May 2016 by China Newsweek Corporation

Out Of Options: Beijing's Korean Headache

SOCIETY

Left Behind Children: Pediatrician Shortage

CULTURE

Candid Camera: Surveillance as Entertainment

TOUGH TALK

Interpreting the message of the Two Sessions

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Volume No. 093 May 2016

INTERNATIONAL

EDITORIAL

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

China’s challenges and solutions, according to its leaders

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

CN11-5826/G2

NEWSCHINA I May 2016

elivered every year at the annual session takes, but also they can lead to more trenchant reof China’s National People’s Congress in sistance to relevant reforms. March, the government work report is a Li outlined three general strategies to address the major document to watch in order to understand identified issues. He reiterated that the key to susChina’s policies and perspectives. This year, as the taining China’s economic growth remains in allowslackening of China’s economy ing the market to play a dominant has dominated global headlines, role in the economy, a core conIt has been the annual report, presented by cept China’s leadership has been estimated Premier Li Keqiang, is particuadvocating for the past few years. that reducing larly important. According to the annual governIn the report, Li identified ment report, the authorities will excessive three major concerns the governcontinue to push forward related production ment will focus on and address reforms, including introducing capacity by 10 within the year. Firstly, total trade a “negative list” mechanism that percent in six volume, including both imports will allow private capital to enter industries would and exports, declined by 7 perindustries previously controlled necessitate letting by the State as well as publishing cent in 2015, a sharp contrast with policymakers’ previously lists of powers and responsibilities go about two set goal of a 6 percent increase. of government agencies, theremillion workers. As there is no sign that tumby drawing a clearer boundary bling global economies will turn around government power. around any time soon, the imThe second strategy outlined in port/export sector that was once the government report is the cona driving force of China’s growth tinued adoption of a “positive” will most likely continue to put downward pressure fiscal policy and a “stable” monetary policy, while on its economy. at the same time launching “supply-side” structural Secondly, the central government is tasked with reforms. This means that China will pursue its the daunting undertaking of keeping unemploy- loose monetary policy and also maintain relatively ment in check. In explaining the rationale behind high levels of investment in infrastructure projects, the annual GDP growth target of “6.5-7.0 percent” which will be a primary channel through which the set for 2016, a relatively optimistic range given the leadership can stimulate the economy, thus keepeconomic difficulties China is now facing, Li said ing employment levels stable. that the leadership’s major concern is keeping the Lastly, the government pledges to improve pubunemployment rate low. It has been estimated that lic services, pushing forward reforms regarding edreducing excessive production capacity by 10 per- ucation, medical services and social security. With cent in six industries would necessitate about two better social services and a larger safety net, it hopes million layoffs. As China aims to restructure its to soften the impact its recent economic troubles economy, the government will need to maintain have on the general population, and keep potential a relatively high economic growth rate to mitigate social unrest at bay. the impact this restructuring will have on the unLi warned that 2016 will be China’s “most difemployment rate. ficult year” since the global financial crisis in 2008 Thirdly, Li warned that the economic slowdown and urged officials to be prepared “for major battles.” will pose a major challenge to the reform agenda As world economies have become even more interthat has been outlined by the leadership. Not only dependent in recent years, the outcomes of China’s do economic difficulties leave less room for mis- economic battles will have global impact. 

Contents

Behind the scenes

P16

Editorial

Politics

01 China’s challenges and solutions, according to its leaders 10 Enclosed Communities: Gate Mail 14 Demotions: Leap Into The Unknown

Cover Story

International

Society

P10

16 Two Sessions Retooling Reform/Playing Politics

26 North Korea Crisis: Precarious Politicking 29 Earthquake Monitoring: Seismic Shift

P64

32 Pediatrician Shortage: Far From Child‘s Play

NEWSCHINA I May 2016

Photo by CFP

At the annual March meetings known as the Two Sessions, China’s leaders described how they plan to tackle the nation’s thorniest economic and political issues while offering assurances that they are more than up to the challenge. NewsChina reads between the lines

Contents

P44

P60 35 AIDS Project: The Power of Prevention 38 Chen Man: Never Back Down 41 Butlers: The Next Big Thing?

57 Lü Jingren: Tangible Poetry Visual REPORT

60 Lama Town

Special report

44 Older Snowbirds: Southbound Seniors

OUTSIDE IN

64 Transporting Tianjin: Past is Present Commentary

History

48 Peking Opera in Germany: The Show Must Go On Economy

52 Cai E’sheng: Future of Finance Culture

54 Xu Bing: Dragonfly Eyes

NEWSCHINA I May 2016

P32

P41

72 We need a cure for toxic leverage 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

NewsChina, Chinese Edition

Oriental Outlook

March 21, 2016

March 3, 2016

Blood Shortage

Urban Innovation

Since the end of 2015, hospitals in several populous Chinese provinces including Jiangsu, Anhui and Henan were found to be short of donated blood, with reserves below official warning levels. On October 1, 1998, China enacted its first Blood Donation Law, which specified that all blood earmarked for clinical use must come from unremunerated blood donation, an attempt to legislate the decades-old practice of bloodselling out of existence. People donated 4,400 tons of blood in China in 2014, up from 1,000 tons in 1998, but demand has far outstripped supply, with cultural superstition and inadequate awareness leading to a shortfall of donors. Demand has made illegal blood-selling highly profitable, and poorly enforced penalties further incentivize the practice. Experts argue that the solution to the blood shortage lies in the improved management of hospital blood banks, better communication between institutions supplying donated blood and hospital administrators, and a major expansion of blood drives. Caijing February 22, 2016

Slashing Capacity In early 2016, the State Council, China’s cabinet, issued two consecutive directives designed to cut excessive capacity in the country’s coal and steel industries in response to downward economic pressure. The central government made reducing capacity a top priority in its 2016 work report. Starting from 2014, the market prices of steel, coal and oil have been in free-fall, resulting in industry-wide losses in 2015 for these vast enterprises. According to the China National Coal Association, China uses four billion tons of coal annually, but production exceeds five billion. Industry sources also suggested that domestic consumption of crude steel peaked at 764 million tons in 2013 before falling by 3.4 percent in 2014 and 5.5 percent in 2015. Controlling the exposure of debt-ridden enterprises, many of them State-owned; managing redundancies; and better integrating market forces with government subsidies are all challenges that economic planners are struggling to address.

Alongside a national drive to transition to a more sustainable economic model, China’s cities are attaching growing importance to innovation, with many municipal administrations jostling to have their jurisdictions named “innovation-oriented.” According to the 2015 Annual Report of China’s City Innovation, of the 659 cities listed in terms of infrastructure and government support for innovators, capacity in high-tech industrial sectors and indigenous brand innovation, coastal cities in eastern China continue to lead the pack, though Beijing, Shanghai and Shenzhen occupy the top three rankings. In 2013, innovation expenditure in Shanghai and the eastern provinces of Jiangsu and Zhejiang hit 308 billion yuan (US$47.3bn), accounting for 26 percent of the national total. The government’s report advises cities to give “full play” to their own advantages. Industrial upgrading, however, remains most Chinese cities’ best bet at being viewed as centers of innovation. China Economic Weekly February 29, 2016

Murky Waters During a seminar on the development of the Yangtze River Economic Belt on January 5, Chinese President Xi Jinping emphasized that the central government will make environmental protection a priority in the development strategy for China’s largest waterway. The Yangtze River is around 6,300 kilometers long, has a surface area of 2.05 million square kilometers, and flows through 11 provinces and cities that are collectively home to 40 percent of China’s population and a similar percentage of the country’s total economic output. Environmental conditions along the river, however, are rapidly degrading, even as local economic growth gathers pace. Large-scale water management projects, a shipping boom, industrial runoff and domestic sewage are devastating ecosystems along the river’s entire length. Water management experts warned that eliminating administrative barriers at the provincial level will be crucial to ensure the coordinated and sustainable development of the Yangtze River Economic Belt. China Financial Weekly February 15, 2016

Online Financing Over the years, Internet financing has grown in popularity in China, with supporters claiming the availability of loans online has boosted innovation and increased opportunities for entrepreneurs prevented from obtaining loans from State banks. However, concerns over financial security and data protection, sparked by inadequate regulation and supervision of this emerging sector, have also cropped up. The China Internet Banking Association, which operates under the jurisdiction of the People’s Bank of China, was officially established on March 25, to strengthen regulation and impose “self-discipline” on the online banking sector. An independent Internet financial supervision framework is now anticipated, a response to the organic and evolving nature of online financing, which often finds ways to bypass conventional forms of regulation. NEWSCHINA I May 2016

Illustration by Wu Shangwen

“Some village-level officials have held their positions for 20 to 40 years. Long tenure has turned them into ‘emperors.’” Columnist Lai Hairong proposing the introduction of fixed term limits on village-level positions.

“I wear a US$60,000 [foreign] watch. Is it really worth US$60,000? No! What we pay for is the brand.”

“Don’t let a suspect plead guilty on TV before they stand trial.”

Fu Jun, president and board chairman of Macrolink Group, a large Chinese private enterprise engaged in real estate, international trade, finance and mining, calling on Chinese entrepreneurs to boost the value of their brands.

Zhu Zhengfu, deputy director of the All China Lawyers Association, demanding that the presumption of innocence return to due process in China.

“We cannot mention American and Chinese training regimens in the same breath. There’s a 20-year gap between them.”

A construction worker from Anhui Province surnamed Liang in an interview with People’s Daily, expressing his desire to not only gain official residency in the capital, but also to belong.

Chinese basketball star Yao Ming speaking to Yahoo reporter Adrian Wojnarowski about the limitations of his country’s sports system.

“Due to a lack of educational resources, students from poor rural areas lag behind in elementary school. At that age, they have already lost the chance to compete for a place at university on an equal footing.”

“I don’t think that resignations of government employees have become a‘tidal wave.’This‘phenomenon’is normal, and proves the healthy mobility of talent.”

“Once I change out of my work clothes, I become indistinguishable from any [native] Beijinger.”

Tsinghua University professor Wang Hui explaining the falling enrollment rate of rural students in China’s top universities.

Chinese People’s Political Consultative Conference spokesperson Wang Guoqing trying to put a positive spin on a rash of resignations among key officials, including judges.

“When Chinese people bulk-buy foreign products, from handbags to diapers, it proves their lack of faith in the quality of domestic goods.”

“Panicking about the economy is far worse than actual economic problems.”

Finance minister Lou Jiwei attributing the enduring popularity of imported goods among Chinese consumers to ongoing shortcomings in the domestic manufacturing and quality control chain.

Alibaba founder and billionaire Jack Ma warning of the dangers of losing confidence in China’s economy at the 2016 China Entrepreneurs Forum.

NEWSCHINA I May 2016

Top Story

German President Visits China

At the invitation of Chinese President Xi Jinping, German President Joachim Gauck made his first official visit to China from March 20 to 24. As a former civil rights activist in East Germany and a passionate advocate for democracy and freedom of speech, Gauck’s visit to China has drawn significant attention from the international community. Media groups reported that back in March 2014, when Xi traveled to Germany, Gauck spoke with him about human rights issues in China. Xi invited him to visit and see the country for himself. Gauck did not dodge sensitive issues during his time in the Middle Kingdom – he even brought human rights commissioner Bärbel Kofler with him. According to Germany’s presidential office, Gauck talked with Xi about human rights, environmental protection, Internet security and China’s controversial management of foreign-based nongovernmental organizations. Yet, despite some disputes, Gauck and Xi both stressed bilateral strategic cooperation. At a meeting with reporters from the State publication Global Times (GT), Gauck spoke highly of China’s rapid development, adding that he wanted this visit to

deepen his understanding of China and help the two countries maintain a close relationship. Gauck’s talk with Chinese Premier Li Keqiang also focused on “cooperation.” Li expressed a strong desire to connect China’s “Made in China 2025” plan to Germany’s “Industry 4.0” strategy. According to China’s Ministry of Foreign Affairs, Li said that the two countries can best collaborate by combining Germany’s advanced technology with China’s highly cost-effective and competitive manufacturing. China will continue to open up its massive market to the outside world and welcome investment from foreign corporations. Li added that both sides will discuss further cooperation when Chancellor Angela Merkel comes to China this year for the fourth round of Sino-German talks. During his stay in Beijing, Gauck also talked about cooperation with the senior leaders of the Party School of the Communist Party of China. He spent his last two days of the trip in Shanghai, where he visited the Shanghai Jewish Refugees Museum, and in Xi’an, the city that marks the beginning of the ancient Silk Road. Some German media commented that Gauck is trying to find a balance between nurturing a healthy relationship with China while still staying true to his activist identity.

Society

Vaccine Scandal Shandong Province police recently shut down a large-scale vaccine peddling operation responsible for the illegal sale of vaccines valued at more than US$41.3 million. Police said that over the past five years, the two main suspects, a mother and daughter surnamed Pang, have allegedly illegally accumulated 25 types of Class II vaccines and delivered them to 24 municipalities and provinces without following proper storage procedures. Given that Class II vaccines are optional and paid for out of pocket, unlike compulsory Class I vaccines, which are provided free of charge by the government, it is hard for the officials to accurately calculate the number of victims.

Experts said that these improper storage methods make vaccines ineffective or at least less effective, but the risk of them being harmful is very low. Still, many people in affected regions have expressed anxiety over not knowing whether or not their vaccinations were efficacious. Police have so far detained over 100 people allegedly involved in some aspect of the vaccine ring. Given the massive scale of the operation and the relevant government departments’ failure to detect it, both the media and the public have posited that corrupt officials may also have been involved. On March 22, Chinese Premier Li Keqiang ordered a detailed investigation into the

vaccine scandal under the supervision of the Supreme People’s Procuratorate and pledged to hold culpable officials accountable. Chinese media outlets have taken advantage of the uproar to once again urge the government to improve its supervision of vaccinerelated departments as well as those departments’ compensation schemes, a demand which had been ignored for years. NEWSCHINA I May 2016

Zuckerberg in Beijing Facebook CEO Mark Zuckerberg attended the China Development Forum 2016 held in Beijing in late March, where he participated in a panel discussion with Jack Ma, founder of Alibaba, China’s biggest e-commerce platform. Discussion, according to Chinese media reports, focused on future tech innovations. Zuckerberg brought up virtual reality (VR) and plugged Facebook’s new VR headset, Oculus Rift. He also mentioned artificial intelligence, stating that AI may soon be able to provide solutions for issues in different fields, such as medicine. Ma pointed out that while computers may be “smarter” than humans, humans are wiser, and so should utilize the intelligence of technology to “solve human problems.” During the same trip, Zuckerberg also met with Liu Yunshan, a high-ranking Politburo member. The two exchanged ideas on possible experience exchange between Chinese domestic Internet service providers and Facebook, which is currently banned from the Chinese web.

Economy

PBoC Reduces Reserve Requirement Ratio The People’s Bank of China (PBoC), China’s central bank, announced it would reduce the required deposit-reserve ratio by 0.5 percent as of March 1, its first such reduction of 2016. According to the PBoC, the reduction, which lowers the amount of cash banks are required to keep on hand, aims to provide a better financial environment for China’s much-touted supply-side reform by guaranteeing currency liquidity. Analysts predicted that the reduction may release 700 billion yuan (US$111.1bn) in capital, which would help stabilize the stock market and promote the development of the real economy. “The whole world is embracing looser monetary policy. In China, the reduction will make it easier for enterprises to get loans,” Zhao Xijun, deputy director of Renmin University’s Finance and Securities Institute, told chinanews.com. “Note that the reduction just allows a more flexible currency flow, rather than stimulating the economy.” Many experts told the media that it remains hard to say how the reduction will influence the economy in the long run.

Science

Chinese Scientists Create Lab-grown Mouse Sperm

Laws

China’s First AntiDomestic Violence Law Takes Effect China’s first anti-domestic violence law came into effect on March 1, 2016. The new law, approved last December by the National People’s Congress, defines domestic violence as any violence that occurs between family members, including between spouses, parents and children, or any persons who live in the same house. It states that offenders should be punished in accordance with the relevant criminal law or corresponding regulation. A highlight of the law is that it specifies mandatory reporting for the first time. Teachers and medical personnel are now required to report suspected domestic violence or face punishment themselves. The law also empowered law practitioners to protect victims from domestic violence. Media reports in late March said that since the law took effect, many courts had granted restraining orders to victims of domestic violence.

Several Chinese scientists from Nanjing Medical University and the Institute of Zoology under the Chinese Academy of Sciences, have successfully created the world’s first functional lab-grown spermatozoa, marking a milestone in fertility research. According to Zhao Xiaoyang, one of the project’s leading researchers, they created the sperm by combining primordial germ-like cells with testicular cells from mice. They then added other biological substances to stimulate growth, which eventually developed into spermatid-like cells. Zhao told State-run Xinhua News Agency that they have used the man-made sperm to successfully breed several dozen mice. However, these processes would not be able to be applied to human tissue until years of experiments and assessments have been conducted. The team’s findings were published in a February issue of the journal Cell Stem Cell. NEWSCHINA I May 2016

Photos by Xinhua and CNS

Business

Fashionable

Poll the People

Young Chinese women have found yet another arbitrary standard of beauty. A 21-centimeter-wide waist is now acknowledged in some circles as officially “tiny” after an online video clip comparing women’s waists to a sheet of A4 paper went viral. While an inevitable backlash against promoting stickthinness as an esthetic ideal ensued, there is little chance that China’s ongoing craze for female weight loss will lose steam.

On February 29, the Revolutionary Committee of the Chinese Kuomintang submitted a proposal to this year’s Two Sessions, suggesting that the high-collared, single-breasted suit jacket popularized by Sun Yat-sen and later adopted by political figures including Mao Zedong and Deng Xiaoping be named China’s “national suit.” Xiu Fujin, the deputy committee chairman, said that the wearing of the Sun Yatsen suit by senior leaders at diplomatic events has meant that the garment today represents the Chinese nation.

Do you support the proposal?

Disheartening Despite holding a master’s degree, an application from a 26-year-old female graduate of Chongqing’s Southwest University was turned down by a local government employer because she was single. The incredulous applicant was told she “wouldn’t be able to settle [in Chongqing]” after revealing in an interview that she didn’t have a boyfriend. Observers attributed the refusal to simple gender discrimination, which remains rife in China’s maledominated workplaces.

Yes. 68.3% 18,866 No. 24.9% 6,873 Not sure. 6.8% 1,898 Source: www.sina.com.cn

Most Circulated Post Retweeted 215,773 times by March 16

Questionable A couple from Foshan, Guangdong Province, recently came under fire after they were shown to have traveled abroad soon after their daughter’s death. Netizens revealed that the couple had received 150,000 yuan (US$23,810) in online donations to help their terminally ill daughter at the end of 2015, and once their trip hit headlines, netizens demanded to know how the money had been spent. This was yet another blow to China’s beleaguered network of online charitable donation platforms, many of which fail to conduct background checks on user accounts.

Shaming

A local court in Changchun, Jilin Province, recently showed photographs and IDs of 24 citizens it claimed consistently refused to fulfill contracts on a huge LED display located downtown. While some netizens questioned the court’s methods, asking if the public shaming violated the individuals’ right to privacy, an outpouring of praise for the display also ensued. Court officials answered critics by claiming they were just following regulations handed down by China’s Supreme People’s Court.

A video clip of a speech by Zheng Qiang, a National People’s Congress delegate and the president of Guizhou University in China’s southwest, went viral when the Chinese government held its annual Two Sessions. Zheng attributed the laggardly construction of universities in China’s impoverished west to a lack of government support. His words struck a chord among netizens and analysts who have long criticized the imbalance in China’s allocation of public education resources. Many netizens praised Zheng for his “frankness” and “candor.” “In these 63 years [1949-2012], the total financial support Guizhou University received from the government was less than what my former employer, Zhejiang University [in China’s east] received in three months… I want to ask whether and how western regions like Guizhou can accrue [additional] benefits from reform?”

NEWSCHINA I May 2016

WHO’S

Top Five Search Queries On

HOT? WHO’S NOT?

over the week ending March 18 “March 15” Broadcast 516,247

On March 15, China’s Consumers’ Day, CCTV held its annual evening broadcast exposing questionable product quality, this year honing in on e-commerce websites it accused of fraud and spurious advertising.

Bermuda Triangle Mystery Solved? 301,976

Scientists recently found several colossal caves around craters in the Barents Sea believed to have been formed by subaquatic methane gas explosions. Some speculate that the leaking gas might explain disappearances of vessels and aircraft in the socalled “Bermuda Triangle.”

Bottle Bigshot

AlphaGo vs. Lee Se-dol 277,258

Google’s artificial intelligence system, “AlphaGo,” defeated South Korean Go master Lee Se-dol at the ancient board game four games to one. The National People’s Congress, China’s legislature, and the Chinese People’s Political Consultative Conference, its top political advisory body, held their annual conferences in early March.

The Happiest Country 52,096

A report by Sustainable Development Solutions Network and Columbia University recently revealed that Denmark has surpassed Switzerland to become the world’s “happiest” place, with the US listed 13th and China 83rd.

Top Blogger Profile Ke Jie Followers: 510,724 by March 18 While the world was abuzz at the triumph of AI AlphaGo over Korean Go champion Lee Se-dol, Ke Jie, a 19-year-old Chinese player of the traditional board game, bragged on his Sino microblog that “even if AlphaGo defeated Lee, it cannot defeat me.” In the past year, Ke has won three world championships, most recently in January, when he defeated Lee by two games to zero. On March 5, at the 17th Nongshim Cup, a Go tournament held among South Korean, Japanese and Chinese teams, Ke once again defeated Lee and led the Chinese team to the country’s fifth Nongshim Cup championship, further emboldening Ke. “I am now temporarily the world’s No.1 Go player (‘temporarily’ is to show my modesty),” Ke tweeted, with many netizens accusing him of arrogance. On March 12, after Lee lost another game, Ke publicly challenged AlphaGo by tweeting “Come on, AlphaGo! It is time to face a more violent storm. Yes, I am arrogant.” In media interviews, however, Ke appeared more humble. He told NewsChina that he was actually shocked by the fast development of artificial intelligence and that he was only 60-70 percent sure he could defeat AlphaGo. “Computers’ strong ability to learn by themselves will mean rocketing technological progress within a short space of time. The longer I wait [to meet with AlphaGo], the less confidence I have,” he said. NEWSCHINA I May 2016

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

Two Sessions 180,582

Chen Tuling, an elderly man in Quanzhou, Fujian Province, made headlines because he donated 500,000 yuan (US$79,365) to his local senior center before his recent death. Media said that Chen saved every penny by collecting and selling discarded bottles. His dying wish was for the center to use the money to set up a foundation to assist elderly people in need.

Debt Burden A student surnamed Zheng who was enrolled at a local college in Zhengzhou, Henan Province, recently committed suicide by jumping off a building after allegedly accumulating debts exceeding US$150,000. Most of the loans were offered by online credit agencies targeting college students, with some of Zheng’s former classmates telling media that Zheng had secretly borrowed money using their names. Calls are growing for an investigation into China’s unregulated e-loan sector.

Graffiti Village Luowen Village in Yiyang, Hunan Province, has been dubbed China’s most beautiful “graffiti village” after 10 residential buildings were adorned with colorful frescoes. The local cultural and tourism bureaus revealed that they have run an ongoing competition since May 2015 to find the most gifted local artist, making the walls of over 1,000 houses available to participants.

Garbage Garden A wetland park in Tianjin has become a dumping ground after several unidentified garbage trucks began emptying their loads into the park’s lake. Sanitation workers denied that the trucks belonged to them, while the local environmental protection bureau argued that the body responsible for the park is actually the real estate management company in charge of a nearby residential community. Netizens slammed what they saw as petty buckpassing by the authorities.

