Overseas shipments decreased 0.5 percent and imports fell 15.3 percent from a year earlier, the customs bureau said on its website today. The median estimate of 30 economists was for a 3.6 percent drop in imports for the month, which had four fewer working days than January 2011 because of the holiday. The trade surplus widened to a six-month high of $27.3 billion.

Economists differed over whether the data are evidence of a slowdown in demand within China or result mainly from seasonal distortions. Commerce Minister Chen Deming said yesterday January exports “cannot make us optimistic” and the International Monetary Fund cautioned this week a deterioration in Europe could cut China’s expansion rate almost in half this year.

“Domestic demand was genuinely weak in January, while exports remained on a gradual downward trend,” said Yao Wei, a Hong Kong-based economist for Societe Generale SA.

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[Lu Yeqin, Villager]:
“Officials from the village sold land. This land originally belonged to the villagers. After it was sold, the [villagers] were not given any money for it. The villagers are upset, and after all, this land was passed down through their family business. They rely on the land for their livelihood, but now it has been sold.”

Police did not stop more than 3000 villagers from marching to the village committee, but neither have the villagers received a response from local officials.

Local resident Mrs. Ma says the turnout has been huge.

[Mrs. Ma, Villager]:
“Everyone from the village came out. Today we will march again, and the whole village should come. I have even seen kids coming out, passing by my building.”

The Chinese blogosphere is buzzing with chatter about the demonstrations in Panhe East and West, where tensions between local residents and officials have followed a Wukan-like trajectory. From Tea Leaf Nation, which also posted images that had surfaced on Sina Weibo yesterday:

As reported on the Internet portal China.com, the Panhe Village Committee spent the last several years selling off piece after piece of Panhe’s land, all without the villagers’ knowledge. On June 11, 2011, a Wenzhou copper company brought thugs and local police as it began to mine pieces of ancestral land, leading to a confrontation that saw villagers injured, including women and the elderly. The report further states that after villagers’ attempts to report the matter were ignored, they retaliated on October 16, 2011 by attacking the property of another local company. In response, the report continues, the local government arrested nine villagers, two of whom are still in custody.

World Journal, a popular Chinese-language newspaper in North America, reports that government officials and police fled the small village of approximately 5,000 in October of last year following a violent confrontation with villagers in which more than ten were arrested. The reports agree that villagers’ demands for compensation were substantially ignored by authorities.

According to World Journal, the Wukan uprising’s ultimate success inspired Panhe villagers to decide to hold widespread demonstrations starting February 1.  Since that time, the report continues, demonstrators have circled the village unmolested. The street demonstrations shown in photographic accounts include demonstrators waving banners with slogans such as, “Denounce the Local Panhe Government’s Deceit Of The Masses,” “Down With Corrupt Officials,” and “Reselling Land And Destroying Fertile Farmland Is A Heinous Crime.”

See also CDT coverage of a new survey in which 43% of farmers reported being victims of land grabs. The Council on Foreign Relations’ Elizabeth Economy wrote Tuesday that “more Wukans are on China’s horizon” unless China creates a real system of official accountability or enforces the rule of law.

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“The nationwide survey, which will provide basic data for China’s Gini coefficient calculation, will cover about 140,000 urban and rural households, and the gathering and use of data will conform to international standards,” Xie Hongguang, deputy chief of the National Bureau of Statistics (NBS), said.

The integrated urban-rural income data is scheduled to be published in 2013 to pave the way for the publication of a national Gini coefficient that can measure income inequality, Xie said ….

Yi Xianrong, a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences, suggested that the government introduce regulations to ensure the transparency of income information.

“The public have a right to know the Gini coefficient,” Yi said.

Last year’s NBS figures put China’s rural Gini coefficient at 0.39, just short of the 0.4 mark widely held to show potentially destabilising inequality. But the article also cites the World Bank’s 2009 estimate of 0.47 for the country as a whole. See explanations of the Gini coefficient from the World Bank and Wikipedia, and the latter’s global comparison, from Sweden and Norway in the 0.20s to Namibia at over 0.7.

