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1 Talking Point 5 Week in 60 Seconds 6 Aviation Week in China 7 Banking and Finance 8 Energy and Resources 9 Economy 11 Environment 19 July 2013 13 Society and Culture Issue 202 16 And Finally www.weekinchina.com 17 The Back Page Shanghai’s surprise! m o c . n i e t s p e a t i n e b . w w w

Premier Li Keqiang announces a new free trade zone in China’s commercial

capital. Should Hong Kong be worried? Brought to you by Week in China Talking Point 19 July 2013

In the zone Li Keqiang makes bold push to create a free trade area in Shanghai

My word is my Bund: Premier Li bulldozed his way through bureaucratic opposition to the free trade zone

hen Deng Xiaoping began the he had been repulsed by the behav - to opening Pandora’s box; and Wlong process of reforming iour of Shanghainese capitalists and probably worse if you added over - China’s broken economy after three their ‘foreign imperialist’ friends in seas money to the mix. decades of Maoist policies, his bold - the quasi-colonial concession areas. In the wranglings over the new est idea was to create a special eco - Born in poverty – and later self-edu - zone’s location, Chen took an any - nomic zone. The goal? To lure cated – Chen saw the bustling hub as where-but-Shanghai stand, and as foreign firms and to foster an envi - a hotbed of inequality. When British Ezra Vogel notes, his political capi - ronment in which free market busi - police fired on a crowd of workers in tal was sufficient to swing the de - ness practices could be tested. May 1925 – killing several protesters cision. Given Shanghai’s pre-eminence – the 20 year-old joined the Commu - “Chen worried that the ‘com - in the 1920s – when it was China’s nist Party. Chen would rise through prador mentality’ of bending to the commercial capital and home to the ranks to become the ‘father of will of foreigners remained alive 300,000 foreigners – the city was Chinese economic planning’ (see and well in Shanghai; he opposed mooted as a possible site for the WiC189), and the standard bearer for making Shanghai an experimental zone. But its chances were shot leftist economics. area and his view carried the day,” down by Chen Yun, who in the late Nearly six decades later, Chen writes the Harvard historian. 1970s was effectively Deng’s num - retained an instinctive distrust for So a small fishing village called P h o t

o ber two. his hometown and the moneymak - Shenzhen was given the privilege

S o u r Chen was actually a native of ing DNA of its citizens. Give the instead. c e :

R e Shanghai but that turned out to dis - Shanghainese a sniff of capitalism, However, 35 years later Shanghai u t e r s

advantage its bid. Growing up there Chen thought, and it would be akin is finally getting its chance, courtesy 1

Week in China Talking Point 19 July 2013

of China’s new prime minister, Li Keqiang. Against some internal op - position, he has given Shanghai a free trade zone (FTZ).

Why is it significant? At a symbolic level the announce - ment reinforces the sense that eco - nomic reform is back at the top of the agenda. After all, the move trig - gers memories of the 1980s, a trans - formational period in which a series of special economic zones were cre - ated. Their success set China’s econ - omy on a new course, leading to a wave of privatisations in the 1990s, as well as further policies designed to encourage entrepreneurial activity. Bright prospects: Shanghai’s new free trade zone should boost growth Market reformers have had a less happy time over the past decade, government functions, redefine What will it encompass? with state-led capitalism appearing and rationalise the relations be - In a free trade zone, goods can be im - to be in the ascendant during the tween the government and the ported, manufactured and re-ex - Hu Jintao administration. market and society.” ported without intervention from This was epitomised by the trend Li’s first domestic trip as prime customs authorities. This one will known as guojinmintui – a term minister, says Century Weekly, was span 28 square kilometres in Pudong that translates ‘the state advances as deliberately made to Shanghai. The and be the first of its kind in main - the private sector recedes’. It was an city had tabled a proposal to create land China. era in which state-owned enter - a free trade zone in 2005 but the According to the Shanghai Daily, prises and politically-connected in - idea had failed to gain traction. But the city’s Party Secretary Han Zheng terest groups did particularly well. in March Li reportedly told Shang - said of the move: “The central gov - The first indications that the re - hai officials to pursue the idea once ernment has allowed Shanghai to formers were making a comeback more, saying it would help China to run this pilot programme, making came in January last year when build “an upgraded economy”. He the city a pioneer in the govern - newspaper editorials began trum - asked them to come up with a list of ment’s efforts at reform. Shanghai peting the anniversary of Deng Xi - policy changes that would be re - should continue to be a role model aoping’s 1992 Southern Tour (see quired to make it a success. By May in accelerating reforms, and this WiC136). This historic event was a he had received 21 suggested initia - programme will be among the most deliberate gesture on Deng’s part, tives, reports the South China important missions for the city in throwing his political clout behind Morning Post. the second half of this year.” market reforms at a time in which Immediately, there was opposi - He added: “The top priority right conservative factions were seeking tion to the idea. now is to design a set of laws and to oppose them. According to the Hong Kong rules to regulate the zone when it Today it looks like Li Keqiang is newspaper, both the securities reg - starts to operate.” picking up the reform mantle from ulator (the CSRC) and the banking Clearly, policies need to be ap - Deng. As we pointed out in WiC186, regulator (the CBRC) pushed back proved in a number of areas. For Li is the first premier to have against a number of the policies the example: the matter of the cur - trained as an economist. At his first Shanghai officials were floating. But rency. As is well known, China im - press conference as premier he told Li appears to have shown little pa - poses capital controls which P h o reporters: “Reform is about curb - tience for the delaying tactics, ap - prevent renminbi from flowing t o

S o u ing government power. As a self- parently rebutting each objection, freely in and out of the country. In r c e :

S imposed revolution, it will require and then approving the new zone – its first phase it is not thought that h u t t e r real sacrifice and will be painful. quite possibly in record time – at a Shanghai’s free trade zone will s t o c k

The core of the plan is to transform State Council meeting on July 3. evade these restrictions. 2 Week in China Talking Point 19 July 2013

