baron

Lying in a Beijing military hospital in 1990, General Wang Zhen told a visitor he felt betrayed. Decades after he risked his life fighting for an egalitarian utopia, the ideals he held as one of Communist China’s founding fathers were being undermined by the capitalist ways of his children — business leaders in finance, aviation and computers.

“Turtle eggs,” he said to the visiting well-wisher, using a slang term for bastards. “I don’t acknowledge them as my sons.”

Billionaire Princelings Ruin a Chinese Vision

This week’s Bloomberg News expose on the so-called Eight Immortals is a case in point. Building on a June article tracing the accumulated wealth of the family of Xi Jinping, China’s next president, it described the vast fortunes being amassed by the offspring of the founding fathers who were instrumental in Mao Zedong’s rise to power in 1949. Mao changed the world by meeting U.S. President Richard Nixon, and Immortals such as Deng Xiaoping engineered the economic boom that has unfolded since then.

China’s anti-corruption drive triggers frantic property dump among officials

Real estate agents in provinces such as Guangdong and Jiangsu have been frantically trying to push deals for a torrent of second-hand flats suddenly released on the market – many of which belong to government officials, the Oriental Morning Post reported on Monday.

China’s anti-corruption drive triggers frantic property dump among officials

Ernest Kao

24 December 2012

With an imminent state-led corruption crackdown looming, nervous Chinese officials – some of whom own multiple properties – are swiftly dumping assets or land holdings via private channels such as intermediaries.

Property agents have reported receiving mass produced text messages such as “Eight sets of hard-to-find flats, owner selling all at once, high-quality government resources”, the Oriental Morning Post reported.

“What’s strange is that these government people are anxious enough to call us requesting an urgent search for intermediaries to help sell their property holdings,” said a Jiangsu property manager from a financial advisory who was quoted by the pseudonym, Yang Zhi.

The report emphasised this was only the “tip of the iceberg”, suggesting the possibility of more asset sales by anxious government officials in the future.

The massive fire sale has sparked concerns that oversupply could lead to a decline in home prices in the secondary market. However, Chinese real estate mogul Huang Nubo, of the Zhongkun Investment Group, pointed out that the government’s anti-corruption policies could actually be more effective in stabilising the property bubble than the recent financial caps and monetary easing.

Huang reiterated that real estate markets would be brought back to normal because they would more accurately reflect trends in demand and supply since officials had no more property to secretly hoard.

Home prices on the mainland are forecasted to rise about 7.8 per cent [3] next year while property investments will be up roughly 17 per cent, according to a recent report by the China Index Academy.

All this comes amidst new anti-corruption measures by the Central Commission for Discipline Inspection to reform and bolster laws on assets disclosure and properties declaration amongst high-, middle- and low-ranking government officials.

A few members of the National People’s Congress have proposed the complete removal of “property privacy” for civil servants in an effort to tackle huge gains from “grey income”.

Grey income is often left unreported by wealthy individuals and government officials due to various loopholes such as supervisory weaknesses, rent-seeking and price distortions in the system. Government officials, for example, can transfer ownership of property titles to relatives and friends to avoid having to declare the property.

Many government officials are known to have secret financial investments on hand but those who own dozens of undeclared property have been dubbed by netizens on social media as “uncles and aunts of property”.

A junior official from Guangzhou’s Panyu district was sacked charged with corruption in October after authorities uncovered that he and his family owned 22 residential and commercial properties totalling to about 40 million yuan (HK$50 million). A number of other property “uncles and aunts” have since been implicated on similar charges.

Agony endures 75 years after Nanking Massacre

Three quarters of a century after Japanese soldiers butchered her family and left her for dead, Xia Shuqin says she relives her terror with every denial that the Nanking Massacre ever happened.

Agony endures 75 years after Nanking Massacre

Agence France-Presse in Nanjing

07 December 2012

Three quarters of a century after Japanese soldiers butchered her family and left her for dead, Xia Shuqin says she relives her terror with every denial that the Nanking Massacre ever happened.

As the Imperial Japanese Army entered China’s then capital city on December 13, 1937, Xia heard pounding at the door.

Within minutes, seven of her family lay dead, killed by invading troops on the first day of two months of slaughter, rape and destruction now known as the Nanking Massacre.

Part of the conflicts that led up to the second world war, it stands as the Japanese military’s worst atrocity and remains a bitter strain on the two countries’ relationship.

Xia’s father was shot as he opened the door, before the troops dragged her mother from under a table, still clutching Xia’s one-year-old sister.

Both were bayoneted to death – but not before Xia’s mother was gang-raped.

“They threw my sister to the ground and held my mother on the table, ripping at her clothes,” she said, her voice breaking.

Two children from the neighbouring house were also killed as Xia hid under the bedclothes in a back room along with her three other sisters, her grandparents sitting on the bed.

For a moment there was silence, then the troops entered, shooting her grandparents in the head before raping and killing her 15- and 13-year-old sisters.

“I was only eight years old at the time, but I knew what had happened to my older sisters, that they had been raped and had died enduring terrible pain and suffering,” she said.

“I cried so much that I could barely see anymore. It makes me sad every time I think about it.”

Xia was stabbed three times in her back and shoulders and passed out. She woke to find she and her four-year-old sister were the only ones to have survived the slaughter.

The two girls hid among the decaying corpses for 10 days before an elderly couple found them and took them to the International Safety Zone, a makeshift refugee camp set up by foreigners who had stayed in Nanjing to try to prevent further killings.

The massacre continues to have a deep impact on modern-day relations between China and Japan, not least because both sides differ on the scale of carnage.

China says 300,000 people were killed, while in an inconclusive joint study two years ago the Japanese side pointed to “various estimates” ranging from as low as 20,000 to 200,000.

But some fringe analysts and ultraconservative politicians in Japan dispute that atrocities ever took place in the city, known as Nanking at the time.

“I am over 80 years old now and I am still receiving this kind of bullying and humiliation,” says Xia, who has spent the last 12 years fighting Japanese deniers through the courts.

“They said that the massacre was false. That it didn’t exist. This is not possible as my knife scars are still there,” she said, pointing to her back and shoulder, her eyes glistening with tears.

The two Asian powers are now the world’s second- and third-biggest economies and have developed deep trade ties, but the weight of history bears heavy on their relationship.

China sees itself as having been humiliated for decades by Japanese imperialists, and earlier this year a wave of anti-Japanese demonstrations broke out across the country, triggered by Tokyo’s nationalisation of disputed East China Sea islands.

Japanese firms shut or scaled back production and Chinese consumers shunned Japanese brands, while US Defence Secretary Leon Panetta warned of the risks of escalation.

Some outside historians believe the Nanking Massacre was an intentional attempt to terrorise China into total surrender, while others argue that, drained by months of combat, the soldiers sought to claim the “spoils of victory”.

“Across China people are still bitter over what happened in Nanjing and during the invasion,” said Wang Weixing, deputy director of the Institute of History Studies of Jiangsu Provincial Academy of Social Science.

“It is now 75 years since the massacre, but the Japanese refuse to recognise their history.”

China accuses Japan of glossing over its wartime past in some school textbooks, and reacts with fury every time a leading Japanese politician visits the Yasukuni shrine in Tokyo, where the souls of the country’s war dead are enshrined including 14 Class A war criminals, among them Iwane Matsui, commander of Japanese forces at Nanjing, who was executed after the war.

But Chinese dissidents say Beijing nurtures anti-Japanese sentiment as part of the Communist Party’s tightly scripted, historic claim to a legitimate right to rule. Artist Ai Weiwei said this year’s protests were “prepared” by Beijing.

Tokyo says it has “deep remorse and heartfelt apology always engraved in mind” over its role in the war.

“Japan candidly acknowledges that during a certain period in its history, Japan, through its colonial rule and aggression, caused tremendous damage and suffering to the people of many countries,” says the foreign ministry.

Microsoft ditches Windows Live Messenger for Skype

Microsoft said Windows Live Messenger (WLM) would be turned off by March 2013 worldwide, with the exception of China.

Microsoft ditches Windows Live Messenger for Skype

Microsoft has announced it intends to “retire” its instant message chat tool and replace it with Skype’s messaging tool.

The news comes 18 months after the software giant announced it was paying $8.5bn (£5.3bn) for the communications software developer.

Microsoft said Windows Live Messenger (WLM) would be turned off by March 2013 worldwide, with the exception of China.

It reflects the firm’s determination to focus its efforts on Skype.

WLM launched in 1999 when it was known as MSN Messenger. Over time, photo delivery, video calls and games were added to the package’s text-based messages.

In 2009, the firm said it had 330 million active users.

Chat ‘cannibalisation’

According to internet analysis firm Comscore, WLM still had more than double the number of Skype’s instant messenger facility at the start of this year and was second only in popularity to Yahoo Messenger.

But the report suggested WLM’s US audience had fallen to 8.3 million unique users, representing a 48% drop year-on-year. By contrast, the number of people using Skype to instant message each other grew over the period.

“When a company has competing products that can result in cannibalisation it’s often better to focus on a single one,” said Brian Blau from the consultancy Gartner.

“Skype’s top-up services offer the chance to monetise its users and Microsoft is also looking towards opportunities in the living room.

“Messenger doesn’t seem like an appropriate communications platform for TVs or the firm’s Xbox console – but Skype does.”

He also noted that the firm had opted to integrate Skype into its new Windows Phone 8 smartphone software, eclipsing the effort to integrate WLM into the message threads of the operating system’ previous version.

To ease the changeover, Microsoft is offering a tool to migrate WLM messenger contacts over.

The risk is that the move encourages users to switch instead to rival platforms such as WhatsApp Messenger, AIM or Google Talk.

But Microsoft is at least partially protected by its tie-up with Facebook last year. Skype video calls are now offered as an extra to the social network’s own instant messaging tool.

Neil Heywood Killed in China Had MI6 Spy Links

Cruising around Beijing in a silver Jaguar with “007” in the license plate, Neil Heywood seemed to relish the air of intrigue that surrounded him.

Neil Heywood Killed in China Had Spy Links

By JEREMY PAGE, WSJ

06 November 2012

BEIJING – Cruising around Beijing in a silver Jaguar with “007” in the license plate, Neil Heywood seemed to relish the air of intrigue that surrounded him.

In meetings, the British consultant hinted about his connections to Bo Xilai—the onetime Communist Party highflier—but often he would refuse to hand over a business card. He spoke Mandarin, smoked heavily and worked part time for a dealer of Aston Martin cars, the British brand driven by James Bond. Some thought him a fantasist, others a fraud.

But his contrived aura of mystery appears to have been a double bluff: He had been knowingly providing information about the Bo family to Britain’s Secret Intelligence Service, known as MI6, for more than a year when he was murdered in China last November, an investigation by The Wall Street Journal has found.

The revelation is a new twist in the saga of Mr. Bo, whose wife was convicted in August of poisoning Mr. Heywood in his hotel room in the southwestern city of Chongqing, where Mr. Bo was then party chief. The downfall of one of the party’s most powerful families threw into turmoil China’s plans for a once-a-decade leadership transition, due to start at the 18th Party Congress opening Thursday, and raised questions about corruption, abuse of power and bitter personal rivalries within China’s political elite.

The Journal investigation, based on interviews with current and former British officials and close friends of the murdered Briton, found that a person Mr. Heywood met in 2009 later acknowledged being an MI6 officer to him. Mr. Heywood subsequently met that person regularly in China and continued to provide information on Mr. Bo’s private affairs.

China regards the private lives of its leaders as state secrets, and information about them and their families is prized by foreign governments trying to understand the inner workings of an opaque political system.

British authorities have sought to quell speculation that Mr. Heywood was a spy ever since the Journal reported in March that he had been working occasionally in China for a London-based business-intelligence company founded by a former MI6 officer and staffed by many former spies.

William Hague, the British foreign secretary who oversees MI6, broke with standard policy of not commenting on intelligence matters and issued a statement in April saying Mr. Heywood, who was 41 when he died, was “not an employee of the British government in any capacity.”

That was technically true, according to people familiar with the matter. They said Mr. Heywood wasn’t an MI6 officer, wasn’t paid and was “never in receipt of tasking”—meaning he never was given a specific mission to carry out or asked to seek a particular piece of information.

But he was a wilful and knowing informant, and his MI6 contact once described him as “useful” to a former colleague. “A little goes a long way,” the former colleague recalls the contact saying in relation to intelligence reports based on Mr. Heywood’s information.

Mr. Heywood’s intelligence links cast new light on the response to his death from British authorities, who initially accepted the local police’s conclusion that he died from “excessive alcohol consumption” and didn’t try to prevent his body from being quickly cremated without an autopsy. The British government didn’t ask China for an investigation until Feb. 15—a week after a former Chongqing police chief, Wang Lijun, fled to a U.S. consulate in China and told U.S. diplomats that Mr. Bo’s wife, Gu Kailai, had murdered the Briton.

There could be implications, too, for Chinese authorities, who would be guilty of a major security breach if they were unaware that MI6 had a source inside the inner family circle of a member of the Politburo—the party’s top 25 leaders—according to people familiar with the matter. If China’s security services were aware of Mr. Heywood’s contacts with MI6, they likely had him under surveillance during his final visit to Chongqing, those people said.

Until the scandal broke, Mr. Bo was a front-runner for promotion to the Politburo Standing Committee—the party’s top decision-making body—in this year’s leadership change.

Mr. Bo, sacked from the Politburo in April, is now facing criminal charges after Chinese authorities accused him in September of a series of offenses, including bribe-taking and interference in the murder investigation into his wife.

Neither Chinese nor British officials have suggested Mr. Heywood was killed because of his MI6 links. A Chinese court found Ms. Gu guilty in August of killing him because she thought he threatened her son over a business dispute, according to the state-run Xinhua news agency.

However, friends of Mr. Heywood and prominent Chinese figures have pointed out omissions, ambiguities and inconsistencies in the official account of his killing presented by state media.

