Xi recently called for people to be more frugal and oppose waste following a “Clear the Plate” campaign by netizens calling on restaurants to cut down food waste. His words sparked off an anti-food waste campaign in state media.

He had already launched a crackdown against government extravagance, aimed at cutting corruption by officials, which angers the general public and threatens the party’s hold on power.

In another response to the calls for people to shun extravagance and waste, China’s TV watchdog has ordered all radio and television channels to cut advertising suggesting “gift giving,” the official Xinhua News Agency reported this week. A circular issued by the State Administration of Radio, Film and Television says some ads have encouraged people to give luxury watches, rare stamps and gold coins, “which has publicized incorrect values and helped create a bad social ethos,” Xinhua said. This also has to do with corruption, because it’s less obvious than giving money. These goods are easily tradable, so someone seeking a favor from an official can give him or her an expensive watch and the official can then easily sell it.

While fireworks are a major part of the festivities surrounding the Lunar New Year, which marks the beginning of the Year of the Snake, authorities in Beijing are asking the public to curb firework celebrations so as not to add to the city’s worsening air pollution, Xinhua reported Tuesday.

With a recent firework truck accident in Henan and pollution becoming a bigger problem in Beijing, fireworks have wreaked a huge amount of carnage, according to Time World:

[…] A huge fireworks display in 2009 ignited a fire at a Beijing building on the grounds of the new China Central Television headquarters that killed a firefighter and caused more than $700 million in damage. Every year in the Chinese capital a few hundred fires are ignited by fireworks, a few hundred people are injured and one or two die from related accidents. For pets the fear can be acute. From the first boom of an M-80, my high-strung Border collie retreats under my chair and proceeds to treat me as a human shield for the ensuing 15-day barrage.

Despite such destruction, the seasonal pyromania has hardly waned since a decade-plus long ban on fireworks in many major Chinese cities was lifted in 2005 and 2006. The explosions, believed to ward of evil spirits, are now unceasing during the holiday period. On New Year’s Eve the view from a tall building like Beijing’s 81-story China World Trade Center tower is incredible, with multicolored explosions shooting up in every direction across the city of more than 20 million. In the courtyard between the Drum and Bell towers along the capital’s central axis, thousands of people gather to watch as residents set off recently purchased fireworks. The noise reverberating off the ancient buildings is deafening and burnt paper shards rain down continually from the sky. On smaller streets middle-aged men—it is almost always men—lug boxes of fireworks into clear spaces, casually light them with cigarettes and then stand back as red, yellow and green explosions fill the air.

Now, as China prepares to welcome the Year of the Snake, there is a new call to cut Beijing’s fireworks appetite. After repeated periods of extreme air pollution this winter, local environmental officials worry that the holiday displays will further degrade the city’s already dangerous air. Over the first month of 2013, Beijing has seen repeated bouts of off-the-charts pollution. The air quality typically improves over the Chinese New Year period. Businesses including polluting factories in the surrounding region shut down for the holiday. The strain on the power grid and coal fired power plants drop. Many of the capital’s migrant workers, who make up 40% of the total population, head home, reducing the number of vehicles on the streets and easing the flow of traffic. But the barrage of fireworks can cause air pollution to spike dramatically. During the recent pollution surges concentrations of PM 2.5, particle measuring 2.5 microns or less, reached 950 micrograms per cubic meter at one station in Beijing on Jan. 13. That same day, the city’s 24-hour PM 2.5 concentration averaged 535, more than 20 times the World Health Organization’s recommended standard for safe air. (In 2010, when an hourly reading on the U.S. Embassy’s PM 2.5 monitor exceeded 500, it’s Twitter feed memorably said the air quality was “crazy bad.”) But according to a report in the Beijing News, a commercial daily newspaper, during the first day of fireworks last year the PM 2.5 reading at one station on the city’s west side hit 1,593, far worse than anything Beijing has seen during the especially polluted month January.

Despite warnings of pollution due to fireworks, firework sellers in Liuyang are still expecting big business, from The Los Angeles Times:

No place on Earth loves fireworks more than China. The country has been crazy for huapao since a Chinese monk named Li Tian invented firecrackers in the 5th century. An estimated 90% of the globe’s pyrotechnics are designed and produced in China, most of them here in Liuyang. The noisemakers have become an essential part of Chinese tradition. Popular as gifts, they’re used to ward off evil spirits and usher in good fortune.

The downside is the carnage. Building fires, skin burns, mangled digits and deaths come with the territory. Last week, a truck carrying fireworks exploded on an elevated highway in central Henan province, killing 10 people. The blast toppled a section of the roadway about the length of a football field. Authorities say the fireworks were unlicensed and transported by untrained handlers — part of a shadow network of illegal manufacturers and sellers that spring up during the new year crush.

The holiday period is the only time each year that major urban areas like Beijing allow fireworks in their city centers. But air quality has been so lousy lately that the Beijing Office on Fireworks and Firecrackers (yes, there is one) has urged residents to tone it down.

In Beijing, Gao Yumei, 31, and her son, Zhao Long, 14, bought $30 worth of mini-firecrackers, half a dozen roman candles and a bunch of sparklers. It’s more than she wanted to spend, but Gao said it was important to carry on the tradition.

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Post tags: fireworks, lunar new year, pollution, Year of the Snake
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At around 4pm on January 19, a Chinese naval frigate, while conducting routine training in relevant waters in the East China Sea, spotted an approaching ship-borne helicopter of JSDF. The frigate kept normal observation and alert, and fire control radar was not used.

At around 9am on January 30, a Chinese naval ship found itself closely followed and monitored by JSDF destroyer Yudachi while conducting routine training in relevant waters in the East China Sea. The radars on the Chinese naval ship kept normal observation and alert, and fire control radar was not used. Therefore, the Japanese side’s remarks were against the facts, said the statement.

What needs to be pointed out is that in recent years, Japanese warships and airplanes often conduct long time and close-in monitoring and surveillance of China’s naval ships and airplanes. This is the root cause to air and maritime safety issues between China and Japan. China has lodged representations to the Japanese side on a lot of occasions, said the statement.

Shang Jun summed up Chinese reactions at Xinhua:

Japanese Prime Minister Shinzo Abe made another attempt on Friday to mislead the international community by demanding China apologize for the recent radar incident.

