The Name Game Same As the Word for Disease, Virus Or Defect – All Rather Inauspicious Brand in Chinese (Pinyin Name) What It Means for a Computer Product

1 Talking Point 5 The Week in 60 Seconds 6 China Consumer Week in China 9 Auto Industry 10 Telecoms 11 Chinese Character 13 Energy and Resources 9 March 2012 14 Society and Culture Issue 141 17 And Finally www.weekinchina.com 18 The Back Page

Farewell to 8% growth m o c . n i e t s p e a t i n e b . w w w

y b g u in Premier Wen revises down growth target for year to 7.5% and promises ‘deep’ reforms o k y n o a t B s t l t h a e g b k u o r o l a r G M B C d B n S a H Week in China Talking Point 9 March 2012

After eight A new economic target stimulates debate at this year’s NPC

No, not 10%: Wen Jiabao now targets 7.5% GDP growth

hen Jilan hit the headlines again “nonsense” she claimed. Not sur- lysts this indicated a slowdown, Sat this year’s National People’s prisingly the idea didn’t find much with potentially recessionary im- Congress (NPC). As WiC pointed out favour with China’s 500 million in- plications for the world as a whole. in issue 98, she got a lot of media at- ternet users. “Her mind stays in Stock markets sold off thanks to tention at last year’s meeting Mao’s time, but she is a delegate for Wen setting the lowest growth tar- thanks to a revelation about her vot- today’s people,” complained weibo get since 2004. ing record. The 82 year-old has at- user Wang Gang. But the number was significant tended every meeting of China’s China’s annual legislative session for another reasons. As WiC pointed parliament since 1954. And as she began on Monday. Apart from Shen’s out in issue 8, there is a psychologi- proudly told the Beijing Youth Daily plan to straitjacket the web, what cal importance in China to 8% she has yet to vote against a single else came up at this year’s NPC? growth – it’s viewed as the level re- government proposal. quired to absorb school leavers and Many chief whips in the UK Premier Wen’s percentage game… graduates into the workforce. There would no doubt envy such loyalty. As usual Prime Minister Wen Jiabao is even a term ‘bao ba’ (protect 8) to But this year Shen caused contro- delivered his so-called work report – describe its strategic importance. versy with a proposal of her own. a speech that the Nikkei newspaper So departing from it – even by According to the Southern Metrop- calls China’s equivalent of the “state 0.5% – is a key signal. In fact, Wen olis Daily she wants to set up a new of the union”. used his speech to reiterate a need body to decide who should and On this occasion, Wen moved to change China’s economic model. Photo Source: Reuters shouldn’t be allowed to access the world financial markets. That’s be- “The key to solving the problem of internet. Why? Free access to the in- cause he forecast that China’s imbalanced, uncoordinated, unsus- ternet was misleading the masses economy would only grow by 7.5% tainable development [in China] is with bad information and foreign this year. For economists and ana- to accelerate the transformation of 1 Week in China Talking Point 9 March 2012

the pattern of economic development. This is both a long-term task and our most pressing task at present,” he said. Better quality growth must be sought, said Wen, through “policies that encourage consumption.”

The end of 8% growth… The Wall Street Journal commented that Wen had “signalled that an era of supercharged expansion may be coming to an end, a shift with pro- found implications for countries like Australia and Brazil that have prospered from red-hot demand for commodities.” It added that the lower growth target suggested China’s leaders don’t “intend to stimulate the economy through state-led investment, Best Debt House Best Loan House as they have in the past. Instead, they plan to let a long-touted shift away from export-led expansion to take its course.” But does Wen’s speech actually mean China will see 7.5% growth this year? HSBC doesn’t think so. “We reiterate that the lower GDP target should be seen more as the lower bound of Beijing’s range of Dim Sum Bond House Bond House of the Year of the Year acceptable growth forecasts, rather than as an actual growth forecast,” writes Sun Junwei, HSBC’s China economist. “Beijing has an impres- sive track record of overshooting its pre-announced growth targets; for example, we refer to the average of 11% actual growth versus 8% target growth for 2005-2011.” Significantly, the government’s Best Offshore RMB Best International increased focus on welfare pro- Bond House Bond House grammes means it will run a bigger fiscal deficit this year – 1.5% of GDP versus 1.1% in 2011. That is stimulative. Sun reckons “a wider deficit, plus more monetary easing should help China achieve an around 8.6% GDP growth rate for this year.”

HSBC operates in various jurisdictions through its afﬁliates, including, but not limited to, HSBC Bank plc, authorised and regulated by the Financial Wen’s speech had its critics? Services Authority, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., member of NYSE, FINRA and SIPC, and HSBC Bank USA, NA. 12-018 One of the key planks of the govern- 2 Week in China Talking Point 9 March 2012

ment’s welfare drive is an increase in affordable housing. Wen announced that spending on this would rise 23% Planet China this year to Rmb211.8 billion – with Strange but true stories from the new China five million public housing units fin- ished in 2012 and seven million DEAD WRONG. In the BBC documentary series Frozen Planet, viewers more under construction. watch as a woolly bear caterpillar reacts to a drop in the Arctic Hao Yuan, vice governor of temperature. It first freezes, then its heart stops and so too its breathing. Gansu province, was not convinced. Then as the Arctic begins to thaw, something amazing happens. “The He said local governments lacked caterpillar rises from the dead,” comments narrator David Attenborough; and we watch as it starts to move and eat its first meal in months. the funds to pay their share of af- Something akin to this just happened in China, although to a human. fordable housing costs, calling it a According to Modern Express, residents of Liulou Village in Guangxi were “major financial burden”. Speaking astounded last month by an incident involving 95 year-old Li Xiufen. After a at the Chinese People’s Political fall she’d been diagnosed with a concussion and told to rest. On the Consultative Conference (CPPCC) – morning of February 17 her neighbours found the old woman was no longer an event that accompanies the breathing, and, though still warm, assumed she’d died. Two days later she NPC – he said local governments was placed in a coffin in her home along with some burning incense and a don’t have enough capital or land, bowl of rice. The morning before her scheduled burial, neighbours again nor (interestingly) the incentive, to entered her home and were stunned to see Mrs Li sitting on the floor, very build affordable housing. much alive and making porridge. The elderly woman told them she’d That wasn’t the only note of dis- woken at dawn and felt hungry. sent. Also speaking at the CPPCC, Chen Feng objected to a passage in Wen’s speech that referred to idea of carbon trading, but apply it Guangdong, Chongqing and Shang- China’s “blind development” of instead to China’s one-child policy. hai. That’s because they represented wind and solar energy and calling Li suggested that poor rural resi- a constituency that historically has for its “suppression”. The chairman dents could sell their right to have a been ignored by China’s parliament: of HNA Group thought the prime second child to wealthier urban migrant workers. minister had sent out the wrong sig- families. “The state should establish The role of Hu Xiaoyan, Hong nal and said so on a panel. The gov- a trading platform for those with Houming and Zhu Xueqin is to act ernment, Chen believed, should demand to apply and those with a as a voice for the migrants and air actively support ‘new energy’ rather legitimate ‘quota of fertility’ to their concerns and grievances. But than talk of its suppression; an ac- transfer,” said Li. This would com- as the newspaper points out this is tion he deemed “inappropriate”. bine family planning with “enhanc- quite a challenge. After all, it’s tough Wen’s strong language could just ing national competitiveness”. for three delegates to fully repre- cause more problems for the nas- Li’s other suggestion: he wants sent 242 million people. cent industry, he added. anyone convicted of robbery to be Conspicuously not present this WiC isn’t suggesting a new era of sent to China’s northern deserts to year were any of the ‘independent parliamentary debate has begun. plant trees. “Let them atone for their candidates’ who made such a media But such public criticisms are an in- crime by greening the environment, splash last year (see WiC109). Cir- teresting development; and cer- which is beneficial to eliminating the cumventing the usual processes tainly less choreographed than in root causes of their lazy thinking,”he they’d tried to become delegates by bygone sessions. commented. announcing their candidacy on Sina Proposals like these abound at the Weibo, China’s Twitter-equivalent. Were any other interesting com- NPC. But few of the delegates’ ideas Leading the charge was sports ments made at the event? ever become government policy. writer Li Chengpeng from Chengdu, One NPC delegate getting attention whose campaign attracted popular was Li Xinghao, chairman of air- Who was there and who wasn’t? acclaim. But the absence of any in- conditioning firm Chigo Group. This year there were 2978 delegates dependent candidates at this year’s Photo Source: Reuters Nanfang Daily reports that he had selected for the NPC (although 54 NPC shows the movement essen- two fairly radical and controversial were absent). South Weekend sought tially failed. proposals. to briefly cast the spotlight on three However, the most high-profile The first seems to build on the delegates, who were attending from delegate not to show was Wang 3 Week in China Talking Point 9 March 2012