Politics

Enclosed Communities

Gate Mail

Chinese government plans to replace ubiquitous enclosed residential communities with open blocks similar to those in Western countries. They may have a fight on their hands By Xie Ying

NEWSCHINA I May 2016

Photo by CNS

n February 22, the State Council, China’s cabinet, issued conian system was abolished in the Song Dynasty (960-1279), but a new guideline on urban construction and management resurfaced as a feature of urban planning in the Qing Dynasty (1644planning, including a proposal to end the building of en- 1912). closed communities. “[The construction of] enclosed communities Though the social control aspect of enclosed communities ceased will no longer be approved in principle. Instead, new residential com- to be a stated government priority following the fall of the Qing, in munities will be built in open blocks. The current enclosed communi- practice it endured beyond the founding of the People’s Republic in ties will be gradually opened,” the new guideline stated. 1949 as a product of the planned economy. In the 1950s, the building The same document intimated that China’s enclosed communities, of enclosed communities reached its peak when the Chinese governgated blocks of apartments surrounded by high walls or fences that ment allocated each government department, State-owned enterprise often have limited access points, carry a large responsibility for the (SOE), government-backed organization and academic institute a snarled traffic in urban arplot of land according to eas, particularly large metheir respective admintropolises, as they block istrative level and scale the “capillaries” of urban of operations, allowing road networks. This new them to build dormitopolicy aims to open these ries and other facilities for thoroughfares to allow a their employees and their smoother flow of traffic. family members. Many “We have to increase the enterprises and departutilization of limited land ments took advantage of and build a [new] traffic these benefits to establish system characterized by sizable, multi-functional narrow roads and densely communities that could distributed streets,” the function virtually indeguideline stated. pendently as an enclosed Some voices came out mini-society. in support of the new According to Chinese policy, believing it to be media reports, by 1975, a step forward in the esaround 78 percent of tablishment of a modern, Supreme People’s Court officials respond to media questions regarding open urban workers lived in communities, February 23, 2016 integrated country with an enclosed community improved access to public owned and operated by services. Others, however, the enterprise or govworried that “open comernment department in munities” would increase security risks and infringe on homeown- which they worked. This rate had climbed to 95 percent by 1978. ers’ property rights, particularly right of access to roads and facilities People’s Daily, the official newspaper of the Communist Party, for exwithin their community, the value of which is factored into real estate ample, presides over a vast, well-guarded community in Beijing. Beprices in China. sides residential buildings and necessary public facilities like dining Amid mounting controversy, the government issued a clarification halls, the community’s garden is well known, dubbed by other Chistating that the policy would not be implemented until after it un- nese media “one of the most beautiful gardens in the capital.” When dergoes a detailed investigation, also pledging not to “violate relevant People’s Daily came out in support of open communities following the laws.” Debates, however, continue to rage. issuance of the State Council guideline, netizens responded by urging the paper to take the lead by opening up its gated garden. Tradition According to some observers, the modern Chinese take on enclosed China has a long history of gated communities, which have argu- communities has its roots in the Soviet Union’s championing of “wide ably been a feature of urban life since the Qin Dynasty (221-207 BC), roads, large communities” as the ideal model for urban planning. when China’s first emperor enclosed residential buildings to better However, many experts have demonstrated that in reality such archicontrol and manage residents (at the time, a permanent nighttime tectural and infrastructural largess undermines efficient traffic mancurfew was maintained to further tighten social control). This dra- agement and significantly hampers effective urban planning. In 1952, NEWSCHINA I May 2016

Safety

Indeed, few people challenge the idea that such a move would ease traffic jams. For many, safety is the greatest concern. “How could I

A community fitted with security checkpoints to limit the free entry of individuals and vehicles in Zhengzhou, Henan Province

Photo by CFP

renowned architect Liang Sicheng reportedly cited a Russian counterpart as saying that “enclosed communities have isolated people from each other.” In 1964, Li Fuchun, China’s vice premier at the time, submitted a report to the central government on urban construction in Beijing, complaining that it was difficult for the capital to work out an integrated construction plan due to the vast swaths of land essentially blocked off by enclosed communities built by government departments and SOEs. Such dissent, however, failed to sway the central government. The enclosed community model was instead adapted to the construction of private, civilian residential buildings when China began to commercialize housing in 1998. Influenced by what observers called “traditional thought originating in the agricultural era,” evoking imagery of China’s once ubiquitous courtyard homes, Chinese homeowners overwhelmingly seemed to prefer enclosed communities. “Good compartmentalization, a high degree of privacy and large green spaces are three major elements that distinguish high-end apartments from ordinary ones,” a Beijing real estate sales agent surnamed Li told NewsChina. Incomplete data provided by Chinese media sources show that between 1991 and 2000, 83 percent of Shanghai’s residential communities were enclosed. Over that same period of time, Guangdong enclosed 54,000 residential communities, and by 2001, 95 percent of residential communities in Shenzhen that had obtained sales licenses were walled off from outsiders. Research by engineer and academic Li Jingwen indicated that communities belonging to central government departments and their auxiliary units occupy one-third of usable land in Beijing, leaving the capital with a paltry 7 percent for road construction. In New York City, one of the most densely populated areas on the planet, that number is 25 percent. “A city with 100-120 blocks [of housing] to every square kilometer of land is livable,” Zhou Qiren, an economist working with Peking University’s National School of Development, claimed at a public lecture on “urban ills” held in April 2015. “Although the roads in such cities are not that wide, those cities possess dense streets with all sorts of amenities and facilities built in.” “By contrast,” he continued, “the ‘free from capillaries’ structure such as that in Beijing, easily leads to traffic jams, as people are concentrated in one place. Traffic jams may, in fact, be caused not by high density, but rather low density.”

Photo by CFP

Politics

An open community established in Yibin, Sichuan Province

confidently let my son play in our community if cars are allowed to pass through it freely?” Gao Rui, a Beijing resident living in an enclosed community in Chaoyang District, told NewsChina. “Unlike Western countries, China has a dense population with limited land,” she added. A recent survey on sina.com.cn showed that nearly 76 percent of the 26,840 respondents “did not support” opening up enclosed communities, with “safety” cited as their single biggest concern. A similar survey published on Tencent’s news website, view.news.qq.com, delivered similar results: 75 percent of over 170,000 respondents stated that they “do not agree with opening enclosed communities.” Safety was what drove many of China’s newer residential communities to close their gates in the first place. A 1996 report by China Police Daily, a paper under the Ministry of Public Security, for example, revealed that after a local public security bureau of Beijing enclosed 10 nearby communities, the rate of bicycle theft in those communities NEWSCHINA I May 2016

fell by 91.5 percent, while the overall crime rate fell 85 percent. “Despite the presence of a security gate, nearly all the families in our residential unit have been victims of theft, including me,” An Yang, a resident of the large, open-plan Zhaohui Community in Hangzhou, Zhejiang Province, told NewsChina. “I just bought a new apartment here last November, and it was the community’s close vibe and privacy that convinced me to make a down payment.” Supporters of the policy change, however, believed that questions concerning security could be addressed with more police on the beat and the enhanced use of security guards – already a visible feature of urban life. “If a community is opened, the property management personnel [in that community] should shift their focus onto keeping the peace and maintaining order,” Chen Xi, a resident in Yuejiyuan, an open community in Beijing, told NewsChina. “Taking down the walls does not mean removing the guards.” According to Chen, a more significant reason behind the loud opposition to the government’s proposal is that many people are not willing to share their communal amenities and green spaces. “If Guanchengyuan Community [a high-end gated community beside Yuejiyuan] opened up, for example, all the people in the neighborhood – like me – would have access to their garden, their swimming pool, their exercise equipment. The homeowners might view that as a violation of their rights and interests,” Chen said. “But I think, in the government’s eyes, it is good to have more people share public facilities and encourage broader communication.” Chen’s view of the government’s motivations would appear to have some validity. In an interview with Caijing, a Beijing-based financial magazine, Li Tie, the urban construction director of China’s National Development and Reform Commission, claimed that the government intends to focus more on “land” planning, not merely “roads.” “Compared to large plots of land, a smaller plot is easier for the service industry to enter into and thrive… The final objective of land [planning] is to satisfy the demands [of residents living] on it,” he said.

Law

However, before any walls can be demolished, one major obstacle to the State Council guideline remains – China’s Real Right Law, the country’s top property rights statute. “Why should I share the facilities [in my community] with outsiders?” said Gao Rui, of Beijing’s Chaoyang District. “They did not pay for them. I did.” Gao’s opinion reflects the sentiments of homeowners opposing the new policy. Although supporters argue that all facilities would have to be shared by all communities should enclosure end, the law does not favor that outcome.

NEWSCHINA I May 2016

“Except for the roads that are clearly for public use, paths, facilities and buildings within a community’s boundaries should belong to all homeowners in that community,” Lu Junxiang, a lawyer from Beijing Crown & Rights Law Firm, told NewsChina. “These people have no obligation to open [their facilities] to the public.” “Based on the Real Right Law, an enclosed community that has already been built should not be opened up without the approval of a majority of residents,” he continued. “Even then, the government should pay proper compensation to the homeowners.” Even communities owned by government departments or SOEs are not that easy to open up, even with the blessing of the body in charge. Local residents in such communities, according to Lu, should also be compensated for the potential additional noise and pollution that would accompany such a change. “It is convenient to live in a large open community, given the retail facilities they have,” said Chen Xi of Beijing’s Yuejiyuan Community. “But the apartments in our community are cheaper than those in the nearby enclosed communities due to more noise and a poorer living environment. I think these issues are harder nuts to crack than the safety problem.” Following the State Council’s announcement, many people have criticized the government for “making unpredictable policy changes.” “I don’t understand why the government suddenly wants to open up communities. You know, just before and during the [2008] Olympics, the government called for enclosing more communities for better security and environmental conditions,” one netizen posted on Tencent’s news website, view.news.qq.com. Enclosed communities proved a hot topic at China’s Two Sessions this year, with many attendees appealing for the government to carry out a detailed investigation before implementing the new policy. In fact, as early as February 24, two days after the State Council guideline was issued, China’s Ministry of Housing and Urban-rural Development published a statement asking the public “not to misunderstand the State Council’s document.” The statement read: “It is merely a general guideline. We will implement the new policy gradually and tailor it to different regions. Opening communities is not a simple matter of breaking down walls.” Almost simultaneously, Cheng Xinwen, presiding justice of the Supreme People’s Court, pledged that the judiciary would “coordinate with relevant departments to prevent any violation of laws.” Yet, despite reassurances from the central government, many people have taken the announcement badly, worrying about a resurgence of the forced demolitions that caused much ill will during China’s era of breakneck development.

Politics

Demotions

Leap Into The Unknown A new method to punish corrupt officials, described in the media as “cliff-jumping demotion,” has increasingly found favor with anti-graft enforcers By Zhou Qunfeng and Yuan Ye

or decades, Chinese officials found in violation of the law or the Party’s internal code of conduct were summarily dismissed from their posts, expelled from the Party or found themselves in court. Yet after the 18th National Congress of the Communist Party of China (CPC) held in 2012, some corrupt officials were permitted to retain their Party membership and continue to work in the government, albeit after an abrupt demotion, a phenomenon described in national media as “cliff-jumping.” From the lowest-level clerical intern to Premier of the State Council, China’s cabinet, there are 15 ranks in the Chinese civil service. Some officials on the receiving end of “cliffjumping” demotions were removed from vice governorships, which are in the fourth or fifth tier of government depending on the region, and relegated to clerical posts in the ninth to 14th tiers. On January 29, 2016, the official website of the CPC Central Commission for Discipline Inspection (CCDI), China’s anti-corruption agency, ran an announcement claiming that in 2015, 10 officials who had been named to top-level posts by the Organization Department of the CPC Central Committee – the body responsible for appointments of senior Party and government officials – received “punishment according to party discipline” and were “demoted severely.” According to Chinese media, incomplete data indicate that about 15 officials ap-

pointed by the Organization Department have been demoted since the Party’s 18th National Congress. A growing preference for demotion over more severe and permanent punitive measures appears to be emerging. Whether the new trend will last remains unclear, but many anticipate a further formalization of the use of this new tool in the arsenal of the Party’s anti-graft watchdog.

The Fall

Among the 15 officials named by the CCDI were governor-level personnel and top Party personnel running State-owned enterprises (SOEs). Zhang Yun, former president of the Agricultural Bank of China, and Zhu Fushou, former general manager of Dongfeng Motor Corporation, both of whom held Party posts equivalent to vice provincial governorships, were demoted to county level or below. Zhao Zhiyong and Liu Lizu, both holding equally prestigious Party positions in Jiangxi Province, received the most stinging demotions – a seven-to-10 tier plunge that left them holding minor clerical posts. Wei Hong, former governor of Sichuan Province, was the highest-ranking official named by the CCDI as having been demoted. His fall was somewhat less precipitous – he was named to a vice mayoral post – a drop of up to five tiers. Some experienced even less dramatic changes in status, including Fu Xiaoguang,

former vice-governor of Heilongjiang Province, and Liu Zhiyong, former vice chairman of Guangxi’s People’s Political Consultative Committee, both of whom were demoted to mayoral level. However, as the gulf between the two levels in terms of relative seniority is still huge, both demotions were also viewed as “cliff-jumping.” Also, with the exception of Zhang Yun, all the demoted officials named by the CCDI were reportedly prohibited from taking “leadership” positions in their new jurisdictions. “Officials without leadership enjoy the same pay and welfare treatment as their peers. Yet compared to their powerful past [appointments], they will no longer wield administrative power,” NewsChina was told by an anonymous source close to the issue. By all accounts, however, these officials also face a major change in terms of their remuneration and welfare. According to official media, the average monthly salary of a governor-level Chinese official is over 10,000 yuan (US$1,537), falling on a sliding scale to a minimum 3,000 yuan (US$461) for a clerk. As most of the officials named by the CCDI are already in their 50s or 60s – close to mandatory retirement age – their political futures seem bleak. As government pensions are tied to the rank of an official at the time they retire, as are allowances for housing, vehicle use, staffing costs and medical care, NEWSCHINA I May 2016

such a damning demotion at such a late stage in an official’s career is both humiliating and destabilizing. “For a certain period of time, retired officials in postings at governor-level or above would still enjoy allowances for housekeepers and drivers. They would be given a separate room when hospitalized,” Su Hainan, vice chairman of the China Labor Association, told NewsChina. Other perks include large housing allowances, paid vacations, guaranteed business-class air travel and premium berths on trains. Such high-level officials also have clearance to read classified documents commensurate with their administrative rank, as well as maintain a private office and a secretary for a certain period of time after retirement. None of the officials named in the CCDI announcement can expect such luxuries once they retire. Media reports indicate none of the men have actually assumed the responsibilities of their new posts. An official with the Jiangxi provincial Party committee, speaking on condition of anonymity, told NewsChina that Zhao Zhiyong hasn’t been seen since being named to his new position. “He’s going to retire soon,” the source told our reporter. “How embarrassing it would be for a formerly high-level official who violated Party discipline to return to work as a clerk.” Yan Shiyuan, a vice governor-level official at Shandong Province, was demoted to a vice mayoral post. Another source, who declined to be named, told NewsChina that Yan “is basically living as a retiree.” “It is said that he is not in a bad mood. He spends his time enjoying botany,” the source added.

tion scandal surrounding a fellow official, and was also accused of “indiscretions” in his private life. Wei Hong was accused of ”disloyalty and dishonesty,” and having failed to demonstrate sufficient remorse for his disciplinary violations. Although demotion is enshrined in the Party’s internal code of laws as a legitimate punishment for wayward officials, it was rarely used prior to the 18th National Congress. In the past, when an official was dismissed in disgrace, provided they were not also expelled from the Party, their welfare and political status largely remained the same as their official rank remained unchanged. Analysts point out that the new punitive measure of “cliffjumping” demotions is viewed as a safeguard preventing disgraced Party personnel from staging a comeback. Zhuang Deshui, vice director of Peking University’s Center of Anti-Corruption Studies, said that demotion provides an alternative and more flexible solution to other punishments for disciplinary violations. It is harsher than a simple admonishment or the issuance of a formal demerit, but more “humane” than expulsion from the Party and the government. However, Zhuang also believes that as a trend, ”cliff-jumping” needs to be placed in a regulatory framework and made subject to cer-

tain standards. The current legal basis for demotion as a punishment is found in China’s Civil Service Law and the CPC Work Regulations on Selecting and Appointing Leading Cadres. “Related standards and detailed regulation should be implemented,” said Zhuang. “There should be clear provisions for the number of levels violators can be demoted. Thus, the general public can understand the purpose of demotion, while those punished will be convinced [of its severity].” Wang Yukai from the National School of Administration agrees. He told NewsChina that a quantified approach that matches demotions to offenders according to their rank and the severity of their violations – taking relative social impact and financial losses into consideration – would be “practical and clear.” It would prevent the “rule of man” – unaccountable, backroom decisions – from determining the severity of “cliff-jumping” demotions. 

The accusations against the CCDI list of disgraced officials vary. Other than unspecified “serious violations of Party discipline,” most were found to have participated in illegal activity. Zhao Zhiyong was accused of leveraging his position to receive hefty kickbacks. Zhang Tianxin, a vice governor-level official in Yunnan Province, was accused of “negligence that caused the loss of State assets.” Zhang Yu was embroiled in a corrup-

NEWSCHINA I May 2016

Political cartoon depicting Jiangxi official Zhao Zhiyong falling seven tiers from a deputy provincial governorship to a clerical post

Photo by CFP

Clearance

Cover story

Facing a volatile housing market, onerous overcapacity and mounting debt, China is facing an economic onslaught from all sides. The political realm, too, has thrown the leadership more than a few curveballs. By perusing the documents issued and speeches made at this year’s Two Sessions, the political event of the year, NewsChina has filtered the rhetoric to explain how Beijing plans to face its most pressing challenges

Photo by Xinhua

The 12th National People’s Congress, China’s legislature, convenes in Beijing’s Great Hall of the People, March 5, 2016

NEWSCHINA I May 2016

Photo by Xinhua

A delegate presses a button to vote at the National People’s Congress

Delegates follow the transcript of Chinese Premier Li Keqiang’s speech during the opening ceremony of the National People’s Congress

NEWSCHINA I May 2016

Photo by Xinhua

View from the top 17

Cover story

Two Sessions

Retooling Reform The Chinese market often thinks differently than those who attempt to command it. With better communication and a more thorough understanding of market forces, upcoming policies might have a better chance of bringing about their intended results

Photo by CNS

By Li Jia

Chinese Premier Li Keqiang delivers his government’s work report in the Great Hall of the People in Beijing, March 5, 2016

s China’s housing market building up a bubble rivaling that of Japan’s in the late ’80s, or the US’s before 2007? Will China’s debts implode and foreign exchange reserves hemorrhage? Will there be more massive job losses because of efforts to take on overcapacity? These are the hypotheticals that Chinese and international observers and investors can’t stop discussing, and exactly the ones that China’s policymakers are trying to avoid. A “good reserve of policy instruments” in China’s “toolkit” will tackle internal and external risks in order to achieve China’s growth target this year, Chinese Premier Li Keqiang said at a press conference on March 16. He spoke shortly after the conclusion of this year’s Two Sessions, the annual meetings of China’s top legislative body, the National

People’s Congress (NPC), as well as the country’s political advisory body, the Chinese People’s Political Consultative Conference. During the two-week NPC session, ministers of Li’s cabinet pledged to stabilize the housing market, relieve debts and overcapacity, and encourage innovation and entrepreneurship to secure the pace and quality of growth both this year and over the next five. The goal is to build a “moderately prosperous society” by 2020, an ambition set out in the government’s 13th Five-year Plan (2016-2020), which was approved by the NPC during the Two Sessions. It appears that the implementation of market-driven reform has recently been nudged higher up the central government’s agenda than ever before. This reform will test the resolution and skill of its designers. The biggest

challenge its architects face is that the market does not necessarily do as it is told.

Pressure Points

With US$1 million, you can buy 46 square meters of real estate in prime locations in Shanghai, or 58 in Beijing, respectively ranked eighth and 10th on a list of world cities with the highest property prices in 2015, according to a March 2 report published by real estate firms Knight Frank Residential and Douglas Elliman. Those 2015 figures are already significantly outdated because housing prices in China’s biggest cities have rocketed since the beginning of the year. A new, more worrying phenomenon is that various methods of financial finagling have helped underfinanced households in those cities to circumvent the minimum down NEWSCHINA I May 2016

payment requirement. As NPC delegate and mayor of southwestern China’s Chongqing municipality Huang Qifan warned during the meetings, zero down payment mortgages and soaring property prices were exactly the recipe that produced the US subprime mortgage crisis that hit in 2007. Meanwhile, less developed provinces and smaller cities, where 70 percent of China’s 739 million square meters of unsold real estate inventory is located, had to hand out subsidies to attract buyers. Despite this, the country’s National Bureau of Statistics released data showing that in January and February, housing prices in these areas lagged even further behind those in big, booming cities. The gap has been widening since property investment in China slowed down significantly in 2014 and saw nearly no growth in 2015. Taxes and fees for developed land were once local governments’ main cash cows. Since 2009, many local governments have borrowed huge sums of money from banks via the obscure operations of financing platforms, deluded by the fantasy of an everlasting property boom. An investigation by the NPC found accounts of contingent debts were somewhat murky. Methods of debt accumulation, as well as its breakneck pace, have become one of the two most worrying predicaments keeping analysts and China’s policymakers up at night. The other is China’s corporate debts. The country’s corporate debt-to-GDP ratio is staggeringly higher than those of the US, the UK and the average among G20 states. Much of this borrowed money was spent on inefficient production, causing overcapacity. As a part of the renewed efforts to deal with this phenomenon, about 1.8 million workers in the steel and coal industries, mainly in State-owned enterprises (SOEs) heavy with debt, will lose their jobs in 2016. This process will possibly involve writing off bad loans on banks’ balance sheets due to the shutdown of factories and increased public spending on relocating laid-off workers in order to avoid social unrest. Behind this debt buildup and the bank loans that supported the property boom is China’s huge supply of money that it has kept on the market for the past few years. China will relax its monetary policy further in 2016 NEWSCHINA I May 2016

to prop up growth. However, China’s foreign exchange reserves, the main source of China’s money supply, have fallen by US$790 billion as of February, having peaked in June 2014. There is concern that if this drop was caused by selling foreign exchange reserves to ease the yuan’s sharp depreciation in the context of a recent capital exodus, as widely speculated by the market, the remaining reserves could rapidly be drained. Separately, none of these issues is a major problem. Nor would they become a major problem in the future as long as the economy keeps growing robustly. However, they are all linked in one way or another, and together they put China’s fiscal and financial strength under a huge amount of stress.

White Knights

Specific solutions to each of these problems were announced at the Two Sessions. In regards to the out-of-control housing market, China’s central bank vowed to crack down on the illegal lending practice of funding down payments through real estate and online peer-to-peer platforms. Stricter restrictions on purchasing property and land supply have been announced to help big cities stabilize their housing prices both now and in the future. At a press conference during the NPC session, Chen Zhenggao, minister of housing and urban-rural development, expressed his “emotional” commitment to getting migrant workers settled in smaller cities where he sees housing markets with great potential. In the past two years, instead of renovating slums, the government has assisted some poorer residents to buy new apartments from developers through lowered prices or government subsidies. This arrangement will be further promoted this year to improve the condition of the property market and reduce unsold real estate inventory, both of which are goals listed in Li Keqiang’s government work report that was released during the Two Sessions. Many analysts recently found that China’s total debt-to-GDP ratio, well below the average of advanced economies’, is not as high as previously feared, thanks to the robust financial position of China’s households and the central government. While the country’s households are expected to save the hous-

ing market, the central government is ready to dig deeper into its own pockets to clear up the mess of local government debts and overcapacity. The 2016 budget plan, approved during the NPC session, has raised the public deficit to a record high of 3 percent of GDP, an international red line. Lou Jiwei, China’s finance minister, explained at a press conference during the NPC session that the additional deficit would be used to address some of the country’s thorniest issues. About US$15.4 billion or more will be spent in 2016 and 2017 to provide for SOE workers laid off in the new campaign to remove industrial overcapacity. This is to dispel local governments’ core concerns about the social unrest that typically accompanies mass unemployment. For years their resistance towards stopping financial support to so-called “zombie” SOEs has been regarded as one of the major obstacles to solving overcapacity.

