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People Watching: The Faces of 2012

Volume No. 042 February 2012

FEATURE

SOCIETY

Kashgar Facelift: Commerce Over Culture POLITICS

Poverty Line: New Have-Nots

wed o l l o h iracle nd m c i m tla r no a o e c h e l n How a na’s industria i out Ch

$4.99 www.newschinamag.com NEWSCHINA I February 2012

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EDITORIAL

Published by China Newsweek Corporation Publisher: Liu Beixian Executive Directors: Liu Beixian, Zhou Jianming Editor-in-Chief: Wang Xiaohui

A Year of Challenge and Opportunity

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n December 12, 2011, the Central Eco- and the major reason for China’s disproportionnomic Work Conference, an annual ally low domestic consumption is that the State meeting that traditionally sets the tone has benefited more from economic growth than for the country’s economic policy in the coming ordinary people. Official data show that between year, was held in Beijing. “Stability” seemed to 2005 and 2010, the GDP growth rate has outbe the main theme of the conference, in which grown that of per capita personal income by 1-2 President Hu Jintao identified four major tasks percent every year. In the meantime, government for 2012, namely “stabilizing the growth rate, re- revenue has continued to grow at about 25 perstructuring the economy, ensuring livelihood and cent each year, several times the average income promoting stability.” growth rate. To a large extent, these goals are in response to a With ample revenue, the government should slowdown in growth. According to the National Bureau of Statistics, China’s GDP growth rate over the first three quarters was 9.7, 9.5 and 9.1 percent With ample revenue, the government respectively, and that of the fourth should start to implement tax cuts in quarter is believed to be even lower, 2012 to prevent the economy from meaning the annual growth rate will stagnating. fall well below the 9.9 percent average maintained between 1979 and 2010. Experts believe that China’s growth rate in 2012 will be around 8 percent, more than 2 percent lower than that of 2010. start to implement tax cuts in 2012 to prevent Given the current high rate of inflation, many the economy from stagnating. Structural tax rehave warned of stagflation in 2012. ductions favoring the service and innovation inHowever, slowing GDP growth is actually un- dustries, as well as small and medium-sized busisurprising. According to China’s 12th Five-year nesses, should be implemented first. Plan released early in 2011, it is estimated that the While tax cuts for such industries will help average growth rate between 2011 to 2015 will be to achieve frequently-mentioned economic re7.5 percent. An 8 percent growth rate in 2012 is structuring, tax cuts to small and medium-sized far from stagnant. business will help safeguard jobs and economic While China will no doubt face a lot of chal- growth, two pillars of the government’s prized lenges in 2012, especially since the world’s ma- economic stability. One major challenge in 2011 jor developed economies are still struggling with was the widespread bankruptcy of small and mefinancial problems, the slowing growth rate also dium-sized businesses on the east coast. gives the Chinese government a chance to impleAlso, the government should increase expendiment some long-discussed policies which address ture to extend social welfare coverage to include some of its most serious domestic issues. more marginalized groups, which would help According to the conference, one major task narrow the income gap between the rich and the for 2012 is to increase domestic consumption, poor.

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Editorial Office Managing Editor: Zheng Zhonghai Advisor: Liu Dizhong Senior Editor: Yang Yi Copy Editors: Jack Smith, Alex Taggart Lead Writer: Yu Xiaodong Editors: Wang Yan, Yuan Ye, Xie Ying, Sun Zhe, Li Jia First Reader: Wesley Jacks Address: 5th Floor, 12 Baiwanzhuang South Street, Xicheng District, Beijing, China Post Code: 100037 Tel: 86-10-88395566 Fax: 86-10-88388045 Email: readers@newschinamag.com www.newschinamag.com Art Department Art Director: Philip Jones Photo Director/Illustrator: Wu Shangwen Marketing Office China Newsweek Corporation President: Wang Xiaohui Chief Executive: Fred Teng Tel: 1-212-481-2510 Fax: 1-212-481-2503 Address: Suite 1101, 15 East 40th Street, New York, NY 10016, USA Email: readers@newschinamag.com Toronto Office Director: Lai Hailong Address: 51 Halstead Drive, Markham, ON Canada L3R7Z4 Tel: 1-905-604-6150 Fax: 1-905-604-6170 Email: canada@newschinamag.com Marketing Director for China: Wang Chenbo Account Manager for China: Ren Jie Tel: 86-10-88388027 Circulation Manager for China: Yu Lina Tel: 86-10-88311834 Advertising Director for the US: Gao Weiwei Tel: 1-212-481-2510 Marketing Promoter for the US: Jerry Meng Tel: 1-212-481-2510 New York Office: Jing Xiaolin, Wei Xi, Sun Yuting Washington Office: Wu Qingcai, De Yongjian Los Angeles Office: Zhang Wei San Francisco Office: Liu Dan London Office: Wei Qun Tokyo Office: Sun Ran Paris Office: Wu Weizhong Bangkok Office: Yu Xianlun Kuala Lumpur Office: Zhao Shengyu Moscow Office: Tian Bing Legal Advisor: Allen Wu ISSN 1943-1902

CN11-5826/G2

NEWSCHINA I February 2012


Photo by CFP/Cover Illustration by Wu Shangwen

Contents

Sinking Feeling Mining, water depletion and environmental degradation have contributed to a rash of land subsidence incidents throughout China’s industrial heartland. Has China’s breakneck development undermined its own foundations?

Editorial

Politics

02 A Year of Challenge and Opportunity 10 Poverty Alleviation: The New Poor

Cover Story

12 Subsidence Crisis: Taking Responsibility/Water, Water, Anywhere

FEATURE

34 The Year Ahead: Faces of 2012 40 42

Economy

Illegal Commodities Exchanges: When Garlic goes Rogue Reconstructing Kashgar: Securing the New Silk Road

Visual Report

46 CNS in Nepal

Society

22 Inner-Party Democracy: The Chosen Ones 24 School Bus Accident: Overloaded, Underfunded 27 Teenage Experts: Sex for Snacks 30 Post-90s Generation: Rational Radicals NEWSCHINA I February 2012

International

Retrospective

48 Asia-Pacific Trade Union: In it to Win it? 52 Shanghai Portraits: Faded Pearls

CULTURE

58 Ancient Theater: Road to Rebirth 61 North Korean Animation: Drawing out the Hermit outside in

64 67

Exploring Chongqing: An Ancient, Modern Metropolis Flavor of the Month: Cloud Delights

04 MEDIA FOCUS 05 What They Say 06 NEWS BRIEF 08 Netizen Watch 45 China by numbers 66 real chinese 68 ESSAY 70 CULTURAL LISTINGS 71 COMMERICAL LISTINGS 72 Commentary

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Sanlian Lifeweek

NewsChina Chinese edition

November 21, 2011

December 12, 2011

Criteria Crunch Implications of EU Debt Crisis In July 2011, China replaced the US as the EU’s largest trading partner. With the decline of US influence, the importance of both China and the EU in global multipolarity has increased. Therefore, helping the EU with its debt crisis is in China’s economic and strategic interests. Since China will automatically be granted market economy status in 2016, the lifting of the EU’s 20-plus-year arms embargo is a more realistic exchange for China’s help. China should also take the chance to work with the IMF in its efforts to relieve the EU crisis, in return for assistance in making the yuan a more international currency.

Globe December 5, 2011

Chinese “Interns” in Japan Since Japan established a so-called “internship” mechanism to facilitate the import of low-paid skilled workers in the early 1980s, Chinese people have made up the bulk of this labor supply. Working in “3K” (heavy, dirty or dangerous) jobs, they can earn much more money over a three-year internship than they would in regular employment at home. Workers sometimes face payment delays, and since many of them are desperate to work extra hours, there have been reported cases of death from overwork. The Japanese government is considering a new policy to open the labor market to foreign workers, thus ending the internship system.

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The political future of a Chinese official depends entirely on his or her year-end performance assessment. Economic growth, measured by GDP, remains the most important index on the scorecard. As more compulsory targets have been added, officials now face a higher risk of losing their jobs than ever before. Environmental targets are a particular difficulty for less developed inland cities, where industrialization is problematic due to a lack of resources available to attract hi-tech companies.

Caixin Century November 21, 2011

Parking Racket In Beijing, the exponential growth of automobile use has made the operation of parking spaces extremely profitable. For years, the industry has been monopolized by two companies, State-owned Gladpark and private enterprise Gonglianshunda. A recent bribery case involving executives of the two giants exposed illegal co-operation between them to exploit public resources for personal gain. China’s capital city has suffered from economic losses and poor parking services as a result of their actions. It remains to be seen whether or not the case will lead to an open bidding system and a dissolution of the monopoly on the industry.

Oriental Outlook November 28, 2011

Trickle Down China faces severe water shortages and an uneven distribution of its water supply, meaning water diversion projects have become the only option in many places. However, this solution is often not mutually beneficial. Less developed areas in the upper reaches of rivers are often required to provide water supplies to more developed cities downstream at low prices, or even for free. Economically feasible deals are urgently needed, but the vague legal definition of water ownership and fragmented water governance across too many government departments present serious obstacles to progress (see: Water, Water, Anywhere; p19). NEWSCHINA I February 2012


Illustration by Wu Shangwen

“We have to check whether the worm is from the Netherlands or China.” Response to a complaint by a Qingdao resident who discovered a live worm in a can of imported Dutch milk powder. The Chinese distributor told the consumer they were only liable if the worm had entered the milk powder in the Netherlands. “The banking industry is so profitable this year that we feel ashamed to publicize it.”

“China is the world’s most generous host. It will show off its power at any cost.”

President of China Minsheng Bank Hong Qi glowing after a boom year for bank loans.

A commentary in the State-owned People’s Daily on China’s massive expenditure when hosting international events.

“Why do humans make mistakes? Two reasons: ignorance and impudence.” Economist Zhang Weiying telling the Economic Observer that the ignorance of the majority and the impudence of the minority lead to human catastrophes like the Cultural Revolution.

“Today is the most miserable day of my life. I love the Communist Party from the bottom of my heart, and I still have many good qualities.” Former mayor of Zhongshan, Guangdong Province, Li Qihong, shortly after being sentenced to 11 years in jail for bribery and insider trading.

“Sleeping with a celebrity is the best way in.” Singer Mo Xi’er on the best way to become famous in China.

“Many people told me that the commercial made them nervous. Their initial reaction was that the Chinese are flooding in, in huge numbers.” Hong Kong Baptist University professor Kong Qingqin, speaking at the Charhar Forum on Public Diplomacy Guangzhou 2011, on the lukewarm reception to China’s overseas promotional video which premiered in Times Square earlier in the year.

“Why is there no Steve Jobs in China? Because major enterprises spend too much time kissing up to the government, otherwise they’ll get into trouble. Why should they care about creative spirit?” Zhou Qiren, director of National Development Research Institute of Peking University, on China’s creativity gap.

“Judged from their microblogs, Chinese people are pretty righteous. But if that were true in reality, China would be very different to how it actually is. It is very easy to denounce evil from behind a screen, but being genuinely righteous is no easy task. ” Writer and blogger Han Han explaining his distaste for using microblogs as a barometer of national character. NEWSCHINA I February 2012

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Top Story

Chinese Anti-dumping Duty on US Cars China’s Ministry of Commerce announced December 14 that they will impose anti-dumping and countervailing tariffs on American automobiles beginning December 15. The duty, which expires after two years, targets all US-made cars and SUVs with an engine capacity exceeding 2.5 liters, and consequently will impact many well-known international brands and models, such as the BMW X5 and X6 series, Chrysler JEEP and almost all Cadillacs. The rate payable varies company to company. GM, for example, will pay an 8.9 percent anti-dumping duty and a 12.9 percent countervailing duty, with Chrysler paying 8.8 percent and 6.2 percent respectively. According to Chinese customs officials, imports of the targeted cars have increased year-on-year from 2006 to 2009. In 2008, 37,000 US cars to which the new tariff would apply were imported, occupying a

nearly 11 percent share of the Chinese domestic market, while in the first nine months of 2009, the rate rose to 13.5 percent. In the same period, China’s domestic autos suffered a sharp drop in sales volume, with consumers able to afford imported brands overwhelmingly opting to drive foreign automobiles. Analysts believe the new duty is designed to rejuvenate China’s stagnating domestic auto industry by making domestically produced cars more competitive. However, critics argue that regardless of price, European and American cars remain more desirable to Chinese consumers than domestic brands. As a result US carmakers have remained relatively unruffled by the new tariff, with GM issuing an open statement bluntly claiming that the Chinese market represented less than 0.5 percent of its total production.

Regardless of price, European and American cars remain more desirable to Chinese consumers than domestic brands

Military

The Ministry’s new policy was issued just two weeks after the US International Trade Commission approved anti-dumping and countervailing investigation into US imports of Chinese-made solar cells, which according to US customs, will generate US$2.5 billion in revenue this year.

China Denies Seychelles Base

Economy

China’s Ministry of Defense recently “politely refused” an invitation from the government of the Seychelles to set up a military base on the island of Mahe, part of the African island chain. The invitation came in early December when a 40-member delegation from China’s Ministry of Defense paid an official visit to the Seychelles. According to Seychelles’ Secretary of State Jean-Paul Adam, the military base was intended to combat regional piracy, which is a danger to China’s Indian Ocean shipping lanes. However, military cooperation between the two countries looks set to continue. “China will consider utilizing Seychelles ports for refueling and reloading, and assist other countries in need of escorts on long voyages,” said a Chinese Ministry of Defense spokesperson during the press

The Chinese Academy of Social Sciences (CASS) issued its Annual Report on Industrial Competitiveness of China, December 12, claiming that China is the world’s most competitive industrial power. CASS claims its index is based on the total industrial market share and trade volume of over 100 countries. Yet, the blue paper warned China has not yet shifted to high-tech-oriented industrial structure. According to CASS, China’s competitiveness remains reliant on low-tech and labor-intensive industries, notable for their increasing cost of labor and falling profits in recent years, while the country’s hightech industries remain dominated by foreign-invested enterprises. Zhang Qizhai, one of the report’s chief editors, told State media that China’s GDP per capita reached US$4,400 in 2010, which, based on World Bank criteria, places China’s national income above average. However, he added that if the country fails to upgrade its industrial structure, it could be caught in a development bottleneck.

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China Most Competitive

conference. China’s domestic analysts have attributed the vague response to concern over Asian perceptions that Beijing is seeking to gain military dominance in the region, particularly from Indian officials. Additionally, given the huge expense of maintaining an active overseas military base and the relative strategic importance of the Indian Ocean to China’s long-term interests, a rumored facility in Gwadar, Pakistan currently looks like a more economical option.

NEWSCHINA I February 2012


Society

Hepatitis C Outbreak in Henan and Anhui

Industry

Real Estate Prices Keep Falling China’s volatile real estate market was in free-fall for the last four months of 2011, according to domestic media reports. The latest official data show that residential apartments sold at an average of around 5,000 yuan (US$788) per square meter, meaning prices are falling by 0.7 percent per month on average. Although realtors across China have launched a variety of promotions to boost flagging sales, government tightening of the market, including restrictions on the purchase of second homes and mortgage lending, mean that there’s only so much they can do. The government announced in December that they will continue to restrict pricing in 2012. Homebuyers have been warned off attempting to secure a bargain just yet, however, with observers predicting the market will hit rock bottom sometime in the summer. Policy

Planned Overhaul of State Enterprises China’s State-owned Assets Supervision and Administration Commission under the State Council, China’s cabinet, announced December 10 that the country’s future structural reforms would be focused on categorizing State-owned enterprises (SOEs) into those centered on “the public good” and those aimed at business competition. According to the commission’s vice-director Shao Ning, so-called public good enterprises include almost all utilities companies, including the power, water, gas and telecommunications NEWSCHINA I February 2012

industries. Shao told media that the government will urge SOEs to lower their projected costs for technical and structural reforms in order to stabilize pricing and minimize the impact on ordinary people. Supporters of the plan claim it will reduce monopoly control over people’s livelihoods, behavior which has drawn significant criticism in recent years. However, analysts have warned that, without effective supervision, there is little incentive for SOEs to cut back on profiteering.

International

China and South Korea Clash over Fisherman The suspected stabbing death of a South Korean coastguard at the hands of a Chinese fisherman has inflamed tensions between the countries. According to South Korea’s State-run Yonhap News Agency, two South Korean coastguards were attacked when they attempted to board a Chinese vessel for a routine inspection, one of whom was allegedly stabbed to death with a shard of glass by the Chinese vessel’s captain. South Korean maritime police arrested the boat captain, charging him with murder and obstruction of justice. On December 14, two days after the incident, over 300 South Korean people gathered in front of the Chinese embassy in Seoul to protest the alleged murder. China’s foreign ministry responded with a denial of the South Korean claim, instead warning South Korea to stop “using violence in the inspection of Chinese vessels.” According to the Ministry, the Chinese fishermen were operating in disputed waters under the jurisdiction of a bilateral treaty granting fishing rights to both countries. The case remains under investigation.

Top Story/Xinhua; Military/Wu Shangwen; International/AFP; Others/CFP

The governments of China’s Henan and Anhui provinces are busy attempting to rein in an epidemic of Hepatitis C, with growing numbers of people in the region testing positive for the virus. By December 9, medical authorities in Yongcheng, a county on the Henan–Anhui border, had performed blood tests on over 5,000 residents, among whom 103 tested positive for Hepatitis C. State media warned the disease may have been transmitted by dirty needles in local medical clinics, though Ministry of Health officials later denied this claim without indicating an alternative source of the outbreak. Hepatitis C is a highly contagious blood-borne disease, and local medical professionals have urged the government to tighten the supervision of intravenous injections in local hospitals, many of which are suspected of re-using needles to cut costs.

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What’s Making China Angry?

What’s Making China Sad?

Han Gang, a farmer in Huaxian County of Henan Province, found his fields plundered by thousands of people after he offered up his radish surplus to the hungry via his Sina Weibo account. After taking every one of Han’s radishes, foragers moved on to his sweet potato crop, walking off with 10 tons of prime produce that Han had planned to sell at market. The “greed” of crowds that netizens saw as taking advantage of Han’s generosity became a trending topic on Chinese blogs. Surprisingly, Han blamed himself for his losses, remarking that he “hadn’t organized the event properly.” Han’s misfortune was later tempered when sympathetic customers flocked to purchase the remnants of his sweet potato crop way above the market price.

What’s Shocking China? A driver, after being seen engaging in sexual acts with two women in his car while stripped to the waist, later killed one unfortunate witness with his car. He Liangfu, a 23-year-old migrant worker from Sichuan Province inadvertently witnessed the menage-a-trois when he glanced into the vehicle on December 1. In response, the driver started his car and ran into He Liangfu and his five companions while they attempted

to flee. He Liangfu died at the scene, and two of his friends were seriously injured. The suspect remains at large.

Poll the People

The guy is so daring!

36,253 respondents

Ji Siguang, wanted for assault and robbery, was recently caught after working as an actor for 13 years, starring in the TV spy series Lurk. What do you think?

4,317 (12%)

He’s a good lurker It is absurd he wasn’t caught earlier Life imitating art

Source: www.weibo.com

To pay for the medical expenses incurred by seeking treatment for their two-month-old baby, a couple from Dianbai, Guangdong Province walked the streets naked with their two children to beg for money November 27. Their baby had been hospitalized a month previously and the family incurred a debt of 1,500 yuan (US$235) after using their life savings to pay for treatment. The parents, who work as garbage collectors, eventually had their debt written off by local police, after which they put their clothes back on and went to check their baby out of the hospital.

14,659 (40%)

5,896 (16%)

11,397 (31%)

Most Circulated Post on Sina-Weibo

re you throw them away fo be es ad bl r zo ra d an les ed “Wrap up broken glass, ne rt.” rbage scavengers being hu ga d an s er an cle t en ev pr to

169,224 times

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NEWSCHINA I February 2012


Deng Fei

W ho ’s Ho t?

Top Blogger Profile Followers: 787,559 Deng Fei, 33 years old, is a senior journalist working for the Hong Kong-based Phoenix TV, founder of the Free Lunch Project that is helping relieve the malnutrition in schools in China’s hinterland, and a co-founder of a project on Sina Weibo aimed at stopping child trafficking by identifying child criminals and beggars forced to work for street gangs.

Sun Xiuzhen The 58-year-old cleaner took more than 20 hours of her personal time to return 22 new cell phones and about 70,000 yuan (US$11,000) in cash she found in the Xi’an restaurant where she worked.

Su Jianguo The former county head of Jiangxi Province who returned to office only one year after being disgraced by a forced demolition that led a homeowner to burn herself to death in protest.

Top Five Search Queries over the seven days to November 22 “A War with Your Mom” 71,352 Guidebook written by two fourth-grade girls to instruct peers in how to cope with strict parenting. Nicolas Anelka 31,492 The French soccer star recently joined Shanghai’s Shenhua SVA FC. Online Train Ticket Sales 23,971 For the first time, the Ministry of Railways announced that all types of train tickets would be available for purchase online before the 2012 Spring Festival. Wuhan Bank Bombing 20,159 An explosion in a Wuhan bank caused two deaths and 15 injuries in Wuhan, on December 1. BMW versus Mercedes 15,463 A f ight between two luxury car drivers after a collision. The fight ended with the death of the Mercedes driver. NEWSCHINA I February 2012

Shenzhen Police Yin Qiang & Wang Hongxiang Both jumped into freezing sea water to save a woman who tried to commit suicide in Rizhao, Shandong Province, while Wang was shooting wedding pictures for Yin and his fiancée.

