Archive for ‘Politics’

06/02/2013

* China OKs sweeping tax reforms to tackle inequality

First the talking – now the walking.

Reuters: “China unveiled sweeping tax reforms on Tuesday to make wealthy state-owned firms, property speculators and the rich pay more to narrow a yawning gap between an urban elite and hundreds of millions of rural poor.

A family arrives at Beijing West Railway Station February 5, 2013. REUTERS/Jason Lee

The plans approved by the State Council – China’s cabinet – also included commitments to push forward market-oriented interest rate reforms to give savers a better return and more security.

Chief among the reforms is a requirement to raise the percentage of profits contributed by state-owned firms to the government by about 5 percentage points by 2015.

Together with measures to raise wages and improve households’ return on assets, the reforms signal an attempt to shift economic growth towards increased consumption and away from the current reliance on investment spending.

“The State Council is not just talking about the gap between rich and poor, they’re talking about the whole economy and how income is distributed among various actors – the households, the corporations and the government,” said Andrew Batson, research director of GK Dragonomics, an economic consultancy in Beijing.

“It’s about changing the entire flow of income around the national economy.””

via China OKs sweeping tax reforms to tackle inequality | Reuters.

See also: https://chindia-alert.org/2012/12/10/china-wealth-gap-continues-to-widen-survey-finds/

05/02/2013

* The party may be over, but the hangover is only just beginning

The Times: “12 (or 6) is the number of bottles of fantastically fine vintage claret (or, possibly, dismally mundane bottles of table plonk) consumed in a private room of the Huafa private members’ club in Zhuhai.

drinking wine

There are two very distinct versions of what happened around the table that night in mid-January. Wine investment around the globe may depend on which is the more credible.

In one version, Zhou Shaoqiang, the general manager of the state-owned Zhuhai Investment Holdings Group, hosted a full-bore knees-up for a select gang of local finance officials and state-owned bank executives. In a show of baronial largesse, Mr Zhou poured some of the world’s finest wines down his guests’ necks.

As the collection of emptied Latour and Haut-Brion bottles swelled, so did the bill, with the cost of booze alone hitting somewhere well above the £8,000 mark by the time the party started to wrap up and the Chinese taxpayer (via Mr Zhou’s state-owned company wallet) picked up the tab. The Huafa club, of which Mr Zhou is thought to be a member, has only five private rooms: each comes with a minimum charge of £1,000. As Chinese internet users have pointed out, the cost of those officials’ Premier Cru hangover was the equivalent of an annual white-collar wage.

All of this might have remained Zhou’s little secret, except that one of the diners, a senior local official called Chi Tengfei, snapped a picture of the impressive row of empties, posting the evidence on the internet with the faintly sozzled message: “Drank 12 bottles this evening. What am I going to do tomorrow?”

So far, so outrageous. The Chinese public has all but run out of patience with lavish abuse of the state coffers by officials and state-run companies. Xi Jinping, the incoming president, is well aware of this and twice now has called for a big show of thrift. No more opulent banquets, no more pricey booze has been his mantra and recent weeks have suggested that some were taking it to heart. Including, it seems, Mr Zhou.

Because, after a two-week inquiry by the Zhuhai State-owned Assets Supervision and Administration Commission, a second version of the evening has emerged. In it, Mr Zhou did, indeed, host a banquet, but he was ever so responsible about it. Before the evening began, he had made arrangements with the Huafa club to waive its minimum charge and, when the wine list was brought around, he ordered only six bottles of the cheapest red they had — a dreary draught costing about £18 a bottle. The six bottles of extraordinarily good Bordeaux names were brought — empty — to the table so that the guests could “study great wines from the club sommelier” by staring at empty bottles.

The dinner itself was a staid affair of simple dishes. The only reason the bill was paid by the State, it has since emerged, was because Mr Zhou had forgotten his cash. He rectified that by coming back two weeks later (just before the inquiry’s results were announced) to settle up from his own pocket.

Chinese internet users find this second version of events less plausible than the first, but is their scepticism justified? There is a great deal riding on the answer. China, as everyone in the high-end wine trade knows, has become a monstrously big buyer of the great vintage names. A sizeable chunk of that appetite arises from a tangle of business and bureaucratic relationships where gifting and largesse are the currency.

