1 Talking Point 5 The Week in 60 Seconds 6 China Ink Week in China 7 Economy 8 Energy and Resources 9 China Consumer 10 Media 11 Banking and Finance 2 December 2011 13 Society and Culture Issue 131 18 And Finally www.weekinchina.com 19 The Back Page

China’s most corrupt man is... m o c . n i e t s p e a t i n e b . w w w

y b g u in Expect more corruption scandals in the run-up to next year’s leadership change o k y n o a t B s t l t h a e g b k u o r o l a r G M B C d B n S a H Week in China Talking Point 2 December 2011

China’s most wanted Shock as corrupt top Shandong official allegedly made $9 billion

n the most recent ‘Rich List’ a senior official at the government’s Odrawn up by Forbes magazine top advisory body, the Chinese Peo- in the United States, Huang Sheng’s ple’s Political Consultative Confer- wealth would (perhaps) have ranked ence, was arrested. In May former him number 34. Amazingly that Shenzhen mayor Xu Zongheng, was would have taken him above Rupert sentenced to death for corruption Murdoch, Ralph Lauren and the re- stretching back to 2001 (the death cently deceased Steve Jobs. penalty was then suspended be- But Huang is no American and cause of “good cooperation”). And, few at Forbes are likely to have even of course, Liu Zhijun, the Minister heard of him. of Railways, was detained in Feb- This week that might have ruary (see WiC95). Up until changed, as he jumped to the top of Huang’s arrest, Liu ranked as the a less prestigious ranking – that most corrupt official to be of corrupt Chinese officials. caught, with estimates of a per- Huang, the deputy governor sonal fortune approaching $2 of Shandong province, was billion (but only a mere 19 this week detained for “seri- mistresses, it seems). ous violations of discipline”, “This year there have been so apparatchik–speak for being many cases, and from now until caught with his hand in the till. Ac- October next year, there will be cording to widely-read gossip on many more,” says Liao Ran, pro- Sina Weibo, China’s Twitter-equiv- gramme officer for China and alent, Huang had accumulated an South Asia at Transparency Inter- ill-gotten $9 billion personal for- national, a non-governmental tune. (At this point Huang is “sus- anti-corruption organisation based pected” of corruption but the exact in Berlin. amount has not been officially con- ahead, with rival factions vying for Why are corruption cases the firmed. Xinhua’s website, however influence. In this drawn-out game clue to a deeper sense of political did quote from Sina the rumoured of political chess, pawns will be transition? $9 billion number.) taken or sacrificed. Huang may well “The very top uses corruption to It sounds a bit large. Then again, be an early example: it’s not clear control people, creating a basic form allegedly Huang didn’t do things who he might have been close to of stability in ordinary times,” says by halves – another number to politically, but it would be naïve to Liao. “And yet, it is dangerous when cause a stir on Sina Weibo: he is see his ousting purely as the result the power balance shifts,” he warns. said to have kept 46 mistresses. of a routine investigation. In other words, this apparent flo- As China heads into 2012, strug- rescence of graft isn’t actually about gles over corruption are moving Anyone else caught in the corrup- corruption, although the crime is Photo Source: Shutterstock centre stage ahead of the biggest po- tion net? obviously real enough. litical reshuffle in a decade at the On September 29 the deputy gover- Instead, it’s about power: who 18th Party Congress next October. nor of Sichuan province, Li stands with whom, who is pro- That means that there is going to Chengyun, was also detained on tected, and who is left exposed to a be much to play for in the months similar charges, and in June Li Yuan, knock-on-the-door from the Central 1 Week in China Talking Point 2 December 2011

Discipline Inspection Commission. This will affect business and busi- nessmen too. “Next year you can’t use economics to explain the econ- omy. You’ll have to use ‘stability,’” says He Fan, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Science. The message? Keep your head down, follow the flow of new crim- inal cases and try to work out how power is shifting. Bear in mind too that the gov- ernment functionary who does you the honour of turning up at your banquet may not be around next year. Perhaps he’ll be promoted to a more senior role in Beijing. Or he might be in jail, or escaped to self- Most Innovative Most Innovative Investment Investment Bank for Bank for Infrastructure and imposed exile in Canada. Sovereign Advisory Project Finance

What is going to change next year? Current leaders President Hu Jin- tao, Premier Wen Jiabao and Wu Bangguo, Chairman of the National People’s Congress, are all expected to retire. Hu’s replacement has long been tipped as Xi Jinping, the current vice-president. Wen’s suc- cessor will probably be vice-pre- Best Global Best Project Finance House Sovereign Advisor in Asia mier Li Keqiang. Who takes over from Wu is less clear. But there’s more at stake than these three positions. According to Cheng Li, an analyst at the Brook- ings Institution, as many as seven of the nine members of the Polit- buro Standing Committee, the highest decision-making body in the country, are expected to retire. Best Bond House Best FX Bank “Within the full 25-member Polit- in Hong Kong in Hong Kong buro, at least 14 leaders will vacate their seats to make way for younger candidates. Consequently, the prin- cipal figures responsible for the country’s political and ideological affairs, economic and financial ad- ministration, foreign policy, and military operations will consist of newcomers after 2012,” Cheng says. HSBC operates in various jurisdictions through its affiliates, including, but not limited to, HSBC Bank plc, authorised and regulated by the Financial Services Authority, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., member of NYSE, FINRA and SIPC, and In a five-part series China’s HSBC Bank USA, NA. 11-083 Midterm Jockeying: Gearing up for 2 Week in China Talking Point 2 December 2011

2012 Cheng also notes: “The main contenders for the top Chinese leadership in 2012 have already been engaged in personal political campaigns (in the Chinese style, of course). … During the New Year celebrations of 2010, for example, Xi [Jinping] used the short mes- sage service (SMS) to send a text message of his ‘personal’ greet- ings to approximately one million officials in the Party grassroots branches across the entire coun- try – an unprecedented way for a top Party leader to communicate with local officials. Meanwhile, Li [Keqiang] has drawn attention for his strong interest in such areas as climate change, energy efficiency, healthcare and affordable hous- ing. None of these issues was a priority for Chinese leaders 10 The $9 billon dollar man: Huang Sheng years ago.” So how bad is the corruption? Chinese going into exile are man- So how does corruption touch pol- This is the million – or perhaps agers at state-owned enterprises. itics? trillion – renminbi question. The battleground is the Central Dis- As a secret vice, it’s hard to say Are corruption cases the only clues cipline Inspection Commission. how severe the problem has be- to shifting political sand? “Each top leader has his people come. But Huang Sheng’s $9 billion No. Word of mouth is another, as well there,” says Liao. These supporters haul – if true – is an eye-popper. as the tone of the coverage of the are deployed to open cases on their And reports of graft involving bil- main political contenders in the state bosses’ rivals. lions of renminbi are not especially newspapers. Take the strange fact that many of unusual. Last month, Xinhua re- Political campaigns can be reveal- the recent corruption cases involve ported that two local mafia chiefs ing too, such as the push announced deputies, such as vice governors. in the town of Benxi in Liaoning in mid-October by the 6th Party Huang Sheng, Li Chengyun and Li province had been arrested for Plenum to make China a “strong cul- Yuan are all deputies. The deputy “crazily accumulating by unfair tural nation”, which left many on- chief of the State Food and Drug Ad- means” at least Rmb2 billion of lookers wondering why it should ministration, Zhang Jingli, was also cash (the relevance here is that the figure so prominently at a major detained recently for about Rmb40 mafia often works hand-in-hand Party meeting. million of graft. with local officialdom). The answer, says He Fan, is that There’s a phrase for that in Chi- A July report by anti-corruption the gathering wasn’t really about nese: “Beat the dog and watch its researchers at the Chinese Academy culture at all. owner.” of Social Sciences (CASS) also sug- “Take the cultural policy deci- “I won’t insult you but I will kick gested that 4,000 Party or state of- sion,” he says. “It may seem ridicu- your dog,” is how Liao translates the ficials have fled overseas in the last lous from the outside, but these phrase, noting that attacking a 30 years, taking an average Rmb100 things serve a purpose that foreign- deputy is seen as a means of getting million with them. The total ers don’t see. The orders get trans- Photo Source: China Imagine at his boss. Once a deputy has been amount of money siphoned out of mitted down to the very bottom of detained, questions start being China is much greater, the report the Party, and then the leaders can asked. Does the senior man lack the warned, citing the Central Disci- see who is loyal and who is not.” power or the will to protect his sub- pline Inspection Commission. CASS “Of course showing loyalty by en- ordinate? Is he the real target? also noted that about 70% of the thusiastically supporting some- 3 Week in China Talking Point 2 December 2011