In the short term what could be more significant is the way in which Planet China foreign banks will be able to set up Strange but true stories from the new China subsidiaries in the zone. The official proposal also says explicitly that in - terest rates in the zone will be liber - MAKE BELIEVE. The late Robert Ripley, founder of the ‘Ripley’s Believe It alised, with market forces to or Not!’ franchise, was so drawn to Chinese culture that he once signed his determine the cost of capital. name “Rip Li”. Now a museum in China is challenging his brand of What else? Red tape for foreign odditorium. The Jibaozhai Museum in Hebei’s Jizhou City opened in 2010 companies setting up in the zone after a Rmb50 million ($8.8 million) investment. The four-storey treasure will be reduced. And foreign firms house claims to contain over 40,000 ancient relics and the collection gets will also be able to operate in indus - the Jibaozhai triple-A rating from tourism authorities. State enterprises and tries previously subject to restric - local schools saw it as a popular spot for educational tours. That was until a tions. For example, news has blog post last week by popular writer Ma Boyong revealed that much of the museum’s content is bogus. emerged that video games console Ma visited Jibaozhai’s collection following rave reviews from a movie makers like Nintendo, Sony and Mi - producer, who revealed on his weibo how he had been stunned by the rich crosoft will be able to sell their de - heritage on display. But once there, Ma soon realised that the large vices in China, provided they are collection of “national treasures” were clumsy forgeries. One ceramic vase made in the zone. For the last 13 claiming to date back to the Qing Dynasty depicted a modern cartoon. years these consoles have been Some of the chinaware showed scenes from novels that weren’t written at banned by the authorities in Beijing the time of the pottery’s alleged production. (although they could be obtained Ma’s acerbic verdict: “Between me and this bullshit museum, surely one on the black market). of us has gone insane.” The museum – which charges entry of Rmb30 per That ban had proved a fillip to person – hasn’t respnded to Ma’s comments. But the People’s Daily reports China’s domestic games makers that local authorities plan to close it down soon. and to internet giants like Tencent, which have profited heavily from the sector. The idea behind this the shopping. China’s luxury tax (one reason mothers buy foreign move is to create more competition means that items like Swiss watches formula in the territory is that they in the local games market. and Burberry trench coats are much fear the stuff sold on the mainland Other proposals support Shang - cheaper in Hong Kong (depending is sub-standard or fake). hai’s stated goal of becoming a lead - on the item, the tax ranges from It may be a coincidence but the ing international financial centre by 27% to 59%). In future, says the Eco - Shanghai Daily reported this week 2020. Accordingly, Chinese banks nomic Daily, those same shoppers that Hong Kong is now considering will be allowed to conduct offshore might be lured to malls in the new lifting the restriction on infant for - banking using units in the FTZ. Com - zone (which will have zero duty and mula purchases – a measure that modities trading in the zone will also zero tax) charging similar or has been in place since March. be considered as offshore too. And cheaper prices. Rather than take foreign commodity exchanges will their kids to Hong Kong Disney, they And as a financial centre? be allowed to own warehouses there will go to the Pudong Disney near The zone’s more obvious threat to (currently they have none in main - the zone instead. Hong Kong is as China’s sole off - land China, the nearest being in Business, a Chinese magazine, shore banking centre. Hong Kong is South Korea and Singapore). agrees that mainland tourists may currently the place where rich Chi - prefer going to the new zone in nese deposit their ‘rainy-day’ or con - What does it mean for Hong Kong? Shanghai. After all, in Hong Kong tingency funds. In recent years it has The Shenzhen Economic Daily Chinese visitors are limited to been positioning itself as the lead - thinks it could have major ramifica - bringing back two cans of foreign ing banking hub for offshore ren - tions for Shanghai’s main rival. Cur - baby formula. In the free trade area minbi too. As part of that it has built rently Hong Kong benefits from its in Pudong, they may be able to load up the dim sum bond market (where unique status in a number of ways. up with a suitcase full – sold by for - issuers tap into renminbi circulat - For instance, in recent years hordes eign firms in the zone that manage ing outside China). of mainland Chinese have flocked their supply chains to the same Could Shanghai’s new zone – to the territory to take advantage of level of integrity as in Hong Kong with its emphasis on attracting for - 3 Week in China Talking Point 19 July 2013

eign and domestic financial firms – threaten Hong Kong’s market leadership? Obviously, yes, and particularly so if the zone proves successful in attracting a critical mass of major companies. The po - tential is huge: there aren’t many places where a “mini-Hong Kong” can be injected into a metropolis that already numbers more than 23 million people. Then again, challenges will need to be overcome, not least in repli - Han Zheng: Shanghai Party boss will be in charge of making zone work cating some of Hong Kong’s ‘soft’ infrastructure, such as its legal ex - Ah yes, the timing… rates as he seeks to rebalance the pertise. While it’s hard to quantify, One reason Hong Kongers won’t be economy. And also, that he favours there’s also the institutional value hitting the panic button just yet: the the tougher medicine of structural of Hong Kong’s history as a British free trade zone’s opening date is un - reform over the easier tonic of mas - colony, its proven rule of law and its confirmed, says Shanghai Daily. sive government stimulus. status as a special administrative re - Clearly much more detail is required The stratagem is being touted as gion, i.e. sovereign but separate. on how the zone will work, too. ‘Likonomics’. And with its greater Regardless, the Hong Kong-based Other cities in China will be watch - emphasis on competition and mar - SCMP is anything but complacent ing jealously and may lobby hard ket mechanisms, the new Pudong on hearing news of Shanghai’s new for Shanghai not to get too many free trade zone is the most visible challenge. The new zone “threatens new privileges. indicator yet of the long-term di - to eclipse Hong Kong’s traditional But the zone is also being taken rection that Li’s economic policy role in China’s economy,” the news - as a message that reform is back on may take. paper warns. Could it be time to go the agenda, with Li Keqiang ready to WiC suspects that – were he still short on Hong Kong’s vastly over - tread a new path. The theory is that alive – Chen Yun would not be priced property market? he is ready to accept lower growth pleased… n

Thanks for nothing

Debbie Stabenow is a bit sensitive about pandering to the Chinese. As we reported in WiC138, her Republican opponent in her Senate re-election campaign ran a controversial TV ad tarring her as a Beijing ally. Aired during the Superbowl, it featured a Chinese girl in a paddyfield saying: “Thank you, Michigan Senator Debbie Spenditnow. Debbie spends so much American money. You borrow more and more from us. Your economy gets very weak. Ours gets very good. We take your jobs. Thank you, Debbie Spenditnow.” So perhaps it is no surprise that Stabenow wants to talk tough when it comes to China. That’s had ramifications for Shuanghui, which is in the midst of purchasing US pork giant Smithfield. Stabenow chairs the Senate’s powerful agriculture committee and in hearings last week sounded anything but enthusiastic about the deal. She has even deemed

I the takeover a national security issue, calling for a “Cfius” review. During l l u s t r a the hearing she said: “Smithfield might be the first acquisition of a major t i o n :

w food and agricultural company but I doubt it will be the last. Could this sale w w .

b happen if it were the other way around? Based on what we’ve heard, it e n i t a sounds like the answer is ‘no’.” The Chinese definitely won’t be thanking e p s t e “Debbie Spenditnow” this time around. i n . c o m

4 Week in China The Week in 60 Seconds 19 July 2013

GDP slows again The major news items from China this week were...

China’s GDP slowed to 7.5% in the second quarter of 12013, down from 7.7% during the first quarter, data from the National Bureau of Statistics showed this week. According to HSBC’s co-head of Asian economic research Qu Hongbin the fall was due to weak exports and slow - ing manufacturing investment. The bank forecasts that full year growth will be 7.4% but says the latest data shows Beijing is “focusing on structural reforms with a higher tolerance of slower growth”. HSBC added that “slowing momentum” will continue in the second half.