Mr Xi’s edicts about frugality have already hurt the share price of Moutai, China’s biggest domestic liquor brand. If he really means business, and business dinners more resemble the second version of Mr Zhou’s dinner than the first, the top-end wine market might feel a bump, too.”

via The party may be over, but the hangover is only just beginning | The Times.

04/02/2013

* The party has to stop, technology tycoon tells India’s mega rich

The Times: “One of India’s top technology bosses has attacked the growing tendency towards conspicuous consumption among his country’s business elite, saying that some of the excesses were repugnant in a nation of such poverty.

Indian Dulhan Wedding Services Wallpaper Free Wallpapers Design 1024x768 Pixel

Azim Premji, the billionaire philanthropist and chairman of Wipro, the IT services group, said that practices such as flying in American bands for weddings at $1 million a time were damaging in India, where official statistics last year suggested that 360 million people were living in the depths of poverty.

His words come as Delhi considers imposing higher taxes on the super-rich as it tries to close a yawning budget gap.

The country’s ultra-wealthy should be devoting more of their earnings to philanthropy, Mr Premji said. He declined to be drawn on whether he thought the elite should be subject to higher taxes, emphasising instead the importance of giving away wealth voluntarily. The 67-year-old is one of Asia’s leading philanthropists and in 2001 founded the Azim Premji Foundation, an educational charity to which he has handed billions of dollars.

Mr Premji said: “In India the very rich are demonstrating too much conspicuous wealth in terms of lifestyle. That I think has not been the culture of India in terms of the previous rich, [who] always had very moderate, regulated lifestyles. That is getting a lot of visibility. If you go for parties and you go for weddings and in a country of our poverty some of those make you sick.”

India’s economy has slowed sharply, with growth of 5.5 per cent forecast for this year, down from expansion of over 8 per cent early in the decade. Mr Premji said that his country’s boom had been hyped in the past and that its image had been damaged recently by the economic slowdown and policy indecision.

Mr Premji, ranked as India’s third-wealthiest person by Forbes, warned that unemployment in his country could turn into a “complete disaster” if growth did not accelerate sharply.”

via The party has to stop, technology tycoon tells India’s mega rich | The Times.

04/02/2013

* “Muslims have bigger problems than Rushdie”

Salman Rushdie

Salman Rushdie (Photo credit: Wikipedia)

The Hindu: “Nobel Laureate Amartya Sen said here on Sunday that the Muslim groups who protested against author Salman Rushdie’s visit to the city were distracting attention from “the real disadvantages” that the community faced.

“A lot of people who are enormously disadvantaged have enormous reasons to complain about other things,” Professor Sen said in response to a question on the controversy at the Kolkata Literary Meet, one of the events in the 37 International Kolkata Book Fair.

Professor Sen said that communities such as the Scheduled Castes, the Scheduled Tribes and the Muslims in West Bengal were not as privileged as the rest “in terms of the even-handedness of progress.”

“To subvert that issue into a completely different kind of issue and getting offended about something else — that is distracting attention from the real disadvantages that they face,” Professor Sen said.

The author of The Argumentative Indian said the militancy seen in recent developments restricted the conversation: “Anything that makes the Indian constructive argumentative tradition more militant — that people have the right [to deem an act as offensive] and therefore you cannot say those things — becomes a limitation because it restricts the conversation,” Professor Sen said.”

via The Hindu : News / National : “Muslims have bigger problems than Rushdie”.

See also: http://chindia-alert.org/political-factors/indian-tensions/

02/02/2013

* China’s Environmental Protection Racket

WSJ: “Beijing’s choke-inducing air – which blanketed the city for nearly a week before being cleared away by a bout of sorely-needed wind on Friday — prompted Premier Wen Jiabao to call for action to protect the environment and public health.

If the premier and his colleagues can see through the smog on the policy front, they might consider something that has been all but overshadowed by the capital’s plight: the sorry track record of the environmental watchdog in little Nantong in east China’s Jiangsu province.

The problems in Nantong are a tale of environmental protection gone seriously wrong in a country where money clearly talks. They may also be small but critical components of an increasingly toxic environment.

According to a series of newspaper reports, online versions of which appear to have vanished into the country’s not-so-thin air, more than 30 environmental and other officials from the Nantong area were implicated in a scandal that involves bribery and turning a blind eye to pollution problems. Thanks to the reporting of the Shanghai-based China Business News (in Chinese here and here), it’s now fairly clear that Nantong environmental officials were running something closer to an environmental protection racket.

