Posts tagged ‘Hong Kong’

Friday, April 8, 2016

The Panama Papers: Invested, but not Koppied

You needn’t be there yourself, but should your money? Those places are beginning to look like those parties you simply have to get an invitation to, if you want to matter: the “havens” where (many of) the rich and beautiful put their money. The Virgin Islands, for example. Or Panama. Or Luxemburg? Not sure. Ask a bank.

Reportedly, some members of Vladimir Putin‘s tight-knit inner circle do it. Reportedly, Hong Kong movie star Jackie Chan (成龍) does it. So do Thais. Lots of Indians, too. And maybe many Americans, but elsewhere.

Others, also reportedly, did so in the past. One of them even says that he lost money in the game.

But not so fast. Media tend to scandalize everything, don’t they?

According to ICIJ, the documents make public the offshore accounts of 140 politicians and public officials. The documents don’t necessarily detail anything illegal, but they do shine a light on the shadowy world of offshore finances,

National Public Radio (NPR) informs its listeners.

So, let’s not jump to conclusions. The problem, either way, is that the investors’ countries’ governments can’t get a picture of what is there. And once an investor is found on a list like the “Panama Papers”, with investments or activities formerly unknown to his country’s fiscal authorities (and/or the public), he’s got something to explain.

Like Argentine president Mauricio Macri, for example.

So, it’s beautiful to have some money there.

Unless the public begins to continuously ask questions about it.

Timely Exits from Paradise

If British prime minister David Cameron is right, the money he and his wife earned from an offshore trust were taxed. His problem, then, would be the general suspicon of the business.

The Cameron couple reportedly sold their shares in question in 2010, the year he became prime minister.

“Best Effect” and “Wealth Ming” reportedly ceased operations in 2012 and/or 2013. That was when CCP secretary general and state chairman Xi Jinping took his top positions. The two companies had been run in the Virgin Islands, and Deng Jiagui (邓家贵), husband to Xi’s older sister, had been the owner, Singaporean paper Zaobao reported on Tuesday.

And then, there’s Tsai Ying-yang (蔡瀛陽), one of the 16,785 Taiwanese Mossack Fonseca customers, the law firm the “Panama Papers” were leaked from. According to his lawyer, Lien Yuen-lung (連元龍), Tsay Ying-yang terminated his Koppie Limited company as soon as in 2009, the year following its establishment, so as to cut the losses – 30 percent of the investment, according to a phone interview Lien gave Reuters, as quoted by the Straits Times.

Tsai Ing-wen hasn’t commented herself, and maybe, she won’t any time soon. It doesn’t seem that too much pressure has mounted so far. But questions are asked all the same. On Wednesday, KMT legislators William Tseng (曾銘宗), Johnny Chiang (江啟臣), and Lee Yan-hsiu (李彥秀) told a press conference that in the “many cases” where the Tsai family had encountered controversy, Tsai Ying-yangs name had emerged, and this “gave cause for doubts” (會起人疑竇).

An Emerging KMT Opposition Pattern

William Tseng may become a regular questioner, concerning the financial affairs of Tsai’s family people. One of the “controversies” he had quoted had been the issue of a press conference on March 24. There, with different KMT colleagues,  but the same kind of artwork on the wall behind the panel, showing the suspect of the day, Tseng dealt with the issue of Academica Sinica president Wong Chi-huey‘s daughter’s role as a shareholder of OBI Pharma Inc..

KMT legislators press conference artwork

KMT representations:
Mind the guys in the background

One of his fellow legislators, Alicia Wang (王育敏), raised the issue of the company’s shareholder structure (and neatly placed Tsai’s brother there, too, maybe just to make his name available for quote by Tseng on other occasions:

“President-elect Tsai Ing-wen’s (蔡英文) brother and sister-in-law are also shareholders, and so is Wong’s daughter, Wong Yu-shioh (翁郁秀). Are others involved?”

Diplomatic Relations, but no Tax Treaty

The “Panama Papers”, as far as they concern Taiwanese customers, contain not only individuals, but companies, too: Taiwan Semiconductor Manufacturing (founding chairman Morris Chang, who served Taiwan as APEC representative in 2006), TransAsia Airways (more recently in the news for the tragic Flight 235 crash), Yang Ming Marine Transport Corporation, Wei Chuan Food Corporation (in the news since 2013), and the Executive Yuan’s National Development Fund.

