime Silk Road initiative and reassured Chinese officials that the review of the Colombo port city project applied to “all foreign investment projects in Sri Lanka.” However, a few days after he returned home, the Chinese developer received an official order from the Sri Lanka government to suspend construction once again.

The priority for Beijing is to ascertain exactly what the hold-up is.

Complex

Partisan politics in Sri Lanka was a feature even when the government in Colombo enjoyed relative unity in its campaign against the Tamil Tiger insurgency. Ambitious economic projects are even less likely to quieten

47

Photo by afp

international

A Sri Lankan soldier walks past a billboard bearing portraits of China’s President Xi Jinping and Sri Lankan President Mahinda Rajapaksa ahead of Xi’s visit to Colombo, September 15, 2014

the island’s complex politics. Different parties have routinely accused one another of pocketing profits from projects dressed up as being in the national interest. The strong-arm Rajapaksa administration was a boon for foreign investors, including China, who wanted to bypass the other side of the aisle. However, this also gave opposition parties ammunition that they could deploy once Rajapaksa was out of office. Mega-sized Chinese infrastructure projects in particular are easily derailed when governments change. The question is not whether general Sri Lankan attitudes towards China have changed, but rather who will wield the knife in the portioning of the Chinese “cake.”

The new administration’s halting of Chinese projects is most likely one feature of a broader attempt to reshuffle partisan interests and renegotiate contracts with foreign investors to secure more favorable terms for the new leadership. This is understandable, though not in the spirit of a negotiated contract. For Chinese companies, the impact is higher costs, though not high enough to warrant a cancelation of the project.

There are other regional powers to consider as well. For New Delhi, which sees

48

the Indian Ocean as “India’s ocean,” China’s cooperation with Sri Lanka is anything but welcome. Though Narendra Modi expressed interest in joining China’s Maritime Silk Road vision after being sworn in as India’s new prime minister in May 2014, the project remains a hard sell to both the Indian public and its policymakers.

From India’s perspective, there is no reason to celebrate the construction of a Chinafunded port city project in Colombo, nor to welcome the emergence of Sri Lanka as a shipping, e-commerce and information hub in the Indian Ocean, particularly if this emergence is funded by Beijing. Even if India’s constant sensitivity regarding its regional maritime power and strategic security is ignored, it remains cautious of China’s activities at its doorstep. China argues that larger, better ports in Sri Lanka will also benefit economic development in India’s southern regions – the first ship to berth in the Chinafunded Hambantota port was loaded with auto parts made by India’s Tata Group. Such arguments do little to convince India, which remains a minor exporter when compared to China, Japan or South Korea.

India, unlike East Asian exporters, does

not need better access to more Indian Ocean ports. Nor is it enthusiastic about competition in the regional ports sector. For China, it is unrealistic to expect that the questionable rewards for India resulting from Beijingbacked regional commercial initiatives will change the Indian minds. For New Delhi, slowing China’s growing economic ascendancy in the Indian Ocean is a matter of capability, not a matter of attitude.

That the US and other Western powers desire hindrances to China’s presence in the South Asia region is evident, but should not be overstated. Xi Jinping’s vision for two Silk Roads, one in Southeast and South Asia and the other in Central and Western Asia, is not on the US list of strategic threats, at least for now. The US is not interested in grappling with China for influence in Sri Lanka, Bangladesh or even Myanmar. A better strategy for the US is to keep China and her neighbors mired in obstructive maritime disputes in the East and South China seas.

Indeed, Western NGOs, rather than the US State Department, have been most vocal in condemning China’s activities in the Indian Ocean, with many arguing that China is disrupting regional cultures and ecosystems with excessive commercial activities. This reaction stems from deep-rooted prejudice among some of these NGOs who oppose the industrialization of developing countries. The US government may not encourage this, but it also will not intervene to curtail the spread of anti-modernization, anti-foreign investment and even anti-China ideas in countries whose governments are striking deals with China, such as Sri Lanka and Myanmar. For China, defending herself by merely clarifying the motivations behind investment does little to persuade suspicious NGOs of its intentions.

So what should China do?

Good Guest

The best way for China to deal with the US and Indian-led resistance to its commercial expansion in the Indian Ocean is, as stated above, to win hearts and minds of China’s hosts in the region, starting in Sri Lanka. It is neither wise nor worthwhile to expend effort exchanging blows with regional competitors.

Forcing Sri Lanka to “choose a side” is an NEWSCHINA I May 2015

even worse idea.

Some Indian media have stressed that, during his visit to Beijing, Samaraweera declared that Sri Lanka would refuse to allow Chinese submarines to dock in Sri Lankan ports. This report was taken out of context. While India’s power in South Asia does not allow it to freely dictate to Sri Lanka, China must always remember that Colombo is a partner, not an ally. China cannot ask Sri Lanka to choose sides. If China tries to compel Sri Lanka to choose between Beijing and New Delhi, then Sri Lanka would have no choice but to turn to its immediate neighbor. However, were Sri Lanka’s choice between China and Japan, which has also shown a strong interest in the Indian Ocean, Colombo might side with China if its offer is attractive enough.

Strategically, China should not overestimate Sri Lanka’s value, especially in terms of military security, which should not be regarded as a risk factor in its current pursuit of a Maritime Silk Road. A military presence

only follows and protects an economic presence, not the reverse. It would be inappropriate for China to begin drawing up plans to establish it as a regional military power on the Indian Ocean. Attaching excessive strategic importance to Sri Lanka this early on will likely not only elevate regional China Threat sentiment, but also encourage Sri Lankan businesses and politicians to take advantage of China.

Thus, a “business is business” mentality is much more effective and coherent than talking up grandiose strategies to reflect and serve broader foreign policy ambitions. In this regard, it is necessary for China to fully understand Sri Lanka’s politics. While China’s support in ending the civil war is widely appreciated, the country’s political system in Sri Lanka has always been built on competition among parties. Consequently, long-term strategy and policymaking are always susceptible to changes in the political landscape.

Though the former President Rajapaksa took

credit for ending the civil war, as a leader he was never unchallenged. To behave as if a single politician determines a country’s direction is unrealistic.

Chinese investors need to adapt to this reality. “House rules” must be strictly observed, and interactions, either between governments or non-government channels, need to be balanced by contact with different commercial, social and political forces to avoid giving the impression that the “guest” is trying to select their “host.” Finally, if local partners are invited to participate in different aspects of a project, closer interest sharing arrangements will provide a better buffer against risk than going it alone.

In the Indian Ocean, China, like the Arabs, the Portguese, the Dutch and the British before it, will always be a guest, not a host. The author is the editorial director of South Asian Studies, a quarterly journal published by the Chinese Academy of Social Sciences

The Venture Week for International Elites in Suzhou, to open in July, is seeking professionals from around the world to participate. Those with backgrounds in new energy, new materials, smart power grids, nanotechnology, medicine and biotechnology, modern equipment manufacturing, software and service outsourcing, financial services, and creative industries are welcome. Talents and entrepreneurs who have participated in major research projects or have intellectual property rights are especially welcome.

Applications are online (www.rcsz.gov.cn/szjy2015) and will be available throughout the year. Participants will receive partial reimbursement of their travel costs. Starting from January 2015, a project evaluation review will be held every month. First come, first served. We look forward to seeing you in Suzhou.

NEWSCHINA I May 2015

49

economy

Photo by IC

Virtual Red Envelopes

S

uffering from dried out, stinging eyes and an uncontrollable tremble in his right hand, Yang, a 22-year-old graduate in Guangzhou, had to take time out of his Chinese New Year vacation to see a doctor. The diagnosis? Too much “red enveloping.”

“Red envelopes,” essentially cash stuffed inside letter-size crimsoncolored packets, are a traditional gift most often exchanged at important festivals, particularly Chinese New Year. As with an increasing range of transactions in the modern Chinese economy, this traditional exchange is moving into the online world via social networking platforms like Weibo and WeChat, and online payment platforms like Alipay. By clicking on a virtual “red envelope” or simply shaking their smartphone, users can open an “e-envelope” sent by a friend or company, and help themselves to the cash or coupons stuffed inside.

During the 2015 Spring Festival Gala, the traditional Chinese New Year’s Eve variety show on State broadcaster CCTV, corporate sponsors distributed around 500 million yuan (US$83.3m) in cash through WeChat, with the largest single “envelope” containing 4,999 yuan (US$794). During the five-hour program, around 11 billion virtual envelopes were reportedly opened, around 810 million per minute at the peak time.

