EMERGING MARKETS STALL P.14 THE TRIAL OF BOGU KAILAI P.24 VOL.55 NO.34 AUGUST 23, 2012 WWW.BJREVIEW.COM TAMING THE PROPERTY MARKET The ongoing challenge of controlling housing prices RMB6.00 USD1.70 AUD3.00 GBP1.20 CAD2.60 CHF2.60 JPY188 邮发代号2-922·国内统一刊号：CN11-1576/G2 VOL.55 NO.34 AUGUST 23, 2012 INDEX THE DESK BUSINESS 2 Curb Property Prices THIS WEEK COVER STORY WORLD 34 The Pain of a Pension Deficit Keeping the coffers full 38 Market Watch 10 Cover Story Preventing price increases CULTURE 16 The Next Energy Revolution The future of going green 18 A Structural Conundrum Unemployment in America NATION FEATURES 42 An Academic All-Star 10 New Controls in the Making Leading China’s computer chip The need for new housing regulations charge FORUM 14 Risks in Emerging Markets Slowed economic growth, inflation and social conflict 46 When Law and Love Collide 24 A Gripping Murder Case EXPAT’S EYE Bo Xilai’s wife on trial 22 A Legal Way to Transparency 26 Detox Campaign Supervising government spending 48 Curious Creatures Eliminating hazardous emissions Affections for furry friends 28 No Shortcuts to Success Flaws and fraud in Chinese 32 Treading Lightly for Fast Growth academic recruitment Teetering around inflation and rising housing prices 40 The Sports Gala China and the London Olympics Beijing Review (ISSN 1000-9140), is published weekly for US$64.00 per year by Cypress Books, 360 Swift Avenue, Suite 48, South San Francisco, CA 94080, Periodical Postage Paid at South San Francisco, CA 94080. POSTMASTER: Send address changes to Beijing Review, Cypress Books, 360 Swift Avenue, Suite 48, South San Francisco, CA 94080 THE DESK Curb Property Prices A News Weekly Magazine Despite strict macro-control measures, property prices in some cities are Published Since 1958 still on the rise. The stubborn trend has gone against expectations and un- nerved both the public and the Central Government. The State Council sent iPad APP out 16 inspection teams to the cities with the biggest price upturns, check- http: //www.bjreview.com E-mail: [email protected] ing whether housing policies were being followed and investigating the real President & Editor in Chief: Wang Gangyi estate market to help the Central Government form more targeted macro- Vice President: Qi Wengong level controls. The Central Government has a clear-cut stance, which is to Associate Editors in Chief: Li Jianguo, Huang Wei, Wang Yanjuan, Zhou Jianxiong prevent the reckless rise of property prices in the future and ensure sound Assistant President: Li Zhenzhou economic development. Assistant Editor in Chief: Wa Chunfang In previous years, overheated real estate investment and soaring prop- Executive Editor: Ding Zhitao erty prices have imposed an adverse impact on the Chinese economy. The Assistant Executive Editors: Yao Bin, Zhang Zhiping Central Government made several attempts to curb property prices, such Editorial Administrators: Zhang Xiaoli, Shi Bosen as restricting speculative home purchases in order to keep property prices Senior Consultant: Shao Haiming Opinion Editor: Zan Jifang at a reasonable level. The latest round of real estate controls began in 2010, World Editor: Yan Wei with home purchasing limits established in 50 cities. Nation Editor: Yao Bin The strict approach to price control worked, leading home sales to drop Business Editors: Yu Shujun, Lan Xinzhen Culture Editor: Liu Yunyun and stabilizing property prices. In the second half of 2011, property prices Editorial Consultants: Brandon Taylor, Joseph Halvorson, Evan Z. Hall in some cities even dropped. However, the trend shifted again during the Staff Reporters: Tang Yuankai, Ding Ying, Ding Wenlei, Wang Jun, Li Li, second quarter this year, when land prices in major surveyed cities saw a Yin Pumin, Liu Yu, Pan Xiaoqiao, Yuan Yuan, Wang Hairong, Liu Xinlian, Yu Yan, Yu Lintao, Zhou Xiaoyan, Bai Shi, Xu Tao, Deng Yaqing, Ji Jing quarterly rise. In June, prices of newly built homes went up over the previ- Photo Editor: Wang Xiang ous month. The market expected a strong upturn of property prices once Photographers: Jiang Xiaoying, Wei Yao again. Art: Li Shigong Art Director: Wang Yajuan Macro control of the real estate market involves interests of vari- Chief Designer: Cui Xiaodong ous parties. Local governments, real estate developers and home owners Designer: Zhao Boyu hope to see property prices continue to rise, but the Central Government Proofreading: Qin Wenli, Ma Xin and potential home buyers wish for a decline. If out-of-control housing Distribution Director: Pan Changqing Human Resources: Hou Jin prices rise to a point where average people are unable to afford homes, the International Cooperation: Pan Shuangqin macro-control policies would cease to be effective and the sound economic Legal Counsel: Yue Cheng development of China would be under threat. North America Bureau In this game, local governments play