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China news tagged with: Southern Weekend (20)

• Top Chinese Editor Demoted after Barack Obama Interview

  

  The Guardian reports that a top editor for Southern Weekend has been demoted after publishing an exclusive interview with President Obama during his China visit last month:

  Southern Weekend confirmed Xiang Xi had been named as “executive” editor-in-chief, claiming that it was only a change of title. Three employees told Reuters he had been demoted after pressure from the propaganda authorities. All staff requested anonymity.

  It is understood the White House initiated the interview during Obama’s visit last month. Usually, visiting leaders speak to official newspapers or the state broadcaster CCTV. “Xiang Xi was de facto top editor at Southern Weekend and in effect he has been shifted from number one to number two … This could be a way to stave off more pressure from above,” said Michael Anti, a Chinese blogger and media commentator based in Beijing.

  According to Reuters, the Chinese foreign ministry approved the meeting, angering propaganda officials . Another editor said the officials restricted questions and slashed material approved for publication, although a White House transcript did not contain extra material.

  Read more about Obama’s Southern Weekend interview via CDT, here and here.

  » Read more
  • December 13, 2009 2:47 PM

• Obama’s China Interview Mystery (Updated)

  

  From the Wall Street Journal Blog:

  President Barack Obama’s first attempt to speak directly to China’s people during his trip this week was marred by Beijing’s failure to broadcast the remarks nationwide as promised. Now his parting words to the Chinese public are the subject of a mystery that has some observers scratching their heads and wondering whether the censors have been at work again.

  

  Southern Weekend, a Chinese newspaper based in the city of Guangzhou, on Thursday carried an exclusive interview with Obama that its editor-in-chief conducted a day earlier at the president’s Beijing hotel. The interview was teased in large type on the front page of the paper, and splashed across half of page A02 with a big photograph. It was the only interview Obama did with Chinese media during his three-day China trip – his first visit – which ended Wednesday.

  Update: Roland Soong from EastSouthWestNorth has translated an article by Li Ping for Apple Daily on the role of the Central Publicity Department in the Southern Weekend interview:

  The American side asked to arrange for a special interview of Obama by Southern Weekend. Reportedly, Chinese Communist Party Secretary-General agreed. But the Central Publicity Department knew full well that if they ordered Southern Weekend to delete sensitive contents after the fact, it would lead to American dissatisfaction and a diplomatic storm. So they took pre-emptive action by preparing a “question list” that Southern Weekend had to use. Although Southern Weekend is daring, it cannot bear the responsibility of diplomacy. So it had to submit to the tsars of ideology.

  It was rumored that senior officials of the Central Publicity Department were present during the Southern Weekend interview. But the American embassy in China clarified that nobody from the Central Publicity Department was present at the hotel where Obama was staying and where the interview took place. This was yet another tall trick from the Central Publicity Department which forced Southern Weekend into submission while creating evidence of absence at the scene. So the Americans were tricked and even said good things for their victimizers.

  If Southern Weekend followed the instructions of the Central Publicity Department to ask the questions and write the report, why did the Central Publicity Department forbade the mainland newspapers and websites to carry the report? This is likely to be another trick employed by the Central Publicity Department against America and Obama. They want to make America and other important foreign figures see that all reports that overrides its authority shall be restricted. They want to show the ugly face of the Central Publicity Department: if you want to express your views through the Chinese media, you must get past me!

  » Read more
  • November 21, 2009 9:30 PM

• Propaganda Department Bans Online Distribution of Obama Interview (With Photos)

  

  During his trip to China, President Obama was interviewed by Southern Weekend in a very brief piece that had some trouble being distributed. An order from the Central Propaganda Department ordering websites and other media not to reproduce the piece has been circulating on Chinese blogs.

  

  
  From G2G blog, translated by CDT:

  Weiquan Net reported on November 18, “News: The Central Propaganda Department Orders the Banning of President Obama’s Interview with Southern Weekend.” On November 19, this website saw the detailed order banning the republication of Southern Weekend’s interview with Obama. This is an order from a municipal propaganda department. The specific contents are below:

  Order from the Central Propaganda Department News Office: All media including newspapers, other publications and websites are not permitted to reproduce Southern Weekend’s interview with U.S. President Obama.

  Office instructions [hand-written note at bottom]:

  Department Head Wang, please announce this order. All media must implement the instructions outlined above.

