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Bo Xilai and The Cultural Revolution

Posted: 22 Jun 2012 01:01 AM PDT

As China's top leaders decide the fate of disgraced former party chief and one-time Politburo Standing Committee hopeful , and as observers debate his legacy, Chris Buckley looks back to Bo's childhood and explores how the chaos of the Cultural Revolution may have shaped his rise and fall. From Reuters:

At the start of the , the man at the centre of China's worst political in decades was a student at the Number Four High School in Beijing, an elite cradle for "princelings", the sons of Communist leaders who had risen to power with Mao.

The school became a crucible for conflicts unleashed with Mao's call to rebel in the name of his unyielding vision of communism. The era paralyzed the country politically, trigpicturgering social upheaval and economic malaise.

One day in 1967, Bo and two brothers were paraded at the school by an angry group of student "Red Guards", and accused of resisting the Cultural Revolution just as their father, Vice Premier Bo Yibo, had been toppled along with dozens of Mao's former comrades and accused of betraying their leader.

Their persecutors twisted their arms behind them and pressed their heads nearly to the ground while pulling back their hair to expose their faces, Duan Ruoshi, a fellow student at the Number Four school, wrote in a memoir published last year.

"Despite the shouts of condemnation from all sides, Bo Yibo's sons exuded defiance and twisted their bodies in defiance against their oppressors," Duan wrote in the memoir published by "Remembrance", an online magazine about the Cultural Revolution.

The ordeal was a lesson for Bo in the capricious currents of Communist Party power, which only a few months before seemed to promise him and other princelings a bright future as inheritors of the Chinese revolution.

The accounts in the report serve as a reminder that Bo has seen his share of turmoil in the past and any jail sentence that might result from the present investigation would not be his first. One retired academic who overheard comments from Bo's wife's sister told Buckley that Bo had "been through much worse than this. He's been through the Cultural Revolution. This is nothing."

Separately, The Wall Street Journal profiles Chinese Billionaire Xu Ming and details his ties to the Bo family from their time in , ties which likely led to his detention shortly after Bo's sacking in March. Xu's fortunes have risen and fallen along with Bo, a common feature of the grey area between Chinese business and politics:

Many business leaders in China rely on close relationships with party officials, who have sweeping powers to set policy, allocate government contracts, distribute credit from state banks and control the police, media and courts. The business leaders often nurture these relationships with various gifts and favors.

Such relationships rarely are exposed, under a system in which the party forbids public scrutiny of its affairs. Business ties are often hidden through shell companies and offshore vehicles.

The close relationship of a businessman with a political leader "was not anything unique to Bo Xilai," said Victor Shih, an expert on Chinese politics at Northwestern University. "It happens at every level of government. Find me a Chinese mayor who doesn't have these special relationships."

The risk the entrepreneurs run is that when the party does periodically make an example of someone, as it has now with Mr. Bo, the person's associates and relatives are compromised as well.

See also a report, via CDT, that Bo's wife has confessed to the of British businessman .


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Report: Gu Kailai Confesses to Heywood Murder

Posted: 22 Jun 2012 12:05 AM PDT

The Asahi Shimbun is reporting that Gu Kailai has confessed to killing British businessman Neil Heywood to keep him from revealing the details of her large and illegal overseas remittances, according to sources with knowledge of the investigation:

The sources, who have read an interim investigation report circulated among senior party officials, said Gu, 53, admitted to killing her former associate after feeling "driven into a corner" by the investigation into her financial dealings and had provided a specific explanation about how she killed Heywood.

The General Office of the Communist Party Central Committee, which serves as a secretariat for the party's General Secretary –who is also China's president–drew up the interim report and the sources said officials have decided to indict Gu following her confession.

The authorities are also investigating whether Bo, 62, was aware of his wife's deeds, the sources said.

They have detained dozens of people associated with Bo–including his chauffeurs, close aides and secretaries from his time as mayor of , Liaoning province–and have also questioned hundreds of people who dealt with him, including corporate executives and entertainers.

They believe Gu was receiving undeclared income from the early 1990s and that she transferred $6 billion to accounts in the names of relatives and acquaintances in the , Britain and elsewhere to conceal her illegal earnings. Heywood is thought to have helped her open accounts and exchange currencies.

Meanwhile, the Cambodian government announced that it will not extradite French architect Patrick Henri Devillers, who reportedly has ties to the Bo family and was arrested last week at China's request. A Cambodian Interior Ministry spokesman told Bloomberg Businessweek that Devillers has yet to be charged with a crime:

" decided to keep him in ," he said by phone today. "Concerned authorities are investigating into the case right now."

China, Cambodia's biggest investor, is investigating accusations that Bo committed disciplinary violations in relation to his wife, , who was arrested in April on suspicion that she was involved in the death of a British businessman. Devillers, an architect, had business ties to Gu, Britain's Telegraph newspaper reported in April.

Cambodian authorities earlier said they would wait for China to submit evidence on Devillers before making a decision on whether to send him to Beijing. Under the two countries' treaty, China has 60 days to provide evidence of a crime and Cambodia then has 60 days to respond, according to Khieu Sopheak.


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Photo: Apartment building, Shangqiu, Henan, by Mark Hobbs

Posted: 21 Jun 2012 09:58 PM PDT

Apartment building, Shangqiu, Henan


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Catchy Family Planning Slogans

Posted: 21 Jun 2012 09:24 PM PDT

Offbeat China translates many harsh family planning slogans from rural areas, which were collected by Netease.

The policy, better known as the one-child policy, has been set as China's basic state policy since 1980. For the past decades, China's countryside has been the most heavily-affected area. To maintain low birth rate and meet statistic requirements, local family planning officials have tried their best to come up with catchy slogans. Starting from 2007, China initiated the "Eraser" project to clear up these cold-blooded slogans and promote more humane ones. Nevertheless, many of these old slogans are well kept in people's hearts.

Most slogans are written in rhyme, and people are expected to remember them. Some include:

Today, you escape from the . When you come back, you will lose all you have.

Vaginal ring after the first child. Sterilization after the second child. Those with excess pregnancy will get and be sterilized. Those with excess children will be sterilized and fined.

And there is even a bilingual slogan in Uighur and Chinese from Xinjiang.

600 yuan reward and financial aid. To show love of the family planning policy.

See also: Abortion and Politics in China at Letters from China. Read more about the one-child policy via CDT.


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In Beijing, Succession Shuffle Begins

Posted: 21 Jun 2012 08:36 PM PDT

As China approaches a once-in-a-decade , and President prepares to retire from the later this year, Reuters reports that he may have already begun to take steps to retain influence by pushing ally and Beijing mayor as the capital's next party chief:

Guo Jinlong, 64, the capital's mayor since 2008 and a Hu ally, is tipped to replace Liu Qi, 69, as Beijing party boss at the municipal party congress that opened on Friday, the sources with ties to the leadership told Reuters, requesting anonymity because of the political sensitivity of leadership changes.

The city's party boss outranks the mayor.

If confirmed, Guo would be a shoo-in to join the party's decision-making Politburo during the leadership change at the 18th national party congress later this year, the sources said.

It was unclear when the Beijing congress would end and the announcement of the appointment made. The Beijing city government declined immediate comment.

The report notes that another possible choice as Beijing party boss is Hu Chunhua, who currently serves as the party's top official in Inner Mongolia.


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Hu Xijin on Guiding Public Opinion

Posted: 21 Jun 2012 02:46 PM PDT

Since 2010, the U.S. embassy in Beijing has maintained a Twitter feed with hourly readings. Beijingers distrustful of the city government's reports found ways to surmount the Great Firewall and access the embassy feed. Enormous discrepancies between embassy and local measurements, combined with a few exceptionally bad days of smog last winter, seem to have lead the municipal government to improve its monitors.

After the U.S. consulate in Shanghai started its own feed this month, China claimed that air quality monitors at any foreign mission are illegal. The U.S. insists its monitors are intended solely for the consular community, but that has not quelled Chinese government spokespeople. Nor do the authorities think America is solely to blame. Global Times Chief Editor excerpted his paper's June 7 editorial, "Confronting an Increasingly Active U.S. Embassy," in a Weibo post:

HuXijin: One of the reasons for the U.S. embassy's growing activity is its group of followers within China. Through the Internet, they enter into a tacit agreement with the embassy, while also helping the embassy disseminate information through traditional media. This is a normal manifestation of the diversity of Chinese society. We cannot think of the whole thing as a "U.S. embassy conspiracy." This is often China's own problem.

胡锡进: 美使馆之所以越来越活跃,原因之一是中国国内有了一批它的追随者,他们通过互联网与美使馆默契互动,也通过一些传统媒体帮助美使馆做传播。这是中国社会多元化的正常表现,我们不能认为这全是"美国使馆的阴谋",它在很多时候就是中国自己的问题。

Hu further commented on the article in a reply to his original post:

HuXijin: China must assiduously guid mainstream public views in [the effective production and convergence of voices] in the public opinion space, clamping down on and balancing pro-U.S. and pro-Western voices. In nearly every country, including countries heavily influenced by the U.S., it is difficult for the pro-U.S. view to gain support. In China, however, at least on Weibo, has become an exception. This is a bit abnormal, and its causes are worthy of deep consideration.

胡锡进: 中国一定要认真引导主流公共意见在舆论场的有效发声和汇合,使这些意见对亲美和亲西方的声音形成强有力钳制和平衡。几乎在所有国家,包括美国影响巨大的国家,亲美的声音都很难在舆论场获得强势,而在中国至少微博现在成了例外。这有些反常,也值得深思它的成因。

As usual, netizens had a field day with Hu. Below is a sampling of over 1000 comments. Read more on CDT Chinese.

Translated by Deng Bolun.

ArabianYouth: The reason is that you can speak relatively freely on Weibo, so the people's vehement dissatisfaction comes spewing out. All other websites have been harmonized. If you can't see dissatisfaction, does this prove a happy society? @HuXijin

阿拉博童童:成因就是,微博相对可以言论自由,人民对国家强烈的不满可发泄出来。别的网站全被和谐了,你看不到不满就表示社会多美好?@胡锡进

KiMzzzzzZ: The Chinese people aren't pro-U.S., they're pro-conscience, pro-truth.

KiMzzzzzZ:中國人民不是親美,是親良知,親真話

NiuniuLovesKaka: The mainstream you're talking about would be People's Daily, right? You should know, only on Weibo can you really sense the people's will. The People's Daily is just selling dog meat and calling it lamb.

牛牛爱卡卡:你所说的主流,是指人民日报吧?要知道,微博才真正体会民意,人民日报之流,无非是挂羊头卖狗肉

HappyIsEnough: Other than stirring up nationalist fervor among some people, what else can you do? Pursuing freedom and democracy is wrong. Pursuing better air quality is wrong. I know your children must have gone abroad. Are you f*cking evil? Turning a few normal young people into Maoists.