The Development Fund was not a taxable organization, Taiwan’s foreign broadcaster Radio Taiwan International (RTI) quotes finance minister Chang Sheng-ford. He used the example to make the point that to suggest that some 16,000 keyword search results for Taiwan in the “Panama Papers” did not signify 16,000 cases of tax evasion. That’s just not the way to look at it.

Chang reportedly also said that while, “if necessary”, Taiwan would establish a Panama Papers working group and start investigating the most high risk people and agencies for tax evasion, the country had no tax treaty with Panama. Also, a Taiwanese anti-tax evasion law had not yet been passed.



The Panama Papers
Achselzucken schadet, Der Freitag, Apr 7, 2016
The Panama Papers, FoarP, Apr 6, 2016


Friday, January 8, 2016

Human Rights and Economic Records: Botched Measures and Terrible Occurrences

Before the old (lunar) year leaves and a new comes in, things need to be tidied up in China. However, efforts to calm the stock markets by new management measures appear to have been unsuccessful. And in Hong Kong, where RMB trading, is unrestricted, people pay less for China’s currency, according to the New York Times.

There’s still other bad news, and the indicator in this case, too, is Hong Kong.

“Something terrible has happened. We are all afraid. We are leaving now,” an employee told me a few hours before locking the doors for the foreseeable future.

That’s how the BBC‘s correspondent in the former British colony, Juliana Liu, concluded an entry in the broadcaster’s China blog on Monday, and the topic, of course, is the case of five Hong Kong citizens, all associated with the Causeway Bay Bookstore, who have gone missing since October last year. The latest case is Paul Lee, and he went missing late in December.

Hong Kong’s SCMP, one of East Asia’s leading English-language papers, but one with an uncertain future, reported on Monday the first precept speech by a Chinese leader since Mao Zedong. The guy who’s imitating the late great dictator is, of course, current party secretary general, state chairman, and the central military commissions’ (CMC) chairman Xi Jinping. The speech is seen as part of Xi’s efforts to reform China’s military, but obviously, the – probably intended – signal goes beyond the armed forces project.

Given that no other former CMC chairman, from Deng Xiaoping to Hu Jintao, had given a military precept, an associate professor at Shanghai University of Political Science and Law concludes that Xi’s power and authority is even higher than them.

This may or may not be true. If  Wang Qishan, rather than Li Keqiang, ranks second in terms of power or influence within the party, the assessement may be correct. But then, maybe Deng Xiaoping, who faced open ideological competition at times by more conservative party veterans like Chen Yun, simply didn’t need to show off his autority by admonishing the military.

Back then, too, the party was corrupted. But that was at a time when – or that’s how it felt, anyway – everyone had a chance to become rich. Now, there’s a two-fold challenge of corruption and slowing growth.

This could mean that Xi has powers because potential rivals do not want to challenge him, so as not to rock the not-so-stable boat.

If China’s regime manages the switch from an export-led economy to a more services-oriented economy successfully, the doubts in Beijing’s macro-economic control of the economy won’t persist – some disappeared people, in China or elsewhere, have never been a great concern to business.

All the Xidadamania aside however, confidence in mainland China, in Hong Kong, and abroad, appears to be slipping, at least currently.

In an interview with German national radio on Thursday, Markus Taube, a professor at a university in Germany’s Ruhr region, stated “a massive loss of confidence” in China:

What we see in China at the moment, definitely, is a massive loss of confidence. All market actors can see that the CCP has clearly lost its former control capacity. Until now, the Chinese market was always a very [unreadable] […]. Now, this ability to lead isn’t in place and that the state has failed several times, on its own promises.

Das, was wir in China momentan definitiv sehen ist ein massiver Vertrauensverlust. Alle Marktakteure sehen, dass die Kommunistische Partei offensichtlich ihre frühere Steuerungskapazität verloren hat. Bislang war der chinesische Markt immer ein sehr [unreadable] … Fundamentaldaten haben da kaum eine Rolle gespielt, und es war das Vertrauen einfach da, dass die Partei, der Staat, im Endeffekt die Richtung vorgibt [unreadable]. Jetzt ist es so, dass diese Führungsfunktion fehlt und dass der Staat mehrfach versagt hat, auf seine eigenen Versprechen hin.