thing does not necessarily mean true loyalty, but it does mean a per- son stands up publicly and states Planet China his support, and that means every- Strange but true stories from the new China one knows where he stands. This is a 5,000 year-old system, and it’s all GREETINGS COMRADE. It’s been a busy couple of weeks for Vladimir about identifying loyalty.” Putin in China. Not only did the Russian premier win the Confucius Prize – Seasoned China-watchers also a Chinese equivalent of the Noble Peace Prize – he’s also discovered that scrutinise the travel plans of exist- he has a brother in Anhui province. ing leaders for clues on who may As it turns out, it’s not a real brother –but that’s still what internet users have nicknamed Luo Yuanping, who bears a striking resemblance to the be favoured in the political transi- former KGB supremo. tion ahead. Thanks to the internet, the 48 year-old For instance, Li Keqiang’s trip to villager from Longju has become an overnight Hong Kong in August, in which he celebrity and is now called Brother Putin. represented the State Council, was Russian netizens are also fascinated, seeing said to augur well for his personal Luo as a “tanned Putin” and a “Made-in- future. China Putin”. Another blogger even Alternatively, it has not gone un- suggested Brother Putin be invited to govern noticed that neither Hu Jintao or a small Russian province. But farmer Luo has Wen Jiabao has visited the city of other priorities, with the doppelganger hoping Chongqing since the hugely-ambi- his new fame will help him find a wife. tious Bo Xilai became its party boss in 2007. But at least Bo’s position is said of a political kingmaker, having business, and less about politics, to have been buoyed by the appear- pushed for Xi Jinping to take over in recent years. But the coming ance of former president Jiang from Hu as president. 12 months will see political cur- Zemin at a celebration event for the rents flow much closer to the sur- 1911 Revolution in July. And the final message… face again. Decisions will be de- Why? Jiang was a friend of Bo’s Foreign business people have ferred, and power struggles will father (the respected party elder Bo grown more accustomed to ignite, as the different factions Yibo) and is still seen as something thinking of China as a place of jockey for position. n

Red flag to red carpet

Earlier this year a red Ferrari turned up at the doorstep of former US ambassador to China, Jon Huntsman. The driver, reports the Wall Street Journal, was Bo Guagua, the 23 year-old son of Chongqing Party boss, Bo Xilai and grandson of Bo Yibo, one of the ‘eight immortals’ revered for their role in the 1949 revolution. That makes young Bo akin to Chinese nobility – one of the ‘princeling’ children of senior Party founders (see WiC35). In fact, Road in the city was bought for $32.4 million by Zeng the Journal seems to have been on a bit of Wei, the Journal reports. Zeng is the son of Zeng

Illustration: www.benitaepstein.com princeling-hunt this week, noting that their “evident Qinghong, formerly President Jiang Zemin’s right hand love of luxury” is proving embarrassing for a man and a member of the nine person Politburo supposedly proletarian Party. Standing Committee. The extravagant spending So further bad news that the latest Chinese tourist doesn’t end there: the younger Zeng wants to attraction in Sydney is a house owned by yet another bulldoze the existing structure and put up a $5 million princeling son. A residence on uber-exclusive Wolseley mansion in its place.

4 Week in China The Week in 60 Seconds 2 December 2011

Loosening up The major news items from China this week...

Standard & Poor’s upgraded both the Bank of China 1and China Construction Bank to A from A- and main- tained the A rating on Industrial and Commercial Bank of China. That gave all three lenders higher ratings than most large US banks, Bloomberg reported.

Alibaba Group and Softbank Corp are in advanced 2talks with private equity firms Blackstone and Bain Capital about making a takeover bid for Yahoo, Bloomberg reported. A bid may value Yahoo at more than $20 a share, two of the people said, though Alibaba hasn't decided on a final price or whether to proceed. Meanwhile, Yahoo's board met on Thursday to discuss previous offers for a minority stake from TPG Capital and a group led by Silver Lake. Silver Lake's bid for the stake valued Yahoo at about $16.60 a share, while TPG LeTV: no ordinary television, claims Lenovo Capital's offer was higher. China’s central bank cut bank reserve requirement The renminbi started trading against the Australian 4ratios on Wednesday. The ratio for big banks is set to 3dollar and Canadian dollar in China’s foreign ex- drop from 21.5% to 21%, beginning December 5. It’s reck- change market on Monday. Banks can now trade the oned the move will release about Rmb390 billion ($61 two currencies against the yuan directly (previously billion) in bank funds and make them available for lend- they had to first convert them into US dollars before ing. Many analysts see the move as a sign of broader conversion to the yuan). Observers said the move is de- monetary easing by Beijing, after curbs on the property signed to accelerate the currency’s internationalisation sector in recent months. by promoting its use in cross-border trade. Iceland has blocked a Chinese billionaire’s bid to buy 5300 square kilometres of its wild heathland follow- ing concerns that the sale could give Beijing a strategic foothold in the North Atlantic. Even though the pro- posed purchase by Huang Nubo was for a land-locked and mostly barren region, critics were concerned by its proximity to deepwater ports. There was also anxiety at the scale of the purchase – amounting to 0.3% of the country’s land mass – said the Financial Times.

Chinese personal-computer maker Lenovo an- 6nounced this week that it would soon unveil a “smart TV” product called LeTV. Smart TVs are televi- Photo Source: Reuters sions with computer-style features, which allow compa- nies to sell movies, TV shows and other content directly to users. Google and Apple are both gearing up to unveil Off the market: Huang’s Iceland bid turned down similar products. n 5 Week in China China Ink 2 December 2011

What a drama!

On Monday the State Administration of Radio, Film and Television (SARFT) announced a ban on TV stations showing commercials that break up dramas that last more than 45 minutes.