“A great number of people have come to the hospital for chronic neck pain, and the ‘red envelope’ game is believed to be a major cause,” Wang Yuling, a medical director at the Sixth Affiliated Hospital of Sun Yat-sen University in Guangzhou, told local media.

“It seems that these red envelopes have become people’s only concern during the holiday period. They shake their phones day and night, disregarding their family members. Friends no longer met in the real world, but gathered on a social networking app to scramble for virtual envelopes. Is this new game destroying our traditional festival culture?” questioned a commentary from Xinhua News Agency.

Such criticism, however, did little to quell Chinese people’s enthusiasm for red envelopes. Two weeks later, during the Lantern Festival on March 5, 2015, businesses and sponsors were lining up to distribute

50

Pushing the Envelope

Over the recent Chinese New Year festival, Chinese apps and brands found a way to bring traditional New Year’s cash gifts into the online world

By Xie Ying and Chen Jiying

billions of yuan in virtual red envelopes, with analysts hailing these “lucky money” promotions as the most fashionable new form of social exchange and business marketing.

A New Celebration

While some have criticized the game for being a waste of time, since the envelopes often contain little to no cash, others see it more as a quirky pastime than a way of making money.

“In the old days, we made phones calls or sent text messages to pass on festive greetings. Now, these have been replaced by virtual red envelopes, which I find more convenient and fun,” Zhang Chao, a 29-year-old white-collar employee in Beijing, told NewsChina.

“While few people would stop to pick up a pile of pennies on the ground, scrambling for red envelopes brings us happiness,” he added.

Zhang Jun, assistant general manager of marketing and public relations at Tencent, the developer behind WeChat, agrees. “The main idea of virtual red envelopes is to please our users,” he told NewsChina. “It’s like playing cards with friends and family members - the gambling chips are not so important,” he added.

In order to highlight the entertainment value of virtual red enveNEWSCHINA I May 2015

lopes and maximize the number of participants, the apps offering the game, including Alipay and WeChat, have set an upper limit to the amount of money that can be put in an envelope, and the number of people who can open it. For example, a red envelope offered up by a single user to other members of a 50-member group chat on WeChat can be opened by 30 members, with the app allocating the cash value randomly, from one fen (0.16 US cents) to 8.88 yuan (US$1.50).

After 30 people have taken a share, the game ends.

“The fun comes from seeing who was the luckiest and quickest, and people get excited by the mystery amount of money in the envelopes,” said Zhang Jun. Zhang Chao revealed that during the Chinese New Year vacation, his WeChat feed was filled with posts from friends showing off how much money they had won.

For many people, the red envelope game is a chance to make new friends. Ni Hong, a founder of the Shenzhen Media Association, a journalist association in Shenzhen, told NewsChina that red envelopes have helped his organization expand to cities like Beijing and Shanghai – a number of journalists had applied to join after he began giving out red envelopes on WeChat.

“The red envelope served as an incentive for new members to join,” he said.

Zeng Junru, administrator of a group of players in the online game JX3 Online (a Chinese World of Warcraft equivalent) told NewsChina that his group had doubled in size since the game incorporated a red envelope function, allowing players to distribute in-game currency to others with a virtual game of chance. “When I started distributing red envelopes in the game, people started calling me ‘boss’ or ‘moneybags,’” he said.

A New Business War

As the platforms distributing these red envelopes, apps such as Alipay and WeChat have been the biggest winners in this new game.

According to official statistics, Alipay, for example, saw its red envelopes opened 683 million times by over 100 million users on Chinese New Year’s Eve. The same day, a total of 240 million “envelopes” were opened, containing a total of four billion yuan (US$630m) in cash and coupons.

“With its sharing and social networking functions, the red envelope game has been a huge boost to Alipay’s shortage of user interaction,” an insider at Alibaba, developer of Alipay, told NewsChina. “Since epayment apps are used much less frequently than instant messaging apps, we plan to make red envelopes a regular function of Alipay, covering more social events, such as weddings, business banquets, private parties and others,” he added. Now, when a user clicks into Alipay’s “My Friends” page, they are presented with an option to send anyone on their list a red envelope.

Despite dominance in social networking, Tencent lags far behind Alibaba in e-commerce. Red envelopes, however, have given it a chance to seize more market share by requiring users to link their bank accounts to Tenpay, Tencent’s e-payment tool, before sending or receiving a virtual red envelope. According to Tencent’s 2014 fiscal report, the company has seen around 100 million users register

NEWSCHINA I May 2015

for Tenpay via red envelope activity on WeChat. Data from Chinese Internet consultancy iResearch showed that Tenpay’s market share has risen to about 10 percent from 4 percent since WeChat launched its red envelope function in 2014.

Similar to Alibaba, Tencent has also added a red envelope function to its other services, such as the smartphone app version of QQ (Tencent’s hugely popular instant messaging software) and its taxi-hailing app. “With high demand for online payments, red envelopes are of high value to social networking platforms like QQ and will further promote other online payment services, such as online shopping and online lottery, among others,” Ying Yu, vice president of Tencent told West China Metropolis Daily.

“All online businesses, present or future, are or will have to be based on online payment,” he added. According to media reports, Tencent has allegedly nicknamed its red envelope development project “DDay,” indicating that it is a crucial play for Internet market share.

A New Promotion

While red envelope functions first began appearing in 2014, 2015 has marked the introduction of sponsors. According to Zhang Jun, Tencent’s director of marketing, all the cash in red envelopes given out by sponsors on WeChat was supplied by sponsors themselves.

“The two major goals behind our red envelope strategy were to market our brand and to attract more fans,” Xu Lei, vice-president of JD.com, a leading B2C online shopping website and also the biggest sponsor of red envelopes on WeChat during the New Year holiday, told NewsChina.

Lufax, a finance app, told NewsChina that two days after Chinese New Year, it had risen from 30th to 4th place in the iTunes store download chart. Although the company launched many other promotional campaigns during the festival, red envelopes were believed to have played a significant role in the app’s rapid growth.

While WeChat remains very cautious about putting advertisements in the app’s interface in order to avoid tainting its user experience, red envelopes have provided a soft route to monetization. Although Zhang Jun denied that red envelopes were an advertising ploy, saying that WeChat has received no kickbacks or commission from sponsors, many believe that red envelopes are potentially a more effective marketing method than direct advertisements on WeChat.

The coupons in red envelopes have certainly been helping providers attract more customers, just as many celebrities have boosted their popularity by sending red envelopes on microblogging platform Weibo. According to Xinhua Daily, a local Party newspaper headquartered in Nanjing, capital of Jiangsu Province, online red envelope activities have been a boon to offline sales at bricks-and-mortar stores and movie theaters, with sales volume at the city’s top two shopping malls, Deji and Golden Eagle, respectively increasing by 11 percent and 8 percent year-on-year by the third day after Chinese New Year.

“There is a lot of space for commerce behind red envelopes... It is a large basket, with each Internet service provider and business taking what he needs. Also, it is urgent to work out new rules to further regulate this new commercial model,” said State broadcaster CCTV.

51

economy

Wu Xinhong

Me, My Selfie, and I

By Yuan Lu in Xiamen

“

Whether you like it or not, Meitu Xiuxiu is now part of contemporary culture,” said Wu Xinhong, founder and CEO of Xiamen-based photo app startup Meitu, which literally translates as “beautiful image.” Wu is undeniably correct – on Chinese social networking platforms, images edited with photo-retouching app Meitu Xiuxiu, the company’s flagship product, are as ubiquitous as they are recognizable. The company claims to have hundreds of millions of users.

Holding a new version of Meitu’s branded smartphone, slated for launch this April, Wu told NewsChina: “Meitu Xiuxiu is now popular worldwide, but opening up the photo editing tool takes up too much time. Our smartphone, however, can beautify you instantly and automatically.”

