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POLITICS Power Cut: Ministries Merge INTERNATIONAL Noisy Neighbor: N Korea Rumbles



How a single government policy has resulted in the rejuvenation of some of China’s most vulnerable communities as it drives others to the brink of extinction $4.99

Volume No. 057 May 2013

SPECIAL REPORT Decade of Pain: SARS Survivors


Published by China Newsweek Corporation Publisher: Liu Beixian Executive Directors: Liu Beixian, Zhou Jianming Editor-in-Chief: Wang Xiaohui 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: Sean Silbert Address: 5th Floor, 12 Baiwanzhuang South Street, Xicheng District, Beijing, China Post Code: 100037 Tel: 86-10-88395566 Fax: 86-10-88388045 Email: Art Department Art Director: Wu Shangwen Art Editor/Designer: Zhang Dawei 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: Toronto Office Director: Lai Hailong Address: 51 Halstead Drive, Markham, ON Canada L3R7Z4 Tel: 1-905-604-6150 Fax: 1-905-604-6170 Email: Marketing Director: Wang Chenbo Account Manager : Ren Jie Tel: 86-10-88388027 Circulation Manager: Yu Lina Tel: 86-10-88311834 Advertising Director: Gao Weiwei Tel: 1-212-481-2510 Marketing Promoter: Jerry Meng Tel: 1-212-481-2510 New York Office: Wang Yongzhi, Ruan Yulin, Li Yang Washington Office: Wu Qingcai, De Yongjian Los Angeles Office: Mao Jianjun San Francisco Office: Liu Dan Houston Office: Wang Huan London Office: Zhou Zhaojun Tokyo Office: Sun Ran Paris Office: Long Jianwu Bangkok Office: Yu Xianlun Kuala Lumpur Office: Huang Hongbin Moscow Office: Jia Jingfeng Manila Office: Zhang Ming Berlin Office: Huang Shuanghong Sydney Office: Zhu Daqiang Legal Advisor: Allen Wu ISSN 1943-1902



The “Chinese Dream” should be safeguarded by the rule of law


fter first raising the concept of the “Chinese have been the inspiration behind the term. Repredream” when he became leader of the Com- senting a set of ideals including freedom, the opmunist Party of portunity for prosperity and China in November 2012, Xi success and upward social Jinping again elaborated on The so-called “rejuvenation mobility achieved through the term’s meaning in a keyhard work, the concept is of the Chinese nation” can note speech concluding this the national ethos of the US, only be achieved through year’s session of the National safeguarded by its constituindividual Chinese citizens People’s Congress, at which tion and legal system. he was made China’s presiThe legal aspect is exactly dent, on March 17. In the where China lags behind. speech, Xi defined the Chinese dream as “a rich and With legal and political barriers, as well as discrimistrong state, a prosperous nation and a happy people.” nation in all aspects of life including housing, social Compared to his earlier speech, in which he in- society, education and employment, China’s social terpreted the concept as “the rejuvenation of the mobility is becoming increasingly rigid as class Chinese nation,” Xi this time broadened the defini- becomes more stratified. The result is that despite tion to include individual citizens. “Chinese people huge internal migration within China, upward soshould have the opportunity to excel, to see their cial mobility has become increasingly difficult for dreams come true, to grow and prosper along with individual people. the country and the times.” If the Chinese dream is ever to become tangible, For a long time, in formulating its visions and it will require the Chinese government to treat each values, the government has focused primarily on of its citizens equally, and to embed such values in collective concepts such as the State and the na- its everyday policy and implementation. tion. Finally, it seems to have acknowledged that In recent speeches, both Xi Jinping and Li Keqthe so-called “rejuvenation of the Chinese nation” iang, China’s new premier, emphasized the imcan only be achieved through individual Chinese portance of the rule of law, and most of all, rule citizens. If a nation’s rejuvenation cannot bring per- by constitution. During the press conference consonal happiness and prosperity, it is meaningless, cluding the NPC session, Li went even further, and not worth striving for. pledging that his government would strive to grant To ordinary Chinese people, rejuvenation of the people equal opportunities, regardless of their famChinese nation means better education, higher in- ily background or whether they are rural or urban come, more reliable social security, a healthier envi- residents. ronment and better quality of life. In other words, Now, with the leadership transition officially it means a life of freedom and dignity. concluded, there has been enough talk – it is time In this sense, the concept is universal, and is rem- for the government to transform their promises iniscent of the “American dream,” which may well into concrete policies and action.



Cold Shoulder

Photo by CFP

Under the pretext of environmental protection, millions of indigenous subsistence communities are being relocated from their ancestral lands into urban areas. The result has been further environmental degradation and the loss of entire cultures. NewsChina reports on two disparate peoples on the front line of this controversial “eco-migration” policy, and sheds light on their equally different responses



01 The “Chinese Dream” should be safeguarded by the rule of law 10 Super Ministries : Who Wins? 26 Party Membership : Trimming the Fat

Cover Story



12 Ecological Migration : Disinformation, Displacement, Destruction/Land of Hope/ Wang Xiaoyi: “There is no Vacuum”

28 NGO Regulations : Nonprofit,Nonstarter 30 Micro-corruption : Friends with Benefits


P28 NEWSCHINA I May 2013



P38 economy

32 Premium Liquor : Low Spirits 35 Smartphone Apps : Let the Games Begin 38 Offshore Yuan : No Way Back special report

42 SARS – 10 Years On SARS SCARS/The Price of Survival international

52 Xi Jinping in Moscow : Bear Hugs 54 North Korea : Friends Like These culture

56 59

The Face of Chiang Kai-shek : In the Face of Power Zuoxiao Zuzhou : He Rocks




62 Boxing : Come Out Swinging outside in

64 67

Datong : City at the Coalface Flavor of the Month : A Return to Hunan


04 MEDIA FOCUS 05 What They Say 06 NEWS BRIEF 08 Netizen Watch 41 China by numbers 66 real chinese 68 ESSAY 70 CULTURAL LISTINGS 72 Commentary


NewsChina Chinese Edition

Oriental Outlook

March 18, 2013

March 4, 2013

Can China Truly Urbanize?

Corpulent China

During its recent conferences, the new Chinese leadership has once again emphasized further urbanization as an engine for stimulating domestic consumption, which continues to lag behind other major areas of growth.The need to get Chinese people spending rather than saving is so urgent that the government has even added urbanization rates to a list of criteria for evaluating official performance. A growing number of rural citizens have duly flooded into the cities only to find themselves without legal access to housing, education and social welfare. As a result, while social stability has been undermined, the consumption rate has barely shifted. Analysts have argued that sustainable urbanization is only possible when migrant workers are afforded equal status to urban citizens.Vested interests, however, have pushed back against reformers, arguing that ending the long-standing two-tier hukou system, effectively an internal visa dividing the population into urban and rural workers, is too costly and complex a task.

Southern Metropolis Weekly

According to the WHO, 38.5 percent of China’s 1.37 billion people were classed as overweight in 2010, a 13 percent increase since 2002. By 2015, the organization predicts, some 50-57 percent of the Chinese population will be overweight or obese. White collar workers are the highest risk group for obesity, with poor diet and a sedentary lifestyle coupled with stress leading to increased rates of diabetes, strokes and heart disease. Another contributing factor pointed out by nutritionists is the culture of “feasting,” with people tending to overeat at work-related banquets and during national festivals. The future burden of a fatter population on China’s healthcare system is also a cause for concern, with few regions equipped to deal with the anticipated influx of cardiovascular, liver and kidney patients which will likely result from an increasingly overweight population.

China Economic Weekly February 20, 2013

Breaking the Ice Despite less than 20 years of experience in the diamond trade, Chinese diamond retailers have been reaping major profits of 300-500 percent from a consumer base keen to stock up on value-retaining commodities. Industry watchers, however, are already declaring the good times officially over, as diamond supermarkets have sprung up throughout the country to cater to demand in the world’s second biggest diamond consumer marketplace. These supermarkets offer a much lower price by minimizing the use of middlemen between jeweler and buyer, offering cut-price stones accompanied by reliable documentation, something online retailers have struggled to achieve. City in Love, China’s first diamond supermarket, has announced it will set up 35 more branches in the next five years.

February 27, 2013

The Organic Illusion Anxious about the country’s growing litany of food scandals, well-to-do Chinese consumers have attempted to go organic, believing the foodstuffs labeled as such are safer to eat, free from artificial fertilizers, pesticides and chemical addictives. Scientists have argued, however, there is no evidence yet that organic food is any healthier than non-organic equivalents, the main difference being the price tag. Furthermore, foods labeled “organic” in China are not required to pass the kind of rigorous screenings common in Europe and North America, with only the finished product, rather than the whole industrial chain, subject to regulation. Domestic food scientists have stated that China could be years off producing certifiably organic food.


Xinmin Weekly March 4, 2013

Celebrity Scares Li Shuangjiang, a renowned PLA singer, has come under fire since his son, claimed by media sources to be older than his stated age, was implicated in the gang rape of a young woman in late February. This was just five months after being released from a year’s “re-education” for drunk driving. Although the case is still under investigation, the public has widely condemned China’s privileged elite for spoiling their children and manipulating the courts, with plenty of grist added to the online rumor mill about Li’s son’s supposed antics. Some have even speculated that Li’s son is in fact another man’s child. Such scandals are increasingly used as ammunition by those demanding China’s rich and powerful political class be held to account for the behavior of their offspring. NEWSCHINA I May 2013

“A leading man will never draw his sword immediately after a single disagreement – only bit parts do that.”

“According to China’s Electoral Law, only criminals, those under 18 years of age and the mentally ill are prohibited from voting. Given I am neither a criminal nor under 18, the reason why I have never received a ballot in the past 56 years must be because I’m a madman.” 56-year-old writer Zheng Yuanjie mocking China’s election system.

“With genuine freedom of the press, we would probably face a deluge of gossip, scandal, and news about sex, violence, and other things that sell. But we have to know that this is the only path to true freedom.”

Bai Yansong, a respected anchor with State

broadcaster CCTV, on the need for openness in the media.

“Of course I have no confidence in domestic baby am I supposed to know where that remaining one percent is?”

Cui Yongyuan, a CCTV anchor and member of Chinese People’s Political Consultative Conference (CPPCC), China’s top political advisory body, on the official proclamation that 99 percent of domestic milk powder is up to standard. “The national literature awards are designed to give a group of people loftier titles and pay rises, rather than judging their works. Such awards may be profitable to writers, but they are definitely harmful to literature.” Mongolian writer and delegate to the National People’s Congress (NPC) Ah-Lai on China’s cynical literature awards. NEWSCHINA I May 2013

Illustration by Wu Shangwen

Vice Foreign Minister Cui Tiankai responding to the public’s criticism of China’s kid-glove approach to its territorial disputes.

“We actually know nothing about the government, just trivia.” Chen Defa, a member of the Guangzhou branch of CPPCC, calling for an extension of the CPPCC’s right to information.

“We eat toxic food when our eyes are open, and we breathe toxic air when they’re closed.” Huang Hongyun, director of the Federation of Industry and Commerce in Chongqing Municipality, on public worries about China’s food safety and environment.

“As a‘flower of the country’[China’s official metaphor for children], I believe my poor school performance is attributable to toxic uniforms.” An elementary school student in a vox-pop on the “toxic” school uniforms scandal in Shanghai

“The biggest barrier preventing ordinary consumers from protecting their rights and interests is that they have to burn their houses to get rid of the mice.” Guo Naishuo, a NPC delegate, on the high cost of consumer protection.


Top Story

New Cabinet to Promote Deeper Reform “With an austere government, we will win the trust of the people, and bring them benefits.To allow people to live well, the government must tighten its belt.”

“We are firmly opposed to ritualism, bureaucracy and hedonism, and we will fight corruption in all its forms.” Premier: Li Keqiang

Presdient: Xi Jinping

Vice-President: Li Yuanchao

Vice-Premier: Zhang Gaoli

The National People’s Congress, China’s legislature, concluded its annual session on March 17 by completing the government’s once-in-a-decade leadership transition, with General Secretary of the Communist Party of China (CPC) Xi Jinping elected as the country’s new president, and Li Keqiang leading the new State Council, China’s cabinet. With Xi and Li both born in the 1950s, the members of the new State Council’s standing committee are distinctly younger than their predecessors. Four members of the 10-man committee are under 60 years old, compared with only one in the previous lineup. “The post-1950s leaders were young during China’s Reform and Opening-up, an experience that will bolster their resolve in the current reforms,” Zhu Lijia, director of public administration at the Chinese Academy of Governance, told NewsChina. “Meanwhile, the remaining over-60s help maintain the stability and continuity of reform, which is of particular importance during this transitional period,” he added.


Vice-Premier: Liu Yandong

With China’s population and land advantages proving less and less beneficial, and its income gap widening, calls for deeper reform have reached unprecedented levels – while previous governments struggled with the question of what needed reforming, the new government now faces the specifics of how reform should be carried out. Analysts have thus noted another feature of the new cabinet: 40 percent of its 35 members (10 from the State Council and 25 ministers) hold a doctorate degree, a higher ratio than ever before, with most specialists in the fields of the arts and law. Following the example set by Xi Jinping, who holds a doctorate of law and has emphasized “government by law,” Li Keqiang, who holds a bachelor’s in law and a Ph.D in economics, pledged at his first press conference to “be loyal to the constitution and to the people.” “At the beginning of Reform and Opening-up, China needed officials with the technical background to promote industrialization, while as the focus shifts to social

Vice-Premier: Wang Yang

Vice-Premier: Ma Kai

and political reform, the country needs more official ‘experts’ in arts and law,” explained Zheng Yongnian, an observer of Chinese issues from the East Asia Institute, Singapore. The shift has been immediately reflected in the latest government structure reshuffle, in which several controversial ministries like the Ministry of Railways and the Ministry of Health have been dissolved or reorganized (see: “Super Ministries,” page 10-12), in order, as Li Keqiang stated, to clarify the functions of the government and the market by optimizing government power. “We have to reduce government power, though it is as painful as cutting our own wrists,” said Premier Li at the press conference, where he also proposed a detailed raft of anti-corruption measures, including curbing new official visits and the construction of government buildings. “People’s expectation for reform is growing, as is the difficulty of implementing it. The key lies in whether or not reform can keep up with social change,” said the researcher Zheng Yongnian. NEWSCHINA I May 2013



China Tightens Housing Regulations China’s State Council issued its latest policy package targeting house sales, in a further attempt to curb rocketing property prices on March 1. In addition to an increase in both the minimum down payment and the interest rates on housing loans, the new policies have stirred the water by stipulating that anyone who sells property has to pay a 20 percent tax equivalent on their profit, a measure designed to clamp down on real estate hoarding. People flood to go through house-sales facilities However, rather than welcoming the policies, people have com- before the new polices come into effect, Nanjing plained that the sellers will simply transfer the tax to buyers, making prices even higher. Since last January, China has issued an array of policies to cool the overheated real estate market, yet house prices have continued to rise, especially in big cities like Beijing and Shanghai. Given the limited alternative channels for investment in China, analysts do not believe the new policies will help pull funds out of the real estate market.


Qingdao Made Carrier Base China’s first aircraft carrier, the Liaoning, on February 28 docked at the military port at Qingdao, Shandong Province, where it will undergo a series of tests and experiments in preparation for going into service. Built four years ago, the port, according to naval experts, is well equipped for aircraft carriers with a harbor area of over five million square meters and a depth of 25 meters. Its new rails, large hoists, high-voltage substations and underwater pipes are adequate to supply the carrier with volumes of water, gas, oil and electricity far in excess of those required by ordinary warships. Experts said the port adopted new concrete technologies in constructing the nation’s longest breakwater, which had resisted four violent typhoons before it was officially put into use. Over 600 kilometers from Beijing, Qingdao is home to China’s Northern Fleet, mainly responsible for safeguarding the Yellow Sea and the capital. NEWSCHINA I May 2013

China’s Forbes equivalent, Hurun, issued its 2013 Global Rich List on February 28, for the first time setting its threshold at US$1 billion. According to the latest list, the US retained its top spot with 409 billionaires, while in the capital market, its 211 billionaires lost out to China’s 212. Altogether 1,453 billionaires worldwide are included in Hurun’s rich list, with the Mexican electronics tycoon Carlos Slim Helu winning the “richest man” crown for the second time with assets valued at US$410 billion, followed by Warren Buffett, and Amancio Ortega, founder of Spanish clothing retailer Zara. For the first time, Bill Gates dropped out of the top three. The list also indicates that real estate remained the most profitable industry both domestically and worldwide. Among the top 10 real estate developers, seven are from China (five of them are in Hong Kong). 500






Source: Hurun Global Rich List 2013


Photo s by CFP

Residents in Shanghai, China have been worrying over their tap water since a colossal number of diseased pig carcasses were found floating in the Huangpu River, the city’s major water source. According to incomplete official statistics, the total number of dead pigs had exceeded 14,000 by March 17, while officials continued to insist that water safety has not been compromised. Based on the pigs’ ear tags, the Shanghai authorities traced the dead animals to pig farms upstream in the neighboring city of Jiaxing, Zhejiang Province, where, according to media reports, the fast expansion of pig breeding has led to a surge in the illegal dumping of carcasses. Given that porcine circovirus has been detected in the carcasses, the government has promised to continue monitoring both water quality and pork products.

China #1 for Billionaires in Capital Market


Dead Pigs Found in Huangpu River

US China (including Hong Kong, Taiwan and Macao) Russia Germany UK India Switzerland Brazil France


What’s Making China Angry ?

Poll the People Do you support the legalization of gay marriage in China?

Chen Chubi, a woman from Shenzhen, found that her annual charity donation of 400 yuan (US$64) to fund the schooling of a boy (pictured, left) from rural Jiangxi Province shrank to one tenth of the original sum by the time he received it. When the boy went to Shenzhen to ask Chen to help him find a job, she met him for the first time and learned that he only received 40 yuan (US$6.4) a year through the government charity program, and never received a single one of the several letters Chen had sent him, let alone the pocket money in the envelopes.

Yes 8,584,693 60.2% No 5,665,776 39.8% Source:

Most Circulated Post

What’s Making China Sad ?

Retweeted 389,059 times

To repay his girlfriend’s credit card debt, a student from Guangzhou stole goods worth more than 11,000 yuan (US$1,770) from dormitories at his college. To his dismay, the girl dumped him after the debt was paid. The boy was sentenced to two-year imprisonment March 16.

What’s Shocking China ? A gang of eight was arrested by police in Shuangfeng county, Hunan Province, for blackmailing government officials with forged sexually explicit photographs. By sending 210 threatening letters, the gang had made 255,000 yuan (US$41,000) from 48 officials.


On March 6, the mother of a two-year-old daughter was harassed and handcuffed by urban management officers for selling fruit in the street. She was prevented from hugging her scared, crying daughter goodbye as she was bundled into a car. NEWSCHINA I May 2013

Top Five Search Queries On

Over the week ending February 18 Li Keqiang 611,318 The straight-talking new premier took office in early March.




CCTV Consumer-Rights Gala 483,134 Scandals exposed at the gala on March 15 were mocked by netizens as a way for CCTV to extort advertising revenue. Huaxicun Village 295,407 The village, allegedly China’s richest, was brought into the spotlight after the recent death of its beloved 85-year-old Party secretary.

Beijing Blizzard 57,889 Heavy snow hit Beijing March 20, a rare occurrence so late in the year.

Top Blogger Profile Ge Jianxiong Followers: 658,016 The 68-year-old historian from Fudan University in Shanghai is a renowned advocate of educational equality and a staunch opponent of academic corruption and fraud. He is also one of the most outspoken members of the Chinese People’s Political Consultative Conference (CPPCC). At this year’s session of the CPPCC in early March, Ge proposed that the regulations should be clarified as regards the benefits of retired top national leaders, and proposed that their descendents should not enjoy the same benefits, otherwise the unchecked privileges of around 100 retired national leaders and their families would cost too much of the taxpayer’s money. NEWSCHINA I May 2013

Heals on Wheels

Some of the pictures used in this section are from the internet

Wuhan Explosion 82,528 The explosion at a chemical storage facility on March 19 left two dead and more than 10 injured.


A patient from Qinhuangdao, Hebei was shown in a picture using an IV drip suspended on a bamboo pole sticking out of the window of a car on the highway.

Centenarian Couple

Fake Envoy A swindler who claimed to be a senior official named Zhao Xiyong with the State Council Research Office had been employed by various regional governments after making official visits around Yunnan Province. The State Council Research Office recently issued a notice that no-one named Zhao Xiyong worked there.

The picture of 104-yearold Zhang Mucheng with his 105-year-old wife Xu Dongying, dressed in hisand-hers clothes, went viral online.

Tire Killer Two repairmen from Hebi, Henan, spread iron caltrops across an expressway to puncture tires so they could get more business.



Super Ministries

Who Wins? As China’s protracted leadership transition rounded off, the country’s new cabinet announced a major shakeup of government ministries. Will this slimming down of government be enough to break up obstructive special interest groups?

China’s new premier Li Keqiang (left), shakes hands with predecessor Wen Jiabao during the National People’s Congress, Beijing, March 5


ith the conclusion of the annual session of the National People’s Congress (NPC) on March 17, the country’s oncein-a-decade leadership transition was officially completed. As expected, Xi Jinping, the new chairman of the Communist Party assumed the ceremonial post of president and a new State Council (China’s cabinet), led by the country’s new premier Li Keqiang, was unveiled. Amidst a raft of high-profile appointments, the State Council announced plans for a new round of restructuring, an early indication that the new leadership would continue to follow an incremental approach to reform in both the economic and political realms.

Super Ministries

Among the proposed changes, the most notable, if widely expected, move was the dissolution of the powerful Ministry of Railways, putting an official stamp on a process begun over a year ago. The recipient of hundreds of billions of yuan each year to finance the construction of


Photo by Liu Zhongjun

Photo by Sheng Jiapeng

By Yu Xiaodong

People pose in front of the compound of the former Ministry of Railways, March 14

China’s ever-expanding high-speed rail network, the bloated MoR had become riddled with corruption, with a number of recent scandals alerting top leaders of the need to break up what many called a relic of the planned economy era. The former railways minister Liu Zhijun is currently in government custody on corruption charges relating to more than 10 billion yuan (US$160m) in embezzled funds. According to the restructuring plan, a for-profit railway company similar to America’s Amtrak or France’s SNCF will be established to oversee daily operations of China’s vast and overcrowded railroad network, as well as shoulder the double burden of MoR debt currently set at 2.7 trillion yuan (US$433bn), while a new Railways Bureau under the Ministry of Transport will be established as a regulator. Effective immediately, the newly-bolstered Ministry of Transport will assume total responsibility for the MoR’s former functions. The arrangement is argued to be an effort at further separating government from enterprise, and taking enforcement out of the hands of policymakers. NEWSCHINA I May 2013

Another major change is the dissolution of the influential National Family-Planning Commission (NFPC), an agency in charge of enforcing the highly controversial and increasingly embattled One Child Policy, another government body which has felt the noose tighten in the wake of recent scandals. The agency and the Ministry of Health will be merged to form a new National Health and Family Planning Commission, with the NFPC’s demographic policy wing transferred to the National Development and Reform Commission (NDRC), China’s foremost macroeconomic agency. The change has led to speculation that the One Child Policy, already a prime target for academics and media critics claiming that the policy is now hindering, rather than helping, China’s development, may be overhauled or even abolished. As China is faced with demographic challenges such as a dropping birth rate and a rapidly aging population, many experts have called the government to loosen or even scrap the One Child Policy altogether. However, officials from both the NFPC and the Health Ministry have flatly denied that the One Child Policy will be loosened. “This is like drinking poison to quench one’s thirst,” Zhou Yuxue, a senior official from the NFPC told the media during the NPC session, who insisted that maintaining a low birth rate remains a core State policy. Professor Mao Shoulong, vice-director of the Academy of Public Policy of Renmin University, who participated in the drafting of the restructuring plan, told NewsChina that no consensus within the State Council has been reached regarding the family planning policy. But with the dissolution of the NFPC, it is inevitable that the One Child Policy, with its corresponding enforcement agency significantly weakened, will have to be made more flexible to cope with future demographic challenges. Another change that has attracted much overseas attention is the merging of several maritime bodies with overlapping and conflicting authority, most crucially the China Marine Surveillance Bureau and the Fishery Patrols Department under the Ministry of Agriculture, the General Administration of Customs’ Anti-smuggling Office and border agencies under the Ministry of Public Security (China’s State police). These agencies have now all been merged into a significantly enlarged State Oceanic Administration, which will take sole charge of maritime law enforcement among its other functions. With multiple maritime authorities brought into a beefed-up “super ministry,” the move seems to be signifying that China is making continuous efforts to move away from its historically land-centric security policy towards building itself up as a maritime power. Another widely anticipated super ministry was also unveiled by the State Council - the State Food and Drug Administration has been merged with the State Commission on Food Safety and several other agencies, seen as an official response to recent and ongoing food and pharmaceutical scandals which continue to embarrass the government. Other changes include the dissolving of the State Electricity Regulatory Commission, which will be absorbed into the National Energy Administration. In the media sector, the agency responsible for surveillance of China’s print media will be amalgamated with the agency that oversees broadcast media to form the State Administration of News, Broadcasting, Film and Television. Precisely how these specific mergers will effect NEWSCHINA I May 2013

general policy, however, remains a mystery.