By the end of Q3 2015 Non-financial sector debt, % of GDP 248.6 248 262.6 234.2

Private, non-financial sector credit, % of GDP 43.5 94 88.4 79.6

Private, non-financial sector bank credit, % of GDP 43.5 94 88.4 79.6

Household credit, % of GDP 43.5 94 88.4 79.6

Non-financial corporate credit, % of GDP 43.5 94 88.4 79.6

State sector credit at nominal value (unadjusted for inflation), % of GDP 43.5 94 88.4 79.6

China US UK G20

Source: Bank for International Settlements

Cover story

Another process racking up a large tab is closing the fiscal revenue gap left by reduced taxes. Easing operational costs is one of the five tasks outlined in the 13th Five-year Plan. Besides more tax rebates to small businesses and lower corporate contributions to social insurance, a sweeping tax reform involving local taxes will spread to all service sectors, including the property sector, starting May 1. This reform has already been in a trial phase for two years. As a result, total corporate taxes will be slashed, with local governments the most affected, according to Minister Lou Jiwei. Joerg Wuttke, president of the European Union Chamber of Commerce in China (EUCCC), said the tax reform and budgeted spending directed toward laid-off SOE workers stood out to him in particular. The EUCCC has been following China’s overcapacity efforts closely since 2009. As Wuttke explained to NewsChina, though European companies do not have a strong presence in those sectors, they regard lingering overcapacity as “damaging” to both China’s economy and the credibility of the Chinese government, and [this affects] their confidence in the Chinese market. He describes the tax reform as a “nanny State’s” warning to its children that in the future they will not be allowed to keep so much money on hand and do whatever they want, like supporting local zombie enterprises. Meanwhile, local governments are allowed to issue bonds regulated by the new budget law, local tax systems will be improved to finance local public services and money is ready to ease unemployment pains in SOEs. Wuttke said these are encouraging signs.

Naturally Naughty

The problems themselves have shown how difficult it is for even very targeted policies to achieve their intended results. For example, in early 2016, while all the restrictions in bigcity housing markets remained in effect, policymakers introduced lower mortgage rates and taxes specifically designed to boost the

markets of smaller cities. Contrary to design, those markets plodded forward, while real estate prices in megacities continued to run amok. Heavy debts were mainly built up by local governments and SOEs taking advantage of the big stimulus package introduced in 2008 and 2009 that was meant to cope with the sudden shock of the global financial crisis. Joint campaigns were co-launched by ministries several times over the past 10 years to get rid of outmoded overcapacity and install better facilities. The most recent previous campaign began in 2009. Yet despite these efforts, overcapacity grew. For instance, the country’s crude steel output, the biggest overcapacity culprit, increased by an annual average of 6 percent from 2010 to 2015, according to the Brussels-based World Steel Association. At the same time, China still needed to import high quantities of high-end steel products. One of the possible explanations behind why these policies are not bringing about their intended effects is that it is often the nature of the market to think differently than policymakers. This is true everywhere. The recent relaxed monetary policy in Japan and Europe that was meant to encourage corporate borrowing has not been successful, as banks are reluctant to offer loans at such low interest rates because that would squeeze their profits. As another example, China changed the way it set the official benchmark for its foreign exchange parity price in mid-August last year in order to give the market a bigger say, yet investors interpreted it as a sign that China’s economy was in worse shape than anticipated and the government was ready to depreciate its currency to boost exports. Some of these unexpected results are the market’s knee-jerk responses to certain policy tools. Big cities with more jobs and better public services attached to residents’ hukou, or permanent residence permits, are naturally much more attractive to property buyers, driving those cities’ frenzied housing prices. Favorable policies in the name of support-

ing innovation have incentivized investors to produce more solar panels than the market demanded. Increased communication with the market by China’s central bank since February and the US Federal Reserve’s decision not to raise interest rates have helped slow down the outflow of capital from China. Wuttke said the country’s reliance on highend steel imports was a result of quality Chinese steelworks being run out of business by zombie enterprises that ended up wasting financial resources and racing each other to the bottom. Thus, it is crucial to always think about market forces when choosing which tools should be used. Proposed SOE reform shows why this is so important. In this round of SOE reform, more of these enterprises are being pushed towards mergers and acquisitions instead of bankruptcy. While the Two Sessions convened, reports on workers protesting unpaid wages at Heilongjiang Longmay Mining Holding Group, a State-owned coal giant, attracted both Chinese and international media attention. Just a few days before, Lu Hao, governor of Heilongjiang Province, had told the media at the NPC meetings that such salary issues “did not exist” at Longmay. He later had to promise at a special press conference to arrange reimbursement for the workers’ overdue pay. The Longmay group was a result of the merger of several SOEs at the end of 2004. Longmay’s case demonstrated mergers do not necessarily make more sense than bankruptcy for SOEs, according to a March 16 statement by Zhang Wenkui, a researcher at the Development Research Center of the State Council. The way policymakers use their tools is as important as choosing the right ones. A man surnamed Zheng had to close his small coal mine in Shanxi Province about 10 years ago, after the local government set a larger capacity standard and his mine no longer complied. He did not complain, because he was given enough time to transition smoothly out of the industry. However, many of those NEWSCHINA I May 2016

NEWSCHINA I May 2016

Photo by Xinhua

who invested a lot in order to meet the new standards were soon forced to close anyway because the government raised the standards once again, this time without any grace period. Zheng thought many investors could have pulled through by upgrading their equipment if they had been allotted that same transition period. Thus, they could be better prepared for the drastic decrease in coal prices that was to come in the following years, rather than dropping out of the industry en masse and leaving the local economy in a mess. As he told NewsChina, Zheng realized from this experience that policy can have a huge impact on the survival of an entire industry. He saw the importance of a more predictable regulatory framework, one that is not subject to officials’ whims. He said he hopes the government concentrates on social standards and lets investors themselves decide whether or not to invest, based on market demand and legal standards. Understanding the market is critical for policymakers to work more effectively. For example, there are many national and local industrial funds to support innovation-oriented companies. Wuttke said the government needs to tell those companies that if they fail, they will be on their own. Lu Hao, Heilongjiang’s provincial governor, recognized he had incorrect information regarding the Longmay situation. Zheng said he believes the unemployment numbers resulting from the national campaign against overcapacity may be much larger than the government is forecasting now, because many contract workers in SOEs are not official employees and thus are less likely to be covered by the current paid relocation plan. The high cost of defending the yuan’s value during short-term market volatility has been controversial. Calls for more open social welfare access for residents without hukou have been growing. Reform is about constantly trying to improve. It is worth trying to communicate more with the market and society in order to make the results of reforms match their intentions. 

Some 1.8 million industrial workers face redundancy under new economic policies, including these coal miners in Datong, Shanxi Province, November 2015

2016 Targets - Maintain a GDP growth rate of 6.5-7 percent - Keep the Consumer Price Index increase at about 3 percent - Create at least 10 million new urban jobs - Keep unemployment rate of registered urban residents below 4.5 percent - Accomplish a steady rise in import and export volumes - Reach a basic balance in international payments - Ensure increases in personal income basically stay in step with economic growth - Reduce energy consumption per unit of GDP by at least 3.4 percent - Further reduce the release of major pollutants Source: English version of Chinese Premier Li Keqiang’s Report on the Work of the Government

Cover story

Economic Development

GDP

Targets set in China’s 13th Five-year Plan (2016-2020)

Share of permanent urban residents in China’s population

US$10.4tn

56.1%

US$13.8tn

60%

Per capita labor productivity

What will China look like in five years?

Share of registered permanent urban residents in China’s population

US$13,385

39.9%

US$18,462+

45%

Resources and Environment Arable land

Innovation

306m acres

12%

306m acres

15%

Investment in research and development (% of GDP) 2.1 2.5

Patents per 10,000 people 6.3 12

Sci-tech contribution to GDP growth 55.3% 60%

Share of households with fixed broadband access

CO2

1.32m acres

Decrease in carbon dioxide emissions per unit of GDP 6.7% (fuel combustion)

<5.36m acres (five-year total) Decrease in water consumption per US$1,538 in GDP 5.1%

18% (five-year total)

NH3 NH4+

SO2

Forestation

NOx

21.66%

23% (five-year total)

23.04%

Decrease in energy consumption per unit of GDP 5.6% 15% (five-year total)

Forest growing stock (volume of living trees of a certain diameter, an ecological indicator) 151m cubic meters

3% 10% (five-year total)

Share of non-fossil fuels in energy consumption

New land quota for construction

Decrease in chemical oxygen demand

3% 10% (five-year total)

Decrease in sulfur dioxide emissions 5% 15% (five-year total)

Decrease in nitrogen oxide emissions 9%+ 15% (five-year total)

Reduction in surface water worse than Class V, the lowest acceptable national standard 9.7%

PM2.5

<5%

Reduction in density of fine particulate matter (PM2.5) in the 265 cities at or above the prefectural level not up to the national standard N/A

% of days of the year with good or excellent air quality in the 338 cities at or above the prefectural level 76.7%

165m cubic meters

Decrease in ammonia nitrogen emissions

>80%

18% (five-year total)

Ratio of surface water at or better than the Class III national standard (for water used for drinking, fishing and swimming) 66%

40%

>70%

70%

Share of mobile broadband users in China’s population 57% 85%

Livelihood Annual growth of disposable income per capita 7.4%

10.23

6.5%+

10.80

New urban jobs

In 2015

Average number of years in school for working-age population

People lifted out of poverty

13.12m

14.42m

50m (five-year total)

55.75m (five-year total)

By 2020

Sources: Xinhua News Agency, China National Bureau of Statistics, China Ministry of Land and Resources, China Ministry of Energy Protection, International Energy Agency

Share of population covered by basic pension insurance 82% 90%

Rebuilt apartments in rundown urban areas (units) 6.01m 20m (five-year total)

Life expectancy 76.34 86.34 NEWSCHINA I May 2016

Two Sessions

Playing Politics

With economics at the forefront of this year’s agenda, China maintains its cautious but firm positions on political issues By Yu Xiaodong

s China’s economic slowdown has become a global concern, the country’s economic policies have dominated the government docket and monopolized media coverage of this year’s Two Sessions, the annual political gatherings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC). But, beyond the economic arena, both meetings conveyed delicate yet important messages revealing Beijing’s perspective toward the various political challenges it faces in 2016. One of the most-watched political issues of this year’s Two Sessions was the new Charity Law, China’s first piece of legislation regulating this sector. The law eases restrictions on fundraising and operations for charity organizations, and was passed on March 13 by the NPC, a major function of which is to enact legislation, and will become effective September 1. Despite an overall trend of rapid growth in charitable donations in the past decade, during which the amount given increased more than tenfold, from 10 billion yuan (US$1.54bn) in 2004 to 104 billion yuan (US$16bn) in 2014, China remains far behind most of the rest of the world in terms

NEWSCHINA I May 2016

Photo by CFP

Charity Law

Chinese officials answer questions from the press as they walk the so-called “ministers’ corridor” in Beijing’s Great Hall of the People, March 16, 2016

of giving. Out of the 145 countries and regions listed on the Charities Aid Foundation World Giving Index for 2015, China came in second to last. A major setback is a general lack of confidence in charities’ authenticity, especially following scandals in recent years that have tarnished the reputation of domestic philanthropic organizations as a whole. The new law appears aimed at fixing

various institutional problems underlying China’s ailing charity sector. It liberalizes restrictions on registration, fundraising and donations; offers tax cuts for donations; and improves regulations on transparency. Currently, charity groups can only register legally through a State-run “master” organization. Under the new law, they will be able to register directly with the Ministry of Civil

Affairs, although foreign-run groups are required to register “in cooperation with Chinese charities.” The new law relaxes the restriction on fundraising by allowing any registered group that has been operating for two years to seek donations from the general public. The law also offers tax credits for donations made by corporations, though it only applies if the donated amount is lower than 12 percent of the corporation’s profits. To tackle the public’s low level of trust in charities – especially the country’s largest, government-run foundation, the Red Cross Society of China, which has been implicated in a number of flashy, high-profile scandals in recent years – the law requires donationdependent charities to publish annual reports that specify staff pay and benefits. In addition, these financial reports must be audited. While the new law has been widely welcomed, activists remain concerned and view it with a critical eye. Many are worried about the implementation of the law at the local level, as local government agencies tend to distrust private charitable organizations and lack experience working with them. Moreover, the law’s narrow scope covers only “charitable groups,” and not organizations that would have been included in a broader term, such as “non-profit organizations.” Many are concerned that public interest groups, such as human rights organizations and environmental groups, will continue to be tightly restricted. Activists are particularly concerned that the law’s ban on activities that “threaten national security,” without detailing how this allegation would be defined, could lead to abuses in implementation. By passing the Charity Law, authorities have taken a major step towards promoting a

Photo by CFP

Cover story

Chen Guangbiao (center), a Chinese tycoon, gives donations to earthquake victims in Yingjiang, Yunnan Province, March 16, 2011

healthy charity sector, but it appears that the leadership is not yet ready to loosen its grip on other civil organizations.

Defense Budget

China watchers follow the Two Sessions closely, as China’s leadership often drops hints about its views on a variety of issues during the annual meetings. This year was no exception. Among a wide range of figures that are released during the annual meetings, perhaps the most highly anticipated number, apart from China’s official GDP growth target, is the annual military budget. On March 5, China announced that national defense spending will increase by 7.6 percent to 954 billion yuan (US$147bn) in 2016, the lowest percentage increase since 2010. Between 2011 and 2015, China’s military expenditure saw a five-year run of double-digit increases, following a hike of 7.5 percent in 2010. The relatively low figure this year surprised some, as various Hong Kong and overseas

Chinese media groups had predicted that China’s defense budget would grow by 20 percent following the recent launch of ambitious military reforms, which aim to modernize the country’s military. In an interview with the State-run Xinhua News Agency, Major General Chen Zhou of the People’s Liberation Army Academy of Military Science described that smaller increase in defense expenditure as “a prudent and moderate move,” in line with China’s “economic and social status quo.” Challenged with an economic slowdown, China’s economy expanded by 6.9 percent in 2015 and government revenue increased by 8.4 percent, marking the lowest such growth figures since 1990. Apart from economic concerns, some analysts argued that this modest increase in military expenditure is a signal that China seeks to lower tensions regarding territorial disputes in the South China Sea, where a confrontation with the US has become increasingly likely as WashNEWSCHINA I May 2016

Photo by CFP

Delegates representing various sectors sing China’s National Anthem in the Great Hall of the People in Beijing at the opening of the Two Sessions

ington has ramped up its freedom of navigation operations in the region. In a separate report released on March 13, Zhou Qiang, president of China’s Supreme People’s Court, announced that China will create an “international maritime judicial center” to protect its national sovereignty and maritime rights. China has refused to participate in an arbitration case brought by the Philippines at the Permanent Court of Arbitration in The Hague regarding China’s maritime claims in the South China Sea. The move to establish an international maritime judicial center comes as the world waits for the Hague ruling to be issued in May. So far, there are few specifics on how China’s judicial center will operate, but it could become a major focal point in the coming months.

Across the Straits

Beijing’s Taiwan policy was also a major focus of this year’s Two Sessions. Earlier this

NEWSCHINA I May 2016

year, pro-independence Democratic Progressive Party chairwoman Tsai Ing-wen defeated the ruling Kuomintang (KMT) Party candidate in the general election, and will assume the island’s top leadership position on May 20. Tsai has pledged to maintain the “status quo” of the cross-Straits relationship, but does not accept the 1992 Consensus, which represents a principle agreed upon by the KMT and Beijing in 1992 that there is “One China,” with both sides free to interpret this concept individually. In recent months, Beijing has repetitively warned that the 1992 Consensus is the political foundation of the cross-Straits relationship, and the failure to endorse it will severely damage the Beijing-Taipei bond. As Tsai’s May inauguration day approaches, her vague stance has put the Chinese mainland increasingly on edge. On March 5, in a meeting with Shanghai delegates during the NPC session, Xi Jinping further delineated Beijing’s position. Xi reit-

erated the significance of the 1992 Consensus and urged the Taiwanese side to “both recognize the historical reality of the 1992 Consensus and acknowledge its core significance.” Xi said: “We will resolutely contain... secessionist activities in any form, safeguard the country’s sovereignty and territorial integrity, and never allow the historical tragedy of a split nation to happen again.” Without mentioning Tsai specifically, Xi said Beijing’s policy “will not change with the changes in Taiwan’s political situation.” Xi’s statement appears to be a response to a speech Tsai made in January, in which she directly addressed the 1992 Consensus issue for the first time. She said she would accept the 1992 meetings as a “historical fact,” but fell short of accepting the 1992 Consensus in principle. Almost immediately after the Two Sessions’ conclusion, China announced on March 17 that it had resumed diplomatic relations with Gambia, a country which had maintained official ties with the Republic of China, Taiwan’s official name, for two decades. Gambia suspended its diplomatic relationship with Taiwan in 2013. This latest gambit has been widely interpreted as a warning to Tsai. Under the administration of Ma Ying-jeou, Beijing and Taipei had agreed on a “diplomatic truce.” Many are now concerned that truce could turn sour after Tsai assumes office, making the cross-Straits relationship one of the biggest uncertainties Beijing will face in 2016. By and large, occupied with the daunting task of maintaining China’s economic growth, the central leadership has adopted a low-profile, prudent but firm position toward the various contingencies it faces in the political and security realm. 

Photo by Xinhua / KCNA

International

Official North Korean propaganda photos depicting amphibious military drills, March 20, 2016

North Korea Crisis

Precarious Politicking

With the Korean nuclear crisis further complicated by the growing regional rivalry between China and the US, Beijing is finding itself with little room to maneuver when it comes to achieving its dual goals of North Korean denuclearization and maintaining stability in its own backyard By Yu Xiaodong

n March 2, after two months of negotiations following North Koreaâ&#x20AC;&#x2122;s latest nuclear test, UN Security Council members, including both China and the United States, finally agreed on new and tougher sanctions against Pyongyang.

Following the passing of the sanction package, it was reported that North Korean ships had been banned from docking at Chinese ports. Earlier, in late February, Chinese banks were said to have either frozen accounts belonging to North Koreans, or suspended de-

posits or withdrawals by their owners. However, with a backdrop of an escalating regional rivalry between the US and China, the two sides continue to disagree over how the crisis should be handled. Differences look set to further complicate the situation on the NEWSCHINA I May 2016

Korean Peninsula. Almost immediately after the Security Council vote, the US and South Korea announced that they had commenced grouplevel talks about the deployment of a USmade Terminal High Altitude Area Defense (THAAD) system in South Korea. Discussions between Seoul and Washington about the deployment of the advanced missile defense system have been ongoing for several years, and were previously held in committee by robust opposition from China. Although THAAD is said to be targeting the potential launch of North Korean ballistic missiles, China is concerned that, with an operational surveillance range of 2,000 kilometers, such a system installed in South Korea would enable the US to monitor activities in much of eastern and northern Chinese airspace. After Pyongyang’s nuclear test in January, the THAAD issue was raised again by Seoul, with a February 7 announcement that it would begin official talks with the US about deployment, triggering a diplomatic spat as both Beijing and Seoul summoned each other’s ambassadors to protest their respective positions on the issue. Unexpectedly, in the run-up to talks on fresh sanctions against North Korea in late February, US officials became vague on the THAAD issue, saying that no official talks had so far been convened, and retracting a previous Pentagon statement that formal consultation was “ongoing.” Many believed the move was a diplomatic tactic aimed to mollify China and obtain Beijing’s backing for expanded UN sanctions. The resumption of the THAAD talks was labeled by many Chinese observers as “a stab in the back,” an allegation US officials have been quick to refute. As US Assistant Secretary of State for East Asian and Pacific Affairs Daniel Russel said: “There’s no connection between what is going on in the diplomatic track in the UN Security Council and the question of the deployment of THAAD… THAAD is not a diplomatic bargaining chip.”

NEWSCHINA I May 2016

Photo by Xinhua / KCNA

THAAD

Official photograph purporting to show Kim Jong-un observing the test launch of ballistic rockets

One Stone, Two Birds?

But many Chinese analysts believe that by conducting talks on the deployment, the US sees an opportunity to kill two birds with one stone – appearing to take a firmer stance on North Korean bellicosity while advancing its “pivot to Asia” policy by bolstering its regional military presence. Beyond the potential military and strategic benefit to the US of having the missile defense system installed on the Asian mainland, even discussion of its potential deployment, which may drag on for quite some time, could drive a firmer wedge between China and South Korea, whose relations have already deteriorated in the wake of the latest North Korean nuclear test. In the past couple of years, diplomatic relations between China and South Korea experienced something of a honeymoon, with Seoul seen as increasingly leaning Beijing’s way on many issues – a warming of ties that was viewed with consternation in Washington. Not only did South Korea join the China-led Asian Infrastructure Investment Bank, it also struck a bilateral free trade deal with China, currently its largest trade partner. In 2014, exports to China accounted for 26 per-

cent of South Korea’s total outbound trade, and in 2015, South Korea replaced Japan as China’s second-largest trading partner. Beijing warned that the deployment of the THAAD system in South Korea might damage the bilateral relationship, to which Seoul reacted with indignation, accusing China of ignoring the country’s sovereignty in matters of national security. As a steadily sweetening bilateral relationship suddenly turns sour, ongoing discussion of the potential deployment of THAAD will likely hold back any attempt to repair diplomatic ties. Moreover, by maintaining a high level of military pressure on North Korea, to which Pyongyang has responded with further defiance, China is also concerned that whatever bargaining power it still retains with the Kim administration will be further diminished.