Beijing officials say they are looking to capital ac - 2count liberalisation as a way to give investors more choices outside China. But a speedy liberalisation of Police keep an eye on protesters in Jiangmen city cross-border capital flows could produce net outflows from China equal to as much as 15% of the country’s The China Banking Regulatory Commission has de - GDP, roughly $1.35 trillion, said the International Mone - 4manded that the commercial banks provide detailed tary Fund. Of that sum, the Chinese would send as much information of each wealth management product on a as $2.25 trillion overseas, while foreigners would invest new electronic platform 10 working days before they $900 billion in China. begin selling it to the public. The new rule will give the regulators more information on these high-yield prod - Plans for a nuclear fuel processing and equipment ucts and could slow the speed at which they come to 3manufacturing centre in Guangdong province were market, said the Wall Street Journal. cancelled a day after protesters filled the streets to op - pose the project. The government of Jiangmen city said Typhoon Soulik, the strongest typhoon to hit China it was no longer considering the Rmb30 billion ($4.8 bil - 5this year, struck Fujian province last weekend, after lion), 229-hectare industrial park that had been planned slamming Taiwan with heavy rain. Soulik forced the for the satellite town of Heshan. The statement came evacuation of some 300,000 people, plus the cancella - roughly 24 hours after more than 800 residents tion of flights and train services in the province, as well marched near the Jiangmen municipal government as in neighbouring Zhejiang. Xinhua said almost 31,000 compound to protest against the plan. ships were called back to port too.

Two months after reports first emerged that in - 6ternet portal Sohu was looking to sell its Sogou search engine, a sale may be imminent to security software maker Qihoo 360. Industry observers believe that Qihoo would combine its own so.com search serv - ice with Sogou to create a major new player with a quarter of China’s search market. Meanwhile, Baidu signed an agreement to buy 91 Wireless, one of China’s P h o t

o largest online mobile-app stores, for $1.9 billion in an

S o u r acquisition designed to gain a greater share of the mo - c e :

R e bile user market. The purchase would be Baidu’s u t e r s Damage from Typhoon Soulik largest to date. n 5 Week in China Aviation 19 July 2013

Dark skies The past week has produced bad news for Chinese flyers

ne wonders if there weren’t a Ofew public relations experts back in 2004 who cautioned Boeing against naming their new passen - ger jet the Dreamliner. If so, there was another “I told you so” moment last week, as an - other fire, this time on a parked plane at London’s Heathrow airport, gave the newspapers another op - portunity to headline that its prov - Wreckage of the Asiana plane that crashed in San Francisco ing a less a ‘dream’ for Boeing and more a ‘nightmare’. doo then published an open apol - “I think China should also apolo - The cause of the fire is still un - ogy in several Chinese newspaper gise! If wasn’t for the high ticket clear, although it now seems that including the People’s Daily and the price [of Chinese airlines], they the fire did not originate in the air - Zhejiang Daily. In it he promised a wouldn’t have had to go to Korea to craft’s lithium-ion batteries, as a se - thorough investigation and greater transfer,” wrote another. ries of other blazes did earlier this training for his pilots (the pilot in Direct flights from China to the year (a situation that grounded control of the 777 at the time of the United States cost some 40% more Dreamliners for three months). crash had landed the aircraft just than flights on Asiana via Seoul, Nevertheless it still capped a bad eight times before). and given that many Chinese pas - week for Boeing. Six days earlier “I express my deep condolences sengers already have to travel to one of its 777 planes crash-landed to the victims of the crash and their Beijing, Shanghai or Guangzhou in at San Francisco Airport with the families. I promise to help the in - order to get a US flight, that means loss of three lives. In this case pilot jured Chinese passenger make a flying via Seoul isn’t regarded as es - error, not a technical fault, was to speedy recovery,” he said, adding pecially onerous. blame. Asiana Airlines, the South that he hoped his airline could “re - Asiana flies to 21 Chinese cities Korean carrier, took the reputa - gain the trust of the Chinese peo - daily and to 8 destinations in the US, tional hit this time. ple”. (Asiana makes 16% of it rev - making it the third largest foreign What does all this have to do enues flying Chinese passengers.) carrier in China, according to the with China? Quite a lot, for the sim - Netizens, some of whom had ex - Wall Street Journal. ple reason that almost half of the pressed their grief by posting icons Indeed, if a report from the web - Asiana flight’s passengers were of lit candles, took the apology site Flight Stats last week is to be be - Chinese. The three fatalities were well, saying it was an honourable lieved, anything that allows people all Chinese too, 16 year-old girls thing to do. Others added that, de - to avoid the airports in Beijing and from Zhejiang province on their spite the accident, they would not be Shanghai is a bonus. way to California to attend sum - boycotting the airline because the Based on statistics compiled in mer school. other carriers that fly to the US are June, the two airports are the worst In the immediate aftermath of so expensive. in the world for delayed flights – P h o t

o the accident, a South Korean TV an - “I fly back to college [in the US] only 18% of departures leave on

S o u r chor erred badly by expressing his every year on Asiana,” wrote one time from Beijing – although New c e :

R e relief that none of the victims were weibo user. “What has happened is York’s LaGuardia just beats them u t e r s Korean. Asiana’s CEO Yoon Young- sad, but I will still use them.” both on flight cancellations. n 6 Week in China Banking and Finance 19 July 2013