What the Chinese press says The key issues What the foreign press says

The print media seemed to think it was a positive A popular move by the The South China Morning Post cited SARFT’s move for the viewing audience. “Couch potatoes will regulator? reasoning for the move: “Television is an important be able to enjoy TV dramas without interruption once tool for propaganda and the spreading of culture… the new regulation comes into effect next year,” wrote banning advertising during TV dramas will enhance the China Daily. And according to a survey of 4,000 the plot flow”. But the Financial Times saw more of users of Sina.com, more than 90% favoured the ban. a plan to “assert control over the country’s Peking University’s professor of advertising increasingly commercial media industry”. Chen Gang was also in favour, telling the Beijing AFP echoed the sentiments of local media that Morning Post that the ban would ensure the scrapping the ads seemed to be popular with the “integrity of dramas and a better viewing general public – regardless of the motivation for the experience”. And Li Shugeng, a Bejing resident, new measures. It interviewed the head of the was similarly pleased, telling state media: “The advertising department at Hainan University, who regulation is brilliant. Commercials now almost noted that the number of ads being shown in TV always appear from 10 to 20 minutes into a TV dramas had become intolerable. “There’s a joke that show. I don’t know what I’m watching half of the says that when you watch ads, all of a sudden a TV time. Is it a drama or is it a commercial? And for drama pops up.” some older people, if the commercials are too long, they tend to forget where they were in a story when the drama comes back on.”

The Beijing Times predicted that the main The likely impact? GroupM, the media investment management group, commercial TV stations will take a major revenue hit, told the FT that China’s TV ad spending would hit with the sales director from Zhejiang Satellite TV $31.4 billion this year. That was up 13% on 2010 but already lamenting that it will create havoc for next clearly the ban would hit next year’s sales. On the year’s schedule as the channel will have to contact other hand, the SCMP pointed out, industry advertisers and renegotiate. executives are claiming that if the new move boosts The Beijing Morning Post also reported that viewing rates, the value of the remaining advertising product placement was likely to surge in replacing slots would rise. But Hainan University’s advertising lost ad revenue. It speculated too that some head still estimated that the TV stations stand to lose channels would come up with creative solutions for a collective $3.1 billion in fees. getting around the provisions – such as chopping AFP then took a different tack, suggesting that dramas up into more episodes, but making each the move was an attempt to “woo back viewers lost run less than 45 minutes (thereby allowing them to to the internet”. The view is that TV is less politically show ads). volatile than the web – so the government hasn’t More optimistically, Peking University’s Chen said been happy to see the number of households P h o the ban would lead to a welcome “survival of the watching TV each night slip to 38% from 75% just t o

S

o fittest” among the excessive number of commercial three years ago. In August a survey suggested that u r c e TV channels, as well as promote more creativity. 26% of internet users no longer watch TV at all and :

R e u SARFT’s new boss Cai Fuchao told local media his t e r s mandate is to increase TV audiences. n 6 Week in China Economy 2 December 2011

A little less tight Beijing begins to relax monetary policy

hen British economist John export-driven firms in cities like Wen- WMaynard Keynes was accused zhou hardest, and could trigger a cri- of inconsistency in his policy advice, sis in the shadow banking system he memorably retorted: “When the (See WiC127 and 124). facts change, I change my mind. Weak purchasing manager data What do you do, sir?” from HSBC – which suggested man- And the facts seem to have been ufacturing was contracting – also changing fairly fast in China lately – spooked investors recently, spark- not to mention in other parts of the ing a return to hard landing talk. Time the economy wakes up? world. This has led to a “change of GDP growth has fallen for three mind” for Beijing’s top policymak- straight quarters. on property sales. Last Friday it an- ers too. Japan’s Nikkei agrees that there nounced that the ceiling had been For most of the year, they have is evidence that the real economy is raised for an ‘ordinary home’ from been focused rather single-mind- struggling. At Kobelco Construction a previous maximum of Rmb2.58 edly on curbing inflation, includ- Machinery’s factory in Hangzhou million ($404,000) to Rmb5.44 mil- ing skimming the froth off an over- output has slowed due to falling or- lion. The definition matters as only heating property market. This has ders. “We are only using about 50% so-called ordinary homes merit tax been pursued via a series of tight- of our production capacity at pres- credits. The Shanghai Daily has ening measures based around in- ent,” said Kobelco senior executive been speculating that other cities volved interest rate rises, restric- officer Kazumitsu Takiguchi, who may follow. tions on bank lending and curbs on oversees the firm’s Chinese opera- But the major news came late this real estate purchases. tions. He blamed a pullback in in- week when the central bank cut the The result? Headline inflation fell frastructure spending. banking sector’s reserve ratio re- in October to 5.5%, and most think The Chinese leadership has also quirement by 50 basis points. “This the trend will continue downwards. recognised the wider context, with marks the official start of China’s On Monday the Organisation for Vice-Premier Wang Qishan saying monetary easing,” commented Economic Cooperation and Devel- that he feared the global economic HSBC’s Qu, and the Wall Street Jour- opment (OECD) predicted that in- downturn would last “a long time”. nal noted that this was the first such flation will fall to 3.8% next year. So in a switch of gears Beijing is cut in three years. The measures to rein in the prop- now shifting from tightening poli- It signalled that policymakers erty market have also taken their toll. cies to those designed to counter were focused on stimulating Prices are falling in many cities, sales some of the dangers to future growth. growth again “even at the risk of of new apartments are down and new “Growth is set to overtake infla- reigniting a property bubble,” the construction is often being halted. tion as Beijing policymakers’ top newspaper thought. Some developers are facing cashflow policy concern,” HSBC economist There is a political context here problems (see WiC128 for a more de- Qu Hongbin predicted last week. too. In the coming 12 months Hu Jin- tailed look at the property slowdown). And he was right. The first signs of tao is set to hand over the presi- Indeed, the government’s tighten- a repositioning: six rural credit co- dency to Xi Jinping, and the tradi- ing measures may have worked too operatives in Zhejiang were allowed tion is to ensure that such well, with the external environment to reduce their reserve-require- transitions occur against a healthy Photo Source: Reuters – particularly the paralysis in the EU, ment ratio by 50 basis points to economic backdrop – meaning a China’s biggest export market – 16% last Friday. Also telling was a GDP growth rate of at least 8%. adding a further drag on the econ- move by the Beijing municipal gov- Qu of HSBC now forecasts that it omy. One worry is that this is hitting ernment to relax a few of its curbs will exceed that, at 8.5%. n 7 Week in China Energy & Resources 2 December 2011