Tied Hands

From a Chinese perspective, as the Korean nuclear crisis is increasingly intertwined with an ongoing regional rivalry between the US and China, Beijing has been backed into a corner. On the one hand, China is irked by Pyongyang’s stubborn commitment to developing a nuclear arsenal and its provocative

International

Photo by Xinhua / AP

yun, senior advisor of the actions, but, on the other, is China Institute for Internawary of American strategic intional Strategic Studies, and tentions behind its continued published in late January on military buildup in the Pa81.cn, the news portal opercific. The result is that China ated by the PLA. sees no advantage in joining Attributing responsibility the US and South Korea in for the recent escalation in taking decisive action against regional tensions to North Pyongyang. Korea, South Korea and the If the Kim regime were to US, which, Wang stated, “recollapse, China would not fuse to return to the Six-party only face a probable flood of Tourists at South Korea’s Imjingak resort in Paju-si city, close to the DMZ, Talks and provoke each other North Korean refugees across March 18, 2016 with unwise movements,” its northeastern border, but Wang wrote that “China is would also lose a strategic under the threat of turmoil buffer zone, potentially placand war on its doorstep and ing forces friendly to the US must take strong countermeasures.” on its doorstep. troops and more than 300,000 South KoreCriticizing almost all other concerned parIn an interview with Hong Kong-based ans, and with drills featuring “beheading opmagazine Zijing, Qiao Liang, a major general erations,” “high-density strikes” and a mock ties, including North Korea, South Korea, in China’s People’s Liberation Army (PLA), invasion of Pyongyang, this year’s program is the US and Japan, for their roles in the crisis, admitted that, on the North Korean issue, believed to be the largest-scale series of mili- the article went on to urge China to “make “China’s hands are tied.” According to Qiao, tary exercises held by the two sides since the military preparations so as to respond to any possible war on the Korean Peninsula.” the real problem with the Korean nuclear end of the Korean War. “China should adjust its military deploycrisis is the US refusal to consider providing In response, North Korean leader Kim security assurances to North Korea, as such Jong-un ordered the North Korean military ment along its northeastern border and in assurances would illegitimize much of Wash- to be in “preemptive attack” mode and “be its territorial waters as early as possible, and ington’s military presence in northeastern ready to use its nuclear weapons at any time,” make military and diplomatic preparations to respond to various possible hazards,” it Asia. according to its state media. continued. “The key to the North Korea nuclear issue It had been previously reported that China Self-Centered now lies in US hands. What China can do is had deployed several thousand additional Challenged by escalating tension and an to promote dialog,” said Qiao. unprecedented scenario in which it has seen troops along its border with North Korea folQiao’s view appears to largely reflect the ofits relationships with North Korea, South lowing Pyongyang’s fourth and latest nuclear ficial stance of China’s leadership. Amid neKorea and the US are deteriorating simultest. gotiations on further UN sanctions against On March 8, when asked at a press conferNorth Korea, Chinese diplomats pushed for taneously, China has seemingly tweaked its rhetoric regarding the Korean nuclear crisis. ence whether China would provide military a “parallel track approach” as a “fundamental Instead of repeating its longstanding overaid to North Korea in the event of another solution,” meaning to simultaneously discuss all principles on the Korean Peninsula isKorean War, Chinese Foreign Minister Wang denuclearization of the Korean Peninsula sue, namely denuclearization, stability and Yi chose to remain evasive. “We would like to and replacing the Korean armistice with a dialog, China has begun to demonstrate an offer aid and support if North Korea seeks permanent peace agreement. (The 1950-53 development and security, but we would not increasingly inward-looking stance, reiteratKorean War ended with a cease fire rather tolerate it if North Korea sought to advance ing its bottom line that China will not allow than a peace treaty). its nuclear program,” he said. “turmoil and wars on its doorstep” without But so far, the US and South Korea have As almost all parties involved in the Koexplicitly naming potential threats or giving shown no interest in a proposal which largely rean crisis are further entrenching themselves any hint as to what Beijing’s reaction to such echoes the longstanding demands of North in their respective positions, China will face a situation might be. Korea. On March 7, the US and South Korea some difficult choices as the situation appears This new perspective was summarized in launched extensive war games in an annual set to become even more volatile. a commentary piece written by Wang Haishow of force. Involving 17,000 American 

NEWSCHINA I May 2016

Earthquake Monitoring

Seismic Shift

China aims to build over 200 overseas seismic monitoring stations, mainly in One Belt, One Road countries prone to devastating earthquakes, to minimize damage and mitigate economic losses among future business partners By Xu Fangqing

ince 1900, 75 earthquakes causing at least 1,000 fatalities have shaken the regions covered by China’s One Belt, One Road initiative, an economic plan Chinese President Xi Jinping announced in late 2013. The quakes’ total death toll exceeded 1.2 million. Of these deaths, 34 percent occurred in the past 20 years alone. To counteract the threat of future disasters, the China Earthquake Administration (CEA) began analyzing seismic activity and risk in One Belt, One Road countries within months of Xi’s announcement, mapping out an emergency rescue and disaster prevention plan based on establishing seismic network stations. By minimizing the scale of earthquake damage, China aims to lessen economic costs to countries participating in the One Belt, One Road initiative, the goal of which is to use infrastructure and trade improvements to weave together the regions connected by the land-based Silk Road Economic Belt and the oceanic 21st Century Maritime Silk Road, thereby bolstering the economies of all parties involved. Li Li, a researcher with CEA’s Institute of Geophysics and deputy director of Beijing National Earth Observatory, has seen the effects of these natural disasters with her own eyes. She led a team of Chinese researchers who traveled to Nepal last November to investigate the feasibility of establishing a seismic monitoring network in a country still recovering from a 7.8-magnitude quake seven months prior. NewsChina recently sat down with Li to discuss the risk of earthquakes in One Belt, One Road countries and China’s role in addressing potential future calamities. According to Li, countries in the area have an urgent need for antiseismic protection and emergency relief, but most of them do not have the resources to conduct independent research and develop their own seismic networks. The CEA has recently sped up the construction of monitoring stations and implementation of staff training in One Belt, One Road countries. The networks in Myanmar, Laos and Indonesia are already up and running, the Pakistan network has been completed, Kenya’s is NEWSCHINA I May 2016

under construction and those in Sri Lanka, Bangladesh and Nepal are about to break ground. NewsChina: What are the main reasons One Belt, One Road countries are at high risk for earthquakes? Li Li: The Silk Road Economic Belt extends over the Alpide seismic belt. [The Alpide is the second-most significant seismic belt, after the Pacific-encircling Ring of Fire. It stretches from the Mediterranean to the East Indies and accounts for about 17 percent of the world’s major earthquakes.] Affected countries include Iran, Turkey and five Central Asian countries; mainly developing countries with large concentrations of people. These regions have a history of suffering at least one massive quake a year, resulting in heavy casualties and economic losses. The 21st Century Maritime Silk Road mainly involves maritime economies. Their biggest risk is tsunamis. For example, Indonesia’s 2004 tsunami and the 1908 tsunami in Italy each killed over 200,000 people. Nowadays, One Belt, One Road regions are witnessing rapid urbanization and population growth. Coupled with their buildings’ generally poor resistance to earthquakes, the potential damage that could be wreaked by future quakes and tsunamis is mounting, making it more likely that even moderate quakes will be able to claim huge casualties and further challenge the affected countries. NC: After China unveiled the One Belt, One Road initiative, Chinese enterprises stepped up their global investment. Regarding the risk of earthquakes, to what should these enterprises pay attention? LL: Risks exist in the planning and construction [of businesses] anywhere; no place is completely safe from the threat of natural disasters. Take China’s Yunnan and Sichuan provinces and [the western region of] Xinjiang for example – just because they experience a lot of earthquakes doesn’t mean people can’t live there or that the economy can’t flourish. In China’s eastern regions, where massive earthquakes

International

Quakes with death tolls exceeding 1,000 in the Alpide seismic belt over the past 20 years

Algeria

Tajikistan

Turkey Iran

Silk Road Economic Belt

Afghanistan Pakistan

Nepal India Maritime Silk Road

Indonesia

rarely occur, minor quakes can also cause panic and economic loss. In a word, we have to face up to earthquake risk. Quake characteristics differ throughout the Belt and Road, so the ways Chinese enterprises deal with them should differ, too. A quake safety evaluation should be conducted before companies begin constructing roadways, laying pipeline or investing in other large-scale infrastructure projects. When it comes to earthquake safety evaluation, China’s technology and management are both very well developed, so other countries can draw upon our experience in these areas. When looking into countries along the maritime road, Chinese enterprises interested in doing business there should focus on whether or not a tsunami warning system is set up and tsunami information is available quickly. NC: Is there a mandatory earthquake safety standard for enterprises? LL: Yes, there is a safety evaluation system… For major construction projects, a comprehensive safety evaluation is required, including the assessment of the area’s quake history and the possibility of future quakes, as well as their potential severity. Local conditions have to be taken into account. Anti-seismic standards differ in various areas and for different construction projects. Making a building earthquake-proof may increase construction costs

by 5 to 8 percent. Enterprises should perform quake safety evaluations before investing in major projects and, if possible, maintain close contact with local seismic monitoring organizations. In some countries, quake information is released in a timely fashion, but for those countries where information is not updated frequently, businesses can contact Chinese earthquake monitoring institutions, like the China Earthquake Networks Center, which have a grasp on basic quake activity worldwide. NC: CEA’s construction of seismic networks overseas began more than 20 years ago. What is the effect of this work on the One Belt, One Road countries? LL: More than 20 years ago, the CEA began to extend its overseas seismic station construction for several purposes: to make up for the low density of seismic stations in China’s neighboring countries and enhance their capability to locate earthquakes; to boost technological cooperation amongst ASEAN countries; to serve national defense, diplomacy and geoscientific research; and to provide quick and accurate seismic information to policymakers. Over the years, the CEA has set up 40 total seismic stations in Algeria, Myanmar, Laos, Indonesia, Pakistan and Samoa through support and construction aid. The stations were built to observe earthquakes NEWSCHINA I May 2016

Number

Date

Country

Death Toll

May 10, 1997

Iran

1,567

February 4, 1998

Afghanistan

2,323

May 30, 1998

Afghanistan-Tajikistan boarding area

4,000

August 17, 1999

Turkey

17,118

January 26, 2001

India

20,085

March 25, 2002

Afghanistan

1,000

May 21, 2003

Algeria

2,266

December 26, 2003

Iran

31,000

December 26, 2004

Indonesia

227,898

March 28, 2005

Indonesia

1,313

October 8, 2005

Pakistan

86,000

May 26, 2006

Indonesia

5,749

September 30, 2009

Indonesia

1,117

April 25, 2015

Nepal

8,786

Source: Li Li

both for China and the host countries. In recent years, we’ve mainly concentrated on countries who are prone to massive quakes and who need China’s assistance. Previously, priority was given to countries bordering China with a need for tsunami warning systems. Since 2012, the CEA has cooperated with Kenya, Sri Lanka and Bangladesh on earthquake observation and research. CEA experts finished a field survey at the end of 2015 that explored the establishment of a seismic network and staff training courses in Kenya, marking the first time Chinese earthquake experts will lead classes on seismic monitoring at overseas universities. From an earth sciences angle – many of China’s disastrous quakes are transnational. Promoting China’s earthquake protection technology abroad, localizing it and improving international communication will in turn boost China’s engineering and industrialization of antiseismic technology. NC: In terms of the construction of seismic networks, how does China compare to other countries? LL: At present, China has over 1,000 seismic stations within its borders and the China Earthquake Networks Center is the largest in scale globally. The US has also set up more than 150 seismic stations abroad to observe earthquakes long-term. Currently, China’s overseas seismic stations are not capable of monitoring global quakes [at or NEWSCHINA I May 2016

below] a medium scale. China is a quake-prone country, so we’ve had to be both comprehensive and detailed in our seismic monitoring and disaster reduction. While China is not the world’s [earthquake protection] technology leader, our technology is advanced, and we’re capable of assisting foreign countries in terms of seismic equipment, technology, software and timely reporting. Previously, when a quake broke out, it was hard to locate its epicenter within half an hour. But now, China can pinpoint the epicenter of a 4- or 5-magnitude quake within a few minutes or even seconds, and our technology is improving constantly. NC: What is China’s goal in building overseas seismic stations? LL: On the one hand, China needs an even distribution of seismic stations worldwide. If two stations are too close, that is not very useful. Stations should be built evenly along seismic belts to obtain quake information from around the world more quickly. Generally speaking, it would be ideal for China to build 200 or more seismic stations worldwide. On the other hand, quakes that occur in bordering countries can also cause severe damage in China, particularly the massive quakes, so constructing seismic stations in these areas is of great importance to minimizing earthquakes’ disastrous effects for all those at risk.

Society

Pediatrician Shortage

Far From Child’s Play

Pediatric medicine is seen as a career of last resort amongst Chinese medical students – despite huge demand, those who qualify face meager salaries, high pressure and oppressive workloads

Photo by Wu fang

By Wang Siqian

Two children in treatment for leukemia play on the roof of a house behind Anhui Provincial Children’s Hospital

t 8 AM, 60-year-old Liu Xiaoyan’s consulting room is crowded with six parents. As the director of dermatology at the Capital Institute of Pediatrics, she is the first specialist in this busy hospital to open a separate surgery practice. Outside the room, more than 100 parents and children from across the country are waiting to see her. There are five other dermatologists at the hospital, but they are busy treating more than 1,000 children

every day. In 2015, the institute treated nearly 2.17 million children, placing severe strain on its staff of 300. At Beijing Children’s Hospital, another reputable pediatrics center in the capital, patient numbers last year topped 3.17 million. According to statistics from the National Health and Family Planning Commission (NHFPC), there are 220 million children under the age of 14 in China, accounting for 20 percent of the total popuNEWSCHINA I May 2016

lation. Yet the country is only home to 99 children’s hospitals. In 2014, there were 2.12 doctors for every 1,000 patients, but only 0.53 pediatricians for every 1,000 children. 118,000 qualified pediatricians now practice in China, some 200,000 fewer than the number required. “Heavy workloads, poor remuneration and sometimes dangerous working conditions are mainly to blame for the shortage of pediatricians,” Wang Bin, director of pediatrics at Zhujiang Hospital of Southern Medical University, told NewsChina.

Plight

Xu Pengfei, chief pediatrician at the Beijing-based China-Japan Friendship Hospital, has been working in the hospital’s pediatrics department for 28 years, including 25 years on the night shift. Every night, a single on-duty pediatrician might have to give emergency treatment to some 200 children between 4:30 PM and 8 AM. “After the night shift, I was unable to drive due to the mental stress and exhaustion,” he said. “Just stepping on the gas pedal was an effort.” The customary eight-hour shifts assigned to most Chinese doctors are unavailable to most of the country’s pediatricians. Some children’s hospitals even require doctors to work on the back of a 24-hour shift, meaning some can be on duty for up to 28 hours. At the Capital Institute of Pediatrics, a “night shift” for a pediatric surgeon typically means 36 hours of non-stop work, while a pediatric physician might have to work 48 continuous hours before clocking off. Nowadays, Xu does not need to work nights. 10 young doctors now work the night shift and in the ER. However, when NewsChina visited, one doctor was on sick leave while four more were pregnant and unable to work night shifts, effectively doubling everyone else’s workload. In 2015, three of Xu’s colleagues quit “because of high pressure.” Recruiting pediatricians has been a problem for many children’s hospitals. In 2016, only one candidate interviewed with the pediatrics department of the China-Japan Friendship Hospital. Today, Chinese hospitals prefer candidates with clinical doctorates, as research doctors still need three years of training on the wards before they can treat patients, but some institutions will take whatever they can get. “We can recruit either [type of candidate] but even candidates with research doctorates are reluctant to apply,” Xu said. “We are not competing for talent, we are competing for ordinary doctors.” Wang Bin echoes Xu’s frustration. He told our reporter that China’s medical schools have been expanding enrollment and a growing number of graduates are joining the workforce but “it remains hard for pediatrics departments to recruit doctors.” According to healthr.com, a major Chinese healthcare recruiting website, as of the end of January 2016, job vacancies for pediatricians in China’s major cities rose by 18 percent year-on-year. The shortage in second- and third-tier cities was even worse. In the first half of 2014, not one candidate applied for a job in pediatrics during

NEWSCHINA I May 2016

a public recruitment drive in Dalian, Liaoning Province. More than 40 pediatricians in the coastal city quit their jobs in 2014. “Very few medical school graduates would choose to become pediatricians,” Wang said. “Graduates who want to work in pediatrics tend to be those who cannot land a better job.” In 1999, China stopped offering pediatrics as an undergraduate major, cutting off what had provided a stable supply of pediatricians. On January 26, 14 members of the Chinese People’s Political Consultative Conference of Sichuan Province wrote an open letter to the Ministry of Education (MOE), calling for the reinstatement of undergraduate pediatrics at the country’s medical schools. The NHFPC is still consulting with the MOE over the possibility. Experts have pointed out that ophthalmology, surgery and dermatology also are not offered as areas of study at the undergraduate level, but that this has not led to a similar shortage of personnel in these fields. There is a saying popular among Chinese doctors which jokes that “ophthalmology is gold, surgery is silver and pediatrics is garbage.” Several doctors we spoke to denied that the failure to offer pediatrics as an undergraduate major is the main cause of the shortage of pediatricians. They voiced support for the current preference for a broad starter curriculum in medical schools. In the opinion of Wang Bin, reinstating undergraduate pediatrics is meaningless if students are forced into the field by failing to make the grade in other subjects. “Who will choose pediatrics if they are going to be ostracized and disrespected?” he said. Li Xin, a clinical medical student at a major university in Jiangsu Province, told our reporter that seniors at her university could opt to take pediatrics, with the university offering scholarships and postgraduate recommendations for those who take this option. Nonetheless, she claimed, the 40 available places on the pediatrics course still went unfilled. “I was nearly persuaded [to choose pediatrics] but later I was told that only an idiot would,” she said.

Challenges

In 2015, the pediatrics department of Zhujiang Hospital of Southern Medical University generated revenue of over 90 million yuan (US$13.8m), a rare accomplishment in China. “Pediatrics is outstanding at our hospital and has a strong capacity to make a profit because most of our patients are critically ill and undergo surgical procedures or need expensive medication,” Wang Bin told our reporter. “The work of doctors, however, is cheap.” 50-year-old Wang is also a PhD supervisor, but, despite his seniority, his annual salary is less than 300,000 yuan (US$46,000). After more than 30 years in the wards of major cities, neither Wang Bin nor Xu Pengfei have saved enough to buy their own homes. According to healthr.com, the average monthly salaries for pediatricians are 7,317 yuan (US$1,125) in Beijing, 8,907 yuan (US$1,370) in Shanghai and 6,893 yuan (US$1,060 yuan) in Guangdong Prov-

A pediatrician gets off work at a children’s hospital in Foshan, Guangdong Province, June 10, 2013

Photo by CFP

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ince. Data from the Chinese Medical Doctor Association also suggest that the working hours of pediatricians in China are 1.68 times longer than their peers’, and yet pediatricians earn 54 percent less on average than other specialists. In a country where doctors’ salaries are largely dependent on selling treatments, pediatric medicine is seen as an unprofitable area. Children receiving medical treatment in China typically receive onefifth of the dosage that might be prescribed to an adult. What’s more, pediatrics departments conduct fewer checkups and charge lower rates. As a result, earnings are significantly constricted. One head of a major hospital, speaking on condition of anonymity, told NewsChina that he “does not expect the pediatrics department to generate much income,” and he is “satisfied as long as it is not in the red.” The government has taken some measures over the years to address the chronic shortage of pediatricians. Most of them are extensions of existing incentive schemes. In 2015, the NHFPC announced that during the medical license examination, pediatrics candidates could gain more points by taking an additional exam, lowering their pass threshold. One pediatrician, speaking anonymously, told our reporter that “lowering the threshold will make matters worse and we pediatricians will be even less respected by our peers.” On January 30, the NHFPC announced that senior physicians could be trained to “strengthen” pediatrics departments. Neither the physicians concerned nor the pediatricians they would theoretically assist, however, favored the new move, with many expressing concerns that it would lead to medical malpractice. On February 24, Jin Shengguo, a senior official with the NHFPC, remarked during an industry conference that China will place more emphasis on the training of pediatricians and strive to raise the total number to 140,000 nationwide by 2020 – 0.6 pediatricians for every 1,000 children. The move, he claimed, was designed to meet increased demand for pediatricians in the years after the abolition of the One Child Policy. It remains to be seen whether such pledges will bear fruit. At 8 PM, Liu Xiaoyan sent her last patient home and shut down her computer for the first time in 13 hours. The day before, she did not leave work until 9 PM. She told NewsChina about one day in December, when the outpatient online service system broke down for about nine hours and all medical notes and paperwork had to be finished longhand. “Never mind the human body – even the computers get tired,” Liu said. NEWSCHINA I May 2016

AIDS Project

The Power of Prevention

One social organization is working to empower Chinese youth with knowledge and skills to help protect themselves from HIV/AIDS By Wu Ziru

hang Yinjun usually sleeps on her office sofa after working overtime. The Beijing apartment that is her office was once Zhang’s home, but now serves as the headquarters of the AIDS Prevention Education Project for Chinese Youth (APEPCY), a non-profit organization dedicated to the prevention and control of the spread of HIV and AIDS among Chinese teenagers. Founded in 2006, APEPCY now has more than 10 staff members, and offers sex education and HIV/AIDS prevention seminars through the establishment of what it calls “APEPCY houses” to educate children from kindergarten to college. With new infections on the rise among China’s youth, APEPCY is finding its services in high demand. Last December saw the organization preparing for both its 10th anniversary and its second national seminar on HIV/AIDS prevention among teenagers. More than 300 people attended the event, twice the number recorded in 2014. Government officials, academics and representatives from multiple NGOs were all present. “It is delightful to see that our work has yielded some promising outcomes,” founder Zhang told NewsChina. For her, growing attendance of APEPCY seminars, particularly by government officials, demonstrated that HIV/AIDS prevention among China’s youth is receiving more attention from the public NEWSCHINA I May 2016

Students attend a lecture on AIDS prevention at Yunting Experimental Primary School, Jiangsu Province, September 28, 2014

and in the media.

Neglect

Official statistics suggest that as of last October, there were 575,000 people living with HIV in China, and hospitals had recorded a total of 177,000 deaths from AIDS complications. 15 provinces are home to more than 10,000 AIDS patients, while HIV prevalence among those aged 15 to 24 has hit 1.6 per-

cent of the total number of registered cases, with 2,552 young people living with HIV in 2014, up from 482 in 2008, a more than fivefold increase. China has roughly 300 million young citizens in full-time education, over 20 million of whom reach sexual maturity each year. While HIV in China was traditionally seen as a disease primarily affecting intravenous drug users, today more than 90 percent of new

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infections are transmitted sexually, making sex education an essential public health priority in a conservative country that only offers minimal, and often incomplete, sex and sexual health information to its school-age population. Blood-to-blood, sexual and mother-to-child transmission are the principal transmission vectors for HIV. However, while AIDS awareness campaigns have been a feature of public health education in China since the 1990s, sex and sexuality remains taboo, with educators skimming over sex education and prioritizing exams, grades and enrollment rates. APEPCY houses give financial aid to partner schools, provide students with relevant reading materials, encourage interaction between teachers and students, arrange parenting classes and organize other community activities with the goal of raising awareness of HIV and AIDS. The organization also campaigns for public funds to help treat AIDS orphans. Zhang told our reporter that at least 50,000 yuan (US$7,680) is needed to set up an APEPCY house, including the purchase of teaching equipment, textbooks and other reading materials. Most challenging, she continued, is “securing a place at schools” to give sexual health lectures and promote sex education. Li Bian, APEPCY deputy director, likes to compare setting up an APEPCY house and helping prevent AIDS in terms of first “making a nest” and “laying an egg.” “Even when APEPCY provides financial support, most schools tend to refuse our help without hesitation,” he said. “As for sex education and the promotion of AIDS prevention, their first response is ‘What the hell is this?’”

