19 Sep 2008

Keywords: food security, anti-corruption, media censorship, labor, China-U.S. relationship, anti-monopoly, housing price


1.1  The Salun Incident

1.11 The Basic Facts

In early August, the New Zealand shareholder of the Salun Group discovered that melamine was presented in the milk powder. They informed the executives of the Group and the local authorities who only agreed to solve the case quietly and refused to make any public statement or recall. The NZ shareholder dissatisfied with the result, approached the PM of New Zealand who then notified Beijing. Only at this stage, around early September, that the case was finally exposed to the public. Last year, melamine was found to be responsible for sickening or killing thousands of pets in the U.S., after the animals ate pet food containing a Chinese-made ingredient tainted with the industrial chemical.

More than 6000 babies, across the country, are diagnosed of having kidney stone or kidney failure, 4 of them died by 18 Sept. The number is expected to rise. The provincial authority of Gansu, originally claimed that it was a matter of criminal act, committed by a few diary farmers. But later, after the Administration of Quality Supervision, Inspection and Quarantine started testing samples of all formula brands, it was discovered that 22 dairy brands products contains melamine, revealing that the cause of it is more complicated. Some sources assure the collection terminal; others claim that it was an understood practice in the national industry; growing evidences suggested that the practice was known 3 years ago.

A number of provincial and municipal officials were sacked, and the executives of the Salun Group were kept in detention.

1.12 Public Safety, Government and Corporate Responsibility, and Product Image

1) A famous blogger at Bullblog explains why the Chinese authority could produce one of the best Olympics but could never handle the food safety. [1] (2) The SCMP sees it as an opportunity to test the capacity of recently expanded Ministry of Health. (3) Lots of people and netizens are demanding the resignation of the Director of the ASIQ, and the investigation into the collaborations between the authority and corporation. (4) Pollings and Netizens comments show that the Chinese customers had lost their confidence in Chinese products when famous brands like Salun, Yili, and MengNiu are also involved in the scandal.

1.13 An Arena and Occasion for Corp. Competition: Alibaba vs. Baidu

The Alibaba posted a number of news and articles accusing Baidu as an Internet Mafia who has taken money from the Sanlu group to censor information. The Baidu spokesperson formally addressed the media to condemn the rumors spread by Alibaba. The Alibaba responded by saying that they are the media that uphold universal values like freedom of expression and the right to truth. [2] Who is telling the truth is not easy to determine. But certain facts can be confirmed. 1) Alibaba has blocked Baidu search engines in all its websites. 2) Sanlu PR did have such proposal. 3) Both have the precedents of deleting sensitive information, although the causes are yet to be known.

1.2  Shanxi mudslide and the fall of the Governor, Meng Xue-nong (孟学农)

The death toll of the mudslide was up to 259 by 17 Sept. An initial investigation has found the mudslide was caused by negligence. The waste ore dump was built in contravention of rules. Relief works continue and the state council orders safety inspection of similar sites. A number of officials, from the province to the municipal were sacked. (080917CDHKE)

The most notably one was the Governor if Shanxi, Meng Xue-nong, who used to be the mayor of Beijing. He was sacked on 2003 because of covering up the SARS incident. He just took over the post of governor 8 months ago. On 2003, he was treated as irresponsive official and the sacking was seen as the indicator of the accountability system. This time, the media and public expressed mixed responses, regarding him as a victim, an opened-minded and devoted official, although claiming accountability is still necessary. Indeed, he has written a 10000-words article on the developmental path of Shanxi, including the tightening control of coal mile safety, recently.[3] Nonetheless, the incident contributed to the following deliberations: 1) how should sacked officials be re-employed, 2) for whom, and what is accountability aiming at, and 3) whether a change of guardian mean anything if the ruling structure and ideology remain untouched?  (080917SW)