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According to the study, conducted in 17 provinces and regions by Beijing’s Renmin University and published in the 21st Century Business Herald, nearly a quarter of farmers did not receive any compensation for their land.

Almost two thirds of those surveyed who did receive compensation got a lump sum, which averaged 18,739 yuan ($3,000) per mu, a Chinese unit of land equivalent to 0.16 acres or 0.07 hectares, according to the study.

This compares to an average land sale price of 778,000 yuan per mu for local governments — or more than 40 times the average compensation sum given to farmers. The others received their money in installments.

On a visit to the southern manufacturing hub of Guangdong over the weekend, Wen reiterated his concern over land grabs.

Read more about land rights in China via CDT.

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Facebook said last week it was contemplating re-entering China, the world’s second biggest economy, after being blocked nearly three years ago.

But its offering would likely face intense competition, political meddling and little commercial success.

Few foreign internet companies have succeeded in China. EBay Inc, Google Inc, Amazon.com Inc, Yahoo Inc and most recently Groupon Inc form the list of notable online players who have failed to gain traction in the fast-growing nation of 1.3 billion people.

“It’s actually a bit late for Facebook,” said Hong Kong-based CLSA analyst Elinor Leung, who added that the market was already quite saturated with local players such as Sina Corp, Renren Inc, Kaixinwang001 and Tencent Holdings.

Read more about Facebook in China, via CDT.

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James Fallows opened fire at The Atlantic:

Let’s not even get into the logic of the ad — eg, the fact that China’s formula for creating jobs has involved more public spending and more public “guidance” of industry than America’s. Let’s skip to the bonus points for racial imagery in the ad, apart from the obvious.

1) The “Chinese” woman speaks in American-accented English, and I would bet she is actually an Asian-American. But the script has her make pidgin grammar errors, “Me likee!!”-style.

2) The ad’s words are about trade, budgets, and jobs, but its images are about — ‘Nam!! Of course some parts of southern China look the way this ad does, with rice paddies, palm trees, no big buildings, people wearing conical straw hats and bicycling along dike tops. But this is nothing like how the typical big-factory zone looks in China, or the huge cities that would exemplify Chinese wealth and the country’s rise — ie, the subjects of this ad. So why this rural setting? I think it’s because it offers a kind of visual dog-whistle, for those Americans who, either through experience or through Apocalypse Now-style imagery, associate smiling-but-deceptive Asians in a rice-paddy setting with previous American sorrow.

The accompanying website underlined the charges, hammering the point home with liberal use of takeaway-carton lettering. A brief post at Talking Points Memo noted that, in the page’s source code, images of the Asian woman are identified with the label “yellowgirl”: a possible reference to her shirt, but “probably just another level of the unfortunateness.” (See update below.)

Accusations soon arose that the Hoekstra campaign was deleting critical comments from its Facebook page. A spokesman, meanwhile, insisted that the ad was satirical, and that its use of broken English was intended to highlight China’s great achievements in language education. From Politico:

“You have a Chinese girl speaking English – I want to hit on the education system, essentially. The fact that a Chinese girl is speaking English is a testament to how they can compete with us, when an American boy of the same age speaking Mandarin is absolutely insane, or unthinkable right now,” Hoekstra spokesperson Paul Ciaramitaro told POLITICO. “It exhibits another way in which China is competing with us globally.”

America’s two million first-language Chinese speakers include a growing number who speak Mandarin, some of whom are presumably boys. In addition, there are some 60,000 elementary and secondary school students learning Chinese. These are not large figures compared with China’s 300 million English learners, but neither, perhaps, are they “absolutely insanely” or “unthinkably” small. Ciaramitaro continues:

“I think that China is our global competitor and the facts are what they are. They hold $1.1 trillion of our debt, their economy is booming, ours is not. It’s not a racial overtone to compare yourself to competitors on the global stage,” added Ciaramitaro. “I think the viewer of an ad is going to recognize satire. … I wouldn’t agree of the characterization [of the ad] as racial.”