According to AppAnnie, Meitu ranked third in the world in terms of mobile user volume in 2014, and sixth on the list of “2014 global mobile app developers.” In China, selfie photoshoots are a common social phenomenon, and according to Wu, many Meitu users, the majority of whom are

52

Photo by Huang SHaoyi

With selfie functionality and social networking driving smartphone use in China, photo-retouching app Meitu Xiuxiu is turning narcissism into profit Wu Xinhong’s original photo (top left) and versions retouched with Meitu Xiuxiu

female and use the software dozens of times per day, will be keen to save time by using the Meitu phone. A 2014 report by Chinese Internet industry consultancy iResearch showed that female users under 30 were China’s most frequent selfie-takers, 85 percent of whom habitually share their photos on social networking platforms.

Self-portrait

By the time he was 17, Meitu founder Wu Xinhong, born in Qiaozhou, Fujian Province in 1981, was already running his own business. After several early Internet industry ventures, including large-scale domain-name squatting and developing sign language keyboard input systems, Wang began to focus his attention on photo editing software in 2008.

Remembering a short-lived desire to be an artist after studying oil painting in middle school, Wu set out to combine his interest in esthetics with his tech industry background.

“At that time, people in their early 20s took to posting selfies on their social networking accounts,” Wu told NewsChina, “but crafting a good personalized image required around

twenty steps with existing photo editing software. I sensed an opportunity.”

That year, 2008, he launched his PC-based photo editing software Meitu Xiuxiu, and later followed it up with a photo effects app in 2011. The company claims that as of August 2013, the mobile app had 300 million users, of which over 20 million log in daily.

According to the company's latest statistics, the mobile and desktop apps have a combined user base of more than 500 million.

Meitu has also developed an array of other photography-based apps, including Meipai, an app that creates heavily stylized short videos.

Pursuit of Perfection

Drawing inspiration from a selfie-oriented Casio digital camera, Wu set out with the idea of streamlining his product’s functionality, providing quick-fix photo filters based on common Chinese perceptions of beauty. “We made some changes when adopting certain filter effects into our products, including the built-in camera [on the Meitu smartphone].

For example, [the app makes] lips look richer NEWSCHINA I May 2015

and redder, and skin whiter and softer, while the background remains basically the same,” said Ning Qi, product manager of photo effects at Meitu.

“The goal of our product at the very beginning was to create perfect portraits with clean and flawless skin, similar to porcelain dolls,” said Ning Qi. However, Wu Xinhong predicts that beauty trends are now moving away from heavy make-up. “Our future products will focus on covering small blemishes, so that users remain recognizable to their friends,” he told NewsChina.

“Now, we’re developing in another direction: attaining a ‘natural’ effect while beautifying the skin tone.”

In contrast to many app development companies, many employees at Meitu are devoted fans of their own products. Ah-Liang, product manager for the company’s mobile app, is a selfie-addict. “For me, selfies are a way to show confidence and to pursue beauty,” Liang told NewsChina. “It’s a way to accept and improve oneself.”

Wu Xinhong also takes selfies, but doesn’t tend to share them. “I still feel it is a private thing, and I’m too reserved to share them,” he said.

Idea

Unsurprisingly, Meitu has a dedicated esthetic research team that keeps the company up-to-date on fashion trends. While Meitu initially targeted female users, the company is now focusing its research on men, although with a focus on photographs of food or scenery.

To meet the demand for high-quality selfies, the Meitu smartphone design team placed more emphasis on the phone’s frontfacing camera. Consequently, Wu claims that the Meitu smartphone produces higher-quality selfies than the iPhone 6.

“Normally, a higher-definition camera makes blemishes more obvious, but our selfdeveloped software solves this problem,” he said during a previous interview with daily newspaper Global Times.

Given the software’s large user numbers, the company is optimistic about the Meitu phone’s sales prospects. As the company’s chairman Cai Wensheng once told media: “We would be thrilled if only 1 percent of users bought a Meitu phone.”

NEWSCHINA I May 2015

china

bynumbers US$1.239tn The total value of China’s US Treasury securities holdings in January 2015, a fifth consecutive monthly decline.

China’s monthly US Treasury bond holdings, US$tn

1.300

1.275

1.250

1.225

1.200

Jan’14

Feb’14

Mar’14

51.4

Index of confidence in the future incomes of urban Chinese depositors in Q1, 2015, the index’s lowest point since Q1, 2009

Apr’14

May’14

June’14

July’14

Aug’14

Sep’14

Oct’14

Nov’14

Dec’14

Jan’15

9.1%

Drop in railroad cargo transportation in China in the first two months of 2015.

As of February 2015, this marks a 14-month decline.

Preferences of urban Chinese depositors, Q1, 2015

Consumption

18.5% Deposits

Source: China National Development and Reform Commission

45.6% Investment

35.9%

US$14.2bn

Total value of overseas investment in China’s national social security fund by the end of 2014, about 7 percent of the total.

Source: China National Council for Social Security Fund

Source: People’s Bank of China

30

The number of robots per 10,000 manufacturing workers in China in 2014. China overtook South Korea in 2013 to become the world’s largest market for robotics.

Source: International Federation of Robotics

Industrial robot density in the world’s top five robotics markets, 2014 500 400 300 200 100

CHINA

SOUTH KOREA

JAPAN

US

GERMANY

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culture

Mongolian Folk Rock

Almost Famous D

espite the obstruction screens in front of them, some of the judges on reality TV singing-songwriting contest Sing My Song identified one group of contestants as soon as their performance began.

“It’s Hanggai,” said one of the judges, a singer from pop duo Yu Quan. Along with Liu Huan, a veteran Chinese singer who sang the 2008 Beijing Olympics theme song with Sarah Brightman, Yu Quan lowered their screens – indicating their interest in working with the band – by the time their song had reached the first chorus.

When the performance was over, the judge who had uttered the band’s name stood up and introduced them to the other judges, calling Hanggai “one of China’s best ethnic folk rock bands.” He then turned to the band, “I was thrilled to see you on the stage.”

In fact, despite being one of the most visually and sonically recognizable acts in China’s alternative music world, their name holds little currency with the country’s mainstream audience. Hanggai, who perform in brightly colored traditional Mongolian garb and whose vocals often feature the otherworldly rasp of traditional Mongolian

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throat-singing, may also be China’s most well-traveled band, having racked up more than 400 overseas performances since 2007.

Hanggai’s appearance on Sing My Song, a reality singing contest where contestants must perform their own compositions, marked their arrival on the mainstream Chinese pop culture radar. Securing Liu Huan as their “mentor” on the show, the band breezed through subsequent rounds to emerge as the season’s victors. In the meantime, they have also appeared on several other talent shows including Beijing TV’s Dreammaker, and State broadcaster CCTV’s Dream Star Partner.

“By absorbing, mixing and redeveloping Mongolian traditional music, Hanggai bridges the ancient and the ultra-modern. Having long nourished the flame beneath a melting pot of rock and underground culture, they may have found the shortest distance between the two,” wrote Yan Jun, a well known rock critic, in 2006.

Copying

In fact, only three of the seven-member Hanggai outfit have since NEWSCHINA I May 2015

Mongolian folk-rock band Hanggai, despite unanimous domestic critical acclaim and a growing audience overseas, have remained fastidiously anti-mainstream for a decade. However, a recent appearance on a popular reality TV singing-songwriting contest may be set to change that

By Chen Tao and Yuan Ye

appeared on Sing My Song, according to the band’s leader Ilchi: “The program only required vocalists.”

In 2004, ethnically Mongolian Chinese Ilchi – who, like most Mongolians, uses a single name – founded Hanggai in Beijing with Xu Jingchen, a member of the Han Chinese ethnic majority and a born-and-raised Beijinger. While Ilchi was born in China’s Inner Mongolia Autonomous Region, he moved to Beijing at age 12, and speaks only Mandarin, rather than Mongolian.

Before Hanggai, Ilchi and Xu had worked together on another project, releasing an album as nu-metal band T9. However, the two soon became bored of the prevailing trend within China’s alternative music scene, which was seeing a growing number of bands but also increasing homogeneity. Frustrated with their contemporaries’ tendency to imitate Western metal bands, Ilchi and Xu tried various new styles, even experimenting with funk.

Ilchi’s Mongolian heritage continued to be an influence on the members of T9, who traveled to Inner Mongolia every summer. “We ventured far into the grasslands, and almost reached the ChineseNEWSCHINA I May 2015

Mongolian border,” said Ilchi. “We also liked singing Mongolian folk songs when drinking,” he said. “A friend of mine once said to me ‘It feels more right when you sing the songs of your own people.’”