Into the sunset? Shi Zhengrong’s solar power firm Suntech is facing tough times

few years ago, Shi Zhengrong of costly mistakes. As an example, Acould claim to be one of the renewable energy expert speak- China’s richest men. In late 2007, ing to Capital Week points to the shares in Suntech Power Holdings, purchase of a Japanese producer of his solar cell manufacturer, were solar modules at a time when mar- trading at more than $80, and it ket prices were extremely high. The looked as though the research-sci- deal now looks extremely expen- entist-turned-entrepreneur was at sive. And there was also a poorly- the forefront of a green revolution. considered investment in thin-film You only have to look at Suntech’s batteries, which led to another Rmb1 current share price to see that billion in losses. events didn’t quite deliver as Another failing is that Suntech planned. The company’s stock is neglected to invest upstream in trading this week at around $2.30. polysilicon production. Companies Although Shi says he is more inter- that put more resources into this ested in “solving problems for business, like GCL Poly, are currently mankind” than accumulating prof- in better shape. its (see Who’s Hu, WiC54), he must Shi now needs to focus on a po- be a little perturbed by his deterio- Sun not shining for Shi tential financing crunch, with a rating net worth. large amount of short-term debt Suntech’s share price is a reflec- likely to find their way into a solar coming due over the next 12 tion of its poor financial perform- farm or associated project. months. Refinancing will be tricky. ance. And last week, the company Instead, the build up in invento- New bank loans will be tougher to reported another loss, this time in ries is leading to “suicidal pricing”, source in the tighter credit environ- the third quarter of $116.4 million. Hari Chandra Polavarapu, an analyst ment and the weak stock price Although better than the $259 mil- at Auriga USA, told Bloomberg. means that raising money in the lion deficit in the previous quar- Prices are down 59% since December capital markets looks like an unap- ter, investors remain distinctly last year, as companies try to offload pealing option. unimpressed. their stock. Shi’s solution is to look for new Part of the problem is the general The problem is that local govern- business away from his traditional malaise in the Chinese solar indus- ments are reluctant to give up on focus in Europe. He told Caijing that try, where there is a massive dis- their solar manufacturing bets, the US and Asia-Pacific will now get crepancy between supply and de- meaning that many producers are more of his time, along with newer mand. Domestic companies now limping on without any real European markets for Suntech such have to capacity to produce between prospect of making money. This as the UK, Greece (good luck with 30GW and 40GW of photovoltaic then reverberates across the whole that) and Belgium. panels annually, an industry analyst industry. “China’s strongest manu- The US also looks like a tough sell, told Capital Week. But last year, to- facturers are sacrificing profitabil- with the Department of Commerce tal installed capacity worldwide was ity because the weakest players still currently investigating whether Chi- just 17.5GW. Optimistic estimates exist,” Polavarapu warns. nese solar firms are benefitting Photo Source: Reuters suggest that this could reach 20GW Others caution that Suntech’s from unfair state subsidies. by the end of 2011. But that still problems cannot be blamed on the That could prove yet another means that many of the solar panels poor state of the industry alone, cloud on what seems to be a fairly currently being produced are un- claiming that Shi has made a series bleak horizon for the solar boss. n 8 Week in China China Consumer 2 December 2011

Baby boom Year of the Dragon promises surge in births and baby-related profits

ext year is the Year of the NDragon and for the millions of Chinese who follow the lunar calen- dar that means it is time to start planning ahead. The same goes for hospital bosses, who will be expect- ing a baby boom in the new year from late January onwards. The reason? Children born under the sign of the ferocious, fire-breath- ing creature are expected to turn out impressively, with many going on to become successful leaders as adults. For example, China’s former paramount leader Deng Xiaoping Enter the dragon... was a dragon, born in 1904. “The dragon’s a lucky sign,” one televisions in each room – has al- (for instance, raw food is not allowed expectant mother in Kunming told ready become popular among because it is thought to delay the re- Yunnan Television. “If you have a wealthier customers, with a staff turn of the uterus to its former size). dragon in your house, everything member telling The Founder maga- Needless to say, Amcare’s five-star will go up. Your family will get rich.’” zine that the hospital is booked solid service does not come cheaply. The Forecasting just how many births for the next few months. hospital charges a minimum of will be scheduled for the year of Amcare’s post-natal services are Rmb50,000 for each delivery and dragon is tricky. But Cheung Tak also designed to reflect traditional then a further Rmb100,000 for post- Hong, who runs the obstetrics and concepts. In a practice that dates natal cooking and caring services. gynaecology department at the back more than a thousand years, “Chinese couples are getting Prince of Wales Hospital in Hong mothers often choose to spend the richer, so they can hire people to Kong, told Bloomberg that at least month after their baby’s birth in help them,” explains Xu Yun, 5% more babies are born in dragon ‘confinement’ or seclusion. Tradi- founder of Yuezixixi, another pri- years compared to the year before. tional Chinese medical advice es- vately-owned confinement venue. Hospitals in China are also pouses a minimum of activity, with For makers of baby food and planning for a surge of births next mothers sometimes advised not to nappies, the Year of the Dragon year, with four new maternity hos- go outside, nor take a bath or even should also be an auspicious one. pitals opening in Beijing to cope brush their teeth. Market research firm Euromonitor with demand. Typically, relatives will take care reckons that China’s diaper market Amcare, a private maternity hos- of new mothers but more recently will reach Rmb28.4 billion in rev- pital in Beijing, has been increasing the practice has been outsourced to enues next year , up from Rmb24.3 the number of staff and rooms that so-called confinement centres, sim- billion in 2011. And the baby-food it offers over the last five years, ilar to the one that Amcare operates. market is expected to double to mainly due to rising demand for At Amcare’s post-natal centres, Rmb136 billion by 2015. “The baby Photo Source: Reuters better standards of hospital care. helpers take care of everything from boom is a good investment idea in The clinic – which is modelled changing nappies to preparing the near term,” says Jessie Guo, more on a hotel than a hospital, meals that comply with the princi- head of consumer research for Jef- with massage chairs and flat-screen ples of traditional Chinese medicine feries Group in Asia. n 9 Week in China Media 2 December 2011

Roll the credits DreamWorks wants to build on Panda profits

effrey Katzenberg and his team at tremendous value, we continue to JDreamWorks have already shown explore opportunities in China. Any that they are willing to travel to further speculation is premature,” China in search of inspiration. a spokesperson told Reuters. For their blockbuster franchise But the news follows another an- Kung Fu Panda, they visited the nouncement in September that panda breeding centre in Chengdu, DreamWorks would allow before trekking to the walled city of Youku.com, the online video site, to Pingyao, the former banking capi- distribute its two Kung Fu Panda DreamWorks JV to kick-off? tal, for ideas for the design of the movies. It marked the first time that movie’s Gongmen City. its content has been made available flect Chinese traditions and values. Katzenberg later said that the sec- online (officially) in China. Industry insiders are excited. ond Kung Fu Panda film was a love DreamWorks is playing catch up “The arrival of DreamWorks in letter sent by Hollywood to China. with rival Disney, which is in the China will inevitably lead to mas- That relationship continues to process of constructing its first sive investment in the country’s an- flourish. theme park near Shanghai. The imation industry, which is lacking Early this month, Katzenberg was $4.4 billion park is scheduled to in talent,” says Wang Lei, chief exec- back in the country, this time trav- open in 2016. utive of Mr. Cartoon Pictures. elling to Shanghai to “wine and Several Hollywood studios have Local moviegoers have long dine” senior officials at the Ministry also been seeking more access to complained that the animated of Culture, Caijing reports. China’s burgeoning movie audi- films made in China are less enter- The trip saw DreamWorks execu- ences. In August, Relativity Media taining than their Hollywood coun- tives continue their talks to set up of formed a joint venture with terparts, or simply try to mimic a joint venture in the city as early as Huaxia Film Distribution and Sky- their Western peers. January next year. Land Film-Television Culture De- When the domestically-produced The plan is for a studio called velopment. Legend of a Rabbit was released in DreamWorks East to produce ani- Legendary Pictures, the produc- August, many questioned its origi- mation features. tion company responsible for In- nality, seeing it as a Kung Fu Panda The joint venture will also feature ception and The Dark Knight, has knock-off. a consortium of Chinese companies also teamed up with Huayi Broth- A key weakness seems to be the likely to include Shanghai Media ers to create Legendary East. storytelling and Yin Hong, a profes- Group and China Media Capital. And But Katzenberg told Caijing that sor of film and television studies together, the partners will invest $2 DreamWorks is going to take a dif- with Tsinghua University, told the billion over the next five years to de- ferent approach to its rivals. While China Daily that domestic films are velop content aimed specifically at he says that Hollywood studios like still to show that they can develop a the Chinese market. Disney are more interested in narrative that tells a Chinese story Industry insiders say the first an- bringing Americana to China, but with a perspective that will en- imated feature is already being pen- DreamWorks wants to produce con- tice global audiences. cilled in for a 2015 release. tent locally and then release it Mark Osborne, one of the direc- DreamWorks is still being cagey around the world. tors of Kung Fu Panda, seems to about its plans for the project. “As it Drawing on its experience with agree, saying that animation film- is an important market for us, and the Kung Fu Panda franchise, makers in China can learn “how to one in which the DreamWorks Ani- DreamWorks thinks it can develop tell an interesting story” from the mation brand and products have global box office hits that also re- Hollywood experts. n 10 Week in China Banking and Finance 2 December 2011