1.3  Deutsche Welle on News

It was said that the Zhang Danhong’s (张丹红), a senior editor at Deutsche Welle, was suspended from her post due to her friendly remarks toward China. The German media reacted strongly, claiming that she gave up the necessary stands and values of a reporter. The Chinese press reacted the other way round. China Daily claimed that it reflected the double standard of the foreign media. The People Daily refereed it as the prolonged prejudice of the western press. Even the Foreign Ministry participated in the ‘crisis’, urging the media to be fair and objective. (080829CD, 080929PD)

The DW released a response, claiming that Zhang was released from duties but her post was kept. It was a normal procedure at as an investigation is upholding on whether she has contradicted to the values and principles of DW and when the public has expressed significant concerns on the subject matter.  (080830DW)

1.4 Vanished life-time Saving and Investment Trap

A mass incident has occurred in the city of Jishou (吉首) in northwestern Hunan province, reported Ming Pao. Tens of thousands of angry protesters, many of whom had lost their life savings in illegal investment schemes run by legitimate real estate and mining companies, clashed with police and blocked traffic and train. (080905MP)  The WSP also addressed the case, with reference to the corruption structure that provokes this kind of activities.  Peculiarly, half of the essay was devoted to the involvement of PLA in economic sectors.

        1.5 Politics and Dilemma of Representation: the case of Migrant Workers

        The Southern Window interviewed the first NPC representative of migrant worker, Hu Xiao-yan.  (胡小燕) She was accused of alienated from the mass and have devoted to climb up the officialdom instead of representing the interests of the migrant workers once elected as the NPC representative. She disagrees, saying that there are limits on her time, cognitive and political capacity. She needs to work 5 days a week as a factory worker while at the same time, answering hundred and thousands of calls, including harassments. She could only make suggestions to the authority but the migrant workers demand immediate result, etc. That certainly reflects the entrenched conflict of ‘democratic representation’ in the current political structure. (090902NFC)       

        1.6 An Unknown Public Suicide

A man, whose identity remains unknown, died after setting himself ablaze in Shanghai’s historic riverside Bund area on 11 Sept.[4]

1.7 Interview with Zhu tian-wen (朱天文) (080901RWZH)

The Taiwanese writer gave an interview for the People’s Magazine of the Southern Publication Group, revealing her path of becoming a writer.

1.8 Discovering and Transmitting Traditional Virtues in the Informative Age: I-Phone Girl vs. Waste Product Beauty   (Appendix 1)

‘‘It would be great for every Chinese worker who makes your iPhones to take a snap of herself or her factory friends … a hello from a person you would never otherwise meet. Globalization in practice.” [5]

“Will the shameless Internet promoter please don’t insult our intelligence?”  “If you have to run another promotion again, please be a little bit more professional.  We are already immunized to these tricks.” [6]

1.9 The End of the Paralympics

China has put on a wonderful Paralympics that has helped transform world opinion about the country, Sir Philip Craven, President of the International Paralympic Committee. (080911SCMP) 


2.1 Georgia and China’s Diplomatic Dilemma

According to SCMP, ‘China was torn between, on the one hand supporting a friend’s move to counter a perceived attempt by the west to expand influence along Russia’s border, and on the other, opposing Russia use of force to undermine another country’s territorial integrity, Beijing’s absolute diplomatic no-go zone.’ (080911SCMP) Issues like how China should maintain its stand to the expansion of NATO; how should it consolidate the détente, if any, with Russia; and to what extent is its capacity in protecting the small states in Central-Asia, were tested here.

2.2 India succeed in making a deal with the Nuclear Suppliers Group

The NSG waiver allows India to emerge from the diplomatic nuclear blockage from its refusal to sign the nuclear non-proliferation treaty. India believes the deal will give it access not only to nuclear material and know-how but also to sensitive technologies beyond the atomic arena.