Not least, Taube said, the “anti-corruption campaign” has discouraged Chinese decisionmakers in charge of approving (or delaying) investment projects.

Given that Chinese control mechanisms – concerning the financial markets – are out of order, Taube, with an audible sigh, introduces an old friend from the 2009 tool cabinet:

It sounds unorthodox, but probably, in the current situation, it would be more appropriate to issue another stimulus package, in that the state, again, to a great extent, pumps money into the economy. A classical Keynesian stimulus package to create state-induced demand so as to restore the economic dynamics on a basic level.

Es klingt sehr unorthodox, aber wahrscheinlich ist es in der momentanen Situation tatsächlich eher angesagt, ein klassisches Konjunkturpaket wieder aufzusetzen, einen Stimulus, in dem der Staat einfach in großem Maße wieder Geld in die Volkswirtschaft hineinpumpt. Also ein klassisches keynesianisches Konjunkturprogramm, in dem einfach staatlich induziert Nachfrage geschaffen wird, und damit einfach die volkswirtschaftliche Dynamik auf einem grundlegenden Level wieder stabilisiert wird.

That said, Taube doesn’t judge the situation by standards of five-year plans, or by taking the long view, as recommended by the Lord of the Confucius Institutes. Taube advocates a stimulus because the methods tried more recently haven’t worked and wouldn’t turn the tide for the coming six months.



» Executives Disappearing, HP, Jan 8, 2016


Wednesday, November 18, 2015

CRI’s “Journalism” Talent Show: no Belief in Facts

The innovation experience described at the lianghui seminar in March 2014 wasn’t exactly new: one of the borrowed-boat reporters mentioned on the seminar by China Radio International‘s (CRI) Zhang Hui, “Andrea Yu”, apparently had an earlier appearance at a CCP-conducted press conference, in November 2012, on the last day of the 18th National Congress. A Guardian article published online on November 14, 2012, contains a link to a soundfile where an Australian Broadcasting Corporation (ABC) correspondent interviewed Yu.

Sina, apparently quoting or republishing a post from the Chinese Herald (澳洲日报) from March 2014, i. e. also from the 2014 two-sessions season, listed a question from “Louise”, also from CAMG, who asked a question to Zhou Xiaochuan (周小川), governor of China’s central bank.

A foreign correspondent apparently lost patience with the silly theater, and shouted: “Give foreign journalists a chance” (给外国媒体一个机会!)  As he was allowed to ask his question, he hastened to make it clear that he was a real foreign journalist. (Which is confirmed by the article.)

The Sina-published article also mentioned a sham reporter from a Hong Kong TV station, but of course, opportunities to speculate become endless under circumstances like these.

Maybe it’s just China Radio International’s talent show. Journalism it is not. But if you have little else to show for, cynicism may be the attitude of choice – and even a mould for “innovative” propaganda.

It’s not necessarily limited to China. According to the Kyiv Post in September this year, Ukraine-born journalist Peter Pomerantsev described the Kremlin’s propaganda as a truthless narrative:

“The Kremlin narrative,” he says, “now is that ‘there is no truth out there, and you’ll never find it; but go with us because our emotional content is more vital.” That promotes cynicism and “cynicism breaks down critical thinking” because at its root “is something quite medieval and emotional – a world of myths and storytelling.”

“When you don’t believe in facts,” Pomerantsev concludes, “you are just left with that.”


Friday, October 2, 2015

Leadership Styles: No Meeting without Substance

The Taipei Times compared Pope Francis‘ and Xi Jinping‘s leadership styles: the Chinese traveller to America was outwardly strong and internally weak, while the Roman-Argentinian was the exact opposite, the paper wrote in an online article on Tuesday. As a man who kept close to the public, was met with large crowds of people wherever he went and held Mass for almost 1 million people, the Pope had been a perfect example of soft power.

That was a bit like lauding a model mineworker for churning out tons of coal every day, and criticizing a goldsmith for not doing likewise – or vice versa.

Soft power abroad? Quite a number of Chinese people – especially Chinese people with some exposure to foreign cultures and hurt feelings – may long for it, and the Economist logically threatened Xi with something worse than criticism: neglect. But the politburo could care less. As long as the results are satisfactory – and as long as people at home can be made believe that Americans (not just at Boeing) could hardly wait for the Chinese visitor, everything is staying the desirable course.