A large serving of dim sum Baosteel becomes the first Chinese company to issue in Hong Kong

hen foreign companies lem for aspiring issuers is that reg- Wstarted issuing renminbi-de- ulators will only allow the largest nominated debt in Hong Kong last state-owned companies to issue dim year, the comparison with the Can- sum debt, according to one deal- tonese dim sum meal seemed appro- maker speaking to the Financial priate one. After all, the first dim sum Times. Privately-owned companies bond issued by a foreign firm raised will have to wait even longer. just $30 million (for McDonald’s), re- It is also worth noting that Baos- flecting the bite-sized nature of the teel will keep the raised capital off- Chinese meal. shore. Another source speaking to But as the deals increase in size, the FT said that the company will the moniker is being stretched to use the money to pay for acquisi- new limits, with Baosteel Group’s tions abroad. recent sale of Rmb3.6 billion ($564 million) of debt in Hong Kong. The deal – managed by HSBC – Xu Lejiang, president of Baosteel also stands out because Baosteel is the first mainland company to issue Around half of the two and three- Strategic a dim sum bond directly from China. year notes were taken by banks. divestment Previously Chinese companies is- Still, Baosteel had to pay coupons sued the bonds either via a Hong higher than it would have needed Bank of America offloads most Kong subsidiary or through an off- to a few months ago, when other of its remaining stake in CCB shore holding company. Chinese firms were issuing debt in That changed in October when less anxious economic times. n November 2008, Bank of Amer- the state planning agency, the “This is a milestone deal for the Iica exercised an option to in- NDRC, granted Baosteel approval to dim sum market,” Gina Tang, HSBC’s crease its stake in China tap the Hong Kong market. Main- head of debt capital markets for Construction Bank to 19.1%. This land companies and financial insti- Hong Kong and China, told was just months after the collapse tutions have a Rmb50 billion quota Bloomberg. “The transaction has at- of Lehman Brothers but the US to issue dim sum bonds this year. tracted massive levels of investor in- bank was confident enough to By raising capital in Hong Kong, terest despite the uncertainty that champion its investment in the Baosteel was able to cut its borrow- rocked markets.” midst of the financial crisis. ing costs by nearly 1.5% compared Sales of dim sum bonds in 2011 It outlined its plans in a state- with yields in Shanghai, reports now stand at Rmb144.1 billion, more ment: “Bank of America intends to Bloomberg. than quadruple the amount in 2010, remain a long-term and significant The debt was split into two, three according to Bloomberg data. And strategic investor in CCB.” and five year tranches (the five-years yields are expected to remain rela- Long-term in the financial vocab- pay the highest rate of interest, at tively low, as there is a huge surplus ulary of today seems to be around 4.375%). They also proved particu- of renminbi deposits in Hong Kong three years, as Bank of America’s larly popular among insurance com- (about Rmb620 billion), much of it stake in CCB is now about 1%, after a Photo Source: Reuters panies, with 59% of the notes going looking to be invested. repeated selling down of its holding to insurers, an investor class that A horde of Chinese companies The most recent sale was late typically holds bonds until matu- would like more access to some of last month, with BoA disposing of rity, reports FinanceAsia. that offshore capital. But the prob- 10.4 billion CCB H shares, account- 11 Week in China Banking and Finance 2 December 2011

ing for around 4.14% of the total is- Only HSBC’s stake in Bank of Com- But as some foreign lenders re- sued shares, to a number of insti- munications has remained stable at treat from the sector, other institu- tutional investors. around 19%. tions are buying in. Singapore’s sov- The private transaction raised Much of the sell-off has been ereign wealth fund Temasek has $1.8 billion in profit, said the US prompted by the need to shore up increased its holdings in CCB to 10%, bank. This was the fifth sale of CCB balance sheets at home. Other fac- becoming its largest shareholder. stock by Bank of America. tors behind the sales include the There were also Chinese buyers: Goldman Sachs also offloaded limited influence on offer to the CITIC Securities, the Social Security some of its Chinese banking assets strategic investor over their Chinese Fund, and the State Administration last month, raising $1.1 billion by partners. A single investor from of Foreign Exchange (SAFE) via a selling shares in Industrial and Com- abroad can only hold up to 20% of a special investment vehicle, reports mercial Bank of China. Chinese bank’s shares. As a minority Caixin Century. These deals are part of a larger shareholder, the investor will always Temasek may well be the ideal trend of foreign strategic investors be sitting in the passenger seat. foreign investor as far as CCB is con- pulling back from the Chinese banks. And at least the holdings can be cerned. “Temasek has never pro- Since the beginning of 2009, foreign sold at a profit, which might not be posed anything at board meetings investors have reduced their hold- true a few years ahead, if concerns or in the business decision-making ings by $25 billion, according to about the potential for rising levels process, nor has it claimed any rele- Bloomberg data, with UBS and Royal of bad debt at the Chinese banks vant rights,” a source close to CCB Bank of Scotland also big sellers. turn out to be accurate (see WiC130). told Caixin Century. n