The local force was caught using police buses to transport the children of police officers to and from school while elsewhere in China unsafe, overcrowded school buses had caused numerous child deaths.

W ho ’s No t?

On

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Photo by Jiang Shenglian/CFP

politics

Students read aloud in a rural elementary school classroom in Dongxiang County, Gansu Province

Poverty Alleviation

The New Poor

China plans to substantially raise its official poverty line, declaring over 100 million people officially poor. The move is a step in the right direction, but more problems need to be addressed if the country is to achieve its poverty reduction goals By Yu Xiaodong

O

n November 29, 2011, a meeting focused on poverty alleviation chaired by Premier Wen Jiabao convened in Beijing to lay out China’s plans to reduce poverty over the next 10 years. One major decision at the meeting was to raise the poverty line to an average income of 2,300 yuan per year (US$363 per year, or $1 per day), an 80 percent increase on the 2010 cut-off point of 1,274 yuan (US$200) per year. China has long championed its achievement in reducing the number of Chinese living in poverty from 150 million in 1978 to 26.9 million in 2010. Indeed, rapid economic growth has helped millions of people rise above the breadline, but it is widely understood that the scale of poverty is substantially underestimated due to what some have called an artificially low poverty line.

Low Standards

When China first adopted the idea of a na-

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tional poverty line in 1985, the line was set at 200 yuan (US$31) a year, and adjusted annually based on inflation. In 2001, China raised the standard to 865 yuan (US$136), and by 2010 the line had increased to 1,274 yuan (US$200). According to official data, China had 26.88 million rural people, or 3 percent of the total rural population, living below the poverty line by the end of 2010. It is worth noting that the national poverty line only applies to the rural population, who constitute most of China’s poor, whereas cities can set their own poverty lines. Currently in Beijing, an urban household with a monthly per capita income of less than 5,760 yuan (US$900), 4.5 times the current national poverty line, and 2.5 times the proposed new poverty line, is regarded as living in poverty. For a long time, the national poverty line has been criticized for its failure to reflect the country’s economic development and rising standards of living. For example, while the

poverty line has increased by 6.37 times from 200 to 1,274 yuan between 1985 and 2010, per capita GDP has increased by almost 35 times (from 858 to 29,940 yuan, or US$135 to US$4,700) during the same period of time. While in 1985, the 200 yuan was 50.3 percent of the annual per capita income for rural people (397.6 yuan, or US$62), the 1,274yuan level in 2010 was only 21.5 percent of the average rural income. Equivalent to US$0.55 a day, the current standard falls well short of the international standard accepted by the World Bank of US$1.25 per day, and is lower than in many developing countries. For example, with a per capita GDP of US$1,162, about one-fourth that of China’s, Vietnam’s poverty line in 2011 was about US$1,500, roughly 18 percent higher than that of China. It is believed that 150 million Chinese are living on less than US$1.25 per day. By raising the poverty line to US$1, officials estimate NEWSCHINA I February 2012


Number of population under poverty line

in millions (percentage of total population in parenthesis) According to China’s current standard According to World Bank’s standard 800

652 (65)

700 600 500 400 300 200

280 (31.3) 152 (15.1)

100 1981

85 (9.5)

200 (8.49) 42 (3.4)

1990

26.1 (2)

1998

135 (10.4)

2004

26.9 (2)

150 (11.2)

2010

According to China’s new standard (128 million)

Source: The National Bureau of Statistics and the World Bank

that the number of Chinese people living in poverty may more than quadruple, to reach 128 million. The new Chinese standard will still fall short of international standards, but officials argue that based on the Chinese yuan’s purchasing power according to the World Bank, the new poverty line is actually equivalent to US$1.80, 44 percent above the international baseline. However, as the government pledges to eliminate absolute poverty by 2020, recognizing the scale of poverty is but one step forward, and many argue that several key changes are needed for China’s poverty alleviation strategy to be effective.

New Strategy

The immediate implication of the raised poverty line is that it will require a substantial increase in financial outlay. According to Professor Kang Xiaoguan from Renmin University, poverty relief aid will need to increase by four to five times. For many, current poverty aid has lagged behind China’s rapid economic development. According to official data, poverty relief expenditure by both central and local governments increased from 12.75 billion yuan (US$2bn) in 2001 to 34.93 billion (US$5bn) in 2010, amounting to an annual increase of 11.9 percent. In the meantime, GDP and government revenue has increased by an average of 14.9 percent and 20.1 percent every year. According to statistics released by the Poverty Alleviation Office of the State Council, NEWSCHINA I February 2012

poverty alleviation expenditure by the central government increased by 21.25 percent from 22.27 billion yuan (US$3.5bn) in 2009 to 72 billion (US$11bn) in 2010, the largest increase in recent years. But at the meeting no clue was given as to whether or not the increased numbers of poor will mean a further increase in aid in the future. For many experts, an equally important aspect of the 2011 meeting was the reform of the poverty aid system. When the national poverty aid system was established in 1985, the State designated 331 counties as officially poor, and distributed poverty aid to county governments, who were responsible for the implementation of poverty alleviation efforts. In 1994, the number of poor counties increased to 592. Such a system made sense in the 1980s when poverty was often prevalent across entire counties. However, with rapid economic development and the widening income gap between rich and poor in recent years, the population in poverty has become scattered across different regions and different demographics; it is now estimated that less than half of the population in poverty live in State-designated poor counties. In the meantime, since the status of being a “poor” county means increased aid revenue, some counties lack an incentive to implement serious poverty alleviation efforts, and have actually been competing for the status. Under heavy criticism, the central government adjusted its approach in 2001 with the

launch of an Integrated Village Development Project (IVDP) in parallel with poor counties. In total, 148,000 poor villages were singled out, and aid funds were distributed directly to lift each village out of poverty. However, this approach has been far from successful. According to a report by the 21st Century Business Herald newspaper, the IVDP aims to invest 2 million yuan (US$313,400) in each village, but many villages have received less than one fourth of that. According to a 2008 report by the National Bureau of Statistics, only 19.5 percent of poor households have received support from poverty alleviation projects of any sort. The 2011 meeting marks a shift from the IVDP approach. Instead, it launches a new approach which focuses on “poverty concentrated areas.” According to the strategy, 11 designated areas across 680 counties, mostly mountain regions or areas vulnerable to geological disasters as well as Tibet, ethnic Tibetan areas in Sichuan, Yunnan, Gansu and Qinghai provinces, and three prefectures in southern Xinjiang, will be made the utmost priority in China’s poverty reduction efforts in the coming years. For many experts, China’s poverty reduction approach has focused too much on production and development-oriented projects, while input into social welfare has been inadequate. According to Professor Wu Guobao from the Institute of Rural Development of the Chinese Academy of Social Sciences, over 70 percent of all poverty aid is spent on infrastructure projects such as roads and irrigation, and less than 30 percent is spent on providing basic protections such as livelihood, education and medical services. At the meeting, Premier Wen Jiabao promised a more balanced approach and pledged that a rural pension scheme will be extended to cover the country’s expansive rural regions. President Hu Jintao also gave a speech during the meeting, outlining China’s poverty alleviation goals for 2020, which is to remove absolute poverty and ensure compulsory education, basic medical services and housing. For many, with the widening gap between the rich and the poor, it has become critical to correct the underestimation, as the living conditions of those in poverty have slid in comparison with the general living conditions of the population at large, a phenomenon that could pose both an economic and political risk to China’s development. 

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cover story

Sinking Feeling Overexploitation of water resources, unrestricted shaft mining and environmental degradation have all made land subsidence one of the most pressing hazards in the country, but overlapping areas of jurisdiction have hamstrung government attempts to combat the problem. NewsChina lifts the lid on this snowballing crisis

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NEWSCHINA I February 2012


NEWSCHINA I February 2012

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cover story Subsidence Crisis

Taking Responsibility The scale and range of China’s subsidence has left various branches of government at a loss as to who should take the lead in combating it

By Wang Yan and Qian Wei

A

s early as 2005, Zhang Zuochen, a researcher with the Hydrological Geology Environment Department of the China Bureau of Geological Research revealed during an interview with Science and Technology Daily that “in China, over 50 cities have encountered land subsidence, amounting to a total area of over 94,000 square kilometers.” Recent research shows that land subsidence continues to plague ever-increasing areas of land, with the three major trouble spots being the Yangtze River Delta, the North China Plain and adjoining areas of Shanxi and Shaanxi provinces. According to two reports released by the China Geology Research Bureau, previously isolated subsidence cases in the North China Plain have gradually connected into a whole; over 10,000 square kilometers of the Yangtze River Delta region have seen land subsidence of over 200 millimeters in the past three decades. Last year, vast sinkholes opened without warning across the nation in both urban and rural areas. However, Chinese scientists and policymakers have thus far failed to take decisive action, partly because this growing problem has a host of various causes, each falling

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under the jurisdiction of one or several different government bureaus.

Water Depletion

On the North China Plain, Hebei Province has become particularly vulnerable to land subsidence in recent years. News of sinkholes has begun to spread quickly online, with netizens citing rapid urban expansion since the 1970s as the reason for major subsidence in Cangzhou, Hebei, the average land level of which has dropped 2.4 meters in recent years. According to an online report, due to severe land subsidence, a three-story building in the Cangzhou Renmin Hospital had only two stories remaining above ground after only two years of operation. In 2009, the sinking building was finally torn down and replaced with a decorative fountain. However, critics argue, decisions like this are part of the problem. Groundwater in Hebei Province is among the most depleted resources in China, which has put it at the greatest risk. During the State Council’s Eleventh Fiveyear Plan period (2005-2010), Cangzhou’s economy boomed, pushing the region into Hebei’s top three in terms of GDP growth. A glittering new high speed railroad (HSR)

Within five months, over 20 incidents of land subsidence occurred in Tongliang County, Chongqing because of water depletion

NEWSCHINA I February 2012


Photo by Lian Xiao

station, an eight-lane highway, and countless new architectural projects are testament to this economic renaissance. However, rapid expansion has also left Cangzhou with a severe water shortage typical of the new boom towns on the North China Plain, a narrow strip of loess north of the Yellow River. This relatively small region’s underground water reserves sustain the tens of millions inhabiting the north’s three major megacities: Beijing, Tianjin and ShijiaNEWSCHINA I February 2012

zhuang. Cui Yinglong is the water resource department director for the Cangzhou City Water Management Bureau. Now in his forties, he still recalls flooding in his hometown, though he told our reporter that he hadn’t experienced a flood since his boyhood. The situation is not limited to Cangzhou. Since the 1980s, almost all rivers on the North China Plain have dried up completely. Shen Yanjun from the China Academy of

Sciences showed our reporter satellite maps of the plain in the 1980s and in 2010. Where once ran brown torrents of earth-rich water, now stark white lines crisscross the parched landscape. In Cui Yinglong’s opinion, massive dam projects are the main culprit in north China’s water crisis. Shortly after 1949, the founding year of the People’s Republic of China, the government decided to build water conservancy facilities to curb flooding and

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Subsidence Flashpoints China’s industrial belt is the worst affected area so far

Illustration by Wu Shangwen

“struggle against nature” according to the vision of Mao Zedong. Over 2,000 dams and reservoirs were constructed on the North China Plain alone. The Hutuo River is an example of the misguided overexploitation of vulnerable water resources. From its source in the Taihang mountain range in the plain’s west, it formerly ran all the way to the eastern seaboard, passing through Cangzhou before flowing into Bohai Bay. However, two massive upstream reservoirs, Huangbizhuang Reservoir with a storage capacity of 1.2 billion cubic meters and Gangnan, with a storage capacity of 1.5 billion cubic meters, essentially hold back the river’s entire water supply, reducing it to a trickle upon reaching Hebei’s provincial capital Shijiazhuang. The river no longer even reaches Cangzhou. While natural factors such as reduced precipitation also contribute to occasional dry spells, it is human activity that has led to the current prolonged drought in Cangzhou. The expansion of the city and the fast development of both farming and other industries has meant the population of Shijiazhuang, capital of Hebei, has swollen from 300,000 in 1950 to 10 million in 2011, and rising living standards have led to further depletion of water resources as urban centers require ever larger volumes of fresh water. Industry also plays its part. As the city attracts more and more industrial concerns, particularly oil refineries and chemical plants, and its dwindling rural areas struggle to boost productivity, water consumption has rocketed. According to Shen Yanjun, the average annual water consumption of agricultural operations on the North China Plain would require annual precipitation of 870 millimeters. The current average annual precipitation is no more than 500 millimeters. “Using underground water for irrigation is neither wise nor sustainable,” Shen told our reporter, “farmers only care about immediate profits, and watersaving technology has limited appeal. People are still wedded to well-digging and flood irrigation.” Now, locals are beginning to count the cost of getting rich quick. Railroad tracks have had to be elevated to keep them horizontal; newly constructed roads lie visibly above old roads that have already subsided and the concrete platforms surrounding wells in suburban Cangzhou have descended into the earth.

Fu Xuegong from Cangzhou Hydrological and Water Resource Monitoring Bureau told NewsChina that since the late 1960s, a wave of well digging swept the whole North China Plain. Statistics show that from 1974 to 2000, the average depth of Hebei’s groundwater decreased by one meter per year due to over-extraction. Other cities in Hebei Province and the neighboring cities of Tianjin and Beijing are also recording similar data. (Please see NewsChina issue 23; Running on Empty). Since 2005, Cangzhou has initiated some water conservancy measures. Some 300 wells were forced to close between 2005 and 2008, and by the end of 2009 the average underground water level had increased by 18 meters. However, having lost some 80 meters since the 1970s, there remains a long way to go.

Groaning Mines

At around 3:40 AM on July 25, 2010, Hu-

“Farmers only care about immediate profits, and water-saving technology has limited appeal. People are still wedded to well-digging and flood irrigation.”

tang Village in Loudi, Hunan experienced what residents initially assumed to be an earthquake, that shook people from their beds. Villager Liu Dilin recalled he heard a “groaning” beneath the earth, and felt the building around him crack as he escaped into the street. The land directly beneath Liu’s village had NEWSCHINA I February 2012


Photo by CFP

Due to sudden land subsidence, part of the Shanxi Renmin hospital collapsed on August 12, 2010

caved in. Over half of Hutang Village, an area of 1.5 square kilometers, had sunk into the earth, and 800 people had lost their homes. Long meandering fissures cracked the farmland, draining the village’s paddy fields, themselves dotted with gaping sinkholes. According to local government spokesperson Li Qin, over 160 houses were completely destroyed, and 400,000 square meters of paddy fields drained, ruining the entire crop. A 15 kilometer-long irrigation channel and 10 kilometers of road were also destroyed, and 47 ponds and 210 wells dried up instantaneously. During an interview with the State-owned Xinhua News Agency, most of the villagers blamed the incident on nearby gypsum mining, a link later confirmed by scientists. The mine, with an average annual output of 200,000 tons of gypsum, is located just a few kilometers from Hutang Village, and was shut down immediately after the incident. It is no coincidence that the provinces worst affected by land subsidence, Shanxi, Hunan, NEWSCHINA I February 2012

Henan and Hubei are also home to the majority of the country’s mining operations. In Shanxi Province, which has China’s largest proven coal reserves, 6,000 of the region’s 20,000 square kilometers of mining operations have experienced major subsidence. According to a report carried out in 2010 by Outlook Weekly, the entire population of Tongjialiang Village had to relocate after a massive sinkhole opened up directly under their homes. In Loudi, Hunan, according to local official statistics, mine-related subsidence has affected 355 square kilometers of land, home to 100,000 people. Some formerly bustling villages have been turned into ghost towns by sinkholes. Subsidence caused by mining also brings a litany of related problems including groundwater contamination, toxic gas leaks and soil erosion. These issues have led to social problems, with petitioners demanding financial compensation for the loss of their livelihoods becoming a common sight outside local gov-

ernment buildings. According to Outlook Weekly, some provinces including Shanxi, Hunan, Hubei and Henan have initiated a system of “environmental rehabilitation funds.” Shanxi Province earmarked 1.8 billion yuan (US$283m) in 2007 and 2008 to relocate some 230,000 people who had lost their property as a result of subsidence or underground water depletion due to mining. However, the government remains committed to treating the symptoms, not the cause of subsidence.

Urban Tunnels

In urban regions, underground construction is also causing subsidence. The microblog boom in 2010 has fueled more widespread concerns, with subsidence now reported almost instantaneously by Internet users, taking the debate to the national level. A host of rumors have sprung up as to the origin of China’s mega sinkholes, ranging from the reasonable (earthquakes) to the fanciful (extraterrestrial

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activity, precursors to Armageddon in 2012). The government’s hand was forced, and media reports explicitly explaining the link between groundwater depletion and subsidence began to circulate in the State media. Subterranean real estate, subway lines, and various tunnels developed rapidly. The earliest city to explore the development of underground urban space was Shanghai, with an estimated 400 million square meters below the city already developed. In Beijing, the total area of underground real estate increases by 3 million square meters annually, and the city has set itself a target to explore a total of 90 million square meters of underground space by 2020. According to statistics, from 1995 to 2008, the number of Chinese cities with subway lines jumped from two to ten, with a total length of 835 kilometers nationwide. A further 22 cities have broken ground on urban mass transit systems. Media reports since 2006 have hinted at a link between the expansion

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of subway networks and subsidence in Beijing. City planners are also increasingly being held responsible for urban subsidence. Existing underground spaces have been remodeled without consultation or a complete understanding of the potential consequences. Shi Zhongwei from the Hubei Land Resources Bureau told our reporter that the management of urban underground space is very chaotic. Various government departments and institutes have overlapping interests encompassing land resources, urban planning, construction, telecommunications, power, public security, hydrology, environment protection, national defense, and cultural heritage protection, making it almost impossible for a single entity to be held responsible for mismanagement. The response has been to turn a blind eye to unrestricted urban expansion beneath street level, and a hugely inefficient, top-heavy urban planning bureaucracy. Huazhong University of Science and Technology released a research paper in July 2010

in an attempt to clarify the Ministry of Housing and Urban Rural Development’s Urban Underground Space Development Management Regulations. Legal clauses relating to underground space construction can also be found within China’s Urban Planning Law, Land Management Law, People’s Air Defense Law, Mineral Resource Law, Construction Law and Environmental Protection Law. With even lawyers baffled as to the chain of responsibility in urban planning, observers are now calling for a comprehensive overhaul of China’s land management and urban planning systems. It is precisely this dilemma – which branch of government can take action to resolve what is becoming a national crisis – that has stalled policymakers and government departments across the country. While bureaucrats struggle to assign responsibility, unrestricted mining, urban development and agricultural intensification continue to open ever-larger sinkholes beneath communities across the country. NEWSCHINA I February 2012


Photo by Xinhua

Angulinao Lake, once the largest inland lake on the North China Plain dried out completely in 2010 after years of serious drought and underground water exploitation

Subsidence Crisis

Water, Water, Anywhere When rapid economic development and ever-increasing urbanization collides with widespread water depletion and mismanagement of remaining water resources, land subsidence looks set to continue plaguing both China’s urban and rural communities By Yu Xiaodong and Qian Wei

NEWSCHINA I February 2012

S

even years after calls to establish a national groundwater monitoring system by China’s top scientists, the State Council finally approved a project to establish a network of 20,000 observation points to monitor underground water levels across the country on October 28, 2011. The long-expected project is intended to curb excessive and unsustainable exploitation of underground water resources, which has caused irreversible environmental damage. Among the most pressing problems is massive land subsidence across China, including the industrial hubs of of Bohai Bay, the North China Plain and the Yangtze River Delta, home to several of China’s biggest cities, including Beijing, Tianjin and Shanghai. It is estimated that out of 655 cities in China, more than 400 rely heavily on underground water resources. In the arid north, underground water supplies 65 percent of domestic water, 50 percent of industrial water and 33 percent of agricultural water.

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cover story Scientists have long warned of the potentially disastrous results of subsidence and water depletion and have called for leaders to curb excessive exploitation of underground water resources. However, due to the prioritization of economic development over environmental protection, no serious efforts have been taken to limit either the expansion of industry or urban growth. Currently, the central government caps the volume of available water resources on a regional basis. However, as big cities such as Beijing and Shanghai have initiated water conservation measures under their direct jurisdiction, smaller cities and rural counties have stepped up their exploitation of underground water. The result is uneven and widespread land subsidence, which has resulted in more than 200 regional groundwater depression zones across China. It is believe that only interprovincial cooperation in curbing underground exploitation can keep land subsidence in check.

Limited Success

Such efforts are already underway in cities on the Yangtze River Delta. Shanghai, for example, substantially reduced underground water exploitation by 20 million cubic meters in 2010. Shanghai has more to lose from subsidence than most Chinese cities, as it is largely built on unstable former wetlands. Between 1921 and 1965, downtown Shanghai subsided by 1.69 meters, a rate that, if allowed to go unchecked, would have put parts of the city below sea level by 1999. Starting in the 1990s, Shanghai established a citywide network of underground water monitoring stations with 326 observation points. The city government also strictly implements controls on underground water exploitation and began to pump water back into the local table in late 2000. As a result, according to official data, the city only subsided by 2.18cm between 1966 and 2010. In 1999, Shanghai also launched a joint initiative with its neighboring Yangtze River Delta provinces of Jiangsu and Zhejiang, both of which are equally vulnerable to land subsidence. Like Shanghai, both Jiangsu and Zhejiang started to limit their exploitation of underground water from 2000. By the end of 2000, annual exploitation in Zhejiang had dropped by almost 90 percent from 150 million tons in 2000 to 16 million tons in 2010. Similar measures have been taken in Jiangsu, resulting

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Left: Underground water sources are exploited for farming in Nanhe County, Hebei Province. Right: Villagers in a rural area of Shijiazhuang city rely on underground water

in a reduction in the rate of land subsidence of 60 to 93 percent, according to various government agencies.

