(03/12/13)
Newswire
China politics keep central bank hawks at bay, for now (Reuters) ................................ 4
Food Costs Threaten Rebound in China (Reuters) ............................................................... 6
China's Inflation Fight Starts to Squeeze Consumers (Bloomberg) ................................. 7
China Windpower Teams Up With China Development Bank for Solar (Bloomberg)
............................................................................................................................................................... 8
Print
After Censorship, Ex-Google China Chief Lee Kai-fu Talks About China's Social
Media Revolution (Forbes) ........................................................................................................... 9
Africa told to view China as competitor (The Financial Times) ................................... 11
China Cosco Plans to Sell Logistic Unit to Parent (The Wall Street Journal) ............. 12
Cars in China; Still racing ahead (The Economist) ............................................................ 12
Online
Step Aside Jack: Alibaba Gets a New CEO (THE WSJ CHINA REAL TIME REPORT
BLOG) ................................................................................................................................................ 13
A Notable Nod of Approval for China’s Central Bank Chief (THE WSJ CHINA REAL
TIME REPORT BLOG) ................................................................................................................... 14
Letv.com, Foxconn Team For Exclusive China TV Production Deal
(chinatechnews.com) .................................................................................................................. 15
China's Dangdang.com Shifts From Online Book Sales As Net Losses Increase
(chinatechnews.com) .................................................................................................................. 16
China's House of Cards (theatlantic.com) ............................................................................. 16
Which Leading Chinese Business Paper Just Got Hoaxed By Paul Krugman
Bankruptcy Satire? (beijingcream.com) .............................................................................. 17
Africa must get real about Chinese ties (The FT Beyond BRICs Blog) ........................ 18
China: riding the hog cycle (The FT Beyond BRICs Blog) ................................................ 20

China: investment still comes first (The FT Beyond BRICs Blog) ................................. 20
15 Web Entrepreneurs Under 30 Doing Awesome Stuff in China (techinasia.com)21
Alibaba Appoints Jonathan Lu as New CEO, Will Take Ma’s Desk on May 10
(techinasia.com) ........................................................................................................................... 24
Report: Samsung Still Dominates in China, Sold 30 Million Phones in 2012
(techinasia.com) ........................................................................................................................... 25
Xiaomi: 15 Million Phones to be Sold in 2013 (techinasia.com) .................................. 25
Is Tencent Really a Leader in Gaming Innovation? (techinasia.com) .......................... 26
North China Environmental Protection Work May Hamper Orient Paper
(chinasourcingnews.com) ......................................................................................................... 27
Four More China Tech Trends to Watch in the Year of the Snake (techrice.com) ... 27
Newswire
China Appoints Head of Top Political Advisory Body (The Associated Press) ......... 29
China’s Leaders Take Aim at Railways Ministry (The Associated Press) ................... 29
China's Xi flexes muscle, chooses reformist VP: sources (Reuters) ............................. 31
China parliament delegates speak out against corruption, red tape (Reuters) ...... 33
China unveils plan to streamline gov't (Xinhua) ................................................................ 34
How China Censors Weibo (Bloomberg) ............................................................................... 35
Print
U.S. Demands That China End Hacking and Set Cyber Rules (The New York Times)
............................................................................................................................................................ 36
To China's Censors, With Love (The Wall Street Journal) ............................................... 37
Online
New Fleet on the Block: China’s Coast Guard Comes Together (THE WSJ CHINA
REAL TIME REPORT BLOG) ....................................................................................................... 38
Is China Cracking Down on North Korea Trade? (THE WSJ CHINA REAL TIME
REPORT BLOG) .............................................................................................................................. 41
Xi Puts Money Down on Meaningful Reform (THE WSJ CHINA REAL TIME REPORT
BLOG) ................................................................................................................................................ 41
End of the Line for China’s Sprawling, Corruption-Plagued Railway Ministry (Time
World Blog)...................................................................................................................................... 42
Farewell Ministry of Railways (danwei.com)....................................................................... 43
China Word of the Day: “Restructuring” (chinahearsay.com) ....................................... 44

Activist And Hong Kong Cameramen Reportedly Beaten Outside Home Of Liu
Xiaobo’s Wife (beijingcream.com) ......................................................................................... 45
After Chinese Politician’s Slip of the Tongue, Mistrust Toward Charity Back in the
Spotlight (tealeafnation.com) .................................................................................................. 46
Newswire
China's heavy-handed censors will now have to endure Ai Weiwei's heavy metal
(Reuters) ......................................................................................................................................... 48
Print
Thousands of dead pigs found floating in Chinese river (The Guardian) .................. 49
Online
In Shanghai, Pork Soup Jokes Give Way to Worry (THE WSJ CHINA REAL TIME
REPORT BLOG) .............................................................................................................................. 50
Maybe this is why people are reluctant to donate to charity? Shenzhen family
scammed (thenanfang.com) .................................................................................................... 51
Willing to Pay – On the Cost of Living in China (rectified.name) .................................. 52
Thousands of Dead Pigs Found Floating in Shanghai River (chinasmack.com) ...... 54
Pleasure Hacking (mkshft.org) ................................................................................................ 57
A (Very) Brief Recent History of Dead Pigs in Chinese Rivers (theatlantic.com) ... 59
2,800 Dead Pigs in a Shanghai River: How Did This Happen? (theatlantic.com) ... 59
From One Hub, a View of China’s Worldwide Underground Milk Powder Network
(tealeafnation.com) ..................................................................................................................... 60

Newswire
By Kevin Yao
BEIJING | Mon Mar 11, 2013 http://www.reuters.com/article/2013/03/11/us-china-economy-policy-idUSBRE92A11P20130311
(Reuters) - Intense lobbying by central government agencies and debt-laden local governments is keeping
People's Bank of China hawks in check after inflation jumped to a 10-month high, forcing the central bank to keep its monetary policy setting in neutral.
Official data showed China's anemic pace of economic recovery from the slowest year of growth since 1999 may have paled early this year with a cooling in the domestic demand the new government has promised will lead the revival.
Beijing's concerns over growth are leaving the central bank with little choice but to toe the line and help to keep the expansion going, senior sources with knowledge of the situation said.
One area of government pushing hard for growth is the country's powerful planning agency, the National
Development and Reform Commission (NDRC), said one source.
"The NDRC must make sure that the economic growth goal will be achieved," said the source, an NDRC researcher who is involved in drafting policy and who takes part in internal discussions of policies. "We cannot see any room for policy tightening right now."
Data at the weekend showed that industrial output rose 9.9 percent in January and February, less than expected.
Retail sales rose 12.3 percent, the weakest pace for the combined months since 2004. The figures disappointed some who had hoped for a stronger pick up in a recovery that only started in the fourth quarter following seven straight quarters of a slowdown.
At the same time, consumer prices in February rose a stronger-than-expected 3.2 percent from a year earlier, a big jump from January's 2.0 percent pace and pressing towards the government limit for the year of 3.5 percent.
Liu Mingkang, a former PBOC deputy governor and a former bank regulator, said the PBOC's mandate is to deliver the overall economic objectives pursued by the State Council.
The key parameters were outlined by outgoing Premier Wen Jiabao at the opening of the National People's
Congress, or China's annual parliament meeting that is underway in Beijing. Apart from the inflation limit, it includes reaching full-year GDP growth of 7.5 percent and a rise in money supply of 13 percent.
The dilemma for policymakers is that rising prices sap the spending power of the Chinese Beijing wants to drive economic growth. But taking measures to check inflation could snub out the nascent growth they are trying to nurture.
Zhu Baoliang, chief economist at the State Information Centre, a top government think-tank, is clear about what the PBOC can not do at this point.
"There is no need to use policy tools such as raising interest rates, or bank reserve ratios in the near term," he told
Reuters.
TIED HANDS
That would seem to restrict the PBOC to trying to calm inflationary pressure with the liquidity management tools

it has experimented with in China's fledgling money markets, as well as so-called "window guidance" to curb loans by the country's Big Four banks, which dominate credit creation and lend at Beijing's behest.
Window guidance to ward off inflation pressure was clearly in evidence in February lending activity, according to the weekend data, which showed new bank loans fell to 620 billion yuan from 1.07 trillion in January, sharply undershooting market expectations of 750 billion yuan.
Take January and February together though and new loans are being extended at a 10 trillion yuan rate for the year, well above the 8.5-9 trillion yuan that Wang Jun, senior economist at the well-connected China Centre for
International Economic Exchanges (CCIEE), believes the PBOC is tasked with for 2013.
Proportionately, most lending happens in the first quarter as banks put loan quotas to work and slows towards the end of the year as they are used up.
"Controlling inflation will not be the top priority this year. Stabilizing growth is still be more important. The chances of obvious policy tightening are unlikely this year," Wang said.
TIGHT REIN
The central bank has gained more clout under the governorship of Zhou Xiaochuan, who has pursued a program of market-based reforms. But its lack of policy independence means it needs cabinet approval to adjust benchmark interest rates or the value of the yuan.
Its reforms though have allowed it to keep a reasonably tight rein on liquidity in the financial system - and the availability of funds banks have to lend - despite calls from China's provinces for aggressive monetary easing to support growth.
While those supporting economic growth have the upper hand, the policy debate could turn, the sources said.
Approval was given for around $150 billion worth of infrastructure projects last year, which has served to ramp up property prices and fuel a fresh round of housing speculation.
Real estate speculation is a red flag to a government worried that the urban middle class is increasingly being priced out of the property market in cities across the country.
Higher prices are also a sure way to sap the spending power of China's emerging consumer class that Beijing wants to nurture and drive the economy in future.
"The central bank may tighten monetary policy if it sees further rises in inflation," said an influential Chinese economist, who sits on the PBOC's monetary policy committee and requested anonymity given the sensitivity of the topic.
Analysts reckon inflation would have to top 3.5 percent for the central bank to win backing to tighten policy by raising benchmark interest rates or bank reserve requirements.
Still, the member on the PBOC monetary policy committee doubts inflation will rise above that level in the near term.
With nearly 3,000 delegates from across China in Beijing now for the NPC, there is no chance Xi Jinping and Li
Keqiang - set to be confirmed as president and premier by the meeting's March 17 close - can miss the message from the provincial governments.
Huang Daowei, vice head of the southern Chinese region of Guangxi, is very clear on what policy settings must be for him to achieve his goal of closing the gap with richer provinces and who, like other provincial Party officials, will

see his promotion prospects soar if his targets are met.
"We aim to maintain 12 percent economic growth this year, following the average 12.9 percent growth in the past decade," he told Reuters on the NPC's sidelines. "We don't expect policy to be tightened."
(Editing by Nick Edwards and Neil Fullick)
Published: March 11, 2013 http://www.nytimes.com/2013/03/12/business/global/food-costs-threaten-rebound-in-china.html?_r=1&
BEIJING — Diners looking for beef hot pot on a chilly evening in Beijing pay more than their counterparts in Boston, a discrepancy that shows the challenges China faces in reviving growth as inflationary pressures return.
A 6 percent increase in food costs drove a rise in the Chinese consumer price index to 3.2 percent in February, compared with the same period a year earlier, a 10-month high, official data released Saturday showed. The index was 2 percent in January.
On Monday, China’s top economic planning agency, the National Development and Reform Commission, forecast consumer price inflation at about 3 percent for 2013.
Food prices typically rise in advance of the Lunar New Year holiday, which occurred in February this year. But since the holiday ended, meat prices, especially those for beef and lamb, have stayed elevated.
Retail beef prices in Beijing city markets are higher compared with supermarkets in the Boston area. Pork, China’s staple meat, is only about 50 cents per kilogram, or 23 cents a pound, below the U.S. price, a Reuters comparison of standard retail prices show. Those prices represent a direct hit on the spending power of Chinese, whose average income is about a 10th the size of Americans’ salaries.
Contributing to food production costs are the loss of farmland and farm labor to urbanization — Chinese cities are swelling as they absorb hundreds of millions of people.
Grazing restrictions because of land degradation are also causing costs to rise across the country.
“The more the economy develops, the harder it is to raise calves,” said Wang Jimin, who tracks cattle trends for the Chinese Academy of Agricultural Science’s Rural Economic Development Institute. “In the short term, I don’t see meat prices falling unless there are a lot of imports.”
After an international outbreak of mad-cow disease a decade ago, China allows beef imports only from Australia,
New Zealand and Uruguay, so options to tame prices with imports appear limited.
For the near future, high feed costs will also help elevate the price of pork, an increase that is expected to drive broader inflation gains by the third quarter.
“It’s a question of fundamentals, not monthly C.P.I. fluctuations,” said Shi Tao, a livestock analyst at eFeedlink in
Shanghai, referring to the consumer price index.
He said he expected a reduction in the pork supply this year because some pig breeders had decided to drop out of the business after losing money last summer.
Beef production in China has decreased every year since 2008, although it could rise by less than 1 percent this

year, the U.S. Department of Agriculture estimates.
“Cattle take at least a year to raise, not like chickens, which need a few months at most,” said Yang Shaohui, a poultry vendor in Beijing. “Poultry producers can respond to the market much faster.” His chicken was selling for about a third of the price of the beef at a nearby stall.
The pressure on meat prices in China highlights not only the challenge of bringing inflation under control but also the drive to shift the economy toward consumer-led growth, Beijing’s stated goal after decades of export-led expansion.
“Accelerating food prices mean less growth in spending on other goods and services in the economy,” Carl
Weinberg, the China-watching chief economist at the New York consulting firm High Frequency Economics, wrote in a client note.
A large increase in prices could jeopardize Chinese economic growth, which weakened in 2012 to its slowest pace in more than a decade. Growth only started to pick up in the fourth quarter after a seven-quarter slide.
It is a dilemma that China’s incoming leaders, Xi Jinping and Li Keqiang, might have hoped they would not have to face so early in the economic recovery.
“This year, I think, there are three priorities: to stabilize economic growth, which is not too big of a problem,” to stabilize the prices of goods, “where already it looks like there could be some pressure,” and to reduce the risk from hidden debt, like off-book wealth management products, said Zhao Xijun, deputy director of the Finance and
Securities Institute at Renmin University in Beijing.
There are already indications that the Chinese central bank is shifting its policy focus to inflation from growth.
China needs to control inflation as a priority, the central bank said in its fourth-quarter policy report in February, shifting from a pledge in its previous report to support the economy above other needs.
Rising food prices represent a sensitive area for the Chinese Communist Party leadership given that social tension has often accompanied price increases. Food price increases can fuel inflation expectations that lead to a broader rise in inflation and the risk that the central bank will tweak monetary policy to keep a lid on the price pressures.
But policy makers should resist the temptation for pre-emptive action, said Ting Lu, chief China economist at Bank of America Merrill Lynch in Hong Kong.
“Though policy makers should be wary of inflation later this year with an economic growth recovery, it’s too early to call for significant monetary tightening,” he wrote in a note to clients.
By Bruce Einhorn on March 11, 2013 http://www.businessweek.com/articles/2013-03-11/chinas-inflation-fight-starts-to-squeeze-consumers
While Japanese leaders have been making headlines by trying to end years of deflation and achieve an inflation target of 2 percent, their counterparts in China have a different fight on their hands. Far from promoting inflation, the Chinese are fighting to contain it—and the battle may get rougher in the months ahead. Consumer prices in
China rose 3.2 percent last month, up from 2 percent in January. For the first two months of the year (a better measure, since the long Chinese New Year holiday fell in February this year and in January last year), inflation averaged 2.6 percent, half a percentage point higher than the average rate at the end of 2012.
China’s inflation fighters are making their stand at the National People’s Congress, now under way in Beijing. The

NPC, China’s parliament, last week unveiled a new inflation target of 3.5 percent, down from an earlier goal of 4 percent. That “reduces room for pro-growth policies,” Bloomberg economist Michael McDonough wrote on March
8. “A modest economic rebound in China is likely to push inflation higher as the year progresses, potentially threatening the new target.”
The renewed fight against Chinese inflation could hurt growth in an economy that is finally getting back in gear after nearly two years of sluggishness. GDP growth in the world’s second-largest economy shrank for seven quarters in a row until the end of 2012. In the fourth quarter, Chinese GDP grew 7.9 percent and optimists could look to that growth providing momentum into 2013.
A bunch of data released over the past few days provides reason to be concerned about China’s ability to stay on track. Industrial output in the first two months of the year grew 9.9 percent, the government said on Saturday.
That sounds impressive but it is down from 10.3 percent in December and is much lower than what many economists had been expecting: A median estimate of economists surveyed by Bloomberg had industrial output growing at 10.6 percent. Similarly, retail sales grew 12.3 percent but economists had expected 13.8 percent.
We can expect more downbeat numbers in the coming months, according to Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong. As the Chinese government reforms the way it responds to changes in oil prices, end users are likely to face higher energy costs, he says. That’s good news for state-owned oil companies but bad news for consumers. “The new pricing regime will ensure profitability for both PetroChina
(PTR) and Sinopec’s (SNP) refining divisions, while passing on higher energy costs to consumers to encourage them not to waste fuel,” Kwan told Bloomberg News. “Higher fuel costs should slow China’s GDP growth from 7.8 percent last year to the target of 7.5 percent this year.”
Economists at HSBC (HBC) and Standard Chartered Bank aren’t as worried. Yes, the latest set of economic numbers “was a bit soft overall,” Wei Li, Stephen Green, and Lan Shen of Standard Chartered write in a report published today, “but we remain upbeat on China’s recovery.” They say the disappointing data for retail sales reflected new President Xi Jinping’s high-profile campaign against excessive government spending on banquets, gifts, and other goodies. With China’s housing market on the rebound and producers’ confidence on the rise, the
Standard Chartered economists predict GDP growth this year should hit 8.3 percent. In a March 10 report, HSBC economists Qu Hongbin and Sun Junwei say February’s inflation spike will be “temporary,” thanks to falling producer prices. Qu and Sun see consumer price inflation falling below 3 percent in the coming months.
By Sally Bakewell - Mar 11, 2013 http://www.bloomberg.com/news/2013-03-11/china-windpower-teams-up-with-china-development-bank-for-s olar.html
China Windpower Group Ltd. (182), China Development Bank Corp. and China Asset Management Co., Ltd. agreed to invest in solar power as the nation that’s seeking to limit pollution doubled targets for new projects.
They will set up a joint venture to invest in solar projects at home and abroad, China Windpower said today in a statement. The Hong Kong-based company will own 45 percent while units of China Development Bank and China
Asset Management will hold the remaining shares.
China Windpower is boosting its solar business after the country set a target to add 10 gigawatts of new solar projects this year, more than double a previous goal. China is expected to drive annual global solar installations to a record and unseat Germany as the biggest market in 2013 as it seeks to curb coal dependence and social unrest from pollution, according to Bloomberg New Energy Finance.
The accord, signed as a memorandum of understanding, is subject to a formal agreement, according to the filing.