In recent years, the Chinese government has launched several rounds of “streamlining” to make the government more “service-oriented” and efficient. The latest restructuring plan, left until after the leadership transition, is one of the boldest restructuring efforts made by the Chinese government since the previous leadership transition. Consensus is growing within China that the biggest obstacle to serious political reform is the continued existence of powerful vested interest groups, specifically State-owned enterprises. The new leadership’s willingness to dissolve powerful agencies like the MoR, which have been accused of behaving like independent kingdoms in the past, has been well-received as a symbolic paradigm shift. Many hope that the new cabinet will put the people first. But for many others, this restructuring is undeserving of the praise it has received, as it is being carried out in the “old style” – behind closed doors, with few details being made open to the public and with no indication that State power is being rolled back in these key areas. “Any meaningful reform should deal with increasing transparency and constraining government power within a legal framework” Professor Liu Junsheng from the China University of Political Science and Law told NewsChina. “This is what this plan is missing.” According to Liu, the focal point of China’s reform should be the rebalancing of the relationships between government and the market, and between the government and society. Liu’s argument is echoed by Professor Zheng Yongnian, director of the East Asian Institute under the National University of Singapore. “To merely compress 10 offices into one is not political reform,” he wrote in a widely cited commentary. “Restructuring is an adjustment of distribution of power within a government which has, so far, not given up any power.” According to Professor Zheng, for any political reform to bear fruit, the government has to transfer more power to society as a whole. In response to public doubts and criticism, already surfacing even in the official media, China’s new leaders have called for patience and pragmatism. “To reform means to cut one’s own flesh, which requires great determination,” Wang Yang, former Party chief of Guangdong Province and one of four new vice-premiers, said in a seminar during the NPC session. Yu Zhengsheng, a Politburo member who is now heading up the National People’s Political Consultative Conference (NPPCC), the country’s top advisory body, warned against “unrealistic slogans, demands and political promises.” “The urge to force things to see a quick result is a major factor behind the devastating mistakes made in our history,” Yu said in a NPPCC meeting, apparently referring to various revolutionary movements launched in the Mao-era that ended up in creating economic and political disasters. In answer to a question from the Singapore newspaper Lianhe Zaobao during a March 17 press conference, Premier Li Keqiang, who is presiding over the proposed restructuring efforts, conceded that “one has to make a choice between idealism and reality.” Admitting that it is “harder to touch one’s own interests than to touch one’s own soul,” and that future reforms would require both “wisdom



Government Restructuring Dissolved

Managed by:

Function: “Determine railway development planning and policy”

The Ministry of Transport

Established: National Railways Bureau, the National Railway Corporation


Managed by:

The Ministry of Land and Resources

National Family Planning Commission

State Administration of Traditional Chinese Medicine Function: “Determine demographic planning, strategy and policy”

State Food and Drug Administration State Commission on Food Safety

National Development and Reform Commission

Established: State Food and Drug Administration

State Administration for Industry & Commerce General Administration of Quality Supervision, Inspection and Quarantine

Functions: “Administration of food and drug safety” Functions: “Administration of food and drug safety”

and resilience,” Li pledged that he would “wade into the deep waters,” a new Party buzzword which has emerged from the recent handover. Such ambiguous speeches give little indication as to what the future holds for China’s political sphere, leaving the press and the public ample room for speculation rather than genuine analysis.

Now or Never

Former State Oceanic Administration

Managed by:

Many are concerned that the failure to address issues such as transparency and accountability will not only make the government repeat the mediocre results of previous attempts at restructuring, it may even deepen the extent of existing problems. “In every previous round of government streamlining, the authorities have failed to achieve basic objectives while creating new problems,” Ni Xing, professor and vice-director of the School of Government at Sun Yat-sen University, told NewsChina. For example, the creation of the National Development and Reform

Expanded State Oceanic Administration

China Marine Surveillance Agency

Coastguard of Ministry of Public Security

Fisheries of Ministry of Agriculture

General Administration of Customs AntiSmuggling Taskforce

National Energy Administration Expanded National Energy Administration

Managed by:

National Development and Reform Commission

State Electricity Regulatory Committee

Ministry of Health

Established: National Health and Family Planning Commission



Established: State Administration of News, Broadcasting, Film and Television

General Administration of Press and Publications

Ministry of Railways

Established: National Railways Bureau

State Administration of Radio, Film and Television



Commission (NDRC), China’s first-ever super ministry, placed unprecedented power to shape economic and industrial policy in the hands of a few key agencies, creating a body unswervingly generous to State-owned corporate giants in such monopolized sectors as oil, power generation, banking and telecommunications at the cost of the private sector. While optimists hoped that the NDRC would be a prime target in the latest reshuffle, not only was its power left untouched, it was also granted additional power to micromanage the world’s second-largest economy. The truly “deep waters,” in the view of many critics of current policy, surround the island fortresses of China’s vastly wealthy and bloated State monopolies, which maintain their power and influence entirely through their political backing rather than through genuine commercial value. “If the government fails to empower society and constrain its own power, it is likely that vested interest groups will forestall any serious political reform once they’ve finished carving up available power and solidifying their grip,” Professor Ni told NewsChina. NEWSCHINA I May 2013






Aoluguya Evenki herders in traditional dress


Photo by Feng xunlin

The central government’s controversial and murky “eco-migration” policy has left many of China’s most remote ethnic groups locked in a battle for their very survival. While some, like the Evenki of Inner Mongolia, have seen their way of life all but vanish, others, like the Tibetan nomads of the Qinghai plateau, have thrived by taking control of how the policy is enforced in their area. NewsChina’s Wang Yan visits these two very different peoples to find out why the application of a single policy could have resulted in two such different outcomes


Photo Courtesy of Aoluguya

The traditional nomadic life of the Aoluguya Evenki lasted until 2003


Disinformation, Displacement, Destruction Ten years ago, the Evenki, China’s last tribe of hunter-gathering reindeer herdsmen, were moved off the land they have inhabited for centuries in the name of environmental protection. Today NewsChina tries to find out what has happened to the remnants of this unique and tiny ethnic group By Wang Yan in Genhe NEWSCHINA I May 2013


arch 6 in Inner Mongolia dawned well below freezing temperatures. Maria Suo, 84, dressed in traditional garb, left her daughter’s warm apartment in downtown Genhe, climbed into the family minivan and set off to the family’s herding grounds tucked deep in the mountains. Despite the Siberian chill of minus four dedegrees Fahrenheit and a blizzard forecast for the afternoon, this elderly Evenki still thought nothing of a 260 kilometer drive. Accompanying Maria were her daughter De Kesha and sonin-law Zhao Sixin, both in their mid-fifties, and Long Hair, the family’s eight-year-old German shepherd. “My mother misses the reindeer and is eager to visit the herd, despite the cold,” De Kesha told our reporter, adding that elder Evenki like Maria, who grew up in the pine forests of China’s frigid north, simply cannot bring themselves to abandon their ancestral way of life. Maria is now one of the most senior elders of merely 243 Aoluguya Evenki, widely described by anthropologists as China’s smallest ethnic group who once inhabited the country’s north-


Photo by Feng xunlin

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Evenki used to live a community-based lifestyle with many families eating together during herding excursions

ern boreal taiga forests. With a semi-nomadic subsistence lifestyle comparable to those of the Sami people in northern Europe, the Evenki in Russia, the Inuit in Canada and the Dukha people in Mongolia, the Aoluguya Evenki managed to retain their nomadic and hunting culture, despite pressure to “modernize” from outside, inhabiting the vast Greater Khingan mountain range until year 2003.

Turning Point

The native land of the Evenki originally stretched from Lake Baikal in Siberia to the Heilong (Amur) river in China’s northeast. Historical records indicate that a splinter group of some 700 moved to the northwestern part of the Greater Khingan range some 300 years ago and settled there, holding onto their semi-nomadic hunter-gatherer traditions. In 1965, the Chinese government built permanent wooden housing on the river banks near the town of Aoluguya for 35 Evenki households, a settlement which grew into a small town complete with schools, a clinic and stores. Despite this development, however, most Evenki in the area still maintained the wild reindeer herds that had fed, clothed and provided a living for generations of their ancestors.


This all changed in 2003, when the local government of Genhe Prefecture announced a government-sponsored “ecological relocation project” which required that the whole of Aoluguya’s population of 498, including 232 Evenki, would be moved 300 kilometers south to a suburb of Genhe City. According to government documents made available to our reporter, the Genhe government applied to the central government for ecological emigration project status in 2001, obtaining approval in August that year. The central government agreed to allocate 5.1 million yuan (US$ 820,590) for the relocation project, funds eagerly snapped up by the development officials in charge of the project. Along with additional financial support from provincial coffers, a total of 9.8 million yuan (US$1.58m) allocated to the relocation project. In the new town area, five kilometers away from Genhe, 62 houses, 48 reindeer pens, one township government building, a school and a museum were built. In August 2003, the whole of Aoluguya was moved to the new site. On August 10, 2003, a rainy summer day, a ceremony was held to “celebrate” the final removal of Evenki from their ancestral homeland,

broadcast live by both local and national television stations. Zhang Xiaoli, an Evenki in her late thirties, remembers the scene clearly. “Twelve trucks carried 37 Evenki and over 260 reindeer to the new township.” The media hailed the project as a successful attempt to “improve the lives of Evenki” through their resettlement in concrete housing units and the domestication of their reindeer herds. In just three days, however, the much trumpeted “domestication” drive, a cornerstone of the government’s propaganda efforts, turned out to be unworkable. The wild reindeer simply refused to drink water and struggled to remain nourished in their confined pens. Many died from disease and malnutrition. Few of the surviving reindeer remained healthy. In the wild, the Evenki herds subsisted on natural lichens, not the hay and grass they were fed in the new settlement. Soon local media reports took on a grim tone. “I was sad when I was told to move. In Aoluguya, the trees were lush, and there were plenty of fish in the rivers, and the winds were gentle,” Maria Suo told he media shortly after her relocation. “Things in the new settlement in Genhe NEWSCHINA I May 2013

Photo by Feng Xunlin

The “Aoluguya” model town, a cluster of Scandinavian-style log cabins designed to attract tourists


China’s nationwide “ecological emigration project” began in 2000, resulting in the relocation of populations inhabiting ecologically fragile regions into areas with what the government called “preferable environmental conditions.” These relocations, according to officials, were expected both to enrich and improve the lives of


Photoby byWang Xinhua Photo Yan

are completely different. No trees, only howling winds… most importantly, there is no lichen for the reindeer. Reindeer cannot leave the forest.” “I don’t know what got into the heads of the officials who planned to domesticate the reindeer,” she continued. “Do they think reindeer are the same as horses and cows? No one cared how many reindeer died due to the relocation, and no one even asked us about that, never mind offering compensation.” Ultimately, to save the surviving remnants of their herds, the Evenki moved their reindeer back to the original forests of Aoluguya. At present, around 1,000 reindeer still roam and feed in the mountains. Some 50 people, mostly Evenki, continue to tend the herds through a network of eight hunting camps. Maria Suo is responsible for a herd of 400 reindeer. After a six-hour drive, Maria Suo and her companion Long Hair arrive at their herding grounds

these remote communities, most of them ethnic minority groups, while also boosting efforts at environmental protection. Back in 2003, the concept of eco-emigration

was a mystery to the Evenki. All the tribe knew about was sudden shortfall in funding for local infrastructure. However, when confronted with the new reality, this tiny community was unable to fight against the decisions being made for them. “When we were informed of the relocation, we expressed our reluctance to leave, instead suggesting that the relocation money be invested in the old Aoluguya area,” said Zhang Xiaoli. “The officials, however, told us the money set aside by the central government could only be used for the relocation project.” In a government statement obtained by NewsChina, the Genhe government, in justifying the relocation project, claimed that the forest regions where the Evenkis inhabited were suffering severe ecological degradation. “Excessive deforestation,” according to this document, had caused the lichen, the staple food of the reindeer, to wither away. There was no indication as to how these fragile wild lichens would be cultivated in the new pens set aside in Genhe. Government surveyors had argued that the domestication of their wild reindeer herds and confiscation of the Evenki hunting rifles, both key aims of the relocation plan, would help pro-


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tect wildlife. The project proved so popular with new Aoluguya Town and the daughter-in-law these officials’ superiors that in late 2004 Genhe of An Tabu, an Evenki elder, listed a number City was named a “National Ecological Model” of Evenki traditions concerning environmental by what was then Environmental Protection protection. “Evenki hunters never shot female Bureau (today’s Ministry of Environmental Pro- animals in the breeding season; they never shot tection). pheasants in flocks; they only used dead trees for Critics claim that the government’s reasoning firewood; they would never harvest all the fruit was flawed. The Evenki, from a single plant.” being dependent on the Zhang Xiaoli, a midhealth of the forests and “The forests have been dle-aged Evenki, added in many ways acting as well-managed by Evenki to this list. “No one unofficial park rangers, for hundreds of years yet, was allowed to ride on a were motivated to proreindeer except children in a matter of decades, tect the local ecosystem under six and very old from external threats. this resource has been people,” he said. “When Certainly more motivat- depleted by intruders from I was young, our family ed, activists claim, than outside.” moved around frequentgovernment-backed dely, about once a week, velopers, poachers and so as to avoid excessive opportunistic commercial interests would ulti- damage to plants due to our reindeer trampling mately prove to be. them.” “For innumerable generations, we Evenki Both the government and local historians have always had a strong awareness of forest have also subsequently acknowledged that the and wildlife protection,” De Kesha told our re- Evenki played the role of rangers in preventporter. “We were not destroying the forests. In ing forest fires, acted as guides for government 2003, when we were informed of the ecological surveyors in the forest regions, and made major emigration plan, we could not understand its contributions to the construction of local railaims, as neither the Evenki nor the reindeer were roads. threatening the ecosystem.” “We were an ethnic minority group thriving Incredibly, following the relocation, even lo- in a border area,” said Maria Suo. “For generacal government officials began to admit that tions, we lived in these mountain forests, subsistleaving the Evenki alone would ultimately have ing through hunting. We were so close to nature been better for the forest than removing them. that we could get everything we needed from Through a dozen interviews with both ordinary our environment.” people and government officials in Genhe, our In his book China’s Migration History, anthroreporter got almost unanimous confirmation pologist Professor Ge Jianxiong of Fudan Unithat the Aoluguya Evenki were not a danger to versity said of the Evenki: “This hunting tribe the forest or the wider environment. Instead, living in the mountain forests cannot be termed according to both Evenki and non-Evenki in- ‘ecological migrants.’” terviewees, the deforestation, rampant poaching “If their lifestyle and hunting activities did and excessive harvesting of wild plants which has not contribute to environmental degradation, followed in the wake of their departure has dev- they shouldn’t have been uprooted in the name astated the local environment. of conservation,” he continued. “Even if their Bu Lingsheng, Party secretary of Aoluguya situation was very difficult, or their lifestyle backTown, admitted to our reporter that for over ward, the government or outside forces only had 300 years in these mountains, the Evenki lived as the right to provide certain subsidies or advice to hunters and herders while retaining their respect allow them to relocate voluntarily.” for the environment upon which their liveliThe real motive behind the relocation, as it hoods depended. “The Evenki were not greedy,” later turned out, was that the local government said Bu. “They took just enough from nature for was using the relocation as a fundraising tool. their subsistence.” Liu Zhizhen, vice mayor of Genhe, explained to Yu Lan, 33, deputy township leader of the our reporter that the relocation was designed to


promote poverty elimination and infrastructural upgrading in order to receive generous government subsidies. Calling the relocation an “ecoemigration project” was an attempt to capitalize on a much-trumpeted national policy, a way to milk funds from central government coffers. However, Liu remains committed to official assertions that their removal genuinely improved the lives of the Evenki. Few local officials have sided with the Evenki claims that their culture has suffered as a result of the relocation project, though most now admit that conservation was never a priority. “The resettlement was for improving Evenki living conditions,” said Bu Lingsheng. “But the Evenki weren’t a factor in terms of environmental damage.”


The camps set up for the herders are a far cry from those used before the relocation. Prefabricated houses have replaced the traditional cuoluozi, or pole tent. In addition, automobiles are essential for the commute to and from Genhe, necessitating the building of roads through once-pristine forest. “We did not use vehicles in the past,” Maria Suo told our reporter. “We just lashed carts to the backs of our reindeer, including our tents. We had to move constantly to make sure the reindeer had enough lichen to eat.” The Greater Khingan mountain range and its reindeer herds have provided a rich habitat for bears, squirrels, rabbits and badgers for millennia. However, since the 1950s, deforestation has wiped out almost all the virgin coniferous woodland in these mountains. Despite the launch of China’s first Natural Forest Protection Project in the late 1990s, the damage done by logging operations was already too extensive to be completely rectified. Broad-leaved forests have since replaced the conifers. Crucially, when indigenous Evenki reindeer herders departed, poachers moved in, devastating wild animal populations with the indiscriminate setting of snares. Many reindeer have also died at the hands of poachers keen to exploit the underground trade in animal pelts and parts. Others come to harvest the forests’ once-abundant flora. “Blueberries and mushrooms, the favorite foods of reindeer in the fall, are all gone, picked by people from outside,” De Kesha told NewsNEWSCHINA I May 2013


As reindeer husbandry has withered away, the local government of Genhe has rolled out another familiar Chinese tactic for further exploiting ethnic groups for commercial purporses – turning the Evenki into a brand. In 2008, the city government invested 90 million yuan (US$14.5m) more than what was being spent on conservation, inviting Finnish company Pöyry to design an “Aoluguya Reindeer Culture Village.” All 62 brand-new houses in the relocation site were demolished and replaced with Scandinavian-style log cabins, and the local museum was given an expensive facelift. Old Aoluguya and its traditional way of life have gone, replaced with an utterly fabricated “Evenki” community, a model village which will host the quadrennial World Reindeer Herders’ Congress this July, despite the fact that the community being celebrated remains on the losing end of a struggle to preserve any vestige of their former way of life. In recent years, swarms of Chinese tourists have been attracted to the area by this retro-engineered “reindeer culture,” purchasing souvenirs made of antlers, milk and meat. Once a subsistence culture, the Evenki are now encouraged to capitalize on their “quaintness,” and market


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China. “In the 1960s, our people enjoyed a wide range of over 1,000 square kilometers. Now more and more poachers come here secretly and poaching has severely diminished animal populations.” “The most unfair thing for the Evenki is that officials have banned both reindeer herding and subsistence logging in some forest regions,” said Xie Yuanyuan, a professor from China Agriculture University and a specialist in the Evenki relocation. “They feel they’ve lost their identity as well as their homes.” The degradation and increasing nationalization of forests also means the Evenki are no longer free to graze their herds as they once did, restrictions which have prevented some herders from being able to feed their reindeer adequately. “The Evenki ask why they cannot move freely in the forests while poachers can enter and kill animals at will,” she said. “The forests have been well-managed by Evenki for hundreds of years yet, in a matter of decades, this resource has been depleted by intruders from outside.”



a family-friendly confection masquerading as authentic culture to growing armies of tourists. Older-generation Evenki who remember their former homes remain deeply attached to the reindeers and forests. However, as with similar examples of indigenous ethnic groups relocated and rebranded as tourist attractions, the younger generation are increasingly comfortable with marketing their culture. Blue jeans, the Internet and videogames appeal more to this handful of Evenki youngsters than stalking and harvesting wild reindeer in the mountains. With their trendy hairstyles and unaccented Mandarin, these younger Evenki, most of whom use their Chinese names as a matter of course, see little to gain from keeping the old ways alive, unless it’s to gouge tourists. Ma Rui, a 23-year-old Evenki, told our reporter that he “could not bear” the “boredom” of herding. “When I stay in the forest, with no cellphone reception or TV, I can only listen to the radio and count the days until I can return to the city.” While Evenki like Ma enjoy their creature comforts, their former lifeblood – the local reindeer herds – continue to decline through a combination of malnutrition, poaching and interbreeding with other deer species. Despite a half-hearted effort to pad out herds with reindeer from Russia in the 1990s, only 30 reindeer were

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ever introduced to the area, and while conservationists continue to push for a resumption of this program, few officials are inclined to listen. “Nobody is planning for the proper handling of reindeer herding… The government doesn’t care about this core issue vital to the future of the taiga (boreal forest) and the reindeers,” says Ure Ertu, an ethnic Evenki writer, “The Evenki are, to varying degrees, facing threats to the very survival of their cultural identity – transition to a market-oriented economy, tourism, the fading of their native language and assimilation into the ethnic majority.” “The damage to the ecosystem, both environmentally and culturally, is irreversible in this case, and the relocation in 2003 was a complete failure. The idea of domesticating reindeers was a mistake made by the government of the time” Ure continued. In James C. Scott’s book Seeing Like A State: How Certain Schemes to Improve the Human Condition Have Failed, the author states: “Irreversible interventions have irreversible consequences. Interventions in ecosystems require particular care, given our great ignorance about how they interact.” In the case of the Evenki, a combination of ignorance and opportunism has all but eradicated one of Asia’s few remaining hunter-gatherer cultures.


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Land of Hope Wildlife populations have exploded after years of decline on the Qinghai-Tibetan Plateau. Many have attributed the success of conservation efforts to the role of local minority communities in the Sanjiangyuan Nature Reserve project By Wang Yan in Qinghai

Qiong Zhe, 50, Tibetan herdsman and voluntary anti-poaching ranger


Photo by Zhu hongzhi


ur pickup truck left Qumahe town to judder along a dirt road towards Cuochi, a village 230 kilometers to the west. Cuochi is now the fulcrum for the Sanjiangyuan National Nature Reserve (SNNR), a sprawling alpine grassland 4,000 meters above sea level. To me, a city-dwelling Han Chinese, wild animals seemed more numerous than people in this desolate but beautiful region. Herds of Tibetan gazelles raised their graceful heads to peer with disinterest at our passing vehicle before continuing to graze. Tibetan wild asses, known locally as kiang stood as motionless and proud as the Monarch of the Glen, brown smudges on the distant horizon. Losa, 30, a Cuochi local and my driver, turned his head. “Nowadays the animals are not as scared of people as they were in the 80s and 90s,” he said. “Back then, hunting was rife and all wildlife fled at the sound of an engine.” Like most local people living in this vast and remote region, Losa used to hunt and eat local fauna. Now, he educates out-of-towners like me about the spectacular species which inhabit his area. How times change.


