1 Talking Point 6 Week in 60 Seconds 7 Economy Week in China 8 Internet and Tech 9 Energy and Resources 10 Aviation 11 China and the World 12 Society and Culture 2 May 2014 17 And Finally Issue 235 18 The Back Page www.weekinchina.com Pork deal not crackling m o c . n i e t s p e a t i n e b . w w w

Why did WH Group, the world’s biggest hog firm, pull its IPO?

Brought to you by Week in China Talking Point 2 May 2014

Pork chopped Why did hog giant’s IPO fail to entice investors?

Setback for pig tycoon: Wan Long’s WH Group IPO in Hong Kong has ended in failure

uring the world’s biggest pro - mark and then to buy a majority Not bringing home the bacon… Dbate dispute a few years ago, a stake for HK$300 million ($38 mil - When WH applied to list on Hong fascinated audience learned that lion). Both proposals were rejected Kong’s stock exchange in January, Nina Wang, the late chairwoman of outright by Shuanghui’s chairman the firm talked up the prospect of Hong Kong real estate developer Wan Long (see WiC201 for a profile launching the city’s biggest IPO Chinachem, paid $270 million to of the man known locally as the since 2010. It kicked off the investor her feng shui adviser (and lover) to ‘Steve Jobs of Chinese butchery’). roadshow early last month intend - dig lucky holes. As many as 80 of His rationale was that he wanted to ing to raise up to $5.3 billion. Four them were dug around Wang’s “make full use of foreign capital, but fifths of the total was to be used to properties to improve her fortune. not be controlled by it”. Despite help WH repay loans taken to fi - One of these holes – about three never owning a majority stake in nance the Smithfield takeover, with metres wide and nine metres deep, the hog firm, he insisted on running bankers setting the price between according to the China Entrepre - the company his own way. HK$8 and HK$11.25 a share. This was neur magazine – was burrowed out - Two decades have passed since “an unusually wide indicative side a meat processing plant in Wan first courted Nina Wang’s cash range” according to Reuters, but also China. and in that time a range of new in - a recognition of the uncertain out - Why so? Chinachem was the first vestors have bought into the com - look in the Hong Kong stockmarket. foreign investor brought in by pany. Last year they helped A few weeks later, the 29 banks Shuanghui bosses in 1994 to help Shuanghui to acquire American hog hired to promote the IPO (a record) the abattoir expand. Wang’s capital producer Smithfield for $7.1 billion returned with lukewarm orders. would jumpstart the firm’s extraor - (including debt) and in January the WH was forced to cleave the offer by dinary transformation from a state- firm was renamed WH Group, more than half. Excluding the P h o t o owned factory in Henan’s Luohe ahead of a multi-billion dollar Hong greenshoe allotment, the new plan

S o u r c city into China’s biggest (and pri - Kong listing. But embarrassingly was dramatically less ambitious, e :

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a vately-held) pork producer. the IPO was pulled this week, as and looked to raise between $1.34 g i n e

C Seeing Shuanghui’s potential, plans for the flotation went belly- billion and $1.88 billion. To boost in - h i n a Wang offered to acquire its trade - up. vestor confidence, existing owners 1 In the future, finance will help new growth flourish.

There are grounds for cautious optimism in the real economy — but creating sustainable growth always needs careful encouragement.

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HSBC operates in various jurisdictions through its affiliates, including, but not limited to, HSBC Bank plc who is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., member of NYSE, FINRA and SIPC, and HSBC Bank USA, NA.

Issued by HSBC Holdings plc. AC22067 Week in China Talking Point 2 May 2014

also dropped plans to sell some of managers have needed more con - their own shares in the listing. WH’s vincing of the value of the newly trading debut was pushed back by a combined Shuanghui and Smith - week to May 8. field businesses. But investors remained unen - thused. Blaming “deteriorating So WH’s valuation was too high? market conditions and recent ex - Bloomberg said WH was prepared cessive market volatility” (the pref - to sell its shares towards the bot - ferred explanation for most failed tom of the marketed price range, IPOs), WH shelved its IPO on Tues - which equates to a valuation of 15 day. times estimated 2014 earnings. “The world’s largest pork com - At first glance that doesn’t look pany has gone from Easter ham to too demanding. Henan Shuanghui meagre spare rib,” the Wall Street Investment, the Chinese unit of WH Journal quipped. Group that is listed in Shenzhen, carries a market capitalisation of Were rough market conditions to Didn’t sizzle Rmb78 billion ($12.6 billion), or 20 blame? times its 2013 net profit. Hormel, a The failed deal was another blow for longer term goal was to improve Minnesota-based food firm that bankers in Hong Kong’s equity cap - the reputation of Chinese pork – produces Spam luncheon meat ital markets, who have watched the and boost confidence among the (and is a key competitor for WH’s planned IPO of Hutchison’s giant re - country’s jaded consumers – the American pork business) trades at a tail arm AS Watson slip away and more immediate business logic was price-to-earnings ratio of 23. have seen Alibaba Group opt to go to to sell Smithfield’s lower-cost meat Hence China Business Journal market in New York instead. into China, where prices at the pre - concludes that WH priced itself as Volatile markets may have con - mium end of the market are typi - “not too high and not too low” tributed to WH’s decision to post - cally higher. among peers, especially if the com - pone the listing. Hong Kong’s Hang “We plan to leverage our US pany can generate genuine syner - Seng index dropped 4.5% between brands, raw materials and technol - gies between its China operation the deal’s formal launch on April 10 ogy, our distribution and marketing and its newly acquired American and its eventual withdrawal on capabilities in China and our com - unit. April 29, according to the South bined strength in research and de - But an alternate view is that China Morning Post. Other IPOs velopment to expand our range of these synergies aren’t immediately haven’t been faring well recently. American-style premium packaged obvious and that the new business Japanese hotel operator Seibu Hold - meats products offerings in China,” model has hardly been tested (the ings and Chinese internet firm Sina the company said in its prospectus. Smithfield deal closed last Septem - Weibo both pared back share sales “We expect [this] to positively affect ber and exports to China didn’t start last month, while the Financial our turnover and profitability.” until the beginning of this year). Times notes that concerns about In recent months this strategy The criticism is that WH hasn’t done China’s slowing economy have de - has faced headwinds, with prices much more than put Shuanghui In - pressed interest in Chinese assets going – from the pork giant’s per - vestment and Smithfield together more generally. spective – in the wrong direction. into a holding vehicle, but is now Nevertheless, investors were anx - American pig farmers are strug - asking for a valuation greater than ious about WH’s investment story gling with a porcine virus that has the sum of the two parts. “Even at too and specifically whether the wiped out more than 10% of hog the bottom of the range, the IPO im - company’s valuation was too high. stocks. This has sent US pork to new plies a valuation for Smithfield 21% One of the selling points of the highs, meaning it’s no longer so above the price WH Group paid for original Shuanghui takeover of low-cost. In contrast, Xinhua notes the US pork producer barely eight Smithfield was that it married a that pork prices in many Chinese months ago,” notes Reuters Break - P h o t

o reputable American brand with a cities have fallen to their lowest lev - ingviews. (And let’s not forget,