To contact the reporter on this story: Sally Bakewell in London at sbakewell1@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
Print
3/11/2013 http://www.forbes.com/sites/laurahe/2013/03/11/after-censorship-ex-google-china-chief-lee-kai-fu-talks-abo ut-chinas-social-media-revolution/
Lee Kai-fu, who quit his job as head of Google China before the Internet giant pulled out of the country in dispute over censorship, is now the king of China’s equivalent of Twitter. But he was banned from his Weibo accounts temporarily last month. He talked to me recently about what’s going on with social media in China.
“Social media has more power in China than it does in any other country. While the controls are tight, one must realize that social media is revolutionizing the way people communicate with each other and can change China for the better, ” Lee told me.
A prominent figure in the Chinese Internet sector and an avid social media user, Lee has just been dubbed China’s
Most Influential Micro-blogger of 2012 by Sina Weibo (China’s equivalent of Twitter), where he has 32 million followers. However, a February post put him in a predicament. He suggested that taxpayer money was being misspent on Jike.com, a search engine run by the Communist Party’s mouthpiece newspaper People’s Daily and headed by Deng Yaping, the well-known Olympics table tennis champion who has little prior experience of running a web company. The remark was soon deleted, and Lee was banned from posting items on Weibo for three days, which has been considered as a public punishment from the authorities. The incident immediately aroused widespread complaints among Internet users. Thousands of his followers expressed their support and called to lift the ban, including Weibo celebrities like Zhangxin, CEO of SOHO China and FORBES’ World’s Top 100 Power
Women.
It may not be the first time that Lee has received warnings. No stranger to controversy, Lee has stirred up troubles for being outspoken on a number of highly sensitive topics, including China’s restrictive Internet control,
‘Southern Weekly’ newspaper’s strike against the government’s editorial interference, and Taiwan’s presidential politics.
Although he is a known supporter of freedom of expression on social media, Lee is cautious about answering questions on censorship.
“I am not an activist and have no agenda. I am regarded as a moderate but direct micro-blogger, feeding my followers with my thoughts and advice on business, society and technology,” Lee says. “I’m a man who knows his distance.”
The Internet guru didn’t want to comment further on Jike.com and Deng, but reaffirmed his belief in Chinese social media. Although he is partially restrained, Lee defended the robustness of China’s social media landscape, and pointed out how Weibo has led to a revolution in the way people communicate with each other in China.
“Weibo is a very different media than Twitter due to its integration of images, videos, structured dialog and longer tweets. People flock there to find or share information, and to voice or hear opinion. While the controls are tight, one must realize that social media is infinitely more open than other media in China,” Lee said.
One major consequence of this revolution has been that people can now get access to information that was

previously controlled by the party. The Chinese government does its best to exert control over the country’s media, but the growth of Weibo services has seen a new channel emerge in which the state has a far more limited role controlling information.
The Internet also gives them a public forum to speak out.
The Chinese traditional media is regulated by the government, and on many issues there is only one viewpoint.
But most Weibo provides access to alternative viewpoints not expressable in traditional media. This can generate debate and improve critical thinking skills of the netizens. “Microblogging leverages the wisdom of crowds. The good things get forwarded, re-tweeted, and bubble up to the top. ”
Lee is not only well-known for his online popularity. In fact, those familiar with China’s tech industry may feel hard to find one who has had a greater impact on the modern Chinese Internet scene than Lee.
A hero to many techies in China, Lee had held high level positions at U.S. tech giants Google, Microsoft and Apple, and is currently the CEO of Innovation Work, a hybrid start-up incubator, venture capital firm, and software company focused on mobile Internet and e-commerce. He played a key role in building Microsoft’s research lab in Beijing in 1998 and left Microsoft in 2005 to become the founding president of Google China. In 2005, he caused a legal dispute between Google and Microsoft , due to a one-year non-compete agreement that he signed with
Microsoft. After heading Google China for four years, Lee quit his job, four months before Google made a decision to pull out completely of the country.
Lee’s following of 32 million Weibo fans, mainly 20-somethings, mostly male, tech-savvy students in cities across China, is far larger than that of any other business leaders and is matched only by half a dozen entertainment celebrities nationwide.
A constant thread of his weibos is updates and analysis of current events of global high technology, from the latest product offerings, to market trends at home, all mixed up with personal interactions with industry movers and shakers. But his weibos stand out among the pack for lively sharing and honest exchange of views, with good humor and wit, on topics of every possible description.
He wrote in a recent post, “people follow me because of my content (covering parenting, leadership, personal growth, current events, high tech, investing, overseas news), my style (I tell it like it is, and work hard to tell a good story despite limited keystrokes), and my diligence (I tweet every day 10-20 times, except last few days!).”
“My involvement is only a tiny fraction of the overall social media community in China,” Lee said.
What’s the challenge of Weibo in revolutionizing the Chinese media?
Lee said the speed of Weibo allows little time for fact-checking or editorial supervision. Its noisy, open-source discussion also makes it hard for users to distinguish between truth and rumors.
The censorship may also accelerate the spread of rumors, which could be seen as more plausible precisely because they are censored. Chinese web users trying to figure out the most likely truth must speculate not only about the rumors themselves, but also about every move the government makes in response. For Chinese netizens trying to parse out truth from rumors, every story and its government response are a new mystery, and the guessing game never really ends.
Weibo has sometimes also turned into a battlefield of the political or intellectual left and right, where viewpoints of the liberal often prevail in the dispute.
To Lee, this surprising fact may be due to the digital literacy and education level of Chinese netizens. But it may not be a good thing in the long run. ”We need a more balanced online debate between the left and right, especially given the dynamic and balance of power in reality,” Lee said. “Unbalanced debate may bring the

antagonism between the two sides and a policy of suppression.”
“We need multiple points of views, more rational dialogues, and a more open space,” Lee said. He remains optimistic about social media. “Regardless of any setbacks and obstacles, I am confident that China is building up a significant population of socially responsible ‘netizens,’ who will make a difference to the future of China.”
By William Wallis in Nairobi
March 11, 2013 http://www.ft.com/intl/cms/s/0/58b08eb0-8a6c-11e2-9da4-00144feabdc0.html#axzz2NH3A3sjB
Africa must shake off its romantic view of China and accept Beijing is a competitor as much as a partner and capable of the same exploitative practices as the old colonial powers, Nigeria’s central bank governor has warned.
Reflecting the shifting views of a growing number of senior African officials who fear the continent’s anaemic industrial sector is being battered by cheap Chinese imports, Lamido Sanusi cautions that Africa is “opening itself up to a new form of imperialism”.
“China takes from us primary goods and sells us manufactured ones. This was also the essence of colonialism,” he writes in the Financial Times. His remarks are among the most trenchant yet by a serving African official about the continent’s ties with the world’s second largest economy.
Trade between China and Africa was worth more than $200bn in 2012, 20 times what it was in 2000 when Beijing committed to a policy of accelerated engagement. It has been a period of strong growth partly thanks to Asian demand for African resources . But a boom in commodities, services and consumer spending has coincided with the relative decline of African manufacturing from 12.8 per cent to 10.5 per cent of regional GDP, according to UN figures.
African leaders and the African Development Bank have recently urged governments to work with each other to ensure they maximise benefits from relations with their leading trade partner, but they have traditionally cloaked their concerns in emollient diplomatic language.
In contrast Mr Sanusi has thrown down the gauntlet to Beijing. “China is no longer a ‘fellow underdeveloped economy’,” he writes. “China is the second biggest economy in the world, an economic giant capable of the same forms of exploitation as the west. China is a major contributor to the de-industrialisation of Africa and thus African underdevelopment.”
An experienced private sector banker, Mr Sanusi is credited with cleaning up Nigeria’s banking system after a crash that wiped out 60 per cent of bank capital in 2009. He has also given Nigeria’s central bank a more activist role, providing concessional refinancing to banks exposed to manufacturers and small and medium enterprises struggling to service high-interest, short-term loans.
In his article, Mr Sanusi argues that African countries must respond to “predatory” trade practices – such as subsidies and currency manipulation – that give Chinese exports an advantage. He also says the continent must build infrastructure and invest in education so that African businesses can compete for continental trade as
Chinese labour costs rise.
“China is losing that advantage as its economy grows and prosperity spreads,” he writes. “Africa must seize the moment and move manufacturing of goods consumed in Africa out of China to the African continent ... I cannot recommend a divorce. However, a review of the exploitative elements in this marital contract is long overdue.”

His comments come ahead of South Africa’s hosting of a summit of Bric nations later this month. South Africa, the largest economy in sub-Saharan Africa, was incorporated into the bloc of Brazil, Russia, India and China last year.
South African President Jacob Zuma last week warned western companies to shed an old “colonial” mindset when investing in Africa and to stop warning against the embrace of China.
“China is doing business in a particular way and we think we can see the benefits,” he told the Financial Times.
“But we are very, very careful,” he added, citing Africa’s experience of colonialism. Such a relationship he said must “benefit both. And this is what we and China have been agreeing.”
By JOANNE CHIU
March 11, 2013 http://online.wsj.com/article/SB10001424127887324281004578354252676335888.html
HONG KONG—China Cosco Holdings Co. 601919.SH -0.96% plans to sell its logistic unit to its state-controlled parent, China Ocean Shipping (Group) Co., as part of the Chinese shipping giant's efforts to improve its financial results in 2013 and prevent a possible delisting from the Shanghai Stock Exchange.
The country's largest shipping company by fleet size said in a statement Monday that the planned disposal of
Cosco Logistics Co., its wholly owned unit that provides freight-forwarding and warehousing services, would generate "reasonable capital gain" that can help boost its operating results in 2013 and reduce the risk of its yuan-denominated A shares being suspended from trading on the Shanghai Stock Exchange.
The Hong Kong and Shanghai-listed company didn't disclose details of the proposed disposal, saying key terms are still in negotiation.
The planned disposal comes as China Cosco struggles to shore up its finances as it is set to report a large net loss for 2012 in late March, marking the second year of losses in a row and an imminent downgrading of the status of its A shares by the Shanghai Stock Exchange. It posted a net loss of more than 10 billion Chinese yuan ($1.59 billion) in 2011.
Under China's listing rules, the two domestic bourses are entitled to put a company's stock in the so-called
"special treatment" category if the company posts losses for two consecutive years, limiting daily trading movement of shares to 5% from the standard 10%. Three years of losses could result in the suspension of the listing.
Cosco's losses arise from a combination of tough conditions in its core dry-bulk market and its earlier decision to order new ships when prices were high while being locked into expensive charter agreements set during the economic boom in 2008.
Cosco Logistics' registered capital was 3.18 billion yuan in 2011, according to China Cosco's annual report.
Write to Joanne Chiu at joanne.chiu@wsj.com
China’s luxury car market is a prize—but not for local firms
Mar 9th 2013 | SHANGHAI |From the print edition http://www.economist.com/news/business/21573141-chinas-luxury-car-market-prizebut-not-local-firms-still-r

acing-ahead
MAKERS of luxuries are nervous about China. Its economy has cooled. Worse, its new political leaders are threatening to crack down on ostentation and corruption. What should have been a season of festive political “gift giving” has become a nightmare of rectitude for manufacturers of expensive watches, jewellery and the like. Yet firms that sell fancy cars are as ebullient as ever.
China’s market for such cars has grown 36% a year over the past decade. A new report from McKinsey, a consultancy, calculates that China is now the world’s second-largest market for “premium” cars (which include posh brands like BMW and Aston Martin plus the snazziest offerings from mass-market producers like Volkswagen and GM). It estimates that China will surpass America by 2020 to become the world’s biggest consumer (see chart).
Would not a crackdown on official cars hamper this growth? In the past it might have. The market for luxury cars was initially fuelled by demand for chauffeur-driven models for officials (black Audis are preferred). Bill Russo of
Booz & Company, another consultancy, observes that BMW designed a model just for China with a longer wheelbase, to give back-seat passengers more room; it is so successful that it is now being exported.
But even a slowdown in official purchases won’t curb growth much, insists Sha Sha, a co-author of the McKinsey report. Government customers now account for just a tenth of total sales. The surge is due to private demand, including from women and younger drivers. By 2020 China will have 23m affluent households with a disposable income of at least 450,000 yuan ($72,000) a year. Many are in smaller cities ill served by the foreign firms that control this segment.
Could that create an opening for Chinese firms? It seems unlikely. Most local cars are produced by state-owned enterprises (SOEs) working in joint ventures with foreign firms like GM and Volkswagen, while some are from private firms like Geely. Another report, from Sanford C. Bernstein, an investment bank, argues that the “SOEs are lumbering, lack entrepreneurial spirit” and rely on foreign technology, while private competitors are “small, lack technology and sell low-priced cars”.
Despite decades of trying, China today “cannot build a globally competitive car”, the report bluntly concludes.
Chinese drivers do not expect them to succeed soon. Consumers surveyed by McKinsey doubt that Chinese manufacturers will be able to come up with a swooshy car worth buying before 2020.
Online
March 11, 2013 http://blogs.wsj.com/chinarealtime/2013/03/11/step-aside-jack-alibaba-gets-a-new-ceo/?mod=WSJBlog
Who is Alibaba’s new CEO?
Although small of stature, the charismatic founder of Alibaba Group, Jack Ma, leaves big shoes to fill. Stepping into the role as the company’s new and second-ever Chief Executive is Jonathan Lu, a 43-year old company veteran from southern China’s Guangdong province who has experience in all facets of its operations.
Mr. Lu’s previous positions, as the company’s chief data officer and head of Alibaba’s mobile operating system indicate the company will stick to previous initiatives laid out by Mr. Ma. The company has been working to make use of the massive amounts of data it collects on transactions and users, and also to expand beyond its formidable command of the PC Internet commerce sector to attract China’s growing number of smartphone users to its mobile services.

Since joining Alibaba in 2000, Mr. Lu has presided over a number of core parts of the company’s business at key moments, from running one of its key online shopping sites to helping to create its online payment system.
Portrayed by the company as a sort of Mr. Fix It who has several times solved key company problems, his appointment also shows Mr. Ma’s emphasis on smoothly managing the company’s massive and complicated operations.
An article on the company’s official news site emphasized Mr. Lu’s operational abilities and added that he “shuns the spotlight,” contrasting him with Mr. Ma who has long been an outsized figure in China’s Internet scene.
Though Mr. Ma has been stepping back from the day-to-day operations of Alibaba over the past year, many analysts expect him to maintain a strong say over the strategic direction of the company.
Writing in a letter to employees on Monday, Mr. Ma emphasized Mr. Lu’s 13 years of experience at the company, as well as his decisiveness.
From 2008 to early 2011, Mr. Lu led the company’s eBay-like Taobao site that caters largely to small merchants that sell mostly inexpensive, nonbranded goods and novelties. During his tenure sales on the platform grew eightfold, according to Alibaba.
After that, Mr. Lu oversaw the privatization of the company’s previously Hong Kong-listed Alibaba.com, which connects global buyers with Chinese manufacturers. The move was widely seen as a bid by Mr. Ma to gain more control of the company and consolidate all of its operations in a larger listing that will include its more profitable services, like Taobao.
Mr. Lu also founded the sales team for Alibaba.com in Guangdong province, a key operation due to the large number of Chinese manufacturers in the area. He also helped launch and later headed up Alipay, Alibaba’s online payment service which has grown to become China’s largest.
He holds an M.B.A. from China Europe International Business School in Shanghai.
– Paul Mozur. Follow him on Twitter @paulmozur
March 11, 2013 http://blogs.wsj.com/chinarealtime/2013/03/11/a-notable-nod-of-approval-for-chinas-central-bank-chief/?mo
d=WSJBlog
A former colleague and frequent critic of People’s Bank of China governor Zhou Xiaochuan has voiced strong support for him to remain at the helm of the central bank.
Mr. Zhou’s global profile makes him irreplaceable for now as head of the PBOC, Yu Yongding, a former adviser to the central bank, said Monday on the sidelines of the National People’s Congress, China’s rubber-stamp parliament.
The Wall Street Journal reported earlier that China’s leaders are poised to keep Mr. Zhou, 65, in his job for an extended period beyond the usual retirement age, in a bid to ensure continuity in financial-sector policy making.
“The position requires the candidate to have the basic capabilities of a minister, as well as some other specialties,” said Mr. Yu, an academic economist who served on the PBOC’s advisory board from 2004 to 2006. “With China’s increasing internalization, the central bank governor has to maintain a close relationship with his peers, so as to coordinate with other governors around the world on some policies.”

“Besides, the central bank governor has to be quite experienced and must know China well. So to find a candidate
(like Zhou) is not an easy task,” Yu said to reporters.
“There are a lot of excellent officials to succeed Mr. Zhou, but the candidates just need some time and practice to qualify that position,” he said.
On Monday, Mr. Zhou was appointed to a senior post on a political advisory body, a largely symbolic position that nonetheless could help him skirt retirement. Mr. Zhou was elected a Vice Chairman of the Chinese People’s
Political Consultative Conference on Monday, an advisory body that meets alongside the NPC. Senior leaders at the CPPCC and other national political bodies have in past practice faced less stringent requirements to retire at the customary age of 65.
Mr. Yu said the central bank governor position needs continuity, and “if not for that, there won’t be an exception this time for him ,” he said.
He added that Mr. Zhou’s global stature and his long experience, having lead the central bank since 2002, should help win greater independence for the PBOC, which unlike major central banks around the world still needs approval from Beijing’s political masters before making moves like changing interest rates.
The praise for Mr. Zhou is slightly unexpected from Mr. Yu, who has emerged as one of the PBOC’s most prominent domestic critics since his term as an adviser ended.
Aghast at loose monetary policies in the U.S. that he believed would undermine the value of the dollar, Mr. Yu has often warned that the PBOC is putting China’s national wealth at risk by investing its foreign exchange reserves so heavily in U.S. Treasury bonds.
In April of 2011, for instance, Mr. Yu wrote argued in an essay that the market for U.S. Treasury bonds is essentially a giant ponzi scheme supported by Federal Reserve bond purchases. “China should have retreated from the U.S. government bond market a long time ago,” he wrote in the essay.
– Grace Zhu and Aaron Back
March 12, 2013 http://www.chinatechnews.com/2013/03/12/19179-letv-com-foxconn-team-for-exclusive-china-tv-productiondeal
Chinese Internet video website Letv.com announced that it is working with Foxconn in the establishment of a joint venture for the production of super TVs and set-top boxes, which are expected to be formally launched in the third quarter of 2013.
According to Letv.com, the cooperation is exclusive and Foxconn will not implement related terminal cooperation with other Internet companies.
In September 2012, Letv.com announced plans to launch a super TV product in 2013. The company said at that time this new product will be developed and operated by Leshi Zhixin, a subsidiary of Letv.com. The company also revealed that the super TV was undergoing testing improvements and optimization, and will be put into the market in nine months.

At the same time, Letv.com announced the company established a joint venture with Foxconn in which all of
Letv.com's hardware products such as TVs and set-top boxes will be manufactured by Foxconn.
Letv.com's super TV aims to build a full industry chain business system, covering platforms, content, terminals and applications. For platforms, Letv.com will create a cloud video open platform, serving customers in online video, e-commerce, education, portal, and tourism enterprises. For content, the company will establish a TV series and movie copyright base. For terminals, the company already launched an Internet smart set-top box product. For applications, it will build a TV application open platform named Letv store.
For revenue attributed to this new super TV venture, Letv.com will depend on four sources, including hardware, content, applications, and terminal advertising.
March 11, 2013 http://www.chinatechnews.com/2013/03/11/19187-chinas-dangdang-com-shifts-from-online-book-sales-as-n et-losses-increase
Chinese B2C e-commerce website Dangdang.com published its financial report for the fourth quarter and the entire year of 2012, stating that its total operating revenue increased by 31% year-on-year to CNY1.6 billion in the fourth quarter of 2012; while it made net losses of CNY120 million during the same period.
For the entire year of 2012, Dangdang.com's total operating revenue reached CNY5.19 billion, an increase of 44% compared with 2011. At the same time, its net losses were CNY440 million, while the number was CNY230 million in 2011. Dangdang.com said the losses were mainly attributed to expense increases in the performance of contracts, technology, and administration.
For sales statistics, Dangdang.com's general merchandise business realized a total trade value of CNY1.15 billion in the fourth quarter, exceeding the sales of books, which were CNY930 million. This is also the first time that the company's general merchandise sales exceeded its book sales.
At the beginning of 2012, Dangdang.com, which formerly focused on the online sales of books, announced its open platform strategy and introduced third-party vendors to enlarge its general merchandise business, aiming to transform from a books and audio and video products provider to a comprehensive e-commerce operator.
1 MAR 11 2013 http://www.theatlantic.com/china/archive/2013/03/chinas-house-of-cards/273879/
Will a housing bubble upend China's economy? Or is the real problem a lack of housing? Part of an ongoing series of discussions with ChinaFile.
Dorinda Elliott:
At this week's National People's Congress, outgoing Premier Wen Jiabao proclaimed that the government kept housing prices from rising too fast. Really? I wonder what my 28-year-old Shanghainese friend Robert thinks about that. He and his fiancée could never dream of buying an apartment on their own, but his fiancée won't marry him unless he has one. Robert is lucky: his parents are spending their life savings to buy them a tiny apartment. Residential property prices have climbed 50 percent during Wen's last five-year term, according to

statistics bureau data, to the highest level since China privatized home ownership in 1998.
The situation seems dangerously out of balance. In an interview with CBS's 60 Minutes last week, Wang Shi, CEO of Vanke, one of China's biggest property companies, said he thinks there is a property bubble, and that if the bubble bursts, there could be Arab Spring-like protests. When I saw my Shanghainese friend recently, he made the same point. In his experience, he said, young people are frustrated by rampant corruption, and many people can't find good jobs. "If the economy slows down, or housing prices drop," he said, "there could be serious unrest."
The government has to manage a delicate balancing act: on one hand, cool down the market, but on the other hand, avoid stoking public fury if prices sink. Real estate tycoon Wang said that apartment owners protested when he announced price reductions on some of his apartments. Will the government's new 70 percent required down payments on second homes and higher sales taxes help avoid a calamity? The stakes are high: Property investment now accounts for some 14 percent of the country's GDP, so if there is a serious collapse, I'm betting the ripple effects will be felt by Chinese, rich and poor -- and by us in the U.S.
Bill Bishop:
I tend to think talk of a property bubble is simplistic. As I wrote in a DealBook column in The New York Times on
Monday:
I do not mean to completely dismiss some of the dangerous imbalances that have been building in certain property markets across China. But China is not one real estate market, and taking a binary boom-or-bust view about the "China market" is likely a mistake.
The Financial Times examined the diverging markets last week, writing:
"China takes bifurcation to a new extreme. Not only are housing prices in the biggest cities moving in a different direction to those in smaller centers, there is also a glaring discrepancy in the amount of development being undertaken.The country's main metropolises -- Beijing, Shanghai and Shenzhen, which each have populations of more than 10 million -- suffer from chronic shortages of housing for low- to middle-income residents.
By contrast, scores of smaller cities with populations of up to 3 million face an increasingly severe oversupply.
This is why a simple description of China's housing market as a "bubble" misses the point. Does 'bubble' refer to the soaring prices in the biggest cities, where only the wealthy can afford homes? Or does it refer to the row upon row of empty apartment blocks in the smaller cities?"
One of the crucial questions, for which very smart people offer very different answers, is can bubbles burst in certain areas without bringing down the whole economy? Regardless of how that question is answered, we should perhaps give China's leaders some credit for acknowledging potential bubbles and taking steps to rein them in.
What might have been different if American policy makers had recognized and tried to manage the risks of a housing bubble in 2005, 2006 or 2007?
By Anthony Tao March 11, 2013 http://beijingcream.com/2013/03/chinese-business-paper-hoaxed-by-krugman-bankruptcy-satire/
Congratulations go out to The Daily Currant, whose “Paul Krugman Declares Personal Bankruptcy” piece on March
6 has found its way across the world to net one hell of a big, clueless fish.