若是安好便足矣:你除了煽动部分人的民族气节,煽动人你还会搞什么,追求自由和民主有错,追求质量好点的空气有错,我知道你的孩子肯定是出国了,你他妈能不能这样邪恶啊,把一些正常的年轻人搞成一个个毛派

ChineseCitizen8: If I'm pro-U.S. or pro-West, that's my right. Do you want me be an [ass-licker] like you? @HuXijin

中国公民8:老子亲美亲西方是老子的自由,难道要老子和你一样舔菊花啊@胡锡进

KubiTranslatorLiu: We are far from being pro-U.S. We are looking forward to a better life. As for your comment "In nearly every country, including countries heavily influenced by the , it has been difficult for the pro-U.S. voice to attain a strong position," please have a look at the immigration policy on U.S. passport holders in the democratically elected governments of those countries heavily influenced by America.

苦逼的翻译刘:我们并不是亲美,我们是向往更好的生活,至于您说的"几乎在所有国家,包括美国影响巨大的国家,亲美的声音都很难在舆论场获得强势" ,请您看看那些美国影响巨大的国家的民选政府对持有美国护照的人的入境政策。

Zi-Fei-Yu: @HuXijin You use "clampdown" very well, very appropriately, just like someone who has practiced various [throat-clenching or wrestling moves]. Very good, and if you can't clamp down then couldn't you still remove our vocal chords for free? Perhaps it wouldn't be free. You still want fifty cents per bullet [for executions], isn't that right, Editor Hu? @SimaNan @KongQingdong @SongYangbiao @WuFatian

子-非-余: @胡锡进 钳制这个词用的非常好,恰如其分的好,如同练过锁喉功或者鹰爪功。很好,即使钳不住还可以给我们免费做个声带小手术吗?也有可能不是免费的,子弹还要五毛一颗呢,对吧,胡编?@司马南 @孔庆东 @宋阳标 @吴法天

GuyCalledBubbleBobble: Teacher Hu, if you tell us not to be pro-U.S., ask So-and-So's and So-and-So's "only children" to come back from the United States and then we'll see. You do the utmost to send your family to America and then ask the common people to not to be pro-U.S. Who are you fooling?

用泡泡龙名字的人:胡老师,如果说不要亲美,请某某的独生女儿,独生儿子等人从美国回来再说。拼命把自己家属送往美国,然后让百姓不亲美,你忽悠谁呢。

Laomu 1840: Your own [government] credibility is lacking, what use is it to blame others? What you should think about is why people don't trust you! Traditional media are all organized, it's only Weibo that can sound the voice of the people! Everyday it's guide this, guide that, and your way of thinking is always right. Now you're looking for volunteer Fifty Centers. In the end it's ordinary people who pick up the tab. Senior Fifty Center Sima Nan even secretly took his family and money to the United States. What else can you say???

老木1840:你自己的公信力差,怪别人有用吗?你应该反思的是老百姓为什么不信任你!传统媒体都是组织的,只有微薄才能发出人民自己的声音!天天引导这个引导那个,还是那种自己一贯正确的思维啊,雇佣五毛不要花钱啊,最后还是老百姓买单。资深五毛司马南都偷偷把家人和资产转移到了美国了,你还说什么呢???

Bickermate: #HuXijin, if the public opinion space needs your guidance, can you still call it mainstream opinion? Do you represent the mainstream? What's the point of equating truth and progress with the U.S. and the West? This kind of logic wouldn't come out of a dog's ass. The people will support whatever best promotes social benefit. If you don't want to see pro-U.S. and pro-Western, then build a democratic government. What's the use of playing dumb all the time?

只配抬杠:#胡锡进#,舆论场里需要你引导的那还能叫主流意见?你代表主流了?你把真实和进步等同于美国和西方干嘛?狗屁不通的逻辑。哪个更能促进社会利益,人们就亲哪个,不想看到亲美亲西方,就建设民主政府。整天装憨有什么用?


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Two Tibetans Self-immolate

Posted: 21 Jun 2012 02:28 PM PDT

Two more Tibetans have set themselves on fire in protest and one has died. The Washington Post reports:

One of the two men who self-immolated Wednesday in Yushu prefecture, a heavily Tibetan area in west China's Qinghai province, died and the other was badly hurt, the Tibetan Youth Congress and China's Xinhua News Agency said.

The cases add to about three dozen self-immolations over the past year in ethnic Tibetan areas of China in protest of what activists say is Beijing's heavy-handed rule in the region. The government has confirmed some but not all of them.

Xinhua said the dead man was a local herder and the survivor migrated from Aba prefecture in Sichuan province. The Tibetan Youth Congress said by email that 24-year-old Tenzin Khedup died and it identified the injured man as Ngawang Norphel, 22.

The group released photos of a charred body lying on the bed of a pickup truck and a video showing two men holding up Tibetan independence flags as flames engulf them. Both men stumble and fall in the seven-second video before one man rises and runs down the street in flames. High-pitched screaming can be heard but it's not clear who is making the sound.

Since 2009, dozens of Tibetans have used as a means to protest against Beijing policies in Tibet. Radio Free Asia reports on the two recent cases:

Carrying Tibetan flags and shouting pro-independence slogans, former monk Tenzin Khedup, 24, and Ngawang Norphel, 22, torched themselves in Dzatoe (in Chinese, Zaduo) township, Tridu (Chenduo) county, in the Yulshul (Yushu) Tibetan Autonomous Prefecture, the exile sources said.

Tenzin Khedup died on the spot while his colleague, Ngawang Norphel was badly burned and is in serious condition at a hospital, according to Lobsang Sangay, a monk in India who is from the Zekar monastery in Yushul, quoting eyewitnesses.

"They called for freedom for Tibet, the return of His Holiness the Dalai Lama to Tibet and for his long life. Both of them were carrying Tibetan flags in their hands at the time of the self-immolation," he said.

Authorities have waged a security crackdown in areas where self-immolations have been staged and have taken extreme measures to try to stamp out the protests. The Age reports:

The hotel and dozens of others have since been shut, petrol sales have been tightly restricted and dozens of people taken into custody, according to Tibetan sources.

Squads of orange-clad fire fighters, with fire trucks and four-wheeled buggies, have now joined clusters of police SWAT teams, riot police and paramilitaries in camouflage to prevent monks and Tibetan lay persons from making public spectacles of self-harm.

They are armed with fire hydrants – carried in hand and concealed in rows under fire blankets – as well as semi-automatic weapons and long black poles apparently designed for the safe handling of burning bodies.

Jokhang Temple has been stripped of most of its yak-butter candles, replaced by fluorescent lights, while identification checks are now required to enter monasteries and other public spaces.

Read more about protests by Tibetans and about recent self-immolations, via CDT.


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Analyzing the Five-Year Plan for Internet Development

Posted: 21 Jun 2012 01:48 PM PDT

Last month, the Ministry of Industry and Information Technology released a five-year-plan for . Rogier Creemers of China Copyright and Media blog has translated the document in full. Creemers has now also posted his analysis of the document:

The most important aspect of this document, however, seems to be security. Obviously, data leaks, phishing, privacy protection and viruses are real threats against the further development of Internet industries. At the same time, the Chinese government itself is often accused as being behind cyberattacks and online intelligence, something of which the US military, amongst others, seems very suspicious. Increased and clarity about China's objectives would be very useful in this regard. Also, security seems to refer to censorship. The plan calls for enhancing "emergency response systems" to deal with "sudden incidents" and strengthening institutional and legal frameworks to further strengthen Internet supervision and management. This continues the trend of recent years, where new national and provincial-level Internet offices were established. Furthermore, the trend of co-opting Internet enterprises into self-discipline seems to be strengthened.

Obviously, plans like these are general guidelines, and the interesting question remains how these objectives will be transposed into concrete policy and regulatory measures, especially in an environment changing as quickly as the Internet.


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China, Vietnam Escalate South China Sea Row

Posted: 21 Jun 2012 08:23 AM PDT

China may have gained a weather-induced respite from its rift with the last week, but the conflict steams on with its other neighbors. The New York Times reports that China's foreign ministry summoned the Vietnamese ambassador to protest a his country's new law claiming sovereignty to the Paracel and Spratly Islands:

'''s Maritime Law, declaring sovereignty and jurisdiction over the Paracel and Spratly Islands, is a serious violation of China's territorial sovereignty,'' a ministry statement said. ''China expresses its resolute and vehement opposition.''

The dispute between China and Vietnam over the law, which had been in the works for years, is the latest example of Beijing's determination to tell its Asian neighbors that the South China Sea is China's preserve.

The Chinese statement comes two weeks before a meeting of foreign ministers of the Association of Southeast Asian Nations in Phnom Penh, , which will be attended by Secretary of State Hillary Rodham Clinton and where the South China Sea dispute is expected to be high on the agenda.

China shot back diplomatically by raising the administrative status of a group of islands that includes the Spratlys (Xisha), Paracels (Nansha) and Macclesfield (Zhongsha), Zhongsha and Nansha islands, according to Xinhua News:

The council has abolished the county-level Administration Office for Xisha, Zhongsha and Nansha Islands, which was also stationed on Yongxing Island, the statement said.

A spokesperson of the Ministry of Civil Affairs said Thursday that the setting up of Sansha city will help to improve China's "administrative management on Xisha, Zhongsha and Nansha islands and their future development."

"It is also conducive to protecting the oceanic environment of the South China Sea," the spokesperson said.

China first discovered and named the reefs, islets and the surrounding waters of Xisha, Zhongsha and Nansha islands, and has exercised sovereignty control continuously over the area, the spokesperson said.


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Rare White Paper Published on Rare Earths

Posted: 21 Jun 2012 07:59 AM PDT

China's State Council on Wednesday issued its first white paper on the controversial rare-earth metal sector, hailing its developmental achievements but also acknowledging the environmental consequences of and promising tighter standards for its mining practices. China Daily published the full text of the document:

China is among the countries with relatively rich rare earth reserves. Since the 1950s, remarkable progress has been witnessed made in China's rare earth industry. After many years of effort, China has become the world's largest producer, consumer and exporter of rare earth products.

While bringing benefits to mankind, the exploitation of rare earth has brought about increasingly significant problems regarding this resource and the environment. In the exploitation and utilization of rare earth, the rational utilization and effective protection of the environment pose common challenges for the world at large. In recent years, China has taken comprehensive measures in the links of mining, production and exporting of rare earth goods and strengthened efforts for the protection of the resource and the environment, endeavoring to ensure a sustainable and healthy development of this industry.

With the in-depth development of economic globalization, China is involved in more extensive international exchanges and cooperation in the field of rare earth. Always honoring the rules and living up to its commitments, China has provided the world with large quantities of rare earth products. It will continue to follow the rules, strengthen scientific management of this industry and supply rare earth products to the global market, so as to make its due contribution to the development and prosperity of the world economy.