APEPCY founder Zhang Yinjun

Photo by zhang Mo

‘Determined’

In 2006, Zhang was editor in chief of a publication affiliated with the Ministry of Health. At the time, a rash of suicides on Beijing college campuses were making headlines, but both the State media and the public attributed the phenomenon to academic pressure, workrelated stress and the “weak constitutions” of China’s millennials. Zhang, however, felt there was more to the issue. She conducted research into the known psychological problems of college students who had committed suicide. Her investigation showed that many college students experienced psychological problems, but that sex was at the heart of the bulk of the most severe cases, a fact that virtually all media coverage of the suicide epidemic had failed to mention. Zhang was taken aback by her findings, with her research leaving her “determined to do something.” Together with Li, a long-time observer of sexual health and AIDS problems in China, she decided to establish an organization to promote sexual health and AIDS prevention education specifically targeting youth and schools. NEWSCHINA I May 2016

Mission

In 2014, UNAIDS announced that the world was on track to eradicate AIDS globally by the end of 2030, but that to attain this goal, treatment and prevention work would have to be conducted simultaneously. “It is far from being enough to just ‘keep an eye’ on AIDS, when what is really important is prevention,” Zhang told NewsChina. “You cannot overemphasize the importance of preventive measures, particularly in schools.” Apart from social prejudice, another difficulty faced by APEPCY is the shortage of funds, which is also a problem for most social organizations and charitable institutions in China. What is different in the case of APEPCY, Zhang told our reporter, is the Chinese public would be willing to donate to school construction, assistance for dropouts or programs to help the “left-behind children” of absentee migrant parents – but not to help fund sex education programs. According to the regulations of the China Charity Federation, a fixed sum of money is required to set up a social program. Before 2006, Zhang was working for the Ministry of Health and thus had a broad range of official contacts. However, when she tried to persuade her friends and acquaintances to support her AIDS education program, she got a cold and even scornful response. “At the time, members of the public would pale at the mention of AIDS,” said Zhang. “[They saw it as] unseemly for a woman over 30 to keep on talking about sex and AIDS.” Despite the mockery and the sideways glances, Zhang and Li have persevered. The first APEPCY house was opened in 2007 at Fushun No. 2 Senior High School in Liaoning Province, and was funded by Bai Yansong, a CCTV news anchor who is also the organization’s promotional ambassador. It was not until recently that public attitudes in China towards HIV and AIDS began to change. Zhang said that alongside increasing attention paid to AIDS educa-

NEWSCHINA I May 2016

The APEPCY house at Yunting Experimental Primary School, Jiangsu Province

tion and the general psychological health of young people, it has become relatively easy to raise money, especially with the support of local governments looking to avert a potential public health crisis. Starting in 2014, the government of Linzhou, Henan Province, began to invest 3 million yuan (US$455,000) annually in HIV/AIDS prevention. In 2014, 12 elementary schools in the city established APEPCY houses, adding another 30 in 2015. According to Wang Jun, Linzhou’s Party chief, the city will open another 100 APEPCY houses in 2016 before expanding the program to cover all 137 schools in its jurisdiction by 2017. “A small investment now means maximized savings tomorrow,” Wang said. He added: “This is of course not just an economic issue.” In late 2014, Gu Mingyuan, a professor of education at Beijing Normal University and a senior adviser to APEPCY, wrote a letter to Chinese Premier Li Keqiang to seek more government support and raise awareness of the importance of AIDS prevention among the young. Premier Li and Vice-premier Liu Yandong replied to Gu’s letter with a proposition to combine AIDS prevention and sexual

health education, pointing out that “sexual health education is a crucial lesson for the development of Chinese youth.” Last August, the Ministry of Health and the National Health and Family Planning Commission jointly issued a directive to strengthen AIDS prevention and control at schools. To this day, at least 665 APEPCY houses have been launched in more than 20 cities nationwide, with hundreds more in the preparation stage. In Yunnan Province alone, 185 APEPCY houses have been established since 2012, with the organization training thousands of teachers in its partner schools. Zhang recalled to our reporter that in previous years, when APEPCY decided to invite government officials to attend AIDS prevention events, most of them declined. For the organization’s December seminar, however, many senior officials at the ministerial level came out in a show of support. Zhang said her aim is to open a total of 10,000 APEPCY houses nationwide. She has even begun to add Chinese culture classes into her organization’s curriculum. However, her fundamental goals remain the same. “For the prevention of AIDS among the young, schools are our main battlefield; sex education our main weapon,” said Zhang.

Society

Chen Man

Never Back Down

Wrongfully imprisoned for 23 years, Chen Man is now a free man thanks to the persistence of his legal team and a changing judicial environment By Li Teng and Du Guodong

n February 19, 2016, Chen Man paid a visit to the grave of Lin Yiquan in Santai County, Sichuan Province. A law professor at Southwest University for Nationalities who died in 2003, Li had served as Chen’s defense counsel. Chen knelt before his lawyer’s memorial, and his eyes blurred with tears. “Professor Lin went to Hainan, despite being sick, to defend me in court,” Chen told NewsChina. “He taught my case to his students. I owe him a debt of gratitude.” Chen, 53, from Sichuan Province, was exonerated in early February by the People’s High Court of Zhejiang Province. The court overturned the two-year suspended death sentence for murder and arson that had led to Chen’s 23-year incarceration, citing insufficient evidence.

Diligence

Wang Wanqiong, another member of Chen’s defense counsel, joined him in paying her respects to Lin Yiquan. She clearly remembers the first time she visited Lin’s home – mountains of materials related to Chen’s case occupied every corner. The quality of these materials played a key role in Chen’s acquittal. “It is very difficult to overturn a conviction – it’s like winning the lottery,” said Wang. “Lin’s efforts strengthened our determination.” In November 2013, Wang and Li Jinxing, another of the dozens of defense lawyers who represented Chen, began to voluntarily take

on miscarriage of justice cases, founding an organization at Sichuan University designed to overturn wrongful convictions. This organization, named the Innocence Project, took Chen Man’s case as its debut campaign, a decision which proved to be a crucial turning point in his acquittal. At the time the Innocence Project took an interest, Chen Man’s parents were debtridden by years of fruitless appeals. Several lawyers told our reporter that they made the decision to defend Chen because they were moved by both the conscience of his previous legal counsel and the persistence of his parents. “There was abundant evidence that Chen had been wrongly imprisoned, but it took 23 years to quash the conviction. Beyond following legal procedure, persistence and conscience were crucial,” said Li Jinxing.

Relay

At 8 PM on Christmas Day, 1992, a fire broke out in Shangpoxia Village in the city of Haikou, Hainan Province. When firefighters arrived, they found the charred remains of a man whose neck and back clearly bore fatal knife wounds. A work permit with Chen Man’s name on it was found at the scene, and Chen was initially presumed to have been the victim. Two days later, the body was identified, and a few days after that, local police charged Chen with homicide and arson. Chen’s parents, now both in their 80s, never doubted their son’s innocence and immediately

launched an appeal. Chen told NewsChina that he never gave up hope in prison because of the unfailing support of his parents. Li Jinxing told our reporter that any experienced lawyer who spent five minutes with his case file could see that there was no physical evidence that directly implicated Chen. What’s more, Li claimed, Chen’s incessant flip-flopping – pleading guilty then denying involvement in the crime – was evidence that police were trying to obtain a forced confession. “The defendant would not plead guilty unless he was beaten,” said Li. Chen was sentenced to death with a twoyear reprieve by the People’s High Court of Hainan Province on November 9, 1994, a sentence upheld at a second trial on April 15, 1999. Neither trial heard witness testimony or allowed the presentation of material evidence. In Li Jinxing’s opinion, the most egregious violation of due process was the fact that both judges insisted on a death sentence even though there was sufficient evidence and testimony to prove that Chen did not have the window of time necessary to commit the crime. “The law should be rational in deciding the fate of a defendant, and judges are the last line of defense for justice,” Li said. Wu Jiasen, a Sichuan lawyer who died in 1996, and Cao Zheng, a criminal lawyer of the Xinjiang Lawyers’ Association, represented Chen at his first trial. After receiving a diagnosis of lung cancer, Wu recommended that Lin Yiquan replace him as Chen’s defense attorney. During the second trial, Lin NEWSCHINA I May 2016

Online

On January 7, 2014, the Innocence Project held a seminar in Beijing, inviting dozens of lawyers and legal scholars to discuss Chen’s case. Other than a few participants who expressed reservations, a general consensus emerged that Chen was wrongly convicted. Xu Xin, a law professor from the Beijing Institute of Technology, published the content of the seminar on his microblog account, exposing the story to his readership of over one million people. Cheng also kept the public up to date on

NEWSCHINA I May 2016

Photo by china news service

and Cao continued to seek an acquittal, and denounced the decision to hear what they alleged was false testimony from a police officer. “At the time in question you [the police officer] had not yet started your shift. How could you have witnessed Chen Man scoping out the crime scene? This is false testimony,” Cao told the court. However, Chen’s sentence was upheld. The first turning point came in 2004 when Cheng Shirong returned to her hometown in Mianzu, Sichuan Province. A former colleague of Chen Man’s parents, Cheng had a basic knowledge of the law, and immediately turned her hand to overturning Chen’s conviction after hearing the details of his case, launching a public campaign to free him. Cheng was conscious of the fact that she was not qualified to represent Chen herself, so she began searching for new counsel. Nobody wanted to take the job. Cheng had to draft Chen’s appeals by herself. She sometimes felt helpless, but meetings with Chen’s parents helped inspire her to carry on. “I really wanted to do something to relieve his parents’ pain and make them feel better,” she said. “It was also hard for me to let go of the case after years of effort.” In August 2011, Cheng opened a Sina microblog account and began publicizing details of Chen’s case, a move that quickly gained the attention of the public and the media. In 2013, after nine years of work, Cheng finally caught a break – Li Jinxing approached her on behalf of the Innocence Project, offering to represent Chen pro bono.

Chen Man (right) embraces his father after returning home to Mianzhu, Sichuan Province, February 2, 2016

Chen’s case, and launched a series of fundraisers. Hundreds of Chen’s classmates and friends donated around half a million yuan (US$76,800) for the cause. Meanwhile, Chen learned from TV and newspapers that his case was making headlines. After discovering that the issue of wrongful convictions was gaining prominence in China, and that a number of innocent convicts had already been freed as part of a judicial reform program, Chen began to hope his own conviction might be overturned. On February 10, 2015, the Supreme People’s Procuratorate (SPP) lodged a protest with the Supreme People’s Court (SPC), saying that the High Court of Hainan Province had “wrongly determined the facts” of Chen’s case, leading to “an error in the application of the law.” Yi Yanyou, another acting lawyer representing Chen who is also a law professor at Tsinghua University, called the move a “significant legal event,” telling NewsChina that this marked the first time the SPP had lodged such a protest regarding an excessively severe sentence – typically such protests only come when procurators object to an acquittal, or what they view as an overly lenient punishment. On May 25, 2015, the SPP officially in-

formed Yi Yanyou and Wang Wanqiong that the High People’s Court of Zhejiang Province would launch a review of Chen’s case. Under China’s Criminal Procedure Law, major criminal cases can be reviewed by judicial organs in a province other than the one in which a crime was committed in order to ensure due process and avoid regional protectionism. Concerns that local judicial officials might attempt to disrupt legal proceedings to protect their own reputations are particularly acute in wrongful conviction cases. However, Chen’s counsel did not receive notice of their court date for several months. Chen’s lawyers, his parents and Cheng Shirong kept up the pressure by continuing to publicize Chen’s case online. Wang Wanqiong told our reporter that on one occasion the Zhejiang high court called her and asked her to stop writing open letters online, saying that the court had interviewed three material witnesses who would testify on Chen’s behalf, and promising her a “satisfying answer” very soon. On February 1, 2016, the People’s High Court of Zhejiang officially declared Chen innocent. Li Jinxing attributed the acquittal to the online coverage which sensationalized the case, bringing it to the attention of higher authorities. In addition to Chen Man’s case,

he added, all wrongful convictions that have been overturned to date were the focus of large-scale online awareness campaigns. Li told our reporter that he is receiving a growing number of emails related to similar appeals. He estimates that China will see a peak in overturned convictions in five to 10 years. Online appeals to the public, Li is adamant, are the product of desperation, and while they help bring miscarriages of justice to light, they can be a double-edged sword that shreds the mutual trust that should supposedly exist between lawyers and the judiciary. A judge who spoke on condition of anonymity told NewsChina that after Chen Man was acquitted, some staff members of the People’s High Court of Hainan Province voiced their view that the courts have become a “stepping stone” for lawyers to “seek fame.” They also expressed dissatisfaction with the procuratorial organs. “To begin with, the Hainan provincial procuratorate thought that Chen Man had received an excessively light penalty and insisted on an immediate execution. It was the high court who upheld the original verdict and saved Chen’s life,” the same source told NewsChina. “Now, the SPP is blaming us for handing down an excessively heavy penalty.” This anonymous source went on to say that concern exists in Chinese judicial circles that the more wrongful convictions are overturned, the more appeals will be lodged. With courts hearing hundreds of cases each year, he argued, judges have “no energy” to hear cases relating to previous convictions, even wrongful ones. “Unless cornered,” he said, “courts are unlikely to take the initiative on overturning a wrongful conviction.”

Challenges

According to Wang Wanqiong, procuratorates and courts have historically maintained a “good relationship.” Procurators usually offer legal suggestions rather than lodging formal protests that would necessitate a retrial – viewed by judges, Wang re-

Photo by china news service

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Wang Wanqiong, a member of Chen Man’s defense team, talks to media after her client’s release, Haikou, Hainan Province, February 1, 2016

marked, as a “slap in the face.” For their part, courts will keep inconvenient witnesses off the stand so as not to risk blocking the “suggested sentence” specified in the indictment provided by the procuratorate. The Central Political and Legal Affairs Commission under the Central Committee of the Communist Party of China unveiled China’s first directive to prevent miscarriages of justice in August 2013. This directive included a requirement for courts to establish a “lifelong liability system” for judges – a system that would hold China’s judges accountable in perpetuity for presiding over any miscarriages of justice. Neither Chen’s current legal team nor Chen himself wished to comment on this pledge. Chen fears that seeking redress against those who wrongfully convicted him might complicate his application for compensation from the government. His counsel, meanwhile, are concerned about the potential impact on the outcome of future wrongful conviction cases. “If judicial officials are held accountable for any miscarriage of justice for their entire life, the most likely outcome is that they will rack their brains for ways to stop the overturning of convictions,” said Yi Yanyou. Lawyers and legal scholars agree that rather than lifelong liability for judges, the best and easiest way to eradicate wrongful judgments

and the obtaining of false confessions under torture would be by guaranteeing the presence of defense lawyers at all criminal hearings. While the Hainan court has never acknowledged that Chen’s confession was obtained under torture, Yi argued that only torture could extract a false confession from someone charged with a capital crime. Chen Man told NewsChina that, on one occasion, police officers took him to the top of a building and threatened to throw him off the roof if he refused to confess, claiming they would tell their superiors that Chen committed suicide to escape punishment. He described being deprived of sleep while in detention, and how his captors coached him on what to say in court. According to Yuan Ningning, a legal researcher at Beijing Normal University, the use of torture during interrogations became commonplace during a high-profile government crackdown on criminality in the 1980s and 1990s, a campaign which led to China’s huge number of miscarriages of justice. “At that time, the police had little awareness of human rights protection. They pursued a high clearance rate and their investigative skills were inadequate,” Yuan told China Daily. Yuan added that torture and coercion have become less routine since the government began to pursue selective legal and judicial reform. In 2012, the National People’s Congress, China’s top legislative body, officially banned torture in an amendment to the country’s Criminal Procedure Law. In 2013, the SPC released a guideline requiring courts to rule evidence “obtained through improper methods” as inadmissible. The revisions helped to overturn 778 convictions in 2014 alone, according to a report by the SPC. Now back at home and recovering from a gastric illness contracted in jail, Chen told our reporter he was keen to launch his own online startup, though he has yet to decide in which field. Asked if he has any advice for others wrongfully convicted of crimes, he offered a succinct reassurance: “As long as you have been treated unjustly, lodge your appeal fairly and confidently.” NEWSCHINA I May 2016

Butlers

The Next Big Thing?

A new butler school and its students bank on China’s legion of millionaires, hoping that hiring a butler will become the next symbol of wealth amongst the country’s nouveau riche By Wang Sijing

he US-dollar billionaire’s club welcomed about five new Chinese members every week in 2014, according to the Hurun Research Institute. Those 242 newcomers outnumbered their 2013 peers three to one. They also brought China’s total number of billionaires to 596, superseding the US’s 537. The amount of wealth possessed by Chinese billionaires, meanwhile, climbed to US$2.1 trillion. As the ranks of China’s super-rich swell, other industries are quickly expanding beneath them. In the realm of education, finishing schools and elite private academies are just some of the institutions that are beginning to receive new students in the mainland’s richest cities. Recently, another school has opened its doors – The International Butler Academy (TIBA). Located in Chengdu, Sichuan Province, the school is the Amsterdam-based institution’s first overseas campus, as well as the first Western butler school in China. Its fourth programme ended on November 28, 2015. Among those who paid the 40,000-yuan (US$6,176) tuition fee for the 42-day training course are a railroad engineer, a nanny, a programmer and a State-owned enterprise employee, to name a few. Each one, along with the school’s founder, is NEWSCHINA I May 2016

banking on the hope that China’s elite will follow in wealthy Western footsteps and hire butlers to manage their growing estates.

Dinner

Liu Kecheng (a pseudonym) was one of two students in the November class who were the first to graduate from the course with a distinction. Before enrolling in TIBA, he had just turned down an offer to be a butler at a private home with an annual salary of over 1 million yuan (US$154,400). Although Liu had provided private tourism services to wealthy clients in the past, he had never worked in domestic service. He decided to go to TIBA to train properly. Christopher Noble heads up the Chengdu campus. The American is himself a TIBA graduate, class of 2012. During a visit to China that same year, he was amazed by the affluence he saw. “It’s just unbelievable,” he told NewsChina. Noble noticed all sorts of luxury cars in the second-tier Chinese city, more so than anywhere else he had ever traveled. High-end buildings were rising one after another. “It’s unimaginable in the US. China has an enormous market,” he said. One day last fall, Noble’s students were learning the art of silver service. They were

Photo Courtesy of TIBA

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Photo Courtesy of TIBA

Table setting is an important aspect of buttling

Students at the Chengdu branch of The International Butler Academy study all aspects of the art

preparing to welcome 24 dinner guests the next day. Each of the eight students used only four fingers to carry golden trays laden with a heavy porcelain plate that held two ping-pong balls. Their thumbs could not touch the trays, and they had to maintain the position for 15 minutes. “They are not coming to the school to be comfortable,” Noble said. He told NewsChina that when these students get hired, their employers won’t think about how long they have to stand with a heavy tray. “They would just think that ‘I paid you for the work and you shouldn’t fail.’” He Pinglian (a pseudonym) learned to fold a napkin into the shape of a swan in a recent class. She’s 51 years old. Before coming to TIBA, she worked as a nanny for a wealthy family in Henan Province for six years. “I’m kind of behind the times now,” she told NewsChina. “I want

to change and improve my life.” Liu and He worked together to set the table for the event. The Western-style dinner they were told to prepare had been changed to a Chinese banquet with just one day’s notice. The original table setting, for which the students used a ruler, a bow compass, a laser pointer and even an infrared ray to measure the distances between settings, was completely removed. Everything had to be redone. More than 50 people spent an entire afternoon preparing for the dinner. The next day, when the guests came, the napkin He folded was the first to be unfurled. Holding the golden tray, she smiled professionally. In total, the guests opened up 24 bottles of wine, five bottles of Moutai baijiu (one of the most expensive Chinese spirits), and a number of bottles of Shaoxing yellow rice wine. Amid the merriment, the guests may not have realized that the butlers-to-be had readied four kinds of glasses to perfect the meal or had waited stiffly at the gate for latecomers, standing unnaturally straight for more than an hour in the cold night wind.

The New Rich

The idea of founding a butler school in China popped into Noble’s head during his second year in Chengdu, when he was consulting for deluxe hotels, training sales teams for real estate companies and working as a private butler for a luxury club in one of Chengdu’s most expensive residential communities. That was in 2013, when Wanda Group’s board chairman Wang Jianlin became the richest person in China on Forbes’ China Rich List with 86 billion yuan (US$14.1bn) in net assets. Also, some 67,000 people in China had assets worth over 100 million yuan (US$16.4m) and 1.09 million people had a net worth exceeding 10 million yuan (US$1.6m). Yet after nearly a year of market research, Noble and a colleague found that actually, it wasn’t wealthy families driving demand for private butlers, rather it was China’s luxury hotels and real estate agencies that were seeking out these services. The pair decided to look for opportunities to cooperate with real estate developers. TIBA’s Chengdu campus opened in July 2014 in the swanky residential community where Noble worked as the club’s butler. The floor space of NEWSCHINA I May 2016

NEWSCHINA I May 2016

Photo Courtesy of TIBA

the smallest apartment in the community is no less than 240 square meters and the largest is 630 square meters. The wealth of China’s richest is largely reflected by the property they own. In the first half of 2015, 420 units in Beijing were sold for more than 20 million yuan (US$3.1m). In China’s first-tier cities, 2,685 houses with a price surpassing 60,000 yuan (US$9,264) per square meter were sold in the second quarter of 2015, a 444 percent year-on-year increase. But China’s high-end real estate market has recently encountered a bottleneck in development. “Materially, we don’t know what else we can do to improve [properties] – the only thing left to do is to cover each brick with gold,” said Pu Yan, marketing director for TIBA’s Chengdu campus. “So, breakthroughs are needed in other areas.” The idea is that Chinese elite can further upgrade their estates by hiring a butler. “These [home buyers] will all become our target clients,” said Tang Yang, assistant to the board chairman of Langji Real Estate, developer of the community in which TIBA’s Chengdu campus is located. Noble believes demand for private butlers among China’s wealthiest will flare up soon. His plan is to locate potential clients and win them over through the school’s cooperation with real estate developers. “A luxury house, luxury car, bodyguard, yacht and private jet are the five current must-haves for China’s super-rich,” said Pu Yan. “A butler will be next.” But still, having a butler is a fairly new concept on the mainland and few Chinese know much about the customs of Western nobility. In Langji’s ritzy residential community, which also provides butler services to home owners, some clients have asked for blond butlers to ride horses around the residences, or have simply treated butlers as janitors. “We rejected all of these kinds of demands,” said Tang Yang. However, once they find employment in private homes, butlers may not be able to reject their new employers’ unusual requests so easily. “We hope that China’s nouveau riche may become a new nobility one day through our efforts,” said Pu Yan. “But it’s very, very difficult.” Therefore, these butlers-to-be face a task unmatched by their European peers – teaching Western manners to their future employers.

A TIBA student serves tea to a guest

Thus, part of their training is to master using knives and forks to eat their meals in an extremely polite way, whether it’s Western or Chinese cuisine. This means TIBA students are often slicing stir-fried green beans into dainty pieces or practicing sipping soup without slurping. Nonetheless, Noble and the rest of the team behind TIBA believe learning Western habits is a necessary undertaking for China’s newly rich, whose businesses and lifestyles have all become increasingly globalized. In the past four years, the compound growth rate of China’s overseas investment reached 72 percent. In 2014, the amount invested hit over US$10 billion. Currently, Chinese students make up more than 38 percent of the 26,000 foreign exchange students in UK private schools. At least 80 percent of China’s wealthiest families plan to send their children to study overseas, while only 1 percent of Japanese families do the same. While the lives of affluent Chinese are becoming more and more international, it is still too early to tell whether or not the wealthy will adapt the custom of having butlers from their Western peers. A few months after graduation, Liu Kecheng, He Pinglian and their classmates may be earning annual salaries of up to 1 million yuan (US$154,400), or sifting through unemployment ads, looking at the same vacancies they did before.

SPECIAL REPORT

Older Snowbirds

Southbound Seniors Photo by CFP

A growing number of retirees from northern China are leaving their freezing hometowns to fly south for a warmer winter, bringing their destination cities both opportunities and challenges By Zhou Fengting in Sanya

About 380,000 northern retirees winter in the warm southern city of Sanya, Hainan Province

n the city of Sanya’s Haiyue Square, Zhu Cheng’en looked like an answer to the classic standardized-test question: What doesn’t belong? Sporting a tailcoat, black bow tie and black-brimmed fedora covering all but a few stray tufts of gray hair, Zhu stood out from the casually dressed crowd who came to while away another warm winter day in the southernmost city of tropical Hainan Province. A 90-year-old man born in the northern province of Shandong, Zhu told NewsChina that this was the first winter he had spent outside his hometown. Haiyue Square was Zhu’s daily stomping ground during his Sanya stay. There, groups of senior “snowbirds” like Zhu gathered to dance, play mahjong or chat. Every morning, they emerge from their temporary homes – a nearby row of crowded, cramped apartment buildings – and socialize in the square until the last dance song hits its final notes. Thanks to southern China’s reliably warm weather and clean air, more and more retirees from the frigid north are traveling south for the winter, just like migratory birds. This temporary population injection has greatly advanced destination cities’ tourism indus-

tries, cultural activities and real estate markets, while at the same time laying a heavy burden on their infrastructure and social services, a weight which local governments may be too ill-equipped to bear.