They’re not the only one to fall for it, but Guangzhou-based 21st Century Business Herald, one of the country’s top business publications, should have known better. We just hope, for its sake, that the reporters and editors involved at least cited their source so they can claim ignorance.
As brought to us by SCMP’s Ernest Kao:
The Herald’s article has also been removed, but SCMP.com was able to salvage a post on the newspaper’s official
Weibo account:
[Krugman’s] own deficit reached more than US$7 million from Manhattan apartment mortgages, credit card debts and jewellery from Tiffany. His biggest investment failure was the acquisition of real estate in 2007, which saw its value drop 40 per cent. Krugman’s lawyer said although he is going through a debt crisis, he still supports
Keynesian policies.
In the Chinese paper’s defense, The Daily Currant looks nothing like The Onion, and Kim Jong-un wasn’t even involved.
Also, quite a few English-language readers got hoaxed, too. This is as good a time as any to show you The Daily
Currant’s mission, as clearly laid out in its about page:
The Daily Currant is an English language online satirical newspaper that covers global politics, business, technology, entertainment, science, health and media. It is accessible from over 190 countries worldwide – now including South Sudan.
Our mission is to ridicule the timid ignorance which obstructs our progress, and promote intelligence – which presses forward.
Also see: Outrage Mounts Over Girls Gone Wild North Korea Video. Who’ll bite first, do you reckon, a Chinese or
Korean editor?
Another Chinese news outlet falls victim to satire, fooled on fake Krugman report (SCMP)
By Lamido Sanusi
March 11, 2013 http://www.ft.com/intl/cms/s/0/562692b0-898c-11e2-ad3f-00144feabdc0.html#axzz2NH3A3sjB
Relationship carries with it a whiff of colonialism, writes Lamido Sanusi
It is time for Africans to wake up to the realities of their romance with China.
Nigeria, a country with a large domestic market of more than 160m people, spends huge resources importing consumer goods from China that should be produced locally. We buy textiles, fabric, leather goods, tomato paste, starch, furniture, electronics, building materials and plastic goods. I could go on.
The Chinese, on the other hand, buy Nigeria’s crude oil. In much of Africa, they have set up huge mining operations. They have also built infrastructure. But, with exceptions, they have done so using equipment and labour imported from home, without transferring skills to local communities.
So China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism. The

British went to Africa and India to secure raw materials and markets. Africa is now willingly opening itself up to a new form of imperialism.
The days of the Non-Aligned Movement that united us after colonialism are gone. China is no longer a fellow under-developed economy – it is the world’s second- biggest, capable of the same forms of exploitation as the west. It is a significant contributor to Africa’s deindustrialisation and underdevelopment.
My father was Nigeria’s ambassador to Beijing in the early 1970s. He adored Chairman Mao Zedong’s China, which for him was one in which the black African – seen everywhere else at the time as inferior – was worthy of respect.
His experience was not unique. A romantic view of China is quite common among African imaginations – including mine. Before his sojourn in Beijing, he was the typical Europhile, committed to a vision of African “progress” defined by replicating western ways of doing things. Afterwards, when he became permanent secretary in the external affairs ministry, the influence of China’s anti-colonial stance was written all over the foreign policy he crafted, backing liberation movements in Portuguese colonies and challenging South Africa’s apartheid regime.
This African love of China is founded on a vision of the country as a saviour, a partner, a model. But working as governor of Nigeria’s central bank has given me pause for thought. We cannot blame the Chinese, or any other foreign power, for our country’s problems. We must blame ourselves for our fuel subsidy scams, for oil theft in the
Niger Delta, for our neglect of agriculture and education, and for our limitless tolerance of incompetence. That said, it is a critical precondition for development in Nigeria and the rest of Africa that we remove the rose-tinted glasses through which we view China.
Three decades ago, China had a significant advantage over Africa in its cheap labour costs. It is losing that advantage as its economy grows and prosperity spreads. Africa must seize the moment. We must encourage a shift from consuming Chinese-made goods to making and consuming our own. We must add value to our own agricultural products. Nigeria and other oil producers need to refine crude; build petrochemical industries and use gas reserves – at present often squandered in flaring at oil wells – for power generation and gas-based industries such as fertiliser production.
For Africa to realise its economic potential, we need to build first-class infrastructure. This should service an afro-centric vision of economic policies. African nations will not develop by selling commodities to Europe,
America and China. We may not be able to compete immediately in selling manufactured goods to Europe. But in the short term, with the right infrastructure, we have a huge domestic market. Here, we must see China for what it is: a competitor.
We must not only produce locally goods in which we can build comparative advantage, but also actively fight off
Chinese imports promoted by predatory policies. Finally, while African labour may be cheaper than China’s, productivity remains very low. Investment in technical and vocational education is critical.
Africa must recognise that China – like the US, Russia, Britain, Brazil and the rest – is in Africa not for African interests but its own. The romance must be replaced by hard-nosed economic thinking. Engagement must be on terms that allow the Chinese to make money while developing the continent, such as incentives to set up manufacturing on African soil and policies to ensure employment of Africans.
Being my father’s son, I cannot recommend a divorce. However, a review of the exploitative elements in this marital contract is long overdue. Every romance begins with partners blind to each other’s flaws before the scales fall away and we see the partner, warts and all. We may remain together – but at least there are no illusions.
The writer has been governor of the Central Bank of Nigeria since 2009. The views expressed in this article are his own

Mar 11, 2013 by Rahul Jacob http://blogs.ft.com/beyond-brics/2013/03/11/china-riding-the-hog-cycle/#axzz2NH3FZWPL
Could rising food prices come back to haunt China’s leaders once more? A sharp increase in inflation, revealed in economic data published at the weekend, was driven largely by a jump in the food index.
Consumer prices rose 3.2 per cent in February, compared with 2 per cent in January, with food prices rising 6.0 per cent, up from 2.9 per cent in January. And, if Stephen Green of Standard Chartered Bank is right, there could be worse to come.
The non-food index was up as well but by only about 2 per cent. The big contributors to inflation were meat
(excluding pork) followed by grains and eggs.
Green predicts food inflation rising further in 2013. As he notes, “pork – the biggest driver of inflation over the past decade—has not even begun to add to overall inflation yet.” Indeed pork prices actually fell by 1 per cent in
February. This effect, he says, “will reverse in March even if pork prices stay flat” because the comparisons will be with the period between March and August 2012 when pork prices fell sharply by 16 per cent cumulatively.
In few places in the world does the hog cycle matter so much to inflation as it does in China because pork is so widely eaten in the country. Pork supply growth will turn negative this year, adding to pressure on inflation.
Standard Chartered is estimating that pork prices will rise 16 per cent in 2013. “Given that pork has a 2.9 per cent weighting in the CPI basket, this would add 0.45 per cent to headline inflation this year.”
So far, so moderately alarming, but could it get worse? Coinciding with the inflation figures news emerged that more than 2000 dead pigs had been found in the Huangpu river in Shanghai. The city’s agriculture department has determined that the pigs died of porcine circovirus. Shanghai city authorities have been testing the water quality of the river hourly and have found it to be safe.
What the news of a pig epidemic in neighbouring Zhejiang province means for China’s battle with inflation this year is rather more unpredictable.
Mar 11, 2013 by Stefan Wagstyl http://blogs.ft.com/beyond-brics/2013/03/11/china-investment-still-comes-first/#axzz2NH3FZWPL
China’s economy has started 2013 with an unexpected slowdown in manufacturing growth and a surprise surge in inflation, according to data published over the weekend.
But the real news in the numbers is the persistent strength of credit-fuelled investment. Despite all the effort put into rebalancing the economy in favour of domestic consumption, it’s still the investment engine that’s driving the economy.
Here are the key figures:
Industrial output, the best indicator of GDP growth, up 9.9 per cent in January-February, compared to forecasts of around 10.5 per cent and 10.3 per cent in December. (The figures for the first two months are put together to try to even out the impact of the Chinese New Year holiday).

Fixed-asset investment up 21.2 per cent in the first two months of 2013, slightly above forecasts. But while manufacturing investment rose 17 per cent, infrastructure investment, where the role of state-backed finance is particularly powerful, increased 23 per cent. Property sales were up 50 per cent.
Meanwhile, retail sales growth flagged a bit, falling from 15.2 per cent in December to 12.3 per cent in
January-February.
Inflation spike at 3.2 per cent in February, up from 2.0 per cent in January and 2.5 per cent in December. But with food prices jumping because of the holiday this may be a blip.
However, no blips in credit growth which was very strong despite a slight drop from 15.9 per cent in January to
15.2 per cent. Total social finance, the central bank’s favourite measure, has clearly started the year with a surge:
(See Chart)
Source: EcoWin and Danske Bank Markets
So what’s the overall picture? Credit Suisse sums things up pretty well:
This set of macro-data showed that fixed asset investments continued to be the key driving factor; this is consistent with our view of a narrow-based recovery. So far, there is no evidence that the growth momentum that has been primarily driven by local government investment projects has spilled over to other sectors. Industrial production growth has soften again, this is in-line with our expectation, and without a broader-based improvement of activities, a strong rebound of growth momentum will likely still be missing.
Unicredit is similarly cautious:
The recent data from the second-largest world economy paint a picture of an overall modest, uneven and still fragile economic recovery that may even peak over the next few months. …State-mandated strong FAI (fixed asset investment) as well as upbeat trade figures (although they seem inflated when confronted with the disappointing production picture and moderate global recovery) imply that exports as well as investment activity are still the key drivers of the Chinese recovery.
For further views on the data take a look at this detailed note by Kate Mackenzie on Alphaville.
But you don’t need to take the bankers’ word for all this. No less a personage than premier Wen Jiabao last week told the People’s National Congress meeting in Beijing that “the role of investments can’t be underestimated”.
Mar 11, 2013 by Steven Millward http://www.techinasia.com/15-entrepreneurs-under-30-doing-startups-in-china/
Forbes just put up a list of 30 young disruptors in China working across all kinds of fields. But its list gives no information about any of the entrepreneurs’ ventures – and all its links are broken – so it’s done rather badly.
So we decided to pick out the individuals who’ve specifically created web startups, check out their sites and services, and see what these youngsters are working on. The end result is 15 web entrepreneurs under 30 in
China that we should look out for this year.
It’s noticeable that quite a few of them are working on globally-minded businesses. Here are the 15 people and

their startups, some of which will be familiar to regular readers:
Zhang Lianglun
Age: 26
CEO, Mizhe
As we noted earlier this year, Mizhe is a unique site, a sort of online shopping guide that offers discounts for shoppers on top Chinese e-commerce sites. It raised about US$1.6 million from IDG Capital at the start of this year.
Shi Kaiwen
Age: 23
Founder, Jing.fm
Jing.fm is perhaps China’s coolest music streaming startup and something that I use often for background music when writing. It’s a bit like Grooveshark, really.
But with Chinese consumers being so unwilling to pay up for web-based content like music – or anything digital
– Jing.fm will need to find a revenue stream to keep the music flowing.
Huang Kai
Age: 27
Chief designer, Yoka Games
If there’s any group of online consumers in China that are actually willing to pay up, it’s MMO gamers. And that’s the target audience for the Yoka Games online store, selling real-world gaming merchandise to fans of virtual adventures.
Ji Yichao
Age: 20
Founder, Peak Labs
Backed by Sequoia/Zhenfund money, Peak labs is the creation of US-China educated Ji Yichao and it makes some pretty impressive apps for iOS. Chief among these is Mammoth Browser for iOS which hit the headlines in 2011 because Ji developed the eye-candy browser while still in high school. In our interview with him, Ji told us that he made the app because he felt that multi-tab browsing on mobile was a nightmare, which was certainly true at the time.
Chen Ou
Age: 29
Founder, Jumei
China’s daily deals industry is a tough business to be in where the top players pull in over $30 million per day in revenue, and everyone else is left fighting for scraps. That’s unless you’re a highly specialized site that ignores all those cheap restaurant deals – which is exactly what Jumei does. Instead, it focuses on deals for well-known brands of make-up and skincare items at very persuasive prices.
Lin Zuoyi
Age: 27
Founder, Alishunlin Furniture
This is an online furniture store that sells only its own-brand creations, with an emphasis, as the “mu” in its name suggests, on wooden items.

Liu Chengcheng
Age: 24
Founder and CEO, 36Kr
This tech and startup blog is a nice breath of fresh air in China’s regurgitation machine of a media landscape.
Ignoring the usual copy-paste malarkey among web portals, it positions itself as a sort of Chinese-language
TechCrunch with a mix of local and global tech news thrown in. We like it.
Luo Yi
Age: 29
Founder and president, Beely
As with the furniture business mentioned above, Beely makes its own-brand items – this time for skincare products. It’s a very tough area in which to build up trust, especially as stores and other online outlets are filled with skincare items that might’ve been mixed by a farmer with a random assortment of chemicals in a barrel. It’s difficult to see how this can work for Beely without some very specific angle – like using only organic raw materials or something.
Rick Olson
Age: 29
Founder and CEO, Yun.io
Laowai! Yes, there’s even a foreigner on the list in the form of the guy behind the cloud backups startup that we reviewed back in 2011. Since then, Yun.io has doubled its free storage to 10GB, but is now also up against major competition, such as Baidu’s fairly recent Dropbox clone.
Pan Hao
Age: 29
Founder and director, Seeed Studio
Taking on the might of Alibaba’s B2B platform for sourcing goods from China, Seed Studio focuses on one very niche area – the bits and pieces needed by electricians, engineers, and hardware hackers. All its products come from various Chinese manufacturers and are snapped up at wholesale prices by overseas buyers.
Wang Bin
Age: 28
Founder, Alterniva China
Alterniva is another one on this list that looks to overseas clients. It makes Flash-based physics engines for games, with an emphasis on enabling quality 3D gaming in the browser.
Wang Wenji
Age: 27
Founder and CEO, RabbiBox
No, this startup doesn’t bring a rabbi to your door – imagine what a mecheieh that would be – and instead delivers a boxful of childens’ toys. Following the subcom business model, monthly gift subscriptions are available for about
$30 per month.
Yang Senmiao
Age: 27
Founder and CEO, BlingStorm
Casual games are usually a good cash-cow, and that’s the area being tackled by its iPhone and iPad games, which

are free but monetize by in-app payments.
Zhang Xuhao
Age: 27
Founder and CEO, Ele.me
Ele.me – which means “Are you hungry?” in Chinese – is like Rocket Internet’s Foodpanda in that it coordinates with restaurants to let people order food online for takeout delivery. It’s currently running in seven Chinese cities with an initial focus on affordable food items.
Zhang Yichi
Age: 29
CEO, Greedy Intelligence’s 1checker
The most unusual app on the list is 1checker, which performs online proofreading to ensure that your copy would pass muster with the most stringent of grammar and spelling nazis. Aimed at English-speaking markets, it has apps for Windows and is free so long as you register with the site.
Can you recommend any other young entrepreneurs active in China that we should check out? Hit the comments with your ideas.
Mar 11, 2013 by Steven Millward http://www.techinasia.com/alibaba-new-ceo-jonathan-lu/
Jack Ma, the founder of China’s top e-commerce company, announced a couple of months ago that he’d step down from his role as Alibaba Group CEO. This afternoon, Alibaba has named Ma’s successor, ‘Jonathan’ Lu Zhaoxi, who’ll take over the top job on May 10 It’s a date that marks the 10th anniversary of the founding of Taobao, the company’s iconic amateur shopkeeper marketplace.
Ma had indicated that he was vacating the Alibaba hotseat as he was “no longer young enough” for such a role in the internet business. He’s 48. The new kid on the block, Jonathan Lu, is 43. Lu joined Alibaba in 2000. [UPDATED:
We're going to nickname him JLu].
Alibaba’s official blog notes that Lu “has led three of its major divisions and steered Taobao, the group’s market-dominant online shopping platform, during a period of high growth.”
Ma remains as Alibaba chairman, and might well take up the burden of steering the company towards a massive
IPO this year which could value the firm at well over $40 billion. In an internal email today, Ma wrote:
Jonathan and I have worked together for 13 years. During that time, he founded the Alibaba.com Guangdong sales team; was the founding president of Alipay; served as president of Big Taobao; stepped in as CEO of the then-listed Alibaba.com. He is currently the Group’s chief data officer and president of Aliyun Mobile OS.
He is passionate about and familiar with the Group’s various businesses. Not only has he contributed to building our culture and organization and developed many talented people, he also possesses a unique leadership style and charisma.
In a statement, new CEO Lu told staffers:

We live in an era of rapid change where pressures and challenges coexist, but we must not forget our purpose and keep in mind the premise of ‘Customer First.’ We must continue to … adhere to the principles of openness and transparency as we share Alibaba Group’s resources with the entire society.
Mar 11, 2013 by Steven Millward http://www.techinasia.com/samsung-sold-30-million-phones-in-china-2012/
These days on the subway in Shanghai, I seem to see more people stretching their palms around a massive
Samsung Galaxy Note 2 or a Galaxy SIII than clutching iPhones. So I’m not too surprised to learn that Samsung
(005930:KS) has maintained its domination in China, selling – according to a new report from Strategy Analytics
– 30.06 million smartphones in China last year. That’s three-times higher than it managed (10.90 million units) back in 2011.
The report adds – in Yonhap, via TheNextWeb – that Samsung’s market share in China is now up to 17.7 percent, a rise of 5.3 percentage points from the previous year. That’s in a smartphone landscape where about 210 million were sold in 2012.
Strategy Analytics has only bad news for Nokia (HEL:NOK1V; NYSE:NOK), where its aging Symbian phones and fledgling Windows Phone devices resulted in another huge net loss in users. Nokia is now said to be China’s seventh-largest phone-maker with just 3.7 percent market share (calamitously down from 29.9 percent in 2011).
In the same data, Lenovo is second with 13.2 percent share, a rise of four percentage points. Apple is third (11 percent), then Huawei, and the very uncool Coolpad is in fifth spot.
We’d point out that new rivals emerge all the time. The young phone-maker Xiaomi sold 7.1 million smartphones in 2012 and plans to sell 15 million this year. That could take a sizeable chunk from Samsung.
As we noted last month, Lenovo is gunning to outsell Samsung in China, its home nation, this year. Could this be the end of the Samsung’s Galaxy series’ reign in China?
(Source: Yonhap; via TheNextWeb)
Mar 11, 2013 by Steven Millward http://www.techinasia.com/xiaomi-will-sell-15-million-smartphones-2013/
We know that the rookie phone-maker Xiaomi sold 7.19 million smartphones in 2012, so how about 2013?
According to founder Lei Jun, Xiaomi will mark its second-ever full year in the phone biz by more than doubling that number to 15 million.
Xiaomi investor Hans Tung – a partner at Qiming Venture Partners, who put funds into the fledgling phone-maker in 2011 – also revealed last week that Xiaomi is working on a 10 percent profit margin. Indeed, the startup company is always aggressive on hardware pricing, and its flagship Android-powered Xiaomi Mi2 sells for just RMB
1,999 (US$318).