  Photos of Obama at the Southern Weekend interview, including a note he wrote to Southern Weekend staff, is making the rounds of Twitter. Posted on Flickr by kirk1031:

  The note reads: “To the Southern Weekly and its readers: I look forward to continuing the ties between our two countries, and congratulate you for contributing to the analysis and flow of vital policy information. An educated citizenry is the key to an effective government, and a free press contributes to that well-informed citizenry. Barack Obama”
  

  Obama holding a copy of Southern Weekend.

  » Read more
  • November 20, 2009 11:07 AM

• Southern Weekend Interviews President Obama (Updated)

  

  As mentioned in our previous post, President Obama sat down for an interview with Southern Weekend. Malcolm Moore at the Telegraph has translated the brief interview. As Moore points out, “Since just about everything that Mr Obama said while he was in China was censored out of the domestic media, the print readership of this interview represents the widest audience of ordinary Chinese that the president is likely to reach”:

  Southern Weekend: In Tokyo and Shanghai you mentioned twice that the US will not seek to contain China’s rise. How will this policy take effect?

  Obama: We have repeated in the current discussions with China that its stability and prosperity is in accordance with US national interests. A prosperous China can help ensure a prosperous and stable Asia. It is just like the stability of South Korea and Japan are beneficial to world peace and US commercial development. The only one thing that can stop this positive outcome is a mutual misunderstanding and misjudgement. This is why we need to not only conduct dialogue on the economics, but also on the security. The more that the US and China trust each other, the smaller the chance of a misunderstanding.

  

  Update: Copies of the paper delivered to some addresses in Beijing did not include the Obama interview. The New York Times reports:

  Yet, as they did throughout the president’s visit, the government authorities appeared to monitor carefully how his words were transmitted to China’s public. They were especially vigilant about Southern Weekly’s report, by some accounts, because Mr. Obama had turned down an interview request from CCTV, the state-run television network.

  Southern Weekly’s publication was held up late into the night, said one of its journalists, who asked not to be identified for fear of retribution.

  The page that contained the interview was missing from the edition delivered to Western news outlets in Beijing.

  The weekly’s Web site did not display the interview with any prominence, and primary Internet portals were ordered to ignore it, Chinese journalists said. “It is not like whatever Obama says is news,” said Yu Wei, a top editor of Sohu.com.

  See also reports from the Christian Science Monitor and Wall Street Journal blog, and a post from Danwei about the interview.

  » Read more
  • November 19, 2009 12:06 AM

• The Key to Corporate Social Responsibility is in Respecting People’s Rights

  

  Tim Hathaway translates a Southern Weekend article on Chinese corporate social responsibility:

  The economics department of the Chinese Academy of Social Sciences recently issued the “2009 Blue Book on Chinese Corporate Social Responsibility” (中国企业社会责任蓝皮书2009). Not surprisingly, it claims that the overall level of corporate social responsibility in China is rather low. However, the two conclusions in the report are worth discussion: Among each kind of ownership structure, central-state owned enterprises have the most social responsibility, and the larger the business, the more social responsibility there is.

  The compilers of this report quoted many statistics and used many complex mathematical formulas to come up with these two conclusions. However, if statistics and mathematical formulas contradict what is commonly observed in society, then by default there must be something wrong with the premise. Unfortunately, this is the very problem with the Blue Book.

  The irony of all this is that the same day the Blue Book was released, the State Electricity Regulatory Commission released a set of contradictory data. It said that the ten largest coal burning electricity producers created 87 billion RMB in environmental damage last year. Of these, Huaneng [华能] and Datang [大唐] are the two largest producers of carbon emissions and therefore have the worst impact on the environment. Yet they rank fourth and fifth respectively on the list of of most socially responsible enterprises. This is proof enough that the Blue Book’s conclusions are unrealistic.

  However, if we take a step back and assume these two conclusions are correct, it is still important to provide an explanation based on the facts as well as some constructive deductions. The extrapolations made by the compilers of the Blue Book, however, are extremely biased.

  » Read more
  • October 26, 2009 9:58 PM

• Manipulation is an Affront to Fairness

  

  At his blog, Tim Hathaway translates a Southern Weekend piece by Li Haipeng on fairness in Chinese sports:

  There were ripples outside the pool this year at the conclusion of the National Diving Competition. One national A level judge who was once the head coach of the Hunan diving team stormed out of the judges area and spoke to the media. He said all 12 gold medals had been decided beforehand and the man responsible is Zhou Jihong (周继红), the assistant director of the National Aquatic Sports Center and the man in charge of the national diving team. This judge also predicted who would win the last four gold medals and two days later he was proven correct.

