03 Oct 2008

Keywords: political reform, anti-corruption, food security, surveillance, AIDS, U.S.-China relationship, Olympic, oil, rural development

  • Main theme of the Third Wave of Liberal thought: “Rights to the People”

Party Secretary of Wunan, Zhang Chunxian (張春賢) claims that the first and second waves of liberal though had concentrated on delivering “Utilities to the People”; now the main theme of the third wave should emphasize on delivering rights to the people. Content includes rights to information, participation, expression and monitoring.

The message was posted on Internet. In a provincial party-led forum, it has received around 140 million browsing and 170,000 responses. China Newsweek’s, citing the ‘intellectual circle’ however, questions whether it is a precious move, or just a practical implementation of the themes of 17th Party Congress. Although looks suspicious to the move, the journal’s editorial was entirely devoted to the issue. (China Newsweek, vol. 388, pp.2, 22-23)

1.2        The 7th Criminal Law Amendment: “Anti-Corruption as Major Focus”

On 25 August 2008 hold the fist deliberation meeting of the amendment in NPCSC. Suggested amendments include 1) the inclusion of collective corruption behaviors, includes enabling charges on officials’ private vault and officials’ lover. 2) Given the fact that it has been highly difficult to distinguish ‘corruption’ from ‘unclassified source of income’, in which a confirmed bribery of CNY$100,000 can lead to death penalty, but the latter charge, regardless of amount, can only lead to a maximum penalty of 5 years imprisonment. The proposal suggests to increase the penalty to 10 years. 3) How to comprehend, institutionalize and monitor the declaration and disclosure of personal assets of officials also draws significant attention.

Cynically, the report ends with, ‘law is only the last resort to social problems’. The editorial of this issue is again, on reform. The core theme is how to deliberate and reach a dynamic reform procedure, but it suggests that the first step is to forecast a favorable political climate and social understanding for further reform. (China Newsweek, vol. 387, pp. 2, 20-22) Also see (Oriental Outlook, vol.252, pp.30-32)

1.3 A Series of Mishaps

1.31 Follow-ups of the Tainted Milk Crisis

  • Accountability: Director of the National General Administration of Quality Supervision, Inspection, and Quarantine. Li Zhangjiang (李長江) resigned. Many involved companies are in the non-quarantine list of the bureau. (Ming Pao, 080923, p.A02) Premier Wen’s comments (MP, 080925, P.A34) President Hu’s comments (MP, 080920, p. A20)
  • Company: Sanyuan buys over Sanlu (MP, 080928, p.A08) Stock Prices of Mengniu & Yili continue to drop and it was said that toxic chemicals are discovered in the wine-making industry. (MP, 090924, p.B02)
  • New Cases: Lipton in Hong Kong (MP, 081010, p.A08) ; M&M’s, Oreo & Snickers under Cadbury in Indonesia (MP, 080929:p.A02) ; Heinz, Taiwan Pizza Hunt (MP, 080927, p.A05) ; Nestle Hong Kong (MP, 080922, p.A07)
  • Victims: 1) Hong Kong: around 10,000 diagnosed, around 5 in hospital. China: over 7 million diagnosed, hundred thousand in hospital, and 6 died.(Cheng Ming, October) 2) Baby of the poor (mainly clustered in the low price milk sector, i.e. Sanlu) and aged in elderly home and nursing centre.
  • Sanction and Inspection: EU, US, Japan, SE Asia, Australia and New Zealand.

1.32 Nightclub Fire in Guangdong

Illegal Shenzhen nightspot leaves 43 dead and 88 injured.  Negligence and corruption by local authorities were to blame for the fatal Shenzhen nightclub blaze, reported SCMP. The authorities said the club had no license and had been operating illegally for a year. The Longgang district government apologized to the public and said the accident was because of “lax law enforcement”. (SCMP, 080922, EDT1, EDT3)

1.33 Coal Mine Gas Explosion in Henan

Xinhua reported that 108 miners were working in the Xinfeng No 2 Coal Mine in Dengfeng, Henan province, when there was a gas explosion underground at about 1am yesterday. When the search-and-rescue effort ended, 37 workers were confirmed dead and 71 been freed. Hu Quan, vice-mayor of Henan’s capital city Zhengzhou, said that the mine appeared to have been operating illegally. (SCMP, 080922, EDT6)