But what are the results?

The two sides reached broad consensus and achieved a number of positive results, Ta Kung Pao (Hong Kong) wrote on Sunday:

According to a list published by the Chinese ministry of commerce on September 26, the major consensus and results reached by the two sides can be counted as 49 points, fitting into five big categories. Obama, on his own initiative, reiterated that America maintained the one-China principle and did not support “Taiwan independence”, “Tibet independence”, “Xinjiang independence”, and that America would not get involved in Hong Kong affairs.*)


According to Xinhua reports, Xi Jinping made important suggestions concerning the next stage of Sino-American relations, emphasizing the need to promote Sino-American relations that would always develop along the correct track. The two sides agreed to continue efforts to build Sino-American great-power relations of a new type. He [Xi] also emphasized that the Chinese nation was highly sensitive about matters concerning China’s sovereignty and territorial integrity. He hoped that America would scrupulously abide by the relevant promises, not to support any action aimed at harming China’s unity and stability.


In this regard, Obama, on his own initiative, reiterated that America maintained the one-China principle, scrupulously abided by the principles of the three Sino-US Joint Communiqués, and that this position would not change. America did not support “Taiwan independence”, “Tibetan independence”, and “Xinjiang independence”, and would not get involved in Hong Kong affairs. This is the second time after denying American connection to Hong Kong’s “Occupy Central”, during the APEC summit last year, that Obama stated his position.*)


The 49 projects, results and consensus concern the five great fields of Sino-American great-power relations of a new type, practical bilateral cooperation, Asia-Pacific affairs, international affairs, and global challenges. Among these, nearly twenty negotiation points pertaining to financial and trade cooperation and the Sino-American Bilateral Investment Treaty (BIT), awaited by all circles, have made progress. The information published by the Chinese ministry of information pointed out that both the Chinese and American leader had reiterated that to reach a high-level investment agreement was “the most important economic issue between the two countries”, and that both sides had agreed to strongly push the negotiations and to accelerate the work.


The Chinese achievement list unequivocally mentions: “The two countries’ leaders reiterate that to reach a high-level investment agreement is “the most important economic issue between the two countries”, and both sides agree to “strongly push the negotiations and to accelerate the work, so as to reach a mutually beneficial, double-win, high-level investment agreement”.


China Institute of International Studies researcher Yang Xiyu says that this position [held by] the two heads of state was of historical significance, meaning that the world’s biggest developed and the world’s biggest developing country could, as fast as possible, achieve BIT, and that the world’s two biggest economic entities achieving BIT will raise the long-awaited effects, further solidifying the foundations of mutual trust in trade.



Within the list of achievements, several points of consensus have been reached concerning Sino-American network security cooperation, such as China and America agreeing that each country’s government must not engage in, or knowingly support, the stealing of intellectual property rights, including trade secrets, and other classified trade information. China and America committed themselves to jointly define and promote appropriate standards of international society conduct on the internet, and to establish a high-level, joint dialogue system between the two countries, to strike at cyber crime and related issues. A number of American experts said that this was an important outcome of this [Xi] visit, and that strengthening cooperation about network security was a really important field of work in Sino-American relations. Indiana University professor and high-level Council of Foreign Relations network security researcher David P. Fidler believes that the two countries’ having achieved this consensus is “of major significance, and welcome news”.


The two sides will also strengthen anti-corruption cooperation, strengthen high-speed rail cooperation, strengthen cultural exchange cooperation, and reach consensus in reaction to global challenges, broaden practical cooperation on bilateral, regional and global levels, and manage and control differences and sensitive issues in a constructive manner, continuously achieving new positive results.


A benevolent label for these outcomes could be progress, and an accurate one would be unverifiable progress. It’s sort of obvious that Washington and Beijing wouldn’t issue a snafu statement at the end of the talks. What Beijing might consider a real achievement, however, is the prevention of an exchange of sanctions in the wake of the “network security”, i. e. hack-and-spy, controversies. That doesn’t go without saying – news coverage during late summer pointed to a chance that this could happen.

Hong Kong website Fenghuang (or Ifeng), in an article on September 22, attributed much of the success in defusing the conflicts to a visit by a delegation to Washington from September 9 to 12:

China attaches great importance to Sino-American relations and their future development, and does not ignore the concrete problems that occupy America.