S o u r company that wanted to adapt best els in five years. As such, the com - Smithfield was purchased at a 30% c e :

R e practices in product quality and mercial case for exporting US pork premium to its market price at the u t e r s

food safety in China. But if one to China isn’t as strong. So fund time.) 3 Week in China Talking Point 2 May 2014

Or as one banker put it to the FT: “It’s like buying a house, ripping out Planet China the bathrooms and kitchen and try - Strange but true stories from the new China ing to flip it for a premium six months later.” CBN agreed that investors have PLASTIC FANATIC. Regular readers of WiC will know of Lei Feng, the the right to be wary: “The market army officer killed by a falling telegraph poll in 1962. After his death, Lei’s simply has not had time to judge if superiors were said to have discovered a diary in which he waxed lyrical about his love for leader Mao Zedong, and the joy he derived from daily there is meaningful synergy coming work like volunteering to help railway porters during busy holidays. In 1963 out of WH’s units. Nor is there a sin - Mao ordered that the diary be published so that people could “learn from gle signal that WH has the ability to Lei Feng”. properly manage an American firm.” Whether or not Lei’s writing was a fabrication, he soon became China’s iconic do-gooder. And for Anhui’s Zhang Yidong, Lei is such an inspiration Why did WH want to IPO so fast? that’s he had plastic surgery to look more like him. This question brings us back to Zhang has earned media attention himself for his good deeds and said Shuanghui’s transformation from a a local hospital had offered to do the operation for free. He agreed so as to state-owned enterprise to a pri - keep alive the spirit of his idol. As he told Beijng Times: “Since I had the vately-held firm. In April 2006 a facelift, I have become more energetic and have more self-confidence in consortium including Goldman firmly taking the road of Lei Feng. In my lifetime I will do my best to make Sachs and Chinese private equity those who need help feel there is still love and warmth in this society.” According to Southern Weekend, Zhang plans to submit an application funds CDH and New Horizon paid to have his name changed to Lei Feng too. When challenged that his idol’s about $250 million to buy out the behaviour might be a touch mythical, Zhang becomes indignant. “Those city government’s stake in who denigrate Comrade Lei Feng should be organised to form a class, Shuanghui. where I will serve as the instructor to give them a good lesson,” he The leveraged buyout was an un - suggests. Zhang (post-facelift) is pictured below right, and an image of Lei usual example of a Chinese national is on the left. brand (and market leader) being snapped up by foreign buyers. Shuanghui was stripped of its SOE status, with majority ownership passing to private and foreign in - vestors. Century Weekly suggested last month that most of these Shuanghui shareholders “have waited patiently for at least eight years to exit”. Perhaps running low on their reserves of restraint, they then introduced the Smithfield bid last year to great fanfare as the largest takeover yet of a US com - pany by a Chinese firm. But as Peter Fuhrman, chairman of China First Capital, a boutique in - vestment bank, told WiC at the time, this wasn’t really the case. In fact How so? WH’s set-up is complex: has been looking for other ways to the bid for Smithfield was a lever - the IPO prospectus features an own - cash out. A key motivation in last aged buyout by a company based in ership chart containing WH Group, year’s dealmaking was that they P h o t o the Cayman Islands, not a Chinese Shuanghui Group and Shuanghui thought they had found an alterna -

S o u r c one. And its main purpose was to fa - Investment (not to mention several tive route via a Hong Kong IPO. e :

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a cilitate a future sale by Shuanghui’s dozen joint ventures and Smithfield And l ess than a year after the g i n e

C longstanding investors (see itself). One of these entities is listed Smithfield bid, WH made its move, h i n a WiC196). in Shenzhen, but the investor group not least because it needs to reduce 4 Week in China Talking Point 2 May 2014

some of the debt incurred in buy - through. (The move pushed WH Smithfield acquisition. Reports sug - ing its new American business. into a loss in 2013.) The size of the gest that early refinancing was ex - But many market watchers compensation package is said to pected to reduce debt repayments think it looked too hasty. “They have also deterred some fund by around $155 million on an annu - rushed into an IPO and didn’t managers. alised basis – or about 5% of last spend time to actually create the year’s profit. synergy between the US and Chi - What next for WH? WH may also use the delay to re - nese business,” one fund manager Any attempt to resurrect the offer - think how it goes to market next in Hong Kong complained to Fi - ing will have to wait until after its time, with the South China Morning nanceAsia this week. “They wanted first-half results, meaning a possi - Post reporting that senior execu - to float the stock to fund the acqui - ble return to the market in Sep - tives have been blaming the banks sition and also let the private eq - tember at the earliest. There have for the breakdown. “Some of them uity firms exit. But if WH Group is been reports that the deal is more were too confident, and even a bit good, then ride with me. Why likely be postponed until next year. arrogant, when they tried to price should I buy when you are selling?” CDH, the company’s single largest the deal and coordinate with each Fuhrman’s view is much more shareholder, told the Wall Street other,” the source told the newspa - withering: “I just couldn’t get over, Journal that it refuses to sell its WH per. in reading the SEC documents at the shares cheaply. “We have a strong Then again, the banks will be time of the takeover, the brazenness belief in the business’ fundamen - irked by the expenses inccurred on of it, the chutzpah, that these big in - tals and its long term value,” a a deal that didn’t happen. And in stitutions seemed to be betting they spokesperson insisted. retrospect it looks to have been a could repackage a pound of But China Business Journal says flawed decision to mandate 29 of sausages bought in New York for $1 that WH now needs to focus on con - them. As WH has learned, it diffused as pork fillet and sell it for $5 to in - vincing investors that it has a good responsibility and may have disin - vestors in Hong Kong.” story to tell, including providing a centivised some of the participants. And what of the boss? Wan Long clearer integration plan for Smith - Indeed, another comment on the and another director Yang Zhijun field and Shuanghui’s operations. situation is that the only winners pocketed almost $600 million in The pressure will also increase to from this IPO were the airlines and share options between them last find alternative ways to retire some hotels that were used as part of the year after the Smithfield bid went of the debt taken on to finance the roadshow process. n

Time for a takeover Phoenicians, Greeks, Romans, Vandals, Ostrogoths, Byzantines, Arabs, Normans and Spaniards. The island of Sicily has been controlled by foreigners for much of its history. And now the mayor of the ancient coastal city of Agrigento has gone on record requesting a Chinese invasion too. More specifically, Marco Zambuto’s promotional video is intended to persuade China’s high-spending tourists to visit the Italian town. “Dear Chinese friends, please overwhelm us,” he asks, saying that he wants them to “inundate” the city of 60,000. He added: “Please, come... we will not fail you!” few Chinese visitors. The mayor says the Chinese In the footage Zambuto also attempts to speak are now looking to explore new places and hopes some Mandarin. He told Xinhua of his one-minute clip: to see an upsurge of interest. His flair for publicity I l l u s t r “I think it can help Chinese tourists learn that Agrigento a has certainly put Agrigento on the map but he t i o n :

is ready to receive them.” might have a problem when the Chinese arrive w w w

. Agrigento was once described by Greek poet Pindar and discover it lacks the same shopping b e n i t a as the “world’s most beautiful city” and houses 20 oportunities offered by Milan, Rome and e p s t e temples. But unlike Paris and London it has attracted Florence... n i n . c o m

5 Week in China The Week in 60 Seconds 2 May 2014

Now bigger than the US? The major news items from China this week were...

