Posts tagged ‘Hong Kong’

Wednesday, October 26, 2016

KMT’s Communication: one Party, two Interpretations

It’s nothing unusual that Beijing bemoans a lack of pro-China “patriotism” among members or supporters of the governing Democratic Progressive Party (DPP) in Taiwan, but on Wednesday (Oct 26), on a regular press conference, a “Taiwan Affairs Office” (TAO) spokesman commented on a debate within the oppositional Kuomintang (KMT), a party with a Chinese history, according to Taiwanese news agency CNA. Former president Ma Ying-jeou, in office from 2008 to May this year, had worked to promote both closer economic ties to China, and some kind of political understanding. The “1992 consensus” always featured prominently in Ma’s China talk, but not so in president Tsai Ing-wen‘s. Now, the question within the KMT appears tobe  if one China, two interpretations (the traditional KMT view of the “consensus”), or one China, one interpretation should be a position to aspire to.

The TAO spokesman, apparently commenting on controversy within the KMT, also reiterated the “1992 consensus”. He mentioned neither two, nor one interpretation, probably because Beijing has never done that anyway.

Previously, the TAO had commented on the issue a fortnight ago. Wu Den-yih (吳敦義), Taiwan’s vice president from 2012 to 2016 (serving during president Ma Ying-jeou’s second term in office), had criticized current KMT chairperson Hung Hsiu-chu‘s (洪秀柱) cross-straits policies. In reaction to Wu’s criticism, KMT cultural and communications commission director Chow Chi-wai (周志偉) had quoted Hung Hsiu-chu as saying that the established KMT formular, “one China, two interpretations”; had not been cancelled, and that the KMT’s central committee would work to continuously strengthen communication further.

The English-language China Times pointed out in a report on October 16 that Hung had advocated moving towards a “one China, one interpretation” status during her presidential campaign in 2015. Hung, in a meeting with KMT legislators, had affirmed that to advocate the “different interpretation” version in a scheduled meeting with Chinese party and state chairman Xi Jinping was her “responsibility”.

However, she also said that the lawmakers probably did not understand the meaning of the “1992 Consensus” and how it had been reached.

Hung’s communication style could be described as erratic. Even people who might want to trust her, may not be in a position to do so when it comes to national security issues.

Apart from that, anything like “one China, one interpretation” is a reliable killer of any hope the KMT may have to win national elections.

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.

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Related

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

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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.

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Updates/Related

» Executives Disappearing, HP, Jan 8, 2016

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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.*)

据中国商务部26日公布的成果清单透露,双方达成的主要共识和成果可分5大类共49项。奥巴马在峰会上主动重申,美国坚持一个中国政策,不支持“台独”、“藏独”、“疆独”,也不介入香港事务。

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.

据新华社报道,习近平就下阶段中美关系发展提出重要建议,强调要推动中美关系始终沿着正确轨道向前发展。双方同意继续努力构建中美新型大国关系。他亦强调,中华民族对事关中国主权和领土完整问题高度敏感。希望美方恪守有关承诺,不支持任何旨在损害中国统一和稳定的行动。

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.*)

对此,奥巴马主动重申,美国坚持一个中国政策,恪守中美三个联合公报原则,这一立场不会改变。美国不支持“台独”、“藏独”、“疆独”,也不介入香港事务。这是奥巴马继去年APEC期间否认美国与香港“占中”活动有关后,再次公开对有关议题做出表态。

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.

中美达成的49项目成果和共识涉及中美新型大国关系、双边务实合作、亚太地区事务、国际与地区问题、全球性挑战等五大领域,其中有近20项涉及金融和贸易合作,各界期待的中美投资协定(BIT)谈判业已取得进展。中国商务部26日公布消息指,中美两国领导人重申达成一项高水平投资协定的谈判是“两国之间最重要的经济事项”,双方同意“强力推进谈判,加快工作节奏”。

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”.

中方成果清单中明确提到:“两国领导人重申达成一项高水平投资协定的谈判是两国之间最重要的经济事项。高水平的投资协定将反映双方对于非歧视、公平、透明度的共同成果,有效促进和确保市场准入和运营,并体现双方开放和自由的投资体制。中美两国同意强力推进谈判,加快工作节奏,以达成一项互利共赢的高水平投资协定。”

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.