From September 9 – 12, politburo member and the central committee’s political and judicial committee secretary Meng Jianfu visited America in his capacity as Xi Jinping’s special envoy, together with [a delegation of] responsibles at offices for public security, the judiciary, network communication, etc.. He had talks with secretary of state John Kerry, homeland security secretary Jeh Johnson, national security adviser Susan Rice, and other central [US] authorities, to exchange views about cyber crime and other outstanding problems, and to achieve important consensus. Meng Jianzhu’s trip broke with old habits. Under Xi Jinping’s leadership, China’s diplomacy has become more direct and more practical.

9月9日至12日,中共中央政治局委员、中央政法委书记孟建柱以 习近平特使身份,率公安、安全、司法、网信等部门有关负责人访问美国,同美国国务卿克里、国土安全部部长约翰逊、总统国家安全事务助理赖斯等核心部门举行 会谈,就共同打击网络犯罪等突出问题深入交换意见,达成重要共识。中央政法委书记作为特使,打破以往惯例,习近平治下的中国外交更加直接务实。

That, and some more soothing soundbytes from Beijing, appeared to have had their effect on Washington, suggests Fenghuang:

On September 16, Obama made remarks about cyber security again, but according to Reuters, America will not impose sanctions on so-called “cyber attacks” before Xi Jinping’s visit, and maybe not afterwards either.


After all, the main goal of the Obama administration had been to put pressure on Beijing, and to address domestic complaints, the Fenghuang article believed.

What looks credible – because it’s said to be long-established practice anyway – is that whatever consensus was indeed there between Washington and Beijing had been reached before Xi Jinping even set foot on American soil.

When he reached the American West Coast from Beijing, he meant business, not soft power – although there’s probably something charming to a 300-aircraft order form, at least among the stakeholders. The traditional microcosms were also conscientiously cultivated, even if Winston Ross of Newsweek was not convinced:

[Xi Jinping’s] handlers, who had corralled me and the reporters from the Associated Press, Bloomberg and the Los Angeles Times for the previous hour in anticipation of this exchange, apparently assumed we all spoke Mandarin. The Times reporter shot me a bewildered look. I shrugged. Xi said something to Oregon Governor Kate Brown that she found hilarious. We asked for a transcript of his remarks. We were not given one.

That occasion, Xi’s first stop – i. e. the meeting with American governors and Chinese provincial governors -, wasn’t (much) about substance, Ross alleged. He could have known better, even without translation: maintaining contacts between many layers of business and politics – not just the top echelons – is both a Chinese move to keep contacts going even if top-level relations between China and another country should deteriorate. Besides, while Confucius Institutes and other means of  indoctrination soft power may face some scrutiny at federal or central governments of democratic countries, regional authorities may lack the resources that such scrutiny would require.

Chinese central leaders waste no time with unsubstantial meetings. They waste no time with soft-power ambitions either. It’s the technology, stupid.



*) VoA has a somewhat different take on this: according to their newsarticle on Wednesday, Obama referred to both the Three Joint Communiqués, and the Taiwan Relations Act, and that had been the only public remarks made about Taiwan during Xi’s state visit in Washington. Ta Kung Pao omitted the mention of the TRA.



» Joint Press Conference, White House, Sept 25, 2015
» Six-point proposal, Xinhua, Sept 25, 2015


Sunday, September 13, 2015

Weekend Links: O2O Business in China

Warning: JR is trying to explain the economy to himself. His word pool and previous knowledge about this topic are shaky, and the following may or may not make sense – you’ll have only have yourselves to blame if you base your homework (or investment decisions) on this post.

Going “Brick-and-Mortar”

Let’s get industrial. O2O is about [people] buying things online, but collecting them from a shop on their side of the computer or smartphone – or having the stuff delivered to their doorstep. But China’s woefully inefficient logistics network .. acts as a brake on e-commerce growth, the Economist wrote in August, and that leads to online retailers seeking “brick-and-mortar” outlets to increase the points of delivery and to make their goods more accessible for their online customers.

Dalian Wanda Group’s (万达集团) and Suning Commerce Group (苏宁云商) are a recent example in the news. Wanda’s property development section (the company’s other major trades would be culture and tourism)  provides department stores or plazas all over the country, and Suning Commerce Group is a retailer with reportedly more than 1600 stores across mainland China, Hong Kong, and Japan. The two have signed a cooperation agreement: Suning will open stores at Wanda Plazas throughout the country, Reuters wrote on September 6.