The US is on the brink of losing its status as the world’s 1largest economy and is likely to slip behind China this year, far sooner than anticipated. The World Bank’s In - ternational Comparison Programme says the purchasing power of China’s currency was much stronger than re - flected by exchange rates. By that measure, China could surpass the US as early as this year. However, Beijing re - jected the report. The National Bureau of Statistics, which took part in the study, “expressed reservations” about its methodology and “did not agree to publish the headline results for China”. Train maker CNR is set to list in Hong Kong Hebei province said economic expansion slumped to 24.2% in the first quarter compared with a year ago as quire Smithfield Foods, the largest pork producer in the steel output fell and factories closed as part of efforts to US, for $7.1 billion last year (for more see Talking Point). clean up the environment. Hebei’s industrial output rose 3.5% in the first three months, down from 12% a year Alibaba Group and a private equity firm co-founded earlier, as the province pursued “structural changes to 4by its chairman Jack Ma have agreed to buy a $1.22 bil - its growth model”. The growth figure was the second lion stake in Youku Tudou, the country’s largest online lowest of 29 provincial-level regions that have released video site. The two companies will jointly own an 18.5% data (northeastern Heilongjiang reported the weakest stake in Youku Tudou. The latest investment is the third expansion of 4.1%). major media acquisition by the company and its founder in less than two months. It also brings Alibaba’s deal WH Group pulled the plug on its $1.9 billion Hong making spree to nearly $4 billion in the past six months. 3Kong initial public offering. The company, which had Next up: Alibaba may retake a stake in Alipay, the online first targeted a sale of as much as $5.3 billion, cut the size payment vehicle it divested to Ma in 2011. of the deal by more than half after failing to attract in - vestors. Formerly known as Shuanghui International, China CNR Corp is into its second week of pre-market - WH planned to use the proceeds from the offer to pay 5ing for an IPO in Hong Kong to raise up to $1.5 billion. down the $4 billion syndicated loan it borrowed to ac - The train manufacturer, already listed in Shanghai, is pitched at 8.76 to 13 times projected 2014 earnings. Ana - lysts say the sector could benefit from government stim - ulus announced in mid-March. CNR confirmed five rail projects worth a total of Rmb142 billion ($22.68 billion).

Assailants with explosives and knives killed three 6people and wounded at least 79 on Wednesday evening outside a railway station in Urumqi, the capital of Xinjiang. Xinhua described the incident as a “violent P h o t

o terrorist attack”. The timing was all the more significant

S o u r as President Xi Jinping had just spent four days touring c e :

R e the region. Xi has ordered Xinjiang authorities to take u t e r s Heightened security in Urumqi after lastest attack “resolute measures” and crush “violent terrorists”. n 6 Week in China Economy 2 May 2014

Well-aimed strike? Industrial action at shoe factory over pensions

ifteen years ago, the chance of sports shoe manufacturer – is re - Ftravelling to a city and earning a ported to have been underpaying its monthly pay cheque was enough social security contributions by incentive for millions of rural Chi - about a third. nese to take factory jobs. The Hong Kong-based China People might work on a produc - Labour Bulletin has speculated that tion line for a season if work was this could have been the result of an slow on the farm at home. Or they agreement with local authorities might choose to leave for a year or keen to attract the manufacturer’s Workers protest in Dongguan two if school fees or a large medical business in the first place. “There is bill needed paying. no way this could have been done strike were already $27 million and But the view was all too often that on this scale without their knowl - that the increases in social security this work was somehow temporary; edge,” Geoffrey Crothall, a payments and housing benefits something one did when young or as spokesman for the organisation, would amount to $31 million a year. a short term choice to boost the fam - told WiC. The cost of making up the arrears ily coffers back in the countryside. So when workers unfurled their on past payments is yet to be fi - Over the years the concept of ur - banners and started to demon - nalised. ban living has changed. Life in towns strate, some of their anger was di - The Global Times – one of the few and cities has become more of a rected at the local government as newspapers not to simply rerun norm for many of China’s 260 mil - well. Dongguan officials then sent Xinhua’s copy on the strike – said lion migrant workers. And t his in the riot police, with p rotesters that a number of recent distur - greater sense of permanency complaining of beatings and deten - bances had focused on disputes means that the workforce wants tions. Nonetheless, the strike spread over social security benefits rather more than a few monthly pay to a sister factory in neighbouring than basic pay. It thought that this cheques. Instead it wants to be Jiangxi province a few days later. was a result of the aging of the surer that employers are meeting Officials from the central gov - workforce, although it also believed their obligations to fund social ben - ernment then stepped in. “The min - that better awareness of worker efits including pensions and un - istry is closely monitoring the de - rights was a factor. employment insurance. velopments and will guide “In the past, workers migrated A two-week strike at the huge Tai - Guangdong province in its handling very frequently and they didn’t think wanese-owned Yue Yuen shoe fac - of the situation to protect the legal they had the right to benefit from tory in the southern city of Dong - interests of the workers,” Li Zhong, a social insurance,” Liu Kaiming, the guan offers further evidence of this spokesman for the Ministry of Hu - director of Shenzhen-based think- desire. The action, which involved man Resources and Social Security tank the Institute of Contemporary 40,000 workers, was triggered when told Xinhua. Observation, told the newspaper. they discovered that their employer Li also reminded Yue Yuen that “The development model of having had been underpaying its social se - underpaying social benefit contri - a cheap labour force always at the curity contributions for years. butions is a criminal offence. edge of the economy has nearly Employees were furious when The company responded by come to an end and must be ended. P h o t o they realised that they might re - agreeing to pay all outstanding so - These strikes are a warning to em -

S o u r c ceive smaller pensions when they cial benefits and pay an extra ployers and the government that e :

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a retire or lower unemployment ben - Rmb230 ($37) in monthly living al - they should not neglect social secu - g i n e

C efits if they are laid off. lowances for workers. It also re - rity benefits for workers any longer,” h i n a Yue Yuen – the world’s largest ported that the direct costs of the he added. n 7 Week in China Internet and Tech 2 May 2014