中国国际问题研究院研究员杨希雨表示,两国元首这一表态具有历史性意义,意味着世界上最大的发达国家和最大的发展中国家或尽快达成BIT,而世界上最大的两个经济体达成BIT协议将起到引领效应,进一步夯实中美互信的经贸基础。

[…]

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”.

此次成果清单中,中美网络安全合作达成多项共识。如中美同意,各自国家政府均不得从事或者在知情情况下支持网络窃取知识产权,包括贸易秘密,以及其他机密商业信息;中美承诺,共同继续制定和推动国际社会网络空间合适的国家行为准则,并建立两国打击网络犯罪及相关事项高级别联合对话机制。多位美国专家对此表示,这是此访重要成果,网络安全是中美加强合作的一个非常重要的领域。印第安纳大学法学教授、美国外交学会网络安全高级研究员戴维.菲德勒认为,两国达成的这一共识“意义重大且受人欢迎”。

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.

此外双方还在加强反腐败合作、加强高铁建设合作、加强文化交流合作及应对全球性挑战方面达成共识,将努力拓展双边、地区、全球层面各领域务实合作,以建设性方式管控分歧和敏感问题,不断取得新成果。

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.

中国关注中美关系大局及未来走向,并未怠慢美国关注的具体问题。

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.

16日,奥巴马再次就网络安全放话,但据路透社报道,美国不会在习近平访美之前对所谓的“网络攻击”进行制裁,之后可能也不会。

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.

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Note

*) 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.

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Related

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

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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.

其实,细心的人早就能发现这次合作的蛛丝马迹。它与万达正在进行的业态升级紧密关联。甚至可以说,苏宁的入局,正是万达进行业态升级的直接成果。王健林一直引而不发,直到这一天揭晓答案。

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.

万达百货真的有外界评说的那么糟糕吗?并不是。王健林曾经在一次内部会上透露,万达百货有近一半是亏损的,但还有另一半是盈利的。他完全可以砍掉亏损严重的门店,优化资产组合,用亮丽的财报去给香港资本市场讲一个动听的故事。

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.

2012年,万达发力文化产业。跟地产比起来,文化产业能够贡献的收入和利润份额在当时非常之低,但是却紧密契合了国家提升软实力的战略需求,与地产、旅游等行业的协同效应非常明显。以至于在后来,许多大型地产企业都看明白了,开始争相效仿。

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.

这样的例子还有很多。万达的每一步棋子都不是临时起意,都是深思熟虑之后的谨慎之举,并为整个集团公司的转型大计服务。调整百货,引入苏宁,也是如此。

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.

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Related

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

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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.

中国国家互联网信息办公室主任鲁炜2号到访柏林,先后同德国内政部以及经济能源部官员会面。他还走访欧洲企业在柏林设立的网络安全中心,表示中国愿意同国际企业、研究机构加强合作,共治中国的互联网安全问题。

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.

在德国内政部,内政部长德梅齐埃同鲁炜举行会谈。鲁炜当天还同德国经济能源部国务秘书马赫尼西会面。

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.

在交谈中,德国官员向鲁炜表达了他们对中国经济发展,尤其是中国互联网产业发展的关注,并说德国在积极修订监管法规,确保所有外国企业在德国都被一视同仁。

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.

鲁炜当天还前往位于柏林的诺基亚网络安全中心,亲身体验了这里的最新网络安全控制技术,听这里的技术专家介绍如何防范恶意软件对社会各行业的侵扰,以及如何打造更值得信赖的互联网安全系统等话题。

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.

鲁炜说,互联网安全不仅是技术话题,也是关系到全人类的社会话题,中方一直相信,信任是安全的基础。

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

他又以诺基亚150年的发展过程为例,说有社会责任感的跨国企业,才能发展得更久远。

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.

鲁炜说,中国还将更新互联网安全政策,核心目标是确保国家的安全,以及民众的生活安全。他还提到,中国对外国互联网企业在华发展的政策一直很重视,因为这关系到中国的开放政策,而中国对外开放的态度是不变的。

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.

除了同德国政要会面外,鲁炜在德国访问期间,还会参观多个企业和研究院所,并在3号出席中德互联网产业圆桌会议,致辞介绍中国互联网产业的发展以及所面临的挑战。

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Footnote

*) 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.

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Related

» 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

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