National Soft Power, too

China News Service (CNS) explained, on September 7:

Suning coming into play is a direct result of an upgrade at Wanda. Wang Jianlin has long indicated that the answer would be revealed on this day.


The adjustments had been watched by many skeptical observers for about half a year, without Wang Jianlin providing much of a response during all the time, according to CNS. But as for Wanda’s department stores, or plazas, CNS has reassuring news:

Are Wanda’s stores really as bad as comments from outside suggest? Not at all. One one occasion, in an internal meeting, Wang Jianlin revealed that nearly half of the Wanda stores were incurring losses, but that the other half of them were profitable. He was in a position to cut the outlets that were incurring heavy losses, optimize the portfolio, and then have a attractive story to tell to the Hong Kong capital markets, with a beautiful financial report.


The CNS article also points out that Wanda became involved in the culture industry in 2012.

Compared with real estate business, the contribution the culture segment could make to [the Wanda group’s] revenues and profits was very low, but it perfectly fitted into the strategic requirements of the national advancement of soft power, and its synergy effects with real estate, tourism, and other trades was obvious. As big onlooking companies  from the real estate began to recognize [Wanda’s approach], they scrambled to emulate it.


CNS also refers to the acquisistion of AMC Theatres (AMC Cinemas), and Infront Sports and Media, and offers an explanation as to why such acquisitions would make sense, and concludes:

There are many more such examples. Every draw in this game of chess was made not from a spur of the moment, but as a move taken after careful consideration, serving the transformation plan for the entire Wanda group. This is also true for the adjustments of the stores, and the introduction of Suning.


The message provided by CCTV’s website for the foreign audience is equally heartwarming:

The Wanda Group, headed by Asia’s richest man Wang Jianlin, seems unstoppable.

Complementary illustration ...

Complementary illustration …

The Financial Times, in an online article published on August 6, isn’t quite that enthusiastic – although, it should be said, their misgivings aren’t about the Wanda-Suning romance which was only made public in September, but about the O2O industry in general. Rising labor costs could hamper the business model, and it is not entirely clear what lasting new business models will emerge.

That said, if O2O is really a lifestyle, as suggested by Chinaskinny, the question might come up, sooner or later, if and how costs play a role in that customer “hobby”, and if the promises it makes to the supplier side are sustainable, For sure, the example of the nail specialists who can make so much more per hour, if based on O2O, is all over the internet, as observed by the FT.



» Baidu Q3 forecast, TechCrunch, July 27, 2015
» Traditional Industries, new Bones, April 17, 2015
» Central Committee Cultural Decision, Oct 28, 2011


Saturday, August 15, 2015

Guessing Games: “Don’t wait for Beidaihe”

— Note: the following is old news: it’s about articles that appeared during the past two weeks and a half. —

Big sensation? Or was the Xinhua article, published on August 5, making fun of the international press in general, or the South China Morning Post (SCMP) in particular? The headline read Liao Wang Think Tank: Don’t wait for it, Beidaihe won’t happen, and it seemed to refer to an article in Hong Kong’s English-language paper, published on July 30.  The headline, of course, doesn’t necessarily mean that the near-tradtitional gathering of China’s top leaders has been cancelled. But it does suggest that Beidaihe is no longer the place where the big decisions are made: after all, Chinese politics had gradually become more transparent and “regular”, especially after the 18th National Congress of the CCP (i. e. the election of the current leadership) and the Eight Provisions (or Eight Rules). Hadn’t the politburo met on July 20 and 30? One could well expect that issues like the 13th 5-year plan, economic policies, striking the tigers (打老虎, put into quotation marks in the article, and referring to the ostensible fight against corruption among leading cadres) had been discussed there time and again – so what would be the use to go to Beidaihe? “Is it necessary? Is it likely [to happen]?”

Obviously, Beidaihe doesn’t need to be the place where big decisions are made. But it may still be the place. While the CCP is indeed fairly transparent when it comes to the publication of its final decisions, the decision-making process remains as murky as ever.