the leading role. Seizing on the Chief: Huang Wei Tel/Fax: 1-201-792-0334 Central Government’s decision to ease monetary policy to stabilize eco- E-mail: [email protected] nomic growth, some local governments have attempted to relax the real General Editorial Office estate control policies, and speculative home buyers are looking to enter Tel: 86-10-68996252 back into the market. Fax: 86-10-68326628 Stimulating economic growth by relaxing real estate control is like English Edition Tel: 86-10-68996259 drinking poison to quench thirst. We hope the Central Government will Advertising Department step in to firmly stop any relaxation or covert act of easing macro control Tel: 86-10-68995813 of the real estate market. It should accelerate the establishment and im- Fax: 86-10-68329398 E-mail: [email protected] provement of long-term mechanisms and policies for real estate control, Distribution Department determine to further various control measures and prevent upturns of prop- Tel: 86-10-68310644 erty prices. Fax: 86-10-68328738 E-mail: [email protected] Local governments should shift their focus to accelerating the trans- Published every Thursday by formation of the economic growth pattern, and make the economy less BEIJING REVIEW, 24 Baiwanzhuang Lu, dependent on the real estate industry by developing emerging industries Beijing 100037, China. and the service industry. Overseas Distributor: China International Book Trading Corporation (Guoji Shudian), P. O. BOX 399, As for real estate developers, it is hoped that they can readjust their Beijing 100044, China product structure and actively participate in the construction of low-income Tel: 86-10-68413849, 1-416-497-8096 (Canada) housing. n Fax: 86-10-68412166 E-mail: [email protected] Website: http://www.cibtc.com General Distributor for Hong Kong, Macao and Taiwan: WRITE TO US Peace Book Co. Ltd. 17/Fl, Paramount Bldg, 12 Ka Yip St, Chai Wan, HK Send an e-mail: [email protected] Tel: 852-28046687 Fax: 852-28046409 Please provide your name and address along with your submissions. Submissions may be edited. Beijing Review (USPS 2812) is published weekly in the United States for US$64.00 per year by Cypress Books, 北京周报 英文版 2012年 第34期 ISSN 1000-9140 广告许可证 0171号 360 Swift Avenue, Suite 48, South San Francisco, CA 94080 北京市期刊登记证第733号 邮发代号2-922·国内统一刊号：CN11-1576/G2 国内零售价：人民币6.00元 News Postage Paid at South San Francisco, CA 94080 POSTMASTER: Send address changes to Beijing Review, CHINA......RMB6.00 U.S.A.......USD1.70 AUSTRALIA......AUD3.00 UK......GBP1.20 CANADA......CAD2.60 SWITZERLAND......CHF2.60 JAPAN......JPY188 EUROPE......EURO1.90 TURKEY......YTL5.00 HK......HKD9.30 NEPAL......RS40 Cypress Books, 360 Swift Avenue, Suite 48, South San Francisco, CA 94080 2 BEIJING REVIEW AUGUST 23, 2012 http://www.bjreview.com THIS WEEK CFP “On the question of whether China is just extracting resources, I think this (accusation) is a little unfair. The United States should not take a moral high ground on resource extraction. We need to deal with the core issue to make sure there is transparency in the extraction of these resources.” Mwangi Kimenyi, Director of the Africa Growth Initiative at the Brookings Institution, remarking on U.S. Secretary of State Hillary Clinton’s latest trip to Africa in a phone interview with Xinhua News Agency from Kenya on August 14 “The price war will serve as a trump card in the initial stage of expansion, but the model of sacrificing reasonable profits is not sustainable in the long run.” Shi An, founder of Gootime Technology, a service provider in the IT industry based in Shanghai, com- menting on the recent cut-throat price war between (Up) Activists set sail from Hong Kong on August 12 for the Diaoyu Islands to assert major Chinese online retailers on August 15 Chinese sovereignty Chinese activists land on the Diaoyu Islands CFP on August 15 “If Japan’s Emperor wishes to visit South Korea, I think it would be good for him to sincerely apologize to those who died while fighting for Representations to Japan independence.” China on June 15 lodged solemn representations with Japan on South Korean President Lee Myung Bak, remarking the latter’s illegal detention of Chinese nationals who went to in Seoul on August 14, a day before the Liberation Day of South Korea the Diaoyu Islands. Chinese Vice Foreign Minister Fu Ying urgently summoned the Japanese Ambassador to China Uichiro Niwa and made a “The era of sitting in meditation by the phone call to her Japanese counterpart, Tsuyoshi Yamaguchi, light of an oil lamp is gone. We need to to discuss the matter. keep pace with the times. The Internet is a good tool with which to disseminate Fu reiterated China’s sovereignty over the Diaoyu Islands and Buddhism.” the affiliated islets, and demanded the Japanese side guarantee Master Yanzheng, a 27-year-old monk of the the safety of the 14 Chinese citizens and free them immediately.