Archive for May, 2014

06/05/2014

China’s Military Recruits Monkeys to Protect Air Force Base – China Real Time Report – WSJ

The Chinese air force has a new secret weapon to protect one of its bases: macaques.

These fuzzy new recruits have been called upon after numerous methods to rid a base of an abundance of migrating birds—from sending  soldiers scampering high up into trees to training eagles and setting up sound and light effects—fell flat. Birds are a headache world-wide in the aviation industry because they can get stuck in the engines of aircraft.

Soldiers have trained the monkeys, according to the official People’s Liberation Army-run news portal, to scamper up trees and rip down the birds’ nests, with one monkey able to destroy six to eight birds’ nests per day. Two macaques have cleared about 180 nests in the month since the PLA adopted them, according to the report.

The macaques’ odor is also said to repel the birds from rebuilding their nests at the same spots, according to a local expert whom the report quotes.

via China’s Military Recruits Monkeys to Protect Air Force Base – China Real Time Report – WSJ.

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06/05/2014

Fake Government Busted in China – China Real Time Report – WSJ

This must take top prize.

“China has seen its share of counterfeits, from fake Apple stores to fake reporters to fake Gucci. Now add fake government to that list.

State media recently reported that a “People’s Government of Dengzhou” set up in central Henan province was toppled after it was found, in fact, to be a fraud.

According to reports, the government was set up late last year by three residents who had gone so far as to counterfeit fake government seals and issue papers in the bogus government’s name. They also tried to build up their own “civil service,” sending out recruitment ads that attracted more than 10 applicants before the real government shut it down.

Apparently the trio wanted to independently annul their existing government on the basis of its “nonperformance.” They located the headquarters of their faux government adjacent to the real one.

This isn’t the first time Dengzhou has made headlines for unusual political news. Four years ago, government mouthpiece China Daily wrote a story about the city titled “Democracy takes root in rural areas.” It chronicled Dengzhou’s measures to involve more residents in the vetting of proposals relating to villages in the region, in what the publication called an “innovative experiment” that was also hailed at the time by then-Vice President Xi Jinping.

No one, evidently, thought the farmers would get quite so innovative.

In the end, the would-be bureaucrats were outed after they served a property developer a suspension notice and tried to levy penalties for illegal construction in the area. The developer got suspicious, and the trio were rounded up. They have been charged with the forging of government documents. Attempts to reach them for comment weren’t successful.

via Fake Government Busted in China – China Real Time Report – WSJ.

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06/05/2014

China’s Campaign Against Foreign Words | World Affairs Journal

My guess is that this anti-English jargon campaign will be just as successful as the French one a few years ago.

“Twice in late April, People’s Daily railed against the incorporation of acronyms and English words in written Chinese. “How much have foreign languages damaged the purity and vitality of the Chinese language?” the Communist Party’s flagship publication asked as it complained of the “zero-translation phenomenon.”

So if you write in the world’s most exquisite language—in my opinion, anyway—don’t even think of jotting down “WiFi,” “MBA,” or “VIP.” If you’re a fan of Apple products, please do not use “iPhone” or “iPad.” And never ever scribble “PM2.5,” a scientific term that has become popular in China due to the air pollution crisis, or “e-mail.”

China’s communist culture caretakers are cheesed, perhaps by the unfairness of the situation. They note that when English absorbs Chinese words, such as “kung fu,” the terms are romanized. When China copies English terms, however, they are often adopted without change, dropped into Chinese text as is.

This is not the first time Beijing has moaned about foreign terms. In 2010 for instance, China Central Television banned “NBA” and required the on-air use of “US professional basketball association.” The irony is that the state broadcaster consistently uses “CCTV” to identify itself, something that has not escaped the attention of China’s noisy online community.

In response to the new language campaign, China’s netizens naturally took to mockery and sarcasm last month. They posted fictitious conversations using ungainly translations for the now shunned foreign terms. On Weibo, China’s microblogging service, they held a “grand competition to keep the purity of the Chinese language.” The consensus was that People’s Daily was once again promoting the ridiculous and impractical, as the substituted Chinese translations were almost always longer and convoluted.

The derision has not stopped China’s policymakers from taking extraordinary steps to defend their language. In 2012, the Chinese government established a linguistics committee to standardize foreign words. In 2013, it published the first ten approved Chinese translations for terms such as WTO, AIDS, and GDP, ordering all media to use them. A second and third series of approved terms are expected this year. How French.