The investor’s comment suggests that Xiaomi’s claimed 2012 sales revenues of 12.6 billion RMB ($2 billion) equated to nearly $200 million in net profit for the whole of last year.
Xiaomi’s sales this year will be heading outside of mainland China for the first time, necessitating a greater production volume. Next month, Xiaomi will launch official online sales channels for Android fans in Hong Kong and Taiwan.
(Source: Sohu IT (article in Chinese), via Marbridge Daily)
Mar 11, 2013 by C. Custer http://www.techinasia.com/tencent-leader-gaming-innovation/
When Fast Company published its list of the most innovative companies in gaming, it ruffled a lot of feathers.
One-hit-wonders Rovio (the developers of Angry Birds) topping the list seemed weird enough, but the number two spot was given over to a company many Chinese gamers don’t associate with innovation: Tencent. Here’s Fast
Company‘s reasoning for giving Tencent such a primo slot:
For leveraging its online distribution network and moving into content. China’s largest online company (its QQ gaming platform boasts 200 million registered users), Tencent is the natural go-to for deploying massively multiplayer games in the Far East. Take-Two Interactive partnered with Tencent for NBA 2K Online, which launched last fall. Earlier this year, a long-term partnership between Activision and Tencent came to fruition with the arrival of the free-to-play MMO Call of Duty Online in China.
Now, even a die-hard Tencent fan might question why releasing China remakes of years-old franchises really qualifies as innovative, and China’s gaming community has been debating Tencent’s innovative tendencies — or lack thereof — ever since. The debate is the subject of Netease Games’ latest Dispute feature, which means that before we go any further I have to remind you: Netease competes with Tencent in the gaming space, so the
Netease games editorial staff isn’t really coming from a position of neutrality here. But many gamers really do see
Tencent as a copycat; when I searched for relevant posts on Weibo one of the first ones I found was about Tencent copying animation and sounds from the Japanese anime show Naruto for a QQ game.
In Dispute’s usual dueling essays format, Chinese gaming journalist Chang Kong defended Tencent as being innovative, saying that the company really did deserve the title for having brought together 300 million gamers.
Chang’s opponent, an anonymous marketing strategist in the games industry, disagreed, arguing that most of
Tencent’s own games were highly derivative, and pointing out that its most successful games were virtually all developed by other companies with Tencent merely serving as the publisher.
Gamers were also split on the subject. “[Tencent] has no integrity,” wrote one, and another observed, “When
Tencent talks about innovation, all of China starts laughing.” But another commenter suggested that the negative perceptions about Tencent were the result of years of media smear campaigns.
Here at Tech in Asia, we have certainly seen Tencent play host to some egregious copies, but to the company’s credit, it does seem to take the worst of them down when it discovers them. For example, when we contacted
Tencent last fall about a blantant copy of the indie game Cloudstone that it was hosting, the company quietly removed the game a week later.
That Tencent is wildly successful isn’t really up for discussion. But is the company an innovator, especially in gaming? Personally, I’m not convinced, and neither are many Chinese gamers. But let us know your thoughts in

the comments!
For our coverage of previous Dispute features, click here.
March 12, 2013 | By Editorial Staff http://www.chinasourcingnews.com/2013/03/12/084720-north-china-environmental-protection-work-may-ha mper-orient-paper/
Orient Paper Inc. is preparing for its upcoming comprehensive environmental protection inspection, which is part of a large-scale special pollution inspection conducted by the local authorities in China.
Liu Zhenyong, chairman and chief executive officer of Orient Paper, commented, "We will fully cooperate with the government's inspection and are confident that we will be able to comply with all their rigorous tests. While we are excited about the ongoing tissue paper and production line renovation projects which will bring further growth to our business, we remain firmly committed to environmental protection and will place a top priority in undertaking all necessary procedures and systems to ensure a sustainable business for Orient Paper."
The Xushui County government, in response to a series of environmental pollution incidents and public health crises in North China in recent months, will be handling the inspections. An executive order was issued by the county government on February 26, 2013, to all manufacturers in a wide range of industries which operations have potential environmental impact. Regarding this inspection, the multi-government agency inspection will examine all aspects of environmental protection practice, especially waste water discharge.
According to the executive order, the special inspection will last from February 26 to March 31, 2013, with on-site field examinations scheduled for March 1 through March 10. During the inspection period, Orient Paper says its water treatment facilities and production activities may be interrupted.
by JAMES HOPKINS on 03/11/2013 http://techrice.com/2013/03/11/four-more-china-tech-trends-to-watch-in-the-year-of-the-snake/
The Staggering Rate of Smartphone Adoption
In a LinkedIn post from November of 2012, former Director of Google China and head of Beijing-based venture firm Innnovation Works Kai Fu Lee predicted that the installed base of smartphones in China would double to 500 million by the end of 2013 (note that Mobithinking estimates China had 212 million 3G users as of last October).
The heady growth numbers of Weixin, Tencent’s mobile social chat app and TechRice’s 2012 pick for China Tech
Story of the Year, reflect this increasingly rapid rate of smartphone adoption in China. While Weixin will continue to reap the benefits as the likely default social/chat application for all Chinese, there will be room for others at the table.
Previously, I dove into the global expansion efforts of Huawei and ZTE in smartphones, but within China it’s
Lenovo (second) and, perhaps surprisingly, the economical CoolPad (third) who have won the most market behind top-ranked Samsung. ZTE and Huawei follow at fourth and fifth, respectively.
(See Chart)

More E-commerce, More Online Payments Faster
Beyond the growth of these brands, the question becomes: what other trends will follow the staggering growth of
China’s smartphone base? As TechRice cofounder Kai Lukoff argues, globally it may mean that Chinese smartphones become the default choice for the developing world and reduce Nokia’s feature phone dominance to irrelevance. Domestically, I think it will have a profound effect on e-commerce and payments, though I am biased as an employee of the Alibaba Group, which stands to benefit.
Regardless of how much the Chinese profess their love of renao ( 热闹 ), or the liveliness associated with their market places, I think the ease of use, speed and elimination of information asymmetries and transaction costs the internet provides will see a lot of China’s new smartphone users embrace mobile e-commerce. While the culture of haggling over prices with vendors may have initially transferred to online marketplaces, shoppers in
China are now more comfortable with the executing transactions quickly with a couple of clicks and password input. Take this new China e-commerce infographic from Alizila as evidence: in 2012, 60% of Chinese online shoppers have income of less than US $320 a month and 12% of total purchases were made from mobile phones.
Parallel to this emerging use of e-commerce platforms from smartphones will be the growth of mobile payments, such as those enabled by the new Alipay mobile wallet App. Alipay recently announced that its total mobile transaction volume surged by 546% in 2012 compared to the previous year, and that the number of mobile Alipay users increased by 223% . The decline of what can sometimes be a dangerous dependency on paper money (a dependency made more impractical by the size of China’s largest note, about US $16) could also further unlock
Chinese consumption.
While Alipay’s mobile success suggests similar success for the mobile arms of Alibaba’s Tmall (B2C) and Taobao
(C2C) platforms, growth will also come from the payment tool’s role in online-to-offline consumption. In this regard, Alipay is working with mobile application maker Appconomy’s Jinjin, which provides brands (Burger King,
Pepper Lunch, etc.) with a location-based tool to reward loyalty, offer customized discounts, accept cashless payments and otherwise entice consumers. Smartphones will increasingly hold the keys to consumption—whether this consumption occurs completely online or at a physical point of distribution.
Empowering Chinese beyond the Big(gest) Cities
Alipay says that over 4.3 million people are already spending more on mobile than they are on PCs. The cities with the highest ratios of mobile payments to PC payments are predominantly western, including Lhasa in Tibet and
Nanchong in Sichuan. Smartphone and mobile payments adoption will continue to display how e-commerce can unlock opportunities for people in poorer, rural provinces and allow them to tap the country’s growing consumer markets.
The Threat of Tencent
The numbers sound good, but Alipay will need to be wary of Tencent as the Shenzhen-based powerhouse looks to monetize weixin by connecting its payment tool Tenpay to the popular chat app. While others have argued 2013 will be defined by Sina and Tencent’s battle in social, an increasingly important plotline will be the pressure
Tencent exerts on Alibaba in the mobile e-commerce space. Tmall’s B2C rivals 360Buy, Amazon and DangDang could also absorb emerging mobile market share should they deliver superior user experience for new online shoppers.
Newswire

By AP / Gillian Wong
March 11, 2013 http://world.time.com/2013/03/11/china-appoints-head-of-top-political-advisory-body/
(BEIJING) — China has taken another step toward completing its leadership handover with the appointment of an official best known for his communist pedigree to head a top government advisory body.
Yu Zhengsheng was selected Monday to head the Chinese People’s Political Consultative Conference, a companion body to the country’s rubberstamp legislature. There was no other candidate.
Yu’s selection is the latest step in China’s once-a-decade political transition and kicks off several days of formal government leadership changes that were foreshadowed by promotions at the Communist Party’s congress in
November. In China, the party is the pre-eminent political power and top government posts are held by its leaders.
Yu was among seven leaders who ascended to the party’s top inner circle at the November conclave. Yu is ranked fourth in the party.
By AP / Louise Watt
March 11, 2013 http://world.time.com/2013/03/11/chinas-leaders-take-aim-at-railways-ministry/
(BEIJING) — In the annals of Chinese bureaucratic power, the Railways Ministry stood apart. Running everything from one of the world’s busiest rail systems to a special police force, the ministry was so pervasive and powerful it resisted government reform efforts for years. Chinese called it “Boss Railway.”
On Sunday, the government gave notice it was firing the boss.
Under a plan presented to the national legislature to restructure Cabinet departments, the government said it would dismantle the ministry, moving its railways operations into a newly created company and placing its regulatory offices in the Transport Ministry.
The Railways Ministry isn’t the only target. Under the restructuring plan, two agencies that censor broadcasters and print media will be combined into a super media regulator; the commission that enforces the much disliked rules that limit many families to one child will be merged with the Health Ministry; and four agencies that police fisheries and other maritime resources are being united into one to better assert China‘s control over disputed waters, potentially sharpening conflicts with Japan, Vietnam and the Philippines.
Certain to be passed by the rubber-stamp legislature this week, the plan reflects the priorities of the newly installed Communist Party leadership as it seeks to reduce waste, boost efficiency and address quality of life issues for a more prosperous, demanding society.
The scope and power of the Railways Ministry made it a natural place for the leadership to stamp its determination.
As it expanded the railway system and built the world’s largest high-speed rail network, the ministry ran up hundreds of billions of dollars in debt and sank into corruption, giving critics an opportunity to pounce.
Reformers crowed at the ministry’s abolition, saying it would further market reforms. “It means the country has removed the last ‘stronghold’ in the way of reforming the industry from a planned economy to market economy,” the official Xinhua News Agency quoted Wang Yiming, a government macro-economic researcher, as saying.

Even the current — and seemingly last — railway minister had to bow to the inevitable.
“I’ve no regrets. Whether I’m minister of railways or not is no matter,” Sheng Guangzu said on China National
Radio. “The key is to develop China’s railways. I’m subordinate to the needs of the national cause.”
Reform-minded Chinese leaders and officials had been trying to bring the railways to heel for 15 years when the government first started separating state companies from regulatory bodies. At each turn, the ministry resisted, using long-standing ties to the military and building a record for performance. Over the past decade, it created the showcase high-speed rail system touted by the leadership as a symbol for Chinese technological power on par with the manned space program.
In announcing the restructuring, a senior Chinese official praised the progress but explained why the ministry must be abolished.
“In recent years, the railways have developed in leaps and bounds and safeguarded the smooth running of the economy and the needs of people’s lives and production. But its government and enterprises are not separated.
It doesn’t link smoothly with other modes of transport, and there are other problems,” Ma Kai, secretary-general of the State Council, the Cabinet, told the legislators.
Complaints about the railways are common among Chinese. It’s the most popular form of long-distance transport, especially for Chinese who cannot afford to fly. But buying tickets is difficult, and food, drink and other services on trains are poor — problems often attributed to corruption.
“Corruption? Of course there is in the railway bureau. There’s that Boss Railway!” Chang Shangxi, a 32-year-old businessman, said as he waited for a high-speed train in Shanghai this past week. “I am sure corruption causes corners to be cut and work to be faked as the companies have to make the money back that they spent on corruption.”
The ministry’s ability to throw money around to get things done and preserve its power in the end helped bring it down. Liu Zhijun, the bullet train network’s top booster, was ousted as minister two years ago, amid accusations that he took massive bribes and steered contracts, some of them associated with the high-speed rail network.
Among his rumored misdeeds: having 18 mistresses.
Though he awaits trial, his fate — and perhaps the ministry’s — seemed sealed when bullet trains collided near the eastern city of Wenzhou in July 2011, killing 40 people and injuring 177. The accident outraged the country’s growing middle class — the prime users of the high-speed rail. Taking to social media sites, they questioned whether speedy development resulted in shoddy work. A government investigation cited design flaws and mismanagement.
In the aftermath, the government began taking a harder look at corruption throughout the railways and the ministry. In one case, almost all of a $260 million railway line in the northeast had to be redone because unqualified sub-contractors filled bridge foundations with rocks and sand instead of concrete.
The ministry employs 2.1 million staff and handled 1.8 billion passengers in 2011. Its subsidiary departments oversee all railway operations, and its companies are involved with everything from design of railways to construction and freight transport. Beyond that, there’s the Railway Art Troupe, which sings, dances and puts on acrobatic shows and operas. The China Locomotive Sports Team trains athletes in soccer, boxing, weightlifting, swimming, and track and field.
Until last August, it operated its own courts, as it did a police force until 2009. Capital spending last year was 630 billion yuan ($100 billion) — rivaling the entire 670 billion yuan ($105 billion) military budget — and its mounting debts have worried the government.

“Who is going to pay the debt that is expected to amount to nearly 3 trillion yuan?” said Zhao Jian, a railway expert at Beijing Jiaotong University. He said the official debt figure is 2.6 trillion yuan ($414 billion), but he estimates it will go higher as ongoing projects are completed.
The reorganization is supposed to add further restraint. A newly created China Railway Corporation will build and manage freight and passenger services, while a railways administration under the Transport Ministry will set technical standards and enforce them.
The railway so far has been able to rely for a large part on drawing revenues from freight and passenger services.
A big challenge ahead is keeping that money coming in as competition from planes, cars and river transport increases.
___
Associated Press researchers Yu Bing in Beijing and Fu Ting in Shanghai contributed to this report.
By Benjamin Kang Lim and John Ruwitch
BEIJING | Mon Mar 11, 2013 http://www.reuters.com/article/2013/03/11/us-china-parliament-li-idUSBRE92A11820130311
(Reuters) - A reformist member of China's decision-making Politburo, Li Yuanchao, is set to become the country's vice president this week instead of a more senior and conservative official best known for keeping the media in check, sources said.
Li's appointment would be a sign that new Communist Party leader and incoming president Xi Jinping's clout is growing, a source with ties to the leadership said. Xi fended off a bid by influential former president Jiang Zemin to install propaganda tsar Liu Yunshan in the job, the source said.
Jiang was a major power behind the scenes in the administration of outgoing President Hu Jintao.
The post of vice president is largely symbolic. However the job would raise Li's profile, give him a role in foreign affairs and further bolster Xi, who took the top jobs in the party and military at the Communist Party congress in
November.
The promotion of Li may also signal a willingness on the part of Xi to pursue limited reforms that Li is known to have advocated in his previous posts, such as making the selection of Communist officials more inclusive.
Leadership changes in China are thrashed out behind closed doors through horse-trading between new leaders and outgoing or retired leaders anxious to preserve their influence and protect family interests, but reshuffles must go through a choreographed selection process.
Two other sources, who declined to be identified because it is sensitive to discuss elite politics with foreign media, also confirmed that Xi had decided to make Li his vice president rather than Liu.
The National People's Congress, China's rubber-stamp parliament, will vote in Xi and Li as president and vice president respectively on March 14. Li Keqiang, the party's new No.2 official, will succeed Wen Jiabao to become premier and oversee the economy and day-to-day running of the cabinet.
"Li Yuanchao will be vice president, not Liu Yunshan," the source with leadership ties said.

"It was Xi's decision and a sign he is strong and able to say 'no' to Jiang," the source told Reuters.
CONSOLATION PRIZE
In November, Liu was promoted to the seven-man Politburo standing committee with responsibility for propaganda and ideology. He has also taken over two of Xi's previous positions: president of the Central Party
School, which grooms up-and-coming cadres, and top seat on the Secretariat of the party's elite 205-member
Central Committee.
Liu served as propaganda minister from 2002 to 2012, keeping a tight leash on domestic media and China's
Internet, which has more than 500 million users.
His rival, Li, had been widely considered a top contender for a spot on the standing committee in November but party elders led by Jiang used a last-minute straw poll to block him from joining the body, sources have said.
The vice presidential appointment "in part is compensation for him not getting into the Politburo standing committee", said Guo Liangping, a Chinese politics expert at the National University of Singapore's East Asia
Institute.
"That position has high exposure to the world, it's high profile, probably more prestigious, but in terms of real power it's limited."
If Li makes it, it would mark the first time since 1998 that the vice president is not a member of the standing committee - the apex of power in China. Li sits on the 25-member Politburo, one notch below the standing committee.
But both Li and Liu are too old to be potential successors to Xi.
"This time it's kind of a holding position," said Kerry Brown, executive director of the China Studies Centre at the
University of Sydney.
Li has been regarded as progressive for advocating incremental reforms in how the party promotes officials and consults the populace on policies, but how much influence he has as vice president will be, to a large degree, decided by Xi.
"If Xi wants a pro-active, tightly-allied kind of vice president, then the vice president will have power. If he wants a purely symbolic figure who is there to do absolutely nothing, then that's what the vice president will do," said
Brown.
The vice presidency was created by a change to the constitution in 1982. President Hu served in that role from
1998 to 2003 which formally anointed him as heir apparent to Jiang. Xi also served in that role from 2008 until the present.
The duties of the vice president include assisting the president and taking over the presidency in the event the president resigns or dies in office.
Li, a "princeling" whose father was a former vice mayor of Shanghai, earned mathematics and economics degrees from two of China's best universities and has a doctorate in law. He also spent time at Harvard University's
Kennedy School of Government.
(Editing by Raju Gopalakrishnan)

By Terril Yue Jones and Fang Yan
BEIJING | Mon Mar 11, 2013 http://www.reuters.com/article/2013/03/11/us-china-parliament-gripes-idUSBRE92A11K20130311
(Reuters) - Amid praise for China's Communist Party and the government's work report is an increasingly common complaint from delegates to annual parliamentary meetings - too much red tape and corruption.
The parallel convening of China's parliament and its main advisory body is usually a tightly scripted series of meetings meant to show unity and how China is tackling its many issues.
But at this year's gatherings of the National People's Congress and the Chinese People's Political Consultative
Conference, grousing over administrative headaches and bribery in order to do business has risen in volume.
"We are helpless when faced with such complicated regulatory approval procedures," said Li Shufu, chairman of automotive group Geely, which owns Swedish brand Volvo.
Li, a delegate to the NPC, noted an "important speech" by a senior leader that opposed behavior that interferes with market-oriented economic activities.
"But I think regulatory approval, by its nature, has interfered with normal market and economic activities," Li said.
Chinese as well as foreign companies face multiple approvals to expand operations, or pursue mergers and acquisitions and other corporate strategy, including permission from the Commerce Ministry, Finance Ministry,
National Development and Reform Commission (NDRC), State Administration of Foreign Exchange and other panels, depending on the industry.
Attempts by both Chinese and foreign enterprises to do business in China have been thwarted by the number of hoops through which to jump and the time needed to complete them all.
Then there's the bribery.
"The NDRC and other ministries are given the power for approvals so that only a handful of people manage the whole country," said Zong Qinghou, founder and chairman of drinks company Wahaha, and one of China's wealthiest individuals.
"There have been people who have gone to those ministries to hand over money because they need to get approvals," said Zong, who is also an NPC delegate.
"I think this is a big problem that has affected our country's economic development, and has also led to corruption."
Comments by Li, Zong and others were reported by Chinese media. Delegates have likely been emboldened to speak out by increased talk by China's leadership to crack down on the crookedness that pervades the country, from getting in to see a doctor more quickly to lining officials' pockets for favors.
Lai Ming, president of the Jiusan Society, one of China's non-communist political parties, said he also faults the convoluted bureaucracy.
"The need for too many complicated, opaque bureaucratic approvals is an important source of corruption," said
Lai, a CPPCC delegate. "China's reform of bureaucratic approvals and self-restriction on power is an arduous task.
We cannot be soft in cracking down on such vested interests."