The media of India claimed that China had intended to block the deal, and insisted that China is calling for an NSG waiver for Pakistan as well. The FT disagrees on the validity of those reports. But it adds that the bi-lateral relationship of both countries is far from harmonious. First, the US wants to use India to counter-balance China in a number of areas. Second, China have secured a number of strategic oil and atomic energy suppliers across the globe while India’s 70% of oil reserve has to come from the Gulf—they are competitors. Third, the traditional tensions and China’s alliance with Pakistan will never look good in the eyes of India.

2.3 China urged Japan to investigate Migrant Abuse

The Foreign Ministry of China has called on Japan to carry out a full investigation into the maltreatment of six Chinese women working in Japan. Officials from the Chinese embassy in Tokyo had been sent to look into the case and to visit three of the women, who are being treated in hospital for injuries incurred while escaping from the laundry for which they worked. Chinese migrant workers have been a major source of labour in Japan as low birth rates and a rapidly ageing population have left many manual jobs unfilled. (080912SCMP)

2.4 China’s Global Discourse Disadvantage or Opportunity

According to a senior writer of SCMP, there are three ongoing debates about the prospects for humankind in the 21st century: the resurgence of authoritarian states; the search for resources and surging commodity prices; and humanitarian intervention.

In each of these debates, western policy intellectuals, media pundits, politicians and activists set the agenda and dominate the discussion. China has been at what may be called a discourse disadvantage in making its views heard, let alone respected.

However, in an academic conference held in South China early August, a group of so called New Left intellectuals and academics see the crucial meaning of the Rise of China, as providing an alternative to the dominant discourse. That is, it is not entirely about the unprecedented growth rate, it is about the responsibility of Chinese Civilization to the World. It is whether such growth, together with a more and more responsive authority, a relative efficient goods allocation mechanism, and a different value systems, etc, could provide an occasion, to end the orientalism, to start to represent itself, to restart an ended history. (080721_21CBH; 080728_21CBH)


3.1 The Anti-Monopoly Law and the anti-MNCs sentiment in China

China’s Commerce Ministry says it will enforce anti-monopoly rules in reviewing Coca-Cola Co.’s bid in offering US$2.5 billion bid for Huiyuan Juice Group Ltd.The deal has sparked criticism in China of the sale of one of the country’s best-known brands to foreigners. It is in part, a test of China’s new anti-monopoly law, which took effect Aug. 1, and in part, the indicator for Chinese nationalism and official stand towards merger offered by foreign MNCs. (080911IHT)

3.2 The Rumor about the arrest of Wu Jinglian (吳敬璉 )

The case was first reported by the Boxun News Service which later released a statement that the report was found to be inaccurate.[7] But the rumors had already spread through the internet and the recent issue of the Trend suggested that it was not entirely a rumor, but a product of intra-party political struggle and disagreement on economic policy. (0809TD, p.24)

3.3 The Drop of Property Price and the Collapse of Stock Price

A group of demonstrators, many of them are young professionals, came in search of compensation, in front of Vanke’s regional office at Hangzhou. Having already paid for yet-to-be-completed Vanke apartments, they were irate that the company was now offering discounts of up to 25 per cent on similar properties. (08911FT) Similar incidents, although in scatter scale, had happened all over the country targeting different developers. It is unlikely that such collective action could offer the buyers any compensation, but at least it reveals that both the seller and buyer share the view that the property price in China, is going to fall dramatically. The drops in stock market are even more dramatic, with the benchmark index down by two-thirds since last October. (080912FT) Many of the SOEs, banks and even the MOF and PBOC have invested significant amount of money in the bonds, securities, sub-prime markets and stock markets of the companies that are currently in serious troubles, including the Freddie Mac, Fannie Mae, and Lehman Brothers, etc.