This idea turned out to be the inception of a new band. Ilchi and Xu Jingchen renamed T9 “Hanggai,” a Mongolian word referring to an idealized natural landscape of grasslands, plants, mountains, rivers and skies. They decided to rediscover an ethnic tradition that is quickly disappearing.

Music of the Age

Over the past 10 years, Hanggai has seen fairly rapid turnover of members, the majority of whom had been playing modern music, especially rock, before joining. In 2009, Hugjiltu, the band’s horseheadviolin player, quit Hanggai to form his own band Ajinai, now also a well established Mongolian folk rock outfit. Drummer Li Dan and bassist Wu Junde, of well known Chinese punk band Tongue, were in Hanggai for some time. “Li Dan quit in 2011. He got married and wanted a more stable life. He found himself a job,” said Ilchi.

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culture

Photo by IC

Hanggai’s current vocalist Sheng Li and bassist Niu Xin were both former members of Khurd, a pop-metal band based in Hohhot, capital of Inner Mongolia. At a Beijing restaurant in 2006, Ilchi met future Hanggai member Hurcha, son of an ethnically Mongolian family from western China’s Qinghai Province who had studied vocal music in college and was well versed in Mongolian folk music. The two drank together, found they shared a range of musical interests, and Hurcha joined the band the following year. “Interestingly, our members include four lead vocalists from four other bands,” said Ilchi. All of these bands had played at 2005’s Gegentala Grassland Music Festival, though they didn’t know each other at the time.

The “melting pot” of underground rock music culture was a great influence on the Hanggai of today. “We are lucky to have all had those previous experiences. If we hadn’t all played rock, we wouldn’t have the music style we do today. It’s a product of the age we live in,” said Ilchi.

However, it took quite some time for the band to arrive at their current style. “We were basically looking for a direction from 2004 to 2007, and even into 2008,” said Ilchi. Shifting from metal to ethnic folk, the band’s first adoption was to add a horsehead violin to their “traditional rock setup” – guitar, bass and drums. However, they later realized they were still operating within a Western musical framework. “It felt like Mongolian music, but with the wrong ingredients,” said Ilchi.

At this point, the band turned a corner, collecting Mongolian folk songs and only playing Mongolian ethnic instruments in rehearsal and live performances. Having established Mongolian music as the foundation – rather than a theme – of their sound, they then reintroduced guitar, bass and drums into their music. After building up a repertoire of several dozen songs, the band independently released their debut album Introducing Hanggai in 2009, featuring mainly

Hanggai performs on stage for Sing My Song, February 14, 2015

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Mongolian folk songs sung in Mongolian and played on traditional instruments, with modern elements like electric guitars and computer programming taking a back seat.

So far, Hanggai has released four studio albums and a number of EPs and live recordings. Huzi, Hanggai’s manager, told NewsChina that the band has a large catalog of unreleased songs, and their fifth album may come out this year. Bob Ezrin, a well known record producer who has worked with artists including Pink Floyd and Lou Reed, will produce the new album.

Musical Diversity

For a long time, China’s rock scene, characterized by a spirit of rebellion, independence and often anger, seemed to exist in opposition to the mainstream and pop culture. Traditionally, Chinese fans of alternative music are even quicker than their Western counterparts to level accusations of “selling out” at bands who court the mainstream entertainment business, particularly reality TV shows.

But this trend is changing. Last year, the first season of Sing My Song attracted contestants like folk-rock singer-songwriters Zhao Zhao and Li Xia. After the show, Zhao Zhao’s entry “When You Are Old” was selected to be performed by Hong Kong singer Karen Mok at the 2015 CCTV Spring Festival Gala, the world’s most watched TV broadcast. This year, Sing My Song featured more such musicians, including Hanggai, veteran rock musician Zhao Muyang, folk singersongwriter Ma Tiao and alternative rock band Gemini.

“There’s no need to make such a distinction between the so-called ‘independent’ and ‘mainstream’ [markets],” said Huzi. In his opinion, high-quality work and professionalism speaks louder than any selfascribed label.

While according to Huzi, Hanggai is now a well-oiled machine that runs with military levels of professionalism, the band has spent the majority of its existence underground and far from the mainstream.

They lived with other underground bands, many of them now well known in alternative music circles, in the far suburbs of Beijing, sharing rehearsal rooms at a cost of merely 300 yuan (US$48) a month, scrimping and saving to support their dream of being professional musicians.

“Most bands are not able to make a living through music alone [but] Hanggai’s members are all full-time. Our main income comes from our gigs,” said Ilchi, who quit his airplane maintenance job in 2010. As the band grew in popularity following the release of Introducing Hanggai, its members began to spend more and more time on their music, and eventually quit their previous jobs.

Inevitably, with a bigger audience comes greater scrutiny – both from hawkish underground fans poised to accuse the band of selling out, and cultural authorities keen to keep the entertainment industry as orthodox as possible. When asked about the socio-political significance of the band’s music, Huzi demurs: “Criticizing or being rebellious is an easy pose – we are simply making music. We don’t want to define right or wrong. We just want to provide audiences with more musical diversity.”  NEWSCHINA I May 2015

Ph

ob ot

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/IC an ixu Y ng Wa

Hualing Nieh Engle

Crossing Continents

For half a century, the International Writing Program founded by Hualing Niel Engle and her husband Paul has had a deep and enduring influence on writers from China and around the world

By Su Jie in Iowa

F

orty years ago, Hualing Nieh Engle and her husband Paul Engle set up a home by the Iowa River, which runs through Iowa City and the University of Iowa campus. Both devotees of Chinese literature, the Engles named their home “Red Mansion,” in a nod to Cao Xueqin’s Qing Dynasty novel A Dream of Red Mansions, while the woods behind their house, a habitat for wild deer, have been dubbed “Deer Park,” the title of a Tang Dynasty poem by Wang Wei. Despite her short stature, Nieh Engle has a powerful voice, and greeted NewsChina warmly with a glass of sherry, mentioning NEWSCHINA I May 2015

that she and her husband, who died in 1991, both used to enjoy an afternoon tipple. Although at 90 years of age she now suffers from short-term memory loss, Engle can recall the past with perfect clarity, and her home overflows with photographs, books and artwork acquired over the decades.

Escape

She began our interview with just such a recollection – a 1978 encounter with the renowned Chinese poet Ai Qing. That year, Engle returned to her birthplace on the Chinese mainland for the first time in thirty years. “We were walking down a narrow al-

ieh gN n i al Hu

l Pau nd a sb hu er h d an gle En

leyway and saw Ai Qing peeking around his door. I called out his name and he glared back at us and exclaimed, ‘You are so late!’”

Engle’s return trip to the land of her birth did not begin in Beijing, however. Her main aim was to reconnect with her family. In Guangzhou, she was reunited with the families of her siblings. “They ran to us and we ran to them,” she recalled. “Everyone was crying, and waving their hands... You don’t know whom to speak to first; which hand to hold first. ” In 1925, Hualing Nieh was born in Wuhan, Hubei Province. Her father was a political progressive who participated in the

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Photo by Xinhua

culture

Hualing Nieh Engle (front, second from right) and her husband receive visiting Chinese writer Xiao Qian (front, third from right) at their home in Iowa, 1979

1911 Wuchang Uprising which overthrew the Qing Dynasty (1644-1912) and forced the abdication of the Xuantong Emperor.

He later became a prefectural governor in Guizhou but died in 1936 during a pitched battle between Nationalist and Communist Party forces, leaving his wife and eight children behind.

Nieh Engle remembers her mother as “kind, gentle and firm.” In 1937, after the Empire of Japan invaded China, her mother moved the family away from Wuhan, but insisted on sending her daughter to middle school in another city. Engle remembers her mother’s words at their parting. “It’s hard for you to leave me. And it’s hard for me to leave you. But you’re going to make me proud.”

In 1948, Nieh graduated from the Foreign Languages Department of China’s National

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Central University. That year, she also published her first essay, a satirical piece titled Amoeba. In 1949, she married her college sweetheart Wang Zhenglu in Beijing. With the Chinese Civil War almost at an end, and the Kuomintang in full retreat, Nieh’s family moved to Taiwan for fear of reprisals at the hands of the victorious communists. She would not return to China for thirty years.

Root and Branch

Once in Taiwan, Nieh took up a position as a middle school teacher. Her previous writing background, however, soon led to an invitation to take up the editorship of the liberal intellectual magazine Free China.