Maybe that’s why the Xinhua/Liaowang author found speculation about the time and agenda of the Beidaihe meetings so funny. The Economist also got a mention for suggesting that [n]ormally the meetings start in the second week of August and run for seven days or so. This year they started a week early […]. However, the Xinhua article didn’t mention that the Economist referred to reports in overseas Chinese media.

And, as usual, the sources weren’t specifically mentioned, either, let alone linked to, its sources, even though both the SCMP and the Economist article were available online. Maybe they were running counter to the Liaowang author’s message to his readers that Chinese politics had become “more transparent”.

Friday, July 17, 2015

“Trust is the Foundation of Security”: Chinese National Internet Information Office Director visits Berlin

Phoenix/Ifeng is a media company from Hong Kong. Its Chinese website (simplified characters) is read by a large constituency of mainland Chinese readers who appear to base some trust on the fact that Phoenix is a Hong Kong company.

The CAC (Cyberspace Administration of China), whose director Lu Wei visited Berlin on July 2, only published a photo showing Lu Wei and German interior minister Thomas de Maizière initially, but added a release based on the Phoenix article on July 7.

The following is a translation of the Phoenix/Ifeng article.

“State Internet Information Office” director Lu Wei and federal interior minister de Maizière, photo op, July 2, 2015. Click photo for source.

Main Link: Renew Internet Security policies, Safeguard the State and the People’s Life Security (鲁炜:更新互联网安全政策 确保国家和民众生活安全), Phoenix/Ifeng, July 3, 2015

Chinese National Internet Information Office director Lu Wei arrived in Berlin for a visit on July 2, and met with German federal ministers of the interior and for economic affairs and energy. He also visited the Network Security Center established in Berlin by European companies and said that China would like to strengthen cooperation with international companies and research institutions to jointly administer China’s internet security issues.


At the ministry of the interior, interior minister Thomas de Maiziere held talks with Lu Wei. Lu Wei also met with the ministry of economic affairs and energy’s state secretary*) Matthias Machnig on the same day.


During the talks, the German officials expressed their interest in China’s economic development, and the development of China’s internet industry in particular. and said that Germany actively revised and supervised regulations, making sure that all foreign companies in Germany were treated equally.


Lu Wei also went to Nokia’s network security center in Berlin on that day, experienced the latest network security control technology there personally, and listened to experts’ explanations about how prevent malware from intruding into all kinds of trades, as well as to how to create more trustworthy internet security systems, and other topics.


Lu Wei said that the internet isn’t just a techological issue, but also related to social issues of the entire humanity. China had always believed that trust is the foundation of security.


He used Nokia’s 150 years of development as an example, saying that only socially responsible multinational companies could develop in the long run.


Lu Wei said that China would update its internet security policies, with the core goal to guarantee state security, and security for the life of the people. He also said that China had always paid great attention to policies concerning foreign internet companies’ development in China because this was related to China’s policy of opening up, and China’s attitude of openness had not changed.


Besides meeting important members of the German government, Lu Wei visited a number of companies and research institutes, and spoke at the Third Sino-German Internet Industry Roundtable conference, explaining the development and challenges faced by China’s internet industry.




*) A state secretary in Germany is one of usually several secretaries next to the minister him- or herself, one rank further down in the bureaucracy.



» Industrie 4.0 auch mit China, FAZ, July 14, 2015
» Von Festnahmen überschattet, Die Welt, July 14, 2015
» 据凤凰卫视报道, CAC, July 7, 2015
» Deutsche Unternehmen in China, WiWo, June 30, 2015
» Europe targets U.S. Web Firms, WSJ, Nov 27, 2014
» Aneinander vorbei, China Monitor, Oct 18, 2014
» Noch stärker zusammenarbeiten, Bavaria, April 11, 2013


Sunday, July 5, 2015

Refined Propaganda: China’s “National Security Law”, and PLA Exercise in Hong Kong

CCTV coverage, July 4

See what happens? – Xinwen Lianbo, CCTV, July 4.
The exercise didn’t feature
prominently in the broadcast,
and was only shown among a
collection of short news
owards the end of the program.