The Arid North

It is hoped that the establishment of a national monitoring network will lead to similar measures in other regions. However, the limited success in the Yangtze River Delta may prove difficult to duplicate in other regions, especially the North China Plain, home to China’s most severe land subsidence problem. Unlike the Yangtze River Delta, mouth of one of the world’s biggest rivers, the North China Plain lacks almost any major water sources. In the past few years, there have been attempts to address the issue of limiting underground water exploitation in Beijing, Shijiazhuang and other major regional cities. But with 200 million residents and rapid economic growth driving up demand, the government is less than keen to curtail development. According to agricultural expert Shen Yanjun from the Chinese Academy of Sciences, the solution may lie in curbing usage of groundwater in agriculture, which accounts for 70 percent of consumption. “Currently, there are no economic incentives for farmers to curb water usage through the initiation of more expensive practices such as sprinkling

or trickle irrigation,” Shen told NewsChina. Shen’s suggestion is to simply increase the price of water, especially that of underground water. Despite potential economic dividends, however, any price hike would drive up food prices and, consequently, inflation, posing both an economic and a political risk, something the government is desperate to avoid. “Water conservation in agriculture is a complicated but important systemic project, which has long been ignored,” Shen said. “For example, the Ministry of Agriculture is only responsible for farming, having no stake in water conservation.” The government’s solution, conversely, seems to be various inter-basin water diversion projects. The South-to-North Water Diversion Project, kicked off in 2010, will divert water from the water-abundant Yangtze River Basin to the increasingly arid Yellow River Basin, and has been named the ultimate solution to north China’s water shortage by government planners. The project includes three major routes and a dozen smaller projects amounting to a water diversion project bigger than any attempted in human history. Its first phase, scheduled for completion in the next five years, will involve an investment of 140.5 billion yuan (US$22.2bn) and the mass relocation of 400,000 people. It is estimated NEWSCHINA I February 2012


Photos byXinhua (left ) and CFP (right)

Land Subsidence in Central Shanghai (mm per year) that water from the Yangtze River will reach Beijing in 2014. Attached to this estimation is the hope that with sufficient surface water supplyies, the capital will curb its underground water exploitation. Many experts have questioned the wisdom of this approach. For example, Wang Hao, academician of the Chinese Academy of Engineering argues that the government should address water conversation before resorting to costly diversion projects which pose serious environmental and social hazards, as well as fueling interprovincial conflicts of interest. For example, after the completion of a water diversion project in 2004 that diverted water from the Yellow River to Qingdao in coastal Shandong Province, the exploitation of underground water continued as it remained cheaper than relying on the diverted supply. “Ultimately, the price of underground water needs to rise,” said Wang.

New Threats

With the scarcity of water resources yet to be addressed, China also faces new challenges in regard to land subsidence, which refuses to go away. As Chinese megacities grow, the concentrated construction of skyscrapers has become another major factor that leads to uneven land sinking, a more complicated problem than NEWSCHINA I February 2012

Total number of skyscrapers in Shanghai

Source: The Journal of Hydrological and Geological Engineering, Vol.35:4, 2008

overall subsidence, which has even seen the bottom stories of buildings sink entirely into the earth. An even more pressing problem is posed by global climate change, which is already taking its toll on China’s economy. In recent decades, annual rainfall on the North China Plain has fallen from 600 millimeter (23.6in) to 300-400 millimeters (11.8-15.7in), exacerbating drought. In tandem with the drop in rainfall, the rise in sea level has led to increased flooding on the coast. According to the data released by State Oceanic Administration, the sea level in China has risen by up to 20 centimeters (7.87in) in the past three decades.

While China’s hinterland dries out, its coast is slowly being reclaimed by the ocean. Another alarming possibility is effect of climate change on the country’s river basins, which some experts hypothesize could even cause the water-rich southern provinces and the Yangtze River Basin to gradually dry out, endangering the effectiveness of various water diversion projects. While experts and special interests lock horns over these issues behind closed doors, however, Chinese people from the rural hinterland to the prosperous coast, are having to learn to live with the environmental cost of China’s economic miracle.

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politics Inner-Party Democracy

The Chosen Ones Delegates to the Communist Party’s 18th National Congress in September may include a far greater proportion of ordinary workers, but the delegate selection process still lacks the crucial element of democracy By Li Jingrui

T

wice every decade, the ruling Communist Party of China (CPC) puts months and years of speculation to rest at its National Congress, where it unveils its flagship policies and personnel changes, and outlines its overall direction for the next five years. The 18th Party Congress, to be held in September this year, is no exception. While speculation abounds as to the likely outcomes of the meeting, new guidelines published by the CPC Central Committee on November 1 have focused attention on the selection of delegates to the congress. Claimed as an effort to enhance internal CPC democracy, the document has ignited debate from both inside and outside the Party.

Working Class Slant

Normally, Party congress representatives are selected on the basis of a quota system whereby representatives are distributed across government organizations and State-owned enterprises in different sectors such as industry, agriculture, commerce, science and technology, culture and so on, according to predetermined proportions. Other factors are also taken into consideration, such as gender and ethnicity, and there are quotas for delegates who have excelled in sports. During the selection process for the 17th Party Congress in 2007, it was first suggested that delegates from “new economic and social organizations,” a euphemism for private businesses and NGOs, should be included, in order to “reflect social reality.” Although among 2,213 delegates, only 30 came from the private sector and NGOs, their selection was seen as a sign of a changing tide. Among these delegates was Liang Wengen, founder and president of heavy machinery giant Sany Group, whose personal assests of US$10.8 billion landed him the top spot on China’s 2011 rich list, compiled by Forbes equivalent Hurun. In 2011, Liang became a member of the CPC’s Central Committee,

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its highest governing body. For many, the admission of a private entrepreneur into CPC inner circles confirmed the Party’s openness to the private sector, particularly wealthy entrepreneurs. However, in the guidelines for the selection of delegates to the 2012 Party Congress, mention of “new economic and social organizations” is nowhere to be seen. Instead, the guideline emphasizes that the ratio of delegates from the “frontline of production” should be increased. It particularly stresses that the percentage of ordinary manufacturing workers should account for at least 10 percent of all delegates, whether from State-owned or private factories, or migrant workers. The guideline suggests that no less than 32 percent of the delegates should come from the “frontline,” with Party cadres and officials making up the balance. According to official data, 75.7 percent of the delegates to the 16th Party Congress in 2002 were officials, and that number decreased to 71.6 percent at the 2007 congress. The emphasis on increasing the presence of ordinary workers at the congress has given rise to various interpretations. Some overseas commentators have called the move an indication that the CPC is leaning toward the political left, in order to reassert its socialist, working-class credentials. However, experts both inside and outside the Party have dismissed this interpretation. “For the measures to be really meaningful, the line should be drawn between officials and non-officials, rather than officials and ‘frontline’ workers, as many officials can claim that they work at the frontline,” Professor Wang Guixiu from the Party School of the CPC Central Committee told NewsChina. According to Wang, four senior officials from the Central Party School selected as congress delegates five years ago were all classified as “frontline” representatives. Also, according to the guideline, the total number of delegates to the 18th Party Con-

Party delegates attend the 17th National Congress of the CPC, October 2007

gress is to increase to 2,270 from the 2,213 who attended the last meeting five years ago. It is believed that the increase is in order to accommodate additional frontline delegates, so there will be no need to reduce the number of Party officials. Therefore, despite the percentage rise in working class representation, the actual number of officials present at the congress will not decrease. The overall number of delegates has more than doubled since the 8th Party Congress in 1956, which was attended by 1,026. According to officials, the increase is in response to the growth of the Party membership. The number of Party members nationwide has increased from 8.5 million in 1956 to the current 80 million. But experts argue that the sheer number of delegates dilutes the significance of their discussion and participation. “At the 8th Party Congress in 1956, delegates could freely sign up to take the floor, and many were enthusiastic about voicing their opinions,” Professor Ye Duchu from the Central Party School told NewsChina. “But NEWSCHINA I February 2012


Photo by AFP

now, with the number of Party delegates more than doubled, the best opportunities for the delegates to express their views are the panel discussions, which are often chaired by the Party secretary of their province, and naturally make the delegates feel uneasy,” he added.

Need for Elections

For Professor Wang Changjiang, also from the Central Party School, the crux of the matter does not lie in the distribution or overall number of delegates, but in the way in which they are selected. “The key is how they become delegates. Even if the selection guideline required all delegates to be ordinary workers, it would be meaningless if all of them were appointed [rather than democratically elected].” Currently, most Party congress delegates are appointed by Party committees at different levels. In recent decades, efforts have been made to encourage competition in the delegate selection process to promote inNEWSCHINA I February 2012

ner-Party democracy. In the run-up to the 17th congress five years ago, for instance, it was required that 15 percent of delegates be elected through multi-candidate elections, a 5 percent increase on 2002. However, the guideline issued on November 1 indicates no further development in this direction, with only a passing remark that “more than 15 percent of the delegates” be selected by multi-candidate elections. Despite much rhetoric about inner-Party democracy in recent years, the changes made to the delegate selection process for this year’s congress are hardly a step forward. Observers believe that a breakthrough in this regard is unlikely to come at a high-profile national meeting; reform is more likely to be effective when implemented locally. Examples of such reform are already in progress, albeit with a lack of transparency. Following the release of the guideline, the Beijing Municipal Party Committee announced that within five years, it would

achieve the separation of the “three powers.” An issue that has been under debate for some time within the Party, China’s separation refers to the powers of decision-making, implementation and supervision, as opposed to the separation of executive, judicial and legislative powers in Western countries. The Beijing authorities were the first to explicitly announce their official intention to carry out the scheme, rekindling hopes for meaningful inner-Party democracy. However, despite its promise to introduce “a scientific system of power distribution and supervision,” the Beijing document provides no detailed information as to how the separation of the three powers will be achieved, or what kind of corresponding institutional reform will be needed. For experts like Wang Changjiang, the key to internal democracy lies in the election of Party congress delegates. “The fate of inner-Party democracy still hinges on whether the right to vote can really be exercized,” he said. 

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society School Bus Accident

Overloaded, Underfunded 21 people were killed when an overloaded school bus collided with a heavy coal truck in a small village in Gansu Province in November, the deadliest of a recent spate of school bus crashes. NewsChina investigates By Xie Ying, Zhu Shiqiang and Wang Weibo in Gansu

S

hi Hongchun was smoking in the janitor’s lounge of a local brickyard when he heard the local kindergarten’s school bus passing by, blaring the same nursery rhyme as it did every day, before a deafening crash brought the music to an abrupt halt. Fearing the worst, Shi and his colleagues rushed out of the brickyard to the highway. To their horror, they found the yellow school bus, belonging to Little Doctor, the local kindergarten, had collided head-on with a heavy coal truck. “The children were in floods of tears, screaming for their parents,” Shi said. “We carried them out of the bus and lay them side by side, but we could not distinguish who was alive and who wasn’t before the ambulances arrived.” The accident happened on November 16, 2011 in Zhengning county, Gansu Province. According to subsequent reports from the area, 21 have so far been declared dead, including the driver, a teacher and 19 children, with another 40 seriously injured. Speeding and dangerous driving are rife on Gansu’s perilous highways, meaning fatal traffic accidents are not out of the ordinary. But the disproportionately high death toll in this case was attributed to the fact that the school bus was carrying several times its legal limit of passengers. According to a local report into the incident, the bus was crammed with 62 children and a teacher, far exceeding its capacity of nine adult passengers. Less than one month later, another overloaded minibus, this one carrying 32 chil-

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dren, overturned on an expressway in Hebei Province, leaving more than 10 seriously injured. Media reports said the minibus was designed for only six passengers. The latest case was a school bus crash in Jiangsu Province on December 12 that left another 15 children dead, and while reports claim that overloading played no part in the incident, speculation has been rife.

“Every day the children were crammed into that tiny minibus. I often saw their faces squashed up against the windows.”

Overload

The parents of the Gansu bus crash victims told the media that overloading is a common practice on local school buses. “Every day the children were crammed into that tiny minibus. I often saw their faces squashed up against the windows,” Ren Xiaoli, the aunt of a child injured in the accident, told NewsChina. “My nephew often cried and begged us not to let him take the bus to kindergarten.” According to media reports, the heaviest casualties were suffered in Yujiaju village where Ren Xiaoli and her nephew live; nine local children were killed, and over 30 were injured. Han Xianlin, the village’s Party secretary, told NewsChina that 720 villagers from Yujiaju were working in remote cities, leaving a total of more than 270 children in the care of grandparents who were generally too weak to accompany the children to schools a long distance away. “We had no other choice, since Little Doctor is the only kindergarten in the area,” said He Huquan, the grandfather of a child killed in the accident. In 2008, the Gansu provincial authori-

ties began implementing a new policy of centralizing education resources in rural areas. When several other kindergartens in the region closed, Little Doctor became the only one within a dozen mile radius. Every day, the kindergarten’s four minibuses would shuttle between 12 villages, transporting more than 700 kids to and from school. The driver killed in the accident, Yang Haijun, was responsible for transporting over 100 children along three routes. The accident happened along the last route, which was the longest and also served the largest number of children. “It was not as if Yang chose to overload the bus, but he had to get all the children to the kindergarten before deadline (9:20 AM), no matter how many were on board,” said Xu Shengrong, Yang Haijun’s brother-in-law. “He had been fined twice for overloading, but neither the kindergarten nor the traffic police had taken any effective measures to solve the problem,” he continued. “Given that it takes around 40-50 minutes for each bus to complete a single route, it would be impossible to get all the children NEWSCHINA I February 2012


Photo by Yang Yanmin

The scene of the Gansu accident, November 17, 2011

to school in one day without overloading,” argued Li Junping, brother of the kindergarten’s headmaster Li Jungang. In order to maximize the number of children carried, the kindergarten had all four minibuses refitted, with the original seats replaced by long benches. “The children had to hold each other tightly when sitting on the benches, with some wedged into any crevice they could find,” a parent told NewsChina.

Predicament

The kindergarten has come under fire as a result of the deadly accident. Police detained headmaster Li Jungang on the day of the crash, and three days later he was formally arrested for illegally refitting the shuttle buses and for his legal responsibility concerning the overloading. Gao Hongxia, Li Jungang’s wife, defended her husband to the media. “We spent nearly 500,000 yuan (US$73,500) on the school NEWSCHINA I February 2012

buses alone,” she said. “We really couldn’t afford any more.” Li was heavily in debt; his creditors ranged from rural credit cooperatives to individuals, with the interest rate of some loans reaching as high as 5 percent. According to Gao, Li Jungang built Little Doctor in 2004 with 80,000 yuan (US$12,000) he borrowed from his friends and the bank. With only five buildings and four teachers, the kindergarten took in 58 children in its first semester. “Most of the kids were from villages far away and we had to spend another several thousand yuan on a second-hand minibus to get them here,” Gao said. By 2007, Little Doctor had expanded to 20 school buildings housing nearly 400 students. In early 2011, Headmaster Li Jungang acquired Lele, the only other kindergarten in the county, which went bankrupt due to heavy compensation paid to the victims of a previous school bus accident.

Yet despite the expansion, Little Doctor, whose students are mostly from poor families in the area, had continually failed to make ends meet, according to Gao. “The farthest village on the bus route is over 12 miles away from the kindergarten, and we only charged each student 80-200 yuan (US$12-30) for one semester’s transportation, which would not even cover the cost of gas,” Gao said to NewsChina. Gao Hongxia told the media that Li Jungang had been applying to the local government for financial assistance since 2009, to no avail. “We would not ask the government for help unless we were at the end of our rope,” said Gao.

Management

Frequent school bus accidents across the country have aroused public concerns about the safety of school buses, and the controversies were pushed to a peak when the

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media reported that a Chinese domestic automobile manufacturer had donated 23 school buses to Macedonia. “If we are capable of making safe school buses, but why are our own children still riding in ramshackle minibuses?” questioned one netizen. According to statistics from the Ministry of Education, there were nearly 140,000 kindergartens and 280,200 primary schools in China by the end of 2009, holding more than 36 million students. Given that 50 percent of students have to take school buses (the rate is 54 percent in the US), the country needs around 300,000 60-seat school buses. Zhang Qiang, business manager of Yutong Buses, the Macedonian school bus donor, told the Economic Observer newspaper that school buses made up less than 3 percent of the company’s total sales volume (40,000 units) last year. She Zhenqing, vice secretary-general of the China Road Association’s bus department, told the media that there are currently more than 200,000 vehicles regularly transporting students, but most of them are retrofitted second-hand cars, minibuses and agricultural trucks, even motorbikes. “According to my estimates, only 1,000 [of the 200,000 vehicles] are up-to-standard school buses,” he said. “School buses are specially designed for students of different ages, so they are naturally more expensive than ordinary vehicles,” She Zhenqing told the paper. Current market data show that a school bus costs around 300,000-400,000 yuan (US$46,000-61,500), 10 times the price of an ordinary minibus. The additional cumulative costs of gasoline, maintenance and the hiring of professional drivers push the total even higher. The State-run People’s Daily has warned that a growing number of overloaded or unlicensed “school buses” are running the roads in the rural hinterland and around migrant worker communities on the outskirts of big cities. The paper cited official statistics that in east China’s Jiangxi Province alone, over 44 percent of the 611 vehicles used to transport primary and middle school students were unregistered with government authorities and over one-third of the nearly 4,000

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Photo by CFP

society

A school bus with a legal limit of 11 passengers was seized by traffic police carrying 34 children, Hubei Province, November 23, 2011

“We would not ask the government for help unless we were at the end of our rope.”

vehicles used for transporting kindergartners children were unlicensed. To prevent more safety risks, the State Council issued on December 12 a draft regulation on school bus safety which is now open to public opinions for one month. Under the draft, many local governments have launched strict clampdowns on unlicensed and refitted school buses, only to find many schools were forced to close down when their shoddy buses were impounded. “The traffic department told us that we are not allowed to rent buses to transport the students, but we really cannot afford a school bus [that would meet requirements],” said Wang Yonglong, the headmaster of a private primary school in Fujian Province. His school’s register lists more

than 300 children living in remote villages, whose parents have migrated to other parts of the country for work. “We have had to suspend classes since November 21, and I have no idea when the school can reopen,” he continued. It is not an isolated case. The media in Chongqing Municipality revealed that a local private school had to suspend classes for one week to avoid the crackdown. A teacher from a school in a mountainous area also told the media that his students had to spend one hour walking to school since the local government banned him from using his private car to shuttle pupils back and forth. As long as heavy goods vehicles continue to wreak havoc on the roads, the government cannot risk allowing overloaded, unsuitable school buses to take children to and from school. But with a severe lack of funds and a lack of other options, it is unlikely that remote schools will be able to solve their transportation woes on their own. “Management does not mean an outright ban. It means a long-term system covering many aspects, including designing technical standards for school buses, issuing supporting policies for private schools, and clearly defining the areas of responsibility of each relevant department,” said She Zhenqing of the China Road Association.  NEWSCHINA I February 2012


Photo by Getty

Teenage Escorts

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Sex for Snacks In cities like Shanghai and Chongqing, a handful of high school girls have been exposed working as professional ‘escorts,’ apparently by choice. NewsChina looks into the motivation among young, educated girls to voluntarily walk the streets

owntown Shanghai never sleeps, with the bright neon of its countless nightclubs shining into the night. The dance floor of Richbaby in the northeast of the city throbs with young people, among them short-skirted local girls out to catch the eyes of male patrons. Suddenly, three girls carrying schoolbags are singled out and asked to leave by the club’s security. “No under 18s,” they are told. The Shanghai police began tightening enforcement of formerly lax age restrictions in the city’s teeming nightclubs after an embarrassing case of child prostitution broke in early November 2011. The case involved 20 or so high-school girls, including one 13 yearold, some whom had been acting as pimps for NEWSCHINA I February 2012

By Liu Yangshuo and Li Guang their classmates. Police claimed that a sting operation had “unmasked a prostitution ring of high school students who provide sex services to selected clients in the manner of ‘escort girls’ in Japan.” Han Konglin, the prosecutor responsible for the case, blames the breakdown of fami-

lies for this apparently voluntary engagement in prostitution among teenagers, though, by his own admission, only a few of the girls came from what Han termed “broken homes.” Of the more than 20 girls charged, one was from a single parent family, one was adopted, and three were “abused or spoiled by their parents,” said Han. Other critics have pointed to materialism as the root cause, and with new cases of teenage prostitution, many involving government officials and celebrities, being exposed by China’s active online media, this embarrassing social trend looks set to continue.