And when Mr. Wang fled to the U.S. consulate in Chengdu on Feb. 6, he told U.S. diplomats there that Ms. Gu had confessed to him that she “killed a spy,” according to one person who has seen a transcript of what Mr. Wang said.

A spokesman for Britain’s Foreign Office declined to comment on what was said in the U.S. consulate, and, when asked about Mr. Heywood’s relationship with MI6, referred back to Mr. Hague’s statement in April.

Asked whether Mr. Heywood had been knowingly passing information to an MI6 officer, without being a government employee, the spokesman said: “We do not comment on intelligence matters or allegations of intelligence matters.” Mr. Heywood’s MI6 contact declined to comment.

Former intelligence officials say most informants and agents in the field aren’t considered employees because they rarely have a contract and aren’t necessarily paid, but people are usually registered as “knowing” sources and assigned a code name if they are providing information to someone who has acknowledged being an MI6 officer.

Mr. Heywood’s Chinese wife, Lulu, declined to comment. His mother and sister didn’t respond to requests for comment through an intermediary. China’s Foreign Ministry didn’t respond to a request for comment.

Mr. Heywood was a potentially risky choice as an informant, not least because of the 007 license plate on his Jaguar. He was, on the other hand, an old-fashioned patriot with a taste for adventure. He was in the rare position of having regular contact with the family of a Politburo member as well as intimate knowledge of their private affairs, according to several of his closest friends. Ms. Gu was godmother to his daughter, Olivia, according to one close friend.

He got to know the family in the 1990s while living in the northeastern city of Dalian, where Mr. Bo was mayor at the time, according to several of his friends, and had become part of an “inner circle” of friends and advisers.

Mr. Heywood kept a low profile in the expatriate community, according to people who knew him, using his connections in China to build a modest freelance consultancy business advising companies and individuals on how to navigate Chinese politics and bureaucracy.

He had dealings with several British companies and politicians, including at least two members of Britain’s House of Lords—the upper house of Parliament. One of those peers met Mr. Heywood several times in the company of his MI6 contact, according to people familiar with the matter.

In the last two years of his life, Mr. Heywood’s relationship with the Bo family deteriorated, especially after Ms. Gu became convinced she had been betrayed by a member of her “inner circle” and demanded that Mr. Heywood divorce his wife and swear an oath of allegiance to Ms. Gu, according to friends of Mr. Heywood.

Mr. Heywood informed his contact of this, according to people familiar with the matter. The contact warned him at one point that he should be careful not to become “a headline,” but continued meeting him and filing confidential reports on those meetings, according to those people.

Mr. Heywood hadn’t seen Mr. Bo for more than a year when he died and had been making plans to leave China, but he appeared to be trying to persuade the Bo family to pay him money he felt he was owed, according to close friends. They said he seemed stressed and increasingly concerned that his emails and phone calls were being monitored. He also had put on weight and begun to smoke more heavily.

“He definitely felt that he should have got more out of the relationship” with the Bo family, said one close friend. “That may explain why he agreed to go to Chongqing that last time. I think he was still hoping to get what he thought he was owed.”

Mr. Heywood flew to Chongqing on Nov. 13 after being summoned at short notice to a meeting with the Bo family, according to Xinhua. He believed he was “in trouble,” according to one friend he contacted that day.

He was murdered that night in his hotel room. According to an official account of Ms. Gu’s trial from Xinhua, she poured potassium cyanide in his mouth after he vomited from drunkenness and asked for a drink of water.

The Foreign Office said that no British officials, including MI6 officers, were in contact with him in the 48 hours before his death, but declined to comment on when and how it became aware of his relationship with the Bo family and that he had been summoned to Chongqing to meet them.

Mr. Heywood’s body was found on Nov. 15, and the British consulate was informed by local authorities the next day, according to a statement by Mr. Hague to Parliament.

Chongqing authorities initially told Mr. Heywood’s wife, who had travelled to Chongqing, that he had died of a heart attack, while informing the consulate that he died of “excessive alcohol consumption,” according to British officials. They said the body was cremated on Nov. 18 without an autopsy, but with the permission of Mr. Heywood’s wife.

British consular officials formally expressed to their superiors their concern and suspicion about how Chinese authorities handled Mr. Heywood’s death, but other British officials believed that asking for an investigation would be problematic, according to people with knowledge of the events.

The British officials who initially handled Mr. Heywood’s death are unlikely to have known about his MI6 links or his connection to the Bo family, these people said, but intelligence officials in Beijing and London would have been aware at the time of his death, or made aware soon after.

Britain’s Foreign Office says it had no reason to suspect foul play until members of the British community began raising suspicions on Jan. 18. But the Foreign Office didn’t raise the matter with Chinese authorities until almost a month later—after Mr. Wang’s flight to the U.S. consulate in Chengdu.

U.S. officials informed British authorities about Mr. Wang’s allegations while he was still in the consulate on Feb. 7, according to the Foreign Office. It also told the Journal that a British diplomat was sent to Chengdu to try to meet Mr. Wang, but arrived after he had left the consulate.

Mr. Hague has said that the British Embassy first asked the Chinese central government to investigate Mr. Heywood’s death on Feb. 15. But British authorities didn’t make that public until more than a month later—a delay that confused some U.S. officials following the matter.

“We couldn’t understand what the British were waiting for,” said one U.S. official who was unaware of any links between Mr. Heywood and MI6.

The Journal was the first to report, on March 26, that Britain had asked China to investigate Mr. Heywood’s death, as well as to provide details of his connection to the Bo family and of Mr. Wang’s allegations in the U.S. consulate. The following day, the Journal reported that he had worked occasionally for Hakluyt, the business-intelligence company founded by a former MI6 officer.

The company said he wasn’t a full-time employee and wasn’t involved in projects in Chongqing, but declined to say what he had worked on in the past.

Richard Ottaway, a Conservative member of Parliament and chairman of the Foreign Affairs Committee, wrote a letter to Mr. Hague in April asking him to address the speculation about Mr. Heywood’s relationship with British intelligence.

Mr. Hague responded in a letter dated April 26: “The Committee will recognize that it is long established government policy neither to confirm nor deny speculation of this sort. However, given the intense interest in this case it is, exceptionally, appropriate for me to confirm that Mr. Heywood was not an employee of the British government in any capacity.”

Chinese Messaging App Gains Ground Elsewhere

WeChat, a mobile messaging application created by Tencent Holdings, China’s largest Internet company, is aggressively trying to buck the trend and establish itself in the expanding global market for smartphone apps. Based on some analysts’ predictions, the company may actually have a shot.

Chinese Messaging App Gains Ground Elsewhere

By ADAM CENTURY

05 November 2012

BEIJING — Chinese Internet companies have long struggled to establish their products beyond the country’s borders. In 2007 China’s dominant search engine, Baidu, announced an ambitious plan to break into the Japanese search engine market; as of last year, the company said it had lost more than $108 million trying.

WeChat is most often likened to WhatsApp, a smartphone application popular in the United States that allows users to send text, image or audio messages for free to other subscribers. But WhatsApp’s Chinese counterpart is quickly moving beyond simple multimedia instant-messaging. In the last few months, it has announced a steady stream of new features that many say surpass those offered by WhatsApp and Asian competitors like Kakao Talk and LINE.

“I use WeChat for messaging and group chatting, but I’ve also started getting into its social network,” said Kate Wan, a 29-year-old media professional in Beijing, referring to WeChat “Moments,” a feature that allows users to post pictures and update their online status. “It’s become a huge part of my daily life.”

Since the introduction of the application in January 2011, WeChat, known as Weixin in Chinese, has grown at a blistering pace. In September, Pony Ma, Tencent’s chief executive, announced that its user base had doubled to 200 million from 100 million in six months.

Tencent is vying to make WeChat the dominant global mobile messaging application. The app is available in eight languages, including Russian, Indonesian, Portuguese and Thai, and there are plans to expand into other languages.

“The Chinese Internet market is so set apart from other countries that we inside the industry refer to it as the Galápagos Island syndrome,” said Kai Lukoff, the editor of TechRice, a China-focused technology blog based in Beijing. “Domestic Internet products are extremely well adapted to the Chinese market, but they are way out of place for global users.”

But industry experts now argue that app retailers like the Apple iTunes Store and Google Play empower developers anywhere to reach consumers everywhere. The openness of these distribution platforms could provide WeChat with a conduit into the international smartphone market, some analysts say.

Duncan Clark, chairman of BDA China, a consulting firm that specializes in China’s technology and Internet sectors, said WeChat, with its sophisticated but easy-to-navigate interface and features, had the potential to overcome any lingering doubts in the West over the Made-in-China label.

“Many people are afraid of Chinese products, whether milk, cat food or Internet services,” Mr. Clark said. “But with the App Store, it’s hard to even know that WeChat is Chinese — it really levels the playing field.”

According to App Annie, a mobile analytics company based in Beijing, WeChat’s outward push is beginning to bear fruit. Based on download data from the first three quarters of 2012, the app is growing fastest in Southeast Asia, but it is making headway elsewhere, including Eastern Europe and the Middle East.

The most promising markets this year include Vietnam, Turkey, Thailand, India and Indonesia, with Russia and Saudi Arabia following closely behind.

While WeChat remains relatively obscure in the United States, where players like WhatsApp, Skype and Facebook Messenger dominate the mobile messaging market, analysts say WeChat registered nearly 100,000 new users in the United States in September alone.

“All of my Chinese friends use it here in North Carolina, whether to send group messages or to organize events,” said Zhang Xue, a student at Duke University Law School who is from the city of Harbin in China’s northeast. “I downloaded WhatsApp out of curiosity, but it’s not nearly as convenient as WeChat.”

China’s new leaders face tough economic choices

model that delivered three decades of double-digit growth is running out of steam and the country’s next leaders face tough choices to keep incomes rising. But they don’t seem to have ambitious solutions. Even if they do, they will need to tackle entrenched interests with backing high in the Communist Party.

China’s new leaders face tough economic choices

JOE McDONALD | Associated Press

20 October 2012

BEIJING (AP) — China’s economic model that delivered three decades of double-digit growth is running out of steam and the country’s next leaders face tough choices to keep incomes rising. But they don’t seem to have ambitious solutions. Even if they do, they will need to tackle entrenched interests with backing high in the Communist Party.

The cost of inaction could be high. The World Bank says without change, annual growth could sink to 5 percent by 2015 — dangerously low by Chinese standards. Some private sector analysts give even gloomier warnings.

The government’s own advisers say it needs to promote service industries and consumer spending, shifting away from reliance on exports and investment. That will require opening more industries to entrepreneurs and forcing cosseted state companies to compete. State banks would have to lend more to private business that is starved for credit.

The ruling party’s latest five-year development plan promises reforms in broad terms. Premier Wen Jiabao apologized at a news conference in March for not moving fast enough and vowed quicker action. But many changes could face opposition from China’s most influential factions — state companies, their allies in the party, bureaucrats and local leaders.

“If the challenge is, can they do radical reform all at once, we know that won’t happen because these leaders aren’t powerful enough,” said Scott Kennedy, director of Indiana University’s Research Center for Chinese Politics & Business in Beijing. “They are facing interests which wouldn’t possibly allow that to occur.”

Also at issue is how much Communist Party leaders are willing to cut back state industry that provides jobs and money to underpin the party’s monopoly on power.

Li Keqiang is the man in line to lead reforms as the next premier, China’s top economic official. Now a vice premier, Li is seen as a political insider with an easygoing style, not a hard-driving reformer. Along with the rest of the party’s Standing Committee, the ruling inner circle due to be installed in November, Li will govern by consensus, which could blunt their force.

“They are under pressure to change the economy, but they will not demolish party control,” said Mao Yushi, an 83-year-old economist who is one of China’s most prominent reform advocates. He co-founded the Unirule Institute of Economics, an independent think tank in Beijing.

Li showed his political skills but little zeal for reform as governor and later party secretary of populous Henan province in 1998-2004.

His time there coincided with several fatal fires — including a Christmas Day blaze at a nightclub in 2000 that killed 309 people — and efforts by local officials to suppress information about the spread of AIDS by a blood-buying industry. Other officials were punished for the fires but Li emerged unscathed and rose to national office.

“Li was known for not acting very aggressively in Henan, to put it charitably,” said Dali Yang, a University of Chicago political scientist.

The man in line to become Communist Party leader and China’s president, Xi Jinping, has a similar reputation for successful inaction.

In the 1990s, he served as party secretary of Zhejiang province, a thriving center for private business south of Shanghai, and won praise from observers including former U.S. Treasury Secretary Henry Paulson, who dealt with him as an investment banker. They lauded him not for spearheading change but for not tampering with Zhejiang’s free-market success.

The next leadership will inherit one of the world’s strongest economies but one in which advocates say reform is stalled.

Many observers trace the past decade of double-digit growth to changes forced through by former Premier Zhu Rongji, who overcame resistance from companies and party factions to slash the size of state industry in the late 1990s. He led Beijing into the free-trading World Trade Organization, driving a jump in trade growth that propelled China past Germany in 2009 as the world’s biggest exporter.

After Zhu retired in 2002, leaders reaped the financial benefits but focused on other areas: reforms of the legal system and trying to close a yawning gap between rich and poor with more spending on health and other social services.

They built up state-owned “national champions” in industries from oil and telecoms to steel and banking with monopolies, low-cost bank loans and other favours. Beijing’s huge stimulus after the 2008 global crisis flowed through state companies, increasing their dominance while entrepreneurs who generate China’s new jobs and wealth struggled.

The government defends the privileges given to its oil, telecoms and other major companies as necessary for building up Chinese global competitors. But entrepreneurs complain those companies abuse their control over essential resources such as energy, phone service and bank loans to gouge customers and pay their managers inflated salaries while stifling job-creating private businesses.

In a report last year, Mao’s institute calculated the biggest state companies consumed trillions of yuan (hundreds of billions of dollars) in subsidies over the previous decade. It said they are so inefficient that their return on equity — a broad measure of profitability — was an average loss of 6 percent a year.