If there is an apology to be made for the latest unease in China-Japan relations, it should be from the Japanese side.

[…] By spreading false accusation and posing as a poor victim, Japan had intended to tarnish China’s image so as to gain sympathy and support, but a lie does not help.

A Chinese saying goes that “it is better for the doer to undo what he has done.” It is time for Japan to make sincere efforts to rectify its wrongdoing and mend relations with China, rather than playing petty tricks and stirring up tension.

Japan insisted that its own account was accurate, however, with the government reportedly “considering the extent of what can be disclosed” in terms of supporting evidence. From the AFP:

In reply, Kawai told the ambassador Japan expected Beijing to “sincerely fulfil its responsibility for an explanation” and take measures to prevent similar incidents, a statement said.

“We have made a cautious and elaborate analysis of this incident at the defence ministry and we have confirmed it,” Foreign Minister Fumio Kishida said earlier.

“We told the Chinese side we cannot accept their argument and asked them for a sincere response,” he said.

Defence Minister Itsunori Onodera said on Friday the public announcements had been made “after a special unit analysed data on the radar contact and confirmed it. There is no mistake about it”.

Still, one analyst found China’s denial encouraging, if not convincing. From Chris Buckley at The New York Times:

For all China’s vehemence, the statement by its Defense Ministry suggested that senior officials in Beijing wanted to avoid an escalating quarrel, said Denny Roy, a senior fellow at the East-West Center in Honolulu who researches security issues.

“I think it’s a positive development that the Chinese would deny doing this, as opposed to saying, ‘Yes we did it, and we’ll do it again,’ ” Mr. Roy said. “For the Chinese to not want to be portrayed as an aggressor, I think, is a good sign.”

Many have wondered, particularly after it emerged that Abe was not informed of the incident for almost a week, exactly who is in charge of events around the islands. The Economist considered two possible answers:

Oddly, the January 30th incident came just as tensions seemed to be easing. There was talk of a fence-mending summit between Mr Abe, who took office in December, and Xi Jinping, China’s new leader. China has been using mainly civilian agencies rather than the navy to patrol the islands. And the Chinese press has not been uniformly bellicose. In Global Times, a Communist Party newspaper whose default mode is tub-thumping nationalism, two commentators this week separately urged caution, recalling China’s history of being set back in its development by Japanese aggression—in the 1890s and again in the 1930s and 1940s.

As a result, some Japanese politicians believe the provocation must have been a low-level decision by a commander on the ship. Katsuyuki Kawai, a foreign-affairs spokesman for the ruling Liberal Democratic Party, thinks the incident would have embarrassed China, since “it gives the impression that China is a rogue state”. He says that the idea that China’s forces are out of control is the Japanese government’s “biggest fear”.

The alternative, however—that this is a deliberate policy sanctioned at the highest level—may be even scarier. And a new study of China’s foreign policy by Linda Jakobson of the Lowy Institute, an Australian think-tank, argues that Chinese treatment of the islands is in fact tightly co-ordinated, with Mr Xi in direct charge as the head of a new office set up to deal with the crisis. She cites an anonymous official involved in the decision-making, who suggests that Mr Xi knows the dangers but is being given “exaggerated assessments” by underlings keen that he should take a tough stance.

From Jakobson herself at The Diplomat:

From Beijing’s perspective, the decision by the Japanese government last September to purchase the islands from their private owner signaled the nationalization of the islands, an unacceptable change in the status quo. According to my sources, a step-by-step plan was devised by the new Diaoyu task force and then approved by Xi to deal with each possible contingency. The plan’s goal is to force the Japanese government to at a minimum acknowledge that the sovereignty of the islands is disputed. Japan’s current stance is that there is no dispute – the islands belong to Japan. A change in Japan’s stance would open up the possibility for both sides to use diplomatic channels to agree that vessels of each respective nation would patrol the disputed waters on alternate days to assert sovereignty. More importantly, it could facilitate discussions on sharing fishing rights in the disputed waters. Fishermen have been at the center of several disputes which have led to an escalation of tensions between the two countries.

The chain of events since Tokyo’s purchase of the islands would appear to confirm that a plan of this nature was drawn up. Beijing began sending civilian law enforcement vessels to patrol the area around the Senkaku/Diaoyu islands, crossing into the 12- nautical-mile territorial zone around the islands, with the intention of “protecting” China’s sovereignty. Next, aircraft of these law enforcement agencies were sent to patrol the islands, prompting Japan to send fighter jets to intercept what Tokyo views as intruders. It wasn’t long before Chinese and Japanese jets were both engaging one another over the islands. It is not known whether the most recent action by China, the locking of radar onto a Japanese vessel, was the next step in the task force’s plan, but it seems plausible.

The episode has prompted renewed calls for emergency communication protocols between governments in the region. From Michael Martina at Reuters:

“What we need in the South China Sea is a mechanism that prevents us turning our diplomacy over to young majors and young (naval) commanders … to make decisions at sea that cause a problem (that escalates) into a military conflict that we might not be able to control,” Admiral Samuel Locklear [commander of U.S. forces in the Asia-Pacific] told a conference in the Indonesian capital.

[…] Locklear said governments and their leaders had to understand the potential for things to get out of hand.

“In this case, I think that point has been made pretty clear,” he said in reference to international reaction to the dispute between China and Japan.

According to the Asahi Shimbun, plans for such protocols between China and Japan ran aground on the Diaoyu issue itself:

Plans included establishing communication links between high-level officials, including those at the Cabinet level, and agreeing which language and radio frequencies to use when aircraft pilots or warship commanders need to contact those on the other side.

In June, China and Japan agreed to try to put initial measures in place by the end of 2012. But the agreement was never signed because relations soured following Tokyo’s decision in September to put in state ownership three of the Senkaku Islands, five islets held by Japan but claimed by China.

[…] A senior official at the Defense Ministry said Beijing has dodged all requests for negotiations since September. The Chinese side typically cites “scheduling complications,” the official said.

“Beijing will not respond to our calls,” said a senior Foreign Ministry official.