cussed why he favoured waiving a variety of unhelpful corporate taxes.

Time to reform, says Wen Going back to Wen’s ‘state of the union’ speech, CCTV noted the premier used the word ‘reform’ more than any other term – on 70 occa- sions in fact. The South China Morning Post concurred that this was the key theme in his speech. The Hong Kong-based newspaper said Wen “vowed to accelerate reform of the mainland’s economic structure by You won’t find Wang Lijun here focusing on raising household earnings and breaking-up state- Lijun (see WiC138). The deputy That view is likewise reinforced by owned monopolies… and singled mayor of Chongqing has been de- Guangdong Party boss Wang Yang’s out six areas for deepening reform tained in mysterious circum- confident swagger at this year’s NPC. which included taxation, the fi- stances. In a press conference a Widely regarded as a leader of the re- nancial system, income distribu- spokesperson for the CPPCC said form camp, he suggested scrapping tion and the government’s role in Wang had asked for “leave” not to lengthy introductions and applause the economy.” attend this year’s NPC – but without for officials at government meet- All told, this NPC will probably be specifying why. ings, trimming ministries’ powers remembered for Wen’s clarion call Wang’s absence seems to further to veto projects and strengthening for “deepening reform”. But by the confirm the view that those who intellectual property rights. His time he delivers his final work re- favour the cause of reform are in the ‘small government’ credentials port next March, just how ‘deep’ ascendant (see last week’s issue). again came to the fore when he dis- should become clearer. n

Gun money

It’s funny how the same piece of news can generate such different headlines. At the weekend the BBC’s website ran with “China military budget tops $100 billion” emphasising this psychological milestone. China Daily’s front page on Monday had a different spin: “Defence spending sees lower growth”. Both are true. For the first time China’s defence budget – at $106.4 billion – exceeded $100 billion; but the growth rate of 11.2% was less than last year’s 12.7%. The difference in headlines is no surprise, mind you. China’s growing military prowess is becoming a sensitive subject. Li Zhaoxing, spokesman for the National People’s Congress, population almost 22 times smaller than China). Still,

Illustration: www.benitaepstein.com was at pains to reiterate the increase was Nikkei reported that Japan’s government is “carefully “reasonable and appropriate” and that China’s watching China’s double-digit increase in defence rising defence budget posed no “threat to world spending”. Asia is set to outspend Europe militarily peace”. On a per capita basis it was much lower for the first time in modern history this year, reports than most other major countries, he explained (the the Financial Times – largely because of China which UK spends $63.7 billion, for example, and has a comprises 30% of the region’s spending.

4 Week in China The Week in 60 Seconds 9 March 2012

Talk of the town The major news items from China this week were...

Opening this year’s National People’s Congress 1(NPC), the annual meetings of China’s legislature, Premier Wen Jiabao (who is retiring next year) an - nounced that the government aims for economic growth of 7.5% this year, after aiming for 8% for each of the last eight years. GDP in 2011 grew by 9.2%. Ana - lysts say the move indicates China’s willingness to rec - oncile slower growth in exchange for more balanced and sustainable development.

Wen also declared that China remains committed to 2regulating the real estate market and strictly enforc - ing policies and measures discouraging speculative or investment-driven housing demand. The goal: to bring Applauded: Wang Yang, Party boss of Guangdong property prices back to a more reasonable level. This is bad news not only for property developers but also local Keep your friends close but your enemies closer? governments that rely on land sales for income. 4Boeing announced this week that it has formed a partnership with Commercial Aircraft Corp of China, or Meanwhile, Wang Yang, the Communist Party chief Comac, a nascent competitor in jet manufacturing, to re - 3of the southern province of Guangdong, stole the search ways to make planes more fuel-efficient and cut show this year, making a splash on the front page with a greenhouse-gas emissions. It is the first alliance between series of proposals to on how to shake up China’s politi - America’s Boeing and Chinese government-owned cal culture, said the Beijing Times. During the NPC, the Comac, which is developing the C919, a potential threat reformist suggested scrapping lengthy introductions to Boeing’s 737 and the Airbus A320 family in the single- and applause for officials at government meetings, trim - aisle plane market. ming ministries’ powers to veto projects and strength - ening intellectual property rights. The European Union has accepted complaints from 5its solar cell makers about dumping by their Chinese rivals, and is likely to soon launch an official investiga - tion. Such a ruling would be even more devastating to Chinese solar cell makers than a similar ruling likely to come soon from the US, as Europe now account for a hefty 80% of all of China’s solar-related exports, with shipments of solar panels to the EU worth more than $30 billion in 2010. P

h China will soon resume the approval and construc - o t o

o tion of nuclear power plants, said Wang Yuqing, for - u 6 r c e

: mer director of the National Nuclear Safety

R e u t e Administration. He told the China Daily that 10 approved r s

S new nuclear plants, whose construction was put on hold h u t t e r last year after Japan’s Fukushima nuclear accident, will s t o c k Boeing announces partnership with C919 maker soon be given permission to start construction. n 5 Week in China China Consumer 9 March 2012