Wen Jia, a manager for the privately owned Travelling Bestone travel agency in the western province of Chengdu, said her company struggles to compete in an industry that is hemmed in by state companies.

“The attractions belong to the state. So do some of the good hotels. The insurance, airlines and train tickets are the same,” said Wen. “State-owned travel agencies get prices 10 percent lower than we do on attractions and state-owned hotels.”

The abrupt economic slowdown that began last year has heightened frustration among entrepreneurs and the public. Growth fell to 7.4 percent in the latest quarter, its lowest level since early 2009 and barely half of 2007’s explosive 14.2 percent.

““The criticism is about how the distortions are not just benefiting those vested interests but also that they reduce the efficiency of the economy,” said Yang. “The pressures in the economy paradoxically provide them with more of a mandate for doing things because they have to do things.”

The World Bank and a Cabinet think tank, the Development Research Center, offered an ambitious roadmap for reform with a report in March that called for scaling back state industry and opening markets to private and foreign competitors. It warned that without change, China might be trapped at its current middle-income levels.

“The difference that reforms can make is the difference between a 6 to 7 percent growth pace and no growth at all,” said Societe General economist Wei Yao in a report.

Supporters of reform were encouraged by the fact that both current Premier Wen Jiabao and Li, his likely successor, supported the research that went into the World Bank report. They were disappointed when Li failed to endorse its recommendations, though he might have remained silent to avoid stirring up opposition ahead of the leadership transition.

Changes to state industry will be politically sensitive. Companies that oppose giving up monopolies and other favours can argue that they provide tax revenue, provide money to develop poor ethnic minority areas and pay for ambitious but unprofitable initiatives such as developing home-grown mobile phone technology.

Bosses of the biggest companies are appointed by the party and are politically influential. Some will take part in the November party congress to install the next leadership. Their companies also create a cadre of well-paid executives and other professionals who form a base of support for continued one-party rule.

“State-owned enterprise bosses are very powerful. They outrank the people who are supposed to regulate them,” said James McGregor, an American businessman in Beijing and author of the new book “No Ancient Wisdom, No Followers: The Challenges of Chinese Authoritarian Capitalism.”

“That’s going to be a very hard thing to break. But the countervailing pressure is that growth can’t keep going unless they loosen up,” McGregor said. “The party’s only credibility is making life better, and if that doesn’t happen, how do you maintain stability?”

China’s former Japan envoy accuses US of exploiting territorial rows

Former Chinese ambassador to Japan says Washington should distance itself from Tokyo

China’s former Japan envoy accuses US of exploiting territorial rows

Former Chinese ambassador to Japan says Washington should distance itself from Tokyo

Teddy Ng

31 October 2012

A former Chinese ambassador to Japan has accused the United States of using China’s territorial disputes to expand its own influence in the region.

Chen Jian, who was posted in Tokyo between 1998 and 2001, said yesterday that the US had been “exploiting contradictions among countries of the region” as tensions run high between China and its neighbours, especially Japan, with which Beijing contests islands in the East China Sea.

“It is no longer a secret that it is in the US interest for countries in this region to quarrel with China, but not to fight with China,” Chen, who is dean of Renmin University’s school of international relations, said during a talk at the Foreign Correspondents’ Club in Hong Kong.

His remarks come amid continued sabre-rattling between Beijing and Tokyo over control of the Diaoyu Islands, known as the Senkakus in Japan. The long-running row boiled over last month after Japan’s prime minister, Yoshihiko Noda, announced his government’s purchase of the islands from their private Japanese owner.

Yesterday four China marine surveillance ships were again spotted near the islands. The State Oceanic Administration said they were carrying out “expulsion measures” against nearby Japan Coast Guard ships.

One of the ships displayed an electronic message board informing the Japanese ships they were in China’s territorial waters and ordering them to leave, Kyodo News reported. A Japan Coast Guard spokesman said ships from each side flashed signs at the other demanding they leave.

Beijing argues that Tokyo took the islands, along with Taiwan, during the first Sino-Japanese war in 1895 and should have returned them after losing the second world war. Tokyo contends its claim to the islands pre-dates the earlier war.

Chen blamed the US, which administered the Diaoyus for a quarter century after the second world war, for setting a “time bomb” in 1971, when it handed control over the islands to Japan. Washington was now using the resulting tension to aid its military “pivot” towards the region.

“Japan is now being used by the US as a strategic point for its return to Asia,” Chen said. “The US is urging Japan to play a greater role in the region in security terms, not just in economic terms, which suit the purpose of right-wing groups in Japan.”

He said the US was trying to restrain China’s growing influence and warned Beijing to be cautious because the perceived backing from Washington could cause some countries to “carry their quarrel with China too far”.

Last month US Secretary of State Hillary Rodham Clinton called for “cooler heads” on both sides to seek a peaceful resolution to the dispute. Last year she said the US backed a three-way meeting between Beijing, Tokyo and Washington.

Chen said the US should put more distance between itself and Japan and press Tokyo to come to the negotiating table. Japanese Foreign Minister Koichiro Gemba said yesterday that Japan wanted a peaceful resolution.

Chen also said it would be “unwise” for Japanese politicians to further provoke China. He said that Beijing was doing enough to protect the nation’s sovereignty, but called for continued communication between the two sides to prevent an inadvertent clash.

Xi Jinping sharpened his political skills in Fujian

Leader-in-waiting had setbacks in early years in Fujian, but learned fast. In the second of a three-part series, we look at his 17 years in the province

Xi Jinping sharpened his political skills in Fujian

Leader-in-waiting had setbacks in early years in Fujian, but learned fast. In the second of a three-part series, we look at his 17 years in the province

Minnie Chan in Fuzhou

24 October 2012

Xi Jinping, China’s leader-in-waiting, fine-tuned his political antennae during 17 years spent as an official in the southeastern province of Fujian.

An official in Fuzhou, the provincial capital, who worked under Xi from the 1990s, said Xi always harboured grand ambitions.

“On the surface, Xi looked like a mediocre leader who would like to play it safe,” he said. “But actually, he was an ambitious politician who wanted to make something big out of his life.

“When he was still young, he had already made up his mind to enter the Communist Party’s central leadership. But I dare say even Xi himself didn’t expect that he would become China’s supremo one day.”

Xi is the second son of late reformist vice-premier Xi Zhongxun, who was also a former Guangdong party secretary. His father was well known for being a strong supporter of Guangdong’s economic reform and its special economic zone (SEZ) pilot schemes in Shenzhen, Zhuhai and Shantou.

Xi Jinping’s first job in Fujian was to take care of Fujian’s SEZ in Xiamen, just five kilometres from Taiwan’s Quemoy Island. He tried to learn from his father to support Xiamen’s development, but failed.

Xi was working as a county party secretary in Hebei when he was suddenly ordered to go to Xiamen in 1985 to replace deputy mayor An Li, the daughter-in-law of then party chief Hu Yaobang. An was forced to resign because her extravagant lifestyle and arrogance upset officials and residents.

“After An’s resignation, provincial party chief Xiang Nan asked party general secretary Hu Yaobang to send another person to fill the vacancy,” the Fuzhou official said, adding that Hu chose Xi because of his princeling background and rustic, low-profile personality.

In 2000, Xi told China Central Television’s Half-Hour Economy, a documentary programme, that Fujian “was not the well-developed place I imagined before I headed there”, and recalled a difficult, 236-kilometre trip from the provincial capital to Xiamen.

“In June 1985, I went to Xiamen, spending eight hours to get there [by car] from Fuzhou due to the poor transportation network.”

A biography of Xi published by Taipei-based China Times Publishing early this year said that, after the long journey, Xi decided to build a highway linking Xiamen and Fuzhou.

“Many Xiamen comrades told me that their city was like ‘a beautiful young girl wearing a shabby dress’,” the book – Xi Jinping – the Chinese Communist Party’s New Leader Who is Standing at a Historical Crossroads – quoted Xi as saying, adding that the new deputy mayor also planned to give Xiamen a makeover.

However, Xi left Xiamen three years later after losing out in the race to become the city’s mayor. And most of his plans to reshape the city were rejected by the province’s new leadership after Xiang was forced to resign in 1987 to take responsibility for a fake- medicine scandal in Jinjiang, a small county under the administration of Quanzhou.

Insiders believe Xiang’s resignation as party chief was actually a form of political punishment after he lost out in a political struggle between local and non-local officials in the province.

After Xiamen, Xi became a district party head in Ningde, a relatively poor city in a remote corner of northeastern Fujian.

Another official in Fuzhou, who works in the province’s cultural department, said that when Xi was in Ningde, local officials and residents asked him to use his connections as a princeling – the offspring of a party elder – to help them upgrade the small district into a prefectural-level city.

Guanyu 道24 Oct 2012, 19:17:00

“But Xi turned down their request and instead launched an environmental protection campaign with the slogan, ‘Returning green mountains and rivers to our people’ that moved many big graves built along a key road connecting Ningde to the outside world.”

The cultural official said Xi was prepared to “offend rich and powerful people who harmed the public interest”, with most of the tombs built by rich local families with special backgrounds or official connections.

“Xi’s assertiveness made many powerful families and local officials very unhappy,” he said.

The official added that environmental protection had been one of Xi priorities ever since, with a desert control project in Longyan’s Changding county when he was acting Fujian governor in 1999 being one notable achievement.

“But none of us realised the importance of such a progressive and innovative environmental protection concept more than a decade ago, with most local officials just trying to create some ‘image projects’ to pave the way for further promotion,” the official said.

In 2000, an environmentally friendly Ningde was formally upgraded to a prefectural-level city when Xi became Fujian’s governor. Another of Xi’s achievements was his success in attracting overseas capital to Fuzhou when he was the city’s party head from 1998 to 2000.

One of the projects saw Hong Kong tycoon Li Ka-shing brought in to take part in the renovation of the Three Lanes and Seven Alleys, an historic residential area dating back to the Ming and Qing dynasties.

Several people who worked under Xi in Fujian said it was hard to notice any flaws with him, even as the controversial Yuanhua smuggling case ensnared at least 700 central government and local officials.

Xi’s time in Fujian coincided with the rise and fall of Lai Changxing, who became the mainland’s most-wanted fugitive in 2000.

Lai, 54, established the Yuanhua Group in Xiamen in the 1990s. At his trial in April this year, Xinhua reported that his smuggling operations evaded 14 billion yuan in customs duties from 1996 to 1999 and that he paid at least 64 government officials nearly 40 million yuan in bribes.

Lai was jailed for life by the Xiamen Intermediate People’s Court in May.

A source close to the Fujian provincial government said Xi was not touched by the scandal.

“No evidence shows Xi, Fujian’s No2 leader after Jia Qinglin, had a connection with A-Xing [Lai],” he said. “During the mid-1990s, the golden time of A-Xing’s Yuanhua Group, almost all the provincial government officials, including our party head Jia, were so proud of making friends with A-Xing, and all of us were keen on showing off our relationship because it signified that you were in the club.

“But Xi was a rare senior official who tried to keep his distance from A-Xing.”

He said Xi’s work in the early 1980s as one of the secretaries of then defence minister Geng Biao had been invaluable in cultivating his “political sense and awareness” and paving the way for entry to the party’s upper echelons.

“As a defence minister’s secretary, he had opportunities to sit in on many meetings of the Communist Party’s Politburo and read many of the party’s confidential documents,” the provincial official said.

“Those privileges made him understand that his key mission in Fujian was neither colluding with influential people nor racing to compete with neighbouring Guangdong and other coastal provinces in terms of economic development, but another, political, task – to do the united front work on Taiwan.”

Shi Bing , the head of Hong Kong-based Ta Kung Pao’s Fuzhou bureau, said that when Xi was Fujian governor, local media had asked him why there was a huge development gap between Fujian and Guangdong, which was governed by his father in the late 1970s.

“In an interview, we asked why Fujian lagged so far behind Guangdong, given that the central government had put both Fujian and Guangdong on the same starting line [by setting up four SEZs in the two provinces] in 1980,” Shi said.

Guanyu 道24 Oct 2012, 19:17:00

“I remember Xi’s answer: when the starting pistol for our country’s reform and opening-up race fired, Guangdong ran out immediately, while Fujian was still tying its shoes … and it is my job to lay a good foundation for Fujian.”

That foundation included taking steps to maintain Fujian’s status as the mainland province with the most forest cover (more than 60 per cent), attracting capital and improving local infrastructure, Shi said.

Sze Chi-ching, a Hong Kong-based entrepreneur originally from Fujian who has been Xi’s friend since 1985, said it was unfair to blame Xi for Fujian’s lacklustre economy.

“The central government didn’t want to develop Fujian because it had been designated as a war front [since 1949] due to tension between Beijing and Taipei,” he said.

“Meanwhile, when Guangdong pulled out all the stops for economic development [in the 1980s and 1990s], Fujian was still busy with political struggles, with many able-minded cadres from Beijing and other provinces being excluded by local people and leftists. It was a great pity,” he said.

Many middle-aged officials in Fuzhou said Xi had been one of the “outside officials” and he had been given a hard time during his 17 years in the province.

“But as a leader with a princeling background, Xi’s simple life and selflessness made an impression on the local officials and people,” a provincial foreign affairs official said.

“When Xi was in Xiamen and Ningde, he still put on green military uniforms, the clothes he wore in Zhengding, Hebei,” he said. “He started wearing Western-style suits when he became party head of Fuzhou because he needed to dress up when meeting overseas entrepreneurs at investment promotion functions.”

Sze said Xi had a humble personality and always remembered friends.

“He lived in a public dormitory and washed his own clothes when he was deputy mayor of Xiamen,” Sze, 73, said.

“He also dined at a public canteen and never visited fancy restaurants.

“He has never forgotten old friends like me … when he was moved to Zhejiang and Shanghai, he still managed to find time to meet me … it made me feel that he is still my little brother.”

The Fuzhou foreign affairs official said Xi had taken steps to maintain a clean image, “just like Taiwanese leader Ma Ying-jeou”.