For some time now, some countries have been particularly fretful about the situation of China's rare earth industry and related policies, doing a lot of guesswork and conjuring up many stories. We hereby give a presentation about China's rare earth industry in order to further provide the international community with a better understanding of this issue.

The white paper likely drew scrutiny from China's trading partners, specifically the , European Union and , who filed a WTO case in March to protest the export quota system China enforces on the rare earth industry. China defends its tight control over rare earth as a byproduct of its willingness to take on the environmental burden of extraction, and the white paper not only addressed the environmental angle extensively but also challenged foreign estimates of China's reserves. Most importantly, but perhaps not surprisingly, it also gave no sign that China would lift export quotas. Xinhua reports that the chief of the Rare Earth Office said that China meets global market demand despite the export controls, while another official defended the policy in a news conference, according to The New York Times:

"The protection of the environment is never a pretext for gaining advantage or increasing economic returns," Su Bo, a deputy minister of industry, said at a news conference in Beijing.

For The Diplomat, editor Jason Miks asks University of Connecticut specialist Nicholas Leadbeeater about the environmental dangers related to rare earth mining:

"I would say that the issue with rare earth mining is that the rare earth metals are in fact not all that rare, but they are found in small concentrations in ore and often found alongside things like uranium. Extraction of the rare earths from the ore is energy intensive and requires high temperatures as well as often needing significant quantities of hazardous chemicals like concentrated sulfuric acid," he told me. "The extraction process results in a lot of waste, some of it radioactive due to the uranium and other radioactive elements in the ore alongside the rare earths. In addition to this are the other environmental and health concerns of mining large areas for ore."

So, with this in mind, what does the future hold? According to Leadbeater, it's "becoming increasingly obvious that, while rare earths are used in many 'environmentally friendly' applications such as hybrid cars, the supply of the key rare earths isn't sustainable on a long term basis."

This means, he says, that industry is looking for alternatives to the rare earth components, "be this a complete redesign of their technology or else a way to make components more efficient," and so reducing the amount of rare earth required.


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Photo: On The Shore, by Land of no cheese

Posted: 21 Jun 2012 07:09 AM PDT

The Daily Twit (@chinahearsay links) – 6/21/12

Posted: 21 Jun 2012 05:10 AM PDT

Nothing dramatic today in Beijing, which is expected as the city is stifling under a humid veil of what I'm going to refer to as Heavenly Mucus. Others know it as smog. Hard to get excited about anything with this sort of thing up in the sky.

But the news goes on:

Reuters: China factories in eighth month of contraction — The export market still blows, and it's been that way for a while now. Folks are now talking about a U-shaped recovery. Worse than a V, but hopefully not an L, or even a W. God forbid we experience a & or a @.

Bloomberg: China Crude Imports From Iran Climb to Highest This Year — At the same time the U.S. is looking to crack down on Iran and tighten sanctions, the May numbers remind us all that China has other concerns.

Reuters: China tests troubled waters with $1 billion rig for South China Sea — Two issues here. China needs energy in a bad way, and the South China Sea geopolitical disputes are going to stick around for a while.

IHT: From Milk to Peas, a Chinese Food-Safety Mess — Nothing new here, but a very good round-up of recent food scandal news. If you're into that sort of thing. Good place to start if you are new to the topic.

Global Times: 6,000 local residents deputized as food inspectors — Apparently someone in Shanghai was nostalgic for the days when armies of grannies with armbands policed neighborhoods looking for troublemakers. This seems like a rather clumsy way to fix the food safety problem, but I guess if the problem is this bad and your human resources are so lacking, some creativity is necessary.

Beyond Brics: China makes it easier to buy equities — China has lowered thresholds and requirements for qualified foreign investors. The stock market here has been hating life amidst slow economic growth, so getting more cash into the market must sound like a good idea. There's a sucker born every minute who thinks he/she can pick winners better than the local competition. Good luck, guys.

Morning Whistle: Rumour: Lashou cancelled IPO after accounting fraud exposed — As a socially responsible resident of China, I really shouldn't pass on rumors, but what the hell. Yesterday, the news was that Lashou had pulled out because the market for IPOs, particularly Chinese companies, sucks balls. Now the story gets more complicated. We'll have to keep an eye on this one.

Bloomberg: Evergrande Slumps On Short-Seller Report: Hong Kong Mover — The latest target of short-seller Citron Research. Stock tanked in HK, so I guess mission accomplished. Whether the allegations are true or not remains to be seen.

Financial Times: Forget Grexit, it's time to fret about 'Chindown' — Finally, and just for the record, columnist David Pilling has made it onto the China Hearsay "Enemies of Mankind" list for his use of the term "Chindown," which refers to the PRC economic slowdown and the effects on global demand. Pilling might be trying to poke fun at the execrable term "Grexit," but two wrongs do not make a right. Cut that shit out, Financial Times.


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How Foxconn is Like a Salmon Boat

Posted: 21 Jun 2012 02:47 AM PDT

When I was in college (~1990) in California, the romantic summer job for those kids in desperate need of cash and willing to do anything to get it (like lose an arm) was to work on a salmon boat up in Alaska. I can't recall the details, but basically you worked insane hours for six weeks stuck on a boat. Some of those jobs paid very well, you didn't have the time or opportunity to spend your money, and you didn't even have to spend your entire summer vacation doing so.

So here's my prediction for future expats: internships in Asian factories. Might be here in China, might be elsewhere, and I don't know which sweatshops will be around in a decade or two. But mark my words, this is eventually going to look attractive to Western kids with no other options:

Foxconn is a well-known company for many reasons. But it's not necessary a company where students would like to do their internship. A report from Micgadget wrote that students from Xi'an Technological University don't really have a choice. All students who enrolled from 2010 must take up an internship role at Foxconn as part of the school's curriculum. Note that we aren't sure exactly what kind of work they will be doing, but hopefully it is something they can learn from rather than just a seat on the assembly line. (TechinAsia)

No, really. Paid internships are getting hard to find in places like the U.S., and while the Foxconn wages of roughly $240/month are still way too low to attract American kids on summer break, at least there's some money there. Let those wages rise a few more years and you never know. Give 'em some iCrap at cost, and they'll work for free.

Besides, a few years from now, Foxconn might start having trouble finding Chinese kids willing to take these jobs. Spin this as a great CV builder and life experience, and they'll attract plenty of middle-class kids from the West. Of course, they'll be terrible workers, but nothing's perfect.


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United Film vs. China Film Group: Pay Attention, Foreign Studios

Posted: 21 Jun 2012 02:23 AM PDT

In the past few months, we've all been deluged with entertainment news about foreign studios cozying up to Chinese producers and distributors. Some of these deals have been more traditional inward investment ventures, like the DreamWorks tie-up, while others have been unprecedented, such as the outbound AMC acquisition.

Since the U.S. and China struck a deal on the foreign film quota, most of the talk has been about how it was a great win-win. Foreign studios get more of their product into the country, and local distributors will enjoy their piece of the action. With China's box office receipts rising quite dramatically over the past couple of years, everyone seems happy.

Yes, but hold on a moment. I've seen a lot of distribution/licensing and Joint Venture deals over the past 13 years or so, and while everyone is still enjoying the honeymoon period, I have a pretty good idea of what might be coming in the out years.

Coincidentally, one rather obvious potential area of friction between foreign studios and distributors is in the news, although this dispute concerns two domestic companies:

Beijing-based film and television investment company United Film Investment recently filed suit against the China Film Group in the Beijing No.1 Intermediate People's Court. United alleges that the China Film Group violated a number of terms of the companies' agreement for the film My Own Swordsman, on which they cooperated, including "severe falsification" of box office profit reports. (Marbridge)

You don't need any special knowledge of the entertainment industry to understand what's going on here. Very familiar territory for most companies in China and quite a few foreign enterprises as well. Essentially, United Film was the owner of a product and made a deal with China Film Group to sell that product in return for a percentage of the revenues. Could have been anything — in this instance the product was the theatrical film "My Own Swordsman."

Now that the product has been sold, the two parties are arguing over that revenue. As we've seen countless times before, the distributor is being accused of under-representing sales. (The accusations might also involve cost issues, but I'm assuming the dispute relates to gross receipts). If the allegations are true, that would mean the China Film Group actually sold more of the product than it disclosed to United Film, pocketing all the revenue from those sales itself.

Sound familiar? I've had many clients who have either had this problem or have had to prepare against the possibility. For me, this typically crops up when negotiating and drafting a license/manufacturing/distribution agreement. The licensee is motivated to fake the documentation, so the agreement should always give the licensor the ability to perform local inspections, audit sales records, etc. Keeping multiple sets of books is a widespread practice that should be assumed.

So the good news is that the legal system, and commercial agreements, gives parties like the studios the ability to investigate and keep their partners honest. Theoretically.

The bad news is that it's easier said than done. One huge problem is that companies are quite expert at hiding information, and even if you pop in on someone to inspect their books, that doesn't necessarily mean that you will find the right data. Additionally, at least in my experience, many companies fail to utilize audit powers, even when they have local staff in China who could do so at low cost. It might be extremely difficult to uncover fraud, but if you don't even bother doing spot audits, you will definitely fail.

I'm a cynic and usually look for the poor outcome. But here, we already know that games are being played with box office receipt records (the United Film dispute is not unique), and we know how foreign licensors fare in these kinds of situations. In other words, look for more of this in the future.

How will the foreign studios react? Well, considering that many of the titles in question would have been barred entirely from the market in the past, I expect that the studios will be happy with whatever they can get and build from there. Beggars can't be choosers. On the other hand, that acceptance won't last forever, and eventually they will end up confronting their China distributors. Won't be for a few years, but it will happen eventually.


© Stan for China Hearsay, 2012

Videos » Society » Should movie stars be producers?

Videos » Society » Should movie stars be producers?


Should movie stars be producers?

Posted: 21 Jun 2012 05:27 PM PDT

In recent years, some Chinese movie stars have been trying their hand at getting BEHIND the camera, and producing movies. At Wednesday's Film Festival forum, directors, agents and actors discussed the pros and cons of having a big name in charge of a movie's big budget.

A dragon boat racing tournament on the Yangtze River

Posted: 21 Jun 2012 10:23 AM PDT

A dragon boat racing tournament on the Yangtze River has kicked off in Zigui county, central China?s Hubei Province.