Taiwan in the 1950s was under martial law, with all literature and art tightly controlled to prioritize anti-communist propaganda.

However, Free China emerged as a bastion of alternative ideas, and was used by writers to advocate political liberalization. The magazine often criticized the Kuomintang’s authoritarian rule and even openly supported the idea of an opposition party.

In 1960, after the publication of another article calling for the establishment of an opposition party, Free China was closed down by the Kuomintang government, with many editors and contributors jailed. Nieh and several of her colleagues were put under house arrest.

After her release two years later, Nieh received an invitation to teach literature at the National Taiwan University. By that point, she had separated from her husband Wang Zhenglu, and was raising her two children alone. Returning to literature – her great passion – brought new opportunities. In 1963, she was invited to a cocktail party by the United States Information Service in Taiwan, where she met her future husband, American poet Paul Engle, who was himself thrilled to discover that Nieh was the author of one of his favorite books – Jade Cat, a collection of short stories.

Return

In Nieh’s absence, the People’s Republic of China underwent a complete social and cultural transformation, including the chaos of the Cultural Revolution (1966-1976). Nieh, meanwhile, had remarried, moved to the US and in 1967 founded the International Writing Program (IWP) of the University of Iowa with her second husband Paul Engle. After five years of appeals to the Chinese government, Nieh finally received approval in 1978 to invite Chinese writers to participate in the program.

By 1976, the IWP had evolved into a recognized residency program hosting literary figures from around the world. That year, 300 writers from 24 countries jointly recommended the Engles for the Nobel Peace Prize.

The first time the Engles returned to the NEWSCHINA I May 2015

The Engles in their garden in Iowa

mainland, they invited poet and translator Bi Shuowang and essayist Xiao Qian, to participate in the IWP. When Bi and Xiao arrived in the US in the fall of 1979, the Engles organized a “Chinese Weekend” in their Deer Park, which was attended by more than 30 writers of Chinese descent hailing from the mainland, Taiwan, Hong Kong, the US and Europe. It was the first time that both exiled and expatriate Chinese writers were able to sit down and share their experiences and ideas with writers from the mainland.

“Most of the writers had been away from the mainland for too long. Many of them were there to see the two mainland writers, especially Xiao Qian,” Nieh Engle told NewsChina. “Everyone was so excited.”

The mainland writers’ visit to the US received wide exposure in the Western media, NEWSCHINA I May 2015

with a lot of focus placed on their interactions with writers from Taiwan, considering the hostility between the two sides. Xiao Qian remained cautious. While others spoke freely and without restraint, Xiao read from a prepared script, word for word.

In later years, however, mainland writers flocked to the IWP, including recent Nobel laureate Mo Yan, poet Ai Qing, revolutionary feminist writer Ding Ling, “misty poet” Bei Dao and author (and former Minister of Culture) Wang Meng.

When the Engles met Ai Qing, he was living in seclusion, having yet to be rehabilitated after being purged as a rightist by the authorities. Nieh Engle had to make repeated applications to the government even to be granted an audience with Ai. In 1979, when Ai Qing made his first public appearance after being

rehabilitated, he told reporters that “Hualing Nieh Engle and Paul Engle opened my door.

It will never be shut again.”

So far, more than 1,000 writers have come to Iowa to participate in the Engles’ program, which writer Liu Heng described as a “micro-world” during his residency in 2005.

“The program builds a bridge between writers from different races, nations, ideologies, experiences and personalities. It has created a unique form of communication.”

Nieh Engle has remained in the US, where she and her late husband saw the 20th century’s joys, disasters and upheavals from the perspective of the Red Mansion on the banks of the Iowa River. “I am a tree whose trunk was built on the mainland, with branches in Taiwan and limbs and leaves in Iowa,” she told NewsChina.

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visual REPORT

Namgyal’s 11-year-old son Sangay often accompanies his father on patrol

Fish Fighters November and March, when the expansive waters of Ea nakedachQinghaiyearcarp,Lakebetween freeze over, locals swarm onto the ice in the hope of landing a valuable species of freshwater fish that, due to overfishing and

habitat loss, was listed as endangered at the provincial level in 2003, landing on China’s national Red List in 2004.

The price for a single naked carp, a delicacy in some regional cuisines, can reach up to 100 yuan (US$16), which has resulted in rampant poaching. Naked carp grow relatively slowly, taking seven to 10 years to reach reproductive age. As these fish are a source of food for waterfowl and also feed on algae, as their numbers decline, the lake’s precarious ecosystem is thrown out of balance.

In order to protect the dwindling population of naked carp, the government of Qinghai Province has declared that all fishing activities on the lake must cease by the end of 2020. Meanwhile, individuals found to have caught more than 50

kilograms of naked carp will be prosecuted under China’s Criminal Law, which provides for a three-year jail sentence for poachers.

In 2010, Namgyal, a 51-year-old local ethnic Tibetan, voluntarily organized a 30-strong volunteer “Naked Carp Patrol Team” to apprehend poachers engaging in illegal fishing in Qinghai Lake. In cooperation with the local fisheries administration, Namgyal’s team has swelled to a network of some 400 volunteers.

It usually takes patrols five to 10 days to patrol the entirety of Qinghai Lake via a relay network of homesteads belonging to local herdsmen who have also supported the move to protect local wildlife. Herdsmen routinely notify Namgyal of any suspicious activity, allowing patrols to head directly to where poachers are operating. As local fisheries officials have said that their own resources are insufficient to deter illegal fishing, the Naked Carp Patrol Team could be the last hope of survival for one of China’s most endangered species.

Protected wetlands near Qinghai Lake

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NEWSCHINA I May 2015

Photo by CFP

A patrolwoman observes Qinghai Lake while her colleagues set out to find illegal poachers and remove their fishing nets NEWSCHINA I May 2015

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visual REPORT

1 2

1.Seized illegal fishing nets are burned 2. Captive fish are freed 3. Some local volunteer patrol members

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NEWSCHINA I May 2015

NEWSCHINA I May 2015

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Photo by Wang Yixuan/IC

3

OUTSIDEIN perspectives from within China

Spellbinding Yunnan

Leap with the Tiger One of China’s most spectacular hiking trails has remained aloof from the development that has ruined others

By Alice Stevenson

GET there: Tiger Leaping Gorge is located 50km from Shangri-La and 75km from Lijiang. Both cities have airports with regular flights connecting many domestic destinations, and Lijiang can be easily reached by bus or train from Kunming. Buses depart from the city’s main terminal several times a day and take ten hours, while the overnight train to Lijiang lasts nine.

Public buses run between Lijiang and Qiaotou, but many people opt to take a private minivan to the start of the gorge.

This can be organized through any guesthouse in Lijiang.

WHERE TO STAY: Halfway Guesthouse is a popular choice for those spending the night in the gorge, with dorm and private rooms all at a reasonable price. An option closer to Qiaotou is the Tea Horse Guesthouse, which has a wide terrace where guests can relax and enjoy the sunset, but leaves most of the journey ahead of you the following day. For trekkers who choose to spend a second night in the gorge, Tina’s Guesthouse is located in a picturesque farming village at the far end of the walk. The hotel offers basic rooms and a restaurant but also serves as a base for onward transport, and is a favorite of serious hikers.

Camping is not recommended anywhere on the gorge, unless waking up surrounded by giggling locals, having rolled to the bottom of a hill, appeals.

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NEWSCHINA I May 2015

NEWSCHINA I May 2015

of our trek was a triumphant moment. We gazed awestruck at the immeasurable forests and the wide flat waters of the Jinsha River, a tributary of the upper Yangtze that snakes through the gorge and on towards Sichuan.

Following the climb there is a cool descent through shaded woodland. Slowly the gradient seemed to flatten and the final segment of road was broad and even. We pressed on, eager to make it to the Halfway Guesthouse before nightfall. The hotel was expecting us and we were promptly taken to our room just as the sun was beginning to dip behind the purple mountain peaks. Our clean and comfortable dorm rooms overlooked the gorge, and we dined in a log cabin-style dining room, washing our simple, homely Chinese dishes down with well-deserved beers. A waitress even produced an apple pie with a large white candle stuck into the center in celebration of the birthday of one of our group. At night the air outside was sharp and cold, illuminated by a heavy sprinkling of stars, reminding me just how far we were from China’s huge metropolises. Tucked into bed, we were lulled to sleep by the comforting rush of the Jinsha far below us.