  It stands to reason that the identity of this whistle blower alone is enough for people to take him seriously. It should be enough to turn this allegation of fraud which occurred in plain sight into a major news story. However, thus far it has been nothing but a storm in a teacup. There has been no substantive impact to speak of.

  As of yet we have not seen any evidence of a regulatory body conducting an investigation. Unless Zhou Jihong’s statements are a complete fabrication, the official response has been lacking. It is possible that they are just a bit slow and that some offices are just a bit behind the times. However, there is another possibility which is a cause for concern. There may be some who hope this will just blow over so they won’t have to take responsibility. But if one matter is left unresolved, there will be a hundred more. With this in mind, a thorough investigation is both fundamental and necessary.

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  • October 22, 2009 3:44 PM

• Wei Yifan (Tim): Too Late to Talk About Xinjiang?

  

  Tim is an American, living in Beijing now. He spent three years in Xinjiang. He published (in English) this essay on Guangzhou based Southern Weekend website:

  The day I arrived to teach at Xinjiang University, I noticed that none of the minorities wore traditional hats or veils. A student explained to me that it is not allowed. Nor are mustaches. He said if students are caught praying they face punishment, even expulsion. A fellow teacher confirmed this later.

  One day a supervisor who was Han Chinese told me that Uyghurs have it very good because of preferential policies. They can have two children and it is easier to get into college. Later that week a Uyghur friend told me of a protest by Uyghur college graduates. He said none of them could find jobs and that the rate of unemployment is much higher than for Han Chinese.

  One day I was teaching a group of seniors in college who were looking for jobs. One young man was frustrated because he said he encountered signs at a job fair that said: “Minorities need not apply.”

  One day a Uyghur friend invited me to a traditional muslim banquet. I was the only non-Uyghur among several hundred. Drinking alcohol is not permitted in Islam but there was plenty of baijiu. Near the end of the night, one guest leaned over and said to me unconvincingly, “We are not supposed to do this but the Han make us [get drunk].”

  » Read more
  • August 4, 2009 3:14 PM

• Reform-Oriented National Print Media Join Netizens’ Battle Against Censorship (Updated with Photos)

  

  While the army of the “Grass-Mud Horse” continues to grow, reform-oriented Southern Group publications such as Southern Metropolis News and Southern Metropolis Weekly have also joined in by reporting on netizens’ coded resistance to the recent Internet crackdown, being carried out under the guise of an “anti-vulgar campaign.”

  The following articles are two of the latest examples. The first one is from the Southern Metropolis Daily, translated by CDT’s Shilin Jia:

  The Post-80s Generation Introduces a Guangzhou Version of “Grass-Mud Horse” And Lets Netizens Write the Handbook.

  The white “grass-mud horse’s” name is “Ge-bi;” the brown one is named “Ma-le.”

  Parodied as one of “China’s ten most divine beasts,” “grass-mud horse” has recently become a popular phrase on the Internet. On March 2nd, five young people from the post-80s generation in Guangzhou introduced their two newly-developed “grass-mud horse” dolls, named “Ge-bi” and “Ma-le” respectively, and their finished products have been brought to and sold in some Guangzhou office buildings.

  The Guangzhou version of the “grass-mud horse” has a “birth certificate.”

  Yesterday, our reporter observed in some office buildings in Guangzhou that “Ge-bi” and “Ma-le” had become popular overnight. The “grass-mud horse” dolls come in brown and white.

  

  These two simple and adorable “grass-mud horses” also have their “birth certificates,” stamped with seals in cardinal red reading “Ma-le Gobi Administration Office of Divine Animals’ Special Seal for the Exclusive Use of Birth Control.” As introduced, these Guangzhou versions of “grass-mud horses” are priced at 39.9 RMB per item.

  Packaging the “grass-mud horse” in online cartoons and fiction.

  One of the developers, “Mai Tang” is an employee in an Internet company. “Mai Tang” told the reporter that after the so-called “ten most divine beasts” became popular on the Internet in February, he and some of his friends, Mai Dou, Mai Guai, and Mai Cong formed a “Mai-X” group and started to think about developing the doll.

  

  “Ge-bi” and “Ma-le” are both made native to Guangzhou. Their birthplace is a toy factory in Fanyu. However, they are not the first generation of “grass-mud horse” toys in the country. “Mai Tang” said that, on March 2nd, the first production of 150 “Ge-bi” and “Ma-le” dolls came fresh-from-the-oven, but by that time, there had already appeared other versions of the “grass-mud horse” like “Mengmeng” and “Leilei” on the internet, which is a pity for the “Mai-X.”.