What’s in a name? The thorny issue of translating a brand into Chinese

he importance of names goes strange. When it first launched in German name. On the downside, Tback a long way in China. More China in the 1920s, the name ‘Keke neither of those characters really than 2,500 years ago Confucius Kenla’ was concocted by local means anything to a Chinese ear. wrote: “If names be not correct, lan- shopkeepers. Atlanta wasn’t too HSBC’s name, on the other hand, guage is not in accordance with the pleased to discover it meant ‘tad- puts more emphasis on meaning truth of things… Therefore a supe- poles bite wax’ in Chinese. A than phonetics. ‘Huifeng’ – the rior man considers it necessary that Shanghainese academic later won bank’s name since its founding in the names he uses be spoken ap- a competition held by the US firm China in 1865 – translates as ‘gath- propriately.” Bearing in mind this and came up with what is widely ering prosperity’. That’s a powerful ancient advice, it follows that every regarded as the best rendering of a name for a financial institution. foreign company is well advised to Western consumer brand into Chi- Quite a few prominent firms carefully consider how their brand nese: ‘Kekou Kele’. have experienced problems with translates in Chinese. Why? Because it ticks two boxes. their Chinese names. For example, Indeed, as our Talking Point last Phonetically it sounds almost iden- the earliest Chinese translation for week made plain, the issue of names tical to the original American soft Mercedes-Benz was ‘Bensi’. That is very much on the agenda for for- drink’s name. But just as impor- may sounds pretty good until you eign firms. International brands – tantly, its characters conjure up all hear it means ‘rush to die’ in Chi- such as Apple and Hermès – have the positive imagery a marketing nese. Likely evoking images of found themselves in court defend- executive could desire. It means ‘de- crash-test dummies in the Chinese ing their trademarks. licious tasty happiness’. mind, executives in Stuttgart soon CEOs know the importance of Another good one is ‘Naike’. rebranded the luxury car as brand awareness and likewise the Nike’s name sounds broadly similar ‘Benchi’ (meaning ‘to run quickly growing influence of the Chinese too, and conjures up another evoca- as if like flying’). consumer on their sales. Good tive meaning: ‘‘Enduring and per- A bad Chinese name can effect a names sell more product. That’s why severing’. firm’s success says Ray Ally, execu- CBN Weekly reckons every multina- However, perhaps the best in- tive director of Landor Associates, a tional should pay close attention to stance of a Chinese name being brand consulting firm. For instance, how Coca-Cola got its Chinese name. translated almost perfectly is Audi. Microsoft’s search engine Bing faced It notes that Coca-Cola’s initial In Chinese it is ‘Aodi’, which pho- potential ridicule in China when it Chinese translation was very netically sounds identical to the launched, reports the New York Times. That’s because in Mandarin, the pronunciation of ‘bing’ is the The name game same as the word for disease, virus or defect – all rather inauspicious Brand In Chinese (Pinyin name) What it means for a computer product. To avoid Coca-Cola Kekou Kele ‘Delicious tasty happiness’ this Microsoft elected to change the Nike Naike ‘Enduring and persevering’ BMW Baoma ‘Precious horse’ search engine’s name in China to ‘Bi HSBC Huifeng ‘Gathering prosperity’ ying’ – ‘responds without fail’. Mercedes Benz Benchi ‘To run quickly as if like flying’ Hewlett Packard Huipu ‘Universal kindness/blessing’ For more on the topic of translating IKEA Yijia ‘Suitable family home’ Marriott Wanhao ‘10,000 wealthy eites’ foreign brands: in issue 59 we ex- Marvel Comics Manwei ‘Comic power’ plained how Carlsberg got its Chi- Tide Detergent Taizi ‘Gets rid of dirt’ nese name, and see WiC99 for why BMW named itself after a horse. n 6 Week in China China Consumer 9 March 2012

The big spenders Taobao releases data on online shopping habits

ccording to Taobao, Putian, a weibo: “If you have to pick a hus- Asmall fishing town in Fujian band choose Ningbo men.” province is China’s breast-en- The Taobao data also shows hancement capital. The country’s search habits, revealing that in biggest online shopping site, which Shanxi province, the most recently released a set of consumer searched terms last year were data about online shopping pat- “Winnie the Pooh” and “sexy lin- tern in China, says 2.3% of online gerie” – an odd combination. And Bought by a Ningbo male? shoppers in Putian bought breast- people from Jiangsu province seem enhancing products last year, the obsessed with Steve Jobs and Ap- year, marketers will increasingly highest in the country. ple products, two of the most find its data a rich seam to be mined Other quirky data also emerged highly searched keywords. as they seek to understand regional from Taobao’s statistics. For in- The island city of Zhoushan in consumer trends. stance, young women from the Xin- Zhejiang is said to be the most cul- jiang region in northwest China are tured, with the highest sales of art- not only the country’s biggest shop- related products and musical in- pers for bikinis (odd given that Xin- struments. It is also the most health jiang is not only far away from the conscious, with China’s highest Air of ocean but also notoriously dry), they health product purchase rate. Opportunity also have the country’s largest aver- Meanwhile Nanjing is the best-read age bra size. city. Over a quarter of the city’s Air purifiers are big business Meanwhile, women from Zhe- Taobao users have paid for books jiang province are the most gener- online, spending over Rmb54 mil- ince the beginning of this year, ous girlfriends and wives, spending lion ($8.5 million) in total. SBeijing – caving to public pres- more money on men than women People in Shanghai are known to sure – has started publishing hourly from any other part of the country. love shopping. It’s also known to be air pollution readings (including the In 2011, of the 10 cities that topped China’s fastest aging city. Taobao’s highly controversial PM 2.5 reading, the list of female users that pur- data supports this too. Shanghai has see WiC134). But now, with more ac- chased male products, eight of them the highest number of online shop- curate data, Beijing residents are were from Zhejiang. And as it turns pers aged over 50, with 89 out of more worried than ever about health out, they are also thoughtful moth- every 100,000 Taobao users falling problems caused by poor air quality. ers. Of those that purchased educa- into that age group. But improving air quality is go- tional baby products through It is the first time Taobao has ing to take a while. So in the mean- Taobao, the top seven spots were oc- shared consumer data with the pub- time, residents in the capital are re- cupied by cities in Zhejiang. lic. Analysts say the move could in- lying on air purifiers to filter the Not to be bested, Zhejiang men – dicate a new business line. It could increasingly foul air. Sun Chenjing, a or more specifically men from the signal the Alibaba-owned firm’s 28 year-old doctor who is planning coastal city of Ningbo – love spoiling move into offering consulting serv- to have a baby, recently spent more their partners. Taobao’s statistics re- ices to its merchants, says Dave than Rmb10,000 ($1,580) on two pu- veal that 78% of the city’s male on- Carini, managing director of Maver- rifiers for her home. “I don’t want Photo Source: Reuters line shoppers bought something for ick China Research, a technology my baby to fall prey to the city’s pol- women last year, the highest per- consultancy. lution,” she told the China Daily. centage in the country. After the With Taobao accounting for As it turns out she is not the only news came to light, many wrote on Rmb4.4 billion of daily sales last one. Zhongnanhai, the Communist 7 Week in China China Consumer 9 March 2012