Imported Trade

Escort services sprung up in Japan shortly

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after World War II as an offshoot of the mainstream sex trade. Women were paid to “accompany” male clients, their services centering on dinner conversation, but later including sexual services. Since the 1980s, escort services began operations in Taiwan, Hong Kong and, most recently, the Chinese mainland. While the commercial sex trade is nothing new in China, escort services remain an unfamiliar cultural phenomenon. According to social researcher Tong Xiaojun of the China Youth University for Political Sciences, the fact that most female escorts don’t fit the social stereotype of sex workers as poor, uneducated or disgraced women has led to confusion. Tong and her research team have spent two years investigating escort services on the Chinese mainland. “It is quite difficult to locate escorts, and even when we do, it’s even harder to interview them,” Tong told NewsChina. “Those we meet are neither poor nor social outcasts. On the contrary, they seem no different from other girls.” Among the 16 escorts Tong’s team has interviewed, Xiaoba left the deepest impression. A high school student from a white collar Chongqing family, Xiaoba was a docile and obedient child in the eyes of her father, a police officer, and her mother, a doctor. However, Xiaoba told Tong that outside of the home, she “went wild,” running with street gangs and drinking. “She looked simple and shy… I could not imagine such a girl could be a sex worker,” Tong told our reporter. Even more incredibly, Tong added, her engagement as an escort stemmed from nothing but a love of eating. “She could not resist stealing glances at the snacks on the table during our interview,” Tong said. “Yet she refused snacks I offered her, and even asked us to remove them from the room.” The girl told Tong she was so addicted to eating that she had to spend about 100 yuan (US$15) every day on snack foods, an expense her parents’ 20 yuan (US$3) weekly allowance came nowhere close to covering. By her own admission, she found “easy money” working as an escort. At 17, Xiaoba met another escort who introduced her to the trade. “How ridiculous that she would sell herself to buy snack food,” remarked Tong. Like Xiaoba, most of the girls involved

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Left to right: Young couples check into a hotel in downtown Shanghai, November 12, 2011; a girl in a

in the November case in Shanghai were not from poor families, according to Han Konglin, the prosecutor. “They did it just to get more money for shopping and socializing,” he told NewsChina. “My parents both work at State-owned enterprises and earn regular pay and they give me pocket money every month,” another escort, Xiaowen, testified in court. “But the money was far from enough to cover my daily expenses on clothes, jewelry, having fun and eating.” “A regular salary comes too slow for me,” she said. “And I can’t stand the toil of a regular job.”

Sex and the City

Face-conscious Shanghai has been rocked by the escort case, with local media desperately trying to reassure citizens that underage prostitution is “isolated” and generally involves economic migrants. “Even if some [escorts] are locals, they must have been led astray by bad outsiders,” an anonymous academic told local media, claiming that the percentage of the city’s criminals who are non-locals, according to official statistics, has exceeded 70 percent since migrants began to flood into Shanghai in 2000. However, these reassurances were bluntly contradicted by police, who revealed that most of Shanghai’s professional escorts are lo-

cally-born girls from well-to-do families. “Escorts are generally not forced into the trade. They do it just to satisfy their material desires,” Tong told NewsChina. “Consequently, escorts are more common in urban areas, especially those enjoying an economic boom.” His words were borne out by Xiaoyun, a 20-year-old escort who had left her hometown for Shanghai two months before. “Everything here is new to me. In Shanghai, I can get things that I could not even dream of in my hometown in the northeast,” she told NewsChina. Visiting her apartment, our reporter saw shelves of high-heeled designer shoes and boots. Just several days before, Xiaoyun told NewsChina, she had added another 1,000 yuan (US$147) pair of boots to her collection. “I do escorting once or twice a week and get 200 yuan (US$30) a time. I only call my clients after I run out of money,” Xiaoba told Tong Xiaojun. “Each time I would tell myself, ‘This is the last time. I’m done with this.’ But I always do it again. I simply cannot control myself … The thought of running out of money makes me crazy,” she continued.

Twisted Values

In addition to money, sex itself can be a motivator for young girls, according to Tong Xiaojun. In November 2008, a research project conducted by the Shanghai Family Planning NEWSCHINA I February 2012


Photo by Sun Xiaoxi and IC (Right)

popular Shanghai bar, November 11, 2011; a girl resists arrest during a police raid, Chongqing, August 2, 2007

Education Center targeting 1,700 students in five middle schools showed that nearly 60 percent of the respondents said they would be open to “intimate contact” with the opposite gender “in a natural way,” a euphemistic description of sexual contact. In the survey, over 10 percent of high school students admitted that they had had “intimate contact” with the opposite gender, including penetrative sex. “I cannot imagine a girl going without any sexual contact until her twenties,” Maomao, an escort in Guangzhou, told a Guangzhoubased researcher, quoted in the local media. Now a law student at a prestigious university, Maomao has been an escort since high school. “I felt happy about my first deal, the boy was so cute,” she reportedly told interviewers. Tentative statistics seem to suggest that Maomao is not alone. In 2010, a professional team of sex researchers from Hong Kong surveyed 3,000 Hong Kong high school students with an average age of 15 about their sexual experience. 32 percent of respondents said they would have sex with a stranger for money, 137 of whom admitted working as escorts. The survey coincided with a local scandal whereby a local teenager placed an online ad offering to sell her virginity for HK$10,000 (US$1,285). Typical of such social debates in China, the Shanghai escort case has led to a war of words online. While some netizens have chosen to NEWSCHINA I February 2012

moralize, calling the case “a shame,” others have defended escorts, arguing that they have every right to “earn a crust.” “Don’t you feel ashamed that you are still dependent on your parents in your twenties?” asked Maomao, the Guangzhou-based escort, when asked whether or not she felt ashamed to trade her body for money. Like many other escorts, Maomao prefers the term “freelancer.” “Come on, it isn’t that shocking. It is just a job, and I can earn 10,000 yuan (US$1,568) a week,” she told researchers. “But look at my schoolmates. They are doing a dead-end job with meager wages. How miserable they are.” “Escorts choose their trade, They’re not forced into it,” explained Tong Xiaojun. “In some cases, they pick a client who resembles their imagined Prince Charming. This helps dispel any sense of shame.” Although many police officers and public prosecutors dismiss escorts as “teenage prostitutes,” claiming that there is no legal classification in China for an escort, a poll conducted by Tong’s team in early 2010 found that 72 percent of 1,800 respondents believed that working as an escort was fundamentally different from working as a prostitute. “Imagine a girl has already made 2.4 million yuan (US$3.5m) at 24, simply from working as an escort since she was 17,” remarked one

netizen in an online forum, describing their own “envy” of such wealth. In the opinion of critic Xu Ben, this increased tolerance of materialism as a justification for prostitution is symptomatic of China’s social decay. An old Chinese idiom disparaging those tolerant of perceived “immoral” behaviors claims that such people “sneer at paupers, not prostitutes.” In 2009, China Youth Daily launched a survey entitled “What are we striving for?” which was completed by nearly 10,000 persons. “Houses and cars” topped the priorities list with 53.5 percent, followed by “a better life” (43.7%) and “a good job” (23.9%). In another survey carried out by www.ycwb.com, a popular news website based in Guangzhou, 66 percent of respondents said they would take “any short cut” to satisfy material cravings. “Shame would work only in a morally binding society,” commented Xu. “But at present, this society is losing its traditional moral binding. Too many people are lost in their exclusive pursuit of material gains they have confused with ‘happiness’ and ‘success.’” “When these so-called ‘successful’ adults are violating traditional ethics, the degeneration of the young is guaranteed,” he continued.  (In order to protect identities, the names of “escorts” interviewed are aliases)

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society Post-90s Generation

Rational Radicals Are China’s much-maligned Internet generation in fact pioneering a more sophisticated and progressive social and political culture? By Yang Di, Wan Jiahua and Yuan Ye

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yping “post-90s,” the name given to Chinese people born after 1989, into any search engine in China, will produce a flurry of tags, including: “brain dead,” “rebellious,” “non-mainstream” (a codeword equivalent to ‘freakish’) and “Internet creature.” Ever since the early 2000s when the concept of “post-80s writers,” mostly used for marketing purposes, became a literary fad in China, mass media immediately began to pigeonhole and categorize every social group imaginable. This trend shows no signs of slowing, with each new so-called demographic quickly ascribed their own nickname, regardless of accuracy or relevance.

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The much-maligned post-80s generation (nicknamed the ‘Me, Me, Me generation’ by some Western academics), instead of rebelling against their forebears as their parents had done, rounded on the young, those born after 1989. Accusations of materialism and self-obsession became favorite bugbears, with the fondness among China’s post-90s generation to post glamorous pictures of themselves online accompanied by slang-heavy blog posts particularly cited as evidence of inferiority. This intergenerational warfare has become so pronounced that “post-90s” has become a derogatory term in certain circles. However, things have been changing fast

as the young and “fragile” boys and girls of the 1990s are growing into participants in China’s social, economic and even political life. The country’s labor force has already begun to see an influx of post-90s workers, while the public and political spheres are both being rocked by an injection of new minds. 16-year-old Chen Yihua from Guangzhou surprised the nation in May 2011 with a low-key protest against a retrofit of the city’s subway. Chen held a placard at various locations and started a petition, becoming a standard-bearer for socially conscious youngsters. While his protest would have been barely noticed in the West, Chen’s NEWSCHINA I February 2012


Photo by Zhen Hongge

“When we discuss social issues, we usually avoid extremes. We focus on the issue we are discussing and analyze it from different angles. Personally I don’t like things to be over-interpreted, whether the interpretation is conservative or radical.”

NEWSCHINA I February 2012

courage to stand up against the city authorities was seen as revelatory in China, where any public protest is undertaken at great personal risk. More recently, a debate between a group of post-90s students over an attack by a Peking University professor against a news magazine also caught the attention of the media. Professor Kong Qingdong, a respected essayist who since gaining recognition in the 1990s has become known for his unbending support for the Communist Party and North Korea, issued a profanityladen refusal of an interview with the outspoken, centrist Southern People Weekly in early November 2011, calling the magazine a “traitor publication.” Kong also posted his refusal on his microblog, using even more abusive language to make his point. Kong’s behavior attracted a degree of support among conservatives but aroused even more criticism. Re-posted and commented thousands of times, even the State-run Xinhua News Agency ended up criticizing Kong for his profanity and urging Peking University to pursue “administrative punishment.” Meanwhile, on Kong’s campus, large numbers of undergraduates weighed in on the debate. Open letters were posted online by students, urging the university to punish Kong for his misconduct. Others supported Kong’s opinions, criticizing both Southern People Weekly and the anti-Kong camp. The campus debate soon expanded to college forums across China and was also reported in the media. Most interesting to observers was the polarization of opinion in a generation formerly dismissed of being of one mind, as well as the often eloquent and profound observations voiced by students.

Internet Generation

Born in 1990, Zhang Furui’s given name is a transliteration of the English word “free.” Zhang’s father was born in the 1960s, at the height of the catastrophic Cultural Revolution (1966-1976), and as a result of his experiences prized individual freedom above all. Zhang Furui, on the other hand, was born during the salad days of Reform and Opening-up, an experience which has profoundly affected his personal values. Now working at an international firm in Beijing, Zhang recalls his first encounter

with the Internet at age nine, alongside millions of his peers taking their first steps along the information superhighway. According to Post-90s Generation Under the Internet, a report jointly released by the Communications University of China and GroupM Knowledge Center, a Shanghai-based think tank, 26 percent of the post-90s generation started to use the Internet at roughly the same time. The report concludes that over 60 percent of the post-90s generation use the Internet on a daily basis. In 1999, there were 4 million Internet users in China. The total number reached 485 million in 2011, according to the China Internet Information Center. Among children between the ages of seven and 15, more than 70 percent have used the Internet at least once, according to research by the China Youth & Children Research Center. Over half of the urban families with kids have a private Internet connection. To Zhang Furui, using the Internet has become as natural as eating or sleeping. It has also diversified his worldview. Shielded from the political turmoil of his parents’ and grandparents’ generations, Zhang has discovered a different sort of upheaval – the information revolution. Exchange of slang, writing styles, views on fashion and grooming and the development of a unique cyber culture has, according to researchers, profoundly influenced the way Chinese youngsters perceive themselves. Despite fears among older generations of brainwashing or the “lowbrow” influence of Internet culture, social commentators argue that most Chinese Internet users display considerable skepticism towards the World Wide Web. Zhang Liwen, a sophomore at Tsinghua University, told our reporter that she constantly questions what she reads online. “It’s difficult to verify the authenticity of some news reports. The convenience of the Internet goes hand-in-hand with an information overload,” she said.

Rationality

The post-90s students’ debate surrounding the Kong Qingdong abuse case has brought the viewpoints of the younger generation to the attention of their elders. Indeed, observers have remarked that the level of debate seems far higher than in social discussions of the 1980s, a phenomenon as much to

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do with the greater availability of relatively open forums as with education. “When we discuss social issues, we usually avoid extremes. We focus on the issue we are discussing and analyze it from different angles,” said Zhang Ye, a junior at Tsinghua University. “Personally I don’t like things to be over-interpreted, whether the interpretation is conservative or radical.” Chen Beite was one of Kong’s supporters. A senior at Tsinghua University, Chen was born in a small county in Jiangxi Province. Her father is a doctor and a Communist Party member who Chen told our reporter likes reading the nationalist State publications the Global Times and Reference News. Chen told NewsChina that public opinion was twisted by media manipulation after Kong posted his verbal abuse on the Internet, talking in terms of a conspiracy against him. Her most scathing criticisms, however, are those who chose to attack Kong “for the sake of it,” and out of the context of the actual debate. When asked about her view on China’s current situation, Chen’s opinions roughly correspond to those of the Party mainstream, that “most people can feed themselves and live a comparatively good material life.” This view is by no means niche among others of her generation. Another student from Tsinghua University, speaking on the condition of anonymity, told NewsChina that student unions, all of which are backed by the Communist Party, are particularly strong advocates of the “better off than we were” argument. Chen Beite believes that action, rather than words, is what is needed to engender change for the better. She has volunteered to “refute rumors” on the Internet, an activity critics dismiss as censorship, and joins in with social activities organized by fellow students. 21-year-old Zhou Wen from Beijing University is also a self-defined social activist from the other end of the spectrum. One of his roommates supported Kong in the abuse case, but Zhou chose not to argue the point with him face to face. “I can still ask him to pick up take-out for me,” he joked. Zhou had most of his opinions posted on the online forum of the university. He also voted in the recent local National People’s Congress election in the university recently, despite many fellow students dismissing the

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Photo by IC

society

Nat (left) and Yumi of Beijing Kwan-yin Clan Graffiti Studio pose with their works. Graffiti and skater culture are growing in popularity in China

ballot as a “waste of a walk.” Having grown up in relative prosperity, children of the post-90s generation are also noted for being less optimistic than their parents. According to Zhang Ye, this also makes them less radicalized and prone to extreme viewpoints, and fosters tolerance, diversity and individualism. “Each individual faces more choices and possibilities. Individualism is reflected in every one of the post-90s,” said Zafka Zhang, founder of China Youthology, a consultancy and think tank researching contemporary youth culture. “The post-90s generation started to use the Internet in middle or high school, which gave them greater access to information than previous generations,” said Zhang. “Therefore, they learned to form an identity at an earlier age.” “The most impressive thing I found on the post-90s youth was their rationality,” said Zhang Hui, vice-general manager of Beijing Horizon Indicator Information Consulting. Zhang’s company conducted a survey of more than 2,100 post-90s youths in five major cities in November 2011. They were surprised that though over 60 percent of those surveyed, self-defined as

“anti-Japanese” most did not agree with “non-rational” activities like “boycotting Japanese goods.” “When it comes to discussions of serious social topics, they are very rational and mature,” Zhang told our reporter. “How the Post-90s View Society,” a recent survey jointly conducted by NewsChina and the Internet portal Sina, indicates that 49 percent of those surveyed “are not satisfied with current social environment but would remain rational and actively adapt to society.” When facing completely opposing views, more than 60 percent of the voters chose to “respect others but also adhere to their own independent views.” Zhang Hui said that one hallmark of the post-90s is a strong belief in equal rights, and a tendency to be dismissive of those they perceive as having benefited from illgotten gains. The survey conducted by her company indicated that nearly 30 percent of respondents said their idols were people they knew personally, and that roughly the same number believed that endeavor is the key to success. Perhaps the post-90s generation isn’t as cynical as their detractors suggest.  NEWSCHINA I February 2012


NEWSCHINA I February 2012

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FEATURE The Year Ahead

Faces of 2012

As China moves into a new year and toward a new era of leadership, the nation will likely see a fresh set of faces take center stage in 2012. With change on the horizon, NewsChina picks out those likely to make waves in the worlds of politics, society, business, sports and the arts over the coming year

Leader-in-Waiting

Xi Jinping, Politician Expected to succeed President Hu Jintao as China’s top leader at the Communist Party’s 18th National Congress in September 2012, Xi Jinping is no doubt the top figure to watch in 2012. With slowing economic growth and an increasingly pronounced ideological divide within the Party in 2011, speculation has been rife as to the direction in which Xi is likely to steer China. Having governed China’s economically progressive east coast, some believe Xi’s experience at the forefront of China’s Reform and Opening-Up policy means he is likely to experiment with new ideas. However, others remain doubtful that he will lead the country in a sharply different way, as he has previously warned critics of China’s rise to “stop pointing fingers.”

Tweet Harmony

Charles Cao, Businessman Cao served as the chief financial officer at telecom giant SinaCorp from 2001, before becoming its president in 2005. Since the launch of its Twitter-like microblogging service Weibo in 2009, Sina has become the country’s most popular online media and social networking portal. Weibo is more tolerant towards free speech and negative news than other Chinese media, and is the soapbox of choice for many outspoken opinion-formers and activists. Sina’s recent addition of an instant messenger service and a search engine to its microblogging platform has put it in direct competition with China’s top two IT companies Baidu and Tencent. Having amassed 200 million registered Weibo users by August 2011, in 2012 Cao faces the threat of increased government censorship, as well as the challenge of finding a reliable profit model.

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Welcome to the Party

Liang Wengen, Entrepreneur-turned-Politician Founder of Chinese machinery giant Sany Group and number one on the Hurun China rich list for 2011, Liang was made a member of the Communist Party of China’s Central Committee in 2011. His political career began in 2007 when he was chosen as a delegate for the Party’s 17th National Congress, and four years later, he has become the first private entrepreneur to ascend to a top rank in China’s political hierarchy. Liang’s rise is widely interpreted as an effort to integrate private entrepreneurs into the Party, perhaps marking a change of strategy. It will be interesting to see how much influence Liang exercises on the committee in 2012. NEWSCHINA I February 2012


Market Watchman

Guo Shuqing Financier In 2010 and 2011, the world’s fastest growing economy has suffered from a gloomy market, taking an even deeper plunge than those struggling with debt crises and earthquake damage. Before taking up the leadership of the China Securities Regulatory Commission (CSRC) on October 29 2011, Guo was already well-known as an outstanding economist and veteran practitioner of China’s economic reform and financial operation, leading China Construction Bank to become the first State-run bank to go public and incorporate foreign investment. Within one month after taking office at CSRC, he launched a crackdown on insider trading on the capital market, and new initiatives mandating that listed companies share dividends with investors and that poorly-performing ones leave the market. NEWSCHINA I February 2012

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FEATURE

Patching Up

Zhao Baige Humanitarian As executive vice-president of the Red Cross Society of China, Zhao faced a tough test in June 2011 when Guo Meimei, a 20-year-old woman who claimed to have a close connection with the organization, was spotted showing off her various luxury items on the Internet. Heavily tarnished by the incident as well as subsequent scandals involving abuse of funds, the humanitarian organization saw a slump in donations from individuals in 2011. Before her appointment, Zhao, who has a PhD from Cambridge University, had worked as a senior official for China’s family planning program since 1989. She has pledged to learn a lesson from the Guo Meimei incident and to rebuild the reputation of the China Red Cross by improving transparency and communication with media.

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NEWSCHINA I February 2012


Back in Red

Jiang Wen Actor and Director Born in 1963, Jiang Wen is widely regarded as one of China’s most talented actors and directors. 2010’s Let the Bullets Fly, directed by and starring Jiang, became one of the most successful Chinese films of recent years and remained a talking point well into 2011. Han Sanping, director of the Mao Zedong biopic currently in pre-production, recently confirmed that Jiang would be playing the lead role in the film. With Han’s two previous communist nostalgia films The Founding of a Republic and Beginning of the Great Revival having disappointed moviegoers, critics will be keeping a sharp eye on Jiang in 2012. “I’m second to none when it comes to playing Mao Zedong,” he once claimed.

Sitting on a Fortune

Lou Jiwei Financier

Lou has been at the helm of China’s sovereign wealth fund, the China Investment Corporation, since it was established in 2007 to invest part of China’s foreign currency reserves. Before that, Lou had served as China’s deputy finance minister for 10 years, and has long been recognized as a core advocate of market economics. In an article in the Financial Times on November 27 2011, he expressed strong interest in the “underinvested” infrastructure sector in the US and Europe, citing future infrastructure investments of £200 billion (US$313bn) and US$2.2 trillion from the British Treasury and the American Society of Civil Engineers, and calling a potential Chinese involvement in foreign infrastructure a “win-win solution.” To the Stars

Wang Yaping Astronaut Following the success of China’s first-ever unmanned spacecraft docking mission on Nov 17, 2011, China is now considering sending a female astronaut into space for the first time. Two astronauts have been shortlisted for a place aboard spacecraft Shenzhou-10 on its 2012 mission, with Wang Yaping as the favorite to take the spot. Before her enrollment in the space program, Wang worked as an airfreight pilot during the Sichuan earthquake recovery efforts in 2008, and was also involved in “seeding” Beijing’s skies with iodine to ensure a cloudless Olympics. In addition to the usual stringent requirements for would-be “taikonauts,” China has also mandated that its first spacewoman must be married with children. NEWSCHINA I February 2012

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FEATURE

Climate Broker

Xie Zhenhua Politician Maintaining its title as the world’s largest emitter of greenhouse gas in recent years, China has played an increasingly significant role in the United Nations Climate Conference, particularly since December 2009’s meeting in Copenhagen. Xie Zhenhua, head of the Chinese delegation to the conference since 2007, has become the center of attention at the high-profile gathering of policymakers. His smiling face and frank, straightforward manner have made Xie a popular media figure. He will likely play a vital role in 2012’s climate conference, to be held in Doha, Qatar, where vital decisions will be made on the future of the Kyoto Protocol.