  The “Mai-X”s have a lot of out-of-the-box ideas. “We do not just want to sell ‘grass-mud horses’; through them, we also want to get more friends who love to play to participate,” “Mai Tang” said. They are packaging “Ge-bi” and “Ma-le” in the form of online cartoons and online fiction. They will also start to make a “Grass-Mud Horse Feeding Handbook” and “Grass-Mud Horse Usage Manual” on their official website. As for the content of the “Feeding Manual,” they will let more netizens input information such as, “In order to feed grass-mud horses well, feed them grass-mud milk and no Sanlu milk.”
  

  The reporter entered “Ge-bi” and “Ma-le’s” official websites yesterday and found that although the site had not been opened for more than two days, its click rate has already surpassed 5000 visits.

  The astonishing online “ten most divine beasts”　

  Recently, there appeared a bunch of posts online about “China’s ten most divine beasts,” listing Baidu Baike entries of ten new species of animals that have never been heard of in reality. The contents of these entries are basically vulgar or parodies, including caonima (grass-mud horse), wenshenjing, qianliexie, dafeiji, jibamao, yindaoyan, juhuacan, yemedie, fakeyou, and chunge.

  

  The reporter’s observation

  Online parodies from “T-shirt” to “toy”

  The online culture of parody [“egao” in Chinese, originating from the Japanese word “Kuso”] has been very popular in recent years. The methods of parodying are also becoming more diverse. In the past, people generally thought parodies were likely to be “T-shirt” art. But the ‘grass-mud horse” toys’ appearance has really raised some eyebrows: So we can also play like this!

  The reporter also noticed that the distribution method these young people use is not traditional window sales but rather through online viral marketing, which attracts a group of players.

  “Mai Tang” told the reporter that around 70 to 80 percent of buyers order the toys online and are mostly post-80s or post-90s generation kids who love cartoon and manga. Online interaction is their most important form of communication. For this purpose, “Mai Tang” especially attached codes on each birth certificate. Why? It is not just to prevent copies but has another purpose. “Some netizens probably do not just want to buy a pair of grass-mud horses. But if they go to online forums and ask who bought a grass-mud horse with the same code as theirs [the partner to their half of their pair], people with the same interests will then group together, and this will make forums more fun.”

  The second example is from a Southern Metropolis Weekly cover story entitled “Who Rules Netizens.” Here is one section of the article, called: The Seven Possible Fates Of An Internet Post, translated by Roland Soong on his ESWN blog:

  Let us imagine that there is an Internet post that we shall nickname Postie. How does Postie a become headline story? From the moment of birth, Postie seeks to become a star. The road is not easy because Postie has to step through a minefield before the “hidden rules” of the editors even apply.

  There are some clearly visible mines, such as banned terms related to politics or pornography. That is relatively easy for Postie. Many other competitors aim for sensationalism and disruption, but they get quickly purged at this first step.

  The next step involves detecting the hidden mines which are not easy to spot. If Postie steps on one, it will die without even knowing why. For example, a netizen in Hebei posted repeatedly on the singer Renee Liu but his posts were always rejected. By checking and testing the contents carefully, he discovered that there was a song title which contains the sensitive keyword “静坐” (for sitting still and meditating) in the middle. Meanwhile a military enthusiast netizen wrote “armor piercing within twenty meters 可在20米内射穿板甲” but it was deleted. It took someone else to point out that the sentence contains the term “内射” (which is used in the adult video industry to refer to ejaculation inside the body) in the middle.

  After passing through the first two stages, Postie now faces the initial scrutiny of the webmaster (=the administrator in charge of the section).

  Read also:

  * Michael Wines: A Dirty Pun Tweaks China’s Online Censors on the New York Times;

  * Ng Tze-wei: ‘Innocent’ Ditty Pokes Fun at Net Crackdown; Childish ‘Grass-Mud Horse’ Song Lampoons Official Censors on the South China Morning Post.

  * Dirty words in the mainstream media on Danwei blog.

  Update: More subtle form of endorsement of “Grass Mud Horse” movement on the comic section of the People’s Daily website.