There is a bit of obtuseness in all these elaborate efforts. As People’s Daily, China’s most authoritative publication, talks about foreign terms damaging “purity and vitality,” it forgets that innovation, in the form of borrowing, is the essence of vitality. And as for “purity,” the Chinese people are not buying the Communist Party’s hypocritical argument. “Do you think simplified Chinese characters pure?” asked one blogger.

The party, starting in the early Maoist era, replaced what are now called “traditional” Chinese characters for a set of “simplified” ones, thereby making a wholesale change of the script. The new set of characters may be easier to write, but the forced adoption meant that young Chinese in the Mainland can no longer read classic works in their own language unless they have been transcribed into the new characters.

The party, it seems, is just anti-foreign. “Since the reform and opening up, many people have blindly worshipped the West, casually using foreign words as a way of showing off their knowledge and intellect,” said Xia Jixuan from the Ministry of Education, quoted in People’s Daily. “This also exacerbated the proliferation of foreign words.”

Are foreign words inherently bad? In China, unfortunately, we are seeing further evidence of the closing of Communist Party minds.

via China’s Campaign Against Foreign Words | World Affairs Journal.

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02/05/2014

Philanthropy: China’s Carnegie | The Economist

“THE problem of our age is the proper administration of wealth,” wrote Andrew Carnegie in 1889. More than a century later, the citizens of supposedly Communist China could hardly disagree. Carnegie, one of the wealthiest men of America’s Gilded Age, soon set about giving his money away, and on April 24th Jack Ma, one of the wealthiest men of China’s Gilded Age, suggested he would start to do the same. Mr Ma and Joseph Tsai, co-founders of Alibaba, an online marketplace, announced the creation of philanthropic trusts that could be worth as much as $3 billion. “Somebody has to do something,” says Mr Ma of China’s environmental and health-care problems. “Our job is to wake people up.”

It is easy to be cynical about this. The gift is a move taken straight out of a Silicon Valley public-relations playbook, ahead of Alibaba’s expected initial public offering this year, which could value the company at $150 billion. But it could still have a remarkable effect not just on China’s fast-expanding class of super-rich, but also on its government.

China’s wealthy are a notoriously stingy lot. When two of America’s best-known philanthropists, Bill Gates, who has advised Mr Ma, and Warren Buffett, visited the country in 2010, a meeting they held was notable for the number of Chinese tycoons who stayed away. Of 122 billionaires around the world who have signed the Giving Pledge promoted by Messrs Buffett and Gates, promising to give away half their wealth by the end of their lives, not a single one is Chinese, even though China now has 358 billionaires, one-fifth of the global total.

The main reason for this is fear: many have made their money in the shadows of a supposedly socialist country, so few of China’s rich are keen to identify themselves publicly. China’s princelings, related to the leadership, are often the least enthusiastic of all, especially when the regime of Xi Jinping, China’s president, is condemning corruption, albeit selectively. Having made his money more publicly, Mr Ma may be an exception, but his foundation still adds pressure on other Chinese tycoons. Mr Xi should help, by publicly applauding Mr Ma and by making all donations tax-deductible.

It is also a prompt for Mr Xi to promote civil society. With its countryside teeming with poor children needing education and old people needing health care, the regime has decided to give non-governmental organisations (NGOs) more freedom to operate, under party scrutiny. Mr Xi needs to let them play a larger, more independent role. This highlights the party’s central dilemma: it is scared of allowing independent groups of citizens to flourish and help solve problems, and yet that is exactly what China needs. As long as civil society is kept weak, China’s social problems will get worse. Passing a new charity law, stalled for years, to clarify charities’ legal status would be a useful step in the right direction.

The question for Mr Ma is how far he is prepared to nudge the regime in this direction. His public stance is, sensibly, that he wants to work with the government, not confront it. But the areas he is likely to focus on—education, health care and the environment—matter enormously, and technology can spur political change. Mr Ma recently launched kits for smartphone users to crowdsource data on poor water quality across China, a sly dose of insurrection. Carnegie became famous not just for the money he gave away and the example he set to other philanthropists, but for the way he prompted the American government to embrace education, civic programmes and social reform. Mr Ma’s money and example can do the same for China, if only the Communist Party will allow it.

via Philanthropy: China’s Carnegie | The Economist.

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02/05/2014

Freedom of information: Right to know | The Economist

IN THE summer of 2013 Wu Youshui sent an open government information (OGI) request to every provincial-level government in China. Mr Wu, a lawyer based in the eastern city of Hangzhou, wanted to know about the fines imposed on violators of the one-child policy. Each year provincial governments collect billions of yuan from couples who have too many children, but how this money is spent is not public knowledge. That leaves the system vulnerable to corruption, says Mr Wu. To expose misconduct and spur public debate, he used the legal mechanism of the OGI regulations, China’s version of a freedom of information act.