1.34 Coal Mine Blaze in Heilongjiang

A fire broke out in the Fuhua Coal Mine in Hegang city of Heilongjiang, killed 19, 12 more were still missing.  The city has ordered all its coal mines to suspend operations pending inspections. Mine safety authorities are investigating the cause of the blaze. (SCMP, 080922, EDT6)

1.4 Political Struggles before the 3rd Plenary Secession of CCP Central Committee

Reforms on grassroots Bureaucracy and Direction of Economic Policy will be the main focus. See 3.1 for details. (Trend, October; China Brief, October)

1.5 Does “The State Council Party and State Organizations Special Food Supply Center” Really Exist?

“The Activity Centre of Elder Officials of the State Council has no such agency called The State Council Party and State Organizations Special Food Supply Centre, it has never held ‘certificate ceremonies,’ nor does it have a person named ‘Zhu Yonglan.’ Any related online information is purely rumours.” (China News Agency, 080925) But netizens have discovered concrete evidences on the operations of the centre in the past.[1] It was further discovered that the heads of the centre were either former government officials or have worked in quangos.[2]

1.6 Media and Internet

1.61 “Shenzhou 7 launched successfully,” said Xinhua, when it was still on the ground: A technical error, a routine practice or a structural problem?

“A news story describing a successful launch of China’s long-awaited space mission and including detailed dialogue between astronauts launched on the Internet Thursday (Xinhua website 26 Sept), hours before the rocket had even left the ground,” reported the Associated Press. The news was circulated around the globe by foreign media and reinforced the negative images of official Chinese media and perhaps even China.

Xinhua responded that the posting of the article was a “technical error” and was removed later. While it is common for journalists[3] to prepare raw materials before an expected incident actually happened, Xinhua obviously sets precedent to include such intensity of details, including the exact dialogue content. (080926AP)

1.62 New Case on Surveillance System

A group of Canadian human-rights activists and computer security researchers has discovered a huge surveillance system in China that monitors and archives certain Internet text conversations (including those in Skype) that include politically charged words. (Citizen Lab) [4] The finding was reported in John Markoff’s column on New York Times as well. [5]

1.63 Proposed Blank on “Human Flesh Search Engines”

Human Flesh Search Engines, a vigorous term in the Internet, means using the power of mass to report an incident of an incident or to find an person, has drawn a lot of attention. Referencing to the numerous cases in recent years, Oriental Outlook suggests that the phenomena and its practice have touched upon numerous issues: an expression of humanitarian concerns and angers, a search for truth, a breach of privacy, and a mass tyranny, etc. Indeed, some of the NPC representatives suggest making the action a criminal offence in the 7th Criminal Law Amendment Meetings. (Oriental Outlook, vol. 253, pp.10-23)

1.7 China’s AIDS Epidemic Spreading Fast by Sex Contact

 According to a study to be published in the journal Nature, the AIDS virus is infecting more women, heterosexual couples and gay men in China as the epidemic spreads from intravenous drug users to the general population. Infections transmitted by heterosexual contact rose to 38 percent of all cases in 2006, base on a study in Yunan. Nationally, infections have risen in women and shot up eightfold among men who have sex with other men.

“From 1989 to 1995, the patients were most affected by the virus, the high percentage of infected are now due to sexual contact and has begun to move from farmer, minority groups in rural areas into worker, Han-majority urban settings,” the researchers said. Government efforts are need to expand programs such as condom promotion among female sex workers, drug rehabilitation and needle exchange to slow the rate of infection.  

 1.8 Celebrating the National Day

Southern Weekly makes the 59th Anniversary of PRC a cover story. Four Questions are being asked. “1) What did Guo Jia  (國家) do for me? 2)What did I do for Guo Jia? 3) What could Guo Jia do for me? 4) What could I do for Guo Jia?” (Southern Weekly, 22 Sept 08)

When Guo Jia is the subject (1+3), people’s answers tend to refer the concept as the state and on the utilities that it has given. When Guo Jia is the object (2+4), people’s responses tend to refer to the concept as the representation of country/nation, and on delivering duties and acquiring rights.