Prosecutors have investigated 30 officials at the ministerial level or higher for corruption over the past five years,
Procurator General Cao Jianming reported on Sunday, according to the government-run news agency Xinhua.
Also on Sunday, China unveiled a plan to cut cabinet-level entities by two and dissolve its powerful Railways
Ministry in a bid to boost efficiency and combat corruption.
Land grabs by local governments are another sore point brought up by at least one delegate.
"If I bump into the premier, I will say, '(if you) want to rein in housing prices, (you should) first rein in the government'," said Huang Wenzai, chairman of property developer Star River and a CPPCC delegate.
"The government has been selling land at hefty prices so naturally housing prices will be high," Huang said.
(Additional reporting by Langi Chiang; Editing by Nick Macfie)
2013-03-10 by Xinhua writers Fu Shuangqi, Meng Na, Chen Siwu http://news.xinhuanet.com/english/china/2013-03/10/c_132222066.htm
BEIJING, March 10 (Xinhua) -- The State Council, China's cabinet, will begin its seventh restructuring attempt in the past three decades to roll back red tape and reduce administrative intervention in the market and on social issues.
The number of ministries under the State Council will fall from 27 to 25, while several departments and agencies will be reorganized, according to a plan on the institutional restructuring and functional transformation of the
State Council, which was submitted to the national legislative session Sunday.
Having gone through restructuring six times, "the State Council has established a framework that meets the needs of the socialist market economy but still has notable shortcomings," State Councilor Ma Kai said while deliberating the plan at the session.
"Some departments have more power than necessary, while in some aspects of governance, they are not in a position to act," Ma said.
The central government is troubled by the duplication of functions, overlapping management, low efficiency and bureaucracy, while supervision over administrative power is not fully in place, he said, adding that this has somewhat facilitated cases of corruption and dereliction of duty.
The most important task of the restructuring plan is to transform and streamline the government functions, he said.
MINISTRY OVERHAUL
According to the plan, the Ministry of Railways, which has long been at the center of controversy for being both a railway service provider and a railway industry watchdog, will be broken up into administrative and commercial arms.
Wang Yiming, deputy head of the Academy of Macroeconomic Research under the National Development and
Reform Commission, hailed the move as a "landmark."

"It means the country has removed the last 'stronghold' in the way of reforming the industry from a planned economy to market economy," Wang said. "It will open another door for the financing and management of the railway sector."
On March 4, Minister of Railways Sheng Guangzu told Xinhua that he supported the restructuring.
"I don't care whether I will be the last minister of railways. What matters is the needs of the country," he said.
"Self-reform is always difficult. Behind every department there is a lot of vested interest," said Chi Fulin, director of the China Institute for Reform and Development and a member of the National Committee of the Chinese
People's Political Consultative Conference (CPPCC).
However, the reform is necessary for the current administrative system. With its old ways of governance, it can not catch up with the changes in reality and has become a center of conflict, Chi said.
Other ministries and commissions to see a reshuffle are the Health Ministry and the National Population and
Family Planning Commission, which will be merged into a new National Health and Family Planning Commission.
The status of the existing State Food and Drug Administration will be elevated to a general administration in order to improve food and drug safety.
The country's top oceanic administration will be restructured to bring its maritime law enforcement forces, currently scattered throughout different ministries and departments, under the unified management of a single administration.
The National Energy Administration will be restructured to streamline the administrative and regulatory systems of the energy sector.
Two media regulators, the General Administration of Press and Publication and the State Administration of Radio,
Film and Television, will be merged into a single entity to oversee the country's press, publication, radio, film and television sectors.
By Christina Larson on March 11, 2013 http://www.businessweek.com/articles/2013-03-11/how-china-censors-weibo
The social compact between Sina Weibo (SINA) and the Chinese government that allows the provocative microblogging platform to exist at all is that it must maintain an in-house stable of paid censors to scrub content deemed too sensitive. A new academic study (PDF) provides more details on how this process works.
First, it’s pretty fast. As researchers at Rice University, Bowdoin College, University of Mexico, and the independent investigator Tao Zhu wrote, “5% of the deletions [of controversial posts] happened in the first 8 minutes, and within 30 minutes, almost 30% of the deletions were finished. More than 90% of deletions happened within one day after a post was submitted.”
The volume of posts censored is higher during daylight hours than at night, though some censors clearly work the graveyard shift. The researchers believe Weibo’s in-house censorship regime includes employees scanning posts manually as well as automated deletion of posts containing sensitive keywords.
Hot-button keywords will change over time, depending on the news cycle. For the period studied—from July 20,

2012, to September 8, 2012—keywords that prompted fast action from Weibo censors included “Beijing rainstorm,
“Diaoyu Islands,” and “group sex.” It’s easy to understand why: In late July, severe flooding in Beijing resulted in the deaths of at least 79 people, although official news reports initially indicated far fewer. The Diaoyu Islands are territory contested by Japan and China, and a continual source of tension. “Group sex” most likely refers to the salacious photos of three men and two women in a hotel room, variously entangled, that circulated widely online in August. One of the men was soon identified by netizens as a prominent Communist Party official in Anhui province. (Embarrassed coverage of the incident in state media resulted in the priceless Global Times headline:
“Naked Guy Is Not Our Party Chief: Local Authority.”)
Weibo users who regularly post about sensitive topics “are flagged for closer scrutiny,” the researchers wrote, and their posts are deleted fastest. The study focused on tracking users the researchers deemed likely to post such controversial content; for those users, roughly 13 percent of their posts were electronically vaporized. The sample size of observed deleted Weibo posts totaled more than 300,000.
The imperative for Chinese Internet companies to maintain in-house censorship regimes may not annoy only users. In 2010, Robin Li, chief executive of China’s leading search engine Baidu (BIDU), told Bloomberg News:
“We have to spend a lot of resources to make sure our content and services abide by Chinese law,” while international competitors, such as Google (GOOG) or Yahoo (YHOO), don’t shoulder parallel costs.
Meanwhile, not only are corporate workers paid to delete content in China, but others are paid directly by the government to shape public opinion by posting patriotic responses to online articles and on Internet forums. One such “online commentator” last year told artist Ai Weiwei, who guest-edited an issue of New Statesman magazine:
“Almost every morning at 9 a.m. I receive an e-mail from my superiors—the internet publicity office of the local government—telling me about the news we’re to comment on for the day.” The anonymous worker said, however, that being a propaganda foot soldier doesn’t require believing in the message. “I wouldn’t say I like [my job] or hate it. It’s just a bit more to do each day. A bit more pocket money each month, that’s all.”
Print
By MARK LANDLER
Published: March 11, 2013 http://www.nytimes.com/2013/03/12/world/asia/us-demands-that-china-end-hacking-and-set-cyber-rules.ht
ml
WASHINGTON — The Obama administration demanded Monday that China take steps to stop the widespread hacking of American government and corporate computer networks and that it engage in a dialogue to set standards for security in cyberspace.
The demands, laid out in a speech by President Obama’s national security adviser, Thomas E. Donilon, represent the first direct response by the White House to a raft of attacks on American computer networks, many of which appear to have originated with the People’s Liberation Army.
“U.S. businesses are speaking out about their serious concerns about sophisticated, targeted theft of confidential business information and proprietary technologies through cyberintrusions emanating from China on an unprecedented scale,” Mr. Donilon said in remarks prepared for delivery to the Asia Society in New York.
He also announced that the Treasury Department would impose sanctions on a North Korean bank that specializes in foreign-exchange transactions — ratcheting up the pressure on the North Korean government on the day that
Pyongyang announced it would no longer abide by the 1953 armistice that halted the Korean War.
The White House, he said, was seeking three things from Beijing: public recognition of the urgency of the problem; a commitment to crack down on hackers operating in China; and an agreement to take part in a dialogue to

establish “acceptable norms of behavior in cyberspace.”
Until now, the White House has steered clear of mentioning China by name when discussing cybercrime, prompted in part by qualms about escalating a dispute with Beijing while it is in the midst of a leadership transition.
In his State of the Union address, Mr. Obama said, “we know foreign countries and companies swipe our corporate secrets.”
But as evidence has emerged linking the People’s Liberation Army to an extensive hacking network, the China connection has become harder for the administration to avoid.
Mr. Donilon said the threats to cybersecurity had moved to the forefront of its concerns with China, noting that he was not “talking about ordinary cybercrime or hacking.”
But although Mr. Donilon emphasized the importance of developing a code of conduct on cybersecurity, he made no mention of Washington’s attacks on the computer networks in Iran, which have impeded Tehran’s development of nuclear centrifuge machines.
What is it like to know the truth while trying to keep your countrymen ignorant?
By BRET STEPHENS
March 11, 2013 http://online.wsj.com/article/SB10001424127887323826704578354070931017596.html
I picture the Chinese hacker who spent part of last year perusing internal Wall Street Journal emails as a scrawny
23-year-old lieutenant with bad English, bad acne and a uniform that is a half-size too large for his frame. He works for a branch of the People's Liberation Army known as Unit 61398. His office is a nondescript building near
Datong Road in Shanghai.
I call him Feng. I wonder what Feng does for fun.
I also have a mental picture of the censor who decides which articles or editions of The Wall Street Journal to ban in China. In my imagination she's a matronly woman with good English named Mei. Mei works for CNPIEC—the state-owned China National Publications Import & Export Corporation—which has offices near Beijing's Workers'
Stadium.
There's a pond next to the stadium. I imagine Mei sometimes takes her lunch breaks on a bench by the water's edge, quietly reading unredacted copies of Western publications.
The world knows about Unit 61398 thanks to a report last month by the Virginia-based Mandiant Corporation, which traced the source of many of the hacks into U.S. companies, including the Journal, to the Datong Road address. And the Journal knows CNPIEC's censorship because we take note of what gets banned or torn out of our newspapers when they are distributed in China.
In 2006, a year's worth of censorship amounted to eight articles being torn out of the paper. In 2012, the censorship was up more than 13-fold. Maps that treat Taiwan as a country: out. Articles critical of Beijing's policies toward Tibetans or Uighurs: out. A review of two books about Mao Zedong's Great Leap Forward and the famine he caused: out. Articles about intrigues at the top level of the Communist Party: out.
Also banned: an article about how Home Depot HD -0.07% is closing its remaining retail stores in China, after discovering that Chinese shoppers prefer "do it for me" over "do it yourself." More mysteriously, an editorial we wrote last March about restructuring Greek debt, which didn't even mention China, was also censored. I'm still

scratching my head about that one.
What goes on in Mei's mind when she decides what's fit and unfit for her fellow Chinese citizens to read? And what was Feng thinking (before he was shut out of our servers) as he followed the back-and-forth of editors rewriting copy or settling on the next day's lineup of articles?
In George Orwell's "1984," Winston Smith toiled away at the Ministry of Truth to make sure the narrative of the past always corresponded with the needs of the present. Feng and Mei are in a similar position: two low-level functionaries who know the truth. They know about the ill-gotten personal wealth of China's leaders. They know about the rate at which China's wealthy are withdrawing their money from the country. They know about the veracity of China's official claim that it doesn't hack into the servers of foreign corporations or steal proprietary data.
Knowing such things makes these two potential troublemakers, especially since they are in no position to benefit from what they know. A more careful regime than China's would probably take care to kill them after a few years.
I've thought about Feng and Mei recently while reading "Is God Happy?" an outstanding collection of essays by the late Polish philosopher Leszek Kolakowski. In a piece first published in 1983, "Totalitarianism and the Virtue of the
Lie," he noted that no regime that seeks to manipulate reality to its purposes can ever hope to succeed.
"Even in the best of conditions," Kolakowski wrote, "the massive process of forgery cannot be completed: it requires a large number of forgers who must understand the distinction between what is genuine and what is faked."
Kolakowski pointed to another problem with the system. "The rulers of totalitarian countries wish, of course, to be truthfully informed, but time and again they fall prey, inevitably, to their own lies and suffer unexpected defeats.
Entangled in a trap of their own making, they attempt awkward compromises between their own need for truthful information and the quasi-automatic operations of a system that produces lies for everyone, including the producers."
Modern China is a far more sophisticated place than Yuri Andropov's Russia, and in many ways a freer and more vibrant one. But that only makes the work Feng and Mei do less tenable. In a more totalitarian state, the relentless combination of terror and ideology makes it possible to sublimate reality for the sake of survival. That's not so easily done in today's China, where it can only produce cynicism.
Mei must have ideas of her own about what it means to keep the Chinese in greater ignorance than foreigners about what goes on in China. And Feng must also give an occasional thought to what it says about China that it should resort to so much spying and intellectual thievery to keep up in the world.
In thoughts like these there lies trouble for China's government and redemption for its people. Enjoy your lunch break, Mei.
Write to bstephens@wsj.com
Online
March 11, 2013
By Andrew Erickson and Gabe Collins http://blogs.wsj.com/chinarealtime/2013/03/11/new-fleet-on-the-block-chinas-coast-guard-comes-together/?
mod=WSJBlog

In a move with significant implications for territorial disputes in the East and South China Seas, the Chinese government announced on Sunday that it plans to centralize bureaucratic control over its maritime law enforcement agencies by consolidating them under the State Oceanic Administration (SOA) and its parent ministry, the Ministry of Land and Natural Resources.
Many analysts—ourselves included—focus heavily on China’s rapidly-developing navy. Yet some of the most profound effects on China’s near-term operations in its maritime neighborhood are likely to emerge from ongoing reforms that put China on a path to creating Asia’s largest coast guard. While further behind in high-end capabilities, China’s civil maritime forces combined currently have nearly as many large-displacement cutters and patrol vessels as Japan’s Coast Guard, the region’s largest and most capable.
While Chinese carrier strike groups lie years in the future, both in components and organization, the organizational elements now being integrated into China’s first unified Coast Guard are operating actively today.
In remarks delivered in conjunction with the National People’s Congress on Sunday, State councilor Ma Kai said that consolidation was needed to remedy the fact that the country’s five separate maritime law enforcement bodies were insufficient to fulfill China’s law enforcement needs, protect its sovereignty, and safeguard its maritime rights and interests, including a maritime economy that could account for 10% of national economic output by 2015 (in Chinese).
For years, China’s five largest civil maritime agencies were controlled by different parent organizations, earning them the moniker “five dragons contending for the sea.” Four dragons are now slated for consolidation under the
SOA:
China Marine Surveillance (CMS) [already under SOA]
Border Control Department (BCD) [formerly under the Ministry of Public Security]
Fisheries Law Enforcement Command (FLEC) [formerly under the Ministry of Agriculture]
General Administration of Customs [under the State Council]
The fifth dragon, the Maritime Safety Administration (MSA), under the jurisdiction of the Ministry of Transport, is not generally referenced in official statements describing the merger.
China’s ongoing civil maritime command-and-control reforms have been mentioned intermittently for years, based in part on close study of measures China’s neighbors have taken to improve their own coast guard capabilities. One such study (pdf), published in 2007 by researchers at the Ningbo Maritime Police Academy, noted how South Korea successfully unified different maritime law enforcement agencies into a single, powerful national coast guard. While the jury remains out the ultimate impact of China’s fledgling measures, the years of thought and operational experience behind today’s ongoing reforms suggest that they have strong political support and enjoy a good chance of succeeding in materially enhancing China’s maritime law enforcement capabilities.
Reform Objectives
The broad aim of the reform is to enable Chinese maritime law enforcement capabilities to be used in a more controlled manner while also retaining their effectiveness as an instrument of national power. Stronger central control will help Beijing better ensure that the new unified Coast Guard promotes national objectives while restraining individual commanders from taking rash actions that could trigger unintended escalation of maritime conflicts.
Japan has long recognized the power of Coast Guard forces to protect national interests in an effective manner that arouses less opposition and risk of escalation than use of naval warships. Indeed, local media recently reported that former Japanese Prime Minister Yoshihiko Noda had ordered the country’s Maritime Self-Defense
Force to remain out of sight over the horizon during Chinese forays into the vicinity of the disputed
Senkaku/Diaoyu Islands, instead letting the Japanese Coast Guard play the front-line role, after his administration nationalized the islands in September.

Now China is moving to further diversify its options by creating a similarly versatile Coast Guard that may even surpass Japan’s numerically within the next few years. China’s civil maritime sector is in the midst of a large shipbuilding spree that could add 36 modern cutters and patrol ships over the next five years (in Chinese) and make China’s Coast Guard the region’s largest by at least some metrics. Civil maritime vessels require mechanical reliability and the ability to operate at sea and support their crew effectively for sufficient periods, but tend to be simpler, cheaper and quicker to build than top-end warships. These factors allow China’s capable shipyards to ramp up numbers rapidly if desired.
Japanese defense analysts are already fretting over the possibility that in two to three years, Chinese Coast Guard forces could become able to deploy more ships to the Senkaku/Diaoyu Islands area than the Japan Coast Guard will be able to handle. As of 1 April 2012, the Japan Coast Guard had a total of 448 vessels and 73 aircraft (pdf).
While 51 of the Japan Coast Guard’s cutters are in the 1,000-ton class, China’s civil maritime forces already have
47 such vessels and are expected to add at least 20 by 2015 .
Key Challenges
Among the biggest unknowns in the wake of Sunday’s announcement is whether a top level decree can overcome entrenched constituencies within each of the five maritime law enforcement agencies and break enough “rice bowls” to ensure their effective integration. And even if the reforms are successful, what the consolidated Coast
Guard will do to address remaining deficiencies in equipment and other capabilities remains an important question.
Strategic Implications
Civil maritime integration affirms that Beijing believes regional maritime disputes will not be resolved anytime soon, but that it wants to have more coordinated policies and operations among its maritime law enforcement agencies. Bureaucratic unification may help to ameliorate risks previously imposed by competing law enforcement agencies being involved in maritime encounters and disputes. Japanese sources have argued that in the past, China’s disparate maritime law organizations and the lack of centralized control over their operations greatly complicated the East China Sea security situation. That hasn’t always been the case. On March 8, 2009,
PLAN, CMS, FLEC and other Chinese-government controlled vessels were able to coordinate closely and effectively in harassing an unarmed U.S. government survey ship in international waters far from China’s coast
(pdf). Yet, as Nan Li documents in his landmark study on Chinese civil-military relations (pdf), Beijing’s real-time crisis decision-making and –management still faces formidable challenges. While the current reforms promise to help address this serious problem, it remains to be seen exactly how SOA will merge its new “dragons’” organizational structures and operations.
Building more coherent civilian maritime law enforcement capacity serves China’s core strategic interests.
Outside of China’s immediate neighborhood in the East and South China Seas, many of the security threats it faces come from non-traditional sources such as piracy. A more unified command structure also stands to significantly enhance Chinese maritime law enforcement’s operational effectiveness. For example, in the past,
China MSA’s Shanghai Rescue Coordination Center has overseen a vessel-tracking systems that displayed MSA vessels’ locations in real time, but were unable to show where vessels from the other four “dragons” were (pdf).
High-level oversight and command unification can help China overcome that and other inefficiencies.
A unified Chinese Coast Guard may expand its portfolio operationally and geographically over time. It also enhances Beijing’s ability to respond with white hulls instead of gray hulls, thereby engaging in moderated messaging and actions, which Lyle Goldstein, a leading expert on the subject, terms “non-military escalation.”
Traditionally, among Chinese law enforcement vessels, only BCD’s have been armed with substantial deck guns.
The fact that Coast Guards can exert influence without being viewed with the alarm triggered by actual naval deployments make them an extremely useful tool for global maritime powers to safeguard interests in near and distant waters alike. Here it bears noting that the U.S. Coast Guard operates globally. As China’s global maritime interests continue expanding and China begins to see its laws as applying to activities beyond Chinese borders,

the leaders of a new, unified maritime law enforcement body may well lobby for a broader set of missions than they currently perform.
Finally, a more unified Chinese Coast Guard command structure facilitates cooperation with other countries.
China and other regional and global maritime powers such as Japan, South Korea, the U.S. and India share common interests in managing fisheries and addressing threats to key sea lanes and ports from piracy, terrorism and other disruptive non-traditional activities. In this respect, having a centralized point of contact in China could foster closer cooperation on areas of mutual interest, provided that its leadership is vested with sufficient political authority to overcome internal opposition from competing entities and interests.
As challenges of bureaucratic unification and coordination are surmounted, China’s new fleet on the block will afford significant operational possibilities for China. Instead of “contending for the seas” among a motley collection of small dragons, a bigger dragon can handle their previous responsibilities more effectively. Beyond its continuing responsibilities within Chinese territorial waters, it may instead contend more intensively with the coast guards and navies of neighboring countries—albeit in a fashion far less escalatory than if China dispatched naval ships. The direction that China’s new Coast Guard takes, the size to which it grows, and the roles it assumes will offer significant indications concerning Beijing’s plans for the seas off its coast.
March 11, 2013 http://blogs.wsj.com/chinarealtime/2013/03/11/is-china-cracking-down-on-north-korea-trade/?mod=WSJBlog
Is China tightening the screws on imports into North Korea?
Rice prices are reportedly soaring in Pyongyang as Chinese customs and border control impose more stringent inspections on imports into the country.
South Korea’s Yonhap News reported on Friday that Chinese authorities were visibly strengthening customs inspections of shipments bound for North Korea from the northeastern cities of Dandong and Dalian and also tightening border controls elsewhere, which it says has drastically cut the volume of rice smuggled in.
Japan’s Mainichi Shimbun carried a similar report that said the price of rice and other produce have risen sharply.
Read more at Korea Real Time.
March 11, 2013
By Russell Leigh Moses http://blogs.wsj.com/chinarealtime/2013/03/11/xi-puts-money-down-on-meaningful-reform/?mod=WSJBlog
With this past weekend’s shakeup of ministries and agencies, Communist Party leader Xi Jinping just put some important cards on the table.
A leading commentary in the Monday edition of the Communist Party flagship Peoples Daily insists this new round of institutional reforms is not the usual administrative reshuffling, but an actual changing of what specific agencies will do (in Chinese).