The newspaper, which had been following the story since the summer of last year, reported earlier this month that the scandal had reached the highest level of the local environmental protection bureau. Contacted by the Wall Street Journal, an official with the Nantong Environmental Protection Bureau was unable to elaborate beyond the official posting on the Nantong discipline inspection committee’s website, which stated that former bureau director Lu Boxin was found guilty of accepting bribes and sentenced to 12 years in prison (in Chinese).

This brief report, posted under the banner headline of “Study the Spirit of the 18th Communist Party Congress, Promote and Deepen the Anti-corruption Campaign and the Building of Clean Government,” said that the bribes were taken on more than one occasion.”

via China’s Environmental Protection Racket – China Real Time Report – WSJ.

See also: https://chindia-alert.org/economic-factors/greening-of-china/

02/02/2013

* Venezuela seeks $4 billion China loan, $2 billion Chevron credit

Reuters: “Venezuela‘s government and state oil company PDVSA are in urgent talks over a long-expected $6 billion in loans from China and U.S. energy giant Chevron that would help relieve the nation’s strained finances, sources close to the discussions said.

Workers stand in front of a drilling rig at an oil well operated by Venezuela's state oil company PDVSA in Morichal July 28, 2011. REUTERS/Carlos Garcia Rawlins

Oil Minister Rafael Ramirez said this week that PDVSA had no plans to issue any more dollar-denominated bonds, confounding widespread speculation that one was planned to address a chronic shortage of dollars for local businesses.

That has left the government in the OPEC member seeking other forms of financing, amid pressure to order a devaluation of its currency that would ease the pressure on its cash flow by providing more bolivars for every dollar of oil sales.

Its top priority is a deal agreed last year with China Development Bank for a $4 billion loan this year.

Venezuela has borrowed $36 billion from China in recent years – repaid with oil shipments – making Beijing the single biggest foreign source of funding for the country’s socialist government, according to finance ministry data.

But a source close to the talks told Reuters that the Chinese team wanted to toughen the terms of the deal.

“The Chinese have introduced a clause that the Venezuela team decided to reject,” the source said, without describing the proposed change. “That was holding things up until recently, but they are coming to an agreement on the amendment.””

via Exclusive: Venezuela seeks $4 billion China loan, $2 billion Chevron credit – sources | Reuters.

31/01/2013

* Less is more at annual meets

China Daily: “Fewer staff, shorter speeches, modest dinners and less printing ― meetings of local legislators and political advisers across China are getting slimmer, simpler and greener.

Less is more at annual meets

Having cut down on the number of staff members involved in the Shanghai People’s Congress by 20 percent from last year’s meeting, the organizer also reduced spending on food and accessories.

“The budget for the first meeting of the 14th Shanghai People’s Congress was nearly 18 percent lower than last year,” said Ni Yinliang, a senior officer of the organizing office of the congress.

The suggested length of speeches is eight minutes in most regions of the country.

“I’ve noticed that the majority of deputies gave shorter speeches in discussions with better quality advice, which enables us to finish the meetings on time and leaves more time to submit our written comments and proposals,” said Zhuang Shaoqin, a Shanghai lawmaker and head of the city’s Fengxian district.

Similarly in Shanxi province, the number of attendees for this year’s two sessions decreased by 144 and the number of staff members was cut by 295, and the length of the congress was reduced from eight days to six and half days, said Ma Wei, director of the organization department of the Chinese People’s Political Consultative Conference‘s Shanxi committee.

Decorations for meetings across the country have been simplified.

Fewer fresh flowers were seen, and red carpets were not rolled out to welcome meeting participants in many regions including Shanghai and Guizhou province.

Shanghai and Shanxi suggested participants use public transport and arranged 15 direct shuttles to travel between subway stations and meeting venues.

No police cars were deployed to escort vehicles carrying meeting participants, and traffic was not suspended to make way for them.

“I’ve taken the subway since the first day of the congress, and I’ve found a great many of deputies have done the same thing in the past four days,” said Wu Jiang, a Shanghai lawmaker.

Many provinces and cities are using online systems to reduce printing.

Shanghai continued its operation of the online submitting system and sent out e-copies of documents to the deputies instead of printing them out.

Wu added that he is very satisfied with the online submitting system of written comments and proposals, which is convenient and saves energy and resources.

The online system has also been applied in other places including Tianjin and Guizhou.

In Tianjin, more lawmakers and political advisers have become aware of using both sides of a piece of paper while taking notes, people.com.cn reported.