1.9 Follow-ups

1.91 Political Struggle as the cause for the sacking of Shanxi Governor (Cheng Meng, October, p.20-1)

1.92 With the imprisonment of “ Tiger. Zhou”, would the “Fake Tiger Incident” finally ended? (Southern Weekly)[6]

1.93 Petitions after Olympics: About 40 parents of missing children went to Beijing to petition for help to find their children, after the Olympics and Paralympics had finished. Not only detained by the Public Security, their account of the incident was also censored in the Internet. [7] (China Digital Times, 2 October) Cheng Ming indicates that there were over 4000 protests last few months. (Cheng Ming, October, p. 8-10)


2.1        US policy towards China under Obama or McCain  

The two candidates for the President of US, Barack Obama and John McCain, delivered their thoughts in paper on Sino-American Relationships. (China Brief, American Chamber of Commerce, October)

Obama’s speech suggests trade; currency, human rights and environmental issues will form the cores of the bilateral relationship. James Fallows further deliberates Obama’s orientations: makes sure labour laws are enforced; raises food safety issues; deals with protectionism, includes China as part of the solution to environmental problems; and finally addresses human rights and rule of law more frequently.

Similarly, McCain stresses the need to keep China committed to international trade rules and honoring the promise for a market-oriented currency exchange rate, and necessary technology should be provided for China to copy with environmental problems. Further, he maintains that America shall seek international cooperation rather than isolation of China, especially in security issues and the strait dialogue.

Thomas Friedman, sharing the views of James Follow, maintains that the bilateral relationship is so intertwined that major deviation by either side is pretty limited.

2.2        Oil and Iran

Over the last few weeks Iran has amplified its threats that, if attacked, it would immediately close the Strait of Hormuz. Despite China’s dependence on Iran’s oil, Beijing has endorsed UN Security Council sanctions against Iran and failed to support Iran’s admission to the Shanghai Cooperation Organization.

Although it is in Beijing’s interest to avoid conflicts in the area so as to ensure stability of oil supply, its effects on China would be relatively limited. Indeed, it is in China’s best interest to have a closure of the issue ASAP when as China has deliberately and successfully lessen its demand on the Persian Gulf. But in the long run, with rapid and continuous economic growth, oil supply from the Gulf is going to be a must for China. (China Brief, Jamestown Foundation, vol. VIII, issue. 18, October).


3.1 Economic Policies and Political Struggles

According to Willy Lam, President Hu and Premier Wen will have to confirm their stands on macro-economic policies in the third plenary session of the CCP Central Committee.  That will be a tight struggle between the Central and the Warlords. The former want to have rigorous monitoring and the latter want a lessening of control. The meeting would ensure that the hard times would not exacerbate severe “contradictions within the people.” Agricultural policy, property market, stock market and inflation will thus be the main concerns. Indeed, although CPI downed from 8.7 % to 4.9%, PPI rose to 10.1% featuring an even increasing manufacturing costs. Not many choices are available for the leadership?? (China Brief, vol.VIII, issue 18)

Cheng Ming also sees the lessening of macro-economic policies as a result of political struggle, but with slight different explanations. It suggests that it was a gift from external economic crisis, which gave the intervention camp (Premier Wen, Central Bank Governor Zhou) an upper hand against the optimistic camp (Vice Premier Wang). (Cheng Ming, October, p.14-5)

3.2 China’s Economic Future

According to an article “The Great clash of China ” in FEER, China’s economy is actually facing a fundamental structural adjustment that has arrived much earlier than expected. Decreasing foreign demand for inexpensive manufactured goods, the closing down of labour-intensive low-tech manufacturing industries in the south, the misallocation of vital investment, and product safety concerns are straining China’s manufacturing base and challenging the tenuous linkages between continued economic growth and a rising middle-class.

China’s domestic demand is increasingly responsible for driving growth, not exports, giving the Chinese economy a natural buffer against wild swings in the world economy. But recently, consumer confidence, according to official statistics, is drifting downwards and Western ratings on Chinese commercial banks, the holders of unused commercial real estate, are being lowered. The fact that although household savings are high, but a significant amounts of them are being invested in the property and stock markets, add uncertainly to the conventional wisdom and confidence in the driving force of domestic demand. Pressure starts to accumulate on the government to lessen its control on monetary and fiscal policies. (FEER, September/October) See also (Caijing, Vol.18, pp.82-96, 110-1) on the debate. 