Photo by Alice Stevenson

S

tanding atop one of the deepest canyons in the world, the view is nothing short of breathtaking. Tiger Leaping Gorge in northern Yunnan Province plummets almost 4,000 meters from top to bottom, with its two loftiest peaks said to be so close together that a tiger once leaped between two of them (hence the gorge’s name).

The dense green hillsides seem to stretch endlessly onward beyond the vast river below, and fishermen wading at the edge of the water seem mere specks in the The view from the valley bottom is well worth the scramble distance.

Reaching this height and gazing over the expanse below is no Sunday ramble. However, it is certainly a rewarding experience. The high gradual ascent offering a vista across fields of road frequented by hikers and used daily by crops crowned by a clear, vivid blue sky. The the local Naxi people may only be 22 kilo- path was generally empty of people although meters in length, but it is at times a steep and we engaged in a friendly rivalry with other uneven path. While most picturesque in the groups making the journey, overtaking each cool sunshine of spring and autumn, during other at different points. the rainy season entire areas become impassThe Naxi Family Guesthouse is a recomable as the road devolves into a slippery and mended place to stop for lunch while on the treacherous quagmire. Temperatures plum- trail, and lies nestled into the hillside a few met in the late autumn to below freezing, hours into the walk. It is the last restaurant for some time, so it is advisable to stop and adding an additional hazard.

In every season, however, most walkers enjoy some of flavourful rice or noodle dishbegin their trek at Qiaotou and complete es. The friendly staff serve hearty portions, esthe hike over two days. Hikers can choose sential for the long road ahead, and you can to carry their bags themselves or can rely on enjoy a seat in their courtyard while chickens surefooted pack ponies to bear the load, Lord wander through the surrounding gardens.

Pressing on, our bellies filled, we came of the Rings style. across an ominous sign marking the start of Bendy the notorious “28 Bends.” This is the steepest My journey began in the late morning and most arduous section of the road and the when the sun was already warm, having path, which, unsurprisingly, features a total traveled by minibus from the nearby tourist 28 zig-zag bends; a slog that feels as if it goes trap of Lijiang. After stopping to buy tick- on forever. We took numerous breaks under ets for entry to the park (65 yuan, roughly the shelter of stalls offering water and snacks US$10) we set off, determined. The gorge is along the way, counting every turn as we asmanageable for walkers of most fitness levels cended, only to find that the path continued but requires persistence and good footwear, even after we felt we had done 28 aboutas at points the climbs and descents are sim- faces, but upon reaching twenty-eight we still ply exhausting, even for regular climbers. had further to climb. Despite the challenge, The initial section of our walk involved a reaching the final bend and the highest point

Transformed

The next morning, glaring sunlight illuminated the scenery we had missed the night before, giving us a whole new panorama to gaze at as we munched on muesli and pancakes. The second day’s walk was far less strenuous, following a level track that, at one point, traversed glorious cliffside waterfalls.

Within a few hours we began heading downhill towards Tina’s Guesthouse, which marks the end of the main trail. Rather than leaving that afternoon we chose to spend the night at Tina’s in order to walk further down into the gorge, and take full advantage of the unbelievable menu on offer. I advise any traveler that follows in my footsteps to try Tina’s yak

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travel

me even more nervous as we continued downwards into the darkening valley.

At the bottom lies a bridge upon which visitors can gaze straight into the imposing chasm that constitutes the deepest region of the gorge. From this precarious vantage point, the full strength of the raging river can be truly appreciated, with the torrent sending up crystalline bursts of spray into the roaring air. Our group sat pensively beneath the gargoylelike crags above and the raging foam below, gathering ourselves before the return climb, which included a terrifying climb up a rickety, warped iron ladder welded into a sheer cliff face.

Completing a full hike of Tiger Leaping Gorge leaves one with a sense of wonder and achievement. Don’t trust the distances inked into the hand-drawn maps distributed by touts, and bear in mind that placenames such as “Halfway Guesthouse” are poetically misleading. Instead, luxuriate in the verdant, carefree imperfection of this glorious expedition, and appreciate the sense of smallness that can only come when one is utterly dwarfed by the majesty of nature.  Photo by Alice Stevenson

cheese dumplings.

This cosy meal felt particularly well-earned, having spent the afternoon making our way gingerly down to Tiger Leaping Rock, a dark fang of polished stone jutting into the rushing river. Tourists pay 15 yuan (US$2.50) to descend the precipitous downward path, a vertiginous scramble that gives the impression one could slip into the depths of the gorge at any moment. Locals lounge beside the track to grin at those clumsy tourists who attempt to uncer- Such signage can be deceptive tainly ascend a path that those who reside here can bounce up with unnatural agility. Weatherbeaten locals of all ages, sometimes carrying back-breaking loads, will regularly stroll past a staggering foreigner, as sprightly as you please.

In contrast, many tourists arrive woefully unprepared for the rigors of the path, sliding along in flip flops or tottering in heels, some clad in business suits or wielding monumentally cumbersome cameras and umbrellas. As this section of the gorge is accessible to day trippers with tour buses, few come dressed for hiking. The pained looks and weary posture of those passing us in the opposite direction made real chinese

rèn

xìng

renxing Willful, arbitrary

Renxing, an adjective describing somebody or something as “willful” or “arbitrary,” has become a nationwide catchphrase since it emerged as a buzzword during the 2015 work conferences of China’s NPC (National People’s Congress) and CPPCC (Chinese People’s Political Consultative Conference), popularly known as the “Two Sessions.”

A commonly used word literally meaning “to do as one pleases,” renxing began to spread on the Web around April 2014, when media reports revealed that an elderly man surnamed Liu was tricked into buying purported health supplements for a total cost of 550,000 yuan (US$87,000). According to media reports,

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Liu only realized he had been conned after he had already coughed up 70,000 yuan (US$11,475), but he spun out the con in order to build a stronger case that might attract police attention.

“The police won’t take a small case,” he told the media, provoking many online comments that “wealthy people are so renxing!”

The term is now synonymous with the excesses of China’s super-rich. Numerous apocryphal tales of “renxing” actions include licking yoghurt from a carton lid while discarding the rest, or using banknotes to start fires. In December 2014, another Chinese man surnamed Sun was dubbed renxing for buying a

four-horned sheep as a pet on a trip to Inner Mongolia.

The usage of the word entered the offline realm when CPPCC spokesman Lü Xinhua used it to describe the government’s fight against corruption. The live interpreter at the press conference translated the term as “capricious.” Four days later, when delivering his annual work report, Premier Li Keqiang warned officials not to be “renxing” when using their powers. Through overuse, the word has now been endowed with a number of overtones, including “irrational”, “uncontrolled” or “arbitrary,” and applied to everyone from individuals to government departments.

NEWSCHINA I May 2015

flavor of the month

Once you pop...

By Sean Silbert

D

rinking bubble tea means following routine procedure: hearing the click-clack of the ice as the drink is shaken up behind the counter, the pop of the oversized straw piercing the thin film lid, and then slurping up delightful black tapioca balls as they interrupt your flow of refreshing, silken tea.

The tea itself comes in flavors ranging from passionfruit to chocolate to rose. And it’s proven a hit – popular in tea shops and takeaways from London to Hong Kong.

But bubble tea is first and foremost a product of Taiwan. Most credit Liu Han-chieh with its invention; Liu allegedly discovered iced coffee during a 1980 trip to Japan, and duly attempted to make iced milk tea in his own store, Chun Shui Tang, in Taichung. But chilling traditional Chinese leaf tea didn’t have that much appeal for believers in Chinese dietary wisdom, which until

NEWSCHINA I May 2015

today holds that chilled drinks make one sick.

The big breakthrough came six years later, when one of Liu’s employees arrived at work with a basket of traditional Taiwanese desserts. They included fenyuan, boiled, sweetened tapioca balls; xiancao, a semisweet black jelly; and aiyu, a yellow jelly made from a species of fig native to the island. Liu told Time Out Hong Kong that his original recipe was brewed black tea, powdered milk, caramelized liquid sugar, and a heap of firm, chewy black tapioca balls. He dubbed his creation “pearl milk tea”, and it quickly became a top seller.