Solo Smash

Li Na Tennis Player When Li Na won the French Open singles title on June 4, 2011, China erupted with celebration. Not only was it the first time a player representing an Asian country had won a singles Grand Slam, but more importantly, it was also seen as a victory for the market-oriented overhaul of the old State-controlled sports training system. Born in 1982, Li Na began her tennis training at 8 years of age. In 1997, she joined the National Tennis Team and turned professional in 1999. In early 2009, Li quit the national team and the State-run sports system under an experimental reform policy for tennis players, which allowed her to choose her own coaching team, keep most of her winnings and pay for her own costs. The Chinese media made much of Li’s decision to fly solo. Her career has progressed rapidly ever since, making her a national hero. However, a dip in her performance in the latter half of 2011 has left many wondering if her success will continue into the coming year.

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NEWSCHINA I February 2012


Acid-Tongued Youngster

Jiang Fangzhou Writer and College Student One of the country’s youngest up-and-coming writers, Jiang Fangzhou, a senior at Tsinghua University, gained throngs of supporters on the Internet when her writing began to take on a more social and political tilt. By the end of December 2011, she had a fan base of 2.35 million followers on Weibo, China’s Twitter equivalent. Her open letter to Tsinghua upon the university’s 100-year anniversary in April 2011 provoked solemn reflection on China’s higher education system, and her recent lengthy commentary on China’s current state of affairs, which advocated government transparency, civil society and private ownership, had been reposted more than 50,000 times by mid-December 2011.

Giving it Away

Cao Dewang Philanthropist Having grown up in poverty, Cao built his billion-dollar autoglass company Fuyao Group from the ground up. Now in the process of establishing the Heren Charity Foundation, Cao has pledged to donate 70 percent of his shares in his company to the philanthropic fund, which will generate the majority of its revenue directly from the dividends of those shares. Cao, known for setting strict stipulations that ensure his charitable donations are put to good use, has declared he will have no involvement in the day-to-day operation of the US$538 million foundation.

Wireless Warrior

Cher Wang Entrepreneur Chairperson of smart-phone manufacturer HTC and known as the world’s most powerful woman in wireless, Wang and her husband Wenchi Chen topped Forbes’ Taiwan rich list in 2011. Daughter of the late tycoon Yung-ching Wang, she co-founded HTC in 1997, building cell phones and PDAs for brands like Compaq, O2 and Orange. HTC began to build its own brand in 2006, and launched the world’s first Android-based smart phone in 2008. As if that wasn’t enough, her other company VIA Technologies is the world’s third-largest semiconductor manufacturer after Intel and AMD. According to IT market research company Canalys, HTC, now partnered with Microsoft, beat Samsung and Apple to lead the US smart phone market in the third quarter of 2011. Wang has vowed to bring an end to Samsung’s dominance of the global market in 2012. NEWSCHINA I February 2012

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economy Illegal Commodities Exchanges

When Garlic Goes Rogue Chinese authorities have finally moved to clean up a mess of unregulated commodities exchanges which had proved a magnet to reckless speculators. Will the government finally loosen restrictions limiting private access to legal investment channels? By Sun Zhe

A

State Council statement released in late November 2011 vowing to clean up illegal equity and commodities exchanges came as a relief to Fang Yujun. Her life savings had been lost in a matter of days after she invested them in a bogus gold exchange, driving Fang to the brink of suicide. 53-year-old Fang, who runs a brick kiln in Hangzhou, Zhejiang, was initially reluctant to invest in the Weicai Precious Metal Exchange, but was worn down by a combination of sales agent persistence and the company’s assurances that she, a newcomer to gold futures, would be assigned a professional advisor. Having lost 60,000 yuan (US$9,453) in the stock market since 2009, Fang was ready to try her luck elsewhere. Guided by her advisor, Fang remained hesitant, but her caution didn’t prevent her losing more than 10,000 yuan (US$1,575) after only a handful of transactions. The exchange responded by offering her a “more senior” advisor to dig Fang out of her hole. The man, whose real name was never given to Fang, managed to shave a few thousand off her debt, convincing her there was still good money to be made in gold futures. Then her advisor informed Fang that he would only assist investors with more than 200,000 yuan (US$31,570) in investment capital. Afraid to lose her lifeline, Fang promptly sank all her savings into her account with the exchange. From that point, the Las Vegas ending to her story pretty much wrote itself. Fang’s advisor’s guidance typically ran counter to her interests, but played perfectly into those of the exchange, which charged 700 yuan (US$110) commission on each transaction. Out of her total losses of about 195,000 yuan (US$30,720), almost half went directly to the exchange.

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With a 15,000 percent leverage ratio, a failed investment meant a big chunk of her capital. As Fang’s losses spiraled, she would sit sleepless in front of her computer, obsessively checking the exchange’s trading figures (the exchange only closes for two and a half hours a day). When Fang finally cut her losses in October 2011, she had lost almost all her savings. The gold exchange, based in central Hu-

nan Province, was one of more than 300 exchanges greenlit by the local government before being allowed to proceed unregulated. Extensive speculation and frauds have been uncovered in many of these commodities exchanges. The State Council statement in November warned that, if left unchecked, corruption of commodities exchanges could have a knock-on effect in the wider economy, even leading to social unrest. The statement ruled that apart from the country’s two main stock exchanges, three commodities exchanges and one financial

futures exchange, no other entity is allowed to list new shares, offer centralized pricing or make markets, and that no more than 200 investors may hold stakes in a single traded

asset. Investors are also banned from reselling an asset within five days of purchase. The rules were aimed at numerous art and illegal futures exchanges launched over the past few years to soak up excessive liquidity in the commodities market caused by the central government’s trillion-yuan stimulus plan following the 2008 financial crisis, said Zhu Xiaodong, finance analyst with Orient Securities in Beijing. Tianjin Cultural Artwork Exchange, founder of more than 30 artwork exchanges across China, lowered the access threshold for art investment and attracted a swarm of investors by splitting the equity of artworks, such as paintings and jade sculptures, into a large number of small shares priced at 1 yuan (US$0.15) each, without a time limit on their resale. This decision was expressly designed to NEWSCHINA I February 2012


Illustration by Wu Shangwen

fore the model had spread to other luxury commodities, notably wine. With hardly any legal investment channels in China’s heavily State-managed marketplace, government tightening of investment in real estate, and global markets tumbling in the wake of the Great Recession, Chinese investors have been forced to find ever more unstable outlets for their money.

Futures Mania encourage speculation. For example, a painting by local artist Bai Genyan traded on the Tianjin exchange, inaugurated in early 2011, was worth 12 million yuan (US$1.9m) at its peak, meaning an average share price increase of 1,900 percent. Despite Bai’s paintings only averaging around 62,000 yuan (US$9,678) at auction according to a research report by Zheng Xinyao, deputy director of the China Association of Auctioneers, speculators have pushed their market price through the roof. However, as with almost all other artworks trading in these independent commodities exchanges the share price of the painting soon fell below 1 yuan, leaving thousands of traders trapped in the market, but not beNEWSCHINA I February 2012

Illegal futures exchanges have proven just as susceptible to fraud and mismanagement as commodities markets. In a market fraud case in late 2009, Longding E-commerce, an agricultural futures exchange in Rizhao, Shandong, gambled against traders with their own deposits, which eventually led to a collapse in the market. When traders attempted to cash out, they were rudely awakened to the artifice of digital wealth. After traders protested in front of a local government building, the exchange was bailed out and later resumed trading with impunity. Illegal futures exchanges, estimated to number more than 200 across the country, allow investors to speculate on commodities as diverse as garlic bulbs, mung beans, peanuts, pepper, ginger, cut flowers, vegetables

and even rabbit fur. While futures trading has typically been the preserve of seasoned, capital-rich investors, lower thresholds designed to draw in small-scale amateurs, who can purchase and resell hundreds of kilograms, rather than tens of tons, of commodities, has added volatility to illegal futures markets. With output and the market share of products traded on illegal exchanges too small to be fit for mainstream trading, prices are easy to manipulate, according to Wang Dong, an agricultural analyst with Dow Jones. “In the zero-sum game of futures trading, inexperienced small-time investors are doomed to be robbed by big players who are adept at manipulating the market,” said Wang. “Futures trading could easily become gambling,” he added. However, with approval for such exchanges resting at local level and no regulatory body in existence at any level, there is no barrier to launching an exchange beyond currying favor with local officials. Local governments, thirsty for revenue, continue to encourage the launch of new commodities exchanges. Zhu Xiaodong of Orient Securities anticipates that most of these illegal exchanges will eventually be closed down, as happened in the 1990s, when more than 40 futures exchanges were reduced to three after speculation destabilized markets. However, the question remains if, after these exchanges are closed down, the government will begin to loosen its strict restrictions on private investors. 

41


economy Reconstructing Kashgar

Securing the New Silk Road With the ancient oasis city of Kashgar now on track to become China’s latest Special Economic Zone, the city is on the brink of total transformation. But is it working from the best blueprint? By Wang Yan in Xinjiang

F

rom the air, Kashgar, a far-flung city in the western extremity of Xinjiang, appears as a few dim lights dotting the landscape below, in sharp contrast to the urban glare of China’s prosperous eastern metropolises. However, this could be about to change. The city that for millennia stood at the crossroads of Asia, linking Europe and the Middle East with imperial China via the ancient Silk Road, is experiencing a massive and irreversible economic transformation. In May 2010 the central government made the decision to set up Xinjiang’s first Special Economic Zones (SEZs) in Kashgar and Horgos. The announcement was followed in early October 2011 with a package of preferential policies for both cities granted by the State Council, China’s cabinet, including tax breaks, financial subsidies and a reduction in land requisition costs for investors willing to move into Kashgar. The central government has labeled Kashgar “a channel to access and explore foreign markets as a border crossing and transportation hub; a platform to promote cooperation with countries in Central and Southwestern Asia and Eastern Europe and a new economic engine for the whole Xinjiang region.” However, with most of the city’s ancient architecture torn down to make way for ambitious plans to stimulate economic growth, whether Kashgar can further sustain development without trampling on its cultural legacy remains in doubt. Vital Location Ethnic Uygurs make up over 90 percent of the local population in Kashgar, a city with a history of over 2,000 years. The gentle pace of life and the rich local Islamic culture are major tourist attractions and an important contributing factor to the city’s post-80s tourist boom. Kashgar has retained at least some of its rambling bazaars populated by locals swaddled in traditional clothing and seated on their donkey carts. The same cannot be said of the provincial capital Urumqi, which has in the last two decades metamorphosed

42

Bridge over Tuman River in downtown Kashgar

into a characterless sprawl like so many other Chinese cities, its bazaars and mosques either Disney-fied for visiting tourists or swept aside altogether to make space for shopping malls, apartment buildings and hotels. However, Kashgar is in danger of rapidly following in Urumqi’s footsteps; once home to an almostintact medieval metropolis and a perfect filming location to shoot The Kite Runner, Kashgar’s remaining old houses have been converted into tourist traps, and resemble tiny islets in an ocean of concrete and steel. A large part of the ancient city was bulldozed, and communities that had endured for generations were irrevocably split. China’s meteoric rise, coupled with the disintegration of the Soviet Union, has seen Kashgar become a crucial hub for China to develop cross-border trade with Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan, as well as shore up its borders with Afghanistan, Pakistan and India. According to official statistics, Kashgar’s total value of imports and exports reached US$1.6 billion in 2008. Zhao Huirong, researcher from the Institute for Russian, Eastern European and Central Asian Studies at the Chinese Academy of

Social Sciences told NewsChina that despite the relative poverty of Central Asian countries, they are vitally important for China’s economic security and social stability. “These countries share land borders totaling 3,300 kilometers with China, and their people have close ethnic and cultural ties with the Xinjiang region. So, social and political stability in these countries is of vital importance to China,” she said. “Central Asia is also rich in natural resources, and has become a key energy supplier to China,” said Zhao. So far, a Chinese-sponsored natural gas pipeline stretches 6,811 kilometers between Turkmenistan and China’s Guangdong Province in the south, running through Uzbekistan and Kazakhstan. In the next 30 years, Turkmenistan will provide 30 billion cubic meters of natural gas to China. According to Chen Xuguang, Party secretary of Kashgar, a China-Kyrgyzstan-Uzbekistan railroad and another line linking Kashgar with the port of Gwadar, Pakistan are both expected to break ground in the next couple of years. “In this way, the country’s energy transportation can be secured to a certain extent. With the supply of a large amount of underexploited oil reserves from NEWSCHINA I February 2012


Graph background by Xinhua, main photo by CFP

The East Bazaar, or the Mid-west Asia International Trading Market, is located at the northeast corner of Kashgar city

Central Asia, China’s oil imports from the Middle East and Africa will no longer be limited to shipping via the Straits of Malacca.” “In addition, Kashgar’s vital position along this route will also serve to propel its own regional development,” Chen added. Castles in the Sky After the announcement of the establishment of the Kashgar SEZ last year, the central government appointed Shenzhen, one of the country’s first batch of SEZs designated in the 1980s, as Kashgar’s official development partner. Apart from making investments and offering material and financial help, the partnership is intended to allow Shenzhen to share economic expertise and experience with Kashgar, including city planning and management. The Kashgar Urban Structure Framework Plan (2010-2030), a newly published blueprint for the future development of the city, was mapped out by the Shenzhen Urban Planning Institute in October 2010. According to the plan, Kashgar will focus development on, in order of priority, financial services, international trade, modern logistics, travel and culture, and new energy. NEWSCHINA I February 2012

Kashgar Exports and Imports (US$ millions) 2000

Export Import

28.31 2000

30

1660 2008

1600

24

1200

18

800 400

9.3 2000

8.75 2001

41.8 2000 1999

217.3 2003

2000

2001

62.21 2005

914.59 2010

5.71 2007

1.17 2010 2002

2003

2004

2005

2006

2007

2008

2009

12 6

2010

Source: Kashgar Region Economic & Social Development Annual Statistic

Guo Xiangmin, an expert on urban planning and management from Shenzhen, participated in drafting the city plan, and is a passionate advocate for its proposals. According to Guo, tourists attracted by Kashgar’s rich heritage, the city’s unique geographic location and enormous volumes in materials transfer will continue to be the key driving force for the development of the city. “Cam-

els were major tools on the ancient Silk Road, and today, we will use trucks, trains and international flights to connect the city with the outside world,” he told our reporter. In Chen Xuguang’s eyes, Kashgar lies not merely between China and Central Asia but also between China and the world. “Due to its position almost exactly in between Beijing and Paris, Kashgar could someday be-

43


economy come a useful stopover between China and Europe and, in turn, a workable international financial hub,” Chen told NewsChina. Patrick Fan, CEO of Kashgar Development and Investment Holdings, a joint venture between Kashgar’s government and CITIC Carbon Asset Management even called Kashgar “China’s future Singapore.” Others have touted alternative growth models based on cities as diverse as Dubai and Los Angeles. However, more pragmatic observers than Kashgar’s starry-eyed urban planners see reorienting the city into an international financial hub as little more than a pipe dream. Ma Yu, director of Foreign Investment at the Chinese Academy of International Trade and Economic Cooperation, pointed out that both transportation restrictions and lack of potential markets are both massive obstacles, saying Kashgar still needs time to negotiate with Urumqi, the capital city of Xinjiang, for “international port” status, with Urumqi unlikely to relinquish its own paramount economic influence in the region to a provincial rival. Moreover, with international financial hubs in Hong Kong, Shenzhen and Shanghai already well established, for Kashgar to gain a foothold would require a massive economic and financial boom unprecedented even in China’s history. Challenges Behind the grandiose planning lies an unforgiving reality. Sitting on the edges of the Taklamakan Desert, Kashgar is in a constant battle with drought. Because of the dry climate, salts and other alkalis have saturated the surrounding land. Desertification on the peripheries of the oasis is exacerbated by deforestation for use as lumber and fuel. The bigger Kashgar’s urban sprawl becomes, the more deeply these problems affect its residents. Knife-edge climatic conditions and the specter of a city reclaimed by the desert are unlikely to appeal to investors from China’s well-heeled east. However, environmental challenges pale in comparison to the potential tensions between the ethnic Uygurs and the Han people (China’s ethnic majority, who remain a minority in most areas of Xinjiang) when it comes to investor confidence. Two incidents, labeled terrorist attacks by the authorities, occurred in Kashgar on July 30 and 31 2011, leaving many Han and Uygurs dead, and unnerving investors. Yu Jianxin, a Kashgar airport official, told NewsChina that passenger numbers plummeted 20 percent immediately after

44

July 30. Xinjiang already has a reputation in the rest of China as a hotbed of anti-Han violence. Local Uygur people are also complaining about tightened security controls and excessive police monitoring. Sidelined During our investigations, NewsChina obtained information indicating the existence of an alternative blueprint for Kashgar’s development, drawn up by academics, which offered a startlingly different vision of the city’s future. According to Wang Ning, director of the Economic Research Institute at the Xinjiang Academy of Social Sciences in Urumqi, her team undertook a lengthy research project into the most promising development model for Kashgar, presenting their conclusions to the city authorities in early 2011. Wang’s team proposed that tourism be preserved as Kashgar’s pillar industry, supported by the development of modern agriculture, manufacturing and service industries in the local area. Finance and insurance, the priority industries of the eventual SEZ development plan, were both reduced to facilitative roles in Wang’s proposal. Wang Ning told our reporter that she favored making Kashgar a world travel destination on the basis of its reputation and rich

culture. A renovated old town, continued innovation in architecture and the development of an indigenous ethnic art scene could all be offshoots of the city’s tourist industry, which, in its current state, Wang describes as “woefully undeveloped.” “I think tourism offers the easiest and fastest road for Kashgar. Once the tourism market matures, other industries will catch up,” Wang told our reporter. “Other sectors, such as export-led manufacturing, require preexisting market exploration. Neighboring countries’ unstable political situations stifle such exploration.” “We compiled a detailed industrial development framework, yet Shenzhen did not take our suggestions,” Wang said, “It might be because we approached the issue from different perspectives. Shenzhen is an industrialized city, and it naturally emphasizes manufacturing, high-tech and finance. Becoming a financial center is all very well for cities like Shanghai, but it is too early for Kashgar.” Uncertain Future Hot on the heels of the announcement of the Kashgar SEZ, investors, merchants and businessmen, smelling profit, rushed to the region to seek investment opportunities. Land prices have boomed, with housing in the central town area going from 2,600 yuan NEWSCHINA I February 2012


china

bynumbers

Existing railway line

1.8bn

Planned railway line Frontier port

US$

Cities in southern Xinjiang

The combined 2011 third-quarter net profit of China’s big four airlines, Air China, China Southern Airlines, Eastern Airlines and Hainan Airlines, 36% of the total net profit of airlines worldwide.

Capital city of Xinjiang

Source: International Air Transport Association/Q3 Reports of the four airlines

Illustration by Wu Shangwen

34%

(US$400) per square meter in 2009 to over 5,000 yuan (US$790) per square meter at present, putting prices far beyond the reach of local urban residents, who have an average annual income of 10,000 yuan (US$1,800). However, most locals remain optimistic. Muhammad Shawutihaji, a grocer in the East Bazaar where almost all the 4000 stands are owned by Uygur locals, believes the establishment of the Kashgar SEZ is a good thing for his business. “We will see more tourists and we will sell more,” he told the reporter. Mula Dilija and Najibula, both Kashgari Uygur students studying at the Central University for Minority Nationalities in Beijing, are also happy to see their hometown boom. “As long as Kashgar develops with cultural protection as a priority, I am completely for it,” Najibula told our reporter. “Though it’s vital that the government thinks about offering skills training to those Uygur people who have lost or will lose their farmland to city expansion or infrastructure construction. They need to have the means to survive,” he added. The content of the proposed development plan, however, remains long on economics and short on cultural preservation. With central city planners in absolute control, all Kashgar’s residents can do is watch and wait to see what form their city’s future will take.  NEWSCHINA I February 2012

Percentage of Chinese employees who are “seriously considering leaving” their jobs, a 16 percent rise since 2004. The growth rate is much higher than the US rate of 9 percent, and lower than the average 13 percent in major European countries.

49

CFLP HSBC

The China Federation of Logistics and Purchasing’s (CFLP) measurement of China’s Purchasing Manager Index (PMI) for the manufacturing sector in November, the first time it has fallen below 50 points since March 2009. The HSBC PMI index, mainly for China’s private SMEs, also hit a three-year low. The figures indicate a contraction in the business sector.

Source: Mercer

Source: China Federation of Logistics and Purchasing/HSBC

68% The share of real estate in total assets of an urban household, which equates to about US$111,000 in 2010. The annual after-tax income of an urban household stands at about US$14,000 in 2010, and 80 percent of Chinese consumer financing goes into mortgages.