Bank job Bankers see Alibaba as biggest competitive threat

ack Ma, founder and chairman of What are the implications? The JAlibaba, China’s largest e-com - move will help Alibaba’s loan pro - merce group, is known to be an out - gramme grow quickly, as well as al - spoken critic of the state-owned low investors to access a higher- banks. That view prompted his yielding and diversified group of Taking on the banks: Ma move into finance in 2004, when borrowers. WiC reported in issue 165 he developed the online payment that Alibaba had begun making mi - to invest directly in a fund pegged system Alipay to help consumers cro-loans to its corporate clients to corporate debt and government buy products from his own sites based on the cashflow data it col - bonds. The service, named Yu’ E Bao, and across the internet. In 2009 Ma lects monitoring their sales on its became an instant hit. In just 18 also started a service called Ali-loan, sites. It has lent more than Rmb100 days Yu’ E Bao users have reached a partnership with some of the billion in the last three years, with 2.5 million, collectively depositing banks to help small businesses ac - the average loan value hovering at Rmb6.6 billion ($1.1 billion). In cess loans. around Rmb40,000. terms of client numbers Yu’ E Bao is “Banks should support small- and Industry observers believe that already one of China’s biggest funds medium-sized businesses. But the investors will be keen. The average – and that’s with no major market - banks can’t, for whatever reasons,” length of Alibaba’s loans is 123 days ing effort. he observed last year. and non-performing debt amounts One reason for Yu E Bao’s popu - That sentiment was echoed again to just 0.87% of total outstanding larity is that the fund can offer a in a recent interview with the Peo - loans (as of the second quarter), ac - forecast annual return of 3.8% (by ple’s Daily: “China’s financial in - cording to company data. investing in money market funds), dustry, especially the banking in - Alibaba’s latest move is good compared to no interest when dustry, only serves 20% of clients, news for SMEs too, in freeing up money is left in the Alipay account, and I see there are 80% of the more liquidity to provide loans to or the 0.35% offered on typical bank clients are not covered. Financial the type of smaller firm that often deposits. The investment can also services should be about serving has trouble in obtaining traditional be withdrawn at any time if users the layman, rather than playing in - bank finance. “The government want to pay for shopping or other side your own circles and making wants something that is more effec - bills via Alipay. money yourself,” says Ma. tive,” Victor Wang, a Hong Kong- Should traditional banks be wor - To that end, Alibaba announced based analyst, told Bloomberg. “The ried about the new competition? last week that it has partnered with loans that Alibaba offers are all for Hong Qi, president of China Min - Orient Securities Asset Manage - small and micro enterprises, which sheng Bank, which lends to small- ment to sell asset-backed securities is something that the government and medium-sized enterprises, told based on loans that Alibaba has pro - wants. Traditional banks usually National Business Daily that Alibaba vided to small businesses using its cater to state-owned enterprises.” has become its “biggest competitor”. e-commerce platforms. The plan, Industry observers say that Al - “We must pay attention to Jack which has won approval from the ibaba’s financial operations are too Ma’s business model, which is CSRC, the securities regulator, could small to have a major impact on the something banks have never done generate a 6% return annually for wider economy. But Alibaba seems before. The future is going to be investors, underpinned by repay - ambitious in its plans to do more in about analysing large databases to P h o t

o ments on the loans. the financial services industry. Late offer responsive financial services.

S o u r Alibaba says total issuance of the last month it also launched an on - It will change our traditional way c e :

R e securities will reach Rmb5 billion line money market fund that allows of thinking and our way of life,” u t e r s ($813.9 million). Alipay users with accounts online Hong admits. n 7 Week in China Energy and Resources 19 July 2013

In the pipeline Oil giant finds funding from insurers

nyone with doubts about the a 30% and 20% stake respectively Aimportance of China National in the new firm. Petroleum Corp should look at the The contract stipulates that in - career paths of its former bosses. vestors cannot sell their stakes for at Earlier this year, Jiang Jiemin left least 10 years but that they receive his role as chairman of CNPC to be - annual returns worth more than For insurers, piping’s hot come the head of the State-owned 6.2%, according to a source speak - Assets Supervision and Administra - ing to the Economic Observer. bank financing wasn’t involved in tion Commission (Sasac), the organ - CNPC has the right to purchase the deal. After all, the pipe project isation that overseas large state- the stakes of the other shareholders that underlies the joint venture is a owned enterprises (for more on after the 10-year window closes. quality asset that will provide a sta - which, see WiC45). But what makes the deal particu - ble cashflow. In fact, Century Weekly reported at larly interesting is its structure. “One important reason is that the time that it is typical for CNPC’s Taikang is investing via a consor - banks no longer have a price advan - senior management to go on to great tium that comprises nine Chinese tage on such loans,” a Taikang stake - things. The magazine points out that insurers. Similarly, the Guolian por - holder told the Economic Observer. the head of Fujian province was a for - tion is made up of a number of local Furthermore, the long-term na - mer vice president at the oil firm, investment funds. So the deal has ture of the project might be less at - while an earlier president of the com - the appearance of a syndicated loan, tractive to banks in tying-up capital pany went on to become Sasac’s with a wide range of investors for a protracted period. Party secretary. stumping up money. This kind of For CNPC the venture seems like The question now is whether Jiang arrangement is not common in a smart way to fund its expansion will take bolder steps to shake up the China, but if it proves successful it programme, which already consists state-owned giants. And those look - could develop into a new route for of a range of expensive long-term ing for clues on how he might go companies to receive financing. commitments, including buying ac - about his new job might look at an Certainly, Jiang thinks that the cess to oilfields and building the in - unusual CNPC deal that originated deal structure by his old firm is im - frastructure to extract, move and under his tenure. portant, as it allows private in - distribute its resources. Last month CNPC signed a con - vestors to get regular returns from The problem with investing in tract with Taikang Asset Manage - stakes in stable, state-controlled such massive projects is that it puts ment and the Beijing Guolian En - companies, reports ChinaScope Fi - pressure on working capital. In ergy Industry Investment Fund to nancial. These private shareholders March, when the deal with the in - set up a joint venture. It is called should, in theory, also impose surers was being thrashed out, CNPC Pipeline United and is a busi - higher standards of corporate gov - CNPC’s working capital was negative ness that will construct and operate ernance on company management. Rmb79.7 billion, reports Century oil pipelines. There are signs that the govern - Weekly. So it makes sense for CNPC PetroChina, the listed arm of ment is keen to encourage this kind to have as broad a range of financing CNPC, will inject its West-East of funding: the approval process, channels as possible. Zhou Jiping, Pipeline assets – valued at Rmb20 overseen by the insurance regulator, the company’s chairman, said at a billion ($3.25 billion) – into the JV only lasted two days, reports the Eco - news conference in May that the P h o t

o in exchange for a 50% stake. nomic Observer. firm will “promote joint-venture co -

S o u r Meanwhile Taikang and Guolian In the same way that it is notable operation and promote an asset- c e :

R e will invest Rmb36 billion and that CNPC sourced funding from in - light strategy,” the Economic Ob - u t e r s Rmb24 billion in cash each, taking surers, it is also noteworthy that server concluded. n 8 Week in China Economy 19 July 2013