FOX News’ Juan Williams suggested that the ad may have been a tactical error, with the controversy detracting from its intended message:

[Williams] sees the ad as a wasted opportunity for Hoekstra and not great publicity for the Republican party, “which is often accused of being insensitive toward immigrants.”

“Pete Hoekstra is a very bright guy, but what he is trying to get across here, his concerns about spending and debt, that’s now being obscured by charges of racism,” said Williams. “These charges of racism are resonating right now instead of his views on reigning in the national debt.”

While both Ciaramitaro and Hoekstra claimed that talk of race came from Democrats lacking a substantial response, criticism of the ad was refreshingly bipartisan. “Semi-defrocked senior GOP Political Consultant” Mike Murphy commented that it was “really, really dumb. I mean really“. While some Republicans attacked the ad’s tone or political wisdom, others accused Hoekstra of hypocrisy based on his own spending record. From The Associated Press:

GOP consultant Nick De Leeuw flat-out scolded the Holland Republican for the ad.

“Stabenow has got to go. But shame on Pete Hoekstra for that appalling new advertisement,” De Leeuw wrote on his Facebook page Sunday morning. “Racism and xenophobia aren’t any way to get things done ….”

“Saving America from the Washington, D.C., politicians who gave us this crippling debt and deficit crisis, Republican and Democrat alike, means Hoekstra and Stabenow should both get benched,” [Hoekstra's GOP Senate primary rival Gary] Glenn said in a release.

The Michigan Democrat Party has similarly focused on Hoekstra’s credentials as a crusader for low spending, playing up Republican and Tea Party accusations that he had supported big spending as a congressman and lobbyist.

As The Detroit Free Press’ Bob Campbell pointed out, the MDP has itself played the China card in the past, in a 2006 ad attacking GOP gubernatorial candidate Dick DeVos for exporting jobs. The factories to which they were relocated were, again, curiously absent from the China on screen:

Hoekstra’s ad has so far attracted little attention on the other side of the Pacific, however. From Isaac Stone Fish at Foreign Policy:

… There is scant chatter of it on Sina Weibo or Tencent Weibo, the two most popular Twitter-like microblogging services. The NFL, lacking the popularity that Yao Ming brought to the NBA, is rarely watched in China anyway, and the ads this year that drew any attention were mostly car commercials.

Only a handful of Twitter users wrote about it in simplified Mandarin (the way Chinese is written in Mainland China, unlike the traditional characters which the Debbiespenditnow website inexplicably employs). One who did so is a software engineer working in the Netherlands who tweets under the name lihlii. “I don’t think it’s racist,” he said in a phone interview. “It’s about America losing jobs ….”

Those who did object to the ad generally did so in an American context. Michael Anti, a popular blogger who has lived in the U.S. as a Nieman Fellow, wrote on Twitter:

“I think the problem with the ad is that it’s racist, not anti-Chinese. As a Chinese I should be amused by this ad, because it seems more like Southeast Asia. But Chinese in America are easily enraged by that sort of prejudicial defamation of the image of a Chinese woman. Also, her English is not the Chinglish of a Mainland Chinese.”

Update: James Fallows noted that the “yellowgirl” reference in the site’s code has now been changed to “yellowshirtgirl”. On MSNBC, Lawrence O’Donnell took aim at “yellowshirtgirl” herself. From Mediaite:

“I want to know exactly what she was thinking,” he noted, and then turned back the Hoekstra, in effect accusing him of hiding behind her image and suggesting one thing is for him to expound ideas and another “for him to hire an actor to do his dirty work for him.”