Torrential Tourism

To Zhu, whose wife died several years ago and whose children live elsewhere, Sanya has given him a new lease on life. He spent his winter dancing in Haiyue Square, where he made many friends, an easy task as a former dance teacher with exceptional moves. If he waltzed too late into the night and missed the last bus, he would hop on the back of a motorcycle taxi for a small fee. According to the local media, the annual deluge of winter visitors jams the roads, leading to rampant use of unlicensed motorcycle cabs, despite a police crackdown. Yet Zhu was enamored by Sanya life. “I can dance freely here,” he said. “It makes me extremely happy.” He even moved to a cheaper hotel so that he could extend his stay. For 75-year-old Huang Yimin, the Sanya newness that excited Zhu is simply her status quo, since she has lived in Sanya off-and-on

for 14 years. Persuaded by advertisements touting the city’s temperate winters, Huang and her husband migrated south in December 2001. The next winter, in Sanya once again, Huang said she experienced a miracle – the sight in her right eye, which had been destroyed by a brain hemorrhage in 1986, gradually returned. Since then, Huang believed that the Sanya climate could add years to her life and decided to settle there. In 2003, she and her husband sold their house in Harbin, capital of the northeastern province of Heilongjiang, and bought a new one in Sanya. Now, Sanya accommodates about 380,000 of these “migratory seniors.” This is more than six times the local over-60 population. According to a 2014 finding by the Heilongjiang government, 10 percent of Heilongjiang residents over 60 years old travel south every winter, with Hainan listed as their first-choice destination. But they will fly anywhere that is south enough for sun. The majority of China’s most livable cities are located south of the 25th parallel north, where winter temperatures hover around 15-25 degrees Celsius, NEWSCHINA I May 2016

according to a 2014 report on China’s most livable cities co-published by Tsinghua University Urban Planning and Design Institute, The Real Estate Academy in China and the webportal Sohu. Apart from Hainan, parts of Yunnan Province, Guangdong Province and Guangxi Zhuang Autonomous Region also fall under this umbrella. Tengchong, Yunnan Province, is another prime example of a southern city swarmed by northerners. Characterized by widespread hot springs and lush forests, Tengchong received over seven million tourists in 2015, three times more than in 2008. According to Zhao Limin, the deputy director of the local tourism bureau of Tengchong, 60 percent of those tourists were senior citizens, whose individual numbers have been rising 20 percent each year. Similarly, Bama, a small Guangxi county that is well known for its residents’ longevity, was home to 150,000 newcomers in 2010, two-thirds of whom were seniors. Huang Huang, a China Tourism Academy researcher who is analyzing the trend of migratory seniors, told NewsChina that the industries of elderly care and senior citizen tourism in China in 2015 amounted to 450 billion yuan (US$69.2bn) and 320 billion yuan (US$49.2bn), respectively. Based on these numbers, he estimated that the migratory seniors market value may exceed 200 billion yuan (US$30.8bn).

Group Living

As an early adherent of the snowbird lifestyle, Li Shufan, Huang Yimin’s neighbor, has borne witness to how migratory seniors have influenced Sanya. “It used to be a wasteland, just a pile of dirt,” she pointed at her community. Now, high-rise apartment buildings blanket the area. The real estate sector has benefited significantly from the influx of tourists seeking sunnier climes. Just five days after the government defined Hainan as an “international tourism island” in 2010, the province’s property sales soared to 17.1 billion yuan (US$2.6bn), an amount equivalent to Hainan’s total real estate sales in 2008, according to a State Council document on Sanya tourism. The rocketing housing prices, however,

NEWSCHINA I May 2016

have forced many seniors to rent cheap apartments instead of buying property, as Huang Yimin did. Most of the migratory seniors, at least from Harbin, are working-class retirees living off a monthly pension of 1,000-2,000 yuan (US$154-308), according to Wang Ying, a researcher from Harbin who was sent to Sanya to study the snowbird phenomenon. Because they are too old to apply for bank loans, renting cheap housing is their only option. Li Baosheng, a retired swimming coach who came to Sanya in 2013, for example, could not afford an office space for her swimming club, an addition that would bring it to a level of professionalism she had dreamed about for years. The average housing price in Sanya exceeded 18,000 yuan (US$2,769) per square meter in 2015, a price point far beyond her reach, she told NewsChina. She lives in a rundown boarding house hidden behind a row of high-end hotels. Her area is overloaded with privately constructed buildings that have been crammed together in a poor attempt to accommodate the rocketing demand for housing. Many of them do not meet regulations. In order to earn more money from renters, local homeowners built high-rise apartments that were packed so densely that the media dubbed them “handin-hand houses.” A similar phenomenon has hit Bama in Guangxi. Although both local governments have tried to crack down on these illegal and at times dangerous buildings, high demand and sizable profits for the perpetrators have nullified government efforts to tighten supervision. In addition to these privately constructed apartment buildings, senior citizen group homes are another popular choice for older snowbirds. Tenants live in uniform, simple rooms and receive three meals a day. The retirees go out together to dance or exercise every morning, coming back at meal times, just as they used to come back to communes run by their State-owned enterprise work units in decades past. Despite generally poor living conditions, most migratory seniors seem to have acclimated to their new life in Sanya and have formed social circles of their own. In many

such communities, residents, including street vendors, generally speak with accents that hail from up north, and northern-style restaurants are more plentiful than ones serving local fare. Many netizens even joke that Sanya is just another city in Heilongjiang. Huang Cheng, a Sanya University researcher studying senior care, found that nearly 50 percent of seniors in Sanya choose collective care, while that number is less than 20 percent in other cities around the country, such as Hangzhou in Zhejiang Province or Dalian in Liaoning Province. As migratory seniors are unfamiliar with their new homes and are far away from their traditional support networks, they are more likely to lean toward communal living for mutual care and companionship, he suggested.

Local Clashes

Although these southbound seniors have contributed greatly to the local economy, they have angered many locals who accuse outsiders of stealing their resources and clogging up traffic. In Sanya, for example, conflict between the two groups peaked in late 2015 when Bi Guochang, a 65-year-old man from Harbin, posted an Internet rant that caused a stir online. He wrote that his clothes and bicycle had been confiscated by a local chengguan (employee of the local urban management bureau) after he took a dip in a no-swimming zone, forcing him to hobble back home, half-naked. Bi criticized the chengguan for discriminating against outsiders, while locals hit back online, saying that the migratory seniors have disturbed the city’s social order. Such mutual antipathy is nothing new. Li Shufan, the early snowbird, told our reporter that she had seen banners that read “Get out of Sanya, northerners” swinging on street corners. They made her feel helpless, a feeling exacerbated by the fact that doors that are typically open to seniors with problems are closed to those away from home. “The migratory seniors are a big headache for us; they have caused a lot of societal problems,” Zheng Conghui, deputy director of the Sanya tourism bureau, told NewsChina. “It is like a host having only one table, but

Changes

Hainan has begun to take some measures in this area in the past three years. The local government in Sanya has expanded its cooperation with Heilongjiang Province to

Migratory seniors soak in a hot spring in Bo’ao, Hainan Province

Photo by CFP

trying to receive two tables’ worth of guests. The host cannot take care of every one.” The situation in Bama was even more pronounced. As a poverty-stricken county, Bama’s local infrastructure could not handle the waves of visitors, so the formerly quiet, beautiful county transformed into an overcommercialized tourism site with a destroyed ecosystem. While locals blamed their rivers’ heavily polluted state on newcomers who use them to bathe or wash their feet, the newcomers grumbled that they have not received the quality services that tourism advertisements had promised. A report by Beijing Evening News found senior snowbirds’ top three concerns to be loneliness, high cost of living and inconvenient services. Huang Yimin, for example, had to come back to Harbin in 2008 after her husband fell seriously ill, as Chinese medical insurance is only obtainable in one’s domicile. “Many tourism-driven cities have targeted the migratory seniors market, but I don’t think they are prepared [for them],” said China Tourist Academy researcher Huang Huang. Many analysts believe that most of these destination cities are still in a honeymoon phase with this emerging market – they covet the benefits snowbirds bring along, like rapid development in the tourism and real estate industries, but make few improvements to support services. Lacking confidence that migratory seniors will keep returning in the long run, they feel reluctant to invest more in a potentially temporary group of residents. To Sanya University researcher Huang Cheng, governments need to start facing reality and take action to deal with their cities’ altered demographics. During his research, he found that many migratory seniors are full of life and well-educated. They would play a bigger role in developing these cities if given proper government guidance.

Photo by CFP

SPECIAL REPORT

Seniors dance in a public square while wearing masks and gloves to protect themselves from sunburn

provide cross-province medical care, allowing several hospitals and pharmacies to accept medical insurance from Heilongjiang natives. In 2012, The Old-age Commission of Harbin set up an office in Sanya to help snowbirds lead a better life while down south. The commission later established an association with over 3,300 members, becoming Sanya’s only government-approved NGO serving migratory seniors. For its part, Bama has invested more funds into waste disposal and pollution control. In an interview with Legal Weekly, Wei Mingfu, the director of the county’s housing and urban construction bureau, admitted that the local government should be held partly responsible for the rampant unauthorized construction, since they failed to create a sufficient plan for the surge of visitors. Now, the government is retooling the city plan and working out a program to better manage and serve migratory seniors, especially in regards to public security and healthcare. To lighten the burden on Bama’s scanty resources, the local government also launched a campaign in September 2013 to divert

migratory seniors to neighboring towns and counties by building up those areas’ ecotourism image. This seems to be a viable strategy – in fact, some Sanya snowbirds have naturally flown to its neighboring areas after being subjected to Sanya’s traffic jams and soaring prices. Some Sanya business owners who rely on snowbirds for income are starting to worry that their customers are nesting elsewhere. Group home owner Lang Yuling is one of them. Her business hasn’t thrived in the past two years as it did before. She rents rooms out to temporary workers in the summer, but in the winter she depends on migratory seniors to stay afloat. “If I can’t rent my rooms out in the winter, it means they will spend half of the year empty,” she told NewsChina. Researcher Huang Huang predicts that not only will Sanya snowbirds continue to fly to nearby cities, they will fly overseas as well. “Given the huge commercial potential for senior citizen tourism, I think the market trends will keep changing, and may extend to countries like Thailand or Malaysia,” Huang said. NEWSCHINA I May 2016

NEWSCHINA I May 2016

History

Peking Opera in Germany

The Show Must Go On

While Peking opera fans in China have shriveled in number over the past few decades, the art form has received a warm reception in foreign countries like Germany, giving experts hope the tradition can be revived on the domestic stage By Xie Ying

olstering trade and clearing the country’s skies were not the only items on the agenda of this year’s Two Sessions, the annual meetings of China’s top legislature and highest political advisory body. Also on the list, amongst others, was Peking opera. As China establishes closer relations with other international players, cultural exchanges, especially those steeped in tradition, have become a hot topic at the yearly conferences. During the March sessions held in Beijing, renowned Peking opera performers Mei Baojiu and Yang Chi, who spoke at the meetings, once again voiced concerns about the development of Peking opera, warning that the traditional art form is suffering a decline in interest in China, despite signs of popularity overseas. Wu Xingtang, former second secretary of the cultural section of the Chinese embassy in Germany, recently wrote an article for NewsChina’s Chinese edition about a Peking opera troupe’s 1981 debut in Germany, exploring how and why the traditional Chinese opera was so well received in a Western country. The disparity between reactions at home and abroad may indicate that Peking opera can still charm new audiences in the modern era and deserves to be passed on to future generations, something many Chinese nationals hope will come to pass.

‘Exporting’ Culture

A cultural icon that occupies a spot on UNESCO’s “intangible cultural heritage” list, Peking opera first arrived on a foreign stage in 1891, when then well-known Peking opera performer Zhang Guixuan introduced the art form to Japan. It later took its place in the global arts world when famous Peking opera artist Mei Lanfang went on a global tour in the 1920s and ’30s. This kind of cultural exchange, however, practically stopped altogether as the world descended into war. According to Wu Xingtang, the new Chinese government that was created in 1949 did not “export” any traditional Chinese culture to Western countries until it established diplomatic relations with them

in the 1970s. Frequent cultural exchanges with Germany specifically began in 1979, the year that China became more accessible under its new policy of Reform and Opening-up. When the World Theater Festival (Theater der Welt) first launched in 1981 in Germany’s Cologne, China sent a Peking opera troupe to attend, with Wu serving as one of the trip organizers. “A German friend of mine recommended we go to the opera festival, which companies from many European countries, the birthplaces of the world’s classic and modern operas, would attend,” Wu wrote. “As many European people seemed to enjoy traditional Chinese culture, we believed that it would be a good chance to promote Peking opera overseas.” Based on a 1979 agreement signed by China’s Ministry of Culture and Germany’s foreign ministry, Peking opera was set to be launched in Germany as a commercial endeavor, with the Chinese side footing the bill for the performers’ plane tickets and daily expenses and the Germans bearing all other costs. Besides the theater festival, the Germans also planned a 14-day tour in seven cities to boost ticket sales, a schedule so tight that it scared off two of the three Peking opera troupes that had intended to join. When the Chinese side finally settled their list of performers and programs after rounds of discussions, it was too late to book a Cologne theater. Thus, Peking opera’s first official performance in Germany took place at the city’s local stadium. In April 1981, the China National Peking Opera Company, the last company standing, sent three members to Germany to prepare for the coming tour. They brought photos of Peking opera performances with them to use for marketing purposes. Although the pictures were grainy because of China’s lack of high-quality cameras at the time, the German side transformed them into eye-catching posters, printed with a simple slogan: “Here comes the Peking opera!” Wu originally worried that the slogan was too plain to attract an audience, but his German counterparts assured him that simplicity was the way to go. Sure enough, every performance during the Chinese NEWSCHINA I May 2016

troupe’s three-day stint in Cologne was sold out. Crowds filled the 2,700-seat stadium every night.

Show Time

Wu said the Peking opera troupe prepared three different programs packed with selected scenes from both martial and domestic opWu Xin g with P tang (left) po eras. (Martial operas ek se Chunx ing opera art s ist Yang ia typically depict powerful emperors and wise officials fighting off treacherous foes, while their counterparts concentrate on romance, family drama and even the spiritual realm.) Interestingly, the stadium, chosen as a last resort, ended up contributing to the performances’ lively atmosphere by making audience members feel free to cheer and applaud at will instead of waiting for the austere fall of a Li B curtain. The performance rep aoc he resen hun ( was so in demand that ro Mo ting left) w hundreds of latecomnk the ear ey Kin Chin s a c ers crowded around ese ost g fol ume the gate inquiring k about extra tickets. Although the German organizers did not want to let them in, Wu revealed that he surreptitiously opened a side door and allowed some people to watch from backstage. This Peking opera fervor continued throughout the seven-city tour, even in the smaller cities, like Lower Saxony’s Hildesheim. The director of Hildesheim’s local theater told Wu that the show’s tickets sold out rapidly and the theater had to add temporary seats to accommodate more audience members. Even the mayor told Wu that he would like to help finance the performance. Unlike the crowd in Cologne, most of the theatergoers in

NEWSCHINA I May 2016

Hildesheim were older and took opera very seriously. They dressed formally, the men in dark suits and the women bedecked with jewels, just as they did when attending classic European operas. At the end of the night, the performers basked in repeated curtain calls. While touring in Böblingen, a town neighboring Stuttgart, the home of Mercedes-Benz headquarters, the luxury car company invited the Chinese opera troupe to visit its factory base. Mercedes-Benz also quietly sponsored the group’s Böblingen performance, keeping its name off of the posters and other promotional materials. According to Wu, many German enterprises consider supporting cultural activities part of their company culture.

Same Tune

One of the scenes the troupe performed was from Farewell My Concubine, a classic story that later became part of the famous novel and film of the same name. The opera takes place after the fall of the Qin Dynasty (221-207 BC), when the warlord Xiang Yu suffered a debilitating defeat at the hands of his enemy Liu Bang, and it ends with his favorite concubine cutting her own throat in front of him. The actor who portrayed Xiang Yu, Yuan Shihai, recalled audience members’ enthusiasm for the shows throughout the 14-day circuit. After each performance, viewers and journalists always swarmed him, even before he could take off his costume and remove his make-up. He took advantage of these moments to ask many Germans about their thoughts on Peking opera. “Some audience members said that they liked martial plays a lot,

History

because of the excitement mestically, much like Western operas and remarkable kung fu, in their home countries. Members but more said that they were of the opera world like Yang Chi moved by the singing, since have attributed this to “a lack of it was similar to [that of Eunew audiences” and “a lack of ropean] operas,” Yuan said. “A new elements to attract more person from a Sino-German culmarket share.” tural association told me that FareExperts believe that unlike well My Concubine was one of his foreign audiences, who feel favorites. The historical Chinese story like everything Chinese is fresh and exotic, youth in includes a hero and a beauty, along China are all too familiar with marvelous singing and beautiful with the ancient stories dancing. These [aspects] are what attract d the playe ine o h portrayed on operatic people to European operas.” cub ht), w st rig l My Con e h t r stages and find the The Chinese troupe added translated el (fa hihai era Farew S n a p performances borsubtitles and a brief introduction of the lead ith Yu the o oto w nes from h p ing and outdated. roles in each of the performances to make p e Grou ead in sc l Master performthe show more accessible to German audimale ers Mei Baojiu ences. “Similar to Western opera, Peking opand Yang Chi said era should be appreciated with ears and hearts,” they believe this can be fixed Yuan said. “I was very happy to hear that some German patrons were interested in watching Pethrough education and promotion. That king operas in their entirety [rather than just seis why both opera legends advocated bringing Pelected highlights from different shows].” king opera into elementary and middle schools. “Peking opera reached new heights after the Cultural Revolution [1966-1976] because there were still many people interested in traPassing it Down The idea that Peking opera could act as an ambassador for Chinese ditional operas. However, it began to decline starting in the 1990s, culture existed well before this German trip, however. In fact, during a when the Reform and Opening-up policy flooded China with more 1935 tour of the Soviet Union, Mei Lanfang, one of the most famous and more forms of entertainment,” Song Yan, head of Fenglei Peking opera performers of the 20th century, stated that “the barriers be- Opera Troupe, told Sanlian Lifeweek magazine. “As people are turning tween Peking and foreign operas could be broken.” Former Chinese to modern entertainment, Peking opera still idles on the government Premier Zhou Enlai supported this sentiment. Yuan Shihai revealed dime and has no clear idea of how to reform.” In a 2014 interview with the magazine Shanghai Artist, German that Zhou once met with him and two other Peking opera performers in 1974, hoping to devise a way for Peking opera to test the waters opera composer Karsten Gundermann, who also collaborates on traabroad. “Don’t worry about foreigners not understanding Peking op- ditional Chinese operas, said that Western operas have not been immune to these same modern-day ailments, but he was confident that era,” Yuan recalled Zhou saying. “It is just like European opera.” According to Yuan, their 1981 performances in Germany were ac- both Peking and Western operas can enchant audiences once again by tually a trial run as China looked into exporting Peking opera for reinventing performance methods. “In the modern era, we have to learn to promote traditional operas the first time in decades. It was an undeniable success. In the following decades, Peking opera gained mounting popularity overseas, with in new, modern ways, such as creating new stories [and] building new many Peking opera associations or clubs popping up in Germany, the stars,” he said. China is already making an effort in this regard. In March 2014, for US, the Netherlands and more. Seemingly every time China sent Peking opera troupes overseas, local media reported packed theaters and example, China’s National Center for the Performing Arts debuted a shows ending to thunderous applause. In June 2013, for example, filmed rendition of the China-set Italian opera Turandot in movie theseveral thousand Germans gathered in an open square in the small aters and received a satisfactory box office take. Reinventing the opera town of Dietfurt to watch the Nanjing Peking Opera Troupe, even like this may be helpful in passing down the tradition to future genthough it was a rainy day. More recently, a lecture in Frankfurt given erations. As Gundermann said, in citing an old German saying: “We by Yang Chi, a Peking opera performer and apprentice of Yuan Shi- should pass on the fire of traditional culture, rather than the ashes.”  hai, attracted several hundred locals. In sharp contrast, enthusiasm for Peking opera has dwindled do- Wu Xingtang contributed to this story.

NEWSCHINA I May 2016

Economy

Cai E’sheng

Future of Finance

tional problems. The trick is how to do this without overreacting.

As technology increasingly interconnects the financial world, financial risks and regulations grow murkier. NewsChina asks former central bank official Cai E’sheng how the country can learn from its past and prepare for its future By Min Jie

NewsChina: What potential financial risks does China face today?

Photo by CNS

hina was largely shielded from the Asian Financial Crisis in the late 1990s, but the tumult brought weakness and disorder in the country’s financial system to the surface. In 1998, the central government let Guangdong International Trust and Investment Corporation go bankrupt, even though it was the country’s second-largest trust company at the time and thus a major financing platform for local governments. As many foreign banks and investors were involved, the case attracted a huge amount of international attention. After that, the government launched a campaign to sort out China’s chaotic financial market, with a focus on stopping the muddling of trusts, banking and securities. On top of this, billions of US dollars of public money were spent on bailing out and restructuring State-owned commercial banks bogged down with bad loans. Cai E’sheng helped make and implement these decisions as a senior official in China’s central bank from the early 1980s to 2001. He also served as vice chairman of the China Banking Regulatory Commission from 2005 to 2013. In a recent interview with NewsChina, Cai explained why China should stay vigilant against systematic financial risk, especially at a time when the Internet is making financial services a larger part of everyday life.

Cai E’sheng

Cai E’sheng: Although we are reasonably capable of mitigating systematic risks, we have no reason to be complacent. Once such a risk flares up, it affects all of society. This has been made evident through the US’s subprime mortgage crisis. It spilled over into the global market and the real economy. The world is in a fragile state of recovery and still struggling with a slowdown in growth. Financial risk reaches more deeply into people’s lives than ever before, directly affecting the safety of their assets. As an example, millions of Chinese investors suffered huge losses in two cases of financial fraud in 2015. Systematic risk spreads through the financial chain. That is why it is necessary to look into particular financial products and services to see how they would most likely influence other links in the chain [in a time of crisis]. Even a minor loophole must be treated carefully, otherwise it could trigger big, uninten-

NC: What changes have you observed since the late 1990s in China’s financial environment and in the means of dealing with financial risks? CE: I was part of the team dealing with those financial risks at that time. We lacked financial and institutional resources. The State-owned commercial banks were new and burdened with bad loans left behind from the planned economy. The Commercial Banking Law had just come into being in 1995. The market was not sound, either, providing no price signal to steer supply and demand. The national coffers were not full enough to offer any help. In this context, we had no choice but to shut down insolvent enterprises [that would never have been able to pay back loans]. The top priority was to protect at least 70 percent of depositors to avoid a bank run. The next step was to sift out any bigger savings accounts connected to illegal activity. In this way, we managed a relatively smooth transition. Things are much more complicated today, although our banks’ balance sheets are far stronger than they were 20 years ago. Both enterprises’ and society’s exposure to systematic risk is the most terrifying issue today. Even without a bank run, an economic disaster could happen once risk starts spreading. For example, paying via mobile-based financial platforms has become a part of our daily life. In this area, the potential risks are not simple, like bad loans; the risks are an insecure banking system and leaked personal information. Our regulatory framework needs to be reformed so it covers all of these risks. NC: In 2015, many online peer-to-peer lending platforms disappeared and their founders absconded with investors’ money. In January 2016, for example, executives of an online peer-to-peer lending platform under the Anhui Province-based Yucheng Group were arrested for running a Ponzi scheme through which they defrauded 900,000 investors out of US$7.7 billion. How do you think that online financial services should be regulated? NEWSCHINA I May 2016

china

CE: The peer-to-peer lending market is big enough now to merit being put under scrutiny. This should include improving investors’ awareness of the risks involved. Lack of transparency from online platforms is compounded by some investors’ weak professional judgment. The Yucheng case was a trap that lured investors in with [promises of] high returns from phantom projects that never existed. New business models always come with risks. The key to improving the efficiency of a regulatory framework is better coordination between regulators that are responsible for different areas. It simply does not work to have one department responsible for market growth and another for supervision if both do not consider the broader picture. The mindset that unresolved problems are always someone else’s concern never helps. NC: China’s stock and foreign exchange markets suffered significant volatility last year. One of the lessons from that was how necessary it is to reform the regulatory framework of the financial market. What are your suggestions for this reform? CE: There are legal and institutional restrictions which have made it barely possible to put all banking business under scrutiny. Regulatory agencies are still divided, while the market is increasingly integrated. There is the question of how we should define a particular service that involves two financial areas, and who should regulate it. For example, securities regulators are supposed to distinguish what sectors within a bank are securities-related and put only those under their scrutiny. Standards that are too suffocating could hamper the banks’ growth, while standards that are too loose would make no sense. Given this, sorting out the different functions of every part of the market and the regulatory structure needs to be our first priority. Before reform can happen, we need to understand more clearly how capital would slosh around the financial market and the economy as a whole in the context of either sufficient or insufficient liquidity. In this sense, it is not just a choice between putting all the existing financial regulatory bodies under one umbrella, or having them do their jobs completely independently.  NEWSCHINA I May 2016

bynumbers US$6.7bn Drop in outstanding foreign currency loans in China in February compared to January, the seventh consecutive monthly decline . At the end of February, China’s outstanding foreign currency loan balance stood at US$816.8bn, and foreign currency deposits were at US$655.2bn.