Red justice Corrupt rail minister is finally sentenced

“ prince who does wrong must Views on Liu’s sentence are more Abe punished like anyone else.” mixed than you might imagine. Cutting a deal? Liu avoided death These words of advice from “There are many officials who give statesman Shang Yang to his ruler Liu a lot of credit for what he in comments that soon went viral. Duke Xiao of Qin in the fourth cen - achieved,” the London-based Tele - To make matter worse the court tury BC were offered as a proviso for graph quoted Wu Qiang, a professor which heard his case in Changsha creating a powerful, stable state. of politics at Tsinghua, as saying. also took to weibo to defend itself, More than two millennia later “They think he was capable and had a saying it was not legally obliged to and the warning has been doing the good reputation and that he has been inform family members before exe - rounds on China’s social media. the victim of political infighting.” cutions took place. Later it retracted That’s after former railways minister During eight years in office Liu the comment and said the convict Liu Zhijun escaped the death transformed China’s decrepit rail - had not requested a visit from his penalty, while an ordinary business - way network into one with over family before being put to death. man from Hunan province was exe - 8,600km of high-speed track. In Zeng’s treatment was soon be - cuted for much the same crime. fact, it’s now possible to travel the ing compared to how the Liu case Liu was given a suspended death length of the country – from Beijing had been handled. “If officials and penalty for corruption and abuse of to Guangzhou – on trains going at normal people are not treated power. The verdict was delivered last around 300 kilometres an hour (in equally in front of the law, what’s week in Beijing after an investiga - case you’re wondering, there are 35 the credibility of the law?” wrote tion that had dragged on for over stops and it takes eight hours, re - one weibo user. two and half years. (The trial itself ports Sky News). Other netizens, including high lasted less than four hours.) The speed at which he achieved profile commentators such as for - In reality he could spend as little this feat earned him the nickname mer Google China chief Lee Kai-fu, as 10 years in prison if the political Great Leap Liu. But the need for posted variants of the following winds change. speed saw corners cut, leading to ac - message: “I am Lee Kai-fu. If I were The official reason for the per - cidents like the Wenzhou train crash going to be executed one day, I ceived leniency in Liu’s sentence is two years ago, when two bullet trains would definitely ask to meet with that he showed contrition for his collided (see WiC117). my family members. If the court crimes and was helpful during the By comparison, people have ar - says after my execution that no investigation. “Prosecutors said Liu gued, Zeng Chengjie, a real estate de - such request was made, it will be a had a very good attitude in confes - veloper from Hunan, hurt no one lie. Please pass on this post and sion and a strong desire to repent,” except investors attracted by his make your own vow.” Xinhua reported. The unofficial ver - promises of huge profits. sion is that he had support from the But Zeng, who was sentenced in relatives of at least two prominent 2011, was executed last Friday with - Party members’ offspring. out the court even bothering to in - Either way, although Liu is ru - form his family in advance. When On purpose? moured to have got kickbacks worth his daughter Zeng Shan found out Finance minister puzzles with up to Rmb1 billion ($162.7 million) – that evening, she took to weibo to remark about GDP growth P h o t o keeping 18 mistresses and buying 374 express her shock. “This morning,

S o u r c apartments and 16 cars – the court my father was executed by lethal in - hinese finance ministers tend e :

I m

a judged him on economic crimes ac - jection. I didn’t even get to see him to be an anonymous bunch, and g C i n e

C counting for Rmb64 million of graft, one last time! The government has WiC thinks that most of its readers h i n a

foreign newspapers reported. yet to formally inform us,” she wrote would be hard-pressed to name any 9 Week in China Economy 19 July 2013

of the five last incumbents. That’s Coming a day before the latest further speculation. Had Lou re - understandable, as discussion of GDP figures were released on Mon - vealed a secret growth target known economic policy tends to focus on day, the statement was interpreted only to the Party elite? Or was he the comments of the president or as a warning sign that the economy trying to manage expectations? In the premier, rather than the minis - could slow to a rate substantially much the same way that Ben ter of finance. lower than the government’s annual Bernanke has floated the idea of ‘ta - But that changed last week when target of 7.5% – a threshold an - pering’ Washington’s policy on Lou Jiwei, the latest occupant of the nounced only a few months ago. quantitative easing, i.e to prepare role, became the centre of attention Signs that the targeted level isn’t the market for a new status quo? after speaking in Washington. achievable, perhaps? Two days later This week it was announced that The reason? Lou was quoted in Xinhua changed Lou’s statement to second quarter GDP growth had the international media as telling something much more in keeping slowed to 7.5%, from 7.7% in the first Xinhua: “There is no doubt that with the Party line: “There is no quarter. HSBC forecasts that full China can achieve the growth tar - doubt that China can achieve this year growth will be 7.4%, suggesting get, though the 7% goal should not year’s growth target of 7.5%.” second half growth will slow further be considered as the bottom line.” Of course, Xinhua’s alteration fed to 7.2%. n

Who’s Hu: Gong Jialong Profiles of China’s business leaders

China’s economy has produced thousands petrol stations and controlled about Rmb10 of tycoons, many of whom have trodden a billion in assets. Even then only state firms potentially dangerous path in challenging were allowed to go public. As a result Tianfai the state’s dominance in key industries. was listed as a “commercial enterprise The rollercoaster career of Gong Jialong, owned by all the people”. (Ping An Insurance the country’s first private-sector oil tycoon, is a more notable but similar case, see offers a textbook example. WiC194.)

Getting started Big fall Born in 1954, Gong started out as an oil To his rivals, Gong’s wealth was built on driller in Hubei at 17. The job wasn’t a state assets and political connections. But prestigious one and he tried his luck Gong was more convinced of his own instead in car repair, where he proved a entrepreneurial skills. He began to success. In 1975, he was transferred to the challenge the dominance of the state- textile industry bureau of Hubei’s Jingzhou owned oil giants in fuel distribution, city to oversee its fleet of 50 delivery founding the China Chamber of Commerce trucks, earning Rmb51 ($8.30 at today’s for the Petroleum Industry in 2004 to fight exchange rate) a month, although Gong for private oil firms’ rights. With several admits today that his role as logistics head private-sector counterparts, Gong acquired two upstream oil firms in Canada, offered a few grey area opportunities to established Great United Petroleum (GUPC) as well as a stake in a 7,000-square- supplement his income. in 2005, aiming to achieve Rmb500 billion kilometre potassium mine. But rather than in sales in five years. playing David against three Goliaths Big break Gong never had the time to get close to (CNPC, CNOOC and Sinopec), Gong is Gong started his own trading firm in 1988. that. A year later, he was found guilty of seeking their cooperation. The objective, Fully private enterprises were still unspecified commercial crimes and handed according to Gong, is “contributing to technically unlawful at that time. So Gong an 18-month jail sentence. Nearly all of his China’s national security”. had to register a so-called ‘red-hat businesses, including GUPC, were Gong says he now has a more subtle company’ – a privately-run firm with nationalised. understanding of state capitalism but nominal state ownership – under the comments of his non-jailed peer group that

P Jingzhou government. He acquired two And then the comeback… any private-sector entrepreneurs that have h o t o

filling stations and entered the oil industry. Strangely, Gong’s convictions were erased survived since the nineties and can still S o u r c The business grew. By the time Gong’s in 2008, albeit after he had served his compete today are “extraordinary people”. e :

I m firm Tianfai Petroleum went public in time. He is now attempting a second act. For more on jailed tycoons making a g i n

e Shenzhen in 1996, it operated more than 100 Over the last four years, his team has business comebacks, see WiC167.