Even before the alleged radar incident was made public, The Financial Times’ Gideon Rachman warned of the risk that a minor incident might spiral out of control: “The obvious danger” given America’s security guarantees to Japan “is that, as in 1914, a small incident could invoke alliance commitments that lead to a wider war.” Responding at Foreign Policy, Stephen M. Walt argued that Rachman’s account of World War I’s origins exaggerated the danger, but raised a different fear of his own.

[… T]he key point is that the European powers did not go to war in 1914 because a minor incident suddenly and uncontrollably escalated into a hegemonic war. The real lesson of 1914 for the present day, therefore, is to ask whether any Asian powers are interested in deliberately launching a preventive war intended to establish regional hegemony, as Germany sought to do a century ago.

The good news is that this seems most unlikely. […]

There is one feature of the East Asian security environment that is worrisome, however, though it bears little resemblance to pre-war conditions in 1914. Today, conflict in East Asia might be encouraged by the belief that it could be confined to a naval or air clash over distant (and not very valuable) territories and thus not touch any state’s home territory or domestic population. All Asian countries would be exceedingly leery of attacking each other’s homelands, but naval and air battles over distant islands are precisely the sort of military exchange one might use to demonstrate resolve and capability but at little or no risk of escalation. That’s the scenario that I worry about, but that is not what happened back in July 1914.

At least one source of potential trouble has reportedly been eliminated. Authorities in Beijing had ‘Tokyo Big Explosion’-branded fireworks removed from store shelves ahead of the New Year celebrations. From Keiko Yoshioka at the Asahi Shimbun:

“The Chinese are on a path of peaceful development,” the official quoted authorities as saying. “The Japanese could allege otherwise if they exploit this firework.”

[…] The official said the company has no political intentions and chooses names for its fireworks purely with a view to sales.

A firework named “I Love Diaoyu” remains on sale. Other options include “Ultraman,” “Aircraft Carrier that Boosts National Prestige,” and “Beijing Style,” a play on the title of a popular South Korean music track named “Gangnam Style,” by singer Psy.

Moreover, the official said the firework was a good thing because it gave purchasers a way to express their “rational nationalism” by venting feelings “without actually setting Tokyo on fire.”

© Samuel Wade for China Digital Times (CDT), 2013. | Permalink | One comment | Add to del.icio.us
Post tags: aircraft carrier, diaoyu islands, east china sea, fireworks, Japan relations, lunar new year, Ministry of Defense, nationalism, navy, Shinzo Abe, South China Sea, territorial disputes, World War I, Xi Jinping, Xinhua
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China’s upscale restaurants and hotels are feeling the pain as the government pulls back on public funding for fine dining amid efforts to project an image of increasing official austerity.

Upwards of 60% of restaurants have faced cancellations since the austerity push began, according a report released on Thursday by the China Cuisine Association (in Chinese), which surveyed 100 restaurants and hotels across the country to determine the economic impact of the government’s belt tightening.

One five-star hotel in Beijing saw roughly 10 million yuan ($1.6 million) in reservations cancelled, according to the report. Catering businesses in the northeast city of Tianjin have seen business drop by 30% this year compared to the same period last year, the report added, though it didn’t specify a time frame for the period.

In another article about the ongoing crackdown on corruption, The Wall Street Journal cites a Xinhua report on an official who was suspended for failing to observe the ban on official banquets:

Officials have suspended Zhou Shaoqiang, the manager of state-owned Zhuhai Financial Investment Holdings Co., for holding a luxury banquet last month despite a government ban on lavish government-sponsored events, according to a report Tuesday from the official Xinhua News Agency.

Luxury brands have also long raked profits from the pockets of corrupt officials, and have also been a cause for public outrage – last September, Yang Dacai, aka “Watch Brother,” was removed from his official post after netizens lambasted him for wearing designer watches whose price tags far outweighed his salary. On his blog at The New Yorker, Evan Osnos reports on the gains that luxury brands have seen in China, and the declining returns that watchmakers have seen since the anti-corruption campaign began:

Global luxury sales and epic Chinese political corruption have become so inextricably intertwined over the last decade that the recent kerfuffles in Chinese politics—the investigations and convictions and pledges of propriety—have been nothing but trouble for the privileged few. That became clear last fall, when political disorder in Beijing made it difficult to know which faction would end up on top, and one luxury-brand representative told the Journal that sales were down because “no one knows who to bribe.”

Some of the heaviest hearts are in the luxury-watch business. No industry has enjoyed such a warm embrace in China as the one that packs such enormous monetary value into a small, easily exchanged physical object. And, sure enough, the luxury watch business enjoyed a banner year in 2011, growing forty per cent. But then China’s anti-corruption campaign began, and by September, Bo Xilai was in handcuffs, and watch exports to China suffered a devastating blow—down 27.5 per cent compared to a year earlier, according to the Federation of the Swiss Watch Industry. China Daily quoted an industry consultant saying the anti-corruption drive “hurts the luxury watch business a lot.”

It’s not just watches. In 2009, the industry experts estimated that gifts to government officials made up nearly fifty per cent of all of China’s luxury sales.[...]

© josh rudolph for China Digital Times (CDT), 2013. | Permalink | 2 comments | Add to del.icio.us
Post tags: anti-corruption, chinese new year, corrupt officials, corruption, lunar new year, luxury brands, luxury goods, official conduct, Year of the Snake
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The reptiles are reared for their meat, which is sold to restaurants, and their body parts, which are highly sought after in traditional Chinese medicine.

“In the year of snake we hope our company’s profits will double,” says Yang Hongchang, the 61-year-old farmer who introduced snake breeding to the village decades ago.

But with rising demand for snakes, the once poor village of Zisiqiao is now relatively wealthy, with many residents boasting revenue of tens of thousands of dollars.

“Snakes are my saviour,” he said. “When I first came here I was scared of snakes but that’s no longer the case.”

Aside from Zisiqiao, Chau Ka-Ling in Hong Kong says she serves over 1000 bowls of snake soup on her busiest days, Reuters reports:

Trained by her father in childhood to handle snakes, Chau, now in her early 50s, took over the business he founded, serving up a small bowl of soup for $35 Hong Kong dollars.

From boiling the essence out of snake, chicken and pig bones, to spicing it up with an array of ingredients that include five types of snake meat, the traditional southern Chinese snack can take over six hours to make.