“For example, he didn’t allow his brothers and sisters to run businesses in Fujian when he was there,” the official said. “He told us that he once warned them: ‘I will not provide any help if you guys have problems in Fujian’.”

The official said Xi’s mother, Qi Xin, played a key role in removing “family obstacles” and persuading his brother and sisters, who are now all entrepreneurs, to support Xi’s political career.

“That’s why his younger brother, Xi Yuanping, agreed to withdraw all his businesses in Shanghai after Xi was appointed the municipality’s party chief in 2007,” he said.

Xi Jinping began career as cadre in rural Hebei

Why did the well-connected son of a revolutionary leader swap a job in the capital for life as a party cadre in on obscure rural community?

Xi Jinping began career as cadre in rural Hebei

Why did the well-connected son of a revolutionary leader swap a job in the capital for life as a party cadre in on obscure rural community?

Shi Jiangtao

23 October 2012

Xi Jinping kick-started his political career with a bold move. At the age of 29, Xi turned his back on a life of privilege as a party elder’s son in Beijing to accept a posting 250 kilometres away in an obscure, dusty town in Zhengding county, Hebei province.

His father, Xi Zhongxun, an ex-guerilla leader close to Mao Zedong, was at the height of his powers, serving as secretary of the party’s Central Committee secretariat.

Under his wing, the younger Xi seemed to have a guaranteed, easy road to success. He had earned a degree in chemical engineering from Tsinghua University and was working as secretary to General Geng Biao, the defence minister at the time.

But he struck out on his own, moving to Zhengding in 1982 to work as the county’s deputy party chief. Within a few months, he had risen to the rank of party chief, and three years later was transferred to Xiamen, in Fujian province. Xi would recall his time in rural politics fondly, saying it had laid a solid foundation for his future career.

“[Zhengding] is the place that I often miss … it was there where I began to learn how to become a leading cadre,” he said when he revisited the town in 2005. An excerpt of his speech was published in a magazine linked to the county government and was made available online.

“I felt so humbled and nervous, as it was for me like a tiger trying to swallow the sky. I may have accumulated a certain amount of valuable knowledge before, but I had little practical experience. I had to learn everything from the very beginning. It was an unusual three years.”

His words offer few, if any, clue as to why he gave up the relative comfort of his privileged life to go to the middle of nowhere.

Zhengding has a history as a regional political and religious centre spanning over 1,000 years. It is home to many fine archaeological sites, including Buddhist temples and towers built in the Sui and Tang dynasties. But it has largely been bypassed by China’s economic boom. It has emerged into the media spotlight in recent years as the place where the man in line to be the nation’s next leader got his political start.

“Everyone is so proud that Xi used to work here, although it was nearly two decades ago,” said Chen Fei, a restaurant owner. “But it’s a pity that his stay happened before he rose to power; obviously we have not benefited much from it.”

Jia Yonghui, whose father, the late novelist Jia Dashan, was a friend of Xi, said the future leader did rather well in Zhengding considering his princeling pedigree and lack of experience. Xi had a good reputation in the county, he recalled.

“Xi was famous for his willingness to make friends with experts and specialists, such as my father,” Jia said. “He often said it was not that bad for leading officials to admit there were things they did not know as long as they have real experts to count on.”

The elder Jia was promoted under Xi to head the county’s cultural bureau in 1982 and they continued their friendship even after Xi’s departure for Fujian.

“When my father was critically ill, Xi, then deputy party chief of Fujian, visited him in a Beijing hospital in early 1997. A few weeks later, Xi made a detour to Zhengding on his way back to Fujian and paid his final visit to my father shortly before he died that year,” Jia said.

Details about Xi’s years in Zhengding remain sketchy – seemingly deliberately so. Most contemporaries and former government officials were reluctant to talk about him, especially his time in Zhengding. They either declined to be interviewed or said they had been warned against making any comments about Xi.

Guanyu 道23 Oct 2012, 10:19:00

Xi Jinping began career as cadre in rural Hebei

Why did the well-connected son of a revolutionary leader swap a job in the capital for life as a party cadre in on obscure rural community?

Shi Jiangtao

23 October 2012

His father, Xi Zhongxun, an ex-guerilla leader close to Mao Zedong, was at the height of his powers, serving as secretary of the party’s Central Committee secretariat.

His words offer few, if any, clue as to why he gave up the relative comfort of his privileged life to go to the middle of nowhere.

The elder Jia was promoted under Xi to head the county’s cultural bureau in 1982 and they continued their friendship even after Xi’s departure for Fujian.

Communist Party journal suggests it could learn from Singapore’s PAP

Article says party could learn much from island’s brand of authoritarianism

Communist Party journal suggests it could learn from Singapore’s PAP

Article says party could learn much from island’s brand of authoritarianism

Cary Huang in Beijing

23 October 2012

Weeks ahead of the Communist Party’s once-in-a-decade reshuffle, the party’s leading policy journal has called on leaders to look to Singapore for an example of how to run the country.

The commentary in yesterday’s Study Times – run by the Central Party School under Xi Jinping, who takes over as the party’s general secretary next month – said it could learn much from the more liberal version of authoritarianism practiced by Singapore’s People’s Action Party (PAP).

“Since 1968, the People’s Action Party has won consecutive elections and held state power for a long time, while ensuring that the party’s high efficiency, incorruptibility and vitality leads Singapore in attaining an economic leap forward,” said the article by Song Xiongwei, a Chinese Academy of Governance lecturer.

The publication of the article less than three weeks before the party’s 18th national congress offers a strong hint that Xi could draw from the “Singapore model” as he lays out his blueprint for running the country. Xi will replace Hu Jintao as the party’s general secretary at the congress, setting him up to become president next year.

“The Singapore model has been admired by most Chinese leaders and Xi might see Singapore’s success as the dreamed accomplishments of his rule in coming decade,” said Zhang Ming, a political scientist at Renmin University.

In particular, party leaders like how Singapore achieved economic success, social order and relative freedom, while preserving one-party rule and limits on speech and expression.

Late paramount leader Deng Xiaoping was among the first to look to Singapore when he, in 1992, cited the city state as a well-managed country that China must learn from.

The article cited the PAP’s introduction of internal democracy and competition within the ruling party, and the creation of a merit-based civil service. It built a harmonious society based on Confucian ideals and Chinese traditions, it said.

Some analysts questioned whether the practices of Singapore – an island city of 5.2 million – are applicable to a vast country with a population of 1.3 billion.

“The rule of law is weak in China, while corruption is widespread at almost all levels of the government and bureaucracy,” said John Lee, a China expert at the Centre for Independent Studies in Sydney.

Two women injured in playboy Ling Gu Ferrari crash are named by magazine

The 25-year-olds were pulled half-naked from car smash in March

Two women injured in playboy Ling Gu Ferrari crash are named by magazine

The 25-year-olds were pulled half-naked from car smash in March

19 October 2012

The two young women at the centre of the Ferrari crash that killed the son of high-level Communist Party official Ling Jihua have been named.

In its latest issue, Hong Kong-based news magazine Asia Weekly writes that the two young women in the vehicle when Ling Gu died upon impact after crashing his Ferrari were Tashi Dolma (Zhaxi Zhuoma), daughter of a deputy director of the Qinghai Provincial Public Security Department, and Yang Ji, then a student at China University of Political Science and Law in Beijing, reportedly the daughter of a well-known living Buddha also from Qinghai.

According to Asia Weekly, Yang passed away unexpectedly last month despite showing signs of positive recovery from the serious injuries she sustained in the accident. It is claimed she felt unwell and was given an injection last month, after which she fell into a coma and later died.

High-level Communist Party official Ling Jihua lost his son in the accident. Photo: SCMP

The magazine, citing ‘informed Beijing sources’, claims both the women are ethnic Tibetans and were each 25 years old at the time of the accident.

The accident happened in the early hours of March 18 when the speeding Ferrari smashed into a wall, rebounded and crushed a railing on the opposite side of the road. One naked body and two half-naked bodies were thrown from the wreckage. A half-naked man Ling Gu died immediately while two young women – one naked and one half-naked – were seriously injured.

Photos of the wreckage circulated online and many internet users took it as another drink-driving accident involving the “second-generation rich”.

Wild stories began to spread that the trio were playing sex games in the car when the accident took place. Different versions of who was driving and who was in the front and back seats became the subject of gossip in Beijing’s corridors of power.

The accident would come to affect behind-the-scenes political jockeying in the run-up to next month’s 18th party congress – which will produce China’s new generation of leaders.

Ling Jihua is considered an important member of Hu’s camp and was being groomed to become one of the People’s Republic’s sixth generation of leaders in another 10 years.

However, in a strong sign that the crash scandal has hurt Ling’s chances of securing a seat at least on the Politburo, a reshuffle saw him take over as head of the United Front Work Department, a largely symbolic post.

Ex-diplomat says Sino-Japanese rift part of US agenda

A former Japanese diplomat has accused the United States of manipulating Japan since the Second World War in order to “eliminate” prime ministers who sought to develop better relations with Beijing.

Ex-diplomat says Sino-Japanese rift part of US agenda

Julian Ryall in Tokyo

16 October 2012

Ukeru Magosaki, who also served as the head of the Foreign Ministry’s Intelligence and Analysis Bureau, has recently written a book that has soared to the top of Japan’s bestseller lists.

The book – Sengoshi no Shotai (The Truth Behind Post-war History) – states that the US will never remove its military bases from Japanese territory, no matter how much public outcry there is. Magosaki also said he believes that certain factions in the US would even like to see Japan develop nuclear weapons.

“In the book, I divide Japanese leaders into two groups; those who have wanted to pursue independent foreign policies and those who have just followed US instructions and policies,” Magosaki said in Tokyo yesterday.

“Those in the first group were not welcomed by the US government and were usually quickly eliminated from the post of prime minister.”

This was not achieved directly by Washington, he claimed, but through subtle influence over key politicians, the media, government officials and senior executives of major companies.

A spokeswoman for the US embassy in Tokyo declined to comment on the allegations made in Magosaki’s book.

To achieve its control of Japan’s political processes, Washington has interfered with media coverage, encouraged opposition parties, twisted public opinion and even brought down governments by “eliminating” key cabinet members, Magosaki claims.

Two of the Japanese politicians who he claims have been hounded for their independent thoughts have been Yukio Hatoyama, who lasted less then nine months as prime minister until June 2010, and Ichiro Ozawa, whose reputation has been tarnished by a financial scandal and a legal case.

Magosaki believes that had Hatoyama remained in power, the government would not be making moves to restart Japan’s nuclear reactors – shut down in the aftermath of the disaster at the Fukushima Daiichi nuclear plant – and would not have gone ahead with raising the consumption tax or deploying US military Osprey aircraft to Okinawa.

These issues, along with the ongoing debate over the Diaoyu-Senkaku islands and the Trans-Pacific Partnership free trade discussions, are all closely connected with Washington’s global geopolitical interests, Magosaki said.

The US was “encouraging politicians like [national policy minister Seiji] Maehara to take action against China as that has a benefit for the US,” he said.

And while business interests in the US may want closer co-operation with China, the US government was pursuing what Magosaki termed an “offshore balancing strategy” under which neighbouring nations – he named South Korea, the Philippines, Vietnam and Japan – are encouraged to pursue actions to constrain China and its growing regional influence.

“The Senkaku [Diaoyu] issue is part of that strategy,” he said.

“Today, in the US, there are some people who want Japan to have a nuclear bomb.

“This is related to balancing strategy, to counter China by using Japan’s military power.

“From China’s point of view, Yoshihiko Noda has been the worst prime minister they could have had and they feel there can be no trust” between the two governments, Magosaki said. “That means that anyone who replaces him will be welcome.”

America embraces English English

Crikey – aided by the telly, fashion and the internet, a flood of Britishisms makes itself heard in the home of the Americanism

America embraces English English

Crikey – aided by the telly, fashion and the internet, a flood of Britishisms makes itself heard in the home of the Americanism

The New York Times

12 October 2012

Mitt Romney is not the “bumbling toff” he’s made out to be, wrote Daniel Gross, an American journalist, in a recent Daily Beast article. The latest iPad is a “lovely piece of kit,” in the words of John Scalzi, an American science-fiction author writing in his blog, Whatever. The Chicago Bulls were mired in uncertainty less than a “fortnight” after their star player Derrick Rose went down with a knee injury, according to an article in The Daily Herald, a suburban Chicago newspaper, last spring.

Some call it Anglocreep. Some call it annoying. Snippets of British vernacular — “cheers” as a greeting, “brilliant” as an affirmative, “loo” as a bathroom — that were until recently as rare as steak and kidney pie on American shores are cropping up in the daily speech of Americans (particularly, New Yorkers) of the taste-making set who often have no more direct tie to Britain than an affinity for the TV series Downton Abbey.

This star-spangled burst of Anglophonia has “established itself as this linguistic phenomenon that shows no sign of abating”, said Ben Yagoda, a professor of English at the University of Delaware, who last year started “Not One-Off Britishisms”, a repository of such verbal non-native species, like those above, culled from the American media.

“The 21st century ‘chattering classes’ – which in itself is a Britishism – are the most significant perpetrators of this trend,” he added.

Arguably, the distance between Britain and the United States is as small as it has ever been. In an age of BBC livestreams and borderless websites, Americans track British gossip sites, absorb the Queen’s English through televised imports like Ramsay’s Kitchen Nightmares and Doctor Who, and take in newspapers like The Guardian.

Predictably, people who traffic in trends for a living seem most susceptible.

“Fashion people live to sound British, the same way they over-pronounce French and Italian words because of those country’s fashion weeks,” said Peter Davis, the American-born editor of Scene, a New York society magazine. In an industry where British-born editors like Anna Wintour, Glenda Bailey and Joanna Coles set the tone, ambitious underlings “use Brit-speak to sound, well, more ‘posh’”.

“I have heard people who grew up far from London uttering that a runway collection was ‘brilliant’ or just ‘bril’,” he added.