It also takes a swipe at the outgoing administration, suggesting the old leadership was less responsive to the needs of the people than many thought it should have been.
Many thought Xi would be more cautious, in the tradition of previous Chinese leaders. But such a strongly worded commentary suggests that he’s unafraid to offer alternatives without delay. And he realizes that the only good bet is on meaningful change.
This restructuring, the paper says, “deepens the core of administrative reform,” for it goes beyond “the usual streamlining” to an actual “transformation of government functions.” The editorial goes on to insist that this transformation is actual economic and political reform, because it seeks to set boundaries on what the government does—allowing citizens into the game instead of letting the state run the table. “Respect the market, rediscover society” is the new refrain, the commentary says.
This need to rebalance the roles of government, the market and society comes with the clear intention of getting bureaucrats and their buddies out of economic decision-making.
In other words, the institutional shakeup-and-breakup is a response to what Beijing thinks society wants–better food safety, for one thing; some sense of security over housing policy for another.
The commentary isn’t shy about criticizing what came before. It notes that even when there were policy shortcomings that “created serious social concern, there was no response before.” That’s a short, sharp shot at the previous leadership, and a further sign that Xi and his allies are not shy about taking on the old guard or opponents who think that a conservative course is best for China.
Maybe that’s too much of an early gamble; but this is a different leadership for different times, and so is the urgency with which they’ve been pursuing their brand of reform. There may be doubts about how to cast reform ideologically, but it’s clear this new group isn’t afraid to push change where it counts right now – in the making of policy.
The next few weeks should tell us what other cards Xi and his partners in reform have up their sleeve.
By Austin RamzyMarch 11, 2013 http://world.time.com/2013/03/11/end-of-the-line-for-chinas-sprawling-corruption-plagued-railway-ministry/
China has announced plans to reduce its bureaucracy by cutting two of its 27 Cabinet-level ministries, including the Ministry of Railways, a massive body with more than 2 million staff and its own police and court system. The
Railway Ministry’s dual roles of both regulating train travel and promoting the rapid expansion of the country’s high-speed network was seen as a contributing factor to safety flaws that led to a deadly 2011 crash and a corruption scandal that toppled its former boss, Liu Zhijun.
In addition to downsizing the Railway Ministry, the government will merge the National Population and Family
Planning Commission (the body that overseas the one-child policy) with the Ministry of Health, increase the status of the State Food and Drug Administration and combine the two chief censorship bodies, the General
Administration of Press and Publication and the State Administration of Radio, Film and Television, Xinhua reported, citing State Council Secretary General Ma Kai’s address Sunday to the National People’s Congress.
The changes to the Railway Ministry are likely to gain the most attention because of its recent scandals and the widespread reliance on train travel in China, particularly during the Chinese New Year holiday, when more than
200 million people use the country’s extensive rail network. The government’s plans call for splitting the ministry

into a commercial China Railway Corporation to operate the rail system and merging the administrative functions with the Ministry of Transport. “The integration of government administration with business enterprise has caused many problems, such as low-efficiency and corruption,” says Zhao Jian, a railway expert and professor at Beijing
Transportation University. ”As a monopoly, the railway department lacks economic efficiency. These reforms will make it possible to break up the monopoly, introduce competition and enhance the efficiency of the whole railway industry.” Dissolving the Railway Ministry itself is but a first step, says Zhao, otherwise the country will be left with a single, massive corporate entity operating the system. ”Next we should break up the monopoly and introduce competition into this industry,” he says.
Indeed, many of the changes announced on Sunday may have more symbolic than practical significance. They will nonetheless likely be welcomed by a population tired of corruption and excessive bureaucracy. ”The majority of people in China really just want better governance, less abuse, less corruption or at least less ostentatious displays of ill-gotten wealth and some indication that the party is taking things seriously and addressing their main concerns,” says Steve Tsang, a professor of contemporary Chinese studies at the University of Nottingham.
Since taking over the role of Communist Party chief in November, Xi Jinping has made a priority of reining in the official perquisites most aggravating to the Chinese public, such as lavish meals and traffic-snarling motorcades.
The reduction in the total number of ministries is part of that effort, says Tsang, because it addresses public concerns about the ruling party enabling a vast class of unaccountable elites, even if it doesn’t manage to reduce the overall size of the bureaucracy. “In reality, it doesn’t matter much if you merge ministries or not,” he says.
“But in present terms, it’s quite useful for projecting the image of the party taking on concerns about too many senior officials, too many people with privileges. By reducing the ministries, it appears there are fewer people with privilege. It’s a clever play on this kind of public-image concern, even if it is not matched by reality.”
— With reporting by Gu Yongqiang / Beijing
青年报
深圳晚报
现代金报
新快报报
新晚报 by Barry van Wyk on March 11, 2013 http://www.danwei.com/farewell-ministry-of-railways/
China’s newspapers today slightly ruefully report the departure of an institution as old as the PRC itself: the
Ministry of Railways. The behemoth ministry has overseen the rapid development of the railway network in China in the last decade but was dogged by claims of massive corruption (especially in connection with its disgraced former minister Liu Zhijun, he of “18 mistresses” infamy), and its fate appeared to have been sealed by the disastrous Wenzhou train crash in July 2011.
东方卫报
东莞时报
江淮晨报

潇湘晨报
The main front page story on China’s newspapers today is the imminent dismantling of the Ministry of Railways, a stalwart ministry dating back all the way to 1949 (and further back into the Qing and Republican periods with its predecessor, the Ministry of Posts and Communications). News of its demise has today caused the newspapers to bid an emotional farewell to something akin to an old friend who’s finally passed on in old age. Various front pages today display images of people posing for pictures in front of the Ministry of Railways building in Beijing to capture a last memento before the sign on the gate is taken down.
A plan to restructure a number of government departments was tabled yesterday at a session of the National
People’s Congress in Beijing (for a more detailed outline of the plan see reports in Global Times or New York
Times). The new plan includes for the Ministry of Railways to be broken up and the responsibilities of its railway operations to be transferred to a newly created state-owned company, while its regulatory functions will be taken over by the Ministry of Transport.
Speaking after the new plan was announced, the current and (sure to be) last Minister of Railways, Sheng
Guangzu ( 盛光祖 ) was quick to point out that no staff layoffs are on the cards, and he welcomed local and foreign investors to invest in the new state-owned railway company that will party replace the ministry. When asked whether the new company will be listed and whether existing staff will be allocated any of the shares, Sheng replied that all these things are still to be worked out, before adding, “its better to remain more strict with state-owned companies ” ( “国有企业还是严一点好” ).
Links and sources
AP: China’s leaders take aim at Railways Ministry
Dongguan Times ( 东莞时报 ): 撤销铁道部 组建国家铁路局 和中国铁路总公司
Shenzhen Evening News ( 深圳晚报 ): 铁道部“下车”
March 10, 2013 http://www.chinahearsay.com/china-word-of-the-day-restructuring/
I’m feeling like a big cliche at the moment, sitting here at a Starbucks in scenic Exton, Pennsylvania and trying to get a little blogging in between other commitments. Blogging at a Starbucks, surrounded by suburban Americans with their bizarre custom coffee orders — it’s like the first half hour of a Rom Com.
Anyway, everyone (not here, but everyone back in China) has been waiting for the policy shoe to drop from the new government for quite a few weeks now. Just what is the new government going to do in response to the significant challenges in the Middle Kingdom? There have been a couple of speeches but no real action thus far.
And now for something completely different: Beijing is messing with the government’s Org Chart.
China plans to restructure government bodies responsible for energy, railways and food safety as the nation’s new leaders seek to cut down on bureaucracy in the biggest top-level reorganization since 2008.
The Ministry of Railways will be split, the National Energy Administration will take over power-market regulation and the food and drug regulator will be elevated to a ministry-level general administration in a bid to improve food safety, according to a plan announced at the country’s legislature in Beijing today. Maritime law enforcement will be combined under a single body as China tussles with neighbors including Japan and Vietnam over disputed islands. (Bloomberg)
From far away, this reshuffling looks like a “one size fits all” fix for very complicated issues. Shuffle the boxes

around, shake up the organizations, and let’s see how everything falls together on the other side.
But reorganizations can’t be analyzed from the outside of course. The macro moves might make sense or they might not — depends on what happens on the ground and whether implementation is handled correctly. With the food and drug guys, for example — the SFDA has had endemic corruption and other problems ever since I can remember (I used to do a bit of pharma work back in the day). That’s something that has to be fixed from the inside with a change of culture, among other things. Anyway, if some of the reporting is accurate on the SFDA move, this might be more about food safety and projecting an image of “We really take this stuff seriously.”
Some of the other moves are intriguing and certainly look smart from the perspective of this mostly-ignorant outsider. I’ll be interested to hear from the real industry gurus as time goes on. For example, given the horrific accidents and scandals that have hit China’s rail network, the idea of splitting construction from the owner/operator end of things sounds like a good idea. But really, that’s way out of my blogging comfort zone.
On a side note, I now work in an organization with real transport gurus, including guys who focus on rail, so to the extent I can pump those folks for info on this issue and blog on it without crossing any sort of employer confidentiality line, I’ll try to do so. Granted, these are mostly software sales guys, not industry analysts or anything, but I have a feeling that they know a thing or two about the agencies they deal with on a daily basis.
One more item of interest:
The long-heralded restructuring of State Council ministries and departments was finally announced today. As had been anticipated, the General Administration of Press and Publications and the State Administration of Radio, Film and Television will merge into a new body, the State Administration of Press, Publications, Radio, Film and
Television (guojia xinwen chuban guangbo dianying dianshi zongju 国家新闻出版广播电影电视总局 ). The National
Copyright Administration, a subordinate department of GAPP, will also be brought into the SAPPRFT, an unfortunate moniker if ever there was one. (China Copyright and Media)
Rogier (as usual with whatever he blogs about) is spot on regarding the name. It’s like something out of Terry
Gilliam’s Brazil. He also points to the most significant take-away from all this that I hope the foreign press do not ignore: this restructuring is not a liberalization story. This is an administrative move grounded in efficiency concerns, in part because of the challenges of new technology, and if anything, may allow for more direct control over some areas of the media and not less.
Each one of these moves is distinct, as each government body has its own special set of challenges. However, I’m not sensing any overall theme here aside from “Let’s see how we can fix this stuff through reform and efficiencies.” Reminds me more of post-M&A restructuring than anything else, and perhaps that shouldn’t surprise anyone. The word “technocrat” isn’t thrown around just for fun by China watchers, you know.
By Anthony Tao March 11, 2013 http://beijingcream.com/2013/03/activist-and-cameramen-reportedly-beaten-outside-home-of-liu-xia/
On Saturday, South China Morning Post reported that two Hong Kong journalists and activist Yang Kuang were beaten on Thursday outside the home of Liu Xia, the wife of Nobel Peace Prize recipient Liu Xiaobo.
We last heard from Liu Xia, who is under house arrest, when activists pushed past security guards and filmed their brief face-to-face conversation with her on December 28, Liu Xiaobo’s birthday.
The latest incident involved TVB and Now TV cameramen who were filming Yang’s attempt to visit. Provocational journalism at its, ahem, best?

Via SCMP:
Yang’s whereabouts were unknown [Friday] night. A witness, a mainland activist who requested anonymity, said while Yang was waiting for a taxi shortly after 10pm a dozen men attacked him. He was taken away in a police car afterwards, the activist said.
Another activist, Hu Jia, posted on his microblog a picture he claimed to be the moment Yang was put in the police car.
Before Yang was taken away, he told the SCMP that security guards refused to let him register to see Liu Xia. It’s unclear what TVB’s Tam Wing-man or Now TV’s Wong Kim-fai did, if anything, before the guards began striking them, though it seems obvious that trying to push past guards — who, with their shitty jobs, probably aren’t the most tolerant and even-tempered people in the world — while wielding big cameras seems like a pretty good way to elicit a physical response, if that’s what you were after.
Resorting to violence is despicable, of course, and Liu Xia’s continued extralegal imprisonment remains a farce and a stain on the country that allows it.
Tam said he was punched in the face, then pushed to the ground before five or six men trampled on him. Wong said they pulled him and tried to snatch his camera, before hitting him in the head. He said his camera was damaged during the scuffle.
Along with TVB, Hong Kong delegates in Beijing for the Two Sessions have also issued statements condemning the attacks.
TVB issued a statement calling for the attackers’ arrest. It also urged the Hong Kong and Macao Affairs Office of the State Council to protect Hong Kong journalists’ safety on the mainland.
Local delegates to the National People’s Congress (NPC) and Chinese People’s Consultative Conference (CPPCC) said the attack was unacceptable.
“Hong Kong treasures and respects freedom of the press. It is unacceptable for reporters to be attacked when they are doing their job legally, and [such action] should be condemned. It’s a pity for something like this to happen during the annual congress,” NPC deputy Ambrose Lee Siu-kwong said.
Beijing’s response is continued silence.
Hong Kong journalists, activist beaten outside home of wife of dissident Liu Xiaobo (SCMP, h/t Alicia)
Outrage over attack on local cameramen (SCMP)
March 11, 2013 | by Rachel Wang http://www.tealeafnation.com/2013/03/after-chinese-politicians-slip-of-the-tongue-mistrust-toward-charity-ba ck-in-the-spotlight/
“What is the concept [behind] the Charity Law mean? A certain amount from everyone’s paycheck will have to be donated, just like a tax… and one single Charity Law can solve all problems facing charity in China.”
This controversial idea to treat charitable giving as a tax came from a recent interview of Zhou Sen, the Honorary

Vice President of the China Charity Federation, also a representative of the National People’s Congress, China’s law-making body. Soon after, this remark stirred a national debate on Sina Weibo, China’s Twitter, attracting over
300,000 comments in just a few days. Web users shared their anger and frustration towards an idea they denounced as “shameless” and “legalized robbery,” with one Web user vividly opining that Zhou Sen’s “head has been kicked by a donkey.” Some even christened the proposal with a new name: “Wage Robbery Law.”
This controversy is in fact a reflection of public distrust toward government-backed charity organizations in China, which have been trapped in a series of PR crises starting in 2011. In April 2011, a picture showing an invoice for a meal costing 9,859 RMB (about US$1,586) and paid for by the Red Cross of Shanghai Luwan District was posted on Weibo. This turned out to be the start of a collapse of public trust towards Chinese government-backed charities. Two months later, a 20-year-old girl named Guo Meimei, claiming to be an employee of an arm of the
Chinese Red Cross, posted pictures that, TLN reported, “showed Guo driving a Maserati, posing against a wall of
Hermes bags, and otherwise living a life far beyond the means of any honest charity worker.” Though later the
Chinese Red Cross Association claimed “no connection” with Guo, this event again attracted national focus, the overwhelmingly negative sentiment accumulated heavily hit the reputation of Chinese gov-backed charities especially the Red Cross.
In December 2012, a widely reported scandal again attracted national attention — cash in donation boxes in
Chengdu for disaster relief were left uncollected for four years, causing the money inside the boxes to grow mold.
Further investigations and apologies followed; a Social Monitoring Board was even established to oversee charity reform. But the problem has not gone away. The Executive vice president of the Red Cross Society of China, Zhao
Baige, admitted in an interview early this month that “public trust cannot be recovered in a short-run.”
Given the deplorable recent history of certain Chinese charities, it ’ s small wonder that Web commenters are cool toward the idea of forced donation. Historian Lei Yi (@ 雷颐 ) hit the nail on the head when he posted on Weibo:
“ Is this [enforced donation] called charity? Government-back organizations lack transparency, [so] donors are fewer and fewer, [so] you compel them? …the right path is gaining public trust.” User @Braveheart-121 brought the analysis further: “The Guo Meimei incident is just a lighting fuse for the charity crisis. The [government’s] reluctant to give up control of the charity is in a sense a denial of the charity’s transparency.”
In fact, in China, the de facto boundary between the government and charity organizations is hard to define. The opposition the public shows to charitable organizations might be most accurately seen as a transfer of the distrust citizens feel towards their government. While Web users are dissatisfied with charities and their less-than-independent bureaucracies, the charitable organizations themselves also face an identity dilemma due to the current regulations. They can either fail to register with the government, and be illegal organizations, or they can register and implicitly submit to some degree of governmental control.
According to Jia Xijin, the Deputy director of the NGO Research Center of Tsinghua University, in order to register an NGO in China, the NGO itself must find a “ Unit in Charge ” ( 业务主管单位 ), which includes related government organizations or organizations with government authorizations. From the government’s perspective, oversight of an additional (non-profit generating) entity is simply a pain. In addition, governmental suspicions towards social organizations in general are deep-rooted. The very term “social organization” is more or less a sensitive label associated with threats to the Party’s leadership. Thus, most registered social organizations are the ones initiated by the government itself, which are impossibly named “G-NGOs” (Governmental Non-Governmental
Organizations) rather than civil NGOs.
The “Wage Robbery Law” has recently faded as a touchy subject in Chinese social media. Most importantly, it appears that Zhou Sen spoke out of turn. On March 6, the Ministry of Civil Affairs of the People’s Republic of China published an article entitled “China Charity Federation Does not Agree with the ‘Donation Law’” to absolve itself :
“Zhou’s title is just honorary, as a reward for his contribution to Chinese charity. His words as a representative are his own… Zhou does not participate the specific operations of the Federation either.” According to the Five-year
Guideline for the Development of China’s Charitable Organizations published in 2011, “Donors will be able to decide for themselves the size of their donations and how they want to have their donations used,” and the
Ministry agrees: “China Charity Federation…is against any form of enforcement or donation quotas.”