Unleash your Inner Thespian! -- Local Laowai ep. 84 -- BON TV China

Posted: 20 Jun 2012 03:02 AM PDT

Go to: bon.tv/locallaowai to watch all episodes of Local Laowai! For all the theater and drama junkies out there, China has what it takes to keep your inner thespian happy. No matter if you're looking for modern theater or something with a more traditional bent, you'll find what you're looking for on this episode! BON -- Blue Ocean Network
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Invest Pension In Stock Market - Price Watch June 20 - BONTV

Posted: 20 Jun 2012 10:53 PM PDT

Go to www.bon.tv to watch the full episode Follow us on Weibo weibo.com According to Securities Daily, the debate continues about whether to invest pension funds into the stock market. Earlier in February, the Guangdong province government announced its investment of $15.7 billion dollars in retirement funds into the stock market. Although this move would bring a higher capital return than state-owned banks, and the NCSSF would offset the losses if the return rate is less than the minimum level, the public still worries that the country's underdeveloped stock market would bring about large financial loss.
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Li Yang speech protest - China Take June 20 - BONTV

Posted: 20 Jun 2012 08:52 PM PDT

Go to bon.tv to watch the full episode Li Yang, is the high profile founder of a popular English learning system known as Crazy English. Last summer Li's American wife. Kim Lee, posted pictures of the injuries she had suffered when Li beat her in front of their daughters so badly she had to go to hospital.This search refers to go protestors who held up signs at one of Li's events recently which read: "English skills are easy to learn, but the pain of domestic violence is hard to forget".
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China to increase retirement age - Biz Wire June 19 - BONTV

Posted: 19 Jun 2012 11:23 PM PDT

Go to www.bon.tv to watch the full episode Follow us on Weibo weibo.com China is considering increasing the retirement age. Officials from Human Resources and Social Security Ministry says pushing the retirement age in China is inevitable. So far, it has aroused widespread concern in the community. In a People's Daily report of nearly 5 hundred thousand people, 93% of them expressed opposition to the policy. However, some doctors and teachers are supportive the change. They say increasing the retirement age may be valuable, as skilled and knowledge is built with experience.At the same time, postponing the age of retirement, begs more questions of China's current pension situation. The latest report released by the Bank of China shows that the pension gap is expected to reach 2.9 trillion dollars in 2013.The report says that under the impact of an aging population and social pooling accounts, there my be pressure to public finance. The Chief Economist of The State Information says, the bonus of state-owned enterprises should actually complement the pension.The current retirement age set by the Labor Insurance Regulations is currently 60 years old for men and 50 for women. This was established in 1950 when the average life expectancy of most Chinese people was about 50 years old.
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Blogs » Politics » A Video Host Rants Against China’s College Entrance Exam, Promptly Goes Viral

Blogs » Politics » A Video Host Rants Against China’s College Entrance Exam, Promptly Goes Viral


A Video Host Rants Against China’s College Entrance Exam, Promptly Goes Viral

Posted: 21 Jun 2012 04:33 PM PDT

Gives hitting the books a whole new meaning

Although this year's gao kao (China's college entrance exam) has come and gone, the class of 2012 is still on pins and needles, awaiting the release of exam scores and college acceptance announcements. In this time of tension and anxiety, a 12-minute video of television host Zhong Shan (@我是钟山 ) delivering a passionate rant against the gao kao has gone viral on Weibo, China's Twitter. (Readers can see it in all its glory here.)

In a segment of his television show on Hunan's HNETV station, Zhong rips apart the gao kao system and lists his general grievances against China's education system. He spits out in rapid fire fashion a series of shocking headlines that have recently emerged, some laughable and some truly tragic: parents poisoning a pond of frogs to prevent the animals' croaks from disturbing studies; neighbors being asked not to flush toilets in order to maintain silence during study hour; a weeping daughter leaving behind her bleeding mother, who was in a car accident on the way to the test center; a child finding out that her father's death had been kept from him for two months due to the looming exam. Zhong laments that far too much importance is given to the gao kao, to the point that it's unhealthy for individuals and society. "Some people may find these stories to be moving," says Zhong, "but I find them to be evidence of the distortion of human nature."

Sensational stories aside, Zhong goes on to point out that although the test is advertised as egalitarian, a way for disadvantaged students to rise up in society, it fails to deliver on this promise. (At this moment, the video camera pans to a sign in a high school classroom that reads: "Without gao kao, how can you beat the children of the rich (富二代)?") He rattles off a series of statistics delineating the unfair advantage residency can give in college admissions.

Post-exam euphoria

For example, students from Beijing are 41 times more likely to be admitted to the elite Peking University than those from Anhui province, while students from Shanghai are 274 times more likely to be admitted to also-elite Fudan University than those from Shandong province. The injustice doesn't stop there; Zhong complains of rampant corruption in universities, and laments the abysmal job market that awaits college graduates. "The gao kao can change your fortunes," concludes Zhong, "by making your life more tragic."

On Weibo, netizens are in bitter agreement with Zhong, although they also point out that an obvious or immediate solution is not available. Still, many microbloggers were impressed by Zhong's courage to speak so frankly, some even fearing for his safety. And as @可人儿_湉湉君 pointed out, "Perhaps [this video] cannot change anything, but the more people want to ask these questions and are willing to ask these questions, the more changes will happen." As is common in discussions on China's social issues, some bloggers inferred that the present problem was the symptom of the flaws or weaknesses of the country's culture. @胡彦要潜心学习 exclaims, "Perhaps this is the remnants of China's feudalistic thinking! This is the sorrow of the nation!"

On his own Weibo account, Zhong paired the video with an allusion to the traditional Chinese idiom, "throw a brick to bring out the jade" (抛砖引玉), a self-deprecating phrase that means to offer one's lowly services to solicit the services of those more talented. Now that Zhong has thrown the brick, it remains to see when the jade will appear. 

China: Space Missions or Social Development?

Posted: 21 Jun 2012 09:11 PM PDT

On June 16, 2012, China successfully launched the Shenzhou-9 capsule, the country's fourth manned space mission. In order to celebrate this national feat, Chinese portal website Sina Weibo, has invited netizens to "write letters to the Shenzhou 9 capsule". However, some have taken this opportunity to criticize excessive spending on space mission, while the country is neglecting its basic social needs.

Artist Ah Ping's cartoon on the subject has been shared widely on Sina Weibo. As explained by the China Media Project, the cartoon shows:

Artist Ah Ping's cartoon

Artist Ah Ping's cartoon

a bedraggled teacher in a clearly dilapidated rural school excitedly explains to his students that the successful launch of Shenzhou-9 is a victory for China, even as the students' own condition tells the story of another China left behind. The teacher holds up a copy of People's Daily and says: "With the successful launch of Shenzhou-9, our mother country's space endeavors have taken a giant leap forward. I'd like all of you students to write a commentary about this!"

The sentiment of the cartoon is echoed by many netizens who have pointed out that the space mission is far easier than solving social problems in China [zh]:

@我朝有点威武:神九发射再次证明,解决贫困失学儿童问题,全民医保养老等有关民生的大事比登天还难

@我朝有点威武:The launching of the Shenzhou-9 capsule has proven again, that social issues such as education and healthcare for all are far more difficult to tackle than reaching the sky

tweetypie: #给神九写封信#上天之后请问还逼人堕胎不?请问酸奶还用皮鞋做不?请问牛奶能放心喝了不?请问孩子们有校车坐了不?请问吃喝还公款不?请问城管还打人不?如果答案是"不",那么,上个屁的天呀!为百姓做点实事真的有这么难么???

tweetypie: After it [the capsule] reaches the sky, will forced abortions be stopped? Can we feel safe drinking milk? Will kids have their school buses? Will government officials stop their extravagant spending of taxpayers' money? Will chengguan [City Urban Administrative and Law Enforcement Bureau] stop beating up people? If the answers are no, what's the use of reaching the sky? Is it that difficult for you to do something for ordinary people?

@坐在村口的小妖:#给神九写封信# 校车不安全,动车不安全,骑个自行车也不安全,赶紧量产了神舟吧,以后就都安全了

@坐在村口的小妖:The school buses are not safe, high speed trains are not safe, even bicycles are not safe. The ultimate solution to the safety problem is to produce more Shenzhou capsules

The news about the launch of the Shenzhou-9 capsule coincided with Myanmar opposition leader Aung San Suu Kyi's delivery of her Nobel Peace Prize speech in Oslo, Norway. On Twitter, most information activists believed that national glory should be built upon people's rights rather than space missions. Dissident blogger Wen Yunchao points out [zh]:

@wenyunchao: 混微博的,为神九上天激动;混推特的,为昂山素季感动;这就是区别。

@wenyunchao: People who hang around in Weibo are excited about Shenzhou-9 while people who hang around in Twitter are touched by Aung San Suu Kyi

Tibetan dissent writer Degewa also raises her political concerns by retweeting a Tibetan microblog [zh]:

‏@degewa: 转藏人微博:神九上天告诉我们,藏人去拉萨的路比登天还难。

@degewa: retweet Tibetan microblog: Shenzhou-9 tells us that the path for Tibetans to Lhasa is more difficult than reaching the sky.

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Photo: Apartment building, Shangqiu, Henan, by Mark Hobbs

Posted: 21 Jun 2012 09:58 PM PDT

Apartment building, Shangqiu, Henan


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Catchy Family Planning Slogans

Posted: 21 Jun 2012 09:24 PM PDT

Offbeat China translates many harsh family planning slogans from rural areas, which were collected by Netease.

The policy, better known as the one-child policy, has been set as China's basic state policy since 1980. For the past decades, China's countryside has been the most heavily-affected area. To maintain low birth rate and meet statistic requirements, local family planning officials have tried their best to come up with catchy slogans. Starting from 2007, China initiated the "Eraser" project to clear up these cold-blooded slogans and promote more humane ones. Nevertheless, many of these old slogans are well kept in people's hearts.

Most slogans are written in rhyme, and people are expected to remember them. Some include:

Today, you escape from the . When you come back, you will lose all you have.

Vaginal ring after the first child. Sterilization after the second child. Those with excess pregnancy will get and be sterilized. Those with excess children will be sterilized and fined.

And there is even a bilingual slogan in Uighur and Chinese from Xinjiang.

600 yuan reward and financial aid. To show love of the family planning policy.

See also: Abortion and Politics in China at Letters from China. Read more about the one-child policy via CDT.


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In Beijing, Succession Shuffle Begins

Posted: 21 Jun 2012 08:36 PM PDT

As China approaches a once-in-a-decade , and President prepares to retire from the later this year, Reuters reports that he may have already begun to take steps to retain influence by pushing ally and Beijing mayor as the capital's next party chief:

Guo Jinlong, 64, the capital's mayor since 2008 and a Hu ally, is tipped to replace Liu Qi, 69, as Beijing party boss at the municipal party congress that opened on Friday, the sources with ties to the leadership told Reuters, requesting anonymity because of the political sensitivity of leadership changes.

The city's party boss outranks the mayor.