When the regulations took effect in 2008 it marked, on paper at least, the beginning of a profound change in how the Chinese government handles some kinds of information. A culture of secrecy had for decades been the mainstay of the authoritarian state. But in the modern era absolute opacity can cause discontent that threatens stability. The government’s failure to disclose information about the spread of SARS, a respiratory disease, in 2003 hurt its standing at home and abroad. A government operating in “sunshine”, as state media have put it, could regain citizens’ trust and, the party hoped, help ease tensions.

The OGI regulations set up two ways of accessing government information. Government offices at local and central level had to issue findings of interest, such as plans for land requisitions or house demolition. The information was to be published on official websites and community bulletin boards and in government journals. Departments also became answerable to citizens. A response to a public request had to come within 15 days. This created a new way for people to contact and monitor the government, says Jamie Horsley of the China Law Centre at Yale Law School. At the last nationwide count, in 2011, roughly 3,000 requests had been filed to central-government departments and 1.3m others to offices at the provincial level. Over 70% led to the full or partial release of information, on everything from pollution to food safety to the tax on air fares. “It is as if there has been a pent-up demand and now people are pushing for the information,” Ms Horsley says.

In an important case in 2012 the All-China Environment Federation, a non-profit organisation with links to the government, took an environment-protection bureau in Guizhou province to court. The bureau had twice failed to give a good answer to an OGI request about a dairy farm that was discharging waste. The court ordered the release of the information within ten days. Such rulings against government departments, once rare, are becoming more common. In 2010 the chance of a citizen winning an OGI-related lawsuit in Beijing was 5%, according to research from Peking and Yale Universities. In 2012 courts ruled with the plaintiff in 18% of cases.

On April 1st the State Council, China’s cabinet, issued new guidelines, requiring that officials pay more attention to disclosing information. The guidelines come as the government is curtailing freedom of expression online and in the press.

Inevitably, plenty of information remains off limits. Article Eight of the regulations says disclosure must not endanger state, public or economic security or social stability, an open-ended list that prompts utmost caution from compliers. State and commercial secrets—however vaguely defined—are out-of-bounds. Last June Xie Yanyi, a Beijing lawyer, applied to the public security ministry for information about the surveillance of citizens. He received a note saying such details were not covered by the law. China’s regulations are more restrictive than those elsewhere. In America a request in the public interest suffices. In China, people must prove a personal need.

Government departments, at all levels, still do not release everything they should. But Mr Wu, the lawyer, found they are less able to opt out without a good reason. Guangdong province’s Health and Family Planning Commission initially rebuffed his OGI request, saying “internal management issues” prevented compliance. Mr Wu tried again. On April 1st Guangzhou Intermediate Court ruled in his favour. The commission was ordered to reprocess his request. He awaits word of its decision.

via Freedom of information: Right to know | The Economist.

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02/05/2014

Agriculture: Bring back the landlords | The Economist

CHINA’S Communist Party has always had a problem with big landowners. In Communist culture, they are synonymous with evil. In January on the country’s most-watched television show—a gala at lunar new year—viewers were treated to a scene from a Mao-era ballet featuring young peasants fired with zeal for revenge against a despotic rural landlord. Some critics rolled their eyes about such a throwback to the party’s radical past, but few complained about the stereotyping of landowners. Yet when it comes to letting individual families control large tracts of farmland, Communist Party leaders are beginning to have a change of heart.

Since January last year the term “family farm” has come into vogue in the party’s vocabulary. It refers not to the myriad tiny plots, each farmed by a single family, that are characteristic of the Chinese countryside; but to much larger-scale operations of a kind more familiar elsewhere, such as Europe or America. The trigger for this was the term’s use in a Communist Party directive known as “document number one”, the name traditionally given to the party’s new-year policy pronouncement on rural issues. It said the consolidation of household plots into family farms should be given “encouragement and support”.

On his first trip outside the capital after being appointed prime minister in March last year, Li Keqiang visited a 450-hectare (1,110-acre) family farm in the coastal province of Jiangsu. He said that boosting production was impossible on the tiny plots that most rural households farm (the average is less than half a hectare). “It can only be done through concentrating the land into larger farms”, Mr Li said. With more government support, “the earth could yield gold”, he told residents; a notion that would surprise the 260m people who have left the countryside to work in cities over the last three decades. Many villages are now home mainly to the elderly and left-behind children. During a visit to Switzerland two months later Mr Li again stopped by at a family farm (of a more modest 40 hectares). Chinese media said he wanted to pick up tips from Europe’s “advanced experiences” in running them. Chen Xiwen, a senior party policymaker on rural affairs, was even quoted as saying last year that he would like China to have vast “family farms like America’s”, but that he was worried about the impact on rural employment if farmland were to be managed by so few hands.