Sanjiangyuan, or “Source of Three Rivers,” is where the Yellow, Yangtze and Mekong

(Lancang) rivers originate, a vast area of some 366,000 square kilometers (141,313 square miles) and dominating the southeast corner of Qinghai Province. Apart from its status as “China’s water tower,” the SNNR’s glaciers are also the source of major waterways from Myanmar to Vietnam, providing drinking water to tens of millions of people. The rich turf and ample fresh water supply as well as its remoteness from the human realm has made Sanjiangyuan one of the world’s most diverse ecosystems, home to rare and unique species such as the Tibetan antelope, Tibetan wild ass, argali sheep, Tibetan gazelle, red fox, Tibetan fox, wolves, black wild yak and musk deer. In 2000 the SNNR was made a national-level nature reserve covering an area roughly the size of Germany. 7.5 billion yuan (US$1.2bn) was invested by the central government to preserve the full ecosystem with all its flora and fauna, and to maintain the livelihood of the diffuse Tibetan communities living within its borders. Studies have shown that in the last decade, enforcement of wildlife protection in Qinghai Province has resulted in increases in the breeding populations of both Tibetan gazelles and kiang. With this increasing prey base, the number of sightings of snow leopards, one of the world’s rarest carnivores, has also increased (see: “Cat’s Cradle”, NewsChina, December 2012). NEWSCHINA I May 2013

Biodiversity research conducted in August 2012 by the Sanjiangyuan Reserve Administration, the Center of Nature and Society at Peking University and the Shanshui Conservation Center reported sightings of seven snow leopards during a twenty-day field study in the SNNR, also recording a jump in the number of wild blue sheep, another major food source for snow leopards, to some 20 per square kilometer. However, the scars of the 1980s and early 1990s, when many local fauna were hunted to the brink of extinction, will take decades to heal. The Tibetan antelope, or chiru especially suffered from intensive poaching to feed the underground bushmeat, wool and traditional Chinese medicine markets. Wool from the chiru is especially prized, and was smuggled by the ton into India where it would be woven into expensive shahtoosh shawls. In the 1990s, the chiru almost became extinct as a result of poaching.

Local Voices

As our vehicle bounced toward Cuochi, we crossed the expansive Lematan range, where a motorcyclist wrapped in a heavy coat flagged us down. I almost fell over after stepping out of the warm vehicle - despite the bright sunlight, a howling winter wind kept the air temperature well below zero. The motorcyclist, Qiong Zhe, 50, told us he was a patrolman from the Chiru Brigade, an anti-poaching outfit charged with protecting chiru in the areas around Lechi village, a short drive from Cuochi. Tanned and weathered, Qiong tucked his hands into his armpits to protect against frostbite, talking up his team of 50 rangers, all of whom are volunteers from local villages. Apart from their responsibilities herding their family livestock, Qiong and his teammates are responsible for chasing off poachers or prospectors, either on motorcycle or horseback. They also perform a monthly head count of local chiru, reporting their findings to village officials who then pass on their information to zoologists and conservationists. The top figure reached so far, according to Qiong Zhe, was 800 head of chiru. “I like wild animals, and Tibetan Buddhism teaches us that every life is equal, thus we need to protect them,” said Qiong Zhe. “We started this initiative in 2010 under the influence of our neighboring village - Cuochi.” According to Gazong Cairang, Lechi’s village


chief, the whole Lematan range, an area of some Great Rivers Environmental Protection Associa717,587 square feet of grazing pasture, has been tion (SGREPA) helped his home village to set set aside for the exlusive use of chiru. “Lechi is up the Wild Yak Brigade anti-poaching initiathe traditional habitat for chiru,” he told me. tive. Tusong, Cuochi’s village head, told me that “After seeing Cuochi’s achievements in protect- an initial team of 56 volunteers has since grown ing wildlife, we recognized our responsibility to to over 200. “Four times a year, they set off to count the wildlife protect them too.” within our village The Qinghai proarea of about 2000 vincial government “So long as these people are square kilometers has named both willing to guard their own (772 square miles), Cuochi and Lechi living homeland, once they keep track of anias model villages for mals movements, community-based are endowed with power and record weather conenvironmental conser- capability, they will do a great ditions and observe vation and major con- job.” the mountain glatributors to zoological ciers” said Tusong. research. But, as locals “Generally, the pawill readily explain, part of their motivation to protect the local trol takes a whole day and requires a 20 kilomewildlife is spiritual, rather than scientific. Dur- ter motorcycle or horseback ride.” “We used to have frequent heavy storms, ing the Cultural Revolution, the Tibetan Buddhist monasteries and the resident priesthood even droughts in the previous decade, but after came under withering attack, with local religious we started the protection program, we noticed beliefs and associated culture almost completely the grass grew better and the livestock seemed eradicated. Still reeling from this shock, in 1985 healthier,” Gama told me. “We will continue locals faced an unprecedented blizzard that killed on to attain a benign cycle. Now wild yaks and most of their livestock and ruined many acres of chiru are not afraid of human beings or vehicles, pasture. Many families, facing starvation, turned even car horns!” to hunting to feed themselves. A Tibetan Buddhist revival was a contributing Eco-migration factor to the decline of hunting. A Rinpoche or Under the seven-year-long first phase of the high-ranking lama arrived in Cuochi and Lechi SNNR plan, the Qinghai provincial governto preach compassion for all life and respect for ment also adopted so-called “eco-migration” the mountains and rivers that nurtured it. The policies in the name of easing human strain on involvement of local monasteries or monks in natural resources, specifically the overgrazing of environmental protection, while often omitted pastureland. from official media reports on the SNNR, is Since 2005, a total of 50,000 people, mostly crucial to the conservation effort (see: “A Sacred ethnic Tibetans, were relocated from their origiResponsibility,” NewsChina, September 2011). nal pastureland in the area to suburban areas of Cuochi village banned hunting in 1988 “in nearby population centers. In contrast to simithe interests of karma,” and set up their own lar programs in other parts of China, however, community laws for the punishment of poach- where locals have effectively been forced from ers. “Even before the government drive to con- their ancestral homes, eco-migration in this refiscate all guns and rifles in early 2000, the vil- mote region is, at least officially, entirely volunlagers had already stopped hunting,” said Gama, tary. Thus, while some families have chosen to Cuochi’s Party Secretary. relocate, a significant community of nomadic According to Gama, Cuochi’s conservation herdspeople have remained on their pasturedrive began with concern for declining wild land. In Cuochi, for example, out of 301 famiyak populations caused by interbreeding with lies in 2005, only 43 families have since moved domesticated yak, resulting in robust and valu- to Golmud and other cities. able hybrids. In 2004, Tashi Dorjie, or Zhaduo Gama said Cuochi has also refused governas he is commonly known, an ethnic Tibetan ment demands that they enclose private pasborn in Cuochi and founder of the Snowland ture– each household continues to use their own


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Photo by Zhu Hongzhi

promoted by environmental NGOs including Conservation International and the Shanshui Conservation Center with endorsement from Sanjiangyuan Reserve Administration, a government-backed authority. According to the ground-breaking agreement, Sanjiangyuan Reserve Administration signed a two-year renewable contract with Cuochi village, stating that responsibility for the protection and monitoring of wildlife fell within the responsibilities of the local villagers, with the associated bodies responsible for providing academic guidance and financial support. So far, the new model has operated smoothly, with patrols now equipped with cameras, binoculars, and professional outdoor clothing and Sanjiangyuan National Nature Reserve

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Golmud Couchi Yushu

UNEP GEO 5 report states that “the exclusion of local communities from many State and privately protected areas along with a failure to fully acknowledge their role in safeguarding biodiversity remains a challenge to real progress.”

“Agreement Protection”

Due to its achievements, in 2006 Cuochi has was made a pilot region for a new protection model entitled “Agreement Protection”

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traditional winter and summer pastures, and the village has also reserved common grazing land for use in emergencies. “The reduction of livestock is not a good thing for pastureland. Without yak and sheep droppings, or regular trampling, there is not enough nutrition for the grass to grow,” said Ouyao, a SGREPA project manager. “Eco-migration has encouraged the departure of most of our young people and children. I fear they might cut their ties with the land, the livestock, and never return.” “All the traditions have been lost, and I expect that in no more than 20 to 30 years, if there are people herding, they will not be local Tibetans, but outsiders hired by big companies or rich investors,” he continued. “Things are interconnected,” Zhaduo remarked in our interview. “Modern lifestyles and eco-migration drove more youngsters away to study, so there are not enough people to herd sheep. That’s why most households only raise yaks.”

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In Tibetan Buddhism, water is viewed as a sacred spirit. This prayer tablet at the source of the Zhaqu river is tended by locals in Ganda village

equipment to deal with the harsh terrain. Detailed and scientific records are now habitually presented to local administrators. “This is indeed not an issue of money, but authority,” Zhaduo told me in his office in Xining, the provincial capital. “The spontaneous protection of the community is the most cost-effective method of conservation, since the people who live on the land know it the best. “So long as these people are willing to guard NEWSCHINA I May 2013


Canadian mining company Inter-Citic located only 12 kilometers upstream from the SNNR Core Zone. Inner Mongolia, formerly a pristine steppe populated almost entirely by nomadic herding communities, has now been eviscerated by similar profusions of open-cast mining and sprawling urban developments (see: “What’s Yours is Mined,” NewsChina, November 2012) I had no answer for Dang Wen. I was reluctant to raise other examples where communitybased conservation has been shunted aside in favor of industrial and commercial development, such as Evenki trapping communities in the northeast. I simply offered up a silent hope that community-based protection efforts such as his, rather than the entreaties of State-backed mining conglomerates, would make their voices heard in the corridors of power.

Photo by Zhu Hongzhi

us,” said Dang Wen. “I have no plans to leave my home village and I hope my children will stay in this beautiful paradise instead of going to the big city to make money.” George Schaller, a renowned biologist and veteran of the Tibetan plateau remarked in his recent book Tibet Wild: “It has become axiomatic that conservation can be successful only if local communities are fully involved in planning and implementing management efforts. Indeed, rangelands lend themselves well to long-term conservation as long as the approach is adaptive and flexible, and pastoralists can remain mobile. Other countries, such as the US, Australia, and many African countries, have degraded their rangelands extensively through indifference, negligence, greed imperfect scientific information, and lack of suitable policies.” Schaller concludes: “We can learn from their mistakes and should apply any relevant knowledge there, and initiative largely to responsibility of Chinese scientists in cooperation with provincial and local officials and with community leaders.” Conservation on the Tibetan plateau, one of China’s most vulnerable remaining ecosystems, has become a major concern for government at all levels. There are rumors that the government is about to pour another 10 billion yuan (US$16bn) into the region, but how this money will be spent remains unclear. Mining, sand excavation, road construction and tourist development are all encroaching on the local habitats of wild animals, as well as contributing to deforestation and receding water resources. Locals are aware that, while they are currently able to fight off destructive enterprise, their power is limited by China’s top-down development strategy, putting the future survival of these regions at the mercy of Beijing policymakers. “Can you tell me what would happen if mining or prospecting in these regions were endorsed by the central or provincial government, rather than by private companies?” Dang Wen asked me. “We couldn’t stop them. What would we do?” Mining in particular is feared by communities on the Tibetan plateau, which is as rich in mineral wealth as it is in wildlife. Zhaduo told me that there are over 100 mines in the Sanjiangyuan region, including some joint-venture projects with

Thanks to greater awareness and better protection, chiru populations are on the increase

Photo by Zhu Hongzhi

their own living homeland, once they are endowed with power and capability, they will do a great job. The locals here are the main protectors of the environment, so when we started conservation work on the plateau, the most important thing was to involve the locals,” he continued. Wang Xiaoyi, a sociologist from the China Academy of Social Sciences has publicly endorsed Agreement Protection as a viable alternative to existing conservation initiatives, many of which have led to the decimation of ethnic communities followed by widespread environmental degradation. “This might be a very meaningful new attempt ignited by environmental NGOs,” he said. “However, protection of the SNNR is a very complicated issue. Without a sound complex regional and village-level framework, its effect in some areas is limited.” My curiosity about the spread of these community-based conservation initiatives took me to Yunta, a village on the banks of the Yangtze, where a similar scheme has just gotten underway. When I arrived on a gloomy afternoon in mid-February, local Dang Wen was preparing for his monthly patrol. Thanks to the cultivation of local caterpillar fungus (Cordyceps), a popular and valuable component in traditional Chinese medicine, local villagers are relatively well-off, with average annual incomes of 100,000 to 150,000 yuan (US$16,000 to 24,000). Located in a valley and surrounded by rocky cliffs and alpine forests, the territory is rich in blue sheep, bear, deer, and snow leopards. “We spend two days each month in the mountain valleys to see if there is illegal deforestation or poaching going on, as well as collecting garbage,” said Dang Wen. “Our data have been kept updated since October 2012, and we pass the results on to the Shanshui Conservation Center.” Yunta’s villagers, according to the superior Haxiu township head Xiran, have always had a strong affection for local wildlife. The village has already sent a prospecting outfit from the Guizhou Province Nonferrous Metal Bureau packing, despite the company’s presence being approved by the hugely powerful national Bureau of Land and Resources. “We are thankful for the clean water, fresh air and everything else nature has bestowed upon

Without fenced-off private pastureland in Cuochi, wild animals like Tibetan wild ass have free reign


cover story Eco-migration

Wang Xiaoyi: “There is no Vacuum”

Relocating historic communities and welcoming developers, rather than protecting the environment, is almost guaranteed to lead to devastation. NewsChina talks to sociologist Wang Xiaoyi about the continued efforts to remove nomadic and subsistence populations from China’s few remaining pristine wildernesses in the name of conservation By Wang Yan

Major provinces undertaking eco-migration and estimated number of people relocated

Inner Mongolia Xinjiang

1,590,000 (2002-2016)

650,000 (2000-2020)


150,000 (2006-2020) Ningxia

350,000 (2011-2015) Qinghai

50,000 (2005-2012)


2,000,000 (2012-2020)



80,000 (2004-2010)


s China realizes its deteriorating environment is one of the dividends of the over-exploitation of natural resources in the name of development, various conservation projects sponsored by either the central government or international organizations have mushroomed across the country, with mixed results. Eco-migration, the all-but-forced relocation of indigenous communities, ostensibly to protect water sources, grasslands, forests, or wild animal populations have become a popular practice among local officials in remote areas. The recent 18th National Party Congress emphasized the importance of promoting “ecological civilization,” and Guizhou, Shanxi and Xinjiang provinces have all made ambitious plans to further expand the relocation of millions of people in the name of improving their livelihoods and protecting the environment. In mid-March, NewsChina interviewed Wang Xiaoyi, a research fellow with the Center for Rural Environmental Social Studies at the Chinese Academy of Social Sciences. Hailed in domestic academic circles as an expert on pastoral policy, Wang started to follow the much-lauded “ecomigration” policy, personally visiting dozens of local project villages, particularly in China’s western regions including Inner Mongolia and the Qinghai-Tibetan Plateau since early 2000. He has formed a different opinion to that expressed by the government think tanks who argue that indigenous communities are unable to take the lead in conservation. In Wang’s opinion, “ecological civilization” is “the harmonious relationship between human beings and nature.” “The human ambition to conquer nature has replaced respect and awe of it, thus leading to greater and greater ecological problems,” he told our reporter. In his article “The National Role in Pastureland Environment Protection,” Wang states: “It is not correct to blame natural resource losses on local communities. The purpose of most ecological compensation policies aims to restrict locals’ behavior, i.e. herding, hunting etc… We have seen many contradictory phenomena, for example, the relocation of the Evenki people for the sake of ecological protection despite the Evenki reindeer herding not being a contributing factor toward environmental degradation in NEWSCHINA I May 2013

the Greater Khingan Mountains.” “Again, in Inner Mongolia, falling groundwater levels and their subsequent impact upon plant life were not the result of local herders’ traditional herding activities,” the article continued. Wang has become famous in anthropological circles for essentially debunking the government’s justification for removing indigenous communities from the areas they have inhabited for centuries. Bespectacled and with a broad smile, Wang met with our reporter to reveal the true motivation behind the government’s policy of “ecomigration.” NewsChina: What is the background to the current eco-migration policy? Wang Xiaoyi: Flooding in 1998 brought land erosion and environmental protection to the attention of the central government. It was followed by the launching of policies of “reforestation” and the repurposing of agricultural land into grassland. Beijing was also suffering from sandstorms, and as the city was to hold the 2008 Olympics, the National Forestry Bureau initiated a few projects to improve air quality. These projects included reforestation, grassland protection in the nearby provinces and cities in Inner Mongolia, Hebei, Liaoning and Tianjin. Sporadic relocation projects, later termed “ecomigration,” were also launched in those places. Since the end of the 1990s, the ecological value of grasslands was noticed by the decision makers, as desertification has severely impacted the lives of both nomads and city residents in northern China. The degradation of the grasslands was taken by authorities as the result of overgrazing. Inner Mongolia thus started to move herders from large areas of pasture, encouraging them to abandon their herding practices and settle in cities. This soon spread to larger regions, and local governments can easily apply for funds from the superior or central government to fund relocation projects. As far as I know, eco-migration was never promoted as a national policy. Many eco-migration projects were concurrent with poverty alleviation or conservation efforts. NC: Is the policy of eco-migration based on adequate planning and research? WXY: As you mentioned, the general plan for relocation and infrastructure construction is easy NEWSCHINA I May 2013

to prepare and to realize. As eco-migration is a whole new issue, although earlier plans formulated on a case-by-case basis might have been very thorough, in some cases planning is hurdled in favor of implementation. For example, planning for communities’ welfare once they have been relocated may not be effective as such situations are fluid. Work and living arrangements in the new environment might not be sustainable. I think a small-scale relocation… providing those relocated with a buffer zone and some time to adjust… is preferable. NC: Overgrazing is one of the major justifications for eco-migration. How do surveyors determine the grazing capacity of pasture? WXY: Traditionally, the core issue for pastureland ecology is to calculate how many livestock can survive respective to the growth rate of the grass. Local grassland monitoring institutes or grassland supervision centers have scientific calculations based on combined information obtained through satellite statistics and on-site visits. Newly-emerged academic research, however, criticizes this approach. Some European ecologists state this calculation might work well for oceanic climates such as Europe or North America, yet in arid and semi-arid areas such as Mongolia and western China, a continental climate with extreme fluctuations in temperature and variable precipitation makes this figure hard to predict. Thus, some ecologists are reconsidering the ecological value of traditional nomadic herding. Herders can drive their livestock to rich grazing grounds, naturally protecting vulnerable areas. This can be done by local nomads, and community-based local participation can thus link up with environment protection. NC: It is said that eco-migrants, ten years after being relocated, have the freedom to choose whether to return to their native regions. Is this true? WXY: For some places which launched ecomigration initiatives at the beginning of 2000, it is time to consider this issue. The policies are unclear and since there is no unified stance on eco-migration, the question of whether or not such people can genuinely return to their homes can only be answered by local government. There are think tanks that have proposed restrictions on new farms and pastoral operations

designed to upgrade the agriculture and herding industries. Such proposals are widely seen by traditional rural communities as an attempt to capitalize on the countryside. NC: What do you think of the relationship between government, communities and scientific research institutes? WXY: It’s highly important to set up a negotiation platform to allow different sides to sit down together. For example, the attempts of “Agreement Protection” in Cuochi in Sanjiangyuan (see: page 20) show that local knowledge combined with expert guidance under government supervision can make conservation very effective. Thus, I think, strengthening collective action appears to be the only possible approach to control and reverse pasture degradation and sustain or improve rural livelihoods. I’ve been promoting pastureland protection plans through negotiations with village-level communities. A general plan for all circumstances might cause a lot of problems, while small-scale planning is more flexible. NC: Is eco-migration a logical concept? WXY: Eco-migration is reasonable areas which are inhabitable, and the locals are willing to leave. However, in terms of the large-scale ecological degradation of pastureland, I believe urbanization, industrial development and climate change together with unsound management are the causes – not local nomads. The error of current eco-migration policy is to assume every local community is a destructive force. Thus the government tries every means to relocate people, forgetting that there is no vacuum, that new people will inevitably flow into abandoned areas. The government’s initiative is an ideologybased judgment regarding modern lifestyle as better than a more traditional rural way of life. In the eyes of government, the general public’s living standard is measured by income rather than quality of life. Another reason for local governments’ zest for eco-migration is the “project economy.” Through various projects, local government can draw funds from different sources. Eco-migration is so attractive because it is high-cost, and thus large scale relocation project can therefore draw more funding. 



Party Membership

Trimming the Fat The Communist Party of China is rolling out various pilot schemes to cut down its bloated membership, but who decides where the axe falls?

Photo by CFP

By Min Jie

Party members recite their loyalty oath in Jiaxing, Zhejiang, July 1, 2011


ith more than 80 million members, the Communist Party of China (CPC) is the world’s largest political party. Since the Party’s new leadership, led by General Secretary Xi Jinping, took the helm in late 2012, the Party has announced its intention to shed a little dead weight.


Purify the Party

The initiative was revealed in a speech made by Xi on January 28 at a Politburo meeting on the subject of cultivating a new crop of Party members. In the speech, Xi emphasized the need to control the overall size of the Party and cast off “unworthy Party

members” for the sake of the Party’s “purity, vitality and reputation.” The move has been interpreted as part of the new leadership’s high-profile anti-corruption drive. According to statistics released by the Party, the number of CPC members increased from 4.49 million in 1949 when the Party NEWSCHINA I May 2013

took power, to 82.6 million in 2011, an average annual increase of 26.5 percent. By contrast, during the same period, China’s overall population increased at an annual rate of only 2.4 percent, from 542 million to 1.32 billion. In the meantime, the number of Party members in the general population rose from 0.83 percent to 5.75 percent. In 2011 alone, 2.33 million people joined the Party, an average of 6,384 new card-carrying communists per day. Although experts specializing in Party affairs agree that the CPC has more members than it needs, few believe that the party’s sheer size is the at the root of China’s endemic corruption. In fact, some believe it to be the other way round – with the CPC playing a dominant role in all aspects of life, many people join the Party not because they share its ideology, but because they believe that membership will bring them political and economic benefits. The streamlining initiative seems to aim to solve this problem. “As the Party’s membership increases, it so happens that some members have lost their faith, ideals and sense of discipline, and a minority of them have become corrupt,” concluded Xi Jinping’s speech to the Politburo.

Open to Abuse

However, while supporting the streamlining initiative in theory, Party academics are concerned that efforts to “purify” the CPC could easily become a tool with which to purge members who disagree with local Party leaders on local affairs such as land requisition, or those who simply do not get on well with their bosses. Following the January meeting, the provincial Party committee of Guangdong, a province generally seen as a pioneer of political reform, has launched a pilot project across Shenzhen, Qingyuan and Dongguan, aimed at encouraging “unworthy” Party members to renounce their membership. Local CPC branches have been given the freedom to set their own criteria by which to gauge “worthiness.” This, however, has aroused concern among Party affairs researchers. In Qingxin, a county under the administration of Qingyuan City, for example, local members’ “petitioning records” – their history of lodging complaints or voicing grievNEWSCHINA I May 2013

ances to higher-level authorities – are among the indicators of worthiness. In a township in Dongguan, Party members will be listed as unworthy if “they or their family members impede or refuse to cooperate in land-drafting and demolition projects.” These locally implemented standards have sounded the alarm for Party academics. “The Party must be cautious not to turn [the downsizing initiative] into a means by which to punish grassroots members whose opinions differ from those of their leaders,” warned Cai Xia, a professor from the Party School of the Central Committee of the CPC. According to Cai and other Party academics, plans to downsize the Party have been made time and again over the last decade, and have consistently fallen at the same hurdle: the definition of the word “unworthy.”