If confirmed, Guo would be a shoo-in to join the party's decision-making Politburo during the leadership change at the 18th national party congress later this year, the sources said.

It was unclear when the Beijing congress would end and the announcement of the appointment made. The Beijing city government declined immediate comment.

The report notes that another possible choice as Beijing party boss is Hu Chunhua, who currently serves as the party's top official in Inner Mongolia.


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Liang Fan’s Reverence for the Chinese National Flag

Posted: 21 Jun 2012 07:30 PM PDT

This week President Hu Jintao touched millions of his compatriots by pulling a sticker off his shoe. At a G-20 photo-op, he and all the world leaders had a small sticker of their national flag on the floor marking where they should stand. As they were leaving, the Chinese flag sticker got stuck to Hu's shoe, so he bent down to pick it up. The story reported in the Chinese blogosphere and media, however, was that Hu so revered the Chinese flag that he felt compelled to respectfully and gingerly bend down to save it as the other world leaders coldly discarded theirs.

"I am deeply touched and proud of being a Chinese," People's Daily reported one netizen saying about Hu's bending over two feet to the ground, as China's first female astronaut continued orbiting hundreds of miles overhead unnoticed.

The fawning over this incident reminded me of this lesson that Chinese children are taught in school. Perhaps there's a connection:

In 1990, UNICEF invited Beijing middle school students to visit the Netherlands in order to participate in "Children of the World for Peace" activities. Liang Fan flew to the Netherlands to represent Chinese children. She stayed in a comfortable hotel and met many little brothers and sisters from all around the world. It was a very happy time!

As the activities began, banners of more than 50 countries were raised in front of the hotel.  Liang Fan looked for the Chinese flag, but couldn't find it. So Liang Fan immediately went to the organizer and solemnly demanded, "The Chinese national flag must be raised since I'm here representing China."

Later, it was almost lunch time and the Chinese flag still hadn't been raised yet. So Liang Fan brought the organizer to the table, pointed at the pink tablecloth, and said, "If you cannot find a Chinese national flag, it's ok. I am going to paint this red and make it into a flag!" Liang Fan's patriotism touched the organizer deeply and the news spread quickly, which caught the organizing committee's attention. They ordered somebody to find a national flag for the People's Republic of China and raise it in front of the hotel. Liang Fan was admired by representatives from the other countries who praised her as a qualified representative of the People's Republic of China.

What can we learn from this?


Young female reporter mistakes artificial vagina for mystery mushroom

Posted: 21 Jun 2012 11:12 AM PDT

Young female reporter mistakes artificial vagina for mysterious mushroom

A TV news program in Xi'an has become a national laughing stock by mistaking a sex toy for men to masturbate with as mystery mushroom.

The fungi-like object was discovered by villagers when drilling a new well in their village on the outskirts of Xi'an City, capital of Shaanxi Province. Believing it as a "fateful" discovery, villagers called up the TV Station.

A young female reporter was soon sent to the spot, giving "a passionate and detailed description."

They called it taisui, a type of rare lingzhi mushroom, and said that experts were being summoned to confirm, while giving it strokes, squeezes, and measuring it.

The report has cracked millions of viewers up online as netizens soon recognized that it was in fact the artificial vagina.

Netizens show understanding to the simple villagers, but felt surprised that the TV station even has such a lack of knowledge on reproduction and sex.

See the following report from May Daily:

A young female reporter from Xi'an TV Station mistakenly introduced a sex toy for men to masturbate with, claiming it was a rare mushroom (see video).

The reporter claimed that an old farmer found what he thought was the rare lingzhi mushroom when digging a well near his house in Xi'an city, the capital of Shaanxi province.

Lingzhi (灵芝) means "miraculous long life" and the mushroom has been used as a medicinal herb for at least 2,000 years in China, most notably by the Emperor Qin Shi Huang (259BC–210), who painstakingly sought it out in his search for immortality

While villagers handled and stroked the sex toy, the reporter gave a passionate and detailed description.

She then gave it a good squeeze and touched it up, saying the top of the "mushroom's" head had a mouth-like opening with a small hole.

"It's really smooth to the touch," she commented.

She said the villagers had checked on the Internet and were sure they had a rare lingzhi mushroom, while experts were being summoned to confirm.

But it didn't take long for netizens to work out that it was in fact a sex toy, the rubber kind that simulate a woman's private part and men put over their penises to rub up and down until the point of blessed relief.

The TV station admitted the mistake and apologized on its microblog, on Monday, saying its reporter was young and inexperienced.

"We are sorry we misled viewers and made them feel uncomfortable," it said in a statement.

China’s Real-Name Rail Policy Stops Would-Be Petitioner In Her Tracks

Posted: 21 Jun 2012 03:32 PM PDT

Chen Xiujuan, in a 2011 photo

Now this is a bit Orwellian. Chen Xiujuan, a long-suffering villager from Anda city in chilly Heilongjiang province, recently found herself unable to purchase a train ticket to Beijing, where she had planned to bring her grievances to China's central government, because she was on a local government blacklist. 

An unfortunate history for Chen

How did authorities know? According to a tweet by user @盛世恐龙 on Weibo, China's Twitter, Chen was a victim of China's recently implemented policy requiring that train tickets display the real name of their holder. While writers such as Tricia Wang have noted the policy is loosely enforced in practice, in this case it was enough to snag Chen. 

What makes Chen so threatening? According to a 2011 article on Boxun.com, a news portal for Chinese diaspora, Chen is a long-suffering farmer from Heilongjiang who has been petitioning China's government since 2003 with grievances ranging from forced evictions to brutal treatment in a "re-education through labor" camp.  

According to a text file tweeted by @盛世恐龙, Chen was planning to petition Beijing authorities again when she sought to buy a train ticket on June 18th. However, the ticket agent denied Chen, showing her a list of "important persons" approximately 20 people long. The ticket agent explained she could lose her job if she sold a ticket to the blacklisted Chen. Then, adding insult to injury, the agent charged Chen 8 RMB (about one US dollar) as a "processing fee."  

If true, this incident represents a perversion–or what some may call clever exploitation–of the real-name policy. As the BBC reported in February, the real-name policy helped lead to the arrest of hundreds of fugitives traveling during China's Lunar New Year. But it is another thing altogether for a traveler to be denied train access because of concerns they might protest after disembarking.  

High tech, low life?

Netizen reaction ranged from anger, to alarm, to simple amazement at the government's power and ability to execute its policies. @昆山律师朱一业 wrote, "Whoa, technology and society's ability to control are advancing at the same pace. Terrifying!" @百草晓寒 marveled, "How great is the power of the system? How precise? How subtle? So wretched!" 

Many wrote they suspected that the true goal of requiring real names for train passengers had always been "maintaining stability" (维稳), a euphemism for quelling political unrest. @wgyd333 scoffed, "Did you think it was to stop thieves?" @Cn-Mars was enraged, fuming, "This is the characteristic of a police state. They have to put the power of the public inside a cage."

That'll be 180 RMB, and a promise you'll never petition Beijing

Others were more resigned. @乐天无极 wrote, "Law is like a blank piece of paper. It's real [only] when directed at commoners." @祝和平 avowed, "From now on I'm just going to pay attention to gossip and to pretty girls."

What it really means

Netizen hand-wringing aside, the identification of Chen was in fact rather low-tech. After all, the ticket agent merely compared her ID card to names on a handwritten list. In fact, according to Hong Kong University's Weiboscope (which tracks images re-posted by popular users), a teacher at none other than Beijing's Public Safety University retweeted the image and asked, "Did this really happen?" His query was deleted within a day, but it suggests that some in China's capital are incredulous, or perhaps annoyed, that such a thing transpired.  

Even at its most benign, however, the incident again shows the power of local officials to interfere with citizens' right to make their grievances known to higher authorities. This is where Weibo, which ironically is also subject to (porous) real-name requirements, shows its power. It has allowed unhappy but isolated locals to traverse great distances in a single tweet. Why sit for hours on an uncomfortable train, only to be ignored in Beijing? China's netizens–which includes some of her bureaucrats–already have their ear to the Weibo wire.

Japan and South Korea’s History Divide

Posted: 21 Jun 2012 02:56 PM PDT

Memo #165

By Alexandra Sakaki – alexandra. sakaki [at] swp-berlin.org

Despite the United States' shift in strategic attention to the Asia Pacific, fiscal constraints and defence spending cuts highlight the need for greater military cooperation among Asian partner countries. There are myriad security issues in the region. Japan and South Korea, the two key US allies in Asia, are significant actors in this context. But enhanced defence cooperation continues to be hampered by controversies regarding Japan's history of aggression on the Korean peninsula. In mid-May, Seoul cancelled the planned signing of two military accords with Tokyo, citing domestic criticism on any military pact amid unresolved bilateral history issues.

What can be done to promote greater reconciliation between the two countries? Scholars have pointed to a civil society-led, "bottom-up" process of reconciliation. Non-governmental projects between Japan and South Korea are important and encouraging but significantly limited. For example, history textbook talks are widely acknowledged as an important tool in reconciliation efforts. Over the past decade, numerous civil society projects have published joint history textbooks. But public awareness remains limited and school adoption rates are low.

To promote a transnational reconstruction of the past, history textbook talks should be officially endorsed by the government and supported by a critical mass of politicians. Government representatives lend legitimacy and credibility to history textbook projects and thus help to overcome domestic opposition. They are crucial actors who exert influence over history teaching guidelines and curricula.

In this regard, Asia can learn from Europe's experience in settling disputes between former enemies. In the case of German-Polish history textbook consultations, a key requirement for success was that politicians actively pursued the dual goal of demonstrating high-level commitment to the work of historians, while proactively shielding the bilateral commission from nationalistic pressures.

Reflecting on Europe's experience and keeping in mind the need for closer bilateral security cooperation, Japanese and Korean politicians must do more to settle ongoing history disputes. Holding history textbook talks under the auspices of UNESCO, for instance, would help create an environment more conducive to historians' discussions. As an intergovernmental organization, UNESCO underscores political backing, while its international authority and esteem cast legitimacy on the endeavor.

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Links:

  • Nihon to kankoku de no rekishi kyōtsū kyōzai [Common Historical Consciousness and common History Teaching Materials in Japan and Korea], Gakujutsu no Dōkō, 2009.

Related Memos:

Hu Xijin on Guiding Public Opinion

Posted: 21 Jun 2012 02:46 PM PDT

Since 2010, the U.S. embassy in Beijing has maintained a Twitter feed with hourly readings. Beijingers distrustful of the city government's reports found ways to surmount the Great Firewall and access the embassy feed. Enormous discrepancies between embassy and local measurements, combined with a few exceptionally bad days of smog last winter, seem to have lead the municipal government to improve its monitors.