C h i n a

10 Week in China Environment 19 July 2013

Wuhan’s woes City of 10 million has chronic flooding problems, largely of its own making

he history of modern China – Tthat is to say China as a repub - lic – began in Wuhan. The 1911 up - rising in Wuchang – one of three cities later merged into current day Wuhan – triggered the Xinhai Rev - olution that overthrew two millen - nia of imperial rule, toppling the Qing Dynasty. Sun Yat-sen, credited as the founder of modern China, had high hopes for Wuhan. In his three vol - ume tome The International Devel - opment of China (sadly, not as grip - ping as its title suggests) Sun hoped that Wuhan would become one of the world’s biggest cities, rivalling New York and London. The Commu - nist Party shares a similar vision for Wuhan, now the capital city of Hubei province (which with a popu - lation of more than 10 million is al - ready bigger than any city in Eu - rope). In a planning blueprint published early this month, the Wuhan government said it wants to become a “world city” by 2049 – a number chosen to coincide with a century of Communist Party rule. The ambition is based on Wuhan’s strategic position at the The city flooded again early this month geometric centre of China. Distances to major cites including Beijing, flooding is an increasingly common to visit the city to see its “sea views”. Shanghai and Hong Kong are largely urban malaise. A government report Early this month – in the same the same. Situated on the Yangtze shows that 62% of China’s 351 largest week that the Wuhan government River, Wuhan is already a trans - cities experienced floods between unveiled its planning blueprint portation hub, with dozens of key 2008 and 2010 and, as WiC readers ‘2049’ – the city was hit by another railways and motorways passing may recall, the heaviest rainfall in heavy downpour. (Officials claimed through it. The city enjoys its label Beijing in over 60 years led to floods it was the most rainfall in a single as the ‘Chicago of China’ (though that killed at least 77 people last July day since 1998). Yet again, water lev -

P not uniquely, Chongqing also claims (see WiC160). els paralysed the entire city. Up to 45 h o t o

S that moniker, see WiC77). Flooding in Wuhan is particularly transportation spots were water - o u r c e Wuhan has a less desirable repu - frequent, enough for China’s neti - logged and 37 kilometres of roads :

C F P

tation too, for flooding. In fact, zens to banter online about going or highways were damaged, causing 11 Week in China Environment 19 July 2013

Official figures suggest that the Wuhan unveiled its world city vi - number of inner-city lakes has sion for 2049. “Get the [drainage] fallen to 166 from more than 200 in job done in the next four years.” 2002. Others have shrunk in size. This week, the Ministry of Hous - The area of Shaihu, one of the most ing and Urban-Rural Development storied Wuhan waterscapes, has issued long-awaited guidelines for been reduced to 12 hectares from 80 upgrading drainage systems across hectares in the 1950s. the country as a whole. Almost half of this reclamation The new rules stipulate that the work has been illegal, with much of drainage systems of 36 leading cities it still going on. According to the Le - should be upgraded to handle heavy gal Weekly, the city’s lake manage - rain and prevent urban floods. Im - ment bureau reported 20 cases of il - provement plans have to be sub - legal reclamation on a single day in mitted before June next year. June. Most are related to residential The guidelines came amid pub - developers, although a few were lic pressure to add flood prevention linked to infrastructure projects ini - as a credential in evaluating local of - tiated by local government bodies. ficials’ performance. an economic loss of Rmb250 million In Wuhan – as elsewhere in China “Local officials are too concerned ($41 million). – whenever environmental concerns with vanity projects rather than the Wuhan earmarked Rmb23 billion are at odds with economic develop - troubled water underneath,” the to improve its drainage system in the ment, the latter usually prevails. Of - Shenzhen Special Zone Daily said. wake of a damaging flood in 2011. But ficially, there is a ban on land recla - “Urban floods will remain a malaise as the Chutian Metropolis Daily acer - mation in lake areas. But the penalty until such urban management con - bically notes, the system failed its is Rmb50,000 – a laughable sum cepts change.” first major test and Wuhan retains compared with the profits to be The Information Daily agreed, its dubious reputation as China’s made by developers. suggesting that officials should be ‘flood capital’. Even more risible are the excuses. fired when cities suffer casualties The China News Service added its Late last year, the Jiangxia district from flooding. “That is the most ef - own dig: Wuhan had once again be - had already reclaimed 10,000 fective solution, far more so than a come “the oriental Venice overnight”. square metres of waterscape when hundred directives from the central The tourism authorities prefer the Wuhan government ordered a government,” it said. n Wuhan’s tagline as “the city of a hun - stop. In May this year, media found dred lakes”. That’s thanks to the nu - that an additional 10,000 square merous water courses and marshes metres had quietly been reclaimed Keeping track within its 8,500-square-kilometre too. According to a local official re - land area. Many districts are named sponsible for the project, the addi - In issue 199 we wrote about how the after an adjacent patch of water and tional dry land was a result of “sand world’s largest jeweller Chow Tai Fook could face trouble as China’s carry the suffix hu , which means and soil accidentally dropping into consumption of luxury goods slowed. “lake” in Chinese. the lake”. That prediction looked off the mark last Reckless land reclamation around The city is now paying the price week as the company reported that these lakes is the major reason for for the reclamations – during revenues had grown 63% in the three Wuhan’s chronic flooding problem, downpours the natural water - months ending June 30. Why? Bargain- hunting Chinese buyers seem to have the Legal Weekly reports, as natural course can no longer able cope. The snapped up gold products amid a water storage and run-off is being Wuhan government unveiled a worldwide slump for the metal in April. In blocked. “The lakes are disappear - three-year plan in May pledging to the earnings release, Chow Tai Fook ing and the city is crying… Lake el - invest an additional Rmb13 billion described the revenue rise as egy is Wuhan’s city elegy,” the mag - to improve drainage but local resi - “remarkable” and said that the sales growth was mainly attributable to buying azine warns, drawing reference to dents are increasingly angry at the by mainlanders visiting Hong Kong. River Elegy , an influential CCTV doc - disruption caused by the flooding. Gold and gold products rose to account umentary in the late 1980s that por - “Don’t lie to me about what could for 69% of total sales, up from 58% a trayed the decline of traditional Chi - happen in 40 years time,” an inter - year earlier. nese culture. net user wrote on weibo after 12 Week in China Society and Culture 19 July 2013

Guo’s not so ‘tiny’ success Critics lash latest hit film as inane; but audiences are flocking to see it