  » Read more
  • March 11, 2009 10:36 PM

• A Review Of The Chinese Internet In 2008 – Ping Ke (平客)

  

  Ping Ke, a well-known podcaster in Beijing wrote following review on the Southern Weekend, translated by Roland Soong on his ESWN blog:

  The campaign to clean up vulgarity on the Internet is still ongoing. According to Xinhua, 726 websites have been shut down since January 19, 2009. At the same time, the first “human flesh search” of year 2009 has just been issued against railroad officials who are responsible for making tickets so scarce during the Chinese New Year period. Then it was rumored that Xuzhou (Jiangsu province) city has introduced laws to ban “human flesh search” with a maximum penalty of 5,000 yuan. “One step forward and two steps back, or two steps forward and one step back.” Hu Yong used the Minuet to describe the management model of the Chinese Internet.

  

  “Three Pushups” is one of the many online political expressions created in 2008 which signals netizens’ distrust of government agencies. Thanks to ESWN for the photo.

  » Read more
  • January 27, 2009 10:59 AM

• Southern Weekend’s 2009 New Year’s Message: No Winter Is Insurmountable

  

  The following text is the New Year’s Message, from the Editorial Board of China’s leading reform newspaper: Southern Weekend. Thanks to Dr. David Kelly for the translation.

  On the first day of this New Year, our hearts filled with nagging worry due to the economic crisis, news blown by the cold north wind stirring the fallen leaves and snow, let us listen to a distant voice. Ten years ago today, this newspaper published a 1999 New Year’s message: “Let us lend strength to those lacking it, and enable pessimists to push forward.”

  Today, when Southern Weekend is committed to the road of news professionalism, this slogan is still our spiritual standard, we are striving to inherit its ambition, and see it as a great tradition. China has spent a decade passing through the rapids, so much extravagance has already been the butt of jokes, but this precept still returns buzzing as every New Year approaches.

  » Read more
  • January 7, 2009 10:55 AM

• Beijing Piles Pressure on Liberal Media

  

  The Age covers the reported removal of veteran Southern Daily Group editor Jiang Yiping:

  The latest reshuffle, where Southern Media group deputy chief Jiang Yiping will be shifted to a minor agricultural newspaper, follows a long investigation by the Guangdong provincial propaganda department.

  “This is common procedure when the Government is dissatisfied with certain media outlets: reshuffle the person in charge,” said a former Southern editor. “It’s the result of a work team (investigation) from the provincial Government.”

  The editor in question, who is a victim of several previous purges, said there was no ulterior motive behind her removal. “The whole (Southern) media group is going through a new round of management reshuffling,” Ms Jiang said. “My appointment to a new position has nothing to do with the work team (investigation) from the provincial Government and is not like what outsiders say.

  Danwei has translated some reactions to her removal from Chinese bloggers. Some believe this action is just the first move in a coming crackdown on the liberal media. See also a report from Boxun.

  » Read more
  • December 6, 2008 11:20 PM

• Posing Questions about the New US President

  

  Southern Weekly outdid itself in promoting US-China understanding this week. They hosted a Q&A panel- composed of six American intellectuals and one Chinese- about the direction President Barack Obama will take US foreign policy. The Americans include renown political scientists from Brookings Institution, Center for Naval Analyses, Center for Strategic and International Studies, the University of Kansas, the University of Indiana, and the political news editor of the LA Times. The Chinese perspective came from Vice-chairman of China’s Arms Control and Disarmament Association.  Ten questions were posed, including more obvious issues such as selling weapons to Taiwan, human rights, economic protectionism, the exchange rate, and US-North Korea relations.

  It also included a few indirect or unexpected queries such as: Where will the US fight its next war? Will Obama become a dictator with a democratic majority in Congress? Will Obama’s policies turn him into the next Roosevelt or a socialist? The question about Chinese imports even surfaced. “Will Chinese food products appear at the White House dinner table?” The American scholars answered by emphasizing the importance of product quality to US-China relations. Brookings Institution’s Richard Bush took a more reflexive approach, pointing out that improving product safety and quality would first address the needs of Chinese people. “Because, if there is a problem with the product, those who will be most seriously harmed are the Chinese.”

  » Read more
  • November 6, 2008 11:41 PM

• What Has My Country Done For Me?

  

  On the PRC’s 59th National Day, the Guangzhou-based Southern Weekend published a collection of Chinese citizens’ reflections on “what my country has done for me” (There are also three more collections under “what have I done for my country,” “what more my country can do for me” and “what more I can do for my country.”)

  Roland Soong translated some of those quotes on his ESWN blog, here are some samples:

  (Beijing university lecturer)

  I came from a poor village in Henan province. From elementary school to my doctorate degree, the state provided basically free education. During my university year in 1990, the state began to collect tuition fees at 450 RMB per annum.