-44% Composition of assets in an urban household in China Investment in stock, insurance, funds and T-bills:22%

and Cash sit 10% o p De

Real Estate 68%

Source: Citibank / Tsinghua University

The decrease in the average share price on China’s stock market by December 13, 2011, when compared with June 14, 2001, the end of the last market boom. However, capitalization is eight times that of ten years ago. Source: Financial China Information & Technology

45


international Asia-Pacific Trade Union

In it to Win it? As the US asserts its leadership in the TPP, an Asia-Pacific trade agreement, analysts in China question whether or not to join the negotiating table By Li Jia

W

hen the US prepares to hitch up its trade wagon to a new part of the world, it tends to mean big changes not only in that region, but in the global economy as a whole. Keen to keep the US center stage in the changing economic landscape, President Obama and Secretary of State Hillary Clinton have recently set their sights on the Asia-Pacific region, which the latter recently described as “the world’s strategic and economic center of gravity” for the 21st century. A topic that has topped the pair’s agendas on recent trips is the Trans-Pacific Partnership (TPP). Originally an agreement between New Zealand, Singapore, Chile and Brunei, members are currently negotiating the entry of six additional countries including the US. The TPP would have likely remained low-profile were it not for recent US talk of building the “high standard, next generation” agreement into a new global trade union. Clearly, the TPP is a major part of what Obama has described as “US re-engagement” in the Pacific region after 10 years of focus on “security issues” in the wake of 9/11. However, as it attempts to wheel itself back into the Pacific marketplace, the US is finding that much has changed during its 10-year dormancy in the region. While it previously occupied the bulk of overseas trade in major Pacific economies like Japan, South Korea and the ASEAN bloc, it has now been replaced by China as the most important trade partner in all three. Add to that a list of other co-operative initiatives in the works between the region’s countries, including a free trade agreement between China, Japan and South Korea, and the US finds itself somewhat out of the loop. In that context, recent US enthusiasm for the TPP has been perceived both inside and outside China as an attempt to balance out China’s growing influence in this region, and

48

has predictably raised hackles in Beijing. “The approach that Washington has adopted in promoting the pact [TPP] runs counter to its aim of strengthening mutual trust and ironing out differences in the Asia-Pacific region,” ran an editorial in the English edition of the Global Times, a Chinese State-owned newspaper. Complaining aside, however, Chinese analysts are divided over what is to be done about the US trade power-play in the Pacific.

World’s Biggest Market

In economic terms, the US stands to benefit greatly from increased involvement in the TPP. In 2010, the Asia-Pacific market accounted for 61 percent, 72 percent and 37 percent of total US exports of goods, agricultural products and private services respectively, according to a White House press release on November 12, 2011. However, as US Trade Representative Ron Kirk explained to Congress in December 2009, the almost 200 preferential trade agreements already existing in the region had contributed to “a significant decline in the US share of key Asia-Pacific markets over the past decade.” Currently grappling with unemployment and a general economic downturn at home, the US has high hopes for the pact, which, once fully established, will be the world’s largest free trade area. The TPP also boosts the US ambition to push rules-based economic integration in the region, a strong message repeatedly sent by Obama, Clinton and Kirk. In the 1990s, the US led APEC in setting out a blueprint for open and free trade and investment in the region by 2020, known as the Bogor Goals, which it wanted to be implemented “comprehensively and compulsorily,” said Wang Yusheng, a former Chinese senior official at APEC. Despite progress over the past 20 years, neither the plans nor the US leadership in their implementation have gone as well

“The negative effect of the TPP on China’s role in Pacific economic integration has already been felt.”

as expected; meaningful development has been hampered by a lack of legally enforceable commitments and APEC’s willingness to make allowances for differing rates of development in its member countries. The US had all but given up on the effort: “That dream,” remarked President Obama, “seemed very far off in the distance.” It appears that the time has come for a revival. Viewed from a long-term strategic perspective, though, the US’ biggest potential gain from the TPP becomes more obvious. On the sidelines of November’s APEC meeting, the nine members announced the outlines of the agreement aimed to “set a new standard for global trade,” and in her speech at APEC, Clinton said that economic growth “goes to the central question of values.” Clinton’s rather direct comments clearly express an intention both to extend the TPP’s influence beyond the Asia-Pacific region, and to use the organization to expand the US ideological battleground.

The China Factor

Ramping up a bold economic movement in China’s back yard, the US must have been prepared for complaints from Beijing. In recent years, the Obama administration has gotten involved in the South China Sea territorial disputes and consolidated its military presence in the region, causing speculation in international and Chinese media about the US intention to “contain” China’s challenge NEWSCHINA I February 2012


Photo by Xinhua

US President Barack Obama meets with Chinese President Hu Jintao during the APEC Summit in Honolulu, Hawaii, November 12, 2011

to its global dominance. With containment already a hot topic, the US’ recent high-profile TPP advocacy has been interpreted as an economic finishing touch to its other efforts to offset China’s presence in the region. China has not been invited to join the TPP, although Kirk said China could choose to apply with or without an invitation. Although many analysts, including Wang, insist that containment is an exaggerated term used by the media to whip up debate, there is a consensus that China is at least one of the important considerations in the TPP strategy. “Whether or not China intends to challenge US dominance in the region, the US unquestionably perceives that China’s growing influence has affected its strategy,” said Professor Chu Shulong, deputy director NEWSCHINA I February 2012

of the Institute of International Strategic and Development Studies at Tsinghua University, in an interview with NewsChina. The US’ focus on rules, standards and values in the agreement has also fueled speculation that the pact is fundamentally a tool to be used against China. Criticizing China on issues of the yuan exchange rate, intellectual property and State-owned enterprises, Obama told APEC business leaders that “playing by the rules” has always been the message he has aimed to deliver to China. Those issues, along with environmental and labor standards, are exactly what the US is looking to highlight in the TPP.

Diversion

Naturally, China is not keen on the prospect

of a US-dominated global trade standard that could supersede the WTO, nor the idea of marginalizing existing initiatives like the Bogor Goals. While the Chinese government is yet to make a decision on whether ot not to get involved in negotiations, the Foreign Ministry announced that China holds an “open attitude” towards “any initiative that facilitates economic integration and common prosperity in the Asia-Pacific region, including the TPP.” Chinese analysts are divided on the issue, but most fall into one of three categories, two of which are decidedly non-participatory. The first approach advocates giving the TPP a wide berth, in the expectation that the TPP will prove to be ineffective and ultimately unworkable. Japan, the world’s third-largest

49


Photo by CFP

international

President Obama speaks at a press conference during the APEC summit in Hawaii, November 13, 2011

TPP Data

Trade between the US and other TPP economies over the first 10 months of 2011 Total US export to the TPP: US$141.9bn

The TPP as a group is the

4th

Vietnam: 2.5%

largest trading partner of the US, after Canada, China and Mexico

Australia: 15.8% Brunei: 0.1% Chile: 9.2%

Japan: 38.6% Malaysia: 8.5%

Over the first ten months of 2011, the TPP parties (including Japan) only comprised

17%

New Zealand: 2.1% Singapore: 18.4%

of US trade with APEC, receiving

Peru: 4.8%

Total US imports from the TPP: US$180.8bn

19%

Australia: 4.61% Brunei:0.01% Vietnam: 8.1% Chile: 4.3% Malaysia: 11.9%

of US exports to APEC and producing

Japan: 57.9%

15.7%

New Zealand: 1.5% Peru: 2.8% Singapore: 8.9%

of US imports from APEC

If the TPP expands to APEC, the agreement will have access to: of the world’s population

9 2.5 15 US$461.1bn out of the top US export markets for goods

of the world’s total GDP

44%

of the US goods trade deficit in 2010

of the world’s trade

62%

of the US global trade

50

times of the US trade with the EU

76.5bn

US$

of the US services trade surplus in 2009

(Source: The US Census Bureau / Office of the US Trade Representative)

economy, has seen strong domestic protests over the country’s November 2011 decision to join the TPP, and in the US, dairy and textile producers are concerned about competition from New Zealand and Vietnam. Long Yongtu, China’s chief negotiator for the WTO accession, sees little to work within the TPP. The second attitude is one of aloofness, based on analysts’ confidence in China’s greater economic growth and market potential compared with the US. Professor Chu, for example, predicts that TPP signatories will find slim pickings in the sluggish US market, and will naturally turn to China. The third camp, however, calls for a more active response. “Why should we exclude ourselves just because the US intends to offset China’s influence?” asked Professor Sang Baichuan, dean of the Institute of International Economy at the University of International Business and Economics in Beijing. He believes China risks nothing in joining the negotiations, and will certainly not stand alone in resisting standards imposed by the US. Conversely, if China were to exclude itself, it could potentially lose out on increased interaction with other economies in the region and risk some of its Asia-Pacific trade being diverted to the US, which would be detrimental to China’s interests in the region. “The negative effect of the TPP on China’s role in Pacific economic integration has already been felt,” said Professor Li Guanghui at the Chinese Academy of International Trade and Economic Cooperation, the think tank for China’s Ministry of Commerce. Li disagreed with the idea of a laissez-faire attitude towards the pact, arguing that certain trade agreements between China and its Asian partners had indeed been delayed by talk of the TPP. Whatever role, if any, China chooses to play in the future of the TPP, the outcry over the US re-entry into the Asia-Pacific market undermines the more important issue of coexistence through wider co-operation, which should be central to all discussion of global trade that involves the world’s two largest economies. While China and the US concern themselves with the defence of their respective strategic interests, the global business community, and other TPP members, look for some solid ground on which to trade.  NEWSCHINA I February 2012


NEWSCHINA I February 2012

51


retrospective Shanghai Portraits

Faded Pearls In the 1920s, a young Jewish immigrant started a photo studio in Shanghai. Operating through the mid 1950s, he took thousands of portraits, recently rediscovered in Israel, providing a startling window into the 20th century transformation of China’s most cosmopolitan city By Ma Duosi

Sam Sanzetti

T

he collection of vintage photographs screams Shanghai – men in well-cut western suits; women wearing traditional cheongsam; children sporting old-style skullcaps. All these pictures were taken by Sam Sanzetti, a Jewish photographer active in Shanghai from the 1920s through the mid-1950s when he reluctantly left his adopted city and settled down in Israel. He never returned to Shanghai. His photographs, however, have recently had their own homecoming. On October 24, 2011, the General Consulate of Israel in Shanghai posted 200 or so of Sanzetti’s portraits on its website in a bid to learn the identities of the subjects. The beautifully-arranged photographs soon caused a stir online among the growing numbers of Chinese seeking to reconnect with the country’s lost past, drawing many appreciative comments. The Consulate announced at a press conference November 11 that five of the figures in the old pictures had been identified and were willing to share their stories with the public. It was Pan Guang, director of the Institute for Jewish Studies in the Shanghai Academy of Social Sciences, who first stumbled on the pictures. During a visit to

52

Opposite: Clockwise from top left: Sanzetti (third from left, front row) and Nancy (fourth from left, front row) at their wedding ceremony; Sanzetii serves as a rickshaw puller while the real rickshaw puller takes a ride; Sanzetti Studio at 73 Nanjing (Nanking) Road, Shanghai

NEWSCHINA I February 2012


retrospective Israel in March 2011, Pan was told by an Israeli photographer that she knew of Sanzetti’s Shanghai archive. She insisted that Pan go and see the portraits for himself. Pan thus paid a visit to Moshe Dexsler, Sanzetti’s stepson, who presented him with 20,000 yellowing photographs, many of which were faded or rotten, but all of which bore Sanzetti’s signature on their reverse. Unlike the images, the name was not unfamiliar to Pan. In 2007, he published an article titled “Specialty Shops and Stores Founded by Jews in Shanghai,” in which the “Sanzetty [sic] Studio” was briefly mentioned. Pan could only glance through these 20,000 pictures. The better part of the collection was portraits of foreigners living in Shanghai, including some nudes. Among the pictures featuring Chinese faces, Pan found silent film stars like Zhou Xuan and Hu Die as well as a smattering of former officials and public figures. These photos roused Pan’s nostalgia for old Shanghai, a vibrant metropolis lost to the turbulence of that city’s more recent history. Upon returning, he proposed to the foreign liaison office of the Shanghai municipal government and the Israeli consulate that these old pictures be publicly displayed to commemorate the 20th anniversary of the establishment of diplomatic relations between China and Israel. Dexler also supported his idea, and thus Sanzetti’s photographs made the return journey to China a year later. Dexler believes the return of Sanzetti’s photos to have completed a century-long cycle. Dexler recalled of his stepfather, “He always said that his days in Shanghai were the best time of his life.”

Immigrant

In 1922, a 20-year-old Ukrainian Jew named Sioma Lifshitz arrived in Shanghai via the Trans-Siberian Railroad. Shortly after his arrival, he adopted the name Sam Sanzetti to facilitate pronunciation, as well as the Chinese name “Shen Shidi.” Coming to Shanghai empty-handed and with no practical skills, Sanzentti started out as a bootblack outside a photo studio owned by an American. The studio owner, admiring Sanzetti’s hard work and honesty, hired him as an odd-job man. It was during this time

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that Sanzetti learned photography. By 1927, Sanzetti had opened his own studio on Nanjing Road (Nanking Road), still the busiest shopping street in Shanghai. Sanzetti’s romanticized portraits, which critics have said are reminiscent of oil paintings, are painstakingly composed to retain the natural attitudes of the subjects, using soft light effects and understated backgrounds to accentuate their humanity. At first, foreign expats living in Shanghai‘s numerous concessions were Sanzetti’s primary clientele, but local Chinese customers were soon drawn to his fame, with wealthy Chinese businesspeople and celebrities choosing Sanzetti’s for their personal portraits. Gradually, his business became one of Shanghai’s foremost photography studios. Sanzetti expanded his business to a further three studios, with his total workforce peaking at 31 people, including a chauffeur and private chef, though he never purchased his own home, preferring instead to reside in a hotel. The rise of fascism in Europe saw Shanghai’s Jewish population swell in the mid 1930s as exiled European Jews sought safe haven in the city’s foreign concessions. Among them were intellectuals like German composer Wolfgang Fraenkel and pianist Ada Bronstein, who went on to teach Chinese virtuoso Fu Cong. Michael Blumenthal, future US Treasury Secretary in the Carter administration, also spent his teenage years in Shanghai. Following the Japanese occupation of Shanghai shortly after Pearl Harbor, the city’s 14,000 Austrian and German Jews were forced into a ghetto near Tilanqiao. As an early immigrant, Sanzetti was not sent to the ghetto, but the Japanese made his life difficult, and he faced regular harassment from the military police. After World War II ended, most of the Jews in the Shanghai Ghetto left for other parts of the world, principally the United States and the newly-founded State of Israel. When the city fell to the Communist advance in 1949, the Jewish population had already largely been dispersed. Professor Pan Guang estimates that there were only 100 or so Jews left in Shanghai by 1957, among them Sam Sanzetti.

NEWSCHINA I February 2012

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retrospective Memories

One afternoon in 1954, Hong Luoxia, 17, an amateur ballerina and a senior high school student, passed by Sanzetti’s photo studio and was attracted by the pictures displayed in the window. She decided to have her own portraits taken that same day. Countless Shanghainese have memories of Sanzetti’s studio. Now, 74, Hong Luoxia still remembers clearly how he worked. “He asked me to relax and dance in whatever way I liked. He shot many pictures of me,” she told our reporter, and was delighted to see her picture appear in his shop window a week later. Hong described to our reporter how Sanzetti had chosen one of her favorite images – she had posed with her arms crossed before her chest, her head slightly uplifted and her eyes gazing into the distance. However, this image, along with all her other Sanzetti portraits, no longer exists. Hong personally destroyed all the portraits during the Cultural Revolution, afraid that the romantic images would cause her to be labeled a “bourgeois capitalist-roader.” “I burned them all. Such photos had to go,” she said. You Meiying took her one-year-old son Sun Xun to Sanzetti’s studio for a photo in 1954. Now 85, You recalled that her family was fond of taking pictures at Sanzetti’s studio because he was both professional in his attitude and easy to get along with. “I had many photos taken when I was around one year old. But the best were the two taken at Sanzetti’s studio and my mother likes them very much. So they have always hung on my wall,” Sun Xun told NewsChina. Former textile mill workers Cao Lizhen and Chen Lishan, now a couple in their eighties, fondly remember how Sanzetti directed their 1954 engagement photos in an unaccented Shanghai dialect.

End of an Era

Sanzetti was reluctant to leave China, the country which had made him successful, and the city where he had become a man. Furthermore, he had married a local woman, a divorcee with the English name Nancy, and adopted her daughter. Their wedding photo, fished out from the old collection by Dexler, shows the newlyweds in white wedding outfits among a crowd of guests, both foreign

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culture Ancient Theater

Road to Rebirth Refurbished one and a half years ago, the exquisite ancient architecture of the 300-year-old Zhengyici Theater is more compelling than ever. However, this contemporary institution continues to struggle with re-introducting traditional opera to a modern audience By Ding Chenxin and Yuan Ye

A performer applies make-up before a Chinese opera performance at Zhengyici Theater, November 2011

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ucking the national trend, the Zhengyici’s theater company isn’t planning an ostentatious celebration of its long history beyond expanding its repertoire. Performers and crew work intensively on several shows, while the only significant nod to the theater’s landmark anniversary besides these performances is the replacement of the tables and seating in the main auditorium with eight-seater baxian zhuo, a traditional Chinese table which is required for the staging of one particular drama. Despite the theater’s venerable age, its audi-

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ence remains select. Concealed in a tiny hutong alley surrounded by monstrous super-architecture, the only clue to Zhengyici’s existence is a hand-painted signpost tied to a nearby streetlight. In Beijing, a city of tens of millions, a mere 25 traditional theaters, large and small, are currently in operation, only three of which are over 200 years old, built during the golden age of Chinese opera. The traditional layout of the theater has been well preserved. The stage is a classical thrust, and there are some 200 seats on its three sides, including two-tier opera boxes.

A combination of politicized iconoclasm and pop culture saw Chinese opera almost disappear from the mainland in the second half of the 20th century. Zhengyici’s survival, along with that of its sister institutions the Huguang Guild Theater and the Yangping Guild Theater, lies in adaptation to the tastes of contemporary audiences. The Huguang Guild Theater re-opened 15 years ago but struggled to attract audiences to its productions, resorting to a smorgasbord business model whereby it would offer a package including lunch and selected scenes from NEWSCHINA I February 2012


Photo by Sun Xiaoxi

In the last five years, there has been a resurgence of interest in Chinese traditional opera thanks to a growing level of audience sophistication.