After the U.S. consulate in Shanghai started its own feed this month, China claimed that air quality monitors at any foreign mission are illegal. The U.S. insists its monitors are intended solely for the consular community, but that has not quelled Chinese government spokespeople. Nor do the authorities think America is solely to blame. Global Times Chief Editor excerpted his paper's June 7 editorial, "Confronting an Increasingly Active U.S. Embassy," in a Weibo post:

HuXijin: One of the reasons for the U.S. embassy's growing activity is its group of followers within China. Through the Internet, they enter into a tacit agreement with the embassy, while also helping the embassy disseminate information through traditional media. This is a normal manifestation of the diversity of Chinese society. We cannot think of the whole thing as a "U.S. embassy conspiracy." This is often China's own problem.

胡锡进: 美使馆之所以越来越活跃,原因之一是中国国内有了一批它的追随者,他们通过互联网与美使馆默契互动,也通过一些传统媒体帮助美使馆做传播。这是中国社会多元化的正常表现,我们不能认为这全是"美国使馆的阴谋",它在很多时候就是中国自己的问题。

Hu further commented on the article in a reply to his original post:

HuXijin: China must assiduously guid mainstream public views in [the effective production and convergence of voices] in the public opinion space, clamping down on and balancing pro-U.S. and pro-Western voices. In nearly every country, including countries heavily influenced by the U.S., it is difficult for the pro-U.S. view to gain support. In China, however, at least on Weibo, has become an exception. This is a bit abnormal, and its causes are worthy of deep consideration.

胡锡进: 中国一定要认真引导主流公共意见在舆论场的有效发声和汇合,使这些意见对亲美和亲西方的声音形成强有力钳制和平衡。几乎在所有国家,包括美国影响巨大的国家,亲美的声音都很难在舆论场获得强势,而在中国至少微博现在成了例外。这有些反常,也值得深思它的成因。

As usual, netizens had a field day with Hu. Below is a sampling of over 1000 comments. Read more on CDT Chinese.

Translated by Deng Bolun.

ArabianYouth: The reason is that you can speak relatively freely on Weibo, so the people's vehement dissatisfaction comes spewing out. All other websites have been harmonized. If you can't see dissatisfaction, does this prove a happy society? @HuXijin

阿拉博童童:成因就是,微博相对可以言论自由,人民对国家强烈的不满可发泄出来。别的网站全被和谐了,你看不到不满就表示社会多美好?@胡锡进

KiMzzzzzZ: The Chinese people aren't pro-U.S., they're pro-conscience, pro-truth.

KiMzzzzzZ:中國人民不是親美,是親良知,親真話

NiuniuLovesKaka: The mainstream you're talking about would be People's Daily, right? You should know, only on Weibo can you really sense the people's will. The People's Daily is just selling dog meat and calling it lamb.

牛牛爱卡卡:你所说的主流,是指人民日报吧?要知道,微博才真正体会民意,人民日报之流,无非是挂羊头卖狗肉

HappyIsEnough: Other than stirring up nationalist fervor among some people, what else can you do? Pursuing freedom and democracy is wrong. Pursuing better air quality is wrong. I know your children must have gone abroad. Are you f*cking evil? Turning a few normal young people into Maoists.

若是安好便足矣:你除了煽动部分人的民族气节,煽动人你还会搞什么,追求自由和民主有错,追求质量好点的空气有错,我知道你的孩子肯定是出国了,你他妈能不能这样邪恶啊,把一些正常的年轻人搞成一个个毛派

ChineseCitizen8: If I'm pro-U.S. or pro-West, that's my right. Do you want me be an [ass-licker] like you? @HuXijin

中国公民8:老子亲美亲西方是老子的自由,难道要老子和你一样舔菊花啊@胡锡进

KubiTranslatorLiu: We are far from being pro-U.S. We are looking forward to a better life. As for your comment "In nearly every country, including countries heavily influenced by the , it has been difficult for the pro-U.S. voice to attain a strong position," please have a look at the immigration policy on U.S. passport holders in the democratically elected governments of those countries heavily influenced by America.

苦逼的翻译刘:我们并不是亲美,我们是向往更好的生活,至于您说的"几乎在所有国家,包括美国影响巨大的国家,亲美的声音都很难在舆论场获得强势" ,请您看看那些美国影响巨大的国家的民选政府对持有美国护照的人的入境政策。

Zi-Fei-Yu: @HuXijin You use "clampdown" very well, very appropriately, just like someone who has practiced various [throat-clenching or wrestling moves]. Very good, and if you can't clamp down then couldn't you still remove our vocal chords for free? Perhaps it wouldn't be free. You still want fifty cents per bullet [for executions], isn't that right, Editor Hu? @SimaNan @KongQingdong @SongYangbiao @WuFatian

子-非-余: @胡锡进 钳制这个词用的非常好,恰如其分的好,如同练过锁喉功或者鹰爪功。很好,即使钳不住还可以给我们免费做个声带小手术吗?也有可能不是免费的,子弹还要五毛一颗呢,对吧,胡编?@司马南 @孔庆东 @宋阳标 @吴法天

GuyCalledBubbleBobble: Teacher Hu, if you tell us not to be pro-U.S., ask So-and-So's and So-and-So's  "only children" to come back from the United States and then we'll see. You do the utmost to send your family to America and then ask the common people to not to be pro-U.S. Who are you fooling?

用泡泡龙名字的人:胡老师,如果说不要亲美,请某某的独生女儿,独生儿子等人从美国回来再说。拼命把自己家属送往美国,然后让百姓不亲美,你忽悠谁呢。

Laomu 1840: Your own [government] credibility is lacking, what use is it to blame others? What you should think about is why people don't trust you! Traditional media are all organized, it's only Weibo that can sound the voice of the people! Everyday it's guide this, guide that, and your way of thinking is always right. Now you're looking for volunteer Fifty Centers. In the end it's ordinary people who pick up the tab. Senior Fifty Center Sima Nan even secretly took his family and money to the United States. What else can you say???

老木1840:你自己的公信力差,怪别人有用吗?你应该反思的是老百姓为什么不信任你!传统媒体都是组织的,只有微薄才能发出人民自己的声音!天天引导这个引导那个,还是那种自己一贯正确的思维啊,雇佣五毛不要花钱啊,最后还是老百姓买单。资深五毛司马南都偷偷把家人和资产转移到了美国了,你还说什么呢???

Bickermate: #HuXijin, if the public opinion space needs your guidance, can you still call it mainstream opinion? Do you represent the mainstream? What's the point of equating truth and progress with the U.S. and the West? This kind of logic wouldn't come out of a dog's ass. The people will support whatever best promotes social benefit. If you don't want to see pro-U.S. and pro-Western, then build a democratic government. What's the use of playing dumb all the time?

只配抬杠:#胡锡进#,舆论场里需要你引导的那还能叫主流意见?你代表主流了?你把真实和进步等同于美国和西方干嘛?狗屁不通的逻辑。哪个更能促进社会利益,人们就亲哪个,不想看到亲美亲西方,就建设民主政府。整天装憨有什么用?


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Two Tibetans Self-immolate

Posted: 21 Jun 2012 02:28 PM PDT

Two more Tibetans have set themselves on fire in protest and one has died. The Washington Post reports:

One of the two men who self-immolated Wednesday in Yushu prefecture, a heavily Tibetan area in west China's Qinghai province, died and the other was badly hurt, the Tibetan Youth Congress and China's Xinhua News Agency said.

The cases add to about three dozen self-immolations over the past year in ethnic Tibetan areas of China in protest of what activists say is Beijing's heavy-handed rule in the region. The government has confirmed some but not all of them.

Xinhua said the dead man was a local herder and the survivor migrated from Aba prefecture in Sichuan province. The Tibetan Youth Congress said by email that 24-year-old Tenzin Khedup died and it identified the injured man as Ngawang Norphel, 22.

The group released photos of a charred body lying on the bed of a pickup truck and a video showing two men holding up Tibetan independence flags as flames engulf them. Both men stumble and fall in the seven-second video before one man rises and runs down the street in flames. High-pitched screaming can be heard but it's not clear who is making the sound.

Since 2009, dozens of Tibetans have used as a means to protest against Beijing policies in Tibet. Radio Free Asia reports on the two recent cases:

Carrying Tibetan flags and shouting pro-independence slogans, former monk Tenzin Khedup, 24, and Ngawang Norphel, 22, torched themselves in Dzatoe (in Chinese, Zaduo) township, Tridu (Chenduo) county, in the Yulshul (Yushu) Tibetan Autonomous Prefecture, the exile sources said.

Tenzin Khedup died on the spot while his colleague, Ngawang Norphel was badly burned and is in serious condition at a hospital, according to Lobsang Sangay, a monk in India who is from the Zekar monastery in Yushul, quoting eyewitnesses.

"They called for freedom for Tibet, the return of His Holiness the Dalai Lama to Tibet and for his long life. Both of them were carrying Tibetan flags in their hands at the time of the self-immolation," he said.

Authorities have waged a security crackdown in areas where self-immolations have been staged and have taken extreme measures to try to stamp out the protests. The Age reports:

The hotel and dozens of others have since been shut, petrol sales have been tightly restricted and dozens of people taken into custody, according to Tibetan sources.

Squads of orange-clad fire fighters, with fire trucks and four-wheeled buggies, have now joined clusters of police SWAT teams, riot police and paramilitaries in camouflage to prevent monks and Tibetan lay persons from making public spectacles of self-harm.

They are armed with fire hydrants – carried in hand and concealed in rows under fire blankets – as well as semi-automatic weapons and long black poles apparently designed for the safe handling of burning bodies.

Jokhang Temple has been stripped of most of its yak-butter candles, replaced by fluorescent lights, while identification checks are now required to enter monasteries and other public spaces.

Read more about protests by Tibetans and about recent self-immolations, via CDT.


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Analyzing the Five-Year Plan for Internet Development

Posted: 21 Jun 2012 01:48 PM PDT

Last month, the Ministry of Industry and Information Technology released a five-year-plan for . Rogier Creemers of China Copyright and Media blog has translated the document in full. Creemers has now also posted his analysis of the document:

The most important aspect of this document, however, seems to be security. Obviously, data leaks, phishing, privacy protection and viruses are real threats against the further development of Internet industries. At the same time, the Chinese government itself is often accused as being behind cyberattacks and online intelligence, something of which the US military, amongst others, seems very suspicious. Increased and clarity about China's objectives would be very useful in this regard. Also, security seems to refer to censorship. The plan calls for enhancing "emergency response systems" to deal with "sudden incidents" and strengthening institutional and legal frameworks to further strengthen Internet supervision and management. This continues the trend of recent years, where new national and provincial-level Internet offices were established. Furthermore, the trend of co-opting Internet enterprises into self-discipline seems to be strengthened.

Obviously, plans like these are general guidelines, and the interesting question remains how these objectives will be transposed into concrete policy and regulatory measures, especially in an environment changing as quickly as the Internet.