Some phrases that were rarely heard five or 10 years ago suddenly seem ubiquitous. The absolving term “no worries” – a keystone of the Australian patois, but British in origin, according to Yagoda – has all but replaced “no problem” for smart-set Americans under 40.

This outburst of Brit-envy has not gone unnoticed in Britain. The Guardian, The Telegraph, The Sun and the BBC website have all weighed in in recent weeks to poke fun at such linguistic shoplifting.

The articles cited examples from Not One-Off Britishisms, where Yagoda often charts the popularity of terms using Google’s Ngram Viewer, which tracks the appearance of words or phrases year by year in millions of books. When rendered in graph form, certain British phrases, like “have a look” instead of the standard American “take a look”, seem like the Nasdaq charts for a hot internet stock.

Is it pompous, or just further evidence of the endless evolution of American English?

It depends, to a degree, on whether a suitable American synonym exists, said Jesse Sheidlower, the American-born editor at large of the Oxford English Dictionary. For example, “‘twee’ is a useful term, because there really is no direct American equivalent,” Sheidlower said. “It describes things that are often associated with Britishness, like Laura Ashley dresses or Park Slope baby names like Primrose or Harmony. But the word itself doesn’t scream of Britishness.”

Long Reliant on China, Myanmar Now Turns to Japan

By THOMAS FULLER

11 October 2012

YANGON, MYANMAR — On a street in central Yangon the final moments of Kenji Nagai’s life were captured in a Pulitzer Prize-winning photo, an image that exemplified the brutality of military rule in Myanmar.

Mr. Nagai, a Japanese journalist, was shot five years ago during a crackdown on protesters by security forces, and his death was a low point in relations between Myanmar and Japan.

Now, as Myanmar seeks to shed its authoritarian past, a much different picture is emerging. Japan is rapidly ramping up its presence in the country with a heavyweight deployment of government assistance and corporate heft reminiscent of the large investments at the height of Japan’s global economic power in the 1980s.

One block away from the spot where Mr. Nagai was killed, on the fourth floor of City Hall, two dozen Japanese engineers are drawing up a master plan to remake the roads, telephone and Internet networks, water supply and sewage systems of Yangon, the country’s long-neglected commercial capital.

With the attention to detail they are famous for, Japanese engineers are measuring traffic patterns in Yangon, inspecting 70-year-old water pipes and poring over maps and blueprints.

“Myanmar is saying, ‘Welcome! Please help us,”‘ said Ichiro Maruyama, the deputy chief of mission at the Japanese Embassy in Yangon.

President Thein Sein, who travelled to Tokyo earlier this year to plead for help, is outsourcing crucial parts of his drive to redevelop the country to the Japanese. In addition to the makeover for Yangon, a Japanese consortium has been tasked with building a large industrial zone and satellite city on Yangon’s outskirts. The totality of Japanese assistance has stunned those who watch the country closely.

“I’ve been somewhat astonished by the extent of the Japanese involvement and alacrity with which they’ve moved,” said Sean Turnell, an expert on Myanmar’s economy at Macquarie University in Sydney.

By choosing Japan for these crucial projects, Myanmar is diversifying away from China, its largest foreign investor in recent years.

Myanmar has become a sort of strategic battleground between Asia’s two economic titans, China and Japan, Mr. Turnell said.

“This is a competition for pre-eminence and influence in Asia,” he said.

China and Japan have diverging interests in the country. Japan is eager to tap into Myanmar’s cheap labor force and extend its massive network of factories spanning Thailand and Indochina. China is more focused on extracting Myanmar’s natural resources like natural gas, gems, timber and rubber as well as electricity from hydroelectric dams.

The impression that China is robbing the country of these resources has led to an anti-China backlash, including recent protests against a copper mine near the central city of Monywa and the suspension last year of the Myitsone hydroelectric dam.

John Pang, the chief executive of CARI, a research organization based in Malaysia, says the Myanmar government’s pivot toward Japan “is not so much an attraction to Japan as much as a revulsion against the Chinese.”

“It’s a game the Chinese gave away,” he said.

The Japanese, Mr. Pang said, “come across as nonthreatening” and have managed to build up trust with Myanmar’s leaders.

Many other governments have sought to upgrade relations and business contacts with Myanmar — South Korean and Singaporean companies are very active in the country — but Japan has been far more comprehensive in its approach.

Japan’s overall strategy is to deploy the full force of what used to be called Japan Inc. Some of the country’s largest conglomerates — Mitsubishi, Marubeni and Sumitomo — are working in cooperation with the Japanese Ministry of International Trade and Industry.

“We haven’t had any project like this in at least 20 years,” said Masahiko Tanaka, the chief representative of Japan’s International Cooperation Agency, which will provide financing for the projects.

Guanyu 道16 Oct 2012, 02:56:00

The Japanese government says it is willing to lend Myanmar money for the projects on terms that are near-giveaways: loans with 0.01 percent interest payable over 50 years and with no payments due for the first 10 years.

While the cheap money is no doubt attractive to the cash-strapped nation, Mr. Thein Sein appears to be counting on something else: help in winning the next election, scheduled for 2015.

“They are requesting that the project be finished before 2015,” said Mr. Maruyama, the Japanese deputy chief of mission, referring to the industrial zone, which is called Thilawa and which will also include banks, schools, hospitals and other amenities of a city built from scratch. He jokingly calls the timetable “mission impossible.”

Yohei Sasakawa, the chairman of the Nippon Foundation, a Japanese charity that focuses its assistance on areas where impoverished ethnic minorities live, says the government is very aware that the population will want to see a “democracy dividend” — tangible benefits from the transition away from military rule.

“Every single person in the country will want the fruits of democratization,” Mr. Sasakawa said.

Mr. Thein Sein has requested that the Nippon Foundation give priority to projects that can be completed quickly, like the construction of primary schools in remote areas, Mr. Sasakawa said.

Japan’s plans for the makeover of Yangon stretch the meaning of the word ambitious. Large parts of the city’s infrastructure were built during the British colonial days, which ended in 1948. Train cars on British-built tracks ride on rotting railway ties. Yangon sidewalks are scarred by deep and treacherous crevices. A dilapidated sewage system covers only the central area, and pipes meant to deliver clean water are a Swiss cheese of leaks.

“Leakage control is an urgent problem,” said Masaru Matsuoka, one of the engineers sent to fix the water system. In his native city of Fukuoka, in southern Japan, 2.6 percent of tap water leaks from the system. In Yangon, the figure is more than 40 percent. Equipment has been dispatched from Japan that will help pinpoint leaks underground, Mr. Matsuoka said.

Much of Yangon’s infrastructure is held together with Band-Aid fixes. At a reservoir on the edge of the city, workers have jury-rigged strips of bamboo as a filtration system to prevent fish, foliage and trash from entering the pumping station. (Japanese engineers working on the project recommend against drinking the city’s tap water.)

The Japanese government is also studying plans for mass transit systems, the rehabilitation of four power plants that provide electricity to Yangon, the construction of a second bridge over the Bago River and the addition of six berths to the port near Yangon that will serve the Thilawa project.

The Japanese government says it will have a better idea about the cost of the projects once feasibility studies are completed at the end of the year. But it is sure the price tag will be in the billions of dollars. It has already reached a deal that would forgive or reschedule Myanmar’s outstanding debt to Japan.

While Japan’s interest in Myanmar is partly geostrategic, for some older Japanese the re-engagement by Japan also cements a longstanding — and checkered — relationship between the two countries. Aung San, the country’s independence hero (and father of Daw Aung San Suu Kyi, who is now leader of the opposition in Parliament), trained in Japan before leading efforts to oust the British from the country.

By helping main figures of the Burmese independence movement, the Japanese see themselves as the having been “midwives” of Burmese independence from the British, according to Mr. Turnell.

The subsequent Japanese occupation of Burma during World War II was brutal. But the two nations developed a kind of kinship of former foes, something akin to the United States and Vietnam today.

Guanyu 道16 Oct 2012, 02:56:00

The sentimentality that many Japanese have toward Myanmar may be in part because of a popular 1956 film, “The Burmese Harp,” in which a Japanese soldier dons the robes of a Buddhist monk and remains behind after the war.

For Mr. Sasakawa of the Nippon Foundation, re-engaging with Myanmar is personal. He remembers eating rice shipped from Burma in the lean years after the war in Japan. “We are really late in repaying our obligation,” he said. “We are passionately looking forward to paying back the kindness of Myanmar.”

Is the PLA’s modernisation a sign of power, or a repeat of a tragic mistake?

Ignoring the need for social reform while modernising the military risks repeating the mistakes of the Qing dynasty

Is the PLA’s modernisation a sign of power, or a repeat of a tragic mistake?

Ignoring the need for social reform while modernising the military risks repeating the mistakes of the Qing dynasty

Minnie Chan

09 October 2012

China’s military development is generating more international controversy than at any time in the past decade, despite the People’s Liberation Army’s attempts to convince the world that it is increasing its transparency by publicising progress on some new weapons projects.

Military observers agree that the past decade has been a golden era for PLA modernisation, with Beijing busily harvesting the fruits of weapons research and development made possible by three decades of rapid economic growth.

Beijing has been stressing the need to upgrade its military capacity since the early 1990s, with double-digit annual increases in defence spending. It has recently speeded up the development of new weapons projects including China’s first stealth fighter jet, the Jian-20; its first aircraft carrier and a carrier-killing ballistic missile, the DF-21D, and a third-generation, nuclear-armed, solid-fuel intercontinental ballistic missile, the DF-41.

In January 2007, China shocked the world by shooting down a weather satellite 850 kilometres above the earth, sparking fears that it could become engaged in a secret “star wars” battle with the United States. But back at sea level, the PLA Navy set new benchmarks for international co-operation and blue-water missions, playing a key role in the international anti-piracy effort off the coast of Somalia from late 2009.

Tai Ming Cheung, an associate professor and director of the Institute on Global Conflict and Co-operation at the University of California, said the PLA had taken advantage of 10 years of growing prosperity, continued peace and rising technological sophistication to make important progress in its defence modernisation, narrowing the gap with leading global powers and becoming more professional.

But still playing catch-up [2]

A white paper released by the defence ministry last year said the PLA Navy had sent more than 20 ships in more than 10 convoys to more than 30 countries in the previous year. It also sent its biggest hospital ship, the Peace Ark, to underdeveloped countries in Africa for the first time in mid-2010 to provide medical and humanitarian aid.

The PLA has also participated in military drills with the US, Russia and other countries, especially focusing on co-operation in humanitarian and anti-terrorism operations.

“There is certainly a greater sense of pride and prestige in the PLA’s progress and accomplishments from within the ranks,” Cheung said. But, he added, the PLA’s fighting capability still lagged that of Western forces.

“[The PLA] still can’t operate jointly, it lacks combat experience, its defence modernisation has been concentrated in limited pockets, and personnel quality is still mixed,” Cheung said. “So rather than giving the PLA a gold for achievement, its performance was a silver or bronze.”

Antony Wong Dong, president of the International Military Association in Macau, said today’s achievements in military modernisation could be attributed to the efforts of former leaders in the past few decades, with President Hu Jintao and Premier Wen Jiabao being the lucky successors who reaped the rewards.

“Hu and Wen’s contributions were that they did not interfere in the PLA’s modernisation in their era because they do not understand military affairs,” Wong said.

“Hu is actually a so-so chairman of the Central Military Commission because many of the top leaders in the army were promoted by his predecessor, Jiang Zemin , which means he is living under Jiang’s shadow.”

Some military experts have warned that Hu and Wen’s failure to introduce political reforms to counter corruption and unfairness in both the military and civilian sectors could lead China into a new period of crisis.

Guanyu 道16 Oct 2012, 02:51:00

Ni Lexiong, director of a defence policy research centre at Shanghai University of Political Science and Law, said a modern army should be built on the base of a modernised country, but Beijing had to spend more than 700 billion yuan (HK$ 858 billion) this year on maintaining social stability. That’s nearly 5 per cent more than the country’s defence budget.

Spending on internal security – “building a harmonious society” – has exceeded the defence budget since 2009, much of it directed at cracking down on mass protests and preventing individuals from petitioning higher levels of government.

Ni warned that papering over those cracks could weaken the army’s fighting ability.

“The army is an important part of our society,” Ni said. “Everything that happens in our community will have an impact on their morale.

“PLA soldiers enjoy high salaries, the best equipment and other benefits in the army … but it is a fact that their parents, brothers, sisters and friends are not living well because of the expanding gap between rich and poor and other social problems in our country, which Hu and Wen have failed to solve.”

Wong said the PLA’s modernisation stood at odds with its poor transparency and conservative image.

“The PLA’s current transparency is much lower than in the 1980s,” Wong said, saying the exact number of army personnel is now a secret. “In 1982, the State Statistics Bureau announced that the PLA had 4,238,210 servicemen. Now, even the number of troops in the Hong Kong garrison is unclear.”

Cheung said China’s reluctance to increase transparency in the military had hindered efforts to build international confidence and trust.

“The paucity of detailed information about China’s defence budget is at the centre of international concerns, as is the limited amount of detailed information contained in its defence white paper,” he said.

“The PLA is making steady efforts to improve its transparency with press conferences, the establishment of a defence ministry spokesman’s office and a willingness to disclose more defence-related information online … but the push for defence transparency should come from domestic sources, through popular demand via the media and the political system, and not be driven by foreign requests.”

Ni, citing the examples of the Beiyang Fleet and the New Army in the late Qing dynasty (1644-1911), warned that a powerful army risks being annihilated by outside forces or becoming a tool to trigger a civil war if it was not part of a society that undergone social and political reform.

On December 17, 1888, the Qing dynasty ordered 12 warships from Germany and Britain to establish Asia’s finest navy – the Beiyang Fleet – which was sunk by the Japanese during the 1894-95 Sino-Japanese War.

The New Army was a modern military force, trained along Western lines, that was raised during the Qing government’s military modernisation project in 1907. But this powerful force later mutinied and played a key role in the 1911 Revolution that ended more than 2,000 years of imperial rule in China.