As is often the case whenever party policy appears to shift in the countryside, reality on the ground had long been changing before official rhetoric began to catch up. (Peasants started dismantling Mao’s disastrous “people’s communes” before the party began formally doing so in 1982.) The exodus from the countryside has allowed entrepreneurial farmers to build up their holdings by renting land from neighbours who no longer need it. They have not been able to buy it since all rural land is owned “collectively” by villagers. But they have been allowed to take over the right to farm it, and keep any profits. The party does not harp on about evil landlords of yore, since the new big-farmers are, legally speaking, merely tenants. In March last year the agriculture ministry took its first survey of family farms, though it has yet even to define the term precisely. It found there were already 877,000 of them, with an average size of around 13 hectares. They covered 13% of China’s arable land. Since 2008 the area of farmland rented out to other farmers has more than tripled.

via Agriculture: Bring back the landlords | The Economist.

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02/05/2014

Chinese College Grads Choose Jobs Over More Study – Businessweek

As China’s college students prepare for graduation, more are aiming to join the job market than ever before.

Job seekers in Hong Kong

More than 76 percent of those surveyed say they plan to begin working immediately after graduation, up from 73.6 percent last year and 68.5 percent in 2012. Meanwhile, about one-fifth say they will continue with higher education and 4 percent plan to start their own businesses.

That’s shown in an annual survey by Zhaopin.com, one of China’s largest job-seeking websites, which was released on April 15. Zhaopin canvassed more than 52,000 college students across China, 70 percent of which were in their final year as undergraduates, with the remainder being graduate students.

via Chinese College Grads Choose Jobs Over More Study – Businessweek.

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02/05/2014

Leaked Comments From Top Property Developer: China Is Built Out – China Real Time Report – WSJ

Spring hasn’t sprung for China’s chilly housing market and it may not for some time, a high level executive with the country’s largest real-estate developer said in rare remarks leaked online.

A glut of apartments and tightness in the credit market don’t bode well for property developers, said Mao Daqing, vice chairman of China Vanke.

A Chinese flag flies in front of a residential building developed by China Vanke Co., in the Fangshan district of Beijing. Bloomberg News

“Overall, China has reached its capacity limit for new construction of housing projects, only some coastal third- and fourth-tier cities have potential for capacity expansion,” Mr. Mao, who oversees the firm’s Beijing operations, said at a closed door meeting in Beijing on Wednesday (in Chinese). “As to whether there is room for home prices to rise, I don’t see any possibility for a rise in home prices, especially in cities with large housing inventory, unless the government pushes out another few trillion (in stimulus).”

China Vanke Beijing confirmed that Mr. Mao provided an analysis of the housing market in a private event, but added that there were no official transcripts.

Housing sales fell 7.7% in the first quarter this year, and remained sluggish in April, according to private sector estimates.

There is a glut of homes in China’s second-tier cities and some third- and fourth-tier cities due to oversupply of land, Mr. Mao said, highlighting cities like Tangshan, Shenyang and Wuxi. There is insufficient demand as there are not enough new migrants moving into these cities, and with the rich preferring to buy homes in major cities like Beijing.

Any developer who invests in Tangshan, an industrial city east of Beijing, is walking into a trap, he said.

China Vanke, which has a presence in more than 60 Chinese cities, earlier this weak reported a rare year-on-year slide in net profit in its first quarter results.

Mr. Mao also raised some red flags in tier-one cities such as Beijing and Shanghai as well. While demand from end-users is still strong in such cities, he said, land values — seen as a measure of a potential property bubble — are too high. He said land prices were accelerating faster than housing prices in the capital as a result of government efforts to containing prices of new homes there.

He went on to compare land values in Beijing with those in Japan and Hong Kong just before bubbles in those cities burst.  Tokyo’s total land value in 1990, prior to the property bust there, was equal to 63.3% of U.S. GDP in 1990, he said. During the Hong Kong bubble in 1997, land values there reached 66.3% of U.S. GDP

In 2012, the total land value in Beijing was 61.6% of U.S. GDP, “which is a scary number”, Mr Mao said.

via Leaked Comments From Top Property Developer: China Is Built Out – China Real Time Report – WSJ.