Party’s leadership compound, ap- pollution is. A filter usually requires formaldehyde pollution is unique parently makes ample use of huge replacing once a year in other parts in the world,” explains Song Guang- air filters, too. No wonder electronics of the world. But it’s once every sheng, Director of the National In- retailer Gome Appliances says sales three to four months in China,” says door Environment and Environ- of air purifiers in Beijing have grown Wen Hui, president of Yadu, one of mental Protection Product 80% in the second half of 2011 from China’s largest purifier makers. Supervision and Inspection Centre. the prior six months. Analysts say while the main func- Meanwhile, domestic manufac- However, not all purifier makers tion of purifiers in most foreign turers say they are struggling to keep are enjoying a boost. Surprisingly, countries is to eliminate pollens and up with customer demand. Yadu domestic manufacturers have been inhalable particles, in pollution- says sales went up by more than 50% outselling foreign ones, says South heavy China, air-purifying ma- during the Lunar New Year com- Weekend. That’s because Chinese chines need to handle the heavy pared with a year ago. Yuandan, an- shoppers have been complaining task of detoxification and disinfec- other local producer, recorded an that the filters of foreign purifiers tion. China’s home-produced puri- even bigger spike – sales increased can’t handle the country’s unusu- fiers are designed for heavy-duty 300% year-on-year in the second ally heavy pollution. He Bing, cleaning (it’s not the first time we’ve half of 2011. As South Weekend notes, deputy dean at China University of indicated how local appliances are Haier and Midea, two of the coun- Political Science and Law, told the made to more demanding specs; see try’s biggest appliance makers, will China Daily that his foreign branded WiC53 for our explanation of why also soon start making air filters. purifier’s filter was soot-laden just Haier designed washing machines China’s ‘indoor environment pro- 10 days after he cleaned it – and pro- capable of cleaning potatoes). tection’ market is reckoned to be duced ink-coloured, dirty water. “Foreign countries use air clean- worth Rmb100 billion annually – Why? “Foreign brands simply ers for a more healthy and eco- and evidently is growing as fast as can’t imagine how serious China’s friendly environment. China’s the nation’s pollution. n

Who’s Hu: Li Chuntu Profiles of China’s business leaders

Getting started billion in five R&D centres between 2002 and 2004. But his Li Chuntu was born in 1961 to a farming family in Linxiang, Hunan finances were challenged after he branched out into other province. Despite training to become a teacher, his first job was in industries, but with little success. a state-owned restaurant, where he rose to become manager. Li started raising more capital. Preparations for an IPO started At the age of 30, with just Rmb300 in his pocket, Li in 2006, when Prince Milk received $73 million of moved to Shenzhen to try his luck in the private sector. cash from a series of investors. The following In 1993, after a number of failed ventures, he was able year, it got a Rmb500 million low-interest loan. Li to enlist the help of Mao Zedong. It was the hundredth agreed to some tough terms – if profits failed to anniversary of the great helmsman’s birth. Li borrowed grow annually by 50% over the next three years, Rmb100,000 from the bank and printed a batch of he would hand over his controlling stake of the commemorative Mao calendars. They proved a hit – company to the investors. It was a bold move, but allowing Li to net his first million. it worked for a while. At the end of 2007, he was ready to list in the US. Big break Then the financial crisis occurred. His bank With the profits, Li founded Zhuzhou Prince Milk in asked for its money back. To make things worse, 1996, a company making lactic acid drinks. This was a the infamous poisoned milk scandal became It all went sour new product for China, so marketing was crucial. The public. Prince Milk’s sales slumped and Li was next year, Li decided to pay a massive Rmb88.88 million forced to hand over his stake to the investors. to get prime-time advertising slots on CCTV. The ads were a Prince Milk went bankrupt and Li was arrested under suspicion success, allowing the company to bring in orders worth more than of illegal fundraising. Rmb80 million by year end. In 2005 profits reached Rmb100 million compared with Rmb29 million in 2002. By 2007, the Need to know company was one of China’s largest dairy companies. Recently Li was released from prison due to insufficient

Photo Source: CFP evidence. Having lost both his health and his fortune, he told Setback Security Daily that he failed because he was “too confident Li not only spent heavily on his core business, investing Rmb2 about himself especially when facing the big issues.”

8 Week in China Auto industry 9 March 2012

Government car-tel A new procurement list for official vehicles

or many years, a Red Flag limou- month, the government published a Fsine was the height of commu- list of cars that can be purchased by nist chic. These bulky, but officials: not only did it exclude for- Not red enough for China surprisingly elegant, cars are still eign brands, it also left out domes- rolled out at important ceremonies tically produced cars made by joint year, the largest monthly drop for – Chinese leaders from Deng Xiaop- ventures between Chinese and for- more than three years, according ing to Hu Jintao have all attended eign companies. to Reuters. National Day celebrations standing With foreign companies out of Some say it is only natural for aloft from an open-topped Red Flag. the picture, the list consists entirely Chinese officials to drive Chinese As a vehicle for the newly rich, of local names. Geely Automobile, cars. “State leaders in many coun- however, the Red Flag has not Shanghai Automotive Industry Cor- tries ride their home-brand vehicles flown so high. When shopping for poration (SAIC), and Jianghuai Au- and I think our own officials should a luxury car, Chinese business- tomobile (a state-owned firm from do so as well,” Dong Yang, deputy people prefer buying a foreign Anhui) are all well represented. head of the China Association of Au- brand rather than something rem- Perhaps the biggest beneficiary tomobile Manufacturers, told iniscent of a bygone communist is Great Wall Motor Company, Bloomberg. It’s a legitimate point. age. Even government officials – China’s major manufacturer of The South China Morning Post re- surely the Red Flag’s natural client SUVs, which has 50 models on the ports that while the EU Chamber of base – have proven keener on rid- list. Official procurements are ex- Commerce in China viewed the move ing in an Audi. pected to lead to an extra 30,000 as “discriminatory” it would not re- It looked as though the Red Flag SUVs sold in 2012, reports 21CN Busi- taliate and stoke trade tensions. brand, which was established by Mao ness Herald, adding at least Rmb500 But it’s too early to start feeling Zedong in 1958, would not survive in million to the Chinese firm’s rev- sorry for officials having to give up the new era of competition – pro- enues. Great Wall will be taking busi- their foreign luxury cars. For a start, duction of the cars stopped in 2010. ness from foreign rivals such as Toy- there is some scepticism over But the government looks set to ota and Mitsubishi. whether the new rules will be prop- raise the Red Flag once more, due The move towards domestic erly enforced: “Even if a list like this to a recent decision to make the procurement could be a major becomes a real policy, it’s unlikely it C131 Sedan the official car for min- blow to Audi. Analysts believe that is going to be enforced aggressively,” isters, reports the People’s Daily. the Chinese government annually an attorney at a foreign car com- The company that owns the brand, spends between $13 billion and $16 pany told the Wall Street Journal. “I state-owned First Auto Works, re- billion on cars, and an estimated have heard it and seen it before.” cently green-lighted new produc- 30% of official cars are Audis, re- And as South Weekend points tion. FAW intends to invest Rmb2 ports Bloomberg (see WiC83 for ar- out, the most senior officials, such billion ($280 million) on the brand, ticle on Audi selling its millionth as government ministers, can with 30,000 of the C131s to be pro- car in China). choose cars from outside the produced next year. (The revival of Red But black A8s may no longer be curement list, even foreign cars. Nor Flag has been on the cards for some shuttling so many officials through is it certain that they will driving time: WiC first wrote about it in is- China’s congested streets. The around in a Red Flag, since there Photo Source: Reuters sue 76). change in the procurement policy have already been a number of at- This is part of a broader drive to comes as the local car industry tempts to revive the brand (three give state procurement of cars a struggles. In January, the number times between 1987 and 1990), none more domestic focus. Late last of cars sold was down 24% year-on- of which have been successful. n 9 Week in China Telecoms 9 March 2012