“The key reasons for the defeat of the Beiyang Fleet and the uprising of the New Army was not their weakness – they were well-funded and powerful – but ignorance of the need for political and social modernisation. I hope the new leadership will carefully learn the historical lesson of the Qing government about the need to introduce comprehensive social and political reform, otherwise it will be a disaster for the Communist Party,” Ni said.

Experts call for scrapping of mainland ‘golden weeks’

Holiday chaos leads to appeals for changes to the arrangements for allocating paid leave

Experts call for scrapping of mainland ‘golden weeks’

Holiday chaos leads to appeals for changes to the arrangements for allocating paid leave

Teddy Ng

09 October 2012

As millions of mainlanders returned to work yesterday after an eight-day holiday, the debate over whether to scrap such “golden weeks” is raging on the mainland, with some holidaymakers recalling horror stories from the past week.

Many experts have called for the introduction of more paid leave to replace the second golden week holiday of the year, but others say the existing holiday arrangements can stimulate consumer spending and better protect workers’ rights.

State media described the just concluded eight-day golden week holiday, a day longer than usual because the Mid-Autumn Festival holiday fell on September 30, as the worst holiday week in recent years despite a drop in casualties from traffic accidents and a rise in tourism revenue.

During the week, there were 68,422 traffic accidents, killing 794 people – a 46.4 per cent drop in fatalities from last year’s National Day holiday week. More than 34 million visitors were received by 119 tourist spots.

However, many major mainland cities were overloaded with tourists and many tourists in major scenic spots were stranded for hours without any food, complaining that their holiday had turned into a nightmare. The golden week arrangement, which sees millions of mainlanders take their holidays at the same time, was introduced in 1999, when the authorities wanted to boost economic growth following the Asian financial crisis.

But Cai Jiming, director of Tsinghua University’s Political Economy Research Centre, said the holiday arrangement had resulted in more drawbacks than benefits.

“The authorities only focus on short-term economic gain, without realising the negative impact caused to citizens,” Cai said.

The drawbacks include difficulties buying train tickets, over-booked hotels and the suspension of government services.

“Many people are on holiday, but it is not a quality holiday that they want,” Cai said.

In 1999, the authorities extended the May 1 Labour Day holiday from one day to three, and the National Day holiday from two days to three, and later combined the holidays with the days off in the two weeks preceding and following them. Together with the Lunar New Year holiday, there were three golden weeks.

Cai said the National Day holiday week should be replaced by more paid leave, which would allow workers to take days off whenever they see fit, and statutory holidays to celebrate traditional Chinese festivals.

“The pressure on holidays would be relieved if we had more statutory holidays, and workers could take long leave if they were entitled to paid leave,” he said.

But Liu Simin, a tourism researcher at the Chinese Academy of Social Sciences, said the golden week arrangement should be kept because many workers on the mainland were still not entitled to paid leave, and the golden week could ensure that they get time off work.

Big changes due at the top of the PLA after party congress

With seven of 10 PLA officers on the Central Military Commission too old to go on, big changes are certain after the party congress

Big changes due at the top of the PLA after party congress

With seven of 10 PLA officers on the Central Military Commission too old to go on, big changes are certain after the party congress

Choi Chi-yuk

15 October 2012

The senior ranks of the People’s Liberation Army are due a major reshuffle at the top after the 18th Communist Party congress.

Among the likely changes, the head of the General Armaments Department, General Chang Wanquan, and the air force commander, Xu Qiliang, are the front runners to become the two officers serving as vice-chairmen of the PLA’s top decision-making body, the Central Military Commission (CMC), and as members of the party’s Politburo, though General Fan Changlong, the commander of the Nanjing military area command, could be a dark-horse challenger to Chang.

Seven of the 10 PLA officers on the CMC are too old to serve another term, leaving just Chang, 63, Xu, 62, and the navy commander, Admiral Wu Shengli, 67, who is a possible successor to Defence Minister General Liang Guanglie, provided he does not retire but remain a member of the CMC.

If Fan, who is not a member of the CMC, manages a “two-step” jump and becomes one of the CMC vice-chairmen, Chang will then most likely be the minister of defence but a mere member of the CMC.

Chang, who was secretary to General Han Xianchu, the commander of the Lanzhou military command between 1973 and 1980, has long been tipped to replace CMC vice-chairman General Guo Boxiong in the once-in-a-decade reshuffle after this year’s party congress.

Both Guo and Chang, his protégé, have been considered heavyweights in the PLA’s so-called ” northwest army”, with each having served in the Lanzhou military command for more than three decades.

Meanwhile, Chang is also generally seen as a close ally of Hu Jintao, the state president and CMC chairman.

Although Chang was named a member of the CMC along with Xu and Wu after the party’s 17th national congress in 2007, Chang is the only one of the trio to come from one of the PLA’s four general departments, a tacit condition for a military officer hoping to become a CMC vice-chairman.

As commander-in-chief of China’s manned space programme, Chang raised his public profile when he declared the launch of Shenzhou IX, carrying the country’s first woman astronaut, a success shortly after the spacecraft blasted off on July 16. The successful docking of the Shenzhou IX with the Tiangong I space station during the mission further bolstered Chang’s prospects of becoming one of the vice-chairmen of the CMC and securing a seat on the Politburo.

Recent speculation has it that Fan, 65, is a rival to Chang for the post of CMC vice-chairman, but Chang is in pole position because he is younger and already a CMC member.

According to convention, one of the PLA officers serving as vice-chairmen of the CMC should be a military operational field officer (currently Guo, a former first deputy chief of general staff), and the other from the functional areas of political affairs (currently General Xu Caihou).

But none of the three top political commissars in the PLA at the moment, General Liu Yuan, 61, of the General Armaments Department, General Zhang Haiyang, 61, of the Second Artillery Corps, and General Zhang Yang, 61, of the Guangzhou military command, are members of the CMC and so are not senior enough to succeed Xu Caihou as CMC vice-chairman. That makes Xu Qiliang the best choice to fill the vacancy. After enlisting in the air force in 1966, Xu Qiliang went on to become an outstanding pilot.

Wu, regarded as another protégé of Hu, was promoted to vice-admiral in 2003, months after the 70 crew on a Ming-class submarine died in the Bohai Sea. He became navy commander in 2006.

Guanyu 道15 Oct 2012, 13:19:00

While he appeared more likely to succeed Liang who is now 72, as defence minister, Wu was somewhat tarnished by the downfall of the Chongqing party secretary Bo Xilai, because he was supposedly one of Bo’s closest friends among the PLA’s top brass. They were said to have established a close relationship in the mid-1990s, when Wu served as president of the Dalian Naval Academy and Bo as mayor of Dalian.

Speculation has been rife over the past few months that a third seat may be reserved for the PLA on the next Politburo, in addition to the two occupied by the CMC vice-chairmen. If that is the case, Wu would be an easy choice to fill the vacancy, but given that the cut-off age for appointment to the Politburo is 68, he would only serve one five-year term.

Of the remaining seven places on the CMC, the seat belonging to the director of the General Political Department is the most fiercely contested. Zhang Yang is seen as a late bolter for the post after long-term friendships with Bo clouded the prospects of Liu and Zhang Haiyang. Both General Zhang Youxia, 62, the commander of the Shenyang military command, and General Fang Fenghui, 61, the commander of the Beijing military command, have long been tipped to be the next chief of general staff, succeeding General Chen Bingde, 71, who is due to retire after the party congress.

Thanks to the close relations between Zhang Zongxun, Zhang Youxia’s late father and a former senior general, and Xi Zhongxun, the father of CMC vice-chairman Xi Jinping, Zhang Youxia will more likely have the blessing of Xi, who is set to become party secretary general and state president.

In that sense, Zhang will have a better chance of landing the position of chief of general staff. In that case, Fang, widely considered another protégé of Hu’s, will be the next chief of the General Armaments Department. Both Zhang and Fang will secure their places on the decision-making CMC in either case.

General Zhao Keshi, 65, commander of the Nanjing military area command, and General Hou Shusen, 62, another deputy chief of general staff, are strong candidates to head the General Logistics Department. Hou once served as secretary to a general logistics department head, General Wang Ke, and is known for his familiarity with PLA logistics.

The three other vacancies on the CMC are likely to be filled by three current deputy chiefs of general staff, General Wei Fenghe, 58, Admiral Sun Jianguo, 60, and General Ma Xiaotian, 63. Wei is tipped to become commander of the Second Artillery Force after the party congress, Sun is likely to head the navy and Ma is expected to become air force chief.

Hong Kong’s Victor Li, son of “Superman”, has hard act to follow

Back in the days before e-mail, Victor Li, the heir to Asia’s largest family fortune, used to sleep with a fax machine by his bed, ready for his famously restless father, Li Ka-shing, to send through instructions at any time of night.

Adele – Live at Brit Awards 2011

Adele – Someone Like You

I heard that you’re settled down

That you found a girl and you’re married now

I heard that your dreams came true

Guess she gave you things I didn’t give to you

Old friend, why are you so shy?

Ain’t like you to hold back or hide from the light

I hate to turn up out of the blue, uninvited

But I couldn’t stay away, I couldn’t fight it

I had hoped you’d see my face and that you’d be reminded

That for me, it isn’t over

Never mind, I’ll find someone like you

I wish nothing but the best for you, too

Don’t forget me, I begged, I remember you said

Sometimes it lasts in love, but sometimes it hurts instead

You know how the time flies

Only yesterday was the time of our lives

We were born and raised in a summer haze

Bound by the surprise of our glory days

I hate to turn up out of the blue, uninvited

But I couldn’t stay away, I couldn’t fight it

I had hoped you’d see my face and that you’d be reminded

That for me, it isn’t over yet

Never mind, I’ll find someone like you

I wish nothing but the best for you, too

Don’t forget me, I begged, I remember you said

Sometimes it lasts in love, but sometimes it hurts instead, yeah

Nothing compares, no worries or cares

Regrets and mistakes, they’re memories made

Who would have known how bittersweet this would taste?

Never mind, I’ll find someone like you

I wish nothing but the best for you

Don’t forget me, I begged, I remember you said

Sometimes it lasts in love, but sometimes it hurts instead

Never mind, I’ll find someone like you

I wish nothing but the best for you, too

Don’t forget me, I begged, I remember you said

Sometimes it lasts in love, but sometimes it hurts instead

Where Do the Wealthiest Expatriates Live?

A small island state in Southeast Asia has come out tops in a listing of countries that boast of the richest expatriates.

Where Do the Wealthiest Expatriates Live?

Gauri Bhatia, CNBC Asia

08 October 2012

A small island state in Southeast Asia has come out tops in a listing of countries that boast of the richest expatriates.

In an annual survey released by HSBC on Monday, conducted across 100 countries and involved more than 5,000 expatriates, Singapore emerged as the most favoured expat destination to make money in and accumulate luxuries.

Foreigners, who make up a sizable portion of Singapore’s 5 million-plus population, earn more than those living in any other part of the world. About 54 percent of Singapore-based expats who took part in the poll earn more than $200,000 annually compared to a global average of only 7 percent according to the Expat Explorer 2012 survey.

Singapore, which came in third place last year, moved up two slots to beat Bermuda at No. 2 and Thailand at No. 3. The three other Asian countries that made it to top 10 are Hong Kong, China and Vietnam.

The survey, in its fifth year, showed 80 percent of the expats who moved to Singapore saw an increase in their disposable income. Around 44 percent reported an increase of 50 percent or more in their disposable income, compared to the global average of just under a fifth.

Given the bleak employment picture in both Europe and the United States, job hunters are increasingly looking eastwards for opportunities, with 70 percent of the expats surveyed citing better career prospects for the move to Singapore.

Better Quality of Life

In terms of quality of life, Singapore also scored high, coming in fourth in the world and second in Asia after Thailand. Better accommodation, less commuting time and a more active social life were some of the pluses of living in this tropical nation, the survey found.

Singapore is also child-friendly in the eyes of its expats. Ninety-one percent of the respondents said they felt their children were safer here. Costs, however, were a concern with 83 percent saying they are spending more on education for their children.

“Singapore is fast becoming an all-round expat destination for career progression, financial rewards and quality of life,” said Paul Arrowsmith, head of Retail Banking & Wealth Management at HSBC Singapore.

Where Are They Investing?

Expats in Singapore do not favour any one asset class and maintain a diversified investment portfolio. Those earning $200,000 to $250,000 per annum have moved over time from a higher proportion of cash investments to a relatively even mix of cash, real estate and equities, the survey found.

“Expats have come to realize, given wider economic uncertainties, the advantage of diversification to hedge against volatility,” wrote HSBC in its survey report

MAS imposes cap on housing loan tenures

Absolute limit of 35 years set for new, refinance mortgages, loan-to-value ratios for certain new loans also tightened

MAS imposes cap on housing loan tenures

Absolute limit of 35 years set for new, refinance mortgages, loan-to-value ratios for certain new loans also tightened

Emilyn Yap and Mindy Tan

06 October 2012

Singapore regulators signalled their concerns over still rising home prices yesterday, announcing fresh mortgage curbs to cap upward price pressures caused by low interest rates and fast credit growth.

The Monetary Authority of Singapore (MAS) said it will set an absolute limit of 35 years on the tenure of all residential property loans – both new loans and refinancings. It will also lower loan-to-value (LTV) ratios for new loans with a tenure of more than 30 years. The new rules will apply to both private homes and HDB flats and will take effect today.

“Monetary conditions worldwide are far from normal,” said Deputy Prime Minister Tharman Shanmugaratnam, noting that the latest round of quantitative easing (QE3) in the United States and low interest rates have made credit easy, though this will eventually change.

“We are taking this step now to require more prudent lending, and will continue to watch the property market carefully,” said Mr Tharman, who is also Finance Minister and MAS chairman. “We will do what it takes to cool the market, and avoid a bubble that will eventually hurt borrowers and destabilise our financial system.”

The new rules – Singapore’s sixth round of cooling measures – look set to affect not just home buyers and existing owners looking to refinance their mortgages, but also property developers and banks.