  Presently, the state provides a basic and safe social order and it guarantees economic development. The state-run university is the source of my income. The state provides benefits such as medical insurance, housing, pension and so on.

  I grew up on this earth. This is my motherland. The love for this earth and its people is a seed that was planted deep in our hearts. If we love China, we should work hard to make it even better.

  (Guangzhou IT company employee)

  The state has spent quite a bit on me. Each year, they introduce new campaigns and slogans so that I can be a good person who does right for the country. It repeatedly demanded that I do the “honorable” thing by paying my taxes, adhering to the family planning laws, obeying public morality, trusting the government and listening to their calls. I cannot deny that the country taught me to become an obedient person.

  Objectively speaking, when my mother had to stay at the hospital this year for her operation, 50% of the expenses were paid for by the state. This is the biggest thing that the state has done for me. My son will not have to pay tuition fees beginning this year, as free education gets implemented.

  (Nanchang university teacher)

  The country did at least three things for me — the long-lasting culture, the precious peace and the dignified self-pride of a people. But the safety provided by the country is imperfect, because I almost lost my life during a Beijing robbery and I ate unsafe dairy products.

  (Shanghai financial analyst)

  The country has done many things. They established the elementary schools, secondary schools and the universities which provided me with more than 10 years of education. They established the social science institutes and newspapers which provided me with a job. They turned housing into a free market, which was better than squeezing in government dormitories even though it is more expensive. They gave the impetus for everybody to seek wealth, so that I can be at the same level as rich people. They established the banks and the capital markets to help me and many friends to find jobs that interest us. We learned about the K-curve graphs, the American stock market and the global economic trends. We increased our insight while making money sometimes — even though the newly listed companies took away a lot of money.

  (Southern Weekend website user)

  The country provides me with a stable living environment, particularly in Guangzhou. I will admit frankly that I am homosexual, and I can be intimate with my lover openly in certain places.

  » Read more
  • October 3, 2008 9:14 PM

• Fu Jianfeng: “Let Me Skin Sanlu Alive”

  

  Fu Jianfeng is an editor at Southern Weekend. He wrote the following post on his blog, three days after the Sanlu Tainted Milk story was published in Chinese media. Translated by the EastSouthWestNorth blog:

  Actually, our reporter He Feng had received the information at the end of July that more than 20 babies were hospitalized for kidney stones in Tongji Hospital, Wuhan city, Hubei province as a result of consuming the tainted Sanlu milk powder. But for reasons that everybody knows, we were not able to investigate the case at that time because harmony was needed everywhere. As a news editor, I was deeply concerned because I sensed that this was going to be a huge public health catastrophe. But I could not send any reporters out to investigate. Therefore, I harbored a deep sense of guilt and defeat at the time. I tried my test to tell all the friends and acquaintances not to use the Sanlu milk powder.

  At the time, our reporter He Feng was already checking out the situations at a number of hospitals in Hubei, Hunan and Jiagxi. The doctors were highly suspicious that there was a problem with Sanlu. They reminded every family that came to the hospital to get their babies treated not to use Sanlu.

  At the time, I checked Baidu and all I could find were doubts being raised by some parents about this brand.

  We could only wait, wait, wait.

  » Read more
  • September 21, 2008 9:00 PM

• A ‘Crisis Alert’ Conference of Party-Wide Significance*

  

  This is an article from Southern Weekend, thanks to David Kelly for the translation:

  The Central Conference held on June 13 proved once again that “stability” has become the main politics, that it is the basic starting point for us to grasp all current policy trends.

  This meeting is equivalent functionally to the previous year’s economic work in the wrap-up session, but compared to a year ago, it’s a little earlier. I believe that is due to the earthquake, the Olympic domestic and international economic and financial situation and the latest changes, forcing the centre to bring things forward, which means that, having introduced the “State Department regulations on reconstruction after the Wenchuan earthquake” and the successful risk abatement at theTangshanyan quake lake, the focus of the Centre’s work returned to the macro global issues.

  More importantly, this meeting is ranked higher than any session of a year ago, even higher than that of the Central Economic Work Conference. Unlike in previous years when economic work was summed up at the level of the State Council or the Politburo, this meeting was not only attended by the Central Politburo Standing Committee but in addition all central ministries and provinces, autonomous regions, leaders of some national enterprise, large military units and armed police forces all too part. An economic conference at the highest party level shows in itself that how concerned the Centre is about the new situation in the economic field, and needs to carry out party-wide mobilisation.