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What Exactly Does It Mean to Be Sina Weibo’s “VIP”?

Posted: 20 Jun 2012 07:00 PM PDT

Sina's investors are watching

Perhaps it's time for a new approach. After announcing $13.7 million in losses this past quarter, Sina has rolled out new VIP services for its Twitter-like Weibo platform, available for 10 RMB (US$1.57) per month, in a bid to increase profitability. Whether or not the services will significantly impact Sina's profit margins, they are sure to change the way some use the service, perhaps for the better.

The new VIP package includes 15 new special privileges, with six levels of VIP membership based on how long a user has been a VIP, and discounts are available for users who pay for several months or more in advance.

The 15 services, translated fully here, are:

Identity
1. Exclusive VIP icon
2. Exclusive templates
3. Exclusive awards
4. Exclusive Weibo account name
5. Exclusive customer service

Functions
1. Quicker leveling up
2. Follow more users online (up to 3,000 from 2,000)
3. Special user promotion on platforms including the Members' center
4. Ability to follow more users anonymously (up to 30 from 20)
5. Unfollow users while still appearing to follow them

Mobile
1. Weibo Voice
2. Follow users by text message
3. Birthday reminders

Security
1. Text message security reminders
2. Change password settings by text message

Interestingly, five of the fifteen special privileges are new functions related to use of Weibo on mobile devices, and the increased integration of Weibo services with mobile devices will undoubtedly increase activity on Weibo. China's telecommunications sector is developing rapidly, and as Bill Bishop recently observed, an increase in mobile internet usage will have a significant impact on how China conducts its censorship. Will text messages pushed by SMS automatically bypass censorship to some extent? It seems that any lag or delay in this service would undermine the company's ability to follow through on its promise to help mobile users be the first to comment on celebrity posts.

Trust us, you're special

Other functions allow users to change the way they connect and interact. The ability to block or hide a user from one's Weibo feed will allow users to direct their attention more efficiently, without having to worry about hurting other users' feelings. This is similar to the option to "unsubscribe" from someone on Facebook; though there is no similar option on Twitter, several applications like TweetDeck provide a work-around that accomplishes the same end. On the other hand, the option to anonymously follow a user on Weibo has no clear counterpart in mainstream Western social media, though a market undoubtedly exists among jilted lovers, worried parents, and anyone ashamed to admit to a love of Justin Bieber on the internet.

Many of the new privileges fall into the category of identity promotion and individualization: Sina is banking on the fact that users will want others to know they are VIPs. The company has successfully offered VIP email service for years, so they have reason to believe this will draw in more paying customers. This may be one function that has a much larger market in China than elsewhere, due in part to a culture of conspicuous consumption that exists among some demographics. China is the second largest market for luxury goods in the world, and McKinsey has predicted it will surpass Japan to become number one in the near future.

The issue of monetization aside, Weibo's new lineup reflects one idea about the direction of development for China's internet: a push towards an identity-centered, technologically integrated, and convenient social media. Time will tell how much of an impact the new services have on Weibo itself, but if even 1% of Weibo users opt to become "Weibo Members," millions of people will be changing the way they use Chinese social media.

China, Vietnam Escalate South China Sea Row

Posted: 21 Jun 2012 08:23 AM PDT

China may have gained a weather-induced respite from its rift with the last week, but the conflict steams on with its other neighbors. The New York Times reports that China's foreign ministry summoned the Vietnamese ambassador to protest a his country's new law claiming sovereignty to the Paracel and Spratly Islands:

'''s Maritime Law, declaring sovereignty and jurisdiction over the Paracel and Spratly Islands, is a serious violation of China's territorial sovereignty,'' a ministry statement said. ''China expresses its resolute and vehement opposition.''

The dispute between China and Vietnam over the law, which had been in the works for years, is the latest example of Beijing's determination to tell its Asian neighbors that the South China Sea is China's preserve.

The Chinese statement comes two weeks before a meeting of foreign ministers of the Association of Southeast Asian Nations in Phnom Penh, Cambodia, which will be attended by Secretary of State Hillary Rodham Clinton and where the South China Sea dispute is expected to be high on the agenda.

China shot back diplomatically by raising the administrative status of a group of islands that includes the Spratlys (Xisha), Paracels (Nansha) and Macclesfield (Zhongsha), Zhongsha and Nansha islands, according to Xinhua News:

The council has abolished the county-level Administration Office for Xisha, Zhongsha and Nansha Islands, which was also stationed on Yongxing Island, the statement said.

A spokesperson of the Ministry of Civil Affairs said Thursday that the setting up of Sansha city will help to improve China's "administrative management on Xisha, Zhongsha and Nansha islands and their future development."

"It is also conducive to protecting the oceanic environment of the South China Sea," the spokesperson said.

China first discovered and named the reefs, islets and the surrounding waters of Xisha, Zhongsha and Nansha islands, and has exercised sovereignty control continuously over the area, the spokesperson said.


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Book Review: A Passion for Facts

Posted: 21 Jun 2012 08:20 AM PDT

Lam, Tong. A Passion for Facts: Social Surveys and the Construction of the Chinese Nation State, 1900-1949. Berkeley: University of California Press, 2011. xiii, 263 pp., $60.00 (cloth).

By Maggie Clinton

Tong Lam's engaging new study A Passion for Facts analyzes the processes by which modern modes of apprehending and ordering the social world were forced upon and ultimately embraced by Chinese political and intellectual elites during the late Qing and Republican periods. Lam focuses on the rise of the "social survey" (shehui diaocha) as a means of knowing and constituting a new object called "society" (shehui), as well as the epistemological violence of imperialism that rendered the social survey a seemingly natural way of investigating the world. By the time the Nationalists assumed state power in 1927, Lam argues, "seeking truth from facts" (shishi qiushi) gathered via empirical observation of social phenomena had supplanted the methods of text-oriented evidential scholarship prevalent during the Qing. A Passion for Facts explicates this paradigm shift in terms of the forms of imperialism to which China was subjected, resulting in a novel and compelling contribution to studies of colonialism, knowledge production, and state-society relations in modern China.

Lam pursues three primary lines of argument. Although these lines do not always successfully intersect, each is provocative and unfolds with illuminating detail. First, the book addresses how nineteenth-century colonialist discourse, epitomized by the writings of Arthur Smith, disparaged Chinese people for disregarding time and concrete particulars, and for generally lacking facts about themselves. As China was subjected to imperialist violence that rendered it commensurate with global capitalism, the concomitant invalidation of indigenous forms of knowledge collectively traumatized Chinese intellectual and political elites and charted the winding road by which they came to embrace the social fact as a "medium for discerning the truth about the human world" (p. 6). Second, the book traces how the adoption of new enumerative modalities (in particular a revamped census) by the late Qing and Republican states not only rendered society legible to the state in new ways, but also disciplined citizens to recognize themselves as members of a coeval national community. By the 1930s, this generated what Lam, following Timothy Mitchell, calls the "state effect" by which social surveys, as well as state-affiliated surveyors, effectively conjured the state into being as an entity apparently distinct from society. Third, as per the word "passion" in the book's title, Lam argues that objective facts gathered by social surveyors inevitably contained traces of sentiment. These extra-scientific traces, which became manifest in surveyors' narratives of hardship and sacrifice, had to be locked away in what Bruno Latour has called a "black box" if facts so gathered were to successfully assume the position of authoritative truth.

The six chapters plus introduction and epilogue that comprise Lam's study develop these points and many others. The introduction and Chapter 1 establish the historical and theoretical stakes of the project. Chapters 2 and 3 chart transformations in Qing state methods for knowing and tabulating Qing subjects. These chapters pivot around a fascinating analysis of the 1909 census that attempted to collect population data "using a singular enumerative framework," as well as the anti-census riots that revealed popular dissatisfaction with the invasive, homogenizing efforts of the modernizing state (p. 63). Chapters 4 through 6 turn to the 1920s and 1930s, highlighting the ways in which the by-now widespread practice of social survey research functioned to gather "empirical evidence of the nation," in particular at the hands of surveyors employed by the Nationalist state and affiliated research institutes (p. 93). Here, Lam elaborates on how Nationalist-sponsored surveys and censuses graphed Chinese society as uneven and heterogeneous, blighted by "backwards" and "immoral" populations, which in turn prepared the ground for state expansion and biopolitical intervention. Lam also sheds light on the ways in which researchers, many of them trained in methods of American positivist social science, came to see the endurance of hardship and toil as a necessary precondition for the production of truthful facts. Particularly telling are elite characterizations of life among the impoverished, such as researcher Li Jinghan's exhortation to investigators to accustom themselves to "the peasants' smell, their disgusting food, and their unhygienic condition" (p. 163).

The book's insights are too numerous to summarize here, but an important one involves Lam's attention to the speed and enthusiasm with which certain liberal intellectuals turned colonial derision of China's ostensible factual deficiencies and general "backwardness" against fellow nationals, in particular subaltern populations. Lam presents Hu Shi's character "Mr. Chabuduo," who supposedly embodied Chinese imprecision, in this light, as well as James Yen's frustration with Ding county peasants who refused to yield the kind of factual information he desired. Much of Chapter 6 discusses liberal researchers who criticized the urban bias of the Nationalist state that provided an umbrella for their own endeavors, and who also characterized the peasantry as ignorant and uncivilized. This chapter is careful to note that Republican-period social scientific practice was neither standardized nor politically univocal; investigators worked with "different assumptions, methods, theories, and conceptual categories," and society itself was "far from a stable and well-defined object" (p. 142). In this vein, Lam discusses the rural surveys of Mao Zedong and Marxist Chen Hansheng, but the overarching point is to underscore Republican-period struggles between "which vision of truth … would be elevated and implemented" and which vision would be "delegitimized and suppressed" (p. 143). Although this was certainly at issue, Lam might have reflected more deeply on the ways in which certain methodologies and social perspectives countered rather than facilitated capitalistic development and hierarchical national integration, and how the plurality of approaches to "the social" suggest fissures in the Nationalist "state effect."

Lastly, Lam might have pushed his conclusions about the role of affect in the production of objective truth a bit further, in particular regarding its gendered implications. For instance, how did the emphasis on hardship and long hours in the field render the production of knowledge a masculine endeavor? What did this mean for truths generated about the emergent social category "women"? As these questions are intended to suggest, readers will find A Passion for Facts compellingly written, thoroughly researched, and thought-provoking.

Maggie Clinton received her PhD from New York University and is Assistant Professor of History at Middlebury College.

© 2012 by Twentieth-Century China Editorial Board. All rights reserved.