Setting standards China Mobile plans 4G domination

hina has long been the world’s But that would require tweaking the Cbiggest mobile market. Now it device to work with the TD-SCDMA has claimed a new title: the first standard, something Apple was re- country in the world to reach one luctant to do. Instead, Apple signed billion mobile phone subscribers. with China Unicom, and more re- That’s some incredible growth. cently China Telecom, to distribute Recall that China had exceeded 500 the iPhone. million mobile phone users in 2007, Learning its lesson, the world’s which means its mobile market has biggest carrier is looking to improve Gee up: TD-LTE is coming doubled in the last five years alone its situation as it prepares to roll out (India, too, is closing in, with 900 a 4G network which allows even “One of the key lessons of TD- million mobile users). faster data services. China Mobile SCDMA is that, despite the power of But despite having over a billion recently gave an update on the de- China Mobile, they cannot create a mobile subscribers, the use of third- ployment of the homegrown Chi- global ecosystem on their own,” says generation services remains low in nese standard, TD-LTE (see WiC60). Tucker Grinnan, head of Asia tele- China. Government figures show At this year’s Mobile World Con- com research for HSBC. “TD-LTE pro- that 3G penetration is less than 14% gress, the industry’s must-attend vides the potential for a global-scale of total subscribers. China Telecom convention, Li Yue, president of technology with a viable global leads the way with about 30% of its China Mobile, told reporters that Bei- ecosystem.” users on its 3G network, followed by jing, Tianjin and Qingdao will be in- Already, China Mobile has been China Unicom with 21%. But drag- cluded in a large-scale trial of TD-LTE aggressively promoting the use of ging down the ratio is China Mobile, in China starting this year. The addi- TD-LTE technology both at home which saw only 8.2% of its total user tion brings the total number of cities and abroad. But it’s not going to be base using its 3G services. that will take part in the test to nine. entirely straightforward. In the US, The main problem for the slow “If the expanded large-scale test mobile carriers Verizon Wireless and adoption is the homegrown 3G stan- is successful this year, China Mobile AT&T have both launched 4G net- dard, TD-SCDMA (see WiC3). China’s will increase the number of TD-LTE works using the European rival 4G government, which owns all three base stations in China to more than technology FDD-LTE. of the nation’s wireless carriers, gave 200,000 in 2013,” says Li. One reason is that development the two smaller carriers licenses to Analysts say this time around of supporting equipment for TD-LTE operate tried and tested foreign-de- China Mobile has a shot at reversing has lagged behind that for FDD-LTE veloped protocols that are used in the fate it suffered with 3G. That’s by more than six months. But TD- other markets. But it saddled China largely because it has worked to LTE has advantages: it makes more Mobile with developing TD-SCDMA, build international support for the efficient use of wireless spectrum, the homegrown 3G wireless tech- 4G technology. For a start, the mo- a scarce resource, says the Wall nology. Beijing reckoned the com- bile carrier announced that Apple Street Journal. pany’s sheer size – it has 655 million has promised that future iPhones That could sway operators who subscriber accounts – would help will be able to run on TD-LTE. Qual- know smartphones are using ever promote the technology. comm, one of the world’s biggest more data, pressuring their network That explains why China Mobile chipmakers for both cellphones and capacities. India’s Bharti Airtel, and has missed out on Apple’s popular telecoms equipment, too, has Softbank in Japan have said they will iPhone. The US group has been in agreed to develop chips based on adopt the protocol. US wireless-ser- talks with China Mobile about a pos- the standard, providing more mo- vice provider Clearwire, too, said it sible iPhone carrier deal for years. mentum for its development. would run tests on TD-LTE. n 10 Week in China Chinese Character 9 March 2012

The secret of my success Zhu Gongshan’s GCL-Poly manages to unite private and state ownership

ustin Powers billed himself as Aan “international man of mystery”. He was, of course, a fictional character created for the big screen by Mike Myers. But in China there’s a real-life candidate for the ‘man of mystery’ label. His name is Zhu Gongshan, and for years he has fas- cinated local media. He was in the news again recently when he accompanied Xi Jinping – China’s leader-in-waiting – on his tour of the US. On the trip Zhu signed deals to build solar power plants co-financed by American financial institutions. Under the new agreement it’s envisaged Zhu will build more than 1GW of solar power across the US, starting with an initial Zhu Gongshan: a well connected guy project to provide 64% of the energy needed by Southern California’s a Vacheron-Constantin or a Rolex. lack such examples. His story melds Palmdale Campus – doing so in dou- And, says the interviewer, he chose risk-taking with state capitalism, dy- ble-quick time, by October. not to invite him to his office, but nastic family networks with na- Zhu’s firm is GCL-Poly, and ac- instead to an anonymous hotel. On tional energy policy; entrepreneuri- cording to 21CN Business Herald his top of this discretion, “he spoke to alism with Party connections. As seven polysilicon plants have an an- me using the phrases and cadences WiC has repeatedly reported, an on- nual capacity of 46,000 tonnes – of a Senior Party official, so when going trend in China over the past ranking its production top in the he talked, for example, of his five or more years has been guojin- world. Polysilicon is the main ma- wealth being ‘for society’ – to some mintui – which literally translates terial in solar panels, and Zhu is extent he seemed to be following as ‘the state advances as the private reckoned to be able to produce it for the Party line.” sector recedes’. It’s been a major a lower price than others thanks to The energy company boss only source of debate (see WiC135), the his economies of scale. That’s made bristled when asked about Western gist of which being: is state capital- him very rich – his wealth is esti- companies’ attitudes to his success. ism crowding out entrepreneurial mated to be $2 billion. “Of course, they are envious,” he businesses? Zhu and his firm are an However, he is low-key and al- said. “I have done in a few years interesting case – offering a hybrid most never gives interviews. In a what took them (much longer).” that appears to marry state and pri- rare exception he met a journalist Then again, how Zhu achieved his vate ownership. Photo Source: China Imagine from the BBC. The 54 year-old busi- rapid ascent is the main element of He was born in rural Jiangsu in nessman proved hard to categorise. mystery that surrounds him. He is 1958, probably at the right time. He He did not flaunt his money like emblematic of a type of business- majored in electrical studies before many new-rich tycoons, wearing a man little understood in the West – becoming an electrical salesman in “humble” Citizen watch rather than if only because Europe and the US his hometown of Funing in 1978 – 11 Week in China Chinese Character 9 March 2012