  The notice of the opening session stressed the significance of this meeting: “It is held in context of many new complicated factors in the international and domestic situation, and of many new challenge facing the party and the state.” The meeting considered that at present, “achieving this year’s economic and social development targets have entered a key time,” and that “this year’s economic and social development faces a most complex situation and uncertain factors have increased.”

  Expressions like “severe challenges,” “critical period” and “quite complex,” etc., show that judgment on the current situation is not optimistic, and bringing the meeting forward proves that, given the new “grim situation,” some established principles and policies require urgent adjustment.

  On this level, in addition to unifying thinking and adjusting policies, this is more a “crisis alert” meeting of party-wide significance. So, what is meant by “new complic ated factors”? In addition to the high domestic inflation, the Olympics and post-disaster reconstruction, the international “new challenges” must refer to “ultra-high oil prices” and the “Vietnamese financial crisis,” etc.; the subprime loan crisis cannot be a “new challenge.” Regarding threats to “stability,” domestic risks are still controllable, it is international risks that are non-controllable, the purpose of the meeting, is to use controllable domestic resources to fend off international non-controllable risks. The policy of assuring growth has been significantly strengthened.

  This meeting makes fundamental adjustments to the arrangements established by the 2008 Central Economic Work Conference and the State Council executive meeting for the First Quarter in the following three areas:

  The emphasis on economic growth will be strengthened, on the basis of “anti-inflation,” policy efforts to “guarantee growth” will be significantly strengthened; “double defence” may become “one defence and one guarantee.”

  In support of this point is that in the centre’s setting the tone of the current economic situation, there is no expression of the “three excesses” as in the past.[1] They have been replaced by “economic and social development is facing a very complicated situation and uncertain factors have increased.” Clearly, what the Centre is worried about is no longer overheating, but whether “factors of uncertainty” including inflation, foreign demand, will depress the economy excessively.

  This corresponds with the central macro-policies on the overall arrangements, wording about tightening like “control investment growth rate, control monetary and credit” has been cancelled, , but stressed that the policy of “predictability, targeting and flexibility.”

  Fiscal policy from “stable” to “positive”

  The second major adjustment, similar to 1998 may be an important change: We believe that financial policy will gradually shifted from “prudent” to “positive” core.

  This entire meeting never mentioned monetary policy as part of macro policy, but raised it as follows in regulation and control policy as a general principle: “increase the prudent financial policy for restructuring, protection of people’s livelihood, support for post-earthquake reconstruction, completing all the tasks of economic and social devel opment.” We would argue that whether it’s the fight against inflation, strengthening social security, or improving people’s livelihood and solving the problems they are most concerned about, the most direct and practical interests, the Central will lean more on financial strength to pay for stability with proactive fiscal policy.

  Unlike in1998, when special treasury bonds were dedicated to infrastructure building, the content of proactive fiscal policy this year, will be more reflected in the form of subsidies to bear the social costs of inflation, including high oil prices and subsidies, agricultural subsidies, social security, industrial restructuring, and secondary income distribution. It is worth noting that this meeting never mentioned monetary policy. There are two possible explanations, first, neither appreciation nor monetary tightening, are effective in controlling inflation, monetary policy has been excluded from the core policy; secondly, the Centre has reached no unified conclusion on whether to continue “tightening” monetary policy, so it has avoided the issue. We believe that the former is the more likely, although this does not mean that monetary policy will not continue tightening.

  Anti-inflation: comprehensive price control in the short-term

  The third major adjustment that we need to focus on the interpretation, the Centre’s unprecedented attention to the inflation issue, and possible means to be adopted.

  During the meeting, “anti-inflation” was raised as the primary task of follow-up work; in overall terms, “anti-inflation” is the core content of “ensuring overall social stability” in the economic dimension, especially in view of the current chaotic situation in Vietnam, the direct factor is high inflation triggering outflows of foreign capital, and then threatening financial security, and forcing the Government to lower economic growth; while in terms of the root cause, the source is still in grain prices and oil prices. The Central Conference discussed inflation, was also focus “major commodity” prices typified by agricultural products.

  Although the content of the meeting made no straightforward, “the prices”, but stressed that the “comprehensive use of economic, legal and necessary administrative means.”

  Well, how wide can “administrative prices” be?

  It can be affirmed that the scope of controlled price commodities will take in enterprises producing “basic life necessities.”

  Two aspects are difficult to answer: first, after price limitations on “basic life necessities,” who is going to produce the expanded supplies? Second, administrative price controls distort the entire market system, should not the long-distorted refined oil and natural gas prices be increased?