uo Jingming is no stranger June 27, according to figures Gto controversy. A best - released by China Film News. selling author and purportedly It has even outperformed China’s wealthiest writer, Guo Hollywood blockbusters like is not always the most popular Man of Steel and Keanu figure. Indeed, he was voted Reeves’ Man of Tai Chi . In fact, China’s most hated male Tiny Times is so successful celebrity for three years in a that its producer Le Vision row. He was once convicted of Pictures has brought forward plagiarism too, but refused to the release of its sequel from apologise for it in public. December to next month. Guo’s directorial debut Tiny The critics are less impressed Times (based on his novel of than the moviegoers, it seems. the same name) has proved Many called the script shallow similarly contentious and may and materialistic, with Ray - turn out to be one of the most mond Zhou, a well known com - divisive movie releases in re - mentator, arguing that it cent years. would corrupt young people The film follows four girls with its “twisted value of wor - who become friends at a pala - shipping money”. tial college in Shanghai. One The rebuke isn’t entirely character Lin Xiao – played by surprising as Guo’s original Yang Mi – later becomes the as - novels, which sold tens of mil - sistant to an ill-tempered edi - lions of copies, have often tor-in-chief at a fashion maga - been mocked as ‘Luxury Goods zine. With the help of her Guides’ for their exhaustive friends, Lin faces the chal - descriptions of brand name lenges at work. All four girls merchandise (see WiC1 for our support one another’s dreams first mention of the novelist). and various love pursuits. Of course, luxury brands also If the story line sounds fa - feature prominently in the miliar, that’s because it is rem - film. Fans have been counting iniscent of the American TV se - the on-screen appearances ries Gossip Girl, as well as the film Material girl: Yang Mi and found Louis Vuitton appeared The Devil Wears Prada , in depicting eight times, Gucci 10 times and the lifestyles of the rich and arro - plots in which the characters are Dior on 12 occasions. The winner? gant, as well as the struggle for suc - good-looking, talented and rich. Christian Louboutin, with a whop - cess, friendship and love. Guo’s pre - Seemingly, film audiences are ping 21 close-ups (four female char - vious works, including The City of similarly impressed. Tiny Times acters means lots of pairs of shoes). P h o t o Fantasies and the Tiny Times series, smashed China’s box office record Not that the critic Zhou was im -

S o u r c are bestsellers. But not for their for the opening day release of a pressed by all the fancy footwork. e :

I m

a gritty realism or highbrow non-3D film and has raked in “It wasn’t that long ago when Switch g i n e

C philosophising: the books are more than Rmb426.6 million [see WiC198] set the standard for the h i n a bought by a reading public keen on ($69.4 million) since its debut on worst domestic production in Chi - 13 Week in China Society and Culture 19 July 2013

nese history. But it took less than a month before Tiny Times broke that record,” he complained. “Its shame - New balls, less money worship has reached a please state that’s pathological.” Shi Hang, another film critic, How a tennis victory led to a wrote sarcastically on weibo : “The cross-strait row director does a very good job at di - recting: not one actor seems to have e’ve mentioned ping-pong gone to acting school so they are all Wdiplomacy a few times be - equally bad.” fore, following a celebrated tour in Guo’s fans have been fighting the early 1970s when Mao Zedong back against their idol’s detractors. invited the American table tennis Some made personal attacks on the team to China. During the visit the critics, saying that they are “too old” US lifted its 20-year trade embargo, to understand the film and should and in February 1972 Richard “retire early”. Nixon visited China, the first “Some people say Guo Jingming American president to do so in the Just don’t mention Taiwan only knows how to use good-look - Communist era. ing actors in the film but what’s The rest, as the saying goes, is his - was to be short-lived. The conver - the big deal? There is no denying tory. sation quickly turned from sports that the film is polished and re - So should we be reading more to politics after a provocative ques - fined to a degree that’s unseen in into sporting diplomacy once again, tion to Taiwan’s Hsieh from a domestic movie productions. Tiny albeit with bats upgraded into rack - Japanese reporter about what it Times is the textbook example of ets? meant to win a grand slam for “her how to make a good idol film. Few On July 6 mainland Chinese ten - country” as a “Taiwanese”. people have Guo’s eye for beauty,” nis player Peng Shuai made history Before she could answer, Peng one fan wrote on Douban, a popu - when she and Taiwanese player interrupted the conversation: “I lar film forum. Hsieh Su-wei became the first ‘cross- am sorry, but I am still sitting The director himself says he is straits duo’ to win the ladies’ dou - here,” she said, raising her hand, “unperturbed” by the controversy. bles at Wimbledon, beating Aus - “and I don’t accept the claim that “It is normal for people to pursue a tralian duo Ashleigh Barty and Taiwan is a ‘country’. Tennis is only better life and there is nothing Casey Dellacqua. Peng gave Beijing a sport, and we don’t intend to get wrong with enjoying it,” he told Xin - its first doubles title at a major in involved in politics.” hua in an interview. seven years, while Hsieh became the But in spite of her stated reluc - “Film audiences are changing and first player from Taiwan to win a tance to get involved in politics, films are not,” he notes, quipping, Grand Slam title. she had done just that. “It’s the elephant in the room that The pair, who are both 27, played Her comment was met with you pretend not to see.” a few tournaments together as jun - mixed reaction on both sides of the Guo also says the film is designed iors but ended their partnership af - Strait. While some applauded her for to project a fantasy for its viewers. ter turning pro. In 2008, Hsieh being “patriotic”, others suggested “For example, look at Lin Shao,” he asked Peng if she would be up for a that she had embarrassed her part - says, referring to the film’s protago - renewed association. ner in front of a room of reporters. nist. “She began the story as an or - “We speak the same language “[If Peng won’t recognise Taiwan as a dinary university student, and then and we’ve known each other and country], why would Hsieh accept she had to face all these things like been friends since we were young. that Taiwan is a province of China?” job interviews and intimidating We have fun and we really enjoy our one weibo user wrote. bosses in the workplace. But she tennis. I also love going to Taiwan In Taiwan, pro-independence manages to pull through and her and after Wimbledon she will come newspapers bristled. Peng’s move P h o t

o life gets better and better. She’s got to Beijing and if she gets time, we “shows the extent to which Chinese

S o u r a great career, great friends and a will eat some Peking Duck,” com - will go in their chauvinism… at a c e :

R e handsome boyfriend. This is every mented Peng after the match. moment when people on both sides u t e r s girl’s dream life.” The celebration of their triumph of the Strait should have been re - 14 Week in China Society and Culture 19 July 2013

joicing, Peng – like many other Chi - Hsieh gets $50,000 in corporate ther said that she had refused a five- nese – could not help herself and sponsorships a year,” her father told year sponsorship deal worth $25 acted in a way that, to paraphrase the pro-China newspaper China million from a Chinese company the Chinese refrain, ‘hurt the feel - Times. “The size of her sponsorship which would have required her to ings of the Taiwanese people’,” the determines whether her younger switch citizenship. Taiwan Times griped. brother and sister [who are both Taiwan’s Sports Administration Taiwan’s political status is a professional tennis players too] can is now saying that it will do all that thorny subject linguistically. For ex - compete overseas.” it can to persuade Hsieh to stay in ample, when the New Zealand gov - His comments stirred vitriol in Taiwan by lobbying for more corpo - ernment signed a landmark free Taiwan. Beijing has been wooing rate sponsors on her behalf. trade deal with the island last week Taiwan’s top talent in every field, Hsieh also sought to calm the it described Taiwan merely as a including its sports stars. Wu Chia- controversy on returning to Taiwan. “separate customs territory”. ching, a world champion pool The tennis player told local media But the controversy at Wimble - player, became a Chinese citizen in that the brewery isn’t the first don didn’t end there. Immediately order to represent the mainland in mainland Chinese firm to have ap - after the win, Hsieh’s father told the international competition. proached her, but “I just never men - AFP that his daughter was consider - The island’s favourite golf star, tioned any of them in public. I think ing giving up her Taiwanese citizen - five-time major winner Yani Tseng, there’s no need to make a fuss ship to go to mainland China after a is also said to have been tempted to about it..” She then reiterated her sponsorship offer from a Chinese pledge allegiance to Beijing before continued Taiwanese citizenship – brewery worth $1.6 million a year. deciding against it. In fact Tseng’s “What more confirmation do you “There is not much we can do. popularity skyrocketed after her fa - need?” Hsieh asked. n

FAST FOOD: For over five millennia, food has been at the heart of China’s culture.