Competing Ideas

For example, in 2001 when the Party hit the milestone of 60 million members, the authorities acknowledged the need to control its size. To test the water, the Party announced that it had forced out 473 thousand “unqualified” members since 1989. But the downsizing plan ultimately failed due to Party authorities’ inability to “reach a consensus on the criteria of disqualification,” said Cai. In 2008, streamlining was back on the Party’s agenda when its membership reached 70 million. Li Junru, former vice-president of the Central Party School, told the South China Morning Post that at this time, the school drew up a plan to cut membership by 10 million. According to Li, the Party eventually scrapped the plan, this time failing to come to an agreement on who should define the criteria for worthiness – the Party Central Committee, local Party committees, or lay members? "If this power rests with the leaders of local Party committees, we are worried that it might become a means for local leaders to purge comrades who have different opinions. And if lay Party members have the power, strong-willed Party members who are willing to risk offending people in the name of pursuing beneficial policies might be thrown out," Li was quoted as saying. The pilot projects in Guangdong seem to

lean towards bestowing the power to define worthiness on local Party committees or grassroots Party branches. For many political analysts, such an approach would not only be easy to use as a means to punish dissenters within the Party, but would likely prove impotent in curbing corruption, as many argue that the upper ranks of the Party are much more prone to corruption than grassroots cadres. But according to Professor Tang Renwu, director of the School of Government at Beijing Normal University, the reason why downsizing remains a touchy subject is that expulsion is considered a devastating blow to an individual Party member, and unequivocally spells the end of their political career. “Currently, membership is only ever automatically canceled when a Party member dies. Only those who are under investigation for corruption or other wrongdoings, or convicted of crimes, have ever been expelled from the Party while living,” said Professor Cai. She argues that the Party should introduce an exit mechanism to ensure that leaving the Party as simple as joining up. According to the Party Constitution, if a member fails to pay membership fees (ranging from a token 2.4 yuan (US$0.91 a year to 2 percent of one’s salary) for more than six months, he or she is deemed to have quit the Party voluntarily. But in reality, few members are ever officially disqualified for unpaid fees. Cai argues that the Party should first disqualify inactive members and reevaluate its membership nationwide, before moving on to design a scheme to shed excess other undesirable members. Such a scheme should be closely linked to political reforms concerning inner-Party democracy. In a separate pilot program launched earlier in 2012 in Shouguang County, Shandong Province, a “democratic” process was initiated whereby local Party members participated in a secret ballot to assess the performance of their comrades. This led to the disqualification of 34 cadres, adding to a total of 68 other members expelled for misdeeds such as breaching the One Child Policy. But as the Party continues to contemplate by which criteria a Communist Party member should be judged, there is as yet no indication that it will be getting any slimmer anytime soon – thousands of new members continue to join each day.



NGO Regulations

Nonprofit, Nonstarter China is likely to loosen regulations on NGOs, but only the tamest need apply By Hua Xuan


n a report to the National People’s Congress early March, Ma Kai, then secretary-general of the State Council and now the country’s vice-premier, stated that regulations on four types of non-politically sensitive NGOs would be relaxed. These four groups, according to Ma’s statement, including trade associations and NGOs dealing with science and technology, charity and community service, would be allowed to apply for registration with the Department of Civil Affairs. Previously, all NGOs operating in China were required to be attached to a government department before applying. While regulations on NGOs dealing with law, politics and religion, and Chinese branches of international NGOs, would stay the same as before, the move has been interpreted as a loosening of the tight control over NGOs operating in China.

This set of NGO regulation measures, which requires NGOs to be endorsed by a government department to be eligible for registration, has been in force since 1989, when the State Council composed the country’s first regulations on NGO registration and administration to deal with the boom of NGOs in the wake of Reform and Opening-up. “The advantage of this set of regulations is that it can guarantee that NGOs will be politically reliable,” said Sun Weilin, an official in charge of NGO administration with the Ministry of Civil Administration when the regulations were first drawn up. However, the drawbacks were obvious. The government departments to which NGOs are attached are wont to interfere with their operation, and have even been known to act as final decision makers, according to Kang Xiaoguang, a researcher of NGOs in China with Renmin University in Beijing. “If government departments are always interfering with NGO operation, what can NGOs be other than puppets?” Said Kang. The NGOs that government departments keep in the palm of their hand are usually those that can bring them profit or other benefits, while other non-profit organizations are usually ignored, according to Kang. For non-profit NGOs, only those who maintain cozy relations with


Photo by CFP

Precious Endorsement

Li Liguo (left), minister of civil affairs, visits a privately-run nursing home in Hebei. Most private nursing homes have yet to attain legal status

the government and appear trustworthy can receive the endorsement necessary for legal status, because few government departments are willing to take on extra responsibility, according to Yang Tuan, a researcher on civil policies with China Academy of Social Sciences (CASS). NEWSCHINA I May 2013

Photo by CNS

This has made it exhaustingly difficult for NGOs to receive government endorsement and begin operating legally. For the majority of NGOs, registration has become an insurmountable hurdle. It is estimated that more than three million NGOs are operating without legal status in China, and those that have successfully registered account for only 15 percent of the total number of NGOs operating in the country.

Ta Foundation, a Beijing-based animal rights NGO, hosts a charity auction, December 29, 2012


China’s population of 1.3 billion people has access to only 400,000 legal NGOs, while more than 2 million NGOs are available to the US’s 300 million citizens. The gap between demand and supply of social services is pressuring the government to relieve NGO regulations. In Hong Kong, the government spends HK$10 billion (US$1.29bn) each year on funding NGOs, and purchasing public services from them for its population of 7 million. Meanwhile, on the mainland, annual government expenditure on NGOs is less than 1 billion yuan (US$160m). “Social development calls for more services from more NGOs,” said Wang Zhenyao, a former senior official with the Ministry of Civil Affairs and now the dean of the School of Public Welfare at Beijing Normal University.


Given that the threshold for private foundations is too high, and that NGOs are still taxed by the government, relaxation on NGO registration is just the beginning of the reform of China’s overly-strict NGO policy, according to Wang. Wang said during the leadership transition at the March meetings of the National People’s Congress and the Chinese Political Consultative Conference, known as the “Two Sessions,” the government would be re-examining its position on social functions and services, and the time had come to reform NGO regulations. As early as July 2011, civil minister Li Liguo had spoken for the abolition of the dual administration of NGOs dealing with charity, social welfare and social services, but since the State Council regulation on NGOs had not yet been revised, no meaningful changes could be made. But the statement from Ma, the vice-premier, signaled that the State Council is now prepared to revise the regulations, according to Wang. Some believe that the apparent loosening of the rules could actually be in the interests of governments. Kang, the researcher with Renmin University, classifies NGOs into two categories: ones that assist the government, and ones that challenge the governments’ authority. “The four types of NGOs that the State Council is ready to let up on are all able to offer some convenience for government administration, and would be unlikely to challenge its authority,” said Kang. Experimental efforts to relax NGO registration have been adopted in 17 cities and provinces nationwide since 2008, including pilot projects in Shenzhen, Chengdu, Beijing and Shanghai. The Ta Foundation, an animal rights NGO based in Beijing, received its certificate of registration in 2011 just one month after it submitted its application, a level of efficiency previously unimaginable. However, this is most certainly an exception. Stars and Rain, an educational NGO specializing in care and education for autistic children, has continually failed to register since it was established in 1993. “It is never as easy to register an NGO as the policy would suggest,” said Tian Huiping, founder of Stars and Rain and herself the mother of an autistic son. “The procedure is still very complicated.” Kang, the NGO researcher with Renmin University, singled out the strict regulations on NGOs that fall into the categories of law and politics when explaining the difficulty of registering: “Unlike NGOs dealing with medicine or education, there are no clear boundaries for law and politics NGOs,” said Kang. “Any NGO that has just a little to do with politics or sensitive issues could be classified into the law and politics category.” “But it is unlikely that an NGO could ever limit its operations strictly within one area, and it is impossible for them to guarantee that they will have nothing to do with politics.” Since the government has final discretion, many NGOs could be simply thrown into the category of law and politics, and thus the requirement for government endorsement means they have little chance to ever get registered, according to Kang. Before open registration is implemented in China, a lack of clarity could be the biggest obstacle for NGOs.


Photo by CFP


A budget including dining and gift expenses is posted at a village in Jiujiang, Jiangxi Province, November 7, 2011


Friends with Benefits With so many people resorting to underthe-table deals in their everyday lives, do Chinese people now see corruption as a necessary evil? By Li Jia, Liu Ziqian and Geng Haotian



o you disapprove of corruption? For many Chinese people, the answer to this question is not a simple “yes or no.” Often, it depends on what they stand to gain. In the few months since the new leadership took office in midNovember, a range of high-profile investigations into senior officials have been announced. This renewed enthusiasm is nothing new – a few unlucky senior officials are punished whenever the nation’s leaders commit to a hard-line stance on corruption. The public always approves. Since China began its program of Reform and Opening-up in the late 1970s, the lack of progress in the fight against corruption has always been one of the biggest sources of public dissatisfaction with the government. With this in mind, both the outgoing leader Hu Jintao and the new General Secretary Xi Jinping have warned against the potentially “fatal” damage that corruption can inflict on the Communist Party’s rule and the country as a whole. At the same time though, individuals have a very high tolerance, even extending to approval, of many forms of corruption, as long as they benefit from it. Minor corruption by junior officials or even non-officials is generally ignored. This “micro-corruption,” experts warn, makes the fight against corruption even more difficult. NEWSCHINA I May 2013

Mass Participation

A survey released at the end of 2012 by the Chinese Academy of Social Sciences (CASS) research center on clean governance shows that 91.7 percent of respondents thought that more effort was needed in the fight against corruption. 100 percent saw corruption as a “national challenge” in another survey conducted between May and December 2012 by the People’s Tribune, a well-known magazine under State mouthpiece the People’s Daily. Corruption has become so commonplace that it has become something of a lifestyle. The CASS survey has confirmed that resorting to personal connections is now the knee-jerk response for many people, whether they are making an appointment with a doctor, finding a school for their kids, looking for a job, or dealing with a lawsuit. These connections certainly do not come for free. This is a real market, with both buyers and sellers. Over the past few years, many young white-collar workers have chosen to leave big cities like Beijing, Shanghai and Guangzhou, and returned to their hometowns to escape high living costs, heavy workloads and discrimination against their lack of a local household registration. However, many soon returned. According to analysis in the People’s Daily in October 2011, one of the major reasons was that they found that powerful connections were even more essential to a person’s life and career in the provinces than in big cities. According to the article, when doing business, a lavish banquet or the correct gift are often much more effective than a well-designed business plan. This day-to-day corruption in most cases only involves people with resources directly related to their work responsibilities – school teachers, or a member of staff in a client company, for example. It is even common practice for Chinese doctors to accept “pocket money” from their patients. In May 2012, a professor on a committee reviewing applications for a college lecturer qualification in Hunan Province designated a specific hotel room as the venue for bribe delivery. Business was booming before the local government shut him down. In 2006, the Ministry of Education set up an office tasked with containing academic misconduct, but it is common knowledge that China’s academic institutions are no safe haven when it comes to corruption. Since at least 2010, some elementary and middle schools have openly told their employees not to accept gifts from parents on Teachers’ Day, which falls on September 10. These gifts are reported to have ranged from department store gift cards to job offers to teachers’ family members. Professor Lin Zhe with the Communist Party School pointed out that corruption was quickly spreading to very low-level officials, or even ordinary clerical staff in public institutions. “Many of them


believe they should use this power as long as they have it,” he said in an article in the Legal Daily in December 2009. One such lowlevel bureaucrat Zhai Zhenfeng, a housing administration official in Zhengzhou, Henan Province, was placed under investigation after he was found to be in ownership of 29 separate houses. Various multinational giants, including Siemens, Rolls-Royce, Walmart and Coca-Cola, have been investigated or punished – ironically, by regulators of the US and their home countries, or through their internal probes – for giving or receiving bribes in various countries, including China, over the past few years.

Tasty Tofu?

It must be noted that in many cases, those offering the bribes actually deserve whatever it is they want. For example, in the case of the professor on the review committee, applicants essentially believed they were buying a place on a level playing field. Doctors’ salaries are notoriously low, leading some to believe that they are justified in taking bribes. In the case involving the corrupt professor, some netizens argued that he was making a fair deal, since he promised to refund the money if the application failed. Worse still, the People’s Tribune commented in an editorial in September 2009 that on the one hand, people hate the abuse of power, but on the other, they covet the privilege that it can bring. As criticized by the article, those who climb the ladder of power through dishonest means like bribery are often admired by the people around them. Where there is personal interest, there is “100 percent tolerance” towards “micro-corruption,” according to the CASS report. This is why corruption is known as “stinky tofu” in today’s society, named after a foul-smelling but popular Chinese snack. When it is taken for granted in society that power is only a means to personal benefits for those who have access to it, Professor Lin told NewsChina, it becomes “a cultural hotbed for the growth of corruption.” Professor Li Qiufang, who led the CASS research, stressed in an interview with NewsChina that only acute public disapproval of corruption can provide a strong impetus to the anti-corruption campaign. Most blame the bad example set by corrupt officials, and a social environment that systematically puts law-abiding people, officials or not, at a disadvantage. Corruption is “both hated and desired by everyone,” said Professor Sun Liping with Peking University, in a popular article on the People’s Daily Online in February 2011. He said that it not only undermines any effort in the fight against corruption, but is “a catalyst that will push society to abnormality.”



Premium Liquor

Low Spirits

How did China’s premium liquor barons become so influential, and will new government antiextravagance initiatives be enough to break their stranglehold on what used to be a captive market? By Sun Zhe


njoying a level of freedom to advertise that would make Bacardi’s mouth water, and with almost total control over their market niche, China’s top baijiu (literally “white liquor” – the country’s national drink) brands are among the most visible consumer products in the People’s Republic. With an unrivaled market position and ample political backing, the biggest brands effectively control retail prices, going to great lengths to punish anyone selling their products at a discount, with franchise terminations and heavy fines a common occurrence. Now, however, rising public anger is forcing baijiu manufacturers to abandon their controversial business tactics, after the Kweichow Moutai Distillery, China’s biggest by market value, and its arch rival Wuliangye Yibin, were fined 449 million yuan (US$72m) by the National Development and Reform Commission (NDRC), the country’s top macroeconomic agency, in late February for breaching anti-trust laws. Though the penalty only accounts for less than 1 percent of the two companies’ total annual sales revenue, this is a watershed moment. Baijiu, like tobacco and sugar, is an industry firmly under State protection, and like any such industry, is usually considered above prosecution. The fact that the NDRC has dared to challenge two of the country’s most high-profile enterprises, forcing them to abandon illegal business practices, has


severely dented these companies’ respective images, according to Zhu Xiaodong, an industry analyst with Oriental Securities in Beijing. “The key driver for premium baijiu consumption is the yearning for social status,” said Zhu. “A price drop is the last thing baijiu makers want to see.” Because premium baijiu is often given as gift, rather than consumed by the purchaser, price hikes have become routine around key national holidays such as Chinese New Year and the Mid-Autumn Festival. Moutai, noted for what connoisseurs describe as a “saucy” aroma, now retails for 1,800 yuan (US$290) for a standard 500-milliliter bottle, a price just short of the average monthly income of a Beijing resident. This is nine times what the same bottle would have cost a decade ago. Even more remarkably, each consecutive price rise is typically followed by a jump in stock price, indicating that consumers are more inclined to buy a marked-up bottle of liquor, believing it to be of superior quality or, at least, a more prestigious gift. Similar effects have been noted in the sales of other luxury goods in China, where quality typically takes a backseat to sheer cost. The day after Moutai announced its last price rise in early September last year, the company’s share price gained six percent on the Shanghai Stock Exchange.

Price Insensitive

This trend is partly explained by the fact NEWSCHINA I May 2013

Illustration by Wu Shangwen NEWSCHINA I May 2013

that consumers of premium baijiu – namely the military, government and State companies - rarely pay for it out of their own pocket. Instead, public funds foot the bill. “When a businessman is trying to get close to a government official to win a multi-million yuan government contract by throwing a banquet, why would he care about the price of a bottle of baijiu on the dinner table?” Zhu asked our reporter. “He would probably choose the most expensive brand because the higher price would be more likely to impress his guest,” he added. The association with government extravagance means that, while price hikes don’t do much to damage the reputation of premium brands of baijiu, they have come to symbolize many social grievances against China’s ruling classes. The austerity campaign begun by new Party chairman Xi Jinping last year drove down share prices of major premium baijiu brands by about 30 percent over the Chinese New Year holiday in early February, according to the Ministry of Commerce. Wuliangye’s share price on the Shenzhen Stock Exchange fell by 29 percent, while the index itself gained nine percent, both occurring almost immediately after Xi Jinping made his first remarks about cutting back on government expenditure on luxury goods. Moutai lost similar ground on the Shanghai Stock Exchange, which itself saw a lift of 8 percent over the same period. These fluctuations were further ammunition to critics of government extravagance, taken as proof that public money was being blown on overindulgent banqueting. These are dark days indeed for an industry which has long been among China’s biggest domestic success stories. Unlike Korean soju and Japanese sake, baijiu has never found a market overseas, with its rough, aggressive palate unappealing to most non-Chinese. However, on its home turf, baijiu has rocketed in profitability over the past decade, with market leader Moutai – first popularized by Mao Zedong himself – seeing its market value increase 40-fold. Sustained market demand has enabled distilleries to outperform almost all other companies on China’s stumbling stock exchange.



While Chinese markets fell 33 percent over 2010 and 2011, Moutai’s value surged 25 percent. In 2011, the company reported a net profit of 8.76 billion yuan (US$1.38bn), 73 percent up from the previous year. Wuliangye Group saw its profits climb 40 percent to 6.16 billion yuan (US$991m) in the 2011 fiscal year. By the end of the 2000s, Wuliangye was still China’s number-one baijiu maker in terms of sales volume, with a clear upper hand over Moutai. But its strategy to diversify its products, according to analysts, seriously diluted its brand value. It was soon overtaken by Moutai which, in contrast, focused on the high-end market and made great efforts to promote its sales among government clients rather than the general public. A bottle of Moutai became the must-have item during official banquets, society weddings and business transactions. Moutai came up with a brand-new sales strategy called “institutional sales,” which meant taking direct orders from government departments, the military and major State companies. The company duly enjoyed a massive boom in sales, fed entirely at the taxpayer’s expense. According to a research report by Goldman Sachs, institutional sales now account for about half of Moutai’s revenues. Between 1995 and 2010, government revenue in China grew nine-fold, more than triple the increase in average urban disposable income and almost five times the increase in average rural disposable income, according to an article by Chen Zhiwu, an economist from Yale University. 2011 government revenue broke yet more records, increasing by almost 25 percent over the previous year to top 10 trillion yuan (US$1.61tn), while GDP rose only 9.2 percent and average urban disposable income by 8.4 percent. In 2011, household consumption only accounted for about 35 percent of China’s GDP, down from 46 percent in 2000. The figure for the US was about 70 percent. Reaping this windfall, officials spent much of this revenue on lavish dinners, luxury cars and overseas tours, habits which have stoked public anger to fever pitch in recent years.


Institutional sales have helped to largely consolidate Moutai’s brand image as the liquor of choice of the elite, equal to the status of the black Audi sedans so beloved of China’s officials.

State Tipple

Inspired by Moutai’s success, other premium baijiu makers attempted to replicate their success. According to Goldman Sachs, Wuliangye now attributes 15 to 20 percent of its sales revenue to government purchasing. Luzhou Laojiao, China’s third-biggest distillery group, only makes 5 percent of its revenue through institutional sales. Moutai remains at the top of the heap, thanks largely to its political pedigree. During the Long March in 1935, the Red Army passed through the liquor-producing town of Moutai in western Guizhou, using its signature product to drown their sorrows and treat their wounds. Claims were even made that Moutai was a treatment for diarrhea. Mao Zedong, having just eliminated his political rivals to seize control of the red army, would later mention Moutai in his memoirs. As early as the mid-1950s, the three major private distilleries in the town of Moutai, Guizhou Province, were nationalized under the name of “joint public-private operation” and merged into one State-owned Moutai distillery, with the liquor named a State Banquet Beverage. One liter of Moutai is made from five kilograms of mixed sorghum and wheat. According to Yanhuang Chunqiu magazine, even during the great famine which killed millions of Chinese between 1959 and 1961 as a result of the Great Leap Forward, an unbroken supply of grain continued to feed production of Moutai even as the peasants growing it died of starvation. Moutai has made great efforts to cash in on its association with the Communist Party. In its head office compound is a statue of Premier Zhou Enlai, a Moutai aficionado who shared his passion with US President Richard Nixon during his historic visit to China in 1972. Zhou was even honored by the Moutai corporation as “the Father of State Liquor,” a self-ascribed epithet which has met with

fierce opposition from other distilleries, preventing Moutai from registering “State Liquor” as a trademark.


Since Reform and Opening-up, as its competitors have grown in strength, Moutai has attempted to vary its branding to match an increasingly sophisticated consumer. Like other high-end baijiu, Moutai reportedly doesn’t cause hangovers, but that hasn’t prevented the company from stressing this in its advertising, also adding claims that it is “a natural, organic and unique liquor catering to elite consumers,” claims impossible for independent sources to verify. The company has even gone so far as to claim their 106-proof product is good for health, a claim vehemently denied by medical professionals. A report released on March 14 by the Time Weekly newspaper disclosed that, contrary to the corporation’s claims, a large percentage of the raw materials used by Moutai are neither local nor organic. Most grain used in the distillation process is now imported, and pesticides are widely used both on the sorghum farms around the distilleries as well as in the areas supplying the bulk of its other grains. The report further dented Moutai’s share price on the Shanghai Stock Exchange, which fell eight percent in the wake of its publication. For the first time in its history, a corporation carefully nursed by the State has found itself under attack from both the government and consumers. If Xi Jinping continues to push ahead with anti-waste and anti-extravagance reforms, Moutai could lose its most-favored status at State functions. Moutai boomed in a period when the government tightened its controls on the economy and cracked down on independent enterprise, an endeavor dubbed “the advance of the State and the retreat of the private sector.” China’s new leadership is hinting at reversing this trend, which analysts believe has damaged the country’s economic prospects and eroded faith in the Communist Party. Should they deliver the goods, Moutai, along with black Audi sedans, luxury holidays and expensive houses, may vanish forever from government expense accounts, and, eventually, the marketplace they once dominated. NEWSCHINA I May 2013

Smartphone Apps

Let the Games Begin

Western mobile game developers are using Chinese creatives to design apps for the US market, but should they be doubling down on China instead? By Alex Taggart


ith any blockbuster movie release, consumers have come to anticipate a barrage of madein-China merchandise. And accordingly, the December 2012 premiere of the first installment of the Hobbit saga was followed by plastic toys, flimsy trading cards, and The Hobbit: Kingdoms of Middle-earth, an officially licensed smartphone game that grossed in the top 10 in 50 countries. One of these is not like the others. At the China Game Developers Conference in November in Shanghai, Michael Li, co-founder of Silicon Valley developer Kabam Games, joked that the movie’s disNEWSCHINA I May 2013

tributor Warner Bros. were probably oblivious to the fact that the game was designed entirely in Beijing. Fresh from the release of Kingdoms of Camelot: Battle for the North, another Beijingdesigned game that topped the iTunes charts in 26 different countries as well as in general sales, Kabam is one of several companies that are capitalizing on China’s gaming-related resources. And while app makers continue to wrestle with profit models and the high cost of creative, skilled labor in the West, many foreign companies seem to be quietly doubling down on their China operations. Smartphone uptake in China is growing at

a staggering rate – a report by tech research website Digitimes estimated that due to falling handset prices and improvements in mobile Internet, 430 million smartphones would be in use in China by the end of 2012, a rise of 9 percent on the previous year. In a post on industry analytics website Business Insider, former Google China President Kaifu Lee predicts that this number will reach 500 million, double the size of the US market, by the end of 2013. The game app sector has also seen robust growth. A 2012 report by research firm Niko Partners predicted that by the end of that year, China would be home to 192 million



Tencent, one of China’s largest web companies, will partner with Gameloft to distribute Ice Age Village in China

mobile gamers, for the first time outnumbering PC gamers, who it predicted would reach 180 million by year-end 2012. It further estimated that revenue would grow from US$600 million in 2011 to a figure in the billions within five years.