More broadly, mistrust of NGOs—and for that matter, G-NGOs—persists, and the fate of civil social organizations in China remains an unsolved question. It may ultimately be entrepreneurs and rule-breakers from outside the system who revive charity as a force in Chinese society. As @ 瑞克周 wrote: “ The status quo of NGO is that the semi-civil servant system monopolizes a lot of resources, but the future surely belongs to the real idealist doers,
[and] transparent, efficient, and low-cost civil groups.
”
Newswire
By Sui-Lee Wee
BEIJING | Mon Mar 11, 2013 http://www.reuters.com/article/2013/03/11/entertainment-us-china-artist-idUSBRE92A0A620130311
(Reuters) - Dissident Chinese artist Ai Weiwei announced plans on Monday to release a heavy-metal album that he said would "express his opinion" just as he does with his art.
The burly and bearded Ai said 81 days in secretive detention in 2011, which sparked an international outcry, triggered his foray into music.
"When I was arrested, they (his guards) would often ask me to sing songs, but because I wasn't familiar with music, I was embarrassed," Ai, 55, said in a telephone interview. "It helped me pass the time very easily.
"All I could sing was Chinese People's Liberation Army songs," Ai said. "After that I thought: when I'm out, I'd like to do something related to music."
A court in September upheld a $2.4 million fine against Ai for tax evasion, paving the way for jail if he does not pay. Ai maintains the charges were trumped up in retaliation for his criticism of the government.
The world-renowned artist has repeatedly criticized the government for flouting the rule of law and the rights of citizens.
Ai's debut album - "Divina Commedia", after the poem by Italian poet Dante - is a reference to the "Ai God" nickname in Chinese that his supporters call him by. "God" in Chinese is "Shen", while "Divina Commedia" in
Chinese is "Shen qu".
Two songs are about blind legal activist Chen Guangcheng, whose escape from house arrest last April and subsequent refuge in the U.S. Embassy embarrassed China and led to a diplomatic tussle.
One song on the album is called "Hotel Americana", a dig at the U.S. Embassy for sheltering Chen. Another is
"Climbing over the Wall" - a reference to Chen's scaling of the walls in his village to escape, and Chinese Internet users circumventing the "Great Firewall of China", a colloquial term for China's blocking of websites.
Ai said he was not worried about government persecution for his album, which will be out in about three weeks.
But he is gloomy about the prospects of it being sold in China, saying he will distribute the album online "because music is also subject to review" in China.
Ai said his time in the recording studio did not mean that he was moving away from art.

"I think it's all the same," he said. "My art is about expressing opinion and communication."
Ai said he was working on a second album, with pop and rock influences, that he hoped people would sing along with.
"You know, I'm a person that's furthest away from music, I never sing," Ai said. "But you'll be surprised. You'll like it."
(Reporting by Sui-Lee Wee; Editing by Nick Macfie)
Print
Shanghai authorities say tap water is safe to drink as efforts stepped up to remove bloated carcasses from
Huangpu river
Jonathan Kaiman in Beijing guardian.co.uk, Monday 11 March 2013 http://www.guardian.co.uk/world/2013/mar/11/dead-pigs-chinese-river
More than 2,800 pig carcasses have been discovered floating in a river that runs through Shanghai and feeds into its tap water supply, according to China's state media.
The number of dead pigs found in the Huangpu river rose from a few dozen on Thursday to more than 1,200 on
Sunday, and again to over 2,813 on Monday afternoon as the city's cleanup effort intensified.
While the cause of the incident is still under investigation, water quality tests along the river have identified traces of porcine circovirus, a virus that can affect pigs but not humans. No signs of other diseases such as E coli, foot and mouth disease, or hog cholera have been found, and authorities say the city's tap water is still safe to drink.
China's toxic smog, rubbish-strewn rivers and contaminated soil have emerged as a source of widespread anger over the past few weeks, as profit-minded officials jostle with aggrieved internet users over how to balance the country's economic development with its environmental concerns.
Experts say the groundwater in half of all Chinese cities is contaminated, most of it severely, and that soil pollution could be widespread in 15 of the country's 33 provinces.
Villagers found the first pig carcasses near a water treatment plant on a creek upstream from Shanghai on
Tuesday, but clean-up efforts did not begin until the weekend, according to the news portal Xinmin Online.
Shanghai initially dispatched six barges to remove the corpses, and added another six when the problem's scope became clear.
Pictures online show the bloated carcasses floating by the shore of the murky river and workers wearing blue uniforms fishing them out with long-handled farming tools. "The overpowering stench of the pigs from strong sun exposure and heat in Shanghai these days has made most reporters on the scene sick," reported the popular
China news blog Ministry of Tofu.
Xu Rong, director of Shanghai's Songjiang district environmental department, told China's state broadcaster
CCTV that she saw dead pigs floating along an 11km stretch of the river's Pingshen waterway, which extends to a cement plant in nearby Zhejiang province.
Judging by identification tags on the the pigs' ears, she said, they most likely floated into Shanghai from farming communities upstream.

"You can see dead pigs here every year, but there are more now than in the past few years," a local man told the station.
The Jiaxing Daily newspaper in northern Zhejiang province quoted a villager as saying that over the past two months almost 20,000 pigs in his village have died of unknown causes. While Shanghai compensates its farmers for properly disposing of dead swine, the newspaper said, Zhejiang and Jiangsu provinces lack a comparable incentive system, so farmers there often dump their pig carcasses directly into local rivers.
"The local authorities are conducting co-ordinated efforts to stop the dumping of dead pigs from the source," said
China's official newswire Xinhua.
Online
March 11, 2013
By James T. Areddy http://blogs.wsj.com/chinarealtime/2013/03/11/in-shanghai-pork-soup-jokes-give-way-to-worry/?mod=WSJBl og
Weekend jokes in Shanghai about pork soup and floating chops after dead pigs were found bobbing in the city’s
Huangpu River were quickly giving way on Monday to more serious health concerns over a waterway that supplies drinking water to 23 million residents.
Shanghai authorities reported over the weekend that hundreds of dead pigs were being pulled from the Huangpu
River, which cuts through the middle of the city. But by Monday, authorities pushed the “preliminary” toll to well more than 3,000.
One test showed the river’s water carries a pig-borne disease called porcine circovirus, local authorities said
Monday. Experts said that humans aren’t susceptible to the virus.
The virus was only a starting point for concern. Authorities had little immediate explanation on how so many dead pigs ended up in a river that cuts through one of the world’s most densely populated cities. And authorities weren’t providing much indication about what killed them.
Photographs of blackened and bruised pigs illustrated once again the nation’s stark environmental protection failings. Workers using pitchforks and bamboo poles pulled the carcasses onto embankments already covered in discarded plastic bottles, Styrofoam and other garbage that typically floats in Shanghai waters, local media said.
“It’s unheard of,” said Yao Songqiao, a Beijing-based consultant with the non-governmental organization
International Rivers. “On the other hand, working in the environmental protection area [teaches you] anything can happen.”
Many of the floating pigs were found in Shanghai’s Hengliaojing tributary, which meets the Huangpu River about
70 kilometers from where the river bisects the city’s historic Bund and the Liujiazui financial district. The Huangpu is fed by numerous waterways in Zhejiang and Jiangsu provinces; after passing through downtown Shanghai, the fast-moving Huangpu empties into China’s mighty Yangtze River.
The nearest intake for the city drinking water, Maogang Water Supply Station, is located on the Huangpu south of where the pigs were found, or at a point upriver that would technically make it cleaner. Officials said pumping stations are working normally on Monday but they added that extra efforts are being made to ensure water tap water is disinfected.

Technically, the area is zoned as a preserve. Authorities said upper reaches of the Huangpu in southern Shanghai are the primary source of water for around 22% of city residents.
The Global Times newspaper quoted residents saying they started seeing dead pigs last Thursday. The Shanghai
Water Authority said its first reports came Friday evening.
In a country with more than 470 million pigs, premature animal death is inevitable. Yet, experts say the conditions of pig farms in China can spread death quickly. In a 2007 outbreak of high-fever blue ear disease, an estimated
50 million pigs died in China.
Swine are susceptible to numerous fevers, influenzas and other diseases, notably foot-and-mouth disease, which kills most animals it affects. (Children are susceptible to a treatable viral infection of the same name that is particularly common in Asia.
One industry expert said the mass deaths indicated an outbreak, likely on a single farm. In January, China reported an outbreak of foot-and-mouth disease in southern Guangdong province serious enough to report to the
World Organization for Animal Heath, according to the agency.
Monday’s report on water testing in Shanghai quoted local authorities as saying results were negative on samples checked for common pig-borne diseases including foot-and-mouth, swine fever, hog cholera and epidemic diarrhea. The local government’s Animal Disease Prevention and Control center was concentrating on six pathogens.
The incident raises questions about China’s methods and systems for handling animal death, which is known in the industry as “deadstock disposal.”
Floating pigs aren’t Shanghai’s only water pollution problem this year, despite years of effort by local authorities to improve local waterways in a relatively rich region of China, albeit one that’s heavily industrialized and populated.
Residents living near where pigs are being pulled from the river went days in January without tap water when a chemical transporter leaked benzene into another Huangpu River tributary. More than 20 people were hospitalized in the incident, which left others to obtain water from fire trucks that pumped supplies out of tankers.
For some residents, authorities cut that month’s water bill in half.
– James T. Areddy, follow him on Twitter @jamestareddy
Posted: 03/11/2013 http://www.thenanfang.com/blog/family-discover-that-only-10-of-money-they-had-been-donating-was-spenton-the-needy/
A Shenzhen family which had been sponsoring a boy in an impoverished village since 1993 has discovered that the boy received no more than 10% of what they had been sending to him, Shenzhen Satellite Television reports. The family was kept so in the dark that they thought the child they sponsored, in Jiangxi Province’s Jinggangshan, was female.
At least four people were taking a cut of what the family was donating, in what could be the biggest scandal related to a Chinese charity since Guo Meimei took to the internet in 2011 to talk about how rich she had got while

being associated with the Chinese Red Cross.
For two decades, the family had been donating at least 400 yuan a year to Chen Qiaoxi (a female sounding name), who was a primary school student when they started. In 2011, Chen came to Guangdong to find a job, which was when they discovered that he was a male.
Chen Chubi, the mother of the sponsoring family, told reporters of her surprise when she discovered that Chen had received no more than 40 yuan a year from the family.
Chen Xiaoqi, who now works in Zhongshan, said he had received donations from several families in Shenzhen while growing up, but no individual donation amounted to more than 40 yuan a year.
A reporter from Information Daily in Jiangxi Province told media that his paper was leading an investigation into where the donated money was going.
Yuan Yanting, daughter of Chen Chubi, said she was disappointed but would continue to donate to charities after verifying their credibility.
Brian Eyler
11 MAR 2013 http://www.rectified.name/2013/03/11/willing-to-pay-on-the-cost-of-living-in-china/
In December of last year I made a statement that startled the students enrolled in my Chinese economic development course: that prices overall in China were high relative to prices of goods in the United States. They were surprised because the consumption choices of American college students studying abroad in China often do not go far beyond that of an inexpensive bowl of noodles, a few Qingdao beers on a Friday night, and a bagful of knock-off brand name clothing from the Silk Market. But the rising Chinese consumer, whose consumption habits require much more than food and clothing, faces a very different basket of consumer goods, and most of those goods are sold at high prices.
To illustrate, here’s a quick look at the prices of housing, airfare, medicine, and cars in China.
The cozy 100 square foot classroom in which I made the above statement is located 15 kilometers from Beijing’s central business district, and if sold on the real estate market today it would list at 80,000 USD. By extension, the modest American 1000 square foot detached home with a yard would sell in Beijing for more than 800,000 USD.
What’s more, the property bought in China comes only with a 70 year lease and limited to zero rights to the ground the property lies on. China’s high housing prices are far from a new story, but the outside observer and the
Chinese home buyer is consistently befuddled at the persistence of these high prices.
Last month I looked into purchasing a roundtrip flight to Chiang Mai, Thailand from Kunming. The pre-tax cost of the discounted ticket was a surprising 1200 RMB ($190) but the tax burden of the international flight was an additional 2000 RMB taking the total cost of the two hour flight to over $500. The Chinese economy has the fastest growing demand for flights worldwide and an ever-expanding fleet but the consumer continues to face high prices in part due to a few state owned airlines being able to control prices through a regulatory framework that eliminates competition.
In most parts of the world, when the patent for a prescription or OTC drug expires, the price the patent holding pharmaceutical can charge drops drastically given the entry of generic competitors who have the opportunity to legally produce and market the drug under its generic name. In China, however, according to a colleague in the sales department of Johnson & Johnson’s pharmaceutical arm, the retail price of off patent, non-essential drugs

does not experience a drop after the patent expires and generic producers rush in. In fact, where the US producer usually immediately drops the product line due to the inability to reap large profits from the drug, the former patent holder in China will tend to raise the price! Why? The Chinese consumer by and large doesn’t trust generics given the reputation for substandard drug producers to use shoddy, carcinogenic inputs.
To give a fourth example, last month I was talking to a friend about purchasing a Volkswagen Tiguan, the inexpensive sister to the high-end Volkswagen Touareg SUV – both models are seen in ubiquity on the streets of any major Chinese city. That friend quickly discouraged me from pursuing the Tiguan SUV (which sells at around
$25,000 in the US but retails at around $35,000 in China) because on top of the high cost, car dealers, who collude across a city market to control prices, will charge an extra premium of up to $10,000 for cars that are in high demand! He said I’m better off buying a cheaper KIA or Nissan SUV (which are also seen in ubiquity on the streets). In an environment of perfect competition, the automobile consumer can bargain down the price of a car sale with a dealer, but in China the consumer is held hostage.
These high prices persist for a variety of factors, but the golden thread tying these four examples together and keeping prices high is simply that the Chinese consumer is willing to pay the exorbitant price offered for these goods.
Despite recent regulatory efforts, local governments in China and officials employed therein continue to take advantage of public funds to purchase things like cars, airline tickets, and houses. I posit that the aggregate purchasing power of this cohort, who cares little about the high cost of the transaction by facing a soft budget constraint, is able to prop up prices high above a fair market level. Thus the car dealer when faced with two customers, the average Chinese household and the government official, will consistently sell to the government official at the high price unless the Chinese household chooses the pay arbitrary premium. Last year an audit was performed at a government unit that a close friend works for, and he revealed to me that his employer had in its fixed assets inventory a fleet of 72 cars, but only 35 could be accounted for. The rest were in the personal unchecked use of government employees and their relatives. Extend this example across the tens of thousands of government units in China and a powerful and elite buying force with nearly unlimited funds at their backing emerges. No wonder car dealers continue to collude and charge premiums on sales.
Generally speaking, every Chinese male is required by social norms to own a home and hopefully an automobile before getting married. Said simply, the demands of society can create a high demand for high priced items of which consumers have little choice but to purchase if they want to gain upward mobility. So with such high demand, are new goods flooding the market to meet this demand?
Observers, especially foreign ones, can, given the scale of new (and often empty) housing developments and the massive traffic jams, can easily be confused that markets are at equilibrium or perhaps even saturated. To provide analogy, my American students often make the erroneous generalization that all Chinese people eat out at restaurants all the time because the thousands of restaurants in Beijing are usually packed at dinner time. But a city with nearly 20 million of people would require more than 100,000 restaurants to feed more than half of the population. Beijing has a lot of places to eat, but not that many.
Extending this to the real estate sector, let’s assume that, by and large, households are only buying newly built high-rise homes and that these developments are exclusively built in the cities. Assuming half of China’s households are settled in urban areas and making another liberal assumption that newly built luxury housing complexes make up 50% of urban housing. These assumptions come together say that despite the feeling by urbanites that new housing is going up everywhere only 25% of the population can be supplied with new housing despite the high demand for new housing. High demand and low supply means high prices and that’s certainly what we observe. Indeed, Steven McCord, a real estate researcher at Jones Lang LaSalle has calculated that commodity housing built 1995 to date has only accommodated 20% of China’s urban population, a more accurate discovery that loosely fits my back of the envelope analysis above.
It’s simple economics: high aggregate demand and low aggregate supply drives high prices. So what this means is we’ll continue to see more new housing go up in cities especially as the pace of urbanization and rural to urban

migration picks up in the next decade. Extending the example above to cars suggests that traffic jams will never be alleviated. In other words, what we are seeing now in terms of housing provision and cars on the roads is just the tip of a massive iceberg comparing to what the future may bring assuming the economy chugs along without a major bump or crisis.
So with supply growing to meet demand, won’t the high prices fall? With soft budgets in government units, a quality control gap, and a dearth of viable investment options outside of buying an apartment prices are likely to remain high.
If determining factors of the four examples above persist, producers will continue to reap high profits, and the government regulator will continue to bring in high tax gains. Sustainable economic development into the future requires China to make a transition to a robust consumer-based economy and a strong welfare state that wisely allocates tax revenues and redistributes income. High incomes to producers and officials who take advantage of taxes to line their pockets (and garages) prove as obstructions to this necessary transition and create an unlevel playing field.
Moving forward, government regulation must increase quality monitoring in all sectors and to drop demand in luxury housing, reformers must increase the provision of low and middle income housing AND widen channels for household saving so that savers look outside of the housing market for investment opportunities. I’ve never been one to advocate excessive liberalization, but without a reform package that expands private markets, curbs corruption, hardens budgets, and delivers meaningful tax reform, high prices will persist and the Chinese consumer will continue to pay a lot more for less.
by Fauna on Monday, March 11, 2013 http://www.chinasmack.com/2013/pictures/thousands-of-dead-pigs-found-floating-in-shanghai-river.html
From NetEase:
Over 3000 Dead Pigs Fished Out of Huangpu River, Officials Say Water Quality Normal
March 9th, a large number of dead pigs appeared floating on the Huangpu River surface in the Songjiang district of Shanghai. As of March 11th, already over 3000 pigs have been fished out. These dead hogs mainly come from areas upstream of Shanghai. Shanghai’s Water Department says the tap water quality “data is normal” in
Songjiang district and in accordance with relevant standards.
[Above] March 10th, Shanghai Huangpu River, numerous pigs floating on the surface of the river.
March 10th, Shanghai Huangpu River, sanitation workers fishing out the dead pigs.
March 10th, Shanghai Huangpu River, sanitation workers dragging away the dead pigs on the shore.
On Sina Weibo:
@ 头条新闻 : Online chatter today: Over a thousand pigs unsatisfied with pollution collective jump into the Huangpu
River. March 9th, a large number of dead pigs appeared floating on the Huangpu River surface in the Songjiang district of Shanghai. At present, already over 1200 swine have been fished out, including amongst them suckling pigs as well as adult pigs weighing over hundreds of kilograms. It has been tentatively determined that these dead pigs come upstream from the Zhejiang province area. Netizens joked about this, claiming these pigs had “angrily jumped into the river” because they were unhappy with pollution.
From Sohu:

Shanghai Huangpu River Floating Pigs Test Results: Porcine Circovirus Detected
China Exclusive Report: Results of Tests on the Pigs Floating on the Huangpu River: Porcine circovirus (PCV) detected, not yet major outbreak. The Shanghai Municipal Agriculture Commission announced on the 11th that the dead pigs that were floating in the Huangpu River have undergone sampling and testing, with one sample testing positive for porcine circovirus, and the other specimens all testing negative. Porcine circovirus disease is caused by porcine circovirus type 2, a disease that has broken out relatively frequently in recent years, and not considered a zoonosis disease [one that transmits between humans and animals].
Comments from NetEase:
空亦空 [ 网易广西南宁市网友 ] ：
Celebrate, at least they weren’t manufactured into ham and sausages.
网易云南省昆明市网友：
This many dead pigs, why did they rot to this point before they were discovered…? Poor sanitation workers.
网易浙江省台州市网友：
Actually, it’s very simple. As long as the environmental protection bureau chief dares to drink [the water], then we’ll dare to drink [the water], as well as believe you guys. zhoufenglk [ 网易上海市网友 ] ：
This place does indeed have a lot of dead pigs. I often come to this place to hunt pheasants and see dead pigs all over the the riverside. zdwyunjie [ 网易江苏省常州市网友 ] ：
If it weren’t for the media exposing this, I bet they’d all still be soaking in the water and the masses would would be none the wiser about the water they’re drinking!! Government departments are always about belated action!!
I’m also confused as to why housing prices are not only not falling but actually rising! yhdtbl [ 网易北京市朝阳区网友 ] ：
Shanghai people truly are blessed, even the water they drink is full of nourishment.
It must be great to be Shanghainese.
网易浙江省嘉兴市手机网友：
I’ll pay 10,000 RMB for the water quality technician to drink the Huangpu River water.
网易重庆市网友：
If he dares to drink it, then I’ll dare to go streaking naked, and guarantee full nudity [of breasts, crotch, and buttocks].
弄一弄 [ 网易山东省济南市网友 ] ：
If these dead pigs aren’t sent to some unscrupulous processing factory, we can “burn incense” [and thank the heavens for our fortune]~~ ||| Sigh~ these days our hopes/expectations are all so low…

ttii77 [ 网易河北省石家庄市网友 ] ：
“Whether you believe or not, either way I believe it.”
网易上海市浦东新区手机网友：
How come we don’t see an investigation being launched? Don’t tell me throwing away diseased dead pigs like this isn’t illegal enough?
网易辽宁省辽阳市网友：
Why were they thrown into the river? Was burying them not okay? Some people’s characters truly are lousy!
走错了地方 [ 网易上海市杨浦区网友 ] ：
If that 3000 government officials died in that river, it’d be an occasion more festive than Spring Festival.
网易广东省广州市手机网友：
I remember reading a book about a young American guy who had pissed in the lake next to his campsite, and while listening to the radio on his return journey, heard that the entire town had stopped the water, because this guy had pissed in the reservoir.
网易河南省开封市网友 [ 各抒己见之我见 ] ：
If the water quality is normal like this, we can only imagine what kind of water our citizens are drinking normally.
网易广东省深圳市南山区网友：
1200 obviously not normal farm pigs, probably from some pig farm. This should be investigated, and fined to hell.
Dead pigs should be buried deep, so who TMD just dumped them into the river?
Comments from Sohu:
凉拌菜的微博 :
Why did this batch of pigs die? Because they went to the river to drink water, also thinking at first that the water quality is normal, but then they all died.
给力部 :
Thousands of dead pigs soaked and immersed in the Huangpu River for tens of hours and the water quality is still within standards? It can only show that our water quality standards are set too low.
米老鼠给力 :
Recommend tossing in ginger, Chinese cinnamon, Sichuan peppers, fennel, yellow wine, sweet and sour, soy sauce, etc. and then stir it together [to make a broth/soup]…
搜狐新闻客户端网 :
Investigate the source, fine the source, kill the source. When it comes to all of the problems in China, the one thing that is feared is that they’re handled at the dining table [through corruption with government officials].