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02/05/2014

Maybe China’s Currency Isn’t Undervalued After All – China Real Time Report – WSJ

Note to rest of the world: Stop bugging China on undervaluation of its currency.

The World Bank’s re-estimation of global pricing is leading to a second day of questioning of economic verities. Yesterday, a number of publications used the new numbers to pronounce that the U.S. would next year lose its century-long ranking as the world’s number one economy. (China Real Time came to a more nuanced—and skeptical—conclusion.)

Today, two economists at the Peterson Institute for International Economics, perhaps the world’s top econ think tank, used the numbers to conclude that the Chinese yuan was no longer undervalued, as it has been for decades.

“This estimate is of potential historic significance,” conclude Martin Kessler and Arvind Subramanian. “The end of Chinese mercantilism—and relief for the rest of the world—may be in sight,” they write in a Peterson blog post.

To review, the World Bank re-estimated the size of different economies using a calculation known as purchasing power parity (PPP), which tries to estimate relative wealth by looking at differing prices in different countries for the same goods or services. Such comparisons usually show that developing countries aren’t as poor as they seem.  For instance: A haircut in Beijing costs far less than a haircut in Boston, which means the wealth of a Chinese person with a full head of hair –- let’s call him Mr. Wang—is greater than usually understood.

Cheaper in China: haircuts. Not cheaper: iPhones, BMWs and other imports. Reuters

But Mr. Wang doesn’t buy things in PPP; he buys them using actual currency. When he leaves the hair salon and buys an import, say a U.S. iPhone or a German car, his yuan are converted into dollars or euros at the current exchange rate. Given that Chinese earn far less money than Americans or Germans on average, exchange rate comparisons accentuate the gap between developing and developed nations. Most comparisons of international power are done using the prevailing exchange rate, not PPP.

Now, back to the value of the yuan.

Messrs. Kessler and Subramanian use the new PPP calculations to estimate that between 2011 and March 2014 China’s per-capita GDP grew about 13 percentage points faster than the U.S., which they say should translate into a currency appreciation of around 3.2%. Since the actual appreciation was 7%, that suggests the yuan appreciated too rapidly during that period and made up for some of the time when the yuan didn’t strengthen rapidly enough.  “The renminbi in 2014 is thus fairly valued,” they conclude.

Any estimate of a currency’s valuation is a black art. Different economists use different methods and come up with different conclusions, especially if there isn’t an obvious undervaluation or overvaluation.

It’s hardly surprising that many countries accuse the others of deliberately undervaluing their currencies, and use estimates of currency valuation to make their point. Nearly every government has the same strategy for growth — export more — and a cheap currency helps exporters.

via Maybe China’s Currency Isn’t Undervalued After All – China Real Time Report – WSJ.

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01/05/2014

How Women Lost Out as China’s Property Market Boomed – Businessweek

In 2005, Zhang Yuan and her husband bought an apartment in Beijing for $30,000. Seven years later, in 2012, the same apartment was worth $317,000. Zhang, a professional woman in her 30s, and her husband both contributed money to the down payment and mortgage payments. Only her husband’s name appears on the property deed.

Beijing's central business District is home to high-end housing

At the time the young couple bought their home, Zhang wasn’t thinking much about legal formalities. Men—still regarded as the ostensible heads of households in China—have commonly registered property in their own names.

Since China’s Supreme Court issued a new interpretation of the country’s Marriage Law in 2011, Zhang’s has had second thoughts. The law now stipulates that if a couple divorces and only one person’s name is on the deed, that person—usually a “he”—walks away with full ownership of the marital home.

Since she took two years off work to care for her young child, Zhang has had trouble climbing back onto the career ladder. Today she worries more about money—and her financial dependence on her husband.

According to a 2012 Horizon Research and IFeng.com survey of homeowners in China’s leading cities, men’s names appear on property deeds for marital homes 80 percent of the time, while women’s names appear on just 30 percent of them. “The law is so unfair to women,” Zhang told sociologist Leta Hong Fincher, author of a new book, Leftover Women: The Resurgence of Gender Inequality in China.

The upshot, as Fincher’s book argues, is that China’s women have a claim that is tenuous, at best, to the country’s burgeoning real estate wealth. “Chinese women have largely missed out on what is arguably the biggest accumulation of residential real-estate wealth in history, valued at around 3.3 times China’s [gross domestic product], according to figures from the bank HSBC,” she writes. “That amounted to over $27 trillion at the end of 2012.”

via How Women Lost Out as China’s Property Market Boomed – Businessweek.

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