Yet as the cold deepens in the weeks leading up to the Chinese New Year and the Year of the Snake it ushers in on Feb 10, Hong Kong locals huddle inside small street shops like hers.

“I’ve killed snakes for so many year, but actually I don’t want to. Because there are fewer and fewer snakes now,” she said. “But I can’t make a career change. There’s nothing else I can do.”

According to China Daily, Chinese reception of the snake has had mixed responses as it is usually associated with venom:

On these occasions, Chinese people have traditionally resorted to euphemisms to represent the snake in an auspicious light. The dragon, a symbol of power and majesty, is often used to stand in for its earthbound peer, which is certainly one of the reasons for envisioning the mythical animal; hence the term “the little dragon”.

While overwhelmingly repulsed by the snake, Chinese sentiments for the 2013 zodiac animal can be more complex, varying with time and locality. In Fujian province, the snake is held in a god-like position. It is not to be killed if found in a home, but removed gently into the wild. It is definitely not to be eaten as food. Some say they love the tickling of a python slithering around their body. At a mid-year festival, a parade is organised in which every participant holds a snake, which is supposed to bring them peace and harmony.

Maybe, given time, we can celebrate the Year of the Snake with an upbeat interpretation of the animal that incorporates our modern sensibilities. Maybe the snake can at once charm and be charmed. Maybe it can be male in form, a python of Herculean strength and courage…

Forget about that. The snake in Chinese incarnations will always remain female. You know what? As spelt out in pinyin, snake is “she”. I heard that’s the reason the Taiwan girl band S.H.E. was invited to the 2013 New Year’s Eve gala on national television.

Meanwhile, in order to celebrate the year of the snake, Shanghai Xintiandi is featuring installations by Liu Yi, from The People’s Daily Online:

A dramatic Snake Pavilion at the Xintiandi Piazza instantly catches the eye. Supported by silver-colored steel pipes, the structure is decorated with auspicious snake patterns and pulsating neon lights. The dazzling light and shadow evokes a dancing snake that brightens the whole square.

The pavilion and body of the snake is decorated with auspicious Chinese characters and symbols. These include the double fish meaning peace all year round, the double gourd meaning peace and auspiciousness and the Chinese knot meaning prosperity and connection.

Walking toward the entrance gate of Xintiandi Style shopping area, visitors see a snake-shaped neon installation, which appears to be a snake in the clouds and mist. The gateway arch and the body of the snake are decorated with various auspicious patterns that are both traditional and modern.

The artist creates a “moving snake” made of many fabric “scales.” It connects more than 1,000 Chinese characters(happiness) and the double fish paper-cuts to form an intertwined chain structure.

After the marriage rush on 12/12/12 and ‘love you forever day’, another China Daily article reports there is a superstition that says getting married during the year of the snake will bring bad luck:

According to the Chinese Lunar Calendar, there will be no li chun (the beginning of spring, one of 21 four-solar terms) during Lunar 2013. Some Chinese media have quoted Chinese experts as saying that it is “feudal superstition” to say Lunar 2013 will be “a widow year”, which means women who get married this year will suffer bad luck.

The reality is the young generation do not take the traditional belief seriously. Experts say there will be no significant effect on wedding-related commerce in 2013.

Looking around China, it seems the wedding-related business is not being affected by the “widow year”. Chinese media have already reported that in Shenyang, the capital of Northeast China’s Liaoning province, and Hefei, capital of East China’s Anhui province, wedding banquets to be held during this year’s May Day Holiday and the National Day Holiday in October are almost fully booked.

Compared with the older generation who like to check the almanac to see which year or which day is suitable for a wedding, the young generation are more concerned with how to make the ceremony more memorable.

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Post tags: lunar new year, marriages, snakes
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A truck laden with fireworks exploded on an elevated expressway in central China on Friday, unleashing a blast that threw vehicles 30 yards to the ground below and killing at least nine people, state news reports said.

The truck was on an expressway near Sanmenxia in Henan Province in morning fog when the truck erupted, causing an 87-yard section of the Yichang Bridge to collapse, according to the Web site of Dahe Daily, a newspaper in Henan, which quoted rescue officials at the site. Earlier, officials had raised the possibility that a bridge collapse set off the explosion.

Fireworks are a tradition of China’s traditional Lunar New Year celebrations, which begin on Feb. 9, and the explosion was a reminder of the dangers brought by the crush of people and goods on the move before the holiday.

[...]China Central Television reported that one eyewitness injured in the accident said that because of an earlier accident before the explosion, traffic had been snarled on the expressway and a number of vehicles had crashed into one another.

Initial coverage reported at least 26 were killed in the explosion and a further 15 injured, though more recent coverage claims lower numbers of casualties.

This incident highlights safety concerns surrounding the traditional use of fireworks in Spring Festival celebrations. From The Guardian:

The accident is a stark reminder of safety hazards often associated with Chinese new year celebrations, which begin this year on 10 February. 5,945 fire accidents were reported during the first day of last year’s spring festival alone, according to Xinhua.

In 2006, 367 people were killed at a temple fair in Henan when a storeroom of fireworks exploded, according to the Associated Press. Six years earlier, an explosion at an unlicensed fireworks factory killed 33 people, many of them children.

The Chinese government outlawed fireworks from 1993 to 2005, but ultimately lifted the ban under intense public pressure.

In 2010, a lunar holiday fireworks explosion caused damage and death in Guangdong province, and in 2011 state media reported two dead and 223 more injured over the holiday period in Beijing. After air pollution readings hit record levels in Beijing recently, safety is no longer the only argument for curbing the traditional celebratory use of fireworks. People’s Daily reports:

Air pollution concerns have prompted Beijing authorities to ask residents to set off fewer fireworks during the upcoming Spring Festival.

“To improve the air quality and create a favorable environment for you and your family members, please set off fewer fireworks or no fireworks, in order to reduce emissions of pollutants,” an official with the Beijing Office on Fireworks and Firecrackers said Friday.

The official said the office has closely followed Beijing’s air quality reports and issued the proposal to citizens via media.

[...]After an hours-long firework-ignition spree on the eve of the Lunar New Year in 2012, the density of PM2.5 increased sharply to hit 1,593 micrograms per cubic meter at the Chegongzhuang monitoring station, located downtown, or 1.5 times higher than the most polluted day so far this year in Beijing. ( The prolonged smog that shrouded many parts of north and east China in January sparked debate over fireworks during the Spring Festival.