New labour The workshop of the world is buying more robots

n 1955 an American union boss We’ve looked at some of the calcula - Iwas being shown around a newly tions before (see WiC159). National automated production line at a Ford Business Daily gave another exam - car plant. “How are you going to col - ple last month at a typical textile Service, but no smile lect union dues from these guys?” factory in Shaoxing in Zhejiang, his host teased. “How are you going which thinks it can reduce its work - while the rise of computers in the to get them to buy Fords?” the force by a quarter – or about 200 twentieth century hurt middle-in - union man countered. people – if it automates more of its come occupations more than oth - Martin Wolf from the Financial production. Each worker is paid ers. But this time around Wolf Times told the story earlier this year about Rmb45,000 ($7,203) a year, so thinks that lower-paid workers are to show that the debate about au - total savings would come to Rmb9 going to be the main casualties. And tomation isn’t new. And as China million. Against that, the upfront as the firings start, the adjustment prepares for its own future in a spend on automation would be period could be painful. world of intelligent machines, simi - Rmb30 million, much more than Because China’s economy is more lar conversations are taking place. the yearly savings on labour. focused on low-cost labour than its The International Federation of If the capital is available, the in - rivals, it also looks more exposed to Robotics (IFR) says that about vestment looks sensible over the the dangers of disruption. But it 162,000 industrial robots were sold longer term. There are other bene - knows that it can’t just stick its head worldwide last year. China bought fits, such as improvements in prod - in the sand as technology advances. about 25,000, slightly fewer than uct quality. Labour unrest would So it has been encouraging its own North America or Japan. But the Chi - also become less of an issue, some - manufacturers to be ready for the nese will soon start buying more ro - thing highlighted in Guangdong last rise of the machines, in hope of bots every year than anyone else, the month (see page 7). Yet some of the grabbing more of a growing market. IFR says. In part that’s because the gains are offset by other concerns, Last month CBN reported on the policy headwinds are gusting in National Business Daily reports. One cities establishing themselves as ro - favour of the robot makers. Until re - is that automated production is bot research-and-production clus - cently, automation was much less much more dependent on power ters. One is Luoyang, which is tar - of a priority for Beijing than find - supply, which can be unreliable, es - geting Rmb80 billion in industrial ing employment for millions of low- pecially during periods of extreme automation revenues by 2016, or skilled workers. But businesses are weather. “These machines are gen - 30% of sales to China’s manufactur - now complaining about labour erally never fully shut down, so we ing sector. shortages. The working population are worried about power rationing Guangzhou has similar goals, has fallen for two consecutive years measures in the annual summer promising Rmb100 billion of robot and salaries are going up. CBN says peak,” a textile boss commented. revenues by the end of the decade. manufacturing wages increased Despite the shrinking workforce By then more than 80% of the man - 14.5% in each of the last two years, Beijing will also be worried about ufacturing firms in the city will be for instance, forcing bosses to look too many redundancies if robots are using industrial robots, the local again at the case for robots (a term, installed in greater numbers. It’s not government hopes. To help with the coined in 1920, which means clear which parts of the workforce transition, firms that purchase or ‘drudgery’ in Czech). would be hit hardest. Wolf’s piece in rent robots can get subsidies of up P h o t

o Of course, it’s not a straightfor - the FT suggested that artisans lost to Rmb30,000, while there is a one-

S o u r ward decision, especially for smaller out to machines more than un - off incentive of Rmb500,000 for c e :

R e firms with unpredictable order skilled workers during the first in - companies that introduce more u t e r s books and thin operating margins. dustrial revolution, for instance, complete automation. n 8 Week in China Energy and Resources 2 May 2014

Gridlocked Decision taken on ultra-high voltage lines

n an issue of the New Yorker that State Grid executives think an Imagazine last month Iraq’s for - additional 17 lines will be built be - mer vice president made a startling fore 2020. Some analysts calculate claim. As part of a lengthy article the entire grid will require a $250 about the condition of the country, billion spend. Adil Abd al-Mahdi said that almost In WiC174 we detailed some of the $220 billion had been allocated to concerns about the project. One is 6,000 projects for which little or that the technology has never been environmental and other pressures, no work had ever been done. He applied on such a massive scale, the state’s top leadership has added, about $70 billion had been raising the risk of blackouts. It will changed its passive state regarding handed out in government loans also make State Grid even more State Grid Corporation’s application that had not been repaid. A former dominant, potentially blocking at - for UHV approval, to recognise the high-ranking CIA official put it tempts to introduce more competi - benefits of cross-regional power more succinctly: “The corruption is tion into the electricity sector. transmission.” Olympian.” But an April meeting of the Na - (Another potential consideration: (The Iraqi government denied the tional Energy Administration indi - the new grid will require colossal claims, telling the New Yorker that cated that opponents of the plan amounts of steel. Longtime readers these were “statements refuted by had lost out. The top government of WiC will be well aware that the reality”.) body said work could start on a UHV steel sector faces overcapacity and is Over in China discussions about line between Huainan in Anhui in need of stimulus, particularly if corruption are a daily occurence, province, Nanjing in Jiangsu and its weaker elements are to avoid de - while WiC reports on new cases of Shanghai. Then work will begin on a faulting on their bank loans.) graft on almost a weekly basis. In line beginning in Ya’an in Sichuan The announcement also adds fuel one of the recent episodes senior ex - that connects to the central city of to the debate about whether the ecutives at the Three Gorges Dam Wuhan (a distance of about central government is committed to were detained (see WiC232), rein - 1,300km). reining in state capitalism. In recent forcing fears that massive infra - State Grid seems to have made issues we have reported on signs structure projects are particularly its case mostly on the potential en - that Beijing wants to promote the prone to illicit activity. It is partly vironmental benefits. Much of growth of the private sector at the for similar reasons that concerns are China’s cleaner power generation is expense of some of its state-owned being expressed about another in - inland, but the greatest demand for firms (see issue 230 for one exam - frastructure project which requires electricity is in the coastal cities. ple). But in this case, State Grid’s massive funding: the State Grid’s The promise of UHV is that power powerful lobbying effort looks to grand scheme to criss-cross the will be transported more efficiently have bucked the trend. country with ultra-high voltage to where it is needed, reducing Then again, this assessment lines (UHV). Yet as Xinhua reported some of the need to burn coal in big might be tempered by a report late late last month, the government has cities. Briefings from the State Grid this week that the National Audit given the go-ahead for the ambi - Energy Research Institute have fo - Office has sent hundreds of investi - tious energy network to be built. cused on the haze and air pollution gators into State Grid’s offices. If the P h o State Grid has disclosed it has that are blighting urban China (see Century Weekly report is correct and t o

S o u won approval for 10 UHV lines at a issue 225) and presented UHV as the the audit is targeting “key officials”, r c e :

S cost of Rmb381.5 billion ($60.95 bil - most viable near-term solution. As then a turbulent period may be h u t t e r lion). Construction will start this National Business Daily comments: ahead that centres on anti-graft in - s t o c k year. National Business Daily adds “Since the start of 2014, because of vestigations. n 9 Week in China Aviation 2 May 2014