Jianbing

What is it? Jianbing is a traditional snack meal often eaten for breakfast. A crepe made from a batter of wheat and grain flour, it is fried on a griddle with an egg and can be topped with scallions, crispy fried dough, cilantro, soy sauce and chili paste. The crepe is folded several times before serving. The result? A savoury pancake that is outside subway stations where white-collar workers are often seen chewy and crispy at the same time. In Tianjin people like to stuff hovering around a jianbing stand waiting for a quick snack. their jianbing with youtiao , which is fried bread stick. Tianjin people But a young entrepreneur now wants to build a culinary empire name it jianbing guozi , with guozi referring to the youtiao stuffing. based on serving up jianbing (which means ‘fried pancake’). Last year He Chang, 32, had the idea of giving the traditional Why is it famous? snack a makeover, with new sweet and savoury varieties. So he According to legend, jianbing was invented two thousand years ago opened a jianbing store named Huangtaiji in the middle of Beijing’s during the Three Kingdoms period (220-280) when Zhuge Liang central business district. He used weibo , China’s Twitter-equivalent, was faced with feeding an army of soldiers who’d lost their woks. to market it by word-of-mouth and told Economic Information Daily Zhuge ordered his cooks to spread dough onto a copper-made that the store was expecting to make more than Rmb5 million griddle suspended over an open fire. The method worked and the ($813,000) in revenue in its first year. He plans to open five more resulting dish lifted his soldiers’ morale and they fought their way outlets in the next few years with a goal of creating a “Starbucks- out of an ambush. Since then, jianbing has been passed down like” jianbing chain in China. P h o t through generations of families living in Shandong. At Huangtaiji you can find jianbing guozi (including unique o

S o u creations like chocolate jianbing ). Address: Building 10, 1/F, 39 r c e : Where to eat it?

I Jianwai SOHO, Third Ring Road Chaoyang District, Beijing (Tel: 86- m a g

i Jianbing is found on nearly every street corner in China, especially 10-5869 9887). n e

C h i n a

15 Week in China And Finally 19 July 2013

Grandfathered law Judge orders daughter to visit mum regularly

een to visit your mum re - months, following a row. Judge Bcently? If you are living in Zhou ordered that the daughter mainland China: you could end up (and her husband), who live 40km with a fine or worse if you haven’t. away, should visit Mrs Chu twice a Or so says Zhou Qiang from the month, in addition to three other eastern city of Wuxi, who on July 2 visits a year during major festivals became the first judge to apply the or public holidays. new Law on Protection of the Rights WiC imagines that the each visit Visit her, or else... and Interests of the Elderly. will be a warm family occasion. Zhou acted only hours after the But the ruling is already proving birthday? Are they turning on the legislation came into force. controversial. air conditioning during these hot “In recent years, the court has “It’s so sad that we now need law days?” asks one commercial for a seen an increasing number of cases to enforce basic morals,” wrote one Beijing- based service. “Don’t let the in which senior citizens have sued netizen on Sina Weibo. Others com - new law become a liability,” it ad - their children over a lack of emo - plained the law was unclear. “What vises. “As a customer’s representa - tional support,” Xinhua quoted does ‘visit your parents regularly’ tive we will visit parents, chat with Zhou as saying. “However, their de - mean,” asked one, before adding them, teach them how to use com - mands lacked a legal basis until “More clarity please!” puters, and help them receive digital mandatory requirements on visit - Others who lived far away from messages from their children.” ing were added to the Law for the their parents said the law only Birthday gifts and taking parents Protection of the Rights and Inter - added to their guilt about not going out cost extra, it added. ests of the Elderly.” home more often. “If employers Many people outside China have Chinese legislators ratified a ver - don’t give us the time off this law been non-plussed by the new legis - sion of the law last summer but the will change nothing,” wrote one. lation. newest iteration makes children re - As is often the case in China a few But at least it has garnered a few sponsible for their parents’ mental enterprising souls were soon ready fans – Financial Times columnist health as well as their physical and with a solution. Taobao, China’s pop - Philip Stephens for one. Inferring financial wellbeing. ular shopping platform, saw a spike he was getting on a bit himself, The case Zhou presided over saw in ads for companies offering to Stephens described the law as a 77 year-old Mrs Chu sue her daugh - check on parents for a small fee. “Chinese innovation” and “some - ter for not visiting her for nine “Did you remember your parent’s thing I could vote for”. n

Through thick and thin

“We cannot have a divorce the way Wendi and Rupert Murdoch just had. For that, it would be too big a price to pay” P h o t o * Vice-premier Wang Yang on why the Sino-US relationship needs to be a long term marriage.

S o u r He was speaking to media in his capacity as the senior China representative at the Strategic and c e :

R Economic Dialogue held last week in Washington. e Wang Yang u t e r s

16 Week in China The Back Page 19 July 2013

Photo of the Week In Numbers $22.5 billion The amount of US Treasury notes and bonds bought by the Chinese in May, the latest US data showed this week, even as many other large investors reduced holdings of the debt. China kept buying amid a swoon in bond prices during the period, increasing its holdings to the highest level on record.

P 142% h o t o

The average premium above base price for S o u r

c land deals across the country between April e :

e and June, says the Ministry of Land and u t e r s Resources. Of the 115 land deals in the

second quarter of the year, the average Summer break: a monkey chills out in pond full of carp in Anhui premium was up 22 percentage points from the previous quarter.

139 The number of properties that Luo Where is it? Shaoqiang, head of the Zhongtang branch Some of the places referred to in this issue of the state taxation bureau in Dongguan City, is said to own. Luo was suspected of buying the properties, which are worth Beijing more than Rmb30 million ($4.9 million) at Hebei current market value, with illegal income China from his position as local tax chief. Shanghai 35GW Wuhan China’s solar power generating capacity by Hunan 2015, quadrupling from the existing capacity, with the State Council announcing Guangdong that an additional 10GW would be added Guangzhou Shenzhen Hong Kong annually over the next three years.

With 1.3 billion people, 293 languages and an often opaque business culture, China can often seem as mysterious as the Mona Lisa. Our easy-to-search website now helps you to find some of the answers. It contains a growing archive of more than 2,500 WiC articles. And the site has another advantage: subscribers are able to read us on the move each week via their Blackberry or iPhone. To get our weekly email and access the site, you’ll need to go to www.weekinchina.com/welcome/ and sign up. It takes just a couple of minutes to register. Sign up today!

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