“People’s Liberation Army” (PLA) troops stationed in Hong Kong conducted a military exercise at Castle Peak (青山, Green Hill) on Saturday morning, China News Service (CNS, 中国新闻网) reported on the same day. More than 500 Hong Kongers “from all walks of life” were invited as guests, according to the report. An imaginary enemy was occupying twelve successive mountain hills there, according to the screenplay, looking for opportunities to infiltrate the city area and to do damage there (训练场内,依次相连的12个山头被一股假想敌占据。指挥所、迫击炮阵地、地堡工事,假想敌在高地构筑阵地,企图伺机对香港市区实施渗透破坏).  It was the PLA’s task to “annihilate them on the spot”, before they could enter the city (在他们尚未进入市区之前,解放军需要将其就地歼灭).

If the CNS report (whose audience will be mainly mainlanders) reflects what the invited Hong Kongers felt, it was as much a revolutionary opera as an exercise:

In the morning at 10:50, three signal lights rose into the air, and the long-awaited PLA-simulated naval gunfire was opened. At command, the enemy targets were shrouded in smoke.


The turns of firepower attacks didn’t stop. Armed helicopters had just taken off, when mortar bombs arrived at high speed. As the flight speed was too fast, and as the sunlight hampered the eye, the trajectories weren’t clearly visible, but explosions, one to another, could be seen on the opposite hilltop. Six rounds of ten mortars firing, and the enemy targets had suffered heavy destruction.


You can probably imagine the rest.

Either the SCMP reporter, the CNS correspondent or this blogger’s translation has got some details wrong though. According to the SCMP, it wasn’t six mortars, but six military helicopters that were mobilised fired on targets set up on the mountain from distances of about 1km.

Either way, the SCMP quotes former Hong Kong security chief Regina Ip Lau Suk-yee (叶刘淑仪) as saying that

I don’t think we need to read too much into the timing. I think the garrison has a duty to assure us that they are well-prepared and ready to defend Hong Kong if there is any threat to our security

Her comments referred to a possible link between the exercise, and a sweeping and controversial national security law, passed by China’s “National People’s Congress” three days earlier.

Apparently, the guests did the propaganda work within Hong Kong, telling the SCMP reporter that the timing of the exercise was unimportant, and that the PLA was merely trying to show Hong Kong that it had the power to protect the city.

Radio Free Asia (RFA), a US broadcaster supervised by the Broadcasting Board of Governors (BBG), points out that the exercise on Saturday had been the first time that the PLA troops stationed in Hong Kong had invited media and guests. Two of these, Regina Ip, Ma Dingsheng (马鼎盛, apparently a Fenghuang/Phoenix-affiliated miltary commentator from Hong Kong), are quoted both by the SCMP, and RFA.

The Economist points out that state security is a job for the top, conveying

the remarkable range of Mr Xi’s worries, with potential threats seen to be emanating from sources as diverse as the internet, culture, education and outer space.

While the vagueness of the “national security law passed in Beijing could be followed by detailed regulations later, it was unlikely that its key terms will ever be defined more precisely. To Mr Xi, vagueness is a useful weapon.

There could be a little relief in Hong Kong, however, the Economist adds, given that the bill would not be applied in the territory.

That said, the bill isn’t lacking ambition outside mainland China. Ît obliges not only Hong Kong or Macau, but Taiwan, too, to defend China’s sovereignty, notes the SCMP. Huanqiu Shibao (环球时报, in an article rendered here by Sina), notes that the passing of the “National Security Law” had ccaused shock in Hong Kong and Taiwan (全国人大常委会高票通过新的国家安全法,在香港和台湾引发震撼).

The Huanqiu article suggests – without becoming to specific about this question – that worries in Hong Kong that people seen as daring oppositionals like Joshua Wong (黃之鋒) could be arrested when visiting mainland China were unfounded, as the bill was not applied in Hong Kong for the time being (即使法律暂时不在香港执行).

There were, of course, many people in Hong Kong who welcomed the new state security law, Huanqiu adds. But the article also quotes BBC coverage according to which the government and the public in Taiwan (literally: the court and the commonality, 台湾朝野一致反对大陆新国安法) unanimously opposed the bill.

The propaganda approach is pretty global, and China appears to have learned a lot from the Western political class, in terms of more refined propaganda. Pretty much the way most of Germany’s mainstream media make people believe that Greece’s political class and activists are pampered (and costly, for Germans) idiots, Huanqiu fosters a climate in which mainlanders will no longer ask why the liberties customary in Hong Kong shouldn’t be applied in mainland China, but rather, why there should be “special treatment” for anyone within “Greater China”.



» One Movement, two Pictures, Nov 27, 2014


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