  We note that while the Central meeting is “doing everything possible to prevent general price levels rising too fast,” it once again stressed the importance of agriculture and investment. The meeting called for “strengthening production of grains, edible vegetable oil, meat and other basic necessities and other scarce commodity, and improving the reserve system to ensure the effective supply of important products and of materials.”

  “To grasp agricultural production properly, it is necessary to implement the various policies for supporting agriculture and strengthen investment in it.” This leads to a question, the only way to limit prices on the one hand while expanding supply on the other is to intensify financial subsidies for agricultural production. But the problem is that the factors involved in agricultural production are very broad; if prices of other relevant aspects are not limited, rises in costs of agriculture will be rigid. Will financial subsidies be able to sustain producers of agricultural products and maintain enough drive to produce?

  If prices in related aspects are restricted, the area under pressure will be unprecedented.

  It is said that the NDRC recently convened an internal meeting of Division and Section heads, clarifying that the focus of control in the second half of the year will shift to PPI (producer price index), and mainly take three forms: strengthening control of factory prices of industrial products; further restricting export of major industrial fuels; and strengthening oversight and control of investments in fixed assets.

  Of these, the prices of main industrial products typified by steel and coal will be further controlled, and prices of the steel, cement and other key materials used in reconstruction of disaster regions are required to revert to levels prior to May 11. In addition, the price authorities of other provinces at the same time are required to sum up local realities, based on of relevant provision the price law, to take timely temporary price intervention measures, through limiting posted prices or profit margins, etc., to maintain price stability.

  Relevant NDRC officials stated that further tariff-based restrictions on export of related products were not ruled out, exports of coal, steel, oil etc., will face further controls.

  The Government has given up rescuing the market, and is turning towards institution building

  The current stock market has entered a very sensitive period, investor sentiment after the drop shows continuing “instability”, but the mills have kept circulating hearsay and conjecture about a “rescue”.

  In our judgment, however, according to the spirit of this meeting, administrative levels are incapable of “to save the market” in the short term. The index is likely to decline further to the “share market reform core value range” of 2200-2800,

  The spirit that this Central meeting expressed regarding the stock market, from “to prevent big ups and downs” of late last year, through the “stable and healthy development” in the Government Work Report earlier this year, has now become “promote the healthy development of capital markets.”

  This meeting removed “stable,” mention of “healthy” but once. This shows that the central government has clearly give up the any policy intent of a “rescue” in the near future.

  In view of the central government’s giving up considering “rescue”, and against the backdrop of entering a “extraordinary period” in macroeconomic terms, accelerating institution building has become the sole “political task” of the Securities Regulatory Commission

  Therefore, there will be greater progress in basic institution building in the latter half of the year.

  The highlight of the next wave of reform should be the launch in late 2008 or early 2009 of trading mechanism, distribution system and more robust “sise of the non-lifting of the ban” system as the representative of the “reform of the system based on the second stage.”

  After the market “breaks 3000″—once the central government gives up “rescue,” the only way to “stabilize” it temporarily —it will continue to decline, and will return to the “value centre of the share reform period, and start fluctuating and adjusting around this centre

  Perhaps, to some extent, the bear market will be of even greater significance to China’s capital market, because it makes people understand the potential crisis more profoundly, and effectively and fundamentally begin to solve the problem, completely abandoning the fantasy of rescue (investors) and intervention (administrators).

  (The authors are Chief Commentators, Bolan Financial)
  ________________________________

  *’ Wang Xiaobing, Li Hongtu and Liu Tianzhi, “Yici quandang yiyi de ‘weiji jingshi’ dahui” [A 'crisis alert' conference affecting the party nationally], Nanfang zhoumo, 19 June 2008 [王晓兵、李宏图 、刘天智： "一次全党意义的'危机警示'大会"， 南方周末，2008年6月 19日 (http://www.nanfangdaily.com.cn/epaper/nfzm/content/20080619/ArticelC18002FM.htm).].

  [1] [Translator] Excessive growth of investment, excessive money supply, excessive foreign trade surplus. See Wang Biqiang, “Renda wenze zhengfu diaokong ’san guo’” [National People's Congress wants government accountable for curbing the 'three excesses'], Jingji guancha wang, 3 September 2007 [王毕强： "人大问责政府调控'三过'"， 经济观察网，2007年9月 3日 (http://www.eeo.com.cn/Politics/beijing_news/2007/09/03/82253.html).].

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