Air support Investors weigh up Spring Airlines IPO

n April a Southwest Airlines while its average load factor, which Iflight attendant became an measures the proportion of seats overnight sensation when a video of filled with paying passengers, is 94%, her pre-flight safety speech went says the Wall Street Journal. A Spring Airlines flight attendant viral on YouTube. More impressive, the company In the video, Martha Cobb was has been profitable since 2006. nomic Information Daily. seen telling passengers that she Last year its net profit reached Take its subsidy agreement with wanted them to position their seat Rmb732 million, up 17% from 2012. Hebei, where the local government belts like her “grandmother wears a Revenue rose 16.5% to Rmb6.56 bil - offers payments to Spring in ex - support bra: tight and low across lion from the year before. (China’s change for bringing passengers to her hips” before informing them airline industry saw its total profits the province’s Shijiazhuang that “in the unlikely event the pilot sink 7.7% to Rmb27.3 billion during Zhengding International Airport, lands beside a hot tub” each trav - the same period.) which now serves as the budget air - eller would get their own “teeny- Should investors feel inclined, line’s hub in Northern China. weeny yellow Southwest bikini”. On they will soon be able to board “Through the company’s low cue, her colleagues hold up yellow Spring’s growth express. Last week it fares strategy we have attracted a life jackets. was given the green light to launch large number of passengers. From China’s largest budget airline an IPO and is reportedly looking to 2011 to 2013, the annual passenger Spring Airlines, has also come up raise Rmb2.5 billion in a Shanghai throughput [at Shijiazhuang Zhend - with a tongue-in-cheek approach to flotation. The proceeds will be used ing International Airport] rose from getting passenger attention. Last to purchase nine Airbus A320 jets 1 million to 5.1 million, which helped year the airline started offering and three Airbus flight simulators. propel Shijiazhuang’s economic and themed flights. In one of the most Unlike conventional airlines, revenue growth,” its spokesperson popular, the flight attendants were Spring doesn’t bother with first or said. “Spring Airlines also has the dressed up as French maids and but - business class cabins (although it biggest market share in the region.” lers. “We want to emphasise serving does offer what it calls “business But industry observers say there customers,” Zhang Wu’an, a economy class” seats). It doesn’t is a danger to relying so much on spokesman, told the Financial serve ‘free’ meals and drinks during government largesse. “If the pro - Times. Launched in 2005, Spring the flights. The South China Morn - portion of subsidy accounts for so Airlines initially sought to take on ing Post reports one trip in which much of an airline’s profits it be - state-owned goliaths like China flight staff even charged Rmb5 for a comes very susceptible to changes Southern and Air China by offering cup of water during a one hour de - in policy, like whether the local gov - promotional tickets at much lower lay on the tarmac. ernment decides to continue the fares. But it pulled its best deals after Low-cost carriers like Ryanair and subsidy programme,” an analyst regulators warned that it would face Easyjet generally top up their airfare told Economic Information Daily. hefty fines for “disrupting market revenues by selling ancillary items, Spring is working to diversify its order” (a move intended to protect such as hotel rooms, car hire and revenues by increasing its interna - the state-owned airlines, say holiday insurance. But Spring gen - tional routes. It now flies to 16 in - Spring’s supporters). erates a massive portion of its rev - ternational destinations, after start - P h o t o Spring has since raised its prices enue from local government subsi - ing a daily flight from its hub in

S o u r c although it aims to be about 30% dies. In fact, incentive payments Shanghai to Singapore in April. The e :

I m

a cheaper than its larger rivals. The from local governments and airports carrier reckons that by the end of g i n e

C company promotes fares that range accounted for more than 79% of its the year international routes will h i n a

from Rmb99 ($15.79) and Rmb299, total revenue last year, says Eco - reach 30% of its total business. n 10 Week in China China and the World 2 May 2014

Ship comes in Mitsui pays up as Japan tensions increase

or the prime example of a war reparations. Although Tong dis - Fmulti-generational legal dis - putes the view, saying that the right pute, look no further than the clas - to claim compensation has not been sic novel Bleak House . “Jarndyce and waived at the “private or individual Jarndyce drones on,” Charles Dick - level”, Chinese courts have stuck to ens wrote of the decades-long law - the terms of the agreement and suit. In fact, it has been litigated for never accepted reparation claims. so long almost no one can remem - But might that now be changing? ber when it started; few in the novel The Foreign Ministry seemed to harbour any hopes it will ever be deny it last week, telling reporters settled. For the sake of diplomacy that the case against Mitsui was a The Chen family can lay claim to “regular business contract dispute” having pursued its own Jarndyce- pounding a Japanese vessel in the and not related to the issue of like lawsuit in a case that dates back city and ruling that the family was wartime compensation. But a Chi - to 1936. It originated when the owed billions of yen in compensa - nese court also set a new precedent Shanghai tycoon Chen Shuntong tion. The ship belonged to Mitsui in March by accepting a damages leased two vessels to Daido Kaiun, a OSK, which absorbed Daido Kaiun suit against Mitsubishi Materials Japanese shipping line. Payments years ago. Last Thursday Mitsui paid and Nippon Coke & Engineering ceased once the Japanese navy com - ¥4 billion ($39 million) to free its over forced labour. Zeng told mandeered the ships as part of ship, setting a significant precedent Reuters that this was “just the be - preparations to invade China. and vindicating the Chen family’s ginning” and that “many victims The Chens sought restitution af - long legal battle. will take up legal weapons”. ter the war, but discovered in 1947 The Chens claim that there has In any event, the reaction in that one vessel had been torpedoed always been merit in the suit. But Tokyo to the ship seizure was swift, and the other had sunk in a ty - by the same token, that merit had with government spokesperson phoon. When damages were sought been there for decades. So why did a Yoshihide Suga warning of “a chill - Daido Kaiun passed off responsibil - Chinese court act so decisively now? ing effect on all Japanese companies ity, blaming the Japanese military. The answer is probably politics. As doing business in China”. A long running legal case ensued, relations worsen between Beijing The row comes in the same first in Tokyo and later in Shanghai. and Tokyo – in large part over claims month that Barack Obama affirmed Chen Chungwei, the great-grand - to contested islands in the East the US security pact with Japan cov - son of the family’s patriarch, told China Sea – it suits China to punish ered the disputed islands, provoking the Financial Times: “My family en - the Japanese for wartime wrongs. a stern response from Chinese for - countered a lot of difficulties but we Activists like Tong Zeng, chair - eign ministry spokesman Qin Gang. stuck with it. I grew up with this man of the Chinese Association for “The so-called security alliance be - case. Our sense of responsibility to it Claiming Compensation from tween the US and Japan is a bilateral was stronger than anything. It can’t Japan, are now calling for more law - arrangement made during the cold be calculated how much we have suits, especially from those forced war period and it should not be used spent on the case in money, time to work in Japan during the war. The to damage China’s sovereignty and P h o t

o and our lives.” Japanese say that this runs against legitimate interests,” Qin argued.