the year China began its economic kilogram were on offer, but Zhu Rmb10 billion line of credit from reforms and opening to the world. elected instead to sign eight year Bank of China in 2010.) He eventually set up his own firm, supply contracts with grateful cus- The first thing was to establish and as his ambitions increased he tomers at prices of up to half the scale in silicon wafers. Four months registered the GCL Group overseas, then spot. Analysts calculate he gave after he started production on his with the aim of investing in China’s up Rmb10 billion of short-term Xuzhou-based factory, Zhu was pro- power sector. His first deal: to build profits, to make a long term bet. It ducing his own wafers. Thanks to a thermal power plant in Taicang. helped, notes 21CN Business Herald, state investment he also had the The year was 1996 and signifi- that he could produce the raw ma- funds to acquire capacity – buying cantly Zhu’s co-investor was Hong terial for $20 per kg. Gaojia Solar Energy (Wuxi) for Kong Continental Mariner Invest- It proved a smart move. During Rmb854 million. By the end of last ment – the largest shareholder of the financial crisis in 2008, other year, the aggressive push saw GCL- which was Poly Group. In other producers got hammered when Poly’s silicon wafer production ca- words, points out South Weekend, pacity reach 3.5GW, accounting for his big break or “coming out” was almost 30% of global supply. thanks to a state firm, and not just Last year his expansive strategy any one. Poly historically had close moved into solar power plants too, ties to China’s army as well as to the with overseas markets part of his vi- family of Deng Xiaoping, the na- sion (completed projects in the US tion’s former paramount leader (for amounted to 4.8MW in the first example, the current president of half). In just over five years, Zhu – Poly is the husband of Deng’s third who is the firm’s chairman and CEO daughter). So when Zhu’s company – has become one of the biggest became GCL-Poly it was evident to players in the solar industry. Even all that it had connections in the cor- with polysilicon spot prices having ridors of power. collapsed to $40 per kg, he has Over the next decade he would moved downstream, and used his build 20 plants – without ever in- cost advantage to grow stronger at curring the wrath of China’s five the expense of rivals. large state-owned power producers. According to Bloomberg, China In 2007 he listed GCL-Poly in Hong already accounts for half the world’s Kong and became known in China, solar cells and 45% of polysilicon says South Weekend, as ‘the King of Still a sunny outlook? production. That looks like only in- Private-run Power’. creasing. GCL-Poly – which made He’d built coal-powered and bio- polysilicon prices plummeted to be- Rmb3.5 billion ($555 million) of net mass generators for the most part, low $100 per kg. His contracts profit in the first half of 2011 – plans but in 2006 he had a business helped Zhu profitably weather the to increase its polysilicon capacity epiphany: the future was in solar storm and weed out weaker com- to 65,000 tonnes this year. energy. He invested Rmb7 billion petitors. He instead used his cash- The secret of this rapid success, a ($1.1 billion) to found Jiangsu Zhong- flow to up his capacity – by 2008 he GCL-Poly insider told South Week- neng Silicon Technology, to produce accounted for half of all China’s end, was twofold. Zhu “dared to bet polysilicon, the raw material of the shipments of polysilicon, remark- big” and the firm had connections: photovoltaic industry. His strategy – able for a new entrant. “Whatever things happen in Beijing, unlike Suntech and Yingli which In 2009 he took another key de- Poly will come forward.” made solar panels – was to start at cision. GCL-Poly would acquire To outsiders, GCL-Poly might look the upstream end of the business Jiangsu Zhongneng and then like a typical state-owned firm, and attain dominance there first. make silicon wafers and begin to growing on the steroids of cheap Almost immediately he made a build solar power plants. Once capital. Evidently, that’s a factor in far-sighted decision. At that time again a big state partner would en- its rise. But it’s not the whole story. Photo Source: Reuters the world was facing a ramp-up in ter the fray to help Zhu achieve his Zhu’s success is not only about his demand for solar panels and a short- vision. Sovereign wealth fund CIC connections – it owes much too to age of polysilicon to make them. On pumped $710 million into his firm his vision and the boldness of his the spot markets, prices of $500 per for a 20% stake. (He also got a decisionmaking. n 12 Week in China Energy and Resources 9 March 2012

Fuelling crime Diluted petrol is choking up the engines of China’s cars

p until a few years ago, at market intelligence company Umelamine was known prima- SunSirs, told 21CN. rily for its use in industry, as a ma- Unscrupulous suppliers of petrol terial used to produce hard-wearing benefit in two ways. Firstly, they are plastics. In 2008, it became more able to reduce their costs by adding widely known for its part in China’s ingredients that are cheaper than most infamous food scandal. Dairy petrol. And since the aromatics are farmers were adulterating their not subject to the fuel tax, their pur- milk with the chemical so they chase cost is further reduced. could pass off watered-down milk One solution to fix the problem to their customers. would be to place a putative con- The drawback is that prolonged Did you fill her up in Kunming? sumption tax on the aromatic addi- consumption can cause kidney dam- tives. There are some signs that such age. Thousands of children ended up nese New Year, large numbers of a move could be imminent – the re- in hospital and several died. cars in the southwestern cities of cent spike in the import of aromat- Adulteration was in the news Kunming in Yunnan and Guiyang in ics suggests that the fuel adulterers again this week. This time drivers Guizhou started to suffer from ex- expect the imposition of a tax, and were learning about another malign actly the same problems: jittery en- are therefore currently stockpiling chemistry involving aromatic hy- gines, stalling, and increased ex- ingredients. drocarbons – a set of chemicals that haust fumes. These are all effects Some believe that a modification are used to dilute the petrol supply. typical of using adulterated fuel. in how the fuel tax is collected could At best, these chemicals can dam- The problem is caused by a short- make watering down fuel less at- age a car’s engine. At worst, they can fall in the refining capacity of tractive. The tax is currently levied pose a serious health risk. One aro- China’s oil majors, CNPC (whose off- on the quantity of fuel that is re- matic, benzene, is a known carcino- shore listed entity is PetroChina) fined. If it were to be collected at the gen. It is not only a danger for peo- and Sinopec. In order to ensure that petrol pump instead, the govern- ple working with the petrol, it can they have enough petrol at their re- ment would be, in effect, taxing also survive combustion and come tail outlets, it’s claimed they have to both the petrol and the aromatics. out of the exhaust, potentially caus- outsource from other sources. These The tax evasion issue is an im- ing wide-ranging health problems. suppliers will mix aromatics into portant issue. The ratio of petrol to The use of aromatics is not a new the petrol before handing it over to aromatics in adulterated fuel is typ- problem, but it is one that is getting CNPC or Sinopec. ically 6:4, which means that for more severe – especially in smaller Smaller distributors of petrol – every tonne of petrol sold, Rmb550 Chinese cities and remote areas. private retailers or small state- of fuel tax is avoided. A change in C1 Energy estimates that around owned firms – often water down the fuel tax combined with better 12.5% of China’s petrol consumption their own fuel, allowing them sell at monitoring of the fuel supply could consists of diluted fuel, reports 21CN lower prices than the big state- put an end to this murky industry. Business Herald. The paper also owned firms. With no local refiner- “If the fuel tax collection moves to cites dramatic statistics relating to ies, Guizhou exemplifies these prob- the gas station, the tax evaders will the import of aromatics: up 50% in lems. “Guizhou relies entirely on find it unprofitable. And if quality Photo Source: Reuters 2011 overall, with a monthly rise of other provinces for its refined oil, inspection departments strengthen 113% in December alone. so the supply pressure is huge. Once their supervision, the mixed petrol The latest area to be hit was the the supply is short, pressure to out- will naturally disappear,” says an oil southwest of China. Just after Chi- source rises,” Sang Xiao, an analyst company insider. n 13 Week in China Society and Culture 9 March 2012