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Wen touched on a number of familiar points in the report, including strengthening China’s social service and security net, improving agricultural and consumer distribution networks, the need for price stability, promoting private investment and boosting consumption. From the report, translated and posted by The Wall Street Journal:

We will work hard to expand consumer demand. We will vigorously adjust income distribution, increase the incomes of low- and middle-income groups, and enhance people’s ability to consume. We will improve policies that encourage consumption. We will vigorously develop elderly care, domestic, property management, medical and healthcare services. We will encourage consumer spending on cultural activities, tourism, and fitness; and implement the system of paid vacations. We will actively develop new forms of consumption such as online shopping; support and guide the consumption of green goods such as environmentally friendly building materials, water-saving sanitation products, and energy-efficient vehicles; and expand consumer credit. We will improve the urban-rural logistics system and infrastructural facilities, such as roads and parking lots, strengthen supervision over product quality and safety, improve the consumption environment, and safeguard consumers’ legitimate rights and interests.

…

We will continue to improve the investment structure. We will maintain the steady growth of investment and use investment to promote consumption and vice versa. We will fully implement the State Council’s 36 new guidelines on encouraging and guiding nongovernmental investment and adopt specific operating rules for their implementation. We will strengthen the role of government investment in guiding adjustment of the economic structure, ensure funding for key projects that are under construction or expansion, and begin construction on major national projects in an orderly manner. We will tighten standards on market access and the screening and approval process relating to land, credit, energy conservation, environmental protection, safety, and quality; and strengthen supervision and inspections of major projects, particularly those undertaken by governments and state~owned firms, to improve the quality of and returns on such investments.

Xinhua News reported that slower but better growth will benefit the world economy in the long run, and several foreign observers spoke about the global importance of a Chinese economy with a more balanced direction:

Steve Roach, Yale professor a former president of Morgan Stanley Asia, said in a recent article that China is doing a “far better job” in managing its economy than most give it credit. It even offered some lessons in macro policy strategy that the rest of the world should heed.

He also said China has waged a very successful campaign in controlling its inflation, which “has long been the nation’s most destabilizing economic threat.”

“China has plenty of ammunition in its monetary policy arsenal,” while in contrast, central banks of the United States and European nations “are out traditional ammunition,” and “have been forced to rely on untested and dubious liquidity injections,” Roach said.

He added that China is cut from a very different cloth than the advanced economies of the West. Long focused on stability, Beijing is more than willing to accept short-term costs of a “growth sacrifice” to keep its development on track.

Reuters reports that the lower national growth target falls short of the 10.3 percent weighted average of the projections of China’s 31 provinces, a reminder that the sum of the parts exceeds the whole and growth is still the lifeblood of regional officials:

“Clearly they want to signal that they want to change the growth model. But to change the growth model, you need to do a lot more than lowering your growth target,” said Stephen Green, an economist at Standard Chartered Bank in Hong Kong.

“The system hasn’t changed. It’s still all about stronger growth, getting promoted on the back of growth,” he said.

So while most provincial leaders have trimmed targets to show support for the national leadership, the personal incentive to outperform keeps them well above Beijing’s mandated rate.

While China observers looked to policy announcements and other hints emerging from this week’s NPC sessions, a number of data releases at the back end of the week combined January and February numbers to help to clear up any distortions caused by the Lunar New Year holiday. The factory sector grew at an 11.4% clip, its slowest expansion since mid-2009, and the People’s Bank of China announced that new yuan loans totaled RMB 710.7 billion. While the figure represents a decline from January’s RMB 738 billion level, and fell short of a RMB 750 million estimate in a Bloomberg News survey of 26 economists, it exceeded a RMB 500 million estimate in the state-run China Securities Journal. The shortfall, about RMB 300 million less than in the same period last year, may fuel increased expectations of more RRR cuts in 2012 as the central government continues to “fine-tune” its economic levers.

Finally, Friday brought news that the consumer price index (CPI) rose at the slowest pace in 20 months, a bright spot in an otherwise dreary string of data and one which may have bolstered the case for a stimulus. But while some economists agreed that the inflation figure supported policy loosening, one analyst warned Reuters to expect a tight year for Chinese monetary policy as China attempts to avoid a hard landing.

Spotlight: Weekend Trade Data

China posted a rare and massive $31.5 billion trade deficit in February, its largest in at least a decade, with exports falling nearly 25 percent from January. Import growth of nearly 40% far outpaced exports, though Xinhua News reported that the vast and skewed deficit reflected the statistical challenges posed by the earlier-than-usual Lunar New Year Holiday. The Financial Times cited the Lunar New Year effect as well, pointing out that combining the January and February data paints a less grim picture. Still, the news was enough to snap a two-day gain when Hong Kong’s stock market opened on Monday morning.

Other News

• During the annual sessions of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), the vice chairman called for more efforts to develop China’s private economy.
• China auto sales saw their worst two-month start since 2005, falling 6% in January and February compared with a year earlier, a dip that a member of the China Association of Automobile Manufacturers called a cause for concern.
• China’s foreign exchange regulator announced Friday that it had approved 23 new foreign institutions under its Qualified Foreign Institutional Investor (QFII) quota system this year, picking up the pace of approvals and raising the combined investment quota to $24.6 billion cross 129 foreign investors.
• As a growing number of manufacturers turn away from coastal hubs and look inland in an attempt to reduce costs, Xinhua New points out that many workers who typically would find work in cities as migrant laborers are now staying in their home provinces.
• Bloomberg reports that Asia-focused hedge funds started after the 2008 credit crisis are shutting down as they struggle to raise capital on an ongoing basis.
• Zhou Xiaochuan, governor of the People’s Bank of China, told state media that China may “appropriately” widen the yuan’s trading band as it nears the requirements to become more of a free-floating currency.
• Xinhua News reports that a Chinese-made commercial airliner will be ready for export by 2016.
• With blue-collar labor costs soaring, and China no longer offering the most cost-effective option for factory manpower, The Economist ponders what the end of cheap China means for China and the world.