S o u r Earlier this month the Shanghai an agreement in 1972 normalising “We firmly oppose applying the c e :

R e Maritime Court gave the Chens diplomatic ties between the two Japan-US security treaty in the issue u t e r s hope of final resolution by im - countries to renounce demands for of the Diaoyu Islands.” n 11 Week in China Society and Culture 2 May 2014

Going out with a bang Bemusement as regulator bans four US television shows

hen CBS launched The Big WBang Theory – a show chronicling the lives of four nerdy scientists – it didn’t expect it to be one of its biggest hits. The series is now in its seventh season. Perhaps more surprisingly, it has also been a sensation in China, accumulating almost 1.3 billion views since first appearing on the video site Sohu in 2009, making it the most popu - lar American series to air in the country. Some of its characters have be - come household names. When ac - tor Johnny Galecki, who plays Leonard, turned up in Beijing to promote the series he was treated like “royalty”, says the Los Angeles Times. So it was a major shock to Chi - nese fans when The Big Bang Theory suddenly disappeared from Sohu’s site last weekend. Viewers were greeted with the message: “Sorry, the episode is not available at the moment due to policy reasons.” It was then reported that the me - dia regulator, the State Administra - tion of Press, Publication, Radio, Film and Television, had demanded that The Big Bang Theory be re - Banned from China’s screens: Kaley Cuoco, a star of The Big Bang Theory moved, along with three other American shows: The Good Wife, form, they have traditionally been saw its shares drop about 5.5% early NCIS and The Practice . The media known as one of the more popular this week. watchdog has not given any reason sites for that Western content, the In the meantime, media com - for the ruling. US content,” Cheng Cheng, an ana - mentators are scratching their That’s bad news for Sohu, which lyst at Pacific Crest Securities, told heads as to why the regulator has holds exclusive online rights to The Bloomberg. The new ruling from singled out The Big Bang Theory for Big Bang Theory . Shares of the Nas - SAPPRFT “may be impacting” the action. After all, Beijing Daily de - P h o t

o daq-listed tech firm tumbled 6.7% stock, Cheng surmised. scribes the series as “motivating and

S o u r to $54.10 on Monday, the lowest in Youku Tudou, which shares the wholesome” compared to other c e :

R e a year. rights to the legal drama The Good more violent or risqué shows like u t e r s “If you look at Sohu’s video plat - Wife with Sohu and Tencent, also The Walking Dead , American Horror 12 Week in China Society and Culture 2 May 2014

Story and Masters of Sex , which have that broadcasting giant CCTV has se - shoulder its due responsibility and all been left untouched. cured the series rights to The Big we feel deeply sorry for that,” it said One view is that there’s more to Bang Theory (and for Game of in a statement to Xinhua. The inter - the move than dislike for American Thrones too) and wants to clear the net firm also saw its shares drop to sit-coms: “ The Big Bang Theory way for higher ratings as it broad - a one-year low on Nasdaq. doesn’t have explicit images. How - casts the two shows. If the crackdown on American ever it portrays a kind of lifestyle Or as Shenzhen Economic Daily shows like The Big Bang Theory con - that is totally Western. A leader like put it: “US dramas are not com - tinues, it’s also bad news for Ji Er - Xi [Jinping] must sense the mis - pletely banned. They are now being wei, managing director of Reach match between the culture he is pro - ‘harmonised’ in order to be played Glory Media Group. Ji has launched moting and the culture that these on CCTV.” an online talk show on Youku to ex - videos are spreading,” an employee “So this is why American shows plain the thematic and cultural at an online video provider specu - are banned online. To pave the way trends in US programmes to Chi - lated to the Wall Street Journal. for CCTV? In the eyes of SAPPRFT, nese audiences (he worked in the As WiC reported in issue 232, reg - CCTV is the real child,” one netizen American entertainment industry ulators have been planning to in - mused. previously). The show’s initial crease oversight of foreign content “Effectively, the quotas or out - episodes have garnered over 1.3 mil - on the internet since early April. It is right bans on foreign content [on lion views. But if many more of the a deeply unpopular step. Over 95% traditional TV] created this space for sitcoms and dramas that he features of the 130,000 respondents polled the internet guys to fill. Now, it’s got are pulled off the web, Ji is going to in a Sina survey early last month to the point where The Big Bang have lot less to talk about. voted against banning American tel - Theory cast members are coming to But Ji might take heart from an evision series. The mood was so re - China and being treated like royalty interview with Youku’s boss, Victor bellious that Xinhua published an and the incumbents — CCTV and Koo. He told the Wall Street Journal article denying that the regulations the traditional broadcasters — are there may be “isolated incidents” would be applied universally to for - clearly feeling the heat,” claims where overseas TV shows are re - eign programming. But the reaction Duncan Clark, chairman of BDA moved by regulators, but he doesn’t to Sunday’s censorship was equally China, an investment consultancy reckon it will prove a “widespread intense, with at least 300,000 com - based in Beijing. “This internet phenomenon”. ments on weibo . “Give me back Shel - streaming is eating away massively don! How can you block such an in - at market share.” nocent show? The main character Netizens embraced the irony of doesn’t even kiss his girlfriend until the ban too: “ The Good Wife and The the seventh season,” one netizen Big Bang Theory are both forced to Gutter press lamented, referring to one of his come off while Game of Thrones , Street row sparks tension with favourite characters. which contains such heavy stuff Hongkongers Elsewhere there were attempts to sometimes that even I’m too shy to justify the ban, albeit with some watch it, is now going to be on CCTV. he two-feet tall Manneken Pis – contorted logic. “If you don't have This is a load of crap,” one com - Ta bronze statue depicting a lit - internet order, how can you have in - plained. tle boy urinating – is popular with ternet freedom?” the People’s Daily Last week censors also revoked tourists in Brussels. But in Hong asked. “Anyone enjoying and exer - two licences allowing online publi - Kong last month it was the local res - cising their internet rights and free - cation and distribution at Sina, a idents who were taking the photo - doms must not harm the public in - popular internet portal. It was ac - graphs of a peeing boy. Their target terest and cannot violate laws and cused of releasing 20 articles and was a couple of Chinese visitors regulations and public ethics.” four videos containing lewd content who were allowing their child to uri - The Global Times also chimed in, (one of the offending items: a book nate in a busy shopping street. And saying that the goal is to safeguard racily titled The Village Woman’s within a few hours the images were “teenagers’ physical and mental Dream Lover: Village Doctor stirring new tensions between P h o t

o health” and “on a deeper level is Wanted ). After the licences were Hongkongers and their neighbours

S o u r aimed at protecting our weak do - pulled Sina went into prostration to the north. c e :

R e mestic film industry”. mode. “As one of the influential Video of the incident shows the u t e r s Another of the hypotheses was websites in China, Sina has failed to mother remonstrating with the an - 13 Week in China Society and Culture 2 May 2014