Gigantic market stats from China are nothing new, but the game app industry has highlighted a small yet skilled pool of Chinese talent keen on contributing to the creation of high-end products for the global market, and not just on the assembly line. “I’ve heard others say that the market is enormous, but that there’s not enough design talent,” said Kabam President Andrew Sheppard, in an interview with NewsChina. “But there are Chinese designers who don’t even speak English doing design work on our games for Western audiences.” Considering the success of Battle for the North and Kingdoms of Middle-earth, this appears to be a formula that works – Kabam’s revenue grew by more than 70 percent to over US$180 million in 2012, the company is making profit, and there are rumors of an IPO. And as more young, tech-savvy Chinese people graduate from college equipped with knowledge of the global games market, these revenue figures are becoming increasingly attractive. Naturally, Western develop-


ers are keen to tap China’s game design talent potential – Kabam’s Beijing staff has grown from 30 in 2010 to over 100 in 2013. “China is more known for outsourcing manufacturing, two words which are not associated with high-end products,” said Junde Yu, Asia-Pacific vice-president of business development with App Annie, an app industry intelligence firm based in Beijing. “But recently, there are more and more young people coming out of universities and making creative original content.” Indeed, even hard-nosed reviewers don’t seem to be able to tell that a top-selling game was designed by Chinese staff – app review website 148Apps gave Battle for the North a four-star rating, and the game received an impressive overall score of 65 percent on the games section of aggregator site Metacritic, while Kingdoms of Middle-earth scored a respectable 56 percent on the same website. But while Western app sales are largely concentrated on two well-established app stores, the iTunes Store and Google Play, the Chinese market is a more complex beast. Firstly, Chinese law stipulates that in order to sell their games in China, foreign app companies must enter into a joint venture with a Chinese company, a complex process beyond the capability of smaller companies. And while talented local game designers may be cheaper and more effective than

their Western counterparts, a successful tech company needs expertise beyond the artistic process. “To be a huge company [in the China app market], you need more than creative design. You need market execution and strategy,” Yu told NewsChina. Chinese gamers spend comparatively large amounts of money on in-game purchases, but this expenditure is spread over a large number of online stores. For foreign companies accustomed to receiving payment from iTunes or Google Play, this can be daunting. “Some foreign developers go beyond the surface, beyond the official Apple app store, to the fragmented local app stores, in order to gain maximum revenue,” said Yu.

Game theory

But for foreign companies with the appropriate scale and knowledge, it’s worth jumping through a few extra hoops. “Mobile gaming could be China’s Hollywood,” said Eric Tan, China manager at the Beijing office of multinational game developer Gameloft, in an interview with NewsChina. “But while it’s a huge, attractive market, it calls for a different mindset.” Gameloft has been in China since 2003, and has studios in Beijing, Shanghai and Chengdu, at which “around 99 percent of staff are locals,” according to Tan. In JanuNEWSCHINA I May 2013

Photo by Xinhua

Beijing-designed Kingdoms of Camelot: Battle for the North topped iTunes charts in 26 countries

ary, Gameloft sealed a distribution partnership with Tencent, one of China’s biggest web companies, for a version of one of Gameloft’s most successful games Ice Age Village to be distributed on the 350-million-strong Tencent Mobile QQ Game Platform. For Gameloft, one of the world’s most prolific game developers, China is becoming more and more of a focal point. A key consideration is “game localization.” Given the difference in tastes and gaming habits between Chinese and Western consumers, foreign companies cannot simply transplant their creative knowledge and expect to design a hit in China – this is where localization companies come in. As Henry Fong, CEO of Beijing-based localization company Yodo1 writes in a blog post entitled “Who the hell is King Arthur?”: “An important and often success defining element for a game is how deeply the gamer can relate to the overarching theme…people from different cultures have grown up with certain cultural, historical or mythical characters and themes that folks from other cultures simply cannot relate to.” With the pick of China’s game talent, companies like Gameloft can hire staff who are able not only to work with creative directors to design innovative games for the West, but also to ensure that local consumers will be just as interested when the game launches on NEWSCHINA I May 2013

the Chinese market. Companies hire “game engineers” to do a job more akin to the legwork that Western companies outsource to China in other industries, but their designers participate in the creative process, and can be instrumental in the evolution of the concept of a game. “Our Chinese staff are mostly engineers and designers,” said Tan. “We have capable engineers just as we have capable artists.” While Tan of Gameloft and Sheppard of Kabam both declined to comment on the profitability of the China operations of their respective companies, one statistic in particular should be of interest to developers across the globe: China started 2012 at the world’s number eight in terms of revenue on Apple’s download store, and jumped to number 6 by the end of the year. Meanwhile, it remained at number two in terms of total revenue. “Most countries don’t have such a big differential. Why does this mean there is potential? Because if there are downloads, then there’s the potential for people to pay,” said Junde Yu of App Annie. While players are reluctant to pay to download games, revenue in the Chinese market is largely generated via the “freemium” model, whereby players download a game for free, and pay for in-game add-ons and premium content. In a BBC News report, Niko Partners managing partner Lisa

Hanson was quoted as saying that publishers using the freemium model made US$9 billion in 2012. However, the prospect of government restriction looms on the horizon – last summer, the Chinese Ministry of Industry and Information Technology submitted to the WTO its plan to regulate the app development industry. Rumors of increased censorship and mandatory real-name user registration are likely to make investors uneasy. Meanwhile, research this year by consultancy iiMedia found that 51 percent of all local Chinese app development companies made a loss in Q3 of 2012. The report blamed the fact that the market had been flooded with homogenized products, many of which were attempts to make short-term gains by imitating popular games like Fruit Ninja and Angry Birds. When the app gold rush dies down, the market will likely filter out companies who cannot afford to create the top-quality content that Chinese consumers have shown they are willing to pay for. More partnerships between foreign companies and Chinese distributors are in the works. “It’s a puzzle, but both sides are trying to reach out to each other,” said Junde Yu. “When that happens and the better ones become more established, there will be more money to be made.”



Offshore Yuan

No Way Back

The offshore yuan market has become the fast-track for making the Chinese currency truly global. However, the further it travels, the more the yuan’s success depends on overdue reform at home By Li Jia


rom the 1780s up until the eve of the Battle of Britain, long before it became London’s new financial center, Canary Wharf was home to the UK’s oldest Chinatown. The capital’s current Chinatown is just five stops away by tube from the old financial center, the City of London. Even in the cosmopolitan heart of this metropolis, Chinese immigrant families continue to run restaurants, grocers and laundries. However, a slicker, more modern China presence is building up in those renovated Gilded Age buildings in the City, as well as in the gleaming skyscrapers of Canary Wharf, London’s modern financial center. Managers with HSBC Holdings, Standard Chartered, Barclays, Deutsche Bank, ANZ and Bank of China operate their yuan-denominated services in those antique boroughs, conducting trade settlements, fund-raising and corporate treasury management on behalf of clients ranging from European telecom giant Telco and automaker Jaguar Land Rover, to Bank of Brazil and leading European manufacturers of textiles, medical equipment, mining supplies and luxury consumer goods. “We have already seen evidence in 2013 of a significant increase in renminbi [yuan] trade in London,” noted Chancellor of the Exchequer George Osborne in a February 22 press release. Osborne was applauding an announcement by the Bank of England (BOE) about the proposed establishment of a currency swap line



with the People’s Bank of China (PBoC). Should such a system go online, these two central banks, representing the world’s most diverse financial center and the world’s fastest-growing economy respectively, will act as the lender of last resort in case of crisis in the London yuan market. Hong Kong currently holds 80 percent of the world’s offshore yuan assets and continues to be favored by the Chinese government for obvious political and practical reasons. China’s central bank has already established similar swap deals with a number of other countries, meaning that despite the fanfare from Downing Street, the London deal is neither significant nor new. However, the London deal, if signed, will be the first such arrangement between China and a G-7 country. In addition, London was the birthplace of the Eurodollar (the offshore dollar market) and remains the largest foreign exchange market for both dollars and euros, far exceeding those in the US and the Eurozone. As London strides towards the status of “Western hub” for the offshore yuan, meaning the sun will never set on the British currency empire, it also looks set to become the heart of a truly global currency trade network for the yuan. As George Norris, First Secretary of Financial Policy with the British Embassy in Beijing, explained to NewsChina, the pending agreement is about “providing stability and confidence for the global offshore yuan market in which London is the largest outside the Greater China.” London has its competitors. Confidence and enthusiasm for offshore yuan markets also abounds in Singapore, Taipei, New York, Paris and Frankfurt. This list will grow longer as China’s pink 100yuan banknotes become an ever more familiar sight overseas. All of this is good news for China’s strategy for developing the internationalization of its currency on offshore markets. The Eurodollar market in the 1950s and 60s is often cited as a tried and tested model, giving China’s economic planners confidence that this previously heavily restricted currency could potentially be floated internationally with minimal risk to the country’s financial strength. However, the Eurodollar market was built on a very different foundation, and served as a catalyst for policy changes within the US market in the 1970s and 80s, triggering the globalization of financial markets under Ronald Reagan. This example shows that the health of a currency’s domestic market will ultimately make or break its international prowess.

A Dance of Dragons

Basically following this well-trodden path for building an international currency, starting by encouraging yuan-denominated regional trade settlements in 2009, relaxing controls on inward and outward yuan-denominated direct investment and portfolio investment, then finally moving towards establishing reserve currency caches in a handful of mostly relatively undeveloped foreign countries, China is moving forward as expected on the internationalization of the yuan. International bankers and industries have responded very positively. There have been persistent runs on so-called “dim sum bonds,” yuandenominated bonds issued on markets outside the Chinese mainland. More than US$200 million in yuan deposits flooded into banks in NEWSCHINA I May 2013

Taipei, Taiwan on February 6, the first day of yuan-denominated trading. Deutsche Bank estimates this amount could reach billions by the end of the year. On February 25, US dollar-yuan futures began trading on the Chicago Mercantile Exchange, with similar fanfare. Today, more than 10 percent of China’s foreign trade is settled in yuan. According to financial data manager SWIFT, in January 2013, the yuan leapt forward to become the world’s 13th largest payment currency (it was 35th in October 2010). In another report it stated that “more than 1,050 financial institutions in over 90 countries are already doing business in the Chinese currency.” A survey released by The Banker magazine in July 2012 claimed that the world’s banking sector “has already envisioned a world where [the yuan] is a fully convertible reserve currency of comparable status to the US dollar,” adding that European sectors outside the banking sector or lacking business relationships with China are “aware of the future significance of the Chinese currency.” Research by the City of London has found that a number of companies have embraced the yuan to simplify their foreign exchange risk management by eliminating the US dollar exchanges.Well-established and emerging financial centers worldwide provide yuan-backed businesses with space to consolidate or build up their positions on the global financial markets. George Norris with the British Embassy told our reporter that more yuan-based transactions in the UK would help the country create a friendly environment for Chinese investors and anyone who wants to do business with China, thus further cementing London’s role as one of the world’s leading centers of commerce. In a world where jitters in the US or Eurozone can threaten global financial stability, having an alternative international reserve currency seems increasingly attractive. “It is logical to ask whether the yuan could provide an alternative,” said Barry Eichengreen, professor of Economics and Political Science at the University of California, Berkeley in the January/February 2012 issue of Foreign Affairs. For China, the gradual internationalization of its currency was originally designed to help Chinese importers and exporters hedge against foreign exchange risks and facilitate trade with other Asian economies in the context of the global financial crisis. In 2012, particularly, the offshore yuan, along with more foreign capital, was allowed to invest in China’s capital market mainly to help rescue a floundering yuandenominated A-share market. The relaxation of yuan-denominated outbound direct investment regulations facilitated the overseas expansion of Chinese companies and banks. An international yuan would also give the world’s second largest economy a bigger stake in the global economy, and thus further legitimize China’s voice in international trade. As the offshore yuan pool bloats, those in charge of it are speculating as to how best to make use of the Chinese currency. With interest rates very low worldwide, few are keen to put their yuan-denominated savings in the bank. Re-investment in the Chinese mainland is subject to strict quotas. As a result, many investors are believed to be hoarding yuan in anticipation of further appreciation, causing yuan deposits in Hong Kong to tail off from time to time since the end of 2011 when the yuan depreciation loomed. The somewhat cynical


economy January-June 2012: Growth in yuan trade related services compared to the six month average for 2011 Trade services 390% Letters of credit 2000% Import/export financing 19%






January 2012: Growth in average daily volume of deliverable yuan foreign exchange products compared to 2011 Spot yuan forex: 150% Deliverable forwards 33% Deliverable foreign exchange swaps: 240% Deliverable cross-currency swaps: 250%







Source: City of London

stockpiling of yuan is seen by some analysts as a threat to the currency’s future stability. Indeed, even international major currencies like the dollar and the pound sterling have been repeatedly attacked by speculators, triggering currency crises. This risk is much higher for the yuan, with the existing regulatory framework, according to Professor Sang Baichuan at the University of International Business and Economics, simply too rigid to cope with massive, often erratic, free capital inflow and outflow. China cannot afford a massive fluctuation in interest rates or inflation, a likely consequence of a sudden loosening of restrictions on the Chinese currency. Similarly, its banking sector, designed to serve the State rather than the market, could easily collapse if prematurely turned entirely over to market forces.

Old Roads, New Obstacles

Unlike the Chinese yuan, the Eurodollar never had to face a shortage of investment opportunities. While some circumstances in China


today are comparable to European and American markets in the postwar period, specifically tight controls on cross-border capital flow and domestic interest rates prevailed both in Europe and the US at least till 1970s, the dollar was widely used to price and settle the transAtlantic trade and investment. Much more importantly, the dollar dominance was institutionalized by the Bretton Woods charter, the cornerstone of the postwar financial system which compelled other Western economies to peg their currencies to the dollar which was fixed at US$35 per ounce of gold. As a result, the dollar had already become the dominant world currency at the time when the Eurodollar market was launched by London’s bankers. Neither of these favorable circumstances exists for the yuan. Indeed, history seems to indicate that a major international currency cannot be made through offshore operations alone. The postwar US market, supported by a booming manufacturing economy and robust middle class was a melting pot of entrepreneurship funded by a strong capital market, while Europe was still rebuilding its economies. US dominance failed to collapse even when the Bretton Woods system was abandoned in 1971. Even if China’s leaders lifted strict capital controls today, yuandenominated assets in the country could never match up to the appeal of 1950s US investments. International business communities, dominated by those from the US, were very eager to find ways, legally or illegally, to acquire US dollar assets in everything from stocks and bonds to factories. Even today, China’s bond market is fragmented and inflexible. The eurozone, despite constituting a larger single economy than that of the US, has constantly struggled with a fragmented bond market, widely blamed for the failure of the euro to displace the US dollar as the world’s default currency. China’s bond market is similar to Japan’s, according to Barry Eichengreen, typically nurtured to maturity by domestic investors, leading to lukewarm international transactions. The Japanese yen has never quite made the transition to a truly global currency. The recent SWIFT report concluded that “full convertibility does not make a currency international.” The stock market, another popular choice for international capital market investors, is also the most active part of China’s capital market, however, it is also highly volatile. Investing in the already overheated Chinese property market is slowly being seen as too risky for even the most hotheaded investor. In China’s real industry, the main engine which propelled the US to global dominance and China’s economic rise, the sheer number of restrictions on private investment, either foreign or domestic, prevents this vital market from coming close to realizing its potential. Ma Jun, chief economist with Deutsche Bank Greater China, has repeatedly stated that if the yuan is only used in world trade, not for direct or portfolio investment, it will only realize a maximum ten percent of its international potential.

Uncertain Times

The solution to the manifold problems confronting the yuan, however, may also lie in the lessons of the Eurodollar. Rapid growth in the Eurodollar market made it impractical for the US to maintain effective capital controls. This mounting pressure finally forced NEWSCHINA I May 2013



bynumbers Growth of per capita income of Chinese residents 15 12 9 6 3

US$1277 Per capita income of Chinese rural residents in 2012, compared with US$3,965 for those in cities.

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: National Bureau of Statistics of China

US$429 bn


Total debt of the fully Stateowned China Railway Corporation, launched March 14, 2013 to take over the business operations of the now-defunct Ministry of Railways. The corporation’s debt-asset ratio is 61.8%.

Budget deficit as a percentage of GDP in 2013 as forecast by the Ministry of Finance. China’s deficit currently stands at US$193.5bn, US$64.5bn more than in 2012.

After-tax profits of the Ministry of Railways


US$0.0024bn US$0.005bn



2003 2004 2005 2006 2007 2008 2009 2010 2011 2012






Net outbound direct investment made by Chinese financial institutions in 2012. They received US$5bn net inflow from overseas investors. Source: People’s Bank of China

US$0.005bn US$-1.4bn



0.5 0.0

Budget deficit-GDP ratio 2003-2012

-0.5 0.0 0.5 1.0 1.5 Source: Ministry of Finance of China


the US to launch sweeping financial deregulation, setting off a trend which spread to the rest of the developed world and ultimately created the global financial market in which China now hopes to increase its dominance. This tortuous journey, in the view of Chinese analysts like Professor Sang, is very likely to be repeated by China. Reforms set in motion during China’s campaign for WTO membership already set the country on this path. Predictably, independent economists are calling for the immediate removal of restrictions on private investment in China’s domestic financial market. So far, while even foreign banks have been granted limited access, there are more doors closed than open to private Chinese capital seeking to invest in China. A reform project aimed at allowing private investment in the credit market was launched in Wenzhou in 2012, but such baby steps have turned the investor optimism of a decade ago into deep disillusionment with the slow pace of reform. Analysts also call for a similar wave of liberalization in the Chinese stock market, still crippled by a State apparatus which sees its opinion as more relevant than those of actual traders. The result of the blurring of government and marketplace is rampant insider trading and accounting fraud. “A dynamic, fair market will in turn force regulators to improve their competence,” said Professor Sang. “With both strong domestic markets and regulators it will be… much more likely for China to benefit, rather than suffer, from free capital flow.” Unfortunately, such demands have been made for decades and have gained unprecedented momentum in the past few years, but have largely fallen on deaf ears. It seems that despite market consensus on the importance of economic growth, China is still held back by minority interests, those with exclusive privileges in market access. This reluctance to unleash the full extent of market forces in China is perhaps rooted in concerns that were China to truly open up to the globalized world, the country’s powerful economic planners and the enterprises they favored might have to forfeit absolute control over their main trump card – a muzzled, if bullish, economy with their best interests at heart.

US$574bn Value of payments made through online transactions in 2012.

-1.5 -2.0 -2.5

2007 2008 2009 2010 2011 2012 (to Sept)

Source: Shanghai Clearing House / China National Audit Office

Source: People’s Bank of China



SARS – 10 Years On

SARS SCARS 10 years ago, China was struck by an epidemic of SARS (severe acute respiratory syndrome), and paid a heavy price for failings in its public health system. NewsChina revisits China’s biggest public health scare of the 21st Century By Xie Ying




uang Xingchu has been out of the public eye for a decade. Even during the Lunar New Year festival, when friends and families dart from house to house bringing gifts, Huang’s door remains locked – he is tired of dealing with reporters. “SARS was long ago. Now we just want a quiet life,” Huang’s wife Deng Lijuan told the couple’s local paper, the Guangzhou-based Yangcheng Evening News, before switching off her phone. The first reported Chinese SARS victim, Huang, a chef from Heyuan, near Guangzhou, Guangdong Province, reportedly transmitted the SARS virus to several dozen people, including nine medical workers. The media nicknamed him “the Poison Master.” According to Wu Shaosong, Party secretary of Huang’s home village, Huang and his family moved elsewhere soon after his recovery, and he seldom comes back. “They worry that since his identity was revealed, customers would be scared away and he would suffer discrimination,” Wu Shaosong told the Yangcheng Evening News, refusing to reveal where Huang currently works. In early 2003, an unidentified deadly epidemic, later named SARS, broke out in China, killing 349 of the 5,327 of those infected. Although 10 years have passed since the outbreak, most of the victims, including medical staff who were involved in treating SARS patients, are still reluctant to talk about their experiences. “People would steer clear of me if they knew I was a SARS sufferer. The discrimination indicates that Chinese people have not yet walked out of the shadow of the disease,” another SARS victim in Huang’s village, surnamed Guo, told the media.


“Disaster” was the first word that came to nurse Wu Xi’s mind as she stepped into the deserted emergency room where she had been receiving SARS patients just a few days earlier. The desk and chairs were all out of place, and papers were strewn all over the floor. It was April 23, 2003, the day before Peking University People’s Hospital (PUPH) NEWSCHINA I May 2013

where Wu worked, was placed under quarantine. For the previous two weeks, PUPH, the hospital designated to treat ordinary SARS patients, had been ravaged by the virus. “We had set up three special wards for SARS patients, but still could not accommodate all the victims, who were sent here in ever larger numbers. They eventually packed the corridors and became mixed up with ordinary patients,” Wu recalled. Rumors began circulating around Beijing that people would be irreversibly infected with SARS if they had physical contact with a carrier of the virus, and that most of the infected would eventually die. “We spent every night awake, waiting for the dawn and counted the days we had lived for,” recalled Yang Zhixia, a SARS sufferer in Beijing. Many fled the city, and those who stayed chose to hole up inside their homes, leaving the capital’s streets, restaurants, hotels and subways completely deserted. “I could scarcely believe my eyes when I saw rows upon rows of empty shelves in supermarkets – stock like biscuits and instant noodles had all been snapped up,” Beijing resident Huang Mei (no relation to Huang Xingchu), told NewsChina. “It looked like we were at war,” she added. Hoping to sustain herself through the epidemic, Huang Mei eventually bought all five remaining eggs and a 25-kilogram bag of rice at a small shop. “Honestly, at first I was a bit excited about this long ‘vacation’ and the round-the-clock TV series that were being aired to keep at people home,” she recalled. “But as the number of SARS victims rose by more than one hundred every day, the excitement soon gave way to worry and anxiety.” “Nobody knew when those days would end,” she said.


Even today, few people know exactly when SARS hit the country. “It seems that the virus struck overnight,” Yin Chenyuan, a resident in Guangzhou, the city where the country’s first SARS virus carrier was reportedly found, told NewsChina. “I did not realize it was around us until the media said that granulated banlangen [a Chinese herbal composite

for treating colds] had sold out.” “The first case of SARS was actually found at the end of 2002. But the government adopted a policy of ‘an intense interior and a calm exterior’ for epidemic outbreaks, which meant taking strict measures within the medical circle but keeping it secret from the public,” Yin Dakui, former deputy health minister, told NewsChina. “The government worried the exposure would cause panic and instability,” he continued. Thanks to this policy, the Chinese public were kept in the dark for two months, during which time the government had forbidden any reporting or discussion of the epidemic, including on the Internet. It was April by the time the World Health Organization (WHO) launched a field investigation into Guangdong Province did the Chinese government began to draw back the curtain, while still trying to “pacify” the outside world by claiming that the disease was “under control.” Zhong Nanshan, a renowned doctor and medical academician from a top-level hospital in Guangzhou, however, skewered this assertion. “How can we say ‘we have got [SARS] under control?’ We don’t even have a clear idea about how to prevent and cure it. We have not even identified the source of the virus yet,” he exclaimed at a press conference on April 11, to gasps from the assembled domestic and foreign journalists. Zhong’s fellow expert Jiang Yanyong had already expressed similar incredulity. Outraged by an interview program on State broadcaster CCTV on April 3 in which then-health minister Zhang Wenkang claimed that only 12 SARS cases had been reported in Beijing, the senior doctor wrote to both CCTV and Hong Kong channel Phoenix TV, urging the government to “tell the truth.” On April 20, Zhang Wenkang and another senior official were removed from their posts for trying to cover up the epidemic. The same day, State news agency Xinhua published updated SARS stats from Beijing: 339 confirmed cases plus 402 suspected, almost 10 times the figure five days earlier. “Given the political environment at the time, the cover-up should not have simply


A doctor examines a recently-deceased SARS patient in Beijng, April 30, 2003

been blamed on a few individual officials, though they did have their shares of responsibility. It was a long established habit, and they had no option but to attempt a coverup,” Zeng Guang, chief scientist at the Chinese Center of Disease Control and Prevention, told NewsChina.