The popularity of the drink spread rapidly around the world, and oversized, marblesized ones gradually replaced the smaller, frogspawn-like pearls in Liu’s original recipe.

The name “bubble tea,” or “Boba,” a nickname derived from that of famously largechested 1980s actress Amy Yip, became the moniker of choice abroad.

Those tapioca balls are the key ingredient in bubble tea. They must have the perfect consistency, just the right level of chewiness (a trait described as “Q” in Taiwanese), and be just the right size to fit through the straw.

Tapioca isn’t easy to make; it must be painstakingly processed from tough cassava root, rolled and mixed with arrowroot or palm tree sap for texture, before the resulting pearls can be boiled until they turn black. Freshness is also a factor – authentic bubbles putrefy in a matter of hours, which has resulted in cheaper alternatives going heavy on the preservatives – making a true bubble tea something of a luxury item.

Of course, the tea itself is this peculiar beverage’s other selling point. Wander around big Asian cities, and you’ll see dedicated bubble tea outlets that have popped up in shopping malls and street corners just about everywhere. There are fruit teas, milk teas, milk-fruit teas, smoothies, and more.

Some even substitute sweet jellies or toppings more suited for shaved ice.

Not all of these attempts to make the next sensation work out. Some vendors have taken the mad science of tea making to an unnecessary level, like adding in carbonated sodas that make the tapioca bubbles dance or a few shots of hooch to give it an extra buzz.

Syrupy fruit flavors like banana also can push this concoction into tooth-aching sickliness, acceptable only to the most candy-addled aficionado. In my opinion, bubble tea is enough like a dessert as it is.

Even without all these infinite alterations, the concept of bubble tea is so alien to traditional Chinese tea culture that it’s a wonder it even exists at all. And yet, bubble tea is only one of many ways that Chinese have turned their great invention – tea – into a modern concept. Hong Kongers, for instance, regularly add a splash of condensed milk to their black tea, a holdover from British colonialism also seen in India and Myanmar, or add three parts coffee to seven parts milk tea to make a cup of yuenyeung or “Mandarin duck.”

Bubble tea, however, remains top dog in the trendy hot libation market, and is accessible just about anywhere. The last time I enjoyed a truly authentic cup, I was seeking out a recommendation of a tea cart plying its trade around Taipei’s National Taiwan University.

My target was instantly recognizable due to the line snaking around the block. After waiting for what seemed like an eternity, I watched as the vendors served up my order: pouring the brewed shaken tea, adding in a shovelful of warm, sticky tapioca and handing it to me in a clear plastic cup. I hesitated, thinking of my masculinity, but quickly remembered what a friend of mine told me before I set out on my search: if it’s delicious, does it matter?

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essay

Surf’s Up

By Ankur Shah

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I’d learned more about Chinese culture in a single evening’s couchsurfing than in six months attending classes at a Chinese university

Illustration by Liu Xiaochao

Waking up in a bed next to a 24-year-old stranger was in no way how I expected to begin my travels in China. In fact, none of my experiences couchsurfing in the People’s Republic matched my expectations. Couchsurfing and China are words I barely would have associated at one time, but fast-forward a few months and I’m a convert – no, an addict.

It’s not all about roughing it on sofas and sharing beds. One yuppie couple I stayed with even hired a maid to look after me indeed, as with most things in China, so-called international principles don’t really apply. What’s more important is the Chinese notion of guanxi. Word of mouth spreads quicker than wildfire, and after contacting my first host, each one thereafter was introduced to me by the last. I stayed with five different hosts in Hangzhou and had five distinctly unique experiences, transforming both my view of China and my philosophy of traveling all without spending a penny on accommodation!

China’s hipster hostels present an array of options for those traveling on a budget, and of course for those willing to splash their cash, there are luxurious options in abundance, so why choose couchsurfing?

First and foremost: the people. You’re filtering a population of over one billion down to, arguably, some of their most fascinating cultural ambassadors and, what’s more, you get to choose who to hang with. One family I stayed with was headed by a single mother, dating a 22-year-old personal trainer, and the former’s 19-year-old daughter. Few families in conservative China are as atypical. The range of backgrounds, personalities and lifestyles that you can come across while couchsurfing is simply vast.

I stayed with Buddhist vegetarians who lived in the heart of the city, and streetside tofu sellers who lived in an outlying hamlet. While both families were technically urban residents, their understandings of their city were entirely different, as were the lists they gave me of Hangzhou’s “must see” locations.

What both families did share, however, was a natural curiosity about the world, an open minded and welcoming attitude readily extended to me.

They took time to ferry me around the city, and readily shared their homes, their food, their passions and, most importantly, their ideas, with me, giving this foreigner a chance to explore Chinese culture from within. Every mealtime, while the excellent food was distracting, was an opportunity for cul-

tural immersion.

At one mealtime I summed up the courage to ask about the family’s standpoint on the controversial issue of Tibet. This family was made up of extremely open-minded, well-educated and wealthy individuals, and I was, I admit, expecting an affirmation of my own views. Instead, I was challenged from the get-go, an experience which made me question what I had been told by the British media.

Less political and more cultural were challenges of etiquette. On another occasion, at the home of my tofu-seller hosts, I was offered one too many cups of rice wine, and unceremoniously passed out at the table at 6 PM. I suppose that was a cultural experience, though my memory of the event remains somewhat fuzzy.

Inamongst the gray sprawl of China’s high-rise cities, built on the foundations of long-lost ancient walled towns, it’s becoming increasingly difficult to seek out something genuinely traditional. Rather than in its urban architecture, China’s cultural traditions endure in the homes and around the tables of its citizens, something I learned on my first night as a couchsurfer.

On my arrival at one nondescript urban home I was urged by my host’s father, without any real introductions or explanation, to sit for an ink-andwash portrait. After the artist attempted to teach me the fundamentals of Chinese calligraphy, we even played a game of Chinese chess, during which I was treated to a potted history of the game, and then exhorted to master it. My slow progress visibly disappointed them.

Following the train-wreck that was my Chinese chess career we, of course, commiserated by drinking some of Hangzhou’s famous Longjing tea, as the host’s mother made a bed for myself and her son on the floor of their home. In the space of a few hours, history, art, entertainment, gastronomy and unbelievable generosity had married with an unconscious disregard for personal space.

In short, I’d learned more about Chinese culture in a single evening’s couchsurfing than in six months attending classes at a Chinese university. NEWSCHINA I May 2015

Speak to me

By Kenneth Kagan

NEWSCHINA I May 2015

Few locals expect foreigners to speak Chinese at all, and the universal response of “Wow, your Chinese is really good!” is exhaustingly familiar to anyone who has even a passing acquaintance with spoken Mandarian

Illustration by Liu Xiaochao

“Why don’t any foreigners want to speak English with me?” a Chinese woman angrily asked me at a party I recently attended. “They all want to use their Chinese, but I never get a chance to speak English. Come on!”

One American at the same party wasn’t convinced by her argument – he had come to China to practice Chinese, he said, arguing that it shouldn’t be a problem for locals to communicate with foreigners in Mandarin. “That’s not the point,” chimed in another local woman. “What if we want to speak to you in English?

Truth be told, it’s hard to get by anywhere in China without speaking the local language, and sooner or later you’ll need to communicate with your cab driver, or your dentist. For that reason, a good number of foreigners come to China to master the language. While a huge number of people still regard Mandarin’s tonal system and thousands of characters as an unassailable linguistic obstacle, learners see it as a challenge. And when you’re already so far away from home, speaking English with the locals feels like a wasted opportunity.

But in China, students start learning English as early as kindergarten and continue all the way until university. That doesn’t mean the average twentysomething can speak more than a few basic phrases, or even that they’d want to if they could: a survey by the 21st Century Education Research Institute revealed that up to 90 percent of Chinese people in full-time education “weren’t interested” in learning English. This is understandable – most Chinese students cram for thousands of hours in preparation for the arduous college entrance examination, and then forget everything immediately afterward.

This leaves a huge number of poor souls who find, after countless hours of studying, that they don’t even get many chances to use the language that they supposedly mastered in order to get a degree. If they’re fortunate, they might get to travel abroad, or have a fleeting conversation in English at a party. In most cases, however, their second language, much like second year calculus, simply withers in their long-term memory banks.