According to the central bank, over 45 per cent of new home loans have tenures exceeding 30 years.

“We will not be surprised to see more measures being introduced if property prices do not stabilise (or correct slightly) over the next few months,” said Barclays Capital economist Leong Wai Ho.

MAS will cap the tenure of all new residential property loans at 35 years.

For refinancings, the tenure of the refinancing facility and the number of years since the first home loan for that property was disbursed cannot add up to more than 35 years.

Also, MAS will lower the LTV ratio for new home loans to individual borrowers if the tenure exceeds 30 years, or the loan period extends beyond the retirement age of 65 years.

The LTV will be 60 per cent for a borrower with no outstanding residential property loan, compared with 80 per cent previously, and 40 per cent for a borrower with one or more outstanding home loans, compared with 60 per cent before the new rules.

For non-individual borrowers, the LTV ratio for home loans will be lowered to 40 per cent from 50 per cent.

The MAS move comes after the Hong Kong Monetary Authority announced a 30-year limit on the maximum term of all new mortgages last month, following the launch of QE3. With the Federal Reserve looking to pump US$40 billion into the US economy each month until sustained jobs growth kicks in, worries about hot money inflows into Asia and asset price inflation have again emerged.

Guanyu 道7 Oct 2012, 01:05:00

Stretched tenures

Previous rounds of cooling measures had a moderating effect on home prices in Singapore, and a significant supply of housing will also come onstream in the next two years, MAS noted. “However, prices in both the HDB resale market and private residential property have continued to rise in Q2 and Q3 of 2012.”

According to official flash estimates on Monday, HDB resale prices rose 2 per cent in Q3 from Q2, while private home prices gained 0.5 per cent over the same period. Separately, the SRX Residential Property Flash Report yesterday showed resale prices of non-landed private homes rising 3.2 per cent in Q3.

Low interest rates globally and locally are likely to persist and will continue to spur residential property demand, pushing up prices beyond sustainable levels, MAS warned, stressing that “the eventual correction could be painful to borrowers and destabilise the economy”.

Meanwhile, financial institutions have stretched the durations of home loans, and long tenure loans pose risks to both lenders and borrowers, the central bank said. The average tenure for new residential property loans climbed to 29 from 25 years over the last three years, it revealed. Also, more than 45 per cent of new home loans granted by financial institutions have tenures exceeding 30 years.

Lower initial monthly repayments from long loan tenures and low interest rates may cause borrowers to overestimate their loan servicing ability and take a bigger loan than they can afford, MAS said. In fact, long tenure loans create a larger debt repayment burden as interest accumulates over a longer period.

“When interest rates eventually rise, borrowers who have overextended themselves will have difficulties repaying their loans,” MAS said. “If property prices fall, financial institutions may be caught holding the bad loans.”

Banks which offer home loans with a tenure of over 35 years will feel the impact of the new rules almost immediately. DBS and OCBC are among those providing mortgages stretching up to 40 years.

“We will reduce our existing maximum home loan tenure of 40 years to 35 years, with immediate effect,” said OCBC group corporate communications head Koh Ching Ching.

A DBS spokeswoman said that most of the bank’s home loans have a tenure of under 35 years. “It will take some time to ascertain the impact of the new measures while homebuyers assess the market.”

Guanyu 道7 Oct 2012, 01:05:00

Resale impact

United Overseas Bank (UOB), which introduced 50-year housing loans in July, did not respond to media queries. Some market watchers then had questioned if the product would cause borrowers to overextend themselves, and National Development Minister Khaw Boon Wan subsequently called it a “gimmick”.

Maybank said its maximum loan tenure for home loans is 35 years. “With an ageing population and couples marrying and setting up home at a later age, the new rules will have impact on these segments,” said Alan Yet, head of lending (consumer banking) for Singapore.

The jury is out on how the new rules will affect the residential property market. The Real Estate Developers’ Association of Singapore (Redas) does not expect a significant impact. “Based on past experience, not many buyers take long tenure loans,” it said. Just last week, Redas said the property sector does not need more cooling measures – at least not before a thorough review of the impact of earlier policies.

Jones Lang LaSalle South-East Asia research head Chua Yang Liang believes that the new rules may be more keenly felt in the secondary market, particularly for buyers with existing housing loans as the lower LTV applies to them.

“The property market is likely to see a knee jerk reaction with a slowdown in resale activity while new sales should remain fairly stable,” he said. “Given the potential economic slowdown and with this new policy risk, developers are likely to adopt a more cautionary stance and land bid prices could be more modest.”

Lin Poh10 Apr 2013, 13:25:00

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So, where have all the mainland spenders gone?

Apparently, the shopping sentiment in Hong Kong has changed a lot since the last holiday season.

So, where have all the mainland spenders gone?

Apparently, the shopping sentiment in Hong Kong has changed a lot since the last holiday season.

George Chen

03 October 2012

In addition to the tragic news about the Lamma Island ferry accident [1], the deadliest boat accident in Hong Kong in 40 years, retailers didn’t have a great holiday season either.

Luxury shops in particular reported a slump for this “golden week”, when people on the mainland get a week off to celebrate National Day and many often travel to Hong Kong, their No. 1 shopping destination abroad.

Apparently, the shopping sentiment in Hong Kong has changed a lot since the last holiday season. Forget the long queues of consumers in front of luxury shops like Prada and Chanel on Canton Road in Tsim Sha Tsui. In the last few days, you can just walk in or wait one or two minutes to enter.

In Central, I visited the Landmark and IFC Mall, two must-go places for those who want a five-star shopping experience or chase the fashion trend. Surprise! I found no crowds no matter the time. At IFC’s Bally, the Swiss brand for luxury handbags, three salespeople were a bit surprised to see I entered the shop and swarmed over to ask what they could do for me. One of them acknowledged that it had been a very quiet day so far.

So, where are the consumers?

Video: “Shoppers in Hong Kong on October 1”, by Helene Franchineau [2]

It’s no secret that many locals have tightened their purse strings given the weak business environment in the city’s two pillar industries – finance and real estate. Hundreds of jobs have been cut at major international banks in the city so far this year, and the government is trying to curb the fast rise of property prices.

Then, how about mainland travellers? The answer is a mixed one.

In terms of numbers, you will still see a rise. Hong Kong broadcaster TVB, citing the Tourism Board’s estimates, reported earlier this week that about 900,000 mainlanders were expected to travel to Hong Kong during the “golden week”, roughly a 15 per cent increase from the same period last year.

But people in the retail industry said they didn’t expect mainland travellers to contribute more than what they did around the same time last year.

Some cite economic slowdown on the mainland as one of the main reasons why now even mainland travellers — whose images are often linked to rich spenders when they travel abroad — are more financially conservative. Others say Hong Kong may be already losing its attractiveness for mainland travellers.

“Those who have already visited Hong Kong for a couple of times in the past few years are now looking beyond Hong Kong. They want to go to places where they haven’t been, for example, Taiwan, South Korea and so on,” said an executive at a local travel agency.

“The sad fact is that those who are coming to Hong Kong [from the mainland] for holiday nowadays are perhaps more from the third-tier or even fourth-tier and fifth-tier cities, so their spending power is very limited. Many of them choose those cheap group tours and are not willing to shop too much,” he said. “We see more mainland tourists like that this year. For them, free sightseeing is more important and interesting than shopping.”

Some of my mainland friends note that the sentiment towards Hong Kong as their first choice for holiday and shopping has changed due partly to growing tensions with locals over many social problems. They say Hong Kong is not considered a friendly travel destination any more. On the other hand, the Hong Kong government is of course trying its best to rebuild its image as the shopping paradise for mainland tourists.

Meanwhile, rich families from first-tier mainland cities, such as Shanghai and Beijing, are now more eager to visit New York or Las Vegas in the United States where they can buy luxury products at even lower prices than in Hong Kong.

Guanyu 道4 Oct 2012, 01:24:00

Some economists have been already worried about the outlook of retail business in Hong Kong. Many local privately-owned small shops and restaurants have already been forced to close so far this year, thanks to fast-rising rent. They were quickly replaced by many luxury brands that considered mainland travellers their target customers.

Now the question is whether those luxury brands can survive this cold season of consumption. If not, when those shops are closed, who will be next to take over?

Elite and Deft, Xi Aimed High Early in China

Thirty years ago,a young government official with a plum job in Beijing made an odd request: reassignment to a poor rural area.

Elite and Deft, Xi Aimed High Early in China

The New York Times

30 September 2012

Thirty years ago,a young government official with a plum job in Beijing made an odd request: reassignment to a poor rural area.

At the time, millions of young people were still clawing their way back to China’s urban centers after being exiled to the countryside in the Mao era. But 30-year-old Xi Jinping bucked the trend, giving up a secure post as adviser to a top military leader to navigate the tumultuous village politics of Zhengding, in Hebei Province.

The move offers a window on the political savvy of Mr. Xi, who, despite a recent two-week absence from public view that raised questions about his health, is on the cusp of taking over as China’s supreme leader at a party congress that officials announced Friday would begin Nov. 8.

Mr. Xi (his full name is pronounced Shee Jin-ping) gained a measure of credibility to speak for rural Chinese compared with many other well-connected children of the elite. He also realized, according to several inside accounts, that his powerful family stood firmly behind him, ensuring that his stint in the countryside would be a productive and relatively brief exercise in résumé building that could propel him up the Communist Party hierarchy.

His powerful father, Xi Zhongxun, a revolutionary-era military leader, helped orchestrate his transfer, selecting Zhengding because of its relative proximity to Beijing, and later having Mr. Xi reassigned when he ran into local opposition, Chinese experts who have researched Mr. Xi’s background, said.

His connections allowed him to take chances in Zhengding. He pushed through market-oriented reforms when they were still considered cutting edge, and sidelined pro-Maoists. His stint in the countryside also helped him form new alliances with other offspring of the elite who would later prove important allies.

Even three decades into the country’s rapid industrialization, China’s leadership still pays heed to its heritage as a party of peasants, and it has tended to promote officials who can claim to be deeply rooted in the rural struggle. But it has also tended to favor “princelings,” the privileged offspring of former leaders who had ties to the party’s revolutionary history.

After his time in Zhengding, Mr. Xi could check both boxes.

“People think of him as being from the new generation of technocrats,” says Jin Zhong, a Hong Kong-based analyst of Chinese political leaders. “But he’s really a continuation of the red bureaucracy of his father’s generation.”

Mr. Xi’s trajectory was similar to that of Bo Xilai, another princeling who used stints in the provinces to create an image of a bold reformer and champion of the poor before his career was derailed by a major scandal this year. Mr. Xi’s stay in Zhengding, however, was characteristically more cautious, even as parts of it have entered modern Chinese political lore.

When Mr. Xi volunteered for rural duty in 1982, he did so along with two other up-and-coming officials, including Liu Yuan, son of the former head of state under Mao, Liu Shaoqi.

The men’s decision to work at the grass roots caught the popular imagination after the author Ke Yunlu wrote a 1986 novel, “New Star,” about a party secretary who takes modern, market ideas to a backward province. The official meets many troubles but manages to triumph.

The novel’s hero was a composite character based on Mr. Xi and the other two young officials. The book was soon made into a popular television series and is still widely known as a classic of that early reform era.

What Mr. Xi found in Zhengding was less romantic than the novel. He had hoped to be a party secretary with direct authority over a town or county but the conservative provincial party secretary, Gao Yang, blocked that. Disgusted by inexperienced but well-connected princelings like Mr. Xi parachuting into his domain, Mr. Gao made him deputy party secretary of Zhengding.

Guanyu 道1 Oct 2012, 16:18:00

Still, Mr. Xi took on the assignment with gusto. He wore a green army greatcoat from his involuntary service in another rural area under Mao, roaming the town night and day to survey its problems. Wang Youhui, a local official, wrote in a published essay that he recalls seeing Mr. Xi for the first time and being taken aback by his plain style.

“I realized that this guy, who from his style of dress made him look like a lad from the canteen crew, was the new deputy party secretary,” Mr. Wang wrote.

Mr. Xi’s biggest challenge was managing the county’s roads, which were part of national north-south arteries. They were so bad — strewn with manure, dirt and grain left out to dry — that the county was labeled in government reports as “chaotic, dirty and backward.”

Mr. Xi took firm action. According to internal government histories, he held mandatory classes for 43,200 people — 10 percent of the county’s population — on how the roads should be handled. As a member of the county’s Politics and Law Committee he also helped lead a draconian crackdown on crime, part of a nationwide attack on “Spiritual Pollution.”

The county began holding show trials of criminals through the summer and autumn of 1983, according to these government accounts. Four people were executed in public on one occasion.

Later in 1983, Mr. Xi was promoted to party secretary and kept a firm hand on social issues. Under his leadership the local government strictly enforced the national one-child policy. According to internal government documents, the county sterilized 31,000 women and fit another 30,000 with intrauterine contraceptive devices.

Like the crime campaign, the family planning measures were part of a national policy and there is no evidence that Mr. Xi was more zealous than others. But it illustrates a truism for successful Chinese leaders — that social issues have to be dealt with firmly to create political space for market-opening economic measures.

It was in economics as well as personal connections that Mr. Xi stood out.

Zhengding was a grain-growing center, with peasants forced to grow huge amounts for central granaries. Mr. Xi formed a clever alliance with Maoists and used his family ties in Beijing to cut Zhengding’s grain quota by one-quarter. That freed up farmers to use their land more lucratively, such as for raising fish, geese or cattle.

Mr. Xi caused even more of a stir in Zhengding when he tried to make it a center of television filming. State television was filming the classic novel “Dream of Red Mansions,” which is set in a palace and surrounding grounds. Crews had already built an enormous replica of the park in Beijing. But Mr. Xi used his political connections to get the mansion built in Zhengding, meaning the cast had to travel six hours to Zhengding to shoot indoor scenes.

Despite local opposition, Mr. Xi pushed through a plan to spend three times the original amount in a bid to make the set permanent.