gry onlookers. “The child was going to pee in his pants, she asks, “what do you want me to do?” The couple then grappled with members of the watching crowd (the woman has since been told to report to the Hong Kong police after allegations that she slapped by - standers during the altercation). The case is the most recent in - stance in which Chinese children have been photographed peeing in public. Last February a mainland mother was rebuked online after en - couraging her son to urinate in a bottle in a Hong Kong restaurant, while a Chinese couple was lam - The incident that sparked the row basted two months later for letting their child relieve herself on a train. and carried it away: four; you hid an act of charity,” scoffed a contrib - The backdrop is broader disquiet the fact that the parents didn’t utor to Apple Daily’s website. “Re - from many Hongkongers at the im - snatch the memory card until the member to keep your promise and pact of mainland visitors on the fab - Hongkongers prodded and scolded never come to Hong Kong again.” ric of their city: from the colonisa - the parents, while shooting graphic By now state news agencies like tion of shopping areas by luxury photos of the little girl. You are dis - the People’s Daily were calling for retailers to the influence of cashed- gusting! I despise you!” calm, urging both sides to demon - up homebuyers on property prices Suspicions about the reporting of strate “mutual civilisation and un - (see WiC136 for an earlier mention the case deepened after it turned derstanding”. of these social tensions). out that it was a boy, not a girl, who Beijing Evening News also offered The latest flare-up seems to have had been photographed. a more sympathetic ear to some of provoked an angrier response from After more than 260,000 re - the Hongkongers’ concerns. “In all mainland Chinese, with more than a sponses were collected in a Chinese honesty, the millions of tourists do million comments about the case online survey on the incident, 40% impact on the everyday lives of local made by netizens. Many are angry at said they thought it showed preju - people,” it acknowledged. “Some of the treatment of the family and dis - dice against mainlanders, while the the residents who live in tourist ar - turbed that footage of the minor same percentage said the incident eas complain that they have to was made so publicly available. was understandable should a child travel some distance to buy every - Much of the initial fury was di - not get to a toilet on time. day products because stores nearby rected at Lüqiu Luwei, a reporter at More militant contributors then have all changed to selling milk Hong Kong-based Phoenix TV, who called for Chinese children to relieve powder, jewellery and luxury bags… had highlighted the dispute on themselves wherever they liked on It’s also true that Hong Kong’s prop - weibo . Netizens soon took her to Hong Kong’s streets. Others sug - erty, education and healthcare costs task, claiming the row had been mis - gested a boycott of the city. “If us, are rising because of more and more represented, perhaps deliberately. the mainlanders, stopped travelling immigrants from the mainland.” One critic listed the charges to Hong Kong for months, they will The newspaper also admitted that against her: “One; you hid the fact come begging us to go back,” one some of China’s ‘new rich’ have that the parents took their child to campaigner announced. “We are not damaged the mainland’s image. “As queue at the toilet for a long time entirely sealing off Hong Kong, but these pressures start to build up, lo - until the child couldn’t wait any just enough to show them we are cals are venting on the mainland longer: two; you hid the fact that the gods, as we are the consumers.” tourists,” it concluded. when the kid was peeing, the But as CNN reported, some Last year there were 41 million mother used a diaper to collect the Hongkongers seemed to welcome trips by Chinese to Hong Kong (the urine: three; you hid the fact that the threat. “Who cares for your local population is only 7 million). the mother put the diaper in a bag money, you who think shopping is Trip numbers are forecast to in - 14 Week in China Society and Culture 2 May 2014

crease to 70 million by 2017. gested. But the mood darkened The newspaper was sure that But the Global Times was less re - when 30 Hongkongers staged a Hong Kong would reject these “con - strained in its assessment of the row, protest on Sunday mocking Chinese temptible wretches” noting that the citing deeper-seated insecurities be - tourists by mimicking toddlers territory is “still a young member hind Hong Kong’s complaints. defecating. “This handful of radicals in this big Chinese family” and that “These locals cannot face the fact in Hong Kong remind us of the ram - it is “unavoidable that some trou - that the difference between the pace pant skinheads and neo-Nazis in Eu - blemakers will keep posing chal - of development in Hong Kong and rope,” it fumed. “Xenophobia is the lenges to society”. mainland coastal cities is rapidly di - cult of these groups. Their opinions Some of the locals then tried to minishing… their attitudes have have an effect on public opinion, but fight back against accusations of been distorted, losing patience to - their actions will usually make trou - prejudice, albeit unconvincingly in wards the mainland Chinese,” it sug - ble for mainstream society.” some cases. “How can it be racism?”

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

Two years ago state-run broadcaster CCTV surprised viewers with A number of viewers pointed out that some of the sequences and its beautifully produced food documentary A Bite of China , camera angles were almost exactly the same as the UK showcasing the country’s culinary heritage. The eagerly awaited documentary. But Chen Xiaoqing, who directed the episode under second season, A Bite of China II , started in mid-April, with a scrutiny, denied any plagiarism, saying any “similarity” was young Tibetan travelling deep into the mountains to find the intended as homage to the BBC show. ingredients for a dessert that blends honey and shortening. Without Netizens weren’t convinced: “If you compare the two scenes a safety harness, the man spends three hours climbing a huge tree with screen shots, you will find them exactly the same except for to collect the honeycomb he needs to make the delicacy, which he the characters,” one wrote. “If that is not copying, then we can call intends as a gift for his brother (who is set to depart for college). academic plagiarism ‘paying homage’ to scholars.” “Honey is the most valuable gift Bai Ma can bring his family,” Despite the mild criticism of the format, the food featured on the narrator says, adding that it is the show quickly sold out online. CCTV difficult to obtain anything sweet in the reckons that supplies of Sichuan bacon impoverished area. and Beijing roast duck – dishes Next, the series travels to Zhejiang mentioned in the first episode – soon province, where it profiles a fisherman sold out on Tmall.com afterwards. who spends two years mastering a Restaurants featured on the show technique to catch mudskippers, an were also mobbed. Shanghai’s Sanlin unusual fish that his daughter has long Benbang, which appeared in the second wanted to try. episode, told the Shanghai Daily that its The audience response to the phone has been ringing off the hook. The second season has been a little less family-run joint, which serves traditional glowing than the first series. Many say Shanghainese cuisine, says diners have the show’s producers should have been queueing up for a seat at one of its focused more on the food. “Too much 12 tables. The Li family, which owns the time is spent on the personal stories, restaurant, says they are already diluting the true meaning of the considering expansion to accommodate documentary,” one netizen wrote. all the new customers: “There’s an Chengdu Business Daily concurs: “The first season of A Bite of abandoned warehouse behind the restaurant...I will talk to China was so popular because it spoke about Chinese cuisine but township officials to see whether I can rent it,” says Li Mingfu, the wasn’t only about food. The documentary was interspersed with eatery’s boss. personal stories. However, the second season takes that one step One of Sanlin Benbang’s most popular dishes is Shanghai-style too far.” fried river shrimp. River shrimps are tiny – so small that they are Still, more sentimental viewers said they were touched by the consumed with their shells intact. The shrimps are usually dipped in P h narratives featured in the show: “What the Tibetan boy did for his hot oil until their shell turns red. Then they are returned to the wok o t o

S brother, and what the father did for his daughter, that is so and coated in a light gravy composed of soy sauce, cooking wine o u r c

e moving!” one wrote. and sugar. :

A

B More eagle-eyed netizens wondered if CCTV had been taking Sanlin Benbang Restaurant is located on 65 Zhong Lin Street, i t e o

f lessons from the award-winning BBC documentary Human Planet . Pudong, Shanghai. (Tel: +8621 5077-1717)

C h i n a

15 Week in China Society and Culture 2 May 2014

one Hongkonger protested in a re - sponse to an article in the South China Morning Post. “It’s the Han Chinese who are turning on each other… It’s merely the civilised ones trying to instruct the barbarians...”