Who’s Hu: Zuo Zongshen Profiles of China’s business leaders

Getting started Observer. “Then I realised we needed to make changes.” Zuo Zongshen was born in Shanghai in 1952 and grew up in One change was to target new countries, as sales in traditional Chongqing. Like many people his age, he was sent to a rural area markets were suffering. In 2009 Zuo invested in Thailand to during the Cultural Revolution. Later he took a job as a kiln build a production base and he then took over Brazilian brand worker in a Chongqing porcelain factory. He Kasinki, the third largest local motorcycle dabbled in a more entrepreneurial life, selling maker, as part of a Brazilian joint venture books and fruit. Then at 30, he started to learn called Zong Shen CR. how to repair motorcycles. Zuo turned out to be By the end of 2010 sales of Zong Shen CR a natural: “When a motorbike passed by I could reached $104 million, up 261% year-on-year, tell if the engine had got problems just by and this October Zuo announced that Zong Shen listening,” he recalls. CR plans to IPO in Brazil. In 1982 Zuo opened his own motorcycle In the Chinese market, a ban on motorcycles repair shop. He started to reassemble the in more than 170 cities has hit manufacturers, engines himself, winning a series of contracts many of whom have tried to diversify into other with a local motorcycle plant. After a decade businesses. But Zuo continues to believe there is accumulating capital and experience, Zuo still growth to come, especially in the rural areas. founded Zong Shen Motorcycle Technology “China has a large population with limited space,” Corporation with Rmb500,000 in funds. he warns. “Compared to cars, the motorcycle is more convenient and efficient, and it could be Big break more environmentally-friendly.” Zuo was in the right place: by 2010 Chongqing In October this year, Zong Shen also launched was said to make half of China’s motorbikes. its first electric motorcycle at an industry show Back in the 1990s, Zong Shen, started out held in Chongqing. “We’ve got the core producing engines for others, before launching its own 70 cc brand technologies now but the cost is the biggest problem,” Zuo told in 1996. With sales passing Rmb3 billion by 2000, Zong Shen had 21CN Business Herald. became a major player in Chongqing, and began to export.

Photo Source: China Imagine Need to know Going out Zuo is a huge fan of the Harley-Davidson brand and has a Then Zuo was hit by the global financial crisis in 2008. Orders fell collection of Harleys at home. He also owns a motorbike team that 60% and production lines, which normally ran day and night, has competed in the MotoGP world championship since 1999, slowed. “I couldn’t sleep for months,” Zuo told the Economic ranking in the top 10.

12 Week in China Society and Culture 2 December 2011

The crash that enraged China Why school buses have become nation’s most discussed topic

uses are often said to arrive in Btwos or threes, normally after a long wait for frustrated passengers. But in China recently, it is bus ac- cidents that seem to be arriving in a sudden burst, with scores of school children hurt in some high-profile crashes. Two weeks ago, a school van with nine seats – but crammed with 62 children – crashed head-on into a coal truck in western Gansu province. Authorities said the school bus had undergone unauthorised mod- ifications and that the kindergarten had removed all the seats in order to squeeze more children in. The driver, who also died in the accident, was speeding in foggy weather. Then last Saturday, a dozen pri- mary school students were hurt when their school bus overturned in Dandong city in northeastern The wreckage of the school bus in Gansu Liaoning, leaving a total of 35 people injured, the Dandong Morning Post tal of 22 school bus crashes, claiming People’s Daily that most schools opt reported. the lives of 41 students and injuring to rent the vehicles they use, with Both crashes have caught the more than 130. many choosing cheaper vehicles public’s attention. The Liaoning ac- The latest tragedies prompted a not suited to carrying children. cident was the second-most swell of commentary on the inter- “In the US, money for school searched for item on Baidu this net and in the press calling for an buses comes from many places: Monday, while the Gansu crash has overhaul of the school transporta- school districts, state governments consistently ranked among the tion system. Further investigation and the federal government,” says most searched topics since the acci- revealed that there are a total of 180 Guo Xiamei, an education scholar dent happened on November 16. million students in public schools, from Ohio State University. It’s an open secret that Chinese but only 285,000 school buses in “In China, local governments’ fi- children are often crammed aboard operation to transport them. Of nancial situations vary a lot and buses for their journeys to school, those, just 29,000 vehicles met re- some have heavy debts. But as the with rural areas known for especially quired standards, according to re- experiences of countries abroad unsafe transportation in poorly- ports compiled before the most re- show, government support is indis- maintained vans and trucks. cent incidents. pensable toward establishing a Photo Source: Reuters Professor Yuan Guilin of the In- The problem is that most schools sound school-bus system.” stitute for Rural Education and Rural cannot afford to buy new vehicles. A As often the case when an emo- Development told Caijing that sta- kindergarten executive in Nan- tive issue grabs public attention, Pre- tistics over the last year suggest a to- chang, Jiangxi province, told the mier Wen Jiabao also intervened this 13 Week in China Society and Culture 2 December 2011

Into Africa New film spotlights Chinese investment in Zambia

ention Zambia to middle- Maged Chinese, and they are likely to recall a civil engineering project: the Tan-Zam Railway. More than 16,000 Chinese workers were shipped to Zambia in the late 1960s to build this engineering colossus – which stretched nearly 2,000km from the Zambian copper fields to the Tanzanian coast. The hardship of the endeavour was captured by a CCTV documen- tary in 2006, in which one veteran The controversial gift to Macedonia remembered drinking groundwater from an elephant’s footprints, such week, pledging to improve safety had many more buses per person was his thirst. and provide more school buses. (129 per 1,000 people, versus 27 per The railway project came during “In recent days, a series of big ac- 1,000 in China). the Maoist heyday, with China’s cidents involving school buses has “We are worth less than those paramount leader hoping to use led to bitter hatred among the peo- foreigners,” another weibo user con- such projects to export his own ple. These accidents have also made cluded and Zhang Ming, a professor brand of international socialism. A me uneasy,” he announced. “School at Renmin University of China, more recent film about China and bus safety must become a focal seemed to agree: “Don’t cram more Zambia tracks something different: point of every region and every gov- than 60 of our own children into a how China has spent much of the ernment department.” van, while donating school buses to last decade trying to spread its own But public frustration then took a European countries. Is that interna- variant of capitalism. turn for the worse when netizens tionalism or just vanity?” When China Met Africa was re- discovered that China had donated New Weekly also described the leased last month (in spite of the ti- 23 school buses to Macedonia only news of the gift to Macedonia as tle, the only African country fea- last Friday. something that “makes you dare not tured in the 74 minute film is The website of the Ministry of believe your own eyes”. Zambia). The film’s co-directors Nick Foreign Affairs even offered pictures Still, the debate on safer school and Marc Francis got to know the of the three new coaches, decorated buses in China signals an opportu- country well, meeting more than with Chinese and Macedonian flags. nity for Navistar, one of the largest 100 Chinese nationals living and Many netizens were furious, com- school bus manufacturers. The US working in Zambia, and making an plaining that authorities were ig- firm has been in talks with domestic “observational film that would have noring the plight of Chinese school- automaker Anhui Jianghuai Auto- no commentary”. (The finished film children but offering assistance to a mobile to start a joint venture in held true to that promise: there is country whose nationals appeared China, and is now trying to speed up no narrator, only captions explain- to enjoy a higher standard of living the government approval process. ing who people are, as well as trans- than those in China. Yutong Group, a Chinese bus lations of dialogue.) One blogger called Newsbro pro- manufacturer, is also preparing for It’s little surprise that many of Photo Source: China Imagine duced a series of charts suggesting a spike in demand. “We have been the Chinese were hesitant about be- that Macedonian purchasing power studying the school bus market for ing filmed. As we pointed out in per capita was 1.5 times that of the some time and now we will speed WiC129, relations between the two Chinese. Perhaps most gallingly, it up the process,” the company told countries have been strained re- was also suggested that Macedonia China Business News. cently with Zambia’s incoming pres- 14 Week in China Society and Culture 2 December 2011