The story of building the television studio is now firmly part of Mr. Xi’s official lore, touted as an example of his visionary economic leadership. In justifying the costs, he said it would help create a tourist attraction, and for many years it was popular because the television series was a huge hit. Several other shows were also filmed there in the 1980s and early 1990s. But what is rarely mentioned is that the Rongguofu mansion now gets few visitors and has not been used as a set for 20 years. It also spawned two spinoffs in Zhengding that are bankrupt, with one torn down and the other shuttered.

Despite his clout, and unlike the character in the novel “New Star,” Mr. Xi was not able to vanquish all his enemies.

Guanyu 道1 Oct 2012, 16:18:00

He was never promoted beyond county chief. He was blocked, local residents and biographers say, by Mr. Gao, the provincial party secretary. According to Hu Lili, one of the authors of a new biography published by Mirror Books, Mr. Xi’s family decided that three years in Zhengding was enough. In 1985 his father arranged to have him transferred to China’s wealthier and more reform-minded coast, where he served under a more sympathetic party chief with ties to his father.

Yet the time in Zhengding helped Mr. Xi hone his skills, setting a template for his rise. It also cemented his bond with Liu Yuan, who is now a senior leader in the People’s Liberation Army. He also made an ally in Li Zhanshu, who was a local official in Hebei at the same time as Mr. Xi. Mr. Li has now been tapped to take over the party’s nerve center, its General Office.

“You can’t separate his accomplishments from his political support,” said Yang Zhongmei, a Xi biographer and lecturer at Yokohama City University. “This is the model you see today: if you have enough political support and money, you can accomplish a lot.”

This story originally appeared in The New York Times

Boom city Dongguan faces bankruptcy as village debts soar

Dongguan’s derelict factories and huge deficits send chilling warning to a China in slowdown

Boom city Dongguan faces bankruptcy as village debts soar

Dongguan’s derelict factories and huge deficits send chilling warning to a China in slowdown

Charlotte So in Dongguan

28 September 2012

After three decades of spectacular growth, Guangdong’s boom town of Dongguan is on the brink of bankruptcy.

Up to 60 per cent of its villages are running up deficits and will soon need a bailout from the township, researchers at Sun Yat-sen University have discovered.

It is a dramatic turn of fortune for Dongguan – one of the richest cities in China – and could foreshadow a wider fiscal crisis as the country’s economy cools.

Local government debt hit 10.7 trillion yuan (HK$13.16 trillion) nationwide at the end of 2010, equivalent to about 27 per cent of gross domestic product. Credit rating service Moody’s estimates the actual figure could be about 14.2 trillion yuan.

Bai Jingming, a senior researcher at the Ministry of Finance, estimated in 2009 the total debt of village authorities could total 10 per cent of the country’s GDP, but there is no official data.

Bai said many village chiefs he interviewed had no idea how much debt they had. Yet their failings could bring serious political and financial instability at higher level government right down to the grass roots.

Experts have found Dongguan’s village debt woes stem from two factors: a tightly-bound landlord economy, plunged into crisis by failing factories in the global downturn, and political pressure on local village chiefs to pay generous “dividends” to voters under the immature rural election system.

“The financial problems of the villages are much more serious than expected,” said Shao Gongjun, the owner of a printing company who blogs on Dongguan’s economy. Shao attributed much of the crisis to the local authorities’ dependence on rental incomes.

A backwater farm town until the late 1980s, as China boomed Dongguan was transformed into one of the most important hi-tech manufacturing centres in the world.

An IBM vice-president famously said a mere 15-minute jam on the expressway there would be enough to cause worldwide fluctuations in computer prices.

As industry thrived, the population swelled from 1.8 million in the ‘80s to more than eight million. Most of the peasants cashed in and built matchbox homes on their land, letting the flats to migrant workers. Village authorities leased community land to factories and collected rent as their main source of income.

This worked perfectly until the recent downturn. Shao said many factories had either closed or moved out over the past five years to inland provinces with lower costs.

The number of Hong Kong-backed factories has dropped by 15 per cent since 2007. As factories and migrant workers left Dongguan, rents nosedived.

“I’m so worried that before long I will lose my tenants and the flats would be left deserted,” said a 61-year-old woman surnamed Luo. She put together two million yuan from her life savings 10 years ago and with bank loans built a six-storey apartment building in Luowucun in Zhangmutou county. Her family occupied the first floor and let the rest out to migrant workers.

Luo used to collect about 15,000 yuan a month in rent – nearly 10 times what an average worker earned. But rents have dropped by a third since 2007.

The fall in rental values forced 60 per cent of the 584 villages in Dongguan into budget deficits, the study by Professor Lin Jiang of the finance and taxation department of Lingnan College at Sun Yat-Sen University found.

Lin’s estimate is based on a study of 30 villages in relatively well-off counties, such as Tangxia, Houjie and Humen, in May.

The figure may not reflect the whole picture, but it gives a good snapshot of the problems authorities face.

“They are in deficit because their incomes are shrinking while their expenses are going up,” Lin said.

This is an unexpected sideeffect of China’s fledgling grass-roots democracy.

Guanyu 道1 Oct 2012, 16:15:00

While competitive elections are still absent at almost all levels of government, Beijing has started to let villages choose their leader through universal suffrage. These elections have been getting increasingly competitive, and candidates often promise to pay generous “dividends” to villagers to attract votes.

“In some rare cases, the leader-elect promised to give each household 10,000 yuan per month,” Lin said. The money would come from the village community “investment” – effectively, the rent they collected from factories.

Lately, village chiefs have found it difficult to fulfil such election pledges. But instead of reneging on their promises and sparking the anger of villagers, they turn to the rural credit co-operatives – the de facto local banks – for short-term loans at interest rates as high as 30 percentage points.

Banks are willing to lend, because they know that the township government would have to bail villages out if things go wrong.

“Some village leaders are now really worried that the bank may come to call in the loans,” Lin said. “If the villages default, the burden would be transferred to the county or the township government.”

The Dongguan government is in poor shape to handle a crisis. Its GDP growth slowed to 2.5 per cent in the first half of the year. The average growth in the past eight years was about 11 per cent.

Xu Jianghua, Dongguan’s party secretary, urged villages last month to stop raising money to pay dividends. Few took heed.

Village chiefs may argue paying dividends are not the sole cause of their debt. They also have to pay for local fire and police services – even though these are supposed to be the local government’s responsibility.

For years, the township government underinvested in such services, knowing they would be taken care of by the cashed-up village authorities.

Eddy Li, president of the Hong Kong Economic and Trade Association, said in some counties police would refuse to investigate a crime unless it involved more than 20,000 yuan.

Shao estimated Zhangmutou county authorities alone have accumulated a total of 1.6 billion yuan in debt. Annual revenue is only 600 million yuan.

Shao said the Dongguan government needs structural reform to end its reliance on rental income. He proposed the township give residency to migrant workers so they can contribute more to the local economy.

“Without a radical change in the social structure, the economic transformation will never succeed,” he said.

Seven rising stars tipped to lead sixth generation of China’s leaders

They were born in the 1960s, grew up in a time of economic change and could finally deliver on reform

Hu Chunhua is the party secretary of Inner Mongolia

Sun Zhengcai is the party boss in Jilin province

Zhang Qingwei is the governor of Hebei province

Zhou Qiang is the party secretary of Hunan province

Guanyu at 1:26 pm

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Guanyu 道1 Oct 2012, 13:28:00

Seven rising stars tipped to lead sixth generation of China’s leaders

They were born in the 1960s, grew up in a time of economic change and could finally deliver on reform

Keith Zhai

01 October 2012

As China prepares to usher in a new leadership this autumn, eyes are not only on Hu Jintao’s likely successors – Xi Jinping and the other so-called fifth generation Communist Party leaders – but the chosen few expected to come to power a decade from now.

Already, observers have widely identified seven up-and-coming party officials tipped to be among those presented to the Great Hall of the People when the sixth generation takes the helm after the 20th national party congress in 2022.

These rising stars, who include Hu Chunhua, the party chief of Inner Mongolia, and Sun Zhengcai, party chief in Jilin province, are largely unknown outside their relatively small spheres of influence. But that will change as fourth-generation party leaders use the coming reshuffle to position them for future advancement.

The seven have different backgrounds, but they share much in common. All were children in the 1960s, amid the fear and chaos of Mao Zedong’s Cultural Revolution, and came of age amid the optimism of the boom times created by second-generation leader Deng Xiaoping’s “opening up” in the late 1970s.

They were among the first to seek higher education after the Cultural Revolution subsided and the universities reopened. All seven hold master’s degrees from top mainland universities. Where many of their predecessors, such as Hu and Xi, were trained as engineers, the sixth-generation prospects include a lawyer, an economist and an agronomist.

Four of the seven have come up through the Communist Youth League, a key base of support and a talent training ground for Hu Jintao.

While they did not travel abroad for education – as is now common for young Chinese – the sixth generation has had more exposure to Western ideas than their predecessors and are more comfortable with the capitalistic practices once shunned by party doctrine.

“Those born in the ‘60s have a broader and deeper knowledge base,” said Professor Wang Yukai, of the Chinese Academy of Governance. “It shows the trend. China changed from being ruled by revolutionaries to scientists and now the social scientists.

“The younger generation has brought innovative ideas and energy to the party, which could also enhance the governance of the party,” Wang said, adding that movers and shakers of the sixth generation seem more liberal and open to new ideas.

As such, some analysts feel the sixth generation could be the one that finally delivers the political reform that Hu and leaders of the fourth generation have only spoken about in abstract terms.

Others, such as Professor Wu Hui, of the Central Party School’s party-building department, are not so sure. Wu said that changes from within were slow because the party is the ultimate authority.

“Many presidents in the US and European countries are also very young, but they don’t make too many stupid mistakes because their society is supervised by law,” he said. “But in China, the party is powerful but the law is weak and the party is superior to law.”

Also, despite occasional talk about increasing the diversity of party leadership, the top sixth-generation prospects are all men, meaning that if other contenders don’t emerge, Beijing will be ruled exclusively by men for another 20 years.

Aside from Hu Chunhua and Sun, the sixth generation’s cast of rising stars includes: Lu Hao, the youth league’s first secretary; Fujian Governor Su Shulin; Hebei Governor Zhang Qingwei; Xinjiang party chairman Nur Bekri; and Hunan party boss Zhou Qiang.

In appearance, the seven look much like their party predecessors: dark suits and jet-black pompadours. They are nonetheless part of a wave of younger, better educated cadres getting leadership posts as the central government seeks to bolster its reserves of candidates for higher office.

Some 29 per cent of the roughly 400 people who sit on the party’s provincial standing committees were born in the 1960s, according to figures reported by state media in July. That is more than three times the number selected from that decade five years ago, a greater increase than one would expect due to age alone.

Of the group, 37 are women, four more than five years ago.

Unlike those who reached adulthood during the Cultural Revolution, few children born in the 1960s were “sent down” to work in factories and farms. Still, many felt the effects of Mao’s movement, suffering through purges, famine and other manifestations of the chairman’s personality cult.

They were among those best positioned to profit when Deng’s policies suddenly brought business back to life, relaxed social control and opened the country to foreigners and foreign investment.

Liu Junsheng, a professor of public administration at the China University of Political Science and Law, who has spent the last decade researching the 1960s generation, described its members as “more familiar with economic development theory than communist theory”.

“The 1960s generation has very little understanding of the party’s revolutionary tradition, as they haven’t been through that era,” Liu said. “Instead they grew up in the era of change.”

Liu’s research into the latest party personnel figures released in July show they are, as a rule, highly educated. All of the more than 170 ministry-level officials born in the 1960s have university degrees. Nearly 90 per cent have master’s degrees.

The seven rising stars have been selected in part because the praise they receive in the state-run media suggests they have support for future appointments. The official press routinely describes them as down-to-earth, honest, diligent and frugal.

But analysts are quick to point out that the entire 1960s generation of party officials has come up through a time of seemingly omnipresent corruption as powerful cadres sought a larger share of the country’s rapidly growing wealth.

Party disciplinary authorities reported penalising 136,670 officials for corruption last year – up from 106,626 people in 2009. Analysts said most party officials have been involved in some level of corruption in the past 30 years.

“It’s a problem for the entire generation,” Liu said. “It’s a generation of people who were born in the years of famine in the 1960s and lost their soul during the gold rush in the 1980s. They don’t have a belief in anything but money.”

One political strength for four of the rising stars is their ties to the Communist Youth League. Lu, Hu Chunhua and Zhou have each served terms as the group’s first secretary. Nur Bekri led Xinjiang University’s youth league early in his career.

In the youth league, young officials quickly gain knowledge about internal party decision-making and work closely with powerful officials, such as former youth league leader Hu Jintao. Such ties have led mainlanders to describe such league alumni as the tuanpai, or “league faction”.

Promoting officials from the youth league could also be a positive for citizens who want cleaner public officials. Since league positions have little real power, the group is believed to have less corruption within its ranks.

But having a top leadership made up largely of the tuanpai also has drawbacks, analysts say. Youth league jobs are generally not demanding, meaning its officials receive few of the tests and challenges that might best prepare them for high-level posts.

The rush of ambitious young officials looking to use the youth league as a political stepping stone also risks undercutting its purpose to maintain a connection between the party and the people. And too many promotions for tuanpai could hurt morale among officials excluded from the club.

“To work in the youth league is a safe job, and one can easily obtain a high ranking at a relatively young age,” Wu said. “Their easy promotions could damage the enthusiasm of non- tuanpai officials.”

It will be at least a decade before China learns the full potential of the sixth generation and whether they envision the sort of change the country wants.

One analyst cautioned that a lot could happen in the next 10 years to change the cast of rising stars, as their fortunes rise and fall.

The first clues may come in the years after the 18th party congress, when the first members of the sixth generation receive some of the country’s toughest jobs.

“I’m not sure if the ‘60s generation will push the envelope on political reforms,” Liu said. “In China, a leader can only make reform happen by sacrificing himself. But if he could actually make it, he would become a hero.”