Till death two us part The death of an actress highlights the problem of domestic violence

ove, deceit, and murder: the tale Lof Bai Jing, China’s best-known kung-fu actress seems to have all the elements that would spawn a successful script or even a TV show. Last week the 29 year-old actress – who was hailed to be the next Michelle Yeoh – was killed in a domestic dispute with her husband Zhou Chenghai. Zhou, a wealthy business tycoon, committed suicide after he stabbed his wife in their apartment in Beijing last Tuesday. Earlier reports say the billionaire businessman had previously di- vorced his first wife to be with the actress and had made large invest- ments in Bai’s acting career, says 21CN Business Herald. On their wedding day: Bai Jing with Zhou Chenghai Ju Chunlei, an entertainment industry manager and friend, told the friends also confided in the newspa- made in heaven: he was talented media that the couple had been per that Bai had complained that and she beautiful. What a pity that quarrelling for a long time. Zhou’s Zhou was physically abusive and a he had the determination to kill his brother also revealed to the press serial adulterer. wife and even take his own life, but that Zhou was severely depressed af- Meanwhile, there were reports he didn’t have to courage to face the ter the death of their mother in Jan- that Zhou’s mother had “died of problems in life?” uary. But even though “my brother anger” after allegations earlier this Critics say the murder again high- was wrong to kill Bai. He wouldn’t year that Bai had a triad boyfriend, lights the problem of domestic have committed the crime if he was- and colluded to embezzle Rmb20 abuse in China. Almost a quarter of n’t being pushed to the edge.” million ($3.16 million) from her hus- Chinese women have experienced So what happened? The facts are band, says NetEase Entertainment. domestic abuse, according to the All elusive with the case still under in- There was also speculation that Bai China Women’s Federation. Most vestigation. But Legal Evening News, had hired a prostitute to seduce victims of domestic abuse are which did an extensive article on the Zhou so she could gather evidence women, but children, some men murder, says Bai had reportedly filed to divorce her husband, from which and, increasingly, the elderly, suffer for divorce from her husband back she would get more money. too. Surveys suggest that around in February, less than two years after Bai’s tragic death has stunned the 90% of offenders are men. they tied the knot. She discovered country, with many taking to the in- Zhou Kai, a lawyer from the Bei- that Zhou had not only lied about ternet to express their shock and jing-based Renhe Law Firm, told the his marital status before they were grief. Director Zhang Tongzhu, who Global Times that the law does pro-

Photo Source: CFP married (he was married when he has worked with the actress, wrote hibit such violence, but the prohibi- met her), he also lied about his real on Sina Weibo: “In my mind, Bai is tion is scattered among different age and the fact that he had a child an innocent girl and worked hard.” statutes. One big reason is the tradi- from the previous marriage. Her Another wrote: “They were a match tional concept that domestic vio- 14 Week in China Society and Culture 9 March 2012

lence is a family’s internal affair. In April, some 500 people in Hu- “Family ugliness must not be aired,” nan province had to be hospitalised goes one of China’s most familiar after eating clenbuterol-contami- sayings, which means: don’t talk nated pork at three different wed- about bad things happening at ding banquets. Their symptoms in- home. cluded heart palpitations, sweating But that may be about to and nausea. change. China’s National People’s In an editorial entitled “Allowing Congress (NPC) will mull whether ordinary people to eat healthy meat to legislate against domestic vio- is more important than gold lence when it meets this week, says medals,” Hunan’s official news web- the China Daily. site said people would prefer it if the Meanwhile, another gruesome country forgot about sporting great- story has grabbed headlines. Zhou ness until it had sorted out basic Yan, a 17 year-old girl from Anhui problems such as a secure and safe province was burned and disfigured food supply. by Tao Rukun, the son of a local gov- But, as is often the case, China’s ernment official. According to Less meat for Liu microbloggers tried to make a joke Zhou’s mother, Tao – in a rage after out of a dark situation. the beautiful teen rejected him – Sports has banned its Olympic “So it seems if you don’t want showed up at their house last Sep- hopefuls from eating meat outside to worry about the food’s safety, tember carrying a bottle of lighter their training centres, says na- you should enroll you kids in the fluid. He doused it over her daugh- tional media. national sports programme,” ter’s head and set her alight. Zhou’s “No athletes can go out for meals weibo user Classicwords wrote on face was disfigured, an ear muti- without permission. We have to be his account. lated, and 30% of her body was cov- that strict due to the food safety is- “You never know, they might ered with second and third degree sue,” Xiao Haopeng, chief of the even grow up to be an Olympic burns. Tao has been locked up. Chinese shooting team, told the champion as well,” he quipped. Shanghai Daily. It reported that in order to com- ply with the ban, marathon runners training up on the Tibetan Plateau On a diet in the southern province of Yun- Softer messages No meat, we’re Olympians nan were raising their own chick- Old posters to be taken down ens and sourcing yak meat from lo- hat do Western celebrities cal herdsmen. “ ill all your family if you don’t Wand Chinese pig farmers But while most Chinese would Kfollow the rule” or “If one per- have in common? On the face of it, like to see the country’s athletes do son has an excess birth the whole not much, but one thing poten- well at the Olympic Games in Lon- village will undergo tubal ligation tially connects them is the use of don this summer, many have been [i.e. sterilisation]”. clenbuterol. angered by ban, which they see as More than 30 years after the one- While in countries such as the further evidence of China’s lousy child policy was first introduced, US the illegal steroid-like substance food safety record. these early violent slogans can still is used by stars to rapidly lose As readers of WiC will know, be found daubed on walls across ru- weight, in China it is used (paradox- China has been rocked by a string of ral China. ically) by farmers who want to bulk food scandals in recent years: in Now in a bid to reduce the num- up their livestock before slaughter. 2008 thousands of infants were poi- ber of people choosing to violate the Athletes, however, are banned soned after consuming melamine- policy, China’s National Population from taking it by the International laced baby milk and last year people and Family Planning Commission Photo Source: Reuters Olympic Committee. were appalled to learn that as much has launched a campaign to have But such is the ubiquity of the as 10% of the country’s cooking oil is these outdated pieces of propa- drug in Chinese agriculture that illegally recycled from kitchen waste ganda removed. the General Administration of or gutters (see WiC 140). “These cold and intimidating slo- 15 Week in China Society and Culture 9 March 2012

gans spark resentment and antago- Though the one child limit only has dubbed it, has been negative. nism and have triggered a large num- applies to around 40% of the popu- Many netizens asked why bother ber of conflicts,” Zhang Jian, the head lation, many more people are lim- removing the slogans if, at their of the commission’s propaganda de- ited to only having two children. core, family planning policies are to partment, told the People’s Daily. Increasingly people are unhappy remain the same. He added that the commission at these limits and finding ways, Others said they should stay as plans to replace the old slogans with such as going abroad to give birth testament to the brutal methods “warmer” more “people friendly” (see WiC 136), to get around them. that have been used to control the ones that stress the benefits of hav- And even people who can’t afford population during the last 30 years. ing smaller families and raising to go abroad are getting round the “This is history. This is evidence of daughters. law by paying a fine after the baby is the tears and blood of Chinese peo- One of the unintended conse- born or giving birth anonymously ple. Face washing is not important. quences of the one-child policy is a away from home (also see the NPC What’s important is what the family shortage of women because many proposal in Talking Point). planning commission will do from families choose to have a boy if they But reaction to the “face wash- now on,” netizen Xiaomuyuerdiary can only have one baby. ing” campaign, as the commission wrote on her weibo account. n