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China posted a trade deficit of $31.48 billion in February after reporting a $27.28 billion surplus in January, according to data released Saturday by the General Administration of Customs.

Economists had widely expected the trade balance to swing to a deficit, as imports recovered from a temporary disruption during the Lunar New Year holiday in January. But the size of February’s deficit is well beyond the range of analyst estimates ….

Analysts say that China is still likely to run a trade surplus for the full year. The country’s manufacturers often stock up on imported supplies early in the year that are then fashioned into exports later in the year, leading to seasonal deficits early on.

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The weak external outlook underscores the importance of accelerating the transformation of China’s economy to reduce its vulnerability to the vagaries of global demand. China has taken a number of encouraging steps, including appreciating the renminbi, making substantial investments in the social safety net, expanding pension and health care coverage, raising the minimum wage, and beginning to raise the cost of inputs to production (particularly energy). Greater efforts are now needed to raise household income and shift the growth structure from exports and investment toward consumption.

Other news throughout the week did little to stir optimism or counter the IMF’s downside view. Domestically, the Ministry of Commerce announced that sales during the Lunar New Year holiday – typically one of the busiest shopping seasons of the year - grew at the slowest pace since 2009. Even luxury brands, which have poured into China to meet booming demand, reported disappointing numbers and a tentative sentiment among browsing customers who just last year “were grabbing everything.” January auto sales hit the brakes as well, tumbling more than 25% year-on-year in the sector’s biggest drop since 2005.

Friday’s January trade figures only reinforced hints of sputtering domestic demand. Exports fell for the first time in 2 years, and imports plunged 15 percent from a year earlier  - All in all, China’s biggest trade decline since the 2008 global financial crisis. While crude oil imports hit the third-highest level on record and copper imports rose in January compared to a year earlier, commodity imports declined overall from December. And even with the holiday period factored in, The People’s Bank of China said Friday that new RMB loans totaled 738 billion yuan in January, less than 75% of the consensus estimate of around 1-trillion yuan. The trade data and lending shortfall led some to believe the government would soon loosen monetary policy, possibly through a cut in the reserve requirement ratio that many expected to happen last month. From Reuters:

Lunar New Year distortions will make policymakers wary of any hasty reaction. Most analysts expect them to assess January and February data combined before deciding whether the current policy of gentle easing should be intensified.

The week-long Lunar New Year holiday, which fell in January this year and in February last year, typically sees factories shut or run at half speed during the period.

But seasonal factors alone do not convince every economist that January is a one-off distortion, especially for trade.

“A fall of over 15 percent in January cannot be entirely explained by the Lunar calendar, and adds weight to the view that economic output is slower than headline indicators might suggest,” said Ren Xianfeng, an economist at IHS Global in Beijing.

One data point which could complicate the government’s easing plans, however, is inflation. China’s National Bureau of Statistics announced Thursday that January’s consumer price index rose 4.5% year-on-year, reversing a steady decline from last summer’s high of 6.5%, with food prices soaring 10.5%. If the CPI print contained any source of optimism, it was that nonfood inflation fell for a fifth consecutive month. Adding to the mixed message, this week’s wave of mostly negative news comes just a week after China’s manufacturing industry data surprised to the upside, signaling that domestic demand may help the economy withstand weakened exports after all. With PMI at its highest level since October, one government researcher told Xinhua News that “the country’s economic slowdown trend is stabilizing.”

Any attempt to dissect January and February economic data in China, and diagnose a hard or soft landing for the world’s second-biggest economy, may prove vexing. While the Chinese economy changes so rapidly that regularly charting its course is challenging enough, the lunar calendar magnifies such difficulties during the early months of every year. The Wall Street Journal dubbed the hazy picture the “Lunar New Year Effect.” “Our simple and humble suggestion is to wait for February data to come out and read two months’ data together,” one analyst told Reuters:

That’s what the Chinese government does. It lumps together the figures most influenced by factory closures, like industrial production and output data, into a combined January-February figure. The Lunar New Year never falls outside those months.

Other News:

• Citibank received approval to launch a credit card program in China later this year, becoming the first non-Asian bank to do so. While Bloomberg reports that the move may signal an opening of China’s bank market, The Economist warns that such optimism may be misplaced.
• A Brookings Institution study published this week offers a “blueprint” for how Beijing can raise the international status of the renminbi, according to The Financial Times.
• The Wall Street Journal writes about one loss-making auto-parts maker in Michigan that received a lift from an unlikely place, as Chinese state-owned and private companies have begun to funnel capital into the United States.
• Despite the tumble in January auto sales, a senior J.D. Power analyst told The Wall Street Journal on Friday that vehicle sales in China could double to 35 million a year by 2018. The China Association of Automobile Manufacturers published data on the bestselling cars and top automakers in China in 2011.
• Visiting Canadian Prime Minister Stephen Harper witnessed the signing of 23 agreements between Canadian and Chinese enterprises worth nearly $3bn during a Thursday business forum in Beijing.
• Caixin details the latest regulatory initiatives announced for initial public offerings in China, part of a series of broader structural upgrades anticipated in the domestic securities markets.
• Bloomberg reported on Monday that China may launch a market for high-yield bonds within the next couple months, a move which could offer a “much-needed” funding source for smaller firms.
• With China’s once-hot property market turning polar, one local government in Anhui province announced new policies to boost property developers, including a range of subsidies and a waiving of property transfer taxes for commercial real estate purchases. Analysts differed on whether the central government would look to adopt Wuhu’s policies at the national level, or whether the new policies would help at all.

[Editor's Note: CDT Money is a once-a-week roundup of business and economic news from China. We’ll be giving an overview of business and economic trends from the world’s second-largest economy, as well as collecting the best news and analysis of the week from newspapers and the blogosphere.]

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Based on a list from the World Economic Forum dated Tuesday, attendees from mainland China-based agencies, companies and organization this year will total 63, down from the record 66 who attended in 2011. Its top political leaders, regulators and business executives also are expected to skip the forum.

The top political official in attendance will be Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission, China’s economic planning body. Another influential figure at Davos will be Li Daokui, director of a Beijing think tank and an adviser to the People’s Bank of China, China’s central bank.

Chinese Premier Wen Jiabao attended in 2009, while Li Keqiang—who is expected to succeed Mr. Wen in a once-a-decade political changeover that begins late this year—attended in 2010.