“It can be stopped right now, tonight, by a pledge of simple decency that all member of the Screen Actors’ Guild can make,” he noted, putting his right hand up as to make a promise: “I will not play dirty politics… that means that you will not play a character in political ads.” After his attack on the actor in the video, however, he explained that many actors engage in such things because of money problems, recounting the story of an actor he once “talked out of playing Hitler’s daughter” by asking if, in the worst case scenario that that was the last part she ever played, she would want to be remembered by it. “I have done things that I’m not proud of,” he concluded, “but I have not done anything I am ashamed of.”

While the Hoekstra campaign insists that talk of race is a desperate evasion by Democrats, the ad’s argument has also received a sound thrashing. From Asia Society:

Yunfan Sun, Program Officer at the Center on U.S.-China Relations [pointed] out glaring flaws in Hoekstra’s polarizing “Pete Spend-it-Not” position.

“It is precisely the ‘Spend-it-Not’ mentality in the United States that has been sending jobs overseas, where cheaper labor and materials, as well as tax breaks, lead to increases in the bottom lines of big corporations,” Sun said. “And the fact that the U.S. government can’t or won’t spend on infrastructure is precisely why Chinese companies get to build things like new subway lines in New York City.”

The New Yorker’s Evan Osnos pointed out other problems:

For all the xenophobia and mistakes, the thing that might really worry a voter is that a man can get this far in the U.S. political system without a basic grip on the mechanics of his government. “You borrow more and more,” the N.P.S.A. [Nondescript Presumably Scary Asian] says. But that is false, says the U.S. Treasury. Chinese holdings of U.S. treasury bonds, in fact, declined from November of 2010 to November 2011. “China has not been a major buyer of U.S. treasury notes on the margin for a couple of years now,” Victor Shih, an expert on Chinese economics and politics at Northwestern University, told me.

When Hoekstra’s point collides with fact, he calls in the help of a large font: he describes China as “the largest foreign holder of U.S. Treasury securities”—which is true—but then describes China’s holdings as increasing from 9.6 per cent in 2002 to twenty-six per cent in 2010. A voter might blanch at the idea of a foreign country holding over a quarter of U.S. Treasury debt, except that it’s not true. The twenty-six per cent is China’s holdings among foreign holders, not overall debt, and “the overall share of treasury held by foreign entities declined in the past couple of years,” Shih told me. (“One thing that Americans have to realize is that China may be a net lender internationally, but the Chinese government and state-owned enterprises borrow a huge amount of money domestically,” Shih added. “The racist caricature of those thrifty Chinese who take advantage of debt-loving Americans is widely off the mark because China is one of the most indebted countries in the world.”)

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As expected, cost pressures dragged fourth-quarter China restaurant margins down to 15.8 percent from 18.2 percent a year earlier.

Yum wants to bring margins up to around 20 percent for all of 2012 and plans to use higher prices to offset inflation in food prices, labor costs and other items.

Yum also plans to bolster growth by adding another 600 restaurants in China, where its brands include KFC, Pizza Hut, East Dawning and Little Sheep. The additions would bring Yum’s restaurant count to about 5,100.

While Yum’s operations in China and other developing countries have made it a top pick for international investors, the company’s U.S. division has underperformed.

Despite the growth of fast food’s popularity and an increase in consumer spending on things like KFC and Coca-Cola, there are also fears about China’s slowing housing market, which may lead to mixed messages on China’s economy. CNN Money reports:

Coca-Cola (KO, Fortune 500) said Tuesday morning that its profits topped estimates, helped by a 10% jump in volume in China. Emerging markets are a key focus for Coke as the beverage market matures in the U.S.

However, even if the emerging middle class in China is acquiring more of a taste for some of the top Uncle Sam brands, that may not mean that the Chinese economy overall is impervious to potential pain.

One of the biggest concerns facing China is whether or not its real estate market is a bubble along the lines of what happened in the United States in those naughty Aughties. And there is some evidence that the Chinese housing market is cooling … perhaps faster than the government there would like.