Foreign currency deposits and loans by Chinese financial institutions, US$bn 30

Deposits

15 0

Loans

-15 -30 -45 -60

Aug’15

Sept’15

Oct’15

Nov’15

Dec’15

Jan’16

Source: People’s Bank of China

9.6%

Share of total GDP held in 2015 by China’s maritime sector, mainly fisheries, wind power, tourism, port services, and oil and gas, slightly higher than the 9.4 percent recorded in 2014

China became the US’s top trading partner in manufactured goods in 2015, overtaking Canada

Geographical breakdown of China’s maritime sector as a % of maritime output in 2015

Leading US exports to China, 2015, US$bn Civilian aircraft, engines, equipment and parts 15.4 Soybeans 10.5 Passenger cars, new and used 9.1 Semiconductors 6.0

Leading US imports from China, 2015, US$bn

Other 14%

Pearl River Delta 21.3%

Feb’16

Cell phones and other household goods 64.6 Bohai Sea Rim 36.2%

Computers 43.7 Computer accessories 30.4 Toys, games and sporting goods 27.6

Source: US Census Bureau Yangtze River Delta 28.5%

Source: State Oceanic Administration of China

2.9 : 1 China’s current ratio of working people to retirees

79,000 The number of hi-tech enterprises registered by the end of 2015, according to 2008 national standards. New standards were approved by the State Council in early 2016. Sources: Ministry of Science and Technology of China, The State Council Information Office of China

Sources: Ministry of Human Resources and Social Security, The State Council Information Office of China

Culture

dragonfly’s eyes are huge compared to the rest of its body. They are an example of compound eyes, meaning they are made up of many tiny lens units known as ommatidia. Some subterranean insects only have 20 ommatidia and a typical housefly has upwards of 3,400, but dragonflies have about 30,000. Their eyes’ large, globular shape also gives them a 360-degree field of vision. Xu Bing, a renowned Chinese contemporary artist who has won a MacArthur Foundation “genius grant” and held solo exhibitions in five continents, named his debut film after these all-seeing organs. Dragonfly Eyes takes an unprecedented form for a feature-length production. Eschewing camera operators and on-screen actors, Xu’s film is a compilation of surveillance footage collected from thousands of security cameras and presented in narrative form. Through this project, which is set to be complete within the year, Xu aims to reveal a truth about modern life which people are generally blind to — even during some of your most intimate moments, you are being watched.

Unprecedented

Xu Bing

Prominent visual artist Xu Bing’s first feature film is composed solely of footage from China’s millions of surveillance cameras, altering viewers’ concepts of reality and showing them just how often they are being watched By Wen Tianyi Xu Bing

Photo by Dong Jiexu

Dragonfly Eyes

“Do you know how many surveillance cameras you passed on your way here?” Xu asked our reporter with a grin. In 2014, the Wall Street Journal quoted a security industry specialist who estimated that China is home to 100 million such cameras, or about one for every 14 people. And they catch it all. As if to illustrate this exact point, rough cuts of car crashes, gang fights, a suicide, murders and even a lightning strike are stuffed into the movie’s threeminute trailer, which was released on December 31, 2015. Unlike other films, which would use special effects for these scenes to imitate reality, Xu’s film presents the reality itself. Every single frame, every shot – be it comical or horrifying – is not a reenactment; it actually happened in someone’s life. “Dragonfly Eyes does not belong in any genre,” Xu told our reporter. “We might call it a ‘film of samples.’” As all of the film’s scenes were sourced from surveillance footage, it was impossible to have a main character consistently appear throughout the movie. To fix this problem, Xu made the protagonist a woman who frequently undergoes cosmetic surgery and therefore constantly changes in appearance. Her name is Dragonfly. To create the audio for Dragonfly’s journey, Xu had voice actors dub the video clips, as security cameras often don’t record sound. Xu embarked on this project four years ago. The greatest challenge he faced, in its early phase, was access to the materials. Obtaining surveillance footage at the time was immensely difficult; Xu tried many different tactics, even resorting to persuading security guards or friends who work for TV stations to acquire film for him. Yet, struggling with the potential legal complications and his own inability to get his hands on enough tape, Xu suspended the project. The turning point occurred in 2015, when Xu started noticing that more and more security camera footage was being aired publicly on law-related TV shows and online platforms. Xu also found many live-streaming websites that were filled with footage from surveillance cameras monitoring apartment complexes, bars, highways, hospitals NEWSCHINA I May 2016

and more. The discovery facilitated the process of collecting film tremendously. Late last year, Xu and his 12-member team collected about 10,000 hours of footage by keeping 20 computers running 24 hours a day. This sudden abundance of material gave Xu more creative leeway to flesh out his original storyline. “I had a simple outline for the story in the very beginning, but as the number of video sources increased, my script kept changing right along with it,” he told NewsChina. “Those materials were a real-time record of people’s everyday lives, there was no way to predict what would happen next; all we could do was interact with it.” In Xu’s view, the collected footage “possesses a vitality” that allows it to constantly grow and transform. “In other words, throughout the process of gathering and editing the materials, I was not sure what the work would eventually turn out to be.” But apart from the quotidian scenes of ordinary life, what really shocked Xu about the footage was that it was riddled with gore and violence. Car accidents, fistfights, robberies and murders had all been captured by the all-seeing lenses. “The level of cruelty was too severe to be used in our film,” Xu told NewsChina. Xu was born in the central Chinese city of Chongqing in 1955. He grew up in Beijing, where his father was the head of the history department at Peking University. Xu was relocated to the countryside from 1975 to 1977 as part of Mao Zedong’s movement to send urban youths to work in rural areas for “re-education.” In 1977, Xu started studying at Beijing’s Central Academy of Fine Arts (CAFA). After graduation, he did a stint of teaching before receiving his Master of Fine Arts there in 1987. At the invitation of the University of Wisconsin-Madison, Xu moved to the US in 1990 and remained there for 18 years. He received a MacArthur Fellowship in 1999, presented to him for his “originality, creativity, self-direction and capacity to contribute importantly to society, particularly in printmaking and calligraphy.” In 2008, he was appointed CAFA’s vice president and thus returned to Beijing. After a six-year term, he gave up his vice presidency, and now advises the academy’s doctoral students as a professor. He also serves as a professor-at-large at Cornell University. Xu is known as a bold artist who questions the status quo and rattles existing cultural assumptions and world-views. Many of his most thought-provoking pieces contemplate the relationships between language and meaning, reality and unreality, East and West, as well as tradition and modernity. In his monumental project Book from the Sky (1987-1991), the artist invented 4,000 “new” Chinese characters, which looked similar to standard Chinese script but were in fact completely fabricated. Xu carved the characters by hand into wooden printing blocks, then used them as movable type to print ancient-looking volumes and scrolls, which he displayed both laid out on the floor and suspended from the ceiling. The work completely deconstructed the relationship between

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Photos sourced from the Internet

True or False?

Screenshots from the Dragonfly Eyes trailer

language and meaning, something that “infuriated” many intellectuals when it was first exhibited in Beijing in 1988 because they “were so accustomed to seeking out meaning in words,” he recalled. In contrast to Book from the Sky, which no one can decipher, Xu’s Book from the Ground (2007) is a piece made for everyone to understand. In the latter, Xu bypassed the need for language and used icons and emojis to tell the story of 24 hours in the life of a typical white-collar urbanite. The emoticons form lines on the page, just like printed type. Regardless of their linguistic or cultural background, viewers can easily comprehend this pictorial storytelling style through images that transcend verbal language.

The postmodern, deconstructive characteristics of Book from the Sky and Book from the Ground are also clearly embodied in Dragonfly Eyes. In the film, the artist often playfully but thoughtfully challenges the audience’s conceptions of reality, rationality and the notion that, in this day and age, we are constantly under surveillance. A sense of satire permeates the entire avant-garde film. The first shot of the trailer is of a projector screen that’s playing what starts off every major Chinese film – the logo of China’s State Administration of Press, Publication, Radio, Film and Television (SAPPRFT), a golden dragon on a green backdrop that is as familiar to Chinese moviegoers as MGM’s roaring lion is for Western viewers. This footage, like the rest of the film, was originally recorded by a surveillance camera. But the dragon is not a studio’s production logo, like MGM’s lion. Instead, it represents a stamp of SAPPRFT approval, signifying that the film it precedes has been licensed for screening in Chinese theaters. The effect is pure irony, Xu told The Art Newspaper China: “[Dragonfly Eyes] would never get a ‘dragon license’… so putting a ‘faked’ [SAPPRFT] logo at the beginning of our movie creates a sense of absurdity and enhances the degree of satire.” The entire plot itself also plays with the line separating truth and fiction. Xu said the basic plot line originated from a news story that went viral a few years back, in which an initially unattractive woman had so much cosmetic surgery before meeting her husband-to-be that, after they married and she gave birth to three homely children, her husband sued her for deception. It later came to light that the story had been fake. But as Xu used actual surveillance footage to tell this tale, he made it “real,” allowing viewers to watch it unfold. Apart from documentaries and biopics, most films are viewed as works of fiction, so Xu’s unique, “sampling” form of filmmaking challenges people’s definition of truth. As he concluded after watching thousands of hours of tape: “Real life is far more absurd and illogical than any work of art or anything we could ever imagine.”

‘Reality’ Show

Xu said both George Orwell’s Nineteen Eighty-Four and the 1998 American movie The Truman Show provided nuggets of inspiration for Dragonfly Eyes. “In Nineteen Eighty-Four, people still view surveillance with a sense of fear,” Xu said. “But in real life, today, the relationship between ourselves and surveillance has already changed – people are no longer afraid of it; instead they’ve learned to make peace with it, or even use it to their advantage.” The Truman Show, in which the title character learns mid-movie that his entire life is actually a reality TV show being broadcast world-

Poster for Dragonfly Eyes

Photos sourced from the Internet

Culture

wide, shows just how far surveillance can go. In Xu’s view, the future that The Truman Show prophesied has already come true. “The Truman Show conceived of a possibility, and [Dragonfly Eyes] proves its realization,” Xu told NewsChina. “Human beings have already turned the entire world into a boundless theater, and every one of us seems to have become a Truman” performing on a stage. The existence of today’s near-omniscient mass surveillance systems, in Xu’s view, provides humans with a new lens through which to understand truth. Throughout the course of human history, people have claimed to witness many bizarre or incredible things, but can do nothing to prove their verity. Xu believes that the security camera network gives humans a chance to record and later view history in its entirety, creating a more accurate version of oral and written historical records. “In the film, there is a scene in which a passerby is knocked down by a loaded truck and dragged under it,” Xu told The Art Newspaper China, as an example. “We would think that man is definitely done for. But after the truck rolls over him, he gets up and… walks away. If this scene were in a [typical] movie, it would strike audiences as unrealistic.” The fact that cameras have captured such implausible moments, therefore proving their authenticity beyond a shadow of a doubt, “forces people to reconsider the boundaries of logic and reason,” he added. “Do you know how many surveillance cameras you passed on your way here?” Xu asked our reporter again, at the end of the interview. “You leave your house, take a taxi, buy a bottle of water from a convenience store and make a phone call along the way – cameras might be recording your every move, it’s just that you don’t know it.” NEWSCHINA I May 2016

Tangible Poetry Lü Jingren, one of China’s best-regarded book designers, believes the bookbinder’s art will always bring life to the printed word

Lü Jingren has designed more than 2,000 books NEWSCHINA I May 2016

Photo courtesy of Lü Jingren

Lü Jingren

By Chen Wei

Photo by Zhen Hongge

Lü Jingren

Culture

ü Jingren sports a beard and a pair of round-framed spectacles. His jovial eyes almost disappear when he breaks into his signature grin. People who know Lü by reputation describe him as one of China’s most accomplished book designers. But those who know him as a person understand that his fame belies a humble and amiable soul. In his 38-year career, Lü has designed more than 2,000 books. He describes himself as a “busy pig,” a reference to his year of birth according to the Chinese zodiac and his irrepressible work ethic which, he admits, “is hard to change.” He even has a penchant for collecting pig-themed miniatures. In 2009, one of Lü’s designs, a book entitled Chinese Memory, won the “Most Beautiful Book in the World” prize at the renowned Leipzig Book Fair. Other accolades bestowed upon Lü include being named one of the world’s “Top 10 Chinese Designers” by Guangxi Zhuang Autonomous Region’s A View on Publishing magazine and “Top 10 Asian Designers” by Taiwanese publication CommonWealth. An upcoming solo exhibition of Lü’s work will be held in South Korea in October, and it will move to the US in February 2017. He and his disciples will also hold a joint exhibition in Beijing in 2017. Zhang Kangkang, one of China’s most famous female writers, once said of Lü’s designs: “In the wobbling, flashy and virtual Internet age, [his] beautiful, substantial books are quietly providing a tangible sense of poetry in our lives.”

Family

Born in 1947 into a Shanghai family with five sons, Lü’s father was a silk merchant with a deep interest in culture and art. Lü’s upbringing had a lasting influence on his design work. His father set up a library for his children, stamping every book with a logo made up of the character Lü, their family name; “ren,” a given name shared by all five brothers; and the different characters preceding ren in the brothers’ names. “I realized that characters could form patterns, which became a subconscious influence on my design,” Lü told NewsChina. Beyond literature, Lü’s father’s interests also extended to traditional Chinese opera, calligraphy, painting, photography and sports. Lü remembered that in early summer, his father would spread his collection of paintings over the family’s balcony to get rid of unwanted moisture. He also built a darkroom to develop photographs in their home. His family held parties where slideshows and amateur puppet shows written and directed by friends and family were the main event. Lü and one of his brothers were eventually sent to study painting. Lü’s father invited foreign designers to design the logos, packaging and swatches for his company’s silk products. Lü admired their exquisite, unique patterns and ingenious use of characters, and began to

Books designed by Lü Jingren

collect his favorite examples of their art. What impressed him most, however, was how his father would painstakingly wrap each package in an orderly and precise way. Lü remembers his father’s resolute stance, slowly turning the six-sided presentation box in his hands, and quickly and neatly wrapping it in an elegant ribbon. “I am always grateful for the inspiration I gleaned from my father.” Lü told NewsChina. “He helped me understand the relationship between form and content, and the rules of building harmony through order.”

Director

In 1978, the year China initiated Reform and Opening-up, Lü began work at China Youth Press as an “art editor.” His job was to design the covers of the publishing house’s books. At the time, he admitted to our reporter, there was barely any concept of “design,” especially of designing a book “as a whole.” China was emerging from decades of communist austerity and the iconoclastic anti-intellectualism of the Cultural Revolution. Beauty for its own sake was a new idea. In 1989, Lü was offered the opportunity to study with Kohei Sugiura, one of Japan’s top graphic and book designers. In Japan, he said, many of Lü’s preconceptions about design were “overthrown.” “[In Japan] I learned that designing a book is more than drawing some pictures. It is about organizing information in a way that is NEWSCHINA I May 2016

Photo courtesy of Lü Jingren

most conducive to reading,” Lü said. In Japan, a book’s designer would meet with all parties involved in a book’s production: editor, writer, illustrator, papermaker and publisher. Lü told NewsChina that Kohei Sugiura was like a director – he would provide a “complete solution” encompassing every detail of a book to integrate design with content. It was also while in Japan that Lü learned that the spaces left between Chinese characters on the page shouldn’t be made uniform: simpler characters should be closer together, while more complex ones should be a little further apart, allowing each set of strokes room to breathe. Lü brought these new design ideas back to China. In his view, his process has three phases: decorative and graphic design (cover, materials and printing), layout (placement of text, illustrations, spacing and colorization) and editing (the visual impact of the text itself). When Lü designed a new print edition of a biography of legendary Peking opera star Mei Lanfang in 2000, he received the book’s 350,000 characters from the editor, with no supplementary materials. Lü suggested to the publisher that there should be abundant photography and illustration in a biography of such an accomplished, and visually impressive, performance artist. Through lengthy negotiation, Lü acquired consent from Mei Lanfang’s estate and collected more than 100 photos of Mei, allowing him to completely transform the layout of what would have been a very dry printing of a seminal work on one of China’s preeminent stage icons.

Gentleness

Over the years, Lü began to discover that one of the most important aspects of design was what he describes as “mastering the esthetics of order.” In the 1970s and 1980s, typographic design in China mostly

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“followed the designers’ intuition.” Lü introduced the grid system, learned from Kohei Sugiura, into China. The grid system of book design holds that all space on the page needs to be arranged with an invisible order which can form a harmonic interaction between all visual elements, from text to illustrations. Lü’s designs adjust the scaling of all visual elements according to a precise mathematical formula. For example, when using a 16 point font size for a title, he uses 10 point for body text and 8 point for annotations, pegging all typeface sizes to base two. “It’s a system of standards, which is the basis of design,” commented Zhang Zhiqi, a senior art editor at Higher Education Press. Lü argues that his design concept is far from new. He cites the Yongle Canon, one of the world’s earliest and most comprehensive encyclopedias compiled by an estimated 2,000 Chinese scholars in the early 15th century. On close inspection of the text, Lü was surprised to find that the horizontal-vertical ratio used in the compendium’s layout is 1:0.626, which is very close to 1:0.618, the Golden Ratio celebrated in the classical Western tradition. He also found the spacing between characters, rows and paragraphs to follow specific patterns. “This proves that the ancient Chinese had the concept of a grid system, though they did not refer to it as such,” Lü told our reporter. Lü often looks to the ancients for his inspiration. “I like the taste of classical Chinese design,” he said. One of his favorite books he was commissioned to design is an overview of the art of Suzhou folding fans, an art form in constant development since the Ming Dynasty (1368–1644). Lü integrated ancient thread-binding techniques into his design, along with scripture-style folding pages and other classical flourishes. When asked to design a new edition of the 13th-century melodrama The Orphan of Chao that would ultimately be presented to foreign dignitaries (the tale is particularly popular in France), Lü chose to integrate both Chinese and Western elements into the design, ultimately creating two covers. One was inscribed with the characters that appear on a Ming Dynasty edition of the book, emblazoned on a scrolling Chinese ruyi motif. The “foreign” cover featured the book’s title in French and was decorated with a pattern of geometric curves. The two covers were designed to represent cultural dialog between China and France. Lü, now 69, still spends every day in his studio. He told NewsChina that although the age of the touchscreen has come, and even if one billion Chinese no longer read paper books, he’s still happy to design for “the remaining 400 million.” “I don’t think the book is going to disappear,” he said. “The key is that those cherished by their readers will be passed down from generation to generation as proof of the gentle refinement that reading once represented.”

Visual REPORT

Lama Town 2

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High in a treeless and secluded valley, 20 miles from Serthar County in Garze Tibetan Autonomous Prefecture, Sichuan Province, lies the Larung Gar Buddhist Academy, also known as the Serthar Buddhist Institute. Founded at an elevation of 4,000 meters, the institute houses a holy shrine and more than 40,000 monks, nuns and lay brothers and sisters studying Tibetan Buddhism. Established in 1980 by influential lama Khenpo Jigme Phuntsok, the institute initially only had 30 students, but has since grown into one of the world’s largest centers for the study of Tibet’s indigenous branch of Buddhism. The view from the monks’ cells is spectacular: Rolling mountains cradle the deep valley, and tens of thousands of tiny wooden box homes crowd the hillsides around the main temple buildings. The monastery hosts the Utmost Bliss Dharma Assembly, the final of four annual Tibetan Buddhist conclaves. During the eight-day gathering, thousands of pilgrims gather for daily chanting to commemorate Gautama Buddha’s descent from Tushita Heavens. Neither the freezing temperatures nor the tough mountain roads deter pilgrims. Believers also mark the occasion by practicing good works, believing that the more good they can do during the conclave, the better their karma for the coming year.

1 1. Tibetan prayer flags flutter over Larung Valley 2. An ethnic Tibetan woman walks beneath an image of Khenpo Jigme Phuntsok displayed behind prayer wheels in the Serthar Buddhist Institute 3. An ethnic Tibetan from the Kham area wears a traditional headdress made of amber and stones 4. Monks distribute hot tea during morning prayers as temperatures drop below freezing

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Visual REPORT

1. Tibetan Buddhist monks pray at a lay lodge 2. Monks and nuns make the steep climb back to their huts after attending daily prayers 3. Tibetan Buddhist nuns tend the flames of yak butter lamps 4. A Tibetan Buddhist monk snaps a photo with his iPhone 5. Photos and IDs of missing people are displayed on a wall near a monastery

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OUTSIDEIN Perspectives from within China

Transporting Tianjin

Past is Present Nine countries effectively colonized the city of Tianjin, imprinting it with a culture it has since tried to reappropriate as its own By Brittney Wong

n 2007, an eccentric cultural relics collector placed the last of hundreds of millions of shards of Chinese porcelain into the surfaces of a century-old French mansion in one of China’s major port cities, Tianjin. The construction is a perfect metaphor for the city itself. Its foundation stands on Chinese soil, yet its flesh and bones are French, as it was built while the area was part of the city’s French concession. Then, not long ago, Chinese workers blanketed its exteriors with whole and partial Chinese ceramics, each with a history of at least 200 years, according to the project’s offbeat architect. It is a piece of colonized history, repurposed with a Chinese face. And that’s Tianjin. It has been stamped with the characteristics and cultures of the nine countries that once established concessions within its city borders. Now that those countries are gone, locals have repossessed the vestiges of foreign power and tried to make them Tianjin’s own. Between 1860 and 1902, Great Britain, the

US, France, Germany, Japan, Russia, Italy, Austria-Hungary and Belgium sequentially portioned off local land, with the last holdout retaining its concession until 1947. They built their own schools, operated their own prisons and collected their own taxes. As a result, Tianjin is transporting. A walk through the city center is a global expedition. Tiny Parisian alleyways branch off from a stall-lined pedestrian street. Wall Street bank columns shoot out of sidewalks. London row houses cozy up behind intricate wroughtiron gates. But everything is slightly off. The alleyway stalls sell selfie sticks, not French handicrafts. The columns bear the characters for Bank of China, not the name of a Wall Street giant. And out of one of the chestnut row houses that would look at home on the set of Sherlock emerge two Chinese women, languidly hanging pink cotton bedsheets on an undeniably Chinese clothesline. Tianjin is a smaller version of its colonial big sister,

Shanghai. It is the embodiment of what happens when East literally meets West.

Porcelain House

While Tianjin is not typically an international destination in itself, it is the perfect weekend or even day trip away for Beijing tourists. High-speed trains headed for Tianjin leave the capital every few minutes during peak hours, and passengers sit for just over half an hour before disembarking in the port city. At 54.5 yuan (US$8.42), an economyclass train ticket costs less than a mid-range meal. Take Tianjin by foot. It’s the best way to drink in the discord. Right in front of the train station, the Haihe River unwinds itself as locals fish from above with nets affixed to six-meter-long bamboo poles. A steel bascule bridge lords over the river just steps southwest. Originally built by the French concession government in 1927, the bridge was originally dubbed Bridge of Ten Thousand Countries, but was renamed Liberation NEWSCHINA I May 2016

Tianjin’s Three Specialty Foods Don’t leave the port city without snagging its most famous snacks Goubuli Buns: These creased steamed buns are fluffy, doughy pockets containing different fillings, most typically pork, seafood or vegetables. Their unusual name translates roughly as “the dog doesn’t pay attention.” Legend has it that they got their name because their inventor, an industrious young entrepreneur nicknamed Dog, became so busy at his too-successful bun shop in Tianjin that he couldn’t even pay attention to customers.