Last year, major political figures largely skipped the Davos forum, but leaders from some of China’s top state-owned enterprises attended. By contrast, none of the senior executives from China’s state-controlled bank and energy giants are scheduled attend this week’s forum, according to the forum’s list. Top business attendees are expected to include Sun Yafang, chairwoman of telecommunications equipment provider Huawei Technologies Co., and Chen Feng, chairman of HNA Group Co., one of China’s largest private-sector and most acquisitive conglomerates.

China approached event organizers in early 2011 to propose moving this year’s forum to an earlier date, according to The Financial Times, in order to avoid breaking with a 30-year tradition of sending high-level representatives:

Since 1979, when China formally joined the World Economic Forum at the dawn of Deng’s open-door reform, it has been represented by vice-premier ranking officials, and even premiers.

…

Observers believe that absence of senior officials this year may reflect Beijing’s focus on internal issues, especially in the run-up to the once-a-decade leadership shuffle this year.

“This year has particular political significance. Chinese leaders will do everything for the purpose of domestic politics, just like politicians in the US,” said Zheng Yongnian, a scholar of Chinese politics at East Asian Institute, National University of Singapore.

Meanwhile, The New York Times speculates about a possible ulterior motive for some of the Chinese business figures who chose to flock to Davos:

Some of the Chinese tycoons attending Davos this week — despite the conflict with the Lunar New Year celebrations back home — might well be conducting their due diligence before emigrating. A recent survey of 980 Chinese millionaires found that 46 percent of them were considering leaving China and another 14 percent had already emigrated or were completing the paperwork for relocating.

The survey by the Bank of China and the Hurun Report said 40 percent of the would-be émigrés — they’re known as “migratory birds” in China — would aim for the United States, followed by Canada (37 percent), Singapore (14 percent), Europe (11 percent), Hong Kong (5 percent) and Britain (2 percent).

The leading reasons for taking flight: better educational opportunities for their children, advanced medical treatment, worsening pollution back home (especially urban air quality) and food safety concerns.

But many potential émigrés, not surprisingly, are working on a Plan B in case China’s economic growth begins to slow, widespread social unrest takes hold or the political winds begin to blow against them.

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Charles Custer, meanwhile, reported for Danwei from the heated kang of a courtyard house in the far north-east of China, where he spent the holiday with his in-laws:

The Li family home is in Kedong, a small town that’s more or less halfway between Harbin and the Russian border. It was once a collection of pingfang – traditional Chinese one-storey houses – but those are increasingly being replaced with modern apartment buildings. Nowadays, if you stood in the center of Kedong, you might even feel like you were in a city. But it’s just an illusion; the apartment buildings give way to farmland within a few blocks in any direction.

The Lis take Spring Festival traditions more seriously than most, or so Mr. Li – my father-in-law – tells me …. In the Li family, the most important is the tradition of paying respect to the family’s (male) ancestors. On the morning of the day before Spring Festival, as his son glued a red and gold Spring Festival couplet to the door of the house and then the gate of the courtyard, Mr. Li washed his hands carefully and pulled scrolls out of a corner. These scrolls, it turns out, are likely at least 200 years old – they go back ten generations – and have been inscribed with the names of every one of Mr. Li’s male ancestors. After affixing them to the wall, Li taped on a 100 RMB note and then, reflecting on my presence perhaps, added a US $100 note above it.

CCTV’s annual New Year Gala was not warmly received by the Li family. The variety marathon will mark its 30th anniversary next year, and somewhat questionably boasts an audience of well over a billion people. The government’s political sensitivity may be undermining the show’s entertainment value, however, with a number of participants dropping out this year amid rumours of censorship. Among them is Zhao Benshan, who was absent for the first time in over twenty years. From Barbara Demick and John Lee at The Los Angeles Times:

Although the 55-year-old actor cited exhaustion, there was widespread speculation in the television industry that the skit he submitted this year didn’t get approval.

“This is the most censored show on Chinese television,” said Wu Renchu, a film critic based in Shanghai. He said the gala acts must go through three rounds of approval.

“There is more and more ideology and less entertainment. It is all about praising the achievements of the party and the nation. With stand-up comedy, you can’t have anything that touches on the reality of life in China ….”

Jiang Kun, a master of the Chinese comic art known as crosstalk, is also off the program this year, with columnists speculating it’s because his skit touched on a train crash last year in Wenzhou.

Zhao and Jiang’s absences were surely balanced, though, by the inclusion of a year-old, borrowed clip of billionaire investor and philanthropist Warren Buffett singing “I’ve Been Working on the Railroad” with a ukulele.

Judge for yourself at CNTV.cn, where this and previous years’ shows are available to view online.

New Year fireworks threatened to cloud the government’s new PM2.5 air quality readings, whose accuracy has already come into question. From Jonathan Watts in The Guardian:

Wang Qiuxia, of the Darwin Nature Knowledge Society NGO, said the air quality in many Chinese cities deteriorated sharply every New Year’s Eve.

He joined other activists in launching an online campaign for a “green new year” that urges people to save the money they would spend on fireworks and donate it to civic groups so they can buy pollution-monitoring devices.

Others demand tougher actions. The author Zheng Yuanjie, has used his Sina Weibo microblog to press the Beijing government to resume a ban on fireworks inside the fifth ring road. Others suggest the city should stage a single spectacular display – as Hong Kong does – rather than allowing millions of individuals to fire off starbursts and fire showers ….

The explosives also create a mountain of rubbish. According to the city environmental sanitation department, 58 tonnes of used fireworks were picked off Beijing’s streets during the new year festival in 2011.

Looking beyond the holidays, couples in China and around the world are seeking fertility treatment in order to give their offspring an astrologically auspicious start in life. From The Wall Street Journal:

Assisted-reproduction clinics in the U.S., China and elsewhere are reporting a surge in demand tied to the year of the dragon. The Los Angeles-based Agency for Surrogacy Solutions and sister company Global IVF Inc. have seen a 250% increase in business from Chinese or Chinese-Americans so far in January, according to co-founders Kathryn Kaycoff-Manos and Lauri Berger de Brito.

They expect the trend to continue until mid-May, the time by which couples need to conceive in order to deliver a baby by Feb. 9, 2013. Any baby born after that will be a snake not a dragon.