ident Michael Sata running on an anti-Chinese ticket. And as we dis- cussed in the review of Deborah Brautigam’s The Dragon’s Gift (see WiC91), the merits of China’s in- creasing presence in Africa have come in for wider debate, not only on the continent itself but also in Europe and the US. The film opens with footage of President Hu Jintao’s speech at the 2006 China-Africa Summit. Ad- dressing the continent’s leaders in Beijing, Hu declares: “Our meeting will go down in history. Both China and Africa are cradles of civilisa- tion. China will remain a close Cultural revolution: overseeing seed planting in Zambia friend, reliable partner and good brother of Africa.” him in his fields ordering a member script. “We don’t know what it The next scene jumps to a typical of his family to show a local worker means,” says Mutati. “But it gives morning at the Tian Xiang Farm in how to hoe properly. “You see. It is you a spirit of imagination, of where Zambia. simple,” he insists, in heavily-ac- you are going to lead the country. The owner Liu Changming – one cented English. It’s a puzzle.” of only two local Chinese who The other Chinese national to He then explains why he favours agreed to be shadowed by Marc and agree to be shadowed is Li Jianguo, the Chinese: they get things done Nick Francis and their film crew project manager for China Henan and fast. “When I sit with investors throughout the film – is standing Corporation, a construction firm. from the Western world they show with his arms folded, behind a Li is rebuilding one of Zambia’s me Powerpoint presentations about metal window grate. His daughter most important roads. Smoking projections, cashflow, balance sheets, is checking the register in which lo- away furiously himself, Li explains risk assessments, with all these flam- cal workers are marked as showing that his three priorities are to make boyant graphs. I have never seen up for work. sure the 323km highway is of high these with the Chinese. They just say Liu is proud of his achieve- quality, that he hits construction what are your incentives? What piece ments. Puffing repeatedly on a deadlines, and that the project is a of land can we use?” cigarette (something of a motif profitable one. Mutati then visits a project for all of the Chinese in the film), Living in Zambia has involved promising to become the largest he explains that he worked in an great sacrifices, Li muses, especially copper smelter in sub-Saharan office before he emigrated. “I was the distance from his family. The Africa. A hive of activity, the work an employee in China. In Zambia I camera pans around his office, looks to be nearing completion. “I am an employer,” he affirms. “In which is full of dead flies. That, and was here six months ago,” says the 2006 I bought land covered in the pretty grim living quarters serve minister. “It was all bush. It gives a bush. Local farmers came to as a reminder that the Chinese are sense of the pace at which these watch and said ‘These Chinese are prepared to put up with living con- guys can deliver.” hard-working. Saturday and Sun- ditions that fewer Western expats Mutati is told it will be finished day we are at church. These Chi- may be prepared to tolerate. by the end of the year, using the nese are still working in the Then we are introduced to Felix “most advanced method in the Photo Source: Speak-it Productions Ltd. field.’” Liu then bought more Mutati, Zambia’s minister of trade, world” and he declares it the most farms in 2007 and 2009 and says commerce and industry. Mutati important event to have taken he’ll buy another soon. As the emerges as the film’s focal point place in Zambia for a long time. camera wanders around his com- thanks to his strong personality. In- And then says thank you (in Chi- pound, Liu’s black Mercedes side his office in Lusaka he points to nese, no less). makes an appearance too. Chinese characters that cover an en- That same transformational Liu is a hands-on manager. We see tire wall. It looks to be an ancient theme recurs with Li, the project 15 Week in China Society and Culture 2 December 2011

manager for China Henan. He is Later in Changsha, Mutati ad- flies in. A red and yellow banner wel- proud of his engineering work: dresses a dinner event of Chinese comes him – held aloft by represen- “There is a common saying: ‘If moneymen: “This is a win-win tatives from Huawei, ZTE and Bank you want to get rich build roads.’ equation. Investors from China of China, three of China’s most ac- Roads are like a country’s main ar- make profits and Zambia creates tive Chinese firms in Africa. At a teries – it’s important for blood to jobs and raises taxes. Zambia wins, subsequent ceremony, Chen signs circulate and flow well. So with- China wins.” five loan agreements in the pres- out roads, everything is dead and As he passes through Changsha’s ence of Zambia’s president. As the nothing can move.” new airport, Mutati reflects: “We camera focuses in on the fountain Next stop, Xiamen, where the need to open up the economy, just pens, one thing is notable: the Zam- film crew follows Mutati to a trade like China did.” But a few scenes bians are signing documents writ- show. He takes a delegation to see later, an airport in Zambia offers a ten entirely in Chinese. the CEO of Gold Common Invest- stark contrast, welcoming the arrival That brings home one of the ment Group. The dealmaking is of the Zambian president’s private most striking aspects of the film: swift. Mutati has two tribal elders jet (made by Chinese aviation firm, the issue of language. with him who want to build a mine Avic). China Henan’s Li is there to What’s evident throughout the and a hotel. A smiling translator shake the presidential hand. documentary is how much of a tells the Chinese CEO: “You can build In another airport scene, this struggle it is for the Chinese to on the Big Chief’s land.” A round of time in the capital Lusaka, China’s communicate with the Zambians, applause ensues. commerce minister, Chen Deming with both sides forced to use the

Red Star: Ge You

Who is he? One of China’s most distinguished actors, Ge You, 54, never went to acting school. Until 1978, he was a pig farmer in Beijing and it was his unlikely role in a short skit on pig breeding that brought him to the attention of China’s National Drama Troupe. Ge then started performing in propaganda operas and stage plays before finally venturing into film work in the late 1980s. His breakthrough came in 1989, when he starred in Teng Wenji’s drama The Ballad of Yellow River. His performance won the Best Supporting Actor gong at the prestigious Golden Rooster Awards.

Why is he famous? Ge is best known for his work in critically acclaimed films like Once a pig farmer, now a national beauty Chen Kaige’s Farewell My Concubine and Zhang Yimou’s To Live. The latter won him the best-actor prize at the Cannes festival in 1993, and he remains the only mainland Chinese actor to do so. looks but also on the actor’s career achievements, personal Ge’s likability also wins audiences over, especially in development and charity work. blockbuster films like Let the Bullets Fly and the If You Are the Ge has also been ready to joke about his new status. “I think One series. this [award] is more for my inner beauty,” he said at the award ceremony last week, to laughter. “I’m wondering if I can someday Why is he in the news? find a balance between my inner beauty and my looks.”

Photo Source: China Imagine The Beijing News surprised everyone by naming Ge as top of Despite his popularity, Ge usually tries to keep a low profile. He China’s 50 Most Beautiful People List last month (at least, WiC rarely accepts interviews and refuses to appear on entertainment says it’s surprising because Ge is not the conventionally good- shows. He also says he doesn’t aspire to movie star status but looking type that normally features on this type of list). But the would rather be known just as an actor. newspaper claims that the award is not only judged on physical “An actor is like a worker, you do your job and go home.”