In addition, dining expenses have been reduced.

The organizer of Shanghai People’s Congress session offered only six hot dishes served buffet style.

“The buffet allows us to choose what we like and avoid the unnecessary waste of food, which is a very wise decision,” said Shanghai lawmaker Zhuang.

In Guizhou, meeting participants are served with hot water instead of tea.

“Replacing the tea with hot water will definitely minimize the costs of labor and materials,” said Wang Shaoer, a member of the provincial political advisory body.

Hebei province has come up with another way to save resources.

Passes that are valid for five years were given to deputies and committee members.

Passes will be kept by the organizers after the first-year congress and be reused for the following four years. Lawmakers and political advisers serve five-year terms. They used to be given a new pass each year.”

via Less is more at annual meets |Politics |chinadaily.com.cn.

30/01/2013

I wonder if the map is complete. It seems to indicate there are no major military units to the West of 100 degrees East, namely none in Xinjiang, Tibet, Qinghai and Gansu; nor any in the far north, namely none in Inner Mongolia and Heilongjiang. Some Muslims in Xinjiang and Tibetans in Tibet, Qinghai and Gansu have been known to be anti-central government. And, in the past, there have been confrontations with Russian army units up north.

Of course, I am forgetting the 1.5m People’s Armed Police.  Maybe that’s where they are mainly posted.

30/01/2013

* Panicked property fire sale in China amid corruption fight

Sydney Morning Herald: “Thousands of Chinese communist officials have been panicked into a fire sale of their illicit properties and billions of pounds have been smuggled overseas as the country’s new leaders intensify a campaign to root out corruption.

Corruption-fighter Chinese Vice Premier Wang Qishan in Beijing, China.

Luxurious properties are being dumped on the market in Beijing, Shanghai and Guangzhou for anyone able to pay in cash as officials try to cover their tracks. A report by the party’s anti-corruption unit, the Central Commission for Discipline Inspection, said “a wave of luxury home sales began last November and has accelerated since December”.

It said the volume of deals had intensified by “a hundred times” after Xi Jinping, the incoming Chinese president, warned that corruption could kill the party and put one of the country’s most vigorous and resolute politicians, Wang Qishan, in charge of stamping out graft.

Fu Zongmo, an estate agent in Sanya, Hainan, said his colleagues had sold two houses recently for government officials. In recent years, the tropical beaches and golf courses of Sanya have attracted plenty of speculators but recently the market has stalled.”

via Panicked property fire sale in China amid corruption fight.

27/01/2013

* China could prove ultimate winner in Afghanistan

SCMP: “China, long a bystander to the conflict in Afghanistan, is stepping up its involvement as US-led forces prepare to withdraw, attracted by the country’s vast mineral resources but concerned that any post-next year chaos could embolden Islamist insurgents in its own territory.

chiafgh.jpg

Cheered on by the US and other Western governments, which see Asia’s giant as a potentially stabilising force, China could prove the ultimate winner in Afghanistan – having shed no blood and not much aid.

Security – or the lack of it – remains the key challenge: Chinese enterprises have already bagged three multibillion dollar investment projects, but they won’t be able to go forward unless conditions get safer. While the Chinese do not appear ready to rush into any vacuum left by the withdrawal of foreign troops, a definite shift towards a more hands-on approach to Afghanistan is under way.

China is the only actor who can foot the level of investment needed in Afghanistan to make it succeed and stick it out

Beijing signed a strategic partnership last summer with the war-torn country. This was followed in September with a trip to Kabul by its top security official, the first by a leading Chinese government figure in 46 years, and the announcement that China would train 300 Afghan police officers. China is also showing signs of willingness to help negotiate a peace agreement as Nato prepares to pull out in two years.

It’s a new role for China, as its growing economic might gives it a bigger stake in global affairs. Success, though far from guaranteed, could mean a big payoff for a country hungry for resources to sustain its economic growth and eager to maintain stability in Xinjiang.

“If you are able to see a more or less stable situation in Afghanistan, if it becomes another relatively normal Central Asian state, China will be the natural beneficiary,” says Andrew Small, a China expert at The German Marshall Fund of the United States, an American research institute. “If you look across Central Asia, that is what has already happened. … China is the only actor who can foot the level of investment needed in Afghanistan to make it succeed and stick it out.””

via China could prove ultimate winner in Afghanistan | South China Morning Post.

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