Luxury brands also have high hopes for the year ahead, according to CNN:

Watchmaker Piaget created more than 20 pieces exclusively for its Dragon and Phoenix line, which honors the dragon and its mythical mate. Items from the collection range from $25,000 to north of $100,000 for its Altiplano Double Jeu, a 43 mm watch in 18-carat white gold set with 78 cut diamonds, with an enamel dial and a white alligator strap.

Shanghai Tang incorporates the dragon motif in its Nespresso Dragon Collection, which includes a shiny red coffee maker, a box to hold Nespresso coffee capsules and a cup-and-saucer set.

Instead of starting from scratch, Rolls Royce’s Bespoke Team incorporated imagery and colors of the year of the dragon to put a new spin on its classic Phantom automobile.

And looking in the opposite direction, the Smithsonian Institution’s Surprising Science blog wonders where the idea of dragons came from in the first place. Via Jeremiah Jenne:

Ancient people may have discovered dinosaur fossils and understandably misinterpreted them as the remains of dragons. Chang Qu, a Chinese historian from the 4th century B.C., mislabeled such a fossil in what is now Sichuan Province. Take a look at a fossilized stegosaurus, for example, and you might see why: The giant beasts averaged 30 feet in length, were typically 14 feet tall and were covered in armored plates and spikes for defense ….

The most fascinating explanation involves an unexpected animal: the human. In his book An Instinct for Dragons, anthropologist David E. Jones argues that belief in dragons is so widespread among ancient cultures because evolution embedded an innate fear of predators in the human mind. Just as monkeys have been shown to exhibit a fear of snakes and large cats, Jones hypothesizes that the trait of fearing large predators—such as pythons, birds of prey and elephants—has been selected for in hominids. In more recent times, he argues, these universal fears have been frequently combined in folklore and created the myth of the dragon.

For a taste of how Beijing rung in the new year, see this video produced by the New York Times:

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Post tags: air quality, CCTV gala, censorship, chinese new year, fertility clinics, fireworks, lunar new year, New Year's Gala, Spring Festival, Warren Buffett
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China’s consumption of gold jewelry jumped 16% last year to a record 514 metric tons, according to metals consultancy GFMS. Meanwhile, India, the world’s largest gold consumer, saw jewelry demand slip.

As in other parts of the world, the Chinese are increasingly blurring the lines between retail gold demand, which is usually thought of as people purchasing jewelry to wear, and investment demand in the form of bars, coins or shares in exchange-traded funds.

Ma Bowen, a sales manager at a gold store in Yu Garden, a shopping area brimming with gold merchants near the eponymous park, estimates he sold 20% to 30% more gold last year. Alluding to worries about inflation, he says he is seeing an influx of younger shoppers among the crowds that throng gold shops steps away from a lavishly landscaped territory with pavilions, ponds and rock gardens.

Many of those shoppers are buying gold bars “to get their hands on something that’s physically valuable and may appreciate in the long run,” he said.

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An insider who has worked for many years at the train station in express transport says, if you want to sell tickets at the Beijing and Beijing West Railway Stations, aside from keeping your eyes and ears open, you will need to know the underground network of people who live and work in the railway station. This cast of characters includes other scalpers, couriers, thieves, beggars and more. They all know each other, and they each have their own territory. Famous, long-established gangs at Beijing Railway station include the “Northwest Wolves” and the “Northeast Pack.”

The source mentioned above claims that most scalpers at the Beijing Railway Station are from Anhui Province and the northeast. But at Beijing West, most scalpers come from the south. People from different provinces occasionally clash and sometimes violently, but their fights are usually stopped by the station staff or gang leaders.

The source also said that if you want to join the railway station community you must recognize the different gangs and determine the relationship between the gangs and the station. You must also become familiar with the appearance and contact information of police and staff at the station. This is the only way to survive.

Update: Southern Weekend has a collection of the massive springtime migration, or 春运 (chunyun), for lunar new year. Here is a small selection of photos, with captions translated by CDT:

On January 18, a worker rushes for his train at the Hangzhou Train Station. He is bearing his belongings on a pole, and toting his child on his back. According to the introduction [to this photo series], the Zhejiang area alone will have up to 10,102,000 travelers — an increase of 14.1%.

A Liaoning worker, Mr. Bai, says farewell to his parents who are returning home to Gansu on January 18. Inside the train car, the parents write “take care” in [the condensation of] the window.

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China will launch a pre-Lunar New Year crackdown on food safety, the Health Ministry said on Monday, focusing on illegal use of additives after a milk scandal last year killed at least six babies and made thousands sick. The campaign would focus on seven provinces, including Hebei where the milk contamination scandal began, ministry spokesman Mao Qunan told a news conference.

“Groups and individuals who have broken the law will be dealt with firmly to completely ensure people’s food safety over the holiday period,” Mao said. “We will report important cases to society in a timely manner.”

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Commentator Alison Klayman has been living in China for a year and a half. She had some idea of what it was like to celebrate the Chinese New Year: fireworks, dumplings, red lanterns and envelopes of money. But this year was special. She was invited to celebrate the New Year in a countryside village, in the hometown of a friend and colleague.

She knew it would be a 650-kilometer bus ride from Beijing on the busiest travel week of the year. She knew she would stand out as the only white person everywhere she went. She did not realize she would spend most of the holiday in bed with her friend’s grandmother.

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Post tags: family, lunar new year, radio, Spring Festival
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Severe winter weather is forecast to affect much of China over the next few days, potentially contributing to fresh transport problems just as millions of people return to work after the week-long Lunar New Year holiday.

The sleet, snow and gusty winds forecast on Tuesday by the National Meteorological Centre are not expected to be as serious as the heavy snowfall that blanketed much of the country over the past few weeks.

Millions of travelers were stranded ahead of what for many of them is their only chance to go home each year.

But the centre said road conditions could deteriorate as a cold front sweeps south along the eastern coast, possibly complicating travel on Tuesday, the last day of the holiday, when rural migrant workers across the country will take trains and buses to return to work.

“With temperatures falling in the morning and evening, precautions should be taken to deal with the potential negative impact of icy road conditions and similar problems,” the centre said in a statement on its Web site.

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