Rare White Paper Published on Rare Earths

Posted: 21 Jun 2012 07:59 AM PDT

China's State Council on Wednesday issued its first white paper on the controversial rare-earth metal sector, hailing its developmental achievements but also acknowledging the environmental consequences of and promising tighter standards for its mining practices. China Daily published the full text of the document:

China is among the countries with relatively rich rare earth reserves. Since the 1950s, remarkable progress has been witnessed made in China's rare earth industry. After many years of effort, China has become the world's largest producer, consumer and exporter of rare earth products.

While bringing benefits to mankind, the exploitation of rare earth has brought about increasingly significant problems regarding this resource and the environment. In the exploitation and utilization of rare earth, the rational utilization and effective protection of the environment pose common challenges for the world at large. In recent years, China has taken comprehensive measures in the links of mining, production and exporting of rare earth goods and strengthened efforts for the protection of the resource and the environment, endeavoring to ensure a sustainable and healthy development of this industry.

With the in-depth development of economic globalization, China is involved in more extensive international exchanges and cooperation in the field of rare earth. Always honoring the rules and living up to its commitments, China has provided the world with large quantities of rare earth products. It will continue to follow the rules, strengthen scientific management of this industry and supply rare earth products to the global market, so as to make its due contribution to the development and prosperity of the world economy.

For some time now, some countries have been particularly fretful about the situation of China's rare earth industry and related policies, doing a lot of guesswork and conjuring up many stories. We hereby give a presentation about China's rare earth industry in order to further provide the international community with a better understanding of this issue.

The white paper likely drew scrutiny from China's trading partners, specifically the , European Union and , who filed a WTO case in March to protest the export quota system China enforces on the rare earth industry. China defends its tight control over rare earth as a byproduct of its willingness to take on the environmental burden of extraction, and the white paper not only addressed the environmental angle extensively but also challenged foreign estimates of China's reserves. Most importantly, but perhaps not surprisingly, it also gave no sign that China would lift export quotas. Xinhua reports that the chief of the Rare Earth Office said that China meets global market demand despite the export controls, while another official defended the policy in a news conference, according to The New York Times:

"The protection of the environment is never a pretext for gaining advantage or increasing economic returns," Su Bo, a deputy minister of industry, said at a news conference in Beijing.

For The Diplomat, editor Jason Miks asks University of Connecticut specialist Nicholas Leadbeeater about the environmental dangers related to rare earth mining:

"I would say that the issue with rare earth mining is that the rare earth metals are in fact not all that rare, but they are found in small concentrations in ore and often found alongside things like uranium. Extraction of the rare earths from the ore is energy intensive and requires high temperatures as well as often needing significant quantities of hazardous chemicals like concentrated sulfuric acid," he told me. "The extraction process results in a lot of waste, some of it radioactive due to the uranium and other radioactive elements in the ore alongside the rare earths. In addition to this are the other environmental and health concerns of mining large areas for ore."

So, with this in mind, what does the future hold? According to Leadbeater, it's "becoming increasingly obvious that, while rare earths are used in many 'environmentally friendly' applications such as hybrid cars, the supply of the key rare earths isn't sustainable on a long term basis."

This means, he says, that industry is looking for alternatives to the rare earth components, "be this a complete redesign of their technology or else a way to make components more efficient," and so reducing the amount of rare earth required.


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Photo: On The Shore, by Land of no cheese

Posted: 21 Jun 2012 07:09 AM PDT

The Daily Twit (@chinahearsay links) – 6/21/12

Posted: 21 Jun 2012 05:10 AM PDT

Nothing dramatic today in Beijing, which is expected as the city is stifling under a humid veil of what I'm going to refer to as Heavenly Mucus. Others know it as smog. Hard to get excited about anything with this sort of thing up in the sky.

But the news goes on:

Reuters: China factories in eighth month of contraction — The export market still blows, and it's been that way for a while now. Folks are now talking about a U-shaped recovery. Worse than a V, but hopefully not an L, or even a W. God forbid we experience a & or a @.

Bloomberg: China Crude Imports From Iran Climb to Highest This Year — At the same time the U.S. is looking to crack down on Iran and tighten sanctions, the May numbers remind us all that China has other concerns.

Reuters: China tests troubled waters with $1 billion rig for South China Sea — Two issues here. China needs energy in a bad way, and the South China Sea geopolitical disputes are going to stick around for a while.

IHT: From Milk to Peas, a Chinese Food-Safety Mess — Nothing new here, but a very good round-up of recent food scandal news. If you're into that sort of thing. Good place to start if you are new to the topic.

Global Times: 6,000 local residents deputized as food inspectors — Apparently someone in Shanghai was nostalgic for the days when armies of grannies with armbands policed neighborhoods looking for troublemakers. This seems like a rather clumsy way to fix the food safety problem, but I guess if the problem is this bad and your human resources are so lacking, some creativity is necessary.

Beyond Brics: China makes it easier to buy equities — China has lowered thresholds and requirements for qualified foreign investors. The stock market here has been hating life amidst slow economic growth, so getting more cash into the market must sound like a good idea. There's a sucker born every minute who thinks he/she can pick winners better than the local competition. Good luck, guys.

Morning Whistle: Rumour: Lashou cancelled IPO after accounting fraud exposed — As a socially responsible resident of China, I really shouldn't pass on rumors, but what the hell. Yesterday, the news was that Lashou had pulled out because the market for IPOs, particularly Chinese companies, sucks balls. Now the story gets more complicated. We'll have to keep an eye on this one.

Bloomberg: Evergrande Slumps On Short-Seller Report: Hong Kong Mover — The latest target of short-seller Citron Research. Stock tanked in HK, so I guess mission accomplished. Whether the allegations are true or not remains to be seen.

Financial Times: Forget Grexit, it's time to fret about 'Chindown' — Finally, and just for the record, columnist David Pilling has made it onto the China Hearsay "Enemies of Mankind" list for his use of the term "Chindown," which refers to the PRC economic slowdown and the effects on global demand. Pilling might be trying to poke fun at the execrable term "Grexit," but two wrongs do not make a right. Cut that shit out, Financial Times.


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How Foxconn is Like a Salmon Boat

Posted: 21 Jun 2012 02:47 AM PDT

When I was in college (~1990) in California, the romantic summer job for those kids in desperate need of cash and willing to do anything to get it (like lose an arm) was to work on a salmon boat up in Alaska. I can't recall the details, but basically you worked insane hours for six weeks stuck on a boat. Some of those jobs paid very well, you didn't have the time or opportunity to spend your money, and you didn't even have to spend your entire summer vacation doing so.

So here's my prediction for future expats: internships in Asian factories. Might be here in China, might be elsewhere, and I don't know which sweatshops will be around in a decade or two. But mark my words, this is eventually going to look attractive to Western kids with no other options:

Foxconn is a well-known company for many reasons. But it's not necessary a company where students would like to do their internship. A report from Micgadget wrote that students from Xi'an Technological University don't really have a choice. All students who enrolled from 2010 must take up an internship role at Foxconn as part of the school's curriculum. Note that we aren't sure exactly what kind of work they will be doing, but hopefully it is something they can learn from rather than just a seat on the assembly line. (TechinAsia)

No, really. Paid internships are getting hard to find in places like the U.S., and while the Foxconn wages of roughly $240/month are still way too low to attract American kids on summer break, at least there's some money there. Let those wages rise a few more years and you never know. Give 'em some iCrap at cost, and they'll work for free.

Besides, a few years from now, Foxconn might start having trouble finding Chinese kids willing to take these jobs. Spin this as a great CV builder and life experience, and they'll attract plenty of middle-class kids from the West. Of course, they'll be terrible workers, but nothing's perfect.


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United Film vs. China Film Group: Pay Attention, Foreign Studios

Posted: 21 Jun 2012 02:23 AM PDT

In the past few months, we've all been deluged with entertainment news about foreign studios cozying up to Chinese producers and distributors. Some of these deals have been more traditional inward investment ventures, like the DreamWorks tie-up, while others have been unprecedented, such as the outbound AMC acquisition.

Since the U.S. and China struck a deal on the foreign film quota, most of the talk has been about how it was a great win-win. Foreign studios get more of their product into the country, and local distributors will enjoy their piece of the action. With China's box office receipts rising quite dramatically over the past couple of years, everyone seems happy.

Yes, but hold on a moment. I've seen a lot of distribution/licensing and Joint Venture deals over the past 13 years or so, and while everyone is still enjoying the honeymoon period, I have a pretty good idea of what might be coming in the out years.

Coincidentally, one rather obvious potential area of friction between foreign studios and distributors is in the news, although this dispute concerns two domestic companies:

Beijing-based film and television investment company United Film Investment recently filed suit against the China Film Group in the Beijing No.1 Intermediate People's Court. United alleges that the China Film Group violated a number of terms of the companies' agreement for the film My Own Swordsman, on which they cooperated, including "severe falsification" of box office profit reports. (Marbridge)

You don't need any special knowledge of the entertainment industry to understand what's going on here. Very familiar territory for most companies in China and quite a few foreign enterprises as well. Essentially, United Film was the owner of a product and made a deal with China Film Group to sell that product in return for a percentage of the revenues. Could have been anything — in this instance the product was the theatrical film "My Own Swordsman."

Now that the product has been sold, the two parties are arguing over that revenue. As we've seen countless times before, the distributor is being accused of under-representing sales. (The accusations might also involve cost issues, but I'm assuming the dispute relates to gross receipts). If the allegations are true, that would mean the China Film Group actually sold more of the product than it disclosed to United Film, pocketing all the revenue from those sales itself.

Sound familiar? I've had many clients who have either had this problem or have had to prepare against the possibility. For me, this typically crops up when negotiating and drafting a license/manufacturing/distribution agreement. The licensee is motivated to fake the documentation, so the agreement should always give the licensor the ability to perform local inspections, audit sales records, etc. Keeping multiple sets of books is a widespread practice that should be assumed.

So the good news is that the legal system, and commercial agreements, gives parties like the studios the ability to investigate and keep their partners honest. Theoretically.

The bad news is that it's easier said than done. One huge problem is that companies are quite expert at hiding information, and even if you pop in on someone to inspect their books, that doesn't necessarily mean that you will find the right data. Additionally, at least in my experience, many companies fail to utilize audit powers, even when they have local staff in China who could do so at low cost. It might be extremely difficult to uncover fraud, but if you don't even bother doing spot audits, you will definitely fail.

I'm a cynic and usually look for the poor outcome. But here, we already know that games are being played with box office receipt records (the United Film dispute is not unique), and we know how foreign licensors fare in these kinds of situations. In other words, look for more of this in the future.

How will the foreign studios react? Well, considering that many of the titles in question would have been barred entirely from the market in the past, I expect that the studios will be happy with whatever they can get and build from there. Beggars can't be choosers. On the other hand, that acceptance won't last forever, and eventually they will end up confronting their China distributors. Won't be for a few years, but it will happen eventually.


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