3.4 Economic Data and Marco-Economic Policy

The global retrenchment in prices for food, energy and raw materials helped boost China’s trade surplus and reduce inflation in August, alleviating two key difficulties for Beijing and giving authorities more room to support the economy if needed, reported WSJ. (080911WSJ) But at the same time, the industrial output fell to a six-year low in August, partly dented by the temporary closure of hundreds of factories for the Olympics, partly due to a decrease in foreign demands, but retail sales expanded at close to a record pace. (080912FT) The Economist revealed that senior executives in China are better paid than those working in the West, once their cost of living is taken into account, according to Hay Group, a consultancy. (080911ET)

In the face of global financial turmoil and signs of a slowing domestic economy, China’s central bank cut the country’s benchmark interest rate for the first time in more than six years last night. The PBOC also said it would reduce the amount that smaller domestic banks must hold in reserve with the central bank by 1% point to 16.5 % from September 25, freeing up funds for those banks to lend. (080916FT)

3.6 The 30-years Reform Series


4.1 The Corrupted President Chan vs. the Incompetent President

The recent issue of the Journalist of Taiwan makes the claim. Chan and his wife are being interrogated by the prosecutors and the case will go to the court very soon. Ma’s incompetence includes his determination in handling Chan’s case, adjusting the relationship with China, his economic policies, and his recent proclamation that his promises in the election campaign could only be realized after 8 years! (080915JT)

4.2 The Diplomatic Play 

Taiwan is attempting to gain a semblance of recognition in the United Nations with its request for meaningful participation in one or more of the UN’s 16 specialised agencies. Unlike in the past, Taiwan has this year adopted a far more pragmatic approach by not applying for full UN membership. However, it seems that the conditioned olive branch was not well taken. (080915FT)


5.1 Turnouts of the 2008 Leg Co Election (See Appendix 2&3)


1) The Democratic Party won 7 seats in direct election and 1 in FC election; hence able to consolidate the status of being the largest party in the Pro-Democracy Camp.

2) The DAB won 10 seats (13 if include FTU) and remains the largest party in the Leg Co and in the Pro-Establishment Camp.

3) The Liberal Party lost all direct elections, only got 7 seats in FC election (became 6 when 1 of them withdraw from the party after intra-conflict), its chairman and VP resigned.

4) The Civic Party won 4 seats in direct election and won 1 out of 5 in FC elections, much worse than their original expectation and polling calculations.

5) The League of Social Democrats (LSD) won 10% of the vote and 3 seats in the direct election, one of the most unexpected outcomes.

6) A significant number of so-called impartial-professionals enter the Leg Co.

General Explanations & Interpretations respectively:

1) The Pro-Democrats have benefited from the PR system this time! The Democrats are either having luck or the public are geniuses.

2) The Pro-Establishment has either suffered from intra-camp conflict or serious wrong calculations, or both.

3) The fall of the liberals was a combination of 1) a deliberate and collaborate attempts of ‘Central District’ and ‘Western District’, 2) the terrible local election machines and coarse community efforts, 3) the unattractiveness of its political narrative, i.e. they are not real libertarian but only representatives of tycoons.

4) The Civic Party was too 1) alienated from the mass, 2) its vision too novel, 3) its halo might be diminishing, and most importantly, 4) its election campaign was a disaster.

5) The LSD benefited from the 1) a pro-grassroots and ultra-left wing discourse, 2) anti-establishment propaganda and action, 3) a favourable economic circumstance, and 4) a wonderful campaign with a coherent message for those who want change!

6) Reflecting our land’s core values, and the strategy of divide-and-control of Beijing.

5.2 Fluctuation of Local Stock Market in the World’s Economic Turmoil







[1] See http://www.bullog.cn/blogs/mozhixu/archives/178738.aspx

[2] See http://club2.cat898.com/newbbs/dispbbs.asp?boardid=1&id=2449603

[3] See http://news.xinhuanet.com/local/2008-01/14/content_7417993.htm

        [4] http://news.xinhuanet.com/english/2008-09/11/content_9922135.htm

[5] http://afp.google.com/article/ALeqM5jHrsTSVouNgL37RYqnLSOrMulu8g

[6] http://news.xinhuanet.com/society/2008-09/09/content_9868214.htm

[7] http://www.boxun.us/news/publish/chinanews/Famous_economist_Wu_Jinglian_in_trouble.shtml