PUPH Collapses

According to Zeng Guang, Chinese experts had discovered as early as January 2003 that the SARS virus could be transmitted via close physical contact, and that the easiest and most effective way to control its spread was to cut off the source of infection, rather than researching hi-tech treatments and vaccines. By the time that experts were allowed to have a say, the optimum time to control the disease had passed. “Liu Qi [then Party secretary of Beijing] once told me that had I made my SARS report [to officials] 10 days earlier, Beijing might have seen 100 fewer SARS cases,” Zeng revealed to NewsChina. It was only when the government was forced to bring in non-government experts that Zeng Guang discovered that China had neither an emergency alert system for sudden epidemics, nor a command and labordivision system to deal with them. PUPH, a century-old hospital in Beijing, did not even have an infectious disease ward. Caught in poorly-administered temporary isolation, PUPH failed to prevent the virus


Photo by CFP

Photo by He Yanguang


The SARS crisis led to a run on supermarkets, Beijing, May 6, 2003

from spreading. Worse still, they had no way to transfer SARS patients to other hospitals, already packed with ordinary infectious disease patients. “We had no channels for sharing information, resources and personnel [with other hospitals],” Lü Houshan, then head of PUPH, wrote in his work report at the time. In the 16 days after the first SARS patient was hospitalized at PUPH, more than 70 medical staff members were infected. “I felt abandoned. It was hard enough for everyone to protect themselves, let alone to take care of others,” said Wu Xi, the PUPH nurse who was also among more than 70 medical staff infected. “Altogether nine [ordinary] wards have been contaminated with the SARS virus, which will cause a wider SARS spread in the hospital and in society if we do not transfer the SARS patients [elsewhere] and have the whole hospital quarantined,” Wang Shan, then vice-director of the hospital, wrote to the department in charge, despite having been warned against any “negative international impact” brought by closing “such an influential hospital.” “It is criminal to continue taking in ordinary patients,” he told Party officials at a work conference. On April 24, PUPH was shut off from the outside world by government order, with a total of 1,554 people, including over 1,000 staff members and their families, and nearly 500 ordinary patients and their fami-

lies, placed under quarantine.

Military Tactics

With the fall of PUPH, the Beijing municipal government’s only hope of accommodating the growing number of suspected and confirmed SARS cases was to build a dedicated temporary hospital. This “SARS Camp,” as it was dubbed by foreign media, was located in Xiaotangshan, a suburb 40 kilometers north of Beijing. According to Deng Chuanfu, vice-director of the Xiaotangshan Hospital, the treatment center, with its rows of temporary tents, was more like a military field hospital, with 1,200 military medical workers given the command that “In no case must the medical staff be infected with SARS.” At the time, about 20 to 30 percent of doctors and nurses in other SARS hospitals had already been infected. In order to follow the order, and despite the increasingly hot weather, every member of medical staff was made to wear two protective coats (one disinfectable and the other disposable) plus two multi-layer masks. According to Deng, the hospital worked out an 8,000-word regulation to prevent infection, claiming that anyone guilty of serious violation would be court-martialed. The strong hand extended beyond the hospital, as Liu Qi, then Party secretary of Beijing, demanded that any schools, government departments, institutions and companies where SARS was found spreading would NEWSCHINA I May 2013

SARS Timeline 2002

November 16 – First SARS case discovered in Guangdong Province

Courtesy of PUPH


PUPH is placed under quarantine, April 24, 2003

be punished. Thanks to this forceful centralized approach, Huang Mei’s mandatory “vacation” lasted one month. Even after they came back to work, her company (a State-owned IT service firm under the Chinese Academy of Sciences) assigned seven shuttles buses to ferry its employees to and from the office, trying to minimize the possibility of SARS infection on public transportation. “I was put in segregation as soon as I drove into the city from the highway. I did not even see my family members,” Wang Shuna, then a Beijing resident who attempted to drive back to her hometown in nearby Hebei Province during the SARS outbreak, told NewsChina. On June 21, the Xiaotangshan Hospital discharged its last batch of 18 patients who had recovered from SARS, with no doctors or nurses infected. Three days later, the WHO crossed Beijing off its list of SARS epidemic regions.


But memories are harder to let go. Wu Xi no longer dares to open the notebook in which she wrote down her experiences during that dark period. Wang Shan, now promoted to head of the PUPH, said he plans to write a book about SARS which will not be published until after his death. “Can you restore history? How can


you?” he asked our reporter. In truth, SARS forced great advancements in China’s public health system, with new disease prevention systems established and relevant laws and regulations issued in the following years. But experts believe it is far from enough. “While the government has invested a lot in the hardware of the public health system, the ‘software,’ which involves qualified managerial and medical professionals, government policies and officials’ awareness [about dealing with epidemicrelated emergencies] still lags behind,” warned Hu Yonghua, a public health expert from Peking University. Furthermore, the government has not dragged its people out of the shadow of the cover-up. Huang Mei remembers how shocked she was when she found the number of reported SARS cases had suddenly rocketed to over one hundred from just over a dozen. That helps explain why the Chinese public frequently doubt the official casualty statistics in the aftermath of disasters or accidents, such as the 2011 Wenzhou train crash and the 2012 Beijing rainstorm. “Maybe the hardest thing to recover is people’s confidence in the government,” said Huang Mei. (Cai Rupeng, Han Yong and Xu Zhihui also contributed reporting)

January – First SARS case reported to Guangdong medical authorities February 11 – Guangdong holds first SARS press conference, revealing that 305 cases were found between November 16, 2002 and February 9, 2003 February 21 – Medical professor Liu Jianlun from Guangzhou infects seven people in a Hong Kong hotel, including a Canadian, a Singaporean, a Hong Kong local, and an American businessman February 28 – A WHO medical professor names the virus “SARS” Early March – Beijing discovers its first broughtin SARS case March 12 – WHO issues its first official global warning against SARS March 13 – WHO gives its second global warning and officially defines SARS March 26 – WHO launches global investigation into SARS cases March 27 – WHO gives its third global warning, ordering airlines to screen passengers for suspected SARS cases April 3 – China’s Ministry of Health claims they had put SARS under control. WHO crosses Beijing from list of epidemic regions April 12 – WHO re-lists Beijing as an epidemic region and sends an investigation team April 14 – Beijing activates its top-level prevention system April 16 – WHO announces an unidentified coronavirus never before seen in human beings is the source of SARS April 20 – China’s State Council holds a press conference revealing that a total of 1,807 SARS cases had been reported by April 18 April 21, China’s Ministry of Health begins updating reports daily, rather than every four days May 1 – The government cancels the national seven-day Labor Day holiday April 23 – Beijing places seriously affected areas under quarantine April 27 – Beijing closes off many public places, including cinemas and libraries April 29 – Xiaotangshan SARS hospital built April 30 – First batch of SARS patients transferred to Xiaotangshan, with 1,200 military medical staff joining the crisis effort May 6 – China’s Ministry of Environmental Protection issues regulations on disposing of SARSpolluted water and waste May 12 – China’s State Council publishes emergency regulations on sudden medical epidemics June 21 – Last batch of 18 SARS patients discharged from Xiaotangshan Hospital June 24 – WHO crosses Beijing off list of epidemic regions



SARS – 10 Years On

The Price of Survival Fang Bo, a former SARS sufferer in Beijing, thought he had left the epidemic behind for good. But when he began to feel serious pain in his legs in late 2003, the diagnosis plunged him back into misery: Fang now suffers from osteonecrosis of the femoral head (ONFH), a long-term SARS complication that causes impairments in bones and joints. “Hormone therapies were overused during the SARS epidemic, especially in Beijing, the most seriously affected city. After all, at that time, hormones were the most effective drug in the fight to save lives,” explained a report on State broadcaster CCTV. Due to these hormone overdoses, over 300 SARS sufferers in Beijing have now been diagnosed with SARS complications, usually a combination of ONFH and idiopathic pulmonary fibrosis (IPH), a lung-related disease that causes respiratory failure. However, the after-effects of SARS infection can be so debilitating that, for some survivors, they can destroy the will to live –according to media reports, many sufferers have attempted suicide. “It is called ‘long-life cancer’ in the medical circle. ONFH, though not fatal, is incurable and can eventually cripple or even paralyze patients,” Chen Weiheng, an ONFH doctor at Beijing Wangjing Hospital, explained to the media. “[Patients] have to use drugs for the rest of their lives.” The resulting unemployment and high medical costs have driven many sufferers into clinical depression, another typical complication of SARS. A survey targeting over 100 sufferers showed that nearly 75 percent were found to be suffering from depression. They tend to shut themselves off from the outside world, and many leave their families. In 2005, the Chinese government included these SARS complications in the list of ailments that qualify for free treatment, and in 2008 began to grant allowances to certain sufferers, but this is far from a long-term solution to the problem. “[The media and government] all said that they would not forget us, but who will take care of us when we are lying in bed, helpless and hopeless?” asked Fang Bo.



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Seven of Fang’s family members were infected with SARS in 2003, and the disease took the lives of his wife and sister-in-law. Despite being made a propaganda hero of the fight against SARS by the media at the time, Fang has been suffering from ONFH since late 2003. After he had a prosthetic hip fitted, he found the pain was transferred to his shoulders and knees. In despair at his diminishing ability to support himself, Fang has developed a fiery temper – he once struck himself in the head with a beer bottle. Fang’s two daughters both divorced because of SARS, and one remarried far away from home. He now lives alone, concentrating all his efforts on petitioning for a government-funded assistance system.



SPECIAL REPORT Yang Zhixia, 55 Having watched her parents, husband and brother lose their lives to SARS, Yang placed all her hopes on her only son. Although she lost her job due to her ONFH, she has struggled on a meager allowance, and sent her son to university. Yang finds spiritual solace in her fate, and believes that her misfortune will bring fortune to her son and her young grandson.

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Li had run marathons for 10 years before SARS, but now she struggles to walk. SARS has left Li and the other two members of her immediate family – her husband and son – suffering from ONFH, but only Li herself qualifies for free treatment. The SARS complications has turned Li from a well-paid saleswoman to a housebound invalid. Li once made a failed suicide attempt - the pain in her knee prevented her from jumping into a river. “God is asking me to live,” she told media at the time.

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Liu Xiufeng, 49 Since Liu lost her husband to the SARS epidemic, she cannot bear the sight of happy couples. She now lives alone with her daughter, but admits to tormenting and often beating her. According to her doctor, ONFH has driven Liu into severe depression. She has turned to caring for small animals, adopting a number of stray cats and dogs, yet seldom communicates with humans.

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Wang Jian, 54 Wang and his wife have both been crippled with ONFH since they received SARS treatment. No longer able to work, the couple struggle on meager disability handouts. Wang, a former photographer, told the media that nothing is of interest to him anymore, and he prefers to remain in the house. “How can we support ourselves as we get older? The handout falls far short of the medical fees,� he said.



Zhang Wenrong, 61 Zhang was infected with SARS while looking after her father in the hospital. Her father later died alone, since each of his three children was kept in different isolation wards. Even today, Zhang struggles to deal with the fact that she is disabled. “I was good at basketball and badminton, how can I now not even manage to hold a broom?� she asked the media. In order to avoid staring eyes, Zhang began to seal herself off from her friends, and she even tried to hide her disease away from some relatives. Due to her inability to work, ONFH treatment has swallowed up her savings.

Zhang Hongqiang, 50 Every Tuesday, Zhang and his wife help each other to the hospital for their ONFH treatment. As the only two survivors of their family following the SARS crisis, they are increasingly anxious about who will look after them in their remaining days.

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Xi Jinping in Moscow

Bear Hugs To cement a long-term stable partnership, sharing a common rival is not enough By Li Jia


he first person you talk to on a special occasion is usually important. No exceptions were made in Moscow on March 22, 2013, when the new Chinese President Xi Jinping, during his first overseas visit as head of state, told his Russian counterpart and host Vladimir Putin that China and Russia are “each other’s most important strategic cooperative partners.” In a joint communiqué following the meeting, both men hailed an “unprecedentedly high level” of diplomatic ties. Beijing was the first to roll out the red carpet


for Putin after his re-election in 2012, with Moscow the first international port of call for former Chinese President Hu Jintao during both terms in office. The two share a land border more than 4,300 kilometers long, and China is also a key figure in Moscow’s relations with Mongolia, Kazakhstan, Tajikistan and Kyrgyzstan. That said, Xi’s visit represents more than a simple continuation of a tradition. Nor was it a mandatory recognition of Russia’s crucial geopolitical relationship with China. Rather, it was a response to fundamental changes that have

taken place in the global political arena in the last decade. China’s rise as the world’s second largest economy, the strategic US pivot to Asia and the growing schism between the Sino-Russian partnership and other major international players over security issues, particularly Syria, Iran and North Korea. Those changes, experts assert, are bringing China and Russia closer together, bumping both nations up their respective diplomatic agendas. While few would claim a return to the power games of the early Cold War years, when NEWSCHINA I May 2013

Stalin’s Soviet Union and Mao’s China stood in opposition to the US, there is a tangible sense of lines being drawn with increasing clarity. For China and Russia, however, it is necessary to overcome the barriers between them before they can consolidate their partnership on the international stage.

Shadow Plays

The division between the US-NATO bloc on one side and China and Russia on the other has been increasingly evident in recent years. The two have jointly vetoed three UN draft resolutions backed by the West and the Arab League in 2011 and 2012 which could have paved the way for military intervention in war-torn Syria under UN Charter Seven. China and Russia have also repeatedly opposed tougher international sanctions on North Korea and Iran, in response to those countries’ suspected ongoing development of nuclear weapons. The two countries share common ground when it comes to frustration with the US. Russia continues to oppose the expansion of NATO missile arrays in the former Eastern Bloc, while China has balked at perceived US support for its rivals in territorial disputes over island chains. As the two emerging economies face skepticism and criticism over what many Western observers have labeled the “state capitalism” practiced by their respective leaderships, there is also potential for greater cooperation in the political sphere. As the US has realigned its priorities to the Asia-Pacific region, bolstering old friendships and forging new ones, Russia is also turning east. Siberia and Russia’s far eastern regions have been identified by Moscow as the “vector” of Russian development in the 21st century. In a February article in the state-owned Moscow newspaper Moskovskiye Novoski entitled “Russia and the Changing World,” Putin highlighted the “chance to catch a Chinese wind in the sails” of Russia’s economy. Recently, state broadcaster Voice of Russia cited senior Russian military officials who it claimed advocating an increased Russian naval presence in the Pacific. “Russia is wary of US intentions to consolidate its global dominance by pivoting to the Asia-Pacific region, the future center of international security and politics,” said Wang Haiyun, senior advisor at China Institute for International Strategic Studies and former Chinese military NEWSCHINA I May 2013

attaché to Russia. “Russia believes it has to be a big player to defend its interests and dignity as a major world power,” he added. As the US shale revolution swept the West and ongoing civil wars in the Middle East disrupted China’s fuel supply, Russia and China have edged closer to a deal on natural gas that has been over a decade in the making. On March 22, state-owned energy giants from the two countries signed ground-breaking agreements guaranteeing a supply of Russian gas as well as giving China’s State oil giants stakes in Russian oil fields. As well as drawing a line under ten years of Chinese attempts to secure a Russian gas pipeline, this deal also marks the first time Chinese oil companies have been granted access to Russian oilfields, decades after their international counterparts. Energy cooperation with Russia “carries strategic significance,” said former Chinese vice-premier Wang Qishan, speaking during a February 25 meeting in Beijing with his Russian counterpart Arkady Dvorkovich. Joint hi-tech mega-projects have been proposed as another focus for cooperation during Xi’s visit. Nuclear energy and aerospace technology have been listed as priorities. At the end of 2012, Putin hinted at further plans for cooperation in aircraft and helicopter manufacturing. Russia is also the world’s only major arms manufacturer willing to cooperate with China’s space program and defense industry.

Balancing Act

“Russia’s shifting to the Asia-Pacific region focuses on joining hands with China for its own economic growth, and… hedging against US re-balancing in this area,” Wang Haiyun told NewsChina. Professor Zhang Liangui of the Central Party School of the Communist Party of China, has also openly cast doubt on the true depth of partnership between any major powers. Not everyone agrees that the US is the unmentionable third party in this marriage of convenience. Professor Pang Dapeng with the Chinese Academy of Social Sciences, argued that China and Russia attract each other through “a dual internal engine.” In Pang’s view, practical concerns, specifically the scale of both countries’ shared borders, necessitate cordial diplomatic relations. Both countries also have a mutual interest in facilitating their own development through further exploitation of their compli-

mentary economic structures and joint hightech projects. “[China and Russia] regard years up to 2020 as a crucial period for their national rise,” he said. Whatever the true nature of the Sino-Russian partnership, and the US role in it, all sides seem keen to downplay any notion of a return to the early Cold War dynamic of the 1950s. Both China and Russia have been visibly eager to develop stronger, better ties with the US in recent decades. Both countries also have a long way to go to turn warm political hyperbole into tangible economic benefits for their respective peoples. Bilateral trade stands at around US$80 billion, only one-sixth of China’s trade with the US. While increased oil and gas trade will help boost this figure, its overall impact is likely to be negligible. Russia has never been comfortable with relying too much on its energy exports, particularly when these precious resources are being used by such a formidable power as China. Russia has also resisted opening its market to Chinese manufactured goods, with economic planners keen to protect homegrown industry. “Russians feel bad to find themselves raw material suppliers for China as China has outpaced Russia in manufacturing,” said Wang. Russia was also hit hard by the Great Recession, with annual GDP growth down to three to four percent at best, compared with China’s estimated 7.5 percent. This gap has further fueled Russian jitters over allowing China the keys to its vulnerable back door – the vast area east of the Caucasus. Already, Russian media outlets have given voice to public opposition to rising numbers of Chinese businessmen flooding into the country’s far east, with many concerned that they will displace indigenous Russians. Of the top ten imported car brands in Russia, not a single Chinese name is among them. Affluent Russians and Chinese share another fondness – for European and American brand names – with bilateral trade continuing to revolve around raw materials and cheap manufactured goods. While ongoing diplomatic efforts and a loosening of trade restrictions can help ease tensions between China and Russia, candid discussion of sensitive issues, rather than the trumpeting of mutual interests, is rare. But partnerships necessitate the telling of hard truths, and only by facing up to their conflicts will these two giants be able to make headway on common ground.



North Korea

Friends Like These

North Korea’s recent nuclear test and continued belligerence is making China’s middleman role in international dialog harder to manage By Yu Xiaodong


ollowing an announcement that it would scrap the 60-year-old armistice that ended the Korean War with a threat to launch a preemptive nuclear strike against the United States, the Democratic People’s Republic of Korea has been stepping up its bellicose rhetoric since the United Nations Security Council passed a package of toughened sanctions designed to punish Pyongyang for carrying out a nuclear test on February 12, the isolated nation’s third since 2006. Despite being mainly targeted at the US and the Republic of Korea to the south, with which it technically remains at war, North Korea’s belligerence in spite of warnings from its only ally, China, that it could face cuts to essential aid, has irked Beijing, leading to renewed calls for an overhaul of official policy towards the Kim regime.

Allies No More?

Conducted less than 100 kilometers from the Chinese border, the February nuclear test not only sounded an alarm to Chinese residents across the border, but also unsettled China’s security apparatus, now faced with an impoverished, unpredictable nuclear-armed state on its doorstep. “A nuclear-armed North Korea poses a significant security threat to China,” warned Zhu


Feng, a professor from the School of International Studies of Peking University, in his article published in Singapore’s Lianhe Zaobao newspaper. “If North Korea can threaten the US with nuclear weapons today, it can surely blackmail China with its nuclear arsenal in the future.” Coming alongside the United States’ “Pivot to Asia” strategy and tensions over the Diaoyu Islands between China and Japan, North Korea’s provocative behavior only serves to boost American military activity in the region and justify Japanese rearmament while alienating South Korea, a nation with whom China has established a reasonably stable working relationship in the context of its other regional disputes. In the wake of the nuclear test, anti-North Korea protests were reported in Shenyang, capital of Liaoning Province, which borders North Korea, and in Guangzhou in the far south. Though small in scale and quickly dispersed by police, these were unprecedented protests, showing that the Chinese government’s continued support for North Korea is increasingly at odds with public opinion. Professor Zhu argued that China, which he said “was humiliated and dumbfounded” by Pyongyang’s decision to continue with its nuclear weapons program, should make it “crystal clear” to North Korea that a continued push for full nuclear armament would incur “dire conse-

quences” if it ran counter to Chinese interests. Others argue that China should drop its special treatment of North Korea, on the grounds that it no longer serves its original purpose. For years, China’s priority in the region has been to prevent the North Korean regime from collapsing, in order to avoid an exodus of millions of refugees across the shared border. “It is time for China to differentiate enemies from friends,” said Sun Yingjie, a popular blogger. In the face of North Korea’s defiance, the Chinese government seems to have made some obvious policy shifts with regard to North Korea. Following the government’s repeated denouncement of the nuclear test, China joined the US and others in passing a UN Security Council resolution reinforcing existing sanctions, which range from harsher financial restrictions and more rigorous cargo inspections, to a ban on exports of luxury goods such as yachts and sports cars to North Korea. The North’s typically aggressive reaction to the new sanctions is deemed to be partly directed at China. For example, the announcement that the armistice would be torn up is perceived by many Chinese observers as a reminder of China’s continued alliance with the North. Hundreds of thousands of Chinese soldiers fell in the Korean War (1950-1953) before the armistice brokered by the US and China was signed, a NEWSCHINA I May 2013

Cphoto by cfp

Kim Jong Un visits the Wolnae-do Defense Detachment on the country’s western frontier, March 12, 2013

fact subsequently painted out of official North Korean histories of the conflict. According to Article 2 of the Treaty of Friendship, Cooperation and Mutual Assistance signed in 1961 between China and North Korea and automatically extended to 2021, the two countries agreed to “immediately take all necessary measures to oppose any country or coalition of countries that might attack either country,” a clause treated as an effective defensive pact in North Korean circles. Since the nuclear test, however, China has been distancing itself from its troublesome neighbor. On March 8, Hua Chunying, spokeswoman for the Chinese Foreign Ministry, said that the relationship between China and North Korea is a “normal bilateral relationship,” implicitly denying a military alliance. On March 12, during the annual meeting of the National People’s Congress, Rear Admiral Yin Zhuo, an outspoken military expert and director of the Advisory Committee for Information Technology of the People’s Liberation Army Navy, reportedly claimed that there was no extant military alliance between China and North Korea, the most explicit denial of such a relationship expressed by a senior official thus far.

‘A Balanced Approach’

However, even if China is willing to adopt


a more flexible stance on its relationship with North Korea, a major policy overhaul now seems inconceivable for the foreseeable future. Beijing sees the strengthened US military presence in the region as partially responsible for the current tension, and as China has found itself embroiled in territorial disputes with almost all of its neighbors, its leaders are keen to hold on to a limited number of relatively friendly nations. Responding to a Wall Street Journal article that deemed China’s policy towards North Korea “a failure,” the State-run Xinhua News Agency’s commentary argued that the blame for such a failure lay with Washington, not Beijing, justifying this assessment with the fact that North Korean aggression continued to target the US, not China. “It should not be forgotten that the US is one of the two major players in this game [the other, presumably, being North Korea],” said Rear Admiral Yin, “China is just a third party. The current crisis has stemmed from wrongheaded US policies, not China,” he continued. Beijing has repeatedly voiced its concerns about annual war games staged by the US and South Korean militaries in recent years. The most recent drills are running from March 1 through April 30, involving 200,000 South Korean troops and 11,000 US soldiers, and are designed to emulate a total war scenario on the

Korean peninsula. In a commentary in the State-run Global Times on March 7, Chen Fengjun, a professor in international relations from Peking University, argued for China to adopt a “balanced approach” toward its middleman role between North Korea and the US. Chen said that the “essence” of the crisis lies in the imbalance between what he termed the East Asian “Northern Triangle” of Russia, China and North Korea and the Southern Triangle of the US, Japan and South Korea. “While the Northern Triangle has long since ceased to be, the Southern Triangle is being consolidated, which puts North Korea in an encircled and desperate situation,” he said. “The key to defusing the Korean crisis does not lie in the hands of China, but in the hands of the US, which should scale down its military pressure on the North,” Chen continued. Beijing’s reluctance to overhaul its policy toward North Korea may reflect its deep suspicion about Washington’s long-term regional strategy, and its efforts to consolidate its alliance with Japan and South Korea, dubbed by many as “Asia’s little NATO.” But as Beijing fails to rein in Pyongyang, it may also lose its leverage with the US, which still sees itself as the dominant regional military power. Analysts believe that North Korea, which has a long record of bluffing, will not act on its most extreme threats of deploying nuclear weapons. With its ICBM program still in its infancy, such an action would likely result in North Korea’s annihilation. According to Chinese analysts, what North Korea really wants, despite its bluster, is direct talks with Washington resulting in security guarantees, a formal peace treaty and international recognition of it as a nuclear power. In other words, Pyongyang seeks international legitimization for the Kim regime, a prospect neither the US nor South Korea is willing to consider. In response to Northern provocations, South Korea warned that the North was risking being “evaporated off the face of the Earth” should it launch a nuclear weapon, while the US warned that any preemptive nuclear strike from Pyongyang would be “suicidal.” In the meantime, China remains in the middle of a situation it lacks the power to resolve to the satisfaction of all parties, both exasperated and increasingly worried by the behavior of its “little brother.” 