Both sides, therefore, find ourselves at an impasse. How can two people have a conversation when neither wants to speak in a language they fully understand? I can entirely empathize with a Chinese person who is frustrated to speak in their mother tongue with someone who speaks a language they devoted years to learning, but never get the chance to use.

Conversation comes at a premium for passionate language learners, and an interesting and patient language partner is very much the proverbial Holy Grail. I once had a part time job where my sole duty was to help high school students improve their spoken English. Once a week, I’d meet up with a girl in a café and talk about anything from the

weather to what was in her daily newspaper. What’s more, I got paid to do this, with no formal qualifications. Linguistically mismatched couples are a common sight in Beijing cafes, communicating in halting, broken sentences. I don’t know how many times people have sadly complained to me that they can seldom make “real friends” with people that seemingly only want to practice their English, or Chinese – a depressingly common complaint in an environment where the need to speak a foreign language often outweighs the desire to connect with native speakers.

Some foreigner friends of mine take the effort to speak Chinese language learning to interesting extremes. Quite a few people I met on one language program shunned bar streets in an attempt to get a more “authentic” China experience. One friend even traveled to far-flung corners of the country in order to force himself to use his Chinese language ability in areas where nobody understood or spoke English. Others compromise: another friend regularly has discombobulating dialogs where he speaks Chinese and his language partner answers in English.

Then, of course, there are the legions of foreigners in China who are quite happy to bluster along in English. It’s hard to imagine a fresh-off-the-plane banker expressing frustration that nobody wants to correct their tones in Mandarin. But when someone genuinely interested in fluency only elicits English-language responses from Chinese speakers, it can be particularly grating. Few locals expect foreigners to speak Chinese at all, and the universal response of “Wow, your Chinese is really good!” is exhaustingly familiar to anyone who has even a passing acquaintance with spoken Mandarin.

My strategy is usually to fall back into the language that whomever I am speaking to feels most comfortable with – it might be less advantageous for language learning, but it’s better for cultural communication. Insight, awareness and knowledge are often more advantageous to one’s personal development than the language they are communicated in.

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Cultural listings Cinema

Between Nature and Civilization When a young student from Beijing is sent to live in Inner Mongolia among nomadic herdsmen in 1969, the second year of the radical Cultural Revolution, his initial fear of marauding wolves on the grassland turns into obsession with their mysterious nature. In late February, Wolf Totem, a Sino-French co-production adapted from a 2004 best-selling novel by writer Jiang Rong and directed by French director JeanJacques Annaud, was released in China and France simultaneously. Annaud, best known in China for his movies The Bear (1988) and The Lover (1992), spent five years producing the movie. In about two weeks, the movie garnered a box office income of more than 600 million yuan (US$97m) in China. In France, Wolf Totem also received much favorable criticism, and its box office income exceeded that of Academy Award-winning Birdman.

Music

Book

Buddhist Rock Namo, a Beijing-based band combining north China’s folk music with rock, pop and funk, recently released their third studio album, Spring has Come.

Deriving their name from the Sanskrit “Namo Amitābhāya,” a Buddhist phrase meaning “homage to infinite light,” the band’s sound has always maintained a heavy Buddhist influence, particularly in their early stage around 2010 — several of their songs incorporate sutra chanting. At the same time, the band shows an ironic attitude, dotting their lyrics with dark humor.

Their latest album shows less Buddhist influence but a stronger tendency towards social criticism. In recent years, traditional Chinese folk music had seen a growing influence on pop music, and critics believe the rediscovery of traditional folk music from various regions will further influence the development of China’s modern music.

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Winners Never Hesitate

By Luo Zhenyu

Exhibition

Technique or Angles?

How did photography come into China, and in what ways did it influence Chinese society?

An exhibition titled “At China: Early Photography and Photographic Technique,” held from March to May at Taikang Space in Beijing, aims to answer this question. The exhibition consists of three parts, the first of which, through some 200 carte de visite and cabinet cards, displays photography’s arrival and spread throughout the latter half of the 19th century in China. The second part shows concepts of China through some 40 photos and paintings in the early days of photography’s invention, and the last part is about early techniques. As early photography’s development in China somehow tallied with Western colonization in the country, the exhibition puts a fresh twist on vivid memories from the period.

One of the top online talk shows in China, each weekly episode of Logic Show gains an average of 2 million views, and the show has an online network of more than 3.5 million users. Anchored by Luo Zhenyu, a former TV producer, the show delivers mainly fresh ideas and commentaries about the Internet and business. Winners Never Hesitate, a textual version of the show’s biography-based format, was released in March. Founded at the end of 2012, Logic Show quickly gained a large audience with its quirky way of thinking, delivered through Luo Zhenyu’s smart and energetic narration. Capitalizing on China’s gradual trend towards market- and information-oriented economic development, the program has released a total of three books and proved the market’s eagerness for refined knowledge and information.

NEWSCHINA I May 2015

NEWSCHINA I May 2015

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Commentary

One Belt, One Road will bypass the Middle East, and for good reason Past lessons and ongoing concerns over open competition with the US has led China to circumvent the Middle East in its program to expand its global influence

By Wang Tao

W

ith a concentrated slew of recent Chinese investment in Iraq’s oil diplomatic visits in the past industry. Even in Saudi Arabia, where To extend its own couple of years, China has the political situation is relatively stable, economic power in the launched its dual-track New Silk Road China’s success is limited. For example, Middle East, China would initiative. The program aims to achieve the China Railway Construction Corbe seen to be directly regional integration along the ancient poration (CRCC) lost 4.15 billion challenging Washington’s overland Silk Road trade belt linking yuan (US$670m) on a light rail projstatus in a key strategic Asia and Europe alongside a Maritime ect in Mecca that ended up completSilk Road Belt linking China, Southeast ing way over budget due to frequent region and South Asia. Dubbed One Belt, One bureaucratic issues. With these lessons Road, the dual initiative is set to be Chiin hand, China’s leadership appears to na’s leading foreign policy priority in the be reluctant to venture into the Middle coming years.

East when promoting its One Belt, One But in laying out the blueprints for its Road project.

One Road, One Belt initiative, it is clear that the Middle East, a key Moreover, as One Belt, One Road has been painted as China’s link on the ancient Silk Road, is absent from the plan, a seemingly first “global” strategy, it is frequently perceived as a concerted effort counter-intuitive omission. In the past few years, China has relied by China to challenge the global leadership of the US. The deliberon the oil-producing Arab states for much of its oil and gas. Saudi ate exclusion of the Middle East, a region of major strategic imporArabia, for example, is China’s biggest source of crude oil. In 2013, tance for the US, is China’s attempt to minimize direct competition oil imports from Saudi Arabia accounted for 20 percent of China’s with its main strategic rival. Although the rise of the American shale total. In the meantime, Qatar has become China’s principal sup- oil and gas industry has diminished the importance of the Middle plier of liquid natural gas. In 2013, some 30 percent of the crude oil East to US energy policy, there is little indication that the US will consumed in China originated in the Middle East, which supplied scale back its political and economic presence and influence in the more than 50 percent of China’s total imported crude that year. region. To extend its own economic power in the Middle East, ChiHowever, in recent years, China seems to have become wary of na would be seen to be directly challenging Washington’s status in a venturing further into this region when expanding its overseas in- key strategic region, possibly jeopardizing the One Belt, One Road vestment. In 2013, China total global FDI amounted to US$90 strategy in the process. billion, more than half of which was bankrolled by State-owned As the Middle East will continue to be an important region in energy companies. In terms of geographical allocation of FDI, how- terms of meeting China’s energy needs, it is in Beijing’s interest to ever, Chinese investment in the Middle East lags far behind that in promote stability in the region. For this reason, China has supother oil-rich regions. While China has increased its investment in ported the ongoing negotiations between Iran and the US over the the energy industry in Africa and South America, in the Middle former’s nuclear program. Moreover, with no experience dealing East it has focused mainly on promoting trade. with the complex political and religious landscape of the Middle A major reason for this caution is the volatile political and secu- East, China is simply not ready to attempt to broaden its political rity situation in many Gulf states, which in the last few years has influence among Arab States.  made Chinese investors more circumspect. China suffered huge losses in Libya as a result of the Arab Spring movement. The rise The author is a resident scholar with the Carnegie-Tsinghua Center for of the Islamic State in Syria and Iraq also poses a direct threat to Global Policy.

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NEWSCHINA I May 2015

NEWSCHINA I May 2015

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