Brush Strokes | Fuhao – ‘the rich and powerful’

1 Contemporary Fu 2 Oracle bones Fu 3 Fuhao (rich and powerful)

Chinese netizens were shocked last week to read that the richest Hoogewerf’s Shanghai-based Hurun Report and data from the 70 members of their legislature, the National People’s Congress, Washington DC-based Centre for Responsive Politics to draw were extremely ‘fu’ 富 or ‘wealthy’. They added more to their the comparison. wealth last year than the total net worth of all 535 members of The original pictogram of fu, 富，shows a roof, the United States Congress, the president, his Cabinet, and the underneath which is a wine flask, indicating that where wine nine Supreme Court justices combined, according to Bloomberg was in plenty so was money, according to Li Leyi’s Tracing Business News. the Roots of Chinese Characters. With tycoons today busy Of course being members of the NPC makes them powerful snapping up expensive red wine, that’s easy to understand. too – so they are fuhao, 富豪，or ‘the rich and powerful’. Later the character evolved: under the ‘roof’ were instead The revelation that the net worth of the 70 richest placed 高 (high) and 田 (field), suggestive of amassing land delegates to the NPC, which opened on Monday in Beijing, then wealth. rose by nearly Rmb73 billion ($11.5 billion) last year, quickly Hao, 豪,is a curious character: according to Richard Sears’ spread on Sina Weibo – only to be erased, with the authorities website, chineseetymology.org, the top part is derived from the apparently nervous about the impact of the information. character gao, 高, and gives the character its sound (it’s a The richest 70 NPC members’ wealth easily trumps the $7.5 “productive phonetic”), while the lower half, shi, 豕, means pig. billion net worth of all 660 top officials in the three branches of While it’s tempting to joke that perhaps a person who is the US government, Bloomberg reported. By comparison the 70 powerful is a “top pig,” with pigs in China an important part of NPC members are worth $89.8 billion. That might seem a bit daily life and also symbolising wealth, that wouldn’t be correct, skewed: per capita annual income in China in 2010 was $2,425, and we probably need to accept that the origin of the pig in this a fraction of the $37,527 in the US. character may be obscure. Bloomberg used publicly available information from Rupert The term fuhao is synonomous with ‘tycoon’.

16 Week in China And Finally 9 March 2012

Changing the bowl No more jobs for life for civil servants

hina’s 10 million strong civil Last year bureaucrats in 24 of Cservice is often viewed as the China’s 31 provinces and regions lost last vestige of China’s ‘iron rice their access to free health care and bowl’ culture. this year new regulations were pub- If an applicant passes the notori- lished that prevent people from the ously difficult state exam (the same family from serving in the Tough to crack gaokao) he or she is almost assured same department. a job for life, as well as social stand- “The new system will exert pres- Several newspapers pointed out ing and power. sure on those who don’t take their that there is no evidence that Shen- Such is the appeal of a position in job seriously,” Xinhua quoted a pro- zhen’s pilot scheme had led to an the country’s bureaucracy, that peo- fessor of Social Sciences at Nanjing increase in the number of civil ser- ple pay thousands of renminbi for University as saying. vant firings or efficiency. exam coaches and often attempt the The ability to hire from outside “It is too optimistic to equate test multiple times. should also help with the shortage the new system to a porcelain rice Last year some one million peo- of bureaucrats with technical skills, bowl yet. No one has heard of any ple applied for around 17,000 Xinhua said. As the nation develops, appointee in Shenzhen losing places. it explained, the government has to their job,” the Yanzhao Evening But last month the govern- deal with increasingly complex and News wrote. ment announced an initiative that specialised problems. Internet users posting on Sina could significantly reduce career While many newspapers cele- Weibo were the least optimistic of spans of mandarins. brated the news of the trials, many all. “The original intention of the re- The provinces of Jiangsu, bemoaned the fact it has taken form plan is good, it should improve Sichuan, Hunan and Hebei are to provinces so long to do so. It became initiative and change civil servants’ start hiring bureaucrats on con- legal to hire outside experts in 2005 sluggish and tardy ways. But I still tracts of between one and five years, but so far only Shenzhen has taken don’t hold high hopes for this Xinhua reports. the plunge. thing,” one netizen wrote. “After all, The move is part of wider reforms “This is simply re-frying cold rice” where there are policies, there are that seek to improve the efficiency wrote the China Daily. “If we really countermeasures to deal with them of China’s state bureaucracy and re- want to break the civil servants’ iron and bureaucrats who have back- duce the perception of its civil serv- rice bowl we need courage and de- ground and connections will never ice as a corrupt and pampered elite. termination,” it said. be kicked out.” n

Bad loan reassurance

“The level of bad loans at the biggest banks is healthy and stable” Photo Source: Shutterstock

* Yang Kaisheng, the president of Industral and Commercial Bank of China (ICBC) also told Bloomberg that new lending at China’s big four banks was up Rmb20 billion in the first two months of the year versus a year earlier. Yang Kaisheng

17 Week in China The Back Page 9 March 2012

Photo of the Week In Numbers $10.2 billion The net worth of Robin Li, founder and CEO of Baidu, China’s dominant internet search engine. He topped this year’s Forbes ranking for Chinese richest people, replacing Liang Wengen, the founder of Sany Group, who this year came second with $8.1 billion.

Photo Source: China Imagine 600 The number of China’s US dollar billionaires, says Hurun in its annual China Rich List. About half of the group of 600 is made up of “shadow billionaires”, the report said, who do not reveal their identities. As for US dollar millionaires, Look what’s cooking, Tim Cook: a gas stove manufacturer in Wuhan rips there are at least 960,000 in China. off the Apple iPhone logo. Around 681 stoves were seized by officials $12.2 billion The amount Chinese shoppers spent buying electronics online last year, according to a Where is it? report by market research firm Analysys Some of the places referred to in this issue International. The figure represents a 200% year-on-year increase. Booming online demand for computers, communication Beijing products and consumer electronics Tianjin contributed to the growth of the B2C market. Qingdao China $18.7 billion Shanghai Net profits of China National Tobacco, the Chengdu Zhejiang state-owned tobacco company. Though its 2011 figures weren’t disclosed, analysts say they could be larger than the Guangxi Guangdong 2011 net profits of HSBC and Wal-Mart, Shenzhen Hong Kong which reached $16.8 billion and $15.7 billion, respectively.

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