16 Week in China Society and Culture 2 December 2011

Farmer Liu surveys his domain, cigarette in hand The message for Minister Mutati in Xiamen

lingua franca of English. of Liu’s wife. “She thinks we are like realise that bosses probably manage In one telling example, a Chinese cows,” he tells his fellow workers. their fellow citizens in similar way in manager is trying to ask an African Nor are the local staff at China their factories back at home. workman why he isn’t wearing pro- Henan too happy with their Chinese Still, there seems little doubt that tective gloves. He uses a handheld bosses. “They don’t give us respect,” China is now in Africa to stay (there device, which translates phrases a worker complains. “We are not are now thought be a million Chi- from Chinese into English, before trusted. They don’t regard us Zam- nese living on the African continent). asking in a robotic voice: “Where are bians as equals.” And the film’s ending reinforces the gloves I gave you yesterday?” Even Minister Mutati gets some some of its imperialist subtext. Still, China Henan’s Li urges one of this treatment. On a bus journey Standing, looking out over his Zam- new arrival to try his best: “To learn with officials in Hunan, he is asked bian domains, farmer Liu says: “Af- English you’ve got to speak and get about the population of Zambia. He ter I am gone, my children will still the words out. You shouldn’t hesi- replies 13 million, only to be told the be here to carry on my work.” n tate and worry and think ‘did I get it Chinese province he is in has 68 mil- wrong?’. Once you’ve been corrected lion. “There is no doubt we are a lit- it will easily stick in your mind.” tle bigger than them,” an official Keeping track The darker side of the film is the smirks. And throughout the film, ‘them and us’ mentality often the senior party in the relationship In WiC1 we first profiled Guo Jingming, shown by the Chinese towards the is never in doubt. China’s richest novelist. This year the Zambians. The viewer sees it in one Indeed, while there is no narrator writer, who is most famous for his of the earliest scenes featuring to say so, the documentary will leave teenage-targeted literature, once again farmer Liu: on one side of the metal many Western viewers concluding tops the Rich List of Chinese Writers, window grate, he and his family China is an imperialist power in the having earned Rmb24.5 million in copyright fees. The 28 year-old is shout orders; on the other, the Zam- making. That’s partly because the im- followed on the list by authors Nanpai bian labourers wait for their in- ages of China suggest as much. The Sanshu (he made Rmb15.8 million) and structions. The two worlds are tight editing and camera work depict Zheng Yuanjie (Rmb12 million). China clearly delineated. When one local China as a modern, developed nation News Net says all three seem to share trys to come into the house to speak of shiny new airports and wide, open one thing in common: they all have a large fan base among teenagers. to Liu’s daughter, Liu shouts: “Tell highways – the binary opposite of “Currently, readers in China are them to stay outside. Don’t let them the Zambian scrub. This is mislead- mainly composed of young people from 8 Photo Source: Speak-it Productions Ltd. come in the house.” ing: China has plenty of squalor and to 18 years old, who want to gain new No narrative voice is required poverty of its own. It too is a ‘devel- knowledge, get to know society and here: the comment speaks volumes. oping’ nation, although watching widen their experience through reading,” says Li Bo, a publisher. “Seven of the top In fact later in the film, the resent- this film you’d never guess it. 10 writers on this year’s list made their ment of the locals becomes more ev- Moreover, the way in which the fortunes from juvenile readers, which set ident. One of the labourers is not Chinese treat their Zambian workers a record for this kind.” keen on the supervisory attention might look a lot less racist when you 17 Week in China And Finally 2 December 2011

Hard as nails Netizens marvel at Indian troopers

enior Chinese officials may cludes its performance, presumably Shave pulled out of border talks heading backstage for a calming with India in Delhi this week, but cup of tea. back home a group of Sikh warriors Sino-Indian relations are rarely has been taking the Middle King- warm but the video – the first from dom by storm. India to go viral in China – has at This may hurt... A seven minute clip of some bare- least made netizens chuckle. chested Punjabis performing ex- “After watching the Indian talent “Fiery food makes for fiery treme stunts to the sound of Bolly- show, I lost all interest in the talent deeds,” a contributor warned on wood beats has gone viral on the shows in China,” one netizen said video sharing site Youku. Chinese internet, where it has ratch- on his weibo account this week. But some also joked that the eted up over 3.5 million views since Despite sharing a 3,225 kilometre clip might have been produced by it was first posted last Tuesday. border – much of it disputed – the the Indian military in order to un- Taken from an Indian television respective populations of the two nerve the People’s Liberation talent show, the clip shows the Asian giants know relatively little Army should current disagree- bearded men chewing on what ap- about one other. ments escalate into something pear to be fluorescent lighting While some in India marvel at Chi- more serious. tubes and smashing bricks against nese growth rates and infrastructure Last week a high-level Chinese one another. spending, they are also wary of Bei- delegation withdrew from border One chap goes the extra mile by jing’s increasing global influence. talks in Delhi. And in October the being run over simultaneously by Chinese citizens often dismiss two governments clashed over an oil both a car and a motorcycle. Did we India as being dirty, poor and project in the South China Sea which mention the vehicles trample over backwards. China claims as its own but India be- his head? And although Punjab is one of lieves should belong to Vietnam. And then the finale: three fight- India’s wealthier states, many Chi- “The message of this clip is very ers lying on top of one another in a nese were soon speculating that clear,” another netizen announced. bed-of-nails sandwich then create a the Sikhs may have been perform- “Do not to go to war with the Indi- platform from which to wave the In- ing out financial desperation. ans, they are breeding Spartans.” dian flag. Others quipped it was more To see this clip for yourself, go to Bloodied but unbowed by their likely that the spicy cuisine had our website version of this story to sterling efforts, the troop then con- stirred such strange behaviour. find the link. n

Building bridges (and owning them)

“CIC believes that such an investment, guided by commercial principles, offers the chance of a ‘win-win’ solution for all”

* Lou Jiwei, chairman and CEO of the China Investment Corp, says it is interested in investing in infra- structure projects in the US and Europe. Lou wrote in the Financial Times that the UK offered particularly good opportunities being “one of the most open economies in the world”. Lou Jiwei

18 Week in China The Back Page 2 December 2011

Photo of the Week In Numbers 1.33 million The number of people competing for 18,000 of the most highly coveted jobs in China’s public service system. That number is less than last year’s 1.41 million, which the State Administration of Civil Service attributed to stricter assessment standards adopted this year, as well as more career paths opening up for university graduates. Photo Source: China Imagine

19.2 The number of “buy” recommendations on Chinese stocks for every “sell” recommendation, according to data compiled by independent research firm Who says grown men don’t cry: policemen bid farewell in Dandong Forensic Asia. For stocks of companies based in the US, the ratio is 10.5, and for the rest of the Asian-Pacific region it is 7.3.

Where is it? $289 Some of the places referred to in this issue The cost of a 2009 Yao Ming Napa Valley Cabernet Sauvignon. In addition to owning Liaoning a Shanghai basketball team, Yao is now is Beijing launching his own California wine label.

Shandong 6 China The hours of mandatory ‘moral training’ to Shanghai be required of millions of Chinese civil Sichuan Zhejiang Chongqing servants over the next four years. The goal Hunan is for trainees to “avoid moral laxity in their future work,” according to the State Xiamen Yunnan Kunming Administration of Civil Service. Hong Kong

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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