Plenty of front Hainan man asks students for their underwear

“ iddle-aged man opens bra Mmuseum” is the sort of head - line liable to grab the attention – so congratulations to the Global Times for running it. The article that followed told the Looking for support: Chen Qingzu, the public health campaigner story of Chen Qingzu, a 56 year-old from Hainan who has spent 20 years excuse in a society that won’t accept versity campuses,“ it asked. collecting bras from university stu - his sartorial choices”. It also noted “Considering that the risk of dents. He now has 5,000 of them that the offer to take poorly-sized breast cancer rises as women get pinned to the walls and ceilings of bras home with him isn’t always ap - older, wouldn’t going door-to-door his modest house in Sanya. preciated. “Upon hearing this in his neighbourhood and only His motivations? “Many girls strange request, some of the girls speaking to older women be a better thought I was a bra fetishist,” Chen become understandably alert and use of his time?” n admitted to China News Service. But are prepared to call the police at the he says that his intentions are no - soonest possible opportunity,” the bler – he has collected the bras on newspaper notes. Keeping track grounds of public health, with the But Chen seems untroubled by message that tight or ill-fighting un - the speculation surrounding his In issue 230, we reported that foreign derwear can lead to breast disease life’s work. A seasoned self-publicist, companies are now allowed to sell including cancer. he has even been spotted wander - games consoles after Beijing lifted a 14- year-ban on the devices in January. This Chen now wants to open his col - ing the streets of Sanya in a bra him - week Microsoft announced that it will lection for public inspection, the me - self, Xinhua reports. take advantage of the Shanghai Free dia says, although the Chinese press As you might expect, netizens Trade Zone to sell its Xbox One to China. shows little curiosity about how he were more forthright in their opin - The move renders Microsoft the first has collected such an expansive re - ions of Chen’s love of lingerie. “He’s foreign company to sell games consoles in China. The company will be working in source. Apparently Chen simply just a freak making the excuse of partnership with local tech firm BesTV turns up at campuses, gives a talk on setting up a museum,” said one. New Media, which is part of Shanghai how best to fit brassieres and then “Brother, you’ve done something Media Group to release the console in invites his audience to hand over un - that every man dreams about doing September. Analysts say the move will derwear that isn’t fit for purpose. but dare not try,” admired another. give Microsoft a head start against rival Sony, which makes the Playstation. At the Even Chen’s local paper Nanguo Perhaps that’s why Nanguo Me - moment, the Xbox One has sold more Metropolis Daily saw little need to tropolis Daily felt compelled to offer than 5 million units as of mid-April, detail the “special and unique” a few words of caution on Chen’s ac - lagging Sony’s by more than 7 million, P h o t says the Financial Times. But don’t o methods that he has used to assem - tivities.

S o

u expect a game-changer, says Tencent r c ble his collection. But it did go fur - “Even looking at this story from e :

Games, which reported that Microsoft is I m

a ther than most in wondering the most positive angle, the ques - g only expecting to ship 100,000 Xbox i n e

C whether he might be a “repressed tion remains as to why he chooses to Ones to the country this calendar year. h i n a transvestite, scrambling for any wild conduct his bra gatherings on uni - 16 Week in China And Finally 2 May 2014

Sweet nothing Craze for canned air continues

n a trip to France, the artist air (from June), in this case as sou - OLiang Kegang came up with a venirs to boost the local tourism new idea for his next project. He business. According to Guizhou of - opened a glass jar in Provence to ficials, the idea was introduced by ‘collect’ its air and brought it back to President Xi Jinping. During the an - China. He then put it up for sale at nual National People’s Congress Fresh faced: Liang and his jar an art auction. It fetched Rmb5,250 meeting in March, Xi told delegates ($838). from Guizhou that the province – put the nose close to the can to “Air should be the most valueless which has lower density of harmful breathe deeply,” he told reporters. commodity, free to breathe for any PM2.5 particles – should “sell air But the restorative benefits look vagrant or beggar,” Liang told the cans in the future”. doubtful, to say the least. “From a UK’s Guardian newspaper. “This is “Xi’s idea seemed humorous, but consumption point of view, not my way to question China’s foul air it represents our leadership’s respect many people can afford to buy and express my dissatisfaction.” for nature,” claimed Fu Yingchun, canned air in large quantity,” says Then again, Liang’s not the first head of Guizhou’s tourism bureau, Liu Simin, a researcher at the Chi - to come up with the idea of selling saying that he’s confident the cam - nese Academy of Social Sciences thin air. As we pointed out in paign will succeed. who has evidently given the matter WiC183, Chen Guangbiao, the phi - Fujian province is also selling some thought. “Instead of buying lanthropist and entrepreneur, be - canned air with a hint of “sweet - canned air they should just buy an gan selling cans of it in Beijing last ness”. And if you are looking for oxygen tank,” he concludes. year – again as a means to highlight something a bit more “crisp”, how What WiC finds most bizarre China’s air quality problems. His about a can from Tianmu mountain about the trend is that we predicted product line features flavours that in Zhejiang or Laojunshan moun - it, albeit as an April Fools’ Day joke range from “pristine Tibet” to tain in Henan? The two local gov - in 2011 (see issue 101). Back then we “post-industrial Taiwan”. Each can ernments have both announced wrote a prank article about a Beijing goes for Rmb5. plans to release their own canned businessman importing Scottish air Inspired by the news coverage, product line too, says China Eco - to the Chinese market. Unlike Xi Jin - other brands of canned air have nomic Weekly. ping (and his deep respect for na - started to crop up across the coun - In the past, the millionaire Chen ture), we thought that cans of fresh try. In April the provincial govern - has claimed that canned air is not air were an absurd idea that nobody ment of Guizhou told local media merely a PR gimmick. “One only has would take seriously. How wrong we that it too is planning to sell cans of to open the can, directly 'drink' it or were… n

It’s not about China – really

“Our goal is not to counter China. Our goal is not to contain China. Our goal is to make sure P h o t

o international rules and norms are respected and that includes in the area of international disputes.”

S o u r c e : * President Barack Obama speaks after signing a defence pact with the Philippines that will I m a g

i allow the US to base ships and aircraft in the country. The move follows mounting territorial ten - n e

C Barack Obama

h sions in the South China Sea. i n a

17 Week in China The Back Page 2 May 2014

Photo of the Week In Numbers Rmb1 trillion The value of trust products due to mature in the third quarter. Some analysts think this period could prove a crunch time for the financial system, as weaker issuers struggle to repay the equivalent of $160 billion.

75.5% The percentage stake ICBC has recently

P purchased in Turkish bank Teskil Bankasi, h o t o

spending $316 million. The deal is clearly S o u r

c aimed at trade finance. ICBC says that e :

R

e Turkey is one China’s largest trading u t e r s partners and that annual bilateral trade between the two sides runs at $28 billion. Seeing China from the air: Michael Norris of Australia competes at the World Extreme Games in Shanghai Rmb1.84 trillion Spend by Chinese shoppers online last year (it equates to around $295 billion). An estimate from iResearch Global reckons Where is it? this could grow to Rmb4.45 trillion by Some of the places referred to in this issue 2017. Last week Burberry became the Urumqi latest to recognise the trend, opening a Xinjiang virtual store on Alibaba’s e-commerce site Beijing Tmall. Hebei 25% Jiangsu China Henan Nanjing The drop in housing sales in Wuxi in the Anhui Shanghai Sichuan first quarter of the year, according to data Wuhan Chengdu Zhejiang from China Real Estate Information Corp. Wuxi is now considering loosening eligibility requirements for household registration for rural migrants if they buy an Shenzhen Hong Kong Dongguan apartment in the city.

Sanya

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