NEWSCHINA I February 2012

certain operas, a model imitated by theaters across the capital hoping to trade on the tourist buck. Yangping Guild Theater has closed and reopened several times, most recently in May 2009. Now operating under the Liu Laogen Grand Stage chain of theaters owned by comedy actor Zhao Benshan, the theater’s repertoire consists almost exclusively of lowbrow northeastern er’ren zhuan two-hander sketch comedy. While popular as mass entertainment, few in China would term er’ren zhuan an art form. Zhengyici has so far refrained from capitalizing on these current theatrical trends. In the one and a half years since re-opening, Zhengyici had, until very recently, only staged one show: Mei Lanfang Classics, a celebration of the legendary Mei Lanfang, a male Chinese opera singer who specialized in female roles. This combination of classic opera scenes with a semi-biography of China’s most well-loved opera star proved popular with mainstream as well as specialist audiences, and allowed the theater to remain open while it developed a more ambitious plan for the future. In the last five years, there has been a resurgence of interest in Chinese traditional opera thanks to a growing level of audience sophistication. All around China, traditional operas in local dialect have enjoyed a certain level of revival, fueled in part by a greater level of cultural soul-searching and also by increased domestic tourism, with a local opera performance on the itineraries of countless package tours. The nationwide success of Kunqu, a traditional local opera that originated in Jiangsu in the 14th and 15th centuries, which almost went extinct on the mainland in the 20th century, has been trumpeted as an example of how traditional opera can be not only preserved but also restored to profitability. In 2004, The Peony Pavilion, a Kunqu classic, was revised and abridged by renowned Taiwanese writer Pai Hsien-yung, Pai’s version received favorable reviews and gave this ancient art form a new, invigorated fan-base. It was Pai’s Peony Pavilion that inspired Wang Xiang, current general manager of Zhengyici Theater, to stage his own version of the classic. Wang rented the 600-year-old Imperial Granary in Beijing and launched his high-end version of The Peony Pavilion in 2007, successfully attracting Wang’s target audience, the Beijing elite, who were willing to pay nearly 2,000 yuan (US$310) for a ticket

in a 50 to 60 seat venue. In 2009, Wang found Zhengyici Theater with a view to staging his production of The Peony Pavilion in a larger setting. It was around the same time that Beijing Opera began to recover its popularity with national audiences. At the end of 2008, Forever Enthralled, a biopic of Mei Lanfang directed by Chen Kaige, was released to mixed reviews, but was taken as a signal that traditional opera was back in vogue. Meanwhile, the Mei Lanfang Grand Theater, which mainly stages Beijing Opera classics, was opened at the end of 2008 on one of Beijing’s busiest streets. Wang felt the time was right to restore Beijing’s long-dormant opera scene. The Grand House Zhengyici Theater, built at the height of the Qing dynasty (1636 – 1911), was the first all-wood indoor theater in China and is today the best-preserved example of a traditional opera house. Originally a guildhall providing entertainment and catering for private bankers from Zhejiang province, the theater operated throughout the birth and development of Beijing Opera, which was formed around 1840 by combining traditional Anhui, Hubei, Jiangsu and Shaanxi provincial operatic styles. A great number of Beijing Opera masters, including Mei Lanfang and the genre’s founders Cheng Changgeng (1811 – 1880) and Lu Shengkui (1822 – 1889), to name a few, performed at Zhengyici, making it a place of pilgrimage for fans of the genre. However, despite its popularity with local audiences, the theater became a storehouse for the Imperial Japanese Army after they occupied Beijing in 1937. Following the defeat of Japan, the Kuomintang regime used the theater as a military hospital and then a coal dump. In 1957, the Communist Party turned the theater into a guesthouse for officials associated with the Beijing Municipal Education Bureau; it was later abandoned. Then, in 1994, when the old theater was becoming seriously dilapidated, Wang Yuming, an entrepreneur from Zhejiang province, briefly rented and repaired the formerly elegant building. A year later, Zhengyici Theater re-opened. Wang Yuming spent 5 million yuan (roughly US$67,000 at the time) for the restoration. In the three-day opening celebration, Mei Lanfang’s son Mei Baojiu and daughter Mei Baoyu, and many other famous Beijing

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Photo by Sun Xiaoxi

culture

Hidden in a tiny hutong in Beijing, Zhengyici Theater has stood for three hundred years

Opera singers, performed on the stage. The theater remained in business for a total of three years, staging 700 performances of both Chinese opera and spoken drama, even a production of Hamlet. However, the theater struggled to profit from its endeavors. In the heady entrepreneurial atmosphere of the 1990s, few locals had any interest in performing arts beyond TV soap operas and popular music. Attendance at Zhengyici was so poor that Wang Yuming would often be the only audience member for a production’s entire run. Finally, Wang found himself unable to pay the rent and had to close down his business. The building was later turned over to Beijing Municipal Bureau of Cultural Affairs and wasn’t used for commercial purposes until Wang Xiang rediscovered its existence in 2009. New Directions Wang Xiang invited Mei Baojiu and the century-old Mei Lanfang Beijing Opera Troupe to produce Mei Lanfang Classics, choosing controversial director Li Liuyi to stage the production. Famous excerpts from six of Mei Lanfang’s classic dramas were selected for the play, marking six key stages in Mei’s career. The ticket price was set at 280 to 680 yuan (US$44 – 107), a little higher than Zhengyici’s main competitors Huguang Guild Theater and the Mei Lanfang Grand Theater. With the strategy of “Mei Lanfang and the oldest opera

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theater,” Wang Xiang and his team hoped to reproduce the success of The Peony Pavilion in the Imperial Granary. However, the outcome wasn’t as positive as Wang expected. Forever Enthralled, the Mei Lanfang biopic, was a critical flop, with critics arguing that it was merely a commercialized retread of the themes explored in director Chen Kaige’s far more successful Farewell My Concubine. In addition, rival venues specializing in Beijing Opera had already cornered a large part of the market, and attendance of Mei Lanfang Classics fell by 20, then 30 percent shortly after the show opened. Box office receipts weren’t enough to pay the Mei Lanfang Beijing Opera Troupe, and they severed their contract with the theater. Wang refused to give up, and even attempted to source performers from local drama schools while cutting the number of roles. Ticket discounts were heavily publicized in an attempt to attract a wider audience. Finally, after a year’s dismal box office, ticket takings began to slowly increase. The new Zhengyici Theater is still in search of its own style, according to Wang Xiang. One recent change has been the incorporation of Kunqu Opera into Mei Lanfang Classics, the justification being that Mei himself was a fan of Kunqu. Mei’s debut performance at the age of 10 was as part of a Kunqu Opera ensemble, and he continued to practice the genre throughout his life. Starting from November 23, 2011, Zhen-

gyici also launched a one-month drama season featuring three experimental dramas and one Beijing Opera. Though experimental, the three plays have all rooted themselves in traditional Chinese themes and backgrounds. Pioneer director Meng Jinghui’s Golden Millet Dream is a modern version of an ancient Chinese novel. Fang Xu’s one-man show This Life of Mine, a story about a policeman in the “old society,” was based on a novel by Lao She, which he finished in 1937. The Good Person of Beijing, an adaptation of Bertolt Brecht’s The Good Person of Szechuan, combines mythology with contemporary reality. Finally, the contemporary Beijing Opera Cao Qiqiao is a tragedy set in the 20th century. One of Lao She’s best-known plays, Tea House, directed by Lin Zhaohua, is scheduled to be staged in March 2012. A classic drama that has been performed somewhere in China almost constantly since being rehabilitated after the Cultural Revolution, Tea House tells an abridged tale of life in Beijing throughout the turbulent events of the collapse of the Qing Empire right up until the founding of the People’s Republic in 1949. It is for this production that the theater is installing baxian zhuo tables and seating in the auditorium, to recreate the atmosphere of Beijing’s long-lost traditional teahouses. Thus the Zhengyici Theater hopes to reacquaint contemporary Beijingers with a lost and much-mourned history that modern development is constantly threatening to eradicate. NEWSCHINA I February 2012


North Korean Animation

Drawing out the Hermit Not usually known for its strength in international trade, North Korea is earning a strong reputation and a healthy stack of foreign currency with its nascent animation industry

Stills courtesy of the author

By Li Jie

At the 426 Film Studio in Pyongyang, North Korea, staff draw 2D animation frames, October 2011

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ive people sit in a row in front of black Dell computer monitors. They are calm and unhurried, but the serious looks on their faces cast a stiff atmosphere over the room. The scene is no different from any Internet cafe in Asia, save for one small detail: the two photos taking pride of place in the middle of the adjacent white wall depict Kim Il-sung, the late North Korean supreme leader, and his son and successor Kim Jong-il, who died December 17, 2011. This is the headquarters of North Korea’s animation factory, the Scientific and Educational Film Studio of Korea (SEK), commonly known as the 426 Film Studio, in downtown Pyongyang, capital of the mysterious communist state. “We call it 426, because on April 26, 1985, our great leader Kim Il-sung called on us to co-operate with foreign countries,” said Ho Yong-chol, who is in charge of the studio’s external affairs, effectively its PR department. The SEK, with no adornments on its stoiNEWSCHINA I February 2012

cally plain exterior except a medal hung on the front door, has been playing a key role in earning foreign currency reserves for North Korea, and gradually connecting the hermit kingdom to the rest of the world. Many well-known international animated film projects, including The Lion King and Teenage Mutant Ninja Turtles, were partly produced here. Established in 1957 and with around 1,300 staff, the SEK has quietly developed into an impressive outsourcing hub for the international animation industry. Its clients include companies from France, Italy, Germany, and Spain, said Ho, who has been working with the SEK for 12 years. He said that they started to work with China around the year 2000, and had played a part in the production of many cartoons, like the animated version of the Romance of the Three Kingdoms, a well-known Chinese classical novel, which was broadcast in China in 2009. Many attribute the growing success of

North Korean animation to a particular interest from former leader Kim Jong-il, a known movie-lover whose personal film collection was said to comprise hundreds of thousands of titles. Besides Kim’s personal favor, the flourishing industry can also be attributed to North Korea’s eagerness to share the growing IT outsourcing business with other developing countries. Ho’s guided tour through the SEK offices was reminiscent of the Canadian cartoonist Guy Delisle’s animation, Pyongyang: A Journey in North Korea. The film documented the author’s two-month experience at the SEK in 2001, working as the liaison for a French company. At the SEK, each office is identical. Men and women, most in their 20s or early 30s, stare rigidly at computer screens, drawing and colouring meticulously. Most animators use Dell computers, but some also use HP and Apple machines. In each room, there is a steel locker

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culture

for staff to keep their belongings safe. On the top of the locker, there are five or six military field-packs. Not far from the locker, there is a gun rack, on which rest five or six woodenbutt guns. The picture is exactly identical to Delisle’s depiction. Mr Ho said that the staff working for SEK were selected from various universities and art institutes in North Korea, who had honed their skills under the mentorship of experienced animators. The SEK also sends animators to study in Europe and China. The walls of the SEK compound are plastered with slogans expressing loyalty to the country’s leader, and vows of commitment to develop the economy at full speed. Posters on the walls honor model staff members. The scene is strikingly reminiscent of China during the Cultural Revolution (1966-1976).

Strong Rep

It’s no wonder that North Korean animators are making a name for themselves in animation circles. “The Koreans have a good reputation for quality and punctuality,” said Kuang Yuqi, production executive at Beijingbased animation company Vasoon Animation. Kuang worked with North Korean animators in Beijing around five or six years ago when he produced a cartoon for a local TV station. Kuang was first approached by a Chinese middleman who had been doing business with North Korea for more than 20 years. He said that he could introduce Kuang to some

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Stills courtesy of the author

Left: Flag and certificate awarded to an animation team in the 426 factory by North Korean authorities. Right: A poster wall in the 426 factory with slogans encouraging people to develop the economy with speed and enthusiasm, asking them to “unite and be loyal to the party.”

North Korean animators to help with laborintensive drawings. “A dozen North Korean workers rented a two-story residence near the airport. They worked and lived there for several months,” said Kuang. “Their main job was to draw the pictures between key frames that help create the illusion of motion, while the key frames which defined the beginning and end of each movement were usually completed by our own people,” said Kuang. Kuang didn’t get a chance to talk to the North Korean animators in person. Most of the communication was carried out through the team’s leader. “Although we had to talk through a translator, the North Korean team understood what we wanted very quickly. Sometimes, just a hand gesture was enough to communicate our message, ” said Kuang. “They work with military discipline. We never had to worry about delays or imperfections in their drawings, since their work was almost flawless,” Kuang added. Unsurprisingly, difficulties have been known to arise when dealing with the hermit kingdom; North Korean workers’ lack of exposure to the modern world has sometimes become an obstacle. A friend of Kuang’s from another company once asked the Korean animators to draw a Harley-Davidson, but the sketch he later received was of a 1960s-style motorcycle. Kuang’s friend had to take the animators to the street to get an idea of what a modern motocycle looked like. But this kind of disconnect is becoming

increasingly rare. Since the North Korean studio’s expansion into Europe and later Asia, their designs and tastes have quickly been brought up to speed. “While we don’t let the North Koreans draw the most important frames, we fully trust them to do drawings involving details and accuracy. Taking into account the balance of price and performance, the North Koreans are the best deal,” Kuang Yuqi said. According to sources in the Chinese mainland animation industry, the price of making cartoon Flash and 2D or 3D animation ranges from 500-20,000 yuan per minute (US$78-3,100). The North Koreans handle the same work, but their prices can be around 20 percent cheaper, depending on how complicated the drawings are.

Grand Designs

As with all international trade, the outsourcing of animation involves competition. In China, in addition to strong domestic animation companies, competition from Russian animators presents a credible challenge to the advantage of North Korean companies, according to Kuang Yuqi, who has been working in China’s animation industry for over 20 years. While Japanese animators produce the highest quality animation, they are selective about the projects they choose to undertake, although the sluggish Japanese economy has forced them to become rather more openminded. Companies from South Korea are also strong. NEWSCHINA I February 2012


In spite of the competition, North Korea’s momentum to expand its market share around the world is impressive, particularly given its retiring presence in world affairs. Yet, while expanding its international market, North Korea has inevitably encountered some problematic political barriers, particularly with the United States for example. Officially, North Korea does not do business with US, one of the most important animation factories in the world, since US trade sanctions on North Korea have been in place for many years. But with both sides looking to benefit from collaboration with the other, US and North Korean animation companies have found ways to circumvent politics. One example frequently cited by media is The Lion King. “It's a Disney film. However, if the production order comes from Disney Europe, rather than the Disney company in the US, then it is not an order placed by an American company,” an American animation producer

NEWSCHINA I February 2012

working closely with North Korea was once quoted as saying. Instead of asking where the cartoon was made, US companies care more about the delivery of the products. But there are risks involved in such methods; in July this year, a South Korean cartoon character, Pororo the penguin, was almost banned in the US. A few episodes were co-produced by North Korean animators, meaning it conflicted with America’s ban on imports from the reclusive country. According to Cheng Chun-huang, secretary-general of an Asia-based animation association, the SEK is now pushing hard to expand its network in Asian countries. “Now, through our association, they are developing new sources and contacts in China, since we have many contacts with Chinese animation companies and schools,” said Cheng. Many years ago, the SEK set up an office in Dandong, a city in China’s northeastern Liaoning Province that borders North Korea. In July this year, a building belonging to an

animation production center co-funded by the SEK and a local animation company in Liaoning was completed. The building covers 10,000 square meters. Surprisingly, North Korea also co-produces animation with the South. One collaborative production that enjoyed breakthrough success was the film Empress Chung, which told the story of a girl named Shim Chung who gave her life to a sea dragon to treat her father’s blindness. In 2005, the US$6.5million-budget film was released simultaneously in North and South Korea, the first coproduction since the Korean Peninsula was divided 60 years ago. As the animation industries work more closely with each other internationally, North Korea has already established itself as a provider of reliable, albeit basic, animation. With the industry now reaching beyond politics, it may not be long before North Korean handiwork becomes an integral element of the world’s cartoons. 

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OUTSIDEIN perspectives from within china

Exploring Chongqing

An Ancient, Modern Metropolis The thick fog that swirls at the confluence of the mighty Yangtze and Jialing Rivers often gives Chongqing an air of Victorian London, but don’t be fooled, this is a city at the forefront of China’s modernization drive By David Green

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Photos by CFP

he endless sprawl of Chongqing municipality is at the vanguard of the government’s goal to promote growth in the interior and west of China as it seeks to relieve population and industrial pressure on the creaking eastern seaboard. As such, investment is pouring in from both domestic and foreign sources, and with it, the façade of the old city is being peeled back to make way for some of China’s most ambitious construction projects. The result is a cityscape punctuated by towering skyscrapers, sweeping bridges and cranes, cranes, cranes as far as the eye can see. However, despite the constant cacophony of construction sites, tucked away in the shadows beneath this steel sky in the area east of Zhongxing Road, it’s still possible to catch a glimpse of old Chongqing. The walls of the buildings here are marked with the Chinese character chai, a familiar death warrant meaning they will soon be demolished. Housing has already been vacated, leaving the upper stories of Soviet-era tenements to leer empty and abandoned over the still-bustling streets. The contrast is a curious one, and the market that occupies the lower floors is well worth a stroll for the array of goods and produce on sale, delivered fresh off the boats by the city’s infamous bamboo pole-wielding bangbang men. Motorbike taxis are ubiquitous in Chongqing and are by far the most convenient, and exciting, way to get a feel for the multiple levels and districts that characterize the city. Another option is to visit Pipashan Park, a mountain sonamed for the Chinese lute that folklore has it was played by a melancholy young maiden whose parents forbade her from crossing the Yangtze to unite with her lover. The peak offers superb panoramic views, and is also the nexus of a number of walking routes that wind their way across the city’s upper reaches, taking in makeshift barber’s shops, ear-

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NEWSCHINA I February 2012

Photos by CFP Photos by David Green; map illustration by Wu Shangwen

cleaning stalls and chess games along the way. Chongqing is embarking on a massive subway construction program that by 2020 will see a fully integrated mass transit system completely re-orient the city. For the time being, only two metro lines and a monorail are up and running, but they are fast and convenient, and a trip to Yangjiaping subway stop will get you within a short taxi ride of the Julongpo art district. Julongpo is remarkable for its street art that covers the buildings from basement to rooftop in a striking display that makes wandering about something of a surreal experience. The mishmash of gallery spaces hums with art students from the nearby Sichuan Academy of Fine Arts, and the premium on space means many classes are held offcampus, allowing curious foreigners to take a peek while the students learn. The pick of the professional galleries is 501 Art Base, up near the top of Huangjueping Main Street, which at the time of writing was showcasing the works of Chongqing’s native son Fu Wenjun. By night, Chongqing erupts into a fountain of neon reminiscent of the north side of Hong Kong Island. Jiefang Bei is the center of the action, but the clubs here are very much in the Chinese mold, boasting thumping loud music, watered-down drinks and tables galore from which to take in the local scene. However, the beer garden that sits outside TT Club is an ideal spot to take five and judge for yourself whether, as locals insist, Jiefang Bei really is home to the most beautiful girls in China. Further afield, IRadio bar on the south bank of the Yangtze is the perfect place to relax and have a beer while taking in the view of the city in its all its glory on the opposite bank. Another watering hole, CiCi Park, is run by the founders of the local electronic music scene and is the go-to bar for the inside track on parties in the city and even the surrounding countryside. For the more refined, Chongqing Wine House near the Marriott hotel offers fine wines and a rotating two-course menu courtesy of its Bulgarian owner, and also partners with the adjoining women-only spa. Chongqing is renowned as one of China’s “Four Furnaces” for the scorching temperature of its summers and the tongue-numbing spiciness of its hotpot. Those seeking relief from the former should jump on a bus or train and take the two-hour ride to the Wulong Scenic Karst Area. This mountainous region boasts UNESCO World Heritage site status and is worthy of a three-day stopover. Domestic tourism is on the increase but few foreigners have made the trip out here, as road links were only opened about five years ago and details are lacking in all but the most recent guidebooks. Visiting off-season is highly recommended, not least for the rare chance to enjoy a Chinese tourist site in relative solitude. Tours can be arranged with ease from transport hubs in Chongqing, but taxis can also be hired for the day from

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travel

Getting There Chongqing is easily reachable by air as its airport is the largest in southwest China, and services domestic destinations as well as a growing number of international flights to South East Asia, Europe and the Middle East. Trains run regularly to and from major cities like Chengdu and Guangzhou, with long-distance express services from Beijing and Shanghai also readily available.

Accommodation Tina’s Hostel offers clean rooms, decent service, internet access and pick-ups from the coach and train stations to its prime location on Zhongxing Lu, just south of the city center in Jiefang Bei.

Practicalities Chongqing may be one of China’s four furnaces but be prepared for rain. A lot of

Photo by David Green

Wulong itself, while the more adventurous can ask around for a guide willing to organize treks in the surrounding mountains that visit the three key sites. The first of these, Longshui Gorge, is an awe-inspiring cascade of crystal waters navigable via wooden bridges and sunken paths, which weave between waterfalls and follow the track of the river from its cavernous origin out onto an idyllic rural plain. Access comes via a slightly incongruous elevator built into the side of the cliff, but once past the descent it’s easy to get lost in the reverie the thundering waters inspire. Nestled in the hills high above a tributary of the Wu River, the Furong (Hibiscus) Cave complex is best visited in the early morning, when it lies wreathed in an unearthly mist. Even before entering the cave itself, the views across the river to the mountains beyond give pause for thought, though ideally not so long as to let a monkey swing by and steal your camera equipment. The area is also home to other rare flora and fauna, verified by a chance encounter with a wandering golden pheasant while walking in the hills. The dearth of visitors in the early morning adds to the mystique of walking through the cave, which ranks on a par with the world’s best in terms of scale and houses stalactite formations that reach over 20 meters long and 15 meters wide. Outside, the zip line that traverses the river is well worth the 50 yuan (US$8) investment, as being cast out 100m above the water at breakneck speed is an experience that will live long in the memory, or on paper if you opt to buy the cheekily-staged souvenir photo. Tickets for these sites and the wider expanse

Local market in Chongqing

it. Study a climate graph before arriving to get a clear idea of which weather conditions to expect. Mandarin speakers be warned - Chongqing dialect changes some of the consonant sounds at the beginnings of words, but persevere and it’s relatively easy to communicate. Finally, prepare for trips out of the city well in advance, as it is often difficult to secure tickets on the day and many of the timetables available will already be out of date.

of the Three Natural Bridges scenic area retail for about 300 yuan, and can be bought in Wulong or from travel agents in Chongqing. Accommodation is widely available in the hills around Wulong, but those on a budget can drop in to the local public hostel, which has comfortable twin rooms with their own computers for 100 yuan (US$15) a night. Back in Chongqing, Tina’s Hostel on Zhongxing Lu is the flophouse of choice as its central location allows almost doorstep access to Jiefang Bei, and from 50 yuan (US$8) even claims to offer access to local swimming pool facilities.