天行健 :
2012 the price of pork continues to drop, and no one in the government shows any interest. However, when pork prices go up, the country begins both regulating prices and importing pork, deathly afraid of pig farmers making any money. And entering 2013, pork prices further drop to 6 yuan while various kind of raw materials continues to increase in price. One pig sold is still a loss of about 300 [RMB]. Who would have the heart to continue on this way? This disease can be protected against and controlled, but it requires investment/money, and under the circumstances of already operating at a loss, who would be willing to make such a large investment/expense?
Feeding them to maturity is losing money, so might as well just let die and save the trouble. Plus, the government’s pig subsidy just so happens to be reversed. When prices are low and subsidies are needed, they don’t subsidize. When the prices are high and subsidies aren’t needed, they subsidize recklessly. Right now pig farmers are losing money and the government doesn’t do anything. By the time mother pigs are massively slaughtered and pork prices increase a large margin, it’ll be too late. Yet another vicious cycle!
搜狐新闻客户端网友 :
That many pigs dumped in the river and they aren’t able to find out who did it, sigh! Only by determining the source can we determine just what happened with these pigs and whether or not there will be pollution or contamination to the river water…
搜狐新闻客户端网友 :
Big city Shanghai, simply different, so good it’s become disgusting. Beijing too is not bad, with their sand storms and smog. What’s the use in making that much money? Can health be purchased?
搜狐新闻客户端网友 :
I still don’t understand, why not buried? Rotting in the water like this, just thinking about it is disgusting. [Does the person responsible] have something against the people of Shanghai?
DECEMBER 12, 2012 http://mkshft.org/2012/12/pleasure-hacking/
200 computer screens, stationed one foot apart, flicker through smoky air and fluorescent lighting. Some have as many as four males huddled around with their arms hanging on each other, mostly shirtless. It’s 11pm on
Thursday, and even though discounted night hours haven’t started, the Internet cafe is near capacity. Occasional bursts of anger or joy from gamers sound out above the low chatter.
Lao Bing takes a sip of beer and pulls out a cigarette. His shirtless body is frozen in a perpetual slump, his chest hanging over the keyboard. Minuscule movements can be detected in his wrist as he moves the mouse over a rubber pad displaying an ad for affordable abortion services at a nearby hospital.
He types hurriedly into a keyboard crusted with crumbs and dirt. “Damn not working.” He tries again. “Down also.”
Lao Bing is doing what most males at the Internet cafe are doing, have done, or will be doing later on that night—searching for porn. Users across the world are drawn to this corner of the infobahn; some estimate that porn accounts for a full third of Internet bandwidth.
But finding porn in China isn’t as easy as finding a movie. Like the fleeting urges they inspire in viewers, sites regularly pop up and quickly fade away from the ethereal glow of the screen. The continuing hunt speaks to the

drive for openness in its various forms.
The foreigner’s image of China often includes Communist Party officials using censorship tools to prevent citizens from accessing and spreading political messages. We don’t think of people like Lao Bing, chilling in a room with hundreds of males looking at porn.
Authorities have capriciously enforced a pornography ban since 1949. But when China connected itself to the
World Wide Web in 1994, authorities found themselves with a new challenge: censoring the relentless availability of pornographic websites.
Over the last 18 years, police stations have staged assemblies warning youth of the dangers of porn and the
Internet. Anti-pornography posters with cartoon figures of school boys are in practically every cyber cafe.
Announcements of large sting operations closing down tens of thousands of pornography sites at a time are routine.
A few times a year, the government-controlled media reports large-scale arrests of pornography site administrators. Looming in their collective memory is the 2005 life sentence of Chen Hui, who ran the nation’s largest site. But all the denunciations, moral policing, and incarcerations have not deterred a nation of males (the gender ratio at birth is about 120 males to 100 females) from porn consumption.
Another male, Tai Ge, is not like most of the cyber cafe patrons, who largely didn’t attend college. He graduated four years ago from one of China’s top universities. Tai Ge grew up in small room with his grandfather in the
Northern countryside. Like most high-achieving rural students, he lived at a boarding school a few hours away in a room with 15 other males. Until college, he believed his teachers, whom the government trained to tell him the
Internet is bad for students. Their version of the Internet was filled with games and misinformation.
Tai Ge didn’t find his way onto the Net until college, where a dorm mate had a computer and knew how to access porn. “Six of us would huddle around him watching the videos on his desktop screen.” When Tai Ge got his own laptop, he was most excited to watch porn by himself. “That’s when I learned how to masturbate.”
His dorm mate taught him to log onto the server and browse the carefully labeled videos to download overnight:
“Japanese Nurse Gets Fucked by a Doctor,” “Student Teaches Aio Sora How to Give a Blow Job” (the Japanese brand is popular among students).
These videos were also being downloaded by thousands of others at his school. Users spend a significant amount of time downloading because they prefer to watch porn offline. Since producing and hosting is punishable by law, web admins regularly change domain names and servers, making their sites unstable. There’s no guarantee that the video someone sees today will still be there tomorrow. The best option is to download.
Downloading has become common practice throughout China; not just porn sites vanish and shift. Websites, comments, and blog posts can disappear if they catch a censor’s eye and are seen as embarrassing or threatening to the Communist Party. Responding to unstable URLs, a culture of caching web content has emerged through techniques like screenshotting.
Chinese netizens are incredibly conscientious of screenshotting. The most popular instant messaging client in
China, QQ Chat, integrates a screenshot button directly below the typing field. A glance at any Weibo microblog
(think Twitter) spat between popular intellectuals reveals attached screenshots of past conversations. In social media donation campaigns, users screenshot their bank account transfers to the recipient’s account.
Screenshotting isn’t just a technical habit; it’s an ingrained cultural technique.
But Tai Ge doesn’t just download; he also pays it forward by uploading. Content is made readily available by thousands of contributors who, like Tai Ge, have spent hundreds of hours and gigabytes downloading porn from the Internet and then re-uploading it to a university-hosted server. He uploads any new porn he finds.

Tai Ge and others extend their sharing to the massive scale synonymous with China itself. They participate in
Human Flesh Search Engines, crowdsourcing communities that scour Internet data sources to expose public corruption. Others are involved in movie and television fan translation teamsthat compete to translate Western series like Sherlock Holmes and Big Bang Theory overnight.
It may be in the quest for porn that many male college students learn the fundamental lessons about what makes the Internet work: sharing and openness make collaboration possible. These qualities are rare in an education system that rewards individual achievements over teamwork.
While political censorship and digital surveillance continue to cause suffering, most people in China don’t use the
Internet to fight back directly; they use what brings them pleasure. And in spite of illegality, there’s a big gap between the government’s communication and its execution. Some citizens find freedom in exploiting this gap and others in closing it.
MAR 11 2013 http://www.theatlantic.com/china/archive/2013/03/a-very-brief-recent-history-of-dead-pigs-in-chinese-rivers/
273909/
Today's discovery of 3,000 dead pigs in Shanghai is shocking- but it isn't the first time this has happened in China.
It isn't surprising that a story involving several thousand dead pigs surfacing in a Shanghai river attracted a lot of alarm, not least from the locals who depend on the river for their drinking water. But lost in the shuffle is that this isn't the first time such a "dead pig epidemic" has happened in China. In fact, these cases appear to be happening more frequently than before.
In 2009, the Epoch Times reported that hundreds of dead pigs were found floating in a river near Fuqing, China, consisting mostly of "piglets wrapped in sacks". The next year, in nearby Guangdong Province, 72 dead pigs reportedly contaminated a river near Foshan.
So why does this keep happening? Here's what comes to mind: as pork is a major staple in Chinese diets, there are just a lot of pigs in China. These pigs, being farm animals, are susceptible to illness, and when they die
Chinese farmers have a tendency to throw them in a nearby river rather than dispose of them properly. In China, where concern about littering and hazardous waste is a relatively new phenomenon, this practice remains depressingly common.
But the bigger scandal might not be the dead pigs but rather the government's slowness in reacting to them. As
Bloomberg's Adam Minter notes, officials have had plenty of time to warn the public of the health scare, but many people still feel like they've been left in the dark. This, more than the sight of the poor pigs themselves, is the true source of outrage in China.
3 MAR 11 2013 http://www.theatlantic.com/china/archive/2013/03/2-800-dead-pigs-in-a-shanghai-river-how-did-this-happen/
273892/
And what does it say about China's water supply?
Over the weekend more than 2,800 dead pigs were fished out of the Huangpu River that bisects Shanghai--and

is a source of drinking water for the city's 23 million residents.
The story highlights a seldom-covered source of China's water pollution problem: agricultural waste. Under
Chinese law, farmers are required to take carcasses to their village or town's community disposal site, or bury the animals with disinfectant, but many don't. And as of 2010, agricultural pollution, which includes livestock and produce, surpassed industrial waste as China's main pollutant.
In fact, waste related to animals made up about 90 percent of organic pollutants in China's water, according to
Wang Dong of the Chinese Academy for Environmental Planning. In a 2012 study from Huazhong University, waste from pigs, cattle, sheep, and other animals left 228,900 tonnes (252.6 tons) of biochemical oxygen demand, a standard measure for organic pollution, in part of the Han River in central China. Now, about 15 percent of
China's major rivers are too polluted for safe use, not just from local factories, but farmers who throw animal carcasses and waste into nearby streams.
Chinese residents are well aware of the country's water pollution problems. A Chinese businessman recently offered a local environmental official 200,000 RMB ($32,000) to swim in a dirty river in Zhejiang province. The issue caught fire last month when investigative journalist Deng Fei invited people to post photos on Sina Weibo of polluted waterways in their hometowns.
And the health consequences of this trend can be severe. For example, in 2011, a farm was found throwing duck excrement into a river in Henan province, giving thousands of people diarrhea.
But while Shanghai authorities are still investigating the source of the dead-pig spill -- which some Shanghai residents proposed calling " hog wash" -- Chinese officials say there's no sign of any disease outbreak from the floating porkers. Porcine circovirus, the suspected culprit in the mass pig death, is probably harmless to humans, they say.
However, residents are already worrying about what they're not being told -- hardly surprising, given the utter lack of credibility the government inspires in protecting its people from sometimes lethal contamination of food and drink sources. A blogger in Wenzhou noted on Sina Weibo that tens of thousands of pigs had died recently of swine fever, and that the authorities only reported the Huangpu River pig pollution once photos of the floating carcasses, er, surfaced on the internet. "They only found 1,200 pigs," he wrote, referring to an early tally. "Where did the remaining tends of thousands go"?
March 11, 2013 | by Tabitha Speelman http://www.tealeafnation.com/2013/03/from-one-hub-a-view-of-chinas-worldwide-underground-milk-powdernetwork/
China’s milk powder supply is once again making headlines around the world. On March 1, a Hong Kong emergency export limit restricting travelers to mainland China to a maximum of two cans per purchaser became law. The measure is a response to the non-stop stream of suitcases jam-packed with milk powder passing through the Sheung Shui and Luohu border crossings between Shenzhen and Hong Kong, a practice that was previously quietly condoned. China’s demand for foreign milk powder surged after a 2008 milk powder scandal, in which at least six children died and more than 300,000 got sick from milk laced with melamine. Hong Kong’s wide range of foreign milk powder brands is considered more trustworthy than even the foreign imports available in Chinese supermarkets.
From the Chinese mainland, deep anxiety

The measure has caused widespread debate, both on HK-mainland relations at large and mainland food safety in specific. Even with the export restriction and a severe maximum penalty of 500,000 RMB (about US$80,000) or two years in prison in place, some Chinese mainlanders still consider raising their child on Hong Kong milk powder.
As a widely-discussed widely-discussed post on Sina Weibo, China’s Twitter put it:
Comprehensive response strategy to the HK milk powder purchasing restriction: when you get pregnant, go to
Hong Kong and buy three cans of milk powder. When you get caught at the border and are unable to pay the
500,000, you will get sentenced to two years in jail. There, you are safe from gutter oil [a cheap recycled oil illicitly used in some Chinese foods]. When you give birth, your child automatically receives Hong Kong citizenship and the HK government will provide you with milk powder. After two years you return to the mainland, and when your child turns 18 you all move to HK to lead a happy middle-class life.
For Chinese citizens, and especially young parents, milk powder safety—and food safety in general—has been an incessant worry, with new small-scale scandals erupting every few months, including a recent finding of some baby formula tainted with mercury and aflaxotonin, a highly carcinogenic substance. A new food safety law and central government statements claiming that 99% of Chinese dairy products are safe have been unable to restore consumer trust. Middle-class parents choosing to feed their child foreign milk powder might spend anywhere from
25-40% of their monthly salary (at an average price of 200.7 RMB per kilogram in 2012).
A supply chain that straddles the globe
According to official figures, pricey foreign brands currently account for 60% of the Chinese market, but these numbers exclude products smuggled from Hong Kong, and the increasing amounts of milk powder sent through global informal networks. Even including transportation costs, such milk powder tends to be 20-40% cheaper than the sticker price. The grassroots system is fueled by the increasingly diverse and widespread migratory paths of Chinese students and young professionals, who send milk powder to friends and relatives or set up small trading businesses.
Comprehensive statistics are impossible to gauge, but it is but it is very common to encounter Chinese people overseas who have been asked to send back milk powder to a friend or relative, or who know others that engage in this activity to make money. This is especially true in countries that are well known for their dairy products, such as New Zealand, Australia and European countries like Germany and Holland. No systematic research of these worldwide milk powder flows exists, but a map circulating on Hong Kong anti-mainland forums showing screenshots from media coverage of empty shelves around the world indicates the scale.
On a major online hub of the Chinese community in the Netherlands called, the BBS forums are filled with suggestions on how to get started, from where to mail large boxes—mailing through Belgium and Germany is cheaper—to the cheapest stores. Although advertisements are prohibited on the website, the webmaster has a difficult time deleting all the messages offering to buy or sell milk powder, particularly because the site’s users will swap in homophonic characters to evade censorship.
“Asian customers,” please observe the limits
In Holland, as in Hong Kong, tensions surrounding milk powder shortage in local supermarkets have resulted in similar –albeit less rigorous—restrictions. In the past months, many supermarket chains and pharmacies have started to limit infant milk powder sales. They place signs by the shelves explaining that this is due to growing demand from “Asian customers” or because “export to China is rapidly increasing.” The signs tell a story of an increasing Chinese demand: whereas stores started with a limit of four cans per consumer, most supermarkets restrict customers to two or three, while a March 5 local newspaper article shows a picture of a sign stating only one box per customer is allowed.
While in theory the restriction applies to all customers, when this Dutch reporter and Chinese researcher Ma Xiao repeatedly attempted to buy four cans, results at the counter sharply diverged. When this reporter was stopped, she was met with questions like, “You are not the problem, but we have to be consistent. Why don’t you come

back for more tomorrow?” Ms. Ma, on the other hand, was directly asked whether she planned on exporting her purchase or was simply denied the purchase.
A Dutch supermarket manager in a large urban supermarket, who gave his last name as Bakker, knows all about
Chinese food scandals. “Yes, of course we closely follow these developments,” he said. So far he decided against any signs. “That would be too discriminating. But we do want to protect our local customers. This is not about profit—our milk powder is subsidized by the Dutch government. It is about societal responsibility.” He understands the motivations of Chinese traders, but says Dutch sellers have been forced to these measures by “professional networks of Chinese extended families that systematically buy up supplies within a 10 km range.” While his store has noticed increased milk powder sales for years, the situation has become very noticeable in the second half of
2012, “possibly because the traders are becoming more organizationally sophisticated.”
Those who are just buying milk powder for personal use feel the stares too. They are concerned about how the signs, as well as negative coverage in local media, are affecting the image of Chinese immigrants in the
Netherlands. “Those milk traders make us all lose face.” Online, Chinese-language users of the BBS forum
Gogodutch.com—who appears to be citizens of the Netherlands–complain about “locusts buying 8 or 10 cans at a time.” Or: “I see them get their milk powder without paying attention to the sign and being stopped by the counter. They don’t understand Dutch or English and just stand there, insisting on the purchase. It is so f*cking embarrassing.” Others point out that trading subsidized milk powder (average price of 90 yuan/tin) bought from
Dutch supermarkets is equivalent to tax evasion at the cost of Dutch babies. The webmaster repeatedly tries to bring down the temperature of the discussion: “I understand that those who are not selling milk powder feel frustrated to meet with underserved discrimination. … Complaining is ok, but please don’t personally attack people. I don’t have the time to go through every message. Thanks for your cooperation!”
Traders as helpers?
The milk powder traders defend themselves too. Many see themselves as helping out Chinese parents and are undaunted by the new restrictions. As part-time seller Zhang Lijing puts it: “This just means I have to go to a few more stores—selling milk powder is physical labor.” PhD student Xu Ninggang sees his milk powder trading business (registered with the Dutch Chamber of Commerce) as a way to simultaneously learn about Dutch society, experiment with doing business and expand his personal and professional network in China. His company sells milk powder through Chinese e-commerce site Taobao as well as to smaller stores in middle- and small-sized
Chinese cities in which there is still much unmet demand.
Xu explains why the Dutch especially felt the shortage in 2012: “It is the Dragon year baby boom”—and predicts that global trading volume will drop as China’s food safety situation improves and European milk production regulations tighten supply by 2015. Xu notes that Chinese traders turn to supermarket supplies because buying directly from dairy producers, as he does through the help of a local partner, is made very difficult by Dutch bureaucratic obstacles.
Winning back public trust in China’s food safety system will take time. Chinese customers who have turned to personal ties and the global market have gotten used to paying high prices for basic needs. Xu continued, “If my milk powder is too cheap, people do not trust it. … As a small trader, too, it is hard and risky work with a very uncertain profit margin. In the end, it is foreign large-scale dairy corporations like Nutrilon and Friso that profit.”
In this way, the Chinese milk powder crisis is a case study of larger trends. Within China, it is a marker of social status and the growing rich-poor gap. When asked what happens to the kids of parents who cannot afford foreign goods or who do not have personal connections abroad, Xu’s answer was brief: “They get sick.”
Globally, the milk powder issue illustrates China’s prominence in an increasingly interconnected world. When New
Zealand issued temporary trade restrictions in 2012, Zhang’s business selling Dutch milk powder increased.
Whether in Hong Kong or the Netherlands, Chinese milk powder trade results in tensions at a macro level between an open market, local business interests and protection of local citizen rights. On an individual consumer level, too, issues of discrimination and identity conflict arise and are waiting to be addressed. The tensions result in different

visions for the future. A Hong Kong microblogger suggested that the city “set up baby formula as a pillar industry.”
In Holland, however, a Chinese commenter “look[s] forward to the day when we will put up export restriction signs in mainland supermarkets.”
Ma Xiao contributed research to this article. All names have been changed at the request of the interviewees.