Photo by Xinhua

Erduoyan Fried Cake: With a name that translates as “earhole,” these cakes don’t sound too appetizing, but they’re mouthwateringly delicious. They are balls of slightly sweetened glutinous rice with a filling of luscious red bean and sugar, all deep-fried to create a crispy first bite and a soft center. Vendors sell them right on Tianjin’s streets. 18th Street Mahua: Mahua are fried dough twists, seasoned with everything from osmanthus and rock sugar to walnuts and sesame seeds. They’re crunchy to the core. While they’re available throughout the country, Tianjin’s Guifaxiang 18th Street mahua are the most famous. Guifaxiang 18th Street’s first store opened its doors in 1927 on, of course, 18th Street.

Tianjin is a living exhibition of different architectural styles from around the world

Bridge in 1949. A short stroll through the northern part of the French concession leads to the aforementioned Porcelain House. The structure is a museum open to the public for 35 yuan (US$5.41). Often compared to works by Gaudí, the building’s facade is a chaotic collage of porcelain-drenched walls, vase-tiled roofs and unexplained, serpentine limbs that curve around the house like porcelain-scaled dragons. Even the handicapped bathroom’s wheelchair icon is marked in the material. Inside the mansion, detailed porcelain mosaics of twisting carp, crowing roosters and Yuan Dynasty (1271-1368) calligraphers decorate the walls. The entire museum seems to have been constructed for the purpose of illustrating the word “quirky.”

Five Great Avenues

A 30-minute walk south from the Porcelain House brings you deep into the former British concession. Unlike street-side shops in other Chinese cities, Tianjin’s stores don’t

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hang signs that are blocks of color, screaming out to passersby with three-feet-high font. All of their signage blends more into the background, heightening the feeling that you’re walking down a London residential street instead of a Tianjin tourist attraction. But that’s what Tianjin’s Five Great Avenues is now. The five boulevards, originally labeled with names like Edinburgh and Cambridge, now mainly bear the names of Chinese cities. Edifices exemplifying European architecture of all sorts sprang up in this area during the 1920s and ’30s. It attracted many wealthy Chinese, so dozens of homes here wear placards with the names of their famous former occupants, ranging from war heroes to toplevel politicians. It’s a 1.28-square-kilometer architectural museum. At the Five Great Avenues’ heart is Minyuan Plaza, a huge stadium with a public track and turf area where older couples power-walk together and families toss Frisbees. Originally built in 1920, this newest incarnation opened its doors in 2013. Just like the Five

Great Avenues area as a whole, the stadium is a symbol of a foreign power, reappropriated by Tianjin’s government and repackaged as a tourist attraction.

‘Italian Style Town’

The Italian concession stretches north of the Haihe River. Marked by expansive roundabouts and statues of figures like Dante Alighieri, one section of the former concession, branded as “Italian Style Town,” is now a remodeled shopping and restaurant district riddled with tiny alleyways and pedestrian-only avenues. What once was an Italian community has been painted over with Chinese features. Street vendors hawk souvenirs, Tianjin postcards and in-vogue accessories aimed at a Chinese crowd. A pair of caricaturists set up easels to display their best sketches of Chinese celebrities. Tuk-tuk drivers idle next to a stall selling seafood fried rice, hoping a tourist will climb aboard for a guided tour of the district.

travel

Tianjin Eye

The walkway running alongside the Haihe River is perfect for runners or couples taking wedding photos (we spotted two). Walk a few kilometers along the path, heading northwest from the Italian area, and soon you’ll spot the Tianjin Eye rising out of the water. The 120-meter-tall colossal Ferris wheel straddles the river and dwarfs most surrounding buildings. Aim to arrive just as the sun is about to set and get in line quick; staff members cut off the line as early as half an hour after sunset, depending on how quickly they fill the queue. The line may take an hour and a half and the ticket prices are steep (80 yuan [US$12.30] per person, 400 yuan [US$61.49] to book an entire gondola), but the night view of the city unveiling in front of you is exceptional. The red glow of the Tianjin Eye itself reflects off the windows

of neighboring buildings while skyline lights shimmer off the Haihe River. The half-hour ride goes by all too quickly.

Tianjin Museum

The Tianjin Cultural Center is a beautifully laid out complex of museums and exhibition centers, all of which face a sheet-like expanse of water that mirrors their dramatic architecture. Next to the graceful curved crescent of the Tianjin Natural History Museum looms the Tianjin Museum, an imposing rectangular block and the largest museum in the city. While many visitors come for the displays of cultural relics, calligraphy and porcelain wares, the museum’s detailed exhibits on Tianjin’s history merit more recognition. The first-floor one begins with the first signs of human life in Tianjin and works up to the late 19th century. It explores the city’s roots,

Opium War experiences and basic industries at a time when Tianjin’s population had yet to reach a quarter of a million (it now exceeds 15 million). But the museum’s real jewel is the third-floor exhibit titled “One Hundred Years in Tianjin.” It documents the city’s history with concessionaires, a short-lived provisional government, the Boxer Rebellion and the Second Sino-Japanese War (193745), ending with a display of the first fivestar Chinese flag flown in Tianjin after the founding of the People’s Republic of China in 1949. The content is one-sided, but it’s a side not often seen by Western eyes. The comprehensive photos, decent English translations and unique content all make this museum a must for any tourist looking to better understand Tianjin’s past before crossing back over Liberation Bridge, buying a train ticket and hurtling back to Beijing.

real chinese

hǎi

táo

haitao buying foreign

Lacking confidence in the quality of domestic goods, more and more Chinese people have started shopping on foreign websites, a practice which is called “haitao” in Chinese. “Hai” means “sea” or “from overseas” and “tao” can be translated as “shopping” (as well as the first half of the name of Chinese e-commerce giant Taobao). The first haitao surge resulted from China’s 2008 melamine scandal, when the public found out 22 domestic producers had produced baby formula containing potentially lethal doses of melamine (a chemical harmful to the urinary system), triggering nationwide panic over the quality of domestic milk. Since then, many Chinese parents, especially those with a higher disposable income, have preferred to buy their children’s milk from foreign sources. Foreign e-commerce sites like Amazon provided a convenient platform to meet the sudden demand.

Yet haitao did not reach its current level of widespread popularity until Chinese shoppers started discovering that foreign products, especially luxury goods, are much cheaper when purchased on foreign websites rather than at domestic stores due to China’s high taxes and tariffs. As more and more foreign suppliers and e-commerce companies vied to attract Chinese customers by making overseas purchasing as easy as possible and reducing international shipping costs, haitao grew to become a significant shopping avenue for Chinese urbanites. They click “Add to Cart” on products ranging from milk and snacks to clothing and cosmetics. The ballooning demand for foreign goods drew the attention of many Chinese e-commerce sites like Alibaba and NetEase. By employing professional buyers who source wholesale products in foreign countries or through

directly cooperating with foreign producers, these companies established special haitao sections on their websites. They have managed to attract a large group of customers who could not haitao previously because they did not understand foreign languages or were not accustomed to foreign payment methods. According to statistics from China’s General Administration of Customs and the China Ecommerce Research Center, China was home to 18 million haitao-ers in 2014, with their transaction volume amounting to 140 billion yuan (US$22.2bn). Analysts estimate that the number will reach one trillion yuan by 2018. Haitao fever has caused growing concerns among Chinese domestic producers who are now attempting to seize back market share by concentrating more efforts on brand-building and quality control. NEWSCHINA I May 2016

flavor of the month

The Heat Is On By Olivia Contini

NEWSCHINA I May 2016

the spiciest, they are all spicy!” I let him choose for me. The tangy smell of suan la, sour and spicy, fish soup had my mouth watering before I clapped eyes on the steaming dish. This traditional favorite of the Miao ethnic group achieves its mouth-puckering sourness from slowpickled local Guizhou tomatoes. The astringency of the pickles helps temper the chili peppers and chili oil that are also added to the broth. Scrambled eggs set alight with zao la jiao, fermented chili paste, followed the soup course – a heady combination of hot peppers and garlic steeped in rice liquor for up to two weeks that is used as a go-to kitchen cupboard condiment by Guizhou natives the world over. So, Guizhou packs a punch, but what of the Xiang cuisine originating in Hunan Province? Chili pepper volume in Xiang dishes beats that found in Sichuan and Guizhou dishes almost every time. Hunanese chefs began using red chili peppers to flavor food earlier than their Sichuanese counterparts, which may explain why so many dishes are spiced using both fresh and dried red chilies. The taste created is described as gan la, dry and hot, and can be eye-watering, but goes spectacularly well with the locally reared beef. With the changing of the seasons in Hunan comes a changing of menus. Winter menus feature gan guo, small cast iron pots that are brought sizzling to the table. Though the spices used are similar to those found in a Sichuan hotpot, the absence of broth makes the kick that much more fiery. As the heat of summer rolls around, hot food is replaced with cold cured meats, though these too are liberally seasoned with fresh red chilies, designed to coax a sheen of sweat onto the forehead of diners keen to cool off. But Sichuan’s approach to spice is still deserving of praise, as, of the three I have researched, it is perhaps the most complex. An important aspect of Chuan (Sichuanese) cuisine is the combination of basic flavors in the formation of ba wei – “eight flavors” – of spice. The saying “One dish, one taste; hundreds of dishes, hundreds of tastes,” reflects Sichuan’s extensive relationship with fragrance, spice and gastronomic refinement. In China’s chili triangle – Sichuan-Hunan-Guizhou – no one cuisine, it seems, can claim the “spiciest” crown. But all can claim, in their own right, to be exceptionally delicious.

Photo by CFP

Photo by CNS

n my mission to find China’s spiciest food, Sichuan Province was my first port of call. I give credit for my first experience of unique Chinese piquancy to the Sichuanese peppercorn. When I found some of these small, brown, harmless-looking citruses (yes, really) floating in a steaming bowl of fish broth, I popped one in my mouth and crushed it between my teeth. Curiosity did not serve me well. A strong, soapy taste flooded my taste buds, numbing my entire mouth, lips included! The notoriously anesthetic properties of the Chinese flavor ma la is used to excess in contemporary Sichuanese cooking, but this is a recent development. Believe it or not, flavors in this region of China were originally mild and sweet. In fact, though Sichuan is often considered the birthplace of China’s most tongue-searing flavors, a traditional Chinese saying goes, “Sichuanese don’t fear spice, Guizhounese don’t fear any degree of spice, and Hunanese fear food with no spice at all.” Could the food of Guizhou and Hunan Province really surpass that of Sichuan in terms of burn factor? The people of Guizhou Province, situated southeast of Sichuan, have a well-documented love for heat. Tradition would have it that if a person from Guizhou doesn’t eat spice for three days, they won’t be able to walk. Yet this province’s relationship with spice, at least according to legend, began by accident. When the worldwide spice trade first began over 4,000 years ago, the sheer expense and rarity of most seasonings relegated them to medicinal and religious use. During the Ming Dynasty (1386-1644), green peppers finally reached China from the Americas. When an enterprising chef in the employ of a Guizhou provincial governor served pork deep fried with hot peppers to an imperial envoy, the horrified dignitary, his tastebuds scorched, suspected poisoning. I like to think that once he realized he wasn’t dead, he might have ordered a second helping. I must admit, there are moments when I too am suspicious of the quantity of spice packed into some dishes, though I usually only have myself to blame. I caused quite a stir in my local Guizhou restaurant when I asked the owner to bring me the establishment’s spiciest dish. He seemed confused. “Which would you like? In Guizhou, no dish is

essay

The ABCs of Queuing By Madara Rudzite

Waiting in line is not a time to pull out a novel or indulge in Candy Crush

Illustration by Liu Xiaochao

Upon returning from Bangkok after the Spring Festival holiday, a friend and I sensibly decided to leave our Airbnb host’s home one hour earlier than necessary to get to the airport on time, anticipating Bangkok’s apocalyptic traffic and Google Maps’ unreliability. Surprisingly, however, we arrived early, and had three hours to kill. Looking past overpriced cafes and last-minute souvenir shops, we caught sight of an immense crowd – most of the passengers booked onto our Boeing 777 – already thronging the check-in counter. Sensing that something was out of the ordinary, we got in line quickly for what ended up being a 55-minute wait to get our boarding passes. 30 minutes and two fights later we realized that there was nothing wrong with the airline’s check-in system, nor was there any reason for an early bird check-in. The issue was cultural. Most of the passengers were Chinese, and we were experiencing fullfledged Chinese queuing in all its glory. Your first encounter with China’s most spectacular social art form can be terrifying, so to ease you into the experience, here is my patented “ABCs of Chinese queuing.” A is for “advance advantage.” In a country of over a billion people, if you show up a bit late for something, you might as well have stayed at home. Things on sale disappear immediately – during the last Singles’ Day, China’s Black Friday, the e-commerce giant Alibaba made its first US$1 billion within the first eight minutes. By 10 AM, they were cleared out. Recently, I concocted a plan to acquire a new Xiaomi phone through one of Alibaba’s weekly online flash sales. In the end, my friends gave me credit for at least trying. It’s not just online retail or the purchase of coveted train tickets during national holidays that bring the Chinese out in force – almost anything seems worth getting in line early for. Train stations, airports or office supply stores – at some point, they all witness a pitched battle. A national sense of “now or never,” possibly a somber echo of earlier

deprivations, lingers in the shared psyche. Though the challenges in modern China are thankfully nowhere near as harsh as those of the past, the unease that all might suddenly be taken away still lingers. I’ve seen locals

sprint to catch a train that is 10 minutes from departure, upon which all seats are allocated in advance. So, first lesson – be quick, or be trampled. B is for “beat ‘em.” Since many people like to queue early, desperately long lines or general heaving masses are a given. Waiting in line is not a time to pull out a novel or indulge in Candy Crush. Line-cutting is endemic, whether you’re in line for a movie or driving in a turn lane, and is pretty shameless. Banks and official institutions, with their numbered ticket systems, are the only safe havens. Otherwise, no trick is too dirty. Pretending your partner is in the front of the line by glancing at an irrelevant text message, then over the heads of those in front while pushing slowly forward, is a common one. Others will simply march on by, as if the line didn’t exist, and if you call them out, they will either stare at you in mock bewilderment, or try to laugh it off. It’s not encouraged in filial China for a 20-something like me to ask a lady old enough to be my grandmother to not cut me so I can weigh my vegetables first – but I have had to learn to do so. C is for “chaos.” Naturally, not everyone enjoys the Chinese take on the queue, and line-cutting is beginning to become viewed as a social transgression. Arguments pop up, sparked by unceremonious shoving or someone simply looking askance at someone else, and things can quickly get loud and chaotic. If a new ticket window, checkout line or sale item suddenly becomes available, the entire mob transplants itself in one writhing motion, pushing, pulling and shouting in a futile effort to be number one. I guess that brings us to D – “don’t sweat it.” As with so much in overcrowded China, the best response to the chaos of the queue is to take it in good humor. While in Bangkok, two fights erupted among our fellow passengers, one of which ended with two ladies having to beseech airport officials not to arrest their bellicose partners. In such a situation, what can one do but laugh? NEWSCHINA I May 2016

Getting To Know You By Sarah-Jayne Carver

NEWSCHINA I May 2016

A discussion about housing prices developed into an explanation of what had happened to her husband

Illustration by Liu Xiaochao

A couple of years ago, I spent a year living with a local family in Dalian as part of my studies. I’d ended up living with them because of a mix up with the university accommodation bureau – but this inadvertent homestay turned out to be one of my best experiences to date. My family consisted of my host mother (“Ayi”), her father (“Lao Ye”) and her daughter, a girl a few months younger than me (“Mei Mei”). As with many families across China, they were looking for a live-in foreign student to teach their daughter English, so I got to know Mei Mei very quickly. We’d spend a lot of evenings doing mock IELTS interviews, which would morph into informal chats about the similarities and differences inherent in growing up in China (her) and the UK (me). What I was most surprised by was how close Ayi and I became, especially as my Chinese improved. A lecturer in postgraduate medicine, Ayi was a highly intelligent modern woman, just as likely to be working late helping a master’s student with a thesis as she was to be posting pictures of her and her friends on WeChat. We clicked immediately and would spend many an evening sitting around the coffee table, snacking on whatever fruit was in season and chatting about what we’d done that day. In the beginning, a lot of our conversations centered on clothes. Mei Mei was extremely fashion conscious and looking at Ayi’s coiffed, dark red hair and colorful tailored clothes, it was easy to see where she’d inherited her sense of style. We all loved a good bargain and it was only after seeing them in action while out shopping that I learned how to haggle properly. When any of us bought a new item, two questions were asked: “Does it look nice?” and “How much do you think I paid for it?” I was initially taken aback by how honest mother and daughter were with each other – “No, Mom, that blue jacket is awful, it makes you look fat” – but as we became closer I came to re-

ally appreciate the brutal honesty. I knew if I tried something on and got a shrug and a “hai xing,” then my chosen garment probably was indeed “just OK.” As time went by and my Chinese improved, we started to discuss more complex issues. Mei Mei was in her final year of her undergraduate degree and was trying to choose a UK university at which to do her master’s. Ayi was highly involved in the decision-making process and the three of us spent a lot of time talking through the various options. Naturally they had a lot of questions, such as which city had the best nightlife or which course would be better

regarded by potential employers, and I was glad to be able to contribute. Advice was very much a two-way street and when in the second semester I started to get concerned in the run-up to my midterms, Ayi put it to me frankly: “You’re not doing as well this semester because you’re not working as hard.” She was right, I’d spent a lot more time traveling and eating out with friends, but by recognizing my sloppiness she’d given me the push I needed to reassess my priorities and get the results I wanted. While we were having lunch one day, a discussion about housing prices developed into an explanation of what had happened to her husband. I had been living with them for nearly six months by this point but, being from a culture where it’s considered rude to ask about such things, I had accepted that I would just never know. She explained in a stoical, matter-of-fact tone that her husband had died suddenly on a business trip to Brazil. He had been on track to be dean of one of the province’s best universities and she told me in detail about how the family had flown out to Brazil, along with a number of his colleagues. She spoke of the tragedy as if it were in the distant past, but with a strong sense of how her present would be different had things not transpired the way they had. Hearing the mixture of pride and sadness in her voice as she described her husband’s spectacular career and how young he had been at the time, I struggled to find the right words – in Chinese or English. When I moved in I’d hoped to become friends with my host family but had never expected to reach the stage where we were this involved in one another’s lives. We are still in touch and I got to see Mei Mei several times while she was studying in the UK, but I’ll always feel a particular nostalgia for the year we spent living together. If you asked a hundred people about their experiences with homestays you’d get a hundred different stories, but I know I would relive mine in a heartbeat. 

Cultural listings Cinema

Small But Beautiful From serving in the armed forces of the Kuomintang to a Japanese puppet militia and then the ranks of the Red Army, Gou Sheng, a youth hailing from central China, comes of age amid the murk, absurdity and cruelty of the Second Sino-Japanese War (1937-1945). Directed by Zhao Xiaoxi, an emerging young director in his mid-30s, Wang Mao premiered in March 2016 and has earned plaudits for its sharp observations, dark humor and disorienting change in overall tone when approaching its finale. The movie’s small budget of 2.7 million yuan (US$416,100) has also attracted attention, as has its impressive cast of virtual unknowns.

Music

Book

Independent Grocery Released on March 14, 2016, the socalled White Valentine’s Day, Hormone Grocery brings together 13 tracks from 13 independent bands and musicians straddling a number of genres, including electronic, indie pop, instrumental, folk and experimental. Possibly echoing its release date, the general atmosphere of the album leans towards softer, warmer and more romantic sounds. Comforting melodies, subtle arrangements, excellent postproduction and flashes of experimentalism secure its pedigree. As many of the featured artists are already well known in their fields, Hormone Grocery is something of a showcase of China’s best independent music.

The Story of the Marginalized By Yang Kuisong

Exhibition

Behind the Esthetics Female artist Liu Hong centers her work around female subjects. A recent solo exhibition of Liu’s latest work was held at Shenzhen’s e Museum of Contemporary Art from March to May 2016. Titled “Face: A Visualized Era of Living,” each piece quickly catches the eye, with a focus on portraits of young and vibrant women, mixing flashy hair colors with challenging expressions on monochrome faces set against sketched backgrounds. Active in China’s art scene since the early 1980s, Liu Hong has traditionally focused on raising awareness of gender issues in modern Chinese society. As gender politics have been watered down, and misogynistic esthetic standards imposed on women have endured, Liu’s exhibition looks beyond the “flashy standards” of China’s millennial generation.

Eight tragic stories involving eight people born before the founding of the People’s Republic of China in 1949 and suffering in the “new society” created by the Communists are the subjects of Yang Kuisong’s latest book. Calling their collective tale The Story of the Marginalized, Yang separates his cast from the “mainstream” and “revolutionary” groups lionized by the socialist regime. Holding down occupations such as police officer, teacher, doctor and sales rep, Yang’s characters are representative of the countless, faceless “nobodies” that failed to get a mention in official histories of post-revolutionary China. A professor and historian specializing in contemporary Chinese history, Yang’s account of these eight tragedies reveals a unique approach to research and, perhaps, a more representative reflection of the historical experiences of tens of millions of ordinary Chinese in the years after 1949. NEWSCHINA I May 2016

NEWSCHINA I May 2016

Commentary

We need a cure for toxic leverage China needs to take action to curb distorted financing of the real estate market, before a financial crisis ensues By Wan Zhe

fter launching various policies to encourage sales of unsold curb the excessive leverage in the housing market. First, the governreal estate inventory in an effort to boost investment and ment should strengthen regulation of the financial sector. With the stimulate the economy, the Chidevelopment of financial innovations such nese government appears to be faced with a as Internet financing through peer-to-peer policy dilemma. Not only has the stimulus platforms, various financial institutions Economists are now package further inflated already sky-high previously excluded from the housing marwarning that if this property prices in China’s megacities, it has ket have found a way in. The authorities trend of liberalization also proven ineffective in smaller third-tier must beef up their ability to monitor and continues, it could and fourth-tier cities – the very areas sufferrespond to a changing financial sector. trigger the collapse ing most from housing gluts. Second, the government should estabThe fundamental problem with the dislish an effective national personal credit inof China’s already tortion of value in China’s housing market formation system, so that financial instituoverheated housing lies in an excessive leverage ratio. Taking tions can obtain adequate information on market, causing a advantage of the recent stimulus policies, clients’ financial situations. Such a system major financial crisis including tax breaks and loosened payment would also serve to give an overview of the requirements, has allowed some financial general health of the financial sector. institutions to offer products such as “zero Third, in its overall strategy, the governdown payment ” purchases and “down payment must take a more cautious approach ment loans” to home buyers, effectively alin using financial leverage to stimulate the lowing them to purchase way beyond their economy. To some extent, China’s rapid means. As the housing market in megacities economic growth has been made possible offers better liquidity and higher yields, capiby such leveraging. An instinctive response tal tends to flow into these more volatile real at the local level to the recent economic estate markets, rather than into more affordslowdown has been to further increase fiable housing stock in the provinces. nancial leverage to stimulate the economy. Economists are now warning that if this However, the authorities must be aware of trend of liberalization continues, it could the risks associated with excessive leveragtrigger the collapse of China’s already overing. Misusing unregulated financial leverheated housing market, causing a major financial crisis. As hous- age to stimulate the economy is like swallowing poison to cure a ing prices continue to rise, ordinary people will be pushed further disease. out of the housing market, posing a real threat to political stability, given the priority attached to home ownership in Chinese society. The author is an economist with the China National Gold Group To address the problem, the authorities must take swift action to Corporation.

NEWSCHINA I May 2016