3.3 Rural Landuse: Deforestation, Property Rights and Contracting Mechanisms 

Central Government’s policy on rezoning rural forestland has triggered off intense conflicts in the countryside, between landlords, peasants, and local cadres. (Oriental Outlook, vol.252, p.15-23)

 3.4 Environmental Concerns over Economic Growth?

Survey data presented on Sept. 19 at the Economist Conferences’ Fifth China Branding Roundtable in Beijing indicate that 31 percent of Chinese consumers identify the environment as a higher priority than the economy, a percentage that is significantly higher than consumers in the United States and slightly higher than consumers in the United Kingdom.

When asked what it means to be a “green brand,” Chinese consumers prioritize trustworthiness, being environmentally conscious, and working to cut pollution and waste as the three top indicators.[8] (Environmental Protection Online)

3.5 Olympics’ Economic Returns and Aftermaths

A report from China Economic Journal suggests that the Beijing Olympics will have a direct profit of US$2 billion, base mainly on the commercials and economic sharing with the Olympics Committee. Apparently nothing more to say, it gives an old estimate from a British expert in June, saying that the gross economic effects are around US$71.7 billion, and direct effects around US$41.9 billion. Also, official statistic data shows that the GDP of Beijing has increased from 10% to 10.8% in the period 2005-08. (080928CEJ)

HKEJ however, citing Tao Dong (陶冬), Chief Economist of Suisse Credit, suggests that business travels had dropped by 90%, five-stars hotels in Beijing had only 10-20%, and the luxury restaurants are nearly empty during Olympics. Together the worrying figures like PM1 fell below 50 for successive months, national power consumption decreased by 0.4% and the diminishing confidence in the corporate sectors, he suspects keeping 8% annual growth might be a difficult task this year. (080924HKEJ) 


4.1 Scandal of their former president and the incompetence of their current president still dominate Taiwan media

Issues: 1) An unemployed man killed himself blaming Chen as the cause of his and Taiwan’s mishaps. 2) Taiwan Next Magazine suggests that Chen’s family has over HK$2.1 billion assets including 0.4 billion jewelries, gold and antiquities 3) Chen’s wife refused to attend to hearings after repeated requests from the courts 4) A few articles in Southern Weekly explain, why an hero has become an villain 5) The rating of Ma stabilized at around 30% and two of his cabinet ministers resigned because of mishandlings of administrative problems and natural disasters.

4.2 China-Taiwan Join Hands to Exploit China Sea Resources

Official media in Taiwan and Hong Kong are reporting that the two sides will list cross-Strait joint exploitation of oil and gas resources in the disputed Diaoyutai Islands. The reported agreement between China and Taiwan will incorporate the upstream assets of the China National Offshore Oil Corporation (CNOOC) in China and the downstream assets of the Chinese Petroleum Corporation (CPC) in Taiwan. (Summary report sees China Brief, vol.VIII, Issue. 18, October)


5.1 A Test on a 5 years-old child’s intellectual capacity and social awareness!

Leaked Interview questions from prestigious primary schools with “model answers” presumably provided by a critical/cynical parent that would guarantee your boys and girls stay in public schools forever. [9]

5.2 Aftermaths of Lehman Brothers’ mini-bonds[10] 

Issues: 1) Not Bonds, a Form of Derivatives 2) Government’s Interventions 3) Political Parties’ Participations 4) Holders’ Intends and Risks 5) Bank’s Positions

5.3 Rumours on East-Asia Bank’s Bankruptcy 

Issue: 1) Social Trust in Economic Crisis 2) Economic and Political Manoeuvre of the Lee’s Family 3) Conspiracy Theory

[1] http://chinadigitaltimes.net/2008/09/does-the-state-council-party-and-state-organizations-special-food-suhttp://www.bullog.cn/blogs/ranyunfei/archives/183811.aspxpply-center-really-exist/

[2] http://www.bullog.cn/blogs/ranyunfei/archives/185289.aspx

[3] See 閭丘露薇’s comments on 1510.  <http://www.my1510.cn/article.php?cb33ce143ab75aeb>



[6] http://www.infzm.com/newsmap/index.php?id=17987

[7] http://chinadigitaltimes.net/2008/10/a-beijing-petitioning-adventure-of-40-parents-who-lost-children/

[8] http://www.eponline.com/articles/67962/

[9] See Appendix II.

[10] http://woepatra.com/archives/365