The Face of Chiang Kai-shek

In the Face of Power

The new play The Face of Chiang Kai-shek uses a story set in 1943 to examine relationships between politics and academia in modern China By Wan Jiahuan in Nanjing


hether or not to accept a dinner invitation is the center of the argument between three National Central University professors that runs through the play The Face of Chiang Kai-shek. It is set in 1943 Chongqing, China’s wartime capital during the Second Sino-Japanese War (1937-1945). But this is no ordinary invitation – the three have been asked to a Lunar New Year’s Eve dinner thrown by Chiang


Kai-shek, at the time generalissimo of the Kuomintang-led Republic of China and president of National Central University. The invitation is a moral quandary for the intellectuals – a test of their attitude when confronted with power. This concept forms the central theme of the play, whose plot is based on one of many anecdotes about Chiang’s tenure as university president that still circulate on the campus of Nanjing University (formerly National Central

University) today. In the play, the three professors, all of whom have different political views, spend a whole afternoon clashing over the question: to go or not to go. Shi Rendao, a left-leaning professor, is a longstanding opponent of nationalist leader Chiang Kai-shek and labels him a dictator. However, he wants to ask Chiang a favor: to ship back a box of books he left behind during the university’s retreat from Nanjing to Chongqing. Professor NEWSCHINA I May 2013

Lü Xiaoping, the play’s director and head of the Department of Film and TV Arts of Nanjing University, has said that the professors represent three kinds of intellectuals: leftists, rightists and those who care little about politics. He believes that, unlike many of his fellow academics today, the three professors, despite having different political views, have one thing in common: They remain independent in the face of power. The play was well received when it debuted at the 110th anniversary of Nanjing University last year. Over the past nine months, every performance has sold out and 33 extra shows were staged. Now, the play is touring the country.

Artistic License

Bian Congzhou is a government supporter who wants to accept the invitation but is concerned about being labeled a government stooge. Lastly, Xia Xiaoshan is a food-lover who seems more interested in the stewed tofu with ham that would likely be served at the dinner than in politics. The play, which discusses the dignity and independence of intellectuals in the 1940s, is written by a student at Nanjing University, Wen Fangyi, herself born in the 1990s. NEWSCHINA I May 2013

Nanjing University has no shortage of stories about Chiang’s time as generalissimo-cum-university president. He once reportedly asked Hu Xiaoshi, a professor and eminent calligrapher at the university, to paint a piece of calligraphy for his birthday. Hu turned him down. It is also said that once, when Chiang turned up to a commencement ceremony, many students and faculty avoided the event, delivering a clear snub to the country’s leader. The most widely circulated story is the argument between the three professors over whether to accept the invitation, thereby giving Chiang “face,” or not. Their final decision remains unknown. Lü Xiaoping, dean of the Department of Film and TV Arts of Nanjing University, heard the story from his teacher, Dong Jian, former dean of the Department of Chinese Language and Culture. Lü was eager to know more: “The story is so widely known, but why? In truth, it reflects people’s dissatisfaction with the current situation in Chinese universities,” he told NewsChina. Today, it is almost unthinkable that political power would be met with such defiance from academic circles. Lü Xiaoping wanted the story to be produced on the stage. In September 2011, he gave Wen Fangyi, one

of his students, the assignment of writing a script on the subject, roughly 20,000 Chinese characters (equal to roughly 12,500 English words) in length. The theme of the play was “whether or not to give Chiang face.” Wen Fangyi interviewed the 76-year-old Dong Jian, and studied historical sources. In the course of his research, Wen found that the story may not have been true – Chiang Kai-shek could not have invited the professors to a New Year’s Eve dinner party, since at the time (early 1943) he had yet to make up his mind whether or not to take up the post of university president. Lü Xiaoping believed that the story would make a great play all the same. At the time, Chiang Kai-shek and the government did not – or could not – keep universities and professors under control. “Can a single example be found of any democratic government in the world able to keep universities under the thumb?” Lü said. “Freedom from the ‘thumb’ is a precondition for the development of universities. We all mourn for the days when universities were free from control.”

Dinner Dilemma

In April 2012, Wen Fangyi finished writing her play, and rehearsals soon began. A month later, The Face of Chiang Kai-shek debuted at Nanjing University, with the first performance scheduled to coincide with the university’s 110th anniversary celebration. In the play, the two more politicized professors, who have diametrically opposing political views, end up throwing mahjong pieces at each other, usually drawing laughter and applause from the audience. Several scenes show the professors arguing about the corruption of the Kuomintang government. Bian Congzhou, the professor in support of the government, says to Professor Shi Rendao, “People curse the government every day, as if accusing the government of corruption makes them progressive.” Shi Rendao retorts, “Shouldn’t we condemn the government? Their corruption is world-famous!” While doing research for the play, Wen Fangyi


Courtesy of the interviewees


Three professors argue with each other in The Face of Chiang Kai-shek

came across a quote from the book Eight Years of National Southwest Associated University, a university annual published in 1945. The quote read: “If you are dissatisfied with the government, go to Yan’an,” evoking the base camp of the Chinese communists which had become a mecca for young intellectuals from across the country in search of equality and social justice. In the play, Bian Congzhou asks: “Is there indeed democracy and freedom in Yan’an?” Shi Rendao replies: “More so than here.” Bian then replies: “I have only heard of democratic centralism there,” drawing paralells with modern-day arguments where the United States, Taiwan and various other places are discussed in similar terms. For Wen Fangyi, the most challenging part of the writing process was bringing the dialog to an end, since the conclusion of both the matter of the dinner invitation and the moral argument between the professors is unknown. The playwright drafted an ending in which the professors, now in their old age, appear on stage and reveal whether or not they accepted the dinner invitation more than two decades earlier. The final scene is set during the Cultural Revolution (1966–1976), which uprooted all cultural and educational efforts, in-


cluding universities, and in which Chinese intellectuals were ruthlessly persecuted. However, this ending was unsatisfactory to Professor Dong Jian, who hoped “to compare today’s intellectuals with their predecessors in 1943.” “The spirit of today’s intellectuals has degenerated significantly,” said Dong Jian in a review of the play. However, a direct comparison between the status quo in universities of today and those of the 1940s is so sensitive a matter that Professor Dong’s proposal had to be shelved.


The Face of Chiang Kai-shek was staged four times during the 110th anniversary of Nanjing University. This far exceeded the expectations of Wen Fangyi, the playwright, as she had originally anticipated that the play would be performed only once, primarily to an audience of students. To her surprise, the Nanjing University auditorium was packed to capacity for all four performances. Lü Xiaoping had intended to have the play performed long before the 110th anniversary. He had been concerned for a long time with the core values of universities in the present day, in the context of Chinese universities increasingly losing

their academic independence to the influence of bureaucracy. “National Central University once ranked 30th among the world’s universities. We hope Nanjing University will pick up the tradition and spirit of that time,” Lü Xiaoping told NewsChina. TV programs, movies, and other stage plays are habitually subject to China’s strict censorship system. However, The Face of Chiang Kai-shek is “protected” to a certain degree in Nanjing University, where traces of the traditional spirit still linger on. As regards the play, Lü Xiaoping says the relationship between Nanjing University and the authorities has been cordial. During rehearsals and performances, nobody from the Propaganda Department of Nanjing University critically reviewed or examined the play. Wen Fangyi admits that the play still has some defects in terms of dramatic techniques. However, it has been received favorably by audiences. The president and the Party secretary of Nanjing University watched the play in the theater, as they were too busy to watch it during the university’s anniversary celebrations. When writing the dialog between the professors, Wen Fangyi did not pay much heed to the political sensitivity of her subject matter. “Young people like Wen Fangyi care much less about political correctness, but I was highly anxious about it,” said Lü Xiaoping. In early March, the performance agency that had helped promote the play approached Peking University, probing the possibility of staging a performance at the famed Peking University Hall. The university demanded to review the script and video recordings of the performance. “I am quite anxious about the result of the review,” Lü Xiaoping told NewsChina. Two days later, Peking University gave the show the green light, agreeing to two performances at the university hall. Lü Xiaoping was ecstatic at the news, and predicted that many old intellectuals would show up. As the play goes national, Lü’s optimism has continued to grow. He is confident that people will remember the play when Nanjing University celebrates its 200th anniversary, and also fancies that by that time, people will be able to talk candidly not only about 1943, but also about 2012. NEWSCHINA I May 2013

Zuoxiao Zuzhou

He Rocks Rock ’n’ roll singer Zuoxiao Zuzhou has released an album of nursery rhymes, These Tiny Grapes, as an unorthodox way of calling attention to China’s social ills

Photo by Li Qiang

By Chen Tao

Zuoxiao Zuzhou in the courtyard of his studio, January 30, 2013





ock star, artist, narcissist, entrepreneur, con man - Zuoxiao Zuzhou has been called many things over the years, though he has always retained his trademark top hat and wacky vocal style. However, a reputation as a maverick has not stopped him from becoming China’s currently reigning king of rock ‘n’ roll. Zuoxiao Zuzhou has his tricks. Before turning to music in the mid-1990s, Zuoxiao Zuzhou was a fixture of China’s contemporary arts scene and collaborated with others in the creation of the famous artwork “Add One More Meter to the Nameless Mountain,” which was displayed at the Venice International Bienniale Exhibition in 1999. In the following years, Zuoxiao Zuzhou shifted into music, earning a reputation for seemingly tuneless vocals and savage instrumentals. His latest album, These Tiny Grapes, has been praised by music fans and musicians alike, with the artist claiming that it is China’s first-ever “Weibo-bred” collection of songs. Weibo, China’s Twitter-like microblog service, has become one of the biggest information platforms on the country’s heavilyrestricted Internet. For someone like Zuoxiao Zuzhou, who regards himself as an independent musician, Weibo provided the perfect place to hook up with musical partners, collect raw materials, and tinker with lyrics. The album’s inspiration? Social problems. “This is a Weibo-bred album that talks about problems in education, food safety, drugs, the environment, forced demolition, and corruption,” Zuoxiao told NewsChina in his Beijing studio at the heart of the city’s trendy Caochangdi art district. Interestingly, Zuoxiao claims that his new album is a collection of “nursery rhymes” due to its heavy use of children’s choruses and solos. The whimsical album artwork reinforces this cutesy image, though musically it combines furious bass lines with saccharine


vocals – more experimental rock than Little Miss Muffet. Reflecting the upheavals that are occurring in modern-day Chinese society, These Tiny Grapes is an album of conflict and contrasts. “To this world, you are a weirdo; to me, you are perfectly normal,” sings Zuoxiao in the autobiographical ballad “Sorrow Boss.” With politics hovering between left and right, and themes stretching from romanticism to realism, These Tiny Grapes proves tricky to categorize.

songs as I spend so much time on Weibo,” he told NewsChina. “After listening to this album, people will see that surfing Weibo is part of my job.” Zuoxiao claims he never lacks inspiration.

First Crop

These Tiny Grapes is inspired by a lyrical poem entitled “Nai Nai Ge Tui” originally posted on Weibo by writer Li Chengpeng, criticizing government corruption. “Originally, he wanted me to sing this song. However, after reading the lyrics, my artistic instinct told me that it should be sung by children,” Zuoxiao told NewsChina. “I’ve been entertaining this idea for a decade.” Soon afterwards, he started collecting other lyrics and recruiting singers through Weibo. “Later, [celebrity blogger] Han Han, Zuoye Ben [pseudonym of a Weibo-based essayist] and others contributed their lyrics and edited others, including those written by me,” Zuoxiao told our reporter. He also collaborated with a few pop singers, including female soloist Zeng Yike, also known for her out-of-tune vocals, and Sitar Tan, an alternative pop singer. Zuoxiao even asked his five-year-old daughter Wu Duoman to sing “Nai Nai Ge Tui.” The album was mixed in Taipei, where Taiwanese pop singer and music producer Chen Sheng helped Zuoxiao find a group of local ethnic Paiwan children to sing the chorus. Since Weibo became an integral part of the Chinese life, Zuoxiao spends much of his time browsing the platform. “Many people have asked me how I have time to compose

Album cover art for These Tiny Grapes

“My job is surfing online and chatting with my friends and fans,” he said. “When I do this, I can produce albums whenever I want. In fact, I can produce an album right away or ask someone else to produce it for me. I’m not saying that I’m losing my drive, it’s just fun to have someone else produce work for me.”

Getting Close to Life

Since November 2012, Zuoxiao Zuzhou’s Weibo profile has been fronted by a post re-


ferring to the demolition of his family home. The song “Big Melon,” with lyrics by Zuoye Ben, is also about a forced demolition. His 2011 album Trip to the Temple Fair II also featured a song called “Nails” about the so-

called “nail houses,” buildings whose residents refused to make way for the wrecking ball, leaving individual structures protruding above a flat landscape, like nails. Unlike other Chinese artists, Zuoxiao Zuzhou doesn’t seek to curry favor with the authorities, seeing himself as a champion of free speech. “Just like you, I’m also a media body,” he jokingly told NewsChina, laughing. “Since 1998, my music has served as kind of a media outlet. While others are still writing lyrics, I am writing news.”


“I do not understand politics, but perhaps I have a political bent,” he continued. “I don’t know how to write commentaries on current affairs like Han Han, Li Chengpeng or Zuoye Ben. It is possible that [audiences] see me as a singer with strong political beliefs. But I’m just doing what I see as right.” Critics have claimed that Zuoxiao Zuzhou’s attempts to appear neutral are simply a marketing tactic. Many have called him “a genuine businessman and a fake artist.” Zuoxiao shrugs off such attacks. “I saw through the problem eight years ago: musicians have to reveal their true identity before the fans, the people who buy their albums,” he said. “Pretending to be free from worldly cares does not work in today’s market. A musician has to run his career like a business, which means selling as many records as possible. However, some hypocritical people come across as pretentiously pure and lofty. They believe that it is better for the rockers to appear in disguise, just as the rockers of the 1980s and 1990s chose to be wrapped in the cocoon of mystique.” “If you are heavily involved in marketing and with your fans, people label you a businessman,” he continued. In recent year, Zuoxiao Zuzhou has sold his albums through Taobao, China’s eBay equivalent. “I personally sign my name on every record to give them a unique feel,” he told our reporter, adding that this is so laborious he often ends up signing his name wrong.


Zuoxiao Zuzhou’s records have always sold at a premium. Copies of his 2008 double CD You Know Where the East Is sold for 500 yuan (US$80) apiece. His other albums, released in recent years, have sold for no less than 150 yuan (US$24). You Know Where the East Is was popular enough to secure the artist an offer of a contract with Universal, a contract he ultimately turned down, claim-

ing that “Universal was more interested in their profits than my work.” He later revealed that Universal wanted to cut the 100-minute double-disc to a 30-minute album. “If I signed the deal with Universal, my fans would never have been able to have the complete record,” he said. “When you reporters come into my office, I wouldn’t be able to give you my album as a gift. You also would have had to gain permission [from Universal] in order to interview me,” he said. “I’d rather follow my own whims. At least it prevents me from becoming vain and stops me from just drifting along.” Zuoxiao Zuzhou claims his commitment to independence has material benefits for his fans. “The price of my records has been stable over the years, whereas the price of discs by other independent musicians has risen to about 180 yuan (US$29) each,” he told NewsChina. “Basically, I have helped drive up the income of individuals involved in this industry; my success has showed other independent musicians that they could survive through effort.” Zuoxiao spent 14 months producing These Tiny Grapes. He admits that he is still concerned about the market: “I do hope people will like the album and buy it,” he said. With no small amount of hubris, however, Zuoxiao Zuzhou predicted that such tracks as “Tiny Incident” and “Black Cat, White Cat” (a reference to a quotation from Deng Xiaoping, featuring Zeng Yike); as well as “Nai Nai Ge Tui,” will be smash hits. He believes that “Their Chant,” written by Han Han, will perhaps be less well received, despite the celebrity status of its writer. “The lyrics of this song are rather obscure; it takes time for people to appreciate it,” he said. It is easy to see how such a track merited a place on this quirky, aggressively independent album by one of China’s most intriguing, if unorthodox, musical talents.




Come Out Swinging At the ripe old age of 31, China’s sports authorities have finally granted Zou Shiming, a two-time Olympic gold medal-winning boxer, the freedom to go professional By Sun Zhe


Photo by CFP


ooking at Zou Shiming’s resume, you might think he has very little business sense. The Chinese boxer’s amateur career record of two consecutive Olympic gold medals and three World Amateur Championship titles rivals those of legendary fighters from Cuba and communist Hungary who, like Zou, were also bound to their respective State sports authorities. After winning an amateur title, most boxers capitalize on the inevitable surge in attention from boxing promoters, and turn pro at the earliest opportunity. However, the conversion is a one-way street – professional boxers are banned from competing in amateur tournaments and the Olympic Games.

Zou Shiming (middle) at the signing ceremony with promoters from US pro boxing giant Top Rank, Beijing, January 23, 2013

This one-way rule cost Zou four of his prime competition years. Now 31 years

old, China’s sports authorities had kept him from leaving the State sports system behind and becoming a professional boxer until this January. Zou says he aims to win his first pro championship belt within two years, but he admits that his biggest weakness will be his age – few boxers begin a professional career so late.

Stuck in the system

Starting his amateur career at 15 years old, Zou quickly earned a reputation for blending kung-fu footwork into his boxing style. After he won China’s first Olympic boxing medal, a bronze, at the 2004 Athens Olympics, US professional boxing promoter Don King approached Zou with an offer, but went NEWSCHINA I May 2013

home empty-handed. Following his WAC championship victory in 2005, promoters turned up the heat, trying to lobby Zou into commercial fights. However, all suitors were turned away – the Chinese sports authorities were keen to delay the start of Zou’s professional career until he had won Olympic gold. For China’s State-trained athletes, Olympic gold medals are the sole criterion on which their career, and therefore the State’s investment in them, is judged. At Zou’s matches during the 2008 Beijing Olympics, Don King sat close to the ring and cheered for him. When Zou was victorious in the light-flyweight class, bringing home the country’s first ever Olympic boxing gold, he appeared to be on the cusp of his ascension NEWSCHINA I May 2013

into the big leagues. But at a celebration dinner following the Olympics, a top Chinese sports official expressed his “hope” (in other words, his decision) that Zou would remain an amateur and fight for the honor of his motherland at the 2012 London Olympics. He said that no other Chinese boxer was likely to win gold in London. “The gold medal at the 2008 Beijing Games was won in his own backyard,” said Cai Guoxiang, head of the sports bureau of Guizhou, Zou’s home province. “It will be a tougher test for him to win Olympic gold overseas,” he added, explaining his decision to keep Zou as an amateur for another four years. The sports official’s unilateral hope left Zou’s dreams in tatters. For top-level amateur boxers, the benefits of turning pro and earning millions of dollars for a prize fight in Las Vegas or Macau are obvious. In recent years, a number of top Cuban boxers have even defected to the US or Mexico in pursuit of the fame and fortune that commercial fights can bring. According to Forbes, Filipino light-middleweight boxer Manny Pacquiao, the top prizefighter with boxing agency Top Rank, earned US$67 million in 2012. Pacquiao pulled in US$30 million from his most recent fight alone. For Zou, the pain of being kept from pro fights was exacerbated by the fact that other top State-trained Chinese athletes, such as tennis player Li Na and basketball player Yao Ming, had been allowed to forge ahead with their own lucrative professional careers, while still representing China at the Olympics. However, Zou managed to defend his title in London last year, his final opportunity to do so – by the time the 2016 Rio de Janeiro Olympics roll around, Zou will be 35 years old, one year over the upper age limit of 34 for Olympic boxers.

Paid his dues

Soon after the London Olympics, Zou began contacting pro boxing agents. “I couldn’t afford to wait any longer. I’m already 31,” Zou told NewsChina. But, as a national sporting hero, he was

aware of the opposition he would be facing should he try to leave the State system behind and make his way into the brutal world of professional boxing. For his outstanding achievements, Zou, a member of the Communist Party of China, was made a delegate to the Party’s 18th National Congress in November last year, an accolade that only increased the pressure to stay in the domestic system. Boxing has a somewhat controversial history in China – a boxer was killed during a fight in 1953, and the sport was abolished altogether in 1958. The national boxing team ceased to exist until 1986, when sports officials decided they could no longer afford to disregard a sport that offers 11 gold medals in the Olympic Games. When it was settled that Zou would sign with Top Rank, he submitted his official resignation from amateur boxing to the sports bureau. However, some sports officials in Guizhou remained in opposition to Zou’s decision, arguing that he was the only athlete that the province could count on for a gold medal at China’s National Games held in September this year. “We wish that he could compete in one more national sports meet,” said Cai Guoxiang, chief of the Guizhou Provincial Sports Bureau. Cai admitted that Zou was eventually let go because letting him fight in the international boxing arena would be better for the image of Guizhou, his home province, than forcing him to compete for another gold medal at the National Games. The Guizhou sports authorities did not demand a share of Zou's future income from pro boxing matches, an unusual move for China's sports administrators. For Yao Ming, the former Houston Rockets center, a condition of his freedom to play in the NBA was that the Shanghai sports bureau would receive a US$10 million share in his yearly salary. Chinese tennis players who quit the State sport system, such as Li Na, are required to hand over around 10 percent of their prize money. However, Zou will likely still have to pay his Communist Party membership fee.


OUTSIDEIN perspectives from within China


A slogan reading “Long Live The Miners” in both Chinese and English greets visitors

City at the Coalface

The fortunes of Datong, once an opulent imperial capital, have long relied on its massive coal deposits, the largest in China. But while it attempts to dust the soot off its ancient city center, Datong is also turning its mining heritage into a fully-fledged tourist attraction By Lisa Gay


’m sitting in a narrow car shrouded in darkness, save for one small light hung around my neck. The steady clicking and thumping of our coal car as it groans down an abandoned mine shaft is admittedly unnerving—and as it’s a Chinese coal mine we happen to be exploring, our unease is probably understandable. I’m part of a tour group exploring Jinhuagong, China’s first tourist attraction that allows visitors access to a retired mine shaft. Jinhuagong is located in Datong, a sizeable city in northern Shanxi Province, with a long history of producing the black stuff that fuels the Chinese economy. Coal mining in the region dates back thousands of years, although obviously, they were only scratching the surface. An incredible number of coal reserves are dotted around the city


and its surrounds, producing over 38 million tons of coal in a typical year. While Datong long held the top spot for overall coal production in China, it has slipped to second place in recent times, and there are unreliable, though persistant, rumors that the coal will soon run out. Enter industrial tourism. Jinhuagong’s Coal Mine Park officially opened last September, but despite the recent influx of tourists, this is still a working mine. You can catch glimpses of miners, streaked head to toe with coal dust, taking breaks on the park grounds, although tourists won’t see any on their way down—for the safety of both groups, presumably. Visitors are brought to a locker room and asked to suit up in proper “working” attire. Basically, this involves stepping into heavy denim NEWSCHINA I May 2013

Getting There: Buses leave hourly from Liuliqiao Long-distance Bus Station in Beijing. The journey takes roughly five hours. There’s also daily and overnight trains from Beijing West and Beijing Station. The trains typically take five hours to reach Datong. There are also daily flights from Beijing and Shanghai to the Datong Airport.