On the one hand, you might be able to spin the housing weakness in China as a good thing. It may mean that China’s central bank, which was aggressively raising interest rates and reserve requirements for banks over the past few years to fight inflation, succeeded in killing any asset bubbles.

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“This approval represents a significant milestone in the continued expansion of Citi’s business in China, a priority market for Citi,” said Stephen Bird, chief executive officer for Citi Asia Pacific.

Until now, Hong Kong’s Bank of East Asia was the only ‘foreign’ bank to offer credit cards in China.

Citi has offered ‘co-branded’ credit cards with Shanghai Pudong Development Bank (SPDB) since 2003.

Citibank has branches in 13 Chinese cities.

Citibank has already established a strong position in China with their consumer and corporate banking options. With the popularity of credit cards on the rise, there is speculation that China’s recent approval may signal an opening in the banking market. Business Week adds:

The announcement yesterday came as the WTO, acting on a U.S. complaint, probes the legality of China’s refusal to let foreign companies issue their own bank cards denominated in its currency, or to permit companies such as Visa Inc., American Express Co., MasterCard Inc., Discover Financial Services and First Data Corp. to process card transactions in China.

“It’s perhaps not a coincidence that this is coming at this point when this case is going on,” said Fredrik Erixon, director of the Brussels-based European Centre for International Political Economy. “But I think it’s more connected to changes on the ground in China, in its policy on competition in banking in China, where we see a cautiously gradual opening.”

Credit cards are becoming more popular among China’s 1.3 billion people as rising incomes stoke consumer spending. Chinese banks issued 268 million credit cards as of Sept. 30, up 20 percent from a year earlier, according to the central bank.

Citibank said in a statement from Shanghai that the Chinese government’s consent followed preliminary regulatory approval in January 2012 for the lender to set up a joint-venture securities firm in China with Orient Securities Co. Ltd. Citi Orient Securities Co. Ltd. will be involved in investment banking in the Chinese domestic market, including securities underwriting and sponsoring and any other business as approved by China Securities Regulatory Commission.

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Wal-Mart Stores Inc., the world’s largest retailer, appointed Greg Foran as president and chief executive officer of its China unit, more than three months after his predecessor Ed Chan left the company.

Foran, currently senior vice president for Wal-Mart International, will assume his new roles effective March 1, the company said in an e-mailed statement today. He will move to China, pending work visa approval, Wal-Mart said.

…

Foran joined Wal-Mart in October and previously headed the food and liquor business at Sydney-based Woolworths Ltd., Australia’s biggest retailer.

One analyst questioned the choice in an interview with Reuters, given that Foran is a relative newcomer to the China market:

“The new appointee seems to have comparatively less China on-the-ground experience,” said James Roy, senior analyst at China Market Research Group based in Shanghai.

“I think for a lot of American companies and a lot of foreign companies, they need people from inside who know the company culture well, and it is important to have a balance between that and the operating environment in China,” he said.

“Whether it is local Chinese or not, it should be somebody who understands the market.”

See also CDT coverage of Wal-Mart’s China expansion through the eyes of Orville Schell, who heads the Asia Society’s Center on U.S.-China Relations.

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Based on the IMF’s “downside” forecast for the global economy, China’s growth could drop by as much as 4 percentage points from the fund’s current projection, which is for 8.2 percent this year, the organization said in a report released today by its China office in Beijing.

The outlook expands on the IMF’s warning last month that the world could plunge into another recession if Europe’s woes deepen. Premier Wen Jiabao reiterated last week his government will “fine-tune” policies to support growth amid the region’s debt crisis and the cooling domestic property market.

“China’s growth rate would drop abruptly if the euro area experiences a sharp recession,” the Washington-based IMF said. “However, a track record of fiscal discipline has given China ample room to respond to such an external shock.”

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