In the words of a longtime expat resident, “Chongqing is a city of superlative scale and speed, and truly awesome.” The cleanup campaign orchestrated by mayor Bo Xilai has put pay to much of the mafia’s criminal activity and given a gleaming sheen to the city’s development aspirations, most visibly through the police kiosks that flash red and white every couple of blocks. Yet there is a sense of the Wild West here that should appeal to business travelers in search of opportunity, and tourists eager to experience the commercial whirlwind that has engulfed one of the fastest growing cities on the planet. 

real chinese

shafa jingji Sofanomics For Chinese consumers irritated by apocalyptic shopping center crowds during peak sales seasons, tablet computers and smartphones have proven a godsend. Online retail has become the failsafe for Chinese shopaholics and shut-ins alike, with ever-increasing numbers of people choosing to dodge the lines and still secure the best bargains. Sha fa is a transliteration of sofa, while jingji is the Chinese word for economy, though in this context means commerce. China’s breakneck adoption of wireless broadband Internet and 3G technology has allowed many of its citizens to conduct their entire lives from their couches, spurring a lifestyle revolution outpacing those in even the most developed foreign countries. While customers might feel they’re getting the best deal out of e-commerce, the biggest winners have been online retailers, followed closely by third party payment platforms and, of course, the companies that manufacture the electronic devices making such speedy transactions possible. Top of the heap is Apple, whose iPhone and iPad have become synonymous with shafa jingji since both gadgets have become must-have items for the discerning urban consumer. These two devices alone accounted for 10.2 percent of the

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$18 billion in online transactions in the US over the Thanksgiving holidays. In China, online retailers are already tailoring their business models to suit these specific devices, and the overcrowded and increasingly overpriced department stores in major cities are now losing out to their more convenient and cheaper online alternatives. China’s top online retailer Taobao, launched in 2003, swept world leader eBay aside years ago and now boasts user numbers peaking at over 370 million in 2011. Taobao’s own online payment portal, Alipay, which since launching in 2004 has secured more than 600 million registered accounts, manages 11 million yuan (US$1.7m) in transactions daily. The relatively unrestricted marketplace and ever-expanding pool of consumers offered by online commerce has proven irresistible to Chinese entrepreneurs. Similarly, the convenience of shopping from the couch has added appeal in a country where millions remain isolated in the rural hinterland, only connected to their urbanite peers via dirt tracks and thousands of miles of broadband cables. NEWSCHINA I February 2012


flavor of the month

Cloud Delights

T

ucked into a small alley across from Beijing’s Nanluoguxiang – home to the city’s hipster happenings with its cafes and bars carved into ancient storefronts – is the Yunnan restaurant, Yun-Er Small Town. 36-year-old owner Xing Jie, a soft-spoken Hebei native has a warm and comforting manner that seems to ooze into the restaurant’s folksy fabrics, paper lanterns and overall cozy ambience. Xing previously owned a restaurant that served traditional Northern home-style cooking but says that after a while everything tasted both too salty and too oily. Around the same time, he had befriended some Yunnanese, hailing from the province whose name means “south of the clouds” located in China’s remote southwest, and in doing so, ventured into their hometown cuisine. “When I first ate it, I felt suddenly relaxed, that I could really savor the flavor. Nothing is masked. You know exactly what you’re eating,” he reminisced. Yunnan cuisine sometimes barely seems Chinese to the Western gourmet, but this is down to China’s little-known ethnic diversity. In the northeastern part of the province, inhabited largely by the Han ethnic group, the spicier cuisine is more akin to what is served up in neighboring Sichuan. The western and southwestern parts of the province, home to various ethnic minority groups with roots in Thailand, Vietnam and Laos, offer a lighter, more delicate and indescribably fragrant culinary style. This may explain why foreigners from the West seem to take immediately to Yunnanese cooking’s organic “less is more” approach, devoted to enhancing natural flavors. In Xing’s words, “A Chinese person might first try it but will have to come back again and again and order the same dish, until they’ve acquired the taste. Then they like it. But Europeans and Americans who come to my restaurant love the food right away.” We selected several dishes with exotic ingredients that would raise eyebrows almost anywhere outside Yunnan, including imported jasmine bulbs and wild mushrooms. Xing then led us past a tiny courtyard and into a NEWSCHINA I February 2012

drafty kitchen where the head chef fired up a vast wok and got to work on two of the dishes. Jasmine bulbs with scrambled eggs was first. The bulbs had been soaking in water to retain their tender freshness, and were quickly blanched and strained. Three eggs were whipped up with minced red pepper before being fried omelet style, then scrambled together with the jasmine bulbs, leeks and the holy trinity of salt, pepper, and garlic. Just as the jasmine and eggs were laid aside to cool, another chef was prepping the shrimp, giving them a light dusting of flour before frying them with strips of lemongrass, salt and pepper, and, less salubriously, a dash of Maggi flavor enhancer. First to our table was a dish called mint clouds skin – a chilled appetizer of tofu skins marinated with a light tangy dressing and tossed with mint leaves. The chewy tofu plays beautifully with the dressing-soaked leaves, a fragrant and refreshing amuse-bouche that sets the tone for the delights to come. Next came bolete mushrooms wrapped in banana leaf and sautéed with a scrumptious medley of peppers and fresh red chillies. Xing claimed the wild mushrooms were flown in fresh, having been foraged from the tops of mountains. Yunnan, due to its climate, is the richest source of wild mushrooms in the world, with an estimated 850 edible varieties. The lemongrass shrimp dish was the favorite of the evening, sampled to resounding approval that made Xing blush and flash a shy, humble smile. The lemongrass managed to stay crisp and then almost disintegrate when it met our incredulous mouths, giving off just a bit of that aromatic perfume with a faintly bitter finish. When paired with the flavor blast of shrimp that had managed to plumpen by absorbing the juices and seasonings from the wok, nothing could stop our eager chopsticks. Xing, perhaps moved or encouraged by our zest, took time between our gobbling mushrooms and supping Yunnan’s Dali pilsner, ordered us a dish he had recommended that had previously been refused. Thus we found ourselves staring down sauteed mixed insects with flowers.

Photos by Stephy Chung

By Stephy Chung

Minding my manners, I timidly picked up one slender caterpillar, somehow less intimidating than the accompanying silkworm larvae, with my chopsticks. Xing interpreted my hesitance as a lack of chopstick skill, and handed me a capacious spoon. Tasting somewhere between an excessively greasy potato chip and a nugget of popcorn, the caterpillars were surprisingly moreish. My palate had more trouble attuning itself to the pudgy silkworm larvae, which, happily, were wolfed down with many a thumbs-up by my photographer. 

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essay

Spring on the Fringe I first moved to Beijing in early 2010, exactly one month before Chinese New Year. I still remember exiting Terminal Three that morning and stepping onto the platform of the Airport Express. A numbing wind froze my face as I lifted my head to peer through the airport’s open arches toward a vast cloudcovered sky. I saw no skyscrapers as we whirred steadily through the countryside. We were on the outskirts of Beijing, and it felt a world away from the bustling metropolis I had imagined in my dreams. As we approached Sanyuanqiao station the train ducked underground, delaying the city’s appearance like a red bag sealed. When I finally stepped into the heart of Beijing, I saw military police wrapped in military-style hats and floor-length green coats. The streets were covered in a dull snow, trampled many times over by footsteps or crushed beneath taxis, and the air was so thick with pollution I had to wipe my glasses. “So, this is China,” I thought to myself with a mixture of wonder and awe. I had chosen an opportune, or perhaps inopportune, time to arrive. Spring Festival was fast approaching, so it was difficult to find job interviews. The same applied to renting an apartment. Landlords looked at me like I was crazy when they found out I wanted to move in right away.

I couldn’t order food without pictures. I struggled to buy shoelaces. I was 100% on the outside. Then again, when I first came to America I also knew no one. I also did not speak the language. If America had any right to be my home, so did China. 68

“Why start the lease now, won’t you go home for the holidays?” But I wasn’t going anywhere. Beijing emptied out as restaurants closed and migrant workers rode thousands of miles back home. I was one of the few people left in the city. No job and lots of spare time on my hands. It was in those moments, when I would wander the roads at night watching families out together, lighting fireworks in the reflective glow of the city lights, that I felt I was truly living on the fringe of society. As strange as it may seem, that sense of isolation was comforting. It was an emptiness I had known from an early age. As a ‘Vietnamese-Chinese-German-American’ immigrant who changed homes four times before fourth grade I was long acquainted with isolation. In Beijing I hardly knew a soul. I could not communicate with anyone on the street. I spent my days exploring mundane areas of the city that would fascinate few but the most curious outsiders. I watched Beijing speed past me and I felt an indescribable rush. Beijing was a place with which I forged an intangible connection. Yet at the same time I felt utterly severed from mainstream life there. It was like looking at photos of your past that you don’t remember taking. Why did I feel so comfortable here? Why did China feel more like home to me than America ever had? I couldn’t order food without pictures. I struggled to buy shoelaces. I was 100 percent on the outside. Then again, when I first came to America I also knew no-one. I also did not speak the language. If America had any right to be my home, so did China. Both those lives, the east and west, were spent on the fringe. It had all been a life “outside looking in.” So this feeling, Beijing’s emptiness during that week in February, was something I cherished. It was me. On New Year’s Eve I was invited to a friend-of-a-friend’s family home to celebrate the holiday. As we pulled into the suburban neighborhood outside Tiantongyuan I was struck by how much the tract housing re-

Illustration by Xiang Zhaohui

By Michael Thai

sembled California. I had been dropped into the hills of Orange County. There were barely any people, the roads were quiet and dark, luxury cars lined the driveways, and homes were decorated with holiday lights. Whoever had planned and constructed this suburb had done a great job imitating my hometown. It was a surreal night. Here, thousands of miles across the globe, I had found a little piece of home. It was both foreign and familiar. It was home, but it wasn’t. I found myself asking the same questions over and over again. What was I doing here? Who was I here? What was I doing in America? Who was I back there? I was on the fringe of society, no doubt about that. Which society, I still had no clear answer to. After dinner, we all went outside to light fireworks. As sparks cracked out across the concrete and the acrid smell of gunpowder filled my nose I felt a great sense of relief. Sometimes you need an explosion to silence pointless questions knocking in your head. I made a resolution that night to change. Wherever I was, if I continued to think of myself as an outsider, that’s what I would always be. I decided to stop my soul-searching and just enjoy the fireworks.  NEWSCHINA I February 2012


White and Red It was strange to me that a six-hour train ride within a single country’s borders could take me to a place where I was completely unfamiliar with the language. Henan, like everywhere in China, has its own dialect and as my Henan-born boyfriend-turnedinterpreter on this Chinese New Year trip had not been back to his hometown in years, his language skills were shaky. I felt like a foreign exchange student in some third-rate sitcom as I nodded my head with a huge smile pasted on my face in response to dialog that I couldn’t remotely comprehend. We were greeted at the train station by a cousin who immediately gushed forth a stream of compliments about my appearance. I was certainly the first foreign girlfriend to ever be brought back to that particular town and I braced myself for a week of speculation over my blue eyes, my “golden” hair, and questions of whether I had seen a doctor about all those spots

The mild warning of “Henan can get pretty cold” did not prepare me at all for the startling chill I felt when we got off the train. I stood there as the idiot newcomer, smiling and shrugging my shoulders as the family members laughed with each other, “She’s only wearing one pair of pants!” NEWSCHINA I February 2012

covering my body (when I discussed the distinction between spots and freckles to a Chinese colleague, she tactfully responded: “They’re nice but…too many.”) An uncle who drove us to the family home immediately commenced the interrogation, and my boyfriend, as far as I could understand, told them all about me. “She speaks Mandarin!” My boyfriend assured them. “Oh?” replied the uncle, turning around to face me, and then letting fly with a string of gobbledegook that in seconds had utterly nixed my hours of patient language study. I sat speechless for a moment before shooting a bewildered look at my boyfriend, who then responded for me. The only thing more stunning in Henan than my sudden inability to communicate was the weather. The mild warning of “Henan can get pretty cold” did not prepare me at all for the startling chill I felt when we got off the train. I stood there as the idiot newcomer, smiling and shrugging my shoulders as the family members laughed with each other, “She’s only wearing one pair of pants!” I spent the rest of the trip in cast-offs, oversized padded coats underpinned with an unflattering set of long johns picked up from the convenience store. Our days were packed with family visits and making the rounds to every relative’s house within a 50-mile radius. If a person living in Henan had any distant relation to my boyfriend’s family, they were guaranteed a visit from him and his silent, spotty girlfriend. Visits were made more comfortable by one aunt in particular who kindly and hesitantly spoke Mandarin with me, and two younger cousins who wanted to practice their English. I felt most at ease in the home of his reticent grandparents, when a roomful of people, myself included, silently busied themselves with the craft of making dumplings in absolute silence.

Illustration by Xiang Zhaohui

By  Abby Fitzgibbon

Our sleeping situation left something to be desired, at least in terms of actually being able to sleep. My boyfriend’s old bedroom adjoined the family home’s living room, separated only by a wall of frosted glass windows which were habitually left ajar. His parents would start the day early, rising between four and five every morning to secure the best seats in front of the TV. A call to breakfast would be made several times if we ever attempted to sleep past 7. After breakfast the whole cycle would start again, family gatherings, meals, visits, and the occasional obligatory sightseeing done at a startling pace. A trip to the Shaolin Temple culminated in our sprinting the half-hour rambling trail to the top of Mount Song in five minutes. My Henan dialect skills improved over the course of six days and by the end the family was laughing with me as I learned and attempted to pronounce new slang. I even adopted the moniker niuniu, an endearing (or so I was told) nickname for a girl, which I suspect was more a response to my English name being difficult for my hosts to pronounce. We dragged ourselves back to Shanghai and slept in late for a week, reveling in our much-needed period of recovery. After all, we only had twelve months to prepare for the next New Year. 

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Cultural listings Cinema

A Return to Form During the Nanjing Massacre of 1937, a dozen Chinese prostitutes took the place of a group of female students who had taken refuge in a brothel, and voluntarily entered the Japanese camp as comfort women. Released on December 15 and starring Christian Bale, The Flowers of War, the latest work by veteran director Zhang Yimou, is seemingly winning the world-renowned filmmaker his reputation back. Once regarded as one of China’s most talented directors, Zhang has repeatedly disappointed critics over the past decade, with his various commercially successful martial arts and comedy movies as well as the critically-panned romance Under the Hawthorn Tree all receiving somewhat scathing reviews. The Flowers of War, though initially criticized by some for its “eroticized nationalism,” has won generally positive reviews domestically, although international critics remain skeptical. Meanwhile, with an investment of 600 million yuan (US$95m), the movie is hoping for a very lucrative box-office. Music

Exhibition

Kings of Rock ‘n’ Roll

Oil Painting with a Southern Touch

In Beijing on December 10, a total of 13 prizes were handed out to Chinese rock musicians at the third annual Midi Awards, an independent ceremony that recognizes achievements in the Chinese rock scene. Long Shen Dao, a dreadlocked Chinese reggae band who occasionally incorporate traditional Chinese instruments into their music, were the night’s big winners, taking home the awards for Album of the Year and Best Rock Performance by Group With Vocals. Other winners included veteran rocker Zuoxiao Zuzhou, folk singer Hao Yun, alt-rock outfit Gala and heavy-metallers Yaksa, among others. Sponsored by Midi School of Music, the organizer of one of China’s largest rock festivals, the awards ceremony has become an annual highlight in China’s rock scene calendar, though mainstream media remain largely ignorant to its existence. Book

The Ideal Is Plump By Feng Lun

Borrowing its title from the popular Chinese idiom “the ideal is plump, but the reality is skinny,” private entrepreneur and real estate bigwig Feng Lun’s new book discusses how social environments and policies in China have affected the development of its private enterprises, and what kind of social system we can expect to see in the future. With over 20 years’ business experience, Feng won the title of “the real estate industry’s thinking man” with the release of his first book, Growing Wildly, which was published five years ago. Born in the late 1950s, Feng founded his company Vantone in the early 90s and led it to become one of the top real estate developers in China. Feng has also been active in the development of NGOs in China, advocating reform and the building of a civil society.

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After showcasing oil paintings by local artists in China’s northeast and northwest regions, “Migrating Modern – Oil Painting in the Literati Tradition,” a large touring exhibition platform sponsored by the China Artists Association, came to its third stop in Hangzhou, a beautiful city in the China’s southeast Zhejiang province. Worlds away from the wild and vigorous style of the northern works, artists in southeast China, which has a long history of fine art, tend to be more restrained and graceful. Following its opening on November 11, 2011 at Zhejiang Art Museum, the exhibition ran for a half month and displayed nearly 400 works from almost 300 modern artists in the region. NEWSCHINA I February 2012


COMMERCIAL Listings

Thai Luxury Mall Targets Chinese Tourists Central Retail Corporation (CRT), Thailand’s leading retail company, plans to attract more Chinese mainland tourists to shop in their new luxury iconic landmark and Asia’s ultimate retail destination “Central Embassy.” The luxury mall located in the heart of Bangkok’s major shopping area, and connected by two Skytrain stations, is scheduled to open in 2013. The Chinese tourists’ spending is expected to account for 25 percent of the shopping mall’s revenue, according to Chart Chirathivat, Managing Director of Central Embassy. The projection is a 50/50 split between local consumers and tourists.

Among the tourists almost half of them will be Chinese, explained Chirathivat. With the decline of the US and European markets, the company sees great growth potential in Asia and particularly in China. The current number of Chinese customers spending in CTR’s current shopping mall in downtown Bangkok is roughly 10 percent of the total of tourist spending. Central Embassy is a combination of cutting-edge design technologies, and flowing contours define a 37-floor building, comprised of an eight-story retail podium, verdant sky terraces and a 6-star hotel tower Park Hyatt that come together in a blend of

originality and integrity, said Chirathivat. Chirathivat states that at least 30 percent of the stores will be exclusive and the rest will be mainly flagship stores. And the mall is designed to give the shoppers a luxury feel in every possible way.

Knigge Akademie Knigge Akademie was established in Germany in 1993. This year, we have opened a branch in Beijing, to broaden our business and attract more foreign tourists and businessmen. Knigge Akademie has decided to create its own "Hotel Guide" for China, which will be published in 2012 in Europe and North America. All hotels in this book undergo training and certification by Knigge Akademie to ensure that they meet western service standards, including English language certification for key members of staff, and enforcement of service standards that customers would expect in their home countries, from concierges to wait staff. Staff at all of the hotels are trained by German tutors who are IHK certified and professionals in the hotel and restaurant business, and are known for their ability to manage hotels. It normally takes one week to bring a hotel to the requisite standard for certification. Knigge Akademie is currently working hard to train hotel staff, and compiling information in our new hotel guide. For more information or to see the hotel guide visit the homepage at www.knigge-akademie.cn

Chinese Business Figures Awards

Sun Tzu Garden

Festive Celebrations

Built against a mountain, Sun Tzu Garden in Suzhou of Jiangsu Province was the place where ancient Chinese writer Sun Tzu wrote his military strategy books in great concentration. A stream flows through bamboo pipes from the mountain to the front of the hut, which is furnished with an ancient bed and stool, as well as a coir raincoat. The hut is bordered on one side by a vegetable field, and on the other by a bamboo booth; these simple surroundings were the setting of Sun Tzu’s hermetic life. Outside the Sun Tzu Garden, there are two parallel walkways that span 1300 square meters. On the walkways stand pillars engraved with the text of Sun Tzu’s classic The Art of War. To the sides are the Generals’ Wall and Calligraphers’ Wall. On the Generals’ Wall, there are epigraphs from 16 contemporary generals, and the work of 17 contemporary calligraphers adorns the Calligraphers’ Wall. On the stage to the northeast of the walkways, you will find a bronze statue of Sun Tzu, and the Sun Tzu Hall sits behind the statue. NEWSCHINA I February 2012

Held at Beijing’s Kerry Hotel, the 2011 CCTV Chinese Business Figures Awards Ceremony was attended by a host of VIPs and entrepreneurs, among them were former German Premier Gerhard Schroeder and Chinese pianist Lang Lang. Both were warmly welcomed by the hotel’s general manager Johnson Wong.

On December 8, the Somerset Grand Fortune Garden Beijing organized a Christmas party for residents to celebrate the upcoming festival season. About 130 residents attended the party, where guests were thanked for their support over recent years with a feast of pizza, turkey and Christmas ham. Santa Claus arrived to give out presents to children, and the evening ended on a high note with a lucky draw from Residence Manager Kevin Wang and other department managers.

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Commentary

Time to Cap Tax Collection Disproportionally high government revenue, which is outpacing GDP growth, is harmful to the overall economy. Drastic measures are needed By Qiu Feng

O

fficial data released by the Ministry of Finance indicates that  For too long, various government agencies have portrayed the colthe revenue of the Chinese government in the first 11 months lection of more revenue than what the official budget stipulates as of 2011 reached 9.73 trillion yuan (US$1.537tn), marking a some kind of exceptional achievement; bigger is, surely, better. In 26.8 percent increase on 2010. The figure has heightened the persis- reality, the disproportional concentration of wealth in the hands of tent criticism of the heavy tax burden in China. government is harmful to the economy, and prevents people from According to a report by the Chinese Academy of Social Sciences, taxes accounted for 32.2 percent of China’s GDP in 2009, which increased to 34.5 percent in 2011, making China one of the world’s most taxed countries. However, the authorities reWhile what does and does not count as tax revenue fute that the tax burden is excessive. In December may be open to debate, there is no doubt that the 2011, the Ministry of Finance released its own data, government has collected far more revenue than was arguing that according to IMF standard, total taxes only account ed for 26.4 percent of annual GDP in authorized in the national budget 2010, much lower than the 36.4 percent world average, and both the 40.8 percent average in developed countries, and the 32.9 percent average in developing countries. The discrepancy mainly lies in the different criteria adopted by those doing the math. For example, the official figures enjoying the fruits of China’s development. There should be a limit do not include lucrative land grant fees and various fines. While on how much revenue the government can obtain from the people, what does and does not count as tax revenue may be open to de- and that is why an annual budget is necessary. bate, there is no doubt that the government has collected far more  As grievances run high over rising taxes and unchecked inflation revenue than was authorized in the national budget approved by the of revenue, the government should subject its collection to effective National People’s Congress (NPC) in early 2011, which anticipated supervision by the NPC. As they begin to prepare their budgets for an 8 percent increase in government revenue, less than one third of the coming fiscal year, government departments should respect the the actual figure. legal process, and set out a budget it intends to follow. This means 2011 was not the first year that revenue outstripped the budgeted that some institutional arrangements, including tax cuts, are needed target. In fact, the discrepancy has become routine, highlighting how to keep the government’s revenue stream in check.  the annual budget, which must be approved by the NPC, has not   been taken seriously by enforcers. (The author is a freelance media commentator)

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NEWSCHINA I February 2012


February 2012