Where to Stay: Yingbin Street probably has the widest range of lodging options, from

shiny new five-star hotels to more modest accommodation for the budget traveler. Try the Meigao Grand Hotel or the Weidu on the opposite corner for the ultimate in coal-fueled opulence, although there is also a branch of the Holiday Inn nearby as well. Another luxury option is the Yungang International Hotel, conveniently located in the center of the old city. Expect to pay around 350 yuan (US$56) for a room at one of the new luxury hotels and around 150 yuan (US$24) for humbler digs.

Photo by Lisa Gay

Photo by Lisa Gay

Photo by Lisa Gay

Attractions: Datong has a much-ignored history as the imperial capital of the Northern Wei Dynasty. The Yungang Grotto were com-

missioned by the emperors of this dynasty, and Buddhism flourished under their generous patronage. Shanhua Temple and Huayan Temple, both located in downtown Datong, are nearly 1000 years old and are rare examples of Liao-era architecture. Further south is the Hanging Temple, which appears to “hang” from a cliff and is a stunning example of ancient engineering.

overalls and attaching safety equipment, along with a single light for illumination within the tunnels. Leave your camera and phone behind, as they are considered fire hazards. Once you’re suited up, it’s time to squeeze yourself into a low-roofed mining car for a creakingly slow descent into the dark. Unexpectedly, the English explanations are quite good, although whether you’ll understand the complex functions of modern mining machinery is another thing. Nonetheless, the sheer scale of these machines is impressive – even when you realize they’ve displaced many a worker over the past few years. Keep watch for a collapsed tunnel within this mine, said to have been caused by an earthquake. Coal mine accidents like this are an allNEWSCHINA I May 2013



too-frequent occurrence in China, and down here in the tunnels, you are given a chance to understand how they occur. Miniature dioramas give a more vivid account than the technical explanations pinned on the rock, with tiny, horrified-looking figures escaping deluges, caveins, gas explosions and various other underground hazards. The cave tour wends through the history of coal mining in China, which is longer than you might think. Surface seams were exploited as early as the Han Dynasty (206 BC-208 AD) for use in the blast furnaces essential for forging iron. By the Song Dynasty (960-1279), better extraction techniques were developed. Bamboo pipes were erected inside tunnels to funnel poisonous gases above ground, enabling miners to dig ever deeper. Despite the boost in productivity, the life-sized mannequins that re-enact conditions in these ancient mines are chilling. Flaming oil lamps were placed on the head as a light source. Children were also an unfortunate source of labor for these ancient mines. Squirming through a reconstructed example of these uncomfortably narrow tunnels, little bigger than a crawl-space, you can imagine why. The roughly two-hour tour concludes in a “break room” where free tea is poured out to weary visitors. Sure, we might not have labored like actual miners, but it’s still an amusing way to wrap up the morning. Outside, visit the excellent coal mine museum (with serviceable English translations) and catch stunning views of the giant Buddha sitting calmly amid the tourist frenzy over at Yungang Grottoes, a World Heritage Site that’s shockingly close to this massive mine. The proximity of Jinhuagong to the 1500-year-old Yungang caves has had a ruinous effect on these evocative Buddhist carvings. Thick layers of coal dust used to cover many of the statues, with heavy coal trucks and trains rattling the site as they passed by just a few hundred meters away. Fortunately, the trucks have since been redirected and

the coal dust cleared away (the train, however, is still operational), but not before wreaking a considerable amount of damage on the statues. An even sadder aspect of Datong’s coal history is the Wan Ren Keng, or more horrifyingly, the Pit of Ten Thousand Corpses. Chinese laborers were lured to Datong by the occupying Japanese between 1937 to 1945 with promises of jobs, but instead found themselves practically enslaved. Forced to work under intolerable conditions and denied medical care when injured, the casualties among these laborers were appallingly high. Over 60,000 men, women and children lost their lives toiling in the mines to fuel the Japanese war machine. Their remains were unceremoniously tossed into mass graves, sometimes before they had even died. Only a few corpses were ever identified; most remained nameless victims. Twenty mass graves have been uncovered, with two open for viewing. Be warned – this is brutal stuff. While cavalcades of heavily laden coal trucks ply the highways around Datong, the city itself looks quite unlike a stereotypical industrial wasteland. New city walls encircle an old district that’s being given a facelift – albeit one that’s designed to make the city look older. While the downtown happens to contain a handful of truly atmospheric temples (some nearly 1000 years old), most of the buildings are obviously new and reminiscent of the Disney-style makeover of Beijing’s Qianmen District. Slowly, Datong is beginning to break out of the “coal country” mold. Yet coal remains a fact of life here in the city. There’s a bleak beauty in Datong’s industrial heritage, and the tour at Jinhuagong Mine captures only a part of it. The tinny scent of burning coal on a cold winter’s night, the shiny new lampposts fashioned to look like coal lamps of yore, and coal carvers whittling out placid-looking Buddhas are some other remaining traces of the heavy imprint that coal has left on the region.

real chinese



Fanqiang Jump the wall If you attempt to log on to Twitter or Facebook on the Chinese mainland without the luxury of a VPN, or you will find nothing but an error message. In China, using proxy servers or other software to bypass government firewalls is known as fanqiang, meaning to jump over a wall. The Chinese government operates the most sophisticated Internet censorship apparatus on the planet, effectively blocking foreign and domestic websites it doesn’t want its citizens visiting, from highly-charged political blogs criticizing the Chinese govern-


ment to less fiery but far more influential portals such as Twitter, Facebook, Youtube and the homepages of media organizations. However, the more censorship is tightened, the more the curiosity of ordinary Chinese netizens is stoked, with many developing a hunger for this forbidden fruit. A growing number of free web proxies, servers which allow users to conceal their IP addresses while surfing banned websites, are now easily available for download in China. With every new scandal covered up by State censors, more and more Chinese peo-

ple take to fanqiang-ing as a means to obtain information concealed on the mainstream Chinese Internet. More interestingly, at the end of 2012, people found even State news agency Xinhua had “jumped the wall” to open an official Twitter account, attracting 5,000 new unique visits to its website, and infuriating Chinese netizens. Many took to microblogs to ask Xinhua to reveal how it bypassed government Internet controls, so that they could follow the government news agency’s Twitter feed themselves. NEWSCHINA I May 2013

flavor of the month

A Return to Hunan By Stephy Chung


its tingly, numbing peppercorns, while Hunan dishes use fresh, unseeded chilies. Many of the dishes on the menu seemed to be veggie-based but flavored with bits of cured pork and beef. The “Hengdong-style Rice Bean Curd in a Paper Pot” was too curious to pass up. The paper pot was more of a small tin basket lined with wax paper – fixed on top of a tea light. The edible part consisted of deep-fried tofu skins wrapped around small squares of rice cake. Crispy on the outside and soft on the inside – the texture was incredibly satisfying, as were the spicy and salty flavors. The “Bean Sprouts Fried Crystal Powder” was rather misleading – no sprinkles of fairy dust, but rather the “crystal powder” was the Google Translate rendition of cellophane (“crystal”) noodles made of potato starch. The dish was very appetizing both to look at and to savor. The glass vermicelli was tossed with the perfect stir-fry of chilies, chopped garlic, chives, and crisp, perky bean sprouts. I really enjoyed the stickiness of the noodles – each pull seemed to trap just the right amount of ingredients. Most impressive was the “Green Beans in Casserole.” Again, I appreciated the simple, few ingredients used to create a dish. Crunchy French-cut green beans stewed in a piquant sauce made of finely sliced shallots, red and green chilies and smoked beef bits. The “Steamed Fish Head & Chili Sauce” was quickly chosen over the whole turtle, as to my mind it’s traitorous to eat former pets. Chinese love their fish heads - many think it’s the best part. The head of a freshwater carp is a standard in Hunan cuisine, so it’d be a shame to miss it. The meat around the cheeks and fin is especially tender, and the glazedover eyes and brain are supposedly quite nutritious. This beheaded beauty was heavily garnished with homemade spice – a peppery mix of pale yellow pickled radishes and chilies. Thin, cold wheat noodles served with the dish were a nice addition, as they sopped up the fish juices and light soupy sauce. Overall, the return to Hunan was quite pleasant. I was surprised at the variety of dishes and the unique flavors that set it apart from other regional Chinese cuisines. And despite being a little oily, it wasn’t too heavy. Though, as the dishes cooled, they became greasier and fattier tasting. The chilies had a softer, creeping sensation that I found to be quite enjoyable. But after the meal, I did notice that my stomach felt a bit uneasy. Something wasn’t sitting well. Maybe that’s something you get used to over time, but I took comfort from the fact that, in adulthood, nausea could be endured for the sake of nostalgia.  Courtesy of Stephy Chung


s a Chinese-American growing up in the Midwest, there were two weekly traditions that would really get me down. Chinese school – where I’d have to spend my precious Sundays reciting speeches in Mandarin and practicing calligraphy under the supervision of my friends’ parents – was the first. The second was Chinatown – a dreaded 30-minute car ride into Chicago that would ultimately swallow up an entire day as my eager dad would mull over which restaurant to patronize before loading up on fermented bean curd. His choice of eatery would inevitably lead to my least-favorite ritual of all – a visit to our area’s only “authentic” Chinese restaurant, the House of Hunan. My little sister and I would groan dramatically, “No! Not the House of Humans.” We really, really detested it. The food oozed with oil and we’d all go home with sick stomachs. For my parents though, it was still preferable to pizza. Now that I live in Beijing, I get their attitude. A taste of home, no matter how bad it is, goes a long way. I can now better appreciate my parents’ enthusiasm, standing in front of those sloppy wet markets in Chinatown. That’s the same excitement I feel when I near the canned soup aisle in an overpriced Western supermarket. Still, the “House of Hunan” left its indelible mark. As I was ticking off the regional cuisines I’d covered in previous columns, I realized, I had never once touched on Hunan. In fact, I had never once gone to a restaurant specializing in Hunan cuisine in China. I chose to break the decade-long hiatus at the adventurously-named Hunan restaurant, Yue Lu Mountain Dining. Disappointingly, the imagined painted goats and hilly landscape scenes were altogether absent. Instead, the interior was decently clean and entirely forgettable save for the purple cloth napkins. Hunan Province is located in the spicy south, and often elicits comparisons with Sichuan-style cooking. While both cuisines pack on the heat, the type of spice you’ll suffer is entirely different – Sichuan fare is notorious for



Crusading, Crushed Commuters Growing up in a first world country, I have often taken for granted the ideals of modernization and development. Perhaps it’s a mode of thinking that has spread throughout China as well. The news that new subway lines would open in Beijing sooner than expected to ease congestion was hailed as prudent policy. In my head, the argument ended there. More public transportation was a good thing. I wasn’t there to witness the sacrifices that came with development in my hometown. Tract homes and freeways were always a part of Southern California when growing up. I never once pondered what kind of heartbreak local citizens went through when they were forcibly removed to clear room for the 1-5 freeway or the LA Aqueduct. Beijing opened a new subway line and a few line extensions just before Chinese New Year, pushing the capital’s network ahead of Shanghai’s to become the longest subway in the world at 442 km. By 2020, the city is expected to have roughly 1,050 km of track, more than three times the length of the New York City subway. This rapid development is emblematic of China’s modernization – and officials are not shy about promoting it as such. One simply needs to look at a city’s subway map to chart its growth. Beijing’s Line 10 Shuangjing station is conveniently located near to my apartment, so I saw the buildup to the expansion, along with a steady rise in local house prices, months in advance of the grand opening. One Thursday, when returning to work after the winter holiday, I was met with a grim situation. The usually quiet Shuangjing station had become a commuter apocalypse. In the past, catching the train at Shuangjing required little effort and barely any queuing, even during Beijing’s notoriously congested rush hour. That day it took me half an hour – five or six trains went by – before I could even board a train. Lines stretched across the platform to the opposite side, dissolving into a mass of disgruntled commuters. The reason for this sudden explosion in passenger numbers is that Line 10 now connects with Beijing’s southern suburbs, which previously were


Illustration by Xiang Zhaohui

By Michael Thai

Rather than bask in their technical achievement, Beijing’s city planners had to face the sting of public criticism. cut off from the subway network. Millions live in apartments in this area, most of them several miles from the city center, the only area of the city where the average wage-earning couple can afford a home. Now, those millions share in my commute. An extra 30 minutes added to your morning subway journey is unpleasant enough, but when you add the fighting to fit inside a speeding sardine can full of sweating office workers, laborers and other disgruntled riders, it becomes nearly unbearable. This new reality was especially galling to those who had been told a new subway extension would ease congestion. But none of us had an alternative – taxis are never available during rush hours, buses remain gridlocked and overcrowded, and as for owning a car – the license plate lottery gives you a one-in–40 chance of securing a license plate each month, with most waiting in vain. All one can do is grit one’s teeth. After I arrived at work, grimy and weary, I logged onto Weibo, China’s Twitter, which was abuzz the entire day. One user went so far as to post: “Seeing what happened in Shuangjing this

morning has forced me to consider leaving Beijing. I can’t get a license plate number to buy a car; I can’t even cram into the subway. Is it that they want to hound us suffering and oppressed office workers to a bitter death?” Rather than bask in their technical achievement, Beijing’s city planners had to face the sting of public criticism. The new lines have indeed made life more convenient for many people, but for others, it has made life in this already overcrowded metropolis just a little less bearable. To what end can Beijing continue to keep building downwards (or upwards) to solve basic housing and public transportation issues? Bigger, richer, taller and longer may not necessarily be recipes for success. Beijing already strictly limits the number of days individuals can drive, not to mention who can own a car, home or business. What happens if, one day, China must limit the days people can fly? The airports are already groaning at the seams during holidays. Perhaps more effort will have to be expended in managing expectations, rather than trumpeting successes. Encouragingly, there seems to be some acknowledgement of the problem. The following day, when I arrived early to avoid the morning rush, I noticed a young attendant in a fluorescent bib attempting to maintain order. “Line up! Let the passengers off first, then get on!” he yelled over the din. I was impressed with his persistence. Indeed, all we can do is be cordial and bear these growing pains together. If and when China’s adolescence ends, at least those of us here to witness it can share in the bonds forged by having gone through such a milestone together. Perhaps, in addition to development, Chinese citizens may wish to turn to introspection to better understand what the Chinese dream can realistically offer them. It may not be possible for every Chinese person to live like an American. A car in every garage sounds less appealing when there are 1.3bn vehicles polluting the air, but perhaps China will be the nation that finally makes car pooling the norm. NEWSCHINA I May 2013

Pie, Claudius Is there anything more delightful than pie? The answer to that question is, duh, of course. Life has an infinite number of things that can bring more happiness than, say, a gooey, buttery pecan pie or a decadent key lime pie topped with cloud-like spoonfuls of whipped cream. But there’s something particularly satisfying to me about baking, which in my mind is always associated with lazy afternoons where the most pressing task I have before me is deciding which apron I want to wear. During the past decade that I lived in New York City, when it felt like my life was consumed by my work, I treasured those afternoons – the special playlist (heavy with Ryan Adams) that I’d only play on those days; the ritual gathering and arrangement of flour, butter, eggs, salt and sugar on my kitchen countertop; dusting my hands with a light coating of flour and kneading dough; watching a cake softly and slowly rising in the oven, and knowing that the worst thing that could happen if I screwed up was that my dog would have a feast that evening. I’m a little ashamed to admit that, over the years, much of my identity and my ego has been built around my reputation as a baker of delicious little things. I often think that if baking were a religion and Martha Stewart my messiah, I would be the Paul to her Jesus, spreading the gospel of crumbly pâte brisée throughout the Crisco-eating world. What I love about baking is that you don’t actually need any inherent talent to be a good baker. All you need is a tried-and-true recipe, the right ingredients and tools, and a somewhat anal retentive nature. That’s it. There’s no magic to it at all – it’s just basic science. Essentially, I take a lot of pride in doing something that requires absolutely no skill. This is the quicksand upon which my little shack of an ego is built. It’s like complimenting your friend’s baby on their ability to crawl, or being impressed by a politician’s lack of exNEWSCHINA I May 2013

Illustration by Xiang Zhaohui

By Esther Wang

This is the quicksand upon which my little shack of an ego is built.

tramarital affairs – the bar is set rather low. And yet, your ego is your own, after all, no matter how flimsy it may be, and it’s a bit painful when bruised. I was reminded of this when I attempted to bake a pie in Beijing, and to say it was a complete disaster is a bit of an understatement and an insult to disasters everywhere. In December of last year, I quit my job of four years, sublet my Brooklyn apartment, found a temporary home for my dog Hugo, and came to China with no real plan except to eat massive amounts of street food. When I packed up all the worldly belongings I thought I would need to live in China for six months, I somehow neglected to bring

my pie pan (I did, however, bring four binder clips, three bars of soap, and my bathrobe). That is a decision that I now bitterly regret. A week after I arrived in Beijing, my roommate invited me to a potluck dinner party at the home of her friends. Wanting to impress people with my cooking, I had, perhaps, too overconfidently, promised to bring a banana cream pie. This is a pie that I've made countless times back home – much like my Kitchenaid standing mixer, it's never let me down, and has always been delicious. You may reasonably ask, did I consider the fact that I was in Beijing, a worldly city to be sure, but one where heavy cream, good butter and pie pans are not in ready supply? Did I ask myself how I would bake using the countertop oven, what is essentially a glorified, oversized toaster? Did I consider, even for a moment, how I would follow a recipe without the use of measuring cups or spoons, all while having to convert from ounces to grams? I did, actually. And I naively believed everything would be fine. Some things, though, are not only lost in translation – they become mangled and disfigured beyond recognition. And as they say, pride definitely cometh before a fall. I won’t go into too much detail, but I will tell you that not even the use of non-GMO corn starch or artificial whipped cream from a can (a last-minute move made out of desperation) could save me from a simultaneously dry yet overly buttery crust and a burnt, oversalted banana filling. At the dinner party, one woman took a bite and kindly told me, “Well, you can definitely tell there’s banana in it.” And I thought to myself, now I know how Napoleon felt after his misguided invasion of Russia – cold, acutely aware of his blunder, and filled with a foreboding that perhaps there would not be a chance to redeem himself in the future. I’m still waiting for a second invite.


Cultural listings Cinema

The Powerless Example According to Chairman Mao, “the power of examples is unlimited.” The Great Helmsman’s icon of choice was a PLA soldier called Lei Feng, posthumously turned into a household name in China through a series of propaganda campaigns extolling his kindness, sense of social responsibility and loyalty to the Party. According to official biographers, Lei was killed during a traffic accident at age 22, and his purported diaries, filled with praise for the Party and Chairman Mao, were discovered shortly after his death. In 1963, one year after Lei’s death, Mao penned a piece of calligraphy calling on the nation to “learn from Lei Feng.” Since then, Lei has been resurrected many times as a model citizen, most recently during this year’s leadership transition and on Learn from Lei Feng Day, celebrated on March 5th. However, there are signs that the shine has rubbed off this icon of a bygone era, with a recent Xinhua survey showing that 68 percent of respondents had never read a Lei Feng diary. This year, a trilogy of new movies about Lei Feng – Young Lei Feng, The Sweet Smile and Lei Feng in 1959 – released to coincide with this year’s sessions of the National People’s Congress, were all box office flops despite widespread promotion. Young Lei Feng was even pulled from Nanjing theaters after failing to sell a single ticket. Douban. com, one of the biggest cultural portals and film review aggregators in China, gave the film 2.3 to 2.4 out of 10, making it one of the worst-reviewed movies of the year.



Back to the Stage

Love Letters from Zhu Shenghao By Zhu Shenghao and Song Qingru

While The Voice of China in 2012 proved the TV reality talent show format as workable in China as anywhere, this year another format – the celebrity reality talent show – has splashed down. I am a Singer, a program introduced by popular cable channel Hunan TV, has been inviting established singers to compete with each other in front of a panel of celebrity judges. The show quickly triumphed in the ratings war, securing viewership from all demographics with the judicious use of both currently popular stars and “forgotten divas” from the past. So far, more than 10 episodes of the show have been broadcast, and as rivalries heat up between the competitors I am a Singer looks set to become a regular fixture in the schedules.


Long-lasting Fragrance In 2011, a widely known but “lost” oil painting titled Halfnaked Woman by Li Shutong was rediscovered in the collection chamber of the CAFA Art Museum. The discovery was seen as a major event for China’s art scene as Li is viewed as a major inspiration for modern Chinese music, painting, calligraphy, poetry and drama. Born in 1880, Li was one of the earliest pioneers of Western oil painting and stage drama in China, and is widely credited as the man who introduced Western music to the country. In his later years, Li was ordained as a monk and studied Buddhism for the rest of his life. The recent exhibition, entitled Long-lasting Fragrance: Study of Li Shutong’s Oil Painting, was held at the CAFA Art Museum in Beijing from early March to late April. The exhibition reviewed Li’s life and works, and attracted a great number of visitors as Li’s works are rarely exhibited on such a large scale.


Born in 1912, Zhu Shenghao died at the age of 32, by which time he had finished translating 31 of William Shakespeare’s plays. Not only were his translations among the earliest Shakespeare published in the Chinese language, they remain popular today, as do Zhu’s poems and essays, although much of his elegant and accomplished work was lost during the Anti-Japanese War. The recently released Love Letters from Zhu Shenghao assembles more than 300 letters exchanged between Zhu and his wife Song Qingru, an excellent poet in her own right and the most important supporter of Zhu’s translations of Shakespeare. These letters create an emotional window into the deep and romantic love between Zhu and Song, as well as their ideas and dreams for the future. NEWSCHINA I May 2013




It is time to return the power of taxation to the people After almost three decades of taxation through executive decrees, it is time to return the power of taxation to the National People’s Congress By Tang Gongliang


uring the annual session of the National People’s Con- advocated by China’s new leadership. The time has come to make gress (NPC) in March, the most influential proposal a strategic adjustment. made by an individual delegate was likely that of Zhao First of all, China should establish the principle of statutory Dongling, a renowned screenwriter taxation, to allow society to parwho proposed that China should esticipate in the decision-making The tax agencies have a free hand to tablish a statutory taxation principle process, promoting its legitimacy. and return the power of taxation to In the long run, the NPC should decide how much tax is collected and the NPC. gradually retract the authorization in what ways, and this inevitably leads China’s current taxation system it has granted to the State Council, to crippling taxation was established after the policy of Reand such authorization should be form and Opening-up was launched outlawed in the future. The State in late 1978. In 1984 and 1985, the Council should ask the NPC to NPC authorized the State Counreview existing taxes based on adcil exclusive power to legislate on taxation. Since then, the State ministrative regulations, and make relevant legislation. Council has launched a series of decrees and regulations, which Currently, China is experimenting with various tax reforms. The have formed China’s current taxation system. Among 18 types of most controversial of these is the property tax, currently confined taxes, only 3 are authorized by legislation, and the rest enacted by to Shanghai and Chongqing, where only newly acquired properties executive stipulations, many of which claim to be “provisional” and are subject to taxation. It is expected that when the tax is rolled “interim” but have been in effect for decades. out nationwide, local governments will be authorized by the State While the flexibility of this arrangement was somewhat useful as Council to work out the details in their cities. Such a re-authorizaChina moved away from a rigid planned economy, three decades of tion would actually violate existing legislation passed in 2000. economic development have made it obsolete. With more than 10 Another high-profile tax reform is the replacement of the busitrillion yuan ($US1.6tn) collected in taxes each year, the dark side ness tax, a crude levy imposed on the value of a firm’s sales, with valof the system has become increasingly obvious. The tax agencies ue added tax in various services. The reform, designed to reduce the have a free hand to decide how much tax is collected and in what tax burden on enterprises, has been widely welcomed. In expanding ways. This inevitably leads to crippling taxation, taking a heavy toll the reform, the government should not only consider the individual on the economy. In addition, the concentration of the power of tax, but incorporate it into an overall strategy to transform the basic taxation in the hands of the central government also leads to a un- structure and nature of China’s taxation system. balanced distribution of tax revenue between the central and local governments. (The author is a professor and director of the School of Taxation of the Such a system also runs counter to the rule of law, which has been Central University of Finance and Economics)







May 2013  
May 2013  

May 2013 Issue